HomeMy WebLinkAboutSection 8 PHA Plan (3)CALIFORNIA
NATIONAL er
INCORPORATED
Community Development Commission
Housing Authority of the City of National City
Section 8 Rental Assistance Division
PUBLIC HOUSING AGENCY PLAN
Annual Plan
for
Fiscal Year 2012
140 E. 12th Street, Suite B
National City CA 91950-3312
(619) 336-4254— Telephone
(619) 477-3747— Facsimile
www. nationalcityca.gov
PHA 5-Year and
Annual Plan
U.S. Department of Housing and Urban
Development
Office of Public and Indian Housing
OMB No. 2577-0226
Expires 4/30/2011
1.0
PIIA Information
PHA Name: HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY PIIA Code: CA116
____
PHA Type: 0 Small El High Performing ❑ Standard 0 llCV (Section 8)
PHA Fiscal Year Beginning: (MM/YYYY): 07/2012
2.0
Inventory (based on ACC units at time of FY begiitni ng in 1,0 above)
Number of I'll units: Number 01 I-ICV units: 1044
3.0
Suhulission Type
0 5-Year and Annual flan ❑ Annual Platt Only 0 5-Year Plan Only
4.0
PIIA Cnrieor'tia ❑ PHA Consortia: (Check boa II submitting a joint Plan and complete table below.)
Participating P1IAs
PHA
Code
Program(s) Included in the
Consortia
ProgramsNot in the
Consortia
No. of Units in liach
Program
III
IICV
PHA I:
PHA 2:
PIIA 3;
5.0
5-Year Plan. Complete items 5.1 and 5.2 on y at 5-Year Plan update.
5.1
Mission. State the PIIA's Mission for serving the needs of low-income, very low-income, and extremely low income families ill the PHA's
jurisdiction for the next five years'.
SEE ATTACHMENT
5.2
Goals and Objectives. Identify the PIIA's quantifiable goals and objectives that will enable the PIIA to serve the needs of low-income and Very
low-income, and extremely low-income families (bit the (next five years. Include a report Ott the progress the NIA has made in meeting the goals
and objectives described in the previous 5-Year Plait.
SEE ATTACHMENT
6.0
NIA Plan Update
(a) Identify all PIIA Plait elements that have been revised
SEE ATTACHMENT
()) Identify die specific location(s) where die public nay
elements, see Section 6.0 of the instructions.
SEE ATTACHMENT
by the PHA since its last Annual
obtain copies of the 5-Year and
Demolition and/or Disposition,
related to laest- programs
Plan submission:
Anitu al PI IA Plan. For a complete list of P11A
Plan
7.0
Ilope VI, Mixed Finance Modernization or Development,
Programs, and Project -based Voucher's. Licliale sirtm,>lenfs
Conversion of Public llausing, Ilomeowucrship
as applicable,
8.0
Capilar Improvements. Please complete Parts 8.1 through 8.3, as applicable.
8'I
8.2
Capital fund Program Annual Statement/Performance
complete and submit the Capital l'alid Program Alit> w/ Sirtimturinh/irt
open CFI' grant and CFI•P financing.
and Evaluation Report. As part
forma we and /,Vafua11011
of Me submission of the Annual
subsequent annual updates (oil
in the Five -Year Action Plan.
of the PHA 5-Year and Annual
Report, form IIU)I)-5(11175.I
Plan, annually
, for each eur eni and
submit the Capital Pt ird
year, and add latest year
Capital Fund Program Five -Year Action Plan. As part
Program Ells -Friar 4ctio 1 ]Tall, loan 11Ul)-50075.2, and
for a live. year period). Large capital items must be included
Plan, P11As dills( complete and
a rolling basis, e.g., drop current
83
Capital Fund Financing Ptogrartl (ClrlaP).
❑ Check if the PICA proposes. to use;lily portion of its Capital Fund Program (C1'P)/Repltcetnent Housing Factor (RI IF) to repay debt incurred to
finance capital improvements.
Page 1 of 2
form HUD-50075 (4/2008)
9.0
housing Needs. Based on information provided by the applicable Consolidated Plan, information provided by HUD, and other generally available
data, rake a reasonable effort to identify the housing needs of the low-income, very low-income, and extreIiiely low-income families who reside in
the jurisdiction served by the PIIA, Inelmling elderly hinnies, families with disabilities, and households of various races and ethnic groups, and
other families who are on the public housing and Section 8 tenant -based assistance waiting lists. The identification of housing needs must address
issues of affordability, supply, quality, accessibility, size of units, and location.
SEE ATTACHMENT
9.1
Strategy for Addressing housing Needs. Provide a brief description of the PHA's strategy for addressing the housing needs of families in the
jurisdiction and on the waiting list in the upcoming year. Note: Small, Section 8 only, and iligli Performing PIIAs complete only for Annual
Plyaa SiLlimisskin with the 5-Year Plait.
N/A
I0.0
Additional Information. Describe the following, as well as any additional information HUD has requested.
(a) Progress in Meeting Mission and Goals. Provide a brief statement of the PNIA's progress in sleeting the mission and goals described in the 5-
Year Plan.
SEE ATTACHMENT
(b) Significant Amendment and Subsuilitlal DeviationlM od i fieatinn. Provide the PHA's definition of 'significant amendment" and "substantial
deviation/modification"
.EE ATTACHMENT
Required Submission for IlUl) Field Office Review. in addition to the PI IA Plan Iemplatc (LIUD-50075), PflAs must submit the following
documents, Items (a) through (g) may be submitted with signature by mail or electronically With scanned signatures, but electronic su bmi scion is
encouraged. Items (h) through (i) must be attached electronically with the PI -IA Plan. Note: Faxed copies of these documents will not be accepted
by the Field Office,
(a) Form I-IUD-50077, P11ff Certifications ofComplinnce icilli the PHA Plans and Related Repulalions (which includes all certifications relating
to Civil Rights)
(b) Form IRJi.)-50070, Certification fa• cr Drug-1 rec Workplace (PHAs receiving CFP grants only)
(a) Form I-IiUD-50071, Certification of Payment's to It finance Federal •17ransactio+i.s (PIIAs receiving CFP grants only)
(d) Form SF-l.,L.L, Disclosure of Lobbying Activities (PHAs receiving CFP grants only)
(e) Form SF-LI.,I;-A, Disclosure of Lobbying Activities Continuation Sheet (PHAs receiving C.:FP grants only)
(I) Resident Advisory Board (RAH) comments. Comments received from the RAP. most be submitted by the PI.IA as an attachment to the Pi1A
Plan. PHAs must also include a narrative describing their analysis of the recommendations and the decisions made on these recommendations.
(g) Challenged 1/lements
(h) Form I-IUD-50075.1, Capital hold Program Annual StotcnrcutR'erliamancc and Evaluation Report {P1IAs receiving CH' grams only)
(i) Form Ifll0-50075.2, Capital Fmtr! Program Five -Year Action 1'lari (1'IIAs receiving CFI) grants only)
Page 2 of 2 form IIUD-50075 (4/2(308)
This inlnrmation collection Is authorised by Section 511 of the Quality Housing and Work Responsibility Act, which added a new section 5A to the U.S. Ilotistng Act
of 1937, as amended, which introduced 5-Year and Annual PHA Plans. The 5-Year and Annual PIIA plans provide a ready source for interested parties to locate basic
PIIA policies, rules, and requirements concerning the PtiA's operations, programs, and services, and informs HUD, families served by the P1IA, and members of the
public of the PI1A's mission and strategies for serving the needs of low-income and very low-income families. This forts is to be used by all PHA types for submission
of the 5-Year and Annual Plans to HUD. Public reporting burden for this information collection is estimated to average 12.68 hours per response, including the time for
reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. 1I1.11)
may not collect this information, and respondents are not required to complete this form, unless it displays a currently valid OM13 Control Number.
Privacy Act Notice. The United States Department of Ilousing and Urban Development is autism heed to solicit the information requested in this form by virtue of Title
12, U.S. Code, Section 1701 et seq., and regulations promulgated (hereunder at Title 12, Code of Federal Regulations. Responses to the collection of information are
required to obtain a benefit or to retain a benefit. The information requested does not lend itself to confidentiality
Instructions form I-IUD-50075
Applicability. This form is to be used by all Public Ilousing Agencies
(PHAs) with Fiscal Year beginning April I, 201)8 for the submission of their
5-Veal. and Annual Plan in accordance with 24 CFR Part 903, The previous
version may be used only through April 30, 2008.
1.0 PIIA information
Include the full PHA name, PHA code, P1{A type, and PIIA Fiscal Year
Beginning (MM/YYYY).
2.0 Inventory
Under each program, enter the number of Annual Contributions Contract
(ACC) Public Housing (PH) and Section 8 units (HCV).
3.0 Submission Type
Indicate whether this submission is for an Annual and Five Year Plan, Annual
Plan only, or 5-Year Plan only,
4.0 PHA Consortia
Check but if submitting a Joint P1IA Plan and complete the table.
5.11 Five -Year Plan
Identify the PI IA's Mission, Goals and/or Objectives (24 CFR 903.6).
Complete only at 5-Year update,
5.1 Mission. A statement of the mission of the public housing agency
for serving Ilie needs of low-income, very low-income, and extremely
low-income families in the jurisdiction of the PICA daring the years
covered under the plan.
5.2 Goals and Objectives. ldentily quantifiable goals and objectives
that will enable the PHA to serve the needs of line income, very low-
income, and extremely low-income families.
6.0 P11A Plan update. In addition to the items captured in the Phan
template, PHAs must have the elements listed below readily available to
the public. Additionally, a PHA must:
(a) Identify specifically which plan elements have been revised
since the PH{A's prior plait submission.
(b) Identify where the 5-Year and Annual Plan may be obtained by
the public. At a minimum, PHAs must post PI-iA Plans,
including updates, at each Asset Management Project (AMP)
and main office or central off ice of the PI IA. PICAS are
strongly encouraged to post complete PIIA Plans on its official
websito. PI-lAs are also encouraged to provide each resident
council a copy of its 5-Year and Annual Plan.
PIIA Plan Elements. (24 CFR 903.7)
Eligibility, Selection and Admissions Policies, including
Octeoncentratinn and Wait List Procedures. Describe
the PC IA's policies that govern resident or tenant
eligibility, selection ,and admission including admission
preferences for both public housing and [ICY and unit
assignment policies for public housing; and procedures for
maintaining waiting lists for admission to public housing
and address any site -based waiting lists.
2. Financial Resources. A statement of financial resources,
including a listing by general categories, of the PIIA's
anticipated resources, such as PI1A Operating, Capital and
other anticipated Federal resources available to the PHA,
as well as tenant rents and other income available to
support public housing or tenant -based assistance. The
statement also should include the stop -Federal sources of
funds supporting each Federal program, and slate the
planned ttse for the resources.
3, Rent Determination. A statement of the policies of the
PHA governing rents charged for public housing and HCV
dwelling units.
4, Operation and Management. A statement of the rules,
standards, and policies of the PIIA governing maintenance
management of housing ()wiled, assisted, or operated by
the publie housing agency (which shall include measures
necessary for the prevention or eradication of pest
infestation, including cockroaches), and management of
the PIIA and programs of the PIIA.
5. Grlevallce Procedures. A description of the grievance
and informal healing and review procedures (hat the PHA
makes available to its residents and applicants.
ci. Designated !lousing for Elderly and Disabled Families.
With respect to public housing projects owned, assisted, or
operated by the PHA, describe any projects (or portions
thereon), in the upcoming fiscal year, that the PIIA has
designated or will apply for designation for occupancy by
elderly and disabled families. The description shall
include the iollowing information: 1) development name
and number; 2) designation type; 3) application status; 4)
date the designation was approved, submitted, or planned
for submission, and; 5) the number of units affected.
7. Community Service and Self -Sufficiency. A description
of: (1) Any programs relating to services and amenities
provided or offered to assisted families; (2) Any policies
or programs of the PICA for the. enhancement of the
economic and social self-sufficiency of assisted families,
including programs under Section 3 and PSS; (3) (tow the
PIIA will comply with the requirements of community
service and treatment of income changes resulting from
welfare program requirements. (Note: applies to only
public housing).
8. Safety and Crime Prevention, For public housing only,
describe the PIIA's plan for safety and crime prevention to
ensure the. safety of the public housing residents, The
statement insist include: (i) A description of the need for
measures to ensure the safety of public (housing residents;
(ii) A description of any crime prevention activities
conducted or to be conducted by the PIIA; and (iii) A
description of the coordination between the PiIA and the
appropriate police precincts for carrying out crime
prevention measures and activities.
Page I of 3 .................... Instructions torus II11D-50075 (20011)
9. Pets. A statement describing the PI3As policies and
requirements pertaining to the ownership of pets in public
housing.
10. Civil Rights Certification. A PI IA will be considered in
compliance with the Civil Rights and AFFfl Certification
if: it can document that it examines its programs and
proposed programs to identify any impediments to liiir
housing choice within those programs; addresses those
impediments in a reasonable fashion in view of the
resources available; works with the local jurisdiction to
implement any of the jurisdiction's initiatives to
afli matitely further lair housing; and assures that the
annual plan is consistent with any applicable Consolidated
Plan for its jurisdiction.
11. Fiscal Year Audit. The results of the most recent fiscal
year audit for the PHA.
12. Asset Management. A statement of how the agency will
early out its asset management functions with respect to
the public housing inventory of the agency, including how
the agency will plan for the long-term operating, capital
investment, rehabilitation, modernization, disposition, and
other needs for such invcmory.
E3. Violence Against Women Act (VAWA). A description
of: I) Any activities, services, or programs provided or
offered by an agency, either directly or in partnership with
other service providers, to child or adult victims of
domestic violence, dating violence, sexual assault, or
stalking; 2) Any activities, services, or programs provided
or offered by a PHA that helps child and adult victims of
domestic violence, dating violence, sexual assault, or
stalking, to obtain or maintain housing; and 3) Any
activities, services, or programs provided or offered by a
public housing agency to prevent domestic violence,
dating violence, sexual assault, and stalking, or to enhance
victim safety in assisted families,
7.0 llnpe VI, Mixed Finance Modernization or Development,
Demolition and/oar Disposition, Conversion of Public ]lousing,
[Iumeownersit p Programs, and Project -based Vouchers
(a) [tope VI or Mixed Finance Modernization or Development.
1) A description of any housing (including project number or
known) and unit count) for which the PI -IA will apply for HOPE
VI or Mixed Finance Modernization or Development; and 2) A
timetable for the submission of applications or proposals. The
application and approval process for [lope VI, Mixed Finance
Modernization or f)eelopment, is a separate process. See
guidance oat IIUJD's website at:
hall./hvww,lnid,hov/oil ices/yip/troe.ruinsrftblhopOlf ndex,e fit
(b) Demolition and/or Disposition. With respect to public housing
projects owned by the PHA and subject to ACCs under the Act:
(1) A description of any housing (including project number and
us it numbers jot addresses)), and the number of affected units
along with their sizes anti accessibility features) for which the
PHA will apply or is currently pending fir demolition or
disposition; and (2) A timetable for the demolition or
disposition. The application and approval process for demolition
and/or disposition is a separate process. See guidance on IIIJD's
website at,
http:ang'u put.ffo)ioflieesipihiec•ntersisac/derno_dispolindex.c
Ina
Note: This statement must be submitted to the extent that
approved and/or pending demolition and/or disposition has
changed.
