Los Angeles City Controller Ron Galperin's Community Financial Report

City of Los Angeles

CommunityFinancial ReportSummary of the Fiscal Year 2013 Comprehensive Annual Financial Report

www.controller.lacity.org@RonGalperin

Fellow Angelenos:

The Los Angeles City Controller serves as City's chief auditor, accountant and watchdog over the Citysfinances and operations. Each year the Controller releases a Comprehensive Annual FinancialReport (CAFR) detailing revenues, expenditures, assets and liabilities of the City. This year, we areintroducing this concurrent Community Financial Report (CFR) providing a summary, along witheasy-to-read charts and graphs, for the community.

Transparency and accessibility of information about our City is a major initiative of my office. This iswhy we established ControlPanelLA (ControllerData.LACity.org) a new site that opens the books onthe Citys financial and payroll data. Schedules from the Statistical Section of the full CAFR are nowavailable on ControlPanelLA, along with options for anyone to view, save and download the data.

Return on Investment is key to realizing a more efficient and effective City for Angelenos. To thatend, getting a handle on the Citys finances and achieving measurable outcomes is essential. Thisreport offers some selected operating indicators for various City departments; the need for moreand better measuring tools, however, is evident. Along with the Mayor, Council and others, our officewill be focusing this coming year on how to better measure performance and working to put it intoaction.

Knowledge is power. This report -- along with our other information, open data and auditinginitiatives -- are intended to offer both more knowledge and empowerment to our Citys residentsand businesses. I look forward to continuing in my efforts to effect greater transparency in our City.We in the Controllers Office are here to serve you. And, together, we all have an important role inserving as watchdogs of our Citys finances, and its future.

Controllers Message

The Community FinancialReport is a financial reportingproject of the Office of LosAngeles City Controller RonGalperin with the goal ofeducating and empoweringAngelenos on the Finances ofthe City.

Thank you,

Ron [email protected]

February 27, 2014

Controllers Perspective

The City has a number of critical challenges and keyopportunities including:

Looking ForwardFollowing Ten Guiding Financial Principles will allow theCity to improve its financial condition and benefit theCity as a whole.

Healthy Budgeting

Implement a budget based on performance and measurable results.

Focus on Return on Investment (ROI).

Reform City procurement.

Reduce liabilities with a comprehensive risk mitigation strategy.

Invest in technology.

Put the Citys vast assets and resources to work.

Improve accounting and accountability in Special Funds.

Explore savings in healthcare and pension costs.

Maximize current City revenues and collections.

Continue to build the Citys Reserves.

1

Structural budget shortfall

Pension and legal liabilities

Infrastructure asset management

Economic and education gaps

Traffic

Attracting and retaining businesses

Creative and diverse economy

City assets and reserves

Tourism and trade

Safer streets

Downtown revival

Location, Location, Location!

