Comprehensive Annual Financial Report - City of Cerritos

City of Cerritos, California 

Comprehensive Annual Financial Report 

for the Fiscal Year ended June 30, 2010

CITY OF CERRITOS, CALIFORNIA 

COMPREHENSIVE ANNUAL 

FINANCIAL REPORT 

WITH REPORT ON AUDIT 

BY INDEPENDENT 

CERTIFIED PUBLIC ACCOUNTANTS 

FISCAL YEAR ENDED JUNE 30, 2010 

Prepared by: 

Administrative Services Department 

Denise D. Manoogian, Director of Administrative Services 

Nita McKay, Finance Manager

City of Cerritos 


For the year ended June 30, 2010 

Table of Contents 

Page 

INTRODUCTORY SECTION 

City Manager and Director of Administrative Services Letter of Transmittal ................................................. i 

Principal Officials ...................................................................................................................................................... v 

Organization Chart.................................................................................................................................................... vi 

GFOA Certificate of Achievement for Excellence in Financial Reporting ........................................................ vii 

FINANCIAL SECTION 

Independent Auditors’ Report ............................................................................................................................... 1 

Management’s Discussion and Analysis (Unaudited) ...................................................................................... 3 

Basic Financial Statements: 

Government-wide Financial Statements: 

Statement of Net Assets ............................................................................................................................... 17 

Statement of Activities ................................................................................................................................. 18 

Fund Financial Statements: 

Governmental Fund Financial Statements: 

Balance Sheet .......................................................................................................................................... 22 

Reconciliation of the Governmental Funds Balance Sheet 

to the Government-Wide Statement of Net Assets ..................................................................... 23 

Statement of Revenues, Expenditures and 

Changes in Fund Balances ............................................................................................................. 24 

Reconciliation of the Governmental Funds Statement of Revenues, 

Expenditures and Changes in Fund Balances to the Government-Wide 

Statement of Activities and Changes in Net Assets ................................................................... 25 

Proprietary Fund Financial Statements: 

Statement of Net Assets ........................................................................................................................ 28 

Statement of Revenues, Expenses and Changes in Net Assets ....................................................... 29 

Statement of Cash Flows ....................................................................................................................... 30 

Notes to Basic Financial Statements ............................................................................................................... 31




Table of Contents, Continued 

Page 

FINANCIAL SECTION, Continued 

Required Supplementary Information (Unaudited) ........................................................................................ 75 

Notes to Required Supplementary Information ............................................................................................. 76 

Budgetary Comparison Schedule: 

General Fund ................................................................................................................................................. 77 

Schedule of Funding Progress: 

Defined Pension Plan ................................................................................................................................... 78 

Other Post Employment Benefits ............................................................................................................... 78 

Supplementary Information: 

Non-Major Governmental Funds: 

Combining Balance Sheet ............................................................................................................................ 82 

Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........................... 86 

Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual: 

Street Improvements Special Revenue Fund ..................................................................................... 90 

Traffic Congestion Special Revenue Fund ......................................................................................... 91 

Drainage Special Revenue Fund .......................................................................................................... 92 

Sewer Special Revenue Fund ............................................................................................................... 93 

SB 821 Special Revenue Fund ............................................................................................................... 94 

Proposition “A” Special Revenue Fund ............................................................................................. 95 

Proposition “C” Special Revenue Fund .............................................................................................. 96 

Assessment District #6 Special Revenue Fund .................................................................................. 97 

Los Coyotes Lighting District Special Revenue Fund ...................................................................... 98 

Local Law Enforcement Grants Special Revenue Fund ................................................................... 99 

COPS Grants Special Revenue Fund .................................................................................................. 100 

Library Grants Special Revenue Fund ................................................................................................ 101 

Environmental Grant Special Revenue Fund .................................................................................... 102 

AQMD Special Revenue Fund ............................................................................................................. 103 

Measure “R” Special Revenue Fund ................................................................................................... 104 

Internal Service Funds: 

Combining Statement of Net Assets .......................................................................................................... 106 

Combining Statement of Revenues, Expenses and Changes in Net Assets ......................................... 107 

Combining Statement of Cash Flows ........................................................................................................ 108




Table of Contents, Continued 

Page 

STATISTICAL SECTION (Unaudited) 

Description of Statistical Section Contents ............................................................................................................ 109 

Financial Trends: 

Net Assets by Component – Last Eight Fiscal Years ..................................................................................... 110 

Changes in Net Assets – Expenses and Program Revenues - Last Eight Fiscal Years .............................. 112 

Changes in Net Assets – General Revenues - Last Eight Fiscal Years ......................................................... 114 

Fund Balances of Governmental Funds - Last Eight Fiscal Years ................................................................ 116 

Changes in Fund Balances of Governmental Funds - Last Eight Fiscal Years ........................................... 118 

Governmental Activities Revenues by Sources - Last Ten Fiscal Years ...................................................... 120 

Revenue Capacity: 

Assessed Value of Taxable Property - Last Ten Fiscal Years ........................................................................ 122 

Property Tax Rates – All Direct and Overlapping Governments – Last Ten Fiscal Years ....................... 124 

Ten Largest Secured Taxpayers – Current Year and Nine Years Ago ........................................................ 125 

Property Tax Levies and Collections - Last Ten Fiscal Years ....................................................................... 126 

Debt Capacity: 

Ratios of Outstanding Debt by Type - Last Eight Fiscal Years ..................................................................... 128 

Schedule of Direct and Overlapping Bonded Debt ........................................................................................ 130 

Legal Debt Margin Information- Last Eight Fiscal Years .............................................................................. 132 

Demographic and Economic Information: 

Demographic and Economic Statistics - Last Eight Fiscal Years .................................................................. 134 

Principal Employers – Current Year and Eight Years Ago ........................................................................... 135 

Operating Information: 

Full-Time and Part-Time City Employees by Function - Last Eight Fiscal Years ...................................... 136 

Operating Indicators by Function - Last Eight Fiscal Years .......................................................................... 137 

Capital Asset Statistics by Function - Last Eight Fiscal Years ...................................................................... 138

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December 2, 2010 

Honorable Mayor, Members of the City Council, and Citizens of the City of Cerritos 

It is our pleasure to present the Comprehensive Annual Financial Report (CAFR) of the City 

of Cerritos (the City) for the fiscal year ended June 30, 2010. 

This report consists of management’s representations concerning the finances of the City of 

Cerritos. Management assumes the responsibility for the accuracy of the presented data, 

the completeness and fairness of the presentation and all disclosures. To provide a 

reasonable basis for making these representations, management has established a 

comprehensive internal control framework that is designed both to protect the City’s assets 

from loss, theft, or misuse and to compile sufficient reliable information for the preparation 

of the City’s financial statements in conformity with generally accepted accounting principles 

(GAAP). Because the costs of internal controls should not outweigh their benefits, internal 

controls have been designed to provide reasonable rather than absolute assurance that the 

financial statements will be free from material misstatements. 

The City’s financial statements have been audited by Caporicci & Larson, Inc., a subsidiary 

of Marcum, LLP, a firm of certified public accountants. The auditors have issued an 

unqualified opinion on these financial statements. Such an opinion states that the auditors 

feel the City followed all accounting rules appropriately and that the financial reports are an 

accurate representation of the City’s financial condition. Their report is located at the front 

of the financial section of this report. 

Management’s discussion and analysis (MD&A) immediately follows the independent 

auditor’s report and provides a narrative introduction, overview, and analysis of the basic 

financial statements. This letter of transmittal is designed to complement the MD&A and 

should be read in conjunction with it. 

Profile of the City of Cerritos 

The City of Cerritos is located approximately 20 miles southeast of Los Angeles along the 

border of Orange County. Beginning as an unincorporated area known for its strawberry 

farms and dairy operations, the City experienced a major transformation into a more urban 

environment beginning in the late 1960s. In 1973, a unique and innovative General Plan 

was adopted, which has guided development in a master planned fashion to create a parklike 

community with balanced development. Today the City is a progressive, affluent 

community with a highly educated and ethnically diverse population. 

The City is home to over 50,000 residents and several large business organizations. 

Cerritos enjoys the distinction of being a large sales tax generator, resulting in significant 

revenues to support City operations. 

i


ORGANIZATIONAL CHART 

RESIDENTS OF CERRITOS 

CITY COUNCIL 

REDEVELOPMENT AGENCY 

ECONOMIC DEVELOPMENT 

COMMISSION 

FINE ARTS & HISTORICAL 

COMMISSION 

PARKS & RECREATION 

COMMISSION 

PLANNING 

COMMISSION 

PROPERTY PRESERVATION 

COMMISSION 

CITY ATTORNEY CITY MANAGER/EXECUTIVE DIRECTOR CITY CLERK/TREASURER 

COMMUNITY 

DEVELOPMENT 

PUBLIC WORKS 

WATER AND 

POWER 

COMMUNITY AND 

SAFETY SERVICES 

ADMINISTRATIVE 

SERVICES 

THEATER 

Geographic Information 

Systems 

Engineering 

Water 

Operations 

Community Participation/ 

Senior Center 

Communications 

Business Management 

Advance Planning 

Environmental 

Services 

Reclaimed Water 

Operations 

Recreation Services 

Finance/Water Billing 

Performance Marketing 

and Sales 

Redevelopment Team 

General 

Maintenance 

Electric Utility 

Operations 

Community Safety 

Human Resources/ 

Risk Management 

Performance Management 

Front of House 

Current Planning Parks/Trees Maintenance 

Code Enforcement 

Support Services 

Operations and Security 

Municipal Library 

Special Event Services 

Management Information Systems 

Ticket Office 

vi

vii

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viii

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INDEPENDENT AUDITORS’ REPORT 

Honorable Mayor and 

Members of the City Council 


Cerritos, California 

We have audited the accompanying financial statements of the governmental activities, the businesstype 

activities, each major fund, and the aggregate remaining fund information of the City of Cerritos, 

California (City), as of and for the year ended June 30, 2010, which collectively comprise the City’s 

basic financial statements as listed in the foregoing table of contents. These basic financial statements 

are the responsibility of the City’s management. Our responsibility is to express an opinion on these 

basic financial statements based on our audit. 

We conducted our audit in accordance with auditing standards generally accepted in the United States 

of America and the standards applicable to financial audits contained in Government Auditing Standards, 

issued by the Comptroller General of the United States. Those standards require that we plan and 

perform the audit to obtain reasonable assurance about whether the basic financial statements are free 

of material misstatement. An audit includes consideration of internal control over financial reporting 

as a basis for designing audit procedures that are appropriate in the circumstances but not for the 

purpose of expressing an opinion on the effectiveness of the City’s internal control over financial 

reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, 

evidence supporting the amounts and disclosures in the financial statements. An audit also includes 

assessing the accounting principles used and significant estimates made by management, as well as 

evaluating the overall basic financial statement presentation. We believe that our audit provides a 

reasonable basis for our opinions. 

In our opinion, the basic financial statements referred to above present fairly, in all material respects, 

the respective financial position of the governmental activities, the business-type activities, each major 

fund, and the aggregate remaining fund information of the City as of June 30, 2010, and the respective 

changes in financial position and cash flows, where applicable, thereof for the year then ended in 

conformity with accounting principles generally accepted in the United States of America. 

In accordance with Government Auditing Standards, we have also issued our report dated 

December 2, 2010 on our consideration of the City’s internal control over financial reporting and on our 

tests of its compliance with certain provisions of laws, regulations, contracts, and grants. The purpose 

of that report is to describe the scope of our testing of internal control over financial reporting and 

compliance and the results of that testing, and not to provide an opinion on the internal control over 

financial reporting or on compliance. That report is an integral part of an audit performed in 

accordance with Government Auditing Standards and should be read in conjunction with this report in 

considering the results of our audit.

Honorable Mayor and 

Members of the City Council 


Cerritos, California 

Page 2 

The accompanying Required Supplementary Information, such as Management’s Discussion and 

Analysis, budgetary comparison information and other information, is not a required part of the basic 

financial statements, but is supplementary information required by the Governmental Accounting 

Standards Board. We have applied certain limited procedures, which consisted principally of inquiries 

of management regarding the methods of measurement and presentation of the Required 

Supplementary Information. However, we did not audit the information and express no opinion on 

the Required Supplementary Information. 

Our audit was conducted for the purpose of forming opinions on the financial statements that 

collectively comprise the City’s basic financial statements. The accompanying Supplementary 

Information is presented for purpose of additional analysis and is not a required part of the basic 

financial statements. The Supplementary Information has been subjected to the auditing procedures 

applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material 

respects in relation to the basic financial statements taken as a whole. The Introductory and Statistical 

Sections have not been subjected to the auditing procedures applied in the audit of the basic financial 

statements and, accordingly, we express no opinion on them. 

Caporicci & Larson, Inc. 

A Subsidiary of Marcum LLP 

Certified Public Accountants 

Irvine, California 

December 2, 2010 

2

CITY OF CERRITOS, CALIFORNIA 

Management’s Discussion and Analysis 

Year Ended June 30, 2010 

As Management of the City of Cerritos, California (City), we offer readers of the City’s financial 

statements this narrative overview and analysis of the financial activities of the City for the fiscal year 

ended June 30, 2010. We encourage readers to consider the information presented here in conjunction 

with the accompanying letter of transmittal at the front of this report, and the basic financial 

statements, which follow this section. 

FINANCIAL HIGHLIGHTS 

 

 

 

 

The City’s assets exceeded its liabilities at June 30, 2010 by $327.5 million. This amount is 

referred to as the net assets of the City. Of this amount, $169.7 million is invested in capital 

assets net of related debt, $31.6 million is restricted and $126.2 million is unrestricted. The 

unrestricted amount may be used to meet the City’s ongoing obligations to citizens and 

creditors. 

The City’s net assets decreased $16.1 million, expenses exceeding revenues by this amount. 

This decrease is attributable to the mandatory payment of $11.8 million to the State of 

California for the City’s share of the Supplemental Educational Revenue Augmentation Fund 

(SERAF), Other Post Employment Benefits (OPEB) contribution of $2.0 million and general 

liability claims of $1.9 million. 

Governmental funds for the City reported combined fund balances of $148.6 million. Of this 

amount, $104.6 million is reserved while $44.0 million is unreserved, or available for spending 

at the City’s discretion. 

As of June 30, 2010, the unreserved fund balance of the General Fund, the City’s chief 

operating fund, was $80.5 million, or 141.5% of General Fund expenditures. This unreserved 

fund balance is available for future appropriation. 

OVERVIEW OF THE FINANCIAL STATEMENTS 

This discussion and analysis is intended to serve as an introduction to the City’s basic financial 

statements, which consist of three components: 1) government-wide financial statements, 2) fund 

financial statements and 3) notes to the basic financial statements. This report also contains 

supplementary information in addition to the basic financial statements. 

Government-wide Financial Statements 

The government-wide financial statements are designed to provide readers with a broad overview of 

the City’s finances, in a manner similar to a private-sector business. 

The Statement of Net Assets presents information on all of the City’s assets and liabilities, with the 

difference between the two reported as net assets. Over time, increases or decreases in net assets may 

serve as a useful indicator of whether the financial position of the City is improving or deteriorating. 

3

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) 

Government-wide Financial Statements (Continued) 

The Statement of Activities presents information on how the City’s net assets changed during the fiscal 

year. All changes in net assets are reported as soon as the underlying event giving rise to the change 

occurs, regardless of the timing of the related cash flows. Therefore, revenues and expenses are 

reported in this statement for some items that will only result in cash flows in future fiscal periods (for 

example, uncollected taxes and earned but unused employee leaves). 

Both of the government-wide financial statements distinguish functions of the City that are principally 

supported by taxes and intergovernmental revenues (governmental activities) from other functions that 

are intended to recover all or a significant portion of their costs through user fees and charges 

(business-type activities). The governmental activities of the City of Cerritos include legislative and 

administration, community development, public works, water and power, community and safety 

services, administrative services and the theater (Cerritos Center for the Performing Arts). The 

business-type activities of the City include water operations, reclaimed water, and electric utility. 

The government-wide financial statements include not only the City of Cerritos itself (known as the 

primary government), but also the activities of the Cerritos Redevelopment Agency (Agency) and the 

Cerritos Public Financing Authority (Authority), a joint powers authority formed by the City and the 

Agency to issue bonds for the construction of major capital facilities. The City is financially 

accountable for both of these legally separate entities, which are referred to as blended component 

units. The Agency and Authority function for all practical purposes as departments of the City, and 

therefore, these blended component units have been included in these financial statements as an 

integral part of the primary government. 

Fund Financial Statements 

A fund is a grouping of related accounts that is used to maintain control over resources that have been 

segregated for specific activities or objectives. The City of Cerritos, like other state and local 

governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal 

requirements. All of the funds of the City can be divided into two categories: governmental funds and 

proprietary funds. 

 

Governmental Funds 

Governmental funds are used to account for essentially the same functions reported as 

governmental activities in the government-wide financial statements. However, unlike the 

government-wide financial statements, governmental fund financial statements focus on 

near-term inflows and outflows of spendable resources, as well as on balances of spendable 

resources available at the end of the fiscal year. Such information may be useful in evaluating 

the City’s near-term financing requirements. 

Because the focus of governmental funds is narrower than that of the government-wide 

financial statements, it is useful to compare the information presented for governmental funds 

with similar information presented for governmental activities in the government-wide 

financial statements. By doing so, readers may better understand the long-term impact of the 

City’s near-term financing decisions. Both the governmental fund balance sheet and the 

governmental fund statement of revenues, expenditures and changes in fund balances provide a 

reconciliation to facilitate this comparison between governmental funds and governmental 

activities. 

4

OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED) 

Fund Financial Statements (Continued) 

 

Governmental Funds (Continued) 

The City of Cerritos maintains nineteen individual governmental funds. Information is 

presented separately in the governmental fund balance sheet and in the governmental fund 

statement of revenues, expenditures and changes in fund balances for the General Fund, 

Redevelopment Agency Debt Service Fund and Redevelopment Agency Capital Projects Fund, 

each of which are considered to be major funds. Data from the other sixteen governmental 

funds are combined into a single, aggregated presentation. Individual fund data for each of 

these nonmajor governmental funds is provided in the form of combining statements elsewhere 

in this report. 

The City of Cerritos adopts an annual appropriated budget for the General Fund and all Special 

Revenue Funds. A budgetary comparison statement has been provided for each of these funds 

to demonstrate compliance with these budgets. 

 

Proprietary Funds 

The City of Cerritos maintains two different types of proprietary funds. Enterprise funds are 

used to report the same functions presented as business-type activities in the government-wide 

financial statements. The City uses enterprise funds to account for its water, reclaimed water 

and electric utility activities. Internal service funds are accounting devices used to accumulate 

and allocate costs internally among the City’s various functions. The City uses an internal 

service fund to account for its equipment maintenance and replacement activities. Because the 

internal service fund provides services that predominantly benefit governmental rather than 

business-type functions, it has been included within governmental activities in the governmentwide 

financial statements. 

Proprietary funds provide the same type of information as the government-wide financial 

statements, only in more detail. The proprietary fund financial statements provide separate 

information for the Water Fund, Reclaimed Water Fund and Electric Utility Fund, which are 

considered major funds of the City. Conversely, the internal service fund is shown as a 

separate reporting category on the Proprietary Funds reports and in the Supplementary 

Information section of this report. 

Notes to the Basic Financial Statements 

The notes to the basic financial statements provide additional information that is essential to a full 

understanding of the data provided in the government-wide and fund financial statements. 

Other Information 

The combining statements, referred to earlier in connection with other governmental funds and the 

internal service fund, are presented in Supplementary Information. 

5

GOVERNMENT-WIDE FINANCIAL ANALYSIS 

The following table summarizes the Statement of Net Assets for fiscal years ending June 30, 2010 and 

June 30, 2009. 

City of Cerritos Net Assets 

(in millions) 

Governmental Activities Business-Type Activities Total 

2010 2009 2010 2009 2010 2009 

Cash and investments $ 157.2 $ 182.6 $ 4.1 $ 5.4 $ 161.3 $ 188.0 

Other Assets 20.8 20.1 (4.1) (2.9) 16.7 17.2 

Capital Assets 298.1 291.4 40.4 41.9 338.5 333.3 

Total Assets 476.1 494.1 40.4 44.4 516.5 538.5 

Other Liabilities 11.5 15.0 1.1 0.3 12.6 15.3 

Long term liabilities outstanding 176.2 179.6 0.2 - 176.4 179.6 

Total Liabilities 187.7 194.6 1.3 0.3 189.0 194.9 

Net Assets 

Invested in capital assets, 

net of related debt 129.3 108.3 40.4 41.9 169.7 150.2 

Restricted 31.6 32.9 - - 31.6 32.9 

Unrestricted 127.5 158.3 (1.3) 2.2 126.2 160.5 

Total net assets $ 288.4 $ 299.5 $ 39.1 $ 44.1 $ 327.5 $ 343.6 

As noted earlier, net assets may serve over time as a useful indicator of a government’s financial 

position. In the case of the City of Cerritos, net assets were $327.5 million as of June 30, 2010. Net 

assets decreased $16.1 million, or 4.7%, during fiscal year 2009-10. Assets decreased 4.1% and 

liabilities decreased 3.0% when compared to June 30, 2009. 

The largest portion of the City’s net assets at June 30, 2010 ($169.7 million, or 51.8% of total net 

assets) reflects its investment in capital assets (e.g., land, infrastructure, buildings, machinery and 

equipment) less any related debt used to acquire those assets that is still outstanding. The City uses 

these capital assets to provide services to citizens; consequently, these assets are not available for 

future spending. Although the City’s investment in its capital assets is reported net of related debt, it 

should be noted that the resources needed to repay this debt must be provided from other sources, since 

the capital assets themselves cannot be used to liquidate these liabilities. 

The increase in governmental activities investment in capital assets is attributable to the City acquiring 

land and the completion of an expansion to the Sheriff’s station. The decrease in business-type 

activities was due to normal depreciation of existing capital assets with no significant purchases. The 

restricted portion of the City’s net assets 9.6%) represents resources that are subject to external 

restrictions on how they may be used. These restricted net assets decreased $1.3 million due to 

amounts that were spent related to capital projects. The remaining balance of unrestricted net assets of 

$126.2 million may be used to meet the government’s ongoing obligations to citizens and creditors. 

Cash and investments decreased 14.2%, or $26.7 million when compared to the previous fiscal year. 

This decrease is directly linked to the State of California mandated payment of $11.8 million for the 

City’s share of the Supplemental Educational Revenue Augmentation Fund (SERAF), the City’s share 

of improvements to the Cerritos Mall in the amount of $4.0 million and the purchase of land in the 

amount of $7.0 million, which resulted in the increase to the City’s investment in capital assets, as 

previously described. 

6

GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED) 

As noted in the following table, the City’s net assets declined by $16.1 million during the current fiscal 

year. The fiscal year 2009-10 decline in net assets compares to the fiscal year 2008-09 decrease of 

$16.0 million. 

City of Cerritos Change in Net Assets 

(in millions) 

Governmental Activities Business-type activities Total 

2010 2009 2010 2009 2010 2009 

Revenues 

Program revenues: 

Charges for services $ 12.1 $ 12.5 $ 12.4 $ 15.3 $ 24.5 $ 27.8 

Operating grants and contributions 11.3 10.0 - - 11.3 10.0 

Capital grants and contributions 0.6 0.2 0.1 0.1 0.7 0.3 

General revenues: 

Taxes 58.5 63.6 - - 58.5 63.6 

Investment income 20.6 18.3 0.1 0.1 20.7 18.4 

Miscellaneous 1.1 0.2 - - 1.1 0.2 

Total revenues 104.2 104.8 12.6 15.5 116.8 120.3 

Expenses: 

Legislative and administration 24.0 12.2 - - 24.0 12.2 

Community development 9.6 7.5 - - 9.6 7.5 

Public works 17.6 24.0 - - 17.6 24.0 

Water and power 0.5 1.5 - - 0.5 1.5 

Community and safety services 23.2 24.7 - - 23.2 24.7 

Administrative services 12.4 16.5 - - 12.4 16.5 

Cerritos Center for the Performing Arts 10.8 12.6 - - 10.8 12.6 

Unallocated infrastructure depreciation 1.1 1.0 - - 1.1 1.0 

Interest expense 16.1 16.8 - - 16.1 16.8 

Water - - 9.7 9.0 9.7 9.0 

Reclaimed water - - 1.4 1.3 1.4 1.3 

Electric Utility - - 6.5 9.2 6.5 9.2 

Total expenses 115.3 116.8 17.6 19.5 132.9 136.3 

Change in net assets 

before transfers (11.1) (12.0) (5.0) (4.0) (16.1) (16.0) 

Transfers - 4.2 - (4.2) - - 

Change in net assets (11.1) (7.8) (5.0) (8.2) (16.1) (16.0) 

Net assets, beginning of year 299.5 307.3 44.1 52.3 343.6 359.6 

Net assets, end of year $ 288.4 $ 299.5 $ 39.1 $ 44.1 $ 327.5 $ 343.6 

The City’s total revenues were $116.8 million in FY 2009-10, while the total cost of all programs and 

services was $132.9 million. Revenues decreased by $3.5 million, or 2.9%, from the prior year levels 

and expenses decreased $3.4 million, or 2.5% when compared to FY 2008-09. 

Approximately 50.1% of all revenues this past year came from some form of tax (down from 52.9% in 

FY 2008-09). 

7

GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED) 

Governmental Activities 

Revenues associated with governmental activities 

decreased $0.6 million compared to FY 2008-09 primarily 

due to the economic recession. Although tax revenues 

declined, specifically in the areas of sales taxes and tax 

increment revenues ($5.0 million), other revenue sources 

increased when compared to one year ago. The increases 

in operating and capital grant revenues included police 

grants, library grants, and $0.5 million in American 

Recovery and Reinvestment Act (ARRA) grant funds for a 

major street improvement project. 

Expenses associated with governmental activities 

decreased $1.5 million compared to one year earlier. With 

the economic downturn and declines in the City’s core 

revenue sources, all City departments were charged with 

reducing operating expenses to maintain a balanced 

budget. The only areas which show increases are 

legislative and administration, detailing the mandatory 

SERAF payment to the State of California, and 

community development. 

Motor vehicle 

taxes 

4% 

Franchise 

taxes 

1% 

Sales taxes 

17% 

Property 

taxes 

33% 

Unallocated 

infrastructure 

depreciation 

1% 

Cerritos 

Center for the 

Performing 

Arts 

10% 

Administrative 

Services 

11% 

Revenue Sources 

Fiscal Year Ended June 30, 2010 

Capital grants 

and 

contributions 

1% 

Charges for 

services 

12% 

Transient 

occupancy 

taxes 

FINANCIAL ANALYSIS OF THE CITY’S FUNDS 

As noted earlier, the City of Cerritos uses fund accounting to ensure and demonstrate compliance with 

finance-related legal requirements. 