(c) Conversion of Public I[ousinp. With respect to public
housing owned by a PHA: 1) A description ()laity building
or buildings (including project number and unit count) that
the PHA is required to convert to tenant -based assistance or
that the public housing agency plans to voluntarily convert;
2) An analysis of the projects or buildings required to be
converted; and 3) A statement of the amount of assistance
received under this chapter to he used for rental assistance or
other housing assistance in connection with such conversion.
See guidance on HliD's website at:
lttti,:7ttw :lnldlo /ofnces?pi iccniers/stc:/conversinntfrn
(d) Homeownership. A description of any homeownership
(including project number and unit count) administered by
the agency or for which the NIA has applied or will apply
for approval.
(e)
Project -based Vouchers. If the PHA wishes to use the
project -based voucher program, a statement of the projected
number of project -based units and general locations and how
project basing would be consistent with its PIMA Plan.
8.0 Capital Improvements. This section provides information on a PHA's
Capital Punil Program. With respect to public housing projects owned,
assisted, or operated by the public housing agency, a plan describing the
capital improvements necessary to ensure long-term physical and social
viability of the projects must be completed along with the required
firms. Items identified in 2.1 through 8.3, must be signed where
directed and transmitted electronically along with the PHA's Annual
Plan submission.
8.1 Capital Fund Program Annual Statement/Performance and
Evaluation Report. PHAs nttist complete the Capital Fund
Progrm+t rtn+rua! Stafencart/Per/or»rarrce and l/a'alnaiiori Keport'
(form 1-IUD-50(175.1), for each Capital Fund Program (CEP) to be
undertaken with the current year's CFI' funds or with CFFP
proceeds, Additionally, the form shall be used for the Hallowing
purposes:
(a) To submit the initial budget for a new grant or CFFP;
(b) To report on the Performance and Evaluation Report progress
on any open grants previously funded or CFFP; and
(c) To record a budget revision on a previously approved open
grant or ('PEP, e.g., additions or deletions of work items,
modification of budgeted amounts that have been undertaken
since the submission of the last Annual Plan. The Capital
Fund Program Annual Statement/Performance and
]valuation Report must be submitted annually.
Additionally, PhlAs shall complete the Performance and
Ivaluation Report section (see footnote. 2) of the Capital Puurrl
Program Annual Staten+ent/Perfnr+iurnee and Evaluation (form
[IUD-50075.I ), at the Ibllowing times:
I. At the end of the program year; until the program is
completed or all funds are expended;
When revisions to the Annual Statement are made,
which do not regtilre prior HUD approval, (e.g.,
expenditures for emergency work, revisions resulting
from the Pl-1As application of fungibility); and
3. UJlwn completion or termination of the activities flamed
in a specific capital fund program year,
8,2 Capital Fund Program hive -Year Action Plan
PllAs mummt submit the Capital Fund Program Five -)'cart action
Plan (form HUD-50075.2) for the attire PHA portfolio for the first
year of participation in the CEP and annual update thereafter to
elimiltatc the previous year and to add a new fifth year (rolling
basis) so that the form always covers the present five-year period
beginning with the current year.
8.3 Capital Fund Financing Program (CFFP). Separate, written
HOD approval is required if the PIMA proposes to pledge any
Page2 01-3 Instructions Corm HUD-50075 (2008)
portion of its C:FP/Rf-!P funds to repay debt ineurred to finance
capital improvements. The PICA must identify in its Annual and 5-
year capital plans the amount of the annual payments required to
service the debt. The PHA must also submit an Zuluual statement
detailing the use of the CFFP proceeds. See guidance on I1UD's
website at:
I_it, l; ;!ss ❑ sc.luui i os,lnfflceiiip111prtig tins/ph'c}Il€'I;nsJlal'€j�.cEill,
').(I "[lousing Needs, Provide a statement of'the housing needs of families
residing in the jurisdiction served by the I'I)A and the means by which
the PHA intends, to the maximum extent practicable, to address those
needs. (Note: Standard and 'Troubled PIIAs complete annually; Sinai!
and High Performers complete only for Annual Plan submitted wilb the
5-Year Plan).
9.1 Strategy for Addressing I lousing Needs. Provide a description of
the PICA's strategy for addressing the housing needs of families In
the jurisdiction and on the waiting list in the upcoming year.
{Nate: Standard and Troubled P1-IAs complete annually; Small
and llingh Performers complete only for Annual Plan submitted
with the 5-Year Plan).
I(t o Additional Information. Describe the litllowine, as well as any
additional information requested by I1UI):
(a) Progress in Meeting Mission and Goals. PIIAs must
include (i) a statement of the PIIAs progress in meeting the
mission and goals described in the 5-Year Plan; (ii) the basic
criteria the PI -IA will use for determining a significant
amendment from its 5-year Plan; and a significant
amendment or modification to its 5-Year Plan and Annual
Plan. (Note: Standard and'l'roubled PIIAs complete
annually; Small and Iliglr Performers complete only for
Annual Plan submitted with the 5-Year Plan).
(b) Significant Amendment and Substantial
Deviation/Modification. PICA must provide the definition
of "significant amendment" and "substantial
deviation/modification". (Note: Standard and Troubled
P11As complete annually; Small and High Performers
complete only for Annual flan submitted is'ilk the 5-Year
Plan.)
(c) PIIAs must include or reference any applicable memorandum
of agreement with 110I) or any plan to improve performance.
(Note: Standard and 'Troubled PHAs complete annually).
11.0 Required Submission for IlUI) Field Office Review. In order to be a
complete package, PIIAs must submit items (a) through (g), with
signature by mail or electronically with scanned signatures. Items (It)
and (i) shall be submitted electronically as an attachment to the PHA
Plan.
(i)
Form IIUD-50077, PHA Certifications ofCompliarnce with
the PHA Plans and Related Regulations
Form I-IUD-50070, Cerrifrcatian for a Drag -Free Workplace
(PIIAs receiving CFP grants only)
Form C-CUD-50(371, Certification of Payments to Influence
Federal Transactions (PIIAs receiving CFP grants only)
Form SF-I_i..l.,, Disclosure of Lobbying Activities (PIIAs
receiving CFI' grants only)
Forst SF-I.1.,C_-A, Disclosure of Lobbying Activities
Continuation Sheet (PIIAs receiving CFP grants only)
Resident Advisory Board (RAl3) comments.
Challenged Iilemems. Include any cicmcnt(s) of the PHA
Plan that is challenged.
Form HUD-50075.1, Capitol Fund Program Annurr!
Srorearertt/Perforrucurce and !;valuation Report (Must be
attached electronically fot' PIIAs receiving CFP grants
only). See instructions in g.l.
Form I-IUD-50075.2, Capital land Program Five -Year
Action Plan (Must he attached electronically for PIIAs
receiving CFP grants only). See instructions in 8.2.
Page 3 or 3 Instructions form lit D-51I1i75 ().efts)
5.1 Mission
To promote adequate and affordable housing, economic opportunity and suitable
living environment free from discrimination to the low income households in the
City of National City.
5.2 Goals and Objectives
PHA Goal: Expand the supply of assisted housing.
Objective: Increase housing choices for families and individuals.
• Progress: Increased voucher utilization
PHA Goal: Improve the quality of assisted housing
Objective: Maintain safe, decent, sanitary units and improve quality of life for
residents living in assisted units.
• Progress: Received a high performer SEMAP score; will
soon implement monitoring of carbon monoxide alarm for
each rental unit.
PHA Goal: Increase assisted housing choices
Objective: Balance service delivery in all housing market areas.
• Progress: Maintained communications with apartment
associations in order to recruit new participating owners;
continue to conduct new admission to the program and leave
the waiting list open to applicants.
PHA Goal: Provide an improved living environment
Objective: Maintain safe, decent, sanitary units and improve quality of life for
residents living in assisted units.
Progress: Maintained assistance to senior residents at
Kimball Tower.
PHA Goal: Promote self-sufficiency and asset development of families
and individuals
Objective: Create additional economic independence opportunities for families
and individuals.
• Progress: Continued referrals to the National City
Collaborative for supportive services to increase
independence; continued counseling to five remaining FSS
participants.
PHA Goal: Ensure equal opportunity and affirmatively further fair housing
Objective: Promote equal housing opportunities.
• Progress: Fair housing programs and resources are
included in all issuance briefings. Communication was
maintained with the San Diego Fair Housing Council,
ensuring proper referrals for anyone alleging discrimination,
whether an HCV participant or member of the public.
Other PHA Goals and Objectives: Violence Against Women Act (VAWA)
Prohibits the eviction of victims of domestic violence, dating
violence, sexual assault, or stalking
• The CDC supports the goals of the VAWA Amendments and will
comply with its requirements and will continue to administer its
housing programs in ways that support and protect participants and
applicants who maybe victims of domestic violence, dating
violence, sexual assault or stalking.
• The CDC will not take any adverse action against a participant or
applicant solely on the basis of her or his being a victim of such
criminal activity, including threats of such activity. "Adverse action"
in this context includes denial or termination of housing assistance.
® The CDC will not subject a victim of domestic violence, dating
violence, sexual assault or stalking to a more demanding standard
for lease compliance than other participants.
• The CDC has developed policies and procedures to implement the
requirements of VAWA. The victim or threatened victim of an
incident or incidents of actual or threatened domestic violence,
dating violence, or stalking will not be construed as a serious or
repeated violation of the lease, and shall not be good cause for
terminating the assistance, tenancy, or occupancy rights of the
victim of such violence. The CDC may terminate the
assistance/tenancy to remove a lawful occupant or tenant who
engages in criminal acts or threatened acts of violence or stalking
to family members or others without terminating the assistance or
evicting victimized lawful occupants. The CDC may honor court
orders regarding the rights of access or control of the property and
orders issued to protect the victim and to address the distribution or
possession of property among household members where the
family "breaks up". There is no limitation on the ability of the CDC
to terminate assistance for other good cause unrelated to the
incident or incidents of domestic violence, dating violence, or
stalking, other than the victim may not be subject to a "more
demanding standard" than non -victims. There is no prohibition on
the CDC terminating assistance if it "can demonstrate an actual and
imminent threat to other tenants or those or those employed at or
providing service to the property if that tenant's (victim's) assistance
is not terminated". Any protection provided by the law which give
greater protection to the victim are not superseded by these
provisions. The CDC may require certification by the victim of
victim status on such forms as the CDC and/or HUD shall prescribe
or approve.
Progress: Coordinated with the Police Department and the
Department of Health and Human Services to identify and
appropriately refer child or adult victim of domestic violence,
dating violence, sexual assault, or stalking and place victims
into existing community programs. Continued to review
cases of possible domestic violence to ensure that
applicants and participants are not denied housing
assistance based on incidents in which they are victims of
domestic violence, dating violence, sexual assault, or
stalking.
The PHA constantly updates its Section 8 Family and
Landlord Handbooks and Administrative Plan with
information on the Violence Against Women Act (VAWA)
and the Enterprise Income Verification (EIV) System, as well
as program policies, procedures, and regulations. The
Family Handbooks are issued to new program participants at
briefing and the Landlord Handbooks are provided to
landlords at outreach events.
Other PHA Goals and Objectives: Deter and eliminate program fraud
y Progress: Remains committed to assuring that the proper
level of benefits are received by all participating families, and
that housing resources reach only income -eligible families so
that program integrity can be maintained. Takes all steps
necessary to prevent fraud, waste and mismanagement so
program resources are utilized judiciously. Continued tenant
counseling and providing detailed understanding of the
program at issuance briefing and at every annual
recertification and moves; utilized resources to prevent fraud
such as EIV, credit reports, post office address verification,
dependent children's school verification, and DIM checks.
6.0 PHA Plan Update
(a) Identify all PHA Plan elements that have been revised by the PHA since its
last Annual Plan submission:
2. Financial Resources:
Statement of Financial Resources: Planned Sources and Uses
Financial
Resources
Planned Sources
and Uses
Sources
Planned $
Planned Uses _
1. Federal Grants (FY 2012 grants)
_—_�
a) Public Housing Operating Fund
_
b) Public Housing Capital Fund
c) HOPE VI Revitalization
d) HOPE VI Demolition
e) Annual Contribution to HCV
$8,559,516
_
f) Resident Opportunity and Self -
Sufficiency Grants
g) Community Development Block
Grant
$1,387,759
Provides affordable
housing, revitalized
neighborhoods, and creates
employment opportunities
h) HOME
$2,672,066
First time homebuyers
assistance, single family
rehabilitation, and
multifamily
acquisition/rehabilitation _
Other Federal Grants_(list below
2. Prior Year Federal Grants
(unobligated funds only) (list
below)
3. Public Housing Dwelling Rental
Income
4, Other Income (list below)
Redevelopment activities
and admin
5. Non-federal Sources list below
$461,376„
Redevelopment Housing Set -Aside
Funds (estimated)
Redevelopment Housing Set -Aside
Funds (estimated)
$2,306,879
L & M housing and admin
Total Resources
$15,387,596
3. Financial Resources
Rent Determination
Payment Standards
What is the PHA's payment standard?
At or above 90% of FMR
11. Fiscal Year Audit:
Year ended June 30, 2011 — The audit disclosed no instances of
noncompliance or other matters that are required by auditors to be
reported under OMB Circular A-133.
(b) Identify the specific location(s) where the public may obtain copies of
the Annual Plan:
The PHA Plan is available on our website at www.nationalcityca.gov and
at the below listed offices:
Main administrative office of the PHA:
Community Development Commission of National City
Section 8 Rental Assistance Division
140 E 12th Street, Suite B
National City, CA 91950
Main administrative office of local, county or State government:
City of National City - City Hall
City Clerk
1243 National City Boulevard
National City, CA 91950
Public library
City of National City
Main Library
1401 National City Boulevard
National City, CA 91950
9.0 Housing Needs
The City of National City is a desirable location and is a draw for a diversity of
people. The cost of living and rental costs are high. As a result, the need for
affordable housing in the CDC's jurisdiction is reflected by the number of
applicants on the waiting list for the Section 8 Housing Voucher program. As of
December 2011, the combined number of applicants seeking affordable housing
assistance from the CDC totaled 3,861 (refer to the Housing Needs Table,
below). CDC waiting list data also confirms the need to assist a variety of
households with differing demographics, including those with special needs (i.e.,
disabled, physically handicapped), as well as low income seniors on fixed
incomes.
The CDC's jurisdiction encompasses one Consolidated Plan jurisdiction.
Housing Needs of Families on the PHA's Section Tenant -Based Assistance
Waiting List
# of Families
% of Total
Families
Annual
Turnover
Waiting list total
3861
60
Extremely low incomek<=30% AMI)
3324
86.09%
Very low income (>30% but <=50% AMI)
525
13.60%
Low income 50% but <=80% AMI
12
2219
0.31%
Families with children
57.47%
Elderly families
1047
27.12%
Families with disabilities
595
15.41
Hispanic
2592
67.13%
Non -Hispanic
1269
32.87%
American Indian/Alaska Native
26
0.67%
Asian
573
14.84%
Native Hawaiian/Pacific Islander
74
1.92%
Black/African American
348
9.01 %
White
2840
73.56%
10A) Additional Information
(a) Progress in Meeting Mission and Goals.
