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City of Huntington Be ach
Comprehensive Annual
Financial Report
with Report on Audit by
Independent Certified Public Accountants
for the Year Ended
September 30 , 2003
p repared by the
Administrative Services Department
2nttoductot Cliection
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COMPREHENSIVE ANNUAL FINANCIAL
REPORT
YEAR ENDED SEPTEMBER 30, 2003
TABLE OF CONTENTS
INTRODUCTORY SECTION
Table of Contents
Letter of Transmittal iii-ix
City Officials x
Organizational Chart A
Financial Reporting Certificate A
FINANCIAL SECTION
Independent Auditors' Report 1-2
Management Discussion and Analysis 3-15
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Assets 16
Statement of Activities and Changes in Net Assets 17
Fund Financial Statements:
Balance Sheet—Governmental Funds 18
Reconciliation of the Balance of Governmental Funds to the Statement of Net 19
Assets
Statement of Revenues, Expenditures and Changes in Fund Balances— 20
Governmental Funds
Reconciliation of the Statement of Revenues, Expenditures, and Changes in 21
Fund Balances of Governmental Funds to the Statement of Activities
Statement of Net Assets— Proprietary Funds 22
Statement of Revenues, Expenses and Changes in Fund Net Assets— 23
Proprietary Funds
Statement of Cash Flows— Proprietary Funds 24
Statement of Fiduciary Fund Net Assets 25
Statement of Changes in Fiduciary Fund Net Assets-Trust Funds 25
Notes to Financial Statements 26-70
Required Supplementary Information:
Budgetary Information 71
Schedule of Revenues, Expenditures and and Changes in Fund Balances— 72
Budget and Actual—General Fund
Schedule of Revenues, Expenditures and and Changes in Fund Balances— 73
Budget and Actual—Grants Fund
Schedule of Funding Progress (Normal and Supplemental Retirement Plans) 74
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Supplementary Information:
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet—Nonmajor Governmental Funds 75-78
Combining Statement of Revenues, Expenditures, and Changes in Fund 79-81
Balances— Nonma'or Governmental Funds
Schedule of Revenues, Expenditures, and Changes in Fund Balances— 82-88
Budget and Actual—Non Major Governmental Funds
Schedule of Revenues, Expenditures, and Changes in Fund Balances— 89-90
Budget and Actual—Major Debt Service and Capital Projects Funds
Combining Statement of Net Assets—Nonma'or Enterprise Funds 91
Combining Statement of Revenues, Expenses, and Changes in Net Assets- 92
Nonma'or Enterprise Funds
Combining Statement of Cash Flows—Nonma'or Enterprise Funds 93
Combining Statement of Revenues, Expenses, and Changes in Net Assets- 94
Nonma'or Internal Service Funds
Combining Statement of Cash Flows—Nonma'or Internal Service Funds 94
Combining Statement Of Fiduciary Fund Net Assets 95
Capital Assets Used in the Operation of Governmental Funds:
Schedule by Source 96
Schedule by Function and Activity 96
Schedule of Changes by Function and Activity 96
Statistical Section (Unaudited)
General Governmental Expenditures by Function and Activity—Last Ten Fiscal Years 97-98
General Governmental Revenues by Function and Activity—Last Ten Fiscal Years 97-98
Property Tax Levies and Collections—Last Ten Fiscal Years 97-98
Assessed and Actual Valuations of Property— Last Ten Fiscal Years 99
Property Tax Rates—All Direct and Overlapping Governments 99
General Obligation Bonded Debt Ratios—All Overlapping Governments 99
Construction Activity and Bank and Savings and Loan Activity—Last Ten Fiscal Years 100
Computation of Legal Debt Margin 100
Statement of Direct and Overlapping Bonded Debt 100
Demographic Statistics 101
Top Ten Secured Property Owners 101
Miscellaneous Statistics 101
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CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
ADMINISTRATIVE SERVICES
March 31, 2004
To the Honorable Mayor and City Council
City of Huntington Beach
Huntington Beach, California
We are pleased to submit to you the Comprehensive Annual Financial Report for the
City of Huntington Beach, California for the year ending September 30, 2003 as
required by Section 616 of the City Charter.
The intent of this report is to provide the residents, the City Council and staff of
Huntington Beach with a firm understanding of the City's financial position. This
report is published in accordance with state law requirements that financial
statements are presented in conformity with generally accepted accounting
principles and audited in accordance with generally accepted auditing standards by
a firm of licensed certified public accountants. Responsibility for both the accuracy
of the information and the completeness and fairness of the presentation including
all disclosures rests with the City's Administrative Services Department.
Consequently, Administrative Services assumes full responsibility for the
completeness and reliability of all information presented in this report.
We believe the information and data, as presented, are accurate in all material
aspects and presented in a manner designed to fairly set forth the financial position,
and changes in financial position, of the City as measured by the financial activity of
its governmental activities, .business-type activities, each major fund, and the
aggregate remaining fund information, and all disclosures necessary to enable the
residents, the City Council and staff to gain the maximum understanding of the
City's financial affairs.
ABOUT THE CITY OF HUNTINGTON BEACH
The City of Huntington Beach is located along the Southern California coast in
Orange County, 35 miles south of Los Angeles and 90 miles north of San Diego.
With a population of approximately 200,000 residents, and projected to grow to
204,000 by 2005, it is known as Surf City due to its abundance of beaches; sunny,
warm mediterranean climate; and casual lifestyle. Huntington Beach covers 28
square miles of land, 26 square miles of water, and is the one of the 20 largest cities
in California. With 8.5 miles of uninterrupted beach along the Pacific Ocean, the city
also plays host to an annual visitor population of over 11 million people, especially
during the summer, special events and weekends. Listed among the nation's safest
cities for decades, Huntington Beach has often been ranked among the Top Ten
Safest Cities by City Crime Rankings.
Founded in the late 1880s, Huntington Beach was incorporated as a Charter City in
1909. Huntington Beach has a City Council/City Administrator form of government.
The City Council has seven members, each of whom are elected to four-year terms.
City Council Members are limited to two consecutive terms.There are three elected
department heads, the City Attorney, City Clerk and City Treasurer. The position of
Mayor is filled on a rotating basis.
The City of Huntington Beach is a full service city. Its major departments include the
City Administrator's Office,Administrative Services, Building and Safety, Community
Services, Economic Development, Fire, Information Services, Library Services,
Planning, Police and Public Works.
This report includes the financial activity of separate legal entities whose activities
the City controls. These entities are:
• Redevelopment Agency of the City of Huntington Beach
• Huntington Beach Public Financing Authority,
• Huntington Beach Civic Improvement Corporation
• Various community facilities districts
Reservoir Hill Assessment District
• Huntington Beach Auto Business Improvement District
Component unit reports (stand-alone reports)are available for the Redevelopment
Agency and Public Financing Authority.
Local Economy
The City of Huntington Beach is one of the leading commercial and industrial
centers in Southern California. The City works diligently to maintain its business
friendly atmosphere, working closely with the Huntington Beach Chamber of
Commerce and the Huntington Beach Conference and Visitors Bureau. The City
seeks to attract new businesses and support existing business through retention
and expansion efforts. The City also supports business through an inter-
departmental team formed to review projects at their earliest stages to guide
development through the approval process.
As the third largest city in Orange County, more than 60,000 people are currently
employed by over 12,800 businesses in the City. Huntington Beach residents
represent nearly 10% of the entire Orange County working population. Huntington
Beach businesses include, aerospace and high technology; petroleum and
petroleum support; manufacturing; computer hardware and software; financial and
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business services; automobile services; machine shop services, precision
instruments, retailers and surf apparel, just to name a few.
Fiscal Year 2002/2003 Economy
The and 211 Quarter Budget Reports presented to the City Council identified
significant concerns with both revenue and expenditure in the fiscal year 2002/2003
General Fund Budget. Revenue impacts were most significant in Sales Tax and
Utility Users Tax(UUT). Significant expenditure impacts include increased costs for
liability and safety retirement. As a result,the City Council agreed to review budget
reductions in the fiscal year 2002/2003 General Fund Budget.
The City reopened the adopted budget and reduced personnel, operating expenses
and capital purchases in an amount representing $11.1 million on an ongoing basis
in the General Fund. This reduction was essential to recognize and account for
shortfalls in revenue since the adoption of the fiscal year 2002/2003 Budget.
Necessary reductions considered all of the strategic goals, making cuts in areas that
would have the least possible impact on core services.
MAJOR INITIATIVES
Through its Strategic Plan, the Huntington Beach City Council seeks to assure a
high quality of life endures and improves as the City ages. The Strategic Plan was
first created in July 2001 as a way to help the City Council assess the effects of
today's decisions on the City's future quality of life. As a blueprint for the City's
future, the Strategic Plan defines the City Council's goals and objectives. The
following are the City Council's strategic goals set forth in the City's development of
the annual budget:
• Public Safety - Maintain a healthy and safe community
• Fiscal Integrity- Establish a sound financial foundation for the City's finances
• Infrastructure and Transportation - Assure the long-term adequacy of the
City's infrastructure, facilities, and transportation network.
• Economic Development-Achieve development that maintains and improves
the city's fiscal viability and reflects economic demands while maintaining
and improving quality of life for current and future residents
• Organizational Development and Technology - Maintain and continually
improve organizational effectiveness.
• Community Livability and Sustainability—Build and maintain a sense of place
and an exceptional quality of life within a sustainable urban environment.
• Enrichment, Communication and Involvement - Ensure that Huntington
Beach's local government is open, accessible, responsive, nurturing, and
respectful to all the citizens it serves.
• Environment and Natural Resources — Enhance the community's
environmental quality and its unique natural resources.
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FINANCIAL INFORMATION
To provide reasonable basis for making these presentations, Administrative
Services and the management of the City of Huntington Beach have established a
comprehensive internal control system deigned to compile sufficient reliable
information for the preparation of the City's financial statements and protect the
City's assets from loss, theft, or misuse. Because cost is an important part of any
internal control system, the cost of the internal control system does not exceed the
expected benefit. Therefore, the internal controls have been designed to provide
reasonable rather than absolute assurance that the financial statements will be free
from material misstatement. As Administrative Services Department and the
management of the City of Huntington Beach, we assert that, to the best of our
knowledge and belief, this financial report is complete and reliable in all material
respects.
Caporicci and Larson, CPAs, a firm of licensed independent certified public
accountants, has audited the City of Huntington Beach's financial statements. The
goal of the audit was to provide the residents, City Council and staff with reasonable
assurance that the financial statements of the City of Huntington Beach for fiscal
year ended September 30, 2003, are free of material misstatement and comply with
generally accepted accounting principles as determined by the Government
Accounting Standards Board. The audit involved examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements;
assessing the accounting principles used and significant estimates made by
management; evaluating the overall financial statement presentation. The
independent auditor concluded that there was a reasonable basis for rendering an
unqualified opinion that the City of Huntington Beach's financial statements for the
fiscal year ended September 30, 2003, are fairly presented in conformity with
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generally accepted accounting principles.
Single Audit
By federal mandate the City is required to undergo an annual "single audit" in
conformity with the provisions of the Single Audit Act of 1984 and the United States
Office of Management and Budget's Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations. Information related to this single audit,
including a schedule of federal financial assistance, the independent auditors'
reports on the internal controls and compliance with applicable laws and regulations,
and a schedule of findings and questioned cost, is available in the Administrative
Services Department separately issued. Single Audit Report.
Budgetary Controls
The City operates on a fiscal year basis, beginning October 1st and ending
September 30th. The budget is prepared under the supervision of the City
Administrator and transmitted to the City Council for deliberation sixty days prior to
the end of the fiscal year. The City Council adopts the annual budget by September
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30th of the prior fiscal year and may amend it or revise it at any time at a properly
noticed meeting.
The City utilizes an encumbrance system as a management control technique over
all fund types. Encumbrances are orders, or contracts, for goods or services not
completed or received and are unavailable for general expenditures. Appropriations
that are not encumbered lapse at the end of the fiscal year. Year-end
encumbrances are forwarded and become part of the following year's budget.
Budgetary control is at the department level within each fund. A Department Head,
with the Finance Officer's approval, may transfer funds within like categories of the
same department. The City Administrator must approve changes to capital outlay
requests.
Retirement Systems
The City participates in the California Public Employees' Retirement System
(CaIPERS). CalPERS was established by state law in 1932 to provide retirement
benefits for state employees. In 1939, public agency employees were allowed to
participate. The City of Huntington Beach joined the CalPERS system in 1945. The
CalPERS system manages pension and health benefits for more than 1.4 million
California public employees, retirees, and their families. As of June 30, 2003,
CalPERS provided benefits for 1,014,360 active and inactive members and 402,740
retirees. CalPERS membership is divided approximately in thirds among current and
retired employees of the state, schools, and participating public agencies.
CalPERS is a defined benefit retirement plan. It provides benefits based on a
member's years of service, age, and highest compensation. In addition, benefits are
provided for disability and death,with payments in some cases going to survivors or
beneficiaries of eligible members.
The City also maintains a supplemental retirement plan for each employee hired
before 1998 (date varies according to bargaining group) who retires from the City
under CalPERS with an optional form of benefit payment (as opposed to the
Unmodified Allowance provided by CaIPERS). The City's Retirement Supplement
Plan will provide a monthly benefit. This benefit commences at the same time the
CalPERS benefit commences and will be payable for the employee's lifetime. The
amount of the monthly benefit is calculated as the difference between the
employee's Unmodified Monthly Allowance and the actual monthly retirement benefit
the individual actually receives.
Information on these pension plans can be found in-notes 6 and 7 to the financial
statements.
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Cash Management Polices and Practices
The elected City Treasurer invests surplus cash in authorized investments allowed
by the government code and City policy. The City adopts an annual Investment
Policy intended to provide guidelines for the prudent investment of the city's cash
balances, and outlines the policies to assist in maximizing the efficiency of the city's
cash management system while meeting the daily cash flow demands of the city.
Both the Investment Advisory Board and the City Council approved the City's
Investment Policy.
The investment practices and policies of the City of Huntington Beach are based
upon state law and prudent money management. The primary goals of these
practices are:
• To assure compliance with all Federal, State, and local laws governing the
investment of public funds under the control of the City Treasurer.
• To protect the principal moneys entrusted to the City Treasurer.
• Achieve a reasonable rate of return within the parameters of prudent risk
management while minimizing the potential for capital losses arising from
market changes or issuer default.
The City forecasts revenues and expenditures to meet current obligations and to
earn a market rate of return on its investments. The City Treasurer earned a return
of 3.17%for the year. The California Government Code requires the City Treasurer
to prepare an annual statement of investment policy. The City Treasurer complied
with this law. Note 3 to the General Purpose Financial Statements shows further
information on the City's cash and investments.
Risk Management and Workers' Compensation
The City is self-insured for liability, workers compensation and employee health
claims.
The Risk Management Division of Administrative Services is responsible for
managing the City's insured and self-insured programs by administering the City's
property, liability and workers compensation programs. Risk Management procures
property insurance coverage processes liability claims and administers the City's
workers compensation program. Risk Management is actively involved in
controlling, transferring, or eliminating risk exposure to the City. The City is a
founding member of the Big Independent Cities Excess Pool (BICEP), which is a
pooled liability insurance program for medium to large cities.Through a combination
of self-funding and the purchase of commercial insurance, BICEP provides
coverage for liability claims and suits in excess of$1 million.
The Workers' Compensation Section is responsible for administrating the City's
Workers' Compensation Program. The program delivers all state mandated medical
viii
and disability benefits to injured workers. The City also purchases excess workers'
compensation insurance by a joint purchase through BICEP.
The Medical Plan Section is responsible for managing the City's self-insured
medical programs by administrating a Point-of-Service (POS) Plan for City
employees and their families. The City also purchases stop loss insurance
coverage for additional protection against adverse losses.
FINANCIAL REPORTING CERTIFICATE:
The Governmental Finance Officers Association (GFOA) of the United States and
Canada awarded the Certificate of Achievement for Excellence in Financial
Reporting to the City for its Comprehensive Annual Financial Report ended
September 30, 2002. This was the seventeenth consecutive year the City has
received this prestigious award. To qualify for the Certificate of Achievement, the
government entity must publish an easily readable and efficiently organized
Comprehensive Annual Financial Report,the contents of which conform to program
standards. Such report must satisfy both generally accepted accounting principles
as well as all legal requirements.
The Certificate of Achievement is valid for one year only. The City believes that this
Comprehensive Annual Financial Report continues to conform to the Certificate of
Achievement Program requirements and will be submitted to GFOA to determine its
eligibility for another certificate.
ACKNOWLEDGEMENTS:
We wish to thank the City Council and the City Departments for responsibility
conducting the fiscal affairs of the City of Huntington Beach. We would also like to
thank Robert Sedlak, Principal Accountant, who prepared this report and AJ Arts for
the photographic collage on the cover.
Clay MaAin,
Director of Administrative Services
aniel T. Villella,
Finance Officer
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CITY OF HUNTINGTON BEACH
PRINCIPAL.CITY OFFICIALS
CITY COUNCIL
Cathy Green, Mayor
Jill Hardy, Mayor Pro-Tem
Connie Boardman, Councilmember`
Gil Coerper,`Councilmember
Debbie Cook, Councilmember
Pam`Houchen, Councilmember
-Dave Sullivan, Councilrnember-'
OTHER ELECTED 0FPICIAL.S
Connie Brockway, City Clerk
Jennifer McGrath;:City Attorney
Shari Freidenrich,.City>Treasurer
ADMINISTRATIVE 0FFICIAL'S
Ray Silver, City Administrator
William P. Workman, Assistant City Administrator.,
:
Robert F. Beardsley, Director of Public Works._
David Biggs, Director of.Economic Development
Ross Cranmer, Director of Building and Safety.
Jim Engle, Director of Community Services
Ron Hayden, Director of Library Services
Janis Ingles, Director of Information Services
Clay Martin, Director of Administrative Services
Duane Olson, Fire Chief
Kenneth Small, Police Chief
Howard Zelefsky, Director of Planning
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CITY OF HUNTINGTON BEACH
THE PEOPLE
CITY COUNCIL
Mayor Cathy Green
Mayor Pro thy Jill Hardy CITYATTORNEY CITY CLERK CITY TREASURER
Council Members Boardman, Jennifer McGrath Connie Brockway Shari Freidenrich
Coerper,Cook, Houchen, Sullivan
Litlgation Records D Investments
ivision •
CITY ADMINISTRATOR Business Lleense
INFORMATION ADMINISTRATIVE O.rganizationat Community Ra SIIVeI Trantactlona
SERVICES SERVICES Effectiveness Relations Elections
Accounts Receivable
Janis Ingalls
ICEClay Martin : Pete Grant Laurie Payne ASSISTANT CITY
Public Passport SeMces Munici al Services
s tams Finance." ADMINISTRATOR P
Information Billing/
Communications Risk Management HBTV 3 WIIIIarrt Workman' Central Cashierin
Operations
Central Services
Human Resources,`
Real Property
PLANNING BUILDNG& ECO OMIC PUBLIC ORKS COMMUNItY SERVICES LIBRARY ERVICES FIRE POLICE
Howard Zewa SAFETY.. DEVELOPMENT Robert F.BeardsleyJlm Engle Ron Hayden Duane Olson Kenneth Small
Hovusl I&a �� Recreation, •
Planning Manager Permit S Pian ng Deputy Director $Cu ation,Youth Fire Prevention Uniform Division
o a' re er
' Cultural Serves Reference I ReeapNon
Check Services RedevebpmeM
Operations
Fcu,rantpla
nning Enpineering Facilkiea, Development Administrative
P Childrens!Media/ Operations
Inspection Services Businea tt Utl{nlea Emergency Services Concessions Branches DivisionAdvanced Planning
Development
Beach Services Information Systems 1 FlroMed Investigation Division
Malnteeance Neighborhood Circulation
Preservation
Tranaportatlon
25.