The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, 

and balances of spendable resources. Such information is useful in assessing the City’s financing 

requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s 

net resources available for spending at the end of the fiscal year. 

At the end of the current fiscal year, the City’s governmental funds reported combined ending fund 

balances of $148.6 million, a decrease of $22.6 million from the prior year. Approximately $44.0 

million constitutes unreserved fund balance, which is available for spending at the City’s discretion. 

The remainder of fund balance is reserved to indicate that it is not available for new spending because 

it has already been committed 1) for long-term receivables ($101.8 million) from the Cerritos 

Redevelopment Agency and the Electric Utility Fund, 2) for inventories and deposits ($0.8 million), 

and 3) for land held for resale ($2.0 million). 

The General Fund is the main operating fund of the City. At the end of the current fiscal year, 

unreserved fund balance of the General Fund was $80.5 million, which represents 141.5% of General 

Fund expenditures, excluding transfers. Reserved amounts include $101.8 million for long-term 

receivables and $0.8 million for inventories and deposits. Unreserved fund balance includes 

designations for Arts Center programs ($10.0 million), asset replacement ($0.7 million), and self 

insurance ($1.0 million). 

The City’s General Fund balance increased $1.7 million during the fiscal year compared to a budgeted 

increase of $0.3 million. Although revenues (including transfers in) completed the fiscal year $1.9 

million less than the adjusted budget, departmental expenditures (including transfers out) were under 

budget by $3.3 million, resulting in the $1.4 million variance from budgeted to actual fund balance. 

The City of Cerritos has two other governmental funds that qualify as major funds. The 

Redevelopment Agency Debt Service Fund ended the fiscal year with a deficit fund balance of $66.1 

million. The deficit fund balance increased $22.9 million during the fiscal year due to the mandatory 

SERAF payment to the State of California ($11.8 million) and the increased transfer to the Capital 

Projects Fund ($11.7 million). The Redevelopment Agency Capital Projects Fund completed fiscal 

year 2009-10 with an ending fund balance of $25.3 million. Of this ending fund balance, $2.0 million 

is reserved for land held for resale. The remaining fund balance of $23.3 million is unreserved. The 

increase of $0.3 million in fund balance from the previous fiscal year is due to the increase in the 

transfer from the Debt Service Fund. 


The City’s proprietary funds provide the same type of information found in the government-wide 

financial statements, but in more detail. 

The City’s major proprietary funds are the Water, Reclaimed Water and Electric Utility Funds. Net 

assets of the Water, Reclaimed Water, and Electric Utility Funds at the end of the fiscal year amounted 

to $25.4 million, $7.5 million, and $6.1 million, respectively. The total change in net assets of these 

9

FINANCIAL ANALYSIS OF THE CITY’S FUNDS (CONTINUED) 

Proprietary Funds (Continued) 

funds was ($2.6) million, ($0.5) million, and ($1.9) million. In total, net assets for all major funds 

decreased $5.0 million from the previous year. 

Operating expenses exceeded operating revenues in each of the major proprietary funds resulted in a 

decline in net assets. The City has not implemented a rate increase in the past four years, calling upon 

existing net assets to subsidize operations. 

GENERAL FUND BUDGETARY HIGHLIGHTS 

During the fiscal year, there was a $1.3 million decrease in appropriations between the original and 

final amended budget. City management mandated budget reductions within all departmental budgets 

due to the effects of the economic recession on the City’s major revenue streams. All line items were 

reviewed with special emphasis on necessary expenditures, while items such as travel, training, and 

supplies were reduced. 

As stated above, the decrease in appropriations was necessary because of the decline in the City’s 

major revenue sources, primarily sales tax revenue declining $3.4 million, or 16.7% from the prior 

fiscal year. 

CAPITAL ASSET AND DEBT ADMINISTRATION 

Capital Assets 

The City of Cerritos’ investment in capital assets for its governmental and business-type activities as of 

June 30, 2010, amounts to $338.5 million (net of accumulated depreciation) an increase of $5.2 million 

from the prior fiscal year. This investment in capital assets includes land, streets, water, sewer and 

storm drain systems, buildings and improvements, machinery and equipment, vehicles, public works of 

art, parking structures, and electric rights. 

The following table presents the capital assets of the City of Cerritos at June 30, 2010. 

City of Cerritos Capital Assets 

(in millions) 

Governmental activities Business-type activities Total 

2010 2009 2010 2009 2010 2009 

Land $ 84.0 $ 77.0 $ - $ - $ 84.0 $ 77.0 

Parking structure rights 3.8 3.8 - - 3.8 3.8 

Right-of-way 49.2 49.2 - - 49.2 49.2 

Public art 4.4 4.4 - - 4.4 4.4 

Trees 1.4 1.4 - - 1.4 1.4 

Construction in progress 0.2 2.4 - 1.0 0.2 3.4 

Buildings and structures 126.0 124.2 3.2 3.3 129.2 127.5 

Improvements other 

than buildings 4.3 4.4 - - 4.3 4.4 

Infrastructure/water mains 

and lines 21.7 21.2 22.3 22.1 44.0 43.3 

Water rights - - 1.8 1.9 1.8 1.9 

Electric Rights - - 11.8 12.2 11.8 12.2 

Furniture and equipment 3.1 3.4 1.3 1.4 4.4 4.8 

Total $ 298.1 $ 291.4 $ 40.4 $ 41.9 $ 338.5 $ 333.3 

10

CAPITAL ASSET AND DEBT ADMINISTRATION (CONTINUED) 

Capital Assets (Continued) 

Major capital asset events during the fiscal year included the following: 

 

 

 

Purchase of property located on the Northwest corner of Studebaker Road and 183 rd Street in 

the amount of $7.0 million; 

Completion of the Sheriff Station expansion amounting to $6.5 million; 

The Bloomfield Avenue resurfacing project was completed in the amount of $1.1 million. 

Besides utilizing highway users’ tax revenues to complete this project, the City received $0.5 

million in ARRA funding for the completion of this resurfacing. 

Detailed information relating to capital assets can be found in Note 7 to the basic financial statements. 

Long-term debt 

At the end of the current fiscal year, the City had total debt outstanding of $176.2 million. The 

majority of this debt is Redevelopment Agency revenue bonds ($168.8 million). Additions to the 

City’s long-term debt included $2.0 million of OPEB obligation and $1.9 million in general liability 

claims payable. 

City of Cerritos Long-Term Debt 

(in millions) 

2010 2009 

Los Cerritos-Revenue Bonds $ 39.8 $ 42.3 

Los Coyotes-Revenue Bonds 127.4 132.1 

Add Deferred Amounts 1.6 1.7 

Subtotal – Revenue Bonds 168.8 176.1 

Note Payable 1.0 1.0 

Compensated Absences 2.5 2.5 

Net OPEB Obligation 2.0 - 

Claims Payable-General Liability 1.9 - 

Total Long-Term Debt $ 176.2 $ 179.6 

Detailed information relating to long-term debt can be found in Note 9 to the basic financial 

statements. 

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET 

Softness in the real estate market along with a tightening in the credit market continues to have an 

adverse effect on the local Southern California economy. Key sectors of the economy that continue to 

be affected include technology, entertainment and certain durable goods. Rising costs of raw materials 

along with unemployment concerns has slowed remodeling and reconstruction of housing within the 

City of Cerritos. 

The City of Cerritos has been able to maintain its levels of service to the community by positioning 

itself to withstand fluctuations in the economic environment. The combined tax revenues, particularly 

sales tax and income from investments and ground leases have made it possible to progress with the 

planned level of development while maintaining a high degree of financial stability. 

11

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET (CONTINUED) 

The City’s ability to maintain a positive business climate was evidenced with the completion of the 

new Nordstrom Department store along with a new Kia dealership at the Cerritos Auto Square. These 

accomplishments are strong examples of the City’s continued ability to generate significant ground 

rent, sales tax and tax increment revenues. 

Despite the challenging economic environment, careful management of expenditures will enable the 

City to maintain its ability to fund current levels of services to its residents without the need to use its 

reserves. The City has, in the past, used unreserved fund balance for specific capital projects, but 

continues to take a cautious approach to spending in light of the ongoing California budget crisis. 

Management is confident that the City can sustain and build upon its current reserves while satisfying 

the funding needs of future capital projects and operations. Future planned capital projects include the 

installation of photovoltaic solar panels at the Corporate Yard and ongoing street improvement 

projects. 

The recent fluctuations in revenues, continuing demand for the City’s service levels, and potential 

revenue reductions from the State’s actions to eliminate the State budget deficit continue to be taken 

into account by the City in budgeting its expenses for the upcoming year. The City of Cerritos 

continues to adopt a budget that not only serves as a financial plan, but also a communication device, 

policy tool and operations guide for the City Council and the citizens of Cerritos. 

REQUESTS FOR INFORMATION 

This financial report is designed to provide the City of Cerritos citizens, taxpayers, customers, 

investors, and creditors with a general overview of the City’s finances and to illustrate the City’s 

accountability for the money it receives. If you have questions about this report or need additional 

financial information, contact the City’s Administrative Services Department at the City of Cerritos, 

18125 Bloomfield Avenue, Cerritos, CA 90703, or call (562) 860-0311 or visit our website at 

www.ci.cerritos.us. 

12

BASIC FINANCIAL STATEMENTS 

13


14

GOVERNMENT-WIDE FINANCIAL STATEMENTS 

15


16


Statement of Net Assets 

June 30, 2010 

ASSETS 

Governmental Business-Type 

Activities Activities Total 

Cash and investments $ 130,461,058 $ 4,133,401 $ 134,594,459 

Restricted assets: 

Cash 9,959,056 - 9,959,056 

Investments with fiscal agents 16,826,527 - 16,826,527 

Accounts receivable 6,117,358 1,640,279 7,757,637 

Interest receivable 328,090 9,593 337,683 

Internal balances 8,316,367 (8,316,367) - 

Other receivables 1,791,336 - 1,791,336 

Prepaid expenses 814,865 2,581,274 3,396,139 

Inventories 23,883 - 23,883 

Land held for resale or lease 1,953,330 - 1,953,330 

Unamortized bond issue costs 1,407,931 - 1,407,931 

Capital assets: 

Nondepreciable 142,944,636 - 142,944,636 

Depreciable, net 155,114,206 40,406,258 195,520,464 

Total Assets 476,058,643 40,454,438 516,513,081 

LIABILITIES 

Accounts payable and accrued liabilities 4,722,875 979,909 5,702,784 

Accrued salaries and benefits 1,579,966 73,440 1,653,406 

Interest payable 1,718,465 - 1,718,465 

Unearned revenue 2,223,836 - 2,223,836 

Due to other agencies 776,000 - 776,000 

Deposits payable 399,716 56,632 456,348 

Noncurrent liabilities: 

Due within one year 8,340,500 64,484 8,404,984 

Due in more than one year 167,870,465 193,453 168,063,918 

Total Liabilities 187,631,823 1,367,918 188,999,741 

NET ASSETS 

Invested in capital assets, net of related debt 129,318,648 40,406,258 169,724,906 

Restricted for: 

Street and sewer related purposes 4,423,142 - 4,423,142 

Transportation related purposes 1,254,083 - 1,254,083 

Assessment districts 105,662 - 105,662 

Miscellaneous grants 492,474 - 492,474 

Asset replacement 25,275,197 - 25,275,197 

Unrestricted 127,557,614 (1,319,738) 126,237,876 

Total Net Assets $ 288,426,820 $ 39,086,520 $ 327,513,340 

See accompanying Notes to Basic Financial Statements. 

17


Statement of Activities 

For the Year Ended June 30, 2010 

Program Revenues 

Operating 

Capital 

Charges for Grants and Grants and 

Functions/Programs Expenses Services Contributions Contributions 

Governmental Activities: 

Legislative and Administration $ 24,023,012 $ 8,990 $ 4,355,058 $ 

- 

Community Development 9,634,162 1,472,210 1,696,862 - 

Public Works 17,574,871 924,062 2,943,244 - 

Water and Power 503,095 8,200 - - 

Community and Safety Services 23,219,777 3,724,638 265,931 367,744 

Administrative Services 12,431,539 1,313,723 2,020,775 - 

Cerritos Center for the Performing Arts 10,795,353 4,620,793 16,000 246,046 

Unallocated infrastructure depreciation 1,051,981 - - - 

Interest and fiscal charges 16,114,428 - - - 

Total Governmental Activities 115,348,218 12,072,616 11,297,870 613,790 

Business-Type Activities: 

Water 9,690,959 7,032,634 - 109,677 

Reclaimed Water 1,351,283 698,021 - - 

Electric Utility 6,524,284 4,637,710 - - 

Total Business-Type Activities 17,566,526 12,368,365 - 109,677 

Total $ 132,914,744 $ 24,440,981 $ 11,297,870 $ 723,467 

General Revenues: 

Taxes: 

Sales taxes 

Property taxes 

Motor vehicle taxes 

Franchise taxes 

Transient occupancy taxes 

Other taxes 

Investment and rental income 

Miscellaneous 

Total General Revenues 

Changes in Net Assets 

Net Assets - Beginning of Year 

Net Assets - End of Year 


18

Net (Expense) Revenue and 

Changes in Net Assets 


Activities Activities Total 

$ (19,658,964) $ - $ (19,658,964) 

(6,465,090) - (6,465,090) 

(13,707,565) - (13,707,565) 

(494,895) - (494,895) 

(18,861,464) - (18,861,464) 

(9,097,041) - (9,097,041) 

(5,912,514) - (5,912,514) 

(1,051,981) - (1,051,981) 

(16,114,428) - (16,114,428) 

(91,363,942) - (91,363,942) 

- (2,548,648) (2,548,648) 

- (653,262) (653,262) 

- (1,886,574) (1,886,574) 

- (5,088,484) (5,088,484) 

$ (91,363,942) $ (5,088,484) $ (96,452,426) 

17,166,138 - 17,166,138 

34,842,837 - 34,842,837 

4,382,067 - 4,382,067 

1,498,545 - 1,498,545 

356,119 - 356,119 

286,895 - 286,895 

20,581,624 97,855 20,679,479 

1,132,936 - 1,132,936 

80,247,161 97,855 80,345,016 

(11,116,781) (4,990,629) (16,107,410) 

299,543,601 44,077,149 343,620,750 

$ 288,426,820 $ 39,086,520 $ 327,513,340 

19


20

FUND FINANCIAL STATEMENTS 

21


Balance Sheet 


June 30, 2010 

Redevelopment Redevelopment 

Agency Agency Nonmajor Total 

Debt Service Capital Projects Governmental Governmental 

General Fund Fund Funds Funds 

ASSETS 

Cash and investments $ 71,311,235 $ 23,269,018 $ 13,952,937 $ 6,426,461 $ 114,959,651 

Restricted assets: 

Cash 9,959,056 - - - 9,959,056 

Investments with fiscal agents - 16,826,527 - - 16,826,527 

Receivables: 

Accounts 4,736,415 - 189,836 1,191,107 6,117,358 

Notes - - 2,395,506 - 2,395,506 

Interest 197,273 54,702 25,222 14,915 292,112 

Other 1,945 1,781,338 - 8,053 1,791,336 

Due from other funds 3,691,630 - - - 3,691,630 

Prepaid expenses 814,315 - - 550 814,865 

Inventories 23,883 - - - 23,883 

Land held for resale or lease - - 1,953,330 - 1,953,330 

Advances to other funds 101,784,752 - 11,812,007 - 113,596,759 

Total Assets $ 192,520,504 $ 41,931,585 $ 30,328,838 $ 7,641,086 $ 272,422,013 

LIABILITIES AND 

FUND BALANCES 

Liabilities: 

Accounts payable and accrued liabilities $ 3,310,931 $ - $ 649,891 $ 717,983 $ 4,678,805 

Accrued salaries and benefits 1,527,806 - - 52,160 1,579,966 

Deferred revenue 4,222,810 - 2,628,772 565,475 7,417,057 

Deposits payable 358,883 - 40,833 - 399,716 

Due to other funds - 1,796,734 1,734,145 29,136 3,560,015 

Due to other agencies - 776,000 - - 776,000 

Advances from other funds - 105,412,007 - - 105,412,007 

Total Liabilities 9,420,430 107,984,741 5,053,641 1,364,754 123,823,566 

Fund Balances: 

Reserved: 

General fund 102,622,950 - - - 102,622,950 

Land held for resale or lease - - 1,953,330 - 1,953,330 

Unreserved, designated for, reported in: 

General fund 11,659,056 - - - 11,659,056 

Special revenue funds - - - 6,275,361 6,275,361 

Capital projects funds - - 23,321,867 971 23,322,838 

Unreserved, undesignated 68,818,068 (66,053,156) - - 2,764,912 

Total Fund Balances 183,100,074 (66,053,156) 25,275,197 6,276,332 148,598,447 

Total Liabilities and 

Fund Balances $ 192,520,504 $ 41,931,585 $ 30,328,838 $ 7,641,086 $ 272,422,013 


22


Reconciliation of the Governmental Funds Balance Sheet 

to the Government-Wide Statement of Net Assets 

June 30, 2010 

Total Fund Balances - Total Governmental Funds $ 148,598,447 

Amounts reported for governmental activities in the statement of net assets are different because: 

Capital assets used in governmental activities are not financial resources and therefore are not 

reported in governmental funds. 

Cost $ 405,086,194 

Less: Accumulated depreciation (107,027,352) 

298,058,842 

Revenue earned but not available to pay for current period expenditures for governmental funds 

is deferred. 

2,797,715 

Internal service funds are used by management to charge the costs of various city activities to 

individual government. The assets and liabilities of the internal service funds are included in 

the statement of net assets. 

15,493,315 

Long-term liabilities applicable to the City governmental activities are not due and payable in 

the current period and accordingly are not reported as fund liabilities. All liabilities, both 

current and long-term, are reported in the Statement of Net Assets: 

Tax allocation bonds payable $ (167,152,500) 

Note payable (1,025,000) 

Compensated absences payable (2,512,435) 

Claims payable (1,917,561) 

OPEB liabilities (2,015,775) 

Unamortized bond premium (4,293,775) 

Unamortized deferred charge on refunding of bonds 1,843,196 

Unamortized bond discount 862,885 

Unamortized issuance cost 1,407,931 

(174,803,034) 

Accrued interest payable for the interest due on long-term liabilities has not been reported in the 

governmental funds. 

(1,718,465) 

Net Assets of Governmental Activities $ 288,426,820 


23


Statement of Revenues, Expenditures and Changes in Fund Balances 



REVENUES: 

Redevelopment Redevelopment 

Agency Agency Nonmajor Total 

Debt Service Capital Projects Governmental Governmental 

General Fund Fund Funds Funds 

Property, sales, and other taxes $ 20,507,251 $ 32,144,708 $ - $ - $ 52,651,959 

Licenses and permits 1,913,968 - - - 1,913,968 

Fines and forfeitures 1,103,441 - - - 1,103,441 

Investment and rental income 16,468,213 580,417 2,583,324 136,365 19,768,319 

Revenues from other agencies 10,976,983 - - 5,637,027 16,614,010 

Current fees and services 6,932,698 - - 157,320 7,090,018 

Franchises 1,498,545 - - 6,307 1,504,852 

Other revenues 1,706,500 - 32,392 109,183 1,848,075 

Total Revenues 61,107,599 32,725,125 2,615,716 6,046,202 102,494,642 

EXPENDITURES: 

Current: 

Legislative and Administration 2,707,891 13,656,362 4,982,491 11,140 21,357,884 

Community Development 2,864,679 - - 1,793,123 4,657,802 

Public Works 10,908,071 - - 5,219,166 16,127,237 

Water and Power 73,683 - - 32,140 105,823 

Community and Safety Services 21,217,358 - - 134,604 21,351,962 

Administrative Services 10,317,186 - - 329,302 10,646,488 

Cerritos Center for the Performing Arts 8,781,832 - - - 8,781,832 

Capital outlay - - 15,753,370 2,780,479 18,533,849 

Debt service: 

Principal retirement - 7,260,000 - - 7,260,000 

Interest - 16,261,275 - - 16,261,275 

Total Expenditures 56,870,700 37,177,637 20,735,861 10,299,954 125,084,152 

REVENUES OVER 

(UNDER) EXPENDITURES 4,236,899 (4,452,512) (18,120,145) (4,253,752) (22,589,510) 

OTHER FINANCING SOURCES (USES): 

Transfers in 2,000,000 - 18,428,942 5,130,074 25,559,016 

Transfers out (4,581,877) (18,428,942) - (2,548,197) (25,559,016) 

Total Other Financing Sources (Uses) (2,581,877) (18,428,942) 18,428,942 2,581,877 - 

Net Change in Fund Balances 1,655,022 (22,881,454) 308,797 (1,671,875) (22,589,510) 

FUND BALANCES: 

Beginning of Year 181,445,052 (43,171,702) 24,966,400 7,948,207 171,187,957 

End of Year $ 183,100,074 $ (66,053,156) $ 25,275,197 $ 6,276,332 $ 148,598,447 


24


Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes 

in Fund Balances to the Government-Wide Statement of Activities 


Net Change in Fund Balance - Total Governmental Funds: $ (22,589,510) 

Amounts reported for governmental activities in the Statement of Activities are different because: 

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost 

of these assets is allocated over their estimated useful lives and reported as depreciation expense. 

Capital outlays $ 18,533,849 

Less: Capital outlay related to repair and maintenance (5,180,543) 

Disposition of capital assets (23,067) 

Depreciation expense (6,651,779) 

6,678,460 

Revenue in the Statement of Activities that does not provide current financial resources is not reported as 

revenue in governmental funds. 

1,736,795 

Internal service funds are used by management to charge the costs of certain activities, such as equipment 

replacement and inventory usage fees to individual funds. The change in net assets of internal service funds 

is reported within governmental activities. 

(400,950) 

The issuance of long-term liabilities provides current financial resources to governmental funds, while the 

repayment of the principal of long-term liabilities consumes the current financial resources of governmental 

funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect 

of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts 

are deferred and amortized in the statement of activities. This amount is the net effect of these differences in 

the treatment of long-term liabilities and related items. 

Debt issued or incurred: 

Principal payments $ 7,260,000 

Change in compensated absences payable (15,087) 

Change in claim payable (1,917,561) 

Change in OPEB liabilities (2,015,775) 3,311,577 

Some expenses reported in the Statement of Activities do not require the use of current financial resources 

and therefore are not reported as expenditures in the governmental funds. 

Accrued interest 144,135 

Amortization of bond premium 306,699 

Amortization of deferred charge on refunding (141,785) 

Amortization of bond discount (61,635) 

Amortization of issuance costs (100,567) 146,847 

Change in Net Assets of Governmental Activities $ (11,116,781) 


25


26

PROPRIETARY FUND FINANCIAL STATEMENTS 

27




June 30, 2010 

Governmental 

Business-Type Activities - Enterprise Funds 

Activities - 

Water Reclaimed Electric Total Enterprise Internal 

Fund Water Utility Funds Service Funds 

ASSETS 

Current Assets: 

Cash and investments $ 4,107,021 $ - $ 26,380 $ 4,133,401 $ 15,501,407 

Accounts receivable 1,015,256 143,755 481,268 1,640,279 - 

Interest receivable 9,532 - 61 9,593 35,978 

Prepaid expenses 38,580 3,930 2,538,764 2,581,274 - 

Total Current Assets 5,170,389 147,685 3,046,473 8,364,547 15,537,385 

Noncurrent Assets: 

Capital assets: 

Construction in progress - - - - - 

Building and structures 4,947,697 1,315,000 - 6,262,697 - 

Water mains and lines 27,788,342 13,068,932 - 40,857,274 - 

Equipment 4,023,715 120,278 - 4,143,993 - 

Water rights acquired 2,259,378 - - 2,259,378 - 

Electric utility rights acquired - - 14,105,000 14,105,000 - 

Accumulated depreciation (17,921,130) (6,950,121) (2,350,833) (27,222,084) - 

Total Noncurrent Assets 21,098,002 7,554,089 11,754,167 40,406,258 - 

Total Assets 26,268,391 7,701,774 14,800,640 48,770,805 15,537,385 

LIABILITIES 

Current Liabilities: 

Accounts payable 473,770 14,980 491,159 979,909 44,070 

Accrued salaries and benefits 66,290 7,150 73,440 - 

Deposits payable 56,632 - - 56,632 - 

Due to other funds - 131,615 - 131,615 - 

Compensated absences 64,484 - - 64,484 - 

Total Current Liabilities 661,176 153,745 491,159 1,306,080 44,070 

Noncurrent Liabilities: 

Advance from other funds - - 8,184,752 8,184,752 - 

Compensated absences 193,453 - - 193,453 - 

Total Noncurrent Liabilities 193,453 - 8,184,752 8,378,205 - 

Total Liabilities 854,629 153,745 8,675,911 9,684,285 44,070 

NET ASSETS 

Invested in capital assets 21,098,002 7,554,089 11,754,167 40,406,258 - 

Unrestricted 4,315,760 (6,060) (5,629,438) (1,319,738) 15,493,315 

Total Net Assets $ 25,413,762 $ 7,548,029 $ 6,124,729 $ 39,086,520 $ 15,493,315 


28


Statement of Revenues, Expenses and Changes in Net Assets 



Governmental 

Business-Type Activities - Enterprise Funds 

Activities - 



OPERATING REVENUES: 

Sales of water: 

Regular $ 5,631,671 $ 698,021 $ - $ 6,329,692 $ 

- 

Wholesale 1,142,858 - - 1,142,858 - 

Sales of electricity: 

Regular - - 3,532,311 3,532,311 - 

Resale - - 430 430 - 

Gas sales - - 245,160 245,160 - 

Fire lines 241,557 - - 241,557 - 

Charges for services 16,314 - - 16,314 - 

Other agency contribution - - 859,809 859,809 - 

Other revenues 234 - - 234 - 

Total Operating Revenues 7,032,634 698,021 4,637,710 12,368,365 - 

OPERATING EXPENSES: 

Management 2,557,940 306,010 172,090 3,036,040 - 

Production and distribution 4,767,936 48,380 - 4,816,316 - 

Operations 922,710 611,590 5,005,091 6,539,391 - 

Inspections 362,390 43,660 - 406,050 - 

Billings and collection 282,658 31,960 - 314,618 - 

Administrative costs - - - - 745,760 

Depreciation 797,325 309,683 470,166 1,577,174 - 

Total Operating Expenses 9,690,959 1,351,283 5,647,347 16,689,589 745,760 

OPERATING INCOME (LOSS) (2,658,325) (653,262) (1,009,637) (4,321,224) (745,760) 

