15-H
TO: Honorable Chairman and Directors of the Bellflower Financing Authority
ATTENTION: Ryan Smoot, Executive Director
FROM: Anna Garan, Director of Finance
SUBJECT: Consideration and possible action to receive and file Bellflower Financing Authority’s audited financial statements for the fiscal year ended June 30, 2025.
DATE: January 12, 2026
EXECUTIVE SUMMARY
The Bellflower Financing Authority (“BFA”) is a component unit of the City of Bellflower organized on June 26, 2006, pursuant to the California Joint Exercise of Powers Act, which provides financing for public capital improvements in the City. BFA functions as a separate entity and is governed by a Board of Directors. The Board of Directors are comprised solely of City Council Members. The independent Certified Public Accounting firm, Moss, Levy & Hartzheim, LLP, audited BFA’s financial statements for fiscal year 2024-25.
RECOMMENDATION TO BELLFLOWER FINANCING AUTHORITY
1) Receive and file Bellflower Financing Authority’s audited financial statements; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
None.
KEY FINANCIAL SUMMARY
Total cash and investments, at June 30, 2025 $3,914
2021 COPs payable – transportation related, at June 30, 2025 $5,995,000 (Maturity: October 1, 2032)
FY 2024-25 debt service (principal, interest, and trustee fees) $822,618 Repayment sources: City’s Propositions A/C funds and, if necessary, Measure M/R funds
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Staff Report – BFA audited financial statements for the FY ended June 30, 2025 January 12, 2026
KEY FINANCIAL SUMMARY – Continued
In January 2018, the City and BFA issued the 2018 Transportation Certificates of Participation (“COPs”) in the amount of $10,000,000 to provide funds for the construction of the four level Regional Transit Center and Parking Structure to add 278 parking spaces. The total project cost was $13.4 million including the site acquisition cost of $1.4 million.
In February 2021, the 2018 Transportation COPs were refinanced with 2021 COPs.
The 2021 COPs are secured by the Civic Center Property (City Hall), and debt service payments are made with the City’s Propositions A/C funds and, if necessary, Measure M/R funds may also be used.
Note payable to MTB Enterprises, LLC, at June 30, 2025 $658,815 (Maturity: January 15, 2036, approximate)
Related Capital Assets-Butterfly Garden, net of accumulated depreciation $989,628 FY 2024-25 debt service (principal and interest) $73,838 Repayment sources: Lease revenues generated by the Butterfly Garden property and approximately $2,000 per year from the City’s General Fund.
In March 2015, BFA purchased a portion of the land to be developed as the Butterfly Garden in the amount of $995,000 (plus escrow closing costs), financed with a note payable to MTB Enterprises, LLC. In connection with the purchase, BFA acquired ground leases for a billboard and an oil booster pumping station. These lease revenues with annual CPI adjustments and approximately $2,000 per year from the City’s General Fund are used to make the debt service payments on the note.
The other remaining portion of the Butterfly Garden was purchased by the City in the amount of $700,000 using $650,000 from a State Urban Greening Grant and $50,000 in general funds.
ATTACHMENT
BFA audited financial statements for the fiscal year ended June 30, 2025………………...3 - 2 -
BELLFLOWER FINANCING AUTHORITY
(COMPONENT UNIT OF THE CITY OF BELLFLOWER)
BASIC FINANCIAL STATEMENTS
WITH REPORT ON AUDIT
BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
JUNE 30, 2025
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BELLFLOWER FINANCING AUTHORITY
TABLE OF CONTENTS
June 30, 2025
Independent Auditor’s Report ....................................................................................................... 1
Management’s Discussion and Analysis (Required Supplementary Information)......................... 4
Basic Financial Statements:
Government – Wide Financial Statements:
Statement of Net Position ....................................................................................................... 9 Statement of Activities ........................................................................................................... 10
Fund Financial Statements:
Balance Sheet – Governmental Fund .................................................................................. 11 Reconciliation of the Governmental Fund Balance Sheet
to the Statement of Net Position ......................................................................................... 12 Statement of Revenues, Expenditures, and Changes in Fund Balance – Governmental Fund ........................................................................................... 13 Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to the Statement of Activities ...................... 14
Notes to Basic Financial Statements ....................................................................................... 15
Required Supplementary Information:
Schedule of Revenues, Expenditures, and Changes in
Fund Balance – Budget and Actual – General Fund .......................................................... 29
Supplemental Information:
Transportation Bonds Project Supplemental Schedule ......................................................... 30
Independent Auditor’s 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 .................................................................................................................... 31
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1 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS
PARTNERS COMMERCIAL ACCOUNTING & TAX SERVICES GOVERNMENTAL AUDIT SERVICES CRAIG A HARTZHEIM, CPA 8383 WILSHIRE BLVD., SUITE 800 5800 HANNUM AVE., SUITE E HADLEY Y HUI, CPA BEVERLY HILLS, CA 90211 CULVER CITY, CA 90230 ADAM V GUISE, CPA TEL: 310.670.2745 TEL: 310.670.2745
TRAVIS J HOLE, CPA FAX: 310.670.1689 FAX: 310.670.1689 WILSON LAM, CPA www.mlhcpas.com www.mlhcpas.com
INDEPENDENT AUDITOR’S REPORT
The Honorable Board of Directors of the
Bellflower Financing Authority
Bellflower, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and the major fund of the Bellflower Financing Authority (the Authority), a component unit of the City of Bellflower, California as of and for the fiscal year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of the Authority as of June 30, 2025, and the respective changes in its financial position for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
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. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management 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, and for 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.