See 5.2 above
(b) Significant Amendment and Substantial Deviation/Modification
Substantial Deviation from the 5-year Plan:
A change that will substantially negatively impact a majority of Section 8
participants or waiting list applicants considered a substantial deviation from the
5-Year except when the change is determined to be necessary in order to comply
with regulatory requirements, respond to funding constraints, or respond to a
federally, state, or locally ordered emergency.
Significant Amendment or Modification to the Annual Plan:
A change that will substantially negatively impact a majority of Section 8
participants or waiting list applicants is considered a significant amendment or
modification to the Annual Plan except when the change is determined to be
necessary in order to comply with regulatory requirement, respond to funding
constraints, or respond to a federally, state, or locally ordered emergency.
5.1 Mission
To promote adequate and affordable housing, economic opportunity and suitable
living environment free from discrimination to the low income households in the
City of National City.
5.2 Goals and Objectives
PHA Goal: Expand the supply of assisted housing.
Objective: Increase housing choices for families and individuals.
➢ Progress: Increased voucher utilization
PHA Goal: Improve the quality of assisted housing
Objective: Maintain safe, decent, sanitary units and improve quality of life for
residents living in assisted units.
➢ Progress: Received a high performer SEMAP score; will
soon implement monitoring of carbon monoxide alarm for
each rental unit.
PHA Goal: Increase assisted housing choices
Objective: Balance service delivery in all housing market areas.
➢ Progress: Maintained communications with apartment
associations in order to recruit new participating owners;
continue to conduct new admission to the program and leave
the waiting list open to applicants.
PHA Goal: Provide an improved living environment
Objective: Maintain safe, decent, sanitary units and improve quality of life for
residents living in assisted units.
➢ Progress: Maintained assistance to senior residents at
Kimball Tower.
PHA Goal: Promote self-sufficiency and asset development of families
and individuals
Objective: Create additional economic independence opportunities for families
and individuals.
➢ Progress: Continued referrals to the National City
Collaborative for supportive services to increase
independence; continued counseling to the remaining FSS
participants.
PHA Goal: Ensure equal opportunity and affirmatively further fair housing
Objective: Promote equal housing opportunities.
➢ Progress: Fair housing programs and resources are
included in all issuance briefings. Communication was
maintained with the San Diego Fair Housing Council,
ensuring proper referrals for anyone alleging discrimination,
whether an HCV participant or member of the public.
Other PHA Goals and Objectives: Violence Against Women Act (VAWA)
Prohibits the eviction of victims of domestic violence, dating
violence, sexual assault, or stalking
• The CDC supports the goals of the VAWA Amendments and will
comply with its requirements and will continue to administer its
housing programs in ways that support and protect participants and
applicants who maybe victims of domestic violence, dating
violence, sexual assault or stalking.
• The CDC will not take any adverse action against a participant or
applicant solely on the basis of her or his being a victim of such
criminal activity, including threats of such activity. "Adverse action"
in this context includes denial or termination of housing assistance.
• The CDC will not subject a victim of domestic violence, dating
violence, sexual assault or stalking to a more demanding standard
for lease compliance than other participants.
• The CDC has developed policies and procedures to implement the
requirements of VAWA. The victim or threatened victim of an
incident or incidents of actual or threatened domestic violence,
dating violence, or stalking will not be construed as a serious or
repeated violation of the lease, and shall not be good cause for
terminating the assistance, tenancy, or occupancy rights of the
victim of such violence. The CDC may terminate the
assistance/tenancy to remove a lawful occupant or tenant who
engages in criminal acts or threatened acts of violence or stalking
to family members or others without terminating the assistance or
evicting victimized lawful occupants. The CDC may honor court
orders regarding the rights of access or control of the property and
orders issued to protect the victim and to address the distribution or
possession of property among household members where the
family "breaks up". There is no limitation on the ability of the CDC
to terminate assistance for other good cause unrelated to the
incident or incidents of domestic violence, dating violence, or
stalking, other than the victim may not be subject to a "more
demanding standard" than non -victims. There is no prohibition on
the CDC terminating assistance if it "can demonstrate an actual and
imminent threat to other tenants or those employed at or providing
service to the property if that tenant's (victim's) assistance is not
terminated". Any protection provided by the law which give greater
protection to the victim are not superseded by these provisions.
The CDC may require certification by the victim of victim status on
such forms as the CDC and/or HUD shall prescribe or approve.
➢ Progress: Coordinated with the Police Department and the
Department of Health and Human Services to identify and
appropriately refer child or adult victim of domestic violence,
dating violence, sexual assault, or stalking and place victims
into existing community programs. Continued to review
cases of possible domestic violence to ensure that
applicants and participants are not denied housing
assistance based on incidents in which they are victims of
domestic violence, dating violence, sexual assault, or
stalking.
The PHA constantly updates its Section 8 Family and
Landlord Handbooks and Administrative Plan with
information on the Violence Against Women Act (VAWA)
and the Enterprise Income Verification (EIV) System, as well
as program policies, procedures, and regulations. The
Family Handbooks are issued to new program participants at
briefing and the Landlord Handbooks are provided to
landlords at outreach events.
Other PHA Goals and Objectives: Deter and eliminate program fraud
➢ Progress: Remains committed to assuring that the proper
level of benefits are received by all participating families, and
that housing resources reach only income -eligible families so
that program integrity can be maintained. Takes all steps
necessary to prevent fraud, waste and mismanagement so
program resources are utilized judiciously. Continued tenant
counseling and providing detailed understanding of the
program at issuance briefing and at every annual
recertification and moves; utilized resources to prevent fraud
such as EIV, credit reports, post office address verification,
dependent children's school verification, and DMV checks.
6.0 PHA Plan Update
(a) Identify all PHA Plan elements that have been revised by the PHA since its
last Annual Plan submission:
2. Financial Resources:
Statement of Financial Resources: Planned Sources and Uses
Financial
Resources
Planned Sources
and Uses
Sources
Planned $
Planned Uses
1. Federal Grants (FY 2012 grants)
a) Public Housing Operating Fund
b) Public Housing Capital Fund
c) HOPE VI Revitalization
d) HOPE VI Demolition
e) Annual Contribution to HCV
$8,559,516
f) Resident Opportunity and Self -
Sufficiency Grants
g) Community Development Block
Grant
$1,387,759
Provides affordable
housing, revitalized
neighborhoods, and creates
employment opportunities
h) HOME
$2,672,066
First time homebuyers
assistance, single family
rehabilitation, and
multifamily
acquisition/rehabilitation
Other Federal Grants (list below)
2. Prior Year Federal Grants
(unobligated funds only) (list
below)
3. Public Housing Dwelling Rental
Income
4. Other Income (list below)
5. Non-federal Sources (list below)
Redevelopment Housing Set -Aside
Funds (estimated)
$461,376
Redevelopment activities
and admin
Redevelopment Housing Set -Aside
Funds (estimated)
$2,306,879
L & M housing and admin
Total Resources
$15,387,596
3. Financial Resources
Rent Determination
Payment Standards
What is the PHA's payment standard?
At or above 90% of FMR
11. Fiscal Year Audit:
Year ended June 30, 2011 — The audit disclosed no instances of
noncompliance or other matters that are required by auditors to be
reported under OMB Circular A-133.
(b) Identify the specific location(s) where the public may obtain copies of
the Annual Plan:
The PHA Plan is available on our website at www.nationalcityca.qov and
at the below listed offices:
Main administrative office of the PHA:
Community Development Commission of National City
Section 8 Rental Assistance Division
140 E 12th Street, Suite B
National City, CA 91950
Main administrative office of local, county or State government:
City of National City — City Hall
City Clerk
1243 National City Boulevard
National City, CA 91950
Public library
City of National City
Main Library
1401 National City Boulevard
National City, CA 91950
9.0 Housing Needs
The City of National City is a desirable location and is a draw for a diversity of
people. The cost of living and rental costs are high. As a result, the need for
affordable housing in the CDC's jurisdiction is reflected by the number of
applicants on the waiting list for the Section 8 Housing Voucher program. As of
December 2011, the combined number of applicants seeking affordable housing
assistance from the CDC totaled 3,861 (refer to the Housing Needs Table,
below). CDC waiting list data also confirms the need to assist a variety of
households with differing demographics, including those with special needs (i.e.,
disabled, physically handicapped), as well as low income seniors on fixed
incomes.
The CDC's jurisdiction encompasses one Consolidated Plan jurisdiction.
Housing Needs of Families on the PHA's Section Tenant -Based Assistance
Waiting List
# of Families
% of Total
Families
Annual
Turnover
Waiting list total
3861
60
Extremely low income (<=30% AMI)
3324
86.09%
Very low income (>30% but <=50% AMI)
525
13.60%
Low income (50% but <=80% AMI)
12
0.31
Families with children
2219
57.47%
Elderly families
1047
27.12%
Families with disabilities
595
15.41
Hispanic
2592
67.13%
Non -Hispanic
1269
32.87%
American Indian/Alaska Native
26
0.67%
Asian
573
14.84%
Native Hawaiian/Pacific Islander
74
1.92%
Black/African American
348
9.01
White
2840
73.56%
10.0 Additional Information
(a) Progress in Meeting Mission and Goals.
See 5.2 above
(b) Significant Amendment and Substantial Deviation/Modification
Substantial Deviation from the 5-year Plan:
A change that will substantially negatively impact a majority of Section 8
participants or waiting list applicants considered a substantial deviation from the
5-Year except when the change is determined to be necessary in order to comply
with regulatory requirements, respond to funding constraints, or respond to a
federally, state, or locally ordered emergency.
Significant Amendment or Modification to the Annual Plan:
A change that will substantially negatively impact a majority of Section 8
participants or waiting list applicants is considered a significant amendment or
modification to the Annual Plan except when the change is determined to be
necessary in order to comply with regulatory requirement, respond to funding
constraints, or respond to a federally, state, or locally ordered emergency.
COMMUNITY IDEVELOPMENT COMMISSION
OF THE CITY OF NATIONAL CITY
Financial Statements and
Supplementary Information
Year ended June 30, 201 I
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Financial Statements and Supplementary Information
Year ended June 30, 2011
TABLE OF CONTENTS
Page
Independent Auditors' Report
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Assets 3
Statement of Activities 4
Fund Financial Statements:
Governmental Funds:
Balance Sheet 6
Reconciliation of Balance Sheet of Governmental Funds to the
Government -Wide Statement of Net Assets 9
Statement of Revenues, Expenditures and Changes in Fund Balances 10
Reconciliation of the Statement of Revenues, Expenditures, and Changes
in Fund Balances of Governmental Funds to the Government -Wide
Statement of Activities 12
Enterprise Funds:
Statement of Net Assets 13
Statement of Revenues, Expenses and Changes in Net Assets 14
Statement of Cash Flows 15
Notes to the Basic Financial Statements 16
Required Supplementary Information:
Notes to the Required Supplementary Information 48
Schedule of Revenues, Expenditures and Changes in Fund Balance .—
Budget and Actual — Special Revenue Funds:
Community Development Block Grant 49
Section 8 Housing Assistance 50
HUD Program Income 51
HOME Program 52
Low and Moderate Income Housing Program 53
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Financial Statements and Supplementary Information
Year ended June 30, 2011
TABLE OF CONTENTS, (CONTINUED)
Page
Supplementary Schedules:
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual — Redevelopment Debt Service Fund 55
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual — Redevelopment Capital Projects Fund 56
Computation of Low and Moderate Income Housing Fund — Excess Surplus 57
Report on Compliance and Other Matters and on Internal Control Over
Financial Reporting Based on an Audit of Financial Statements
Performed in Accordance with Government Auditing Standards 59
Report on Compliance With Requirements That Could Have a Direct and Material
Effect and on Internal Control Over Compliance in Accordance With Guidelines
For Compliance Audits of California Redevelopment Agencies, June 2011, issued
by the State Controller C1
Schedule of Findings and Recommendations 63
II
- t.
An Independent CPA Firm
2301. Dupont Drive, Suite 200
Irvine, Caiifornto 9261.2
949-474•2020 ph
949-263-5520 fx
wwva.rnhrn-pc.core
Board of Directors
Community Development Commission of the City of National City
National City, California
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying financial statements of the governmental activities, the
business -type activities, and each major fund of the Community Development Commission of the
City of National City (the "Commission"), a component unit of the City of National City,
California as of and for the year ended June 30, 2011, which collectively comprise the
Commission's basic financial statements, as listed in the table of contents. These financial
statements are the responsibility of the management of the Community Development
Commission of the City of National City. Our responsibility is to express an opinion on these
component unit 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
component unit 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 opinion,
in our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business -type activities, and
each major fund of the Community Development Commission of the City of National City at
June 30, 2011, and the respective changes in financial position and cash flows of its proprietary
fund types for the year then ended in conformity with accounting principles generally accepted in
the United States of America.
As described further in note 1 to the financial statements, the accompanying financial statements
reflect certain changes in the reporting of fund types and fund balance classifications for
governmental funds due to the implementation of GASB Statement No. 54,
As explained further in note 1 1, the future operation of redevelopment agencies in the state of
California may be impacted by the results of litigation initiated in response to certain legislative.
actions enacted by the California State Legislature.
Board of Directors
Community Development Commission of the City of National City
National City, California
Page Two
The Commission has not presented management's discussion and analysis that the Government
Accounting Standards Board has determined is necessary to supplement, although not required to
he part of, the basic financial statements.
The information identified in the accompanying table of contents as required supplementary
information is not a required part of the basic financial statements but is supplementary
information required by accounting principles generally accepted in the United States of
America. We have applied certain limited procedures, which consisted principally of inquiries of
management regarding the methods of measurement and presentation of the supplementary
information, However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purposes of forming opinions on the financial statements that
collectively comprise the Commission's basic financial statements. The individual budgetary
comparison schedules for Debt Service and Capital Projects Funds are presented for the purpose
of additional analysis and are not a required part of the basic financial statements. These
supplementary schedules have been subjected to the audit 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.
In accordance with Government Auditing Standards, we have also issued a report dated
December 21 , 2011 on our consideration of the Commission's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts,
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.
This report is an integral part of an audit performed in accordance with Government Auditing
Standards' and should he considered in assessing the results of our audit.
