California Comprehensive Annual Financial Report - City of Temecula

City of Te m e c u 

California 

Comprehensive Annual 

Financial Report 

For Fiscal Year 

Ended June 30, 2009 

Street Painting Festival 

Old Town Temecula

CALIFORNIA 

Comprehensive Annual 

Financial Report 

FOR FISCAL YEAR ENDED 

JUNE 30, 2009 

MAYOR 

Maryann Edwards 

MAYOR PRO TEMPORE 

Jeff Comerchero 

COUNCIL MEMBERS 

Chuck Washington 

Ronald H. Roberts 

Michael S. Naggar 

CITY MANAGER 

Shawn D. Nelson 

Prepared by the Finance Department 

Genie Roberts, CPA 

Director of Finance

CITY OF TEMECULA 

COMPREHENSIVE ANNUAL FINANCIAL REPORT 

for Fiscal Year Ended June 30, 2009 

INTRODUCTORY SECTION 

TABLE OF CONTENTS 

Page 

Number 

Letter of Transmittal .................................................................................................... v 

Government Finance Officers Association Award ....................................................... xvii 

Organizational Chart ................................................................................................... xviii 

Staff Directory ............................................................................................................. xix 

FINANCIAL SECTION 

INDEPENDENT AUDITORS’ REPORT ...................................................................... 1 

MANAGEMENT’S DISCUSSION AND ANALYSIS ..................................................... 3 

BASIC FINANCIAL STATEMENTS 

Government-Wide Financial Statements: 

Statement of Net Assets ........................................................................ 16 

Statement of Activities ........................................................................... 17 

Fund Financial Statements: 

Balance Sheet – Governmental Funds .................................................. 18 

Reconciliation of the Balance Sheet of Governmental Funds 

to the Statement of Net Assets .............................................................. 21 

Statement of Revenues, Expenditures and Changes in 

Fund Balances – Governmental Funds ................................................. 22 

Reconciliation of the Statement of Revenues, Expenditures 

and Changes in Fund Balances of Governmental Funds to 

the Statement of Activities ..................................................................... 24 

Budgetary Comparison Statement - General Fund ................................ 25 

Budgetary Comparison Statement - Community Services District ........ 26 

Budgetary Comparison Statement - Redevelopment 

Agency – Special Revenue .................................................................... 27 

Statement of Net Assets – Proprietary Funds ........................................ 28 

Statement of Revenues, Expenses and Changes in Fund 

Net Assets – Proprietary Funds ............................................................. 29 

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Page 

Number 

Statement of Cash Flows – Proprietary Funds ...................................... 30 

Statement of Fiduciary Net Assets – Fiduciary Funds ........................... 31 

Notes to Financial Statements .......................................................................... 33 

SUPPLEMENTAL SCHEDULES 

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 

Combining Balance Sheet – Non-major Governmental Funds ......................... 68 

Combining Statement of Revenues, Expenditures and Changes in 

Fund Balances – Non-major Governmental Funds ........................................... 75 

Budgetary Comparison Schedules – Special Revenue Funds: 

Gas Tax ................................................................................................. 82 

State Transportation .............................................................................. 83 

Development Impact .............................................................................. 84 

CDBG .................................................................................................... 85 

AB 2766 ................................................................................................. 86 

AB 3229 COPS ...................................................................................... 87 

Measure “A” ........................................................................................... 88 

Summer Youth Employment Program ................................................... 89 

Budgetary Comparison Schedules – Capital Projects Funds: 

Capital Outlay ........................................................................................ 90 

Redevelopment Agency – Capital Projects ............................................ 91 

Budgetary Comparison Schedules – Debt Service Funds: 

Community Services District .................................................................. 92 

Debt Service Fund ................................................................................. 93 

Redevelopment Agency – Debt Service ................................................ 94 

Combining Statement of Net Assets – Internal Service Funds ......................... 96 

Combining Statement of Revenues, Expenses and Changes 

In Fund Net Assets – Internal Service Funds ................................................... 98 

Combining Statement of Cash Flows – Internal Service Funds ........................ 100 

Combining Balance Sheet – Agency Fund ....................................................... 104 

Combining Statement of Changes in Assets and Liabilities – Agency Fund ..... 105 

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STATISTICAL SECTION 





iii 

Page 

Number 

Description of Statistical Section Contents .................................................................. 107 

Locator Map ................................................................................................................ 109 

Financial Trends: 

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

Changes in Net Assets – Last Ten Fiscal years ................................................... 111 

Fund Balances of Governmental Funds – Last Ten Fiscal Years ......................... 112 

Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years ...... 113 

Government-Wide Revenues – Last Ten Fiscal Years ......................................... 114 

Government-Wide Expenses by Program – Last Ten Fiscal Years ...................... 115 

General Governmental Revenues by Source – Last Ten Fiscal Years ................. 116 

General Governmental Expenditures by Function – Last Ten Fiscal Years ......... 117 

Revenue Capacity: 

Property Tax Rates – Direct and Overlapping Governments – 

Last Ten Fiscal Years ........................................................................................... 119 

Principal Secured Property Owners – Last Ten Fiscal Years ............................... 120 

Property Tax Levies and Collections – Last Ten Fiscal Years .............................. 122 

Assessed and Estimated Actual Value of Taxable Property – 

Last Ten Fiscal Years ........................................................................................... 123 

Debt Capacity: 

Schedule of Direct and Overlapping Debt............................................................. 125 

Ratio of Outstanding Debt by Type – Last Ten Fiscal Years ................................ 126 

Ratio of General Bonded Debt – Last Ten Fiscal Years ....................................... 127 

Legal Debt Margin – Last Ten Fiscal Years .......................................................... 128 

Pledged Revenue Coverage – Last Ten Fiscal Years .......................................... 130 

Demographic and Economic Information: 

Demographic and Economic Statistics – Last Ten Calendar Years ...................... 131 

Largest Employers by Number of Employees ....................................................... 132 

Operating Information: 

Operating Indicators by Function .......................................................................... 133 

Full-Time City Employees – Last Ten Fiscal Years .............................................. 134 

Capital Asset Statistics by Function – Last Six Fiscal Years ................................ 135 

Comparative City Information – 

FY 2008-09 and FY 2007-08 Operating Budget ................................................... 136 

Demographics and Miscellaneous Statistics ......................................................... 137 

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City of Temecula 

43200 Business Park Drive 

P.O. Box 9033 

Telephone: 951-694-6444 

Facsimile: 951-694-6479 

December 10, 2009 

Honorable Mayor, Members of the City Council, and City Manager: 

The Comprehensive Annual Financial Report of the City of Temecula for the fiscal year 

ended June 30, 2009, prepared by the Finance Department, is submitted herewith. The 

responsibility for the accuracy of the data and the completeness and fairness of the 

presentation, including all disclosures, rests with the City. To the best of my knowledge 

and belief, the enclosed data is accurate in all material respects and is reported in a 

manner designed to present fairly the financial position and results of operations of the 

various major funds and fund types of the City. All disclosures necessary to enable the 

reader to gain an understanding of the City's financial activities have been included. 

This report includes all funds of the City. 

Management of the City is responsible for establishing and maintaining an internal 

control structure designed to ensure the assets of the government are protected from 

loss, theft, or misuse, and to ensure that adequate accounting data is compiled to allow 

the preparation of financial statements in conformity with generally accepted accounting 

principles. The internal control structure is designed to provide reasonable, but not 

absolute, assurance that these objectives are met. The concept of reasonable 

assurance recognizes that: (1) the cost of the control should not exceed the benefits 

likely to be derived; and, (2) the valuation of costs and benefits requires estimates and 

judgments by management. 

Budgets are adopted annually by the City Council through resolution. As provided by 

City ordinance, the Director of Finance is responsible for preparing the budget and for 

its implementation after adoption. All appropriations lapse at year-end, except those 

approved for carryover. The City Manager has the legal authority to transfer operating 

budget appropriations within a department. Changes to total departmental 

appropriations require the majority approval of the City Council. 

The City maintains budgetary controls to ensure compliance with legal provisions 

embodied in the annual budget adopted by the City Council. The level of budgetary 

control (that is, the level at which expenditures cannot legally exceed the appropriated 

amount) is established at the department level. 

It is the policy of the City of Temecula to have an audit performed annually by an 

independent certified public accountant. Lance, Soll & Lunghard, LLP, performed the 

independent audit of the June 30, 2009 financial statements. Their opinion is included 

with the basic financial statements. 

v


Letter of Transmittal - continued 

CAFR Fiscal Year Ended June 30, 2009 

--------------------------------------------- 

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. The MD&A complements this letter of transmittal and should 

be read in conjunction with it. 

THE CITY OF TEMECULA AND ITS SERVICES 

Following a vote by the residents on November 7, 1989, the City incorporated under the 

general laws of the State of California, on December 1, 1989. The Temecula 

Community Services District (TCSD), also established at that time, is responsible for 

providing parks and recreation services to the citizens of Temecula, as well as street 

lighting, slope maintenance, and refuse hauling in certain areas of the District. The 

activities of the TCSD are included with the activities of the City for financial reporting 

purposes because the City Council, serving as the Board of Directors, has full 

accountability for the TCSD’s fiscal matters. 

The County of Riverside transferred responsibility for the Temecula Redevelopment 

Agency (RDA) to the City on July 1, 1991. The County established the project area in 

1988. The activities of the RDA are included with the activities of the City for financial 

reporting purposes, because the City Council, serving as the Board of Directors, has full 

accountability for the RDA’s fiscal matters. 

The Industrial Development Authority of the City of Temecula (Authority) was activated 

on March 22, 1994. The purpose of the Authority is to provide alternative methods of 

financing certain facilities in order to prevent the loss of existing jobs, increase 

employment opportunities, and otherwise contribute to the economic development of 

the City. The activities of the Authority are included with the activities of the City for 

financial reporting purposes because the City Council, serving as the Board of 

Directors, has full accountability for the Authority’s fiscal matters. 

The Temecula Public Financing Authority (TPFA) was established pursuant to a Joint 

Exercise of Powers Agreement, dated April 24, 2001, by and between the City and the 

Redevelopment Agency. The City and the Redevelopment Agency formed the TPFA 

for the primary purpose of assisting in the financing and refinancing of a community 

facilities district and the issuance of bonds necessary to finance the public 

improvements. The TPFA may establish other community facilities districts in the future 

in connection with the financing of public improvements in the City and could also be 

used in connection with other City and Agency financings. 

ACCOMPLISHMENTS 

Under the direction of the City Council and City Manager, department staff made 

significant strides toward the goals set forth for fiscal year 2008-09. The City Council 

adopted the revised Noise Ordinance; instituted the Mayor’s Youth Employment 

Program; established City/County Schools Partnership; established the Business 

Recognition Program; and established the Temecula Higher Education Foundation. In 

addition, the City partnered with Cal State University San Marcos to open an off-campus 

center in Temecula in response to rapid enrollment growth from the region. 

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Construction was also completed the parking structure at the Promenade Mall, 

completed the Bike Trails Master Plan; completed the Liquid Natural Gas and 

Compressed Natural Gas Station; and began construction of the Parking Garage and 

Civic Center projects in Old Town Temecula. The City also received a rating upgrade 

from Standard & Poor’s on its outstanding 2008 Certificates of Participation, from an 

underlying A rating to an A+ rating. The City’s very strong fiscal position and balanced 

general fund operations were contributing factors to this rating upgrade. Other 

accomplishments include: 

Community Services: 

The Recreation Services Division successfully implemented key elements of the 

Temecula Youth Master Plan; planned, programmed and implemented four “rhythms” 

teen dances; successfully planned, programmed and implemented “Special Games” 

events for special needs youth; and enhanced the annual 4 th of July Extravaganza to 

include a Family Fun Play Area. Another outcome of the Youth Master Plan was the 

development and implementation of the Mayor’s Summer Youth Employment Program. 

This Division successfully obtained a $412,000 stimulus grant from the federal 

government and another $20,000 grant from Riverside County. During the summer 

2009, the Mayor’s Summer Youth Employment Program was responsible for the 

employment of over 250 young adults in summer jobs. 

The Community Services Division completed construction of the Murrieta Creek Trail 

project, completed the construction documents for Phase I of the Redhawk Park 

Improvements, and facilitated the construction of the YMCA building at the Margarita 

Community Park. The Temecula Public Library introduced the “Book Buzz” After 

School Reading Program; expanded outreach programs to children and staff at school 

campuses to provide library cards and book delivery on campus; and offered twentyfour 

children’s programs per month and thirty teen programs per year through 

partnership with the Friends of the Library. Staff also completed the Trails and 

Bikeways Guide; organized two community clean ups, and three household hazardous 

waste events. 

The Maintenance Services Division is responsible for providing landscape and facility 

maintenance services for parks, medians, slope areas, recreation facilities, and City 

administrative offices. The Division maintains the 308 developed acres of parks and 

236.5 acres of perimeter landscaping and medians. During the past year, it completed 

numerous park and facility rehabilitation and repair projects, including Temeku Hills 

Park Split Rail Fence Replacement, Loma Linda Park Lighting Installation, Patricia H. 

Birdsall Sports Park Buildings Anti-Graffiti Coating; Temecula Middle School Sports 

Field Re-Lamping, Temecula Duck Pond Veterans Memorial Phase 3 Paver Installation, 

Margarita Community Park Tennis Court Windscreen Replacement, and various other 

repair projects. The Division also provided thorough construction plan review of the 

Temecula YMCA at Margarita Community Park, Murrieta Creek Multi-Purpose Trail 

Project, Old Town Civic Center Town Square, and the S.A.F.E. building. It also 

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completed construction oversight for the Temecula Civic Center Town Square, 

Pechanga Parkway Road Widening and Landscape Median, and Jefferson Road 

Median at the Marriott. The Program also completed the Veteran’s Memorial Paver 

Installation Phase 3, Kent Hintergardt Memorial Park Play Structure Replacement, 

Imagination Workshop Kitchen Improvements, and Ronald Regan Sports Park 

Dasherboard System and Scoreboard Installation. 

The Cultural Arts Division provides an array of cultural arts programs and activities that 

are both educational and entertaining for the community. During the past year, it 

offered over 100 arts classes, excursions, youth Band Jam, and other after school 

activities. It also produced the annual Summer Concert and the Movies in the Park 

series. The Division also produced the 3rd annual Youth Film Festival, implemented six 

exhibitions at the Temecula Valley History Museum, facilitated the fountain and mosaic 

designs for the new Civic Center. It also received the California Parks and Recreation 

Society (CPRS) Award of Excellence in the category of “Single Focus Brochure” for the 

Theater and Temecula Presents. 

Public Works 

The Capital Improvement Program (CIP) of the Public Works Department is dedicated 

to providing high-quality engineering and project management services for the 

development, design, and construction of cost-effective circulation, infrastructure, park, 

and redevelopment projects that support and enhance the quality of life for residents, 

businesses, and visitors. Over the past year, this Program was responsible for the 

continued project management for the new parking structure and civic center projects in 

Old Town Temecula, as well as the related undergrounding of utilities and street and 

pavement improvements; completed the Murrieta Creek Multi-Purpose Trail; and is 

nearing completion of the Pechanga Parkway Phase II widening project. The CIP also 

completed design work for both the Rancho California Road and De Portola Road 

pavement rehabilitation projects, and awarded design and construction contracts for 

various Citywide traffic signal installations and design of the Winchester Road 

Beautification project. 

The Maintenance Division provides a well-maintained public right-of-way system that 

supports the safe and efficient movement of vehicles and pedestrian traffic. The 

Division planted new street trees throughout residential neighborhoods under the “Trees 

for Temecula” tree planning program, provided support for various special events, 

maintained the public right-of-way areas and related drainage systems, completed 

70,000 square feet of pavement repairs, and cleaned 2,500 catch basins. The Division 

also provided emergency response through the Public Works “After-Hours Call-Out 

Program.” 

The Traffic Engineering Division is responsible for ensuring that the integrity of the 

City’s General Plan Circulation Element is maintained by improving traffic circulation, 

addressing safety related issues, and maintaining traffic signal operations. The Division 

conducts necessary traffic studies and prepares reports for the Traffic Safety 

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Commission, which makes recommendations to the City Council regarding traffic issues 

in the City. In addition, it also performed review of traffic impact analysis reports for 

proposed developments. During the past year, this Division, using the Closed Circuit 

Television (CCTV) cameras, monitored traffic signal coordination conditions from City 

Hall, modified signal operations in the event of traffic incidents, and provided response 

assistance to Police Department, Maintenance, and CIP. The Division also installed 

and upgraded CCTV communication equipment at various locations to enhance, 

monitor, and improve traffic signal coordination capabilities on City arterials. The 

Division also implemented traffic signaling coordination programs along several 

corridors to improve traffic circulation, deployed additional hardwired and wireless traffic 

signal communication equipment to monitor traffic signal operations and improve 

progression along the City’s arterial corridors. The signal technicians developed and 

installed a working traffic signal lab in the City yard to be used for performing diagnostic 

testing of traffic signal controllers and equipment. 

The purpose of the National Pollutant Discharge Elimination System (NPDES) Program 

is to establish, implement, and maintain programs for the protection, preservation, and 

enhancement of water quality in Temecula’s local water courses. Over this past year, 

the NPDES Program worked with various resource agencies to address local and 

watershed-wide policies and practices to comply with State regulations, managed 

permit inspection requirements, and fulfilled training requirements for the inspection 

programs. It also managed the progress of the City’s GIS-based inventory of storm 

water conveyance systems, provided current NPDES information on the City’s website 

for customers, generated the annual report for the San Diego Regional Water Quality 

Control Board, and was an active member in various technical committees. 

Community Development 

The Land Development Division has reviewed, plan checked, and inspected numerous 

residential, commercial, and circulation improvement projects. They provided 

inspection services and engineering oversight of major projects such as the Harveston 

development, Professional Hospital Supply expansion, various Old Town projects, and 

the Promenade Mall and Wal-Mart Expansion, as well as for various commercial and 

industrial developments. Staff also enforced compliance with NPDES and FEMA review 

and oversight programs. 

The Planning Division began development of the Old Town Specific Plan Amendment to 

address the ten goals and recommendations resulting from the community vision 

process and also began preparation of the related environmental impact report. It also 

reviewed and approved multiple development plan modifications for tenant facades 

within the Promenade Mall expansion and completed the California Environmental 

Quality Act (CEQA) Environmental Review Procedures Handbook for private 

development of CIP projects. The Planning Commission approved a new Mercedes 

Benz dealership and a new 125,000 square foot hotel. The Division also completed and 

circulated an environmental impact report for the Santa Margarita Annexation area and 

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submitted a Sphere and Influence Expansion and Annexation Application to the Local 

Agency Formation Commission (LAFCO). Additionally, it prepared the City’s first 

Heritage Tree and Small Wind Energy Conservation Ordinances, and began 

development of the Temecula Sustainability Plan, the Green House Emissions 

Inventory and Climate Action Plan, Temecula Energy Efficiency Improvement Program, 

and the Sustainable Communities Strategy. 

The Building and Safety Division automated its inspection processing through the use of 

Accela Wireless technology, in addition to the automation for the processing of 

Certificates of Occupancy. This technology also connected the combined resources of 

the building inspectors and code enforcement officers in performing 18,912 building 

inspections. 

The Code Enforcement Division continued the enforcement of City Land Use Guidelines 

and City Municipal Codes, as well as the abatement of nuisances, which includes weed 

and abandoned vehicles. The Division implemented Accela Wireless systems for report 

monitoring and managing the investigation process for all Code Enforcement Officers 

and Park Rangers. It also improved enforcement of case documentation and record 

keeping practices for foreclosed properties in correlation with the Geographic 

Information System (GIS). 

Fire Services 

The Temecula Fire Department has continued to respond to all types of fires, medical 

emergencies, vehicle collisions, hazardous materials spills, and public assists within the 

City. The Department is dedicated to protect life, property, and the environment 

throughout the City. This is accomplished through a comprehensive emergency service 

response program utilizing a highly trained work force, progressive technology, and 

modern equipment. Fire prevention education also remains a priority, and Fire 

personnel attend numerous public safety fairs and community events to educate and 

promote fire safety. Fire protection planning staff performed plan checks and 

inspections on the many new development projects occurring within the City and have 

continued development of the Annual Fire Life Safety Program. 

Police Services 

The Temecula Police Department continued to respond effectively to the law 

enforcement and public safety demands of this growing City. Police maintained a 

strong presence in the community with a ratio of one officer for every 910 residents. 

The Department continues to be involved in many community special events and 

educational programs directed at crime prevention and community outreach. The 

Police Activities League (P.A.L.) continues to join together officers and Temecula youth 

(ages 7-17). The goal is to provide a variety of activities to keep the kids off the streets 

and to teach respect for law enforcement. The Department was awarded $98,000 in 

grants from the California Office of Traffic Safety and Department of Alcoholic Beverage 

Control to increase enforcement of DUI and underage drinking violations. 

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The Department's Crime Prevention Unit continued to provide crime prevention training 

and services to City residents and businesses. Much of this was accomplished by 

heading local Neighborhood Watch and Business Watch organizations and working 

closely with local businesses. These crime prevention officers work closely with other 

City staff in advance of planning for a variety of special events held in the City each 

year, and assists in the processing and issuance of a variety of City-required permits. 

Business and Industry 

The City is headquarters to a wide array of corporations and entrepreneurial operations. 

As Temecula’s economic base diversifies, Temecula actively nurtures the development 

of industry clusters. These industries represent some of the best opportunities for 

quality job creation. 

• Biomedical/Biotech 

• Health technology/manufacturing 

• Telecommunications 

• Electronics 

• Semiconductor Manufacturing 

• High-Tech manufacturing 

• Tourism 

• Retail 

• Green Technology/Solar 

• Aerospace 

Economic Development 

Temecula is one of the most prosperous communities in the Inland Empire region. 

Temecula residents enjoy one of the finest life styles in Southern California. A variety of 

factors are behind this including geography, which plays a role due to the City receiving 

growth impulses from both San Diego and Orange Counties. A mountain gap that 

allows ocean breezes to flow into the City provides a moderate climate by Inland Empire 

standards and has permitted the development of award winning wineries. Temecula’s 

leadership has approached economic growth from a qualitative standpoint, providing the 

City with a large percentage of the Inland Empire’s higher paying and high technology 

firms, as well as an expansive industrial base. The City’s average income levels are 

higher than the surrounding region. The educational performance of its young people is 

above State averages, and Temecula is one of Southern California’s safest cities. In 

2009, The City of Temecula was recognized by Relocate-America.com as one of the 

“Top 100 Places to Live”, based on its prospects for future growth, the business climate, 

and local government. 

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The City continues its efforts to grow and sustain the economy of Temecula through 

business attraction, retention, workforce development, higher education, tourism and 

film. The City partners with the Chamber of Commerce, Convention and Visitors 

Bureau, Riverside County Economic Development Agency, Riverside County Workforce 

Development Agency, Inland Empire Film Commission, and Economic Development 

Corporation of Southwest California. These alliances create synergy by leveraging 

assets and resources necessary to reinforce our markets. The City has also worked to 

develop and market Temecula as a tourist destination and continues to promote large 

scale events to attract visitors from other areas. Plans have begun for the construction 

of the new Temecula Regional Hospital project. This hospital will be the first hospital 

within the City to serve the medical needs of residents. Professional Hospital Supply 

(PHS), the City’s largest sales tax generating business, recently added over 600,000 

square feet of space, which is anticipated to result in increased sales tax to the City, as 

well as 20%-30% growth in jobs over the next five years. Abbott Laboratories recently 

added over 300,000 square feet with the completion of two new buildings, including 

office, lab, manufacturing space, and a parking structure. Springhill Suites, a new 142 

unit hotel, recently opened in the City and will provide visitors with another opportunity 

to enjoy their stay in the Temecula Valley and the Planning Commission has approved a 

new 168 room hotel, as well as a new Mercedes-Benz dealership. The recent 125,000 

square foot expansion of the Promenade Mall added upscale retail shops and 

restaurants, road improvements, and two parking structures. Businesses have been 

attracted to Temecula for a number of reasons, including its highly skilled labor force, 

school system, close proximity to San Diego, Los Angeles, and Orange Counties, 

quality and affordable housing, and excellent quality of life. The City of Temecula is 

also committed to providing excellent, expeditious, and clear development guidance to 

companies located or planning to locate to Temecula throughout the development 

process. 

The City is a major retail hub along the Interstate 15 corridor and continues to promote 

to help lure high-end retail and restaurants. The City remains engaged in business 

retention and expansion efforts and supports the Temecula Valley Chamber of 

Commerce’s “Shop Temecula First” campaign. The City continues to work with 

colleges and universities to develop multiple higher education opportunities. Temecula 

Valley Unified School District recently approved a ten-year lease with California State 

University San Marcos to utilize a portion of a vacated elementary school campus. In 

conjunction with the lease, the City approved funding in the amount of $3 million to 

provide the needed tenant improvements and development costs for the facility. 

California State University San Marcos anticipates construction to commence after 

January 2010 and the facility to be operational by the fall of 2010. 

Housing and Redevelopment 

The Temecula Redevelopment Agency activities during fiscal year 2008-09 included the 

acquisitions of eleven very-low income units conveyed to the Agency as part of the 

negotiations that took place with the developer in the previous fiscal year. The Agency 

then put out a Request for Proposal for the sale of those housing units to qualified 

affordable housing organizations. An affordable housing partner was chosen and the 

eleven units were subsequently sold to Jamboree Housing. 

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The Agency also entered into an Exclusive Negotiating Agreement with Clearwater 

Development for the sale of approximately twenty acres of land owned by the Housing 

Set-Aside Fund. The Agency entered into negotiations with a large affordable housing 

developer for the development of 110 affordable housing units with a mix of moderate, 

family affordable, and senior housing. The Agency extended the Exclusive Negotiating 

Agreement with Pelican Properties for the development of the 52,000 square foot 

commercial space adjacent to the Civic Center currently under construction. The 

Agency purchased land in the Pujol Neighborhood for the eventual construction of two 

additional Habitat for Humanity homes that will join five existing Habitat for Humanity 

homes. 

The Agency continued with its ongoing programs funding $88,536 in forgivable loans 

and grants for the Residential Improvement program, $63,649 for the Façade 

Improvement Program, and $200,494 for the First Time Homebuyer’s Program. 

Finally, the Agency assisted expansion of the Promenade Mall through bonds sold in 

the prior fiscal year, which resulted in the construction of two new parking structures, as 

well as the construction of a new “City Walk”, which is an outdoor shopping area with 

tenants such as Apple, Pottery Barn, Yard House, and P.F. Chang’s. 

ECONOMIC CONDITION AND OUTLOOK 

The City of Temecula is a dynamic community comprised of approximately 102,604 

citizens of various cultural backgrounds. The City has experienced a 379 percent 

growth in population since 1990. The City’s 2009 median household income is 

estimated at $82,380 and the 2009 average household income is estimated at $95,692, 

placing the City’s average household income above the average of $69,376 for the 

United States. 

Sales tax continues to be the City's largest revenue source. Sales and Use Tax 

revenue is projected to slightly increase from an actual of $23,327,370 in fiscal year 

2008-09 to $23,956,600 in fiscal year 2009-10. This increase is primarily a result of 

anticipated sales tax growth due to the completed expansions of the Promenade Mall 

and Professional Hospital Supply. With the grand opening of the Promenade Mall in 

October 1999, and the commercial development in the area surrounding the mall, the 

City’s sales tax base was strengthened and over 1,500 jobs were created. Temecula’s 

taxable retail sales record is the envy of most Inland Empire cities. In 1999, Temecula 

broke the $1 billion mark. Temecula continues to exceed the county and surrounding 

areas with respect to sales per capita. 

Temecula is an exceptional community where residents experience a strong sense of 

community and family values. This vineyard-covered region offers picturesque 

landscapes and a serene lifestyle. Golf courses, abundant recreation and cultural 

opportunities, award-winning schools, safe and attractive neighborhoods, and a sky 

filled with colorful hot air balloons provide the ideal setting for family living. 

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Temecula’s tremendous assets produce an energetic atmosphere that stimulates 

business opportunity and growth. Strategically located along the Interstate 15 and 

Interstate 215 corridor, equidistant from San Diego County, Los Angeles County and 

Orange County business centers, Temecula is an attraction to progressive businesses. 

The City’s pro-business attitude, lower operating costs, and well-educated workforce 

continues to make it one of Southern California’s premier communities. 

Long-Term Financial Planning 

The City Council annually adopts the five-year Capital Improvement Program (CIP) 

budget, which serves as a planning tool to coordinate the financing and scheduling of 

major projects undertaken by the City. It is revised each year to address changing 

needs, priorities, and financial conditions. The budget is developed by key 

management based on community comments and feedback, availability of funding, and 

priority ranking guidelines set by City Council. Through workshops, needs are identified 

by category, i.e., Circulation Projects, Infrastructure / Other Projects, Parks / Recreation 

Projects, Redevelopment / Housing Projects. 

The fiscal year 2010-14 CIP budget identifies a total of seventy projects, consisting of 

twenty-seven Circulation Projects totaling $272,672,863; eighteen Infrastructure/Other 

Projects totaling $70,971,743; sixteen Parks and Recreation Projects totaling 

$9,080,307; and, nine Redevelopment/Housing Projects totaling $40,949,175. The total 

cost to complete all of the proposed projects is $393,629,088 of which $142,561,323 is 

programmed for fiscal year 2009-10. There is also over $58 million of projects with 

unspecified funding sources. These projects have been identified as necessary 

infrastructure for the City, and will require that funding sources be identified before the 

projects can commence. Administrative costs associated with managing these projects 

have been estimated (generally five to ten percent of estimated construction costs), and 

included in each project budget. 

