Agenda - City of Santa Monica
Agenda - City of Santa Monica
Agenda - City of Santa Monica
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CITY OF SANTA MONICA<br />
REGULAR CITY COUNCIL MEETING AGENDA AND<br />
(REGULAR MEETING OF THE REDEVELOPMENT<br />
SUCCESSOR AGENCY CANCELLED)<br />
CITY HALL COUNCIL CHAMBERS - 1685 MAIN STREET<br />
TUESDAY, APRIL 23, 2013<br />
MEETING BEGINS AT 5:30 P.M.<br />
CALL TO ORDER<br />
PLEDGE OF ALLEGIANCE<br />
ROLL CALL<br />
(Please note that <strong>Agenda</strong> Items may be reordered during the Council meeting at the<br />
discretion <strong>of</strong> the <strong>City</strong> Council.)<br />
1. CLOSED SESSIONS:<br />
1-A:<br />
1-B:<br />
1-C:<br />
Conference with Legal Counsel – Anticipated Litigation: Anticipate<br />
significant exposure to litigation pursuant to Government Code Section<br />
54956.9 (d)(2) – 4 Cases - 1) Claim <strong>of</strong> Danny Galvan & Sandra Ramirez –<br />
Claim Number 12-1050 2) 2009 La Mesa 3)Regional Water Quality<br />
Control Board - <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Order and Proposed Settlement No.<br />
R4-2011-0185M (Hydraugers Installation Project Palisades Bluff) 4) 1<br />
case<br />
Conference with Legal Counsel – Existing Litigation – Litigation has been<br />
initiated formally pursuant to Government Code Section 54956.9 (d)(1) -<br />
<strong>Santa</strong> <strong>Monica</strong> Lodge No. 906, Benevolent and Protective Order <strong>of</strong> Elks <strong>of</strong><br />
the United States <strong>of</strong> America v. <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, Los Angeles Superior<br />
Case Number BC 483305.<br />
Threat to Public Services or Facilities:<br />
Consultation with Police Chief Seabrooks<br />
The following is the order <strong>of</strong> business for items to be heard no earlier than 6:30 p.m.<br />
1<br />
April 23, 2013
SPECIAL AGENDA ITEMS:<br />
2-A:<br />
2-B:<br />
Recognition <strong>of</strong> April 2013 as Fair Housing Month<br />
A presentation from Grades <strong>of</strong> Green/Muir/SMASH<br />
3. CONSENT CALENDAR: (All items will be considered and approved in one motion<br />
unless removed by a Councilmember for discussion.)<br />
3-A:<br />
3-B:<br />
3-C:<br />
3-D:<br />
3-E:<br />
Approval <strong>of</strong> minutes <strong>of</strong> the November 27, and the December 11, 2012, <strong>City</strong><br />
Council meetings.<br />
Authorization from the <strong>City</strong> Manager to negotiate and execute a License<br />
Agreement with Cirque du Soleil for Use <strong>of</strong> a Portion <strong>of</strong> the 1550 PCH<br />
Parking Lot – recommendation to authorize the <strong>City</strong> Manager to negotiate and<br />
execute a proposed License Agreement with Cirque du Soleil for use <strong>of</strong> a portion<br />
<strong>of</strong> the 1550 PCH parking lot for theatrical performances from January 2 through<br />
March 29, 2014.<br />
2525 Michigan Purchase and Sale <strong>of</strong> Parcel – recommendation to authorize<br />
the <strong>City</strong> Manager to negotiate and execute a purchase and sale agreement with<br />
the Exposition Construction Authority to sell a 19,389-square-foot portion <strong>of</strong> <strong>City</strong>owned<br />
property at 2525 Michigan Avenue for the construction and operation <strong>of</strong><br />
the Exposition Light Rail Transit station.<br />
Agreement with MuniServices, LLC for Utility Users Tax and Franchise Fee<br />
Audit and Revenue Enhancement Services – recommendation to authorize<br />
the <strong>City</strong> Manager to negotiate and execute a contract with MuniServices, LLC for<br />
a fixed fee component <strong>of</strong> $425,000 for a five year term plus a contingency fee<br />
component for certain specific audits for the <strong>City</strong> for Utility Users Tax (UUT) and<br />
Franchise Fee audit and revenue enhancement services.<br />
Award Construction Contracts for Lincoln Boulevard Resurfacing Project,<br />
Federal Aid Project No. STPL-5107 (034) – recommendation to authorize the<br />
<strong>City</strong> Manager to negotiate and execute a contract with Sully-Miller Contracting<br />
Co., in an amount not to exceed $2,010,872 for the resurfacing <strong>of</strong> Lincoln<br />
Boulevard from the <strong>Santa</strong> <strong>Monica</strong> Freeway to the southern <strong>City</strong> limit; authorize<br />
the <strong>City</strong> Manager to negotiate and execute a contract with Onward Engineering,<br />
in an amount not to exceed $176,000 for construction management and<br />
inspection services for the resurfacing <strong>of</strong> Lincoln Boulevard; authorize the<br />
issuance <strong>of</strong> an after-hours construction permit to perform work between the<br />
hours <strong>of</strong> 8 PM and 6 AM, Monday through Friday over the project duration,<br />
contingent on satisfying notification requirements as contained in <strong>Santa</strong> <strong>Monica</strong><br />
Municipal Code 4.12.110; and authorize the Director <strong>of</strong> Public Works to issue<br />
any necessary change orders to complete additional work within budget<br />
authority.<br />
2<br />
April 23, 2013
3-F:<br />
3-G:<br />
Agreement Modification for Environmental Services for <strong>City</strong> Corporation<br />
Yard and Olympic Well Field – recommendation to authorize the <strong>City</strong> Manager<br />
to negotiate and execute a third modification to Agreement No. 8914 (CCS) with<br />
ICF Consulting Services, LLC, in the amount <strong>of</strong> $1,370,805 to provide<br />
groundwater monitoring, well installation, technical oversight, and support<br />
services for Olympic Well Field; and appropriate the budget increases as<br />
outlined in the Financial Impacts and Budget Actions <strong>of</strong> this report.<br />
Presentation <strong>of</strong> Independent Auditor Report - recommendation that the <strong>City</strong><br />
Council receive and file the independent auditors’ unqualified audit report for the<br />
<strong>City</strong>’s financial statements for the fiscal year ended June 30, 2012 and the<br />
attached Auditor’s Letter to Council.<br />
REGULAR MEETING OF THE REDEVELOPMENT SUCESSOR AGENCY<br />
ROLL CALL<br />
3-H:<br />
Cancelled, no business to consider.<br />
ADJOURNMENT<br />
7. ORDINANCES: (Public comment is permitted on ordinances for introduction and<br />
first reading. No public discussion is permitted on ordinances for second reading and<br />
adoption.)<br />
7-A:<br />
7-B:<br />
Second reading and adoption <strong>of</strong> an Ordinance Amending Section 6.36.095 <strong>of</strong><br />
the Municipal Code Related to Late Night Vending on Main Street. (Introduced<br />
on April 9, 2013)<br />
Second reading and adoption <strong>of</strong> an Ordinance Amending Articles III and VI <strong>of</strong><br />
the <strong>Santa</strong> <strong>Monica</strong> Municipal Code Regarding Licensing and Regulation <strong>of</strong><br />
Pedicabs. (Introduced on April 9, 2013)<br />
8. STAFF ADMINISTRATIVE ITEMS:<br />
8-A:<br />
Options for Addressing Use <strong>of</strong> <strong>City</strong> Parks and the Beach for Commercial<br />
Fitness Instruction, Classes or Camps – recommendation that the <strong>City</strong><br />
Council review and comment on a proposed regulatory system to address the<br />
use <strong>of</strong> <strong>City</strong> parks and the beach for commercial fitness instruction, classes or<br />
camps; and direct staff to prepare an amendment to Chapter 4.55 <strong>of</strong> the<br />
Municipal Code to create a new regulatory structure, permit system and use<br />
charges for all commercial fitness instruction, classes or camps in <strong>City</strong> parks and<br />
the beach.<br />
3<br />
April 23, 2013
8-B:<br />
Modification to Development Agreement Application Process to Require<br />
Separate Architectural Review Board and Planning Commissions Float<br />
Ups– recommendation that Council modify the recently adopted Development<br />
Agreement application review process to require separate Architectural Review<br />
Board and Planning Commissions float ups rather than one combined float up.<br />
9. PUBLIC HEARINGS:<br />
9-A:<br />
Public Hearing and Approval <strong>of</strong> the Proposed FY 2013-14 One-Year Action<br />
Plan Allocating Federal Community Development Block Grant (CDBG) and<br />
HOME Investment Partnership Act Program (HOME) Entitlement Grant<br />
Funds – recommendation that the <strong>City</strong> Council hold a public hearing, receive<br />
public comment, and approve the Proposed FY 2013-14 One-Year CDBG and<br />
HOME Action Plan; and authorize the <strong>City</strong> Manager to submit all documents<br />
required to receive the <strong>City</strong>’s annual Community Development Block Grant and<br />
Home Investment Partnerships Act entitlement grant funds to the U.S.<br />
Department <strong>of</strong> Housing and Urban Development.<br />
13. COUNCILMEMBER DISCUSSION ITEMS:<br />
13-A: Appointment to one unscheduled vacancy on the Airport Commission for a<br />
term ending on June 30, 2014.<br />
13-B: Recommendation to accept Albin Gielicz’s resignation from the Social<br />
Services Commission and authorize the <strong>City</strong> Clerk to publish the vacancy.<br />
13-C: Request <strong>of</strong> Councilmembers O'Day and Winterer that to help to achieve the<br />
goals <strong>of</strong> our Climate Action Plan the Council direct staff that development<br />
agreement negotiations should seek from projects the greatest amount <strong>of</strong><br />
photovoltaic panels feasible given the ro<strong>of</strong>top configuration and<br />
orientation <strong>of</strong> proposed buildings.<br />
13-D: Request <strong>of</strong> Councilmembers McKeown, Winterer, and Davis that staff<br />
negotiate more aggressive Average Vehicle Ridership (AVR) targets in<br />
Development Agreements, especially for employees in projects along the<br />
Expo Corridor, with periodic performance reviews, options for higher AVR<br />
targets as local standards evolve and enhanced compliance incentives<br />
after successive years in which a project fails to achieve its AVR targets.<br />
13-E: Request <strong>of</strong> Councilmembers McKeown, Winterer and Vazquez that Council<br />
direct staff to explore how best to prohibit and prevent relocation and other<br />
settlement agreements with tenants which are in any way conditioned on<br />
the tenants' agreement to forego legal rights to communicate with or<br />
petition their government or elected or appointed <strong>of</strong>ficials, or to testify at<br />
hearings regarding projects that may displace their homes.<br />
4<br />
April 23, 2013
14. PUBLIC INPUT: (Public comment is permitted only on items not on the agenda<br />
that are within the subject matter jurisdiction <strong>of</strong> the <strong>City</strong>. State law prohibits the <strong>City</strong><br />
Council from taking any action on items not listed on the agenda, including issues<br />
raised under this agenda item.)<br />
ADJOURNMENT.<br />
Any documents produced by the <strong>City</strong> and distributed to a majority <strong>of</strong> the <strong>City</strong> Council<br />
regarding any item on this agenda will be made available at the <strong>City</strong> Clerk's Counter<br />
located at <strong>City</strong> Hall, 1685 Main Street, <strong>Santa</strong> <strong>Monica</strong>, and at the <strong>City</strong>’s public libraries<br />
during normal business hours. Documents are also available at<br />
http://www.smgov.net/departments/clerk/agendas.aspx.<br />
For a free subscription to <strong>City</strong> Council <strong>Agenda</strong>s sign up at http://www01.smgov.net/win<br />
or call the <strong>City</strong> Clerk’s Office at (310) 458-8211.<br />
Any member <strong>of</strong> the public unable to attend a meeting but wishing to comment on an<br />
item(s) listed on the agenda may submit written comments prior to the meeting by<br />
mailing them to: <strong>City</strong> Clerk, 1685 Main Street, <strong>Santa</strong> <strong>Monica</strong>, CA 90401. Comments<br />
may also be e-mailed to: clerk@smgov.net<br />
Si desea comunicarse con alguien en español, llame a nuestra <strong>of</strong>icina al (310) 458-8211 y<br />
pida hablar con Esterlina Lugo.<br />
<strong>City</strong> Hall and the Council Chamber is wheelchair accessible. If you require any special<br />
disability related accommodations (i.e. sign language interpreting, access to an<br />
amplified sound system, etc.), please contact the <strong>City</strong> Clerk’s Office at (310) 458-8211<br />
or TDD: (310) 917-6626 at least 3 days prior to the scheduled meeting. This agenda is<br />
available in alternate format upon request by calling the <strong>City</strong> Clerk’s Office.<br />
Parking is available in front <strong>of</strong> <strong>City</strong> Hall and on Olympic Drive and in the Civic Center<br />
Parking Structure (validation free).<br />
5<br />
April 23, 2013
(NOT APPROVED)<br />
CITY OF SANTA MONICA<br />
CITY COUNCIL MINUTES<br />
TUESDAY, NOVEMBER 27, 2012<br />
A regular meeting <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> <strong>City</strong> Council was called to order by Mayor Bloom at 5:33 p.m., on<br />
Tuesday, November 27, 2012, at <strong>City</strong> Council Chambers, 1685 Main Street.<br />
Roll Call: Present: Mayor Richard Bloom<br />
Mayor Pro Tem Gleam Davis<br />
Councilmember Pam O’Connor (arrived at 5:54 p.m.)<br />
Councilmember Robert T. Holbrook<br />
Councilmember Kevin McKeown<br />
Councilmember Terry O’Day<br />
Councilmember Bobby Shriver<br />
Also Present:<br />
CONVENE/PLEDGE<br />
CLOSED SESSIONS<br />
Councilmember O’Connor<br />
arrived at 5:54 p.m.<br />
<strong>City</strong> Manager Rod Gould<br />
<strong>City</strong> Attorney Marsha Jones Moutrie<br />
<strong>City</strong> Clerk Sarah Gorman<br />
On order <strong>of</strong> the Mayor, the <strong>City</strong> Council convened at 5:33 p.m., with<br />
Councilmember O’Connor absent. Councilmember Shriver led the<br />
assemblage in the Pledge <strong>of</strong> Allegiance.<br />
Member <strong>of</strong> the public Denise Barton commented on Closed Session Item<br />
1-D.<br />
On order <strong>of</strong> the Mayor, the <strong>City</strong> Council recessed at 5:35 p.m., to consider<br />
closed sessions and convened at 6:40 p.m., with all members present, to<br />
report the following:<br />
1-A:<br />
Conference with Legal Counsel – Anticipated Litigation:<br />
Anticipate significant exposure to litigation pursuant to<br />
Government Code Section 54956.9 (b)- 2 cases: 1) Village<br />
Trailer Park and 1 case<br />
The <strong>City</strong> Attorney Marsha Moutrie reported that this item was heard with<br />
no reportable action taken.<br />
1-B:<br />
Conference with Legal Counsel – Anticipated Litigation:<br />
Consideration <strong>of</strong> whether to initiate litigation pursuant to<br />
Government Code Section 54956.9 (c) – 1 case<br />
1 November 27, 2012
The <strong>City</strong> Attorney Marsha Moutrie reported that this item was heard with<br />
no reportable action taken.<br />
1-C: Conference with Legal Counsel – Existing Litigation: Lamle v.<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, et al., United States District Court, Case<br />
No. CV 04-06355 HGK (SHx).<br />
The <strong>City</strong> Attorney Marsha Moutrie reported that this item was heard with<br />
no reportable action taken.<br />
SPECIAL AGENDA<br />
ITEMS:<br />
CONSENT CALENDAR:<br />
2-A: Special Recognition <strong>of</strong> Mayor Richard Bloom and Councilmember<br />
Bobby Shriver, was presented.<br />
All items were considered and approved in one motion unless removed by a<br />
Councilmember for discussion.<br />
Members <strong>of</strong> the public Joy Fullmer, Denise Barton, Adam Pines, Ruthann<br />
Lehrer, Jerry Rubin, Diane Dykema, Alex DeGood, Peter Nelson, Dick<br />
Newman, Richard Corlin, and Harvey Eder commented on various Consent<br />
Calendar items.<br />
Motion by Councilmember McKeown, seconded by Mayor Pro Tem Davis,<br />
to approve the Consent Calendar, except for Item 3-J, reading resolutions<br />
by title only and waiving further reading there<strong>of</strong>. The motion was<br />
approved by the following vote:<br />
AYES: Councilmembers Shriver, O’Connor, Holbrook, O’Day,<br />
McKeown, Mayor Pro Tem Davis, Mayor Bloom<br />
NOES: None<br />
ABSENT: None<br />
MINUTES<br />
PIER TELESCOPES AND<br />
BINOCULARS<br />
CUSTODIAL SUPPLIES<br />
3-A: The minutes for the September 11, 2012, <strong>City</strong> Council meeting, were<br />
approved as submitted.<br />
3-B: Coin-Operated Telescopes and Binoculars on the <strong>Santa</strong> <strong>Monica</strong><br />
Pier and Palisades Park – recommendation to authorize the <strong>City</strong> Manager<br />
to negotiate and execute License Agreement No. 9666 (CCS) with Fare<br />
Share Enterprises for the installation and maintenance <strong>of</strong> new coinoperated<br />
telescopes and binoculars on the <strong>Santa</strong> <strong>Monica</strong> Pier and Palisades<br />
Park, was approved.<br />
3-C: <strong>City</strong>wide Custodial Supplies – recommendation to award Bid No.<br />
4035 to Clean Source, Empire Cleaning Supply, Royal Corporation, and<br />
Staples, in the cumulative annual amount <strong>of</strong> $405,000 for the purchase <strong>of</strong><br />
custodial supplies with an amount not to exceed $1,215,000 over a threeyear<br />
period, was approved.<br />
2 November 27, 2012
HYDRAULIC<br />
FRACTURING<br />
3-D: Resolution for a Moratorium on Hydraulic Fracturing in<br />
California – recommendation to adopt Resolution No. 10720 (CCS)<br />
entitled: “A Resolution Of The <strong>City</strong> Council Of The <strong>City</strong> Of <strong>Santa</strong> <strong>Monica</strong><br />
In Support Of A Moratorium On Hydraulic Fracturing (Fracking),” was<br />
adopted.<br />
RUSTY’S LEASE 3-E: 256 <strong>Santa</strong> <strong>Monica</strong> Pier Leasehold (Rusty’s) – recommendation to<br />
authorize the <strong>City</strong> Manager to negotiate and execute Amended and<br />
Restated Lease Agreement No. 9667 (CCS) with Hospitality Industry<br />
Management Group, LLC d.b.a. Rusty’s Surf Ranch for 256 <strong>Santa</strong> <strong>Monica</strong><br />
Pier, was approved.<br />
ASPHALT BID 3-F: Bid Award for the Purchase <strong>of</strong> Asphalt Materials for Street<br />
Maintenance – recommendation award Bid No. 3098 to Vulcan Materials<br />
Company, in the amount <strong>of</strong> $155,000 for FY 2012-13 for the purchase and<br />
delivery <strong>of</strong> asphalt materials, with one additional one-year renewal option<br />
in the amount <strong>of</strong> $250,000, for a total amount not to exceed $405,000 over<br />
a two-year period, was approved.<br />
WATERPROOFING BID 3-G: Bid Award for Waterpro<strong>of</strong>ing Services at Various <strong>City</strong><br />
Facilities – recommendation to award Bid No. 4037 to Surfside<br />
Restoration & Waterpro<strong>of</strong>ing, as the primary contractor; and Allstate<br />
Engineering, as the secondary contractor, in a cumulative amount not to<br />
exceed $75,000 for FY 2012-13 for waterpro<strong>of</strong>ing services at various <strong>City</strong><br />
facilities, with two one-year options to renew, for a cumulative amount not<br />
to exceed $225,000 over a three-year period, was approved.<br />
BERGAMOT REQUEST<br />
FOR PROPOSALS<br />
3-H: Request for Proposals for Bergamot Station Arts Center<br />
Development - recommendation that the <strong>City</strong> Council adopt the project<br />
objectives listed and authorize staff to issue a Request for Proposals (RFP)<br />
to development teams led by Bergamot Station Ltd./Worthe Real Estate<br />
Group, Lionstone Group/Industry Ltd. And Rethink Development/Kor<br />
Group for development <strong>of</strong> the <strong>City</strong>-owned property located at 2525<br />
Michigan Avenue, home to the Bergamot Station Arts Center, was<br />
approved.<br />
GEOTECH TESTING 3-I: Amend Contract for Geotechnical Testing Services for Civic<br />
Center Parks – recommendation authorize the <strong>City</strong> Manager to negotiate<br />
and execute a first modification to Pr<strong>of</strong>essional Services Agreement No.<br />
9395 (CCS) with Koury Engineering & Testing, in an amount not to exceed<br />
$86,460 to provide additional geotechnical testing services for the Civic<br />
Center Parks (Palisades Garden Walk and Ken Genser Square Project),<br />
resulting in a new agreement in the amount <strong>of</strong> $155,030, was approved.<br />
BIN TRUCKS 3-K: Bid Award for Purchase <strong>of</strong> Three Bin Trucks – recommendation<br />
to award Bid No. F4028 to Wondries Fleet Group in the amount <strong>of</strong><br />
$127,183, for the purchase and delivery <strong>of</strong> three bin trucks to the Resource<br />
Recovery and Recycling Division, was approved.<br />
3 November 27, 2012
RESIDENT SURVEY 3-L: Amend Agreement for Bi-Annual Resident Survey for FY 2012-<br />
13 – recommendation to authorize the <strong>City</strong> Manager to negotiate and<br />
execute Pr<strong>of</strong>essional Services Agreement No. 9668 (CCS) with Fairbank,<br />
Maslin, Maullin, Metz & Associates (FM3), in the amount <strong>of</strong> $30,495 to<br />
conduct the bi-annual resident survey for FY 2012-13, resulting in an<br />
agreement for conducting two bi-annual resident surveys in the amount <strong>of</strong><br />
$60,990, was approved.<br />
BANKING SERVICES 3-M: Banking Services Agreement with Wells Fargo Bank –<br />
recommendation to authorize the <strong>City</strong> Manager to negotiate and execute<br />
Contract No. 9669 (CCS) with Wells Fargo Bank, in an amount not to<br />
exceed $375,000 for banking services over a five year term, was approved.<br />
2009 LA MESA DRIVE<br />
3-J: New Mills Act Contract at 2009 La Mesa Drive –<br />
recommendation to adopt a Resolution authorizing the <strong>City</strong> Manager to<br />
negotiate and execute a Historic Property Preservation Agreement (Mills<br />
Act Contract) between the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> and the property owner <strong>of</strong><br />
the designated <strong>City</strong> Landmark at 2009 La Mesa Drive, was presented.<br />
Mayor Pro Tem Davis removed this item to question staff regarding timing<br />
and Mills Act issues.<br />
Discussion ensued regarding the Mills Act process, code compliance, and<br />
related issues. Direction was given to staff.<br />
Motion by Mayor Pro Tem Davis, seconded by Councilmember O’Connor,<br />
to continue the item to December 11 th and direct staff to research code<br />
compliance and interior historic features. The motion was approved by the<br />
following vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
Councilmembers McKeown, O’Day, Holbrook, O’Connor,<br />
Mayor Pro Tem Davis, Mayor Bloom<br />
Shriver<br />
None<br />
Councilmember Holbrook requested that the item be heard on December<br />
11 th in Closed Session.<br />
ORDINANCES:<br />
2930 COLORADO AVE.<br />
7-A:<br />
Second reading and adoption <strong>of</strong> Ordinance No. 2414 (CCS)<br />
entitled: “AN ORDINANCE OF THE CITY COUNCIL OF THE<br />
CITY OF SANTA MONICA APPROVING THE<br />
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF<br />
SANTA MONICA, A MUNICIPAL CORPORATION, VILLAGE<br />
TRAILER PARK LLC, A CALIFORNIA LIMITED LIABILITY<br />
COMPANY, AND VILLAGE TRAILER PARK INC., A<br />
CALIFORNIA CORPORATION,” was presented.<br />
4 November 27, 2012
Motion by Mayor Bloom, seconded by Councilmember O’Connor, to adopt<br />
the Ordinance No. 2414 (CCS), reading by title only and waiving further<br />
reading there<strong>of</strong>. The motion was approved by the following vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
ABSTAIN:<br />
Councilmembers O’Connor, Holbrook, O’Day,<br />
Mayor Bloom<br />
Mayor Pro Tem Davis, Councilmember McKeown<br />
None<br />
Shriver<br />
Mayor Pro Tem Davis stated, for the record, that her “no” vote was based<br />
in large part on the fact that the Council was not provided with on-site<br />
appraisals and without these appraisals, she could not fully analyze the<br />
tenant impact report and tenant relocation packages.<br />
Councilmember McKeown stated, for the record, that his “no” vote was to<br />
reflect his opposition to removal <strong>of</strong> vulnerable senior homeowners and<br />
because this agreement fails to meet even the <strong>City</strong>’s minimum adopted<br />
policy for affordable housing production. He stated that Council should<br />
have waited to hear this after the Bergamot Area Plan and for a new<br />
Council. He stated that he was then changing his vote to yes to reflect<br />
Council Rules that provide only a member who voted for the prevailing<br />
side <strong>of</strong> an item to bring a motion for consideration <strong>of</strong> the item at later<br />
meeting.<br />
The motion was approved by the following vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
ABSTAIN:<br />
Councilmembers O’Connor, Holbrook, O’Day, McKeown<br />
Mayor Bloom<br />
Mayor Pro Tem Davis,<br />
None<br />
Shriver<br />
STAFF<br />
ADMINISTRATIVE<br />
ITEMS:<br />
EXPO MAINTENANCE<br />
FACILITY<br />
8-A: Tri-Party Real Estate Exchange to Create Buffer Area Adjacent<br />
to Exposition Light Rail Phase 2 Maintenance Facility -<br />
recommendation to authorize the <strong>City</strong> Manager to negotiate and execute<br />
real estate and ancillary Agreement No. 9670 (CCS) with <strong>Santa</strong> <strong>Monica</strong><br />
College and Agreement No. 9671 (CCS) with the Exposition Metro Line<br />
Construction Authority related to the purchase, lease, and exchange <strong>of</strong> real<br />
estate interests in properties located at 2909 Exposition Blvd, 2900<br />
Exposition Blvd and 3400/3500 Airport Avenue, to allow for the creation<br />
<strong>of</strong> the proposed buffer area adjacent to the proposed Phase 2 Exposition<br />
Light Rail Maintenance Facility, was presented.<br />
Members <strong>of</strong> the public Christel Andersen, Zina Josephs, and Irma Carranza<br />
spoke regarding the recommendation.<br />
Motion by Mayor Pro Tem Davis, seconded by Councilmember Holbrook,<br />
5 November 27, 2012
to approve the recommendation. The motion was approved by the<br />
following vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
Councilmembers Shriver, O’Connor, Holbrook, O’Day,<br />
McKeown, Mayor Pro Tem Davis, Mayor Bloom<br />
None<br />
None<br />
3402 PICO BLVD FLOAT-<br />
UP<br />
Councilmember O’Connor<br />
was excused at 10:26 pm.<br />
8-B: Development Agreement float-up for a new mixed-use project<br />
at 3402 Pico Boulevard – recommendation that <strong>City</strong> Council discuss the<br />
applicant’s Development Agreement proposal and provide direction<br />
regarding the appropriateness <strong>of</strong> the site development and potential<br />
community benefits; initiate the Development Agreement negotiation and<br />
review process between the <strong>City</strong> and Developer, was presented.<br />
Members <strong>of</strong> the public Clare Thomas, Adam Gross, Leslee Mickshaw,<br />
Diane Kuyoomjian, Jack Gregory, Frans Klinkenberg, Chris Bailey, Nancy<br />
Morse, Elena Estrin, Steve Kandell, Ted Hutman, Jennifer Kozicki, Lori<br />
Goldstein, Victor Gonzales, Debbie Miller, Grace Phillips, Andrew Stolz,<br />
Cathy McCabe, Terry Draut, Armen Melkonians, Krantz Jody, Christen<br />
Andersen, Jennifer Polhemus, Jan Flack, Joe Perches, Sally Allen, Joanne<br />
Curtis, Cathy Larson, Zina Josephs, Larry Arreola, Jeff Gottesman, Paula<br />
Mazur, Robert Mickfelson, David Engelberg, Steve Duron, Andrea Hricko<br />
and Irma Carranza spoke in opposition to the recommendation or suggested<br />
more study is needed before moving forward on this matter.<br />
Discussion ensued on topics including EIRs, community benefits, health<br />
issues to prospective residents, and alternative uses <strong>of</strong> the site.<br />
Motion by Davis, seconded by Councilmember O’Day, to direct staff and<br />
the developer to do an Environmental Impact Report, and amongst the<br />
alternatives in the EIR would be a purely commercial use <strong>of</strong> the property, a<br />
much smaller mixed residential / commercial use, and other alternatives<br />
either required or appropriate under CEQA. In addition, staff and the<br />
developer would, at the developer’s cost, engage in study <strong>of</strong> the impacts <strong>of</strong><br />
being so close to a freeway in whatever use for the property so that the<br />
health effects <strong>of</strong> the use can be evaluated; staff would not negotiate<br />
community benefits or development agreement at this time. The motion<br />
was approved by the following vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
Councilmembers Shriver, Holbrook, O’Day, McKeown,<br />
Mayor Pro Tem Davis, Mayor Bloom<br />
None<br />
O’Connor<br />
PUBLIC HEARINGS:<br />
HOMELESS SERVICES<br />
9-A: Public Hearing <strong>of</strong> the Annual Review <strong>of</strong> the <strong>City</strong>’s Plan for<br />
Homeless Services – recommendation that the <strong>City</strong> Council: Hold a public<br />
hearing and receive public comment on the Annual Review <strong>of</strong> the <strong>City</strong>’s<br />
6 November 27, 2012
Plan for Homeless Services, pursuant to the Municipal Code; Review and<br />
comment on strategies to address homelessness; and, direct staff to proceed<br />
with next steps, was presented.<br />
Member <strong>of</strong> the public Valecia Adams commented on this matter.<br />
After discussion, on order <strong>of</strong> the Mayor, the information was received and<br />
filed.<br />
FAIR HOUSING CHOICE 9-B: Analysis <strong>of</strong> Impediments to Fair Housing Choice –<br />
recommendation that Council review the Draft Analysis <strong>of</strong> Impediments to<br />
Fair Housing Choice and hold a public hearing, receive public comment<br />
and approve the Draft, was presented.<br />
Members <strong>of</strong> the public Richard Hilton, Denise Barton, and Christel<br />
Andersen commented on the recommendation.<br />
After discussion, on order <strong>of</strong> the Mayor, the information was received and<br />
filed.<br />
COUNCIL ITEMS:<br />
FOSSIL FUEL<br />
INVESTMENTS<br />
13-A: Request <strong>of</strong> Councilmember McKeown that the Council direct<br />
staff to evaluate how best to divest fossil fuel investments from the<br />
<strong>City</strong>'s portfolios, and return with policy options as part <strong>of</strong> the<br />
February mid-year budget review, was presented.<br />
There was no one present for public comment.<br />
Motion by Councilmember McKeown, seconded by Councilmember<br />
O’Day, to approve the recommendation with broader research on socially<br />
responsible investing. The motion was unanimously approved by voice<br />
vote with Councilmember O’Connor absent.<br />
PUBLIC INPUT:<br />
Members <strong>of</strong> the public Denise Barton, Dhun May, Armen Melkonians, and<br />
Primo DeJesus commented on various local issues.<br />
ADJOURNMENT On order <strong>of</strong> the Mayor, the <strong>City</strong> Council meeting was adjourned at 12:48<br />
p.m., with Councilmember O’Connor absent.<br />
ATTEST:<br />
APPROVED:<br />
Sarah Gorman<br />
<strong>City</strong> Clerk<br />
Richard Bloom<br />
Mayor<br />
7 November 27, 2012
(NOT APPROVED)<br />
CITY OF SANTA MONICA<br />
CITY COUNCIL MINUTES<br />
DECEMBER 11, 2012<br />
A special meeting <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> <strong>City</strong> Council was called to order by Mayor Pro Tem Davis at 6:30<br />
p.m., on Tuesday, December 11, 2012, at <strong>City</strong> Council Chambers, 1685 Main Street.<br />
Roll Call: Present: Mayor Pro Tem Gleam Davis<br />
Councilmember Robert T. Holbrook<br />
Councilmember Kevin McKeown<br />
Councilmember Pam O’Connor<br />
Councilmember Terry O’Day<br />
Councilmember Bobby Shriver<br />
Absent:<br />
Also Present:<br />
Mayor Bloom<br />
<strong>City</strong> Manager Rod Gould<br />
<strong>City</strong> Attorney Marsha Jones Moutrie<br />
<strong>City</strong> Clerk Sarah P. Gorman<br />
CONVENE/PLEDGE<br />
SPECIAL AGENDA<br />
ITEMS:<br />
INSTALLATION OF NEW<br />
OFFICERS<br />
On order <strong>of</strong> Mayor Pro Tem Davis, the <strong>City</strong> Council convened at 6:30 p.m.,<br />
with Mayor Bloom absent. Councilmember Shriver led the assemblage in<br />
the Pledge <strong>of</strong> Allegiance.<br />
2-A: Resolution Accepting the Official Canvass and Official<br />
Statement <strong>of</strong> Votes Cast for the Consolidated Municipal Election Held<br />
on November 6, 2012, and Declaring the Results There<strong>of</strong> -<br />
recommendation to adopt Resolution No. 10721 (CCS) accepting the<br />
<strong>of</strong>ficial canvass for the Municipal Election held November 6, 2012, was<br />
presented.<br />
Motion by Councilmember O’Connor, seconded by Councilmember<br />
McKeown to adopt the resolution by title only and waiving further reading<br />
there<strong>of</strong>.<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
Councilmembers Shriver, O’Connor, Holbrook, O’Day,<br />
McKeown, Mayor Pro Tem Davis<br />
None<br />
None<br />
Members <strong>of</strong> the public Joy Fullmer commented on the selection <strong>of</strong> the new<br />
1 December 11, 2012
Mayor and Mayor Pro Tem.<br />
ADJOURNMENT OF<br />
CURRENT COUNCIL<br />
Councilmember Shriver was<br />
excused at 7:25 pm.<br />
On order <strong>of</strong> the Mayor Pro Tem, the <strong>City</strong> Council, as presently constituted,<br />
was adjourned, and the meeting was turned over to <strong>City</strong> Clerk Sarah P.<br />
Gorman.<br />
ATTEST:<br />
APPROVED:<br />
Sarah P. Gorman<br />
<strong>City</strong> Clerk<br />
Gleam Davis<br />
Mayor Pro Tem<br />
ADMINISTRATION OF<br />
OATH OF OFFICE TO<br />
NEWLY ELECTED<br />
OFFICIALS<br />
2-B: Administration <strong>of</strong> oath <strong>of</strong> <strong>of</strong>fice to new <strong>Santa</strong> <strong>Monica</strong>-Malibu<br />
Unified School District Board <strong>of</strong> Education Members.<br />
<strong>City</strong> Clerk Gorman administered the oath <strong>of</strong> <strong>of</strong>fice to newly-elected School<br />
District’s Board <strong>of</strong> Education Members Ben Allen and Maria Leon-<br />
Vazquez. Board member Jose Escarce was not present at the meeting.<br />
2-C: Administration <strong>of</strong> oath <strong>of</strong> <strong>of</strong>fice to new <strong>Santa</strong> <strong>Monica</strong> Rent<br />
Control Board Members.<br />
<strong>City</strong> Clerk Gorman administered the oath <strong>of</strong> <strong>of</strong>fice to newly-elected Rent<br />
Control Board Members Isle Rosenstein and Christopher Walton.<br />
2-D: Administration <strong>of</strong> oath <strong>of</strong> <strong>of</strong>fice to new <strong>Santa</strong> <strong>Monica</strong> <strong>City</strong><br />
Council Members.<br />
<strong>City</strong> Clerk Gorman administered the oath <strong>of</strong> <strong>of</strong>fice to newly-elected <strong>City</strong><br />
Councilmembers Gleam Davis, Terry O’Day, Tony Vazquez, Ted<br />
Winterer.<br />
ELECTION OF THE<br />
MAYOR<br />
On order <strong>of</strong> the <strong>City</strong> Clerk, with the newly constituted <strong>City</strong> Council seated,<br />
the Council meeting was convened at 7:03 p.m., with all members present.<br />
<strong>City</strong> Clerk Gorman opened the floor for nominations for Mayor for the<br />
ensuing two years.<br />
Councilmember Vazquez nominated Councilmember O’Connor as Mayor.<br />
Councilmember O’Day nominated Mayor Pro Tem Davis.<br />
Councilmember Winterer nominated Councilmember McKeown as Mayor.<br />
All nominations failed by the following vote:<br />
O’Connor:<br />
Councilmembers Vazquez, O’Connor, Holbrook<br />
2 December 11, 2012
Davis:<br />
McKeown:<br />
Councilmember O’Day, Mayor Pro Tem Davis<br />
Councilmembers Winterer, McKeown<br />
Councilmember Winterer nominated Councilmember McKeown as Mayor<br />
and Mayor Pro Tem Davis as Mayor Pro Tem for the first year, and for the<br />
second year, Mayor Pro Tem Davis as the Mayor, and Councilmember<br />
O’Connor as the Mayor Pro Tem.<br />
Councilmember Vazquez nominated Councilmember O’Connor as Mayor<br />
for two years.<br />
Councilmember O’Day nominated Mayor Pro Tem Davis as Mayor for two<br />
years.<br />
All nominations failed by the following vote:<br />
McKeown Mayor/Davis Mayor Pro Tem first year, Davis<br />
Mayor/O’Connor Mayor Pro Tem second year: Councilmembers<br />
McKeown, Winterer<br />
O’Connor:<br />
Davis:<br />
Councilmembers Holbrook, O’Connor, Vazquez<br />
Councilmember O’Day, Mayor Pro Tem Davis<br />
Councilmember Vazquez nominated Councilmember O’Connor as Mayor.<br />
Councilmember McKeown nominated Mayor Pro Tem Davis as Mayor for<br />
first year and Councilmember McKeown as Mayor for second year.<br />
Councilmember O’Day nominated Mayor Pro Tem Davis as mayor for two<br />
years.<br />
All nominations failed by the following vote:<br />
Davis Mayor first year/McKeown Mayor second year: Councilmember<br />
Winterer, McKeown<br />
O’Connor:<br />
Davis:<br />
Councilmembers Vazquez, O’Connor, Holbrook<br />
Councilmember O’Day, Mayor Pro Tem Davis<br />
Councilmember Holbrook nominated Councilmember O’Connor as Mayor<br />
for two years.<br />
3 December 11, 2012
Councilmember Winterer nominated Councilmember McKeown as Mayor<br />
for two years.<br />
Councilmember O’Day nominated Mayor Pro Tem Davis as Mayor for two<br />
years.<br />
All nominations failed by the following vote:<br />
O’Connor:<br />
McKeown:<br />
Davis:<br />
Councilmembers Holbrook, O’Connor, Vazquez<br />
Councilmembers McKeown, Winterer<br />
Councilmember O’Day, Mayor Pro Tem Davis<br />
Councilmember Holbrook nominated Councilmember O’Connor as Mayor<br />
for two years.<br />
Councilmember Winterer nominated Councilmember McKeown as Mayor<br />
and Mayor Pro Tem Davis as Mayor Pro Tem for the first year, and for the<br />
second year, Mayor Pro Tem Davis as the Mayor, and Councilmember<br />
O’Connor as the Mayor Pro Tem.<br />
Councilmember O’Connor was appointed as Mayor for a term <strong>of</strong> two years<br />
by the following vote:<br />
McKeown Mayor, Davis Mayor Pro Tem first year/Davis Mayor,<br />
O’Connor Mayor Pro Tem second year: Councilmembers Winterer,<br />
McKeown, Mayor Pro Tem Davis<br />
O’Connor:<br />
Councilmembers Vazquez, O’Connor, Holbrook, O’Day<br />
NEW MAYOR ASSUMES<br />
CHAIR<br />
Mayor O’Connor assumed the Chair and opened the floor for nominations<br />
for Mayor Pro Tem.<br />
Mayor Pro Tem Davis nominated Councilmember O’Day as Mayor Pro<br />
Tem.<br />
Councilmember Winterer nominated Mayor Pro Tem Davis as Mayor Pro<br />
Tem for two years.<br />
Councilmember O’Day was appointed as Mayor Pro Tem for a term <strong>of</strong> two<br />
years by the following vote:<br />
Davis:<br />
O’Day:<br />
Councilmembers McKeown, Winterer<br />
Councilmembers O’Day, Holbrook, Vazquez, Mayor Pro<br />
Tem Davis, Mayor O’Connor<br />
4 December 11, 2012
END OF INSTALLATION<br />
OF NEW OFFICERS<br />
CLOSED SESSIONS<br />
On order <strong>of</strong> the Mayor, the <strong>City</strong> Council meeting continued with the<br />
regular agenda.<br />
Member <strong>of</strong> the public Andrew Hoyer commented on a closed session item.<br />
On order <strong>of</strong> the Mayor, the <strong>City</strong> Council recessed at 7:47 p.m. to consider<br />
closed sessions and returned at 8:31 p.m., with all members present, to<br />
report the following:<br />
1-A: Conference with Legal Counsel – Anticipated Litigation:<br />
Anticipate significant exposure to litigation pursuant to Government<br />
Code Section 54956.9 (b) - 4 cases: 1) Village Trailer Park 2) 2401<br />
Beverly Avenue and 2 cases<br />
<strong>City</strong> Attorney Marsha Moutrie reported that these items were heard with no<br />
reportable action taken, with the exception <strong>of</strong> the 2401 Beverly Avenue<br />
item, which was not heard.<br />
1-B: Conference with Legal Counsel – Anticipated Litigation:<br />
Consideration <strong>of</strong> whether to initiate litigation pursuant to Government<br />
Code Section 54956.9 (c) – 2 cases<br />
<strong>City</strong> Attorney Marsha Moutrie reported that these items were heard with no<br />
reportable action taken.<br />
1-C: Conference with Legal Counsel - Anticipated Litigation:<br />
Initiation <strong>of</strong> Litigation pursuant to Section 54956.9(c): California<br />
Regional Water Quality Control Board, California Water Code<br />
Section 13267 Order- Former Douglas Aircraft Site, 2902 Exposition<br />
Blvd., <strong>Santa</strong> <strong>Monica</strong>, CA 91601 (Site ID 20443H00).<br />
<strong>City</strong> Attorney Marsha Moutrie reported that these items were heard with no<br />
reportable action taken.<br />
REQUEST TO HEAR ITEM<br />
OUT OF ORDER<br />
PLANNING<br />
COMMISSION<br />
At the request <strong>of</strong> Mayor O’Connor, item 13-D was pulled to be heard<br />
before the consent calendar.<br />
13-D: Recommendation to accept Ted Winterer’s resignation from the<br />
Planning Commission and authorize the <strong>City</strong> Clerk to publish the<br />
vacancy.<br />
Motion by O’Connor, seconded by Davis, to accept resignation. The<br />
motion was unanimously approved by voice vote, with all members<br />
present.<br />
CONSENT CALENDAR:<br />
There being a Consent Calendar for the Redevelopment Successor Agency,<br />
5 December 11, 2012
JOINT MEETING WITH<br />
THE REDEVELOPMENT<br />
SUCCESSOR AGENCY<br />
AND THE PARKING<br />
AUTHORITY<br />
and the Parking Authority, the Mayor, with the consensus <strong>of</strong> Council,<br />
combined the Consent Calendars into a joint meeting so as to hear them<br />
concurrently.<br />
Members <strong>of</strong> the public Denise Barton and Christel Anderson commented<br />
on various Consent Calendar items.<br />
Motion by Agency/Authority Member/Councilmember McKeown,<br />
seconded by Agency/Authority Member/Councilmember Holbrook , to<br />
approve the Consent Calendar, reading resolutions by title only and<br />
waiving further reading there<strong>of</strong>, but pulling item 3-J for discussion. The<br />
motion was approved by the following vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
Agency/Authority Member/Councilmembers Vazquez,<br />
Davis, Holbrook, Winterer, McKeown, Chair/Mayor Pro<br />
Tem O’Day, Chair/Mayor O’Connor<br />
None<br />
None<br />
MEETING<br />
CANCELLATION<br />
3-A: Cancellation <strong>of</strong> the December 25, 2012 Regular <strong>City</strong> Council<br />
meeting – recommendation to cancel the regular <strong>City</strong> Council meeting<br />
scheduled for December 25, 2012, was approved.<br />
MEDICAL SERVICES 3-B: Pr<strong>of</strong>essional Medical Services – recommendation to authorize the<br />
<strong>City</strong> Manager to negotiate and execute Pr<strong>of</strong>essional Services Agreement<br />
No. 9673 (CCS) with Westchester Medical Group Center for Heart and<br />
Health, in the amount not to exceed $25,000 for pr<strong>of</strong>essional medical<br />
services, with four additional one-year renewal options in the amount <strong>of</strong><br />
$100,000, for a total amount not to exceed $125,000 over a five-year<br />
period, with future year funding contingent on Council budget approval,<br />
was approved.<br />
ICE RINK 3-C: License for Seasonal Ice Skating Rink – recommendation to<br />
authorize the <strong>City</strong> Manager to negotiate and execute License Agreement No.<br />
9674 (CCS) with Downtown <strong>Santa</strong> <strong>Monica</strong>, Inc., for the continued use <strong>of</strong><br />
<strong>City</strong>-owned property at 1324 5 th Street as a seasonal public ice skating rink<br />
for $1 for the 2013/14 winter season, with options for annual renewals at<br />
the <strong>City</strong>’s discretion, was approved.<br />
WITHDRAWN 3-D: Lease for the Office <strong>of</strong> Emergency Management Warehouse –<br />
recommendation to authorize the <strong>City</strong> Manager to negotiate and execute a<br />
month-to-month lease with 2800 Wilshire Boulevard, LLC. for $1.00 per<br />
month for the storage <strong>of</strong> essential emergency management supplies, was<br />
withdrawn by staff, was approved.<br />
BID NO. 4032 3-E: Purchase <strong>of</strong> Uniforms and Protective Gear – recommendation to<br />
6 December 11, 2012
award Bid No. 4032 to Galls, in the amount <strong>of</strong> $233,613 for the purchase<br />
and delivery <strong>of</strong> Police and Fire Department uniforms and protective gear,<br />
for one year with two additional one-year renewal options for a total<br />
contract amount not to exceed $700,839, with future year funding<br />
contingent on Council budget approval, was approved.<br />
WORKERS’<br />
COMPENSATION<br />
3-F: Modification to Agreement for Workers’ Compensation Data<br />
Analysis Services - recommendation to authorize the <strong>City</strong> Manager to<br />
negotiate and execute pr<strong>of</strong>essional services Agreement No. 9675 (CCS) in the<br />
amount <strong>of</strong> $107,400 with TCS Risk Management Services, for workers’<br />
compensation data analysis services, resulting in a new five-year agreement<br />
in the amount <strong>of</strong> $166,150, was approved.<br />
BID NO. F4034 3-G: Award Bid for Crosswalk Striping Services – recommendation to<br />
award Bid No. F4034 to Super Seal and Stripe, for an amount not to exceed<br />
$460,000 for crosswalk striping services, and to appropriate the budget<br />
increases as outlined in the report, was approved.<br />
BID NO. 4036 3-H: Award Bid for Granular Activated Carbon Replacement<br />
Services – recommendation to award Bid No. 4036 to Carbon Activated<br />
Corporation, in an amount not to exceed $882,000 to provide granular<br />
activated carbon replacement services at the Charnock Well Field for one<br />
year, with two one-year renewal options at a 3% increase in price each year<br />
and an anticipated increase in GAC demand, requiring additional number <strong>of</strong><br />
changeouts each year, for a total amount not to exceed $3,341,000 over a<br />
three-year period, with future year funding contingent on Council budget<br />
approval, was approved.<br />
BID NO. 4033 3-I: On-Call Traffic Signal Repair Service – recommendation to<br />
award Bid No. 4033 to KDC, Inc. dba Dynalectric, Inc., in the amount <strong>of</strong><br />
$43,547 to provide on-call traffic signal maintenance, repair, and<br />
installation services, for a total amount not to exceed $205,516 over a<br />
three-year period, was approved.<br />
JOINT MEETING WITH<br />
THE REDEVELOPMENT<br />
SUCCESSOR AGENCY<br />
AND THE PARKING<br />
AUTHORITY<br />
FINANCIAL SERVICES<br />
3-K: Pr<strong>of</strong>essional Services Agreement with Public Resources<br />
Advisory Group for Financial Advisory Services – authorize the <strong>City</strong><br />
Manager to negotiate and execute pr<strong>of</strong>essional services Agreement No. 9676<br />
(CCS) with Public Resources Advisory Group for an amount not to exceed<br />
$250,000 for financial advisory services for a term <strong>of</strong> five years, on behalf<br />
<strong>of</strong> the <strong>City</strong>, the Redevelopment Successor Agency, and the Parking<br />
Authority, was approved.<br />
1320 FOURTH STREET 3-J: Solicitation <strong>of</strong> Cinema Development Proposals for 1320 Fourth<br />
Street – recommendation to authorize staff to negotiate in the open market<br />
for cinema development at the <strong>City</strong>-owned property at 1320 Fourth Street,<br />
was presented.<br />
7 December 11, 2012
Councilmember Winterer advised that he removed this item to make a<br />
comment regarding strategy. Staff provided information.<br />
Motion by Councilmember Davis, seconded by Mayor Pro Tem O’Day, to<br />
approve the recommendation. The motion was approved by the following<br />
vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
Councilmembers Vazquez, Davis, Holbrook, Winterer,<br />
McKeown, Mayor Pro Tem O’Day, Mayor O’Connor<br />
None<br />
None<br />
CONTINUED ITEMS:<br />
2009 LA MESA DRIVE<br />
5-A: New Mills Act Contract at 2009 La Mesa Drive –<br />
recommendation to adopt a Resolution authorizing the <strong>City</strong> Manager to<br />
negotiate and execute a Historic Property Preservation Agreement (Mills<br />
Act Contract) between the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> and the property owner <strong>of</strong><br />
the designated <strong>City</strong> Landmark at 2009 La Mesa Drive, was presented.<br />
Staff responded to questions from Council.<br />
Members <strong>of</strong> the public Peter Nelson, Ruthann Lehrer, Margaret Bach, Ania<br />
Patterson, Diane Dykema, Dick Newman, Dick Stugger, Carol Lemlein,<br />
and Richard Corlin spoke in opposition to the recommendation.<br />
Members <strong>of</strong> the public Robert Chattel, Jenna Snow, Gary Culotti, Ben<br />
Resnik, Elaine Culotti, and Lanny Hoover spoke in favor <strong>of</strong> the<br />
recommendation.<br />
Discussion ensued on completeness <strong>of</strong> the application, the Landmark<br />
Commission recommendation, and the use <strong>of</strong> the Mills Act for this<br />
property, among other issues. Direction was given to staff.<br />
Motion by Councilmember Davis, seconded by Councilmember Vazquez,<br />
to continue the hearing on the Mills Act application until the resolution <strong>of</strong><br />
the issues <strong>of</strong> third floor space and pool equipment, until the certificate <strong>of</strong><br />
appropriateness has been issued, and until there is a determination that the<br />
garage was built pursuant to the certificate <strong>of</strong> appropriateness.<br />
Substitute motion by Councilmember Holbrook, seconded by Mayor Pro<br />
Tem O’Day, to grant the Mills Act request for a contract and to have staff<br />
negotiate the contract, including any outstanding work to be done. The<br />
substitute motion failed by the following vote:<br />
AYES:<br />
NOES:<br />
Mayor Pro Tem O’Day, Councilmember Holbrook<br />
Councilmember McKeown, Winterer, Davis, Vazquez,<br />
Mayor O’Connor<br />
8 December 11, 2012
ABSENT:<br />
None<br />
The main motion was re-stated and amended by Councilmember Davis to<br />
include resolution <strong>of</strong> the interior defining features <strong>of</strong> the property. The<br />
amendment was accepted as friendly to the seconder. The main motion, as<br />
amended, was approved by the following vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
ABSTAIN:<br />
Councilmembers Vazquez, Davis, Mayor Pro Tem O’Day,<br />
Mayor O’Connor<br />
Councilmembers Winterer and McKeown<br />
None<br />
Councilmember Holbrook<br />
Further staff direction was provided.<br />
STAFF ITEMS:<br />
AFFORDABLE HOUSING<br />
8-A: Affordable Housing Policy – recommendation to (1) direct staff to<br />
prepare an ordinance for Council consideration which establishes an<br />
affordable housing linkage fee for commercial development and to continue<br />
to pursue all other approaches to financing affordable housing; (2) direct<br />
staff to prepare amendments to the Affordable Housing Production<br />
Program to support extremely low-income housing, to establish minimum<br />
occupancy standards, and to allow for for-pr<strong>of</strong>it developers to contract with<br />
non-pr<strong>of</strong>it developers for affordable housing; (3) affirm the existing<br />
approach to establishing income-eligibility limits and calculating rents for<br />
the AHPP; (4) direct staff to cease <strong>of</strong>fering new loans under the TORCA<br />
loan program for lack <strong>of</strong> demand and authorize the <strong>City</strong> Manager to<br />
approve 10-year extensions <strong>of</strong> existing TORCA loans; (5) affirm an<br />
affordable housing monitoring approach that uses a random sampling <strong>of</strong> the<br />
total <strong>City</strong>-funded affordable housing portfolio; and (6) authorize staff to<br />
pursue disposition <strong>of</strong> the <strong>City</strong>-owned property at 1122 22 nd Street and to<br />
explore approaches to the disposition <strong>of</strong> two other <strong>City</strong>-owned properties,<br />
419 Ocean Avenue and Mountain View Mobile Home Park, returning to<br />
Council with specific recommendations, was presented.<br />
Staff responded to questions from Council.<br />
Members <strong>of</strong> the public Denise Barton, Patricia H<strong>of</strong>fman, Ken Ward,<br />
Christel Andersen, Ellen Hannan, and Michael Tarbet spoke regarding the<br />
recommendation.<br />
Discussion ensued regarding the various issues and concerns and direction<br />
was given to staff including, but not limited to: the commercial<br />
housing/linkage fee, new funding sources, AHPP extremely low income,<br />
minimum occupancy, partnership option, and income and rents, TORCA<br />
new loans and loan extensions; monitoring <strong>of</strong> <strong>City</strong>-funded housing; and<br />
properties at 1122 22 nd Street, 419 Ocean Ave, and Mountain View Mobile<br />
9 December 11, 2012
Home Park.<br />
Motion by Councilmember McKeown, seconded by Mayor Pro Tem<br />
O’Day to direct staff to cease <strong>of</strong>fering new loans under the TORCA loan<br />
program for lack <strong>of</strong> demand and authorize the <strong>City</strong> Manager to approve 10-<br />
year extensions <strong>of</strong> existing TORCA loans and authorize staff to pursue<br />
disposition <strong>of</strong> the <strong>City</strong>-owned property at 1122 22 nd Street.<br />
Council provided staff direction and requested new information regarding<br />
the existing approach to establishing income-eligibility limits and<br />
calculating rents for the AHPP.<br />
Motion by Councilmember Winterer, seconded by Mayor Pro Tem O’Day<br />
to direct staff to prepare an ordinance for Council consideration which<br />
establishes an affordable housing linkage fee for commercial development<br />
and to continue to pursue all other approaches to financing affordable<br />
housing; direct staff to prepare amendments to the Affordable Housing<br />
Production Program to support extremely low-income housing, to establish<br />
minimum occupancy standards, and to allow for for-pr<strong>of</strong>it developers to<br />
contract with non-pr<strong>of</strong>it developers for affordable housing; affirm an<br />
affordable housing monitoring approach that uses a random sampling <strong>of</strong> the<br />
total <strong>City</strong>-funded affordable housing portfolio; and authorize staff to<br />
explore approaches to the disposition <strong>of</strong> two other <strong>City</strong>-owned properties,<br />
419 Ocean Avenue and Mountain View Mobile Home Park.<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
Councilmembers McKeown, Winterer, Holbrook, Davis,<br />
Vazquez, Mayor Pro Tem O’Day, Mayor O’Connor<br />
None<br />
None<br />
CONTINUING WITH<br />
REMAINING AGENDA<br />
ITEMS<br />
DEVELOPMENT<br />
AGREEMENTS<br />
CONTINUATION OF<br />
ITEM 8-B<br />
Motion by Councilmember McKeown, seconded by O’Connor, to continue<br />
with the remaining items on the agenda. The motion was approved by<br />
voice vote with Councilmember Holbrook opposed and all members<br />
present.<br />
8-B: Development Agreement Application Processing Procedures<br />
and Consideration <strong>of</strong> Policy Related to Average and Minimum Unit<br />
Sizes in Mixed-Use Residential Developments – recommendation to<br />
approve the proposed slowdown in the processing <strong>of</strong> pending Development<br />
Agreement applications and confirm that average and minimum residential<br />
unit sizes should be sought in Development Agreement negotiations.<br />
Motion by Councilmember Holbrook, seconded by Mayor Pro Tem O’Day,<br />
to continue Item 8-B to the January 8, 2013 Council meeting.<br />
Motion to amend by Councilmember Winterer to apologize to those<br />
waiting for the item.<br />
10 December 11, 2012
Motion by Councilmember Holbrook, seconded by Mayor Pro Tem O’Day<br />
to approve the original motion including the friendly amendment. The<br />
motion was unanimously approved by voice vote, with all members<br />
present.<br />
PUBLIC HEARINGS:<br />
TOURISM DISTRICT<br />
9-A: Formation <strong>of</strong> a <strong>Santa</strong> <strong>Monica</strong> Tourism Marketing District –<br />
recommendation that <strong>City</strong> Council: Hold a public hearing and adopt<br />
Resolution No. 10722 (CCS) <strong>of</strong> Formation to establish the <strong>Santa</strong> <strong>Monica</strong><br />
Tourism Marketing District (SMTMD); and, authorize the <strong>City</strong> Manager to<br />
negotiate and execute Amended and Restated Services Agreement 9240<br />
(CCS) for a term <strong>of</strong> five years between the <strong>City</strong> and the <strong>Santa</strong> <strong>Monica</strong><br />
Convention and Visitors Bureau (CVB) to include CVB’s management <strong>of</strong><br />
the SMTMD, was presented.<br />
Members <strong>of</strong> the public Denise Barton and Christel Andersen spoke in<br />
opposition to the recommendation.<br />
Motion by Councilmember Davis, seconded by Mayor Pro Tem O’Day, to<br />
approve recommendation. The motion was approved by the following<br />
vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
Councilmembers Vazquez, Davis, Holbrook, Winterer,<br />
McKeown, Mayor Pro Tem O’Day, Mayor O’Connor<br />
None<br />
None<br />
COUNCIL ITEMS:<br />
SENIOR COMMUNITY<br />
13-A: Appointment to one unscheduled vacancy on the Commission<br />
for the Senior Community for a term ending on June 30, 2014.<br />
On order <strong>of</strong> the Mayor, the floor was opened for nominations for one<br />
unscheduled vacancy on the Commission for the Senior Community.<br />
Councilmember McKeown nominated Simone Bess Robbins Gordon.<br />
There being no other nominations, Ms. Gordon was appointed by<br />
acclamation, with all members present.<br />
DISABILITIES<br />
COMMISSION<br />
13-B: Appointment to one unscheduled vacancy on the Disabilities<br />
Commission for a term ending on June 30, 2015.<br />
On order <strong>of</strong> the Mayor, the floor was opened for nominations for one<br />
unscheduled vacancy on the Disabilities Commission.<br />
Councilmember Winterer nominated Denise Cecilia Neal.<br />
Councilmember Davis nominated Joseph Carr O’Connor. Councilmember<br />
11 December 11, 2012
McKeown stated that Mr. O’Connor may not meet the qualifications for<br />
this particular seat, and Councilmember Davis withdrew the nomination.<br />
Ms. Neal was appointed by acclamation, with all members present.<br />
MEASURE V<br />
COMMITTEE<br />
13-C: Appointment to three vacancies on the Measure V Citizens<br />
Oversight Committee for terms ending on December 31, 2014.<br />
On order <strong>of</strong> the Mayor, the floor was opened for nominations for three<br />
unscheduled vacancies on Measure V Oversight Committee.<br />
Councilmember McKeown nominated Grace Phillips for reappointment to<br />
the Committee. There being no other nominations, Ms. Phillips was<br />
appointed by acclamation, with all members present.<br />
Councilmember McKeown nominated Kirsten James for an open seat on<br />
the Committee. There being no other nominations, Ms. James was<br />
appointed by acclamation, with all members present.<br />
Councilmember McKeown nominated Steve Duron for an open seat on the<br />
Committee. There being no other nominations, Mr. Duron was appointed<br />
by acclamation, with all members present.<br />
On order <strong>of</strong> the Mayor, and with acclamation from the Council, items 13-E<br />
and 13-F were heard together.<br />
2930 COLORADO<br />
AVENUE<br />
2930 COLORADO<br />
AVENUE<br />
13-E: Request <strong>of</strong> Councilmember McKeown that the Council discuss<br />
and vote whether to reconsider the November 27th adoption on second<br />
reading <strong>of</strong> an ordinance enabling Development Agreement 07-005 and<br />
Tentative Tract Map 12-001 to Allow a Mixed-use Project Consisting<br />
<strong>of</strong> 377 Residential Units (161 Apartments and 216 Condominiums) and<br />
up to 24,940 Square Feet <strong>of</strong> Ground Floor Neighborhood-serving<br />
Retail <strong>of</strong> which up to 4,250 Square Feet Could Be Converted to<br />
Production Space at 2930 Colorado Avenue.<br />
13-F: Request <strong>of</strong> Councilmember McKeown that the Council<br />
reconsider the November 27th adoption on second reading <strong>of</strong> an<br />
ordinance enabling Development Agreement 07-005 and Tentative<br />
Tract Map 12-001 to Allow a Mixed-use Project Consisting <strong>of</strong> 377<br />
Residential Units (161 Apartments and 216 Condominiums) and up to<br />
24,940 Square Feet <strong>of</strong> Ground Floor Neighborhood-serving Retail <strong>of</strong><br />
which up to 4,250 Square Feet Could Be Converted to Production<br />
Space at 2930 Colorado Avenue; and direct staff to continue<br />
negotiations with the developer on issues including alternate<br />
configurations, relocation benefits, and affordable housing<br />
replacement production, and return to the Council at a future date.<br />
12 December 11, 2012
Members <strong>of</strong> the public Sue Himmelrich, Andrew Hoyer, Patricia H<strong>of</strong>fman,<br />
Catherine Eldridge, Ellen Hannan, Christel Andersen, Nancy Morse, Ron<br />
Goldman, Lorrain Sanchez, Zina Josephs, David Engelberg, Ellen Brennan,<br />
Brenda Barnes, Michael Tarbet and John Smith spoke in favor <strong>of</strong> the<br />
recommendation in item 13-F.<br />
Applicant Marc Luzzatto spoke in opposition to the recommendation in<br />
item 13-F.<br />
Considerable discussion ensued regarding affordable housing.<br />
Motion by Councilmember McKeown, seconded by Councilmember<br />
Winterer to reconsider the matter. The motion was approved by the<br />
following vote:<br />
AYES:<br />
NOES:<br />
ABSENT:<br />
Councilmembers Vazquez, Davis, Winterer, McKeown<br />
Councilmember Holbrook, Mayor Pro Tem O’Day,<br />
Mayor O’Connor<br />
None<br />
Motion by Councilmember McKeown, that on reconsideration, Council not<br />
adopt on second reading the ordinance that would enable the Development<br />
Agreement with Village Trailer Park as particularly specified the way the<br />
item is identified in the agenda.<br />
Motion to amend by Councilmember McKeown, seconded by<br />
Councilmember Vazquez, to state that on reconsideration, Council not<br />
adopt on second reading the ordinance that would enable the Development<br />
Agreement as identified in the agenda and that Council rescind and deny<br />
the adoption on November 27 the second reading <strong>of</strong> the ordinance that<br />
approve the Development Agreement.<br />
Motion to amend by Councilmember McKeown to additionally direct staff<br />
to continue to work with the developer on issues including alternate<br />
configurations, relocation benefits, and affordable housing replacement<br />
production, and return to the Council as appropriate at some future date.<br />
The motion was accepted as friendly by the seconder.<br />
Motion to amend by Councilmember McKeown to state that on<br />
reconsideration, Council not adopt on second reading the ordinance that<br />
would enable the Development Agreement as identified in the agenda, that<br />
Council rescind and deny the adoption on November 27 the second reading<br />
<strong>of</strong> the ordinance that approve the Development Agreement and to direct<br />
staff to negotiate with the developer on issues including affordable housing<br />
replacement production. The motion was amended as friendly to the<br />
seconder.<br />
13 December 11, 2012
AYES:<br />
NOES:<br />
ABSENT:<br />
Councilmembers McKeown, Winterer, Davis, Vazquez<br />
Councilmembers Holbrook, Mayor Pro Tem O’Day,<br />
Mayor O’Connor<br />
None<br />
ADJOURNMENT On order <strong>of</strong> the Mayor, the <strong>City</strong> Council meeting was adjourned at 12:44<br />
p.m. in memory <strong>of</strong> Gary Squier.<br />
ATTEST:<br />
APPROVED:<br />
Sarah P. Gorman<br />
<strong>City</strong> Clerk<br />
Pam O’Connor<br />
Mayor<br />
14 December 11, 2012
<strong>City</strong> Council Report<br />
To:<br />
Mayor and <strong>City</strong> Council<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
<strong>Agenda</strong> Item: 3-B<br />
From:<br />
Karen Ginsberg, Community and Cultural Services Director<br />
Subject: License Agreement with Cirque du Soleil for Use <strong>of</strong> a Portion <strong>of</strong> the 1550<br />
PCH Parking Lot<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council authorize the <strong>City</strong> Manager to negotiate and<br />
execute a proposed License Agreement with Cirque du Soleil, a Delaware based<br />
company, for use <strong>of</strong> a portion <strong>of</strong> the 1550 PCH parking lot for theatrical performances<br />
from January 2 through March 29, 2014.<br />
Executive Summary<br />
In accordance with the 1550 PCH Parking Lot Cultural/Entertainment Event Policy,<br />
following a competitive process, staff recommends Cirque du Soleil (CDS) for the 2013-<br />
2014 Event Season. CDS would present “Totem” beginning January 2014. The total<br />
occupation period, including move in and tear down, would be from January 2 through<br />
March 29, 2014. The proposed rental fee to the Beach Fund for the portion <strong>of</strong> the 1550<br />
lot for this period is $1,088,808. Additional anticipated economic benefits to the <strong>City</strong><br />
include patron parking revenues at the Civic Center parking structure, purchase <strong>of</strong> local<br />
supplies and services by CDS for its operation, and collateral spending by CDS visitors<br />
in local restaurants and businesses. This third return <strong>of</strong> CDS would incorporate<br />
mitigations, proven practices, and lessons learned from previous performances to<br />
reduce impacts on Pier businesses and nearby residents.<br />
Background<br />
Council first approved a policy to allow commercial events in the 1550 PCH parking lot<br />
(1550 lot) on September 14, 2004. The purpose <strong>of</strong> allowing commercial events is<br />
threefold: (1) to provide much needed revenue to the Beach Fund to support ongoing<br />
operations and capital improvements, (2) to meet the community’s demand for<br />
increased cultural <strong>of</strong>ferings, and (3) to provide economic benefits to the cultural tourism<br />
sectors <strong>of</strong> the community. The policy has been modified over time to provide greater
flexibility in the review process and evaluation criteria, and to incorporate concerns <strong>of</strong><br />
the <strong>Santa</strong> <strong>Monica</strong> Pier Corporation (SMPC), formerly the Pier Restoration Corporation.<br />
CDS returned to the 1550 lot in 2009 and again in 2012. Prior to each visit, efforts were<br />
made to identify and address concerns <strong>of</strong> the SMPC and Pier lessees about reduced<br />
parking availability in the 1550 lot for Pier visitors and the potential negative impacts on<br />
Pier businesses. The license agreement for each <strong>of</strong> the prior visits included a full range<br />
<strong>of</strong> conditions and mitigations to address these concerns. These mitigations included<br />
incorporating prepaid discounted parking for CDS patrons with their online ticket<br />
purchase at <strong>of</strong>fsite parking lots, providing a free shuttle service to and from the <strong>of</strong>fsite<br />
parking as well as a weekend shuttle for Pier visitors from the 2030 Beach lot, <strong>of</strong>fering<br />
cross promotion opportunities to Pier merchants, and providing direct financial and inkind<br />
partnership support to the SMPC and the <strong>Santa</strong> <strong>Monica</strong> Pier Lessees Association<br />
(SMPLA).<br />
Council directed staff to prepare an economic impact analysis during the 2009 visit to<br />
examine the impacts and benefits <strong>of</strong> CDS. Staff reported on October 26, 2010 clear<br />
economic gains to the <strong>City</strong> as a whole from commercial events through spending by<br />
visitors in restaurants, hotels, shopping, parking and transportation, as well creating<br />
additional employment opportunities during the period <strong>of</strong> the event. The impacts to Pier<br />
businesses are more mixed and differ depending on the specific types <strong>of</strong> business, with<br />
restaurants generally benefitting more than entertainment businesses. The timing<br />
change in 2012 from a Fall run to the January to March window is viewed by the Pier<br />
lessees as a positive move and there is general agreement that the 2012 visit was more<br />
favorably received by the Pier businesses.<br />
Discussion<br />
Vendor Selection<br />
In September 2012, staff issued a Request for Event Proposals (RFP) for the 2013-<br />
2014 Event Season. The RFP was posted on the <strong>City</strong>’s online bidding website and was<br />
sent to the list <strong>of</strong> event producers who had expressed an interest in staging an event in<br />
2
the 1550 lot over the past several years. Staff received proposals from CDS and<br />
Cavalia in response to the RFP.<br />
The Extended Events Review Committee, which includes representatives from the<br />
<strong>Santa</strong> <strong>Monica</strong> Pier Corporation, Convention and Visitors Bureau, and <strong>City</strong> staff,<br />
reviewed both proposals. Each was evaluated based upon criteria established in the<br />
1550 PCH Parking Lot Cultural/Entertainment Event Policy, including the degree to<br />
which the event <strong>of</strong>fers a unique cultural or entertainment experience, demonstrates<br />
clear measurable economic benefit to the <strong>City</strong> and local businesses, including Pier<br />
lessees, contributes to the Beach Fund, addresses traffic and parking impacts, and<br />
minimizes environmental impacts. Based upon these criteria and the demonstrated<br />
commitment <strong>of</strong> CDS to satisfy all <strong>City</strong> requirements, the committee recommends<br />
selection <strong>of</strong> CDS as the best bidder to provide theatrical performances for the 2013-14<br />
event season. The Cavalia proposal included a larger footprint than CDS, required a<br />
longer set up and tear down period, and provided a much lower financial <strong>of</strong>fer.<br />
Cirque du Soleil Proposal<br />
The CDS proposal builds on the successful performance plan <strong>of</strong> their prior two visits.<br />
Highlights <strong>of</strong> CDS’ proposal are as follows:<br />
• CDS would present “Totem”, a visual and acrobatic exploration <strong>of</strong> the<br />
evolutionary progress <strong>of</strong> the human species.<br />
• The Occupation Period would run from January 2 to March 29, 2014.<br />
• The Performance Period would be from January 17 to March 16, 2014, with one<br />
show per day on Tuesdays through Fridays, two shows on Saturdays, and<br />
Sundays, with an option to add six additional Thursday or Friday shows at the<br />
discretion <strong>of</strong> the Cirque. This represents a one week reduction in the<br />
performance period and a reduction in the number <strong>of</strong> shows on Fridays from the<br />
2012 visit.<br />
• CDS would occupy the same footprint as in 2012, using 719 <strong>of</strong> the 1,173 spaces<br />
in the 1550 lot, as shown in Attachment A. The base rental for the site is<br />
3
$1,088,808 for the 2.9 month period. This reflects a CPI increase in the $1.28 per<br />
square foot rate from 2012.<br />
• CDS would follow the Parking and Traffic Management Plan, first prepared in<br />
2009 and updated in 2012 to reflect the removal <strong>of</strong> the temporary parking lot that<br />
had been installed by CDS in 2009 in the location now known as Tongva Park.<br />
Efforts to better manage the overall supply <strong>of</strong> spaces in the beach lots to the<br />
north and south <strong>of</strong> the Pier and in the Civic Center, and nearby private lots in<br />
2012 helped to minimize parking and traffic impacts would be implemented.<br />
• CDS would provide a free Pier shuttle on Friday, Saturday, and Sunday from the<br />
2030 Beach lot for visitors to the Pier and the beach.<br />
• CDS proposes to build on and strengthen prior cross promotions with the SMPC,<br />
Pier tenants, and Convention and Visitors Bureau (CVB) and integrate special<br />
Pier/local partner <strong>of</strong>fers onto the CDS website. CDS is also committed to joint<br />
packaging and initiatives with the <strong>Santa</strong> <strong>Monica</strong> Pier Lessees’ Association<br />
(SMPLA) to direct CDS patrons to the Pier before and after the performances.<br />
• CDS would continue to provide financial and in-kind sponsorship to the SMPC for<br />
the Twilight Concert Series as well as support to the SMPLA, CVB, and other<br />
business groups.<br />
• CDS would continue its educational outreach to the Police Athletic League (PAL)<br />
with the Cirque du Monde program and to the <strong>Santa</strong> <strong>Monica</strong> Malibu Unified<br />
School District.<br />
• CDS proposes to work with the SMPC and SMPLA to relocate Pier employees to<br />
adjacent beach lots and/or explore arrangements at nearby private lots.<br />
• Sustainability practices would include a recycling program in public areas and<br />
employee work space, composting <strong>of</strong> food residue in the employee cafeteria,<br />
replacement <strong>of</strong> plastic souvenir gift bags with oxi-biodegradable bags, products<br />
made with organic cotton and bamboo, booklets printed on 100% recycled paper<br />
and CD releases made with compostable product.<br />
• CDS proposes to pay all <strong>City</strong> costs and services associated with the event<br />
including but not limited to police services for crowd/traffic control, fire safety<br />
4
<strong>of</strong>ficers, event licensing/liaison and location supervision, parking staff, utility<br />
charges, sanitation services, and custodial/maintenance services.<br />
Public Outreach<br />
Following the 2012 visit, staff held a Community Meeting on March 14, 2012 to gain<br />
feedback about the CDS visit and events, in general. Although postcards were mailed to<br />
over 150 residents and businesses in the area, only five people attended the meeting.<br />
The discussion focused on traffic and parking impacts on residents, who rely on parking<br />
in the Appian Way lots. One <strong>of</strong> the suggested improvements was for the installation <strong>of</strong><br />
electric gates to control access to these lots for residents with overnight permits. This<br />
improvement is scheduled for completion this spring.<br />
Staff attended the SMPLA meeting on April 3, 2013 to review the CDS proposal. There<br />
is general agreement among the Pier lessees that the January to March time frame is<br />
better for Pier businesses and the group acknowledged the commitments CDS has<br />
shown in the past. The main concerns relate to parking and the impacts <strong>of</strong> Pier<br />
construction. The lessees asked if the weekend shuttle hours might be extended and<br />
expressed interest in working with CDS on promotion partnerships.<br />
The SMPC discussed the CDS proposal at the April 3 Board meeting and heard from<br />
Pier lessees in attendance. Hearing no objections, the SMPC voted unanimously and<br />
enthusiastically to welcome back CDS and encourage staff and the SMPLA to work<br />
together to make the CDS visit successful for all visitors to the Pier.<br />
If the license agreement is approved by Council, CDS will seek approval from the<br />
California Coastal Commission for the event.<br />
Environmental Analysis<br />
The License Agreement with CDS for use <strong>of</strong> a portion <strong>of</strong> the 1550 Lot is categorically<br />
exempt from environmental review pursuant to the California Environmental Quality Act<br />
(CEQA) Guidelines, Section 15304(e), as these actions constitute minor temporary use<br />
5
<strong>of</strong> land having negligible effects on the environment. CEQA Guidelines specifically<br />
include uses such as carnivals and circuses.<br />
Financial Impacts & Budget Actions<br />
Approval <strong>of</strong> CDS’s proposal will generate $1,088,808 in Special Event revenue to the<br />
Beach Fund. A portion <strong>of</strong> this revenue will <strong>of</strong>fset the estimated loss in parking revenue<br />
due to spaces occupied by the CDS in the 1550 Lot. Based on a three–year review <strong>of</strong><br />
the parking revenues in the 1550 Lot, the average revenue per space per month has<br />
been calculated at $193.78 for the 2.9 month long occupation period. The estimated<br />
total parking revenue loss is $444,807. Reduction in other revenues related to the 1550<br />
Lot, such as staging for filming on the Pier or the beach, is expected to be minimal since<br />
alternative staging locations may be provided at the 1640 Appian Way or the 1150 PCH<br />
lots.<br />
Parking revenues to the General Fund for the Civic Center Parking Structure are<br />
expected to increase by $60,000, which is the additional amount generated in 2012. If<br />
the license agreement is approved by the <strong>City</strong> Council, the revised revenue projections<br />
for the Beach and General Fund will be included in the <strong>City</strong>’s FY 2013-15 proposed<br />
Budget.<br />
The 2009 economic impact study reported $200,000 in sales and transient tax<br />
increases to the General Fund, which is anticipated again in 2014. All direct <strong>City</strong> staff<br />
time and expenses will be reimbursed by CDS to achieve full cost recovery by the <strong>City</strong>.<br />
Prepared by: Judith Meister, Beach Administrator<br />
Approved:<br />
Forwarded to Council:<br />
Karen Ginsberg<br />
Director, Department<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
Attachment A: Proposed Cirque du Soleil Site Plan<br />
6
<strong>City</strong> Council Report<br />
To:<br />
From:<br />
Subject:<br />
Mayor and <strong>City</strong> Council<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
Andy Agle, Director <strong>of</strong> Housing and Economic Development<br />
Kathryn Vernez, Deputy <strong>City</strong> Manager<br />
<strong>Agenda</strong> Item: 3-C<br />
Sale <strong>of</strong> a portion <strong>of</strong> <strong>City</strong>-owned property at 2525 Michigan Avenue<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council authorize the <strong>City</strong> Manager to negotiate and<br />
execute a purchase and sale agreement with the Exposition Construction Authority to<br />
sell a 19,389-square foot portion <strong>of</strong> <strong>City</strong>-owned property at 2525 Michigan Avenue for<br />
the construction and operation <strong>of</strong> the Exposition Light Rail Transit (EXPO LRT) station.<br />
Executive Summary<br />
To accommodate the EXPO LRT station at 26 th Street and Olympic Boulevard, Expo<br />
must acquire a 19,389-square foot portion <strong>of</strong> <strong>City</strong>-owned property located at<br />
2525 Michigan Avenue. <strong>City</strong> staff and Expo staff have agreed to recommend a sale<br />
price <strong>of</strong> $4,076,835, based on the property’s appraised fair market value.<br />
Background<br />
Phase 2 <strong>of</strong> the EXPO LRT line will connect Downtown Los Angeles to<br />
Downtown <strong>Santa</strong> <strong>Monica</strong> with three stations in <strong>Santa</strong> <strong>Monica</strong>: Olympic Boulevard/26 th<br />
Street Station (at Bergamot Arts Center); Colorado Avenue/17 th Street Station (at<br />
Memorial Park), and; the Downtown Terminus Station (at Colorado Avenue/4 th Street).<br />
Phase 1 <strong>of</strong> the EXPO LRT line connecting Downtown Los Angeles and Culver <strong>City</strong><br />
opened in April 2012. Phase 2, extending from Culver <strong>City</strong> to <strong>Santa</strong> <strong>Monica</strong>, is<br />
scheduled to open in 2016.<br />
The <strong>City</strong> acquired the nine-acre parcel located at 2525 Michigan/2715 Exposition<br />
Boulevard/1800 Stewart Street (Attachment A, Map) from Southern Pacific<br />
Transportation Company in 1989. The eastern portion <strong>of</strong> the <strong>City</strong>-owned property<br />
1
covering 1800 Stewart Street is approximately four acres and is leased to Agensys, Inc.<br />
under a long-term ground lease. The western portion <strong>of</strong> the site is approximately<br />
5.4 acres and is leased to Bergamot Station, Ltd. This entity manages the Bergamot<br />
Station Arts Center, a complex comprised <strong>of</strong> over 30 art galleries, creative businesses,<br />
and a non-pr<strong>of</strong>it theater company.<br />
Discussion<br />
To accommodate the proposed EXPO LRT improvements at the Olympic<br />
Boulevard/26 th Street station, the Exposition Light Rail Construction Authority (Expo)<br />
and its design-builder, Skanska-Rados, have determined that 19,389 square feet <strong>of</strong> land<br />
is needed from <strong>City</strong>-owned site at 2525 Michigan Avenue. This portion is located along<br />
the northern portion <strong>of</strong> the <strong>City</strong>-owned site, adjacent to the light rail line. It is<br />
semi-rectangular in shape (Attachment B, Property Impact Statement). Due to the<br />
EXPO LRT schedule, Expo filed a condemnation to acquire the property quickly, and<br />
took possession on December 6, 2012.<br />
The light rail station construction required the demolition <strong>of</strong> two existing structures on<br />
the site. Demolition <strong>of</strong> the buildings occurred on January 28, 2013. Another<br />
12,821 square feet <strong>of</strong> land on the site will be used as a temporary construction<br />
easement (TCE) for 24 months. An additional 7,818 square feet <strong>of</strong> <strong>City</strong>-property was<br />
also required as a demolition access easement for one month, and was returned to the<br />
<strong>City</strong> after demolition occurred.<br />
The <strong>City</strong> and Expo each hired independent appraisers to determine the property’s fair<br />
market value. The <strong>City</strong>’s appraiser determined the value to be approximately<br />
$4,435,000, including temporary construction easements. Expo’s appraisal determined<br />
the value to be approximately $3,718,000. <strong>City</strong>, Metro, and Expo staff have exchanged<br />
appraisals and reviewed the underlying assumptions <strong>of</strong> the appraisals. Based on<br />
review <strong>of</strong> both appraisals, <strong>City</strong>, Expo and Metro staff recommend a settlement <strong>of</strong><br />
$4,076,835 as fair compensation for the acquisition.<br />
2
Financial Impacts & Budget Actions<br />
Proceeds in the amount <strong>of</strong> $4,076,835 will be deposited into account 41642.401801.<br />
Metro will be responsible for ongoing maintenance <strong>of</strong> the station itself.<br />
Prepared by: Erika Cavicante, Senior Development Analyst<br />
Approved:<br />
Forwarded to Council:<br />
Andy Agle, Director<br />
Housing and Economic Development<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
Approved:<br />
Kathryn Vernez<br />
Deputy <strong>City</strong> Manager<br />
Attachments:<br />
A. Map<br />
B. METRO Property Impact Statement for 2525 Michigan Avenue, E2-1001<br />
3
Skanska-Rados Expo 2 Joint Venture<br />
Exposition Light Rail Transit Phase 2<br />
444 South Flower Street, Suite 2200<br />
Los Angeles, CA 90071<br />
Phone: 213-785-0112 Fax: 213-785-0113<br />
CONTRACT NO.: XP8902-002<br />
PROJECT: Expo LRT Phase 2<br />
JOB NO. 098004<br />
TO:<br />
ATTN:<br />
Exposition Construction Authority<br />
707 Wilshire Blvd.<br />
34th Floor<br />
Los Angeles, CA 90017<br />
Richard D Thorpe<br />
DATE: 3/29/2012<br />
REF:<br />
TRANSMITTAL<br />
No. 01064<br />
Submittal No. 6.3.l.H.002.00<br />
Property Impact Statement<br />
E2-1001<br />
WE ARE SENDING:<br />
D Shop Drawings<br />
D Letter<br />
D Prints<br />
D Change Order<br />
D Plans<br />
D Samples<br />
D Specifications<br />
@Other: Pro_perty Impact Statement E2-l 00 I<br />
SUBMITTED FOR:<br />
0 Approval<br />
0 For Information I Record<br />
D As Requested<br />
D Review and Comment<br />
SENT VIA:<br />
0 Attached<br />
0 Separate Cover Via:<br />
ACTION TAKEN:<br />
D Approved as Submitted<br />
D Approved as Noted<br />
D Returned After Loan<br />
D Resubmit<br />
D Submit<br />
D Returned<br />
D Returned for Corrections<br />
D Due Date:<br />
ITEM NO. DATE COPIES DESCIUPTION<br />
01 03/29/2012 Submittal No. 6.3. 1.H.002.00.Property Impact Statement E2-J 00 I<br />
Remarl
Skanska-Rados Expo 2 Joint Venture<br />
Exposition Light Rail Transit Phase 2<br />
444 South Flower Street, Suite 2200<br />
Los Angeles, CA 90071<br />
Phone: 213-785-0112 Fax: 213-785-011 3<br />
SUBMITTAL<br />
CONTRACT NO: XP8902-002 PACKAGE NO: PS-CH.06<br />
PROJECT:<br />
JOB NO:<br />
Expo LRT Phase 2<br />
098004<br />
SUBMITTAL NO:<br />
SRJVTRK NO:<br />
RESP. DUE BY:<br />
PS-CH.06- 6.3.1.H.002<br />
00396<br />
04/21/2012<br />
TITLE:<br />
Property Impact Statement E2-1001<br />
TO:<br />
Richard D Thorpe<br />
Exposition Construction Authority<br />
707 Wilshire Blvd.<br />
34th Floor<br />
Los Angeles, CA 90017<br />
213-243-5500<br />
SRJV/SUBCONTRACTOR/SUPPLIER:<br />
Skanska-Rados Expo 2 Joint Venture<br />
Michael Armienti<br />
444 S. Flower Street, Ste. 2200<br />
Los Angeles, CA 90071<br />
213-785-0150<br />
REV<br />
NO.<br />
DESCRIPTION<br />
RECEIVED<br />
SENT<br />
RETURNED<br />
STATUS<br />
00<br />
Property Impact Statement E2-1001<br />
3/29/2012<br />
3/29/2012<br />
NEW<br />
1 Richard D Thorpe (EXP02)<br />
3/29/2012<br />
NEW<br />
REMARKS:<br />
APPROVED BY:<br />
DATE:<br />
f_sb_sucs
~~w.\ t llft&~<br />
--$ ~<br />
~m ~~ @<br />
SKANSKARADOS<br />
Exposition Light Rail Transit Phase 2<br />
SUBMITTAL REVIEW<br />
Input Submittal No. Based on CDRL<br />
Document Control<br />
Item No.: PS-06-8 !Section No.: 6.3.1.H Sub No.: 6.3.1.H.002-<br />
0General Requirements 0 Contract ® Performance Specifications Rev No.: 00<br />
Dwg. Reference(s): A-S5-1 01 Progress Print 2/21/2012 !spec. Section(s):<br />
Submittal Description: Property Impact Statement Certification - E2-1 001 (26th Street Station Partial Acquisition Parcel)<br />
Submittal Prepared By: Michael Armienti !Date Submitted: 03/29/12 Requested Response Date: 04/29/12<br />
If Applicable: !subcontractor/Supplier Name:<br />
Reference No.:<br />
Deviation: No((!)) Yes(Q See Notes I Substitution: No({!) YesQSee Attached Information<br />
Deviation/Substitution Notes (attach additional pages if necessary):<br />
Submittal Reviewer's Checklist YES NO N/A<br />
1. Are specification and contract drawing references correct? (If not change them) El 0 0<br />
2. Are the submittal date & requested return date included? (ASAP is not acceptable) ID 0 0<br />
3. Have you reviewed the specification section which requires this submittal? (!) 0 0<br />
4. Do all materials submitted meet the applicable specification(s)? ® 0 0<br />
5. Are any deviations or substitutions clearly defined in the submittal notes above? 0 0 ®<br />
6. Have all resubmittal comments been addressed? 0 0 ®<br />
7. If required, does the submittal have a PE stamp from a Pr<strong>of</strong>essional Engineer? 0 0 (!)<br />
8. Has the subcontractor/supplier signed and dated the submittal? (!) 0 0<br />
9. Have you spot checked dimensions, unit weights, quantities, size, etc .. . with Plans? (!) 0 0<br />
10. If required, are samples the correct quantity, size, type, and are labeled correctly? 0 0 (!)<br />
11. Is the presentation satisfactory (pages numbered, bound, tabs, spelling/grammar, etc.)? (!) 0 0<br />
12. Is the correct number <strong>of</strong> legible copies being submitted? (!) 0 0<br />
All <strong>of</strong> the materials included in this submittal have been reviewed and are in conformance to the contract documents except as<br />
noted:<br />
Reviewed By Michael Armienti<br />
Firm: SRJV<br />
(P_RINTNAME}~ ~~<br />
. Signature: ~ Date: 03/29/12<br />
Submittal Review's Notes/Remarks:
Routing Sheet<br />
Expo Phase 2 Design-Build Project<br />
Exposition LRT Phase 2 Contract No. XP8902-002<br />
444 South Flower Street, Suite 2200<br />
Los Angeles, CA 90071<br />
Phone: 213.785.0112 Fax: 213.785.0113<br />
ORIGINATOR:<br />
SUBMITIAL NUMBER:<br />
SUB RESPONSE DISTRIBUTION:<br />
DELIVER SUBMITIAL TO:<br />
1 AGENCY:<br />
CONTACT NAME:<br />
HARD COPIES:<br />
SUBMITIED FOR:<br />
DATE RESPONSE DUE:<br />
Michael Armienti<br />
6.3.1 .H.002.00<br />
-----------------------------------------------------<br />
Exposition Metro Line Construction Authority<br />
Nell Mardirosian<br />
COs: QTY FUll SIZE: QTY HALF SIZE: REPORTS: 1<br />
4/29/12<br />
APROVAL(!)<br />
FOR RECORD ONLYO<br />
2 AGENCY:<br />
CONTACT NAME:<br />
HARD COPIES:<br />
SUBMITIED FOR:<br />
DATE RESPONSE DUE:<br />
COs: QTY FUll SIZE: QTY HALF SIZE: REPORTS:<br />
APROVAL (!)<br />
FOR RECORD ONLYO<br />
3 AGENCY:<br />
CONTACT NAME:<br />
HARD COPIES:<br />
SUBMITIED FOR:<br />
DATE RESPONSE DUE:<br />
COs: QTY FUll SIZE: QTY HALF SIZE: REPORTS:<br />
APROVALO<br />
FOR RECORD ONLYO<br />
4 AGENCY:<br />
CONTACT NAME:<br />
HARD COPIES:<br />
SUBMITIED FOR:<br />
DATE RESPONSE DUE :<br />
COs: QTY FULL SIZE: QTY HALF SIZE: REPORTS:<br />
APROVALO<br />
FOR RECORD ONLY0<br />
Response Distribution:<br />
INSTRUCTIONS TO AGENCY REVIEWERS<br />
1 Review attached submittal and compile comments from your agency.<br />
2 Return compiled comments electronically to expo2doccontrol@skanska.com by t he due date<br />
3 Comments or drawing markups that cannot be returned electronically must be returned to<br />
Doc Control in the LA <strong>of</strong>fice.<br />
1 <strong>of</strong> 2
CERTIFICATION MEMORANDUM<br />
EXPOSITION LRT PROJECT PHASE 2<br />
Friday, March 23, 2012<br />
Parcel Number: E2-1001<br />
Attachments:<br />
PROPERTY IMPACT STATEMENT<br />
EXHIBIT "A"- Legal Description for Fee Purposes<br />
EXHIBIT "B" - Plat<br />
EXHIBIT "C"- Plan Set Drawing<br />
EXHIBIT "D"- Right-<strong>of</strong>-Entry Exhibit<br />
A permanent fee take <strong>of</strong> E2-1001 is in order based on the current Skanska-Rados<br />
Expo 2 Joint Venture design progress print dated 2/21/2012, I certify that the<br />
permanent partial acquisition <strong>of</strong> Parcel Number E2-1001 containing 19,389<br />
square feet <strong>of</strong> property is required for the construction and operation <strong>of</strong> Metro's<br />
EXPOSITION LRT PROJECT PHASE 2.<br />
x ____________________________ _<br />
Samantha Bricker<br />
Chief Operations Officer<br />
Exposition Construction Authority
Property Impact Statement<br />
Prepared: Friday, March 23, 2012<br />
Reference Drawings: A-S5-101<br />
Reference Plat: E2-1001<br />
Parcel Address: 2525 Michigan Ave, Bldg C-1 <strong>Santa</strong> <strong>Monica</strong>, CA 90404<br />
Affected APN: 4268-013-902<br />
Owner:<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
1. LOCATION AND DESCRIPTION<br />
Parcel Plat E2-1001, containing 19,389 sq. ft. is a semi-rectangular shaped parcel that is<br />
east <strong>of</strong> 26th Street and south <strong>of</strong> Olympic Blvd., in the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> {see Exhibit<br />
C). The site appears to be developed with an existing industrial building that faces south<br />
into the Bergamot Station Art Gallery. The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> is currently leasing this<br />
building to Bergamot Station, LTD and the building is currently occupied by two {2)<br />
separate art galleries and related businesses.<br />
2. NEED FOR THE PROPERTY<br />
The existing Metro right-<strong>of</strong>-way is located north <strong>of</strong> the Bergamot Station Art Gallery and<br />
Olympic Blvd. The proposed right-<strong>of</strong>-way take is located within Parcel4268-013-902 and<br />
outlines the proposed 26th Street Station for the Expo Phase 2 Project. Please see Exhibit<br />
"B" for the locations <strong>of</strong> the proposed right-<strong>of</strong>-way acquisition. Metro's existing ROW is<br />
not wide enough to accommodate the dual station platform in this area, thus requiring<br />
a partial take. Exhibit A, Legal Description, Exhibit B, Plat, and Exhibit C, Plan Set<br />
Drawings, are attached.<br />
A Right-<strong>of</strong>-Entry ("ROE") Permit will be required to complete the demolition <strong>of</strong> the<br />
existing buildings and construct the 26th Street Station. Exhibit D, Right <strong>of</strong> Entry Exhibit,<br />
is attached.<br />
3. DESIGN REQUIREMENTS<br />
The EXPOSITION METRO LINE CONSTRUCTION AUTHORITY selected the EXPOSITION LRT<br />
PROJECT PHASE 2 and the location <strong>of</strong>the 26th Street Station within the <strong>City</strong> <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong>.<br />
APN# Project Use Sq. Ft. Req. ROW Take {Full or Partial)<br />
4268-013-902 At Grade ,Dual Platform 19,389 Partial<br />
Station<br />
4. CONSTRUCTION REQUIREMENTS AND TECHNIQUES
The subject property has two buildings within the proposed station footprint that will<br />
require demolition. The first building is used as a maintenance storage closet and the<br />
second building is occupied by two art galleries. The larger art gallery called "Track 16"<br />
includes an art gallery, a theatre, a book store and a mail order internet business. The<br />
second business is a smaller art gallery. The duration <strong>of</strong> construction is anticipated to be<br />
intermittent for approximately 36 months.<br />
5. CONSTRUCTION IMPACTS<br />
a. DURING CONSTRUCTION<br />
i. Construction activities will include periods where property is used as a<br />
lay-down area for equipment, materials and other contractor<br />
requirements related to the construction <strong>of</strong> the 26'h Street Station.<br />
ii. Buildings, hardscape, and related improvements within the parcel take<br />
will be removed during construction. There are currently two (2)<br />
buildings located within parcel E2-1001 that will need to be demolished.<br />
iii. Construction activities will disrupt normal vehicular parking and<br />
pedestrian traffic within the parcel take area and temporary construction<br />
area. Approximately sixty (60) parking spaces will be impacted during the<br />
building and hardscape demolition and station construction. (See "AFTER<br />
CONSTRUCTION" item ii. for permanent impacts to parking.)<br />
iv. Construction activities will be in accordance with <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
standards for traffic management.<br />
v. Noise, dust, and visual impacts common to construction projects will<br />
exist for the duration <strong>of</strong> construction. Measures will be used to minimize<br />
these disruptions.<br />
vi. Trucks making deliveries and hauling excavated material may cause<br />
traffic congestion in the general area <strong>of</strong> the site.<br />
vii. Construction activity may require access to surrounding areas <strong>of</strong> the<br />
property in order to protect adjacent structures.<br />
viii. Temporary utility disconnections may be necessary as they will need to<br />
be reconfigured when the Track 16 building is demolished.<br />
b. AFTER CONSTRUCTION<br />
i. A Metro Dual Platform at Grade Station will be located in the area<br />
acquired under parcel E2-1001. The remaining portion <strong>of</strong> the parcel will<br />
be owned and maintained by the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>.
ii. The footprint <strong>of</strong> the existing building to be demolished exceeds the<br />
square footage needs <strong>of</strong> the permanent acquisition area. Approximately<br />
8,100 square feet will be restored to the remaining property after<br />
construction is completed.<br />
iii. When construction is complete, approximately forty-nine (49} parking<br />
spaces will be permanently removed from the area. Additional parking<br />
spaces may be added to the 8,100 square feet mentioned in item (ii)<br />
above.<br />
6. TYPE OF RIGHT OF WAY<br />
Acquisition <strong>of</strong> fee estate (E2-1001} will be required to accommodate the proposed 26th<br />
Street Station.<br />
Acquisition <strong>of</strong> a Right-<strong>of</strong>-Entry Permit ("ROE"} containing approximately 7,818 square<br />
feet will be required for building demolition. Use <strong>of</strong> the ROE shall cover a one {1) month<br />
time period.<br />
Acquisition <strong>of</strong> a Right-<strong>of</strong>-Entry Permit ("ROE") containing approximately 12,821 square<br />
feet will be required for the 26th Street station construction. Use <strong>of</strong> the TCE shall cover<br />
a twenty-four (24} month time period.<br />
7. RECOMMENDED ACQUISITION<br />
Acquisition <strong>of</strong> fee estate (E2-1001} per the attached Exhibit A, Legal Description, and<br />
Exhibit B, Plat, is recommended.<br />
Acquisition <strong>of</strong> a ROE Permit per the attached Exhibit D, Right-<strong>of</strong>-Entry Exhibit, is<br />
recommended to construct the 26th Street Station and complete the demolition <strong>of</strong> the<br />
existing two {2) buildings.