NONOPERATING REVENUES (EXPENSES): 

Investment income 97,579 - 276 97,855 344,810 

Interest expense - - (876,937) (876,937) - 

Gain (loss) on sale of equipment - - - - - 

Total Nonoperating Revenues (Expenses) 97,579 - (876,661) (779,082) 344,810 

INCOME (LOSS) BEFORE CAPITAL 

CONTRIBUTIONS AND TRANSFERS (2,560,746) (653,262) (1,886,298) (5,100,306) (400,950) 

CAPITAL CONTRIBUTIONS AND TRANSFERS: 

Capital contributions 109,677 - - 109,677 - 

Transfers in - 137,299 - 137,299 - 

Transfers out (137,299) - - (137,299) - 

Total Capital Contributions and Transfers (27,622) 137,299 - 109,677 - 

Change in Net Assets (2,588,368) (515,963) (1,886,298) (4,990,629) (400,950) 

NET ASSETS: 

Beginning of the Year 28,002,130 8,063,992 8,011,027 44,077,149 15,894,265 

End of the Year $ 25,413,762 $ 7,548,029 $ 6,124,729 $ 39,086,520 $ 15,493,315 


29


Statement of Cash Flows 



Governmental 

Business-Type Activities Enterprise Funds 

Activities - 



CASH FLOWS FROM OPERATING ACTIVITIES: 

Cash received from customers $ 7,104,916 $ 750,556 $ 4,975,735 $ 12,831,207 $ 

- 

Cash paid to other suppliers of goods or services (5,873,764) (720,610) (4,777,481) (11,371,855) (416,000) 

Cash paid to employees (2,498,705) (298,860) (172,090) (2,969,655) (285,690) 

Net Cash Provided by 

(Used for) Operating Activities (1,267,553) (268,914) 26,164 (1,510,303) (701,690) 

CASH FLOWS FROM NONCAPITAL 

FINANCING ACTIVITIES: 

Transfers from/(to) other funds (137,299) 137,299 - - - 

Cash advances from other funds - 131,615 876,938 1,008,553 - 

Net Cash Provided by (Used for) 

Noncapital Financing Activities (137,299) 268,914 876,938 1,008,553 - 

CASH FLOWS FROM CAPITAL AND 

RELATED FINANCING ACTIVITIES: 

Acquisition of capital assets (71,011) - (876,937) (947,948) - 

Capital contributions - cash 109,677 - - 109,677 - 


Capital and Related Financing Activities 38,666 - (876,937) (838,271) - 

CASH FLOWS FROM INVESTING ACTIVITIES: 

Interest income received 88,047 - 215 88,262 308,832 


Investing Activities 88,047 - 215 88,262 308,832 

Net Increase (Decrease) in 

Cash and Cash Equivalents (1,278,139) - 26,380 (1,251,759) (392,858) 

CASH AND CASH EQUIVALENTS: 

Beginning of Year 5,385,160 - - 5,385,160 15,894,265 

End of Year $ 4,107,021 $ - $ 26,380 $ 4,133,401 $ 15,501,407 

RECONCILIATION OF OPERATING 

INCOME (LOSS) TO NET CASH PROVIDED BY 

(USED FOR) OPERATING ACTIVITIES: 

Operating income (loss) $ (2,658,325) $ (653,262) $ (1,009,637) $ (4,321,224) $ (745,760) 

Adjustments to reconcile operating income to net cash 

provided by (used for) operating activities: 

Depreciation expense 797,325 309,683 470,166 1,577,174 - 

Change in assets and liabilities: 

(Increase) decrease in accounts receivable 110,862 56,465 338,025 505,352 - 

(Increase) decrease in prepaid expenses (38,580) (3,930) (251,559) (294,069) - 

(Increases) decrease in inventories - - - - - 

(Increase) decrease in other receivables - - - - - 

Increase (decrease) in accounts payable 458,780 14,980 479,169 952,929 44,070 

Increase (decrease) in accrued salaries and benefits (198,702) 7,150 - (191,552) - 

Increase (decrease) in deposits payable 3,150 - - 3,150 - 

Increase (decrease) in compensated absences 257,937 - - 257,937 - 

Net Cash Provided by 

(Used for) Operating Activities $ (1,267,553) $ (268,914) $ 26,164 $ (1,510,303) $ (701,690) 


30


Index to Notes to Basic Financial Statements 


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ·················································· 33 

A. Financial Reporting Entity ···························································································· 33 

B. Basis of Accounting and Measurement Focus ··································································· 34 

C. Use of Restricted/Unrestricted Net Assets ······································································· 37 

D. Cash and Cash Equivalents ·························································································· 37 

E. Investments ··············································································································· 37 

F. Inventories ················································································································ 37 

G. Capital Assets ············································································································ 37 

H. Land Held for Resale or Lease ······················································································· 38 

I. Compensated Absences Payable ···················································································· 38 

J. Claims and Judgments ································································································· 39 

K. Property Taxes ··········································································································· 39 

L. Estimates ·················································································································· 39 

2. CASH AND INVESTMENTS ··························································································· 40 

A. Deposits ··················································································································· 40 

B. Investments ··············································································································· 41 

C. Investments Authorized by Debt Agreements ·································································· 41 

D. Risk Disclosures ········································································································· 42 

E. Investments in State Investment Pool ·············································································· 44 

3. PREPAID EXPENSES ······································································································ 44 

4. NOTES RECEIVABLE ····································································································· 45 

5. INTERFUND TRANSACTIONS ······················································································· 45 

A. Government-Wide Financial Statements ·········································································· 45 

B. Fund Financial Statements ···························································································· 45 

6. LAND HELD FOR RESALE OR LEASE ·············································································· 47 

7. CAPITAL ASSETS ·········································································································· 49 

8. DEFERRED/UNEARNED REVENUE ················································································· 51 

Page 

31


Index to Notes to Basic Financial Statements, Continued 


9. LONG TERM DEBT ········································································································ 52 

A. Los Cerritos Redevelopment Project 1993 Revenue Bonds, Series B ······································· 53 

B. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A ·················· 53 

C. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B ··················· 54 

D. Los Cerritos and Los Coyotes Redevelopment Project-Magnolia Power Project B, 

Series 2003 Revenue Bonds ··························································································· 55 

E. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series A ······································ 56 

F. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series B ······································· 57 

G. Los Coyotes Redevelopment Project 1998 Tax Allocation Bonds, Series A ······························· 58 

H. Los Coyotes Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A ·················· 58 

I. Los Coyotes Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B ··················· 59 

J. Los Cerritos and Los Coyotes Redevelopment Project-Magnolia Power Project B, 

Series 2003 Revenue Bonds ·························································································· 60 

K. Los Cerritos Redevelopment Project-Note Payable ···························································· 62 

L. Compensated Absences ······························································································· 62 

M. Net OPEB Obligation ·································································································· 62 

N. Claims Payable – General Liability ················································································· 62 

10. RESERVES AND DESIGNATIONS OF FUND BALANCES ·················································· 63 

11. RETIREMENT PLAN ······································································································ 64 

A. Defined Benefit Pension Plan ························································································ 64 

B. Post-Retirement Health Care Benefits ············································································· 66 

C. Other Defined Contribution Plans ·················································································· 68 

12. LIABILITY, PROPERTY AND WORKERS’ COMPENSATION PROTECTION ························ 68 

A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement ································ 68 

B. Self-Insurance Programs of the Authority ········································································ 69 

C. Purchased Insurance ··································································································· 69 

D. Adequacy of Protection ······························································································· 70 

E. Retroactive Deposit ····································································································· 70 

13. OTHER REQUIRED DISCLOSURES ················································································· 71 

A. Deficit Fund Balances ·································································································· 71 

B. Excess Expenditures over Appropriations ········································································ 72 

14. COMMITMENTS AND CONTINGENCIES ······································································· 72 

A. Lawsuits ··················································································································· 72 

B. Contract with Los Angeles County Sheriff’s Department ···················································· 72 

C. $5,640,000 Tax Allocation Bonds arrangement with Commonwealth Cousins I, LLC ················· 73 

D. Electric Utility ··········································································································· 73 

15. LEASE INCOME UNDER OPERATING LEASES ································································ 73 

16. PROPROSITION 1A BORROWING BY THE STATE OF CALIFORNIA ·································· 74 

17. SUBSEQUENT EVENT ··································································································· 74 

Page 

32


Notes to Basic Financial Statements 


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

The basic financial statements of the City of Cerritos, California, (City) have been prepared in conformity 

with generally accepted accounting principles (GAAP) as applied to governmental agencies. The 

Governmental Accounting Standards Boards (GASB) is the accepted standard setting body for establishing 

governmental accounting and financial reporting principles. The following is a summary of the significant 

policies: 

A. Financial Reporting Entity 

The City of Cerritos was incorporated on April 26, 1956 as a charter city under the laws of the State of 

California and enjoys all the rights and privileges allowed by its charter. The City is governed by an elected 

five-member council. 

As required by generally accepted accounting principles (GAAP), the accompanying financial statements 

present the City and its component units. GASB Statement No. 14, The Financial Reporting Entity, defines 

component units as legally separate entities that meet any one of the following tests: 

 

 

 

The City appoints the voting majority of the board of the potential component unit and: 

o 

o 

is able to impose its will on the component unit and/or 

is in a relationship of financial benefit or burden with the potential component unit. 

The potential component unit is fiscally dependent upon the City. 

The financial statements of the City would be misleading if data from the potential component units 

were omitted. 

Management determined that the following component units should be blended based on the criteria 

above: 

Cerritos Redevelopment Agency - The Cerritos Redevelopment Agency (Agency) was activated in 

November, 1969 pursuant to the State of California Health and Safety Code, Section 33000 entitled 

“Community Development Law”. The primary purpose of the Agency is to eliminate physically and 

economically blighted areas by encouraging the development of residential, commercial, industrial, 

recreational and public facilities. The Agency has undertaken the Los Cerritos Redevelopment Project, 

encompassing approximately 940 acres, and the Los Coyotes Redevelopment Project that covers 1,615 

acres in the eastern section of the City. The Agency, through the two project areas, has constructed 

various facilities that are being utilized by the City. 

Cerritos Public Financing Authority - The Cerritos Public Financing Authority (Authority) was formed 

pursuant to a Joint Exercise of Powers Agreement, dated May 18, 1993 by and between the City and the 

Agency. The purpose of the Authority is to provide financing for public improvements and capital 

expenditures and for the repayment of existing debt. 

These component units are included in the primary government because of the significance of their 

financial or operational relationship and due to the same governing body as the City. 

The Agency issues separate component unit financial statements and these can be obtained from the City’s 

Administrative Services Department located at 18125 Bloomfield Avenue, Cerritos, California 90703. 

Separate financial statements are not prepared for the Authority. 

33


Notes to Basic Financial Statements, Continued 


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued 

B. Basis of Accounting and Measurement Focus 

The accounts of the City are organized on the basis of funds, each of which is considered a separate 

accounting entity. The operations of each fund are accounted for in a separate set of self-balancing accounts 

that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. 

City resources are allocated to and accounted for in individual funds based upon the purpose for which 

they are to be spent and the means by which spending activities are controlled. 

Government-Wide Financial Statements 

The City’s Government-Wide Financial Statements include a Statement of Net Assets and a Statement of 

Activities. These statements present summaries of Governmental and Business-Type Activities for the City 

accompanied by a total column. 

The Government-Wide Financial Statements are presented on an “economic resources” measurement focus 

and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital 

assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying 

Statement of Net Assets. The Statement of Activities presents changes in net assets. Under the accrual basis 

of accounting, revenues are recognized in the period in which they are earned while expenses are 

recognized in the period in which the liability is incurred. The types of transactions reported as program 

revenues for the City are reported in three categories: 1) charges for services, 2) operating grants and 

contributions, and 3) capital grants and contributions. 

Certain eliminations have been made as prescribed by GASB Statement No. 34 in regards to interfund 

activities, payables and receivables including the corresponding deferred revenues. All internal balances in 

the Statement of Net Assets have been eliminated except those representing balances between the 

governmental activities and the business-type activities, which are presented as internal balances and 

eliminated in the total primary government column. In the Statement of Activities, internal service fund 

transactions have been eliminated. However, transactions between governmental and business-type 

activities have not been eliminated. The following interfund activities have been eliminated: 

 

 

 

Due to and from other funds 

Advances to and from other funds 

Transfers in and out 

The City applies all applicable GASB pronouncements (including all NCGA Statements and Interpretations 

currently in effect) as well as the following pronouncements issued on or before November 30, 1989, to the 

business-type activities, unless those pronouncements conflict with or contradict GASB pronouncements: 

Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board 

(APB) Opinions, and Accounting Research Bulletins (ARB) of the Committee on Accounting Procedure. 

The City applies all applicable FASB Statements and Interpretations issued after November 30, 1989, except 

those that conflict with or contradict GASB pronouncements. 

34





B. Basis of Accounting and Measurement Focus, Continued 

Governmental Fund Financial Statements 

Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, 

Expenditures and Changes in Fund Balance for all major governmental funds and nonmajor funds 

aggregated. An accompanying schedule is presented to reconcile and explain the differences in net assets as 

presented in these statements to the net assets presented in the Government-Wide financial statements. The 

City has presented all major funds that met the qualifications for major fund reporting. 

All governmental funds are accounted for on a spending or "current financial resources" measurement 

focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities 

are included on the Balance Sheets. The Statement of Revenues, Expenditures and Changes in Fund Balance 

presents increases (revenues and other financing sources) and decreases (expenditures and other financing 

uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the 

accounting period in which they become both measurable and available to finance expenditures of the 

current period. 

Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days 

after year-end) are recognized when due. The primary revenue sources, which have been treated as 

susceptible to accrual by the City, are property taxes, sales taxes, taxpayer-assessed tax revenues (transient 

occupancy taxes, franchise taxes, etc.), certain grant revenues and earnings on investments. Expenditures 

are recorded in the accounting period in which the related fund liability is incurred. 

Deferred revenues arise when potential revenues do not meet both the “measurable” and “available” criteria 

for recognition in the current period. Deferred revenues also arise when the government receives resources 

before it has a legal claim to them, as when grant monies are received prior to incurring qualifying 

expenditures. In subsequent periods when both revenue recognition criteria are met or when the 

government has a legal claim to the resources, the deferred revenue is removed from the balance sheet and 

revenue is recognized. 

Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided 

to explain the differences created by the integrated approach of GASB Statement No. 34. 

Proprietary Fund Financial Statements 

Proprietary Fund Financial Statements include a Statement of Net Assets, a Statement of Revenues, 

Expenses and Changes in Net Assets, and a Statement of Cash Flows for each major proprietary fund. 

Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual 

basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on 

the Statement of Net Assets. The Statement of Revenues, Expenses and Changes in Net Assets presents 

increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting, 

revenues are recognized in the period in which they are earned while expenses are recognized in the period 

in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions 

have been made for uncollectible amounts. 

35






Proprietary Fund Financial Statements, Continued 

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating 

revenues and expenses generally result from providing services and producing and delivering goods in 

connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the 

proprietary funds are charges to customers for sales and services. Operating expenses for the proprietary 

funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All 

revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. 

The City reports the following major governmental funds: 

The General Fund is the general operating fund of the City. All general tax revenues and other receipts 

not allocated by law or contractual agreement to other funds are accounted for in this fund. 

Expenditures of this fund include general operating costs not paid through other funds. 

The Redevelopment Agency Debt Service Fund is used to account for tax increment revenue and related 

interest income. Tax increment is property tax revenue based on the increase in valuation of the project 

areas over the “frozen” base year. This fund is used for the repayment of principal and interest on the 

indebtedness of the Agency. 

The Redevelopment Agency Capital Projects Fund is used to account for advances from the City of 

Cerritos, bond proceeds available for project improvements, a portion of tax increment revenues set 

aside for low/moderate income housing projects, interest income on invested funds and certain 

miscellaneous income. The funds are expended primarily for administrative expenses and 

redevelopment project costs. 

The City reports the following major proprietary funds: 

The Water Fund is used to account for the provision of water to the residents and businesses of the City. 

All activities necessary to provide such services are accounted for in this fund including, but not limited 

to, administration, operations, maintenance, construction, and financing. 

The Reclaimed Water Fund is used to account for the construction, operations, and maintenance of the 

City owned reclaimed wastewater system. 

The Electric Utility Fund is used to account for provided retail electricity provided by the City. Initially, 

major accounts for both the City and the ABC Unified School District were served. Additional accounts 

have been added since inception to utilize the full output of the Magnolia plant allocated to Cerritos. All 

activities necessary to provide such services are accounted for in this fund including, but not limited to, 

administration, operations, maintenance, construction financing and related debt service. 

36






Additionally, the City reports the following fund types: 

The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are 

legally restricted or otherwise designated for specific purposes. 

The Capital Projects Fund is used to account for financial resources used for the acquisition or 

construction of major capital facilities not accounted for in other funds. 

The Equipment Replacement Fund, an Internal Service Fund, is used to account for the regular 

maintenance and replacement of the City’s capital equipment and office equipment inventory. 

C. Use of Restricted/Unrestricted Net Assets 

When an expense is incurred for purposes for which both restricted and unrestricted net assets are 

available, the City’s policy is to apply restricted net assets first, then unrestricted net assets as they are 

needed. 

D. Cash and Cash Equivalents 

A substantial portion of the City’s investments are in short-term liquid instruments, with original maturities 

of three months or less (excluding fiscal agent investments). The Enterprise and Internal Service Funds 

participate in the pooling of City-wide cash and investments. Amounts from the pool are available to these 

funds on demand. As a result, the cash and investments of the Enterprise and Internal Service Funds are 

considered to be cash and cash equivalents for Statement of Cash Flow purposes. The Statement of Cash 

Flows is presented using the direct method. 

E. Investments 

Investments are stated at fair value (quoted market price or best available estimate thereof). 

F. Inventories 

Inventories are valued at average cost. Inventories in the General Fund are recorded based on the 

consumption (capitalization) method and are offset by a fund balance reserve. 

G. Capital Assets 

Capital assets (including infrastructure) are recorded at cost where historical records are available and at an 

estimated original cost where no historical records exist. Contributed capital assets are valued at their 

estimated fair market value at the date of contribution. Generally, capital asset purchases in excess of $2,500 

are capitalized if they have an expected useful life of 1 year or more. 

37





G. Capital Assets, Continued 

Capital assets include additions to public domain (infrastructure), certain improvements including 

pavement, curb and gutter, sidewalks, traffic control devices, street lights, sewers, bridges and right-of-way 

corridors within the City. The City has valued and recorded all infrastructure asset data as of June 30, 2010. 

In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34 which 

requires the inclusion of infrastructure capital assets in local governments’ basic financial statements. For 

infrastructure systems, the City elected to use the “Basic Approach” as defined by GASB Statement No. 34 

for infrastructure reporting. 

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend 

assets lives are not capitalized. 

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest 

incurred during the construction phase of the capital assets of business-type activities is included as part of 

the capitalized value of the assets constructed. 

Capital assets used in operations are depreciated over their estimated useful lives using the straight-line 

method. The lives used for depreciation purposes of each capital asset class are: 

Buildings 

Improvements other than buildings 

Water mains and lines 

Water rights 

Vehicles 

Machinery and equipment 

Office furniture, computers and equipment 

Leased property 

Infrastructure 

40 years 

10 to 40 years 

65 years 

40 years 

5 to 15 years 

5 to 15 years 

3 to 15 years 

5 to 10 years 

20 to 75 years 

H. Land Held For Resale or Lease 

Land held for resale or lease is carried in the Redevelopment Agency Capital Projects Fund at the lower of 

cost or market value at acquisition. 

I. Compensated Absences Payable 

In governmental funds vacation and sick leave are recorded as expenditures in the year paid. Accordingly, 

the entire unpaid liability for the governmental funds is recorded as a long-term obligation in the 

government-wide financial statements only. 

Unpaid compensated absences in proprietary funds are recorded as a liability in those funds as the vested 

benefits accrue to the employees. 

38





J. Claims and Judgments 

When it is probable that a claim or judgment liability has been incurred at year end, and the amount of the 

loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage. The 

City is a member of the California Joint Powers Insurance Authority (CJPIA). The City believes that its 

deposits with the CJPIA are adequate to cover all claims, including claims incurred but not reported. 

K. Property Taxes 

Under California law, property taxes are assessed and collected by the counties up to 1% of assessed value, 

plus other increases approved by the voters. The property taxes go into a pool, with the County, and are 

then allocated to the cities based on complex formulas. The following are annual dates pertaining to 

property taxes: 

Lien Date January 1 

Levy Date June 30 

Due Dates November 1 and February 1 

Delinquency Dates December 10 and April 10 

L. Estimates 

The preparation of the basic financial statements in conformity with accounting principles generally 

accepted in the United States of America requires management to make estimates and assumptions that 

affect certain reported amounts and disclosures. Accordingly, actual results could differ from those 

estimates. 

2. CASH AND INVESTMENTS 

The City maintains a cash and investment pool, which includes cash balances and authorized investments 

of all funds. The City has the following cash and investments at June 30: 

Government-Wide 



Activities Activities 

Total 

Cash and Investments $ 130,461,058 $ 4,133,401 $ 134,594,459 

Restricted Cash and Investments: 

Cash 9,959,056 - 9,959,056 

Investments with fiscal agents 16,826,527 - 16,826,527 

Total $ 157,246,641 $ 4,133,401 $ 161,380,042 

39




2. CASH AND INVESTMENTS, Continued 

The City’s Cash and Investments at June 30 in more detail: 

Cash and cash equivalents: 

Petty cash $ 11,785 

Demand deposits 1,303,571 

Total cash and cash equivalents 1,315,356 

Investments: 

Local Agency Investment Fund 83,016,653 

Federal Agency Issues 65,094,446 

Corporate Obligations 3,001,495 

Certificates of Deposits 300,000 

Investment Contracts 3,206,533 

Money Market Mutual Funds 5,445,559 

Total investments 160,064,686 

Total cash and investments $ 161,380,042 

A. Deposits 

The carrying amounts of the City’s demand deposits were $1,303,571 at June 30, 2010. Bank balances before 

reconciling items were $2,198,685 at that date, the total amount of which was collateralized or insured with 

securities held by the pledging financial institutions in the City’s name as discussed below. 

The California Government Code requires California banks and savings and loan associations to secure the 

City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this 

manner shall have the effect of perfecting a security interest in such collateral superior to those of a general 

creditor. Thus, collateral for cash deposits is considered to be held in the City's name. 

The market value of pledged securities must equal at least 110% of the City's cash deposits. California law 

also allows institutions to secure city deposits by pledging first trust deed mortgage notes having a value of 

150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which 

are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The City, however, has not 

waived the collateralization requirements. 

40





B. Investments 

The table below identifies the investment types that are authorized for the City by the California 

Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain 

provisions of the California Government Code (or the City’s investment policy, where more restrictive) that 

address interest rate risk, credit risk, and concentration of credit risk. This table does not address 

investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements 

of the City, rather than the general provisions of the California Government Code or the City’s investment 

policy. 

Maximum Maximum 

Maximum Percentage Investment 

Authorized Investment Type Maturity of Portfolio * in One Issuer 

United States Treasury Obligations 5 years No Limit No Limit 

U.S. Government Sponsored 

Enterprise Securities 5 years No Limit No Limit 

Banker's Acceptances 180 days 40% 10% 

Commercial Paper 270 days 40% 10% 

Negotiable Certificates of Deposit 5 years 30% 10% 

Repurchase Agreements 1 year No Limit No Limit 

Medium-Term Corporate Notes 5 years 30% 10% 

Money Market Mutual Funds N/A 20% No Limit 

Local Agency Investment Fund (LAIF) N/A No Limit $ 50,000,000 

N/A - Not Applicable 

* Excluding amounts held by bond trustees that are not subject to California Government Code restrictions. 

C. Investments Authorized by Debt Agreements 

Investment of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, 

rather than the general provisions of the California Government Code or the City’s investment policy. 

Investments authorized for funds held by the bond trustee include U.S. Treasury Obligations, U.S. 

Government Sponsored Enterprise Securities, Money Market Mutual Funds and Investment Contracts. 

There were no limitations on the maximum amount that can be invested in one issuer, maximum 

percentage allowed or the maximum maturity of an investment. 

41





D. Risk Disclosures 

Interest Rate Risk – The City’s investment policy manages exposure to interest rate risk by purchasing a 

combination of shorter term and longer term investments and by timing cash flows from maturities so that 

a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide 

the cash flow and liquidity needed for operations. The policy limits investment maturities as a means of 

managing its exposure to fair value losses arising from fluctuating interest rates. Information about the 

sensitivity of the fair values of the City’s investments (including investments held by bond trustees) to 

market interest rate fluctuations is provided by the following table that shows the distribution of the City’s 

investments at maturity: 

Remaining Maturity (in Months) 

12 Months 13 - 24 25 - 60 

Investment Type or Less Months Months Total 

Local Agency Investment Fund (LAIF) $ 83,016,653 $ - $ - $ 83,016,653 

Federal Home Loan Bank (FHLB) - - 19,194,687 19,194,687 

Federal National Mortgage Association (FNMA) - - 8,322,094 8,322,094 

Federal Home Loan Mortgage Corporation (FHLMC) - - 17,093,496 17,093,496 

Federal Farm Credit Bank (FFCB) - 2,001,250 18,481,656 20,482,906 

Government Nat'l Mortgage Association (GNMA) - - 1,263 1,263 

Long Term Corporate Note (LTN) - - 41,667 41,667 

Certificates of Deposit 200,000 100,000 - 300,000 

Medium Term Corporate Notes (MTN) - - 2,959,828 2,959,828 

Investment Contracts - - 3,206,533 3,206,533 

Money Market Mutual Funds 5,445,559 - - 5,445,559 

Total $ 88,662,212 $ 2,101,250 $ 69,301,224 $ 160,064,686 

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D. Risk Disclosures, Continued 

Credit Risk – Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to 

the holder of the investment. This is measured by the assignment of a rating by a nationally recognized 

statistical rating organization. Presented below is the minimum rating required by (where applicable) the 

California Government Code, the City’s investment policy, or debt agreements, and the actual rating at time 

of purchase for each investment type: 

Total Minimum Not 

as of Legal Required 

Investment Type June 30, 2010 Rating AAA Other Unrated to be Rated 

LAIF $ 83,016,653 N/A $ - $ - $ - $ 83,016,653 

FHLB 19,194,687 N/A 19,194,687 - - - 

FNMA 8,322,094 N/A 8,322,094 - - - 

FHLMC 17,093,496 N/A 17,093,496 - - - 

FFCB 20,482,906 N/A 20,482,906 - - - 

GNMA 1,263 N/A 1,263 - - - 

LTN 41,667 N/A - - 41,667 - 

Certificates of deposit 300,000 A-1/P-1 - - 300,000 - 

MTN 2,959,828 A - 2,959,828 - - 

Investment Contracts 3,206,533 N/A 3,206,533 - - - 

Money Market 

Mutual Funds 5,445,559 N - - 5,445,559 - 

Total $ 160,064,686 

$ 68,300,979 $ 2,959,828 $ 5,787,226 $ 83,016,653 

N/A - Not Applicable 

The actual ratings at time of purchase for the Medium Term Corporate Notes (MTN) are as follows: 

Other: 

A+ 2,149,828 

A 810,000 

Total other $ 2,959,828 

Custodial Credit Risk – For deposits, custodial credit risk is the risk that, in the event of the failure of a 

deposit financial institution, a government will not be able to recover its deposits or will not be able to 

recover collateral securities that are in the possession of an outside party. For an investment, custodial 

credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover 

the value of its investments or collateral securities that are in the possession of an outside party. The City’s 

investment policy does not contain legal or policy requirements that would limit the exposure to custodial 

credit risk for deposits or investments, other than the provision for deposits stated in Note 2A. At June 30, 

2010, $1,948,685 of the City’s deposits with financial institutions in excess of federal depository insurance 

limits was held in uncollateralized accounts. 

