DESCRIPTION OF REPORTS
The financial reports and management compliance letter for the year ending June 30, 2023 are briefly described below:
Annual Financial Report
The annual financial statement is a comprehensive document reflecting the financial position of the City and its component units. The Auditors issued an unqualified (or clean) opinion on these financial statements.
Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards No material weakness in internal control was noted by the Auditors.
The Auditors' Communications with the Audit Committee and the Chair and Board Members
Statement of Auditing Standards (SAS) No. 114 requires more and documented communications between the auditors and the Audit Committee and the Chair and Board Members. This letter provides an opportunity for the auditors to report on any difficulties or major concerns discovered during the audit and to further define their role. They provide commentary on management's responsibilities for accounting policies and estimates that no significant difficulties were encountered in performing the audit, and no disagreements occurred with management. They point out that management has corrected all known material misstatements.
Fiscal Impact
There is no fiscal impact as result of this action.
SUCCESSOR AGENCY TO
THE INDUSTRY URBAN-DEVELOPMENT AGENCY
(A COMPONENT UNIT OF THE CITY OF INDUSTRY)
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2023
Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Financial Statements
For the Year Ended June 30, 2023
TABLE OF CONTENTS
Independent Auditor's Report ....1
Financial Statements:
Government-Wide Financial Statements:
Statement of Fiduciary Net Position .. 4
Statement of Changes in Net Position - Fiduciary Funds ..5 Notes To Financial Statements ..6
R ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
735 E. Carnegie Dr. Suite 100
San Bernardino, CA 92408 Independent Auditor's Report
909 889 0871 T
909889 5361 F
ramscpa.net
Honorable City Council
Successor Agency to Industry Urban-Development Agency
Industry, California
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CGMA
Bradferd A. Welebir, CPA. MBA, CGMA
Jenny W. Liu, CPA, MST Report on the Audit of the Financial Statements Gardenya Duran, CPA, CGMA
Brianna Schultz, CPA, CMA Opinion
Brenda L. Odle, CPA, MST (Partner Emeritus)
Terry P. Shea, CPA (Partner Emeritus)
We have audited the financial statements of the Successor Agency to Industry Urban-Development Agency (the SA to IUDA) (a component unit of the City of Industry), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which MANAGERS / STAFF collectively comprise SA's to IUDA basic financial statements as Seong-Hyea Lee, CPA, MBA listed in the table of contents.
Evelyn Morentin-Barcena, CPA
Veronica Hernandez, CPA
Laura Arvizu, CPA In our opinion, the accompanying financial statements referred to John Maldonado, CPA, MSA above present fairly, in all material respects, the financial position of Julia Rodriguez Fuentes, CPA, MSA the SA to IUDA, as of June 30, 2023, and the changes in financial Demi Hite, CPA position for the year then ended in accordance with accounting Jeffrey McKennan, CPA principles generally accepted in the United States of America.
Monica Wysocki, CPA
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the MEMBERS standards applicable to financial audits contained in Government American Institute of
Certified Public Accountants Auditing Standards, issued by the Comptroller General of the United PCPS The AICPA Alliance States. Our responsibilities under those standards are further for CPA Firms described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be Guntry centel Audie independent of SA to IUDA and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements Cellied Sociencountants relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Proud Member of
AlliottGlobalAlliance™
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STABILITY. ACCURACY. TRUST.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the 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 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 SA to IUDA'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 opinion. 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 GAAS 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 GAAS 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 SA to IUDA'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 SA to IUDA'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. -2-
Required Supplementary Information
Management has omitted management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic tinancial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 12, 2024 on our consideration of the SA to IUDA'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 solely 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 effectiveness of 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 SA to IUDA's internal control over financial reporting and compliance.
Rogers, Anderson, Malody a leott, LLP.
San Bernardino, California
March 12, 2024
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Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Statement of Fiduciary Net Position
June 30, 2023
Private-Purpose
Trust Fund
ASSETS
Current assets:
Cash $ 2,680,138
Investments 87,292,432
Accounts receivable 5,165,216
Interest receivable 1,082, 190
Noncurrent assets:
Property held for sale or disposition 50,064,421
Restricted assets:
Investments 42,751,768
Investments with fiscal agent 11,023,937
Capital assets, net of depreciation 190,603,084
Total assets 390,663,186
LIABILITIES
Current liabilities:
Accounts payable 9,524,88
Total current liabilities 9.524.88
NET POSITION
Restricted for Successor Agency $ 371,138,302
The accompanying notes are an integral part of these financial statements.
Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Statement of Changes in Net Position
Fiduciary Funds
For the Year Ended June 30, 2023
Private-Purpose
Trust Fund
ADDITIONS
Revenues from use of money and property:
Investment income $ 3,819,700
Rental and other income 21,836,673
Other revenues 10,896
Total additions 25,667,269
DEDUCTIONS
General administration 215,863
Project expenses 194,895,804
Bond interest expense 119,944
Total deductions 195,231,611
Changes in net position (169,564,342)
NET POSITION
Beginning of year 540,702,644
End of year $ 371,138,302
The accompanying notes are an integral part of these financial statements.
Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Reporting Agency
The Industry Urban Development Agency (the IUDA) was a component unit and an integral part of the City of Industry (the City.) On December 29, 2011, the California Supreme Court upheld Assembly Bill XI 26 (referred to as the Bill) that provides for the dissolution of all redevelopment agencies in the state of California. This action impacted the reporting entity of the City that previously had reported a redevelopment agency blended component unit.
The Bill provides that upon dissolution of a redevelopment agency, either the City or another unit of local government will agree to serve as the successor agency to hold the assets until they are distributed to the other units of state and local government. The City has elected to become the successor agency to the Industry Urban Development Agency (the SA to IUDA).
The City and the successor agency have separate boards of directors. However, individuals serving on the City Council also serve on the successor agency board. The successor agency is a component unit of the City that is fiduciary in nature and is reported in the statements of fiduciary net position and changes in fiduciary net position within the City's fiduciary funds.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the state of California cannot enter into new projects, obligations, or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
Successor agencies are allocated revenue only in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated
Basis of Accounting
The financial statements of the SA to IUDA have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) as applicable to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles.
The financial statements include a statement of fiduciary net position and a statement of changes in fiduciary net position. These statements are presented on the accrual basis of accounting.
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Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Investments
Cash includes cash on hand and demand deposits and is carried at cost. Investments are reported at fair value other than money market funds which are reported at amortized cost, which approximates fair value. Changes in fair value that occur during the fiscal year are recognized as investment income for that fiscal year.
Redevelopment Property Tax Revenues
Pursuant to the redevelopment dissolution law, funds that would have been distributed to the former agency as tax increment, hereafter referred to as redevelopment property tax revenues, are deposited into the SA to IUDA's Redevelopment Property Tax Trust Fund (Trust Fund) administered by Los Angeles County's Auditor-Controller for the benefit of holders of the former IUDA's enforceable obligations and the taxing entities that receive pass-through payments. Any remaining funds in the Trust Fund, plus any unencumbered redevelopment cash and funds from asset sales, are distributed by the County to the local agencies in the project area unless needed to pay enforceable obligations.
Distributions are to be made twice each year on the following cycles:
Covers Recognized Obligation
Distribution dates Payment Schedules to be paid
January 2 January 1 through June 30
June 1 July 1 through December 1
The amounts distributed for Recognized Obligation Payment Schedules (ROPS) are forward looking to the next six-month period.
Tax Override Monies
On September 26, 2013, pursuant to Resolution No. CC 2013-25, the City has established a segregated fund in the treasury designated the Agency Override Fund and shall deposit all Agency Override Portion received by the City into the Agency Override Fund. Upon notification by the SA to IUDA of the debt service shortfall, the City shall apply the necessary amount (but only to the extent available) from the Agency Override Fund to pay the bond trustee or, to the extent that there is no trustee for any bond issue, the bondholders directly, to cover the debt service shortfall. So long as the IUDA bonds remain outstanding, the City shall make withdrawals from the Agency Override Fund solely for the purpose of covering debt service shortfalls. See Note 5 for further discussion.
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Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Capital Assets
The SA to IUDA has capital assets that it is holding until the assets are transitioned to entities that will be responsible for the maintenance of the assets. The SA to IUDA no longer records depreciation expense on these assets as these assets are not used in operations.
Property Held for Sale or Disposition
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from these estimates. Property held for resale represents land, structures and their related improvements that were acquired for resale in accordance with the objectives of the Redevelopment Projects and grants. These costs will be charged to current year project expenditures when the related land and structures are sold. Property held for resale is valued at the lower of cost or expected net realizable value.
Bond Issuance Costs and Premiums/Discounts
Bond premiums and discounts in the statement of fiduciary net position are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are recognized as expenses in the period incurred in the statement of changes in fiduciary net position.
