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2019/06/30 CAFR- -1' OF 1owl low rrZA� r ■ ■ •_.. - + COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR FISCAL YEAR ENDED JUNE 30, 2019 ' f Wr AD City of Rancho Cucamonga, California Comprehensive Annual Financial Report Year Ended June 30, 2019 Prepared by the City of Rancho Cucamonga Finance Department Tamara L. Layne Finance Director THIS PAGE INTENTIONALLY LEFT BLANK CITY OF RANCHO CUCAMONGA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal ............. CityOfficials................................................................................................................................... xxxii Organization Chart .........................................................................................................................xxxiii Certificate of Achievement for Excellence in Financial Reporting ................................................ xxxiv FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT.............................................................................................. 1 MANAGEMENT'S DISCUSSION AND ANALYSIS............................................................................ 5 BASIC FINANCIAL STATEMENTS Government -Wide Financial Statements: Statement of Net Position.................................................................................................... 27 Statement of Activities.......................................................................................................... 28 Fund Financial Statements: Balance Sheet - Governmental Funds................................................................................. 30 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position.......................................................................................... 35 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds......................................................................................... 36 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities.......................................................................................................... 39 Statement of Net Position - Proprietary Funds.................................................................... 40 Statement of Revenues, Expenses and Changes in Fund NetPosition - Proprietary Funds.......................................................................................... 42 Statement of Cash Flows - Proprietary Funds..................................................................... 44 Statement of Fiduciary Net Position - Fiduciary Funds ........................................................ 48 Statement of Changes in Fiduciary Net Position - Fiduciary Funds .................................... 49 Notes to Financial Statements.................................................................................................... 51 CITY OF RANCHO CUCAMONGA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS Page Number REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information........................................................................ 104 Budgetary Comparison Information: Budgetary Comparison Schedule - General Fund............................................................. 105 Budgetary Comparison Schedule - Development Impact Fees ......................................... 106 Budgetary Comparison Schedule - Lighting Districts........................................................ 107 Budgetary Comparison Schedule - Housing Successor Agency ....................................... 108 Budgetary Comparison Schedule - Fire District................................................................. 109 Pension Information: Schedule of Changes in Net Pension Liability and Related Ratios - Miscellaneous Plan - Agent Multiple -Employer Plan ...................................................... 110 Schedule of Plan Contributions - Miscellaneous Plan - Agent Multiple -Employer Plan......................................................................................... 111 Schedule of Proportionate Share of the Net Pension Liability - Miscellaneous Rate Plan - Cost Sharing Multiple -Employer Plan .................................. 112 Schedule of Plan Contributions - Miscellaneous Rate Plan - Cost Sharing Multiple -Employer Plan............................................................................. 113 Schedule of Proportionate Share of the Net Pension Liability - Safety Rate Plan - Cost Sharing Multiple -Employer Plan ............................................... 114 Schedule of Plan Contributions - Safety Rate Plan - Cost Sharing Multiple -Employer Plan............................................................................. 115 Schedule of Changes in Net Pension Liability and Related Ratios - PARS Retirement Enhancement Plan............................................................................ 116 Schedule of Plan Contributions - PARS Retirement Enhancement Plan .......................... 117 Other Post -Employment Benefit Information: Schedule of Changes in Net OPEB Liability and Related Ratios ...................................... 118 Schedule of Contributions - OPEB..................................................................................... 119 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet - Nonmajor Governmental Funds .................................................. 124 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds................................................................ 132 Budgetary Comparison Schedules (Budgetary Basis) - Special Revenue Funds: GasTax.............................................................................................................................. 139 Recreation.......................................................................................................................... 140 Beautification...................................................................................................................... 141 Landscape Maintenance Districts...................................................................................... 142 PedestrianGrant................................................................................................................ 143 Community Development Block Grant............................................................................... 144 AssessmentAdministration................................................................................................ 145 CITY OF RANCHO CUCAMONGA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS Page COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES (Continued) Budgetary Comparison Schedules (Budgetary Basis) - Special Revenue Funds (Continued) Air Quality Improvement..................................................................................................... 146 MasiCommerce Center..................................................................................................... 147 MeasureI........................................................................................................................... 148 LibraryServices................................................................................................................. 149 PublicSafety Grants.......................................................................................................... 150 UsedOil Recycling............................................................................................................. 151 Library Services Grants...................................................................................................... 152 AB 2928 Traffic Congestion Relief..................................................................................... 153 LitterReduction Grant........................................................................................................ 154 SAFETEA-LU Grant........................................................................................................... 155 UndergroundUtilities.......................................................................................................... 156 Safe Routes to School Program........................................................................................ 157 Citywide Infrastructure Improvement................................................................................. 158 Proposition1 B.................................................................................................................... 159 Public Resource Grants..................................................................................................... 160 Integrated Waste Management.......................................................................................... 161 SB1—TCEP....................................................................................................................... 162 Budgetary Comparison Schedules (Budgetary Basis) - Capital Project Funds: CapitalProjects Fund......................................................................................................... 163 Combining Statement of Net Position - Internal Service Funds ............................................... 166 Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds.............................................................................. 167 Combining Statement of Cash Flows - Internal Service Funds ................................................ 168 Combining Balance Sheet - All Agency Funds......................................................................... 172 Combining Statement of Changes in Assets and Liabilities - AIIAgency Funds...................................................................................................................... 178 CITY OF RANCHO CUCAMONGA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2019 TABLE OF CONTENTS STATISTICAL SECTION Financial Trends: Page Number Net Position by Component - Last Ten Fiscal Years......................................................... 185 Statement of Activities (Condensed) - Last Ten Fiscal Years ........................................... 186 Fund Balances of Governmental Funds - Last Ten Fiscal Years ...................................... 188 Changes in Fund Balances of Governmental Funds - LastTen Fiscal Years........................................................................................................ 189 Revenue Capacity: Assessed Value and Estimated Actual Value of Taxable Property ................................... 190 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years ................................ 191 Principal Property Taxpayers - Current Year and Nine Years Ago ................................... 192 Property Tax Levies and Collections - Last Ten Fiscal Years ........................................... 193 Principal Sales Tax Remitters - Current Year and Nine Years Ago .................................. 195 Debt Capacity Ratios of Outstanding Debt by Type - Last Ten Fiscal Years ............................................ 196 Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years .............................. 198 Direct and Overlapping Debt.............................................................................................. 199 Legal Debt Margin Information - Last Ten Fiscal Years .................................................... 200 Pledged -Revenue Coverage - Last Ten Fiscal Years ....................................................... 201 Demographic and Economic Information: Demographic and Economic Statistics - Last Ten Calendar Years ................................... 202 Principal Employers - Current Year and Nine Years Ago .................................................. 203 Operating Information: Full -Time and Part -Time City Employees by Function - Last Nine Fiscal Years ............... 204 Operating Indicators by Function - Last Nine Fiscal Years ................................................ 205 Capital Asset Statistics by Function - Last Nine Fiscal Years ........................................... 206 City of Rancho Cucamonga Comprehensive Annual Financial Report June 30, 2019 Introductory Section THIS PAGE INTENTIONALLY LEFT BLANK Mayor L. Dennis Michael I Mayor Pro Tern Lynne B. Kennedy Council Members William J. Alexander, Sam Spagnolo, Diane Williams City ManagerJohn R. Gillison 10500 Civic Center Drive I P.O. Box 807 1 Rancho Cucamonga, CA 91729-0807 1909.477.2700 1 www.CityofRC.us December 9, 2019 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Rancho Cucamonga: It is with great pleasure that we present to you the City of Rancho Cucamonga's Comprehensive Annual Financial Report for the Fiscal Year ended June 30, 2019. The Comprehensive Annual Financial Report consists of three sections: introductory, financial, and statistical. The introductory section includes this transmittal letter, a list of principal officials, and the City's organizational chart. The financial section includes the independent auditors' report, management's discussion and analysis (MD&A), the basic financial statements, notes to financial statements, and combining and individual fund statements and schedules. The statistical section sets forth relevant financial and non -financial data depicting the City's historical trends and other significant facts. This report consists of management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all information presented in this report. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework that is designed both to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with generally accepted accounting principles (GAAP). As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Rancho Cucamonga's financial statements were audited by Lance, Soll and Lunghard, LLP, Certified Public Accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Rancho Cucamonga for the Fiscal Year ended June 30, 2019, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Rancho Cucamonga's financial statements for the Fiscal Year ended June 30, 2019, are fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. The independent audit of the financial statements of the City of Rancho Cucamonga was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City of Rancho Cucamonga's separately issued Single Audit Report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of an MD&A. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Rancho Cucamonga's MD&A can be found immediately following the independent auditors' report. I. PROFILE OF THE CITY OF RANCHO CUCAMONGA General Information The City of Rancho Cucamonga currently has an estimated population of 179,412 and encompasses approximately 40.2 square miles. It is located between the cities of Upland to the west, Ontario to the south, Fontana to the east and is in the western section of San Bernardino County which is in the southern part of the State of California. The local economy includes a diverse business base of office, light manufacturing and distribution, and retail which emphasizes the City's efforts at attracting and retaining sales tax generating businesses to help provide a stable financial base. Government The City of Rancho Cucamonga (the City) was incorporated in 1977 as a general law city under the provisions of the Government Code of the State of California, and it operates under the Council -Manager form of city government. Prior to the November 2016, General Election, all City officials were elected at large including a Mayor and four City Council members, a City Clerk, and a City Treasurer. On November 8, 2016, the residents of the City voted to approve Measure Q which was then carried, adopted, and ratified by the City Council on December 7, 2016. Measure Q approved the City Council be elected by geographic districts with the Mayor elected at large. Four districts were created as a result of the Measure, and the Mayor and Council members are elected on a staggered basis for a term of four years. There is no limit on the number of terms an individual can serve as Mayor or as Council members. The Mayor and City Council appoint the City Manager and City Attorney. Reporting Entity and Its Services The City has included within its reporting entity for financial reporting purposes all agencies for which the City is financially accountable. These agencies include the Rancho Cucamonga Public Improvement Corporation, the Rancho Cucamonga Fire Protection District, the Rancho Cucamonga Library, and the Rancho Cucamonga Public Financing Authority. The City provides accounting services to all these agencies. Additional information on these agencies can be found in Note 1 of the notes to financial statements. The City of Rancho Cucamonga is a general law city governed by the State of California Government Code and local ordinances and provides quality service by blending the talents of City staff and utilizing other agencies. Certain services necessary to continue the high quality of life in Rancho Cucamonga such as water and sanitation (i.e., sewage) are furnished by other specialized agencies. The City provides building safety regulation and inspection, street lighting and beautification, land use planning and zoning, housing and community development services, maintenance and improvement of streets and related structures, traffic safety maintenance and improvement, animal care and services, and a full range of recreational and cultural programs for citizen participation. Police protection services are provided through an on -going contract with the County of San Bernardino Sheriff s Department. ii The Rancho Cucamonga Public Improvement Corporation was established for charitable purposes including rendering financial assistance to the City by financing, acquiring, constructing, improving and leasing public improvements for the benefit of residents of the City and the surrounding area. The Rancho Cucamonga Fire Protection District was taken over from the County of San Bernardino as a subsidiary district of the City in July 1989 for the purpose of fire suppression within its boundaries. The Rancho Cucamonga Library became a part of the City when it withdrew from the San Bernardino County Library System in July 1994. It strives to inform and enrich our community by providing access to traditional and technologically innovative resources. It also supports and encourages education and the love of reading in a welcoming atmosphere with a knowledgeable, service -oriented staff. The Rancho Cucamonga Public Financing Authority was established to facilitate the financing and the refinancing of construction, expansion, upgrading and improvement of the public capital facilities necessary to support the rehabilitation and construction of residential and economic development within the City. On January 11, 2012, the City elected to become the Successor Agency for the former redevelopment agency in accordance with Assembly Bill 1X 26. See Note 17 of the notes to financial statements for more information on the Successor Agency of the Former Redevelopment Agency. Local Economy During Fiscal Year 2018/19, the City experienced continued growth of sales and property taxes; however, we remain very mindful of the long growth cycle which, as economic patterns have continuously shown, precedes a downturn. As we move into Fiscal Year 2019/20, the City will have nine years of steady of continuous growth, and there is some dispute amongst economists whether we are still in an expansion or nearing the peak. However, there is no argument that the current expansion has been quite long, much more so than normal. Unemployment in the City of Rancho Cucamonga is currently at 3.20% as of March 2019. Full employment is typical at a peak and, generally, full employment is under 4.00%. The City's unemployment figures are consistently better than the County of San Bernardino which reported 4.30% and 4.10% in 2019 and 2018, respectively. The City is located within a regional area that is the jobs engine for California, and California is the jobs engine for the United States. On average, nearly 50,000 jobs a year, many of which are middle class jobs, are added from the region, and the City is expected to grow between 1,500 to 2,000 jobs per year over the next five to seven years. Additionally, the jobs being generated by businesses in Rancho Cucamonga and throughout California are also paying well. Median household incomes in Rancho Cucamonga are right at the low $90K level. One of the main drivers is housing growth, which is relatively affordable compared to the neighboring Los Angeles and Orange Counties. Home prices continue to appreciate with the median house price in the City being approximately $607K for single-family detached and $367K for attached homes. These prices are reflective of the significant interest for residential and mixed -use projects within the City. With greater access to amenities than many surrounding communities, and the strongest school districts in the region, both for rent and for sale properties remain relatively affordable, by Los Angeles and Orange County standards, and are desirable locations to raise a family. ill Budgetary Control The City adopts an annual budget where each department's budgeted appropriations are controlled at the character of expense level. These levels are defined as personnel services; operations and maintenance; capital outlay; debt service; cost allocation; and transfer out. Although the budget is monitored at the character of expense level, the legal level of budgetary control, that is the level at which expenditures cannot exceed appropriations, is the fund level within the General Fund, Special Revenue, Debt Service, and Capital Projects Funds. Budgetary control is further maintained by the use of an encumbrance system. Revenues are also estimated annually in the adoption of the annual budget. Revenues and expenditures are monitored throughout the year with quarterly updates provided to the City Council. Long-term Financial Planning Annually, the City updates a five-year Capital Improvement Program (CIP). Planned capital expenditures from special, non -operational funds for Fiscal Year 2019/20 total $79,127,950. Some of the larger projects included in the CIP include the Etiwanda Grade Separation ($52,175,000); the Advance Traffic Management System — Phases 1 and 2 ($6,867,000); and the Public Works Services Department's Warehouse Expansion ($2,140,000). Debt Administration The City of Rancho Cucamonga, as a general law city, is restricted from incurring general obligation bonded indebtedness that would exceed 3.75% of the total assessed valuation of all real and personal property. In Fiscal Year 2018/19, through the Rancho Cucamonga Financing Authority, the City sold $12.195 million in bonds to build and connect over 50 miles of citywide conduit and fiber optic cabling under a five-year master plan, providing not only municipal broadband services but also connecting the City's core facilities and infrastructure. Capital costs of the project will be recovered using revenue from municipal broadband customers managed by a private company to minimize operating overhead costs for the City. II. HIGHLIGHTS OF FISCAL YEAR 2018/19 Economic and Community Development The Economic and Community Development Department continues to work on improving economic growth and quality of life in the community. The mission of Economic Development is to foster a strong local economy and create economic opportunities for investors and entrepreneurs, and to facilitate job growth. Economic Development staff, along with partners across the City, offer services and support to accomplish these goals and build a supportive economic ecosystem. During the past fiscal year, the City partnered with several agencies to help support and grow small businesses. For example, the City's partnership with the Inland Empire Small Business Development Center (SBDC) provided one-on-one business consultation meetings to 155 business owners and entrepreneurs. As a result, fifteen new jobs were created from these efforts. The City also hosted business workshops throughout the year lead by consultants from the SBCD. A total of 12 workshops were held on various business -related topics and 185 people attended the workshops. The City, in collaboration with the County of San Bernardino and several west end cities, hosted the annual West End Job Fair at the Old Ontario Airport. A total of 86 companies participated in the event, offering full-time and part-time employment. 1V The City continues to work closely with the Greater Ontario Tourism and Marketing District (GOTMD). The role of the GOTMD is to increase tourism and event destination while increasing overnight stays. Most recently the City worked with GOTMD staff to create an "I am Rancho" program to educate frontline City and hotel staff on things to do in Rancho Cucamonga. Last year we saw the opening of the Residence Inn by Marriott on Haven Avenue. Currently, there is one hotel under construction that is projected to open in late 2020, and one boutique luxury hotel at Base Line Road and Day Creek Boulevard, one block from Victoria Gardens, that will break ground in early 2020. These hotels will add to the current ten business class hotels that exist in the City. Economic Development activities have also included marketing efforts to enhance the City's business -friendly image and promote the City as a place where business will thrive. During this fiscal year the City was instrumental in assisting with the opening of Haven City Market. Haven City Market is a gourmet food hall exhibiting 18 various eateries. The food hall has had tremendous success since its opening and has increased pedestrian traffic in a center that was void of activity after business hours. The City continues to work with the San Bernardino County Transportation Authority (SBCTA) and Creative Housing Associates to develop ten acres of land adjacent to the Metrolink Station in Rancho Cucamonga. The proposed project attempts to provide a product of housing, entertainment, and retail experience not currently found in Rancho Cucamonga. Affordable Housing Affordable rental housing for families and seniors who want to live and work in Rancho Cucamonga continues to be a challenge. The elimination of redevelopment significantly diminished ongoing housing resources. Despite the lack of these resources, some limited proceeds from previously issued housing bond funds are available for housing projects. The limited resources available through the remaining bond proceeds are significantly less than what redevelopment had access to in the past and these sources are one-time money and not available for on -going programs. Nevertheless, these proceeds have allowed the City to finance two final projects in the community. The first project is a second phase to Villa Pacifica. Villa Pacifica II includes 40-units of senior affordable housing. This project was completed in May of 2019 and is fully leased. The second project is Day Creek Villas, a 140-unit senior affordable housing project. This project is currently under construction and is anticipated to be completed at the end of 2020. A secondary source of funding is received from residual receipts generated from existing housing loans negotiated by the former redevelopment agency. These funds have allowed the City to implement and manage a Mobile Home Rental Assistance Program. This program provides up to $100 in assistance for the space rental payment for mobile home owners. The program operates in all eight of the mobile home parks located in the City and assists approximately 45 families. v Engineering Services The Engineering Department is led by the Engineering Services Director/City Engineer and consists of four sections. The following provides highlights of the major accomplishments achieved by each section during the reporting period and a description of the major capital projects completed. Capital Management Section The Capital Management Section is responsible for the development and implementation of the City's Capital Improvement Program and the design, inspection and contract administration of various City -funded public improvement projects including paving, curb and gutter, sidewalks, landscape and irrigation, storm drains, traffic signals, City buildings, and park facilities. A continued priority for the Section has been maintaining the Annual Comprehensive Capital Improvement Program document which gives a five-year forecast for each active capital endeavor budgeted by the City. A total often Engineering Services Capital Improvement Projects amounting to just over $8 million were completed during Fiscal Year 2018/19. Capital projects completed during Fiscal Year 2018/19 include: • 6tn Street from Milliken Avenue to Charles Smith Avenue Pavement Rehabilitation • Jersey Boulevard from Haven Avenue to Rochester Avenue Pavement Rehabilitation • Four Traffic Signal Installations at East Avenue/Miller Avenue, 6th Street/Rochester Avenue, Milliken Avenue/5th Street and Rochester Avenue/Jersey Boulevard • Traffic Signal Modifications at 15 Locations • Sidewalk Improvements for Bus Stops at 5 Locations • Detention Basin Improvements at Rancho Wash • Pacific Electric Trail Safety Enhancements and Green Bike Lanes along Base Line Road Capital projects anticipated for Fiscal Year 2019/20 include: • Highland Avenue from Archibald Avenue to Haven Avenue Pavement Rehabilitation • Hermosa Avenue from Banyan Street to 300 feet N/O Wilson Avenue Pavement Rehabilitation • Church Street from Haven Avenue to Milliken Avenue Pavement Rehabilitation • Two Traffic Signal Installations at 6th Street/Hellman Avenue and East Avenue/Highland Avenue • Five (5) Flashing Yellow Left -Turn Arrows along Milliken Avenue and Arrow Route • Seven (7) Flashing Yellow Left -Turn Arrows along Day Creek Boulevard and Base Line Road • Implementation of Advance Traffic Management System Phase 1 (Haven and Foothill Corridors) • Construction of the Etiwanda Avenue Grade Separation Project vi Transportation Development Section The Transportation Development section of Engineering Services is staffed by a team of engineers and customer -oriented individuals. The group provides information, direction, and superior customer support to residents, business owners, developers, utility companies, other departments within the City, and the various school districts. This group is responsible for the review and conditioning of proposed development and utility work in the public right-of-way, as well as the technical plan check and permit issuance of these types of projects. The group is involved in the construction and operation of traffic control devices and plans for future traffic and transportation needs. The team works closely with Public Works to ensure these traffic control devices are installed correctly per City, State, and Federal standards. The team issues right-of-way permits through the Accela system, handles research requests, and explains Department polices to customers via email, over the phone, or at the public front counter. During Fiscal Year 2018/19, a combined total of 2,485 permits were issued through this section for Right-of-way, Lane Closures, Oversize Load, Onsite Sewer and Water, and Grading permits. Other project highlights include the joint venture between the Capital Management and Transportation Development sections to continue installing the flashing yellow arrow signals throughout the City. Both groups worked closely together with Lewis Development on the installation of the new traffic signals at The Resort Development. The Transportation Development group assisted numerous developers and property owners with the entitlement of their projects and is currently reviewing the technical submittals and plans of these key development projects. Environmental Programs Section The Environmental Programs Section is responsible for administering the City's environmental programs which aim to encourage the preservation of natural resources and prevent storm water pollution, thereby ensuring compliance with State and Federal mandates such as AB 939, AB 341, AB 1836, and the National Pollutant Discharge Elimination System (NPDES). Highlights for this year include: providing service to 7,463 participants and processing 432,854 pounds of waste at the Household Hazardous Waste Collection Facility, conducting 926 storm water inspections, participating in 25 community events, 14 school presentations. This year the section applied tax assessments and title liens on 661 properties to recover approximately $225,357 in delinquent trash account payments on behalf of Burrtec Industries, the City's waste hauler. Municipal Utility Section The Rancho Cucamonga Municipal Utility (the Utility) operates as a small electric utility providing electric service to both commercial and residential developments including the Victoria Gardens Regional Shopping Center as well as surrounding retail and commercial developments that were built within the Utility's service territory. The Utility has over 1,000 metered customers and is continually growing. The Utility continues to embark on its mission to be a greener utility by utilizing renewable energy as part of its energy portfolio and continues to extend its distribution circuit by placing new pad mounted equipment switches and transformers along new development projects. The Utility also manages the operations and maintenance of over 15,000 citywide streetlights. Additionally, the Utility has begun construction of the City's Fiber Optic Master Plan, which will expand the City's fiber optic network infrastructure to key strategic areas, in a phased approach, in order to begin providing high speed broadband as an economic development tool for City residents and businesses. The City entered into a public -private partnership with a Rancho Cucamonga -based broadband retail provider, and is looking to begin providing service to limited areas starting within the fourth quarter of 2019. vii Public Works Services The Public Works Services Department maintains the City's growing infrastructure of buildings, streets, storm drains, parks, and landscape improvements. The Department is headed up by the Public Works Administration Division which is responsible for the management of three divisions: Facilities Maintenance; Streets, Fleet and Storm Drains Maintenance; and Parks and Landscaping Maintenance. Following are the highlights within the Public Works Services Department during Fiscal Year 2018/19: Administration Division In addition to overseeing the operations of the Department's 160+ full-time and part-time employees and over $35 million in combined operations and capital budgets, the Public Works Administration Division managed several significant projects this year. Key items this year included: continued improvement in the workflow for contracts and professional services agreements; and assisted the other divisions with the compilation and bidding of capital improvement projects, service contracts, and materials. The Public Works Safety Coordinator continued a systematic review, update and implementation of the Department's Safety Procedures, in addition to presenting the regularly scheduled annual training program topics. A new Bloodborne Pathogen Exposure Prevention Procedure was completed, and work continued with the Regulatory Agency Inspection Procedure. Several procedures like these are required by Cal/OSHA to ensure City staff are trained and prepared to perform their various tasks and responsibilities in a manner that always ensures their safety. A planned update of the Confined Space Access Procedure is scheduled for Fiscal Year 2019/20. Facilities Maintenance Division The Facilities Maintenance Division is responsible for the operation and maintenance of 25 city -owned buildings. Facilities staff also provide technical assistance during development of new buildings and parks, provide relocation services during reorganizations, and manage numerous capital maintenance projects each year, including: • LoanMart Field Audio Repairs — The stadium site was originally constructed in 1991, and the audio system needed to be replaced. The design phase started in Fiscal Year 2016/17, the construction started in Fiscal Year 2017/18, and the project was completed in Fiscal Year 2018/19. • Public Works Services Center Warehouse Expansion — The design for the Warehouse Expansion started in Fiscal Year 2017/18 and construction is anticipated to begin in Fiscal Year 2020/21. This new warehouse will add approximately 24,900 square feet to the existing warehouse which is a similar size. • City Facilities Roof Maintenance and Repair — Lions Community Centers East/West — The existing roofs on both the east and west buildings need repair work with the bids being awarded in Fiscal Year 2018/19 and work is anticipated to be completed in Fiscal Year 2019/20. • Facilities Work Order Management System — A new work order management system was implemented beginning in Fiscal Year 2018/19 to help manage work orders and gather the City's infrastructure data. Full deployment of this system will continue into Fiscal Year 2019/20. • Police Department Civic Center Station Carpet Replacement — With the many remodels over the years, some areas of the carpet in the Civic Center Police Department have yet to be replaced and have been in place since the building opened in 1990. The contract for this project was iniated in Fiscal Year 2018/19 with the completion scheduled for October 2019. vui • Victoria Gardens Cultural Center Celebration Hall Airwall Replacement — The airwall system that is used to divide Celebration Hall into smaller meeting areas had failed on several occasions and replacement parts were no longer available and needed to be replaced. The design was completed in Fiscal Year 2017/18 and construction will be completed in Fiscal Year 2019/20. • Old Town Lighting Project — The existing sports lights that provide lighting for the baseball/softball fields at Old Town Park were replaced with light fixtures from the Epicenter Soccer fields. The design started in Fiscal Year 2017/18 and construction was completed in Fiscal Year 2018/19. • Civic Center Carpet Replacement and Upper Lever Reconfiguration (Design) — The existing carpet in the rotunda area was installed in 1990 and was at the end of its useful life. The design for the project started in Fiscal Year 2017/18 and will be completed in Fiscal Year 2019/20. • In addition to the numerous capital projects, there were also several large service contracts awarded/renewed including: electrical supplies/services, HVAC maintenance, fuel island maintenance, janitorial services, security guard services, and door installation and repair services. Streets, Fleet, and Storm Drain Maintenance Division The Street Maintenance personnel handle a variety of functions including: maintenance of roadways, storm drains, traffic signs, markings, special events, and traffic signal systems and safety lighting. Additional functions include graffiti abatement, concrete repair, street sweeping, and 24/7 emergency response. This group also oversees fleet maintenance, vehicle/equipment specifications, and warehouse operations. Some of the more significant projects worked on by this Division include: • Traffic Signal Controller Cabinet Purchases — Four new traffic signal controller cabinets were purchased during Fiscal Year 2018/19 and three new traffic signal controller cabinets will be purchased during Fiscal Year 2019/20. These will be used to replace any cabinets damaged because of traffic collisions or equipment failures. • Thermoplastic Program — This program was fully implemented in Fiscal Year 2017/18 and has been very well received. In Fiscal Year 2018/19, the streets crew removed 2,542 square feet of old thermoplastic/paint and applied various legends (stop, stop ahead, speed limit) and crosswalks in 30 locations. Storm Drain Inspections/Cleaning — As a requirement of the Clean Water Act, staff must inspect storm drain catch basins annually and remove debris if it is 25% or greater of the catch basin's capacity. These requirements are part of the National Pollutant Discharge Elimination System (NPDES) permit program which controls pollution by regulating point sources that discharge pollutants into waters of the United States. In Fiscal Year 2018/19, a total of 3,878 catch basins were inspected, 231 catch basins required cleaning and 26 drain lines were jetted. • Citywide Concrete Repair Contract — Staff prioritizes permanent repairs required by considering walkable areas around schools, safe routes to schools, senior centers, shopping centers, and areas identified with a large amount of lift and/or gap in the concrete walking surfaces. Several sidewalk and ADA ramp repairs were completed during Fiscal Year 2018/19. ix Traffic Signal Battery Backup System Replacement — This 5-year project began in Fiscal Year 2018/19 and will continue through Fiscal Year 2022/23. This project replaces all the 11-12-year-old TESCO battery back-up systems on Foothill Boulevard. The existing units are no longer repairable and must be replaced with a new system. The new system will place the signalized intersection in 4-way red flash during a power outage. • Many smaller projects were completed during Fiscal Year 2018/19 including: k-rail installation, asphalt repairs, concrete repairs, graffiti removal, street sweeping, traffic sign installations and repairs, traffic thermoplastic legend refresh, chemical and mechanical weed abatement, debris removal, special event coverage, and on -call emergency response for mechanics, streets, and traffic signals. • Several service contract specifications were prepared and went out to bid during Fiscal Year 2018/19 such as traffic signal communications and fuel island maintenance. Parks and Landscape Maintenance Division This diverse group maintains over 400 landscaped sites, as well as the City parks, Adult Sports Complex and Epicenter, landscaped facilities, parkways, paseos and median islands, park facilities, citywide trails, and city -owned trees. The Parks Group is staffed 7 days a week and has several specialized positions such as Certified Pest Control Advisors/Applicators, ISA Certified Arborists, Certified Water Auditors, and a Certified Playground Safety Inspector. Tree Inventory — A citywide tree inventory data collection process was started in Fiscal Year 2015/16 and completed at the end of Fiscal Year 2018/19. The process employed a contract laborer equipped with a city -issued iPad to identify the species, location, health and other data associated with each city tree. The completion of this inventory will improve the tree maintenance process and efficiency of in-house and contract urban forest crews, along with establishing a new comprehensive tree maintenance contract. Wood Recycling Program — This program began in Fiscal Year 2018/19 and consisted of transforming 5,000 cubic yards of tree trunks and stumps that originated from citywide tree removals and wind damage into 5,000 cubic yards of usable wood chips which are being put directly into the city's landscape and parks to help enhance their appearance and provide weed suppression and water savings. At the end of Fiscal Year 2018/19, 3,500 cubic yards have been incorporated into the landscape with about 1,500 to be used in Fiscal Year 2019/20. Paseo Lighting Retrofits — Over the last several years, staff has focused on the reduction of utility costs and the modernization of paseo, park and landscape lighting. Through these inspections, the team identified 9 paseo locations in Landscape Maintenance District 2 (LMD 2), and during Fiscal Year 2017/18, started the removal and replacement of the existing paseo lighting fixtures with ones that will use 33% less electricity and reduce maintenance costs. This program continued through Fiscal Year 2018/19 and the team continues to repair and replace fixtures as needed with energy efficient equipment. Reforesting Projects — Two reforesting projects were completed in Fiscal Year 2018/19 that allowed for the replacement or addition of new trees in Landscape Maintenance District 2 and along the Pacific Electric Trail. The Urban Forestry team worked together with the Rotary Club to plant 14 new trees along the PE trail, between Archibald and Ramona. These trees will help provide needed shade in this section of the trail. x Urban Forestry staff also worked with Sustainable Claremont (GreenCrew) to start the process of reforesting the Windrows Loop area of Landscape Maintenance District 2. This non-profit organization uses CalFire Grant funds to help cities reforest their communities. This project consisted of planting 25 oaks and tristania trees using a variety of volunteers and CalFire grant funds. This partnership will be continuing into Fiscal Year 2019/20 in other locations throughout the City. • Playground Area Surface Replacement — Staff completed multiple repairs and patched worn and damaged sections of rubberized surfaces at almost every playground in the City throughout Fiscal Year 2018/19. They also developed a list of locations where repairing and patching was no longer a viable choice for ensuring the safety of these surfaces, and 12 park locations were budgeted for replacement during Fiscal Year 2019/20. Water Management Projects Fiscal Year 2018/19 was the kick off year for the Water Management team to audit proper operation and efficiency of the irrigation systems located within the citywide landscape areas and parks. This program is part of the team's goal to reduce water use and protect our water resources. These audits will help the team identify and schedule repairs, set the proper water application schedules, and monitor the water use more accurately. As part of the conservation goal, the team also installed flow protection and flow monitoring equipment at Old Town and Heritage Parks. This new equipment provides data the team will use to adjust the amount of water being used at these parks. The auditing and flow protection programs will continue to expand into Fiscal Year 2019/20 and beyond. • Park Facility and Amenity Painting — During Fiscal Year 2018/19 several park structures required painting as a result of normal wear and exposure, constant graffiti removal, failing surface protection and the need to extend the life of the structure. Park staff enlisted assistance from volunteer groups, park neighbors, boy scouts and religious organizations to provide painting services as a means of community involvement. This program will continue as funding becomes available. • Several smaller projects were completed in Fiscal Year 2018/19 throughout LMDs 2, 4, 6, 9 and 10 including: cobble upgrades, plant material replacement and mulch replacement. These projects will continue each year. Planning The Planning Department functions as the professional and technical advisor to the Planning and Historic Preservation Commission and the City Council on policy matters and issues concerning the physical development of the community. The Department focuses on proactive long-range planning to recognize and solve problems before they occur and take advantage of opportunities; to support City goals, objectives, policies, and programs; and to actively promote retail and commercial expansion by attracting new services to the City. As development within the City is a team effort, the Department coordinates activities among the other departments including Engineering Services, Fire Construction Services, Building and Safety Services, and the Police Department to ensure that development is safe, orderly, of the highest standard, and conducive to the business and residential community. The Department assisted over 7,000 residents, developers, and business owners at the counter in Fiscal Year 2018/19. The Planning Department processed a wide variety of projects during the fiscal year. The following are some of the highlights of those projects as well as some of the many special projects that have taken place: xi With our first four (4) story mixed use development, consisting of residential multi -family units and commercial space under construction at Foothill and Hermosa, staff is continuing to review best practices to implement or adjust mixed use/TOD development standards into the Development Code. Additional mixed -use projects are currently under review, including projects along two of our major corridors, Foothill Boulevard and Haven Avenue. • During Fiscal Year 2018/19, the Planning and Community Services Departments have teamed up to coordinate the environmental review process for the Central Park Master Plan Update. The Environmental Impact Report is currently being drafted to accompany the Draft Master Plan. • The 28.4-acre property at the corner of Day Creek Boulevard and Base Line Road is under construction with a mixed -use project consisting of 380 residential units (329 townhomes and 51 single-family dwelling units), two restaurants, and a higher end boutique hotel. • The Planning Department is currently working on a project (referred to as "Empire Yards") together with the SBCTA and Creative Housing Associates to develop a higher density, mixed use and transit -oriented project at the Metrolink. • Planning staff continues to regularly update and fine-tune the Development Code to clarify standards and respond to changing land use conditions as well as state legislation. Two separate code updates were approved by the City Council this year. These code updates include revising standards for the development of hotels within the city and the development of new car washes. The continued implementation of the Community Development Block Grant (CDBG) program is facilitated by Planning Department staff. These funds were allocated to various Public Works, Home Improvement, and Public Services activities, including some salary allocations. Approximately 80% of the City's CDBG funding is allocated to activities that benefit persons of low- and moderate -income. Building and Safety Services The Building and Safety Services Department provides plan review, inspection, and permit activities for construction projects to meet State Codes including building, fire, Title 24 Accessibility, energy, plumbing, mechanical, and electrical codes. The Department continues to enhance the functionality of the Accela permit software which helps to expand its use for on-line permit processing of fee payments and inspection requests and allows customers to access permit and inspection information 24 hours a day, 7 days a week. The Department conducted over 14,200 inspections and issued over 4,550 permits during the Fiscal Year 2018/19. Administration The Administration Section continues to improve communication with customers by enhancing public relations through website development, social media, and enhancing and updating forms and handouts. An added feature this year has been our new text hot line. By utilizing a specialized messaging program, text messages are used to exchange information regarding inspections. This service assists staff to efficiently answer questions for the public. All telephone calls for Building and Safety Services as well as Community Improvement are received by administrative staff. xii Building Inspection The Building Inspection Section provides building and fire inspections for all construction projects on private property including work inside mobile home parks. In addition, this unit works with the Community Improvement Division to abate properties that are vacant or have non -compliant building issues. Plan Check and Permit The Plan Check and Permit Sections continue to provide permit services for thousands of projects annually. The Accela permit program has enhanced the process tremendously. More than 13,000 applicants have registered for the use of the software in the permit and inspection processes. Additionally, the Plan Check Section performs Wildland Interface reviews within the Very