2

3

4

5

6

7

8

9

10

Challenges

Opportunities

Controllers Office

Auditing Division

FARID SAFFARDirector of Auditing

Financial and Compliance Audits

Performance Audits

Vendor Services Reviews

Fraud, Waste & Abuse Hotline

Special Analysis and Reviews

Accounting Operations

OPENPrincipal Deputy

Controller

Budgetary Control of City Funds

Payment Approval

Payroll

Check Security

Financial ReportingTODD BOUEY

Director of Financial Reporting

Comprehensive Annual Financial Report

General Accounting

Single Audit of Federal Grants

Cost Allocation Plan

Check Reconciliation

Enterprise Financial Management System

Key Report Contributors

Juan Lopez

Sally Rocio

Elizabeth Lee

Josefina Quiocho

Julieta Barba

Louella Ubaldo

Marie de los Reyes

Marlene Salandanan

Ron GalperinCity Controller

CLAIRE BARTELSChief Deputy

Controller

SUZY JACKDeputy Controller

DANIEL TARICADeputy Controller

Table of ContentsI. City Profile

City Facts & Indicators 1

City Organization 2

City Activities 3

II. Summary Financial Statements

Net Position 4

Government-Wide Assets 5

Government-Wide Liabilities 6

Statement of Activities 7

Government-Wide Revenues 8

Government-Wide Expenditures 9

III. Governmental Activities

Protection of Persons & Property 10

Public Works 11

Health and Sanitation 12

Transportation 13

Community Development 14

Cultural & Recreational Services 15

General Government 16

IV. Business-Type Activities

Airports 17

Harbor 18

Water and Power 19

Sewer 20

Los Angeles Convention Center 21

V. Glossary 22

VI. Credits & Considerations 24

Key City Indicators* 3-Year Trend

Estimated Population, 2013 3.9 million

Public School Enrollment, 2013 625,935

Personal Income per Capita, 2012 $44,474

Unemployment Rate, 2013 9.7%

Net Property Valuation, 2013 $416.5 billion

Total Direct Property Tax Rates, 2013 (per $1,000 assessed value) $1.038

Outstanding Debt per Capita, 2013 $5,684

Reserve Fund as % of General Fund, Beginning Balance 2013 6.7%

GO Bond Rating, December 2013 (Moodys, S&P, Fitch) Aa2, AA-, AA-

City Facts & Indicators

1*For detail, see Comprehensive Annual Financial Report, FY 2013

Key City Facts

Founded as City 1781

Incorporated 1850

Current Charter Adopted July 1, 2000

Fiscal Year July 1 June 30

Square Miles 470

City Profile I

City Organization

2

Organization of the City of Los Angeles

City Profile I

General Government

Protection of Persons and

Property

Public Works Health and Sanitation

Transportation

Water and Power

Community Development

Harbor

Airports

Cultural and Recreational

Services

Sewer

Convention Center

B. Business-Type ActivitiesFunctions intended to recover all (or in large part) costs through user fees and charges

A. Governmental Activities Functions principally supported by taxes and intergovernmental revenues

Two Types of Basic City Activities:

City Activities

3

City Profile I

Net Position

Government-Wide Summary Statement of Net PositionFY 2013

(amounts expressed in thousands)

GovernmentalActivities

Business-type Activities Total

Assets

Current and other assets $5,568,502 $9,971,185 $15,539,687

Capital assets 7,182,742 28,322,64035,505,382

Total assets 12,751,244 38,293,825 51,045,069

Deferred outflows of resources 0 97,668 97,668

Liabilities

Current and other liabilities. 646,717 1,476,526 2,123,243

Long-term liabilities. 7,644,127 19,497,487 27,141,614

Total liabilities. 8,290,844 20,974,013 29,264,857

Net position

Investment in capital assets net of related debt.. 4,452,921 10,135,052 14,587,973

Restricted. 2,436,809 3,662,540 6,099,349

Unrestricted (2,429,330) 3,619,888 1,190,558

Total net position. $4,460,400 $17,417,480 $21,877,880

The Statement of Net Positionis a summary of assets (whatthe City owns), and liabilities(what the City owes), includingdeferred outflows/inflows ofresources and equity.

The City raises and budgetsresources needed to pay aliability during the year inwhich the liability is duerather than during the year inwhich the liability is incurred.The deficit balance for thegovernmental activitiesunrestricted net position of$2.4 billion reflects theextent to which the City hasdeferred to future periodsthe financing of certainliabilities.

Invested in Capital Assets, Net of

Related Debt, 67%

Unrestricted, 5% Restricted for Capital Assets, 2%

Restricted for Debt Service, 6%

Restricted for Special

Purposes, 20%

Restricted

Total Net Position by CategoryFY 2013

Breakdown of Net Position

67% capital assets net of related debt

28% restricted resources 5% unrestricted resources

4

Summary Financial Statements II

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Capital AssetsEnd of FY 2013

($ millions)

Governmental Activities Business-Type Activities

$0$10,000$20,000$30,000$40,000$50,000$60,000

2013 2012

Government-Wide Assets($ millions)

Current and Other Assets Capital Assets

Assets

Represent what the City owns Cash and Cash Equivalents Receivables Inventories Restricted Assets Capital Assets

Summary of Assets

Key Assets

As of June 30, 2013, approximately $8.6 billion was held in the CityTreasury, of which approximately $8.5 billion was in pooledinvestments.