Use of Estimates
The preparation of basic financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. -8-
Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 2 CASH AND INVESTMENTS
Cash and investments as of June 30, 2023, consisted of the following:
Cash $ 2,680,138
Investments 87,292,432
Investments - restricted 53,775,705
Total cash and investments $ 143,748,275
Cash:
Petty cash $ 500
Demand deposits 2,679,638
Investments 141,068,137
Total cash and investments $ 143,748,275
The amounts held as Investments - Restricted of $53,775,705, represent amounts specifically restricted to pay for project costs or bond payments to the City of Industry Public Facilities Authority.
Demand Deposits
The carrying amount of the SA to IUDA's cash deposits were $2,679,638 as of June 30, 2023.
Bank balances in excess of the FDIC limit are insured or collateralized with securities held by the pledging financial institutions in the SA to IUDA's name as discussed below.
The California Government Code requires California banks and savings and loan associations to secure the SA to IUDA's cash deposits by pledging securities as Collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the SA to IUDA's name.
The market value of pledged securities must equal at least 110% of the SA to IUDA's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the SA to IUDA's total cash deposits. The SA to IUDA may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). The SA to IUDA, however, has not waived the collateralization requirements. As of June 30, 2023, SA to IUDA's deposits are federally insured or collateralized.
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Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 2 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by SA to IUDA's Investment Policy Under provision of SA to IUDA's Investment Policy (the SA to UIDA follows the City of Industry policy), and in accordance with Section 53601 of the California Government Code, and Section 33603 of the Health and Safety Code, SA to IUDA may invest in the following types of investments:
Maximum Maximum
Maximum percentage investment
Authorized investment type maturity allowed in one issuer U.S. Treasury obligations 5 Years None None
U.S. Government sponsored
Enterprise securities 5 Years None None
State/Local Agency bonds 5 Years None None
Money market funds
(composed entirely of
security of U.S. Government
and agencies) N/A 20% None
Bankers acceptances 180 Days 40% 30%
Commercial paper 270 Days 25% 10%
Negotiable certificates of
deposit 5 Years 30% None
Nonnegotiable certificates of
deposit 5 Years None None
Local Agency Investment
Fund (LAIF) N/A None None
Repurchase agreements 1 Year None None
Los Angeles County
investment pool N/A None None
U.S. corporate medium term notes 5 Years 30% None
The SA to IUDA's investment policy does not contain any specific provisions intended to limit SA to IUDA's exposure to interest rate risk, credit risk, and concentration risk other than those specified in the California Government Code.
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Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 2 CASH AND INVESTMENTS (CONTINUED)
Investments Authorized by Debt Agreements
nvestments ot debt proceeds held by the bond trustee are governed by provisions of the deb greements. The debt agreement held by SA to IUDA and its bond trustees have investmen policies that are the same as SA to IUDA's general investment policy, as listed above.
SA to IUDA has monies held by trustees or fiscal agents pledged for the payment or security of tax allocation bonds. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of bonds, may be invested in accordance with the ordinances, resolutions or indentures specifying the types of investments its trustees or fiscal agents may make. These ordinances, resolutions and indentures are generally less restrictive than SA to IUDA's general investment policy. In no instance have additional types of investments, not permitted by SA to IUDA's general investment policy, been authorized.
Risk Disclosure
Interest Rate Risk
Interest rate risk is the risk of changes in market interest rates that 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 the market interest rates. One of the ways that SA to IUDA manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. SA to IUDA monitors the interest rate risk inherent in its portfolio by measuring the weighted average maturity of its portfolio.
Weighted
average
Investment type Amounts maturity
Investments:
LAIF $ 65,970,095 260 days
U.S. Treasury obligation 6,919,811 92 days
U.S. Agencies 8,553,783 310 days
Commercial paper 3,252,028 39 days
Money market funds 2,596,713 N/A
Investments - restricted:
Money market funds 42,751,768 N/A
Invested with fiscal agent:
Money market funds 11,023,939 N/A
Total investments $ 141,068,137
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Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 2 CASH AND INVESTMENTS (CONTINUED)
Risk Disclosure (Continued)
Credit Risk
Credit risk is generally the risk that an issuer of an investment will not fulfill its obligation to the Safety Code, SA to IUDA's investment policy, or debt agreements, and the actual rating as of year-end for each investment type.
