California Comprehensive Annual Financial Report - City of Temecula

City of Temecula
Notes to Financial Statements (Continued)
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.
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