Certificate of
Achievement
for,Excellence .
in Financial
Reporting
Presented to
City of Huntington Beach;
California
For its Comprehensive Annual
Financial Report
for'the Fiscal Year Ended:"
September 3g, 260
AC of Achievement for Excellence'in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to -
government units and public employee retirement
systems whose comprehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.
OF 1 49
TM President
a.
Executive Director
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l Clection
C&L
Caporicci&Larson
Certified Public Accountants
INDEPENDENT AUDITORS'REPORT
To the Honorable Mayor and Members of City Council
of the City of Huntington Beach
Huntington Beach,California
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of
Huntington Beach,California (City), as of and for the year ended September 30,2003,which collectively
comprise the City's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the City's management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards in the United States
and the standards applicable to financial audits contained in Government Auditing Standards, issued by
the Comptroller General of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall basic financial
statement presentation. We believe that our audit provides a reasonable basis for our opinions.
In our opinion,the basic financial statements referred to above present fairly,in all material respects,the
respective financial position of the governmental activities,the business-type activities,each major fund,
and the aggregate remaining fund information of the City as of September 30, 2003, and the respective
changes in financial position and cash flows, where applicable, thereof for the year then ended in
conformity with generally accepted accounting principles in the United States.
As described in Note 1 to the basic financial statements, the City adopted Statements of the
Governmental Accounting Standards Board No.40,Deposit and Investment Risk Disclosures.
The accompanying Required Supplementary Information, such as management's discussion and
analysis, budgetary comparison information and other information as listed in the table of contents are
not a required part of the basic financial statements but are supplementary information required by the
Governmental Accounting Standards Board. We have applied certain limited procedures, which
consisted principally of inquires of management regarding the methods of measurement and
presentation of the Required Supplementary Information. However, we did not audit the information
and express no opinion on it.
Toil Free Ph:(877)862-2200 Toll Free Fax:(866)f 36--0927
Oakland Orange County Sacramento San Diego
ISO Grand Ave.,Suite 1365 3184-D Airway Avenue '7?Campus Commons Rd.,Suite 200 600"B"Street,Suite 1900
Oak-land,California 94612 Costa Mesa,California 92626 Sacramento,California 95825 San Diego.California 92101
To the Honorable Mayor and Members of City Council
of the City of Huntington Beach
Huntington Beach,California
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City's basic financial statements. The accompanying supplementary
information is presented for purpose of additional analysis and is not a required part of the basic
financial statements. The supplementary information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and,in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole. The Introductory Section and
Statistical Tables have not been subjected to the auditing procedures applied in the audit of the basic
financial statements and,accordingly,we express no opinion on them.
� `ew
Costa Mesa,California
February 6,2004
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City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
As management of the City of Huntington Beach, we offer readers of the City's financial
statements this narrative overview and analysis of the financial activities of the City of Huntington
Beach for the fiscal year ended September 30, 2003. We encourage readers to consider the
information presented here in conjunction with additional information that we have furnished in
our letter of transmittal, which can be found on pages iii-ix of this report.
Financial Highlights
Below is a summary of the City's government-wide financial information (in thousands):
Total Governmental and Business Activities
Amount Percent
September 30, September 30, Increase Increase
2003 2002 (Decrease) (Decrease)
Assets $ 845,077 $ 820,466 $ 24,611 3.0%
Liabilities 215,178 202,265 12,913 6.4%
Total Net Assets 629,899 618,201 11,698 1.9%
Unrestricted Net Assets 12,747 23,329 (10,582) 45.4%
Long-Term Obligations 188,900 175,220 13,680 7.8%
Program Revenues 89,918 119,820 (29,902) -25.0%
Taxes 100,291 93,190 7,101 7.6%
Other General Revenues 31,826 36,858 (5,032) -13.7%
Expenses 207,185 211,902 (4,717) -2.2%
• The total assets of the City of Huntington Beach exceeded its liabilities at the close of the
most recent fiscal year by $629,899,000. Of this amount, $12,747,000 may be used to
meet the City's ongoing obligations to citizens and creditors. Net assets increased
$11,698,000 (1.9%), while unrestricted net assets decreased $5,908,000 (25.3%).
• Long-term obligations increased by $13,680,000 (7.8%).
Program revenues decreased$29,902,000 (25.0%) largely because in the prior year all of
the infrastructure of the the Sewer Enterprise Fund was recorded as program revenue.
Taxes increased $7,101,000 (7.6%), other general revenues decreased $5,032,000
(13.7%). Expenses decreased $83,000 (.001%)
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City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
Overview Of The Financial Statements:
This discussion and analysis serve as an introduction to the City of Huntington Beach basic
financial statements. The City of Huntington Beach's basic financial statements comprise three
components: 1)government-wide financial statements,2)fund financial statements, and 3) notes
to the financial statements. This report also contains certain other supplementary information in
addition to the basic financial statements themselves.
Government-wide Financial Statements: The government-wide financial statements are
designed to provide readers with a broad overview of the City's financial condition and are
prepared similarly to those in the private sector.
The statement of net assets presents information on all of the City's assets and liabilities, with
the difference between the two reported as net assets. Over time, continued increases or
decreases in net assets may indicate whether the City's financial condition is improving or
deteriorating.
The statement of activities presents information on how the City's net assets changed during the
most recent fiscal year. These changes are reported on the accrual basis (when the economic
event occurs), not when the cash is received or paid.
The government-wide financial statements separate functions that are primarily supported by
taxes and intergovernmental revenues (governmental activities) from functions that are
supported by user fees(business activities). Governmental activities include public safety, public
works, general government, and community-related activities. Business activities include the
Water, Sewer, Refuse, FireMed, Hazmat Service, and Ocean View Estates.
The government-wide financial statements include the City and all of its component units that are
legally separate but whose activities entirely support the City of Huntington Beach. These
entities are, the Redevelopment Agency of the City of Huntington Beach, the Huntington Beach
Public Financing Authority, the Huntington Beach Civic Improvement Corporation, and various
assessment districts described in Note 2 to the financial statements.
The government-wide financial statements can be found on pages 16-17 of this report.
Fund Financial Statements. The City separates financial activities into funds to maintain
control over resources that have been legally separated. All of the funds of the City can be
divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for the same functions
reported in governmental activities in the government-wide financial statements. However, the
focus in the governmental fund section of these financial statements is on near-term inflows and
outflows of spendable resources as well as on balance of spendable resources available at the
end of the fiscal year.
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City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
It is useful to compare information presented for the governmental funds to information presented
for governmental activities in the government-wide financial statements. A reconciliation shows
the reader the differences in financial reporting between the governmental activities section and
the governmental funds section.
The City maintains twenty-seven individual governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of
revenue, expenditures, and changes in fund balances for the General Fund, Redevelopment
Agency, Huntington Beach Public Financing Authority, and Capital Improvement Fund, all of
which are considered to be major funds. Data from the other twenty-one funds are combined
into a single, aggregated presentation. Individual fund data for each of these nonmajor
governmental funds is provided in a combining statement elsewhere in this report.
The City provides an annual appropriated budget"for its governmental funds. Budgetary
comparison schedules on pages 72-73, and 82-90 demonstrate compliance.
The basic governmental fund financial statements can be found on pages 18-21 of this report.
Proprietary Funds. The City maintains two types of proprietary funds (enterprise and internal
service). Enterprise funds are used to account for the same activities as the business-type
activities in the government-wide financial statements. The City uses enterprise funds to account
for its Water, Sewer, Refuse, FireMed, Hazmat Service, and Ocean View Estates activities.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statement provides information for
Water operations, which is considered to be major funds of the City. The remaining proprietary
funds, noted above are combined into a single, aggregated presentation.
The basic proprietary fund financial statements can be found on pages 22-24 of this report.
5
City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of
parties outside the government. Fiduciary funds are not reflected in the government-wide
financial statement because the resources of those funds are not available to support the City of
Huntington Beach's own programs. The accounting used for fiduciary funds is much like that
used for proprietary funds
The basic fiduciary fund financial statements can be found on page 25 of this report.
Notes to the financial statements. The notes provide additional information that is essential to
a full understanding of the data provided in the government-wide and fund financial statements.
The notes to the financial statements can be found on pages 26-70 of this report.
Other information. In addition to the basic financial statements and accompanying notes, this
report also presents certain required supplementary information concerning the City's progress in
funding its obligation to provide pension benefits to its employees and General Fund budget to
actual comparisons. Required supplementary information can be found on pages 71-74 of this
report.
The combining statements referred to earlier in connection with non-major government funds and
internal service funds are presented immediately following the required supplementary
information on pensions. Combining and individual fund statements and schedules can be found
on page 75-96 of this report.
6
�J City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
Government-Wide Financial Analysis
As noted earlier,net assets may serve over time as a useful indicator of a government's financial
position. Below is a summary schedule of the City's net assets at September 30, 2003 (in
thousands):
Amount Percent
September 30, September 30, Increase Increase
Governmental Activities 2003 2002 Decrease) Decrease
Current and Other Assets $ 111,518 $ 113,185 $ (1,667) -1.5%
Capital Assets 581,205 565,017 16,188 2.9%
Total Assets 692,723 678,202 14,521 1.4%
Current Liabilities 27,796 19,927 $ 7,869 39.5%
Long-Term Liabilities 188,900 174,134 14,766 8.5%
Total Liabilities 216,696 194,061 22,635 48%
Net Assets:
Invested in Capital Assets, Net of Related Debt 446,061 425,697 $ 20,364 4.8%
Restricted 51,261 58,351 (7,090) -12.2%
Unrestricted (12,924) 93 (13,017) na
Total Net Assets $ 484,398 $ 484,141 7,347 1.5%
Amount Percent
September 30, September 30, Increase Increase
Business Activities 2003 2002 Decrease Decrease
Current and Other Assets $ 89,514 $ 61,888 $ 27,626 44.6%
Capital Assets 89,134 80,376 8,758 10.9%
Total Assets 178,648 142,264 36,384 55.5%
Current Liabilities 6,303 7,118 $ (815) -11.4%
Long-Term Obligations 550 1,086 (536) na
Total Liabilities 6,853 8,204 (1,351) -16.5%
Net Assets:
Invested in Capital Assets,Net of Related Debt 88,884 79,781 9,103 11.4%
Restricted 30,946 31,043 (97) -0.3%
Unrestricted 25,671 23,236 2,435 10.5%
Total Net Assets $ 145,501 $ 134,060 $ 11,538 8.6%
The largest portion of the City's net assets reflects investment in capital assets (e.g., land,
buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those
assets that is still outstanding. The City uses capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City's investment
in its capital assets is reported net of related debt, the resources needed to repay this debt must
be provided from other sources, since capital assets themselves cannot be used to liquidate
these liabilities. An additional portion of the City's net assets is subject to external (legal imposed
or statutory) restrictions ($51,261,000 for governmental activities, and $30,946,000 for business
activities). These amounts represent 10.6%and 21.2%of net assets for governmental activities
and business activities respectively.
7
• City 9 of Huntington Beach •
Management's Discussion and Analysis
For the Year Ended September 30, 2003
The unrestricted assets for governmental activities was a negative $12,924,000. This primarily
results from the Jarvis lawsuit expenditure recognized during the year.
A condensed summary of governmental activities (in thousands) follows:
Governmental Activities
Year Ended Year Ended Amount Percent
September 30, September 30, Increase Increase
Revenues: 2003 2002 (Decrease) (Decrease
Program Revenues:
Charges for Current Services $ 22,958 $ 23,556 $ (598) -2.5%
Operating Grants and Contributions 1,736 5,063 (3,327) -65.7%
Capital Grants and Contributions 6,955 13,039 (6,084) -46.7%
Total Program Revenues 31,649 41,658 (10,009) -24.0%
General Revenues:
Property Taxes 40,633 38,106 2,527 6.6%
Sales Taxes 28,011 23,449 4,562 19.5%
Utility Taxes 18,310 18,014 296 1.6%
Other Taxes 13,337 13,621 (284) -2.1%
Use of Money and Property 9,923 13,895 (3,972) -28.6%
From Other Agencies 16,412 20,359 (3,947) -19.4%
Other: 5,491 2,604 2,887 110.9%
Total General Revenues $ 132,117 $ 130,048 $ 2,069 1.6%
Total Revenues $ 163,766 $ 171,706 $ (7,940) -4.6%
Expenses:
City Council 267 262 5 1.9%
City Administrator 1,587 2,214 (627) -28.3%
City Treasurer 1,341 1,160 181 15.6%
City Attorney 2,899 3,634 (735) -20.2%
City Clerk 559 698 (139) -19.9%
Administrative Services 8,357 7,230 1,127 15.6%
Planning 3,633 2,658 975 36.7%
Building 3,045 3,101 (56) -1.8%
Fire 19,490 19,361 129 0.7%
Information Systems 4,401 4,464 (63) -1.4%
Police 41,104 42,187 (1,083) -2.6%
Economic Development 3,830 3,080 750 24.4%
Community Services 9,989 12,440 (2,451) -19.7%
Library Services 6,721 4,801 1,920 40.0%
Public Works 25,386 28,237 (2,851) -10.1%
Non-Departmental 25,604 24,359 1,245 5.1%
Interest on Long-Term Debt 6,199 9,438 (3,239) -34.3%
Total Expenses 164,412 169,324 (4,912) -2.9%
Increase in Net Assets Before Transfers (646) 2,382
Transfers 5,537 (244)
Net Assets -Beginning of Year(Restated) 479,507 477,369
Net Assets -End of Year $ 484,398 $ 479,507
8
0 City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
The cost of all governmental activities this year was $164,412,000. However, as shown in the
Statement of Activities, the amount that the taxpayers ultimately financed for these activities was
only$132,763,000, because some of the cost was paid by those who directly benefited from the
programs ($22,958,000), or by other governments and organizations that subsidized certain
programs with operating grants and contributions ($1,736,000), and capital grants and
contributions ($6,955,000). Overall, the City's governmental program revenues were
$31,649,000. The City paid for the remaining "public benefit" portion of governmental activities
with $100,291,000 in taxes and general revenue (some of which could only be used for certain
programs) and with other revenues, such as interest and general entitlements.
Total resources available during the year to finance governmental operations were
$621,658,000, consisting of net assets at October 1,2002 of$484,141,000, program revenues of
$31,649,000, general revenues of$100,291,000, and transfers of$5,537,000.Total expenses for
governmental activities during the year were $164,412,000; thus, net assets were increased by
$4,891,000, to$489,072,000.
A condensed summary of business activities (in thousands) follows:
Business Activities
Amount Percent
September 30, September 30, Increase Increase
2003 2002 (Decrease) (Decrease)
Program Revenues:
Charges for Current Services $ 47,169 $ 45,106 $ 2,063 4.6%
Capital Grants and Contributions 11,100 33,056 (21,956) -66.4%
Total Program Revenues 58,269 78,162 (19,893) -25.5%
Use of Money and Property 1,482 1,923 (441) -22.9%
Total Revenues 59,751 80,085 (20,334) -25.4%
Expenses:
Water Utility 24,943 27,250 (2,307) -8.5%
Emerald Cove Housing 401 405 (4) -1.0%
Emergency Fire Medical 3,765 3,172 593 18.7%
Refuse Collection 9,681 9,178 503 5.5%
Sewer Service 3,775 2,419 1,356 56.1%
Hazmat Service 150 143 7 4.9%
Ocean View Estates 58 11 47 427.3%
Total Expenses 42,773 42,578 195 0.5%
Increase in Net Assets Before Transfers 16,978 37,507
Transfers (5,537) 244
Net Assets -Beginning of Year $ 134,060 96,309
Net Assets-End of Year $ 145,501 $ 134,060
The City's net assets from business activities increased by$16,978,000 The largest reasons for
this increase were developer contributions of infrastructure of $4,631,000 and capital
contributions for the Water Master Plan of$6,469,000.
9
• City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
The cost of all Proprietary(Business Type)activities this year was$42,773,000. As shown in the
Statement of Activities and Changes in Net Assets, the amount paid by users of the systems was
$47,169,000, capital grants and contributions were$11,100,000,other revenue was$1,482,000,
and transfers were $5,537,000. Beginning net assets were 134,060,000 and ending net assets
were $145,501,000. Of the ending net asset amount, $88,884,000, or 61%, was invested in
capital assets, $30,946,000, or 21%was restricted for expenditures for the Water Master Plan,
and $25,671,000, or 18% was unrestricted.
The City's programs for governmental activities include General Government, Fire, Police, Public
Works, Redevelopment, Community Services and Library. Business type activities include the
Water, Sewer, Refuse, FireMed, Hazmat Service, and Ocean View Estates. A listing of each
program's revenues and expenses (in thousands) for the current year is presented below.