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2 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 Authority’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and the schedule of revenues, expenditures, and changes in fund balance – budget and actual – general fund, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 RSI 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 - 6 -
3 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS
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 RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority’s basic financial statements. The Transportation Bonds Project Supplemental Schedule is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates 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 Transportation Bonds Project Supplemental Schedule is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 15, 2025 on our consideration of the Authority’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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control over financial reporting and compliance.
Report on Summarized Comparative Information
We have previously audited the Authority’s 2024 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated January 31, 2025. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2024, is consistent, in all material respects, with the audited financial statements from which it has been derived.
Moss, Levy & Hartzheim, LLP
Culver City, California
December 15, 2025
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4 MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the Bellflower Financing Authority (Authority), we offer readers of the Authority’s financial statements this narrative overview and analysis of the financial activities of the Authority for the fiscal year ended June 30, 2025. We encourage the readers to consider the information presented here in conjunction with additional information furnished in the accompanying basic financial statements.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Authority’s basic financial statements. The basic financial statements are comprised of three components: 1) Government-wide Financial Statements, 2) Fund Financial Statements and 3) Notes to the Financial Statements.
Government-Wide Financial Statements
These statements are designed to provide information about the activities of the Authority as a whole and present a longer-term view of the Authority’s finances. They are prepared using the accrual basis of accounting, which is similar to the accounting used by most private sector companies.
The Statement of Net Position presents information on all of the Authority’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the difference between the assets and deferred outflows of resources less liabilities and deferred inflows of resources reported as net position. In time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating.
The Statement of Activities presents information on how the Authority’s net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.
In both the Statement of Net Position and Statement of Activities, only the Authority’s basic governmental activities, such as principal and interest payments on certificates of participation and a note payable, are reported. The lease payments received from the City of Bellflower (City), a billboard and an oil booster pumping station are generally sufficient to finance the activities.
The Authority does not have any other business-type activities or separate component units. As referred to in Note 1 of the notes to the basic financial statements, the Authority conforms to accounting principles generally accepted in the United States of America as applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.
Fund Financial Statements
The Fund Financial Statements, in general, provide detailed information about the most significant individual funds – not the Authority as a whole. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives.
The Authority, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. While funds can be divided into three categories (governmental, proprietary, and fiduciary), the Authority’s activities only require the maintenance of a debt service fund (a governmental fund). - 8 -
5 Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near- term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the Authority’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The Authority only maintains one governmental fund (debt service fund). This fund reports financial transactions using an accounting method called modified accrual accounting. This information is presented in the Governmental Fund – Balance Sheet and in the Governmental Fund – Statement of Revenues, Expenditures, and Changes in Fund Balance. On behalf of the Authority, the City Council adopts an annual appropriated budget for the debt service fund. A budgetary comparison statement has been provided for the fund to demonstrate compliance with this budget.
Proprietary funds are primarily used to account for when a reporting entity charges for the services it provides, whether to outside customers or to other units of the entity. These funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities, using an accrual basis of accounting. Fiduciary funds are used to account for resources held for the benefit of parties outside the reporting entity. In these cases, the entity has a fiduciary responsibility and is acting as a trustee. The Statement of Fiduciary Net Position separately reports all of the entity’s fiduciary activities. These activities are excluded from the entity’s other financial statements because the entity cannot use these assets to finance its operations. However, the entity is responsible for ensuring that the assets reported in these funds are used for their intended purposes.
The Authority does not maintain any proprietary or fiduciary funds.
Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Net Position
Governmental
Activities /
Government-Wide
June 30, 2025
Governmental
Activities /
Government-Wide
June 30, 2024
Current assets $ 762,183 $ 743,734 Long-term assets 6,454,154 7,182,515
Total assets 7,216,337 7,926,249
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6 Net Position
Governmental
Activities /
Government-Wide
June 30, 2025
Governmental
Activities /
Government-Wide
June 30, 2024
Current liabilities 788,876 771,169
Long-term liabilities 5,915,626 6,654,464
Total liabilities 6,704,502 7,425,633
Deferred inflows of resources 193,324 225,230
Net position:
Net investment in capital assets 330,813 286,679
Unrestricted (12,302) (11,293)
Total net position $ 318,511 $ 275,386
The Authority’s Government-Wide total net position at June 30, 2025 was $318,511. Of this amount, $330,813 was for net investment in capital assets and $12,302 was an unrestricted deficit. The net position for net investment in capital assets represents the net book value of the Authority’s capital assets less the outstanding balance of the debt issued to finance the assets.
On the other hand, the deficit in unrestricted net position represents a shortage in assets needed to cover the accrued interest on a note payable. Funding for any shortage at the time of a debt service payment due date will be provided by the City’s General Fund. The Authority’s assets totaled $7.2 million, comprised of $4 thousand in cash and investments, $758 thousand in current lease and accrued interest receivables, $5.5 million in long-term lease receivable, and $990 thousand in capital assets. The Authority’s liabilities totaled $6.7 million, comprised of 2021 Certificates of Participation of $6.0 million, a note payable of $659 thousand, related accrued interest payable of $47 thousand, and unearned revenue of $4 thousand. Pursuant to GASB Statement No. 87, the pumping station lease valued at $193 thousand is reported as deferred inflows of resources and the corresponding receivable is included in the current and long-term assets.