Some of the major projects planned for construction in the next few years include the 

completion of a new Civic Center in Old Town Temecula, with a new parking structure, 

the new French Valley Interchange, an Ultimate Interchange at Interstate 15 and State 

Route 79 South (Temecula Parkway), Main Street Bridge Replacement, Pavement 

Rehabilitation projects on Rancho California and De Portola Roads, and various park 

improvements. 

It is impossible to review the economic forces affecting Temecula and the Inland Empire 

without predicting a rosy future for the City. The region’s geographic location, 

competitive cost structure and sophisticated logistics have put it in a position to have 

one of the nation’s fastest growing economy. Temecula remains one of the fastest 

growing and most prosperous communities in the Inland Empire. 

xiv




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Cash Management Policies and Practices 

The City Council annually adopts an investment policy, which is intended to minimize 

credit and market risks, while maintaining a competitive yield on its portfolio. During the 

2008-09 fiscal year, idle funds were deposited in accordance with this policy in demand 

deposit accounts and invested primarily in a pooled investment account administered by 

the State of California. 

At all times, the investment policy was adhered to, and safety and liquidity objectives 

were placed above rates of return considerations in making deposits and investments. 

All deposits during the year were either insured by the Federal Deposit Insurance 

Corporation, or collateralized. The majority of the City’s investments were in the Local 

Agency Investment Fund (state pool). 

The state pool cannot be categorized in terms of credit risk in accordance with the 

guidelines of the Governmental Accounting Standards Board. Nevertheless, given the 

size and liquidity of the pool, the investment policies governing the pool, and the 

investment expertise of the pool's management, it is believed that these investments 

clearly conformed to the City's investment policy. 

Risk Management 

The City's insurance policies cover property, general liability, and worker's 

compensation exposures through basic deductibles, $150,000 self-insured retention, 

and flat fees, respectively. In the case of general liability coverage, the City's maximum 

coverage per occurrence is $10 million, while the aggregate coverage is $10 million, 

maximum. 

The City's Risk Management program focuses on proactive identification of exposures 

to eliminate any potential impacts to public safety and welfare. This is accomplished 

through effectively monitoring City programs, particularly those in the Community 

Services and Public Works Departments, and by providing clear guidance to correct 

those situations where exposures have been identified. Additionally, the City works 

closely with all contracted insurance carriers to ensure that the transfer of liability occurs 

timely, when applicable. 

Pension and Other Post-Employment Benefits 

The City of Temecula has a defined benefit pension plan that 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 multipleemployer 

plan administered by CalPERS, which acts as a common investment and 

administrative agent for participating public entities within the State of California. An 

actuarial basis is used to determine the amount necessary to fund the benefits for its 

xv




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members. The City pays 100 percent for the employer and employee share of funding 

this plan. In 2008, the City contracted with CalPERS Employer Trust Fund to pre-fund 

the retiree health liability. 

The City contracts with private deferred compensation administration firms to act as 

agent of the City to fulfill all the City’s administrative responsibilities. The amount 

deferred is not available to employees until termination, retirement, death or 

unavoidable emergency. The City offers these plans to the employees, but does not 

fund these plans. 

Project employees (part-time, temporary) are provided pension benefits through a 

defined contribution plan. Federal legislation requires contribution of at least 7.5 

percent to a retirement plan. The City and the employee each contribute 3.75% of the 

employee’s salary into the plan. The City’s contribution is fully vested immediately. 

Medical Benefits are provided at time of retirement for all represented employees of the 

City who meet the eligibility requirements as defined as a PERS service or industrial 

disability retirement. 

ACKNOWLEDGMENTS 

Preparation of the City's Comprehensive Annual Financial Report is an undertaking of 

the Finance Department. Special credit is due to Rudy Graciano, Revenue Manager, 

Pascale Brown, Accounting Manager, Jennifer Crummel, Senior Accountant, and Judy 

McNabb, Administrative Assistant, as well as the entire Finance Department staff. Their 

year-long hard work and dedication have made this report possible. 

I would like to express my appreciation to the City Manager, the City Council, and the 

Finance Committee for their interest and support in planning and conducting the 

financial operations of the City in a responsible and progressive manner. 

Sincerely, 



Director of Finance 

xvi


GOVERNMENT FINANCE OFFICERS 

ASSOCIATION AWARD 

xvii


CITY ORGANIZATIONAL CHART 

xviii


STAFF DIRECTORY 

EXECUTIVE MANAGEMENT: 

City Manager ............................................................... Shawn D. Nelson 

Assistant City Manager ................................................ Aaron Adams 

Assistant City Manager ................................................ Bob Johnson 

Deputy City Manager ................................................... Grant Yates 

City Attorney ................................................................ Peter M. Thorson 

City Clerk/Director of Support Services ....................... Susan W. Jones 

Director of Finance ...................................................... Genie Roberts 

Director of Public Works .............................................. Greg Butler 

City Engineer ............................................................... Dan York 

Director of Community Services .................................. Herman D. Parker 

Director of Planning / Housing/Redevelopment ........... Patrick Richardson 

Director of Information Systems .................................. Tim Thorson 

Chief of Police ............................................................. Andre O’Harra 

Fire Chief ..................................................................... Glenn Patterson 

FINANCE DEPARTMENT: 

Director of Finance ...................................................... Genie Roberts 

Revenue Manager ....................................................... Rudy Graciano 

Accounting Manager .................................................... Pascale Brown 

Fiscal Services Manager ............................................. Roberto Cardenas 

Senior Management Analyst........................................ Heidi Schrader 

Senior Debt Analyst ..................................................... David Bilby 

Senior Accountant ....................................................... Jennifer Crummel 

Administrative Assistant .............................................. Judy McNabb 

Purchasing Coordinator II ............................................ Mary Vollmuth 

Accounting Specialist .................................................. Monica Jorgenson 

Accounting Specialist .................................................. Jada Yonker 

Accounting Specialist .................................................. Leah Thomas 

Business License Specialist/Cashier ........................... Debbie Brown 

Business License Specialist/Cashier ........................... Pam Espinoza 

Accounting Assistant ................................................... Jill Dickey 

xix

Brandon W. Burrows, C.P.A 

Donald L. Parker, C.P.A 

Michael K. Chu, C.P.A 

David E. Hale, C.P.A, C.F.P. 

A Professional Corporation 

Donald G. Slater, C.P.A 

Richard K. Kikuchi, C.P.A 

Susan F. Matz, C.P.A. 

INDEPENDENT AUDITORS’ REPORT 

To the Honorable Mayor and Members of the City Council 

City of Temecula, California 

We have audited the accompanying financial statements of the governmental activities, each major fund, 

and the aggregate remaining fund information of the City of Temecula, California, as of and for the year 

ended June 30, 2009, which collectively comprise the City's basic financial statements as listed in the 

table of contents. These financial statements are the responsibility of the City of Temecula's 

management. Our responsibility is to express opinions on these financial statements based on our audit. 

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

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

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

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

material misstatement. 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 financial 

statement presentation. We believe that our audit provides a reasonable basis for our opinions. 

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

respective financial position of the governmental activities, each major fund, and the aggregate remaining 

fund information of the City of Temecula, California, as of June 30, 2009, and the respective changes in 

financial position and cash flows, where applicable, and the respective budgetary comparison for the 

General Fund, Community Services District, and Redevelopment Agency Special Revenue Fund 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 

October 12, 2009, on our consideration of the City of Temecula's internal control over financial reporting 

and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant 

agreements and other matters. The purpose of that report is to describe the scope of our testing of 

internal control over financial reporting and compliance and the results of that testing, and not to provide 

an opinion on 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 considered 

in assessing the results of our audit. 

The management's discussion and analysis and the other required supplementary information identified 

in the accompanying table of contents are not a required part of the basic financial statements but are 

supplementary information required by the accounting principles generally accepted in the United States 

of America. 

1 

Lance, Soll & Lunghard, LLP 203 North Brea Boulevard Suite 203 Brea, CA 92821 TEL: 714.672.0022 Fax: 714.672.0331 www.lslcpas.com 

41185 Golden Gate Circle Suite 103 Murrieta, CA 92562 TEL: 951.304.2728 Fax: 951.304.3940

To the Honorable Mayor and Members of the City Council 

City of Temecula, California 

We have applied certain limited procedures to the management's discussion and analysis, which 

consisted principally of inquiries of management regarding the methods of measurement and 

presentation of this required supplementary information. However, we did not audit the management's 

discussion and analysis and express no opinion on it. 

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

comprise the City of Temecula's basic financial statements. The accompanying introductory section, the 

combining and individual fund statements, budgetary schedules and statistical tables are presented for 

purposes of additional analysis and are not a required part of the basic financial statements. The 

accompanying combining and individual nonmajor fund financial statements and budgetary schedules 

have been subjected to the auditing procedures applied in the audit of the basic financial statements and 

in our opinion are fairly stated in all material respects in relation to the basic financial statements taken as 

a whole. The accompanying introductory section and statistical tables have not been subjected to the 

auditing procedures applied in the audit of the basic financial statements and, accordingly, we express 

not opinion on them. 

October 12, 2009 

2


Management’s Discussion and Analysis 

Fiscal Year Ended June 30, 2009 

As management of the City of Temecula, we offer readers of the City of Temecula’s 

financial statements this narrative overview and analysis of the financial activities of the 

City of Temecula for the fiscal year ended June 30, 2009. We encourage readers to 

consider the information presented here in conjunction with additional information that 

we have furnished in our letter of transmittal, which can be found in the introductory 

section of this report, and with the City’s financial statements, which follow this 

discussion. 

Financial Highlights 

• The assets of the City of Temecula exceeded its liabilities, at June 30, 2009, by 

$728.8 million (net assets.). 

• The government’s total net assets increased by $11.4 million. This increase is 

primarily attributable to capital grants and contribution revenues received to fund 

capital and infrastructure improvements in the City of Temecula and donation of 

assets to the City’s infrastructure from improvements constructed by property 

owners. 

• As of June 30, 2009, the City of Temecula’s governmental funds reported 

combined ending fund balances of $190.4 million, a decrease of $24.6 million. 

Approximately 65% of this total amount, $123.7 million, is available for spending 

at the government’s discretion (unreserved fund balance). 

• At the end of the current fiscal year, unreserved fund balance for the general 

fund was $38.3 million, or 71.5% of total general fund expenditures excluding 

transfers. 

• The City of Temecula’s total long-term liabilities decreased by $1.2 million during 

the current fiscal year. This decrease was primarily the result of principal debt 

service payments for Tax Allocation Bonds and Certificates of Participation. 

Overview of the Financial Statements 

The discussion and analysis are intended to serve as an introduction to the City of 

Temecula’s basic financial statements. The City of Temecula’s basic financial 

statements comprise three components: 1) government-wide financial statements; 2) 

fund financial statements; and, 3) notes to the financial statements. This report also 

contains other supplementary information in addition to the basic financial statements 

themselves. 

Government-Wide Financial Statements 

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

overview of the City of Temecula’s finances in a manner similar to a private-sector 

business. 

See Independent Auditors’ Report 

3


Management’s Discussion and Analysis - continued 


--------------------------------------------- 

The statement of net assets presents information on all the City of Temecula’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 of Temecula is improving or deteriorating. 

The statement of activities presents information showing how the government’s net 

assets changed during the most recent fiscal year. All changes in net assets are 

reported as soon as the underlying events giving rise to the change occurs, regardless 

of the timing of related cash flows. Thus, revenues and expenses are reported in this 

statement for some items that will only result in cash flows in the future fiscal periods 

(e.g., uncollected taxes and earned but unused vacation leave). 

The government-wide financial statement presents information about the functions of 

the City of Temecula that is principally supported by taxes and intergovernmental 

revenues (governmental activities). The governmental activities of the City of Temecula 

include general government, public safety, public works, community services, and 

community development. 

The government-wide financial statements can be found on pages 16-17 of this report. 

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 Temecula, 

like other state and local governments, uses fund accounting to ensure and 

demonstrate compliance with finance-related legal requirements. All of the funds of the 

City of Temecula can be divided into three categories: governmental funds; proprietary 

funds; and, fiduciary 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 on spendable resources available at the end of the 

fiscal year. Such information may be useful in evaluating a government’s near-term 

financing requirements. 

Because the focus of governmental funds are narrower than that of the governmentwide 

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 government’s near-term financing decisions. Both the 

governmental fund balance sheet and 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




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The City of Temecula maintains various individual government 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, Community Services District Special Revenue Fund, Redevelopment 

Agency Special Revenue Fund, Capital Outlay Capital Projects Fund, Roripaugh 

CFD#03-02 Capital Projects Fund, and the Redevelopment Agency Debt Service Fund, 

all of which are considered to be major funds. Data from other governmental funds are 

combined into a single, aggregate presentation. Individual fund data for each of these 

other governmental funds is provided in the form of combining statements elsewhere in 

this report. 

The City of Temecula adopts an annual appropriated budget for its general fund. A 

budgetary comparison statement has been provided for the general fund to demonstrate 

compliance with this budget. The basic governmental fund financial statements can be 

found on pages 18-19 and 22-23 of this report. 

Proprietary Funds. The City of Temecula maintains various internal service funds. 

Internal service funds are an accounting device used to accumulate and allocate costs 

internally among the City of Temecula’s various functions. The City of Temecula uses 

internal service funds to account for its self-insurance activities, vehicles, information 

systems, support services and facilities. Because these services benefit governmental 

functions, they have been included within governmental activities in the governmentwide 

financial statements. 

The internal service funds are combined into a single, aggregated presentation in the 

proprietary fund financial statements. Individual fund data for the internal service funds 

is provided in the form of combining statements elsewhere in this report. The basic 

proprietary fund financial statements can be found on pages 28-30 of this report. 

Fiduciary Funds. Fiduciary Funds are used to account for resources held for the 

benefit of parties outside the government. Fiduciary funds are not reflected in the 

government-wide financial statements because the resources of those funds are not 

available to support the City of Temecula’s own programs. The basic fiduciary fund 

financial statements can be found on page 31 of this report. 

Notes to the Financial Statements 

The notes provide additional information that is essential to a full understanding of the 

data provided in the government-wide and fund financial statements. The notes to the 

financial statements can be found on pages 33-63 of this report. 

Other Information 

The combining statements referred to earlier in connection with other governmental 

funds, internal service funds and schedules of revenues, expenditures, and changes in 

fund balance-budget and actual can be found beginning at page 65 of this report. 


5




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As noted earlier, the net assets for the City of Temecula increased by approximately 

$11.4 million at June 30, 2009. The government-wide financial statements provide 

long-term and short-term information about the City’s overall financial condition. This 

analysis addresses the City’s financial statements as a whole. 

Government-Wide Financial Analysis 


Summary of Net Assets 

As of June 30, 2009 and June 30, 2008 

Governmental Governmental 

Activities Activities 

2009 2008 (As Restated) 

Current and other assets $ 243,717,669 $ 245,581,172 

Capital assets 612,762,893 577,640,733 

Total assets 856,480,562 823,221,905 

Long-term liabilities outstanding 93,792,173 94,971,374 

Other liabilities 33,896,973 30,594,545 

Total liabilities 127,689,146 125,565,919 

Net assets: 

Invested in capital assets, net of related debt 591,669,819 542,917,967 

Restricted 145,381,273 170,557,711 

Unrestricted (8,259,676) 3,950,360 

Total Net Assets $ 728,791,416 $ 717,426,038 

As noted earlier, the net assets for the City of Temecula increased by approximately 

$11.4 million at June 30, 2009. The government-wide financial statements provide 

long-term and short-term information about the City’s overall financial condition. This 

analysis addresses the City’s financial statements as a whole. 

The largest portion of the City’s net assets (81.1%) reflects the investment in capital 

assets (e.g., and, buildings, machinery and equipment), less any related debt used to 

acquire those assets that is still outstanding. The City of Temecula uses these capital 

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

future spending. Although the City of Temecula’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. 

An additional portion of the City of Temecula’s net assets (20%) represents resources 

that are subject to external restrictions on how they may be used. 


6




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The deficit balance of approximately ($8.3) million in Unrestricted Net Assets reflects 

the fact that governmental activities raise resources based on when liabilities are 

expected to be paid, rather than when they are incurred. Most governments do not 

have sufficient current resources on hand to cover current and long term liabilities. The 

deficit in and of itself should not be considered an economic or financial difficulty; 

however, it does measure how far the City has committed the government’s future tax 

revenues for purposes other than capital acquisition. 

Governmental Activities 

Governmental activities increased the City of Temecula’s net assets by $11.4 million, 

thereby accounting for 100% percent of the total growth in the net assets of the City of 

Temecula. Key elements of this increase are as follows: 


Summary of Changes in Net Assets 

For the Years ended June 30, 2009 and June 30, 2008 

Revenues: 

Program Revenues: 

Charges for services 30,603,988 

Operating grants and contributions 

Capital grants and contributions 

Governmental Activities 

2009 2008 (As Restated) 

$ $ 31,746,068 

8,703,467 5,398,302 

13,703,226 29,989,183 

General revenues: 

Taxes: 

Property taxes 33,310,255 32,117,022 

Transient occupancy taxes 2,088,823 2,417,726 

Sales taxes 23,087,328 27,185,873 

Franchise taxes 3,322,981 3,415,217 

Other taxes 762,367 846,409 

Intergovernmental revenue - Motor 

vehicles in lieu 

797,994 928,757 

Use of Money and Property 3,055,857 3,547,717 

Other 284,584 345,941 

Total revenues $ 119,720,870 $ 137,938,215 

Expenses: 

General government $ 16,214,425 $ 18,335,093 

Public safety 23,240,092 23,378,627 

Community development 21,846,282 28,440,339 

Community services 

22,427,530 22,935,715 

Public works 20,006,739 20,335,862 

Interest on long term debt 4,620,424 3,604,580 

Total expenses $ 108,355,492 $ 117,030,216 

Increase in net assets 

$ 11,365,378 $ 20,907,999 

Net assets, beginning of year, as Restated 717,426,038 696,518,039 

Net assets, end of year $ 728,791,416 $ 717,426,038 


7




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• Operating grants and contributions increased approximately 61% primarily due to 

the reimbursement of prior year library contract expenditures incurred in fiscal 

years 2006-07 and 2007-08 waived by the County of Riverside. 

• Capital grants and contributions decreased approximately 54% primarily due to 

developer contributed infrastructure accepted by the City in the prior year. This 

infrastructure consisted mostly of park improvements, pavement, curb and 

gutters, sidewalks, traffic signal and signs, medians, and storm drain 

improvements. 

• Transient Occupancy Taxes decreased approximately 14% primarily due to 

decline in room occupancy and room rates. 

• Sales Taxes decreased approximately 15% primarily due to a continued decline 

in the automobile, construction, general consumer good, and transportation 

components of the local economy. 

• Other taxes decreased approximately 10% primarily due to a decrease in 

property transfer taxes received due to a reduction in real property prices 

compared to the prior year. 

• Intergovernmental - Motor Vehicle In Lieu decreased approximately 14% 

primarily due to a decline in motor vehicle sales. 

• Use of Money and Property decreased approximately 14% primarily due to a 

decline in interest rates attributed to a weakened economy impacting interest 

rates for Local Agency Investment Funds, U.S. Government Securities, and other 

various investments held by the bond trustee, coupled with a decrease in the 

City’s investment pool as several capital projects due to the advanced 

construction of major capital projects such as the new civic center, civic center 

plaza, Old Town parking garage, and other various Old Town infrastructure 

projects. 

• General government decreased approximately 12% primarily due to a payment 

made to California Public Employees Retirement System in the prior fiscal year 

to prefund certain post employment benefits for qualifying retirees upon 

establishment of an irrevocable trust. 

• Community Development decreased approximately 23% primarily due to less 

demand for services as a result of a decline in development permits issued 

attributed to a slowing economy. 

• Interest on Long Term Debt increased approximately 28% primarily due to first 

debt service payment under the 2008 Certificates of Participation. 

Financial Analysis of the Government’s Funds 

As noted earlier, the City of Temecula uses fund accounting to ensure and demonstrate 

compliance with finance-related legal requirements. 


8




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Governmental Funds. The focus of the City of Temecula’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 of Temecula’s financing 

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

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

Proprietary Funds. The City of Temecula’s proprietary funds are the internal service 

funds, which are used to account for activities and services performed for other 

departments within the City on a cost reimbursement basis. 

The major factors in fund balance changes are as follows: 

• The General Fund recognized an increase of approximately $4.5 million 

increase due to revenues greater than expenditures of approximately $2.4 million 

and approximately $2.1 million of net transfers in from various city funds. 

• The Community Services District Special Revenue Fund recognized an 

increase of approximately $1.5 million due to revenues greater than expenditures 

of approximately $2 million, less approximately $497,000 transfer out of to 

finance debt service payments. 

• The Redevelopment Agency Special Revenue Fund recognized an increase 

of approximately $3.2 million due to revenues greater than expenditures. 

• The Capital Outlay Capital Projects Fund recognized a decrease of 

approximately $9.2 million due to the City completing public improvement 

projects. 

• The Roripaugh CFD #03-2 Capital Projects Fund recognized an increase of 

approximately $1.3 million primarily due to interest earnings on funds held in trust 

originally deposited as contributions from developers to fund infrastructure 

improvements in this CFD area. See note 15 of the financial statements on 

pages 60-62 for further information regarding potential contingencies and legal 

matters regarding these contributions. 

• The Redevelopment Agency Debt Service Fund recognized a decrease of 

approximately $10.4 million primarily due to a reimbursement payment made to a 

developer for its construction of a parking garage as part of the expansion of the 

Promenade Mall. This payment was financed from the issuance of the 2007 Tax 

Allocation Bonds issued in the prior fiscal year. 

• Other Governmental Funds, which are nonmajor funds, recognized a combined 

decrease of approximately $15.6 million primarily due to revenues greater than 

expenditures of approximately $7.9 million, less approximately $23.5 million of 

net transfers out to finance qualifying General Fund programs and various capital 

project activities. These funds are further detailed beginning on page 65 of this 

report. 


9




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General Fund Budget Highlights 

The difference between the original budget and the final amended budget reflects a 

$12,649,331 decrease in appropriations, including operating transfers out, and can be 

briefly summarized as follows: 

• $9,700,000 net decrease in Transfers Out is primarily due to unanticipated 

project cost savings related to the construction of the new Civic Center Project. 

This amount was used to create a secondary reserve account within the General 

Fund. 

• $760,758 net decrease is Non-departmental is primarily due to an approximately 

$900,000 reduced Revenues Excess Sharing in Temecula (REST) transfer to 

TCSD due to accumulated fund balance reserves in TCSD funds, offset with 

approximately $165,000 increase in property tax administration costs due to the 

pass through of system development costs incurred by the County. 

• $700,574 net decrease in Police is primarily due to the unfunding of vacant 

Special Enforcement Team, Community Service Officer, Motor Officer, and K9 

Officer positions. 

• $663,731net decreases in Fire is primarily due to the delay in opening the 

Roripaugh Ranch Fire Station and the related staffing costs of that station. 

• $466,248 net decrease in Community Development is primarily due to a 

reduction in project staff positions and consultant services caused by a decline in 

related development activities. 

Actual revenues, excluding transfers in, received for the General Fund were $537,502 

higher than budget. Taxes revenues were under budget by $522,729 primarily due to a 

decline in local retail sales. Intergovernmental revenues were higher than budget by 

$186,139 primarily due to unexpected decrease in State Department of Motor Vehicle 

Administrative Fees, resulting in increased motor vehicle license allocations to the City, 

coupled with additional reimbursements from the State of California for Strike Team 

responders. Charges for Services revenues were under budget by $293,734 primarily 

due to a decrease in community development activities. Use of Money and Property 

revenues were higher than budget by $546,336 primarily due to gains in changes in the 

fair value of investments caused by declining interest rates. Miscellaneous revenues 

were higher than budget by $193,931 primarily due the City taking title of Temecula 

Lane units and subsequently sell them to a developer. 

Non-departmental had expenditure savings of $1,050,134 primarily due to program 

savings in TCSD admin charges, resulting from less General Fund contributions to the 

Library program. Police had expenditure savings of $1,033,693 primarily due to not all 

dedicated positions being filled throughout the year and the State paying a greater 

share of County jail costs, resulting is less booking fees due from City. Fire department 

had expenditure savings of $995,240 primarily due State furloughs and staffing 

reductions for Fire administrative support services, coupled with unfilled vacancies. 


10




--------------------------------------------- 

Community Development had savings of $740,912 primarily due to reduction in the 

demand for services, resulting in savings in project staff and outside consultant 

services. Public Works had expenditure savings of $1,001,822 primarily due to savings 

in the routine street maintenance program. Transfers out had savings of $13,999,881 

primarily due to the timing of transfers needed to fund construction of the civic center 

project. 

Capital Asset and Debt Administration 

Capital Assets 

The City of Temecula’s investment in capital assets for its governmental activities as of 

June 30, 2009, amounts to $612.8 million (net of accumulated depreciation). This 

investment in capital assets includes land, buildings and system, improvements, 

machinery and equipment, park facilities, roads, highways, and bridges. The total 

increase in the City of Temecula’s investment in capital assets for the current fiscal year 

was 6 percent. 

Major capital asset events during the current fiscal year include the following: 

• The City began construction on a comprehensive project to build a new Civic 

Center in Old Town. In addition to building a new Civic Center, the City also 

completed the related construction to underground overhead utility lines and 

completed certain street improvements and pavement rehabilitation projects. 

• Construction is also underway to complete a parking structure, office, and retail 

project related to the Old Town Civic Center project. 

• Construction is nearly completed for the Pechanga Parkway Phase II project, 

which includes widening, payment rehabilitation, curb and gutter, storm drain 

systems, medians, landscape and irrigation, and traffic signals. 

• Pavement rehabilitation projects for both Rancho California and Del Portola 

roads. Design has been completed and construction is now in progress. 

• Completed construction of Murrieta Creek Multi-Purpose Trail from Rancho 

California Road to Winchester Road, between Diaz Road and Murrieta Creek, 

including multi-use trails, benches, hardscape, landscaping, and irrigation. 

• Construction has been completed on the Temecula Community Center 

Expansion project, which added over 3,600 of office and meeting space. 

• The City also continued to make significant progress on the French Valley 

Parkway and Interstate 15 Interchange Project, Butterfield Stage Road, 

Winchester Road Beautification, Overland Drive Bridge at Murrieta Creek, 

Pedestrian/Bike Bridge Over Santa Gertrudis Creek, Temecula Park and Ride, 

and the State Route 79 South/I-15 Interchange. 


11




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Summary of Changes in Capital Assets 

For the Year Ending June 30, 2009 

Balance at June 

30, 2008 Increase Decrease 

Balance at 

June 30, 2009 

Description 

Governmental Activities: 

Capital assets, not being depreciated: 

Land $ 64,473,842 $ 554,850 $ (44,850) $ 64,983,842 

Right of way 68,523,656 214,973 - 68,738,629 

Construction in Progress 33,611,658 26,151,885 (1,446,450) 58,317,093 

Total capital assets, not being depreciated 166,609,156 26,921,708 (1,491,300) 192,039,564 

Capital assets, being depreciated: 

Building 66,870,560 - - 66,870,560 

Improvements other than buildings 40,319,034 2,969,530 (500,000) 42,788,564 

Vehicles, machinery and equipment 9,705,579 1,139,999 - 10,845,578 

Furniture and fixtures 2,642,170 61,122 - 2,703,292 

Infrastructure 432,466,361 22,535,793 (343,899) 454,658,255 

Total capital aseets, being depreciated 552,003,704 26,706,444 (843,899) 577,866,249 

Less accumulated depreciation for: 

Buildings (7,902,667) (1,482,289) - (9,384,956) 

Improvements other than buildings (5,126,073) (1,588,622) - (6,714,695) 

Vehicles, machinery and equipment (6,651,242) (1,082,951) - (7,734,193) 

Furniture and fixtures (1,540,138) (495,322) - (2,035,460) 

Infrastructure (119,752,007) (11,660,609) 139,000 (131,273,616) 

Total accumulated depreciation (140,972,127) (16,309,793) 139,000 (157,142,920) 

Total capital aseets, being depreciated 411,031,577 10,396,651 (704,899) 420,723,329 

Total Capital assets, net $ 577,640,733 $ 37,318,359 $ (2,196,199) $ 612,762,893 

Additional detail on capital assets is available in Note 4 to the financial statements on 

pages 44-45. 

Long-Term Debt 

At the end of the current fiscal year, the City of Temecula had a total long-term debt 

outstanding of $91.8 million which is comprised of tax allocation bonds and certificates 

of participation backed by the full faith and credit of the tax increment and special 

assessments allocated. 


12




--------------------------------------------- 


Summary of changes in Long-Term Debt 

For the Year Ended June 30, 2009 

Balance Balance Due Within 

June 30, 2008 Additions Deletions June 30, 2009 One Year 

Bonds and Notes Payable: 

Tax allocation bonds $ 63,210,000 $ - $ 680,000 $ 62,530,000 $ 710,000 

Certificates of participation 29,520,000 $ - 

265,000 29,255,000 705,000 

Notes Payable 495,332 495,332 - - 

Total Bonds and Notes Payable $ 93,225,332 $ - $ 1,440,332 $ 91,785,000 $ 1,415,000 

Capital leases 8,799 83,600 11,393 81,006 20,983 

Additional information on long-term debt is available in Note 6 to the financial 

statements on pages 46-51. 

During fiscal year 2008-09, the City received a rating upgrade from Standard & Poor’s 

on its outstanding 2008 Certificates of Participation, from an underlying A rating to an 

A+ rating. 