High Fire Hazard Severity Zones, and they continue to work diligently with the Fire District to help local businesses maintain compliance with the current fire codes while minimizing the potential disruption to their business. Building and Safety also plays an integral part in meeting with other Community Development Departments, developers, and contractors creating quality development in the City. Community Improvement The goal of Community Improvement is to increase the stability and value of neighborhoods in the City through enforcement of the Municipal Code, including the building and housing codes which have been adopted by the City. Officers are tasked with determining a cause for a violation and identifying the most effective manner to gain compliance. This can include making a referral to public services and non -government organizations to assist those in the community that do not have the ability or funds to maintain property. For property owners unwilling to comply, enforcement efforts can include administrative actions and civil remedy. Notable accomplishments this year include: Successful application of provisions of the Drug Abatement Act at two properties to abate criminal activity in residential neighborhoods. The Act allows not only the prompt abatement of the drug activity, but also full cost recovery for all legal fees and all staff time related to enforcement. Additionally, penalties may be imposed on the parties involved in the activity and recovered from the value of the property, allowing funding for other drug abatement projects within the City. Continuing education and training for staff members, with four of the five staff members completing all education requirements to receive the status of Certified Code Enforcement Officer for the State of California. Education events have been hosted in the city and additional support provided to the California Association of Code Enforcement Officers with in -kind hours work to develop training. • Cost recovery has increased significantly with establishment of abatement fees for services provided to remove nuisance, hazardous, and illegal materials from private property. Increases in illegal cannabis cultivation have impacted law enforcement, drawing countless staff hours to investigate and document these occurrences, with the actual cost of abatement recovered through this process. xui Community Services Senior Services The James L. Brulte Senior Center at Central Park offers a variety of classes, services, programs, and special events, allowing our senior community to engage socially, culturally, and intellectually. During Fiscal Year 2018/19 programs and events included the Annual Senior Health Fair, LINK program connecting volunteer callers to homebound seniors, Food Distribution Program, Wellness Pass, various holiday celebrations, and the Annual Senior Talent Showcase. Workshops and counseling included estate planning, HICAP Medicare information, Alzheimer Association presentations, Elder Law Counseling, and Senior Support Groups and Counseling. The Senior Advisory Committee continues to diversify with each ongoing recruitment, keeping ideas fresh and services relevant for the community's Senior population. Ongoing nutrition and transportation programs continue to provide valuable services to the community. Senior Services continued its partnership with the Family Services Association, our regular nutrition provider, to provide a free Thanksgiving lunch for 275 seniors. The Senior Center is a vital resource in Rancho Cucamonga all year long with daily, weekly, and monthly services and activities. This is all made possible through the support received from hundreds of volunteers and numerous community partners. Central Park Event Services Central Park offers a variety of different meeting rooms, two large event halls, and a beautiful courtyard, all within a picturesque park setting. Versatility is key with small and large rooms for meetings and events from the simple to the extravagant, accommodating 10 to 300 guests (or more). Central Park remains a very popular location for weddings, anniversary celebrations, birthday parties, high school proms and formals, and college commencement ceremonies. In addition, Central Park frequently hosts special events by local representatives, professional associations, community groups, business groups, and more! During Fiscal Year 2018/19, rooms at Central Park were reserved a total of 812 times. Contract Classes More than 5,200 community members participated in the City's contract class program during Fiscal Year 2018/19. As in previous years, the contract class program offered a variety of recreational classes, including: music, dance, fitness, cooking, S.T.E.A.M., arts and crafts, gymnastics, modeling, and much more. New classes added this year included: Filmmaking and Content Creator, Modeling and Etiquette 101, Fun with Public Speaking, Drum Workshop, Violin for Two, and Ukulele. Classes were offered at multiple City facilities, parks and local businesses. Look for even more classes to be presented in the coming year as the City continues to expand and further enhance the contract class program. Special Needs Fiscal Year 2018/19 saw a huge increase in athlete participation in the City's Special Olympics Local Program. The season ended with a total of 47 athletes with 37 participating in soccer (fall sport) and 13 participating in bocce (spring sport). The program also saw an increase in volunteer participation, jumping from 6 to 10 volunteer coaches. The bocce team competed in three bocce tournaments in the spring, taking home ribbons for 4th place, two 3rd place trophies, and two 2nd place trophies. In late October, the soccer teams will compete in the Fall Regional tournament where they will battle against other teams in the Inland Empire for the gold medal. xiv The IncredABLES program as a whole continues to be one of the premier special needs programs in the Inland Empire. The Friday Night Fun Club events consistently draw between 80 and 100 IncredABLES participating each session. The money donated by our generous sponsor, WLC Architects, went towards adding d6cor to our quarterly dances, dinner at more of our events, and more opportunities for our IncredABLES to do hands-on activities which allowed them to take their projects home with them. The Special Needs Partnership Coalition also hosted its third annual Special Needs Resource Fair, with 25 vendors participating. The Resource Fair serviced approximately 200 community members. Through a joint effort with the Victoria Gardens Cultural Center staff, our IncredABLES have volunteered at select performances at the Lewis Family Playhouse. The Lewis Family Playhouse also hosted "The Magic of Kevin Spencer," a sensory -friendly magic show for the members of our special needs community. Due to the success of "The Magic of Kevin Spencer," the Lewis Family Playhouse has included another sensory -friendly shows in the 2019/20 season. Registration The Registration Division is the main hub for the Community Services Department customer intake with staff located at Central Park and Lions East. Registration also provides assistance to the Library, Fire District, RC Sports Center, RC Resource Center, Lions West, and the Cultural Center. During Fiscal Year 2018/19, approximately 111,000 transactions were processed. Transactions include Contract Classes, Senior Programs, Playschool, Camps, Rentals, Memberships, Library, Sports, Snack Bars, Gift Shop, and Drop -in Programs. The Registration Division handled approximately $3.5 million at multiple sites throughout the City, maintained payments made via InstantRC (over $910,000 in transactions), and awarded scholarships equaling $41,300 ($28,189 used) to 164 qualifying Rancho Cucamonga families. Youth and Family Lions East Community Center, Goldy Lewis Center, and the Frost Early Education Center are hosts to the Playschool program from August through May. Overall there were a total of 565 registered participants this Playschool session. Over the summer, camp programs were held for youth of all ages. Lions Center East hosted a total of 2,310 youth between the ages of 5 and 11 during the popular Summer Camp Program. The Great Outdoors theme brought back traditional summer camp activities such as indoor/outdoor games, nature walks, fort building, and arts and crafts. At Lions Center West, the Teen Summer Camp Program hosted a total of 211 teens between the ages of 12 and 16. With trips to Raging Waters, Knott's Berry Farm and John's Incredible Pizza Place, our teens had a blast! RC TeenWorks is a program dedicated to the City's teen community. Housed at Lions Center West, RC TeenWorks offers several programs for tweens and teens, from 5th to 12th grades, to be involved in. Programs include the Drop -in Program, Nights at the Teen Center or Teens Night Out, Volunteer Coalition and Intern Program, and the Lewis Kids Club. At RC TeenWorks, there is something for everyone and a team of dedicated staff ensure that our teens have a safe place to go after school. During Fiscal Year 2018/19, the Drop -in Program serviced 2,636 teens with various activities including cooking, painting, sports, or gaming. The RC TeenWorks team endeavors to stay relevant to our teen community in order to better engage with them. Program staff partnered with the Library to bring their equipment to the teens once a month and do STEM activities like robotics. During Fiscal Year 2019/20, we hope to partner with local organizations and in-house resources so our teens can experience other services such as visits from the Fire District, Police Department, etc. xv The Volunteer Coalition and Internship Program had 85 participants who volunteered 2,282 hours during Fiscal Year 2018/19. Our volunteers visited Huntington Beach harbor for their Kayak Clean Up program, cleaned up trash along the Etiwanda Hiking Trail, and assisted the Feed the Children organization by packing 700 boxes for less fortunate families. In Fiscal Year 2019/20, the program will expand volunteer opportunities to provide assistance to local military support groups, schools and more. In addition, the internship program will have an increased focus on workshops preparing interns for entering the workforce. Lewis Kids Club is a partnership between the City and Lewis Property Management. As part of the partnership, the City hosts two afterschool programs, one at Terra Vista Apartments and the other at Del Mar Apartments. During Fiscal Year 2018/19, there were a total of 4,606 participants in the program. RC Family Resource Center In Fiscal Year 2018/19, the RC Family Resource Center underwent a transformation that improved the facility's image and ability to better serve the needs of the community. The transformation included making the center into a more well-rounded facility where the community has access to important human services in addition to contract classes and a rental facility for special events. During the year, the RC Family Resource Center serviced over 17,500 individuals. This included approximately 6,370 participants who received services through the food pantry, clothing closet, emergency bags, hygiene giveaway, bread distribution, and infant care giveaway programs. Available contract classes included fencing, retro fitness, and chair Zumba. During the year, over 190 bookings have taken place and continue to increase. Rentals include birthday parties, company trainings, graduations, churches, and business events. Special Events During Fiscal Year 2018/19, over 33,500 community members attended the Community Services Department's major community -wide special events. These special events included: 4th of July Fireworks Spectacular, Summer Movies and Concerts in the Park, Founders Day Community Parade, Veteran's Day and Memorial Day ceremonies, Spooktacular, Community Paint Day at Los Amigos Elementary, and Spring and Fall Movies in Town Square at Victoria Gardens. Staff continues to enhance community events and build partnerships such as working with Hamilton Family Brewery to bring a beer garden to Concerts in the Park and partnering with local Veterans groups for the planning of our military appreciation ceremonies. Moving forward, there are also plans to bring quality live entertainment to the 4th of July Fireworks Spectacular. Park Ranger Program The Park Ranger Program continues to enhance Rancho Cucamonga's public safety initiatives by protecting and preserving parklands and open space, enforcing regulations, providing community education, and promoting parks and open spaces as a vital amenity. During Fiscal Year 2018/19, Park Rangers made contact with patrons a total of 1,024 times. This included Dispatch and Sheriff calls for a variety of low-level infractions, as well as educating Park users. xvi Sports In July 2019, the RC Sports Center opened its doors at its new location on Rochester Avenue, across from Loan Mart Field. The new 35,000 square foot RC Sports Center includes 3 indoor basketball and volleyball courts, 3 outdoor covered and lighted basketball courts, cafe, seating area, multi -purpose room, and administration offices. During Fiscal Year 2018/19, approximately 3,000 individual drop -in memberships were created and approximately 16,000 drop -in basketball and volleyball players utilized the gym. Rentals of the new RC Sports Center increased significantly from the previous facility, and as a result of the new facility's opening, the sports division no longer needed to rent a third party gym space and is able to offer sports onsite. The Sports Division continued to offer youth basketball and volleyball programs, as well as youth clinics for basketball, volleyball, and soccer. Also offered was pee wee soccer, baseball, basketball, cheer, and flag football. In addition, there was also adult basketball, and the Sports Division continued to work with Major League Softball to provide adult softball leagues. Sports also continued its relationships with the youth non-profit sports organizations and facilitates the allocation of fields for these groups. The RC Sports Center has the potential of being a regional event and tournament facility. As such, the Sports Division will continue to create a multi -year programming calendar that will allow time for more facility rentals. Cultural and Performing Arts The Lewis Family Playhouse kicked off the 13th Season with a rocking performance by Rock and Roll Hall of Famers, The Zombies, and throughout the 2018/19 Season hosted a myriad of well -received, renowned artists such as Brian McKnight, Don McLean, John Tesh, Rita Rudner, Capital Steps, and musical legends, Herb Albert and Burt Bacharach. Family friendly programming included The Golden Dragon Acrobats, classical string duo Black Violin, and Catapult, the shadow story -tellers. The best attended shows were Herb Alpert (97.3%), Capitol Steps (97.0%), and Black Violin (96.8%). The Box Office maintains a steady stream of web -sales (tickets sold on the internet). For presented and produced public performances during Fiscal Year 2018/19, web -sales totaled 33.6%, a slight decrease from the Fiscal Year 2017/18 total of 34.2%. The City's own professional, nationally -recognized, MainStreet Theatre Company presented a strong three play season beginning in October with School House Rock Live! In March, MainStreet did a special collaboration with the Lula Washington Dance Company and presented The Snowy Day and Other Stories by Ezra Jack Keats and concluded the season with the West Coast Premiere of Damon Chua's adaptation of The Emperor's Nightingale. Close to 29,000 people of all ages attended MainStreet performances, including 24,211 students and teachers that attended the 51 school performances offered. Of the people who filled out post show surveys, 30% had never seen a MainStreet show before this season and 35% of children were seeing theatre for the first time. Survey results showed that people were very satisfied with the artistry of the performers and the high production value of each play. Staff observations in the lobby proved that patrons also enjoyed the pre -show and post -show lobby activities, and the opportunities to engage with the actors at post -show talk backs, as well as meeting them after the show for autographs. xvn Broadway at the Gardens presented The Hunchback of Notre Dame which garnered strong public acclaim with 2,995 people in attendance. Community Theatre presented 3 performances of Shakespeare's Much Ado About Nothing reaching 1,063 in ticket sales. The July 2018 summer family musical was a very well -received production of Bye Bye Birdie featuring a cast of 54 with 2,485 tickets sold. Event Services hosted over 80 external rentals including 17 Playhouse rentals, grossing over $300,000 in revenue. The Cultural Center hosted the first wedding on the Playhouse stage which grossed $8,510, making it the third highest grossing rental (outside of Playhouse Production Rentals). There were several graduations in the Playhouse for many local charter and vocational schools. Inland Pacific Ballet and Valverde School for the Performing Arts continue to produce 2 shows a year which brings in over $80,000 in revenue as well as introducing many new patrons to the Playhouse. The Cultural Center has continued to host the annual State of the City, Staff Development Day for Team RC, and the Community Services Department's Part Time Staff Training. The Cultural Center is the home to many annual fundraisers including the Community and Arts Foundation's Monte Carlo Night and MainStreet Theatre Company's For the Love of Wine. In addition, Event Services kept very busy with numerous vendor fairs, corporate meetings, safety trainings, the Artist's Association of the Inland Empire Exhibit, Blood Drives, and a multitude of private events from quinceaneras and sweet 16 parties to weddings to retirement banquets to celebrations of life. The Victoria Gardens Cultural Center remains a vibrant and active community gathering place for residents and visitors of Rancho Cucamonga. In the Fiscal Year 2019/20 Season we hope to see more tickets sales and attract new rental clients which will generate more revenue. With a new Manager of the Cultural Center and a new Community Affairs Coordinator, programming and marketing materials have been infused with new strategies and vision. Premier Catering has signed a 5-year agreement as the exclusive in-house caterer, and we hope to expand the level of service we can provide to our guests and clients. Police Department The City of Rancho Cucamonga contracts with the San Bernardino County Sheriff's Department for general law enforcement services. During Fiscal Year 2018/19, the Police Department had 141 sworn officers, 41 professional (civilian) employees, and more than 90 volunteers which included Reserves, Citizen Patrol, Equestrian Patrol, and Explorers. In addition to basic patrol services, the Rancho Cucamonga Police Department also provides the following: School Resource Officers (6), Bicycle Enforcement Team, Multiple Enforcement Team (MET), Solution Oriented Policing Team (S.O.P.), Traffic Division, Detective Bureau, Retail Theft Team (Victoria Gardens), Child and Adult Protective Services (CPS/APS) Follow Up Team, Crime Prevention Team, and Public Information Officer Team. The Department continues to strive to improve public safety while finding efficiencies through technology and innovation. The Department's continued work and expansion with the Public Safety Video Network (PSVN) and Automated License Plate Reader (ALPR) technology deployment throughout the city is an ongoing effort for current and future improved law enforcement services. xvlll The Solution Oriented Policing (S.O.P.) Unit continues to improve quality of life issues with homelessness, bar compliance, Active Shooter Training, and schoolibusiness threat assessments. While engaging in their duties, S.O.P. Deputies work with Community Improvement personnel and the State's Department of Alcohol Beverage Control to ensure alcohol serving businesses are compliant with the law. As recent legislative changes in the incarceration system continue to create policing challenges, the Multiple Enforcement Team, Solution Oriented Policing Unit, and the Detective Bureau will continue to join forces to collaboratively prevent and deter criminal activity in the city. School Resource Officers (SROs) Although the Police Department and the Fire District worked collaboratively to create an Active Shooter Training Team to help schools and the community prepare for such an event, there can always be more precautionary steps to improve safety. In this climate of tragic incidents at schools around the nation, the City partnered with the Chaffey Joint Union High School District subsequent to the adoption of the Fiscal Year 2018/19 Budget to include the deployment of two additional Deputies to the 35 various schools throughout the city. This will allow a uniformed presence at each of the four high schools while distributing other Deputies to assist with concerns at the lower level within the middle and elementary schools. Automated License Plate Readers (ALPRs) ALPRs use video cameras in combination with infrared illuminators that are capable of capturing the image of the front or the rear of a vehicle that passes through its field of vision. The cameras are affixed to both patrol units and light poles on the south and north ends of the city. Currently, twelve (12) patrol units are outfitted with the cameras as well as seventeen (17) separate intersections. All captured plates are automatically run through the law enforcement database and if the plate captured is a vehicle of interest, shortly after the read, both dispatch and on duty Deputies are notified immediately. The information as to the type of investigation is relayed and special instructions are given, if necessary. This information is regularly used as an investigative tool after the fact. Should a victim or witness describe a type and color of a vehicle related to a crime, Detectives can research through the data to attempt to identify the exact vehicle and suspects associated with it. The City's committed investment in ALPR technology will allow the Department to continue delivering exceptional public safety services by locating and arresting criminals who would have previously travelled through our community undetected. Public Safety Video Network (PSVN) In conjunction with ALPRs, the Public Safety Video Network continues to expand with video cameras installed at eighty-five (85) locations throughout the city. The Victoria Gardens Mall, Metrolink Station, Police Station, Epicenter, Archibald Library, Central Park, Los Amigos Park, and City Hall are areas which have been equipped with the system. As infrastructure is finalized throughout the city, cameras will continue to be installed in "areas of interest", such as additional parks, intersections, and areas of congregation. A recent addition is that of the local schools. As the school districts implement their own camera systems, they are joining the City's network to allow the Police Department the ability to view events in real time. The Police Department's Technical Management Team and the City's Department of Innovation and Technology (DoIT) personnel are continually working on a plan for future ALPR/PSVN installation projects. xix Expansion of Solution Oriented Policing Team The Solution Oriented Policing (S.O.P.) Team's key tasks involve investigating sex trade crimes, conducting Active Shooter Trainings, and investigating/assisting with quality of life issues with the homeless. Through S.O.P., the Police Department works hand in hand with various City departments to ensure business compliance with local regulations. An additional Deputy was added to assist with getting resources to the homeless located within the city limits. Threat assessments for local businesses and schools are a priority that the team engages in to "harden the target" and elevate the likelihood citizens will survive a mass casualty event. The S.O.P. Unit also conducts Surviving an Active Shooter Training for citizens, students, and school staff to better equip them with the knowledge on how to react during an active shooter threat. Community Engagement The Rancho Cucamonga Police Department conducts numerous community -based meetings to improve the relationship it has with its community partners while simultaneously elevating their understanding of crime trends. A monthly Citizen Advisory Community Meeting is hosted by the Department, Coffee with a Cop is held at different locations, and our National Night Out and Open House are important Department engagements. The Police Department also participates in city neighborhood watch programs and health and safety fairs for local businesses and faith -based organizations. Fire District The Rancho Cucamonga Fire Protection District (District) is responsible for Community Risk Reduction, Emergency Response, and Emergency Management/Disaster Resiliency. District personnel are dedicated to the preservation of life, property, and the environment. The continuous goal is to deliver these services in an effective, efficient, and professional manner. The District emphasizes a risk reduction strategy to better inform the community and implement life safety regulations that are designed to protect natural resources, secure the economic vitality of the community, and improve the quality of life for the citizens. The District's emergency response platform consists of seven paramedic - staffed engine companies and two ladder companies operating out of seven fire stations. Crews are trained and equipped to handle a variety of emergency situations. They are strategically deployed throughout the city to ensure a rapid and effective response designed to quickly assess the emergency, initiate actions that will stop the escalation, and bring it under control. In this way, Fire District members save lives, reduce the impacts of injury and illness, preserve property, and protect the environment. The District also supports the citywide Emergency Management program. Recent manmade and natural disasters remind us that large-scale threats are real. This program works with public and private stakeholders to improve the community's disaster resiliency through preparedness, mitigation, response, and recovery planning. Working in conjunction with other providers such as the City's Police Department, the District has been a vital partner in public safety in the community since the formation of the Alta Loma Fire District in 1931. Unfortunately, one prevalent threat that has affected our society recently is active shooters. The Fire District alongside our Police Department will continue to focus on empowering our community with proper survival strategies and medical intervention skills should they find themselves in an active shooter scenario. xx The District continues its tradition of service by constantly reviewing and refining its administrative and operational procedures and policies in order to ensure its resources are maximized in this effort. In 2018, the Fire District responded to 16,652 incidents. During Fiscal Year 2018/19, District staff accomplished the following to maintain and improve existing services levels in accordance with Council approved goals: • Completed the design of the new Public Safety Facility, to include relocation of the San Bernardino Road Fire Station (172) and a fully functioning Rancho Cucamonga Police Department sub -station, which went out to bid for a construction contract. Construction of the new Public Safety Facility is anticipated to be completed by winter of 2021. • Received delivery of and placed into service a new replacement fire engine. • Processed a Request for Proposal to replace existing cardiac monitors/defibrillators that were at their end of life, with a state-of-the-art platform that provides real-time feedback on the effectiveness of Cardio Pulmonary Resuscitation (CPR). This technology will support the Fire District's High -Performance CPR initiative. • Processed a Request for Proposal and ordered a replacement off -road command vehicle. • Replaced the second half of the District -wide Mobile Data Computers (MDCs). • Replaced three aging staff vehicles with eco-friendly green electric vehicles. • In support of disaster resiliency, purchased 11 - 800 MHz portable radios for city wide communication in the event of a disaster that eliminates other forms of communication. • Maintained Community Facility District (CFD) fees at same level as the prior fiscal year. • Continued waiving the collection of Fire Inspection and Permit Fees. Library Services The Library Services Department experienced exciting changes and new services in Fiscal Year 2018/19. The Library checked out approximately 991,500 books, DVDs, CDs, eBooks, and magazines, and issued over 11,000 new library cards. Over 73,000 people used a Library computer, and nearly 35,000 children attended a Library program. Currently, over 313,000 borrowers hold a Rancho Cucamonga Public Library Card and enjoy a collection of over 300,000 titles and free access to more than 70 public computers. Additional Library highlights include: Children's and Teen Services • Nearly 35,000 of our young residents came to our libraries to enjoy the popular storytime programs. With over twenty storytimes each week, our baby, toddler, pre-school, school -aged, and teen programs offer something for children of every age. • The Summer Reading Program (SRP) had another highly successful year, with 4,330 children and teens taking part in the program. The SRP is crucial to helping students maintain their reading skills during the summer months. xxi • Children's Services partnered with a variety of businesses and organizations to provide incentives for children completing the annual Summer Reading Program with a total estimated value at nearly $111,700. Donors supplying prizes included: Benihana, Mimi's Cafe, Corky's Kitchen, Rubio's, the Rancho Cucamonga Quakes, Rock and Brews, Boomers, and The Old Spaghetti Factory. • The bookmobile provides service to many of the city's elementary schools. The distinctly -designed bookmobile visits children at their school sites. The bookmobile checked out over 47,000 items to children during this past fiscal year. After more than 15 years of service to Rancho Cucamonga schools and childcare centers, a refurbishment of the bookmobile is currently underway. Outreach Services The Library had many outreach visits in Fiscal Year 2018/19, including the Disabilities Resource and Safety Fair, RC Fire Open House, National Night Out, and RC Family Resource Center's Spooktacular event. These outreach efforts are in addition to our daily bookmobile stops. Information and Virtual Library Services • Between the Adult and Children's Information Service desks and our Virtual Library, over 150,000 information questions were answered during the past fiscal year. • Over 73,000 Library customers used the Library's free, public access computers to search for jobs, send email, create resumes, create school reports, or surf the internet, while over 800 children, teens and adults took advantage of free, hands-on computer classes. • The Library received a $4,000 grant from the California State Library which was used for the creation of circulating hobby kits called RC Kits. This resource allows users to take home all the materials needed to try a new hobby or to learn a new skill. • In Fiscal Year 2018/19, staff processed nearly 3,800 passport applications. The Library began using an online reservation system to automate and manage passport appointments, which resulted in substantial service efficiencies and improved customer experiences. • The Library expanded eBooks services in Fiscal Year 2018/19 by adding cloudLibrary services. This eBook collection contains contemporary titles, and card holders may use the service to borrow eBooks from other cooperating California public libraries. This service provides expanded access to titles with reduced wait times. Literacy Services • Nearly 40 active adult learners work with Library trained tutors to improve their literacy skills. The continuation of this program is possible due to on -going support from the State Library, Community Development Block Grant funds, and corporate and private donations. • The "Back to Basics" Children's Literacy Program served over 125 children, improving the reading level of each child and promoting reading and literacy as a pathway to success. Second Story and Beyond • The Second Story offered 88 programs and contract classes with a total attendance of over 3,200 in Fiscal Year 2018/19. xxn Staff began working with a consultant to develop parameters for an RFP for tenant improvements and design services for museum quality exhibits. Volunteer Services • Between the Friends of the Library's volunteers and the Library's volunteers, the Library offered many varied volunteer opportunities, including: bookstore operations, tutoring, programming, teen services, shelving and Summer Reading Program assistance. • The Friends of the Library volunteers accounted for approximately 15,000 volunteer hours sorting, staffing, and managing the Friends' bookstores located at both Libraries. The Friends' bookstores raised $142,000 for the Library in Fiscal Year 2018/19. Library Foundation The Library Foundation held multiple fundraising events to cultivate potential major donors and partnerships, and raised over $1.5M in donations, meeting their Second Story and Beyond Capital Campaign fundraising goal. City Management The City Manager is appointed by, and serves at the pleasure of, the City Council. The City Manager is responsible for the overall operations of the City, like a Chief Executive Officer in a private corporation. Providing professional leadership, the City Manager's Office ensures City services, activities, and facilities meet the policy objectives formulated by the City Council. As part of these responsibilities, the City Manager's Office oversees various citywide and interdepartmental projects and efforts. These include: Community Affairs The mission of the Community Affairs Division is to provide accurate, transparent and comprehensive information about the City of Rancho Cucamonga and its programs, policies, services, and future plans in a timely manner to those who live, work, and play in the City. The Community Affairs Division supports this mission and promotes the City's brand with the use of a variety of digital engagement and other communication tools such as: publication of the Rancho Reporter; news releases; media relations, social media, website, RCTV-3, the City's Government Access Channel; e-newsletters, brochures, flyers, encouraging citywide initiative participation through community engagement; and provides messaging, media relations, and public relations counsel to City departments. Community Affairs highlights include: • An increase of 12% or 2,100 subscribers to the City's primary email distribution system for electronic newsletters using GovDelivery. • Ongoing community engagement for the Etiwanda Heights Neighborhood and Conservation Plan. Increase in net social media followers by 21% or 7,300 individuals; more specifically, Instagram platform growth increased by 68% or 2,600 new followers as a result of increased and strategic use of Instagram Stories for outreach. • Coordinated multi -department effort to plan and design the new City website. • Established the internal Community Affairs Network, bringing together key staff from each department to better understand communication needs as a whole. Healthy RC Under the leadership of the City Manager's Office, Rancho Cucamonga has developed an innovative Healthy RC program. This program is unique in its holistic approach to encouraging residents, businesses, and our own organization to adopt healthy, active, and sustainable lifestyles and practices. This approach brings together both new and existing efforts of each City department with the goal of improving the quality of life in our community. Healthy RC highlights include: With the help of a grant from the Southern California Association of Governments (SCAG), Healthy RC was able to host the first ever CommUNITY Paint Day event in September 2018. Paint Day was an intimate neighborhood event where neighbors were able to come out and spend the day painting a mural on the asphalt in the intersection of Baker Avenue and 9th Street, by Los Amigos Elementary School. The day was filled with music, healthy food demonstrations, bicycle safety lessons, crafts, and of course mural painting! The mural is a part of the City's efforts to develop placemaking project to help heighten a sense of community and liven public space for all to enjoy. • Through needs assessment survey conducted as a part of the Community Schools Model partnership with Los Amigos Elementary School, it was found that programs surrounding positive mental health were desired. Healthy RC was able to apply for and receive a grant from Kaiser Permanente to provide Mindfulness Curriculum to teachers and administrators at Los Amigos Elementary which they implemented throughout the 2018/19 school year. The program has been a big hit with both teachers and students, with positive results being reported, and we are looking to continue efforts related to mindfulness and Community Schools with other schools throughout the City in the future. In March 2019, Healthy RC hosted the second annual Teen Summit titled "Own It, Your Story Matters", at the Central Park Recreation Center. More than 100 teens from public and private high schools were brought together to discuss issues in the community that affect youth, share stories on overcoming challenges, and strategies to make an impact in the community. • The Teen Quality of Life Survey was distributed to two high schools in the Chaffey Joint Union High School District as well as to private and home -schooled high school students in the spring of 2019. A total of 1,259 survey responses were received providing insight into some of the challenge's teens face on a daily basis. This survey along with the annual Teen Summit help to strengthen the understanding of teen community needs and their overall quality of life. In May of 2019 the Healthy RC team organized and held the first ever Health Equity Summit, which consisted of a poverty simulation to demonstrate some of the difficulties families and individuals may face when living with limited resources. The Summit was attended by over 100 participants who were able to spend a day living a fast -paced month in the life of a person or family struggling to make ends meet. The event was eye opening for those in attendance, and we are hoping to be able to continue to host these summits in the future. xxiv This year staff was able to work with a handful of interns to complete a Municipal Greenhouse Gas (GHG) inventory, which measures historical trends in emissions related to City facilities and operations. 2016 was selected as the initial base year from which to measure and staff recently completed data collection and analysis for 2018. The comparison showed a 10% reduction in Municipal GHG emissions; a big win for RC! • Energy Efficiency Revolving Funds (EERF) are accounts that are specifically created to maintain an allocation of funding to be spent on projects that improve the energy efficiency of City facilities and operations. This year, staff worked together to create an EERF so that the City could continue efforts to reduce GHG emissions. The EERF was made possible with the completion of the City's street light retrofit project which provided a rebate that provided starter funds for the EERF. Legislative Affairs Pro rg am The City Manager's Office coordinates a very active legislative program that focuses on protecting the interests of our community and identifies resources available to enhance City services and programs. Legislative efforts include researching and monitoring federal and state bills, preparing position papers and letters in response to proposed legislation, and working with legislative representatives and their staff to promote the interests of the community at the state and federal level. This year 38 bills were tracked during the Fiscal Year 2018/19 Legislative Session including 20 Assembly Bills (AB), 14 Senate Bills (SB), and 4 Federal bills. Position letters were sent to the State supporting 7 bills, opposing 10 bills, and officially watching the remaining. Additionally, as the City Council actively participates in regional agencies and boards, the City Manager's Office provides assistance and support to assist the Council in these positions. The inter -governmental agencies the City participates in include San Bernardino Council of Governments (SBCOG), Omnitrans, Southern California Associated Governments (SCAG), and Metrolink. City officials are also actively involved in, and have taken on several leadership positions with, the League of California Cities, a statewide association that advocates for the interest of cities. At the Federal level, the City Manager's Office plays an active role in advocating for the City's priorities and Federal assistance for projects and programs. Performance Measurement The City Manager's Office is the lead department in developing and maintaining the City's online performance dashboard system. This project is in the process of being expanded to include performance data for all areas of City operations including community development, governance and finance, and health and sustainability. City Clerk's Office The Office of the City Clerk is responsible for accurately recording City Council/Fire District/Housing Successor Agency/Successor Agency/Authority proceedings; processing, updating and safeguarding documents vital to the City's legislative process; providing research, information and support to the City Council, City staff, and the general public; maintaining the citywide records management and document imaging programs; and administering open and free elections in accordance with statutory requirements. xxv During Fiscal Year 2018/19, the City Clerk's Office improved service delivery by completing the following: • Administered the first `By District" election (November 2018) for the City of Rancho Cucamonga. • Facilitated November 2018 Municipal Election for two seats on the City Council (District 2 & 3), including candidate orientations/processing, State/Local Campaign Disclosure responsibilities, and City Council Reorganization. • Continued to implement electronic improvements to City Council and Board/Committee/Commission agenda compilation/publishing and related document management including training to citywide staff on the new software and agenda process. • Updated the City's Conflict of Interest Code and the annual filing of Conflict of Interest Statements within the statutory deadline. • Increased customer/citizen research methodologies by providing access to public records within the City's Document Imaging System via Weblink (RC Docs) made available on the City's webpage. • Implemented the City's new Records Management Manual involving records storage, retrieval, retention and destruction; and provided training on records management including electronic scanning of documents while ensuring compliance with City, State, and Federal regulations. Animal Care and Services The Animal Care and Services Department is responsible for nearly 5,000 homeless pets each year. The Department, which began operating in May 2006, has a mission of creating a PAWsitive impact by enriching the lives of animals and people. Core responsibilities include animal care, adoptions, community outreach, and public safety. The Field Services Division responds to requests for service such as impounding stray animals, pick up of deceased animals, rescuing animals in distress, and enforcing animal laws. Animal Care The Animal Care and Veterinary Divisions provide day-to-day care of a variety of species of animals. In Fiscal Year 2018/19, the Veterinary Division purchased new veterinary dental equipment. The dental equipment increased the number of specialized dental surgeries performed in-house which reduced veterinary costs. In addition, the Veterinary Division renewed its partnership with Western University College of Veterinary Medicine by hosting and mentoring third and fourth year students. This win -win partnership offers veterinary students hands on experience with shelter medicine which expands their technical and case management skills and gives Animal Services additional labor to offset the work load of caring for the animals. Increasing Adoptions In Fiscal Year 2018/19, the Animal Center restructured a vacant position and hired a dedicated Animal Rescue Specialist. The Animal Rescue Specialist's role is to increase the number of rescue partners who assist the Center with the adoption of animals with behavioral or medical conditions. In addition, the Animal Center continued its 24 hour a day neonatal kitten nursery. The objective of the nursery is to improve the success rate of kittens between the ages of 1 day old to 8 weeks old that are received by the Center annually and require around the clock specialized care. Once the kittens reach 8 weeks of age, they can be adopted into new homes. Additionally, the Animal Center hosted several large adoption events and fundraisers such as Beer Kitty Kitty (at a local Brewery) Catoberfest, and Kitten Yoga to offset the cost of the Kitten Nursery's operations. xxvi Community Involvement Community involvement is an important part of the Animal Care and Services Department. This includes the development of a strong volunteer program and a foster care program, as well as working with rescue groups and other Animal Adoption Facilities. The Animal Center has a wide variety of volunteer opportunities such as clerical, animal socialization, animal care, event planning, assisting with the Kitten Nursery, working in the Veterinary Division, assisting the Animal Behavior Division and participating in the Pet Cadet program (for volunteers 12 to 18 years of age). In Fiscal Year 2018/19, volunteers donated more than 12,500 hours of service. Animal Care Foundation Officially formed in June of 2016, the Animal Care Foundation was established to enhance fundraising opportunities to support the Animal Center's programs and services. During Fiscal Year 2018/19, the Animal Care Foundation hosted several fundraisers including a Bone Appetito (wine event), Paint Your Pet (paint a portrait of your pet), and a holiday boutique. Funds and in -kind donations collected were used to support the Center's neonatal Kitten Nursery, low cost spay and neuter opportunities, transporting pets to rescue organizations, and specialized medical procedures. Administrative Services Group The Departments and Divisions of the Administrative Services Group are unique in comparison to other City departments. While line departments typically provide services only to the public, the Administrative Services Group provides services and support primarily to internal staff (including the City Council, the City Manager, the various City departments, and employees) with some service areas crossing over into the public arena. The group's major service areas are: Administration, Finance, Treasury Management, Human Resources, Risk Management, Procurement, Business Licensing, Special Districts Administration, and Innovation and Technology Services. The Administrative Services Group continued making progress on projects that were started during the previous fiscal year as well as some new projects initiated during the Fiscal Year 2018/19. A summary of each of these projects by division follows. Department of Innovation and Technology The Department of Innovation and Technology (DoIT) is focused on continually enhancing the value of the City's technology investments for internal customers and the community we serve. Over the course of the year, the Department has partnered on several projects in support of Council's broader initiatives including civic engagement, transparency in government, public safety, and cyber security. The Department of Innovation and Technology received several awards over the past year, including being recognized in the top -ten cities for our population range in the 2019 Digital Cities Survey. Accomplishments for the Department include: • Completion of the City website rebuild to a fully -hosted, open -source content management system and mobile -first design. xxvii • Completion of the City's data center refresh, updating the technology to hyper -converged architecture and building in resiliency with the Fire District Backup Data Center. • Significant updates to enterprise platforms including OneSolution Financials, Laserfiche document management, Chameleon Animal Center Management, and Accela land management. • Near completion of the user workstation replacement project, updating over 1,000 personal computer devices citywide to current Windows 10 operating system and right -sizing device deployments based on user needs. • Implementation of additional network security protocols to prevent unauthorized devices from accessing the City's data network. Finance Department The Finance Department of the Administrative Services Group provides for the administration of financial activities such as payroll, accounts payable, accounts receivable, audits, preparation and monitoring of the budget, revenue recording and tracking, preparation of financial statements, and the establishment and maintenance of a fixed asset inventory. Finance is also responsible for business licensing, special districts administration, and treasury management. The Finance Department applied for and received its 31st consecutive Government Finance Officers Association (GFOA) Certificate of Achievement for Excellence in Financial Reporting (Certificate of Achievement). The Certificate of Achievement is an award designed to recognize and encourage excellence in financial reporting by state and local governments. It is the highest form of recognition in governmental accounting and financial reporting, and its attainment represents a significant accomplishment by a government and its management. The Department also applied for and received its 6th consecutive GFOA Distinguished Budget Presentation Award. In anticipation of the bond sale for the Fiber Optic Network, the Finance Department meet with Standard & Poors in the fall of 2018 to discuss the City's credit rating, and in reflection of the City's conservative fiscal policies and performance, the City's credit rating was upgraded from AA- to AA+. This is the second highest credit rating possible, exceeded only AAA, which very few cities in California obtain. The Business Licensing Division ensures compliance with City codes as they relate to business licenses, as well as transient occupancy (TOT) and admission taxes. During Fiscal Year 2018/19, staff processed approximately 11,593 business license applications (9,586 renewals and 2,007 new filings), inspected 1,361 businesses, and collected revenues totaling $2,708,314. The Division equipped staff with handheld ticket writers to better manage business license enforcement throughout the City. The ticket writers create a digital record and streamline the manual process of documenting and organizing their enforcement efforts through the issuance of Administrative citations. The Special Districts Division is responsible for placing city parcels to the County tax rolls, tracking and paying debt service on the City's bonded indebtedness, ensuring compliance with the continuing disclosure requirements for each bonded district, and assisting with special district formations. During Fiscal Year 2018/19, Special Districts staff participated in meetings, along with other Finance staff, for two citizens advisory committees pertaining to special districts — the Planned Communities Citizens' Oversight Committee and the West -side Citizens' Oversight Committee; worked with other Finance staff to streamline the Annual Engineer's Reports for City Council approval; and placed over $28.52 million for approximately 135,000 parcels. xxviii The Treasury Management Division of the Finance Department, in accordance with the "Prudent Person Rule," invests and monitors all idle funds to maximize and safeguard taxpayer dollars. The Division continually monitors the various services provided by its financial institution to ensure that the City is receiving the most comprehensive services for the most economical price. Human Resources Department The Human Resources Department is responsible for managing a broad range of employment related services including recruitment and selection, classification, compensation, employee development, and labor relations. In addition, the Department provides risk management services including worker's compensation and general liability, employee wellness, and safety. Key accomplishments this year include the following: • Successfully concluded negotiations with Fire District bargaining units, resulting in labor agreements through June 2023, and negotiations with Teamsters Local 1932 bargaining unit resulting in a labor agreement through June 2021. • Expanded social media marketing to increase applicant engagement and improve recruitment efforts. Weekly activity posts on social media include Tip Tuesday, Wisdom Wednesday, Thursday Job posts, and Feature Friday. Social media engagement increased 20.6%. • Enhanced recruitment processes by providing training for hiring Managers on Modern Workforce and Succession Planning, collaborating with hiring managers on creating more modern and attractive job announcements, and hosting one -day hiring fairs to improve time -to -fill for part time recruitments. • Initiated new Onboarding program survey to measure level of effectiveness. Results indicated an overwhelming positive response in the new hire experience, increased engagement, and improved new employee's first year performance outcome. • Implemented Performance Management software program to better manage employee performance outcomes, provide more meaningful and timely feedback to employees, and better tracking of employee goals. • Expanded the City's volunteer intern program which provides students with work experience and development of new skills, while helping City departments manage projects that enhance City programs and services. • Initiated Retirement Plan Committee to oversee the operations and management of employees' retirement savings plan to meet our fiduciary duties. • Continued oversight of employee programs to enhance the "Employee Experience" including the Baby on Board Program, Take Your Coworker to Work Program, Annual Staff Development Day, RC Cares program, Remote Work Policy, Dress for Your Work Day Policy and HR2U; enhanced the annual New Employee Mixer and initiated the Doggy Day Fair. • Continued employee wellness programs to assist employees with health and well-being initiatives including "Know Your Numbers" campaign, Flu Shots, Biggest Loser Challenge, Annual Employee Health Fair, Lunch and Learns, Peloton, Healthy Newsletters, and on -site Pilates. • The prompt and fair delivery of workers' compensation benefits, risk assessment and cost-effective risk transfer when appropriate, litigation management, and the fair and fiscally responsible analysis of third -party claims. Initiated workplace harassment training of all employees to comply with new law. Rather than relying solely on external trainers to meet the new law, employees John Gillison, Lori Sassoon and Jenifer Phillips were certified to conduct mandatory harassment training for the City. Together they have conducted a total of eight trainings, which resulted in a savings of approximately $20,000. 