Changes in Net Position
Governmental
Activities/
Government-Wide
Totals
2024-25
Governmental
Activities/
Government-Wide
Totals
2023-24
Revenues:
General Revenues:
Lease interest revenue $ 213,450 $ 231,634 Investment earnings 2,262 1,957
Total General Revenues 215,712 233,591
Expenses:
Interest and fiscal charges 171,565 188,911
Depreciation expense 1,022 1,022
Total Expenses 172,587 189,933
Increase (decrease) in net position 43,125 43,658
Net position – beginning 275,386 231,728
Net position – ending $ 318,511 $ 275,386 - 10 -
7 The Authority’s net position increased $43 thousand. The general revenues totaled $216 thousand comprised of lease interest revenue and investment earnings. The expenses totaled $173 thousand comprised of interest expense, fiscal charges, and depreciation expense.
FINANCIAL ANALYSIS OF THE AUTHORITY’S FUND
As noted earlier, the Authority uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Fund. The focus of the Authority’s governmental fund is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Authority’s financing requirements. Under GASB Statement No. 54, any available fund balance is classified as restricted to reflect its constraint for a specific purpose, namely capital assets and debt service.
At the end of the fiscal year, the Authority’s fund balance restricted for debt service was $154.
Governmental Revenues – The following table presents a summary of governmental fund revenues for the fiscal year ended June 30, 2025, compared to the prior year revenues.
Comparison of Governmental Revenues
Fiscal Years 2024-25 and 2023-24
Amount
2024-25
% of Total
Revenues
Amount
2023-24
% of Total
Revenues
Variance
% increase
(decrease)
Lease revenue $ 890,385 99.5% $ 893,659 99.6% $ (3,274) (0.4)% Other Revenue 1,947 0.2% 1,770 0.2% 177 10.0%
Investment earnings 2,262 0.3% 1,957 0.2% 305 15.6% Total $ 894,594 100.0% $ 897,386 100.00% $ (2,792) (0.3)%
The total revenues of the governmental fund for fiscal year 2024-25 were $895 thousand, a decrease of $3 thousand, or 0.3%, from the preceding fiscal year. The lease revenue decreased $3 thousand, other revenue increased $177, and investment earnings increased $305 compared to the preceding fiscal year.
Governmental Expenditures – The following table presents a summary of governmental fund expenditures for the fiscal year ended June 30, 2025, compared to the prior year expenditures.
Comparison of Governmental Expenditures
Fiscal Years 2024-25 and 2023-24
Amount
2024-25
% of Total
Expenditures
Amount
2023-24
% of Total
Expenditures
Variance
% increase
(decrease)
Debt service $ 896,456 100% $ 895,428 100% $ 1,028 0.11% Total $ 896,456 100% $ 895,428 100% $ 1,028 0.11%
The total expenditures of the governmental fund for fiscal year 2024-25 were $896 thousand for debt service on the 2021 Certificates of Participation and a note payable to MTB Enterprises, LLC (note executed in connection with the Butterfly Garden property acquisition), and payment of trustee fees. The total expenditures increased $1 thousand, or 0.11%, from the preceding fiscal year.
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8 CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets. At June 30, 2025, the Authority’s investment in capital assets was $990 thousand.
The only capital asset activity for the fiscal year was the depreciation expense on the Butterfly Garden’s building and improvements in the amount of $1,022. For additional information, please refer to the notes to the basic financial statements – Note 5, Capital Assets.
Capital Assets
June 30, 2025
June 30, 2024
Variance
% increase
(decrease)
Land $ 948,941 $ 948,941 $ - - Buildings and improvements 40,687 41,709 (1,022) (2.5)% Total $ 989,628 $ 990,650 $ (1,022) (0.1)%
Long-Term Liabilities. At June 30, 2025, the Authority had $6.7 million in outstanding long-term liabilities for governmental activities. For additional information, please refer to the notes to the basic financial statements – Note 6, Long-Term Liabilities.
Long-Term Debt
June 30, 2025
June 30, 2024
Variance
% increase
(decrease)
2021 COP – Transportation $ 5,995,000 $ 6,670,000 $ (675,000) (10.1)% Note payable 658,815 703,971 (45,156) (6.4)% Total $ 6,653,813 $ 7,373,971 $ (720,156) (9.8)%
During the fiscal year, the Authority made principal payments of $675 thousand for 2021 COP and $45 thousand for the note payable, of which $10,219 was additional principal payment under the terms of the note as excess rent.
ECONOMIC OUTLOOK
The Authority was organized in 2006 to undertake the financing of public capital improvements and other projects for revitalization of the City. The sources of repayment for the transportation portion of the Certificates of Participation are Proposition A and Proposition C local return funds and, if necessary, Measure M and Measure R local return funds (Proposition A/C and Measure M/R are Los Angeles Countywide sales taxes). We believe the local return funds will continue to be sufficient to make the semi-annual debt service payments. The sources of repayment for the note payable to MTB Enterprises, LLC are ground lease revenues for a billboard and an oil booster pumping station and, if necessary, the City’s General Fund revenue. We believe these revenues will continue to be sufficient to make the semi-annual debt service payments.