Economic Factors and Next Year’s Budgets and Rates 

The key assumptions in the General Fund revenue budget for fiscal year 2009-10 were: 

1. General Fund estimated revenues, net of operating transfers in, are estimated to 

reach $53,293,195, a decrease of $2,748,438 from fiscal year 2008-09 actual 

revenues. 

2. Sales and Use Tax revenue are estimated to increase $629,230, or 3%, from 

fiscal year 2008-09 actual revenue due to an anticipated in retail sales related to 

the expansions of the Promenade Mall and Professional Hospital Supply. 

3. Total property taxes are estimated to decrease $1,031,859, or 16%, from fiscal 

year 2008-09 actual revenue primarily due to declines in property values due to 

reassessments, corrections, and appeals. 

4. Motor vehicle fees and Property Tax in Lieu of VLF are estimated to decrease 

$695,926, or 9%, from fiscal year 2008-09 actual revenue primarily due to 

declines in automobile sales and property assessed valuations. 

5. Investment earnings are estimated to decrease $1,121,815, or 50%, from fiscal 

year 2008-09 actual revenue primarily due to declining interest earning rates and 

anticipated reductions in the overall investment pool due to the advanced 

construction of major capital projects. 

All of these factors were considered in preparing the City of Temecula’s annual 

operating budget for fiscal year 2009-10. 


13




--------------------------------------------- 

Requests for Information 

This financial report is designed to provide a general overview of the City of Temecula’s 

finances for all those with an interest in the government’s finances. Questions 

concerning any of the information provided in this report or requests for additional 

financial information should be addressed to City of Temecula Finance Department, 

P.O. Box 9033, Temecula, California 92589-9033. 


14

CITYOF TEMECULA 



BASIC 

FINANCIAL 

STATEMENTS 

15


STATEMENT OF NET ASSETS 

JUNE 30, 2009 

Governmental 

Activities 

Assets: 

Cash and investments $ 109,676,533 

Receivables: 

Accounts 10,613 

Taxes 1,754,393 

Notes and loans 10,515,391 

Accrued interest 1,064,128 

Prepaid costs 288,550 

Deposits 5,325 

Due from other governments 7,276,949 

Inventories 3,088 

Deferred charges 1,488,775 

Land held for resale 6,714,661 

Restricted assets: 

Cash with fiscal agent 101,745,786 

Other receivables 225,326 

Net OPEB Asset 2,948,151 

Capital assets not being depreciated 192,039,564 

Capital assets, net of depreciation 420,723,329 

Total Assets 856,480,562 

Liabilities: 

Accounts payable 27,440,156 

Accrued liabilities 2,316,232 

Accrued interest 1,327,611 

Deposits payable 2,812,974 

Noncurrent liabilities: 

Due within one year 2,730,504 

Due in more than one year 91,061,669 

Total Liabilities 127,689,146 

Net Assets: 

Invested in capital assets, 

net of related debt 591,669,819 

Restricted for: 

Community development projects 88,069,114 

Public works 10,306,145 

Capital projects 32,637,273 

Debt service 7,471,881 

Community services 3,948,709 

OPEB 2,948,151 

Unrestricted (8,259,676) 

Total Net Assets $ 728,791,416 

See Notes to Financial Statements 16


STATEMENT OF ACTIVITIES 

YEAR ENDED JUNE 30, 2009 

Net 

(Expenses) 

Revenues and 

Changes in 

Program Revenues 

Net Assets 

Operating Capital Net 

Charges for Contributions Contributions Governmental 

Expenses Services and Grants and Grants Activities 

Functions/Programs 

Primary Government: 


General government $ 16,214,425 $ - $ 48,172 $ - $ (16,166,253) 

Public safety 23,240,092 1,924,106 385,809 284,830 (20,645,347) 

Community development 21,846,282 7,248,403 1,145,620 13,288,536 (163,723) 

Community services 22,427,530 19,805,723 1,756,157 - (865,650) 

Public works 20,006,739 1,625,756 5,367,709 129,860 (12,883,414) 

Interest on long-term debt 4,620,424 - - - (4,620,424) 

Total Governmental Activities 108,355,492 30,603,988 8,703,467 13,703,226 (55,344,811) 

General Revenues: 

Taxes: 

Property taxes, levied for general purpose 33,310,255 

Transient occupancy taxes 2,088,823 

Sales taxes 23,087,328 

Franchise taxes 3,322,981 

Other taxes 762,367 

Motor vehicle in lieu - unrestricted 797,994 

Use of money and property 3,055,857 

Other 284,584 

Total General Revenues 66,710,189 

Change in Net Assets 11,365,378 

Net Assets at Beginning of Year, as restated 717,426,038 

Net Assets at End of Year $ 728,791,416 



BALANCE SHEET 

GOVERNMENTAL FUNDS 

JUNE 30, 2009 

Special Revenue Funds 

Community 

Services District 

Redevelopment 

Agency 

Capital Projects 

Funds 

General 

Capital Outlay 

Assets: 

Pooled cash and investments $ 51,404,464 $ 4,506,349 $ 12,357,628 $ 17,488,976 

Receivables: 

Taxes 1,056,708 697,452 147 - 

Notes and loans - - 10,515,388 - 

Accrued interest 330,591 32,809 75,038 171,623 

Prepaid costs 46,398 - - - 

Deposits 1,325 4,000 - - 

Other receivables 172,601 48,619 782 3,117 

Due from other governments 5,155,075 - - 607,799 

Due from other funds 643,111 134,755 - 6,251,958 

Advances to other funds 1,974,708 - - - 

Inventories 3,088 - - - 

Land held for resale - - 6,616,177 - 


Cash and investments with fiscal agents - - - 19,243,880 

Total Assets $ 60,788,069 $ 5,423,984 $ 29,565,160 $ 43,767,353 

Liabilities and Fund Balances: 

Liabilities: 

Accounts payable $ 4,337,003 $ 1,108,095 $ 28,673 $ 10,633,114 

Accrued liabilities 2,029,218 159,792 13,767 10,321 

Deferred revenues 2,844,395 - 10,169,569 - 

Deposits payable 2,355,387 207,388 50,475 107,065 

Due to other funds - - - 379,580 

Advances from other funds - - - - 

Total Liabilities 11,566,003 1,475,275 10,262,484 11,130,080 

Fund Balances: 

Reserved: 

Reserved for encumbrances 9,999,751 100,190 6,051,823 30,198,303 

Reserved for prepaid costs 46,398 - - - 

Reserved for land held for resale - - 6,616,177 - 

Reserved for notes and loans - - 345,819 - 

Reserved for advances to other funds 870,176 - - - 

Reserved for inventories 3,088 - - - 

Reserved for deposits 1,325 4,000 - - 

Reserved for debt services - - - - 

Unreserved: 

Unreserved, reported in nonmajor: 

Special revenue funds - - - - 

Capital projects funds - - - - 

Debt service funds - - - - 

Designated for continuing appropriations 200,543 3,476,850 6,206,323 2,438,970 

Designated for economic uncertainty 11,016,910 - - - 

Designated for comprehensive leave 1,635,574 367,669 82,534 - 

Designated for open space/dutch villages 150,000 - - - 

Designated for liberty quarry project 200,000 - - - 

Designated for future CIP 4,668,498 - - - 

Designated for open space 217,000 - - - 

Designated for civic center 9,700,000 - - - 

Designated for unrealized gains 796,927 - - - 

Undesignated 9,715,876 - - - 

Total Fund Balances 49,222,066 3,948,709 19,302,676 32,637,273 

Total Liabilities and Fund Balances $ 60,788,069 $ 5,423,984 $ 29,565,160 $ 43,767,353 



BALANCE SHEET 


JUNE 30, 2009 

Assets: 

Pooled cash and investments 

Receivables: 

Taxes 

Notes and loans 

Accrued interest 

Prepaid costs 

Deposits 

Other receivables 

Due from other governments 

Due from other funds 

Advances to other funds 

Inventories 

Land held for resale 


Cash and investments with fiscal agents 

Total Assets 


Liabilities: 

Accounts payable 

Accrued liabilities 

Deferred revenues 

Deposits payable 

Due to other funds 

Advances from other funds 

Total Liabilities 


Reserved: 

Reserved for encumbrances 

Reserved for prepaid costs 

Reserved for land held for resale 

Reserved for notes and loans 

Reserved for advances to other funds 

Reserved for inventories 

Reserved for deposits 

Reserved for debt services 

Unreserved: 

Unreserved, reported in nonmajor: 

Special revenue funds 

Capital projects funds 

Debt service funds 

Designated for continuing appropriations 

Designated for economic uncertainty 

Designated for comprehensive leave 

Designated for open space/dutch villages 

Designated for liberty quarry project 

Designated for future CIP 

Designated for open space 

Designated for civic center 

Designated for unrealized gains 

Undesignated 

Total Fund Balances 

Total Liabilities and Fund Balances 

Capital Projects 

Funds 

Roripaugh CFD 

#03-02 

Debt Service 

Fund 

Redevelopment 

Agency 

Other 

Governmental 

Funds 

Total 

Governmental 

Funds 

$ - $ 3,656,699 $ 16,909,009 $ 106,323,125 

- 86 - 1,754,393 

- - - 10,515,388 

169,139 67,765 196,454 1,043,419 

- - - 46,398 

- - - 5,325 

- - 207 225,326 

- - 1,514,075 7,276,949 

- - - 7,029,824 

- - - 1,974,708 

- - - 3,088 

- - 98,484 6,714,661 

45,374,788 15,849,824 21,277,294 101,745,786 

$ 45,543,927 $ 19,574,374 $ 39,995,523 $ 244,658,390 

$ - $ 11,000,000 $ 47,617 $ 27,154,502 

- - 20,233 2,233,331 

- - - 13,013,964 

- - 82,659 2,802,974 

- - 6,650,244 7,029,824 

- 1,974,708 708 - 1,974,708 

708 

- 12,974,708 6,800,753 54,209,303 

- 2,906,355 8,233,631 57,490,053 

- - - 46,398 

- - 98,484 6,714,661 

- - - 345,819 

- - - 870,176 

- - - 3,088 

- - - 5,325 

- 1,306,196 - 1,306,196 

- - 12,954,849 12,954,849 

- - 11,035,591 11,035,591 

- - 872,215 872,215 

45,543,927 2,387,115 - 60,253,728 

- - - 11,016,910 

- - - 2,085,777 

- - - 150,000 

- - - 200,000 

- - - 4,668,498 

- - - 217,000 

- - - 9,700,000 

- - - 796,927 

- - - 9,715,876 

45,543,927 6,599,666 33,194,770 190,449,087 

$ 45,543,927 $ 19,574,374 $ 39,995,523 $ 244,658,390 



RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS 

TO THE STATEMENT OF NET ASSETS 

JUNE 30, 2009 

Fund balances of governmental funds. $ 190,449,087 

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

different because: 

Capital assets net of depreciation have not been included as financial resources 

in governmental fund activity. 611,035,254 

Bond issuance cost is an expenditure in the governmental funds, but it is 

a deferred charge in the statement of net assets. 1,488,775 

Other Post Employment Benefits (OPEB) are expensed in the govenermental funds, but result in 

an accrued net OPEB obligation or asset in the statement of net assets. 

2,948,151 

Long-term debt and compensated absences 

that have not been included in the governmental fund activity: 

Long-term liabilities (91,006,840) 

Compensated Absences (2,090,818) 

Accrued interest payable for the current portion of interest due on 

Bonds has not been reported in the governmental funds. (1,327,611) 

Revenues reported as deferred revenue in the governmental funds and recognized 

in the Statement of Activities. These are included in the intergovernmental revenues 

in the governmental fund activity. 13,013,964 

Internal service funds are used by management to charge the costs of certain 

activities, such as equipment management and self-insurance, to individual funds. 

The assets and liabilities of the internal service funds must be added to the 

statement of net assets. 4,281,454 

Net assets of governmental activities $ 728,791,416 



STATEMENT OF REVENUES, 

EXPENDITURES AND CHANGES IN FUND BALANCES 




Capital 

Projects 

Fund 

Community 

Services District 

Redevelopment 

Agency 

General 


Revenues: 

Taxes $ 42,178,540 $ 3,675,562 $ 4,063,003 $ 

- 

Licenses and permits 2,178,784 - - - 

Intergovernmental 2,056,083 30,692 - 4,594,146 

Charges for services 5,652,729 16,008,019 - - 

Use of money and property 2,236,336 126,494 448,603 847,159 

Fines and forfeitures 1,167,821 - - - 

Developer fees - - - - 

Miscellaneous 571,340 1,701,966 349,054 434,989 

Total Revenues 56,041,633 21,542,733 4,860,660 5,876,294 

Expenditures: 

Current: 

General government 14,626,503 - - - 

Public safety 22,843,755 - - - 

Community development 7,846,531 - 948,061 - 

Community services - 19,429,003 - - 

Public works 8,290,764 - - - 

Capital outlay - 113,116 676,536 37,501,627 

, 

Debt service: 

Principal retirement - - - - 

Interest and fiscal charges - - - - 

Pass-through agreement payments - - - - 

Total Expenditures 53,607,553 19,542,119 1,624,597 37,501,627 

Excess (Deficiency) of Revenues 

Over (Under) Expenditures 2,434,080 2,000,614 3,236,063 (31,625,333) 

Other Financing Sources (Uses): 

Transfers in 3,176,562 - - 22,471,411 

Transfers out (1,111,916) (497,025) - - 

Total Other Financing Sources 

(Uses) 2,064,646 (497,025) - 22,471,411 

Net Change in Fund Balances 4,498,726 1,503,589 3,236,063 (9,153,922) 

Fund Balances, Beginning of Year, as restated 44,723,340 2,445,120 16,066,613 41,791,195 

Fund Balances, End of Year $ 49,222,066 $ 3,948,709 $ 19,302,676 $ 32,637,273 



STATEMENT OF REVENUES, 




Capital 

Projects 

Fund 

Revenues: 

Taxes 

Licenses and permits 

Intergovernmental 

Charges for services 

Use of money and property 

Fines and forfeitures 

Developer fees 

Miscellaneous 

Roripaugh CFD 

#03-02 

Debt Service 

Fund 

Redevelopment 

Agency 

Other 

Governmental 

Funds 

Total 

Governmental 

Funds 

$ - $ 16,252,014 $ - $ 66,169,119 

- - - 2,178,784 

- - 8,204,584 14,885,505 

- - - 21,660,748 

1,261,750 407,372 1,056,128 6,383,842 

- - - 1,167,821 

- - 3,977,338 3,977,338 

- - 1,984 3,059,333 

Total Revenues 

Expenditures: 

Current: 

General government 

Public safety 

Community development 

Community services 

Public works 

Capital outlay 

Debt service: 

Principal retirement 

Interest and fiscal charges 

Pass-through agreement payments 

Total Expenditures 


Over (Under) Expenditures 


Transfers in 

Transfers out 


(Uses) 

Net Change in Fund Balances 

Fund Balances, Beginning of Year, as restated 

Fund Balances, End of Year 

1,261,750 16,659,386 13,240,034 119,482,490 

- - 49,097 14,675,600 

- - - 22,843,755 

- 196,364 981,473 9,972,429 

- - 34,227 19,463,230 

- - - 8,290,764 

- 11,000,000 , 2,115,185 , 51,406,464 

, 

- 680,000 760,332 1,440,332 

- 3,163,871 1,361,170 4,525,041 

- 11,506,378 - 11,506,378 

- 26,546,613 5,301,484 144,123,993 

1,261,750 (9,887,227) 7,938,550 (24,641,503) 

- - 2,133,941 27,781,914 

- (525,000) (25,647,973) (27,781,914) 

- (525,000) (23,514,032) - 

1,261,750 (10,412,227) (15,575,482) (24,641,503) 

44,282,177 17,011,893 48,770,252 215,090,590 

$ 45,543,927 $ 6,599,666 $ 33,194,770 $ 190,449,087 



RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, 

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS 

TO THE STATEMENT OF ACTIVITIES 


Net change in fund balances - total governmental funds. $ (24,641,503) 

Amounts reported for governmental activities in the statement of activities are 

different because: 

Governmental funds report capital outlays as expenditures. However, in the statement 

of activities, the costs of those assets is allocated over their estimated useful lives 

as depreciation expense. This is the amount by which capital outlays exceeded 

depreciation in the current period. 

Capital expenditures 51,243,714 

Depreciation expense (15,706,624) 

Disposal of assets (249,749) 35,256,785 

Repayment of bond principal is an expenditure in the governmental funds, but the 

repayment reduces long-term liabilities in the statement of net assets. In addition, bond 

discounts and premiums are reported when the debt is first issued, where as these 

amounts are deferred and amortized in the Statement of Activities. 

Principal payments 1,440,332 

Discounts on bonds issued (25,938) 1,414,394 

Debt issuance costs are expenditures in governmental funds when issued, but these costs 

are capitalized on the statement of net assets and amortized over the life of the bond. 

Current year amortized bond issuance costs (50,071) 

Accrued interest for long-term liabilities. This is the net change in accrued interest 

for the current period. (10,491) 

Compensated absences expenses reported in the statement of activities do not 

require the use of current financial resources and, therefore, are not reported as 

expenditures in governmental funds. (325,895) 

Other Post Employment Benefits (OPEB) contributions are expensed in the 

governmental funds, but are recorded as a net increase to the accrued net OPEB asset 

in the statement of net assets. 

211,925 

Revenues reported as deferred revenue in the governmental funds and recognized 

in the Statement of Activities. These are included in the intergovernmental revenues 

in the governmental fund activity. 154,289 

Internal service funds are used by management to charge the costs of certain 

activities, such as equipment management and self-insurance, to individual funds. 

The net revenues (expenses) of the internal service funds is reported with 

governmental activities. (644,055) 

Change in net assets of governmental activities $ 11,365,378 



BUDGETARY COMPARISON STATEMENT 

GENERAL FUND 


Variance with 

Final Budget 

Budget Amounts Actual Positive 

Original Final Amounts (Negative) 

Revenues: 

Taxes $ 48,357,000 $ 42,701,269 $ 42,178,540 $ (522,729) 

Licenses and permits 1,838,419 1,764,096 2,178,784 414,688 

Intergovernmental 1,943,809 1,869,944 2,056,083 186,139 

Charges for services 6,677,299 5,946,463 5,652,729 (293,734) 

Use of money and property 1,690,000 1,690,000 2,236,336 546,336 

Fines and forfeitures 1,191,950 1,154,950 1,167,821 12,871 

Miscellaneous 359,650 377,409 571,340 193,931 

Total Revenues 62,058,127 55,504,131 56,041,633 537,502 

Expenditures: 


City Council 439,360 413,729 391,609 22,120 

Community Support 246,400 182,900 153,060 29,840 

City Manager 1,286,118 1,229,141 1,187,250 41,891 

City Clerk 1,182,292 1,133,715 1,101,030 32,685 

City Attorney 721,300 821,300 806,912 14,388 

Finance 2,278,055 2,161,004 1,960,809 200,195 

Personnel 687,641 594,746 559,086 35,660 

Non-departmental 10,277,639 9,516,881 8,466,747 1,050,134 

Public safety 

Police 21,442,504 20,741,930 19,708,237 1,033,693 

Fire 4,606,952 3,943,221 2,947,981 995,240 

Animal Control 175,000 188,000 187,537 463 


Planning 3,143,757 3,048,360 2,799,777 248,583 

Building and Safety 3,213,885 2,875,522 2,604,933 270,589 

Land Development 1,711,927 1,625,715 1,574,012 51,703 

Economic Development 984,122 1,037,846 867,809 170,037 

Public works 

Public Works 9,358,975 9,292,586 8,290,764 1,001,822 



Transfers in 1,877,500 3,358,744 3,176,562 (182,182) 

Transfers out (24,811,797) (15,111,797) (1,111,916) 13,999,881 

Total Other Financing Sources (22,934,297) (11,753,053) 2,064,646 13,817,699 

Net Change in Fund Balances (22,632,097) (15,055,518) 4,498,726 19,554,244 

Fund Balances, Beginning of Year 44,723,340 44,723,340 44,723,340 - 





COMMUNITY SERVICES DISTRICT 


Variance with 

Final Budget 



Revenues: 

Taxes $ 3,710,806 $ 3,710,339 $ 3,675,562 $ (34,777) 

Intergovernmental 30,690 30,690 30,692 2 

Charges for services 17,800,448 16,937,056 16,008,019 (929,037) 

Use of money and property 80,000 89,000 126,494 37,494 

Miscellaneous 7,400 6,858 1,701,966 1,695,108 


Expenditures: 

Parks and recreation 21,560,363 21,072,119 19,429,003 1,643,116 

Capital outlay - 113,301 113,116 185 



Transfers out (497,025) (497,025) (497,025) - 

Total Other Financing Sources (497,025) (497,025) (497,025) - 

Net Change in Fund Balances (428,044) (908,502) 1,503,589 2,412,091 

Fund Balances, Beginning of Year, as restated 2,445,120 2,445,120 2,445,120 - 





REDEVELOPMENT AGENCY - SPECIAL REVENUE 


Variance with 

Final Budget 



Revenues: 

Taxes $ 3,598,411 $ 4,012,800 $ 4,063,003 $ 50,203 


Miscellaneous 45,000 383,156 349,054 (34,102) 


Expenditures: 

Community development 2,742,426 2,871,023 948,061 1,922,962 

Capital outlay 9,530,000 9,756,960 676,536 9,080,424 







STATEMENT OF NET ASSETS 

PROPRIETARY FUNDS 

JUNE 30, 2009 

Assets: 

Current: 

Governmental 

Activities- 

Internal 

Service Funds 

Cash and investments $ 3,353,408 

Receivables: 

Accounts 10,613 

Notes and loans 3 

Accrued interest 20,709 

Prepaid costs 242,152 

Total Current Assets 3,626,885 

Noncurrent: 

Capital assets - net of accumulated depreciation 1,727,639 

Total Noncurrent Assets 1,727,639 

Total Assets 5,354,524 

Liabilities and Net Assets: 

Liabilities: 

Current: 

Accounts payable 285,654 

Accrued liabilities 82,901 

Deposits payable 10,000 

Accrued compensated absences 100,978 

Accrued claims and judgments 67,337 

Capital lease payable 62,789 

Total Current Liabilities 609,659 

Noncurrent: 

Accrued compensated absences 103,544 

Accrued claims and judgments 310,146 

Capital lease payable 49,721 

Total Noncurrent Liabilities 463,411 

Total Liabilities 1,073,070 

Net Assets: 

Invested in capital assets, net of related debt 1,615,129 

Unrestricted 2,666,325 

Total Net Assets $ 4,281,454 



STATEMENT OF REVENUES, EXPENSES 

AND CHANGES IN FUND NET ASSETS 



Governmental 

Activities- 

Internal 

Service Funds 

Operating Revenues: 

Sales and service charges $ 3,714,431 

Miscellaneous 15,964 

Total Operating Revenues 3,730,395 

Operating Expenses: 

Administration and general 2,091,967 

Depreciation expense 572,613 

Operations and maintenance 1,785,078 

Total Operating Expenses 4,449,658 

Operating Income (Loss) (719,263) 

Nonoperating Revenues (Expenses): 

Interest revenue 81,548 

Interest expense (8,883) 

Gain (loss) on disposal of capital assets 2,543 

Total Nonoperating 

Revenues (Expenses) 75,208 

Income (Loss) Before Transfers (644,055) 

Changes in Net Assets (644,055) 

Net Assets: 

Beginning of Year 4,925,509 

End of Fiscal Year $ 4,281,454 



STATEMENT OF CASH FLOWS 



Governmental 

Activities- 

Internal 

Service Funds 

Cash Flows from Operating Activities: 

Cash received from customers and users $ 3,724,858 

Cash paid to suppliers for goods and services (1,673,719) 

Cash paid to employees for services (2,027,009) 

Net Cash Provided (Used) by Operating Activities 24,130 

Cash Flows from Capital 

and Related Financing Activities: 

Acquisition and construction of capital assets (437,988) 

Principal paid on capital debt (41,875) 

Interest paid on capital debt (8,883) 

Proceeds from sales of capital assets 2,543 

Net Cash Provided (Used) by 

Capital and Related Financing Activities (486,203) 

Cash Flows from Investing Activities: 

Loans 138 

Interest received 97,812 


Investing Activities 97,950 

Net Increase (Decrease) in Cash 

and Cash Equivalents (364,123) 

Cash and Cash Equivalents at Beginning of Year 3,717,531 

Cash and Cash Equivalents at End of Year $ 3,353,408 

Reconciliation of Operating Income to Net Cash 

Provided (Used) by Operating Activities: 

Operating income (loss) $ (719,263) 

Adjustments to reconcile operating income (loss) 

net cash provided (used) by operating activities: 

Depreciation 572,613 

(Increase) decrease in accounts receivable (1,386) 

(Increase) decrease in prepaid expense 1,464 

Increase (decrease) in accounts payable 191,852 

Increase (decrease) in accrued liabilities 31,828 

Increase (decrease) in deferred/unearned revenue (4,151) 

Increase (decrease) in claims and judgments (81,957) 

Increase (decrease) in compensated absences 33,130 

Total Adjustments 743,393 


Operating Activities $ 24,130 

Non-Cash Investing, Capital, and Financing Activities: 

There were no noncash investing, capital or financing activities 



STATEMENT OF FIDUCIARY NET ASSETS 

FIDUCIARY FUNDS 

JUNE 30, 2009 

Agency 

Fund 

Assets: 

Pooled cash and investments $ 2,514,520 

Receivables: 

Taxes 406,193 



Cash and investments with fiscal agents 18,244,202 

Total Assets $ 21,201,474 

Liabilities: 

Accounts payable $ 3,564 


Due to bondholders 21,124,903 

Total Liabilities $ 21,201,474 



NOTES TO FINANCIAL STATEMENTS 

JUNE 30, 2009 

I. SIGNIFICANT ACCOUNTING POLICIES 

Note 1: 

Summary of Significant Accounting Policies 

a. Description of Entity 

The reporting entity “City of Temecula” includes the accounts of the City, the Temecula 

Redevelopment Agency, the Temecula community Services District, the Temecula Public 

Facilities Financing Corporation, the Industrial Development Authority of the City of 

Temecula, and the Temecula Public Financing Authority. 

The City of Temecula was incorporated on December 1, 1989, as general law city and 

operates under a council/manager form of government. 

Temecula Redevelopment Agency (TRA) 

The TRA was activated in July 1991. The purpose of the TRA is to eliminate deteriorating 

conditions and conserve, rehabilitate and revitalize project areas in accordance with 

Agency’s plan and annual work programs. The TRA is designed to encourage 

cooperation and participation of residents, business persons, community organizations 

and public agencies in the revitalization of the area. The City of Temecula City Council 

serves as the Agency’s Board of Directors. 

Temecula Community Service District (TCSD) 

The TCSD was organized on December 1, 1989. Operating under a board of directors 

which is the City Council, the TCSD currently provides street lighting, parks, recreation, 

slope maintenance and refuse hauling services. 

Industrial Development Authority of the City of Temecula (Authority) 

The Authority was activated on March 22, 1994. The purpose of the Authority is to provide 

alternative methods of financing certain facilities in order to prevent the loss of existing 

jobs, increase employment opportunities, and otherwise contribute to the economic 

development of the City. The City of Temecula City Council also serves as the Authority’s 

Board of Directors. 

Temecula Public Financing Authority (TPFA) 

The TPFA was established pursuant to a Joint Exercise of Powers Agreement, dated 

April 24, 2001, by and between the City and the Redevelopment Agency. The City and the 

Redevelopment Agency formed the TPFA for the primary purpose of assisting in the 

financing and refinancing of a community facilities district and the issuance of bonds 

necessary to finance the public improvements. The TPFA may establish other community 

facilities districts in the future in connection with the financing of public improvements in 

the City and could also be used in connection with other City and Agency financings. 

The criteria used in determining the scope of the reporting entity are based on the 

provisions of GASB Statement No. 14. The City of Temecula is the primary governmental 

unit. 

33


Notes to Financial Statements (Continued) 

Note 1: 

Summary of Significant Accounting Policies (Continued) 

Component units are those entities which are financially accountable to the primary 

governmental unit either because the City appoints a voting majority of the component unit 

Board, or because the component unit will provide financial benefit or impose a financial 

burden on the City. The City has accounted for TRA, TCSD, Corporation, Authority, and 

TPFA as "blended" component units. Despite being legally separate, these units are so 

intertwined with the City that they are in substance, part of the City's operations. 

Accordingly, the balances and transactions of the blended component units are included in 

the Special Revenue, Debt Service and Capital Projects funds. The following specific 

criteria were used in determining that TRA, TCSD, Corporation, Authority, and TPFA were 

blended component units: 

1. The members of the City Council also act as the governing body of TRA. The City and 

TRA are financially interdependent. The City makes loans to TRA for use on 

redevelopment projects. Property tax revenues of TRA are used to repay the loans 

from the City. TRA is managed by employees of the City. A portion of the City's salary 

and overhead expenses is billed to TRA each year. 

2. The members of the City Council serve as members of the governing body of TCSD, 

Authority, and TPFA. City employees manage these entities and provide all support 

functions for them including financial reporting and investment decisions. 

b. Government-Wide and Fund Financial Statements 

The government-wide financial statements (i.e., the statement of net assets and the 

statement of changes in net assets) report information about the reporting government as 

a whole, except for its fiduciary activities. Governmental activities, which normally are 

supported by taxes and intergovernmental revenues, are reported separately from 

business-type activities, which rely to a significant extent on fees and charges for support. 

Likewise, the primary government (including its blended component units) is reported 

separately from discretely presented component units for which the primary government is 

financially accountable. The City has no business-type activities or discretely presented 

component units. For the most part, the effect of interfund activity has been removed from 

these statements. 