Irvine, California
December 21, 2011
2
(This page intentionally left blank)
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Statement of Net Assets
June 30, 201 1
Governmental Business -type
Activities Activities Total
Assets
Cash and investments (note 4) $ 17,197,354 15,591 17,212,945
Cash and investments with fiscal agent (note 4) 41,984,553 1,738,710 43,723,263
Receivables:
Accounts 115,600 115,600
Interest 13,964 13,964
Taxes 194,122 194,122
Loans (note 6) 9,391,1.87 9,391,187
Due from other governments 1,030,808 1,030,808
Prepaid expense - 132,638 132,638
Land held for resale 9,392,509 9,392,509
Deferred charges 1,495,527 1,495,527
Capital assets (note 5):
Nondepreciable capital assets 2,{}50,000 528,382 2,578,382
Depreciable capital assets, net of
accumulated depreciation 499,999 6,687,958 7,187,957
Total assets 83,365,623 9,103,279 92,468,902
Liabilities
Accounts payable and other liabilities 1,651,443 255,318 1,906,761
Accrued salaries and benefits 85,008 85,008
Accrued interest payable 1,650,553 1,650,553
Deposits 87,500 87,500
Due to City of National City 203,405 203,405
Noncurrent liabilities (note 7):
Due within one year 4,063,750 218,492 4,282,242
Due in more than one year 76,771,216 2,058,393 78,829,609
Total liabilities 84,512,875 2,532,203 87,045,078
Net Assets
Invested in capital assets, net of related debt
Restricted for low and moderate housing
Unrestricted net assets (deficit)
Total net assets
2,549,999
16,104,647
(19,801,898)
$ ._,...:..__(1,147,252)
4,939,455
1,631,621
6,571.076
See accompanying notes to basic financial statements.
7,489,454
17,736,268
(19,801,898)
5.423.824
3
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Statement of Activities
Year Ended June 30, 2011
Governmental activities:
Low and moderate housing
Community development
Interest on long-term debt
and related charges
Program Revenues
Operating Capital Total
Charges for Contributions Contributions Program
Expenses Services and Grants and Grants Revenues
g 384,248
16,991,305
3,506,322
Total governmental activities 20,881,875
Business -type activities:
Low and moderate housing
Interest on long-term debt
and related charges
Total business -type activities
Total primary government
2,145,877 2,208,044
167,134
2,313,011 2,208,044
12,475,711 - 12,475,711
12,475,711
12,475,711
2,208,044
2,208,044
23,194,886 2,208,044 12,475,711 - 14,683,755
General revenues:
Tax increment, net
Investment income
Other
Transfers to City, net
Total general revenues and transfers
Change in net assets
Net assets (deficit) at beginning of year, as restated (note 12)
Net assets (deficit) at end of year
See accompanying notes to the basic financial statements.
4
Net (Expense) Revenue and Changes in Net Assets
Primary Government
Governmental Business -type
Activities Activities
Total
(384,248) (384,248)
(4,515,594) - (4,515,594)
(3,506,322) (3,506,322)
(8,406,1 64) - (8,406,164)
(8,406,164)
11,182,960
609,043
269,789
(935,1 17)
62,167 62,167
(167,134) (167,134)
(104,967) (104,967)
(104,967) (8,511,131)
3,404
11,182,960
612,447
269,789
(935, 1 17)
11,126,675 3,404 11,130,079
2,720,51 1 (101 ,563) 2,618,948
(3,867,763) 6,672,639 2,804,876
$ (1,147,252) 6,571,076 5,423,824
5
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Balance Sheet - Governmental Funds
June 30, 2011
Special Revenue Funds
Community Section 8 HUD
Development Housing Program HOME
Block Grant Assistance Income Program
Assets
Cash and investments (note 4) $ - 1,531,378 508,997 2,160,908
Cash with fiscal agent (note 4) - 1,100,000 -
Receivables:
Accounts 8,639 -
Interest - 312 2,266
Taxes - - -
Loans - 190,776 608,610
Due from other governments 358,485 669,527
Land held for resale
Total assets
$ 358,485 1,540,017
pLiabilities and Fund Balances
Liabilities:
Accounts payable $ 149,386 46,509
Accrued payroll 5,694 21,433
Due to City of National City 203,405
Deposits
Deferred revenue -
1,800,085
3,441,311
137,966
1,714
5,987
Total liabilities 358,485 67,942 145,667
Fund balances:
Spendable:
Restricted for:
Debt service
Community development
Public housing
I.,ow and moderate income housing
Unassigned
'Dotal fund balances
Total liabilities and fund balances $
358,485
1,472,075
1,800,085 3,295,644
1,472,075 1,800,085 3,295,644
1,540,017 1,800,085 3,441,311
See accompanying notes to the basic financial statements.
6
Low and
Moderate Income
!-Lousing Program
9,586,932
30,565
10,043
37,191
7,767,650
360,000
17,792,381
62,992
3,670
1,621,072
1,687,734
16,104,647
16,104,647
17,792,381
Debt
Service
Fund
Redevelopment
Fund
2,695,979
6,878,357
148,764
9,723,100
1,062,333
1,062,333
Capital
Projects
Fund
Redevelopment
Fund
713,160
34,006,196
76,396
1,343
8,167
824,151
2,796
9,032,509
Totals
Governmental
Funds
17,197,354
41,984,553
115,600
13,964
194,122
9,391,187
1,030,808
9,392,5(19
44,664,718 79,320,097
192,257
52,497
87,500
332,254
1,651,443
85,008
203,405
87,500
1,627,059
3,654,415
8,660,767 8,660,767
44,332,464 49,428,193
1,472,075
16,104,647
8,660,767 44,332,464 '75,665,682
9,723,100 44,664,718 79,320,097
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8
COMMUNITY I?EVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Reconciliation of the Balance Sheet of Governmental Funds
to the Government -Wide Statement of Net Assets
June 30, 2011
Fund balances of governmental funds $ 75,665,682
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.
Capital assets
Accumulated depreciation
Long tern debt and compensated absences have not been included in the
governmental funds:
4,581,163
(2,031,164)
Tax allocation bonds payable (74,590,000)
HUD 108 Bond 2003 A (5,505,000)
Advances from City (739,966)
Unamortired bond issuance costs 1,49.5,527
Certain revenues were not available to pay for current -period expenditures
and, therefore, were deferred in the governmental funds. 1,627,059
Accrued interest payable for the current portion of interest due on bonds
payable has not been reported in the governmental funds.
Net assets (deficit) of governmental activities
See accompanying notes to the basic financial statements.
9
(1,650,553)
$ (1,147,252)
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds
For the Year Ended June 30, 2011
Revenues:
Property taxes
Subventions and grants
Interest income
Other income
Total revenues
Expenditures:
Current:
Personnel services
Community development
Capital outlay
Debt Service:
Principal payments
Cost of issuance
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses):
Transfers in (note 3)
Transfers out (note 3)
Transfer to City of National City
Original discount on issuance
Issuance of long-term debt.
Special Revenue Funds
Community Section 8 HUD
Development Housing Program HOME
Block Grant Assistance Income Program
S
1,644,864 9,618,037 1,155,914
10,221 73,340
202,582
1,644,864 9,618,037
211,696
235,542
1,015,564
245,000
208,181
820,364
8,404,633
1,915,983 9,224,997
(271,119)
119,531.
(123,960)
393,040
212,803 1,229,254
25,156
69,100
1,263,336
71,163 -
96,319 1,332,436
116,484 (103,182)
(119,531)
Total other financing sources (uses) (4,429) - (119,531) -
Net change in fund balance (275,548) 393,040 (3,047) (103,182)
Fund balance (deficit), beginning
of year, as restated (note 12) 275,548 1,079,035 1,803,132 3,398,826
Fund balance, end of year $ 1,472,075 1,800,085 3,295,644
See accompanying notes to the basic financial statements.
10
Debt Capital
Service Projects
Low and Fund Fund Total
Moderate Income Redevelopment Redevelopment Governmental
Housing Program Fund Fund Funds
2,767,741
244,321
32,974
11,070,963 - 13,838,704
56,896 12,475,711
8,836 126,764 463,482
34,233 269,789
3,045,036 11,079,799 217,893 27,047,686
133,754 - 2,042,585 3,277,499
250,494 2,613,680 936,1.08 13,728,949
- 1,927,618 2,943, ].82
2,525,000 - 2,770,000
- 439,442 439,442
1,706,646 11,250 1,997,240
384,248 6,845,326 5,357,003 25,156,31.2
2,660,788 4,234,473
(861,863)
5,062,931
(5,408,287)
(5,139,110) 1,891,374
5,408,287
(4,201,068)
(811,157)
(1,056,085)
39,660,000
10,590,749
(10,590,749)
(935,1 17)
(1,056,085)
39,660,000
(861,863) (345,356) 38,999,977 37,668,798
1,798,925 3,889,117 33,860,867 39,560,172
14,305,722 1.,771,650 10,471,597 36,105,510
16,104,647 8,660,76'7
4.4,332,464 75,665,682
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Government -Wide Statements of Activities
For the Year Ended lune 30, 2011.
Changes in fund balances of governmental funds $ 39,560,172
Amounts reported for governmental activities in the statement of activities
differs from the amounts reported in the statement of activities 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.
Depreciation expense
(81,667)
Repayment of bond principal is an expenditure in the governmental funds, but
the repayment reduces long-term liabilities in the statement of net assets. 2,770,000
Proceeds from the issuance of long-term debt is reported as long term
Liabilities in governmental funds, The long-term debt increases liabilities in
the statement of net assets, but does not result in an increase in net assets in
the statement of activities. (39,660,000)
Bond issuance costs are amortized in the Statement of Activities, but are not
reflected in the governmental funds. 1,495,527
The statement of activities includes accrued interest on long-term debt. This
is the net change in interest payable expense for the current period. (1,509,082)
Revenues in the government -wide statement of activities that did not provide
current financial resources were not reported as revenues in the governmental
funds.
145,561
Change in net assets of governmental activities $ 2,720,511.
See accompanying notes to the basic financial statements.
12
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Statement of Net Assets - Enterprise Funds
June 30, 2011
Kimball
Towers
Assets
Morgan
Towers
Total
Current assets:
Cash and investments (notes 2 and 4) $ 6,760 8,831 15,591
Prepaids and deposits 51,689 80,949 132,638
Total current assets 58,449 89,780 148,229
Restricted cash and investments with
fiscal agent (notes 2 and 4) 1,131,053 607,657 1,738,710
Noncurrent assets:
Capital assets (note 5):
Nondepreciable assets 315,814 212,568 528,382
Depreciable capital assets, net of accumulated
depreciation 4,378,567 2,309,391 6,687,958
Total capital assets 4,694,38 I 2,521,959 7,216,340
Total assets 5,883,883 3,219,396 9,103,279
Liabilities
Current liabilities:
Accounts payable and accrued liabilities 75,316 90,080 165,396
Notes payable -due within one year (note 7) 218,492 21.8,492
Total current liabilities 75,316 308,572 383,888
Noncurrent liabilities:
Tenant security deposit liability
Note Payable -due in more than one year (note 7)
Total noncurrent liabilities
Total liabilities
44,879 45,043 89,922
2,058,393 2,058,393
44,879 2,103,436 2,148,315
120,195 2,412,008 2,532,203
Net Assets
Invested in capital assets, net of related debt 4,694,381 245,074 4,939,455
Restricted for:
Housing 1,069,307 562,314 1,631,621
Total net assets $ 5,763,688 807,388 6,571,076
See accompanying notes to the basic financial statements.
13
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Statement of Revenues, Expenses and Changes in Net Assets - Enterprise Funds
Year ended June 30, 2011
Kimball Morgan
Towers Towers
Total
Operating revenues:
Rental income $ 982,146 1,211,218 2,193,364
Other 7,358 7,322 14,680
Total operating revenues
989,504 1,218,540 2,208,044
Operating expenses:
Maintenance and operation 904,613 827,695 1,732,308
Depreciation 187,350 226,219 413,569
Total operating expenses 1,091,963 1,053,914. 2,145,877
Operating income (loss) (102,459) 164,626 62,167
Nonoperating revenues (expenses):
Interest income 2,596 808 3,404
Interest expense (167,134) (167,134)
Total nonoperating revenues (expense) 2,596 (166,326) (163,730)
Change in net assets (99,863) (1,700) (101,563)
Net assets at beginning of year 5,863,551 809,088 _ 6,672,639
Net assets at end of year $ 5,763,688 807,388 6,571,076
See accompanying notes to the basic financial statements.
14
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Statement of Cash Flows - Enterprise Funds
Year ended June 30, 2011
Cash flows from operating activities:
Cash received from customers and government agencies
Cash payments to employees for services
Cash payments to suppliers for goods and services
Cash received for other operating activities
Kimball Morgan
Towers Towers
983,538
(48,681)
(927,354)
7,358
1,220,218
(197,557)
(725,263)
7,322
Total
2,203,756
(246,238)
(1,652,6 17)
14,680
Net cash provided by (used for) operating activities 14,861 304,720 319,581
Cash flows from financing activities:
Principal payments On note payable (204,777) (204,777)
Interest income 2,596 808 3,404
Interest expense (166,434) (I66,434)
Net cash provided by (used for) financing activities 2,596 (370,403) (367,807)
Increase (decrease) in cash and investments
Cash and investments (including cash and investments with fiscal agent):
Beginning of Year
End of year
Reconciliation of operating income (loss) to net
cash provided by (used for) operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to net
cash provided by (used for) operating activities:
Depreciation
(Increase) decrease in accounts receivable
(Increase) decrease in prepaids and deposits
Increase (decrease) in accounts payable and accrued liabilities
Total adjustments
Net cash provided by (used for) operating activities 5 14,861
Noncash investing,_capital and financing activities
There were no significant noncash investing, capital or financing activities for the year ended June 30, 2011.
17,457 (65,683) (48,226)
1,120,356
1,137,813
(102,459)
682,171
616,488
1,802,527
1,754,301
164,626 62,167
187,350 226,219 413,569
490 700 1,190
25,290 (669) 24,621
(95,810) (86,156) (181,966)
117,32(1 140,094 257,414
304,720 319,581
See accompanying notes to basic financial statements.
15
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
Year ended June 30, 2011
(1) Summary of Significant Accounting Policies
The basic financial statements of the Community Development Commission of the City of
National City (the "Commission"), a component unit of the City of National City (the
"City"), have been prepared in conformity with generally accepted accounting principles
as applied to government units, The Governmental Accounting Standards Board (GASB)
is the accepted standard -setting body for establishing governmental accounting and
financial reporting principles. The following is a summary of the significant accounting
policies of the Commission.
(a) Description of the Reporting Entity
The Community Development Commission of the City of National City (the
"Commission") was established in April 1967 pursuant to provisions of the
California Health and Safety Code. The Commission is subject to the oversight
responsibility of the City Council of the City of National City (the "City") and,
accordingly, is a component. unit of the City, although it is a separate legal entity.
The Commission's primary purpose is to eliminate blighted areas within the City
by encouraging development of residential, commercial, industrial, recreational
and public facilities and to assist neighborhood redevelopment through residential
property improvement loans and housing assistance payments to low and moderate
income earners. The Commission accounts for its financial position and
operations in accordance with generally accepted accounting principles in the
United States applicable to governmental units.
(b) Basis of Accounting and Measurement Focus
The basic financial statements of the Commission are composed of the following:
e Government -wide financial statements
® Fund financial statements
* Notes to the basic financial statements
Government— Wide Financial Statements
The Commission's government -wide financial statements include a Statement of
Net Assets and a Statement of Activities. These statements present summaries of
governmental activities for the Commission.
16
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Acco pj nn and Measurement Focus Continued
Government --- Wide Financial Statements Continued
Government -wide financial statements are presented using the economic resources
measurement focus and the accrual basis of accounting. Accordingly, all of the
Commission's assets and liabilities, including capital assets, as well as
infrastructure assets, and long-term liabilities, are included in the accompanying
Statement of Net Assets. The Statement of Activities presents changes in net
assets. Under the accrual basis of accounting, revenues are recognized in the
period in which they are earned, while expenses are recognized in the period in
which the liability is incurred.