43





E. Investments in State Investment Pool 

The City is a participant in LAIF which is regulated by California Government Code Section 16429 under 

the oversight of the Treasurer of the State of California. The City’s investments with LAIF at June 30, 2010, 

included a portion of pool funds invested in Structured Notes and Asset-Backed Securities: 

Structured Notes: debt securities (other than asset-backed securities) whose cash flow characteristics 

(coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have 

embedded forwards or options. 

Asset-Backed Securities: generally mortgage-backed securities that entitle their purchasers to receive a share 

of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages 

(for example, Collateralized Mortgage Obligations) or credit card receivables. 

As of June 30, 2010, the City had $83,016,653 invested in LAIF, which had invested 5.42% of the pool 

investment funds in Structured Notes and Asset-Backed securities as compared to 14.71% in the previous 

year. 

3. PREPAID EXPENSES 

Prepaid expenses consisted of the following at June 30, 2010: 

Rate Stablization $ 480,395 

Electric Utility Fund Reserve 2,538,764 

Other 376,980 

Total 3,396,139 

The Electric Utility Fund has prepaid expenses representing payments for the City’s share of fuel reserves, 

capital reserves and debt service reserves relating to the operations of the Magnolia Power Plant. Prepaid 

expenses as of June 30, 2010 for this Fund consisted of the following: 

Fuel reserves $ 651,211 

Capital reserves 1,492,055 

Debt service reserves 395,498 

Total 2,538,764 

44




4. NOTES RECEIVABLE 

Notes receivable consisted of the following at June 30, 2010: 

Balance 

Balance 

June 30, 2009 Additions Deletions June 30, 2010 

Residential Assistance Program $ 2,040,000 $ - $ - $ 2,040,000 

Residental Loan Program 314,356 41,150 - 355,506 

Total $ 2,354,356 $ 41,150 $ - $ 2,395,506 

5. INTERFUND TRANSACTIONS 

A. Governmental-Wide Financial Statements 

At June 30, 2010, the City had the following internal receivable and payable: 

Internal Receivable 

Governmental 

Internal Payable Activities 

Business-Type Activities $ 

8,316,367 

B. Fund Financial Statements 

Due To and Due From Other Funds - At June 30, 2010, the City had the following due to/from other funds: 

Due from Other funds 

Due to Other Funds 


General 

Governmental Funds: 

Redevelopment Agency Debt Service Fund $ 

1,796,734 

Redevelopment Agency Capital Projects Fund 1,734,145 

Nonmajor Governmental Funds 29,136 

Enterprise Fund: 

Reclaimed Water Funds 131,615 

Total $ 

3,691,630 

The interfund amount between the General Fund and the Redevelopment Agency Funds are for 

administrative expenditures paid by the General Fund on behalf of the Agency. All amounts were repaid to 

the General Fund by August 31, 2010. 

45




5. INTERFUND TRANSACTIONS, Continued 

B. Fund Financial Statements, Continued 

Advances To/From Other Funds - At June 30, 2010, the City had the following advances to/from other 

funds: 

Advances to Other Funds 


Redevelopment 

Agency 

General Capital Projects 

Advances from Other Funds Fund Fund Total 


Redevelopment Agency Debt Service Fund $ 93,600,000 $ 11,812,007 $ 105,412,007 


Electric Utility Enterprise Fund 8,184,752 - 8,184,752 

Total $ 101,784,752 $ 11,812,007 $ 113,596,759 

Advances from the General Fund to the Redevelopment Agency were provided to fund capital 

improvement projects in both the Los Cerritos and Los Coyotes projects areas. Interest on the outstanding 

balance on advances payable of $93,600,000 is charged at an annual rate of 8% to the Agency. The Agency 

remits the interest payment to the City on a quarterly basis. All payments to the City for the interest on 

advances payable were paid by August 31, 2010. 

Advances made to the Electric Utility Enterprise Fund in the amount of $8,184,752 from the General Fund 

were used for initial working capital. Interest on the outstanding balance on advances payable is charged at 

an annual rate of 12% to the Electric Utility Enterprise Fund. As of June 30, 2010, interest in the amount of 

$876,938 was incurred and added to the outstanding loan balance. 

Advances from the Low and Moderate Income Housing Capital Project Fund to the Los Cerritos and Los 

Coyotes Redevelopment Agency Debt Service Funds were used to make the payment for the Agency’s 

share of the Supplemental Educational Revenue Augmentation Fund (SERAF) due to the State of California. 

No interest is charged on the outstanding balance on advances payable of $11,812,007. The Debt Service 

Funds remit the interest payments to the Low and Moderate Income Housing Fund on a quarterly basis. 

46




5. INTERFUND TRANSACTIONS, Continued 

B. Fund Financial Statements, Continued 

Transfers - At June 30, 2010, the City had the following transfers in/out: 

Transfers In 


Enterprise Fund 

Redevelopment Nonmajor Reclaimed 

General Agency Governmental Water 

Transfers Out Fund Capital Projects Funds Enterprise Total 


General Fund $ - $ - $ 4,581,877 $ - $ 4,581,877 

Redevelopment Agency Debt Service - 18,428,942 - - 18,428,942 

Nonmajor Governmental Funds 2,000,000 - 548,197 - 2,548,197 


Water - - - 137,299 137,299 

Total $ 2,000,000 $ 18,428,942 $ 5,130,074 $ 137,299 $ 25,696,315 

During the year, the General Fund transferred $4,581,877 to the Nonmajor Governmental Funds related to 

certain capital projects costs and administrative costs within the funds. 

Transfers in the Redevelopment Agency Funds relate to the 20% set aside of tax increment revenues of 

$18,428,942 from the Debt Service Funds to the Capital Projects Low and Moderate Income Housing Fund. 

Transfer in the amount of $2,000,000 was transferred from the Sewer Fund to the General Fund for the 

maintenance and reconstruction of the sewer systems. In addition, the transfer of $548,197 between the 

Nonmajor Governmental Funds relates to the funding of transportation related costs between the 

Proposition “A” and Proposition “C” funds. 

Transfer from the Water Fund of $137,299 to the Reclaimed Water Fund is for operations. 

6. LAND HELD FOR RESALE OR LEASE 

Land held for resale or lease consisted of the following at June 30, 2010: 

Project Area Agency Project Amount 

Los Cerritos - 17501 Studebaker Road Commercial Property $ 586,948 

Los Cerritos - 17423 Studebaker Road Commercial Property 1,366,382 

Total $ 1,953,330 

In September 2005, the Los Cerritos Capital Project Area acquired property for $1,205,662 and provided a 

note in the amount of $1,025,000 payable in ten years. Interest on the note is capitalized as Land Held for 

Resale or Lease in the year it is incurred. Capitalized interest in fiscal year 2009-10 was $36,900. (See Note 

9K) 

47




6. LAND HELD FOR RESALE OR LEASE, Continued 

In addition, the Los Cerritos Capital Project Area purchased property on the corner of Studebaker Road and 

183 rd Street in the amount of $7 million. The property was leased to a new auto dealership. This purchase 

increased the Agency’s portfolio of property holdings and will generate additional revenue in the form of 

ground rents and sales tax. 

The Cerritos Towne Center property has been developed under a disposition and development agreement 

with a developer. Office buildings, a hotel, and a community theater are included in this development 

project. Upon completion of each project, the land is being leased to the developer. Lease contracts and 

agreements showed there were a total of eighteen leases entered into with twelve of the leases related to the 

portion of the Towne Center property. (See Note 15) 

Each of the Senior Housing property sites have been developed under disposition and development 

agreements with a developer. During the construction of each project, the land was transferred to the 

developer under covenants restricting usage of the property for low and moderate income housing. 

In fiscal year 2008, two parcels of property were purchased in the amount of $14,571,561. In an innovative 

partnership, the Agency is working with the ABC Unified School District in the construction of a fifth 

affordable housing project. As proposed, current district offices will move to the purchased property, which 

will be renovated to accommodate district needs. Meanwhile, the new affordable housing project, complete 

with a new park and senior center to compliment the new units will be constructed on the site currently 

occupied by the school district. The Los Angeles County Superior Court released a ruling on December 4, 

2008 that approved the project, which will commence when all legal requirements are secured and all 

necessary clarifications are finalized. The two parcels were transferred to the City’s capital assets account 

per the development agreement with the District. Additionally, the Agency is committed in the amount of 

approximately $5 million for future improvements and relocation costs associated with this development 

agreement. 

48




7. CAPITAL ASSETS 

The following is a summary of capital assets for the governmental activities: 


Balance 

Balance 

July 1, 2009 Additions Deletions June 30, 2010 

Capital assets, not being depreciated: 

Land $ 76,955,827 $ 7,007,380 $ - $ 83,963,207 

Parking structure rights 3,760,000 - - 3,760,000 

Right-of-way 49,184,582 - - 49,184,582 

Public art 4,428,314 - - 4,428,314 

Trees 1,367,878 8,475 (6,336) 1,370,017 

Construction in progress 2,368,918 - (2,130,402) 238,516 

Total capital assets, not being depreciated 138,065,519 7,015,855 (2,136,738) 142,944,636 

Capital assets, being depreciated: 

Buildings 183,582,024 6,503,534 - 190,085,558 

Improvements other than buildings 5,017,486 44,392 (5,000) 5,056,878 

Furniture and equipment 22,677,536 431,112 (329,489) 22,779,159 

Infrastructure 42,774,382 1,488,815 (43,234) 44,219,963 

Total capital assets, being depreciated 254,051,428 8,467,853 (377,723) 262,141,558 

Less accumulated depreciation for: 

Buildings (59,364,435) (4,733,408) - (64,097,843) 

Improvements other than buildings (613,036) (154,460) 1,156 (766,340) 

Furniture and equipment (19,276,435) (711,930) 329,489 (19,658,876) 

Infrastructure (21,482,659) (1,051,981) 30,347 (22,504,293) 

Total accumulated depreciation (100,736,565) (6,651,779) 360,992 (107,027,352) 

Total capital assets, being depreciated, net 153,314,863 1,816,074 (16,731) 155,114,206 

Governmental activities capital assets, net $ 291,380,382 $ 8,831,929 $ (2,153,469) $ 298,058,842 

Depreciation expense was charged to functions/programs of governmental activities for the fiscal year 

ended June 30, 2010 as follows: 

Legislative and Administrative $ 556,557 

Community Development 77,903 

Public Works 167,878 

Water and Power 49,672 

Community and Safety Services 1,371,694 

Administrative Services 1,702,208 

Cerritos Center for the Performing Arts 1,673,886 

Unallocated infrastructure depreciation 1,051,981 

Total depreciation expense $ 6,651,779 

49




7. CAPITAL ASSETS, Continued 

The following is a summary of capital assets for the business-type activities: 

Business-Type Activities 

Balance 

Balance 

July 1, 2009 Additions Deletions June 30, 2010 

Capital assets, not being depreciated: 

Construction in progress $ 984,348 $ - $ (984,348) $ 

- 

Total capital assets, not being depreciated 984,348 - (984,348) - 

Capital assets, being depreciated: 

Buildings and structures 6,262,697 - - 6,262,697 

Water mains and lines 39,934,320 1,000,695 (77,741) 40,857,274 

Equipment 4,037,943 106,050 - 4,143,993 

Water rights acquired 2,259,378 - - 2,259,378 

Electric utility rights acquired 14,105,000 - - 14,105,000 

Total capital assets, being depreciated 66,599,338 1,106,745 (77,741) 67,628,342 

Less accumulated depreciation for: 

Buildings and structures (2,935,939) (124,333) - (3,060,272) 

Water mains and lines (17,830,477) (756,841) 26,355 (18,560,963) 

Equipment (2,628,791) (169,350) - (2,798,141) 

Water rights acquired (395,391) (56,484) - (451,875) 

Electric utility rights acquired (1,880,667) (470,166) - (2,350,833) 

Total accumulated depreciation (25,671,265) (1,577,174) 26,355 (27,222,084) 

Total capital assets, being depreciated, net 40,928,073 (470,429) (51,386) 40,406,258 

Business-type activities capital assets, net $ 41,912,421 $ (470,429) $ (1,035,734) $ 40,406,258 

Depreciation expense for business-type activities for the fiscal year ended June 30, 2010 was charged as 

follows: 

Water $ 797,325 

Reclaimed Water 309,683 

Electric Utility 470,166 

Total depreciation expense $ 1,577,174 

Electric Utility Rights - Southern California Public Power Authority (SCPPA) 

The City’s Electric Utility is a member of the SCPPA, a joint powers authority. The City entered into the 

Magnolia Power Project, which is financed and owned by SCPPA. Member cities of the Magnolia Power 

Project include Anaheim, Burbank, Colton, Glendale, and Pasadena (the Project “A” Participants) and the 

City of Cerritos (the Project “B” Participant). 

50




7. CAPITAL ASSETS, Continued 

The Magnolia Power Project consists of a natural gas-fired generating facility with a nominally rated net 

base capacity of 242 Megawatts to be located on an existing generating site in the City of Burbank, 

California, including necessary and appurtenant facilities and equipment thereto, the applicable portion of 

any common facilities and interconnection facilities. The Project was being constructed for the primary 

purpose of providing the participants in the Project with firm capacity and energy to help meet their power 

and energy requirements in 2005 and thereafter. Commercial operations commenced September, 2005. The 

City of Cerritos has entered into a “Take or Pay” contract with SCPPA and is obligated to pay their share of 

the indebtedness regardless of the ability of the contracting agency to provide electricity. The City’s share of 

these payments are reported as long-term debt (see Notes 9D and 9J). This contract provides for generating 

capacity of 4.2% of the output generated from the plant. 

8. DEFERRED/UNEARNED REVENUE 

At June 30, 2010, deferred/unearned revenue totaled $7,417,057 consisting of the following: 

Unearned Revenue: 

Facility booking rentals $ 42,605 

Advance Performing Arts Center ticket sales 2,181,231 

Total Unearned Revenue 2,223,836 

Deferred Revenue: 

Sales tax 1,060,950 

Workers' compensation claims receivable 298,382 

Performing Arts Center refund clearing 4,568 

Operating Grant - Public Works 197,732 

Capital Grant - Community and Safety Services 367,744 

Investment and rental income 868,339 

Loan assistance programs in Redevelopment Agency 2,395,506 

Total Deferred Revenue 5,193,221 

Total $ 7,417,057 

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9. LONG-TERM DEBT 

Following is a summary of long-term debt for governmental activities for the fiscal year ended June 30, 

2010: 

Classification 

Balance Balance Due Within Due In More 

July 1, 2009 Additions Deletions June 30, 2010 One Year Than One Year 

Los Cerritos Redevelopment 

Project Revenue Bonds: 

1993 Issue, Series B 

$17,525,000 $ 3,790,000 $ - $ (1,615,000) $ 2,175,000 $ 1,745,000 $ 430,000 

2002 Issue, Series A 

$31,550,000 29,590,000 - (465,000) 29,125,000 485,000 28,640,000 


$7,550,000 5,570,000 - (375,000) 5,195,000 385,000 4,810,000 

2003 Issue, Series 2003 

$3,526,250 3,328,125 - (60,000) 3,268,125 61,875 3,206,250 

Los Coyotes Redevelopment 

Project Revenue Bonds: 


$42,155,000 8,000,000 - - 8,000,000 - 8,000,000 


$63,765,000 41,885,000 - (2,835,000) 39,050,000 3,055,000 35,995,000 


$3,760,000 1,935,000 - (275,000) 1,660,000 290,000 1,370,000 


$64,710,000 59,200,000 - (1,245,000) 57,955,000 1,290,000 56,665,000 


$12,225,000 11,130,000 - (210,000) 10,920,000 215,000 10,705,000 

2003 Issue, Series 2003 

$10,578,750 9,984,375 - (180,000) 9,804,375 185,625 9,618,750 

Subtotal 174,412,500 - (7,260,000) 167,152,500 7,712,500 159,440,000 

Add (less) deferred amounts: 

Bond premium 4,600,474 - (306,699) 4,293,775 - 4,293,775 

Bond discount (924,520) - 61,635 (862,885) - (862,885) 

Deferred charge on refunding (1,984,981) - 141,785 (1,843,196) - (1,843,196) 

Total Revenue Bonds 176,103,473 - (7,363,279) 168,740,194 7,712,500 161,027,694 

Note payable 1,025,000 - - 1,025,000 - 1,025,000 

Compensated absences 2,497,348 1,698,653 (1,683,566) 2,512,435 628,000 1,884,435 

Net OPEB obligation - 2,015,775 - 2,015,775 - 2,015,775 

Claims payable - General Liability - 1,917,561 - 1,917,561 - 1,917,561 

Total long-term liabilities $ 179,625,821 $ 5,631,989 $ (9,046,845) $ 176,210,965 $ 8,340,500 $ 167,870,465 

52




9. LONG-TERM DEBT, Continued 

Following is a summary of long-term debt for business-type activities for the fiscal year ended June 30, 

2010: 


Balance Balance Due within Due in more 

July 1, 2009 Additions Deletions June 30, 2010 One Year than One Year 

Compensated absences - Water Fund $ - $ 257,937 $ - $ 257,937 $ 64,484 $ 193,453 

Total long-term liabilities $ - $ 257,937 $ - $ 257,937 $ 64,484 $ 193,453 

A. Los Cerritos Redevelopment Project 1993 Revenue Bonds, Series B 

In June, 1993, the Cerritos Public Financing Authority (the Authority) issued $17,525,000 in 1993 Revenue 

Bonds, Series B. $15,967,767 of the $17,525,000 issue was loaned to repay prior City loans to the Agency, 

$1,323,852 was used to fund a reserve fund for the loans to the Agency, and the remaining balance was used 

to pay the cost of issuance of the bonds. Interest rates on the bonds vary from 4.00% to 8.00% with interest 

payable semiannually on May 1 and November 1, and principal maturing annually on November 1. 

The 1993 Los Cerritos Redevelopment Project Revenue Bonds, Series B, are payable solely from and secured 

by tax increment revenues received by the Authority from the Agency. Annual principal and interest 

payments on the bonds are expected to require less than 25% of net revenues. The total remaining principal 

and interest to be paid on the bonds is $2,296,400. Principal and interest paid for the current year and total 

net revenues were $1,853,600 and $7,706,348, respectively. 

The annual requirements to amortize the outstanding bond indebtedness as of June 30, 2010, including 

interest, are as follows: 

Year Ending 

June 30, Principal Interest Total 

2011 $ 1,745,000 $ 104,200 $ 1,849,200 

2012 430,000 17,200 447,200 

TOTAL $ 2,175,000 $ 121,400 $ 2,296,400 

B. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A 

In June 1993, the Authority issued $27,555,000 in Revenue Bonds, Series A. In September 2002, the 

Authority issued $31,550,000 of Tax Allocation Bonds to provide funds to refund the 1993 Revenue Bonds, 

Series A. A portion of the proceeds from the Bonds issued in 2002 were placed in an escrow fund to provide 

the debt service on the 1993 Revenue Bonds, Series A. The advance refunding met the requirements of an 

in-substance defeasance and the bonds were removed from the Agency’s long-term debt. 

The 2002 bonds are broken into two segments; the Term Bonds $27,940,000 and the Special Escrow Bonds 

$3,610,000. 

53





B. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A, Continued 

The Term Bonds are payable in annual installments ranging from $260,000 to $3,240,000 until maturity on 

November 1, 2020. Interest is payable semiannually on May 1 and November 1, with rates ranging from 

2.00% to 5.00%. Bonds outstanding at June 30, 2010 were $26,270,000. 

The Special Escrow bonds are payable in annual installments ranging from $195,000 to $320,000 until 

maturity on November 1, 2020. Interest is payable semiannually on May 1 and November 1, with rates 

ranging from 3.40% to 4.55%. Bonds outstanding at June 30, 2010 were $2,855,000. 

The 2002 Los Cerritos Redevelopment Project Tax Allocation Revenue Bonds, Series A, are payable solely 

from and secured by tax increment revenues received by the Authority from the Agency. Annual principal 

and interest payments on the bonds are expected to require less than 25% of net revenues. The total 

remaining principal and interest to be paid on the bonds is $37,985,318. Principal and interest paid for the 

current year and total tax revenues were $1,800,390 and $7,706,348, respectively. 

Future debt service requirements on these bonds (term and special escrow) are as follows: 

Year Ending 


2011 $ 485,000 $ 1,318,475 $ 1,803,475 

2012 1,955,000 1,279,113 3,234,113 

2013 2,480,000 1,204,090 3,684,090 

2014 2,570,000 1,113,875 3,683,875 

2015 2,660,000 1,002,318 3,662,318 

2016-2020 15,415,000 2,854,567 18,269,567 

2021 3,560,000 87,880 3,647,880 

TOTAL $ 29,125,000 $ 8,860,318 $ 37,985,318 

C. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B 

In September 2002, the Authority issued $7,550,000 in 2002 Series B Tax Allocation Revenue Bonds. The 

proceeds were loaned to the Agency and were used to fund projects in the Los Cerritos Project Area and 

pay for the cost of issuance. 

The bonds are payable in annual installments ranging from $360,000 to $580,000 until maturity on 



The 2002 Los Cerritos Redevelopment Project Tax Allocation Revenue Bonds, Series B, are payable solely 




current year and total tax revenues were $607,819 and $7,706,348, respectively. 

54





C. Los Cerritos Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B, Continued 

Future debt service requirements on these bonds are as follows: 

Year Ending 


2011 $ 385,000 $ 220,271 $ 605,271 

2012 400,000 206,430 606,430 

2013 415,000 191,449 606,449 

2014 430,000 175,068 605,068 

2015 445,000 157,345 602,345 

2016-2020 2,540,000 466,981 3,006,981 

2021 580,000 15,080 595,080 

TOTAL $ 5,195,000 $ 1,432,624 $ 6,627,624 

D. Los Cerritos and Los Coyotes Redevelopment Project - Magnolia Power Project B, Series 2003 Revenue 

Bonds 

The Southern California Public Power Authority (SCPPA) was created in 1980 under a joint exercise of 

powers agreement. It was formed for the acquisition and construction of facilities to supply electric energy 

within the boundaries of its members. Complete financial statements for SCPPA may be obtained at their 

administrative office located at 225 S. Lake Avenue, Suite 1250, Pasadena, CA 91101. 

In 2001, SCPPA entered into an agreement with the City of Anaheim, the City of Burbank, the City of 

Cerritos, the City of Colton, the City of Glendale, and the City of Pasadena to construct a generation facility 

with a capacity of 242 megawatts to be located on the existing Magnolia generating site in Burbank, 

California. 

SCPPA issued $14,105,000 of lease revenue bonds to finance a portion of the project costs for the facility that 

was collateralized by the parking structure at City Hall. The City has leased back the parking structure from 

SCPPA. SCPPA will provide for the payment of a portion of the costs of operation of the Project through the 

sale of a portion of the capacity and energy of the Project of the member cities pursuant to the Power Sales 

Agreement. On March 1, 2003, the City entered into this sales agreement with SCPPA, entitling the City to a 

4.2% share of the plant output. 

In June 2005, the Redevelopment Agency Debt Service Fund assumed the City’s debt related to the sales 

agreement with SCPPA. As the energy derived from the plant serves and benefits both the Los Cerritos and 

Los Coyotes Capital Project Areas, it was deemed appropriate that the Agency assume the debt. Debt 

assumed was allocated 25%, which is $3,526,250, to the Los Cerritos Project Area and 75%, which is 

$10,578,750, to the Los Coyotes Project Area. The City advances debt service payments to SCPPA and is 

subsequently reimbursed by the Redevelopment Agency immediately after the payment due dates. 

The payments are due in annual installments on January 1 and July 1 of each year. The first payment was 

made January 2006, and the final payment is due at maturity on July 1, 2036. 

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D. Los Cerritos and Los Coyotes Redevelopment Project - Magnolia Power Project B, Series 2003 Revenue 

Bonds, Continued 

The debt service schedule for the Los Coyotes Project Area is at Note 9J. 

The Los Cerritos Project Area portion is payable solely from and secured by tax increment revenues 

received by the Authority from the Agency. Annual principal and interest payments on the bonds are 

expected to require less than 10% of net revenues. The total remaining principal and interest to be paid on 

the bonds is $6,061,506. Principal and interest paid for the current year and total tax revenues were $214,952 

and $7,706,348, respectively. 

Future debt service requirements on the bonds allocated to the Los Cerritos Project Area are as follows: 

Year Ending 


2011 $ 61,875 $ 153,226 $ 215,101 

2012 63,750 151,291 215,041 

2013 65,625 149,138 214,763 

2014 67,500 146,800 214,300 

2015 70,000 144,310 214,310 

2016-2020 395,625 677,620 1,073,245 

2021-2025 488,125 585,184 1,073,309 

2026-2030 618,125 455,125 1,073,250 

2031-2035 788,750 284,250 1,073,000 

2036-2037 648,750 46,437 695,187 

TOTAL $ 3,268,125 $ 2,793,381 $ 6,061,506 

E. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series A 

In June 1993, the Authority issued $42,155,000 in 1993 Revenue Bonds, Series A. $2,594,959 of the 

$42,155,000 issue was loaned to the Agency to advance refund the $7,500,000 Los Coyotes Redevelopment 

Project Tax Allocation Bonds, Series A originally issued by the Agency in 1976, $6,780,483 was loaned to the 

Agency to advance refund the $15,000,000 Los Coyotes Redevelopment Project Tax Allocation Bonds, Series 

B originally issued by the Agency in 1977, $19,669,546 was loaned to repay prior City loans to the Agency, 

$9,000,000 was loaned to fund additional projects in the Los Coyotes Project Area, $3,206,533 was used to 

fund a reserve fund for the loans to the Agency, and the remaining balance was used to pay the cost of 

issuance of the bonds. Interest rates on the bonds vary from 2.50% to 6.50% with interest payable 

semiannually on May 1 and November 1, and principal maturing annually on November 1 except for the 

years 2002 through 2018 in which no principal payments mature. 