Purchased or constructed capital assets are valued at historical cost.Major improvements to capital assets are capitalized as constructed.

Governm

ent-Wide Assets

$145

$8,479

Deposits and InvestmentsEnd of FY 2013

($ millions)Cash on Hand

Deposits and in transit

Pooled Investments 1-30 Days

Pooled Investments 31-60 DaysPooled Investments 61-365 DaysPooled Investments 366 Days to 5 YearsPooled Investments Over 5 Years

5


Governm

ent-Wide Liabilities

$0$5,000

$10,000$15,000$20,000$25,000$30,000$35,000

2013 2012

Government-Wide Liabilities($ millions)

Current and Other Liabilities Long-Term Liabilities

Liabilities

Represent what the City owes Accounts Payable Bonds and Notes Compensated Absences Claims and Judgments

Summary of Liabilities

Key Liabilities

As of June 30, 2013 , the City estimates the amount of GovernmentalActivities tort and non-tort liabilities and workers compensationliability at approximately $771.5 million and $2.2 billion, respectively.

$0

$5,000

$10,000

$15,000

$20,000

Bonds and NotesEnd of FY 2013

($ millions)


$0$500

$1,000$1,500$2,000$2,500$3,000$3,500

Other Long Term LiabilitiesEnd of FY 2013

($ millions)


The City Debt Policy stipulates that non-voter approved debt serviceshall not exceed 6% of the Citys General Fund receipts. For the fiscalyear ended June 30, 2013, the non-voter approved debt service ratiowas 4.51%.

6


Statement of Activities

Summary Statement of Activities(amounts expressed in thousands)

Governmental Activities Business-type Activities Total

FY 2013 FY 2012 FY 2013 FY 2012 FY 2013 FY 2012

Revenues $6,515,239 $6,411,123 $6,603,809 $6,328,480 $13,119,048 $12,739,603

Expenses 7,143,880 6,316,712 5,733,509 5,482,876 12,877,389 11,799,588

Excess (Deficit) of revenues over expenses.

(628,641) 94,411 870,300 845,604 241,659 940,015

Transfers 246,534 250,077 (246,534) (250,077) -- --

Special Items.............. 112,074 -- 13,387 -- 125,461 --

Increase (Decrease) in net position. (270,033) 344,488 637,153 595,527 367,120 940,015

Net position beginning of year 4,730,433 4,376,039 16,780,327 16,184,800 21,510,760 20,560,839

Net position end of year $4,460,400 $4,720,527 $17,417,480 $16,780,327 $21,877,880 $21,500,854

The Statement of Activities is a summary showing how the Citys netposition changed during a fiscal year. Revenues and expenses in thisstatement are reflected in the year earned or liability incurred even thoughthe actual receipts and payments may not occur until future fiscal years.

Governmental Activities total expenses, for the fiscal year ended June30, 2013, exceeded revenues by $628.6 million. This deficit was largelydriven by higher estimated liabilities associated with workerscompensation, tort and non-tort liabilities.

$(200,000)

$1,800,000

2009 2010 2011 2012 2013

Changes in Net Position (Net Income)($ thousands)


Net positions may serve over time as an indicator of a governments financial position. Business-Type Activities have steadily increased inNet Position over the past five years; however, Governmental Activities have experienced two years of decline during the same period.