2002-2003 2001-2002
Funded by
Funded by Taxes and
Taxes and Other
Less Program Other General General
Governmental Activities: Expenses Revenues Revenues Revenues
City Council $ 267 $ - $ 267 $ 262
City Administrator 1,587 - 1,587 2,181
City Treasurer 1,341 - 1,341 1,160
City Attorney 2,899 - 2,899 3,634
City Clerk 559 (82) 477 652
Administrative Services 8,357 - 8,357 7,230
Planning 3,633 (752) 2,881 2,078
Building 3,045 (3,067) (22) (839)
Fire 19,490 (1,157) 18,333 18,756
Information Systems 4,401 (79) 4,322 4,464
Police 41,104 (5,083) 36,021 36,763
Economic Development 3,830 (1,514) 2,316 1,303
Community Services 9,989 (10,311) (322) 3,785
Library Services 6,721 (801) 5,920 4,535
Public Works 25,386 (8,798) 16,588 12,316
Non-Departmental 25,604 (5) 25,599 15,314
Interest on Long-Term Debt 6,199 - 6,199 9,438
Total Governmental Activities $ 164,412 $ (31,649) $ 132,763 $ 123,032
Business Activities
Water Utility 24,943 (37,943) (13,000) 1,202
Emerald Cove Housing 401 (746) (345) (302)
Emergency Fire Medical 3,765 (4,103) (338) (931)
Refuse Collection 9,681 (9,123) 558 (4)
Sewer Service 3,775 (5,876) (2,101) (2,121)
Hazmat Service 150 (233) (83) (2)
Ocean View Estates 58 (245) (187) 128
Total Business Activities $ 42,773 $ (58,269) $ (15,496) $ (2,030)
10
City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
Financial Analysis Of The City's Governmental Funds
Below is an analysis of the City's governmental fund activities for the year (in thousands):
GOVERNMENTAL FUNDS
Amount Percent
September 30, September 30, Increase Increase
2003 2002 (Decrease) (Decrease)
Total Fund Equity:
General Fund $ 14,974 $ 41,745 $ (26,771) -64.1%
Redevelopment Agency 25,565 (13,030) 38,595 na
Public Financing Authority 16,085 24,295 (8,210) -33.8%
Grants 1,294 2,913 (1,619) -55.6%
Property Tax Refund 2,380 - 2,380 na
Other Governmental Funds 20,090 19,902 188 0.9%
Total Fund Equity $ 80,388 $ 75,825 $ 4,563 6.0%
Unreserved Fund Equity:
General,Fund $ 12,217 15,972 $ (3,755) -23.5%
Redevelopment Agency 9,363 - 9,363 na
Public Financing Authority - - - na
Grants Fund. - - - na
Property Tax Refund 2,380 - 2,380 na
Other Governmental Funds 18,201 15,635 2,566 16.4%
Total Unreserved Fund Equity $ 42,161 $ 31,607 $ 10,554 -7.1%
• As of the close of the current fiscal year, the City's governmental fund balances reported
combined ending balance of$80,388,000, an increase of$4,563,000 in comparison to the
prior year.
• The total fund balance at year-end for the City's General fund was$14,974,000, which is
an overall decrease of $26,771,000 over last year. It was primarily due to a change in
accounting for interfund advances (see note 12d on page 68). The unreserved fund
balance was $12,217,000, or 9.8% of General Fund expenditures.
• The fund balance of the Redevelopment Agency increased by $38,595,000 also largely
due to the change in accounting for interfund advances (see page 68).
• The total fund balance of the Public Financing Authority decreased by $8,210,000 as a
result of bond proceeds being spent on capital projects.
• The total fund balance of the Grants Fund decreased by $1,619,000.
• The total fund balance of the Property Tax Refund Fund increased by $2,380,000. The
fund began operation during the year.
• During the year the City closed out the operation of all internal service funds by
transferring $8,170,000 from the General Fund.
11
City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
Financial Analysis of the City's Proprietary Funds
Below is an analysis of the fund equity of the City's proprietary funds (in thousands):
Amount Percent
September 30, September 30, Increase Increase
2003 2002 (Decrease) (Decrease)
Net Assets:
Water Fund $ 105,629 $ 98,928 $ 6,701 6.8%
Sewer Fund 27,809 21,056 6,753 32.1%
Refuse Fund (890) (365) (525) -143.8%
Other Enterprise Funds 12,953 14,076 (1,123) -8.0%
Total Net Assets $ 145,501 $ 133,695 $ 11,806 8.8%
Unrestricted Net Assets:.
Water Fund $ 14,903 $ 15,191 $ (288) -1.9%
Sewer Fund 6,541 3,592 2,949 82.1%
Refuse Fund (890) (365) (525) . -143.8%
Other Enterprise Funds 5,117 4,453 664 14.9%
Total Unrestricted Net Assets $ 25,671 $ 22,871 $ 2,800 12.2%
■ Total net assets of the Water Fund increased $6,701,000 (6.8%), while unrestricted net
assets decreased $288,000 (1.9%). The increase in the total net assets is largely due to
the Water Master Plan revenues.
■ Total net assets of the Sewer Fund increased $6,753,000 (6.8%) while unrestricted net
assets increased by $2,949,000 (82.1%). The increase in total assets is largely due to
additional contributed infrastructure. The increase in net assets is due to funds being
accumulated to pay for future capital improvements.
■ Total and unrestricted net assets of the Refuse Fund decreased $525,000 (143.8%)
resulting from billing issues relating to the new Utiligy system. Staff is reviewing to ensure
that customers are properly billed and the bills properly recorded.
■ Total net assets of non-major enterprise funds decreased $1,123,000 (8.8%), while
unrestricted net assets increased $664,000(14.9%). This is largely due to the transfer of
the Art Center from an enterprise fund to a special revenue fund.
12
City of Huntington'Beach 0
Management's Discussion and Analysis
For the Year Ended September 30, 2003
Debt Administration
Below is a schedule .of the changes to the City's long-term debt (in thousands). Additional
information on the City's long-term debt is shown in note 11 to the financial statements.
Balance
Balance October September
Governmental Activities: 1, 2002 Additions Retirements 30, 2003
Certificates of Participation $ 17,295 $ - $ (565) $ 16,730
Revenue Bonds 66,125 - (2,590) 63,535
Tax Allocation Bonds 30,370 - (995) 29,375
Special District Bonds 415 - (55) 360
Claims 12,612 16,831 (14,390) 15,053
Compensated Absences 8,950 - (727) 8,223
Leases 4,107 4,054 (1,741) 6,420
Pension Obligation 8,593 - (251) 8,342
Loans 8,925 - (750) 8,175
Property Tax Claims - 22,138 - 22,138
Other Redevelopment Obligations 11,280 - (731) 10,549
Total Debt-Governmental Activities 168,672 43,023 (22,795) 188,900
Business Activities:
Compensated Absences 491 132 - 623
Leases 595 - (345) 250
Total Long-Term Obligations -Business
Activities 1,086 132 (345) 873
Total Debt $ 169,758 $ 43,155 $ (23,140) $ 189,773
The City of Huntington Beach is legally restricted to issuing general obligation bonds to 15% of
its assessed valuation. Since the City has no general obligation bonds outstanding, the limit
does not apply. This is.shown on page 100 of the financial statements. The City's total debt for
increased $20,015,000 or 11.9%from its beginning amount largely due to the property tax refund
claim.
Certain long-term obligations of the City are rated by independent agencies for their relative
safety as an investment. The City received AAA ratings on the following recently issued
obligations:
■ Public Financing Authority 2000 Certificates of Participation
Public Financing Authority 2001 (a) Lease Revenue Bonds
■ Public Financing Authority 2001 (b) Lease Revenue Bonds
13
• City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2003
Capital Assets
The capital assets of the City are those assets, which are used in the performance of the City's
functions including infrastructure assets. The City has elected to use the "Basic Approach" as
defined by GASB statement 34 for infrastructure reporting. The following infrastructure networks
are recorded as capital assets in the government-wide financial statements:
• Storm drain system including pump stations, drainage system and manholes.
• Streets, (including land underneath streets)traffic signals, curbs, gutters, and sidewalks.
Below is a schedule of the City's capital assets, net of accumulated depreciation (in thousands):
Amount Percent
September 30, September 30, Increase Increase
Governmental Activities: 2003 2002 (Decrease) (Decrease)
Land $ 323,095 $ 317,391 $ 5,704 1.8%
Buildings 87,435 64,277 23,158 36.0%
Machinery and Equipment 19,905 22,986 (3,081) -13.4%
Construction in Progress 11,817 22,202 (10,385) -46.8%
Infrastructure 138,953 138,161 792 0.6%
Total Governmental Activities 581,205 565,017 16,188 2.9%
Business Activities:
Land $ 7,839 $ 8,598 $ (759) -8.8%
Buildings 31,435 23,631 7,804 33.0%
Machinery and Equipment 3,833 4,194 (361) -8.6%
Construction in Progress 8,071 7,845 226 2.9%
Infrastructure 37,956 36,108 1,848 5.1%
Total Business Activities 89,134 80,376 8,758 10.9%
Total Capital Assets $ 670,339 $. 645,393 $ 24,946 3.9%
Capital assets from governmental activities increased $16,188,000 (2.9%) while capital assets
from business activities increased $8,758,000 (10.9%). These increases were largely due to
infrastructure additions.
General Fund Budgetary Highlights
Comparing the fiscal year 2002/2003 original budget (or adopted) General Fund (expenditures
and transfers) amount of$141,853,000 to the final budget of$164,813,000 shows a net increase
of $27,517,000. Included in original budget amount is $4,557,000 of prior year encumbrance
carryover into fiscal year 200312004. The major portion of the increase resulted from the
transfer resulting changing the method of accounting for interfund advances ($20,572,000) and
the transfer resulting from consolidating the internal service fund activity ($8,170,000). The
remaining changes are largely from budget reductions and cancellation of prior year
encumbrances carried forward.
14
0 City of Huntington Beach 0
Management's Discussion and Analysis
For the Year Ended September 30, 2003
General Fund expenditures were $7,570,000 less than the final budget. This was largely the
result of approximately$11 million of permanent expenditure reductions/freezes approved by the
City Council during the year. Two departments(Police and Fire) had expenditures that exceeded
the final budget amounts. This was largely due to increased retirement and overtime costs.
Economic Factors And Next Year's Budgets And Rates
The key assumptions in the General Fund revenue forecast for fiscal year 2002/2003 were:
■ Revenue shortfalls from expected sales tax revenue
■ Revenue shortfalls from reduced utility tax revenue
■ Reduction in Gas Tax transfers to the General Fund
■ Increase in expected fee study revenue
■ Increase in parking revenue
■ General Growth in revenue
Contacting the City's Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, and investors and
creditors with a general overview of the City's finances and to show the City's accountability for
the money it receives. If you have questions about this report, separate reports of the City's
component units or need any additional financial information, contact the Administrative Services
Department, Finance Division at 2000 Main Street, Huntington Beach, California, 92648, phone
(714) 374-5358 or e-mail kreed@surfcity-hb.org.
15
d6aAic eLnancial statements
0
CITY OF HUNTINGTON BEACH
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2003
(IN THOUSANDS)
Business-
Governmental Type
ASSETS: Activities Activities Total
Cash and Investments $ 7,136 $ 15,354 $ 22,490
Receivables 16,910 9,786 26,696
Inventories - 1,154 1,154
Other Assets 4,143 - 4,143
Subtotal 28,189 26,294 54,483
Restricted Assets: -
Cash and Investments 33,871 36,926 70,797
Cash with Fiscal Agent 22,850 - 22,850
Receivables 15,584 - 15,584
Land Held for Resale 11,024 - 11,024
Total Restricted Assets 83,329 36,926 120,255
Capital Assets :
Non-Depreciable 335,240 15,910 351,150
Depreciable 245,965 73,224 319,189
Total Capital Assets 581,205 89,134 670,339
TOTAL ASSETS 692,723 152,354 845,077
LIABILITIES:
Accounts Payable 2,741 4,107 6,848
Accrued Payroll 3,967 416 4,383
Deposits 1,663 1,457 3,120
Subtotal 8,371 5,980 14,351
Liabilities Payable from Restricted Assets: -
Accounts Payable 3,489 - 3,489
Accrued Interest Payable 747 - 747
Deferred Revenue 3,389 - 3,389
Deposits 3,429 - 3,429
Total Liabilities Payable from Restricted Assets 11,054 - 11,054
Long-Term Obligations:
Claims Payable 5,900 - 5,900
Long-Term Obligations Due Within One Year 30,882 323 31,205
Long-Term Obligations Due in More than One Year 152,118 550 152,668
Total Long-Term Obligations 188,900 873 189,773
TOTAL LIABILITIES 208,325 6,853 215,178
NET ASSETS:
Investment in Capital Assets, Net of Related Debt 446,061 88,884 534,945
Restricted for:
Debt Service 15,045 - 15,045
Capital Projects 13,017 - 13,017
Other Purposes 23,199 30,946 54,145
Total Restricted Net Assets 51,261 30,946 82,207
Unrestricted (12,924) 25,671 12,747
TOTAL NET ASSETS $ 484,398 $ 145,501 $ 629,899
See independent auditors' report and notes to financial statements 16
s �r
CITY OF HUNTINGTON BEACH
STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30,2003
(In Thousands)
Net(Expense)Revenue and Changes in Net
Program Revenues Assets
Charges for Operating
Current Grants and Capital Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
Functions/Programs
Governmental Activities:
City Council $ 267 $ $ - $ - $ (267) $ $ (267)
City Administrator 1,587 - (1,587) - (1,587)
City Treasurer 1,341 - (1,341) (1,341)
City Attorney 2,899 - - (2,899) (2,899)
City Clerk 559 82 - (477) (477)
Administrative Services 8,357 - - (8,357) (8,357)
Planning 3,633 752 - (2,881) (2,881)
Building 3,045 3,067 - 22 22
Fire 19,490 1,157 - (18,333) (18,333)
Information Systems 4,401 - 79 - (4,322) (4,322)
Police 41,104 4,176 272 635 (36,021) (36,021)
Economic Development 3,830 257 1,257 - (2,316) (2,316)
Community Services 9,989 9,433 - 878 322 322
Libra Services 6,721 673 128 Library (5,920) (5,920)
Public Works 25,386 3,356 - 5,442 (16,588) - (16,588)
Non-Departmental 25,604 5 - (25,599) (25,599)
Interest on Long-Term Debt 6,199 - - - (6,199) (6,199)
Total Governmental Activities 164,412 22,958 1,736 6,966 (132,763) (132,763)
Business-type Activities:
Water Utility 24,943 26,843 - 11,100 13,000 13,000
Sewer Service 3,775 5,876 - - 2,101 2,101
Refuse Collection 9,681 9,123 - - (558) (558)
Emerald Cove Housing 401 746 - 345 345
Emergency Fire Medical 3,765 4,103 - - 338 338
Hazmat Service 150 233 - 83 83
Ocean View Estates 58 245 - 187 187
Total Business Type Activities 42,773 47,169 - 11,100 15,496 16,496
Total Business and Government Type Activities $ 207,185 $ 70,127 $ 1,736 $ 18,055 (132,763) 15,496 (117,267)
General Revenues:
Taxes:
Property Taxes 40,633 - 40,633
Sales Taxes 28,011 28,011
Utility Taxes 18,310 18,310
Other Taxes 13,337 13,337
Total Taxes 100,291 100,291
Other General Revenue:
Use of Money and Property 9,923 1,482 11,405
From Other Agencies 16,412 - 16,412
Other: 5,491 5,491
Total Other General Revenue 31,826 1,482 33,308
Transfers 5,537 (5,537) -
Total General Revenues and Transfers 137,654 (4,055) 133,699
Change in Net Assets 4,891 11,441 16,332
Net Assets-Beginning of Year(Restated) 479,607 134,060 613,567
Net Assets-End of Year $ 484,398 $ 145,501 $629,899
See independent auditors'report and notes to financial statements 17
CITY OF HUNTINGTON BEACH
BALANCE SHEET
GOVERNMENTAL FUNDS
SEPTEMBER 30,2003
Other Major Govemmental Funds
Public Total Major Other
Redevelopment Financing Property Tax Governmental Governmental
ASSETS: General Fund Agency Authority Grants Refund Funds Funds Total
Cash and Investments $ 7,136 $ 10,860 $ - $ 1,010 $ 2,369 $ 21,375 $ 19,632 $ 41,007
Cash and Investments with Fiscal Agent - 2,503 19,047 - - 21,550 1,300 22,850
Taxes Receivable 16,910 2,252 - - - 19,162 1,067 20,229
Other Receivables 2,094 4,513 88 5,151 11 11,857 140 11,997
Unbilled Receivable 268 - - - 268 - 268
Due from Other Funds 3,048 - 3,048 4,123 7,171
Land Held for Resale - 11,024 11,024 - 11,024
Other Assets 2,557 2,557 1,586 4,143
TOTAL ASSETS $ 32,013 $ 31,152 $ 19,135 $ 6,161 $ 2,380 $ 90,841 $ 27,848 $ 118,689
LIABILITIES AND FUND BALANCES
LIABILITIES
Accounts Payable $ 2,741 $ 126 $ 2 $ 1,440 $ - $ 4,309 $ 1,921 $ 6,230
Accrued Payroll 3,785 16 - 57 3,858 109 3,967
Due to Other Funds - - 3,048 - 3,048 4,123 7,171
Deposits Payable 1,663 1,843 - - 3,506 1,586 5,092
Deferred Revenue 2,950 3,602 3,370 9,922 19 9,941
Claims Payable 5,900 - - 5,900 - 5,900
TOTAL LIABILITIES 17,039 5,587 3,050 4,867 30,543 7,758 38,301
FUND BALANCES
Reserved for:
Encumbrances 2,757 414 - 1,294 4,465 1,889 6,354
Long-Term Receivables - 4,764 - - 4,764 - 4,764
Debt Service - 4,053 4,053 4,053
Capital Projects - 12,032 12,032 12,032
Land Held for Resale 11,024 11,024 - 11,024
Total Reserved Fund Balance 2,757 16,202 16,085 1,294 36,338 1,889 38,227
Unreserved,Designated:
Designated for Future Expenditure(Reported in): - 8,378 - - 8,378 - 8,378
Special Revenue Funds - - 603 603
Capital Projects Funds - - 10,220 10,220
Designated for Economic Uncertainties 9,984 - 9,984 - 9,984
Unreserved,Undesignated(Reported in):
General Fund 2,233 - 2,233 - 2,233
Special Revenue Funds - - - 9,796 9,796
Debt Service Funds - 2,380 2,380 234 2,614
Capital Projects Funds - 985 - 985 (2,652) (1,667)
Total Unreserved 12,217 9,363 2,380 23,960 18,201 42,161
TOTAL FUND BALANCES 14,974 25,565 16,085 1,294 2,380 60,298 20,090 80,388
TOTAL LIABILITES AND FUND BALANCES $ 32,013 $ 31,152 $ 19,135 $ 6,161 $ 2,380 $ 90,841 $ 27,848 $ 118,689
See independent auditors'report and notes to financial statements 18
CITY OF HUNTINGTON BEACH
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF NET ASSETS
SEPTEMBER 30,2003
(in thousands)
Amounts reported for governmental activities in the
statement of net assets are different because:
Total Fund Balances Governmental Funds $ 80,388
Net capital assets used in governmental activities are not
financial resources and,therefore,are not reported in the funds 581,205
Other long-term assets are not available to pay for current-period
expenditures and,therefore,are deferred in the funds 6,552
Accrued Interest Payable not Recorded in Liabilities (747)
Long-term Liabilities,including bonds and certificates of
participation payable are due and payable and therefore are not
reported in the funds. (188,900)
Current Portion of Claims Payable Included in Long-Term
Liabilities that is already recorded in the fund statements 5,900
Net Assets of Governmental Activities $ 484,398
See independent auditors'report and notes to financial statements 19
CITY OF HUNTINGTON BEACH
STATEMENT OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2003
(IN THOUSANDS)
Other Major Governmental Funds
Public Total Major Other
General Redevelopment Financing Property Tax Governmental Governmental
REVENUES: Fund Agency Authority Grants Refund Funds Funds Total
Property Taxes $29,688 $- 9,099 $ $ $ $ 38,787 $ 196 $ 38,983
Sales Taxes 25,882 - - 25,882 2,129 28,011
Utility Taxes 18,310 - - - 18,310 - 18,310
Other Taxes 11,845 1,492 - 13,337 - 13,337
Licenses and Permits 6,531 - - 6,531 1,514 8,045
Fines and Forfeitures 3,815 3,815 - 3,815
From Use of Money and Property 6,843 892 596 62 8,393 1,530 9,923
From Other Agencies 10,885 - - 5,749 - 16,634 8,469 25,103
Charges for Current Service 9,244 896 - - - 10,140 1,846 11,986
Other 967 232 252 1,451 703 2154
TOTAL REVENUES 124,010 11,719 892 6,697 62 143,280 16,387 159,667
EXPENDITURES
Current:
City Council 269 - - - - 269 - 269
City Administrator 1,559 - - 1,559 1,559
City Treasurer 1,376 - 1 - 1,377 1,377
City Attorney 2,836 - - - 2,836 2,836
City Clerk 555 - - - 555 555
Administrative Services 8,323 - - - 8,323 8,323
Planning 2,403 - 141 - 2,544 - 2,544
Building 2,566 - - - 2,566 477 3,043
Fire 18,848 - - 173 - 19,021 - 19,021
Information Systems 3,072 - - - - 3,072 547 3,619
Police 40,825 - - 284 - 41,109 75 41,184
Economic Development 843 1,398 - 1,087 - 3,328 288 3,616
Community Services 9,381 - 272 - 9,653 529 10,182
Library Services 3,192 - 157 - 3,349 866 4,215
Public Works 17,009 - 1,082 - 18,091 1,741 19,832
Non-Departmental 9,348 - - 19,820 29,168 2,068 31,236
Capital Outlay - 1,347 - 5,353 - 6,700 17,517 24,217
Debt Service: _ -
Principal 1,984 1,968 3,155 - 7,107 320 7,427
Interest 162 2,016 3,763 260 6,201 72 6,273
TOTAL EXPENDITURES 124,551 6,729 6,918 8,810 19,820 166,828 24,500 191,328
EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER)
EXPENDITURES (541) 4,990 (6,026) (2,213) (19,758 (23,548) (8,113) (31,661)
OTHER FINANCING SOURCES(USES)
Transfers In 8,072 24,163 4,819 2,736 - 39,790 14,673 54,463
i
Proceeds from Agency Fund - - - - 2,318 2,318 - 2,318
Reclassification of Interfund Advances 16,018 - - - 16,018 - 16,018
Proceeds of Long-Tern Debt 1,684 19,820 21,504 2,370 23,874
Long-Term Debt from Internal Service Funds (1,610) - - (1,610) - (1,610)
Capital Assets Reclassifications for Change in Fund Type - (1,743) (1,743)
Transfers Out (32,692) (8,260) (7,003) (2,142) - (50,097) (6,999) (57,096)
TOTAL OTHER FINANCING SOURCES(USES) (26,230) 33,605 (2,184) 694 22,138 27,923 8,301 36,224
INCREASE(DECREASE)IN FUND BALANCES (26,771) 38,595 (8,210) (1,619) 2,380 4,376 188 4,663
FUND BALANCE-BEGINNING OF YEAR 41,745 (13,030) 24,296 2,913 - 65,923 19,902 75,825
FUND BALANCE-END OF YEAR $ 14,974 $ 25,565 $ 16,085 $ 1,294 $ 2,380 $ 60,298 $ 20,090 $ 80,388
See independent auditors'report and notes to financial statements 20
• CITY OF HUNTINGTON BEACP
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
For the Year Ended September 30,2003
(in thousands)
Net Changes in Fund Balances-Total Governmental funds $ 4,563
Amounts reported for governmental activities in the Statement of
Activities are different because:
CAPITAL EXPENDITURES AND DEPRECIATION - Governmental
funds report capital outlays as expenditures. However,in the Statement
of Activities, the cost of these assets is allocated over their estimated
useful lives and reported as depreciation expense. 24,217
Donated Infrastructure from Developers-Infrastructure donated from
developers that increased the City's capital assets 7,879
Depreciation Expense - Depreciation is not recorded in the
govrenmental funds. However, it is recorded in the Statement of
Activities (12,681)
ACCRUAL OF REVENUES - Certain revenues in the Statement of
Activities do not meet the"availability"criteria for revenue recognition in
the governmental funds and are not reported in the governmental funds
as revenue. 1,650
INTERNAL SERVICE FUNDS - These are used by management to
charge the cost of certain activities to individual funds. During the year
these funds were closed out with a transfer. 8,170
LONG-TERM DEBT PROCEEDS-Issuances and changes in long-term
debt (bonds, leases, certificates of participation, compensated
absences, etc) provide current financial resources to governmental
funds, while repayments of this debt consumes the current financial
resources of governmental funds. Neither transaction, however, has
any effect on net assets. Also, governmental funds report the effect of
issuance costs, premiums, discounts, etc. when debt is first issued.