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E. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series A, Continued 

In September 2002, the Authority issued 2002 Tax Allocation Bonds, Series A to provide funds to partially 

refund the 1993 Revenue Bonds ($24,510,000), Series A. A portion of the proceeds from the Bonds issued in 

2002 were placed in an escrow fund to provide the debt service on the 1993 Revenue Bonds, Series A. The 

advance refunding met the requirements of an in-substance defeasance and the bonds were removed from 

the Agency’s long-term debt. The principal balance on the 1993 Revenue Bonds, Series A at June 30, 2003 

that was paid by the trustee from the escrow fund was $24,510,000, and the balance remaining in the 

Agency’s long-term debt is $8,000,000. 

The 1993 Los Coyotes Redevelopment Project Revenue Bonds, Series A, are payable solely from and 

secured by tax increment revenues received by the Authority from the Agency. Annual principal and 

interest payments on the bonds are expected to require less than 10% of net revenues. The total remaining 

principal and interest to be paid on the bonds is $14,989,775. Principal and interest paid for the current year 

and total tax revenues were $520,000 and $18,009,418, respectively. 


Year Ending 


2011 $ - $ 520,000 $ 520,000 

2012 - 520,000 520,000 

2013 - 520,000 520,000 

2014 - 520,000 520,000 

2015 - 520,000 520,000 

2016-2020 - 2,600,000 2,600,000 

2021-2024 8,000,000 1,789,775 9,789,775 

TOTAL $8,000,000 $ 6,989,775 $ 14,989,775 

F. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series B 

In June 1993, the Authority issued $63,765,000 in 1993 Revenue Bonds, Series B. $57,938,653 of the 

$63,765,000 issue was loaned to repay prior City loans to the Agency, $4,850,304 was used to fund a reserve 

fund for the loans to the Agency, and the remaining balance was used to pay the cost of issuance of the 

bonds. Interest rates on the bonds vary from 3.50% to 7.80% with interest payable semiannually on May 1 

and November 1, and principal maturing annually on November 1. 

The 1993 Los Coyotes Redevelopment Project Revenue Bonds, Series B, are payable solely from and secured 

by tax increment revenues received by the Authority from the Agency. Annual principal and interest 

payments on the bonds are expected to require less than 35% of net revenues. The total remaining principal 

and interest to be paid on the bonds is $54,640,621. Principal and interest paid for the current year and total 

tax revenues were $5,983,891 and $18,009,418, respectively. 

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F. Los Coyotes Redevelopment Project 1993 Revenue Bonds, Series B, Continued 


Year Ending 


2011 $ 3,055,000 $ 2,920,653 $ 5,975,653 

2012 3,295,000 2,674,594 5,969,594 

2013 3,550,000 2,409,350 5,959,350 

2014 3,825,000 2,123,569 5,948,569 

2015 4,120,000 1,814,670 5,934,670 

2016-2020 21,205,000 3,697,785 24,902,785 

TOTAL $ 39,050,000 $ 15,640,621 $ 54,690,621 

G. Los Coyotes Redevelopment Project 1998 Tax Allocation Bonds, Series A 

In January 2001, the Los Coyotes Redevelopment Project issued $3,760,000 in 1998 Tax Allocation Bonds, 

Series A. The proceeds were used in the construction of a shared parking structure, which serves both the 

retail complex and tenants within an adjacent office building. The City will retain parking rights to the 

structure. The interest rate on the bonds is 6.5% with principal and interest payable annually on May 1. 

The 1998 Los Coyotes Redevelopment Project Tax Allocation Revenue Bonds, Series A, are payable solely 





The annual requirements to amortize the outstanding bond indebtedness as of June 30, 2010 including 

interest, are as follows: 

Year Ending 


2011 $ 290,000 $ 107,900 $ 397,900 

2012 310,000 89,050 399,050 

2013 330,000 68,900 398,900 

2014 355,000 47,450 402,450 

2015 375,000 24,375 399,375 

TOTAL $ 1,660,000 $ 337,675 $ 1,997,675 

58





H. Los Coyotes Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series A 

In June 1993, the Authority issued $42,155,000 in Revenue Bonds, Series A. In September 2002, the 

Authority issued $64,710,000 of Tax Allocation Bonds to provide funds to refund $24,510,000 of the 

remaining $32,510,000 the 1993 Revenue Bonds, Series A. A portion of the proceeds from the Bonds issued 

in 2002 were placed in an escrow fund to provide the debt service on the 1993 Revenue Bonds, Series A. The 

advance refunding met the requirements of an in-substance defeasance and the bonds were removed from 

the Agency’s long-term debt. The principal balance on the 1993 Revenue Bonds, Series A, at June 30, 2003 

that was paid by the trustee from the escrow fund was $24,510,000. The balance remaining in the Agency’s 

long-term debt as of June 30, 2010 is $8,000,000 (see Note 9E). 

The bonds were broken into two segments; the Term Bonds $53,675,000 and the Special Escrow Bonds 

$11,035,000. 

The Term Bonds are payable in annual installments ranging from $775,000 to $9,345,000 until maturity on 



The Special Escrow bonds are payable in annual installments ranging from $435,000 to $830,000 until 

maturity on November 1, 2024. Interest is payable semiannually on May 1 and November 1, with rates 

ranging from 3.40% to 4.55%. Bonds outstanding at June 30, 2010 were $9,325,000. 

The 2002 Los Coyotes Redevelopment Project Tax Allocation Revenue Bonds, Series A, are payable solely 




current year and total tax revenues were $4,037,770 and $18,009,418, respectively. 

Future debt service requirements on these bonds (term and special escrow) are as follows: 

Year Ending 


2011 $ 1,290,000 $ 2,752,925 $ 4,042,925 

2012 1,325,000 2,711,810 4,036,810 

2013 1,370,000 2,667,248 4,037,248 

2014 1,420,000 2,618,928 4,038,928 

2015 1,460,000 2,559,016 4,019,016 

2016-2020 13,225,000 11,513,348 24,738,348 

2021-2025 37,865,000 4,545,538 42,410,538 

TOTAL $ 57,955,000 $ 29,368,813 $ 87,323,813 

59





I. Los Coyotes Redevelopment Project 2002 Tax Allocation Revenue Bonds, Series B 

In September 2002, the Authority issued $12,225,000 in 2002 Series B Tax Allocation Revenue Bonds. The 

proceeds were loaned to the Agency and will be used to fund projects in the Los Coyotes Project Area and 

to pay for the cost of issuance. 

The bonds are payable in annual installments ranging from $210,000 to $1,270,000 until maturity on 



The 2002 Los Coyotes Redevelopment Project Tax Allocation Revenue Bonds, Series B, are payable solely 






Year Ending 


2011 $ 215,000 $ 527,654 $ 742,654 

2012 235,000 519,715 754,715 

2013 240,000 510,985 750,985 

2014 250,000 501,485 751,485 

2015 260,000 491,155 751,155 

2016-2020 3,965,000 2,048,322 6,013,322 

2021-2025 5,755,000 778,830 6,533,830 

TOTAL $ 10,920,000 $ 5,378,146 $ 16,298,146 

J. Los Cerritos and Los Coyotes Redevelopment Project - Magnolia Power Project B, Series 2003 Revenue 

Bonds 

The Southern California Public Power Authority (SCPPA) was created in 1980 under a joint exercise of 

powers agreement. It was formed for the acquisition and construction of facilities to supply electric energy 

to the inhabitants within the boundaries of its members. Complete financial statements for SCPPA may be 

obtained at their administrative office located at 225 S. Lake Avenue, Suite 1250, Pasadena, CA 91101. 

In 2001, SCPPA entered into an agreement with the City of Anaheim, the City of Burbank, the City of 

Cerritos, the City of Colton, the City of Glendale, and the City of Pasadena to construct a generation facility 

with a capacity of 242 megawatts to be located on the existing Magnolia generating site in Burbank, 

California. 

60





J. Los Cerritos and Los Coyotes Redevelopment Project - Magnolia Power Project B, Series 2003 Revenue 

Bonds, Continued 

SCPPA issued $14,105,000 of lease revenue bonds to finance a portion of the project costs for the facility that 

was collateralized by the parking structure at City Hall. The City has leased back the parking structure from 

SCPPA. SCPPA will provide for the payment of a portion of the costs of operation of the Project through the 

sale of a portion of the capacity and energy of the Project of the member cities pursuant to the Power Sales 

Agreement. On March 1, 2003, the City entered into this sales agreement with SCPPA, entitling the City to a 

4.2% share of the plant output. 

In June 2005, the Redevelopment Agency Debt Service Fund assumed the City’s debt related to the sales 

agreement with SCPPA. As the energy derived from the plant serves and benefits both the Los Cerritos and 

Los Coyotes Capital Project Areas, it was deemed appropriate that the Agency assume the debt. Debt 

assumed was allocated 25%, which is $3,526,250, to the Los Cerritos Project Area and 75%, which is 

$10,578,750, to the Los Coyotes Project Area. The City advances debt service payments to SCPPA and is 

subsequently reimbursed by the Redevelopment Agency immediately after the payment due dates. 

The payments are due in annual installments on January 1 and July 1 of each year. The first payment was 

made January 2006, and the final payment is due at maturity on July 1, 2036. 

The debt service schedule for the Los Cerritos Project Area is at Note 9D. 

The Los Coyotes Project Area portion is payable solely from and secured by tax increment revenues 

received by the Authority from the Agency. Annual principal and interest payments on the bonds are 

expected to require less than 10% of net revenues. The total remaining principal and interest to be paid on 

the bonds is $18,184,520. Principal and interest paid for the current year and total tax revenues were 

$644,857 and $18,009,418, respectively. 

Future debt service requirements on the bonds allocated to the Los Coyotes Project Area are as follows: 

Year Ending 


2011 $ 185,625 $ 459,677 $ 645,302 

2012 191,250 453,874 645,124 

2013 196,875 447,414 644,289 

2014 202,500 440,400 642,900 

2015 210,000 432,930 642,930 

2016-2020 1,186,875 2,032,862 3,219,737 

2021-2025 1,464,375 1,755,551 3,219,926 

2026-2030 1,854,375 1,365,375 3,219,750 

2031-2035 2,366,250 852,750 3,219,000 

2036-2037 1,946,250 139,312 2,085,562 

TOTAL $ 9,804,375 $ 8,380,145 $ 18,184,520 

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K. Los Cerritos Redevelopment Project - Note Payable 

In September 2005, the Agency entered into an agreement to purchase land owned by Southeast Regional 

Occupational Program within the Los Cerritos Capital Project Area for $1,205,662. 

In connection with the purchase, the Agency provided a note payable in the amount of $1,025,000. Interest 

will be charged annually at the rate equal to the annual average of the City’s investment fund return, 

excluding interest on outstanding loans provided by the City to the Agency and the Electric Utility 

Enterprise Fund. Since the future interest rate is not known, the interest portion of future debt service is not 

presented in the table below. 

Interest only payments are due on each anniversary date through 2010. Then annual principal and interest 

payments will be due through the maturity date, September 26, 2015, with principal in the amount of 

$200,000 per year on the sixth through ninth year anniversary dates and $225,000 on the maturity date. 

Future debt service requirements on this note are as follows: 

Year Ending 

June 30, 

Principal 

2011 $ 

- 

2012 200,000 

2013 200,000 

2014 200,000 

2015 200,000 

2016 225,000 

TOTAL $ 1,025,000 

L. Compensated Absences 

This liability represents the total unpaid vacation and compensatory time earned by employees of the City. 

Since this amount is paid to the employee upon termination of employment, there is no fixed payment 

schedule for earned but unpaid compensated absences. The compensated absences are predominately 

associated with the General Fund and Water Fund. 

M. Net OPEB Obligation 

The amount of net other post-employment benefits obligation at June 30, 2010 was $2,015,775. See Note 11B 

for details. 

N. Claims Payable – General Liability 

The amount of claims and judgments payable at June 30, 2010 was $1,917,561. See Note 12E for details. 

62




10. RESERVES AND DESIGNATIONS OF FUND BALANCES 

The City establishes “reserves” of fund balances to segregate fund balances which are not available for 

appropriation in future periods, or which are legally set aside for a specific future use. Fund “designations” 

also may be established to indicate tentative plans for financial resource utilization in a future period. 

The City’s reserves and designations at June 30, 2010 are tabulated below by fund types, followed by 

explanations as to the nature and purpose of each reserve and designation. 

Reserves: 

Redevelopment Other 

Agency Governmental 

General Capital Projects Funds Totals 

Inventories $ 23,883 $ - $ - $ 23,883 

Long term receivable 101,784,752 - - 101,784,752 

Deposits 814,315 - - 814,315 

Land held for resale or lease - 1,953,330 - 1,953,330 

Total Reserves $ 102,622,950 $ 1,953,330 $ - $ 104,576,280 

Designations: 

Asset replacement $ 700,000 $ - $ - $ 700,000 

Arts Center Programs 9,959,056 - - 9,959,056 

Self Insurance 1,000,000 - - 1,000,000 

Special Revenue Purposes - - 6,275,361 6,275,361 

Capital Projects Purposes - 23,321,867 971 23,322,838 

Total Designations $ 11,659,056 $ 23,321,867 $ 6,276,332 $ 41,257,255 

Descriptions of Reserves and Designations: 

a. Reserved for Inventories: 

This reserve was established because inventories were not converted into cash or liquid assets after 

year end and not available to meet current expenditures. 

b. Reserved for Long Term Receivables: 

This reserve was established because certain receivables are not expected to be collected soon 

enough to be available to meet current expenditures. 

c. Reserved for Deposits and Land Held for Resale or Lease: 

These reserves were established because the related land and deposits were not converted into cash 

or other liquid assets after year end so that they could be considered available to meet current 

expenditures. 

d. Designated for Asset Replacement: 

This designation has been established primarily for replacement of equipment and capital assets. 

e. Designated for Arts Center Programs: 

This designation has been established for future operation of the Arts Center. 

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10. RESERVES AND DESIGNATIONS OF FUND BALANCES, Continued 

f. Designated for Self Insurance: 

This designation has been established to provide for the general liability and workers’ compensation 

insurance programs. The City is a member of the California Joint Powers Insurance Authority as 

described in Note 12. 

g. Designated for Special Revenue Purposes: 

These funds are designated to provide for the specific special revenue purposes as restricted by law 

or administrative action. 

h. Designated for Capital Projects Purposes: 

These funds are designated to provide for the capital expenditure within the Redevelopment 

Agency Capital Projects Fund. 

11. RETIREMENT PLAN 

A. Defined Benefit Pension Plan 

Plan Description 

The City’s defined benefit pension plan, the Miscellaneous Plan for the City of Cerritos (Plan), provides 

retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members 

and beneficiaries. The Plan is part of the Public Agency portion of the California Public Employees’ 

Retirement System (CalPERS), an agent multiple-employer plan administered by CalPERS, which acts as a 

common investment and administrative agent for participating public entities within the State of 

California. A menu of benefit provisions as well as other requirements are established by the State statutes 

within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit 

menu by contract with CalPERS and adopts those benefits through local ordinance. CalPERS issues a 

separate comprehensive annual financial report. Copies of CalPERS’ annual financial report may be 

obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814. 

Funding Policy 

Participants are required to contribute 8% of their annual covered salary. The City makes the contributions 

required of City employees on their behalf and for their account. The City is required to contribute the 

actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial 

methods and assumptions used are those adopted by the CalPERS Board of Administration. The City’s 

required employer contribution rate for fiscal year 2009-10 was 16.791%. The contribution requirements of 

the plan members are established by State statute and the employer contribution rate is established and 

may be amended by CalPERS. 

64




11. RETIREMENT PLAN, Continued 

A. Defined Benefit Pension Plan, Continued 

Annual Pension Cost 

For fiscal year 2009-10 the City’s actual and contributed annual pension cost was $1,693,293. The required 

contribution for fiscal year 2009-10 was determined as part of an amended contract between the City of 

Cerritos and CalPERS which became effective September 23, 2004, which included an actuarial valuation 

using the entry age normal actuarial cost method with the contributions determined as a percentage of pay. 

The actuarial assumptions included (a) 7.75% investment rate of return (net of administrative expenses); (b) 

projected salary increases that vary by duration of service and (c) a 2% cost-of-living adjustment. Both (a) 

and (b) include an inflation component of 3.0%. The actuarial value of the Plan’s assets were determined 

using a technique that smoothes the effect of short-term volatility in the market value of investments over a 

two to five year period depending on the size of investment gains and/or losses. The Plan’s unfunded 

actuarial excess assets are being amortized as a level of percentage of projected payroll on a closed basis. 

The remaining amortization period at June 30, 2010 was 27 years. 

The following is the three-year trend information: 

Three-Year Trend Information for PERS 

Fiscal Year Annual Pension Percentage of Net Pension 

Ending Cost (APC) APC Contributed Obligation 

6/30/2008 $ 1,672,759 

100% $ 

- 

6/30/2009 1,731,902 100% - 

6/30/2010 1,693,293 100% - 

Funding Status and Funding Progress 

As of June 30, 2009, the most recent actuarial valuation date, the plan was 79.2% funded. The actuarial 

accrued liability for benefits was $147.0 million, and the actuarial value of assets was $116.5 million, 

resulting in an unfunded actuarial accrued liability (UAAL) of $30.5 million. The covered payroll (annual 

payroll for active employees covered by the plan) was $19.4 million, and the ratio of the UAAL to the 

covered payroll was 157.4%. 

The schedule of funding progress presented below, presents the multiyear trend information about whether 

the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued 

liability for benefits. 

Schedule of Funding Progress for PERS ($ Amount in Thousands) 

Valuation Entry Age Normal Actuarial Value Unfunded/Liability Funded Annual Covered UAAL as a % 

Date Accrued Liability of Assets (Excess Assets) Status Covered Payroll of Payroll 

6/30/2007 $ 121,881 $ 100,469 $ 21,412 82.43% $ 19,220 111.40% 

6/30/2008 132,565 109,425 23,140 82.54% 19,718 117.35% 

6/30/2009 146,971 116,451 30,520 79.23% 19,394 157.37% 

65





B. Post-Retirement Health Care Benefits 

Plan Description 

In addition to the pension benefits described in Note 11, the City provides other post-employment benefits 

(OPEB) through the California Employer’s Retiree Benefit Trust Fund (CERBT), an agent multiple-employer 

defined benefit healthcare plan administered by the California Public Employees’ Retirement System 

(CalPERS), by contributing a predetermined monthly maximum of $798.15 for each eligible retiree and 

spouse toward health insurance. These benefits are provided per contract between the City and the City’s 

management, professional and general employees. Health insurance premiums for the City Manager, City 

Attorney and City Council are fully covered per Council decision. As of June 30, 2010, there were 221 

participants receiving these healthcare benefits. Separate financial statements for the CERBT may be 

obtained by writing to CalPERS at Lincoln Plaza North 400 Q Street, Sacramento, CA 95814, or by visiting 

the CalPERS website at www.calpers.ca.gov. 

Funding Policy 

The contribution requirements of plan members and the City are established and may be amended by the 

City, City Council, and/or the employee associations. Currently, contributions are not required from plan 

members. On November 19, 2007, the City entered into an agreement with CalPERS to create an irrevocable 

trust. The assets, all property and rights purchased with such amounts, and all income attributable to such 

amounts, property or rights are held in the trust for the exclusive benefit of the participants and their 

beneficiaries. These assets are no longer the property of the City, and as such, are no longer subject to the 

claims of the City’s general creditors. A one-time employer contribution of $14 million was made on 

December 28, 2007, and was included in the January 1, 2009 actuarial study. During the fiscal year ended 

June 30, 2010, the City did not contribute to the plan. The purpose of these contributions is to cover the 

annual required contribution (ARC) and to prefund benefits. 

As a result, the City calculated a Net OPEB Obligation of $2,015,775, representing the difference between 

the ARC and actual contributions, as presented below: 

Annual Required Contribution (ARC) $ 2,015,775 

Adjustment to ARC - 

Annual OPEB Cost 2,015,775 

Contribution made - 

Increase (decrease) in Net OPEB Obligation 2,015,775 

Net OPEB Obligation - beginning of year - 

Net OPEB Obligation - end of year $ 2,015,775 

The interest charges are based on an expected rate of return of 7.75% and the ARC of $2,015,775, an amount 

actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents 

a level of funding that, if paid on an ongoing basis is projected to cover the annual normal cost and the 

amortization of unfunded actuarial accrued liabilities (or funding excess) over a thirty year period. 

66





B. Post-Retirement Health Care Benefits, Continued 

Annual OPEB Cost and Net OPEB Obligation (Asset) 

For fiscal year 2009-10, the City’s annual OPEB cost (expense) of $2,015,775 was equal to the ARC. This 

represents the ARC based on the actuarial report. Information on the annual OPEB cost, percentage of 

Annual OPEB Cost contributed, and Net OPEB Obligation for the 2009-10 fiscal year and preceding years 

are presented below: 

Fiscal Actual Percentage of Net OPEB 

Year Annual Contribution Annual OPEB Obligation 

Ended OPEB Cost (Net of Adjustments) Cost Contributed (Asset) 

6/30/2008 $ 2,686,877 $ 16,686,877 621% $ (14,000,000) 

6/30/2009 1,994,070 1,994,070 100% - 

6/30/2010 2,015,775 - 0% 2,015,775 

Funded Status and Funding Progress 

The funded status of the plan as of January 1, 2009 is as follows: 

Schedule of Funding Progress for OPEB ($ Amount in Thousands) 



1/1/2007 $ 25,769 $ - $ 25,769 0.00% $ 19,306 133.48% 

1/1/2009 27,855 11,825 16,030 42.45% 21,648 74.05% 

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and 

assumptions about the probability of occurrence of events far into the future. Examples include 

assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined 

regarding the funded status of the plan and the annual required contributions of the City are subject to 

continual revision as actual results are compared with past expectations and new estimates are made about 

the future. The schedule of funding progress is presented as required supplementary information 

following the notes to the financial statements. 

67





B. Post-Retirement Health Care Benefits, Continued 

Actuarial Methods and Assumptions 

Projections of benefits for financial reporting purposes are based on the substantive plan and include the 

types of benefits provided at the time of each valuation. The actuarial methods and assumptions used 

include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued 

liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. 

In the January 1, 2009, actuarial valuation, the entry age normal actuarial cost method was used. The 

actuarial assumptions included a 7.75 percent investment rate of return (net of administrative expenses) 

and an initial annual healthcare cost trend rate of 10 percent, reduced by decrements to an ultimate rate of 

7.5% after five years. A 3.25 percent annual rate of increase in future salaries is also assumed in the 

valuation. The City’s unfunded actuarial accrued liability will be amortized as a level percentage of 

projected covered payroll on a closed basis. The amortization period at January 1, 2009 was thirty years. 

C. Other Defined Contribution Plans 

The City of Cerritos has adopted, through the Public Agency Retirement System (PARS), tax qualified 

governmental defined benefit plans for the benefit of eligible City of Cerritos employees to provide 

supplemental retirement benefits. The plans, which include exempt employees plan, non-exempt 

employees plan and the defined contribution floor-offset plan, conform to the requirements of Internal 

Revenue Code Section 401(a) and therefore entitle each Plan to favorable tax treatment. 

12. LIABILITY, PROPERTY AND WORKERS’ COMPENSATION PROTECTION 

A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement 

The City is a member of the California Joint Powers Insurance Authority (Insurance Authority). The 

Insurance Authority is comprised of 122 California public entities and is organized under a joint powers 

agreement pursuant to California government Code §6500 et seq. The purpose of the Insurance Authority is 

to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or 

reinsurance, and to arrange for group-purchased insurance for property and other coverages. The Insurance 

Authority’s pool began covering claims of its members in 1978. Each member government has an elected 

official as its representative on the Board of Directors. The Board operates through a nine-member 

Executive Committee. 

68




12. LIABILITY, PROPERTY AND WORKERS’ COMPENSATION PROTECTION, Continued 

B. Self-Insurance Programs of the Authority 

General Liability – Each member government pays a primary deposit to cover estimated losses for a fiscal 

year (claims year). After the close of a fiscal year, outstanding claims are valued. A retrospective deposit 

computation is then made for each open claims year. Claims are pooled separately between police and nonpolice. 

Costs are allocated to members by the following methods within each of the four layers of coverage: 

(1) the first $30,000 of each occurrence is charged directly to the member’s primary deposit; (2) costs from 

$30,000 to $750,000 and the loss development reserves associated with losses up to $750,000 are pooled 

based on the member’s share of losses under $30,000; (3) losses from $750,000 to $5,000,000 and the 

associated loss development reserves are pooled based on payroll; (4a) costs of covered claims from 

$5,000,000 to $10,000,000 are paid under reinsurance policies and are subject to a $2,500,000 annual 

aggregate deductible; (4b) costs of covered claims from $10,000,000 to $50,000,000 are covered through 

excess insurance policies; (4c) Cost of covered claims for subsidence losses are paid by excess insurance 

with a sub-limit of $25,000,000 per occurrence per member. This $25,000,000 subsidence sub-limit is 

composed of $10,000,000 in reinsurance and $15,000,000 in excess insurance. The excess insurance layer has 

a $15,000,000 annual aggregate. The costs associated with 4a, 4b, and 4c are estimated using actuarial 

models and pre-funded as part of the primary and retrospective deposits. 

The overall policy limit for each member including all layers of coverage is $50,000,000 per occurrence. 

Workers’ Compensation – The City also participates in the workers’ compensation pool administered by the 

Authority. Each member pays a primary deposit to cover estimated losses for a fiscal year (claims year). 

After the close of a fiscal year, outstanding claims are valued. A retrospective deposit computation is then 

made for each open claims year. Claims are pooled separately between public safety and non-public 

safety. Costs are allocated to members by the following methods within each of the four layers of coverage: 

(1) the first $50,000 of each loss is charged directly to the member’s primary deposit; (2) losses from $50,000 

to $100,000 and the loss development reserve associated with losses up to $100,000 are pooled based on the 

member’s share of losses under $50,000; (3) losses from $100,000 to $2,000,000 and the loss development 

reserves associated with those losses are pooled based on payroll; (4) losses from $2,000,000 up to statutory 

limits are paid under an excess insurance policy. Protection is provided per statutory liability under 

California Workers’ Compensation law. 

