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City Council Agenda 02-13-2017A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA MONDAY, JANUARY 23, 2017 CALL TO ORDER A regular meeting of the City Council of the City of Rolling Hills was called to order by Mayor Dieringer at 7:05 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. ROLL CALL Councilmembers Present: Black*, Mirsch, Pieper, Wilson and Mayor Dieringer. *Mayor Pro Tem Black arrived at 7:10 p.m. Councilmembers Absent: None. Others Present: Raymond R. Cruz, City Manager. Yolanta Schwartz, Planning Director. Natalie Karpeles, Assistant City Attorney. Heidi Luce, City Clerk. Jim and Lori Hynes, 23 Crest Road East (property owner) Tom Hynes, 23 Crest Road East (property owner). Charlie Raine, 4 Pinto Road. Jeffrey Ostriker, 27 Caballeros Road. CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. Minutes - Regular Meeting of January 9, 2017. RECOMMENDATION: Approve as presented. B. Payment of Bills. RECOMMENDATION: Approve as presented. C. Financial Statement for the Month of November arid December 2016. RECOMMENDATION: Approve as presented. D. Republic Services Recycling Tonnage Report for November and December 2016. RECOMMENDATION: Receive and file. E. Correspondence from Republic Services confirming the following dates for the 2017 bi- annual clean up events in the City of Rolling Hills: April 1 (greenwaste), April 8 (bulky items), April 22 (shred/e-waste), September 9 (greenwaste), September 16 (bulky items) and September 23 (shred/e-waste). RECOMMENDATION: Receive and file. Councilmember Pieper asked that item 4D be removed from the consent calendar for individual consideration. Hearing no objection, Mayor Dieringer so ordered. Councilmember Wilson moved that the City Council approve the remaining items on the consent calendar as presented. Councilmember Pieper seconded the motion, which carried without objection. D. Allied Recycling Tonnage Report for November and December 2016. RECOMMENDATION: Receive and file. Councilmember Pieper commented that because the diversion requirements will be increasing in the future, the City should determine a way to get credit for the greenwaste and chipping that takes place in the City to help meet the new requirements. Following brief discussion, Councilmember Pieper moved that the City Council receive and file the Allied Recycling Tonnage Report as presented. Councilmember Mirsch seconded the motion, which carried without objection. Staff was directed to provide the information received to the applicant and their representatives. -1- Mayor Pro Tem Black arrived and took his seat at the dais. OPEN AGENDA - PUBLIC COMMENT WELCOME None. COMMISSION ITEMS None. PUBLIC HEARINGS None. OLD BUSINESS CONSIDERATION OF A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS APPROVING A REQUEST FOR A SITE PLAN REVIEW FOR GRADING AND CONSTRUCTION OF A NEW RESIDENCE WITH BASEMENT, GARAGES, COVERED PORCHES, SWIMMING POOL WITH A SPA, RETAINING WALLS AND NEW DRIVEWAY; AND REQUEST FOR CONDITIONAL USE PERMIT TO CONSTRUCT A GUESTHOUSE AND STABLE WITH LOFT AND CORRAL AND RELATED IMPROVEMENTS IN ZONING CASE NO. 902 AT 23 CREST ROAD EAST, LOT 132A -MS, (HYNES). THE PROJECT WAS DETERMINED TO BE EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT. It was noted that an e-mail with videos and additional information relating to this project was provided to the City Council late today. Assistant City Attorney Karpeles stated that the public hearing on this matter was closed and in order to consider the additional information received, the public hearing would need to be reopened and properly noticed. Following brief discussion, Councilmember Wilson moved that the City Council table this matter in light of the fact that additional information was provided to the City Council today and notice a re -opened public hearing to allow the City Council to consider that information. Mayor Pro Tem Black seconded the motion, which carried with Councilmembers Pieper and Dieringer opposed. NEW BUSINESS REVIEW OF FISCAL YEAR 2015/2016 AUDITED FINANCIAL STATEMENTS. Mayor Dieringer introduced the item and asked for staff's comments. Finance Director Shea reviewed the 2015/16 audited financial statements stating that Lance, Soil, Lunghard audited the statements in November and issued an unmodified opinion which is the highest level of assurance that can be given. In response to an inquiry from Mayor Dieringer, Mr. Shea explained that the building and permit fee revenue was over what was budgeted but lower than the previous year. He further reviewed the financial statements stating that the General Fund ended the year with a balance of $4.6 million in available fund balance and the Utility Fund ended the year with a balance of $1.2 million. He stated that General Fund revenue was just over $2 million with expenditures at $1.5 million. Discussion ensued concerning the City's pension liability. The City Council concurred that the City should begin discussing a policy for funding the liability as part of the budgeting process going forward. Following brief discussion, Councilmember Pieper moved that the City Council receive and file the audited financial statements as presented. Councilmember Mirsch seconded the motion, which carried without objection. City Manager Cruz suggested taking Matters from Staff item 10-A pertaining to the quarterly investment report out of order. Hearing no objection, Mayor Dieringer so ordered. MATTERS FROM STAFF QUARTERLY SCHEDULE OF INVESTMENTS REPORT FOR THE QUARTER ENDING DECEMBER 31, 2016. Minutes City Council Meeting 01-23-17 -2- MATTERS FROM STAFF QUARTERLY SCHEDULE OF INVESTMENTS REPORT FOR THE QUARTER ENDING DECEMBER 31, 2016. Finance Director Shea presented the investment report for the quarter ending December 31, 2016 stating that investment earnings are up over the previous year. Following brief discussion, Councilmember Pieper moved that the City Council receive and file the investment report as presented. Councilmember Mirsch seconded the motion, which carried without objection. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS DISCUSSION AND DIRECTION TO CITY STAFF CONCERNING THE STORM DRAINS LOCATED WITHIN THE CITY OF ROLLING HILLS (ORAL REPORT). City Manager Cruz stated that this matter was placed on the agenda at the City Council's request due to concerns expressed regarding storm drains in the City. It was noted that the majority of the storm drains are private storm drains. Discussion ensued concerning the storm drains, specifically those in the vicinity of Portuguese Bend Road and Crest Road. Councilmember Mirsch commented that her concern is determining who is responsible for the drains in the City and what if any assistance could be provided to residents to address the issues related to the drains. Following discussion, staff was directed to research the legality and feasibility of creating an ad hoc committee to confer with residents regarding storm drain related issues and the construction of catch basins. MATTERS FROM STAFF (cont.) STATUS REPORT REGARDING COMPLIANCE WITH THE CITY COUNCIL RESOLUTION CONCERNING AZUL, THE DOG OWNED BY DR. OSTRIKER AT 27 CABALLEROS ROAD WITH REGARD TO THE CONFINEMENT RESTRICTIONS IMPOSED ON AZUL. Mayor Dieringer introduced the item and asked for staff's comments. City Manager Cruz reported that since the City Council adopted Resolution 1195, there have been no formal complaints made by any members of the community that Azul has been seen loose or being walked within the City limits. He stated that he contacted the victims of the chicken attacks to determine if they had seen Azul since the resolution was adopted, they all replied they have not; but thet still feel the dog is a threat to the community and should be kept in a kennel when on the Ostriker property. He further stated that he visited Dr. Ostriker's home on January 17`h to see if Azul is running loose on the property and if the dog run was constructed and he did not witness either. He further reported that he spoke to Dr. Ostriker and was informed that he has not constructed an enclosed dog kennel/run anywhere on his property, and has no plans to do so in the future because the dog is always in his home and only goes out when driven outside the City's boundaries. Councilmember Mirsch reported that she had a conversation with Dr. Ostriker while he was walking his dogs outside the City. Mayor Dieringer asked for public comment. Jeffrey Ostriker, 27 Caballeros Road addressed the City Council to express his appreciation that he was allowed to keep the dog. He further commented that he is regularly walking the dog outside the City and it is working well. He asked that the City Council consider modifying its decision to allow him to walk the dog on a leash on Caballeros to help relieve anxiety when he suffers a panic attack in the middle of the night. He also stated that a representative from InvisiFence is present to provide added reassurance about the system and answer any questions about the system. In response to Mayor Pro Tem Black, Dr. Ostriker stated that he has not constructed the dog run and he takes the dog outside the City to relieve itself. Councilmember Wilson commented that he believes it was the City Council's understanding that the dog run would be constructed. The City Council concurred and expressed concern regarding Dr. Ostriker's apparent history and lack of willingness to comply with the City Council's order. Following discussion and a failed motion (lack of second) by Councilmember Mirsch to allow Dr. Ostriker to walk the dog on Caballeros in the middle of the night, Councilmember Pieper moved that the City Council direct staff to prepare a revised resolution requiring that the dog run referenced in Section 9B Minutes City Council Meeting 01-23-17 -3- of Resolution No. 1195 be constructed within 60 days, that Azul be kept on a leash at all times when not in the house or in the dog run and that the City Council retain jurisdiction over this matter for an additional 90 days. Councilmember Mirsch seconded the motion, which carried with Councilmember Wilson opposed. WILLDAN ENGINEERING ANNUAL UPDATE. (ORAL REPORT) Planning Director Schwartz provided a report on the number of development cases that Willdan Engineering has processed. She stated that since the contract began in 2008, Willdan has reviewed a total of 31 projects, with eight projects under construction currently and 18 projects completed. Discussion ensued concerning Willdan's expedited service and expectation versus reality. No action was taken. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS (cont.) Councilmember Mirsch asked that staff provide an update on enforcement efforts related to the City's fire fuel hazard abatement ordinance. Councilmember Mirsch asked that the fire fuel reduction ad hoc committee provide an update of the status of fire fuel reduction in the City. Mayor Dieringer asked that staff agendize a discussion on the status of ADA compliance at City Hall. CLOSED SESSION None. ADJOURNMENT Hearing no further business before the City Council, Mayor Dieringer adjourned the meeting at 8:44 p.m. The next regular meeting of the City Council is scheduled to be held on Monday, February 13, 2017 beginning at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Respectfully submitted, t Heidi Luce City Clerk Approved, Bea Dieringer Mayor Minutes City Council Meeting 01-23-17 -4- CITY OF ROLLING HILLS PROOF OF SERVICE BY MAIL AND POSTING STATE OF CALIFORNIA ss COUNTY OF LOS ANGELES I am a citizen of the United States. I am over the age of eighteen years and not a party to the within proceeding; my business address is 2 Portuguese Bend Road, Rolling Hills, California. On the 20th day of January, 2017, I serve the within City Council Meeting - 01/23/2017 Regular Meeting a copy of which is annexed hereto and made a part hereof, and the person, or persons, named below were emailed or mailed the agenda: E -MAILED MAILED DropBox Interested RH Web site listSery Parties Interested parties City Attorney CouncilMembers Dieringer, Pieper, Black, Mirsch and Wilson DELIVERED City Manager City Council Also posted at City Hall, at www.Rolling-Hills.org and PDF's in DropBox. I declare under penalty of perjury, that the foregoing is true and correct. Executed on the 20th day of January, 2017 at Rolling Hills, California. Ewa Nikodem Administrative Assistant AGENDA lc Rallesee, get4 INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 CITY COUNCIL CITY OF ROLLING BILLS REGULAR MEETING MONDAY, JANUARY 23, 2017 7:00 P.M. Next Resolution No. 1202 Next Ordinance No. 350 1. CALL TO ORDER 2. ROLL CALL 3. OPEN AGENDA - PUBLIC COMMENT WELCOME This is the appropriate time for members of the public to make comments regarding the items on the consent calendar or items not listed on this agenda. Pursuant to the Brown Act, no action will take place on any items not on the agenda. 4. CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. Minutes - Regular Meeting of January 9, 2017. RECOMMENDATION: Approve as presented. B. Payment of Bills. RECOMMENDATION: Approve as presented. C. Financial Statement for the Month of November and December 2016. RECOMMENDATION: Approve as presented. D. Allied Recycling Tonnage Report for November and December 2016. RECOMMENDATION: Receive and file. E. Correspondence from Republic Services confirming the following dates for the 2017 bi- annual clean up events in the City of Rolling Hills: April 1 (greenwaste), April 8 (bulky items), April 22 (shred/e-waste), September 9 (greenwaste), September 16 (bulky items) and September 23 (shred/e-waste). RECOMMENDATION: Receive and file. 5. COMMISSION ITEMS NONE. Page 1 of 3 6. PUBLIC HEARINGS NONE. 7. OLD BUSINESS A. CONSIDERATION OF A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS APPROVING A REQUEST FOR A SITE PLAN REVIEW FOR GRADING AND CONSTRUCTION OF A NEW RESIDENCE WITH BASEMENT, GARAGES, COVERED PORCHES, SWIMMING POOL WITH A SPA, RETAINING WALLS AND NEW DRIVEWAY; AND REQUEST FOR CONDITIONAL USE PERMIT TO CONSTRUCT A GUESTHOUSE AND STABLE WITH LOFT AND CORRAL AND RELATED IMPROVEMENTS IN ZONING CASE NO. 902 AT 23 CREST ROAD EAST, LOT 132A -MS, (HYNES). THE PROJECT WAS DETERMINED TO BE EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA). 8. NEW BUSINESS A. REVIEW OF FISCAL YEAR 2015/2016 AUDITED FINANCIAL STATEMENTS. 9. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS A. DISCUSSION AND DIRECTION TO CITY STAFF CONCERNING THE STORM DRAINS LOCATED WITHIN THE CITY OF ROLLING HILLS (ORAL REPORT). 10. MATTERS FROM STAFF A. QUARTERLY SCHEDULE OF INVESTMENTS REPORT FOR THE QUARTER ENDING DECEMBER 31, 2016. B. STATUS REPORT REGARDING COMPLIANCE WITH THE CITY COUNCIL RESOLUTION CONCERNING AZUL, THE DOG OWNED BY DR. OSTRIKER AT 27 CABALLEROS ROAD WITH REGARD TO THE CONFINEMENT RESTRICTIONS IMPOSED ON AZUL. C. WILLDAN ENGINEERING ANNUAL UPDATE. (ORAL REPORT) 11. CLOSED SESSION NONE. 12. ADJOURNMENT Next meeting: Monday, February 13, 2017 at 7:00 p.m. in the Council Chamber, Rolling Hills City Hall, 2 Portuguese Bend Road, Rolling Hills, California. City Council Agenda 01/23/17 Page 2 of 3 Public Comment is welcome on any item prior to City Council action on the item. Documents pertaining to an agenda item received after the posting of the agenda are available for review in the City Clerk's office or at the meeting at which the item will be considered In compliance with the Americans with Disabilities Act (ADA), if you need special assistance to participate in this meeting due to your disability, please contact the City Clerk at (310) 377-1521 at least 48 hours prior to the meeting to enable the City to make reasonable arrangements to ensure accessibility and accommodation for your review of this agenda and attendance at this meeting. City Council Agenda 01/23/17 Page 3 of 3 DRAFT Agenda Item No. 4-A Meeting Date: 01/23/17 MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA MONDAY, JANUARY 9, 2017 CALL TO ORDER A regular meeting of the City Council of the City of Rolling Hills was called to order by Mayor Dieringer at 7:01 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. ROLL CALL Councilmembers Present: Black, Mirsch, Pieper, Wilson and Mayor Dieringer. Councilmembers Absent: None. Others Present: CONSENT CALENDAR Raymond R. Cruz, City Manager. Yolanta Schwartz, Planning Director. Mike Jenkins, City Attorney. Heidi Luce, City Clerk. Tavisha Nicholson, Bolton Engineering. Charlie Raine, 4 Pinto Road. John Mackenbach, 56 Portuguese Bend Road. Howard Weinberg, Attorney (for property owner, 23 Crest Road East). Tom Hynes, 23 Crest Road East (property owner). Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. Minutes — (1) Adjourned Regular Meeting of October 4, 2016; (2) Regular Meeting of October 10, 2016; (3) Regular Meeting of October 24, 2016; (4) Regular Meeting of November 14, 2016; and (5) Regular Meeting of November 28, 2016; (6) Adjourned Regular Meeting of December 14, 2016; and (7) Adjourned Regular Meeting of December 19, 2016. RECOMMENDATION: Approve as presented. B. Payment of Bills. RECOMMENDATION: Approve as presented. C. Consideration of the City Council Approved Vendor List for Calendar Year 2017. RECOMMENDATION: Approve as presented. D. Consideration of the Fiscal Year 2017/2018 Budget Preparation Calendar. RECOMMENDATION: Approve as presented. DRAFT E. City Council Finance/Budget/Audit Committee meeting notes of December 19, 2016. RECOMMENDATION: Receive and file. Councilmember Pieper moved that the City Council approve the items on the consent calendar as presented. Councilmember Wilson seconded the motion, which carried without objection. SPECIAL PRESENTATION Special Presentation to Michael Gray in recognition of his service to the community as Member of Planning Commission from 2013-2017 Mayor Dieringer presented a plaque to Michael Gray in appreciation of his service as a member of the Planning Commission for four years and thanked him for his dedication and service to the Community. Mr. Gray thanked the City Council for the recognition and stated that he enjoyed serving on the Planning Commission. OPEN AGENDA - PUBLIC COMMENT WELCOME None. COMMISSION ITEMS RESOLUTION NO. 2016-25. A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ROLLING HILLS GRANTING APPROVAL OF VARIANCES AND SITE PLAN REVIEW TO CONSTRUCT A CHICKEN COOP IN THE FRONT YARD, TO EXCEED THE PREVIOUSLY APPROVED LOT DISTURBANCE AND TO RELOCATE A POOL EQUIPMENT AREA NECESSITATING AN UP TO 4' TALL ENCLOSURE WALL ON A PROPERTY WITH A RESTRICTED DEVELOPMENT CONDITION IMPOSED THROUGH A PRIOR PROJECT, IN ZONING CASE NO. 913, AT 10 CREST ROAD W. (LOT 2 -CH) ROLLING HILLS, CA, (FRYKMAN). Mayor Dieringer introduced the item and asked for staff's comments. Planning Director Schwartz reviewed the applicant's request to construct a chicken coop in the front yard and to modify the location and size of a previously approved pool equipment area in Zoning Case No. 913 at 10 Crest Road West. She stated that the Planning Commission approved this request without any objection. Mayor Pro Tem Black moved that the City Council receive and file Planning Commission Resolution No. 2016-25 granting approval of the applicant's request in Zoning Case No. 913 at 10 Crest Road West. Councilmember Pieper seconded the motion. In response to Mayor Dieringer's inquiry regarding screening the chicken coop if it is constructed before the stable, Ms. Schwartz stated that there is no requirement for screening. Mayor Dieringer suggested adding such a condition. Following brief discussion, the motion to receive and file this item carried without objection. RESOLUTION NO. 2016-26 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ROLLING HILLS GRANTING APPROVAL OF A SITE PLAN REVIEW TO CONSTRUCT A TRELLIS, A PORTION OF WHICH IS 2.5 -FEET MAXIMUM OUT OF GRADE AND A 2.5' HIGH WALL ON A PROPERTY WITH A RESTRICTED Minutes City Council Meeting 01-09-17 0 DRAFT DEVELOPMENT CONDITION IMPOSED THROUGH A PRIOR PROJECT IN ZONING CASE NO. 912 AT 3 CHUCKWAGON ROAD. (LOT 40-EF) ROLLING HILLS, CA, (LIU). Mayor Dieringer introduced the item and asked for staff's comments. Planning Director Schwartz reviewed the applicant's request to construct a trellis and patio a portion of which is to be constructed out of grade in Zoning Case No. 912 at 3 Chuckwagon Road. She stated that the Planning Commission approved this request without any objection. Councilmember Pieper moved that the City Council receive and file Planning Commission Resolution No. 2016-26 granting approval of the applicant's request in Zoning Case No. 912 at 3 Chuckwagon Road. Mayor Pro Tem Black seconded the motion, which carried without objection. PUBLIC HEARINGS ZONING CASE NO. 902. REQUEST FOR A SITE PLAN REVIEW FOR THE CONSTRUCTION OF A NEW 11,100 SQUARE FOOT RESIDENCE, WITH 11,100 SQUARE FOOT BASEMENT, 1,540 SQUARE FEET ATTACHED GARAGES, 2,654 SQUARE FEET COVERED PORCHES, 864 SQUARE FOOT SWI IMING POOL AND SPA, TRELLISES, NEW DRIVEWAY AND AN OUTDOOR KITCHEN AND GRADING FOR A TOTAL OF 51,625 CUBIC YARDS OF DIRT, WHICH INCLUDES OVER -EXCAVATION AND RE - COMPACTION; CONDITIONAL USE PERMITS TO CONSTRUCT AN 800 SQUARE FOOT GUEST HOUSE, AND A 1,300 SQUARE FOOT STABLE; IN ZONING CASE NO. 902, AT 23 CREST ROAD EAST, (LOT 132A -MS), ROLLING HILLS, CA (HYNES). THE PROJECT IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO SECTION 15303, CLASS 3 EXEMPTION GUIDELINES. Mayor Dieringer introduced the item and asked for staff's comments. Planning Director Schwartz briefly reviewed the applicant's request stating that this project was taken under jurisdiction by the City Council following the Planning Commission's approval of the project. She stated that at the last public hearing on this case, the City Council expressed concern regarding the mass and location of the house as well as the grading associated with the project and appointed Mayor Pro Tem Black and Councilmember Pieper to an ad hoc committee to work with the applicant to address those concerns. She further stated that there were previous discussions regarding the hydrology, soils and geology associated with this project and those reports submitted by the applicant were previously reviewed by the City engineers and deemed acceptable for future development. Ms. Schwartz stated that subsequent to the discussions with the ad hoc committee, the applicant submitted revised plans to address the concerns regarding the massing and location of the proposed house. She reviewed the revised plan stating that the house is proposed at 10,400 sq. ft. with a two -car garage at 1,120 sq. ft. and is configured in a more u -shaped configuration rather than the longer, narrow design that was previously proposed. She stated that there are no changes proposed to the stable and guesthouse on the lower pad. She stated that the applicant also revised the proposed grading so that the look of the resulting slopes is softer and less steep with 3:1 slopes instead of 2:1 in the areas visible from Crest Road; and thus reducing the size of the residential pad as well and the grading and disturbance quantities. She further reviewed the proposed drainage plan stating that the applicant proposes two cisterns on the upper pad to collect and dissipate the water into two dissipaters - one on each side of the property; and two cisterns and Minutes City Council Meeting 01-09-17 0 DRAFT dissipaters on the lower pad as well. She further reviewed the development standards stating that all of the development standards are within the code requirements and there are no variances requested. She further reviewed the development standards as provided in the table distributed for the City Council's review. She stated that if the proposed revisions are acceptable to the City Council, staff could be directed to prepare a resolution of approval for the City Council's consideration at its next meeting. In response to Councilmember Pieper, Ms. Schwartz stated that staff could be directed to use the language from the Planning commission resolution in preparing the resolution of approval but revised to reflect the City Council's direction. Mayor Dieringer inquired about the sizing of the cisterns with relation to the previous suggestion that they be sized to capture the 100 -year storm as opposed to the 25 -year storm as originally designed. Mayor Dieringer called for public comments. Tavisha Nicholson, Bolton Engineering addressed the City Council on behalf of the applicant stating, in response to Mayor Dierigner's inquiry, that the cisterns are designed based on the 25 -year storm requirements but in the hydrology study it is indicated that the system will hold the 100 -year storm as currently designed. Discussion ensued concerning the drainage plan. In response to Mayor Dieringer, Ms. Nicholson further explained the process whereby the water would be released from the cisterns. In response to Councilmember Wilson, Ms. Nicholson further explained the calculations used to determine the hydrology requirements to meet the pre versus post development runoff requirements. She noted that the beginning number considers a saturated soil condition used to determine sheet flow. Ms. Nicholson further explained the revisions that were made stating that the house was also depressed by 2 ft. vertically to reduce the massing and the driveway was reduced as well. Charlie Raine, 4 Pinto Road addressed the City Council to express continued concern regarding the hydrology and the affect the runoff will have on the properties below. He suggested that further study be done on the hydrology to better ascertain the actual sheet flow from the undeveloped lot rather than relying on the numbers in the County's hydrology manual. John Mackenbach, 56 Portuguese Bend Road addressed the City Council to express continued concern regarding the runoff from the proposed development and the affect it will have on the properties below. Further discussion ensued concerning the proposed drainage plan. Howard Weinberg, Attorney for the applicant addressed the City Council stating the hydrology plan is designed with the calculations starting from the assumption that the soil is fully saturated when the storm begins and any additional water would result in sheet flow from the undeveloped property. He reiterated that the drainage system is designed to capture any excess water from a 25 -year storm and further, the cisterns are big enough