80% of City staff have completed the mandatory Harassment training and one additional training was scheduled in November 2019. • Established a partnership with Kaiser Permanente whereby they have provided free lunch and learn discussions, which have included several topics such as Achieving Wellness & Maximizing Your Kaiser Health Plan, Stress Management/Mental Health, and Men's Health (Prostate Cancer). • Implemented Learning Management software program to better assign and track employee trainings including mandated trainings and trainings for personal and professional development. • Worked with DoIT to implement Risk Management viewer in GIS for general liability claims. The purpose of this program is to identify the problem areas within City and to track type of claims. The Risk Management Division of the Human Resources Department is responsible for ensuring employee safety, the prompt and fair delivery of workers' compensation benefits, risk assessment and cost-effective risk transfer when appropriate, litigation management, and the fair and fiscally responsible analysis of third -party claims. Procurement Division The Procurement Division is authorized to procure services or goods for the best value, at the lowest price, from the most responsive vendor. The Division performs as the City's centralized procurement agent and authorizes all City purchases by ordinance requirements. It is also charged with the disposition of surplus and obsolete property. Division highlights this year include the following: The Procurement Division applied for and received the 2019 Achievement of Excellence in Procurement (AEP) award issued by the National Procurement Institute, Inc. The continuously evolving AEP criteria are designed to measure state of the art in public procurement best practices. The Procurement Division is one of only forty-six (46) agencies in California and one of only sixty-seven (67) cities in the United States and Canada to receive the award. This is the eleventh consecutive year that the Procurement Division has been the recipient of the prestigious AEP award. • Efficiently disposed of surplus City assets through an online surplus auction site generating $71,805 in additional revenue for the City. • The Procurement Division conducted 9 Request for Quotes, 19 Request for Bids, 26 Request for Proposals and 1 Statement of Qualifications, and processed 496 purchase orders for a total spend amount of $41,676,840. xxx III. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Rancho Cucamonga for its comprehensive annual financial report (CAFR) for the Fiscal Year ended June 30, 2018. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City of Rancho Cucamonga has received a Certificate of Achievement for the last thirty-one consecutive years. We believe that our current comprehensive annual report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report could not have been accomplished without the efficient and dedicated service of the entire staff of the Finance Department and the administrative staff of the Administrative Services Group. We appreciate and would like to commend all the City departments who assisted and contributed material to this document. We also recognize and would like to acknowledge the Mayor and members of the City Council for their interest, dedication, and constant support in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, John R. Gillison City Manager Tamara L. Layne Finance Director CITY OF RANCHO CUCAMONGA CITY OFFICIALS DUNE 30, 2019 City Council Name Term Expires L. Dennis Michael Mayor 2022 Lynne B. Kennedy Mayor Pro Tern 2020 Ryan A. Hutchison Council Member 2022 Kristine D. Scott Council Member 2022 Sam Spagnolo Council Member 2020 Administration and Department Heads City Manager John R. Gillison Deputy City Manager/Administrative Services Lori Sassoon Deputy City Manager/Cultural Services Elisa Cox Deputy City Manager/Economic and Community Development Matt Burris City Attorney James L. Markman Treasurer James Frost City Clerk Janice C. Reynolds Animal Services Director Veronica Fincher Building and Safety Services Director Vacant Community Services Director Jennifer Hunt-Gracia City Clerk Services Director Linda Troyan Engineering Services Director/City Engineer Jason Welday Finance Director Tamara L. Layne Fire Chief Ivan Rojer Human Resources Director Robert Neiuber Information Technology Director Darryl Polk Library Director Julie Sowles Police Chief Donny Mahoney Planning Director (hired August 2019) Anne McIntosh Public Works Services Director Bill Wittkopf CITY OF RANCHO CUCAMONGA ORGANIZATION CHART Citizens of Rancho Cucamonga City Clerk I I City Council I I City Treasurer City Attornev City Manager Administrative Civic and Police Economic and Services Cultural Services Department Community Admin/Procurement Development Fire Community District Finance Services Animal Care Human Library and Services Resources Services Community Innovation and I Records Improvement Technology Management Building and I I Engineering Planning I I I I Public Works Safety Services Services E 0 k Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Rancho Cucamonga California For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018 CAU&P44'.. P. *Mow Executive Director/CEO City of Rancho Cucamonga Comprehensive Annual Financial Report June 30, 2019 Financial Section THIS PAGE INTENTIONALLY LEFT BLANK LSL•000 ■000 ■/ INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of Rancho Cucamonga, 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 Rancho Cucamonga, California, (the City) as of and for the year ended June 30, 2019, 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 City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. PrirneGlobal LSU9::: To the Honorable Mayor and Members of the City Council City of Rancho Cucamonga, 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 Rancho Cucamonga, California, as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis; the budgetary comparison schedules for the General Fund, Development Impact Fees, Lighting Districts, Housing Successor Agency and Fire District; the schedule of changes in net pension liability and related ratios for the agent multiple -employer plan; the schedule of plan contributions for the agent multiple -employer plan; the schedule of proportionate share of the net pension liability for the cost sharing multiple -employer plans; the schedule of plan contributions for the cost sharing multiple - employer plans; the schedule of changes in net pension liability and related ratios for PARS retirement enhancement plan; the schedule of plan contributions for PARS retirement enhancement plan; the schedule of changes in net OPEB liability and related ratios; and the schedule of contributions — OPEB 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, budgetary 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 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. The 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 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. 2 LSU9::: To the Honorable Mayor and Members of the City Council City of Rancho Cucamonga, California Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 9, 2019 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the 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. Brea, California December 9, 2019 3 THIS PAGE INTENTIONALLY LEFT BLANK City of Rancho Cucamonga Management's Discussion and Analysis Year Ended June 30, 2019 As the management of the City of Rancho Cucamonga (City), we provide for the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2019. Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current year's activities, the resulting changes, and currently known facts, we encourage the readers to consider the information presented in conjunction with additional information furnished in the Letter of Transmittal and the accompanying basic financial statements. Comparative data on the government -wide financial statements are only presented in the MD&A. Financial Highlights The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources by $1,277,126,391. This amount is reported as the total net position for the City. The total net position consists of the following: $821,448,703 is net investment in capital assets; $347,762,756 is restricted net position; and $107,914,932 is unrestricted net position. • The City's net position increased by $7,290,810. This change is comprised of net increases of $4,657,135 in governmental activities and $2,633,675 in business -type activities. • The Development Impact Fees Special Revenue Fund is reported as one of the major governmental funds as of June 30, 2019, due to the management's decision to consolidate funds that were similar in nature for financial statement presentation. The Development Impact Fees Fund has a fund balance of $55,817,514 as of June 30, 2019. • The Lighting Districts Special Revenue Fund has a deficit fund balance of $5,587,105 due to the interfund advances from the General Fund associated with the purchase, acquisition, and retrofit of citywide streetlights. The interfund advance is described in Note 6 of the notes to financial statements. • The governmental funds reported a combined ending fund balance of $478,117,692, an increase of $37,288,916 from the prior fiscal year. The General Fund represents $118,780,845 of that total fund balance and consists of the following: $15,996,673 is nonspendable fund balance, $10,000,335 is restricted fund balance, $72,103,374 is committed fund balance, and $20,680,463 is assigned fund balance. The fund balance of the General Fund increased by $3,698,752, or 3%, from the prior fiscal year. Overview of the Financial Statements The City is required to present its financial statements in accordance with Generally Accepted Accounting Principles (GAAP), which includes complying with the Governmental Accounting Standards Board (GASB) pronouncements. Government -wide Financial Statements Government -wide financial statements provide readers with a broad overview of the City's finances in a manner similar to that of a private -sector business. These statements include the City and its component units. As stated in Note 1 of the notes to financial statements, the inclusion of an organization within the scope of the reporting entity of the City, as either blended or discretely (separately) shown, is based on the provisions of GASB Statement No. 14, The Financial Reporting Entity, and amended with GASB Statement No. 61, The Financial Reporting Entity. Omnibus -An Amendment of GASB Statements No. 14 and No. 34. Although legally separate, component units function for all practical purposes as departments of the City and, therefore, have been blended as part of the primary government. The City's component units are the Rancho Cucamonga Public Improvement Corporation, the Rancho Cucamonga Fire Protection District, the 5 Rancho Cucamonga Library, and the Rancho Cucamonga Public Financing Authority. These statements are designed to provide information about the activities of the City as a whole and present a longer -term view of the City's finances. This longer -term view is intended to illustrate the City's ability to continue functioning as a viable entity well beyond the next fiscal year's operations. The statements are prepared using the accrual basis of accounting. The accrual basis of accounting considers money available when earned and considers the money spent when a liability is incurred. As such, this basis of accounting focuses on measuring economic resources that are available to the City regardless of the timing of the availability of those resources. For example, grant revenue may have been earned as of fiscal year end but may not be received until several months subsequent to fiscal year end. Under the accrual basis of accounting, this revenue would be recognized as a resource available to the City as of fiscal year end, even though the actual cash is not received for several months. An example related to expenditures would be the City's accrued interest liability. This liability is recognized as the usage of the City's resources as of fiscal year end, even though the actual cash payment will occur over an extended period of time. The accrual basis of accounting is similar to that used by most private sector companies. Accordingly, all of the current fiscal year's revenues and expenses are taken into account regardless of when cash is received or paid. Additionally, these statements reflect the capitalization and depreciation of infrastructure and other capital assets (e.g., buildings, vehicles, furniture and fixtures, etc.) as well as the recognition of other long-term assets and long-term liabilities (e.g., claims and judgments payable, accrued employee benefits, long-term debt, net pension liabilities, etc.). The government -wide financial statements distinguish functions of the City that are principally supported by general revenues such as taxes, intergovernmental, and use of money and property (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business -type activities). The governmental activities of the City include general government, public safety — police, public safety — fire protection, public safety — animal center, community development, community services, and engineering and public works. The City's business -type enterprise activities include the Sports Complex, Rancho Cucamonga Municipal Utility (RCMU), Fiber Optic Network, and Rancho Cucamonga Enterprise Geographic Information Systems (REGIS) Connect. The statement of net position presents information on all of the City's assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the excess of total assets and deferred outflows of resources over total liabilities and deferred inflows of resources reported as net position. This statement includes changes in capitalized and depreciated capital assets. The purpose behind the statement of net position is that, over time, increases or decreases in the net position are an indicator of whether the financial position of the City is improving or deteriorating. 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 of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows (both positive and negative) in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). Both the governmental activities and the business -type activities are presented on the accrual basis of accounting. Proprietary funds, which are discussed below, also follow the accrual basis of accounting. The government -wide financial statements can be found on pages 27 through 29 of this report Fund Financial Statements The fund financial statements provide a more detailed look at the City's most significant activities. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. The fund financial statements provide detailed information about the most significant funds and other funds. Some funds are required by state law and by bond covenants. In addition, in order to meet legal responsibilities for using certain taxes, grants, and other resources, prudent fiscal management requires the establishment of other funds to help control and manage money. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, or fiduciary funds. 0 By contrast to the government -wide financial statements, the governmental fund financial statements, a part of the fund financial statements, use the modified accrual basis of accounting which considers money available when it is collectible within the current period or soon enough thereafter, which the City deems to be 60 days after the end of the current fiscal period, except for sales tax and grant revenues which is 180 days after the end of the current fiscal period, to pay liabilities of the current period. Expenditures are recorded when a liability is incurred. However, expenditures for debt service, claims and judgments, and accrued employee leave benefits are not recorded as liabilities and are expensed at the time a payment is due. Note 1 of the notes to financial statements describes each basis of accounting. Governmental funds. Most of the City's basic services are reported in governmental funds, which focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. The governmental fund financial statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. The differences between the results in the governmental fund financial statements and those in the government -wide financial statements are explained in a reconciliation following each governmental fund financial statement (see pages 35 and 39). The City reports 32 governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, Development Impact Fees Special Revenue Fund, Lighting Districts Special Revenue Fund, Housing Successor Agency Special Revenue Fund, and Fire District Special Revenue Fund, all of which are considered major funds. Major fund determination is based on guidelines pursuant to GASB Statement No. 34. Data for the other 27 governmental funds are combined into a single, aggregated presentation. The financial statements for the governmental funds can be found on pages 30 through 37. Individual fund data for each of the non -major governmental funds is provided in the form of combining statements which can be found on pages 124 through 138. The City adopts an annual appropriated budget for its General Fund and other major special revenue funds. Budgetary comparison statements have been provided to demonstrate compliance with the budget. The comparisons can be found on pages 105 through 109. Proprietary funds. When the City charges its customers fees to cover the cost of the services it provides, these services are generally reported in proprietary funds. The City maintains two different types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. Enterprise refers to the fund type, while business -type refers to the activity type. The City uses enterprise funds to account for the operations of its Sports Complex, RCMU, Fiber Optic Network, and REGIS Connect. Internal service funds, by contrast, are an accounting mechanism used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for vehicle/equipment replacement and computer equipment/technology replacement. Because these services predominantly involve governmental rather than business -type activities, this fund type has been included within governmental activities in the government -wide financial statements. Internal service funds are presented as proprietary funds because both enterprise and internal service funds follow the accrual basis of accounting. In the fund financial statements section, proprietary funds provide similar information to that contained in the business -type activities in the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the operations of the Sports Complex, RCMU, Fiber Optic Network, and REGIS Connect. The Sports Complex, RCMU, and Fiber Optic Network are considered to be major funds of the City while REGIS Connect is reported as a non -major fund. All internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements and can be found on pages 166 through 168. The basic proprietary fund financial statements can be found on pages 40 through 47. 7 Fiduciary funds. Fiduciary funds are used to account for resources held in a trustee or agency capacity for others and, therefore, cannot be used to support the government's own programs. Activities reported in this category include special deposits, assessment districts, and the Successor Agency of the Former Redevelopment Agency. As of January 11, 2012, the City elected to serve as the Successor Agency of its former Redevelopment Agency (Successor Agency), which was dissolved by state law. See Note 17 in the notes to financial statements for more information. The Successor Agency activity is accounted for in a private -purpose trust fund. In these cases, the City has a fiduciary responsibility and is acting as a trustee. The other activities reported in this fund category are accounted for in agency funds. An agency fund is used to report resources held by the City in a purely custodial capacity. Fiduciary funds are not reflected in the government -wide financial statements because the resources of these funds are not available to support the City's own programs. The accounting used for private -purpose trust funds is much like that used for proprietary funds, whereas, agency fund assets are offset by a liability to the party on whose behalf they are held, and they have no measurement focus. The City's fiduciary activities are reported in a separate statement of fiduciary net position on page 48. Individual fund data for each agency fund is provided in the form of combining statements found on pages 172 through 182. Notes to 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. Notes to financial statements begin on page 51. Government -wide Financial Analysis Our analysis focuses on the City's net position and the changes in net position as a result of the City's activities. Comparative total data for the prior fiscal year has been presented in the summary tables and charts. An analysis of the significant increases/decreases from the prior fiscal year is provided below. Net position, the difference between a government's assets and deferred outflows of resources and its liabilities and deferred inflows of resources, may serve, over time, as an indicator of a government's financial position. The government -wide statement of net position for the City's governmental and business -type activities indicate that as of June 30, 2019, total assets and deferred outflows of resources, of which 58% represents net capital assets of the City, exceed total liabilities and deferred inflows of resources by $1,277,126,391. 0 The table below is a condensed version of the City's statement of net position for the fiscal year ended June 30, 2019, with comparative data from the previous year. Net Position June 30, 2019 (In Thousands) Governmental Business -Type Acti\nties Acti\nties Total 2019 2018 2019 2018 2019 2018 Current and other assets $ 526,218 $ 492,081 $ 34,204 $ 19,175 $ 560,422 $ 511,256 Net OPEB asset 21 - - - 21 - Net pension asset 3,278 448 192 23 3,470 471 Capital assets, net 788,861 819,589 35,442 33,679 824,303 853,268 Total assets 1,318,378 1,312,118 69,838 52,877 1,388,216 1,364,995 Deferred outflows related to OPEB 681 1,054 - - 681 1,054 Deferred outflows related to pension 25,307 29,869 798 947 26,105 30,816 Total deferred outflows 25,988 30,923 798 947 26,786 31,870 Current and other liabilities 13,788 20,072 2,227 1,626 16,015 21,698 Long-term net OPEB liabilty - 291 - - - 291 Long-term net pension liabilities 83,184 82,436 2,424 2,456 85,608 84,892 Long-term obligations outstanding 16,105 14,970 13,556 - 29,661 14,970 Total liabilities 113,077 117,769 18,207 4,082 131,284 121,851 Deferred inflows related to pension 6,306 4,946 285 232 6,591 5,178 Total deferred inflows 6,306 4,946 285 232 6,591 5,178 Net position: Investment in capital assets 786,942 819,589 34,507 33,679 821,449 853,268 Restricted 347,134 314,706 630 735 347,764 315,441 Unrestricted 90,907 86,031 17,007 15,096 107,914 101,127 Total net position $ 1,224,983 $ 1,220,326 $ 52,144 $ 49,510 $ 1,277,127 $ 1,269,836 .0 The chart below displays the proportionate sections of the City's net position. Net inve capital 64,32% Investment in Capital Assets Restricted for: Community development projects Public safety Parks and recreation Fire protection Engineering and public works Community services Capital projects Public benefit - Municipal Utility Unrestricted Total Net Position Net Position June 30, 2019 .$1.277.126.391 Unrestricted Restricted 27.23% Net Position June 30, 2019 (In Thousands) Governmental Business -Type Activities Activities _ $ 786,942 $ 34,507 $ L Total 1,449 182,970 - 182,970 1,108 - 1,108 8,328 - 8,328 43,671 - 43,671 70,359 - 70,359 7,427 - 7,427 33,271 - 33,271 - 630 630 90,907 17,007 107,914 $ 1,224,983 $ 52,144 $ 1,277,127 Community development projects 14.33% Public safety 0.09% Parks and recreation 0.65% * Fire protection 3.42% ■ Engineering and public works 5.51 % ■ Community services 0.58% ■ Capital projects 2.61 % ■ Public benefit - Municipal Utility 0,05% Percent (%) of Total Net Position 64.3% 14.3% 0.1% 0.7% 3.4% 5.5% 0.6% 2.6% 0.1% 8.4% 100.0% The largest portion of the City's net position represents the City's net investment in capital assets in the amount of $821,448,703, which is comprised of $786,942,172 for governmental activities and $34,506,531 for business -type activities. This classification of net position is approximately 65% of the total net position. This amount consists of capital assets, net of accumulated depreciation, and is reduced by outstanding debt attributed to the acquisition, construction, or improvement of the assets. The City uses these capital assets to help provide essential services to the citizens; consequently, these assets are not available for future spending. 10 The City's restricted net position amounts to $347,762,756, which is comprised of $347,133,366 for governmental activities and $629,390 for business -type activities. This classification of net position is approximately 27% of the total net position. This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments, and is dedicated to specific purposes such as community development projects, public safety, parks and recreation, fire protection, engineering and public works, community services, capital projects, and municipal utility for public benefit. The City's unrestricted net position is $107,914,932, which is comprised of $90,907,741 for governmental activities and $17,007,191 for business -type activities. This classification of net position is approximately 8% of the total net position. This amount represents the portion of net position that does not meet the definition of "investment in capital assets" or "restricted net position." The unrestricted net position may be used to meet the government's ongoing obligations to citizens and creditors. At the end of the fiscal year, the City is able to report positive balances in all categories of net position for the government. Changes in Net Position During Fiscal Year 2018/19, the City's total net position increased by $7,290,810, which is comprised of increases of $4,657,135 in governmental activities and $2,633,675 in business -type activities. The current fiscal year's change in net position is, however, a 37% decrease from the prior fiscal year's change in net position. Total assets for the current year were $1,388,215,929, an increase of $23,220,529 to the City's net position, or a 2% increase from the prior fiscal year. The increase in total assets is due to the following: an increase in current and other assets by $49,166,386; an increase in the net pension asset of $2,998,082; and a decrease in net capital assets of $28,964,980. Current and other assets for the current year were $560,422,260 which is an increase of $49,166,386, or 10%, from prior fiscal year's balance of $511,255,874. This increase is due to the following: an increase in overall cash and investments of $20,599,743; an increase of $12,023,922 in notes and loans receivables due to new notes to Day Creek Senior Housing Partners, L.P. and Day Creek Senior Housing Partners 2, L.P. from the Housing Successor Agency Special Revenue Fund; an increase in restricted cash and investments with fiscal agents for governmental activities of $4,444,488 in Housing Successor Agency Special Revenue Fund for an escrow account established for a low-income housing project; and an increase in restricted cash and investments with fiscal agents for business -type activities of $12,620,653 in the Fiber Optic Network Fund related to the issuance of the 2019 Lease Revenue Bonds. • The net pension asset increased by $2,998,082, or 636%, to $3,469,467. This was largely due to strong actual investment income, which coincides with the updated discount rate assumption of 6.00% from 5.75% in the actuarial valuation as of June 30, 2018, which increased the fiduciary net position of the PARS Retirement Enhancement Plan. However, other changes in assumptions for demographic and mortality scale tables reduced the total pension liability. Capital assets net of accumulated depreciation for the current year were $824,303,161, which is a decrease of $28,964,980, or 3%, from the prior fiscal year's balance of $853,268,141. The overall decrease is due to the net of the following: an increase in land for the purchase of property on Haven Avenue between Foothill Boulevard and Civic Center Drive in the amount of $5,202,315; a decrease in construction -in -progress for project costs incurred for the Base Line Road at 1-15 Interchange project which resulted in the write-off of $36,406,951 for portions of the project that are considered capital assets of other entities, and is reported as a special item that can be found in Note 16 of the notes to financial statements; an increase in construction -in -progress of $4,768,230 for various street improvement projects; an increase in various building improvements in the amount of $1,382,938; an increase in equipment and vehicles in the amount of $6,103,849 due primarily to the purchase of the Fire District back-up data system center, five vehicles for public works, and a fire engine truck; an increase in infrastructure from various projects in the amount of $8,419,064 of which $2,331,300 are donated infrastructure from developers; and depreciation expense of $19,516,552 in the governmental activities and $1,696,872 in the business -type activities. 11 Deferred outflow of resources are $26,786,489, a decrease of $5,083,342 to the City's net position, or 16%, from the prior fiscal year amount, and deferred inflow of resources are $6,591,339, a decrease to the City's net position of $1,412,742, or 28%, from the prior fiscal year amount. These changes were solely related to deferred outflows and inflows related to the City's pension and other post -employment benefits. See Notes 11, 12, and 13, as applicable, of the notes to financial statements for more information. Total liabilities for the current year were $131,284,688, an increase of $9,433,635, or 8% increase from the prior fiscal year's amount of $121,851,053. The most significant components of the change are due to the following: a decrease in current and other liabilities by $5,682,691 and an increase in long-term obligations outstanding of $14,690,641. • Current and other liabilities for the current year were $16,015,380. This is a decrease of $5,682,691, or 26%, from prior fiscal year balance of $21,698,071, which is primarily due to the timing of cash disbursements at year-end, causing a reduction in accounts payable in governmental activities in the amount of $5,452,162. • During Fiscal Year 2018/19, the City entered into two new long-term debt obligations: 1) a capital lease in the governmental activities for Dell blade servers and software for $2,446,503 and 2) the 2019 Lease Revenue Bonds in the business -type activities for $13,555,938. More information can be found in Note 7 of the notes to financial statements. 12 Below is the condensed statement of activities of the City's governmental and business -type activities for the year ended June 30, 2019. Revenues: Program Revenues: Charges for services Operating grants and contributions Capital grants and contributions General Revenues: Taxes: Property taxes Admissions tax Transient occupancy taxes Sales taxes Franchise taxes Intergovernmental - Motor vehicle in -lieu Use of money and property Other Gain on sale of capital asset Total revenues Expenses: General government Public safety - police Public safety - fire protection Public safety - animal center Community development Community services Engineering and public works Interest on long-term debt Sports Complex Municipal Utility REGIS Connect Fiber Optic Network Total Expenses Increase (decrease) in net position before transfers and extraordinary Changes in Net Position Year Ended June 30, 2019 (In Thousands) Governmental Activities 2019 2018 Business -Type Activity 2019 2018 Total 2019 2018 $ 34,206 $ 29,384 * $ 13,426 $ 12,669 $ 47,632 $ 42,053 10,962 8,846 - - 10,962 8,846 17,348 16,584 663 679 18,011 17,263 75,480 72,760 * - - 75,480 72,760 7 6 146 62 153 68 4,054 3,578 - - 4,054 3,578 32,803 31,478 32,803 31,478 8,000 7,998 8,000 7,998 85 93 - - 85 93 19,113 5,781 850 391 19,963 6,172 7,764 7,955 - 601 7,764 8,556 58 - - - 58.00 - 209,880 184,463 15,085 14,402 224,965 198,865 19,671 31,792 - - 19,671 31,792 40,690 38,576 40,690 38,576 37,964 34,558 37,964 34,558 3,308 3,263 3,308 3,263 17,684 16,675 17,684 16,675 18,442 19,060 18,442 19,060 30,443 31,574 30,443 31,574 233 214 - - 233 214 - - 2,746 2,852 2,746 2,852 9,408 8,419 9,408 8,419 19 105 19 105 658 145 658 145 168,435 175,712 12,831 11,521 181,266 187,233 item 41,445 8,751 2,254 2,881 43,699 11,632 Transfers (381) (676) 381 676 - - Special item (36,407) - - - (36,407) - Increase (decrease) in net position 4,657 8,075 2,635 3,557 7,292 11,632 Net Position at Beginning of Year 1,220,326 1,226,519 49,509 45,278 1,269,835 1,271,797 Restatement of Net Position - (14,268) - 675 - (13,593) Net Position at End of Year $1,224,983 $1,220,326 $ 52,144 $ 49,510 $1,277,127 $ 1,269,836 * 2018 was adjusted to reflect a change in the classification of special benefit assessments from the Lighting Districts and Landscape Maintenance Districts Special Revenue Funds. The condensed statement of activities above shows the total net position increased by $7,290,810. Governmental activities increased the City's net position by $4,657,135, accounting for approximately 64% of the total growth in net position, paired with an increase of $2,633,675 in the business -type activities' net position. 13 Governmental Activities The following charts provide a snapshot of the City's governmental activities for Fiscal Year 2018/19, showing the distribution of revenues by source, as well as a comparison of revenues versus expenses by the program. Other s 7rk, use of Money an 9.1% Capital Contributions and Grants 8.3% operating Contributions and Grants 5.2% Charges f 16 .w«U1046 �u s1isO,ovv g}eta G� 512O, 000 5100,000 s80,000 Revenues By Source Governmental Activities Year Ended June 30, 2019 $209,879.895 Property taxes 36.0% tax end incy s 6 5 Revenue and Expense By Function Govemmental Activities Year Ended June 30, 2019 (In Thousands) Franchise taxes 3.8% s60,000 $40,0O0 Engheemg General General Public safety- Public safety- Pubbc safety- communty Cvrnmunty and public lnlarest on Revenues. govemmant police fire protecton animal center daVelapmeill services works long-term debt special Item, and Transfers Revenues $8J604 1.948 580 215 12,430 4.217 34.520 - $147.365 Expenses s19,671 40,090 37,984 3,3m 17,884 18.442 30,443 233 s3$,790 a Revenues r Expenses 14 Governmental Activities (In Thousands) Total Cost Net Cost of Services of Services 2019 2018 2019 2018 General government $ 19,671 $ 31,792 $ (11,067) $ (24,488) Public safety -police 40,690 38,576 $ (38,742) $ (36,614) Public safety -fire protection 37,964 34,558 $ (37,384) $ (34,216) Public safety -animal center 3,308 3,263 $ (3,093) $ (3,051) Community development 17,684 16,675 $ (5,254) $ (4,937) Community services 18,442 19,060 $ (14,225) $ (15,176) Engineering and public works 30,443 31,574 $ 4,077 $ (2,204) Interest on long-term debt 233 214 $ (233) $ (214) Total $ 168,435 $ 175,712 $ (105,921) $ (120,900) The City's governmental activities increased its net position by $4,657,135 at the end of the fiscal year. This change is comprised of a net cost of services of $105,920,361 offset by transfers to business -type activities of $380,681, the write-off of noncapitalized project costs reported as a special item of $36,406,951, and general revenues of $147,365,128. As compared to the City's prior fiscal year outcome of $8,074,406, this is a decrease of $3,417,271 or 43%. The most significant changes in the governmental activities in revenues and expenses are discussed below: The net cost of services decreased to $105,920,361 from the prior fiscal year amount of $120,899,697, a decrease of $14,979,336 from all areas of the governmental activities, which had a positive impact on the City's net position, primarily due to the positive and negative effects in the following areas: • Charges for services program revenues increased to $34,205,611 from the prior fiscal year amount of $29,383,525, an increase of $4,822,086, resulting from increases in general government of $1,277,840 and engineering and public works of $2,882,409. Governmental expenses decreased to $168,435,128 from the prior fiscal year amount of $175,712,911, a decrease of $7,277,783, resulting from the net effect of increases and decreases in the following areas: a decrease of $12,121,161 in general government due to the prior fiscal year's purchase, acquisition, and retrofit of citywide streetlights; an increase of $2,113,231 in public safety — police due to the increase in contract services with the County of San Bernardino Sherriff's Department for the addition of officers and operating costs passed through to the City; an increase of $3,405,814 in public safety — fire protection due to current fiscal year depreciation related to the All -Risk Training Facility which was capitalized during Fiscal Year 2018/19, compensated absences, OPEB, and pension costs; and a decrease of $1,129,840 in Engineering and Public Works due to decreases in compensated absences and pension costs as well as changes in various operational areas. General revenues and transfers increased to $146,984,477 from the prior fiscal year amount of $128,974,496, a decrease of $18,010,344. The net decrease is primarily due to the following areas: Revenue from taxes increased to $120,345,011 from the prior fiscal year amount of $115,820,553, an increase of $4,524,458. The increase in revenue from taxes is primarily due to the increases in property taxes of $2,719,402 resulting from the County's annual inflation adjustment combined with new secured properties being added to the tax roll and positive home buying activity; increased sales taxes of $1,325,078 due to a healthy local economy; and increased transient occupancy taxes of $476,052 due to a full year of operations for two of the City's hotels that opened late in the prior fiscal year, and the opening of a new hotel in the second half of the current fiscal year. 15 • Use of money and property increased to $19,113,374 from the prior fiscal year amount of $5,781,295, an increase of $13,332,079. The increase is due to the following: an increase of $558,985 in interest earnings due to growth in the City's cash and investments as a result of the current fiscal year operations combined with the net change in the unrealized gain/loss on investments from the prior year to the current year which resulted in a positive impact of $8,274,425. The change in investment fair value as of fiscal year-end is included in this category and reflects the temporary mark -to -market of the City's investments. The remaining increase is due to the conveyance of land held for resale in exchange for a note receivable pertaining to a low-income housing project in the Housing Successor Agency Special Revenue Fund in the amount of $3,700,000. Additionally, there was an increase of $464,811 on the current year accrued interest on the note receivables in the Housing Successor Special Revenue Fund; however, that accrued interest is recorded as unavailable revenues on the fund statements. • A special item of $36,406,951 was reported in the current fiscal year for the write-off of other entities' project costs accumulated in construction -in -progress for the Base Line Road at 1-15 Interchange project. More information on this special item can be found in Note 16 of the notes to financial statements. Business -Type Activities The following chart reflects the City's business -type activities for Fiscal Year 2018/19, showing a comparison of revenues versus expenses by function. Revenue and Expense By Function Business -Type Activities Year Ended June 30.2019 $18 000 (in Thousands) $16,000 $14.000 $12.000 ■ $10,000 mo $4,000 $2,000 Sports camp;ex Munncipal Utility REGIS Conned Fiber Optic Network General Revenues and Transfers Revenues $541 13.192 25 330 $1.377 Expenses $2.746 9.408 19 658 $- ■ Revenues s Expenses 16 Business -Type Activities (In Thousands) Total Cost Net Cost of Services of Services 2019 2018 2019 2018 Sports Complex $ 2,746 $ 2,852 $ (2,205) $ (2,603) Municipal Utility 9,408 8,419 3,784 3,989 Fiber Optic Network 658 145 (328) 503 REGIS Connect 19 105 6 (62) Total $ 12,831 $ 11,521 $ 1,257 $ 1,827 The City's business -type activities' net position increased by $2,633,675, a decrease of $923,163, or 26%, as compared to the prior fiscal year amount of $3,556,838. The most significant changes in the business - type activities in revenues and expenses are discussed below: • The Sports Complex Fund experienced a decrease in net position in the amount of $286,666, a decrease of $66,181 from the prior fiscal year. While there was a decrease in net position, total income before contributions increased by $80,177 and the interfund transfer from the General Fund decreased by $146,358 as less supplemental funding was required for current year operations. • The Municipal Utility Fund experienced an increase in net position in the amount of $3,177,980, a decrease of $156,872 from the prior fiscal year, primarily due to an increase in transfers to the General Fund by $149,120 to cover the cost of operations. • The Fiber Optic Network Fund experienced a decrease in net position in the amount of $264,930, a decrease of $770,373 from the prior fiscal year. This was due to an increase in operating expenses of $310,055 and a decrease in capital contributions of $339,803. • The REGIS Connect Fund experienced an increase in net position in the amount of $7,291, an increase of $70,263 from the prior fiscal year. This was primarily due to operating expenses decreasing by $85,685. Financial Analysis of the Government's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. The following financial analysis is performed only for governmental and proprietary funds. The fiduciary funds are excluded from this analysis as they do not represent resources available to the City. Governmental Funds. The focus of the City's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, assigned and unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. The combined fund balance of $478,117,692 represents the starting point for the reconciliation of the balance sheet of governmental funds to the statement of net position detailed on page 35. This total includes the General Fund balance of $118,780,845, of which $15,996,673, or 14%, is nonspendable. This means that these amounts cannot be spent because they are not in spendable form or are legally or contractually required to be maintained intact; $10,000,335, or 8%, are restricted fund balances which are the result of externally enforceable limitations on use; $72,103,374, or 61%, are committed fund balances which have resulted from self-imposed limitations placed upon the funds by the City Council; and the assigned fund balances of $20,680,463, or 17%, are constrained by an intent for specific purposes by City management, but are neither restricted nor committed, in accordance with the City's policy. 17 The following chart illustrates the components of the General Fund balance as of June 30, 2019. Restricted 8 4% Committed 603% General Fund Balance June 30, 2018 $118,780,845 Nanspendable Assigned 13.5% 17.4 Percent (%) of Total Fund General Fund Balance (In Thousands): Total Balance Nonspendable $ 15,997 13.5% Restricted 10,000 8.4% Committed 72,103 60.7% Assigned 20,680 17.4% Total Fund Balance $ 118,780 100.0% The committed fund balances for the General Fund noted above are in accordance with the City's Fund Balance Policy. This policy ensures a prudent level of protection for the finances of the City in times of emergencies, revenue declines, and other unforeseen events. Certain committed funds enable the organization to operate in a business -like structure to address future liabilities while certain other committed funds help to support the City's credit rating which is also important to promote fiscal excellence. In order to accommodate any changes to these commitments that may become necessary due to changes in operations or changes in City Council goals, staff annually brings this policy and its accompanying resolution before the City Council and Fire Board members for approval at the end of each fiscal year. The City's Fund Balance Policy for the committed fund balances are as follows: • Chanaes in Economic Circumstances The funding goal for the fund balance committed for Changes in Economic Circumstances is established at a goal of a nine -month reserve, or 75%, of the operating budgets for the City and the Fire District. The specific uses of this commitment include: 1) the declaration of a state or federal state of emergency or a local emergency as defined in Rancho Cucamonga Municipal Code Section 2.36.020; or 2) a change in economic circumstances in a given fiscal year that results in revenues to the City/Fire District being insufficient to cover expenditures for one or more fiscal years. The City Council/Fire Board may, by the affirming vote of four members, change the amount of this commitment and/or the specific uses of these monies. 18 • City Facilities Capital Repair The City's General Fund balance committed for City facilities capital repair and property acquisition is established at a minimum goal of 50% of capital assets value comprised of construction in progress (excluding infrastructure), building improvements, and improvements other than building for governmental activities, excluding assets owned by the Rancho Cucamonga Fire Protection District. • Fire District Facilities Capital Repair The Fire District's fund balance committed for the Fire District facilities capital repair is established at a minimum goal of 50% of capital assets value comprised of construction in progress (excluding infrastructure), building improvements, and improvements other than building for public safety -fire activities. • Working Capital The City's General Fund balance committed for Working Capital is established at a goal of a minimum of 5% of the City's General Fund operating budget for the upcoming fiscal year. The Fire District's fund balance committed for Working Capital is established at a goal of a minimum of 50% of the District's operating budget for the upcoming fiscal year. • Self -Insurance The City's General Fund balance and the Fire District's fund balance committed for Worker's Compensation, General Liability, and Employment Practices Liability claims is established at a minimum goal of eight times the City's and the District's total yearly SIRs for all types of insurance coverage. • PASIS Worker's Compensation Tail Claims The Fire District's fund balance committed for payment of outstanding Worker's Compensation claims remaining after the District's withdrawal from PASIS is established at a goal equal to the most recent fiscal year end Claims Cost Detail Report from the District's third -party administrator plus 15%. • Employee Leave Payouts The City's General Fund balance and the Fire District's fund balance committed for employee leave payouts as valued in accordance with the City's labor contracts as of the last day of the fiscal year. • Vehicle and Equipment Replacement The Fire District's fund balance committed for the replacement of fire safety vehicles and equipment as determined based on the District's replacement criteria is established at a minimum goal of 50% of District vehicle and equipment replacement value. • Law Enforcement The City's General Fund balance committed for public safety purposes, including operations, equipment, capital outlay, personnel, and booking fees. The funding goal for this reserve is the equivalent of 100% of the most recently approved Schedule A from the San Bernardino County Sheriff's Department. Usage of the committed fund balances noted above as well as those classified as assigned in the General Fund's balance sheet is based upon plans established by the City Council and the City's management during the course of developing the annual budget. These amounts are set aside each year for specific purposes and can only be used for those specific purposes. However, recurring General Fund operations have been fully funded without the use of reserves. 