Certain types of transactions are reported as program revenues for the Commission
in three categories:
• Charges for services
➢ Operating grants and contributions
• Capital grants and contributions
interfund transfers have been eliminated as prescribed by GASB Statement No. 34
in regards to interfund activities.
Fund Financial Statements
The underlying accounting system of the Commission 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
control led.
Fund financial statements for the Commission's governmental and proprietary
funds are presented after the government -wide financial statements. An
accompanying schedule is presented for the governmental funds to reconcile and
explain the differences in fund balance as presented in these statements to the net
assets presented in the government -wide financial statements. The Commission
has presented all major funds that met the applicable criteria.
17
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
( ) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus. (Continued)
Governmental Funds
In the fund financial statements, governmental funds are presented using the
modified accrual basis of accounting. Their revenues are recognized when they
become measurable and available as net current assets. Measurable means that the
amounts can be estimated, or otherwise determined. Available means that the
amounts were collected during the reporting period or soon enough thereafter to be
available to finance the expenditures accrued for the reporting period. The
Commission uses a sixty day availability period. The primary revenue sources,
which have been treated as susceptible to accrual by the Commission, are property
tax, special assessments, intergovernmental revenues and other taxes.
Expenditures are recorded in the accounting period in which the related fund
liability is incurred.
Deferred revenues arise when potential revenues do not meet both the measurable
and available criteria for recognition in the current period. Deferred revenues also
arise when the government receives resources before it has a legal claim to them,
as when grant monies are received prior to incurring qualifying expenditures. In
subsequent periods, when both revenue recognition criteria are met or when the
government has a legal claim to the resources, the deferred revenue is removed
and revenue is recognized.
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that 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 the balance sheet in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not be
considered "available spendable resources," since they do not represent net
current assets. Due to the nature of their spending measurement focus,
expenditure recognition for governmental fund types excludes amounts
represented by noncurrent liabilities. Since they do not affect net current assets,
such long-term amounts are not recognized as governmental fund type
expenditures or fund liabilities.
18
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amount represented by noncurrent liabilities.
Since they do not affect net current assets, such long-term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expendilures in the
year that resources were expended, rather than as fund assets. The proceeds of
long-term debt are recorded as an other financing source rather than as a fund
liability. Amounts paid to reduce long-term indebtedness are reported as fund
expenditures.
The. Reconciliation of the Fund Financial Statements to the Government -Wide
Financial Statements is provided to explain the differences created by the
integrated approach of the GASB Statement No. 34.
Governmental Fund Balances
The accompanying financial statements reflect certain changes that have been
made with respect to the reporting of the components of fund balances for
governmental funds. In previous years, fund balances for governmental funds
were reported in accordance with previous standards that included components for
reserved fund balance, unreserved fund balance, designated fund balance, and
undesignated fund balance.
Due to the implementation of GASB No. 54, the components of the fund balances
of governmental funds now reflect the component classifications described below.
Prior year amounts have been restated to reflect the component designations
required by GASB No. 54.
Fund balances are reported in the fund statements in the following classifications:
Nonspendable Fund Balance
Nonspendable Fund Balance this includes amounts that cannot be spent because
they are either not spendable in form (such as inventory) or legally or
contractually required to be maintained intact (such as endowments).
19
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
Summary of Significant Accounting Policies, Continued
(b) Basis of Accounting and Measurement Focus, (Continued)
Spendable Fund Balance
Restricted Fund Balance — this includes amounts that can be spent only for
specific purposes stipulated by constitution, external resource providers, or
through enabling legislation. If the Board action limiting the use of funds is
included in the same action (legislation) that created (enables) the funding source,
then it is restricted.
Committed Fund Balance --- this includes amounts that can be used only for the
specific purposes determined by a formal action of the Board. It includes
legislation (Board action) that can only be overturned by new legislation requiring
the same type of voting consensus that created the original action. Therefore, if
the Board action limiting the use of the funds is separate from the action
(legislation) that created (enables) the funding source, then it is committed, not
restricted. The Commission considers a resolution, an ordinance, or a minutes
action to constitute a formal action of Board of Directors for the purposes of
establishing committed fund balance.
Assigned Fund Balance this includes amounts that are designated or expressed
by the Board, but does not require a formal action like a resolution or ordinance.
The Commission may delegate the ability of an employee or committee to assign
uses of specific funds, for specific purposes. Such delegation of authority has been
granted to the City Manager.
Unassigned Fund Balance — this includes the remaining spendable amounts which
are not included in one of the other classifications.
It is the Agency's policy that restricted resources will be applied first, followed by
(in order of application) committed, assigned, and unassigned resources, in the
absence of a formal policy adopted by the Commission.
20
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL, CITY
Notes to Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Pr'ohrietary Funds
The Commission's enterprise funds are proprietary funds. In the fund financial
statements, proprietary funds are presented using the accrual basis of accounting.
Revenues arc recognized when they are earned and expenses are recognized when
the related goods or services are delivered. In the fund financial statements,
proprietary funds are presented using the economic' resources measurement focus.
This means that all assets and all liabilities (whether current or noncurrent)
associated with their activity are included on their balance sheets. Proprietary fund
type operating statements present increases (revenues) and decreases (expenses) in
total net assets.
Operating revenues and expenses generally result from providing services, and
producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of Kimball Towers and
Morgan Towers are charges to tenants for housing low and moderate income
seniors, which is subsidized with Federal government funds under a Section 8
contract with the U.S. Department of 1-lousing and Urban Development:. Operating
expenses for the proprietary funds include the cost of services, administrative
expenses, and depreciation on capital assets. All revenue and expenses not
meeting this definition are reported as nonoperating revenues and expenses.
Amounts paid to acquire capital assets are capitalized as assets in the proprietary
fund financial statements, rather than reported as an expenditure. Proceeds of
long-term debt are recorded as a liability in the proprietary fund financial
statements, rather than as an other financing source. Amounts paid to reduce long-
term indebtedness of the proprietary funds are reported as a reduction of the
related liability, rather than as an expenditure.
Major Funds
The Commission reports the following major governmental funds:
Community Development Block Grant — To account for activities related to the
annual grant from the Department of Housing and Urban Development to assist in
developing viable urban community by providing decent housing and a suitable
living environment, and by expanding economic opportunities, principally for low
and moderate income persons.
21
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies. (Continued)
(b) Basis of Accounting and Measurement Focus, (Continued)
Major Funds, (Continued)
Section 8 Housing Assistance — To provide rental assistance to low income
families by subsidizing a portion of the rent directly to landlords on behalf of low
income households.
HUD Program Income — To provide for the funding of Community Development
Block Grant program activities as approved by the City Council utilizing HUD
program income.
HOME Program — To account for activities related to the annual grant from the
Department of Housing and Urban Development to administer programs designed
to provide decent affordable housing, expand capacity of nonprofit housing
providers, and to leverage private sector participation.
Low and Moderate Income Housing Program — To account for the tax increment
which is required to be set aside under Section 33334.2 of the California Health
and Safety Code to increase, improve or preserve the community's supply of low
and moderate income housing.
Redevelopment Debt Service Fund — To account for the accumulation of resources
for the. payment of principal, interest, and related costs of the Commission's long-
term debt.
Redevelopment Capital Projects I -kind To account for the administrative
expenditures of the Commission and redevelopment capital projects.
In addition, the Commission also reports the following major proprietary funds:
Kimball Towers •-_. To
Kimball Tower which
seniors.
Morgan Towers — To
Morgan Tower which
seniors.
account for the activities relating to the operations of
use is restricted to housing low and moderate income
account for the activities relating to the operations of
use_ is restricted to housing low and moderate income
22
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(I) Summary of Significant Accounting Policies, (Continued)
(c) Cash and Investments
The Commission's investment policy authorizes deposits in any of the approved
investments contained in the California Government Code Sections 53600 et seq.
During the year ended June 30, 2011, the Commission complied with these
policies.
Investment income earned on unrestricted cash is allocated to the Commission's
various funds as required by grant/loan agreements or at the Board's discretion.
The Commission pools its available cash with the City for investment purposes.
The City considers pooled cash and investment amounts, with original maturities
of three months or less, to be cash equivalents. Cash and cash equivalents are
combined with investments and displayed as cash and investments.
In accordance with GASI3 Statement No. 31, Accounting and Financial Reporting
for Certain Investments and for External Investment Pools, highly liquid market
investments with maturities of one year or less at time of purchase are stated at
amortized cost. All other investments are stated at fair value. Market value is
used as fair value for those securities for which market quotations are readily
available.
The Commission participates in an investment pool managed by the State of
California titled Local Agency Investment Fund (LAIF) which has invested a
portion of the pool funds in Structured Notes and Asset -backed Securities. LAW s
investments are subject to credit risk with the full faith and credit of the State of
California collateralizing these investments. In addition, these Structured Notes
and Asset -backed Securities are subject to market risk as to change in interest
rates.
(d) Land Held for Resale
Land held for resale is recorded at the lower of cost or, upon entering into a
contract for sale, the estimated net realizable value. Fund balances are reserved in
amounts equal to the carrying value of land and buildings held for resale, because
such assets are not available to finance the Commission's current operations.
(e) Use of Restricted/Net Assets
When an expense is incurred for purposes for which both restricted net assets are
available, the Commission's policy is to apply restricted net assets first.
23
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies. (Continued)
(1) Interfund Transactions
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as either "due to/from other
funds" (i.e., the current portion of interfund loans) or "advances to/from other
funds" (i.e., the noncurrent portion of interfund loans),
(g) Interest Payable
In the government -wide financial statements, interest payable of long-term debt is
recognized as the liability is incurred for governmental fund types.
In the fund financial statements, governmental fund types do not recognize the
interest payable when the liability is incurred. Rather, interest expense is simply
recorded when it is due or paid.
(h) Long -Term Liabilities
Government -Wide Financial Statements •-- Long-term debt and other long-term
obligations are reported as liabilities in the primary government's governmental
activity.
Fund Financial Statements — The fund financial statements do not present long-
term debt but are shown in the Reconciliation of the Governmental Funds Balance
Sheet to the Government -Wide Statement of Net Assets.
(i) Net Assets
In the government -wide financial statements, net assets are classified in the
following categories:
Invested in Capital Assets, net of Related Debt — This amount consists of capital
assets net of accumulated depreciation and reduced by outstanding debt that
attributed to the acquisition, construction, or improvement of the assets.
Restricted Net Assets — This amount is restricted by external creditors, grantors,
contributors, laws or regulations of other governments.
Unrestricted Net Assets — This amount is all net assets that do not meet the
definition of "invested in capital assets, net of related debt" or "restricted net
assets."
24
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(1) Summary of Significant Accounting Policies, (Continued)
{j) Property Tax Increment
One of the Commission's primary sources of revenue is from property tax
increments, The assessed valuation of all property within the Downtown
Redevelopment Project area was determined on the date of adoption of the
Redevelopment Plan. Property taxes related to the incremental increase in
assessed values after the adoption of the Redevelopment Plan are allocated to the
Commission; all taxes on the "frozen" assessed valuation of the property are
allocated to the City and unrelated taxing agencies.
(k) Use of Estimates
The preparation of the basic financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These estimates and assumptions affect the reported amounts of
assets and liabilities and the disclosures of contingent assets and liabilities. In
addition, estimates affect the reported amount of expenses. Actual results could
differ from these estimates and assumptions.
L2). Enterprise Fund Restricted Cash
In accordance with Department of I -lousing and Urban Development (HUD) requirements,
the Morgan Towers Enterprise Fund maintains the following restricted cash accounts:
Reserve for replacements of $363,634 represents a monthly deposit of $3,127,
less current use for replacement, plus income earned thereon. The balance of this
reserve will be used for the future replacement of property with HUD's approval,
Residual receipts reserve of $227,690 is an accumulation of surplus cash as
calculated by HUD's Computation of Surplus Cash, Distributions and Residual
Receipts, which can be expended only with HUD's approval.
Reserve for MIP and insurance impounds of $9,656 and $6,677, respectively,
totaling $16,333, which represents amounts held for the future payment of
property and mortgage insurance.
Additionally, the Kimball Towers Enterprise Fund maintains the following HUD
restricted cash accounts:
Residual receipts reserve of $305,907 is an accumulation of surplus cash as
calculated by HUD's Computation of Surplus Cash, Distributions and Residual
Receipts, which can be expended only with I-IUD's approval.
Other restricted cash and investments totaling .$825,146 are included in the
accompanying basic financial statements.
25
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(3) Transfers In/Transfers Out
The following schedule summarizes the Commission's transfer activity:
Transfers In
Community Development
Block Grant Fund
Redevelopment
Debt Service Fund
Transfers Out Amount
HUD Program Income Special Revenue Fund $ 119,531 (a)
Low and Moderate Income Housing Fund
Redevelopment
Capital Project: Fund Redevelopment Debt Service Fund 5,408,287 (c)
Redevelopment
Debt Service Fund Redevelopment Capital Project Fund 4,201,068 (d)
Total $,1(),59Q374.9
(a) Transfer for expenditure recovery.
(b) The Low and Moderate Income Housing Fund transferred $861,863 to the
Redevelopment Debt Service Fund to fund a portion of the 1999 and 2005 Tax
Allocation Bonds (18% of series A) debt service payments that related to low and
moderate development.
(c) Transfers for operations and capital projects.
(d) To establish the 2011 Reserve subaccount as described in the indenture.
(4) Cash and Investments
861,863 (b)
Cash and investments as of June 30, 201 1 are classified in the accompanying financial
statements as follows;
Statement of Net Assets;
Cash and investments $17,212,945
Cash and investments with fiscal agent 43,723,263
Total cash and investments :S60_93( 08
Cash and investments as of June. 30, 2011 consist of the following;
Deposits with financial institutions $ 1,280,932
Investments 59,655,276
Total cash and investments $60,93. ,2
26
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
Cash and Investments, (Continued)
Investments Authorized by the California Government Code and the Commission's
Investment Policy
The table below identifies the investment types that are authorized for the Commission by
the California Government Code and the Commission's investment policy. The table also
identifies certain provisions of the California Government Code (or the Commission's
investment policy, if more restrictive) that address interest rate risk and concentration of
credit risk. This table does not address investments of debt proceeds held by fiscal agent
that are governed by the provisions of debt agreements of the Commission, rather than the
general provisions of the California Government Code or die Commission's investment
policy.
Investment Types
Authorized by State Law
Local Agency Bonds
U.S. Treasury Obligations
U.S. Agency Securities
Banker's Acceptances
Commercial Paper
Negotiable Certificates of Deposit.