Employer’s Liability losses are pooled among members to $2,000,000, coverage from $2,000,000 to 

$4,000,000 is purchased as part of an excess insurance policy, and losses from $4,000,000 to $10,000,000 are 

pooled among members. 

C. Purchased Insurance 

Environmental Insurance – The City participates in the pollution legal liability and remediation legal 

liability insurance which is available through the Authority. The policy covers sudden and gradual 

pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claimsmade 

basis. There is a $50,000 deductible. The Authority has a limit of $50,000,000 for the 3-year period 

from July 1, 2008 through July 1, 2011. Each member of the Authority has a $10,000,000 sub-limit during the 

3-year term of the policy. 

69





C. Purchased Insurance, Continued 

Property Insurance – The City participates in the all-risk property protection program of the Authority. 

This insurance protection is underwritten by several insurance companies. The City property is currently 

insured according to a schedule of covered property submitted by the City to the Authority. The City 

currently has all-risk property insurance protection in amount of $254,684,398. There is a $5,000 deductible 

per occurrence except for non-emergency vehicle insurance which has $1,000 deductible. Premiums for the 

coverage are paid annually and are not subject to retroactive adjustments. 

Crime Insurance – The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 

deductible. The fidelity coverage is provided through the Insurance Authority. Premiums are paid annually 

and are not subject to retroactive adjustments. 

Special Event Tenant User Liability Insurance – The City further protects against liability damages by 

requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain 

activities on City property. The insurance premium is paid by the tenant user and is paid to the City 

according to a schedule. The City then pays for the insurance. The insurance is arranged by the Authority. 

D. Adequacy of Protection 

During the past three fiscal (claims) years, none of the above programs of protection have had settlements 

or judgments that exceeded pooled or insured coverage. There have been no significant reductions in 

pooled or insured liability coverage from coverage in the prior year. 

Complete financial statements of the Insurance Authority may be obtained at their administrative offices 

located at 8010 Moody Street, La Palma, California 90623. 

E. Retroactive Deposit 

Each year the City makes an annual contribution, and at the end of the year, the California JPIA 

retroactively reviews the loss history and issues a partial refund or requests an additional deposit based on 

actual claims activity. This retrospective review is conducted on an annual basis and includes all coverage 

years which contain open claims. For many members of the California JPIA, claims incurred in 2003-2004 

and 2004-2005 have experienced significant adverse development during the past three years. 

Additional funding (retrospective adjustments) for these and other coverage years, was not collected in full 

at the time these funding short-falls were initially identified. Members of the Authority were allowed to 

make partial payments, while a portion of each retrospective adjustment was deferred. The aggregation of 

these deferred amounts over the course of several years is equal to the City’s current outstanding balance, 

which is referred to as the aggregate retrospective deposit balance. 

Retrospective deposits are payments required in addition to the annual contribution, which is payment for 

the current year’s insurance coverage. 

70





E. Retroactive Deposit, Continued 

Following is a summary of retroactive deposit balances for the fiscal year ended June 30, 2010: 


Balance Balance Due within Due in more 

July 1, 2009 Additions Deletions June 30, 2010 One Year than One Year 

Claim Payable - General Liability $ - $ 1,917,561 $ - $ 1,917,561 $ - $ 1,917,561 

Total long-term liabilities $ - $ 1,917,561 $ - $ 1,917,561 $ - $ 1,917,561 

13. OTHER REQUIRED DISCLOSURES 

A. Deficit Fund Balance 

At June 30, 2010, the following funds had deficit fund balances: 

Fund Fund Type Deficit 

Debt Service Fund: 

Redevelopment Agency Major Governmental Fund $ (66,053,156) 

Special Revenue Fund: 

Los Coyotes Lighting District Nonmajor Governmental Fund $ (4,980) 

Redevelopment Agency Debt Service Fund – The Redevelopment Agency Debt Service Fund has a deficit fund 

balance of $66,053,156 as a result of advances from the City. The deficit is expected to be eliminated with 

future tax increment revenues. 

Los Coyotes Lighting District Fund – The Los Coyotes Lighting District Fund has a deficit fund balance of 

$4,980 as a result of increased street lighting maintenance expenditures. The deficit is expected to be 

eliminated with future special assessment revenues. 

71




13. OTHER REQUIRED DISCLOSURES, Continued 

B. Excess of Expenditures over Appropriations 

Excess of expenditures over appropriations occurred in individual funds during fiscal year 2009-10 as 

follows: 

Excess 

Expenditures over 

Fund Expenditures Appropriations Appropriations 

Special Revenue Funds: 

Traffic Congestion $ 507,330 $ 460,000 $ (47,330) 

Sewer 213,400 209,140 (4,260) 

SB 821 93,605 85,000 (8,605) 

Los Coyotes Lighting District 1,269,490 1,141,160 (128,330) 

Local Law Enforcement Grants 12,560 - (12,560) 

COPS Grants 122,044 - (122,044) 

Library Grants 22,582 - (22,582) 

Environmental Grants 22,353 - (22,353) 

Measure R 52,739 - (52,739) 

Special Revenue Fund actual expenditures exceeded budgeted expenditures for the Traffic Congestion, Los 

Coyotes Lighting District, and Sewer Funds relating to operational and administrative costs, for the SB 821 

and Measure R relating to capital costs, and for Local Law Enforcement Grants, COPS Grants, Library 

Grants and Environmental Grants to reimburse the General Fund for costs incurred relating to the grants. 

14. COMMITMENTS AND CONTINGENCIES 

A. Lawsuits 

Numerous claims and suits have been filed against the City in the normal course of conducting City 

business. Based upon information received from the City Attorney and the self-insurance administrator, 

the estimated liability under such claims would be adequately covered by the deposits paid to CJPIA for 

self-insurance and insurance coverage. (See Note 12) 

B. Contract with Los Angeles County Sheriff’s Department 

The City contracts for policing services through the Los Angeles County Sheriff’s Department. As part of 

the agreement for services, the City is required to pay an additional 6% premium over the contract price to 

the Sheriff’s Department for liability insurance. This amount is held by the County in a Liability Trust Fund 

and provides for the payment of claims brought against the Sheriff’s Department. During the fiscal year 

ended June 30, 2010, the results of an actuarial study of both existing open claims and claims not yet 

reported are not able to be estimated at this time. In order to fund these past obligations of the Liability 

Trust Fund, the premium paid by the City may increase in future periods. The precise amount and timing 

of any contingencies or commitments resulting from the shortfall in the County’s Liability Trust Fund 

cannot be determined at this time. 

72




14. COMMITMENTS AND CONTINGENCIES, Continued 

C. $5,640,000 Tax Allocation Bonds arrangement with Commonwealth Cousins I, LLC 

In October 1998, the City Council authorized the Agency to issue bonds relating to specific development 

within the Los Coyotes Project Area. Then, in November 1998, the Agency entered into an agreement to 

issue $5,640,000 of Tax Allocation Bonds to Commonwealth Cousins I, LLC, in relation to the construction 

of a shared parking structure in the Cerritos Towne Center. The parking structure serves both the retail 

complex and tenants within an adjacent office building. In 2001, $3,760,000 of the bonds were issued. The 

remaining balance of $1,880,000 remained unissued as of June 30, 2010. Interest will not accrue prior to the 

issuance date. The Agency will repay the bonds by pledging a portion of the tax increment generated from 

the adjacent office building. 

D. Electric Utility 

The City’s Electric Utility is a member of the Magnolia Power Project that is financed and owned by the 

Southern California Public Power Authority (SCPPA). Member cities of the Magnolia Power Project 

include Anaheim, Burbank, Colton, Glendale and Pasadena (the Project “A” Participants) and the City of 

Cerritos (the Project “B” Participant). All Magnolia Participants have a “Take or Pay” contract with SCPPA 

and are obligated to pay their share of the indebtedness regardless of the ability of the contracting agency to 

provide electricity. The City’s share of these payments are reported as long-term debt (see Notes 9D and 

9J). Payment for these obligations will be made from operating revenues. This contract provides for 

generating capacity of 4.2% of the output generated from the plant. 

15. LEASE INCOME UNDER OPERATING LEASES 

Land in the amount of $69,098,912 is owned by the City and Agency and is held for lease. In connection 

with certain ground leases of the Cerritos Towne Center property, the Lincoln Station Property and the 

Jaguar/Land Rover property, the Agency and City have entered into cooperation agreements. Under the 

terms of the cooperation agreements, 75% of the lease income is paid to the City and 25% is paid to the 

Agency. For the year ended June 30, 2010, the Agency’s 25% portion of the lease income was $1,295,930 

while the City’s 75% portion was $4,535,134. 

Projected minimum lease payments to be received by the City and Agency as of June 30, 2010 are as 

follows: 

Year Ending 

June 30, City Agency Total 

2011 $ 4,160,593 $ 1,716,514 $ 5,877,107 

2012 4,377,043 1,802,344 6,179,387 

2013 4,402,985 1,824,962 6,227,947 

2014 4,418,552 1,843,791 6,262,343 

2015 4,424,320 1,536,973 5,961,293 

2016-2088 273,342,523 91,114,174 364,456,697 

Total $ 295,126,016 $ 99,838,758 $ 394,964,774 

73




16. PROPOSITION 1A BORROWING BY THE STATE OF CALIFORNIA 

Under the provisions of Proposition 1A and as part of the 2009-10 budget package passed by the California 

State legislature on July 28, 2009, the State of California borrowed 8% of the amount of property tax 

revenue, including those property taxes associated with the in-lieu motor vehicle license fee, the triple flip 

in lieu sales tax, and supplemental property tax, apportioned to cities, counties and special districts 

(excluding redevelopment agencies). The state is required to repay this borrowing plus interest by June 30, 

2013. After repayment of this initial borrowing, the California legislature may consider only one additional 

borrowing within a ten-year period. The amount of this borrowing pertaining to the City was $1,107,411. 

Authorized with the 2009-10 State budget package, the Proposition 1A Securitization Program was 

instituted by the California Statewide Communities Development Authority ("California Communities"), a 

joint powers authority sponsored by the California State Association of Counties and the League of 

California Cities, to enable local governments to sell their Proposition 1A receivables to California 

Communities. Under the Securitization Program, California Communities simultaneously purchased the 

Proposition 1A receivables and issued bonds ("Prop 1A Bonds") to provide local agencies with cash 

proceeds in two equal installments, on January 15, 2010 and May 3, 2010. The purchase price paid to the 

local agencies equaled 100% of the amount of the property tax reduction. All transaction costs of issuance 

and interest were paid by the State of California. Participating local agencies have no obligation on the 

bonds and no credit exposure to the State. The City participated in the securitization program and 

accordingly property taxes have been recorded in the same manner as if the State had not exercised its 

rights under Proposition 1A. The receivable sale proceeds were equal to the book value and, as a result, no 

gain or loss was recorded. 

17. SUBSEQUENT EVENT 

Redevelopment Agency funds have been estimated for a takeaway by the State of California. This decision 

was litigated by the California Redevelopment Association and other parties with the hope that this would 

be considered unconstitutional. The court’s decision is currently being appealed and the results have not 

yet been determined. The 2009-10 payment was $11,812,007 and it is anticipated another $2,431,884 will 

need to be submitted if the ruling is not overturned. 

Management has evaluated subsequent events to determine if events or transactions occurring through 

November 30, 2010, the date the consolidated financial statements were available to be issued, require 

adjustment to, or disclosure in the basic financial statements. 

74

REQUIRED SUPPLEMENTARY INFORMATION 

(UNAUDITED) 

75

CITY OF CERRITOS 

Required Supplementary Information (Unaudited) 


1. BUDGET AND BUDGETARY ACCOUNTING 

The annual budget adopted by the City Council provides for the general operation of the City. It includes 

proposed expenditures and the means of financing them. 

The City Council approves total budgeted appropriations and any amendments to appropriations 

throughout the year. This “appropriated budget” covers substantially all City expenditures, with the 

exception of debt service on bond issues and capital improvement projects carried forward from prior 

years, which expenditures constitute legally-authorized “non-appropriated budget.” 

There were no significant non-budgeted financial activities. Actual expenditures may not exceed budgeted 

appropriations at the fund level. However, the City Manager is authorized to transfer budgeted amounts 

between funds. There were no significant supplementary budget appropriations during the year ended 

June 30, 2010. 

Formal budgetary integration is employed as a management control. Commitments for materials and 

services, such as purchase orders and contracts, are recorded during the year as encumbrances to assist in 

controlling expenditures. Encumbrances at year end lapse, unless appropriations are made for certain 

capital projects in the subsequent fiscal year. 

Annual budgets for the General and Special Revenue Funds are adopted on a basis substantially consistent 

with accounting principles generally accepted in the United States of America. Accordingly, actual 

revenues and expenditures can be compared with related budgeted amounts without any significant 

reconciling items. Budgets for the Capital Projects and Debt Service Funds are long-term in nature. 

Accordingly, no budgetary comparisons are reflected for these funds in the accompanying financial 

statements. No budgetary comparisons are presented for Proprietary Funds, as the City is not legally 

required to adopt a budget for these types of funds. 

Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the City is 

restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes 

exceed allowed appropriations, the excess must either be refunded to the State Controller, returned to the 

taxpayers through revised tax rates or revised fee schedules, or an excess in one year may be offset against a 

deficit in the following year. For the fiscal year ended June 30, 2010, based on calculations by City 

Management, proceeds of taxes did not exceed appropriations. Further, Section 5 of Article XIIIB allows the 

City to designate a portion of fund balance for general contingencies, to be used for any purpose. 

76


Required Supplementary Information (Unaudited), Continued 


1. BUDGET AND BUDGETARY ACCOUNTING, Continued 

BUDGETARY COMPARISON SCHEDULE 

GENERAL FUND 


Variance with 

Final Budget 

Budgeted Amounts 

Positive 

Original Final Actual (Negative) 

REVENUES: 

Taxes $ 24,359,410 $ 23,134,170 $ 20,507,251 $ (2,626,919) 

Licenses and permits 1,921,500 1,912,000 1,913,968 1,968 

Fines and forfeitures 955,000 910,015 1,103,441 193,426 

Investment and rental income 15,620,910 15,330,325 16,468,213 1,137,888 

Revenues from other agencies 11,002,120 11,976,835 10,976,983 (999,852) 

Current fees and services 7,443,970 7,254,650 6,932,698 (321,952) 

Franchises 1,465,000 1,495,000 1,498,545 3,545 

Other revenue 282,580 863,615 1,706,500 842,885 

TOTAL REVENUES 63,050,490 62,876,610 61,107,599 (1,769,011) 

EXPENDITURES: 

Current: 

Legislative and Administrative 2,913,560 2,901,190 2,707,891 193,299 

Community Development 2,758,270 2,381,360 2,864,679 (483,319) 

Public Works 11,654,580 11,576,960 10,908,071 668,889 

Water and Power 95,410 124,310 73,683 50,627 

Community and Safety Services 22,780,500 22,331,620 21,217,358 1,114,262 

Administrative Services 11,580,470 11,338,650 10,317,186 1,021,464 

Cerritos Center for the Performing Arts 9,275,340 9,117,040 8,781,832 335,208 

TOTAL EXPENDITURES 61,058,130 59,771,130 56,870,700 2,900,430 

EXCESS OF REVENUES OVER 

(UNDER) EXPENDITURES 1,992,360 3,105,480 4,236,899 1,131,419 


Transfers in 2,402,955 2,155,303 2,000,000 (155,303) 

Transfers out (4,713,163) (4,948,927) (4,581,877) 367,050 

TOTAL OTHER FINANCING 

SOURCES (USES) (2,310,208) (2,793,624) (2,581,877) 211,747 

NET CHANGE IN FUND BALANCE (317,848) 311,856 1,655,022 1,343,166 

FUND BALANCES - BEGINNING OF YEAR 181,445,052 181,445,052 181,445,052 - 

FUND BALANCES - END OF YEAR $ 181,127,204 $ 181,756,908 $ 183,100,074 $ 1,343,166 

77


Required Supplementary Information (Unaudited), Continued 


2. DEFINED PENSION PLAN 

PUBLIC EMPLOYEE RETIREMENT SYSTEMS (PERS) 

SCHEDULE OF FUNDING PROGRESS 

Miscellaneous Employees 

Schedule of Funding Progress for PERS ($ Amount in Thousands) 



6/30/2007 $ 121,881 $ 100,469 $ 21,412 82.43% $ 19,220 111.40% 

6/30/2008 132,565 109,425 23,140 82.54% 19,718 117.35% 

6/30/2009 146,971 116,451 30,520 79.23% 19,394 157.37% 

* Based on the latest actuarial valuation available. 

3. OTHER POST EMPLOYMENT BENEFITS 

SCHEDULE OF FUNDING PROGRESS 

Schedule of Funding Progress for OPEB ($ Amount in Thousands) 



1/1/2007 $ 25,769 $ - $ 25,769 0.00% $ 19,306 133.48% 

1/1/2009 27,855 11,825 16,030 42.45% 21,648 74.05% 

* Based on the latest actuarial valuation available. 

78

SUPPLEMENTARY INFORMATION 

79


80

NONMAJOR GOVERNMENTAL FUNDS 

Special Revenue Funds account for taxes and other revenues set aside in accordance with law or administrative 

regulations for a specific purpose. 

Street Improvements Fund - to account for allocation of state gasoline taxes received by the City. These funds 

may be used for street maintenance, right-of-way acquisition and street construction. 

Traffic Congestion Fund - to account for allocated funds from the state for street or road maintenance or 

reconstruction during the fiscal year 2008-2009. 

Drainage Fund - to account for monies received from development fees. The funds are used for the maintenance 

of the drainage system. 

Sewer Fund - to account for monies received from sewer connection and maintenance fees. This fund is used for 

the maintenance and reconstruction of the sewer systems. 

SB 821 Fund - to account for monies received from the State for bike lanes and handicapped ramp construction. 

Proposition “A” Fund - to account for Los Angeles County special 1/2 cent transportation sales tax, which 

became effective July 1 , 1982. These funds may be used only for certain transportation purposes. 

Proposition “C” Fund - to account for a Los Angeles County Special 1/2 cent transit sales tax, which was 

approved by the voters in November 1990. These funds may be used only for public transit projects. 

Assessment District #6 Fund - to account for monies received from special assessment tax levied from the areas 

benefited. These funds are used to cover the expenses of maintaining the improvements in the area. 

Los Coyotes Lighting District Fund - to account for monies secured from the State of California under the 

provision of Division 14, Part 1, Street and Highways Code, State of California as amended, referred to as the 

“Street Lighting Act of 1919”. These funds are used for the installation, maintenance of, and furnishing of 

electrical current for the lighting of a street lighting system on certain public streets within the City. 

Local Law Enforcement Grants Fund - to account for non-recurring grant monies received from the State of 

California for “Local Law Enforcement Block Grant”. These funds are used for public safety programs. 

COPS Grants Fund - to account for non-recurring grant monies received from the State of California under the 

following laws: COPS SB3229 and COPS Ahead. These funds are used for public safety programs. 

Library Grants Fund - to account for non-recurring grant monies received from the State of California for 

technology improvements in library services. 

Environmental Grant Fund - to account for non-recurring grant monies received from the State of California for 

increased recycling efforts within the City of Cerritos. 

Air Quality Management District (AQMD) Fund - to account for monies received from the South Coast Air 

Quality Management District. These funds are used for the City’s rideshare program. 

Measure "R" Fund - to account for a Los Angeles County 1/2-cent sales tax which was approved by voters in 

November 2008 for transportation purposes. 

The Capital Projects Fund is used to account for resources used for the construction and acquisition of capital 

facilities. 

Municipal Improvement Fund - to account for the monies received from General Fund and other grant monies for 

the construction of major capital facilities, which generally require more than one budgetary cycle to complete. 

81


Combining Balance Sheet 

Non-Major Governmental Funds 

June 30, 2010 

Special Revenue Funds 

Street 

Traffic 

Improvements Congestion Drainage Sewer SB 821 

ASSETS 

Cash and investments $ 570,008 $ 689,449 $ - $ 3,232,588 $ 

- 

Receivable: 

Accounts 633,314 137,602 - 7,814 - 

Interest 1,323 1,600 - 7,503 - 

Other - - - - - 

Prepaid expenses 370 - - - - 

Total Assets $ 1,205,015 $ 828,651 $ - $ 3,247,905 $ 

- 

LIABILITIES AND 

FUND BALANCES 

Liabilities: 

Accounts payable and accrued liabilities $ 249,800 $ 360,387 $ - $ - $ 

- 

Accrued salaries and benefits 50,510 - - - - 

Deferred revenue 197,732 - - - - 

Due to other funds - - - - - 

Total Liabilities 498,042 360,387 - - - 

Fund Balances: 

Reserved: 

Encumbrance - - - - - 

Unreserved: 

Designated for special revenue purpose 706,973 468,264 - 3,247,905 - 

Total Fund Balances (Deficit) 706,973 468,264 - 3,247,905 - 

Total Liabilities and Fund Balances $ 1,205,015 $ 828,651 $ - $ 3,247,905 $ 

- 

82


Public Safety Grants Fund 

Local Law 

Proposition Proposition Assessment Los Coyotes Enforcement COPS Library Environmental 

"A" "C" District #6 Lighting District Grant Grant Grant Grant 

$ 943,481 $ - $ 114,658 $ - $ 104,961 $ 12,542 $ 165 $ 110,885 

- - - 37,086 16,943 7,548 - - 

2,190 - 266 - 244 29 - 257 

8,053 - - - - - - - 

- - - 180 - - - - 

$ 953,724 $ - $ 114,924 $ 37,266 $ 122,148 $ 20,119 $ 165 $ 111,142 

$ - $ - $ 4,282 $ 11,460 $ - $ - $ - $ 

- 

- - - 1,650 - - - - 

- - - - 16,943 - - - 

- - - 29,136 - - - - 

- - 4,282 42,246 16,943 - - - 

- - - - - - - - 

953,724 - 110,642 (4,980) 105,205 20,119 165 111,142 

953,724 - 110,642 (4,980) 105,205 20,119 165 111,142 

$ 953,724 $ - $ 114,924 $ 37,266 $ 122,148 $ 20,119 $ 165 $ 111,142 

83

Capital 

Special Revenue Fund 

Projects Fund 

Total 

Total Special 

Nonmajor 

Measure Revenue Municipal Governmental 

AQMD "R" Funds Improvement Funds 

$ 255,251 $ 299,663 $ 6,333,651 $ 92,810 $ 6,426,461 

- - 840,307 350,800 1,191,107 

592 696 14,700 215 14,915 

- - 8,053 - 8,053 

- - 550 - 550 

$ 255,843 $ 300,359 $ 7,197,261 $ 443,825 $ 7,641,086 

$ - $ - $ 625,929 $ 92,054 $ 717,983 

- - 52,160 - 52,160 

- - 214,675 350,800 565,475 

- - 29,136 - 29,136 

- - 921,900 442,854 1,364,754 

- - - - 

255,843 300,359 6,275,361 971 6,276,332 

255,843 300,359 6,275,361 971 6,276,332 

$ 255,843 $ 300,359 $ 7,197,261 $ 443,825 $ 7,641,086 

84


85


Combining Statement of Revenues, Expenditures and Changes in Fund Balances 

Non-Major Governmental Funds 



REVENUES: 

Street 

Traffic 

Improvements Congestion Drainage Sewer SB 821 

Investment and rental income $ 5,965 $ 12,697 $ - $ 72,023 $ 

- 

Revenues from other agencies 1,788,564 496,287 - - 93,605 

Franchise 6,307 - - - - 

Current fees and services - - 759 58,466 - 

Other revenues - - - - - 

Total Revenues 1,800,836 508,984 759 130,489 93,605 

EXPENDITURES: 

Current: 

Legislative and Administration 11,140 - - - - 

Community Development - - - - - 

Public Works 3,789,870 146,943 8,930 98,040 - 

Water and Power - - - 32,140 - 

Community and Safety Services - - - - - 

Administrative Services 84,000 - 11,170 83,220 - 

Capital outlay 1,292,211 360,387 - - 93,605 

Total Expenditures 5,177,221 507,330 20,100 213,400 93,605 

REVENUES OVER 

(UNDER) EXPENDITURES (3,376,385) 1,654 (19,341) (82,911) - 


Transfers in 3,608,889 - 19,341 - - 

Transfers out - - - (2,000,000) - 

Total Other Financing Sources (Uses) 3,608,889 - 19,341 (2,000,000) - 

NET CHANGE IN FUND BALANCES 232,504 1,654 - (2,082,911) - 

FUND BALANCE (DEFICIT): 

Beginning of Year 474,469 466,610 - 5,330,816 - 

End of Year $ 706,973 $ 468,264 $ - $ 3,247,905 $ 

- 

86


Public Safety Grants Fund 

Local Law 

Proposition Proposition Assessment Los Coyotes Enforcement COPS Library Environmental 

"A" "C" District #6 Lighting District Grant Grant Grant Grant 

$ 26,188 $ - $ 2,372 $ - $ 2,454 $ 1,079 $ 32 $ 2,437 

890,978 629,136 29,625 746,438 - 122,043 22,582 22,353 

- - - - - - - - 

16,431 81,664 - - - - - - 

- - - 109,183 - - - - 

933,597 710,800 31,997 855,621 2,454 123,122 22,614 24,790 

- - - - - - - - 

489,201 1,267,027 - - - - - - 

- - - 1,153,030 - - - 22,353 

- - - - - - - - 

- - - - 12,560 122,044 - - 

- - 11,170 116,460 - - 22,582 - 

- - - - - - - - 

489,201 1,267,027 11,170 1,269,490 12,560 122,044 22,582 22,353 

444,396 (556,227) 20,827 (413,869) (10,106) 1,078 32 2,437 

- 548,197 - 372,110 - - - - 

(548,197) - - - - - - - 

(548,197) 548,197 - 372,110 - - - - 

(103,801) (8,030) 20,827 (41,759) (10,106) 1,078 32 2,437 

1,057,525 8,030 89,815 36,779 115,311 19,041 133 108,705 

$ 953,724 $ - $ 110,642 $ (4,980) $ 105,205 $ 20,119 $ 165 $ 111,142 

87

Capital 

Special Revenue Fund 

Projects Fund 

Total 

Total Special 

Nonmajor 

Measure Revenue Municipal Governmental 

AQMD "R" Funds Improvement Funds 

$ 5,480 $ 4,667 $ 135,394 $ 971 $ 136,365 

46,985 348,431 5,237,027 400,000 5,637,027 

- - 6,307 - 6,307 

- - 157,320 - 157,320 

- - 109,183 - 109,183 

52,465 353,098 5,645,231 400,971 6,046,202 

- - 11,140 - 11,140 

36,895 - 1,793,123 - 1,793,123 

- - 5,219,166 - 5,219,166 

- - 32,140 - 32,140 

- - 134,604 - 134,604 

700 - 329,302 - 329,302 

- 52,739 1,798,942 981,537 2,780,479 

37,595 52,739 9,318,417 981,537 10,299,954 

14,870 300,359 (3,673,186) (580,566) (4,253,752) 