19 The balance sheet presents the General Fund, the Development Impact Fees Special Revenue Fund, the Lighting Districts Special Revenue Fund, the Housing Successor Agency Special Revenue Fund, the Fire District Special Revenue Fund, and other non -major governmental funds. On pages 30 through 33 the balance sheet of the governmental funds is shown. The combined fund balance of $478,117,692, increased by $37,288,916, or 9%, from the prior fiscal year amount of $440,828,776. The General Fund has a fund balance of $118,780,845, which has increased by $3,698,752, or 3%, from the prior fiscal year primarily due to the net result of revenues, expenditures, and other financing sources and uses. The Development Impact Fees Special Revenue Fund is being reported as a major fund as of June 30, 2019. In the current fiscal year, separately reported non -major governmental funds that had similar operations were consolidated into this single external fund in the current fiscal year. The fund balance as of June 30, 2019 is $55,817,514, which has increased by $11,075,586, or 25%, from the prior fiscal year due to increased development activity during the current fiscal year as well as the impact of certain fee increases that took effect during the year. The Lighting Districts Special Revenue Fund has a deficit fund balance of $5,587,105, which has improved by $1,369,831, or 20%, from the prior fiscal year. The deficit fund balance is due to the outstanding interfund loans from the General Fund for the prior year purchase and acquisition of streetlights and installation of LED lighting. As the interfund loans are paid down each year from current operations, the deficit fund balance will continue to improve. The Housing Successor Agency Special Revenue Fund has a fund balance of $139,933,044, which has increased by $4,032,347, or 3%, from the prior fiscal year primarily due to the conveyance of land held for resale in exchange for a note receivable pertaining to a low-income housing project. The Fire District Special Revenue Fund (inclusive of the Fire District's General Fund, Community Facilities District 85-1 Fund, and Community Facilities District 88-1 Fund) has a fund balance of $76,043,480, which has increased by $11,181,953, or 17%, from the prior fiscal year primarily due to the positive impact of the mark -to -market for the District's investments at fiscal year-end, increased property tax receipts, and decreased capital outlay activity for the All -Risk Training Facility from the prior fiscal year. It should be noted that the total fund balance for the Fire District Special Revenue Fund of $76,043,480 is $1,553,545 less than the total fund balance per the District's component unit financial statements of $77,597,025. This is due to differences in the reporting of the advance from the City to the District on the City's financial statements versus the District's component unit financial statements. On the City's financial statements, the advance is treated as an interfund liability since the District is basically viewed as one of the departments of the City. There is an offsetting interfund asset (advances to other funds) in the General Fund. In order to reflect this liability on the District's balance sheet within the City's financial statements, resources must be allocated from the District's fund balance to provide funding for the liability for reporting purposes only. On the Fire District's component unit financial statements, the advance is treated as a long- term liability and does not require the allocation of fund balance to fund the liability. For the entity -wide financial statements, the advances to and from other funds are eliminated against each other as they both relate to the City as a whole. The other governmental funds make up the remainder of the combined fund balance for all governmental funds, classified as Non -Major Governmental Funds. These funds consist of the City's 26 special revenue funds and 1 capital project fund. These funds have a combined fund balance of $93,129,914, which has increased by $5,930,446, or 7%, from the prior fiscal year fund balance of $87,199,468, primarily due to the following: o The Gas Tax Special Revenue Fund has a fund balance of $10,805,472, which has increased by $1,502,067 from the prior fiscal year fund balance of $9,303,405 as a result of increased revenues, primarily due to new revenues resulting from SB1, which imposes an additional 12-cent per gallon increase in the gasoline excise tax. 20 o The Landscape Maintenance Districts Special Revenue Fund has a fund balance of $19,894,912, which has increased by $2,440,876 from the prior fiscal year fund balance of $17,454,036. This increase is largely due to increases in special benefit assessments for some of the 10 landscape maintenance districts that make up the special revenue fund. o The Library Services Special Revenue Fund has a fund balance of $7,534,549, which has increased by $818,799 from the prior fiscal year fund balance of $6,715,750 as a result of increases in property tax and use of money and property revenues. Proprietary Funds. The City's proprietary funds consist of four enterprise funds (three major and one non - major funds) and two internal service funds. The three major enterprise funds are the Sports Complex Fund, which accounts for the activities of the Sports Complex; the Rancho Cucamonga Municipal Utility (RCMU) Fund, which accounts for the City's electric utility operations; and the Fiber Optic Network Fund, which accounts for the costs associated with the City's fiber optic network as well as leases for conduit and fiber access. The remaining non -major enterprise fund is the Rancho Cucamonga Enterprise Geographic Information Systems (REGIS) Connect Fund, which accounts for the City's enterprise Geographic Information Systems (GIS) services. The internal service funds are the Equipment and Vehicle Replacement Fund and the Computer Equipment/Technology Replacement Fund. These funds are used by management to charge the costs of certain activities, such as computer equipment replacement, to individual funds. Net position for the enterprise funds is $52,143,112 of which $34,506,531 represents the amount invested in capital assets and $629,390 is restricted for the purpose of public benefit through the Municipal Utility. The unrestricted net position amounts to $17,007,191. The increase in net position for the enterprise funds of $2,633,675 is due to the following: • Before transfers from the General Fund in the amount of $1,770,941, the Sports Complex Fund experienced a loss of $2,057,607. Considering the transfers from the General Fund the net decrease in the fund's net position is $286,666 due to normal operating activities. • The Municipal Utility Fund experienced an increase in net position of $3,177,980, a $156,872 decrease from the prior year's activity. Operations were fairly consistent from the prior year with a slight increase in the transfer out to the General Fund to offset general City operations. • Before capital contributions from the City of $248,927, the Fiber Optic Network Fund experienced a loss of $513,857. Taking the capital contributions into consideration resulted in a net decrease in the fund's net position of $264,930, primarily due to interest expense related to the 2019 Lease Revenue Bonds. • REGIS Connect Fund experienced an increase in net position of $7,291, primarily due to a decrease in operating expenses as a result of reduced activity. Net position for the internal service funds is $10,342,163, of which $5,804,355 represents the amount invested in capital assets. Unrestricted net position amounts to $4,537,808 which will be used to cover operations, future equipment and vehicle replacements, and future computer equipment and technology replacements, as well as debt service payments. The total net position increased for these funds by $490,252 due to operations and transfers from the General Fund. • Equipment and Vehicle Replacement Fund experienced a loss in the amount of $640,464 due primarily to depreciation expense related to the planned replacement of City vehicles and equipment. 21 Before transfers from the General Fund and Fire District Special Revenue Fund in the amount of $2,098,360, the Computer Equipment and Technology Replacement Fund experienced a decrease in net position in the amount of $967,644. After net transfers, the Computer Equipment and Technology Replacement Fund experienced an increase in net position in the amount of $1,130,716. The additional resources transferred from the City General Fund will assist with the funding of future computer equipment and technology replacement in accordance with the City's Information Technology Master Plan. General Fund Budgetary Highlights During the year, with the recommendation from the City's staff, the City Council may revise the City's budget as needed. Adjustments were made periodically as additional appropriations were necessary to cover the cost of projects that either had required change orders for additional work, or the estimated cost at the beginning of the project changed due to external factors. Adjustments were also made through increases or decreases to budgets in order to maintain the current level of services. For example, increased development activity may result in the need to utilize additional contract inspector services to handle the additional workload. All amendments that either increase or decrease appropriations are approved by the City Council. For the City's General Fund, ending revenues of $94,570,529 were $4,628,659 more than the final budgeted revenues of $89,941,870. The significant areas that showed variances from the budget are as follows: (1) taxes had a positive variance of $1,081,982 primarily due to sales taxes exceeding budget by $728,673 and post -RDA residual balance property taxes exceeding budget by $214,324; (2) use of money and property had a positive variance of $1,741,473 due to increases in interest earnings combined with the net change in the unrealized gain/loss on investments from the prior year to the current year; and (3) miscellaneous revenue had a positive variance of $843,970 due to the unanticipated solar rebates from Southern California Edison, non -abated reimbursements exceeding budget by $129,744, insurance loss recoveries in the amount of $234,483, and retrospective insurance premium adjustments of $276,535. The General Fund's actual ending expenditures, including encumbrances, of $93,362,623 were $6,665,912 less than the final budget of $100,028,535. The significant areas that showed positive variances from the budget are in the following areas: o General Government in the amount of $1,001,007 due to savings from contract services, legal services, and electric utilities. o Public Safety — Police in the amount of $982,909 due to savings from contract services, vehicle operations and maintenance, and vehicle collision repair. o Community Services Administration in the amount of $337,296 due to savings from personnel, operations and maintenance, and contract services. o Engineering and Public Works Park Maintenance in the amount of $496,011 due to savings from personnel, contract services, and other operations and maintenance expenditures. o City Facilities Maintenance in the amount of $494,897 due to savings in personnel, contract services, and other operations and maintenance costs. o Capital Outlay in the amount of $3,753,567 due to the deferral of $3,600,000 in funding for the Public Safety Facility on the City's west -side until next fiscal year and less than anticipated completion of building improvements in the amount of $113,782. o Transfers Out in the amount of $(1,311,251) to provide unanticipated supplemental funding to the Computer Equipment/Technology Replace Internal Service Fund for future technology needs. 22 Capital Assets and Debt Administration Capital Assets As stated in the Overview of the Financial Statements, the financial statement format required by GASB Statement No. 34 reflects the capitalization and depreciation of infrastructure and other capital assets (e.g., buildings, vehicles, furniture and fixtures, etc.). At the end of the fiscal year, the City had $824,303,161, net of depreciation, invested in a broad range of capital assets. This amount represents a net decrease (including additions and deductions) of $28,964,980 from the prior fiscal year amount of $853,268,141. The table below presents the summary information on the City's capital assets. Capital Assets For the Year Ended June 30, 2019 (Net of Depreciation, In Thousands) Governmental Business -Type Activities Activities Total 2019 2018 2019 2018 2019 2018 Land $ 98,139 $ 92,937 $ 5,451 $ 5,451 $ 103,590 $ 98,388 Right-of-way 237,013 237,013 - - 237,013 237,013 Construction in progress 11,407 93,939 1,696 1,544 13,103 95,483 Buildings improvements 151,797 113,745 6,025 6,456 157,822 120,201 Improvements other than buildings 25,533 27,197 2,362 2,491 27,895 29,688 Equipment and vehicles 13,380 10,027 170 107 13,550 10,134 Furniture and fixtures 363 489 - - 363 489 Infrastructure 250,549 243,317 19,738 17,630 270,287 260,947 Intangible 680 925 - - 680 925 Total $ 788,861 $ 819,589 $ 35,442 $ 33,679 $ 824,303 $ 853,268 As discussed earlier, the most significant change in capital assets for governmental activities is the decrease in construction -in -progress due to the write-off of other entities' project costs incurred for the Base Line Road at the 1-15 Interchange Project in the amount of $36,406,951. This write-off is reported as a special item in the financial statements. Additional information can be found in Note 16 of the notes to financial statements. Other changes in capital assets are net increases in construction in progress for various projects, contributions of infrastructure, and various purchases of land, equipment and vehicles. The most significant change in capital assets for business -type activities is the increase in construction -in - progress of $1,126,775 for the on -going construction of the City's fiber optic network. During Fiscal Year 2018/19, the City issued the 2019 Lease Revenue Bonds in the amount of $13,555,938 to expand the City's existing fiber optic network for public and economic development purposes. Additional information on the City's capital assets can be found in Note 5 of the notes to financial statements. Debt Administration At fiscal year end, the City's governmental activities had total debt outstanding in the amount of $16,105,071. This consists of capital leases, advances from the Successor Agency, compensated absences, and claims and judgments payable. This is an increase of $1,134,703, or 9%, compared to the prior fiscal year, the majority of which is attributed to the new capital lease in the amount of $2,446,503 for the purchase of the Dell blade servers and software. 23 Additionally, the City issued the 2019 Lease Revenue Bonds in the amount of $13,555,938 during Fiscal Year 2018/19. The purpose of this long-term debt is to finance the acquisition, construction, and equipment of an expansion to the City's existing fiber optic network. The bonds are comprised of a Series A that was issued for a par value of $9,875,000, with a $1,371,795 bond premium, and a Series B that was issued for a par value of $2,320,000, with a $10,857 bond discount. There was no long-term debt in the business - type activities previously. The summary of outstanding long-term debt with comparative amounts for the prior fiscal year is presented below: Long -Term Debt For the Year Ended June 30, 2019 (In Thousands) Governmental Business -Type Activities Activities Total 2019 2018 2019 2018 2019 2018 Capital Leases (Note 7) $ 1,919 $ - $ - $ $ 1,919 $ Lease Revenue Bonds (Note 7) - - 13,556 13,556 - Advances from Successor Agency (Note 8) 3,954 3,954 - 3,954 3,954 Compensated Absences (Note 9) 7,138 7,498 7,138 7,498 Claims and Judgments Payable (Note 14) 3,094 3,519 - 3,094 3,519 Total $ 16,105 $ 14,971 $ 13,556 $ $ 29,661 $ 14,971 Additional information on the long-term debt in the table above can be found in the indicated notes in the notes to financial statements. Economic Factors and Next Year's Budgets In its third quarterly report for September 2019, the UCLA Anderson Forecast's quarterly outlook for the national economy anticipates slow growth but no recession predicted. The real Gross Domestic Product (GDP) growth is expected to be at 2.1 % in 2019 and 1.2% in 2020. Slow growth is anticipated to reach a near recession rate of 0.4% in the second half of 2020; but it is expected to return to 2.1 % in 2021. California's unemployment rate according to the Employment Development Department (EDD) as of September 2019 fell to 4.0%, a slight decrease from the prior year unemployment rate of 4.1 %. In the same period, the U.S. unemployment rate declined to 3.5%, a decrease from the prior year unemployment rate of 3.7%. Locally, the following key economic indicators reflect steady and continued economic growth in the City: Low unemployment rate. The City's unemployment rate is at 2.5% as of September 2019. That is well below the State level of 3.5% and San Bernardino County level of 3.3%. Generally, the City's rate is around 0.5% - 2.5% lower than the County as a whole, and it is a reflection of the City's status as a major jobs producer. For example, employment by firms located in the City reached new peak levels (about 78,000) and is expected to continue to grow at a rate of 1,500 to 2,000 jobs a year over the next five to seven years. The City's strongest sectors for employment and payroll growth are manufacturing and professional services, along with financial and Insurance sectors. • Vacancy rates for warehousing in the greater geographical area are in the low 4.0% range, down over 2.0% from the prior year while the rental rate is 8.0% higher from the prior year. The City is one of the cities in this region with significant employment in manufacturing. • Modest growth is anticipated for the City's key revenue sources as indicated in the Fiscal Year 2019/20 Adopted Budget. In conjunction with this, it should be noted that property values are anticipated to increase 4.6%. 24 • During Fiscal Year 2018/19, the City received an upgrade in its credit rating by Standard & Poor's from AA- to AA+. This is the second -highest credit rating possible, exceeded only by AAA, which very few cities in California actually have, and the upgrade was largely attributed to the City's overall conservative approach to financial management and practices. While the City's general revenue picture is strong, it faces ongoing challenges with special revenue sources and increases in expenditures as noted below: A continual gradual decline of gas tax revenues due to low gas prices over the past couple of years, increased hybrid and electric vehicle sales, and processing changes at the state level coupled with required rehabilitation of roads and upgrades to curb ramps which average about $1,000,000 per year. Additionally, current standards and proposals by the Governor and Legislature that tie housing production goals to eligibility to receive SB1 gasoline excise tax funds could be devastating as both the establishment of these goals and timing for production of housing are largely outside of the control of the City. • Due to the ownership of the citywide streetlights, the City has realized a growing cost for knocked down streetlights. The rate for replacement of streetlights when one is knocked down due to a traffic accident or, in most cases, drunk or distracted driving, was largely underestimated. Additionally, the City is unfortunately unable to collect insurance recoveries for all the knockdowns because drivers leave the accident or do not have insurance. • Contract costs for the County of San Bernardino Sheriff Department are approaching $40 million, which is a 5.9% increase from the prior fiscal year. The increase is due to increases in pension cost and liability payouts. The expected increase from ongoing labor negotiations with the Safety Employee Benefit Association is not yet reflected in the budget. • Continued pension cost increases between 2.0-3.0% annually, combined with minimum wage increases, cause compression in part-time, and ultimately in full-time salary schedules. • Ongoing fiscal challenges in several of the City's special districts mean that expenses must be continuously monitored and managed within the existing revenue limitations imposed by Proposition 218. While contributions from the General Fund to the financially distressed funds ease the immediate burden, there still remains a need to address the long-term financial instability and the deferred and unfunded maintenance projects. The City's operating budget is comprised of the City General Fund, the Library Fund, and the Fire District Operating Funds (including CFDs 85-1 and 88-1). For Fiscal Year 2019/20, the City General Fund Budget is $88,290,270 which represents an increase of $4,345,870, or 5%, from the prior fiscal year. The Fiscal Year 2019/20 operating budget for the Fire District is $37,144,160 which represents an increase of $1,324,870, or 4%, from the prior year. The Fiscal Year 2019/20 Library Budget is $5,771,450 which represents an increase of $645,220, or 13%, from the prior year. For Fiscal Year 2019/20, there is no planned usage of reserves for the General Fund or the Library Fund. However, Fire CFD 85-1 includes the planned usage of reserves in the amount of $77,720 due to the adjustment of the assessments sent to the tax roll based on parcel type. Additional details regarding the City's operating budget and its overall Fiscal Year 2019/20 Adopted Budget can be found on the City's website. Questions or requests for information regarding the Adopted Budget should be directed to the Finance Department. 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 of Rancho Cucamonga's finances and to show the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department at the City of Rancho Cucamonga, 10500 Civic Center Drive, Rancho Cucamonga, California 91730. 25 THIS PAGE INTENTIONALLY LEFT BLANK 26 CITY OF RANCHO CUCAMONGA STATEMENT OF NET POSITION JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts, net of allowances Taxes Notes and loans Accrued interest Other loans Grants Internal balances Prepaid costs Deposits Net OPEB asset Net pension asset Restricted assets: Cash with fiscal agent Pension rate stabilization program Capital assets, not being depreciated Capital assets, net of depreciation Total Assets Deferred Outflows of Resources: Deferred OPEB related items Deferred pension related items Total Deferred Outflows of Resources Liabilities: Accounts payable Accrued liabilities Accrued interest Unearned revenue Deposits payable Due to other governments Noncurrent liabilities: Due within one year Long-term debt Compensated absences Claims and judgments Due in more than one year Long-term debt Advances from Successor Agency Compensated absences Claims and judgments Net pension liability Total Liabilities Deferred Inflows of Resources: Deferred pension related items Total Deferred Inflows of Resources Net Position: Net investment in capital assets Restricted for: Community development projects Public safety Parks and recreation Fire protection Engineering and public works Community services Capital projects Public benefit - Municipal Utility Unrestricted Total Net Position Primary Government Governmental Business -Type Activities Activities Total $ 328,445,335 $ 22,339,936 $ 350,785,271 7,695,495 7,093,152 162,028,943 1,095,247 1,553,097 789,895 2,507,493 1,178,525 32,255 21,041 3,277,756 5,150, 261 8,648,775 346,558,996 442,302,349 1,318,378,615 1,566,915 105,000 78,776 (2,507,493) 191,711 12,620,653 7,147,361 28,294,455 69,837,314 9,262,410 7,093,152 162,133,943 1,174,023 1,553,097 789,895 1,178, 525 32,255 21,041 3,469,467 17,770,914 8,648,775 353,706,357 470,596,804 1,388,215,929 681,207 - 681,207 25,307,203 798,079 26,105,282 25,988,410 8,621, 018 3,500,365 30,272 783,864 63,826 789,073 453,174 5,307,000 1,309,420 1,465, 999 3,953,624 1,831,630 1,784,224 83,184,151 113,077,640 6,306,106 798,079 1,413,641 90,593 203,312 3,626 515,790 310,000 13,245,938 2,424,148 18,207,048 285,233 26,786,489 10,034,659 3,590,958 233,584 787,490 579,616 789,073 763,174 5,307,000 1,309,420 14,711,937 3,953,624 1,831,630 1,784,224 85,608,299 131,284,688 6,591,339 6,306,106 285,233 6,591,339 786,942,172 182,969,655 1,107,725 8,328,083 43,670,889 70,359,487 7,426,766 33,270,761 90,907,741 $ 1,224,983,279 34,506,531 629,390 17, 007,191 $ 52,143,112 821,448,703 182,969,655 1,107,725 8,328,083 43,670,889 70,359,487 7,426,766 33,270,761 629,390 107,914,932 $ 1,277,126,391 See Notes to Financial Statements 27 CITY OF RANCHO CUCAMONGA STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2019 Program Revenues Operating Capital Charges for Contributions Contributions Expenses Services and Grants and Grants Functions/Programs Primary Government: Governmental Activities: General government $ 19,670,962 $ 8,576,190 $ 28,090 $ Public safety - police 40,689,664 1,541,582 405,593 Public safety - fire protection 37,963,605 552,486 26,732 Public safety - animal center 3,307,736 215,137 - - Community development 17,684,128 11,281,208 1,149,393 Community services 18,442,135 3,260,244 957,375 - Engineering and public works 30,443,979 8,778,764 8,394,546 17,347,427 Interest on long-term debt 232,919 - - - Total Governmental Activities 168,435,128 34,205,611 10,961,729 17,347,427 Business -Type Activities Sports Complex 2,746,411 540,972 - Municipal Utility 9,407,567 12,777,773 413,750 Fiber Optic Network 658,291 81,605 248,927 REGIS Connect 19,284 25,470 - Total Business -Type Activities 12,831,553 13,425,820 - 662,677 Total Primary Government $ 181,266,681 $ 47,631,431 $ 10,961,729 $ 18,010,104 General Revenues: Taxes: Property taxes, levied for general purpose Admissions tax Transient occupancy taxes Sales taxes Franchise taxes Motor vehicle in lieu - unrestricted Use of money and property Other Gain on sale of capital asset Special Item (Note 16) Transfers Total General Revenues, Special Item and Transfers Change in Net Position Net Position at Beginning of Year Net Position at End of Year See Notes to Financial Statements 28 Net (Expenses) Revenues and Changes in Net Position Primary Government Governmental Business -Type Activities Activities Total $ (11,066,682) (38,742,489) (37,384,387) (3,092,599) (5,253,527) (14,224,516) 4,076,758 (232,919) (105,920,361) $ (11,066,682) (38,742,489) (37,384,387) (3,092,599) (5,253,527) (14,224,516) 4,076,758 (232,919) (105,920,361) - (2,205,439) (2,205,439) - 3,783,956 3,783,956 - (327,759) (327,759) - 6,186 6,186 - 1,256,944 1,256,944 (105,920,361) 1,256,944 (104,663,417) 75,479,699 - 75,479,699 7,493 146,181 153,674 4,054,058 - 4,054,058 32,803,372 - 32,803,372 8,000,389 - 8,000,389 84,803 - 84,803 19,113,374 849,869 19,963,243 7,764,377 - 7,764,377 57,563 - 57,563 (36,406,951) - (36,406,951) (380,681) 380,681 - 110, 577, 496 1,376,731 111, 954, 227 4,657,135 2,633,675 7,290,810 1,220,326,144 49,509,437 1,269,835,581 $ 1,224,983,279 $ 52,143,112 $ 1,277,126,391 See Notes to Financial Statements 29 CITY OF RANCHO CUCAMONGA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts, net of allowances Taxes Notes Accrued interest Other loans Grants Prepaid costs Deposits Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Pension rate stabilization program 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 Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Revenue Funds Housing Development Lighting Successor General Impact Fees Districts Agency $ 94,075,823 $ 55,360,765 $ 6,665,348 $ 2,254,691 2,547,754 358,693 201,105 339,437 5,930,843 - 20,386 - - - - 162,028,943 289,886 184,802 19,731 27,626 9,911 - - - 268,441 - - - 20,000 - - - 1,416,536 12,874 - 3,308 15,698,321 - - - - - - 4,444,488 2,269,627 - - - $ 122,527,142 $ 55,917,134 $ 6,906,570 $ 169,098,493 $ 1,886,872 $ 79,352 $ 114,697 $ - 1,816,466 20,268 6,430 - - - 19,005 - 42,959 - - - - - 12,173,792 - 3,746,297 99,620 12,313,924 - - 179,751 29,165,449 179,751 29,165,449 See Notes to Financial Statements 30 CITY OF RANCHO CUCAMONGA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2019 (CONTINUED) Assets: Cash and investments Receivables: Accounts, net of allowances Taxes Notes Accrued interest Other loans Grants Prepaid costs Deposits Due from other funds Advances to other funds Restricted assets: Cash and investments with fiscal agents Pension rate stabilization program 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 Advances from other funds Total Liabilities Deferred Inflows of Resources: Unavailable revenues Total Deferred Inflows of Resources Special Other Total Governmental Governmental Fire District Funds Funds $ 71,093,904 $ 94,736,629 $ 324,187,160 1,180,028 3,039,458 7,666,475 146,362 995,561 7,093,152 - - 162,028,943 240,575 322,018 1,084,638 - 1,543,186 1,553,097 - 789,895 789,895 220,497 41,216 530,154 - 12,255 32,255 - 21,208 1,453,926 - - 15,698,321 - 705,773 5,150,261 6,379,148 - 8,648,775 $ 79,260,514 $ 102,207,199 $ 535,917,052 $ 422,753 $ 5,739,249 $ 8,242,923 1,162,632 494,569 3,500,365 - 764,859 783,864 - 20,867 63,826 - 789,073 789,073 78,104 839,313 917,417 1,553,545 - 13,727,337 3,217,034 8,647,930 28,024,805 - 429,355 29,774,555 - 429,355 29,774,555 See Notes to Financial Statements 31 CITY OF RANCHO CUCAMONGA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Housing Development Lighting Successor General Impact Fees Districts Agency Fund Balances: Nonspendable: Prepaid costs 268,441 - - - Deposits 20,000 - - - Other loans 9,911 - - - Advances to other funds 15,698,321 - - - Restricted: Community development projects - 8,364,899 - 139,933,044 Public safety - police - 513,407 - - Parks and recreation - 5,625,640 - - Engineering and public works - 39,641,853 - - Capital improvement projects 1,649,423 856,544 - - Underground utilities - - - - Landscape maintenance - - - - Library services - 683,321 - - Technology replacement 1,494,721 - - - General plan update 2,893,232 131,850 - - Contractual obligations 798,673 - - - PERS rate stabilization 3,069,627 - - - SB1186 certified access specialist services 94,659 - - - Committed: Law enforcement 9,293,760 - - - Vehicle and equipment replacement - - - - Working capital 4,414,510 - - - City facilities capital repair 29,351,840 - - - Changes in economic circumstances 18,006,176 - - - Employee leave payouts 3,447,141 - - - Self insurance 7,589,947 - - - Fire District facilities capital repair - - - - PASIS worker's compensation tail claims - - - - Assigned: Radio system acquisition 550,697 - - - City infrastructure 13,012,707 - - - Capital projects - - - - Sphere of influence issues 677,404 - - - Animal Center operations 450,354 - - - Community development projects 1,772,392 - - - Mobile home park program 173,479 - - - Fiber master plan 4,000,680 - - - Continuing operations 42,750 - - - Unassigned - - (5,587,105) - Total Fund Balances 118,780,845 55,817,514 (5,587,105) 139,933,044 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 122,527,142 $ 55,917,134 $ 6,906,570 $ 169,098,493 See Notes to Financial Statements 32 CITY OF RANCHO CUCAMONGA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2019 (CONTINUED) Fund Balances: Nonspendable: Prepaid costs Deposits Other loans Advances to other funds Restricted: Community development projects Public safety - police Parks and recreation Engineering and public works Capital improvement projects Underground utilities Landscape maintenance Library services Technology replacement General plan update Contractual obligations PERS rate stabilization SB1186 certified access specialist services Committed: Law enforcement Vehicle and equipment replacement Working capital City facilities capital repair Changes in economic circumstances Employee leave payouts Self insurance Fire District facilities capital repair PASIS worker's compensation tail claims Assigned: Radio system acquisition City infrastructure Capital projects Sphere of influence issues Animal Center operations Community development projects Mobile home park program Fiber master plan Continuing operations Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances Special o...,.,....- C..-A Other Total Governmental Governmental Fire District Funds Funds 220,497 41,216 530,154 - 12,255 32,255 - - 9,911 - - 15,698,321 - 2,573,192 150,871,135 - 724,038 1,237,445 - 2,702,443 8,328,083 - 20,771,404 60,413,257 2,449,106 28,315,687 33,270,760 - 10,962,197 10,962,197 - 19,894,912 19,894,912 - 7,132,666 7,815,987 24,710 - 1,519,431 - - 3,025,082 37,864 - 836,537 8,879,148 - 11,948,775 - - 94,659 9,293,760 3,537,872 - 3,537,872 17,588,765 - 22,003,275 - - 29,351,840 9,128,022 - 27,134,198 3,691,489 - 7,138,630 - - 7,589,947 7,132,612 - 7,132,612 554,946 - 554,946 2,005,044 - 2,555,741 - - 13,012,707 20,790,282 - 20,790,282 - - 677,404 - - 450,354 - - 1,772,392 - - 173,479 - - 4,000,680 3,123 - 45,873 - (96) (5,587,201) 76,043,480 93,129,914 478,117,692 $ 79,260,514 $ 102,207,199 $ 535,917,052 See Notes to Financial Statements 33 THIS PAGE INTENTIONALLY LEFT BLANK 34 CITY OF RANCHO CUCAMONGA RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2019 Fund balances of governmental funds $ 478,117,692 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. 781,137,817 Deferred outflows related to pension related items are not included in the governmental fund activity: Contributions made after the measurement date $ 9,854,105 Adjustment due to differences in proportions 1,246,928 Changes in assumptions 10,995,571 Differences between expected and actual experiences 2,469,486 Differences between actual contributions and the proportionate share of contributions 8,858 Net difference between projected and actual earning on plan investments 732,255 25,307,203 Deferred inflows related to pension related items are not included in the governmental fund activity: Changes in assumptions (2,407,333) Differences between expected and actual experiences (3,321,093) Adjustment due to differences in proportions (16,700) Differences between actual contributions and the proportionate share of contributions (560,980) (6,306,106) Deferred outflows related to OPEB related items are not included in the governmental fund activity: Contributions made after the measurement date 469,195 Net difference between projected and actual earning on OPEB plan investments 212,012 681,207 Advances from Successor Agency, compensated absences and claims and judgments liability are not included in the governmental fund activity: Advances from Successor Agency (3,953,624) Claims and judgments (3,093,644) Compensated absences (7,138,630) (14,185,898) Governmental funds report all pension contributions as expenditures, however, in the statement of net position, the excess of the total pension liability over the plan fiduciary net position is reported as a net pension liability. (83,184,151) Net pension assets are not available to pay for current -period expenditures and therefore are not reported in the govenmental funds. 3,277,756 Net OPEB assets are not available to pay for current -period expenditures and therefore are not reported in the govenmental funds. 21,041 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. 29,774,555 Internal service funds are used by management to charge the costs of certain activities, such as equipment management, to individual funds. The assets and liabilities of the internal service funds are added to the statement of net position. 10,342,163 Net Position of Governmental Activities $ 1,224,983,279 See Notes to Financial Statements 35 CITY OF RANCHO CUCAMONGA STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2019 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety - police Public safety - fire protection Public safety - animal center Community development Community services Engineering and public works Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Sale of capital assets Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances: Beginning of year End of Year General Special Revenue Funds Housing Development Lighting Successor Impact Fees Districts Agency $ 72,418,242 $ - $ 2,092,944 $ - 4,681,116 - - - 595,600 332,553 - - 5,272,230 380,872 - - 3,444,783 1,723,545 197,954 4,067,934 1,669,472 - - - 124,459 - - - - 13,274,348 96 - 4,493,260 14,277 722,109 340,438 92,699,162 15,725,595 3,013,103 4,408,372 15,345,248 - 1,745,656 - 39,703,690 - - - 3,230,781 - - - 5,859,067 130,327 - 376,025 4,739,454 - - - 11,721,961 1,062,288 - - 5,747,055 3,457,393 21,219 - - - 124,817 - 86,347,256 4,650,008 1,891,692 376,025 6,351,906 11,075,587 1,121,411 4,032,347 1,811,950 - 373,420 - (4,524,521) - (125,000) - 59,417 - - - (2,653,154) - 248,420 3,698,752 11,075,587 1,369,831 4,032,347 115,082,093 44,741,927 (6,956,936) 135,900,697 $ 118,780,845 $ 55,817,514 $ (5,587,105) $ 139,933,044 See Notes to Financial Statements 36 CITY OF RANCHO CUCAMONGA STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTALFUNDS YEAR ENDED JUNE 30, 2019 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Contributions Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety - police Public safety - fire protection Public safety - animal center Community development Community services Engineering and public works Capital outlay Debt service: Interest and fiscal charges Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Sale of capital assets Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances: Beginning of year End of Year Special Other Total Governmental Governmental Fire District Funds Funds $ 42,000,893 $ 16,865,454 $ 133,377,533 16,141 243,866 4,941,123 10,000 15,052,737 15,990,890 2,066 3,298,541 8,953,709 2,374,649 4,501,955 16,310,820 158,624 - 1,828,096 - 389,734 514,193 - 199,255 13,473,699 1,599,482 1,501,523 8,671,089 46,161,855 42,053,065 204,061,152 - 921,376 18,012,280 - 302,684 40,006,374 32,206,395 57,851 32,264,246 - - 3,230,781 - 11,157,260 17,522,679 - 9,129,952 13,869,406 - 7,688,665 20,472,914 2,541,598 7,005,341 18,772,606 77,830 - 202,647 34,825,823 36,263,129 164,353,933 11,336,032 5,789,936 39,707,219 3,230 615,878 2,804,478 (158,630) (475,368) (5,283,519) 1,321 - 60,738 (154,079) 140,510 (2,418,303) 11,181,953 5,930,446 37,288,916 64,861,527 87,199,468 440,828,776 $ 76,043,480 $ 93,129,914 $ 478,117,692 See Notes to Financial Statements 37 THIS PAGE INTENTIONALLY LEFT BLANK 38 CITY OF RANCHO CUCAMONGA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2019 Net change in fund balances - total governmental funds 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 are allocated over their estimated useful lives as depreciation expense. Capital outlay Depreciation Contributed capital assets Special item (Note 16) Loss on disposal of capital assets The issuance of long-term debt provides current financial resources to governmental funds, while repayment of principal of long-term debt consumes current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Change in claims and judgments payable 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. OPEB 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. Pension obligation expenses are expenditures in the governmental funds, but reduce the Net Pension Liability in the statement of net position. Revenues reported as unavailable revenue in the governmental funds are recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. Internal service funds are used by management to charge the costs of certain activities, such as equipment management, to individual funds. The assets and liabilities of the internal service funds are added to the statement of net position. Change in Net Position of Governmental Activities $ 18,772,606 (18,065,639) 3,946,787 (36,406,951) (777,927) 37,288,916 (32,531,124) 425,229 359,241 (60,921) (3,839,798) 2,525,340 490,252 $ 4,657,135 See Notes to Financial Statements 39 CITY OF RANCHO CUCAMONGA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2019 Business -Type Activities - Enterprise Funds Other Enterprise Major Funds Funds Sports Municipal Fiber Optic REGIS Complex Utility Network Connect Assets: Current: Cash and investments $ 73,385 $ 22,266,551 $ - $ Receivables: Accounts 56,582 1,488,324 10,489 11,520 Notes and loans - 105,000 - - Accrued interest 78,776 Prepaid costs - Due from other funds - 9,151 Net pension asset 122,835 68,876 - Restricted: Cash with fiscal agent - - 12,620,653 - Total Current Assets 252,802 24,016,678 12,631,142 11,520 Noncurrent: Capital assets - net of accumulated depreciation 13,837,595 14,887,273 6,716,948 - Total Noncurrent Assets 13,837,595 14,887,273 6,716,948 - Total Assets 14,090,397 38,903,951 19,348,090 11,520 Deferred Outflows of Resources: Deferred pension related items 556,807 241,272 - - Total Deferred Outflows of Resources 556,807 241,272 - - Total Assets and Deferred Outflows of Resources $ 14,647,204 $ 39,145,223 $ 19,348,090 $ 11,520 Liabilities, Deferred Inflows of Resources and Net Position: Liabilities: Current: Accounts payable $ 65,616 $ 1,100,278 $ 247,747 $ Accrued liabilities 64,290 26,303 - - Accrued interest - - 203,312 - Unearned revenues 3,626 - - - Deposits payable - 515,790 - - Due to other funds - 516,206 29,454 Capital leases - - Revenue bonds - - 310,000 - Total Current Liabilities 133,532 1,642,371 1,277,265 29,454 Noncurrent: Advances from other funds 1,970,984 - - - Capital leases - - - Revenue bonds - - 13,245,938 Net pension liability 1,726,240 697,908 - - Total Noncurrent Liabilities 3,697,224 697,908 13,245,938 - Total Liabilities 3,830,756 2,340,279 14,523,203 29,454 Deferred Inflows of Resources: Deferred pension related items 193,840 91,393 - - Total Deferred Inflows of Resources 193,840 91,393 - Net Position: Net investment in capital assets 13,837,595 14,887,273 5,781,663 Restricted for public benefit - Municipal Utility - 629,390 - - Unrestricted (3,214,987) 21,196,888 (956,776) (17,934) Total Net Position 10,622,608 36,713,551 4,824,887 (17,934) Total Liabilities, Deferred Inflows of Resources and Net Position $ 14,647,204 $ 39,145,223 $ 19,348,090 $ 11,520 See Notes to Financial Statements 40 CITY OF RANCHO CUCAMONGA STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2019 Assets: Current: Cash and investments Receivables: Accounts Notes and loans Accrued interest Prepaid costs Due from other funds Net pension asset Restricted: Cash with fiscal agent Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Deferred Outflows of Resources: Deferred pension related items Total Deferred Outflows of Resources Total Assets and Deferred Outflows of Resources Liabilities, Deferred Inflows of Resources and Net Position: Liabilities: Current: Accounts payable Accrued liabilities Accrued interest Unearned revenues Deposits payable Due to other funds Capital leases Revenue bonds Total Current Liabilities Noncurrent: Advances from other funds Capital leases Revenue bonds Net pension liability Total Noncurrent Liabilities Total Liabilities Deferred Inflows of Resources: Deferred pension related items Total Deferred Inflows of Resources Net Position: Net investment in capital assets Restricted for public benefit - Municipal Utility Unrestricted Total Net Position Total Liabilities, Deferred Inflows of Resources and Net Position Governmental Activities - Internal Total Service Funds $ 22,339,936 $ 4,258,175 1,566,915 29,020 105,000 - 78,776 10,609 - 648,371 9,151 - 191,711 12,620,653 - 36,912,142 4,946,175 35,441,816 7,723,528 35,441,816 7,723,528 72, 353,958 12,669,703 798,079 798,079 $ 73,152,037 $ 12,669,703 $ 1,413,641 $ 378,095 90,593 - 203,312 30,272 3,626 - 515, 790 545,660 - - 453,174 310,000 3,082,622 861,541 1,970,984 - - 1,465,999 13,245,938 - 2,424,148 - 17,641,070 1,465,999 20,723,692 2,327,540 285,233 - 285,233 - 34,506,531 5,804,355 629,390 - 17,007,191 4,537,808 52,143,112 10,342,163 $ 73,152,037 $ 12,669,703 See Notes to Financial Statements 41 CITY OF RANCHO CUCAMONGA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2019 Business -Type Activities - Enterprise Funds Other Enterprise Major Funds Funds Sports Municipal Fiber Optic REGIS Complex Utility Network Connect Operating Revenues: Sales and service charges $ 175,582 $ 12,776,007 $ 76,655 $ 25,470 Interdepartmental charges - - - - Rent 286,715 - - - Miscellaneous 78,675 1,766 4,950 - Total Operating Revenues 540,972 12,777,773 81,605 25,470 Operating Expenses: Salaries and benefits 1,448,845 595,180 - - Maintenance and operations 452,219 6,657,693 24,782 19,284 Contractual services 264,815 1,175,612 272,439 - Depreciation expense 560,032 979,082 157,758 - Total Operating Expenses 2,725,911 9,407,567 454,979 19,284 Operating Income (Loss) (2,184,939) 3,370,206 (373,374) 6,186 Nonoperating Revenues (Expenses): Admissions tax 146,181 - - - Interest revenue 1,651 784,284 62,829 1,105 Interest expense (20,500) - (203,312) - Total Nonoperating Revenues (Expenses) 127,332 784,284 (140,483) 1,105 Income (Loss) Before Contributions and Transfers (2,057,607) 4,154,490 (513,857) 7,291 Capital contributions - 413,750 248,927 - Transfers in 1,770,941 - - - Transfers out - (1,390,260) - - Changes in Net Position (286,666) 3,177,980 (264,930) 7,291 Net Position: Beginning of Year 10,909,274 33,535,571 5,089,817 (25,225) End of Fiscal Year $ 10,622,608 $ 36,713,551 $ 4,824,887 $ (17,934) See Notes to Financial Statements 42 CITY OF RANCHO CUCAMONGA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2019 Governmental Activities - Internal Total Service Funds Operating Revenues: Sales and service charges $ 13,053,714 $ - Interdepartmental charges - 721,550 Rent 286,715 - Miscellaneous 85,391 93,772 Total Operating Revenues Operating Expenses: Salaries and benefits Maintenance and operations Contractual services Depreciation expense Total Operating Expenses Operating Income (Loss) Nonoperating Revenues (Expenses): Admissions tax Interest revenue Interest expense Total Nonoperating Revenues(Expenses) Income (Loss) Before Contributions and Transfers Capital contributions Transfers in Transfers out Changes in Net Position Net Position: Beginning of Year End of Fiscal Year 13,425,820 815,322 2,044,025 - 7,153,978 647,428 1,712,866 397,569 1,696,872 1,450,913 12,607,741 2,495,910 818,079 (1,680,588) 146,181 - 849,869 102,752 (223,812) (30,272) 772,238 72,480 1,590,317 (1,608,108) 662,677 - 1,770,941 2,098,360 (1,390,260) - 2,633,675 490,252 49,509,437 9,851,911 $ 52,143,112 $ 10,342,163 See Notes to Financial Statements 43 CITY OF RANCHO CUCAMONGA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2019 Business -Type Activities - Enterprise Funds Other Enterprise Major Funds Funds Sports Municipal Fiber Optic REGIS Complex Utility Network Connect Cash Flows from Operating Activities: Cash received from customers and users $ 341,869 $ 13,081,590 $ 66,166 $ 18,621 Cash received from interfund service provided - - - - Cash paid to suppliers for goods and services (700,022) (7,581,017) (113,593) (19,726) Cash paid to employees for services (1,448,608) (593,490) - - Cash received from others 78,675 1,766 4,950 - Net Cash Provided (Used) by Operating Activities (1,728,086) 4,908,849 (42,477) (1,105) Cash Flows from Non -Capital Financing Activities: Cash transfers in 1,770,941 - - - Cash transfers out - (1,390,260) - - Cash received from other funds - (9,151) 171,354 - Admissions tax received 146,181 - - - Net Cash Provided (Used) by Non -Capital Financing Activities 1,917,122 (1,399,411) 171,354 - Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets - (1,669,881) (1,126,991) - Proceed from lease revenue bonds - - 13,555,938 - Principal paid on capital debt - - - - Interest paid on interfund financing (20,500) - - - Advance from other funds (197,672) - - Net Cash Provided (Used) by Capital and Related Financing Activities (218,172) (1,669,881) 12,428,947 - Cash Flows from Investing Activities: Interest received 1,651 767,211 62,829 1,105 Net Cash Provided (Used) by Investing Activities 1,651 767,211 62,829 1,105 Net Increase (Decrease) in Cash and Cash Equivalents (27,485) 2,606,768 12,620,653 - Cash and Cash Equivalents at Beginning of Year 100,870 19,659,783 - - Cash and Cash Equivalents at End of Year $ 73,385 $ 22,266,551 $ 12,620,653 $ - See Notes to Financial Statements 44 CITY OF RANCHO CUCAMONGA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2019 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 deferred outflows from pensions (Increase) decrease in notes and loans receivable (Increase) decrease in prepaid expense (Increase) decrease in net pension asset Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in unearned revenues Increase (decrease) in deposits payable Increase (decrease) in due to other funds Increase (decrease) in net pension liability Increase (decrease) in deferred inflows from pensions Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Donated infrastructure Capital leases Acquisition of capital assets in accounts payable Business-TVDe Activities - Enterprise Funds Other Enterprise Major Funds Funds Sports Municipal Fiber Optic REGIS Complex Utility Network Connect $ (2,184,939) $ 3,370,206 $ (373,374) $ 6,186 560,032 979,082 157,758 - (5,428) 6,591 (10,489) (6,849) 110,800 38,084 - 232,480 - - - 7,219 - - (107,848) (60,392) - - 12,107 242,795 183,628 - 4,905 2,274 - - (115,000) - - - - 66,512 - - - - - (442) (30,746) (1,002) - - 28,031 25,000 - - 456,853 1,538,643 330,897 (7,291) $ (1,728,086) $ 4,908,849 $ (42,477) $ (1,105) $ - $ 413,750 $ 248,927 $ - See Notes to Financial Statements 45 CITY OF RANCHO CUCAMONGA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2019 Cash Flows from Operating Activities: Cash received from customers and users Cash received from interfund service provided Cash paid to suppliers for goods and services Cash paid to employees for services Cash received from others Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers in Cash transfers out Cash received from other funds Admissions tax received Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Proceed from lease revenue bonds Principal paid on capital debt Interest paid on interfund financing 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 Governmental Activities - Internal Total Service Funds $ 13,508,246 $ - - 721,650 (8,414,358) (873,289) (2,042,098) - 85,391 93,772 3,137,181 (57,867) 1,770,941 2,098,360 (1,390,260) - 162,203 - 146,181 - 689,065 2,098,360 (2,796,872) (641,902) 13,555,938 - (527,330) (20,500) - (197,672) - 10,540,894 (1,169,232) 832,796 104,400 832,796 104,400 15,199,936 975,661 19,760,653 3,282,514 $ 34,960,589 $ 4,258,175 See Notes to Financial Statements 46 CITY OF RANCHO CUCAMONGA STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2019 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 deferred outflows from pensions (Increase) decrease in notes and loans receivable (Increase) decrease in prepaid expense (Increase) decrease in net pension asset Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in unearned revenues Increase (decrease) in deposits payable Increase (decrease) in due to other funds Increase (decrease) in net pension liability Increase (decrease) in deferred inflows from pensions Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Donated infrastructure Capital leases Acquisition of capital assets in accounts payable Governmental Activities - Internal Tntal SarvirP Fimck $ 818,079 $ (1,680,588) 1,696,872 1,450,913 (16,175) 100 148,884 - 232,480 - 7,219 140,685 (168,240) - 438,530 31,023 7,179 - (115,000) - 66,512 - (442) - (31,748) - 53,031 - 2,319,102 1,622,721 $ 3,137,181 $ (57,867) $ 662,677 $ - - 2,446,503 165,975 See Notes to Financial Statements 47 CITY OF RANCHO CUCAMONGA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Developer loans Prepaid bond insurance Advances to City Restricted assets: Cash and investments with fiscal agents Total Assets Deferred Outflows of Resources: Deferred charge on refunding Total Deferred Outflows of Resources Liabilities: Accounts payable Accrued liabilities Accrued interest Deposits payable Payable to trustee Due to external parties/other agencies Long-term liabilities: Due in one year Due in more than one year Total Liabilities Deferred Inflows of Resources: Deferred charges on refunding Total Deferred Inflows or Resources Net Position: Held in trust for other purposes Total Net Position Private - Purpose Trust Fund Successor Agency Agency of the $ 23,359,535 $ 22,127,391 229,993 - 50,463 33,004 - - 10,827,671 - 1,476,095 - 3,953,624 4,050,810 8,580 $ 27,723,805 38,393,361 $ 161,838 33,224 8,660,253 18,830,706 37,784 $ 27,723,805 2,405,978 4,583,935 12,529,030 298,891,286 1,793,187 1,793,187 (259,885,134) $ (259,885,134) See Notes to Financial Statements 48 CITY OF RANCHO CUCAMONGA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS YEAR ENDED JUNE 30, 2019 Additions: Taxes Interest and change in fair value of investments Other revenue Total Additions Deductions: Contractual services Interest expense Contributions to City Total Deductions Changes in Net Position Net Position: Beginning of year Net Position - End of the Year Private - Purpose Trust Fund Successor Agency of the Former RDA $ 26,431,518 53,654 141,527 26,626,699 1,085,007 12,429,234 848,640 14,362,881 12,263,818 (272,148,952) $ (259,885,134) See Notes to Financial Statements 49 THIS PAGE INTENTIONALLY LEFT BLANK 50 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2019 SIGNIFICANT ACCOUNTING POLICIES Note 1: Organization and Summary of Significant Accounting Policies a. Description of Entity The City of Rancho Cucamonga was incorporated on November 30, 1977, under the laws of the State of California and enjoys all the rights and privileges applicable to a General Law City. The City operates under a council-manager form of government and provides its citizens with a full range of municipal services. It is governed by an elected five -member board. As required by accounting principles generally accepted in the United States of America, these financial statements present the City of Rancho Cucamonga (the City) and its component units, entities for which the City is considered financially accountable. The inclusion of an organization within the scope of the reporting entity of the City of Rancho Cucamonga is based on the provisions of GASB Statement No. 14 and amended with GASB Statement No. 61. The blended component units discussed below, although legally separate entities, are in substance part of the government operation and so data from these component units has been combined herein. The following criteria were used in the determination of the blended component units: 1. The members of the City Council also act as the governing body of the Rancho Cucamonga Public Improvement Corporation (the Improvement Corporation), the Rancho Cucamonga Fire Protection District (the Fire District), the Rancho Cucamonga Library (the Library), and the Rancho Cucamonga Public Financing Authority (the Financing Authority). 