These amounts are deferred and amortized in the Statement of
Activities. (23,874)
CLAIMS PAYABLE-Due to changes in the City's method for recording
long-term insurance claims (12,460)
PAYMENTS OF LONG-TERM DEBT-Principal payments on long-term
debt are recorded an expenditure in the governmental funds and a
reduction of liability in the government-wide statements. 7,427
Change in Net Assets of Governmental Activities $ 4,891
See independent auditors'report and notes to financial statements 21
OTY OF HUNTINGTON BEACH
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30,2003
(in thousands)
Sewer Total Major Non-Major
Service Refuse Enterprise Enterprise
ASSETS Water Fund I Fund Fund Funds Funds Total
Current Assets:
Cash and Investments $ 42,042 $ 5,990 $ - $ 48,032 $ 4,248 $ 52,280
Other Receivables 4,324 653 1,026 6,003 1,414 7,417
Inventories 1,154 - - 1,154 - 1,154
Unbilled Receivable 1,711 264 394 2,369 - 2,369
Due from Other Funds 1,527 - - 1,527 - 1,527
Total Current Assets 50,758 6,907 1,420 59,085 5,662 64,747
Capital Assets:
Land 3,907 - - 3,907 3,933 7,840
Buildings 30,723 1,219 - 31,942 4,662 36,604
Improvements Other than Buildings - 2,653 - 2,653 - 2,653
Machinery and Equipment 6,107 191 - 6,298 1,106 7,404
Infrastructure 51,370 35,434 - 86,804 - 86,804
Construction in Process 8,072 - - 8,072 - 8,072
Less Accumulated Depreciation (40,149) (18,229) - (58,378) (1,865) (60,243)
Total Capital Assets 60,030 21,268 81,298 7,836 89,134
TOTAL ASSETS 110,788 28,175 1,420 140,383 13,498 163,881
LIABILITIES
Current Liabilities:
Accounts Payable 2,861 191 766 3,818 289 4,107
Accrued Payroll 233 53 17 303 113 416
Due to Other Funds - - 1,527 1,527 - 1,527
Deposits Payable 1,418 - - 1,418 39 1,457
Current Portion of Claims and Leases 323 - - 323 - 323
Total Current Liabilities 4,835 244 2,310 7,389 "1 7,830
Liabilities Payable from Restricted Assets -
Non-Current Liabilities:
Compensated Absences 397 122 - 519 104 623
Capital Leases 250 - 250 - 250
Less Current Portion of Claims and Leases (323) - - (323) - (323)
Total Non-Current Liabilities 324 122 446 104 550
TOTAL LIABILITIES 5,159 366 2,310 7,835 545 8,380
NET ASSETS
Invested in Capital Assets,Net of Related Debt 59,780 21,268 - 81,048 7,836 88,884
Restricted for: -
Other Purposes 30,946 - - 30,946 - 30,946
Unrestricted 14,903 6,541 (890) 20,554 5,117 25,671
TOTAL NET ASSETS $ 105,629 $ 27,809 $ (890) $ 132,648 $ 12,953 $ 145,601
See independent auditors'report and notes to financial statements 22
• •
CITY OF HUNTINGTON BEACH
STATEMENT OF REVENUES, EXPENSES,AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2003
(in thousands)
Sewer Total Major Non-Major
Service Refuse Enterprise Enterprise
Water Fund Fund Fund Funds Funds Total
OPERATING REVENUES:
Sales $ 25,883 $ - $ - $ 25,883 $ - $ 25,883
Rentals - - - - 959 959
Fees for Service - 5,876 9,069 14,945 4,276 19,221
Other 960 - 54 1,014 92 1,106
TOTAL OPERATING REVENUES 26,843 5,876 9,123 41,842 5,327 47,169
OPERATING EXPENSES:
Water Purchases 8,501 - 8,501 - 8,501
Supplies and Operations 3,418 3,055 9,681 16,154 4,154 20,308
Engineering 657 - - 657 - 657
Production 3,104 - - 3,104 - 3,104
Maintenance 2,040 - - 2,040 - 2,040
Water Meters 1,085 - - 1,085 - 1,085
Water Quality 301 - - 301 - 301
In-Lieu Taxes to General Fund 3,909 - - 3,909 - 3,909
Depreciation 1,928 720 - 2,648 220 2,868
TOTAL OPERATING EXPENSES 24,943 3,775 9,681 38,399 49374 42,773
OPERATING INCOME(LOSS) 1,900 2,101 (558) 3,443 953 4,396
NON-OPERATING REVENUES(EXPENSES):
Interest Income 1,253 118 33 1,404 78 1,482
Capital Improvement Fees 6,469 - - 6,469 - 6,469
TOTAL NON-OPERATING REVENUES(EXPENSES) 7,722 118 33 7,873 78 7,951
CHANGE IN NET ASSETS BEFORE TRANSFERS
AND CAPITAL CONTRIBUTIONS: 9,622 2,219 (525) 11,316 1,031 12,347
TRANSFERS AND CAPITAL CONTRIBUTIONS:
Transfers In - - - - 35 35
Transfers Out (3,018) - - (3,018) (2,554) (5,572)
Capital Contributions 97 4,534 - 4,631 - 4,631
TOTAL TRANSFERS AND CAPITAL
CONTRIBUTIONS (2,921) 4,534 - 1,613 (2,519) (906)
TOTAL CHANGE IN NET ASSETS 6,701 6,753 (525) 12,929 (1,488) 11,441
NET ASSETS-BEGINNING OF YEAR 98,928 21,056 (365) 119,619 14,441 134,060
NET ASSETS-END OF YEAR $ 105,629 $ 27,809 $ (890) $ 132,548 $ 12,953 $ 145,501
See independent auditors'report and notes to financial statements 23
0
CITY OF HUNTINGTON BEACH
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2003
(in thousands)
Sewer Total Major Non-Major
Service Refuse Enterprise Enterprise
Water Fund Fund Fund Funds Funds Total
Cash Flows from Operating Activities:
Cash Received from Customers and Users $ 29,025 $ 5,845 $ 9,351 $ 44,221 $ 5,788 $ 50,009
Cash Paid to Employees for Services (4,733) (1,222) (179) (6,134) (1,649) (7,783)
Cash Paid to Suppliers of Goods and Services (20,809) (1,507) (9,646) (31,962) (2,522) (34,484)
Other Operating Items (1,527) - 441 (1,086) 60 (1,026)
Net Cash Provided(Used)by Operating Items 1,956 3,116 (33) 5,039 1,677 6,716
Cash Flows from Noncapital Financing Activities:
Transfers In - - - - 35 35
Transfers Out - - - (2,554) (2,554)
Net Cash Provided(Used)by Non Capital Financing
Activities - - - (2,519) (2,519)
Cash Flows from Capital and Related Financing Activities:
Purchase of Plant,Property,and Equipment (8,853) - (8,853) - (8,853)
Principal Paid on Long-Term Debt - - - - (281) (281)
Capital Surcharge 6,469 - 6,469 - 6,469
Net Cash Provided(Used)by Capital and Related
Financing Activities (2,384) - (2,384) 1,532 (852)
Cash Flows from Investing Activities
Cash Received from Investments 1,253 118 33 1,404 78 1,482
Net Increase in Cash and Cash Equivalents 825 3,234 - 4,059 768 4,827
Cash and Cash Equivalents,Beginning of Year 41,217 2,756 - 43,973 3,480 47,453
Cash and Cash Equivalents,End of Year $ 42,042 $ 5,990 $ - $ 48,032 $ 4,248 $ 52,280
Reconciliation of Operating Income to Net Cash
Provided(used)by Operating Activities
Operating Income(Loss) $ 1,900 $ 2,101 $ (558) $ 3,443 $ 953 $ 4,396
Adjustments to Reconcile Operating income to Net
Cash Provided(Used)by Operating Activities
Depreciation 1,928 720 . - 2,648 220 2,868
Decrease(Increase)in Accounts Receivable (2,534) (363) (565) (3,462) 287 (3,175)
Decrease(increase)in Unbiiled Receivables 2,304 350 847 3,501 - 3,501
Decrease(Increase)in Prepaid Insurance - - - - - -
Decrease(Increase)in Advances to Other Funds 2,894 - - 2,894 - 2,894
Decrease(Increase)in Due from Other Funds (1,527) - - (1,527) - (1,527)
Decrease(Increase)in Inventory (50) - - (50) - (50)
Increase(Decrease)in Accounts Payable 68 190 35 293 95 388
Increase(Decrease)in Accrued Payroll 72 (4) 8 76 65 141
Increase(Decrease)in Due to Other Funds - - 235 235 - 235
Increase(Decrease)in Claims Payable - - - - - -
Increase(Decrease)in Advances from Other Funds (3,018) - (3,018) - (3,018)
Increase(Decrease)in Deposits (92) - (92) 12 (80)
Increase(Decrease)in Compensated Absences 11 122 (35) 98 45 143
Net Cash Provided(Used)by Operating Activities $ 1,956 $ 3,116 $ (33) $ 5,039 $ 1,677 $ 6,716
See independent auditors'report and notes to financial statements 24
CITY OF HUNTINGTON BEACH
STATEMENT OF FIDUCIARY FUND NET ASSETS
FIDUCIARY FUNDS
SEPTEMBER 30, 2003
Trust Fund-
Total Agency Retirement
Assets: Funds Supplemental Fund
Cash and Investments $ 7,552 $ 10,474
Cash with Fiscal Agent 2,119 -
Accounts Receivable, Net 445 51
Total Assets $ 10,116 $ 10,525
Liabilities:
Accounts Payable $ - 2
Due to Bondholders 3,369 -
Total Liabilities 3,369 2
Net Assets:
Held in Trust for Pension Benefits and Other Purposes $ 6,747 $ 10,523
CITY OF HUNTINGTON BEACH
STATEMENT OF CHANGES IN FIDUCIARY FUND NET ASSETS
TRUST FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2003
Trust Fund-
Retirement
Supplemental
Additions: Fund
Employer Contributions $ 3,036
Interest Income 216
Total Additions $ 3,252
Deductions:
Benefits 1,505
Change in Net Assets 1,747
Net Assets-Beginning of Year 8,776
Net Assets-End of Year $ 10,523
See independent auditors'report and notes to financial statements 25
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. Reporting Entity:
The City of Huntington Beach is the primary government. It was incorporated in 1909, is a
charter, full-service city. The form of government is Council-Manager. Component units are
legally separate organizations for which the City Council is financially accountable, or
organizations that if excluded from the accompanying financial statements,would make them
misleading. The component units described below are blended (presented as if they are part
of the primary government) with the primary government for financial reporting purposes
because either the component units have governing bodies identical to the City's (the City
Council) or provide services exclusively to the City. Financial accountability means the
appointment of a voting majority of the component unit's board and either the ability to
impose will by the City or the possibility that the component unit will provide a financial benefit
or impose a financial burden on the City.
• Redevelopment Agency of the City of Huntington Beach (the Redevelopment
Agency)—This entity was formed in 1967 to renovate older areas in the City.The City
Council serves as its governing body and adopts its annual budget. The
Redevelopment Agency is financially dependent on the City for all of its operations.
Separately prepared financial statements are available for the Redevelopment Agency
from the City's Administrative Services Department.
• Huntington Beach Public Financing Authority (Public Financing Authority)—This
corporation was formed in March, 1988 to issue debt to finance public improvements
and other capital purchases for the City and Redevelopment Agency. The Public
Financing Authority's governing body is the City Council,which also adopts the annual
budget. The Public Financing Authority is financially dependent on the City. There are
separately prepared financial statements available for the Public Financing Authority
available from the City's Administrative Services Department.
• The City of Huntington Beach Community Facilities Districts 1990-1, 2000-1 .
and Boeing (Community Facilities Districts), and the Reservoir Hill Assessment
District (the Assessment District) were formed to construct public improvements
within the City boundaries. The governing board of these districts is the City Council.
The proceeds of debt issued and the expenditures for the public improvements are
recorded in capital projects funds. The Community Facilities Districts' debt is not an
obligation of the City. There are no separate financial statements prepared for these
entities.
26
cffo s
e"Lancial c1tatement' s
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
■ The Huntington Beach Auto Business Improvement District (the Business
Improvement District) was formed in 1992 to fund capital improvements within this
non-contiguous district. The Business Improvement District's governing body is the
City Council. The business owners within the district petitioned the City Council under
the Streets and Highways Code to form the district, which assisted in the funding of an
electronic reader board sign advertising the auto dealers. There are no separate
financial statements for this entity.
b. Government-Wide Financial Statements:
The Government-Wide Financial Statements include a Statement of Net Assets, a.
Statement of Activities, and Changes in Net Assets. These statements present
summaries of Governmental and Business-Type Activities for the City accompanied by a
total column. Fiduciary activities of the City are not included in these statements. These
statements are presented on an "economic resources" measurement focus and the
accrual basis of accounting. Accordingly, all of the City's assets and liabilities, including
capital assets, as well as infrastructure assets, and long-term liabilities, are included in the
accompanying Statement of Net Assets. The Statement of Activities presents changes in
net assets. Under the accrual basis of accounting, revenues are recognized in the period
in which they are earned while expenses are recognized in the period in which the liability
is incurred.
The statement of activities demonstrates the degree with which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Indirect expenses are
allocated to the various functions based on a proportionate use of services. The types of
transactions reported as program revenues for the City are reported in three categories:
1) charges for current services, 2) operating grants and contributions, and 3) capital
grants and contributions. Taxes and other items not properly included among program
revenues are reported as general revenues.
Government-wide financial statements do not provide information by fund or account
group. They simply distinguish between governmental and business activities. The
City's statement of net assets includes both current and non-current assets and liabilities.
Financial Statement Classification
In the Government-Wide financial statements net assets are classified in the following
categories:
27
City of Huntington Beachi
Notes to Financial Statements
For the Year Ended September 30, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
b. Government-Wide Financial Statements:
Invested In Capital Assets, Net of Related Debt — This category groups all capital
assets, including infrastructure, into one component of net assets. Accumulated
depreciation and the outstanding balances of debt that are attributable to the acquisition,
construction or improvement of these assets reduces this category.