7


Governm

ent-Wide Revenues

0%

10%

20%

30%

40%

50%

60%

70%

Thou

sand

sGovernment-Wide Revenues

FY 2013

Governmental Activities Business-Type Activities % Total RevenueGovernmental Activities

Property Taxes, Charges for Services, and Operating Grants and Contributions comprise 67% of total revenue

Total revenue increased by $104 million over FY 2012

Business-Type Activities

Charges for Services comprise 98% of total revenue

Airport revenues totaled $1.1 billion, a 1% increase

Harbor revenues totaled $417 million, a 4% decrease

Water & Power revenues totaled $4.3 billion, a 7% increase

Sewer revenues totaled $589million, an 11% increase

Total revenue increased by $275 million over FY 2012

8


Governm

ent-Wide Expenditures

0%

5%

10%

15%

20%

25%

Thou

sand

sGovernment-Wide Expenditures

FY 2013

Governmental Activities Business-Type Activities % Total Expenditure

Governmental Activities

Governmental Activities comprise 55% of total expenditure

Protection of Persons and Properties comprise 39% of total Governmental Activities expenditure

Overall expenditures totaled $7.14 billion, a 13% increase

Business-Type Activities

Business-Type Activitiescomprise 45% of total expenditure

Airport expenditures totaled $923 million, a 3% increase

Harbor expenditures totaled $332 million, a 1% decrease

Water & Power expenditures totaled $3.87 billion, a 5% increase

Sewer expenditures totaled $572 million, a 5% increase

Overall expenditures totaled $5.73 billion, a 5% increase

9


80,000

90,000

100,000

110,000

120,000

130,000

2008 2009 2010 2011 2012 2013

Total Part I Crime* by Fiscal Year

Protection of Persons & PropertySelected Indicators

(FY 2013 CAFR pages 366-377)

16,500

17,000

17,500

18,000

18,500

19,000

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2009 2010 2011 2012 2013

posi

tion

auth

oriti

es

$ m

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ns

Revenues Expenses Position Authorities

2009 2010 2011 2012 2013

Dog licenses issues 121,138 116,500 121,817 123,080 126,234

Building permits issued 110,992 115,213 115,694 121,140 126,426

Fire responses (including automatic alarms) 138,200 114,121 118,986 122,492 121,381

Emergency medical responses by ambulances 382,000 377,267 377,026 384,557 407,240

Arrests made 168,000 151,174 160,480 162,698 150,552

Fact at a GlanceFive Year History of Revenues, Expenses and Positions

(Accrual Basis)

10

*Part I crimes are reported violent and property crimes indexed for comparative purposes.

Infrastructure Information(FY 2013 CAFR pages 378-381)

Asset Number of

Animal Shelters 6

Fire Stations 106

Police Stations 29

General Governmental Activities III

A42.0%

B29.0%C22.8%

D6.0%

F *0.2%

% of City Bridges by Condition Rating as of July, 2013

Public Works

Selected Indicators(FY 2013 CAFR pages 366-377)

1,000

1,500

2,000

2,500

3,000

3,500

$0$50

$100$150$200$250$300$350$400$450$500

2009 2010 2011 2012 2013

posi

tion

auth

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$ m

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ns


2009 2010 2011 2012 2013

Graffiti eradicated (square foot) 28,300 32,000 35,700 30,100 30,094

Debris removed (cubic yards) 183,379 157,886 125,000 95,505 77,704

Trees trimmed in Citys urban forest 75,504 32,211 13,351 22,226 50,000

Streets resurfaced (miles) 200 149 174 236 245

Fact at a GlanceFive Year History of Revenues, Expenses and Positions

(Accrual Basis)

Rating of F relates to Sixth Street Viaduct. Its replacement is in the design phase. Sufficiency Ratings are in accordance with Federal Highway Administration standards.