2. The Improvement Corporation, the Fire District, the Library, and the Financing Authority are managed by employees of the City. A portion of the City's general overhead costs is allocated to the Fire District and the Library. 3. The City, the Improvement Corporation, the Fire District, the Library, and the Financing Authority are financially interdependent. They provide financial benefit/burden to the City. Blended Component Units The Improvement Corporation was incorporated on November 14, 1988, under the Non -Profit Public Benefit Corporation Law of the State of California. The Improvement Corporation was established for charitable purposes including rendering financial assistance to the City by financing, acquiring, constructing, improving and leasing public improvements for the benefit of residents of the City and the surrounding area. Separate financial statements are not available for the Improvement Corporation. The Fire District (formerly, Foothill Fire Protection District) was a special district formed by the County of San Bernardino for the purpose of fire suppression within its boundaries. Effective July 1, 1989, operations of this district were taken over by the City. The Fire District still operates as a separate special district; however, now it is under the control of the City instead of the County of San Bernardino. Separate financial statements are available for the Fire District. 51 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The Library was part of the San Bernardino County Library System in which the City participated. Effective July 1, 1994, and pursuant to California Code Section 19104, the City withdrew from the County Library System. As of this date, the Library operates as a separate entity under the control of the City. Separate financial statements are not available for the Library. The Financing Authority was established on April 21, 1999, pursuant to Article I (commencing with Section 6500) of Chapter 5 of Division 7 of Title I of the California Government Code. Its purpose is to facilitate the financing and the refinancing of construction, expansion, upgrading and improvement of the public capital facilities necessary to support the rehabilitation and construction of residential and economic development within the City. Separate financial statements are not available for the Financing Authority. b. 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. The effect of interfund activity has been removed from these statements, except for the interfund services provided and used. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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 and major individual enterprise funds are reported as separate columns in the fund financial statements. c. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the 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. 52 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, except for sales tax and grant revenue where the government considers revenue to be available if collected within 180 of the end of the current fiscal period. The primary revenue sources, which have been susceptible to accrual by the City, are real and personal property tax, other local taxes, franchise fees, forfeitures and penalties, motor license fees, rents and concessions, interest revenue, and state and Federal grants and subventions. Expenditures generally are recorded when a 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. The City's fiduciary funds consist of agency funds and a private purpose trust fund. Agency funds are used to account for situations where the government's role is purely custodial. All assets reported in an agency fund are offset by a liability to the party on whose behalf they are held. Agency funds have no measurement focus. Private purpose trust funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The City reports the following major governmental funds: • The General Fund is the general operating fund of the City. All general tax receipts and fee revenue not allocated by law, Council policy or contractual agreement to other funds are accounted for in the General Fund. General Fund expenditures include operations traditionally associated with activities which are not required to be accounted for or paid by another fund. • The Development Impact Fees Fund accounts for the receipts from development impact fees which are used to defray all or a portion of the cost of public facilities as a result of development. • The Lighting Districts Fund accounts for the costs associated with providing street lights throughout the City. Revenues are provided by special assessments levied against the benefiting property owners. • The Housing Successor Agency Fund accounts for the assets of the former Redevelopment Agency's Low and Moderate Income Housing Fund. The source of revenue in the fund is primarily from interest received from the notes and loans receivable. • The Fire District Fund accounts for the revenue and disbursement of funds received by the Rancho Cucamonga Fire Protection District in the course of that agency's fire protection services. The source of revenue in the fund is primarily from property taxes. 53 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The City reports the following major proprietary funds: • The Sports Complex Fund accounts for personnel and operating costs directly associated with the operation of the City's baseball facility, which is the home of the Rancho Cucamonga Quakes. • The Municipal Utility Fund accounts for the costs of labor and materials used in the operation, maintenance, construction and consumption of electric services to certain residential, commercial, and industrial customers within the City. • The Fiber Optic Fund accounts receipts from user charges and costs associated with the City's existing utility, information technology and traffic fiber conduits and leases for conduit and fiber access. Additionally, the City reports the following fund types: • Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes. • Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by the proprietary funds). • Internal service funds account for the financial transactions related to repair, replacement and maintenance of City -owned vehicles and equipment and the City's general information systems and telecommunications hardware and software. • Agency funds are custodial in nature and do not involve the measurement of results of operations. The City's agency funds account for deposits held by the City in its fiduciary capacity and assessments received for various purposes which are restricted for payment of principal, interest and penalties on special obligation bonds. • Private -purpose trust funds are used to account for the assets and liabilities of the former Redevelopment Agency and the allocated revenue to pay estimated installment payments of enforceable obligations until the obligations of the former Redevelopment Agency are paid in full and assets have been liquidated. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the government's proprietary funds functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 54 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses. d. Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position or Equity Cash and Investments All cash and investments, except those that are held by fiscal agents or through a trust, are held in a City pool. These pooled funds are available upon demand and therefore are considered cash and cash equivalents for purposes of the statement of cash flows. Investments held by fiscal agents with an original maturity of three months or less are also considered cash equivalents and are shown as restricted assets for financial statement presentation purposes. Investments for the City, as well as for its component units, are reported at fair value. The City's policy is generally to hold investments until maturity. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non -current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." All trade and property tax receivables are shown net of allowance for uncollectibles. Prepaid Costs Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both 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. Restricted Assets Certain proceeds of debt issues, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Investments in the PARS Public Agencies Post -Employment Benefits Trust are held for the purpose of rate stabilization of future pension obligations. The trust is a Section 115 irrevocable trust. The investments are reported at fair value. 55 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Capital Assets Capital assets, which include land, building improvements, improvements other than buildings, computer equipment and software, equipment and vehicles, furniture and fixtures, infrastructure (e.g., roads, bridges, sidewalks and similar items) and intangible assets, are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost when purchased or constructed. Donated capital assets are recorded at the estimated price that would be paid to acquire the asset at the date of acquisition. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets are depreciated using the straight-line method over the following estimated useful lives: Assets Years Building improvements 10-50 Improvements other than buildings 10-40 Computer equipment and software 3-15 Equipment and vehicles 3-20 Furniture and fixtures 3-20 Infrastructure 10-75 Intangible assets 10-15 Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The government reports deferred outflows of resources related to pensions arising from certain changes in the net pension liability, net pension asset, and net OPEB liability. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has several items that qualify for reporting in this category: 56 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) 1. Unavailable revenue is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues for revenues that are measurable but not collected within 60 days of the end of the current fiscal period or 180 days for sales tax and grant revenues. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 2. Pension and OPEB related deferred inflows are reported only on the Statement of Net Position. The government reports deferred inflows of resources related to pensions arising from certain changes in the net pension liability, net pension asset, or net OPEB liability. Deferred inflows and outflows of resources related to changes in the net pension liability, net pension asset, and net OPEB liability are recognized systematically over time. Amounts are first recognized in the year the change occurs. The remaining amounts are to be recognized in future periods. The recognition period differs depending on the source of the change, and they currently are amortized over 5 years or the average remaining service life time. Pension For purposes of measuring the net pension liability, net pension asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans' fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. GASB Statement No. 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used. Valuation Date June 30, 2017 Measurement Date June 30, 2018 Measurement Period July 1, 2017 to June 30, 2018 PARS Retirement Enhancement Plan For purposes of measuring the net pension liability, net pension asset, deferred outflows of resources and deferred inflows of resources related to the retirement enhancement plan, and retirement enhancement plan expense, information about the fiduciary net position of the plan and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as they are reported by the California Defined Benefit Pension Plan Program of the Public Agency Retirement System Trust. Contributions are recognized in the period in which the contributions are due and there exists a formal commitment to provide the contributions. Liabilities related to investment and administrative expenses are recognized when incurred. Those related to obligations for employee benefits and refunds are recognized when due and payable in accordance with the terms of the plan. 57 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) GASB Statement No. 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used. Valuation Date June 30, 2018 Measurement Date June 30, 2018 Measurement Period July 1, 2017 to June 30, 2018 Other Post -Employment Benefits (OPEB) For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the OPEB Plan, the assets of which are held by the California Employers' Retiree Benefit Trust (CERBT), an agent multiple -employer defined benefit healthcare plan administered by the California Public Employees' Retirement System (CalPERS), and additions to/deductions from the OPEB plan's fiduciary net position have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. GASB Statement No. 75 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date Measurement Date Measurement Period Accrued Employee Benefits June 30, 2017 June 30, 2018 July 1, 2017 to June 30, 2018 The City's policy permits employees to accumulate earned but unused vacation and sick pay benefits. The total amount of liability for unused vacation and sick pay benefits is accrued when incurred in the government -wide financial statements. The City utilizes the General Fund and the Fire District Special Revenue Fund in the governmental fund financial statements to account for the short-term portion of its liability. The short-term portion is the unused reimbursable leave still outstanding following an employee's resignation or retirement. Vacation pay is payable to employees at the time a vacation is taken or upon termination of employment. Fire District employees cannot accrue more than one and one-half times their regular annual entitlement. Sick leave is payable when an employee is unable to work because of illness. For City employees, those who terminate their employment after five years of continuous service and have at least 50% of five years sick leave accrued on the books upon termination may be paid for 120 hours of the accrued leave. 58 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) For Fire District employees, sick leave may be accumulated indefinitely or an employee with ten or more years of service is eligible to convert unused sick leave to vacation in accordance with the following and with any remainder of hours to still remain unused sick time: Employee Type Accumulated Sick Leave Balance Vacation Prior Calendar Year Conversion Rate shift 108 - 144 hours one-half shift 72 - 108 hours one-fourth 40-hour 90 - 120 hours one-half 40-hour 60 - 90 hours one-fourth Upon service retirement of a public safety employee, the option exists to sell back up to one-half of total accumulated sick leave or have the leave credited toward service in accordance with the Public Retirement Law. All unused sick leave is forfeited upon termination, other than for normal retirement. Long -Term Obligations In the government -wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance cost, whether or not withheld from the actual debt proceeds received, are reported as debt service expenses. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Balance Fund balance is essentially the difference between the assets, liabilities, and deferred inflows reported in a governmental fund. There are five separate components of fund balance, each of which identifies the extent to which the City is bound to honor constraints on the specific purposes for which amounts can be spent. • Non -spendable fund balance (inherently non -spendable) • Restricted fund balance (externally enforceable limitations on use) • Committed fund balance (self-imposed limitations on use) • Assigned fund balance (limitation resulting from intended use) • Unassigned fund balance (residual net resources) 59 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The General Fund is the only fund that can report a positive unassigned fund balance amount. In governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed or assigned to these purposes, it may be necessary to report a negative unassigned fund balance in that fund. The City Council, as the City's highest level of decision -making authority, may commit fund balance for specific purposes pursuant to constraints imposed by the adoption of a resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use through the same type of formal action taken to establish the commitment. City Council action to commit fund balance needs to occur within the fiscal reporting period; however, the amount can be determined subsequently. Fund balance commitments are as follows: Chanaes in Economic Circumstances The City's General Fund balance committed for changes in economic circumstances is established at a goal of a nine month reserve, or 75% of the City General Fund operating budget for the upcoming fiscal year. The Fire District's fund balance committed for changes in economic circumstances is established at a goal of a nine month reserve, or 75% of the Fire District's operating budget for the upcoming fiscal year. The specific uses of this commitment include: 1) the declaration of a state or federal state of emergency or a local emergency as defined in Rancho Cucamonga Municipal Code Section 2.36.020; or 2) a change in economic circumstances in a given fiscal year that results in revenues to the City/Fire District being insufficient to cover expenditures for one or more fiscal years. The City Council/Fire Board may, by the affirming vote of four members, change the amount of this commitment and/or the specific uses of these monies. City Facilities Capital Repair The City's General Fund balance committed for City facilities capital repair and property acquisition is established at a minimum goal of 50% of capital assets value comprised of construction in progress (excluding infrastructure), building improvements, and improvements other than buildings for governmental activities. Fire District Facilities Capital Repair The Fire District's fund balance committed for Fire District facilities capital repair to a minimum goal of 50% of capital assets value comprised of construction in progress (excluding infrastructure), building improvements, and improvements other than building for public safety -fire activities. Workinq Capital The City's General Fund balance committed for Working Capital is established at a minimum goal of 5% of the City's General Fund operating budget for the upcoming fiscal year. The Fire District's fund balance committed for Working Capital is established at a minimum goal of 50% of the District's operating budget for the upcoming fiscal year. .( CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Self -Insurance The City's General Fund balance and the Fire District's fund balance committed for payment of Worker's Compensation, General Liability, and Employment Practices Liability claims is established at a minimum goal of eight times the City's and the District's total yearly SIRs for all types of insurance coverage. PASIS Worker's Compensation Tail Claims The Fire District's fund balance committed for payment of outstanding Worker's Compensation claims remaining after the District's withdrawal from PASIS is established at a goal equal to the most recent fiscal year end Claims Cost Detail Report from the District's third -party administrator plus 15%. Employee Leave Payouts The City's General Fund balance and the Fire District's fund balance committed for employee leave payouts is valued in accordance with the City's labor contracts as of the last day of the fiscal year. Vehicle and Equipment Replacement The Fire District's fund balance committed for the replacement of fire safety vehicles and equipment as determined based on the District's replacement criteria is established at a minimum goal of 50% of District vehicle and equipment replacement value. Law Enforcement The City's General Fund balance committed for public safety purposes, including operations, equipment, capital outlay, personnel, and booking fees. The funding goal for this reserve is the equivalent of 100% of the most recently approved Schedule A from the San Bernardino County Sheriff's Department. Fund Balance Flow Assumptions Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. The City considers restricted fund balance to have been spent first when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. Similarly, when an expenditure is incurred for purposes for which amounts in any of the unrestricted classifications of fund balance could be used, the City considers committed amounts to be reduced first, followed by assigned amounts and then unassigned amounts. 61 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Net Position In the governmental -wide financial statements and proprietary fund financial statements, net position is classified as follows: Net Investment in Capital Assets — This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt attributed to the acquisition, construction, or improvement of the assets. Restricted Net Position — This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments. Unrestricted Net Position — This amount is all net position that does not meet the definition of "net investment in capital assets" or "restricted net position." Net Position Flow Assumption Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted — net position to have been depleted before unrestricted — net position is applied. Property Tax Property tax revenue is recognized on the modified accrual basis, that is, in the fiscal year for which the taxes have been levied providing they become available. Available means then due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. The County of San Bernardino collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in January proceeding the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent, if unpaid, on August 31. Functional Classifications Expenditures of the governmental funds are classified by function. Functional classifications are defined as follows: • General Government includes legislative activities, City Clerk, City Attorney, City Manager as well as management or supportive services across more than one functional area. • Public Safety - Police includes those activities which involve police protection. 62 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 1: Organization and Summary of Significant Accounting Policies (Continued) • Public Safety - Fire Protection includes activities of the Fire District which involve the protection of people and property from fire as well as emergency preparedness. • Public Safety - Animal Center includes those activities which involve animal care and services. • Community Development includes those activities which involve planning and economic development, as well as building and safety. • Community Services includes activities which provide recreation, cultural and educational services. • Engineering and Public Works includes all maintenance, engineering and capital improvements which relate to streets, parks, flood control and other public facilities. II. STEWARDSHIP Note 2: Stewardship, Compliance and Accountability a. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in progress at year-end are completed. They do not constitute expenditures or estimated liabilities. The following funds have encumbrances at June 30, 2019: General Fund $ 2,490,846 Development Impact Fees 809,518 Lighting Districts 251,238 Fire District 2,490,093 Other Governmental Funds 7,201,002 b. Deficit Fund Balances or Net Position The Lighting Districts Fund has a deficit fund balance of $5,587,105 at June 30, 2019. The deficit fund balance will be eliminated by the repayment of the interfund advance from the General Fund described in Note 6. The Energy Efficient & Conservation Block Grant nonmajor special revenue fund has a fund balance deficit of $96. This deficit will be eliminated with a final accounting and close- out of the fund. 63 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 III. DETAILED NOTES ON ALL FUNDS Note 3: Cash and Investments As of June 30, 2019, cash and investments were reported in the accompanying financial statements as follows: Governmental activities $ 342,244,371 Business -type activities 34,960,589 Fiduciary funds 49,546,316 Total Cash and Investments $ 426,751,276 The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under provisions of bond indentures or funds held in a trust. Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on average daily cash balances. Interest Income from cash and investments with fiscal agents and through a trust are credited directly to the related fund. Deposits At June 30, 2019, the carrying amount of the City's deposits was $34,374,515 and the bank balance was $36,004,009. The $1,629,494 difference represents outstanding checks and other reconciling items. The California Government Code requires California banks and savings and loan associations to secure a City's deposits by pledging government securities with a value of 110% of a City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency. Investments Under provision of the City's investment policy, and in accordance with the California Government Code, the following investments are authorized: • U.S. Government Agency Securities • Municipals (Warrants, Notes and Bonds) • Certificates of Deposit (or Time Deposits) • Negotiable Certificates of Deposit • FDIC Insured Certificates of Deposits • Banker's Acceptances 64 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 3: Cash and Investments (Continued) • Commercial Paper • Local Agency Investment Fund (State Pool) • Joint Powers Authority (JPA) Investment Pool (short-term) • Deposit of Funds • Repurchase and Investment Agreements • Medium Term Corporate Notes • Supranational Securities Investments Authorized by Debt Agreements The above investments do not address investment of debt proceeds held by a bond trustee. Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. Investments in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer's Office audits the fund annually. The fair value of the position in the investment pool is the same as the value of the pool shares. Credit Risk As of June 30, 2019, The City's investments in municipal bonds and corporate notes were rated "Aa" by Moody's. As of June 30, 2019, the City invested in Federal Farm Credit Bank, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, and Federal National Mortgage Association which were all rated "Aaa" by Moody's. All securities were investment grade and were legal under State and City law. As of June 30, 2019, the City's investments in external investment pools and money market mutual funds are unrated. Custodial Credit Risk The 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 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 to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. As of June 30, 2019, the City's deposits (bank balances) were insured by the FDIC up to $250,000 and the remaining balances were collateralized under California Law. 65 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 3: Cash and Investments (Continued) Concentration of Credit Risk The City is in compliance with restrictions imposed by its investment policy, which limits certain types of investments. As of June 30, 2019, in accordance with GASB Statement No. 40, if the City has invested more than 5% of its total investments in any one issuer, it is exposed to credit risk. The following investments are considered exposed to credit risk: Federal Farm Credit Bank 14.08% Federal Home Loan Bank 13.10% Federal Home Loan Mortgage Corp. 12.79% Federal National Mortgage Association 11.91 % Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this. Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy establishes a maximum maturity of 180 days for Banker's Acceptances, 270 days for Commercial Paper, one year for Repurchase Agreements and five years for all other individual investments. The only exception to these maturity limits shall be the investment of the gross proceeds of tax-exempt bonds. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk. As of June 30, 2019, the City had the following investments and original maturities: Investments: Local Agency Investment Fund Federal Governmental Agencies Federal Farm Credit Bank Federal Home Loan Bank Federal Home Loan Mortgage Corp. Federal National Mortgage Assoc. Municipal Bonds Corporate Bonds Certificate of Deposit US Treasury Supranational Restricted Investments: Mutual Fund Investments with Fiscal Agents: Money Market Funds Investment Maturities (in Years) 6 months 6 months to 1 year to 3 Years to or less 1 year 3 years 5 years Fair Value $ 83,569,602 $ - $ - $ - $ 83,569,602 12,470,380 11,933,766 27,134,601 8,532,325 60,071,072 5,991,363 5,460,802 37,421,128 7,047,734 55,921,027 5,480,646 14,935,067 30,138,150 4,018,560 54,572,423 27,428,034 3,973,364 16,909,016 2,507,273 50,817,686 379,696 4,994,800 - - 5,374,496 - 8,480,334 5,052,500 10,171,917 23,704,751 245,000 490,000 490,000 - 1,225,000 - - 17,580,821 - 17,580,821 - 9,060,804 - 9,060,804 8,648,775 8,648,775 21,830,304 - - - 21,830,304 $ 166,043,800 $ 50,268,133 $ 143,787,020 $ 32,277,809 $ 392,376,761 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 3: Cash and Investments (Continued) Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. 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. The City has the following recurring fair value measurements as of June 30, 2019: Level Investments by fair value level Totals Uncategorized 1 2 3 Local Agency Investment Fund $ 83,569,602 $ 83,569,602 $ - $ $ Federal Governmental Agencies Federal Farm Credit Bank 60,071,072 - 60,071,072 Federal Home Loan Bank 55,921,027 55,921,027 Federal Home Loan Mortgage Corporation 54,572,422 - 54,572,422 Federal National Mortgage Association 50,817,686 50,817,686 - Municipal Bonds 5,374,496 5,374,496 - Corporate Bonds 23,704,752 - 23,704,752 Certificate of Deposit 1,225,000 1,225,000 - US Treasury 17,580,821 17,580,821 - Supranational 9,060,804 - 9,060,804 Cash with Fiscal Agents Money Market Funds 21,830,304 21,830,304 Restricted Investments Mutual Fund 8,648,775 - - 8,648,775 Totals $ 392,376,761 $ 105,399,906 $ 190,990,102 $ 95,986,753 $ Deposits and securities classified in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities. Local Agency Investment Funds are valued using specified fair market value factors. Federal Agency Securities classified in Level 2 of the fair value hierarchy are valued using institutional bond quotes. Note 4: Notes and Loans Receivables Notes and loans receivables consist of the following at June 30, 2019: Governmental activities In January 1997, the former Rancho Cucamonga Redevelopment Agency (the Agency) entered into an agreement to loan Villa Pacifica Associates, a California Limited Partnership, up to $3,090,000 to develop senior rental housing for low and moderate income households. The term of the loan is 40 years, with simple interest accruing at 3% per annum on the outstanding principal balance. Payments of principal and interest on the loan are due and payable only when there is available annual cash flow from the development. This payment is 50% of the net annual cash flow. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2019, the outstanding balance amounts to $229,881, including accrued interest of $453. Accrued interest is offset by deferred revenue. 67 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 4: Notes and Loans Receivables (Continued) 2. On September 1, 2005, the Agency entered into a loan agreement with Northtown Housing Development Corporation for the purchase of undeveloped real property and the development of an apartment complex (San Sevaine) which will increase the supply of affordable housing to low and moderate income households for a period of ninety-nine (99) years. This loan is a line of credit not -to -exceed $40,700,000 with simple interest accruing at 1 % per annum from the date of disbursement for a term of 55 years (2060), as modified on May 6, 2009, with Amendment #2. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2019, the advances paid against this line of credit amount to $40,457,658 and accrued interest amounts to $3,916,454 for a total of $44,374,112. Accrued interest is offset by deferred revenue. 3. On April 19, 2006, the Agency entered into a loan agreement with LINC-Pepperwood Housing Investors, LP to provide financial assistance from the Low and Moderate Housing Set -aside Fund to purchase and rehabilitate the Pepperwood Apartment Homes, which will increase the supply of affordable housing to low and moderate income households, for not less than ninety-nine (99) years. The loan is in the form of a line of credit not -to -exceed $21,638,113, which includes the rollover of the BLT Partnership No. 1 loan of $2,350,000 and an amendment and increase of $1,288,113 on May 16, 2007. The outstanding principal balance of the loan will accrue simple interest at 2% per annum from the date of disbursement for a term of 56 years (2062). In addition to the extent there are Residual Receipts, the Developer shall pay to the Agency 50% of the Residual Receipts from the preceding year. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2019, advances paid against this line of credit amounts to $21,638,113 and accrued interest amounts to $5,374,251 for a total balance of $27,012,364. Accrued interest is offset by deferred revenue. 4. On September 1, 2005, the Agency entered into a loan agreement with HB Housing Partners, L.P. to provide financial assistance from the Low and Moderate Housing Set -aside Fund to purchase and rehabilitate the Woodhaven Manor Apartments, which will increase the supply of affordable housing to low and moderate income households for not less than ninety-nine (99) years. The loan is in the form of a line of credit not -to -exceed $9,000,000. Simple interest accrues on the advances as follows: 1) 3% per annum from the date of disbursement through and including the date immediately prior to September 21, 2022; and 2) 2% per annum from September 21, 2022 through September 21, 2060. In addition, to the extent there are Residual Receipts, the Developer shall pay to the Agency either 33% or 50% of the Residual Receipts from the preceding year. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2019, the advances paid against this line of credit amounted to $9,000,000 and accrued interest amounts to $3,333,008 for a total of $12,333,008. Accrued interest is offset by deferred revenue. CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 4: Notes and Loans Receivables (Continued) 5. On March 9, 2006, the Agency entered into a loan agreement with The Southern California Housing Development Corporation for the acquisition, construction and operation of affordable housing apartments, referred to as the Rancho Verde Expansion project, which will increase the supply of very -low, low and moderate income households. This loan is a line of credit not -to -exceed $6,500,000 with simple interest accruing at 1.5% per annum until June 27, 2035, and 2% per annum thereafter and payable without demand or notice on June 27, 2060. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2019, the advances paid against this line of credit amounted to $6,499,910 and accrued interest amounts to $1,061,412 for a total of $7,561,322. Accrued interest is offset by deferred revenue. 6. On December 1, 2001, the Agency entered into a residual receipts promissory note loan agreement in the form of a line of credit not -to -exceed $4,000,000 with Malvern Housing Partners, L.P. and Southern California Housing Development Corporation for the acquisition, construction and operation of a 49-unit senior multifamily apartment project, known as Heritage Pointe Senior Apartments. A portion of the necessary funding was provided from proceeds of a $4,000,000 bond issue by Southern California Housing Development Corporation. Funding provided by the Agency was in the form of semi-annual principal payments toward these bonds from the Agency's low and moderate income housing fund. As advances were made by the Agency, beginning April 1, 2003, these amounts were added to and became the principal balance of this Residual Receipts Note, and are accruing simple interest at 1 % per annum from the date of payment through December 2056. Annual payments of principal and accrued interest shall not commence until the operation of the project has generated residual receipts. On December 5, 2007, the residual receipts promissory note was amended and restated in connection with the refunding of the Southern California Housing Development Corporation's bond with the proceed of the Agency Housing Set -Aside Tax Allocation Bonds, Series 2007A and Series 2007B. All residual receipts in excess of fifteen percent of the gross operating income of the project shall be paid to the Agency annually. All principal and accrued interest at the simple interest rate of 1 % per annum shall be due and payable in April 2056. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2019, the advances paid against this line of credit amounted to $2,465,659 and accrued interest amounts to $44,965, for a total of $2,510,624. Accrued interest is offset by deferred revenue. 7. On September 1, 2008, the Agency entered into a residual receipts promissory note loan agreement in the form of a line of credit not -to -exceed $27,565,000 with Rancho Workforce Housing, L.P. for the acquisition, construction and development of a 166-unit rental housing development, including 131 residential units for low and moderate income residents. This loan bears simple interest of 2.386% compounded annually from the date of disbursement, with a term commencing on the date of this agreement and continuing for fifty-five (55) years from the date of the recordation of the Certificate of Completion. Commencing after Borrower's fiscal year first ending after the completion of construction of the development, Borrower shall make repayments to the Agency equal to 50% of the Residual Receipts. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2019, the advances paid against this line of credit amounted to $25,868,857 and accrued interest amounts to $6,015,607 for a total of $31,884,464. CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 4: Notes and Loans Receivables (Continued) 8. On September 26, 1994, the Agency entered into a Disposition and Development Agreement (DDA) and loan agreement (as modified on March 22, 1996) for $5,929,181 with North Town Housing Partners for the acquisition of the 88-unit multifamily rental Villa Del Norte housing project for low and moderate income households. Payments of principal and interest on the loan are due and payable only to the extent that net annual cash flow from the development is available. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. On October 9, 2014, the Loan was modified as a result of a refinancing of the project in order to provide funding for significant rehabilitation improvements to the development. As a result of the refinancing, the term of the Loan and the affordability covenant for the affordable units was extended by 55 years beginning September 1, 2014. The term of the Loan will now terminate on September 1, 2069. The note carries the same interest rate of 3% and the original principal amount of $5,929,181 remains the same. As of June 30, 2019, the outstanding balance amounts to $10,333,182, including accrued interest of $4,404,001. Accrued interest is offset by deferred revenue. 9. On June 6, 2001, the Agency entered into a loan agreement (as updated on December 1, 2002) for $4,700,000 with Northtown Housing Development Corp. for the development of the Olen Jones Senior Apartments. The term of the loan is 55 years, with zero interest accruing for the first 15 years, then accruing simple interest at 3% per annum for the remainder of the term. Payments of principal and interest on the loan are due and payable only to the extent that net annual cash flow from the development is available. Upon dissolution of the Agency, the loan receivable was transferred to the Housing Successor Agency of the City. As of June 30, 2019, the outstanding balance amounts to $4,476,761, including accrued interest of $202,361. Accrued interest is offset by deferred revenue. 10. On July 11, 2014, the City entered into a loan agreement with 7418 Archibald LLC ("Developer") in the amount of $42,913 ("City Predevelopment Loan"), pursuant to certain Acquisition, Disposition, Development and Loan Agreement dated February 19, 2014, between Developer and the City (the "ADDLA"), to develop a 60-unit affordable senior housing project at 7418 Archibald Avenue, referred to as Villa Pacifica 11. The interest of the loan is zero percent (0%) per annum. The principal and any interest due under this Note shall be repaid or forgiven as set forth in the ADDLA, as amended by a first Implementation and Amendment to Acquisition, Disposition, Development and Loan Agreement dated February 17, 2016 between the Borrower's predecessor -in -interest and City and a Second Implementation and Amendment to Acquisition, Disposition, Development and Loan Agreement dated April 1, 2017. The loan may be prepaid in full or in part, at any time without penalty or premium. On April 1, 2017, the City entered into a Promissory Note Secured By Deed of Trust with Villa Pacifica II LP ("Borrower"), not to exceed the sum of $8,683,821 consisting of the existing Predevelopment Loan of $42,913 made by the City to the Developer, a $2,880,000 purchase money loan in connection with the acquisition of land from City, a $2,760,908 construction loan that is being partially disbursed on the date of the closing for the City impact fees and to reimburse Villa Pacifica II LP for construction costs accrued prior to the date of the loan, and a permanent loan of up to $3,000,000 ("Perm Loan Principal") to be disbursed as described in the ADDLA from Villa Pacifica I Funds actually received by the City under the Villa Pacifica I Note. The term of the loan is 55 years, with simple interest accruing at 3% per annum on the outstanding principal balance. Payment of principal and interest is 50% of the Residual Receipts, with payments credited toward accrued interest and then to outstanding principal, on an annual basis on June 1 of each calendar year. As of June 30, 2019, the advances paid against this line of credit amounted to $8,683,821 and accrued interest amounted of $367,498, for a total amount of $9,051,319. 70 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 4: Notes and Loans Receivables (Continued) 11. Day Creek Senior Housing Partners, L.P. and Day Creek Senior Housing Partners 2, LP On May 4, 2016, the City approved a Disposition, Development, and Loan Agreement (DDLA) with Day Creek Senior Housing Partners, LP, also known as National CORE, for the development of a 140-unit senior rental affordable housing project at west of Day Creek Boulevard and north of Base Line Road. The DDLA was amended in June 2017, June 2018, and March 2019. On March 6, 2019, the City entered into land and construction loans in connection with the DDLA: The City Land Loan valued at $7,700,000, consisting of a purchase money loan for the acquisition of the property from the City, was divided into two separate loans: (1) City Land Loan to Day Creek Senior Housing Partners, LP (9% Tax Credit Owner) in the amount of $4,896,303 and (2) City Land Loan to Day Creek Senior Housing Partners 2, L.P. (4% Tax Credit Owner) in the amount of $2,803,697. Both loans bear 2.91 % interest compounded annually for 55 years. Payment of principal and interest is 50% of the Residual Receipts, with payments credited toward accrued interest and then to the outstanding principal, on an annual basis on June 1 of each calendar year. As of June 30, 2019, the outstanding balances of the land loans are as follows: (a) Day Creek Senior Housing Partners, LP amounts to $4,941,585 including $45,282 accrued interest and (b) Day Creek Senior Housing Partners 2, L.P. amounts to $2,829,626 including $25,929 accrued interest. Accrued interest is offset by deferred revenue. The City Construction Loan valued at $5,700,000 with Day Creek Senior Housing Partners 2, L.P. (4% Tax Credit Owner) was deposited to JPMorgan Chase Bank, N.A.(Escrow) held and disbursed pursuant to the terms of the Escrow Agreement among the City, 4% Tax Credit Owner, and JPMorgan Chase Bank, N.A. The loan bears simple interest of 3% per annum from the date of disbursement from the Escrow fund for a term of 55 years. Payment of principal and interest is 50% of the Residual Receipts, with payments credited toward accrued interest and then to outstanding principal, on an annual basis on June 1 of each calendar year. As of June 30, 2019, the outstanding balance is $1,263,887 including accrued interest of $2,697. Accrued interest is offset by deferred revenue. 12. First-time homebuyer loans represents the loans made under the First Time Homebuyer's Program. The payment of the loan is not due until the property is sold. As of June 30, 2019, the outstanding balance amounts to $3,226,808 with no interest due. Total notes and loans receivables for governmental activities at June 30, 2019, including accrued interest of $24,793,918, amounted to $162,028,943. 71 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 4: Notes and Loans Receivables (Continued) Business -type activities 13. In October 2015, the City entered into an unsecured promissory note for the costs of constructing an electric utility line extension related to the development of a hotel on Haven Avenue. The costs to construct the electric utility line extension amounted to $337,480. The note accrues simple interest at 1.46% per month (17.52% per annum) beginning September 1, 2018 and is fully due and payable on February 1, 2022. Outstanding principal may be prepaid in whole or in part at any time. Principal may be partially reduced on February 1 of each year based on average hotel occupancy for the preceding calendar year exceeding thresholds established in the note. As of June 30, 2019, the outstanding balance amounts to $105,000. Total notes and loans receivables for the business -type activities at June 30, 2019, amounted to $105,000. 