Minimum Rating as of June 30, 2023
Investment type Amount legal rating Actual rating Rated Not rated LAIF $ 65,970,095 N/A $ 65,970,095
: 6,919,811
U.S. Treasury obligation 6,919,811 N/A
U.S. Agencies 8,553,783 A-1+ 8,553,783
Commercial paper 3,252,028 A-1+ 3,252,028
Money market funds 2,596,713 N/A 2,596,713
Investment - restricted:
Money market funds 42,751,768 N/A N/A 42,751,768
Invested with fiscal agent:
Money market funds 11,023,939 N/A N/A 11,023,939
Total investments $ 141,068,137 68,178,231 72.89,906
Concentration of Credit Risk
The investment policy of the SA to IUDA contain no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. As of June 30, 2023, the SA to IUDA held Federal Farm Credit securities with a fair value of $7,130,047 which is 5% or more of the total investments (other than U.S. Treasury obligations, mutual funds, and external investment pools).
State of California Local Agency Investment Fund
The SA to IUDA is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the SA to IUDA's investment in this pool is reported in the accompanying financial statements at amounts based upon the SA to IUDA's pro rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF.
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Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 2 CASH AND INVESTMENTS (CONTINUED)
Fair Value Measurement
The SA to IUDA categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the relative recurring fair value measurements as of June 30, 2023:
Measurement input
Investment type Level 1 Level 2 Uncategorized Total
Investments:
LAIF $ $ $ 65,970,095 $ 65,970,095
U.S. Treasury obligation 6,919,811 6,919,811
U.S. Agencies 8,553,783 8,553,783
Commercial papel 3,252,028 3,252,028
Money market funds : 2,596,713 2,596,713
Investment - restricted:
Money market funds 42,751,768 42,751,768
Invested with fiscal agent:
Money market funds 11,023,939 11,023,939
Total investments $ $18,725,622 $ 122,342,515 $141,068,137 -13-
Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 3 PROPERTY HELD FOR SALE OR DISPOSITION
The SA to IUDA has the following assets held for sale or disposition:
Balance at Balance at
July 1, 2022 Transfers Additions Deletions June 30, 2023 Property held for sale or disposition:
Land 50,064,421 $ $ 50,064,421 |
In addition, the SA to IUDA has the following capital assets as of June 30, 2023.
Balance at Balance at
July 1, 2022 Transfers Additions Deletions June 30, 2023 Capital assets, being depreciated:
Land 7,151,286 $ (351,286) $ $ (6,800,000) $
Construction in progress 179,961,287 10,480,284 190,441,571 Building and improvements 2,969,734 (2,969,734)
Infrastructure 204,294,396 351,286 : (204,479,372) 166,310 Less: accumulated depreciation (20,828,169) 20,823,372 (4,797) Capital assets, net $ 373,548,534 $ $ 10,480,284 $ (193,425,734) $ 190.603,084 During the current fiscal year, the SA to IUDA transferred assets with a net book value of $148,428,856 to the City of Industry.
Note 4 BONDS PAYABLE
A summary of changes in the SA to IUDA's bonds payable for the year ended June 30, 2023, is as follows:
Balance at Balance at Due within Due in more
July 1, 2022 _Additions Deletions June 30, 2023 one year than one year Direct placements:
Project Area 1:
2015 Tax Allocation
Revenue Refunding
Bonds, Series A $ 21,145,000 $ - $ (21,145,000) $ _ $
Total bonds payable $ 21,145,000 $ $ (21,145,000) $ - - $ 2015 Tax Allocation Revenue Refunding Bonds. Series A (Project No. 1) On July 1, 2015, the SA to IUDA issued the $239,525,000 Tax Allocation Revenue Refunding Bonds, Series 2015A (Civic-Recreational-Industrial Redevelopment Project No. 1) (Taxable) for the purpose to redeem all IUDA Project No. 1 outstanding 2002 Tax Allocation Refunding Bonds Series B, 2003 Tax Allocation Bonds, Series A, 2003 Tax Allocation Bonds, Series B, 2003 Subordinate Lien Tax Allocation Refunding Bonds, 2005 Subordinate Lien Tax Allocation Refunding Bonds, 2007 Subordinate Lien Tax Allocation Refunding Bonds, and 2008 Subordinate Lien Tax Allocation Refunding Bonds. The bonds were paid off during the current fiscal year.
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Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 5 RENTAL PROPERTY
On April 28, 2005, IUDA entered into an agreement with a private company (the Company) to sariting the page a he am i agent alice or are on the
In the event that rental income on the buildings is insufficient to repay any loans outstanding related to any financing of such building projects, and operation and maintenance of the various buildings, the SA to IUDA is required to contribute fifty percent for any shortfall as a capital contribution if the Company issues a demand for additional capital. Such payments if made by SA to lUDA on the projects would be subject to return by the Company with interest at the prime rate plus three percent provided that future rents generate revenue for SA to IUDA. During the year ended June 30, 2023, SA to IUDA earned and received $21,836,673 in rental income from the Company.