CONTACTING THE AUTHORITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide a general overview of the Authority’s finances for all those with an interest. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Director of Finance, Bellflower Financing Authority, 16600 Civic Center Drive, Bellflower, CA 90706. - 12 -
BASIC FINANCIAL STATEMENTS
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2025 2024
Assets:
Current Assets:
Cash held by the City of Bellflower $ 3,760 $ - Cash with fiscal agents 154 2,016 Pumping station lease receivable 33,798 28,365 2021 COP Lease receivable 690,000 675,000 Accrued lease interest receivable 34,471 38,353 Total Current Assets 762,183 743,734
Long-term Assets:
Pumping station lease receivable 159,526 196,865
2021 COP Lease receivable 5,305,000 5,995,000
Capital assets:
Not being depreciated 948,941 948,941
Being depreciated (net of accumulated depreciation) 40,687 41,709 Total Long-Term Assets 6,454,154 7,182,515
Total Assets 7,216,337 7,926,249
Liabilities:
Current Liabilities:
Interest payable 46,927 51,662
Unearned revenue 3,760 -
Note payable 48,189 44,507
Certificates of participation 690,000 675,000
Total Current Liabilities 788,876 771,169
Long-term Liabilities:
Note payable 610,626 659,464
Certificates of participation 5,305,000 5,995,000
Total Long-Term Liabilities 5,915,626 6,654,464
Total Liabilities 6,704,502 7,425,633
Deferred Inflows of Resources:
Pumping station lease revenue 193,324 225,230
Net Position:
Net investment in capital assets 330,813 286,679
Unrestricted (12,302) (11,293)
Total Net Position 318,511$ 275,386$
9 BELLFLOWER FINANCING AUTHORITY
STATEMENT OF NET POSITION
JUNE 30, 2025
(With comparative totals at June 30, 2024)
Governmental Activities
See accompanying notes to basic financial statements.
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Program
Expenses Revenues 2025 2024
Governmental Activities:
Unallocated depreciation expense 1,022$ -$ (1,022)$ (1,022)$ Interest and fiscal charges 171,565 - (171,565) (188,911) Total Governmental Activities 172,587$ -$ (172,587) (189,933) General Revenues:
Lease interest revenue 213,450 231,634
Investment earnings 2,262 1,957
Total General Revenues 215,712 233,591
Change in Net Position 43,125 43,658
Net Position, Beginning of Fiscal Year 275,386 231,728 Net Position, End of Fiscal Year 318,511$ 275,386$ Function/Program
10 Net (Expense) Revenue and
Changes in Net Position
Governmental Activities
See accompanying notes to basic financial statements.
BELLFLOWER FINANCING AUTHORITY
STATEMENT OF ACTIVITIES
For the fiscal year ended June 30, 2025
(With comparative totals for the fiscal year ended June 30, 2024) - 15 -
2025 2024
Assets:
Cash held by the City of Bellflower 3,760$ -$
Cash with fiscal agents 154 2,016
Pumping station lease receivable 193,324 225,230 Total Assets 197,238$ 227,246$
Liabilities:
Unearned revenue 3,760$ -$
Total Liabilities 3,760 -
Deferred Inflows of Resources:
Unavailable revenue - pumping station lease 193,324 225,230 Total Deferred Inflows of Resources 193,324 225,230 Fund Balance:
Restricted for debt service 154 2,016
Total Fund Balance 154 2,016
Total Liabilities, Deferred Inflows of Resources, and
Fund Balance 197,238$ 227,246$
11 General Fund
BELLFLOWER FINANCING AUTHORITY
BALANCE SHEET - GOVERNMENTAL FUND
June 30, 2025
(With comparative totals at June 30, 2024)
See accompanying notes to basic financial statements.
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Fund balance of governmental fund 154$
Amounts reported for governmental activities in the Statement of Net Position are different because:
Long-term lease receivables are not available to pay for current period expenditures and, therefore, is not reported in the fund financial statements 2021 COP lease receivable.5,995,000
Accrued lease interest receivable is not available to pay for current period Unavailable rental revenue is not available to pay for current period expenditures.34,471
Long-term liabilities are not due and payable in the current period and are not reported as fund liabilities. Interest on long-term liabilities is not accrued in the governmental fund, but rather is recognized as an expenditure when due.
All liabilities, both current and long-term are reported in the Statement of Net Position. Balances at June 30, 2025 are:
Certificates of Participation (5,995,000)
Note payable (658,815)
Interest payable (46,927)
Capital assets, net of accumulated depreciation, used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds.989,628
Net position of governmental activities 318,511$
12 BELLFLOWER FINANCING AUTHORITY
RECONCILIATION OF THE GOVERNMENTAL FUND
BALANCE SHEET TO THE STATEMENT OF NET POSITION
June 30, 2025
See accompanying notes to basic financial statements.
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2025 2024
Revenues:
Lease revenue 890,385$ 893,659$
Other revenue - City of Bellflower 1,947 1,770 Investment earnings 2,262 1,957
Total Revenues 894,594 897,386
Expenditures:
Debt Service:
Principal payments 720,156 701,929
Interest and fiscal charges 176,300 193,499
Total Expenditures 896,456 895,428
Net Change in Fund Balance (1,862) 1,958
Fund Balance, Beginning of Fiscal Year 2,016 58 Fund Balance, End of Fiscal Year 154$ 2,016$ 13 (With comparative totals for the fiscal year ended June 30, 2024) General Fund
BELLFLOWER FINANCING AUTHORITY
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - GOVERNMENTAL FUND
For the fiscal year ended June 30, 2025
See accompanying notes to basic financial statements.