to capture the excess water from a 100 -year storm. Mr. Raine expressed further concern that the proposed drainage system is inadequate. Hearing no further public comment, Mayor Dieringer closed the public hearing. Mayor Pro Tem Black commented that drainage system was designed to comply with County's criteria and it will be up to the County to ultimately determine whether or not it meets their requirements. He Minutes City Council Meeting 01-09-17 DRAFT further commented that the applicant was responsive to the concerns raised regarding the mass and grading; and provided multiple discharge sites for the stormwater runoff to further address the concerns regarding drainage. He commented that his concerns have been alleviated. Councilmember Pieper concurred with Mayor Pro Tem Black. Councilmember Wilson expressed continued concern regarding hydrology and drainage and the calculations used to design the drainage plan. Councilmember Mirsch commented that the revisions made to address the mass and grading make for a better project and she can now make the findings she couldn't make previously. With regard to the concern raised by the neighbors regarding the hydrology, she noted that the City Council has not been provided with any expert testimony or hydrology reports to contradict the reports submitted by the applicant and subsequently reviewed by the City engineers. Mayor Dieringer commented that she concurs with the comments made by Mayor Pro Tem Black and Councilmembers Pieper and Mirsch. She asked for clarification from the City Attorney with regard to Mr. Raine's suggestion that the City Council require further study of the hydrology. City Attorney Jenkins stated in response to Mayor Dieringer, that further hydrology studies are not part of the Site Plan Review criteria for the City Council's consideration in reviewing this application. He stated that the City Council is bound by the legal criteria set forth in the Municipal Code. He further stated that the County will not issue building permits for this property if there are hydrology problems that do not satisfy the County Engineers. In response to Councilmember Wilson, Mr. Jenkins stated that the documentation produced during the County's review process is available to the public for review and City staff could be directed to inform the concerned parties when that information is available. Mayor Pro Tem Black moved that the City Council direct staff to prepare a resolution granting approval of the applicant's request in Zoning Case No. 902 at 23 Crest Road East as amended with the standard findings of fact and conditions of approval; and including the same conditions imposed by the Planning Commission relative to the landscape screening. Councilmember Pieper seconded the motion, which carried with Councilmember Wilson opposed. Staff was further directed to provide the interested parties notification when the County has reviewed and approved the fmal soils, geology and hydrology studies submitted by the applicant. ORDINANCE NO. 349 — AN INTERIM ORDINANCE OF THE CITY OF ROLLING HILLS, EXTENDING ORDINANCE NO. 348, WHICH TEMPORARILY PLACES A MORATORIUM ON THE PROCESSING AND CONSIDERATION OF ANY APPLICATION SOUGHT UNDER THE PROVISIONS OF CHAPTER 17.26 (VIEW PRESERVATION) OF THE ROLLING HILLS MUNICIPAL CODE, AND DECLARING THE URGENCY THEREOF. Mayor Dieringer introduced the item and asked for staffs comments. Planning Director Schwartz stated that before the City Council is an ordinance to extend the moratorium on the processing and consideration of applications sought under the provisions of the City's View Preservation Ordinance while the Planning Commission is considering amendments to the ordinance as directed by the City Council. She stated that the City Council has the option of extending the ordinance for 10 months and 15 days or 22 months and 15 days based on State law. She commented that the moratorium can be repealed at any time and if it is Minutes City Council Meeting 01-09-17 DRAFT extended for the shorter period of time, it could be extended again at a later date for a total of two years maximum. Discussion ensued concerning the two options before the City Council with the general consensus being to extend it for the shorter period of time. Mayor Dieringer opened the public hearing and called for public comment. Howard Weinberg, Attorney, addressed the City Council to suggest that the moratorium be extended for 10 months and 15 days with a provision that it expire if Measure B is repealed. Hearing no further public comment, Mayor Dieringer closed the public hearing. Mayor Dieringer commented that she believes the ordinance should be extended for 22 months and 15 days recognizing that it could be repealed earlier if the Planning Commission fmalizes its discussions and recommendation to amend the Ordinance. Following brief discussion, Councilmember Pieper moved that the City Council adopt the interim ordinance extending Ordinance No. 348 temporarily placing a moratorium on the acceptance and/or processing of any applications sought under the provisions of Chapter 17.26 of the Rolling Hills Municipal Code for a period of 10 months and 15 days. Councilmember Mirsch seconded the motion, which carried with Mayor Dieringer opposed. OLD BUSINESS None. NEW BUSINESS None. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS Councilmember Wilson suggested that a discussion regarding the drains in the City be agenized for discussion at a future City Council meeting. Following brief discussion, staff was directed to agendize the matter for discussion. Councilmember Wilson asked about the status of the compliance with the order in the Ostriker aggressive dog matter. Following brief discussion, staff was directed to agendize an update on this matter. Mayor Dieringer asked if it would be possible for the City Council to make changes to the resolutions that are brought forward from the Planning Commission without having to take the matter under jurisdiction. City Attorney Jenkins responded that per the City's current Zoning Ordinance, the City Council only has two options when the Planning Commission actions are presented to the City Council — to either receive and file the resolution or take the matter under jurisdiction. He stated that a public hearing would be required to make any changes. In response to Mayor Dieringer's inquiry about the possibility of having every item from the Planning Commission brought before City Council as a public hearing, Mr. Jenkins stated that doing so would gut the Planning Commission's authority. Following brief discussion, there was no interest expressed in agendizing this matter for further discussion. Minutes City Council Meeting 01-09-17 DRAFT Mayor Dieringer further suggested that a follow up discussion regarding the City Council/Planning Commission Joint meeting be agenized on a future City Council meeting agenda. Following brief discussion, staff was directed to agendize a discussion after the minutes are prepared. Mayor Pro Tem Black commented that the left turn signal at Palos Verdes Drive North/Portuguese Bend Road is a welcome change. Councilmember Mirsch shared an article with the City Council from USC Law Magazine featuring City Attorney, Mike Jenkins who teaches local government law at USC Gould School of Law. MATTERS FROM STAFF City Manager Cruz reported that the City has expended its entire budget for coyote control already this fiscal year and he will be requesting a mid -year budget adjustment for coyote control so that the City can continue its efforts with regard to coyote control. He further stated that if there is no objection, he proposes to close City Hall from noon-2pm on Tuesday, January 17th to host a staff holiday luncheon at his home. No objection was expressed. CLOSED SESSION None. ADJOURNMENT Hearing no further business before the City Council, Mayor Dieringer adjourned the meeting at 8:47 p.m. The next regular meeting of the City Council is scheduled to be held on Monday, January 23, 2017 beginning at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Respectfully submitted, Heidi Luce City Clerk Approved, Bea Dieringer Mayor Minutes City Council Meeting 01-09-17 CHECK CHECK NO. DATE 24650 01/23/2017 24651 01/23/2017 24652 01/23/2017 24653 01/23/2017 24654 01/23/2017 24655 01/23/2017 24656 01/23/2017 24657 01/23/2017 24658 01/23/2017 24659 01/23/2017 24660 01/23/2017 24661 01/23/2017 24662 01/23/2017 24663 01/23/2017 24664 01/23/2017 24665 .01/23/2017 24666 01/23/2017 24667 01/23/2017 24668 01/23/2017 * PR LINK 01/06/2017 * PR LINK 01/06/2017 City 0//ellinp JO, Agenda Item No: 4-B Mtg. Date: 01/23/17 INCORPORATED JANUARY 24, 1957 1/23/2017 - CHECK RUN PAYEE ANIMAL PEST MANAGEMENT CALIFORNIA WATER SERVICE CO. CIVICPLUS COX COMMUNICATIONS DAILY BREEZE DAILY BREEZE EXECUTIVE -SUITE SERVICES, INC. JENKINS & HOGIN, LLP LA COUNTY SHERIFFS DEPARTMENT LANCE, SOLL & LUNGHARD, LLP LEAGUE OF CALIFORNIA CITIES REMOTE SATELLITE SYS INTL ROGERS, ANDERSON, MALODY ROLLING HILLS ESTATES SUN ELECTRIC THE GAS COMPANY USCM VANTAGEPOINT TRANSFER AGENTS - XEROX CORPORATION PR LINK - PAYROLL PROCESSING PR LINK - PAYROLL 1 & PR TAXES DESCRIPTION NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CALIF. 90274 (310) 377-1521 FAX: (310) 377-7288 COYOTE CONTROL 12/5/16 WATER BILL 11/29/16 -12/27/16 CITY WEBSITE - QUARTERLYMAINT. PHONE & INTERNET 12/26-1/25/17 P.V. NEWS - LEGAL AD. DEC 2016 LEGAL ADVERTISING DEC 2016 JANITOR SPECIAL CLEAN NOV/DEC EXTRA XMAS CLEANING ATTORNEY SERVICES DEC 2016 LAW ENFORCEMENT AND SUPPL TRAFFIC ENFORCE. DEC'16 2016 GOV. AUDIT & STATE REPORT MEMBERSHIP DUES FOR 2017 SATELLITE PHONES FEB 2017 ACCOUNTING SERVICES NOV 2016 BACKGROUND CHECK JULIA S ELECTRICAL MENS BATHROOM GAS 12/6-01/0/17 DEFERRED COMP 1/20/17 DEFERRED COMP 1/20/17 PRINTER MAINTENANCE DEC 2016 PROCESSING FEE PAY PERIOD - DECEMBER 21, 2016 THROUGH JANUARY 4, 2017 I, Raymond R. Cruz, City Manager of Rolling Hills, - 'fomia certify that the above demands are accu - - . , d there is available in the General F d a balance of $70,634.37 for the payment of a Raymond R 'ruz, Manager * Previously Disbursed AMOUNT 2,500.00 917.30 1,382.41 395.17 250.38 279.95 1,211.00 4,663.60 27,001.27 3,100.00 1,219.00 97.90 6,855.00 32.00 110.00 153.66 789.00 364.00 37.00 56.45 19,219-28 $ 70,634.37 51,358.64 Printed on Recycled Paper CITY OF ROLLING HILLS BALANCE SHEET November 30, 2016 ASSETS MUNICIPAL GENERAL & DEPOSIT COPS & COMMUN. SELF- REFUSE TRAFFIC TRANSIT UTILITY CAPITAL FUND . FUND CLEEP FACILITIES INSUR. COLLECT. SAFETY PROP A. C. M FUND & TDA Cash & Cash Equivalents $ 4,172,587 $ 1,771 $ 125,160 $ 18,282 $ 260,374 $ 238,250 $ 30,338 $ 174,080 $ 1,236,507 Cash & Cash Equivalents - Capital Project Fund - Poppy Trail Grading Bond 305,000 - Accounts Receivable 335,521 Prepaid Expense & Deposits 15,709 LIABILITIES FUND BALANCE TOTAL ASSETS $ 4,188,296 $ 306,771 $ 125,160 $ 18,282 $ 260,374 $ 573,771 $ 30,338 $ 174,080 $ 1,236,507 Accounts & Contract Payable $ 11,761 $ - $ $ $ - $ 317,295 $ $ $ Available for OPEB Deposits 18,803 306,771 - - Deferred revenues 14,012 - TOTAL LIABILITIES 44,576 306,771 317,295 Unassigned Fund Balance 4,143,720 TOTAL UNASSIGNED FUND BALANCE 4,143,720 125,160 18,282 260,374 256,476 30,338 174,080 1,236,507 125,160 18,282 260,374 256,476 30,338 174,080 1,236,507 'OTAL UNASSIGNED FUND BALANCE & LLABILrrIP $ 4,188,296 $ 306,771 $ 125,160 $ 18,282 $ 260,374 $ 573,771 $ 30,338 $ 174,080 $ 1,236,507 COMPOSITION OF CASH Petty Cash $ 1,500 OPUS Bank - Checking Account 46,549 OPUS Bank - Money Market 160,422 Opus Bank Interest Checking 1,005,785 Calif. State Local Agency Investment Fund 4,548,093 Malaga Bank - CDARS - CD's 495,000 $ 6,257,349 BEGINNING YTD OF YEAR TOTAL TOTAL $ 6,257,349 $ 6,891,267 305,000 305,000 335,521 407,570 15,709 37,436 $ 6,913,579 $ 7,641,273 $ 329,056 $ 470,261 2,408 325,574 325,574 14,012 14,012 668,642 812,255 6,244,937 6,829,018 6,244,937 6,829,018 $ 6,913,579 $ 7,641,273 RH bal_fy16-17 12/19/2016 3:20 PM CITY OF ROLLING HILLS SUMMARY STATEMENT OF REVENUES AND EXPENDITURES Actual Compared to Annual Budget July 1, 2016 to November 30, 2016 Fund GENERAL Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CITIZENS' OPTION FOR PUBLIC SAFETY (COPS) Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CAPITAL IMPROVEMENT FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue COMMUNITY FACILITIES Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue MUNICIPAL SELF-INSURANCE Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue REFUSE COLLECTION Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRAFFIC SAFETY Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRANSIT -PROPOSITION A, C, M & TDA Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue UTILITY FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TOTAL ALL FUNDS Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue (Deficit) This Year Last Year This Year Better (Worse) Annual Budget & Adj. Remaining Budget $ 133,476 $ 168,236 $ (34,760) 1,931,600 $ 1,798,124 600,750 520,300 (80,450) 1,842,793 1,242,043 (467,274) (352,064) (115,210) 88,807 556,081 10,000 10,000 - (344,050) (354,050) (457,274) (342,064) (115,210) (255,243) 202,031 72,920 54,139 18,781 115,125 42,205 42,155 38,456 (3,699) 164,000 121,845 30,765 15,683 15,082 (48,875) (79,640) - - - - 0 30,765 15,683 15,082 (48,875) (79,640) - - - 100 100 - - - 62,700 62,700 - - - (62,600) (62,600) - - - 62,600 62,600.00 - - - - 0 - 217 217 6,000 6,000.00 - (217) 217 (6,000) (6,000.00) - (217) 217 (6,000) (6,000.00) 327,258 320,992 6,266 771,900 444,642 317,295 314,992 (2,303) 761,508 444,213 9,963 6,000 3,963 10,392 429 (10,000) (10,000) - (24,000) (14,000) (37) (4,000) 3,963 (13,608) (13,571) 32,932 - 32,932 50 (32,882) 2,594 29,098 26,504 55,500 52,906 30,338 (29,098) 59,436 (55,450) (85,788) - - - 55,450 55,450 30,338 (29,098) 59,436 - (30,338) 34,460 34,556 (96) 85,786 51,326 - - - 190,000 190,000.00 34,460 34,556 (96) (104,214) (138,674) 34,460 34,556 (96) (104,214) (138,674) - - - 150,000 150,000.00 - - - (150,000) (150,000.00) - - - 250,000 250,000.00 - - - 100,000 100,000.00 601,046 577,923 23,123 2,904,561 2,303,515 962,794 903,063 (59,731) 3,232,501 2,269,707 (361,748) (325,140) (36,608) (327,940) 33,808 $ (361,748) $ (325,140) $ (36,608) $ (327,940) $ 33,808 RH inc fy16-17 12/19/2016 3:20 PM CITY OF ROLLING HILLS BALANCE SHEET December 31, 2016 MUNICIPAL TRANSIT GENERAL & DEPOSIT COPS & COMMUN. SELF- REFUSE TRAFFIC PROP A, C, M UTILITY CAPITAL FUNI FUND CLEEP FACILITIES INSUR. COLLECT. SAFETY & TDA FUND ASSETS Cash & Cash Equivalents $ 4,549,564 $ 1,771 $ 142,677 $ 18,282 $ 260,375 $ 162,045 $ 29,873 $ 182,193 $ 1,236,507 Cash & Cash Equivalents - Capital Project Fund - - Poppy Trail Grading Bond - 305,000 - Accounts Receivable - 93,546 Prepaid Expense & Deposits 13,463 - LIABILITIES FUND BALANCE TOTAL ASSETS $ 4,563,027 $ 306,771 $ 142,677 $ 18,282 $ 260,375 $ 255,591 $ 29,873 $ 182,193 $ 1,236,507 Accounts & Contract Payable $ 13,598 $ Employees Benefits Payable 15 - Deposits 18,803 306,771 Deferred Revenues 14,012 - TOTAL LIABILITIES 46,428 306,771 Unassigned Fund Balance 4,516,599 TOTAL UNASSIGNED FUND BALANCE 4,516,599 $ $ $ $ 142,677 18,282 260,375 255,591 29,873 182,193 1,236,507 142,677 18,282 260,375 255,591 29,873 182,193 1,236,507 TOTAL UNASSIGNED FUND BALANCE & LIABILITIES $ 4,563,027 $ 306,771 $ 142,677 $ 18,282 $ 260,375 $ 255,591 $ 29,873 $ 182,193 $ 1,236,507 COMPOSITION OF CASH Petty Cash $ 1,500 OPUS Bank - Checking Account 148,267 OPUS Bank - Money Market 384,021 Opus Bank Interest Checking 1,006,406 Calif. State Local Agency Investment Fund 4,548,093 Malaga Bank - CDARS - CD's 495,000 $ 6,583,287 Prepare Terry S a, Finance Director R:ym d R. Cruz, City Man,ijer Date /-// /7 elf7 lt BEGINNING YTD OF YEAR TOTAL TOTAL $ 6,583,287 $ 6,891,267 305,000 305,000 93,546 185,238 13,463 37,436 $ 6,995,296 $ 7,418,941 $ 13,598 $ 454,364 15 18,305 325,574 325,574 14,012 14,012 353,199 812,255 6,642,097 6,606,686 6,642,097 6,606,686 $ 6,995,296 $ 7,418,941 RH bal_fy16-17 1/12/2017 4:28 PM CITY OF ROLLING HILLS SUMMARY STATEMENT OF REVENUES AND EXPENDITURES Actual Compared to Annual Budget July 1, 2016 to November 30, 2016 Fund GENERAL Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CITIZENS' OPTION FOR PUBLIC SAFETY (COPS) Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CAPITAL IMPROVEMENT FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue COMMUNITY FACILITIES Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue MUNICIPAL SELF-INSURANCE Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue REFUSE COLLECTION Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRAFFIC SAFETY Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRANSIT - PROPOSITION A, C, M & TDA Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue UTILITY FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TOTAL ALL FUNDS Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue (Deficit) This Year Last Year This Year Better (Worse) Annual Budget & Adj. Remaining Budget $ 133,476 $ 168,236 $ (34,760) 1,931,600 $ 1,798,124 600,750 520,300 (80,450) 1,842,793 1,242,043 (467,274) (352,064) (115,210) 88,807 556,081 10,000 10,000 - (344,050) (354,050) (457,274) (342,064) (115,210) (255,243) 202,031 72,920 54,139 18,781 115,125 42,205 42,155 38,456 (3,699) 164,000 121,845 30,765 15,683 15,082 (48,875) (79,640) - - - - 0 30,765 15,683 15,082 (48,875) (79,640) - - - 100 100 - - - 62,700 62,700 - - - (62,600) (62,600) - - - 62,600 62,600.00 - - - - 0 - 217 217 6,000 6,000.00 - (217) 217 (6,000) (6,000.00) - (217) 217 (6,000) (6,000.00) 327,258 320,992 6,266 771,900 444,642 317,295 314,992 (2,303) 761,508 444,213 9,963 6,000 3,963 10,392 429 (10,000) (10,000) - (24,000) (14,000) (37) (4,000) 3,963 (13,608) (13,571) 32,932 - 32,932 50 (32,882) 2,594 29,098 26,504 55,500 52,906 30,338 (29,098) 59,436 (55,450) (85,788) - - - 55,450 55,450 30,338 (29,098) 59,436 - (30,338) 34,460 34,556 (96) 85,786 51,326 - - - 190,000 190,000.00 34,460 34,556 (96) (104,214) (138,674) 34,460 34,556 (96) (104,214) (138,674) - - - 150,000 150,000.00 - - - (150,000) (150,000.00) - - - 250,000 250,000.00 - - - 100,000 100,000.00 601,046 577,923 23,123 2,904,561 2,303,515 962,794 903,063 (59,731) 3,232,501 2,269,707 (361,748) (325,140) (36,608) (327,940) 33,808 $ (361,748) $ (325,140) $ (36,608) $ (327,940) $ 33,808 RH inc fy16-17 1/12/2017 4:29 PM CITY OF ROLLING HILLS RESIDENTIAL ALLIED WASTE RECYCLE NOW REPORT. Report Date: 2016 MONTH 2016 January February March April May June July August September October November December Year to Date Totals: RECYCLED (tons) 74.63 82.00 83.40 86.74 104.26 91.53 85.65 94.93 118.68 57.87 61.18 64.19 1,005.07 Average Monthly Totals: 2016 83.76 GREEN WASTE (tons) 83.74 66.79 106.96 100.87 102.06 96.02 103.09 104.95 100.16 91.23 61.64 76.73 1,094.24 91.19 C&D Recycled C&D Disposed Disposal Diversion Tonnage 4.33 1.85 151.42 51.49% 3.20 1.37 155.47 49.22% 11.44 4.10 134.50 59.28% 4.97 1.37 118.77 61.58% 51.72 12.62 163.93 59.38% 61.24 19.13 134.20 61.87% 113.19 41.37 124.30 64.57% 67.91 18.35 150.33 61.35% 16.05 5.35 141.45 61.54% 27.89 5.32 161.50 51.48% 23.32 2.46 153.97 48.30% 6.63 1.93 163.35 47.17% 391.88 32.66 115.23 1,753.17 315.97 308.83 340.40 312.72 434.59 402.12 467.60 436.47 381.68 343.81 302.57 312.83 57.14% 9.60 146.10 0.56 MONTHLY TOTALS (tons) 4,359.59 363.30 E .. ,M R JAN 1 7 2017 City of Rolling Hills By Agenda Item No: 4-E Mtg. Date: 01/23/17 TIA REPUBLIC SERVICES January 16, 2017 "4 05 S. San Ped•o St., Ga'clena, CA 90248 o 800.299.4898 republIcservices.com City of Rolling Hills Attn: Raymond Cruz 2 Portuguese Bend Road Rolling Hills, CA RECEIVE JAN 1 7 2017 City of Rolling Hills By _. Re: 2017 ANNUAL CLEAN-UP SCHEDULE IN ROLLING HILLS Dear Mr. Cruz, This letter is to confirm that the annual 2017 Spring and Fall Clean up dates are set: SPRING FALL Greenwaste - April 1 Greenwaste - September 9 Bulky - April 8 Bulky - September 16 Shred/E-Waste - April 22 Shred/E-Waste - September 23 As always, we are more than happy to provide these services and, this year, we are adding an e -waste disposal/drop-off component to Rolling Hills residents. Should there be any questions concerning this request, please do not hesitate to call me directly at 310-436-7310. Sincerely, Samuel A. Pena Municipal Relationship Manager, Gardena Hauling Division SPena@republicServices.com 84 al RafieW, get4 INCORPORATED JANUARY 24, 1957 TO: FROM: THRU: NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No. 7-A Mtg. Date: 01/23/17 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL YOLANTA SCHWARTZ, PLANNING DIRECTOR RAYMOND R. CRUZ, CITY MANAGER POIX-- APPLICATION NO. SITE LOCATION: ZONING AND SIZE: APPLICANT: REPRESENTATIVE: DATE PUBLISHED: ZONING CASE NO. 902 - RESOLUTION OF APPROVAL 23 CREST ROAD EAST (LOT 132A -MS) RA -S-2, 6.02 ACRES (EXCL. ROADWAY EASEMENT) JIM HYNES TAVISHA NICHOLSON, BOLTON ENGINEERING SEPTEMBER 22, 2016 REQUEST AND CITY COUNCIL ACTION 1. The applicant, Jim Hynes, after several revisions to the project, is requesting a Site Plan Review and Conditional Use Permits for the construction of a new 10,400 square foot residence, 10,400 square foot basement, 1,120 square foot garage, 475 square foot entry, a total of 2,869 square feet covered porches - 2,500 sq. ft. at main residence, 264 sq.ft. at the stable and 105 sq. ft. at the guest house; a new pool and spa totaling 864 square feet with a 60 square foot pool equipment area, a 171 square foot service yard, a 250 square foot outdoor kitchen, a 350 square feet detached trellis near the proposed 800 • square foot guest house, a two-story stable with 1,300 square feet on the first level and a 792 square foot loft, a new driveway and turnaround access, a pervious access to the stable, several retaining walls and grading of a total of 48,180 cubic yards of dirt; (the dirt from the basement, 5,750 c.y. may be exported). A new driveway apron is also proposed, which was reviewed and recommended for approval by the Traffic Commission at its July 28, 2016 meeting. 2. Following several public hearings, a field visit to the site and submittals by the applicant of revised scope of the project, the City Council at their January 9, 2017 ZC NO. 902, 23 Crest Road East meeting by a 4-1 vote (Councilmember Wilson voted against) directed staff to prepare a Resolution approving the project. 3. Together with standard findings of facts and conditions of approval including those adopted by the Planning Commission, conditions specific to this project have been added in the draft Resolution, such as: • During construction, pedestrian and equestrian passable path of at least 4' wide from the edge of pavement shall be clear at all times along roadway easements on Crest Road E. • During construction, traffic lanes shall not be impeded. If, however, a traffic lane must be impeded for delivery trucks or other construction vehicles, flagmen shall be utilized on both sides of the impeded area to direct traffic • Construction trailer/office and other facilities such as portable toilets, shall to a maximum extent practicable, not be visible from the road and be in a location approved by staff • Construction fence is required 4. It is recommended that the City Council review and consider the attached Resolution for adoption. ZC NO. 902, 23 Crest Road East RESOLUTION NO. 1202 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS APPROVING A REQUEST FOR A SITE PLAN REVIEW FOR GRADING AND CONSTRUCTION OF A NEW RESIDENCE WITH ' BASEMENT, GARAGES, COVERED PORCHES, SWIIVIMING POOL WITH A SPA, RETAINING WALLS AND NEW DRIVEWAY; AND REQUEST FOR CONDITIONAL USE PERMIT TO CONSTRUCT A GUESTHOUSE AND STABLE WITH LOFT AND CORRAL AND RELATED IMPROVEMENTS IN ZONING CASE NO. 902 AT 23 CREST ROAD EAST, LOT 132A -MS, (HYNES). THE PROJECT WAS DETERMINED TO BE EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA). THE CITY COUNCIL DOES HEREBY FIND, RESOLVE AND ORDER AS FOLLOWS: Section 1. Initially, in March 2016 an application was duly filed by Mr. and Mrs. James Hynes with respect to real property located at 23 Crest Road East, Rolling Hills (Lot 132A -MS) requesting a Site Plan Review, Conditional Use Permit, and Variance to allow for the construction of a new 11,500 square foot residence and 11,500 square foot basement, two attached garages totaling 1,540 square feet, 900 square foot swimming pool with spa, an 800 square foot guesthouse in the front yard, 7,150 square foot tennis court and related miscellaneous outdoor structures all requiring over 62,000 cubic yards of grading. Following several public hearings and field visits by the Planning Commission and interested members of the public, the applicants scaled down the project. During the City Council proceedings, described below, the applicants further scaled down the project. Section 2. The Planning Commission conducted duly noticed public hearings to consider the application at their regular meeting on April 19, 2016, May 17, 2016, and at a field visit on May 17, 2016. Following the May 2016 meeting the applicants scaled down the project by removing the tennis court, relocating the guesthouse, proposing a stable, reducing the grading quantities and disturbance of the lot, driveway and the size of the residence. Additional public hearings were held on June 21, 2016, July 19, 2016, and at a field trip on July 19, 2016. Throughout the process, neighbors within 1,000 -foot radius were notified of the public hearings and a notice was published in the Peninsula News on April 7, 2016 and June 9, 2016. The applicants and their agents were notified of the public hearings in writing by first class mail and the applicants and agents were in attendance at the hearings evidence was heard and presented from all person interested in affecting said proposal, and from members of the City staff. Section 3. During the proceedings, the Planning Commission and several neighbors in addition to expressing concerns with the mass of the structures, length of the residence, grading and the impact and aesthetics of the overall development on Crest Road East properties, were concerned with the geology, soil stability, drainage and water run-off from the proposed project and its impact on the downhill properties. The City's drainage and grading engineer and the supervising Building and Safety engineer were present at several meetings and addressed the Commission. The applicants revised their drainage