Repurchase Agreements
Reverse Repurchase Agreements
Medium -Term Notes
Mutual Funds
Money Market Mutual Funds
Mortgage Pass -Through Securities
County Pooled Investment Funds
Local Agency Investment Fund (LAIF)
IPA Pools (other investment pools)
Authorized
By Investment `Maximum
Policy Maturity
Yes 5 years
Yes 5 years
Yes 5 years
Yes 180 days
Yes 270 days
Yes 5 years
Yes 1 year
No 92 days
Yes 5 years
Yes N/A
Yes N/A
Yes 5 years
Yes N/A
Yes N/A
Yes N/A
*Maximum
Percentage
Of Portfolio
None
None
None
40%
25%
30%
None
20% of base value
30%
15%
20%
20%
None
None
None
Maximum
Investment
in One Issuer
None
None
None
30%,
10%;
None
None
None
None
10%
10%
None
None
None
None
Based on state law requirements or investment policy requirements, whichever is more restrictive.
27
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(4) Cash and Investments, (Continued)
Investments Authorized by Debt Agreements
Investment of debt proceeds held by fiscal agent are governed by provisions of the debt
agreements, rather than the general provisions of the California Government Code or the
Commission's investment policy. The table below identifies the investment types that are
generally authorized for investments held by fiscal agent. The table also identifies certain
provisions of these debt agreements that address interest rate risk and concentration of
credit risk.
Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity Allowed in One issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker's Acceptances 360 days None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Investment Contracts 30 years None None
Certificates of Deposit None None None
Repurchase Agreements None None None
Mortgage Pass -Through Securities None None None
State Bonds or Notes None None None
Municipal Bonds or Notes None None None
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 Commission 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.
2S
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(4J Cash and Investments, (Continued)
Information about the sensitivity of the fair values of the Commission's investments
(including investments held by fiscal agent) to market interest rate fluctuations is
provided by the following table that shows the distribution of the Commission's
investments by maturity:
Investment Type
U.S, Agency Securities
Local Agency Investment I"und
Held by Fiscal Agent:
Treasury Coupon Securities
Money Market Fund
Local Agency Investment Fund
Commercial Paper
Money Market Mutual Funds
Total
Total
Remaining Maturity (in Months)
12 Months
or Less
$ 3,149,625
12,782,388 12,782,388
1,094,028
5,967,159
305,907
2,344,000
34,012,169
$59,655,276
13 to 24 25 to 60
Months Months
3,149,625
282,719 290,939 520,370
5,967,159
305,907
2,344,000
34,012,169
.,3.42.. .290,939. 1.669_z9.€95,
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its
obligation to the holder of the investment. This is measured by the assignment of a rating
by a nationally recognized statistical rating organization, Presented below is the minimum
rating required by (where applicable) the California Government Code, the Commission's
investment policy, or debt agreements, and the actual rating as of year end for each
investment type.
Investment `Type Total
U.S. Agency Securities
Local Agency Investment Fund (LAIF)
Held by Fiscal Agent:
Treasury Coupon Securities 1,094,028
Money Market. Fund 5,967,159
Local Agency Investment Fund 305,907
Commercial Paper 2,344,000
Money Market Mutual Funds 34,012.169
Total $59. 655 276.
$ 3,149,625
12,782,388
29
Minimum
Legal
Rating
Ratings as of Year End
Not
AAA Rated
AAA 3,149,625
N/A - 12,782,388
AAA 1,094,028
N/A
N/A
N/A
A 34,012,169
5,967,159
3(35,907
2,344,000
38 255,822. 21,399 454
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(4) Cash and Investments, (Continued)
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 Commission's investment policy
do not contain legal or policy requirements that would limit the exposure to custodial
credit risk for deposits or investments, other than the following provision for deposits:
The California Government Code requires that a financial institution secure deposits
made by state or local governmental units by pledging securities in an undivided
collateral pool held by a depository regulated under state law (unless so waived by the
governmental unit). The market value of the pledged securities in the collateral pool must
equal at least 110% of the total amount deposited by the public agencies. California law
also allows financial institutions to secure Commission deposits by pledging first trust
deed mortgage notes having a value of 150% of the secured public deposits.
For investments identified herein as held by fiscal agent, the fiscal agent selects the
investment under the terms of the applicable trust agreement, acquires the investment, and
holds the investment on behalf of the reporting government.
Investment in State Investment Pool
The Commission is a voluntary participant in the Local Agency Investment Fund (LAIF)
that is regulated by the California Government Code under the oversight of the Treasurer
of the State of California. The fair value of the Commission's investment. in this pool is
reported in the accompanying financial statements at amounts based upon the
Commission's pro-rata share of the fair value provided by LAI.F for the entire LAIF
portfolio (in relation to the amortized cost of that portfolio). The balance available for
withdrawal is based on the accounting records maintained by LAI.F, which are recorded
on an amortized cost basis.
30
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
Cat:)ital Assets
The following is a summary of capital assets for the year ended June 30, 2011:
13aiance at Balance at
July 1, 2010 Additions Deletions June 30, 2011
Government Activities:
Capital assets:
Buildings and improvements $2,450,000 - 2,450,000
Machinery and equipment 81,163 81,163
Total cost of depreciable
capital assets 2,531,1 63 - 2,531,163
Less accumulated depreciation:
Buildings and improvements (1,868,334) (81,667) (1,950,001)
Machinery and equipment (81,163) - (81,163)
Total accumulated
depreciation (1.949,497) (81,667) (2,031,164)
Depreciable capital assets, net 581,666 (81,667) _ 499,999
Capital assets not depreciated:
Land 2.050,000 - 2,050,000
Capital assets, net $2.363 ] Ei66 (81,6()7) 2,549,999
Depreciation expense in governmental activities for capital assets for the year ended
June 30, 2011 was $81,667 which was allocated to community development.
31
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(5) Capital Assets, (Continued)
Business -Type Activities:
Depreciable assets:
Buildings and improvements
Furniture and equipment
Balance at Balance at
July 1, 2010 Additions Deletions June 30, 201 1
$15,684,584
462,153
15,684,584
462,153
Total cost of depreciable
assets 16,146,737 - - 16,146,737
Less accumulated depreciation (9,045,210) (413,569) - (9.458,779)
Depreciable capital assets, net 7,101,527 (413,569) 6,687,958
Capital assets not depreciated:
Land 528,382 - 528,382
Capital assets, net $,_712294909 413,56_) 7,2 6,34(l
Depreciation expense in business -type activities for capital assets for the year ended
June 30, 2011 was $413,569 which was allocated to low and moderate housing.
32
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(6) Loans Receivable
Outstanding at
Description June 30, 2011
Copper Hills Apartments, LP $7,863,787
Plaza Manor 512,473
Single -Family Housing Rehabilitation Loan Program 190,776
Young Trust 129,778
Big Jackel Trust 54,664
Miles of Cars 639,709
Total $.9,391,187
Copper Hills Apartments, LP --- CDC Residual Receipts Note dated February 19, 1999
disclosed a loan of $2,400,000 with 3% interest per annum for 55 years, funded by
HOME and Low & Moderate Income Housing Funds. A second and junior to the CDC
Residual Receipts Note was made on June 3, 1999 for $4,400,000, referred to as CDC
Rehabilitation Note with 3% interest per annum for 55 years and funded by Low &
Moderate Income Housing Fund. These loans were made to acquire, develop, rehabilitate
and operate the multi -family apartments located at "Q" Avenue in National City, Ca. This
project will contain 134 apartment dwelling units following rehabilitation and renovation.
Plaza Manor -• CDC of the City of National City entered into a loan agreement with
Plaza Manor Preservation, LP on December 18, 2001 in the amount of $500,000 with 3%
compound interest per annum and shall end on April 15, 2032. The borrower has
acquired a property located in the City of National City with aid of the said loan and with
the intention to operate a 372 unit project as a very low and low income housing project.
Funding sources for this loan were HOME (48%) and Low & Moderate Income I -lousing
Funds (52%).
Single -Family housing Rehabilitation Loan Program — Prior to 2005, the CDC of the
City of National City provided loans to eligible low-income homeowners to make repairs
and basic home improvements that maintain the quality of their housing and created a
positive effect in the surrounding neighborhood. Loans were offered at below -market
interest rates utilizing federal HOME Investment Partnerships Program funds.
Young Trust --- A Promissory Note secured by Deed of Trust was made on December 17,
2003 between CDC of the. City of National City and Robert Dale Young and Deborah
Mae Young in the amount of $230,000 with interest of 5% per year. This loan is in
reference to the California Community Redevelopment Law, where CDC appeals to
redevelop a portion of the National City Redevelopment project, which is bounded by the
location at Harrison Avenue, National City.
Big Jackel Trust — CDC of the City of National City entered into a Memorandum of
Understanding with Big Jackel Trust to establish a rehabilitation loan for an amount not-
33
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(6) Loans Receivable, (Continued)
to -exceed $200,000 on April 4, 1995. The loan was not subject to principal payments and
did not accrue interest for the initial two years. For eighteen years thereafter, the loan
would be subject to regular monthly payments with 3% interest per annum. The purpose
of the loan was to rehabilitate and enhance Big Ben Market in National City with
additional storage space, improved signage and lighting, exterior and interior paint, and
repaving of parking surfaces and striping.
Miles of Cars — CDC of the City of National City entered into Freeway Sign
Rehabilitation Loan Agreement with the Mile of Cars Association, a nonprofit, mutual
benefit corporation on July 8, 2010 for the amount of $660,000 with 2% interest per
annum with a term of 20 years from the date of initial disbursement. The loan requires
quarterly payments of principal and interest. The purpose of the loan was to rehabilitate
existing freeway signage equipment and improvements.
Casa Familiar -- CDC of the City of National City entered in an Acquisition,
Rehabilitation and Permanent Loan Agreement with Casa Familiar, Inc. on October 1.,
2009 amounting to .$516,900 with 2% per annum from the date of the disbursement.
Interest shall accrue, however, no payments shall be due under the CDC Note until July 1,
2011., and annually on July 1 of each year during the term of the CDC note, and Borrower
shall make payments to the CDC in the manner provided in the CDC note until 55 years.
This loan was intended to acquire, rehabilitate and permanently finance the property
located at 304 East Fifth Street, National City, CA and is comprised entirely of HUD
HOME funds all of which shall be used for HOME eligible purposes. As of June 30,
2011, an allowance has been established for the entire amount of the note outstanding as
collection of this note is not expected at this time.
Plaza City — CDC of the City of National City entered into a Loan Agreement. with Plaza
City Apartments, LP on November 1, 2005 in the amount of $2,700,000 with 3% interest
per annum for 55 years. It was amended per Resolution No. 200E-202 dated September
19, 2006 which increased the loan amount by $722,000 for a total of $3,422,000, This
loan will be used by the borrower to pay the balance of the purchase price and additional
costs relating to the acquisition, demolition and development of certain real property
located at 1535 Plaza Blvd., National City, CA. As of June 30, 2011, an allowance has
been established for the entire amount of the note outstanding as collection of this note is
not expected at this time.
Constellation -- CDC of the City of National City entered into a Loan Agreement with
Constellation Property Group (A Avenue) LP, a Delaware limited partnership, on
December 13, 2007 for the amount of $2,500,000 with interest of 10%, non -compounded,
requiring no interim payment of principal and interest: and maturing on December 13,
2010. The purpose of the loan was to assist with the development of the Centro
Condominium project on A Avenue in National City -- a 91,199 square foot, four story
condominium project housing 61 residential units and 102 parking spaces. As of June 30,
2011, an allowance has been established for the entire amount of the note outstanding as
collection of this note is not expected at this time.
34
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL, CITY
Notes to Basic Financial Statements
(Continued)
(7) Lon -Term Liabilities
The following is a summary of changes in long-term liabilities for the year ended June 30,
2011:
Balance
Balance July June 30,
1, 2010 Additions Deletions 201 1
Governmental Activities:
Bonds payable:
1999 Tax Allocation Bonds $4,090,000
2004 Series Tax Allocation Bonds 4,620,000
2005 Series A Tax Allocation
Bonds
2005 Series B Tax Allocation
Bonds
2011 Tax Allocation Bonds
HUD 108 Bond 2003 A
Total bonds payable
Advance from City
Amounts Amount Due
Due Within Beyond One
One Year Year
(125,000) 3,965,000 130,000 3,835,000
(275,000) 4,345,0(10 285,000 4,060,000
18,905,000 - (2,125,000) 16,780,000 3,060,000 13,720,000
9,840,000
39,660,000
5,750,000
- 9,840,000 - 9,840,0(10
- 39,660,000 - 39,660,000
(245,000) 5,505,000 260,000 5,245 000
43,205,000 39,660,000 (2,770,000) 80,095,000 3 735,000 76,360,000
739,966 - 739,966 _ 328,750 411,216
Total governmental activities 43,944,966 39.660,000 (2,770,000) 80,834,966 4 063,750 76,771,216
Business -Type Activities:
Notes Payable 2.481,662 (204,777) 2,276,885
Total business -type activities 2 481,662 _(204,777) _ 2.276,885
218,492 2,058,393
218,492 2,058 393
Total $45}42Ji,6.23. 39,00A400 :..(2,974,277_) 8_3,11 3 151. 4,282,242 78,829.,60
1999 Tax Allocation Bonds
In June 1999, the Commission issued $5,050,000 in Tax Allocation Bonds for the Q
Avenue Redevelopment project. The bonds consist of $1,085,000 in serial bonds which
mature from 2000 to 2010 in amounts ranging from $45,000 to $125,000, and $1,425,000
in term bonds which mature in 2019, and $2,540,000 in term bonds which mature in 2029.
Interest is payable semi-annually on February 1 and August 1, at interest rates ranging
from 3.30%, to 4.50°Jo
35
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(7) Long -Term Liabilities, (Continued)
The annual debt service requirements for the 1999 Tax Allocation Bonds outstanding at
June 30, 2011 are as follows:
Fiscal Year Principal Interest Total
2012 $ 130,000 198,175 328,175
2013 135,000 191,550 326,550
2014 145,000 184,550 329,550
2015 150,000 177,176 327,176
2016 155,000 169,550 324,550
2017 165,000 161,549 326,549
2018 175,000 153,050 328,050
2019 180,000 I44,1.75 324,175
2020 190,000 134,925 324,925
2021 200,000 125,050 325,050
2022 210,000 114,543 324,543
2023 220,000 103,525 323,525
2024 235,000 91,866 326,866
2025 245,000 79,566 324,566
2026 260,000 66,625 326,625
2027 270,000 53,044 323,044
2028 285,000 38,822 323,822
2029 300,000 23,831 323,831
2030 315,000 8,072 323,072
Total 53}965,00() 2,219,644 6,148,644
36
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(7) Long -Term Liabilities, (Continued)
2004 Tax Allocation Bonds
In June 2004, the Commission issued $5,860,000 in Tax Allocation Bonds to finance a
portion of the cost to construct a fire station, library, and community art center. The
bonds consist of $3,045,000 in serial bonds which mature from 2005-2015 in amounts
ranging from $220,000 to $330,000, and $1,085,000 in serial bonds which matures in
fiscal years 2027-2033 in amounts ranging from $345,000 to $$465,000. Interest is paid
semi-annually on February 1 and August 1, at interest rates ranging from 1.50% to 5,50%.