PSOMAS<br />
EXHIBIT 'A'<br />
2<br />
LEGAL DESCRIPTION<br />
3<br />
4 E2-1001<br />
5<br />
6 In the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, County <strong>of</strong> Los Angeles, State <strong>of</strong> California, being that<br />
7 pmiion <strong>of</strong> the land described in the Grant Deed recorded October !3, 1989 as Instrument<br />
8 No. 89-1657788, <strong>of</strong> Official Records <strong>of</strong> said County, lying northerly and northwesterly <strong>of</strong><br />
9 the following described line:<br />
10<br />
II<br />
Beginning at the northwesterly corner <strong>of</strong> said land, said corner being a point on the<br />
12 southeasterly line <strong>of</strong>26 111 Street, 74.00 feet wide, as described in said Grant Deed; thence<br />
13 southwesterly along said southeasterly line South 16°10'03" West 42.15 feet to the Tt·ue<br />
14 Point <strong>of</strong> Beginning; thence North 68°10'02" East 10.51 feet;<br />
15 thence North 88°59'56" East 3.79 feet to the begirming <strong>of</strong> a curve concave nmiherly<br />
16 having a radius <strong>of</strong> 10.00 feet; thence easterly along said curve 3.01 feet through a central<br />
17 angle <strong>of</strong> 17°13'54"; thence southeasterly along the prolongation <strong>of</strong> the radial line<br />
18 South 18°13'58" East 2.30 feet; thence North 68°10'02" East 69.50 feet;<br />
19 thence South 21 °49'58" East 1.79 feet; thence Nmih 68°10'02" East 1.79 feet;<br />
20 thence South 21 °49'58" East 10.77 feet; thence Nmih 68°10'02" East 121.53 feet;<br />
21 thence South 21 °49'58" East 3.00 feet; thence Notih 68°10'02" East 143.92 feet;<br />
22 thence North 21 °49'58" West 3.00 feet; thence Nmth 68°10'02" East 67.29 feet;<br />
23 thence Nmth 21 °49'58" West 7.21 feet; thence Nmih 68°10'02" East 50.68 feet;<br />
24 thence South 21 °49'58" East 44.20 feet; thence North 68°10'02" East 18.51 feet;<br />
25 thence North 21 °49'58" West 62.76 feet; thence Nmth 68°!0'02" East 66.53 feet to that<br />
26 course in the northerly line <strong>of</strong> said Grant Deed having a bearing and distance <strong>of</strong><br />
27 "South 70°55'34" West 471.68 feet" (South 71°23' I 8" West for purposes <strong>of</strong> this<br />
28 description).<br />
29<br />
30 Containing 19,389 square feet.<br />
31<br />
M:\2SKAO I 0 I OOISURVEYILEGALS\X-LG-E21 00 I. do ex<br />
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Page I <strong>of</strong>2
PSOMAS<br />
2 All as shown on Exhibit "B" attached hereto and made a part there<strong>of</strong>.<br />
3<br />
4 Distances as described above and as shown on said Exhibit "B" are grid distances.<br />
5 Ground distances may be obtained by dividing grid distances by the mean combination<br />
6 factor <strong>of</strong> the courses being described. The mean combination factor for this conversion is<br />
7 0.99999943.<br />
8<br />
9 This legal description is not intended to be used in the conveyance <strong>of</strong> land in violation <strong>of</strong><br />
10 the Subdivision Map Act <strong>of</strong> the State <strong>of</strong> California.<br />
II<br />
12 This legal description was prepared by me or under my direction.<br />
13<br />
14<br />
15<br />
16<br />
Date<br />
17<br />
18<br />
19<br />
20<br />
21<br />
22<br />
23<br />
24<br />
25<br />
26<br />
27<br />
28<br />
29<br />
30<br />
31<br />
M:\2SKAO I 01 OO\SURVEY\LEGALSIX-LG-E2 1 OO I.docx<br />
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Page 2 or2
GRAN TOR : CITY OF SANTA MONICA<br />
The dolo shown on plot ore bosed on o field survey prepared by<br />
1------------------------ ---tPsomos doted April2009 - Au9ust 2009. Bearings and distances<br />
DESCRIPTION :PORTION OF hAND DESCRIBED IN THE GRANT DEED RECORDED OCT. 13, 1989 AS ~b~o~~~e1r~~ cg~i~~~~o c~op_t~.te System 83 Zone 5 coordinates<br />
INST. N0.89-1657788, O.R., CITY OF SANTA MONICA, COUNTY OF hOS ANGELES,<br />
STATE OF CAhiFORNIA.<br />
TITLE REPORT : STEWART liTLE ORDER NUMBER 424682 DATED 1117/2011<br />
ASSESSORS REF: 4268-013-902 ROW REF : RWX -010<br />
0<br />
0 25' 50' 100'<br />
SCALE 1" • 50'<br />
~ /<br />
~I /<br />
EXHIBIT "B"<br />
- -- -- -- ---- ;-- - ---- -- -- -<br />
~~ /<br />
~ '<br />
~~/ / p<br />
I<br />
I<br />
I<br />
I<br />
1<br />
L()<br />
L()<br />
0 2-17-2012 ORIGINA~ SUBMITT Ah<br />
NO. OATE REVISION DESCRIPTION<br />
OLYMPIC BLVD.<br />
- - --- -<br />
- ---- - SPTC R/W<br />
I<br />
I<br />
SEE DETAIL "A"<br />
,.,.,<br />
u...<br />
0<br />
N<br />
DETAIL "A"<br />
--- - - -<br />
N68° 10'02"E<br />
143.92'-<br />
PREPARED BY:<br />
' \ ~ -*~ ! ·"'-<br />
SUBMITTED BY: PROJECT MANAGER OA E EXPO PROJECT IJANAGER<br />
DATE<br />
SHEET 1 OF 3<br />
l!lY. OlTE
GRANTOR : CITY OF SANTA MONICA<br />
The dolo shown on plot ore bosed on o lieiiurvey prepared by<br />
1--------------------------~Psomos doted April2009 - Au9ust 2009. Be gs oild distances<br />
OESCRPTION :PORTION OF ~AND DESCRIBED IN THE GRANT DEED RECORDED OCT. 13, 1989 AS ::1,~ 0 ~~~"1r~~ c~~i~~~~/~Pt~.te System Zone 5 coordinates<br />
INST. N0.89·1657788, O.R., CITY OF SANTA MONICA, COUNTY OF ~OS ANGELES,<br />
STATE OF C~IFORNIA.<br />
TITLE REPORT : STEWART TITLE ORDER NUMBER 424682 DATED 11/7/2011 0 2-17-2012 ORICINA~ SUBMITTAl.<br />
ASSESSORS REf: 4268·013-902 ROW REF : RWX ·010 NO. OATE REVISION DESCRIPTION<br />
OLYMPIC BL VO.<br />
----------------- - - ----- ----------<br />
SPTC R/W<br />
L5<br />
-<br />
BEARING<br />
L1 S2t• 49'58"E<br />
L2 N21• 49'58"W<br />
L3 N68• 10'02"E<br />
L4 S21• 49'58 "E<br />
L5 N68• 10'02"E<br />
L6 N21• 49'58"W<br />
POH. l Ns·r o NO o<br />
89- l 657788 ~ 0. fL<br />
DISTANCE<br />
3.00'<br />
7.21'<br />
50.68'<br />
44.20<br />
18.51'<br />
62.76'<br />
,.,.,<br />
LL..<br />
0<br />
,.,.,<br />
N76o 24'15"E<br />
----------- - -- 5.33.96' N46oo ,<br />
0<br />
----- -----------~--<br />
SCALE 1" - 50'<br />
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<strong>City</strong> Council Report<br />
To:<br />
From:<br />
Subject:<br />
Mayor and <strong>City</strong> Council<br />
Gigi Decavalles-Hughes, Director <strong>of</strong> Finance<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
<strong>Agenda</strong> Item: 3-D<br />
Agreement with MuniServices, LLC for Utility Users Tax and Franchise<br />
Fee Audit and Revenue Enhancement Services<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council authorize the <strong>City</strong> Manager to negotiate and<br />
execute a contract for Utility Users Tax (UUT) and Franchise Fee audit and revenue<br />
enhancement services with MuniServices, LLC, a Virginia-based company. The<br />
contract will include a fixed fee component <strong>of</strong> $425,000 over a five year term plus a<br />
contingency fee component for certain specific audits requested by the <strong>City</strong>.<br />
Executive Summary<br />
The <strong>City</strong> began using MuniServices, LLC (formerly Municipal Resource Consultants<br />
(MRC)) to conduct sales tax audits in 1988. At its July 25, 2000 meeting, Council<br />
approved an amendment to the existing agreement with MBIA MuniServices<br />
Company/MRC to conduct UUT and Franchise Tax audit services on behalf <strong>of</strong> the <strong>City</strong>.<br />
The Utility Users Tax Program, <strong>of</strong> which the <strong>City</strong> is a member, provides ongoing<br />
legislative monitoring, technology updates, ordinance updates, tax geo-coding<br />
information, and statewide tax application compliance and business detection.<br />
1) The fee for the overall Utility Users Tax/Franchise Fee audit and revenue<br />
enhancement services is a not-to-exceed amount <strong>of</strong> $425,000 over five years.<br />
2) The fee for specific audits <strong>of</strong> the Utility Users Tax and Franchise Tax payments<br />
would be negotiated when the audit is requested for a fee not-to-exceed 25% <strong>of</strong><br />
the audit findings.<br />
Discussion<br />
The <strong>City</strong> levies local taxes on the use <strong>of</strong> electricity, natural gas, telephone, cable, and<br />
water/wastewater services (Utility Users Tax), and on the use <strong>of</strong> <strong>City</strong> rights-<strong>of</strong>-way by<br />
certain utility companies (Franchise Tax).<br />
The <strong>City</strong> may not receive all the tax revenue that it is legally entitled to due to<br />
administrative errors or omissions by either the taxpayer or the utility service providers<br />
1
esponsible for collecting and distributing taxes. This may be due to human error, the<br />
complex nature <strong>of</strong> the business, or fraud. Audits are conducted to ensure proper<br />
payment <strong>of</strong> the taxes.<br />
Consultant Selection<br />
A Request for Proposals (RFP) for Utility Users Tax (UUT) and Franchise Fee audit and<br />
revenue enhancement services was posted on the <strong>City</strong>’s online bidding website in<br />
February 2013. Two firms submitted proposals.<br />
A panel composed <strong>of</strong> <strong>City</strong> Treasury and Business and Revenue Operations Division<br />
staff evaluated the proposals. Proposals were evaluated based on the criteria in SMMC<br />
2.24.072, including the firm’s understanding <strong>of</strong> the project and the tasks to be<br />
performed, recent experience <strong>of</strong> the firm in the areas necessary to complete the<br />
required tasks, and the fees proposed. Based on these criteria and the panel’s<br />
evaluation <strong>of</strong> the proposals, it was determined that MuniServices is best able to provide<br />
the full range <strong>of</strong> services that meet the <strong>City</strong>’s needs. MuniServices is the only firm that<br />
provides the full range <strong>of</strong> audit and revenue enhancement services required by the <strong>City</strong>.<br />
Specific decision factors included Muniservices’ experience in performing compliance<br />
reviews on major utility providers, its existing UUT payment databases allowing for<br />
detection <strong>of</strong> companies that may be paying UUT to a neighboring <strong>City</strong>, but not to <strong>Santa</strong><br />
<strong>Monica</strong>, and their expertise in legislative and regulatory analysis and consulting.<br />
MuniServices LLC (MuniServices) has been providing Utility Users Tax (UUT) audit and<br />
revenue enhancement services to a number <strong>of</strong> California cities, including <strong>Santa</strong> <strong>Monica</strong>,<br />
for over twenty years. Over the last four years, MuniServices’ efforts have generated<br />
over $1 million in additional revenue for the <strong>City</strong>.<br />
Financial Impacts & Budget Actions<br />
The contract to be awarded to MuniServices, LLC will have a fixed fee component in an<br />
amount not to exceed $425,000 for the five year term <strong>of</strong> the contract. Additionally, for<br />
audits specifically requested by the <strong>City</strong>, a fee <strong>of</strong> 25% <strong>of</strong> revenues recovered by the <strong>City</strong><br />
2
through MuniServices efforts will be applied. Funds are available in the FY 2012-13<br />
budget in division 224. Budget authority has been requested in the 2013-15 biennial<br />
budget proposal for Council approval in account 01221.555060.<br />
Prepared by: David Carr, Assistant <strong>City</strong> Treasurer<br />
Approved:<br />
Forwarded to Council:<br />
Gigi Decavalles-Hughes<br />
Director <strong>of</strong> Finance<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
3
<strong>City</strong> Council Report<br />
To:<br />
From:<br />
Subject:<br />
Mayor and <strong>City</strong> Council<br />
Martin Pastucha, Director <strong>of</strong> Public Works<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
<strong>Agenda</strong> Item: 3-E<br />
Construction Contracts for Lincoln Boulevard Resurfacing Project, Federal<br />
Aid Project No. STPL-5107 (034)<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council:<br />
1. Authorize the <strong>City</strong> Manager to negotiate and execute a contract with Sully-Miller<br />
Contracting Co., a California-based company, in an amount not to exceed<br />
$2,010,872 (includes a 10% contingency) for the resurfacing <strong>of</strong> Lincoln<br />
Boulevard from the <strong>Santa</strong> <strong>Monica</strong> Freeway to the southern <strong>City</strong> limit.<br />
2. Authorize the <strong>City</strong> Manager to negotiate and execute a contract with Onward<br />
Engineering, a California-based company, in an amount not to exceed $176,000<br />
(includes a 10% contingency) for construction management and inspection<br />
services for the resurfacing <strong>of</strong> Lincoln Boulevard.<br />
3. Authorize the issuance <strong>of</strong> an after-hours construction permit to perform work<br />
between the hours <strong>of</strong> 8 PM and 6 AM, Monday through Friday over the project<br />
duration, contingent on satisfying notification requirements as contained in <strong>Santa</strong><br />
<strong>Monica</strong> Municipal Code 4.12.110.<br />
4. Authorize the Director <strong>of</strong> Public Works to issue any necessary change orders to<br />
complete additional work within budget authority.<br />
Executive Summary<br />
The Lincoln Boulevard Resurfacing Project would resurface the roadway and perform<br />
related maintenance repairs, install video detection at five signalized intersections, and<br />
update the pavement striping and markings to current standards using the <strong>City</strong><br />
allocation <strong>of</strong> Surface Transportation Program-Local (STPL) funds and Federal Earmark<br />
funds. In March 2013, the <strong>City</strong> solicited bids for construction services. After reviewing<br />
the four bids received, Sully-Miller Contracting Company, the lowest responsible bidder,<br />
is recommended for construction <strong>of</strong> the project at a cost not to exceed $2,010,872.<br />
In January 2013, the <strong>City</strong> solicited statements <strong>of</strong> qualifications for construction<br />
management and inspection services. After reviewing statements <strong>of</strong> qualifications from<br />
eight firms, Onward Engineering is recommended to provide construction management<br />
and inspection services in an amount not to exceed $176,000. The issuance <strong>of</strong> an<br />
1
after-hours construction permit is recommended to allow paving-related activities<br />
between the hours <strong>of</strong> 8 PM and 6 AM, Monday through Friday, in order to minimize<br />
traffic and congestion during construction. After-hours work would be limited to no more<br />
than three non-consecutive nights for any block-segment or address.<br />
Background<br />
On August 23, 2011, a Cooperative Agreement with the State <strong>of</strong> California to relinquish<br />
to the <strong>City</strong> the portion <strong>of</strong> Lincoln Boulevard from the <strong>Santa</strong> <strong>Monica</strong> Freeway to the<br />
southern <strong>City</strong> Limit was authorized. The Cooperative Agreement was fully executed on<br />
May 14, 2012, and subsequently recorded in the Office <strong>of</strong> the County Recorder,<br />
finalizing the relinquishment process and transferring ownership <strong>of</strong> the Lincoln<br />
Boulevard right-<strong>of</strong>-way to the <strong>City</strong>.<br />
Discussion<br />
Under this project the contractor would resurface the existing asphalt pavement on<br />
Lincoln Boulevard from the <strong>Santa</strong> <strong>Monica</strong> Freeway to the southern <strong>City</strong> Limit, near<br />
Ozone Avenue, repair damaged sections <strong>of</strong> the concrete parking lane, install video<br />
detection at five signalized intersections within the project limits, and update the<br />
pavement striping and markings to address current traffic requirements and standards.<br />
In order to mitigate congestion and construction related traffic impacts along this busy<br />
transportation corridor, staff recommends that the paving and striping work would be<br />
performed at night between the hours <strong>of</strong> 8 PM and 6 AM, Monday through Friday,<br />
consistent with established traffic control and lane closure guidelines for Lincoln<br />
Boulevard. An after-hours construction permit is recommended for this project,<br />
contingent on satisfying notification requirements as contained in <strong>Santa</strong> <strong>Monica</strong><br />
Municipal Code 4.12.110. A temporary traffic control and phasing plan would also be<br />
prepared and implemented during the paving and striping phases to minimize impacts<br />
<strong>of</strong> the night work to a maximum <strong>of</strong> three non-consecutive nights for any specific blocksegment<br />
or address within the project limits. Additionally, operations that generate<br />
higher noise levels such as grinding would be scheduled between 8 PM and 12 AM<br />
(midnight).<br />
2
Contractor Selection<br />
On March 12 and 14, 2013, the <strong>City</strong> published a Notice Inviting Bids in the <strong>Santa</strong><br />
<strong>Monica</strong> Daily Press and on the <strong>City</strong>’s online bidding site. Four sealed bids were<br />
received by the <strong>City</strong> Clerk’s <strong>of</strong>fice and publicly opened on April 2, 2013 by the Deputy<br />
<strong>City</strong> Clerk. The bid results are as follows:<br />
Bidder Company Location Bid Amount<br />
Sully-Miller Contracting Co. Brea, CA $1,828,065<br />
All American Asphalt Corona, CA $1,977,977<br />
PALP, dba Excel Paving Co. Long Beach, CA $2,228,142<br />
Hardy & Harper, Inc. <strong>Santa</strong> Ana, CA $2,399,000<br />
The bids were evaluated on competitive pricing, understanding <strong>of</strong> the project’s scope,<br />
direct experience with similar projects, approach to the work, technical competence,<br />
qualifications <strong>of</strong> the proposed staff, and the ability to meet the project schedule.<br />
Pursuant to requirements for federal-aid construction projects, the award <strong>of</strong> the contract<br />
shall be to the lowest responsible bidder whose bid complies with all the requirements<br />
prescribed. Staff recommends Sully-Miller Contracting Co., located in Brea, CA, as the<br />
lowest responsible bidder based on their price, quality <strong>of</strong> services <strong>of</strong>fered, and<br />
experience with similar projects. Sully-Miller Contracting Co. provided over twenty<br />
references for recently completed projects, and a similar number for on-going projects.<br />
Staff contacted references for five representative projects from the cities <strong>of</strong> Torrance,<br />
Long Beach, West Hollywood, Cerritos, and La Mirada. All references reported that the<br />
work performed by Sully-Miller Contracting Co. was completed in a timely and costeffective<br />
manner while maintaining consistent quality. Additionally, in 2012 Sully-Miller<br />
Contracting Co. successfully completed the Robson Avenue and Marine Street<br />
Reconstruction Project, a federal-aid project, for the <strong>City</strong>. Staff also verified with the<br />
Contractors State License Board that Sully-Miller Contracting Co.’s and its<br />
subcontractors’ licenses are current, active, and in good standing.<br />
3
Construction Manager Selection<br />
In January 2013, the <strong>City</strong> requested Statements <strong>of</strong> Qualifications for construction<br />
management and inspection services for this project. The request for Statements <strong>of</strong><br />
Qualifications was advertised on the <strong>City</strong>’s online bidding website. Eight firms<br />
submitted Statements <strong>of</strong> Qualifications for this project, which were reviewed and rated<br />
by Public Works staff. Selection criteria included technical competence, staffing<br />
capability, project approach, past performance, dispute resolution, quality control, cost<br />
control, management services, customer service and the ability to meet required time<br />
frames. The top four firms were invited to interview with Public Works staff. Onward<br />
Engineering is recommended as the best firm to provide construction management and<br />
inspection services based on their competitive prices and past performance delivering<br />
similar projects at the cities <strong>of</strong> Brea, La Habra, Diamond Bar, and Commerce. Onward<br />
Engineering’s services would include public outreach, construction management,<br />
material testing, and continuous inspection <strong>of</strong> the contractor’s work. Staff contacted<br />
reference agencies and all respondents reported that Onward Engineering provided<br />
exceptional construction management and inspection services.<br />
Public Outreach<br />
On September 10, 2012, staff conducted a community meeting with area residents and<br />
business owners regarding the planned maintenance work and the proposed peak-hour<br />
bus-lanes on Lincoln Boulevard. The bus-lanes were subsequently deleted from the<br />
project scope based on community feedback, and after additional analysis conducted by<br />
Big Blue Bus staff, as described in the February 7, 2013 information item to Council.<br />
Public outreach during construction <strong>of</strong> this project would be provided by Onward<br />
Engineering as part <strong>of</strong> the construction management effort. The outreach process would<br />
include public notifications on the scope <strong>of</strong> the project, potential impacts, schedule, and<br />
periodic project updates. Properties impacted by the project would receive two<br />
construction notices. The first general notice would be mailed to properties within 500<br />
feet <strong>of</strong> the proposed work three weeks prior to the start <strong>of</strong> construction. A second twoday<br />
notice would be subsequently hand-delivered to each adjacent property with<br />
4
detailed information regarding the planned construction activity, potential impacts and<br />
contact information. The notices would be prepared by the <strong>City</strong> and distributed by the<br />
Contractor. For work requiring temporary closures or detours, highly visible electronic<br />
changeable message signs would be placed at strategic points one week prior to the<br />
planned work to notify the travelling public. Updates regarding the project would be<br />
provided on the <strong>City</strong>’s website and various social media channels.<br />
Construction Schedule<br />
Work is anticipated to begin the week <strong>of</strong> June 3, 2013 and be completed by August 16,<br />
2013.<br />
Financial Impacts & Budget Actions<br />
The construction contract to be awarded to Sully-Miller Contracting Co. is for an amount<br />
not to exceed $2,010,872 (includes a 10% contingency). The construction management<br />
and inspection contract to be awarded to Onward Engineering is for an amount not to<br />
exceed $176,000 (includes a 10% contingency). Funds are included in the FY2012-13<br />
Capital Improvement Program budget at the following accounts:<br />
Account Name Amount<br />
C207041.589010 Lincoln Boulevard HPP (Federal Earmark) $ 1,590,357<br />
C207041.589000 Lincoln Boulevard Resurfacing - STPL $ 596,515<br />
TOTAL $ 2,186,872<br />
Prepared by: Allan Sheth, Civil Engineering Associate<br />
Approved:<br />
Forwarded to Council:<br />
Martin Pastucha<br />
Director <strong>of</strong> Public Works<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
5
<strong>City</strong> Council Report<br />
To:<br />
From:<br />
Subject:<br />
Mayor and <strong>City</strong> Council<br />
Martin Pastucha, Director <strong>of</strong> Public Works<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
<strong>Agenda</strong> Item: 3-F<br />
Pr<strong>of</strong>essional Services Agreement Modification for Environmental Services<br />
for <strong>City</strong> Corporation Yard and Olympic Well Field<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council:<br />
1. Authorize the <strong>City</strong> Manager to negotiate and execute a third modification to<br />
Pr<strong>of</strong>essional Services Agreement #8914 (CCS) in the amount <strong>of</strong> $1,370,805<br />
(including a 10% contingency) with ICF Consulting Services, LLC, a Californiabased<br />
company, to provide groundwater monitoring, well installation, technical<br />
oversight, and support services for the Olympic Well Field. This will result in a<br />
five year amended agreement with a new total amount not to exceed $3,775,098,<br />
with future year funding contingent on Council budget approval.<br />
2. Appropriate the budget increases as outlined in the Financial Impacts and<br />
Budget Actions section <strong>of</strong> this report.<br />
Executive Summary<br />
The <strong>City</strong> has an existing agreement with ICF Consulting Services for environmental<br />
assessment and groundwater monitoring services in the Olympic Groundwater Basin<br />
which has proven beneficial in achieving the Gillette/Boeing settlement agreements.<br />
Continuing work pursuant to regulatory requirements include the installation <strong>of</strong><br />
additional monitoring wells, ongoing groundwater monitoring, and continuing technical<br />
support. Additional funding in the amount <strong>of</strong> $1,370,805 is necessary to complete<br />
additional tasks for the period from May 14, 2013 to June 30, 2014.<br />
Background<br />
On April 8, 2008, Council approved ICF Consulting Services, LLC (ICF) to provide<br />
environmental remediation services at the <strong>City</strong> Corporation Yard (CCY) for up to five<br />
years. The resulting contract for environmental services (Pr<strong>of</strong>essional Services<br />
Agreement #8914 CCS) included quarterly groundwater monitoring, remediation system<br />
1
installation, and technical support related to potential contamination from the The<br />
Gillette Company (Gillette) and its impact on the Olympic Well Field.<br />
On May 12, 2009, a first modification Agreement #8914 (CCS) was executed to include<br />
allowances for additional remediation services at CCY, technical support related to the<br />
<strong>City</strong>’s dispute with Gillette over contamination <strong>of</strong> the Olympic Well Field, and associated<br />
interactions with the Regional Water Quality Control Board (RWQCB). In 2009, it<br />
became apparent that the former Papermate facility (owned by Gillette and, by<br />
acquisition, Proctor & Gamble) was a significant source <strong>of</strong> the Perchloroethylene (PCE)<br />
and Trichloroethylene (TCE) observed in groundwater. <strong>City</strong> staff requested additional<br />
assistance from ICF to help develop a technical argument supporting the <strong>City</strong>’s position<br />
that releases from Gillette’s operation had indeed contaminated groundwater in the<br />
Olympic Well Field. The work involved the review <strong>of</strong> reports, work plans, modeling, and<br />
correspondence prepared by Gillette.<br />
On June 14, 2011, a second modification Agreement #8914 (CCS) was executed to<br />
extend the term <strong>of</strong> the contract for an additional two year period beginning May 13,<br />
2011 through May 13, 2013, and provide additional funding for continued environmental<br />
assessment and remediation services. During this period, ICF was instrumental in<br />
providing technical support to the <strong>City</strong> in addressing contamination originating from the<br />
Boeing property, formerly the Douglas Aircraft Facility in <strong>Santa</strong> <strong>Monica</strong>.<br />
Discussion<br />
Throughout 2011 and 2012, ICF continued to conduct activities associated with<br />
managing the Olympic Well Field and adhering to certain RWQCB requirements,<br />
including the abandonment <strong>of</strong> additional monitor wells, installation <strong>of</strong> replacement,<br />
monitor wells, and quarterly groundwater monitoring. In June 2012, the <strong>City</strong> submitted,<br />
and RWQCB approved, the Olympic Well Field Management Plan (Plan). The Plan<br />
includes very specific actions the <strong>City</strong> intends to conduct to prudently manage the<br />
Olympic Well Field so that <strong>City</strong> is able to deliver water <strong>of</strong> the highest quality to its<br />
2
esidents. Specifically, the Plan provides details on the long-term groundwater<br />
monitoring program, locations <strong>of</strong> additional wells to monitor water levels and measure<br />
contaminant concentrations, and modeling efforts that are needed to understand<br />
contaminant migration throughout the Olympic Well Field.<br />
In this regard, several non-routine activities in the Plan have been identified that can be<br />
completed by ICF due to the firm’s unique knowledge <strong>of</strong> the Olympic Well Field, the<br />
Gillette site, the Boeing site, RWQCB staff, and <strong>City</strong> administrative programs and<br />
policies. These non-routine elements can be completed by June 30, 2014. Tasks, and<br />
associated costs, to be performed by ICF under this amendment include:<br />
• Installation <strong>of</strong> Groundwater Monitor Wells – Pursuant to the Boeing settlement,<br />
and as specified in the Plan, ICF would install five additional deep groundwater<br />
monitoring wells at RWQCB-approved locations at a cost <strong>of</strong> $550,000 including<br />
contingency.<br />
• Long-Term Groundwater Monitoring – ICF would continue long-term required<br />
monitoring <strong>of</strong> old wells located on the former Gillette property, CCY and<br />
Bergamot property, and wells installed in 2012. A few new wells would be added<br />
to this network in 2013, after which time, the monitoring well network is expected<br />
to be complete at a cost <strong>of</strong> $322,505 including contingency.<br />
• <strong>City</strong> Corporation Yard Remediation System Abandonment – The <strong>City</strong> will receive<br />
site closure status from RWQCB in 2013. Upon issuance <strong>of</strong> closure, RWQCB will<br />
require that all remediation system components, monitor wells, sparge wells, and<br />
ancillary equipment be abandoned. ICF would perform the abandonment <strong>of</strong> 28<br />
sparge wells, 12 monitoring wells, horizontal conveyance piping, and other<br />
related equipment in accordance with applicable standards at a cost <strong>of</strong> $388,300<br />
including contingency.<br />
• As-Needed Technical Support – ICF would assist the <strong>City</strong> is in responding to<br />
technical inquiries from RWQCB, Gillette, Boeing, MTA, and others regarding<br />
environmental matters. This is estimated at $110,000 including contingency.<br />
Given the project- and site-specific knowledge and experience obtained by ICF during<br />
the previous five years, coupled with their performance and sensitivity to <strong>City</strong> needs,<br />
staff recommends retaining ICF for continued monitoring and support services through<br />
June 30, 2014.<br />
3
Financial Impacts & Budget Actions<br />
The agreement modification to be awarded to ICF is $1,370,805, for an amended<br />
agreement total not to exceed $3,775,098. Award <strong>of</strong> the agreement modification<br />
requires the following budget actions:<br />
1. Release <strong>of</strong> $1,370,805 from Gilette settlement funds fro the Olympic Basin<br />
Remediation at 1.380237.<br />
2. Appropriation <strong>of</strong> $1,370.805 to account 25671.555060.<br />
3. Appropriation <strong>of</strong> budgets for transfers from the General Fund (01695.570080) to<br />
the Water Fund (25695.570080).<br />
Prepared by: Gil Borboa, P.E., Water Resources Manager<br />
Approved:<br />
Forwarded to Council:<br />
Martin Pastucha<br />
Director <strong>of</strong> Public Works<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
4
<strong>City</strong> Council Report<br />
To:<br />
From:<br />
Subject:<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
<strong>Agenda</strong> Item: 3-G<br />
Mayor and <strong>City</strong> Council<br />
Gigi Decavalles-Hughes, Director <strong>of</strong> Finance<br />
Presentation <strong>of</strong> Independent Auditor Report<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council receive and file the independent auditors’<br />
unqualified audit report for the <strong>City</strong>’s financial statements for the fiscal year ended June<br />
30, 2012 and the attached Auditor’s Letter to Council.<br />
Executive Summary<br />
As required by the <strong>City</strong> Charter, independent auditors audit the <strong>City</strong>’s financial<br />
statements each fiscal year. The <strong>City</strong>’s financial statements for the fiscal year ended<br />
June 30, 2012, with the independent auditors’ unqualified opinion, are embodied in the<br />
<strong>City</strong>’s Comprehensive Annual Financial Report (CAFR). The CAFR is available at the<br />
<strong>City</strong>’s libraries and on line. A letter from the <strong>City</strong>’s independent auditors communicating<br />
audit findings and other matters is also submitted with this report.<br />
Discussion<br />
As required by the <strong>City</strong> Charter, financial statements are prepared by the <strong>City</strong> and<br />
audited by independent auditors. The <strong>City</strong>’s independent auditors, Macias Gini<br />
O’Connell, LLP, have audited the financial statements for the fiscal year ended June 30,<br />
2012, issued an unqualified opinion, and have provided a letter summarizing their audit<br />
findings and other matters, a required communication under generally accepted auditing<br />
standards. .<br />
With an unqualified opinion, the auditors have neither qualifications nor reservations<br />
about the financial statements as presented. The auditors’ formal opinion and<br />
accompanying financial statements are embodied in the <strong>City</strong>’s CAFR, which is now<br />
accessible at the <strong>City</strong>’s libraries and on the <strong>City</strong>’s Finance website as well as attached<br />
to this report.<br />
1
In the letter to Council, auditors have identified sensitive disclosures related to the<br />
dissolution <strong>of</strong> the <strong>City</strong>’s Redevelopment Agency and have summarized audit differences<br />
and recommended reclassifications to the financial statements. The uncorrected<br />
recommended reclassifications were proposed for presentation only and have no impact<br />
on the financial condition <strong>of</strong> <strong>City</strong> funds.<br />
Jim Godsey, audit partner from Macias Gini and O’Connell, LLC, will be available during<br />
the meeting on April 23, 2013, to answer any questions.<br />
Financial Impacts & Budget Actions<br />
There is no budget/financial impact to receive and file this report.<br />
Prepared by: Candace Tysdal, Financial Operations Manager<br />
Approved:<br />
Forwarded to Council:<br />
Gigi Decavalles-Hughes<br />
Director <strong>of</strong> Finance<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
Attachments:<br />
A. Auditor’s Letter to Council<br />
B. Comprehensive Annual Financial Report for the year ended June 30, 2012<br />
2
ATTACHMENT A<br />
Los Angeles<br />
777 S. Figueroa Street, Suite 2500<br />
Los Angeles, CA 90017<br />
213.408.8700<br />
Sacramento<br />
Walnut Creek<br />
April 23, 2013<br />
To the Honorable <strong>City</strong> Council<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California<br />
Oakland<br />
Century <strong>City</strong><br />
Newport Beach<br />
We have audited the financial statements <strong>of</strong> the governmental activities, the business-type activities, each<br />
major fund, and the aggregate remaining fund information <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (<strong>City</strong>) for the year<br />
ended June 30, 2012. Pr<strong>of</strong>essional standards require that we provide you with information about our<br />
responsibilities under generally accepted auditing standards, Government Auditing Standards, and OMB<br />
Circular A-133, as well as certain information related to the planned scope and timing <strong>of</strong> our audit. We<br />
have communicated such information in our letter to you dated July 30, 2012. Pr<strong>of</strong>essional standards also<br />
require that we communicate to you the following information related to our audit.<br />
San Diego<br />
Seattle<br />
Significant Audit Findings<br />
Qualitative Aspects <strong>of</strong> Accounting Practices<br />
Management is responsible for the selection and use <strong>of</strong> appropriate accounting policies. The significant<br />
accounting policies used by the <strong>City</strong> are described in Note 1 to the financial statements. No new<br />
accounting policies were adopted and the application <strong>of</strong> existing policies was not changed during 2012.<br />
We noted no transactions entered into by the governmental unit during the year for which there is a lack<br />
<strong>of</strong> authoritative guidance or consensus. All significant transactions have been recognized in the financial<br />
statements in the proper period.<br />
Accounting estimates are an integral part <strong>of</strong> the financial statements prepared by management and are<br />
based on management’s knowledge and experience about past and current events and assumptions about<br />
future events. Certain accounting estimates are particularly sensitive because <strong>of</strong> their significance to the<br />
financial statements and because <strong>of</strong> the possibility that future events affecting them may differ<br />
significantly from those expected. The most sensitive estimates affecting the governmental activities’ and<br />
business-type activities’ financial statements were:<br />
Management’s estimate <strong>of</strong> depreciation is based on the estimated useful lives <strong>of</strong> capital<br />
assets. We evaluated the key factors and assumptions used to develop the depreciation<br />
expense in determining that it is reasonable in relation to the financial statements taken as<br />
a whole.<br />
Management’s estimate <strong>of</strong> the claims payable is based on reports prepared by third party<br />
administrators, actuarial valuations, and the reports prepared by management. We<br />
evaluated the key factors and assumptions used to develop the claims payable in<br />
determining that it is reasonable in relation to the financial statements taken as a whole.<br />
Management’s estimates <strong>of</strong> the net pension obligation and other post-employment<br />
benefits obligation is based on reports prepared by third party administrators and actuarial<br />
valuations. We evaluated the key factors and assumptions used to develop the net pension<br />
obligation and the other post-employment benefits obligation in determining that they are<br />
reasonable in relation to the financial statements taken as a whole.<br />
www.mgocpa.com
Management’s estimate <strong>of</strong> the pollution remediation obligation is based on expected<br />
outlays to be incurred to settle those liabilities. We evaluated the key factors and<br />
assumptions used to develop the pollution remediation obligation in determining that it is<br />
reasonable in relation to the financial statements taken as a whole.<br />
Certain financial statement disclosures are particularly sensitive because <strong>of</strong> their significance to financial<br />
statement users. The most sensitive disclosures affecting the financial statements were:<br />
The disclosure in Note 17 to the financial statements, which discusses the California State<br />
Legislature’s enacted legislation that dissolved redevelopment agencies in the State <strong>of</strong><br />
California as <strong>of</strong> February 1, 2012. On February 1, 2012, the <strong>City</strong>, as the Successor<br />
Agency to the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Redevelopment Agency, became responsible for the<br />
overseeing <strong>of</strong> the dissolution process and the wind down <strong>of</strong> redevelopment activity.<br />
The disclosure in Note 17 to the financial statements, which discusses the Moody’s<br />
downgrade <strong>of</strong> all California redevelopment Tax Allocation Bonds within the State,<br />
including the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Redevelopment Agency’s (Former Agency)<br />
Earthquake Redevelopment Bonds Series 2006. This downgrade triggered an event <strong>of</strong><br />
default in two <strong>of</strong> the Former Agency’s loans, making them subject to call. The lender on<br />
one <strong>of</strong> the loans has agreed to forbear on exercising default remedies at least through<br />
April 2013, at which time the status <strong>of</strong> this loan will be evaluated for continuing<br />
forbearance. The lender on the other loan has taken no action.<br />
The disclosure in Note 18 to the financial statements, which discusses the State <strong>of</strong><br />
California Department <strong>of</strong> Finance’s (DOF) determination regarding the Due Diligence<br />
Review required under redevelopment dissolution law. The Successor Agency does not<br />
agree with the entire amount included in the DOF’s determination. Due to the inherent<br />
uncertainties involved in the application <strong>of</strong> the redevelopment dissolution law,<br />
management cannot presently determine the ultimate outcome <strong>of</strong> this issue.<br />
The financial statement disclosures are neutral, consistent, and clear.<br />
Difficulties Encountered in Performing the Audit<br />
We encountered no significant difficulties in dealing with management in performing and completing our<br />
audit.<br />
Corrected and Uncorrected Misstatements<br />
Pr<strong>of</strong>essional standards require us to accumulate all known and likely misstatements identified<br />
during the audit, other than those that are clearly trivial, and communicate them to the appropriate<br />
level <strong>of</strong> management. The attached schedule summarizes audit differences and reclassifications<br />
recommended for the financial statements. Management has determined that the effects <strong>of</strong> these<br />
differences are immaterial, both individually and in the aggregate, to the financial statements<br />
taken as a whole.<br />
The uncorrected recommended reclassifications in the attached schedule were proposed for<br />
management consideration. There is no impact to the financial condition <strong>of</strong> <strong>City</strong> funds. They are<br />
proposed for presentation purposes only.<br />
2
Disagreements with Management<br />
For purposes <strong>of</strong> this letter, a disagreement with management is a financial accounting, reporting, or<br />
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial<br />
statements or the auditor’s report. We are pleased to report that no such disagreements arose during the<br />
course <strong>of</strong> our audit.<br />
Management Representations<br />
We have requested certain representations from management that are included in the management<br />
representation letter dated January 31, 2013, as updated through February 25, 2013.<br />
Management Consultations with Other Independent Accountants<br />
In some cases, management may decide to consult with other accountants about auditing and accounting<br />
matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves<br />
application <strong>of</strong> an accounting principle to the governmental unit’s financial statements or a determination<br />
<strong>of</strong> the type <strong>of</strong> auditor’s opinion that may be expressed on those statements, our pr<strong>of</strong>essional standards<br />
require the consulting accountant to check with us to determine that the consultant has all the relevant<br />
facts. To our knowledge, there were no such consultations with other accountants.<br />
Other Audit Findings or Issues<br />
We generally discuss a variety <strong>of</strong> matters, including the application <strong>of</strong> accounting principles and auditing<br />
standards, with management each year prior to retention as the governmental unit’s auditors. However,<br />
these discussions occurred in the normal course <strong>of</strong> our pr<strong>of</strong>essional relationship and our responses were<br />
not a condition to our retention.<br />
Other Matters<br />
With respect to the supplementary information accompanying the financial statements, we made certain<br />
inquiries <strong>of</strong> management and evaluated the form, content, and methods <strong>of</strong> preparing the information to<br />
determine that the information complies with accounting principles generally accepted in the United<br />
States <strong>of</strong> America, the method <strong>of</strong> preparing it has not changed from the prior period, and the information<br />
is appropriate and complete in relation to our audit <strong>of</strong> the financial statements. We compared and<br />
reconciled the supplementary information to the underlying accounting records used to prepare the<br />
financial statements or to the financial statements themselves.<br />
This information is intended solely for the use <strong>of</strong> <strong>City</strong> Council and management <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong> and is not intended to be, and should not be, used by anyone other than these specified parties.<br />
Very truly yours,<br />
Los Angeles, California<br />
3
CITY OF SANTA MONICA<br />
Audit Difference and Reclassification Summary<br />
June 30, 2012<br />
DESCRIPTION<br />
Recommended<br />
Journal Entry<br />
Debit Credit<br />
GOVERNMENTAL ACTIVITIES/ BUSINESS-TYPE ACTIVITIES<br />
Net Pension Asset- Governmental Activities $ 15,218,168<br />
Net Pension Asset- Business-type Activities 4,781,832<br />
Expenses - General Services - Governmental Activities 7,589,096<br />
Expenses - Business-type Activities 2,410,904<br />
Unrestricted Net Assets - Governmental Activities 7,629,072<br />
Unrestricted Net Assets - Business-type Activities 2,370,928<br />
To record a net pension asset for the discretionary payment made to PERS in FY11 and FY12<br />
GENERAL FUND<br />
Other Revenue 66,954,121<br />
Redevelopment Income 66,954,121<br />
To reclassify transfers <strong>of</strong> funds from the former RDA to a separate line item<br />
RESOURCE RECOVERY & RECYCLING FUND<br />
Liab. Pay from Restricted Assets - Noncurrent 8,639,844<br />
Liab. Pay from Restricted Assets - Current 8,639,844<br />
To reclassify liabilities payable from restricted assets from current to noncurrent to correspond with related restricted asset<br />
WATER FUND (AGGREGATE REMAINING OPINION UNIT)<br />
Fund Balance - Unrestricted 566,149<br />
Water Purchase Expense 25671.522140 566,149<br />
To reclassify water purchases expense in FY12 for amounts that should have been recorded in FY11.<br />
CITY FUND (AGGREGATE REMAINING OPINION UNIT)<br />
Advance Refunding Escrow - Debt Service 364,583<br />
Pmt to Refunded Bond Escrow Agent - OFS 364,583<br />
To reclassify payment to refunded bond escrow agent to debt service as payment was made from cash on hand.<br />
4
ComprehensiveAnnualFinancialReport<br />
YearendedJune30,2012
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
California<br />
Comprehensive Annual Financial Report<br />
Year ended June 30, 2012<br />
Prepared by the Finance Department<br />
Gigi Decavalles-Hughes Director <strong>of</strong> Finance/<strong>City</strong> Treasurer<br />
Candace Tysdal Financial Operations Manager<br />
Randy Chow Financial Reporting Supervisor<br />
Scott Lowe Financial Reporting Supervisor<br />
Imelda De Leon Senior Accountant<br />
Steven Hull Senior Accountant<br />
Stella Huang Accountant II<br />
Michael Towler Accountant II<br />
Steve Gomez Accountant II<br />
Martha Romero Accountant I<br />
Tex Yamada Accountant I<br />
Jennifer Young Executive Administrative Assistant
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California<br />
Year Ended June 30, 2012<br />
INTRODUCTORY SECTION
CITY OF SANTA MONICA, CALIFORNIA<br />
Comprehensive Annual Financial Report<br />
For the fiscal year ended June 30, 2012<br />
INTRODUCTORY SECTION<br />
Table <strong>of</strong> Contents<br />
Page<br />
Letter <strong>of</strong> Transmittal .......................................................................................................................... v<br />
Officials <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> ................................................................................................ xi<br />
Organizational Chart – <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> ................................................................................... xii<br />
GFOA Certificate <strong>of</strong> Achievement for Excellence in Financial Reporting ....................................... xiii<br />
FINANCIAL SECTION<br />
Independent Auditor’s Report ........................................................................................................... 1<br />
Management’s Discussion and Analysis (Required Supplementary Information) ............................ 3<br />
Basic Financial Statements:<br />
Government-Wide Financial Statements:<br />
Statement <strong>of</strong> Net Assets .............................................................................................................. 23<br />
Statement <strong>of</strong> Activities ................................................................................................................ 24<br />
Fund Financial Statements:<br />
Balance Sheet – Governmental Funds ........................................................................................ 26<br />
Reconciliation <strong>of</strong> the Governmental Funds Balance Sheet to the Government-Wide<br />
Statement <strong>of</strong> Net Assets .............................................................................................................. 27<br />
Statement <strong>of</strong> Revenues, Expenditures, and Changes in Fund Balances –<br />
Governmental Funds ................................................................................................................ 28<br />
Reconciliation <strong>of</strong> the Statement <strong>of</strong> Revenues, Expenditures, and Changes in Fund<br />
Balances <strong>of</strong> Governmental Funds to the Statement <strong>of</strong> Activities ............................................. 29<br />
Statement <strong>of</strong> Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual<br />
(Non-GAAP Basis) – General Fund ........................................................................................ 30<br />
Statement <strong>of</strong> Net Assets – Proprietary Funds .............................................................................. 34<br />
Statement <strong>of</strong> Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds ........ 35<br />
Statement <strong>of</strong> Cash Flows – Proprietary Funds ............................................................................ 36<br />
Statement <strong>of</strong> Fiduciary Net Assets – Fiduciary Funds ................................................................ 40<br />
Statement <strong>of</strong> Revenues, Expenses and Changes in Fiduciary Net Assets – Fiduciary Fund ...... 41<br />
Notes to Basic Financial Statements:<br />
Note 1 – Summary <strong>of</strong> Significant Accounting Policies ............................................................ 43<br />
Note 2 – Budgetary and Legal Compliance .............................................................................. 52<br />
Note 3 – Reconciliation <strong>of</strong> Fund Financial Statements to Government-Wide Financial<br />
Statements .................................................................................................................. 53<br />
Note 4 – Pollution Remediation ................................................................................................ 56<br />
Note 5 – Cash and Investments ................................................................................................. 58<br />
Note 6 – Notes Receivable ........................................................................................................ 64<br />
Note 7 – Capital Assets ............................................................................................................. 71<br />
Note 8 – Deferred/Unearned Revenue ...................................................................................... 72<br />
Note 9 – Long-Term Liabilities ................................................................................................ 74<br />
Note 10 – Fund Deficits .............................................................................................................. 78<br />
Note 11 – Interfund Transactions ................................................................................................ 79<br />
Note 12 – Restricted Net Assets .................................................................................................. 83<br />
Note 13 – Fund Balances ............................................................................................................ 83<br />
Note 14 – Litigation and Contingencies ...................................................................................... 87<br />
Note 15 – Self-Insurance ............................................................................................................. 89<br />
i
CITY OF SANTA MONICA, CALIFORNIA<br />
Comprehensive Annual Financial Report<br />
For the fiscal year ended June 30, 2012<br />
Table <strong>of</strong> Contents, Continued<br />
Page<br />
Note 16 – Employee Benefit Programs ....................................................................................... 90<br />
Note 17 – Successor Agency… ………………………………………………………………. . 97<br />
Note 18 – Due Diligence Liability…………………………………………………………. ..... 103<br />
Note 19 – Subsequent Event… ………………………………………………………………. .. 104<br />
SUPPLEMENTARY INFORMATION<br />
NON-MAJOR FUNDS / OTHER FINANCIAL INFORMATION<br />
Combining and Individual Fund Statements and Schedules:<br />
Combining Balance Sheet – Nonmajor Governmental Funds by Fund Type ................................ 107<br />
Combining Statement <strong>of</strong> Revenues, Expenditures and Changes in Fund Balances<br />
(Deficits) Nonmajor Governmental Funds by Fund Type .............................................................. 111<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in Fund Balance (Deficit) – Budget and<br />
Actual (Non-GAAP Basis) – Major and Nonmajor Governmental Funds –<br />
Capital Projects Funds:<br />
Special Revenue Source .......................................................................................................... 115<br />
Earthquake Recovery Redevelopment Project ......................................................................... 116<br />
Clean Beaches and Ocean Parcel Tax ...................................................................................... 117<br />
Beach Recreation ..................................................................................................................... 118<br />
Housing Authority ................................................................................................................... 119<br />
Disaster Relief Fund ................................................................................................................ 120<br />
Tenant Ownership Rights Charter Amendment (TORCA) ...................................................... 121<br />
Housing Projects ...................................................................................................................... 122<br />
Low/Mod Housing Projects ..................................................................................................... 123<br />
Downtown Redevelopment Project ......................................................................................... 124<br />
Ocean Park Redevelopment Project ......................................................................................... 125<br />
Community Development Block Grant (CDBG) ..................................................................... 126<br />
Miscellaneous Grants ............................................................................................................... 127<br />
Citizens Option for Public Safety ............................................................................................ 128<br />
Air Quality Management District (AQMD)............................................................................. 129<br />
Parks and Recreation .............................................................................................................. 130<br />
Gas Tax .................................................................................................................................... 131<br />
Combining Statement <strong>of</strong> Net Assets – Nonmajor Enterprise Funds .............................................. 134<br />
Combining Statement <strong>of</strong> Revenues, Expenses and Changes in Fund Net Assets –<br />
Nonmajor Enterprise Funds ........................................................................................................ 135<br />
Combining Statement <strong>of</strong> Cash Flows – Nonmajor Enterprise Funds ............................................. 136<br />
Combining Statement <strong>of</strong> Net Assets – Internal Service Funds ...................................................... 140<br />
Combining Statement <strong>of</strong> Revenues, Expenses and Changes in Net Assets – Internal Service<br />
Funds .......................................................................................................................................... 141<br />
Combining Statement <strong>of</strong> Cash Flows – Internal Service Funds ..................................................... 142<br />
Combining Statement <strong>of</strong> Fiduciary Assets and Liabilities – Agency Funds .................................. 144<br />
Combining Statement <strong>of</strong> Revenues, Expenses and Changes in Fiduciary Assets and Liabilities<br />
– Agency Funds ......................................................................................................................... 145<br />
ii
CITY OF SANTA MONICA, CALIFORNIA<br />
Comprehensive Annual Financial Report<br />
For the fiscal year ended June 30, 2012<br />
Table <strong>of</strong> Contents, Continued<br />
STATISTICAL SECTION<br />
Table Page<br />
Financial Trends Information<br />
Net Assets by Component – Last Ten Fiscal Years .............................................................. 1 149<br />
Changes in Net Assets – Last Ten Fiscal Years ................................................................... 2 150<br />
Fund Balance <strong>of</strong> Governmental Funds – Last Ten Fiscal Years .......................................... 3 153<br />
Changes in Fund Balance <strong>of</strong> Governmental Funds – Last Ten Fiscal Years ........................ 4 154<br />
General Fund Tax Revenues by Source – Last Ten Fiscal Years ......................................... 5 156<br />
Revenue Capacity Information<br />
Assessed Value and Actual Value <strong>of</strong> Taxable Property – Last Ten Fiscal Years ................ 6 157<br />
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years .................................. 7 158<br />
Principal Property Tax Payers – Current Fiscal Year and Nine Years Ago ......................... 8 159<br />
Property Tax Levies and Collections – Last Ten Fiscal Years ............................................. 9 160<br />
Taxable Transactions by Type <strong>of</strong> Business – Last Ten Calendar Years ............................... 10 161<br />
Debt Capacity Information<br />
Ratios <strong>of</strong> Outstanding Debt by Type – Last Ten Fiscal Years ............................................. 11 162<br />
Ratios <strong>of</strong> General Bonded Debt – Last Ten Fiscal Years ..................................................... 12 163<br />
Direct and Overlapping Governmental Activities Debt as <strong>of</strong> June 30, 2012 ........................ 13 164<br />
Computation <strong>of</strong> Legal Debt Margin – Last Ten Fiscal Years ............................................... 14 165<br />
Wastewater Enterprise Revenue Bonds Coverage ................................................................ 15 166<br />
Redevelopment Agency Earthquake Recovery Project Tax Allocation Bonds Coverage .... 16 167<br />
Redevelopment Agency Ocean Park Project Tax Allocation Refunding Bonds Coverage .. 17 168<br />
Parking Authority <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Lease Revenue Refunding Bonds<br />
Schedule <strong>of</strong> Debt Service Payments Made ....................................................................... 18 169<br />
<strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Bonds:<br />
Series 2011A Public Structure 6 Project Schedule <strong>of</strong> Debt Service Payments Made ....... 19 170<br />
Series 2011B Public Safety Facility Project Schedule <strong>of</strong> Debt Service Payments Made .. 20 171<br />
Series 2004 Civic Center Parking Project Schedule <strong>of</strong> Debt Service Payments Made ..... 21 172<br />
Refunding Bonds, Series 2009 Public Safety Facility Project Schedule <strong>of</strong> Debt<br />
Service Payments Made .................................................................................................... 22 173<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> General Obligation Bonds, Series 2012 Library Improvement<br />
Project Schedule <strong>of</strong> Debt Service Payments Made ............................................................ 23 174<br />
Demographic and Economic Information<br />
Demographic and Economic Statistics – Last Ten Calendar Years ..................................... 24 175<br />
Principal Employers – Current Year and Nine Years Ago ................................................... 25 176<br />
Operating Information<br />
Full-time Equivalent <strong>City</strong> Government Employees by Function/Program –<br />
Last Nine Fiscal Years ...................................................................................................... 26 177<br />
Operating Indicators by Function/Program – Last Seven Fiscal Years ................................ 27 178<br />
Capital Asset Statistics by Function/Program – Last Seven Fiscal Years ............................ 28 179<br />
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Finance Department<br />
1717 Fourth Street, Suite 250<br />
<strong>Santa</strong> <strong>Monica</strong>, CA 90401<br />
February 25, 2013<br />
Dear Honorable Mayor and Members <strong>of</strong> the <strong>City</strong> Council, <strong>City</strong> Manager, and Citizens <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>:<br />
Attached is the Comprehensive Annual Financial Report (CAFR) for the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for the<br />
fiscal year ended June 30, 2012 (FY 2011-12).<br />
The CAFR has been prepared by Finance Department staff in conformance with the principles and<br />
standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB),<br />
the authoritative body establishing U.S. generally accepted accounting principles for local governments.<br />
Management assumes full responsibility for the completeness and reliability <strong>of</strong> the information<br />
contained in this report, based upon a comprehensive framework <strong>of</strong> internal controls established for that<br />
purpose. Because the cost <strong>of</strong> internal control should not exceed anticipated benefits, the objective is to<br />
provide reasonable, rather than absolute, assurance that the financial statements are free <strong>of</strong> any material<br />
misstatements.<br />
The CAFR has been compiled in a manner designed to fairly set forth the financial positions and results<br />
<strong>of</strong> operations <strong>of</strong> the <strong>City</strong>. The CAFR includes disclosures designed to enable the reader to gain an<br />
understanding <strong>of</strong> the <strong>City</strong>’s financial affairs.<br />
In accordance with generally accepted accounting principles, a narrative overview and analysis <strong>of</strong> the<br />
basic financial statements in the form <strong>of</strong> Management’s Discussion and Analysis (MD&A) is provided<br />
and can be found immediately following the independent auditors’ report. This letter <strong>of</strong> transmittal<br />
complements the MD&A and should be read in conjunction with it.<br />
Macias Gini & O’Connell LLP has issued an unqualified (clean) opinion on the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>’s<br />
financial statements for FY2011-12. Their report is located at the front <strong>of</strong> the financial section <strong>of</strong> this<br />
report.<br />
PROFILE OF THE CITY OF SANTA MONICA<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, bordered by the <strong>City</strong> <strong>of</strong> Los Angeles on three sides and by the Pacific Ocean<br />
on the west, encompasses an area slightly greater than eight square miles and serves a residential<br />
population <strong>of</strong> 90,223 making it the 19th largest <strong>of</strong> the 88 cities in Los Angeles County.<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, incorporated in 1886, adopted its <strong>City</strong> Charter in 1945, and established a<br />
council-manager form <strong>of</strong> government in 1947. Elections are held every two years for either three or<br />
four Council members elected to serve four-year terms on the seven-member <strong>City</strong> Council. Elected<br />
Council members select a Mayor and a Mayor Pro-Tempore to preside over Council meetings.<br />
v<br />
tel: 310 458-8281 ● fax: 310-394-0644
The <strong>City</strong> Council appoints a <strong>City</strong> Manager, a <strong>City</strong> Attorney and a <strong>City</strong> Clerk. The <strong>City</strong> Manager,<br />
responsible for supervising day-to-day operations <strong>of</strong> the <strong>City</strong> and for carrying out policies set by the<br />
Council, appoints Department directors.<br />
The <strong>City</strong> provides a full range <strong>of</strong> services, including police and fire protection, water and wastewater<br />
utilities, street maintenance, public transportation, parking, parks and recreation, planning, and building<br />
and safety. Elementary and secondary education is provided by the <strong>Santa</strong> <strong>Monica</strong> Malibu Unified<br />
School District, and community college education is provided by the <strong>Santa</strong> <strong>Monica</strong> College District.<br />
Court, health, and social services are provided by the County <strong>of</strong> Los Angeles. Gas, electric and<br />
telephone services are provided by private utility companies.<br />
Financial data for all funds through which services are provided by the <strong>City</strong> have been included in this<br />
report based on the criteria adopted by GASB.<br />
FINANCIAL CONDITION AND OUTLOOK<br />
Recent economic news indicates that an economic recovery appears to be taking hold. Unemployment<br />
data is slowly improving, the economy is growing modestly, and the housing market continues to show<br />
signs <strong>of</strong> recovery. On a State level, in November 2012, following two years <strong>of</strong> budget cuts, voters<br />
passed Proposition 30. On January 10, 2013, the Governor’s FY 2013-14 Proposed Budget showed that,<br />
as a result <strong>of</strong> new revenue from Proposition 30’s temporary sales tax increase and increase to income<br />
taxes on California’s top three percent <strong>of</strong> income earners, as well as higher than anticipated revenues<br />
coming from a recovering economy, and a continuation <strong>of</strong> spending cuts made in past years, the State no<br />
longer faces a deficit. The State’s unemployment rate continues to be the third highest in the country, at<br />
9.8 percent in November 2012. However, the forecast is positive overall, as California continues to<br />
outpace other states in job growth (it currently ranks eighth in the country) and the state’s housing<br />
market shows strong signs <strong>of</strong> recovery.<br />
<strong>Santa</strong> <strong>Monica</strong> tends to weather economic downturns better and recover faster than other jurisdictions<br />
due in large part to its geographic location and to its diversified tax revenue base, which generally<br />
protects the <strong>City</strong> from downturns that impact one or a limited number <strong>of</strong> sectors <strong>of</strong> the economy. The<br />
<strong>City</strong>’s major tax revenues have recovered significantly and, for the most part, have reached or exceeded<br />
pre-recession levels. Property values in the <strong>City</strong> increased by 3.6 percent in 2012, the second<br />
consecutive yearly gain. Total assessed value ranked third in Los Angeles County after only the cities <strong>of</strong><br />
Los Angeles and Long Beach. Modest growth is expected to continue.<br />
Sales tax receipts, which declined for two consecutive years due to the economy and the temporary<br />
closure <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Place for remodeling, have also turned around as the economy recovers and<br />
<strong>Santa</strong> <strong>Monica</strong> Place has re-opened. Additionally, the <strong>City</strong>’s voters approved a half-cent transaction and<br />
use tax in November 2010, resulting in an overall sales tax revenue increase <strong>of</strong> 44 percent in FY 2011-<br />
12. As with property taxes, modest growth is expected to continue.<br />
Tourism, which provides a major stimulus to the local economy by creating jobs and producing<br />
revenues, continues to exhibit strength as FY 2011-12 Transient Occupancy Tax revenues grew by 10.4<br />
percent over the previous year. Moderate growth is expected to continue.<br />
Utility users’ taxes are projected to remain relatively flat, while business license taxes are expected to<br />
grow slowly, following the general course <strong>of</strong> the local economy. Interest rates, which fell to historically<br />
low levels over the last three years, significantly impacting the <strong>City</strong>’s investment income, are expected<br />
to remain at relatively low levels for several more years.<br />
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In November 2010, <strong>Santa</strong> <strong>Monica</strong> voters passed Measure Y, establishing a ½ cent transaction and use<br />
tax. This tax is assessed similarly to a sales tax, became effective on April 1, 2011, and has no sunset.<br />
Along with Measure Y, voters passed Measure YY, an advisory measure that recommends that Council<br />
allocate half <strong>of</strong> the revenue from Measure Y for school purposes. In FY 2011-12, the tax generated<br />
nearly $13 million in additional sales tax revenues, which was shared with the <strong>Santa</strong> <strong>Monica</strong> Malibu<br />
Unified School District according to the Program Agreement approved by Council on May 26, 2011.<br />
Overall, the <strong>City</strong>’s fund balances continued to benefit from a number <strong>of</strong> cost saving measures approved<br />
by Council and implemented since FY 2011-12. The most noteworthy changes relate to compensation<br />
structure changes approved by employees during the collective bargaining process, including annual<br />
incremental increases to public safety employee pension contributions and a second tier <strong>of</strong> reduced<br />
retirement benefits for new miscellaneous employees, and to decreased pension costs as a result <strong>of</strong> a<br />
second $10.0 million paydown (total <strong>of</strong> $20 million over two years) <strong>of</strong> the <strong>City</strong>’s unfunded pension<br />
liability. However, changes to actuarial demographic assumptions and the slow economic growth that<br />
threatens to keep CalPERS returns on investments lower than anticipated, require the <strong>City</strong> to continue to<br />
assess the possibility <strong>of</strong> increased contribution rates in the future. The <strong>City</strong> will continue to prepay its<br />
contributions to CalPERS, as it has done each year since FY2007-08, and to set aside related savings for<br />
future pension costs or further paydowns <strong>of</strong> unfunded liability. While these one-time funds will buffer<br />
the impact <strong>of</strong> increasing annual pension costs, it is important for the <strong>City</strong> to continue to work with its<br />
employees to identify measures that will ensure that increases in ongoing compensation costs do not<br />
outstrip those <strong>of</strong> revenue growth. The passage <strong>of</strong> the Public Employee Pension Reform Act, or PEPRA,<br />
in September 2012, will assist in further controlling cost increases in the future, as new employees will<br />
be required to increase their share <strong>of</strong> contribution costs.<br />
In addition to pension costs, health insurance costs are also increasing significantly and that trend is<br />
expected to continue in the near future. In FY2009-10, to mitigate the impacts <strong>of</strong> increasing health<br />
insurance costs, the <strong>City</strong> reached an agreement with miscellaneous and Fire Department employees to<br />
share in the cost. Beginning in FY2011-12, members <strong>of</strong> the Police Officers Association began<br />
contributing to their health insurance costs.<br />
On December 29, 2011, the California Supreme Court issued its decision in the case <strong>of</strong> California<br />
Redevelopment Association et al v. Matosantos et al. The lawsuit challenged the constitutionality <strong>of</strong> the<br />
State’s plan to eliminate redevelopment agencies unless cities agree to make one-time and on-going<br />
payments to the State. The Court upheld the part <strong>of</strong> the legislation that dissolves redevelopment<br />
agencies (AB1x26) while striking down the legislation that allowed for survival <strong>of</strong> redevelopment<br />
agencies that give money to the State (AB1x27). The net effect <strong>of</strong> the decision was to require all<br />
California redevelopment agencies, including the Redevelopment Agency (Agency) <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong> (RDA), to be dissolved as <strong>of</strong> February 1, 2012. On January 10, 2012, the Council elected to<br />
become the Successor Agency to the Redevelopment Agency in order to satisfy obligations <strong>of</strong> the<br />
former agency, as well as to retain housing assets and functions <strong>of</strong> the former agency. Subsequently,<br />
Council approved draft Recognized Obligation Payment Schedules (ROPS) and administrative budgets<br />
for the January – June 2012 (ROPS I), July - December 2012 (ROPS II), and January – July 2013<br />
(ROPS III) periods, as required by law. Pursuant to the requirements <strong>of</strong> the <strong>City</strong>-Agency Cooperation<br />
Agreement adopted on August 10, 2010, as well as State law at the time, the former Redevelopment<br />
Agency made payments to the <strong>City</strong> for implementation <strong>of</strong> priority projects. With the funds received<br />
from the Agency, the <strong>City</strong> entered into contracts with designers and contractors to implement priority<br />
projects. On June 27, 2012, as part <strong>of</strong> the FY 2012-13 State budget package, the State Legislature<br />
passed and the Governor signed AB 1484, a measure meant to clarify existing legislation related to the<br />
dissolution <strong>of</strong> redevelopment. To date, the Successor Agency has submitted to the California<br />
Department <strong>of</strong> Finance (DOF) an inventory <strong>of</strong> all housing assets and an accounting <strong>of</strong> all available cash<br />
and cash-equivalent housing assets (the Housing Due Diligence Review) and non-housing assets (the<br />
Non-Housing Due Diligence Review), as well as the ROPS for January through June 2013, and, held<br />
vii
meet and confer sessions with the DOF on the non-housing DDR and the ROPS to appeal a number <strong>of</strong><br />
DOF denials. Despite the appeal, the DOF maintained its decisions with one exception.<br />
Pending the outcome <strong>of</strong> these reviews, staff has been modeling various scenarios depending on the<br />
DOF’s potential decisions related to the <strong>City</strong>’s and Successor Agency’s ability to retain obligations and<br />
funds. In each scenario, the <strong>City</strong> would be required to cancel or defer capital improvement projects, or<br />
find new ways to finance other projects, such as the Civic Auditorium Renovation, Fire Station 1, and<br />
the Corporation Yards, as well as use General Fund capital and possibly economic uncertainty reserves<br />
to avoid impacts on services.<br />
Given the uncertain state <strong>of</strong> the economy and the largely unknown impacts from the elimination <strong>of</strong><br />
redevelopment, staff has been monitoring the <strong>City</strong>’s fiscal condition on a frequent basis and has<br />
recommended adjustments as needed. The <strong>City</strong> ended the fiscal year with a positive operating balance<br />
and a record General Fund Balance <strong>of</strong> $416.3 million Large reserves provide flexibility and resources<br />
for capital projects, future expenditures, retirement contribution increases and economic uncertainty, and<br />
<strong>Santa</strong> <strong>Monica</strong> continues to be a top destination for visitors and a high demand location for employers.<br />
While the cost saving measures and unanticipated revenue growth are assisting the <strong>City</strong> in maintaining a<br />
balanced budget over the next several years, an additional safeguard lies in the economic uncertainty<br />
reserve, which Council created in FY 2008-09 at $8.2 million, and increased in FY2010-11 by $1.5<br />
million for a $9.7 million balance at June 30, 2011. As noted above, the reserve will be used as a buffer,<br />
if needed, to allow the <strong>City</strong> to bring its budget into balance in a measured way, minimizing the impact to<br />
our employees and residents to the greatest extent possible. As stated previously, corrective actions to<br />
date have allowed the <strong>City</strong> to avoid the need to use any <strong>of</strong> the reserve so far.<br />
<strong>City</strong>wide Budget<br />
On June 21, 2011, Council adopted the FY 2011-12 Budget and approved the FY 2012-13 Budget Plan<br />
as part <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>’s FY 2011-13 Biennial Budget. On October 25, 2011, January 10,<br />
2012, and June 12, 2012, Council approved certain revisions to the FY 2011-12 Revised Budget that<br />
adjusted revenues, expenditures and staffing. On June 12, 2012, Council also adopted the FY 2012-13<br />
Budget, adopted the first year (FY 2012-13) and approved the second year (FY 2013-14) <strong>of</strong> the CIP<br />
Biennial Budget. The FY2012-13 Budget includes $599.3 million in expenditures, net <strong>of</strong><br />
reimbursements and transfers, for all funds. This represents an increase <strong>of</strong> 0.7% from the revised<br />
FY2011-12 Budget. <strong>City</strong>wide revenues, net <strong>of</strong> reimbursements and transfers, are estimated at $503.1<br />
million, a decrease <strong>of</strong> $181.4 million or 26.5%, from the revised FY 2011-12 budget. While the <strong>City</strong><br />
continues to benefit from a diverse source <strong>of</strong> revenues, particularly in the General Fund, the slow<br />
national and struggling State economies require ongoing assessment <strong>of</strong> revenue assumptions.<br />
The General Fund operating budget for FY2012-13, net <strong>of</strong> reimbursements and transfers, is estimated at<br />
$255.4 million and Capital Improvement Projects add an additional $34.6 million for a total General<br />
Fund budget <strong>of</strong> $290.0 million. Capital expenditures are <strong>of</strong>fset by $10.6 million in reserve funds set<br />
aside from previous years’ savings. Operating expenditures are anticipated to decrease $5.1 million, or<br />
1.9%, as compared to the revised budget for FY2011-12. General Fund revenues for FY2012-13, net <strong>of</strong><br />
reimbursements and transfers, are budgeted at $274.0 million, a decrease <strong>of</strong> $140.0 million or 33.8%<br />
from FY2011-12 actual revenues.<br />
The FY2011-13 Budget reflects self-supporting funds in generally sound financial condition. The Water<br />
and Wastewater Funds remain healthy following multi-year rate increases approved by Council in<br />
FY2008-09. To avoid a future year deficit in the Solid Waste Fund, the <strong>City</strong> has employed a consultant<br />
to conduct a rate analysis and has decided not to undertake capital expenditures associated with a waste<br />
disposal partnership entered with the Allan Company and Southern California Disposal and instead will<br />
viii
develop a new material processing plan along with Southern California Disposal to achieve effective<br />
and efficient waste diversion. Big Blue Bus Fund remains balanced in the short term even though State<br />
Transit Assistance funds were cut as the State addressed its financial crisis. Over the long term,<br />
corrective action is needed. It is anticipated that beginning in FY2014-15, the Pier Fund will require a<br />
total General Fund subsidy <strong>of</strong> approximately $0.8 million through FY2017-18, if it undertakes planned<br />
infrastructure improvement projects. Finally, the Civic Auditorium Fund, which was expected to require<br />
approximately $2.0 million in General Fund subsidy in future years, is pending a decision on whether<br />
the Civic Auditorium will cease or significantly reduce operations in FY 2013-14. The <strong>City</strong> Council<br />
will be deliberating on this issue in January 2013.<br />
Major Projects<br />
The planned Expo Light Rail Phase 2 project between Culver <strong>City</strong> & <strong>Santa</strong> <strong>Monica</strong> is a significant<br />
transit alternative that will connect to the regional rail system and provide new transit options for <strong>Santa</strong><br />
<strong>Monica</strong> residents, employees, and visitors. The project will provide relief for the tremendous and<br />
growing congestion on the I-10/<strong>Santa</strong> <strong>Monica</strong> Freeway, one <strong>of</strong> the busiest travel corridors in the country.<br />
<strong>City</strong> staff is currently working to ensure rail line and stations are integrated into streets, neighborhoods<br />
and districts, provide high-quality service, and connect to major destinations. Phase 2 construction<br />
began in 2012 and service is anticipated to commence in 2016.<br />
The Palisades Garden Walk and Ken Genser Square will create seven acres <strong>of</strong> park space bounded by<br />
Interstate 10 and Olympic Drive, <strong>City</strong> Hall and Ocean Avenue. Envisioned as a central component <strong>of</strong><br />
the Civic Center Specific Plan, these new parks will provide a critical link between the Civic Center,<br />
Palisades Park, the Pier and downtown. In FY2009-10, following a competitive process, the <strong>City</strong><br />
Council selected James Corner Field Operations and placed them under contract to design the parks.<br />
Council selected O’Neill Construction to provide construction services on the two parks, which is<br />
anticipated to be completed in 2013.<br />
The Pico Library, slated to be an 8,300 square foot neighborhood library, will be built in the Pico<br />
neighborhood at Virginia Avenue Park, on the corner <strong>of</strong> Cloverfield and Pico Boulevards. The library<br />
will enhance existing park amenities, including the weekly Farmers Market, Community Center, Teen<br />
Center, and Park Center Building. Staff issued a Request for Proposals for the design <strong>of</strong> the new library<br />
in September 2009 and executed a contract with Koning Eizenberg Architecture in June 2010. An<br />
updated site survey and a geotechnical report were both started in spring <strong>of</strong> 2010. Four community<br />
workshops were held in late 2010 to gather input on the new branch library. Construction <strong>of</strong> the library<br />
began in August 2012 and will be completed in early 2014.<br />
The Downtown Parking Program, approved by Council in February 2006, called for Parking Structure 6<br />
to be demolished and rebuilt in the same location at 1431 2nd Street with more than double its current<br />
342 spaces. Parking Structure 6 has been demolished and is scheduled to be completed in 2013. The<br />
new structure will have three subterranean and eight above-ground parking levels. The design includes<br />
space for up to 90 bicycles in racks and 19 motorcycles, and approximately 7,000 square feet <strong>of</strong> retail<br />
space fronting on 2nd Street. The overall design <strong>of</strong> this structure would be unique in that the pedestrian<br />
experience continues up along the entire building face, where patrons would ascend and descend on an<br />
exterior diagonal stair that weaves in and out <strong>of</strong> the plane <strong>of</strong> the façade. This increases public safety by<br />
its high visibility and <strong>of</strong>fers patrons unique ocean views.<br />
The Village <strong>Santa</strong> <strong>Monica</strong> is a mixed-income, mixed-use community that will be developed in the heart<br />
<strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>’s Civic Center revitalization area. This unique public/private partnership leverages<br />
<strong>City</strong>-owned land to provide for important public benefits. The 3.7 acre site will enhance the Civic<br />
Center area with 160 affordable rental residences, up to 164 market-rate condominium residences, a<br />
pedestrian-oriented “Living Street” with arts, retail and restaurant activities, public open space, public<br />
ix
art and an extension <strong>of</strong> Olympic Drive. Environmentally sustainable features include LEED Silver<br />
Certified design, alternative energy programs, bicycle stalls, shared parking and financial contributions<br />
to the <strong>City</strong>’s transit programs. Community space for residents will include a computer lab, family<br />
garden, barbeque area and outdoor and indoor children’s play areas. Preliminary work on the site began<br />
in late 2011. Overall project construction is anticipated to last approximately 24 months.<br />
Long-Term Financial Planning. The <strong>City</strong> is dedicated to financial planning in all areas <strong>of</strong> the<br />
organization. Financial planning takes the form <strong>of</strong> continuous review and refinement <strong>of</strong> fiscal policies,<br />
development <strong>of</strong> five-year forecasts, and an understanding <strong>of</strong> the initiatives being undertaken by the<br />
entire organization.<br />
AWARDS<br />
The Government Finance Officers Association <strong>of</strong> the United States and Canada (GFOA) awarded a<br />
Certificate <strong>of</strong> Achievement for Excellence in Financial Reporting to the <strong>City</strong> for its CAFR for the fiscal<br />
year ended June 30, 2011. The Certificate <strong>of</strong> Achievement is a prestigious national award, recognizing<br />
conformance with the highest standards for preparation <strong>of</strong> State and local government financial reports.<br />
In order to be awarded a Certificate <strong>of</strong> Achievement, a government unit must publish an easily readable<br />
and efficiently organized CAFR whose contents conform to program standards. This report must satisfy<br />
both generally accepted accounting principles and applicable legal requirements.<br />
A Certificate <strong>of</strong> Achievement is valid for a period <strong>of</strong> one year only. The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> has<br />
received a Certificate <strong>of</strong> Achievement for each <strong>of</strong> the last twenty-eight years. We believe our current<br />
CAFR also conforms to the Certificate <strong>of</strong> Achievement program requirements.<br />
In keeping with past practice, a copy <strong>of</strong> this CAFR will be placed on file in the <strong>City</strong> libraries and sent to<br />
<strong>City</strong> management personnel, bond rating agencies, and other agencies which have expressed an interest<br />
in the financial affairs <strong>of</strong> the <strong>City</strong>. It is also available at www.smgov.net/finance.<br />
ACKNOWLEDGEMENTS<br />
The preparation and development <strong>of</strong> this report would not have been possible without the year-round<br />
work <strong>of</strong> the Finance Department staff and their special efforts, working in conjunction with the <strong>City</strong>’s<br />
independent auditors, to produce this report.<br />
I would like to take this opportunity to compliment and thank the staff members <strong>of</strong> the <strong>City</strong> who were<br />
associated with the preparation <strong>of</strong> this report. I would also like to thank the <strong>City</strong> Council for their<br />
continued interest and support in planning and conducting the financial operations <strong>of</strong> the <strong>City</strong> in a<br />
responsible and progressive manner.<br />
Respectfully submitted,<br />
Gigi Decavalles-Hughes<br />
Director <strong>of</strong> Finance/<strong>City</strong> Treasurer<br />
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OFFICIALS OF THE CITY OF SANTA MONICA<br />
As <strong>of</strong> February 25, 2013<br />
<strong>City</strong> Council<br />
Pam O’Connor, Mayor<br />
Terry O’Day, Mayor Pro Tempore<br />
Gleam Davis<br />
Bob Holbrook<br />
Kevin McKeown<br />
Ted Winterer<br />
Tony Vazquez<br />
Administration and Department Heads<br />
<strong>City</strong> Manager<br />
Assistant <strong>City</strong> Manager<br />
Deputy <strong>City</strong> Manager for Special Projects<br />
<strong>City</strong> Attorney<br />
<strong>City</strong> Clerk (Director <strong>of</strong> Records and Election Services)<br />
Director <strong>of</strong> Finance/<strong>City</strong> Treasurer<br />
Director <strong>of</strong> Human Resources<br />
Chief Information Officer<br />
Chief <strong>of</strong> Police<br />
Fire Chief<br />
Director <strong>of</strong> Planning and Community Development<br />
<strong>City</strong> Librarian<br />
Director <strong>of</strong> Community and Cultural Services<br />
Director <strong>of</strong> Transit Services<br />
Director <strong>of</strong> Housing and Economic Development<br />
Director <strong>of</strong> Public Works<br />
Rod Gould<br />
Elaine Polachek<br />
Kathryn Vernez<br />
Marsha Jones Moutrie<br />
Sarah Gorman<br />
Gigi Decavalles-Hughes<br />
Donna Peter<br />
Jory Wolf<br />
Jacqueline Seabrooks<br />
Scott Ferguson<br />
David Martin<br />
Gregory T. Mullen<br />
Karen Ginsberg<br />
Edward F. King<br />
Andy Agle<br />
Martin Pastucha<br />
xi
ORGANIZATION OF THE<br />
CITY OF SANTA MONICA<br />
as <strong>of</strong> February 25, 2013<br />
CITIZENS<br />
CITY COUNCIL<br />
Records & Election Services<br />
Sarah Gorman<br />
<strong>City</strong> Manager<br />
Rod Gould<br />
<strong>City</strong> Attorney<br />
Marsha Jones Moutrie<br />
Assistant <strong>City</strong> Manager<br />
Elaine Polachek<br />
Deputy <strong>City</strong> Manager for<br />
Special Projects<br />
Kathryn Vernez<br />
Fire<br />
Scott Ferguson<br />
Police<br />
Jacqueline Seabrooks<br />
Community & Cultural<br />
Services<br />
Karen Ginsberg<br />
Big Blue Bus<br />
Edward F. King<br />
Library<br />
Gregory T. Mullen<br />
Finance<br />
Gigi Decavalles-Hughes<br />
Housing & Economic<br />
Development<br />
Andy Agle<br />
Planning & Community<br />
Development<br />
David Martin<br />
Human Resources<br />
Donna Peter<br />
Information Systems<br />
Jory Wolf<br />
Public Works<br />
Martin Pastucha<br />
xii
xiii
THIS PAGE INTENTIONALLY LEFT BLANK<br />
xiv
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California<br />
Year Ended June 30, 2012<br />
FINANCIAL SECTION
LA/Century <strong>City</strong><br />
2029 Century Park East, Suite 500<br />
Los Angeles, CA 90067<br />
310.277.3373<br />
Sacramento<br />
The Honorable <strong>City</strong> Council<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California:<br />
Independent Auditor’s Report<br />
Walnut Creek<br />
Oakland<br />
Newport Beach<br />
We have audited the accompanying financial statements <strong>of</strong> the governmental activities, the business-type<br />
activities, each major fund and the aggregate remaining fund information <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>,<br />
California (<strong>City</strong>), as <strong>of</strong> and for the fiscal year ended June 30, 2012, which collectively comprise the <strong>City</strong>’s<br />
basic financial statements as listed in the table <strong>of</strong> contents. These financial statements are the<br />
responsibility <strong>of</strong> the <strong>City</strong>’s management. Our responsibility is to express opinions on these financial<br />
statements based on our audit.<br />
San Diego<br />
Seattle<br />
www.mgocpa.com<br />
We conducted our audit in accordance with auditing standards generally accepted in the United States <strong>of</strong><br />
America and the standards applicable to financial audits contained in Government Auditing Standards,<br />
issued by the Comptroller General <strong>of</strong> the United States. Those standards require that we plan and perform<br />
the audit to obtain reasonable assurance about whether the financial statements are free <strong>of</strong> material<br />
misstatement. An audit includes consideration <strong>of</strong> internal control over financial reporting as a basis for<br />
designing audit procedures that are appropriate in the circumstances, but not for the purpose <strong>of</strong> expressing<br />
an opinion on the effectiveness <strong>of</strong> the <strong>City</strong>’s internal control over financial reporting. Accordingly, we<br />
express no such opinion. An audit also includes examining, on a test basis, evidence supporting the<br />
amounts and disclosures in the financial statements, assessing the accounting principles used and the<br />
significant estimates made by management, as well as evaluating the overall financial statement<br />
presentation. We believe that our audit provides a reasonable basis for our opinions.<br />
In our opinion, the financial statements referred to previously present fairly, in all material respects, the<br />
respective financial position <strong>of</strong> the governmental activities, the business-type activities, each major fund,<br />
and the aggregate remaining fund information <strong>of</strong> the <strong>City</strong> as <strong>of</strong> June 30, 2012, and the respective changes<br />
in financial position and cash flows, where applicable, there<strong>of</strong> and the respective budgetary comparison<br />
for the General Fund for the fiscal year then ended in conformity with accounting principles generally<br />
accepted in the United States <strong>of</strong> America.<br />
As discussed in Note 1(A) to the basic financial statements, the California State Legislature enacted<br />
legislation that dissolved redevelopment agencies in the State <strong>of</strong> California as <strong>of</strong> February 1, 2012. On<br />
February 1, 2012, the <strong>City</strong>, as the Successor Agency to the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong> (Successor Agency), became responsible for overseeing the dissolution and the wind down <strong>of</strong><br />
redevelopment activities.<br />
As discussed in Note 17 to the basic financial statements, on June 14, 2012, Moody’s downgraded all<br />
California redevelopment Tax Allocation Bonds (TABS) within the State, including the <strong>City</strong> <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong> Redevelopment Agency’s (Former Agency) Earthquake Project Redevelopment Bonds Series<br />
2006 rating, which triggered an event <strong>of</strong> default in two <strong>of</strong> the Former Agency’s loans, making them<br />
subject to call. The loans have an outstanding balance <strong>of</strong> $105.7 million at June 30, 2012, and are<br />
reported as a current liability. Consequently, the lender on one <strong>of</strong> the loans has agreed to forbear on<br />
exercising default remedies at least through April 2013, at which time the status <strong>of</strong> this loan will be<br />
evaluated for continuing forbearance as long as the downgrade remains in effect on the Former Agency’s<br />
TABS. The lender on the other loan has taken no action.<br />
As discussed in Note 18 to the basic financial statements, on December 15, 2012, the State <strong>of</strong> California<br />
Department <strong>of</strong> Finance (DOF) issued its determination regarding the housing Due Diligence Review<br />
required under redevelopment dissolution law and disallowed $54.5 million <strong>of</strong> cash transfers and $17.9<br />
million <strong>of</strong> capital asset transfers from the Former Agency to the <strong>City</strong>. The Successor Agency does not
agree with the entire amount included in DOF’s determination, however the Successor Agency made a<br />
payment <strong>of</strong> $12.5 million subsequent to June 30, 2012, which has been accrued in the basic financial<br />
statements. Due to the inherent uncertainties involved in the application <strong>of</strong> the redevelopment dissolution<br />
law, the ultimate outcome <strong>of</strong> this issue cannot presently be determined, accordingly, no provision for any<br />
liability that may result has been recorded in the basic financial statements.<br />
In accordance with Government Auditing Standards, we have also issued our report dated February 25,<br />
2013 on our consideration <strong>of</strong> the <strong>City</strong>’s internal control over financial reporting and on our tests <strong>of</strong> its<br />
compliance with certain provisions <strong>of</strong> laws, regulations, contracts, grant agreements and other matters.<br />
The purpose <strong>of</strong> that report is to describe the scope <strong>of</strong> our testing <strong>of</strong> internal control over financial<br />
reporting and compliance and the results <strong>of</strong> that testing, and not to provide an opinion on the internal<br />
control over financial reporting or on compliance. That report is an integral part <strong>of</strong> an audit performed in<br />
accordance with Government Auditing Standards and should be considered in assessing the results <strong>of</strong> our<br />
audit.<br />
Accounting principles generally accepted in the United States <strong>of</strong> America require that the management’s<br />
discussion and analysis on pages 3 to 21 and the schedules <strong>of</strong> funding progress on pages 93 and 96 be<br />
presented to supplement the basic financial statements. Such information, although not a part <strong>of</strong> the basic<br />
financial statements, is required by the Governmental Accounting Standards Board who considers it to be<br />
an essential part <strong>of</strong> financial reporting for placing the basic financial statements in an appropriate<br />
operational, economic, or historical context. We have applied certain limited procedures to the required<br />
supplementary information in accordance with auditing standards generally accepted in the United States<br />
<strong>of</strong> America, which consisted <strong>of</strong> inquiries <strong>of</strong> management about the methods <strong>of</strong> preparing the information<br />
and comparing the information for consistency with management’s responses to our inquiries, the basic<br />
financial statements, and other knowledge we obtained during our audit <strong>of</strong> the basic financial statements.<br />
We do not express an opinion or provide any assurance on the information because the limited procedures<br />
do not provide us with sufficient evidence to express an opinion or provide any assurance.<br />
Our audit was conducted for the purpose <strong>of</strong> forming opinions on the financial statements that collectively<br />
comprise the <strong>City</strong>’s basic financial statements. The combining and individual fund statements and<br />
schedules are presented for purposes <strong>of</strong> additional analysis and are not a required part <strong>of</strong> the basic<br />