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Net change in fund balances of governmental fund (1,862)$ Amounts reported for governmental activities in the Statement of Activities are different because:
The issuance of long-term debt provides current financial resources to the governmental fund, while the repayment of the principal of long-term debt consumes the current financial resources of the governmental fund. Neither transaction, however, has any effect on net position. The amounts are the net effect of these differences in the treatment of long-term debt:
Repayment of certificates of participation 675,000
Repayment of note payable 45,156
The governmental fund reports capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense.(1,022)
Revenues in the Statement of Activities do not provide current financial resources and are not reported as revenues in the governmental fund:
Receipt of lease payment and earned finance charge (675,000) Under the modified accrual basis of accounting used in the governmental fund, revenues are recognized when the resources are measurable and become available, and interest on long-term debt is not recognized until it is due.
However, in the Statement of Activities revenues and changes in interest revenue and interest expenses are recognized in the current fiscal year:
Accrued lease interest receivable under the accrual method versus the modified accrual method (3,882)
Interest expense recorded under the accrual method versus the modified accrual method 4,735
Change in net position of governmental activities 43,125$ 14 BELLFLOWER FINANCING AUTHORITY
RECONCILIATION OF THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
TO THE STATEMENT OF ACTIVITIES
For the fiscal year ended June 30, 2025
See accompanying notes to basic financial statements.
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NOTES TO BASIC FINANCIAL STATEMENTS
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15 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 1 REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES:
Financial Reporting Entity:
The Bellflower Financing Authority (Authority) was organized on June 26, 2006, by the City of Bellflower (the City) and the Bellflower Redevelopment Agency pursuant to the Joint Exercise of Powers Act (California Government Code Sections 6500, et seq.) to provide the financing of public capital improvements and other projects for revitalization of the City. The Authority is a component unit of the City and is accounted for in the Financing Authority Debt Service Fund and the Transportation Bond Project Debt Service Fund in the City’s financial statements.
The Authority functions as a separate entity and its policies are determined by the Board of Directors comprised solely of the members of the City Council. All staff work is performed by the officials and staff of the City or by consultants.
Basis of Presentation:
The accounting policies of the Authority conform to accounting principles generally accepted the United States of America as they are applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.
Government-Wide 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 nonfiduciary activities of the primary government (the Authority). 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 Authority’s activities are governmental; no business-type activities are reported in the statements.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are expenses that are clearly identifiable with a specific program, project, function or segment. The Authority does not allocate indirect expenses to functions in the Statement of Activities. Program revenues of the Authority 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.
Lease revenues and investment income and other items that are properly not included among program revenues are reported instead as general revenues.
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16 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 1 REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued):
Fund Financial Statements:
The accounts of the Authority are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures or expenses, as appropriate. Authority resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The Authority’s accounts are organized into one major fund as follows:
Major Governmental Fund:
The General Fund is used to account for the accumulation of resources for, and the payment of long-term debt principal, interest, and related costs.
The accounting and financial treatment applied to a fund is determined by its measurement focus.
All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balances for these funds, present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets.
Measurement Focus and Basis of Accounting:
The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements.
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government-wide financial statements. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources’ measurement focus only current assets, deferred outflows of resources, current liabilities, and deferred inflows of resources are generally included on their balance sheets. The reported fund balance (net current assets) is considered to be a measure of “available spendable resources”. Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. - 22 -
17 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 1 REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued):
Noncurrent portions of long-term receivables in governmental funds are reported on their balance sheets in spite of their spending measurement focus.
Recognition of governmental fund type revenues represented by noncurrent receivables are deferred inflows of resources until they become available.
Under the modified accrual basis of accounting, revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Authority considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Lease revenue and investment earnings are susceptible to accrual. Expenditures generally are recorded when a liability is incurred, except for principal and interest on long-term liabilities which are recognized as expenditures to the extent they have matured. Proceeds of long-term liabilities are reported as other financing sources. General capital asset acquisitions are reported as expenditures in governmental funds.
Deferred Outflows/Inflows of Resources:
In addition to assets, the Statement of Net Position and the 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 that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Authority does not have any deferred outflows of resources to report.
In addition to liabilities, the Statement of Net Position and the 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 future periods and will not be recognized as an inflow of resources (revenue) until that time. The Authority has two items that qualifies for reporting in this category on the Governmental Fund Balance Sheet consisting of unavailable revenue on lease financing and unavailable revenue on lease payments.
Budgets and Budgetary Accounting:
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for all governmental funds.
These budgets are revised by the Authority’s governing board and the Executive Director during the fiscal year, to give consideration to unanticipated income and expenditures.
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18 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 1 REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued):
Prior Year Data:
Selected information regarding the prior fiscal year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with generally accepted accounting principles in the United States of America. Accordingly, such information should be read in conjunction with the Authority’s prior fiscal year financial statements, from which this selected financial data was derived.
Use of Estimates:
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from the estimates.
Assets, Liabilities, and Equity:
Cash and Investments:
Cash includes all demand accounts, savings accounts, and certificates of deposits of the Authority. The Authority’s cash and investments, with the exception of cash and investments with fiscal agent, are pooled with the City to maximize the yield. Investments are reported in the accompanying financial statements at fair value which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Receivables:
In the government-wide statements, receivables consist of all revenues earned at fiscal year-end.
Major receivable balances for the governmental activities include lease charges. Under the financing method of accounting for the lease with the City, the minimum lease payable for the remaining term of the lease has been included in the assets of the Authority.
Capital Assets:
Capital assets, which include land and buildings and improvements, follow the City’s policy and are reported in the governmental activities column in the government-wide financial statements.