Restricted Net Assets — This category presents restrictions imposed by creditors,
grantors, contributors or laws or regulations of other governments and restrictions
imposed by law through constitutional provisions or enabling legislation. This category
presents restrictions placed on the categories of Capital Projects, Debt Service, and
.Specific Projects and Programs as established by the City Council.
Unrestricted Net Assets — represent the net assets of the City, not restricted for any
project or other purpose.
c. Fund Financial Statements:
Separate fund financial statements are:,prepared for governmental funds, proprietary
funds, and fiduciary funds. Major individual governmental and enterprise funds are
reported as separate columns in the fund financial statements.
The City applies all applicable GASB pronouncements (including all NCGA Statements
and.Interpretations currently in effect) as well as the following pronouncements issued on
or before November 30, 1989, to the business type activities, unless those
pronouncements conflict with or contradict GASB pronouncements, Financial Accounting
Standards Board (FASB) Statements and Interpretations, Accounting Principles Board
(APB) Opinions, and Accounting Research Bulletins (ARB) of the committee on
Accounting Procedure. The City applies all applicable FASB Statements and
Interpretations issued after November 30, 1989, except those that conflict with or
contradict GASB pronouncements.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
All governmental funds are accounted for on a spending or"current financial resources"
.measurement focus and the modified accrual basis of accounting. Only current assets
and current liabilities are included on the Balance Sheets. The Statement of Revenues,
Expenditures and Changes in Fund Balances present increases (revenues and other
financing sources) and decreases (expenditures and other financing uses) in net current
assets. Under modified accrual basis of accounting, revenues are recognized in the
accounting period in which they become both measurable and available to finance
expenditures of the current period. Revenues are recorded when received in cash, except
28
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
d.. Fund Financial Statements:
that revenues subject to accrual (generally 60 days after year-end) are recognized when
due. The primary revenue sources,which have been treated as susceptible to accrual by
the City, are property tax, sales tax, intergovernmental revenues and other taxes.
Expenditures are recorded in the accounting period in which the related fund liability is
incurred.
In the Fund financial statements, reserves and designations segregate portions of fund
balance that are either not available or have been earmarked for specific purposes. The
various reserves and designations are established by actions of the City Council and
Management and can be increased, reduced or eliminated by similar actions.
The City reports the following major funds:
Governmental Funds:
• General Fund is used to account for activity not required to be accounted for in
another fund. .
• Redevelopment Agency accounts for the acquisition and construction of capital
assets and the related debt service activity for certain projects in the City's
Redevelopment project areas.
• Public Financing Authority accounts for the activity of the Huntington Beach Public
Financing Authority.
• Grant Fund accounts for revenues and expenses of grant-related activity.
• The Property Tax Refund Fund records the activity relating to the refund of property
taxes for the Jarvis case.
Proprietary Funds
Water Fund. is used to account for water sales to customers
■ Sewer Service Fund accounts for user fees charged to residents and businesses
for sewer services.
■ Refuse Fund is used to account for the activities of the City's refuse program
Governmental Fund Financial Statements:
Governmental Fund Financial Statements include a Balance Sheet and a Statement of
:Revenues, Expenditures and Changes in Fund Balances for all major governmental funds
and non-major funds aggregated. An accompanying schedule is presented to reconcile
and explain the differences in net assets as presented in these statements to the net
assets presented in the Government-Wide Financial Statements. The City presents all
major funds that met those qualifications.
29
S City 9 of Huntington Beach*
Notes to Financial Statements
For the Year Ended September 30, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
e. Fund Financial Statements:
Proprietary Fund Financial Statements:
Proprietary Fund Financial Statements include a Statement of Net Assets,a Statement of
Revenues, Expenses and Changes in Fund Net Assets, and a Statement of Cash Flows
for each major proprietary fund and non-major funds aggregated.
Proprietary funds are accounted for using the"economic resources"measurement focus
and the accrual basis of accounting.Accordingly, all assets and liabilities(whether current
or non-current)are included on the Statement of Net Assets.The Statement of Revenues,
Expenses and Changes in Fund Net Assets presents increases (revenues) and
decreases (expenses) in total net assets. Under the accrual basis of accounting, revenues
are recognized in the period in which they are earned while expenses are recognized in
the period in which the liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated from
the primary operations of the fund. All other revenues are reported as non-operating
revenues. Operating expenses are those expenses that are essential to the primary
operations of the fund. All other expenses are reported as non-operating expenses.
Fiduciary Fund Financial Statements
Fiduciary Fund Financial Statements include a Statement of Net Assets and a Statement
of Changes in Net Assets for Trust Funds. The City's Fiduciary funds represent Agency
Funds, which are custodial in nature (assets equal liabilities) and do not involve
measurement of results of operations. The Agency funds are accounted for on the
accrual basis of accounting. Contributions made are funded by a percentage of payroll
and are recognized when the payroll is incurred. Fiduciary funds are not presented in the
government-wide financial statements because these funds do not represent net assets
available to the City.
Reconciliations of Financial Statements
Reconciliation of the Fund financial statements to the Government-Wide financial
statements is provided to explain the differences created by the integrated approach of
GASB Statement No. 34.
30
City of Huntington Beach 0
Notes to Financial Statements
For the Year Ended September 30, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
d. Cash and Investments:
The City records investments at fair value. The City pools cash resources of its various
funds to facilitate cash management. Cash in excess of current requirements is invested
and reported as investments. It is the City's intent to hold investments until maturity.
However, the City may, in response to market conditions, sell investments prior to
maturity in order to improve the quality, liquidity or yield of the portfolio. Interest earnings
are apportioned among funds based on ending accounting period cash and investment
balances.
The City's cash and cash equivalents are considered to be cash on hand, demand
deposits, and highly liquid investments with original maturities of three months or less at
the time of acquisition.
In accordance with GASB Statement No. 31, Accounting and Financial Reporting for
Certain Investments and for External Investment Pools, highly liquid market investments
with maturities of one year or less at time of purchase are stated at amortized cost. All
other investments are stated at fair value. Market value is used as fair value for those
securities for which market quotations are readily available.
The City participates in the Local Agency Investment Fund (LAIF), an investment pool
managed by the State of California. LAIF has invested a portion of the pool funds in
Structured Notes and Asset-Backed Securities. LAIF's investments are subject to credit
risk with the full faith and credit of the State of California collateralizing these investments.
In addition, these Structured Notes and Asset-Backed Securities are subject to market
risk as a result of changes in interest rates. The City early-implemented GASB
Statement 40 (Deposit and Investment Risk Disclosures) The City's investment policy is
,further discussed in note 2 on page 36.
e. Capital Assets:
Capital assets, which include property, plant, equipment, and infrastructure, are reported
in the applicable governmental or business-type activities columns in the government-
wide financial statements. Capital assets have an acquisition cost of $5,000 or greater
($50,000 for infrastructure) and a useful life of two years or more. The City records all
purchased capital assets at historical cost(where historical records are available) and at
estimated historical cost where no historical records exist. Capital assets acquired from
gifts or contributions are recorded at fair market value at the time received, or in the case
of infrastructure assets, at City Council acceptance date.
31
City of Huntington Beach`
Notes to Financial Statements
For the Year Ended September 30, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
e. Capital Assets:
In the Government-Wide and proprietary fund financial statements, depreciation is
recorded on the on the straight-line method over the estimated useful lives of the assets
shown below and charged to the respective fund. No depreciation is recorded in the
governmental funds of the fund financial statements.
Production, pumping transmission and distribution plant 10 to 15 years
General Plant 20 to 50 years
Transportation Equipment 5 to 30 years
Infrastructure 50 Years
Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The
amount of interest to be capitalized is calculated by offsetting interest expense incurred
from the date of borrowing until completion of the project with interest earned on the
invested proceeds over the same period.
f. Inventories:
Proprietary inventories are valued at weighted-average cost. There are no inventories in
governmental funds.
g. Interfund Transactions:
As a general rule, interfund transactions have been eliminated from the government-wide
financial statements. Exceptions to this rule are payments in-lieu or charges for current
service between the City's enterprise activity and the City's General Fund. Elimination of
these transactions would distort the direct costs and program revenues for the various
functions. Certain eliminations have been made regarding interfund activities, payables
and receivables. All internal balances in the Statement of Net Assets have been
eliminated except those representing balances between the governmental activities and
the business-type activities, which are presented as internal balances and eliminated in
the total primary government column.
Numerous transactions occur between funds of the City resulting in operating transfers,
amounts due to or from other funds. Amounts due to or from are the current (due within
one year) portion of moneys that are to be paid or to be received from other funds.
32
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
h. Long-Term Obligations:
In the government-wide and proprietary fund financial statements, long-term obligations
are recorded as liabilities in ,the applicable governmental activities, business type
activities, or proprietary fund-type statement of net assets. Bond premiums and
discounts, as well as issuance costs, are deferred and amortized over the life of the debt
for all issues after October 1, 2001. Premiums and discounts for debt issued before
October 1, 2001 are not recorded or amortized.
In the governmental fund financial statements, bond discounts and premiums are
recognized as another financing source or use. Issuance costs are recorded a current
year expenditure.
i. Employee Compensated Absences:
The Agency records the cost of all accumulated and unused leave time (vacation, sick,
comp) as a liability when earned in the government-wide financial statements. In the fund
financial statements these amounts are recorded as expenditures in the years paid since
it is the City's policy to pay these from future financial resources, rather than available,
spendable resources.
j. Property Tax Revenue:
Property tax in California is levied according to Article 13-A of the California Constitution.
The basic levy is a countywide-levy of one percent of total assessed valuation and is
allocated to county governments, school districts, cities and special districts. Additional
levies require two-thirds approval by voters and are allocated directly to the specific
government.
In the government-wide financial statements, property tax is recorded.when earned,
regardless of when levied, due, or received. In the fund financial statements, property tax
revenue is recognized in the fiscal year levied provided that revenue is collected in time to
pay current year liabilities. Deferred property tax revenue represents property taxes
related to the current fiscal year that are collected more than 60 days after the fiscal year
end. Since the City's fiscal year differs from the County's property tax year, there is a
difference between the property tax revenue recorded on the fund financial statements
and the government-wide financial statements which is noted as a reconciling item in both
the Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund
Balance of Governmental Funds to the Statement of Activities and the Reconciliation of
the Balance Sheet of Governmental Funds to the Statement of Net Assets.
33
• City of Huntington Beach*
Notes to Financial Statements
For the Year Ended September 30, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
J Property Tax Revenue:
The County acts as a collection agent for property tax for all of the local governmental
units. Property taxes are normally collected twice per year. The property tax calendar is
as follows.
• Lien Date-January 1 - Prior Fiscal Year
• Levy Date-July 1 - Prior Fiscal Year
• Due Date, First Installment - November 10
• Due Date, Second Installment - February 10
• Delinquent Date, First Installment- December 10
• Delinquent Date, Second Installment-April 10
The taxes are paid to the local governments periodically during the year. Below are the
dates of the payments from the County:
• Payments of First Installment November to December
• Balance of First Installment February 1
• Payments of Second Installment March to April
Balance of Second Installment July 26
k. Allocation of Interest Income Among Funds:
The City pools all non-restricted cash for investment purchases and allocates interest
income based on month-end cash balances. Funds that have restricted cash record
interest income in the respective fund.
I. Cash Flow Statements:
For purposes of the Statement of Cash Flows, the Proprietary Fund types consider all
cash and investments to be cash equivalents, as these funds participate in the citywide
cash and investment pool.
m. Estimates:
The accompanying financial statements require management to make estimates and
assumptions that effect certain report amounts and disclosures.Actual results could differ
from those estimates.
34
0 City 9 of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
2. CASH AND INVESTMENTS:
Cash and investments were recorded in the government-wide statements as follows (in
thousands):
Statement of Net Assets:
Cash and Investments $ 22,490
Restricted Assets(Cash and Cash
Equivalents) 70,797
Cash with Fiscal Agent-Restricted 22,850
Total Per Statement of Net Assets 116,137
Fiduciary Funds:
Cash and Investments 18,026
Cash with Fiscal Agent-Restricted 2,119
Total Fiduciary Funds 20,145
Total Cash and Investments $ 136,282
At September 30, 2003 the City had the following investments and maturities (amounts in
thousands):
Investment Maturities (In Years)
DEPOSITS: Fair Value Less than 1 1 to 3 3 to 5 more than 5 Total
Demand Accounts $ 5,113 $ 5,113 $ - $ - $ 5,113
INVESTMENTS:
US Treasuries 1,031 21 1,010 - - 1,031
US Agencies 56,807 8,345 10,112 38,350 - 56,807
Commercial Paper 26,847 26,847 - - - 26,847
Medium Term Notes 10,954 6,775 - - 4,179 10,954
Local Agency Investment Fund 35,530 35,530 - - 35,530
Subtotal of Investments 131,169 77,518 10,112 38,350 4,179 131,169
Total Deposits and Investments $ 136,282 $ 82,631 $ 10,112 $ 38,350 $ 4,179 $ 136,282
35
i City of Huntington Beach•
Notes to Financial Statements
For the Year Ended September 30, 2003
2. CASH AND INVESTMENTS (CONTINUED):
Interest Rate Risk—As a means of limiting exposure to fair value losses arising from interest
rates, the City's investment policy limits investments over three years to be 30% or less.
Credit Risk-State law limits investments in commercial paper and corporate bonds to have at
least an "A" rating issued by a nationally recognized statistical rating organization. It is the
City's policy to limit its investments in these investment types to the top two ratings issued by
these rating organizations. As of September 30, 2003, the City's investments in commercial
paper were rated Al or better by Standard and Poor's, and p-1 by Moody's Investor's
Service. The City's investments in medium-term bonds were rated AAA orAA buy Standard
and poor's, and Aaa, Aa or A by Moody's.
Concentration of Credit Risk — The City's investment policy limits investments in any one
issuer, except for U.S. Government Agencies to no more than 10% of the investments. In
addition, no more than 60% can be invested in U.S. Government Agencies and each
investment type has a specific limit.
3. DEFERRED COMPENSATION:
Permanent City employees may defer a portion of their salary under Section 457 of the
Internal Revenue Code. This plan permits employees to defer a portion of their salary until
future years. The compensation is not available to the employees until termination,
retirement, or unforeseen emergency.
The City has established a trust for the assets of the plan held by third parties. All property
and rights purchased with these assets, as well as all income attributable to them are held in
trust for the exclusive benefit of the participant and their beneficiary. The amounts are no
longer the property of the City and are not subject to the claims of the City's general creditors.
Amounts administered by outside organizations in a trustee capacity are no longer reported
as assets of the City. The City does not have fiduciary responsibility for these assets.
4. DEFERRED REVENUE:
Certain revenues in governmental funds are deferred until received. The property tax
amounts are recognized in the year as revenue in the government-wide financial statements,
but are recorded as deferred revenue in the fund financial statements. The other amounts
are unearned revenue in both the funds and government-wide financial statements. The
amounts are as follows (in thousands):
36
City of Huntington Beach v
Notes to Financial Statements
For the Year Ended September 30, 2003
4. DEFERRED REVENUE (CONTINUED):
Other
Property Deferred
Taxes Revenue
(Unavailable) (Unearned) Total
General Fund $ 2,950 $ - $ 2,950
Grant Fund - 3,370 3,370
Redevelopment Agency 881 2,721 3,602
Non-Major Governmental Funds 19 19
Total $ 3,831 $ 6,110 $ 9,941
5. RETIREMENT PLAN — NORMAL:
a. Plan Description:
The City contributes to the California Public Employees' Retirement System (CALPERS),
an agent, multiple-employer public employee defined benefit pension plan. CALPERS
provides retirement and disability benefits, annual cost-of-living adjustments, and death
benefits to plan members and beneficiaries. CALPERS acts as a common investment and
administrative agent for participating public entities within California. Benefit provisions
and all other requirements are established by state statute and city ordinance. Copies of
CALPERS annual financial report may be obtained from their executive office: 400 P
Street, Sacramento, CA 95814.
b. Employer and Employee Contribution Obligations:
The City makes two types of contributions for covered employees. The first contribution
represents the amount required to be made by the City (the employer rate). The second
represents an amount which is made by the employee, but is reimbursed to the employee
by the City (the member rate). The member rate is set by contract and normally remains
unchanged.
The employer rate is an actuarially established rate, is set by CALPERS, and changes
from year to year. The employer rates for the fiscal year ending September 30, 2002 are:
October 1, 2002 to June July 1, 2003 to
30, 2003 September 30, 2003
Local Miscellaneous 0.000% 0.000%
Local Safety 0.000% 8.997%
37
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
5. RETIREMENT PLAN — NORMAL (CONTINUED):
b. Employer and Employee Contribution Obligations:
The member rates are as follows:
Rate
Local Miscellaneous 7.000%
Local Safety 9.000%
c. Annual Pension Cost:
The City's annual pension cost of$5,588,323 was equal to the City's required and actual
contributions. The required contribution was determined as part of a June 30, 2002
actuarial valuation using the entry age normal actuarial cost method.
CALPERS conducted an actuarial valuation using the entry-age actuarial cost method
using a level percent of payroll to determine the City's net pension obligation as of June
30, 2003. Significant assumptions were:
• Average amortization remaining period— 18 Years as of the Valuation Date—closed
end
• Asset valuation method — 3 years smoothed market
• Investment Rate of Return — 8.25%
• Projected salary increases — 4.27% to 11.59% (safety) and 3.75% to 14.2%
(miscellaneous) depending on age, service, and type of employment
Inflation — 3.50%
• Payroll growth — 3.75%
• Individual salary growth —A merit scale varying by duration of employment coupled
with an assumed annual inflation component of 3.50% and an annual production
growth of .25%
Initial unfunded liabilities are amortized over a closed period that depends on the plan's
date of entry into CALPERS. Subsequent plan amendments are amortized as a level
percent of pay over a closed 20 year period. Gains and losses that occur in the operation
of the plan are amortized over a rolling period, which results in an amortization of 10% of
the unamortized gains and losses each year. If the plan's accrued liability exceeds the
actuarial value of the assets, then the amortization payment on the total unfunded liability
may not be lower than the payment calculated over a 30-year amortization period.
38
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
5. RETIREMENT PLAN — NORMAL (CONTINUED):
d. Trend Information:
Annual Pension Percentage of APC Net Pension
Fiscal Year Cost Funded Obligatoin
9/30/2001 $5,516 1.00% $0
9/30/2002 $4,642 100% $0
9/30/2003 $5,583 100% $0
6. RETIREMENT PLAN — SUPPLEMENTAL:
a. Plan Description:
The City provides a supplemental retirement plan for all employees hired prior to January
1, 1998. It is a single-employer PERS. It is a defined benefit plan and will pay the retiree
an additional amount to his or her normal amount for life. The City's contracts with
employee bargaining associations establish the plan. These associations must agree to
any changes to the plan. The amount will cease upon the employee's death. The amount
which is computed as a factor of an employee's normal retirement allowance, is computed
at retirement and remains constant for his or her life. Of the 1,033 active employees
reported on the July 1, 2003 data, only 680 were eligible for plan benefits. No separately
prepared financial statements are prepared for this plan and it is not included in the
financial report of any other pension plan.
b. Employer Obligations and Funding Status and Progress:
The City annually transfers amounts from the various City funds to a pension trust fund.