financial statements. Such information is the responsibility <strong>of</strong> management and was derived from and<br />
relates directly to the underlying accounting and other records used to prepare the financial statements.<br />
The information has been subjected to the auditing procedures applied in the audit <strong>of</strong> the basic financial<br />
statements and certain additional procedures, including comparing and reconciling such information<br />
directly to the underlying accounting and other records used to prepare the financial statements or to the<br />
financial statements themselves, and other additional procedures in accordance with auditing standards<br />
generally accepted in the United States <strong>of</strong> America. In our opinion, the information is fairly stated in all<br />
material respects in relation to the basic financial statements as a whole.<br />
Our audit was conducted for the purpose <strong>of</strong> forming opinions on the financial statements that collectively<br />
comprise the <strong>City</strong>’s basic financial statements. The introductory and statistical sections are presented for<br />
purposes <strong>of</strong> additional analysis and are not a required part <strong>of</strong> the basic financial statements. Such<br />
information has not been subjected to the auditing procedures applied in the audit <strong>of</strong> the basic financial<br />
statements, and accordingly, we do not express an opinion or provide any assurance on it.<br />
Los Angeles, California<br />
February 25, 2013<br />
2
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
As management <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California (<strong>City</strong>), we <strong>of</strong>fer readers <strong>of</strong> the <strong>City</strong>’s<br />
Comprehensive Annual Financial Report (CAFR) this narrative overview and analysis <strong>of</strong> the financial<br />
activities <strong>of</strong> the <strong>City</strong> for the fiscal year ended June 30, 2012. We encourage readers to consider the<br />
information presented here in conjunction with additional information that we have furnished in the<br />
<strong>City</strong>’s basic financial statements, which immediately follow this section, and the CAFR transmittal<br />
letter in the preceding Introductory Section.<br />
FINANCIAL HIGHLIGHTS<br />
• The total assets <strong>of</strong> the <strong>City</strong> for its governmental and business-type activities exceeded its<br />
liabilities as <strong>of</strong> June 30, 2012 by $1.8 billion. Of this amount, $1.2 billion is capital assets, net<br />
<strong>of</strong> related debt, $188.0 million is for restricted uses as specified by entities outside <strong>of</strong> the <strong>City</strong><br />
government, and $483.9 million is for unrestricted uses in accordance with finance-related legal<br />
requirements reflected in the <strong>City</strong>’s fund structure.<br />
• The <strong>City</strong>’s total net assets increased $256.5 million during the current fiscal year due to an<br />
increase in governmental activities net assets <strong>of</strong> $246.5 million and an increase in business-type<br />
activities net assets <strong>of</strong> $10.0 million. The increase in governmental activities net assets was<br />
primarily due to an extraordinary gain <strong>of</strong> $261.3 million related to the transfer <strong>of</strong> the net deficit<br />
from the former Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (Former Agency) to the<br />
<strong>Santa</strong> <strong>Monica</strong> Redevelopment Successor Agency (Successor Agency) upon dissolution <strong>of</strong> the<br />
Former Agency.<br />
• At the end <strong>of</strong> the current fiscal year, the <strong>City</strong>’s governmental funds reported total ending fund<br />
balances <strong>of</strong> $596.5 million, an increase <strong>of</strong> $11.1 million compared with the prior fiscal year.<br />
This increase in fund balance is primarily due to: $67.0 million in revenue recognized by the<br />
<strong>City</strong> related to a cooperation agreement between the <strong>City</strong> and the Former Agency, proceeds <strong>of</strong><br />
issuance <strong>of</strong> bonds <strong>of</strong> $32.2 million, and pollution remediation settlement income <strong>of</strong> $33.3<br />
million. Additionally, governmental funds recognized a net extraordinary gain <strong>of</strong> $13.7 million<br />
related to the dissolution and transfer <strong>of</strong> assets and liabilities <strong>of</strong> the Former Agency to the<br />
Successor Agency. This is <strong>of</strong>fset by capital project expenditures for projects related to a<br />
cooperation agreement between the Former Agency and the <strong>City</strong> <strong>of</strong> $52.4 million plus other<br />
governmental funds project expenditures <strong>of</strong> $48.0 million and capital expenditures <strong>of</strong> $67.0<br />
million related to a cooperation agreement between the Former Agency and the <strong>City</strong>.<br />
• At the end <strong>of</strong> the current fiscal year, the General Fund fund balance was $416.3 million, an<br />
increase <strong>of</strong> $121.0 million from the previous fiscal year. Restricted, assigned and unassigned<br />
General Fund fund balances all increased by $42.6, $73.7 and $8.8 million, respectively. This<br />
was <strong>of</strong>fset by a decrease in nonspendable General Fund fund balance <strong>of</strong> $4.1 million. Restricted<br />
General Fund fund balance increased primarily due to $32.2 million in new bond proceeds<br />
issued for the construction <strong>of</strong> Parking Structure 6. Assigned General Fund fund balance<br />
increased due to increased housing, community and economic development project assignments<br />
and $29.2 million in revenue recognized from pollution remediation settlements. Unassigned<br />
General Fund fund balance increased primarily due to the General Fund’s overall net increase in<br />
revenues over expenditures.<br />
• The <strong>City</strong>’s capital assets increased by $37.2 million or 3.1%. Please see the table on page 17<br />
and for further detail <strong>of</strong> capital assets in note 7.<br />
3
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
• The <strong>City</strong>’s long-term debt decreased by $237.6 million or 66.1% during the current fiscal year.<br />
Please see the table on page 19 and for further detail <strong>of</strong> long-term debt see note 9.<br />
OVERVIEW OF THE BASIC FINANCIAL STATEMENTS<br />
This discussion and analysis is intended to serve as an introduction to the <strong>City</strong>’s basic financial<br />
statements. The <strong>City</strong>’s basic financial statements include three components: government-wide<br />
financial statements, fund financial statements, and notes to the basic financial statements.<br />
Government-wide financial statements. The government-wide financial statements are designed to<br />
provide readers with a broad overview <strong>of</strong> the <strong>City</strong>’s finances, in a manner similar to statements <strong>of</strong> a<br />
private-sector business.<br />
The statement <strong>of</strong> net assets presents information on all <strong>of</strong> the <strong>City</strong>’s assets and liabilities, with the<br />
difference between the two reported as net assets. Over time, increases or decreases in net assets may<br />
serve as a useful indicator <strong>of</strong> whether the financial position <strong>of</strong> the <strong>City</strong> is improving or deteriorating.<br />
The statement <strong>of</strong> activities presents information showing how the <strong>City</strong>’s net assets changed during the<br />
most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving<br />
rise to the change occurs, regardless <strong>of</strong> the timing <strong>of</strong> related cash flows. Thus, revenues and expenses<br />
are reported in this statement for some items that will result in cash flows in future fiscal periods.<br />
The government-wide financial statements distinguish functions <strong>of</strong> the <strong>City</strong> that are principally<br />
supported by taxes and intergovernmental revenues (governmental activities) from other functions that<br />
are intended to recover all or a significant portion <strong>of</strong> their costs through user fees and charges<br />
(business-type activities). The governmental activities <strong>of</strong> the <strong>City</strong> include public safety (police and<br />
fire), streets, library, cultural and recreation, parks, planning and zoning, housing and community<br />
development, and general administrative support. The business-type activities <strong>of</strong> the <strong>City</strong> include<br />
water, wastewater, stormwater, resource recovery and recycling, pier, civic auditorium, airport,<br />
cemetery, municipal transit and parking structures and lots.<br />
Component units are included in the basic financial statements and consist <strong>of</strong> legally separate entities<br />
for which the <strong>City</strong> is financially accountable and that have either the same governing board as the <strong>City</strong><br />
or a governing board appointed by the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> <strong>City</strong> Council. The blended component<br />
units include the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, the Parking Authority <strong>of</strong> the<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, and the Housing Authority <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. The Redevelopment<br />
Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (Former Agency) was dissolved on February 1, 2012 and its nonhousing<br />
assets were transferred to the <strong>Santa</strong> <strong>Monica</strong> Redevelopment Successor Agency. The basic<br />
financial statements include seven months <strong>of</strong> activity <strong>of</strong> the Former Agency as part <strong>of</strong> governmental<br />
activities.<br />
The <strong>Santa</strong> <strong>Monica</strong> Redevelopment Successor Agency (Successor Agency) is a separate legal entity,<br />
which was formed to hold the assets <strong>of</strong> the former redevelopment agency pursuant to <strong>City</strong> Council<br />
actions taken on January 10, 2012 and February 14, 2012. The activities <strong>of</strong> the Successor Agency are<br />
reported in a private-purpose trust fund, and overseen by an Oversight Board comprised <strong>of</strong> individuals<br />
appointed by various government agencies and the <strong>Santa</strong> <strong>Monica</strong> Redevelopment Successor Agency.<br />
The government-wide financial statements can be found on pages 23 and 24 <strong>of</strong> this report.<br />
4
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
Fund financial statements. A fund is a grouping <strong>of</strong> related accounts that is used to maintain control<br />
over resources that have been segregated for specific activities or objectives. The <strong>City</strong>, like other state<br />
and local governments, uses fund accounting to ensure and demonstrate compliance with financerelated<br />
legal requirements. All the funds <strong>of</strong> the <strong>City</strong> can be divided into three categories:<br />
governmental funds, proprietary funds, and fiduciary funds.<br />
Governmental funds. Governmental funds are used to account for essentially the same functions<br />
reported as governmental activities in the government-wide financial statements. However, unlike the<br />
governmental-wide financial statements, governmental fund financial statements focus on near-term<br />
inflows and outflows <strong>of</strong> spendable resources, as well as on balances <strong>of</strong> spendable resources available<br />
at the end <strong>of</strong> the fiscal year. Such information may be useful in evaluating the <strong>City</strong>’s near-term<br />
financing requirements.<br />
Because the focus <strong>of</strong> governmental funds is narrower than that <strong>of</strong> the government-wide financial<br />
statements, it is useful to compare the information presented for governmental funds with similar<br />
information presented for governmental activities in the government-wide financial statements. By<br />
doing so, readers may better understand the long-term impact <strong>of</strong> the <strong>City</strong>’s near-term financing<br />
decisions. Both the governmental funds balance sheet and the governmental funds statement <strong>of</strong><br />
revenues, expenditures, and changes in fund balances are accompanied by a reconciliation to the<br />
government-wide financial statements in order to facilitate this comparison between governmental<br />
funds and governmental activities.<br />
The <strong>City</strong> maintains 24 individual governmental funds for financial reporting purposes. Information is<br />
presented separately in the governmental funds balance sheet and in the governmental funds statement<br />
<strong>of</strong> revenues, expenditures, and changes in fund balances for the General, Special Revenue Source, and<br />
Earthquake Recovery Redevelopment Project funds, which are considered to be major funds. Data for<br />
the other 21 governmental funds are combined into a single, aggregated presentation. Individual fund<br />
data for each <strong>of</strong> these nonmajor governmental funds is provided in the nonmajor funds supplementary<br />
section <strong>of</strong> this report.<br />
The <strong>City</strong> Council adopts an annual appropriated budget for its General Fund and 17 capital project<br />
funds (no budget is adopted for the Rent Control Fund and Asset Seizure Fund). The <strong>City</strong> Council<br />
does not adopt budgets for the two permanent funds or the two debt service funds. A budgetary<br />
comparison statement has been provided for the General Fund in the basic financial statements.<br />
The governmental funds financial statements can be found on pages 26 through 31 <strong>of</strong> this report.<br />
Proprietary funds. Proprietary funds provide the same type <strong>of</strong> information as the government-wide<br />
financial statements, but in more detail. The proprietary fund financial statements provide separate<br />
information for resource recovery and recycling, wastewater, airport and bus operations, which are<br />
considered to be major funds <strong>of</strong> the <strong>City</strong>. The <strong>City</strong> maintains two different types <strong>of</strong> proprietary funds.<br />
Enterprise funds are used to report the same functions presented as business-type activities in the<br />
government-wide financial statements. Internal service funds are an accounting device used to<br />
accumulate and allocate costs internally among the <strong>City</strong>’s various functions. The <strong>City</strong> uses internal<br />
service funds to account for its vehicle operations, risk management program and information<br />
technology and communications operations. The vehicle operations and insurance services for bus<br />
operations primarily benefit business-type activities and are included within business-type activities in<br />
the government-wide financial statements. All other risk management functions, information<br />
technology and communication services primarily benefit governmental funds and are included within<br />
5
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
governmental activities in the government-wide financial statements. Individual fund data for the<br />
internal service funds is provided in the supplementary information section <strong>of</strong> this report.<br />
The proprietary funds financial statements can be found at pages 34 through 37 <strong>of</strong> this report.<br />
Fiduciary funds. Fiduciary funds consist <strong>of</strong> a private-purpose trust fund and agency funds. A privatepurpose<br />
trust fund was created on February 1, 2012 and is used to pay enforceable obligations <strong>of</strong> the<br />
Former Agency. Agency funds are used to account for resources held for the benefit <strong>of</strong> parties outside<br />
<strong>of</strong> the <strong>City</strong>. The fiduciary funds are not included in the government-wide financial statements because<br />
the resources are not available to support the <strong>City</strong>’s operations.<br />
The fiduciary funds financial statements can be found on pages 40 through 41 <strong>of</strong> this report.<br />
Notes to the basic financial statements. The notes to the basic financial statements provide<br />
additional information that is essential to a full understanding <strong>of</strong> the data provided in the governmentwide<br />
and fund financial statements. The notes to the basic financial statements begin on page 43 <strong>of</strong><br />
this report.<br />
GOVERNMENT-WIDE FINANCIAL ANALYSIS<br />
As noted earlier, net assets may serve over time as a useful indicator <strong>of</strong> a government’s financial<br />
position. In the case <strong>of</strong> the <strong>City</strong>, assets exceeded liabilities by $1.8 billion at the close <strong>of</strong> the current<br />
fiscal year.<br />
As shown below, the largest portion <strong>of</strong> the <strong>City</strong>’s net assets, $1.2 billion or 63.2%, reflects the <strong>City</strong>’s<br />
investment in capital assets less any related outstanding debt used to acquire those assets. The <strong>City</strong><br />
uses these capital assets to provide services to citizens; consequently, these assets are not available for<br />
future spending. Although the <strong>City</strong>’s investment in its capital assets is reported net <strong>of</strong> related debt, it<br />
should be noted that resources needed to repay this debt must be provided from other sources, since<br />
the capital assets themselves cannot be used to liquidate liabilities.<br />
An additional portion <strong>of</strong> the <strong>City</strong>’s net assets, $188.0 million or 10.3%, represents resources that are<br />
subject to external restrictions on how they may be used. The remaining balance <strong>of</strong> unrestricted net<br />
assets, $483.9 million or 26.5%, may be used to meet the <strong>City</strong>’s ongoing obligations to citizens and<br />
creditors.<br />
At the end <strong>of</strong> the current fiscal year, the <strong>City</strong> reports positive balances in all three categories <strong>of</strong> net<br />
assets, both for the government as a whole, as well as for its separate governmental and business-type<br />
activities. The same situation held true for the prior fiscal year.<br />
6
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
A summary <strong>of</strong> the government-wide statement <strong>of</strong> net assets follows:<br />
CITY OF SANTA MONICA<br />
Net Assets<br />
(in millions)<br />
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11<br />
Current and other assets $ 867.9 756.6 146.8 139.6 1,014.7 896.2<br />
Capital assets 771.3 738.1 469.6 465.6 1,240.9 1,203.7<br />
Total assets 1,639.2 1,494.7 616.4 605.2 2,255.6 2,099.9<br />
Current and other liabilities 99.9 78.5 20.2 17.2 120.1 95.7<br />
Long-term liabilities 279.4 402.8 27.6 29.4 307.0 432.2<br />
Total liabilities 379.3 481.3 47.8 46.6 427.1 527.9<br />
Net assets:<br />
Invested in capital assets,<br />
Governmental activities Business-type activities Total<br />
net <strong>of</strong> related debt 708.6 565.4 448.0 442.3 1,156.6 1,007.7<br />
Restricted 172.0 199.0 16.0 13.5 188.0 212.5<br />
Unrestricted 379.3 249.0 104.6 102.8 483.9 351.8<br />
Total net assets $ 1,259.9 1,013.4 568.6 558.6 1,828.5 1,572.0<br />
Current and other assets increased $118.5 million or 13.2% for the current year. This increase is due to<br />
cash received from the sale <strong>of</strong> $32.2 million in <strong>Santa</strong> <strong>Monica</strong> Public Finance Authority Lease Revenue<br />
bonds as well as $75.1 million and $19.3 million in increased accounts and notes receivable,<br />
respectively. Accounts receivable increased due to recording <strong>of</strong> a pollution settlement. Notes<br />
receivable increased primarily due projects at 2802 Pico Boulevard and the Civic Center Village.<br />
These increases in current assets were <strong>of</strong>fset by a decrease in restricted cash with fiscal agent <strong>of</strong> $16.2<br />
million, primarily due to the dissolution and subsequent transfer <strong>of</strong> the Former Agency restricted cash<br />
and investment balances to the Successor Agency. Current and other liabilities increased $21.4 million<br />
or 27.1%. This is primarily due to an increase in Due to Successor Agency <strong>of</strong> $36.8 million, a new<br />
line item this fiscal year, and a decrease in Due to Other Governments <strong>of</strong> $12.2 million. These<br />
amounts are related to pass-thru liabilities <strong>of</strong> the Former Agency. Long-term liabilities decreased<br />
$125.2 million or 29.0% from the prior year. This decrease is due to the transfer <strong>of</strong> $249.0 million in<br />
loans, bonds and notes payable from the Former Agency to the Successor Agency <strong>of</strong>fset by an<br />
increase in long-term pollution remediation obligation <strong>of</strong> $100.1 million and increases in accrued other<br />
postemployment benefits liability, and long- and short-term claims payable.<br />
7
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
A summary <strong>of</strong> the government-wide statement <strong>of</strong> changes in net assets follows:<br />
CITY OF SANTA MONICA<br />
Changes in Net Assets<br />
(in millions)<br />
Governmental activities Business-type activities Total<br />
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11<br />
Revenues<br />
Program revenues:<br />
Charges for services $ 106.0 94.5 93.1 86.8 199.1 181.3<br />
Operating grants and contributions 26.7 29.1 38.4 36.0 65.1 65.1<br />
Capital grants and contributions 3.4 4.0 25.6 32.0 29.0 36.0<br />
General revenues:<br />
Sales and use taxes 45.8 31.7 — — 45.8 31.7<br />
Property taxes 59.2 109.0 — — 59.2 109.0<br />
Other taxes 112.2 106.9 — — 112.2 106.9<br />
Settlement income 3.8 — — — 3.8 —<br />
Investment earnings 5.8 8.0 1.1 1.4 6.9 9.4<br />
Other general revenues 120.2 12.2 5.3 6.7 125.5 18.9<br />
Total revenues 483.1 395.4 163.5 162.9 646.6 558.3<br />
Expenses<br />
General government 65.6 61.6 — — 65.6 61.6<br />
Public safety 108.2 99.9 — — 108.2 99.9<br />
General services 55.3 43.8 — — 55.3 43.8<br />
Cultural and recreation 62.2 57.2 — — 62.2 57.2<br />
Library 11.9 11.8 — — 11.9 11.8<br />
Housing and community<br />
development 182.0 89.3 — — 182.0 89.3<br />
Interest on long-term debt 6.6 10.4 — — 6.6 10.4<br />
Water — — 19.7 16.4 19.7 16.4<br />
Resource recovery and recycling — — 25.1 21.3 25.1 21.3<br />
Pier — — 5.8 5.3 5.8 5.3<br />
Wastewater — — 18.2 16.5 18.2 16.5<br />
Civic auditorium — — 3.2 3.6 3.2 3.6<br />
Airport — — 5.3 6.0 5.3 6.0<br />
Storm water management — — 0.4 0.4 0.4 0.4<br />
Cemetery — — 1.8 2.5 1.8 2.5<br />
Big Blue Bus — — 79.8 75.2 79.8 75.2<br />
Parking authority — — 0.3 0.5 0.3 0.5<br />
Total expenses 491.8 374.0 159.6 147.7 651.4 521.7<br />
Excess (deficiency) <strong>of</strong> revenues<br />
over expenses before transfers (8.7) 21.4 3.9 15.2 (4.8) 36.6<br />
Extraordinary gain 261.3 — — — 261.3 —<br />
Transfers (6.1) 1.5 6.1 (1.5) — —<br />
Increase in net assets 246.5 22.9 10.0 13.7 256.5 36.6<br />
Beginning net assets 1,013.4 990.5 558.6 544.9 1,572.0 1,535.4<br />
Ending net assets $ 1,259.9 1,013.4 568.6 558.6 1,828.5 1,572.0<br />
8
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
Governmental Activities. Governmental activities increased the <strong>City</strong>’s governmental activities net<br />
assets by $246.5 million, or 24.3%, for the current fiscal year. This increase in governmental activities<br />
net assets is due in part to an increase in total revenues <strong>of</strong> $87.7 million and an extraordinary gain <strong>of</strong><br />
$261.3 million, <strong>of</strong>fset by an increase in total expenses <strong>of</strong> $117.8 million.<br />
Revenue Sources: Governmental Activities. As shown in the chart below, the top five sources <strong>of</strong><br />
revenue account for 91% <strong>of</strong> total revenues. They are other general revenues at $120.2 million, other<br />
taxes at $112.2 million, charges for services at $106.0 million, property taxes at $59.2 million, and<br />
sales and use taxes <strong>of</strong> $45.8 million.<br />
Other taxes, $112.2 ,<br />
23%<br />
Sources <strong>of</strong> Revenue for Fiscal Year 2011-2012<br />
Governmental Activities<br />
Settlement income,<br />
$3.8 , 1%<br />
($ In Millions)<br />
Investment earnings,<br />
$5.8 , 1%<br />
Other general<br />
revenues, $120.2 ,<br />
25%<br />
Property tax, $59.2 ,<br />
12%<br />
Sales and use taxes,<br />
$45.8 , 9%<br />
Capital grants and<br />
contributions, $3.4 ,<br />
1%<br />
Operating grants and<br />
contributions, $26.7<br />
, 6%<br />
Charges for services,<br />
$106.0 , 22%<br />
Explanations <strong>of</strong> significant variances in key revenue sources from the prior year are explained below:<br />
1. Other general revenues increased by $108.0 million from the prior year primarily due to<br />
revenue recognized from payments received by the <strong>City</strong> from the Former Agency for<br />
continuing capital project obligations.<br />
2. Other taxes increased by $5.3 million from the prior year due to increased transient<br />
occupancy taxes <strong>of</strong> $3.4 million from increased tourism, increased real property transfer taxes<br />
<strong>of</strong> $1.3 million from an improved real estate market and increased property transfers, and<br />
increased business license taxes <strong>of</strong> $0.9 million from improving economic conditions during<br />
the fiscal year.<br />
9
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
3. Charges for services increased by $11.5 million from the prior year due to a $5.5 million<br />
increase in general government fees collected, a $2.6 million increase in cultural and<br />
recreation fees collected, and a $2.4 million increase in housing and community development<br />
fees collected during the fiscal year.<br />
4. Property taxes decreased by $49.8 million from the prior year, which reflects a decrease in<br />
tax increment revenues due to the dissolution <strong>of</strong> the Redevelopment Agency on February 1,<br />
2012.<br />
5. Sales Taxes increased by $14.1 from the prior year, which reflects the <strong>City</strong>’s first full year<br />
with Measure Y half-cent transaction tax revenues and well as increased taxable sales activity.<br />
Fifty percent <strong>of</strong> the Measure Y tax is paid to the <strong>Santa</strong> <strong>Monica</strong> Malibu Unified School<br />
District.<br />
Governmental activities net assets also increased because <strong>of</strong> an extraordinary gain <strong>of</strong> $261.3 million<br />
from the transfer <strong>of</strong> the net deficit from the Former Agency to the Successor Agency.<br />
Functional Expenses: Governmental Activities. As displayed in the chart below, housing and<br />
community development, general services, general government and public safety expenses accounted<br />
for 83% <strong>of</strong> total governmental activity-related expenses.<br />
Library, $11.9 , 3%<br />
Functional Expenses for Fiscal Year 2011-2012<br />
Governmental Activities<br />
($ In Millions)<br />
Housing and<br />
community<br />
development,<br />
$182.0 , 37% Interest on long-term<br />
debt, $6.6 , 1%<br />
Cultural and<br />
recreation, $62.2 ,<br />
13%<br />
General services,<br />
$55.3 , 11%<br />
General government,<br />
$65.6 , 13%<br />
Public safety, $108.2<br />
, 22%<br />
10
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
Explanations <strong>of</strong> significant variances in key <strong>City</strong> functions from the prior year are explained below:<br />
1. Housing and community development expenses increased $92.7 million due in part to<br />
recognition <strong>of</strong> $67.0 million in expenses related to a cooperation agreement between the <strong>City</strong><br />
and the Former Agency and significant capital outlays related to projects such as Palisades<br />
Garden Walk and Ken Genser Square, Colorado Esplanade, and parking meters and vehicle<br />
detection sensors.<br />
2. General services expenses increased by $11.5 million mainly due to significant contributions<br />
related to the Exposition Light Rail project.<br />
3. General government expenses increased by $4.0 million mainly due to operating expenses<br />
from the <strong>City</strong>’s new division, Office <strong>of</strong> Emergency Management; increased salary expenses<br />
due to salary step, cost <strong>of</strong> living adjustments and Memorandum <strong>of</strong> Understanding related<br />
salary increases; increases in medical and retirement costs; and increased city facilities<br />
maintenance expenses.<br />
4. Public safety expenses increased by $8.3 million due to salary step, cost <strong>of</strong> living adjustments<br />
and Memorandum <strong>of</strong> Understanding related salary increases; increases in medical and<br />
retirement costs; and the hiring <strong>of</strong> additional fire prevention <strong>of</strong>ficers during the fiscal year.<br />
Program Expenses: Governmental Activities. The following chart compares program revenues and<br />
expenses for governmental activities:<br />
Expenses and Program Revenues - Governmental Activities<br />
(In Thousands)<br />
200,000<br />
180,000<br />
160,000<br />
140,000<br />
120,000<br />
100,000<br />
80,000<br />
60,000<br />
40,000<br />
20,000<br />
-<br />
Expenses<br />
Revenues<br />
General government<br />
Public safety<br />
General services<br />
Cultural and recreation<br />
services<br />
Library<br />
Housing and community<br />
development<br />
Interest on long-term debt<br />
11
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
Business-type Activities. Business-type activities accounted for 4.5% <strong>of</strong> the total increase in the<br />
<strong>City</strong>’s net assets. The <strong>City</strong>’s business-type activities net assets increased by $10.0 million, or 1.8%,<br />
from the prior year.<br />
Revenue Sources: Business-type activities. As shown in the chart below, the top three sources <strong>of</strong><br />
revenue, charges for services, capital and operating grants and contributions, account for 96.0% <strong>of</strong><br />
total revenues. Key elements for growth in net assets and significant variances from prior year are as<br />
follows:<br />
1. Charges for services for the Water Fund increased by $2.4 million due to Council-approved<br />
water rate increases.<br />
2. Charges for services for the Wastewater Fund increased by $2.2 million due to Councilapproved<br />
sewer rate increases.<br />
3. Charges for services for the Pier Fund increased by $1.3 million due to increased rental and<br />
parking lot fees.<br />
4. Big Blue Bus realized an increase <strong>of</strong> $2.4 million in operating grants and contributions due<br />
primarily to an increase in State sales tax allocation.<br />
The below chart displays the key sources <strong>of</strong> revenue for business-type activities as a percentage <strong>of</strong><br />
total revenues:<br />
Sources <strong>of</strong> Revenue for Fiscal Year 2011-2012<br />
Business-type Activities<br />
($ In Millions)<br />
Capital grants and<br />
contributions, $25.6<br />
, 16%<br />
Investment earnings,<br />
$1.1 , 1%<br />
Other general<br />
revenues, $5.3 , 3%<br />
Operating grants and<br />
contributions, $38.4<br />
, 23%<br />
Charges for services,<br />
$93.1 , 57%<br />
12
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
Business-type Expenses: Business Activities. As displayed in the chart on the following page, the Big<br />
Blue Bus, Resource Recovery and Recycling, Water and Wastewater enterprise funds accounted for<br />
89% <strong>of</strong> total business-type activity expenses. Other business-type activities <strong>of</strong> the <strong>City</strong> include the<br />
Airport, Pier, Civic Auditorium, Cemetery and Mausoleum, Storm Water management, and Parking<br />
Authority funds.<br />
Expenses for Fiscal Year 2011-2012<br />
Business-type Activities<br />
($ in Millions)<br />
Resource recovery<br />
and recycling,<br />
$25.1, 16%<br />
Pier,<br />
$5.8 , 4%<br />
Wastewater,<br />
$18.2 , 11%<br />
Civic auditorium,<br />
$3.2 , 2%<br />
Airport,<br />
$5.3 , 3%<br />
Storm water<br />
management,<br />
$0.4 ,
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
4. An increase <strong>of</strong> $1.7 million in expenses for the wastewater enterprise fund reflects increased<br />
reimbursements to the <strong>City</strong> <strong>of</strong> Los Angeles for treatment <strong>of</strong> sewage and increased<br />
Amalgamated Sewerage System Facilities Charge payments.<br />
Program Expenses: Business-type Activities. The following chart compares program revenues and<br />
expenses for business-type activities:<br />
Expenses and Program Revenues - Business-type Activities<br />
(In Thousands)<br />
90,000<br />
80,000<br />
70,000<br />
60,000<br />
50,000<br />
40,000<br />
30,000<br />
20,000<br />
Expenses<br />
10,000<br />
Revenues<br />
-<br />
Water<br />
Solid waste management<br />
Pier<br />
Wastewater<br />
Civic auditorium<br />
Airport<br />
Storm water management<br />
Cemetery<br />
Big Blue Bus<br />
Parking authority<br />
FINANCIAL ANALYSIS OF THE CITY'S MAJOR FUNDS<br />
As noted earlier, the <strong>City</strong> uses fund accounting to demonstrate compliance with finance-related legal<br />
requirements.<br />
Governmental funds. The focus <strong>of</strong> the <strong>City</strong>’s governmental funds is to provide information on nearterm<br />
inflows, outflows, and balances <strong>of</strong> spendable resources. Such information is useful in assessing<br />
the <strong>City</strong>’s financial requirements.<br />
At the end <strong>of</strong> the current fiscal year, the <strong>City</strong>’s governmental funds reported total fund balances <strong>of</strong><br />
$596.5 million, an increase <strong>of</strong> $11.1 million, or 1.9% in comparison with the prior year.<br />
14
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
General Fund<br />
The General Fund is the chief operating fund <strong>of</strong> the <strong>City</strong>. At the end <strong>of</strong> the current fiscal year, the total<br />
fund balance was $416.3 million.<br />
The General Fund fund balance increased $121.0 million, or 41.0%, during the fiscal year ended June<br />
30, 2012. Key factors in changes in revenues and expenditures from the prior year are as follows:<br />
1. Revenues reflect a net increase <strong>of</strong> $168.5 million over the prior fiscal year primarily from<br />
increases in sales tax <strong>of</strong> $14.1 million, property taxes <strong>of</strong> $4.2 million, settlement income <strong>of</strong> $29.2<br />
million and other income <strong>of</strong> $110.8 million. The increase in other income is due to revenue<br />
recognized under the <strong>City</strong>’s Master Cooperation Agreement with the Former Agency. Total<br />
General Fund revenues were $434.8 million for the fiscal year 2012.<br />
2. Expenditures were $63.2 million greater than the prior fiscal year primarily due to increases in<br />
expenditures for general services <strong>of</strong> $35.6 million, or 126.1%, and housing and community<br />
development <strong>of</strong> $15.4 million, or 62.0%. The increase <strong>of</strong> $35.6 in general services was due mainly<br />
to an increase <strong>of</strong> capital expenditures related to various capital improvement projects such as the<br />
Exposition Light Rail Extension project (<strong>City</strong>’s contribution to the Los Angeles County<br />
Metropolitan Transportation Authority (MTA) project) and street and traffic signal repairs and<br />
improvements. The increase <strong>of</strong> $15.4 million in housing and community development<br />
expenditures was primarily due to increased capital expenditures for housing and economic<br />
development projects such as the Palisades Garden Walk and Ken Genser Square as well as<br />
various citywide housing acquisitions and rehabilitation projects. Total General Fund expenditures<br />
were $334.1 million for the fiscal year 2012.<br />
Special Revenue Source Fund<br />
The Special Revenue Source Fund fund balance decreased by $1.1 million from the prior year. An<br />
increase in general services expenditures <strong>of</strong> $4.6 million and housing and community development<br />
expenditures <strong>of</strong> $2.5 million was <strong>of</strong>fset by increases in settlement revenue and other revenue <strong>of</strong> $4.0<br />
million and $0.6 million, respectively.<br />
Earthquake Recovery Redevelopment Project Fund<br />
The Earthquake Recovery Redevelopment Project Fund fund balance decreased by $95.7 million over<br />
the previous year due to the dissolution <strong>of</strong> redevelopment. See Note 17.<br />
Nonmajor Governmental Funds<br />
All non-major governmental funds’ fund balance decreased $13.0 million, or 8.9%, from the previous<br />
fiscal year. This decrease is primarily due to a decrease in incremental property taxes <strong>of</strong> $13.4 million<br />
from the dissolution <strong>of</strong> the redevelopment agency and smaller decreases in intergovernmental<br />
revenues, various taxes, and investment income earned during the fiscal year.<br />
Proprietary funds. The <strong>City</strong>’s proprietary funds provide the same type <strong>of</strong> information found in the<br />
government-wide financial statements, but in more detail.<br />
15
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
The total net assets <strong>of</strong> the enterprise funds increased $12.9 million. This was due primarily to an<br />
increase <strong>of</strong> $6.3 million, or 7.2%, in the total charges for services for all enterprise funds, and an<br />
increase in net transfers to the Cemetery fund <strong>of</strong> $6.6 million, <strong>of</strong> which $6.2 million were from the<br />
General Fund. Total net assets <strong>of</strong> internal service funds decreased $3.4 million, or 4.8%, mainly due to<br />
an increase <strong>of</strong> $5.6 million in claims expense net <strong>of</strong> claims reserve adjustment. This increase in claims<br />
expense was <strong>of</strong>fset by decreases in personnel services and materials and supplies.<br />
Resource Recovery and Recycling Fund<br />
The Resource Recovery and Recycling Fund was not a major fund in FY 2010-11. It is a major fund<br />
for the FY 2011-12. The total net assets <strong>of</strong> the Resource Recovery and Recycling Fund decreased $1.6<br />
million, or 23.4%, due to increases <strong>of</strong> $1.7 million <strong>of</strong> materials and supplies expenses related to fees<br />
paid to an outside contractor for various disposal services.<br />
Wastewater Enterprise Fund<br />
The total net assets <strong>of</strong> the Wastewater Fund increased $3.1 million, or 1.6%, mainly due to an increase<br />
<strong>of</strong> $2.2 million in charges for services for greater than anticipated wastewater capital facility fees from<br />
several large developments.<br />
Airport Fund<br />
The Airport Fund was not a major fund in FY 2010-11. It is a major fund for the FY 2011-12. The<br />
total net deficit <strong>of</strong> the Airport Fund increased $1.1 million, or 36.8%, due to operating expenses<br />
outpacing revenues by $1.1 million.<br />
Big Blue Bus Enterprise Fund<br />
The total net assets <strong>of</strong> the Big Blue Bus Fund increased $5.3 million due to the following: $4.5 million<br />
increase in capital grants and $2.5 million increase in Prop 1B revenue. This was <strong>of</strong>fset by operating<br />
expenses exceeding operating grants and passenger revenue by $1.7 million.<br />
General Fund Budgetary Highlights<br />
Differences between the original budget versus the final amended budget and the final amended<br />
budget versus the actual are briefly summarized as follows:<br />
The final revenue budget exceeds the original budget by $142.3 million. This discrepancy is primarily<br />
due to additional budget appropriated for anticipated revenues <strong>of</strong> $139.8 million from Former Agency<br />
payments to the <strong>City</strong>. Actual total revenues were greater than final budget totals by $6.4 million. This<br />
was partially due to settlement income, property tax, sales tax, and other tax revenues exceeding final<br />
budgeted amounts by $29.2 million, $3.8 million, $3.9 million, and $0.7 million, respectively. Actual<br />
other revenues fell short <strong>of</strong> budgeted other revenues, due mainly to transactions between the <strong>City</strong> and<br />
Former Agency <strong>of</strong> $27.9 million that were budgeted and not realized.<br />
The final expenditure budget is greater than the original budget by $ 303.3 million. The increase is<br />
comprised primarily <strong>of</strong> $199.0 million <strong>of</strong> capital improvement projects included in the final<br />
expenditure budget, which includes Civic Center Palisades Walk and Ken Genser Square, Civic<br />
Auditorium renovation, and Parking Structure 6 construction budgets for $47.5 million, $51.9 million,<br />
16
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
and $33.8 million, respectively. Final budgeted expenditures exceeded actual budgetary basis<br />
expenditures by $53.0 million due to continuing capital improvement projects in general government,<br />
public safety, general services, cultural and recreation services, and housing and community<br />
development.<br />
CAPITAL ASSET AND DEBT ADMINISTRATION<br />
Capital Assets. The <strong>City</strong>’s investment in capital assets as <strong>of</strong> June 30, 2012, amounted to $1.2 billion<br />
(net <strong>of</strong> accumulated depreciation) an increase <strong>of</strong> $37.2 million from the prior year balance. This<br />
investment in a broad range <strong>of</strong> capital assets, including land, infrastructure, structures and<br />
improvements, equipment, and construction in progress, is detailed as follows:<br />
CITY OF SANTA MONICA<br />
Capital Assets (net <strong>of</strong> depreciation)<br />
(in millions)<br />
Governmental activities Business-type activities Total<br />
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11<br />
Land $ 199.9 196.4 72.2 72.4 272.1 268.8<br />
Land held under easement 72.2 72.2 — — 72.2 72.2<br />
Buildings 217.8 217.0 111.1 111.7 328.9 328.7<br />
Improvements other than buildings 30.6 32.7 6.4 6.6 37.0 39.3<br />
Machinery and equipment 8.8 9.0 52.8 52.7 61.6 61.7<br />
Infrastructure 160.7 171.2 140.1 145.3 300.8 316.5<br />
Utility systems 1.4 1.4 — — 1.4 1.4<br />
Intangibles 3.3 3.3 61.4 60.8 64.7 64.1<br />
Construction in progress 76.6 34.9 25.6 16.1 102.2 51.0<br />
Capital assets, net $ 771.3 738.1 469.6 465.6 1,240.9 1,203.7<br />
Some <strong>of</strong> the <strong>City</strong>’s major capital asset events in the 2011-12 fiscal year were:<br />
Governmental Activities:<br />
1. $3.3 million increase in land for the property addition located at 10240-10248 Wilshire<br />
Boulevard.<br />
2. $1.2 million for the completion <strong>of</strong> the demolition and rebuild <strong>of</strong> seven beach restrooms.<br />
3. $2.2 million increase in construction in progress related to the demolition and rebuild <strong>of</strong><br />
Parking Structure 6.<br />
4. $7.2 million increase in construction in progress for the development <strong>of</strong> the Palisades Garden<br />
Walk and Ken Genser Square, a new six-acre park and one-acre park, respectively, that are<br />
oriented to civic and community activities.<br />
17
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
5. $1.0 million increase in construction in progress for the Colorado Esplanade project. The<br />
Colorado Esplanade will create a newly-designed promenade and plaza which will connect the<br />
future Light Rail Station and the Pier, providing a seamless connection from the Expo Light<br />
Rail station to Ocean Avenue and the Pier, the Main Street Bridge, Downtown and adjacent<br />
circulation network.<br />
6. $24.9 million increase in construction in progress <strong>of</strong> the Expo Light Rail project, which<br />
consists <strong>of</strong> three stations, a maintenance facility, a bike path, and approximately three miles <strong>of</strong><br />
track way within <strong>Santa</strong> <strong>Monica</strong>. This project is a 15-mile light rail line extending from<br />
Downtown Los Angeles to Downtown <strong>Santa</strong> <strong>Monica</strong>.<br />
7. $0.5 million increase in construction in progress for the new Pico Branch Library.$1.3 million<br />
increase in construction in progress <strong>of</strong> the Ocean Park Boulevard Green Street Project. This<br />
project will provide wider sidewalks, wider and more visible bike lanes, new trees and<br />
landscaping, new and enhanced crosswalks and pedestrian lighting, and water quality<br />
improvements by reducing impervious street surface and installing landscaped bio filter<br />
swales and infiltration areas.<br />
8. $1.7 million in building improvements for the bike center parking facilities in parking<br />
structures 7 and 8.<br />
Business-Type Activities:<br />
1. $3.6 million increase in construction in progress to replace water mains at various locations<br />
throughout the <strong>City</strong> in the Water Fund. Water mains identified for replacement or upgrades<br />
were based on factors such as age, condition, and capacity demands.<br />
2. $2.7 million increase in intangibles for the capital payments made to the <strong>City</strong> <strong>of</strong> Los Angeles<br />
for <strong>Santa</strong> <strong>Monica</strong>’s shared cost <strong>of</strong> the Hyperion Plant amalgamated water system in the<br />
Wastewater Fund.<br />
3. $9.7 million increase in machinery and equipment for the purchase <strong>of</strong> five new 60 foot<br />
articulated clean natural gas buses and ten new 30 foot clean natural gas buses to replace<br />
obsolete fleet in the Big Blue Bus Fund. In addition, there was $2.1 million spent for the<br />
upgrade <strong>of</strong> the Big Blue Bus Fuel and Wash Facility.<br />
4. $2.6 million increase in construction in progress related to the demolition and rebuild <strong>of</strong><br />
parking structure 6 in the Parking Authority Fund.<br />
Additional information on the <strong>City</strong>’s capital assets can be found in note 7 to the basic financial<br />
statements.<br />
Long-term Debt. At the end <strong>of</strong> the current fiscal year, the <strong>City</strong>’s total long-term debt outstanding was<br />
$121.9 million, a decrease from the prior year <strong>of</strong> $237.6 million or 66.1%. This amount was<br />
comprised <strong>of</strong> $107.9 million <strong>of</strong> revenue bonds, which are secured by both governmental and businesstype<br />
revenue sources, $11.3 million <strong>of</strong> general obligation bonds which are backed by the full faith and<br />
credit <strong>of</strong> the <strong>City</strong>, and $2.7 million <strong>of</strong> various notes and loans payable. This is shown in the following<br />
table:<br />
18
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
CITY OF SANTA MONICA<br />
Outstanding Debt<br />
(in millions)<br />
General obligation bonds<br />
2011-12 2010-11 2011-12 2010-11 2011-12 2010-11<br />
(backed by the <strong>City</strong>) $ 11.3 15.0 — — 11.3 15.0<br />
Revenue bonds<br />
(backed by specific tax, fee 87.6 167.8 20.3 22.6 107.9 190.4<br />
and lease revenues)<br />
Governmental activities Business-type activities Total<br />
Term Loan, Redevelopment — 50.0 — — — 50.0<br />
Agency (backed by specific<br />
tax revenues)<br />
Notes and loans 0.4 101.5 2.3 2.6 2.7 104.1<br />
Total $ 99.3 334.3 22.6 25.2 121.9 359.5<br />
On November 16, 2011, the <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority issued $32,065,000 <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong> Public Financing Authority Lease Revenue Bonds Series 2011A bearing interest from 4.00%<br />
to 5.00% with a maturity date <strong>of</strong> June 1, 2031 to fund construction <strong>of</strong> Parking Structure 6.<br />
On that same date the <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority refunded the <strong>Santa</strong> <strong>Monica</strong> Public<br />
Financing Authority Lease Revenue Series 2002A by issuing <strong>Santa</strong> <strong>Monica</strong> Public Financing<br />
Authority Lease Revenue Refunding Bonds Series 2011B for $8,625,000 bearing interest from 2.00%<br />
to 4.00% with a maturity <strong>of</strong> December 1, 2020.<br />
On May 30, 2012, the <strong>City</strong> issued $11,325,000 <strong>of</strong> General Obligation Refunding Bonds, Series 2012<br />
(Library Improvement Project) bearing interest from 0.20% to 4.00% with a maturity <strong>of</strong> July 1, 2022<br />
to refund the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> General Obligation Bonds Series 2002 (Library Improvement<br />
Project). At June 30, 2012, $13,750,000 <strong>of</strong> the refunded bonds were still outstanding and have not<br />
been included in the accompanying financial statements. The defeased 2002 Library Improvement<br />
Bonds were called in full on July 1, 2012.<br />
On that same date, the <strong>City</strong> issued $8,955,000 <strong>of</strong> Wastewater Refunding Revenue Bonds, Series<br />
2012A bearing interest from 2.00% to 4.00% with a maturity <strong>of</strong> February 1, 2022. These bonds were<br />
issued to refund the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Wastewater Enterprise Revenue Bonds (Hyperion Project)<br />
1993 Refunding Series.<br />
On June 14, 2012, Moody’s downgraded all California Redevelopment Tax Allocation Bonds to Ba1,<br />
which included the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Earthquake Project<br />
Redevelopment Bonds Series 2011 and 2006 and the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Ocean Park Project<br />
Redevelopment Bonds Series 2002. This debt was transferred to the Successor Agency as <strong>of</strong> February<br />
1, 2012.<br />
19
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
On October 9, 2012, Moody’s Investor Services issued a statement that the debt ratings <strong>of</strong> 32<br />
California cities would come under review. On December 17, 2012, Moody’s downgraded the <strong>City</strong>’s<br />
Lease Revenue Bonds to Aa2 from Aa1 citing Moody’s opinion that a two notch rating distinction<br />
between the <strong>City</strong>’s Aaa general obligation bond rating and the Aa2 lease-backed obligation generally<br />
reflects the weaker security pledge for the lease-backed obligations. These bonds include the Public<br />
Financing Authority Lease Revenue Refunding Bonds, Series 2011A and 2009 (Public Safety Facility<br />
Project), and Series 2004 (Civic Center Parking Project).<br />
Additional information on the <strong>City</strong>’s long-term debt can be found in note 9 to the basic financial<br />
statements.<br />
ECONOMIC FACTORS AND BIENNIAL BUDGET<br />
The <strong>City</strong>’s adopted General Fund budget for FYs 2011-13 supports the basic responsibilities <strong>of</strong> local<br />
government, the policy interests <strong>of</strong> <strong>City</strong> Council Members and diverse concerns <strong>of</strong> the residents.<br />
Management feels that there are adequate resources available to fund the proposed expenditures.<br />
In preparing the budget, many factors were taken into consideration.<br />
• The decreased revenues resulting from the dissolution <strong>of</strong> redevelopment and the loss <strong>of</strong><br />
property tax increment revenue.<br />
• Increase in payments to the <strong>Santa</strong> <strong>Monica</strong> Malibu United School District due to additional<br />
revenues from Measure Y.<br />
• Continued increases in sales and use tax, utility users’ tax, transient occupancy tax and<br />
parking revenues due to an improving economy.<br />
• Increase expenditures due primarily to water purchases and Big Blue Bus budget realignment<br />
to reflect current operations.<br />
• The additional payment to reduce the <strong>City</strong>’s pension liability and higher pension costs<br />
resulting from the California Public Employees Retirement System discount rate change.<br />
• Twenty percent funding reduction in Community Development Block Grants and other<br />
Housing and Urban Development allocation reductions.<br />
• Elimination and reduction <strong>of</strong> grant funding in various divisions.<br />
• New operating and maintenance costs for new public spaces.<br />
• The additional appropriations for the Airport Fund loan and Cemetery subsidies.<br />
• The <strong>City</strong> warehouse closure.<br />
• Corrections <strong>of</strong> historic under budgeting in certain areas.<br />
• Continued support <strong>of</strong> education.<br />
• Impact <strong>of</strong> the dissolution <strong>of</strong> redevelopment (see note 17).<br />
20
CITY OF SANTA MONICA, CALIFORNIA<br />
Management’s Discussion and Analysis, Continued<br />
For the fiscal year ended June 30, 2012<br />
(Unaudited)<br />
CONTACTING THE CITY'S FINANCE DEPARTMENT<br />
This management’s discussion and analysis is designed to provide citizens, taxpayers, customers,<br />
investors and creditors with a general overview <strong>of</strong> the <strong>City</strong>'s finances and to demonstrate the <strong>City</strong>'s<br />
accountability for the money it receives. If you have questions or need additional financial<br />
information, please contact the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>’s Finance Department at<br />
www.smgov.net/finance or at (310) 458-8281.<br />
21
THIS PAGE INTENTIONALLY LEFT BLANK<br />
22
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California<br />
Year Ended June 30, 2012<br />
Basic Financial Statements
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Net Assets<br />
June 30, 2012<br />
Governmental<br />
Activities<br />
Business-Type<br />
Activities<br />
Total<br />
ASSETS<br />
Cash and investments (note 5) $ 338,165,244 110,817,216 448,982,460<br />
Receivables (net <strong>of</strong> allowances for uncollectibles):<br />
Accounts 88,077,377 22,472,530 110,549,907<br />
Interest 1,080,456 298,503 1,378,959<br />
Property taxes 1,503,357 — 1,503,357<br />
Notes (note 6) 107,987,656 — 107,987,656<br />
Other governments 4,256,380 — 4,256,380<br />
Internal balances 15,457,366 (15,457,366) —<br />
Inventory — 1,663,136 1,663,136<br />
Due from Successor Agency (note 11) 59,216 — 59,216<br />
Deposits 61,785 — 61,785<br />
Prepaids 241,970 101,508 343,478<br />
Restricted cash and investments (note 5) 228,312,550 26,481,929 254,794,479<br />
Restricted cash and investments with fiscal agent (note 5) 50,820,984 — 50,820,984<br />
Advances to Successor Agency (note 11) 30,405,503 — 30,405,503<br />
Bond issuance costs, net 1,454,822 381,336 1,836,158<br />
Capital assets (note 7):<br />
Capital assets not being depreciated:<br />
Land 199,875,024 72,231,413 272,106,437<br />
Land held under easement 72,237,823 — 72,237,823<br />
Construction in progress 76,620,830 25,566,686 102,187,516<br />
Capital assets being depreciated:<br />
Buildings 280,335,067 153,144,518 433,479,585<br />
Improvements other than buildings 78,625,572 26,556,833 105,182,405<br />
Utility systems 1,742,913 — 1,742,913<br />
Machinery and equipment 35,324,722 166,477,802 201,802,524<br />
Infrastructure 329,590,318 204,438,070 534,028,388<br />
Intangibles 3,575,000 82,597,091 86,172,091<br />
Less accumulated depreciation (306,648,890) (261,355,976) (568,004,866)<br />
Total capital assets, net 771,278,379 469,656,437 1,240,934,816<br />
TOTAL ASSETS 1,639,163,045 616,415,229 2,255,578,274<br />
LIABILITIES<br />
Accounts payable 16,334,238 4,493,132 20,827,370<br />
Accrued liabilities 9,658,181 3,817,120 13,475,301<br />
Accrued interest payable 1,191,785 245,331 1,437,116<br />
Contracts payable (retained percentage) 2,248,933 535,634 2,784,567<br />
Due to Successor Agency (note 11) 36,800,358 — 36,800,358<br />
Unearned revenue (note 8) 32,522,979 1,051,201 33,574,180<br />
Due to other governments 3,514 — 3,514<br />
Deposits payable from restricted assets 1,095,500 10,017,699 11,113,199<br />
Long-term liabilities:<br />
Compensated absences due within one year (note 9) 6,182,307 2,172,739 8,355,046<br />
Compensated absences due in more than one year (note 9) 5,149,218 1,100,172 6,249,390<br />
Claims payable due within one year (notes 9 and 15) 6,551,766 1,524,563 8,076,329<br />
Claims payable due in more than one year (notes 9 and 15) 22,473,475 1,188,493 23,661,968<br />
Loans and bonds payable due within one year (note 9) 3,365,000 1,963,305 5,328,305<br />
Loans and bonds payable due in more than one year (note 9) 100,260,630 19,664,932 119,925,562<br />
Pollution remediation obligation due within one year (note 4) 5,357,291 — 5,357,291<br />
Pollution remediation obligation due in more than one year (note 4) 123,396,332 — 123,396,332<br />
Accrued OPEB liability (note 16) 6,740,000 — 6,740,000<br />
TOTAL LIABILITIES 379,331,507 47,774,321 427,105,828<br />
NET ASSETS<br />
Invested in capital assets, net <strong>of</strong> related debt 708,564,360 448,028,200 1,156,592,560<br />
Restricted for (note 12):<br />
Housing and community development 87,511,217 — 87,511,217<br />
Clean beaches and ocean parcel tax 10,265,875 — 10,265,875<br />
Miscellaneous grants 14,864,749 — 14,864,749<br />
Debt service 3,598,618 — 3,598,618<br />
Development projects 37,342,114 — 37,342,114<br />
Perpetual care - nonexpendable 9,146,899 — 9,146,899<br />
Rail system, Prop 1B and ARRA — 16,024,235 16,024,235<br />
Pollution remediation settlement 9,234,917 — 9,234,917<br />
Unrestricted 379,302,789 104,588,473 483,891,262<br />
TOTAL NET ASSETS $ 1,259,831,538 568,640,908 1,828,472,446<br />
See accompanying notes to basic financial statements.<br />
23
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Activities<br />
For the fiscal year ended June 30, 2012<br />
Program Revenues<br />
Net (Expense) Revenue and Changes in Net Assets<br />
Charges for<br />
Services<br />
Operating Grants<br />
and Contributions<br />
Capital Grants and<br />
Contributions<br />
Governmental<br />
Activities<br />
Business-type<br />
Activities<br />
Functions/Programs<br />
Expenses<br />
Total<br />
Governmental Activities:<br />
General government $ 65,640,271 48,239,920 2,503,652 170 (14,896,529) — (14,896,529)<br />
Public safety 108,205,471 22,033,156 1,964,160 2,530 (84,205,625) — (84,205,625)<br />
General services 55,341,929 2,429,537 2,771,514 1,917,538 (48,223,340) — (48,223,340)<br />
Cultural and recreation services 62,145,219 16,083,451 2,621,270 — (43,440,498) — (43,440,498)<br />
Library 11,899,948 465,891 155,638 — (11,278,419) — (11,278,419)<br />
Housing and community development 181,970,013 16,712,921 16,722,953 1,448,983 (147,085,156) — (147,085,156)<br />
Interest on long-term debt 6,585,618 — — — (6,585,618) — (6,585,618)<br />
Total governmental activities 491,788,469 105,964,876 26,739,187 3,369,221 (355,715,185) — (355,715,185)<br />
Business-Type Activities<br />
Water 19,665,696 19,897,464 — — — 231,768 231,768<br />
Resource recovery and recycling 25,065,338 22,253,758 — — — (2,811,580) (2,811,580)<br />
Pier 5,803,944 6,004,005 — — — 200,061 200,061<br />
Wastewater 18,186,844 20,007,219 — — — 1,820,375 1,820,375<br />
Civic auditorium 3,239,999 1,667,172 — — — (1,572,827) (1,572,827)<br />
Airport 5,270,688 3,891,716 — — — (1,378,972) (1,378,972)<br />
Storm water management 411,985 1,419,980 — — — 1,007,995 1,007,995<br />
Cemetery 1,812,098 1,133,990 — — — (678,108) (678,108)<br />
Big Blue Bus 79,835,156 16,614,711 38,424,357 25,609,158 — 813,070 813,070<br />
Parking authority 315,736 161,504 — — — (154,232) (154,232)<br />
Total business-type activities 159,607,484 93,051,519 38,424,357 25,609,158 — (2,522,450) (2,522,450)<br />
Total Primary Government $ 651,395,953 199,016,395 65,163,544 28,978,379 (355,715,185) (2,522,450) (358,237,635)<br />
General revenues:<br />
Taxes:<br />
Business 27,382,495 — 27,382,495<br />
Property 59,161,313 — 59,161,313<br />
Transient occupancy 36,143,092 — 36,143,092<br />
Utility users 31,295,584 — 31,295,584<br />
Real property transfer 5,192,112 — 5,192,112<br />
Parking facility tax 9,394,167 — 9,394,167<br />
Other taxes 2,864,682 — 2,864,682<br />
Settlement income 3,750,000 — 3,750,000<br />
Motor vehicle in lieu, unrestricted 45,862 — 45,862<br />
Sales and use taxes 45,831,961 — 45,831,961<br />
Other income 120,208,757 5,310,643 125,519,400<br />
Investment earnings 5,791,811 1,125,241 6,917,052<br />
Extraordinary gain (note 17) 261,255,080 — 261,255,080<br />
Transfers (6,141,048) 6,141,048 —<br />
Total general revenues, extraordinary gain and transfers 602,175,868 12,576,932 614,752,800<br />
Change in net assets 246,460,683 10,054,482 256,515,165<br />
Net assets, beginning 1,013,370,855 558,586,426 1,571,957,281<br />
Net assets, ending $ 1,259,831,538 568,640,908 1,828,472,446<br />
See accompanying notes to basic financial statements.<br />
24
CITY OF SANTA MONICA, CALIFORNIA<br />
Major Governmental Fund Financial Statements<br />
General Fund – To account for all financial resources necessary to carry out basic governmental<br />
activities <strong>of</strong> the <strong>City</strong> that are not accounted for in another fund. The General Fund supports essential <strong>City</strong><br />
services such as police and fire protection, street maintenance, libraries, parks and open space<br />
management.<br />
Special Revenue Source Fund (Capital Projects Fund Type) – To account for receipt and expenditure<br />
<strong>of</strong> monies restricted or committed for specific uses.<br />
Earthquake Recovery Redevelopment Project Fund (Capital Projects Fund Type) – To account for<br />
the revenues and expenditures <strong>of</strong> the earthquake recovery redevelopment project area <strong>of</strong> the<br />
Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. The redevelopment plan for this 2,307-acre project<br />
was approved in June 1994. The project area included approximately 90 percent <strong>of</strong> all red-tagged and 80<br />
percent <strong>of</strong> all yellow-tagged buildings damaged by the January 17, 1994 Northridge Earthquake. The<br />
Redevelopment Agency was dissolved on February 1, 2012. See Note 17.<br />
25
CITY OF SANTA MONICA, CALIFORNIA<br />
Balance Sheet<br />
Governmental Funds<br />
June 30, 2012<br />
General Fund<br />
Capital Projects Funds<br />
Special Revenue<br />
Source Fund<br />
Earthquake<br />
Recovery<br />
Redevelopment<br />
Project Fund<br />
Nonmajor<br />
governmental<br />
funds<br />
Total<br />
governmental<br />
funds<br />
Assets<br />
Cash and investments (note 5) $ 386,177,304 70,087,428 — 58,487,175 514,751,907<br />
Receivables (net, where applicable, <strong>of</strong> allowances for uncollectibles):<br />
Accounts 14,103,727 95,838 — 506,622 14,706,187<br />
Notes (note 6) 9,589,483 24,915,158 — 73,483,015 107,987,656<br />
Property taxes 1,503,357 — — — 1,503,357<br />
Interest 779,379 25,870 — 158,856 964,105<br />
Other governments 1,751,267 — — 2,505,113 4,256,380<br />
Due from other funds (note 11) 7,731,246 — — 543,072 8,274,318<br />
Deposits 58,528 — — 3,257 61,785<br />
Prepaids 205,066 — — 27,379 232,445<br />
Restricted cash and investments with fiscal agent (note 5) 34,434,743 — — 16,386,241 50,820,984<br />
Advances to other funds (note 11) 17,240,093 — — — 17,240,093<br />
Advances to Successor Agency (note 11) 21,382,237 — — 9,023,266 30,405,503<br />
Total assets $ 494,956,430 95,124,294 — 161,123,996 751,204,720<br />
Liabilities and Fund Balances<br />
Liabilities<br />
Accounts payable $ 13,308,102 1,136,078 — 1,429,165 15,873,345<br />
Accrued liabilities 9,178,046 — — 356,573 9,534,619<br />
Contracts payable (retained percentage) 1,660,214 168,867 — 419,852 2,248,933<br />
Due to other funds (note 11) 30,880,832 — — 13,061,814 43,942,646<br />
Due to other governments 3,514 — — — 3,514<br />
Deferred revenue 22,711,519 47,242,318 — 8,226,762 78,180,599<br />
Deposits payable 956,922 — — 138,578 1,095,500<br />
Advances from other funds (note 11) — — — 3,842,973 3,842,973<br />
Total liabilities 78,699,149 48,547,263 — 27,475,717 154,722,129<br />
Fund balances (deficit) (note 13)<br />
Nonspendable 22,181,490 12,287,266 — 11,044,325 45,513,081<br />
Restricted 43,056,449 15,362,478 — 108,295,784 166,714,711<br />
Committed 640,000 820,854 — 51,976 1,512,830<br />
Assigned 233,153,471 18,106,433 — 14,443,590 265,703,494<br />
Unassigned 117,225,871 — — (187,396) 117,038,475<br />
Total fund balances (deficit) 416,257,281 46,577,031 — 133,648,279 596,482,591<br />
Total liabilities and fund balances $ 494,956,430 95,124,294 — 161,123,996 751,204,720<br />
See accompanying notes to basic financial statements.<br />
26
CITY OF SANTA MONICA, CALIFORNIA<br />
Reconciliation <strong>of</strong> the Governmental Funds Balance Sheet to the<br />
Government-Wide Statement <strong>of</strong> Net Assets<br />
June 30, 2012<br />
Fund balances - total governmental funds $ 596,482,591<br />
Amounts reported for governmental activities in the statement <strong>of</strong> net assets are different because (Note 3):<br />
(1) Capital assets used in governmental activities are not current financial resources and therefore are not reported in the balance sheet. 770,732,111<br />
(2) Bond issue costs to be amortized over the life <strong>of</strong> the debt. 1,454,822<br />
(3) Long-term liabilities are not due and payable in the current period and therefore are not reported in the balance sheet. (251,642,563)<br />
(4) Other long-term assets are not available to pay for current period expenditures and, therefore, are deferred in the<br />
funds and recognized as revenue in the statement <strong>of</strong> activities. 119,028,095<br />
(5) Internal service funds are used by management to charge the costs <strong>of</strong> vehicle management, information technology and<br />
risk management to individual funds. The assets and liabilities <strong>of</strong> the information technology and risk<br />
management (excluding bus) internal service funds are included in the governmental activities in the statement <strong>of</strong> net assets. 23,776,482<br />
Net assets <strong>of</strong> governmental activities $ 1,259,831,538<br />
See accompanying notes to basic financial statements.<br />
27
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Revenues, Expenditures and Changes in Fund Balances<br />
Governmental Funds<br />
For the fiscal year ended June 30, 2012<br />
Capital Projects Funds<br />
Special Revenue<br />
Source Fund<br />
Earthquake<br />
Recovery<br />
Redevelopment<br />
Project Fund<br />
Nonmajor<br />
governmental<br />
funds<br />
Total<br />
governmental<br />
funds<br />
General Fund<br />
Revenues:<br />
Property taxes $ 40,226,124 — — — 40,226,124<br />
Incremental property taxes — — 13,191,737 6,603,114 19,794,851<br />
Sales taxes 45,831,961 — — — 45,831,961<br />
Other taxes 108,433,055 — — 2,917,190 111,350,245<br />
Licenses and permits 30,518,601 — — 89,991 30,608,592<br />
Intergovernmental 404,210 308,952 — 27,563,887 28,277,049<br />
Charges for services 36,752,956 560,202 — 15,300,173 52,613,331<br />
Fines and forfeitures 15,651,820 — — — 15,651,820<br />
Investment income 3,555,400 259,293 61,003 1,114,276 4,989,972<br />
Rental income 8,351,319 — — 1,267,935 9,619,254<br />
Settlement income 29,229,525 4,047,746 — — 33,277,271<br />
Other 115,846,146 2,021,152 188,943 1,437,771 119,494,012<br />
Total revenues 434,801,117 7,197,345 13,441,683 56,294,337 511,734,482<br />
Expenditures:<br />
Current:<br />
General government 63,808,035 — — 10,986 63,819,021<br />
Public safety 104,231,630 — — 1,983,923 106,215,553<br />
General services 63,901,709 5,062,105 — 8,232,956 77,196,770<br />
Cultural and recreation services 50,178,636 27,360 — 10,116,018 60,322,014<br />
Library 11,303,654 — — 20,252 11,323,906<br />
Housing and community development 40,248,095 2,492,090 85,624,640 68,892,971 197,257,796<br />
Debt service expenditures:<br />
Principal — — 4,285,714 8,895,000 13,180,714<br />
Interest — — 2,301,857 10,010,768 12,312,625<br />
Bond issue costs 416,993 — 25,000 — 441,993<br />
Total expenditures 334,088,752 7,581,555 92,237,211 108,162,874 542,070,392<br />
Excess (deficiency) <strong>of</strong> revenues over (under) expenditures 100,712,365 (384,210) (78,795,528) (51,868,537) (30,335,910)<br />
Other financing sources (uses):<br />
Transfers in (note 11) 11,276,113 — — 87,524,528 98,800,641<br />
Transfers out (note 11) (25,549,932) (742,424) (6,497,232) (72,468,287) (105,257,875)<br />
Proceeds from issuance <strong>of</strong> long-term debt 32,178,250 — — — 32,178,250<br />
Proceeds from issuance <strong>of</strong> refunding bonds 19,950,000 — — — 19,950,000<br />
Premium on debt issued 4,339,840 — — — 4,339,840<br />
Payment to refunded bond escrow agent (21,925,071) — — (364,583) (22,289,654)<br />
Total other financing sources (uses) 20,269,200 (742,424) (6,497,232) 14,691,658 27,721,202<br />
Extraordinary items:<br />
Extraordinary gain (note 17) — — — 28,201,616 28,201,616<br />
Extraordinary loss (note 17) — — (10,438,948) (4,059,455) (14,498,403)<br />
Total extraordinary items — — (10,438,948) 24,142,161 13,703,213<br />
Net change in fund balances 120,981,565 (1,126,634) (95,731,708) (13,034,718) 11,088,505<br />
Fund balances at the beginning <strong>of</strong> year 295,275,716 47,703,665 95,731,708 146,682,997 585,394,086<br />
Fund balances at end <strong>of</strong> year $ 416,257,281 46,577,031 — 133,648,279 596,482,591<br />
See accompanying notes to basic financial statements.<br />
28
CITY OF SANTA MONICA, CALIFORNIA<br />
Reconciliation <strong>of</strong> the Governmental Funds Statement <strong>of</strong> Revenues, Expenditures, and Changes in Fund Balances<br />
to the Government-Wide Statement <strong>of</strong> Activities<br />
For the fiscal year ended June 30, 2012<br />
Net change in fund balances – total governmental funds $ 11,088,505<br />
Amounts reported for governmental activities in the statement <strong>of</strong> activities are different because:<br />
Capital assets<br />
1) The acquisition <strong>of</strong> capital assets requires the use <strong>of</strong> current financial resources<br />
but has no effect on net assets. 54,754,258<br />
2) The cost <strong>of</strong> capital assets is allocated over their estimated useful lives and reported<br />
as depreciation expense in the statement <strong>of</strong> activities. (21,653,021)<br />
3) The loss on disposal <strong>of</strong> capital assets is recorded as an expense in the statement <strong>of</strong> activities<br />
but is not recorded in the fund statements. (12,414)<br />
4) The transfer <strong>of</strong> capital assets from an enterprise fund to a governmental fund is recorded as a transfer in on the statement <strong>of</strong> activities<br />
but is not recorded in the fund statements. 200,000<br />
Measurement focus:<br />
5) Change in accrued interest payable. 3,390,930<br />
6) Principal payments on long-term bonded debt use current financial resources<br />
but have no effect on net assets. 8,895,000<br />
7) Principal payments on long-term loans payable use current financial resources<br />
but have no effect on net assets. 4,285,714<br />
8) The issuance <strong>of</strong> long-term debt provides current financial resources to the funds<br />
but has no effect on net assets. (52,128,250)<br />
The defeasance <strong>of</strong> long-term debt uses current financial resources <strong>of</strong> the funds<br />
but has no effect on net assets. 22,289,654<br />
The premium on issuance <strong>of</strong> long-term debt provides current financial resources to the funds<br />
but has no effect on net assets. (4,339,840)<br />
The issuance costs <strong>of</strong> long-term debt uses current financial resources <strong>of</strong> the funds<br />
but has no effect on net assets. 441,993<br />
The interest expense <strong>of</strong> long-term debt uses current financial resources <strong>of</strong> the funds<br />
but has no effect on net assets. 27,011<br />
9) Bond premiums are recorded as other financing source in the fund statements but are<br />
amortized in the statement <strong>of</strong> activities. 193,596<br />
10) Bond discounts are recorded as other financing uses in the fund statements but are<br />
amortized in the statement <strong>of</strong> activities. (7,977)<br />
11) Costs <strong>of</strong> issuance are recorded as an expenditure in the fund statements but are<br />
amortized in the statement <strong>of</strong> activities. (161,709)<br />
12) Deferred loss on refunding amortized in the statement <strong>of</strong> activities. (152,426)<br />
13) The decrease in compensated absences liability does not provide current<br />
financial resources but is recorded as a decrease in expense in the statement <strong>of</strong> activities. 577<br />
14) Elimination <strong>of</strong> interest related to interfund loans that are recorded as an expenditure, with <strong>of</strong>fsetting<br />
interest revenue on the fund statements but eliminated on the government-wide statements. 2,796,021<br />
15) Pollution remediation settlement income recognized on fund statements, had been previously recognized<br />
in the statement <strong>of</strong> activities. (29,229,525)<br />
16) Net pollution remediation expenses not recognized on fund statements recognized in the statement <strong>of</strong> activities (150,000)<br />
17) The increase in OPEB liability does not require the use <strong>of</strong> current<br />
financial resources but is recorded as an expense in the statement <strong>of</strong> activities. (1,646,000)<br />
18) To record pollution remediation liability activity, which was recorded in a prior year and reduced<br />
the liability in the statement <strong>of</strong> net assets. 541,059<br />
19) Extraordinary items: transfers to the <strong>Santa</strong> <strong>Monica</strong> Redevelopment Successor Agency<br />
Long-term debt 251,897,306<br />
Issuance costs (1,657,813)<br />
Bond premiums 430,603<br />
Bond discounts (140,785)<br />
Deferred loss on refunding (2,977,444)<br />
247,551,867<br />
Internal service funds:<br />
20) Certain internal service funds are used by management to charge the costs <strong>of</strong> vehicle<br />
management, information technology, and risk management to individual funds.<br />
The net expense <strong>of</strong> certain internal service funds is reported with<br />
governmental activities. (514,340)<br />
Change in net assets (statement <strong>of</strong> activities, governmental activities)<br />
$<br />
246,460,683<br />
29
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance - Budget and Actual (Non-GAAP Basis)<br />
General Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
Original Final encumbered 2011-2012 budgetary Variance with<br />
budget budget Actual expenditures encumbrances basis final budget<br />
Revenues:<br />
Property taxes $ 35,852,491 36,418,647 40,226,124 — — 40,226,124 3,807,477<br />
Sales tax 41,950,000 41,950,000 45,831,961 — — 45,831,961 3,881,961<br />
Other taxes 105,703,122 107,744,000 108,433,055 — — 108,433,055 689,055<br />
Licenses and permits 29,744,431 29,744,431 30,518,601 — — 30,518,601 774,170<br />
Intergovernmental 409,758 234,758 404,210 — — 404,210 169,452<br />
Charges for services 38,986,618 38,712,049 36,752,956 — — 36,752,956 (1,959,093)<br />
Fines and forfeitures 17,679,000 16,354,000 15,651,820 — — 15,651,820 (702,180)<br />
Investment income 5,118,000 5,318,000 3,555,400 — — 3,555,400 (1,762,600)<br />
Rental income 8,402,964 8,230,798 8,351,319 — — 8,351,319 120,521<br />
Settlement income — — 29,229,525 — — 29,229,525 29,229,525<br />
Other 2,331,274 143,730,378 115,846,146 — — 115,846,146 (27,884,232)<br />
Total revenues 286,177,658 428,437,061 434,801,117 — — 434,801,117 6,364,056<br />
Expenditures:<br />
General government:<br />
<strong>City</strong> council 642,663 671,437 582,846 19,306 — 563,540 107,897<br />
<strong>City</strong> manager 9,411,604 9,440,494 8,566,072 376,698 733,741 8,923,115 517,379<br />
Record and election services 2,168,629 2,225,395 2,148,330 — 55,663 2,203,993 21,402<br />
Finance 21,321,003 21,341,657 20,221,902 213,532 517,179 20,525,549 816,108<br />
<strong>City</strong> attorney 8,672,331 8,640,256 8,931,187 — 16,508 8,947,695 (307,439)<br />
Human resources 3,672,103 3,662,125 3,442,005 — 501 3,442,506 219,619<br />
Information systems 6,385,547 6,364,325 5,683,714 16,000 21,327 5,689,041 675,284<br />
Other 915,568 6,415,568 6,223,332 — — 6,223,332 192,236<br />
Capital improvement 4,565,407 19,002,848 8,008,647 — 3,236,933 11,245,580 7,757,268<br />
Total general government 57,754,855 77,764,105 63,808,035 625,536 4,581,852 67,764,351 9,999,754<br />
Public safety:<br />
Police 69,224,123 67,368,398 71,541,849 89,286 46,852 71,499,415 (4,131,017)<br />
Fire 29,835,411 29,652,660 29,432,690 89,990 110,913 29,453,613 199,047<br />
Other — 2,500,000 2,500,000 — — 2,500,000 —<br />
Capital improvement 1,844,077 5,657,422 757,091 — 464,056 1,221,147 4,436,275<br />
Total public safety 100,903,611 105,178,480 104,231,630 179,276 621,821 104,674,175 504,305<br />
See accompanying notes to basic financial statements.<br />
(Continued)<br />
30
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance - Budget and Actual (Non-GAAP Basis)<br />
General Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
Original Final encumbered 2011-2012 budgetary Variance with<br />
budget budget Actual expenditures encumbrances basis final budget<br />
General services:<br />
Public works $ 25,996,656 27,025,606 25,777,342 29,312 183,810 25,931,840 1,093,766<br />
Capital improvement 6,375,892 76,140,810 38,124,367 — 11,757,988 49,882,355 26,258,455<br />
Total general services 32,372,548 103,166,416 63,901,709 29,312 11,941,798 75,814,195 27,352,221<br />
Cultural and recreation services:<br />
Community and cultural services 34,294,093 34,678,221 33,482,999 440,894 555,266 33,597,371 1,080,850<br />
Other 13,653,227 13,903,227 14,098,260 — 553,600 14,651,860 (748,633)<br />
Capital improvement 2,031,640 7,467,280 2,597,377 — 660,687 3,258,064 4,209,216<br />
Total cultural and recreation services 49,978,960 56,048,728 50,178,636 440,894 1,769,553 51,507,295 4,541,433<br />
Library:<br />
Library 10,968,118 10,938,871 10,664,329 257,422 160,996 10,567,903 370,968<br />
Capital improvement — 1,944,748 639,325 — 1,264,493 1,903,818 40,930<br />
Total library 10,968,118 12,883,619 11,303,654 257,422 1,425,489 12,471,721 411,898<br />
Housing and community development:<br />
Planning and community development 15,902,044 15,869,314 15,213,320 230,908 429,607 15,412,019 457,295<br />
Housing and economic development 6,797,632 7,264,703 6,040,295 64,917 55,981 6,031,359 1,233,344<br />
Other 2,500,238 2,500,238 2,500,238 — — 2,500,238 —<br />
Capital improvement — 198,950,182 16,494,242 — 174,437,556 190,931,798 8,018,384<br />
Total housing and community development 25,199,914 224,584,437 40,248,095 295,825 174,923,144 214,875,414 9,709,023<br />
Bond issue costs — 855,225 416,993 — — 416,993 438,232<br />
Total expenditures 277,178,006 580,481,010 334,088,752 1,828,265 195,263,657 527,524,144 52,956,866<br />
Excess (deficiency) <strong>of</strong> revenues<br />
over (under) expenditures 8,999,652 (152,043,949) 100,712,365 (1,828,265) (195,263,657) (92,723,027) 59,320,922<br />
Other financing sources (uses):<br />
Transfers in 11,427,816 11,427,816 11,276,113 — — 11,276,113 (151,703)<br />
Transfers out (10,775,669) (32,948,345) (25,549,932) — — (25,549,932) 7,398,413<br />
Proceeds from issuance <strong>of</strong> long-term debt — 32,178,250 32,178,250 — — 32,178,250 —<br />
Proceeds from issuance <strong>of</strong> refunding bonds — 19,950,000 19,950,000 — — 19,950,000 —<br />
Premium on debt issued — 5,627,900 4,339,840 — — 4,339,840 (1,288,060)<br />
Payment to refunded bond escrow agent — (2,769,531) (21,925,071) — — (21,925,071) (19,155,540)<br />
Total other financing sources (uses) 652,147 33,466,090 20,269,200 — — 20,269,200 (13,196,890)<br />
Net change in fund balances 9,651,799 (118,577,859) 120,981,565 (1,828,265) (195,263,657) (72,453,827) 46,124,032<br />
Fund balance at beginning <strong>of</strong> year 295,275,716 295,275,716 295,275,716 — — 295,275,716 —<br />
Fund balance at end <strong>of</strong> year $ 304,927,515 176,697,857 416,257,281 (1,828,265) (195,263,657) 222,821,889 46,124,032<br />
See accompanying notes to basic financial statements.<br />
31
THIS PAGE INTENTIONALLY LEFT BLANK<br />
32
CITY OF SANTA MONICA, CALIFORNIA<br />
Proprietary Fund Financial Statements<br />
Enterprise Funds are used to report any activity for which a fee is charged to external users for goods or<br />
services.<br />
Resource Recovery and Recycling Fund – To account for revenues and expenses <strong>of</strong> operating<br />
the <strong>City</strong>'s refuse collection, street sweeping and cleaning, and recycling programs.<br />
Wastewater Fund – To account for revenues and expenses associated with maintaining the<br />
sanitary sewer and storm drain systems within the <strong>City</strong>.<br />
Airport Fund – To account for revenues and expenses connected with management <strong>of</strong> the <strong>Santa</strong><br />
<strong>Monica</strong> Municipal Airport.<br />
Big Blue Bus Fund – To account for revenues and expenses related to operation <strong>of</strong> the <strong>City</strong>'s<br />
municipal bus lines.<br />
Internal Service Funds – To account for the financing <strong>of</strong> goods or services provided by one department<br />
or agency to other departments or agencies <strong>of</strong> the <strong>City</strong> or to other governments, on a cost-reimbursement<br />
basis.<br />
33
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Net Assets<br />
Proprietary Funds<br />
June 30, 2012<br />
Resource<br />
Recovery and<br />
Recycling Wastewater Airport Big Blue Bus<br />
Nonmajor<br />
enterprise<br />
funds<br />
Total<br />
enterprise<br />
funds<br />
Total<br />
internal<br />
service funds<br />
ASSETS<br />
Current assets:<br />
Cash and investments (note 5) $ 2,440,342 27,312,934 3,436,499 14,199,397 31,993,520 79,382,692 83,160,411<br />
Restricted cash and investments (note 5) — 239,921 379,945 — 989,572 1,609,438 —<br />
Receivables (net, where applicable, <strong>of</strong><br />
allowances for uncollectibles):<br />
Accounts 3,535,524 3,057,522 132,540 11,285,577 4,461,280 22,472,443 802<br />
Interest 31,648 62,955 2,789 47,711 88,303 233,406 181,448<br />
Inventory — — — 1,611,790 — 1,611,790 51,346<br />
Prepaids — 7,324 — 86,859 7,325 101,508 9,525<br />
Total current assets 6,007,514 30,680,656 3,951,773 27,231,334 37,540,000 105,411,277 83,403,532<br />
Noncurrent assets:<br />
Restricted cash and investments (note 5) 8,634,969 3,385,892 — 11,096,332 1,755,298 24,872,491 —<br />
Capital assets (note 7):<br />
Land — 3,189,132 8 61,085,563 7,956,710 72,231,413 —<br />
Buildings 334,063 251,447 8,018,906 128,233,725 16,306,377 153,144,518 —<br />
Improvements other than buildings 173,736 421,868 12,558,166 5,974,444 7,428,619 26,556,833 —<br />
Machinery and equipment 473,269 1,193,713 478,617 118,973,045 5,955,994 127,074,638 41,776,081<br />
Infrastructure — 149,150,701 — — 55,287,369 204,438,070 —<br />
Intangibles — 82,597,091 — — — 82,597,091 —<br />
Construction in progress 934,216 1,255,585 — 13,679,054 9,348,583 25,217,438 349,248<br />
Less: accumulated depreciation (805,491) (59,026,460) (15,257,352) (114,793,711) (47,159,834) (237,042,848) (26,139,777)<br />
Net capital assets 1,109,793 179,033,077 5,798,345 213,152,120 55,123,818 454,217,153 15,985,552<br />
Bond issuance costs, net — 381,336 — — — 381,336 —<br />
Total noncurrent assets 9,744,762 182,800,305 5,798,345 224,248,452 56,879,116 479,470,980 15,985,552<br />
TOTAL ASSETS 15,752,276 213,480,961 9,750,118 251,479,786 94,419,116 584,882,257 99,389,084<br />
LIABILITIES<br />
Current liabilities:<br />
Accounts payable 922,390 252,568 113,529 1,151,946 1,863,187 4,303,620 607,282<br />
Accrued liabilities 560,892 154,924 99,595 4,126,200 875,163 5,816,774 296,647<br />
Contracts payable (retained percentage) — 7,546 — 429,743 98,345 535,634 —<br />
Claims payable (note 15) — — — — — — 8,076,329<br />
Interest payable — 225,325 — — 20,006 245,331 —<br />
Current portion <strong>of</strong> long-term obligations (note 9) — 1,700,000 — — 263,305 1,963,305 —<br />
Due to other funds (note 11) — — — — 1,072,814 1,072,814 —<br />
Liabilities payable from restricted assets - deposits 8,639,844 — 379,945 8,338 989,572 10,017,699 —<br />
Total current liabilities 10,123,126 2,340,363 593,069 5,716,227 5,182,392 23,955,177 8,980,258<br />
Noncurrent liabilities:<br />
Accrued liabilities 309,564 49,753 50,614 251,565 327,214 988,710 154,585<br />
Advances from other funds (note 11) — — 13,335,039 — 62,081 13,397,120 —<br />
Claims payable (note 15) — — — — — — 23,661,968<br />
Unearned revenue (note 8) — — — 1,051,201 — 1,051,201 —<br />
Long-term obligations net <strong>of</strong> current portion (note 9) — 17,619,816 — — 2,045,116 19,664,932 —<br />
Total noncurrent liabilities 309,564 17,669,569 13,385,653 1,302,766 2,434,411 35,101,963 23,816,553<br />
TOTAL LIABILITIES 10,432,690 20,009,932 13,978,722 7,018,993 7,616,803 59,057,140 32,796,811<br />
NET ASSETS<br />
Invested in capital assets, net <strong>of</strong> related debt 1,109,793 159,713,261 5,798,345 213,152,120 52,815,397 432,588,916 15,985,552<br />
Restricted for Rail Reserve, Prop 1B and ARRA (note<br />
12) — — — 16,024,235 — 16,024,235 —<br />
Unrestricted 4,209,793 33,757,768 (10,026,949) 15,284,438 33,986,916 77,211,966 50,606,721<br />
TOTAL NET ASSETS $ 5,319,586 193,471,029 (4,228,604) 244,460,793 86,802,313 525,825,117 66,592,273<br />
See accompanying notes to basic financial statements.<br />
Net assets, business-type activities - internal service funds 43,803,223<br />
Net adjustment to reflect the allocation <strong>of</strong> the internal service funds net loss (987,432)<br />
Net assets <strong>of</strong> business-type activities $568,640,908<br />
34
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Revenues, Expenses and Changes in Fund Net Assets<br />
Proprietary Funds<br />
For the fiscal year ended June 30, 2012<br />
Resource<br />
Recovery and<br />
Recycling Wastewater Airport Big Blue Bus<br />
Nonmajor<br />
enterprise<br />
funds<br />
Total<br />
enterprise<br />
funds<br />
Total<br />
internal<br />
service funds<br />
Operating revenues<br />
Charges for services $ 22,253,758 20,007,219 3,891,716 16,614,711 30,284,115 93,051,519 25,807,059<br />
Total operating revenues 22,253,758 20,007,219 3,891,716 16,614,711 30,284,115 93,051,519 25,807,059<br />
Operating expenses<br />
Personnel services 9,104,328 2,098,939 1,304,703 41,461,009 10,083,167 64,052,146 4,224,761<br />
Administrative indirect 932,411 560,658 894,503 4,474,494 1,872,979 8,735,045 648,935<br />
Contractual services 4,329,188 4,562,294 447,208 3,240,558 2,078,567 14,657,815 299,009<br />
Repairs and maintenance 2,994,468 825,860 294,022 880,623 622,452 5,617,425 1,188,554<br />
Materials and supplies 4,834,293 695,389 514,944 13,381,261 3,967,338 23,393,225 3,692,203<br />
Utilities 46,038 8,898 121,204 399,821 1,021,251 1,597,212 61,206<br />
Water purchases — — — — 6,460,974 6,460,974 —<br />
Casualty property and liability costs 193,302 375,973 122,227 1,029,914 661,972 2,383,388 48,361<br />
Claims expense net <strong>of</strong> claims reserve adjustment — — — — — — 11,251,674<br />
Insurance and bonds — — — — — — 3,814,558<br />
Miscellaneous fees and costs — — — — — — 545,701<br />
Depreciation 8,643 6,317,129 426,563 13,310,913 2,514,528 22,577,776 3,553,741<br />
Other 1,330,154 1,865,457 594,256 552,787 1,525,792 5,868,446 428,693<br />
Total operating expenses 23,772,825 17,310,597 4,719,630 78,731,380 30,809,020 155,343,452 29,757,396<br />
Operating income (loss) (1,519,067) 2,696,622 (827,914) (62,116,669) (524,905) (62,291,933) (3,950,337)<br />
Nonoperating revenues (expenses)<br />
Operating grants — — — 26,667 — 26,667 —<br />
Shared sales tax proceeds — — — 38,397,690 — 38,397,690 —<br />
Investment income 119,485 252,807 3,446 181,808 306,996 864,542 682,858<br />
Interest expense — (826,863) (486,954) — (71,359) (1,385,176) —<br />
Gain (loss) on disposal <strong>of</strong> capital assets — — — 141,593 650 142,243 (88,707)<br />
Other nonoperating 584,595 767,356 145,928 2,346,750 1,339,846 5,184,475 91,428<br />
Total nonoperating revenues (expenses) net 704,080 193,300 (337,580) 41,094,508 1,576,133 43,230,441 685,579<br />
Income (loss) before capital conributions and<br />
transfers (814,987) 2,889,922 (1,165,494) (21,022,161) 1,051,228 (19,061,492) (3,264,758)<br />
Capital contributions — — — 25,609,158 — 25,609,158 —<br />
Transfers in (note 11) — 1,199,442 28,429 802,452 12,494,533 14,524,856 2,178,397<br />
Transfers out (note 11) (807,636) (1,033,504) — (91,494) (6,207,351) (8,139,985) (2,306,034)<br />
Change in net assets (1,622,623) 3,055,860 (1,137,065) 5,297,955 7,338,410 12,932,537 (3,392,395)<br />
Net assets (deficit) at beginning <strong>of</strong> year 6,942,209 190,415,169 (3,091,539) 239,162,838 79,463,903 512,892,580 69,984,668<br />
Net assets (deficit) at end <strong>of</strong> year $ 5,319,586 193,471,029 (4,228,604) 244,460,793 86,802,313 525,825,117 66,592,273<br />
Change in net assets $ 12,932,537<br />
Net adjustment to reflect the consolidation <strong>of</strong> internal service fund activities related to enterprise funds (2,878,055)<br />
Change in net assets <strong>of</strong> business-type activities $ 10,054,482<br />
See accompanying notes to basic financial statements.<br />
35
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Cash Flows<br />
Proprietary Funds<br />
For the fiscal year ended June 30, 2012<br />
Resource<br />
Recovery<br />
and Recycling Wastewater Airport<br />
Big Blue<br />
Bus<br />
Nonmajor<br />
enterprise<br />
funds<br />
Total<br />
enterprise<br />
funds<br />
Total internal<br />
service funds<br />
Cash flows from operating activities:<br />
Cash received from customers $ 23,046,696 19,796,289 3,941,341 23,273,866 29,108,267 99,166,459 25,862,968<br />
Cash payments for materials and services (14,244,511) (8,565,122) (3,100,298) (24,475,052) (16,668,430) (67,053,413) (10,648,346)<br />
Cash paid for claims and related services — — — — — — (8,001,449)<br />
Cash payments to employees for services (8,934,733) (2,063,304) (1,313,811) (41,034,098) (9,932,113) (63,278,059) (4,396,059)<br />
Other revenue received 584,595 767,356 145,928 2,346,750 1,251,621 5,096,250 91,428<br />
Net cash provided by (used in) operating activities 452,047 9,935,219 (326,840) (39,888,534) 3,759,345 (26,068,763) 2,908,542<br />
Cash flows from noncapital financing activities:<br />
Sales tax proceeds — — — 38,397,690 — 38,397,690 —<br />
Advances from other funds — 88,875 3,508,174 — (886,940) 2,710,109 —<br />
Other operating grants — — — 26,667 — 26,667 —<br />
Transfers in — 1,199,442 28,429 802,452 8,013,373 10,043,696 2,178,397<br />
Transfers out (807,636) (1,033,504) — (91,494) (6,007,351) (7,939,985) (2,306,034)<br />
Net cash provided by (used in) noncapital<br />
financing activities (807,636) 254,813 3,536,603 39,135,315 1,119,082 43,238,177 (127,637)<br />
Cash flows from capital and related financing activities:<br />
Capital contributions received — — — 25,609,158 — 25,609,158 —<br />
Acquisition and construction <strong>of</strong> capital assets (96,475) (3,337,091) — (17,856,503) (6,815,818) (28,105,887) (2,258,903)<br />
Proceeds from sale <strong>of</strong> capital assets — — — 154,683 — 154,683 29,914<br />
Reduction in long-term obligations — (1,654,682) — — (256,632) (1,911,314) —<br />
Interest paid on long-term obligations — (1,063,907) (486,954) — (73,582) (1,624,443) —<br />
Net cash provided by (used in) capital<br />
and related financing activities (96,475) (6,055,680) (486,954) 7,907,338 (7,146,032) (5,877,803) (2,228,989)<br />
Cash flows from investing activities – interest received<br />
on investments 127,238 264,450 7,633 207,473 347,368 954,162 745,242<br />
Net cash provided by investing activities 127,238 264,450 7,633 207,473 347,368 954,162 745,242<br />
Net increase (decrease) in cash and<br />
cash equivalents (324,826) 4,398,802 2,730,442 7,361,592 (1,920,237) 12,245,773 1,297,158<br />
Cash and cash equivalents at beginning <strong>of</strong> year 11,400,137 26,539,945 1,086,002 17,934,137 36,658,627 93,618,848 81,863,253<br />
Cash and cash equivalents at end <strong>of</strong> year $ 11,075,311 30,938,747 3,816,444 25,295,729 34,738,390 105,864,621 83,160,411<br />
Cash and investments $ 2,440,342 27,312,934 3,436,499 14,199,397 31,993,520 79,382,692 83,160,411<br />
Restricted cash and investments 8,634,969 3,625,813 379,945 11,096,332 2,744,870 26,481,929 —<br />
Total cash and cash equivalents $ 11,075,311 30,938,747 3,816,444 25,295,729 34,738,390 105,864,621 83,160,411<br />
(Continued)<br />
36
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Cash Flows<br />
Proprietary Funds<br />
For the fiscal year ended June 30, 2012<br />
Resource<br />
Recovery<br />
and Recycling Wastewater Airport<br />
Big Blue<br />
Bus<br />
Nonmajor<br />
enterprise<br />
funds<br />
Total<br />
enterprise<br />
funds<br />
Total internal<br />
service funds<br />
Reconciliation <strong>of</strong> operating income (loss) to net<br />
cash provided by (used in) operating activities:<br />
Operating income (loss) $ (1,519,067) 2,696,622 (827,914) (62,116,669) (524,905) (62,291,933) (3,950,337)<br />
Adjustments to reconcile operating income (loss) to<br />
net cash provided by (used in) operating activities:<br />
Add depreciation 8,643 6,317,129 426,563 13,310,913 2,514,528 22,577,776 3,553,741<br />
Add amortization — 214,548 — — — 214,548 —<br />
Change in assets and liabilities:<br />
(Increase) decrease in accounts receivable (128,486) (210,930) 36,520 5,918,508 (1,259,953) 4,355,659 55,909<br />
Decrease (increase) in prepaids 6,639 2,778 1,039 (28,696) 9,378 (8,862) 19,814<br />
Decrease in inventory — — — 116,646 428,649 545,295 25,599<br />
Increase (decrease) in accounts payable 408,704 115,415 (112,974) (778,836) 806,428 438,737 23,439<br />
Increase in deposits 921,424 — 13,105 7,495 337,110 1,279,134 —<br />
Increase (decrease) in contracts payable — (3,335) — 175,292 45,435 217,392 —<br />
Increase in unearned revenue — — — 733,152 — 733,152 —<br />
Increase (decrease) in accrued liabilities 161,655 28,578 37,872 663,993 254,522 1,146,620 (143,031)<br />
Increase in claims payable — — — — — — 3,240,009<br />
Increase (decrease) in noncurrent accrued liabilities 7,940 7,058 (46,979) (237,082) (103,468) (372,531) —<br />
Other nonoperating revenue received 584,595 767,356 145,928 2,346,750 1,251,621 5,096,250 83,399<br />
Total adjustments 1,971,114 7,238,597 501,074 22,228,135 4,284,250 36,223,170 6,858,879<br />
Net cash provided by (used in)<br />
operating activities $ 452,047 9,935,219 (326,840) (39,888,534) 3,759,345 (26,068,763) 2,908,542<br />
1) The $4.5 million debt owed to the General fund by the Cemetery was forgiven.<br />
2) The <strong>City</strong> issued Wastewater Refunding Revenue bonds to refund debt issued in 1993. The $9,904,006 proceeds were deposited<br />
immediately into an irrevocable trust for the defeasance <strong>of</strong> $9,670,000 <strong>of</strong> outstanding revenue bond principal and $192,484 <strong>of</strong> interest.<br />
37
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38
CITY OF SANTA MONICA, CALIFORNIA<br />
Fiduciary Fund Financial Statements<br />
Private-Purpose Trust Fund is custodial in nature and used to distribute the assets <strong>of</strong> the dissolved<br />
Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> to the affected tax entities after the payment <strong>of</strong><br />
enforceable obligations. The Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> was dissolved on<br />
February 1, 2012.<br />
Agency Funds are custodial in nature and used to receive and disburse funds for an entity/individual,<br />
which is not part <strong>of</strong> the <strong>City</strong>.<br />
39
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Fiduciary Net Assets<br />
Fiduciary Funds<br />
June 30, 2012<br />
Total<br />
Private-Purpose<br />
Trust Fund<br />
Total<br />
Agency<br />
Funds<br />
ASSETS<br />
Cash and investments (note 5) $ 23,591,249<br />
—<br />
Restricted cash and investments (note 5) — 6,705,109<br />
Restricted cash with fiscal agent (note 5) 10,424,107 —<br />
Accounts receivable — 85,387<br />
Due from <strong>City</strong> 36,800,358 —<br />
Bond issuance costs, net 1,614,287 —<br />
Total assets 72,430,001 6,790,496<br />
LIABILITIES<br />
Accounts payable and accrued liabilities 9,696 6,790,496<br />
Interest payable 5,626,673 —<br />
Due to the <strong>City</strong> 59,216 —<br />
Due to other governments 36,710,259 —<br />
Long-term liabilities<br />
Promissory Notes payable to the <strong>City</strong> due within one year 2,700,743 —<br />
Promissory Notes payable to the <strong>City</strong> due in more than one year 27,704,760 —<br />
Due within one year 108,969,284 —<br />
Due in more than one year 140,311,951 —<br />
Total liabilities 322,092,582 6,790,496<br />
NET ASSETS (DEFICIT)<br />
Total net assets (deficit) held in trust for dissolution $ (249,662,581)<br />
<strong>of</strong> Former Redevelopment Agency<br />
See accompanying notes to basic financial statements.<br />
40
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Revenues, Expenses and Changes in Fiduciary Net Assets<br />
Fiduciary Fund<br />
For the five months ended June 30, 2012<br />
Additions:<br />
Property tax distribution $ 25,504,443<br />
Other revenue 15<br />
Total additions 25,504,458<br />
Deductions:<br />
Private-Purpose<br />
Trust Fund<br />
Project expenses 265,451<br />
Due diligence accrual 12,518,742<br />
Loss on sale <strong>of</strong> investments 45,698<br />
Interest expense 7,001,594<br />
Total deductions 19,831,485<br />
Extraordinary item:<br />
Assumption <strong>of</strong> the net liabilities <strong>of</strong> the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (261,255,080)<br />
Transfer from the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> 5,919,526<br />
Change in net assets (249,662,581)<br />
Net assets at beginning <strong>of</strong> year —<br />
Net assets (deficit) at end <strong>of</strong> year $ (249,662,581)<br />
See accompanying notes to basic financial statements.<br />
41
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42
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements<br />
For the fiscal year ended June 30, 2012<br />
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES<br />
A. THE REPORTING ENTITY<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California (<strong>City</strong>) was incorporated November 30, 1886. The <strong>City</strong><br />
operates under a Council-Manager form <strong>of</strong> government and provides traditional municipal<br />
services as authorized by its charter as well as various enterprise services. As required by<br />
accounting principles generally accepted in the United States <strong>of</strong> America (GAAP), the<br />
accompanying basic financial statements present the activities <strong>of</strong> the <strong>City</strong> and its component units.<br />
The component units discussed below are included in the <strong>City</strong>’s reporting entity because <strong>of</strong> the<br />
significance <strong>of</strong> their operations or financial relationships with the <strong>City</strong>.<br />
As required by GAAP, these basic financial statements present the <strong>City</strong> and its component units,<br />
entities for which the <strong>City</strong> is considered to be financially accountable. The following entities are<br />
reported as blended component units because they have substantively the same governing board as<br />
the primary government.<br />
Blended component units, although legally separate entities are, in substance, part <strong>of</strong> the <strong>City</strong>’s<br />
operations and data from these units are combined with data <strong>of</strong> the <strong>City</strong>. Additional detailed<br />
information and/or separately issued financial statements for these component units can be<br />