72 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 5: Capital Assets Governmental activities capital assets for the year ended June 30, 2019, was as follows: Beginning Ending Balance Increases Decreases Transfers Balance Governmental Activities: Capital assets, not being depreciated: Land $ 92,936,535 $ 5,202,315 $ - $ $ 98,138,850 Right of way 237,012,767 - 237,012,767 Construction -in -progress 93,938,888 4,768,230 (36,406,951) (50,892,788) 11,407,379 Total Capital Assets, Not Being Depreciated 423,888,190 9,970,545 (36,406,951) (50,892,788) 346,558,996 Capital assets, being depreciated: Building improvements 173,292,493 1,382,938 43,222,879 217,898,310 Improvement other than buildings 42,757,851 153,499 - 42,911,350 Equipment and vehicles 48,882,020 6,024,846 (319,063) 54,587,803 Furniture and fixtures 3,760,609 22,881 - 3,783,490 Infrastructure 471,000,049 8,419,064 (2,160,935) 7,669,909 484,928,087 Intangible 3,328,862 - - 3,328,862 Total Capital Assets, Being Depreciated Less accumulated depreciation: Building improvements Improvement other than buildings Equipment and vehicles Furniture and fixtures Infrastructure Intangible Total Accumulated Depreciation Total Capital Assets, Being Depreciated, Net Governmental Activities 743, 021, 884 16, 003, 228 (2,479,998) 50, 892, 788 807, 437, 902 59,547,170 6,554,191 - 66,101,361 15,560,514 1,817,657 - 17,378,171 38, 855,155 2,668,080 (315, 888) - 41, 207, 347 3,271,746 148,343 - - 3,420,089 227,683,019 8,081,786 (1,386,183) - 234,378,622 2,403,468 246,495 - - 2,649,963 347,321,072 19,516,552 (1,702,071) - 365,135,553 395,700,812 (3,513,324) (777,927) 50,892,788 442,302,349 Capital Assets, Net $ 819,589,002 $ 6,457,221 $ (37,184,878) $ - $ 788,861,345 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: General government $ 345,213 Public safety - police 683,290 Public safety - fire protection 2,780,055 Engineering and public works 9,909,716 Community development 67,210 Community services 4,280,155 Internal service 1,450,913 Total Governmental Activities $ 19,516,552 73 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 5: Capital Assets (Continued) Business -type activities capital assets for the year ended June 30, 2019, was as follows: Beginning Ending Balance Increases Decreases Transfers Balance Business -Type Activities: Capital assets, not being depreciated: Land $ 5,451,015 $ - $ - $ - $ 5,451,015 Construction -in -progress 1,543,997 1,126,775 - (974,426) 1,696,346 Total Capital Assets, Not Being Depreciated 6,995,012 1,126,775 - (974,426) 7,147,361 Capital assets, being depreciated: Building improvements 17,225,973 - - - 17,225,973 Improvement other than buildings 6,368,130 - - - 6,368,130 Equipment and vehicles 623,148 79,003 - - 702,151 Furniture and fixtures 6,004 - - - 6,004 Infrastructure 27,719,738 2,253,771 - 974,426 30,947,935 Intangible 25,858 - - - 25,858 Total Capital Assets, Being Depreciated 51,968,851 2,332,774 - 974,426 55,276,051 Less accumulated depreciation: Building improvements 10,770,050 431,198 - - 11,201,248 Improvement other than buildings 3,877,441 128,834 - - 4,006,275 Equipment and vehicles 516,269 15,415 - - 531,684 Furniture and fixtures 6,004 - - - 6,004 Infrastructure 10,089,102 1,121,425 - - 11,210,527 Intangible 25,858 - - - 25,858 Total Accumulated Depreciation 25,284,724 1,696,872 - - 26,981,596 Total Capital Assets, Being Depreciated, Net 26,684,127 635,902 - 974,426 28,294,455 Business -Type Activities Capital Assets, Net $ 33,679,139 $1,762,677 $ - $ - $ 35,441,816 Depreciation expense was charged to functions/programs of the primary government as follows: Business -Type Activities: Sports Complex Municipal Utility Fiber Optic Network Total Business -Type Activities $ 560,032 979,082 157,758 $ 1,696,872 74 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 6: Interfund Receivable, Payable and Transfers The composition of interfund balances as of June 30, 2019, was as follows: Due To/From Other Funds Due to Other Funds Nonmajor Nonmajor Fire Governmental Fiber Optic Enterprise Funds District Funds Network Fund Total Due From Other Funds: General Fund $ 31,563 $ 839,313 $516,206 $ 29,454 $ 1,416,536 Development Impact Fees 12,874 - - - 12,874 Housing Successor Agency 3,308 - 3,308 Nonmajor Governmental Funds 21,208 - 21,208 Municipal Utility 9,151 - 9,151 Total $ 78,104 $ 839,313 $ 516,206 $ 29,454 $ 1,463,077 Due to/from other funds were the results of routine interfund transactions not cleared prior to the end of the fiscal year and were also made to cover negative cash balances at June 30, 2019. Advances To/From Other Funds Advances from Other Funds Lighting Fire Sports Funds Districts District Complex Total Advances to Other Funds: General Fund $ 12,173,792 $ 1,553,545 $1,970,984 $ 15,698,321 On August 16, 2017, the City Council authorized an advance of $14,400,340 from the General Fund to the Lighting Districts Fund to provide funding for the purchase and acquisition of Southern California Edison owned streetlights and the installation of LED lighting to streetlights, intersections, and bridges, and other one-time costs necessary to inventory the streetlights. The advance was completed in phases and bears interest at 1.0% on the outstanding balance. The advance is payable in monthly installments and the final payment will occur in August 2037. At June 30, 2019, the outstanding balance amounted to $12,173,792. On June 21, 2012, the General Fund advanced $4,556,198 to the Fire District to provide funding for the prepayment of the Fire District's side fund liability with CalPERS. The advance bears interest at 4.5% and is payable in monthly installments. The final payment will occur in October 2023. At June 30, 2019, the outstanding balance amounted to $1,553,545. On September 2, 2015, the General Fund advanced $3,215,612 to the Sports Complex to provide funding for the installation of a solar photovoltaic system at the Epicenter. The advance bears interest at 1.0% and is payable in monthly installments. The final payment will occur in February 2035. At June 30, 2019, the outstanding balance amounted to $1,970,984. 75 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 6: Interfund Receivable, Payable and Transfers (Continued) Interfund Transfers Transfers Out General Lighting Fire Municipal Nonmajor Funds Fund Districts District utility Governmental Total Transfers In General Fund $ - $ 125,000 $ - $ 1,390,260 $ 296,690 $ 1,811,950 Lighting Districts 251,010 - - - 122,410 373,420 Fire District - - 3,230 3,230 Sports Complex 1,770,941 - - - 1,770,941 Internal Service Funds 1,939,730 - 158,630 - 2,098,360 Nonmajor Governmental 562,840 - - - 53,038 615,878 $ 4,524,521 $ 125,000 $ 158,630 $ 1,390,260 $ 475,368 $ 6,673,779 The General Fund transferred $251,010, $1,770,941, and $562,840 to the Lighting Districts Fund, Sports Complex Fund and Nonmajor Governmental Funds, respectively, to cover the budgeted amounts. The Municipal Utility transferred $1,390,260 to the General Fund to cover the cost of operations. The Lighting Districts and the Nonmajor Governmental Funds transferred $125,000 and $296,690 respectively to the General Fund for the purpose of providing financial resources to cover expenditures. Note 7: Long -Term Debt Obligations a. Long -Term Debt — Governmental Activities The following is a schedule of changes in governmental activities long-term debt for the fiscal year ended June 30, 2019: Beginning Ending Due Within Balance Additions Repayments Balance One Year Capital Leases: Dell Blade Servers $ - $ 2,446,503 $ 527,330 $ 1,919,173 $ 453,174 Capital Leases Payable On December 5, 2018, the City entered into leased purchase agreements with Dell Financial Services to finance the acquisition of hardware equipment and software for the replacement of the City's data center infrastructure. The total cost of the equipment and related software acquired amounts to $2,446,503. The agreement requires annual payments of $527,330 with an interest component of 4.715% per annum due February 111 of each year with the final payment due February 2023. 76 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 7: Long -Term Debt Obligations (Continued) The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2019 are as follows: Year ended Annual June 30, Payment 2020 $ 527,330 2021 527,330 2022 527,330 2023 527,330 Total payments 2,109,320 Interest portion (190,147) Present value of lease payments $ 1,919,173 b. Long -Term Debt — Business -Type Activities The following is a schedule of changes in business -type activities long-term debt for the fiscal year ended June 30, 2019: Beginning Ending Due Within Balance Additions Repayments Balance One Year 2019 Lease Revenue Bonds $ - $ 12,195,000 $ - $ 12,195,000 $ 310,000 Unamortized bonds premium 1,371,795 Unamortized bonds discount (10,857) Total $ 13,555,938 2019 Lease Revenue On January 30, 2019, the Financing Authority issued the 2019 Lease Revenue Bonds Series A (tax-exempt) in the amount of $9,875,000 and 2019 Lease Revenue Bonds Series B (taxable) in the amount of $2,320,000 to finance the acquisition, design, construction and equipment of an expansion to the City's existing fiber optic network pursuant to a lease agreement between the City and the Financing Authority. Series A Bonds were issued with a premium of $1,371,795 and Series B Bonds were issued with a discount of $10,857. The Series A and B Bonds mature annually on May 1st, with Series A beginning in 2025 and through 2039 and Series B beginning in 2020 and through 2025. Interest on the Series A and B Bonds is paid on May 1st and November 1st of each year, commencing November 1, 2019 with interest ranging from 2.85% to 5.00%. The Series A Bonds maturing on or before May 1, 2019 are not subject to redemption prior to their maturities, while the Series A Bonds maturing on or after May 1, 2030 are subject to optional redemption at the option of the Financing Authority as a whole or in part, on any date on or after May 1, 2019, at a redemption price equal to the principal amount of the Bonds. The Series B Bonds are not subject to optional redemption. 77 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 7 Note 8 Note 9 Long -Term Debt Obligations (Continued) The following schedule illustrates the debt service requirements to maturity for the 2019 Lease Revenue Bonds Series A and B as of June 30, 2019: Year Ending June 30 2020 2021 2022 2023 2024 2025-2029 2030-2034 2035-2039 Series A Series B Principal Interest 2,385,000 3,325,000 4,165,000 $ 545,590 449,456 449,456 449,456 449,456 2,053,781 1,359,781 519,000 Principal Interest $ 310,000 $ 84,013 425,000 60,375 440,000 47,838 450,000 34,638 465,000 21,138 230,000 7,188 Total $ 9,875,000 $ 6,275,976 $ 2,320,000 $ 255,190 The Bonds are secured by lease payment revenues, which consist of lease payments for the use and possession of the Central Park facility. The lease payments are anticipated to be realized from private connections to the fiber optic network that will generate revenues for the City. In the event of default, the Trustee, as the assignee of the Finance Authority under the lease agreement for the Central Park facility, may exercise any remedies available pursuant to the law. However, the Trustee may not accelerate the lease payments or otherwise declare any lease payments not in default to be immediately due and payable, terminate the lease agreement, or cause the leasehold interest of the Finance Authority or of the City in the Central Park facility to be sold. The City in the event of default is liable for the lease payment of the Central Park facility and the performance of the lease agreement. Advances from the Successor Agency During the formation of Community Facilities District CFD 2000-01 (CFD 2000-01), a number of meetings were held with property owners within the proposed boundaries to discuss participation in CFD 2000-01 and benefits to their property. As a result of those meetings, the approved boundary map was modified at the landowners' request to exclude certain properties from the CFD 2000-01 boundaries. Property owners that were excluded from CFD 2000-01 boundaries, but will be receiving direct benefit from the improvements constructed by CFD 2001-01, were advised that reimbursement would be required when their properties are developed. The Redevelopment Agency advanced the pro-rata share for properties that will receive benefit from the improvements, but are not participating in CFD 2000-01. At June 30, 2019, the outstanding amount of the advance was $3,953,624. Compensated Absences The City's policies relating to compensated absences are described in Note 1. The liability will be paid in future years by the General Fund and the Fire District Fund as it becomes due. Balance June 30, 2018 Additions Deletions Balance Due in June 30, 2019 One Year Governmental Activities: Compensated Absences $ 7,497,871 $ 5,302,114 $ 5,661,355 $ 7,138,630 $ 5,307,000 78 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 10: Other Special Obligations The following issues of Residential Mortgage Revenue Bonds, Special Assessment District Bonds, and Community Facility District Bonds are not reflected in the Statement of Net Position because these are special obligations payable solely from and secured by specific revenue sources described in the resolutions and official statements of the respective issues. Neither the faith and credit nor the taxing power of the City, the State of California or any political subdivision thereof, is pledged for the payment of these bonds. The outstanding amounts at June 30, 2019, were as follows: Outstanding Amount at June 30, 2019 City of Rancho Cucamonga: Assessment District 93-1 $ 830,000 Special Tax Refunding Bond, Series 2015: Community Facilities District No. 2000-01 330,000 Community Facilities District No. 2000-02 3,137,000 Community Facilities District No. 2001-01 Series A 6,199,000 Community Facilities District No. 2001-01 Series B 600,000 Community Facilities District No. 2006-01 3,379,000 Community Facilities District No. 2006-02 2,016,000 Community Facilities District No. 2000-03 6,288,000 Community Facilities District No. 2003-01 Series A 12,585,000 Community Facilities District No. 2003-01 Series B 2,446,000 Community Facilities District No. 2004-01 29,495,000 Successor Agency of the Former Rancho Cucamonga Redevelopment Agency: Multi -Family Housing Revenue Bond: Series 1997A 1,822,144 Total $ 69,127,144 Note 11: Pension Plan Obligations Net Pension Deferred Deferred (Liability) Pension Outflows Pension Inflows CalPERS City Miscellaneous Plan $ (48,282,497) $ 13,724,060 $ (3,092,702) Fire District Miscellaneous Plan (2,599,301) 731,952 (173,997) Fire District Safety Plan (34,726,501) 9,705,614 (972,778) $ (85,608,299) $ 24,161,626 $ (4,239,477) a. General Information about the Pension Plans Plan Description City Miscellaneous Plan - The City of Rancho Cucamonga contributes to the California Public Employees Retirement System (PERS), an agent multiple -employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost -of -living adjustments and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by state statute and City ordinance. 79 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 11: Pension Plan Obligations (Continued) Fire District Miscellaneous and Safety Plans - All qualified permanent and probationary Fire District's employees are eligible to participate in the Safety Employee Pension Plan or Miscellaneous Employee Pension Plan, both cost -sharing multiple employer defined benefit pension plans administered by the California Public Employees' Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and Local Government resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Copies of PERS' annual financial report may be obtained from its executive office at 400 P Street, Sacramento, California 95814. 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 Public Employees' Retirement Law. Hire date Benefit formula Benefit vesting schedule Benefit payments Retirement age City Miscellaneous Plans Tier 1 " Tier 2" Tier 3 PEPRA Prior to September 1, 2010 2.5% @ 55 5 years service monthly for life minimum 50 yrs September 1, 2010 but prior to July 3, 2011 2.5% @ 55 5 years service monthly for life minimum 50 yrs July 4, 2011 and after 2.0% @ 55 5 years service monthly for life minimum 50 yrs January 1, 2013 and after 2.0% @ 62 5 years service monthly for life minimum 52 yrs Monthly benefits, as a % of 2.000% - 2.500%, 2.000% - 2.500%, 1.426% - 2.418%, 1.000% - 2.500%, eligible compensation 50 yrs - 55+ yrs, 50 yrs - 55+ yrs, 50 yrs - 63+ yrs, 52 yrs - 67+ yrs, respectively respectively respectively respectively Required employee 8.000% 8.000% contribution rates Required employer 18.594% 18.594% contribution rates 7.000% 18.594% 6.000% 18.594% CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 11: Pension Plan Obligations (Continued) Fire District Miscellaneous Cost -Sharing Plans Tier 1 * Tier 2 ` PEPRA Prior to July 9, 2011 January 1, 2013 Hire date July 9, 2011 but prior to and after January 1, 2013 Benefit formula 2.5% @ 55 2.0% @ 55 2.0% @ 62 Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age minimum 50 yrs minimum 50 yrs minimum 52 yrs Monthly benefits, as a % of eligible 2.000% - 2.500%, 1.426% - 2.418%, 1.000% - 2.500%, compensation 50 yrs - 55+ yrs, 50 yrs - 63+ yrs, 52 yrs - 67+ yrs, respectively respectively respectively Required employee contribution rates 8.000% 7.000% 6.250% Required employer contribution rates 22.916% 9.325% 7.091% Fire District Safety Cost -Sharing Plans Tier 1 " Tier 2 PEPRA Hire date Benefit formula Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of eligible compensation Required employee contribution rates Required employer contribution rates Employees Covered Prior to July 9, 2011 January 1, 2013 July 9, 2011 but prior to and after January 1, 2013 3.0%@50 3.0%@55 2.7%@57 5 years service 5 years service 5 years service monthly for life monthly for life monthly for life minimum 50 yrs minimum 50 yrs minimum 50 yrs 3.000%, 50+ yrs 2.400% - 3.000%, 2.000% - 2.700%, 50 yrs - 55+ yrs, 50 yrs - 57+ yrs, respectively respectively 9.000% 9.000% 11.500% 37.213% 17.614% 12.212% * Plan is closed to new entrants As of the valuation date of June 30, 2017, the following employees were covered by the benefit terms of the Plan: Number of Members City Fire Miscellaneous Miscellaneous Fire Safety Description Plans Plans Plans Active members 491 22 91 Transferred members 197 4 8 Terminated members 276 9 3 Retired members and beneficiaries 295 20 71 Tota 1 1,259 55 173 81 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 11: Pension Plan Obligations (Continued) Contribution Description — City Miscellaneous & Fire District Miscellaneous and Safety Plans Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CaIPERS' annual actuarial valuation process. The actuarially determined rate is based on the estimated amount necessary to pay the Plan's allocated share of the risk pool's costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2019, the employer contributions recognized as a reduction to the net position liability for all the Plans were $8,474,713. b. Net Pension Liability — City Miscellaneous Plan & Fire District Miscellaneous and Safety Cost -Sharing Rate Plans The net pension liability is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2018, using an annual actuarial valuation as of June 30, 2017 rolled forward to June 30, 2018 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below. Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2017 valuation was rolled forward to determine the June 30, 2018 total pension liability, based on the following actuarial methods and assumptions: Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Projected Salary Increases Mortality Rate Table (1) Post Retirement Benefit Increase June 30, 2017 June 30, 2018 Entry Age Normal Cost Method 7.15% 2.75% Varies by Entry Age and Service Derived using CaIPERS' Membership Data for all Funds Contract COLA up to 2.0% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.50% thereafter (1) The mortality table used was developed based on CaIPERS-specific data. The table includes 15 yearsof mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For moredetails on this table, please refer to the December 2017 experience study report (based on CaIPERSdemographic data from 1997 to 2015) that can be found on the CaIPERS website. :4 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 11: Pension Plan Obligations (Continued) Changes of Assumptions In 2018, demographic assumptions and inflation rate were changed in accordance to the CaIPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. Long-term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CaIPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The expected real rates of return by asset class are as followed: Assumed Asset Real Return Real Return Asset Class (1) Allocation Years 1 - 10 (2) Years 11+ (3) Global Equity 50.00% 4.80% 5.98% Fixed Income 28.00% 1.00% 2.62% Inflation Assets 0.00% 0.77% 1.81 % Private Equity 8.00% 6.30% 7.23% Real Estate 13.00% 3.75% 4.93% Liquidity 1.00% 0.00% -0.92% Total 100.00% (1) In the System's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (2) An expected inflation of 2.0% used for this period. (3) An expected inflation of 2.92% used for this period. Discount Rate The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 83 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 11: Pension Plan Obligations (Continued) c. Pension Liabilities, Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions The following table shows the changes in net pension liability recognized over the measurement period for the City Miscellaneous Plan. Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability/(Assets) (a) (b) (c)=(a)-(b) Balance at: June 30, 2017 $ 212,888,198 $ 164,876,366 $ 48,011,832 Changes Recognized for the Measurement Period: Service Cost 4,869,644 4,869,644 Interest on the Total Pension Liability 15,134,775 15,134,775 Changes of Assumptions (1,496,029) (1,496,029) Difference between Expected and Actual Experience 2,212,199 - 2,212,199 Net Plan to Plan Resource Movement - (407) 407 Contributions from the Employer 4,622,851 (4,622,851) Contributions from Employees 2,032,448 (2,032,448) Net Investment Income 13,809,497 (13,809,497) Benefit Payments including Refunds of Employee Contributions (8,728,016) (8,728,016) - Administrative Expense (256,923) 256,923 Other Miscellaneous Expense - 242,458 (242,458) Net Changes During 2017/19 11,992,573 11,721,908 270,665 Balance at: June 30, 2018 $ 224,880,771 $ 176,598,274 $ 48,282,497 As of June 30, 2019, the Fire District reported net pension liabilities for its proportionate shares of the net pension liability of each rate plan of $37,325,802. The Fire District's net pension liability for each rate Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the rate Plans is measured as of June 30, 2018, and the total pension liability for each rate Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2017, rolled forward to June 30, 2018, using standard update procedures. The Fire District's proportion of the net pension liability was based on a projection of the Fire District's long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The Fire District's proportionate share of the net pension liability for each rate Plan as of June 30, 2017 and 2018, was as follows: Proportion - June 30, 2018 Proportion - June 30, 2018 Fire Miscellaneous Plan 0.0672% 0.0690% Changes - Increase (Decrease) 0.0017% Fire Safety Plan 0.5729% 0.5918% 0.0190% 84 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 11: Pension Plan Obligations (Continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan's as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what 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 Rate - 1% Current Discount Discount Rate +1% Net Pension Liability 6.15% 7.15% 8.15% City Miscellaneous Plan $ 80,072,313 $ 48,282,497 $ 22,162,812 Fire District Miscellaneous Plan 4,023,242 2,599,301 1,423,861 Fire District Safety Plan 53,456,229 34,726,501 19,380,843 $ 137,551,784 $ 85,608,299 $ 42,967,516 Pension Plan Fiduciary Net Position The plan fiduciary net position disclosed in the GASB Statement No. 68 accounting valuation report may differ from the plan assets reported in the funding actuarial valuation report due to several reasons. First, for the accounting valuations, CaIPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In addition, differences may result from early Comprehensive Annual Financial Report closing and final reconciled reserves. Detailed information about each pension plan's fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS website for additional information. For the measurement period ending June 30, 2018 (the measurement date), the City incurred a pension expense of $6,839,810 for all Plans. As of June 30, 2019, the following were the reported deferred outflows of resources and deferred inflows of resources related to all pension plans: Current year contributions that occurred after the measurement date of June 30, 2018 Change of assumption Difference between expected and actual experiences Net difference between projected and actual earnings on pension plan investments Adjustment due to differences in proportions Share of contribution calculation Difference in proportionate share Total Deferred Outflows of Deferred Inflows of Resources Resources $ 9,519,392 $ 10,103,925 1,922,261 2,555,312 1,739,536 727,211 - 1,246,928 16,700 - 560,980 8,858 - $ 24,161,626 $ 4,239,477 85 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 11: Pension Plan Obligations (Continued) Contributions subsequent to the measurement date in the amount of $9,519,392 are reported as deferred outflows of resources and will be recognized as a reduction of the net pension liability in the year ended June 30, 2020. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows: Measurement Deferred Period ended Outflowsi(Inflows) June 30: of Resources 2020 $ 5,116, 686 2021 6,163, 884 2022 571,501 2023 (1,218,474) 2024 (230, 840) Note 12: PARS Retirement Enhancement Plan Net Pension Deferred Pension Deferred Pension Asset Outflows Inflows PARS $ 3,469,467 $ 1,943,656 $ (2,351,862) 1. General Information About the Plan Plan Description The City of Rancho Cucamonga sponsors the PARS Retirement Enhancement Plan, an agent multiple -employer defined benefit pension plan. The Plan provides pension benefits to miscellaneous members (Tier 1) and city council members (Tier 2). Benefits are equal to a percentage of highest pay multiplied by years of service, with the percentage varying by retirement age based on the total combined CalPERS age factor, but not exceeding 3% at 60. Sample rates are as follows: Age 55 56 57 58 59 60+ Tier 1 and Tier 2 0.000% 0.100 0.200 0.300 0.400 0.500 The City and the Fire District have the right to amend, modify or terminate the plan at any time. Separate audited financial statements are not prepared. Benefits are increased by a 2% annual cost of living adjustment after retirement. There are no employee contributions for either tier. Benefits Provided PARS provides supplemental retirement benefits to eligible employees of the City. Employees are eligible to receive benefits under the plan if they meet the following requirements: 1) a miscellaneous employee of the City or City Council on or after December 1, 2002, 2) at least 56 years of age, 3) has completed 10 or more years of full-time continuous employment at the City, 4) has terminated employment with the City and has concurrently retired under CalPERS if an active CalPERS member, and 5) has applied for benefits under the plan. Benefits shall be in an amount equal to 0 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 12: PARS Retirement Enhancement Plan (Continued) one -twelfth of the product of the number of full and partial years of full-time continuous employment with the City completed as of the Member's retirement times the Member's final pay, times the PARS benefit factor. The total combined CalPERS age factor and PARS benefit factor at retirement may not exceed three percent. Hire date on or after December 1, 2002 Benefit formula one -twelfth of the product of the number of full and partial years of full-time continuous employment with the City completed as of the Member's retirement times the Member's final pay, times the PARS benefit factor Benefit vesting schedule 10 years service Benefit payments monthly for life Retirement age minimum 56 yrs Monthly benefits, as a % of N/A - not based on % of eligible compensation eligible compensation Required employee contribution rates 0.000% Required employer contribution rates 3.900% *This plan is closed to new entrants Employees Covered As of the valuation date of June 30, 2018, the following employees were covered by the benefit terms of the Plan: Description Active employees Inactives entitled to but yet receiving benefits Inactives currently receiving benefits Total Contribution Description Number of Members 225 3 114 342 The total plan contributions are determined through the PARS' annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Due to the City's pre -funding of its pension liability with PARS, the City's Plan had a net pension asset as of the June 30, 2018 actuarial valuation which positively impacted the actuarially determined rate. For the year ended June 30, 2019, the employer contributions recognized as a decrease to the net pension liability were $628,911. Net Pension Asset The net pension asset for the Plan is measured as the total pension liability, less the pension plan's fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2018 using an annual actuarial valuation as of June 30, 2018. A summary of principal assumptions and methods used to determine the net pension liability is shown below. 87 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 12: PARS Retirement Enhancement Plan (Continued) Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2018 total pension liabilities were based on the following actuarial methods and assumptions: Actuarial Valuation Date Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Salary Increases Investment Rate of Return Mortality Rate Table Post Retirement Benefit Increase Change in Assumptions June 30, 2019 Entry Age Normal, Level Percent of Payroll 6.00% at June 30, 2018 2.75% annually Aggregate - 3.00% 6.00% at June 30, 2017. Expected City contributions projected to keep sufficient plan assets to pay all benefits from trust CaIPERS 1997-2015 Experience Study Post -retirement mortality projected fully generational with Society of Actuaries Scale MP-2018 In the June 30, 2018 actuarial valuation, the discount rate was updated from 5.75% to 6.00%, the demographic assumptions were updated to CaIPERS 1997-2015 Experience Study, and the mortality improvement scale was updated to Society of Actuaries Scale MP-2018. Discount Rate The discount rate used to measure the total pension liability was 6.00%. The expected long-term rate of return on investments was updated from 5.75% to 6.00%. Future contributions based on the funding policy will be made at contractually required rates, actuarily determined. Based on these assumptions, the fiduciary net position was projected to be available to make all projected future benefit payments. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments. 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. These geometric rates of return are net of administrative expenses. New Strategic Asset Class Allocation Equity 48.25% Fixed Income 45.00% RE ITs 1.75% Cas h 5.00% Real Return 4.82% 1.47% 3.76% 0.06% 0 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 12: PARS Retirement Enhancement Plan (Continued) Changes in the Net Pension Asset The following table shows the changes in net pension asset recognized over the measurement period. Balance at: June 30, 2017 Changes Recognized for the Measurement Period: Service Cost Interest on the Total Pension Liability Changes of Benefit Terms Difference between Expected and Actual Experience Changes of Assumptions Contributions from the Employer Contributions from Employees Net Investment Income Benefit Payments including Refunds of Employee Contributions Administrative Expenses Net Changes During 2017/18 Balance at: June 30, 2018 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (Asset) (a) (b) (c)=(a)-(b) $ 29,791,333 $ 30,262,718 $ (471,385) 736,116 - 736,116 1,731,246 - 1,731,246 (323,105) - (323,105) (1,975,546) - (1,975,546) (683,589) - (683,589) - 657,424 (657,424) 1,865,280 (1,865,280) (837,663) (837,663) - (39, 500) 39,500 (1,352,541) 1,645,541 (2,998,082) $ 28,438,792 $ 31,908,259 $ (3,469,467) Sensitivity of the Net Pension Asset to Changes in the Discount Rate The following presents the net pension asset of the Plan as of the measurement date, calculated using the discount rate of 6.00 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage -point lower (5.00 percent) or 1 percentage -point higher (7.00 percent) than the current rate: Discount Rate - 1% Current Discount Discount Rate +1% (5.00%) Rate (6.00%) (7.00%) Plan's Net Pension Liability (Assets) $ 788,999 $ (3,469,467) $ (6,959,475) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions As of the start of the measurement period, the net pension asset was $471,385. For the measurement period ending June 30, 2018, the City incurred a pension expense of $281,185 for the Plan. 0 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 12: PARS Retirement Enhancement Plan (Continued) As of June 30, 2019, the City has deferred outflows and deferred inflows of resources related to pensions as follows: Current year contributions that occurred after the measurement date of June 30, 2018 Difference between Expected and Actual Experiences Change of Assumption Net Difference between Projected and Actual Earnings on Pension Plan Investments Deferred Outflows Deferred Inflows of of Resources Resources 628,911 $ - 1,764,553 1,283,937 587,309 30,808 Total $ 1,943,656 $ 2,351,862 $628,911 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, 2020. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year ended June 30: De fe rre d Outflowst(inflows) of Resources 2020 $ 160,016 2021 (53, 384) 2022 (399, 786) 2023 (143, 054) 2024 (188, 930) Thereafter (411, 979) Note 13: Other Post -Employment Benefits Plan Description The City does not provide post -employment benefits; however, medical coverage is provided to Fire District personnel and their dependents upon retirement under the Rancho Cucamonga Fire Protection District Memorandum of Understanding. The Fire District provides other post -employment benefits (OPEB) through the California Employers' Retiree Benefit Trust (CERBT), an agent multiple -employer defined benefit healthcare plan administered by the California Public Employees' Retirement System (CalPERS). For Tier 1 employees, the Fire District pays 100% of the medical insurance premium for the participant and their family. For Tier 2 employees, the Fire District contributes a predetermined monthly maximum for each eligible retiree towards health insurance. These benefits are provided per contract between the Fire District and the employee associations. Separate financial statements for the CERBT may be obtained by writing to CalPERS at Lincoln Plaza North 400 Q Street, Sacramento, California 95814 or by visiting the CalPERS website at www.calpers.ca.gov. .c CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 13: Other Post -Employment Benefits (Continued) Employees Covered As of the June 30, 2018, measurement date, the following current and former employees were covered by the benefit terms under the HC Plan: De scri Active members Inactives entitled to but not yet receiving Inactives currently receiving benefits Tota I Funding Policy Number of Members 110 6 68 184 The contribution requirement of plan members and the Fire District are established and may be amended by the City Council. Currently, contributions are not required from plan members. Contributions to the Plan include all amounts paid by the City directly to the Plan, cash benefit payments made directly to plan members, and an implied subsidy payment as determined by the June 30, 2018 actuarial valuation. These contributions are netted against the reimbursements received from the CERBT. During the June 30, 2018 measurement period, the City paid $808,623 in premiums for retiree medical insurance and was reimbursed $749,647, and the implied subsidy was $298,000, for a total contribution of $467,000. Net OPEB Liability The City's net OPEB liability was measured as of June 30, 2018 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2017 that was rolled forward to determine the June 30, 2018 total OPEB liability, based on the following actuarial methods and assumptions: Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Salary Increases Investment Rate of Return Mortality Rate Mortality Improvement Healthcare Trend Rate Entry Age Normal 5.50% 2.75% 3.00% per annum, in aggregate N/A CalPERS 1997-2015 Experience Study Post -retirement mortality projected fully generational with Scale MP-2017 Non --Medicare - 7.5% for 2019, decreasing to an ultimate rate of 4.0% in 2076 Medicare - 6.5% for 2019, decreasing to an ultimate rate of 4.0% in 2076 The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which 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. 91 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 13: Other Post -Employment Benefits (Continued) The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table for the CERBT Strategy 3: Long-term Target expected real Asset Class Allocation rate of return Global Equity 24.00% 4.82% Fixed income 39.00% 1.47% TIPS 26.00% 1.29% Commodities 3.00% 0.84% REITs 8.00% 3.76% Total 100.00% Discount Rate The discount rate used to measure the total OPEB liability was 5.50 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Changes in the OPEB Liability The changes in the net OPEB liability for the Plan are as follows: Balance at: June 30, 2018 Changes Recognized for the Measurement Period: Service Cost Interest on the Total Pension Liability Changes of Benefit Terms Difference between Expected and Actual Experience Changes of Assumptions Contributions from the Employer Net Investment Income Benefit Payments including Refunds of Employee Contributions Administrative Expenses Net Changes During 2018/19 Balance at: June 30, 2019 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (Asset) (a) (b) (c)=(a)-(b) $ 28,558,000 $ 28,267,000 $ 291,000 412,316 - 412,316 1,562,020 1,562,020 998,969 (998,969) 1,339,488 (1,339,488) (1,143,902) (1,143,902) - - (52,080) 52,080 830,434 1,142,475 (312,041) $ 29,388,434 $ 29,409,475 $ (21,041) '11 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 13: Other Post -Employment Benefits (Continued) Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2018: Current 1%Decrease Discount Rate 1%Increase (4.509/6) (5.50%) (6.50%) Net OPEB Liability / (Asset) $ 4,312,353 $ (21,041) $ (3,544,166) Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2018: Current Healthcare 1%Decrease Cost Trent Rates 1%Increase (6.5%/5.5% decreasing (7.5%/6.5% decreasing (8.5%/7.5% decreasing to 3.00%) to 4.00%) to 5.00%) Net OPEB Liability / (Asset) $ (3,897,136) $ (21,041) $ 4,754,136 OPEB Plan Fiduciary Net Position CERBT issues a publicly available financial report that includes financial statements and required supplementary information. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2019, the City recognized OPEB expense of $529,916. As of June 30, 2019, the City reported deferred outflows of resources related to OPEB from the following sources: OPEB contributions subsequent to measurement date Net difference between projected and actual earnings on OPEB plan investments Tota I Deferred Outflows Deferred Inflows of Resources of Resources $ 469,195 $ - 212,012 - $ 681,207 $ - 93 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 13: Other Post -Employment Benefits (Continued) The $469,195 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 during the fiscal year ending June 30, 2020. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows: Deferred Year ended Outflowst(Inflows) of June 30: Resources 2019 $ 56,753 2020 56,753 2021 55,753 2022 42,753 Note 14: Summary Disclosure of Self -Insurance Contingencies The City and the Fire District are exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the Member Entity obtains insurance coverage. The City and the Fire District are a members of the Public Agency Risk Sharing Authority of California-PARSAC (Authority), a joint powers authority, which provides joint protection programs for public entities covering automobile, general liability, errors and omission losses, workers' compensation, and property claims. Under the program, the City and Fire District have a $500,000 retention limit for liability, which is similar to a deductible, with the Authority being responsible for losses above that amount up to $1,000,000. The Authority carries an excess commercial liability policy of $25,000,000 in excess of its $1,000,000 retention limit to cover losses through affiliated risk management authorities. The Authority also provides one billion dollars aggregate per occurrence property coverage to its members with such coverage provided by purchased insurance. Liabilities of the City and the Fire District are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claims liability estimate. The City and Fire District have a $250,000 retention limit for workers compensation. The Authority covers workers' compensation claims in excess of the $250,000 retention limit up to $500,000. The Local Agency Workers Compensation Excess Pool provides excess coverage to statutory limits. The City pays an annual premium to the Authority and may share in any surplus revenues or may be required to pay additional assessments based upon the Authority's operating results. Effective July 1, 2015, the Fire District became a member of the Public Agency Risk Sharing Authority of California (Authority) for its workers compensation insurance and concurrently separated from the Public Agency Self -Insurance System (PASIS) of San Bernardino County. The Fire District will maintain reserves to cover its June 30, 2019 estimated claims liability for 94 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 14: Summary Disclosure of Self -Insurance Contingencies (Continued) workers compensation up to its self -insured retention of $250,000. Claims in excess of the self -insured amount will be covered by California State Association of Counties- Excess Insurance Authority. All workers compensation coverage from July 1, 2015 forward will be provided by the Authority. Under the program, the Fire District has a $250,000 retention limit for workers compensation. The Authority covers workers compensation claims in excess of the $250,000 retention limit up to $5,000,000. The Local Agency Workers Compensation Excess Pool provides excess coverage to statutory limits. The Fire District pays an annual premium to the Authority and may share in any surplus revenues or may be required to pay additional assessments based upon the Authority's operating results. Effective July 1, 2015, the Fire District became a member of the Public Agency Risk Sharing Authority of California (Authority) for its workers compensation insurance and concurrently separated from the Public Agency Self -Insurance System (PASIS) of San Bernardino County. The Fire District will maintain reserves to cover its June 30, 2019 estimated claims liability for workers compensation up to its self -insured retention of $250,000. Claims in excess of the self -insured amount will be covered by California State Association of Counties- Excess Insurance Authority. All workers compensation coverage from July 1, 2015 forward will be provided by the Authority. Under the program, the Fire District has a $250,000 retention limit for workers compensation. The Authority covers workers compensation claims in excess of the $250,000 retention limit up to $5,000,000. The Local Agency Workers Compensation Excess Pool provides excess coverage to statutory limits. The Fire District pays an annual premium to the Authority and may share in any surplus revenues or may be required to pay additional assessments based upon the Authority's operating results. Financial statements of the Public Agency Risk Sharing Authority of California (PARSAC) may be obtained from its administrative office located at 1525 Response Road, Suite One, Sacramento, California, 95815; www.parsac.org; or by calling (916) 927-7727. The City and the Fire District are involved in litigation arising in the normal course of business. Although the legal responsibility and financial impact with respect to such litigation cannot be presently ascertained, based on information from the service agent and others involved with the administration of the programs, the City believes that the self-insurance commitment of $7,589,947 is adequate to cover such losses. The liability will be paid as it becomes due by the General Fund and the Fire District Fund. The following is a summary of the changes in the claims liability over the past two fiscal years for the City and the Fire District combined: Current Year Claims Fiscal Year Beginning and Changes in Ended Balance Estimates June 30, 2018 $ 4,414,483 June 30, 2019 3,518,873 Note 15: Commitments and Contingencies Claim Ending Payments Balance 563,504 $ (1,459,114) $ 3,518,873 1,439,791 (1,865,020) 3,093,644 The following schedule summarizes the major contractual commitments as of June 30, 2019: Expenditures to date as of June Remaining Project Name Contract Amount 30, 2019 Commitments Fiber Optic Network $ 11,863,998 $ 1,126,775 $ 10,737,223 95 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 16: Special Item Project costs incurred for the Base Line Road at 1-15 project that are to remain the City's capital assets have been capitalized as infrastructure and depreciated over the life of the capital asset. Other entities' project costs accumulated in construction in progress were expensed as of June 30, 2019, as they will be capitalized as part of those entities' financial statements. Management's allocation of project costs is generally based upon each entity's proportionate share of the infrastructure components of the project. This allocation was not able to be readily determined until the project's completion. As a result, the City expensed $36,406,951 of project costs during the year ended June 30, 2019. The provisions made to estimate the expenditures for the Base Line Road at 1-15 project reflect a special item during the fiscal period. Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 ("the Bill") that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Rancho Cucamonga that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the "successor agency" to hold the assets until they are distributed to other units of state and local government. On January 11, 2012, the City elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 12-001. After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill. Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City's position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) a. Cash and investments Cash and investments reported in the accompanying financial statements consisted of the following: Cash and investments $ 22,127,391 Cash and investments with fiscal agent 8,580 $ 22,135,971 b. Loans Receivable Notes and loans receivables consist of the following at June 30, 2019: On July 21, 2003, the Agency entered into a Disposition and Developer Agreement with Victoria Gardens, LLC. The Agency conveyed 147 acres generally located north of Foothill Boulevard, west of the 1-15 Freeway and east of Day Creek Road in the City of Rancho Cucamonga in order for the Developer to construct an open air mixed use complex. The Agency conveyed the site to the Developer upon the execution of a promissory note to pay a cumulative sum of $13,000,000 to the Agency over a term of thirty (30) years. The note stipulates the following payment structure: (1) the Developer shall make annual payments to the Agency equal to the amount required to amortize the excess return at the Agency's cost of funds; (2) the Developer shall pay the Agency fifteen percent (15%) of the difference between the net sale proceeds and the higher of the project cost, or the initial gross proceeds of any loan; and (3) the Developer shall pay the Agency fifteen percent (15%) of any positive net refinance proceeds. As of June 30, 2019, the outstanding balance was $10,827,671. c. Long -Term Debt A description of long-term debt outstanding (excluding defeased debt) of the Successor Agency as of June 30, 2019, follows: Tax Allocation Bonds Tax Allocation Refunding Bonds - 2007 Issue Tax Allocation Refunding Bonds - 2014 Issue Tax Allocation Refunding Bonds - 2016 Issue Total Bonds Developer Loans Bank of New York Total Developer Loans Total Balance Balance Due Within July 1, 2018 Additions Repayments June 30, 2019 One Year $ 62,640,000 $ $ 2,380,000 $ 60,260,000 $ 2,530,000 155,120,000 7,190,000 147,930,000 7,550,000 54,975,000 1,615,000 53,360,000 1,665,000 272,735,000 11,185,000 261,550,000 11,745,000 7,926,865 719,475 7,207,390 784,030 7,926,865 719,475 7,207,390 784,030 $ 280,661,865 $ $ 11,904,475 268,757,390 $ 12,529,030 Unamortized Premium 25,549,961 Total $ 294,307,351 97 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Tax Allocation Bonds Rancho Cucamonga Redevelopment Agency, Rancho Redevelopment Project, Housing Set -aside Tax Allocation Bonds, Tax Exempt Series 2007A and Taxable Series 2007B. $155,620,000. In November 2007, the Rancho Cucamonga Redevelopment Agency issued $73,305,000 Rancho Redevelopment Project Housing Set -Aside Tax Allocation Bonds Tax -Exempt Series 2007A and $82,315,000 Rancho Redevelopment Project Housing Set -Aside Tax Allocation Bonds Taxable series 2007B to (a) refund and redeem the Agency's outstanding Rancho Redevelopment Project 1996 Housing Set -Aside Tax Allocation Bonds, provide for the refunding and defeasance of the California Statewide Communities Development Authority Multifamily Housing Revenue Bonds, (c) extend set -aside and affordability restriction on 558 units within four apartment projects located in the City of Rancho Cucamonga pursuant to an Extended Affordability Agreement, and (d) finance other low and moderate income housing projects in or of benefit to the Project Area. The Series A issue consists of $29,950,000 in Serial bonds with maturities beginning September 1, 2008 through September 1, 2026, bearing interest ranging from 3.25% through 5.0%; and $43,355,000 in Term bonds due September 1, 2034, bearing interest at 5%. The Series B issue consists of $19,675,000 Term bonds due September 1, 2018, bearing interest at 5.529%; and $62,640,000 Term bonds due September 1, 2031, bearing interest at 6.262%. Interest on both Series A and B bonds is payable semi-annually on March 1 and September 1 of each year, commencing March 1, 2008. The 2007 bonds are secured and payable from Tax Revenues on a subordinate basis with respect to a Loan Agreement dated as of December 15, 1997, between the Agency, Northtown Housing Development Corporation and Pacific Life Insurance Company (Loan Payable -Bank of New York) — the Senior Loan. The Indenture does not permit additional senior obligations. The Agency is permitted under the Indenture to incur additional obligations — Parity Bonds — secured by a pledge of Tax Revenues on a parity basis with the pledge of Tax Revenues to the 2007 Bonds. Tax Revenues which secure the 2007 Bonds consist solely of the Housing Set -Aside. On July 20, 2016, the Successor Agency issued Tax Allocation Refunding Bonds, Series 2016 to refund the Series A. The refunding resulted in the recognition of an accounting loss of $2,716,427, however it reduced the total debt service payments by $14 million and an economic gain (the difference between the present values of the debt service payments on the old and new debt) of $11 million. The Taxable Series B Bonds are subject to optional redemption, on any date prior to their maturity. CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The balance at June 30, 2019, amounted to $60,260,000 plus unamortized bond premium of $269,685. The following schedule illustrates the debt service requirements to maturity for the 2007 Tax Allocation Refunding Bonds as of June 30, 2019: Year Ending June 30 Principal Interest 2020 $ 2,530,000 $ 3,694,267 2021 2,685,000 3,530,985 2022 2,855,000 3,357,528 2023 3,040,000 3,172,955 2024 3,225,000 2,976,798 2025-2029 27,280,000 11,001,395 2030-2034 18,645,000 1,203,400 Total $ 60,260,000 $ 28,937,328 If an Event of Default shall occur, then, and in each and every such case during the continuance of such Event of Default, the Trustee may, with the consent of the Insurer and if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding or if directed by the Insurer, the Trustee shall (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding, and (b) subject to the provisions of the Indenture, exercise any other remedies available to the Trustee and the bond owners in law or at equity. 2. Rancho Cucamonga Redevelopment Agency, Rancho Redevelopment Project Area Tax Allocation Refunding Bonds, Series 2014. $174,050,000. These bonds are dated July 15, 2014, and were issued to refinance certain obligations of the Project Area including the 1999 Tax Allocation Refunding Bonds, 2001 Tax Allocation Bonds and 2004 Tax Allocation Bonds. The Bonds will be payable from and secured by, designated property tax revenues (formerly tax increment revenues) related to the Rancho Redevelopment Project, which will consist of moneys deposited, from time to time, in the Redevelopment Property Tax Trust Fund ("RPTTF") established under the Dissolution Act, defined below, but exclude those amounts which were, prior to the Dissolution Act, required to be deposited into the Former Agency's Low and Moderate Income Housing Fund to the extent required to pay debt service on existing Housing Obligations. Interest is payable semi-annually on March 1 and September 1, of each year commencing March 1, 2015. The bonds mature in annual installments ranging from $2,750,000 to $14,235,000 starting September 1, 2015 to September 1, 2032, and bear interest ranging from 3% to 5%. The balance at June 30, 2019, amounted to $147,930,000 plus unamortized bond premium of $19,064,255 and unamortized gain on defeasance of $1,793,187. CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The following schedule illustrates the debt service requirements to maturity for the 2014 Tax Allocation Refunding Bonds as of June 30, 2019: Year Ending June 30 Principal Interest 2020 $ 7,550,000 $ 7,207,750 2021 7,925,000 6,820,875 2022 8,320,000 6,414,750 2023 8,735,000 5,988,375 2024 9,175,000 5,540,625 2025-2029 53,230,000 20,161,750 2030-2034 52,995,000 5,461,125 Total $ 147,930,000 $ 57,595,250 If an Event of Default has occurred and is continuing, the Trustee may (but only with the consent of the Insurer), and if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, the Trustee shall (but only with the consent of the Insurer), (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding, and (b) exercise any other remedies available to the Trustee and the bond owners in law or at equity. 