The statement of activities demonstrates the degree to which the direct expenses of a 

given function or segment are offset by program revenues. Direct-expenses are those 

that are clearly identifiable with a specific function or segment. Program revenues include 

1) charges to customers or applicants who purchase, use, or directly benefit from goods, 

services, or privileges provided by a given function or segment and 2) grants and 

contributions that are restricted to meeting the operational or capital requirements .of a 

particular function or segment. Taxes and other items not properly included among 

program revenues are reported instead as general revenues. 

The underlying accounting system of the City is organized and operated on the basis of 

separate funds, each of which is considered to be a separate accounting entity. The 

operations of each fund· are accounted for with a separate set of self-balancing accounts 

that comprise its assets, liabilities, fund· equity, revenues and expenditures or expenses, 

as appropriate. Governmental resources are allocated to and accounted for in individual 

funds based upon the purposes for which they are to be spent and the means by which 

spending activities are controlled. 

34



Note 1: 


Separate financial statements for the government's governmental, proprietary, and 

fiduciary funds are presented after the government-wide financial statements. These 

statements display information about major funds individually and other governmental 

funds in the aggregate for governmental funds. 

Fiduciary statements, even though excluded from the government-wide financial 

statements includes financial information that primarily represent assets held by the City in 

a custodial capacity for other individuals or organizations. 

c. Measurement Focus, Basis of Accounting, and Financial Statement Presentation 

The government-wide financial statements are reported using the economic resources 

measurement focus and the accrual basis of accounting, as are the proprietary fund and 

fiduciary fund financial statements, excluding agency funds which have no measurement 

focus. Under the economic resources measurement focus, all assets and liabilities 

(whether current or noncurrent) associated with their activity are included on their balance 

sheets. Operating statements present increases (revenues) and decreases (expenses) in 

total net assets. Under the accrual basis of accounting, revenues are recorded when 

earned and expenses are recorded when a liability is incurred, regardless of the timing of 

related cash flows. 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. Nonexchange transactions, in which the City gives (or 

receives) value without directly receiving (or giving) equal value in exchange include 

grants, entitlements, and donations. Revenue from grants, entitlements, and donations is 

recognized in the fiscal year in which all the eligibility requirements have been satisfied. 

Operating expenses for 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. 

When both restricted and unrestricted resources are available for use, it is the 

government's policy to use restricted resources first, then unrestricted resources as they 

are needed. 

Governmental fund financial statements are reported using the current financial resources 

measurement focus and the modified accrual basis of accounting. Under the current 

financial resources measurement focus, only current assets and current liabilities are 

generally included on their balance sheets. The reported fund balance (net current 

assets) is considered to be a measure of "available spendable resources". Governmental 

fund operating statements present increases (revenues and other financing sources) and 

decreases (expenditures and other financing uses) in net current assets. Accordingly, 

they are said to present a summary of sources and uses of "available spendable 

resources" during a period. Noncurrent portions of long-term receivables due to 

governmental funds are reported on their balance sheets in spite of their spending 

measurement focus. However, special reporting treatments are used to indicate that they 

should not be considered "available spendable resources" since they do not represent net 

current assets. Recognition of governmental fund type revenue represented by 

noncurrent receivables is deferred until they become current receivables. Noncurrent 

portions of other long-term receivables are offset by fund balance reserve accounts. 

35



Note 1: 


Under the modified accrual basis of accounting, revenues are considered to be available 

when they are collectible within the current period or soon enough thereafter to pay 

liabilities of the current period. For this purpose, the government generally considers 

revenues to be available if they are collected within 60 days of the end of the current fiscal 

period, except for gas tax which is 120 days and grants. Expenditures generally are 

recorded when a liability is incurred, except for principal and interest on general long-term 

liabilities, claims and judgments, and compensated absences which are recognized as 

expenditures to the extent they have matured. General capital asset acquisitions are 

reported as expenditures in governmental funds. Proceeds of general long-term liabilities 

are reported as other financing sources. 

Property taxes, sales tax, motor vehicle license fees, transient occupancy taxes, franchise 

taxes, licenses, and interest associated with the current fiscal period are all considered to 

be susceptible to accrual and so have been recognized as revenues of the current fiscal 

period. Only the portion of special assessments receivable due within the current fiscal 

period is considered to be susceptible to accrual as revenue of the current period. All other 

revenue items are considered to be measurable and available only when cash is received 

by the government. 

For the government-wide statements, the City follows FASB Statements and 

Interpretations issued on or before November 30, 1989, Accounting Principles Board 

Opinions and Accounting Research Bulletins, unless these pronouncements conflict with 

GASB pronouncements. 

d. Fund Classifications 

The funds designated as major funds are determined by a mathematical calculation 

consistent with GASB Statement No. 34. The City reports the following major 

governmental funds: 

The General Fund is the primary operating fund of the City and is used to account for all 

revenues and expenditures that are not required to be accounted for in another fund. 

The Community Services District - Special Revenue Fund is used to account for 

assessment proceeds restricted for parks, recreation, street lighting, slope maintenance, 

recycling and refuse collection, and specific street maintenance. 

The Redevelopment Agency - Special Revenue Fund is used for account for the portion of 

redevelopment tax increment monies which California Redevelopment Law requires to be 

set aside for the development of low and moderate income housing. 

The Capital Outlay - Capital Projects Fund is used to account for financial resources used 

for the acquisition, construction and improvement of various capital facilities. 

The Roripaugh Community Facilities District #03-02 - Capital Projects Fund is used to 

account for bond proceeds which will be used for capital improvements in Roripaugh 

Community Facilities District No. 03-02 (Roripaugh Ranch). 

The Redevelopment Agency – Debt Service Fund is used to account for the payment of 

interest and principal on outstanding tax allocation bonds and other debt of the 

Redevelopment Agency. 

36



Note 1: 


The City’s fund structure also includes the following fund types: 


The Internal Service Funds are used to account for activities and services performed for 

other departments within the City on a cost reimbursement basis. Specific activities 

accounted for included risk management and insurance programs, replacement of city 

vehicles, information systems services, central mailing and reprographic services and city 

maintenance facilities operations. 

FIDUCIARY FUNDS 

The Agency Fund is used to account for assets temporarily held by the City in a fiduciary 

capacity for various Community Facilities Districts. Agency Funds are custodial in nature 

(assets equal liabilities) and do not involve measurement of results of operations. 

Fiduciary funds use the economic resources measurement focus. 

e. Cash and Investments 

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

thereof, see Note 3). 

A substantial portion of the City's investments are in short-term, highly liquid instruments, 

with original maturities of three months or less. For purposes of the statement of cash 

flows, all cash and investments held by the internal service funds are considered to be 

short term and, accordingly, are classified as cash and cash equivalents. 

f. Land Held for Resale 

Land held for resale represents land that was acquired in accordance with the objectives 

of the Agency. Land held for resale is generally valued at cost. In instances where an 

anticipated sales price is known to be lower than cost, a write down is recorded. A portion 

of fund balance is reserved for land held for resale to indicate that a portion of fund 

balance is not available for future expenditures. 

g. Inventories and Prepaid items 

Inventories of materials and supplies are carried at cost. The City uses the consumption 

method of accounting for inventories. 

Certain payments to vendors reflect costs applicable to future accounting periods and are 

recorded as prepaid items in both government-wide and fund financial statements. The 

fund balances in the governmental fund types have been reserved for amounts equal to 

the prepaid items in the fund-level statements, since these amounts are not available for 

appropriation. 

h. 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 $5,000 are capitalized if they have an 

expected useful life of 1 year or more. Infrastructure assets with a cost exceeding 

$100,000 are capitalized. 

37



Note 1: 


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

including pavement, curb and gutter, sidewalks, traffic control devices, streetlights, 

sewers, storm drains, bridges and right-of-way corridors within the City. The City has 

valued and recorded all infrastructure asset data in its entirety as of June 30, 2009. 

Capital assets used in operations are depreciated over their estimated useful lives using 

the straight-line method in the Government-wide Financial Statements and in the Fund 

Financial Statements of the Proprietary Funds. Depreciation is charged as an expense 

against operations and accumulated depreciation is reported on the respective Statement 

of Net Assets. 

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

Buildings 

Improvements other than buildings 

Vehicles, machinery and equipment 

Furniture and fixtures 

Infrastructure 

40 years 

40 years 

3 – 25 years 

4 – 25 years 

25 – 75 years 

i. Compensated Absences 

In accordance with GASB Statement No. 16, an employee benefits payable liability is 

recorded for unused vacation and similar compensatory leave balances. The employees' 

entitlement to these balances are attributable to services already rendered and it is 

probable that virtually all of these balances will be liquidated by either paid time off or 

payments upon termination or retirement. 

Under GASB Statement No. 16, a liability is recorded for unused sick leave balances only 

to the extent that it is probable that the unused balances will result in termination 

payments. Other amounts of unused sick leave are excluded from the liability since their 

payment is contingent solely upon the occurrence of a future event (illness) that is outside 

the control of the City and the employee. 

A proprietary fund liability is accrued for all leave benefits relating to the proprietary funds. 

In the government-wide financial statement, amounts expected to be liquidated within one 

year are classified as current with the remaining amount included as long term liabilities. 

j. Claims and Judgments 

When it is probable that a claim 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 under its self-insurance program. This liability, including an estimate 

of claims which have been incurred but not reported, has been accrued by the City's 

Internal Service Fund. Small dollar claims and judgments are recorded as expenditures 

when paid. 

38



Note 2: 

Stewardship, Compliance and Accountability (Continued) 

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, and are then allocated to the cities based on complex formulas. Accordingly, 

the City of Temecula accrues only those taxes which are received within 60 days after 

year end. 

Lien Date January 1 

Levy Date June 30 

Due Dates November 1 and February 1 

Collection Dates December 10 and April 10 

l. Restricted Assets 

Restricted Assets consist of cash and investments totaling $101,745,786. The Capital 

Outlay fund restricts $19,243,880 to be used for the construction of the new civic center. 

$54,928,518 are contributions from property owners of the various Community Facilities 

Districts to be used for capital service improvements or debt payments. In addition, the 

Redevelopment Agency restricts $15,849,824 for debt service payments and $10,910,084 

are bond proceeds to be used for redevelopment projects. The remaining $813,480 is 

restricted in the Debt Service fund and will be used for additional debt service payments. 

m. Use of Estimates 

The preparation of financial statements in conformity with accounting principles generally 

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

assumptions that affect the reported amounts of assets and liabilities and disclosure of 

contingent assets and liabilities at the date of the financial statements and the reported 

amounts of revenues and expenditures/expenses during the reporting period. Actual 

results could differ from those estimates. 

II. STEWARDSHIP 

Note 2: 

Stewardship, Compliance and Accountability: 

a. General Budget Policies 

The City adheres to the following procedures in establishing the budgetary data reflected 

in its financial statements: 

1. 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. 

2. 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, 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 

departmental level. However, the City Manager is authorized to transfer budgeted 

amounts between individual accounts within a department. 

3. Formal budgetary integration is employed as a management control device. 

Commitments for materials and services, such as purchase orders and contracts, are 

recorded during the year as encumbrances to assist in controlling expenditures. 

39



Note 2: 

Stewardship, Compliance and Accountability (Continued) 

Appropriations which are encumbered at year-end lapse, and then are added to the 

following year’s budgeted appropriations. However, encumbrances at year-end are 

reported as reservations of fund balance. 

4. Budgets for the General, Special Revenue, Capital Projects, and Debt Service Funds 

are adopted on a basis substantially consistent with generally accepted accounting 

principles (GAAP). Accordingly, actual revenues and expenditures can be compared 

with related budgeted amounts without any significant reconciling items. 

5. 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, 2009, 

based on calculations by City Management, proceeds of taxes did not exceed related 

appropriations. 

The City is not legally required to adopt a budget for the Harveston Community Facilities 

District #01-2A & B, Crowne Hill Community Facilities District #03-1, Harveston 

Community Facilities District #03-6, Wolf Creek Community Facilities District #03-3, and 

Roripaugh Community Facilities District #03-02 funds, therefore no budgetary 

comparison schedule is presented for those funds. 

III. DETAILED NOTES ON ALL FUNDS 

Note 3: 

Cash and Investments 

As of June 30, 2009, cash and investments were reported in the accompanying financial 

statements as follows: 

Deposits 

Governmental activities $ 211,422,319 

Fiduciary funds 20,758,722 

Total Cash and Investments $ 232,181,041 

At June 30, 2009, the carrying amount of the City’s deposits was $4,601,468 and the 

bank balance was $5,186,313. The $584,845 difference represents outstanding checks 

and other reconciling items. 

The California Government Code requires California banks and savings and loan 

associations to secure a City’s deposits by pledging government securities with a value 

of 110% of a City’s deposits. California law also allows financial institutions to secure a 

City’s deposits by pledging first trust deed mortgage notes having a value of 150% of a 

City’s total deposits. The City Treasurer may waive the collateral requirement for 

deposits that are fully insured up to $100,000 by the FDIC. The collateral for deposits in 

federal and state chartered banks is held in safekeeping by an authorized Agent of 

Depository recognized by the State of California Department of Banking. The collateral 

for deposits with savings and loan associations is generally held in safekeeping by the 

Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These 

securities are physically held in an undivided pool for all California public agency 

depositors. Under Government Code Section 53655, the placement of securities by a 

bank or savings and loan association with an “Agent of Depository” has the effect of 

perfecting the security interest in the name of the local governmental agency. 

40



Note 3: 

Cash and Investments (Continued) 

Accordingly, all collateral held by California Agents of Depository are considered to be 

held for, and in the name of, the local governmental agency. 

Investments 

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 (U.S.) Treasury Obligations 5 years None None 

U.S. Government Sponsored 

Enterprise Securities 5 years None None 

Banker's Acceptances 180 days 40% 10% 

Commercial Paper 270 days 15% 10% 

Negotiable Certificates of Deposit 5 years 30% None 

Repurchase Agreements 30 days 50% None 

Local Agency Investment Fund (LAIF) N/A None 

40,000,000 per 

entity 

* - Excluding amounts held by bond trustee that are not subject to California Government Code 

restrictions. 

N/A - Not Applicable 

Investments Authorized by Debt Agreements 

Investments of debt proceeds held by 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. The table below identifies the investment types that are 

authorized for investments held by bond trustee. The table also identifies certain 

provisions of these debt agreements that address interest rate risk, credit risk, and 

concentration of credit risk. 

41



Note 3: 


Maximum Maximum 

Maximum Percentage Investment 

Authorized Investment Type Maturity Allowed in One Issuer 

United States (U.S.) Treasury Obligations None None None 


Enterprise Securities None None None 

Banker's Acceptances 1 year None None 

Commercial Paper 180 days None None 

Investment Agreements (2) (2) (2) 

Local Agency Investment Fund (LAIF) (1) None $ 40,000,000 

Money Market Mutual Funds (1) None None 

(1) Not Applicable 

(2) Acceptable to the Municipal Bond Insurer 

Investments in State Investment Pool 

The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is 

regulated by California Government Code Section 16429 under the oversight of the 

Treasurer of the State of California. LAIF is overseen by the Local Agency Investment 

Advisory Board, which consists of five members, in accordance with State statute. The 

State Treasurer’s Office audits the fund annually. The fair value of the position in the 

investment pool is the same as the value of the pool shares. 

GASB Statement No. 31 

The City adopted GASB Statement No. 31, Accounting and Financial Reporting for 

Certain Investments and for External Investment Pools, as of July 1, 1997. GASB 

Statement No. 31 establishes fair value standards for investments in participating interest 

earning investment contracts, external investment pools, equity securities, option 

contracts, stock warrants and stock rights that have readily determinable fair values. 

Accordingly, the City reports its investments at fair value in the balance sheet. All 

investment income, including changes in the fair value of investments, is recognized as 

revenue in the operating statement. 

Disclosures Relating to Interest Rate Risk 

Interest rate risk is the risk that changes in market interest rates will adversely affect the 

fair value of an investment. Generally, the longer the maturity of an investment, the 

greater the sensitivity of its fair value to changes in market interest rates. One of the ways 

that the City manages its exposure to interest rate risk is by purchasing a combination of 

shorter term and longer term investments and by timing cash flows from maturities so that 

a portion of the portfolio is maturing or coming close to maturity evenly over time as 

necessary to provide the cash flow and liquidity needed for operations. 

Information about the sensitivity of the fair values of the City's investments (including 

investments held by bond trustee) to market interest rate fluctuations is provided by the 

following table that shows the distribution of the City's investments by maturity: 

42



Note 3: 


Remaining Investment Maturities 

12 months 1 to 3 3 to 5 More than Fair 

or less years years 5 years Value 

Investments: 

Local Agency Investment Fund $ 61,242,731 $ - $ - $ - $ 61,242,731 


Enterprise Securities: 

FFCB 1,040,310 11,178,150 6,068,130 - 18,286,590 

FHLMC - 12,147,200 4,080,940 - 16,228,140 

FHLB - 1,007,160 2,024,700 - 3,031,860 

FNMA - 2,003,130 5,156,570 - 7,159,700 

Escrow Accounts 1,640,567 - - - 1,640,567 

Total Cash Investments 63,923,608 26,335,640 17,330,340 - 107,589,588 

Investments with Fiscal Agents: 

Money Market Mutual Funds 15,439,098 - - - 15,439,098 

Investment Agreements - - - 2,031,469 2,031,469 

Local Agency Investment Fund 73,228,868 - - - 73,228,868 

FHLMC 28,193,511 - - - 28,193,511 

Certificates of deposit 223,055 873,984 - - 1,097,039 

Total Investments with 

Fiscal Agent 117,084,532 873,984 - 2,031,469 119,989,985 

Total Investments $ 181,008,140 $ 27,209,624 $ 17,330,340 $ 2,031,469 $ 227,579,573 

Disclosures Relating to Credit Risk 

Generally, credit risk is the risk that an issuer of an investment will not fulfiII 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 as required by (where applicable) the California Government Code, the City's 

investment policy, or debt agreements, and the actual rating, as reported by Standards 

and Poor, as of year-end for each investment type: 

Investment Type 

Total Minimum Not 

as of Legal Required 

June 30, 2009 Rating AAA to be Rated Unrated 

Local Agency Investment Fund $ 61,242,731 (1) $ - $ - $ 61,242,731 


Enterprise Secutiries: 

FFCB 18,286,590 AAA 18,286,590 - - 

FHLMC 3,031,860 AAA 3,031,860 - - 

FHLB 16,228,140 AAA 16,228,140 - - 

FNMA 7,159,700 AAA 7,159,700 - - 

Escrow Accounts 1,640,567 (1) - - 1,640,567 

Held by Bond Trustee: 

Money Market Mutual Funds 15,439,098 AAA 15,439,098 - - 

Investment agreements 2,031,469 (2) - - 2,031,469 

Local Agency Investment Fund 73,228,868 (1) - - 73,228,868 

FHLMC 28,193,511 (2) - - 28,193,511 

Certificates of deposit 1,097,039 (1) - 1,097,039 - 

(1) Not Applicable 

Total $ 227,579,573 

$ 60,145,388 $ 1,097,039 $ 166,337,146 

(2) Acceptable to the Municipal Bond Insurer 

43



Note 3: 


Concentration of Credit Risk 

The investment policy of the City contains no limitations on the amount that can be 

invested in any one issuer beyond that stipulated by the California Government Code. 

Investments in anyone issuer that represent 5% or more of total City's investments are as 

follows: 

Reported 

Issuer Investment Type Amount 

Federal Farm Credit Bank U.S. Government Sponsored $ 18,286,590 

Enterprise Securities 

Federal Home Loan Bank U.S. Government Sponsored 16,228,140 

Enterprise Securities 

Custodial Credit Risk 

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository 

financial institution, a government will not be able to recover its deposits or will not be able 

to recover collateral securities that are in the possession of an outside party. The custodial 

credit risk for investments is the risk that, in the event of the failure of the counterparty 

(e.g., broker-dealer) to a transaction, a government will not be able to recover the value of 

its investment or collateral securities that are in the possession of another party. The 

California Government Code and the City's investment policy do not contain legal or policy 

requirements that would limit the exposure to custodial credit risk for deposits or 

investments. 

Note 4: Capital Assets 

Adjusted 

Balance at Beginning Balance at 

July 1, 2008 Adjustments Balance Transfers Increase Decrease June 30, 2009 

Capital assets, not being depreciated: 

Land $ 64,473,842 $ 500,000 $ 64,973,842 $ - $ 54,850 $ 44,850 $ 64,983,842 

Right of way 68,523,656 - 68,523,656 185,107 29,866 - 68,738,629 

Construction in progress 33,611,658 - 33,611,658 (1,446,450) 26,151,885 - 58,317,093 

Total capital assets, 

not being depreciated 166,609,156 500,000 167,109,156 (1,261,343) 26,236,601 44,850 192,039,564 

Capital assets, being depreciated: 

Buildings 66,870,560 - 66,870,560 - - - 66,870,560 

Improvements other than buildings 40,319,034 (500,000) 39,819,034 1,122,368 1,847,162 - 42,788,564 

Vehicles, machinery and equipment 9,705,579 - 9,705,579 1,537 1,138,462 - 10,845,578 

Furniture and fixtures 2,642,170 - 2,642,170 - 61,122 - 2,703,292 

Infrastructure 432,466,361 - 432,466,361 137,438 22,398,355 343,899 454,658,255 

Total capital assets 

being depreciated 552,003,704 (500,000) 551,503,704 1,261,343 25,445,101 343,899 577,866,249 

Less accumulated depreciation for: 

Buildings 7,902,667 - 7,902,667 - 1,482,289 - 9,384,956 

Improvements other than buildings 5,126,073 - 5,126,073 - 1,588,622 - 6,714,695 

Vehicles, machinery and equipment 6,651,242 - 6,651,242 - 1,082,951 - 7,734,193 

Furniture and fixtures 1,540,138 - 1,540,138 - 495,322 - 2,035,460 

Infrastructure 119,752,007 - 119,752,007 - 11,660,609 139,000 131,273,616 

Total accumulated depreciation 140,972,127 - 140,972,127 - 16,309,793 139,000 157,142,920 

Total capital assets 

being depreciated, net 411,031,577 (500,000) 431,751,697 1,261,343 9,135,308 204,899 420,723,329 

Total capital assets, net $ 577,640,733 $ - $ 598,860,853 $ - $ 35,371,909 $ 249,749 $ 612,762,893 

* An adjustment was maded to properly classify an asset. 

44



Note 4: 

Capital Assets (Continued) 

Depreciation expense charged to functions/programs for the governmental activities as 

follows: 

General government $ 723,913 

Public safety 310,025 

Public works 11,651,242 

Community development 127,778 

Community services 2,924,222 

Capital assets used by the government's internal service funds are 

charged to the various functions based on their usage of the assets 572,613 

Total depreciation $ 16,309,793 

Note 5: 

Interfund Receivables, Payables and Transfers 

The Composition of interfund balances as of June 30, 2009, is as follows: 

Due From Other Funds 

Community Service Capital 

General District - Special Outlay - Capital 

Fund Revenue Fund Projects Fund Total 

Due To Other Funds: 

Capital Outlay - Capital 

Projects Fund $ 244,825 $ 134,755 $ - $ 379,580 

Other Governmental Funds 398,286 - 6,251,958 6,650,244 

$ 643,111 $ 134,755 $ 6,251,958 $ 7,029,824 

The amounts loaned from the Community Services District - Special Revenue Fund and the 

General Fund to the Capital Outlay - Capital Projects Funds were for capital improvements. 

The amounts loaned the Capital Outlay - Capital Projects Fund to the Other Governmental 

funds were for various capital improvements. 

Advances From 

Other Funds 

Redevelopment 

Agency - Debt 

Service Fund 

Advances To Other Funds: 

General Fund $ 1,974,708 

$ 1,974,708 

The amount loaned to the Redevelopment Agency – Debt Service Fund by the General Fund 

are advances to fund capital improvements which will be paid back within five years. 

45



Note 5: 

Interfund Receivables, Payables and Transfers (Continued) 

Interfund Transfers 

The compositions of the City’s interfund transfer balances as of June 30, 2009, are as follows: 

Transfers Out 

Community Service Redevelopment Other 

General District - Special Agency - Debt Governmental 

Fund Revenue Fund Service Fund Funds Total 

Transfers In 

General Fund $ - $ - $ - $ 3,176,562 $ 3,176,562 

Capital Outlay - Capital 

Projects Fund - - - 22,471,411 22,471,411 

Other Governmental Funds 1,111,916 497,025 525,000 - 2,133,941 

$ 1,111,916 $ 497,025 $ 525,000 $ 25,647,973 $ 27,781,914 

The General Fund and Community Service District – Special Revenue Fund made transfers to 

Other Governmental Funds to provide for debt service payments. The Redevelopment Agency 

– Debt Service Fund made a transfer to Other Governmental Funds for Redevelopment 

Agency operating expenditures. The Other Governmental Funds transferred funds to the 

General Fund to provide funds for public works and public safety projects and transferred 

funds to the Capital Outlay Capital Projects Fund to provide funds for capital improvements. 

Note 6: 

Long-Term Liabilities 

The following is a summary of the Governmental Activities long-term liability transactions for 

the year ended June 30, 2009. 

Balance at Balance at Due Within 

Bonds and Notes Payable: July 1, 2008 Additions Deletions June 30, 2009 One Year 

Tax allocation bonds: 

2002 TAB $ 26,600,000 $ - $ 445,000 $ 26,155,000 $ 465,000 

2006 TAB Series A 17,780,000 - 235,000 17,545,000 245,000 

2006 TAB Series B 3,040,000 - - 3,040,000 - 

2007 TAB 15,790,000 - - 15,790,000 - 

63,210,000 - 680,000 62,530,000 710,000 

Less: bond discount (363,516) - (11,726) (351,790) - 

Total TAB 62,846,484 - 668,274 62,178,210 710,000 

Certificates of Participation: 

2001 COP 4,985,000 - 265,000 4,720,000 275,000 

2008 COP 24,535,000 - - 24,535,000 430,000 

29,520,000 - 265,000 29,255,000 705,000 

Less: bond discount (440,582) - (14,212) (426,370) - 

Total COP 29,079,418 - 250,788 28,828,630 705,000 

Note Payable 495,332 - 495,332 - - 

Total Bonds and 

Notes Payable 92,421,234 - 1,414,394 91,006,840 1,415,000 

Capital Lease Payable 154,385 - 41,875 112,510 62,789 

Claims Payable 459,440 39,540 121,497 377,483 67,337 

Compensated Absences 1,936,315 1,358,996 999,971 2,295,340 1,185,378 

$ 94,971,374 $ 1,398,536 $ 2,577,737 $ 93,792,173 $ 2,730,504 

46



Note 6: 

Long-Term Liabilities (Continued) 

Tax Allocation Bonds 

2002 Tax Allocation Bonds: 

In April of 2002 the Redevelopment Agency of the City of Temecula issued $28,055,000 of 

2002 Tax Allocation Bonds consisting entirely of current interest bonds. The proceeds 

from the bonds were used to refund the Agency's Redevelopment Project No. I 1993 

Series A Tax Allocation Bonds; discharge an obligation pursuant to the County 

Pass-Through Agreement of the Agency to the County of Riverside, finance 

redevelopment activities within or of benefit to the Project Area and provide for the costs of 

issuing the 2002 Bonds, including the premium for the "financial guaranty insurance policy 

and Debt Service Reserve Surety Bond. A portion of the proceeds from the sale of the 

2002 Bonds, together with certain funds made available through the defeasance of the 

refunded bonds, were deposited in trust with an escrow agent to provide the remaining 

debt service payments on the refunded debt. The trust invests solely in direct obligations 

of the United States Government. The advanced refunding met the requirements of an insubstance 

defeasance. The Project 1993 bonds were removed from the RDA's long-term 

debt. The defeased debt was called on June 10, 2002. 

The 2002 Tax Allocation Bonds consist of: (l) $9,030,000 of Serial Bonds with annual 

interest rates ranging from 3.0% to 5.0%, maturing on August 1 of each year beginning in 

2003 through 2020 in amounts ranging from $95,000 to $755,000; (2) $6,485,000 of 

5.125% Term Bonds due August 1, 2027 and (3) $12,540,000 of 5.250% Term Bonds due 

August 1, 2036. 

The bonds are payable solely from and secured by a pledge of a portion of tax increment 

revenues. The future debt service requirements on these bonds are as follows: 

Year Ending 

June 30, Principal Interest Total 

2010 $ 465,000 $ 1,310,116 $ 1,775,116 

2011 485,000 1,291,116 1,776,116 

2012 505,000 1,271,064 1,776,064 

2013 525,000 1,248,899 1,773,899 

2014 545,000 1,225,096 1,770,096 

2015-2019 3,130,000 5,713,806 8,843,806 

2019-2024 3,980,000 4,839,684 8,819,684 

2024-2029 5,105,000 3,682,981 8,787,981 

2029-2034 6,580,000 2,168,250 8,748,250 

2034-2039 4,835,000 389,419 5,224,419 

$ 26,155,000 $ 23,140,431 $ 49,295,431 

2006 Tax Allocation Bonds Series A and Series B Payable: 

In December 2006, the Redevelopment Agency of the City of Temecula issued 

$18,105,000 2006 Tax Allocation Bonds Series A and $3,040,000 2006 Tax Allocation 

Bonds Series B. The proceeds of the bonds will be used to finance redevelopment 

activities within or of benefit to the Project Area, provide for the costs of issuing the 2006 

Bonds, including the premium for a financial guaranty insurance policy for the Series A 

Bonds and the Series A Debt Service Reserve Surety Bond and establish a reserve 

account for the Series B Bonds. 