Note 6 SELF-INSURANCE PLAN
The City has established a Self-Insurance Plan (the Plan) to pay for liability claims against the City and SA to IUDA. The Plan is administered by an insurance committee which is responsible for approving all claims of $25,000 or less and for making provision to have sufficient funds available to pay approved claims and legal and investigative expenses. The insurance committee has vested this authority with the City Manager. Potential liability for claims in excess of $250,000 up to $10,000,000 is covered by excess liability insurance policies.
As of June 30, 2023, there are no pending claims outstanding against the SA to IUDA.
Note 7 COMMITMENT AND CONTINGENCIES
Risk Management
The SA to IUDA is exposed to various risks of loss related to torts, theft, damage to and destruction of assets, errors and omissions, and general liabilities. As further discussed in Note Project Commitments
As of June 30, 2023, the total net position held in trust was $371,138,300. All of the fiduciary net position are committed to fund project obligations.
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Successor Agency to the Industry Urban-Development Agency (A Component Unit of the City of Industry)
Notes to Financial Statements
June 30, 2023
Note 8 TRANSACTIONS WITH RELATED PARTIES
As of June 30, 2023, SA to IUDA had a net amount due to the City in the amount of $1,026,085.
This arose from administrative expenses incurred by the SA to IUDA and paid by the City. -16-
SUCCESSOR AGENCY TO THE INDUSTRY
URBAN-DEVELOPEMNT AGENCY
MARCH 14, 2024
ITEMS 4.9 AND 4.10
R
ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
735 E. Carnegie Dr. Suite 100
San Bernardino, CA 92408
909 889 0871 T
REPORT ON INTERNAL CONTROL OVER FINANCIAL
909 889 536 1 F
REPORTING AND ON COMPLIANCE AND OTHER MATTERS
ramnscpa.net
BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CMA
Bradferd A. Welebir, CPA. MBA, CGMA
Jenny W. Liu, CPA, MST Independent Auditor's Report
Gardenya Duran, CPA, CGMA
Brianna Schultz, CPA, CMA
To the Honorable City Council
Brenda L. Odle, CPA, MST (Partner Emeritus)
City of Industry
Terry P. Shea, CPA (Partner Emeritus)
We have audited, 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 MANAGERS / STAFF by the Comptroller General of the United States, the financial Seong-Hyea Lee, CPA, MBA
statements of the governmental activities, the business-type activities, Evelyn Morentin-Barcena, CPA
each major fund, and the aggregate remaining fund information of the Veronica Hemandez, CPA
Laura Arvizu, CPA City of Industry (the City) as of and for the year ended June 30, 2023, John Maldonado, CPA. MSA and the related notes to the financial statements, which collectively Julia Rodriguez Fuentes, CPA, MSA comprise the City's basic financial statements, and have issued our Demi Hite, CPA report thereon dated March 12, 2024.
Jeffrey McKennan, CPA
Monica Wysocki, CPA
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate MEMBERS in the circumstances for the purpose of expressing our opinions on the American Institute of
Certified Public Accountants financial statements, but not for the purpose of expressing an opinion PCPS The AICPA Alliance on the effectiveness of the City's internal control. Accordingly, we do for CPA Firms not express an opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of Called act ACcountants 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 entity's financial statements will not be prevented, or detected and Proud Member of corrected on a timely basis. A significant deficiency is a deficiency, ol AlliottGlobalAlliance" a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those - 1-
STABILITY. ACCURACY. TRUST.
To the Honorable City Council
City of Industry
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 were not identified.
We noted certain matters that we have reported to management of the City of Industry in a separated letter dated March 12, 2024.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. 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 entity'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 entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Rogers, Anderson, Malody e Leott, LLP.