11


Asset Number of

Bridges 514

Street Lights 207,384

Streets (miles) 6,500


Health &

Sanitation


2,100

2,200

2,300

2,400

2,500

2,600

2,700

2,800

$0

$100

$200

$300

$400

$500

$600

2009 2010 2011 2012 2013

posi

tion

auth

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2009 2010 2011 2012 2013

Bulky items collected (tons) 33,146 33,330 32,479 27,640 34,000

Refuse collected (tons) 1,034,429 867,113 882,005 851,434 954,477

Yard trimmings collected (tons) 555,049 474,657 492,341 470,527 522,737

Recyclables collected (tons) 170,000 141,314 148,194 143,338 150,380

Fact at a Glance

Los Angeles

New York

Chicago

Houston

Philadelphia

0%

20%

40%

60%

80%

100%Recycling Rate of 5 Largest Cities*

Five Year History of Revenues, Expenses and Positions

(Accrual Basis)

12

*Source: http://san.lacity.org/solid_resources/recycling/index.htm


Asset Number of

Refuse Collection Trucks 750

Refuse Yards 7


Transportation


1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

2009 2010 2011 2012 2013

posi

tion

auth

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2009 2010 2011 2012 2013

Citations written 2,784,351 2,587,925 2,461,529 2,522,302 2,654,910

Abandoned vehiclesabated 116,967 100,589 102,911 74,270 61,062

Transit vehicle passenger trips 31,860,898 30,535,921 27,466,279 23,824,821 26,467,594

Increase in bicyclelane miles 7 10 17 51 101

Fact at a Glance

13%10% 7%

19%

5%

15%15%

11%

7%

Travel Time to Work (in minutes) City of Los Angeles 2011*

60 or more minutes

45 to 59 minutes

35 to 44 minutes

30 to 34 minutes

25 to 29 minutes

20 to 24 minutes

15 to 19 minutes

10 to 14 minutes

Less than 10 minutes


(Accrual Basis)

13


Asset Number of

Bike Paths 14

Commuter Buses 371

Traffic Signals 4,657

* Source: Los Angeles County Economic Development Corporation


Comm

unity Developm

ent


1,020

1,040

1,060

1,080

1,100

1,120

1,140

1,160

1,180

1,200

$0$50

$100$150$200$250$300$350$400$450$500

2009 2010 2011 2012 2013

posi

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2009 2010 2011 2012 2013

Senior meals served 1,632,027 1,655,446 1,625,627 1,590,525 1,535,913

Affordable units monitored 18,000 15,121 20,684 20,226 21,578

Multi-family units inspected 183,741 183,741 180,000 189,771 179,728

Tenant complaints processed 8,900 5,632 6,408 5,426 5,780

Fact at a Glance

13%11% 11%

14%

17%

11%13%

5%

5%

Households by IncomeCity of Los Angeles 2012*

Less than $15,000$15,000 to $24,999$25,000 to $34,999$35,000 to $49,999$50,000 to $74,999$75,000 to $99,999$100,000 to $149,000$150,000 to $199,999$200,000 or more


(Accrual Basis)

14

* Source: Los Angeles County Economic Development Corporation


Cultural & Recreational Services

Selected Indicators (FY 2013 CAFR pages 366-377)

1,000

1,500

2,000

2,500

3,000

3,500

$0

$100

$200

$300

$400

$500

$600

2009 2010 2011 2012 2013

posi

tion

auth

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$ m

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2009 2010 2011 2012 2013

Library items circulated 15,925,000 16,524,292 15,144,804 15,337,032 14,983,679

Art exhibitionspresented 52 46 27 52 60

Youth in sports programs 64,328 53,422 55,752 61,947 61,876

Senior club members 14,125 15,800 10,770 12,393 12,252

Fact at a Glance

0

1,000,000

2,000,000

3,000,000

4,000,000

2009 2010 2011 2012 2013

Cultural and Educational Attendance by Fiscal YearZoo Educational Exhibits ObservatoryEl Pueblo Programs Library Cultural ProgramsCity Theaters


(Accrual Basis)