obtained from the <strong>City</strong>’s Director <strong>of</strong> Finance.<br />
The Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> was established by the <strong>City</strong> <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong> <strong>City</strong> Council in 1957 pursuant to the Community Redevelopment Law <strong>of</strong> California to<br />
eliminate blight and to promote economic revitalization within designated project areas <strong>of</strong> the<br />
<strong>City</strong>. The California Supreme Court upheld Assembly Bill 1X26 to dissolve all redevelopment<br />
agencies in the State <strong>of</strong> California on February 1, 2012. <strong>City</strong> was designated the Successor<br />
Agency to be responsible to make payments and perform existing obligations <strong>of</strong> the former<br />
Redevelopment Agency. The financial statements include seven months’ activities <strong>of</strong> the<br />
redevelopment agency. The Successor Agency is presented as a private-purpose trust fund<br />
beginning on February 1, 2012.<br />
The Parking Authority <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (Authority) was established by the <strong>City</strong> in<br />
1950 and maintains and operates parking lots and parking structures.<br />
The Housing Authority <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (Housing Authority) was established by the<br />
<strong>City</strong> in 1975 to address unsanitary and unsafe inhabited dwelling accommodations and the<br />
shortage <strong>of</strong> affordable safe and sanitary dwelling accommodations for persons with low incomes.<br />
Since January 1, 1989, the Housing Authority has administered the Section 8 Housing Assistance<br />
Payments Program funded by the United States Department <strong>of</strong> Housing and Urban Development<br />
on behalf <strong>of</strong> the <strong>City</strong>.<br />
Following are brief descriptions <strong>of</strong> organizations created in 1984 as nonpr<strong>of</strong>it public benefit<br />
corporations. These basic financial statements do not present these entities for which the <strong>City</strong> may<br />
meet criteria for discrete presentation because the economic resources received or held by an<br />
individual organization are not significant to the primary government. Each <strong>of</strong> the governing<br />
bodies acts on behalf <strong>of</strong> the <strong>City</strong> through members appointed by the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> <strong>City</strong><br />
Council for the benefit <strong>of</strong> the citizens <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. Separate financial statements for each can<br />
be obtained from the <strong>City</strong>’s Director <strong>of</strong> Finance.<br />
43
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
The Pier Restoration Corporation maintains and operates the public educational and recreational<br />
facility in the <strong>City</strong> commonly known as the <strong>Santa</strong> <strong>Monica</strong> Pier.<br />
The Downtown <strong>Santa</strong> <strong>Monica</strong>, formerly Bayside District Corporation and Third Street<br />
Development Corporation, combats community deterioration by developing and improving the<br />
aging areas in and around the <strong>City</strong>’s central business district and coordinating public and private<br />
sector activities.<br />
The <strong>Santa</strong> <strong>Monica</strong> Arts Foundation promotes the arts by raising funds to finance art programs. On<br />
June 8, 1990, the <strong>City</strong> Council merged the <strong>City</strong>’s Arts Commission with the <strong>Santa</strong> <strong>Monica</strong> Arts<br />
Foundation.<br />
B. BASIC FINANCIAL STATEMENTS<br />
Basic financial statements consist <strong>of</strong> the following:<br />
• Government-wide financial statements,<br />
• Fund financial statements, and<br />
• Notes to the basic financial statements.<br />
The government-wide financial statements consist <strong>of</strong> the statement <strong>of</strong> net assets and the statement<br />
<strong>of</strong> activities and report information on all <strong>of</strong> the non-fiduciary activities <strong>of</strong> the primary government<br />
and its component units. As a general rule, the effect <strong>of</strong> interfund activity has been eliminated<br />
from the government-wide financial statements. All internal balances in the statement <strong>of</strong> net<br />
assets have been eliminated, with the exception <strong>of</strong> those representing balances between the<br />
governmental activities and the business-type activities, which are presented as internal balances<br />
and eliminated in the total government column. In the statement <strong>of</strong> activities, internal service fund<br />
transactions have been eliminated; however, those transactions between governmental and<br />
business-type activities have not been eliminated. Exceptions to this general rule are charges<br />
between the <strong>City</strong>’s Water Fund and various other functions <strong>of</strong> the government. Elimination <strong>of</strong><br />
these charges would distort the direct costs and program revenues reported for the various<br />
functions concerned. Governmental activities, which normally are supported by taxes and<br />
intergovernmental revenues, are reported separately from business-type activities, which rely to a<br />
significant extent on fees and charges for support.<br />
Both <strong>of</strong> the government-wide financial statements distinguish functions <strong>of</strong> the <strong>City</strong> that are<br />
principally supported by taxes and intergovernmental revenues (governmental activities) from<br />
other functions that are intended to recover all or a significant portion <strong>of</strong> their costs through user<br />
fees and charges (business-type activities). The governmental activities <strong>of</strong> the <strong>City</strong> include public<br />
safety (police and fire), streets, public improvements, library, cultural, recreation and parks,<br />
planning and zoning, housing and community development and general administrative support<br />
services. The business-type activities <strong>of</strong> the <strong>City</strong> include water, wastewater, storm water, resource<br />
recovery and recycling, pier, civic auditorium, airport, special aviation services, cemetery, bus<br />
lines, and parking structures and lots.<br />
The statement <strong>of</strong> activities demonstrates the degree to which the direct and indirect expenses <strong>of</strong> a<br />
given function are <strong>of</strong>fset by program revenues. Direct expenses are those that are clearly<br />
identifiable with a specific function or segment. Indirect expenses are allocated based on the<br />
annual cost allocation plan. Program revenues include: 1) charges to customers or applicants who<br />
44
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
purchase, use, or directly benefit from goods, services, or privileges provided by a given function<br />
or segment, and 2) grants and contributions, including special assessments that are restricted to<br />
meeting the operational or capital requirements <strong>of</strong> a particular function. Taxes and other items not<br />
properly included among program revenues are reported instead as general revenues.<br />
Separate fund financial statements are provided for governmental funds, proprietary funds and<br />
fiduciary funds, even though the latter are excluded from the government-wide financial<br />
statements. Major individual governmental funds and major individual enterprise funds are<br />
reported as separate columns in the fund financial statements.<br />
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT<br />
PRESENTATION<br />
The government-wide financial statements are reported using the economic resources<br />
measurement focus and the accrual basis <strong>of</strong> accounting, as are the proprietary and fiduciary funds<br />
financial statements. Agency funds do not have a measurement focus. Revenues are recorded<br />
when earned and expenses are recorded when a liability is incurred, regardless <strong>of</strong> the timing <strong>of</strong><br />
related cash flows.<br />
Governmental funds financial statements are reported using the current financial resources<br />
measurement focus and the modified accrual basis <strong>of</strong> accounting. Revenues are recognized as<br />
soon as they are both measurable and available. Revenues are considered to be available when<br />
they are collectible within the current period or soon enough thereafter to pay liabilities <strong>of</strong> the<br />
current period. The <strong>City</strong> in general considers revenues available if they are collected within 60<br />
days. Additionally, grants and similar items are recognized as revenue as soon as all eligibility<br />
requirements have been met. Expenditures are recorded when the related fund liability is incurred,<br />
except for unmatured interest on general long-term debt, which is recognized when due, and<br />
certain compensated absences and claims and judgments, which are recognized when payment is<br />
due.<br />
Property taxes, sales taxes, franchise taxes, licenses, interest, special assessments, charges for<br />
services and other miscellaneous revenue are all considered to be susceptible to accrual and have<br />
been recognized as revenue in the current fiscal period. Entitlements and shared revenues are<br />
recorded at the time <strong>of</strong> receipt or earlier if susceptible to accrual criteria are met. Expendituredriven<br />
grants are recognized as revenue when the qualifying expenditures have been incurred, all<br />
other eligibility requirements have been met and are recorded at the time <strong>of</strong> receipt or earlier, and<br />
the susceptible to accrual criteria are met. All other revenue items are considered to be<br />
measurable and available only when cash is received by the government.<br />
The accounts <strong>of</strong> the <strong>City</strong> are organized on the basis <strong>of</strong> funds. A fund is an independent fiscal and<br />
accounting entity with a self-balancing set <strong>of</strong> accounts. Fund accounting segregates funds<br />
according to their intended purpose and is used to aid management in demonstrating compliance<br />
with finance-related legal and contractual provisions. The minimum number <strong>of</strong> funds is<br />
maintained consistent with legal and managerial requirements.<br />
45
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
The <strong>City</strong> reports the following major governmental funds:<br />
The General Fund is the <strong>City</strong>’s primary operating fund. It accounts for all the financial resources<br />
and the legally authorized activities <strong>of</strong> the <strong>City</strong>, except those required to be accounted for in other<br />
specialized funds.<br />
The Special Revenue Source Fund (Capital Projects Fund type) accounts for receipt and<br />
expenditure <strong>of</strong> monies restricted or committed for specific uses.<br />
The Earthquake Redevelopment Project Fund (Capital Projects Fund type) accounts for<br />
activities <strong>of</strong> the earthquake redevelopment project area <strong>of</strong> the Redevelopment Agency <strong>of</strong> the <strong>City</strong><br />
<strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. For the dissolution <strong>of</strong> the Redevelopment Agency, the <strong>City</strong> elected to serve as<br />
the Successor Agency to the Redevelopment Agency. The assets and liabilities <strong>of</strong> the former<br />
redevelopment agency as <strong>of</strong> February 1, 2012 were transferred from a governmental fund <strong>of</strong> the<br />
<strong>City</strong> to a Fiduciary Fund.<br />
The <strong>City</strong> reports the following major Enterprise funds:<br />
The Resource Recovery and Recycling Fund accounts for the activities <strong>of</strong> the <strong>City</strong>’s refuse<br />
collection, street sweeping and cleaning, and recycling programs.<br />
The Wastewater Fund accounts for the activities <strong>of</strong> maintaining sanitary sewer and storm drain<br />
systems within the <strong>City</strong>.<br />
The Airport Fund accounts for the activities <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal Airport.<br />
The Big Blue Bus Fund accounts for the activities <strong>of</strong> the <strong>City</strong>’s municipal bus lines.<br />
Additionally, the <strong>City</strong> reports the following fund types:<br />
Capital Projects Funds account for and report financial resources that are restricted, committed,<br />
or assigned to expenditure for capital outlays, including the acquisition or construction <strong>of</strong> capital<br />
facilities and other capital assets.<br />
Debt Service Funds account for and report financial resources that are restricted, committed, or<br />
assigned to expenditure for principal and interest.<br />
Permanent Funds account for resources that are legally restricted to the extent that only earnings,<br />
not principal, may be used for purposes that support specific programs.<br />
Internal Service Funds account for vehicle operations, risk management, and information<br />
technology and communications operations that provide services to other departments <strong>of</strong> the <strong>City</strong><br />
on a cost reimbursement basis.<br />
Fiduciary Funds consist <strong>of</strong> a Private-purpose Trust fund and Agency fund. The Private-purpose<br />
Trust fund is established by the <strong>City</strong> to succeed the redevelopment agency. The <strong>City</strong> serves as a<br />
custodian for the assets <strong>of</strong> the dissolved redevelopment agency pending distribution to the affected<br />
tax entities after the payment <strong>of</strong> enforceable obligations. The Agency funds account for assets<br />
held by the <strong>City</strong> as a trustee or as an agent for individuals or other government units. Agency<br />
46
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
funds are custodial in nature and do not involve measurement <strong>of</strong> results <strong>of</strong> operations. Such funds<br />
are unlike all other types <strong>of</strong> funds, reporting only assets and liabilities. These funds account for<br />
assets held by the <strong>City</strong> in an agency capacity for individuals or other governmental units,<br />
including development fees collected on behalf <strong>of</strong> the school district, various employee payroll<br />
deductions that will be remitted to various agencies and other assets held by the <strong>City</strong> in an agency<br />
capacity.<br />
Business-type activities and enterprise funds have elected not to apply Financial Accounting<br />
Standards Board (FASB) Statements and interpretations issued after November 30, 1989. The<br />
governmental activities, business-type activities and proprietary funds apply all applicable GASB<br />
pronouncements as well as statements and interpretations <strong>of</strong> FASB, the Accounting Principles<br />
Board Opinions and Accounting Research Bulletins <strong>of</strong> the Committee on Accounting Procedure<br />
issued on or before November 30, 1989, unless those pronouncements conflict with or contradict<br />
GASB pronouncements.<br />
Proprietary funds distinguish operating revenues and expenses from nonoperating items.<br />
Operating revenues and expenses generally result from providing services and producing and<br />
delivering goods in connection with a proprietary fund's principal ongoing operations. The<br />
principal operating revenues <strong>of</strong> the proprietary funds are charges to customers for sales and<br />
services. Operating expenses for proprietary funds include the cost <strong>of</strong> sales and services,<br />
administrative expenses, and depreciation on capital assets. All revenues and expenses not<br />
meeting this definition are reported as nonoperating revenues and expenses.<br />
When both restricted and unrestricted resources are available for use, it is the <strong>City</strong>'s policy to use<br />
restricted resources first, and then unrestricted resources as they are needed. In circumstances when<br />
an expenditure is made for a purpose for which amounts are available in multiple fund balance<br />
classifications, fund balance is depleted in the order <strong>of</strong> restricted, committed, assigned, and<br />
unassigned.<br />
D. ASSETS, LIABILITIES, NET ASSETS OR EQUITY<br />
Cash and Investments<br />
In order to maximize the flexibility <strong>of</strong> its investment program and to aid in cash budgeting, the<br />
<strong>City</strong> pools the cash <strong>of</strong> all funds, except for monies deposited with fiscal and escrow agents in<br />
accordance with related bond indentures and agreements. The cash and investments balance in<br />
each fund represents that fund's equity share <strong>of</strong> the <strong>City</strong>'s cash and investment pool. As the <strong>City</strong><br />
places no restrictions on the deposit or withdrawal <strong>of</strong> its equity from the pool by a particular fund,<br />
the pool operates like a demand deposit account for the participating funds.<br />
Interest income earned on pooled cash and investments is allocated quarterly to the various funds<br />
based on quarter-end balances and is adjusted at year-end. Interest income on restricted cash and<br />
investments with fiscal agents is credited directly to the related fund.<br />
The <strong>City</strong>'s investments are carried at fair value, except for guaranteed investment contracts, which<br />
are carried at cost because they are not transferable and they have terms that are not affected by<br />
changes in market interest rates. The fair value <strong>of</strong> equity and debt securities is determined based<br />
on sales prices or bid-and-asked quotations from Securities Exchange Commission (SEC)<br />
registered securities exchanges or National Association <strong>of</strong> Securities Dealers Automated<br />
47
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Quotations (NASDAQ) dealers. The fair value <strong>of</strong> the <strong>City</strong>'s share <strong>of</strong> Local Agency Investment<br />
Fund (LAIF) is reported to the <strong>City</strong> on a quarterly basis. LAIF operates in accordance with laws<br />
and regulations <strong>of</strong> the State <strong>of</strong> California. The reported value <strong>of</strong> the pool is the same as the fair<br />
value <strong>of</strong> pool shares. Changes in fair value are allocated to each participating fund on an annual<br />
basis.<br />
For purposes <strong>of</strong> the statement <strong>of</strong> cash flows, the <strong>City</strong> has defined cash and cash equivalents to be<br />
change and petty cash funds, equity in the <strong>City</strong>'s cash and investment pool, and restricted, nonpooled<br />
investments with initial maturities <strong>of</strong> three months or less.<br />
Receivables and Payables<br />
Activity between funds that are representative <strong>of</strong> lending/borrowing arrangements outstanding at<br />
the end <strong>of</strong> the fiscal year are referred to as interfund receivables/interfund payables, i.e., due<br />
to/due from other funds, the current portion <strong>of</strong> interfund loans or advances to/from other funds, the<br />
non-current portion <strong>of</strong> interfund loans. Any residual balances outstanding between the<br />
governmental activities and the business-type activities are reported in the government-wide<br />
financial statements as internal balances.<br />
Advances between funds, as reported in the fund financial statements, are <strong>of</strong>fset by nonspendable<br />
fund balance in the applicable governmental funds to indicate that they are not available for<br />
appropriation and are not expendable available financial resources.<br />
All trade receivables are shown net <strong>of</strong> an allowance for uncollectible accounts and estimated<br />
refunds due. As <strong>of</strong> June 30, 2012, the allowance for uncollectible accounts for governmental and<br />
business-type activities is $396,563 and $225,382, respectively.<br />
Unbilled service receivables are accrued for at year-end.<br />
Property Taxes<br />
Assessed property values are determined on an annual basis for the period July 1 to June 30 by the<br />
Los Angeles County Assessor as <strong>of</strong> January 1. Article XIIIA <strong>of</strong> the State Constitution<br />
(Proposition 13, approved by voters in June 1978) limits the real property tax rate to 1% <strong>of</strong> the full<br />
market cash value plus rates imposed to fund indebtedness approved by the voters. Locally<br />
assessed property is appraised at the 1975-76 full cash value, the base year value, and is adjusted<br />
each year after 1975 by the change in the consumer price index, not to exceed an increase <strong>of</strong> 2%.<br />
Property is reappraised to current full value upon either a change in ownership or new<br />
construction. If property values decline below the base year value, the value is adjusted to reflect<br />
the lower value. Taxes are levied annually in September and become a lien on real property at<br />
January 1. Taxes are due November 1 and February 1 and are delinquent if not paid by December<br />
10 and April 10, respectively, at which time applicable penalties and interest are assessed.<br />
Inventory and Prepaid Items<br />
All materials and supplies inventory is valued at cost using the average cost method. Inventory in<br />
the General Fund is recorded as expenditures when consumed rather than when purchased.<br />
48
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded<br />
as prepaid items in both government-wide and fund financial statements.<br />
Restricted Assets<br />
Certain proceeds <strong>of</strong> the <strong>City</strong>'s bonds, as well as certain resources set aside for their repayment, are<br />
classified as restricted assets on the statement <strong>of</strong> net assets because they are maintained in separate<br />
bank accounts and their use is limited by applicable bond covenants.<br />
In the absence <strong>of</strong> specific statutory provisions governing the issuance <strong>of</strong> bonds, certificates or<br />
leases, these bond monies may be invested in accordance with the ordinance, resolutions or<br />
indentures specifying the types <strong>of</strong> investments its trustees or fiscal agents may make. These<br />
ordinances, resolutions and indentures are generally more restrictive than the <strong>City</strong>'s general<br />
investment policy. In no instance have additional types <strong>of</strong> investments been authorized that are<br />
not permitted by the <strong>City</strong>'s general investment policy.<br />
Capital Assets<br />
Capital assets, which include land, buildings and improvements, equipment, intangibles, utility<br />
systems and infrastructure assets (e.g., roads, sidewalks, curbs and gutters and similar items), are<br />
reported in the applicable governmental or business-type activities columns in the governmentwide<br />
financial statements. Capital assets other than buildings, improvements, and infrastructure<br />
are defined by the <strong>City</strong> as assets with an initial individual cost <strong>of</strong> $50,000 or more and an<br />
estimated useful life <strong>of</strong> more than one year except for the Big Blue Bus fund, which follows transit<br />
funding guidelines by capitalizing any expenditure, which is funded by capital grant subsidies not<br />
related to bus repairs and maintenance. The <strong>City</strong> defines buildings, improvements other than<br />
buildings, and infrastructure as assets with an individual cost <strong>of</strong> $100,000 or more and an<br />
estimated useful life <strong>of</strong> more than one year. Such assets are recorded at historical cost. Donated<br />
capital assets are recorded at estimated fair value at the date <strong>of</strong> donation. The cost <strong>of</strong> normal<br />
maintenance and repairs that do not add to the value <strong>of</strong> the asset or materially extend assets lives<br />
are not capitalized.<br />
Major outlays for capital assets and improvements are capitalized as projects are constructed.<br />
Interest incurred, net <strong>of</strong> interest earned on unspent proceeds <strong>of</strong> tax-exempt borrowings, during the<br />
construction phase <strong>of</strong> capital assets <strong>of</strong> business-type and enterprise funds activities is included as<br />
part <strong>of</strong> the capitalized value <strong>of</strong> the assets constructed. No interest was capitalized during the year<br />
ended June 30, 2012.<br />
Capital assets <strong>of</strong> the <strong>City</strong> are depreciated using a straight-line method, with a mid-year convention<br />
(only half a year’s depreciation is recorded in the first and last year <strong>of</strong> the asset) over the following<br />
estimated useful lives:<br />
Assets<br />
Years<br />
Buildings 5 to 85<br />
Improvements other than buildings 2 to 50<br />
Infrastructure 15 to 75<br />
Utility systems<br />
Intangibles<br />
20<br />
40 to 100<br />
Machinery and equipment 2 to 30<br />
49
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
The <strong>City</strong> has elected not to capitalize its collection <strong>of</strong> artwork. GASB 34 waives the requirement<br />
for artwork capitalization if the collection meets all the following conditions:<br />
• The collection is held for reasons other than financial gain.<br />
• The collection is protected, kept unencumbered, cared for, and preserved.<br />
• The collection is subject to an organizational policy requiring that the proceeds from sales <strong>of</strong><br />
collection items be used to acquire other items for collections.<br />
The <strong>City</strong>’s artwork collection meets the above criteria and therefore qualifies for the exemption<br />
from the capitalization requirement. The collection includes both permanent and portable<br />
artworks, artworks integrated into overall projects, murals, and stand-alone permanently installed<br />
paintings and sculptures, art integrated into the design <strong>of</strong> public works projects (not stand-alone),<br />
and a contemporary collection <strong>of</strong> almost 100 portable artworks, which are on display in public<br />
areas <strong>of</strong> <strong>City</strong> facilities.<br />
Lease Obligations<br />
The <strong>City</strong> leases various assets under operating lease agreements.<br />
Compensated Absences<br />
It is the <strong>City</strong>'s policy to permit employees to accumulate earned but unused vacation and sick<br />
leave benefits up to a maximum determined by bargaining unit agreements. Employees are paid<br />
100% <strong>of</strong> their accumulated vacation when they terminate employment for any reason. All<br />
vacation is accrued when incurred in the government-wide and proprietary fund financial<br />
statements. A liability is reported in the governmental funds only if they have matured, for<br />
example, as a result <strong>of</strong> employee resignations or retirements. Additionally, employees <strong>of</strong> the<br />
United Transportation Union are able to exchange unused sick days balances for equal dollars <strong>of</strong><br />
medical insurance premiums. In order to qualify the employee must have 10 years <strong>of</strong> service at<br />
retirement and at least 50 days <strong>of</strong> unused sick leave.<br />
Long-Term Liabilities<br />
In the government-wide financial statements and proprietary funds financial statements, long-term<br />
debt and other long-term obligations are reported as liabilities in the applicable governmental<br />
activities, business-type activities, or proprietary fund type statement <strong>of</strong> net assets. Initial-issue<br />
bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life<br />
<strong>of</strong> the bonds using the straight-line method. The difference between the reacquisition price <strong>of</strong><br />
refunding bonds and the net carrying amount <strong>of</strong> refunded debt (deferred amount on refunding) is<br />
amortized over the shorter <strong>of</strong> the lives <strong>of</strong> the refunding debt or remaining life <strong>of</strong> the refunded debt.<br />
Bonds payable are reported net <strong>of</strong> the unamortized portion <strong>of</strong> applicable premium, discount or<br />
deferred amount on refunding. Bond issuance costs, including underwriters' discount, are reported<br />
as deferred bond issuance costs. Amortization <strong>of</strong> bond premiums or discounts, issuance costs and<br />
deferred amounts on refunding are included in interest expense.<br />
In the governmental funds financial statements, bond premiums, discounts and issuance costs are<br />
recognized during the period issued. The face amount <strong>of</strong> debt issued is reported as other financing<br />
sources. Premiums received are reported as other financing sources, while discounts are reported<br />
as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds<br />
50
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
received, are reported as debt service expenditures. Interest and principal payments are reported as<br />
debt service expenditures.<br />
Net Assets and Fund Equity<br />
In the government-wide financial statements and proprietary funds financial statements, net assets<br />
are reported in three categories: net assets invested in capital assets, net <strong>of</strong> related debt, restricted<br />
net assets and unrestricted net assets. Net assets invested in capital assets, net <strong>of</strong> related debt<br />
represents capital assets less accumulated depreciation less outstanding principal <strong>of</strong> related debt.<br />
Net assets invested in capital assets, net <strong>of</strong> related debt does not include the unspent proceeds <strong>of</strong><br />
capital debt. Restricted net assets represent net assets restricted by parties outside <strong>of</strong> the <strong>City</strong><br />
(such as creditors, grantors, contributors, laws and regulations <strong>of</strong> other governments) and include<br />
unspent proceeds <strong>of</strong> bonds issued to acquire or construct capital assets. The nonexpendable<br />
portion <strong>of</strong> permanent funds is reported as a component <strong>of</strong> restricted net assets. The <strong>City</strong>'s other<br />
restricted net assets are temporarily restricted (ultimately expendable) assets. All other net assets<br />
are considered unrestricted.<br />
As prescribed by GASB Statement No. 54, governmental funds report fund balance in<br />
classifications based primarily on the extent to which the <strong>City</strong> is bound to honor constraints on the<br />
specific purposes for which amounts in the funds can be spent based on the adopted <strong>City</strong> Council<br />
policy on June 21, 2011. As <strong>of</strong> June 30, 2012, fund balance for governmental funds are made up<br />
<strong>of</strong> nonspendable, restricted, committed, assigned and unassigned.<br />
In the fund financial statements, governmental funds report nonspendable fund balance for<br />
amounts that cannot be spent because they are either not in spendable form or legally or<br />
contractually required to be maintained intact. Restricted fund balance represents amounts that are<br />
restricted for specific purposes when constraints placed on the use <strong>of</strong> resources are either<br />
externally imposed by creditors, grantors, contributors, or laws or regulations <strong>of</strong> other<br />
governments; or imposed by law through constitutional provisions or enabling legislation.<br />
Amounts that can only be used for specific purposes pursuant to constraints imposed by ordinance<br />
<strong>of</strong> the government’s highest level <strong>of</strong> decision making authority, <strong>City</strong> Council, are reported as<br />
committed fund balance. Assigned fund balance are amounts that are constrained by the<br />
government’s intent by the governing body itself or a body or <strong>of</strong>ficial to which the governing body<br />
has delegated the authority to assign amounts to be used for specific purposes. The <strong>City</strong> Council on<br />
June 21, 2011 adopted resolution number 10583, which included the fiscal policies contained in<br />
the fund balance policies and has delegated this authority to the <strong>City</strong> Manager to assign fund<br />
balances. Unassigned fund balance represents fund balance that has not been restricted, committed,<br />
or assigned to specific purposes within the general fund. Unassigned fund balance can also be used<br />
in other governmental funds where the fund balance is negative, because a negative amount should<br />
not be reported for restricted, committed or assigned in any fund. When both restricted and<br />
unrestricted resources are available for use, it is the <strong>City</strong>’s policy to use restricted resources first,<br />
and then use unrestricted resources as needed. In circumstances when an expenditure is made for a<br />
purpose for which amounts are available in multiple fund balance classifications, fund balance is<br />
depleted in the order <strong>of</strong> restricted, committed, assigned, and unassigned.<br />
51
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Self-Insurance Program<br />
The <strong>City</strong> has self-insurance programs to provide for general liability, bus and automobile liability,<br />
and workers' compensation claims. These activities are accounted for in self-insurance internal<br />
service funds.<br />
Premiums are charged to individual funds and are designed to cover future expenses. The <strong>City</strong>'s<br />
Risk Manager oversees the self-insurance programs. It is his or her duty to ensure that programs<br />
are operated in accordance with <strong>City</strong> policies. The <strong>City</strong>’s Risk Manager also provides budget<br />
guidance and case reserves and claims analysis. It is the <strong>City</strong>'s intent to maintain cash reserves in<br />
the self-insurance funds equal to or greater than estimated losses.<br />
Use <strong>of</strong> Estimates<br />
The preparation <strong>of</strong> basic financial statements in conformance with GAAP requires management to<br />
make estimates and assumptions that affect the amounts reported in the basic financial statements<br />
and accompanying notes. Actual results may differ from those estimates.<br />
(2) BUDGETARY AND LEGAL COMPLIANCE<br />
The <strong>City</strong> Council is required to adopt an annual budget resolution by June 30 each fiscal year for the<br />
General Fund, each special revenue fund and each capital projects fund, except the Rent Control Fund<br />
and the Asset Seizure Fund. The legal level <strong>of</strong> budgetary control is by department. The <strong>City</strong> Council<br />
also approves annual operating budgets for the <strong>City</strong>’s proprietary and internal service funds to<br />
facilitate management evaluation and control.<br />
The budget is prepared on a non-GAAP budgetary basis, which considers encumbrances outstanding at<br />
year end as an expenditure <strong>of</strong> that year. Encumbrances outstanding at the beginning <strong>of</strong> a fiscal year,<br />
which were recognized as budgetary expenditures in the prior year, are recognized as GAAP-basis<br />
expenditures but not as budgetary expenditures unless re-appropriated. It is the <strong>City</strong>’s policy to only<br />
re-appropriate capital encumbrances and unencumbered balances <strong>of</strong> specific capital appropriations. In<br />
addition, capital leases are budgeted on a cash basis, whereas GAAP requires the full amount <strong>of</strong> the<br />
leased asset purchased to be shown as an expenditure <strong>of</strong> the current year. Appropriations in<br />
governmental funds outstanding at year end lapse, except for encumbered amounts, for which fund<br />
balances are restricted, committed or assigned at year-end for governmental funds.<br />
A Comprehensive Annual Financial Report Budget Supplement is prepared to reconcile<br />
expenditures/expenses at the legal level <strong>of</strong> control to the summarized amounts presented in the<br />
Comprehensive Annual Financial Report and can be obtained from the Finance Department.<br />
For the fiscal year ended June 30, 2012, expenditures exceeded appropriations in the Police<br />
Department <strong>of</strong> the General Fund, <strong>City</strong> Attorney <strong>of</strong> the General Fund, Other Community & Cultural<br />
Services <strong>of</strong> the General Fund, and Community & Cultural Services <strong>of</strong> the Special Revenue Source<br />
Fund.<br />
52
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
(3) RECONCILIATION OF FUND FINANCIAL STATEMENTS TO GOVERNMENT-WIDE<br />
FINANCIAL STATEMENTS<br />
Amounts reported for governmental activities in the government-wide statement <strong>of</strong> net assets are<br />
different from those reported for governmental funds in the funds balance sheet. The following<br />
provides a reconciliation <strong>of</strong> those differences:<br />
Total<br />
Assets<br />
Total governmental<br />
funds<br />
Long-term assets<br />
and liabilities (1)<br />
governmental<br />
activities internal<br />
service funds (2)<br />
Other<br />
adjustments and<br />
eliminations (3)<br />
Statement <strong>of</strong> net assets<br />
totals<br />
Cash and investments $ 514,751,907<br />
— 51,725,887 — 566,477,794<br />
Receivables (net, where applicable,<br />
<strong>of</strong> allowances for uncollectibles):<br />
Accounts 14,706,187 — 715 73,370,475 88,077,377<br />
Notes 107,987,656 — — — 107,987,656<br />
Property taxes 1,503,357 — — — 1,503,357<br />
Interest 964,105 — 116,351 — 1,080,456<br />
Other governments 4,256,380 — — — 4,256,380<br />
Internal balances — — 987,432 14,469,934 15,457,366<br />
Due from other funds 8,215,102 — — (8,215,102) —<br />
Due from Successor Agency 59,216 — — — 59,216<br />
Deposits 61,785 — — — 61,785<br />
Prepaids 232,445 — 9,525 — 241,970<br />
Cash with fiscal agent 50,820,984 — — — 50,820,984<br />
Advances to other funds 17,240,093 — — (17,240,093) —<br />
Advances to Successor Agency 30,405,503 — — — 30,405,503<br />
Bond issuance costs, net — 1,454,822 — — 1,454,822<br />
Capital assets, net — 770,732,111 546,268 — 771,278,379<br />
Total assets $ 751,204,720 772,186,933 53,386,178 62,385,214 1,639,163,045<br />
Liabilities and Fund Balances/Net Assets<br />
Liabilities:<br />
Accounts payable $ 15,873,345<br />
— 460,893 — 16,334,238<br />
Accrued liabilities 9,534,619 — 123,562 — 9,658,181<br />
Accrued interest payable — 1,191,785 — — 1,191,785<br />
Contracts payable (retained percentage) 2,248,933 — — — 2,248,933<br />
Due to other funds/Successor Agency 43,942,646 — — (7,142,288) 36,800,358<br />
Due to other governments 3,514 — — — 3,514<br />
Deferred revenue 78,180,599 — — (45,657,620) 32,522,979<br />
Deposits payable from restricted assets 1,095,500 — — — 1,095,500<br />
Pollution remediation obligation due within one year — 5,357,291 — — 5,357,291<br />
Pollution remediation obligation due in more than one year — 123,396,332 — — 123,396,332<br />
Compensated absences due within one year — 6,182,307 — — 6,182,307<br />
Compensated absences due in more than<br />
one year — 5,149,218 — — 5,149,218<br />
Claims payable due within one year — — 6,551,766 — 6,551,766<br />
Claims payable due in more than one year — — 22,473,475 — 22,473,475<br />
Long-term debt due within one year — 3,365,000 — — 3,365,000<br />
Long-term debt due in more than one year — 100,260,630 — — 100,260,630<br />
Accrued OPEB liability — 6,740,000 — — 6,740,000<br />
Advances from other funds 3,842,973 — — (3,842,973) —<br />
Total liabilities 154,722,129 251,642,563 29,609,696 (56,642,881) 379,331,507<br />
Total fund balances/net assets 596,482,591 520,544,370 23,776,482 119,028,095 1,259,831,538<br />
Total liabilities and fund balance/net assets $ 751,204,720 772,186,933 53,386,178 62,385,214 1,639,163,045<br />
53
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
1)<br />
Capital assets used in governmental activities are not current financial resources<br />
and, therefore, are not reported in the balance sheet. Capital assets <strong>of</strong> internal<br />
service funds <strong>of</strong> $546,268, net <strong>of</strong> accumulated depreciation, are not included in<br />
this amount.<br />
$ 1,075,554,352<br />
Less accumulated depreciation (304,822,241)<br />
770,732,111<br />
Bond issue costs to be amortized over the life <strong>of</strong> the debt 1,454,822<br />
Accrued liabilities, OPEB costs, are not due and payable in the current period (6,740,000)<br />
and therefore, are not reported in the balance sheet<br />
Long-term liabilities are not due and payable in the current period and,<br />
therefore, are not reported in the balance sheet.<br />
General obligation bonds (11,325,000)<br />
Revenue bonds (87,630,000)<br />
Loans payable (400,000)<br />
Deferred loss on refunding 497,330<br />
Accrued interest on long-term debt (1,191,785)<br />
Unamortized premium on long-term debt (4,777,551)<br />
Unamortized issue discount on long-term debt 9,591<br />
Employee compensated absences (11,331,525)<br />
Accrued pollution remediation costs (128,753,623)<br />
Total long-term liabilities (244,902,563)<br />
$ 520,544,370<br />
2)<br />
Internal service funds are used by management to charge the costs <strong>of</strong><br />
information technology and communications operations, self-insurance<br />
comprehensive, auto and workers' compensation to individual funds. The assets<br />
and liabilities <strong>of</strong> these internal service funds are included in the governmental<br />
activities on the statement <strong>of</strong> net assets.<br />
$<br />
22,789,050<br />
Adjustments for Internal Service Funds are necessary to "close" those funds by<br />
recording charges to and payments from business-type activities to completely<br />
cover the Internal Service Funds' costs for the year.<br />
$<br />
987,432<br />
23,776,482<br />
3) Other adjustments and eliminations:<br />
Other long-term assets are not available to pay for current period expenditures<br />
and, therefore, are deferred in the funds and recognized as revenue in the<br />
statement <strong>of</strong> activities.<br />
$<br />
$<br />
119,028,095<br />
119,028,095<br />
54
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Amounts reported for business-type activities in the government-wide statement <strong>of</strong> net assets are<br />
different from those reported for enterprise funds in the fund statement <strong>of</strong> net assets. The following<br />
provides a reconciliation <strong>of</strong> those differences:<br />
Assets<br />
Total business- Other<br />
Total type internal adjustments Statement <strong>of</strong><br />
enterprise service and net assets<br />
funds funds (1) eliminations totals<br />
Cash and investments $ 79,382,692 31,434,524 — 110,817,216<br />
Receivables (net, where applicable,<br />
<strong>of</strong> allowances for uncollectibles):<br />
Accounts 22,472,443 87 — 22,472,530<br />
Interest 233,406 65,097 — 298,503<br />
Internal balances — (987,432) (14,469,934) (15,457,366)<br />
Taxes — — — —<br />
Inventory 1,611,790 51,346 — 1,663,136<br />
Prepaids 101,508 — — 101,508<br />
Restricted cash and investments 26,481,929 — — 26,481,929<br />
Bond issuance costs, net 381,336 — — 381,336<br />
Capital assets, net 454,217,153 15,439,284 — 469,656,437<br />
Total assets $ 584,882,257 46,002,906 (14,469,934) 616,415,229<br />
Liabilities<br />
Accounts payable $ 4,303,620 189,512 — 4,493,132<br />
Accrued liabilities 6,805,484 284,547 (3,272,911) 3,817,120<br />
Accrued interest payable 245,331 — — 245,331<br />
Contracts payable (retained percentage) 535,634 — — 535,634<br />
Due to other funds 1,072,814 — (1,072,814) —<br />
Unearned revenue 1,051,201 — — 1,051,201<br />
Liabilities payable from restricted assets 10,017,699 — — 10,017,699<br />
Advances from other funds 13,397,120 — (13,397,120) —<br />
Compensated absences due within one year — — 2,172,739 2,172,739<br />
Compensated absences due in more than one year — — 1,100,172 1,100,172<br />
Claims payable due within one year — 1,524,563 — 1,524,563<br />
Claims payable due in more than one year — 1,188,493 — 1,188,493<br />
Long-term debt due within one year 1,963,305 — — 1,963,305<br />
Long-term debt due in more than one year 19,664,932 — — 19,664,932<br />
Total liabilities 59,057,140 3,187,115 (14,469,934) 47,774,321<br />
Net Assets<br />
$ 525,825,117 42,815,791 — 568,640,908<br />
1)<br />
Internal service funds are used by management to charge the costs <strong>of</strong> vehicle<br />
management, information technology and risk management to individual funds.<br />
The assets and liabilities <strong>of</strong> the vehicle management and self-insurance bus internal<br />
service funds are included in business-type activities in the statement <strong>of</strong> net assets.<br />
$ 43,803,223<br />
Adjustment for Internal Service Funds are necessary to "close" those funds for<br />
charges to and payments from participating governmental-type activities to<br />
completely cover the Internal Service Funds' costs for the year.<br />
$<br />
(987,432)<br />
55
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
(4) POLLUTION REMEDIATION<br />
The <strong>City</strong> follows the guidance <strong>of</strong> GASB Statement No. 49, Accounting and Financial Reporting for<br />
Pollution Remediation Obligations, establishing accounting and financial reporting standards for<br />
pollution (including contamination) remediation obligations, which are obligations to address the<br />
current or potential detrimental effects <strong>of</strong> existing pollution by participating in pollution remediation<br />
activities such as site assessments and cleanups.<br />
On December 1, 2006, the <strong>City</strong> amended a settlement agreement that it had entered into in 2004 with a<br />
consortium <strong>of</strong> oil companies in relation to methyl tertiary butyl ether (“MTBE”) contamination that<br />
had occurred at the <strong>City</strong>’s Charnock Well Field. The Charnock Well Field is used to supply drinking<br />
water to the <strong>City</strong>. The amended 2006 agreement called for the oil companies to pay the <strong>City</strong> $131.0<br />
million in exchange for the <strong>City</strong>'s agreement to treat to applicable drinking water standards any water<br />
produced from the Charnock Well Field, which contains MTBE, tertiary butyl alcohol (“tBA”) and<br />
related petroleum hydrocarbons. Prior to this amended 2006 agreement and under the terms <strong>of</strong> other<br />
settlement agreements with other companies, the <strong>City</strong> received an additional $141.0 million also<br />
related to MTBE contamination <strong>of</strong> the <strong>City</strong>'s Charnock Well Field. The <strong>City</strong> has received all <strong>of</strong> the<br />
proceeds from each <strong>of</strong> these agreements, including the amended 2006 agreement.<br />
To meet its Charnock Well Field water treatment obligation, the <strong>City</strong> has constructed and is operating<br />
a water treatment remediation plant using the proceeds <strong>of</strong> the 2006 and the other earlier settlements.<br />
The <strong>City</strong> measured the liability by the actual cost <strong>of</strong> construction/remediation contracts, which<br />
included a contingency <strong>of</strong> 10% for unforeseen costs and therefore, the <strong>City</strong>’s expected outlays were<br />
determined to be $85,481,000, which is the present value <strong>of</strong> the cost <strong>of</strong> the contracts plus the cost <strong>of</strong><br />
the plant operations.<br />
The pollution remediation expenditures have no future value once the remediation is complete;<br />
therefore the <strong>City</strong> has recorded these amounts as remediation liability and expense.<br />
Because the MTBE remediation is fully funded by settlement agreements whose proceeds have<br />
already been received, $85,481,000 was previously recognized as income during the FY 2008-09.<br />
On November 13, 2009, the <strong>City</strong> entered into a settlement and release agreement with The Gillette<br />
Company (Gillette), guaranteed by The Procter & Gamble Company, in relation to ground water<br />
contamination <strong>of</strong> the <strong>City</strong>’s Olympic Well Field. The Olympic Well Field is used to supply drinking<br />
water to the <strong>City</strong>. The agreement calls for Gillette to make payments to the <strong>City</strong> ranging from<br />
$150,000 to $11,183,175 annually, totaling $68,000,000 to be made over 30 years which included the<br />
<strong>City</strong> receiving title to property valued at $3,250,000. To date the <strong>City</strong> has received cash payments <strong>of</strong><br />
$30,729,575 which has been recorded as revenue in the fund financial statements. Under the<br />
agreement, the <strong>City</strong> has agreed to treat to applicable drinking water standards any water that it<br />
produces from the Olympic Well Field.<br />
The agreement also includes a provision that provides for Gillette to potentially share in the proceeds<br />
<strong>of</strong> settlement agreements, if any, that the <strong>City</strong> may receive from other parties related to their<br />
contamination <strong>of</strong> the Olympic Well Field. Under this sharing provision, in 2021 Gillette may recoup<br />
up to a maximum <strong>of</strong> $8,704,750 <strong>of</strong> the funds it pays to the <strong>City</strong> from the proceeds <strong>of</strong> these other<br />
settlement agreements.<br />
56
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
On May 15, 2012, the <strong>City</strong> entered into a settlement and release agreement with The Boeing Company<br />
(Boeing) also in relation to ground water contamination <strong>of</strong> the <strong>City</strong>’s Olympic Well Field. The<br />
agreement calls for Boeing to make payments to the <strong>City</strong> ranging from $150,000 to $5,000,000<br />
annually to be made over a ten year period, totaling $39,500,000. On December 12, 2012, the<br />
agreement was modified with $21,000,000 being due from Boeing in January 2013 and payments <strong>of</strong><br />
$3,670,000 being due from Boeing annually beginning in 2017 through 2021. The <strong>City</strong> received<br />
Boeing's payment <strong>of</strong> $21,000,000 on January 7, 2013. Under the agreement, the <strong>City</strong> has agreed to<br />
treat to applicable drinking water standards any water that it produces from the Olympic Well Field.<br />
To date, $150,000 has been recognized as income in the fund financial statements.<br />
Using the expected cash flow technique, the <strong>City</strong> has measured the potential water treatment liability<br />
under the Gillette and Boeing agreements by the anticipated cost <strong>of</strong> construction/remediation<br />
contracts, which include a contingency <strong>of</strong> 10% for unforeseen costs and therefore, the <strong>City</strong>’s expected<br />
outlays were determined to be up to $95,545,250, which is the anticipated value <strong>of</strong> the cost <strong>of</strong> the<br />
contracts plus the cost <strong>of</strong> the plant operations for the duration <strong>of</strong> remediation and decommissioning<br />
costs at the end <strong>of</strong> remediation.<br />
A total <strong>of</strong> $98,645,250 has been recognized as revenue and a non-current accrued pollution<br />
remediation liability <strong>of</strong> $104,250,000, which includes $8,704,750 due under the Gillette agreement,<br />
has been reported in the citywide financial statements.<br />
The pollution remediation expenditures related to the Olympic Well field have no future value once<br />
the remediation is complete; therefore, the <strong>City</strong> has recorded these amounts as remediation liability<br />
and expense.<br />
Additionally, the <strong>City</strong> engages in an ongoing program <strong>of</strong> pollution remediation related to its various<br />
properties. Two such sites are currently undergoing remediation in the form <strong>of</strong> either soil or vaporous<br />
contaminant removal or containment. By State law these occurrences are required to be reported to<br />
California Department <strong>of</strong> Health Services.<br />
The balance <strong>of</strong> the pollution remediation liability is $128,753,623 <strong>of</strong> which $5,357,291 is due within<br />
one year.<br />
57
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
(5) CASH AND INVESTMENTS<br />
Cash and investments as <strong>of</strong> June 30, 2012 are classified in the accompanying financial statements as<br />
follows:<br />
Statement <strong>of</strong> net assets:<br />
Cash and investments $ 448,982,460<br />
Restricted cash and investments 254,794,479<br />
Restricted cash and investments with fiscal agent 50,820,984<br />
Fiduciary funds:<br />
Cash and investments 23,591,249<br />
Restricted cash and investments 6,705,109<br />
Restricted cash and investments with fiscal agent 10,424,107<br />
Total cash and investments $ 795,318,388<br />
Cash and investments as <strong>of</strong> June 30, 2012 consist <strong>of</strong> the following:<br />
Cash on hand $ 54,422<br />
Deposits with financial institutions 29,227,235<br />
Investments 766,036,731<br />
Total cash and investments $ 795,318,388<br />
Investments Authorized by the California Government Code and the <strong>City</strong>’s Investment Policy<br />
The table below identifies the investment types that are authorized for the <strong>City</strong> by the California<br />
Government Code and the <strong>City</strong>’s investment policy. The table also identifies certain provisions <strong>of</strong> the<br />
California Government Code (or the <strong>City</strong>’s investment policy, if more restrictive) that address interest<br />
rate risk and concentration <strong>of</strong> credit risk. This table does not address investments <strong>of</strong> debt proceeds held<br />
by bond trustees that are governed by the provisions <strong>of</strong> debt agreements <strong>of</strong> the <strong>City</strong>, rather than the<br />
general provisions <strong>of</strong> the California Government Code or the <strong>City</strong>’s investment policy.<br />
Authorized *Maximum *Maximum<br />
Investment types by investment *Maximum percentage Investment<br />
authorized by state law policy maturity <strong>of</strong> portfolio in one issuer<br />
Local agency bonds Yes 5 years None None<br />
U.S. Treasury obligations Yes 5 years None None<br />
U.S. agency securities Yes 5 years None 50%<br />
State <strong>of</strong> California obligations Yes 5 years None None<br />
CA Local Agency obligations Yes 5 Years None None<br />
Banker's acceptances Yes 180 days 10% 10%<br />
Commercial paper Yes 270 days 15% 10%<br />
58
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Authorized *Maximum *Maximum<br />
Investment types by investment *Maximum percentage Investment<br />
authorized by state law policy maturity <strong>of</strong> portfolio in one issuer<br />
Negotiable certificates <strong>of</strong> deposit Yes 5 years 30% 10%<br />
Repurchase agreements Yes 1 year None None<br />
Reverse repurchase agreements Yes 92 days<br />
20% <strong>of</strong><br />
base value<br />
None<br />
Corporate medium-term notes Yes 5 years 30% None<br />
Mutual funds Yes N/A 20% 10%<br />
Money market mutual funds Yes N/A 20% 10%<br />
Mortgage pass-through securities Yes 5 years 20% None<br />
Time deposits Yes 5 years None None<br />
Collateralized certificates <strong>of</strong> deposit Yes 5 years None None<br />
County pooled investment funds Yes N/A None None<br />
Local Agency Investment Fund (LAIF) Yes N/A None None<br />
JPA pools (other investment pools) Yes N/A None None<br />
* Based on state law requirements or investment policy requirements, whichever is more restrictive.<br />
Investments Authorized by Debt Agreements<br />
Investments <strong>of</strong> debt proceeds held by bond trustees are governed by provisions <strong>of</strong> the debt agreements,<br />
rather than the general provisions <strong>of</strong> the California Government Code or the <strong>City</strong>’s investment policy.<br />
The table below identifies the investment types that are generally authorized for investments held by<br />
bond trustees. The table also identifies certain provisions <strong>of</strong> these debt agreements that address interest<br />
rate risk and concentration <strong>of</strong> credit risk.<br />
Maximum Maximum<br />
Authorized Maximum percentage Investment<br />
investment type maturity allowed in one issuer<br />
U.S. Treasury obligations None None None<br />
Federal Housing Administration debentures None None None<br />
U.S. agency securities None None None<br />
Time deposits None None None<br />
Unsecured certificates <strong>of</strong> deposit 180 days None None<br />
Banker's acceptances 180 days None None<br />
State obligations None None None<br />
Repurchase agreements 1 year None None<br />
Pre-refunded municipal obligations None None None<br />
Commercial paper 270 days None None<br />
59
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Maximum Maximum<br />
Authorized Maximum percentage Investment<br />
investment type maturity allowed in one issuer<br />
Money market mutual funds None None None<br />
Investment contracts 30 years None None<br />
Investments Authorized by Actions <strong>of</strong> the <strong>City</strong> Council<br />
Cemetery and Mausoleum Perpetual Care funds are received from cemetery users for the perpetual<br />
care <strong>of</strong> cemetery grounds and <strong>of</strong> the mausoleum. The funds are legally restricted to the extent that<br />
only earnings, and not principal, can be used for restricted perpetual care purposes. These funds<br />
represent the accumulation <strong>of</strong> unspent monies from non-government sources and are not considered by<br />
the <strong>City</strong> to constitute “surplus funds” <strong>of</strong> a local government. Accordingly, these funds are not<br />
considered by the <strong>City</strong> to be subject to the provisions <strong>of</strong> the California Government Code Section<br />
53601 or the <strong>City</strong>’s investment policy. These funds have been invested per instructions <strong>of</strong> the <strong>City</strong><br />
Council. The table below identifies the investment types generally authorized for these investments.<br />
Current <strong>City</strong> Council instructions limit amount invested in equities (common stock) to 60% <strong>of</strong> the total<br />
portfolio with the balance to be invested in fixed income securities. The table also identifies certain<br />
provisions <strong>of</strong> these instructions that address interest rate risk and concentration <strong>of</strong> credit risk.<br />
Maximum Maximum<br />
Authorized Maximum percentage Investment<br />
investment type maturity allowed in one issuer<br />
U.S. Treasury obligations None None None<br />
U.S. agency securities None None None<br />
Common stock None 60% None<br />
Corporate bonds None None None<br />
Disclosures Relating to Interest Rate Risk<br />
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value <strong>of</strong><br />
an investment. Generally, the longer the maturity <strong>of</strong> an investment, the greater the sensitivity <strong>of</strong> its fair<br />
value to changes in market interest rates. The fair value <strong>of</strong> callable securities is also sensitive to market<br />
changes in that if interest rates decrease between the time <strong>of</strong> purchase and the call date, the likelihood<br />
that a bond will be called and reinvested at a lower interest rate increases. The <strong>City</strong>’s portfolio also<br />
includes certain callable structured investments for which the coupon interest rate increases if the<br />
investments are not called on or before certain pre-determined dates. The fair value <strong>of</strong> these<br />
investments is also sensitive to market changes. One <strong>of</strong> the ways that the <strong>City</strong> manages its exposure to<br />
interest rate risk is by purchasing a combination <strong>of</strong> shorter term and longer term investments and by<br />
timing cash flows from maturities so that a portion <strong>of</strong> the portfolio is maturing or coming close to<br />
maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.<br />
Information about the sensitivity <strong>of</strong> the fair values <strong>of</strong> the <strong>City</strong>’s investments (including investments<br />
held by bond trustee, Wells Fargo loan proceeds held in a custodial account with another party, and<br />
60
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Charnock funds held jointly with another party in escrow account) to market interest rate fluctuations<br />
is provided by the following table that shows the distribution <strong>of</strong> the <strong>City</strong>’s investments by maturity.<br />
For purposes <strong>of</strong> the schedule shown below, any callable securities are assumed to be held to maturity.<br />
Investment type<br />
Amount<br />
12 Months<br />
or Less<br />
Remaining maturity (in months)<br />
13 to 24 25 to 60<br />
Months Months<br />
More than<br />
60 Months<br />
Held by <strong>City</strong>:<br />
Federal agency securities $ 515,630,881 194,906,816 106,397,457 214,326,608 —<br />
Corporate medium term notes 19,078,623 10,061,520 1,264,347 7,752,756 —<br />
State investment pool 47,221,150 47,221,150 — — —<br />
Money market funds 33,117,313 33,117,313 — — —<br />
Held by others:<br />
Treasury notes/ bonds 1,365,146 172,396 — 648,011 544,739<br />
Federal agency securities 26,318,265 22,064,679 4,253,586 — —<br />
Corporate medium term notes 2,003,145 239,353 281,548 905,195 577,049<br />
Municipal bonds 890,000 — — 890,000 —<br />
Money market funds 115,286,637 115,286,637 — — —<br />
Total $ 760,911,160 423,069,864 112,196,938 224,522,570 1,121,788<br />
Common stock <strong>of</strong> $5,125,571 not included.<br />
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations<br />
The <strong>City</strong>’s investments as <strong>of</strong> June 30, 2012 (including investments held by bond trustees) do not<br />
include any investments that are highly sensitive to interest rate fluctuations to a greater degree than<br />
already indicated in the information provided above.<br />
Disclosures Relating to Credit Risk<br />
Generally, credit risk is the risk that an issuer <strong>of</strong> an investment will not fulfill its obligation to the<br />
holder <strong>of</strong> the investment. This is measured by the assignment <strong>of</strong> a rating by a nationally recognized<br />
statistical rating organization. Presented below is the minimum rating required by (where applicable)<br />
the California Government Code, the <strong>City</strong>’s investment policy, or debt agreements, and the actual<br />
rating as <strong>of</strong> year end for each investment type.<br />
61
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Investment type<br />
Amount<br />
Minimum<br />
legal rating AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- Not rated<br />
Federal agency securities $ 515,630,881 N / A — 515,630,881 — — — — — — — — —<br />
Corporate medium term notes 19,078,623 A 7,752,756 11,325,867 — — — — — — — — —<br />
State investment pool 47,221,150 N / A — — — — — — — — — — 47,221,150<br />
Money market funds 33,117,313 AAA 33,117,313 — — — — — — — — — —<br />
Held by others:<br />
615,047,967<br />
Treasury notes/bonds 1,365,146 N / A — 1,365,146 — — — — — — — — —<br />
Federal agency securities 26,318,265 N / A — 26,318,265 — — — — — — — — —<br />
Corporate medium term notes 2,003,145 N / A — — 196,344 184,563 — 274,861 825,298 272,373 156,995 92,711 —<br />
Municipal bonds 890,000 N / A — — — — — 890,000 — — — — —<br />
Money market funds 115,286,637 AAA 115,286,637 — — — — — — — — — —<br />
$ 760,911,160<br />
$ 156,156,706 554,640,159 196,344 184,563 — 1,164,861 825,298 272,373 156,995 92,711 47,221,150<br />
Common stock <strong>of</strong> $5,125,571 not included.<br />
62
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Concentration <strong>of</strong> Credit Risk<br />
In regards to limitations on the amount that can be invested in any one issuer, the <strong>City</strong>’s investment<br />
policy generally follows stipulations by the California Government Code. However, the <strong>City</strong>’s policy<br />
adds an additional stipulation that no more than 50% <strong>of</strong> the portfolio may be invested in a single<br />
issuer. Investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external<br />
investment pools) that represent 5% or more <strong>of</strong> total <strong>City</strong> investments are as follows:<br />
FNMA (Fannie Mae) Federal agency securities $ 139,365,863 22.7 %<br />
Federal Farm Credit Bank Federal agency securities 62,234,908 10.1<br />
FHLMC (Freddie Mac) Federal agency securities 140,367,032 22.8<br />
Federal Home Loan Bank Federal agency securities 173,663,078 28.2<br />
Custodial Credit Risk<br />
Custodial credit risk for deposits is the risk that, in the event <strong>of</strong> the failure <strong>of</strong> a depository financial<br />
institution, a government will not be able to recover its deposits or will not be able to recover<br />
collateral securities that are in the possession <strong>of</strong> an outside party. The custodial credit risk for<br />
investments is the risk that, in the event <strong>of</strong> the failure <strong>of</strong> the counterparty (e.g., broker-dealer) to a<br />
transaction, a government will not be able to recover the value <strong>of</strong> its investment or collateral securities<br />
that are in the possession <strong>of</strong> another party. The California Government Code and the <strong>City</strong>’s investment<br />
policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk<br />
for deposits or investments, other than the following provision for deposits: The California<br />
Government Code requires that a financial institution secure deposits made by state or local<br />
governmental units by pledging securities in an undivided collateral pool held by a depository<br />
regulated under state law (unless so waived by the governmental unit). The market value <strong>of</strong> the<br />
pledged securities in the collateral pool must equal at least 110% <strong>of</strong> the total amount deposited by the<br />
public agencies. California law also allows financial institutions to secure <strong>City</strong> deposits by pledging<br />
first trust deed mortgage notes having a value <strong>of</strong> 150% <strong>of</strong> the secured public deposits. As <strong>of</strong> June 30,<br />
2012, <strong>City</strong> investments in the following investment types were held by the same broker-dealer<br />
(counterparty) that was used by the <strong>City</strong> to buy the securities:<br />
Investment type<br />
Reported amount<br />
Federal agencies $ 2,721,062<br />
For investments identified herein as held by bond trustee, the bond trustee, under direction <strong>of</strong> the <strong>City</strong><br />
/Parking Authority selects the investment under the terms <strong>of</strong> the applicable trust agreement, acquires<br />
the investment, and holds the investment on behalf <strong>of</strong> the applicable agency.<br />
Investment in State Investment Pool<br />
The <strong>City</strong> is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by<br />
the California Government Code under the oversight <strong>of</strong> the Treasurer <strong>of</strong> the State <strong>of</strong> California. The<br />
fair value <strong>of</strong> <strong>City</strong> investments in this pool is reported in the accompanying financial statements at<br />
amounts based upon the <strong>City</strong>’s pro-rata share <strong>of</strong> the fair value provided by LAIF for the entire LAIF<br />
portfolio (in relation to the amortized cost <strong>of</strong> that portfolio). The balance available for withdrawal is<br />
based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.<br />
63
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
(6) NOTES RECEIVABLE<br />
Notes receivable related to governmental activities total $107,987,656 as follows:<br />
Balance at<br />
June 30, 2011 Increases Decreases<br />
Balance at<br />
June 30, 2012<br />
General Fund<br />
American Youth Hostel (a) $ 40,000 — 40,000 —<br />
Mountain View Mobile Inn Residents Assoc. (b) 124,977 — — 124,977<br />
Step Up on Second (c) 1,331,252 — 1,331,252 —<br />
Employee housing (d) 994,424 — 6,275 988,149<br />
Low- and moderate-income housing (e) — 2,521,176 — 2,521,176<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (f) — 448,280 — 448,280<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (g) — 4,164,622 — 4,164,622<br />
Low income senior housing (h) — 1,178,003 — 1,178,003<br />
Low income senior housing (i) — 164,276 — 164,276<br />
Total General Fund 2,490,653 8,476,357 1,377,527 9,589,483<br />
Special Revenue Source Fund<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (j) 6,774,763 — — 6,774,763<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (k) 3,350,000 — — 3,350,000<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (l) 2,503,129 — — 2,503,129<br />
<strong>Santa</strong> <strong>Monica</strong> Housing Partners (m) — 12,287,266 — 12,287,266<br />
Total Special Revenue Source Fund 12,627,892 12,287,266 — 24,915,158<br />
Earthquake Recovery Redevelopment Fund<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (n) 318,307 — 318,307 —<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (o) 398,362 — 398,362 —<br />
Total Earthquake Recovery Redevelopment 716,669 — 716,669 —<br />
Nonmajor Governmental Funds<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (p) 681,080 — — 681,080<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (q) 2,900,000 — — 2,900,000<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (r) 6,781,693 318,307 — 7,100,000<br />
Low- and moderate-income housing (DRPLP) (s) 200,000 — — 200,000<br />
Low- and moderate-income housing (DRPLP) (s) 200,000 — — 200,000<br />
Low- and moderate-income housing (t) 1,202,185 — 43,850 1,158,335<br />
Low- and moderate-income housing (u) 1,200,000 — — 1,200,000<br />
Low- and moderate-income housing (v) 6,345,807 — — 6,345,807<br />
Low- and moderate-income housing (w) 956,395 — — 956,395<br />
Low- and moderate-income housing (x) 7,170,000 — — 7,170,000<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (y) 3,836,144 398,362 — 4,234,506<br />
Low- and moderate-income housing (z) 841,600 — — 841,600<br />
Low- and moderate-income housing (aa) 5,684,455 — — 5,684,455<br />
Low- and moderate-income housing (bb) 3,044,820 — — 3,044,820<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (cc) 8,958,823 — — 8,958,823<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (dd) 4,786,704 — — 4,786,704<br />
Low income senior housing (ee) 3,916,837 141,815 — 4,058,652<br />
MERL Program (ff) 11,711,336 — 157,358 11,553,978<br />
Low income senior housing (gg) 46,250 — 46,250 —<br />
Low income senior housing (hh) 2,407,860 — — 2,407,860<br />
Total nonmajor governmental funds 72,871,989 858,484 247,458 73,483,015<br />
Total notes receivable $ 88,707,203 21,622,107 2,341,654 107,987,656<br />
64
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
General Fund<br />
a. On April 12, 1990, the <strong>City</strong> loaned $500,000 from the General Fund, interest free, to American<br />
Youth Hostel, Inc. to assist in financing construction <strong>of</strong> a 200-bed international youth hostel<br />
facility. The seventeenth <strong>of</strong> seventeen installment loan payments was received in 2012; the<br />
remaining principal balance as <strong>of</strong> June 30, 2012 is $0.<br />
b. A promissory note dated April 3, 1996 in the amount <strong>of</strong> $272,000, interest free, was executed with<br />
Mountain View Mobile Inn Residents Association for pre-development loan funds to assist in the<br />
acquisition and subsequent conversion <strong>of</strong> the mobile home park located at 1930 Stewart Street to<br />
tenant ownership. As <strong>of</strong> June 30, 2012, $124,977 had been disbursed to the borrower. Since the<br />
goal <strong>of</strong> preserving Mountain View as affordable housing was achieved, Council will be asked to<br />
forgive this loan in FY 2012-13.<br />
c. A promissory note in the amount <strong>of</strong> $1,331,252 was executed with Step Up on Second, L.P., a<br />
California limited partnership, for the construction <strong>of</strong> a thirty-six bed permanent housing project<br />
for mentally disabled low-income persons. The project is located at 1328 Second Street in <strong>Santa</strong><br />
<strong>Monica</strong>. The original promissory note dated September 16, 1993 was amended, superseded and<br />
replaced in full by promissory notes dated September 9, 1996 and November 30, 2010. Interest<br />
and principal balance <strong>of</strong> $1,331,252 have been forgiven and the balance is $0 as <strong>of</strong> June 30, 2012.<br />
d. On June 11, 2010, the <strong>City</strong> made a housing loan to Rodney S. Gould, <strong>City</strong> Manager, in the amount<br />
<strong>of</strong> $1,000,000 for the purchase <strong>of</strong> a home within the <strong>City</strong> limits. The loan is secured by a deed <strong>of</strong><br />
trust and has a term <strong>of</strong> 30 years with an interest rate <strong>of</strong> 3.27%. The outstanding principal, together<br />
with any outstanding interest, is due and payable in full on or before the 30-year anniversary date<br />
<strong>of</strong> the loan. Monthly interest payments are due on the first calendar day <strong>of</strong> each month. The <strong>City</strong><br />
Manager must repay any outstanding balance <strong>of</strong> the loan within two years <strong>of</strong> ending employment<br />
with the <strong>City</strong>. As <strong>of</strong> June 30, 2012, the total outstanding balance <strong>of</strong> the loan was $988,149.<br />
e. A promissory note dated January 12, 2009 in the amount <strong>of</strong> $6,223,333 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for an affordable housing project located at 430-508<br />
Pico Boulevard. This was a 0% loan with the principal amount due and payable after a two-year<br />
deferral period. It was superseded by a new loan dated January 26, 2012, which increased the note<br />
to $10,947,475, changed the interest rate to 3% and the term to 55 years. As <strong>of</strong> June 30, 2012,<br />
$2,521,176 had been disbursed to the borrower.<br />
f. A promissory note dated February 1, 2011 in the amount <strong>of</strong> $9,407,103 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for an affordable housing project located at 2602<br />
Broadway. This is a 55-year loan with an interest rate <strong>of</strong> 3% per annum. As <strong>of</strong> June 30, 2012,<br />
$448,280 had been disbursed to the borrower.<br />
g. A promissory note dated February 2, 2009 in the amount <strong>of</strong> $5,595,897 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for an affordable housing project located at 2802 Pico<br />
Boulevard. This was a 0% loan with the principal amount due and payable after a two-year<br />
deferral period. It was superseded by a new loan dated November 29, 2011, which increased the<br />
note to $9,207,402, changed the interest rate to 3% and the term to 55 years. As <strong>of</strong> June 30, 2012,<br />
$4,164,622 had been disbursed to the borrower.<br />
65
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
h. A promissory note dated June 16, 2009 in the amount <strong>of</strong> $4,424,711 was executed with FAME<br />
<strong>Santa</strong> <strong>Monica</strong> Senior Apartments, L.P. for an affordable housing project located at 1754 19 th<br />
Street. This loan was superseded by a loan in the amount <strong>of</strong> $11,475,000 dated November 17,<br />
2011 and it is 0% interest for 55 years. As <strong>of</strong> June 30, 2012, $1,178,003 had been disbursed to the<br />
borrower.<br />
i. A promissory note dated December 15, 2010 in the amount <strong>of</strong> $3,645,422 was executed with Step<br />
Up on Second Street, Inc. for an affordable housing project at 520 Colorado Avenue. The loan is<br />
for the acquisition and predevelopment <strong>of</strong> the site. This loan was superseded by a loan in the<br />
amount <strong>of</strong> $5,041,255 dated January 25, 2012. It is 3% interest for 55 years after the project is<br />
built. As <strong>of</strong> June 30, 2012, $164,276 had been disbursed to the borrower.<br />
Special Revenue Source Capital Projects Fund<br />
j. A revised promissory note dated March 9, 2005 in the amount <strong>of</strong> $6,774,763 was executed with<br />
Pacific Court Limited Partnership, c/o Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, for an affordable<br />
housing project located at 2209 Main Street. Forty-three low- and moderate-income housing units<br />
were constructed on the site. This is a 55-year loan with 1% interest rate per annum. Payments<br />
are to be made from residual receipts. As <strong>of</strong> June 30, 2012, $6,774,763 had been disbursed to the<br />
borrower.<br />
k. A revised promissory note dated October 26, 2004 in the amount <strong>of</strong> $3,350,000 was executed with<br />
1424 Broadway Apartments Limited Partnership, c/o Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>,<br />
for an affordable housing project located at 1424 Broadway/1512 15th Street. This is a 55-year<br />
loan with 3% interest rate per annum. Payments are to be made from residual receipts. As <strong>of</strong> June<br />
30, 2012, $3,350,000 had been disbursed to the borrower.<br />
l. A promissory note dated January 12, 2009 in the amount <strong>of</strong> $6,223,333 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for the acquisition and predevelopment expenses for an<br />
affordable housing project located at 430-508 Pico Boulevard This was a 0% loan with the<br />
principal amount due and payable after a two-year deferral period. It was superseded by a new<br />
loan dated January 26, 2012, which increased the note to $10,947,475, changed the interest rate to<br />
3% and the term to 55 years. As <strong>of</strong> June 30, 2012, $2,503,129 had been disbursed to the borrower.<br />
m. A promissory note dated December 8, 2011 in the amount <strong>of</strong> $19,400,000, interest free, was<br />
executed with <strong>Santa</strong> <strong>Monica</strong> Housing Partners for the acquisition and predevelopment expenses<br />
for an affordable housing project located at 1725 Ocean Ave. This is a 0% loan with the principal<br />
amount due and payable after 55-year anniversary <strong>of</strong> conversion to permanent financing. As <strong>of</strong><br />
June 30, 2012, $12,287,266 had been disbursed to the borrower.<br />
Earthquake Recovery Redevelopment Fund<br />
n. Promissory notes dated October 26, 2004, October 26, 2004 and June 12, 2007 in the amount <strong>of</strong><br />
$4,458,033, $1,691,967 and $950,000 respectively for a total <strong>of</strong> $7,100,000 were executed with<br />
26 th and <strong>Santa</strong> <strong>Monica</strong> Family Housing Limited Partnership, c/o Community Corporation <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong>, for an affordable housing project located at 1349 26 th Street. Forty-four low- and<br />
moderate-income housing units are to be constructed on the site. They are 55-year loans with 3%<br />
interest rate per annum. Payments are to be made from residual receipts. The promissory notes<br />
66
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
balance <strong>of</strong> $318,307 was transferred from the Earthquake Recovery Redevelopment Fund to the<br />
Housing Project Fund on February 1, 2012. See (r.) below.<br />
o. A promissory note dated July 24, 2006 in the amount <strong>of</strong> $4,234,507 was executed with The Tahiti,<br />
L.P. c/o Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for an affordable housing project located at<br />
2411-2423 Centinela Avenue. The loan is for the construction <strong>of</strong> 36 affordable rental housing<br />
units. This is a 55-year loan with a simple interest rate <strong>of</strong> 3% per annum. Payments are to be<br />
made from residual receipts. The promissory notes balance <strong>of</strong> $398,362 was transferred from the<br />
Earthquake Recovery Redevelopment Fund to the Housing Project Fund on February 1, 2012. See<br />
(y.) below.<br />
Nonmajor Governmental Funds<br />
p. On March 1, 1997, the <strong>City</strong> executed a promissory note with Community Corporation <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong> for the construction <strong>of</strong> a twenty unit, large family, affordable housing complex located at<br />
708 Pico Boulevard $579,000 is funded from the <strong>City</strong>’s Pico Neighborhood Trust Fund, while<br />
$221,000 is funded from the Community Development Block Grant (CDBG) Fund. This note is a<br />
0% loan to be repaid from residual receipts <strong>of</strong> the project and is due on October 22, 2053. As <strong>of</strong><br />
June 30, 2012, the outstanding balance is $681,080.<br />
q. A revised promissory note dated October 26, 2004 in the amount <strong>of</strong> $2,900,000 was executed with<br />
1424 Broadway Apartments Limited Partnership, c/o Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>,<br />
for an affordable housing project located at 1424 Broadway/1512 15th Street. This is a 55-year<br />
loan with 3% interest rate per annum. Payments are to be made from residual receipts. As <strong>of</strong> June<br />
30, 2012, $2,900,000 had been disbursed to the borrower.<br />
r. Promissory notes dated October 26, 2004, October 26, 2004 and June 12, 2007 in the amount <strong>of</strong><br />
$4,458,033, $1,691,967 and $950,000 respectively for a total <strong>of</strong> $7,100,000 were executed with<br />
26 th and <strong>Santa</strong> <strong>Monica</strong> Family Housing Limited Partnership, c/o Community Corporation <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong>, for an affordable housing project located at 1349 26 th Street. Forty-four low- and<br />
moderate-income housing units are to be constructed on the site. They are 55-year loans with 3%<br />
interest rate per annum. Payments are to be made from residual receipts. Due to Assembly Bill<br />
26, the former Earthquake Recovery Redevelopment Fund transferred its balance <strong>of</strong> $318,307 to<br />
the Housing Project Fund on February 1, 2012. As <strong>of</strong> June 30, 2012, $7,100,000 had been<br />
disbursed to the borrower.<br />
s. Two promissory notes dated December 22, 1988 and December 29, 1989, for $200,000 each, one<br />
for 3 Vicente Terrace and one for 2020/30 Cloverfield Boulevard, were executed with the owners<br />
<strong>of</strong> certain rental properties. The first note was for five years at 3% interest per year, and could be<br />
renewed for five additional five-year terms as long as the rental properties are maintained for lowand<br />
moderate-income households. The first note was due December 22, 1993, and has been<br />
extended for the fourth time to December 22, 2013; the second note was due December 29, 1994,<br />
and has been extended to December 29, 2019 under the same interest rate and similar terms and<br />
conditions. The promissory notes are payable in full upon sale or transfer <strong>of</strong> the property<br />
(whichever occurs first) or upon expiration <strong>of</strong> the term <strong>of</strong> the promissory notes. Upon payment to<br />
the <strong>City</strong>, proceeds must be paid to the State <strong>of</strong> California as repayment for two $200,000 State<br />
Department <strong>of</strong> Housing and Urban Development Deferred Payment Rehabilitation Loan Program<br />
(DPRLP) loans. There were no changes in the loan balances during the year ended June 30, 2012.<br />
67
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
t. These represent non-interest bearing, limited appreciation and shared appreciation loans made<br />
between 1991 and 2001 pursuant to Tenant Ownership Rights Charter Amendment (TORCA)<br />
Program guidelines to assist low- and moderate-income households purchase their rental units.<br />
The loans are due the earlier <strong>of</strong> 20 years or 30 years as applicable or upon resale, transfer or<br />
default. As <strong>of</strong> June 30, 2012, the outstanding balances <strong>of</strong> such loans total $1,158,335.<br />
u. A promissory note dated September 30, 2003 in the amount <strong>of</strong> $1,200,000 was executed with<br />
Ocean Park Community Center for congregate housing and emergency shelter for very lowincome<br />
use, located at 1751 Cloverfield Boulevard This loan is for the acquisition and<br />
rehabilitation <strong>of</strong> the site. This is a 55-year loan with 5.98% interest rate per annum with a twoyear<br />
deferral period. Payments are to be made from residual receipts. As <strong>of</strong> June 30, 2012,<br />
$1,200,000 had been disbursed to the borrower.<br />
v. A revised promissory note dated February 8, 2006 in the amount <strong>of</strong> $6,745,807 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for an affordable housing project located at 3021-3031<br />
<strong>Santa</strong> <strong>Monica</strong> Boulevard. This loan is for the acquisition, predevelopment expenses and<br />
construction <strong>of</strong> future low- and moderate-income housing. This is a 0% loan with the principal<br />
amount due and payable February 8, 2061, 55-years from February 8, 2006. As <strong>of</strong> June 30, 2012,<br />
$6,345,807 had been disbursed to the borrower.<br />
w. A promissory note dated February 10, 2004, in the amount <strong>of</strong> $1,161,185 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for the purchase <strong>of</strong> land for an affordable housing<br />
project located at 1342 Berkeley Street. As <strong>of</strong> June 30, 2012, $956,395 had been disbursed to the<br />
borrower. This 0% loan was due and payable August 6, 2008, and is secured by the land at 1342<br />
Berkeley. Council extended the loan until December 2014.<br />
x. Two promissory notes dated February 13, 2007, one in the amount <strong>of</strong> $5,870,000 and one for<br />
$1,300,000 were, executed with Step up on Fifth, L.P. for an affordable housing project located at<br />
1548 Fifth Street. These loans are for the acquisition and construction <strong>of</strong> the site. This is a 55-<br />
year loan with a simple interest rate <strong>of</strong> 5% per annum. Payments are to be made from residual<br />
receipts. As <strong>of</strong> June 30, 2012, $7,170,000 had been disbursed to the borrower.<br />
y. A promissory note dated July 24, 2006 in the amount <strong>of</strong> $4,234,507 was executed with The Tahiti,<br />
L.P. c/o Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for an affordable housing project located at<br />
2411-2423 Centinela Avenue. The loan is for the construction <strong>of</strong> 36 affordable rental housing<br />
units. This is a 55-year loan with a simple interest rate <strong>of</strong> 3% per annum. Payments are to be<br />
made from residual receipts. Due to Assembly Bill 26, the former Earthquake Recovery<br />
Redevelopment Fund transferred its balance <strong>of</strong> $398,362 to the Housing Project Fund on February<br />
1, 2012. As <strong>of</strong> June 30, 2012, $4,234,506 had been disbursed to the borrower.<br />
z. A promissory note dated December 22, 1988 in the amount <strong>of</strong> $841,600 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for low- and moderate-income housing at 2020-2030<br />
Cloverfield Boulevard. This is a 35-year loan with 10.44% interest rate per annum. As <strong>of</strong> June 30,<br />
2012, $841,600 had been disbursed to the borrower.<br />
aa. An amended promissory note dated February 22, 2008, in the amount <strong>of</strong> $5,207,314 and a<br />
promissory note dated March 15, 2011 for $477,142 were executed with the <strong>Santa</strong> <strong>Monica</strong><br />
Housing Partners, L.P. for the development <strong>of</strong> twenty units <strong>of</strong> affordable senior housing at 1458<br />
14 th Street. The loans represents land acquisition financing that achieves site control. These are 55-<br />
68
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
year loans with an interest rate <strong>of</strong> 3% per annum on the $5,207,314 loan and 4.36% on the<br />
$477,142 loan. As <strong>of</strong> June 30, 2012, the outstanding balance is $5,684,455.<br />
bb. A promissory note dated January 12, 2009 in the amount <strong>of</strong> $6,223,333 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for an affordable housing project located at 430-508<br />
Pico Boulevard. This was a 0% loan with the principal amount due and payable after a two-year<br />
deferral period. It was superseded by a new loan dated January 26, 2012, which increased the note<br />
to $10,947,475, changed the interest rate to 3% and the term to 55 years. As <strong>of</strong> June 30, 2012,<br />
$3,044,820 had been disbursed to the borrower.<br />
cc. A promissory note dated February 1, 2011 in the amount <strong>of</strong> $9,407,103 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for an affordable housing project located at 2602<br />
Broadway. This is a 55-year loan with an interest rate <strong>of</strong> 3% per annum. As <strong>of</strong> June 30, 2012,<br />
$8,958,823 had been disbursed to the borrower.<br />
dd. A promissory note dated February 2, 2009 in the amount <strong>of</strong> $5,595,897 was executed with<br />
Community Corporation <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> for an affordable housing project located at 2802 Pico<br />
Boulevard. This was a 0% loan with the principal amount due and payable after a two-year<br />
deferral period. It was superseded by a new loan dated November 29, 2011, which increased the<br />
note to $9,207,402, changed the interest rate to 3% and the term to 55 years. As <strong>of</strong> June 30, 2012,<br />
$4,786,704 had been disbursed to the borrower.<br />
ee. A promissory note dated June 16, 2009 in the amount <strong>of</strong> $4,424,711 was executed with FAME<br />
<strong>Santa</strong> <strong>Monica</strong> Senior Apartments, L.P. for an affordable housing project located at 1754 19 th<br />
Street. This loan was superseded by a loan in the amount <strong>of</strong> $11,475,000 dated November 17,<br />
2011. It is 0% interest for 55 years. As <strong>of</strong> June 30, 2012, $4,058,652 had been disbursed to the<br />
borrower.<br />
ff. The January 17, 1994 Northridge Earthquake resulted in damaged multifamily residences in the<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. To facilitate repair <strong>of</strong> damaged multifamily residences, the U.S.<br />
Department <strong>of</strong> Housing and Urban Development awarded the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> a total <strong>of</strong><br />
$33,388,000 in emergency funds to finance the <strong>City</strong>'s Multifamily Earthquake Repair Loan<br />
(MERL) Program.<br />
The funds were allocated as follows: $2,027,000 – HOME Program Emergency Supplemental<br />
Fund, $6,361,000 – HOME Program Presidential Contingency Fund, and $25,000,000 – CDBG<br />
Program Emergency Supplemental Fund.<br />
Loans were made between 1995 and 2001. As <strong>of</strong> June 30, 2012, the following summarizes the<br />
total loan amount authorized, amount disbursed since inception <strong>of</strong> the loan program, the amounts<br />
repaid by the borrowers, and the loan balances:<br />
Loan amount Loan amount Amounts Loan balance at<br />
Fund authorized disbursed repaid/forgiven June 30, 2012<br />
Miscellaneous Grants $ 7,790,695 7,790,695 3,226,220 4,564,475<br />
CDBG 21,739,088 21,727,929 14,738,426 6,989,503<br />
Total $ 29,529,783 29,518,624 17,964,646 11,553,978<br />
69
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
gg. The Redevelopment Housing Trust Fund, formerly known as “CHARP” provides funds to eligible<br />
borrowers in the form <strong>of</strong> deferred payment loans to make up the financial gap between available<br />
non-program resources, including the borrower’s equity and private financing, and the limited<br />
equity cooperatives. Interest and principal balance <strong>of</strong> $46,250 <strong>of</strong> a loan dated December 29, 1998<br />
for property at 1011 11 th Street have been forgiven and the balance is $0 as <strong>of</strong> June 30, 2012.<br />
hh. A promissory note dated December 15, 2010 in the amount <strong>of</strong> $3,645,422 was executed with Step<br />
Up on Second Street, Inc. for an affordable housing project at 520 Colorado Avenue. The loan is<br />
for the acquisition and predevelopment <strong>of</strong> the site. This loan was superseded by a loan in the<br />
amount <strong>of</strong> $5,041,255 dated January 25, 2012. It is 3% interest for 55 years after the project is<br />
built. As <strong>of</strong> June 30, 2012, the outstanding balance is $2,407,860.<br />
Due to the length <strong>of</strong> the repayment plan and uncertainty <strong>of</strong> collection <strong>of</strong> housing loans, the <strong>City</strong>’s<br />
policy is not to record interest until received.<br />
70
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
(7) CAPITAL ASSETS<br />
Capital assets activity for the primary government for fiscal year ended June 30, 2012 is as follows:<br />
Balance at<br />
July 1, 2011 Increases Decreases Transfers<br />
Balance at<br />
June 30, 2012<br />
Governmental activities:<br />
Capital assets, not being depreciated:<br />
Land $ 196,425,024 3,250,000 — 200,000 199,875,024<br />
Land held under easement 72,237,823 — — — 72,237,823<br />
Construction in progress 34,933,556 50,046,803 — (8,359,529) 76,620,830<br />
Total capital assets, not being depreciated 303,596,403 53,296,803 — (8,159,529) 348,733,677<br />
Capital assets, being depreciated:<br />
Buildings 271,879,770 95,768 — 8,359,529 280,335,067<br />
Improvements other than buildings 78,625,572 — — — 78,625,572<br />
Intangibles 3,575,000 — — — 3,575,000<br />
Utility systems 1,742,913 — — — 1,742,913<br />
Machinery and equipment 34,418,733 1,454,859 (548,870) — 35,324,722<br />
Infrastructure 329,590,318 — — — 329,590,318<br />
Total capital assets being depreciated 719,832,306 1,550,627 (548,870) 8,359,529 729,193,592<br />
Less accumulated depreciation for:<br />
Buildings (54,889,978) (7,670,466) — — (62,560,444)<br />
Improvements other than buildings (45,977,811) (2,056,318) — — (48,034,129)<br />
Intangibles (271,104) (35,750) — — (306,854)<br />
Utility systems (300,900) (87,146) — — (388,046)<br />
Machinery and equipment (25,438,348) (1,600,436) 536,457 — (26,502,327)<br />
Infrastructure (158,404,029) (10,453,061) — — (168,857,090)<br />
Total accumulated depreciation (285,282,170) (21,903,177) 536,457 — (306,648,890)<br />
Total capital assets, being depreciated, net 434,550,136 (20,352,550) (12,413) 8,359,529 422,544,702<br />
Subtotal governmental activities 738,146,539 32,944,253 (12,413) 200,000 771,278,379<br />
Business-type activities:<br />
Capital assets, not being depreciated:<br />
Land 72,431,413 — — (200,000) 72,231,413<br />
Construction in progress 16,064,599 10,566,438 — (1,064,351) 25,566,686<br />
Total capital assets, not being depreciated 88,496,012 10,566,438 — (1,264,351) 97,798,099<br />
Capital assets, being depreciated:<br />
Buildings 149,576,343 3,344,022 — 224,153 153,144,518<br />
Improvements other than buildings 25,979,610 1 — 577,222 26,556,833<br />
Intangibles 79,884,325 2,712,766 — — 82,597,091<br />
Machinery and equipment 160,678,015 13,648,392 (8,111,581) 262,976 166,477,802<br />
Infrastructure 204,438,070 — — — 204,438,070<br />
Total capital assets being depreciated 620,556,363 19,705,181 (8,111,581) 1,064,351 633,214,314<br />
Less accumulated depreciation for:<br />
Buildings (37,864,615) (4,184,330) — — (42,048,945)<br />
Improvements other than buildings (19,387,111) (741,883) — — (20,128,994)<br />
Intangibles (19,107,968) (2,081,776) — — (21,189,744)<br />
Machinery and equipment (108,002,251) (13,594,134) 7,979,867 — (113,616,518)<br />
Infrastructure (59,092,537) (5,279,238) — — (64,371,775)<br />
Total accumulated depreciation (243,454,482) (25,881,361) 7,979,867 — (261,355,976)<br />
Total capital assets, being depreciated, net 377,101,881 (6,176,180) (131,714) 1,064,351 371,858,338<br />
Subtotal business-type activities 465,597,893 4,390,258 (131,714) (200,000) 469,656,437<br />
Total $ 1,203,744,432 37,334,511 (144,127) — 1,240,934,816<br />
71
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Depreciation and amortization expense was charged to functions/programs <strong>of</strong> the primary<br />
government as follows:<br />
Governmental activities:<br />
General government $ 992,747<br />
Public safety 2,238,327<br />
General services 12,907,227<br />
Cultural and recreation services 3,377,689<br />
Library 1,301,842<br />
Housing and community development 835,189<br />
Capital assets held by the government's internal service funds are<br />
charged to the various functions based on their assets usage 250,156<br />
Total depreciation and amortization expense - governmental activities $ 21,903,177<br />
Business-type activities:<br />
Water $ 1,001,793<br />
Resource Recovery and Recycling 8,643<br />
Pier 509,436<br />
Wastewater 6,317,129<br />
Civic auditorium 283,210<br />
Airport 426,563<br />
Stormwater management 301,816<br />
Cemetery 154,066<br />
Big Blue Bus 13,310,913<br />
Parking authority 264,207<br />
Capital assets held by the government's internal service funds are<br />
charged to the various programs based on their assets usage 3,303,585<br />
Total depreciation and amortization expense - business-type activities $ 25,881,361<br />
Note that depreciation and amortization expense does not equal amounts shown on enterprise<br />
fund statements because internal service fund amounts relating to business-type activities are<br />
included in functions/programs.<br />
The <strong>City</strong>’s infrastructure assets are recorded at historical cost and estimated historical cost in the<br />
government-wide statements as required by GASB 34.<br />
(8) DEFERRED/UNEARNED REVENUE<br />
Governmental funds report deferred revenue in connection with receivables for revenues that are not<br />
considered to be available to liquidate liabilities <strong>of</strong> the current period. Governmental and enterprise<br />
funds also defer revenue recognition in connection with resources that have been received as <strong>of</strong> yearend,<br />
but not yet earned (unearned revenue).<br />
72
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
The interest on advances reported in the General Fund and the nonmajor governmental funds represent<br />
interfund activity eliminated in the government-wide financial statements. This interest is earned and<br />
included in promissory note balances at year-end. GASB 34 requires the <strong>City</strong> to recognize and present<br />
interfund activity between governmental and business-type funds on the government-wide financial<br />
statements. Interest on advances <strong>of</strong> $486,954 is deferred on the fund financial statements but is<br />
recognized on the government-wide financial statements because it relates to General Fund<br />
(governmental-type fund) loans to the Airport Fund (business-type fund).<br />
The components <strong>of</strong> unearned revenue are as follows:<br />
Fund financial<br />
statements<br />
Eliminate<br />
interfund<br />
activity<br />
Recognized in<br />
governmentwide<br />
financials<br />
Governmentwide<br />
financial<br />
statements<br />
Governmental funds:<br />
General Fund:<br />
Interest on advances $ 17,759,028 (17,272,074) (486,954) —<br />
Settlement proceeds 1,500,000 (1,500,000) —<br />
Unearned user fees 3,452,491 — — 3,452,491<br />
Total General Fund 22,711,519 (17,272,074) (1,986,954) 3,452,491<br />
Special Revenue Source Fund:<br />
Civic Center advanced lease payments 19,285,690 — — 19,285,690<br />