47



Note 6: 


The 2006 Series A Bonds consist of: 1) $6,345,000 of Serial Bonds with annual interest 

rates ranging from 4.0% to 4.2%, maturing on August 1 of each year beginning in 2007 

through 2025 in amounts ranging from $235,000 to $460,000; 2) $2,600,000 of 4.25% 

Term Bonds due August 1, 2030, 3) $3,945,000 of 4.5% Term Bonds due August 1, 2036, 

and 4) $5,215,000 of4.5% Term Bonds due August 1, 2038. The outstanding balance of 

the Series A Bonds as of June 30, 2009, is $17,545,000. 

The 2006 Series B Bonds consist of: 1) $885,000 of Serial Bonds with annual interest 

rates ranging from 3.95% to 4.85%, maturing on December 15 of each year beginning in 

2010 through 2022 in amounts ranging from $50,000 to $90,000; 2) $390,000 of 5.0% 

Term Bonds due December 15, 2026, and 3) $1,765,000 of 5.0% Term Bonds due 

December 15, 2038. The outstanding balance of the Series B Bonds as of June 30, 2009, 

is $3,040,000. 


revenues. The future debt service requirements on the 2006 Tax Allocation Bonds Series 

A are as follows: 

Year Ending 


2010 $ 245,000 $ 751,936 $ 996,936 

2011 250,000 742,036 992,036 

2012 260,000 731,836 991,836 

2013 275,000 721,136 996,136 

2014 285,000 709,936 994,936 

2015-2019 1,615,000 3,364,681 4,979,681 

2019-2024 1,955,000 3,008,208 4,963,208 

2024-2029 2,395,000 2,558,326 4,953,326 

2029-2034 2,945,000 1,986,769 4,931,769 

2034-2039 7,320,000 1,086,300 8,406,300 

$ 17,545,000 $ 15,661,164 $ 33,206,164 


revenues. The future debt service requirements on the 2006 Tax Allocation Bonds Series 

B are as follows: 

Year Ending 


2010 $ - $ 147,681 $ 147,681 

2011 50,000 146,694 196,694 

2012 55,000 144,606 199,606 

2013 55,000 142,372 197,372 

2014 60,000 139,963 199,963 

2015-2019 335,000 657,601 992,601 

2019-2024 420,000 569,440 989,440 

2024-2029 525,000 453,125 978,125 

2029-2034 680,000 303,000 983,000 

2034-2039 860,000 111,750 971,750 

$ 3,040,000 $ 2,816,232 $ 5,856,232 

48



Note 6: 


2007 Tax Allocation Bonds Payable: 

In October 2007, the Redevelopment Agency of the City of Temecula issued $15,790,000 

of 2007 Tax Allocation Bonds consisting entirely of current interest bonds. The proceeds 

from the bonds were used to finance redevelopment activities within or of benefit to the 

Temecula Redevelopment Project No.1, including establishing an escrow fund for such 

purposes, establish a reserve subaccount for the 2007 Bonds, fund capitalized interest 

with respect to the portion of the 2007 Bonds proceeds deposited into the Escrow Fund, 

and provide for the cost of issuing the 2007 Bonds. 

The 2007 Tax Allocation Bonds consist of: 1) $4,385,000 of Serial Bonds with annual 

interest rates ranging from 4.1% to 5.25%, maturing on December 15 of each year 

beginning in 2010 through 2025 in amounts ranging from $195,000 to $380,000; 

2) $1,750,000 of 5.375% Term Bonds due December 15, 2029; 3) $5,615,000 of 5.5% 

Term Bonds due December 15, 2038; and 4) $4,040,000 of 5.625% Term Bonds due 

December 15, 2038. The outstanding balance of the Bonds as of June 30, 2009, is 

$15,790,000. 


revenues. The future debt service requirements on the 2007 Tax Allocation Bonds are as 

follows: 

Year Ending 


2010 $ - $ 841,388 $ 841,388 

2011 195,000 837,390 1,032,390 

2012 265,000 827,364 1,092,364 

2013 270,000 815,101 1,085,101 

2014 290,000 802,056 1,092,056 

2015-2019 1,655,000 3,781,807 5,436,807 

2019-2024 2,115,000 3,306,844 5,421,844 

2024-2029 2,745,000 2,668,141 5,413,141 

2029-2034 3,575,000 1,810,484 5,385,484 

2034-2039 4,680,000 675,028 5,355,028 

$ 15,790,000 $ 16,365,603 $ 32,155,603 

The City has pledged, as security for bonds it has issued, a portion of the tax increment 

revenue, including Low and Moderate Income Housing set-aside that it receives. These 

bonds were to provide financing for various capital projects, accomplish Low and 

Moderate Income Housing projects, and to refund previously issued bonds. The City has 

committed to appropriate each year, from these resources amounts sufficient to cover the 

principal and interest requirements on the debt. Total principal and interest remaining on 

the debt secured by tax increment is $120,513,430 with debt service requirements as 

indicated above. For the current year, the total tax increment revenue and the required 

20% Low and Moderate Income Housing set-aside recognized by the Agency was 

$16,251,896 and $4,063,121, respectively. 

49



Note 6: 


Certificates of Participation 

2001 Certificates of Participation 

In December of 2001, the Temecula Community Services District, working together with 

the Temecula Public Facilities Financing Corporation, issued $6,465,000 of Certificates of 

Participation. The proceeds from the bonds were used to refund the Temecula Community 

Services District's 1992 Certificates of Participation executed to finance the costs of 

construction of a county recreation center, finance a portion of the costs of construction of 

various recreational facilities, purchase a municipal bond debt service reserve insurance 

policy in lieu of cash funding a reserve fund and to pay certain expenses of the 

transaction. A portion of the proceeds of the Certificates were deposited in an Escrow 

Fund to provide the remaining debt service payments on the 1992 Certificates of 

Participation. The defeased debt was redeemed on October 1, 2002. 

The 2001 Certificates of Participation consist of: 1) $5,110,000 of certificates with annual 

interest rates ranging from 3.0% to 4.9% maturing on October 1 of each year beginning in 

2002 through 2018 in amounts ranging from $225,000 to $410,000; and 2) $1,355,000 of 

certificates with an interest rate of 5% due on October 1, 2021. 

Total Certificates of Participation outstanding at June 30, 2009, were $4,720,000. 

Future debt service requirements on these certificates are as follows: 

Year Ending 


2010 $ 275,000 $ 215,190 $ 490,190 

2011 285,000 203,848 488,848 

2012 300,000 191,630 491,630 

2013 310,000 178,435 488,435 

2014 325,000 164,303 489,303 

2015-2019 1,870,000 573,078 2,443,078 

2019-2024 1,355,000 103,875 1,458,875 

$ 4,720,000 $ 1,630,359 $ 6,350,359 

2008 Certificates of Participation 

In February 2008, the City of Temecula, working together with the Temecula Public 

Financing Corporation, issued $24,535,000 of Certificates of Participation. The 

Certificates are being executed and delivered to finance a portion of the costs of a new 

civic center facility, to fund the Reserve Fund for the Certificates in an amount equal to the 

remaining 50% of the Reserve Requirement, and to pay costs incurred in connection with 

executing and delivering the Certificates, including the premium for the municipal 

insurance policy. 

The 2008 Certificates of Participation consist of $12,390,000 of serial certificates and 

$12,145,000 in term certificates. The serial certificates have annual interest rates ranging 

from 2.4% to 5.0% maturing on September 1 of each year beginning in 2009 through 2028 

in amounts ranging from $430,000 to $915,000. The term certificates have an interest 

rate of 5.1% and are due September 1, 2038. 

Total Certificates of Participation outstanding at June 30, 2009, were $24,535,000. 

50



Note 6: 


Future debt service requirements on these certificates are as follows: 

Year Ending 


2010 $ 430,000 $ 1,145,098 $ 1,575,098 

2011 440,000 1,133,888 1,573,888 

2012 455,000 1,121,013 1,576,013 

2013 465,000 1,106,748 1,571,748 

2014 480,000 1,091,508 1,571,508 

2015-2019 2,675,000 5,175,634 7,850,634 

2019-2024 3,285,000 4,539,853 7,824,853 

2024-2029 4,160,000 3,636,975 7,796,975 

2029-2034 5,320,000 2,445,960 7,765,960 

2034-2039 6,825,000 904,613 7,729,613 

$ 24,535,000 $ 22,301,290 $ 46,836,290 

Note Payable 

On December 10, 1997, the City of Temecula and the Riverside County Transportation 

Commission (RCTC) entered into an agreement for an advance of Measure "A" local 

streets and roads funds in the principal amount of $5,000,000. The advance shall be used 

to finance a portion of the cost of improvement to the 1-15/Rancho California Road 

Interchange Project and the Widening of Highway 79 South from the 1-15 Interchange 

easterly to Avenida de Missions. Under the agreement, the City instructs the RCTC to 

apply the City's portion of any Local Streets and Roads funding which would otherwise be 

distributed to the City under Measure "A" to pay any due, but unpaid obligations of the City 

to RCTC. The advance shall accrue interest payable by the City at a rate of 4.75% per 

annum. A repayment schedule has been established to ensure that the advance is repaid 

prior to June 1, 2009. 

The final payment was made in fiscal year 2008-2009. The outstanding balance for the 

note payable as of June 30, 2009 is zero. 

Capital Lease Payable 

The assets acquired through capital leases are as follows: 

Governmental 

Activities 

Equipment $ 226,139 

Less: accumulated depreciation 

$ 

(167,956) 

58,183 

The future minimum lease obligations and the net present value of these minimum lease 

payments are as follows: 

Year Ending 

Governmental 

June 30, 

Activities 

2010 $ 70,648 

2011 34,038 

2012 11,346 

Total minimum lease payments 116,032 

Less: amounts representing interest (3,522) 

Present value of minimum lease payments $ 112,510 

51



Note 6: 


Claims Payable 

The claims liability of $377,483 is included in the internal service funds in the fund financial 

statements and is reported as a liability for governmental activities in the government-wide 

financial statements. 

Compensated Absences 

The outstanding liability for compensated absences earned at June 30, 2009, was 

$2,295,340. This liability represents the total unpaid vacation and compensation time 

earned by employees of the City in its governmental activities which is primarily liquidated 

from the general fund and internal service fund. 

Note 7: 

Insurance Programs 

The City is exposed to various risks of loss related to torts, theft, damage and destruction of 

assets, errors and omissions, road and walkway design hazards, vehicle accidents, and 

natural disasters for which the City maintains various insurance programs. The City has 

entered into contracts to supervise and administer these programs. 

General Liability 

The City is self-insured for General and Auto Liability claims up to $150,000. For amounts 

in excess of $150,000 and up to $10,000,000 per occurrence with an aggregate coverage 

of $10,000,000, the City has purchased insurance coverage. 

Workers Compensation 

The City maintains workers compensation insurance coverage through the Travelers 

Insurance Company. 

Settled claims have not exceeded any of the City's coverage amounts in any of the last 

three fiscal years and there were no reductions in the City's coverage during the year 

ended June 30, 2009. 

Liabilities are recorded when it is probable that a loss has occurred and the amount of the 

loss can be reasonably estimated. Liabilities include an amount for claims that have been 

incurred but not reported (IBNR). The liability for claims and judgments is reported in the 

appropriate Internal Service Fund. An amount for current claims payable is calculated 

based on the current year expenses and the remainder is shown as noncurrent claims 

payable. 

52



Note 7: 

Insurance Programs (Continued) 

Changes in claims payable for the years ended June 30, 2008 and June 30, 2009, are as 

follows: 

Liability as of June 30, 2007 $ 424,552 

Claims and changes in estimates during 

the year ended June 30, 2008 100,456 

Claim payments during the year ended June 30, 2008 (65,568) 

Liability as of June 30, 2008 459,440 

Claims and changes in estimates during 

the year ended June 30, 2009 39,540 

Claim payments during the year ended June 30, 2009 (121,497) 

Liability as of June 30, 2009 $ 377,483 

The ultimate amount of losses incurred through June 30, 2009, is dependent on future 

developments. Based upon information from the City Attorney, the City's claims 

administrators and others involved with the administration of the insurance programs, City 

management believes the accrual is adequate to cover such losses. 

Note 8: 

Public Employees Retirement System 

a. Plan Description: 

The City's defined benefit pension 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 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's annual financial report may 

be obtained from the CalPERS Executive Office: 400 P Street, Sacramento, CA 95814. 

b. Employee and Employer Contribution Obligations: 

The City makes the contributions required of City employees on their behalf and for their 

account. The rates are set by statute and therefore remain unchanged from year to year. 

The present rate for the City is 13.896%. The City is required to contribute the remaining 

amounts necessary to fund the benefits for its members, using the actuarial basis 

recommended by the PERS actuaries and actuarial consultants and adopted by the Board 

of Administration. 

c. Funding Status and Progress: 

For 2009, the City's actual and contributed annual pension cost was $3,201,970. The 

required contribution for the fiscal year 2009 was determined as part of the June 30, 2006 

actuarial valuation (most recent available) using the entry age normal actuarial cost 

method with the contributions determined as a percent of payroll. 

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 

53



Note 8: 

Public Employees Retirement System (Continued) 

ranging from 3.25% to 14.45% for miscellaneous members, (c) inflation of 3.0%, 

(d) payroll growth of 3.25%, and (e) an individual salary growth based on merit scale 

varying by duration of employment, coupled with an assumed annual inflation component 

of 3.0%, and an annual production growth of 0.25%. 

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 three year 

period. The Plans' initial unfunded liabilities are amortized over a closed period that 

depends on the Plans' date of entry into CalPERS. Subsequent plan amendments are 

amortized as a level percentage of pay over a closed 20 year period. Gains and losses 

that occur in the operation of the plan are amortized over an open 30 year period, which 

results in an amortization of 6% of unamortized gains and losses each year. If the Plans 

accrued liability exceeds the actuarial value of plan assets, then the amortization payment 

on the total unfunded liability may not be lower than the payment calculated over a 30 year 

amortization period. 

d. Trend Information: 

Three Year Trend Information for PERS 

Fiscal Annual Percentage Net 

Year Ending Pension of APC Pension 

June 30, Cost (APC) Contributed Obligation 

2007 $ 2,962,575 100% $ 

- 

2008 3,100,770 100% - 

2009 3,201,970 100% - 

e. Funded Status of the Plan: 

Schedule of Funding Progress for PERS 

Actuarial 

Accrued Underfunded UAAL as a 

Actuarial Actuarial Liability (Overfunded) % of 

Valuation Value of (AAL) AAL Funded Covered Covered 

Date Assets Entry Age (UAAL) Ratio Payroll Payroll 

( A ) ( B ) ( B-A ) ( A/B ) ( C ) [(B-A)/C] 

6/30/2005 18,687,800 24,985,767 6,297,967 74.80% 11,326,214 55.60% 

6/30/2006 22,973,422 30,011,128 7,037,706 76.5% 12,464,916 56.5% 

6/30/2007 27,953,389 36,159,212 8,205,823 77.3% 13,903,970 59.0% 

*latest information available 

Note 9: 

Deferred Compensation Plan 

Certain provisions of the Small Business Job Protection Act (the Act) affected Internal 

Revenue Code Section 457 plans by eliminating the requirement that Section 457 plan 

assets legally remain the assets of the sponsoring government. The Act requires that 

amounts deferred under a Section 457 plan be held in trust for the exclusive benefit of 

participating employees and not be accessible by the government or its creditors. 

The City has implemented GASB 32, "Accounting and Financial Reporting for Internal 

Revenue Code Section 457 Deferred Compensation Plans". The assets have been 

transferred into a trust, and are no longer subject to claims of the City's general creditors, 

and are no longer considered the assets of the City. The plan permits all City employees 

to defer a portion of their salary until future years. The amount deferred is not available to 

employees until termination, retirement, death or unavoidable emergency. 

54



Note 10: Defined Contribution Plan 

The City provides pension benefits for all its project (part time, temporary) employees 

through a defined contribution plan. The plan’s administrator is Nationwide 

Retirement/OBRA. In a defined contribution plan, benefits depend solely on amounts 

contributed to the plan plus investment earnings. All project employees are eligible to 

participate from the date of employment. Federal legislation requires contribution of at 

least 7.5 % to a retirement plan. The City contributes 3.75% of the employee’s salary as 

deferred compensation. Additionally, employees contribute 3.75% of salary towards this 

program on a pre-tax basis. The City’s contribution for each employee (and interest 

earned by the account) is fully vested immediately. 

For the year ended June 30, 2009, the City’s payroll covered by the plan was $1,283,855. 

The City made employer contributions of $48,145 (3.75% of current covered payroll), and 

employees contributed $49,044 (3.82% of current covered payroll). 

Note 11: Litigation, Commitments, and Contingent Liabilities 

Grant Audit Contingencies 

Under the terms of federal and state grants, periodic audits are required and certain costs 

may be questioned as not being appropriate expenditures under the terms of the grants. 

Such audits could lead to reimbursement to the grantor agencies. City management 

believes disallowances, if any, will be immaterial. 

Litigations 

The government is a defendant in various lawsuits. Although the outcome of these 

lawsuits is not presently determinable, in the opinion of the government’s counsel the 

resolution of these matters will not have a material adverse effect on the financial 

condition of the government. 

Note 12: Affordable Housing Grant and Loan Agreements 

The Temecula Redevelopment Agency sponsors a program to help first time home buyers 

afford a home in Temecula. This program is called the First Time Buyers Program. It 

provides a 3D-year second mortgage at 5% interest to qualified buyers. The maximum 

assistance is 20% of the purchase price plus Closing costs up to a maximum of $24,000. 

The loan is deferred for the first 5 years, and then fully amortized in years 6 to 30. The 

balance due the Temecula Redevelopment Agency at June 30, 2009, is $237,396. 

The Temecula Redevelopment Agency also sponsors a home improvement loan program. 

Under this program qualified residents may borrow up to $7,500 at 5% interest for up to 

five years. The loan is only made to fund certain repairs. The program contains provisions 

allowing the loans to be forgiven at the end of the five year term if those provisions are not 

breached. As of June 30, 2009, the Temecula Redevelopment Agency was owed 

$615,278 under this program. 

The Agency has a note receivable in the amount of $3,000,000 from D’Alto Partners LLC, 

a California Limited Liability Company (the LLC). The funds were loaned to the LLC under 

an Owner Participation Agreement (the OPA) under which the LLC was to develop and 

operate a mixed used development including providing affordable housing. 

The note is secured as second trust deed for a term of 55 years and will be forgiven if 

there are no violations of the covenants of the OPA. If there is a violation of covenants of 

the OPA, the Agency can require full payment of the principal. 

55



Note 12: Affordable Housing Grant and Loan Agreements (Continued) 

The Agency has a note receivable in the amount of $3,300,000 from D’Alto Partners LLC, 

a California Limited Liability Company (the LLC). The funds were loaned to the LLC under 

an Owner Participation Agreement (the OPA) under which the LLC was to develop and 

operate a mixed used development including providing affordable housing. The note is 

secured as second trust deed for a term of 55 years and will be forgiven if there are no 

violations of the covenants of the OPA. If there is a violation of covenants of the OPA, the 

Agency can require full payment of the principal. 

The Agency has a note receivable in the amount of $2,615,000 from 28500 Pujol Street, a 

California Limited Partnership (the Partnership). The funds were loaned to the Partnership 

under a Disposition and Development Agreement (the DDA) dated in 2003 under which 

the Partnership developed affordable housing. The note is due 55 years from the date of 

the note (August 1, 2004) with interest accrued at a rate of 3%. Fifty percent of the 

residual receipts as defined in the DDA for each calendar year are due March 15 of the 

following year. Any residual receipts are to be applied to the accrued interest. Any unpaid 

interest is added to the note. As of June 30, 2009, the total due from the Partnership 

amounted to $3,024,164 which included $409,164 of accrued interest. 

The Agency has a note receivable in the amount of $305,000 from Temecula Gardens, 

L.P., a California Limited Partnership (the LP). The funds were loaned to the LP under an 

Owner Participation Agreement (the OPA) under which the LP was to develop real 

property. The note is secured by a deed of trust encumbering the property with interest 

accrued at 1%. As of June 30, 2009, the total due from the Partnership amounted to 

$338,550 which included $33,550 of accrued interest. 

Note 13: Non Commitment Debt 

Multi-Family Housing Revenue Bonds 

On April 25, 1996, the Temecula Redevelopment Agency issued $2,427,500 of Multifamily 

Housing Revenue Bonds. The proceeds of the issuance were loaned to the Coachella 

Valley Housing Coalition (the "Borrower"), a California nonprofit public benefit corporation, 

to enable the Borrower to acquire and rehabilitate a 150-unit multifamily housing rental 

apartment development located in the City. A portion of the housing units is rented to 

persons of very low income. The Borrower makes loan payments to the trustee, an 

assignee of the Agency, of amounts sufficient to pay in full all principal and interest due on 

the bonds. The bonds are a special obligation of the Agency payable solely, from 

revenues of the Borrower and other funds pledged pursuant to the trust indenture. At 

June 30, 2009, these bonds had an outstanding balance of $1,124,250. 

Special Tax Refunding Bonds 

On June 11, 1998, the Community Facilities District No. 88-12 of the City of Temecula 

(Ynez Corridor) issued $18,690,000 of Special Tax Refunding Bonds. The 1998 Series A 

Bonds were issued to (1) refund the outstanding Community Facilities District No. 88-12 of 

the County of Riverside (Ynez Corridor) Series 1992 Special Tax Bonds, (2) fund a 

reserve fund for the 1998 Series A Bonds, and (3) pay the costs of issuing the 1998 Series 

A Bonds. The 1998 Series A Bonds are payable from the Special Tax revenues derived by 

the District from the levy of the Special Taxes, and are secured by a first pledge of all of 

the Special Tax revenues and monies deposited in certain funds. At June 30, 2009, these 

bonds had an outstanding balance of $10,585,000. 

56



Note 13: Non Commitment Debt (Continued) 

Special Tax Bonds 

Neither the faith and credit not the taxing power of the City or agency is pledged to the 

payment of the four bond issuances disclosed above. Therefore, the bonds are not 

included in the financial statements. 

In July 2003, the Temecula Public Financing Authority Community Facilities District 

No. 03-1 (Crowne Hill District) issued $12,155,000 in special tax bonds (Series A). The 

bonds were issued to finance the acquisition and construction of improvements in the 

District, pay interest on the bonds for a limited period, pay administrative costs and pay 

the costs of issuing the bonds. The bonds are payable from special tax revenues derived 

by the District from the levy of the special taxes and are secured by a first pledge of all the 

special tax revenues and monies deposited in certain funds. At June 30, 2009, these 


In August 2005, the Temecula Financing Authority Community Facilities District No. 03-1 

(Crowne Hill District) issued $3,865,000 in special tax bonds (Series B). The bonds were 

issued to finance the acquisition and construction of improvements in the District, pay 

administrative costs, pay the costs of issuing the bonds, and to make a deposit to the 

reserve fund for the bonds. The bonds are payable from special tax revenues derived by 

the District from the levy of the special taxes and are secured by a fist pledge of all the 

special tax revenues and monies deposited in certain funds. At June 30, 2009, these 


In September 2003, the City of Temecula Assessment District No. 03-4 (John Warner 

Road) issued $1,210,000 in special tax bonds. The bonds were issued to finance the cost 

of certain road and drainage improvements in the District, pay interest on the bonds for a 

limited period, pay administrative costs, pay the costs of issuing the bonds and make a 

deposit to the reserve fund for the bonds. The bonds are payable from special tax 

revenue derived by the District from the levy of the special taxes and are secured by a first 

pledge of all the special tax revenues and monies deposited in certain funds. At 

June 30, 2009, these bonds had an outstanding balance of $905,000. 

In December 2003, the Temecula Public Financing Authority Community Facilities District 

No. 03-3 (Wolf Creek District) issued $30,990,000 in special tax bonds. The bonds were 


interest on the bonds for a limited period, pay administrative costs and pay the cost of 

issuing the bonds. The bonds are payable from special tax revenues derived by the 

District from the levy of special taxes and are secured by a first pledge of all the special 

tax revenues and monies deposited in certain funds. At June 30, 2009, these bonds had 

an outstanding balance of $28,915,000. 

In August 2004, the Temecula Public Financing Authority Community Facilities District 

No. 03-06 (Harveston II) issued $4,845,000 in special tax bonds. The bonds were issued 

to finance the acquisition and construction of improvements in the District, pay interest on 

the bonds for a limited period, pay administrative costs and pay the cost of issuing the 

bonds. The bonds are payable from special tax revenues derived by the District from the 

levy of special taxes and are secured by a first pledge of all the special tax revenues and 

monies deposited in certain funds. At June 30, 2009, these bonds had an outstanding 

balance of $4,585,000. 

On April 27, 2006, the Temecula Public Financing Authority Community Facilities District 

No. 03-02 (Roripaugh Ranch) issued $51,250,000 in special tax bonds. The bonds were 


57



Note 13: Non Commitment Debt (Continued) 

interest on the bonds for a limited period, pay administrative costs and pay the cost of 

issuing the bonds. The bonds are payable from special tax revenues derived by the 

District from the levy of special taxes and are secured by a first pledge of all the special 

tax revenues and monies deposited in certain funds. At June 30, 2009, these bonds had 

an outstanding balance of $46,690,000. Additional information related to these bonds are 

presented in Note 15. 

In August 2007, the Temecula Public Financing Authority Community Facilities District 

No. 01-02 (Harveston) issued $14,470,000 2006 Special Tax Refunding Bonds, Series A 

and $3,075,000 2006 Special Tax Refunding Bonds, Subordinate Series B. The bonds 

were issued refund on September 1, 2006, the $17,310,000 aggregate outstanding 

principal amount of the Community Facilities District No. 01-02 (Harveston) Special Tax 

Bonds, 2002 Series A, pay the costs for issuing the 2006 Bonds, acquire a reserve surety 

for the Series A Bonds and establish a reserve for the Series B Bonds. The bonds are 

payable from special tax revenues derived by the District from the levy of special taxes are 

secured by a first pledge of all the special tax revenues and monies deposited in certain 

funds. At June 30, 2009, $13,960,000 2006 Series A and $2,975,000 2006 Series B 

bonds remain outstanding. 

Multi-Family Housing Revenue Note 

On July 17, 1998, the Temecula Redevelopment Agency borrowed $5,800,000 from 

Washington Mutual Bank, FA. The proceeds were loaned to Temecula Gardens LP (the 

"Borrower"), a California limited partnership, to assist the Borrower in the acquisition of 

land, acquisition and rehabilitation of an existing multi-family housing rental project 

consisting of 38 units and related appurtenant facilities located on such land, and 

construction of an additional 38 housing units and related appurtenant facilities located on 

such site. All of the housing units are to be rented exclusively to persons or families of 

very low or lower income. The financing has received a bond volume allocation from the 

California Debt Limit Advisory Commission. 

The loan is payable solely from project revenues (which include an annual Redevelopment 

Agency contribution). The loan is secured by a pledge of project revenues, and deed of 

trust encumbering Temecula Gardens, LPs leasehold interest in the project site. At 

June 30, 2009, these bonds had an outstanding balance of $5,050,230. 

The loan is not a general obligation of the Redevelopment Agency of the City. 

Note 14: Post Employment Benefits 

Plan Description 

The City provides other postemployment benefits (OPEB) through the California 

Employers’ Retiree Benefit 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 $800 for each eligible 

retiree and spouse towards health insurance. These benefits are provided per contract 

between the City and the employee associations. Separate financial statements for the 

CERBT may be obtained by writing to CalPERS at Lincoln Plaza North 400 Q Street, 

Sacramento, CA 95814 or by visiting the CalPERS website at www.calpers.ca.gov. 

58



Note 14: Post Employment Benefits (Continued) 

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. A contribution of $307,157 was made 

during the 2008-2009 fiscal year and was not included in the July 1, 2008, actuarial study. 

The purpose of the contributions was to cover the required contribution rate of 2.21% of 

annual covered payroll (annual payroll of active employees covered by the plan) and to 

prefund benefits. 

As a result, the City calculated and recorded a Net OPEB Asset, representing the 

difference between the Annual Required Contribution (ARC) and actual contributions, as 

presented in the following table: 

Annual required contribution (ARC) $ 307,157 

Adjustment to ARC 133 

Adjustment for interest (212,058) 

Annual OPEB cost 95,232 

Contributions made (307,157) 

(Decrease) increase in Net OPEB obligation (211,925) 

Net OPEB obligation (asset) June 30, 2008 (2,736,226) 

(Increase) decrease in Net OPEB asset - 

Net OPEB obligation (asset) June 30, 2009 $ (2,948,151) 

The contribution rate of 2.21% is based on the ARC of $307,157, 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 liabilities (or funding 

excess) over a thirty year period. 

Annual OPEB Costs and Net OPEB Obligation (Asset) 

For the fiscal year 2008-2009, the City’s annual OPEB cost (expense) of $307,157 was 

equal to the ARC. Since this is the second year of implementation, information on the 

annual OPEB cost, percentage of Annual OPEB cost contributed, and Net OPEB 

Obligation is only available for the current and prior fiscal year, as presented below: 

Fiscal Year 

Ending 

Annual 

OPEB Cost 

Actual Contribution 

(Net of 

Adjustments) 

Percentage of 

Annual OPEB 

Cost Contributed 

Net OPEB 

Obligation 

(Asset) 

6/30/2008 $ 550,899 $ 3,287,125 597% $ (2,736,226) 

6/30/2009 95,232 307,157 323% (2,948,151) 

Funded Status and Funding Progress 

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. 