- - 4,548,537 581,537 5,130,074 

- - (2,548,197) - (2,548,197) 

- - 2,000,340 581,537 2,581,877 

14,870 300,359 (1,672,846) 971 (1,671,875) 

240,973 - 7,948,207 - 7,948,207 

$ 255,843 $ 300,359 $ 6,275,361 $ 971 $ 6,276,332 

88


89


Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 

Street Improvements Special Revenue Fund 


REVENUES: 

Variance 

Original Final Positive 

Budget Budget Actual (Negative) 

Investment and rental income $ - $ - $ 5,965 $ 5,965 

Revenues from other agencies 2,565,585 2,565,585 1,788,564 (777,021) 

Franchise - - 6,307 6,307 

Total Revenues 2,565,585 2,565,585 1,800,836 (764,749) 

EXPENDITURES: 

Current: 

Legislative and Administrative 9,790 8,170 11,140 (2,970) 

Public Works 3,891,180 3,972,720 3,789,870 182,850 

Administrative Services 95,790 92,900 84,000 8,900 

Capital outlay 2,375,000 1,459,730 1,292,211 167,519 

Total Expenditures 6,371,760 5,533,520 5,177,221 356,299 

REVENUES OVER (UNDER) EXPENDITURES (3,806,175) (2,967,935) (3,376,385) (408,450) 


Transfers in 3,557,348 3,748,726 3,608,889 (139,837) 

Total Other Financing Sources (Uses) 3,557,348 3,748,726 3,608,889 (139,837) 

NET CHANGE IN FUND BALANCE (248,827) 780,791 232,504 (548,287) 

FUND BALANCE: 

Beginning of Year 474,469 474,469 474,469 - 

End of Year $ 225,642 $ 1,255,260 $ 706,973 $ (548,287) 

90



Traffic Congestion Special Revenue Fund 


REVENUES: 

Variance 




Revenues from other agencies 519,005 519,005 496,287 (22,718) 

Total Revenues 519,005 519,005 508,984 (10,021) 

EXPENDITURES: 

Current: 

Public works - - 146,943 (146,943) 

Capital outlay - 460,000 360,387 99,613 

Total expenditures - 460,000 507,330 (47,330) 

REVENUES OVER (UNDER) EXPENDITURES 519,005 59,005 1,654 (57,351) 


Transfers in (out) (519,005) - - 

Total Other Financing Sources (Uses) (519,005) - - - 

NET CHANGE IN FUND BALANCE - 59,005 1,654 (57,351) 

FUND BALANCE: 


End of Year $ 466,610 $ 525,615 $ 468,264 $ (57,351) 

91



Drainage Special Revenue Fund 


REVENUES: 

Variance 



Current fees and services $ 1,000 $ 1,500 $ 759 $ (741) 

Total Revenues 1,000 1,500 759 (741) 

EXPENDITURES: 

Current: 

Public Works 8,570 8,600 8,930 (330) 

Administrative Services 12,600 11,980 11,170 810 

Total Expenditures 21,170 20,580 20,100 480 

REVENUES OVER (UNDER) EXPENDITURES (20,170) (19,080) (19,341) (261) 


Transfers in 20,170 19,080 19,341 261 

Total Other Financing Sources (Uses) 20,170 19,080 19,341 261 

NET CHANGE IN FUND BALANCE - - - - 

FUND BALANCE: 

Beginning of Year - - - - 

End of Year $ - $ - $ - $ 

- 

92



Sewer Special Revenue Fund 


REVENUES: 

Variance 



Investment and rental income $ 108,100 $ 67,300 $ 72,023 $ 4,723 

Current fees and services 63,000 67,000 58,466 (8,534) 


EXPENDITURES: 

Current: 

Public Works 95,910 95,660 98,040 (2,380) 

Water and Power 28,470 29,390 32,140 (2,750) 


Total Expenditures 211,260 209,140 213,400 (4,260) 

REVENUES OVER (UNDER) EXPENDITURES (40,160) (74,840) (82,911) (8,071) 


Transfers in (out) (2,000,000) (2,000,000) (2,000,000) - 

Total Other Financing Sources (Uses) (2,000,000) (2,000,000) (2,000,000) - 

NET CHANGE IN FUND BALANCE (2,040,160) (2,074,840) (2,082,911) (8,071) 

FUND BALANCE: 

Beginning of Year 5,330,816 5,330,816 5,330,816 - 

End of Year $ 3,290,656 $ 3,255,976 $ 3,247,905 $ (8,071) 

93



SB 821 Special Revenue Fund 


REVENUES: 

Variance 



Revenues from other agencies $ 28,000 $ 28,000 $ 93,605 $ 65,605 

Total Revenues 28,000 28,000 93,605 65,605 

EXPENDITURES: 

Capital outlay - 85,000 93,605 (8,605) 

Total Expenditures - 85,000 93,605 (8,605) 

REVENUES OVER (UNDER) EXPENDITURES 28,000 (57,000) - 57,000 

Transfers in (out) - 57,000 - (57,000) 

Total Other Financing Sources (Uses) - 57,000 - (57,000) 

NET CHANGE IN FUND BALANCE 28,000 - - - 

FUND BALANCE: 


End of Year $ 28,000 $ - $ - $ 

- 

94



Proposition "A" Special Revenue Fund 


REVENUES: 

Variance 



Investment and rental income $ 18,680 $ 31,200 $ 26,188 $ (5,012) 

Revenues from other agencies 1,250,000 942,885 890,978 (51,907) 

Current fees and services 17,000 12,000 16,431 4,431 

Total Revenues 1,285,680 986,085 933,597 (52,488) 

EXPENDITURES: 

Current: 

Community Development 800,000 800,000 489,201 310,799 

Total Expenditures 800,000 800,000 489,201 310,799 

REVENUES OVER (UNDER) EXPENDITURES 485,680 186,085 444,396 258,311 


Transfers out (476,000) (541,970) (548,197) (6,227) 

Total Other Financing Sources (Uses) (476,000) (541,970) (548,197) (6,227) 

NET CHANGE IN FUND BALANCE 9,680 (355,885) (103,801) 252,084 

FUND BALANCE: 

Beginning of Year 1,057,525 1,057,525 1,057,525 - 

End of Year $ 1,067,205 $ 701,640 $ 953,724 $ 252,084 

95



Proposition "C" Special Revenue Fund 


REVENUES: 

Variance 



Revenue from other agencies $ 850,000 $ 800,000 $ 629,136 $ (170,864) 

Current fees and services 124,000 100,000 81,664 (18,336) 


EXPENDITURES: 

Current: 

Community Development 1,450,000 1,450,000 1,267,027 182,973 

Total Expenditures 1,450,000 1,450,000 1,267,027 182,973 



Transfers in 476,000 541,970 548,197 6,227 

Total Other Financing Sources (Uses) 476,000 541,970 548,197 6,227 

NET CHANGE IN FUND BALANCE - (8,030) (8,030) - 

FUND BALANCE: 


End of Year $ 8,030 $ - $ - $ 

- 

96



Assessment District #6 Special Revenue Fund 


REVENUES: 

Variance 



Investment and rental income $ 925 $ 860 $ 2,372 $ 1,512 

Revenues from other agencies 10,000 26,180 29,625 3,445 


EXPENDITURES: 

Current: 


Total Expenditures 12,600 11,980 11,170 810 

REVENUES OVER (UNDER) EXPENDITURES (1,675) 15,060 20,827 5,767 

FUND BALANCE: 


End of Year $ 88,140 $ 104,875 $ 110,642 $ 5,767 

97



Los Coyotes Lighting District Special Revenue Fund 


REVENUES: 

Variance 



Revenues from other agencies $ 690,000 $ 734,855 $ 746,438 $ 11,583 

Other revenues 107,000 109,185 109,183 (2) 


EXPENDITURES: 

Current: 

Public Works 895,040 1,020,410 1,153,030 (132,620) 

Administrative Services 124,500 120,750 116,460 4,290 

Total Expenditures 1,019,540 1,141,160 1,269,490 (128,330) 



Transfers in 222,540 260,341 372,110 111,769 

Total Other Financing Sources (Uses) 222,540 260,341 372,110 111,769 

NET CHANGE IN FUND BALANCE - (36,779) (41,759) (4,980) 

FUND BALANCE (DEFICIT): 


End of Year $ 36,779 $ - $ (4,980) $ (4,980) 

98



Local Law Enforcement Grants Special Revenue Fund 


REVENUES: 

Variance 



Investment and rental income $ 2,000 $ 2,000 $ 2,454 $ 454 

Total Revenues 2,000 2,000 2,454 454 

EXPENDITURES: 

Current: 

Community and Safety Services 12,560 (12,560) 

Total Expenditures - - 12,560 (12,560) 

REVENUES OVER (UNDER) EXPENDITURES 2,000 2,000 (10,106) (12,106) 


Transfers out (2,000) (2,000) - 2,000 

Total Other Financing Sources (Uses) (2,000) (2,000) - 2,000 

NET CHANGE IN FUND BALANCE - - (10,106) (10,106) 

FUND BALANCE: 



99



COPS Grants Special Revenue Fund 


REVENUES: 

Variance 



Investment and rental income $ 375 $ 375 $ 1,079 $ 704 



EXPENDITURES: 

Current: 

Community and Safety Services - - 122,044 (122,044) 




Transfers out (101,000) (100,000) - 100,000 


NET CHANGE IN FUND BALANCE (625) 375 1,078 703 

FUND BALANCE: 


End of Year $ 18,415 $ 19,415 $ 20,119 $ 703 

100



Library Grants Special Revenue Fund 


REVENUES: 

Variance 



Investment and rental income $ - $ - $ 32 $ 

32 

Revenues from other agencies 38,700 22,000 22,582 582 

Total Revenues 38,700 22,000 22,614 614 

EXPENDITURES: 

Current: 

Administrative Services 22,582 (22,582) 


REVENUES OVER (UNDER) EXPENDITURES 38,700 22,000 32 (21,968) 


Transfers out (38,700) (22,133) - 22,133 


NET CHANGE IN FUND BALANCE - (133) 32 165 

FUND BALANCE: 

Beginning of Year 133 133 133 - 

End of Year $ 133 $ - $ 165 $ 165 

101



Environmental Grants Special Revenue Fund 


REVENUES: 

Variance from 

Final Budget 



Investment and rental income $ 2,120 $ 2,000 $ 2,437 $ 437 



EXPENDITURES: 

Current: 

Public Works - - 22,353 (22,353) 




Transfers out (31,770) (31,770) - 31,770 


NET CHANGE IN FUND BALANCE (650) (20,770) 2,437 23,207 

FUND BALANCE: 



102



AQMD Special Revenue Fund 


REVENUES: 

Variance 



Investment and rental income $ 4,150 $ 5,500 $ 5,480 $ (20) 

Revenues from other agencies 67,000 60,000 46,985 (13,015) 


EXPENDITURES: 

Current: 

Community Development 29,890 45,080 36,895 8,185 

Administrative Services 3,150 2,990 700 2,290 

Total Expenditures 33,040 48,070 37,595 10,475 


FUND BALANCE: 



103



Measure "R" Special Revenue Fund 


REVENUES: 

Variance 






EXPENDITURES: 

Capital outlay - - 52,739 (52,739) 


REVENUES OVER (UNDER) EXPENDITURES 282,580 282,580 300,359 17,779 

FUND BALANCE: 



104

INTERNAL SERVICE FUNDS 

Equipment Replacement Fund - to account for the regular maintenance and replacement of the City’s capital 

equipment and office equipment inventory and to accumulate funds necessary for equipment replacement. 

105



Internal Service Funds 

June 30, 2010 

Equipment 

Replacement 

ASSETS 

Current assets: 

Cash and investments $ 15,501,407 

Interest receivables 35,978 

Total Assets 15,537,385 

LIABILITIES 

Current Liabilities: 

Accounts payable 44,070 

Total Liabilities 44,070 

NET ASSETS 

Unrestricted 15,493,315 

Total Net Assets $ 15,493,315 

106


Statement of Revenues, Expenses and Changes in Net Assets 



Equipment 

Replacement 

OPERATING EXPENSES: 

Administrative costs $ 745,760 

Total Operating Expenses 745,760 

OPERATING INCOME (LOSS) (745,760) 

NONOPERATING REVENUES (EXPENSES): 

Interest income 344,810 

Total Nonoperating Revenues (Expenses) 344,810 

CHANGE IN NET ASSETS (400,950) 

NET ASSETS: 

Beginning of Year 15,894,265 

End of Year $ 15,493,315 

107


Statement of Cash Flows 



Equipment 

Replacement 

CASH FLOWS FROM OPERATING ACTIVITIES: 

Cash paid to other suppliers of goods or services $ (416,000) 

Cash paid to employees (285,690) 

Net Cash Provided by (Used for) Operating Activities (701,690) 

CASH FLOWS FROM INVESTING ACTIVITIES: 

Interest income received 308,832 

Net Cash Provided by (Used for) Investing Activities 308,832 

Net Increase (Decrease) in Cash and Cash Equivalents (392,858) 

CASH AND CASH EQUIVALENTS: 

Beginning of Year 15,894,265 

End of Year $ 15,501,407 

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET 

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES: 

Operating income (loss) $ (745,760) 

Adjustments to reconcile operating income to net cash 

provided by (used for) operating activities: 

Change in assets and liabilities: 

Increase (decrease) in accounts payable 44,070 

Total Adjustments 44,070 

Net Cash Provided by (Used for) Operating Activities $ (701,690) 

108

STATISTICAL SECTION 

(Unaudited) 

This part of the City of Cerritos's comprehensive annual financial report presents detailed information as a context for 

understanding what the information in the financial statements, note disclosures, and required supplementary 

information says about the City's overall financial health. 

Contents 

Page 

Financial Trends 110 

These tables contain trend information to help the reader understand how the City's financial 

performance and well-being have changed over time. 

Revenue Capacity 122 

These tables contain information to help the reader assess the City's most significant local 

revenue source, the property tax. 

Debt Capacity 128 

These tables present information to help the reader assess the affordability of the City's current 

levels of outstanding debt and the City's ability to issue additional debt in the future. 

Demographic and Economic Information 134 

These tables offer demographic and economic indicators to help the reader understand the 

environment within which the City's financial activities take place. 

Operating Information 136 

These tables contain service and infrastructure data to help the reader understand how the 

information in the City's financial report relates to the services the City provides and the 

activities it performs. 

Sources: 

Unless otherwise noted, the information in these tables is derived from the 

comprehensive annual financial reports for the relevant year. 

109


Net Assets By Component 

Last Eight Fiscal Years 

(accrual basis of accounting) 

Fiscal Year 

2002-03 2003-04 2004-05 2005-06 


Invested in capital assets, net of related debt $ 83,888,493 $ 121,366,767 $ 128,354,981 $ 124,591,591 

Restricted For: 

Special revenue 8,063,081 6,245,154 6,587,749 7,143,179 

Street and sewer related purposes - - - - 

Transportation related purposes - - - - 

Assessment districts - - - - 

Miscellaneous grants - - - - 

Asset replacement - 14,308,312 15,072,026 14,900,417 

Other post employment benefits - - - - 

Unrestricted 215,788,662 156,663,276 152,914,279 144,717,403 

Total governmental activities net assets 307,740,236 298,583,509 302,929,035 291,352,590 

Business-type Activities: 

Invested in capital assets, net of related debt 29,922,954 29,578,894 31,835,092 42,440,170 

Unrestricted 20,818,339 19,195,242 18,232,852 15,685,283 

Total business-type activities net assets 50,741,293 48,774,136 50,067,944 58,125,453 

Primary Government: 

Invested in capital assets, net of related debt 113,811,447 150,945,661 160,190,073 167,031,761 

Restricted For: 

Special revenue 8,063,081 6,245,154 6,587,749 7,143,179 

Street and sewer related purposes - - - - 

Transportation related purposes - - - - 

Assessment districts - - - - 

Miscellaneous grants - - - - 

Asset replacement - 14,308,312 15,072,026 14,900,417 

Other post employment benefits - - - - 

Unrestricted 236,607,001 175,858,518 171,147,131 160,402,686 

Total primary government net assets $ 358,481,529 $ 347,357,645 $ 352,996,979 $ 349,478,043 

The City has elected to show only eight years of data for this schedule coinciding with the implementation of GASB 34 in fiscal year 2002-2003. 

Information prior to implementation of GASB 34 is not available. 

Source: Finance Division, City of Cerritos 

110

Fiscal Year 

2006-07 2007-08 2008-09 2009-10 

$ 123,877,356 $ 112,701,038 $ 108,311,131 $ 129,318,648 

6,663,515 - - - 

- 6,498,583 6,271,895 4,423,142 

- 1,368,331 1,065,555 1,254,083 

- 77,532 126,594 105,662 

- 239,106 484,163 492,474 

13,595,796 28,582,731 24,966,400 25,275,197 

- 14,000,000 - - 

156,184,426 143,862,339 158,317,863 127,557,614 

300,321,093 307,329,660 299,543,601 288,426,820 

28,761,072 30,454,814 41,912,421 40,406,258 

13,011,620 9,099,926 2,164,728 (1,319,738) 

41,772,692 39,554,740 44,077,149 39,086,520 

152,638,428 143,155,852 150,223,552 169,724,906 

6,663,515 - - - 

- 6,498,583 6,271,895 4,423,142 

- 1,368,331 1,065,555 1,254,083 

- 77,532 126,594 105,662 

- 239,106 484,163 492,474 

13,595,796 28,582,731 24,966,400 25,275,197 

- 14,000,000 - - 

169,196,046 152,962,265 160,482,591 126,237,876 

$ 342,093,785 $ 346,884,400 $ 343,620,750 $ 327,513,340 

111


Changes In Net Assets 



Fiscal Year 

2002-03 2003-04 2004-05 2005-06 

Expenses: 

Governmental activities: 

GLegislative and administrative $ 9,612,757 $ 10,849,842 $ 12,317,585 $ 5,137,856 

LCommunity development 6,411,921 3,594,264 4,696,912 3,461,730 

TPublic works 23,421,916 20,268,011 19,420,947 17,574,984 

Water and power - - - - 

PCommunity and safety services 18,281,998 22,430,205 18,769,565 20,107,426 

DAdministrative services 14,664,165 13,789,588 13,570,397 25,390,327 

ECerritos Center for the Performing Arts 14,526,215 14,021,467 12,661,796 13,166,416 

HUnallocated infrastructure depreciation 870,960 924,241 913,887 1,017,027 

Land transferred to developer - - - 1,752,597 

IInterest expense 16,784,520 16,187,807 15,952,869 16,189,176 

Total governmental activities expenses 104,574,452 102,065,425 98,303,958 103,797,539 

Business-type activities: 

Water 8,461,281 8,120,758 8,369,176 9,153,710 

Reclaimed water 1,007,903 1,434,632 796,974 1,541,594 

WElectric utility - 54,352 227,238 7,076,232 

Total business-type activities net assets 9,469,184 9,609,742 9,393,388 17,771,536 

Total primary government expenses $ 114,043,636 $ 111,675,167 $ 107,697,346 $ 121,569,075 

Program revenues: 

Governmental activities: 

Charges for services: 

Legislative and administrative $ 3,113 $ 15,290 $ 145 $ 1,536 

Community development 1,608,929 1,685,361 1,849,001 1,861,055 

Public works 555,720 649,676 725,501 759,197 


Community and cultural services 2,359,547 2,759,291 2,855,197 2,943,514 

Administrative services 2,744,760 2,917,003 3,248,205 3,059,380 

Cerritos Center for the Performing Arts 6,502,960 5,172,658 5,532,468 5,683,029 

Operating grants and contributions 8,642,059 7,805,246 7,474,648 8,324,225 

Capital grants and contributions - 106,620 82,317 352,285 

Total governmental activities program revenues 22,417,088 21,111,145 21,767,482 22,984,221 


Charges for services: 

Water 5,796,613 6,199,207 6,855,422 7,832,449 

Reclaimed water 580,307 484,908 748,555 540,922 

Electric utility - - - 5,171,744 

Capital grants and contributions 341,898 253,637 2,479,163 36,978 

Total business-type activities program revenues 6,718,818 6,937,752 10,083,140 13,582,093 

Total primary government program revenues $ 29,135,906 $ 28,048,897 $ 31,850,622 $ 36,566,314 

Net revenue (expense): 

Governmental activities $ (82,157,364) $ (80,954,280) $ (76,536,476) $ (80,813,318) 

Business-type activities (2,750,366) (2,671,990) 689,752 (4,189,443) 

Total primary government net expense $ (84,907,730) $ (83,626,270) $ (75,846,724) $ (85,002,761) 

The City has elected to show only eight years of data for this schedule coinciding with the implementation of GASB 34 in 

fiscal year 2002-2003. 

Information prior to implementation of GASB 34 is not available. 


112

Fiscal Year 

2006-07 2007-08 2008-09 2009-10 

$ 9,586,244 $ 10,763,138 $ 12,202,801 $ 24,016,676 

7,974,456 7,944,431 7,512,609 9,634,162 

21,644,742 21,251,184 23,981,467 17,574,871 

183,723 166,380 1,456,670 503,095 

21,788,095 21,553,201 24,661,818 23,219,777 

14,898,470 13,740,128 16,536,088 12,431,539 

12,309,527 12,950,937 12,613,288 10,795,353 

977,568 1,010,465 994,414 1,058,317 

- - - - 

16,857,542 16,686,433 16,811,036 16,114,428 

106,220,367 106,066,297 116,770,191 115,348,218 

9,633,874 10,249,111 9,034,371 9,690,959 

1,163,206 1,384,725 1,338,743 1,351,283 

8,390,869 9,064,917 9,189,345 6,524,284 

19,187,949 20,698,753 19,562,459 17,566,526 

$ 125,408,316 $ 126,765,050 $ 136,332,650 $ 132,914,744 

$ 5,401 $ 7,975 $ 24,123 $ 8,990 

2,059,152 2,530,848 1,151,681 1,472,210 

776,251 809,946 974,575 924,062 

- - - 8,200 

2,926,171 3,069,657 3,693,983 3,724,638 

3,078,915 1,949,196 1,421,710 1,313,723 

6,269,387 6,249,316 5,267,804 4,620,793 

9,247,019 8,954,724 9,954,624 11,297,870 

101,281 472,220 176,995 613,790 

24,463,577 24,043,882 22,665,495 23,984,276 

8,577,571 8,766,259 7,371,339 7,032,634 

852,558 886,454 902,348 698,021 

7,068,193 7,517,818 7,040,943 4,637,710 

125,020 888,011 135,613 109,677 

16,623,342 18,058,542 15,450,243 12,478,042 

$ 41,086,919 $ 42,102,424 $ 38,115,738 $ 36,462,318 

$ (81,756,790) $ (82,022,415) $ (94,104,696) $ (91,363,942) 

(2,564,607) (2,640,211) (4,112,216) (5,088,484) 

$ (84,321,397) $ (84,662,626) $ (98,216,912) $ (96,452,426) 

113


Change in Net Assets 



(Continued) 

Fiscal Year 

2002-03 2003-04 2004-05 2005-06 

General revenues and other changes in net assets: 


Taxes: 

Sales taxes $ 26,279,631 $ 26,540,867 $ 27,288,347 $ 26,136,953 

Property taxes in lieu of sales taxes 27,469,285 27,036,204 28,931,093 32,938,305 

Motor vehicle taxes 3,291,867 3,732,692 3,570,211 4,026,334 

Franchise taxes 1,011,506 1,123,865 1,072,893 1,146,323 

Transient occupancy taxes 294,792 312,177 423,239 443,467 

Other taxes 188,127 284,405 249,160 272,498 


Miscellaneous 588,745 175,006 104,209 24,664 

Transfers (128,299) (93,233) - (133) 

Total governmental activities 78,596,430 71,797,553 78,875,328 83,341,873 


Investment and rental income 1,110,441 611,600 604,056 529,425 

Gain (loss) on sale of assets (81,045) - - - 

Miscellaneous 2,387,606 - - - 

Transfers 128,299 93,233 - 133 

Total business-type activities 3,545,301 704,833 604,056 529,558 

Total primary government $ 82,141,731 $ 72,502,386 $ 79,479,384 $ 83,871,431 

Changes in net assets: 

Governmental activities $ (3,560,934) $ (9,156,727) $ 2,338,852 $ 2,528,555 

Business-type activities 794,935 (1,967,157) 1,293,808 (3,659,885) 

Total primary government $ (2,765,999) $ (11,123,884) $ 3,632,660 $ (1,131,330) 

The City has elected to show only eight years of data for this schedule coinciding with the implementation of GASB 34 

in fiscal year 2002-2003. Information prior to implementation of GASB 34 is not available. 


114

Fiscal Year 

2006-07 2007-08 2008-09 2009-10 

$ 26,680,643 $ 25,083,985 $ 20,602,899 $ 17,166,138 

32,293,806 35,005,279 36,392,537 34,842,837 

4,146,681 4,210,900 4,446,679 4,382,067 

1,341,635 1,418,403 1,507,105 1,498,545 

474,297 481,880 394,290 356,119 

403,210 240,331 258,898 286,895 

25,200,318 22,483,705 18,318,651 20,581,624 

79,703 106,499 195,668 1,132,936 

105,000 - 4,201,910 - 

90,725,293 89,030,982 86,318,637 80,247,161 

546,768 422,259 142,035 97,855 

- - - - 

- - - - 

(105,000) - (4,201,910) - 

441,768 422,259 (4,059,875) 97,855 

$ 91,167,061 $ 89,453,241 $ 82,258,762 $ 80,345,016 

$ 8,968,503 $ 7,008,567 $ (7,786,059) $ (11,116,781) 

(2,122,839) (2,217,952) (8,172,091) (4,990,629) 

$ 6,845,664 $ 4,790,615 $ (15,958,150) $ (16,107,410) 

115


Fund Balances of Governmental Funds 


(modified accrual basis of accounting) 

Fiscal Year 

2002-03 2003-04 2004-05 2005-06 

General fund: 

Reserved $ 8,033,673 $ 76,071,914 $ 76,993,950 $ 91,500,873 

Unreserved 182,507,752 111,105,238 113,993,942 97,162,922 

Total general fund $ 190,541,425 $ 187,177,152 $ 190,987,892 $ 188,663,795 

All other governmental funds: 

Reserved $ 4,020,515 $ 3,865,603 $ 3,967,607 $ 4,999,544 

Unreserved, reported in: 

Special revenue funds 8,063,081 6,245,154 6,587,749 7,143,179 

Debt service funds (23,317,416) (23,790,958) (25,644,125) (31,728,190) 

Capital projects funds 30,200,811 26,022,565 21,623,936 20,171,114 

Total all other governmental funds $ 18,966,991 $ 12,342,364 $ 6,535,167 $ 585,647 

The City has elected to show only eight years of data for this schedule coinciding with the implementation of GASB 34 in fiscal 

year 2002-2003. 