Settlement proceeds 27,956,628 — (19,245,981) 8,710,647<br />
Total Special Revenue Source Fund 47,242,318 — (19,245,981) 27,996,337<br />
Nonmajor governmental funds:<br />
Grant advances (1) 1,064,063 — — 1,064,063<br />
Interest on advances 7,152,611 (6,242,383) (910,228) —<br />
Unearned user fees 10,088 — — 10,088<br />
Total nonmajor governmental funds: 8,226,762 (6,242,383) (910,228) 1,074,151<br />
Total governmental funds 78,180,599 (23,514,457) (22,143,163) 32,522,979<br />
Enterprise funds:<br />
Big Blue Bus Fund:<br />
Unredeemed fare media 60,296 — — 60,296<br />
Unearned contract revenue 122,097 — — 122,097<br />
LACMTA funds received prior to<br />
meeting all eligibility requirements 868,808 — — 868,808<br />
Total Big Blue Bus Fund 1,051,201 — — 1,051,201<br />
Total enterprise funds 1,051,201 — — 1,051,201<br />
Total unearned revenue $ 79,231,800 (23,514,457) (22,143,163) 33,574,180<br />
(1) Represents grant advances for which all <strong>of</strong> the eligibility requirements have not been met.<br />
73
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
(9) LONG-TERM LIABILITIES<br />
Changes in long-term liabilities:<br />
Long-term liability activity for the fiscal year ended June 30, 2012, was as follows:<br />
Balance at<br />
July 1, 2011 Additions Reductions<br />
Balance at<br />
June 30, 2012<br />
Due within<br />
one year<br />
Due beyond one<br />
year<br />
Governmental Activities:<br />
Loans and notes payable $ 101,468,020<br />
— 101,068,020 400,000 — 400,000<br />
Term loan 50,000,000 — 50,000,000 — — —<br />
Revenue bonds 61,505,000 40,690,000 14,565,000 87,630,000 3,365,000 84,265,000<br />
Tax allocation bonds 106,310,000 — 106,310,000 — — —<br />
General obligation bonds 15,000,000 11,325,000 15,000,000 11,325,000 — 11,325,000<br />
Less deferred amounts:<br />
For issuance discounts (177,030) — (167,439) (9,591) — (9,591)<br />
For issuance premiums 1,102,872 4,339,840 665,161 4,777,551 — 4,777,551<br />
Deferred loss on refunding (3,267,366) (360,093) (3,130,129) (497,330) — (497,330)<br />
Total loans and bonds<br />
payable 331,941,496 55,994,747 284,310,613 103,625,630 3,365,000 100,260,630<br />
Compensated absences (1) 11,332,102 6,396,299 6,396,876 11,331,525 6,182,307 5,149,218<br />
Claims payable 25,855,115 10,234,017 7,063,891 29,025,241 6,551,766 22,473,475<br />
Subtotal governmental<br />
activities 369,128,713 72,625,063 297,771,380 143,982,396 16,099,073 127,883,323<br />
Business-type activities:<br />
Loans payable 2,565,054 — 256,632 2,308,422 263,305 2,045,117<br />
Revenue bonds 22,615,000 8,955,000 11,320,000 20,250,000 1,700,000 18,550,000<br />
Less deferred amounts:<br />
For issuance discounts (84,791) — (84,791) — — —<br />
For issuance premiums 152,621 949,006 19,278 1,082,349 — 1,082,349<br />
Loss on refunding (1,955,313) (724,535) (667,314) (2,012,534) — (2,012,534)<br />
Total loans and bonds<br />
payable 23,292,571 9,179,471 10,843,805 21,628,237 1,963,305 19,664,932<br />
Compensated absences 3,488,479 2,058,211 2,273,779 3,272,911 2,172,739 1,100,172<br />
Claims payable 2,643,173 1,017,658 947,775 2,713,056 1,524,563 1,188,493<br />
Subtotal business-type<br />
activities 29,424,223 12,255,340 14,065,359 27,614,204 5,660,607 21,953,597<br />
Total $ 398,552,936 84,880,403 311,836,739 171,596,600 21,759,680 149,836,920<br />
(1) Compensated absences are predominately liquidated by General Fund resources.<br />
74
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
A summary <strong>of</strong> long-term bonds and loans outstanding at year-end is as follows:<br />
Date <strong>of</strong> issue Original issue<br />
Governmental activities:<br />
Revenue bonds (1):<br />
Parking Authority Refunding 2002 May 1, 2002 10,480,000<br />
Final<br />
maturity<br />
date<br />
Interest<br />
rate<br />
Balance at<br />
June 30, 2012<br />
$ July 1, 2016 3.50-4.50% $ 4,985,000<br />
Public Finance Authority 2011 Nov 16, 2011 32,065,000 June 1, 2031 4.00-5.00% 32,065,000<br />
Public Finance Authority Refunding 2009 Dec 16, 2009 9,155,000 July 1, 2021 2.00-5.00% 7,940,000<br />
Public Finance Authority Refunding 2011 Nov 16, 2011 8,625,000 Dec 1, 2020 2.00-4.00% 8,100,000<br />
Public Finance Authority 2004 Dec 1, 2004 38,930,000 July 1, 2034 3.35-5.00% 34,540,000<br />
Subtotal revenue bonds -<br />
governmental activities 87,630,000<br />
General obligation bonds (1):<br />
Main Library Improvements 2012 May 30, 2012 11,325,000 July 1, 2022 0.20-4.00% 11,325,000<br />
Subtotal general obligation<br />
bonds - governmental<br />
activities 11,325,000<br />
Loans and notes:<br />
State Dept. <strong>of</strong> Housing and<br />
Community Development loan (2) Dec 22, 1988 200,000 Dec 22, 2013 0.00% 200,000<br />
State Dept. <strong>of</strong> Housing and<br />
Community Development loan (2) Dec 29, 1989 200,000 Dec 29, 2019 0.00% 200,000<br />
Subtotal loans payable 400,000<br />
Subtotal governmental activities 99,355,000<br />
Business-type activities (3):<br />
Revenue bonds:<br />
Hyperion Project Revenue Refunding 2012 May 30, 2012 8,955,000 Feb 1, 2022 2.00-4.00% 8,955,000<br />
Hyperion Project Revenue Refunding 2005 Oct 1, 2005 20,305,000 Jan 1, 2018 3.00-5.00% 11,295,000<br />
Subtotal revenue bonds -<br />
business-type activities 20,250,000<br />
Loans:<br />
State Water Resources Control<br />
Board loan Jan 29, 1999 5,000,000 July 1, 2019 2.60% 2,308,422<br />
Subtotal business-type activities 22,558,422<br />
Total $ 121,913,422<br />
(1) For construction <strong>of</strong> <strong>City</strong> facilities.<br />
(2) To fund promissory note receivable from the owner <strong>of</strong> certain rental property.<br />
(3) To fund capital contribution towards wastewater treatment facility.<br />
Management believes it is in compliance with all debt covenants. See Note 17.<br />
75
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Annual debt service requirements to maturity are as follows:<br />
Fiscal year<br />
ending<br />
Revenue bonds<br />
Governmental Activities<br />
General obligation bonds<br />
Loans payable<br />
June 30, Principal Interest Principal Interest Principal Interest Principal Interest<br />
2013 $ 3,365,000 3,751,017 — 191,910 — — 3,365,000 3,942,927<br />
2014 4,695,000 3,640,291 1,225,000 326,205 200,000 — 6,120,000 3,966,496<br />
2015 4,865,000 3,462,426 1,210,000 323,165 — — 6,075,000 3,785,591<br />
2016 5,070,000 3,264,051 1,165,000 309,700 — — 6,235,000 3,573,751<br />
2017 5,270,000 3,056,623 1,135,000 275,350 — — 6,405,000 3,331,973<br />
2018-2022 22,455,000 12,522,638 5,530,000 721,275 200,000 — 28,185,000 13,243,913<br />
2023-2027 17,670,000 8,240,066 1,060,000 21,200 — — 18,730,000 8,261,266<br />
2028-2032 19,495,000 3,690,439 — — — — 19,495,000 3,690,439<br />
2033-2037 4,745,000 240,125 — — — — 4,745,000 240,125<br />
$ 87,630,000 41,867,676 11,325,000 2,168,805 400,000 — 99,355,000 44,036,481<br />
Total<br />
Fiscal year<br />
ending<br />
Revenue bonds<br />
Business-type activities<br />
Loans payable<br />
June 30, Principal Interest Principal Interest Principal Interest<br />
2013 $ 1,700,000 674,700 263,305 60,019 1,963,305 734,719<br />
2014 1,785,000 600,963 270,151 53,173 2,055,151 654,136<br />
2015 1,845,000 537,438 277,174 46,149 2,122,174 583,587<br />
2016 1,910,000 466,950 284,381 38,943 2,194,381 505,893<br />
2017 1,990,000 388,950 291,775 31,549 2,281,775 420,499<br />
2018-2022 11,020,000 784,325 921,636 48,335 11,941,636 832,660<br />
Total<br />
$ 20,250,000 3,453,326 2,308,422 278,168 22,558,422 3,731,494<br />
76
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Pledged Revenue<br />
The <strong>City</strong> has a number <strong>of</strong> debt issues that involve the pledging <strong>of</strong> revenues. The amounts and terms <strong>of</strong><br />
the remainder <strong>of</strong> these commitments and the purposes for which the proceeds <strong>of</strong> the debt issuances are<br />
utilized are indicated in the summary <strong>of</strong> long-term bonds and loans and notes outstanding at year-end<br />
presented in this note. For the current year, debt service payments as a percentage <strong>of</strong> the pledged gross<br />
revenue (net <strong>of</strong> certain expenses where so specified in debt covenants) are indicated in the table below.<br />
These percentages also approximate the relationship <strong>of</strong> debt service to pledged revenue for the<br />
remainder <strong>of</strong> the term <strong>of</strong> the commitment.<br />
Description <strong>of</strong> pledged revenue/debt:<br />
Base rental payments<br />
Annual amount<br />
<strong>of</strong> pledged<br />
revenue (net <strong>of</strong><br />
expenses, where<br />
required)<br />
Annual debt<br />
service<br />
payments (<strong>of</strong> all<br />
debt secured by<br />
this revenue)<br />
Debt service as<br />
a percentage <strong>of</strong><br />
pledged revenue<br />
Future amount<br />
<strong>of</strong> pledged<br />
revenue<br />
Parking Authority Refunding 2002 $ 1,156,102 1,113,836 96% 5,553,138<br />
Public Finance Authority 2011, Refunding 2009 2,446,715 2,297,278 94% 19,117,150<br />
Public Finance Authority 2004 2,549,838 2,531,638 99% 55,346,171<br />
Parking Structure 6 725,466 725,466 100% 49,481,217<br />
Library bond tax revenue<br />
Main Library Improvements Refunding 2012 1,735,540 1,860,937 107% 13,493,805<br />
Wastewater charges for services<br />
Hyperion Project Revenue Refunding 2012, 20 10,240,845 2,574,738 25% 23,703,326<br />
Bonds<br />
On November 16, 2011 the <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority issued $32,065,000 <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong> Public Financing Authority Lease Revenue Bonds Series 2011A bearing interest from 4.00%<br />
to 5.00% with a maturity date <strong>of</strong> June 1, 2031 to fund demolition and construction <strong>of</strong> Parking<br />
Structure 6.<br />
Additionally at that same date the <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority issued $8,625,000 <strong>of</strong><br />
<strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Refunding Bonds Series 2011B bearing<br />
interest from 2.00% to 4.00% with a maturity <strong>of</strong> December 1, 2020. The bonds were issued to refund<br />
the <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Series 2002A (Public Safety Facility<br />
Project). The aggregate difference in debt service between the refunding debt and the refunded debt is<br />
$3,065,323 and resulted in an economic gain <strong>of</strong> $614,011. The reacquisition price exceeded the net<br />
carrying value <strong>of</strong> the old debt by $302,320. This amount is being netted against the new debt and<br />
amortized over the remaining life <strong>of</strong> the new debt, which is equal to the life <strong>of</strong> the refunded debt.<br />
On May 30, 2012 the <strong>City</strong> issued $11,325,000 <strong>of</strong> General Obligation Refunding Bonds, Series 2012<br />
(Library Improvement Project) bearing interest from 0.20% to 4.00% with a maturity <strong>of</strong> July 1, 2022<br />
77
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
to refund the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> General Obligation Bonds Series 2002 (Library Improvement<br />
Project). The aggregate difference in debt service between the refunding debt and the refunded debt is<br />
$3,604,153 and resulted in an economic gain <strong>of</strong> $1,936,574. The reacquisition price exceeded the net<br />
carrying value <strong>of</strong> the old debt by $57,773. This amount is being netted against the new debt and<br />
amortized over the life <strong>of</strong> the new debt which is equal to the life <strong>of</strong> the refunded debt. At June 30,<br />
2012 $13,750,000 <strong>of</strong> the refunded bonds were still outstanding and have not been included in the<br />
accompanying financial statements. The defeased 2002 Library Improvement Bonds were called in<br />
full on July 1, 2012.<br />
Also on May 30, 2012, the <strong>City</strong> issued $8,955,000 <strong>of</strong> Wastewater Refunding Revenue Bonds, Series<br />
2012A bearing interest from 2.00% to 4.00%. These bonds were issued to refund the <strong>City</strong> <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong> Wastewater Enterprise Revenue Bonds (Hyperion Project) 1993 Refunding Series. The<br />
aggregate difference in debt service between the refunding debt and the refunded debt is $2,197,059<br />
and resulted in an economic gain <strong>of</strong> $1,883,576. The reacquisition price exceeded the carrying amount<br />
<strong>of</strong> the old debt by $724,535. This amount is being netted against the new debt and amortized over the<br />
remaining life <strong>of</strong> the new debt, which is equal to the old debt.<br />
Dissolution <strong>of</strong> Redevelopment<br />
The Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (Former Agency) was dissolved February 1,<br />
2012. The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> agreed to become the <strong>Santa</strong> <strong>Monica</strong> Successor Agency (Successor<br />
Agency) and become responsible for the wind down <strong>of</strong> the Former Agency. The assets and liabilities<br />
<strong>of</strong> the Former Agency were transferred to the Successor Agency including any debt that existed at the<br />
date <strong>of</strong> the transfer. See note 17.<br />
Bond Rating Review<br />
On October 9, 2012 Moody’s Investors Service issued a statement that the debt ratings <strong>of</strong> 32<br />
California cities would come under review. On December 17, 2012, Moody’s downgraded the <strong>City</strong>’s<br />
Lease Revenue Bonds to Aa2 from Aa1 citing that Moody’s opinion that a two notch rating distinction<br />
between the <strong>City</strong>’s Aaa general obligation bond rating and the Aa2 lease-backed obligation reflects the<br />
weaker security pledge for the lease-backed obligations. These bonds include the Public Financing<br />
Authority Lease Revenue Refunding Bonds, Series 2011 and 2009 (Public Safety Facility Project),<br />
Series 2011A and Series 2004 (Civic Center Parking Project).<br />
(10) FUND DEFICITS<br />
Capital Projects Funds. A deficit fund balance in the amount <strong>of</strong> $187,396 exists in the Disaster<br />
Relief Fund. This fund balance deficit is primarily due to timing <strong>of</strong> revenue and expenditure<br />
recognition.<br />
Proprietary Funds. A net deficit in the amount <strong>of</strong> $4,228,604 exists in the Airport Fund due to<br />
reductions in revenue and increased expenses compared to previous years. The deficit is expected to<br />
be funded by increased future fees.<br />
78
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
(11) INTERFUND TRANSACTIONS<br />
The following tables summarize the due to/from other funds, interfund advances to/from, and transfers<br />
in/out as <strong>of</strong> and for the fiscal year ended June 30, 2012.<br />
Advances to/from<br />
Advances to/from other funds at June 30, 2012 are as follows:<br />
Advances to<br />
Advances from<br />
(receivable fund) (payable fund) Amount<br />
General Fund Nonmajor governmental funds $ 3,842,973<br />
Private-purpose trust fund 21,382,237 (1)<br />
Airport fund 13,335,039<br />
Nonmajor enterprise funds 62,081<br />
Total General Fund 38,622,330<br />
Nonmajor governmental funds Private-purpose trust fund 9,023,266 (1)<br />
Total advances to/from $ 47,645,596<br />
(1) Represents promissory notes payable due from the Successor Agency to the <strong>City</strong>.<br />
Management believes, in consultation with legal counsel, that the obligations <strong>of</strong> the former<br />
redevelopment agency due the <strong>City</strong> are enforceable obligations payable by the Successor<br />
Agency trust under the requirements <strong>of</strong> Assembly Bill (AB) 1X26 and AB 1484. The <strong>City</strong>’s<br />
position on this issue is not a position <strong>of</strong> settled law and there is considerable legal uncertainty<br />
regarding this issue. It is reasonably possible that a legal determination may be made at a later<br />
date by an appropriate judicial authority that would resolve this issue unfavorably to the <strong>City</strong>.<br />
Advances represent loans made to provide financing resources for capital projects. These amounts are<br />
expected to be repaid in future years, subject to the various loan terms. None <strong>of</strong> the above balances<br />
are expected to be repaid within one year.<br />
79
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Due from/to<br />
Balances due to/from other funds at June 30, 2012 are as follows:<br />
Due from<br />
(receivable fund)<br />
Due to<br />
(payable fund)<br />
Amount<br />
General Fund Private-purpose trust fund $ 59,216 (1)<br />
Nonmajor governmental funds 6,599,216<br />
Nonmajor enterprise funds 1,072,814<br />
Total General Fund 7,731,246<br />
Nonmajor governmental funds Nonmajor governmental funds 543,072<br />
Private-purpose trust fund General Fund 30,880,832 (1)<br />
Nonmajor governmental funds 5,919,526 (1)<br />
Total private-purpose trust fund 36,800,358<br />
Total due to/from $ 45,074,676<br />
(1) Represents interfund receivables/payables due to/from the Successor Agency based on the<br />
California State Department <strong>of</strong> Finance Due Diligence Reviews and outstanding passthrough<br />
payments due taxing entities per the Recognized Obligation Payment Schedule as<br />
<strong>of</strong> June 30, 2012.<br />
Due to/from other funds are primarily short term loans made to eliminate negative cash balances at<br />
year end. Due to/from private purpose trust fund are payments due to/from the Successor Agency<br />
determined by California State Department <strong>of</strong> Finance Due Diligence Reviews conducted after June<br />
30, 2012 (See Note 18). These balances are expected to be repaid within one year.<br />
80
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Transfers<br />
Transfers to/from other funds for the fiscal year ended June 30, 2012 are as follows:<br />
Transfer in<br />
(receivable fund)<br />
Transfer out<br />
(payable fund)<br />
Amount<br />
General Fund Special Revenue Source Fund $ 583,985 (1)<br />
Nonmajor governmental funds 3,982,746 (2)<br />
Resource Recovery and Recycling Fund 807,636 (3)<br />
Big Blue Bus Fund 91,494 (4)<br />
Wastewater Fund 960,345 (5)<br />
Nonmajor enterprise funds 4,722,270 (6)<br />
Internal service funds 127,637 (7)<br />
Total General Fund 11,276,113<br />
Nonmajor governmental funds General Fund 17,273,205 (8)<br />
Earthquake Redevelopment Fund 2,826,794 (9)<br />
Wastewater Fund 73,159 (10)<br />
Nonmajor governmental funds 67,278,211 (8)<br />
Nonmajor enterprise funds 73,159 (10)<br />
Total nonmajor governmental funds 87,524,528<br />
Wastewater Fund Nonmajor enterprise funds 1,199,442 (11)<br />
Total Wastewater Fund 1,199,442<br />
Airport Fund General Fund 28,429 (12)<br />
Total Airport Fund 28,429<br />
Big Blue Bus Fund Nonmajor governmental funds 802,452 (13)<br />
Total Big Blue Bus Fund 802,452<br />
Nonmajor enterprise funds General Fund 8,248,298 (14)<br />
Earthquake Redevelopment Fund 3,670,438 (15)<br />
Special Revenue Source Fund 158,439 (16)<br />
Nonmajor enterprise funds 12,480 (17)<br />
Nonmajor governmental funds 404,878 (18)<br />
Total nonmajor enterprise funds 12,494,533<br />
Internal service funds Internal service funds 2,178,397 (19)<br />
Total internal service funds 2,178,397<br />
Total transfers $ 115,503,894<br />
(1) Transfer <strong>of</strong> monies to subsidize housing, homeless programs and transportation management project<br />
expenditures.<br />
(2) Transfer to subsidize current and future housing, streets and roads, senior nutrition, library, transportation<br />
management, redevelopment area projects, and various operating expenditures.<br />
(3) Transfer to subsidize recycling and resource recovery expenses.<br />
(4) Transfer to subsidize transit <strong>of</strong>ficers' salaries and transit mall maintenance.<br />
(5) Transfer to subsidize environmental programs expenditures.<br />
(6) Transfer to subsidize environmental programs, parking and traffic expenditures.<br />
(7) Transfer to subsidize Workers’ Compensation Self-Insurance Fund staff time.<br />
(8) Transfer for the payment <strong>of</strong> debt service and to subsidize housing program expenditures.<br />
81
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
(9) Transfer for the payment <strong>of</strong> debt service.<br />
(10) Transfer to subsidize environmental programs, stormwater and treatment facility expenses.<br />
(11) Transfer to subsidize operating expenses associated with the <strong>Santa</strong> <strong>Monica</strong> Urban Run<strong>of</strong>f Recycling<br />
Facility and stormwater-related work performed by Public Works Management Department’s Wastewater<br />
Division.<br />
(12) Transfer to subsidize airport related expenses.<br />
(13) Transfer to subsidize transportation related expenses.<br />
(14) Transfer to subsidize cemetery management and civic auditorium expenses.<br />
(15) Transfer to subsidize parking and traffic expenses.<br />
(16) Transfer to subsidize water and environmental remediation expenses.<br />
(17) Transfer to subsidize stormwater management expenses.<br />
(18) Transfer to subsidize cemetery management expenses.<br />
(19) Transfer to subsidize General Liability/Auto Self-Insurance Fund staff time.<br />
82
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
(12) RESTRICTED NET ASSETS<br />
Restricted net assets are subject to external legal constraints. The following categories <strong>of</strong> net assets<br />
are restricted as to use by agreements with creditors, developers, grantors, or laws or regulations <strong>of</strong><br />
other governments: debt service, Clean Beaches and Ocean Parcel Tax, Housing Authority,<br />
Community Development Block Grant, Citizens Option for Public Safety, Air Quality Management<br />
District, development projects, Asset Seizure, streets projects, low- and moderate-income housing,<br />
MTBE settlement, perpetual care, miscellaneous medical coverage and construction <strong>of</strong> rail system.<br />
The remaining categories <strong>of</strong> funds, Tenant Ownership Rights Charter Amendment and Rent Control,<br />
are restricted as to use by law.<br />
Net assets for governmental activities at June 30, 2012, are restricted as follows:<br />
Housing Authority $ 1,862,609<br />
Tenant Ownership Rights Charter Amendment * 13,770,118<br />
Community Development Block Grant 12,286,355<br />
Citizens Option for Public Safety 190,893<br />
Rent control * 1,434,684<br />
Air Quality Management District 710,582<br />
Asset seizure 526,756<br />
Streets projects 773,493<br />
Housing Projects Fund 55,955,727<br />
Total housing and community development 87,511,217<br />
Clean Beaches and Ocean Parcel Tax * 10,265,875<br />
Miscellaneous grants 14,864,749<br />
Debt service 3,598,618<br />
Development projects 37,342,114<br />
Perpetual care - nonexpendable * 9,146,899<br />
Pollution remediation MTBE settlement 9,234,917<br />
Total restricted net assets $ 171,964,389<br />
Of the net assets for business-type activities at June 30, 2012 totaling $568,640,908, $1,730,988 is<br />
restricted for construction <strong>of</strong> a rail system and $14,293,247 is restricted for Prop 1B and ARRA.<br />
* Net assets restricted by enabling legislation.<br />
(13) FUND BALANCES<br />
In the fund financial statements, nonspendable, restricted for, committed to, assigned to, and<br />
unassigned segregate portions <strong>of</strong> fund balances that are either not available or have been earmarked for<br />
specific purposes. These fund balance categories are in accordance with GASB 54 and were<br />
implemented during the prior fiscal year.<br />
83
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
In governmental funds, nonspendable fund balances are presented as a component <strong>of</strong> fund balances as<br />
follows:<br />
General Fund<br />
Capital projects<br />
fund<br />
Special Revenue<br />
Source Fund<br />
Prepaids<br />
Since these assets are goods or services already purchased, they do not represent available expendable<br />
resources.<br />
Advances to other funds<br />
Reflects the balances due, net <strong>of</strong> deferred interest revenues, from other funds that are long-term in<br />
nature and do not represent available expendable resources <strong>of</strong> the <strong>City</strong>.<br />
Perpetual care<br />
Represents balance <strong>of</strong> funds held by the <strong>City</strong> restricted for use for expenditures associated with<br />
perpetual care <strong>of</strong> the <strong>City</strong>'s cemetery and mausoleum.<br />
Notes receivable<br />
Reflects the balances due on loans that are long-term in nature and do not represent available<br />
expendable resources <strong>of</strong> the <strong>City</strong>.<br />
In governmental funds, restricted fund balances are presented as a component <strong>of</strong> fund balances as<br />
follows:<br />
Capital projects<br />
fund<br />
Special Revenue<br />
Source Fund<br />
Nonmajor<br />
governmental<br />
funds<br />
Nonmajor<br />
governmental<br />
funds<br />
Total<br />
governmental<br />
funds<br />
Nonspendable<br />
Prepaids $ 205,066<br />
— 26,770 231,836<br />
Advances 20,863,297 — 1,870,656 22,733,953<br />
Perpetual care — — 9,146,899 9,146,899<br />
Notes receivable 1,113,127 12,287,266 — 13,400,393<br />
Total nonspendable $ 22,181,490 12,287,266 11,044,325 45,513,081<br />
Total<br />
governmental<br />
funds<br />
General Fund<br />
Restricted for<br />
Notes receivable $ 8,476,356 12,627,892 81,246,984 102,351,232<br />
Special purposes 34,580,093 87,843 16,922,448 51,590,384<br />
Low-and moderate-income housing — 994,407 2,975,520 3,969,927<br />
Childcare center — 969,009 — 969,009<br />
Parks — 481,871 — 481,871<br />
Arts — 180,000 — 180,000<br />
Animal shelter — 21,456 — 21,456<br />
Debt service — — 7,150,832 7,150,832<br />
Total restricted $ 43,056,449 15,362,478 108,295,784 166,714,711<br />
84
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Notes receivable<br />
Reflects the balances due on loans that are long-term in nature. Amounts, when collected, will be<br />
restricted as to use.<br />
Special purposes<br />
Represents amounts restricted externally by creditors, grantors, contributors, or laws or regulations <strong>of</strong><br />
other governments or imposed by law through constitutional provisions or enabling legislation.<br />
Low- and moderate-income housing<br />
Represents funds restricted for low- and moderate-income housing.<br />
Childcare center<br />
Represents unspent balance <strong>of</strong> developer fees restricted for future childcare center.<br />
Parks<br />
Represents unspent balance <strong>of</strong> developer fees restricted for park projects.<br />
Arts<br />
Represents balance <strong>of</strong> funds received from various sources to be used for arts projects.<br />
Animal shelter<br />
Represents unspent balance <strong>of</strong> contributions from citizens that are restricted for use for the <strong>City</strong>’s<br />
Animal Shelter.<br />
Debt service<br />
Represents balance <strong>of</strong> funds held by trustees for future debt service and associated payments in the<br />
Debt Service Fund.<br />
In governmental funds, committed fund balances are presented as a component <strong>of</strong> fund balances as<br />
follows:<br />
General Fund<br />
Capital projects<br />
fund<br />
Special Revenue<br />
Source Fund<br />
Nonmajor<br />
governmental<br />
funds<br />
Total<br />
governmental<br />
funds<br />
Committed to<br />
Overnight accommodations $ 490,000 820,854 — 1,310,854<br />
Early childhood development 150,000 — — 150,000<br />
Lifeguard headquarters — — 10,000 10,000<br />
Legal costs — — 41,976 41,976<br />
Total committed $ 640,000 820,854 51,976 1,512,830<br />
Overnight accommodations<br />
Represents funds committed to overnight accommodations per the 1990 Low Cost Lodging Mitigation<br />
Fee Ordinance.<br />
Early childhood development<br />
Represents funds committed to early childhood development.<br />
85
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Lifeguard headquarters<br />
Represents funds committed to the lifeguard headquarters.<br />
Legal costs<br />
Represents funds committed to legal expenses.<br />
In governmental funds, assigned fund balances are presented as a component <strong>of</strong> fund balances as<br />
follows:<br />
Capital projects<br />
fund<br />
Special Revenue<br />
Source Fund<br />
Nonmajor<br />
governmental<br />
funds<br />
Total<br />
governmental<br />
funds<br />
General Fund<br />
Assigned to<br />
Continuing capital projects $ 19,051,593 14,391,625 4,653,211 38,096,429<br />
Future capital projects 31,290,622 — — 31,290,622<br />
Expenditure control budget 1,619,753 — — 1,619,753<br />
Encumbrances 3,847,650 3,714,808 81,521 7,643,979<br />
Other purposes 177,343,853 — 9,708,858 187,052,711<br />
Total assigned $ 233,153,471 18,106,433 14,443,590 265,703,494<br />
Continuing capital projects<br />
Reflects the amount needed to fund the full cost <strong>of</strong> uncompleted capital projects at June 30, 2012.<br />
Future capital projects<br />
Represents funds for future capital project expenditures.<br />
Expenditure control budget accounts<br />
Represents expenditure control budget amounts for department use.<br />
Encumbrances<br />
Encumbrances outstanding at year-end are reported as a component <strong>of</strong> restricted, committed, or<br />
assigned fund balances since they do not constitute expenditures or liabilities.<br />
Other purposes<br />
Represents funds assigned for other purposes including amounts set aside for future payments to<br />
PERS, compensated absences, <strong>City</strong> Hall renovations, Gillette and Boeing remediation payments, and<br />
other purposes.<br />
86
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
In governmental funds, unassigned fund balances are presented as a component <strong>of</strong> fund balances as<br />
follows:<br />
General Fund<br />
Capital projects<br />
fund<br />
Special Revenue<br />
Source Fund<br />
Nonmajor<br />
governmental<br />
funds<br />
Total<br />
governmental<br />
funds<br />
Unassigned<br />
Operating and<br />
capital contingency $ 46,269,728<br />
— — 46,269,728<br />
Unrealized gain 266,788 — — 266,788<br />
Future expenditures 56,878,499 — — 56,878,499<br />
Economic uncertainty 9,700,000 — — 9,700,000<br />
Other unassigned 4,110,856 — (187,396) 3,923,460<br />
Total unassigned $ 117,225,871<br />
— (187,396) 117,038,475<br />
Operating and capital contingency<br />
Represents funds for operating and capital contingency.<br />
Unrealized gain<br />
Represents management’s intent not to liquidate investments to realize the reported gains in the<br />
following year.<br />
Future expenditures<br />
Represents funds for future expenditures.<br />
Economic uncertainty<br />
Represents funds to mitigate potential revenue losses due to economic uncertainty.<br />
Other unassigned<br />
Represents residual classification for the General Fund. In other governmental funds, expenditures<br />
incurred for specific purposes exceeded the amounts restricted, committed or assigned, therefore it was<br />
necessary to report a negative unassigned fund balance.<br />
(14) LITIGATION AND CONTINGENCIES<br />
Litigation<br />
The <strong>City</strong> is regularly subject to certain legal proceedings and claims that arise in the normal course <strong>of</strong><br />
<strong>City</strong> operations. Many <strong>of</strong> these have not yet been fully adjudicated. In the opinion <strong>of</strong> the <strong>City</strong><br />
Attorney, there are adequate legal defenses to these actions and it is not anticipated that there will be<br />
any adverse material effect on the financial position <strong>of</strong> the <strong>City</strong>.<br />
Grants<br />
The <strong>City</strong> recognizes as revenue, grant monies received as reimbursement for costs incurred in certain<br />
Federal and State programs it administers. Although the <strong>City</strong>’s Federal grant programs have been<br />
audited through June 30, 2011 in accordance with the requirements <strong>of</strong> the Federal Single Audit Act <strong>of</strong><br />
87
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
1997 and the related U.S. Office <strong>of</strong> Management and Budget Circular A-133, these programs may be<br />
subject to financial and compliance audits by the reimbursing agencies. The amount, if any, <strong>of</strong><br />
expenditures which may be disallowed by the granting agencies cannot be determined at this time,<br />
although the <strong>City</strong> expects such amounts, if any, to be immaterial.<br />
Construction Commitments<br />
The <strong>City</strong> has a number <strong>of</strong> construction projects currently underway. Purchase orders, contracts and<br />
other commitments for these projects are recorded in order to reserve the portion <strong>of</strong> the applicable<br />
appropriation and are recorded at year-end as assignments <strong>of</strong> fund balances. Approximately $69.4<br />
million will be payable upon future performance under these contracts.<br />
Operating Lease Revenue/Expenses<br />
The <strong>City</strong> has entered into operating lease arrangements as lessor for property. The following schedule<br />
is an analysis <strong>of</strong> the <strong>City</strong>’s investment in property under operating leases by major classes as <strong>of</strong> June<br />
30, 2012:<br />
Land $ 144,038,074<br />
Buildings 38,720,266<br />
Improvements other than buildings 10,302,396<br />
Machinery and equipment 1,782,774<br />
Infrastructure 8,213,438<br />
203,056,948<br />
Less: Accumulated depreciation (34,236,695)<br />
Total $ 168,820,253<br />
88
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
The following is a schedule <strong>of</strong> both future minimum lease rental revenue to be received by the <strong>City</strong> as<br />
lessor and lease payments to be made by the <strong>City</strong> as lessee under operating leases that have initial or<br />
remaining noncancelable lease terms in excess <strong>of</strong> one year as <strong>of</strong> June 30, 2012:<br />
Fiscal year ending June 30 Rental revenue Lease payments<br />
2013 $ 8,968,397<br />
2,257,352<br />
2014 8,721,884 2,257,352<br />
2015 7,791,598 2,257,352<br />
2016 4,774,896 2,257,352<br />
2017 4,453,027 2,108,990<br />
2018 - 2022 14,460,276 5,683,842<br />
2023 - 2027 12,393,887 964,018<br />
2028 - 2032 10,487,510 —<br />
2033- 2037 6,336,010 —<br />
2038 - 2042 5,888,804 —<br />
2043 - 2047 5,449,812 —<br />
2048 - 2052 3,862,684 —<br />
2053 - 2057 3,245,250 —<br />
2058 - 2062 2,986,684 —<br />
2063 - 2067 1,941,344 —<br />
Total $ 101,762,063<br />
17,786,258<br />
The total long-term lease rental revenues and expenditures/expenses for the year ended June 30, 2012,<br />
were $9,012,465 and $2,342,062, respectively.<br />
(15) SELF-INSURANCE<br />
The <strong>City</strong> is exposed to various risks <strong>of</strong> loss related to torts; theft <strong>of</strong>, damage to, and destruction <strong>of</strong><br />
assets; errors and omissions; injuries to employees and others; and natural disasters. The <strong>City</strong> has<br />
chosen to establish risk financing internal service funds where assets are set aside for claim<br />
settlements associated with such risks <strong>of</strong> loss up to certain limits and has obtained excess liability<br />
coverage through the Authority for California Cities Excess Liability (ACCEL), a joint powers<br />
authority <strong>of</strong> twelve medium-size California municipalities. ACCEL is a member <strong>of</strong> the California<br />
State Association <strong>of</strong> Counties Excess Insurance Authority for the purpose <strong>of</strong> providing access to<br />
excess workers’ compensation coverage for major employee injury risks through a program <strong>of</strong> pooled<br />
self-insurance/re-insurance and insurance on a risk sharing basis.<br />
The <strong>City</strong> retains self-insurance up to $1,000,000 for general liability, automobile liability, and bus<br />
operations liability. The ACCEL pool covers all general liability losses between $1,000,000 and<br />
$5,000,000, and purchases excess liability insurance to cover losses over $5,000,000 and up to<br />
$100,000,000. The <strong>City</strong> shares limits with another southern California city to cover losses over<br />
$100,000,000 and up to $150,000,000. The <strong>City</strong> retains self-insurance up to $750,000 for workers’<br />
compensation. California State Association <strong>of</strong> Counties Excess Insurance Authority covers up to an<br />
additional $4,000,000 for workers’ compensation and arranges for excess <strong>of</strong> workers’ compensation<br />
89
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
over $5,000,000 and up to statutory limits. No claim settlements have exceeded insurance coverage in<br />
any <strong>of</strong> the past three years.<br />
In order to provide funds to pay claims, ACCEL collects premiums from each member. The<br />
premiums paid are credited with investment income at the rate earning on the Authority’s investments.<br />
Based on ACCEL’s June 30, 2012 audited financial statements, the net reserves and incurred but not<br />
reported (IBNR) amounts related to the <strong>City</strong> were $4,960,239 (11.6% <strong>of</strong> ACCEL’s total net reserves<br />
and IBNR) net <strong>of</strong> unpaid claims with ACCEL. Total assets <strong>of</strong> ACCEL at June 30, 2012 were<br />
$42,607,556. ACCEL has no capital contributions.<br />
The <strong>City</strong>’s unpaid claims liabilities are based on the results <strong>of</strong> actuarial studies. The unpaid claims<br />
liabilities are compiled by the Risk Manager <strong>of</strong> the <strong>City</strong> and include amounts for claims incurred but<br />
not reported as <strong>of</strong> year-end. Claims liabilities are calculated considering the effects <strong>of</strong> inflation, recent<br />
claim settlement trends including frequency and amount <strong>of</strong> payouts and other economic and social<br />
factors. Net present values <strong>of</strong> the unpaid claims liabilities are estimated for the year ended June 30,<br />
2012, based on interest rates <strong>of</strong> 2.0% for General Liability and Automobile and 5.0% for Workers’<br />
Compensation. Revenues <strong>of</strong> the risk management funds, together with funds to be provided in the<br />
future, are expected to provide adequate resources to meet liabilities as they come due.<br />
Nonincremental claims expenses have not been included as part <strong>of</strong> the liability for claims.<br />
Changes in the liability for claims during the past two fiscal years for the self-insurance funds follow:<br />
Current-year<br />
claims and<br />
Fund (by fiscal year)<br />
Beginning <strong>of</strong><br />
year<br />
changes in<br />
estimates<br />
Claims<br />
payments End <strong>of</strong> year<br />
Due within<br />
one year<br />
June 30, 2011:<br />
General Liability and Automobile $ 4,470,061 (532,668) (983,459) 2,953,934 994,520<br />
Bus 2,479,527 576,551 (412,905) 2,643,173 1,509,769<br />
Workers' Compensation 24,349,238 5,451,428 (6,899,485) 22,901,181 4,612,023<br />
$ 31,298,826 5,495,311 (8,295,849) 28,498,288 7,116,312<br />
June 30, 2012:<br />
General Liability and Automobile 2,953,934 1,783,915 (888,496) 3,849,353 1,426,274<br />
Bus 2,643,173 1,017,658 (947,775) 2,713,056 1,524,563<br />
Workers' Compensation 22,901,181 8,450,102 (6,175,395) 25,175,888 5,125,492<br />
$ 28,498,288 11,251,675 (8,011,666) 31,738,297 8,076,329<br />
(16) EMPLOYEE BENEFIT PROGRAMS<br />
<strong>Santa</strong> <strong>Monica</strong> Public Employees’ Retirement Plan<br />
The <strong>City</strong>’s defined benefit pension plan, <strong>Santa</strong> <strong>Monica</strong> Public Employees’ Retirement Plan (Plan)<br />
provides retirement and disability benefits, annual cost-<strong>of</strong> living adjustments, and death benefits to<br />
plan members and beneficiaries. The Plan is part <strong>of</strong> the Public Agency portion <strong>of</strong> the California<br />
Public Employees Retirement System (CalPERS), an agent multiple-employer plan administered by<br />
CalPERS, which acts as a common investment and administrative agent for participating public<br />
employers within the State <strong>of</strong> California. State statutes within the Public Employees’ Retirement Law<br />
establish a menu <strong>of</strong> benefit provisions as well as other requirements. The <strong>City</strong> selects optional benefit<br />
provisions from the benefit menu by contract with CalPERS and adopts those benefits through <strong>City</strong><br />
90
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
ordinance. CalPERS issues a separate comprehensive annual financial report available from the<br />
CalPERS Executive Office, 400 Q Street, Sacramento, California 95811.<br />
Plan Description<br />
All full-time employees <strong>of</strong> the <strong>City</strong> and part-time employees who have worked over 1,000 hours<br />
during a fiscal year are eligible to participate in the Plan. The <strong>City</strong> is authorized by statute to establish<br />
and amend all plan provisions. Related benefits vest after five years <strong>of</strong> service. Upon five years <strong>of</strong><br />
service, employees who retire at or after age 50 are entitled to receive an annual retirement benefit.<br />
The defined pension benefit is payable monthly for life, in an amount that varies, from 2.4% at age 50<br />
to a maximum <strong>of</strong> 3% at age 55 for fire safety employees, 3% at age 50 for police safety employees and<br />
2% at age 50 to a maximum <strong>of</strong> 2.7% at age 55 for miscellaneous employees, <strong>of</strong> the employee’s single<br />
highest year’s salary for each year <strong>of</strong> credited service. The Plan also provides death and disability<br />
benefits.<br />
Funding Policy<br />
Active full-time members in the Plan are required to contribute 8% for miscellaneous employees and<br />
9% for safety employees <strong>of</strong> their annual covered salary. The <strong>City</strong> makes such employee contributions<br />
on their behalf and for their account. The <strong>City</strong> is required to contribute the actuarially determined<br />
remaining amounts necessary to fund the benefits for its members. The actuarial methods and<br />
assumptions used are those adopted by the CalPERS Board <strong>of</strong> Administration. CalPERS prepares<br />
separate actuarial valuations for miscellaneous, fire safety and police safety members. The required<br />
employer contribution rate for the fiscal year ended June 30, 2012 was 17.691% for miscellaneous<br />
members; 38.389% for police safety members and 25.813% for fire safety members. The contribution<br />
requirements <strong>of</strong> the plan members are established by State statute and the employer contribution rate is<br />
established and may be amended by CalPERS. The miscellaneous members do reimburse the <strong>City</strong> for<br />
the cost <strong>of</strong> an enhanced benefit at a rate <strong>of</strong> 6.7%.<br />
Annual Pension Cost<br />
For the fiscal year ended June 30, 2012, the <strong>City</strong>’s annual required contribution was $35,294,427.<br />
Additionally, the <strong>City</strong> paid $14,655,376 on behalf <strong>of</strong> employees. The <strong>City</strong> made an additional<br />
$10,000,000 discretionary payment to reduce the unfunded liability. Total payments were<br />
$59,949,803. Of this amount the <strong>City</strong> received reimbursements <strong>of</strong> $10,799,664 from the<br />
miscellaneous members, $971,502 from police safety members and $461,292 from fire safety<br />
members for total reimbursements <strong>of</strong> $12,232,458. The required contribution for the fiscal year ended<br />
June 30, 2012 was determined as part <strong>of</strong> the June 30, 2009 actuarial valuation using the entry age<br />
normal actuarial cost method with the contributions determined as a percentage <strong>of</strong> payroll. The<br />
actuarial assumptions included (a) 7.50% investment rate <strong>of</strong> return (net <strong>of</strong> administrative expenses);<br />
(b) projected salary increases that vary by duration <strong>of</strong> service ranging from 3.3% to 14.2% for<br />
miscellaneous members, from 3.3% to 10.9% for safety members, and (c) 3.00% cost-<strong>of</strong>-living<br />
adjustment. Both (a) and (b) include an inflation component <strong>of</strong> 2.75%. The actuarial value <strong>of</strong> the<br />
Plan’s assets was determined using a technique that smoothes the effect <strong>of</strong> short-term volatility in the<br />
market value <strong>of</strong> investments by computing an expected value <strong>of</strong> assets along with the actual market<br />
value <strong>of</strong> assets. The Plan’s unfunded accrued liability (or excess assets) is being amortized as a level<br />
percentage <strong>of</strong> projected payrolls on a closed basis over a period not to exceed twenty years.<br />
91
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Three Year Trend Information for the Annual Pension Cost Funding for the Plan<br />
Fiscal year ended<br />
June 30<br />
Annual pension cost<br />
(APC)*<br />
Percentage <strong>of</strong> APC<br />
contributed<br />
Net pension<br />
obligation<br />
2012<br />
Miscellaneous $ 21,801,583<br />
100% —<br />
Police 9,838,662 100% —<br />
Fire 3,654,182 100% —<br />
Total $ 35,294,427<br />
2011<br />
Miscellaneous $ 17,383,610<br />
100% —<br />
Police 8,349,726 100% —<br />
Fire 2,889,559 100% —<br />
Total $ 28,622,895<br />
2010<br />
Miscellaneous $ 15,801,745<br />
100% —<br />
Police 7,898,149 100% —<br />
Fire 2,646,812 100% —<br />
Total $ 26,346,706<br />
* Employer contribution only<br />
Pension Funding Information<br />
As <strong>of</strong> June 30, 2011, the date <strong>of</strong> the latest actuarial valuation, the <strong>City</strong>’s unfunded actuarial accrued<br />
liability was $246,203,938 for all plans. This was determined with the same actuarial assumptions<br />
used to calculate the contribution rates. This unfunded liability was primarily the result <strong>of</strong> a decline in<br />
the value <strong>of</strong> the plan assets, less than anticipated investment returns by CalPERS and an increase in<br />
benefits for public safety and miscellaneous employees. The <strong>City</strong> has addressed the unfunded liability<br />
through additional contributions, as determined by CalPERS, in excess <strong>of</strong> the amount required to fund<br />
the current normal cost liability in addition to cost sharing by all employee groups. Maintaining this<br />
funding schedule CalPERS has estimated that the underfunded balance will be amortized over 15<br />
years. The projection <strong>of</strong> benefits for financial reporting purposes does not explicitly incorporate the<br />
potential effects <strong>of</strong> legal or contractual funding limitations.<br />
92
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
PENSION FUNDING INFORMATION<br />
The <strong>City</strong>’s Pension Plan includes separate valuations for Miscellaneous Members, Fire Safety Members and Police Safety Members. The funded status<br />
<strong>of</strong> the Plan for each <strong>of</strong> these member groups for the actuarial valuations performed as <strong>of</strong> June 30, 2009 through 2011 are as follows (valuations for 2012<br />
are not yet available):<br />
re<br />
Entry age<br />
normal accrued<br />
liability<br />
Actuarial value<br />
<strong>of</strong> assets<br />
Unfunded actuarial<br />
accrued liability<br />
(UAAL)<br />
Funded ratio<br />
Annual covered<br />
payroll<br />
UAAL as a percentage<br />
<strong>of</strong> payroll<br />
2011 $ 700,594 $ 553,563 $ 147,031<br />
79.0% $ 125,749<br />
116.9%<br />
2010* 649,678 505,032 144,646 77.7% 119,583 121.0%<br />
2009* 608,461 470,981 137,480 77.4% 116,219 118.3%<br />
Valuation Date<br />
(June 30)<br />
Entry age<br />
normal accrued<br />
liability<br />
Actuarial value<br />
<strong>of</strong> assets<br />
Unfunded actuarial<br />
accrued liability<br />
(UAAL)<br />
Funded ratio<br />
Annual covered<br />
payroll<br />
UAAL as a percentage<br />
<strong>of</strong> payroll<br />
2011 $ 173,591 $ 140,675 $ 32,916<br />
81.0% $ 14,057<br />
234.2%<br />
2010* 163,845 134,365 29,480 82.0% 13,752 214.4%<br />
2009* 155,343 129,054 26,289 83.1% 13,350 196.9%<br />
Valuation Date<br />
(June 30)<br />
Entry age<br />
normal accrued<br />
liability<br />
Actuarial value<br />
<strong>of</strong> assets<br />
Miscellaneous Members<br />
(dollars in thousands)<br />
Fire Safety Members<br />
(dollars in thousands)<br />
Police Safety Members<br />
(dollars in thousands)<br />
Unfunded actuarial<br />
accrued liability<br />
(UAAL)<br />
Funded ratio<br />
Annual covered<br />
payroll<br />
UAAL as a percentage<br />
<strong>of</strong> payroll<br />
2011 $ 307,730 $ 241,473 $ 66,257<br />
78.5% $ 25,800<br />
256.8%<br />
2010* 289,882 226,716 63,166 78.2% 25,907 243.8%<br />
2009* 276,030 215,162 60,868 77.9% 24,169 251.8%<br />
*Required supplementary information - unaudited<br />
93
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Deferred Compensation Plans<br />
The <strong>City</strong> <strong>of</strong>fers to its employees an optional deferred compensation plan created in accordance with<br />
Section 457 <strong>of</strong> the Internal Revenue Code. This plan is available to substantially all employees and<br />
allows participants to defer a portion <strong>of</strong> their current income until future years to shelter such funds<br />
and earnings from state and federal taxation until withdrawal. The deferred compensation is not<br />
available to participants until termination, retirement, death or unforeseeable emergency.<br />
The <strong>City</strong> <strong>of</strong>fers an employer discretionary, defined contribution plan established and governed under<br />
Internal Revenue Code Section 401(a). Employer-only contributions are calculated based upon a<br />
percentage <strong>of</strong> employee compensation under agreements with employee bargaining groups and unions.<br />
For the fiscal year ended June 30, 2012 the total employee contributions were $600,107.<br />
The <strong>City</strong> <strong>of</strong>fers to its as-needed employees a separate Section 457 deferred compensation plan under<br />
the Omnibus Budget Reconciliation Act (OBRA). This plan is available to all as-needed employees<br />
who are not eligible to participate in CalPERS. This plan requires equal employer and employee<br />
contributions based on a percentage <strong>of</strong> earnings. For the fiscal year ended June 30, 2012 the combined<br />
employee/employer contributions were $349,173.<br />
These plans are administered through third-party administrators. The <strong>City</strong> does not perform the<br />
investing function and has no fiduciary accountability for the plans. Thus, plan assets and any related<br />
liabilities to plan participants have been excluded from the <strong>City</strong>’s basic financial statements.<br />
Other Postemployment Benefits<br />
In addition to providing pension benefits through CalPERS, the <strong>City</strong>, in accordance with agreements<br />
with various bargaining units and groups, provides medical insurance benefits that are considered<br />
other postemployment benefits (OPEB) to certain retired employees under a single employer benefit<br />
plan. Employees <strong>of</strong> the Executive Pay Plan group and management employees <strong>of</strong> the Rent Control<br />
Board are eligible for a <strong>City</strong> paid medical insurance benefit if their combined retirement age and years<br />
<strong>of</strong> <strong>City</strong> service equals or exceeds 70. All retirees are allowed to continue participating in one <strong>of</strong> the<br />
<strong>City</strong>’s health plans at the same rate as active employees. The <strong>City</strong> also maintains minimum benefits<br />
for public safety employees provided by the <strong>City</strong>’s contract with its healthcare provider. Members <strong>of</strong><br />
the United Transportation Union upon retirement after ten or more years <strong>of</strong> service and having<br />
accumulated fifty or more sick days are entitled to reimbursement for health insurance premiums up to<br />
the cumulative dollar equivalent <strong>of</strong> those sick days. The <strong>City</strong> pays for OPEB on a pay-as-you-go basis.<br />
Annual OPEB Cost and Net OPEB Obligation<br />
The <strong>City</strong>’s OPEB cost is calculated based on the annual required contribution (ARC) <strong>of</strong> the employer,<br />
an amount actuarially determined in accordance within the parameters <strong>of</strong> GASB 45, Accounting and<br />
Financial Reporting for Employers for Postemployment Benefits Other than Pensions. The ARC<br />
represents a level <strong>of</strong> funding that if paid on an ongoing basis is projected to cover the normal cost each<br />
year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years utilizing the<br />
level percentage <strong>of</strong> projected payroll method. The amortization period is open. The following table<br />
shows the components <strong>of</strong> the <strong>City</strong>’s annual OPEB cost for the year, the amount contributed to the<br />
plan, and changes in the <strong>City</strong>’s OPEB obligation to the plan.<br />
94
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Net OPEB Obligation and Annual OPEB Cost (in thousands)<br />
Annual required contribution $ 2,286<br />
Interest on OPEB obligation 254<br />
Adjustment to annual required contribution (219)<br />
Annual OPEB expense 2,321<br />
Contributions made (675)<br />
Increase in net OPEB obligation 1,646<br />
Net OPEB obligation - beginning <strong>of</strong> the year 5,094<br />
Net OPEB obligation - end <strong>of</strong> the year $ 6,740<br />
Schedule <strong>of</strong> Employer Contributions (in thousands)<br />
Fiscal Year<br />
Ended<br />
June 30<br />
Annual<br />
OPEB Costs<br />
Annual<br />
Contribution<br />
Percentage<br />
Contribution<br />
Net OPEB<br />
Obligation<br />
2012 $ 2,321 $ 675<br />
29.1 % $ 6,740<br />
2011 1,962 586 29.9 5,094<br />
2010 1,861 558 30.0 3,718<br />
Actuarial methods and assumptions<br />
Projections <strong>of</strong> benefits for financial reporting purposes are based on the plan as understood by the <strong>City</strong><br />
and its employees and include the types <strong>of</strong> benefits provided at the time <strong>of</strong> each valuation. The<br />
actuarial methods and assumptions used techniques that are designed to reduce short-term volatility in<br />
actuarial accrued liabilities and the actuarial value <strong>of</strong> assets, consistent with the long-term perspective<br />
<strong>of</strong> the calculations. Actuarial valuations involve estimates <strong>of</strong> the value <strong>of</strong> reported amounts and<br />
assumptions about the probability <strong>of</strong> events far into the future, and that actuarially determined<br />
amounts are subject to continual revision as results are compared to past expectations and new<br />
estimates are made about the future. Calculations are based on the types <strong>of</strong> benefits provided under the<br />
terms <strong>of</strong> the substantive plan at the time <strong>of</strong> each valuation and on the pattern <strong>of</strong> sharing costs between<br />
the employer and plan member at that point. The ARC represents a level <strong>of</strong> funding that if paid on an<br />
ongoing basis is projected to cover the normal cost each year and amortize any unfunded actuarial<br />
liabilities over a period not to exceed 30 years utilizing the level percentage <strong>of</strong> projected payroll<br />
method. The amortization period is open.<br />
In the July 1, 2011 actuarial valuation, the entry age normal actuarial cost method was used. The<br />
actuarial assumptions included a 5.0% rate <strong>of</strong> return, which is a blended rate <strong>of</strong> expected long-term<br />
return on plan assets on the <strong>City</strong>’s own investments calculated based on the funded level <strong>of</strong> the plan at<br />
the valuation date, and an annual health care cost trend <strong>of</strong> 9.5% initially, reduced by decrements to an<br />
ultimate rate <strong>of</strong> 5.0% after 11 years. Both rates include a 3.25% inflation assumption. The remaining<br />
amortization period at July 1, 2011 was thirty years. The projection <strong>of</strong> benefits for financial reporting<br />
purposes does not explicitly incorporate the potential effects <strong>of</strong> legal or contractual funding<br />
limitations.<br />
95
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
OPEB FUNDING INFORMATION (dollars in thousands):<br />
Type <strong>of</strong><br />
Valuation<br />
Valuation date<br />
(July 1)<br />
Actuarial<br />
value <strong>of</strong><br />
assets<br />
Actuarial<br />
accrued<br />
liability<br />
Unfunded actuarial<br />
accrued liability<br />
(UAAL)<br />
Funded ratio<br />
Annual<br />
covered<br />
payroll<br />
UAAL as a<br />
percentage <strong>of</strong><br />
payroll<br />
Interest<br />
rate<br />
Actual 2011 $ — 23,841 23,841 0% 167,724 14.21% 5.00%<br />
Update 2010* — 20,173 20,173 0% 161,290 12.51% 5.00%<br />
Actual 2009* — 18,747 18,747 0% 156,214 12.00% 5.00%<br />
*Rquired supplementary information - unaudited<br />
The schedule <strong>of</strong> funding progress, presented presents multi-year trend information, which shows whether the actuarial value <strong>of</strong> plan assets is increasing<br />
or decreasing over time relative to the actuarial accrued liability for benefits.<br />
96
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Medical Trusts<br />
The <strong>City</strong> contributes, consistent with bargaining unit agreements, monies to medical trusts that provide<br />
postemployment medical benefits to employees. The amount <strong>of</strong> benefits provided to employees under<br />
these plans is limited solely to the amount contributed, related investment earnings, and forfeitures.<br />
During FY 2011-12 the <strong>City</strong> contributed $3,033,059 towards the retiree medical trusts. These are<br />
administered through third-party administrators and the <strong>City</strong> does not perform the investing function<br />
or have other significant responsibility relating to the management <strong>of</strong> plan assets. Thus, plan assets<br />
and any related liabilities have been excluded from the <strong>City</strong>’s basic financial statements.<br />
Pension Plan Amendment<br />
On November 1, 2011, the <strong>City</strong> and the miscellaneous employees agreed to create a second tier to the<br />
retirement plan. The second tier employees are those hired after July 1, 2012 through December 31,<br />
2012 and will be covered by the 2.0% at 55 benefit formula. The Tier 2 employees benefits are<br />
calculated using the 36 highest paid consecutive months (as opposed to 12 for Tier 1 employees) and<br />
the 7% employee required contribution must be paid by the employee. On September 12, 2012, AB<br />
197 was passed, which changed pension benefits. See Note 18.<br />
(17) SUCCESSOR AGENCY TRUST FUND FOR ASSETS OF FORMER REDEVELOPMENT<br />
AGENCY<br />
On December 29, 2011, the California Supreme Court upheld AB 1X26 (“the Bill”) that provides for<br />
the dissolution <strong>of</strong> all redevelopment agencies in the State <strong>of</strong> California. This action impacted the<br />
reporting entity <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> that previously reported a redevelopment agency within<br />
the reporting entity <strong>of</strong> the <strong>City</strong> as a blended component unit.<br />
The Bill provides that upon dissolution <strong>of</strong> a redevelopment agency, either the <strong>City</strong> or another unit <strong>of</strong><br />
local government will agree to serve as the “successor agency” to hold the assets until they are<br />
distributed to other units <strong>of</strong> state and local government. On January 10, 2012, the <strong>City</strong> Council elected<br />
to become the Successor Agency for the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> in<br />
accordance with the Bill as part <strong>of</strong> <strong>City</strong> resolution number 10647.<br />
After enactment <strong>of</strong> the law, which occurred on June 28, 2011, the redevelopment agencies in the State<br />
<strong>of</strong> California cannot enter into new projects, obligations or commitments. Subject to the approval <strong>of</strong> a<br />
newly established oversight board, remaining assets can only be used to pay enforceable obligations in<br />
existence at the date <strong>of</strong> the dissolution (including the completion <strong>of</strong> any unfinished projects that were<br />
subject to legally enforceable contractual commitments).<br />
In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary<br />
to pay the estimated annual installment payments on enforceable obligations <strong>of</strong> the former<br />
redevelopment agency until all enforceable obligations <strong>of</strong> the former redevelopment agency have been<br />
paid in full and all assets have been liquidated.<br />
The Bill directs the State Controller <strong>of</strong> the State <strong>of</strong> California to review the propriety <strong>of</strong> any transfer <strong>of</strong><br />
assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If<br />
the public body that received such transfers is not contractually committed to a third party for the<br />
expenditure or encumbrance <strong>of</strong> those assets, the State Controller is required to order the available<br />
assets to be transferred to the public body designated as successor agency by the Bill.<br />
97
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Management believes, in consultation with legal counsel, that the obligations <strong>of</strong> the former<br />
redevelopment agency due to the <strong>City</strong> are enforceable obligations payable by the Successor Agency<br />
trust under the requirement <strong>of</strong> the Bill. The <strong>City</strong>’s position on this issue is not a position <strong>of</strong> settled law<br />
and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal<br />
determination may be made at a later date by an appropriate judicial authority that would resolve this<br />
issue unfavorably to the <strong>City</strong>.<br />
In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on<br />
December 29, 2011) all redevelopment agencies in the State <strong>of</strong> California were dissolved and ceased<br />
to operate as a legal entity as <strong>of</strong> February 1, 2012. Prior to that date, the final seven months <strong>of</strong> the<br />
activity <strong>of</strong> the redevelopment agency continued to be reported in the governmental funds <strong>of</strong> the <strong>City</strong>.<br />
After the date <strong>of</strong> dissolution, the assets and activities <strong>of</strong> the dissolved redevelopment agency are<br />
reported in a private-purpose trust fund in the financial statements <strong>of</strong> the <strong>City</strong>.<br />
The transfer <strong>of</strong> assets and liabilities <strong>of</strong> the former redevelopment agency as <strong>of</strong> February 1, 2012 from<br />
governmental funds <strong>of</strong> the <strong>City</strong> to fiduciary funds was reported in the governmental funds as a net<br />
extraordinary loss in the governmental fund financial statements and a net extraordinary gain for<br />
governmental activities in the government-wide financial statements, which is equal to the<br />
extraordinary loss for the private-purpose trust fund.<br />
On June 27, 2012, AB 1484 was passed. The bill purports to clarify implementation procedures <strong>of</strong> AB<br />
1X26.<br />
Among other requirements, AB 1484 clarified the allowable uses <strong>of</strong> bond proceeds derived from<br />
indebtedness obligations that were issued for the purposes <strong>of</strong> affordable housing prior to January 1,<br />
2011, and were backed by the Low and Moderate Income Housing Fund. The proceeds are allowed to<br />
be used for purposes that are consistent with the indebtedness obligation covenants.<br />
Because <strong>of</strong> the different measurement focus <strong>of</strong> the governmental funds (current financial resources<br />
management focus) and the measurement focus <strong>of</strong> the trust funds (economic resources measurement<br />
focus), the net extraordinary gain recognized in the governmental funds was not the same as the loss<br />
that was recognized in the private-purpose trust fund financial statements.<br />
The difference between the extraordinary gain recognized in the governmental fund financial<br />
statements and the loss recognized in the fiduciary fund financial statements is reconciled as follows:<br />
Total net extraordinary gain reported in governmental funds - decrease to net assets<br />
<strong>of</strong> the Successor Agency Trust Fund $ (13,703,213)<br />
Deferred bond issuance costs reported in the government-wide financial statements -<br />
increase to net assets <strong>of</strong> the Successor Agency Trust Fund 1,657,811<br />
Long term debt reported in the government-wide financial statements -<br />
decrease to net assets <strong>of</strong> the Successor Agency Trust Fund (249,209,678)<br />
Net decrease to net assets <strong>of</strong> the Successor Agency Trust Fund as a result <strong>of</strong><br />
initial transfers $ (261,255,080)<br />
98
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Cash and Investments<br />
Cash and investments as <strong>of</strong> June 30, 2012 are classified in the accompanying financial statements as<br />
follows:<br />
Statement <strong>of</strong> Fiduciary Net Assets:<br />
Cash and investments $ 23,591,249<br />
Cash and investments with fiscal agent 10,424,107<br />
Total cash and investments $ 34,015,356<br />
Investments <strong>of</strong> the Successor Agency are governed by Government Code Section 53601, which<br />
restricts the term and types <strong>of</strong> investments that can be made. See Note 5.<br />
Investments Authorized by Debt Agreements<br />
Investment <strong>of</strong> debt proceeds held by bond trustees are governed by provisions <strong>of</strong> the debt agreements,<br />
rather than the general provisions <strong>of</strong> the California Government Code or the Successor Agency’s<br />
investment policy. The table below identifies the investment types that are authorized for investments<br />
held by the bond trustee. The table also identifies certain provisions <strong>of</strong> these debt agreements that<br />
address interest rate risk and concentration <strong>of</strong> credit risk.<br />
Authorized<br />
Investment Type<br />
Maximum Maximum<br />
Maximum Percentage Investment<br />
Maturity Allowed in One Issuer<br />
U.S Treasury Obligations None None None<br />
Federal Housing Administration Debentures None None None<br />
U.S. Agency Securities None None None<br />
Time Deposits None None None<br />
Unsecured Certificates <strong>of</strong> Deposit 180 days None None<br />
Banker's Acceptances 180 days None None<br />
State Obligations None None None<br />
Repurchase Agreements 1 year None None<br />
Pre-refunded Municipal Obligations None None None<br />
Commercial Paper 270 days None None<br />
Money Market Mutual Funds None None None<br />
Investment Contracts 30 years None None<br />
Disclosures Relating to Interest Rate Risk<br />
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value <strong>of</strong><br />
an investment. Generally, the longer the maturity <strong>of</strong> an investment, the greater the sensitivity <strong>of</strong> its fair<br />
value to changes in market interest rates. One <strong>of</strong> the ways that the Successor Agency manages its<br />
exposure to interest rate risk is by timing cash flows from maturities so that a portion <strong>of</strong> the portfolio<br />
is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and<br />
liquidity needed for operations.<br />
99
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Information about the sensitivity <strong>of</strong> the fair values <strong>of</strong> the Successor Agency’s investments held by<br />
bond trustee to market interest rate fluctuations is provided by the following table that shows the<br />
distribution <strong>of</strong> these investments by maturity.<br />
Maturity<br />
12 Months<br />
Investment Type<br />
or less<br />
Held by Successor Agency<br />
Money market funds $ 4,009,815<br />
Held by bond trustee:<br />
Money market funds 8,675,755<br />
U.S. agency securities 1,748,352<br />
Total $ 14,433,922<br />
Disclosures Relating to Credit Risk<br />
Generally, credit risk is the risk that an issuer <strong>of</strong> an investment will not fulfill its obligation to the<br />
holder <strong>of</strong> the investment. This is measured by the assignment <strong>of</strong> a rating by a nationally recognized<br />
statistical rating organization. Presented below is the minimum rating required by (where applicable)<br />
the California Government Code, the <strong>City</strong>’s investment policy, or debt agreements, and the actual<br />
rating as <strong>of</strong> yearend for each investment type.<br />
Minimum<br />
Legal<br />
Investment Type<br />
Total Rating AAA<br />
Held by Successor Agency $ 4,009,815 AA 4,009,815<br />
Held by bond trustee:<br />
Money market funds 8,675,755 AA 8,675,755<br />
U.S. agency securities 1,748,352 N/A 1,748,352<br />
Total $ 14,433,922 14,433,922<br />
Concentration <strong>of</strong> Credit Risk<br />
No investments in any one issuer (other than U.S. Treasury securities, mutual funds, and investment<br />
pools) represents 5% or more <strong>of</strong> total investments.<br />
Custodial Credit Risk<br />
The Successor Agency does not have significant separate certificates <strong>of</strong> deposit or demand accounts<br />
held by bond trustee that have disclosable custodial credit risk (as defined by GASB Statement No.<br />
40).<br />
For the investments held by bond trustee, the bond trustee selects the investment under the terms <strong>of</strong> the<br />
applicable trust agreement, acquires the investment, and holds the investment on behalf <strong>of</strong> the<br />
reporting government.<br />
100
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
SUCCESSOR AGENCY LONG-TERM LIABILITIES<br />
Changes in long-term liabilities:<br />
Long-term liability activity for the five months ended June 30, 2012, was as follows:<br />
Balance at<br />
July 1, 2011 Additions Reductions<br />
Balance at<br />
June 30, 2012<br />
Due within<br />
one year<br />
Due beyond one<br />
year<br />
Loans and notes payable $ — 96,782,306 — 96,782,306 55,714,283 41,068,023<br />
Term loan — 50,000,000 — 50,000,000 50,000,000 —<br />
Tax allocation bonds — 105,115,000 — 105,115,000 3,255,000 101,860,000<br />
Promissory notes payable<br />
to the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> — 30,405,503 30,405,503 2,700,743 27,704,760<br />
Less deferred amounts:<br />
For issuance discounts — (140,784) (3,368) (137,416) — (137,416)<br />
For issuance premiums — 430,600 10,116 420,484 — 420,484<br />
Deferred loss on refunding — (2,977,444) (78,305) (2,899,139) — (2,899,139)<br />
Total loans, notes and<br />
bonds<br />
payable $ — 279,615,181 (71,557) 279,686,738 111,670,026 168,016,712<br />
A summary <strong>of</strong> long-term bonds and loans outstanding at year end is as follows:<br />
Final<br />
maturity<br />
date<br />
Interest<br />
rate<br />
Balance at<br />
June 30, 2012<br />
Date <strong>of</strong> issue Original issue<br />
Tax allocation bonds:<br />
Ocean Park Redevelopment Refunding 2002 May 1, 2002 $ 19,315,000 July 1, 2018 3.75-5.00% $ 10,115,000<br />
Earthquake Recovery Project 2011 June 7, 2011 41,050,000 July 1, 2042 5.00-5.875% 41,050,000<br />
Earthquake Recovery Project Refunding 2006 April 1, 2006 64,720,000 July 1, 2030 4.00-5.50% 53,950,000<br />
Subtotal tax allocation bonds 105,115,000<br />
Loans and notes:<br />
Wells Fargo Bank (1) Mar 11, 2011 60,000,000 Jan 1, 2018 70% LIBOR plus 1.5% 55,714,283<br />
Bank <strong>of</strong> America Term Loan (2) May 1, 2008 50,000,000 July 15, 2028 LIBOR plus 1.25% 50,000,000<br />
Promissory note to the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (3) June 30, 1981 871,840 June 29, 2028 7% 1,675,711<br />
Promissory note to the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (3) Oct 24, 1978 4,400,000 June 29, 2028 7% 19,706,524<br />
Promissory note to the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (3) June 30, 1981 1,243,266 June 29, 2021 12% 7,506,195<br />
Promissory note to the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (3) Sept 14, 1983 280,837 June 29, 2021 12% 942,554<br />
Promissory note to the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (3) July 1, 1996 346,552 Demand LAIF 574,518<br />
Promissory notes (4) Nov 1, 2010 42,500,000 Jan 1, 2042 6.82% 41,068,023<br />
Subtotal loans and notes 177,187,808<br />
Total $ 282,302,808<br />
(1) To fund various capital projects<br />
(2) To fund low moderate income housing projects<br />
(3) For project area costs including the purchase <strong>of</strong> land and other capital assets<br />
(4) For purchase <strong>of</strong> real estate<br />
101
Annual debt service requirements to maturity are as follows:<br />
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
Fiscal year<br />
ending Tax allocation bonds<br />
Loans payable Promissory notes payable<br />
Total<br />
June 30, Principal Interest Principal Interest Principal* Interest Principal Interest<br />
2013 $ 3,255,000 5,123,479 11,601,732 ** 5,220,979 2,700,743 1,376,776 17,557,475 11,721,234<br />
2014 3,425,000 4,950,227 11,601,730 5,046,943 460,079 1,347,921 15,486,809 11,345,091<br />
2015 3,595,000 4,783,421 11,862,579 4,572,471 440,284 2,587,490 15,897,863 11,943,382<br />
2016 3,755,000 4,620,181 12,119,528 4,101,895 983,239 2,568,761 16,857,767 11,290,837<br />
2017 3,920,000 4,446,063 12,154,831 3,855,109 1,177,023 2,485,977 17,251,854 10,787,149<br />
2018-2022 16,950,000 19,725,436 31,393,926 16,235,267 15,614,979 8,211,510 63,958,905 44,172,213<br />
2023-2027 16,995,000 16,176,463 19,859,270 13,121,641 9,128,787 2,788,213 45,983,057 32,086,317<br />
2028-2032 19,275,000 11,674,854 11,413,257 10,025,855 2,150,503 150,269 32,838,760 21,850,978<br />
2033-2037 14,665,000 7,486,031 10,123,762 7,176,237 — — 24,788,762 14,662,268<br />
2038-2042 19,280,000 2,758,656 14,651,691 3,148,308 — — 33,931,691 5,906,964<br />
$ 105,115,000 81,744,811 146,782,306 72,504,705 32,655,637 21,516,917 284,552,943 175,766,433<br />
* Principal balance increases during some periods due to negative amortization.<br />
** Amount does not include $105.7 million for which negotiations are underway to extend forbearance agreements.<br />
102
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements<br />
For the fiscal year ended June 30, 2012<br />
Pledged Revenue<br />
The Former Redevelopment Agency had a number <strong>of</strong> debt issues that were assumed by the Successor<br />
Agency that involve the pledging <strong>of</strong> revenues. The amounts and terms <strong>of</strong> the remainder <strong>of</strong> these<br />
commitments and the purposes for which the proceeds <strong>of</strong> the debt issuances are utilized are indicated<br />
in the summary <strong>of</strong> long-term bonds and loans and notes outstanding at year end presented in this note.<br />
AB1X26 only allows sufficient tax revenues to be allocated to the Successor Agency in an amount<br />
equal to pay debt service that is deemed to be an enforceable obligation and debt service payments as a<br />
percentage <strong>of</strong> the pledged gross revenue (net <strong>of</strong> certain expenses where so specified in debt covenants)<br />
will always be 100%. These percentages also approximate the relationship <strong>of</strong> debt service to pledged<br />
revenue for the remainder <strong>of</strong> the term <strong>of</strong> the commitment.<br />
Description <strong>of</strong> pledged revenue/debt:<br />
Annual amount <strong>of</strong><br />
pledged revenue (net<br />
<strong>of</strong> expenses, where<br />
required)<br />
Annual debt service<br />
payments (<strong>of</strong> all debt<br />
secured by this<br />
revenue)<br />
Debt service as a<br />
percentage <strong>of</strong><br />
pledged revenue<br />
Future amount <strong>of</strong><br />
pledged revenue<br />
Tax increment<br />
Ocean Park Redevelopment Refunding 2002 $ 1,720,495 $ 1,720,495<br />
100% $ 11,971,645<br />
Earthquake Recovery Project Refunding 2006 2,337,431 2,337,431 100% 78,866,603<br />
Earthquake Recovery Project 2011 2,262,413 2,262,413 100% 96,021,563<br />
Loan Payable 4,788,214 4,788,214 100% 59,151,161<br />
Notes Payable 1,697,440 1,697,440 100% 101,399,989<br />
Term Loan 438,305 438,305 100% 58,735,862<br />
Bond Downgrade<br />
On June 14, 2012, Moody’s downgraded all California Redevelopment Tax Allocation Bonds which<br />
included the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Earthquake Project Redevelopment<br />
Bonds Series 2006. This downgrade triggered a default in the $60,000,000 Wells Fargo loan. Under<br />
the terms <strong>of</strong> the agreement, the remedies for default include declaring the unpaid principal and interest<br />
accrued immediately due and payable or increasing the interest rate <strong>of</strong> the loan by an additional 5%.<br />
On August 7, 2012, Wells Fargo issued a forbearance letter, agreeing to not take action under any <strong>of</strong><br />
the remedies available to them under the agreement for 90 days. Another letter was issued on<br />
November 5, 2012, which extended the forbearance to April 30, 2013, at which time the status <strong>of</strong> this<br />
loan will be evaluated for continuing forbearance as long as the default exists. The <strong>City</strong> cannot predict<br />
the outcome <strong>of</strong> any future evaluations.<br />
A covenant in the $50,000,000 loan from Bank <strong>of</strong> America provides for a default on that loan if any<br />
default occurs under any agreement in connection with any other credit the Former Agency entered<br />
into and any cure period with respect to the default has expired. The bank recognized the Wells Fargo<br />
forbearance letter and elected not to take any action.<br />
Because the default provisions in the Wells Fargo and Bank <strong>of</strong> America loan agreements make the<br />
loans subject to call, the entire principal amount <strong>of</strong> the loans has been reported as a current liability on<br />
the Statement <strong>of</strong> Fiduciary Net Assets.<br />
(18) DUE DILIGENCE REVIEW LIABILITY<br />
AB 1484 requires that two “Due Diligence Reviews” (DDR) be performed, one each for the housing<br />
assets and the non-housing assets <strong>of</strong> the Successor Agency. The purpose <strong>of</strong> these reviews is to<br />
103
CITY OF SANTA MONICA, CALIFORNIA<br />
Notes to Basic Financial Statements, Continued<br />
For the fiscal year ended June 30, 2012<br />
determine the amount <strong>of</strong> unencumbered funds available for distribution to the affected tax entities.<br />
Both DDRs have been completed and filed with the California Department <strong>of</strong> Finance (DOF).<br />
On December 15, 2012, the DOF notified the Successor Agency <strong>of</strong> its determination regarding the<br />
housing DDR review and disallowed $54,515,252 <strong>of</strong> cash transfers. The DOF directed the Successor<br />
Agency to remit $54,515,252 to the County Auditor-Controller (County) by December 21, 2012, for<br />
distribution to the taxing entities, including the <strong>City</strong>. The DOF also disallowed $17,896,159 <strong>of</strong> capital<br />
asset transfers to the <strong>City</strong>; however, because these assets are non-liquid and subject to further review<br />
by the State Controller, the DOF did not consider them to be available for distribution to the taxing<br />
entities as part <strong>of</strong> the DDR process.<br />
The Successor Agency does not agree with the DOF’s determination, however the Successor Agency<br />
has made a payment <strong>of</strong> $12,518,741 to the County, subsequent to June 30, 2012. This amount<br />
represents $54,515,252 less $19,361,188 <strong>of</strong> Bank <strong>of</strong> America term loan proceeds that are restricted as<br />
to use by loan covenants and $22,635,323 <strong>of</strong> low- and moderate-income housing loans that were<br />
disbursed or encumbered under loan commitments entered into before AB 1X26 became effective.<br />
The $12,518,741 has been accrued in the Successor Agency’s financial statements as <strong>of</strong> June 30, 2012.<br />
On January 31, 2013, the Successor Agency filed suit in Sacramento Superior Court contending that<br />
the DOF, by issuing its determination, failed to follow the statutory formulas in AB1484 in respects to<br />
the Bank <strong>of</strong> America loan proceeds and the low- and moderate-income housing loans disbursed had<br />
been committed prior to the effective date <strong>of</strong> AB1X26. Due to the inherent uncertainties involved in<br />
the application <strong>of</strong> AB1X26 and AB1484, the ultimate outcome <strong>of</strong> this issue cannot presently be<br />
determined. Accordingly, no provision for any liability that may result has been recorded in the<br />
financial statements.<br />
Current law allows the DOF to authorize the withholding <strong>of</strong> the <strong>City</strong>’s future sales and property tax<br />
allocations up to the amount that is not remitted to the County by the Successor Agency. As the<br />
Successor Agency has insufficient funds to make this payment, subsequent to year end, the <strong>City</strong><br />
transferred cash to the Successor Agency to make the payment. As such, a Due to Successor Agency<br />
and a Due from <strong>City</strong> in the amount <strong>of</strong> $12,518,741 has been recorded between the <strong>City</strong> and the<br />
Successor Agency as <strong>of</strong> June 30, 2012.<br />
The <strong>City</strong>, as a taxing entity <strong>of</strong> the County, receives a share <strong>of</strong> the payments made by Successor<br />
Agencies to the County; $1,751,267 was accrued at June 30, 2012, in the <strong>City</strong>’s General Fund and<br />
received subsequent to June 30, 2012.<br />
(19) SUBSEQUENT EVENT<br />
On September 12, 2012, AB 340 and AB 197, pension reform bills, were signed into law changing<br />
pension benefits for public employees and will become effective on January 1, 2013. Collectively<br />
known as the California Public Employees Pension Reform Act <strong>of</strong> 2013 (PEPRA), PEPRA creates<br />
new statewide uniformity in pension benefits and impacts the <strong>City</strong>’s participation in CalPERS. The<br />
financial impact <strong>of</strong> these changes cannot be determined at this time.<br />
104
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California<br />
Year Ended June 30, 2012<br />
Supplementary Information
CITY OF SANTA MONICA, CALIFORNIA<br />
Nonmajor Governmental Fund Financial Statements<br />
Capital Projects Funds are used to account for the accumulation <strong>of</strong> resources to be used for the<br />
acquisition or construction <strong>of</strong> major capital facilities <strong>of</strong> the <strong>City</strong> and former Redevelopment Agency. The<br />
nonmajor capital projects funds used in this report are listed below:<br />
Clean Beaches and Ocean Parcel Tax Fund – To account for activity related to implementation<br />
<strong>of</strong> Watershed Management Plan and the passage <strong>of</strong> Measure V in November 2006.<br />
Beach Recreation Fund – To account for beach parking and concession revenues restricted or<br />
committed for expenditures related to beach maintenance and recreation activities.<br />
Housing Authority Fund – To account for the receipt and expenditure <strong>of</strong> Federal and State<br />
funds related to housing programs.<br />
Disaster Relief Fund – To account for Federal and State disaster relief revenues and<br />
expenditures associated with recovery from the January 17, 1994 Northridge Earthquake.<br />
Tenant Ownership Rights Charter Amendment (TORCA) Fund – To account for filing fee<br />
and conversion tax revenues and expenditures related to various housing programs authorized by<br />
Chapter XX <strong>of</strong> the <strong>City</strong> Charter.<br />
Housing Projects Fund – To account for low- and moderate-income housing activities. The<br />
funds are used for the preservation <strong>of</strong> the <strong>City</strong>'s existing stock <strong>of</strong> low- and moderate-income<br />
housing through acquisition and rehabilitation and to increase the supply <strong>of</strong> low- and moderateincome<br />
housing through new construction. Under Assembly Bill 1x 26, the <strong>City</strong> accepted<br />
responsibility <strong>of</strong> housing successor to the low- and moderate-income housing redevelopment fund<br />
upon the dissolution <strong>of</strong> the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> on February 1,<br />
2012.<br />
Low-and Moderate-Income Housing (Downtown, Earthquake Recovery and Ocean Park<br />
Projects) – Under requirements <strong>of</strong> the State <strong>of</strong> California Health and Safety Code, the<br />
Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> is required to set aside 20% <strong>of</strong> tax increment<br />
revenues for housing projects benefiting low-and moderate-income households. The assets and<br />
liabilities <strong>of</strong> the Low-and Moderate-Income Housing fund were transferred to the Housing<br />
Projects fund upon dissolution <strong>of</strong> the Redevelopment Agency on February1, 2012.<br />
Downtown Redevelopment Project Fund – To account for the revenues and expenditures <strong>of</strong> the<br />
downtown redevelopment project area <strong>of</strong> the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong>. The redevelopment plan for this 9.9-acre project was approved in January 1976 and<br />
work was completed in 1980. The project area is located at the southern end <strong>of</strong> the <strong>City</strong>’s Third<br />
Street Promenade in the downtown core <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. It consists <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Place<br />
which just completed a substantial remodel in 2010 and two adjoining parking structures with<br />
1,843 parking spaces. The Redevelopment Agency was dissolved on February 1, 2012.<br />
Ocean Park Redevelopment Project Fund – To account for the revenues and expenditures <strong>of</strong><br />
the Ocean Park Project area <strong>of</strong> the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. This<br />
thirty-three acre project consists <strong>of</strong> two areas: 1A and 1B. The redevelopment plan for the<br />
twenty-five acres <strong>of</strong> Area 1A was approved in June 1960 and work was completed in May 1987.<br />
The project contains two 17-story high-rise apartment buildings <strong>of</strong> 500 units and a park. The<br />
redevelopment plan for the eight acres <strong>of</strong> Area 1B was approved in January 1961 and work was<br />
completed in 1983. The project contains two senior citizen residential apartment complexes and<br />
105
CITY OF SANTA MONICA, CALIFORNIA<br />
a former utility building now used for other purposes. The Redevelopment Agency was dissolved<br />
on February 1, 2012.<br />
Community Development Block Grant (CDBG) Fund – To account for Federal entitlements<br />
under the Housing and Community Development Act <strong>of</strong> 1974, as amended. The <strong>City</strong> Council<br />
annually allocates CDBG funds to various programs.<br />
Miscellaneous Grants Fund – To account for the receipt and expenditure <strong>of</strong> Federal, State and<br />
County awarded grants and special allocations provided to the <strong>City</strong>.<br />
Asset Seizure Fund – To account for the receipt and expenditure <strong>of</strong> equitable sharing program<br />
funds.<br />
Citizens Option for Public Safety Fund – To account for the receipt and expenditure <strong>of</strong> the<br />
Citizens Option for Public Safety program established by AB3229 <strong>of</strong> 1996.<br />
Rent Control Fund – To account for revenues and expenditures that are restricted or committed<br />
for rent control activities.<br />
Air Quality Management District (AQMD) Fund – To account for the receipt and expenditure<br />
<strong>of</strong> Air Quality Management District funds.<br />
Parks and Recreation Fund – To account for funds collected under the <strong>City</strong>'s Unit Dwelling<br />
Tax. These funds are to be used for the acquisition, improvement and expansion <strong>of</strong> public parks,<br />
playgrounds and recreational facilities.<br />
Gas Tax Fund – To account for State and County gasoline tax allocations and any Federal funds<br />
provided to the <strong>City</strong> for street-related purposes.<br />
Debt Service Funds are used to accumulate resources for, and the payment <strong>of</strong>, general long-term debt<br />
principal, interest and related costs. The debt service funds used by the <strong>City</strong> in this report are listed below:<br />
<strong>City</strong> Fund – To account for accumulation <strong>of</strong> resources for, and the payment <strong>of</strong>, general long-term<br />
debt principal, interest and related costs for library, public safety facility and parking authority<br />
bonds.<br />
Redevelopment Agency Fund – To account for accumulation <strong>of</strong> resources for, and the payment<br />
<strong>of</strong>, general long-term debt principal, interest and related costs for the Ocean Park, downtown and<br />
earthquake recovery bonds. The Redevelopment Agency was dissolved on February 1, 2012.<br />
Permanent Funds are used to report resources that are legally restricted to the extent that only earnings,<br />
and not principal, may be used for restricted purposes. The specific permanent funds used by the <strong>City</strong> in<br />
this report are listed below:<br />
Cemetery Perpetual Care Fund – To account for all funds received by the <strong>City</strong> from cemetery<br />
users for the perpetual care <strong>of</strong> the cemetery grounds.<br />
Mausoleum Perpetual Care Fund – To account for all funds designated for perpetual care <strong>of</strong><br />
the mausoleum located at the <strong>City</strong> cemetery.<br />
106
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Balance Sheet<br />
Nonmajor Governmental Funds<br />
June 30, 2012<br />
Capital Projects<br />
Clean Beaches and<br />
Ocean Parcel Tax Beach Recreation Housing Authority Disaster Relief TORCA<br />
Housing Projects<br />
Fund<br />
Assets<br />
Cash and investments $ 10,097,920 9,198,115 1,963,949 255,677 4,898,049 20,457,925<br />
Receivables (net, where applicable, <strong>of</strong> allowances for uncollectibles):<br />
Accounts 170,829 334,371 — — — —<br />
Notes — — — — 8,860,538 47,353,855<br />
Interest 19,002 21,302 5,151 32 12,517 17,534<br />
Other governments — — 554,371 903,634 — —<br />
Due from other funds — — — — — 543,072<br />
Deposits — — — — — —<br />
Prepaids — — 12,509 609 — —<br />
Restricted cash and investments with fiscal agent — — — — — 114,014<br />
Advances to Successor Agency — — — — — —<br />
Total assets $ 10,287,751 9,553,788 2,535,980 1,159,952 13,771,104 68,486,400<br />
Liabilities and Fund Balances<br />
Liabilities<br />
Accounts payable $ 21,876 665,932 101,345 100,815 986 11,931<br />
Accrued liabilities — 151,131 28,954 — — —<br />
Contracts payable (retained percentage) — 30,329 — 203,223 — —<br />
Due to other funds — — 543,072 — — 12,518,742<br />
Deferred revenue — 30,841 — 1,043,310 — —<br />
Deposits payable — 138,578 — — — —<br />
Advances from other funds — 3,842,973 — — — —<br />
Total liabilities 21,876 4,859,784 673,371 1,347,348 986 12,530,673<br />
Fund balances (deficit)<br />
Nonspendable — — 12,509 — — —<br />
Restricted 2,265,891 3,837,525 1,785,776 — 9,788,024 55,117,824<br />
Committed — 10,001 — — — —<br />
Assigned 7,999,984 846,478 64,324 — 3,982,094 837,903<br />
Unassigned — — — (187,396) — —<br />
Total fund balances (deficit) 10,265,875 4,694,004 1,862,609 (187,396) 13,770,118 55,955,727<br />
Total liabilities and fund balances $ 10,287,751 9,553,788 2,535,980 1,159,952 13,771,104 68,486,400<br />
107
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Balance Sheet<br />
Nonmajor Governmental Funds<br />
June 30, 2012<br />
Low / mod<br />
Housing<br />
Redevelopment<br />
Fund<br />
Downtown<br />
Redevelopment<br />
Fund<br />
Ocean Park<br />
Redevelopment<br />
Fund<br />
Capital Projects<br />
Community<br />
Development<br />
Block Grant<br />
Miscellaneous<br />
Grants<br />
Asset Seizure<br />
Assets<br />
Cash and investments $ — — — 309,256 7,427,456 501,469<br />
Receivables (net, where applicable, <strong>of</strong> allowances for uncollectibles):<br />
Accounts — — — — — —<br />
Notes — — — 10,187,066 7,081,556 —<br />
Interest — — — 376 26,713 1,367<br />
Other governments — — — — 906,390 28,920<br />
Due from other funds — — — — — —<br />
Deposits — — — 3,257 — —<br />
Prepaids — — — — — —<br />
Restricted cash and investments with fiscal agent — — — — — —<br />
Advances to Successor Agency — — — 9,023,266 — —<br />
Total assets $ — — — 19,523,221 15,442,115 531,756<br />
Liabilities and Fund Balances<br />
Liabilities<br />
Accounts payable $ — — — 8,655 451,746 5,000<br />
Accrued liabilities — — — — 15,857 —<br />
Contracts payable (retained percentage) — — — 75,600 109,763 —<br />
Due to other funds — — — — — —<br />
Deferred revenue — — — 7,152,611 — —<br />
Deposits payable — — — — — —<br />
Advances from other funds — — — — — —<br />
Total liabilities — — — 7,236,866 577,366 5,000<br />
Fund balances (deficit)<br />
Nonspendable — — — 1,870,656 — —<br />
Restricted — — — 10,415,699 14,511,321 487,469<br />
Committed — — — — — —<br />
Assigned — — — — 353,428 39,287<br />
Unassigned — — — — — —<br />
Total fund balances (deficit) — — — 12,286,355 14,864,749 526,756<br />
Total liabilities and fund balances $ — — — 19,523,221 15,442,115 531,756<br />
108
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Balance Sheet<br />
Nonmajor Governmental Funds<br />
June 30, 2012<br />
Capital Projects<br />
Citizens Option for<br />
Public Safety Rent Control AQMD<br />
Debt Service<br />
Parks and<br />
Recreation Gas Tax <strong>City</strong><br />
Assets<br />
Cash and investments $ 105,793 1,596,573 691,005 201,908 771,760 —<br />
Receivables (net, where applicable, <strong>of</strong> allowances for uncollectibles):<br />
Accounts 983 239 — 200 — —<br />
Notes — — — — — —<br />
Interest 519 6,557 1,377 404 2,760 —<br />
Other governments 83,598 — 28,200 — — —<br />
Due from other funds — — — — — —<br />
Deposits — — — — — —<br />
Prepaids — 14,261 — — — —<br />
Restricted cash and investments with fiscal agent — — — — — 7,150,832<br />
Advances to Successor Agency — — — — — —<br />
Total assets $ 190,893 1,617,630 720,582 202,512 774,520 7,150,832<br />
Liabilities and Fund Balances<br />
Liabilities<br />
Accounts payable $ — 22,315 10,000 413 90 —<br />
Accrued liabilities — 160,631 — — — —<br />
Contracts payable (retained percentage) — — — — 937 —<br />
Due to other funds — — — — — —<br />
Deferred revenue — — — — — —<br />
Deposits payable — — — — — —<br />
Advances from other funds — — — — — —<br />
Total liabilities — 182,946 10,000 413 1,027 —<br />
Fund balances (deficit)<br />
Nonspendable — 14,261 — — — —<br />
Restricted 190,893 1,059,211 710,582 201,244 773,493 7,150,832<br />
Committed — 41,975 — — — —<br />
Assigned — 319,237 — 855 — —<br />
Unassigned — — — — — —<br />
Total fund balances (deficit) 190,893 1,434,684 710,582 202,099 773,493 7,150,832<br />
Total liabilities and fund balances $ 190,893 1,617,630 720,582 202,512 774,520 7,150,832<br />
109
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Balance Sheet<br />
Nonmajor Governmental Funds<br />
June 30, 2012<br />
Debt Service<br />
Redevelopment<br />
Agency<br />
Cemetery<br />
Perpetual Care<br />
Permanent<br />
Mausoleum<br />
Perpetual Care<br />
Total nonmajor<br />
governmental<br />
funds<br />
Assets<br />
Cash and investments $ — 4,479 5,841 58,487,175<br />
Receivables (net, where applicable, <strong>of</strong> allowances for uncollectibles):<br />
Accounts — — — 506,622<br />
Notes — — — 73,483,015<br />
Interest — 39,014 4,231 158,856<br />
Other governments — — — 2,505,113<br />
Due from other funds — — — 543,072<br />
Deposits — — — 3,257<br />
Prepaids — — — 27,379<br />
Restricted cash and investments with fiscal agent — 8,198,085 923,310 16,386,241<br />
Advances to Successor Agency — - - 9,023,266<br />
Total assets $ — 8,241,578 933,382 161,123,996<br />
Liabilities and Fund Balances<br />
Liabilities<br />
Accounts payable $ — 25,250 2,811 1,429,165<br />
Accrued liabilities — — — 356,573<br />
Contracts payable (retained percentage) — — — 419,852<br />
Due to other funds — — — 13,061,814<br />
Deferred revenue — — — 8,226,762<br />
Deposits payable — — — 138,578<br />
Advances from other funds — — — 3,842,973<br />
Total liabilities — 25,250 2,811 27,475,717<br />
Fund balances (deficit)<br />
Nonspendable — 8,216,328 930,571 11,044,325<br />
Restricted — — — 108,295,784<br />
Committed — — — 51,976<br />
Assigned — — — 14,443,590<br />
Unassigned — — — (187,396)<br />
Total fund balances (deficit) — 8,216,328 930,571 133,648,279<br />
Total liabilities and fund balances $ — 8,241,578 933,382 161,123,996<br />
110
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Revenues, Expenditures and Changes in Fund Balances (Deficits)<br />
Nonmajor Governmental Funds<br />
For the fiscal year ended June 30, 2012<br />
Capital Projects<br />
Clean Beaches and<br />
Ocean Parcel Tax Beach Recreation Housing Authority Disaster Relief TORCA<br />
Housing Projects<br />
Fund<br />
Revenues:<br />
Incremental property taxes $ — — — — — —<br />
Other taxes 2,783,722 — — — 89,508 —<br />
Licenses and permits — 89,991 — — — —<br />
Intergovernmental — — 16,266,746 944,310 — —<br />
Charges for services — 10,595,950 — — — —<br />
Investment income 79,772 76,773 19,026 7,768 89,938 41,060<br />
Rental income — 1,267,935 — — — —<br />
Other — 547,971 — — 85,200 7,468<br />
Total revenues 2,863,494 12,578,620 16,285,772 952,078 264,646 48,528<br />
Expenditures:<br />
Current:<br />
General government — — — 10,596 — —<br />
Public safety — — — — — —<br />
General services 385,958 1,981,030 — 981,047 — —<br />
Cultural and recreation services — 9,118,941 — — — —<br />
Library — — — — — —<br />
Housing and community development — — 17,754,274 — 279,581 6,322,897<br />
Debt service expenditures:<br />
Principal — — — — — —<br />
Interest — — — — — 2,279<br />
Total expenditures 385,958 11,099,971 17,754,274 991,643 279,581 6,325,176<br />
Excess (deficiency) <strong>of</strong> revenues over (under) expenditures 2,477,536 1,478,649 (1,468,502) (39,565) (14,935) (6,276,648)<br />
Other financing sources (uses)<br />
Transfers in — 200,000 141,000 — — 62,373,375<br />
Transfers out — — — — (47,936) (141,000)<br />
Payment to refunded bond escrow agent — — — — — —<br />
Total other financing sources (uses) — 200,000 141,000 — (47,936) 62,232,375<br />
Extraordinary items:<br />
Extraordinary gain — — — — — —<br />
Extraordinary loss — — — — — —<br />
Total extraordinary items — — — — — —<br />
Net change in fund balances 2,477,536 1,678,649 (1,327,502) (39,565) (62,871) 55,955,727<br />
Fund balances (deficit) at the beginning <strong>of</strong> year 7,788,339 3,015,355 3,190,111 (147,831) 13,832,989 —<br />
Fund balances (deficit) at end <strong>of</strong> year $ 10,265,875 4,694,004 1,862,609 (187,396) 13,770,118 55,955,727<br />
111
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Revenues, Expenditures and Changes in Fund Balances (Deficits)<br />
Nonmajor Governmental Funds<br />
For the fiscal year ended June 30, 2012<br />
Low / mod<br />
Housing<br />
Redevelopment<br />
Fund<br />
Downtown<br />
Redevelopment<br />
Fund<br />
Ocean Park<br />
Redevelopment<br />
Fund<br />
Capital Projects<br />