plans, provided hydrology study and included cistern system to retain the run-off from the property. Section 4. The Planning Commission at their August 16, 2016 meeting adopted a Resolution approving the revised project. Following Planning Commission approval of the project, the City Council at their September 12, 2016 took jurisdiction of the project. Pursuant to Section 17.54.015 of the Rolling Hills Municipal Code, a review hearing for cases taken under jurisdiction by the City Council shall be conducted as de novo hearings. Resolution No. 1202 23 Crest Road East Section 5. The City Council conducted duly noticed public hearings to consider the application on October 4, 2016, in the field, at their regularly scheduled meeting on October 10, 2016, and on January 9, 2017. Neighbors within 1,000 -foot radius were notified of the public hearings and a notice was published in Palos Verdes Peninsula News on September 22, 2016. In addition, the Agenda for City Council's meetings is printed in the City's Newsletter. The applicants were notified of the public hearings in writing by first class mail. Evidence was heard and presented from all persons interested in affecting said proposal' and from members of the City staff, City's drainage and grading engineer, neighbors and applicant's engineer and attorney and the City Council had reviewed, analyzed and studied said proposal. Section 6. At the public hearings several residents expressed concerns regarding the stability, erosion and mostly water run-off from the proposed project and the impact on the downhill properties. Both, Lisa Naslund, the City's grading and drainage engineer and the applicants' engineer discussed the building code requirements for handling post development storm water on properties; what studies and reports would be required and the issues that the reviewing engineer would be looking at. The applicants' engineer prepared several hydrology studies and responses to City Council concerns and to residents' statements and letters. According to the applicants' engineer, the project will retain and slow down more run-off on site post construction than what is currently retained. At the October 10, 2016 City Council meeting, members of the City Council also expressed concerns with the size of the residence, grading quantities, steepness of the resulting slopes and visibility of the proposed project from Crest Road, the City's main thoroughfare, and appointed Councilmembers Black and Pieper to an Ad Hoc Committee to work with the applicants to provide an improved and more acceptable project. Following a meeting with the Ad Hoc Committee and several revisions, on January 3, 2017, the applicants submitted a revised project to the City Council. Following lengthy discussion and objections from a couple of residents regarding the drainage and results of the applicants' hydrology study, members of the City Council by a vote 4-1, at the January 9, 2017 meeting, directed staff to prepare a Resolution approving the revised project. Section 7. The City Council finds that the project is exempt from the California Environmental Quality Act, (CEQA) pursuant to Section 15303 (new construction of single family residence and accessory structures), and Section 15061(b)(3) (common sense exemption) of the CEQA guidelines. Section 8. — Site Plan Review -Proposed Development. Section 17.46.030 requires a development plan to be submitted for Site Plan Review and approval before any grading requiring grading permit or any new building or structure may be constructed or any expansion, addition, alteration or repair to existing buildings may be made which involve changes to grading or an increase to the size of the building or structure by not more than 999 square feet in any thirty-six (36) month period. The grading for the development and the new structures require Site Plan Review. The pool/spa requires a Site Plan Review due to the grading and the size (over 800 sq. ft. surface water area), and the dissipater retaining wall require a Site Plan Review due to its height of 5'. With respect to the Site Plan for the development, the City Council hereby approves the request for Site Plan Review in Zoning Case No. 902 to build the proposed project and makes the following findings: Resolution No. 1202 23 Crest Road East 2 A. The proposed development is compatible with the General Plan, the Zoning Ordinance and surrounding uses because the proposed structures comply with the General Plan requirement of low profile, low -density residential development with sufficient open space between surrounding structures and maintaining sufficient setbacks to provide buffers between residential uses. The net lot area of the lot is over 6 acres and the lot is adjacent to other large lots along Crest Road East, where most of the development will take place. The stable and corral promote the rural, equestrian character of Rolling Hills. None of the structures are in setbacks. The project conforms to Zoning Code lot coverage requirements, including lot disturbance. The net lot area of the lot is 262,368 square feet. The structural net lot coverage is proposed at 18,659 square feet or 7.1%, which includes all of the structures; with allowance for permitted deductions the structural lot coverage will be 6.9%, (20% max. permitted); and the total lot coverage proposed, including the driveway would be 35,749 square feet or 13.6% excluding permitted deductions, (35% max. permitted). The disturbed area of the lot is proposed to be 36.5%. B. The project substantially preserves the natural and undeveloped state of the lot by minimizing building coverage. The topography and the configuration of the lot have been considered, and it was determined that the proposed development will not adversely affect or be materially detrimental to adjacent uses, buildings, or structures, because the proposed project will be constructed partially on the existing undulated (not steep) area of the lot, will be the least intrusive to surrounding properties, will be screened and landscaped with trees and shrubs, is of sufficient distance from nearby residences so that it will not impact the view or privacy of surrounding neighbors, and will allow the owners to enjoy their property without deleterious infringement on the rights of surrounding property owners. The proposed project would be located on a gentler slope of the property and leaving the steeper and more densely vegetated areas in their natural state to the south, along with the natural drainage course. The revised project provides for less than the maximum permitted slope gradient in areas that would be most visible from Crest Road E. The project promotes equestrian uses, therefore furthering the City's goal to remain an equestrian community. C. The proposed development, as conditioned, is harmonious in scale and mass with the site, and is consistent with the scale of the neighborhood when compared to new residences in the vicinity of said lot. The development plan takes into consideration the views from Crest Road East and the development will be sunk and moved back from Crest Road East, so that views from the road will not be blocked. The residence is proposed on the shallowest sloped area with a basement being added to increase the residence size while reducing the footprint. The slopes being created have been rounded and it was attempted to mimic the existing slope in the area. Significant portions of the lot will be left undeveloped. The project will be screened from the road and all neighbors. During the review process, at suggestions from the City Council and addressing the neighbors' concerns, the applicant scaled down the grading areas and the project in general to retain as much of the natural terrain as possible and not greatly affect the lower building pad. D. The development plan will introduce additional landscaping, which is compatible with and enhances the rural character of the community, and the landscaping will provide a buffer or transition area between private and public areas. There will be some clearing of existing landscaping due to overgrowth and improper maintenance that has become a fire hazard. Resolution No. 1202 23 Crest Road East 3 E. The proposed development is sensitive and not detrimental to the convenience and safety of circulation for pedestrians and vehicles because the new 20' driveway will be safe to drive on as two cars can safely pass one another. There is ample parking in the garages and there is a proposed parking pad at the front of the house, outside of all setbacks, so all visitor parking will be contained on site. An adequate driveway is proposed to safely accommodate horse trailers to the stable and corral area. The Traffic Commission reviewed the proposed driveways and has recommended approval. Section 9 — Conditional Use Permits. Sections 17.18.060 and 17.18.090 of the Rolling Hills Municipal Code permit approval of a stable over 200 square feet and corral over 550 square feet with a Conditional Use Permit. The proposed 1,300 square foot stable with 792 square foot loft and corral comply with all requirements of these sections. An 800 square foot guesthouse is proposed. Section 17.16.210 (A)(5) of the Zoning Ordinance contains conditions for a guesthouse, subject to approval of a conditional use permit. All of the detached structures comply with the provisions and conditions for such structures. With respect to this request for Conditional Use Permit, the City Council finds as follows: A. Conditionally permitted uses are not outright permitted by the Rolling Hills Municipal Code. The City Council must consider applications for a Conditional Use Permit and may, with such conditions as are deemed necessary, approve a conditional use which will not jeopardize, adversely affect, endanger or to otherwise constitute a menace to the public health, safety or general welfare or be materially detrimental to the property of other persons located in the vicinity of such use. B. The granting of a Conditional Use Permit for the stable, corral and guesthouse would be consistent with the purposes and objectives of the Zoning Ordinance and General Plan because the uses are consistent with similar uses in the community, and meet all the applicable code development standards for such uses and they are located in areas on the property that are adequately sized to accommodate such uses. The proposed uses are appropriately located in that they will be sufficiently separated from nearby structures used for habitation or containing sleeping quarters. The stable/corral would be constructed in furtherance of the General Plan goal of promoting and encouraging equestrian uses. The proposed guesthouse is a common amenity to Rolling Hills. C. The nature, condition, and development of adjacent structures have been considered, and the project will not adversely affect or be materially detrimental to these adjacent uses, buildings, or structures because the proposed uses (stable/corral, and guesthouse) are located in the middle of a 6.0 acre lot and their general location is of sufficient distance from nearby residences so as to not impact the view or privacy of surrounding neighbors. The proposed stable is to be located adjacent to the corral and a path designated for equestrian uses that runs from the stable to the road above is separate from the other outdoor living areas on the property and will be comprised of decomposed granite. D. The project is harmonious in scale and mass with the site, the natural terrain, and surrounding residences because the proposed uses comply with the low profile residential development pattern of the community and will not give the property an over -built look, and areas will remain open and unobstructed. The lot is 6.0 acres net in size and is sufficiently large to accommodate the proposed uses. The stable will be compatible with the uses in the surrounding area because Rolling Hills is an equestrian community and stables are encouraged. The stable will look like a stable and with the corral will promote open space on the pad. Resolution No. 1202 23 Crest Road East 4 The guesthouse will be compatible with the uses in the surrounding area because it will have the same architectural design as the house and is in the rear yard and is an amenity other residences in Rolling Hills enjoy. E. The proposed conditional uses comply with all applicable development standards of the zone district and requires Conditional Use Permits pursuant to Sections 17.18.060, 17.18.090, 17.16.210(A)(5) of the Zoning Ordinance. F. The proposed conditional uses are consistent with the portions of the Los Angeles County Hazardous Waste Management Plan relating to siting criteria for hazardous waste facilities because the project site is not listed on the current State of California Hazardous Waste and Substances Sites List. Section 10. Based upon the foregoing findings, and the evidence in the record, the City Council hereby approves Zoning Case No. 902 request for a Site Plan Review and Conditional Use Permits for the construction of a new 10,400 square foot residence, 10,400 square foot basement, 1,120 square foot garage, 475 square foot entry, a total of 2,869 square feet covered porches - 2,500 sq.ft. at main residence, 264 sq.ft. at the stable and 105 sq.ft. at the guest house; a new pool and spa totaling 864 square feet with a 60 square foot pool equipment area, a 171 square foot service yard, a 250 square foot outdoor kitchen, a 350 square feet detached trellis near the proposed 800 square foot guest house, a two- story stable with 1,300 square feet on the first level and a 792 square foot loft, a new driveway and turnaround access, a pervious access to the stable, several retaining walls and grading of a total of 48,180 cubic yards of dirt; (the dirt from the basement, 5,750 c.y. may be exported), subject to the following conditions: A. The Site Plan and Conditional Use Permits approvals shall expire within two years from the effective date of approval as defined in Sections 17.46.080(A) and 17.42.070 of the Zoning Ordinance unless otherwise extended pursuant to the requirements of this section. B. If any condition of this resolution is violated, the entitlement granted by this resolution shall be suspended and the privileges granted hereunder shall lapse and upon receipt of written notice from the City, all construction work being performed on the subject property shall immediately cease, other than work determined by the City Manager or his/her designee required to cure the violation. The suspension and stop work order will be lifted once the Applicant cures the violation to the satisfaction of the City Manager or his/her designee. In the event that the Applicant disputes the City Manager or his/her designee's determination that a violation exists or disputes how the violation must be cured, the Applicant may request a hearing before the City Council. The hearing shall be scheduled at the next regular meeting of the City Council for which the agenda has not yet been posted, the Applicant shall be provided written notice of the hearing. The stop work order shall remain in effect during the pendency of the hearing. The City Council shall make a determination as to whether a violation of this Resolution has occurred. If the Council determines that a violation has not occurred or has been cured by the time of the hearing, the Council will lift the suspension and the stop work order. If the Council determines that a violation has occurred and has not yet been cured, the Council shall provide the Applicant with a deadline to cure the violation; no construction work shall be performed on the property until and unless the violation is cured by the deadline, other than work designated by the Council to accomplish the cure. If the violation is not cured by the deadline, the Council may either extend the deadline at the Applicant's request or schedule a hearing for the revocation of the entitlements granted by this Resolution pursuant to Chapter 17.58 of the Rolling Hills Municipal Code (RHMC). Resolution No. 1202 23 Crest Road East 5 CO C. All requirements of the Building and Construction Ordinance, the Zoning ordinance, and of the zone in which the subject property is located must be complied with unless otherwise set forth in this permit, or shown otherwise on an approved plan. D. The lot shall be developed and maintained in substantial conformance with the site plan on file dated January 3, 2017, except as otherwise provided in these conditions. The working drawings submitted to the Department of Building and Safety for plan check review shall conform to the approved development plan. All conditions of the Site Plan Review and Conditional Use Permit approvals shall be incorporated into the building permit working drawings, and where applicable complied with prior to issuance of a grading or building permit from the building department. The conditions of approval of this Resolution shall be printed onto building plans submitted to the Building Department for review and shall be kept on site at all times. Any modifications and/or changes to the approved project, including resulting from field conditions, shall be discussed and approved by staff prior to implementing the changes. E. The Plans shall be submitted to the LA County Building and Safety Department for review, issuance of permits and inspections. Prior to submittal of final working drawings to Building and Safety Department for issuance of building permits, the plans for the project shall be submitted to City staff for verification that the final plans are in compliance with the plans approved by the Planning Commission. F. A licensed professional preparing construction plans for this project for Building Department review shall execute a Certificate affirming that the plans conform in all respects to this Resolution approving this project and all of the conditions set forth therein and the City's Building Code and Zoning Ordinance. Further, the person obtaining a building and/or grading permit for this project shall execute a Certificate of Construction stating that the project will be constructed according to this Resolution and any plans approved therewith. G. Structural lot coverage of the lot shall not exceed 18,659 square feet or 7.1% of the net lot area, in conformance with lot coverage limitations, and with the permitted allowances 18,189 square feet or 6.9% coverage, (20% maximum). The total lot coverage proposed, including structures and flatwork, shall not exceed 35,749 square feet or 13.6%, of the net lot area, excluding deductions, in conformance with lot coverage limitations (35% maximum). H. The disturbed area of the lot, including the approved stable and corral shall not exceed 36.5%; over a 95,850 square feet surface area. Grading for this project shall not exceed a total of 48,180 cubic yards of which 5,750 c.y from the basement may be exported. I. The residential building pad is proposed at 41,660 square feet and shall not exceed coverage of 14,680 square feet or 35.3% with allowed deductions. The stable pad is proposed at 11,100 square feet and shall not exceed 2,259 square feet of coverage or 20.4%. Resolution No. 1202 23 Crest Road East 6 J. A new driveway shall be provided per the Fire Department requirements and the apron of the driveway shall be roughened and the first 20 feet of the driveway shall not exceed 7% in slope. K. Access to the stable and to the corral shall be decomposed granite or like, 100% pervious roughened material. L. Per Section 17.16(A)(5)(c) of the zoning ordinance, only one sanitary facility consisting of a shower, sink, and a toilet and a kitchenette is permitted in the guesthouse; there shall be no parking area within 50 -feet of the guesthouse; no renting of the guesthouse is permitted. M. A minimum of five-foot level path and/or walkway, which does not have to be paved, shall be provided around the entire perimeter of all of the proposed structures, or as otherwise required by the Fire Department. N. At any time there are horses on the property, Best Management Practices (BMPs) shall be applied for manure control, including but not be limited to removal of the manure on a daily basis or provision of a receptacle with a tight closing lid that is constructed of brick, stone, concrete, metal or wood lined with metal or other sound material and that is safeguarded against access by flies. The contents of said receptacles shall be removed once a week. It is prohibited to dispose of manure or any animal waste into the Municipal Separate Storm Sewer System (MS4), into natural drainage course or spread on the property. O. The pool equipment area shall be enclosed and the enclosure screened with landscaping. Per LA County Building Code, pool barrier/fencing shall be required. P. The applicant shall comply with all requirements of the Lighting Ordinance of the City of Rolling Hills (RHMC 17.16.190 E), pertaining to lighting on said property; roofing and material requirements of properties in the Very High Fire Hazard Severity Zone, and all other ordinances and laws of the City of Rolling Hills and the LA County Building Code. Q. All utility lines to the residence, guesthouse, and stable shall be placed underground, subject to all applicable standards and requirements. R. Hydrology, soils, geology and other reports, as required by the LA County Building and Public Works Departments, and as may be required by the Building Official, shall be prepared. S. Prior to issuance of a fmal construction approval of the project, all graded slopes shall be landscaped. Prior to issuance of building permit, a landscaping plan shall be submitted to the City in conformance with Fire Department Fuel Modification requirements and requirements for graded slopes. The landscaping shall not form a hedge like screen but be offset. The height of any new trees and shrubs to be planted in conjunction with this project shall not at any time exceed the ridgeline of the roof of the structures, which they are screening. In order to preserve the sightline of the view from Crest Road East, the height of any landscaping planted on the property along the Crest Road E. roadway easement, or along the front of the residence shall be maintained so as not to exceed three (3) feet from the road elevation. The landscaping plan shall utilize to the maximum extent feasible, plants that are native to the area, are water -wise and are consistent with the rural character of the community. The landscaping shall be subject to the requirements of the City's Water Efficient Landscape Ordinance, (Chapter 13.18 of the RHMC). Resolution No. 1202 23 Crest Road East 7O T. The dissipaters and pool equipment area shall be screened with landscaping. Sound attenuating equipment shall be installed to dampen the sound from the pool equipment area and the pool pump. The project shall utilize the most quiet and technologically advanced equipment to dampen the sound. U. The setback lines and roadway easement lines in the vicinity of the construction for this project shall remain staked throughout the construction. During construction a construction fence shall be installed. V. Perimeter easements, including roadway easements and trails, if any, shall remain free and clear of any improvements including, but not be limited to fences -including construction fences, any hardscape, driveways, landscaping, irrigation and drainage devices, except as otherwise approved by the Rolling Hills Community Association. In addition, any construction facility, such as a construction trailer/office or portable toilets, to a maximum extent practicable, shall be located in a manner not visible from the street, and be in a location satisfactory to City staff. W. Minimum of 65% of any construction materials must be recycled or diverted from landfills. The hauler of the materials shall obtain City's Construction and Demolition permits for waste hauling prior to start of work and provide proper documentation to the City. X. During construction, conformance with the air quality management district requirements, storm water pollution prevention practices, county and local ordinances and engineering practices shall be required, so that people or property are not exposed to undue vehicle trips, noise, dust, and objectionable odors. Y. Construction vehicles or equipment, employees vehicles or delivery trucks, to the maximum extend practical, shall not impede any traffic lanes; if it becomes necessary to block traffic in order to aid in the construction, no more than a single lane or portion thereof may be blocked for a short period of time and flagmen utilized on both sides of the impeded area to direct traffic. Z. During construction, all parking shall take place on the project site, on the new driveway and, if necessary, any overflow parking may take place within the unimproved roadway easement along Crest Road East, and shall not obstruct neighboring driveways or pedestrian and equestrian passage. During construction, to the maximum extent feasible, employees of the contractor shall car-pool into the City. A minimum of 4' wide path, from the edge of the roadway pavement, for pedestrian and equestrian passage shall be available and clear at all times. AA. During construction, the property owners shall be required to schedule and regulate construction and related traffic noise throughout the day between the hours of 7 AM and 6 PM, Monday through Saturday only, when construction and mechanical equipment noise is permitted, so as not to interfere with the quiet residential environment of the City of Rolling Hills. AB. The contractor shall not use tools that could produce a spark, including for clearing and grubbing, during red flag warning conditions. Weather conditions can be found at: http://www.wrh.noaa.gov/lox/main.pho?suite=safety&page=hazard definitions#FIRE. Resolution No. 1202 23 Crest Road East 8 It is the sole responsibility of the property owner and/or his/her contractor to monitor the red flag warning conditions. Should a red flag warning be declared and if work is to be conducted on the property, the contractor shall have readily available fire extinguisher. AC. The property owners shall be required to conform with the Regional Water Quality Control Board and County Public Works Department Best Management Practices (BMP's) requirements related to solid waste, drainage, cistern