San Bernardino, California
March 12, 2024
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R ROGERS, ANDERSON, MALODY & SCOTT, LLP
CERTIFIED PUBLIC ACCOUNTANTS, SINCE 1948
M S
735 E. Carnegie Dr. Suite 100
San Bernardino, CA 92408
909 889 0871 T
90895315
ramscpa.net
March 12, 2024
Scott W. Manno, CPA, CGMA
Leena Shanbhag, CPA, MST, CGMA
To the Honorable City Council
Bradferd A. Welebir, CPA, MBA. CGMA
Jenny W. Liu, CPA, MST City of Industry
Gardenya Duran, CPA, CMA
Brianna Schultz, CPA, CGMA
Brenda L. Odle, CPA, MST (Partner Emeritus) We have audited the financial statements of City of Industry (the City) as of Terry P. Shea, CPA (Partner Emeritus) and for the year ended June 30, 2023, and have issued our report thereon dated March 12, 2024. Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit
MANAGERS / STAFF
Seong-Hyea Lee, CPA, MBA As communicated in our engagement letter dated May 22, 2023, our Evelyn Morentin-Barcena, CPA responsibility, as described by professional standards, is to form and express Veronica Hernandez, CPA opinions about whether the financial statements that have been prepared by Laura Arvizu, CPA
management with your oversight are presented fairly, in all material respects, lohn Maldonado, CPA, MA
in accordance with accounting principles generally accepted in the United Julia Rodriguez Fuentes, CPA, MSA
States of America. Our audit of the financial statements does not relieve you Demi Hite, CPA
or management of your respective responsibilities.
Jeffrey McKennan, CPA
Monica Wysocki, CPA
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the MEMBERS circumstances, but not for the purpose of expressing an opinion on the American Institute of effectiveness of the City's internal control over financial reporting.
Certified Public Accountants cordingly, as part of our audit, we considered the internal control of the C PCPS The AICPA Alliance blely for the purpose of determinina our audit procedures and not to provi For CPA Firms any assurance concerning such internal control.
Guer end ruth. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities Collied Socie coumanis in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you
Proud Member of
Alliot GlobalAlliance™
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STABILITY. ACCURACY. TRUST.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, and our firm have complied with all relevant ethical requirements regarding independence.
Significant Risks Identified
We have identified the possibility of the following significant risks:
Management's override of internal controls over financial reporting: Management override of internal controls is the intervention by management in handling financial information and making decisions contrary to internal control policy.
Revenue recognition Revenue recognition is a generally accepted accounting principle that refers to the conditions under which an entity can recognize a transaction as revenue. Auditing standards indicate that recognizing revenue is a presumed fraud risk and usually classified as a significant risk in most audits.
These significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although identified as significant risks, we noted no matters of management override of controls or deviations from generally accepted accounting principles which caused us to modify our audit procedures or any related matters which are required to be communicated to those charged with governance due to these identified risks.
Qualitative Aspects of the City's Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during fiscal vear 2023. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management's current judgments.
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The most sensitive accounting estimates affecting the financial statements are:
Management's estimate of the fair value of investments is based on information provided by financial institutions. We evaluated the key factors and assumptions used to develop the fair value of investments in determining that it is reasonable in relation to the financial statements taken as a whole.
Management's estimate of the depreciation expense is based on historical estimates of each capitalized item's useful life. We evaluated the key factors and assumptions used to develop the estimated useful lives in determining that it is reasonable in relation to the financial statements taken as a whole.
The estimate of the net pension liability is based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate ir determining that it is reasonable in relation to the statements taken as a whole.
The estimate of the total OPEB liability is based on actuarial reports provided by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the statements taken as a whole.
Management's estimate of leases receivable, deferred inflows of resources related to leases, and lease amortization is based on present value calculations using certain terms and assumptions in the lease agreements in accordance with generally accepted accounting principles. We evaluated the key factors and assumptions used to develop the lease related estimates in determining that it is reasonable in relation to the financial statements taken as a whole.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City's financial statements relate to:
The disclosure of the fair value of investments in the notes to the financial statements represents amounts susceptible to market fluctuations.
The disclosure of accumulated depreciation in the notes to the financial statements is based on estimated useful lives which could differ from actual useful lives of each capitalized item.
The disclosure of net pension liability and related deferred inflows and outflows in the notes to the financial statements is based on actuarial assumptions. Actual future liabilities may vary from disclosed estimates.
The disclosure of net OPE liability and related deferred inflows and outflows in the notes to the financial statements is based on actuarial assumptions. Actual future liabilities may vary from disclosed estimates.
The disclosure of leases receivable, deferred inflows of resources related to leases, and lease amortization in the basic financial statements is based on certain terms and assumptions in the lease agreements which could differ from actual amounts.
The financial statement disclosures are neutral, consistent, and clear. -3-
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate nem to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. We did not identify any uncorrected misstatements.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City's financial statements or the auditor's report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated March 12, 2024.