15

Source: FY 2013 CAFR pages 366-377


Asset Number of

Acres of Beach Land 232

Acres of City Park Land (Including Beaches) 16,001

Libraries 73


General G

overnment

4,000

4,500

5,000

5,500

6,000

6,500

$0

$500

$1,000

$1,500

$2,000

$2,500

2009 2010 2011 2012 2013

posi

tion

auth

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$ m

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ns


Five Year History ofRevenues, Expenses and Positions

(Accrual Basis)

16

Mayor Council Controller City Attorney City Administrative

Officer

City Clerk Employee Relations Board Ethics Commission Finance General Services Information Technology

Neighborhood Empowerment

Personnel Capital Finance

Administration General City Purposes

Human Resource Benefits

Liability Claims Unappropriated

Balance Water & Electricity

General Government Activities encompass bothdepartmental and non-departmental expensesspanning elected offices, administrative and supportservices, and broad citywide expenditure categories.


Airports


3,400

3,450

3,500

3,550

3,600

3,650

3,700

3,750

3,800

$0

$200

$400

$600

$800

$1,000

$1,200

2009 2010 2011 2012 2013

posi

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2009 2010 2011 2012 2013

Aircraft movements (thousands) 1,049 1,025 989 976 939

Passengers (millions) 62 63 65 67 69

Air cargo (thousand tons) 2,018 2,242 2,296 2,366 2,400

Fact at a GlanceTop 6 Busiest Airports by Passenger Traffic CY 2012

(in millions)

020406080

100120

Atlanta (ATL)

Beijing (PEK)

London (LHR)

Tokyo (HND)

Chicago (ORD)

Los Angeles (LAX)

Total Passengers


(Accrual Basis)

17

Source: http://en.wikipedia.org/wiki/World's_busiest_airports_by_passenger_traffic#2012_statistics


Asset Number of

Airports 3

Business Type Activities IV

Harbor


935

940

945

950

955

960

965

970

975

$0$50

$100$150$200$250$300$350$400$450$500

2009 2010 2011 2012 2013po

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Indicator 2009 2010 2011 2012 2013

Inbound tonnage (million tons) 94 88 94 98 93

Outbound tonnage (million tons) 66 67 68 75 72

Containerized cargo volume (millions of Twenty-foot Equivalent Units) 7 7 8 8 8

Vessel arrivals 2,322 2,124 2,236 2,100 2,089

Cruise passengers 990,965 802,899 667,434 515,827 355,875

Fact at a Glance

Los Angeles39%

Long Beach32%Oakland

11%

Seattle7%

Tacoma9%

All Others2%

% of West Coast Container Market Share for Fiscal Year 2013


(Accrual Basis)

18

Source: http://www.portoflosangeles.org/Publications/Financial_Statement_2013.pdf


Asset Number of

Waterfront (miles) 43

Major Container Terminals 8

Cargo Terminals 24


Water and Pow

er


8,500

8,600

8,700

8,800

8,900

9,000

9,100

9,200

9,300

$0$500

$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500$5,000

2009 2010 2011 2012 2013

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Indicator 2009 2010 2011 2012 2013

Gallons water sold (billions) 189 166 169 170 178

Average number of water customers (thousands) 666 659 667 674 676

Kilowatt hours sold (billions) 25 26 25 25 26

Average number of energy customers (thousands) 1,452 1,447 1,461 1,471 1,479

Fact at a Glance

$0.00

$0.05

$0.10

$0.15

2008 2009 2010 2011 2012 2013

Direct Rate per Kilowatt Hourby Fiscal Year

Residential Commercial / Industrial


(Accrual Basis)

19

Source: FY 2013 CAFR page 347


Asset Number of

Power Transmission Lines (miles) 3,632

Water Distribution Pipe (miles) 7,246


Sewer


$480

$500

$520

$540

$560

$580

$600

2009 2010 2011 2012 2013

$ m

illio

ns

Revenues Expenses

Indicator 2009 2010 2011 2012 2013

Wastewater treatment (Million Gallons per Day) 451 393 384 398 398

Wastewater reclaimed (MillionGallons per Day) 78 81 68 62 72

Fact at a Glance

*Bureau of Sanitation positions shown under Health & Sanitation category

Five Year History of Revenues and Expenses*

(Accrual Basis)