construction and maintenance, septic tank construction and maintenance in conformance with the County Health Department, storm water drainage facilities management, and to the City's Low Impact development Ordinance (LID). AD. Prior to fmaling of the project an "as graded" and "as constructed" plans and certifications, including certifications of ridgelines of the structures, shall be provided to the Planning Department and the Building Department to ascertain that the competed project is in compliance with the approved plans. In addition, any modification made to the project during construction, shall be depicted on the "as built/as graded" plan. AE. The applicant shall execute an Affidavit of Acceptance of all conditions of this permit pursuant to Zoning Ordinance, or the approval shall not be effective. The affidavit shall be recorded together with the resolution. PASSED, APPROVED AND ADOPTED THIS 23rd DAY OF JANUARY 2017. BEA DIERINGER, MAYOR ATTEST: HEIDI LUCE, CITY CLERK Any action challenging the final decision of the City made as a result of the public hearing on this application must be filed within the time limits set forth in Section 17.54.070 of the Rolling Hills Municipal Code and Code of Civil Procedure Section 1094.6. Resolution No. 1202 23 Crest Road East 9 STATE OF CALIFORNIA COUNTY OF LOS ANGELES CITY OF ROLLING HILLS )§§ I certify that the foregoing Resolution No. 1202 entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS APPROVING A REQUEST FOR A SITE PLAN REVIEW FOR GRADING AND CONSTRUCTION OF A NEW RESIDENCE WITH BASEMENT, GARAGES, COVERED PORCHES, SWIMMING POOL WITH A SPA, RETAINING WALLS AND NEW DRIVEWAY; AND REQUEST FOR CONDITIONAL USE PERMIT TO CONSTRUCT A GUESTHOUSE AND STABLE WITH LOFT AND CORRAL AND RELATED IMPROVEMENTS IN ZONING CASE NO. 902 AT 23 CREST ROAD EAST, LOT 132A -MS, (HYNES). THE PROJECT WAS DETERMINED TO BE EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) was approved and adopted at a regular meeting of the City Council on January 23rd, 2017, by the following roll call vote: AYES: NOES: ABSENT: ABSTAIN: and in compliance with the laws of California was posted at the following: Administrative Offices. HEIDI LUCE, CITY CLERK Resolution No. 1202 23 Crest Road East 10 (1) 64 al Ref&if get4 INCORPORATED JANUARY 24, 1957 NO.2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No: 8-A Mtg. Date: 01/23/17 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM TERRY SHEA, FINANCE DIRECTOR THRU: RAYMOND R. CRUZ, CITY MANAGER kLi- SUBJECT: REVIEW OF FISCAL YEAR 2015/2016 AUDITED FINANCIAL STATEMENTS DATE: JANUARY 23, 2017 ATTACHMENTS: Annual Financial Statements Fiscal Year 2015-16 (p. 3-72) LSL Certified Public Accountants Letter of 12/20/2016 (p. 73-76) LSL Certified Public Accountants Report on Internal Controls (p. 77-78) LSL Certified Public Accountants Report on Appropriations Limit Worksheet (p. 79-82) General Fund Fiscal Year 2015-16 Revenues & Expenditures - Final Budget vs. Audited Actual (p. 83-84) Fiscal year 2015-16 Final Audited Financial Statement (p. 85-86) RECOMMENDATION It is recommended that the City Council receive and file the Fiscal Year 2015-16 Annual Financial Statements and associated audit letters. BACKGROUND Attached you will find the City of Rolling Hills' Fiscal Year 2015-16 Annual Financial Statement (Statement) and associated letters prepared by Lance, Soll & Lunghard, LLP (LSL). The Statement expresses an "unmodified opinion" for the City acknowledging the City's finances and accounting procedures are in order. The Finance/Budget/Audit Committee met with the auditor and reviewed the materials on December 19, 2016 and the Committee Members had a few questions concerning various items as referenced in the meeting notes, all items were answered to their satisfaction. DISCUSSION In early November, Lance, So11 & Lunghard, LLP (LSL) audited the City's financial records inclusive of reviewing its internal controls and testing procedures. As a result of that effort, along with an unmodified opinion in the CAFR, LSL issued two letters and an Appropriations Limit Worksheet. As covered in the attached Internal Control Letter, LSL found that the City has no internal control deficiencies or compliance issues. CONCLUSION It is recommended that the City Council approve the audit by receiving and filing the documents provided by LSL. If there are questions with regard to the audit, they can be addressed to the auditor directly or to the City's Finance Director. TS/RC:hl Financial Statement Audit 2015 -16 -Staff Report.docx CPAs AND ADVJSORS 0000 0000 00 CITY OF ROLLING HILLS JUNE 30, 2016 FINANCIAL STATEMENTS Focused on Yo. 0 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ROLLING HILLS, CALIFORNIA FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 PREPARED BY: THE CITY OF ROLLING HILLS, CALIFORNIA FINANCIAL SERVICES DEPARTMENT THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ROLLING HILLS FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS Page Number FINANCIAL SECTION INDEPENDENT AUDITORS' REPORT 1 MANAGEMENT'S DISCUSSION AND ANALYSIS 5 BASIC FINANCIAL STATEMENTS Govemment-Wide Financial Statements: Statement of Net Position 13 Statement of Activities 14 Fund Financial Statements: Balance Sheet - Governmental Funds 16 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 17 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 18 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 19 Statement of Net Position - Proprietary Funds 20 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds 21 Statement of Cash Flows - Proprietary Funds 22 Statement of Fiduciary Net Position 23 Notes to Financial Statements 25 CITY OF ROLLING HILLS FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2016 TABLE OF CONTENTS Page Number REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information 47 Budgetary Comparison Schedule — General Fund 49 Schedule of Proportionate Share of the Net Pension Liability — Miscellaneous 50 Schedule of Plan Contributions — Miscellaneous 51 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Combining Balance Sheet — Nonmajor Governmental Funds 52 Combining Statement of Revenues, Expenditures and Changes in Fund Balances — Nonmajor Governmental Funds 54 Budgetary Comparison Schedules - Special Revenue Funds: Community Facilities 56 Transit 57 Traffic Safety 58 Measure R 59 COPS Fund 60 CLEEP 61 Budgetary Comparison Schedules — Capital Projects Funds: Underground Utility Fund 62 Statement of Changes in Assets and Liabilities — Agency Fund 63 CPAs AND ADVISORS 0000 0000 00 INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of Rolling Hills, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Rolling Hills, California, (the City) as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. PrimeGlobal Arz. r., LSL°°:: CPAs AND ADV,SO-AsS To the Honorable Mayor and Members of the City Council City of Rolling Hills, California Opinions 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, each major fund, and the aggregate remaining fund information of the City of Rolling Hills, California, as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the budgetary comparison schedules for the general fund, the schedule of proportionate share of the net pension liability and the schedule of contributions be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. 2 LSL°°:: 0. 0. 0. To the Honorable Mayor and Members of the City Council City of Rolling Hills, California Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2016 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. lee 4/44, e, • re° Brea, California December 20, 2016 3 THIS PAGE INTENTIONALLY LEFT BLANK 4 Management Discussion and Analysis The following narrative provides an overview and analysis of the financial activities of the City of Rolling Hills for the fiscal year ended June 30, 2016. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal and the City's financial statements. Financial Highlights • The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $6,909,668 (net position). Of this amount, $4,851,931, (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $6,089,798. Of this amount $4,563,558 is unassigned and available for spending at the City's discretion. • tit the end of the current year, unassigned fund balance for the General Fund was $4,563,558 which represents 2.96 times the total General Fund expenditures. • General Fund revenues available for appropriation were $230,208 more than budgeted while actual expenditures were $308,270 less than budgeted. After transfers in and out, the General Fund showed a $228,305 increase in fund balance. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements contain the following three components: 1) Government -wide Financial Statements, 2) Fund Financial Statements and 3) Notes to the Financial Statements. Government -wide Financial Statements. The government -wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private sector business. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. The statement of net position presents information on all of the City's assets, deferred inflows/outflows of resources and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change regardless of the timing of related cash flows. Thus, some of the revenues and expenses reported in this statement will have no effect on cash until some future fiscal period. Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover some or all of their costs through user fees and charges (business -type activities). Governmental activities. Most of the City's basic services are reported in this category, including the general administration, public safety, planning and development, recreation and public works. Property taxes, sales tax, real estate transfer tax, licenses and permits, franchise fees, charges for services, interest income, grants, contributions from other agencies, and other revenues finance these activities. Business -type activities. The City charges a fee to customers to cover all or most of the costs of certain services it provides. The City's Refuse Collection operation is reported in this category. The government -wide financial statements can be found on pages 13 to 15 of this report. Fund Financial Statements. The fund financial statements provide detailed information about the City's most significant funds. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds. Most of the City's basic services are reported in governmental funds, which focus on how money flows in and out of those funds and balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. The difference between the results in the Governmental Fund financial statements to those in the Government wide financial statements are explained in a reconciliation following each Governmental Fund financial statement. In addition to the major funds reported separately on the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balance, the City also maintains 7 special revenue funds and one capital project fund. Data from these funds are combined into a single, aggregated presentation referred to as other governmental funds. Individual fund data for each of these non -major governmental funds are provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for all of its governmental and proprietary funds. A budget comparison statement has been provided for the general fund to demonstrate compliance with this budget. This comparison can be found on page 49 of this report. The basic governmental fund financial statements can be found on pages 16 to 19 of this report. Proprietary funds. When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Within the category of proprietary funds are Enterprise Funds and Internal Service Funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City uses an enterprise fund to account for its Refuse activity. Internal service funds are an accounting devise used to accumulate and allocate costs internally among the City's various functions. The City uses an internal service fund to account for its Municipal Self Insurance costs. Because these services predominantly benefit governmental rather than business -type functions, this fund has been included within the governmental activities in the government -wide financial statement. The basic proprietary fund financial statements can be found on pages 20 to 22 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of these funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The City's fiduciary activities are reported in a separate Statement of Fiduciary Net Position. The basic fiduciary fund fmancial statements can be found on page 23 of this report. Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. The notes to the financial statements can be found on pages 25 to 46 of this report. 6 Other Information. The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 52 to 63 of this report. Governmental -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. The City's net position for fiscal years 2015-2016 and 2014-15 are shown in Table 1. In the City of Rolling Hills, total assets and deferred outflows exceeded total liabilities and deferred inflows by $6,909,668 at June 30, 2016. Table 1 City of Rolling Hills Net Position Governmental Business Activities Activities Total Primary Government 2016 2015 2016 2015 2016 2015 Assets: Current and other assets $6,727,173 $6,469,327 $634,504 $264,479 $7,361,677 $6,733,806 Capital assets 568,933 564,040 - 568,933 564,040 Total assets 7,296,106 7,033,367 634,504 264,479 7,930,610 7,297,846 Deferred outflows of resources: Pension related items 59,205 52,358 59,205 52,358 Liabilities: Current and other liabilities 543,291 622,239 377,990 921,281 622,239 Total Liabilities 543,291 622,239 377,990 - 921,281 622,239 Deferred inflows of resources: Pension related items 158,866 169,823 158,866 169,823 Net position: Invested in capital assets 568,933 564,040 568,933 564,040 Restricted 1,488,804 1,199,778 - - 1,488,804 1,199,778 Unrestricted 4,595,417 4,529,845 256,514 264,479 4,851,931 4,794,324 Total net position $6,653,154 $6,293,663 $256,514 $264,479 $6,909,668 $6,558,142 Of the City of Rolling Hills net position, 8.23% reflects its investment in capital assets (land). An additional portion of the City of Rolling Hills net position, 21.55% represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, 70.22% may be used to meet the government's ongoing obligations. At the end of the current fiscal year, the City of Rolling Hills is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business -type activities. The same situation was true for the prior fiscal year. 7 Governmental activities. As a result of the governmental activities, the City of Rolling Hills net position increased by $359,491. Key elements of this increase are as follows: Table 2 City of Rolling Hills Net Position Changes in Net Position Governmental Business Activities Activities Total Primary Government 2016 2015 2016 2015 2016 2015 Revenues: Program revenues: Charges for services $628,654 $663,946 $772,015 $760,014 $1,400,669 $1,423,960 Operating grants and contributions 199,418 245,116 - 199,418 245,116 Capital grants and contributions General Revenues: Property taxes 964,914 914,179 964,914 914,179 Franchise taxes 19,995 19,792 19,995 19,792 Other taxes 79,456 65,300 79,456 65,300 Motor Vehicle in lieu - unrestricted 186,866 175,370 186,866 175,370 Use of money and property 88,129 77,927 88,129 77,927 Other 45,516 34,370 45,516 34,370 Total revenues 2,212,948 2,196,000 772,015 760,014 2,984,963 2,956,014 Expenses: General government 951,875 830,601 951,875 830,601 Public safety 325,284 304,054 325,284 304,054 Planning and development 525,138 468,250 525,138 468,250 Recreation 5,354 2,500 5,354 2,500 Public works 69,806 213,978 - - 69,806 213,978 Refuse Collection Fund - - 755,980 728,264 755,980 728,264 Total expenses 1,877,457 1,819,383 755,980 728,264 2,633,437 2,547,647 Excess (deficiency) before transfers 335,491 376,617 16,035 31,750 351,526 408,367 Transfers 24,000 24,000 (24,000) (24,000) - Increase (decrease) in net position 359,491 400,617 (7,965) 7,750 351,526 408,367 Net position - beginning -restated 6,293,663 5,893,046 264,479 256,729 6,558,142 6,149,775 Net position - ending $6,653,154 $6,293,663 $256,514 $264,479 $6,909,668 $6,558,142 8 Governmental Activities The increase in net position of $359,491 during the current fiscal year is directly related to the revenues exceeding the expenditures of the governmental funds by $493,331. The governmental funds had a net change in fund balance of $517,331 which was offset in the government -wide statements by $(4,303) for the funding of the OPEB, $(222,568) in net expense of the internal service fund, $(6,340) in unavailable revenue, $69,774 in pension related expenses, $704 in the change in compensated absences payable and capital asset additions of $4,893. The net cost of all governmental activities for the year was $1,049,385. Overall, the City's governmental program revenues were $828,072; of the remaining "public benefit" governmental activities, $964,914 were paid with Property Taxes, Motor Vehicle in lieu Taxes of $186,866 and Use of Money and Property of $88,129. The City's programs for governmental activities include General Government, Public Safety, Planning and Development, Public Works and Recreation. Business -Type Activities The program for the business -type activities includes refuse collection operations. As a result of the business -type activities, the City of Rolling Hills net position decreased by $7,965. The decrease in net position is mainly attributable to not increasing in the monthly refuse charges because of available reserves. Charges for services are the major revenue source for the City's business type activities, accounting for 100% or $772,015 of total business -type activity revenue. The cost of Proprietary (Business Type) activities this year was $779,980 and included $24,000 of transfers to the General Fund for administrative services. Financial Analysis of the Government's Funds As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds. The focus of the City's governmental funds is to provide information on near -term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of fiscal year 2015-16, the City's governmental funds reported combined ending fund balances of $6,089,798 an increase of $517,331 from the previous year. The increase is attributed to revenues and transfers in exceeding expenditures and transfers out in the current fiscal year of $517,331. Total governmental revenues of $2,219,288 increased by $7,253 from prior year amount of $2,212,035, the components of the increase are as follows; property taxes increased $50,735, real estate transfer tax increased $7,619, motor vehicle in -lieu increased $11,496, interest income increased $10,146, sales tax increased $6,538 and fines and forfeitures increased $7,498 which was offset by a decrease of Proposition A funds exchange revenue of $56,250, and a decrease in license and permit revenues of $45,279. Total governmental expenditures of $1,725,957 decreased by $77,853 from the prior year amount of $1,803,810, the components of the decrease are as follows; General Government expenditures decreased by $30,049 due to a decrease in legal costs and election costs, Planning and Development costs increased by $73,244 due to increased activity and an additional fulltime position, Public Works expenditures decreased by $144,172 due to the exchange of Proposition A Funds of $75,000 and the gifting of Proposition C and Measure R Funds of $70,000 and $50,000 respectively in the prior fiscal year, Public Safety expenditures increased by $21,230 for additional traffic officers and wildlife pest control and management. Approximately 74.94% of ending fund balance $4,563,558 constitutes unassigned fund balance. The unassigned fund balance represents the amount available for spending at the government's discretion. The remainder of the fund balance is nonspendable, committed to prepaid costs of $37,436 or restricted, subject to externally enforceable legal restrictions of $1,488,804 to indicate that it is unavailable for discretionary spending. 9 8 There are two major funds on the balance sheet for governmental funds. The first is the General Fund, the primary operating fund of the City. At the end of the current fiscal year, unassigned fund balance was $4,563,558 which represents 99.19% of total fund balance of $4,600,994. As a measure of the General Fund's liquidity, it may be useful to compare unassigned and total fund balance to total fund expenditures. Unassigned fund balance represents 2.96 times of total General Fund expenditures, while total fund balance represents 2.99 times of that same amount. The City's General Fund fund balance increased by $228,305 during the current fiscal year which is $313,269 less than the prior year increase of $541,574, primarily because of increases in property taxes of $50,735, motor vehicle in -lieu fees of $11,496, a decrease in Proposition A Exchange revenue of $56,250, and an increase in real estate transfer taxes of $7,619, and interest earnings of $10,146 offset by an increase in General Fund expenditures of $37,527 and increased transfers out of $283,338. The increase in transfers out is due to a transfer of $250,000 to the Underground Utility Fund per City policy and additional road and street striping expenditures. The other major fund on the City's governmental funds balance sheet is the Underground Utility Fund. The Capital Projects — Utility Fund provides funds for consultant and construction services for underground utilities projects and other infrastructure improvements. The Capital Projects — Utility Fund has a total fund balance of $1,236,507, which is an increase of $216,201 from the prior year's balance of $1,020,306, which is the result of a transfer in from the General Fund of $250,000 less current expenditures of $33,799. Proprietary Funds. The City's proprietary funds provide the same type of information found in the government -wide financial statements but in greater detail. Ending unrestricted net position for the Refuse Collection - Enterprise Fund is $256,514. The total change in net position for the Refuse Collection - Enterprise Fund was a net position decrease of $7,965. Ending unrestricted net position for the Municipal Self Insurance Fund - Internal Service Fund is $260,374. The total change in net position for the Municipal Self Insurance Fund - Internal Service Fund was a net position decrease of $222,568, due the write off of accounts receivable related to costs incurred by the City as result of a landslide. General Fund Budgetary Highlights The difference between the original General Fund budget and the final amended budget was an increase of $10,000 in expenditures, which is summarized as follows: City attorney budget was increased $10,000 to cover unanticipated costs. Actual to budget revenue variances included positive variances for Taxes of $145,765 and Building Permit Fees of $38,697. Total General Fund revenues were $230,208 more than budgeted. Total General Fund expenditures were $308,270 less than budgeted due to savings in Planning and Development costs of $126,721, and Non -Department costs of $26,778 which includes insurance, contingency items and emergency preparedness. Also, actual transfers out were $81,893 less than budgeted. Capital Asset and Debt Administration Capital Assets. The City's investment in capital assets for its governmental and business -type activities as of June 30, 2016 amounts to $568,933. This investment includes land for the City Hall campus, tennis courts, Poppy Trail land, Hesse's Gap, Hix Ring and Storm Hill Park. Additional information on the City of Rolling Hills capital assets can be found in Note 5 on page 36 of this report. Long-term Debt. The City avoids debt financing and has no long-term debt. At the end of the current fiscal year, the City's compensated absences decreased by $704. 10 Other Post -Employment Health Care Benefits The City funded the OPEB liability in Fiscal Year 2011-12, which resulted in a Net OPEB Asset of $249,507, which is included on the Statement of Net Position. See Note 9 on pages 44 to 46. Pension Plan Obligations The City implemented GASB Statement 68 during the prior fiscal year which resulted in ending net pension liability of $421,924 at June 30, 2015 and $369,954 at June 30, 2016. Economic Factors and Next Year's Budgets The City Council adopted the Fiscal Year 2016-17 budget on June 13, 2016, and the following factors were considered in preparing the budget: • A continued conservative approach to revenue projections with 6.0 % increases in property taxes and associated 4.0% increase in demand for development activity. The Fiscal Year 2016-17 budget includes a net increase in budgeted revenues of $142,050 in the General Fund. • The Fiscal Year 2016-17 General Fund expenditures are $76,013 more than prior year; due to the current fiscal year including an additional $47,050 to fund an additional full time position in Planning and Building and an increase in public safety costs of $9,200 for additional law enforcement services. • The City's General Fund adopted budget anticipates having a deficit after transfers in and out of $255,243 for Fiscal Year 2016-17. Included are transfers out to the Underground Utility Fund of $250,000, to the Traffic Safety Fund of $55,450 for road striping and to the Community Facilities Fund of $62,600 for capital project expenditures. Contacting the City's Financial Department This financial report is designed to provide a general overview of the City's finances and to demonstrate the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City's Finance Department at the City of Rolling Hills, 2 Portuguese Bend Road, Rolling Hills, California 90274. 