116

Fiscal Year 

2006-07 2007-08 2008-09 2009-10 

$ 92,579,824 $ 98,193,022 $ 99,903,724 $ 102,622,950 

101,236,061 81,992,326 81,541,328 80,477,124 

$ 193,815,885 $ 180,185,348 $ 181,445,052 $ 183,100,074 

$ 4,095,975 $ 2,837,221 $ 5,851,972 $ 1,953,330 

6,663,515 8,183,552 7,849,641 6,275,361 

(47,251,487) (45,566,239) (43,171,702) (66,053,156) 

34,522,333 21,762,988 19,212,994 23,322,838 

$ (1,969,664) $ (12,782,478) $ (10,257,095) $ (34,501,627) 

117


Changes in Fund Balances of Governmental Fund 


(modified accrual basis of accounting) 

Fiscal Years 

2002-03 2003-04 2004-05 2005-06 

Revenues: 

Taxes $ 54,231,835 $ 54,173,653 $ 56,891,838 $ 58,539,846 

Licenses and permits 1,582,962 1,620,309 1,673,017 1,844,753 

Fines and forfeitures 780,388 1,154,385 1,224,282 1,207,626 


Market value investment fluctuation - - - - 

Revenues from other agencies 12,253,101 11,102,756 11,948,199 14,104,013 

Current fees and services 10,648,407 9,549,672 10,197,847 10,333,249 

Franchises 1,011,506 1,123,865 1,072,893 1,146,324 

Other revenue 949,829 636,494 1,269,811 748,401 

Total revenues 100,320,745 91,621,156 101,027,406 105,772,101 

Expenditures: 

Current: 

Legislative and administrative 8,575,389 10,333,065 11,657,197 4,098,818 

Community development 4,033,261 3,316,869 4,122,251 4,607,205 

Public works 17,727,961 17,492,649 18,056,952 19,659,561 


Community and safety services 15,989,974 18,074,542 17,877,074 18,740,162 

Administrative services 10,457,027 10,691,994 10,520,783 20,349,051 

Cerritos Center for the Performing Arts 12,130,813 12,326,532 10,966,179 10,331,228 

Land transferred to developer - - - - 

Capital outlay 17,259,976 8,581,890 8,661,850 15,495,350 

Prefund other post employment benefits obligation - - - - 

Debt service: 

Principal retirement 2,855,000 4,200,000 4,725,000 5,105,000 

Interest 15,021,364 16,404,229 16,099,412 16,341,796 

Bond issuance costs 2,212,463 - - - 

Total expenditures 106,263,228 101,421,770 102,686,698 114,728,171 

Excess of revenues over 

(under) expenditures (5,942,483) (9,800,614) (1,659,292) (8,956,070) 

Other Financing Sources (Uses): 

Transfers in 54,542,346 12,234,072 10,558,209 19,901,653 

Transfers out (54,753,609) (12,422,358) (10,895,374) (20,244,200) 

Issuance of debt 121,426,395 - - 1,025,000 

Payment to refunding bond escrow agent (53,478,228) - - - 

Total other financing sources (uses) 67,736,904 (188,286) (337,165) 682,453 

Net change in fund balances 61,794,421 (9,988,900) (1,996,457) (8,273,617) 

Fund balances - July 1 147,713,995 209,508,416 199,519,516 197,523,059 

Fund balances - June 30 $ 209,508,416 $ 199,519,516 $ 197,523,059 $ 189,249,442 

Debt service as a percentage 

of noncapital expenditures 22.57% 22.19% 22.15% 21.61% 

The City has elected to show only eight years of data for this schedule coinciding with the implementation of GASB 34 in fiscal year 2002-2003. 


118

Fiscal Years 

2006-07 2007-08 2008-09 2009-10 

$ 59,211,957 $ 61,019,400 $ 58,009,779 $ 52,651,959 

2,026,677 2,425,107 2,037,294 1,913,968 

1,178,472 1,162,016 1,146,489 1,103,441 

24,607,789 21,889,177 18,358,111 19,768,319 

- - - - 

13,904,277 13,907,020 15,161,460 16,614,010 

10,888,836 9,699,277 7,783,043 7,090,018 

1,341,635 1,418,403 1,507,105 1,504,852 

644,735 1,103,420 1,140,096 1,848,075 

113,804,378 112,623,820 105,143,377 102,494,642 

9,983,075 10,148,023 10,943,195 21,357,884 

5,992,210 4,851,226 5,042,844 4,657,802 

20,146,511 19,926,345 17,288,857 16,127,237 

143,296 164,016 299,790 105,823 

19,985,188 19,904,050 20,894,079 21,351,962 

11,719,308 12,322,795 11,495,344 10,646,488 

10,508,816 11,083,634 9,528,923 8,781,832 

- - - - 

8,457,564 21,081,472 6,695,801 18,533,849 

- 14,000,000 - - 

6,092,500 6,467,500 6,862,500 7,260,000 

17,018,816 16,851,905 16,508,867 16,261,275 

- - - - 

110,047,284 136,800,966 105,560,200 125,084,152 

3,757,094 (24,177,146) (416,823) (22,589,510) 

30,324,598 14,025,441 15,856,712 25,559,016 

(30,494,913) (14,291,646) (11,654,802) (25,559,016) 

- - - - 

- - - - 

(170,315) (266,205) 4,201,910 - 

3,586,779 (24,443,351) 3,785,087 (22,589,510) 

188,259,442 191,846,221 167,402,870 171,187,957 

$ 191,846,221 $ 167,402,870 $ 171,187,957 $ 148,598,447 

22.75% 20.15% 23.64% 21.46% 

119


Governmental Activities (1) Revenues by Sources 

Last Ten Fiscal Years 

Other 

Licenses 

Fiscal Sales Other Business Building and 

Year Tax Franchise Taxes Licenses Permits Permits 

2000-01 $ 26,516,264 $ 1,258,268 $ 23,432,771 $ 635,019 $ 863,334 $ 1,625 

2001-02 24,381,406 1,147,739 24,552,345 722,909 600,465 1,275 

2002-03 26,279,631 1,011,506 27,952,204 726,350 832,532 24,080 

2003-04 26,540,866 1,123,865 27,632,787 761,667 856,912 1,730 

2004-05 27,288,347 1,072,893 29,603,491 796,205 871,787 5,025 

2005-06 26,095,745 1,146,324 32,444,100 839,060 1,000,338 5,355 

2006-07 26,040,643 1,341,635 33,856,356 908,258 1,110,529 7,890 

2007-08 25,291,910 1,418,403 35,727,490 963,775 1,455,121 6,211 

2008-09 20,964,054 1,507,105 37,045,725 888,701 1,137,133 11,460 

2009-10 17,166,108 1,504,852 35,485,851 882,434 1,024,714 6,820 

(1) Includes General, Special Revenue, Debt Service, and Capital Projects funds. 

Source: 

Finance Division, City of Cerritos 

120

Fines Investment Charges From 

and and Rental For Other 

Forfeitures Income Services Agencies Other Totals 

$ 779,610 $ 25,347,401 $ 10,532,162 $ 12,371,400 $ 1,295,588 $ 103,033,442 

791,270 20,771,225 10,802,271 11,564,242 668,114 96,003,261 

780,388 18,862,717 10,648,407 12,253,101 949,829 100,320,745 

1,154,385 12,260,022 9,549,672 11,102,756 636,494 91,621,156 

1,224,282 16,749,519 10,197,847 11,948,199 1,269,811 101,027,406 

1,207,626 17,847,889 10,333,249 14,104,013 748,402 105,772,101 

1,178,472 24,607,789 8,862,159 13,904,277 1,986,370 113,804,378 

1,162,016 21,889,177 9,699,277 13,907,020 1,103,420 112,623,820 

1,146,489 18,358,111 7,783,043 15,161,460 1,140,096 105,143,377 

1,103,441 19,768,319 7,090,018 16,614,010 1,848,075 102,494,642 

121


Assessed Value of Taxable Property 


Fiscal Year 

Category 2000-2001 2001-2002 2002-2003 2003-2004 

Residential $ 2,828,745,160 $ 3,004,053,067 $ 3,194,101,239 $ 3,417,442,052 

Commercial 711,425,050 734,796,343 779,666,425 941,597,239 

Industrial 561,808,382 569,466,932 596,087,183 624,825,548 

Government - - - - 

Institutional 9,552,077 12,520,302 8,535,262 8,681,377 

Irrigated - - - 306 

Miscellaneous 292 296 300 - 

Recreational - - 366,228 4,922,132 

Vacant land 25,962,553 39,367,468 27,410,710 12,789,464 

SBE nonunitary 1,541,234 1,590,716 1,614,284 1,853,601 

Possessory 

interest 2,005,443 2,442,550 2,993,961 4,919,537 

Unsecured 270,691,344 281,489,877 275,661,875 255,457,453 

Exempt (31,393,573) (32,010,938) (32,899,559) (29,673,960) 

Unknown 16,454,745 1,897,237 1,936,549 1,986,321 

Subtotal 4,396,792,707 4,615,613,850 4,855,474,457 5,244,801,070 

Add back 

exempt 31,393,573 32,010,938 32,899,559 29,673,960 

Grand Total $ 4,428,186,280 $ 4,647,624,788 $ 4,888,374,016 $ 5,274,475,030 

Total 

Direct Rate 0.60240% 0.59331% 0.59209% 0.60187% 

Source: HdL Coren & Cone 

122

Fiscal Year 

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 

$ 3,652,684,822 $ 3,925,932,025 $ 4,236,487,296 $ 4,492,069,661 $ 4,672,038,063 $ 4,539,269,735 

974,952,423 1,057,807,314 1,160,350,438 1,228,751,400 1,343,951,315 1,366,103,446 

654,396,867 685,464,066 708,718,893 757,782,869 908,573,269 952,870,116 

- - 2,750,027 - - - 

9,451,184 21,702,864 27,537,449 26,101,211 19,811,379 20,572,239 

- - - 328 334 340 

- - - - - - 

5,014,027 5,114,306 5,216,591 6,523,402 6,653,868 6,786,944 

9,366,646 10,224,697 8,462,513 9,684,651 8,777,294 5,495,684 

2,035,367 367 1,309,388 388 1,237,559 2,737,670 2,597,624 2,597,624 

4,678,298 4,717,568 6,518,019 5,849,466 14,163,200 13,854,359 

272,282,747 275,010,910 290,016,895 294,796,408 306,757,198 309,113,020 

(28,510,172) (29,083,529) (29,016,454) (30,799,948) (28,844,386) (39,947,438) 

2,023,708 2,064,175 2,105,454 - - - 

5,558,375,917 5,960,263,784 6,420,384,680 6,793,497,118 7,254,479,158 7,176,716,069 

28,510,172 29,083,529 29,016,454 30,799,948 28,844,386 39,947,438 

$ 5,586,886,089 $ 5,989,347,313 $ 6,449,401,134 $ 6,824,297,066 $ 7,283,323,544 $ 7,216,663,507 

0.56813% 0.58997% 0.59562% 0.59608% 0.59547% 0.48569% 

123


Direct and Overlapping Property Tax Rates 

(Per $100 of Taxable Value) 


Los 

Sanitation/ 

Fiscal Basic Tax Angeles School Flood Water 

Year Levy County District Control District Totals 

2001 1.0000 .0013 .0257 .0016 .0088 1.0374 

2002 1.0000 .0011 .0250 .0005 .0077 1.0343 

2003 1.0000 .0010 .0278 .0009 .0067 1.0364 

2004 1.0000 .0010 .0249 .0005 .0067 1.0331 

2005 1.0000 .0010 .0457 .0002 .0058 1.0527 

2006 1.0000 .0010 .0517 .0001 .0052 1.0580 

2007 1.0000 .0010 .0482 .0001 .0047 1.0540 

2008 1.0000 .0000 .0351 .0000 .0045 1.0396 

2009 1.0000 .0000 .0338 .0000 .0043 1.0381 

2010 1.0000 .0000 .0455 .0000 .0043 1.0498 

Source: HdL Coren & Cone, Los Angeles County Auditor-Controller 

124


Ten Largest Secured Taxpayers 

Current Year and Nine Years Ago 

2009-10 2000-01 

Percentage 

Percentage 

Property Property Assessed of Assessed of 

Owner Description Valuations Total (1) Valuations Total (1) 

Macerich Cerritos LLC Commercial $ 241,329,532 

3.34% $ - 0.00% 

Walton CWCA O'Donnell Cerritos Industrial 132,130,800 1.83% - 0.00% 

Maguire Partners, Inc Commercial 90,521,041 1.25% - 0.00% 

Cerritos Towne Center Commercial 73,117,209 1.01% - 0.00% 

Cerritos Office Center Commercial 64,891,280 0.90% - 0.00% 

Cerritos Best Plaza, LLC Commercial 63,484,626 0.88% - 0.00% 

TA Western LLC Industrial 60,185,083 0.83% - 0.00% 

Cerritos Corporate Tower LLP Commercial 49,050,000 0.68% - 0.00% 

Cerritos Promenade LLC Commercial 45,462,150 0.63% - 0.00% 

Bloomfield Cerritos Associates, LLC Commercial 43,730,000 0.61% - 0.00% 

Macerich Cerritos Commercial - 0.00% 95,214,523 2.29% 

Calwest Industries Properties Industrial - 0.00% 71,791,442 1.73% 

TA Western LLC Industrial - 0.00% 57,684,083 1.39% 

Commonwealth Cousins I LLC Office Building - 0.00% 56,753,600 1.37% 

Spieker Properties LLP Office Building - 0.00% 51,404,797 1.24% 

Vestar Development Office Building - 0.00% 41,871,325 1.01% 

Dayton Hudson Corp. Shopping Center - 0.00% 34,884,458 0.84% 

Makallon Cerritos Office Building Office Building - 0.00% 28,425,098 0.68% 

TIAA Realty Inc. Warehouse/Distributions - 0.00% 24,256,886 0.58% 

CWIP Corp Industrial - 0.00% 20,736,446 0.50% 

$ 863,901,721 11.97% $ 483,022,658 11.63% 

(1) 2009-10 and 2000-01 total secured assessed valuation is $ 7,216,663,507 

$ 4,155,953,702 

Source: HdL Coren & Cone 

125


Property Tax Levies and Collections 


Fiscal 

Year 

Property 

Tax 

Collections 

2000-01 $ 21,276,453 

2001-02 22,400,298 

2002-03 25,875,620 

2003-04 25,106,032 

2004-05 26,620,835 

2005-06 29,163,729 

2006-07 29,860,652 

2007-08 32,454,062 

2008-09 33,711,139 

2009-10 32,144,708 

Note: This table represents tax increment revenues received by the Cerritos Redevelopment Agency, 

representing the increase in valuation of the redevelopment project areas over the base year, 

1969-70. The City of Cerritos does not levy a direct property tax. 

Source: 


126


127


Ratios of Outstanding Debt by Type 



Los Los Los 

Cerritos Coyotes Cerritos 

Redevelopment Redevelopment Redevelopment 

Add (Less) Deferred Amounts 

Project Project Project Deferred 

Fiscal Revenue Revenue Note Bond Bond Charge on 

Year Bonds Bonds Payable Premium Discount Refunding 

2002-03 $ 50,380,000 $ 143,380,000 $ - $ 6,440,668 $ (1,294,336) $ (2,835,691) 

2003-04 48,900,000 140,660,000 - 6,133,969 (1,232,700) (2,693,906) 

2004-05 47,240,000 137,595,000 - 5,827,270 (1,171,064) (2,552,121) 

2005-06 48,978,750 144,856,250 1,025,000 5,520,571 (1,109,428) (2,410,336) 

2006-07 46,883,125 140,859,375 1,025,000 5,213,872 (1,047,792) (2,268,551) 

2007-08 44,651,250 136,623,750 1,025,000 4,907,173 (986,156) (2,126,766) 

2008-09 42,278,125 132,134,375 1,025,000 4,600,474 (924,520) (1,984,981) 

2009-10 39,763,125 127,389,375 1,025,000 4,293,775 (862,885) (1,843,196) 

Note: Details regarding the outstanding debt can be found 

in the notes to basic financial statements. 

(a) Not available. 

The City has elected to show only eight years of data for this 

schedule coinciding with the implementation of GASB 34 in 

fiscal year 2002-2003. 


128

Total 

% of 

Primary Total Debt Personal 

Government Population per Capita Income 

$ 196,070,641 

51,716 $ 3,791 

12.054% 

191,767,363 51,748 3,706 11.169% 

186,939,085 51,792 3,609 10.485% 

196,860,807 51,944 3,790 10.144% 

190,665,029 52,020 3,665 9.210% 

184,094,251 52,096 3,534 8.361% 

177,128,473 52,172 3,395 (a) 

169,765,194 52,249 3,249 (a) 

129


Schedule of Direct and Overlapping Bonded Debt 

June 30, 2010 

Percent 

Debt Balance Applicable City's Share 

Outstanding to City of Debt 

*Metropolitan Water District $ 121,475,156 

0.463 % $ 

562,371 

Cerritos CC DS 2004 Series 2004A 3,595,000 20.508 % 737,272 

Cerritos CC DS 2005 Refunding Bonds 22,875,994 20.508 % 4,691,466 

Cerritos CCD DS 2004 Series 2006 30,645,000 20.508 % 6,284,753 

Cerritos CCD DS 2004 Series 2009C 55,000,000 20.508 % 11,279,537 

ABC USD 2003 Refunding Bond Series A 26,820,000 59.735 % 16,020,877 

ABC Unified SD DS 1997 Series B 30,811,700 59.735 % 18,405,311 

Total Overlapping Debt: $ 

57,981,587 

2009/10 Assessed Valuation: $3,990,830,863 After Deducting $3,225,832,644 Redevelopment Increment. 

Debt To Assessed Valuation Ratios: Direct Debt 0.00 % 

Overlapping Debt 1.45 % 

Total Debt 1.45 % 

Note: Prepared for the City of Cerritos by HdL Coren & Cone. 

130


131


Legal Debt Margin Information 


Fiscal Year 

2002-03 2003-04 2004-05 2005-06 

Debt Limit $ 738,016,496 $ 795,621,570 $ 842,826,108 $ 901,944,542 

Total net debt applicable to limit - - - - 

Legal debt margin $ 738,016,496 $ 795,621,570 $ 842,826,108 $ 901,944,542 

Total net debt applicable to the limit as a 

percent of debt limit 0.00% 0.00% 0.00% 0.00% 

Legal Debt Margin Calculation for Fiscal Year 2009-2010: 

Assessed value 

Add back: exempt real property 

Total assessed value 

Debt limit (15% of total assessed value) 

Debt applicable to limit 

Legal debt margin 

Note: 

Section 43605 of the Government Code of the State of California limits the amount of indebtedness for public 

improvements to 15% of the assessed valuation of all real and personal property of the City. 

The City has elected to show only eight years of data for this schedule coinciding with the implementation of GASB 34 in fiscal year 

year 2002-2003. 

Source: HdL Coren & Cone, Los Angeles County Assessors Office 


132

Fiscal Year 

2006-07 2007-08 2008-09 2009-10 

$ 971,890,907 $ 1,028,776,348 $ 1,098,825,713 $ 1,089,326,156 

- - - - 

$ 971,890,907 $ 1,028,776,348 $ 1,098,825,713 $ 1,089,326,156 

0.00% 0.00% 0.00% 0.00% 

$ 

7,216,663,507 

45,510,863 

$ 

7,262,174,370 

$ 

1,089,326,156 

- 

$ 

1,089,326,156 

133


Demographic and Economic Statistics 


Per Capita 

Personal 

City 

Fiscal Income Personal Unemployment 

Year Population (1) (in thousands) Income (2) * Rate (3) 

2002-03 51,716 31,452 1,626,572 3.50% 

2003-04 51,748 33,179 1,716,947 3.30% 

2004-05 51,792 34,426 1,782,991 2.60% 

2005-06 51,944 37,362 1,940,732 2.50% 

2006-07 52,020 39,794 2,070,084 2.60% 

2007-08 52,096 42,265 2,201,837 3.80% 

2008-09 52,172 (a) (a) 6.20% 

2009-10 52,249 (a) (a) 6.70% 

*Based on Los Angeles County personal income data 

(a) Not Available 

The City has elected to show only eight years of data for this schedule coinciding with the 

implementation of GASB 34 in fiscal year 2002-2003. 

Sources: 

(1) City of Cerritos 

(2) Bureau of Economic Analysis 

(3) State of California, Labor Market Information, Data Library 

134


Principal Employers 

Current Year and Seven Years Ago 

2010 2001** 

Percent of 

Percent of 

Number of Total Number of Total 

Employer Employees Employment* Employees Employment 

United Parcel Service 1,654 4.69% 

ABC Unified School District 1,231 3.49% 

Caremore 1,012 2.87% 

Southern Wine & Spirits of Southern California 979 2.77% 

City of Cerritos 592 1.68% 

College Hospital, Inc 530 1.50% 

Dolex Dollar Express 415 1.18% 

Marina Medical Billing 364 1.03% 

AT&T Wireless Services 353 1.00% 

Expert Automotive Associates 286 0.81% 

Total 7,416 21.02% 

*Based upon California Employment Development Department data of 35,288 total employment of all employers located 

within City limits. 

**Information not available 

Source: California Employment Development Department 

135


Full-Time and Part-Time City Employees 

By Function 


Fiscal Year 

Fiscal Year 

Department 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 

Legislative and administrative 10 8 9 9 9 9 9 9 

Community Development 20 19 20 20 21 20 20 20 

Public Works 137 138 128 130 113 114 111 96 

Water and Power - - - - 19 19 18 17 

Community and cultural services 176 177 237 239 251 255 292 298 

Administrative services 142 134 146 147 148 155 155 153 

Cerritos Center for the Performing Arts 173 173 222 221 203 201 190 200 

Total 658 649 762 766 764 773 795 793 

Full-Time employees 250 248 241 241 241 241 235 239 

Part-Time employees 408 401 521 525 523 532 560 554 

Total 658 649 762 766 764 773 795 793 

The City has elected to show only eight years of data for this schedule coinciding with the implementation 

of GASB 34 in fiscal year 2002-2003. 


136


Operating Indicators By Function 


Fiscal Year 

Function 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 

Public Works 

Maintenance: 

Graffiti removal (average incidence) 7,900 7,900 8,000 8,000 7,800 8,000 7,800 7,800 

Streetsweeping miles 7,100 7,100 7,100 7,100 7,100 7,100 7,100 7,100 

Trees maintained 28,000 28,000 28,000 28,000 28,000 29,450 29,450 29,500 

Trees trimmed 12,000 12,000 12,000 12,000 11,500 12,000 12,000 12,000 

Water and Power 

Water: 

Number of customer accounts 15,060 15,622 15,636 15,647 15,647 15,482 15,159 15,668 

Average daily consumption (millions of gallons) 8.68 9.02 8.15 8.18 8.80 10.13 9.75 8.57 

Water samples taken (annual) 2,272 2,272 2,800 2,272 2,104 2,128 2,038 2,039 

Community and Safety Services 

Police (1): 

Number of sworn officers 64 58 59 58 54 56 59 60 

Community Service officers (non-sworn) 25 5 17 17 16 16 14 19 

Calls dispatched 18,536 18,680 17,945 17,447 17,286 16,931 16,830 16,745 

Crime reports 6,765 6,672 6,321 5,650 5,991 5,946 5,843 5,511 

Moving citations 8,287 7,622 6,680 6,740 5,615 4,920 6,395 5,868 

Parking citations 1,259 719 722 936 825 1,152 1,116 1,089 

Culture and Recreation: 

Leisure classes attendance 56,786 53,023 53,520 58,346 60,947 47,135 48,360 53,360 

Indoor park reservation attendance 145,799 150,676 169,635 177,712 152,561 121,777 99,119 101,237 

Picnic shelter attendance 54,096 65,795 59,267 56,091 61,658 44,716 53,880 57,903 

Swim lessons attendance 118,504 133,477 131,644 181,996 298,131 288,504 292,674 284,994 

Recreational swim attendance 58,217 62,082 54,549 51,009 55,587 55,021 51,594 48,784 

Volunteer hours 8,876 16,528 19,558 20,954 16,097 16,027 11,974 12,550 

Administrative Services 

Library: 

Number of patrons 1,173,171 1,057,044 1,089,527 1,172,500 1,173,000 1,042,445 1,064,875 1,128,990 

(1) Services are contracted with the County of Los Angeles 

The City has elected to show only eight years of data for this schedule coinciding with the implementation of 

GASB 34 in fiscal year 2002-2003. 


137


Operating Indicators By Function 


Function 

Fiscal Year 

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 

Public Works 

Sewers: 

Miles of sanitary sewers 124 124 124 124 124 124 124 124 

Sewer lines (miles) 109.18 109.32 109.32 109.32 109.32 109.32 109.32 109.32 

Streets and Highways: 

Streets (miles) 136.33 136.33 136.33 136.33 136.33 136.33 136.33 136.33 

Sidewalks (miles) 242.16 242.16 242.16 242.16 242.16 242.16 242.16 242.16 

Curb & gutter (miles) 255.75 255.75 255.75 255.75 255.75 255.75 255.75 255.75 

Traffic signals (intersections) 87 87 89 89 90 90 90 90 

Community and Safety Services 

Number of Sheriff Stations 1 1 1 1 1 1 1 1 

Number of parks 24 24 24 24 24 24 24 24 

Number of swimming pool 2 2 2 2 2 2 2 2 

Administrative Services 

Number of libraries 1 1 1 1 1 1 1 1 

Number of volumes 224,822 238,243 242,167 238,860 241,942 241,607 247,405 258,349 

The City has elected to show only eight years of data for this schedule coinciding with the 

implementation of GASB 34 in fiscal year 2002-2003. 


138

Comprehensive Annual Financial Report - City of Cerritos

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