Capital assets are defined by the Authority as assets with a cost of $5,200 or more and an estimated useful life in excess of one year. Such capital assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The cost of normal maintenance and repairs that do not add to the value of the capital asset or materially extend capital asset lives are not capitalized. - 24 -
19 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 1 REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued):
Capital assets of the Authority are depreciated using the straight-line method over their estimated useful lives: The Authority only has buildings and improvements which have useful lives of 20 to 50 years.
Long-term Liabilities:
The accounting treatment of long-term liabilities depends on whether it is reported in the government-wide or fund financial statements.
All long-term liabilities to be repaid from governmental resources are reported as liabilities in the government-wide statements. The long-term liabilities consist of Certificates of Participation and a Note Payable.
Long-term liabilities for governmental funds are not reported as liabilities in the fund financial statements. The debt proceeds are reported as other financing sources and payment of principal, interest, and issuance costs are reported as expenditures.
Equity Classifications:
Government-wide Statements:
Equity is classified as net position which can be further classified as net investment in capital assets, restricted, or unrestricted.
Net investment in capital assets - consists of net position represented by the current net book value of the Authority’s capital assets, less the outstanding balance of any debt issued to finance these assets.
Restricted net position - consists of net position with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation.
Unrestricted - consists of net position which is not restricted or invested in capital assets.
Sometimes the Authority will fund outlays for a particular purpose from both restricted and unrestricted resources. In order to calculate the amounts to report as restricted - net position and unrestricted - net position in the government-wide financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the Authority’s practice to consider restricted - net position to have been depleted before unrestricted - net position is applied.
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20 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 1 REPORTING ENTITY AND SIGNIFICANT ACCOUNTING POLICIES (Continued):
Fund Statements:
Governmental fund equity is classified as fund balance. Fund balance is further classified as follows:
Nonspendable - amounts that cannot be spent either because they are in nonspendable form or because they are legally or contractually required to be maintained intact.
Restricted - amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments.
Committed - amounts that can be used only for specific purposes determined by a formal action of the governing board as the highest level of decision-making authority for the Authority.
Commitments may be established, modified, or rescinded only through resolutions approved by the governing board.
Assigned - amounts that do not meet the criteria to be classified as restricted or committed but that are intended to be used for specific purposes. Under the Authority’s adopted policy, only the governing board or director may assign amounts for specific purposes.
Unassigned - all other spendable amounts.
When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the Authority considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balance are available, the Authority considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the governing board has provided otherwise in its commitment or assignment actions.
Future Accounting Pronouncements:
The provisions of Statement Number 103 “Financial Reporting Model Improvements” are effective for fiscal years beginning after June 15, 2025.
The provisions of Statement Number 104 “Disclosure of Certain Capital Assets” are effective for fiscal years beginning after June 15, 2025.
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21 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 2 CASH AND INVESTMENTS:
The Authority’s cash and investments are pooled with the City with the exception of cash and investments with fiscal agents. Investment income earned on pooled cash and investments is allocated based on the average monthly cash balance in each fund.
Cash and investments as of June 30, 2025, are classified in the accompanying financial statements as follows:
Investments Authorized by the California Government Code and the Authority’s Investment Policy:
The table on the next page identifies the investment types that are authorized for the Authority by the California Government Code (or the Authority’s investment policy, where more restrictive).
The table also identifies certain provisions of the California Government Code (or the Authority’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the Authority, rather than the general provisions of the California Government Code or the Authority’s investment policy.
Statement of Net Position:
Cash and cash equivalents held by the
City of Bellflower 3,760$
Investments with fiscal agents 154
Total cash and investments 3,914$
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22 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 2 CASH AND INVESTMENTS (Continued):
Note: N/A – Not Applicable.
Investments Authorized by Debt Agreements:
Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the Authority’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity of Portfolio in One Issuer
Bankers' Acceptances 180 days 40% 30%
CalTRUST None None None
Certificates of Deposit 5 years None None
Commercial Paper 270 days 25% None
LAIF N/A None $75 million
Los Angeles County Treasury Pool None None None
Medium Term Notes, Prime Quality 5 years 30% None
Money Market Mutual Funds N/A None None
Mutual Funds, Prime Quality N/A 20% None
Negotiable Certificates of Deposit 5 years 30% 10%
Broker-assisted, Private Sector
Entity-Assisted, Certificates of Deposit 5 years 30% None Passbook Savings and Money Market
Accounts (Insured) None None None
State and Local Agency Obligations 5 years None None
United States Treasury Obligations 5 years None None
United States Government Sponsored
Agency Securities 5 years None None
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23 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 2 CASH AND INVESTMENTS (Continued):
Disclosures Relating to Interest Rate Risk:
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the Authority manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flows and liquidity needed for operations. The Authority had no investments as of June 30, 2025.
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations:
The Authority has no investments (including investments held by bond trustees) that are highly sensitive to interest rate fluctuations.
Disclosures Relating to Credit Risk:
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The Authority had no investments as of June 30, 2025.
Concentration of Credit Risk:
The investment policy of the Authority contains limitations on the amount that can be invested in any one issuer. No investments in any one issuer represents 5% or more of total Authority investments.
Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity of Portfolio in One Issuer
Certificates of Deposit with Banks or Savings
& Loans None None None
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Municipal Obligations None None None
Banker's Acceptances, Prime Quality 360 days None None
Commercial Paper, Prime Quality 270 days None None
Money Market Mutual Funds N/A None None
Investment Contracts None None None
Local Agency Investment Fund (State Pool) None None None - 29 -
24 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 2 CASH AND INVESTMENTS (Continued):
Custodial Credit Risk:
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the Authority’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits. The California Government Code requires that a financial institution secure deposit made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure Authority deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. The Authority pools its cash with the City of Bellflower except for cash with fiscal agents.