20

Source: http://lacitysan.org/fmd/ssc1.htm

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

2013 2014 2015 2016 2017 2018

Basic Sewer Service Charge Rate

Rate/Hundred Cubic Feet


Asset Number of

Sewers (miles) 6,700

Stormdrain Pipe Mainline (miles) 1,200


Los Angeles Convention Center

Operational Figures(FY 2013 CAFR pages 366-377)

0

20

40

60

80

100

120

140

160

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

2009 2010 2011 2012 2013po

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Indicator 2009 2010 2011 2012 2013

Scheduled exhibit hall events 161 161 149 137 140

Repeat events hosted 274 297 304 281 284

Exhibit Halls


(Accrual Basis)

21

Infrastructure Information

Asset Number of

Exhibit Space (sq. ft.) 720,000


GlossaryAccrual Basis is accounting for transactions when they occur. Revenuesare recorded when earned or when the City has a right to receive therevenues. Expenses are recorded when incurred.

Adopted Budget is the Mayor and Council approved plan of financialactivity for a specified fiscal year indicating all planned revenues andappropriations for the year.

Annual Community Financial Report (ACFR) is a supplemental overviewof the Citys Comprehensive Annual Financial Report published by theControllers Office.

Appropriation Authority is the legal authority to incur obligations andexpend up to a budgeted amount for a stated purpose. Totalappropriation authority includes the adopted budget and actions takenby Mayor and Council during the year to amend the adopted budget.

Assets are what the City owns.

Budget Stabilization Fund was created to prevent overspending duringprosperous years and provide resources to help maintain service levelsduring years of slow revenue growth or declining revenue. CharterAmendment P established the Budget Stabilization Fund in the CityTreasury and authorized the requirements for transfers or expendituresfrom the fund as established by ordinance.

Business-type Activities are functions intended to recover all (or inlarge part) costs through user fees and charges.

Capital Improvement Expenditure Program (CIEP) constitutesexpenditures for the acquisition, construction, expansion orrehabilitation of the Citys physical plant (such as streets, sewers, andstorm drains) and facilities (such as fire stations, police stations, andlibraries).

Cash Basis (or Budget Basis) accounting records revenues andexpenditures when cash is received or paid.

Commercial Paper notes lease financing program supplements theMICLA equipment and real property lease program, and allows MICLAto access financial markets quickly; to obtain flexible, short-termmaturities; to borrow only those amounts needed as invoices arereceived; and to borrow at more favorable rates.

Comprehensive Annual Financial Report (CAFR) is published annuallyby the City Controller on the Citys financial condition and results ofoperation at the conclusion of the fiscal year. The report is prepared toconform to Generally Accepted Accounting Principles (GAAP) forgovernmental units and audited in accordance with generally acceptedauditing standards by a firm of licensed certified public accountants.

Debt Policy is an adopted formal debt policy of the City establishingguidelines for the structure and management of the Citys debtobligations. These guidelines include both a target and ceiling forcertain debt ratios to be used for planning purposes.

Department is a major administrative division of the City that indicates overall management responsibility for an operation or group of related operations within a functional area.

Encumbrance is an obligation or commitment to pay for a good or service. An example of an encumbrance is ordering a car and setting aside funds to pay for the car.

Expenditure is an actual payment. An example of an expenditure is writing a check to pay for the car.

Fiscal Year (FY) is a twelve-month period of time to which the annual budget applies and at the end of which the City determines its financial position and the results of its operation. The Citys fiscal year begins on July 1 of the calendar year and ends on June 30 of the following year.

Fund is a fiscal entity with assets, liabilities, revenues and expenditures that are segregated for carrying out a specific purpose or activity.