The City is required to contribute an actuarially determined rate of 4.95% of total payroll
for all permanent employees. Administrative costs of this plan are financed through
investment earnings.
39
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
6. RETIREMENT PLAN —SUPPLEMENTAL (CONTINUED):
c. _,Annual Pension Cost and Net Pension Obligation:
The City's annual pension cost and net pension obligation for this plan at June 30, 2003
were (in thousands):
Annual required contribution $2,937
Interest on net pension obligation 472
Adjustment to annual required contribution (623)
Annual pension cost 2,786
Contributions made (3,037)
Increase (decrease) in net pension obligation (251)
Net Pension Obligation — Beginning of Year 8,593
Net Pension Obligation — End of Year 8 342
The annual required contribution was determined as part of an independent actuarial
valuation using the Entry Age Normal Actuarial Cost Method which is a projected benefit
full-cost method which takes into account those benefits that are expected to be earned in
the future as well as those already accrued. The actuarial assumptions used were:
• Rate of return on present and future assets— 5.5% per annum
• Projected salary increases for covered employees due to inflation—3.0% per annum
• Projected salary increases due to merit— 0%
• Inflation rate — 3.0%
• Post employment benefit increases— 0%
• Amortization of unfunded liability— level percentage of pay ending in 2027 (closed)
• Actuarial value of assets— market value
d. Trend Information:
Below is the required three-year trend information (dollar amounts in thousands):
Fiscal Year Annual Pension Percentage of Net Pension
Cost APC Funded Obligation
6/30/01 $2,455 88% $8,337
6/30/02 3,092 92% 8,593
6/30/03 2,786 100% 8,342
40
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
6. RETIREMENT PLAN — SUPPLEMENTAL (CONTINUED):
..d. Trend Information:
Below is other required trend information (dollar amounts in thousands):
Fiscal Year Annual Percentage of
Ending June Required ARC
30, Contribution Contributed
1992 $1,391 17%
1993 1,546 16%
1994 1,697 14%
1995 1,790 22%
1996 1,968 41%
1997 1,952 155%
1998 2,151 70%
1999 2,613 60%
2000 2,638 62%
2001 2,578 88%
2002 2,836 88%
2003 2,937 103%
e. Accounting for Plan:
Since the City is required to adopt GASB 25 for the supplemental pension plan, the
difference between the ARC and the amount of pension cost funded for the years in which
there was an actuarial study must be recorded as a liability in the government-wide
financial statements. The amount of this liability is $8,342,000. The benefits are
.recognized when due and payable. Actuarial studies and updates were performed since
1991 and there is a substantial amount of unfunded pension benefit liability that would
have been recorded as a liability in the government-wide financial statements if the
studies would have been performed (see Note 10).
41
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
7. POST-EMPLOYMENT MEDICAL INSURANCE:
a. Plan Description:
The City agreed via contract with each employee association to provide post-employment
medical insurance to retirees. The benefits are based on years of service and are
available to all retiree who meet all three of the following criteria:
• At the time of retirement the employee is employed by the City.
• At the time of retirement the employee has a minimum often years of service creditor
is granted a service connected disability retirement.
• Following official separation from the City, CALPERS grants a retirement allowance.
The City's obligation to provide the benefits to a retiree ceases when either of the
following occur:
• During any period the retiree is eligible to receive health insurance at the expense of
another employer.
• The retiree becomes eligible to enroll automatically or voluntarily in Medicare.
If a retiree dies, the benefits that would be payable for his or her insurance are provided to
the spouse or family for 18 months. Benefits for insurance premiums are payable based
on the years of service credit for the retiree. The retiree may use the subsidy for any of
the insurance plans that the City's active employees may enroll.
b. Accounting and Funding:
The Retiree Medical Insurance Fund is an agency fund. Other funds contribute on a
periodic basis. Employees do not contribute. The actuarial assumptions for the plan are
identical to the assumptions used for the Retirement Supplement Plan (see Note 6).
Below are the required disclosures for this plan (in thousands):
Number of active participants 1,033
Employer's actuarially required contributions 766
Employer's actual contributions $591
Below is a summary of the Unfunded Actuarial Accrued Liability for the plan (in
.thousands)
Actuarial accrued liability $11,307
Net assets available for plan benefits $4,595
Unfunded Actuarial Accrued Liability $6,698
42
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
7. POST-EMPLOYMENT MEDICAL INSURANCE (CONTINUED):
b. Accounting and Funding:
Under current generally accepted accounting principles, unfunded liabilities on other post-
employment benefits, are not required to be recorded in the financial statements.
8. RISK MANAGEMENT:
The City is exposed to various risks of losses related to torts; theft of, damage to and
destruction of assets; errors and omissions; injuries to employees; natural disasters and
employee health insurance claims.The City records all of these claims as expenditures in the
General Fund. The liability for these claims is recorded as part of long-term obligations in the
Government-Wide financial statements. The City records the amount of claims payable at
year-end expected to be paid in the next 12 months as a liability in the General Fund in the
fund financial statements. The full amount of claims is reported as a liability in the
government-wide financial statements. Liabilities include amounts incurred, but not reported.
Liability Claims:
Claims of up to $1,000,000 are paid from the General Fund. The City is also-a participant in
the Big Independent Cities Excess Pool Joint Powers Authority (BICEP) which provides
general liability insurance of$24,000,000 above the City's retention of $1,000,000. BICEP
was created by a joint powers agreement between the City of Huntington `Beach and four
other local entities for the purpose of providing joint insurance coverage and related risk
management services for member cities. BICEP allows member entities to finance claims
payment pool for certain liability claims in excess of $1 million to a limit of $25 million.
BICEP's governing board has one representative from each city(either a member of the City
Council or designate). Current members must approve any changes to the board. Each
participating City pays an insurance premium to BICEP that is used to fund the operating and
debt service requirements.
Workers' compensation claims of up to$350,000 per claim and health claims of greater than
$100,000 per claim are paid from these funds.
The City purchases independent insurance coverage for health and workers' compensation
claims in excess of the above amounts. Settled claims have not exceeded this commercial
coverage in any of the past three fiscal years. All funds of the City participate in the program
and make payments to these funds based on estimated cost information.
The City reports liabilities at year-end that can be reasonably estimated claims prior to the
issuance of the financial statements including an estimate of incurred but not reported claims.
43
City 9 of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
8. RISK MANAGEMENT (CONTINUED):
Claims activity and liabilities relating to the current and prior year are (in thousands):
Health Workers Liability
Insurance Compensation Insurance Total
Balance October 1, 2001 $ 200 $ 4,586 $ 5,391 $ 10,177
Additions 2001-2002 6,138 3,400 2,400 11,938
Reductions-2001-2002 (5,953) (2,921) (629) (9,503)
Net Increase (Decrease)2001-2002 185 479 1,771 2,435
Balance September 30,2002 385 5,065 7,162 12,612
Additions 2002-2003 7,470 6,231 3,130 16,831
Reductions-2002-2003 (7,455) (4,727) (2,208) (14,390)
Net Increase (Decrease)2002-2003 15 1,504. 922 2,441
Balance September 30,2003 $ 400 $ 6,569 $ 8,084 $ 15,053
9. INTERFUND TRANSACTIONS:
a. Due To/From Other Funds:
The amounts at September 30, 2003 were (in thousands):
Due from
Other Due to Other
Funds Funds
Governmental Funds:
General Fund $ 3,048 $ -
Public Financing Authority 3,048
Non-Major Governmental Funds 4,123 4,123
Proprietary Funds
Water Fund 1,527 -
Non-Major Proprietary Funds - 1,527
Total Due to/from Other Funds $ 8,698 $ 8,698
44
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
9. INTERFUND TRANSACTIONS (CONTINUED):
b. Transfers In/Out:
The amounts at September 30, 2003 were (in thousands): .
Transfers In Transfers Out
Proprietary Funds $ 35 $ (5,572)
Governmental Funds 54,463 (57,096)
Internal Service Funds 8,170 -
Total 62,668 (62,668)
Transfers Out
Non-Major Total
ransfers In: Redevelopment Public Financing Governmental Governmental
General Fund Agency Authority Grants Funds Funds
enera►Fund $ - $ 6,200 $ - $ - $ 1,678 $ 7,878
Redevelopment Agency 20,572 - - - 573 21,145
Public Financing Authority 2,934 226 - - 1,276 4,436
Grants 222 - - - 2,514 2,736
Non-Major Governmental Funds 794 1,799 7,003 2,142 -958 12,696
otal Governmental Funds 24,522 8,225 7,003 2,142 6,999 48,891
Non-Major Enterprise Funds - 35 - 35
Internal Service Funds 8,170 - - - 8,170
Total Transfers Out $ 32,692 $ 8,26 $ 7,003 $ 2,14 $ 6,999 57,096
Transfers Out
ransfers I n. Non-Major Total Transfers
Water Fund Enter rise Funds In
General Fund $ - $ 19 $ 8,072
Redevelopment Agency 3,018 24,163
Public Financing Authority - 383 4,819
Grants - 2,736
Non-Major Governmental Funds - 1,977 14,673
Total Governmental Funds 3,018 2,554 54,463
Non-Major Enterprise Funds 35
Internal Service Funds - 8,170
Total Transfers Out $ 3,0181 $ 2,55 $ 62,668
45
City of Huntington Beach*
Notes to Financial Statements
For the Year Ended September 30, 2003
9. INTERFUND TRANSACTIONS (CONTINUED):
c. Other:
Certain amounts in the accompanying financial statements are recorded as `other financing
sources (uses)". These amounts represent differences in accounting between governmental
funds and enterprise funds, and changes in accounting for loans to the Redevelopment
Agency described in note 12(d).
Reclassification of Interfund Advances $ 16,018
Proceeds from Agency Fund 2,318
Long-Term Debt from Internal Service Funds (1,610)
Capital Assets Reclassifications for Change in Fund Type (1,743)
1. Reclassification of Interfund Advances-This amount represents the accrued, unpaid
interest on advances from the City to the Redevelopment Agency. For this fiscal year,the
City changed how these are accounted for(see note 12d). In prior years this interest was
recorded as an expense in the Redevelopment Agency and deferred revenue in the
various funds (which did not affect fund balance). Thus, there is a difference in the
amounts transferred in and out of the Redevelopment Agency.
2. Proceeds from Agency Fund -This amount represents the reclassification of this fund
from an agency fund to a debt service fund. This was caused by a court decision that
affirmed a specific liability.
3. Capital Assets Reclassifications for Change in Fund Type -This amount represents
the difference caused by the reclassification of the Cultural Affairs Fund from an
enterprise fund to a special revenue fund. The value of the plant, property, and
equipment is recorded here.
4. Long-Term Debt from Internal Service Funds - This amount represents the
reclassification of the Workers Compensation, and Employee Health internal service
funds to the General Fund. Since internal service funds recognize the total amount of
claims payable and the General Fund recognized the amount of claims at year-end that
will be paid within one year, there is a difference in the transfers.
46
City of Huntington Beach 0.
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS:
Below is a schedule of changes in long-term obligations for the year (in thousands).
Principal
October 1, September 30, Accrued Due Within
Governmental Activities: Note 2002 Additions Retirements 2003 Interest One Year
Public Financing Authority:
1997 Leasehold Revenue Bonds 10(a)(1) $ 6,070 $ - $ (555) $ 5,515 $ 81 $ 575
2000 Certificates of Participation 10(a)(2) 17,295 - (565) 16,730 71 590
2001-a Lease Revenue Bonds 10(a)(3) 30,780 - (560) 30,220 117 585
2001-b Lease Revenue Bonds 10(a)(4) 29,275 - (1,475) 27,800 181 1,535
Total Public Financing Authority 83,420 - (3,155) 80,265 449 3,285
Redevelopment Agency:
1999 Tax Allocation Refunding Bonds 10(b)(1) 9,470 - (310) 9,160 46 320
2002 Tax Allocation Refunding Bonds 10(b)(2) 20,900 - (685) 20,215 143 750
Mayer Disposition and Development
Agreement 10(b)(3) 11,280 - (731) 10,549
Section 108 Loan 10(b)(4) 7,890 - (260) 7,630 97 280
Note Payable 10(b)(5) 293 - (293) - - -
Total Redevelopment Agency 49,833 - (2,279) 47,554 287 1 350
Other Long-Term Obligations:
Reservoir Hill Assessment Bonds 10(c)(1) 415 - (55) 360 2 $ 55
Energy Financing Loan 10(c)(2) 742 (197) 545 9 209
Leases Payable 10(c)(3) 4,107 4,054 (1,741) 6,420 - 1,795
Compensated Absences 10(c)(4) 8,950 - (727) 8,223 2,050
Net Pension Obligation 10(c)(6) 8,593 - (251) 8,342 - -
Claims Payable 10(c)(5) 12,612 16,831 (14,390) 15,053 - 5,900
Property Tax Claims 10(c)(6) - 22,138 - 22,138 - 22,138
Total Other Long-Term Obligations 35,419 43,023 (17,361) 61,081 11 32,147
Total Long-Term Obligations-
Governmental Activities $168,672 $ 43,023 $ (22,795) $ 188,900 $ 747 $ 36,782
Below are reconciliations from amounts in the above table to amounts in the accompanying
government-wide financial statements (in thousands):
Proceeds of Long-Term Debt in Governmental Fund Financial Statements $ 26,192
Items Not Recorded as Proceeds of Long-Term Debt:
Increase in Claims Payable 16,831
Additions in Above Schedule $ 43,023
Principal Paid in Governmental Fund Financial Statements $ 7,427
Decrease in Claims Payable 14,390
Decrease in Net Pension Obligation 251
Decrease in Compensated Absences 727
Retirements in Above Schedule $ 22,795
47
City of Huntington Beac*
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
Below is a reconciliation of the amounts in the above schedule to the amounts in the
government-wide financial statements (in thousands)
a. Public Financing Authority
(1.) 1997 Public Financing Authority Revenue Bonds:
Year of Issuance 1997
Type of Debt Lease Revenue Bonds
Original Principal Amount $8,070,000
Security Lease Agreement with City for
Central Library
Interest Rates 5.00% to 5.50%
Interest Payment Dates June 15 and December 15 th
Principal Payment Dates December 15
Purpose of Debt Construct Pier Plaza and
Purchase 800 MHZ System
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30 Principal Interest Total
2004 $ 575 $ 278 $ 853
2005 610 245 855
2006 640 214 854
2007 665 171 836
2008 80 163 243
2009-2013 475 746 1,221
2014-2018 610 597 1,207
2019-2023 805 406 1,211
2024-2028 1,055 151 1,206
Total $ 5,515 $2,971 $ 8,486
48
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
a. Public Financing Authority
(2.) 2000 Public Financing Authority Certificates of Participation:
Year of Issuance 2000
Type of Debt Certificates of Participation
Original Principal Amount $18,310,000
Security Lease with City
Interest Rates 4.0% to 5.0%
Interest Payment Dates September 1S and March 1S
Principal Payment Dates September 1s'
Purpose of Debt Capital improvements and
defeasance of Emerald Cove
Certificates of Participation (see
note 14)
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30 Principal Interest Total
2004 $ 590 $ 852 $ 1,442
2005 615 827 1,442
2006 640 801 1,441
2007 670 773 1,443
2008 700 744 1,444
2009-201,3 3,025 3,258 6,283
2014-2018 3,115 2,554 5,669
2019-2023 3,235 1,626 4,861
2024-2028 2,795 847 3,642
2029-2030 1,345 110 1,455
Total $ 16,730 $12,392 $ 29,122
49
City of Huntington Beach•
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
.a. Public Financing Authority
(3). 2001(a) Public Financing Authority Lease Revenue Bonds:
Year of Issuance 2001
Type of Debt Lease Revenue Bonds
Original Principal Amount $31,360,000
Security Lease Agreement with City for
Public Buildings
Interest Rates 2.45% to 5.0%
Interest Payment Dates March 1 st and September 1S
Principal Payment Dates September 1st
Purpose of Debt Construct Sports Complex and
South Beach Phase II
Improvements
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30 Principal Interest Total
2004 $ 585 $ 1,401 $ 1,986
2005 605 1,378 1,983
2006 630 1,354 1,984
2007 650 1,333 1,983
2008 675 1,312 1,987
2009-2013 3,775 6,156 9,931
2014-2018 4,640 5,285 9,925
2019-2023 5,835 4,092 9,927
2024-2028 7,425 2,501 9,926
2029-2030 5,400 550 5,950
Total $30,220 $ 25,362 $ 55,582
50
City of Huntington Beach
Notes to Financial.Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
a. Public Financing Authority
(4). 2001(b) Public Financing Authority Lease Revenue Bonds:
Year of Issuance 2001
Type of Debt Lease Revenue Bonds
Original Principal Amount $31,095,000
Security Lease on Civic Center Buildings
Interest Rates 4.0% to 5.0%
Interest Payment Dates August 1, February 1
Principal Payment Dates August 1
Purpose of Debt Defease Civic Improvement
Corporation Certificates
Year
Ending
September
30, Principal Interest Total
2004 $ 1,535 $ 1,084 $ 2,619
2005 1,595 1,023 2,618
2006 1,640 975 2,615
2007 1,690 926 2,616
2008 1,745 875 2,620
2009-2013 9,775 3,316 13,091
2014-2018 8,785 1,235 10,020
2019 1,035 52 1,087
Total $ 27,800 $ 9,484 $ 37,284
51
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
b. Redevelopment Agency:
(1.) 1999 Redevelopment Agency Tax Allocation Refunding Bonds:
Year of Issuance 1999
Type of Debt Tax Allocation Refunding Bonds
Original Principal Amount $10,835,000
Security Tax Increment
Interest Rates 3.00% to 5.05%
Interest Payment Dates February 1" and August 1S
Principal Payment Dates August 1S
Purpose of Debt Prepay Agency's 1992 Loans to
Public Financing Authority
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30 Principal Interest Total
2004 $ 320 $ 278 $ 598
2005 335 245 580
2006 350 214 564
2007 365 171 536
2008 380 163 543
2009-2013 2,145 746 2,891
2014-2018 2,705 597 3,302
2019-2023 2,200 406 2,606
2024 360 53 413
Total $ 9,160 $ 2,873 $ 12,033
52
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
b. Redevelopment Agency:
(2.) 2002 Redevelopment Agency Tax Allocation Refunding Bonds:
Year of Issuance 2002
Type of Debt Tax Allocation Refunding Bonds
Original Principal Amount $20,900,000
Security Tax Increment
Interest Rates 2.00% to 5.00%
Interest Payment Dates February 1S and August 1S
Principal Payment Dates August 1S
Purpose of Debt Prepay Agency's 1992 Loans to
Public Financing Authority and
fully defease 1992 Public
Financing Authority bonds
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30, Principal Interest Total
2004 $ 750 $ 860 $ 1,610
2005 765 841 1,606
2006 790 822 1,612
2007 815 798 1,613
2008 845 771 1,616
2009-2013 4,760 3,372 8,132
2014-2018 5,905 2,283 8,188
2019-2023 4,805 875 5,680
2024 780 39 819
Total $ 20,215 $ 10,661 $ 30,876
(3). Mayer Disposition and Development Agreement:
In fiscal year 1996-97, the Agency entered into a disposition and development agreement
with Robert Mayer Corporation (Corporation)concerning additional development adjacent
to the Waterfront Hotel. Under the agreement, the Corporation would advance payments
for the project costs with the Agency reimbursing up to $16,750,000 of the costs. As of
September 30, 2003, the Agency obligation under the agreement amounted to
$10,549,000. Project-generated revenues as available will repay these amounts over the
time needed to fully amortize the advance.