Community<br />
Development<br />
Block Grant<br />
Miscellaneous<br />
Grants<br />
Asset Seizure<br />
Revenues:<br />
Incremental property taxes $ 6,493,923 116,575 (7,384) — — —<br />
Other taxes — — — — — —<br />
Licenses and permits — — — — — —<br />
Intergovernmental — — — 670,612 6,483,885 303,607<br />
Charges for services — — — — — —<br />
Investment income (57,682) (3,083) (14,943) 22,665 125,406 5,770<br />
Rental income — — — — — —<br />
Other 626,950 16,157 36,581 — 94,167 —<br />
Total revenues 7,063,191 129,649 14,254 693,277 6,703,458 309,377<br />
Expenditures:<br />
Current:<br />
General government — — — — — —<br />
Public safety — — — — 1,137,832 469,121<br />
General services — — — — 4,858,207 —<br />
Cultural and recreation services — — — 89,768 899,329 —<br />
Library — — — — 20,252 —<br />
Housing and community development 32,916,325 1,345,669 4,456,293 437,417 610,071 —<br />
Debt service expenditures:<br />
Principal — — — — — —<br />
Interest 281,650 815,989 528,047 — — —<br />
Total expenditures 33,197,975 2,161,658 4,984,340 527,185 7,525,691 469,121<br />
Excess (deficiency) <strong>of</strong> revenues over (under) expenditures (26,134,784) (2,032,009) (4,970,086) 166,092 (822,233) (159,744)<br />
Other financing sources (uses)<br />
Transfers in 14,021,375 — — — 146,318 —<br />
Transfers out (62,819,703) (1,923,000) (2,556,012) (233,356) (1,768,223) —<br />
Payment to refunded bond escrow agent — — — — — —<br />
Total other financing sources (uses) (48,798,328) (1,923,000) (2,556,012) (233,356) (1,621,905) —<br />
Extraordinary items:<br />
Extraordinary gain — 20,370,239 7,831,377 — — —<br />
Extraordinary loss — — — — — —<br />
Total extraordinary items — 20,370,239 7,831,377 — — —<br />
Net change in fund balances (74,933,112) 16,415,230 305,279 (67,264) (2,444,138) (159,744)<br />
Fund balances (deficit) at the beginning <strong>of</strong> year 74,933,112 (16,415,230) (305,279) 12,353,619 17,308,887 686,500<br />
Fund balances (deficit) at end <strong>of</strong> year $ — — — 12,286,355 14,864,749 526,756<br />
112
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Revenues, Expenditures and Changes in Fund Balances (Deficits)<br />
Nonmajor Governmental Funds<br />
For the fiscal year ended June 30, 2012<br />
Capital Projects<br />
Citizens Option for<br />
Public Safety Rent Control AQMD<br />
Debt Service<br />
Parks and<br />
Recreation Gas Tax <strong>City</strong><br />
Revenues:<br />
Incremental property taxes $ — — — — — —<br />
Other taxes — — — 43,960 — —<br />
Licenses and permits — — — — — —<br />
Intergovernmental 211,178 — 109,370 — 2,574,179 —<br />
Charges for services — 4,552,695 — — — —<br />
Investment income 2,736 33,744 5,803 1,525 9,062 50,727<br />
Rental income — — — — — —<br />
Other — 23,277 — — — —<br />
Total revenues 213,914 4,609,716 115,173 45,485 2,583,241 50,727<br />
Expenditures:<br />
Current:<br />
General government — — 390 — — —<br />
Public safety 376,970 — — — — —<br />
General services — — 20,044 — 6,670 —<br />
Cultural and recreation services — — — 7,980 — —<br />
Library — — — — — —<br />
Housing and community development — 4,770,444 — — — —<br />
Debt service expenditures:<br />
Principal — — — — — 7,700,000<br />
Interest — — — — — 4,237,843<br />
Total expenditures 376,970 4,770,444 20,434 7,980 6,670 11,937,843<br />
Excess (deficiency) <strong>of</strong> revenues over (under) expenditures (163,056) (160,728) 94,739 37,505 2,576,571 (11,887,116)<br />
Other financing sources (uses)<br />
Transfers in — — — — — 8,087,225<br />
Transfers out — — — — (2,574,179) —<br />
Payment to refunded bond escrow agent — — — — — (364,583)<br />
Total other financing sources (uses) — — — — (2,574,179) 7,722,642<br />
Extraordinary items:<br />
Extraordinary gain — — — — — —<br />
Extraordinary loss — — — — — —<br />
Total extraordinary items — — — — — —<br />
Net change in fund balances (163,056) (160,728) 94,739 37,505 2,392 (4,164,474)<br />
Fund balances (deficit) at the beginning <strong>of</strong> year 353,949 1,595,412 615,843 164,594 771,101 11,315,306<br />
Fund balances (deficit) at end <strong>of</strong> year $ 190,893 1,434,684 710,582 202,099 773,493 7,150,832<br />
113
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Revenues, Expenditures and Changes in Fund Balances (Deficits)<br />
Nonmajor Governmental Funds<br />
For the fiscal year ended June 30, 2012<br />
Debt Service<br />
Redevelopment<br />
Agency<br />
Cemetery<br />
Perpetual Care<br />
Permanent<br />
Mausoleum<br />
Perpetual Care<br />
Total nonmajor<br />
governmental<br />
funds<br />
Revenues:<br />
Incremental property taxes $ — — — 6,603,114<br />
Other taxes — — — 2,917,190<br />
Licenses and permits — — — 89,991<br />
Intergovernmental — — — 27,563,887<br />
Charges for services — 101,662 49,866 15,300,173<br />
Investment income 97,450 470,658 50,101 1,114,276<br />
Rental income — — — 1,267,935<br />
Other — — — 1,437,771<br />
Total revenues 97,450 572,320 99,967 56,294,337<br />
Expenditures:<br />
Current:<br />
General government — — — 10,986<br />
Public safety — — — 1,983,923<br />
General services — — — 8,232,956<br />
Cultural and recreation services — — — 10,116,018<br />
Library — — — 20,252<br />
Housing and community development — — — 68,892,971<br />
Debt service expenditures:<br />
Principal 1,195,000 — — 8,895,000<br />
Interest 4,144,960 — — 10,010,768<br />
Total expenditures 5,339,960 — — 108,162,874<br />
Excess (deficiency) <strong>of</strong> revenues over (under) expenditures (5,242,510) 572,320 99,967 (51,868,537)<br />
Other financing sources (uses)<br />
Transfers in 2,555,235 — — 87,524,528<br />
Transfers out — (365,187) (39,691) (72,468,287)<br />
Payment to refunded bond escrow agent — — — (364,583)<br />
Total other financing sources (uses) 2,555,235 (365,187) (39,691) 14,691,658<br />
Extraordinary items:<br />
Extraordinary gain — — — 28,201,616<br />
Extraordinary loss (4,059,455) — — (4,059,455)<br />
Total extraordinary items (4,059,455) — — 24,142,161<br />
Net change in fund balances (6,746,730) 207,133 60,276 (13,034,718)<br />
Fund balances (deficit) at the beginning <strong>of</strong> year 6,746,730 8,009,195 870,295 146,682,997<br />
Fund balances (deficit) at end <strong>of</strong> year $ — 8,216,328 930,571 133,648,279<br />
114
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance – Budget and Actual (Non-GAAP Basis)<br />
Special Revenue Source Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
Original Final encumbered 2011-2012 budgetary Variance with<br />
budget budget Actual expenditures encumbrances basis final budget<br />
Revenues:<br />
Intergovernmental — — 308,952 — — 308,952 308,952<br />
Charges for services 390,000 390,000 560,202 — — 560,202 170,202<br />
Investment income 135,000 135,000 259,293 — — 259,293 124,293<br />
Settlement income 4,564,155 5,985,572 4,047,746 — — 4,047,746 (1,937,826)<br />
Other 1,105,000 1,105,000 2,021,152 — — 2,021,152 916,152<br />
Total revenues 6,194,155 7,615,572 7,197,345 — — 7,197,345 (418,227)<br />
Expenditures:<br />
General services:<br />
Public works 4,564,155 4,585,070 2,773,613 424,886 123,782 2,472,509 2,112,561<br />
Capital improvement — 7,877,650 2,288,492 — 2,388,659 4,677,151 3,200,499<br />
Total general services 4,564,155 12,462,720 5,062,105 424,886 2,512,441 7,149,660 5,313,060<br />
Cultural and recreation services:<br />
Community and cultural services 20,000 20,000 20,547 — — 20,547 (547)<br />
Capital improvement — 7,598 6,813 — — 6,813 785<br />
Total cultural and recreation services 20,000 27,598 27,360 — — 27,360 238<br />
Housing and community development:<br />
Capital improvement 26,916,818 31,421,553 2,492,090 — 8,616,440 11,108,530 20,313,023<br />
Total housing and community development 26,916,818 31,421,553 2,492,090 — 8,616,440 11,108,530 20,313,023<br />
Total expenditures 31,500,973 43,911,871 7,581,555 424,886 11,128,881 18,285,550 25,626,321<br />
Deficiency <strong>of</strong> revenues<br />
under expenditures (25,306,818) (36,296,299) (384,210) (424,886) (11,128,881) (11,088,205) 25,208,094<br />
Other financing (uses):<br />
Transfers out (582,073) (582,073) (742,424) — — (742,424) (160,351)<br />
Net change in fund balance (25,888,891) (36,878,372) (1,126,634) (424,886) (11,128,881) (11,830,629) 25,047,743<br />
Fund balance at beginning <strong>of</strong> year 47,703,665 47,703,665 47,703,665 — — 47,703,665 —<br />
Fund balance at end <strong>of</strong> year $ 21,814,774 10,825,293 46,577,031 (424,886) (11,128,881) 35,873,036 25,047,743<br />
See accompanying notes to basic financial statements.<br />
115
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance (Deficit) – Budget and Actual (Non-GAAP Basis)<br />
Earthquake Recovery Redevelopment Project Capital Projects Fund (Major Fund)**<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
Original Final encumbered 2011-2012 budgetary Variance with<br />
budget budget Actual expenditures* encumbrances* basis final budget<br />
Revenues:<br />
Incremental property taxes $ 53,263,000 53,263,000 13,191,737 — — 13,191,737 (40,071,263)<br />
Investment income 25,000 25,000 61,003 — — 61,003 36,003<br />
Other 476 476,000 188,943 — — 188,943 (287,057)<br />
Total project revenues 53,288,476 53,764,000 13,441,683 — — 13,441,683 (40,322,317)<br />
Expenditures:<br />
Housing and community development:<br />
Payment <strong>of</strong> property tax increment 17,493,000 17,493,000 8,372,938 — — 8,372,938 9,120,062<br />
Housing and economic development 12,680,064 15,149,525 5,633,828 — — 5,633,828 9,515,697<br />
Capital improvements — 102,498,706 71,617,874 — — 71,617,874 30,880,832<br />
Total housing and community development 30,173,064 135,141,231 85,624,640 — — 85,624,640 49,516,591<br />
Debt service expenditures - principal 4,285,714 4,285,714 4,285,714 — — 4,285,714 —<br />
Debt service expenditures - interest 2,301,857 2,301,857 2,301,857 — — 2,301,857 —<br />
Bond issue costs 25,000 25,000 25,000 — — 25,000 —<br />
Total debt service 6,612,571 6,612,571 6,612,571 — — 6,612,571 —<br />
Total project expenditures 36,785,635 141,753,802 92,237,211 — — 92,237,211 49,516,591<br />
Excess (deficiency) <strong>of</strong> revenues<br />
over (under) expenditures 16,502,841 (87,989,802) (78,795,528) — — (78,795,528) 9,194,274<br />
Other financing (uses):<br />
Transfers out (6,497,232) (6,497,232) (6,497,232) — — (6,497,232) —<br />
Extraordinary loss — — (10,438,948) — — (10,438,948) (10,438,948)<br />
Net change in fund balance 10,005,609 (94,487,034) (95,731,708) — — (95,731,708) (1,244,674)<br />
Fund balance at beginning <strong>of</strong> year 95,731,708 95,731,708 95,731,708 — — 95,731,708 —<br />
Fund balance at end <strong>of</strong> year $ 105,737,317 1,244,674 — — — — (1,244,674)<br />
* No encumbrances were outstanding at June 30, 2011 and 2012.<br />
**Dissolved February 1, 2012<br />
116
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance (Deficit) – Budget and Actual (Non-GAAP Basis)<br />
Clean Beaches and Ocean Parcel Tax Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures encumbrances basis with budget<br />
Revenues:<br />
Other taxes $ 2,790,000 2,783,722 — — 2,783,722 (6,278)<br />
Investment income 84,000 79,772 — — 79,772 (4,228)<br />
Total revenues 2,874,000 2,863,494 — — 2,863,494 (10,506)<br />
Expenditures:<br />
General services:<br />
Public works 361,497 55,263 349 4,900 59,814 301,683<br />
Capital improvement 8,343,715 330,695 — 1,994,442 2,325,137 6,018,578<br />
Total general services 8,705,212 385,958 349 1,999,342 2,384,951 6,320,261<br />
Total expenditures 8,705,212 385,958 349 1,999,342 2,384,951 6,320,261<br />
Net change in fund balance (5,831,212) 2,477,536 (349) (1,999,342) 478,543 6,309,755<br />
Fund balance at beginning <strong>of</strong> year 7,788,339 7,788,339 — — 7,788,339 —<br />
Fund balance at end <strong>of</strong> year $ 1,957,127 10,265,875 (349) (1,999,342) 8,266,882 6,309,755<br />
117
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance – Budget and Actual (Non-GAAP Basis)<br />
Beach Recreation Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures encumbrances basis with budget<br />
Revenues:<br />
Licenses and permits $ 75,000<br />
89,991 — — 89,991 14,991<br />
Charges for services 8,435,384 10,595,950 — — 10,595,950 2,160,566<br />
Investment income 140,000 76,773 — — 76,773 (63,227)<br />
Rental income 770,239 1,267,935 — — 1,267,935 497,696<br />
Other 492,872 547,971 — — 547,971 55,099<br />
Total revenues 9,913,495 12,578,620 — — 12,578,620 2,665,125<br />
Expenditures:<br />
General services:<br />
Public Works 1,616,841 1,357,349 — — 1,357,349 259,492<br />
Other 38,342 60,697 — — 60,697 (22,355)<br />
Capital improvement 702,614 562,984 — — 562,984 139,630<br />
Total general services 2,357,797 1,981,030 — — 1,981,030 376,767<br />
Cultural and recreation services:<br />
Community and cultural services 9,281,972 9,049,340 12,356 31,128 9,068,112 213,860<br />
Other 33,769 48,611 — — 48,611 (14,842)<br />
Capital improvement 1,426,600 20,990 — 648,362 669,352 757,248<br />
Total cultural and recreation services 10,742,341 9,118,941 12,356 679,490 9,786,075 956,266<br />
Total expenditures 13,100,138 11,099,971 12,356 679,490 11,767,105 1,333,033<br />
Excess (deficiency) <strong>of</strong> revenues over<br />
(under) expenditures (3,186,643) 1,478,649 (12,356) (679,490) 811,515 3,998,158<br />
Other financing sources:<br />
Transfers in 200,000 200,000 — — 200,000 —<br />
Net change in fund balance (2,986,643) 1,678,649 (12,356) (679,490) 1,011,515 3,998,158<br />
Fund balance at beginning <strong>of</strong> year 3,015,355 3,015,355 — — 3,015,355 —<br />
Fund balance at end <strong>of</strong> year $ 28,712 4,694,004 (12,356) (679,490) 4,026,870 3,998,158<br />
118
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance – Budget and Actual (Non-GAAP Basis)<br />
Housing Authority Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances basis with budget<br />
Revenues:<br />
Intergovernmental $ 17,101,910 16,266,746 — — 16,266,746 (835,164)<br />
Investment income 42,000 19,026 — — 19,026 (22,974)<br />
Total revenues 17,143,910 16,285,772 — — 16,285,772 (858,138)<br />
Expenditures:<br />
Housing and community development:<br />
Housing and economic development 17,886,643 17,742,004 — 10,296 17,752,300 134,343<br />
Community and cultural services 39,357 — — — — 39,357<br />
Capital improvement 12,270 12,270 — — 12,270 —<br />
Total housing and community development 17,938,270 17,754,274 — 10,296 17,764,570 173,700<br />
Total expenditures 17,938,270 17,754,274 — 10,296 17,764,570 173,700<br />
Deficiency <strong>of</strong> revenues<br />
under expenditures (794,360) (1,468,502) — (10,296) (1,478,798) (684,438)<br />
Other financing sources:<br />
Transfers in 141,000 141,000 — — 141,000 —<br />
Net change in fund balance (653,360) (1,327,502) — (10,296) (1,337,798) (684,438)<br />
Fund balance at beginning <strong>of</strong> year 3,190,111 3,190,111 — — 3,190,111 —<br />
Fund balance at end <strong>of</strong> year $ 2,536,751 1,862,609 — (10,296) 1,852,313 (684,438)<br />
* No encumbrances were outstanding at June 30, 2011.<br />
119
CITY OF SANTA MONICA, CALIFORNIA<br />
Statement <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund (Deficit) – Budget and Actual (Non-GAAP Basis)<br />
Disaster Relief Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances basis with budget<br />
Revenues:<br />
Intergovernmental $ — 944,310 — — 944,310 944,310<br />
Investment income — 7,768 — — 7,768 7,768<br />
Total revenues — 952,078 — — 952,078 952,078<br />
Expenditures:<br />
General government:<br />
Finance 9,517 10,596 — — 10,596 (1,079)<br />
Total general government 9,517 10,596 — — 10,596 (1,079)<br />
General services:<br />
Capital improvement 1,945,884 981,047 — 960,554 1,941,601 4,283<br />
Total general services 1,945,884 981,047 — 960,554 1,941,601 4,283<br />
Total expenditures 1,955,401 991,643 — 960,554 1,952,197 3,204<br />
Net change in fund balance (1,955,401) (39,565) — (960,554) (1,000,119) 955,282<br />
Fund (deficit) at beginning <strong>of</strong> year (147,831) (147,831) — — (147,831) —<br />
Fund deficit at end <strong>of</strong> year $ ( 2,103,232) (187,396) — (960,554) (1,147,950) 955,282<br />
* No encumbrances were outstanding at June 30, 2011.<br />
120
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance (Deficit) – Budget and Actual (Non-GAAP Basis)<br />
Tenant Ownership Rights Charter Amendment<br />
(TORCA) Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances basis with budget<br />
Revenues:<br />
Other taxes $ 100,000<br />
89,508 — — 89,508 (10,492)<br />
Investment income 100,000 89,938 — — 89,938 (10,062)<br />
Other — 85,200 — — 85,200 85,200<br />
Total revenues 200,000 264,646 — — 264,646 64,646<br />
Expenditures:<br />
Housing and community development:<br />
Housing and economic development 22,756 24,860 — — 24,860 (2,104)<br />
Capital improvement 4,236,814 254,721 — 2,000,214 2,254,935 1,981,879<br />
Total housing and community development 4,259,570 279,581 — 2,000,214 2,279,795 1,979,775<br />
Deficiency <strong>of</strong> revenues<br />
under expenditures (4,059,570) (14,935) — (2,000,214) (2,015,149) 2,044,421<br />
Other financing (uses):<br />
Transfers out (50,186) (47,936) — — (47,936) 2,250<br />
Net change in fund balance (4,109,756) (62,871) — (2,000,214) (2,063,085) 2,046,671<br />
Fund balance at beginning <strong>of</strong> year 13,832,989 13,832,989 — — 13,832,989 —<br />
Fund balance at end <strong>of</strong> year $ 9,723,233 13,770,118 — (2,000,214) 11,769,904 2,046,671<br />
* No encumbrances were outstanding at June 30, 2011.<br />
121
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance (Deficit) – Budget and Actual (Non-GAAP Basis)<br />
Housing Projects Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances basis with budget<br />
Revenues:<br />
Investment income $ 25,000<br />
41,060 — — 41,060 16,060<br />
Other income — 7,468 — — 7,468 7,468<br />
Total project revenues 25,000 48,528 — — 48,528 23,528<br />
Expenditures:<br />
Housing and community development:<br />
Housing and economic development 738,606 391,440 — — 391,440 347,166<br />
Capital improvements 20,282,711 5,931,457 — 118,069 6,049,526 14,233,185<br />
Total housing and community development 21,021,317 6,322,897 — 118,069 6,440,966 14,580,351<br />
Debt service expenditures – interest 123,350 2,279 — — 2,279 121,071<br />
Total project expenditures 21,144,667 6,325,176 — 118,069 6,443,245 14,701,422<br />
Deficiency <strong>of</strong> revenues<br />
under expenditures (21,119,667) (6,276,648) — (118,069) (6,394,717) 14,724,950<br />
Other financing sources (uses):<br />
Transfers in 1,563,821 62,373,375 — — 62,373,375 60,809,554<br />
Transfers out (141,000) (141,000) — — (141,000) —<br />
Total other financing sources (uses) 1,422,821 62,232,375 — — 62,232,375 60,809,554<br />
Net change in fund balance (19,696,846) 55,955,727 — (118,069) 55,837,658 75,534,504<br />
Fund balance at beginning <strong>of</strong> year — — — — — —<br />
Fund balance (deficit) at end <strong>of</strong> year $ (19,696,846) 55,955,727 — (118,069) 55,837,658 75,534,504<br />
* No encumbrances were outstanding at June 30, 2011.<br />
122
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance – Budget and Actual (Non-GAAP Basis)<br />
Low/Moderate Housing Capital Projects Fund **<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances* basis with budget<br />
Revenues:<br />
Incremental property taxes $ 6,493,923 6,493,923 — — 6,493,923 —<br />
Investment income (57,682) (57,682) — — (57,682) —<br />
Other income 626,950 626,950 — — 626,950 —<br />
Total project revenues 7,063,191 7,063,191 — — 7,063,191 —<br />
Expenditures:<br />
Housing and community development:<br />
Housing and economic development 573,394 573,394 — — 573,394 —<br />
Capital improvements 32,342,931 32,342,931 — — 32,342,931 —<br />
Total housing and community development 32,916,325 32,916,325 — — 32,916,325 —<br />
—<br />
Debt service expenditures – interest 281,650 281,650 — — 281,650 —<br />
Total project expenditures 33,197,975 33,197,975 — — 33,197,975 —<br />
Deficiency <strong>of</strong> revenues<br />
under expenditures (26,134,784) (26,134,784) — — (26,134,784) —<br />
Other financing sources (uses):<br />
Transfers in 14,021,375 14,021,375 — — 14,021,375 —<br />
Transfers out (62,819,703) (62,819,703) — — (62,819,703) —<br />
Total other financing sources (uses) (48,798,328) (48,798,328) — — (48,798,328) —<br />
Net change in fund balance (74,933,112) (74,933,112) — — (74,933,112) —<br />
Fund balance at beginning <strong>of</strong> year 74,933,112 74,933,112 — — 74,933,112 —<br />
Fund balance at end <strong>of</strong> year $ —<br />
— — — — —<br />
* No encumbrances were outstanding at June 30, 2011 and 2012.<br />
** Dissolved February 1, 2012.<br />
123
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund (Deficit) – Budget and Actual (Non-GAAP Basis)<br />
Downtown Redevelopment Project Capital Projects Fund**<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
Final encumbered 2011-2012 budgetary Variance with<br />
budget Actual expenditures* encumbrances* basis final budget<br />
Revenues:<br />
Incremental property taxes $ 1,881,000 116,575 — — 116,575 (1,764,425)<br />
Investment income 1,000 (3,083) — — (3,083) (4,083)<br />
Other income — 16,157 — — 16,157 16,157<br />
Total project revenues 1,882,000 129,649 — — 129,649 (1,752,351)<br />
Expenditures:<br />
Housing and community development: 149,870 149,870 — — 149,870 —<br />
Payment <strong>of</strong> tax increment 394,496 394,496 — — 394,496 —<br />
Capital improvements 801,303 801,303 — — 801,303 —<br />
Total housing and community development 1,345,669 1,345,669 — — 1,345,669 —<br />
Debt service expenditures – interest 815,989 815,989 — — 815,989 —<br />
Total project expenditures 2,161,658 2,161,658 — — 2,161,658 —<br />
Deficiency <strong>of</strong> revenues<br />
under expenditures (279,658) (2,032,009) — — (2,032,009) (1,752,351)<br />
Other financing (uses):<br />
Transfers out (454,288) (1,923,000) — — (1,923,000) (1,468,712)<br />
Extraordinary gain — 20,370,239 — — 20,370,239 20,370,239<br />
Net change in fund balance (733,946) 16,415,230 — — 16,415,230 17,149,176<br />
Fund (deficit) at beginning <strong>of</strong> year (16,415,230) (16,415,230) — — (16,415,230) —<br />
Fund balance (deficit) at end <strong>of</strong> year $ (17,149,176)<br />
— — — — 17,149,176<br />
* No encumbrances were outstanding at June 30, 2011 and 2012.<br />
** Dissolved February 1, 2012.<br />
124
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance (Deficit) – Budget and Actual (Non-GAAP Basis)<br />
Ocean Park Redevelopment Project Capital Projects Fund**<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances* basis with budget<br />
Revenues:<br />
Incremental property taxes $ 3,087,000<br />
(7,384) — — (7,384) (3,094,384)<br />
Investment income 5,000 (14,943) — — (14,943) (19,943)<br />
Other — 36,581 — — 36,581 36,581<br />
Total project revenues 3,092,000 14,254 — — 14,254 (3,077,746)<br />
Expenditures:<br />
Housing and community development:<br />
Housing and economic development 267,770 267,770 — — 267,770 —<br />
Capital improvements 4,188,523 4,188,523 — — 4,188,523 —<br />
Total housing and community development 4,456,293 4,456,293 — — 4,456,293 —<br />
Debt service expenditures – interest 528,047 528,047 — — 528,047 —<br />
Total project expenditures 4,984,340 4,984,340 — — 4,984,340 —<br />
Deficiency <strong>of</strong> revenues<br />
under expenditures (1,892,340) (4,970,086) — — (4,970,086) (3,077,746)<br />
Other financing (uses) :<br />
Transfers out (1,896,925) (2,556,012) — — (2,556,012) (659,087)<br />
Extraordinary gain — 7,831,377 — — 7,831,377 7,831,377<br />
Net change in fund balance (3,789,265) 305,279 — — 305,279 4,094,544<br />
Fund (deficit) at beginning <strong>of</strong> year (305,279) (305,279) — — (305,279) —<br />
Fund balance (deficit) at end <strong>of</strong> year $ (4,094,544)<br />
— — — — 4,094,544<br />
* No encumbrances were outstanding at June 30, 2011 and 2012.<br />
**Dissolved February 1, 2012<br />
125
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance – Budget and Actual (Non-GAAP Basis)<br />
Community Development Block Grant<br />
(CDBG) Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures encumbrances basis with budget<br />
Revenues:<br />
Intergovernmental $ 2,022,963 670,612 — — 670,612 (1,352,351)<br />
Investment income 1,000 22,665 — — 22,665 21,665<br />
Total revenues 2,023,963 693,277 — — 693,277 (1,330,686)<br />
Expenditures:<br />
Cultural and recreation services:<br />
Capital improvement 620,485 89,768 — 40,327 130,095 490,390<br />
Total cultural and recreation services 620,485 89,768 — 40,327 130,095 490,390<br />
Housing and community development:<br />
Community and cultural services 364,208 237,982 — — 237,982 126,226<br />
Other 320,441 27,619 136 — 27,483 292,958<br />
Capital improvement 171,816 171,816 — — 171,816 —<br />
Total housing and community development 856,465 437,417 136 — 437,281 419,184<br />
Total expenditures 1,476,950 527,185 136 40,327 567,376 909,574<br />
Excess <strong>of</strong> revenues<br />
over expenditures 547,013 166,092 (136) (40,327) 125,901 (421,112)<br />
Other financing (uses):<br />
Transfer out (236,441) (233,356) — — (233,356) 3,085<br />
Net change in fund balance 310,572 (67,264) (136) (40,327) (107,455) (418,027)<br />
Fund balance at beginning <strong>of</strong> year 12,353,619 12,353,619 — — 12,353,619 —<br />
Fund balance at end <strong>of</strong> year $ 12,664,191 12,286,355 (136) (40,327) 12,246,164 (418,027)<br />
126
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance (Deficit) – Budget and Actual (Non-GAAP Basis)<br />
Miscellaneous Grants Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures encumbrances basis with budget<br />
Revenues:<br />
Intergovernmental 11,390,591 6,483,885 — — 6,483,885 (4,906,706)<br />
Investment income 190,000 125,406 — — 125,406 (64,594)<br />
Other 398,185 94,167 — — 94,167 (304,018)<br />
Total revenues 11,978,776 6,703,458 — — 6,703,458 (5,275,318)<br />
Expenditures:<br />
Public safety:<br />
Police 813,854 722,838 — 62,129 784,967 28,887<br />
Fire 802,061 393,144 — 9,341 402,485 399,576<br />
Capital improvement 60,166 21,850 — — 21,850 38,316<br />
Total public safety 1,676,081 1,137,832 — 71,470 1,209,302 466,779<br />
General services:<br />
<strong>City</strong> manager 400,257 54,593 — 119,742 174,335 225,922<br />
Community and cultural services 73,500 — — — — 73,500<br />
Capital improvement 21,916,828 4,803,614 — 4,393,689 9,197,303 12,719,525<br />
Total general services 22,390,585 4,858,207 — 4,513,431 9,371,638 13,018,947<br />
Cultural and recreation services:<br />
Community and cultural services 757,515 836,917 91,397 — 745,520 11,995<br />
Capital improvement 6,166,236 62,412 — 120,068 182,480 5,983,756<br />
Total cultural and recreation services 6,923,751 899,329 91,397 120,068 928,000 5,995,751<br />
Library: 24,185 20,252 — 8,900 29,152 (4,967)<br />
Housing and community development:<br />
Planning and community development 95,500 — — 46,000 46,000 49,500<br />
Housing and economic development — 25,887 — — 25,887 (25,887)<br />
Capital improvement 3,297,172 584,184 — 1,038,961 1,623,145 1,674,027<br />
Total housing and community development 3,392,672 610,071 — 1,084,961 1,695,032 1,697,640<br />
Total expenditures 34,407,274 7,525,691 91,397 5,798,830 13,233,124 21,174,150<br />
Deficiency <strong>of</strong> revenues<br />
under expenditures (22,428,498) (822,233) (91,397) (5,798,830) (6,529,666) 15,898,832<br />
Other financing sources (uses):<br />
Transfers in 146,318 146,318 — — 146,318 —<br />
Transfers out (1,748,114) (1,768,223) — — (1,768,223) (20,109)<br />
Total other financing sources (uses) (1,601,796) (1,621,905) — — (1,621,905) (20,109)<br />
Net change in fund balance (24,030,294) (2,444,138) (91,397) (5,798,830) (8,151,571) 15,878,723<br />
Fund balance at beginning <strong>of</strong> year 17,308,887 17,308,887 — — 17,308,887 —<br />
Fund balance (deficit) at end <strong>of</strong> year $ (6,721,407) 14,864,749 (91,397) (5,798,830) 9,157,316 15,878,723<br />
127
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance – Budget and Actual (Non-GAAP Basis)<br />
Citizens Option for Public Safety Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances* basis with budget<br />
Revenues:<br />
Intergovernmental $ 120,543 211,178 — — 211,178 90,635<br />
Investment income 1,000 2,736 — — 2,736 1,736<br />
Total revenues 121,543 213,914 — — 213,914 92,371<br />
Expenditures:<br />
Public safety:<br />
Police — 22,651 — — 22,651 (22,651)<br />
Capital improvement 354,319 354,319 — — 354,319 —<br />
Total public safety 354,319 376,970 — — 376,970 (22,651)<br />
Total expenditures 354,319 376,970 — — 376,970 (22,651)<br />
Net change in fund balance (232,776) (163,056) — — (163,056) 69,720<br />
Fund balance at beginning <strong>of</strong> year 353,949 353,949 — — 353,949 —<br />
Fund balance at end <strong>of</strong> year $ 121,173 190,893 — — 190,893 69,720<br />
* No encumbrances were outstanding at June 30, 2011 and 2012.<br />
128
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance – Budget and Actual (Non-GAAP Basis)<br />
Air Quality Management District (AQMD) Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances* basis with budget<br />
Revenues:<br />
Intergovernmental $ 110,000 109,370 — — 109,370 (630)<br />
Investment income 6,000 5,803 — — 5,803 (197)<br />
Total revenues 116,000 115,173 — — 115,173 (827)<br />
Expenditures:<br />
General government:<br />
Other 2,400 390 — — 390 2,010<br />
Total general government 2,400 390 — — 390 2,010<br />
General services:<br />
Capital improvement 572,675 20,044 — — 20,044 552,631<br />
Total general services 572,675 20,044 — — 20,044 552,631<br />
Total expenditures 575,075 20,434 — — 20,434 554,641<br />
Net change in fund balance (459,075) 94,739 — — 94,739 553,814<br />
Fund balance at beginning <strong>of</strong> year 615,843 615,843 — — 615,843 —<br />
Fund balance at end <strong>of</strong> year $ 156,768 710,582 — — 710,582 553,814<br />
* No encumbrances were outstanding at June 30, 2011 and 2012.<br />
129
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance – Budget and Actual (Non-GAAP Basis)<br />
Parks and Recreation Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances basis with budget<br />
Revenues:<br />
Other taxes $ 16,000<br />
43,960 — — 43,960 27,960<br />
Investment income 2,000 1,525 — — 1,525 (475)<br />
Total revenues 18,000 45,485 — — 45,485 27,485<br />
Expenditures:<br />
Cultural and recreation:<br />
Capital improvement 8,836 7,980 — 856 8,836 —<br />
Total cultural and recreation 8,836 7,980 — 856 8,836 —<br />
Net change in fund balance 9,164 37,505 — (856) 36,649 27,485<br />
Fund balance at beginning <strong>of</strong> year 164,594 164,594 — — 164,594 —<br />
Fund balance at end <strong>of</strong> year $ 173,758 202,099 — (856) 201,243 27,485<br />
* No encumbrances were outstanding at June 30, 2011.<br />
130
CITY OF SANTA MONICA, CALIFORNIA<br />
Schedule <strong>of</strong> Revenues, Expenditures and Changes in<br />
Fund Balance – Budget and Actual (Non-GAAP Basis)<br />
Gas Tax Capital Projects Fund<br />
For the fiscal year ended June 30, 2012<br />
Less<br />
2010-2011 Plus Actual,<br />
encumbered 2011-2012 budgetary Variance<br />
Budget Actual expenditures* encumbrances * basis with budget<br />
Revenues:<br />
Intergovernmental $ 2,395,940 2,574,179 — — 2,574,179 178,239<br />
Investment income 13,000 9,062 — — 9,062 (3,938)<br />
Total revenues 2,408,940 2,583,241 — — 2,583,241 174,301<br />
Expenditures:<br />
General services:<br />
Other 5,300 6,670 — — 6,670 (1,370)<br />
Capital improvements 20,520 — — — — 20,520<br />
Total general services 25,820 6,670 — — 6,670 19,150<br />
Excess <strong>of</strong> revenues<br />
over expenditures 2,383,120 2,576,571 — — 2,576,571 193,451<br />
Other financing (uses):<br />
Transfers out (2,395,940) (2,574,179) — — (2,574,179) (178,239)<br />
Net change in fund balance (12,820) 2,392 — — 2,392 15,212<br />
Fund balance at beginning <strong>of</strong> year 771,101 771,101 — — 771,101 —<br />
Fund balance at end <strong>of</strong> year $ 758,281 773,493 — — 773,493 15,212<br />
* No encumbrances were outstanding at June 30, 2011 and 2012.<br />
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132
CITY OF SANTA MONICA, CALIFORNIA<br />
Nonmajor Enterprise Fund Financial Statements<br />
Enterprise Funds are used to report any activity for which a fee is charged to external users for goods or<br />
services. Activities are required to be reported as enterprise funds if any one <strong>of</strong> the following criteria is<br />
met. (a) The activity is financed with debt that is secured solely by a pledge <strong>of</strong> the net revenues from fees<br />
and charges <strong>of</strong> the activity. Debt that is secured by a pledge <strong>of</strong> net revenues from fees and charges and the<br />
full faith and credit <strong>of</strong> a related primary government or component unit – even if that government is not<br />
expected to make any payments – is not payable solely from fees and charges <strong>of</strong> the activity. (Some debt<br />
may be secured, in part, by a portion <strong>of</strong> its own proceeds but should be considered as payable “solely”<br />
from the revenues <strong>of</strong> the activity.) (b) Laws or regulations require that the activity’s costs <strong>of</strong> providing<br />
services, including capital costs (such as depreciation or debt service), be recovered with fees and<br />
charges, rather than with taxes or similar revenues. (c) The pricing policies <strong>of</strong> the activity establish fees<br />
and charges designed to recover its costs, including capital costs (such as depreciation or debt services).<br />
Water Fund – To account for revenues and expenses <strong>of</strong> providing water service to the citizens <strong>of</strong><br />
the <strong>City</strong>.<br />
Pier Fund – To account for revenues and expenses connected with management and<br />
development <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Pier.<br />
Civic Auditorium Fund – To account for revenues and expenses connected with management <strong>of</strong><br />
the <strong>Santa</strong> <strong>Monica</strong> Civic Auditorium.<br />
Stormwater Management Fund – To account for revenues and expenses associated with storm<br />
water management.<br />
Cemetery Fund – To account for revenues and expenses associated with operation <strong>of</strong> Woodlawn<br />
Cemetery.<br />
Special Aviation Fund – To account for revenues and expenses associated with aviation-related<br />
State funds provided to the <strong>City</strong>.<br />
Parking Authority Fund – To account for revenues and expenses associated with operating the<br />
various parking structures and parking lots owned by the <strong>City</strong> Parking Authority.<br />
133
Water<br />
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Net Assets<br />
Nonmajor Enterprise Funds<br />
June 30, 2012<br />
Pier<br />
Civic<br />
Auditorium<br />
Stormwater<br />
Management Cemetery Special Aviation<br />
Parking<br />
Authority<br />
Total<br />
nonmajor<br />
enterprise<br />
funds<br />
Assets<br />
Current assets:<br />
Cash and investments $ 14,934,393 9,784,131 2,354,539 — — 257,602 4,662,855 31,993,520<br />
Restricted cash and investments 333,694 513,931 141,947 — — — — 989,572<br />
Receivables (net, where applicable, <strong>of</strong><br />
allowances for uncollectibles):<br />
Accounts 2,970,466 1,303,127 4,818 70,177 112,692 — — 4,461,280<br />
Interest 43,059 23,921 5,584 — — 578 15,161 88,303<br />
Prepaids 7,325 — — — — — — 7,325<br />
Total current assets 18,288,937 11,625,110 2,506,888 70,177 112,692 258,180 4,678,016 37,540,000<br />
Noncurrent assets:<br />
Restricted cash and investments 1,373,374 — — 81,924 — — 300,000 1,755,298<br />
Capital assets:<br />
Land 21,006 — — — 4 — 7,935,700 7,956,710<br />
Buildings 1,532,511 5,916,024 6,187,997 — 1,723,603 — 946,242 16,306,377<br />
Improvements other than buildings 932,149 4,456,986 430,780 147,299 782,159 509,940 169,306 7,428,619<br />
Machinery and equipment 1,818,229 289,427 1,933,985 35,750 385,442 275,000 1,218,161 5,955,994<br />
Infrastructure 36,111,962 8,435,604 — 10,739,803 — — — 55,287,369<br />
Construction in progress 4,916,593 619,457 — — — — 3,812,533 9,348,583<br />
Less: accumulated depreciation (24,324,906) (10,587,381) (6,111,926) (2,951,312) (1,633,274) (784,940) (766,095) (47,159,834)<br />
Net capital assets 21,007,544 9,130,117 2,440,836 7,971,540 1,257,934 — 13,315,847 55,123,818<br />
Total noncurrent assets 22,380,918 9,130,117 2,440,836 8,053,464 1,257,934 — 13,615,847 56,879,116<br />
Total assets 40,669,855 20,755,227 4,947,724 8,123,641 1,370,626 258,180 18,293,863 94,419,116<br />
Liabilities<br />
Current liabilities:<br />
Accounts payable 1,618,785 204,437 13,854 67 24,630 — 1,414 1,863,187<br />
Accrued liabilities 492,091 168,087 163,447 — 51,538 — — 875,163<br />
Contracts payable (retained percentage) 98,345 — — — — — — 98,345<br />
Interest payable — — — 20,006 — — — 20,006<br />
Current portion <strong>of</strong> long-term obligations — — — 263,305 — — — 263,305<br />
Due to other funds — — — 1,072,814 — — — 1,072,814<br />
Liabilities payable from restricted assets - deposits 333,694 513,931 141,947 — — — — 989,572<br />
Total current liabilities 2,542,915 886,455 319,248 1,356,192 76,168 — 1,414 5,182,392<br />
Noncurrent liabilities:<br />
Accrued liabilities 219,744 29,423 64,716 — 13,331 — — 327,214<br />
Advances from other funds — — 62,081 — — — — 62,081<br />
Long-term obligations net <strong>of</strong> current portion — — — 2,045,116 — — — 2,045,116<br />
Total noncurrent liabilities 219,744 29,423 126,797 2,045,116 13,331 — — 2,434,411<br />
Total liabilities 2,762,659 915,878 446,045 3,401,308 89,499 — 1,414 7,616,803<br />
Net assets<br />
Invested in capital assets, net <strong>of</strong> related debt 21,007,544 9,130,117 2,440,836 5,663,119 1,257,934 — 13,315,847 52,815,397<br />
Unrestricted (deficit) 16,899,652 10,709,232 2,060,843 (940,786) 23,193 258,180 4,976,602 33,986,916<br />
Total net assets $ 37,907,196 19,839,349 4,501,679 4,722,333 1,281,127 258,180 18,292,449 86,802,313<br />
134
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Revenues, Expenses and Changes in Fund Net Assets<br />
Nonmajor Enterprise Funds<br />
For the fiscal year ended June 30, 2012<br />
Water<br />
Pier<br />
Civic<br />
Auditorium<br />
Stormwater<br />
Management Cemetery Special Aviation<br />
Parking<br />
Authority<br />
Total<br />
nonmajor<br />
enterprise funds<br />
Operating revenues<br />
Charges for services $ 19,897,464 6,004,005 1,667,172 1,419,980 1,133,990 — 161,504 30,284,115<br />
Total operating revenues 19,897,464 6,004,005 1,667,172 1,419,980 1,133,990 — 161,504 30,284,115<br />
Operating expenses<br />
Personnel services 5,238,400 1,903,900 2,341,919 — 598,048 — 900 10,083,167<br />
Administrative indirect 1,088,111 386,402 75,086 10,823 312,557 — — 1,872,979<br />
Contractual services 486,458 1,289,006 52,006 — 251,097 — — 2,078,567<br />
Repairs and maintenance 221,386 300,422 49,794 — 50,850 — — 622,452<br />
Materials and supplies 3,242,253 241,700 181,349 — 251,407 — 50,629 3,967,338<br />
Utilities 601,593 191,597 132,971 — 95,090 — — 1,021,251<br />
Water purchases 6,460,974 — — — — — — 6,460,974<br />
Casualty property and liability costs 314,023 230,153 66,891 — 50,905 — — 661,972<br />
Depreciation 1,001,793 509,436 283,210 301,816 154,066 — 264,207 2,514,528<br />
Other 858,017 605,966 19,597 34,879 7,333 — — 1,525,792<br />
Total operating expenses 19,513,008 5,658,582 3,202,823 347,518 1,771,353 — 315,736 30,809,020<br />
Operating income (loss) 384,456 345,423 (1,535,651) 1,072,462 (637,363) — (154,232) (524,905)<br />
Nonoperating revenues (expenses)<br />
Investment income 156,939 85,922 20,498 — (1,147) 2,157 42,627 306,996<br />
Interest expense (6,892) — — (64,467) — — — (71,359)<br />
Gain (loss) on disposal <strong>of</strong> capital assets — — — — 650 — — 650<br />
Other nonoperating 400,333 318,745 11,309 495,283 114,176 — — 1,339,846<br />
Total nonoperating revenues (expenses) 550,380 404,667 31,807 430,816 113,679 2,157 42,627 1,576,133<br />
Income (loss) before transfers 934,836 750,090 (1,503,844) 1,503,278 (523,684) 2,157 (111,605) 1,051,228<br />
Transfers in 158,439 — 2,084,912 12,480 6,568,264 — 3,670,438 12,494,533<br />
Transfers out (1,430,039) (7,680) — (2,019,794) — — (2,749,838) (6,207,351)<br />
Change in net assets (336,764) 742,410 581,068 (504,036) 6,044,580 2,157 808,995 7,338,410<br />
Net assets (deficit) at beginning <strong>of</strong> year 38,243,960 19,096,939 3,920,611 5,226,369 (4,763,453) 256,023 17,483,454 79,463,903<br />
Net assets at end <strong>of</strong> year $ 37,907,196 19,839,349 4,501,679 4,722,333 1,281,127 258,180 18,292,449 86,802,313<br />
135
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Cash Flows<br />
Nonmajor Enterprise Funds<br />
For the fiscal year ended June 30, 2012<br />
Water<br />
Pier<br />
Civic<br />
Auditorium<br />
Stormwater<br />
Management<br />
Cemetery<br />
Special<br />
Aviation<br />
Parking<br />
Authority<br />
Total nonmajor<br />
enterprise<br />
funds<br />
Cash flows from operating activities:<br />
Cash received from customers $ 19,776,220 4,990,757 1,693,758 1,392,437 1,093,591 — 161,504 29,108,267<br />
Cash payments for materials and services (11,286,851) (2,899,885) (576,476) (45,733) (1,034,848) — (824,637) (16,668,430)<br />
Cash payments to employees for services (5,155,674) (1,846,128) (2,342,786) — (586,625) — (900) (9,932,113)<br />
Other revenue received 400,333 318,745 11,309 495,283 25,951 — — 1,251,621<br />
Net cash provided by (used in)<br />
operating activities 3,734,028 563,489 (1,214,195) 1,841,987 (501,931) — (664,033) 3,759,345<br />
Cash flows from noncapital financing activities:<br />
Advances from other funds — — — 488,649 (1,375,589) — — (886,940)<br />
Transfers in 158,439 — 2,084,912 12,480 2,087,104 — 3,670,438 8,013,373<br />
Transfers out (1,430,039) (7,680) — (2,019,794) — — (2,549,838) (6,007,351)<br />
Net cash provided by (used in)<br />
noncapital financing activities (1,271,600) (7,680) 2,084,912 (1,518,665) 711,515 — 1,120,600 1,119,082<br />
Cash flows from capital and related financing activities:<br />
Acquisition and construction <strong>of</strong> capital assets (3,851,986) (158,048) — — (209,332) — (2,596,452) (6,815,818)<br />
Reduction in long-term obligations — — — (256,632) — — — (256,632)<br />
Interest paid on long-term obligations (6,892) — — (66,690) — — — (73,582)<br />
Net cash (used in)<br />
capital and related financing activities (3,858,878) (158,048) — (323,322) (209,332) — (2,596,452) (7,146,032)<br />
Cash flows from investing activities:<br />
Interest on investments 175,977 91,727 21,265 — (252) 2,372 56,279 347,368<br />
Net cash provided by investing activities 175,977 91,727 21,265 — (252) 2,372 56,279 347,368<br />
Net increase (decrease) in cash<br />
and cash equivalents (1,220,473) 489,488 891,982 — — 2,372 (2,083,606) (1,920,237)<br />
Cash and cash equivalents at beginning <strong>of</strong> year 17,861,934 9,808,574 1,604,504 81,924 — 255,230 7,046,461 36,658,627<br />
Cash and cash equivalents at end <strong>of</strong> year $ 16,641,461 10,298,062 2,496,486 81,924 — 257,602 4,962,855 34,738,390<br />
Cash and investments $ 14,934,393 9,784,131 2,354,539 — — 257,602 4,662,855 31,993,520<br />
Restricted cash and investments 1,707,068 513,931 141,947 81,924 — — 300,000 2,744,870<br />
Total cash and cash equivalents $ 16,641,461 10,298,062 2,496,486 81,924 — 257,602 4,962,855 34,738,390<br />
(Continued)<br />
136
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Cash Flows<br />
Nonmajor Enterprise Funds<br />
For the fiscal year ended June 30, 2012<br />
Water<br />
Pier<br />
Civic<br />
Auditorium<br />
Stormwater<br />
Management<br />
Cemetery<br />
Special<br />
Aviation<br />
Parking<br />
Authority<br />
Total nonmajor<br />
enterprise<br />
funds<br />
Reconciliation <strong>of</strong> operating income (loss) to net<br />
cash provided by (used in) operating activities:<br />
Operating income (loss) $ 384,456 345,423 (1,535,651) 1,072,462 (637,363) — (154,232) (524,905)<br />
Adjustments to reconcile operating income<br />
(loss) to net cash provided by (used in)<br />
operating activities:<br />
Add depreciation 1,001,793 509,436 283,210 301,816 154,066 — 264,207 2,514,528<br />
Change in assets and liabilities:<br />
Increase in accounts receivable (177,202) (1,013,248) (1,561) (27,543) (40,399) — — (1,259,953)<br />
Decrease in prepaids 1,969 1,109 — — — — 6,300 9,378<br />
Decrease in inventory 428,649 — — — — — — 428,649<br />
Increase (decrease) in accounts payable 1,480,913 91,247 1,218 (31) (3,903) — (763,016) 806,428<br />
Increase in accrued liabilities 161,267 84,872 5,469 — 2,914 — — 254,522<br />
Increase in deposits 55,958 253,005 28,147 — — — — 337,110<br />
Increase (decrease) in accrued<br />
noncurrent liabilities (78,541) (27,100) (6,336) — 8,509 — — (103,468)<br />
Increase (decrease) in contracts payable 74,433 — — — (11,706) — (17,292) 45,435<br />
Other nonoperating revenue received 400,333 318,745 11,309 495,283 25,951 — — 1,251,621<br />
Total adjustments 3,349,572 218,066 321,456 769,525 135,432 — (509,801) 4,284,250<br />
Net cash provided by (used in)<br />
operating activities $ 3,734,028 563,489 (1,214,195) 1,841,987 (501,931) — (664,033) 3,759,345<br />
1) The $4.5 million debt owed to the General fund by the Cemetery was forgiven.<br />
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138
CITY OF SANTA MONICA, CALIFORNIA<br />
Internal Service Fund Financial Statements<br />
Internal Service Funds are used to account for the financing <strong>of</strong> goods or services provided by one<br />
department or agency to other departments or agencies <strong>of</strong> the <strong>City</strong> or to other governments, on a costreimbursement<br />
basis.<br />
Vehicle Management Fund – To account for user charges from other funds and expenses related<br />
to the replacement, maintenance and the fueling <strong>of</strong> various <strong>City</strong> vehicles, including specialized<br />
mechanical equipment.<br />
Information Technology Replacement and Services Fund – To account for user charges from<br />
other funds and expenses related to replacement <strong>of</strong> computer equipment.<br />
Self-Insurance, General Liability and Auto – To account for user charges from other funds and<br />
expenses related to the administration and payment <strong>of</strong> general liability and auto claims.<br />
Self-Insurance, Bus Fund – To account for user charges from the Big Blue Bus Fund and<br />
expenses related to the administration and payment <strong>of</strong> municipal bus lines liability claims.<br />
Self-Insurance, Risk Management Administration – To account for user charges from other<br />
funds and expenses related to the administration <strong>of</strong> the risk management division.<br />
Self-Insurance, Workers' Compensation Fund – To account for user charges from other funds<br />
and expenses related to the administration and payment <strong>of</strong> workers' compensation claims.<br />
139
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Net Assets<br />
All Internal Service Funds<br />
June 30, 2012<br />
Vehicle<br />
Management<br />
Information<br />
Technology<br />
Replacement and<br />
Services<br />
Self - Insurance<br />
General Liability /<br />
Auto<br />
Self - Insurance<br />
Bus<br />
Self - Insurance<br />
Risk Management<br />
Admin<br />
Self - Insurance<br />
Workers<br />
Compensation<br />
Assets<br />
Current assets:<br />
Cash and investments $ 26,275,118 6,724,446 15,855,776 5,159,406 580,658 28,565,007 83,160,411<br />
Receivables:<br />
Accounts 87 — 701 — — 14 802<br />
Interest 52,594 11,887 32,141 12,503 3,782 68,541 181,448<br />
Inventory 51,346 — — — — — 51,346<br />
Prepaids — 1,000 — — 8,525 — 9,525<br />
Total current assets 26,379,145 6,737,333 15,888,618 5,171,909 592,965 28,633,562 83,403,532<br />
Noncurrent assets:<br />
Capital assets:<br />
Machinery and equipment 39,395,778 2,359,084 2,849 7,386 919 10,065 41,776,081<br />
Construction in progress 349,248 — — — — — 349,248<br />
Less: accumulated depreciation (24,305,742) (1,812,816) (2,849) (7,386) (919) (10,065) (26,139,777)<br />
Net capital assets 15,439,284 546,268 — — — — 15,985,552<br />
Total assets 41,818,429 7,283,601 15,888,618 5,171,909 592,965 28,633,562 99,389,084<br />
Liabilities<br />
Current liabilities:<br />
Accounts payable 184,102 297,712 108,123 5,410 1,059 10,876 607,282<br />
Accrued liabilities 173,085 — — — 123,562 — 296,647<br />
Claims payable — — 1,426,274 1,524,563 — 5,125,492 8,076,329<br />
Total current liabilities 357,187 297,712 1,534,397 1,529,973 124,621 5,136,368 8,980,258<br />
Noncurrent liabilities:<br />
Accrued liabilities 111,462 — — — 43,123 — 154,585<br />
Claims payable — — 2,423,079 1,188,493 — 20,050,396 23,661,968<br />
Total noncurrent liabilities 111,462 — 2,423,079 1,188,493 43,123 20,050,396 23,816,553<br />
Total liabilities 468,649 297,712 3,957,476 2,718,466 167,744 25,186,764 32,796,811<br />
Net assets<br />
Invested in capital assets, net <strong>of</strong> related debt 15,439,284 546,268 — — — — 15,985,552<br />
Unrestricted 25,910,496 6,439,621 11,931,142 2,453,443 425,221 3,446,798 50,606,721<br />
Total net assets $ 41,349,780 6,985,889 11,931,142 2,453,443 425,221 3,446,798 66,592,273<br />
Total<br />
internal<br />
service<br />
funds<br />
140
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Revenues, Expenses and Changes in Fund Net Assets<br />
All Internal Service Funds<br />
For the fiscal year ended June 30, 2012<br />
Vehicle<br />
Management<br />
Information<br />
Technology<br />
Replacement and<br />
Services<br />
Self - Insurance<br />
General Liability /<br />
Auto<br />
Self - Insurance<br />
Bus<br />
Self - Insurance<br />
Risk Management<br />
Admin<br />
Self - Insurance<br />
Workers<br />
Compensation<br />
Total<br />
internal<br />
service funds<br />
Operating revenues<br />
Charges for services $ 8,916,773 2,156,488 3,230,298 860,000 1,909,321 8,734,179 25,807,059<br />
Total operating revenues 8,916,773 2,156,488 3,230,298 860,000 1,909,321 8,734,179 25,807,059<br />
Operating expenses<br />
Personnel services 2,926,941 — — — 1,297,820 — 4,224,761<br />
Administrative indirect 648,935 — — — — — 648,935<br />
Contractual services 96,242 — 44,059 14,122 76,031 68,555 299,009<br />
Repairs and maintenance 1,187,719 — — — 835 — 1,188,554<br />
Materials and supplies 2,700,791 950,531 158 158 10,350 30,215 3,692,203<br />
Utilities 59,980 — — — 654 572 61,206<br />
Casualty property and liability costs 43,818 — — — 4,543 — 48,361<br />
Claims expense net <strong>of</strong> claims reserve adjustment — — 1,783,914 1,017,658 — 8,450,102 11,251,674<br />
Insurance and bonds — — 1,071,468 500,000 1,810,815 432,275 3,814,558<br />
Miscellaneous fees and costs — — 100,108 81,760 — 363,833 545,701<br />
Depreciation 3,303,585 250,156 — — — — 3,553,741<br />
Other 316,275 — 4,641 489 103,180 4,108 428,693<br />
Total operating expenses 11,284,286 1,200,687 3,004,348 1,614,187 3,304,228 9,349,660 29,757,396<br />
Operating income (loss) (2,367,513) 955,801 225,950 (754,187) (1,394,907) (615,481) (3,950,337)<br />
Nonoperating revenues (expenses)<br />
Investment income 203,612 48,608 119,879 57,087 9,268 244,404 682,858<br />
Loss on disposal <strong>of</strong> capital assets (88,707) — — — — — (88,707)<br />
Other nonoperating 72,632 — — — 6,707 12,089 91,428<br />
Total nonoperating revenues (expenses) 187,537 48,608 119,879 57,087 15,975 256,493 685,579<br />
Income (loss) before transfers (2,179,976) 1,004,409 345,829 (697,100) (1,378,932) (358,988) (3,264,758)<br />
Transfers in — — 2,178,397 — — — 2,178,397<br />
Transfers out — — — (243,823) (841,522) (1,220,689) (2,306,034)<br />
Change in net assets (2,179,976) 1,004,409 2,524,226 (940,923) (2,220,454) (1,579,677) (3,392,395)<br />
Net assets at beginning <strong>of</strong> year 43,529,756 5,981,480 9,406,916 3,394,366 2,645,675 5,026,475 69,984,668<br />
Net assets at end <strong>of</strong> year $ 41,349,780 6,985,889 11,931,142 2,453,443 425,221 3,446,798 66,592,273<br />
141
Vehicle<br />
Management<br />
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Cash Flows<br />
All Internal Service Funds<br />
For the fiscal year ended June 30, 2012<br />
Information<br />
Technology<br />
Replacement<br />
and Services<br />
Self-Insurance<br />
General Liability<br />
/ Auto Self-Insurance Bus<br />
Self-Insurance<br />
Risk Management<br />
Administration<br />
Self-Insurance<br />
Workers'<br />
Compensation<br />
Total Internal<br />
Service Funds<br />
Cash flows from operating activities:<br />
Cash received from customers $ 8,974,373 2,156,488 3,229,597 859,024 1,909,321 8,734,165 25,862,968<br />
Cash payments for materials and services (5,462,966) (702,424) (1,131,545) (604,558) (1,857,569) (889,284) (10,648,346)<br />
Cash payments for claims and related expenses — — (726,583) (947,775) (151,696) (6,175,395) (8,001,449)<br />
Cash payments to employees for services (2,926,941) — — — (1,297,820) (171,298) (4,396,059)<br />
Other nonoperating revenue received 72,632 — — — 6,707 12,089 91,428<br />
Net cash provided by (used in)<br />
operating activities 657,098 1,454,064 1,371,469 (693,309) (1,391,057) 1,510,277 2,908,542<br />
Cash flows from noncapital financing activities:<br />
Transfers in — — 2,178,397 — — — 2,178,397<br />
Transfers out — — — (243,823) (841,522) (1,220,689) (2,306,034)<br />
Net cash provided by (used in)<br />
noncapital financing activities — — 2,178,397 (243,823) (841,522) (1,220,689) (127,637)<br />
Cash flows from capital and related financing activities:<br />
Acquisition and construction <strong>of</strong> capital assets (2,165,730) (93,173) — — — — (2,258,903)<br />
Proceeds from sale <strong>of</strong> capital assets 29,914 — — — — — 29,914<br />
Net cash used in capital and related financing activities (2,135,816) (93,173) — — — — (2,228,989)<br />
Cash flows from investing activities – interest on investments 230,853 50,990 123,753 57,087 13,594 268,965 745,242<br />
Net increase (decrease) in cash and<br />
cash equivalents (1,247,865) 1,411,881 3,673,619 (880,045) (2,218,985) 558,553 1,297,158<br />
Cash and cash equivalents at beginning <strong>of</strong> year 27,522,983 5,312,565 12,182,157 6,039,451 2,799,643 28,006,454 81,863,253<br />
Cash and cash equivalents at end <strong>of</strong> year $ 26,275,118 6,724,446 15,855,776 5,159,406 580,658 28,565,007 83,160,411<br />
Reconciliation <strong>of</strong> operating income to net cash<br />
provided (used) by operating activities:<br />
Operating income (loss) $ (2,367,513) 955,801 225,950 (754,187) (1,394,907) (615,481) (3,950,337)<br />
Adjustments to reconcile operating income to<br />
net cash provided (used) by operating activities:<br />
Add depreciation 3,303,585 250,156 — — — — 3,553,741<br />
Change in assets and liabilities:<br />
(Increase) decrease in accounts receivable 57,600 — (701) (976) — (14) 55,909<br />
(Increase) decrease in prepaids — 10,000 10,216 — (8,525) 8,123 19,814<br />
Decrease in inventory 25,599 — — — — — 25,599<br />
Increase (decrease) in accounts payable (463,072) 238,107 88,889 (8,029) 157,364 2,151 15,410<br />
Increase (decrease) in accrued liabilities 28,267 — — — — (171,298) (143,031)<br />
Increase (decrease) in claims payable — — 1,047,115 69,883 (151,696) 2,274,707 3,240,009<br />
Other nonoperating revenue received 72,632 — — — 6,707 12,089 91,428<br />
Total adjustments<br />
Net cash provided (used) by operating<br />
3,024,611 498,263 1,145,519 60,878 3,850 2,125,758 6,858,879<br />
activities $ 657,098 1,454,064 1,371,469 (693,309) (1,391,057) 1,510,277 2,908,542<br />
142
CITY OF SANTA MONICA, CALIFORNIA<br />
Fiduciary Fund Financial Statements<br />
Agency Funds are custodial in nature and used to receive and disburse funds for an entity/individual,<br />
which is not part <strong>of</strong> the <strong>City</strong>.<br />
General Trust Fund - To account for funds given to the <strong>City</strong> for restricted purposes whereby the<br />
<strong>City</strong> is only acting as a pass-through agent.<br />
Street Light Fund - To account for all receipts and disbursements associated with 1911 Act<br />
Street Light Assessment Bonds.<br />
143
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Fiduciary Assets and Liabilities<br />
Agency Funds<br />
June 30, 2012<br />
Assets<br />
General Street Total<br />
Trust Light Agency Funds<br />
Restricted cash and investments $ 6,700,553<br />
4,556 6,705,109<br />
Accounts receivable 85,387 — 85,387<br />
Total assets $ 6,785,940<br />
4,556 6,790,496<br />
Liabilities<br />
Accounts payable and accrued liabilities $ 6,785,940<br />
4,556 6,790,496<br />
Total liabilities $ 6,785,940<br />
4,556 6,790,496<br />
144
CITY OF SANTA MONICA, CALIFORNIA<br />
Combining Statement <strong>of</strong> Changes in Fiduciary Assets and Liabilities<br />
Agency Funds<br />
For the fiscal year ended June 30, 2012<br />
Fiduciary Funds<br />
Agency Funds:<br />
General Trust<br />
Assets:<br />
Year ended<br />
Year ended<br />
June 30, 2011 Additions Reductions June 30, 2012<br />
Restricted cash and investments $ 3,797,825 61,704,962 58,802,234 6,700,553<br />
Accounts receivable 71,020 175,176 160,809 85,387<br />
Total assets $ 3,868,845 61,880,138 58,963,043 6,785,940<br />
Liabilities:<br />
Due to other agencies $ 3,868,845 61,880,138 58,963,043 6,785,940<br />
Total liabilities $ 3,868,845 61,880,138 58,963,043 6,785,940<br />
Street Light<br />
Assets:<br />
Restricted cash and investments $ 4,473<br />
45,970 45,887 4,556<br />
Total assets $ 4,473<br />
45,970 45,887 4,556<br />
Liabilities:<br />
Due to other agencies $ 4,473<br />
45,970 45,887 4,556<br />
Total liabilities $ 4,473<br />
45,970 45,887 4,556<br />
Total Fiduciary Funds<br />
Total Agency Funds<br />
Assets:<br />
Restricted cash and investments $ 3,802,298 61,750,932 58,848,121 6,705,109<br />
Accounts Receivable 71,020 175,176 160,809 85,387<br />
Total assets $ 3,873,318 61,926,108 59,008,930 6,790,496<br />
Liabilities:<br />
Due to other agencies $ 3,873,318 $ 61,926,108 $ 59,008,930 6,790,496<br />
Total liabilities $ 3,873,318 $ 61,926,108 59,008,930 6,790,496<br />
145
THIS PAGE INTENTIONALLY LEFT BLANK<br />
146
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, California<br />
Year Ended June 30, 2012<br />
STATISTICAL SECTION
CITY OF SANTA MONICA, CALIFORNIA<br />
For the fiscal year ended June 30, 2012<br />
STATISTICAL SECTION (unaudited)<br />
Table<br />
Financial Trends Information<br />
These schedules contain trend information to help the reader understand how the<br />
government's financial performance and well-being have changed over time.<br />
Page<br />
1 Net Assets by Component - Last Ten Fiscal Years 149<br />
2 Changes in Net Assets - Last Ten Fiscal Years 150<br />
3 Fund Balance <strong>of</strong> Governmental Funds - Last Ten Fiscal Years 153<br />
4 Changes in Fund Balance <strong>of</strong> Governmental Funds - Last Ten Fiscal Years 154<br />
5 General Fund Tax Revenues by Source - Last Ten Fiscal Years 156<br />
Revenue Capacity Information<br />
These schedules contain information to help the reader assess the government's most<br />
significant local revenue source, the property tax.<br />
6 Assessed Value and Actual Value <strong>of</strong> Taxable Property - Last Ten Fiscal Years 157<br />
7 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years 158<br />
8 Principal Property Taxpayers - Current Fiscal Year and Nine Years Ago 159<br />
9 Property Tax Levies and Collections - Last Ten Fiscal Years 160<br />
10 Taxable Transactions by Type <strong>of</strong> Business - Last Ten Calendar Years 161<br />
Debt Capacity Information<br />
These schedules present information to help the reader assess the affordability <strong>of</strong> the<br />
government's current levels <strong>of</strong> outstanding debt and government's ability to issue additional<br />
debt in the future.<br />
11 Ratios <strong>of</strong> Outstanding Debt by Type - Last Ten Fiscal Years 162<br />
12 Ratios <strong>of</strong> General Bonded Debt - Last Ten Fiscal Years 163<br />
13 Direct and Overlapping Governmental Activities Debt as <strong>of</strong> June 30, 2012 164<br />
14 Computation <strong>of</strong> Legal Debt Margin - Last Ten Fiscal Years 165<br />
15 Wastewater Enterprise Revenue Bonds Coverage 166<br />
16 Redevelopment Agency Earthquake Recovery Project Tax Allocation Bonds Coverage 167<br />
17 Redevelopment Agency Ocean Park Project Tax Allocation Refunding Bonds Coverage 168<br />
147
CITY OF SANTA MONICA, CALIFORNIA<br />
For the fiscal year ended June 30, 2012<br />
STATISTICAL SECTION (unaudited), continued<br />
Table<br />
18 Parking Authority <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Lease Revenue Refunding Bonds, Schedule <strong>of</strong><br />
Debt Service Payments Made<br />
19 <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Bonds, Series 2011A Parking<br />
Structure 6 Project Schedule <strong>of</strong> Debt Service Payments Made<br />
20 <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Bonds, Series 2011B Public Safety<br />
Facility Project Schedule <strong>of</strong> Debt Service Payments Made<br />
21 Public Financing Authority Lease Revenue Bonds, Series 2004 Civic Center Parking Project<br />
Schedule <strong>of</strong> Debt Service Payments Made<br />
22 Public Financing Authority Lease Revenue Bonds, Refunding Bonds, Series 2009 Public<br />
Safety Facility Project Schedule <strong>of</strong> Debt Service Payments Made<br />
23 <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> General Obligation Bonds, Series 2012 Library Improvement Project<br />
Schedule <strong>of</strong> Debt Service Payments Made<br />
Page<br />
169<br />
170<br />
171<br />
172<br />
173<br />
174<br />
Demographic and Economic Information<br />
These schedules <strong>of</strong>fer demographic and economic indicators to help the reader understand<br />
the environment within which the government's financial activities take place.<br />
24 Demographic and Economic Statistics - Last Ten Calendar Years 175<br />
25 Principal Employers - Current Year and Nine Years Ago 176<br />
Operating Information<br />
These schedules contain service and infrastructure data to help the reader understand how the<br />
information in the government's financial report relates to the services the government<br />
provides and activities it performs.<br />
26 Full-Time Equivalent <strong>City</strong> Government Employees by Function/Program -<br />
Last Nine Fiscal Years<br />
27 Operating Indicators by Function/Program - Last Seven Fiscal Years 178<br />
28 Capital Assets Statistics by Function/Program - Last Seven Fiscal Years 179<br />
177<br />
148
CITY OF SANTA MONICA, CALIFORNIA<br />
Net Assets by Component<br />
Last Ten Fiscal Years<br />
(Accrual Basis <strong>of</strong> Accounting)<br />
TABLE 1<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 * 2005-06 * 2004-05 * 2003-04 * 2002-03<br />
Governmental activities<br />
Invested in capital assets, net <strong>of</strong> related debt $ 708,564,360 565,402,905 561,308,717 579,367,093 573,971,975 506,307,676 481,678,996 165,893,160 162,528,406 193,302,132<br />
Restricted 171,964,389 198,990,741 190,302,568 187,103,831 232,281,102 273,104,503 196,818,353 200,744,882 185,632,392 123,983,319<br />
Unrestricted 379,302,789 248,977,209 238,856,963 242,542,375 209,438,522 243,036,538 230,154,215 223,451,608 203,446,595 146,779,333<br />
Total governmental activities net assets 1,259,831,538 1,013,370,855 990,468,248 1,009,013,299 1,015,691,599 1,022,448,717 908,651,564 590,089,650 551,607,393 464,064,784<br />
Business-type activities<br />
Invested in capital assets, net <strong>of</strong> related debt 448,028,200 442,305,322 426,367,876 418,157,537 389,409,515 374,598,609 324,108,646 266,212,630 255,607,992 217,142,128<br />
Restricted 16,024,235 13,527,238 10,855,611 1,661,758 1,625,057 2,503,448 37,365,926 34,846,062 34,145,541 33,703,216<br />
Unrestricted 104,588,473 102,753,866 107,670,491 112,067,386 104,955,422 114,601,165 129,288,372 100,528,572 109,303,814 107,105,633<br />
Total business-type activities net assets 568,640,908 558,586,426 544,893,978 531,886,681 495,989,994 491,703,222 490,762,944 401,587,264 399,057,347 357,950,977<br />
Primary government<br />
Invested in capital assets, net <strong>of</strong> related debt 1,156,592,560 1,007,708,227 987,676,593 997,524,630 963,381,490 880,906,285 805,787,642 432,105,790 418,136,398 410,444,260<br />
Restricted 187,988,624 212,517,979 201,158,179 188,765,589 233,906,159 275,607,951 234,184,279 235,590,944 219,777,933 157,686,535<br />
Unrestricted 483,891,262 351,731,075 346,527,454 354,609,761 314,393,944 357,637,703 359,442,587 323,980,180 312,750,409 253,884,966<br />
Total primary government net assets $ 1,828,472,446 1,571,957,281 1,535,362,226 1,540,899,980 1,511,681,593 1,514,151,939 1,399,414,508 991,676,914 950,664,740 822,015,761<br />
* Before restatement<br />
149
CITY OF SANTA MONICA, CALIFORNIA<br />
Changes in Net Assets<br />
Last Ten Fiscal Years<br />
TABLE 2<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03<br />
Expenses<br />
Governmental activities:<br />
General government $ 65,640,271 61,586,151 61,396,079 46,670,826 38,849,626 45,323,227 31,288,910 33,648,946 12,218,726 22,203,518<br />
Public safety 108,205,471 99,949,848 97,744,567 100,709,990 91,862,403 87,830,433 82,886,707 80,300,625 74,489,887 63,496,266<br />
General services 55,341,929 43,762,251 74,233,708 161,224,085 111,168,586 41,404,237 64,777,602 32,961,058 30,659,648 37,843,832<br />
Cultural and recreation services 62,145,219 57,163,928 40,891,483 44,031,895 33,776,210 43,646,843 40,022,151 35,163,220 36,958,290 33,896,585<br />
Library 11,899,948 11,803,735 11,324,327 11,422,789 11,458,259 10,681,518 7,974,534 7,849,658 20,241,923 6,331,445<br />
Housing and community development 181,970,013 89,321,590 110,251,868 115,827,555 91,966,369 74,988,387 56,708,298 52,223,052 64,079,218 40,512,087<br />
Other (1) — — — — — 469,285 2,212,186 1,273,607 244,438 422,786<br />
Interest on long term debt 6,585,618 10,461,700 7,075,187 7,252,197 7,628,437 7,934,428 7,514,924 9,507,522 8,430,126 7,719,369<br />
Total governmental activities 491,788,469 374,049,203 402,917,219 487,139,337 386,709,890 312,278,358 293,385,312 252,927,688 247,322,256 212,425,888<br />
Business-type activities:<br />
Water 19,665,696 16,430,207 16,419,201 15,958,328 15,489,230 14,830,595 13,855,863 17,564,916 16,382,688 13,636,722<br />
Solid waste management 25,065,338 21,338,133 20,293,510 19,219,079 16,277,710 18,630,141 17,459,310 16,550,895 15,933,665 15,022,708<br />
Pier 5,803,944 5,299,875 5,122,011 5,200,065 4,867,415 9,485,709 7,544,001 6,922,305 8,079,003 6,108,337<br />
Wastewater 18,186,844 16,546,844 16,844,271 19,603,411 20,063,420 19,579,035 19,008,944 14,755,836 14,013,170 15,652,716<br />
Civic auditorium 3,239,999 3,638,257 3,663,427 3,933,159 3,718,652 3,535,624 2,898,853 3,129,521 2,741,857 2,839,311<br />
Airport 5,270,688 5,970,916 4,640,782 5,737,927 5,199,701 5,325,190 3,882,639 3,845,108 3,845,116 3,675,501<br />
Storm water management 411,985 422,048 424,122 721,728 474,683 502,183 648,374 966,897 403,294 374,866<br />
Cemetery 1,812,098 2,431,791 2,633,893 1,956,609 1,715,605 1,481,238 989,274 1,243,343 1,137,698 1,066,434<br />
Big Blue Bus 79,835,156 75,219,425 70,899,277 70,855,809 65,185,007 59,627,736 59,180,481 52,021,645 47,265,202 44,543,108<br />
Cable communications (2) — — — — — — — 1,340,120 932,823 883,657<br />
Special aviation — — — 28,904 18,333 69,374 52,329 52,329 52,329 52,329<br />
Parking authority 315,736 474,629 554,117 1,598,765 349,576 709,982 16,189 202,794 337,552 558,058<br />
Total business-type activities 159,607,484 147,772,125 141,494,611 144,813,784 133,359,332 133,776,807 125,536,257 118,595,709 111,124,397 104,413,747<br />
Total primary governmental activities expenses 651,395,953 521,821,328 544,411,830 631,953,121 520,069,222 446,055,165 418,921,569 371,523,397 358,446,653 316,839,635<br />
Program revenues<br />
Governmental activities:<br />
Charges for services:<br />
General government 48,239,920 42,771,812 34,681,601 19,198,345 17,188,876 17,326,675 12,567,222 10,854,382 7,005,002 6,576,292<br />
Public safety 22,033,156 21,456,284 22,759,704 17,064,322 17,298,741 17,202,256 15,754,085 15,840,756 15,671,730 12,463,506<br />
General services 2,429,537 2,004,958 3,067,408 20,291,439 19,650,237 18,841,288 17,880,336 15,776,086 15,105,283 11,130,386<br />
Cultural and recreation services 16,083,451 13,523,507 14,219,229 10,608,948 9,492,174 9,002,084 8,556,557 8,147,054 (3) 7,842,184 6,763,867<br />
Library 465,891 488,279 468,385 410,908 363,987 349,139 232,025 173,864 178,555 276,812<br />
Housing and community development 16,712,921 14,304,279 16,224,777 12,416,654 14,430,326 13,925,980 12,553,269 12,193,457 13,478,114 8,647,389<br />
Operating grants and contributions 26,739,187 29,111,918 27,556,715 30,164,300 34,803,655 28,362,525 25,133,124 26,063,799 31,705,184 28,720,949<br />
Capital grants and contributions 3,369,221 3,997,076 6,506,765 20,379,864 4,862,387 4,839,925 5,838,885 612,985 1,500,466 17,365,486<br />
Total governmental activities program revenues 136,073,284 127,658,113 125,484,584 130,534,780 118,090,383 109,849,872 98,515,503 89,662,383 92,486,518 91,944,687<br />
(continues next page)<br />
150
CITY OF SANTA MONICA, CALIFORNIA<br />
Changes in Net Assets<br />
Last Ten Fiscal Years<br />
TABLE 2<br />
(continues from previous page)<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03<br />
Business-type activities:<br />
Charges for services:<br />
Water 19,897,464 17,507,315 15,771,081 15,774,047 16,130,044 15,323,653 13,868,390 13,113,058 13,110,498 13,636,278<br />
Solid waste management 22,253,758 21,870,554 21,514,219 21,631,313 18,842,702 18,766,107 17,097,813 15,704,667 14,598,362 14,622,424<br />
Pier 6,004,005 4,729,725 3,777,219 3,518,145 3,107,349 3,081,338 2,693,200 2,717,162 2,563,783 2,275,873<br />
Wastewater 20,007,219 17,820,805 15,198,022 13,751,588 12,797,786 12,472,073 11,175,051 11,376,456 11,004,692 10,768,475<br />
Civic auditorium 1,667,172 2,603,146 2,620,897 2,975,749 3,117,033 2,789,196 2,608,759 2,474,609 2,279,508 2,229,724<br />
Airport 3,891,716 3,748,674 3,768,426 3,989,851 4,279,268 3,992,190 3,862,455 3,706,719 3,527,460 2,962,153<br />
Storm water management 1,419,980 1,167,073 1,613,426 1,885,142 1,301,350 1,376,672 1,610,715 1,439,149 1,355,903 1,825,026<br />
Cemetery 1,133,990 856,141 952,972 1,009,595 1,080,532 735,718 665,398 650,484 445,327 396,638<br />
Big Blue Bus 16,614,711 16,370,290 14,160,133 14,391,300 13,898,980 13,078,630 13,333,584 11,298,250 12,190,925 11,903,989<br />
Cable communications (2) — — — — — — — 798,984 747,063 664,318<br />
Parking authority 161,504 152,200 152,200 149,200 145,600 141,600 138,100 1,612,705 1,457,952 1,370,445<br />
Operating grants and contributions 38,424,357 36,001,870 38,843,722 34,203,607 32,188,569 31,723,528 32,297,732 29,638,114 24,671,943 22,455,902<br />
Capital grants and contributions 25,609,158 32,046,978 29,299,894 53,209,039 20,030,403 12,185,518 19,061,484 17,318,761 7,943,966 26,497,439<br />
Business-type activities program revenues 157,085,034 154,874,771 147,672,211 166,488,576 126,919,616 115,666,223 118,412,681 111,849,118 95,897,382 111,608,684<br />
Total primary government program revenues 293,158,318 282,532,884 273,156,795 297,023,356 245,009,999 225,516,095 216,928,184 201,511,501 188,383,900 203,553,371<br />
Net (expense):<br />
Governmental activities (355,715,185) (246,391,090) (277,432,635) (356,604,557) (268,619,507) (202,428,486) (194,869,809) (163,265,305) (154,835,738) (120,481,201)<br />
Business-type activities (2,522,450) 7,102,646 6,177,600 21,674,792 (6,439,716) (18,110,584) (7,123,576) (6,746,591) (15,227,015) 7,194,937<br />
Total primary government net expense (358,237,635) (239,288,444) (271,255,035) (334,929,765) (275,059,223) (220,539,070) (201,993,385) (170,011,896) (170,062,753) (113,286,264)<br />
General Revenues and Other changes<br />
in Net Assets<br />
Governmental activities:<br />
Taxes:<br />
Business 27,382,495 26,531,627 27,582,398 28,821,688 26,211,226 24,232,707 21,775,442 20,384,372 19,249,942 18,963,761<br />
Property 59,161,313 108,995,358 110,188,615 107,255,345 101,323,706 89,845,591 79,951,933 64,667,456 58,267,374 50,562,134<br />
Sales 45,831,961 31,689,531 26,636,653 28,296,696 32,356,941 33,267,253 31,871,593 27,579,776 27,825,098 25,235,982<br />
Other 84,935,499 80,376,978 75,397,844 76,146,388 81,762,203 77,036,651 71,788,854 67,203,194 65,196,019 60,661,614<br />
Settlement income 3,750,000 — — 89,910,872 1,012,863 69,153,512 6,453,804 4,545,498 73,978,421 —<br />
Other income 120,208,757 12,173,094 9,043,114 9,128,899 8,428,266 6,213,329 9,638,813 4,838,074 4,713,695 6,284,767<br />
Investment earnings 5,791,811 7,995,401 10,062,739 16,198,386 22,021,977 25,505,798 11,995,355 10,289,600 3,645,712 5,737,648<br />
Extraordinary Gain 261,255,080 — — — — — — — — —<br />
Transfers (6,141,048) 1,531,708 (23,779) (5,832,017) (2,815,040) (9,029,202) (8,394,702) (4,773,908) (9,257,834) (2,812,169)<br />
Total governmental activities 602,175,868 269,293,697 258,887,584 349,926,257 270,302,142 316,225,639 225,081,092 194,734,062 243,618,427 164,633,737<br />
(continues next page)<br />
151
CITY OF SANTA MONICA, CALIFORNIA<br />
Changes in Net Assets<br />
Last Ten Fiscal Years<br />
TABLE 2<br />
(continues from previous page)<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03<br />
Business-type activities:<br />
Other income 5,310,643 6,767,730 3,912,725 4,162,283 3,421,837 4,111,407 6,028,516 3,352,205 4,239,895 2,592,307<br />
Investment earnings 1,125,241 1,353,780 2,893,193 4,227,595 4,489,611 7,439,759 2,673,080 4,007,045 2,090,273 2,224,559<br />
Transfers 6,141,048 (1,531,708) 23,779 5,832,017 2,815,040 9,029,202 8,394,702 4,773,908 9,257,834 2,812,169<br />
Total business-type activities 12,576,932 6,589,802 6,829,697 14,221,895 10,726,488 20,580,368 17,096,298 12,133,158 15,588,002 7,629,035<br />
Total primary government 256,515,165 36,595,055 (5,537,754) 29,218,387 5,969,407 116,266,937 40,184,005 36,855,324 89,143,676 58,976,508<br />
Changes in net assets<br />
Governmental activities 246,460,683 22,902,607 (18,545,051) (6,678,300) 1,682,635 113,797,153 30,211,283 31,468,757 88,782,689 44,152,536<br />
Business-type activities 10,054,482 13,692,448 13,007,297 35,896,687 4,286,772 2,469,784 9,972,722 5,386,567 360,987 14,823,972<br />
Total primary government $ 256,515,165 36,595,055 (5,537,754) 29,218,387 5,969,407 116,266,937 40,184,005 36,855,324 89,143,676 58,976,508<br />
(1) Other expenses allocated to programs in FY 07-08.<br />
(2) Cable communications became a division <strong>of</strong> the <strong>City</strong> Manager's Office in FY 05-06.<br />
(3) $3,562 previously presented as Other.<br />
152
CITY OF SANTA MONICA, CALIFORNIA<br />
Fund Balance <strong>of</strong> Governmental Funds<br />
Last Ten Fiscal Years<br />
(Modified Accrual Basis <strong>of</strong> Accounting)<br />
TABLE 3<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03<br />
General Fund<br />
Reserved $ — — 36,257,776 41,432,273 81,056,800 91,843,183 97,044,588 116,386,390 112,721,556 138,058,223<br />
Unreserved — — 179,212,920 155,521,957 67,745,079 63,826,421 55,923,644 52,350,429 62,244,592 44,338,729<br />
* Nonspendable 22,181,490 26,249,121 — — — — — — — —<br />
* Restricted 43,056,449 503,645 — — — — — — — —<br />
* Committed 640,000 710,000 — — — — — — — —<br />
* Assigned 233,153,471 159,430,759 — — — — — — — —<br />
* Unassigned 117,225,871 108,382,191 — — — — — — — —<br />
Total General Fund $ 416,257,281 295,275,716 215,470,696 196,954,230 148,801,879 155,669,604 152,968,232 168,736,819 174,966,148 182,396,952<br />
All other governmental funds<br />
Reserved $ — — 138,504,430 134,770,865 217,888,723 314,507,732 229,263,232 224,211,709 202,305,246 128,107,698<br />
Unreserved, reported in:<br />
Special revenue funds — — 37,657,180 42,902,430 67,387,055 11,027,475 5,569,484 7,883,995 5,119,597 19,763,099<br />
Capital project funds — — 50,427,715 66,021,140 (7,937,337) (5,053,769) (10,434,018) (20,392,300) (21,413,949) (24,171,070)<br />
* Nonspendable 23,331,591 10,788,188 — — — — — — — —<br />
* Restricted 123,658,262 170,449,269 — — — — — — — —<br />
* Committed 872,830 51,975 — — — — — — — —<br />
* Assigned 32,550,023 125,697,278 — — — — — — — —<br />
* Unassigned (187,396) (16,868,340) — — — — — — — —<br />
Total all other government funds $ 180,225,310 290,118,370 226,589,325 243,694,435 277,338,441 320,481,438 224,398,698 211,703,404 186,010,894 123,699,727<br />
* Fund Balance descriptions changed due to GASB 54 implementation effective July 1, 2010.<br />
153
CITY OF SANTA MONICA, CALIFORNIA<br />
Changes in Fund Balance <strong>of</strong> Governmental Funds<br />
Last Ten Fiscal Years<br />
(Modified Accrual Basis <strong>of</strong> Accounting)<br />
TABLE 4<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03<br />
Revenues<br />
Property taxes $ 40,226,124 36,048,260 37,419,658 36,763,026 36,067,632 32,586,134 28,031,618 25,650,975 24,389,651 20,205,578<br />
Incremental property taxes 19,794,851 73,735,955 73,526,738 71,289,749 66,148,046 58,163,695 52,818,794 39,866,836 34,653,601 37,650,778<br />
Sales taxes 45,831,961 31,689,531 26,636,653 28,296,696 32,356,941 33,267,253 31,871,593 27,579,776 27,825,098 25,235,982<br />
Other taxes 111,350,245 107,289,588 104,012,543 105,639,635 109,556,310 102,870,450 97,203,255 71,083,492 68,077,435 63,369,941<br />
License and permits 30,608,592 27,564,660 20,658,582 20,398,191 20,203,085 19,232,085 18,378,705 39,361,156 35,662,507 33,315,009<br />
Intergovernmental 28,277,049 30,887,064 30,132,263 36,408,496 33,007,061 28,948,391 20,020,970 25,481,694 28,562,694 30,893,991<br />
Charges for services 52,613,331 45,248,472 46,975,370 39,238,389 36,226,643 35,855,124 29,083,568 20,918,458 18,401,113 16,904,889<br />
Fines and forfeitures 15,651,820 15,952,957 17,492,928 14,113,906 14,567,262 14,191,722 13,101,713 13,332,411 13,344,573 10,742,425<br />
Investment earnings 4,989,972 9,376,656 9,218,863 15,455,332 21,450,071 24,225,164 11,649,849 10,699,979 4,471,698 6,181,428<br />
Rental income 9,619,254 8,541,702 7,026,380 5,467,946 7,006,972 7,279,995 6,562,654 8,638,543 7,854,141 7,976,304<br />
Settlement income 33,277,271 — 40,196,472 4,429,738 1,012,863 69,153,512 6,453,804 4,545,498 73,929,382 —<br />
Other 119,494,012 10,306,512 10,833,352 28,651,201 16,691,497 8,446,372 9,794,587 4,497,162 5,817,295 7,150,655<br />
Total revenue 511,734,482 396,641,357 424,129,802 406,152,305 394,294,383 434,219,897 324,971,110 291,655,980 342,989,188 259,626,980<br />
Expenditures<br />
Current<br />
General government 63,819,021 61,134,533 58,843,432 45,242,680 38,595,140 37,006,125 33,564,080 29,629,861 23,558,535 21,872,722<br />
Public safety 106,215,553 99,416,830 99,142,700 96,985,086 89,074,863 87,509,154 82,576,196 80,424,716 64,584,136 77,674,621<br />
General services 77,196,770 34,401,503 97,766,993 70,963,814 116,628,339 46,537,282 51,793,265 31,005,774 42,228,092 46,117,908<br />
Cultural and recreation services 60,322,014 58,557,389 38,707,842 53,045,810 46,035,625 49,549,413 44,991,537 59,290,534 38,287,458 35,179,915<br />
Library 11,323,906 10,594,925 10,067,865 10,099,063 10,245,110 9,454,034 20,759,269 31,443,914 17,844,322 13,002,733<br />
Retirement (1) — — — — — — — — 13,258,631 7,068,355<br />
Housing and community development 197,257,796 139,291,179 108,277,261 113,730,249 118,452,727 77,871,025 61,094,984 58,081,802 63,175,791 36,280,489<br />
Statutory pass throughs (2) — — — — — — — — — 6,577,635<br />
Other — — — — 2,749,086 609,225 2,189,224 1,087,085 241,524 329,561<br />
Capital outlay (3) — — — — — — — — — 13,045,843<br />
Debt service<br />
Principal 13,180,714 9,241,980 7,530,000 8,375,000 8,075,000 7,805,000 6,515,000 5,625,000 4,880,000 1,625,000<br />
Interest 12,312,625 10,059,522 10,079,799 8,386,518 8,941,832 8,206,309 9,947,949 9,572,189 9,401,520 7,644,173<br />
Bond issuance costs 441,993 440,308 219,405 — — — 1,324,281 — — —<br />
Total expenditures 542,070,392 423,138,169 430,635,297 406,828,220 438,797,722 324,547,567 314,755,785 306,160,875 277,460,009 266,418,955<br />
(continues next page)<br />
154
CITY OF SANTA MONICA, CALIFORNIA<br />
Changes in Fund Balance <strong>of</strong> Governmental Funds<br />
Last Ten Fiscal Years<br />
(Modified Accrual Basis <strong>of</strong> Accounting)<br />
TABLE 4<br />
(continues from previous page)<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03<br />
Excess (deficiency) <strong>of</strong> revenues<br />
over (under) expenditures (30,335,910) (26,496,812) (6,505,495) (675,915) (44,503,339) 109,672,330 10,215,325 (14,504,895) 65,529,179 (6,791,975)<br />
Other financing sources (uses)<br />
Transfers in 98,800,641 108,200,623 53,644,396 91,332,304 46,495,411 24,721,684 24,782,699 30,368,084 23,047,929 22,831,619<br />
Transfers out (105,257,875) (106,957,815) (53,948,675) (91,633,368) (49,574,857) (33,998,086) (33,501,106) (35,493,072) (32,456,665) (25,790,988)<br />
Line <strong>of</strong> credit proceeds — 26,528,395 7,986,281 15,485,324 — — — — — —<br />
Long-term debt issued 32,178,250 — — — — — — — — —<br />
Refunding bonds issued 19,950,000 41,050,000 9,155,000 — — — 64,720,000 — — —<br />
Bonds issued — — — — — — — 38,930,000 — 25,000,000<br />
Premium on bonds issued 4,339,840 409,674 558,699 — — — 55,653 163,064 — 80,000<br />
Discount on bonds issued — — — — — — (187,264) — — —<br />
Payments to refunded bond escrow agent (22,289,654) (1,900,000) (9,478,850) — — — (63,213,909) — — —<br />
Proceeds from loans payable — 102,500,000 — — — — — — — —<br />
Total other financing sources (uses) 27,721,202 169,830,877 7,916,851 15,184,260 (3,079,446) (9,276,402) (7,343,927) 33,968,076 (9,408,736) 22,120,631<br />
Extraordinary gain 13,703,213 — — — — — — — — —<br />
Net change in fund balance $ 11,088,505 143,334,065 1,411,356 14,508,345 (47,582,785) 100,395,928 2,871,398 19,463,181 56,120,443 15,328,656<br />
Debt service as a percentage <strong>of</strong> noncapital<br />
expenditures (4) 5.23% 5.34% 4.25% 4.54% 4.52% 5.51% 6.10% 6.50% 6.27% 4.37%<br />
(1) Retirement costs allocated to program areas beginning in FY 2004-05.<br />
(2) Statutory pass throughs included in housing and community development beginning FY 2003-04.<br />
(3) Capital outlay included in expenditures beginning in FY 2003-04.<br />
(4) Calculation includes only the principal and interest components <strong>of</strong> debt service expenditures when calculating this ratio for all years.<br />
155
CITY OF SANTA MONICA, CALIFORNIA<br />
General Fund Tax Revenues by Source (1)<br />
Last Ten Fiscal Years<br />
(In Thousands)<br />
TABLE 5<br />
Source<br />
2011-2012 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03<br />
Sales taxes $ 45,832 31,690 26,637 28,297 32,357 33,267 31,872 27,580 27,825 25,236<br />
Utility user's tax 31,296 31,625 31,620 31,579 31,622 31,243 30,044 29,315 28,967 27,549<br />
Transient occupancy tax 36,143 32,747 29,804 31,265 34,969 31,892 29,209 23,419 19,850 17,059<br />
Property taxes (2) 40,226 36,048 37,420 37,763 36,068 32,586 28,032 25,651 23,098 20,206<br />
Business license taxes 26,325 25,480 26,553 27,216 24,654 22,637 20,274 18,970 17,894 17,745<br />
Parking facility tax 9,394 8,786 7,848 7,980 7,826 7,400 6,832 6,241 6,098 5,898<br />
Real property transfer tax 5,192 3,954 3,432 2,653 4,739 6,409 5,573 7,180 5,350 3,968<br />
Vehicle license fees 46 492 273 263 390 608 2,062 975 4,034 5,170<br />
Condominium taxes 37 21 19 35 50 39 24 24 46 46<br />
Total $ 194,491 170,843 163,606 167,051 172,675 166,081 153,922 139,355 133,162 122,877<br />
(1)<br />
(2)<br />
Does not include Highway Users Taxes, which are recorded in the Gas Tax Fund, Unit Dwelling Taxes, which are recorded in the Parks and Recreation Facilities Fund, or TORCA Conversion<br />
Taxes, which are recorded in the TORCA Fund.<br />
Includes ad valorem property taxes for purposes <strong>of</strong> paying debt service on general obligation bonds. Does not include tax increment received by redevelopment area.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
156
CITY OF SANTA MONICA, CALIFORNIA<br />
TABLE 6<br />
Assessed Value and Actual Value <strong>of</strong> Taxable Property<br />
Last Ten Fiscal Years<br />
Fiscal<br />
Personal<br />
Net assessed<br />
Total Direct<br />
year Land Improvements<br />
property Public utilities Secured gross Exemptions (1) Secured net Net unsecured<br />
valuations<br />
Tax Rate (2)<br />
2011-12 $ 14,235,295,327 $ 10,349,620,756 $ 228,783,669 $ 742,365 $ 24,814,442,117 $ 1,073,027,474 $ 23,741,414,643 $ 902,707,005 $ 24,644,121,648 1.00%<br />
2010-11 13,795,190,847 10,070,985,576 230,386,558 742,365 24,097,305,346 1,095,460,532 23,001,844,814 880,330,859 23,882,175,673 1.00%<br />
2009-10 13,972,767,145 9,978,674,920 234,194,136 742,365 24,186,378,566 1,134,966,580 23,051,411,986 969,009,242 24,020,421,228 1.00%<br />
2008-09 13,460,086,702 9,640,424,526 228,270,851 742,365 23,329,524,444 904,660,628 22,424,863,816 987,848,754 23,412,712,570 1.00%<br />
2007-08 12,279,875,463 8,581,600,449 230,361,744 742,365 21,092,580,021 847,012,250 20,245,567,771 877,156,158 21,122,723,929 1.00%<br />
2006-07 11,307,028,243 8,100,538,705 231,255,829 742,865 19,639,565,642 810,600,441 18,828,965,201 876,645,078 19,705,610,279 1.00%<br />
2005-06 10,226,948,142 7,591,414,476 37,240,768 742,865 17,856,346,251 535,704,727 17,320,641,524 777,908,774 18,098,550,298 1.00%<br />
2004-05 9,187,366,819 7,004,200,099 25,810,792 3,266,758 16,220,644,468 445,214,530 15,775,429,938 771,454,105 16,546,884,043 1.00%<br />
2003-04 8,398,483,440 6,720,989,375 110,879,795 3,076,425 15,233,429,035 458,910,480 14,774,518,555 936,652,394 15,711,170,949 1.00%<br />
2002-03 7,743,067,190 6,378,861,320 77,861,370 577,895 14,200,367,775 432,908,920 13,767,458,855 830,892,607 14,598,351,462 1.00%<br />
(1) Includes Homeowner Exemption. <strong>City</strong> is reimbursed by State for taxes lost because <strong>of</strong> these exemptions.<br />
(2) Excludes Direct and Overlapping Rates. See Table 7 for Direct and Overlapping Rates.<br />
Source: Los Angeles County Auditor-Controller<br />
157
CITY OF SANTA MONICA, CALIFORNIA<br />
Direct and Overlapping Property Tax Rates*<br />
Last Ten Fiscal Years<br />
TABLE 7<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
School Districts<br />
<strong>City</strong> <strong>Santa</strong> <strong>Monica</strong>-Malibu <strong>Santa</strong> <strong>Monica</strong> Metropolitan<br />
Fiscal General Unified School Community Water<br />
year Obligation Debt District College General District Total<br />
2011-12 $ 0.01 $ 0.05 $ 0.08 $ 1.00 $ — $ 1.14<br />
2010-11 0.01 0.05 0.08 1.00 — 1.14<br />
2009-10 0.01 0.05 0.05 1.00 — 1.11<br />
2008-09 0.01 0.04 0.05 1.00 0.01 1.11<br />
2007-08 0.01 0.05 0.05 1.00 0.01 1.12<br />
2006-07 0.01 0.03 0.05 1.00 0.01 1.10<br />
2005-06 0.01 0.02 0.05 1.00 0.01 1.09<br />
2004-05 0.01 0.03 0.03 1.00 0.01 1.08<br />
2003-04 0.02 0.03 0.02 1.00 0.01 1.08<br />
2002-03 0.02 0.03 0.03 1.00 0.01 1.09<br />
* Property tax rate is per $100 <strong>of</strong> assessed value. Assessed value equals full market value as defined by law. Since 1978-79, the maximum allowable rate is<br />
levied by the County, property taxes are collected by the County, and the County allocates the <strong>City</strong>'s share in accordance with distribution formulas established<br />
by law. Proposition 13 allows jurisdictions to impose rates over the $1.00 base rate only for bonded debt approved by the voters prior to 1978. However, in<br />
1986, the State Constitution was amended to allow rates over the $1.00 base rate for voter approved general obligation bonds.<br />
<strong>City</strong> General Fund is allocated approximately $.15 <strong>of</strong> each $1.00 <strong>of</strong> the County General Fund amount. Redevelopment areas receive approximately $.85 (net <strong>of</strong><br />
pass through payments <strong>of</strong> each $1.00 <strong>of</strong> the County General Fund portion.)<br />
Source: Los Angeles County Auditor-Controller<br />
158
CITY OF SANTA MONICA, CALIFORNIA<br />
Principal Property Taxpayers<br />
Current Fiscal Year and Nine Years Ago<br />
TABLE 8<br />
Taxable<br />
2011-12<br />
Percentage<br />
<strong>of</strong> total <strong>City</strong><br />
taxable<br />
Taxable<br />
assessed<br />
assessed<br />
assessed<br />
Taxpayer value Rank value<br />
value Rank<br />
2002-03<br />
Percentage<br />
<strong>of</strong> total <strong>City</strong><br />
taxable<br />
assessed<br />
value<br />
California Colorado Center LLC $ 472,844,007 1 1.99 % $ —<br />
— %<br />
Water Garden Realty Holding LLC 458,264,878 2 1.93 397,669,519 1 2.72<br />
Douglas Emmett 1998 LLC 303,472,566 3 1.28 337,530,385 3 2.31<br />
Macerich <strong>Santa</strong> <strong>Monica</strong> Place 268,175,478 4 1.13 147,410,779 6 1.01<br />
SC Enterprises SMBP LLC 265,000,000 5 1.12 205,999,000 5 1.41<br />
CREP 2700 Holdings LLC 227,973,476 6 0.96 — —<br />
Ocean Avenue LLC 146,369,459 7 0.62 108,604,788 8 0.74<br />
LUI2 LA Lantana LP 140,909,172 8 0.59 — —<br />
New <strong>Santa</strong> <strong>Monica</strong> Beach Hotel 137,172,110 9 0.58 — —<br />
Rand Corporation 131,855,052 10 0.56 — —<br />
TST Colorado LLC — — 359,978,400 2 2.47<br />
Sisters <strong>of</strong> Charity Leavenworth Health — — 273,913,013 4 1.88<br />
SHCI <strong>Santa</strong> <strong>Monica</strong> Beach Hotel — — 130,605,256 7 0.89<br />
SPK Arboretum LLC — — 102,235,620 9 0.70<br />
Comonwealth Atlantic-Arboretum — — 84,252,000 10 0.58<br />
Total principal property taxpayers<br />
assessed value $ 2,552,036,198<br />
10.76 $ 2,148,198,760<br />
14.71<br />
Total <strong>City</strong> assessed value $ 23,741,414,643<br />
100.00 % $ 14,598,351,462<br />
100.00 %<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department; Hdl, Coren and Cone<br />
159
CITY OF SANTA MONICA, CALIFORNIA<br />
Property Tax Levies and Collections<br />
Last Ten Fiscal Years<br />
TABLE 9<br />
Fiscal year<br />
Total secured tax<br />
levy<br />
Current secured<br />
tax collections<br />
Percent <strong>of</strong> levy<br />
collected<br />
Delinquent secured<br />
tax collections (1)<br />
Total tax<br />
collections<br />
Total secured tax<br />
collections as<br />
percent <strong>of</strong> total tax<br />
levy<br />
Outstanding<br />
delinquent taxes<br />
(2)<br />
Outstanding<br />
delinquent taxes as<br />
percent <strong>of</strong> total<br />
secured tax levy<br />
2011-12 $ 23,211,627 $ 22,641,826 97.5 % $ 645,927 $ 23,287,753 100.3 % $ 661,315<br />
2.8 %<br />
2010-11 22,293,648 21,759,685 97.6 937,340 22,697,025 101.8 669,232 3.0<br />
2009-10 22,585,685 21,724,105 96.2 1,262,484 22,986,589 101.8 690,928 3.1<br />
2008-09 22,439,401 21,195,066 94.5 1,237,357 22,432,423 100.0 662,983 3.0<br />
2007-08 20,654,045 19,309,774 93.5 528,207 19,837,981 96.0 442,105 2.1<br />
2006-07 19,352,421 18,418,938 95.2 376,559 18,795,497 97.1 271,740 1.4<br />
2005-06 18,053,398 17,445,098 96.6 407,334 17,852,432 98.9 248,199 1.4<br />
2004-05 16,834,761 16,407,407 97.5 416,502 16,823,909 99.9 292,723 1.7<br />
2003-04 16,674,558 16,235,740 97.4 486,656 16,722,396 100.3 438,818 2.6<br />
2002-03 15,315,149 14,891,114 97.2 422,693 15,313,807 100.0 420,562 2.7<br />
(1) Exclusive <strong>of</strong> penalties and collections related to tax overrides for debt service on general obligation bonds..<br />
(2)<br />
Reflects <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> proportionate share <strong>of</strong> county-wide outstanding delinquencies. <strong>City</strong> specific statistics are not available from the County <strong>of</strong> Los Angeles.<br />
Source: County <strong>of</strong> Los Angeles<br />
160
CITY OF SANTA MONICA, CALIFORNIA<br />
Taxable Transactions by Type <strong>of</strong> Business (1)<br />
Last Ten Calendar Years<br />
(In Thousands)<br />
TABLE 10<br />
Calendar Year<br />
Business 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002<br />
Apparel stores $ 375,919 296,127 272,133 325,835 327,768 336,229 337,230 296,109 264,997 254,782<br />
General merchandise 110,152 65,804 26,308 48,371 60,131 65,731 72,935 81,761 81,097 83,895<br />
Food stores 83,956 80,927 85,034 87,818 85,551 81,546 76,460 67,069 68,184 65,248<br />
Eating & drinking places 492,585 448,986 425,412 452,371 459,782 426,220 407,701 372,961 351,193 330,514<br />
Building materials 92,326 87,510 90,123 119,383 132,959 125,567 109,936 103,979 95,144 90,183<br />
Auto dealers & auto suppliers 632,558 605,107 607,195 678,604 724,018 714,543 706,009 669,196 668,174 565,634<br />
Service stations 135,062 111,322 109,105 146,172 137,758 131,785 101,255 95,862 71,960 69,669<br />
Other retail stores 648,810 577,164 527,997 640,299 682,816 656,917 648,473 605,594 537,350 468,745<br />
Retail stores total 2,571,368 2,272,947 2,143,307 2,498,853 2,610,783 2,538,538 2,459,999 2,292,531 2,138,099 1,928,670<br />
All other outlets 292,114 285,868 283,257 320,235 331,111 430,207 342,139 310,891 227,700 192,171<br />
Total all outlets $ 2,863,482 2,558,815 2,426,564 2,819,088 2,941,894 2,968,745 2,802,138 2,603,422 2,365,799 2,120,841<br />
Source: Hinderleiter, de Llamas and Associates<br />
(1) Amounts have been revised to reflect prior year adjustments; Amounts do not include allocations from State or County Pools<br />
161
CITY OF SANTA MONICA, CALIFORNIA<br />
Ratio <strong>of</strong> Outstanding Debt by Type<br />
Last Ten Fiscal Years<br />
TABLE 11<br />
Governmental activities<br />
Business-type activities<br />
Fiscal<br />
year<br />
General<br />
obligation<br />
bonds<br />
Tax allocation<br />
bonds*<br />
Lease revenue<br />
bonds<br />
Term loans<br />
payable*<br />
Line <strong>of</strong><br />
Credit*<br />
Wastewater<br />
bonds<br />
Certificates <strong>of</strong><br />
participation<br />
Term loans<br />
payable<br />
Capital leases<br />
Total primary<br />
government<br />
Percentage <strong>of</strong><br />
net assessed<br />
valuation (1)<br />
Per capita<br />
2011-12 $ 11,325,000 $ — $ 87,630,000 $ 400,000 $ — $ 20,250,000 $ — $ 2,308,422 $ — $ 121,913,422<br />
0.49% $ 1,351<br />
2010-11 15,000,000 106,310,000 61,505,000 101,468,020 50,000,000 22,615,000 — 2,565,054 — 359,463,074 1.51% 3,986<br />
2009-10 16,745,000 70,100,000 64,630,000 400,000 23,471,605 24,215,000 — 2,837,400 — 202,399,005 0.84% 2,183<br />
2008-09 18,455,000 72,900,000 67,880,000 400,000 15,485,324 25,760,000 — 3,103,408 — 203,983,732 0.87% 2,205<br />
2007-08 20,140,000 75,570,000 71,900,000 — — 27,260,000 — 3,363,238 — 198,233,238 0.94% 2,168<br />
2006-07 21,800,000 78,115,000 75,770,000 — — 28,715,000 420,000 3,617,046 — 208,437,046 1.06% 2,287<br />
2005-06 23,430,000 81,320,000 78,740,000 — — 29,975,000 820,000 3,864,987 — 218,149,987 1.21% 2,404<br />
2004-05 25,035,000 78,025,000 81,610,000 — — 31,205,000 1,205,000 4,107,207 — 221,187,207 1.34% 2,439<br />
2003-04 26,615,000 79,975,000 44,775,000 — — 32,335,000 1,570,000 4,343,865 — 189,613,865 1.21% 2,097<br />
2002-03 28,170,000 81,840,000 46,235,000 — — 33,340,000 1,920,000 4,625,079 — 196,130,079 1.34% 2,195<br />
Note:<br />
(1) Net assessed property valuations have been used because personal income is not available. See Table 6 for net assessed valuations.<br />
* Redevelopment debt was transferred to the Successor Agency on February 1, 2012.<br />
162
CITY OF SANTA MONICA, CALIFORNIA<br />
Ratios <strong>of</strong> General Bonded Debt<br />
Last Ten Fiscal Years<br />
TABLE 12<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03<br />
General bonded debt outstanding<br />
General obligation bonds $ 11,325,000 15,000,000 16,745,000 18,455,000 20,140,000 21,800,000 23,430,000 25,035,000 26,615,000 28,170,000<br />
Tax allocation bonds* — 106,310,000 70,100,000 72,900,000 75,570,000 78,115,000 81,320,000 78,025,000 79,975,000 81,840,000<br />
Total $ 11,325,000 121,310,000 86,845,000 91,355,000 95,710,000 99,915,000 104,750,000 103,060,000 106,590,000 110,010,000<br />
Assessed value (in thousands) (1) $ 24,644,122 23,882,176 24,096,850 23,488,853 21,122,724 19,705,610 18,098,550 16,546,884 15,711,170 14,598,351<br />
Percentage <strong>of</strong> assessed<br />
Property value 0.05% 0.51% 0.36% 0.39% 0.45% 0.51% 0.58% 0.62% 0.68% 0.75%<br />
Population (2) 90,223 90,174 92,703 92,494 91,439 91,124 90,750 90,678 90,300 89,333<br />
Per capita $ 126<br />
1,345 937 988 1,047 1,096 1,154 1,137 1,180 1,231<br />
(1) Table 6 for Assessed Value Data<br />
(2) Table 24 for Population Data<br />
* Redevelopment debt was transferred to the Successor Agency on February 1, 2012.<br />
163
CITY OF SANTA MONICA, CALIFORNIA<br />
Direct and Overlapping Governmental Activities Debt<br />
As <strong>of</strong> June 30, 2012<br />
TABLE 13<br />
Estimated Estimated share<br />
Debt Percentage <strong>of</strong> Overlapping<br />
Outstanding Applicable (1) Debt<br />
Overlapping debt:<br />
Los Angeles County General Fund Obligations $ 1,474,122,758<br />
1.833% $ 27,020,670<br />
Los Angeles County Superintendent <strong>of</strong> Schools Certificates <strong>of</strong> Participation 11,269,678 1.833% 206,573<br />
Los Angeles County Flood Control District 37,195,000 1.862% 692,571<br />
Metropolitan Water District 196,545,000 0.943% 1,853,419<br />
<strong>Santa</strong> <strong>Monica</strong> Community College District 313,377,886 56.724% 177,760,472<br />
Los Angeles Unified School District 11,279,905,000 0.0002% 22,560<br />
<strong>Santa</strong> <strong>Monica</strong>-Malibu Unified School District 221,815,034 56.803% 125,997,594<br />
Los Angeles County Regional Park and Open Space Assessment District 170,725,000 1.833% 3,129,389<br />
<strong>Santa</strong> <strong>Monica</strong> Community College District Certificates <strong>of</strong> Participation 21,115,000 56.724% 11,977,273<br />
Los Angeles Unified School District Certificates <strong>of</strong> Participation 419,851,037 0.0002% 840<br />
Los Angeles Community College District 3,504,910,000 0.011% 385,540<br />
<strong>Santa</strong> <strong>Monica</strong>-Malibu Unified School District Certificates <strong>of</strong> Participation 14,546,501 56.803% 8,262,849<br />
Subtotal, overlapping debt 357,309,750<br />
<strong>City</strong> direct governmental debt<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Parking Authority Lease Revenue Bonds (2002 Refunding) 4,985,000<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> General Obligation Bonds Main Library Improvements (2012) 11,325,000<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Public Safety Lease Revenue Bonds (2009) 7,940,000<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Public Safety Lease Revenue Bonds (2012) 8,100,000<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Civic Parking Structure Lease Revenue Bonds (2004) 34,540,000<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Parking Structure 6 Lease Revenue Bonds (2011) 32,065,000<br />
State Dept <strong>of</strong> Housing and Community Development 400,000<br />
Subtotal, direct debt 99,355,000<br />
Total direct and overlapping governmental debt (2) $ 456,664,750<br />
(1) Percentage <strong>of</strong> overlapping agency's assessed valuation located within boundaries <strong>of</strong> the city.<br />
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax<br />
allocation bond and non-bonded capital lease obligations.<br />
Source: California Municipal Statistics, Inc.<br />
164
CITY OF SANTA MONICA, CALIFORNIA<br />
Computation <strong>of</strong> Legal Debt Margin<br />
Last Ten Fiscal Years<br />
TABLE 14<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03<br />
Total net debt applicable to limit $ 91,804,168 151,252,964 133,493,200 141,302,416 148,656,800 156,937,600 165,988,287 165,375,304 138,094,965 143,524,025<br />
Debt limit 2,594,319,674 2,531,305,352 2,545,129,908 2,449,428,970 2,214,502,370 2,068,018,972 1,877,324,663 1,713,217,857 1,627,881,798 1,513,649,468<br />
Legal debt margin 2,502,515,506 2,380,052,388 2,411,636,708 2,308,126,554 2,065,845,570 1,911,081,372 1,711,336,376 1,547,842,553 1,489,786,833 1,370,125,443<br />
Total net debt applicable to the limit<br />
as a percentage <strong>of</strong> debt limit 3.54% 5.98% 5.25% 5.77% 6.71% 7.59% 8.84% 9.65% 8.48% 9.48%<br />
Net assessed value 24,644,121,648<br />
Add: exempt property 1,299,075,091<br />
Total gross assessed value $ 25,943,196,739<br />
Debt limit - 10% <strong>of</strong> total assessed value (1) 2,594,319,674<br />
Amount <strong>of</strong> debt applicable to debt limit:<br />
Total bonded debt 98,955,000<br />
Less:<br />
Assets in debt service funds<br />
available for payment <strong>of</strong> bonds 7,150,832<br />
Total amount <strong>of</strong> debt applicable to debt limit 91,804,168<br />
Legal debt margin $ 2,502,515,506<br />
(1) Per Section 607 <strong>of</strong> the <strong>City</strong> Charter, bonded indebtedness <strong>of</strong> the <strong>City</strong> may not exceed 10% <strong>of</strong> total assessed valuation<br />