59



Note 14: Post Employment Benefits (Continued) 

The schedule of funding progress below presents multiyear trend information about 

whether the actuarial value of plan assets is increasing or decreasing over time relative to 

the actuarial accrued liabilities for benefits. Only two years are presented as this is the 

second year of the plan. 

Unfunded 

UAAL as a 

Actuarial Actuarial Actuarial Actuarial Percent of 

Type of Valuation Value of Accrued Accrued Funded Covered Covered Interest Salary 

Valuation Date Assets Liabilities Liability Ratio Payroll Payroll Rate Scale 

Actual 7/1/2007 $ - $ 3,572,029 $ 3,572,029 0.0% $ 13,069,614 27.33% 7.75% 3.25% 

Actual 7/1/2008 3,286,043 3,629,275 343,232 90.5% 13,897,746 2.47% 7.75% 3.25% 

Actuarial Methods and Assumptions 

Note 15: Contingencies 

Projections of benefits for financial reporting purposes are based on the substantive plan 

(the plan as understood by the employer and the plan members) and include the types of 

benefits provided at the time of each valuation and the historical pattern of sharing of 

benefit costs between the employer and plan members to that point. The actuarial 

methods and assumptions used include techniques that are designed to reduce the effects 

of short-term volatility in the actuarial accrued liabilities and the actuarial value of assets, 

consistent with the long-term perspective of the calculations. 

In the July 1, 2008, actuarial valuation, the Individual Entry Age actuarial cost method was 

used. The actuarial assumptions include a 7.75% investment rate of return, which is a 

blended rate of the expected long-term investment return on plan assets and on the 

employer’s own investments calculated based on the funded level of the plan at the 

valuation date, and annual healthcare cost trend rate of 4.5%. The actuarial value of 

assets is set equal to the reported market value of assets. The UAAL is being amortized 

as a level percentage of payroll on an open basis. The remaining amortization period at 

June 30, 2009, was twenty-eight years. The number of active participants is 215. 

$51,250,000 Temecula Public Financing Authority Community Facilities District No. 03-02 

Roripaugh Ranch), 2006 Special Tax Bonds 

The master developer of the land within Temecula Public Financing Authority Community 

Facilities District No. 03-02 (Roripaugh Ranch) (the Community Facilities District) is Ashby 

USA, LLC, a California limited liability company, which, as of September 14, 2007, is the 

current owner of land that has approximately 81.33% of the estimated special tax liability 

with respect to the Community Facilities District. The special taxes to be levied in the 

Community Facilities District are the primary source of funds to repay the Bonds, In 

connection with the issuance of the Bonds, Ashby USA, LLC advised the Authority that it 

is managed by Ashby Development Company, Inc., a California corporation, one of the 

members of Ashby USA, LLC The City and Ashby USA, LLC entered into a Development 

Agreement for development of the Project in December 2002. 

Ashby USA, LLC also identified USA Investment Partners, LLC, a Nevada limited liability 

company as another member of Ashby USA, LLC. The Authority also has been advised by 

Ashby USA, LLC that USA Investment Partners, LLC made a loan to Ashby USA, LLC in 

the principal amount of $4,250,000 which is secured by a junior deed of trust on property 

within the Community Facilities District. The Authority has been further advised that USA 

60



Note 15: Contingencies (Continued) 

Investment Partners, LLC is also a member and 50% owner of Tanamera Homes, LLC, 

the 100% member of three limited liability companies that own land within the Community 

Facilities District that is responsible, as of June 1,2006, for approximately 15.52% of the 

estimate(l allocation of special tax liability with respect to the Community Facilities District; 

and that USA Investment Partners, LLC is a 95% member of the nonmember manager of 

those three entities. 

On May 26, 2006, the Authority was notified that Chapter II reorganization filings were 

made in the U.S. Bankruptcy Court, District of Nevada (Las Vegas) on April 13, 2006, for 

USA Commercial Mortgage Company and four related entities which are affiliates of or 

have common ownership with USA Investment Partners, LLC. A reorganization plan has 

been approved by the Bankruptcy Court. As of April 13, 2006 USA Investment Partners, 

LLC, however was not one of the entities for which Chapter 11 reorganization filings were 

made. On April 4, 2007, however, involuntary bankruptcy petitions were filed against USA 

Investment Partners n the U.S. Bankruptcy Court, District of Nevada (Las Vegas). 

Several matters concerning Ashby USA, LLC and the bankruptcies were not discussed in 

the Official Statement. Since the close of the Bonds, the Authority has not made any 

disbursements to Ashby USA from the proceeds of the Bonds. 

As of August 8, 2007, the City has been advised that Ashby USA has not made any 

payments on its loan with Amtrust Bank (formerly Ohio Savings Bank) and that a 

forbearance letter from Amtrust Bank to Ashby USA was in place. The City does not have 

any information as to the expiration date of such forbearance letter or the expectation of its 

being extended. As of October 6, 2008, however, neither the City nor the Authority has 

been notified of the initiation of foreclosure proceedings by AmTrust Bank. Another lender 

of Ashby USA on the Project, Bank of the West, foreclosed on approximately 88 acres of 

land within the Roripaugh Ranch Project owned by Ashby USA and on February 19, 2008, 

sold the 88 acres of the Roripaugh Ranch Project to Wingsweep Corporation at a 

foreclosure sale. 

Certain Planning Areas in Phase I of the Roripaugh Ranch Property in the Phase I area 

previously owned by the Tanamera/USA entities and Davidson Homes are now owned by 

either their lenders or parties who purchased from lenders. 

A letter of credit was posted by Ohio Savings Bank (with a confirmation from Citibank) in 

April 2006, and a new one posted in April 2007, in the amount of $6,679,002, which is 

equivalent to two years estimated expected annual Special Taxes. In March 2008, 

AmTrust Bank failed to renew the letter of credit. As a result the Authority drew the 

remaining amount in the letter of credit, approximately $3.4 million, and deposited it into 

the Reserve Fund for future payment of debt service. In March 2009, the Authority 

transferred $671,159 from the letter of credit reserve fund to the Special Tax Fund to pay 

debt service. The Current balance is approximately 2.8 million. 

As of August 14, 2008, the Authority has approximately $54,866,752 in the fund and 

accounts established under the Fiscal Agency Agreement. 

As of October 6, 2008, no lawsuits alleging violations of Securities and Exchange 

Commission Rule 10b-5 arising out of disclosure deficiencies for the Bonds have been 

served on the City or the Authority. In addition no claims for damages have been filed with 

the City or the Authority concerning the Bonds or the Project. On March 6, 2007, the 

Authority entered into Supplement No. 1 to the Acquisition Agreement with Ashby USA 

and the City entered into the Fourth Operating Memorandum to the Development 

Agreement with Ashby USA and Ohio Savings Bank (now AmTrust Bank). 

61



Note 15: Contingencies (Continued) 

Among other provisions, Supplement No. 1 to the Acquisition Agreement reaffirms Ashby 

USA obligation to indemnify the Authority, CFD and City against all claims or litigation by 

Bondholders, releases the Authority, CFD and City (and their respective officials and 

employees) from all claims up to and including March 6, 2007, by Ashby USA, and 

provides that in any future cause of action asserted by Ashby USA accruing after 

March 6, 2007, Ashby USA’s remedies are limited to mandate or specific performance. 

The assertion of damages against the Authority is not permitted. Similarly, the Fourth 

Operating memorandum, among its other provisions, releases the Authority, CFD and City 

(and their respective officials and employees) from all claims up to and including 

March 6, 2007, by Ashby USA and Ohio Savings Bank (now AmTrust), and provides that 

in any future cause of action asserted by Ashby USA or AmTrust accruing after 

March 6, 2007, Ahsby USA and AmTrust’s remedies are limited to mandate or specific 

performance. The assertion of damages against the Authority is not permitted. 

On May 13, 2008, the City Council and Authority Board directed the Staff to initiate the 

actions necessary for the City to construct the following public improvements for the 

Roripaugh Ranch Project (1) Butterfield State Road from La Serena to Murrieta Hot 

Springs Road; (2) Murrieta Hot Springs Road from Butterfield Stage Road to Pouroy 

Road; and (3) Calle Chapos/South Loop Road from Walcott to the Fire Station. The City 

staff has been working towards the construction of these roads. 

The Authority has issued 27 Releases, one supplement Release, two Continuing 

Disclosure Annual Report for fiscal year 2006-07, and two report of significant event 

describing in greater detail the events that have taken place with respect to the Project 

and the Bonds. All are public documents filed in Nationally Recognized Municipal 

Securities Information Repositories. 

Certain construction companies have filed stop notices and litigation related to the 

construction of public improvements for the Roripaugh Ranch Project. The stop notice 

from each contractor seeks payment of the amounts due from payments the Authority will 

make to Ashby USA from the proceeds of the $51,250,000 Temecula Public Financing 

Authority Community Facilities District No. 03-02 (Roripaugh Ranch), 2006 Special Tax 

Bonds pursuant to the Acquisition Agreement between Ashby USA and the Authority. 

Note 16: 

Fund Equity and Net Assets Restatements 

Beginning net assets has been restated as follows: 

Governmental 

Activities 

Net Assets as previously reported June 30, 2008 $ 707,538,022 

Increase for revenues not recorded in prior year 5,980 

Recognize loans receivable issued in prior years 9,882,036 

Net assets, as restated, June 30, 2008 $ 717,426,038 

62



Note 16: 

Fund Equity and Net Assets Restatements (Continued) 

Beginning fund balance has been restated as follows: 

Community Services 

District Fund - 

Special Revenue 

Fund Balances as previously reported June 30, 2008 $ 2,439,140 

Increase for revenues not recorded in prior year 5,980 

Fund Balances, as restated, June 30, 2008 $ 2,445,120 

Note 17: Subsequent Events 

SERAF Tax Increment Revenue Shift for fiscal year 2009-2010 and 2010-2011 

On July 23, 2009, the California Legislature passed SB 26, requiring a shift in tax 

increment revenues during fiscal years 2009-2010 and 2010-2011 to be deposited into 

the county “Supplemental” Educational Revenue Augmentation Fund (SERAF) to be 

distributed to meet the State’s Prop 98 obligations to schools. It is estimated that the 

Agency’s share of the SERAF shift for fiscal year 2009-2010 and 2010-2011 will amount 

to approximately $4,350,471 and $895,685, respectively. In October 2009, the California 

Redevelopment Association and its member agencies filed a legal action in an attempt to 

stop these amounts from having to be paid. As of the date of this report, no legal 

determination has been made by the courts on that action. 

Local Government Revenues Withheld by the State of California 

On July 24, 2009, the legislation approved the “borrowing” of up to 8 percent of the local 

property tax under Proposition 1A (2004). The City is a participant in the Proposition 1A 

Securitization Program offered by California Communities, a joint powers authority 

sponsored by the League of California Cities and California State Association of 

Counties. California Communities sold bonds on November 10, 2009 securitizing the 

future payments by the State and remit the proceeds of the bonds to the local 

governments who opt to participate in the program. The purchase price paid on the sale 

of the City’s receivable is 100% or $1,399,412. Participants of the Securitization program 

have no obligation on the bonds and no credit exposure to the State. Distribution of the 

proceeds to the participants is expected 50% on January 15, 2010 and 50% on 

May 3, 2010. 

63

SUPPLEMENTAL 

SCHEDULES 

65


NON-MAJOR GOVERNMENTAL FUNDS 

NON-MAJOR SPECIAL REVENUE FUNDS: Used to account for specific 

revenues that are legally restricted to expenditure for particular purposes. 

‣ GAS TAX: This fund is used to account for revenues apportioned under the 

Streets and Highways Code of the State of California. 

‣ STATE TRANSPORTATION: This fund is used to account for the City’s share of 

revenue received under AB 2928 and is to be used for traffic congestion relief as 

part of the State Traffic Congestion Relief Plan. 

‣ DEVELOPMENT IMPACT: This fund is used to account for the proceeds of 

developmental impact fees restricted for capital improvement projects. 

‣ COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG): This fund is used to 

account for grants received from the United States Department of Housing and 

Urban Development (HUD) through Riverside County. The grants are used for 

the development of a viable community by providing decent housing, a suitable 

living environment, and expanding economic opportunities, principally for 

persons of low and moderate income. 

‣ AB 2766: This fund is used to account for the City’s share of revenues received 

under AB 2766 to be used to reduce air pollution from motor vehicles pursuant to 

the California Clean Air Act of 1988. 

‣ AB 3229 COPS: This fund is used to account for the revenues and law 

enforcement expenditures of the AB 2339 COPS grant. 

‣ MEASURE “A”: This fund is used to account for the City’s share of the County 

of Riverside’s additional one-half percent sales tax allocation which is restricted 

for use on local streets and roads. 

‣ SUMMER YOUTH EMPLOYMENT PROGRAM: This fund is used to account for 

revenues received from the Federal Stimulus Program for the creation of 

employment opportunities for young adults. 

66


NON-MAJOR GOVERNMENTAL FUNDS - continued 

NON-MAJOR CAPTIAL PROJECTS FUNDS: Used to account for the 

acquisition and construction of major capital facilities. 

‣ HARVESTON COMMUNITY FACILITIES DISTRICT #01-2 A & B: This fund 

is used to account for bond proceeds which were used for capital 

improvements of the Harveston Community Facilities District #01-2 A & B. 

‣ CROWNE HILL COMMUNITY FACILITIES DISTRICT #03-1: This fund is 

used to account for bond proceeds which were used for capital improvements 

in Crowne Hill Community Facilities District #03-1. 

‣ WOLF CREEK COMMUNITY FACILITIES DISTRICT #03-3: This fund is 


in Wolf Creek Community Facilities District #03-3. 

‣ HARVESTON COMMUNITY FACILITIES DISTRICT #03-6: This fund is 


of the Harveston Community Facilities District #03-6. 

‣ REDEVELOPMENT AGENCY: This fund is used to account for the 

acquisition, relocation, demolition, and sale of land for those portions of the 

City designated in need of redevelopment. 

NON-MAJOR DEBT SERVICE FUNDS: Used to account for the accumulation of 

resources for and the payment of, principal and interest on long-term liabilities. 

‣ COMMUNITY SERVICES DISTRICT: This fund is used to account for the 

payment of interest and principal on outstanding certificates of participation. 