Generally Accepted Accounting Principles (GAAP) is a set of accounting principles, standards, and procedures used to compile financial statements.

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Glossary V

GlossaryGeneral Fund is for deposit of general receipts which are not restricted, such as property, sales and business taxes and various fees.

General Obligation Bonds are voter authorized (by two-thirds vote) and payable from proceeds of taxes on taxable secured and unsecured property within the City and collected by the County General Obligation bonds are paying for such projects as library, police, and fire facilities.

Governmental Activities are functions principally supported by taxes and intergovernmental revenues.

Government-Wide is a broad overview of the Citys finances comprised of Governmental and Business-Type activities across all sources of funds.

Governmental Accounting Standards Board (GASB) is an independentorganization that establishes standards of accounting for U.S. state andlocal government.

Government Finance Officers Association (GFOA) is an organizationaimed at enhancing and promoting the professional management ofgovernments for the public benefit by identifying and developingfinancial policies and best practices and promoting their use througheducation, training, and leadership.

Judgment Obligation Bonds are issued under State law to finance an obligation imposed by law. Judgment Obligation Bonds are secured by the General Fund.

Liabilities are what the City owes.

Net Position is the difference between the Citys assets and liabilities, including deferred outflows/inflows of resources.

Position Authority is an approved position that may be filled with a full-time employee. Position authority is not an indicator of employment level.

Reserve Fund is the fund in which general unrestricted cash is set aside outside the budget for unforeseen expenditures and emergencies.

Restricted refers to funds that are not available for general use because they are set aside for a specific purpose.

Revenue is cash or credits the City receives during the fiscal year as income to finance general or restricted operations. This includes items such as taxes, fees from services, interest earnings, and grants.

Revenue Bonds are bonds payable exclusively from earnings of the enterprise and/or special revenue funds.

Special Assessment Bonds are bonds payable from the proceeds of special assessments levied against certain properties that benefited from the proceeds of the bonds.

Special Purpose Funds account for proceeds of specific revenue sources that are legally restricted to expenditure for specified purposes.

Unrestricted refers to funds available for general use.

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Glossary V

Credits & Considerations

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IMAGE CREDITSAll Images listed are licensed and used under Creative Commons licenseArchitectural History of Los Angeles. Courtesy of Jericl Cat. Flickr Link.LA City Hall from DWP. Courtesy of Valli_Mark. Flickr Link.City Hall. Courtesy of Felix Tsao. Flickr Link.Cargo into Sunlight. Courtesy of Bridget Coila. Flickr Link.jan 2012 13191. Courtesy of Paul Bailey. Flickr Link.City of Los Angeles Sanitation Truck. Courtesy of Navymailman. Flickr Link.Los Angeles City Hall. Courtesy of Channone Arif. Flickr Link.

Villaraigosa. Courtesy of Terminals & Gates. Flickr Link. Modified text, rotate 180.Los Angeles City Hall Historical Postcards. Various. Courtesy of MCAD Library. Flickr Link.See Something or Say Something Los Angeles. Courtesy of Eric Fischer. Flickr Link.LAPD (45/465). Courtesy of John Liu. Flickr Link.A day of Los Angeles Metro. Courtesy of Eric Fischer. Flickr Link.Los Angeles. Two images Courtesy of Tony Nugary. Flickr Link.

While this report is summarizing and condensing the 2013 Comprehensive Annual Financial Report (CAFR) of the City of Los Angeles, this is not an audited document and contains some information supplemental to the CAFR. Much ofthe CAFR is produced from information provided by component units and departments of the City. Further detailed financial statements are available from the websites of various entities presented herein. Interested stakeholders areencouraged to view the full CAFR.

Credits & Considerations VI

Special thanks to Special Assistant Juan Lopez for his dedication and hard work in putting this report together.

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Documents

Los Angeles City Controller Ron Galperin's Community Financial Report