<strong>of</strong> property within the <strong>City</strong>, exclusive <strong>of</strong> any indebtedness incurred for the purpose <strong>of</strong> water supply or sewers or storm drains.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
165
CITY OF SANTA MONICA, CALIFORNIA<br />
Wastewater Enterprise Revenue Bonds Coverage<br />
TABLE 15<br />
Fiscal<br />
year<br />
2011-12<br />
2010-11<br />
2009-10<br />
2008-09<br />
2007-08<br />
2006-07<br />
2005-06<br />
2004-05<br />
2003-04<br />
2002-03<br />
Direct Net revenue<br />
Gross operating available for<br />
Debt service requirement<br />
revenues (1) expense (2) debt service Principal Interest Total Coverage (3)<br />
$ 21,307,472 $ 10,993,468 $ 10,314,004 $ 1,650,000 $ 846,141 $ 2,496,141 4.13<br />
19,117,006 9,547,632 9,569,374 1,600,000 972,738 2,572,738 3.72<br />
17,036,277 9,449,739 7,586,538 1,545,000 1,026,812 2,571,812 2.95<br />
15,978,030 8,305,013 7,673,017 1,500,000 1,071,812 2,571,812 2.98<br />
17,359,852 12,711,059 4,648,793 1,455,000 1,115,463 2,570,463 1.81<br />
16,401,212 12,613,626 3,787,586 1,260,000 1,311,589 2,571,589 1.47<br />
14,437,130 10,463,034 3,974,096 1,190,000 1,419,825 2,609,825 1.52<br />
14,233,699 9,818,457 4,415,242 1,130,000 1,470,675 2,600,675 1.70<br />
14,191,264 9,349,681 4,841,583 1,005,000 1,591,275 2,596,275 1.86<br />
14,593,471 10,818,410 3,775,061 890,000 1,698,075 2,588,075 1.46<br />
CUSIP 802475<br />
(1)<br />
Gross revenues included operating revenues plus non-operating revenues and net interfund transfers through FY 2007-08. Starting in<br />
FY 2008-09 gross revenues included operating revenues plus operating transfers specifically related to wastewater operations.<br />
(2)<br />
(3)<br />
Excludes depreciation expense, write-<strong>of</strong>f <strong>of</strong> disposed assets, and capital-related expenditures.<br />
Bond covenant requires a coverage ratio <strong>of</strong> 1.20<br />
The Hyperion Project, Wastewater Enterprise Revenue Bonds were issued November 26, 1991 at an interest rate <strong>of</strong> 6.25% with ratings <strong>of</strong><br />
A1 from Moody's Investors Service, Inc. and A+ from Standard and Poor's Corporation. Debt service began in FY 1992-93. These bonds<br />
were refunded by the issuance <strong>of</strong> insured Wastewater Enterprise Revenue Bonds, 1993 Refunding Series on December 22, 1993 with an<br />
interest rate <strong>of</strong> 5.3084% with ratings <strong>of</strong> Aaa and AAA by Moody's Investors Services, Inc. and Standard and Poor's Corporation,<br />
respectively. The Refunding Bonds were insured by AMBAC Indemnity.<br />
On October 13, 2005 the <strong>City</strong> issued $20,305,000 <strong>of</strong> Wastewater Enterprise Refunding Revenue Bonds bearing interest from 3.00% to<br />
5.00% to defease $21,535,000 <strong>of</strong> the outstanding 1993 Wastewater Enterprise Revenue Bonds, 1993 Refunding Series with ratings from<br />
Moody's Investor Services, Inc. <strong>of</strong> A1, Standard and Poor's Corporation <strong>of</strong> AA and Fitch Ratings <strong>of</strong> AAA. The Refunding Bonds are<br />
insured by Financial Guaranty Insurance Company.<br />
On April 16, 2010 Moody's upgraded the underlying rating on the Refunding bond to Aa2 and on November 17, 2008 Standard and Poor's<br />
Corporation upgraded the underlying rating to AAA.<br />
On May 30, 2012 the <strong>City</strong> issued $8,955,000 Wastewater Refunding Revenue Bonds Series 2012A at interest from 2.00% to 4.00% to<br />
defease $9,670,000 <strong>of</strong> the outstanding 1993 Wastewater Enterprise Revenue Bonds. Standard and Poor's Corporation rated AAA on the<br />
2012A Refunding bond.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
166
CITY OF SANTA MONICA, CALIFORNIA<br />
Redevelopment Agency Earthquake Recovery Project<br />
Tax Allocation Bonds Coverage<br />
TABLE 16<br />
Direct Net revenue<br />
Fiscal Gross operating available for<br />
Debt service requirement<br />
year revenues expenses debt service Principal Interest Total Coverage*<br />
2011-12 $ 60,971,563 $ 3,997,693 $ 56,973,870 $ 1,900,000 $ 3,619,465 $ 5,519,465 10.32<br />
2010-11 67,672,237 4,909,242 62,762,995 1,795,000 2,601,431 4,396,431 14.28<br />
2009-10 69,027,716 3,859,298 65,168,418 1,705,000 2,697,611 4,402,611 14.80<br />
2008-09 69,431,409 3,756,953 65,674,456 1,615,000 2,788,981 4,403,981 14.91<br />
2007-08 63,582,749 3,395,418 60,187,331 1,530,000 2,875,469 4,405,469 13.66<br />
2006-07 58,267,909 2,670,168 55,597,741 2,225,000 1,998,213 4,223,213 13.16<br />
2005-06 49,668,747 1,833,675 47,835,072 1,095,000 3,579,048 4,674,048 10.23<br />
2004-05 36,763,429 1,109,270 35,654,159 1,045,000 3,627,198 4,672,198 7.63<br />
2003-04 31,918,204 1,033,362 30,884,842 1,000,000 3,673,210 4,673,210 6.61<br />
2002-03 33,522,316 756,744 32,765,572 960,000 3,717,310 4,677,310 7.01<br />
CUSIP 802447<br />
* Coverage ratio included as part <strong>of</strong> bond continuing disclosure requirement.<br />
On December 1, 1999, the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> issued Earthquake Recovery Redevelopment Project Area<br />
Tax Allocation Bonds at various interest rates <strong>of</strong> 4.58% to 7.50% which were initially given underlying ratings <strong>of</strong> A by Fitch, Baa1 by<br />
Moody's, and A- by Standard and Poor's, but all rated the issue AAA with insurance.<br />
On April 27, 2006, the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> issued $64,720,000 <strong>of</strong> Earthquake Redevelopment Project<br />
refunding bonds, $49,945,000, Series A, and $14,775,000 Taxable Series B, bearing interest from 4.00% to 5.5% to defease the 1999<br />
Earthquake Redevelopment Project Bonds which were initially given underlying ratings <strong>of</strong> A+ by Fitch, A3 by Moody's and A by Standard<br />
and Poor's, but all rated AAA with insurance. The last ratings changes occurred on April 30, 2010 when the rating was changed to AA- by<br />
Fitch, on April 16, 2010 when the rating was changed to A2 and on March 24, 2010 the rating was changed to AA by Standard and Poor's.<br />
The bonds are insured by FGIC Insurance Co.<br />
On June 7, 2011 the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> issued $41,050,000 <strong>of</strong> Earthquake Redevelopment Project Tax<br />
Allocation Bonds at various interest rates <strong>of</strong> 5.00% to 5.875% which were initially given underlying ratings <strong>of</strong> AA by Standard & Poor's<br />
and AA- by Fitch.<br />
On February 1, 2012 the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> was dissolved and its assets and liabilities were transferred to<br />
the <strong>Santa</strong> <strong>Monica</strong> Redevelopment Successor Agency (Successor). The Successor is allocated tax revenues sufficient to pay its enforceable<br />
obligations. The total revenues are lower in 11-12 due to the allocation period only consisting <strong>of</strong> 10 months instead <strong>of</strong> 12.<br />
On June 14, 2012, Moody’s downgraded all California Redevelopment Tax Allocation Bonds to Ba1 which included the Redevelopment<br />
Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Earthquake Project Redevelopment Bonds Series 2011 and 2006.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
167
CITY OF SANTA MONICA, CALIFORNIA<br />
Redevelopment Agency Ocean Park Project<br />
Tax Allocation Refunding Bonds Coverage<br />
TABLE 17<br />
Direct Net revenue<br />
Fiscal Gross operating available for<br />
Debt service requirement<br />
year revenues expense debt service Principal Interest Total Coverage*<br />
2011-12 $ 3,233,747 $ 267,769 $ 2,965,978 $ 1,195,000 $ 525,495 $ 1,720,495 1.72<br />
2010-11 3,937,598 407,330 3,530,268 1,145,000 578,170 1,723,170 2.05<br />
2009-10 4,165,372 336,970 3,828,402 1,095,000 626,629 1,721,629 2.22<br />
2008-09 4,227,693 274,561 3,953,132 1,055,000 670,998 1,725,998 2.29<br />
2007-08 4,086,779 269,907 3,816,872 1,015,000 711,129 1,726,129 2.21<br />
2006-07 3,958,631 229,017 3,729,614 980,000 748,535 1,728,535 2.16<br />
2005-06 3,332,493 256,927 3,075,566 945,000 784,628 1,729,628 1.78<br />
2004-05 3,034,112 218,253 2,815,859 905,000 820,448 1,725,448 1.63<br />
2003-04 2,896,936 182,117 2,714,819 865,000 859,091 1,724,091 1.57<br />
2002-03 2,737,356 178,996 2,558,360 — 586,423 586,423 4.36<br />
CUSIP 802447D<br />
* Coverage ratio included as part <strong>of</strong> bond continuing disclosure requirement.<br />
In October <strong>of</strong> 1984, the Redevelopment Agency issued Tax Allocation Bonds in the principal sum <strong>of</strong> $5,700,000 at an interest rate <strong>of</strong><br />
10.89%. Such obligations were serial in nature and matured annually with the final payment <strong>of</strong> $686,650 due in 2007. The bond<br />
proceeds were used to acquire land, construction <strong>of</strong> a public park, and for low and moderate-income housing.<br />
In April <strong>of</strong> 1988, the Redevelopment Agency issued Refunding and Refinancing Bonds in the principal sum <strong>of</strong> $8,775,000 at an interest<br />
rate <strong>of</strong> 5.2 - 8.25%. Such obligations were serial in nature and matured annually with the final payment <strong>of</strong> $754,906 due in 2019. The<br />
bond proceeds were used to defease the 1984 Ocean Park Bonds and to pay a portion <strong>of</strong> various Promissory Notes due to the <strong>City</strong> <strong>of</strong> <strong>Santa</strong><br />
<strong>Monica</strong>.<br />
In November <strong>of</strong> 1992, the Redevelopment Agency issued Ocean Park Redevelopment Project Tax Allocation Refunding Bonds, Series<br />
1992, in the principal sum <strong>of</strong> $11,325,000 at an interest rate <strong>of</strong> 6.89%. Such obligations are serial in nature and mature annually with the<br />
final payment <strong>of</strong> $931,500 due in 2019. The bond proceeds were issued to defease the 1988 Refunding and Refinancing Bonds and to pay<br />
a portion <strong>of</strong> various Promissory Notes due to the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. Debt service payments began in fiscal year 1992-93.<br />
On May 2, 2002, the Agency issued $19,315,000 <strong>of</strong> Ocean Park refunding and new money bonds bearing interest at 5.03% to defease the<br />
outstanding 1992 Ocean Park Project Bonds and to provide funds for new low-moderate-income projects. The bonds were rated BBB+<br />
by Fitch, Baa1 by Moody's and A by Standard and Poor's. Debt service payments on the 2002 bonds began in fiscal year 2002-03.<br />
Coverage ratios before FY 2002-03 above reflect the 1992 bonds.<br />
The last ratings changes occurred in March/April 2010 when the rating was changed to A by Fitch, to A3 by Moody's and to A+ by<br />
Standard and Poor's.<br />
On February 1, 2012 the Redevelopment Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> was dissolved and its assets and liabilities were transferred<br />
to the <strong>Santa</strong> <strong>Monica</strong> Redevelopment Successor Agency (Successor). The Successor is allocated tax revenues sufficient to pay its<br />
enforceable obligations. The total revenues are lower in 11-12 due to the allocation period only consisting <strong>of</strong> 10 months instead <strong>of</strong> 12.<br />
On June 14, 2012, Moody’s downgraded all California Redevelopment Tax Allocation Bonds to Ba1 which included the Redevelopment<br />
Agency <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Ocean Park Project Redevelopment Bonds Series 2002.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
168
CITY OF SANTA MONICA, CALIFORNIA<br />
Parking Authority <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Lease Revenue Refunding Bonds<br />
Schedule <strong>of</strong> Debt Service Payments Made<br />
TABLE 18<br />
Fiscal<br />
Debt service<br />
year Principal Interest Total<br />
2011-12 $ 880,000<br />
233,836 1,113,836<br />
2010-11 845,000 267,807 1,112,807<br />
2009-10 810,000 299,366 1,109,366<br />
2008-09 780,000 328,399 1,108,399<br />
2007-08 755,000 355,456 1,110,456<br />
2006-07 725,000 381,356 1,106,356<br />
2005-06 700,000 406,294 1,106,294<br />
2004-05 — 418,544 418,544<br />
2003-04 — 418,544 418,544<br />
2002-03 — 279,029 279,029<br />
CUSIP 802419A<br />
The Parking Authority <strong>of</strong> the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Lease Revenue Refunding bonds<br />
were issued on May 1, 2002 at interest rates ranging from 3.5% to 4.65% with ratings <strong>of</strong><br />
AAA from Fitch, Aaa by Moody's Investor Services, Inc. and AAA by Standard and<br />
Poor's Corporation. The last ratings changes occurred on March 12, 2008 when the<br />
rating changed to AA+ by Fitch, on June 19, 2008 when the rating was changed to Aa2<br />
by Moody's and on June 5, 2008 when the rating was changed to AA+ by Standard and<br />
Poor's. The refunding bonds are insured by Ambac Assurance Corp.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
169
CITY OF SANTA MONICA, CALIFORNIA<br />
<strong>Santa</strong> <strong>Monica</strong> Public Financing Authority<br />
Lease Revenue Bonds, Series 2011A<br />
Parking Structure 6 Project<br />
Schedule <strong>of</strong> Debt Service Payments Made<br />
TABLE 19<br />
Fiscal<br />
Debt service<br />
year Principal Interest Total<br />
2011-12 $ —<br />
785,921 785,921<br />
2010-11 — — —<br />
CUSIP 802437<br />
The <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Bonds Series 2011A<br />
(Parking Structure 6 Project) were issued on November 16, 2011 at interest rates ranging<br />
from 4.00% to 5.00% to provide funds for construction <strong>of</strong> a public parking garage or<br />
other eligible public improvements. The bonds were rated AA+ from Fitch, Aa1 by<br />
Moody's Investor Services, Inc. and AA+ by Standard and Poor's Corporation. Debt<br />
service payments began in June 2012. On December 17, 2012, Moody's changed the<br />
rating to Aa2.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
170
CITY OF SANTA MONICA, CALIFORNIA<br />
<strong>Santa</strong> <strong>Monica</strong> Public Financing Authority<br />
Lease Revenue Refunding Bonds, Series 2011B<br />
Public Safety Facility Project<br />
Schedule <strong>of</strong> Debt Service Payments Made<br />
TABLE 20<br />
Fiscal<br />
Debt service<br />
year Principal Interest Total<br />
2011-12 $ 1,370,000<br />
419,433 1,789,433<br />
2010-11 810,000 526,978 1,336,978<br />
2009-10 780,000 558,778 1,338,778<br />
2008-09 755,000 588,534 1,343,534<br />
2007-08 725,000 615,378 1,340,378<br />
2006-07 705,000 638,641 1,343,641<br />
2005-06 685,000 659,491 1,344,491<br />
2004-05 665,000 679,741 1,344,741<br />
2003-04 650,000 696,216 1,346,216<br />
2002-03 — 702,716 702,716<br />
CUSIP 802437<br />
The <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Bonds Series 2002A<br />
(Public Safety Facility Project) were issued on January 1, 2002 at interest rates ranging<br />
from 2.00% to 4.75% with ratings <strong>of</strong> AA+ from Fitch, Aa1 by Moody's Investor Services,<br />
Inc. and AA+ by Standard and Poor's Corporation. The last ratings change occurred on<br />
January 14, 2005 when the rating was reaffirmed at Aa1 by Moody's and on November<br />
23, 2004 when the ratings was reaffirmed at AA+ by Standard and Poor's.<br />
On November 16, 2011, the <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue<br />
Refunding Bonds Series 2011B (Public Safety Facility Project) were issued $8,625,000<br />
bearing interest ranging from 2.00% to 4.00% to defease the outstanding <strong>Santa</strong> <strong>Monica</strong><br />
Financing Authority Lease Revenue Bonds, series 2002A Public Safety Facility Project<br />
for $11,535,000. The bonds were rated AA+ by Fitch, Aa1 by Moody's Investor Services,<br />
Inc. and AA+ by Standard and Poor's Corporation. Debt service payments began in June<br />
2012. On December 17, 2012, Moody's changed the rating to Aa2.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
171
CITY OF SANTA MONICA, CALIFORNIA<br />
<strong>Santa</strong> <strong>Monica</strong> Public Financing Authority<br />
Lease Revenue Bonds, Series 2004<br />
Civic Center Parking Project<br />
Schedule <strong>of</strong> Debt Service Payments Made<br />
TABLE 21<br />
Fiscal<br />
Debt service<br />
year Principal Interest Total<br />
2011-12 $ 960,000<br />
1,571,638 2,531,638<br />
2010-11 920,000 1,609,138 2,529,138<br />
2009-10 875,000 1,651,713 2,526,713<br />
2008-09 835,000 1,694,463 2,529,463<br />
2007-08 800,000 1,733,338 2,533,338<br />
2006-07 — 1,751,338 1,751,338<br />
2005-06 — 1,834,040 1,834,040<br />
CUSIP 802437B<br />
The <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Bonds Series 2004 (Civic<br />
Center Parking Project) were issued on December 1, 2004 at interest rates ranging from<br />
3.35% to 5.00% with ratings <strong>of</strong> AAA from Fitch, Aaa by Moody's Investor Services, Inc.<br />
and AAA by Standard and Poor's Corporation. The bonds are currently rated AA+ by<br />
Fitch, Aa1 by Moody's and AA+ by Standard and Poor's. The bonds are insured by XL<br />
Capital Assurance. On December 17, 2012, Moody's changed the rating to Aa2.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
172
CITY OF SANTA MONICA, CALIFORNIA<br />
<strong>Santa</strong> <strong>Monica</strong> Public Financing Authority<br />
Lease Revenue Bonds, Refunding Bonds, Series 2009<br />
Public Safety Facility Project<br />
Schedule <strong>of</strong> Debt Service Payments Made<br />
TABLE 22<br />
Fiscal<br />
Debt service<br />
year Principal Interest Total<br />
2011-12 $ 665,000<br />
293,400 958,400<br />
2010-11 550,000 318,510 868,510<br />
2009-10 — — —<br />
2008-09 530,000 552,053 1,082,053<br />
2007-08 510,000 575,004 1,085,004<br />
2006-07 490,000 596,441 1,086,441<br />
2005-06 470,000 616,416 1,086,416<br />
2004-05 445,000 641,448 1,086,448<br />
2003-04 420,000 665,073 1,085,073<br />
2002-03 395,000 687,291 1,082,291<br />
CUSIP 802437C<br />
<strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Bonds, Series 1999, were<br />
issued on September 15, 1999, at various interest rates <strong>of</strong> 4.25% to 5.625% and were<br />
rated AA by Fitch, Aa2 by Moody's, and AA+ by Standard and Poor's.<br />
The <strong>Santa</strong> <strong>Monica</strong> Public Financing Authority Lease Revenue Bonds Series 2009<br />
(Public Safety Facility Project) were issued on December 16, 2009 at interest rates<br />
ranging from 2.00% to 5.00% with ratings <strong>of</strong> AA+ from Fitch, Aa1 by Moody's Investor<br />
Services, Inc. and AA+ by Standard and Poor's Corporation which is their current rating.<br />
Debt service payments begin on July 1, 2010. On December 17, 2012, Moody's changed<br />
the rating to Aa2.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
173
CITY OF SANTA MONICA, CALIFORNIA<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
General Obligation Bonds, Series 2012<br />
Library Improvement Project<br />
Schedule <strong>of</strong> Debt Service Payments Made<br />
TABLE 23<br />
Fiscal<br />
Debt service<br />
year Principal Interest Total<br />
2011-12 $ 1,250,000<br />
905,469 2,155,469<br />
2010-11 1,250,000 653,906 1,903,906<br />
2009-10 1,250,000 706,250 1,956,250<br />
2008-09 1,250,000 755,625 2,005,625<br />
2007-08 1,250,000 792,500 2,042,500<br />
2006-07 1,250,000 825,000 2,075,000<br />
2005-06 1,250,000 851,250 2,101,250<br />
2004-05 1,250,000 876,250 2,126,250<br />
2003-04 1,250,000 903,250 2,153,250<br />
2002-03 — 380,729 380,729<br />
CUSIP 802377<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> General Obligation Bonds Series 2002 (Library<br />
Improvements Project) were issued on August 1, 2002 at interest rates ranging from<br />
2.0% to 4.6% with ratings <strong>of</strong> AAA from Fitch, Aaa by Moody's Investor Services, Inc.<br />
and AAA by Standard and Poor's Corporation which is also their current rating.<br />
On May 30, 2012, the Agency issued $11,325,000 <strong>of</strong> General Obligation Refunding<br />
Bonds, series 2012 (Library Improvement Project) bearing interest from 0.2% to 4.00%<br />
to defease the outstanding 2002 Library Improvement Project Bonds and to construct,<br />
improve and remodel the <strong>City</strong>'s Main and branch libraries and related facilities. The<br />
bonds were rated AAA by Fitch, Aaa by Moody's and AAA by Standard and Poor's.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Finance Department<br />
174
CITY OF SANTA MONICA, CALIFORNIA<br />
Demographic and Economic Statistics<br />
Last Ten Calendar Years<br />
TABLE 24<br />
Calendar<br />
year Population (1)<br />
Personal income (2)<br />
Per capita<br />
(millions) personal income (3)<br />
Unemployment<br />
rate (4)<br />
2012 90,223 * * 8.4 %<br />
2011 90,174 $ 561,142 $ 43,688 10.5<br />
2010 92,703 565,365 42,784 10.3<br />
2009 92,494 551,271 42,818 9.5<br />
2008 91,439 552,450 42,916 5.5<br />
2007 91,124 539,163 41,875 4.0<br />
2006 90,750 505,197 39,011 4.2<br />
2005 90,678 477,101 36,917 4.8<br />
2004 90,410 453,902 35,188 5.9<br />
2003 89,339 427,041 33,318 4.6<br />
* No data is available for 2012 as <strong>of</strong> publication date <strong>of</strong> CAFR<br />
Note:<br />
Source:<br />
Data shown is the Metropolitan Statistical Area <strong>of</strong> Los Angeles-Long Beach-<strong>Santa</strong> Ana, CA.<br />
Data by <strong>City</strong> is not available.<br />
(1) California Department <strong>of</strong> Finance<br />
(2) and (3) Bureau <strong>of</strong> Economic Analysis<br />
(4) State <strong>of</strong> California, Employment Development Department, Labor Market<br />
Information Division<br />
175
CITY OF SANTA MONICA, CALIFORNIA<br />
Principal Employers<br />
Current Year and Nine Years Ago<br />
TABLE 25<br />
Employers<br />
Number <strong>of</strong><br />
employees<br />
2011-12 2002-03<br />
Percentage <strong>of</strong><br />
Percentage <strong>of</strong><br />
total <strong>City</strong> Number <strong>of</strong> total <strong>City</strong><br />
Rank employment employees Rank employment<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> 2,521 1 3.17 % 1,938 1 2.70 %<br />
<strong>Santa</strong> <strong>Monica</strong>-UCLA Hospital 2,084 2 2.62 994 5 1.39<br />
<strong>Santa</strong> <strong>Monica</strong> College 2,030 3 2.56 1,358 3 1.90<br />
Saint John's Hospital Medical Center 1,601 4 2.02 1,650 2 2.30<br />
<strong>Santa</strong> <strong>Monica</strong>-Malibu Unified School District 1,468 5 1.85 935 6 1.30<br />
RAND Corporation 881 6 1.11 1,337 4 1.87<br />
Universal Music Group 720 7 0.91 — —<br />
Activision Blizzard, Inc. 692 8 0.87 — —<br />
ET Whitehall <strong>Santa</strong> <strong>Monica</strong> Partners LP 589 9 0.74 400 7 0.56<br />
MTV Networks 510 10 0.64 — —<br />
Specialty Laboratories, Inc. — — 329 8 0.46<br />
Sanford Papermate — — 316 9 0.44<br />
Metro-Goldwyn Mayer, Inc. — — 315 10 0.44<br />
Total jobs provided by principal employers 13,096 9,572<br />
Average total jobs in <strong>Santa</strong> <strong>Monica</strong> 79,444 71,660<br />
Principal employers as percent <strong>of</strong> total jobs 16.48% 13.36%<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Economic Development Division, Housing and Economic Development Department<br />
176
CITY OF SANTA MONICA, CALIFORNIA<br />
Full-Time Equivalent <strong>City</strong> Government Employees by Function/Program<br />
Last Nine Fiscal Years<br />
TABLE 26<br />
Function/Program<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04<br />
General government 238.6 221.7 222.7 217.0 191.6 186.1 179.7 164.9 159.4<br />
Public safety<br />
Police<br />
Sworn 209.0 216.0 216.0 216.0 216.0 216.0 216.0 214.0 214.0<br />
Non-sworn 225.4 221.4 227.4 223.4 246.9 243.0 242.0 283.6 239.7<br />
Fire<br />
Sworn 108.0 105.0 109.0 106.0 107.0 106.0 106.0 104.0 105.0<br />
Non-sworn 21.0 22.0 19.0 11.0 27.3 29.6 26.9 27.3 26.3<br />
General services 184.3 261.9 261.3 260.1 268.9 131.7 124.7 117.6 117.8<br />
Cultural and recreation services 231.1 151.9 152.8 148.5 145.4 228.3 218.8 204.9 206.7<br />
Library 106.1 107.1 107.3 107.3 107.1 107.1 105.4 83.9 84.5<br />
Housing and community development 144.4 146.4 148.4 158.4 139.9 145.2 144.1 137.7 134.0<br />
Beach recreation 46.6 46.6 47.6 46.5 24.8 24.3 23.3 23.3 23.3<br />
Cable communications (1) — — — — — — — 10.8 10.5<br />
Water 46.0 47.0 47.0 47.0 52.2 52.2 52.2 52.2 51.2<br />
Resource Recovery & Recycling 84.2 84.2 84.0 84.0 83.1 106.8 106.8 104.0 102.0<br />
Pier 15.8 16.2 16.2 16.2 16.5 25.8 26.8 26.4 27.2<br />
Wastewater 22.2 22.2 22.2 22.2 39.6 39.6 39.7 36.4 36.4<br />
Civic Auditorium 30.3 34.4 34.4 34.4 35.0 35.0 35.0 34.9 34.9<br />
Airport 4.0 12.2 12.2 12.2 12.4 12.3 11.3 11.3 11.3<br />
Cemetery 12.1 12.1 11.1 10.1 10.2 9.5 9.5 9.5 9.5<br />
Big Blue Bus 419.0 413.7 418.7 417.7 441.9 441.9 441.9 437.9 439.0<br />
Vehicle management 28.0 28.0 28.0 28.0 28.8 24.8 24.8 24.8 24.8<br />
Self insurance - workers' compensation 14.0 12.0 12.0 12.0 12.1 12.1 12.1 12.1 11.7<br />
Total all funds 2,190.1 2,182.0 2,197.3 2,178.0 2,206.7 2,177.3 2,147.0 2,121.5 2,069.2<br />
Note: Includes permanent and temporary employees (2,080 hours = 1 full-time position).<br />
(1) Cable communications was merged into the General Fund in fiscal year 2005-2006.<br />
Source: <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Budget<br />
177
CITY OF SANTA MONICA, CALIFORNIA<br />
Operating Indicators by Function/Program<br />
Last Seven Fiscal Years<br />
TABLE 27<br />
Function / program 2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06<br />
General government:<br />
Electronic requests for government information 16,000,000 16,000,000 15,900,000 15,700,000 24,631,223 20,999,363 14,211,319<br />
Hours <strong>of</strong> live public meeting coverage 300 300 300 216 444 332 310<br />
Public safety:<br />
Number <strong>of</strong> emergency response incidents 12,842 12,000 12,005 11,690 11,553 12,551 11,435<br />
Number <strong>of</strong> inspections 9,549 8,549 7,235 8,918 7,053 6,562 7,125<br />
Calls to Police Department for service 105,642 104,097 109,045 107,604 106,497 109,328 105,308<br />
Police reports issued 13,086 13,377 13,995 14,373 14,346 15,334 14,618<br />
Number <strong>of</strong> crimes recorded 8,579 8,581 8,793 9,561 9,604 9,902 9,761<br />
General services:<br />
Number <strong>of</strong> square feet <strong>of</strong> sidewalks repaired 40,000 40,000 33,670 190,000 140,000 127,170 97,522<br />
Number <strong>of</strong> graffiti removals performed 20,000 20,000 19,500 18,481 25,251 22,865 11,780<br />
Feet <strong>of</strong> sewer mains cleaned 2,316,757 1,751,717 1,768,024 1,532,184 783,932 1,179,759 647,841<br />
Cultural and recreation services:<br />
Number <strong>of</strong> cars parked in beach lots 1,500,000 1,500,000 1,798,000 1,450,000 1,640,733 1,635,707 1,572,374<br />
Senior services meals served 56,232 52,440 49,786 42,459 30,917 30,721 28,609<br />
Number <strong>of</strong> low income persons receiving primary health care 4,164 4,453 3,942 4,344 3,650 3,231 3,345<br />
Number <strong>of</strong> youth regularly attending homework assistance programs 466 458 423 558 547 511 534<br />
Library:<br />
Library visitors 1,500,000 1,500,000 1,500,000 1,300,000 1,328,614 1,273,672 938,067<br />
Materials used 2,100,000 2,100,000 2,100,000 1,900,000 1,795,844 1,607,534 1,202,754<br />
Public access computer sessions 300,000 300,000 300,000 290,000 286,077 274,239 145,824<br />
Housing and community development:<br />
Building and Safety plan checks completed 1,500 1,500 1,712 1,798 1,786 1,601 1,975<br />
Building inspections performed 16,000 16,000 13,608 18,103 17,671 17,120 17,765<br />
Transportation Managements plan checks completed 500 500 444 750 531 573 572<br />
Resident parking passes sold 73,000 70,000 60,000 39,000 45,657 42,645 37,028<br />
Number <strong>of</strong> traffic signs installed, replaced, repaired, or removed 5,600 5,600 4,600 5,600 5,633 5,447 10,647<br />
Number <strong>of</strong> parking meters installed, replaced, repaired, or removed 23,000 23,000 49,000 45,257 45,532 42,645 27,182<br />
Water:<br />
Number <strong>of</strong> direct customer accounts 17,902 17,823 17,709 17,356 17,272 17,175 17,171<br />
Water sold to direct customers in whole acre feet 11,996 11,779 12,629 12,879 12,975 13,378 12,775<br />
Airport:<br />
Number <strong>of</strong> tenant aircraft 420 420 420 420 420 420 420<br />
Noise ordinance violations issued 142 148 154 210 244 223 242<br />
Big Blue Bus:<br />
Revenue Miles 5,278,856 5,267,809 5,352,321 5,316,228 5,114,167 5,016,822 5,053,891<br />
Farebox revenue (in millions) 11.86 11.74 11.63 11.51 10.91 9.72 9.80<br />
Total passenger trips (in millions) 22.0 22.0 22.0 22.0 21.0 21.8 22.0<br />
Number <strong>of</strong> customer relations phone calls 73,586 73,447 69,738 71,868 74,131 60,096 60,153<br />
Total number <strong>of</strong> charters 90 349 202 224 554 1,121 1,918<br />
Sources: Various <strong>City</strong> departments.<br />
Note: Statistical Table implemented in FY05-06 per GASB Statement 44. Data from previous fiscal years not shown.<br />
178
CITY OF SANTA MONICA, CALIFORNIA<br />
Capital Asset Statistics by Function/Program<br />
Last Seven Fiscal Years<br />
TABLE 28<br />
Function / program<br />
2011-12 2010-11 2009-10 2008-09 2007-08 2006-07 2005-06<br />
Public safety:<br />
Number <strong>of</strong> police vehicles 239 215 215 244 232 213 174<br />
Number <strong>of</strong> fire vehicles 52 54 57 58 58 60 55<br />
Number <strong>of</strong> fire stations 5 5 5 5 5 5 5<br />
Number <strong>of</strong> police substations including Public Safety Facility 4 4 4 4 4 4 4<br />
General services:<br />
Square footage <strong>of</strong> asphalt paved streets 30,403,785 30,385,115 30,585,115 30,385,115 30,421,841 30,443,441 30,443,441<br />
Square footage <strong>of</strong> concrete paved streets 1,106,834 1,125,504 1,125,504 1,125,504 1,088,778 1,067,178 1,067,178<br />
Square footage <strong>of</strong> sidewalks 8,386,998 8,386,998 8,386,998 8,386,998 8,386,183 8,386,183 8,386,183<br />
Square footage <strong>of</strong> curbs and gutters 1,917,714 1,883,714 1,834,166 1,776,089 1,702,071 1,663,271 1,663,271<br />
Cultural and recreation services:<br />
Number <strong>of</strong> beach parking lots 17 17 17 16 16 16 16<br />
Number <strong>of</strong> parks 27 27 26 26 26 24 23<br />
Number <strong>of</strong> swim centers 2 2 2 2 1 1 1<br />
Library:<br />
Number <strong>of</strong> facilities: main and branches 4 4 4 4 4 4 4<br />
Housing and community development:<br />
Downtown structure visitors 6,659,246 5,958,593 4,078,062 3,928,900 3,768,746 3,817,550 3,791,646<br />
Water:<br />
Number <strong>of</strong> feet <strong>of</strong> water main installed 12,384 0 0 0 22,660 22,660 22,660<br />
Water main system (in miles) 205 205 205 205 205 205 205<br />
Reclaimed water main system (in miles) 4 4 4 4 4 4 4<br />
Wastewater:<br />
<strong>City</strong> sewage flow in million gallons/day 11.4 11.3 10.6 13.3 10.4 12.3 12.8<br />
Sewer main system (in miles) 151 152 152 152 152 152 152<br />
Stormwater:<br />
Daily gallons treated for recycling by SMURRF 122,890 330,000 275,000 275,000 330,000 330,000 330,000<br />
Storm drain system (in miles) 59 58 58 58 58 58 58<br />
Airport:<br />
Aircraft operations (departures and arrivals) 105,026 106,521 112,212 117,250 136,485 136,270 135,765<br />
Big Blue Bus:<br />
Number <strong>of</strong> buses 200 214 199 197 202 202 211<br />
Sources: Various <strong>City</strong> departments.<br />
Note: Statistical Table implemented in FY05-06 per GASB Statement 44. Data from previous fiscal years not shown.<br />
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180
<strong>City</strong> Council Report<br />
To:<br />
Mayor and <strong>City</strong> Council<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
<strong>Agenda</strong> Item: 7-A<br />
From:<br />
Subject:<br />
Marsha Jones Moutrie, <strong>City</strong> Attorney<br />
Ordinance Amending Section 6.36.095 <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal<br />
Code Related to Late Night Vending on Main Street<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council adopt the attached ordinance.<br />
Executive Summary<br />
At its meeting on April 9, 2013, the <strong>City</strong> Council introduced for first reading an ordinance<br />
amending Section 6.36.095 <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal Code Related to Late Night<br />
Vending on Main Street. The ordinance is now presented to the <strong>City</strong> Council for<br />
adoption.<br />
Prepared by:<br />
Approved:<br />
Marsha Jones Moutrie, <strong>City</strong> Attorney<br />
Forwarded to Council:<br />
Marsha Jones Moutrie<br />
<strong>City</strong> Attorney<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
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Council Meeting: April 23, 2013<br />
<strong>Santa</strong> <strong>Monica</strong>, California<br />
ORDINANCE NUMBER ____ (CCS)<br />
(<strong>City</strong> Council Series)<br />
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA<br />
AMENDING SECTION 6.36.095 OF THE SANTA MONICA MUNICIPAL CODE<br />
RELATED TO LATE NIGHT VENDING ON MAIN STREET<br />
WHEREAS, the <strong>City</strong> consists <strong>of</strong> just eight square miles <strong>of</strong> coastal land which is<br />
home to 90,000 residents, the job site <strong>of</strong> 300,000 workers, and a destination for as<br />
many as 500,000 visitors on weekends and holidays; and<br />
WHEREAS, the <strong>City</strong>’s unusual density necessitates special efforts to preserve<br />
the free and safe flow <strong>of</strong> pedestrian, bicycle, and vehicular traffic; and<br />
WHEREAS, congestion is particularly problematic on Main Street, because it<br />
contains very narrow sidewalks, on street parallel parking, and virtually no parkways;<br />
and<br />
WHEREAS, the narrow sidewalks on Main Street support numerous<br />
improvements which enhance the pedestrian experience but also limit circulation, such<br />
as street trees, bike racks, newsracks, bus stop benches, and other street furniture; and<br />
WHEREAS, public sidewalks are created and maintained for the primary purpose<br />
<strong>of</strong> enabling pedestrians to safely and efficiently move about from place to place; and<br />
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WHEREAS, ensuring the unobstructed flow <strong>of</strong> pedestrian traffic on sidewalks<br />
promotes public safety by minimizing the risk that pedestrians will jostle one another,<br />
collide, trip, or fall, and ensuring that persons may move safely away from dangerous<br />
situations which may occur on or near public streets and sidewalks; and<br />
WHEREAS, ensuring the free flow <strong>of</strong> pedestrian traffic is particularly important to<br />
the safety <strong>of</strong> the elderly, the very young, the disabled, vision-impaired persons, and<br />
others who are less able to navigate through crowds and around obstacles or hazards<br />
and who are particularly jeopardized by having to navigate <strong>of</strong>f and onto curbs when<br />
sidewalks are blocked; and<br />
WHEREAS, hindrances to the free flow <strong>of</strong> pedestrian traffic on sidewalks may<br />
interfere with the work <strong>of</strong> public safety personnel seeking immediate access to<br />
emergency situations and with other work vital to the public health and safety, such as<br />
cleaning and maintenance; and<br />
WHEREAS, in recent years, persons have begun conducting commercial<br />
vending, mainly food sales, from vehicles while parked adjacent to alcohol serving<br />
establishments (e.g., bars and nightclubs) on Main Street, well into the late night hours;<br />
and<br />
WHEREAS, these late night vending activities attract large stationary crowds,<br />
including persons exiting from adjacent alcohol serving establishments who may be<br />
experiencing varying degrees <strong>of</strong> alcohol intoxication; and<br />
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WHEREAS, persons intoxicated while in public are <strong>of</strong>ten unable to care for their<br />
own safety, are particularly accident-prone, and can endanger others; and<br />
WHEREAS, such large crowds have created extreme congestion on the narrow<br />
sidewalks along Main Street; and<br />
WHEREAS, such extreme sidewalk congestion coupled with the large size <strong>of</strong> the<br />
vending vehicles have forced persons, both sober and intoxicated, to leave the<br />
sidewalks and walk in the street, not only across, but also up and down Main Street,<br />
and to hail public or private transportation from within the street; and<br />
WHEREAS, these late night vending activities, coupled with a lack <strong>of</strong> seating<br />
facilities for sidewalk food consumption, have caused persons to sit on sidewalks, street<br />
curbs, and even parking spaces to consume foods; and<br />
WHEREAS, late night vending on Main Street creates potential health concerns<br />
as there is a lack <strong>of</strong> available public restrooms on or near Main Street during such<br />
hours; and<br />
WHEREAS, this proliferation <strong>of</strong> late night vending near alcohol serving<br />
establishments has created significant threats to public safety, and damages the public<br />
welfare; and<br />
WHEREAS, blockage <strong>of</strong> public sidewalks on Main Street during the late night<br />
hours poses serious safety hazards because pedestrians, especially intoxicated<br />
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pedestrians, who cannot pass freely along the sidewalks frequently step into the street<br />
where they may be struck by vehicles or cause collisions between vehicles; and<br />
WHEREAS, persons, especially intoxicated persons, crossing into the middle <strong>of</strong><br />
streets to hail public or private transportation at night time, are exposed to significant<br />
danger <strong>of</strong> collision with vehicles; and<br />
WHEREAS, disease may be transmitted to persons sitting on sidewalks while<br />
eating because people or animals expectorate, urinate or defecate on sidewalks; and<br />
WHEREAS, persons sitting on curbs or parking spaces while consuming food at<br />
night time are not easily seen by drivers <strong>of</strong> vehicles attempting to enter or exit their<br />
parking spaces and may be struck by such vehicles; and<br />
WHEREAS, the <strong>City</strong>’s streets and sidewalks are not intended, designed or<br />
maintained for dining without tables and chairs; and<br />
WHEREAS, maintaining public safety on Main Street during the late night hours<br />
presents special challenges to the <strong>City</strong>’s public safety personnel, particularly in times <strong>of</strong><br />
emergency, because <strong>of</strong> the very large crowds, narrow roadways, narrow sidewalks,<br />
limited ingress and egress, and fixed impediments to circulation; and<br />
WHEREAS, there are numerous other places within the <strong>City</strong> where vending from<br />
vehicles may safely take place during late night hours without unduly interfering with the<br />
flow <strong>of</strong> pedestrian or vehicular traffic, threatening public safety or harming the public<br />
welfare; and<br />
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WHEREAS, in order to protect public safety, the <strong>City</strong> Council adopted Ordinance<br />
2381 (CCS) which prohibits late night vending on Main Street between Ocean Park<br />
Boulevard and Marine Street, during the hours <strong>of</strong> 1:00 a.m. to 3:00 a.m. on Saturdays<br />
and Sundays; and<br />
WHEREAS, since the adoption <strong>of</strong> Ordinance 2381, staff has continued vigorous<br />
enforcement activities on Main Street, and experience has shown that the above safety<br />
concerns remain significant on holidays popularly associated with alcohol consumption<br />
that may fall on a week day, and thus are not currently covered by Ordinance 2381; and<br />
WHEREAS, enforcement experience has also demonstrated that the same<br />
safety risks described above, exist in the half block <strong>of</strong> Main Street (between Marine<br />
Street and the <strong>City</strong>’s southern boundary) not currently covered by Ordinance 2381; and<br />
WHEREAS, this half-block <strong>of</strong> Main Street contains four on-street parking spaces<br />
that sit directly in front an alcohol serving establishment; and<br />
WHEREAS, these parking spaces are very frequently jammed with food trucks<br />
and their patrons during late night hours; and<br />
WHEREAS, a limited expansion <strong>of</strong> Ordinance 2381’s vending prohibition to<br />
include the half-block and the holidays popularly associated with alcohol consumption<br />
that may fall on a week day is necessary to protect public safety; and<br />
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WHEREAS, California Vehicle Code Section 22455 specifically authorizes local<br />
authorities to adopt laws, in the interest <strong>of</strong> public safety, which regulate the time, place,<br />
and manner <strong>of</strong> vending from vehicles upon any street; and<br />
WHEREAS, the <strong>City</strong> Council hereby determines that it is necessary to exercise<br />
this authority as set forth in this ordinance in order to protect public safety.<br />
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA<br />
DOES HEREBY ORDAIN AS FOLLOWS:<br />
Section 1.<br />
Section 6.36.095 <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal Code is hereby<br />
amended to read as follows:<br />
6.36.095 Prohibition <strong>of</strong> late night vending on Main Street<br />
No person shall vend from vehicles, including unhitched trailers, on Main Street,<br />
between Ocean Park Boulevard and the <strong>City</strong>’s southern boundary, during the hours <strong>of</strong><br />
1:00 a.m. to 3:00 a.m. on Saturdays, Sundays, St. Patrick’s Day, Valentine’s Day, Cinco<br />
De Mayo Day, Memorial Day, Independence Day, Labor Day, Halloween, and New<br />
Year’s Day.<br />
Section 2.<br />
Any provision <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal Code or appendices<br />
thereto inconsistent with the provisions <strong>of</strong> this Ordinance, to the extent <strong>of</strong> such<br />
inconsistencies and no further, is hereby repealed or modified to that extent necessary<br />
to effect the provisions <strong>of</strong> this Ordinance.<br />
Section 3. If any section, subsection, sentence, clause, or phrase <strong>of</strong> this<br />
Ordinance is for any reason held to be invalid or unconstitutional by a decision <strong>of</strong> any<br />
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court <strong>of</strong> competent jurisdiction, such decision shall not affect the validity <strong>of</strong> the<br />
remaining portions <strong>of</strong> this Ordinance. The <strong>City</strong> Council hereby declares that it would<br />
have passed this Ordinance and each and every section, subsection, sentence, clause,<br />
or phrase not declared invalid or unconstitutional without regard to whether any portion<br />
<strong>of</strong> the ordinance would be subsequently declared invalid or unconstitutional.<br />
Section 4. The Mayor shall sign and the <strong>City</strong> Clerk shall attest to the passage <strong>of</strong><br />
this Ordinance. The <strong>City</strong> Clerk shall cause the same to be published once in the <strong>of</strong>ficial<br />
newspaper within 15 days after its adoption. This Ordinance shall become effective 30<br />
days from its adoption.<br />
APPROVED AS TO FORM:<br />
_________________________<br />
MARSHA JONES MOUTRIE<br />
<strong>City</strong> Attorney<br />
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<strong>City</strong> Council Report<br />
To:<br />
Mayor and <strong>City</strong> Council<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
<strong>Agenda</strong> Item: 7-B<br />
From:<br />
Subject:<br />
Marsha Jones Moutrie, <strong>City</strong> Attorney<br />
Ordinance Amending Articles III and VI <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal<br />
Code Regarding Licensing and Regulation <strong>of</strong> Pedicabs<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council adopt the attached ordinance.<br />
Executive Summary<br />
At its meeting on April 9, 2013, the <strong>City</strong> Council introduced for first reading an ordinance<br />
amending Articles III and VI <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal Code regarding licensing<br />
and regulation <strong>of</strong> pedicabs. The ordinance is now presented to the <strong>City</strong> Council for<br />
adoption.<br />
Prepared by:<br />
Approved:<br />
Marsha Jones Moutrie, <strong>City</strong> Attorney<br />
Forwarded to Council:<br />
Marsha Jones Moutrie<br />
<strong>City</strong> Attorney<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
1
<strong>City</strong> Council Meeting April 23, 2013<br />
<strong>Santa</strong> <strong>Monica</strong>, California<br />
ORDINANCE NUMBER ____ (CCS)<br />
(<strong>City</strong> Council Series)<br />
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA<br />
AMENDING ARTICLES III AND VI OF THE SANTA MONICA MUNICIPAL CODE<br />
REGARDING LICENSING AND REGULATION OF PEDICABS<br />
WHEREAS, the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> (“<strong>City</strong>” or “<strong>Santa</strong> <strong>Monica</strong>”) is a small, extremely<br />
dense, older coastal city consisting <strong>of</strong> just 8 square miles <strong>of</strong> land bordered on one side by<br />
the Pacific Ocean and on three sides by the <strong>City</strong> <strong>of</strong> Los Angeles; and<br />
WHEREAS, the <strong>City</strong>’s premier location and vigorous local economy continues to<br />
attract large number <strong>of</strong> tourists from throughout the world; and<br />
WHEREAS, the <strong>City</strong>’s bustling streets are heavily utilized by motor vehicle and<br />
bicycle traffic; and<br />
year; and<br />
WHEREAS, the <strong>City</strong>’s beach bike path is narrow and congested at all times <strong>of</strong> the<br />
WHEREAS, the beach bike path’s narrow design is particularly unsuitable for<br />
pedicab operations as a single pedicab could substantially take up the entire path and<br />
impede oncoming traffic; and<br />
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WHEREAS, pedicabs have grown in popularity as a form <strong>of</strong> non-motorized<br />
transportation for hire, particularly amongst the tourist population; and<br />
WHEREAS, pedicabs are a zero emissions transportation option; and<br />
WHEREAS, pedicabs are a new mode <strong>of</strong> transportation in <strong>Santa</strong> <strong>Monica</strong> and once<br />
introduced will have an impact on traffic circulation, particularly in the heavily congested<br />
areas <strong>of</strong> the downtown; and<br />
WHEREAS, experience in other jurisdictions have shown that unregulated pedicab<br />
operations could create safety hazards and cause unnecessary consumer confusion<br />
regarding fares; and<br />
WHEREAS, some <strong>of</strong> the safety hazards reported by other jurisdictions, including<br />
substandard equipment, have resulted in serious injury to pedicab passengers; and<br />
WHEREAS, California Vehicle Code Section 21100(n) authorizes local agencies to<br />
license and regulate the operation <strong>of</strong> pedicabs; and<br />
WHEREAS, California Vehicle Code Section 21206 authorizes local agencies to<br />
regulate operations <strong>of</strong> bicycles and pedicabs on pedestrian or bicycle facilities, including<br />
facilities like the beach bike path; and<br />
WHEREAS, licensing and regulation <strong>of</strong> pedicab operations is necessary to ensure<br />
safe, quality pedicab services, mitigate negative impacts on traffic circulation, and promote<br />
the general welfare.<br />
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA<br />
DOES HEREBY ORDAIN AS FOLLOWS:<br />
SECTION 1. Section 3.12.550 <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal Code is hereby<br />
amended as follows:<br />
3.12.550 Bike-path and beach promenade.<br />
(a)<br />
It shall be unlawful to ride a bicycle or to coast in any vehicle upon the Beach<br />
Promenade; bicycle riding shall be permitted along the beach bike-path, within the <strong>City</strong><br />
limits and in those areas where the Promenade constitutes a portion <strong>of</strong> the bikeway and<br />
are otherwise permitted by sign. All persons riding bicycles on the bike-path shall comply<br />
with all lawful signs and directional markings, including, but not limited to, painted<br />
directional arrows, bike-path route boundaries, and signs designating permissible travel<br />
lanes.<br />
(b)<br />
It shall be unlawful to operate a pedicab upon the beach bike-path.<br />
SECTION 2. Section 6.48.30 <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal Code is hereby<br />
amended as follows:<br />
6.48.030 Business license required.<br />
No person shall conduct any vehicle for hire business or pedicab business without<br />
having first obtained a business license in compliance with this Chapter.<br />
SECTION 3. Chapter 6.50 is hereby added to Article VI <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong><br />
Municipal Code as follows:<br />
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Chapter 6.50<br />
PEDICABS<br />
6.50.010 Definitions.<br />
meanings.<br />
The following words or phrases as used in this Chapter shall have the following<br />
(a)<br />
Pedicab. “Pedicab” has the same meaning as that term is defined by the<br />
California Vehicle Code.<br />
(b)<br />
Pedicab Driver Permit. “Pedicab driver permit” means a non-transferable<br />
authorization for a person to provide pedicab transportation services in the <strong>City</strong>;<br />
(c)<br />
Pedicab Operator. “Pedicab operator” means a person that has been issued<br />
a pedicab operator permit and a business license to operate a pedicab business in the<br />
<strong>City</strong>.<br />
(d)<br />
Pedicab Operator Permit. “Pedicab operator permit” means a nontransferable<br />
authorization for operation <strong>of</strong> a pedicab business pursuant to the provisions <strong>of</strong><br />
this Chapter.<br />
(e)<br />
Pedicab Decal. “Pedicab decal” means a non-transferable authorization,<br />
affixed to the pedicab by the <strong>City</strong>, for a pedicab to be operated in the <strong>City</strong>.<br />
(f)<br />
Seatbelt. “Seatbelt” means a safety strap or harness designed to hold a<br />
person securely in a seat<br />
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6.50.020 Exemption.<br />
The provisions <strong>of</strong> this Chapter shall not apply to any pedicab validly permitted and<br />
operating in another jurisdiction that drops-<strong>of</strong>f passengers within the <strong>City</strong> or passes through<br />
the <strong>City</strong> without picking-up any passenger.<br />
6.50.030 Rules and regulations.<br />
The <strong>City</strong> Manager, or his or her designee, is authorized to adopt rules and<br />
regulations consistent with this Code and necessary to implement this Chapter. Such rules<br />
and regulations may include, but are not limited to, provisions governing: pedicab service<br />
and safety; pedicab vehicle equipment standards; conditions and qualifications <strong>of</strong><br />
applicants for operator permits, driver permits, and pedicab decals; and the responsibilities<br />
<strong>of</strong> pedicab operators and drivers.<br />
Such rules and regulations shall be filed in the <strong>of</strong>fice <strong>of</strong> the <strong>City</strong> Clerk where they<br />
shall be made available for inspection by the public.<br />
Violations <strong>of</strong> rules and regulations issued pursuant to this Section shall constitute<br />
violations <strong>of</strong> this Chapter, and shall subject the violator to the penalties set forth in this<br />
Chapter.<br />
6.50.040 Pedicab operator permit required.<br />
(a)<br />
No person shall operate, or cause to be operated, a pedicab business within<br />
the <strong>City</strong> without having first obtained a pedicab operator permit and a business license<br />
from the <strong>City</strong>.<br />
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(b)<br />
To obtain a pedicab operator permit, each applicant shall file with the <strong>City</strong> a<br />
complete and verified application, including a description <strong>of</strong> the applicant’s routes <strong>of</strong><br />
pedicab operations, pro<strong>of</strong> <strong>of</strong> adequate insurance, and other information prescribed by the<br />
rules and regulations adopted in accordance with this Chapter.<br />
6.50.050 Pedicab driver permit required.<br />
(a)<br />
No person shall drive or operate a pedicab within the <strong>City</strong> without having first<br />
obtained a valid pedicab driver permit.<br />
(b)<br />
To obtain a pedicab driver permit, each person shall file with the <strong>City</strong>, a<br />
complete and verified application containing information prescribed by the rules and<br />
regulations adopted in accordance with this Chapter.<br />
6.50.060 Pedicab identification decal required.<br />
(a)<br />
No person shall lease, rent, or allow a pedicab to be operated within the <strong>City</strong><br />
without having first obtained a pedicab decal. The decal shall be affixed to the pedicab in a<br />
manner clearly visible to the public.<br />
(b)<br />
A pedicab decal application shall be denied if the pedicab is unsafe for<br />
operation or fails to comply with applicable safety and equipment rules and regulations<br />
adopted in accordance with this Chapter.<br />
(c)<br />
No person shall operate a pedicab that does not have a valid pedicab decal<br />
affixed to it.<br />
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6.50.070 Fees and permits.<br />
(a)<br />
A schedule <strong>of</strong> fees to recover the costs associated with the administration<br />
and enforcement <strong>of</strong> this Chapter may be adopted by resolution <strong>of</strong> the <strong>City</strong> Council. No<br />
applicant may be issued a pedicab permit or decal until that applicant has paid all<br />
applicable fees.<br />
(b)<br />
Permits and decals that are expired, revoked, defaced, altered, forged, or<br />
counterfeited are invalid.<br />
(c)<br />
Permits and decals are the property <strong>of</strong> the <strong>City</strong> and are non-transferable.<br />
6.50.080 Denial, suspension or revocation <strong>of</strong> pedicab operator permit, pedicab<br />
driver permit, or pedicab decal.<br />
Pedicab operator permits, pedicab driver Permits, and pedicab decals may be<br />
denied, suspended or revoked by the <strong>City</strong> Manager, or his/her designee, based upon any<br />
one <strong>of</strong> the following grounds:<br />
(1) The pedicab operator or driver has failed to comply with applicable laws or<br />
rules and regulations relating to pedicab operations.<br />
(2) The pedicab operator or driver has been convicted <strong>of</strong> assault, battery,<br />
resisting arrest, any felony involving force and violence, any misdemeanor or felony<br />
reckless driving or driving under the influence <strong>of</strong>fense, or any crime reasonably related to<br />
the qualifications, functions or duties <strong>of</strong> the passenger transport business, or the ability <strong>of</strong><br />
the operator or driver to safely transport passengers.<br />
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(3) The operator or driver has been convicted <strong>of</strong> a crime that requires registration<br />
pursuant to California Penal Code Section 290.<br />
(4) The pedicab operator or driver has knowingly made a false statement <strong>of</strong><br />
material fact, or knowingly failed to state a material fact in the application process for the<br />
pedicab operator permit, pedicab driver permit or pedicab decal.<br />
6.50.090 Pedicab Parking.<br />
The <strong>City</strong> may designate pedicab parking stands to provide safe drop-<strong>of</strong>f and pick-up<br />
areas for pedicabs.<br />
6.50.100 Fare schedule.<br />
(a)<br />
Prior to commencing any pedicab operations, the pedicab operator shall file<br />
its fare schedule with the <strong>City</strong>.<br />
(b)<br />
The pedicab operator shall post the fare schedule filed with the <strong>City</strong> on every<br />
pedicab in its fleet and that meets the size, format, and location requirements as set forth<br />
by the rules and regulations adopted in accordance with this Chapter.<br />
(c)<br />
No pedicab operator or driver shall charge a passenger a fare greater than<br />
the fare submitted to the <strong>City</strong> and posted on the pedicab.<br />
6.50.110 Pedicab operations.<br />
(a)<br />
A Pedicab Operator shall:<br />
(1) keep pedicabs within its fleet in clean and sanitary conditions, and be free<br />
from mechanical or safety defects; and<br />
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(2) make pedicabs within its fleet available for inspections at reasonable times<br />
by the <strong>City</strong>.<br />
(b)<br />
It is unlawful for any person to:<br />
(1) operate a pedicab, if said person is under eighteen years <strong>of</strong> age.<br />
(2) operate a pedicab without a valid California Driver’s license.<br />
(3) operate a pedicab in any manner that impedes or blocks the normal or<br />
reasonable movement <strong>of</strong> pedestrian or vehicular traffic unless such operation is necessary<br />
for safe operation or in compliance with law or under the direction <strong>of</strong> law enforcement<br />
personnel.<br />
(4) Operate a pedicab over any route not designated in the pedicab operator<br />
permit.<br />
(5) Operate a pedicab in a manner that results in damage to property.<br />
(6) Operate a pedicab while carrying a number <strong>of</strong> passengers that exceeds the<br />
number <strong>of</strong> available seats.<br />
(7) Operate a pedicab without having all passengers be restrained by seatbelts.<br />
(8) Operate a pedicab without having a <strong>City</strong>-approved insurance policy in full<br />
force and effect at all times during the operation <strong>of</strong> the pedicab.<br />
(9) Advertise or otherwise hold itself out as providing pedicab services within the<br />
<strong>City</strong>, unless such person is operating pursuant to <strong>City</strong> issued pedicab permits.<br />
(10) Refuse to comply with a lawful order from a <strong>City</strong> <strong>of</strong>ficial charged with<br />
enforcement <strong>of</strong> this Chapter.<br />
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6.50.120 Enforcement.<br />
(a)<br />
Any person violating any provision <strong>of</strong> this Chapter shall be guilty <strong>of</strong> an<br />
infraction, which shall be punishable by a fine not exceeding two hundred fifty dollars<br />
($250) per violation; or a misdemeanor, which shall be punishable by a fine not exceeding<br />
one thousand dollars ($1,000) per violation, or by imprisonment in the County Jail for a<br />
period not exceeding six (6) months, or by both such fine and imprisonment. Where the<br />
violation is <strong>of</strong> a continuing nature, each day that the violation continues constitutes a<br />
separate and distinct violation.<br />
(b)<br />
Any person violating any provision <strong>of</strong> this Chapter shall be subject to<br />
administrative fines and penalties pursuant to Chapter 1.09 <strong>of</strong> this Code.<br />
(c)<br />
The remedies specified in this Section are cumulative and their specification<br />
shall not preclude the use <strong>of</strong> any other remedy provided by law.<br />
SECTION 4. Any provision <strong>of</strong> the <strong>Santa</strong> <strong>Monica</strong> Municipal Code or appendices<br />
thereto inconsistent with the provisions <strong>of</strong> this Ordinance, to the extent <strong>of</strong> such<br />
inconsistencies and no further, is hereby repealed or modified to that extent necessary to<br />
effect the provisions <strong>of</strong> this Ordinance.<br />
SECTION 5. If any section, subsection, sentence, clause, or phrase <strong>of</strong> this<br />
Ordinance is for any reason held to be invalid or unconstitutional by a decision <strong>of</strong> any court<br />
<strong>of</strong> competent jurisdiction, such decision shall not affect the validity <strong>of</strong> the remaining<br />
portions <strong>of</strong> this Ordinance. The <strong>City</strong> Council hereby declares that it would have passed this<br />
Ordinance and each and every section, subsection, sentence, clause, or phrase not<br />
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declared invalid or unconstitutional without regard to whether any portion <strong>of</strong> the ordinance<br />
would be subsequently declared invalid or unconstitutional.<br />
SECTION 6. The Mayor shall sign and the <strong>City</strong> Clerk shall attest to the passage <strong>of</strong><br />
this Ordinance. The <strong>City</strong> Clerk shall cause the same to be published once in the <strong>of</strong>ficial<br />
newspaper within 15 days after its adoption. This Ordinance shall become effective 30<br />
days from its adoption.<br />
APPROVED AS TO FORM:<br />
_________________________<br />
MARSHA JONES MOUTRIE<br />
<strong>City</strong> Attorney<br />
11
<strong>City</strong> Council Report<br />
To:<br />
From:<br />
Subject:<br />
Mayor and <strong>City</strong> Council<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
Karen Ginsberg, Community and Cultural Services Director<br />
<strong>Agenda</strong> Item: 8-A<br />
Options for Addressing Use <strong>of</strong> <strong>City</strong> Parks and the Beach for Commercial<br />
Fitness Instruction, Classes or Camps<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council:<br />
1. Review and comment on a proposed regulatory system to address the use <strong>of</strong><br />
<strong>City</strong> parks and the beach for commercial fitness instruction, classes or camps,<br />
and<br />
2. Direct staff to prepare an amendment to Chapter 4.55 <strong>of</strong> the Municipal Code to<br />
create a new regulatory structure, permit system and use charges for all<br />
commercial fitness instruction, classes or camps in <strong>City</strong> parks and the beach.<br />
Executive Summary<br />
In response to Council direction, staff has developed a proposed regulatory system for<br />
non-<strong>City</strong> sponsored commercial fitness instruction, classes or camps <strong>of</strong>fered in parks<br />
and the beach. The new regulatory structure would include a change to the Municipal<br />
Code, new rules, and a permit system with permit and use charges.<br />
After collecting feedback and suggestions from fitness trainers and residents, staff<br />
developed a proposed regulatory structure that largely achieves consensus. The<br />
changes include: the need for a permit system; insurance; indemnification; compliance<br />
with existing business license and police permit rules; identification <strong>of</strong> parks appropriate<br />
for commercial fitness activity; and new rules addressing protection <strong>of</strong> park amenities.<br />
The areas where consensus was not achieved include: the amount <strong>of</strong> use charges to<br />
be paid by trainers and instructors; and the extent <strong>of</strong> the restrictions in Palisades Park.<br />
Background<br />
For several years, community members have regularly complained to staff about the<br />
proliferation <strong>of</strong> unregulated fitness training and boot camps in <strong>City</strong> parks and at the<br />
beach. Most <strong>of</strong> the complaints about this activity refer to the intense use <strong>of</strong> the north<br />
end <strong>of</strong> Palisades Park.<br />
1
Staff has also received complaints from <strong>City</strong> sponsored class and camp instructors that<br />
commercial youth class and camps are setting up operation in open areas <strong>of</strong> the parks<br />
and at the beach without having to meet permit requirements and/or pay a use fee and<br />
thus are unfairly competing with <strong>City</strong> sponsored classes and camps.<br />
During its January 19, 2012 meeting, the Recreation and Parks Commission reviewed<br />
this list <strong>of</strong> concerns. The Commission recommended that Council direct staff to develop<br />
a regulatory system and suggested that staff research legal precedents, how other cities<br />
handle the issue, consider a lottery system and time and site limits for various activities.<br />
On April 10, 2012, staff brought these community concerns to the Council, and asked<br />
for direction. Council directed staff to return with options for addressing community<br />
concerns related to commercial fitness classes and large equipment in the parks and at<br />
the beach.<br />
Discussion<br />
In preparation for developing options for a regulatory system, staff:<br />
• reviewed existing <strong>City</strong> use charges, especially charges imposed on instruction for<br />
compensation,<br />
• reviewed relevant codes and <strong>of</strong>ficial park and beach rules,<br />
• developed an understanding <strong>of</strong> what private fitness instructors using <strong>City</strong> parks<br />
and the beach currently pay the <strong>City</strong>,<br />
• evaluated regulatory models and approaches used by other cities and the Los<br />
Angeles County Department <strong>of</strong> Beaches and Harbors,<br />
• surveyed existing classes and training activities in Palisades Park over a one<br />
week period,<br />
• conducted two public meetings; one focused on instructors and another for<br />
residents, and<br />
• at the request <strong>of</strong> the North <strong>of</strong> Montana Association (NOMA), made a presentation<br />
at a monthly meeting, and attended a subsequent meeting where the issue was<br />
discussed..<br />
2
In addition, a staff presentation and public hearing was held at the November 15, 2012<br />
meeting <strong>of</strong> the Recreation and Parks Commission.<br />
Existing <strong>City</strong> Practices<br />
The <strong>City</strong> currently has several regulatory processes in place that authorize instruction<br />
for compensation in <strong>City</strong> parks, park facilities and the beach. For years, the <strong>City</strong> has<br />
required tennis instructors to obtain permits and pay fees for court use. Surf instruction<br />
permits have been awarded since 2008 to a select number <strong>of</strong> instructors, all <strong>of</strong> whom<br />
have business licenses, pay permit fees, provide pro<strong>of</strong> <strong>of</strong> insurance, and share a<br />
percentage <strong>of</strong> their revenues. The <strong>City</strong> also contracts with instructors to conduct<br />
classes inside park facilities, outdoors, and at the beach with shared revenue and other<br />
requirements. A summary <strong>of</strong> existing <strong>City</strong> practices can be found in Attachment A.<br />
Most instructors pay at least 15% <strong>of</strong> gross revenues or an equivalent hourly rate for use<br />
<strong>of</strong> park facilities and specific park or beach areas (fields, courts, surf, etc.) and many<br />
pay a larger percentage.<br />
Business License and Police Permits<br />
As is true for all businesses operating in the <strong>City</strong>, commercial fitness instructors must<br />
obtain a <strong>City</strong> business license. In addition, police permits and finger printing are<br />
required for certain classifications <strong>of</strong> businesses, such as fitness instructors. Below is a<br />
chart that shows the fees that are required <strong>of</strong> fitness trainers:<br />
Business License Tax (annual)* $75.00<br />
Fingerprinting fee (1 time fee) $80.82<br />
Police Permit Fee (annual) $91.94<br />
Zoning Review Fee (1 time per location) $35.47<br />
State Mandated Fee (annual) $01.00<br />
TOTAL $284.03<br />
*Fitness trainers are required to pay the minimum business license tax <strong>of</strong> $75.00 for<br />
gross receipts <strong>of</strong> $0 to $60,000. Applicants that generate less than $40,000 annually<br />
can claim the small business exemption which waives the minimum license tax <strong>of</strong><br />
3
$75.00. The gross receipts tax is based on $1000 <strong>of</strong> sales. The tax rate for gross<br />
receipts over $60,000 is $3.00 per $1,000.<br />
Information obtained from the Business License <strong>of</strong>fice showed that in FY 2012-2013 a<br />
total <strong>of</strong> 87 trainers’ accounts were established. Of the 87 accounts, 52 were businesses<br />
grossing $40,000 or less; 7 businesses grossing $40,000 - $60,000; 12 businesses<br />
grossing $60,000 - $100,000; and 16 businesses grossing $100,000 or more. These<br />
business licenses were issued to trainers that work outdoors in a park or at the beach<br />
as well as those who work at an indoor fitness center or other facility.<br />
The average total fee paid in FY 2012-2013 for a trainer with a business grossing<br />
$40,000 or less was $255.18. This average included business license tax, the police<br />
permit fee, a one-time finger printing fee, a one-time zoning review fee and a State<br />
mandated fee.<br />
Other Cities/County Practices<br />
Many nearby municipalities, including a number <strong>of</strong> beach cities, heavily regulate or<br />
prohibit commercial activity in parks and at the beach. Redondo Beach requires all<br />
instructors/trainers to contract with the <strong>City</strong> through <strong>City</strong>-sponsored classes. Los<br />
Angeles and Culver <strong>City</strong>, and Los Angeles County Department <strong>of</strong> Beaches and Harbors<br />
charge hourly use charges ($36 - $200 per hour) and/or a percentage <strong>of</strong> gross receipts<br />
for commercial fitness activity and camps. Manhattan Beach screens trainers and limits<br />
permits by date, time and location (Attachment B).<br />
Palisades Park Use Survey<br />
To understand the intensity <strong>of</strong> commercial fitness activity in Palisades Park, staff<br />
observed and recorded class locations, size and equipment for a one week period in<br />
late October. Staff recorded 73 group classes and 74 private/semi-private classes (one<br />
to two participants) with the highest concentration <strong>of</strong> instruction taking place from<br />
7:00am to 1:00pm between the blocks <strong>of</strong> San Vicente Blvd. and Idaho Avenue. Over<br />
90% <strong>of</strong> the classes used some type <strong>of</strong> equipment which at times was attached to park<br />
4
amenities including light poles, benches, historical structures as well as trees.<br />
(Attachment C)<br />
Community Meetings<br />
Two well-attended public meetings were held. In June, staff gathered 35 trainers<br />
together to discuss neighbor concerns and develop initial options to address the<br />
concerns. In early November, Palisades Park-adjacent residents were invited to join<br />
trainers and their clients (25 total participants) and provide feedback on a draft outline <strong>of</strong><br />
a proposed regulatory system.<br />
Recreation and Parks Commission Recommendation<br />
At the November 15, 2012 Recreation and Parks Commission meeting, staff presented<br />
options for a regulatory approach to commercial fitness instruction based on input from<br />
the community meetings, listened to extensive public testimony and adopted the<br />
following recommendations for Council consideration:<br />
• establish a permit system for commercial fitness instruction, classes, or camps<br />
held in a <strong>City</strong> park or at the beach with changes to municipal codes, as required;<br />
• implement a $100 annual fee to cover the cost <strong>of</strong> issuing an Instructor Permit;<br />
• implement a use charge <strong>of</strong> 15% <strong>of</strong> gross receipts;<br />
• impose no restrictions for equipment, or time <strong>of</strong> day;<br />
• impose no limit on the total number <strong>of</strong> permits issued; and<br />
• implement permit locations – parks for group classes, semi-private classes only<br />
(1-on-1 or -on-2), or no instruction.<br />
For Palisades Park, the Commission recommended that:<br />
• commercial fitness classes and/or training be limited to private and semi-private<br />
classes only (1-on-1 or -on-2). No group classes would be allowed.<br />
• staff develop a list <strong>of</strong> exercise equipment that would be prohibited in Palisades<br />
Park.<br />
Following the Commission meeting, staff continued to correspond and meet with<br />
residents and trainers and their representatives to address the remaining areas <strong>of</strong><br />
disagreement related to limitations on group classes in Palisades Park, and the<br />
5
appropriate percentage <strong>of</strong> gross receipts to be charged. Regrettably a resolution has<br />
not been fully achieved as trainers continue to feel strongly that Palisades Park should<br />
remain available to commercial group fitness instruction, classes and camps while<br />
residents continue to communicate displeasure with the intensity <strong>of</strong> use in Palisades<br />
Park, concerns about hours, equipment and damage to the park. Trainers also say that<br />
the 15% <strong>of</strong> gross revenue use charge is too high.<br />
PROPOSED PERMIT AND REGULATORY SYSTEM<br />
Based on extensive research, analysis and public and Commission input, staff<br />
developed the following proposed permit and regulatory system for Council<br />
consideration:<br />
Amend the Municipal Code to require <strong>City</strong> authorization <strong>of</strong> commercial fitness<br />
instruction, classes, or camps in <strong>City</strong> parks and the beach, and clarify terms such as<br />
“compensation” through definitions as needed.<br />
Instructor Permit (Group/Camp and Private/Semi-Private):<br />
• Annual permit fee <strong>of</strong> $100, ($150 for camps responding to an RFP).<br />
• Use charge <strong>of</strong> 15% <strong>of</strong> gross receipts payable within 15 days <strong>of</strong> the end <strong>of</strong> each<br />
quarter.<br />
• Application form, <strong>City</strong> business license, police permit, release <strong>of</strong> liability, and<br />
pro<strong>of</strong> <strong>of</strong> insurance naming <strong>City</strong> as an additional insured.<br />
• Private/Semi-Private Permits are for instruction <strong>of</strong> classes <strong>of</strong> no more than 2<br />
participants.<br />
• Group/Camp Permits are for instruction <strong>of</strong> more than 2 participants and include<br />
commercial youth instruction, classes and camps in parks and on the beach.<br />
• Class size, including instructors, cannot exceed 150 or an event permit would be<br />
required.<br />
New Rules:<br />
Park amenities may not be used for exercise activity except on existing <strong>City</strong> installed<br />
6
exercise equipment located on the par course at Clover Park. These include light poles,<br />
pergolas, picnic tables, benches, railings, chain link fencing, freestanding signs, bike<br />
racks, and barbeque grills (Attaching any wire, rope, swing or any object to any public<br />
tree is already prohibited in the Municipal Code [Chapter 7.40]). Adults may not<br />
exercise on playground equipment. Exercise equipment weighing over (25) pounds, is<br />
prohibited in all parks as it is deemed unsafe for use in the public setting. Permit holders<br />
may not request other park users or permittees to move to another location.<br />
Permit Locations:<br />
PARK<br />
GROUP<br />
(more than 2)<br />
PRIVATE/SEMI-PRIVATE<br />
(1-1 and 1-2)<br />
Airport Park X X<br />
Barnard Linear Way<br />
X<br />
Beach Green X X<br />
Beach Park #1 X X<br />
Clover Park X X<br />
Crescent Bay Park<br />
X<br />
Douglas Park X X<br />
Euclid Park<br />
Goose Egg Park<br />
X<br />
Hotchkiss Park X X<br />
Joslyn Park<br />
Marine Park X X<br />
Memorial Park<br />
X<br />
Muscle Beach Park<br />
Ocean View Park X X<br />
Ozone Park<br />
Pacific Street Park<br />
Palisades Park<br />
X<br />
Park Drive Park<br />
Reed Park X X<br />
Schader Park<br />
South Beach Park X X<br />
Stewart Street Park X X<br />
Tongva Park<br />
X<br />
Virginia Avenue Park X X<br />
NOFITNESS<br />
INSTRUCTION<br />
ALLOWED<br />
X<br />
X<br />
X<br />
X<br />
X<br />
X<br />
X<br />
Palisades Park<br />
Palisades Park is the <strong>City</strong>’s only park that is a designated <strong>City</strong> Landmark. In addition to<br />
7
having many historic structures and amenities in it, it has the heaviest concentration <strong>of</strong><br />
fitness classes, is heavily used by the public, is quite narrow, and very close to<br />
residences. Due to the reasons listed above, staff recommends:<br />
Class Size: allow private and semi-private (1-on-1 and 1-on-2) commercial<br />
fitness instruction only<br />
Equipment: prohibit all exercise equipment weighing over 25 lbs.<br />
Alternatives<br />
As an alternative to staff recommendations above, <strong>City</strong> Council could consider the<br />
following:<br />
Class Size:<br />
• prohibit all commercial fitness instruction, classes or camps in Palisades<br />
Park, or<br />
• allow group commercial fitness instruction, classes or camps in Palisades<br />
Park with limitations on frequency and locations available, or<br />
• allow group commercial fitness instruction, classes or camps in Palisades<br />
Park but limit group size to no more than 10 participants with limitations on<br />
frequency and locations<br />
Equipment:<br />
• prohibit use <strong>of</strong> all exercise equipment in Palisades Park, or<br />
• prohibit use <strong>of</strong> all exercise equipment in Palisades Park and other parks listed<br />
above as only for private/semi-private training (i.e., Goose Egg, Barnard<br />
Linear Way, Crescent Bay and Memorial Park),<br />
• place no restrictions on use <strong>of</strong> exercise equipment in any park, including<br />
Palisades Park.<br />
Use Charge<br />
• establish a fixed use charge to be paid quarterly<br />
• adopt a use charge reflecting a lower percentage <strong>of</strong> gross receipts<br />
8
Next Steps<br />
Following direction from Council, staff will return to Council with an Ordinance in June<br />
revising Chapter 4.55 <strong>of</strong> the Municipal Code and will under the Director <strong>of</strong> Community<br />
and Cultural Services’ authority pursuant to section 4.55.420 <strong>of</strong> the Municipal Code add<br />
the above new rules to the <strong>City</strong>’s <strong>of</strong>ficial park and beach rules.<br />
Financial Impacts & Budget Actions<br />
Establishment <strong>of</strong> a regulatory system for fitness instruction, classes or camps with a<br />
proposed permit fee and percentage <strong>of</strong> gross receipts will create a new General Fund<br />
revenue source to the <strong>City</strong> which staff will estimate following Council direction. Should<br />
Council approve the regulatory system and use charges, staff will include the<br />
associated revenue in the FY 2013-15 proposed budget.<br />
Prepared by: Wendy Pietrzak, Acting Community Use Administrator<br />
Julie Silliman, Senior Administrative Analyst<br />
Approved:<br />
Forwarded to Council:<br />
Karen Ginsberg<br />
Director, Community & Cultural Services<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
Attachments:<br />
A. Existing <strong>Santa</strong> <strong>Monica</strong> Practices<br />
B. Other <strong>City</strong>/County Practices<br />
C. Palisades Park Use Survey<br />
9
Attachment A<br />
Existing <strong>Santa</strong> <strong>Monica</strong> Practices<br />
<strong>City</strong>-Contracted Classes:<br />
Instructors or companies are contracted by the <strong>City</strong> though a Request for Proposal<br />
(RFP) process for community classes and camps. Contractors <strong>of</strong>fer a range <strong>of</strong> activities<br />
and camps with registration and some marketing conducted by the <strong>City</strong>. The <strong>City</strong> retains<br />
a percentage <strong>of</strong> gross revenue ranging from 14% - 40% <strong>of</strong> registration fees.<br />
Surf Instruction Permits:<br />
Permittees are selected through a RFP process, pay a $150 annual permit fee, plus a<br />
percentage <strong>of</strong> gross receipts ranging from 15% to 20%. Other requirements include <strong>City</strong><br />
business license and police permit, signed release <strong>of</strong> liability, and pro<strong>of</strong> <strong>of</strong> insurance.<br />
Court Permits:<br />
Permits are issued for instruction on tennis, basketball, and beach volleyball courts by<br />
the hour on a first-come-first-serve basis. Permit fees vary depending on location,<br />
hours, residency, activity type, number <strong>of</strong> participants, and are based on an hourly rate<br />
ranging from $10.00 to $64.00.<br />
Field Permits<br />
Resident Camps, $25.00 - $35.00/hour depending on sport<br />
Non-resident Camps, $31.00 - $37.50/hour depending on sport<br />
Memorial Park Fitness Room and Gym (for non-exclusive use)<br />
1 – 2 clients: $10.00/hour, $5.00/ ½ hour. Limited to 2 clients only<br />
Permit Requirements<br />
Application, application fee, use charge, business license, police permit, release <strong>of</strong><br />
liability, and pro<strong>of</strong> <strong>of</strong> insurance naming <strong>City</strong> as additionally insured may be required.<br />
10
Attachment B<br />
Other <strong>City</strong>/County Practices<br />
Culver <strong>City</strong><br />
Most trainers participate in <strong>City</strong>-sponsored classes. Some park “grassy” areas are<br />
rented at $36/$52 (res/non res) per hour. Pro<strong>of</strong> <strong>of</strong> insurance and business license<br />
required. If activity conflicts with a <strong>City</strong>-sponsored class, they deny the permit.<br />
Mechanical equipment, amplified sound, generators, and lights prohibited. No permits<br />
issued for passive parks or parks where neighbors have objected to this type <strong>of</strong> activity.<br />
Beverly Hills<br />
Trainers allowed with 1 or 2 clients. Larger groups (more than 2), and equipment is<br />
prohibited.<br />
West Hollywood<br />
The <strong>City</strong> currently prohibits private tennis and golf instruction and is considering<br />
expanding this ordinance to address other types <strong>of</strong> instruction. If a commercial activity<br />
conflicts with a <strong>City</strong>-sponsored class it is not allowed.<br />
Los Angeles<br />
Boot Camp and Private Workshop charge is $60.00 per hour. Pro<strong>of</strong> <strong>of</strong> insurance is<br />
required.<br />
Newport Beach<br />
Commercial use <strong>of</strong> a park area to conduct training is $200 per hour for residents and<br />
$401 per hour for non-residents with a 2 hour minimum requirement. Beach areas<br />
cannot be reserved. A business license and insurance is required. The citation for<br />
operating w/out a permit is $100 first time, $200 2nd time, and $500 3rd time.<br />
Manhattan Beach<br />
Commercial personal training prohibited in all parks, fields and open space without<br />
permit. Permits are issued on a very limited basis and only for specific parks. Permits<br />
are date, time and site specific. Permit holders must comply with rules, pay a $25<br />
application fee, a $200 Annual Permit Fee and contribute 1% <strong>of</strong> gross receipts.<br />
Redondo Beach<br />
Only allows <strong>City</strong>-sponsored classes.<br />
Los Angeles County Beaches and Harbors<br />
All commercial activity on the beach and in beach parking lots requires authorization.<br />
Camps/Training - $200 application fee + minimum $100 location charge (summer only)<br />
and 15% <strong>of</strong> gross receipts. Day Use – flat rate or % <strong>of</strong> registration fee charged.<br />
11
Attachment C<br />
Palisades Park Use Survey<br />
Dates <strong>of</strong> Survey: October 24, 2012 through October 30, 2012<br />
Hours <strong>of</strong> Survey: 6:00 a.m. to 7:00 p.m.<br />
Number and Type <strong>of</strong> Classes<br />
• 73 group classes (more than two participants) and<br />
• 74 private/semi-private classes (one to two participants) with the<br />
Location<br />
Highest concentration <strong>of</strong> instruction took place between the blocks <strong>of</strong> San Vicente Blvd.<br />
to Idaho Avenue.<br />
Hours <strong>of</strong> Classes<br />
• 75% <strong>of</strong> the groups classes occurred between 7:00 a.m. and 1:00 p.m.<br />
• 82% <strong>of</strong> the private/semi-private classes occurred during these hours.<br />
Use <strong>of</strong> Equipment<br />
Staff observed that 90% - 95% <strong>of</strong> the classes whether group or private/semi-private<br />
used some type <strong>of</strong> equipment such as yoga mats, hand weights, bench presses, kettle<br />
balls, cones, large ropes, and miscellaneous items such as chalk/white boards, boom<br />
boxes and signage promoting the class.<br />
Some <strong>of</strong> the equipment used was attached to park amenities.<br />
12
<strong>City</strong> Council Report<br />
To:<br />
From:<br />
Subject:<br />
Mayor and <strong>City</strong> Council<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
<strong>Agenda</strong> Item: 8-B<br />
David Martin, Director <strong>of</strong> Planning and Community Development<br />
Modification to Development Agreement Application Process to Require<br />
Separate Architectural Review Board and Planning Commissions Float<br />
Ups<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council modify the recently adopted Development<br />
Agreement application review process to require separate Architectural Review Board<br />
and Planning Commission float ups rather than one combined float up.<br />
Executive Summary<br />
A series <strong>of</strong> recommendations were recently approved by the <strong>City</strong> Council on January 8,<br />
2013 and February 12, 2013 to address Development Agreement application<br />
processing. One <strong>of</strong> the recommendations called for a combined float up by the<br />
Planning Commission and four members <strong>of</strong> the Architectural Review Board (ARB). It<br />
was agreed that obtaining preliminary and conceptual comments from ARB early in the<br />
development review process adds value.<br />
Although combining a meeting <strong>of</strong> the Planning Commission and ARB members was<br />
conceptually a good idea to reduce the required number <strong>of</strong> meetings per application,<br />
implementation <strong>of</strong> the combined meetings is proving to be a scheduling challenge and is<br />
not practical. Staff now recommends that a float up first occur at an ARB meeting<br />
followed by a float up at a Planning Commission meeting. Scheduling a visit to the ARB<br />
is doable within the same time frame and should not create a delay in processing a<br />
Development Agreement.<br />
Background<br />
In January Council considered a December 11, 2012 report and a January 8, 2013<br />
supplemental report focusing on ways to address the large number <strong>of</strong> Development<br />
Agreement applications. On February 12, 2013 <strong>City</strong> Council provided direction<br />
concerning prioritizing projects and clarified the review process. Characteristics<br />
identified for prioritization included: projects producing a high ratio <strong>of</strong> revenue for the<br />
<strong>City</strong>, projects with a higher level <strong>of</strong> affordable housing units, residential projects<br />
1
containing a prescribed range <strong>of</strong> unit types, including some two and three bedroom<br />
units, educational institutions, and projects that combine adjacent sites into one<br />
Development Agreement. Council also reviewed and revised several procedures for<br />
processing Development Agreements, including shifting the responsibility to the project<br />
applicant for hosting an initial community meeting. Additionally, Council approved the<br />
recommendation to require an early conceptual review (float-up) by a combined body <strong>of</strong><br />
Planning Commission and ARB members for all Development Agreement projects.<br />
Discussion<br />
At its January 8, 2013 meeting Council adopted staff’s recommendations to provide<br />
ARB review through a combined meeting <strong>of</strong> the Planning Commission and four ARB<br />
members as a way to obtain input from ARB without adding another meeting. Staff<br />
recommended including ARB in the float up process to provide the applicant with an<br />
early indication <strong>of</strong> conceptual but significant design issues such as massing, scale,<br />
form, and relationship to the surrounding context. Without an ARB float up, ARB would<br />
not review the project until after the Development Agreement had been approved by<br />
<strong>City</strong> Council, making it difficult to adjust major design issues prior to approval <strong>of</strong> the<br />
project.<br />
Although combining the ARB review with the Planning Commission was intended to<br />
reduce the required number <strong>of</strong> meetings for the applicant, it is proving to be a challenge<br />
in terms <strong>of</strong> scheduling demands on the part <strong>of</strong> the commissioners and board members.<br />
Planning Commission and ARB each have regularly scheduled meetings occurring<br />
twice per month. A combined meeting would require either an additional date for both<br />
bodies or an additional date for ARB if the four members joined a Planning Commission<br />
meeting. Given the constraints on commission and board members’ time, staff is now<br />
recommending that an applicant first take the proposed project as a float up to ARB.<br />
ARB will provide recommendations that can inform the Planning Commission float up<br />
discussion at a subsequent meeting. Scheduling an item on an ARB agenda is<br />
2
generally not a timing issue and should not create a delay in processing a Development<br />
Agreement.<br />
The revised Development Agreement process is shown in Attachment A-1 for projects<br />
requiring an Environmental Impact Report (EIR) and in Attachment A-2 for projects that<br />
are exempt from the California Environmental Quality Act (CEQA). Consistent with the<br />
process changes authorized in January 2013, this recommended revision applies to all<br />
Development Agreement projects that have not yet completed float ups, with the<br />
exception <strong>of</strong> settlement agreements and Tier 1 or Tier 2 projects. Until tiers are defined<br />
for the downtown district, ARB and Planning Commission float ups will be required for<br />
projects over 60 feet within the area bounded by 2 nd Street, Wilshire Boulevard, 4 th<br />
Street and the I-10 Freeway, and for projects over 45 feet in the remainder <strong>of</strong> the<br />
downtown district.<br />
Financial Impacts & Budget Actions<br />
There is no immediate financial impact or budget action necessary as a result <strong>of</strong> the<br />
recommended action.<br />
Prepared by: Ellen Gelbard, Assistant Director <strong>of</strong> PCD<br />
Approved:<br />
Forwarded to Council:<br />
David Martin, Director<br />
Planning and Community Development<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
Attachments:<br />
A1 - REVISED processing chart for CEQA exempt projects<br />
A2 - REVISED processing charts for projects completing an EIR<br />
3
A-1: DA Process for Projects Subject to CEQA<br />
Community Meeting – By Applicant<br />
ARB Float-Up *<br />
Planning Commission Float-Up *<br />
<strong>City</strong> Council Float-Up<br />
Planning Commission Hearing<br />
<strong>City</strong> Council Hearing<br />
ARB Hearing (Post-DA Approval)<br />
* Tier 1 and Tier 2 Projects and specified Downtown District projects may<br />
skip ARB and PC Float-Ups
A-2: DA Process for Projects Exempt from CEQA<br />
Community Meeting – By Applicant<br />
ARB Float-Up *<br />
Planning Commission Float-Up*<br />
Planning Commission Hearing<br />
<strong>City</strong> Council Hearing<br />
ARB Hearing (Post-DA Approval)<br />
* Tier 1 and Tier 2 Projects and specified Downtown District<br />
projects may skip ARB and PC Float-Ups
<strong>City</strong> Council Report<br />
To:<br />
From:<br />
Subject:<br />
Mayor and <strong>City</strong> Council<br />
<strong>City</strong> Council Meeting: April 23, 2013<br />
Karen Ginsberg, Director <strong>of</strong> Community and Cultural Services<br />
Andy Agle, Director <strong>of</strong> Housing and Economic Development<br />
<strong>Agenda</strong> Item: 9-A<br />
Public Hearing and Approval <strong>of</strong> the Proposed FY2013-14 One-Year Action<br />
Plan Allocating Federal Community Development Block Grant (CDBG)<br />
and HOME Investment Partnership Act Program (HOME) Entitlement<br />
Grant Funds<br />
Recommended Action<br />
Staff recommends that the <strong>City</strong> Council:<br />
1. Hold a public hearing, receive public comment, and approve the Proposed<br />
FY 2013-14 One-Year CDBG and HOME Action Plan (Attachment A).<br />
2. Authorize the <strong>City</strong> Manager to submit all documents required to receive the <strong>City</strong>’s<br />
annual Community Development Block Grant (CDBG) and Home Investment<br />
Partnerships Act (HOME) entitlement grant funds to the U.S. Department <strong>of</strong><br />
Housing and Urban Development (HUD).<br />
Executive Summary<br />
To receive CDBG and HOME grant funds, the <strong>City</strong> must submit a Council-approved<br />
One-Year Action Plan to HUD by May 15, 2013. The Action Plan outlines how the<br />
funds will be expended and confirms that the funded activities are consistent with the<br />
<strong>City</strong>’s Five-Year Consolidated Plan adopted by Council on May 11, 2010. The<br />
FY 2013-14 One-Year Action Plan proposes goals, activities and specific allocations for<br />
$3M in CDBG and HOME funds for capital projects, public service programs, tenantbased<br />
rental assistance, operating activities and program administration. Additionally,<br />
staff proposes the programming <strong>of</strong> $164,000 in anticipated FY 2013-14 CDBG and<br />
HOME program income to support new and on-going projects. The FY 2013-14<br />
entitlement allocations reflect a 5% decrease respectively to CDBG and HOME<br />
allocation funding levels from FY 2012-13 due to sequestration. Specific appropriations<br />
<strong>of</strong> these funds have been included in the proposed FY 2013-15 Budget and<br />
FY 2013-14 CIP Exception Based Budget.<br />
1
Discussion<br />
The Proposed FY 2013-14 Action Plan details proposed program funding allocations for<br />
CDBG and HOME funds to address the high-priority needs identified in the <strong>City</strong>’s Five-<br />
Year Consolidated Plan. <strong>Santa</strong> <strong>Monica</strong>’s key objectives for the 2013-14 funding period<br />
include:<br />
• Expanding housing opportunities for low-income households through an<br />
increase in the supply <strong>of</strong> decent, safe, and affordable housing and rental<br />
assistance;<br />
• Supporting efforts to help homeless or near-homeless <strong>Santa</strong> <strong>Monica</strong> residents<br />
secure adequate temporary and permanent housing and receive necessary<br />
supportive services;<br />
• Improving accessibility for persons with disabilities and seniors; and completing<br />
improvements to public facilities and/or infrastructure.<br />
Both programs benefit residents with special needs and incomes at or below 80% <strong>of</strong><br />
area median income (low and moderate income). The <strong>City</strong>’s total CDBG and HOME<br />
entitlement for FY 2012-13 was $1.5 million and the entitlement for FY 2013-14 is $1.4<br />
million, reflecting a 5% reduction in program and administrative revenues. The FY<br />
2013-14 funding allocations include:<br />
• CDBG: $956,705 in new entitlement funds, $1,120,981 in prior year unallocated<br />
entitlement funds and $87,000 in projected program income funds for capital<br />
projects, public service and administration activities. The CDBG entitlement<br />
award for FY 2013-14 reflects a 5% decrease <strong>of</strong> $50,353 from FY2012-13.<br />
• HOME: $471,808 in new entitlement funds, $288,429 in prior year unallocated<br />
entitlement funds and $77,000 in program income for tenant-based rental<br />
assistance, mobile home improvement program and administration. The HOME<br />
entitlement award for FY 2013-14 reflects a 5% decrease <strong>of</strong> $28,832 from<br />
FY2012-13.<br />
The reductions to the entitlement programs have resulted in decreased funding<br />
available to support housing, public facility improvements, and administrative<br />
reimbursement due to federal budget policies on sequestration. HUD has not issued<br />
the final notice <strong>of</strong> funding. Further grant cuts could be forthcoming.<br />
2
Due to federal spending limitations, a maximum <strong>of</strong> 15% <strong>of</strong> the entitlement amount may<br />
be allocated to nonpr<strong>of</strong>it organizations for public service support operating grants (from<br />
$164,109 in FY2012-13 to $156,556 in FY2013-14). As a result <strong>of</strong> the FY2013-14<br />
entitlement decrease, the <strong>City</strong>’s General Fund will absorb $7,553 in cuts to public<br />
service activities that support permanent and supportive housing to low-income people<br />
and families, including homeless, people with disabilities and the frail elderly. This<br />
decrease has also reduced the <strong>City</strong>’s capacity to fund eligible capital improvement<br />
projects moving forward. Any additional cuts to FY 2013-14 and future allocations will<br />
limit housing, public services activities, commercial, and public facility funding.<br />
Public Outreach<br />
The Proposed One-Year Action Plan is available for a 30-day public review from<br />
April 1, 2013 to April 30, 2013. Staff will incorporate changes based on the public<br />
review process and Council discussion <strong>of</strong> the Action Plan scheduled on April 23 rd . The<br />
Action Plan must be submitted to HUD no later than May 15, 2013.<br />
Public Hearing<br />
Pursuant to Municipal Code Section 2.68.050, the <strong>City</strong> has adopted a public comment<br />
process which requires two public hearings prior to the adoption <strong>of</strong> a Consolidated Plan<br />
and Action Plan. The Public Hearing held on January 22, 2013 and this Public Hearing,<br />
on April 23, 2013, will satisfy the two meeting requirement to receive public input and<br />
recommendations for the Proposed 2013-14 Action Plan.<br />
3
Financial Impacts & Budget Actions<br />
FY2013-14 HOME and CDBG entitlement award reductions have been included in the<br />
<strong>City</strong>’s Proposed FY 2013-15 Biennial Budget. Due to this reduction, the <strong>City</strong>’s General<br />
Fund will absorb $7,553 in public service activities. Staff projections for these awards<br />
were included in various account numbers as part <strong>of</strong> the <strong>City</strong>’s Proposed FY2013-15<br />
Budget and FY 2013-14 CIP Exception Based Budget. Projections are subject to <strong>City</strong><br />
Council approval.<br />
Prepared by: Sergio Ramirez, Senior Administrative Analyst<br />
Approved:<br />
Forwarded to Council:<br />
Karen Ginsberg, Director<br />
Community and Cultural Services<br />
Rod Gould<br />
<strong>City</strong> Manager<br />
Approved:<br />
Andy Agle, Director<br />
Housing and Economic Development<br />
Attachments:<br />
A. Proposed FY 2013-14 One-Year Action Plan<br />
4
<strong>City</strong> <strong>of</strong> santa monica<br />
2013-2014 Action Plan<br />
March 2013
CITY OF SANTA MONICA<br />
FY 2013-14<br />
One-Year Action Plan<br />
Submitted to the<br />
U.S. Department <strong>of</strong><br />
Housing and Urban Development<br />
HUMAN SERVICES DIVISION<br />
Community and Cultural Services Department<br />
HOUSING DIVISION<br />
Housing and Economic Development Department<br />
1685 Main Street, Room 212, <strong>Santa</strong> <strong>Monica</strong>, California 90401<br />
Telephone (310) 458-8701 FAX (310) 458-3380 TDD (310) 458-8696<br />
Website: www.smgov.net<br />
March 26, 2013
2013-14 ACTION PLAN<br />
Table <strong>of</strong> Contents<br />
Executive Summary ......................................................................................................... 1<br />
Objectives ........................................................................................................................... 1<br />
Outcomes ........................................................................................................................... 1<br />