3. Rancho Cucamonga Redevelopment Agency, Rancho Redevelopment Project Area Tax Allocation Refunding Bonds, Series 2016. $56,860,000. These bonds are dated October 5, 2016, and were issued to refinance certain obligations of the Rancho Redevelopment Project Housing Set -Aside Tax Allocation Bonds 2007 Series A. The Bonds will be payable from and secured by, designated property tax revenues (formerly tax increment revenues) related to the Rancho Redevelopment Project, which will consist of moneys deposited, from time to time, in the Redevelopment Property Tax Trust Fund ("RPTTF") established under the Dissolution Act, but exclude those amounts which were, prior to the Dissolution Act, required to be deposited into the Former Agency's Low and Moderate Income Housing Fund to the extent required to pay debt service on existing Housing Obligations. Interest is payable semi-annually on March 1 and September 1, of each year commencing March 1, 2017. The bonds mature in annual installments ranging from $1,615,000 to $10,060,000 starting September 1, 2017 to September 1, 2034, and bear interest ranging from 2% to 5%. The balance at June 30, 2019, amounted to $53,360,000 plus unamortized bond premium of $6,216,021 and unamortized loss on defeasance of $2,405,978. 100 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The following schedule illustrates the debt service requirements to maturity for the 2016 Tax Allocation Refunding Bonds as of June 30, 2019: Year Ending June 30 Principal Interest 2020 $ 1,665,000 $ 2,204,500 2021 1,735,000 2,136,500 2022 1,800,000 2,065,800 2023 1,870,000 1,983,050 2024 1,965,000 1,887,175 2025-2029 6,505,000 8,062,625 2030-2034 27,760,000 5,934,200 2035 10,060,000 201,200 Total $ 53,360,000 $ 24,475,050 If an Event of Default has occurred and is continuing, the Trustee may (but only with the consent of the Insurer), and if requested in writing by the Owners of a majority in aggregate principal amount of the Bonds then Outstanding the Trustee shall (but only with the consent of the Insurer), (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything in the Indenture or in the Bonds to the contrary notwithstanding, and (b) exercise any other remedies available to the Trustee and the bond owners on law or at equity. Developer Loans Payable On August 21, 1996, the Agency executed a note payable to Pacific Life Insurance Company (subsequently assigned to Bank of New York) in the amount of $9,411,477. The proceeds of the note were paid directly to Northtown Housing Development Corporation for the development of the Northtown Housing project. The outstanding principal bears interest at 8.78% compounding semi-annually from the date of the note until paid. Interest was added to the principal on each March 15 and September 15 through March 15, 2002, amounting to $4,210,264 in addition to principal. Commencing on September 15, 2002, both principal and interest shall be due and payable semi-annually on March 20 and September 20, of each year through March 2026. The balance at June 30, 2019, amounted to $7,207,390. The following schedule illustrates the debt service requirements to maturity for the Bank of New York loan as of June 30, 2019: Year Ending June 30 Principal 2019 $ 784,030 2020 854,379 2021 931,041 2022 1,014,580 2023 1,105,615 2024 - 2026 2,517,745 Total $ 7,207,390 Interest $ 615,970 545,621 468,959 385,420 284,385 282,255 $ 2,582,610 101 CITY OF RANCHO CUCAMONGA NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2019 Note 17: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) All outstanding principal and interest due under this note shall be due and payable in full on the earliest to occur of: March 15 , 2026, or the date of an event of default. Pledged Revenue The City pledged, as security for bonds issued, either directly or through the Financing Authority, a portion of tax increment revenue (including Low and Moderate Income Housing set -aside and pass through allocations) that it receives. The bonds issued were to provide financing for various capital projects, accomplish Low and Moderate Income Housing projects and to defease previously issued bonds. Assembly Bill 1X 26 provided that upon dissolution of the Redevelopment Agency, property taxes allocated to redevelopment agencies no longer are deemed tax increment but rather property tax revenues and will be allocated first to successor agencies to make payments on the indebtedness incurred by the dissolved redevelopment agency. Total principal and interest remaining on the debt is $382,347,628 with annual debt service requirements as indicated above. For the current year, the total property tax revenue recognized by the City for the payment of indebtedness incurred by the dissolved redevelopment agency was $26,431,518 and the debt service obligation on the bonds was $26,271,274. In July 1994, the Agency entered into an affordable housing Pledge Agreement with So Cal Housing which they could use to secure affordable housing units. In August 1996, the Agency approved Amendment No. 2 to the 1994 Original Pledge, to commit to pay $339,200 annually to the California Housing Finance Agency (CHFA) to benefit the required reserves for three affordable family housing developments up to November 2026. The balance of the commitment at June 30, 2019, is $2,544,000. d. Insurance The Successor Agency is covered under the City of Rancho Cucamonga's insurance policies. Therefore, the limitation and self -insured retentions applicable to the City also apply to the Successor Agency. Additional information as to coverage and self -insured retentions can be found in Note 12. e. Participation Agreements In August 2005, the Agency entered into a real estate tax, sales tax, tax increment and business license tax participation agreement with Bass Outdoor World, LLC (Bass Pro), 80 VGL, LLC and 20 VGL, LLC (80 VGL, LLC and 20 VGL, LLC are collectively referred to as Landlord). Under the terms of the agreement, the Agency is required to make annual payments equal to one hundred percent (100%) of the tax increment revenues, sales tax revenues and business license tax paid during each year. However, Landlord has the priority for reimbursements of real estate taxes paid for each year prior to any payments being made to Bass Pro. The total amount paid to Landlord and Bass Pro shall not exceed $1,100,000 in any given year. The agreement terminates in fiscal year 2032-2033. However, due to ERAF payment made, the agreement was extended to December 2034. During the year ended June 30, 2019, the Agency made payments totaling $610,222. 102 REQUIRED SUPPLEMENTARY INFORMATION 103 CITY OF RANCHO CUCAMONGA NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2019 Budgetary Comparison Information a. Budget Data General Budaet Policies The annual budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and the means of financing them. The City Council approves each year's budget submitted by the City Manager prior to the beginning of the new fiscal year. The Council conducts budget study sessions prior to holding a public hearing to adopt the budget. When required during the period, the Council also approves supplemental appropriations. There were several supplemental appropriations required during the year. A comprehensive update to budgeted figures occurs once per year as part of the Amended Budget process which is presented to the Council in May each fiscal year for approval. There were no significant non -budgeted financial activities during the year. The City Council may transfer funds between funds or activities set forth in the budget. The City Manager may transfer funds between line items within an appropriation as set forth in the budget and may transfer appropriations between activities within any fund. The level of budgetary control (that is the level at which expenditures cannot legally exceed the appropriated amount) is established at the fund level within the General Fund, Special Revenue Funds, Capital Project Funds and Debt Service Funds. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in process at year-end are completed. They do not constitute expenditures or estimated liabilities. Basis of Budgeting Budgets for governmental funds are adopted on a basis consistent with generally accepted accounting principles (GAAP) except that for budgeting purposes only encumbrances are treated as expenditures. A reconciliation has been provided on the applicable schedule when the basis of budgeting differs from GAAP. For the fiscal year ended June 30, 2019, the SB 140 fund and the Energy Efficient and Conservation Block Grant fund had no adopted annual budgets due to the timing of the usage of these funds. Money will be budgeted as needed based on specific projects. 104 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) GENERAL FUND YEAR ENDED JUNE 30, 2019 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ 115,082,093 $ 115,082,093 $ 115,082,093 $ - Resources (Inflows): Taxes 70,588,230 71,336,260 72,418,242 1,081,982 Licenses and permits 4,316,210 4,315,000 4,681,116 366,116 Intergovernmental 523,610 656,650 595,600 (61,050) Charges for services 3,446,040 4,855,770 5,272,230 416,460 Use of money and property 1,785,430 1,703,310 3,444,783 1,741,473 Fines and forfeitures 1,345,250 1,430,180 1,669,472 239,292 Contributions 86,660 119,160 124,459 5,299 Miscellaneous 2,539,990 3,649,290 4,493,260 843,970 Transfers in 1,578,680 1,811,950 1,811,950 - Proceeds from sale of capital asset 50,070 64,300 59,417 (4,883) Amounts Available for Appropriations 201,342,263 205,023,963 209,652,622 4,628,659 Charges to Appropriations (Outflow): General government General overhead 2,574,830 3,810,990 3,327,806 483,184 Personnel overhead 1,048,620 1,738,340 1,811,813 (73,473) City council 126,720 117,740 117,720 20 City management 957,580 914,110 902,829 11,281 City clerk 1,970 2,000 1,970 30 Administrative services 292,650 292,920 278,494 14,426 Business licenses 361,430 323,500 317,804 5,696 City facilities 1,068,930 1,176,020 972,676 203,344 Finance 1,471,820 1,420,690 1,395,819 24,871 Innovation and technology 3,946,600 4,060,930 3,825,369 235,561 Personnel 708,290 766,350 747,737 18,613 Procurement 256,070 266,520 261,559 4,961 Risk management 274,040 269,970 244,388 25,582 Treasury management 12,390 12,330 10,928 1,402 Communications 272,160 212,890 178,849 34,041 Records management 580,390 434,270 432,922 1,348 Healthy RC Program 595,640 590,230 580,010 10,220 Public safety - police Sheriff contract services 40,312,660 40,737,160 39,754,251 982,909 Public safety - animal center Animal center 3,325,790 3,304,420 3,230,781 73,639 Community development Planning 1,632,150 2,882,730 2,782,126 100,604 Planning commission 23,880 18,790 17,476 1,314 Community improvement 721,650 679,500 621,156 58,344 Administration 1,201,320 1,416,790 1,257,521 159,269 Building and safety 1,932,690 1,858,760 1,759,152 99,608 Community services Administration 5,232,070 5,080,640 4,743,344 337,296 Engineering and public works Engineering administration 615,010 651,060 610,297 40,763 Development management 888,810 909,200 868,993 40,207 NPDES 384,650 381,350 371,617 9,733 Project management 488,090 512,460 484,524 27,936 Traffic management 335,930 194,060 192,929 1,131 Park maintenance 3,261,010 3,226,760 2,730,749 496,011 Vehicle and equipment maintenance 1,071,050 979,540 943,245 36,295 City facilities maintenance 3,871,380 3,812,350 3,317,453 494,897 Street maintenance 2,302,840 2,370,670 2,115,452 255,218 Fire facilities maintenance 252,420 239,180 231,865 7,315 Capital outlay 8,078,780 11,150,045 7,396,478 3,753,567 Transfers out 2,997,100 3,213,270 4,524,521 (1,311,251) Total Charges to Appropriations 93,479,410 100,028,535 93,362,623 6,665,912 Budgetary Fund Balance, June 30 (Budgetary Basis) $ 107,862,853 $ 104,995,428 116,289,999 $ 11,294,571 Encumbrances 2,490,846 Budgetary Fund Balance, June 30 (GAAP Basis) $ 118,780,845 105 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) DEVELOPMENT IMPACT FEES YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Charges for services Use of money and property Developer participation Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 44,741,927 $ 44,741,927 $ 44,741,927 $ - - - 332,553 332,553 105,000 232,180 380,872 148,692 696,520 897,560 1,723,545 825,985 4,640,000 10,036,200 13,274,348 3,238,148 - - 14,277 14,277 50,183,447 55,907,867 60,467,522 4,559,655 135,810 135,080 130,327 4,753 1,151,410 1,348,920 1,062,288 286,632 5,781,750 9,676,130 4,266,911 5,409,219 7,068,970 11,160,130 5,459,526 5,700,604 $ 43,114,477 $ 44,747,737 55,007,996 $ 10,260,259 809,518 $ 55,817,514 1: CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LIGHTING DISTRICTS YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Use of money and property Developer participation Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Capital outlay Debt service: Interest and fiscal charges Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $(6,956,936) $ (6,956,936) $ (6,956,936) $ - 2,091,670 2,091,670 2,092,944 1,274 65,360 94,830 197,954 103,124 2,430 2,430 96 (2,334) - - 722,109 722,109 251,010 373,420 373,420 - (4,546,466) (4,394,586) (3,570,413) 824,173 1,546,830 2,100,240 1,872,015 228,225 120,000 207,120 146,098 61,022 123,430 124,860 124,817 43 - 125,000 125,000 - 1,790,260 2,557,220 2,267,930 289,290 $(6,336,726) $ (6,951,806) (5,838,343) $ 1,113,463 251,238 $ (5,587,105) 107 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) HOUSING SUCCESSOR AGENCY YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 135,900,697 $ 135,900,697 $ 135,900,697 $ 94,660 155,480 4,067,934 3,912,454 12,000 12,000 340,438 328,438 136,007,357 136,068,177 140,309,069 4,240,892 280,850 376,870 376,025 845 4,200,000 8,700,000 - 8,700,000 4,480,850 9,076,870 376,025 8,700,845 $ 131,526,507 $ 126,991,307 139,933,044 $ 12,941,737 Budgetary Fund Balance, June 30 (GAAP Basis) $ 139,933,044 108 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) FIRE DISTRICT YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Transfers in Proceeds from sale of capital asset Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety - fire protection Capital outlay Debt service: Principal retirement Interest and fiscal charges Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 64,861,527 $64,861,527 $64,861,527 $ - 40,762,860 41,996,360 42,000,893 4,533 16,500 16,500 16,141 (359) - 10,000 10,000 - 4,320 5,140 2,066 (3,074) 1,025,290 992,320 2,374,649 1,382,329 74,000 181,000 158,624 (22,376) 1,568,320 1,591,750 1,599,482 7,732 - 3,230 3,230 - - - 1,321 1,321 108,312, 817 109,657, 827 111,027,933 1,370,106 34,834,010 34,326,990 32,247,382 2,079,608 13,696,610 16,106,540 4,990,704 11,115,836 322,830 322,830 - 322,830 77,830 77,830 77,830 - - 158,630 158,630 - 48,931,280 50,992,820 37,474,546 13,518,274 $ 59,381,537 $58,665,007 73,553,387 $ 14,888,380 2,490,093 $ 76,043,480 109 CITY OF RANCHO CUCAMONGA MISCELLANEOUS PLAN - AGENT MULTIPLE -EMPLOYER SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 TOTAL PENSION LIABILITY Service Cost $ 4,661,973 $ 4,342,707 $ 4,193,507 $ 4,743,810 $ 4,869,644 Interest 12,370, 506 12, 931,479 13,651, 750 14, 301,966 15,134,775 Difference between Expected and Actual Experience - (3,882,722) (1,557,585) (1,926,722) (1,496,029) Changes in Assumptions (3,352,733) - 12,495,866 2,212,199 Benefit Payments, Including Refunds of Employee Contributions (5,229,846) (5,847,197) (6,606,205) (7,626,368) (8,728,016) Net Change in Total Pension Liability 11,802,633 4,191,534 9,681,467 21,988,552 11,992,573 Total Pension Liability - Beginning 165,224,012 177,026,645 181,218,179 190,899,646 212,888,198 Total Pension Liability - Ending (a) $ 177,026,645 $ 181,218,179 $ 190,899,646 $ 212,888,198 $ 224,880,771 PLAN FIDUCIARY NET POSITION Contributions - Employer $ 3,520,721 $ 3,433,074 $ 3,745,698 $ 4,207,753 $ 4,622,851 Contributions - Employee 2,156,312 2,074,191 2,120,443 2,150,126 2,032,448 Net Investment Income 21,772,350 3,320,843 782,082 16,691,043 13,809,497 Benefit Payments, Including Refunds of Employee Contributions (5,229,846) (5,847,197) (6,606,205) (7,626,368) (8,728,016) Administrative Expense (168,508) (91,249) (220,985) (256,923) Net Plan to Plan Resource Movement (407) Other Miscellaneous Income/(Expense) - - - 242,458 Net Change in Fiduciary Net Position 22,219,537 2,812,403 (49,231) 15,201,569 11,721,908 Plan Fiduciary Net Position - Beginning 124,692,088 146,911,625 149,724,028 149,674,797 164,876,366 Plan Fiduciary Net Position - Ending (b) $ 146,911,625 $ 149,724,028 $ 149,6749797 $ 164,876,366 $ 176,598,274 Plan Net Pension Liability/(Assets) - Ending (a) - (b) $ 3051159020 $ 31,494,151 $ 41,224,849 $ 48,011,832 $ 48,282,497 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 82.99% 82.62% 78.40% 77.45% 78.53% Covered Payroll $ 2558199515 $ 25,0825858 $ 25,682,090 $ 26,459,567 $ 27,268,038 Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll 116.64% 125.56% 160.52% 181.45% 177.07% (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only five years are shown. Notes to Schedule: Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2016 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. 110 CITY OF RANCHO CUCAMONGA MISCELLANEOUS PLAN - AGENT MULTIPLE -EMPLOYER SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 Actuarially Determined Contribution $ 3,433,074 $ 3,745,756 $ 4,192,505 $ 4,642,132 $ 5,135,066 Contribution in Relation to the Actuarially Determined Contribution (3,433,074) (3,745,756) (4,192,505) (4,642,132) (5,135,066) Contribution Deficiency (Excess) $ - $ - $ - $ - $ Covered Payroll $ 25,082,858 $ 25,682,090 $ 26,459,567 $ 27,268,038 $ 27,077,712 Contributions as a Percentage of Covered Payroll 13.69% 14.59% 15.84% 17.02% 18.96% (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only five years are shown. Note to Schedule: Valuation Date: June 30, 2017 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal Cost Method Amortization method Level percentage of payroll, closed Assets valuation method Market Value Discount rate 7.15% (net of administrative expenses) Projected Salary Increases 3.30% to 14.20% depending on Age, Service, and type of employment Inflation 2.75% Payroll growth 3.00% Individual salary growth A merit scale varying by duration of employment coupled with an assumed annual inflation of 2.75% and an annual production growth of 0.25%. 111 CITY OF RANCHO CUCAMONGA COST SHARING MULTIPLE -EMPLOYER PLAN - MISCELLANEOUS RATE PLAN SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 Proportion of the Net Pension Liability 0.02166% 0.02652% 0.06568% 0.06723% 0.06897% Proportionate Share of the Net Pension Liability $ 1,348,194 $ 1,819,909 $ 2,281,501 $ 2,650,258 $ 2,599,301 Covered Payroll $ 1,474,657 $ 1,437,227 $ 1,524,047 $ 1,577,007 $ 1,619,191 Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll 91.42% 126.63% 149.70% 168.06% 160.53% Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 79.82% 78.40% 75.87% 75.39% 75.39% Notes to Schedule: Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2016 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only five years are shown. 112 CITY OF RANCHO CUCAMONGA COST SHARING MULTIPLE -EMPLOYER PLAN - MISCELLANEOUS RATE PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 Actuarially Determined Contribution $ 210,430 $ 219,901 $ 238,202 $ 254,681 $ 283,247 Contribution in Relation to the Actuarially Determined Contribution (210,430) (219,901) (238,202) (254,681) (283,247) Contribution Deficiency (Excess) $ - $ - $ - $ - $ Covered Payroll $ 1,437,227 $ 1,524,047 $ 1,577,007 $ 1,619,191 $ 1,593,099 Contributions as a Percentage of Covered Payroll 14.64% 14.43% 15.10% 15.73% 17.78% (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only five years are shown. Note to Schedule: Valuation Date: Methods and assumptions used to determine contribution rates: Actuarial Cost Method Amortization method Assets valuation method Discount Rate Projected Salary Increases Inflation Payroll Growth Individual Salary Growth June 30, 2017 Entry Age Normal Cost Method Level percentage of payroll, closed Market Value 7.15% (net of administrative expenses) 3.00% 2.75% 3.00% A merit scale varying by duration of employment coupled with an assumed annual inflation of 2.75% and an annual production growth of 0.25%. 113 CITY OF RANCHO CUCAMONGA COST SHARING MULTIPLE -EMPLOYER PLAN - SAFETY RATE PLAN SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) Proportion of the Net Pension Liability Proportionate Share of the Net Pension Liability Covered Payroll Proportionate Share of the Net Pension Liability as Percentage of Covered Payroll Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 2015 2016 2017 2018 2019 0.31131 % 0.33146% 0.57027% 0.57286% 0.59184% $ 19,373,864 $ 22,750,560 $ 29,535,666 $ 34,229,524 $ 34,726,501 $ 10,396,960 $ 10,554,523 $ 11,373,722 $ 11,451,394 $ 11,663,014 186.34% 215.55% 259.68% 298.91 % 297.75% 79.82% 78.40% 72.69% 71.74% 71.74% Notes to Schedule: Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2016 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate. (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only five years are shown. 114 CITY OF RANCHO CUCAMONGA COST SHARING MULTIPLE -EMPLOYER PLAN - SAFETY RATE PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 2017 2018 2019 Actuarially Determined Contribution $ 2,827,842 $ 3,007,980 $ 3,273,056 $ 3,577,900 $ 4,101,079 Contribution in Relation to the Actuarially Determined Contribution (2,827,842) (3,007,980) (3,273,056) (3,577,900) (4,101,079) Contribution Deficiency (Excess) $ - $ - $ - $ - $ Covered Payroll $ 10,554,523 $ 11,373,722 $ 11,451,394 $ 11,663,014 $ 12,029,495 Contributions as a Percentage of Covered Payroll 26.79% 26.45% 28.58% 30.68% 34.09% (1) Historical information is required only for measurement years for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only five years are shown. Note to Schedule: Valuation Date: Methods and assumptions used to determine contribution rates: Actuarial Cost Method Amortization method Assets valuation method Discount Rate Projected Salary Increases Inflation Payroll Growth Individual Salary Growth June 30, 2017 Entry Age Normal Cost Method Level percentage of payroll, closed Market Value 7.15% (net of administrative expenses) 3.00% 2.75% 3.00% A merit scale varying by duration of employment coupled with an assumed annual inflation of 2.75% and an annual production growth of 0.25%. 115 CITY OF RANCHO CUCAMONGA PARS RETIREMENT ENHANCEMENT PLAN SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) TOTAL PENSION LIABILITY Service Cost Interest Changes of Benefits Terms Difference Between Expected and Actual Experience Changes in Assumptions Changes in Benefit Terms Benefit Payments, Including Refunds of Employee Contributions Net Change in Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending (a) PLAN FIDUCIARY NET POSITION Contribution - Employer Net Investment Income Benefit Payments, Including Refunds of Employee Contributions Other Changes in Fiduciary Net Position Net Change in Fiduciary Net Position Plan Fiduciary Net Position - Beginning Plan Fiduciary Net Position - Ending (b) Plan Net Pension Liability/(Assets) - Ending (a) - (b) 2015 2016 2017 2018 2019 $ 719,000 $ 743,000 $ 716,000 $ 774,673 $ 736,116 1,329,000 1,425,000 1,523,000 1,639,815 1,731,246 - - 538,000 - - (110,000) (1,975,546) 2,100,000 (683, 589) - (4,236) (323,105) (495,000) (546,000) (631,000) (719,919) (837,663) 1,553,000 1,622,000 4,136,000 1,690,333 (1,352,541) 20,790,000 22,343,000 23,965,000 28,101,000 29,791,333 $ 22,343,000 $ 23,965,000 $ 28,101,000 $ 29,791,333 $ 28,438,792 $ 497,000 $ 467,000 $ 312,000 $ 279,830 $ 657,424 3,177,000 660,000 21,000 2,872,446 1,865,280 (495,000) (546,000) (631,000) (719,919) (837,663) (33,000) (47,000) (35,000) (52,639) (39,500) 3,146,000 534,000 (333,000) 2,379,718 1,645,541 24,536,000 27,682,000 28,216,000 27,883,000 30,262,718 $ 27,682,000 $ 28,216,000 $ 27,883,000 $ 30,262,718 $ 31,908,259 $ (5,339,000) $ (4,251,000) $ 218,000 $ (471,385) $ (3,469,467) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 123.90% 117.74% 99.22% 101.58% 112.20% Covered Payroll $ 24,363,588 $ 22,739,613 $ 21,593,214 $ 19,909,987 $ 18,246,690 Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll-21.91%-18.69% 1.01% -2.37%-19.01% (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only five years are shown. Notes to Schedule: Benefit Changes: The Benefit Factor used to determine the City Manager's benefit was changed to 0.5% beginning at age 55 instead of age 60. Changes of Assumptions: The discount rate was updated from 5.75% to 6.00%, the demographic assumptions were updated to CalPERS 1997-2015 Experience Study, and the mortality improvement scale was updated to Society of Actuaries Scale 116 CITY OF RANCHO CUCAMONGA PARS RETIREMENT ENHANCEMENT PLAN SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) Actuarially Determined Contribution Contribution in Relation to the Actuarially Determined Contribution Contribution Deficiency (Excess) Covered Payroll Contributions as a Percentage of Covered Payroll (2) 2015 2016 2017 2018 2019 $ 467,000 $ 307,590 $ 278,740 $ 657,424 $ 628,911 (467,000) (307,590) (278,740) (657,424) (628,911) $22,739,613 $21,593,214 $19,909,987 $ 18,246,690 $ 16,119,382 2.05% 1.42% 1.40% 3.60% 3.90% (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only five years are shown. (2) Due to timing differences for when the plan recognizes contributions and a change in the actuarially determined contribution rate from 1.40% to 3.90% during the fiscal year, the rate does not report the actuarially determined rate of 3.90% for 2018. Note to Schedule: Valuation Date: June 30, 2018 Methods and assumptions used to determine contribution rates: Actuarial cost method Aggregate Cost Amortization method Level -dollar Amortization period 11-year fixed period Assets valuation method Actuarial value of assets Discount rate 6.00% Inflation 2.75% Salary Increases 4.5% average, including inflation of 3.0% Investment rate of return 6.00% net of pension investment and administrative expenses, including inflation. Retirement age CaIPERS 1997-2015 Experience Study Mortality CaIPERS 1997-2015 Experience Study 117 CITY OF RANCHO CUCAMONGA SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) Total OPEB Liability Service cost Interest on the total OPEB liability Actual and expected experience difference Changes in assumptions Changes in benefit terms Benefit payments Net change in total OPEB liability Total OPEB liability - beginning Total OPEB liability - ending (a) Plan Fiduciary Net Position Contribution - employer Net investment income Benefit payments Administrative expense Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending (b) Net OPEB Liability/(Assets) - ending (a) - (b) Plan fiduciary net position as a percentage of the total OPEB liability Covered -employee payroll Net OPEB liability as a percentage of covered -employee payroll 2018 2019 $ 400,000 $ 412,316 1,516,000 1,562, 020 (1,046,000) (1,143,902) 870,000 830,434 27,688,000 28,558,000 $ 28,558,000 $ 29,388,434 $ 281,000 $ 998,969 1,429,000 1,339,488 (1,046,000) (1,143,902) (14,000) (52,080) 650,000 1,142,475 27,617,000 28,267,000 $ 28,267,000 $ 29,409,475 $ 291,000 $ (21,041) 98.98% 100.07% $ 15,842,421 $ 16,635,534 1.84% -0.13% (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. Notes to Schedule: None Changes in assumptions: None 118 CITY OF RANCHO CUCAMONGA SCHEDULE OF CONTRIBUTIONS - OPEB AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2018 2019 Actuarially Determined Contribution $ 998,969 $ 469,195 Contribution in Relation to the Actuarially Determined Contributions (998,969) (469,195) Contribution Deficiency (Excess) $ - $ Covered -employee payroll $ 16,635,534 $ 16,440,813 Contributions as a percentage of covered -employee payroll 6.01% 2.85% (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. Methods and assumptions used to determine contributions: Valuation Date June 30, 2017 Actuarial Cost Method Entry Age, level percentage of payroll Amortization Valuation Method/Period Level percent of payroll over a closed 30-year period starting 2016/17 Asset Valuation Method Investment gains/losses spread over 5-year rolling period with 20% market value corridor Discount Rate 5.50% General Inflation 3.00% Payroll Growth 3% per annum, in aggregate Mortality, Disability, Termination, Retirement CalPERS 1997-2011 Experience Study Medical Trend Pre -Medicare - 6.5% for 2018, decreasing to 5.0% for 2021 and later Medicare - 6.7% for 2018, decreasing to 5.0% for 2021 and later Other Assumptions See our actuarial valuation report dated 10/18/16 119 CITY OF RANCHO CUCAMONGA Non -Major Governmental Funds Special Revenue Funds Special Revenue Funds account for revenues derived from specific sources which are required by law or administrative regulation to be accounted for in a separated fund. Funds included are: Gas Tax Fund - Established to account for the receipts and disbursements of the state gas tax allocations to fund road construction and maintenance of the City network system. Recreation Fund - Established to account for the receipts and disbursements for community classes, special events, and activities that are sponsored by the Community Services Department, as well as, state and local grants which provide funding for related community services or facilities. Beautification Fund - Established to account for receipts from development projects to provide proper landscaping and irrigation systems after the construction of parkway and median improvements. Landscape Maintenance Fund - Established to account for receipts of special assessments which are restricted for providing landscape maintenance within specified geographical boundaries. Pedestrian Grant Fund - Established to account for the receipts and disbursements of county entitlement funds for the construction of public facilities for the exclusive use of pedestrians and bicycles. Community Development Block Grant Fund - Established to account for Federal grant funding from the Department of Housing and Urban Development under the Housing and Community Development Act of 1974, as amended. Assessment Administration Fund - Established to account for the administration of the various special districts within the City. SB 140 Fund - Established to account for the receipt and disbursement of state matching funds that are restricted for the construction of eligible street construction projects. Air Quality Improvement Fund - Established to account for the receipt and disbursement of funds received from the South Coast Air Quality Management District as a result of Assembly Bill 2766. Masi Commerce Center Fund - Established to acquire the necessary infrastructure from the developer after the completion and acceptance of the approved improvements. Financing was provided by the sale of bonds pursuant to the provisions of the Improvement Act of 1915. Measure I Fund - Established to account for the receipts and disbursements of the City's allocation of the half -cent sales tax collected throughout San Bernardino County for local street construction and maintenance. Library Services Fund - Established to account for the receipts and disbursements for library -related services provided by the City of Rancho Cucamonga Library. Funding for this service is made possible through a transfer of San Bernardino County library property tax revenues to the City of Rancho Cucamonga for library purposes. 120 CITY OF RANCHO CUCAMONGA Non -Major Governmental Funds Special Revenue Funds (Continued) Public Safety Grants Fund - Established to account for the receipts and disbursements of miscellaneous state, local, and Federal grant monies. These receipts are restricted for law enforcement and public safety -related expenditures. Used Oil Recycling Fund - Established to account for the receipts and disbursements of the state grant monies for the purpose of establishing and administering used oil collection programs. These receipts are restricted for oil recycling collection and educational programs. Library Services Grants Fund - Established to account for the receipts and disbursements of miscellaneous state, local, and Federal grant monies not accounted for in other funds. These receipts are restricted for library -related expenditures. AB 2928 Traffic Congestion Relief Fund - Established fund to account for the receipts and disbursements of funds received as a result of Assembly Bill 2928. These receipts are restricted for transportation projects that relieve congestion, connect transportation systems, and provide better goods movement. Litter Reduction Grant Fund - Established to account for the receipts and disbursements of the state grant monies that are used for the collection and recycling of beverage containers at large venues, public areas, residential communities or schools. Energy Efficiency and Conservation Block Grant (EECBG) Fund - Established to account for the receipts and disbursements of Federal grant monies received through the U.S. Department of Energy under the EECBG program. The receipts are restricted for funding projects that reduce energy consumption and promote energy efficiency. SAFETEA-LU Grant Fund - Established to account for the receipts and disbursements of Federal grant monies received from the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) from the Department of Transportation. The receipts are restricted for funding highways, highway safety, and public transportation projects. Underground Utilities Fund - Established to account for fees collected from developments for future undergrounding of overhead utilities. Safe Routes to School Program Fund - Established to account for the receipts and disbursements of Federal grant monies passed -through the State of California. These receipts are restricted for transportation projects that increase the safety of pedestrians and bicyclists. Citywide Infrastructure Improvement Fund - Established to account for capital improvement project reimbursements, primarily from the San Bernardino County Transportation Authority, to provide funds that will be used for general infrastructure throughout the City. Proposition 1 B Fund — Established to account for the receipts and disbursements of Proposition 1 B and Proposition 1 B State -Local Partnership Program (SLPP) funds which provide for the maintenance and improvement of local transportation facilities. This fund is allocated to the City by the California Transportation Commission. Public Resource Grants Fund - Established to account for the receipts from various sources for the Healthy Cities concept, which provides an integrated and holistic approach to improving the overall quality of life in the community. 121 CITY OF RANCHO CUCAMONGA Non -Major Governmental Funds Special Revenue Funds (Continued) Integrated Waste Management Fund - Established to account for receipts from Assembly Bill 939 which are generated from refuse haulers. These receipts are restricted for providing funding for the disposal of household hazardous waste. SB1 - TCEP Fund — Established to account for the receipts and disbursements of SB 1 Trade Corridor Enhancement Program (TCEP) funds which provide for the design and construction of the Etiwanda Grade Separation Project. Capital Projects Funds Capital Projects Fund - Established to account for major capital improvement projects not accounted for in other funds. 122 THIS PAGE INTENTIONALLY LEFT BLANK 123 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Landscape Maintenance Gas Tax Recreation Beautification Districts Assets: Cash and investments $ 10,615,093 $ 3,446,206 $ 1,084,343 $ 20,508,112 Receivables: Accounts 306,044 540,457 - 51,967 Taxes - - - 73,963 Accrued interest 34,866 12,018 3,880 66,316 Other loans - - - - Grants - - Prepaid costs 361 38,182 - Deposits - 12,231 Due from other funds 3,586 - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 10,959,950 $ 4,049,094 $ 1,088,223 $ 20,700,358 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 94,722 $ 464,173 $ 119,171 $ 703,600 Accrued liabilities 59,756 128,726 - 101,846 Unearned revenues - 681,321 - Deposits payable - 20,852 Due to other governments - - Due to other funds - - - - Total Liabilities 154,478 1,295,072 119,171 805,446 Deferred Inflows of Resources: Unavailable revenues - 666 - - Total Deferred Inflows of Resources 666 Fund Balances: Nonspendable: Prepaid costs 361 38,682 - Deposits - 12,231 Restricted for: Community development projects - - Public safety - police - - Parks and recreation - 2,702,443 - Engineering and public works 10,805,111 - 969,052 Capital improvement projects - - Underground utilities - - Landscape maintenance - 19,894,912 Library services - - Unassigned - - - - Total Fund Balances 10,805,472 2,753,356 969,052 19,894,912 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 10,959,950 $ 4,049,094 $ 1,088,223 $ 20,700,358 124 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 (CONTINUED) Special Revenue Funds Community Pedestrian Development Assessment Grant Block Grant Administration SB 140 Assets: Cash and investments $ - $ 184,735 $ 554,536 $ 36,736 Receivables: Accounts 36,838 - - - Taxes - - - Accrued interest - 3,282 - Other loans 1,305,517 - - Grants 777,549 - - Prepaid costs - - - Deposits - - Due from other funds - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 36,838 $ 2,267,801 $ 557,818 $ 36,736 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ - $ 265,807 $ 3,131 $ - Accrued liabilities - 8,810 7,575 - Unearned revenues - - - - Deposits payable - - - - Due to other governments - 551,404 - - Due to other funds 36,838 - - - Total Liabilities 36,838 826,021 10,706 - Deferred Inflows of Resources: Unavailable revenues - 169,713 - - Total Deferred Inflows of Resources - 169,713 - - Fund Balances: Nonspendable: Prepaid costs - - - Deposits - - - - Restricted for: Community development projects - 1,272,067 547,112 - Public safety - police - - - - Parks and recreation - - - Engineering and public works - - 36,736 Capital improvement projects - - - Underground utilities - - - Landscape maintenance - - - Library services - - - Unassigned - - - - Total Fund Balances - 1,272,067 547,112 36,736 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 36,838 $ 2,267,801 $ 557,818 $ 36,736 125 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Masi Air Quality Commerce Library Improvement Center Measure I Services Assets: Cash and investments $ 701,901 $ 11,105 $ 4,248,197 $ 7,799,247 Receivables: Accounts 59,408 - 393,982 35,803 Taxes - - 567,840 33,311 Accrued interest 3,485 39 15,319 25,310 Other loans - - - - Grants - - Prepaid costs - 2,173 Deposits - - Due from other funds - - 2,685 Restricted assets: Cash and investments with fiscal agents - 297,848 - - Total Assets $ 764,794 $ 308,992 $ 5,225,338 $ 7,898,529 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 74,604 $ - $ 486,412 $ 229,789 Accrued liabilities - 12,182 134,176 Unearned revenues - - Deposits payable 15 Due to other governments - Due to other funds - - - Total Liabilities 74,604 498,594 363,980 Deferred Inflows of Resources: Unavailable revenues - 258,976 - Total Deferred Inflows of Resources 258,976 Fund Balances: Nonspendable: Prepaid costs 2,173 Deposits - - Restricted for: Community development projects 690,190 - - Public safety - police - - Parks and recreation - - Engineering and public works 4,467,768 - Capital improvement projects 308,992 - 822,572 Underground utilities - - - Landscape maintenance - - Library services - 6,709,804 Unassigned - - - - Total Fund Balances 690,190 308,992 4,467,768 7,534,549 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 764,794 $ 308,992 $ 5,225,338 $ 7,898,529 126 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 (CONTINUED) Special Revenue Funds AB 2928 Library Traffic Public Safety Used Oil Services Congestion Grants Recycling Grants Relief Assets: Cash and investments $ 779,966 $ 45,434 $ 437,884 $ 294,461 Receivables: Accounts - - - - Taxes - - - - Accrued interest 270 87 907 - Other loans - - - - Grants - - - - Prepaid costs 500 - - - Deposits - - - 24 Due from other funds - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 780,736 $ 45,521 $ 438,791 $ 294,485 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ - $ - $ 1,186 $ - Accrued liabilities - 1,931 - - Unearned revenues 57,130 - 14,743 - Deposits payable - - - - Due to other governments - - - - Due to other funds - - - - Total Liabilities 57,130 1,931 15,929 - Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Nonspendable: Prepaid costs - - - - Deposits - - - 24 Restricted for: Community development projects - - - - Public safety - police 723,606 - - - Parks and recreation - - - - Engineering and public works - 43,590 - 294,461 Capital improvement projects - - - - Underground utilities - - - - Landscape maintenance - - - - Library services - - 422,862 - Unassigned - - - - Total Fund Balances 723,606 43,590 422,862 294,485 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 780,736 $ 45,521 $ 438,791 $ 294,485 127 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Special Revenue Funds Energy Litter Efficiency and Reduction Conservation SAFETEA-LU Underground Grant Block Grant Grant Utilities Assets: Cash and investments $ 53,217 $ 404 $ 11,587 $ 11,022,858 Receivables: Accounts - - - - Taxes - - - - Accrued interest - - 78 38,997 Other loans - 237,669 - - Grants - - - - Prepaid costs - - - - Deposits - - - - Due from other funds - - - 4,673 Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 53,217 $ 238,073 $ 11,665 $ 11,066,528 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 93 $ - $ - $ 104,331 Accrued liabilities 82 500 - - Unearned revenues - - 11,665 - Deposits payable - - - - Due to other governments - 237,669 - - Due to other funds - - - - Total Liabilities 175 238,169 11,665 104,331 Deferred Inflows of Resources: Unavailable revenues - - - - Total Deferred Inflows of Resources - - - - Fund Balances: Nonspendable: Prepaid costs - - - - Deposits - - - - Restricted for: Community development projects 53,042 - - - Public safety - police - - - - Parks and recreation - - - - Engineering and public works - - - - Capital improvement projects - - - - Underground utilities - - - 10,962,197 Landscape maintenance - - - - Library services - - - - Unassigned - (96) - - Total Fund Balances 53,042 (96) - 10,962,197 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 53,217 $ 238,073 $ 11,665 $ 11,066,528 128 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 (CONTINUED) Special Revenue Funds Safe Routes Citywide Public to School Infrastructure Proposition Resource Program Improvement 1B Grants Assets: Cash and investments $ $ 24,208,427 $ 253,971 $ 5,081 Receivables: Accounts 198,515 - 5,700 Taxes - - - Accrued interest 85,649 898 Other loans - - - Grants 12,346 Prepaid costs - - Deposits - - - Due from other funds - 10,264 - Restricted assets: Cash and investments with fiscal agents - - - - Total Assets $ 12,346 $ 24,502,855 $ 254,869 $ 10,781 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ - $ 9,930 $ $ Accrued liabilities 1,291 107 Unearned revenues - - Deposits payable - Due to other governments - Due to other funds 10,623 - Total Liabilities 11,914 10,037 Deferred Inflows of Resources: Unavailable revenues - - - Total Deferred Inflows of Resources - Fund Balances: Nonspendable: Prepaid costs - Deposits - Restricted for: Community development projects - 10,781 Public safety - police 432 - Parks and recreation - - Engineering and public works - - 254,869 Capital improvement projects - 24,492,818 - - Underground utilities - - - Landscape maintenance - - Library services - - Unassigned - - - - Total Fund Balances 432 24,492,818 254,869 10,781 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 12,346 $ 24,502,855 $ 254,869 $ 10,781 129 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2019 Capital Special Revenue Funds Projects Fund Integrated Total Nonmajor Waste Capital Governmental Management SB1 - TCEP Projects Fund Funds Assets: Cash and investments $ 3,589,630 $ - $ 4,843,498 $ 94,736,629 Receivables: Accounts 23,759 1,386,985 - 3,039,458 Taxes 320,447 - - 995,561 Accrued interest 13,311 17,306 322,018 Other loans - - 1,543,186 Grants - - - 789,895 Prepaid costs - - - 41,216 Deposits - - - 12,255 Due from other funds - - - 21,208 Restricted assets: Cash and investments with fiscal agents - - 407,925 705,773 Total Assets $ 3,947,147 $ 1,386,985 $ 5,268,729 $ 102,207,199 Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable $ 9,743 $ 595,133 $ 2,577,424 $ 5,739,249 Accrued liabilities 37,587 - - 494,569 Unearned revenues - - - 764,859 Deposits payable - - - 20,867 Due to other governments - - - 789,073 Due to other funds - 791,852 - 839,313 Total Liabilities 47,330 1,386,985 2,577,424 8,647,930 Deferred Inflows of Resources: Unavailable revenues - - - 429,355 Total Deferred Inflows of Resources - - 429,355 Fund Balances: Nonspendable: Prepaid costs - - 41,216 Deposits - - 12,255 Restricted for: Community development projects - - 2,573,192 Public safety - police - - 724,038 Parks and recreation - - 2,702,443 Engineering and public works 3,899,817 - - 20,771,404 Capital improvement projects - 2,691,305 28,315,687 Underground utilities - - 10,962,197 Landscape maintenance - - 19,894,912 Library services - - 7,132,666 Unassigned - - (96) Total Fund Balances 3,899,817 - 2,691,305 93,129,914 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 3,947,147 $ 1,386,985 $ 5,268,729 $ 102,207,199 130 THIS PAGE INTENTIONALLY LEFT BLANK 131 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019 Revenue Funds Landscape Maintenance Gas Tax Recreation Beautification Districts Revenues: Taxes $ - $ - $ - $ 10,939,578 Licenses and permits - - - 217,512 Intergovernmental 6,576,705 2,148 - - Charges for services - 2,899,676 - 26,506 Use of money and property 342,342 1,317,071 36,226 738,979 Contributions - 197,878 - 30,000 Developer participation - - 10,963 - Miscellaneous - 222,367 93,407 2,217 Total Revenues 6,919,047 4,639,140 140,596 11,954,792 Expenditures: Current: General government - - - - Public safety - police - - - - Public safety - fire protection - - - - Community development - - - 9,870,528 Community services - 4,524,302 - - Engineering and public works 3,401,807 - 270 1,990 Capital outlay 2,015,173 28,860 126,195 178,738 Total Expenditures 5,416,980 4,553,162 126,465 10,051,256 Excess (Deficiency) of Revenues Over (Under) Expenditures 1,502,067 85,978 14,131 1,903,536 Other Financing Sources (Uses): Transfers in - - - 537,340 Transfers out - - - - Total Other Financing Sources (Uses) - - - 537,340 Net Change in Fund Balances 1,502,067 85,978 14,131 2,440,876 Fund Balances, Beginning of Year 9,303,405 2,667,378 954,921 17,454,036 Fund Balances, End of Year $ 10,805,472 $ 2,753,356 $ 969,052 $ 19,894,912 132 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019 (CONTINUED) Revenue Funds Community Pedestrian Development Assessment Revenues: Taxes $ - $ - $ - $ - Licenses and permits - - - - Intergovernmental 36,838 1,312,471 - - Charges for services - - - - Use of money and property - 5,492 29,654 576 Contributions - - - - Developer participation - - - - Miscellaneous - 45,101 879,833 - Total Revenues 36,838 1,363,064 909,487 576 Expenditures: Current: General government - - 894,850 - Public safety - police - - - - Public safety - fire protection - - - - Community development - 1,235,223 - - Community services - - - - Engineering and public works - - - - Capital outlay 36,838 - - - Total Expenditures 36,838 1,235,223 894,850 - Excess (Deficiency) of Revenues Over (Under) Expenditures - 127,841 14,637 576 Other Financing Sources (Uses): Transfers in - - - - Transfers out - - (275,520) - Total Other Financing Sources (Uses) - - (275,520) - Net Change in Fund Balances - 127,841 (260,883) 576 Fund Balances, Beginning of Year - 1,144,226 807,995 36,160 Fund Balances, End of Year $ - $ 1,272,067 $ 547,112 $ 36,736 133 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019 Revenue Funds Masi Air Quality Commerce Library Improvement Center Measure I Services Revenues: Taxes $ - $ - $ - $ 4,582,638 Licenses and permits - - - - Intergovernmental 556,075 - 3,072,750 65,403 Charges for services - - - 227,036 Use of money and property 36,582 5,447 139,888 265,214 Contributions - - - 161,256 Developer participation - - - - Miscellaneous - - 124,040 75,834 Total Revenues 592,657 5,447 3,336,678 5,377,381 Expenditures: Current: General government 17,067 220 - - Public safety - police - - - - Public safety - fire protection - - - - Community development - - - - Community services - - - 4,570,010 Engineering and public works - - 2,339,819 - Capital outlay 1,206,165 - 920,652 - Total Expenditures 1,223,232 220 3,260,471 4,570,010 Excess (Deficiency) of Revenues Over (Under) Expenditures (630,575) 5,227 76,207 807,371 Other Financing Sources (Uses): Transfers in - - - 11,428 Transfers out - - - - Total Other Financing Sources (Uses) - - - 11,428 Net Change in Fund Balances (630,575) 5,227 76,207 818,799 Fund Balances, Beginning of Year 1,320,765 303,765 4,391,561 6,715,750 Fund Balances, End of Year $ 690,190 $ 308,992 $ 4,467,768 $ 7,534,549 134 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019 (CONTINUED) Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Contributions Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety - police Public safety - fire protection Community development Community services Engineering and public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds AB 2928 Library Traffic Public Safety Used Oil Services Congestion Grants Recycling Grants Relief 498,852 89,459 374,548 14,257 1,225 12,135 4,974 513,109 90,684 386,683 4,974 302,684 - 57,851 - - 51,159 - - - 35,640 - - - 70 26,488 - - - 387,023 51,159 35,640 70 126,086 39,525 351,043 4,904 2,110 - (11,428) 2,110 - (11,428) - 128,196 39,525 339,615 4,904 595,410 4,065 83,247 289,581 $ 723,606 $ 43,590 $ 422,862 $ 294,485 135 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019 Revenues: Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Contributions Developer participation Miscellaneous Total Revenues Expenditures: Current: General government Public safety - police Public safety - fire protection Community development Community services Engineering and public works Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances, Beginning of Year Fund Balances, End of Year Special Revenue Funds Energy Litter Efficiency and Reduction Conservation SAFETEA-LU Underground 103,907 - 5,214 - - - - 145,323 378 - 543 384,677 104,285 51,243 51,243 53,042 5,757 530,000 - 150 18,091 - 5,607 184,753 5,757 202,844 - 327,156 53,042 - - 327,156 - (96) - 10,635,041 $ 53,042 $ (96) $ - $ 10,962,197 136 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019 (CONTINUED) Special Revenue Funds Safe Routes Citywide Public to School Infrastructure Proposition Resource Program Improvement 1 B Grants Revenues: Taxes $ - $ - $ - $ - Licenses and permits - - - - Intergovernmental 38,062 873,782 - 33,490 Charges for services - - - - Use of money and property - 858,448 8,420 3 