11 THIS PAGE INTENTIONALLY LEFT BLANK 12 CITY OF ROLLING HILLS STATEMENT OF NET POSITION JUNE 30, 2016 Primary Government Governmental Business -Type Activities Activities Total Assets: Cash and investments $ 6,284,296 $ 605,200 $ 6,889,496 Receivables: Accounts 149,400 29,304 178,704 Accrued interest 6,534 6,534 Prepaid costs 37,436 - 37,436 Net OPEB Asset 249,507 - 249,507 Capital assets not being depreciated 568,933 - 568,933 Total Assets 7,296,106 634,504 7,930,610 Deferred Outflows of Resources: Deferred pension related items Total Deferred Outflows of Resources 59,205 - 59,205 59,205 59,205 Liabilities: Accounts payable 76,374 377,990 454,364 Accrued liabilities 18,305 - 18,305 Unearned revenue 14,012 - 14,012 Deposits payable 18,803 - 18,803 Noncurrent liabilities: Due within one year 11,000 - 11,000 Due in more than one year 34,843 - 34,843 Net pension liability 369,954 - 369,954 Total Liabilities 543,291 377,990 921,281 Deferred Inflows of Resources: Deferred pension related items Total Deferred Inflows of Resources 158,866 158,866 158,866 158,866 Net Position: Investment in capital assets 568,933 Restricted for: Public safety 94,396 Recreation 188 Public works 139,619 Capital projects 1,236,507 Quimby Act 18,094 Unrestricted 4,595,417 Total Net Position See Notes to Financial Statements 256,514 568,933 94,396 188 139,619 1,236,507 18,094 4,851,931 $ 6,653,154 $ 256,514 $ 6,909,668 13 CITY OF ROLLING HILLS STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 Program Revenues Functions/Programs Primary Government: Governmental Activities: General government Public safety Planning and development Recreation Public works Total Governmental Activities Business -Type Activities: Refuse Collection Fund Total Business -Type Activities Total Primary Government See Notes to Financial Statements Expenses $ 951,875 325,284 525,138 5,354 69,806 Charges for Services Operating Contributions and Grants $ 1,338 $ 19,847 607,469 1,877,457 628,654 755,980 772,015 755,980 772,015 $ 2,633,437 $ 1,400,669 115,499 83,919 199,418 General Revenues: Taxes: Property taxes, levied for general purpose Sales taxes Franchise taxes Other taxes Motor vehicle in lieu - unrestricted Use of money and property Other Transfers Total General Revenues and Transfers Change in Net Position Net Position at Beginning of Year Net Position at End of Year 14 0 Capital Contributions and Grants $ 199,418 $ Net (Expenses) Revenues and Changes in Net Position Primary Government Governmental Business -Type Activities Activities Total $ (950,537) $ $ (950,537) (189,938) - (189,938) 82,331 - 82,331 (5,354) (5,354) 14,113 - 14,113 (1,049,385) (1,049,385) (1,049,385) 16,035 16,035 16,035 16,035 16,035 (1,033,350) 964,914 964,914 14,082 14,082 19,995 19,995 65,374 65,374 186,866 186,866 88,129 88,129 45,516 45,516 24,000 (24,000) 1,408,876 (24,000) 1,384,876 359,491 (7,965) 351,526 6,293,663 264,479 6,558,142 $ 6,653,154 $ 256,514 $ 6,909,668 See Notes to Financial Statements 15 CITY OF ROLLING HILLS BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2016 Capital Projects Funds Assets: Cash and investments Receivables: Accounts Accrued interest Prepaid costs Total Assets Liabilities, Deferred Inflows of Resources, and Fund Balances: Liabilities: Accounts payable Accrued liabilities Unearned revenues Deposits payable Total Liabilities Fund Balances: Nonspendable: Prepaid costs Restricted for: Public safety - Police Recreation - Community Facilities Grants - Public works Capital Projects Quimby Act Unassigned Total Fund Balances Total Liabilities, Deferred Inflows of Resources, and Fund Balances See Notes to Financial Statements Other Underground Governmental General Utility Fund Funds Total Governmental Funds $ 4,527,811 $ 1,236,507 $ 259,604 $ 6,023,922 149,400 6,534 37,436 149,400 6,534 37,436 $ 4,721,181 $ 1,236,507 $ 259,604 $ 6,217,292 $ 69,067 $ 18,305 14,012 18,803 $ 7,307 $ 76,374 18,305 14,012 18,803 120,187 37,436 1,236,507 4,563,558 7,307 94,396 188 139,619 18,094 127,494 37,436 94,396 188 139,619 1,236,507 18,094 4,563,558 4,600,994 1,236,507 252,297 6,089,798 $ 4,721,181 $ 1,236,507 $ 259,604 $ 6,217,292 16 CITY OF ROLLING HILLS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2016 Fund balances of governmental funds $ 6,089,798 Amounts reported for governmental activities in the statement of net position are different because: Capital assets net of depreciation have not been included as financial resources in governmental fund activity. 568,933 Deferred outflows of resources relate to: Pension contributions made after the measurement date 45,578 Adjustment due to differences in proportions 11,409 Differences between expected and actual experience 2,218 Compensated absences that have not been included in the governmental fund activity. (45,843) Governmental funds report all OPEB contributions as expenditures, however in the statement of net position any excesses or deficiencies in contributions in relation to the Annual Required Contribution (ARC) are recorded as a asset or liability. 249,507 Governmental funds report all pension contributions as expenditures, however, in the statement of net position, the excess of the plan proportionate share of the total pension liability over the proportionate share of the plan fiduciary net position is reported as a net pension liability. (369,954) Deferred inflows of resources relate to: Net difference between projected and actual earnings on pension plan investments (10,521) Adjustment due to differences in proportions (114,078) Change of Assumptions (20,986) Difference in actual to proportionate share of contributions (13,281) Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. 260,374 Net Position of governmental activities $ 6,653,154 See Notes to Financial Statements CITY OF ROLLING HILLS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Capital Projects Funds Other Total Underground Governmental Governmental General Utility Fund Funds Funds Revenues: Taxes $ 1,064,365 $ $ $ 1,064,365 Licenses and permits 550,697 - 550,697 Intergovernmental 187,747 198,537 386,284 Charges for services 58,110 - 58,110 Use of money and property 87,137 - 992 88,129 Fines and forfeitures 19,847 - 19,847 Miscellaneous 51,856 51,856 Total Revenues 2,019,759 199,529 2,219,288 Expenditures: Current: General government 772,211 - - 772,211 Public safety 214,890 110,394 325,284 Planning and development 546,579 - - 546,579 Recreation - - 5,354 5,354 Public works - 33,799 36,007 69,806 Capital outlay 6,723 - 6,723 Total Expenditures 1,540,403 33,799 151,755 1,725,957 Excess (Deficiency) of Revenues Over (Under) Expenditures 479,356 (33,799) 47,774 493,331 Other Financing Sources (Uses): Transfers in 34,956 250,000 36,007 320,963 Transfers out (286,007) (10,956) (296,963) Total Other Financing Sources (Uses) (251,051) 250,000 25,051 24,000 Net Change in Fund Balances - 228,305 216,201 72,825 517,331 Fund Balances, Beginning of Year 4,372,689 1,020,306 179,472 5,572,467 Fund Balances, End of Year $ 4,600,994 $ 1,236,507 $ 252,297 $ 6,089,798 See Notes to Financial Statements 18 CITY OF ROLLING HILLS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2016 Net change in fund balances - total governmental funds $ 517,331 Amounts reported for govemmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. Capital outlay Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. The amount represents the change in compensated absences. Governmental funds report all contributions in relation to the annual required contribution (ARC) for OPEB as expenditures, however in the statement of activities only the ARC is an expense. The amount represents the change in OPEB liability. Revenues reported as unavailable revenue in the governmental funds and recognized in the statement of activities. These are included in the intergovernmental revenues in the governmental fund activity. Pension obligation expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Internal service funds are used by management to charge the costs of certain activities, such as equipment management and self-insurance, to individual funds. The net revenues (expenses) of the intemal service funds is reported with govemmental activities. 4,893 704 (4,303) (6,340) 69,774 (222,568) Change in net position of governmental activities $ 359,491 See Notes to Financial Statements 19 CITY OF ROLLING HILLS STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2016 Assets: Current: Cash and investments Receivables: Accounts Total Current Assets Total Assets Liabilities and Net Position: Liabilities: Current: Accounts payable Total Current Liabilities Total Liabilities Net Position: Unrestricted Total Net Position Total Liabilities and Net Position See Notes to Financial Statements 20 C) Business -Type Activities - Enterprise Funds Refuse Collection Fund Governmental Activities - Internal Service Funds 605,200 $ 29,304 634,504 260,374 260,374 $ 634,504 $ 260,374 377,990 $ 377,990 377,990 256,514 256,514 260,374 260,374 $ 634,504 $ 260,374 CITY OF ROLLING HILLS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016 Operating Revenues: Sales and service charges Total Operating Revenues Operating Expenses: Administration and general Refuse collection Total Operating Expenses Income (Loss) Before Transfers Transfers out Changes in Net Position Net Position: Beginning of Year End of Fiscal Year See Notes to Financial Statements 21 Business -Type Activities - Enterprise Funds Refuse Collection Fund Governmental Activities - Internal Service Funds $ 772,015 $ 772,015 755,980 755,980 16,035 (24,000) (7,965) 264,479 222,568 222,568 (222,568) (222,568) 482,942 $ 256,514 $ 260,374 CITY OF ROLLING HILLS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS YEAR ENDED JUNE 30, 2016 Business -Type Activities - Enterprise Funds Cash Flows from Operating Activities: Cash received from customers and users Cash paid to suppliers for goods and services Net Cash Provided by (Used in) Operating Activities Cash Flows from Non -Capital Financing Activities: Cash transfers out Net Cash Provided by (Used in) Non -Capital Financing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year Reconciliation of Operating Income (loss) to Net Cash Provided by (Used in) Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities: Decrease in accounts receivable Increase (decrease) in accounts payable Total Adjustments Net Cash Provided by (Used in) Operating Activities Non -Cash Investing, Capital, and Financing Activities: There were no non -cash transactions during the fiscal year See Notes to Financial Statements 22 Refuse Collection Fund Governmental Activities - Internal Service Funds $ 766,913 $ (377,990) 388,923 (24,000) (24,000) 364,923 240,277 $ 605,200 (521) (521) (521) 260,895 $ 260,374 $ 16,035 $ (5,102) 377,990 372,888 (222,568) 222,332 (285) 222,047 $ 388,923 $ (521) CITY OF ROLLING HILLS STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2016 Agency Funds Assets: Cash and investments $ 1,771 Restricted assets: Cash and investments 305,000 Total Assets $ 306,771 Liabilities: Deposits payable $ 306,771 Total Liabilities See Notes to Financial Statements 23 $ 306,771 THIS PAGE INTENTIONALLY LEFT BLANK 24 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS JUNE 30, 2016 1. SIGNIFICANT ACCOUNTING POLICIES Note 1: Organization and Summary of Significant Accounting Policies The basic financial statements of the City of Rolling Hills, California (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). The Governmental Accounting Standards Board (GASB) is the accepted standard -setting body for establishing governmental accounting and financial reporting principles. The more significant of the City's accounting policies are described below. a. Description of Entity The accompanying basic financial statements present the financial activity of the City of Rolling Hills. The City is the level of government primarily accountable for activities relevant to the operations of the City of Rolling Hills, California. The City of Rolling Hills (the City) was incorporated on January 25, 1957, under the provisions of the State of California. The City operates under a Council -Manager form of government and provides the following services as authorized by its charter: public safety, sanitation, animal control, culture and recreation, public improvement planning and zoning, and general administrative services. The Rolling Hills Community Association is not a part of the City's reporting entity because the City has no accountability for fiscal matters of the Rolling Hills Community Association. b. Government -Wide and Fund Financial Statements The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non -fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 25 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) c. Measurement Focus, Basis of Accounting and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. Exceptions to this general rule are charges between the City's proprietary funds function and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for various functions concerned. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, franchise taxes, licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when the govemment receives cash. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, and then use unrestricted resources as needed. The City reports the following major governmental funds: The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The Underground Utility Fund is used to facilitate the expenditures necessary to construct the City's underground utility projects. The City reports the following major proprietary fund: The Refuse Collection Fund is used to account for operations (a) that are financed and operated in a manner similar to private business enterprises - where the intent of 26 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30,2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) the goveming body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Additionally, the City reports the following fund types: • Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. • The Internal service fund accounts for the financing of goods and services provided by one department to other departments on a cost reimbursement basis. The City's internal service fund is for self-insurance. Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the government's proprietary funds are charges to customers for sales and services. Operating expenses for proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting these definitions are reported as non -operating revenues and expenses. Agency funds are used to account for assets held by the City in an agency capacity. The City reports an Agency fund for deposits. d. Assets, Deferred Outflows, Liabilities, Deferred Inflows and Net Position or Equity Cash and Investments All cash and investments, except those that are held by fiscal agents, are held in a City pool. These pooled funds are available upon demand and, therefore, are considered cash and cash equivalents for purposes of the statement of cash flows. Investments held by fiscal agents with an original maturity of three months or less are also considered cash equivalents and are shown as restricted assets for financial statement presentation purposes. Investments for the City, as well as for its component units, are reported at fair value. The City's policy is generally to hold investments until maturity. Receivables and Payables 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 non -current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." All trade and property tax receivables are shown net of allowance for uncollectibles. 27 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) Prepaid Costs Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both govemment-wide and fund financial statements using the purchases method. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items), are reported in the governmental activities columns in the government -wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost when purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets constructed. Property, plant, equipment, and infrastructure of the primary government are depreciated using the straight-line method over the following estimated useful lives: Assets Years Building improvements 7-50 Improvements other than buildings 20 Computer equipment 5-20 Equipment and vehicles 5-20 Furniture and fixtures 20 Compensated Absences It is the City's policy to permit employees to accumulate a limited amount of earned but unused vacation, which will be paid to employees in the period taken or upon separation from City's service. All vacation pay is accrued when incurred in the government -wide financial statements. In governmental funds, the cost of vacations is recognized when payments are made to employees. Accumulated sick leave benefits are not recognized as liabilities of the City. The City's policy is to record sick leave as an operational expense in the period taken, since such benefits do not vest, nor is payment probable; however, unused sick leave is added to the creditable service period for calculation of retirement benefits when the employee retires. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position and governmental fund balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to a future 28 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The government has one item that qualifies for reporting in this category. It is deferred outflows relating to the net pension obligation reported in the government -wide statement of net position. These outflows are the results of contributions made after the measurement period and adjustments due to difference in proportions. In addition to liabilities, the statement of financial position or governmental fund balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government may report one item which arises only under a modified accrual basis of accounting that qualifies for reporting in this category, accordingly, unavailable revenue, is reported only in the governmental funds balance sheet and is related to grant revenue. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The other item that qualifies for reporting in this category are deferred inflows relating to the net pension obligation reported in the government -wide statement of net position. These inflows are the result of the net difference between projected and actual eamings on pension plan investments and difference between the employer's contributions and the employer's proportionate share of plan contributions. These amounts are deferred and amortized straight-line over a five year period or over the remaining service life. Fund Equity In the fund financial statements, government funds report the following fund balance classification: Non -spendable includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation. Committed include amounts that can only be used for specific purposes pursuant to constraints imposed by the City Council through resolution. The City has no committed fund balance as of June 30, 2016. Assigned include amounts that are constrained by the government's intent to be used for specific purposes, but are neither restricted nor committed. The assigned balance is set aside with the intent to be used for a specific purpose by the City Council through resolution. Unassigned include the residual amounts that have not been restricted, committed, or assigned to specific purposes. An individual governmental fund could include non -spendable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or any combination of those classifications. 29 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) The City established certain a minimum fund balance policy as follows: The General Fund, Community Facilities Fund, and Utility Fund shall maintain unrestricted fund balance (amount remaining after non -spendable and restricted fund balance) equivalent to a minimum of 100% of originally adopted annual expenditures (excluding one-time expenditures greater than $25,000) before transfers plus any City Council approved committed or assigned fund balance. Fund Equity Flow Assumptions Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. Net Position Flow Assumption Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted — net position and unrestricted — net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government's policy to consider restricted — net position to have been depleted before unrestricted — net position is applied. Property Tax Property tax revenue is recognized on the basis of GASB Code Section P70, that is, in the fiscal year for which the taxes have been levied providing they become available. Available means due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities of the current period. The County of Los Angeles collects property taxes for the City. Tax liens attach annually as of 12:01 AM on the first day in January prior to the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property, as it exists on that date. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, by December 10 and April 10, respectively. Unsecured personal property taxes become due on March 1 each year and are delinquent, if unpaid, on August 31. Budget The Capital Projects Fund did not adopt a budget for the year. 30 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 1: Organization and Summary of Significant Accounting Policies (Continued) e. Pension Plans For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CaIPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. CaIPERS audited financial statements are publicly available reports that can be obtained at CaIPERS' website under Forms and Publications. GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used. g. Valuation Date (VD): June 30, 2014 Measurement Date (MD): June 30, 2015 Measurement Period (MP): July 1, 2014 to June 30, 2015 New Accounting Standards During the fiscal year ended June 30, 2016, the City implemented GASB Statement No. 72, Fair Value Measurement and Application- effective after June 15, 2015. This statement addresses accounting and financial reporting issues related to fair value measurements. This statement provides guidance for determining a fair value measurement for financial reporting purposes, and provides guidance for applying fair value to certain investments. 31 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 II. DETAILED NOTES ON ALL FUNDS Note 2: Cash and Investments As of June 30, 2016, cash and investments were reported in the accompanying financial statements as follows: Governmental activities . $ 6,284,296 Business -type activities 605,200 Fiduciary funds 306,771 Total Cash and I nvestments $ 7,196,267 The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under provisions of bond indentures. Interest income earned on pooled cash and investments is allocated annually to the various funds based on average daily cash balances. Interest Income from cash and investments with fiscal agents is credited directly to the related fund. Deposits As of June 30, 2016, the carrying amount of the City's deposits was $1,349,310 and the bank balance was $1,376,113. The $26,803 difference represents outstanding checks and other reconciling items. The California Government Code requires Califomia banks and savings and loan associations to secure a City's deposits by pledging government securities with a value of 110% of a City's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total deposits. The City Treasurer may waive the collateral requirement for deposits which are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the local governmental agency. Investments Under provision of the City's investment policy, and in accordance with the California Government Code, the following investments are authorized: • U.S. Treasury Bonds, Notes and Bills • Money Market Savings Accounts • Local Agency Investment Fund (State Pool) • Deposit of Funds 32 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 2: Cash and Investments (Continued) Investments Authorized by Debt Agreements The above investments do not address investment of debt proceeds held by a bond trustee. Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. Investments in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of Califomia. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer's Office audits the fund annually. The fair value of the position in the investment pool is the same as the value of the pool shares. Credit Risk Credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. The City mitigates its credit risk generally by following its three primary investment objectives, in order, of safety, liquidity and yield. The California Government Code generally limits allowable investments to those classes.of investments with lower risk (and therefore lower yields). The City's investment policy further restricts these investments to the highest quality within a category and excludes certain otherwise allowable investments as not meeting the City's liquidity requirement. Credit risk is measured by the assignment of a rating by a nationally recognized statistical rating organization. As of June 30, 2016, all securities were investment grade and were legal under State and City law. Investments in U.S. government securities are not considered to have a credit risk and, therefore, their credit quality is not disclosed As of June 30, 2016, the City's investments in external investment pools and money market mutual funds are unrated. Custodial Credit Risk The 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 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 to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. As of June 30, 2016, none of the City's deposits or investments were exposed to custodial credit risk. 33 9 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 2: Cash and Investments (Continued) Concentration of Credit Risk The City is in compliance with restrictions imposed by its investment policy, which limits certain types of investments. As of June 30, 2016, in accordance with GASB Statement No. 40, if the City has invested more than 5% of its total investments in any one issuer then it is exposed to credit risk. The Investments guaranteed by the U.S. government and investments in mutual funds and external investment pools are excluded from this. As of June 30, 2016, none of the City's deposits or investment were exposed to concentration of credit risk. Interest Rate Risk The City's investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy establishes a maximum maturity of three years for all individual investments. As of June 30, 2016, the City had the following investments and original maturities: Investment Maturities (in Years) 1 year 1- 3 3- 5 Fair or less years years Value Investments Local Agency Investment Fund $ 5,262,710 $ $ $ 5,262,710 Money Market Saving Accounts 89,247 - 89,247 Certificates of Deposits 245,000 250,000 495,000 $ 5,596,957 $ 250,000 $ $ 5,846,957 Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City has the following recurring fair value measurements as of June 30, 2016: Level Totals 1 2 3 Local Agency Investment Fund $ 5,262,710 $ - $ 5,262,710 $ Money Market Saving Accounts 89,247 89,247 Certificates of Deposits 495,000 495,000 $ 5,846,957 $ 584,247 $ 5,262,710 $ 34 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 3: Receivables Receivables at June 30, 2016, for the City's individual major funds, and non -major and internal service funds in the aggregate, including applicable allowances for uncollectible accounts, are detailed below. All receivables are expected to be collected within one year, except for delinquent property taxes. Accounts Receivable Refuse General Collection Fund Fund Total Accounts $ 43,525 $ $ 43,525 Property Taxes 105,875 105,875 Taxes assessed for rubbish collection 29,304 29,304 Total Receivables $ 149,400 $ 29,304 $ 178,704 Note 4: Interfund Transfers Individual fund operating transfers for the fiscal year ended June 30, 2016, are as follows: Transfers Out Funds Non -Major Refuse General Governmental Collection Fund Funds Fund Transfers In: General Fund $ Underground Utility Fund 250,000 Non -Major Funds 36,007 Total $ 10,956 $ 24,000 $ 34,956 250,000 36,007 Total $ 286,007 $ 10,956 $ 24,000 $ 320,963 The General Fund transferred out $250,000 to the Underground Utility Fund for a prior year surplus per the City Finance Policy, and transferred out $36,007 to non -major Governmental Funds for the 2015-2016 Road Striping project. Non -major governmental funds transferred out $10,956 to the General Fund to transfer remaining balance of capital projects not used back to the General Fund. The Refuse Collection Fund transferred out $24,000 to the General Fund to cover administrative expenditures in the current fiscal year. 35 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 5: Capital Assets Capital asset activity for the year ended June 30, 2016, was as follows: Governmental Activities: Capital assets, not being depreciated: Land Construction -in -progress Total Capital Assets, Not Being Depreciated Capital assets, being depreciated: Land Improvements Total Capital Assets, Being Depreciated Balance July 1, 2015 Balance Increases Decreases June 30, 2016 $ 564,040 $ - $ 4,893 $ 564,040 4,893 564,040 4,893 568,933 176,139 176,139 Less accumulated depreciation: Land Improvements 176,139 Total Accumulated Depreciation Total capital assets being depreciated, net Governmental Activities Capital Assets, net 176,139 176,139 176,139 176,139 176,139 $ 564,040 $ 4,893 $ $ 568,933 During the fiscal year ended June 30, 2016, all capital assets with the exception of land and construction -in -progress were fully depreciated and accordingly, no depreciation was recorded or allocated. Note 6: Long -Term Debt The following is a summary of changes in long-term liabilities of the City for the fiscal year ended June 30, 2016: Balance July 1, 2015 Additions Deletions Balance Due Within June 30, 2016 One Year Compensated Absences $ 46,547 $ 27,919 $ 28,623 $ 45,843 $ 11,000 Total $ 46,547 $ 27,919 $ 28,623 $ 45,843 $ 11,000 Liabilities for compensated absences are typically liquidated by the General Fund. 36 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Liability, Insured Programs and Workers' Compensation Protection a. Description of Self -Insured Pool Pursuant to Joint Powers Agreement The City of Rolling Hills is a member of the California Joint Powers Insurance Authority (the Authority). The Authority is composed of 116 California public entities and is organized under a joint powers agreement pursuant to California Government Code§6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self -insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine -member Executive Committee. b. Self -Insurance Programs of the Authority Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Retrospective adjustments are scheduled to continue indefinitely on coverage years 2012-13 and prior, until all claims incurred during those coverage years are closed, on a pool -wide basis. This subsequent cost re -allocation among members, based on actual claim development, can result in adjustments of either refunds or additional deposits required. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for self-insurance programs is estimated using actuarial models and pre -funded through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative to other members of the risk -sharing pool. Additional information regarding the cost allocation methodology is provided below. Liability In the liability program claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $750,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. For 2015-16 the Authority's pooled retention is $2 million per occurrence, with reinsurance to $20 million, and excess insurance to $50 million. The Authority's reinsurance contracts are subject to the following additional pooled retentions: (a) $2.5 million annual aggregate deductible in the $3 million x/s $2 million layer, and (b) $3 million annual aggregate deductible in the $5 million x/s $10 million layer. There is a third annual aggregate deductible in the amount of $2.5 million in the $5 million x/s $5 million layer, however it is fully covered under a separate policy and therefore not retained by the Authority. 37 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Liability, Insured Programs and Workers' Compensation Protection (Continued) The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs of covered claims for subsidence losses have a sub -limit of $30 million per occurrence. Workers' Compensation In the workers' compensation program claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers. For 2015-16 the Authority's pooled retention is $2 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members. c. Purchased Insurance Pollution Legal Liability Insurance The City of Rolling Hills participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Rolling Hills. Coverage is on a claims -made basis. There is a $50,000 deductible. The Authority has a limit of $50 million for the 3 -year period from July 1, 2014 through July 1, 2017. Each member of the Authority has a $10 million sub -limit during the 3 -year term of the policy. Property Insurance The City of Rolling Hills participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Rolling Hills property is currently insured according to a schedule of covered property submitted by the City of Rolling Hills to the Authority. City of Rolling Hills property currently has all-risk property insurance protection in the amount of $949,459. There is a $5,000 deductible per occurrence except for non -emergency vehicle insurance which has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retrospective adjustments. 38 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 7: Liability, Insured Programs and Workers' Compensation Protection (Continued) Crime Insurance The City of Rolling Hills purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retrospective adjustments. d. Adequacy of Protection During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2015-16. Note 8: Pension Plan Obligations California Public Employees' Retirement Plan (PERS) 1. General Information about the Pension Plans Plan Descriptions All qualified permanent and probationary employees are eligible to participate in the City of Rolling Hills' cost -sharing multiple -employer defined benefit pension plans administered by the California Public Employees' Retirement System (CaIPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. The City of Rolling Hills has a Miscellaneous cost -sharing plan including the Classic Tier and PEPRA Tier. Benefits Provided CalPERS provides service retirement and disability benefits, annual cost -of -living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees' Retirement Law. 39 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 8: Pension Plan Obligations (Continued) Below is a summary of the plans' provisions and benefits in effect at June 30, 2016, for which the City of Rolling Hills has contracted: Major Benefit Options Miscellaneous Miscellaneous PEPRA Hire Date Benefit Provision Benefit Formula Social Security Full/Modified Benefit vesting schedule Benefit payments Retirement age Monthly benefits, as a % of eligible compensation Required employer contribution rates Required employee contribution rates Prior to January 1, 2013 2.0%@60 yes modified 5 yrs service monthly for life minimum 50 1.092% to 2.418% 7.510% 7.000% On or after January 1, 2013 2.0% @ 62 no modified 5 yrs service monthly for life minimum 50 1.0% to 2.5% N/A N/A New entrants are not allowed in the Miscellaneous Classic Tier. There were no participants in Miscellaneous PEPRA Tier as of June 30, 2014 therefore, the GASB Statement No. 68 Plan was not available to be accounted in the Net Pension Liability. Contribution Description Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS' annual actuarial valuation process. For public agency cost -sharing plans covered by either the Miscellaneous or Safety risk pools, the Plan's actuarially determined rate is based on the estimated amount necessary to pay the Plan's allocated share of the risk pool's costs of benefits earned by employees during the year, and any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 2016, the contributions recognized as a reduction to the net pension liability for all Plans was $34,611. 2. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2016, the City of Rolling Hills reported net pension liability for its proportionate shares of the net pension liability of the Plan as follows: Proportionate Share of Net Pension Liability Miscellaneous Classic $ 369,954 $ 369,954 40 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 8: Pension Plan Obligations (Continued) The City of Rolling Hills' net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2015, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2014 rolled forward to June 30, 2015 using standard update procedures. The City's proportion of the net pension liability was based on a projection of the City's Tong -term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City's proportionate share of the net pension liability for the Plan as of June 30, 2014 and 2015, was as follows: Miscellaneous Classic Proportion - June 30, 2014 Proportion - June 30, 2015 Change - Increase (Decrease) 0.01707% 0.01348% -0.00359% For the year ended June 30, 2016, the City of Rolling Hills recognized pension expense of ($24,196). At June 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Pension contributions subsequent to $ 45,578 $ measurement date Change in assumptions (20,986) Difference between expected and actual experiences 2,218 Net difference between projected and actual earnings on plan investments (10,521) Adjustment due to differences in proportions 11,409 (114,078) Difference in proportionate share of contributions - (13,281) Total $ 59,205 $ (158,866) $45,578 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Year Ended Deferred Outflows/ June 30 (Inflows) of Resources 2017 $ (56,475) 2018 (56,267) 2019 (45,946) 2020 13,449 Actuarial Assumptions For the measurement period ended June 30, 2015 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2014, total pension 41 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 8: Pension Plan Obligations (Continued) liability. The June 30, 2014 and the the following actuarial methods and Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Salary Increases Investment Rate of Retum Mortality Rate Table (1) Post Retirement Benefit Increase June 30, 2015, total pension liabilities were based on assumptions: Entry Age Normal in accordance with the requirements of GASB Statement No. 68 7.65% 2.75% 3.30% to 14.20% depending on Entry Age and Service 7.50% Net of Pension Plan Investment and Administrative Expenses; includes Inflation Derived using CaIPERS' Membership Data for all Funds Contract COLA up to 2.75% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.75% thereafter (1) The mortality table used was developed based on CaIPERS' specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2014 experience study report. All other actuarial assumptions used in the June 30, 2014, valuation were based on the results of an actuarial experience study for the period from 1997 to 2011, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at CaIPERS' website under Forms and Publications. Change of Assumptions GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate was changed from 7.50 percent (net of administrative expense in 2014) to 7.65 percent as of the June 30, 2015 measurement date to correct the adjustment which previously reduced the discount rate for administrative expense. Discount Rate The discount rate used to measure the total pension liability was 7.65 percent. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CaIPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.65 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 7.65 percent is applied to all plans in the Public Employees Retirement Fund. The stress test results are presented in a detailed report called "GASB Crossover Testing Report" that can be obtained at CaIPERS' website under the GASB 68 section. 42 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 8: Pension Plan Obligations (Continued) The Tong -term expected rate of return on pension plan investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CaIPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds' asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the Tong -term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses. Asset Class Global Equity Global Fixed Income Inflation Sensitive Private Equity Real Estate Infrastructure and Forestland Liquidity New Strategic Allocation 51.0% 19.0 6.0 10.0 10.0 2.0 2.0 Real Return Years 1 -10 (1) 5.25% 0.99 0.45 6.83 4.50 4.50 (0.55) (1) An expected inflation of 2.5% used for this period (2) An expected inflation of 3.0% used for this period Real Return Years 11+ (2) 5.71% 2.43 3.36 6.95 5.13 5.09 (1.05) Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability/ (asset) of the Plan, calculated using the discount rate for the Plan, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% point lower (6.65 percent) or 1% point higher (8.65 percent) than the current rate: 43 CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 8: Pension Plan Obligations (Continued) Plan's Net Pension Discount Rate - 1% Current Discount Rate Discount Rate +1% Liability/(Assets) (6.65%) (7.65%) (8.65%) Miscellaneous Classic $ 711,255 $ 369,954 $ 88,171 Pension Plan Fiduciary Net Position Detailed information about each pension plan's fiduciary net position is available in the separately issued CaIPERS financial reports. See CaIPERS website for additional information. Note 9: Other Post -Employment Health Care Benefits Plan Description The City provides retiree medical benefits through a single -employer defined benefit healthcare plan which provides medical insurance benefits to eligible retirees. A separate financial report is not available for the plan. Eligibility Employees are eligible for retiree health benefits if they retire from the City on or after age 60 with at least 5 years of service with the City, and are eligible for a PERS pension. Membership of the plan consisted of 4 eligible active employees and 4 enrolled eligible retirees at June 30, 2016. These amounts do not reflect current retirees not enrolled in the Cal PERS health plan who are eligible to enroll in the plan at a later date. Funding Policy The contribution requirements of plan members and the City are established and may be amended by the City Council. The City must agree to make a defined monthly payment towards the cost of each retiree's coverage. The actual contribution is based on projected pay-as-you-go financing requirements. Annual OPEB Cost and Net OPEB Obligation The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) not to exceed thirty years. As of June 30, 2015, the most recent actuarial valuation date, the City paid $17,598 in benefits on a pay-as-you-go basis. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation: CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 9: Other Post -Employment Health Care Benefits (Continued) Annual required contribution (ARC) Interest on net OPEB obligation Adjustment to ARC Annual OPEB cost Contributions made (Decrease) increase in Net OPEB obligation Net OPEB obligation (asset) June 30, 2014 Net OPEB obligation (asset) June 30, 2015 June 30,2016 $ 15,613 (10,787) 17,075 21,901 17,598 4,303 (253,810) $ (249,507) The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for the year ended June 30, 2016 and previous two years were as follows: Year Ended 6/30/2014 6/30/2015 6/30/2016 Annual OPEB Cost $ . 14,668 15,042 21,901 Funding Status and Progress Actual Contribution $ 15,528 16,139 17,598 Annual OPEB Cost Contributed 106% 107% 80% Net OPEB Obligation (Asset) $ (252,713) (253,810) (249,507) As of July 1, 2013, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $319,273, and the actuarial value of assets was $473,271, resulting in an unfunded actuarial accrued liability (UAAL) of ($153,998) and a funded ratio (actuarial value of assets as a percentage of the actuarial accrued liability) of 148 percent. The annual covered payroll was $409,228 and UAAL as a % of covered payroll was -37%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for the benefits. Actuarial Valuation Date 7/1/2011 7/1/2013 7/1/2015 Entry Age Actuarial Accrued Liability (a) $ 340,409 282,349 319,273 Schedule of Funding Progress Actuarial Unfunded AAL Funded Asset (UAAL) [(a) - Ratio Value (b) (b)] [(a)/(b)] $ $ 340,409 0% 403,815 (121,466) 143% 473,271 (153,998) 148% 45 Covered Payroll (c) $ 379,349 325,612 409,228 UAAL as a % of Covered Payroll [(b)- (a)/(c)] 89.74% -37.30% -37.63% CITY OF ROLLING HILLS NOTES TO FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2016 Note 9: Other Post -Employment Health Care Benefits (Continued) Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial assets, consistent with the long-term perspective of the calculations. The actuarial cost method used for determining the benefit obligations is the entry age normal cost method. The actuarial assumptions included a 7.25% investment rate of return, which is based on assumed long-term return on plan assets assuming 100% funding through CERBT using the "Building Block Method", an annual healthcare cost trend rate of 4.00%, an inflation rate of 2.75%, and a payroll increase of 2.75% per year. The UAAL is being amortized as a level percentage of projected payroll over 30 years, on a closed amortization period. The remaining amortization period is 28 years. Note 10: Deferred Compensation Plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. Pursuant to the IRC 457 subsection (g); all amounts of compensation deferred under the deferred compensation plan, all property, or rights are solely the property and rights of the employee and beneficiaries of the plan. Deferred compensation funds are not subject to the claims of the City's general creditors; consequently, the assets and related liabilities of the plan are not included within the City's financial statements. The ending investment balance of the plan as of June 30, 2016, was $861,749. Note 11: Commitments and Contingencies Litigation In the opinion of the California Joint Powers Insurance Authority, there are no known claims which would exceed the City's applicable coverage. The City's management is not aware of any lawsuits or claims that would have a material adverse effects on the financial position of the City. Grants Amounts received or receivable from granting agencies are subject to audit and adjustment by grantor agencies. While no matters of non-compliance were disclosed by prior year's audits of the financial statements or by a prior year single audit of a Federal grant program; grantor agencies may subject grant programs to additional compliance tests, which may result in disallowed costs. In the opinion of management, future disallowances of current or prior grant expenditures, if any, would not have a material adverse effect on the financial position of the City. 46 CITY OF ROLLING HILLS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 2016 Stewardship, Compliance and Accountability General Budget Policies The City Council is required to adopt an annual budget resolution by July 1 of each fiscal year. Annual budgets are adopted and presented for reporting purposes on a basis consistent with generally accepted accounting principles. The City Council reviews a tentative budget and adopts a final budget after a public hearing is conducted to receive comments prior to adoption. The City's governing board satisfied these requirements. Expenditures may not exceed the total annual budgeted amount in any category without the approval of the City Council. Throughout the fiscal year, monthly financial reports comparing actual figures with budgeted figures are prepared and distributed to the City Manager and members of the City Council. As these reports are reviewed, attention is drawn to variations between budgeted amounts and actual amounts and if necessary the City Council considers the need for increases in expenditure categories. The original adopted budgets are revised by the City Council during the year to give consideration to these modified expenditure categories and to unanticipated income. It is this final revised budget including all revisions and amendments approved by the City Council subsequent to the initial budget adoption that is presented in the financial statements. The level of appropriated budgetary control is the total adopted budget which is defined as the total budget for all funds and divisions. The City Manager may authorize transfers of appropriations within the sub -categories of the major expenditure categories of the adopted budget. Supplemental appropriations during the year must be approved by the City Council. Unexpended or unencumbered appropriations lapse at the end of the fiscal year. Encumbered appropriations are reappropriated in the subsequent year's budget by action of the City Council. 47 THIS PAGE INTENTIONALLY LEFT BLANK 48 CITY OF ROLLING HILLS BUDGETARY COMPARISON SCHEDULE BY DEPARTMENT GENERAL FUND YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Taxes Licenses and permits Intergovernmental Charges for services Use of money and property Fines and forfeitures Miscellaneous Transfers in Amounts Available for Appropriations Charges to Appropriations (Outflow): General government City administration Finance Non -Department City properties Public safety Planning and Development Capital outlay Transfers out Total Charges to Appropriations Budgetary Fund Balance, June 30 See Notes to Required Supplementary Information Budget Amounts Actual Original Final Amounts $4,372,689 $ 4,372,689 $ 4,372,689 908,600 918,600 1,064,365 512,000 512,000 550,697 180,800 180,800 187,747 41,300 41,300 58,110 74,950 74,950 87,137 12,900 12,900 19,847 49,000 49,000 51,856 34,957 34,957 34,956 6,187,196 6,197,196 6,427,404 616,100 616,100 578,017 119,280 119,280 106,268 64,600 64,600 37,822 52,600 52,600 50,104 230,400 230,400 214,890 663,300 673,300 546,579 10,500 10,500 6,723 367,900 367,900 286,007 2,124,680 2,134,680 1,826,410 Variance with Final Budget Positive jNegative) 145,765 38,697 6,947 16,810 12,187 6,947 2,856 (1) 230,208 38,083 13,012 26,778 2,496 15,510 126,721 3,777 81,893 308,270 $ 4,062,516 $ 4,062,516 $ 4,600,994 $ 538,478 49 CITY OF ROLLING HILLS COST -SHARING MULTIPLE EMPLOYER MISCELLANEOUS PLANS SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 Miscellaneous Classic Rate Plan Rate Plan's Proportion of the Net Pension Liability 0.00678% 0.00539% Rate Plan's Proportionate Share of the Net Pension Liability $ 421,924 $ 369,954 Rate Plan's Covered -Employee Payroll $ 453,661 $ 431,392 Rate Plan's Proportionate Share of the Net Pension Liability as a Percentage of Covered -Employee Payroll 93.00% 85.76% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Plan's Total Pension Liability 78.40% 79.82% Notes to Schedule: Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which ocurred after the June 30, 2014 valuation date. This applies for voluntary benefit changes as well as any offer of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: The discount rate was changed from 7.5 percent to 7.65 percent (net of administrative expense) to correct for an adjustment to exclude administrative expense. (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only two years are shown. 50 CITY OF ROLLING HILLS COST -SHARING MULTIPLE EMPLOYER MISCELLANEOUS PLANS SCHEDULE OF PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1) 2015 2016 Miscellaneous Classic Rate Plan Actuarially Determined Contribution $ 34,611 $ 43,308 Contribution in Relation to the Actuarially Determined Contribution (34,611) (43,308) Contribution Deficiency (Excess) $ - $ Covered -Employee Payroll Contributions as a Percentage of Covered -Employee Payroll $ 453,661 $ 431,392 7.63% 10.04% Miscellaneous PEPRA Rate Plan Actuarially Determined Contribution $ $ 2,270 Contribution in Relation to the Actuarially Determined Contribution (2,270) Contribution Deficiency (Excess) $ $ Covered -Employee Payroll Contributions as a Percentage of Covered -Employee Payroll $ - $ 33,731 0.00% 6.73% (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only two years are shown. Note to Schedule: Valuation Date: June 30, 2013 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry age normal Amortization method/period Level percent payroll/closed Asset valuation method Actuarial value of assets Inflation 2.75% Salary increases Varies by entry age and service Payroll growth 3.00% Mortality The probabilities of retirement are based on the 2010 CaIPERS Experience Study for the period from 1997 to 2007. Pre -retirement and post -retirement mortality rates include 5 years of projected mortality improvement using Scale M published by the Society of Actuaries. 