Introduction .................................................................................................................... 2<br />
Background ........................................................................................................................ 2<br />
Resources ........................................................................................................................... 3<br />
Goals .................................................................................................................................. 3<br />
Public Participation ............................................................................................................. 3<br />
2013-14 CDBG and HOME Activities ................................................................................ 4<br />
Geographic Distribution ...................................................................................................... 6<br />
Other Housing and Community Development Efforts ....................................................... 9<br />
Affordable Housing Programs/Projects ................................................................................ 9<br />
Addressing Needs <strong>of</strong> Homeless and Special Needs Populations ............................................. 9<br />
Removal <strong>of</strong> Barriers to Affordable Housing ........................................................................... 9<br />
Lead-Based Paint Hazard Reduction Strategy .................................................................... 10<br />
Public Housing Initiatives ................................................................................................. 11<br />
Fair Housing ..................................................................................................................... 11<br />
Institutional Structure and Coordination ....................................................................... 12<br />
Anti-Poverty Strategy .................................................................................................... 13<br />
Obstacles to Meeting Underserved Needs ....................................................................... 14<br />
Increase in Population Needing Assistance ........................................................................ 14<br />
Lack <strong>of</strong> Resources ............................................................................................................. 14<br />
Reduction in Services ........................................................................................................ 15<br />
Accessibility ...................................................................................................................... 15<br />
Awareness <strong>of</strong> Services ....................................................................................................... 15<br />
CDBG and HOME Specific Requirements ........................................................................ 15<br />
SF-424 and Certifications ................................................................................................. 15<br />
CDBG Program ................................................................................................................. 15<br />
HOME Program ................................................................................................................ 16<br />
Monitoring ..................................................................................................................... 17<br />
Project Selection ............................................................................................................... 17<br />
Program/Project Monitoring .............................................................................................. 18<br />
Ongoing Monitoring <strong>of</strong> Housing Projects ............................................................................ 18<br />
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2013-14 ACTION PLAN<br />
Appendices<br />
Appendix A:<br />
Appendix B:<br />
Appendix C:<br />
Appendix D:<br />
Appendix E:<br />
Public and Private Resources Available for Housing & Community Development<br />
Activities<br />
Public Participation<br />
Proposed Projects (Table 3Cs)<br />
HUD Tables<br />
SF-424 and Certifications<br />
List <strong>of</strong> Tables<br />
Table 1 Proposed CDBG and HOME Activities and Projects, Fiscal Year 2013-14 ..................... 4<br />
List <strong>of</strong> Figures<br />
Figure 1 Minority Concentration Map ..................................................................................... 7<br />
Figure 2 Low and Moderate Income Area Map ......................................................................... 8<br />
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2013-14 ACTION PLAN<br />
EXECUTIVE SUMMARY<br />
The FY 2013-14 Action Plan is a one-year plan to address the community development and low-income<br />
housing needs in the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. Both the Consolidated Plan and the Action Plan are implemented<br />
by the <strong>City</strong>’s Community and Cultural Services Department and the Housing and Economic Development<br />
Department.<br />
The <strong>City</strong> anticipates receiving $956,705 from the federal Community Development Block Grant (CDBG)<br />
program and $471,808 in HOME Investment Partnerships Program (HOME) funds. The <strong>City</strong> will also<br />
reprogram $1,120,981 in prior-year CDBG funds, $288,429 in prior-year HOME funds, $87,000 in CDBG<br />
program income and $77,000 in HOME program income. HUD has not yet announced FY 2013-14<br />
allocations for State and local jurisdictions. This Plan includes CDBG and HOME estimates based on an<br />
anticipated 5% reduction to the FY12/13 level <strong>of</strong> funding. If the <strong>City</strong>’s actual FY 2013-14 allocations are<br />
higher or lower than the estimates, CDBG and HOME funding for capital projects, public service and<br />
administrative activities will be increased or decreased in order to comply with CDBG and HOME<br />
regulations. <strong>Santa</strong> <strong>Monica</strong> has access to a variety <strong>of</strong> federal, state, and local resources to achieve its housing<br />
and community development priorities. Specific funding resources will be utilized based on the opportunities<br />
and constraints <strong>of</strong> each particular project or program.<br />
<strong>City</strong> staff encouraged citizen participation throughout the Consolidated Plan and Action Plan process. This<br />
included consulting local organizations, holding public meetings, and encouraging public comment during the<br />
public review period. Using research and input from the public, <strong>City</strong> staff formulated the objectives and<br />
outcomes that are briefly described below.<br />
OBJECTIVES<br />
The <strong>City</strong>’s key objectives for the 2013-14 funding period include the following:<br />
• Expand housing opportunities for extremely low-income, very low-income, low-income, and<br />
moderate-income households through an increase in the supply <strong>of</strong> decent, safe, and affordable<br />
housing and rental assistance and services to sustain housing for special needs populations;<br />
• Support efforts to help homeless or near-homeless <strong>Santa</strong> <strong>Monica</strong> residents secure adequate<br />
temporary and permanent housing and receive necessary supportive services;<br />
• Complete improvements to public facility serving priority needs populations; and<br />
• Improve accessibility for persons with disabilities.<br />
OUTCOMES<br />
The <strong>City</strong>’s housing outcomes for this planning period are directed at improving housing affordability, quality,<br />
and access; social service availability; and facility accessibility to persons with disabilities. The <strong>City</strong> anticipates<br />
the following outcomes from its 2013-14 activities:<br />
• About 25 households provided with rental subsidy;<br />
• Approximately 20 homes repaired or rehabilitated;<br />
• 240 homeless persons provided with supportive services;<br />
• 30 households provided with adaptive home equipment modifications;<br />
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2013-14 ACTION PLAN<br />
• 4 manufactured homes built and installed;<br />
• Facility improvements to one community facility;<br />
• 9 alley infrastructure improvements;<br />
• 2 park restroom facility improvements; and<br />
• One ADA and accessible beach walkway.<br />
INTRODUCTION<br />
The U.S. Department <strong>of</strong> Housing and Urban Development (HUD) requires all government entities receiving<br />
federal Community Development Block Grant (CDBG) and HOME Investment Partnerships Program<br />
(HOME) funds to prepare an annual Action Plan. The Action Plan outlines funding priorities and discusses<br />
how activities will meet the community needs identified in the Consolidated Plan. The activities described in<br />
this Action Plan are proposed to be undertaken during the period between July 1, 2013 and June 30, 2014.<br />
The major objectives <strong>of</strong> activities undertaken during the FY 2013-14 funding year will be to:<br />
• Expand housing opportunities for extremely low-income, very low-income, low-income, and<br />
moderate-income households through an increase in the supply <strong>of</strong> decent, safe, and affordable<br />
housing and rental assistance and services to sustain housing for special needs populations;<br />
• Support efforts to help homeless or near-homeless <strong>Santa</strong> <strong>Monica</strong> residents secure adequate<br />
temporary and permanent housing and receive necessary supportive services;<br />
• Improve accessibility for persons with disabilities, seniors, pedestrians, and bicyclists; and<br />
• Complete improvements to public facilities and/or infrastructure serving priority need populations.<br />
BACKGROUND<br />
<strong>Santa</strong> <strong>Monica</strong> comprises about 8.3 square miles <strong>of</strong> land and has more than 90,000 residents. The community’s<br />
residents tend to be older, more educated, and higher income than the residents <strong>of</strong> Los Angeles County as a<br />
whole. Nonetheless, <strong>Santa</strong> <strong>Monica</strong> does have a significant low-income population, in areas including the Pico<br />
neighborhood. The community needs found within <strong>Santa</strong> <strong>Monica</strong> revolve heavily around housing<br />
affordability, homelessness resources, and social service issues.<br />
Over the last five years, <strong>Santa</strong> <strong>Monica</strong> has focused efforts on providing new affordable housing through new<br />
construction, acquisition, and rehabilitation for family, senior, and special needs households, providing rental<br />
assistance, and <strong>of</strong>fering rehabilitation assistance for owners and renters. The <strong>City</strong> has also provided more than<br />
$100 million in federal, state, and local funds to serve wide range <strong>of</strong> the service needs <strong>of</strong> lower-income<br />
households. The <strong>City</strong> has prioritized assistance to the homeless, young children, youth, seniors, and people<br />
with disabilities.<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> Community and Cultural Services Department serves as the lead agency for the<br />
administration <strong>of</strong> CDBG funds, while the Housing and Economic Development Department takes the lead<br />
on HOME funds. The two departments coordinated on the development <strong>of</strong> the Consolidated Plan, which<br />
serves as a five-year strategy to address the needs <strong>of</strong> low-income residents in <strong>Santa</strong> <strong>Monica</strong>. The plan<br />
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2013-14 ACTION PLAN<br />
identifies community needs and provides a strategy to address those needs using CDBG and HOME funds,<br />
as well as other federal, state, and local resources. In addition to the Consolidated Plan, the <strong>City</strong> prepares an<br />
annual Action Plan. The Action Plan describes how funds will be spent each year to address the needs<br />
identified in the Consolidated Plan. The Action Plan is submitted to HUD 45 days prior to the start <strong>of</strong> the<br />
<strong>City</strong>’s fiscal year.<br />
RESOURCES<br />
In fiscal year 2013-14, the <strong>City</strong> anticipates receiving $956,705 in CDBG funding and $471,808 in HOME<br />
funding. The <strong>City</strong> will also reprogram $1,120,981 in prior-year CDBG funds, $288,429 in prior-year HOME<br />
funds, and $87,000 in CDBG program income and $77,000 in HOME program income. In order to address<br />
community needs and the goals identified in the Consolidated Plan, the <strong>City</strong> will augment CDBG and<br />
HOME funds using a variety <strong>of</strong> additional funding sources. These funding sources may include the <strong>City</strong>’s<br />
General Fund, Proposition A (transit) funds, Supportive Housing Program funds, and other federal, state,<br />
and local sources. A full listing <strong>of</strong> potential funding sources is available in Appendix A - Public and Private<br />
Resources Available for Housing & Community Development Activities.<br />
GOALS<br />
<strong>Santa</strong> <strong>Monica</strong> receives CDBG and HOME funding and also uses a variety <strong>of</strong> other local, state, and federal<br />
resources in support <strong>of</strong> housing and community development activities. The overall goal <strong>of</strong> these programs<br />
is to serve low-income persons by developing viable urban communities through the following actions:<br />
• Providing decent housing;<br />
• Providing a suitable living environment; and<br />
• Expanding economic opportunities.<br />
The <strong>City</strong> has identified a range <strong>of</strong> goals in its 2010-2015 Consolidated Plan, and these include improving the<br />
lives <strong>of</strong> low-income persons and special needs groups through capital improvements, social services, and<br />
housing activities. In FY 2013-14, the <strong>City</strong> will continue to support housing rehabilitation and rental subsidy,<br />
accessibility improvements for people with disabilities, and homeless service provision. Detailed descriptions<br />
<strong>of</strong> the activities the <strong>City</strong> will fund or undertake during FY 2013-14 are detailed in a later section <strong>of</strong> this Action<br />
Plan.<br />
PUBLIC PARTICIPATION<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> encourages citizen involvement in the planning, implementation and evaluation <strong>of</strong><br />
its housing and community development programs. The Action Plan includes activities intended to assist<br />
residents <strong>of</strong> the <strong>City</strong>, particularly those with low incomes and those with special housing and supportive<br />
needs. The following section details the opportunities for public involvement in the preparation <strong>of</strong> this<br />
Action Plan.<br />
Public Hearings<br />
On January 22, 2013, the <strong>City</strong> Council held a public hearing to discuss budget priorities for the next fiscal<br />
year, including the CDBG and HOME programs. Members <strong>of</strong> the public were provided with an opportunity<br />
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2013-14 ACTION PLAN<br />
to share their perspective on needs and priorities. Additionally, on April 23, 2013, the <strong>City</strong> Council will hold<br />
a public hearing to adopt the FY 2013-14 Action Plan.<br />
Public Comment Period<br />
A draft <strong>of</strong> the FY 2013-14 Action Plan is made available for public review for a 30-day period beginning<br />
April 1, 2013 and ending April 30, 2013. The documents are posted on the <strong>City</strong>’s website and are available at<br />
several city locations. Public comment is incorporated in Appendix B- Public Participation.<br />
Commissions and Advisory Boards<br />
The <strong>City</strong> has established various commissions and advisory boards comprised <strong>of</strong> interested citizens and<br />
focused on specific topics. These bodies monitor the needs <strong>of</strong> the community and advise the <strong>City</strong> Council on<br />
the best way to address those needs. Commission, advisory board, and task force meetings are open to the<br />
public.<br />
2013-14 CDBG AND HOME ACTIVITIES<br />
Table 1 provides a description <strong>of</strong> the activities the <strong>City</strong> will fund or undertake during FY2013-14. The <strong>City</strong><br />
anticipates completion <strong>of</strong> all <strong>of</strong> the listed activities within the fiscal year. More detailed descriptions for each<br />
<strong>of</strong> the activities are listed in Appendix C – Proposed Projects (Table 3Cs).<br />
TABLE 1<br />
PROPOSED CDBG AND HOME ACTIVITIES AND PROJECTS, FISCAL YEAR 2013-14<br />
Project Name<br />
Con Plan<br />
Priority<br />
Project Description<br />
Annual<br />
Goal<br />
Funding<br />
Tenant-Based Rental<br />
Assistance (TBRA)<br />
AH-1.2<br />
The HOME TBRA program provides rental<br />
subsidies for senior/disabled homeless persons,<br />
victims <strong>of</strong> domestic violence, and persons at risk<br />
<strong>of</strong> homelessness. Qualified applicants are referred<br />
by local service agencies and qualified for the<br />
HOME program by the <strong>Santa</strong> <strong>Monica</strong> Housing<br />
Authority.<br />
25 households<br />
$310,000<br />
HOME<br />
Park Restroom<br />
Accessibility<br />
Improvements<br />
Mobile Home<br />
Improvement Program<br />
CD-10.1<br />
AH-2.2<br />
Rehabilitation <strong>of</strong> two park restroom buildings to<br />
bring restrooms into compliance with the<br />
American with Disabilities Act (ADA).<br />
Facilitate the purchase and installation <strong>of</strong> mobile<br />
home units at Mountain View Mobile Home Park<br />
for either rental or ownership opportunities.<br />
2 public<br />
facility<br />
upgrades<br />
4 households<br />
$700,000<br />
CDBG<br />
($321,331<br />
current year<br />
entitlement<br />
and $378,669<br />
prior-year<br />
allocations)<br />
$472,429<br />
HOME<br />
($107,000 current<br />
year entitlement;<br />
$288,429 prioryear<br />
allocations<br />
and $77,000 in<br />
program income)<br />
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Project Name<br />
Con Plan<br />
Priority<br />
Project Description<br />
Annual<br />
Goal<br />
Funding<br />
Residential Repair<br />
Program<br />
Home Access Program<br />
AH-2.3<br />
SP-3.1<br />
The <strong>City</strong> will <strong>of</strong>fer a residential repair and<br />
rehabilitation program for housing units owned or<br />
occupied by low-income households.<br />
This program provides minor home modifications<br />
for low-income persons with disabilities.<br />
20 households<br />
30 persons<br />
$510,000<br />
CDBG<br />
($423,000 prioryear<br />
allocation<br />
and $87,000 in<br />
program<br />
income)<br />
$37,377<br />
CDBG<br />
Chronic Homeless<br />
Program<br />
H-1.2<br />
Provide assertive outreach and intensive case<br />
management to chronically homeless persons in<br />
the CHP Assertive Case Management and<br />
Homeless Community Court Programs.<br />
50 persons<br />
$72,469<br />
CDBG<br />
Family Self Sufficiency<br />
Program<br />
H-1.2<br />
This program assists families participating in the<br />
Housing Choice Voucher program in achieving<br />
economic independence and securing a living<br />
wage within five years.<br />
$64,174<br />
CDBG<br />
Shelter Plus Care<br />
Program<br />
Sanctuary<br />
H-1.2<br />
H-1.2<br />
This program assists homeless persons with<br />
disabilities to obtain and maintain housing<br />
through the provision <strong>of</strong> comprehensive case<br />
management services and rental assistance.<br />
This program provides case management,<br />
vocational training, benefits assistance, permanent<br />
housing retention, and other services to formerly<br />
homeless persons with mental illness.<br />
190 persons<br />
$3,487<br />
CDBG<br />
$16,426<br />
CDBG<br />
Accessible Beach<br />
Walkway<br />
Alley Improvement<br />
Project<br />
Facility Improvements to<br />
Community Facility<br />
(Senior)<br />
CD-10.1,<br />
CD-12.2<br />
CD-12.1<br />
CD-12.1<br />
Construction <strong>of</strong> an accessible walkway at South<br />
Beach Park to go beyond ADA requirements to<br />
maximize the inclusion <strong>of</strong> children with various<br />
types <strong>of</strong> disabilities.<br />
Improvements to infrastructure in low to<br />
moderate income areas.<br />
The facility improvements will upgrade and<br />
improve existing community facilities to meet the<br />
needs <strong>of</strong> the community, especially persons <strong>of</strong> low<br />
and moderate income and those with special<br />
needs.<br />
1 public<br />
facility project<br />
5<br />
infrastructure<br />
improvements<br />
1 public<br />
facility project<br />
$154,000<br />
CDBG<br />
$297,212<br />
CDBG (prioryear<br />
allocation)<br />
$100,800<br />
CDBG<br />
($70,000<br />
current year<br />
entitlement and<br />
$30,800 prioryear<br />
allocation)<br />
HOME Program<br />
Administration<br />
PA-1.1<br />
Administer the HOME program in compliance<br />
with federal regulations and local policies.<br />
N/A<br />
$54,808<br />
HOME<br />
CDBG Program<br />
Administration<br />
PA-1.1<br />
Administer the CDBG program in compliance<br />
with federal regulations and local policies.<br />
N/A<br />
$208,741<br />
CDBG<br />
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GEOGRAPHIC DISTRIBUTION<br />
Depending on the type <strong>of</strong> need being addressed, resources may or may not be geographically targeted. Most<br />
<strong>of</strong> the <strong>City</strong>’s FY 2013-14 programs and projects will be available to residents citywide. The projects below will<br />
be available in specific areas:<br />
• An accessible beach walkway will be completed at South Beach Park, located at 3400 Barnard Way,<br />
adjacent to <strong>Santa</strong> <strong>Monica</strong> State Beach.<br />
• The Mobile Home Improvement Program will be <strong>of</strong>fered at the Mountain View Mobile Home Park,<br />
located at 1930 Stewart Street.<br />
• Facility Improvements will be made to the Ken Edwards Center, located at 1527 4 th Sreet.<br />
• Rehabilitation <strong>of</strong> two park restrooms to bring restrooms into compliance with ADA; located at<br />
2351 3 rd Street (Hotchkiss Park) and 1406 Marine Street (Marine Park).<br />
Figure 1 shows the map <strong>of</strong> areas with minority concentrations, and Figure 2 depicts a map <strong>of</strong> low-income<br />
areas in the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>. Assistance to improve public facilities may be provided outside <strong>of</strong> lowincome<br />
areas if the project primarily benefits low-income households or persons presumed to be low-income,<br />
such as adults with disabilities.<br />
Public services are not geographically targeted. Services will be provided in such a manner as to provide the<br />
greatest level <strong>of</strong> availability to the widest area possible.<br />
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Figure 1<br />
Minority Concentration Map<br />
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Figure 2<br />
Low and Moderate Income Area Map<br />
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OTHER HOUSING AND COMMUNITY DEVELOPMENT<br />
EFFORTS<br />
<strong>Santa</strong> <strong>Monica</strong> has access to a variety <strong>of</strong> federal, state, and local resources to achieve its housing and<br />
community development priorities. These funding sources include CDBG, HOME, Housing Choice<br />
Voucher, Family Self Sufficiency, and Shelter Plus Care, among others. The <strong>City</strong> also makes available local<br />
funding in support <strong>of</strong> housing and community development priorities. Specific funding resources will be<br />
utilized based on the opportunities and constraints <strong>of</strong> each particular project or program. The funding<br />
resources table in Appendix A identifies the potential sources <strong>of</strong> funding available to carry out housing and<br />
community development activities in <strong>Santa</strong> <strong>Monica</strong>.<br />
The <strong>City</strong> will continue to support a wide range <strong>of</strong> housing and community development activities in FY 2013-<br />
14. To the greatest extent possible, the <strong>City</strong> will seek to leverage funding from other public and private<br />
entities to strengthen programs and activities established in the Consolidated Plan and this Action Plan. Local<br />
funding sources, housing trust funds, and private conventional loans will be used as the local match for the<br />
<strong>City</strong>’s HOME program funds.<br />
AFFORDABLE HOUSING PROGRAMS/PROJECTS<br />
The <strong>City</strong> works in partnership with affordable housing developers, primarily non-pr<strong>of</strong>its, to acquire, maintain,<br />
rehabilitate, and develop new affordable housing units in <strong>Santa</strong> <strong>Monica</strong>. The <strong>City</strong> administers four affordable<br />
housing trust funds, implements an Affordable Housing Production Program and a Rent Control Charter<br />
Amendment, and administers a Section 8 housing assistance program to preserve affordable housing<br />
opportunities throughout the <strong>City</strong>.<br />
ADDRESSING NEEDS OF HOMELESS AND SPECIAL NEEDS POPULATIONS<br />
The <strong>City</strong> plans to use its CDBG funds to promote the local provision <strong>of</strong> services for low-income <strong>Santa</strong><br />
<strong>Monica</strong> residents. Several <strong>of</strong> the <strong>City</strong>’s proposed FY 2013-14 programs will directly benefit special needs<br />
groups, including people with disabilities (Home Access Program) and homeless (various supportive<br />
assistance and housing programs). Homeless program priorities are based on the Action Plan to Address<br />
Homelessness, which prioritizes housing and care for long term chronically homeless <strong>Santa</strong> <strong>Monica</strong> residents,<br />
including chronically homeless veterans. The <strong>City</strong> also has a Human Services Grants Program, which<br />
provides approximately $7.5 million annually to more than 50 programs, most <strong>of</strong> whom serve special needs<br />
populations.<br />
REMOVAL OF BARRIERS TO AFFORDABLE HOUSING<br />
As defined by the Consolidated Plan regulations, a barrier to affordable housing is a public policy such as land<br />
use controls, property taxes, zoning ordinances, building codes, fees and charges, growth limits, and other<br />
policies that limits access to or the development <strong>of</strong> affordable units. The <strong>City</strong> will continue to monitor,<br />
analyze, and address market conditions and governmental factors that may act as a barrier to affordable<br />
housing.<br />
The State <strong>of</strong> California requires each city and county to prepare a Housing Element every five years. The<br />
Housing Element includes an analysis <strong>of</strong> constraints to housing , and programs as well as strategies to reduce<br />
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or remove those constraints. Constraints that must be addressed include public policies and regulations that<br />
limit the availability <strong>of</strong> housing, particularly affordable housing.<br />
Market factors that tend to restrict affordable housing production are high land costs, high construction<br />
costs, and inadequate financing to subsidize the creation <strong>of</strong> affordable housing. The <strong>City</strong> has little influence<br />
on land costs or construction costs. The <strong>City</strong> does, however, have an active program in place to make<br />
financing available for affordable housing projects and assists with site acquisition, although this effort has<br />
been significantly impacted by the dissolution <strong>of</strong> redevelopment agencies by the California legislature and the<br />
associated loss <strong>of</strong> redevelopment tax increment funding. The <strong>City</strong> also continues to monitor, analyze, and<br />
address governmental regulations, land use controls, and residential development standards that affect the<br />
production and preservation <strong>of</strong> affordable housing.<br />
In November 2008, the <strong>City</strong> adopted the 2008-2014 General Plan Housing Element which sets forth the<br />
<strong>City</strong>’s strategies to preserve and enhance the community’s character, expand housing opportunities for all<br />
economic segments, and provide guidance for local government decision making in all matters related to<br />
housing. Additionally, the <strong>City</strong> is currently preparing a draft <strong>of</strong> the next Housing Element for the period<br />
2014 – 2021.<br />
In July 2010, the <strong>City</strong> adopted the Land Use and Circulation Element (LUCE) which encompasses the<br />
community’s visions for <strong>Santa</strong> <strong>Monica</strong>’s future. The Plan is designed to maintain our <strong>City</strong>’s character, protect<br />
our neighborhoods, manage our transportation systems, and encourage additional housing in a sustainable<br />
manner that ensures a high quality <strong>of</strong> life for all <strong>Santa</strong> <strong>Monica</strong>ns now and in the future.<br />
LEAD-BASED PAINT HAZARD REDUCTION STRATEGY<br />
An estimated 11,250 housing units occupied by low-income households in <strong>Santa</strong> <strong>Monica</strong> may contain leadbased<br />
paint. To reduce lead-based paint hazards, the <strong>City</strong> takes the following actions:<br />
• Report incidents <strong>of</strong> lead-poisoning to the United States Department <strong>of</strong> Housing and Urban<br />
Development.<br />
• Incorporate lead-based paint hazard reduction procedures into rehabilitation guidelines and include<br />
abatement costs as part <strong>of</strong> the subsidy.<br />
• Develop and distribute lead-based paint reduction and abatement information to all landlords,<br />
managers, tenants, or owner-occupants <strong>of</strong> rehabilitation properties, as well as to community groups.<br />
• Work cooperatively with its nonpr<strong>of</strong>it housing providers and community health organizations to<br />
provide educational material and identify potential sources <strong>of</strong> lead-poisoning in <strong>City</strong>-assisted<br />
affordable housing projects.<br />
• Provides housing quality standards to inspections <strong>of</strong> Section 8 units and assesses risks <strong>of</strong> exposure to leadbased<br />
paint for households with children six years <strong>of</strong> age and under.<br />
• Address blight in individual buildings by eliminating specific conditions that present health and safety<br />
hazards to the public.<br />
• Provide lead-based paint testing and remediation to existing single- and multi-family units, targeting<br />
low and moderate income households.<br />
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Lead-based paint testing and remediation is an eligible expense in the <strong>City</strong>’s Residential Repair Program,<br />
funded at $510,000 in FY 2013-14, which also provides funds for general rehabilitation <strong>of</strong> existing single- and<br />
multi-family units owned or rented by low-income households.<br />
PUBLIC HOUSING INITIATIVES<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> does not own or operate any public housing. The Housing Authority <strong>of</strong> the County<br />
<strong>of</strong> Los Angeles (HACOLA) owns and operates five public housing projects in <strong>Santa</strong> <strong>Monica</strong>. These projects<br />
contain a total <strong>of</strong> 81 units. HACOLA has resident managers at these projects and has in place a<br />
modernization program to improve the living environment <strong>of</strong> each project. HACOLA encourages<br />
participation <strong>of</strong> residents in the operation, management, and modernization <strong>of</strong> the public housing properties<br />
they own and operate.<br />
FAIR HOUSING<br />
Affirmatively Furthering Fair Housing<br />
Fair housing is crucial to ensuring that persons <strong>of</strong> all income levels have equal access to housing. HUD<br />
requires that jurisdictions receiving federal funds commit to affirmatively further fair housing. According to<br />
HUD, a fair housing impediment is considered to be “any actions, omissions, or decisions which have the<br />
effect <strong>of</strong> restricting housing choices or the availability <strong>of</strong> housing choices because <strong>of</strong> race, color, religion, sex,<br />
disability, familial status, or national origin.”<br />
Analysis <strong>of</strong> Impediments to Fair Housing Choice<br />
A key part to affirmatively further fair housing is the preparation <strong>of</strong> an Analysis <strong>of</strong> Impediments to Fair<br />
Housing Choice (AI) which was completed in 2012. The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>’s 2012 AI analyzed possible<br />
impediments to fair housing choice. The report is available at: http://www.smgov.net/departments/<br />
council/agendas/2012/20121127/s2012112709-B-1.pdf<br />
Actions Taken to Address Fair Housing Issues<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>’s Consumer Protection Unit in the <strong>City</strong> Attorney’s Office takes an active role in<br />
ensuring fair housing opportunities. The Consumer Protection Unit has two primary responsibilities:<br />
• Enforcing local, state, and federal laws to assure that consumers are treated fairly and lawfully.<br />
• Investigating complaints involving charges <strong>of</strong> discrimination based on race, age, children, marital<br />
status, sex, sexual orientation, national origin, disability, religion, or infection with AIDS.<br />
In addition to fair housing complaint investigation, the Consumer Protection Unit also educates landlords<br />
and the real estate community on fair housing laws, provides mediation services, and conducts community<br />
outreach throughout the year.<br />
The <strong>City</strong>’s Rent Control Board also monitors evictions and advises <strong>Santa</strong> <strong>Monica</strong> tenants <strong>of</strong> their rights. <strong>Santa</strong><br />
<strong>Monica</strong>’s Just Cause Eviction and Tenant Harassment laws, among others, help to assure that tenants are not<br />
discriminated against by building owners.<br />
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Other agencies, such as the <strong>Santa</strong> <strong>Monica</strong> Housing Authority, Legal Aid Foundation <strong>of</strong> Los Angeles,<br />
California Department <strong>of</strong> Fair and Equal Housing, and HUD also <strong>of</strong>fer assistance to persons with fair<br />
housing issues.<br />
New housing development subsidized by federal funding must have an Affirmative Fair Housing Marketing<br />
Plan, which sets the steps that developers or property managers must take to reach out to various populations<br />
during the property rental or sale. The Marketing Plan specifically targets potential tenants, underrepresented<br />
minorities, economically disadvantaged populations and low-income homebuyers to better integrate them<br />
into the community.<br />
INSTITUTIONAL STRUCTURE AND COORDINATION<br />
Implementation <strong>of</strong> CDBG and HOME funds are shared by the Community and Cultural Services<br />
Department (CCS) and the Housing and Economic Development Department (HED). The Human Services<br />
Division <strong>of</strong> the CCS oversees CDBG funding, while the Housing Division <strong>of</strong> HED oversees HOME<br />
funding. The two agencies work closely to ensure they meet shared project goals and take a consistent<br />
approach to administering projects. In addition, these divisions work with public agencies, for-pr<strong>of</strong>it, and<br />
non-pr<strong>of</strong>it organizations that play a part in the provision <strong>of</strong> affordable housing and community services.<br />
Social service delivery and housing production and rehabilitation in <strong>Santa</strong> <strong>Monica</strong> by non-pr<strong>of</strong>it agencies is<br />
coordinated through the <strong>City</strong>’s annual funding process. The <strong>City</strong> Council approves projects and programs<br />
that meet the <strong>City</strong>’s goals. In addition, there is the Westside Shelter and Hunger Coalition (WSHC) with<br />
representatives from agencies involved with emergency shelter, affordable housing, and supportive services<br />
on the westside <strong>of</strong> Los Angeles. WSHC meets regularly to coordinate efforts, including lobbying the county,<br />
state, and federal government. The <strong>City</strong> administers the Trades Intern Program to promote the active<br />
creation <strong>of</strong> jobs targeting low-income youth and adults.<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> has established a number <strong>of</strong> commissions staffed by interested citizens to monitor<br />
the needs <strong>of</strong> specific groups and advise the <strong>City</strong> Council on the best way to address these needs. They are the<br />
Housing Commission, Social Services Commission, Disabilities Commission, Planning Commission,<br />
Recreation and Parks Commission, Commission for the Senior Community, and Commission on the Status<br />
<strong>of</strong> Women.<br />
The <strong>City</strong> works closely with a network <strong>of</strong> other private and public entities that constitute a comprehensive<br />
network <strong>of</strong> resources. These include key public and quasi-public agencies, coalitions and groups, including the<br />
California Department <strong>of</strong> Housing and Community Development, California Employment Development<br />
Department, Federal Emergency Management Agency, Los Angeles County Department <strong>of</strong> Child and Family<br />
Services, Los Angeles County Department <strong>of</strong> Health, Los Angeles County Department <strong>of</strong> Mental Health, Los<br />
Angeles County Department <strong>of</strong> Public Social Services, Los Angeles Homeless Services Authority, Los<br />
Angeles County Housing Authority, <strong>Santa</strong> <strong>Monica</strong>-Malibu Unified School District, United Way, and Westside<br />
Council <strong>of</strong> Governments.<br />
The <strong>City</strong> also partners with over 30 local non-pr<strong>of</strong>it organizations to ensure the adequate provision <strong>of</strong><br />
housing and community services in <strong>Santa</strong> <strong>Monica</strong>. More information on the <strong>City</strong>’s non-pr<strong>of</strong>it partners can be<br />
found in the 2011-15 Human Services Grants Program plan.<br />
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ANTI-POVERTY STRATEGY<br />
The objectives and strategies <strong>of</strong> this Plan are generally focused on reducing the number <strong>of</strong> families in poverty,<br />
improving the quality <strong>of</strong> life for the poorest <strong>of</strong> families, and lessening the impacts <strong>of</strong> poverty. Strategies<br />
include those addressing affordable housing, special needs housing, homelessness, public facilities, public<br />
improvements, and economic development.<br />
The movement <strong>of</strong> people above the poverty line involves a variety <strong>of</strong> policies and programs that extend<br />
beyond providing opportunities for employment at a living wage. Access to education, transportation,<br />
childcare, and housing are key components that can assist persons to secure and retain economically selfsustaining<br />
employment. The <strong>City</strong> will employ a variety <strong>of</strong> strategies to help alleviate poverty, including efforts<br />
to stimulate economic growth and job opportunities, and to provide <strong>Santa</strong> <strong>Monica</strong> residents with the skills<br />
and abilities required to take advantage <strong>of</strong> those opportunities.<br />
On a macro scale, California attempts to fight poverty with the CalWORKS program, which is designed to<br />
move welfare recipients from dependency to self-sufficiency through employment, and to divert potential<br />
recipients from dependency. The program’s goal is to identify sufficient employment opportunities with<br />
sustainable income levels for people transitioning <strong>of</strong>f <strong>of</strong> welfare. Job-related education and training are<br />
provided through the county, private industry and educational institutions.<br />
The <strong>City</strong> will support programs that provide the following services that assist families and individuals living in<br />
poverty:<br />
• Job development and placement for internship, apprenticeship, and permanent employment<br />
opportunities with a focus on career-track jobs;<br />
• Educational enrichment, skill-building, and parental support to encourage children and youth to be<br />
healthy, succeed in school, avoid gang activity, and prepare for productive adulthood;<br />
• Legal services to include brief service and full representation in landlord/tenant matters, public<br />
benefits assistance, immigration, discrimination, consumer affairs, and other critical legal aid;<br />
• Independent living skills and assistance, and peer counseling to ensure full self-sufficiency and<br />
independence among elderly and disabled individuals;<br />
• Child care and after-school program subsidies, financial assistance, and assistance to working parents;<br />
and<br />
• Free health care, including mental health counseling, and supportive service assistance to extremely<br />
low, very low, and low-income <strong>Santa</strong> <strong>Monica</strong> residents including vital assistance to those with<br />
HIV/AIDS.<br />
The <strong>City</strong> will seek to leverage other federal, state, and local funds to assist homeless and near-homeless<br />
households with rental assistance, housing search and placement, and legal and credit repair services.<br />
The <strong>City</strong> has sought to create jobs through the establishment <strong>of</strong> development agreements executed prior to<br />
major commercial developments that give local preference to hiring <strong>Santa</strong> <strong>Monica</strong> residents. In addition to<br />
<strong>City</strong>-supported employment programs, <strong>City</strong> staff works with local agencies focused on employment to<br />
develop policies and programs that promote job placement and job creation targeting low-income youth and<br />
adults.<br />
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OBSTACLES TO MEETING UNDERSERVED NEEDS<br />
<strong>Santa</strong> <strong>Monica</strong>, like the rest <strong>of</strong> California and the U.S., has faced significant challenges related to the economic<br />
downturn. Unemployment rates are still above eight percent. <strong>City</strong> revenues are projected to be relatively flat<br />
as major tax sources, including sales, transient occupancy, utility users, property, and business license taxes,<br />
are impacted by the recession, and in some cases may take several years to recover. The <strong>City</strong> will continue to<br />
monitor the sequestration order issued on March 1, 2013 that cancelled approximately $85 billion in<br />
budgetary resources across the Federal Government and align resources to best serve priority populations.<br />
The recession and federal, state, and county funding cutbacks, including changes to the welfare system, have<br />
all impacted the <strong>City</strong>’s ability to address the social service and housing needs in <strong>Santa</strong> <strong>Monica</strong>.<br />
On December 29, 2011, the California Supreme Court issued an opinion to uphold Assembly Bill 26, which<br />
required the dissolution <strong>of</strong> redevelopment in California, effective February 1, 2012. This decision is<br />
devastating for <strong>Santa</strong> <strong>Monica</strong> as redevelopment was the principal funding source for the community’s priority<br />
projects including affordable housing. Over the past 10 years, the <strong>Santa</strong> <strong>Monica</strong> Redevelopment Agency<br />
invested nearly $300 million in the community, with approximately half <strong>of</strong> those funds used to finance 1,700<br />
units affordable to low income working families and individuals. The loss <strong>of</strong> redevelopment essentially<br />
destroys the <strong>City</strong>’s ability to continue its affordable housing program. Prior to dissolution, redevelopment<br />
funds <strong>of</strong> nearly $283 million were planned to be invested over the next five years to fund capital<br />
improvement projects and affordable housing. In terms <strong>of</strong> economic development and jobs, using federal<br />
ARRA stimulus standards, the new construction and rehabilitation projects associated with the $283 million<br />
investment would have created over 5,000 full-time-equivalent construction-related jobs. Given the loss <strong>of</strong><br />
redevelopment funds, the <strong>City</strong> will need to explore opportunities to secure other sources to address the<br />
community’s affordable housing needs.<br />
Discussions with <strong>City</strong> staff, non-pr<strong>of</strong>it service providers, and <strong>City</strong> commissions and boards provided insight<br />
into specific challenges to meeting underserved needs.<br />
INCREASE IN POPULATION NEEDING ASSISTANCE<br />
There are a greater number <strong>of</strong> people seeking assistance, including people who have not previously required<br />
housing or social service assistance. These households are not familiar with navigating the social service<br />
agency programs. In the past, these “first-time assistance” households needed only one-time or very shortterm<br />
assistance to recover economic stability. However, the current average length <strong>of</strong> job search has<br />
stretched to seven months, which means these households require longer-term assistance.<br />
LACK OF RESOURCES<br />
A common theme is that the resources available to address underserved needs are not sufficient and have<br />
declined with the economic downturn while need has increased. Resources at non-pr<strong>of</strong>it agencies are<br />
generally less than required to meet the level <strong>of</strong> need and include funding, staff, staff with the appropriate<br />
skills and knowledge, facilities, and leadership.<br />
Despite the very large amounts <strong>of</strong> funding put forth by the <strong>City</strong> and private sources in support <strong>of</strong> housing<br />
and community development activities, more funding is needed. Many organizations have experienced a drop<br />
in private donations as households impacted by the economic recession have less discretionary income to<br />
donate to nonpr<strong>of</strong>it groups.<br />
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REDUCTION IN SERVICES<br />
The <strong>City</strong>, State <strong>of</strong> California, and many non-pr<strong>of</strong>its face stagnating revenues or budget deficits. When other<br />
funding sources cannot be found to supplant those lost, service cutbacks are <strong>of</strong>ten the only way to balance<br />
budgets. The State <strong>of</strong> California has cut many social service programs, and is considering more and deeper<br />
cuts that will negatively impact low-income households.<br />
ACCESSIBILITY<br />
Lack <strong>of</strong> accessibility to services can be the result <strong>of</strong> lack <strong>of</strong> transportation for those in need, services that are<br />
not delivered in a culturally appropriate manner or in the appropriate language, burdensome prerequisites to<br />
accessing services (“red tape”), and services that are not provided in proximity to those in need.<br />
Lack <strong>of</strong> transportation is a particular challenge for those who do not drive, do not have a car, or are elderly<br />
and for persons with disabilities. Transportation to services needs to be appropriate for the population in<br />
need, such as “door-through-door” transit for the elderly and persons with disabilities. In 2012, the <strong>City</strong> was<br />
awarded $469,971 for three-years to expand door-through-door escorted transportation services to seniors<br />
and people with disabilities through the Federal Transit Administration’s New Freedom program.<br />
AWARENESS OF SERVICES<br />
The lack <strong>of</strong> awareness <strong>of</strong> the availability <strong>of</strong> services by those in need and a lack <strong>of</strong> knowledge about how to<br />
access services are significant obstacles to the provision <strong>of</strong> services. Outreach to those in need should be<br />
significant and culturally appropriate.<br />
The <strong>City</strong> will continue to assess the increased demand for affordable housing, employment, childcare, and<br />
other supportive services. To avoid duplication <strong>of</strong> efforts and improve the effectiveness <strong>of</strong> limited funding,<br />
the <strong>City</strong> will continue to work in collaboration with surrounding jurisdictions, non-pr<strong>of</strong>it organizations, and<br />
other community groups to coordinate and monitor the delivery <strong>of</strong> social services. This entails working with<br />
groups including, but not limited to, the Westside Shelter and Hunger Coalition, the Child Care & Early<br />
Education Task Force, the Domestic Violence Network, Cradle to Career, and others to identify and meet<br />
critical gaps in services. Fund leveraging, resource development, and coordination <strong>of</strong> services are critical<br />
activities that will be undertaken to address significant budget and programmatic constraints.<br />
CDBG AND HOME SPECIFIC REQUIREMENTS<br />
SF-424 AND CERTIFICATIONS<br />
The SF-424 (Application for Federal Assistance) and HUD-required CDBG and HOME certifications are<br />
included in Appendix E – SF-424 and Certifications.<br />
CDBG PROGRAM<br />
The Listing <strong>of</strong> Proposed Projects describes the activities with respect to all CDBG funds expected to be<br />
available during FY 2013-14. The <strong>City</strong> anticipates receiving approximately $87,000 in program income in<br />
FY 2013-14. This Plan includes CDBG estimates based on an anticipated 5% reduction to the FY 2012-13<br />
level <strong>of</strong> funding. If the <strong>City</strong>’s actual FY 2013-14 allocations are higher or lower than the estimates, CDBG<br />
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funding for capital projects, public service and administrative activities will be increased or decreased in order<br />
to comply with CDBG regulations.<br />
It is anticipated that 100 percent <strong>of</strong> the CDBG entitlement amount for FY 2013-14 will be used specifically<br />
for activities that benefit persons <strong>of</strong> low- and moderate-income. In addition, there are no "urgent need"<br />
activities, as defined by HUD, requested in CDBG funds for FY 2013-14.<br />
HOME PROGRAM<br />
The Listing <strong>of</strong> Proposed Projects describes the activities with respect to all HOME funds expected to be<br />
available during FY 2013-14. The <strong>City</strong> anticipates using approximately $77,000 in program income in<br />
FY 2013-14. This Plan includes HOME estimates based on an anticipated 5% reduction to the FY12/13 level<br />
<strong>of</strong> funding. If the <strong>City</strong>’s actual FY 2013-14 allocations are higher or lower than the estimates, HOME funding<br />
for capital projects, public service and administrative activities will be increased or decreased in order to<br />
comply with HOME regulations.<br />
The following topics cover <strong>Santa</strong> <strong>Monica</strong>'s specific regulations for HOME funded activities.<br />
Affirmative Marketing<br />
<strong>Santa</strong> <strong>Monica</strong> has adopted the following affirmative fair housing marketing guidelines for use <strong>of</strong> HOME<br />
funds:<br />
• No person shall on the grounds <strong>of</strong> race, color, national origin, religion, or sex be excluded from<br />
participating in, be denied the benefits <strong>of</strong>, or be subjected to discrimination under any program or<br />
activity funded in whole or in part with HOME funds.<br />
• The funded agency must establish an affirmative marketing and tenant selection plan for each project<br />
containing five or more units. The plan shall describe the marketing efforts and tenant selection<br />
procedures to attract eligible persons from all racial, ethnic, and gender groups in the housing market<br />
area to the available housing. The marketing and tenant selection plan shall be submitted with the<br />
loan application.<br />
Resale Provisions<br />
The <strong>City</strong> is exploring the opportunity to use funds for homeownership in the Mountain View Mobilehome<br />
Park and if funds are used to facilitate homeownership then resale provisions will apply. The <strong>City</strong> uses local<br />
funding sources (TORCA, Inclusionary Housing Trust Fund) for ownership programs, and has adopted<br />
resale provisions under these programs.<br />
Set-aside for Community Housing Development Organizations (CHDOs)<br />
The <strong>City</strong> has committed over 45% <strong>of</strong> its cumulative HOME allocation for investment in rental housing (new<br />
construction, acquisition and rehabilitation) developed by its CHDOs, exceeding the HOME program’s<br />
requirement to reserve at least 15 percent <strong>of</strong> each year’s HOME allocation for this purpose.<br />
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Matching Contribution<br />
The <strong>City</strong> has provided annual non-federal and state matching contributions well in excess <strong>of</strong> the required 25<br />
percent <strong>of</strong> the HOME funds draw for affordable housing and maintain a credit balance. Match contributions<br />
have traditionally been made from redevelopment housing funds, but since California State Legislature<br />
dissolved redevelopment agencies and the associated funding source during FY13-14, matching funds will<br />
come from other locally generated funds.<br />
On-Site Inspection Requirements<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> conducts on-site HOME property inspections regularly to ensure that HOME<br />
funded properties continue to meet or exceed applicable property standards. HOME units are required to be<br />
inspected by <strong>City</strong> staff according to the following schedule: 1-4 units every three years; 5-25 units every two<br />
years and 26 or more units annually. <strong>City</strong> staff visits a randomly selected group <strong>of</strong> units, completes an On-site<br />
HOME Property Inspection Report, and maintains the reports in the project files located in the Housing<br />
Division.<br />
Refinancing Policy<br />
The <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong>, per the <strong>City</strong> Council adopted HOME Housing Trust Fund Guidelines, provides<br />
long-term 55 year residual receipt loans to non-pr<strong>of</strong>it organizations to build new or acquire and rehabilitate<br />
property for affordable housing. Financing costs are allowed per the trust fund guidelines provided the<br />
“financing costs (are) as described in 24 CFR 92.206”. Requests for HOME financing and refinancing are<br />
reviewed by Housing staff and presented to the Housing Loan Committee to ensure all HOME loans are in<br />
conformance with 24 CFR Part 92.<br />
MONITORING<br />
The <strong>City</strong> currently uses various administrative mechanisms to track and monitor progress <strong>of</strong> HUD-funded<br />
projects and activities that are under its control and jurisdiction. The goal is to ensure that Consolidated Planrelated<br />
programs and activities are carried out in a timely manner in accordance with federal regulations and<br />
other statutory or regulatory requirements. The primary monitoring goals <strong>of</strong> the <strong>City</strong> are:<br />
• Provide technical assistance to grant administrators and staff.<br />
• Ensure activities are carried out in compliance with federal, state, and local requirements.<br />
• Identify deficiencies and promote corrections in order to improve the <strong>City</strong>’s ability to adhere to the<br />
Consolidated Plan objectives and annual goals.<br />
PROJECT SELECTION<br />
All Requests for Proposal (RFPs), loans, and contracts are reviewed carefully to ensure compliance with<br />
HUD and local requirements for program delivery, financial management, procurement, personnel matters,<br />
and other such requirements. Subrecipients are also required to enter into agreements that specify objectives,<br />
scope <strong>of</strong> work, applicable timelines and performance targets, budget, federal, state, and local regulatory<br />
requirements, and monitoring and reporting requirements.<br />
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PROGRAM/PROJECT MONITORING<br />
To ensure the accomplishments <strong>of</strong> the goals and objectives, the <strong>City</strong> is involved with administration and<br />
coordination <strong>of</strong> all <strong>City</strong>-funded programs and related activities. An inter-departmental team, which consists <strong>of</strong><br />
project managers and relevant <strong>City</strong> staff, meets quarterly to monitor the progress <strong>of</strong> CDBG- and HOMEfunded<br />
projects. <strong>City</strong> staff in a number <strong>of</strong> departments and divisions, including Human Services, Housing and<br />
Economic Development, Engineering, and other key <strong>of</strong>fices, provides technical assistance as needed to<br />
subrecipients.<br />
During project implementation, subrecipients are required to submit periodic progress reports detailing<br />
project progress toward objectives, problems and/or resolution to meeting goals, and quantitative<br />
participation data by ethnicity, income, and household status. Periodic reports and payment requests are<br />
reviewed for compliance with the project agreement, budget consistency, and documentation <strong>of</strong> expenditures.<br />
Subrecipients are advised <strong>of</strong> any procedural errors and/or ineligible activities, and provided with technical<br />
assistance as needed.<br />
Upon project completion, project sponsors are required to submit completion reports identifying<br />
program/project accomplishments, including number <strong>of</strong> persons or households served, ethnicity, and income<br />
level.<br />
Projects are subject to an on-site performance and financial audit review on a selective basis during project<br />
implementation or upon completion <strong>of</strong> a project. Priority for on-site performance and/or audit review is<br />
given to high-risk programs.<br />
ONGOING MONITORING OF HOUSING PROJECTS<br />
Affordable housing development projects must submit annual compliance reports throughout the period <strong>of</strong><br />
required affordability. These reports are designed to ensure continued compliance with federal regulations,<br />
affordability and use restrictions, and other requirements as specified in project loan documents. In addition,<br />
all HOME and CDBG-assisted projects will be subject to periodic on-site inspections to ensure continued<br />
compliance with federal housing quality standards.<br />
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APPENDIX A – FEDERAL, STATE AND<br />
LOCAL RESOURCES
APPENDIX A<br />
FEDERAL, STATE, AND LOCAL RESOURCES<br />
<strong>Santa</strong> <strong>Monica</strong> has access to a variety <strong>of</strong> federal, state, and local resources to achieve its housing and<br />
community development priorities. Specific funding resources will be utilized based on the opportunities and<br />
constraints <strong>of</strong> each particular project or program. The table below identifies the potential sources <strong>of</strong> funding<br />
available to carry out housing and community development activities in <strong>Santa</strong> <strong>Monica</strong>.<br />
The <strong>City</strong> receives entitlement grants from the U.S. Department <strong>of</strong> Housing and Urban Development (HUD)<br />
through the HOME Investment Partnerships Program (HOME) and the Community Development Block<br />
Grant (CDBG) Program, and administers a variety <strong>of</strong> HUD-assisted programs including Housing Choice<br />
(Section 8) Vouchers, Family Self-Sufficiency, and Shelter Plus Care programs. In addition, the <strong>City</strong> provides<br />
funding to housing and community development activities through its own local resources. The table below<br />
identifies the CDBG and HOME funds available to <strong>Santa</strong> <strong>Monica</strong> for FY 2013-14.<br />
The <strong>City</strong> will continue to support a wide range <strong>of</strong> housing and community development activities in FY 2013-<br />
14. To the extent possible, the <strong>City</strong> will seek to leverage funding from other public and private entities to<br />
strengthen programs and activities established in the Consolidated Plan and this Action Plan. Local funding<br />
sources, including redevelopment set-aside, housing trust funds, and private conventional loans will be used<br />
as the local match for the <strong>City</strong>’s HOME program funds.<br />
PUBLIC AND PRIVATE RESOURCES AVAILABLE FOR<br />
HOUSING AND COMMUNITY DEVELOPMENT ACTIVITIES<br />
Program Name Description Eligible Activities<br />
Federal Programs<br />
Community<br />
Block Grant<br />
HOME<br />
Development<br />
Section 8<br />
Rental Assistance Program<br />
Shelter Plus Care Program<br />
Grants awarded to the <strong>City</strong> on a formula<br />
basis for housing and community<br />
development activities. The <strong>City</strong> estimates<br />
receiving $956,705 from the federal<br />
Community Development Block Grant<br />
(CDBG) program<br />
Flexible grant program awarded to the <strong>City</strong><br />
on a formula basis for housing activities.<br />
The <strong>City</strong> estimates receiving $471,808 in<br />
HOME Investment Partnerships Program<br />
(HOME) funds.<br />
Rental assistance payments to owners <strong>of</strong><br />
private market rate units on behalf <strong>of</strong> very<br />
low-income tenants.<br />
Vouchers for rental assistance that are<br />
<strong>of</strong>fered with support services to homeless<br />
with disabilities. Rental assistance can be:<br />
Section 8 Moderate Rehabilitation (SRO)–<br />
project-based rental assistance<br />
administered by the local PHA with state<br />
or local government application.<br />
• Acquisition<br />
• Rehabilitation<br />
• Home buyer assistance<br />
• Economic development<br />
• Homeless assistance<br />
• Public services<br />
• Acquisition<br />
• Rehabilitation<br />
• Home buyer assistance<br />
• Rental assistance<br />
• Rental assistance<br />
• Rental assistance<br />
• Homeless assistance<br />
• Support services<br />
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APPENDIX A<br />
Program Name Description Eligible Activities<br />
Sponsor-Based Rental Assistance - provides<br />
assistance through an applicant to a private<br />
non-pr<strong>of</strong>it sponsor who wins or leases<br />
dwelling units in which participating<br />
residents reside.<br />
Tenant-Based Rental Assistance (TBRA) -<br />
vouchers for rental assistance.<br />
Project-Based Rental Assistance - grants to<br />
provide rental assistance through contracts<br />
between grant recipients and owners <strong>of</strong><br />
buildings.<br />
Section 108 Loan Provides loan guarantee to CDBG<br />
entitlement jurisdictions for pursuing large<br />
capital improvement or other projects. The<br />
jurisdictions must pledge it to future CDBG<br />
allocations for repayment <strong>of</strong> the loan.<br />
Maximum loan amount can be up to five<br />
times the entitlement jurisdiction’s most<br />
recent approved annual allocation.<br />
Maximum loan term is 20 years.<br />
Supportive<br />
Program (SHP)<br />
Housing<br />
Serial Inebriate Program<br />
(SIP)<br />
Federal Transit<br />
Administration New<br />
Freedom Program<br />
Grants for development <strong>of</strong> supportive<br />
housing and support services to assist<br />
homeless persons in the transition from<br />
homelessness.<br />
Outreach and intervention program to<br />
engage chronically homeless serial<br />
inebriates into housing and services.<br />
Provides permanent housing for residents<br />
willing to participate in treatment, and<br />
works to reduce the number <strong>of</strong> contacts<br />
these individuals have with local emergency<br />
services.<br />
Funding in the amount <strong>of</strong> $469,971 over<br />
three years was awarded to the <strong>City</strong> <strong>of</strong><br />
<strong>Santa</strong> <strong>Monica</strong> (through the Los Angeles<br />
Metropolitan Transportation Authority) for a<br />
door-through-door paratransit program for<br />
persons with disabilities, including older<br />
adults. The program will provide escorted<br />
rides weekdays to and from locations within<br />
the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong> and to selected<br />
healthcare providers outside <strong>of</strong> the <strong>City</strong>.<br />
• Acquisition<br />
• Rehabilitation<br />
• Home buyer assistance<br />
• Economic development<br />
• Homeless assistance<br />
• Public services<br />
• Transitional housing<br />
• Permanent housing for<br />
persons with disabilities<br />
• Supportive housing<br />
• Support services<br />
• Safe havens<br />
• Housing<br />
• Homeless assistance<br />
• Ride attendants<br />
• Vehicle operation and<br />
maintenance<br />
• Vehicle acquisition<br />
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APPENDIX A<br />
Program Name Description Eligible Activities<br />
State Programs<br />
School Facilities Program<br />
Multifamily<br />
Programs (MHP)<br />
Housing<br />
California Housing Finance<br />
Agency (CalHFA)<br />
Low-Income Housing Tax<br />
Credits (LIHTC)<br />
Local Programs<br />
Tenant Ownership Rights<br />
Charter Amendment<br />
(TORCA)<br />
Shared<br />
Appreciation Loan Program<br />
Affordable<br />
Production<br />
(AHPP)<br />
Housing<br />
Program<br />
A down payment assistance program using<br />
school facility fees collected from developers.<br />
Low-income buyers <strong>of</strong> affordable housing<br />
are eligible to receive down payment<br />
assistance from the State.<br />
Tax-exempt bonds (Proposition 46) provide<br />
below-market interest rate financing to<br />
builders and developers <strong>of</strong> multiple-family<br />
and elderly rental housing. For public<br />
entities, for-pr<strong>of</strong>it, and non-pr<strong>of</strong>it agencies.<br />
CalHFA sells tax-exempt bonds (Proposition<br />
46) to make below market loans to first time<br />
homebuyers. Program operates through<br />
participating lenders who originate loans for<br />
CalHFA purchase.<br />
Federal and State tax credits enable<br />
developers to raise equity through the sale<br />
<strong>of</strong> tax benefits to large investors for the<br />
construction <strong>of</strong> affordable rental housing.<br />
TORCA tax revenues shall be used for<br />
homeownership and for the development <strong>of</strong><br />
low/mod income rental housing.<br />
Developers <strong>of</strong> market-rate housing may<br />
satisfy their AHPP requirement by providing<br />
on-site or <strong>of</strong>f-site units at below market<br />
rents to low-income households or deeding<br />
land to <strong>City</strong> or payment <strong>of</strong> an affordable<br />
housing fee.<br />
Development Agreements <strong>City</strong> receives revenues for affordable<br />
housing as part <strong>of</strong> negotiated development<br />
agreements.<br />
Office Mitigation Local program requiring developers <strong>of</strong><br />
commercial <strong>of</strong>fice space to either provide<br />
low-income housing or pay an in-lieu fee.<br />
• Down payment assistance<br />
• New construction,<br />
rehabilitation, and<br />
preservation <strong>of</strong> permanent<br />
and transitionalrental<br />
housing for low-income<br />
households<br />
• First-time home buyer<br />
assistance<br />
• Multi-family new<br />
construction and<br />
preservation loans<br />
• Mortgage insurance<br />
• New construction<br />
• Acquisition and<br />
rehabilitation <strong>of</strong> eligible<br />
projects<br />
• Acquisition<br />
• Rehabilitation<br />
• New construction<br />
• Home ownership loans<br />
• New construction<br />
• Acquisition<br />
• Rehabilitation<br />
• New construction<br />
• Child care services<br />
• Acquisition<br />
• Rehabilitation<br />
• New construction<br />
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APPENDIX A<br />
Program Name Description Eligible Activities<br />
General Fund<br />
County Proposition A<br />
Funds<br />
Private Resources/Financing Programs<br />
Federal National Mortgage<br />
Association (Fannie Mae)<br />
Federal Home Loan Bank<br />
Affordable Housing<br />
Program (AHP)<br />
The <strong>City</strong>’s General Fund is funded by a<br />
number <strong>of</strong> taxes, and can be used to<br />
support activities that meet the <strong>City</strong>’s goals.<br />
Approved by Los Angeles County voters in<br />
1980. It increased the sales tax by 0.5 cents<br />
for purchases within the County. The Prop<br />
A monies are used to fund public transit<br />
within the County.<br />
Loan applicants apply to participating<br />
lenders for the following programs:<br />
Fixed rate mortgages issued by private<br />
mortgage insurers.<br />
Mortgages, which fund the purchase and<br />
rehabilitation <strong>of</strong> a home.<br />
Low down-payment mortgages for Single-<br />
Family Homes in underserved low-income<br />
and minority communities.<br />
Direct subsidies to non-pr<strong>of</strong>it and for-pr<strong>of</strong>it<br />
developers and public agencies for<br />
affordable low income ownership and rental<br />
projects.<br />
• Social service delivery<br />
• Emergency housing<br />
assistance<br />
• Public transit<br />
• Home buyer assistance<br />
• Rehabilitation<br />
• New construction<br />
Freddie Mac Home Works - Provides 1st and 2nd<br />
mortgages that include rehabilitation loan.<br />
<strong>City</strong> provides gap financing for<br />
rehabilitation component.<br />
Households earning up to 80% MFI qualify.<br />
Lease Purchase<br />
Program<br />
The <strong>City</strong> could participate in a Joint Powers<br />
Authority that issues tax-exempt bonds.<br />
Bonds enable <strong>City</strong> to purchase homes for<br />
households earning up to 140% MFI. JPA<br />
pays 3% down and closing costs. Lease<br />
purchasers make monthly payments<br />
equivalent to mortgage payments with the<br />
option to buy after three years.<br />
• Home buyer assistance<br />
combined with<br />
rehabilitation<br />
• Home buyer assistance<br />
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APPENDIX B – PUBLIC PARTICIPATION
APPENDIX B<br />
PUBLIC PARTICIPATION<br />
Copies <strong>of</strong> the public hearing notices are available at the <strong>City</strong>’s Community and Cultural Services Department,<br />
Human Services Division. The <strong>City</strong> will incorporate any comments received during the public comment<br />
period.<br />
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APPENDIX C – PROPOSED PROJECTS
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
AH-1.2<br />
Project Title<br />
Tenant-Based Rental Assistance (TBRA)<br />
Description<br />
The HOME TBRA program provides rental subsidies for senior/disabled homeless persons, victims <strong>of</strong> domestic<br />
violence, and persons at risk <strong>of</strong> homelessness. Qualified applicants are referred by local service agencies and<br />
qualified for the HOME program by the <strong>Santa</strong> <strong>Monica</strong> Housing Authority.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
AH-1.2 13-01<br />
HUD Matrix Code<br />
HOME Citation<br />
05S 92.209<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Households assisted 25<br />
Local ID<br />
Units Upon Completion<br />
13-01 25<br />
Funding Sources:<br />
CDBG<br />
ESG<br />
HOME $310,000<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $310,000<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
AH-2.3<br />
Project Title<br />
Residential Repair Program<br />
Description<br />
The <strong>City</strong> provides financial assistance for a variety <strong>of</strong> repairs through two programs: (1) the Multi-Family Rental<br />
Rehabilitation Program for owners <strong>of</strong> multi-family rental properties occupied by low-income tenants; and (2) the<br />
Owner-Occupied Rehabilitation Program for low-income owners. Eligible repairs include such items as health<br />
and safety code violations, testing and remediation <strong>of</strong> environmental hazards such as lead-based paint, unsafe or<br />
inoperable electrical wiring or fixtures, unsanitary plumbing fixtures, leaking ro<strong>of</strong>s, peeling interior/exterior paint,<br />
accessibility improvements such as ramps, and other general repairs.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
AH-2.3 13-02<br />
HUD Matrix Code<br />
CDBG Citation<br />
14B 570.202<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMH<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Units Rehabilitated 30<br />
Local ID<br />
Units Upon Completion<br />
13-02 30<br />
Funding Sources:<br />
CDBG<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds $423,000<br />
Assisted Housing<br />
PHA<br />
Other Funding-Program Income $87,000<br />
Total $510,000<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
AH-2.1 and AH-2.2<br />
Project Title<br />
Mobile Home Improvement Program<br />
Description<br />
Facilitate the purchase and installation <strong>of</strong> manufactured homes (mobile homes) at Mountain View Mobile Home<br />
Park for either rental or ownership opportunities.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
Mountain View Mobile Home Park<br />
Objective Number<br />
Project ID<br />
AH-2.2 13-03<br />
HUD Matrix Code<br />
HOME Citation<br />
01 92.252 & 92.254<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Housing unit provided 4<br />
Local ID<br />
Units Upon Completion<br />
13-03 4<br />
Funding Sources:<br />
CDBG<br />
ESG<br />
HOME $107,000<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds $288,429<br />
Assisted Housing<br />
PHA<br />
Program Income $77,000<br />
Total $472,429<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
SP-3.1<br />
Project Title<br />
Home Access Program<br />
Description<br />
The Home Access Program is funded with CDBG funds. The program provides services (occupational therapy<br />
evaluations, installation and minor structural modifications) and equipment (“assistive technology” like handrails,<br />
ramps and doorbells that flash instead <strong>of</strong> ringing) to low-income renters in <strong>Santa</strong> <strong>Monica</strong> who have a disability<br />
and need home modifications to allow them to stay in their rented homes. The program increases the stock <strong>of</strong><br />
accessible housing in <strong>Santa</strong> <strong>Monica</strong> through the provision <strong>of</strong> modifications for people with disabilities.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
SP-3.1 13-04<br />
HUD Matrix Code<br />
CDBG Citation<br />
14A 570.202<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMC<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Persons assisted 30<br />
Local ID<br />
Units Upon Completion<br />
13-04 30<br />
Funding Sources:<br />
CDBG $37,377<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $37,377<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
H-1.2<br />
Project Title<br />
Chronically Homeless Program<br />
Description<br />
The <strong>City</strong> will provide case management services to at-risk, very-low income Shelter Plus Care and Section 8 Self<br />
Sufficiency clients. This program will improve the decent housing opportunities available to low income <strong>Santa</strong><br />
<strong>Monica</strong> residents by providing assistance to homeless persons and assisting them in obtaining affordable housing.<br />
Provide assertive outreach and intensive case management to chronically homeless persons in the CHP Assertive<br />
Case Management and Homeless Community Court Programs.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
H-1.2 13-05<br />
HUD Matrix Code<br />
CDBG Citation<br />
05 570.201(e)<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMC<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Persons assisted 50<br />
Local ID<br />
Units Upon Completion<br />
13-05 50<br />
Funding Sources:<br />
CDBG $72,469<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $72,469<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
H-1.2<br />
Project Title<br />
Family Self Sufficiency Program<br />
Description<br />
The <strong>City</strong> will provide case management services to at-risk, very-low income Shelter Plus Care and Section 8 Self<br />
Sufficiency clients. This program will improve the decent housing opportunities available to low-income <strong>Santa</strong><br />
<strong>Monica</strong> residents by providing assistance to persons at risk <strong>of</strong> becoming homeless and assisting them in obtaining<br />
affordable housing. This program assists families participating in the Housing Choice Voucher program in<br />
achieving economic independence and securing a living wage within five years.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
H-1.2 13-06<br />
HUD Matrix Code<br />
CDBG Citation<br />
05 570.201(e)<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMC<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Persons assisted 130<br />
Local ID<br />
Units Upon Completion<br />
13-06 130<br />
Funding Sources:<br />
CDBG $64,174<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $64,174<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
H-1.2<br />
Project Title<br />
Shelter Plus Care Program<br />
Description<br />
The <strong>City</strong> will provide case management services to at-risk, very-low income Shelter Plus Care and Section 8 Self<br />
Sufficiency clients. This program will improve the decent housing opportunities available to low income <strong>Santa</strong><br />
<strong>Monica</strong> residents by providing assistance to persons at risk <strong>of</strong> becoming homeless and assisting them in obtaining<br />
affordable housing. This program assists homeless persons with disabilities to obtain and maintain housing<br />
through the provision <strong>of</strong> comprehensive case management services and rental assistance.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
H-1.2 13-07<br />
HUD Matrix Code<br />
CDBG Citation<br />
05 570.201(e)<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMC<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Persons assisted 10<br />
Local ID<br />
Units Upon Completion<br />
13-07 10<br />
Funding Sources:<br />
CDBG $3,487<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $3,487<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
H-1.2<br />
Project Title<br />
Spectrum<br />
Description<br />
The <strong>City</strong> will provide case management services to at-risk, very-low income Shelter Plus Care and Section 8 Self<br />
Sufficiency clients. This program will improve the decent housing opportunities available to low income <strong>Santa</strong><br />
<strong>Monica</strong> residents by providing assistance to persons at risk <strong>of</strong> becoming homeless and assisting them in obtaining<br />
affordable housing. This program provides case management, vocational training, benefits assistance, permanent<br />
housing placement, and other services to chronically homeless persons with mental illness.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
H-1.2 13-08<br />
HUD Matrix Code<br />
CDBG Citation<br />
05 570.201(e)<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMC<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Persons assisted 50<br />
Local ID<br />
Units Upon Completion<br />
13-08 50<br />
Funding Sources:<br />
CDBG $16,426<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $16,426<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
CD-10.1, CD-12.2<br />
Project Title<br />
Accessible Beach Walkway<br />
Description<br />
Construction <strong>of</strong> an accessible beach walkway at South Beach Park to go beyond ADA requirements to maximize<br />
accessibility and inclusion <strong>of</strong> children with various types <strong>of</strong> disabilities.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
South Beach Park<br />
Objective Number<br />
Project ID<br />
CD-10.1, CD-12.2 13-09<br />
HUD Matrix Code<br />
CDBG Citation<br />
03 570.201(c)<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMC<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Facility project completed 1<br />
Local ID<br />
Units Upon Completion<br />
13-09 1<br />
Funding Sources:<br />
CDBG $154,000<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $154,000<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
PA-1.1<br />
Project Title<br />
CDBG Program Administration<br />
Description<br />
Administer the CDBG program in compliance with federal regulations and local policies<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
PA-1.1 13-10<br />
HUD Matrix Code<br />
CDBG Citation<br />
21A 570.206<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
n/a<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
n/a<br />
n/a<br />
Local ID<br />
Units Upon Completion<br />
13-10 n/a<br />
Funding Sources:<br />
CDBG $208,741<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $208,741<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2008)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
CD-12.1<br />
Project Title<br />
Facility Improvements to Ken Edwards Center<br />
Description<br />
The <strong>City</strong> will fund electrical facility improvements to upgrade and improve existing community<br />
facility to meet the needs <strong>of</strong> the community, especially persons <strong>of</strong> low and moderate income and<br />
those with special needs.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
CD-12.1 13-11<br />
HUD Matrix Code<br />
CDBG Citation<br />
03 570.201(c)<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMC<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Public facility upgraded 1<br />
Local ID<br />
Units Upon Completion<br />
11-10 3<br />
Funding Sources:<br />
CDBG $70,000<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds (CDBG) $30,800<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $100,800<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
PA-1.1<br />
Project Title<br />
HOME Program Administration<br />
Description<br />
Administer the HOME program in compliance with federal regulations and local policies.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
<strong>City</strong>wide<br />
Objective Number<br />
Project ID<br />
PA-1.1 13-12<br />
HUD Matrix Code<br />
HOME Citation<br />
21A 92.207<br />
Type <strong>of</strong> Recipient<br />
HOME National Objective<br />
<strong>City</strong><br />
n/a<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
n/a<br />
n/a<br />
Local ID<br />
Units Upon Completion<br />
13-12 n/a<br />
Funding Sources:<br />
CDBG<br />
ESG<br />
HOME $54,808<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds<br />
Assisted Housing<br />
PHA<br />
Other Funding<br />
Total $54,808<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
CD-10.1<br />
Project Title<br />
Park Restroom Accessibility Improvements<br />
Description<br />
Rehabilitation <strong>of</strong> two park restroom buildings to bring restrooms into compliance with the American with<br />
Disabilities Act (ADA).<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
Hotchkiss and Marine Park Restrooms.<br />
Objective Number<br />
Project ID<br />
CD-10.1 13-13<br />
HUD Matrix Code<br />
CDBG Citation<br />
03 570.201(c)<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMC<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Public Facilities Upgraded 2<br />
Local ID<br />
Units Upon Completion<br />
13-13 2<br />
Funding Sources:<br />
CDBG $321,331<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds $378,669<br />
Assisted Housing<br />
PHA<br />
Program Income<br />
Total $700,000<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
U.S. Department <strong>of</strong> Housing OMB Approval No. 2506-0117<br />
and Urban Development (Exp. 8/31/2014)<br />
Table 3C<br />
Consolidated Plan Listing <strong>of</strong> Projects<br />
Jurisdiction’s Name<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Priority Need<br />
CD-12.1<br />
Project Title<br />
Alley Improvement Project<br />
Description<br />
Improvements to alleys in identified low to moderate income areas.<br />
Objective category: Suitable Living Environment Decent Housing Economic Opportunity<br />
Outcome category: Availability/Accessibility Affordability Sustainability<br />
Location/Target Area<br />
Low/Mod Income Areas in the <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
Objective Number<br />
Project ID<br />
CD-12.1 13-14<br />
HUD Matrix Code<br />
CDBG Citation<br />
03 570.201(c)<br />
Type <strong>of</strong> Recipient<br />
CDBG National Objective<br />
<strong>City</strong><br />
LMC<br />
Start Date (mm/dd/yyyy) Completion Date (mm/dd/yyyy)<br />
07/01/2013 06/30/2014<br />
Performance Indicator Annual Units<br />
Infrastrucutre Upgraded 5<br />
Local ID<br />
Units Upon Completion<br />
13-14 5<br />
Funding Sources:<br />
CDBG<br />
ESG<br />
HOME<br />
HOPWA<br />
Total Formula<br />
Prior Year Funds $297,212<br />
Assisted Housing<br />
PHA<br />
Program Income<br />
Total $297,212<br />
The primary purpose <strong>of</strong> the project is to help: The Homeless Persons with HIV/AIDS Persons with Disabilities Public Housing Needs
APPENDIX D – HUD TABLES
APPENDIX D<br />
Homeless<br />
Table H-1 (HUD Table 1A) reports data collected from the Los Angeles Homeless Services Authority<br />
(LAHSA) 2008 Continuum <strong>of</strong> Care Report. The data reflects current inventories, populations, and unmet<br />
needs for Los Angeles County as a whole. There were 14,172 beds available for individual homeless persons.<br />
There were 7,420 family beds and 2,234 family units, which provide shelter for 9,624 homeless families. As<br />
presented in<br />
Data for Part 1 and Part 2 <strong>of</strong> Table H-1 comes from 2007 point-in-time homeless counts for all<br />
communities in Los Angeles County. According to the Continuum <strong>of</strong> Care Report, there are 6,238 homeless<br />
families (909 sheltered and 5,329 unsheltered) with children. Of the 68,608 homeless persons identified,<br />
roughly 76 percent (51,965 persons) are single individuals without children and 24 percent (16,643 persons)<br />
are in families with children.<br />
The largest subgroup <strong>of</strong> homeless persons in the county are those with chronic substance abuse problems<br />
(24,740). The second largest subgroup are those with serious mental illness (24,504), followed by chronically<br />
homeless persons (22,376). As shown in Part 2 <strong>of</strong> Table H-1, the majority <strong>of</strong> subgroup populations are<br />
unsheltered.<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
2013-14 Action Plan<br />
March 2013 DUNS # 074152596<br />
D-1
APPENDIX D<br />
TABLE H-1<br />
HOMELESS POPULATIONS, LOS ANGELES COUNTY (HUD 1A)<br />
Individuals<br />
Beds<br />
Persons in Families With Children<br />
Beds<br />
Part 1: Homeless Population<br />
Continuum <strong>of</strong> Care: Housing Gap Analysis Chart<br />
Current<br />
Inventory<br />
Under<br />
Development<br />
Unmet Need/<br />
Gap<br />
Emergency Shelter 3,436 n/a n/a<br />
Transitional Housing 5,580 n/a n/a<br />
Permanent Supportive Housing 5,156 n/a n/a<br />
Total 14,172 n/a n/a<br />
Emergency Shelter 1,359 n/a n/a<br />
Transitional Housing 4,442 n/a n/a<br />
Permanent Supportive Housing 3,853 n/a n/a<br />
Total 9,654 n/a n/a<br />
Continuum <strong>of</strong> Care: Homeless Population and Subpopulations<br />
Sheltered<br />
Emergency Transitional Total<br />
Unsheltered<br />
Total<br />
Number <strong>of</strong> Families with Children<br />
(Family Households): 297 612 909 5,329 6,238<br />
1. Number <strong>of</strong> Persons in<br />
Families with Children 1,033 1,992 3,025 13,618 16,643<br />
2. Number <strong>of</strong> Single<br />
Individuals and Persons in<br />
Households without children<br />
Total<br />
(Add Lines 1 & 2)<br />
Part 2: Homeless<br />
Subpopulations<br />
Persons<br />
4,492 3,925 8,417 43,548 51,965<br />
5,525 5,917 11,442 57,166 68,608<br />
a. Chronically Homeless 1,604 20,772 22,376<br />
b. Seriously Mentally Ill 4,382 20,122 24,504<br />
c. Chronic Substance Abuse 2,567 22,173 24,740<br />
d. Veterans 1,712 6,741 8,453<br />
e. Persons with HIV/AIDS 263 972 1,235<br />
f. Victims <strong>of</strong> Domestic<br />
Violence<br />
g. Unaccompanied Youth<br />
(Under 18)<br />
1,190 6,002 7,192<br />
218 1,070 1,288<br />
Source: 2008 Continuum <strong>of</strong> Care Report: Point-in-Time Homeless Population and Subpopulation; HUD’s 2008 Continuum <strong>of</strong> Care<br />
HAP Homeless Inventory Chart Report<br />
2013-14 Action Plan <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
DUNS # 074152596 March 2013<br />
D-2
APPENDIX D<br />
TABLE H-2<br />
PRIORITIES FOR SPECIAL NEEDS POPULATION (HUD 1B)*<br />
Special Need Subpopulation<br />
Priority<br />
Unmet<br />
Need<br />
Annual<br />
Amount<br />
Multi-Year<br />
Goals<br />
Annual<br />
Goals<br />
Elderly High 2,908 $10,000 50 10<br />
Frail Elderly High 1,454 $5,000 25 5<br />
Persons with Alcohol/Other Drug<br />
Abuse<br />
Medium 200 ***<br />
Victims <strong>of</strong> Domestic Violence Medium 185 ***<br />
Homeless/At Risk High 742 $1,090,000 3,200 640<br />
Physically/Developmentally<br />
Disabled**<br />
High 1,270 $600,000 1,250 250<br />
Severe Mental Illness High 1,843 ***<br />
Female-Headed Households Low 598 - - -<br />
Persons with HIV/AIDS Low 250 - - -<br />
*The <strong>City</strong> provides over $7 million dollars in <strong>City</strong> funding (non-CDBG and HOME funds) for special needs programs.<br />
** Includes Street and beach restroom improvements.<br />
*** Activities serving these populations are funded by non-CDBG and HOME funds.<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
2013-14 Action Plan<br />
March 2013 DUNS # 074152596<br />
D-3
APPENDIX D<br />
TABLE H-3<br />
PRIORITY HOUSING NEEDS/INVESTMENT PLAN (HUD 2A/3B)<br />
Priority<br />
Need<br />
5-Yr.<br />
Goal<br />
Planned<br />
Yr. 1<br />
Goal<br />
Planned<br />
Yr. 2<br />
Goal<br />
Planned<br />
Yr. 3<br />
Goal<br />
Planned<br />
Yr. 4<br />
Goal<br />
Planned<br />
Yr. 5<br />
Goal<br />
Planned<br />
Renters<br />
0%–30% <strong>of</strong> MFI High 129 26 26 27 25 25<br />
31%– 50% <strong>of</strong> MFI High 165 33 33 33 33 33<br />
51%–80% <strong>of</strong> MFI Medium 56 11 11 11 11 12<br />
Owners<br />
0 %–30% <strong>of</strong> MFI Medium 10 2 2 2 2 2<br />
31%–50% <strong>of</strong> MFI High 10 2 2 2 2 2<br />
51%–80% <strong>of</strong> MFI Medium 40 8 8 8 8 8<br />
Homeless<br />
Individuals High 1,600 320 320 320 320 320<br />
Families High 1,600 320 320 320 320 320<br />
Non-Homeless Special<br />
Needs<br />
Elderly High 50 10 10 10 10 10<br />
Frail Elderly High 25 5 5 5 5 5<br />
Severe Mental Illness Low 0 0 0 0 0 0<br />
Physical/Developmental<br />
Disability<br />
Alcohol or Drug<br />
Addiction<br />
High 125 25 25 25 25 25<br />
Medium 0 0 0 0 0 0<br />
HIV/AIDS Low 0 0 0 0 0 0<br />
Victims <strong>of</strong> Domestic<br />
Violence<br />
Medium 0 0 0 0 0 0<br />
Renter 350 70 70 70 70 70 70<br />
Owner 60 12 12 12 12 12 12<br />
2013-14 Action Plan <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
DUNS # 074152596 March 2013<br />
D-4
APPENDIX D<br />
TABLE H-4<br />
PRIORITY COMMUNITY DEVELOPMENT NEEDS AND GOALS (HUD 2B)*<br />
Activity<br />
Public Facility Needs (projects)<br />
Priority<br />
Unmet<br />
Priority<br />
Need<br />
Dollars to<br />
Address<br />
Unmet<br />
Priority<br />
Need<br />
Annual<br />
Goals<br />
Multi-Year<br />
Goals<br />
Senior Center Medium 1 $20,000 1 1<br />
Handicapped Center Medium 1 $10,000 1 1<br />
Homeless Facilities Medium 1 0 0<br />
Youth Centers Medium 1 $25,000 1 1<br />
Child Care Center Medium 1 $15,000 1 1<br />
Health Facilities Medium 2 $35,000 1 1<br />
Parks and/or Recreation<br />
Facilities<br />
High 5 $700,00 6 6<br />
Parking Facilities Low - - - -<br />
Non-Residential Historic<br />
Preservation<br />
Medium 1 $20,000 1 1<br />
Other Public Facility<br />
Needs<br />
High 1 $45,000 1 1<br />
Public Improvements (projects)<br />
Water/Sewer<br />
Improvements<br />
Medium 2 $41,500 1 2<br />
Street Improvements High 5 $83,000 1 3<br />
Sidewalks High 5 $83,000 1 5<br />
Solid Waste Disposal<br />
Improvements<br />
Low - - - -<br />
Flood Drain Improvements Low - - - -<br />
Other Infrastructure<br />
Needs<br />
Medium 1 $41,500 1 2<br />
Public Services (persons)<br />
Senior Services High 3,000 $15,000 1 5<br />
Handicapped Services High 2,000 $20,000 1 5<br />
Youth Services High 2,700 * - -<br />
Child Care Services High 1,500 * - -<br />
Transportation Services Medium 3,000 $20,000 1 5<br />
Substance Abuse Services Medium 200 $10,000 1 5<br />
Employment Training Medium 150 $25,000 2 10<br />
Health Services Medium 1,200 $25,000 2 10<br />
Lead Hazard Screening High 500 $30,000 5 25<br />
Crime Awareness Medium 1,000 $20,000 1 1<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
2013-14 Action Plan<br />
March 2013 DUNS # 074152596<br />
D-5
APPENDIX D<br />
Activity<br />
Priority<br />
Unmet<br />
Priority<br />
Need<br />
Dollars to<br />
Address<br />
Unmet<br />
Priority<br />
Need<br />
Annual<br />
Goals<br />
Multi-Year<br />
Goals<br />
Other Public Service<br />
Needs<br />
Medium 2,000 $20,000 1 1<br />
Fair Housing Services High 1 $10,000 1 5<br />
Economic Development (projects)<br />
ED Assistance to For-<br />
Pr<strong>of</strong>its (businesses)<br />
Low - - - -<br />
ED Technical Assistance<br />
(businesses)<br />
Low - - - -<br />
Micro-Enterprise<br />
Assistance (businesses)<br />
Low - - - -<br />
Rehab; Publicly or<br />
Privately Owned<br />
Commercial/Industrial<br />
Low - - - -<br />
(projects)<br />
Commercial/Industrial<br />
Infrastructure<br />
Low - - - -<br />
Development (projects)<br />
Other<br />
Commercial/Industrial<br />
Low - - - -<br />
Improvements (projects)<br />
Planning<br />
Planning High 1 $1,500,000 1 5<br />
Total Estimated Dollars<br />
$2,789,000<br />
Needed<br />
*The <strong>City</strong> provides over $7 million dollars in <strong>City</strong> funding (non CDBG and HOME funds) for special needs programs. Activities noted as<br />
high and medium priorities are likely to receive additional dollars from this funding source.<br />
2013-14 Action Plan <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
DUNS # 074152596 March 2013<br />
D-6
APPENDIX D<br />
TABLE H-5<br />
SUMMARY OF SPECIFIC OBJECTIVES (HUD 1C/ 2C/3A)<br />
Specific Objective #<br />
Specific Objective<br />
Measurable<br />
Units<br />
Source <strong>of</strong> funds $ 2009<br />
Program or activity<br />
description<br />
2010<br />
2011<br />
Performance indicators 2012<br />
2013<br />
Total<br />
Availability/Accessibility <strong>of</strong> Decent Housing (DH-1)<br />
DH-1.1<br />
Construct new affordable rental units.<br />
New Units to be Built<br />
Construction and<br />
Development <strong>of</strong> New<br />
Affordable Housing<br />
CDBG HOME 2010 10<br />
2011 10<br />
2012 10<br />
50 new affordable rentals. 2013 10<br />
2014 10<br />
Total 50<br />
Affordability <strong>of</strong> Decent Housing (DH-2)<br />
DH-2.1<br />
Use HOME funds for tenant based rental assistance.<br />
LMI Households<br />
Assisted<br />
Tenant Based<br />
Rental Assistance<br />
Program<br />
HOME 2010 25<br />
2011 25<br />
2012 25<br />
Affordable monthly housing costs for rents. 2013 25<br />
2014 25<br />
Total 125<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
2013-14 Action Plan<br />
March 2013 DUNS # 074152596<br />
D-7
APPENDIX D<br />
Sustainability <strong>of</strong> Decent Housing (DH-3)<br />
DH-3.1<br />
The <strong>City</strong> will purchase and install exceptionally designed<br />
sustainable mobile home units at Mountain View Mobile<br />
Home Park.<br />
Housing units<br />
Mobile<br />
Improvement<br />
Program<br />
Home<br />
CDBG HOME 2010 5<br />
2011 25<br />
2012 25<br />
100 units rehabilitated. 2013 25<br />
160 households assisted. 2014 20<br />
Total 100<br />
Sustainability <strong>of</strong> Decent Housing (DH-3)<br />
DH-3.1<br />
Acquisition and rehabilitation <strong>of</strong> existing housing for the<br />
purposed <strong>of</strong> providing affordable housing.<br />
Number <strong>of</strong> Unit.<br />
Acquisition<br />
Rehabilitation<br />
and<br />
CDBG HOME 2010 1<br />
2011 2<br />
2012 1<br />
Maintain the quality <strong>of</strong> affordable housing for 55 years. 2013 2<br />
2014 2<br />
Total 8<br />
Sustainability <strong>of</strong> Decent Housing (DH-4)<br />
SL-3.2<br />
Provide rehabilitation assistance to low- and moderateincome<br />
households.<br />
Households Assisted<br />
Residential<br />
Program<br />
Repair<br />
CDBG 2010 20<br />
2011 20<br />
2012 20<br />
Significant improvements to their living conditions. 2013 20<br />
2014 20<br />
Total 100<br />
2013-14 Action Plan <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
DUNS # 074152596 March 2013<br />
D-8
APPENDIX D<br />
Availability/Accessibility <strong>of</strong> Suitable Living Environment (SL-2)<br />
SL-3.3<br />
Support case management services for 190 at-risk<br />
persons per year.<br />
Persons Assisted<br />
CDBG 2010 190<br />
Emergency Services<br />
to Persons At-Risk<br />
<strong>of</strong> Homelessness<br />
2011 190<br />
2012 190<br />
Obtain and remain in permanent housing. 2013 190<br />
Increase skills and incomes. 2014 190<br />
Total 950<br />
Availability/Accessibility <strong>of</strong> Suitable Living Environment (SL-3)<br />
SL-3.2<br />
Provide home modification assistance to persons with<br />
disabilities.<br />
Households Assisted<br />
Home<br />
Program<br />
Access<br />
CDBG 2010 30<br />
2011 30<br />
2012 30<br />
Accessibility improvements. 2013 30<br />
2014 30<br />
Total 150<br />
Availability/Accessibility <strong>of</strong> Decent Housing (DH-1)<br />
DH-1.2<br />
Provide home modification assistance to persons with<br />
disabilities.<br />
Households Assisted<br />
Supportive and<br />
Special Needs<br />
Housing Production<br />
CDBG 2010 10<br />
New unit affordable housing units for special needs<br />
households.<br />
2011 10<br />
2012 10<br />
2013 10<br />
2014 10<br />
Total 50<br />
<strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
2013-14 Action Plan<br />
March 2013 DUNS # 074152596<br />
D-9
APPENDIX D<br />
Accessibility/Suitable Living Environment (SL-4)<br />
DH-1.2<br />
Provide accessibility improvements to public restrooms<br />
near beach areas.<br />
Projects Completed.<br />
Beach Restroom<br />
Accessibility<br />
Improvements<br />
CDBG 2010 8<br />
2011 0<br />
2012 0<br />
Accessibility for persons with disabilities. 2013 0<br />
2014 0<br />
Total 8<br />
Accessibility/Suitable Living Environment<br />
DH-1.2<br />
Accommodate light rail stations and the maintenance in<br />
the neighborhoods.<br />
Projects Completed.<br />
Light<br />
Integration<br />
Rail<br />
CDBG 2010 TBD<br />
2011 TBD<br />
2012 TBD<br />
More transportation options for low-income households. 2013 TBD<br />
2014 TBD<br />
Total TBD<br />
2013-14 Action Plan <strong>City</strong> <strong>of</strong> <strong>Santa</strong> <strong>Monica</strong><br />
DUNS # 074152596 March 2013<br />
D-10
APPENDIX E – CERTIFICATIONS
APPENDIX E
APPENDIX E