Fair Value Measurements:
The Authority categorizes its fair value measurement 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 assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are significant other observable inputs, and Level 3 inputs are significant unobservable inputs.
The Authority had no investments subject to the fair value hierarchy as of June 30, 2025.
NOTE 3 PUMPING STATION LEASE RECEIVABLE:
The Authority recognized a lease in accordance with Governmental Accounting Standards Account Statement No. 87 “Leases”. At June 30, 2025, the Authority recorded a lease receivable and a deferred inflow of resources in the amount of $193,324.
In July 2020, the Authority entered into a land lease with Cardinal Pipeline, LP for usage of real property for a booster pumping station commencing on May 1, 2020. The lease was retroactive to April 20, 2015, and will remain in place until July 13, 2025. At the sole discretion of the Authority, the lease may be extended for an additional five years with the lease expiring in May 2030. Commencing on May 1, 2020, the rent increased by the annual increase in the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage and Clerical Wages (1982-1984=100) in Los Angeles – Long Beach – Anaheim area for the month of February of the anniversary year with a maximum increase of 5%. Payments received during the fiscal year were $3,637 per month from July 2024 through April 2025 and $3,760 per month in May 2025 and June 2025.
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25 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 3 PUMPING STATION LEASE RECEIVABLE (CONTINUED):
The payment schedule for the pumping lease receivable is as follows:
NOTE 4 2021 COP LEASE RECEIVABLE:
The 2021 Certificates of Participation (COPs) issued by the Authority and outstanding at June 30, 2025 bear interest at 2.30% per annum. The transportation portion remains outstanding and will mature on October 1, 2032, while the water system portion was fully retired during fiscal year 2022-2023. The Certificates represent undivided proportionate interests of the Owners in certain lease payments, to be made by the City to the Authority. The City shall sublease from the Authority a leasehold interest in the Civic Center Property and Thompson Park. The balance outstanding as of June 30, 2025, was $5,995,000.
Future estimated minimum lease payments to be received are as follows:
Fiscal years
Ending June 30, Principal Interest Total
2026 33,798$ 7,119$ 40,917$
2027 35,776 5,732 41,508
2028 37,843 4,263 42,106
2029 40,004 2,710 42,714
2030 45,903 1,081 46,984
193,324$ 20,905$ 214,229$
Pumping Station Lease Receivable
Fiscal years
Ending
June 30, Total
2026 819,950$
2027 818,908
2028 822,463
2029 820,615
2030 823,365
2031-2033 2,457,743
Total investment in lease 6,563,044
Less amount representing interest (568,044)
Net investment in lease 5,995,000$
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26 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 5 CAPITAL ASSETS:
A summary of changes in the Governmental Activities capital assets at June 30, 2025 is as follows:
Governmental Activities:
NOTE 6 LONG-TERM LIABILITIES:
The following is a summary of changes in the long-term debt for the fiscal year ended June 30, 2025:
Balance Balance
June 30, 2024 June 30, 2025
Capital assets, not being depreciated:
Land $ 948,941 $ - $ - $ 948,941 Total capital assets, not
being depreciated 948,941 - - 948,941 Capital assets, being depreciated:
Buildings and improvements 51,075 - - 51,075 Total capital assets,
being depreciated 51,075 - - 51,075 Less accumulated depreciation for:
Buildings and improvements (9,366) (1,022) - (10,388) Total accumulated depreciation (9,366) (1,022) - (10,388) Total capital assets,
being depreciated, net 41,709 (1,022) - 40,687 Total governmental activities
capital assets, net $ 990,650 $ (1,022) $ - $ 989,628 Additions Deletions
Balance at Balance at Due Within
Governmental Activities June 30, 2024 Increase Decrease June 30, 2025 One Year 2021 Certificates of Participation 6,670,000$ -$ (675,000)$ 5,995,000$ 690,000$ Subtotal 6,670,000 - (675,000) 5,995,000 690,000 Note Payable - Direct Borrowing 703,971 - (45,156) 658,815 48,189 Total long-term liabilities 7,373,971$ -$ (720,156)$ 6,653,815$ 738,189$ - 32 -
27 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 6 LONG TERM LIABILITIES (Continued):
Debt service requirements on long-term debt at June 30, 2025, are as follows:
2021 Certificates of Participation:
On February 22, 2021, the Bellflower Financing Authority (Authority) issued the 2021 Certificates of Participation in the amount of $14,760,000 to pay off the 2008 Certificates of Participation, the 2018 Certificates of Participation, and to pay the costs of issuance of the 2021 Refunding Certificates of Participation.
The Authority assisted the City to (a) finance the costs of acquiring the City’s water system through the execution and delivery of the City of Bellflower 2008 Certificates of Participation (Water System) and (b) finance the Regional Transit Center and Parking Structure through the execution and delivery of the City of Bellflower 2018 Certificates of Participation (Regional Transit and Parking Structure) and the Authority and the City have entered into a lease agreement dated February 1, 2021 to lease certain property consisting of the City’s Civic Center and Thompson Park to the Authority. The City has agreed to lease the real property consisting of the land and building comprising the City’s Civic Center.
The 2021 Refunding Certificates of Participation shall mature on October 1, 2038, and shall bear interest at the rate of 2.30% per annum (see below). The certificates maturing on October 1, 2038, shall be subject to mandatory sinking fund prepayment prior to maturity at a prepayment price equal to the principal amount to be repaid plus accrued interest with respect thereto to the prepayment date, on October 1 of each year, commencing October 1, 2021.