51 CITY OF ROLLING HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 Special Revenue Funds Community Traffic Safety Facilities Fund Transit Fund Fund Assets: Cash and investments $ 18,282 $ 101,320 $ 149 $ 38,299 Total Assets $ 18,282 $ 101,320 $ 149 $ 38,299 Measure R Liabilities and Fund Balances: Liabilities: Accounts payable $ $ $ 149 $ Total Liabilities 149 Fund Balances: Restricted for: Public safety - Police - Recreation - Community Facilities 188 - Grants - Public works - 101,320 Quimby Act 18,094 - 38,299 Total Fund Balances 18,282 101,320 38,299 Total Liabilities and Fund Balances $ 18,282 $ 101,320 $ 149 $ 38,299 52 CITY OF ROLLING HILLS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS JUNE 30, 2016 Assets: Cash and investments $ 50,784 $ 50,770 $ $ 259,604 Total Assets $ 50,784 $ 50,770 $ $ 259,604 Liabilities and Fund Balances: Special Revenue Funds COPS Capital Projects Funds Total Nonmajor Capital Governmental CLEEP Projects Fund Funds Liabilities: Accounts payable $ 7,158 $ $ $ 7,307 Total Liabilities 7,158 7,307 Fund Balances: Restricted for: Public safety - Police 43,626 50,770 94,396 Recreation - Community Facilities - 188 Grants - Public works 139,619 Quimby Act 18,094 Total Fund Balances 43,626 50,770 252,297 Total Liabilities and Fund Balances $ 50,784 $ 50,770 $ $ 259,604 53 CITY OF ROLLING HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Special Revenue Funds Revenues: Intergovernmental Use of money and property Community Traffic Safety Facilities Fund Transit Fund Fund Measure R $ 62,627 $ $ 21,292 100 312 123 Total Revenues 100 62,939 21,415 Expenditures: Current: Public safety Recreation Public works Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out 5,354 36,007 5,354 36,007 (5,254) 62,939 (36,007) 21,415 36,007 Total Other Financing Sources 36,007 Net Change in Fund Balances (5,254) 62,939 21,415 Fund Balances, Beginning of Year 23,536 38,381 - 16,884 Fund Balances, End of Year $ 18,282 $ 101,320 $ $ 38,299 54 CITY OF ROLLING HILLS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS YEAR ENDED JUNE 30, 2016 Capital Special Revenue Funds Projects Fund Revenues: Intergovernmental Use of money and property Total Revenues Expenditures: Current: Public safety Recreation Public works Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Transfers in Transfers out Total Other Financing Sources Net Change in Fund Balances Fund Balances, Beginning of Year COPS $ 114,618 238 114,856 110,394 110,394 4,462 4,462 39,164 Capital CLEEP Projects Fund $ - $ 219 219 Total Nonmajor Governmental Funds $ 198,537 992 199,529 110,394 5,354 36,007 151,755 219 47,774 36,007 (10,956) (10,956) (10,956) 25,051 219 (10,956) 72,825 50,551 10,956 179,472 Fund Balances, End of Year $ 43,626 $ 50,770 $ $ 252,297 55 CITY OF ROLLING HILLS BUDGETARY COMPARISON SCHEDULE COMMUNITY FACILITIES FUND YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Recreation Total Charges to Appropriations Budget Amounts Variance with Final Budget Actual Positive Original Final Amounts (Negative) $ 23,536 $ 23,536 $ 23,536 $ 100 62,400 86,036 100 100 62,400 - 86,036 23,636 57,700 57,700 5,354 57,700 57,700 5,354 (62,400) (62,400) 52,346 52,346 Budgetary Fund Balance, June 30 $ 28,336 $ 28,336 $ 18,282 $ (10,054) 56 D CITY OF ROLLING HILLS BUDGETARY COMPARISON SCHEDULE TRANSIT FUND YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) $ 38,381 $ 38,381 $ 38,381 $ 62,603 62,603 62,627 24 175 175 312 137 101,159 101,159 101,320 161 Budgetary Fund Balance, June 30 $ 101,'159 $ 101,159 $ 101,320 $ 161 57 CITY OF ROLLING HILLS BUDGETARY COMPARISON SCHEDULE TRAFFIC SAFETY FUND YEAR ENDED JUNE 30, 2016 Variance with Final Budget Budget Amounts Actual Positive Original Final Amounts (Negative) Budgetary Fund Balance, July 1 $ $ $ - $ Resources (Inflows): Fines and forfeitures 50 50 - (50) Transfers in 55,500 55,500 36,007 (19,493) Amounts Available for Appropriations 55,550 55,550 36,007 (19,543) Charges to Appropriation (Outflow): Public works 55,550 55,550 36,007 19,543 Total Charges to Appropriations 55,550 55,550 36,007 19,543 Budgetary Fund Balance, June 30 $ $ $ $ 58 CITY OF ROLLING HILLS BUDGETARY COMPARISON SCHEDULE MEASURE R FUND YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Budgetary Fund Balance, June 30 Budget Amounts Original $ 16,884 21,288 75 38,247 Final Actual Amounts $ 16,884 $ 16,884 21,288 21,292 75 123 38,247 38,299 Variance with Final Budget Positive (Negative) $ - 4 48 52 $ 38,247 $ 38,247 $ 38,299 $ 52 59 CITY OF ROLLING HILLS BUDGETARY COMPARISON SCHEDULE COPS FUND YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Intergovernmental Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budget Amounts Original Final $ 39,164 $ 39,164 $ 39,164 $ Variance with Final Budget Actual Positive Amounts (Negative) 100,000 100,000 114,618 14,618 50 50 238 188 139,214 100,000 100,000 139,214 154,020 14,806 100,000 110,394 (10,394) 100,000 110,394 (10,394) Budgetary Fund Balance, June 30 $ 39,214 $ 39,214 $ 43,626 $ 4,412 60 CITY OF ROLLING HILLS BUDGETARY COMPARISON SCHEDULE CLEEP FUND YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Use of money and property Amounts Available for Appropriations Charges to Appropriation (Outflow): Public safety Total Charges to Appropriations Budget Amounts Actual Original Final Amounts $ 50,551 $ 50,551 $ 50,551 150 150 219 50,701 50,701 50,770 4,500 4,500 4,500 4,500 Variance with Final Budget Positive (Negative) 69 69 4,500 4,500 Budgetary Fund Balance, June 30 $ 46,201 $ 46,201 $ 50,770 $ 4,569 61 CITY OF ROLLING HILLS BUDGETARY COMPARISON SCHEDULE UNDERGROUND UTILITY FUND YEAR ENDED JUNE 30, 2016 Budgetary Fund Balance, July 1 Resources (Inflows): Transfers in Amounts Available for Appropriations Charges to Appropriation (Outflow): Public works Total Charges to Appropriations Budget Amounts Actual Original Final Amounts $ 1,020,306 $ 1,020,306 $ 1,020,306 250,000 250,000 250,000 1,270,306 1,270,306 1,270,306 150,000 150,000 33,799 150,000 150,000 33,799 Variance with Final Budget Positive (Negative) 116,201 116,201 Budgetary Fund Balance, June 30 $1,120,306 $ 1,120,306 $ 1,236,507 $ 116,201 62 CITY OF ROLLING HILLS STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND YEAR ENDED JUNE 30, 2016 Balance Balance 7/1/2015 Additions Deductions 6/30/2016 Deposits Fund Assets: Cash and investments $ 1,771 $ $ $ 1,771 Restricted assets: Cash and investments 305,000 - 305,000 Total Assets $ 306,771 $ $ $ 306,771 Liabilities: Deposits payable $ 306,771 $ - $ - $ 306,771 Total Liabilities $ 306,771 $ $ $ 306,771 63 c) THIS PAGE INTENTIONALLY LEFT BLANK 64 CPAs AND ADVISORS [2.0 0000 00 December 20, 2016 To the Honorable Mayor and Members of the City Council City of Rolling Hills, California We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Rolling Hills (the City) for the year ended June 30, 2016. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated May 23, 2016. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. As described in Note 1 to the financial statements, the Agency changed accounting policies related to the measurement and disclosure of assets and liabilities reported a fair market value by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 72, Fair Value Measurement and Application, in fiscal year 2015-2016. Accordingly, the effect of the accounting change is reflected in the notes to the financial statements. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. Management's estimate of its net pension liability and Other Post Employment Benefit (OPEB) Liability is based on actuarial valuation specialist assumptions. We evaluated the key factors and assumptions used to develop the proportionate share of the net pension liability and OPEB liability in determining that it is reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The financial statement disclosures are neutral, consistent, and clear. PrimeGlobal Ls um =aA.i AND :.G4':c'iiS To the Honorable Mayor and Members of the City Council City of Rolling Hills, California Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. No misstatements were found. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 20, 2016. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management's discussion and analysis, budgetary comparison schedule for the General Fund, and schedule of proportionate share of the net pension liability and the schedule of plan contributions, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. LSL°°:: _?A h ✓ AD,... To the Honorable Mayor and Members of the City Council City of Rolling Hills, California We were engaged to report on the combining statements and individual fund statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. New Auditing Standard No. 130 This new auditing standard is effective for financial periods ending on or after December 15, 2016; for most California municipalities it is effective for the period July 1, 2016 through June 30, 2017 and future periods thereafter. The standard allows CPA firms to issue an opinion on the financial statements conformity with generally accepted accounting principles, as well as an opinion on the operating effectiveness of internal controls over financial reporting through an integrated audit. This standard does not change the objectives of a financial statement audit, it only enhances the value and scope of a financial statement audit and increases the level of assurance provided by CPA firms on financial controls. Municipalities should look to perform an integrated audit for more assurance on the operating effectiveness of internal controls over financial reporting. The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2015-2016 audit: GASB Statement No. 72, Fair Value Measurement and Application. GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. GASB Statement No. 79, Certain External Investment Pools and Pool Participants. The following Governmental Accounting Standards Board (GASB) pronouncements are effective in the following fiscal year audit and should be reviewed for proper implementation by management: Fiscal year 2016-2017 GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statement Nos. 67 and 68. GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. GASB Statement No. 77, Tax Abatement Disclosures. GASB Statement No. 78, Pensions Provided through Certain Multiple -Employer Defined Benefit Pension Plans. GASB Statement No. 80, Blending Requirements for Certain Component Units -an Amendment of GASB Statement No. 14. LSL00:0000 _ AI A%C. A... _O.a To the Honorable Mayor and Members of the City Council City of Rolling Hills, California GASB Statement No. 82, Pension Issues an Amendment of GASB Statement Nos. 67, 68, and 73. Fiscal year 2017-2018 GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. GASB Statement No. 81, In -evocable Split Interest Agreements. Restriction on Use This information is intended solely for the use of the governing board and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, 5e-04 ..?'�•° Brea, California L 1.0 00©0 00 CPAs AND ADVISORS INDEPENDENT AUDITORS' 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 To the Honorable Mayor and Members of the City Council City of Rolling Hills, California We have audited, in accordance with the 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, the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of City of Rolling Hills, California, (the City) as of and for the year ended June 30, 2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated December 20, 2016. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. 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 a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is 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. Our consideration of internal control 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 material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from 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. 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. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PrimeGlobal LSL°°:: AND ADt,c, AS To the Honorable Mayor and Members of the City Council City of Rolling Hills, California Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. aeeet, „lee5e-4/44,e, „rte.° Brea, California December 20, 2016 L000 000 L00 CPAs AND ADVISORS INDEPENDENT ACCOUNTANTS' REPORT ON AGREED -UPON PROCEDURES APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS To the Honorable Mayor and Members of the City Council City of Rolling Hills, California We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet No. 6 (or other alternative computation) of the City of Rolling Hills, California, for the year ended June 30, 2016. These procedures, which were agreed to by the City of Rolling Hills and the League of California Cities (as presented in the publication entitled Agreed -Upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution), were performed solely to assist the City of Rolling Hills in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution. The City's management is responsible for the Appropriations Limit Worksheet No. 6 (or other alternative computation). This agreed -upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and our findings were as follows: 1. We obtained the completed Worksheets No. 1 through No. 7 (or other alternative computations) and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote of the City Council. Finding: No exceptions were noted as a result of our procedures. 2. For the accompanying Appropriations Limit Worksheet No. 6, we multiplied line A, last year's limit, by line D, ratio of change, and agreed the resulting amount to line E, this year's limit. Finding: No exceptions were noted as a result of our procedures. 3. We compared the current year information presented in the accompanying Appropriations Limit Worksheet No. 6 to the other worksheets described in No. 1 above. Finding: No exceptions were noted as a result of our procedures. 4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year. Finding: No exceptions were noted as a result of our procedures. PrimeGlobal Ai LSL°°:: C^:;; PtiO Cn:.�G:tom To the Honorable Mayor and Members of the City Council City of Rolling Hills, California We were not engaged to and did not perform an audit, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines. This report is intended solely for the use of the City of Rolling Hills, California and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. However, this report is a matter of public record and its distribution is not limited. aege„thei ;e -0,74/444e, cee° Brea, California December 20, 2016 CITY OF ROLLING HILLS 2015 - 2016 APPROPRIATIONS LIMIT CALCULATION A. 2014 - 2015 APPROPRIATIONS LIMIT: $1,369,450 B. 2015-2016 GROWTH IN NON-RESIDENTIAL ASSESSED VALUATION 3.82 % C. 2015-2016 CHANGE IN POPULATION: D. RATIO OF CHANGE (1.0382X 1.0082): E. 2015-2016 APPROPRIATIONS LIMIT: ($1,369,450 X 1.0467132) X 1.0467132 $1.433.421 0.82 % THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ROLLING HILLS GENERAL FUND REVENUES & EXPENDITURES FINAL BUDGET VS. ACTUAL YEAR ENDED JUNE 30, 2016 Audited Variance with Final Budget Actual Final Budget % of Budget Revenues 401.0 Property Taxes 405.0 Sales Tax 410.0 Real Estate Transfer Tax 420.0 Motor Vehicles In Lieu Tax -VLF 440.0 Building & Other Permit Fees 450.0 Variance, Planning & Zoning 455.0 Animal Control Fees 460.0 Franchise Fees 480.0 Fines & Traffic Violations 600.0 City Hall Leasehold RHCA 602.0 Reimbursement PW M & 0 RHCA 650.0 PSAF & COPS 655.0 Burgler Alarm Responses 670.0 Interest Earned 675.0 Miscellaneous Revenue 699.0 Operating Transfer In Dept: 00 999.0 Operating Transfer Out Dept: 01 City Administration 702.0 Salaries -Full Time 710.0 Retirement CalPERS-Employer 715.0 Workers Compensation Insurance 716.0 Group Insurance 717.0 Retiree Medical 718.0 Employer Payroll Taxes 719.0 Deferred Compensation 720.0 Auto Allowance 740.0 Office Supplies & Expense 745.0 Equipment Leasing Costs 750.0 Dues & Subscriptions 755.0 Conference Expense 757.0 Meetings Expense 759.0 Training & Education 761.0 Auto Mileage 765.0 Postage 770.0 Telephone 775.0 City Council Expense 780.0 Minutes Clerk Meetings 785.0 Codification 790.0 Advertising 795.0 Other Gen Admin Expense 801.0 City Attorney 802.0 Legal Expenses -Other 820.0 Website 850.0 Election Expense City Council 890.0 Consulting Fees 950.0 Capital Outlay -Equipment 955.0 Disaster Emergency Equipment City,Administration $ 853,300 $ 964,913.69 $ 111,613.69 113.08% 3,900 14, 081.66 10,181.66 361.07% 42,400 65,374.38 22,974.38 154.18% 180,000 186,866.17 6,866.17 103.81 % 512,000 550,696.75 38,696.75 107.56% 40,000 56,771.80 16,771.80 141.93% 1,300 1,337.50 37.50 102.88% 19,000 19,994.50 994.50 105.23% 12,300 18,246.80 5,946.80 148.35% 60,950 60,948.00 (2.00) 100.00% 9,000 8,814.86 (185.14) 97.94% 800 880.57 80.57 110.07% 600 1,600.00 1,000.00 266.67% 14,000 26,189.10 12,189.10 187.07% 40,000 43,042.73 3,042.73 107.61% 34,957 34,956.49 (0.51) 100.00% 1,824,507 2,054,715.00 230,208.00 112.62% 367,900 286,007.23 81,892.77 77.74% 311,500 307,385.06 4,114.94 98.68% 32,200 32,149.97 50.03 99.84% 6,400 7,249.80 (849.80) 113.28% 48,000 51,229.52 (3,229.52) 106.73% 18,000 17,598.36 401.64 97.77% 24,900 20,636.64 4,263.36 82.88% 2,700 5,252.00 (2,552.00) 194.52% 2,400 2,500.00 (100.00) 104.17% 18,000 16,466.76 1,533.24 91.48% 2,500 3,308.84 (808.84) 132.35% 11,000 11,300.56 (300.56) 102.73% 8,200 6,778.28 1,421.72 82.66% 2,000 95.01 1,904.99 4.75% 1,500 - 1,500.00 0.00% 650 228.10 421.90 35.09% 15,000 13,642.68 1,357.32 90.95% 5,200 6,023.24 (823.24) 115.83% 10,500 5,956.23 4,543.77 56.73% 3,500 5,097.78 (1,597.78) 145.65% 6,050 1,661.28 4,388.72 27.46% 600 489.95 110.05 81.66% 3,500 4,234.78 (734.78) 120.99% 65,000 44,338.85 20,661.15 68.21% 3,000 - 3,000.00 0.00% 6,000 5,702.50 297.50 95.04% - (105.00) 105.00 0.00% 7,800 8,792.00 (992.00) 112.72% 2,500 6,722.61 (4,222.61) 268.90% 8,000 8,000.00 0.00% 626,600 584,735.80 41,864.20 93.32% Audited Variance with Final Budget Actual Final Budget % of Budget Dept: 05 Finance 715.0 Workers Compensation Insurance 212.27 (212.27) 0.00% 750.0 Dues & Subscriptions 160 160.00 - 100.00% 776.0 Miscellaneous Expenses - 290.00 (290.00) 0.00% 810.0 Annual Audit 17,000 16,420.00 580.00 96.59% 890.0 Consulting Fees 99,120 88,749.42 10,370.58 89.54% 950.0 Capital Outlay -Equipment 3,000 436.56 2,563.44 14.55% Finance 119,280 106,055.98 13,224.02 88.91% Dept: 15 Planning & Development 702.0 Salaries -Full Time 147,700 150,650.23 (2,950.23) 102.00% 703.0 Salaries -Part Time 29,500 28,616.48 883.52 97.01% 710.0 Retirement CaIPERS-Employer 17,500 14,264.79 3,235.21 81.51% 715.0 Workers Compensation Insurance 3,400 2,334.99 1,065.01 68.68% 716.0 Group Insurance 21,200 15,981.43 5,218.57 75.38% 718.0 Employer Payroll Taxes 14,200 14,192.33 7.67 99.95% 719.0 Deferred Compensation 6,600 6,328.78 271.22 95.89% 720.0 Auto Allowance 3,300 2,500.00 800.00 75.76% 758.0 Planning Commission Meeting 3,500 2,284.39 1,215.61 65.27% 776.0 Miscellaneous Expenses 4,700 23.12 4,676.88 0.49% 802.0 Legal Expenses -Other 3,000 5,562.60 (2,562.60) 185.42% 872.0 Property Development -Legal Exp 45,000 34,016.50 10,983.50 75.59% 878.0 Build Inspect. LA County/Willd 215,000 190,792.77 24,207.23 88.74% 881.0 Storm Water Management 128,000 69,976.17 58,023.83 54.67% 882.0 Variance & CUP Expense 5,200 6,004.76 (804.76) 115.48% 884.0 Special Project Study & Consul 25,500 3,050.00 22,450.00 11.96% Planning & Development 673,300 546,579.34 126,720.66 81.18% Dept: 25 Public Safety 830.0 Law Enforcement 204,200 194,978.49 9,221.51 95.48% 833.0 Other Law Enforcement Expenses 2,700 2,960.25 (260.25) 109.64% 837.0 Wild Life Mgmt & Pest Control 17,000 12,939.05 4,060.95 76.11% 838.0 Animal Control Expense 6,500 4,012.86 2,487.14 61.74% Public Safety 230,400 214,890.65 15,509.35 93.27% Dept: 65 Non -Department 895.0 Insurance & Bond Expense 20,000 19,226.34 773.66 96.13% 901.0 South Bay Comm. Organization 4,100 2,600.00 1,500.00 63.41% 915.0 Community Recognition 9,500 7,133.55 2,366.45 75.09% 916.0 Civil Defense Expense 1,500 1,500.00 100.00% 917.0 Emergency Preparedness 4,500 2,934.95 1,565.05 65.22% 985.0 Contingency 25,000 4,427.45 20,572.55 17.71% Non -Department 64,600 37,822.29 26,777.71 58.55% Dept: 75 City Properties 925.0 Utilities 22,000 23,555.12 (1,555.12) 107.07% 930.0 Repairs & Maintenance 14,000 12,610.59 1,389.41 90.08% 932.0 Area Landscaping 16,600 13,928.00 2,672.00 83.90% 946.0 Buildings & Equipment - 225.00 (225.00) City Properties 52,600 50,318.71 2,281.29 95.66% Expenditures 2,134,680 1,826,410.00 308,270.00 85.56% Revenues Over (Under) Expenditures $ (310,173) $ 228,305.00 $ 538,478.00 CITY OF ROLLING HILLS BALANCE SHEET June 30, 2016 Audited MUNICIPAL GENERAL & DEPOSIT COPS & COMMUN. SELF- REFUSE TRAFFIC TRANSIT UTILITY CAPITAL FUNI FUND CLEEP FACILITIES INSUR COLLECT. SAFETY PROP A, C, m FUND & TDA ASSETS Cash & Cash Equivalents $ 4,527,811 $ 1,771 $ 101,554 $ 18,282 $ 260,374 $ 605,200 $ 149 $ 139,619 $ 1,236,507 Cash & Cash Equivalents - Capital Project Fund - - - Poppy Trail Grading Bond - 305,000 - - Accounts Receivable 155,934 29,304 Prepaid Expense & Deposits 37,436 - TOTAL ASSETS $ 4,721,181 S 306,771 $ 101,554 $ 18,282 $ 260,374 $ 634,504 $ 149 $ 139,619 $ 1,236,507 LIABILITIES Accounts & Contract Payable $ 87,372 $ - $ 7,158 $ $ - $ 377,990 $ 149 $ $ Deposits 18,803 306,771 - Deferred Revenues 14,012 - TOTAL LIABILITIES 120,187 306,771 7,158 377,990 149 BEGINNING YTD OF YEAR TOTAL TOTAL $ 6,891,267 $ 6,061,616 10,956 305,000 305,000 185,238 381,398 37,436 27,797 $ 7,418,941 $ 6,786,767 $ 472,669 $ 128,965 325,574 331,574 14,012 6,340 FUND BALANCE Unassigned Fund Balance 4,600,994 94,396 18,282 260,374 256,514 139,619 1,236,507 6,606,686 6,319,888 TOTAL UNASSIGNED FUND BALANCE 4,600,994 - 94,396 18,282 260,374 256,514 139,619 1,236,507 6,606,686 6,319,888 'OTAL UNASSIGNED FUND BALANCE & LIABILITIE $ 4,721,181 $ 306,771 $ 101,554 $ 18,282 $ 260,374 $ 634,504 $ 149 $ 139,619 $ 1,236,507 $ 7,418,941 $ 6,786,767 812,255 466,879 COMPOSITION OF CASH Petty Cash $ 1,500 OPUS Bank - Checking Account 1,042,810 OPUS Bank - Money Market 89,247 Calif. State Local Agency Investment Fund 5,262,710 Malaga Bank - Preferred Bank - CD's 495,000 $ 6,891,267 Prep ay: f finance Director By: Cruz, City Manager CITY OF ROLLING RILLS SUMMARY STATEMENT OF REVENUES AND EXPENDITURES Actual Compared to Annual Budget FINAL AUDITED July 1, 2015 to June 30, 2016 Fund GENERAL Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CITIZENS' OPTION FOR PUBLIC SAF1S1 Y (COPS) Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CAPITAL IMPROVEMENT FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue COMMUNITY FACILI'l'IF S Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue MUNICIPAL SELF-INSURANCE Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue REFUSE COLLECTION Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRAFFIC SAFETY Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRANSIT - PROPOSITION A, C & M & TDA Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue UTILITY FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TOTAL ALL FUNDS Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue This Year $ 2,019,759 1,540,403 Last Year $ 1,844,726 1,429,794 This Year Better (Worse) $ 175,033 (110,609) Annual Budget & Adj. 1,789,550 1,766,780 Remaining Budget $ (230,209) 226,377 479,356 414,932 64,424 22,770 (456,586) (251,051) 19,200 (270,251) (332,943) (81,892) $ 228,305 $ 434,132 $ (205,827) (310,173) $ (538,478) $ 115,075 $ 106,230 $ 8,845 100,200 $ (14,875) 110,394 70,662 (39,732) 104,500 (5,894) 4,681 35,568 (30,887) (4,300) (8,981) - - - - 0 $ 4,681 $ 35,568 $ (30,887) (4,300) $ (8,981) $ - $ - $ - - $ - (10,956) - (10,956) - 10,956 $ (10,956) $ - $ (10,956) - $ 10,956 $ 100 $ - $ 100 100 $ - 5,354 2,500 (2,854) 57,700 52,346 (5,254) (2,500) (2,754) (57,600) (52,346) - - - 62,400 62,400 $ (5,254) $ (2,500) $ (2,754) 4,800 $ 10,054 $ - $ - $ - - $ - 222,568 5,197 (217,371) 228,332 5,764 (222,568) (5,197) (217,371) (228,332) (5,764) $ (222,568) $ (5,197) $ (217,371) (228,332) $ (5,764) $ 772,015 $ 815,032 $ (43,017) 771,800 $ (215) 755,980 767,379 11,399 755,980 0 16,035 47,653 (31,618) 15,820 (215) (24,000) (19,200) (4,800) (24,000) 0 $ (7,965) $ 28,453 $ (36,418) (8,180) $ (215) $ - $ - $ - 50 $ 50 36,007 18,978 (17,029) 55,550 19,543 (36,007) (18,978) (17,029) (55,500) (19,493) 36,007 - 36,007 55,500 19,493 $ - $ (18,978) $ 18,978 - $ - $ 84,354 $ 137,999 $ (53,645) 84,141 $ (213) 195,000 195,000 - - 84,354 (57,001) 141,355 84,141 (213) $ 84,354 $ (57,001) $ 141,355 84,141 $ (213) $ - $ - $ - - $ - 33,799 - (33,799) 150,000 116,201 (33,799) - (33,799) (150,000) (1I6,201) 250,000 - 250,000 250,000 - $ 216,201 $ - $ 216,201 100,000 $ (116,201) $ 2,991,303 $ 2,903,987 $ 87,316 2,745,841 $ (245,462) 2,704,505 2,489,510 (214,995) 3,118,842 414,337 286,798 414,477 (127,679) (373,001) (659,799) - - - 10,957 10,957.00 $ 286,798 $ 414,477 $ (127,679) $ (383,958) $ (670,756) te€4 icalle:09 ger4 INCORPORATED JANUARY 24, 1957 NO.2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No: 10-A Mtg. Date: 01/23/17 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: TERRY SHEA, FINANCE DIRECTOR THRU: RAYMOND R CRUZ, CITY MANAGER 042 SUBJECT: QUARTERLY SCHEDULE OF INVESTMENTS REPORT FOR THE QUARTER ENDING DECEMBER 31, 2016. DATE: JANUARY 23, 2017 ATTACHMENTS: SCHEDULE OF INVESTMENTS DASH BOARD REPORT CARD INVESTMENT ALLOCATIONS SUMMARY REPORT BY QUARTER Attached you will find the City's quarterly investment report for review. Pursuant to the City Council's direction, it is agendized under "Matters from Staff" in order that it receives an appropriate level of review by the City Council. Below are Cash and Yield comparative data from the second quarter as of December 31, 2016 to the first quarter as of September 30, 2016 FY 2016/17 and YTD Interest Income comparative data from the second quarter as of December 31, 2016 to second quarter as of December 31, 2015. The portfolio has been diversified by investment instrument and maturity between Money Market, Local Agency Investment Fund (LAIF), and FDIC insured Certificates of Deposits. Also below are the CalPERS California Employers' Retiree Benefit Trust (CERBT) Strategy 1 Other Post Employment Benefit (OPEB) Irrevocable Trust results for the second quarter as of December 31, 2016 and Fiscal Year to Date FY 2016/2017. Cash & Yield Comparative Data 2nd Quarter FY 2016/2017 to 1st Quarter FY 2016/2017: Active Deposits Inactive Deposits Total Cash Portfolio Yield at Cost 2nd Quarter FY 2016/17 $ 6,433,520 