‣ DEBT SERVICE FUND: This fund is used to account for the payment of 

principal and interest on outstanding Certificates of Participation used to 

finance a portion of the costs of a new civic center facility. 

```````````````````````````` 

67


COMBINING BALANCE SHEET 

NONMAJOR GOVERNMENTAL FUNDS 

JUNE 30, 2009 


State 

Transportation 

Development 

Impact 

Gas Tax 

Assets: 

Pooled cash and investments $ - $ 1,462,056 $ 5,102,762 

Receivables: 

Accrued interest - 3,007 36,702 

Other receivables - - - 

Due from other governments 131,822 206,767 - 

Land held for resale - - - 


Cash and investments with fiscal agents - - - 

Total Assets $ 131,822 $ 1,671,830 $ 5,139,464 


Liabilities: 

Accounts payable $ - $ - $ 

- 

Accrued liabilities - - - 

Deposits payable - - 17,659 

Due to other funds 131,822 212,834 - 

Total Liabilities 131,822 212,834 17,659 


Reserved: 

Reserved for encumbrances - - 1,146,345 

Reserved for land held for resale - - - 

Unreserved: 

Designated for debt service - - - 

Designated for continuing appropriations - 1,458,996 3,975,460 

Total Fund Balances - 1,458,996 5,121,805 

Total Liabilities and Fund Balances $ 131,822 $ 1,671,830 $ 5,139,464 

68




JUNE 30, 2009 

(Continued) 


Assets: 


Receivables: 







Total Assets 

CDBG AB 2766 AB 3229 COPS 

$ - $ 394,045 $ 

- 

- 3,512 - 

- - - 

407,826 31,593 53,631 

- - - 

- - - 

$ 407,826 $ 429,150 $ 53,631 


Liabilities: 







Reserved: 



Unreserved: 

Designated for debt service 




$ - $ - $ 

- 

- - - 

- - - 

407,826 - 53,631 

407,826 - 53,631 

- - - 

- - - 

- - - 

- 429,150 - 

- 429,150 - 

$ 407,826 $ 429,150 $ 53,631 

69




JUNE 30, 2009 


Total 

Assets: 


Receivables: 







Total Assets 

Measure "A" 

Summer Youth 

Employment 

Program 

Special 

Revenue Funds 

$ 7,711,486 $ 2,271 $ 14,672,620 

58,304 37 101,562 

- - - 

648,209 34,227 1,514,075 

- - - 

- - - 

$ 8,417,999 $ 36,535 $ 16,288,257 


Liabilities: 







Reserved: 



Unreserved: 





$ - $ 1,175 $ 1,175 

- 15,307 15,307 

- - 17,659 

- - 806,113 

- 16,482 840,254 

1,346,809 - 2,493,154 

- - - 

- - - 

7,071,190 20,053 12,954,849 

8,417,999 20,053 15,448,003 

$ 8,417,999 $ 36,535 $ 16,288,257 

70




JUNE 30, 2009 

(Continued) 

Capital Projects Funds 

Assets: 


Receivables: 







Total Assets 

Harveston 

Community 

Facilities 

District #01-2A 

& B 

Crowne Hill 

Community 

Facilities 

District #03-1 

Wolf Creek 

CFD #03-3 

$ - $ - $ 

- 

- 20,082 16,973 

- - - 

- - - 

- - - 

- 5,362,500 3,675,944 

$ - $ 5,382,582 $ 3,692,917 


Liabilities: 







Reserved: 



Unreserved: 





$ - $ - $ 

- 

- - - 

- - - 

- - 2,402,096 

- - 2,402,096 

- - - 

- - - 

- - - 

- 5,382,582 1,290,821 

- 5,382,582 1,290,821 

$ - $ 5,382,582 $ 3,692,917 

71




JUNE 30, 2009 


Total 

Assets: 


Receivables: 







Total Assets 

Harveston 

Community 

Facilities 


Redevelopment 

Agency 

Capital Project 

Funds 

$ - $ 2,181,042 $ 2,181,042 

1,933 52,516 91,504 

- 207 207 

- - - 

- 98,484 98,484 

515,286 10,910,084 20,463,814 

$ 517,219 $ 13,242,333 $ 22,835,051 


Liabilities: 







Reserved: 



Unreserved: 





$ - $ 46,442 $ 46,442 

- 4,926 4,926 

- 65,000 65,000 

- 3,442,035 5,844,131 

- 3,558,403 5,960,499 

- 5,740,477 5,740,477 

- 98,484 98,484 

- - - 

517,219 3,844,969 11,035,591 

517,219 9,683,930 16,874,552 

$ 517,219 $ 13,242,333 $ 22,835,051 

72




JUNE 30, 2009 

(Continued) 

Debt Service Funds 

Total 

Assets: 


Receivables: 







Total Assets 

Community 

Services 

District 

Debt Service 

Fund 

Debt Service 

Funds 

$ 15,329 $ 40,018 $ 55,347 

100 3,288 3,388 

- - - 

- - - 

- - - 

- 813,480 813,480 

$ 15,429 $ 856,786 $ 872,215 


Liabilities: 







Reserved: 



Unreserved: 





$ - $ - $ 

- 

- - - 

- - - 

- - - 

- - - 

- - - 

- - - 

15,429 856,786 872,215 

- - - 

15,429 856,786 872,215 

$ 15,429 $ 856,786 $ 872,215 

73




JUNE 30, 2009 

Assets: 


Receivables: 







Total 

Governmental 

Funds 

$ 

16,909,009 

196,454 

207 

1,514,075 

98,484 

21,277,294 

Total Assets 

$ 

39,995,523 


Liabilities: 







Reserved: 



Unreserved: 





$ 

$ 

47,617 

20,233 

82,659 

6,650,244 

6,800,753 

8,233,631 

98,484 

872,215 

23,990,440 

33,194,770 

39,995,523 

74


COMBINING STATEMENT OF REVENUES, 





State 

Transportation 

Development 

Impact 

Gas Tax 

Revenues: 

Intergovernmental $ 1,602,003 $ 2,314,118 $ 

- 

Use of money and property 1,437 9,128 133,923 

Developer fees - - 3,977,338 

Miscellaneous - - - 

Total Revenues 1,603,440 2,323,246 4,111,261 

Expenditures: 

Current: 

General government - - - 

Community development - - 316,185 

Parks and recreation - - - 

Capital outlay - - 45,815 

Debt service: 

Principal retirement - - - 

Interest and fiscal charges - - - 

Total Expenditures - - 362,000 


Over (Under) Expenditures 1,603,440 2,323,246 3,749,261 


Transfers in - - - 

Transfers out (1,603,881) (864,250) (2,035,800) 


(Uses) (1,603,881) (864,250) (2,035,800) 

Net Change in Fund Balances (441) 1,458,996 1,713,461 

Fund Balances, Beginning of Year 441 - 3,408,344 

Fund Balances, End of Year $ - $ 1,458,996 $ 5,121,805 

75






(Continued) 


Revenues: 




Miscellaneous 


Expenditures: 

Current: 



Parks and recreation 


Debt service: 







Transfers in 

Transfers out 


(Uses) 


CDBG AB 2766 AB 3229 COPS 

$ 1,143,146 $ 117,106 $ 145,471 

- 13,205 - 

- - - 

- - - 

1,143,146 130,311 145,471 

45,672 - - 

- - - 

- - - 

- - - 

- - - 

- - - 

45,672 - - 

1,097,474 130,311 145,471 

- - - 

(1,097,474) (230,000) (145,912) 

(1,097,474) (230,000) (145,912) 

- (99,689) (441) 

Fund Balances, Beginning of Year 


- 528,839 441 

$ - $ 429,150 $ 

- 

76







Total 

Revenues: 




Miscellaneous 


Expenditures: 

Current: 





Debt service: 







Transfers in 

Transfers out 


(Uses) 


Measure "A" 

Summer Youth 

Employment 

Program 

Special 

Revenue Funds 

$ 2,828,513 $ 54,227 $ 8,204,584 

224,361 53 382,107 

- - 3,977,338 

- - - 

3,052,874 54,280 12,564,029 

- - 45,672 

- - 316,185 

- 34,227 34,227 

- - 45,815 

495,332 - 495,332 

23,529 - 23,529 

518,861 34,227 960,760 

2,534,013 20,053 11,603,269 

- - - 

(2,315,990) - (8,293,307) 

(2,315,990) - (8,293,307) 

218,023 20,053 3,309,962 



8,199,976 - 12,138,041 

$ 8,417,999 $ 20,053 $ 15,448,003 

77






(Continued) 

Revenues: 




Miscellaneous 


Expenditures: 

Current: 





Debt service: 







Transfers in 

Transfers out 


(Uses) 


Harveston 

Community 

Facilities 

District #01-2A 

& B 


Crowne Hill 

Community 

Facilities 


Wolf Creek 

CFD #03-3 

$ - $ - $ 

- 

1,093 115,533 124,837 

- - - 

- - - 

1,093 115,533 124,837 

- - - 

- - - 

- - - 

257,163 - 1,748,558 

- - - 

- - - 

257,163 - 1,748,558 

(256,070) 115,533 (1,623,721) 

- - - 

- - (4,639,411) 

- - (4,639,411) 

(256,070) 115,533 (6,263,132) 



256,070 5,267,049 7,553,953 

$ - $ 5,382,582 $ 1,290,821 

78







Total 

Revenues: 




Miscellaneous 


Expenditures: 

Current: 





Debt service: 







Transfers in 

Transfers out 


(Uses) 


Harveston 

Community 

Facilities 


Redevelopment 

Agency 

Capital 

Projects Funds 

$ - $ - $ 

- 

3,008 408,969 653,440 

- - - 

- 1,984 1,984 

3,008 410,953 655,424 

- - - 

- 661,438 661,438 

- - - 

- 63,649 2,069,370 

- - - 

- - - 

- 725,087 2,730,808 

3,008 (314,134) (2,075,384) 

- 525,000 525,000 

- (12,715,255) (17,354,666) 

- (12,190,255) (16,829,666) 

3,008 (12,504,389) (18,905,050) 



514,211 22,188,319 35,779,602 

$ 517,219 $ 9,683,930 $ 16,874,552 

79






(Continued) 

Debt Service Funds 

Total 

Revenues: 




Miscellaneous 


Expenditures: 

Current: 





Debt service: 







Transfers in 

Transfers out 


(Uses) 


Community 

Services 

District 

Debt Service 

Fund 

Debt Service 

Funds 

$ - $ - $ 

- 

379 20,202 20,581 

- - - 

- - - 

379 20,202 20,581 

- 3,425 3,425 

3,850 - 3,850 

- - - 

- - - 

265,000 - 265,000 

225,725 1,111,916 1,337,641 

494,575 1,115,341 1,609,916 

(494,196) (1,095,139) (1,589,335) 

497,025 1,111,916 1,608,941 

- - - 

497,025 1,111,916 1,608,941 

2,829 16,777 19,606 



12,600 840,009 852,609 

$ 15,429 $ 856,786 $ 872,215 

80






Revenues: 




Miscellaneous 


Expenditures: 

Current: 





Debt service: 







Transfers in 

Transfers out 


(Uses) 


Total 

Governmental 

Funds 

8,204,584 

1,056,128 

3,977,338 

1,984 

13,240,034 

49,097 

981,473 

34,227 

2,115,185 

760,332 

1,361,170 

5,301,484 

7,938,550 

2,133,941 

(25,647,973) 

(23,514,032) 

(15,575,482) 


48,770,252 


$ 

33,194,770 

81


BUDGETARY COMPARISON SCHEDULE 

GAS TAX 


Variance with 

Final Budget 



Revenues: 

Intergovernmental $ 1,777,500 $ 1,609,000 $ 1,602,003 $ (6,997) 

Use of money and property - 3,596 1,437 (2,159) 

Total Revenues 1,777,500 1,612,596 1,603,440 (9,156) 


Transfers out (1,777,500) (1,613,037) (1,603,881) 9,156 

Total Other Financing Sources (1,777,500) (1,613,037) (1,603,881) 9,156 

Net Change in Fund Balances - (441) (441) - 

Fund Balances, Beginning of Year 441 441 441 - 

Fund Balances, End of Year $ 441 $ - $ - $ 

- 

82



STATE TRANSPORTATION 


Variance with 

Final Budget 



Revenues: 

Intergovernmental $ - $ 2,354,108 $ 2,314,118 $ (39,990) 

Use of money and property - 19,962 9,128 (10,834) 

Total Revenues - 2,374,070 2,323,246 (50,824) 

Expenditures: 

Public works - 1,455,935 - 1,455,935 

Total Expenditures - 1,455,935 - 1,455,935 


Transfers out - (918,135) (864,250) 53,885 

Total Other Financing Sources - (918,135) (864,250) 53,885 

Net Change in Fund Balances - - 1,458,996 1,458,996 

Fund Balances, Beginning of Year - - - - 

Fund Balances, End of Year $ - $ - $ 1,458,996 $ 1,458,996 

83



DEVELOPMENT IMPACT 


Variance with 

Final Budget 



Revenues: 

Use of money and property $ - $ - $ 133,923 $ 133,923 

Developer participation 4,408,698 4,408,698 3,977,338 (431,360) 


Expenditures: 

Community development - 316,185 316,185 - 

Capital outlay 362,000 45,815 45,815 - 

Total Expenditures 362,000 362,000 362,000 - 


Transfers out (8,293,021) (7,171,576) (2,035,800) 5,135,776 

Total Other Financing Sources (8,293,021) (7,171,576) (2,035,800) 5,135,776 



Fund Balances, End of Year $ (837,979) $ 283,466 $ 5,121,805 $ 4,838,339 

84



CDBG 


Variance with 

Final Budget 



Revenues: 

Intergovernmental $ 2,493,839 $ 2,493,839 $ 1,143,146 $ (1,350,693) 

Total Revenues 2,493,839 2,493,839 1,143,146 (1,350,693) 

Expenditures: 

General government 59,267 59,267 45,672 13,595 

Total Expenditures 59,267 59,267 45,672 13,595 


Transfers out (2,434,572) (2,434,572) (1,097,474) 1,337,098 


Net Change in Fund Balances - - - - 


Fund Balances, End of Year $ - $ - $ - $ 

- 

85



AB 2766 


Variance with 

Final Budget 



Revenues: 

Intergovernmental $ 116,000 $ 116,000 $ 117,106 $ 1,106 

Use of money and property - - 13,205 13,205 

Total Revenues 116,000 116,000 130,311 14,311 


Transfers out (650,627) (640,627) (230,000) 410,627 

Total Other Financing Sources (650,627) (640,627) (230,000) 410,627 

Net Change in Fund Balances (534,627) (524,627) (99,689) 424,938 

Fund Balances, Beginning of Year 528,839 528,839 528,839 - 

Fund Balances, End of Year $ (5,788) $ 4,212 $ 429,150 $ 424,938 

86



AB 3229 COPS 


Variance with 

Final Budget 



Revenues: 

Intergovernmental $ 100,000 $ 167,132 $ 145,471 $ (21,661) 

Total Revenues 100,000 167,132 145,471 (21,661) 


Transfers out (100,000) (167,573) (145,912) 21,661 

Total Other Financing Sources (100,000) (167,573) (145,912) 21,661 

Net Change in Fund Balances - (441) (441) - 

Fund Balances, Beginning of Year 441 441 441 - 

Fund Balances, End of Year $ 441 $ - $ - $ 

- 

87



MEASURE "A" 


Variance with 

Final Budget 



Revenues: 

Intergovernmental $ 3,161,000 $ 3,161,000 $ 2,828,513 $ (332,487) 



Expenditures: 

Debt service: 

Principal retirement 540,363 540,363 495,332 45,031 

Interest and fiscal charges 25,037 25,037 23,529 1,508 



Transfers out (6,630,226) (7,305,226) (2,315,990) 4,989,236 


Net Change in Fund Balances (4,034,626) (4,709,626) 218,023 4,927,649 



88



SUMMER YOUTH EMPLOYMENT PROGRAM 


Variance with 

Final Budget 



Revenues: 

Intergovernmental $ - $ 432,500 $ 54,227 $ (378,273) 

Use of money and property - - 53 53 

Total Revenues - 432,500 54,280 (378,220) 

Expenditures: 

Parks and recreation - 432,500 34,227 398,273 

Total Expenditures - 432,500 34,227 398,273 

Net Change in Fund Balances - - 20,053 20,053 


Fund Balances, End of Year $ - $ - $ 20,053 $ 20,053 

89



CAPITAL OUTLAY 


Variance with 

Final Budget 



Revenues: 

Intergovernmental $ 9,490,471 $ 9,490,471 $ 4,594,146 $ (4,896,325) 


Miscellaneous 20,191,922 17,803,780 434,989 (17,368,791) 

Total Revenues 29,682,393 27,294,251 5,876,294 (21,417,957) 

Expenditures: 

Capital outlay 156,492,571 152,693,035 37,501,627 115,191,408 



Transfers in 115,506,231 84,310,713 22,471,411 (61,839,302) 

Total Other Financing Sources 115,506,231 84,310,713 22,471,411 (61,839,302) 

Net Change in Fund Balances (11,303,947) (41,088,071) (9,153,922) 31,934,149 


Fund Balances, End of Year $ 30,487,248 $ 703,124 $ 32,637,273 $ 31,934,149 

90



REDEVELOPMENT AGENCY - CAPITAL PROJECTS 


Variance with 

Final Budget 



Revenues: 

Use of money and property $ 73,000 $ 341,040 $ 408,969 $ 67,929 

Miscellaneous - - 1,984 1,984 

Total Revenues 73,000 341,040 410,953 69,913 

Expenditures: 

Community development 847,548 1,770,886 661,438 1,109,448 

Capital outlay 880,000 868,500 63,649 804,851 

Total Expenditures 1,727,548 2,639,386 725,087 1,914,299 


Transfers in 525,000 525,000 525,000 - 

Transfers out (19,325,049) (19,325,049) (12,715,255) 6,609,794 





91



COMMUNITY SERVICES DISTRICT - DEBT SERVICE 


Variance with 

Final Budget 



Revenues: 

Use of money and property $ - $ - $ 379 $ 379 

Total Revenues - - 379 379 

Expenditures: 

Community development 6,300 6,300 3,850 2,450 

Debt service: 

Principal retirement 265,000 265,000 265,000 - 

Interest and fiscal charges 225,725 225,725 225,725 - 



Transfers in 497,025 497,025 497,025 - 

Total Other Financing Sources 497,025 497,025 497,025 - 

Net Change in Fund Balances - - 2,829 2,829 


Fund Balances, End of Year $ 12,600 $ 12,600 $ 15,429 $ 2,829 

92



DEBT SERVICE FUND 


Variance with 

Final Budget 



Revenues: 

Use of money and property $ - $ 12,000 $ 20,202 $ 8,202 

Total Revenues - 12,000 20,202 8,202 

Expenditures: 

General government 3,000 3,500 3,425 75 

Debt service: 

Interest and fiscal charges 1,111,916 1,111,916 1,111,916 - 

Total Expenditures 1,114,916 1,115,416 1,115,341 75 


Transfers in 1,114,916 1,111,916 1,111,916 - 

Total Other Financing Sources 1,114,916 1,111,916 1,111,916 - 

Net Change in Fund Balances - 8,500 16,777 8,277 


Fund Balances, End of Year $ 840,009 $ 848,509 $ 856,786 $ 8,277 

93



REDEVELOPMENT AGENCY - DEBT SERVICE 


Variance with 

Final Budget 



Revenues: 

Taxes $ 14,412,800 $ 16,051,200 $ 16,252,014 $ 200,814 



Expenditures: 

Community development 165,682 196,950 196,364 586 

Capital outlay 11,000,000 11,000,000 11,000,000 - 

Debt service: 

Principal retirement 680,000 680,000 680,000 - 

Interest and fiscal charges 3,193,921 3,193,921 3,163,871 30,050 

Pass-through agreement payments 9,884,889 11,507,000 11,506,378 622 

Total Expenditures 24,924,492 26,577,871 26,546,613 31,258 


Transfers out (525,000) (3,050,355) (525,000) 2,525,355 

Total Other Financing Sources (525,000) (3,050,355) (525,000) 2,525,355 




94


INTERNAL SERVICE FUNDS 

Internal service funds are used to account for the financing of goods or services 

provided by one department to other departments of the City on a cost reimbursement 

basis. 

INSURANCE: This fund is used to finance and account for the City’s risk management 

and insurance programs. 

VEHICLES: This fund is used to account for the replacement of the City’s vehicles. 

INFORMATION SYSTEMS: This fund is used to account for the cost of providing 

electronic data processing equipment and software and central telephone services. 

SUPPORT SERVICES: This fund is used to account for the cost of providing central 

mailing and reprographic services. 

FACILITIES: This fund is used to account for the cost of City Hall and City 

Maintenance Facility operations and maintenance. 

95


COMBINING STATEMENT OF NET ASSETS 


JUNE 30, 2009 

Assets: 

Current: 

Insurance 

Governmental Activities - Internal Service Funds 

Vehicles 

Information 

Systems 

Support 

Services 

Cash and investments $ 1,077,395 $ 923,905 $ 777,024 $ 349,891 

Receivables: 

Accounts - - 6,573 3,503 

Notes and loans 3 - - - 


Prepaid costs 242,152 - - - 

Total Current Assets 1,327,906 929,264 787,907 355,474 

Noncurrent: 

Capital assets - net of accumulated depreciation - 1,256,491 398,123 73,025 

Total Noncurrent Assets - 1,256,491 398,123 73,025 

Total Assets 1,327,906 2,185,755 1,186,030 428,499 


Liabilities: 

Current: 

Accounts payable 36,653 145,573 60,202 22,500 

Accrued liabilities 2,603 - 63,715 5,794 

Deposits payable 10,000 - - - 

Accrued compensated absences 2,753 - 78,897 5,345 

Accrued claims and judgments 67,337 - - - 

Capital lease payable - - - 62,789 

Total Current Liabilities 119,346 145,573 202,814 96,428 

Noncurrent: 

Accrued compensated absences 368 - 79,799 6,639 

Accrued claims and judgments 310,146 - - - 

Capital lease payable - - - 49,721 

Total Noncurrent Liabilities 310,514 - 79,799 56,360 

Total Liabilities 429,860 145,573 282,613 152,788 

Net Assets: 

Invested in capital assets, net of related debt - 1,256,491 398,123 (39,485) 

Unrestricted 898,046 783,691 505,294 315,196 

Total Net Assets $ 898,046 $ 2,040,182 $ 903,417 $ 275,711 

96


COMBINING STATEMENT OF NET ASSETS 


JUNE 30, 2009 

Governmental Activities - Internal 

Service Funds 

Assets: 

Current: 

Cash and investments 

Receivables: 

Accounts 

Notes and loans 


Prepaid costs 

Total Current Assets 

Noncurrent: 

Capital assets - net of accumulated depreciation 

Total Noncurrent Assets 

Total Assets 

Facilities 

Totals 

$ 225,193 $ 3,353,408 

537 10,613 

- 3 

604 20,709 

- 242,152 

226,334 3,626,885 

- 1,727,639 

- 1,727,639 

226,334 5,354,524 


Liabilities: 

Current: 




Accrued compensated absences 

Accrued claims and judgments 

Capital lease payable 

Total Current Liabilities 

Noncurrent: 

Accrued compensated absences 

Accrued claims and judgments 

Capital lease payable 

Total Noncurrent Liabilities 


Net Assets: 

Invested in capital assets, net of related debt 

Unrestricted 

Total Net Assets 

20,726 285,654 

10,789 82,901 

- 10,000 

13,983 100,978 

- 67,337 

- 62,789 

45,498 609,659 

16,738 103,544 

- 310,146 

- 49,721 

16,738 463,411 

62,236 1,073,070 

- 1,615,129 

164,098 2,666,325 

$ 164,098 $ 4,281,454 

97


COMBINING STATEMENT OF REVENUES, EXPENSE 




Information Support 

Insurance Vehicles Systems Services 


Sales and service charges $ 275,374 $ 330,592 $ 2,102,622 $ 281,417 

Miscellaneous 11,678 - 4,286 - 

Total Operating Revenues 287,052 330,592 2,106,908 281,417 


Administration and general 54,129 - 1,403,397 201,873 

Depreciation expense - 314,515 227,712 30,386 

Operations and maintenance 647,253 - 805,919 63,355 

Total Operating Expenses 701,382 314,515 2,437,028 295,614 

Operating Income (Loss) (414,330) 16,077 (330,120) (14,197) 


Interest revenue 36,656 19,537 14,942 8,032 

Interest expense - - - (8,883) 

Gain (loss) on disposal of capital assets - 2,543 - - 


Revenues (Expenses) 36,656 22,080 14,942 (851) 

Income (Loss) Before Transfers (377,674) 38,157 (315,178) (15,048) 

Changes in Net Assets (377,674) 38,157 (315,178) (15,048) 

Net Assets: 


Beginning of Year 1,275,720 2,002,025 1,218,595 290,759 

End of Fiscal Year $ 898,046 $ 2,040,182 $ 903,417 $ 275,711 

98


COMBINING STATEMENT OF REVENUES, EXPENSE 





Service Funds 


Sales and service charges 

Miscellaneous 

Total Operating Revenues 


Administration and general 

Depreciation expense 

Operations and maintenance 

Total Operating Expenses 

Operating Income (Loss) 


Interest revenue 

Interest expense 

Gain (loss) on disposal of capital assets 


Revenues (Expenses) 

Income (Loss) Before Transfers 

Changes in Net Assets 

Facilities 

Totals 

$ 724,426 $ 3,714,431 

- 15,964 

724,426 3,730,395 

432,568 2,091,967 

- 572,613 

268,551 1,785,078 

701,119 4,449,658 

23,307 (719,263) 

2,381 81,548 

- (8,883) 

- 2,543 

2,381 75,208 

25,688 (644,055) 

25,688 (644,055) 

Net Assets: 

Beginning of Year 

End of Fiscal Year 

138,410 4,925,509 

$ 164,098 $ 4,281,454 

99


COMBINING STATEMENT OF CASH FLOWS 




Information Support 

Insurance Vehicles Systems Services 


Cash received from customers and users $ 287,911 $ 330,592 $ 2,103,905 $ 277,914 

Cash paid to suppliers for goods and services (698,871) 145,573 (783,554) (64,228) 

Cash paid to employees for services (63,916) - (1,344,678) (196,466) 

Net Cash Provided (Used) by Operating Activities (474,876) 476,165 (24,327) 17,220 



Acquisition and construction of capital assets - (278,835) (159,153) - 

Principal payments on capital lease - - - (41,875) 

Interest paid on capital debt - - - (8,883) 

Proceeds from sales of capital assets - 2,543 - - 


Capital and Related Financing Activities - (276,292) (159,153) (50,758) 


Interest received 44,732 22,394 17,479 10,060 


Investing Activities 44,870 22,394 17,479 10,060 


and Cash Equivalents (430,006) 222,267 (166,001) (23,478) 

Cash and Cash Equivalents at Beginning of Year 1,507,401 701,638 943,025 373,369 

Cash and Cash Equivalents at End of Year $ 1,077,395 $ 923,905 $ 777,024 $ 349,891 



Operating income (loss) $ (414,330) $ 16,077 $ (330,120) $ (14,197) 



Depreciation - 314,515 227,712 30,386 

(Increase) decrease in accounts receivable 859 - 1,148 (3,503) 

(Increase) decrease in prepaid expense 265 - - 1,199 

Increase (decrease) in accounts payable 30,074 145,573 22,365 (2,072) 

Increase (decrease) in accrued liabilities (2,089) - 28,768 2,248 

Increase (decrease) in deferred/unearned revenue - - (4,151) - 

Increase (decrease) in claims and judgments (81,957) - - - 

Increase (decrease) in compensated absences (7,698) - 29,951 3,159 

Total Adjustments (60,546) 460,088 305,793 31,417 


Operating Activities $ (474,876) $ 476,165 $ (24,327) $ 17,220 



100


COMBINING STATEMENT OF CASH FLOWS 




Service Funds 


Cash received from customers and users 

Cash paid to suppliers for goods and services 

Cash paid to employees for services 

Net Cash Provided (Used) by Operating Activities 



Acquisition and construction of capital assets 

Principal payments on capital lease 

Interest paid on capital debt 

Proceeds from sales of capital assets 


Capital and Related Financing Activities 


Interest received 


Investing Activities 


and Cash Equivalents 

Cash and Cash Equivalents at Beginning of Year 

Cash and Cash Equivalents at End of Year 



Operating income (loss) 



Depreciation 

(Increase) decrease in accounts receivable 

(Increase) decrease in prepaid expense 

Increase (decrease) in accounts payable 

Increase (decrease) in accrued liabilities 

Increase (decrease) in deferred/unearned revenue 

Increase (decrease) in claims and judgments 

Increase (decrease) in compensated absences 

Total Adjustments 


Operating Activities 

Facilities 

Totals 

$ 724,536 $ 3,724,858 

(272,639) (1,673,719) 

(421,949) (2,027,009) 

29,948 24,130 

- (437,988) 

- (41,875) 

- (8,883) 

- 2,543 

- (486,203) 

3,147 97,812 

3,147 97,950 

33,095 (364,123) 

192,098 3,717,531 

$ 225,193 $ 3,353,408 

$ 23,307 $ (719,263) 

- 572,613 

110 (1,386) 

- 1,464 

(4,088) 191,852 

2,901 31,828 

- (4,151) 

- (81,957) 

7,718 33,130 

6,641 743,393 

$ 29,948 $ 24,130 



101

102


AGENCY FUNDS 

Agency funds are used to account for assets held by the City, as an agent for 

individuals, private organizations and other governments. 

COMMUNITY FACILITIES DISTRICTS: This fund is used to account for monies held 

by the City, collected by special taxes to service debt issued by the districts. 

103



AGENCY FUND 

JUNE 30, 2009 

Community 

Facilities 

Districts 

Assets: 

Pooled cash and investments $ 2,514,520 

Receivables: 

Taxes 406,193 



Cash and investments with fiscal agents 18,244,202 

Total Assets $ 21,201,474 

Liabilities: 

Accounts payable $ 3,564 


Due to bondholders 21,124,903 

Total Liabilities $ 21,201,474 

104


COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES 

AGENCY FUND 


Community Facilities Districts 

Balance 

Balance 

July 1, 2008 Additions Deductions June 30, 2009 

Assets: 

Pooled cash and investments $ 2,782,685 $ 8,406,951 $ 8,675,116 $ 2,514,520 

Receivables: 

Accounts 15,013 105,496 120,509 - 

Taxes 464,751 3,901,277 3,959,835 406,193 



Cash and investments with fiscal agents 20,213,584 8,325,512 10,294,894 18,244,202 

Total Assets $ 23,579,094 $ 20,865,316 $ 23,242,936 $ 21,201,474 

Liabilities: 

Accounts payable $ 64,000 $ 8,374 $ 68,810 $ 3,564 

Accrued liabilities 152,451 8,284,036 8,363,480 73,007 

Due to bondholders 23,362,643 57,004,925 59,242,665 21,124,903 

Total Liabilities $ 23,579,094 $ 65,297,335 $ 67,674,955 $ 21,201,474 

105

106


CONTENTS OF STATISTICAL SECTION 

This part of the City of Temecula’s comprehensive annual financial report presents 

detailed information as a context for understanding what the information in the financial 

statements, note disclosures, and required supplementary information say about the 

government’s overall financial health. 

Page No. 

Description 

109 Locator Map 

110–117 Financial Trends – these schedules contain trend information to help the 

reader understand how the City’s financial performance and well-being 

have changed over time. 

119-123 Revenue Capacity – these schedules contain information to help the 

reader assess the City’s most significant local revenue source, the 

property tax. 

125-130 Debt Capacity – these schedules present information to help the reader 

assess the affordability of the City’s current levels of outstanding debt and 

the City’s ability to issue additional debt in the future. 

131-132 Demographic and Economic Information – these schedules offer 

demographic and economic indicators to help the reader understand the 

environment within which the City’s financial activities take place. 

133-137 Operating Information – these schedules 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. 

107

108


LOCATOR MAP 

Temecula and Southern California Region 

Source: City of Temecula – GIS Department 

109


NET ASSETS BY COMPONENT 

Last Ten Fiscal Years 

(accrual basis of accounting) 

FISCAL YEAR 

2003 (As 

Restated) 2004 2005 

2006 (As 

Restated) 2007 

2008 (As 



Invested in Capital Assets, Net of 

Related Debt $ 347,079,901 $ 374,473,165 $ 419,663,336 $ 479,842,533 $ 526,541,448 $ 542,917,967 $ 591,669,819 

Restricted 30,827,362 51,908,979 51,617,275 90,146,086 89,542,605 170,557,711 145,381,273 

Unrestricted 58,154,859 61,175,911 65,282,787 67,273,331 80,433,986 3,950,360 (8,259,676) 

Total Government Net Assets: $ 436,062,122 $ 487,558,055 $ 536,563,398 $ 637,261,950 $ 696,518,039 $ 717,426,038 $ 728,791,416 

The City of Temecula implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available. 

Source: City of Temecula Finance Department 

110


CHANGES IN NET ASSETS 


(accrual basis of accounting) 

FISCAL YEAR 

2003 (As 


2006 (As 


2008 (As 


Expenses: 


General Government $ 10,467,457 $ 10,533,697 $ 13,361,733 $ 16,652,124 $ 15,502,875 $ 18,335,093 $ 16,214,425 

Public Safety 5,785,987 16,391,452 17,725,984 19,933,791 22,196,822 23,378,627 23,240,092 

Community Development 21,229,997 19,357,162 19,739,726 27,957,309 32,389,210 28,440,339 21,846,282 


11,069,094 12,262,108 13,469,846 16,098,127 18,992,957 22,935,715 22,427,530 

Public Works 16,623,171 14,634,619 14,303,321 16,702,789 20,666,677 20,335,862 20,006,739 

Interest on Long Term Debt 1,828,551 1,843,768 1,826,142 1,813,290 2,311,241 3,604,580 4,620,424 

Total Governmental Activities Expenses: $ 67,004,257 $ 75,022,806 $ 80,426,752 $ 99,157,430 $ 112,059,782 $ 117,030,216 $ 108,355,492 



Charges for Services: 

General government $ 1,681,257 $ 2,411,945 $ 2,840,055 $ 2,831,657 $ 2,575,738 

Public safety 253,043 303,710 845,850 1,014,065 2,127,918 $ 2,100,665 $ 1,924,106 

Community development 4,438,334 33,160,653 10,109,318 11,771,908 9,336,514 7,050,214 7,248,403 

Community services 10,791,994 11,672,820 13,138,194 16,018,995 18,462,235 20,758,900 19,805,723 

Public works 1,508,373 1,422,133 1,476,936 1,676,651 1,784,676 1,836,289 1,625,756 

Operating Contributions and Grants 

Capital Contributions and Grants 

Total Governmental Activities 


8,112,599 3,425,519 3,792,646 4,829,167 4,923,439 5,398,302 8,703,467 

6,034,169 7,047,230 38,637,559 94,276,189 60,765,351 29,989,183 13,703,226 

$ 32,819,769 $ 59,444,010 $ 70,840,558 $132,418,632 $ 99,975,871 $ 67,133,553 $ 53,010,681 

Net Revenues (Expenses): $ (34,184,488) $ (15,578,796) $ (9,586,194) $ 33,261,202 $ (12,083,911) $ (49,896,663) $ (55,344,811) 

General Revenues and Other Changes in Net Assets: 


Taxes: 

Property Taxes $ 13,638,626 $ 14,957,314 $ 16,522,177 $ 25,715,762 $ 28,149,257 $ 32,117,022 $ 33,310,255 

Sales Taxes 21,572,199 25,392,314 27,802,830 31,788,183 30,069,312 27,185,873 23,087,328 

Other Taxes 15,736,806 24,822,653 11,515,934 7,693,365 8,090,565 7,608,109 6,972,165 

Use of Money and Property 876,967 275,588 1,575,590 2,040,463 4,197,019 3,547,717 3,055,857 

Other 1,506,052 1,626,860 1,175,006 199,577 833,847 345,941 284,584 

Transfers - - - - - - - 

Total Governmental Activities: $ 53,330,650 $ 67,074,729 $ 58,591,537 $ 67,437,350 $ 71,340,000 $ 70,804,662 $ 66,710,189 

Change in Net Assets: $ 19,146,162 $ 51,495,933 $ 49,005,343 $ 100,698,552 $ 59,256,089 $ 20,907,999 $ 11,365,378 



111


FUND BALANCES OF GOVERNMENTAL FUNDS 


(modified accrual basis of accounting) 

FISCAL YEAR 

2003 (As 


2006 (As 


2008 (As 


General Fund: 

Reserved $ 3,750,217 $ 4,149,359 $ 3,759,073 $ 2,673,686 $ 2,998,053 $ 2,021,686 $ 10,920,738 

Unreserved 22,960,702 22,407,861 27,942,122 35,316,108 40,934,281 42,701,654 38,301,328 

Total General Fund: $ 26,710,919 $ 26,557,220 $ 31,701,195 $ 37,989,794 $ 43,932,334 $ 44,723,340 $ 49,222,066 

All Other Governmental Funds: 

Reserved $ 24,007,917 $ 26,672,240 $ 29,005,837 $ 35,316,108 $ 32,741,964 $ 27,110,075 $ 55,860,978 

Unreserved, reported in: 

Special Revenue Funds 16,322,993 20,552,488 19,790,028 19,096,740 16,343,213 23,119,560 23,088,225 

Capital Projects Funds 20,353,065 36,973,954 32,639,764 66,024,597 88,582,057 102,273,113 59,018,488 