The annual debt service requirements for the 2004 Tax Allocation Bonds outstanding at
June 30, 2011 are as follows:
Fiscal Year Principal Interest Total
2012 $ 285,000 210,010 495,010
2013 295,000 199,750 494,750
2014 305,000 188,540 493,540
2015 315,000 176,340 491,340
2016 330,000 163,425 493,425
2017 - 149,400 149,400
2018 149,400 149,400
2019 - 149,400 149,400
2020 149,400 149,400
2021 149,400 149,400
2022 - 149,400 149,400
2023 149,400 149,400
2024 149,400 149,400
2025 149,400 149,400
2026 149,400 149,400
2027 345,000 149,400 494,400
2028 360,000 134,150 494,150
2029 380,00() 114,150 494,150
2030 400,000 94,150 494,150
2031 420,000 74,150 494,150
2032 445,000 49,150 494,150
2033 465,000 29.150 494,150
Total $4,345,000 3}0764,365 7,42.1,365.
37
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(7) Long -Term Liabilities, (Continued).
2005 Series A Tax Allocation Bonds
In January 2005, the Commission issued $27,940,000 in Tax Allocation Bonds, Series A
for the purpose of refunding the Commission's 2001 Series A Tax Allocation Bonds.
Interest on the bonds is payable semiannually on August 1 and February 1, commencing
August 1, 2005, at rates ranging from 2.9% to 4.85% per annum.
The annual debt service requirements for the 2005 Series A Tax Allocation Bonds
outstanding at June 30, 2011 are as follows:
Fiscal Year Principal Interest Total
2012 $ 3,060,000 719,500 3,779,500
2013 3,200,000 577,050 3,777,050
2014 3,345,000 424,843 3,769,843
2015 3,505,000 262,115 3,767,115
2016 3,670,000 88,997 3,758,997
Total ;;,16.,280 ()(){) 2,072 .505 118.852,505
2005 Series l3 Tax Allocation Bonds
In January 2005, the Commission issued .$9,840,000 in Tax Allocation Bonds, Series B
for the purpose of refunding the Commission's 2001 Series B Tax Allocation Bonds.
Interest on the bonds is payable semiannually on August 1 and February 1, commencing
August 1, 2005, at rates ranging from 3.8% to 5.25% per annuin.
38
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(7) Long -Term Liabilities, (Continued)
The annual debt service requirements for the 2005 Series B Tax Allocation Bonds
outstanding at June 30, 2011 are as follows:
Fiscal Year Principal Interest Total
2012 $ - 444,693 444,693
2013 - 444,693 444,693
2014 - 444,693 444,693
2015 - 444,693 444,693
2016 444,693 444,693
2017 760,000 444,693 1,2,04,693
2018 790,000 415,813 1,205,813
2019 825,000 385,003 1,210,003
2020 855,000 352,003 1,207,003
2021 890,000 317,803 1,207,803
2022 570,000 277,753 847,753
2023 595,000 253,528 848,528
2024 780,000 227,943 1,007,943
2025 815,000 194,013 1,009,013
2026 855,000 153,263 1,008,263
2027 555,000 110,513 665,513
2028 435,000 81,375 516,375
2029 250,000 58,538 308,538
2030 200,000 45,413 245,413
2031 210,000 34,913 244,913
2032 220,000 23,888 243,888
2033 235,000 12,338 247,338
Total 840,0QQ 5 612 258 1.5,,452.25_8
39
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(7) Long -Term Liabilities, (Continued)
2011 Tux Allocution Bonds
In February 2011, the Commission issued $39,660,000 in Tax Allocation Bonds for the
purpose of fund redevelopment and low and moderate income housing projects within the
Project Area. The bonds consist of $9,790,000 in serial bonds which mature from 2012-
2021 in amounts ranging from $325,000 to $1,825,000, $5,830,000 in term bonds which
mature in fiscal year 2024, and $24,040,000 terms bonds which mature in 2032. Interest
is paid semi-annually on February I and August 1, at interest rates ranging from 3.00% to
5.75%.
Fiscal Year Principal Interest Total
2012 $ 1,054,513 1,054,513
2013 325,000 2,565,031 2,890,031
2014 325,000 2,555,281 2,880,281
2015 320,000 2,542,281 2,862,281
2016 315,000 2,529,481 2,844,481
2017 1,145,000 2,515,700 3,660,700
2018 1,255,000 2,458,450 3,713,450
2019 1,315,000 2,395,700 3,710,700
2020 1,445,000 2,329,950 3,774,950
2021 1,520,000 2,254,088 3,774,088
2022 1,825,000 2,166,688 3,991,688
2023 1,930,000 2,061,750 3,991,750
2024 1,890,000 I ,936,300 3,826,300
2025 2,010,000 1,813,450 3,823,450
2026 2,140,000 1,682,800 3,822,800
2027 2,285,000 1,533,000 3,818,000
2028 2,505,000 1,373,050 3,878,050
2029 2,880,000 1,197,700 4,077,700
2030 3,095,000 996,100 4,091,100
2031 3,635,000 779,450 4,414,450
2032 3,635,00(1 525,000 4,160,000
2033 3,875,000 271.250 4,136.250
Total $39.660,000 39,537,013
40
7_9,197013
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(7) Long -Term Liabilities, (Continued)
2003 A HUD 108 Bond
The City issued $6,900,000 of HUD 108 Bonds, Series A on August 7, 2003 to provide
funds for the construction of a fire station. The bonds mature annually through 2024 in
the amount ranging from $170,000 to $635,000 beginning in 2005. The interest of the
bonds is payable semi-annually on each February 1 and August 1, commencing
February 1, 2004.
The annual debt service payments for the bonds outstanding are as follows,
Fiscal Year Principal Interest Total
2012 $ 260,000 286,413 546,413
2013 280,000 274,117 554,117
2014 305,000 260,227 565,227
2015 325,000 244,850 569,850
2016 350,000 227,967 577,967
2017 380,000 209,233 589,233
2018 410,000 188,528 598,528
2019 440,000 165,847 605,847
2020 475,000 141,044 616,044
2021 510,000 113,975 623,975
2022 545,000 84,640 629,640
2023 590,000 52,770 642,770
2024 635,000 18.066 653,066
Total $5,505 ()0 2 267,677 2,772.077.
Advance from City
In 2010 the City of National City advanced to the Community Development Commission
$739,966 at an interest rate of 3.96% to be paid back over 10 years. Accrued interest and
principal payments are due on an annual basis. The amount outstanding as of June 30,
201.1 is $739,966,
Note Payable
The mortgage payable is secured by a deed of trust, bears interest at 6.5% and is payable
to GMAC in the original amount of $3,71.8,928, The note is being repaid in monthly
installments of .$30,00.5, including interest, through August 2019. The note is insured by
HUD and is secured by substantially all property and equipment of the Morgan Towers
Enterprise Fund. The principal outstanding at June 30, 2011 was $2,276,885,
41
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(7) Long -Term Liabilities, (Continued)
The annual principal payments of the note payable outstanding at June 30, 2011 are as follows:
Fiscal Year Principal Interest Total
2012 $ 218,492 141,568 360,060
2013 233,124 126,936 360,060
2014 248,736 111,324 360,060
2015 265,395 94,665 360,060
2016 283,170 76,890 360,060
2017 302,136 57,924 360,060
2018 322,368 37,692 360,060
2019 343,957 16,103 360,060
2020 59,507 503 60,010
Total $,276663,605 2,940,490
Defeasance of Debt
As of June 30, 201 I, the outstanding balance of defused issues are as follows:
1998 Tax Allocation Bonds
$10,165,000
(8) Commitments and Contingencies
Grant funds received by the Commission are subject to review by the grantor agencies.
Such audits could lead to requests for reimbursements to the grantor agencies for
expenditures disallowed under terms of the grant. The management of the Commission
believes that such disallowances, if any, will not be significant.
(9) National City Joint Powers Financing Authority
The National Joint Powers Financing Authority ("IPFA.") was created pursuant to a joint
exercise of powers agreement entered into by and between the Commission and the City
of National City on April 16, 1991. The purpose of such agreement was to provide for the
financing and construction of the new police facility and Community Center. The JPFA
is administered by a commission consisting of' the members of the City Council and all
voting power of JPFA resides in the Commission.
42
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(10) Pledged Revenues
The Commission has a number of debt issuances outstanding that are collateralized by the
pledging of certain revenues. The amount and term of the remainder of these
commitments are indicated in the debt service to maturity tables presented in the
accompanying notes. The purposes for which the proceeds of the related debt issuances
were utilized are disclosed in the debt descriptions in the accompanying notes. For the
current year, debt service payments as a percentage of the pledged gross revenue (or net
of certain expenses where so required by the debt agreement) are indicated in the table
below. These percentages also approximate the relationship of debt service to pledged
revenue for the remainder of the term of the commitment:
Description of
Pledged Revenue
Tax increment revenues
Annual Amount of
Pledged Revenue
(net of expenses,
where required)
$11,070,963
Annual Debt
Service Payments
(of all debt secured
by this revenue)
Debt Service
as a Percentage of
Pledged Revenue
4,682,338 42%
(11) Recent Changes in Legislation Affecting California Redevelopment Agencies
On June 29, 20II, the Governor of the State of California signed Assembly Bills XI 26
and 27 as part of the State's budget package. Assembly Bill XI 26 requires each
California redevelopment agency to suspend (effective July 1, 2011) nearly all activities
except to implement existing contracts, meet already -incurred obligations, preserve its
assets and prepare for the impending dissolution of the agency. Assembly Bill X1 27
provides a means for redevelopment agencies to continue to exist and operate by means
of a Voluntary Alternative Redevelopment Program by adopting an ordinance agreeing to
make certain payments to the County Auditor Controller in fiscal year 2011-12 and
annual payments each fiscal year thereafter.
43
COMMUNITY llEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
Recent Chan Yes in Legislation Affectin Y California Redevelopment A 7encies
(Continued)
The League of California Cities and the California Redevelopment Association (CRA)
filed a lawsuit on July 18, 2011 on behalf of cities, counties and redevelopment agencies
petitioning the California Supreme Court to overturn Assembly Bills XI 26 and 27 on the
grounds that they violate the California Constitution. On August 11, 2011, the California
Supreme Court issued a stay of all of Assembly Bill XI 27 and most of Assembly Bill X1
26. The California Supreme Court stated in its order that "the briefing schedule is
designed to facilitate oral argument as early as possible in 2011, and a decision before
January 15, 2012."
Because the stay provided by Assembly Bill XI 26 only affects enforcement, each agency
must adopt an Enforceable Obligation Payment Schedule prior to September 30, as
required by the statute. Enforceable obligations include bonds, loans and payments
required by the federal or State government; legally enforceable payments required in
connection with agency employees such as pension payments and unemployment
payments, .judgments or settlements; legally binding and enforceable agreements or
contracts; and contracts or agreements necessary for the continued administration or
operation of the agency that are permitted for purposes set forth in AB I X 26.
On August 2, 201 1, City Ordinance No. 360 was adopted, indicating that the Agency will
comply with the Voluntary Alternative Redevelopment Program in order to permit the
continued existence and operation of the agency, in the event Assembly Bills X 1 26
and/or 27 are upheld as constitutional. The initial payment by the agency is estimated to
be $2,752,650 with one half due on January 15, 2012 and the other half due May 15,
2012. Thereafter, an estimated $655,000 will be due annually. The semi-annual
payments will be due on January 1.5 and May 15 of each year and would increase or
decrease with changes in tax increment. Additionally, an increased amount would be due
to schools if any new debt is incurred. Assembly Bill XI 27 allows a one-year reprieve
on the agency's obligation to contribute 20% of tax increment to the low -and -moderate -
income housing fund so as to permit the Agency to assemble sufficient funds to make its
initial payments.
Management believes that the Agency will have sufficient funds to pay its obligations as
they become due during the fiscal year ending June 30, 2012. The nature and extent of
the operation of redevelopment agencies in the State of California beyond that fiscal year
are dependent upon the outcome of litigation surrounding the actions of the state.
44
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to Basic Financial Statements
(Continued)
(12) Prior Period Adjustment
The accompanying financial statements include adjustments that resulted in the
restatements of beginning fund balances/net assets. The following summarizes the effect
of the prior period adjustments to beginning fund balance as of July 1, 2010:
Fund balance -beginning of year, as
previously reported
To adjust notes receivable for notes
previously not recorded and to
adjust note balances for allowance
for doubtful accounts,
Fund balance -beginning of year, as
restated
Capital Projects
Fund --
Redevelopment
Fund
$12,971,597
(2,500,000)
$_1(),4_7,1_597
Low and
Moderate
Income HOME
Housing Program
Special Special
Revenue Revenue
Fund Fund
12,874,593 4,21 6,400
1,431,129 (817,574)
_.14,305;722 3 398,,826
The following summarizes the effect of the prior period adjustments to beginning net
assets as of July 1, 2010:
Net Assets -beginning of year, as previously reported
To adjust notes receivable for notes previously not recorded
and to adjust note balances for allowance for doubtful
accounts.
Net Assets -beginning of year, as restated
45
Government -Wide
Statement of Net Assets
$ 6,244,725
(10,1 12,488)
$_.(3.,_8.C74763)
REQUIRED SUPPLEMENTARY INFORMATION
46
(This page intentionally left blank)
47
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Notes to the Required Supplementary Information
Year ended June 30, 2011
(1) Budgetary Information
The Commission adopts an annual budget prepared on the modified accrual basis of
accounting for all governmental fund types. The Executive Director is required to
prepare and submit to the Commission Board of Directors the annual budget of the
Commission and administer it after adoption. Any revisions that alter the total
appropriations must be approved by the Board of Directors. All annual appropriations
lapse at fiscal year-end except for unexpended purchase orders or contracts and
unexpended appropriations for capital projects. Total expenditures may not legally
exceed total appropriations at the fund level.