Management's Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City's auditors.
Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information in documents containing the City's audited financial statements does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.
However, in accordance with such standards:
We applied certain limited procedures to the required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
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We were engaged to report on the supplementary information, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.
This information is intended solely for the use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
Rogers, Anderson, Malody e Scott, LLP.
San Bernardino, California
March 12, 2024
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March 12, 2024
Rogers, Anderson, Malody & Scott, LLP
735 E Carnegie Drive, Suite 100
San Bernardino, Ca 92408
This representation letter is provided in connection with your audit of the basic financial statements of the City of Industry (the City) as of June 30, 2023, and for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions on whether the basic financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows, where applicable, of the various opinion units of the City in accordance with accounting principles generally accepted for governments in the United States of America (U.S. GAAP).
Certain representations in this letter are described as being limited to matters that are material.
Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.
We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves as of March 12, 2024:
Financial Statements
• We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated May 22, 2023, for the preparation and fair presentation of the financial statements of the various opinion units referred to above in accordance with U.S. GAAP. • We acknowledge our responsibility 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. • We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
• We acknowledge our responsibility for compliance with the laws, regulations, and provisions of contracts and grant agreements.
• We have reviewed, approved and taken responsibility for the financial statements and related notes.
• We have a process to track the status of audit findings and recommendations. • We have identified and communicated to you all previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented.
• The methods, data, and significant assumptions used by us in making accounting estimates and their related disclosures, are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of the applicable financial reporting framework.
Rogers, Anderson, Malody & Scott, LLP
• All related party relationships and transactions have been appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. • All events subsequent to the date of the financial statements and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed. • The effects of uncorrected misstatements summarized in the attached schedule and aggregated by you during the current engagement are immaterial, both individually and in the aggregate, to the applicable opinion units and to the financial statements as a whole. • The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP.
• All component units, as well as joint ventures with an equity interest, are included and other joint ventures and related organizations are properly disclosed • All funds and activities are properly classified.
• All funds that meet the quantitative criteria in GASB Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, GASB Statement No. 37, Basic Financial Statements-and Management's Discussion and Analysis—for State and Local Governments: Omnibus as amended, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, for presentation as major are identified and presented as such and all other funds that are presented as major are considered important to financial statement users. • All components of net position, nonspendable fund balance, and restricted, committed, assigned, and unassigned fund balance are properly classified and, if applicable, approved.
• Our policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position/fund balance are available is appropriately disclosed and net position/fund balance is properly recognized under the policy.
• All revenues within the statement of activities have been properly classified as program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal.
• All expenses have been properly classified in or allocated to functions and programs in the statement of activities, and allocations, if any, have been made on a reasonable basis. • All interfund and intra-entity transactions and balances have been properly classified and reported.
• Special items and extraordinary items have been properly classified and reported. • Deposit and investment risks have been properly and fully disclosed. • Capital assets, including infrastructure assets, are properly capitalized, reported, and if applicable, depreciated.
• All required supplementary information is measured and presented within the prescribed guidelines.
• We have evaluated all of our lease agreements and have given you our assessment as to whether each lease agreement is subject to GASB Statement No. 87, Leases, and GASB Statement No. 96, Subscription-Based Information Technology Arrangements.
Rogers, Anderson, Malody & Scott, LLP
• With regard to investments and other instruments reported at fair value:
• The underlying assumptions are reasonable and they appropriately reflect management's intent and ability to carry out its stated courses of action. • The measurement methods and related assumptions used in determining fair value are appropriate in the circumstances and have been consistently applied. • The disclosures related to fair values are complete, adequate, and in accordance with U.S. GAAP.
• There are no subsequent events that require adjustments to the fair value measurements and disclosures included in the financial statements. • With respect to financial statement preparation, we have performed the following:
- Made all management decisions and performed all management functions; - Assigned a competent individual to oversee the services; - Evaluated the adequacy of the services performed;
Evaluated and accepted responsibility for the result of the service performed; and - Established and maintained internal controls, including monitoring ongoing activities.
Information Provided
• We have provided you with:
• Access to all information, of which we are aware that is relevant to the preparation and fair presentation of the financial statements of the various opinion units referred to above, such as records, documentation, meeting minutes, and other matters;
• Additional information that you have requested from us for the purpose of the audit; and
o Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence.
• The financial statements and any other information included in the annual report are consistent with one another, and the other information does not contain any material misstatements.
• All transactions have been recorded in the accounting records and are reflected in the financial statements.