Contributions - - - 600 Developer participation - 188,292 - - Miscellaneous - 1,565 - - Total Revenues 38,062 1,922,087 8,420 34,093 Expenditures: Current: General government - - - 8,959 Public safety - police - - - - Public safety - fire protection - - - - Community development - - 60 - Community services - - - - Engineering and public works 28,047 579,009 - - Capital outlay - 888,887 - - Total Expenditures 28,047 1,467,896 60 8,959 Excess (Deficiency) of Revenues Over (Under) Expenditures 10,015 454,191 8,360 25,134 Other Financing Sources (Uses): Transfers in 65,000 - - - Transfers out - - - - Total Other Financing Sources (Uses) 65,000 - - - Net Change in Fund Balances 75,015 454,191 8,360 25,134 Fund Balances, Beginning of Year (74,583) 24,038,627 246,509 (14,353) Fund Balances, End of Year $ 432 $ 24,492,818 $ 254,869 $ 10,781 137 CITY OF RANCHO CUCAMONGA COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2019 Capital Special Revenue Funds Projects Fund Total Integrated Nonmajor Waste Capital Governmental Management SB1 - TCEP Projects Fund Funds Revenues: Taxes $ 1,343,238 $ - $ - $ 16,865,454 Licenses and permits 26,354 - - 243,866 Intergovernmental - 1,386,985 26,048 15,052,737 Charges for services - - - 3,298,541 Use of money and property 118,878 - 180,546 4,501,955 Contributions - - - 389,734 Developer participation - - - 199,255 Miscellaneous 57,159 - - 1,501,523 Total Revenues 1,545,629 1,386,985 206,594 42,053,065 Expenditures: Current: General government - - 280 921,376 Public safety - police - - - 302,684 Public safety - fire protection - - - 57,851 Community development - - 290 11,157,260 Community services - - - 9,129,952 Engineering and public works 1,268,169 - - 7,688,665 Capital outlay - 1,386,985 - 7,005,341 Total Expenditures 1,268,169 1,386,985 570 36,263,129 Excess (Deficiency) of Revenues Over (Under) Expenditures 277,460 - 206,024 5,789,936 Other Financing Sources (Uses): Transfers in - - - 615,878 Transfers out (188,420) - - (475,368) Total Other Financing Sources (Uses) (188,420) - - 140,510 Net Change in Fund Balances 89,040 - 206,024 5,930,446 Fund Balances, Beginning of Year 3,810,777 - 2,485,281 87,199,468 Fund Balances, End of Year $ 3,899,817 $ - $ 2,691,305 $ 93,129,914 138 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) GAS TAX YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 9,303,405 $ 9,303,405 $ 9,303,405 $ - 6,779,020 6,537,940 6,576,705 38,765 127,300 217,650 342,342 124,692 16,209,725 16,058,995 16, 222, 452 163,457 2,524,720 3,634,830 3,441,807 193,023 2,677,000 3,502,210 3,114,675 387,535 5,201,720 7,137,040 6,556,482 580,558 $ 11,008,005 $ 8,921,955 9,665,970 $ 744,015 1,139,502 $ 10,805,472 139 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) RECREATION YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Charges for services Use of money and property Contributions Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Parks and recreation Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,667,378 $ 2,667,378 $ 2,667,378 $ - - - 2,148 2,148 3,004,410 2,699,500 2,899,676 200,176 1,131,360 1,179,000 1,317,071 138,071 253,690 243,680 197,878 (45,802) 259,130 236,430 222,367 (14,063) 7,315,968 7,025,988 7,306,518 280,530 5,123,580 4,692,480 4,536,251 156,229 - 155,740 28,860 126,880 5,123,580 4,848,220 4,565,111 283,109 $2,192,388 $ 2,177,768 2,741,407 $ 563,639 11,949 $ 2,753,356 140 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) BEAUTIFICATION YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Developer participation Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 954,921 $ 954,921 $ 954,921 $ - 12,000 19,310 36,226 16,916 - 10,970 10,963 (7) - - 93,407 93,407 966,921 985,201 1,095,517 110,316 270 270 270 - 537,000 349,490 347,089 2,401 537,270 349,760 347,359 2,401 $ 429,651 $ 635,441 748,158 $ 112,717 29n RA4 Budgetary Fund Balance, June 30 (GAAP Basis) $ 969,052 141 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LANDSCASPE MAINTENANCE DISTRICTS YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Charges for services Use of money and property Contributions Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Community development Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 17,454,036 $ 17,454,036 $17,454,036 $ - 10, 923, 350 10, 923, 350 10, 939, 578 16,228 240,000 240,000 217,512 (22,488) 54,720 54,720 26,506 (28,214) 277,880 354,620 738,979 384,359 30,000 30,000 30,000 - 3,940 3,940 2,217 (1,723) 495,730 537,340 537,340 - 29,479,656 29,598,006 29,946,168 348,162 590,990 452,670 - 452,670 11,789,530 11,859,330 10,067,714 1,791,616 1,990 1,990 1,990 - 1,115,000 396,910 335,030 61,880 13,497,510 12,710,900 10,404,734 2,306,166 $ 15,982,146 $ 16,887,106 19,541,434 $ 2,654,328 353,478 $19,894,912 142 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) PEDESTRIAN GRANT YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 43,000 43,000 36,838 (6,162) 43,000 43,000 36,838 (6,162) 43,000 43,000 36,838 6,162 43,000 43,000 36,838 6,162 143 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) COMMUNITY DEVELOPMENT BLOCK GRANT YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 1,144,226 $ 1,144,226 $ 1,144,226 $ - 1,780,140 1,255,740 1,312,471 56,731 - - 5,492 5,492 350,000 150,000 45,101 (104,899) 3,274,366 2,549,966 2,507,290 (42,676) 1,671,740 1,255,740 1,235,223 20,517 1,671,740 1,255,740 1,235,223 20,517 $ 1,602,626 $ 1,294,226 1,272,067 $ (22,159) $ 1,272,067 144 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) ASSESSMENT ADMINISTRATION YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 807,995 $ 807,995 $ 807,995 $ - 10,270 13,570 29,654 16,084 879,240 879,750 879,833 83 1,697,505 1,701, 315 1,717,482 16,167 926,100 1,009,760 896,050 113,710 - 275,520 275,520 - 926,100 1,285,280 1,171,570 113,710 $ 771,405 $ 416,035 545,912 $ 129,877 1,200 $ 547,112 145 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) AIR QUALITY IMPROVEMENT YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $1,320,765 $ 1,320,765 $ 1,320,765 $ 837,150 551,420 556,075 4,655 19,600 19,530 36,582 17,052 2,177,515 1,891,715 1,913,422 21,707 21,840 17,400 17,067 333 631,160 1,293,480 1,270,624 22,856 653,000 1,310,880 1,287,691 23,189 $1,524,515 $ 580,835 625,731 $ 44,896 64,459 $ 690,190 146 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) MASI COMMERCE CENTER YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 303,765 $ 303,765 $ 303,765 $ - 170 200 5,447 5,247 303,935 303,965 309,212 5,247 220 220 220 220 $ 303,715 $ 303,745 220 - 220 - 308,992 $ 5,247 $ 308,992 147 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) MEASUREI YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $4,391,561 $ 4,391,561 $ 4,391,561 $ - 3,128,210 2,816,040 3,072,750 256,710 61,410 73,000 139,888 66,888 - - 124,040 124,040 7,581,181 7,280,601 7,728,239 447,638 1,585,630 2,502,890 2,347,253 155,637 1,610,000 3,395,800 3,314,842 80,958 3,195,630 5,898,690 5,662,095 236,595 $4,385,551 $ 1,381,911 2,066,144 $ 684,233 7 An1 A9A Budgetary Fund Balance, June 30 (GAAP Basis) $ 4,467,768 148 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LIBRARY SERVICES YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Intergovernmental Charges for services Use of money and property Contributions Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Community services Capital outlay Debt service: Principal retirement Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Budget Amounts Original Final $ 6,715,750 $ 6,715,750 Variance with Final Budget Actual Positive Amounts (Negative) $ 6,715,750 $ - 4,440,520 4,713,240 4,582,638 (130,602) 25,000 22,970 65,403 42,433 218,600 195,100 227,036 31,936 84,620 117,400 265,214 147,814 202,000 197,000 161,256 (35,744) 166,070 151,540 75,834 (75,706) - 11,430 11,428 (2) 11,852,560 12,124,430 12,104,559 (19,871) 5,030,450 4,865,010 4,621,254 243,756 98,000 165,000 23,275 141,725 1,790 - - 5,130,240 5,030,010 4,644,529 385,481 $ 6,722,320 $ 7,094,420 7,460,030 $ 365,610 74,519 $ 7,534,549 149 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) PUBLIC SAFETY GRANTS YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety - police Public safety - fire protection Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 595,410 $ 595,410 $ 595,410 $ - 289,560 450,840 498,852 48,012 1,310 1,410 14,257 12,847 - 2,110 2,110 - 886,280 1,049,770 1,110,629 60,859 327,410 346,080 333,164 12,916 27,030 91,200 57,851 33,349 21,390 26,490 26,488 2 375,830 463,770 417,503 46,267 $ 510,450 $ 586,000 693,126 $ 107,126 30,480 $ 723,606 150 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) USED OIL RECYCLING YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 4,065 $ 4,065 $ 4,065 $ - 47,000 48,830 89,459 40,629 530 600 1,225 625 51,595 53,495 94,749 41,254 43,210 51,960 51,159 801 43,210 51,960 51,159 801 $ 8,385 $ 1,535 43,590 $ 42,055 ZO 4s,aaU 151 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LIBRARY SERVICES GRANTS YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Community services Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 83,247 $ 83,247 $ 83,247 $ - 30,000 48,010 374,548 326,538 3,840 4,570 12,135 7,565 117,087 135,827 469,930 334,103 23,730 39,910 35,640 4,270 - 11,430 11,428 2 23,730 51,340 47,068 4,272 $ 93,357 $ 84,487 422,862 $ 338,375 $ 422,862 152 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) AB 2928 TRAFFIC CONGESTION RELIEF YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 289,581 $ 289,581 $ 289,581 $ - - - 4,974 4,974 289,581 289,581 294,555 4,974 $ 289,511 $ 289,511 294,485 $ 4,974 $ 294,485 153 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) LITTER REDUCTION GRANT YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 as restated Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 70,840 58,240 103,907 45,667 - - 378 378 70,840 58,240 104,285 46,045 53,042 $ 53,042 $ 53,042 154 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) SAFETEA-LU GRANT YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 600,000 600,000 5,214 (594,786) 480 510 543 33 600,480 600,510 5,757 (594,753) 150 150 150 - 600,000 600,000 5,607 594,393 600,150 600,150 5,757 594,393 $ 330 $ 360 - $ (360) Budgetary Fund Balance, June 30 (GAAP Basis) $ - 155 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) UNDERGROUND UTILITIES YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Charges for services Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $10,635,041 $10,635,041 $10,635,041 $ - 90,000 90,000 145,323 55,323 167,740 193,600 384,677 191,077 10,892, 781 10,918,641 11,165,041 246,400 3,180 18,100 18,091 9 75,000 214,420 184,753 29,667 78,180 232,520 202,844 29,676 $10,814,601 $10,686,121 10,962,197 $ 276,076 $10,962,197 156 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) SAFE ROUTES TO SCHOOL PROGRAM YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (74,583) $ (74,583) $ (74,583) $ - 145,610 42,740 38,062 (4,678) - 65,000 65,000 - 71,027 33,157 28,479 (4,678) 54,810 33,150 28,047 5,103 90,800 - - - 145,610 33,150 28,047 5,103 $ (74,583) $ 7 432 $ 425 $ 432 157 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) CITYWIDE INFRASTRUCTURE IMPROVEMENT YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Developer participation Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $24,038,627 $24,038,627 $24,038,627 $ 1,250,000 1,250,000 873,782 (376,218) 378,480 424,950 858,448 433,498 2,000 1,000 188,292 187,292 - - 1,565 1,565 25,669,107 25,714,577 25,960,714 246,137 71,470 581,970 580,157 1,813 3,641,820 4,517,470 952,223 3,565,247 3,713,290 5,099,440 1,532,380 3,567,060 $ 21,955,817 $20,615,137 24,428,334 $ 3,813,197 64,484 $ 24,492,818 158 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) PROPOSITION 1 B YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Community development Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Budget Amounts Original Final $ 246,509 $ 246,509 19,920 19,920 3,780 4,500 Variance with Final Budget Actual Positive Amounts (Negative) $ 246,509 $ - (19,920) 8,420 3,920 270,209 270,929 254,929 (16,000) 60 60 60 - 19,920 19,920 - 19,920 19,980 19,980 60 19,920 $ 250,229 $ 250,949 254,869 $ 3,920 ZO La4,uba 159 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) PUBLIC RESOURCES GRANTS YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Contributions Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ (14,353) $ (14,353) $ (14,353) $ 9,730 34,730 33,490 (1,240) - - 3 3 9,510 9,510 600 (8,910) 360 360 - (360) 5,247 30,247 19,740 (10,507) 9,730 34,730 33,959 771 9,730 34,730 33,959 771 $ (4,483) $ (4,483) (14,219) $ (9,736) 25,000 $ 10,781 160 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) INTEGRATED WASTE MANAGEMENT YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Use of money and property Miscellaneous Amounts Available for Appropriations Charges to Appropriation (Outflow): Engineering and public works Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 3,810,777 $ 3,810,777 $ 3,810,777 $ - 1,296,330 1,305,150 1,343,238 38,088 34,000 40,700 26,354 (14,346) 45,520 58,890 118,878 59,988 325,000 100,000 57,159 (42,841) 5,511,627 5,315,517 5,356,406 40,889 1,304,950 1,312,230 1,288,539 23,691 188,420 188,420 188,420 - 1,493,370 1,500,650 1,476,959 23,691 $ 4,018,257 $ 3,814,867 3,879,447 $ 64,580 20,370 $ 3,899,817 161 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) SB1 - TCEP YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Amounts Available for Appropriations Charges to Appropriation (Outflow): Capital outlay Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) 7,850,000 7,850,000 1,386,985 (6,463,015) 7,850,000 7,850,000 1,386,985 (6,463,015) 7,850,000 7,850,000 4,180,028 3,669,972 7,850,000 7,850,000 4,180,028 3,669,972 $ - $ - (2,793,043) $ (2,793,043) Budgetary Fund Balance, June 30 (GAAP Basis) $ - 162 CITY OF RANCHO CUCAMONGA BUDGETARY COMPARISON SCHEDULE (BUDGETARY BASIS) CAPITAL PROJECTS FUND YEAR ENDED JUNE 30, 2019 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): General government Community development Total Charges to Appropriations Budgetary Fund Balance, June 30 (Budgetary Basis) Encumbrances Budgetary Fund Balance, June 30 (GAAP Basis) Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 2,485,281 $ 2,485,281 $ 2,485,281 $ - - - 26,048 26,048 35,750 86,200 180,546 94,346 2,521,031 2,571,481 2,691,875 120,394 280 280 280 - 290 290 290 - 570 570 570 - $ 2,520,461 $ 2,570,911 2,691,305 $ 120,394 $ 2,691,305 163 THIS PAGE INTENTIONALLY LEFT BLANK 164 CITY OF RANCHO CUCAMONGA Internal Service Funds Internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis. Equipment and Vehicle Replacement - Established to account for the accumulation of user charges to various City departments and the costs associated with replacing the City's vehicles. Computer Equipment/Technology Replacement - Established to account for the accumulation of resources and the costs associated with replacing the City's data processing equipment and maintaining current technology. 165 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2019 Assets: Current: Cash and investments Receivables: Accounts Accrued interest Prepaid costs Total Current Assets Noncurrent: Capital assets - net of accumulated depreciation Total Noncurrent Assets Total Assets Liabilities and Net Position: Liabilities: Current: Accounts payable Accrued interest Capital leases Total Current Liabilities Noncurrent: Capital leases Total Noncurrent Liabilities Total Liabilities Net Position: Invested in capital assets Unrestricted Total Net Position Total Liabilities and Net Position Computer Equipment Equipment/ and Vehicle Technology Replacement Replacement Total $ 1,626,457 $ 2,631,718 $ 4,258,175 - 29,020 29,020 6,352 4,257 10,609 - 648,371 648,371 1,632,809 3,313,366 4,946,175 4,392,669 3,330,859 7,723,528 4,392,669 3,330,859 7,723,528 $ 6,025,478 $ 6,644,225 $ 12,669,703 $ 307,887 $ 70,208 $ 378,095 - 30,272 30,272 - 453,174 453,174 307,887 553,654 861,541 - 1,465,999 1,465,999 - 1,465,999 1,465,999 307,887 2,019,653 2,327,540 4,392,669 1,411,686 5,804,355 1,324,922 3,212,886 4,537,808 5,717,591 4,624,572 10, 342,163 $ 6,025,478 $ 6,644,225 $ 12,669,703 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2019 Computer Equipment Equipment/ and Vehicle Technology Replacement Replacement Total Operating Revenues: Interdepartmental charges $ 300,000 $ 421,550 $ 721,550 Miscellaneous 93,772 - 93,772 Total Operating Revenues 393,772 421,550 815,322 Operating Expenses: Maintenance and operations 144,976 502,452 647,428 Contractual services 14,646 382,923 397,569 Depreciation expense 935,171 515,742 1,450,913 Total Operating Expenses 1,094,793 1,401,117 2,495,910 Operating Income (Loss) (701,021) (979,567) (1,680,588) Nonoperating Revenues (Expenses): Interest revenue 60,557 42,195 102,752 Interest expense - (30,272) (30,272) Total Nonoperating Revenues (Expenses) 60,557 11,923 72,480 Income (Loss) Before Transfers (640,464) (967,644) (1,608,108) Transfers in - 2,098,360 2,098,360 Changes in Net Position (640,464) 1,130,716 490,252 Net Position: Beginning of Year 6,358,055 3,493,856 9,851,911 End of Fiscal Year $ 5,717,591 $ 4,624,572 $ 10,342,163 167 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED JUNE 30, 2019 Cash Flows from Operating Activities: Cash received from interfund services provided Cash paid to suppliers for goods and services Cash received from others Net Cash Provided (Used) by Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers in Net Cash Provided (Used) by Non -Capital Financing Activities Cash Flows from Capital and Related Financing Activities: Acquisition and construction of capital assets Principal paid on capital debt 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 prepaid expense Increase (decrease) in accounts payable Total Adjustments Net Cash Provided (Used) by Operating Activities Non -Cash Investing, Capital, and Financing Activities: Capital leases Acquisition of capital assets in accounts payable Computer Equipment Equipment/ and Vehicle Technology Replacement Replacement Total $ 300,100 $ 421,550 $ 721,650 (144,908) (728,381) (873,289) 93,772 93,772 248,964 (306,831) (57,867) - 2,098,360 2,098,360 2,098,360 2,098,360 (598,076) (43,826) (641,902) - (527,330) (527,330) (598,076) (571,156) (1,169,232) 61,738 42,662 104,400 61,738 42,662 104,400 (287,374) 1,263,035 975,661 1,913,831 1,368,683 3,282,514 $ 1,626,457 $ 2,631,718 $ 4,258,175 $ (701,021) $ (979,567) $ (1,680,588) 935,171 515,742 1,450,913 100 - 100 - 140,685 140,685 14,714 16,309 31,023 949,985 672,736 1,622,721 $ 248,964 $ (306,831) $ (57,867) $ - $ 2,446,503 $ 2,446,503 165,975 - 165,975 See Notes to Financial Statements 168 THIS PAGE INTENTIONALLY LEFT BLANK 169 CITY OF RANCHO CUCAMONGA Agency Funds Agency funds are used to account for assets held by the City as trustee or agent for individuals, private organizations, or other governmental units, and/or other funds. Special Deposits Fund - Established to account for all deposits held by the City in its fiduciary capacity. Assessment District 82-1 Fund - Established to account for assessments received under the Refunding Act of 1984 for 1915 Improvement Act Bonds. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation proper coupons. Assessment District 84-2 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Assessment District 85-PD Fund - Established to account for assessments received under the Refunding Act of 1984 for 1915 Improvement Act Bonds and Landscape/Lighting Act of 1972. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons Community Facilities District 88-2 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Assessment District 91-2 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Community Facilities District 93.3 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Assessment District 99-1 Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Assessment District No. 93-1 Masi Commerce Center Fund - Established to account for assessments received under the Improvement Bond Act of 1915. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. Community Facilities District 2003-01 Series A Fund - This fund is used for the Community Facilities District 2003-01 bond redemption process. The Bond Redemption fund is a short-term rotating fund, generally used to consolidate the collections received from the payments of the property owners upon payment of their annual assessments at the time of payment of their tax bills. Furthermore, the monies in this fund are used to meet the annual principal and semiannual interest payment on the bonds. Community Facilities District 2003-01 Series B Fund - This fund is used for the Community Facilities District 2003-01 bond redemption process. The Bond Redemption fund is a short-term rotating fund, generally used to consolidate the collections received from the payments of the property owners upon payment of their annual assessments at the time of payment of their tax bills. Furthermore, the monies in this fund are used to meet the annual principal and semiannual interest payment on the bonds. Community Facilities District 2000-03 Rancho Summit Redemption Fund - Established to account for assessments received under the Mello -Roos Community Facilities Act of 1982. Assessments received are restricted for payment of principal, interest and penalties thereon, upon presentation of proper coupons. 170 CITY OF RANCHO CUCAMONGA Agency Funds (Continued) Community Facilities District 2000-03 Rancho Summit Reserve Fund - Established to account for the reserve fund held by the trustee. Community Facilities District 2004-01 Fund - This fund is used for the Community Facilities District 2004-01 bond redemption process. The Bond Redemption fund is a short-term rotating fund, generally used to consolidate the collections received from the payments of the property owners upon payment of their annual assessments at the time of payment of their tax bills. Furthermore, the monies in this fund are used to meet the annual principal and semiannual interest payment on the bonds. Community Facilities District 2000-03 Park Maintenance Fund - This fund is used for the maintenance of parks and parkways located within the Community Facilities District No. 2000-03. The District is located south of Summit Avenue on the east and west sides of Wardman Bullock Road. CFD 2018-01 Empire Lakes - Established to account for monies deposited by developers for initial consulting and administrative costs and expenses related to the proposed Community Facilities District 2018-01. Employee Deduction Account Fund - Established to account for the contribution by City employees towards specific employee -paid benefits. Special Tax Refunding Bonds 2015 Fund - Established to account for assessments received for the Community Facilities District No. 2000-01, Community Facilities District No. 2000-02, Community Facilities District No. 2001-01 Special Tax Bonds, Series A, Community Facilities District No. 2001-01 Special Tax Bonds, Series, Community Facilities District No. 2006-01, and Community Facilities District No. 2006-02. This fund accounts for the payment of principal, interest and penalties thereon, upon presentation of proper coupons. CFD 2017-01 No. Etiwanda Fund - Established to account for monies deposited by developers for initial consulting and administrative costs and expenses related to the proposed Community Facilities District 2017-01. 171 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Accrued liabilities Deposits payable Payable to trustee Due to external parties/other agencies Total Liabilities Special Assessment Assessment Assessment Deposits District 82-1 District 84-2 District 85-PD $ 8,960,884 $ 47 $ 46 $ 2,572,796 123,900 - - 4,077 2,494 - - 11,631 - - - 7,674 y,VO/,L/6 4/ 140 .1) L, 7yU, I1O $ 19,534 $ - $ - $ 117,422 17,400 - - 6,898 8,645,168 - - - 405,176 47 46 2,471,858 y,Utf/,L/tf :0 4/ 4) 40 zo L,Oub,'I Its 172 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2019 (CONTINUED) Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Accrued liabilities Deposits payable Payable to trustee Due to external parties/other agencies Total Liabilities Assessment Assessment CFD 88-2 District 91-2 CFD 93-3 District 99-1 $ 4,545,259 $ 57,642 $ 4,044 $ 314,714 - 647 - - 10,474 183 - 1,110 $ 8,990 $ - $ - $ - - 805 - - 4,546,743 57,667 4,044 315,824 p 1,JJJ,I JJ p JV,�IL � T,VTT W JIJ,VL7 173 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Accrued liabilities Deposits payable Payable to trustee Due to external parties/other agencies Total Liabilities CFD 2000-03 AD 93-1 Masi Rancho Commerce CFD 2003-01 CFD 2003-01 Summit Center Series A Series B Redemption $ 554,313 $ 825,917 $ 223,496 $ 456,930 - 905 - 2,468 1,573 1,361 512 801 -P VVV,JI 1 1p L,LJI,V.7J -P JJI,VIY -P YV V,JVV 800,371 2,257,093 357,614 460,306 �p OVV,J/ 1 �p L,LDl,VJJ p JJl,01N p 90V,0V0 174 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2019 (CONTINUED) Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Accrued liabilities Deposits payable Payable to trustee Due to external parties/other agencies Total Liabilities CFD 2000-03 Rancho Summit Reserve CFD 2004-01 $ - $ 2,469,836 $ - 24,289 5,174 CFD 2000-03 Park CFD 2018-01 Maintenance Empire Lakes 555,061 $ 15,238 1,964 - 1,786 - $ - $ $ 15,758 $ 134 8,121 - - 15,085 262,895 3,698,431 534,932 19 �p LOL,ovu �p J,0V0,901 �p DD0,011 p ID,LJO 175 CITY OF RANCHO CUCAMONGA COMBINING BALANCE SHEET ALL AGENCY FUNDS JUNE 30, 2019 Assets: Cash and investments Receivables: Accounts Taxes Accrued interest Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Accrued liabilities Deposits payable Payable to trustee Due to external parties/other agencies Total Liabilities Employee Special Tax Deduction Refunding CFD 2017-01 Account Bonds 2015 No. Etiwanda Total $ 37,784 $ 1,765,528 $ - $ 23,359,535 - 102,016 - 229,993 6,065 - 50,463 2,356 - 33,004 - 781,675 - 4,050,810 $ 37,784 $ 2,657,640 $ - $ 27,723,805 $ $ - $ - $ 161,838 - - 33,224 - - 8,660,253 2,657,640 - 18,830,706 37,784 - - 37,784 $ 37,784 $ 2,657,640 $ - $ 27,723,805 176 THIS PAGE INTENTIONALLY LEFT BLANK 177 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2019 Balance Balance July 1, 2018 Additions Deductions June 30, 2019 Special Deposits Assets: Cash and investments $ 8,416,335 $ 2,090,425 $ 1,545,876 $ 8,960,884 Receivables: Accounts 139,017 123,900 139,017 123,900 Taxes 1,540 2,494 1,540 2,494 Total Assets $ 8,556,892 $ 2,216,819 $ 1,686,433 $ 9,087,278 Liabilities: Accounts payable $ 1,120 $ 1,291,604 $ 1,273,190 $ 19,534 Accrued liabilities 17,400 - - 17,400 Deposits payable 8,163,753 1,749,386 1,267,971 8,645,168 Payable to trustee 374,619 31,309 752 405,176 Total Liabilities $ 8,556,892 $ 3,072,299 $ 2,541,913 $ 93087,278 Assessment District 82-1 Assets: Cash and investments $ 47 $ - $ - $ 47 Total Assets $ 47 $ - $ $ 47 Liabilities: Payable to trustee $ 47 $ $ $ 47 Total Liabilities $ 47 $ $ $ 47 Assessment District 84-2 Assets: Cash and investments $ 46 $ $ $ 46 Total Assets $ 46 $ $ $ 46 Liabilities: Payable to trustee $ 46 $ $ $ 46 Total Liabilities $ 46 $ - $ $ 46 Assessment District 85-PD Assets: Cash and investments $ 1,936,033 $ 1,624,691 $ 987,928 $ 2,572,796 Receivables: Accounts 8,623 1,271 5,817 4,077 Taxes 14,599 11,631 14,599 11,631 Accrued interest 5,192 7,674 5,192 7,674 Total Assets $ 1,964,447 $ 1,645,267 $ 1,013,536 $ 2,596,178 Liabilities: Accounts payable $ 64,870 $ 666,407 $ 613,855 $ 117,422 Accrued liabilities 6,553 6,898 6,553 6,898 Payable to trustee 1,893,025 1,808,808 1,229,975 2,471,858 Total Liabilities $ 1,964,448 $ 2,482,113 $ 1,850,383 $ 2,596,178 178 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2019 Balance Balance July 1, 2018 Additions Deductions June 30, 2019 CFD 88-2 Assets: Cash and investments Receivables: Taxes Accrued interest Total Assets Liabilities: Accounts payable Payable to trustee Total Liabilities Assessment District 91-2 Assets: Cash and investments Receivables: Taxes Accrued interest Total Assets Liabilities: Accrued liabilities Payable to trustee Total Liabilities CFD 93-3 Assets: Cash and investments Total Assets Liabilities: Payable to trustee Total Liabilities Assessment District 99-1 Assets: Cash and investments Receivables: Accounts Accrued interest Total Assets Liabilities: Payable to trustee Total Liabilities AD 93-1 Masi Commerce Center Assets: Cash and investments Receivables: Accrued interest Restricted assets: Cash and investments with fiscal agents Total Assets Liabilities: Accounts payable Payable to trustee Total Liabilities $ 4,443,125 $ 113,345 $ 11,211 $ 4,545,259 1,156 - 1,156 - 9,588 10,474 9,588 10,474 $ 4,453,869 $ 123,819 $ 21,955 $ 4,555,733 $ - $ 8,990 $ - $ 8,990 4,453,868 113,345 20,470 4,546,743 $ 4,453,868 $ 122,335 $ 20,470 $ 4,555,733 $ 47,752 $ 40,515 $ 30,625 $ 57,642 139 647 139 647 121 183 121 183 $ 48,012 $ 41,345 $ 30,885 $ 58,472 $ 493 $ 805 $ 493 $ 805 47,519 42,345 32,197 57,667 $ 48,012 $ 43,150 $ 32,690 $ 58,472 $ - $ 4,044 $ - $ 4,044 $ $ 4,044 $ $ 4,044 $ $ 4,044 $ $ 4,044 $ - $ 4,044 $ $ 4,044 $ 302,500 $ 13,415 $ 1,201 $ 314,714 7,746 - 7,746 - 1,014 1,110 1,014 1,110 $ 311,260 $ 14,525 $ 9,961 $ 315,824 $ 311,260 $ 13,415 $ 8,851 $ 315,824 $ 311,260 $ 13,415 $ 8,851 $ 315,824 $ 520,258 $ 267,629 $ 233,574 $ 554,313 1,404 1,573 1,404 1,573 243,560 4,418 3,493 244,485 $ 765,222 $ 273,620 $ 238,471 $ 800,371 $ - $ 2,500 $ 2,500 $ - 765,222 272,047 236,898 800,371 $ 765,222 $ 274,547 $ 239,398 $ 800,371 179 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2019 Balance Balance July 1, 2018 Additions Deductions June 30, 2019 CFD 2003-01 Series A Assets: Cash and investments $ 711,884 $ 1,169,468 $ 1,055,435 $ 825,917 Receivables: Taxes 1,681 905 1,681 905 Accrued interest 1,144 1,361 1,144 1,361 Restricted assets: Cash and investments with fiscal agents 1,423,364 45,491 39,945 1,428,910 Total Assets $ 2,138,073 $ 1,217,225 $ 1,098,205 $ 2,257,093 Liabilities: Accounts payable $ - $ 2,000 $ 2,000 $ - Payable to trustee 2,138,073 1,215,865 1,096,845 2,257,093 Total Liabilities $ 2,138,073 $ 1,217,865 $ 1,098,845 $ 2,257,093 CFD 2003-01 Series B Assets: Cash and investments $ 208,889 $ 211,148 $ 196,541 $ 223,496 Receivables: Accrued interest 459 512 459 512 Restricted assets: Cash and investments with fiscal agents 133,078 4,327 3,799 133,606 Total Assets $ 342,426 $ 215,987 $ 200,799 $ 357,614 Liabilities: Payable to trustee $ 342,426 $ 215,475 $ 200,287 $ 357,614 Total Liabilities $ 342,426 $ 215,475 $ 200,287 $ 357,614 CFD 2000-03 Rancho Summit Redemption Assets: Cash and investments $ 411,201 $ 591,517 $ 545,788 $ 456,930 Receivables: Taxes 3,262 2,468 3,262 2,468 Accrued interest 693 801 693 801 Restricted assets: Cash and investments with fiscal agents 50 5,148 5,091 107 Total Assets $ 415,206 $ 599,934 $ 554,834 $ 460,306 Liabilities: Accounts payable $ - $ 1,500 $ 1,500 $ - Payable to trustee 415,206 599,134 554,034 460,306 Total Liabilities $ 415,206 $ 600,634 $ 555,534 $ 460,306 CFD 2000-03 Rancho Summit Reserve Assets: Restricted assets: Cash and investments with fiscal agents $ 262,994 $ 4,610 $ 4,709 $ 262,895 Total Assets $ 262,994 $ 4,610 $ 4,709 $ 262,895 Liabilities: Payable to trustee $ 262,994 $ 4,610 $ 4,709 $ 262,895 Total Liabilities $ 262,994 $ 4,610 $ 4,709 $ 262,895 180 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2019 Balance Balance July 1, 2018 Additions Deductions June 30, 2019 CFD 2004-01 Assets: Cash and investments $ 2,099,990 $ 2,742,827 $ 2,372,981 $ 2,469,836 Receivables: Taxes 34,656 24,289 34,656 24,289 Accrued interest 4,265 5,174 4,265 5,174 Restricted assets: Cash and investments with fiscal agents 1,194,880 39,963 35,711 1,199,132 Total Assets $ 3,333,791 $ 2,812,253 $ 2,447,613 $ 3,698,431 Liabilities: Payable to trustee $ 3,333,791 $ 2,807,079 $ 2,442,439 $ 3,698,431 Total Liabilities $ 3,333,791 $ 2,807,079 $ 2,442,439 $ 3,698,431 CFD 2000-03 Park Maintenance Assets: Cash and investments $ 522,129 $ 490,787 $ 457,855 $ 555,061 Receivables: Taxes 2,530 1,964 2,530 1,964 Accrued interest 1,456 1,786 1,456 1,786 Total Assets $ 526,115 $ 494,537 $ 461,841 $ 558,811 Liabilities: Accounts payable $ 31,541 $ 163,270 $ 179,053 $ 15,758 Accrued liabilities 7,789 8,121 7,789 8,121 Payable to trustee 486,785 505,702 457,555 534,932 Total Liabilities $ 526,115 $ 677,093 $ 644,397 $ 558,811 CFD 2018-01 Empire Lakes Assets: Cash and investments $ 72,686 $ 3,665 $ 61,113 $ 15,238 Receivables: Accounts 2,497 - 2,497 - Total Assets $ 75,183 $ 3,665 $ 63,610 $ 15,238 Liabilities: Accounts payable $ 14,578 $ 46,604 $ 61,048 $ 134 Deposits payable 59,205 - 44,120 15,085 Payable to trustee 1,400 47,941 49,322 19 Total Liabilities $ 75,183 $ 94,545 $ 154,490 $ 15,238 Employee Deduction Account Assets: Cash and investments $ 25,705 $ 324,578 $ 312,499 $ 37,784 Total Assets $ 25,705 $ 324,578 $ 312,499 $ 37,784 Liabilities: Due to external parties/other agencies $ 25,705 $ 161,522 $ 149,443 $ 37,784 Total Liabilities $ 25,705 $ 161,522 $ 149,443 $ 37,784 181 CITY OF RANCHO CUCAMONGA COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES ALL AGENCY FUNDS YEAR ENDED JUNE 30, 2019 Balance Balance July 1, 2018 Additions Deductions June 30, 2019 Special Tax Refunding Bonds 2015 Assets: Cash and investments $ 1,589,939 $ 1,920,063 $ 1,744,474 $ 1,765,528 Receivables: Accounts 102,016 100,000 100,000 102,016 Taxes 26,124 6,065 26,124 6,065 Accrued interest 2,115 2,356 2,115 2,356 Restricted assets: Cash and investments with fiscal agents 778,081 26,360 22,766 781,675 Total Assets $ 2,498,275 $ 2,054,844 $ 1,895,479 $ 2,657,640 Liabilities: Accounts payable $ - $ 8,200 $ 8,200 $ - Payable to trustee 2,498,275 2,052,487 1,893,122 2,657,640 Total Liabilities $ 2,498,275 $ 2,060,687 $ 1,901,322 $ 2,657,640 CFD 2017-01 No. Etiwanda Assets: Cash and investments $ 2,557 $ - $ 2,557 $ - Total Assets $ 2,557 $ - $ 2,557 $ Liabilities: Accounts payable $ 2,557 $ $ 2,557 $ Total Liabilities $ 2,557 $ - $ 2,557 $ Totals - All Agency Funds Assets: Cash and investments $ 21,311,076 $ 11,608,117 $ 9,559,658 $ 23,359,535 Receivables: Accounts 259,899 225,171 255,077 229,993 Taxes 85,687 50,463 85,687 50,463 Accrued interest 27,451 33,004 27,451 33,004 Restricted assets: Cash and investments with fiscal agents 4,036,007 130,317 115,514 4,050,810 Total Assets $ 25,720,120 $ 12,047,072 $ 10,043,387 $ 27,723,805 Liabilities: Accounts payable $ 114,666 $ 2,191,075 $ 2,143,903 $ 161,838 Accrued liabilities 32,235 15,824 14,835 33,224 Deposits payable 8,222,958 1,749,386 1,312,091 8,660,253 Payable to trustee 17,324,556 9,733,606 8,227,456 18,830,706 Due to external parties/other agencies 25,705 161,522 149,443 37,784 Total Liabilities $ 25,720,120 $ 13,851,413 $ 11,847,728 $ 27,723,805 182 City of Rancho Cucamonga Comprehensive Annual Financial Report June 30, 2019 Statistical Section Certain schedules recommended for inclusion in Comprehensive Annual Financial Reports of Municipalities by the Government Finance Officers Association have been omitted from this report. The omission of such schedules was made only after careful consideration of the merits of each recommended schedule by City management. THIS PAGE INTENTIONALLY LEFT BLANK This part of the City of Rancho Cucamonga's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the City's overall financial health. Contents Page 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. 185-189 Revenue Capacity These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes. 190-195 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. 196-201 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. 202-203 Operating Information These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 204-206 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 183 THIS PAGE INTENTIONALLY LEFT BLANK 184 M O P- V V O DV) M (O O M V Lf) LO M (O ONO m V 00 r O O V O 1-- N W M V co co O co O N CO f M M V M M W � M LO M (O 00 (O N O r N W N N M M r N M V V M V V O V) V) d) Ef9 V) V) (NO LMO coN V n M M co m (MD O M V O V V O O 1 N V M M (O O) LO 00 (D M 0606 Ln 00 M 0 1- O N V Cl) M co V V cc to co (0 M O(O M N 0) (D W N N Cl) M N LO m LO co LO O V LO O V) V) V) V) V) V) 00 Ih r- N W O Cl) (D r- Cl Cl) N 0)(o co M (M LO W Cl) LO O O N O M V NM O M O Ln (O co N N (D M Ln O N N r Cl) N C) O LO M LO N (O O (D O D) cM V P- 1--0) V cM (D V LO N 0000 00 W V N O Cl) W 00 0000 (O N O N O V) V) 64 EA V) Efl V N O O O V O V V O O O O LO (D L17 W N O N O M O ao LO r O O Cl m tT (D N CO 00 V a0 r Ln O M M Cl) O) 0c N N N N (O LO 00 O (D O V Co LO O O a M Cl N 00 -ItO N N I--M C V co V) V) V) d) V) V) M N O V LOO N M m W M 0) V V W r- V O) CO c0 M Ln M P- N 00 1` 00 O (D (O LO N LO V (M co V V LO M O M LO LO 00 D) V CO cM (D M N N V M N V (O N 0)(VO n N O Cl) V mr I- N 1- 04 N (D } V) V) 64 EA V) V) 6) U LI7 V co N 1--ITN N LO I- V W co co Cl) N O V 1� M N M LO LO N ('M LO LO LO (D n (O (O O LO M 0) co M co M W M 00 LO M (D 1` (D 00 r co LO (D O (O It Cl N M N O M N M M N I- oc V N O Cl) N O LO oc m M I- 04 1� N V) V) V) V) V) V) Vr- m ONO (O O N LO M� (to M M O (D O LOOM V O M N N LO N M m LO LO M 00 1-- co LO O LO CD LO N 1` w c0 It n O M 1.- M P- M c0 (O N V00 00 O N M VNM O r Cl) 1- 1.- M N VA fA fA co V) W. 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a) c r c m O c c m o 0 a) O_ 0 O > a r m 0 U c 2 0 0 0 O �" > a) 0 -O cn a) ot5 r Y @ c �-0> � a O U 2Co W C CL O a O aO) C r -J=aOC U 0a) O m � O E Q , a) 0 mmN @ Q O r- L N Ha) Xa) "0 - Q 0 Co CUm Of a O m a) O_ = N m o C m Q t ai E E o m O m F c6 O _ F O Q a) @ �' L ❑ t/) O M O U a) a) C N 0 m � 0 m E O N fn C-0 O E O 10 O_ N 0 m0 Y C L p a E .L-- O m N O_ O i p "O N m M O Uj X m a w m 3 "0 > O O @ E> 7 Q 0 Q 0�C 0 � � N m o m N aU - O L 0p m .MCD0 mmp� .0N X E) a) 0 a)> N 0 T °m U 0 U o y o-, m m c m 0) a) .E Q a 0 m 0 0 Y > M 0 m 0 p U O a) a) m 0 Y a _ a) O O ') a) _ 7 r E 0 mw C a) ° N E y U Cm L a) > -0 , m m a) i 0 0 E O O" a) N N 0 3 m N "O o :E w T a'i I V) m o 0 w E o m > U @ J T m Q m N -O U O N c m Of 0 E m N aOr' 0 O N a L E m o m> 0 a) @ a) O w a) a)C)f m m m �_ E l m �� m U U > .0 o m L o 0 c -) _r_ o N co U r m r N co> w y o roci- 0 0 ) m a c vi c o O> p _T N O> m> CO U a 0 OL U O w Of U w F m @ - M a Z 0 191 CITY OF RANCHO CUCAMONGA Principal Property Taxpayers Current Year and Nine Years Ago 2019 Percent of Total City Assessed Assessed Taxpayer Value Value Homecoming I at Terra Vista LLC $274,331,402 1.04% Rancho Mall LLC 271,335,817 1.03% Prologis California I LLC/Catellus 184,658,850 0.70% Frito-Lay North America Inc 155,087,135 0.59% MFREVF II - Empire Lakes LLC 137,071,906 0.52% GS Rancho LLC 124,539,372 0.47% Goodman Rancho SPE LLC 114,456,185 0.43% CH Realty VII MF Rancho Cucamonga 109,169,906 0.41% EQR-Fanwell 2007 LP 106,753,114 0.40% Knickerbocker Properties Inc XLVII 106,699,064 0.40% Victoria Gardens Mall LLC - 0.00% Catellus Development Corporation - 0.00% PK Sale LLC - 0.00% Rreef America Reit 11 Corporation TTTT - 0.00% Teachers Insurance and Annuity Association - 0.00% T Napf Meritage Ownership - 0.00% PPF MF 9200 Milliken Ave LP - 0.00% $1,584,102,751 6.00% 2010 Percent of Total City Assessed Assessed Value Value $ 119,645,392 0.60% - 0.00% - 0.00% - 0.00% 0.00% - 0.00% - 0.00% - 0.00% 95,684,574 0.48% 94,390,649 0.47% 240,202,031 1.21 % 176,374,833 0.89% 122,477,342 0.62% 98,957,647 0.50% 94,311,240 0.47% 87,447,180 0.44% 77,499,134 0.39% $ 1,206,990,022 6.07% Source: San Bernardino County Assessor 2009/10 and 2018/19 Combined Tax Rolls and the SBE Non Unitary Tax Roll; HdL, Coren & Cone 192 CITY OF RANCHO CUCAMONGA Property Tax Levies and Collections Last Ten Fiscal Years Collected within the Fiscal Taxes Levied Fiscal Year of Levy Collections in Year Ended for the Percent Subsequent June 30 Fiscal Year Amount of Levy Years 2010 98,181,404 95,149,733 96.91 % N/A 2011 95,051,899 89,513,493 94.17% N/A 2012 93,318,030 86,742,369 92.95% N/A 2013 93,235,913 85,131,812 91.31% N/A 2014 95,016,035 93,063,071 97.94% N/A 2015 100,428,866 98,457,115 98.04% N/A 2016 105,120,614 103,112,427 98.09% N/A 2017 108,069,418 107,991,619 99.93% N/A 2018 112,950,393 114,778,741 101.62% N/A 2019 119,970,594 122,206,002 101.86% N/A Total Collections to Date Percent Amount of Levy 95,149,733 96.91 % 89,513,493 94.17% 86,742,369 92.95% 85,131,812 91.31% 93,063,071 97.94% 98,457,115 98.04% 103,112,427 98.09% 107,991,619 99.93% 114, 778, 741 101.62% 122,206,002 101.86% Note: Data provided by the San Bernardino County Auditor -Controller for collection of prior year taxes does not segregate the information by fiscal year. Therefore, the City is not able to provide this information in the above schedule. Source: San Bernardino County Auditor-Controller/Treasurer/Tax Collector 193 THIS PAGE INTENTIONALLY LEFT BLANK 194 CITY OF RANCHO CUCAMONGA Principal Sales Tax Remitters Current Year and Nine Years Ago 2019 Business Name Business Category Anker Electronics/Appliance Stores Apple Electronics/Appliance Stores Bass Pro Shops Outdoor World Sporting Goods/Bike Stores Best Buy Electronics/Appliance Stores Chevron Service Stations Circle K Service Stations Costco Discount Department Stores Home Depot Building Materials ICL Performance Products Drug/Chemicals Jeromes Home Furnishings Living Spaces Furniture Home Furnishings Lowes Building Materials Macys Department Stores Monoprice Fulfillment Centers My Goods Market Service Stations Parallon Supplies Chain Solutions Medical /Biotech Ralphs Grocery Stores Ross Family Apparel Schwarz Paper Company Light Industrial/Printers Shell Service Stations Southwire Energy/Utilities Stater Bros Grocery Stores Liquor Target Discount Department Stores Walmart Discount Department Stores Walters Wholesale Electric Plumbing/Electrical Supplies * Firms listed alphabetically Source: The HdL Companies; State Board of Equalization Business Name Albertsons American Building Supply Ameron International Apple Computer Bass Pro Shops Outdoor World Best Buy Chevron Circle K Costco Home Depot JC Penney Living Spaces Furniture Lowes Macys Nic Partners Novartis Animal Health Orchard Supply Hardware Ralphs Rancho Mobil Sears Grand Southwire Company Stater Bros. Tamco Target Wal Mart 2010 Business Category Grocery Stores Liquor Contractors Contractors Electronics/Appliance Stores Sporting Goods/Bike Stores Electronics/Appliance Stores Service Stations Service Station Discount Department Stores Lumber/Building Materials Department Stores Home Furnishings Lumber/Building Materials Department Stores Electrical Equipment Health/Medical Hardware Stores Grocery Stores Liquor Service Stations Department Stores Light Industrial/Printers Grocery Stores Liquor Heavy Industrial Discount Department Stores Discount Department Stores 195 CITY OF RANCHO CUCAMONGA Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities Fiscal Year General Tax Total Ended Obligation Capital Allocation Governmental June 30 Bonds Leases Bonds 1 Loans Activities 2010 - - 404,990,000 20,005,200 424,995,200 2011 - - 395,920,000 19,238,811 415,158,811 2012 3 - - - - 2013 3 - 2,615,708 - - 2014 3 - 2,083,890 - - 2015 3 - 1,564,076 - - 2016 3 - 1,034,303 - - 2017 3 - 486,229 - - 2018 3 - - - - 2019 3 - 1,919,173 - - Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements The City issued over $155 million of new tax allocation bonds in 2008. 2 This ratio is calculated using personal income and population for the prior calendar year. 3 As a result of the dissolution of the Redevelopment Agency on January 31, 2012, Tax Allocation Bonds and Loans indebtedness was transferred to the Successor Agency. 2,615,708 2,083,890 1,564,076 1,034,303 486,229 1,919,173 Business -type Activities Lease Total Total Revenue Certificates of Business -type Primary Bonds Participation Activities Government - - - 424,995,200 - - - 415,158,811 - - - 2,615,708 - - - 2,083,890 - - - 1,564,076 - - - 1,034,303 - - - 486,229 13,555,938 - 13,555,938 15,475,111 Percentage Debt of Personal Per Income 2 Capita 2 8.37% 14,812 7.72% 13,811 0.00% - 0.05% 0 0.04% 67 0.03% 50 0.02% 34 0.01 % 16.22 0.00% - 0.27% 481 197 CITY OF RANCHO CUCAMONGA Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years (In Thousands, except Per Capita) Outstanding General Bonded Debt Fiscal Year General Tax Percent of Percentage Ended Obligation Allocation Assessed of Personal June 30 Bonds Bonds Total Value 1 Income 2 2010 - 404,990 404,990 2.04% 2011 - 395,920 395,920 7.63% 2012 3 - - - 0.00% 2013 3 - - - 0.00% 2014 3 - - - 0.00% 2015 3 - - - 0.00% 2016 3 - - - 0.00% 2017 3 - - - 0.00% 2018 3 - - - 0.00% 2019 3 - - - 0.00% Notes: General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none). Assessed value has been used because the actual value of taxable property is not readily available in the State of California. 7.53% 7.36% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2 These ratios are calculated using personal income and population for the prior calendar year. 3 As a result of the dissolution of the Redevelopment Agency on January 31, 2012, indebtedness was transferred to the Successor Agency. Per Capita 2 2,264 2,336 198 CITY OF RANCHO CUCAMONGA Direct and Overlapping Debt June 30, 2019 City Net Taxable Assessed Value Overlapping Tax and Assessment Debt: Metropolitan Water District Chaffey Community College District Chaffey Union High School District Alta Loma School District Central School District Cucamonga School District Community Facilities District No. 97-1 Etiwanda School District Etiwanda School District CFD No. 7 Etiwanda School District CFD No. 8 Etiwanda School District CFD No. 9 Etiwanda School District CFD Nos. 2004-2 & 2007-1 Etiwanda School District Rancho Etiwanda Public Facilities Authority CFD No. 1 Fontana Unified School District Upland Unified School District City of Rancho Cucamonga CFDs City of Rancho Cucamonga 1915 Act Bonds Total overlapping tax and assessment debt Direct and Overlapping General Fund Debt San Bernardino County General Fund Obligations San Bernardino County Pension Obligation Bonds San Bernardino County Flood Control Dist General Fund Oblig Chaffey Community College District General Fund Obligations Cucamonga School District Certificates of Participation Fontana Unified School District Certificates of Participation City of Rancho Cucamonga General Fund Obligations West Valley Vector Control District Certificates of Participation Total gross direct and overlapping general fund debt Overlapping Tax Increment Debt (Successor Agency) Total overlapping debt City direct debt Total direct and overlapping debt $ 26,419,050,876 2 City Percentage Total Share of Applicable' Debt 6/30/19 Debt 0.906% $ 48,050,000 435,333 23.268% 132,540,000 30,839,407 43.971 % 479,265,904 210,738,011 98.798% 44,002,889 43,473,974 97.977% 47,446,765 46,486,917 100.000% 4,470,000 4,470,000 68.675% 42,995,326 29,527,040 21.530% 8,320,000 1,791,296 68.006% 4,525,000 3,077,272 70.844% 7,475,000 5,295,589 100.000% 15,680,000 15,680,000 100.000% 11,380,000 11,380,000 0.436% 179,940,349 784,540 0.120% 99,507,400 119,409 100.000% 66,475,000 66,475,000 100.000% 830,000 830,000 1,192,903,633 471,403,788 11.877% $ 335,155,000 39,806,359 11.877% 288,826,268 34,303,896 11.877% 62,820,000 7,461,131 23.268% 30,890,000 7,187,485 40.248% 5,686,000 2,288,501 0.436% 30,035,000 130,953 100.000% 12,195,000 12,195,000 32.292% 2,391,448 772,246 767,998,716 104,145,571 100.000% 261,550,000 261,550,000 $ 2,222,452,349 837,099,359 Notes: The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. $ 837,099,359 2 Includes aircraft values. For 2019, the net taxable value per HdL Coren & Cone (HdL) was utilized in lieu of the Agency Net Valuation provided by the County of San Bernardino Auditor -Controller's database, as HdL's net taxable value includes parcels from the County Assessor's database that were inadvertently excluded by the Auditor -Controller. The City believes that the data from HdL provides a more accurate picture for the financial statement reader. 3 Excludes refunding issues dated after 6/30/17. Includes issues to be refunded. 4 Excludes tax and revenue anticipation notes, enterprise revenue and mortgage revenue obligations. Qualified Zone Academy Bonds are included based on principal due at maturity. Source: California Municipal Statistics, HdL Coren & Cone 199 o Cl) n 00 0 LO Cl) n 00 0 L o o O to n aD 0 C a)M 00 0 I n O O 't n N N O(0) M fA 00 O0 7 0 N O(0) Cl) fA 00 00 7 0 N 0 O O O N V3 W 0) 0 V3 ON) Cl) EA O ON) Cl) VA 00 o 0) N O O N a v N 6n) m C m :E O a O N Oj M V Oj M 3 Z O w o N �0 09, V) N 3 � Y n LO (O o 3 L w w w o c rn e o 0 7 w Cl) O Cl O N Cl) O LO m Q LO > N M M N � V3 V3 N n N 00 00 o u C e � O w N O ° V lM0 (M 3 Cl) n y0 N N o0 a0 ` Lo n c V3 V3 N O O m, C E 00 00 0 3 — T O C Of ,m. (MO (MO 0 o c m O O M � M � O U O N W W G. c •-: 0) n - q O U Y d n— V3 V3 N .L.. m O 00 00 a a E 1 0 N Cl) 00 j c (J N LO Q� 0) = L E 0) � 0 y p N LO LO C y c N O m O O 00 3 V3 V3 3 N 3 0) > > O (O (O o N y o M M 00 y6 (6 0 (n o o N E r n 0 Cl) M m 0 N O 000 0 000 N c O O O cD (D V3 0O C E N N o Y � 'a) 0 0 O )j 7�6 y (O (O O 0 N . O m 00 o 0 0 .=y�E E m a N Cl) f`0') = 3 0 m O y6 a 0 0 c C 00 O V 00 O 7 0 O p U m m0_ O m Y � V 7 O a) m 0 n n u m 0' N pOj pOj � T J ° E w (°) O 0 (\ C O N 0) 00 y Y m r 0��° 3 cc0) :?ma�ic _ E h LL 3 > �a w .L.. m L T Pw m. m C a 0) Y 3 a c m m U O y N O C O a m 5 a) d 0 E 0 O s O a -mm O N O m s co) W (� U U O U N 0' c 0 0 c da Oj �. c N LO a) Co E 2 C Co m @ m Ya m m m- E `y > C C a c IDa N m 2 O 'E a m ate) > 0) O o m m 0 m x a o m m-C - d C a)d a C m p m = �� m ri m E. .0. r E m O- @ m @ w m 4) 0) 4) (� a) O H U m O N O m N Z 0 0 J Z F J F J KIIZI] CITY OF RANCHO CUCAMONGA Pledged -Revenue Coverage Last Ten Fiscal Years (In Thousands) Tax Allocation Bonds Fiscal Year Ended Tax Debt Service June 30 Increment Principal Interest Coverage 2010 77,255 8,665 20,547 2.64 2011 69,583 9,070 20,122 2.38 2012 2 51,609 9,520 9,950 2.65 2013 2 n/a n/a n/a n/a 2014 2 n/a n/a n/a n/a 2015 2 n/a n/a n/a n/a 2016 2 n/a n/a n/a n/a 2017 2 n/a n/a n/a n/a 2018 2 n/a n/a n/a n/a 2019 2 n/a n/a n/a n/a Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Tax increment figures are net of related pass -through payments. 2 As a result of the dissolution of the Redevelopment Agency on January 2012 indebtedness was transferred to the Successor Agency. 201 CITY OF RANCHO CUCAMONGA Demographic and Economic Statistics Last Ten Calendar Years Per Personal Capita Income' Personal Unemployment Calendar Population (in thousands) Income' Rate Year (1) (2) (2) (3) 2009 177,051 5,080,143 28,693 8.6% 2010 178,904 5,377,675 30,059 9.4% 2011 169,498 5,190,707 30,624 8.7% 2012 171,058 5,341,115 31,224 6.2% 2013 172,299 5,335,755 30,968 5.4% 2014 174,064 5,402,772 31,039 6.0% 2015 175,251 5,365,133 30,613 4.8% 2016 177,324 5,317,032 29,984 4.2% 2017 176,671 5,586,992 31,623 3.9% 2018 179,412 5,767,788 32,148 3.1% Sources: (1) California State Department of Finance (2) 2000-2009 Income Data: ESRI; 2010 and later Income Data: U.S. Census Bureau (3) California Employment Development Department 202 CITY OF RANCHO CUCAMONGA Principal Employers Current Year and Nine Years Ago* 2019 Number of Employer Employees, Rank Etiwanda School District 2,387 1 Chaffey Community College 2,120 2 Inland Empire Health Plan 2,078 3 Mission Foods 950 4 Alta Loma School District 940 5 City of Rancho Cucamonga 761 6 Amphastar Pharmaceutical 657 7 Mercury Insurance Company 640 8 Macy's 625 9 Central School District 608 10 Bass Pro Shop 500 11 Coca Cola Bottling Co. 400 12 ADECCO 360 13 Percent of Total Number of 2.55% 2.27% 2.22% 1.02% 1.01% 0.81 % 0.70% 0.68% 0.67% 0.65% 0.53% 0.43% 0.39% n/a 871 n/a n/a 690 874 880 606 n/a n/a 500 n/a n/a 2010 Percent of Total Rank Employment n/a n/a 3 1.24% n/a n/a n/a n/a 5 0.98% 2 1.24% 1 1.25% 6 0.86% n/a n/a n/a n/a 10 0.71 % n/a n/a n/a n/a Note: "Total Employment" as used above represents the total employment of all employers located within City limits. Includes full-time and part-time employees. *Only the top ten employers for each year presented have data displayed. If a company did not rank in the top ten employers for both years presented, then one of the two years will state ' n/a". 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