149,767 $ 6,583,287 0.706% 1st Quarter FY 2016/17 $ 6,264,290 15,682 $ 6,279,972 0.637% Variance $ 169,230 134,085 $ 303,315 0.069% YTD Interest Income Comparative Data 2nd Quarter FY 2016/2017 to 2nd Quarter FY 2015/2016: Annual Interest - Budget Total YTD Interest Earned Over (Under) Budget % of Annual Budget 2nd Quarter FY 2016/17 $ 15,475 9,221 $ (6,254) 59.59% 2nd Quarter FY 2015/16 $ 14,000 6,371 $ (7,629) 45.51% Ca1PERS CERBT Strategy 1 OPEB Irrevocable Trust results for the second quarter as of December 31, 2016 and Fiscal Year to Date FY 2016/2017. Beginning Balance Contribution Investment Earnings Administrative Expense Ending Balance 2nd Quarter FY 2016/17 $ 527,545 (9,849) (111) Fiscal YTD FY 2016/17 $ 513,094 4,713 (222) $ 517,585 $ 517,585 We are pleased to answer any questions you may have. TS:RC:hl Investment Report cover memo.doc CITY OF ROLLING HILLS SCHEDULE OF INVESTMENTS as of December 31, 2016 BOOK VALUE FAIR VALUE PAR PRICE (MARKET PURCHASE MATURITY INVESTMENT INSTITUTION VALUE A COST VALUE) YIELD DATE DATE ACTIVE DEPOSITS Money Market OPUS $ 384,021 $ 384,021 $ 384,021 0.150% Interest Checking OPUS $ 1,006,406 $ 1,006,406 $ 1,006,406 0.650% 01/12/16 01/12/17 %of Total 21.61% 21.61% LAIF STATE TREASURY $ 4,548,093 $ 4,548,093 $ 4,548,093 0.719% % of Total 70.69% 70.69% Malaga Bank - CD Malaga Bank $ 245,000 $ 245,000 $ 245,000 0.600% 09/14/16 09/13/17 Preferred Bank - CD Preferred Bank $ 250,000 $ 250,000 $ 250,000 1.250% 06/27/16 01/12/18 %of Total 7.69% 7.69% ACTIVE DEPOSITS TOTALS 6,433,520.00 6,433,520.00 6,433,520.00 0.706% INACTIVE DEPOSITS CHECKING OPUS $ 148,267 $ 148,267 $ 148,267 % of Total 99.00% 99.00% PETTY CASH N/A $ 1,500 $ 1,500 $ 1,500 %of Total 1.00% 1.00% INACTIVE DEPOSITS TOTALS $149,767.00 $149,767.00 $149,767.00 GRAND TOTAL CASH $6,583,287.00 NOTES: (1) Investment portfolio is in compliance with investment policy established by City Council. (2) The City has the ability to meet all expenditure requirements for the next six months. (3) LAIF fair market value is only provided in June of each year. Prepared By: � rt Shea, Finance Director Date Approved By: Date —17 H7-4 ymond ' Cruz, City Manager CITY OF ROLLING HILLS DASH BOARD REPORT CARD as of December 31, 2016 JUNE JUNE JULY AUGUST SEPT OCTOBER NOVEMBER DECEMBER FY 2014-15 FY 2015-16 FY 2016-17 FY 2016-17 FY 2016-17 FY 2016-17 FY 2016-17 FY 2016-17 L CASH FLOW ACTIVE DEPOSITS Book Value Price @ Cost OPUS Bank -Money Market $ 494,883 $ 89,247 $ 79,016 $ 51,954 $ 220,627 $ 163,939 $ 160,422 $ 384,021 OPUS Bank - Interest Checking 1,003,049 1,003,567 1,004,157 1,004,694 1,005,248 1,005,786 1,006,406 LAW 2,545,123 5,259,443 4,790,701 4,793,969 4,543,969 4,548,093 4,548,093 4,548,093 Malaga Bank CDARS - CD'S 2,455,000 - - - - - - - Malaga Bank/Preferred Bank - CD'S 245,000 495,000 495,000 495,000 495,000 495 000 495,000 495 000 ACTIVE DEPOSITS TOTALS $ 5,740,006 $ 6,846,739 $ 6,368,284 $ 6,345,080 $ 6,264,290 $ 6,212,280 $ 6,209,301 5 6,433,520 INACTIVE DEPOSITS Opus Bank - Checking $ 330,109 $ 18,311 $ 106,944 $ 30,288 $ 14,182 $ 68,209 $ 46,549 $ 148,267 Petty Cash 1,500 1,500 - 1,500 1,500 1,500 1 500 1,500 1,500 INACTIVE DEPOSITS TOTALS $ 331,609 $ 19,811 $ 108,444 $ 31,788 $ 15,682 $ 69,709 $ 48,049 $ 149,767 GRAND TOTAL CASH $ 6,071,615 $ 6,866,550 $ 6,476,728 $ 6,376,868 $ 6,279,972 $ 6,281,989 $ 6,257,350 $ 6,583,287 Active Deposits 's From Previous Month $ (651,003) $ (100,466) $ 478,455 $ 23,204 $ 80,790 $ 52,010 $ 2,979 $ (224,219) IL LIQUIDITY CALCULATION Liquidity - $ 4,653,502 $ 4,794,590 $ 4,732,307 $ 4,732,307 $ 4,732,307 $ 4,732,307 $ 4,732,307 $ 4,732,307 Average Cash Balance $ 5,508,178 $ 6,099,387 $ 6,139,716 $ 6,172,894 $ 6,201,875 $ 6,237,491 S 6,275,342 $ 6,319,888 Emergency Reserve Per Policy Six Month Cash Reserve $ 696,300 $ 809,248 $ 809,248 $ 809,248 $ 809,248 $ 809,248 $ 809,248 $ 807,904 $ 1,386,376 $ 948,193 $ 1,137,239 $ 1,178,995 $ 1,190,780 $ 1,175,432 $ 1,166,759 $ 1,189,736 Available Reserve for Longer Term Investment $ 4,353,630 $ 5,898,546 $ 5,231,045 5 5,166,085 $ 5,073,510 $ 5,036,848 $ 5,042,542 $ 5,243,784 HI. PORTFOLIO DIVERSIFICATION DIVERSIFICATION BY INSTRUMENT Money Market 8.62% 1.30% 1.24% 0.82% 3.52% 2.64% 2.58% 5.97% Interest Checking 0.00% 14.65% 15.76% 15.83% 16.04% 16.18% 16.20% 15.64% LAT 44.34% 76.82% 75.23% 75.55% 72.54% 73.21% 73.25% 70.69% Treasury Bills 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Certificates of Deposit 47.04% 7.23% 7.77% 7.80% 7.90% 7.97% 7.97% 7.69% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% DIVERSIFICATION BY MAURTTY Less Than 90 Days 90 Days - 13 Weeks Six Months - 26 Weeks One Year - 52 Weeks 52.96% 78.12% 76.47% 80.23% 76.06% 75.85% 75.83% 76.66% 0.00% 0.00% 3.85% 0.00% 0.00% 0.00% 0.00% 0.00% 47.04% 18.23% 15.76% 15.83% 19.95% 20.13% 20.14% 19.45% 0.00% 3.65% 3.93% 3.94% 3.99% 4.02% 4.03% 3.89% 100.00% 100.00% 100.01% 100.00% 100.00% 100.00% 100.00% 100.00% IV, PORTFOLIO PERFORMANCE MEASURES Yield at Cost Month BENCHMARKS 6 Month CD 1 Year CD 90 Day T -Bill 2 Year Treasury 10 Year Treasury Annual Interest Budget 0.314% 0.601% 0.611% 0.635% 0.637% 0.620% 0.680% 0.706% 0.27 0.29 0.29 0.3 0.32 0.38 0.41 0.50 1.02 1.13 1.14 1.15 1.18 1.20 1.22 1.25 0.02 0.3 0.3 0.3 0.3 0.35 0.35 0.36 0.69 0.67 0.67 0.68 0.68 0.70 0.70 0.71 2.36 1.50 1.50 1.49 1.50 1.49 1.52 1.55 $ 13,550 $ 14,000 $ 15,475 $ 15,475 $ 15,475 $ 15,475 $ 15,475 $ 15,475 Money Market $ 615 $ 6,057 $ 9 $ 19 $ 30 $ 52 74 105 Interest Checking (2) 542 1,150 1,692 2,258 2,802 3,441 MalagaBankPreferredBanks -CD'S 8,011 4,760 - 260 752 1,022 741 1,010 LAT 4,956 6,563 4,664 4,664 4,664 LAIF Mark to Market (Net) - - - - - Total YTD Interest Earned $ 13,582 $ 17,380 $ 551 $ 1,429 $ 2,475 $ 7,997 $ 8,282 5 9,221 Over/(Under) Annual Budget $ 32 $ 3,380 $ (14,924) $ (14,046) $ (13,000) $ (7,478) $ (7,193) $ (6,254) % of Annual Budget 100.24% 124.14% 3.56% 9.23% 15.99% 51.67% 53.52% 59.58% CITY OF ROLLING HILLS LIQUIDITY CALCULATION BASED ON FISCAL YEAR 2016-2017 ACTUAL/CASH BUDGET FORECAST as of December 31, 2016 MONTHLY CASH BALANCES Month OPUS T -Bill July $ 1,189,527 $ August 1,086,399 Sept 1,239,503 Oct 1,237,396 Nov 1,212,757 Dec 1,538,694 Jan 1,990,766 Feb 2,129,796 March 2,123,755 April (c) 500,230 May 1,465,719 June 1,110,607 (1) $ 16,825,149 (2) $ (2) $ 51,413,510 LAIF 4,793,968 4,793,968 4,543,969 4,548,093 4,548,093 4,548,093 2,551,332 2,551,332 4,006,332 4,009,443 5,259,443 5,259,443 Average $ 1,402,096 $ $ 4,284,459 Notes: Lowest Balance Highest Expense (a) $ 4,754,673 (b) $ 522,596 (d) Liquidity Calculation (2) MALAGA - CD's CDARS - CD's $ 495,000 495,000 495,000 495,000 495,000 495,000 1,700,000 1,700,000 245,000 245,000 (a) 245,000 495,000 $ 7,600,000 Total Cash By Month $ 6,478,495 6,375,367 6,278,472 6,280,489 6,255,850 6,581,787 6,242,098 6,381,128 6,375,087 4,754,673 6,970,162 6,865,050 $ 75,838,659 (e) $ 633,333 (e) $ (e) Average Monthly Cash Balance Less 40% Emergency Reserve Available Investment Liquidity (1) Actual/Forecast Cash Budget FY 2016/17 (2) Monthly Bank Reconciliations (3) Per Investment Policy FY 15/16 General Fund Audited Revenue $2,019,759 X 40% = $807,904 (4) Six Month Cash Reserve based on FY 16/17 Actual/Forecasted Annual Expenditures divided by two. 6,319,888 Average Cash Balance $ 6,319,888. Expenditures By Month (b) $ 522,596 181,728 140,945 107,046 125,127 506,268 109,684 125,541 148,669 132,131 127,383 152,355 (1) $ 2,379,473 $ 198,289 Six Month Lowest Deposits Liquidity Cash Reserve (c) $ 500,230 (d) $ 4,732,307 (4) $ 1,189,736 (d) $ 4,732,307 (e) $ 6,319,888 - (3) (807,904) $ 4,732,307 $ 5,511,984 INVESTMENT ALLOCATIONS SUMMARY as of December 31, 2016 Investment Type Book Value Less Than 90-180 181-360 One Two Three Price @ Cost 90 Days Days Days Year Years Years Money Market 5.97% $ 384,021 $ 384,021 $ $ $ $ $ LAIF 70.69% 4,548,093 4,548,093 - Interest Checking 15.64% 1,006,406 1,006,406 CD'S 7.69% 495,000 245,000 250,000 Total Active Deposits 100.00% $ 6,433,520 $ 4,932,114 $ $ 1,251,406 $ 250,000 $ $ Cash Six Month Active Cash Reserve Cash Liquidity Deposits Reserve Per Policy Reserve Liquidity FY 15/16 Cash Budget $ 4,732,307 $ 6,433,520 $ 1,701,213 $ 807,904 $ 1,189,736 Maturity Investment Allocation Less Than 90 Days 76.66% 90 Days - 13 Weeks 0.00% Six Months - 26 Weeks 19.45% One Year - 52 Weeks 3.89% Two Years - 104 Weeks 0% Three Years - 156 Weeks 0% 100.00% INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No.: 10-B Mtg. Date: 01/23/17 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: RAYMOND R. CRUZ, CITY MANAGER SUBJECT: STATUS REPORT REGARDING COMPLIANCE WITH THE CITY COUNCIL RESOLUTION CONCERNING AZUL, THE DOG OWNED BY DR. OSTRIKER AT 27 CABALLEROS ROAD WITH REGARD TO THE CONFINEMENT RESTRICTIONS IMPOSED ON AZUL. DATE: January 23, 2017 ATTACHMENTS: Resolution 1195 RECOMMENDATION It is recommended that the City Council hear the status report of the City Manager and testimony from members of the public and provide further direction to staff if there is a desire to affirm or modify Resolution 1195 which modified an order of the City Manager concerning the Ostriker aggressive animal case. BACKGROUND The incidents giving rise to this appeal from Dr. Jeffrey Ostriker (27 Caballeros Rd.) are the second set of incidents in the last 12 months involving killing of chickens by his dog Azul. The first incident occurred in December 2015 when Azul killed a chicken belonging to Matthew Chaisson, occupant of the property at 8 Crest Road East. In response to that incident, the City Manager ordered that Azul be confined to the Ostriker residence and when walked be restrained by a leash by a person capable of controlling the dog. Dr. Ostriker appealed that order to the City Council, in which he urged the Council to allow him to walk Azul without a leash due to his physical disabilities. The outcome of that appeal was memorialized in City Council Resolution No. 1183. 0 The City received a complaint report on August 4, 2016 from Mr. Norm LaCaze (24 Portuguese Bend Road) alleging that Dr. Ostriker's dog Azul (described as "a large, broad chested, whitish type dog) and two other dogs entered his property on two different occasions and attacked his chickens, each incident resulted in the death of numerous chickens. Mr. LaCaze elected not to file a complaint after the first incident. However, the second of these incidents on August 3, 2016, resulting in the killing of 40 juvenile chickens, prompted him to file the complaint. On August 19, 2016, Mrs. Geraldean Belleville (12 Crest Road East) filed a complaint alleging that Azul ("a long body, medium length legs, blonde colored cocker spaniel type hair dog") entered her property on August 5, 2016 where the dog broke down the chicken coop and killed all the chickens within it. Ms. Belleville stated in the report that she witnessed the attack. Pursuant to RHMC Section 6.24.090, following an investigation conducted by the Los Angeles County Department of Animal Care and Control, the City Manager conducted an administrative hearing on Thursday, September 22, 2016 at 1:30 p.m. in the Rolling Hills City Council Chamber to determine if the alleged attacks had occurred and if the conditions imposed by the City Council in Resolution No. 1183 had been violated. At the hearing, each involved party made its initial presentation and brief rebuttals before the hearing was concluded. After reviewing the incident investigation reports from the LA County Department of Animal Care and Control officers, written documents provided by the parties involved, and the oral testimony provided at the administrative hearing, the City Manager determined that the LaCaze and Belleville complaints were meritorious and that Dr. Ostriker violated the conditions of Resolution No. 1183 by allowing Azul to roam freely and out of his immediate control. In view of RHMC Section 6.24.090(A), the City Manager ordered that Azul be removed from the City immediately. Pursuant to Section 6.24.070, Dr. Ostriker appealed the City Manager's order. A hearing on the appeal was scheduled for and conducted on November 14, 2016. The City Council received a written staff report containing numerous attachments, including correspondence from Dr. Ostriker and a report from the Los Angeles County Department of Animal Care and Control. Testifying at the hearing were Dr. Jeffrey Ostriker (the dog owner), Matthew Chaisson (previous victim of an Azul attack), Carol LaCaze (current complainant), Norm LaCaze (current complainant), Geraldean Belleville (current complainant), Dianne Wyatt (Azul's groomer), Sue Doyle (Azul's trainer), Cathleen Cunningham (Dr. Ostriker's therapist), Melvyn Honig and James Aichele. The City Council reviewed and considered all of the written and oral evidence submitted in the matter prior to making its decision. Consequently, and based on the foregoing, the City Council modified the decision of the City Manager by requiring that Dr. Ostriker permanently remove Azul from the City as follows: A. Azul is ordered confined to the Ostriker property and shall be kept indoors at all times, except as provided in paragraph B below. B. Azul may be allowed outdoors, provided that he is confined to a fully enclosed, secure dog run with a concrete pad. C. Azul shall not be walked outdoors off the Ostriker property anywhere within the territorial boundaries of the City of Rolling Hills. DISCUSSION The City Council reserved jurisdiction over this appeal for 90 days, during which time the City Manager was directed to monitor Dr. Ostriker's compliance with the conditions imposed herein. Should Dr. Ostriker not be in compliance, the City Manager shall schedule a hearing before the City Council. However, the City Council at its January 9th meeting directed the City Manager to provide a status report at its next scheduled meeting to inform them if Dr. Ostriker is in compliance with Resolution 1195. Since the City Council passed, approved and adopted Resolution 1195 on November 28, 2016; there have been no formal complaints made by any members of the community to City staff that Azul has been seen loose or being walked within the City limits. Furthermore, the City Manager contacted the victims of the chicken attacks to determine if they had seen Azul since the resolution was adopted, they all replied they have not. The City Manager drove to Dr. Ostriker's home on January 17th to witness if Azul is running loose on the property and if Dr. Ostriker had started construction on an enclosed dog kennel/run. From what was visible from the roadway easement, the City Manager did not witness either. The City Manager subsequently spoke to Dr. Ostriker and found out he has not constructed an enclosed dog kennel/run anywhere on his property, and has no plans to do so in the future. He stated that the dog is always in his home and only goes out when Dr. Ostriker takes Azul outside the City's boundaries. NOTIFICATION The parties involved in the appeal have been notified. RRC:hl Ostriker 2nd appeal Reso_staffreport.docx THIS PAGE INTENTIONALLY LEFT BLANK RESOLUTION NO. 1195 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS MODIFYING THE DECISION OF THE CITY MANAGER IN THE APPEAL FILED BY DR. JEFFREY OSTRIKER AND ORDERING THE CONFINEMENT OF AZUL TO THE OSTRIKER PROPERTY The City Council of the City of Rolling Hills does hereby resolve and order as follows: Section 1. The proceedings described in this Resolution were conducted pursuant to the authority and procedures set forth in Chapter 624 of Title 6 of the Rolling Hills Municipal Code ("RHMC"), entitled "Aggressive Animals." All "section" references in this Resolution are to sections contained in Chapter 6.24. Section 2. The subject of the proceedings described in this Resolution is a male Spaniel mix named Azul ("the dog"), owned by Dr. Jeffrey Ostriker ("Owner"), who reside at 27 Caballeros Road in the City of Rolling Hills ("City"). Section 3. The incidents giving rise to this appeal are the second set of incidents in the last 12 months involving killing of chickens by Azul. The first incident occurred in December 2015 when Azul killed a chicken belonging to Matthew Chaisson, occupant of the property at 8 Crest Road East. In response to that incident, the City Manager ordered that Azul be confined to the Ostriker residence and when walked be restrained by a leash by a person capable of controlling the dog. Dr. Ostriker appealed that order to the City Council, in which he urged the Council to allow him to walk Azul without a leash due to his physical disabilities. The outcome of that appeal was memorialized in City Council Resolution No. 1183, which concluded in Section 7 as follows: "The City Council hereby affirms the decision of the City Manager requiring that Dr. Ostriker permanently confine Azul to his property and maintain the perimeter fencing on the property in proper working order. The City Council hereby modifies the decision of the City Manager based on the evidence received de novo at its hearing of March 14, 2016 pursuant to Section 624.070 relieving Dr. Ostriker of the requirement that Azul be restrained by a leash when being walked by Dr. Ostriker himself, so long as he remains more than 300 feet from the property line of the Chaisson home and any other residence that keeps chickens. Except when being walked by Dr. Ostriker himself, Azul must be restrained by a leash by a person capable of controlling Azul when off the Ostriker property. Violations of any of the provisions of this Resolution or failure of confining devices that cause Azul to escape the confinement of the Ostrilcer property shall be investigated pursuant to the provisions of Section 6.24.090 of the Rolling Hills Municipal Code." Section 4. The course of events that led to this proceeding are summarized as follows, more detailed descriptions of which can be found in the City Council staff report dated November 14, 2016 and the attachments thereto, all of which are hereby incorporated into this Resolution by reference as though fully set forth: A. The City received a complaint report on August 4, 2016 from Mr. Norm LaCaze (24 Portuguese Bend Road) alleging that Dr. Ostriker's dog Azul (described as "a large, broad chested, whitish type dog) and two other dogs entered his property on two different occasions and attacked his chickens, each incident resulted in the death of numerous chickens. Mr. LaCaze elected not to file a complaint after the first incident. However, the second of these incidents on August 3, 2016, resulting in the killing of 40 juvenile chickens, prompted him to file the complaint. B. On August 19, 2016, Mrs. Geraldean Belleville (12 Crest Road East) filed a complaint alleging that Azul ("a long body, medium length legs, blonde colored cocker spaniel type hair dog") entered her property on August 5, 2016 where the dog broke down the chicken coop and killed all the chickens within it Ms. Belleville stated in the report that she witnessed the attack. Section 5. Pursuant to RHMC Section 6.24.090, following an investigation conducted by the Los Angeles County Department of Animal Care and Control, the City Manager conducted an administrative hearing on Thursday, September 22, 2016 at 1:30 p.m. in the Rolling Hills City Council Chamber to determine if the alleged attacks had occurred and if the conditions imposed by the City Council in Resolution No. 1183 had been violated. At the hearing, each involved party made its initial presentation and brief rebuttals before the hearing was concluded. Resolution No. 1195 -1- After reviewing the incident investigation reports from the LA County Department of Animal Care and Control officers, written documents provided by the parties involved, and the oral testimony provided at the administrative hearing, the City Manager determined that the LaCaze and Belleville complaints were meritorious and that Dr. Ostriker violated the conditions of Resolution No. 1183 by allowing Azul to roam freely and out of his immediate control. In view of RHMC Section 6.24.090(A), the City Manager ordered that Azul be removed from the City immediately. Section 6. Pursuant to Section 6.24.070, Dr. Ostriker appealed the City Manager's order. A hearing on the appeal was scheduled for and conducted on November 14, 2016. The City Council received a written staff report containing numerous attachments, including correspondence from Dr. Ostriker and a report from the Los Angeles County Department of Animal Care and Control. Testifying at the hearing were Dr. Jeffrey Ostriker (the dog owner), Matthew Chaisson (previous victim of an Azul attack), Carol LaC-'7P (current complainant), Norm LaC-a7e (current complainant), Geraldean Belleville (current complainant), Dianne Wyatt (Azul's groomer), Sue Doyle (Azul's trainer), Cathleen Cunningham (Dr. Ostriker's therapist), Melvyn Honig and James Aichele. The City Council reviewed and considered all of the written and oral evidence submitted in the matter prior to making its decision. Section 7. Based on all of the foregoing, the City Council makes the following factual findings: A. Azul by all accounts has a history of aggressive behavior towards chickens. The attacks on the LaCaze and Belleville chickens are the second, third and fourth confirmed attacks this year. The photographs presented to the Council verified the deadly attacks. B. Carol and Norm LaCaze testified persuasively that Azul showed extreme belligerence to their gardener, Armando, who witnessed the attack in progress and threw a rock at Azul in order to drive him away when it appeared that the dog was advancing on him. The LaCaze and Belleville witnesses expressed concern for the safety of their grandchildren, who frequently visit their residences. C. Dr. Ostriker does not deny that Azul is responsible for the attacks; in fact, he expressed remorse for Azul's attacks and offered to reimburse the victims for their losses. In mitigation, Dr. Ostriker argued that Azul is an emotional support animal necessary for his emotional well-being. Dr. Ostriker presented testimony from Azul's groomer and trainer to the effect that Azul is not aggressive towards people or other dogs and from his therapist who testified as to his emotional condition. Dr. Ostriker expressed a willingness to leash Azul whenever off his property. Section 8. Based on the foregoing factual findings, the City Council draws the following conclusions from the evidence: A. Azul attacked and killed the LaCaze and Bellevile chickens. B. Though there is no evidence that Azul has attacked humans or animals other than chickens, Azul showed aggressiveness and beligerance towards the LaCaze gardener Armando when discovered in the midst of his killing frenzy. C. The City Council finds that if allowed to roam free Azul poses an extreme risk of harm to chickens and a serious potential harm to humans (especially children) who may be in the immediate area of an attack. An attack by a dog against another animal is unacceptable in a community without a leash law. The evidence shows without doubt that the attacks occurred and that future aggressive behavior is likely if Azul is free to roam off the Ostriker property. D. When walking Azul without a leash, Dr. Ostriker allowed Azul to leave his immediate control and to roam freely in the neighborhood, resulting in an attack on the LaCaze chickens. Azul again was allowed to roam freely when for the second time he attacked the LaCaze chickens, and yet another time when he attacked the Belleville chickens. Dr. Ostriker has violated the conditions imposed on him by City Council Resolution No. 1183, resulting in the death of innumerable chickens and causing fear and alarm among his neighbors. E. The Council is sympathetic to Dr. Ostriker's feelings for Azul and his asserted need for an emotional support animal. That said, and however beneficial that may be to Dr. Ostriker, Azul presents a real and serious threat to the health of animals, and potentially humans, in the community. On balance, and given the history of attacks and killings in 2016 alone, the consequences of a potential future attack outweigh the benefits that Azul provides to Dr. Ostriker. Notwithstanding Dr. Ostriker's affection for Azul, if necessary Dr. Ostriker can replace Azul with another emotional support animal; Resolution No. 1195 -2- 0 the same cannot be said for the effects of potential future attacks — which could include injuries or further death —which cannot be undone. Section 9. Consequently, and based on the foregoing, the City Council hereby modifies the decision of the City Manager requiring that Dr. Ostriker permanently remove Azul from the City as follows: A. Azul is ordered confined to the Ostriker property and shalt be kept indoors at all times, except as provided in paragraph B below. B. Azul may be allowed outdoors, provided that he is confined to a fully enclosed, secure dog run with a concrete pad. C. Azul shall not be walked outdoors off the Ostriker property anywhere within the territorial boundaries of the City of Rolling Hills. Section 10. The City Council reserves jurisdiction over this appeal for 90 days, during which time the City Manager is directed to monitor Dr. Ostriker's compliance with the conditions imposed herein. Should Dr. Ostriker not be in compliance, the City Manager shall schedule a hearing before the City Council. Section 11. The remedial provisions of this Resolution supersede the remedial provisions set forth in Resolution No. 1183. PASSED, APPROVED AND ADOPTED this 28th day of November, 2016. ATTEST: Heidi Luce City Clerk Resolution No. 1195 -3- STATE OF CALIFORNIA COUNTY OF LOS ANGELES CITY OF ROLLING HILLS ) The foregoing Resolution No. 1195 entitled: SS A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS MODIFYING THE DECISION OF THE CITY MANAGER IN THE APPEAL FILED BY DR. JEFFREY OSTRIKER AND ORDERING THE CONFINEMENT OF AZUL TO THE OSTRIKER PROPERTY was approved and adopted at a regular meeting of the City Council on November 28, 2016, by the following roll call vote: AYES: Councilmembers Black, Mirsch, Pieper and Mayor Dieringer. NOES: Councilmember Wilson. ABSENT: None. ABSTAIN: None. Resolution No. 1195 -4- id w Heidi Luce City Clerk f S( g 1.41111 0 N a • . RD r JLegend I • Catch Basin o Maintenance Hole Culvert ® Storm Drain Storm Drain Lateral Improved Channel by JH 11/17/2009 Los Angeles County Storm Drains City of Rolling Hills GANADp` DR vy y�, 0 r �. \`" F {tgTE,. ¢ �S`c-�ib� 800 1,600 2,400 Feet ry, so �r DEERHI