48
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Community Development Block Grant - Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2011
Revenues:
Subventions and grants
Total revenues
Budgeted Amounts
Original Final
1,424,740 1,424,740
1,424,740 1,424,740
Actual
Variance with
Final Budget
Positive
(Negative)
1,644,864 220,124
1,644,864 220,124
Expenditures:
Current:
Personnel services 249,608 249,608 211,696 37,912
Community development 528,450 528,450 235,542 292,908
Capital outlay 1,227,925 1,227,925 1,015,564 212,361
Debt Service:
Principal - - 245,000 (245,000)
Interest and fiscal charges - - 208,181 (208,181)
Total expenditures
Excess (deficiency) of revenues
over expenditures
2,005,983 2,005,983 1,915,983 90,000
(581,243) (581,243) (271,119) 310,124
Other financing sources (uses):
Transfers in 119,531 119,531
Transfers to the City (123,960) (123,960) (123,960)
Total other financing sources (uses) (123,960) (123,960) (4,429) 119,531
Net change in fund balance (705,203) (705,203) (275,548) 429,655
Fund balance, beginning of year 275,548 275,548 275,548
Fund balance (deficit), end of year $ 2429,655) (429,655) - 429,655
19
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Section 8 Housing Assistance - Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2011
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues:
Subventions and grants $ 9,514,464 9,514,464 9,6I8,037 103,573
Interest income 7,500 7,500 (7,500)
Total revenues 9,521,964 9,521,964 9,618,037 96,073
Expenditures:
Current:
Personnel services 852,610 852,610 820,364 32,2.46
Community development 8,416,906 8,416,906 8,404,633 12,273
Total expenditures 9,269,516 9,269,516 9,224,997 44,519
Net change in fund balance 252,448 252,4.48 393,040 140,592
Fund balance, beginning of year 1,079,035 1,079,035 1,079,035
year.31 - ,. _ 1,472,075 140,592
Fund balance, end of $ 1,331,483 1,331,483 _.,
50
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
HUD Program Income - Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2011
Revenues:
Interest income
Other income
Total revenues
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 19,700 19,700 10,221 (9,479)
100 100 202,582 202,482
19,800 19,800 212,803 193,003
Expenditures:
Current:
Community development 25,157 25,157 25,156 1
Debt service:
Principal 245,000 245,000 245,000
Interest and fiscal charges 306,650 306,650 71,163 235,487
Total expenditures 576,807 576,807 96,319 480,488
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
(55 7,007) (557,007) 116,484 673,491
- (119,531) (119,531)
- (119,531) (119,531)
(557,007) (557,007) (3,047) 553,960
1,803,132 1,803,132 1,803,132
1,2461125 1,246,125 1,800,085 553,960
51
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
I-IOME Program - Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2011
Budgeted Amounts
Original Final
Revenues:
Subventions and grants $ 636,617
Interest income -
Other income 64,143
"total revenues
Expenditures:
Current:
Personnel services
Community development
Total expenditures
Net change in fund balance
Fund balance, beginning of year, as restated
Fund balance, end of year
636,617
64,143
Actual
1,155,914
73,340
Variance with
Final Budget
Positive
(Negative)
519,297
73,340
(64,143)
700,760 700,760 1,2,29,254 528,494
103,203
1,581,150
1,684,353
(983,593)
103,203 69,100
1,581,150 1,263,336
1,684,353 1,332,436
(983,593) (103,182)
3,398,826 3,398,826 3,398,826
2,415,233 2,415,233 3,295,644
52
34,103
317,814
351,917
880,411
880,411
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Low and Moderate Income Housing Program - Special Revenue Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2011
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
Revenues:
Property tax allocated $ 2,817,500 2,817,500 2,767,741 (49,759)
Interest income 1,553 1,553 244,321 242,768
Other income 239,054 239,054 32,974 (206,080)
Total revenues
3,058,107 3,058,107
3,045,036 (13,071)
Expenditures:
Current:
Personnel services 219,979 219,979 133,754 86,225
Community development 2,086,987 2,086,987 250,494 1,836,493
Total expenditures 2,306,966 2,306,966 384,248 1,922,718
Excess (deficiency) of revenues
over expenditures
751,141 751,141
2,660,788 1,909,647
Other financing sources (uses):
Transfers out (861,864) (861,864) (861,863) 1
Total other financing sources (uses) (861,864) (861,864) (861,863) 1
Net change in fund balance (110,723) (110,723) 1,798,925 1,909,648
Fund balance, beginning of year, as restated 14,305,722 14,305,722 14,305,722 -
Fund balance, end of year $ 14,194,999 14,194,999 16,104,647 1,909,648
53
SUPPLEMENTARY SCHEDULES
54
COMMUNITY DEVELOPMENT COMMISSION OF TIlE CITY OF NATIONAL CITY
Redevelopment Fund - Debt Service.. Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 201 1
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
Revenues:
Property tax allocated $ 11,270,000 11,270,000 11,070,963 (199,037)
Interest income 6,212 6,212 8,836 2,624
Total revenues 11,276,212 11,276,212 11,079,799 (196,413)
Expenditures:
Current:
Community development 2,597,803 2,597,803 2,613,680 (15,877)
Debt service:
Principal payments 2,525,000 2,525,000 2,525,000
Interest and fiscal charges 1,707,653 1,707,653 1,706,646 1,007
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning of year
Fund balance, end of year
6,830,456 6,830,456 6,845,326 (14,870)
4,445,756 4,445,756 4,234,4-73 (211,283)
861,865 5,062,933 5,062,9.31 (2)
(5,408,287) (5,408,287) (5,408,287)
(4,546,422) (34-5,354) (345,356) (2)
(100,666) 4,100,402 3,889,117 (211,285)
4,771,650 4,771,650 4,771,650
88 2,05 .___....60 ..�__ - .. _ 2l1,285)
4,670,984 8,872,052 8,660,1b7 (, ,_-�,
55
COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Redevelopment Fund - Capital Projects Fund
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual
For the Year Ended June 30, 2011
Budgeted Amounts
Original Final
Revenues:
Subventions and grants $ 201,916
Interest income 92,000
Other income 179,422
Total revenues 473,338
Expenditures:
Current:
Personnel services
Community development
Capital outlay
Debt service:
Cost of issuance
Interest and fiscal charges
Total expenditures
2,610,661.
1,289,959
4,178,309
11,250
201,916
92,000
179,422
473,338
2,6 10,661
1,289,959
4,178,309
460,686
11,250
8,090,179 8,550,865
Actual
56,896
126,764
34,233
Variance with
Final Budget
Positi ve
(Negative)
(145,020)
34,764
(145,189)
217,893 (255,445)
2,042,585
936,108
1,927,618
439,442
11,250
568,076
353,851
2,250,691
21,244
5,357,003 3,193,862
Excess (deficiency) of revenues
over (under) expenditures (7,616,841) (8,077,527) (5,139,1.10) 2,938,4117
Other financing sources:
Transfers in
Transfers out
Transfer to City of National City
Original discount on issuance
Issuance of long-term debt
Total other financing sources
Net change in fund balance
Fund balance, beginning of year, as restated
Fund balance, end of year
5,408,287
(811,157)
5,408,287
(4,201,068)
(811,157)
(1,056,085)
39,660,000
4,597,130 38,999,977
(3,019,711) 30,922,450
10,471.,597 10,471,597
$, 7,451,886 41,3394,047
56
5,408,287
(4,201,068)
(811,157)
(1,056,085)
39,660,000
38,999,977
33,860,867 2,938,417
10,471,597
4.4,332,464 2,938,417
COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF NATIONAL CITY
Supplemental Schedule of Excess Surplus Determination
Per Audited
Basic Financial
Statements
June 30, 201 1
Fund Balance - June 30, 2011 $ 1.6,104,647
Less Unavailable Amounts:
Land held for resale (360,000)
Loans, net of deferred interest income (6,146,578)
Available Low/Moderate Income Housing Funds (deficit) 9,598,069
Limitation (Greater of $1,000,000 or Four Years Set -Aside):
Set -aside for last four years
2010 - 2011
2009 - 2010
2008 - 2009
2007 -- 2008
Total set -aside for last four years
Base limitation
Greater Amount
Computed Excess Surplus - June 30, 2011
2,767,741
2,796,072
2,947,556
2,941,607
11,452,976
1,000,000
11,452,976
Note: This schedule is prepared in accordance with Health & Safety Code 33333.10(h)(3).
This schedule is prepared using the modified accrual basis of accounting described in
Note I to the basic financial statements of the Community (Development Commission
of the City of National City (the "Commission"). This schedule includes financial
data from all the Low and Moderate. Income Housing Special Revenue Funds of the
Commission.
57
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58
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 9261,2
94.9 474-2020 ph
949-263-5520 fx
www.mhm-pc.corn
Board of Directors
Community Development Commission of the City of National City
National City, California
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
We have audited the governmental activities, business -type activities and each major fund of the
Community Development Commission of the City of National City (the "Commission"), a
component unit of the City of National City, California, as of and for the year ended June 30,
2011, which collectively comprise the Commission's basis financial statements, and have issued
our report thereon dated December 21, 2011. 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.
Internal Control Over Financial Reporting
Management of Commission is responsible for establishing and maintaining effective internal
control over financial reporting. In planning and performing our audit, we considered the
Commission's internal control over financial reporting as a basis for designing our auditing
procedures for the purpose of expressing our opinion on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the Commission's internal control over
financial reporting. Accordingly, we do not express an opinion on the effectiveness of the
Commission's internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct misstatements on a timely basis. A material weakness is a
deficiency, or combination of deficiencies, in internal control, such that there is a reasonable
possibility that a material misstatement: of the entity's financial statements will not be prevented,
or detected and corrected on a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and was not designed to identify all deficiencies in
internal control over financial reporting that might be deficiencies, significant deficiencies or
material weaknesses. We did not identify any deficiencies in internal control over financial
reporting that we consider to be material weaknesses, as defined above.
59
Board of Directors
Community Development Commission of the City of National City
Page Two
A significant deficiency is defined to be a deficiency, or a combination of deficiencies, in
internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance. The items described in the accompanying Schedule
of Findings and Recommendation as item (2011-01) conforms to this definition.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Commission's financial statements
are free of material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts and grant agreements, noncompliance with which could have a direct
and material effect on the determination of financial statement amounts. Such provisions
included those provisions of laws and regulations identified in the Guidelines for Compliance
Audits of California Redevelopment Agencies, June 20]1, issued by the State Controller and as
interpreted in the Auditing Procedures for Accomplishing Compliance Audits of California
Redevelopment Agencies, August 2011, issued by the Governmental Accounting and Auditing
Committee of the California Society of Certified Public Accountants. However, providing an
opinion on compliance with those provisions was not an objective of our audit and, accordingly,
we do not express such an opinion. In our opinion, the Commission complied, in all material
respects, with the compliance requirements referred to above that arc applicable for the year
ended June 30, 2011, except for certain matters of noncompliance which are described in the
accompanying Schedule of Findings and Recommendation as item (2011-02 and 2011-03).
This report is intended solely for the information and use of the Board of Directors,
Commission's management and the State Controller and is not intended to be and should not be
used by anyone other than these specified parties.
Irvine, California
December 21, 2011
60
•
IV41.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 9261.2
949-474-2020 ph
949-263-5520 fx
www.mOrn-pc.conn
Board of Directors
Community Development Commission of the City of National City
National City, California
REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A
DIRECT AND MATERIAL EFFECT AND ON INTERNAL CONTROL OVER
COMPLIANCE IN ACCORDANCE WITH GUIDELINES FOR COMPLIANCE
AUDITS OF CALIFORNIA REDEVELOPMENT AGENCIES, JUNE 2011, ISSUED
BY THE STATE CONTROLLER
Indeuendent Auditors' Report
Compliance
We have audited the Community Development Commission of the City of National City (the
"Commission"), a component unit of the City of National City, California, compliance with the
California Health and Safety Code as required by Section 33080.1 for the year ended June 30,
2011. Compliance with the requirements referred to above is the responsibility of Agency's
management. Our responsibility is to express an opinion on Commission's compliance based on
our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted
in the United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and
Guidelines for Compliance Audits of California Redevelopment Agencies, June 2011, issued by
the State Controller and as interpreted in the Auditing Procedures for Accomplishing Compliance
Audits of California. Redevelopment Agencies, August 2011, issued by the Governmental
Accounting and Auditing Committee of the California Society of Certified Public Accountants.
Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the compliance requirements referred to above that could have a
material effect on the Commission has occurred. An audit includes examining, on a test basis,
evidence about the Agency's compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide
a legal determination of the Commission's compliance with those requirements. In our opinion,
the Commission complied, in all material respects, with the compliance requirements referred to
above that are applicable for the year ended June 30, 2011, except for certain matters of
noncompliance which are described in the accompanying Schedule of Findings and
Recommendation as item (2011-02 and 20 1 1 -03).
Internal Control Over Compliance
Management of the Commission is responsible for establishing and maintaining effective
internal control over compliance with the compliance requirements referred to above. In
planning and performing our audit, we considered the Commission's internal control over
compliance to determine the auditing procedures for the purpose of expressing our opinion on
compliance, but not for the purpose of expressing an opinion on the effectiveness of internal
control over compliance, Accordingly, we do not express an opinion on the effectiveness of the
Commission's internal control over compliance.
61
Board of Directors
Community Development Commission of the City of National City
Page Two
A deficiency in internal control over compliance exists when the design or operation of a control
does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance on a timely basis. A material
weakness in internal control over compliance is a deficiency, or combination of deficiencies in
internal control over compliance, such that there is a reasonable possibility that material
noncompliance with a compliance requirement will not be prevented, or detected and corrected,
on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal
control that might be deficiencies, significant deficiencies, or material weaknesses in internal
control over compliance.
We did not identify any deficiencies in internal control over compliance that we consider to he
material weaknesses, as defined above.
A. significant deficiency is defined to be a deficiency, or a combination of deficiencies, in
internal control that is less severe than a material weakness, yet important enough to merit
attention by those charged with governance. The items described in the accompanying Schedule
of Findings and Recommendation as item (2011-02 and 2011-03) conforms to this definition.
This report is intended solely for the information and use of the Board of Directors,
Commission's management and the State Controller and is not intended to be and should not be
used by anyone other than these specified parties,
Irvine, California
December 21, 201
62
COMMUNITY DEVELOPMENT COMMISSION OFTHECITY OF NATIONAL CITY
Schedule of Findings and Recommendations
Year ended June 30, 201 I
(2010-01) Reportinu of Notes Receivable
During the audit, Finance Department and Community Development Commission
(CDC) staff evaluated redevelopment and housing loans issued by the CDC. As a
result of staff's evaluations, it was determined that many loans issued were unlikely to
result in cash collection by the CDC due to the structure of the loan agreements, As a
result, staff determined that the values of loans issued were in many cases less than
the actual amount of money likely to be repaid to the CDC and where appropriate,
allowance for doubtful accounts were established in order for the value of the loans
reported to equal the amount of cash estimated to be collected in future years. This
analysis resulted in an adjustment to beginning fund balance and net assets as the
structure of these loans had not changed from previous years.
Recommendation
We recommend that Community Development Commission and City Finance
Department staff develop policies and procedures for communicating, documenting,
and recording of significant loan transactions to insure that activities of the
Commission are properly reflected in the accounting records. These policies and
procedures should also include enhanced monitoring controls over the loans issued to
ensure repayment is appropriately recorded, that the monies arc being used in
accordance with the agreements terms and conditions, and that loans are periodically
evaluated for collectability.
.(20I I-02) Land Held for Resale
There is one parcel of land held for resale purchased with low and moderate income
housing funds that were held beyond five years. Health & Safety Code §33334.16
requires Agencies to initiate activities to develop properties purchased with low and
moderate income housing funds within five years from the date of acquisition. If
development activities have not begun within this period, the legislative body may
adopt a resolution extending the period for one time, not to exceed five years. The
parcel was purchased in 2003 and had not been sold as of June 30, 2011. We were
also not provided any evidence that a resolution was adopted extending the time
period.
Recommendation
We recommend that the Commission take the necessary actions to comply with the
Health & Safety Code §33334.16.
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COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY
Schedule of Findings and Recommendations
Year ended June 30, 2011
(2010-03) Reconciliation of State Controllers Report to Audit Financial Statements
The Commission is required to submit a State Controllers report on the Commissions
financial results each year. Health & Safety Code §53891 and §53892 states that the
Commission is required to submit a complete State Controllers report in addition to
audited financial statements of the Commission. The State Controllers report should
agree to the audited financial statements submitted to the State Controller, In
reconciling the June 30, 2010 State Controllers Report to the 2010 audited financial
statements, we found certain amounts reported that did not agree to the audited
financial statements.
Recommendation
We recommend that the Commission have a detailed review process in place of these
financial reports and ensure that process allows for the accurate submission of
required financial information reported to the State Controller.
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