• We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud. • We have provided to you our analysis of the entity's ability to continue as a going concern, including significant conditions and events present, and if necessary, our analysis of management's plans, and our ability to achieve those plans. • We have no knowledge of any fraud or suspected fraud that affects the entity and involves:
• Management;
• Employees who have significant roles in internal control; or • Others where the fraud could have a material effect on the financial statements.
Rogers, Anderson, Malody & Scott, LLP
• We have no knowledge of any allegations of fraud, or suspected fraud, affecting the entity's financial statements communicated by employees, former employees, vendors, regulators, or others.
• We are not aware of any pending or threatened litigation, claims, and assessments whose effects should be considered when preparing the financial statements. • We have disclosed to you the identity of the entity's related parties and all the related party relationships and transactions of which we are aware.
• There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in accounting, internal control, or financial reporting practices.
• The City has no plans or intentions that may materially affect the carrying value or classification of assets and liabilities.
• We have disclosed to you all guarantees, whether written or oral, under which the City is contingently liable.
• We have disclosed to you all nonexchange financial guarantees, under which we are obligated and have declared liabilities and disclosed properly in accordance with GASB Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, for those guarantees where it is more likely than not that the entity will make a payment on any guarantee.
• For nonexchange financial guarantees where we have declared liabilities, the amount of the liability recognized is the discounted present value of the best estimate of the future outflows expected to be incurred as a result of the guarantee. Where there was no best estimate but a range of estimated future outflows has been established, we have recognized the minimum amount within the range.
• We have disclosed to you all significant estimates and material concentrations known to management that are required to be disclosed in accordance with GASB Statement No. 62 (GASB-62), Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and A/CPA Pronouncements. Significant estimates are estimates at the balance sheet date that could change materially within the next year.
Concentrations refer to volumes of business, revenues, available sources of supply, or markets or geographic areas for which events could occur that would significantly disrupt normal finances within the next year.
• We have identified and disclosed to you the laws, regulations, and provisions of contracts and grant agreements that could have a direct and material effect on financial statement amounts, including legal and contractual provisions for reporting specific activities in separate funds.
• There are no:
• Violations or possible violations of laws or regulations, or provisions of contracts or grant agreements whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, including applicable budget laws and regulations.
Unasserted claims or assessments that our lawyer has advised are probable of assertion and must be disclosed in accordance with GASB-62.
Rogers, Anderson, Malody & Scott, LLP
• Other liabilities or gain or loss contingencies that are required to be accrued or disclosed by GASB-62
• Continuing disclosure consent decree agreements or filings with the Securities and Exchange Commission and we have filed updates on a timely basis in accordance with the agreements (Rule 240, 15c2-12).
• The City has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset or future revenue been pledged as collateral, except as disclosed to you.
• We have complied with all aspects of grant agreements and other contractual agreements that would have a material effect on the financial statements in the event of noncompliance.
• There have been no changes or updates to legal information disclosed to you by our attorney's since the date of such legal response and now.
Supplementary Information in Relation to the Financial Statements as a Whole With respect to supplementary information accompanying the financial statements:
• We acknowledge our responsibility for the presentation of the supplementary information in accordance with accounting principles generally accepted in the United States of America.
• We believe the supplementary information, including its form and content, is fairly presented in accordance with accounting principles generally accepted in the United States of America.
• The methods of measurement or presentation have not changed from those used in the prior period.
• We believe any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances. • When the supplementary information is not presented with the audited financial statements, management will make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor's report thereon. • We acknowledge our responsibility to include the auditor's report on the supplementary information in any document containing the supplementary information and that indicates the auditor reported on such supplementary information. • We acknowledge our responsibility to present the supplementary information with the audited financial statements or, if the supplementary information will not be presented with the audited financial statements, to make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance by the entity of the supplementary information and the auditor's report thereon.
Required Supplementary Information
With respect to the required supplementary information accompanying the financial statements:
• We acknowledge our responsibility for the presentation of the required supplementary information in accordance with U.S. GAAP.
Rogers, Anderson, Malody & Scott, LLP
• We believe the required supplementary information, including its form and content, is measured and fairly presented in accordance with U.S. GAAP. • The methods of measurement or presentation have not changed from those used in the prior period.
• We believe the significant assumptions or interpretations underlying the measurement or presentation of the required supplementary information, and the basis for our assumptions and interpretations, are reasonable and appropriate in the circumstances.
Palhat
Signature: Signature: _
THe: City Manager Tie: Finance Director