The 2021 Refunding Certificates of Participation may be prepaid before maturity on any date on or after April 1, 2031, at the option of the City exercised by notification at least 30 days prior to the scheduled prepayment date. In addition, an amount not exceeding 90% of then outstanding principal amount may be prepaid in whole or in part before the maturity on any date, at the option of the City, from money obtained by the City from the full or any partial sale of the City’s water system with at least 30 days prior notification. In November 2022, the sale of the City of Bellflower’s Municipal Water System (MWS) infrastructure assets was completed and $5.5 million of the proceeds was used to pay off the MWS portion of the 2021 Certificates of Participation (COPs). The balance of the 2021 Certificate of Participation is $5,995,000 at June 30, 2025. The remaining Certificates mature October 1, 2032. In the event of a default of the principal and interest due, the COP owners may request that the trustee re-let the leased premises.
Fiscal Years Fiscal Years
Ending June 30, Principal Interest Total Ending June 30, Principal Interest Total 2026 690,000$ 129,950$ 819,950$ 2026 48,189$ 26,800$ 74,989$ 2027 705,000 113,908 818,908 2027 51,307 24,792 76,099 2028 725,000 97,463 822,463 2028 54,586 22,654 77,240 2029 740,000 80,615 820,615 2029 58,031 20,379 78,410 2030 760,000 63,365 823,365 2030 61,639 17,960 79,599 2031-2033 2,375,000 82,743 2,457,743 2031-2035 369,022 47,986 417,008 2036 16,041 330 16,371
5,995,000$ 568,044$ 6,563,044$ 658,815$ 160,901$ 819,716$ Note Direct Borrowing2021 Certificates of Participation - 33 -
28 BELLFLOWER FINANCING AUTHORITY
NOTES TO BASIC FINANCIAL STATEMENTS
June 30, 2025
NOTE 6 LONG TERM LIABILITIES (Continued):
Note Payable:
On March 31, 2015, the City executed a promissory note with MTB Enterprises, LLC for $995,000 to purchase real property for the Butterfly Garden. The note is secured by a deed of trust on the purchased property. Interest accrues at the annual rate of 4.125% with principal and interest payments due on July 15, and January 15 of each fiscal year. In the event that during the term of the loan the total rental income received by the City from the sign lease and the pumping station lease on the property for any calendar year exceeds $61,004, then the excess rent will be paid by the City to MTB Enterprises, LLC to apply to the principal of the loan on or before February 15th of the year following the receipt of the excess rent. The City’s last one or more payments will be reduced to reflect that reduction in principal. The excess rent collected in fiscal year 2024- 2025 that was paid in addition to the pre-determined principal amount was $10,219. The loan balance as of June 30, 2025 was $658,815.
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REQUIRED SUPPLEMENTARY INFORMATION
- 35 -
Variance
with Final
Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Lease revenue 895,648$ 895,648$ 890,385$ (5,263)$ Other revenue - City of Bellflower 871 1,947 1,947 - Investment earnings 500 500 2,262 1,762 Total Revenues 897,019 898,095 894,594 (3,501)
EXPENDITURES
Debt service:
Principal payments 719,175 720,156 720,156 - Interest and fiscal charges 177,344 177,344 176,300 1,044 Total Expenditures 896,519 897,500 896,456 1,044 Net Change in Fund Balance 500 595 (1,862) (2,457) Fund Balance, Beginning of Fiscal year 2,016 2,016 2,016 - Fund Balance, End of Fiscal Year 2,516$ 2,611$ 154$ (2,457)$ For the fiscal year ended June 30, 2025
29 BELLFLOWER FINANCING AUTHORITY
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
Budgeted Amounts
GENERAL FUND
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OTHER SUPPLEMENTAL INFORMATION
- 37 -
Transportation
Bond
Project
REVENUES
Lease revenue 818,494$
Investment earnings 2,262
Total revenues 820,756
EXPENDITURES
Principal retirement 675,000
Interest and other charges 147,618
Total expenditures 822,618
Net change in activity (1,862)$
For the fiscal year ended June 30, 2025
BELLFLOWER FINANCING AUTHORITY
TRANSPORTATION BONDS PROJECT SUPPLEMENTAL SCHEDULE
30 - 38 -
31 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS
PARTNERS COMMERCIAL ACCOUNTING & TAX SERVICES GOVERNMENTAL AUDIT SERVICES CRAIG A HARTZHEIM, CPA 8383 WILSHIRE BLVD., SUITE 800 5800 HANNUM AVE., SUITE E HADLEY Y HUI, CPA BEVERLY HILLS, CA 90211 CULVER CITY, CA 90230 ADAM V GUISE, CPA TEL: 310.670.2745 TEL: 310.670.2745
TRAVIS J HOLE, CPA FAX: 310.670.1689 FAX: 310.670.1689 WILSON LAM, CPA www.mlhcpas.com www.mlhcpas.com
INDEPENDENT AUDITOR’S 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
The Honorable Board of Directors of the
Bellflower Financing Authority
Bellflower, 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 and the major fund of the Bellflower Financing Authority (the Authority), as of and for the fiscal year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements, and have issued our report thereon dated December 15, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Authority's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority'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 Authority’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 or significant deficiencies may exist that have not been identified.
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32 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Authority's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. 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.
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 Authority’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 Authority’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Moss, Levy & Hartzheim, LLP
Culver City, California
December 15, 2025
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