53
• City of Huntington Beach•
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
b. Redevelopment Agency:
(4.) Section 108 Loan:
Year of Issuance 2000
Type of Debt Loan from Federal Government
Original Principal Amount $8,570,000
Security Loan Agreement with Federal
Government
Interest Rates 7.7%
Interest Payment Dates February 1st and August 1S
Principal Payment Dates August 1S
Purpose of Debt I Capital Improvements
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30, Principal Interest Total
2004 $ 280 $ 581 $ 861
2005 300 561 861
2006 315 540 855
2007 340 518 858
2008 365 493 858
2009-2013 2,220 2,026 4,246
2014-2018 3,070 1,051 4,146
2019 740 59 799
Total $ 7,630 $ 5,829 $ 13,484
54
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
c. Other Long-Term Obligations:
(1). Reservoir Hill Assessment Bonds:
Year of Issuance 1989
Type of Debt 1915 Improvement Act Bonds
Original Principal Amount $1,653,905
Security Property tax assessments
Interest Rates 6.00% to 8.15%
Interest Payment Dates March 2" and September 1S
Principal Payment Dates September 2"
Purpose of Debt Capital Improvements
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30, Principal Interest Total
2004 $ 55 $ 58 $ 113
2005 65 51 116
2006 70 42 112
2007 170 33 203
Total $ 360 $ 184 $ 544
(2.) Energy Financing Loan:
Year of Issuance 1995
Type of Debt Note Payable — State of
California
Original Principal Amount $1,173,000
Security Loan Agreement
Interest Rates 6.1%
Interest Payment Dates December 22 nd and June 22"
Principal Payment Dates December 22" and June 22"
Pur ose of Debt Capital Im rovements
55
• City of Huntington Beach,
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
c. Other Long-Term Obligations:
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30, Principal Interest Total
2004 $ 209 $ 30 $ 239
2005 221 18 239
2006 115 10 125
Total $ 545 $ 58 $ 603
(3). Leases Payable:
The City entered into capital leases for various items:
Year of Issuance 1993 through 2003
Type of Debt Capital Leases
Original Principal Amount Various ($93,000 to $1,200,000)
Security Lease Agreement
Interest Rates 5.0% to 6.9%
Interest Payment Dates Monthly, Quarterly, Semi-
Annually
Principal Payment Dates Monthly, Quarterly, Semi-
Annually
Purpose of Debt Equipment Financing
Future minimum lease payments to maturity are (in thousands):
Year Ending Governmental
September 30, Activities
2004 $2,054
2005 1,884
2006 988
2007 489
2008 -2013 1,833
Total minimum lease payments 7,248
Less interest (828)
Total $6,420
56
QCity of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
c. Other Long-Term Obligations:
(4) Compensated Absences:
There is no repayment schedule to pay the compensated absences amount of$8,223,000
relating to governmental operations. The General Fund typically liquidates the vacation
and sick leave liability.
(5) Net Pension Obligation:
There is no fixed repayment schedule to fund the actuarial liability for the unfunded net
pension obligation totaling $8,342,000 for the City's Retirement Supplement Plan
described in Note 6. The amount will be funded through a contribution rate determined by
an independent actuarial study. This amount is significantly less than the total unfunded
liability for this plan since actuarial studies only began in 1991, which was after the plan
was in place.
(5). Claims Payable:
There is no repayment schedule for the claims payable of$15,053,000 described in note
8. The City pays the claims upon final settlement.
(6). Property Tax Claims:
During the year, the California State Appellate Court ruled that the City improperly levied
and collected property taxes relating to City pension costs for the years of 1997-98 to
2000-2001. The City chose not to petition for Supreme Court review. The total potential
tax refund is$18,397,049 plus estimated interest of$3,741,000). The actual liability may
be less depending on the number of taxpayers that request a refund.
d. Long-Term Obligations — Business Activities:
Below is a schedule of the long-term obligations of business activities (in thousands):
Principal
Long-Term Obligations-Business October September Accrued Due Within
Activities: 1,2002 Additions Retirements 30,2003 Interest One Year
Compensated Absences 10(d)(1) $ 491 $ 132 $ - $ 623 $ - $ 125
Leases Payable 10(d)(2) 595 - (345) 250 - 198
Total Long-Term Obligations-Business
Activities $ 1,086 $ 132 $ (345) $ 873 $ - $ 323
57
City of Huntington Beacto
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
d. Long-Term Obligations — Business Activities:
(1.) Compensated Absences:
There is no repayment schedule for the compensated absences amount of $623,000
relating to business activities.
(2.) Leases Payable:
The City entered into capital leases for various items:
Year of Issuance 1993 through 2002
Type of Debt Capital Leases
Original Principal Amount Various
Security Lease Agreement
Interest Rates 5.0% to 6.9%
Interest Payment Dates Monthly, Quarterly, Semi-
Annually
Principal Payment Dates Monthly, Quarterly, Semi-
Annually
Purpose of Debt Equipment Financing
Future minimum lease payments to maturity are (in thousands):
Year Ending
September 30, Business-Type Activities
2004 $ 81
2005 77
2006 77
2007 38
Total minimum
lease payments 273
Less interest (23)
Total $250
58
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
(e). Long-Term Obligations for which City is not Liable in any Manner:
Obligations Not Recorded in Financial
Statements:
October 1, September
Community Facilities Districts: 2002 Additions Retirements 30,2003
Community Facilities District No. 1990-1
Special Tax Refunding Bonds 10(e)(1) $ 2,155 $ - $ (85) $ 2,070
Community Facilities District 2000-1 Special
Assessment Tax Bonds 10(e)(2) 16,000 - - 16,000
Community Facilities District NO.2002-1 4,900
Special Assessment Tax Bonds 10(e)(3) 4,900
Total Community Facilities Districts 23,055 - (85) 22,970
No-Commitment Debt 10(e)(4) 51,695 - (22,195) 29,500
Defeased Debt Outstanding 10(e)(5) 13,580 - (13,580) -
Total Obligations Not Recorded in
Financial Statements $ 88,330 $ - $ (35,860) $ 52,470
(1). Community Facilities District 1990-1 2001 Special Tax Refunding Bonds:
Year of Issuance 2001
Type of Debt Community Facilities District
Assessment Bonds
Original Principal Amount $2,155,000
Security Special Tax Levies
Interest Rates 4.00% to 5.40%
Interest Payment Dates April 1 st and October 1 st
Principal Payment Dates October 1 st
59
City of Huntington Beach•
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
(e). Long-Term Obligations for which City is not Liable in any Manner:
(1). Community Facilities District 1990-1 2001 Special Tax Refunding Bonds:
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30, Principal Interest Total
2004 $ 75 $ 103 $ 178
2005 80 100 180
2006 85 96 181
2007 85 93 178
2008 90 90 180
2009-2013 510 384 894
2014-2018 660 241 901
2019-2021 485 53 538
$ 2,070 $ 1160 $ 3,230
(2.) Community Facilities District 2000-2001 Special Tax Bonds:
Year of Issuance 2001
Type of Debt Community Facilities District
Assessment Bonds
Original Principal Amount $16,000,000
-Security Special Tax Levies
Interest Rates 3.80% to 6.40%
Interest Payment Dates September 1" and March 1S
Principal Payment Dates September 1st
Purpose of Debt Public Improvements for Grand
Coast Resort
60
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
(e). Long-Term Obligations for which City is not Liable in any Manner:
(2.) Community Facilities District 2000-2001 Special Tax Bonds:
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30, Principal Interest Total
2004 $ 245 $ 988 $ 1,233
2005 255 979 1,234
2006 265 968 1,233
2007 280 956 1,236
2008 295 943 1,238
2009-2013 1,710 4,466 6,176
2014-2018 2,290 3,892 6,182
2019-2023 3,120 3,059 6,179
2024-2028 4,265 1,915 6,180
2029-2031 3,275 431 3,706
$ 16,000 $ 18,597 $ 34,597
(3.) Community Facilities District Boeing:
Year of Issuance 2002
Type of Debt Community Facilities District
Assessment Bonds
Original Principal Amount $4,900,000
Security S ecial Tax Levies
Interest Rates 3.80% to 6.20%
Interest Payment Dates March 1 S and September 1st
Principal Payment Dates September 1st
61
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
10. LONG-TERM OBLIGATIONS (CONTINUED):
(e). Long-Term Obligations for which City is not Liable in any Manner:
(3.) Community Facilities District Boeing:
Debt service requirements to maturity are (in thousands):
Year
Ending
September
30, Principal Interest Total
2004 $ 5 $ 303 $ 308
2005 10 303 313
2006 15 302 317
2007 20 301 1,680
2008 30 300 1,715
2009-2013 280 1,468 1,748
2014-2018 580 1,362 1,942
2019-2023 1,000 1,140 2,140
2024-2028 1,605 288 2,023
2029-2031 1,355 177 1,532
$ 4,900 $ 5,944 $ 13,718
(4.) No- Commitment Debt:
The City is involved in various bond issues where the City or Redevelopment Agency
issued bonds to assist in the financing of residential developments. A trustee holds all
funds and.payment cannot be made from any other source than the mortgages received.
These bond issues are (in thousands):
Outstanding
September 30, Original Issue
Bond Issue 2003 Amount
Five Points Senior Project Multi-Family Housing $9,500 $9,500
Revenue Bonds — Series A— 1991
Huntington Breakers Mortgage Revenue Bonds $16,000 16,000
Refunding Issue — 1996 Series A
62
OCity of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
11. CAPITAL ASSETS:
a. Changes in Capital Assets:
Capital asset activity for the year was (in thousands):
Balance, Beginning
Governmental Activities: of Year Additions Dispositions Balance, End of Year
Capital Assets, not depreciated:
Land $ 317,391 $ 8,641 $ (2,937) $ 323,095
Construction in Progress 22,202 16,387 (26,772) 11,817
Joint Ventures 328 - - 328
Total Capital Assets,not depreciated 339,921 25,028 (29,709) 335,240
Capital Assets being depreciated:
Buildings 86,469 25,145 - 111,614
Machinery&Equipment 50,189 2,427 (1,043) 51,573
Infrastructure 274,079 6,268 - 280,347
Total Capital Assets being depreciated 410,737 33,840 (1,043) 443,534
Less accumulated depreciation:
Buildings (22,192) (1,987) - (24,179)
Machinery&Equipment (27,531) (5,218) 753 (31,996)
Infrastructure (135,918) (5,476) - (141,394)
Total accumulated depreciation (185,641) (12,681) 753 (197,569)
Total depreciated, net 225,096 21,159 (290) 245,965
Total Capital Assets 750,658 58,868 (30,752) 778,774
Total Accumulated Depreciation (185,641) (12,681) 753 (197,569)
Capital Assets of Governmental
Activities-Net $ 565,017 $ 46,187 $ (29,999) $ 581,205
63
City of Huntington Beach*
Notes to Financial Statements
For the Year Ended September 30, 2003
11. CAPITAL ASSETS (CONTINUED):
a. Changes in Capital Assets:
Balance, Beginning
Business Activities: of Year Additions Dispositions Balance, End of Year
Capital Assets, not depreciated:
Land $ 8,598 $ (759) $ 7,839
Construction in Progress 7,845 7,198 (6,972) 8,071
Total Capital Assets, not depreciated 16,443 7,198 (7,731) 15,910
Capital Assets being depreciated:
Buildings 30,882 9,625 (1,248) 39,259
Machinery and Equipment 7,208 249 (32) 7,425
Infrastructure 83,711 3,385 (291) 86,805
Total Capital Assets being depreciated 121,801 13,259 (1,571) 133,489
Less Accumulated Depreciation: -
Buildings (7,251) (748) 175 (7,824)
Machinery&Equipment (3,014) (608) 34 (3,588)
Infrastructure (47,602) (1,247) (48,849)
Total accumulated depreciation (57,867) (2,603) 209 (60,261)
Total depreciated, net 63,934 10,656 (1,362) 73,228
Total Capital Assets 138,244 20,457 (9,302) 149,399
Total Accumulated Depreciation (57,867) (2,603) 209 (60,261)
Capital Assets of Business Activities
-Net $ 80,377 $ 17,854 $ (9,097) $ 89,134
64
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
11. CAPITAL ASSETS (CONTINUED):
b. Depreciation Expense:
Depreciation in.governmental activities was charged to the following functions/programs
in the Statement of Activities (in thousands)
Department:
Administrative Services $ 11
Building 29
City Attorney 4
City Administration 63
City Clerk 4
City Treasurer 34
Community Services 1,089
Economic Development 2
Fire 702
Information Systems 1,063
Library Services 359
Non-Departmental 214
Planning 14
Police 2,506
Public Works 6,587
TOTAL $ 12,681
Depreciation in business activities was charged to the following functions/programs in the
Statement of Activities (in thousands):
Water Fund .$1,928
Sewer Service 720
Emerald Cove 82
Emergency Fire Medical 138
TOTAL $ 2,881
65
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
11. CAPITAL ASSETS (CONTINUED):
c.Capital Assets Acquired via Capital Leases:
At year-end the City's assets acquired through outstanding capital leases (see note 11)
were (in thousands):
Governmental
Activities Business Activities
Machinery and Equipment $4,708 $824
Less: Accumulated depreciation 1,542 129
Total 1 $3,166 $695
12.COMMITMENTS AND CONTINGENCIES:
a. Legal Actions:
There are legal actions pending against the City resulting from normal operations. In the
opinion of management and the City Attorney, the financial resolution of these actions
should not have a significant impact on these financial statements.
b. Huntington Beach Union High School District (HBUHSD) Sharing Agreement:
In 1997 the City Council agreed to pay the HBUHSD certain increased sales tax revenues
relating to the development of a new commercial site by Home Depot. The City will retain
the first$50,000 of annual increased sales tax revenues and will pay HBUHSD a portion
of the amount over $50,000 until the year 2015/2016.
c. Disposition and Development Agreements:
In June 1999, the Redevelopment Agency entered into a disposition and development
agreement with the CIM Group, LLC to allow development of a hotel, retail and restaurant
improvements and a public parking facility. The project costs are to be paid initially by the
developer with the Agency reimbursing the developer a maximum of$7.9 million pursuant
to a Third Implementation Agreement approved on October 21, 2002.
:.During the year the Redevelopment Agency entered into a Disposition and Development
Agreement with a private developer regarding the development of the Huntington Center
Mall. This agreement will require payments by the Agency pending certain actions by the
developer. At year-end, no Agency liability had been incurred.
66
OCitY 9 of Huntington Beach
-
Notes to Financial Statements
For the Year Ended September 30, 2003
12.COMMITMENTS AND CONTINGENCIES (CONTINUED):
c. Disposition and Development Agreements:
On January 2, 2002 the Redevelopment Agency entered into an Owner Participation
Agreement with Fountains Huntington Beach, LLC, to provide$2 million to meet the cost
of providing and maintaining 80 affordable housing units for a period of 60 years. At year-
end no liability had been incurred. The expectation is that the amount will be disbursed in
fiscal year 2003-2004.
On 9/2/03 the Redevelopment.Agency Approved a Cooperation Agreement Regarding
Capital Improvements in the Southeast Coastal Redevelopment Project with the City.
This agreement commits the Redevelopment Agency to reimburse the City for a number
of capital improvement projects to be undertaken as part of the Five Year Capital
Improvement Program in the Southeast Redevelopment project area starting in FY
2003/04 as they are undertaken.
d. Redevelopment Agency Debt to City:
The City has advanced money to the Redevelopment Agency for capital improvements
and operations. There is no fixed repayment schedule for these advances and the
Council/Agency has no requirement for the timing of any repayment. Accordingly,the City
has not recorded the advances in the accompanying financial statements. These
advances have been made since 1984 and include direct advances of cash, overhead
charges, deferred development fees, deferred land sales, and interest. Below is a
schedule of the activity for the year (in thousands):
67
City of Huntington Beact
Notes to Financial Statements
For the Year Ended September 30, 2003
12.COMMITMENTS AND CONTINGENCIES (CONTINUED):
d. Redevelopment Agency Debt to City:
Amount @ Amount @
GENERAL FUND: 10/1/02 Reductions Additions 9/30/2003
Direct Advances $ 11,806 $ (221) $ - $ 11,586
Overhead Charges 6,752 (184) - 6,567
Land Sales 32,833 - - 32,833
Interest 40,227 (9,351) 3,326 34,201
Total General Fund $ 91,618 $ (9,756) $ 3,326 $ 85,188
Sewer Development Fund:
Direct Advances $ 131 $ - $ - $ 131
Deferred Development Fees 72 - 7 79
Interest 159 - 12 171
Total Sewer Development $ 362 $ - $ 19 $ 381
Gas Tax Fund:
Direct Advances $ 500 $ (500) $ - $ -
Interest 780 (800) 20 -
Total Gas Tax $ 1,280 $ (1,300) $ 20 $ -
Drainage Fund:
Direct Advances $ 250 $ - $ - $ 250
Deferred Development Fees 54 - - 54
Interest 317 - 23 340
Total Drainage $ 621 $ - $ 23 $ 644
Park Acquisition and Development Fund:
Land Sales $ 1,741 $ - $ - $ 1,741
Deferred Development Fees 2,271 - 146 2,417
Interest 2,556 (244) 165 2,477
Total Park Acquisition and Development $ 6,568 $ (244) $ 311 $ 6,635
Capital Improvement Fund:
Direct Advances $ 200 $ - $ - $ 200
Interest 266 - 17 283
Total Capital Improvement Fund $ 466 $ - $ 17 $ 483
Water Fund:
Direct Advances $ 1,138 $ - $ - $ 1,138
Interest 1,881 - 110 1,990
Total Water Fund $ 3,019 $ - $ 110 $ 3,128
Total All Funds $ 103,933 $ (11,300) $ 3,825 $ 96,458
68
OCity of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2003
12.COMMITMENTS AND CONTINGENCIES (CONTINUED):
d. Redevelopment Agency Debt to City:
The reductions were comprised of the following (in thousands):
Cash Repayments $ 7,500
Other Reductions(non-cash) 3,800
Total Reductions $ 11,300
The cash repayments are recorded as transfers from the Redevelopment Agency to the fund
receiving the repayment.