Debt Service Funds - - - - - 17,864,502 3,259,330 

Total All Other Governmental Funds: $ 60,683,975 $ 84,198,682 $ 81,435,629 $ 120,437,445 $ 137,667,234 $ 170,367,250 $ 141,227,021 



112


CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS 


(modified accrual basis of accounting) 

FISCAL YEAR 

2003 2004 2005 2006 2007 2008 2009 

Revenues: 

Taxes $ 40,064,779 $ 45,712,545 $ 48,305,857 $ 63,497,706 $ 64,313,342 $ 69,545,155 $ 66,169,119 

Licenses and Permits 3,969,113 4,491,787 4,786,930 5,486,534 5,884,122 1,901,811 2,178,784 

Intergovernmental 8,741,717 8,408,999 12,371,649 12,150,394 17,523,592 9,774,958 14,885,505 

Charges for Services 16,153,887 15,467,265 17,476,945 21,836,997 21,992,126 22,488,288 21,660,748 

Use of Money and Property 2,010,270 1,189,086 2,958,239 4,281,982 9,076,097 8,856,748 6,383,842 

Fine and Forfeitures 818,661 1,161,511 1,156,891 1,259,194 1,307,174 1,275,372 1,167,821 

Developer Fees - 6,566,539 3,993,762 6,878,014 6,134,458 1,981,523 3,977,338 

Contributions from Property Owners 5,150,000 27,199,401 3,825,457 46,965,547 - - - 

Miscellaneous 2,128,217 1,590,608 17,380,465 12,168,398 9,122,586 5,241,000 3,059,333 

Total Revenues: $ 79,036,644 $ 111,787,741 $ 112,256,195 $ 174,524,766 $ 135,353,497 $ 121,064,855 $ 119,482,490 

Expenditures: 

Current: 

General Governement $ 10,046,970 $ 11,200,092 $ 13,181,259 $ 16,220,837 $ 15,207,010 $ 19,795,561 $ 14,675,600 

Public Safety 13,614,872 16,234,799 17,716,631 19,745,813 21,950,928 23,118,556 22,843,755 

Community Development 8,795,223 12,699,522 11,332,992 16,215,070 10,460,887 10,337,789 9,972,429 

Community Services 10,464,386 11,445,162 12,506,028 15,185,649 17,788,867 20,069,314 19,463,230 

Public Works 5,609,746 6,544,834 6,033,610 7,660,252 8,602,982 9,196,416 8,290,764 

Capital Outlay 9,486,308 22,090,334 38,000,805 42,614,653 46,765,045 28,327,851 51,406,464 

Debt Service: 

Principal Retirement 694,887 752,355 791,585 1,116,135 1,159,211 1,527,447 1,440,332 

Interest and Fiscal Charges 1,513,977 1,843,464 1,828,177 1,814,687 2,390,216 4,343,274 4,525,041 

Passthroughs 5,978,382 6,479,524 6,981,873 8,661,255 8,778,831 10,581,710 11,506,378 

Total Expenditures: $ 66,204,751 $ 89,290,086 $ 108,372,960 $ 129,234,351 $ 133,103,977 $ 127,297,918 $ 144,123,993 

Excess (deficiency) of Revenues 

over (under) Expenditures $ 12,831,893 $ 22,497,655 $ 3,883,235 $ 45,290,415 $ 2,249,520 $ (6,233,063) $ (24,641,503) 

Other Financing Sources (uses): 

Transfers In $ 10,473,977 $ 18,740,173 $ 22,218,755 $ 28,502,739 $ 30,848,306 $ 14,029,999 $ 27,781,914 

Transfers Out (10,552,977) (17,972,251) (22,218,755) (28,502,739) (30,848,306) (14,029,999) (27,781,914) 

Capital Debt Issued - - - - 21,145,000 40,325,000 - 

Bond Discount - - - - (222,191) (606,895) - 

Sales of Property 228,309 95,431 - - - - - 

Total other financing 

sources (uses) $ 149,309 $ 863,353 $ - $ - $ 20,922,809 $ 39,718,105 $ 

- 

Net Change in Fund Balances $ 12,981,202 $ 23,361,008 $ 3,883,235 $ 45,290,415 $ 23,172,329 $ 33,485,042 $ (24,641,503) 

Debt service as a percentage of 

noncapital expenditures 3.45% 2.99% 3.17% 3.26% 3.95% 6.70% 5.34% 



113


GOVERNMENT-WIDE REVENUES 

LAST TEN FISCAL YEARS 

Program Revenues 

General Revenues 

Fiscal 

Year 

Charges for 

Services 

Operating 

Contributions 

and Grants 

Capital 

Contributions 

and Grants 

Taxes 

Use of Money 

and Property Other Total 

2003 $ 18,673,001 $ 8,112,599 $ 12,299,337 $ 44,682,463 $ 876,967 $ 1,506,052 $ 86,150,419 

2004 48,971,261 3,425,519 7,047,230 65,172,281 275,588 1,626,860 126,518,739 

2005 28,410,353 3,792,646 38,637,559 55,840,941 1,575,590 1,175,006 129,432,095 

2006 33,313,276 4,829,167 94,276,189 65,197,310 2,040,463 199,577 199,855,982 

2007 34,287,081 4,923,439 60,765,351 66,309,134 4,197,019 833,847 171,315,871 

2008 31,746,068 5,398,302 29,989,183 66,911,004 3,547,717 345,941 137,938,215 

2009 30,603,988 8,703,467 13,703,226 63,369,748 3,055,857 284,584 119,720,870 

The City of Temecula implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of 

GASB 34 is not available. 


114


GOVERNMENT-WIDE EXPENSES BY PROGRAM 


Fiscal Year 

General 

Government 

Public 

Safety 

Community 

Development 

Community 

Services 

Public Works 

Interest 

on Long Term 

Debt 

Total 

2003 $ 10,467,457 $ 5,785,987 $ 21,229,997 $ 11,069,094 $ 16,623,171 $ 1,828,551 $ 67,004,257 

2004 10,533,697 16,391,452 12,262,108 19,357,162 14,634,619 1,843,768 75,022,806 

2005 13,361,733 17,725,984 19,739,726 13,469,846 14,303,321 1,826,142 80,426,752 

2006 16,652,124 19,933,791 27,957,309 16,098,127 16,702,789 1,813,290 99,157,430 

2007 15,502,875 22,196,822 32,389,210 18,992,957 20,666,677 2,311,241 112,059,782 

2008 18,335,093 23,378,627 28,440,339 22,935,715 20,335,862 3,604,580 117,030,216 

2009 16,214,425 23,240,092 21,846,282 22,427,530 20,006,739 4,620,424 108,355,492 

The City of Temecula implemented GASB 34 for the fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 

is not available. 


115


GENERAL GOVERNMENTAL REVENUES BY SOURCE 


Fiscal 

Year 

Taxes 

Licenses and 

Permits 


Charges for 

Services 

Fines and 

Forfeitures 

Use of Money 

and Property Miscellaneous Total 

2000 27,411,887 3,418,465 11,045,122 14,408,815 423,140 2,698,614 721,325 60,127,368 

2001 32,789,666 3,605,034 7,504,046 12,437,598 458,199 3,210,811 1,402,736 61,408,090 

2002 36,694,852 3,689,537 9,254,875 13,894,895 567,586 2,240,770 1,720,841 68,063,356 

2003 40,064,779 3,969,113 8,741,717 16,153,887 818,661 7,160,270 2,128,217 79,036,644 

2004 45,712,545 4,491,787 8,408,999 15,467,265 1,161,511 1,189,086 35,356,548 111,787,741 

2005 48,305,857 4,786,930 12,371,649 17,476,945 1,156,891 2,958,239 25,199,684 112,256,195 

2006 63,497,706 5,486,534 12,150,394 21,836,997 1,259,194 4,281,982 66,011,959 174,524,766 

2007 64,313,342 5,884,122 17,523,592 22,397,014 1,438,949 14,673,892 9,122,586 135,353,497 

2008 69,551,135 1,901,811 9,774,958 22,488,288 1,275,372 8,856,748 7,222,523 121,070,835 

2009 66,169,119 2,178,784 14,885,505 21,660,748 1,167,821 6,383,842 7,036,671 119,482,490 

$180,000,000 

Miscellaneous 

$160,000,000 

$140,000,000 

$120,000,000 

$100,000,000 

$80,000,000 

$60,000,000 

$40,000,000 

$20,000,000 

Use of Money and 

Property 

Fines and Forfeitures 

Charges for Services 


Licenses and Permits 

Taxes 

$0 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 


116


GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION 


Fiscal General 

Community Community 

Year Government Public Safety Public Works Development Services Capital Outlay Debt Service Total 

2000 $ 5,817,503 $ 8,690,741 $ 3,807,780 $ 10,196,997 $ 7,165,782 $ 22,304,437 $ 2,698,382 $ 60,681,622 

2001 7,190,463 8,847,592 4,195,189 11,811,545 7,888,862 13,603,379 2,833,215 56,370,245 

2002 8,569,455 11,076,480 4,884,288 18,326,681 9,435,192 13,102,912 3,749,974 69,144,982 

2003 10,046,970 13,614,872 5,609,746 14,773,605 10,464,386 9,486,308 2,208,864 66,204,751 

2004 11,200,092 16,234,799 6,544,834 19,179,046 11,445,162 22,090,334 2,595,819 89,290,086 

2005 13,181,259 17,716,631 6,033,610 18,314,865 * 12,506,028 38,000,805 2,619,762 108,372,960 

2006 16,220,837 19,745,813 7,660,252 24,876,325 * 15,185,649 42,614,653 2,930,822 129,234,351 

2007 15,207,010 21,950,928 8,602,982 19,239,718 * 17,788,867 46,765,045 3,549,427 133,103,977 

2008 19,795,561 23,118,556 9,196,416 20,919,499 * 20,069,314 28,327,851 5,870,721 127,297,918 

2009 14,675,600 22,843,755 8,290,764 21,478,807 * 19,463,230 51,406,464 5,965,373 144,123,993 

$160,000,000 

$160,000,000 Debt Service 

$140,000,000 

$120,000,000 

$100,000,000 

000 000 

$80,000,000 

$60,000,000 




Public Works 

$40,000,000 

$20,000,000 

$0 

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 

Public Safety 

General Government 

Includes general, transportation and parks maintenance special revenue and debt service funds. 

*Includes Pass-through 


117

118


PROPERTY TAX RATES 

(per $100 assessed valuation) 

DIRECT AND OVERLAPPING GOVERNMENTS 


2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 

Basic County, City and School 

Levy 

1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 

Overlapping Rates: 

Various Water Districts 0.0895 0.0750 0.0611 0.0668 0.0482 0.0330 0.0330 0.0990 0.1049 0.0829 

School District 0.3397 0.3267 0.3237 0.3200 0.3700 0.3490 0.3162 0.2485 0.3325 0.4411 

Total 1.4292 1.4017 1.3848 1.3868 1.4182 1.3820 1.3492 1.3475 1.4374 1.5240 


119


PRINCIPAL SECURED PROPERTY OWNERS 


(Value in thousands) 

TAXPAYER 2000 2001 2002 2003 2004 

Advanced Cardiovascular System, Inc. $ 102,168 $ 102,168 $ 132,236 $ 145,662 $ 147,768 

International Rectifier Corporation 143,188 143,188 140,136 135,603 120,271 

Temecula Towne Center Associates 73,044 73,044 74,505 73,318 96,484 

Wolf Creek Maintenance Corporation 

Radnor Landgrant Rancho Cal 

Woodside Wolf Creek Inc. 

Lakha Alderwood Properties 36,736 

GMS Realty 38,027 38,027 38,788 39,564 

Hudson Respiratory Care, Inc. 34,982 34,982 35,796 28,559 

Kimco Palm Plaza 32,997 32,997 39,382 40,170 40,972 

Arden Realty Limited Partnership 26,632 26,632 

Knickerbocker Properties Inc. XX 23,365 23,365 23,833 42,080 

John W. Hoffee II Trust 21,803 21,803 

Harveston, LLC 29,304 

Starwood Wasserman Temecula 21,752 21,752 24,556 28,577 29,148 

STCA 28,697 

AEW LBA Acquisition 

Palomar Village Property 

LGA 7, Inc. 

BWIP International 

California Acacia Limited Partnership 26,776 

Dayton Hudson Corporation 

CTF 6 Vintage View LLC 

Solana Ridge 

Redhawk Towne Center 

Inland Western Temecula Common 

Costco Wholesale Corporation 22,606 

Wolf Creek Development 

MV Housing Partners III 

Standard Pacific Corporation 

FG Temecula Senior Apartments 

Macy's Department Stores Inc. 

Universe at Temecula Park 

Cape May Harveston Company Inc. 

Bascom 42200 Moraga Rd. Apartments 

MS Temecula II 24,548 

Portofino Development 28,500 29,070 29,651 

Top Ten Totals $ 517,958 $ 517,958 $ 560,338 $ 587,151 $ 585,807 

Total Assessed Valuation $ 3,827,394 $ 4,563,253 $ 5,201,010 $ 6,201,896 $ 6,931,696 


120


PRINCIPAL SECURED PROPERTY OWNERS (continued) 


(Value in thousands) 

TAXPAYER 2005 2006 2007 2008 2009 

Advanced Cardiovascular System, Inc. $ 152,155 $ 170,647 $ 175,216 $ 91,350 $ 112,462 

International Rectifier Corporation 128,471 113,487 109,180 102,636 106,016 

Temecula Towne Center Associates 98,285 94,312 96,198 98,122 100,084 

Wolf Creek Maintenance Corporation 85,001 

Radnor Landgrant Rancho Cal 

Woodside Wolf Creek Inc. 70,069 

Lakha Alderwood Properties 47,500 48,450 49,419 50,407 51,853 

GMS Realty 

Hudson Respiratory Care, Inc. 

Kimco Palm Plaza 41,738 42,573 43,424 

Arden Realty Limited Partnership 

Knickerbocker Properties Inc. XX 

John W. Hoffee II Trust 

Harveston, LLC 

Starwood Wasserman Temecula 29,692 

STCA 29,233 

AEW LBA Acquisition 

Palomar Village Property 

LGA 7, Inc. 

BWIP International 

California Acacia Limited Partnership 27,264 

Dayton Hudson Corporation 

CTF 6 Vintage View LLC 

Solana Ridge 25,544 

Redhawk Towne Center 37,508 38,258 

Inland Western Temecula Common 35,088 52,567 53,618 80,717 

Costco Wholesale Corporation 

Wolf Creek Development 34,098 

MV Housing Partners III 33,571 

Standard Pacific Corporation 57,348 68,723 

FG Temecula Senior Apartments 46,750 

Macy's Department Stores Inc. 43,343 36,958 

Universe at Temecula Park 53,442 54,690 

Cape May Harveston Company Inc. 47,528 48,473 

Bascom 42200 Moraga Rd. Apartments 32,251 

MS Temecula II 

Portofino Development 30,428 31,049 

Top Ten Totals $ 610,310 $ 690,366 $ 702,000 $ 597,794 $ 706,726 

Total Assessed Valuation $ 7,795,288 $ 10,328,097 $ 11,836,051 $ 13,434,244 $ 13,435,853 


121


PROPERTY TAX LEVIES AND COLLECTIONS 


Collected within the 

Fiscal Year of the Levy 

Total Collections to Date 

Fiscal Year 

Ended June 30 

Taxes Levied for 

the Fiscal Year 

Amount 

Percentage 

of Levy 

Collections in 

Subsequent Years 

Amount 

Percentage of 

Levy 

2000 $ 1,468,721 $ 1,460,204 99.42% $ 51,566 $ 1,511,770 102.93% 

2001 1,893,848 1,810,665 95.61% 75,686 1,886,351 99.60% 

2002 2,145,106 2,193,463 102.25% 99,460 2,292,923 106.89% 

2003 2,483,384 2,489,032 100.23% 105,076 2,594,107 104.46% 

2004 2,923,196 2,824,269 96.62% 109,537 2,933,806 100.36% 

2005 3,317,949 3,193,730 96.26% 120,996 3,314,726 99.90% 

2006 4,579,225 4,349,076 94.97% 251,045 4,600,121 100.46% 

2007 5,334,622 4,751,074 89.06% 475,692 5,226,766 97.98% 

2008 6,014,790 5,243,899 87.18% 669,398 5,913,297 98.31% 

2009 5,881,484 5,204,872 88.50% 543,382 5,748,254 97.73% 

NOTE: Since the fiscal year ended June 30, 1994, the City of Temecula has received its property tax revenues in accordance with the Teeter 

Plan. Under the Teeter Plan, the City is paid in full each year for the actual amount of property taxes levied, regardless of the amount of 

delinquencies. As delinquent property taxes are collected, they are kept by the County including any penalties and interest. After 1994, any 

differences between the total tax levy and total collections are due to tax roll adjustments made during the year. 

Source: Riverside County Auditor-Controller and City of Temecula Finance Department 

122


ASSESSED AND ESTIMATED ACTUAL VALUE OF 

TAXABLE PROPERTY (values in thousands) 


Fiscal 

Year 

Total Secured 

and 

Unsecured 

Exemptions 

Veteran 

Church, etc. 

Net Assessed 

Value 

Exemptions 

Homeowners 

Net Total 

Assessed Value 

Estimated 

Actual Value 

2000 3,827,394 (25,597) 3,801,797 (61,464) 3,740,333 3,740,333 

2001 4,563,253 (29,666) 4,533,587 (64,372) 4,469,215 4,469,215 

2002 5,201,010 (33,360) 5,167,650 (68,938) 5,098,712 5,098,712 

2003 6,201,896 (30,010) 6,171,886 (82,926) 6,088,960 6,088,960 

2004 6,931,291 (43,142) 6,888,149 (92,362) 6,795,787 6,795,787 

2005 7,794,688 (53,240) 7,741,448 (94,237) 7,647,211 7,647,211 

2006 10,328,097 (51,063) 10,277,034 (108,654) 10,168,380 10,168,380 

2007 11,836,051 (75,082) 11,760,969 (111,392) 11,649,577 11,649,577 

2008 13,434,244 (88,037) 13,346,207 (113,341) 13,232,866 13,232,866 

2009 13,537,220 (101,367) 13,435,853 (114,841) 13,321,012 13,321,012 

Source: Riverside County Assessor's Office 

123

124


SCHEDULE OF DIRECT AND OVERLAPPING DEBT 

2008-09 Assessed Valuation: .......................... $13,473,004,252 

Redevelopment Incremental Valuation: ............. 1,983,543,657 

Adjusted Assessed Valuation: ........................ $11,489,460,595 

DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable (1) Debt 6/30/09 

Metropolitan Water District ........................................................................................... 0.623% $1,828,038 

Eastern Municipal Water District, I.D. No. U-8 ............................................................ 84.384 4,150,005 

Temecula Unified School District ................................................................................. 67.616 25,088,917 

Rancho California Water District Community Facilities District No. 88-3 ................... 100. 3,505,000 

City of Temecula Community Services District Certificates of Participation ............... 100. 4,720,000 

Eastern Municipal Water District Community Facilities District No. 2002-04 ............. 100. 810,000 

Eastern Municipal Water District Community Facilities District No. 2002-08 ............. 100. 4,800,000 

Eastern Municipal Water District Community Facilities District No. 2005-38 ............. 100. 855,000 

Temecula Community Facilities District No. 88-12 ...................................................... 100. 10,585,000 

Temecula Public Financing Authority Community Facilities District No. 01-2 ............ 100. 16,935,000 





Temecula Valley Unified School District CFD No. 89-1 .............................................. 100. 15,340,000 

Temecula Valley Unified School District CFD No. 2002-1, I.A. No. 1 ........................ 57.435 4,049,168 

Temecula Valley Unified School District CFD No. 2002-2 .......................................... 100. 12,845,000 

Temecula Valley Unified School District CFD No.2004-1, I.A. A ............................... 100. 12,540,000 

Temecula Valley Unified School District CFD No. 2005-1 .......................................... 21.484 2,715,578 

County 1915 Act Bonds (Estimated) ............................................................................. 52.711-66.859 18,518,733 

City of Temecula 1915 Act Bonds................................................................................. 100. 905,000 

TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $238,315,439 

OVERLAPPING GENERAL FUND OBLIGATION DEBT: 

Riverside County General Fund Obligations ................................................................. 6.642% $ 50,531,981 

Riverside County Pension Obligations .......................................................................... 6.642 25,378,418 

Riverside County Board of Education Certificates of Participation .............................. 6.642 549,293 

Mt. San Jacinto Community College District General Fund Obligations ...................... 16.846 2,142,811 

City of Temecula Certificates of Participations ............................................................. 100. 24,535,000 

Valley-Wide Recreation and Park District Certificates of Participation ........................ 0.040 290 

TOTAL GROSS OVERLAPPING GENERAL FUND OBLIGATION DEBT ..................................... $103,137,793 

Less: Riverside County Self-Supporting Obligations ....................................................................... 1,086,258 

TOTAL NET OVERLAPPING GENERAL FUND OBLIGATION DEBT .......................................... $102,051,535 

GROSS COMBINED TOTAL DEBT .................................................................................................... $341,453,232 (2) 

NET COMBINED TOTAL DEBT ......................................................................................................... $340,366,974 

(1) Percentage of overlapping agency’s assessed valuation located within boundaries of the City. 

(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease 

obligations. 

Ratios to 2008-09 Assessed Valuation: 

Direct Debt ($4,720,000)................................................. 0.04% 

Total Direct and Overlapping Tax and Assessment Debt 1.77% 

Ratios to Adjusted Assessed Valuation: 

Combined Direct Debt ($29,255,000) ............................. 0.25% 

Gross Combined Total Debt ............................................ 2.97% 

Net Combined Total Debt ................................................ 2.96% 

STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/08: $0 

Source: California Municipal Statistics, Inc. 125


RATIO OF OUTSTANDING DEBT BY TYPE 


Fiscal Year 

Ended June 30 

Tax 

Allocation 

Bonds 

Total 

Governmental 

Activities 

Percentage 

of Personal 

Family 

Income 

Debt 

per 

Capita 

Certificates of 

Participation 

Notes payable 

2000 4,170,000 13,205,000 4,056,569 21,431,569 0.28% 398 

2001 3,960,000 12,480,000 3,674,532 20,114,532 0.30% 324 

2002 6,465,000 28,055,000 3,276,952 37,796,952 0.17% 520 

2003 6,185,000 28,055,000 2,862,065 37,102,065 0.18% 495 

2004 5,960,000 27,960,000 2,429,710 36,349,710 0.18% 469 

2005 5,730,000 27,850,000 1,978,125 35,558,125 0.19% 437 

2006 5,490,000 27,445,000 1,506,990 34,441,990 0.20% 371 

2007 5,240,000 48,175,000 1,012,779 54,427,779 0.16% 556 

2008 29,520,000 63,210,000 495,332 93,225,332 0.10% 923 

2009 29,255,000 62,530,000 - 91,785,000 0.10% 895 

Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 


126


RATIO OF GENERAL BONDED DEBT 


Fiscal Year 

Ended June 30 

General 

Obligation 

Bonds 

Percent of 

Assessed Value 

(1) Per Capita 

Certificates of 

Participation 

Tax Allocation 

Bonds 

Total 

2000 - 4,170,000 13,205,000 17,375,000 0.46% 323 

2001 - 3,960,000 12,480,000 16,440,000 0.37% 265 

2002 - 6,465,000 28,055,000 34,520,000 0.68% 475 

2003 - 6,185,000 28,055,000 34,240,000 0.56% 456 

2004 - 5,960,000 27,960,000 33,920,000 0.50% 438 

2005 - 5,730,000 27,850,000 33,580,000 0.44% 413 

2006 - 5,490,000 27,445,000 32,935,000 0.32% 354 

2007 - 5,240,000 48,175,000 53,415,000 0.46% 545 

2008 - 29,520,000 63,210,000 92,730,000 0.70% 918 

2009 - 29,255,000 62,530,000 91,785,000 0.68% 895 

(1) Assessed value has been used because the actual value of taxable property is not readily available in the State of California. 


127


LEGAL DEBT MARGIN 

Last Ten Fiscal Years (values in thousands) 

FISCAL YEAR ENDED JUNE 30 

2000 2001 2002 2003 2004 

Net Assessed Value $ 3,740,333 $4,469,215 $ 5,098,712 $ 6,088,960 $ 6,795,787 

Plus Exempt Property 61,464 64,372 68,938 82,926 92,362 

Total Assessed Value 3,801,797 4,533,587 5,167,650 6,171,886 6,888,149 

Debt Limit – 15% of total assessed value 570,270 680,038 775,148 925,783 1,033,222 

Amount of Debt Applicable to Debt Limit - - - - - 

Less Assets in Debt Service Funds Available for 

Payment of Principal 

Total Amount of Debt Applicable to Debt Limit 

- - - - 

- 

Legal Debt Margin (Debt Limit - Applicable Debt) $ 570,270 $ 680,038 $ 775,148 $ 925,783 $ 1,033,222 


128


LEGAL DEBT MARGIN (continued) 

Last Ten Fiscal Years (values in thousands) 

FISCAL YEAR ENDED JUNE 30 

2005 2006 2007 2008 2009 

Net Assessed Value $7,647,211 $ 10,168,380 $ 11,649,577 $ 13,232,866 $ 13,321,012 

Plus Exempt Property 94,237 108,654 111,392 113,341 114,841 

Total Assessed Value 7,741,448 10,277,034 11,760,969 13,346,207 13,435,853 

Debt Limit – 15% of total assessed value 1,161,217 1,541,555 1,764,145 2,001,931 2,015,378 

Amount of Debt Applicable to Debt Limit - - - 24,535 24,535 

Less Assets in Debt Service Funds Available for 

Payment of Principal (840) (857) 

Total Amount of Debt Applicable to Debt Limit - - - 23,695 23,678 

Legal Debt Margin (Debt Limit - Applicable Debt) $1,161,217 $ 1,541,555 $ 1,764,145 $ 1,978,236 $ 1,991,700 


129


PLEDGED REVENUE COVERAGE 


Fiscal 

Year 

Ended 

June 30 

Tax 

Increment Principal Interest Coverage 

Tax Allocation 

Bonds 

2000 7,075,097 690,000 942,442 4.33 13,205,000 

2001 9,300,499 725,000 1,045,705 5.25 12,480,000 

2002 10,626,552 765,000 755,072 6.99 28,055,000 

2003 10,949,850 - 1,077,920 10.16 28,055,000 

2004 11,896,579 95,000 1,440,939 7.75 27,960,000 

2005 12,663,850 110,000 1,451,440 8.11 27,850,000 

2006 15,458,291 405,000 1,466,116 8.26 27,445,000 

2007 15,492,144 415,000 1,649,139 7.51 48,175,000 

2008 18,741,727 755,000 2,897,307 5.13 63,210,000 

2009 20,315,017 680,000 3,078,921 5.40 62,530,000 


130


DEMOGRAPHIC AND ECONOMIC STATISTICS 

Last Ten Calendar Years 

Calendar Year 

Population 

(1) 

Personal 

Family 

Income (2) 

Per Capita 

Personal 

Family Income 

Unemployment 

Rate (3) 

2000 53,791 $ 60,212 

89.34% N/A 

2001 62,107 60,212 103.15% 3.53% 

2002 72,715 64,400 112.91% 4.03% 

2003 75,014 66,270 113.19% 4.43% 

2004 77,460 66,270 116.89% 4.23% 

2005 81,397 68,051 119.61% 3.78% 

2006 92,923 68,051 136.55% 3.41% 

2007 97,935 85,914 113.99% 3.58% 

2008 101,057 90,946 111.12% 4.66% 

2009 102,604 95,692 107.22% 7.80% 

(1) State Department of Finance 

(2) Husing Reports and Claritas, Inc. 

(3) State of California, Employment Development Department 

N/A = not available 


131


LARGEST EMPLOYERS BY NUMBER OF EMPLOYEES 

Current Year and Nine Years Ago 

42835 44151 

NAME OF EMPLOYER 

Number of 

Employees 

2009 


Total 

Employment 

Number of 

Employees 

2000 


Total 

Employment 

Abbott Laboratories f/k/a Guidant Corporation 3,229 7.54% 2,600 5.89% 

Temecula Valley Unified School District 2,788 6.51% 1,760 3.99% 

Professional Hospital Supply 1,200 2.80% 460 1.04% 

International Rectifier 560 1.31% 653 1.48% 

Macy's 327 0.76% - 0.00% 

Costco Wholesale Corporation 335 0.78% 370 0.84% 

Chemi-Con International 280 0.65% 104 0.24% 

Norm Reeves Auto Group 205 0.48% 186 0.42% 

Milgard Manufacturing 200 0.47% 250 0.57% 

Channell Commercial Corporation 200 0.47% 450 1.02% 

Sears 170 0.40% 178 0.40% 

Plant Equipment, Inc. 201 0.47% 259 0.59% 

City of Temecula 197 0.46% 214 0.48% 

Dayton Hudson Corporation/Target 160 0.37% 181 0.41% 

JC Penney Company 165 0.39% 163 0.37% 

Toyota of Temecula Valley 140 0.33% 101 0.23% 

Stater Brothers 175 0.41% 151 0.34% 

Home Depot 132 0.31% - 0.00% 

Opto 22, Inc. 180 0.42% 260 0.59% 

Southwest Traders 250 0.58% 110 0.25% 

FFF Enterprises Inc. 189 0.44% - 0.00% 

Albertson’s 232 0.54% 496 1.12% 

Rancho Ford Lincoln Mercury 180 0.42% 120 0.27% 

Temecula Creek Inn 184 0.43% 155 0.35% 

Rancho California Water District 143 0.33% 118 0.27% 

Lowe’s 135 0.32% 195 0.44% 

The Scotts Company 125 0.29% - 0.00% 

McMillan Farm Management 120 0.28% - 0.00% 

K-Mart Corporation 94 0.22% 125 0.28% 

Claim Jumper 106 0.25% 133 0.30% 

Sierra Pacific Farms, Inc. 75 0.18% 163 0.37% 

Mervyns 107 0.25% 151 0.34% 

TGI Friday’s 83 0.19% - 0.00% 

Pat & Oscars 70 0.16% - 0.00% 

Magnecomp Corporation 14 0.03% 103 0.23% 

Hudson Respiratory Care, Inc. - 0.00% 579 1.31% 

Maxxim Medical - 0.00% 227 0.51% 

Bianchi International - 0.00% 294 0.67% 

True Green Land Care - 0.00% 200 0.45% 

Flowserve Corporation - 0.00% 194 0.44% 

Robinsons-May - 0.00% 180 0.41% 

Red Robin - 0.00% 142 0.32% 

Partnership with Industry - 0.00% 110 0.25% 

Molding International - 0.00% 102 0.23% 

Ralphs - 0.00% 100 0.23% 

Weitz Golf Construction - 0.00% 100 0.23% 

Oakridge Landscape - 0.00% 100 0.23% 

Florasense by Endar - 0.00% 181 0.41% 

Tension Envelope - 0.00% 117 0.26% 


and California Employment Development Department 

132


OPERATING INDICATORS BY FUNCTION 

Last Six Fiscal Years 

Fiscal Year 

FUNCTION 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 

Police: 

Total Citations 13,255 11,370 14,633 25,237 15,164 17,747 

Red Light Runners 2,296 3,525 4,745 3,194 1,938 2,866 

DUI Arrests 212 214 178 353 439 352 

Traffic Collisions n/a 570 731 838 557 799 

Fire: 

Number of Emergency Calls 4,745 4,902 5,228 5,895 5,764 6,087 

Inspections 3,335 3,786 3,261 5,714 3,633 938 

Public Works: 

Miles of City Streets Slurry Sealed 18 18 18 18 12 13 

Parks and Recreation: 

Number of Recreation Classes 500 500 700 800 800 1000 

Number of Parks 30 31 36 37 37 38 

Note: Ten years of information is not available, the City will be adding data until ten years worth is presented 

Source: City of Temecula Departments 

133


FULL-TIME CITY EMPLOYEES 


Full-Time City Employees by Function 

FUNCTION 

1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 

City Council 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 

City Manager 9.00 9.00 9.00 9.00 9.00 9.00 9.00 10.00 10.00 11.00 

City Clerk 6.00 6.00 6.00 8.00 7.00 7.00 7.00 8.00 8.00 8.00 

Finance 11.00 11.50 11.50 13.50 14.00 14.00 14.00 15.50 15.50 15.50 


Planning 13.00 18.00 19.00 24.00 22.00 22.00 23.00 24.00 24.00 19.65 

Building and Safety 16.00 16.00 16.00 16.00 19.00 20.00 21.00 21.00 21.00 21.90 

Land Development 9.85 11.18 11.18 11.18 15.68 15.68 15.68 15.38 15.38 13.63 

Public Works 26.40 27.57 30.82 34.32 37.82 38.82 44.32 48.62 48.62 50.37 

Police - - - - - 1.00 1.00 1.00 1.00 1.00 

Fire - - - 1.00 1.00 2.00 2.00 3.00 3.00 3.00 

Community Services 21.90 22.90 26.90 27.90 28.05 29.05 33.05 35.90 37.90 38.40 

Redevelopment Agency 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 4.45 

Internal Service Funds 6.35 8.60 8.85 10.85 13.20 14.20 15.20 18.35 18.35 17.85 

127.50 138.75 147.25 163.75 174.75 180.75 193.25 208.75 210.75 209.75 


134


CAPITAL ASSET STATISTICS BY FUNCTION 

Last Six Fiscal Years 

FISCAL YEAR 

Function 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 

Police: 

Stations 1 1 1 1 1 1 

Storefronts 1 1 2 2 2 2 

Fire: 

Stations 4 4 5 5 5 5 

Public Works: 

Miles of Streets 236.1 244.9 261.8 281 284.9 293.6 

Traffic Signals 56 63 96 96 96 110 

Parks and Recreation: 

Number of Parks 30 31 36 37 38 38 

Note: Ten years of information is not available, the City will be adding data until ten years worth is 

presented here. 

Source: City of Temecula Departments 

135


COMPARATIVE CITY INFORMATION 

2009 

NUMBER 

OF 

EMPLOYEES 

POPULATION 

ESTIMATED 

GENERAL 

FUND 

REVENUES 

BUDGETED 

GENERAL 

FUND 

EXPENDITURES 

EXPENDITURES 

PER CAPITA 

Temecula 197 102,604 $57,226,946 55,084,548 $537 

Escondido 1030 144,831 72,944,355 76,242,815 $526 

Moreno Valley 777 186,301 74,838,348 83,385,624 $448 

Hemet 340 74,185 31,091,707 33,894,818 $457 

Lake Elsinore 93 50,267 24,403,700 24,087,000 $479 

Murrieta 382 100,173 41,593,769 44,934,422 $449 

2008 

NUMBER 

OF 

EMPLOYEES 

POPULATION 

ESTIMATED 

GENERAL 

FUND 

REVENUES 

BUDGETED 

GENERAL 

FUND 

EXPENDITURES 

EXPENDITURES 

PER CAPITA 

Temecula 210 101,057 63,935,627 62,867,844 $622 

Escondido 1,075 141,788 82,706,000 82,001,280 $762 

Moreno Valley 723 183,860 88,788,060 93,374,825 $508 

Hemet 355 74,185 38,744,854 38,296,274 $516 

Lake Elsinore 98 49,807 32,091,200 32,091,200 $644 

Murrieta 338 100,173 40,080,291 40,656,430 $406 

136


DEMOGRAPHICS AND MISCELLANEOUS STATISTICS 

June 30, 2009 

Incorporation Date December 1, 1989 

Form of Government 

Council / City Manager 

Number of Authorized City Employees (full-time equivalent) 209.75 

Number of Registered Voters 40,872 

Personal Family Income $95,692 

Area in Square Miles 30.15 

Altitude 

1000-1200 Feet 

Rainfall 

19.52 inches per year 

Location 

55 mi. N of San Diego; 85 mi. SE of Los Angeles 

Miles of streets 293.6 

Park sites 38 

Park Acreage (total) 588 

Park Acreage (developed) 308 

Education: 

Number of Schools 33 

Number of Teachers 1,438 

Number of Students Enrolled 28,697 

Libraries (contracted with Riverside County): 

Number of Libraries 2 

Number of Volumes 210,249 

Fire Protection (contracted with Riverside County): 

Number of Stations 5 

Number of Firefighters 62.5 

Number of Volunteer Firefighters 10 

Police Protection (contracted with Riverside County): 

Number of Stations 3 

Number of Sworn Officers 111 

Supervision i / Management 21 

Fiscal 

Year 

Public School 

Population* Enrollment** Unemployment*** 

2000 53,791 15,722 N/A 

2001 62,107 17,704 3.53% 

2002 72,715 19,029 4.03% 

2003 75,014 20,265 4.43% 

2004 77,460 21,789 4.23% 

2005 81,397 23,494 3.78% 

2006 92,923 25,600 3.41% 

2007 97,935 27,962 3.58% 

2008 101,057 28,186 4.66% 

2009 102,604 28,697 7.80% 

SOURCE: 

*State of California, Department of Finance 

**Temecula Valley Unified School District 

***State of California, Employment Development Department 

N/A - Information Not Available 

137

138

California Comprehensive Annual Financial Report - City of Temecula

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