13. OTHER INFORMATION:
a. Expenditures Exceeding.Appropriations:
Expenditures exceeded appropriations at the departmental level in the funds shown (in
thousands):
EXPENDITURES EXCEEDING APPROPRIATIONS
General Fund:
Current:
Fire $ (149)
Police (1,483)
Library Services (48)
Debt Service:
Principal (1,124)
Public Financing Authority
Debt Service:
Principal (820)
Redevelopment Agency
Debt Service:
Principal (371)
69
City of Huntington Beach*
Notes to Financial Statements
For the Year Ended September 30, 2003
13. OTHER INFORMATION (CONTINUED):
b. Fund and Accumulated Deficits:
The following funds had total fund deficits at year-end (in thousands):
FUND DEFICITS
Governmental Funds:
Non-Major Governmental Funds:
Drainage $ (1,082)
Capital Improvement (1,748)
Pier (1,206)
Sewer Development (233)
Enterprise Funds:
Refuse (890)
The deficits in these funds will be eliminated through monitoring of expenditures and
reviewing fee structures. The unrestricted deficit ($12,924,000) in the government-wide
financial statements for governmental activities is primarily a result of the above deficits
and the property tax court decision (see note 10(c)(6)).
c. Prior Period Adjustment (Government-Wide Financial Statements)
In the prior year, the City incorrectly recorded a liability for deferred revenue for interfund
loans totaling $16,018,000. This amount should have been classified as net assets in the
government-wide financial statements. Also, long-term claims payable from internal
service funds were excluded from the government-wide statement of net assets. These
were related to the implementation of GASB Statement 34.
Below is a schedule of the restatement of beginning net assets for the governmental
activities (in thousands):
Beginning Net Assets- Governmental $473,573
Activities
Deferred Interest on Interfund Loans 16,018
Debt from Internal Service Funds (10,084)
Beginning Net Assets- Governmental $479,507
Activities (Restated)
70
City of Huntington Beach
Required Supplementary Information
September 30, 2003
Budgetary Information
The City Council must annually adopt a budget by September 30 of the prior fiscal year. The
budgeted expenditures become the appropriations to the various departments. The budget includes
estimates for revenue that, along with the appropriations, compute the budgetary fund balance.The
appropriated budget covers substantially all governmental fund expenditures with the exception of
capital improvement projects (capital projects funds) carried forward from prior years, which
constitute a legally authorized non-appropriated budget. The City Council may amend the budget at
any time. The City Administrator may transfer funds from between object purposes (personal
services, operating expenditures or capital outlay expenditures)within the same department without
changing the total departmental budget. Department heads may transfer funds from like object
categories of the same department. The City Council must approve any changes to departmental
budgets. Expenditures may not exceed appropriations at the departmental level. All unused
appropriations lapse at year-end. During the year the City Council made several supplemental
appropriations with included carryovers of prior year encumbrances all of which were within available
fund balance and estimated revenue amounts.
The City Council adopts governmental fund budgets consistent with generally accepted principles as
legally required. There are no significant non-budgeted financial activities. Revenues for special
revenue funds are budgeted by entitlements, grants and estimates of future development and
economic growth. Expenditures and transfers are budgeted based upon available financial resources.
On or before May 31 of each year, each department submits data to the City Administrator for budget
preparation. Staff prepares the budget by fund, function and activity. The budget includes information
on past years, current year estimates and requested appropriations for the next fiscal year. Before
August 1,the City Council receives the proposed budget. The City Council holds public hearings and
may amend the budget by a majority vote. Changes to the budget must be within the available
revenues and reserves.
These financial statements show budgetary data for the General, Special Revenue, Capital Projects
and Debt Service Funds. The original budget, revised budget, actual expenditures, and variance
amounts are shown.
The City uses an encumbrance system as an aid in controlling expenditures.When the City issues a
purchase order for goods or services, it records an encumbrance until the vendor delivers the goods
or performs the service. At year-end, the City reports all outstanding encumbrances as reservations
of fund balance in governmental fund types. The City reappropriates these encumbrances into the
new fiscal year.
Below is a schedule of a budget to actual comparison of the General and Grant Fund's Revenues,
and Expenditures (in thousands):
71
C)Le?u,L'otect clizopp%plementa��
tln f+�tationin
CITY OF HUNTINGTON BEACIP
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCES-
BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30,2003
(In Thousands)
General Fund
Original
REVENUES: Budget Final Budget Actual Variance
Property Taxes $29,753 $29,753 $29,688 $ (65)
Sales Taxes 27,870 27,870 25,882 (1,988)
Utility Taxes 20,900 20,900 18,310 (2,590)
Other Taxes 11,690 11,690 11,845 155
Licenses and Permits 6,149 6,149 6,531 382
Fines,Forfeitures and Penalties 3,971 3,971 3,815 (156)
From Use of Money and Property 6,159 6,159 6,843 684
From Other Agencies 12,319 12,319 10,885 (1,434)
Charges for Current Service 11,799 11,799 9,244 (2,555)
Other 709 709 967 258
TOTAL REVENUES 131,319 131,319 124,010 (7,309)
EXPENDITURES:
Current:
City Council 265 279 269 10
City Administrator 1,892 1,891 1,559 332
City Treasurer 1,738 1,410 1,376 34
City Attorney 2,270 3,377 2,836 541
City Clerk 667 732 555 177
Administrative Services 5,136 9,757 8,323 1,434
Planning 2,950 3,059 2,403 656
Building 2,846 2,814 2,566 248
Fire 19,365 18,699 18,848 (149)
Information Systems 5,424 5,038 3,072 1,966
Police 41,077 39,342 40,825 (1,483)
Economic Development 1,055 1,126 843 283
Community Services 10,578 10,403 9,381 1,022
Library Services 3,345 3,144 3,192 (48)
Public Works 21,679 19,224 17,009 2,215
Non-Departmental 12,588 10,804 9,348 1,456
Debt Service:
Principal - 860 1,984 (1,124)
Interest - 162 162 -
TOTAL EXPENDITURES 132,875 132,121 124,551 7,570
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (1,556) (802) (541) 261
OTHER FINANCING SOURCES(USES):
Transfers In 2,325 7,700 8,072 372
Long-Term Debt from Internal Service Funds - (1,610) (1,610) -
Transfers Out (8,975) (32,692) (32,692) -
TOTAL OTHER FINANCING SOURCES(USES) (6,650) (26,602) (26,230) 372
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES _ (8,206) (27,404) (26,771) 633
FUND BALANCE-BEGINNING OF YEAR 41,745 41,745 41,745 41,745
FUND BALANCE-END OF YEAR $ 33,539 $ 14,341 $ 14,974 $ 42,378
72
CITY OF HUNTINGTON BEACH
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30,2003
(IN THOUSANDS)
Grants
Original Final
REVENUES: Budget Budget Actual Variance
From Use of Money and Property $ - $ 360 $ 596 $ 236
From Other Agencies 5,404 16,582 5,749 (10,833)
Other - - 252 252
TOTAL REVENUES 5,404 16,942 6,597 (10,345)
EXPENDITURES:
Current:'
City Treasurer - 19 1 18
Planning 162 162 141 21
Fire 18 298 173 125
Police 514 1,090 284 806
Economic Development 953 1,352 1,087 265
Community Services 152 313 272 41
Library Services 81 179 157 22
Public Works 5,160 5,343 1,082 4,261
Non-Departmental - 79 - 79
Capital Outlay 13,390 16,579 5,353 11,226
Debt Service:
Interest 260 265 260 5
TOTAL EXPENDITURES 20,690 25,414 8,810 16,869
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (15,286) (8,472) (2,213) 6,259
OTHER FINANCING SOURCES(USES):
Transfers In - 2,736 2,736 -
Transfers Out - (2,142) (2,142) -
TOTAL OTHER FINANCING SOURCES(USES) - 594 594
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES (15,286) (7,878) (1,619) 6,259
FUND BALANCE-BEGINNING OF YEAR 2,913 2,913 2,913
FUND BALANCE-END OF YEAR $ (12,373) $ (4,965) $ 1,294 $ 6,259
73
cluP)nlemeiz 2n f+�tmation
CITY OF HUNTINGTON BEACH
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 2003
SCHEDULE OF FUNDING PROGRESS
RETIREMENT PLAN- NORMAL
Entry Age Excess
Normal Assets as a
Actuarial Actuarial Percentage of
Actuarial Valuation Accrued Value of Funded Covered Covered
Date Liability(AAL) Assets Excess Assets Ratio Payroll Payroll
2000
Safety $258,857 $291,309 $32,452 112.5% $23,270 139.5 %.
Non Safety 163,688 230,236 66,548 140.7% 34,683 191.9%
Total $422,645 $621,645 $99,000 123.4% $57,953 170.8%
2001
Safety $283,438 $295,280 $11,842 104.2% $27,717 42.7 %
Non Safety 177,467 237,108 59,641 133.6% 35,985 165.7%
Total $460,905 $532,388 $71,483 115.5% $63,702 112.2 %
2002
Safety $299,052 $272,367 ($26,685) 91.1% $23,270 (114.7) %
Non Safety 191,997 223,364 31,367 140.7% 37,811 83.0 %
Total $491,049 $495,731 $4,682 101.0% 61,081 7.7
CITY OF HUNTINGTON BEACH
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30, 2003
SCHEDULE OF FUNDING PROGRESS
RETIREMENT PLAN-SUPPLEMENTAL
Entry Age Actuarial UAAL as a %
Actuarial Valuation Normal Accrued Value of Unfunded AAL Funded Covered of Covered
Date Liability Assets (UAAL) Ratio Payroll Payroll
6/30/94 Actual $ 14,673 $ 52 $ 14,725 0.4% $ 53,593 -27.5%
6/30/95 Update 15,776 290 16,066 1.8% 51,779 -31.0%
6/30/96 Actual 16,071 120) (16,1912 0.7% 54,368 -29.8%
6/30/1997 Actual 25,342 2,334 23,008 -10.1% 49,881 -46.1%
6/30/98 Update 26,493 3,251 23,242 -14.0% 48,585 -47.8%
6/30/99 Actual 28,601 4,162 24,439 -17.0% 50,723 -48.2%
6/30/2000 Update 28,844 5,077 23,767 -21.4% 57,674 -41.2%
6/30/2001 Actual 36,453 6,678 29,775 -22.4% 63,345 -47.0%
6/30/2002 Update 35,524 8,775 26,749 -32.8% 65,137 -41.1%
6/30/2003 Actual 40,436 10,474 29,962 -35.0% 65,227 -45.9%
74
Non-Major Governmental Funds
Special Revenue Funds account for revenues and expenditures legally restricted to a specific purpose.
• The Gas Tax Fund accounts for moneys allocated under the Streets and Highways Code of California. Expenditures may
be made for any street-related purpose allowed under the code.
• The Drainage Fund accounts for fees received from developers to construct and maintain the City's drainage system.
• The Public Communications Fund accounts for revenues from cable television franchises granted within the City's limits
spent on community-oriented television.
• The Narcotics Forfeiture Fund accounts for moneys received from the State of California for special law enforcement
expenditures.
• The Transportation Fund accounts for moneys received from the countywide%2 cent sales tax and other specific sources
to be spent on transportation-related expenditures.
• The Air Quality Fund accounts for revenues from the local agencies used to improve local air quality.
• The Traffic Impact Fee Fund accounts for moneys received from the traffic impact fee levied on new developments in
the City.
• The-Fourth of July Parade Fund accounts for the activities of the City's annual parade.
• The Special Library Fund accounts for revenues and expenditures related to the expanded Central Library including
some construction.
• The Park Acquisition and Development Fund accounts for fees received from developers to develop and maintain the
City's park system.
• The Cultural Affairs Fund accounts revenues and expenditures associated with the Citys'Art Center.
Debt Service Funds account for the receipts for and payment of general long-term debt.
•. The Reservoir Hill Fund records the debt service activity of the Reservoir Hill Assessment bonds.
Capital Projects Funds account for the acquisition and construction of capital assets other than those financed by proprietary
fund types.
• The Pier Fund accounts for the construction of the City's pier and surrounding area.
• The Holly Seacliffe Fund accounts for capital improvements made to the Holly Seacliff area.
• Redevelopment Agency
• The Capital Improvement Fund accounts for major new improvements and equipment purchased for governmental
operations
• The Parking in-lieu Fund records construction activity from developers who pay fees in-lieu of directly providing parking
facilities to the City
• The Sewer Development Fund accounts for fees received from developers to construct and maintain sewer facilities.
CITY OF HUNTINGTON BEACH
BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2003
(in thousands)
SPECIAL REVENUE FUNDS
Public Narcotics
ASSETS: Gas Tax Drainage Communications Forfeiture Transportation
Cash and Investments $ 914 $ $ $ 629 $ 3,761
Cash and Investments with Fiscal Agent - _ _
Taxes Receivable 676 - 340
Other Receivables 27 3 28
Due from Other Funds 4,123 - _
Other Assets
TOTAL ASSETS $ 5,740 $ $ $ 632 $ 4129
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts Payable $ 12 $ $ $ _ $ 12
Accrued Payroll 9 21
Due to Other Funds - 1,082 - _
Deposits Payable _
Deferred Revenue
TOTAL LIABILITIES 21 1,082 33
FUND BALANCES:
Reserved for:
Encumbrances 345 - 4 116
Advances
Total Reserved Fund Balances 345 4 116
Unreserved Fund Balances
Unreserved,Designated for Future Expenditures 2,328 40 2,369
Undesignated 3,046 (1,082) 588 1611
Total Unreserved Fund Balance 5,374 (1,082) 628 3,980
TOTAL FUND BALANCES 5,719 (1,082) 632 4,096
TOTAL LIABILITES AND FUND BALANCES $ 5,740 $ - $ $ 632 $ 4,129
75
s •
SPECIAL REVENUE FUNDS
Park
Acquisition
Special Cultural and Total Special
Air Quality Traffic Impact Fourth of July Library Affairs Development Revenue Funds
$ 418 $ 7,727 $ 104 $ 1,717 $ 164 $ 2,754 $ 18,188
- - - - - - 1,016
2 38 3 5 1 13 120
- - - - - - 4,123
1,586 1,586
$ 420 $ 7,765 $ 107 $ 1,722 $ 165 $ 4,353 $ 25 033
$ 4 $ 315 $ 1 $ 34 $ 3 $ 1 $ 382
2 2 14 17 13 78
- - - - - - 1,082
1,586 1,586
6 317 1 48 20 1,600 3128
54 101 12 26 2 1,229 1,889
54 101 12 26 2 1,229 1889
360 4,366 94 359 15 289 10,220
- 2,981 1,289 128 1,235 9,796
360 7,347 94 1,648 143 1,524 20,016
414 7,448 106 1,674 145 2,753 21,905
$ 420 $ 7,765 $ 107 $ 1,722 $ 165 $ 4,353 $ 25,033
76
Ci:ITY OF HUNTINGTON BEACH
BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2003
(in thousands)
(continued)
DEBT
SERVICE
FUND CAPITAL PROJECTS FUNDS
Reservoir Hill
Assessment Capital
ASSETS: District Improvement Pier Holly Seaciiff Parkin in-lieu
Cash and Investments $ 85 $ - $ $ 826 $ 533
Cash and Investments with Fiscal Agent 113 1,187 - -
Taxes Receivable 51 - - -
Other Receivables 4 10 4 2
Due from Other Funds - - - -
Other Assets
TOTAL ASSETS $ 253 $ 1,187 $ 10 $ 830 $ 535
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts Payable $ - 1,260 $ 43 $ 227 $ -
Accrued Payroll 18 - -
1 Due to Other Funds = 1,657 1,173 =
Deposits Payable
Deferred Revenue 19 - - -
TOTAL LIABILITIES 19 2,935 1,216 227
FUND BALANCES:
Reserved for:
Encumbrances - - - -
Debt Service
Total Reserved Fund Balances
Unreserved Fund Balances
Unreserved,Designated for Future Expenditures - 603
Undesignated 234 (1,748) (1,206) 535
Total Unreserved Fund Balance 234 (1,748) (1,206) 603 535
TOTAL FUND BALANCES 234 (1;748) (1,206) 603 535
TOTAL LIABILITES AND FUND BALANCES $ 253 $ 1,187 $ 10 $ 830 $ 535
77
CAPITAL
PROJECTS
FUNDS
otal No
n-
Total Capital Major
Sewer Projects Govemmental
Development Funds Funds
$ $ 1,359 $ 19,632
1,187 1,300
- 1,067
16 140
- 4,123
1,586
$ $ 2,562 $ 27,848
$ 9 $ 1,539 $ 1,921
13 31 109
211 3,041 4,123
- - 1,586
19
233 4,611 7,758
- 1,889
1,889
- 603 10,823
(233) (2,652) 7,378
(233) (2,049) 18,201
(233) (2,049) 20,090
$ $ 2,662 $ 27 848
78
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2003
(IN THOUSANDS)
Special Revenue Funds
Public Narcotics
REVENUES: Gas Tax Drainage Communications Forfeiture Transportation Air Quality
Property Taxes $ $ $ $ $ _ $
Sales Taxes
2,129 -
Licenses and Permits _
From Use of Money and Property 69 9 103 4
From Other Agencies 4,536 780 - 224
Charges for Current Service - 332 - - _
Other 6 40
TOTAL REVENUES 4,605 338 789 2,272 228
EXPENDITURES:
Current:
City Council _ _ _ _ _
City Administrator
City Treasurer
City Attorney
City Clerk
Administrative Services
Planning
Building
Fire
Information Systems _
Police - - - 41 _
Economic Development - _ _ _ _
Community Services
Library Services - _ _
Public Works 469 510 76
Non-Departmental - - _ _
Capital Outlay 1,140 15 415 106
Debt Service:
Principal - - _ _
Interest
TOTAL EXPENDITURES 1,609 15 41 925 182
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 2,996 323 748 1,347 46
OTHER FINANCING SOURCES(USES):
Transfers In 1,300 - - - _
Capital Assets Reclassifications for Change in Fund Type -
Proceeds of Long-Tenn Debt
Transfers Out (1,400) (1,513) (254) (1,252)
TOTAL OTHER FINANCING SOURCES(USES) (100) (1,513) (254) (1,252)
EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES 2,896 (1,190) (254) 748 95 46
FUND BALANCE-BEGINNING OF YEAR 2,823 108 254 (116) 4,001 368
FUND BALANCE-END OF YEAR $ 5,719 $ (1,082) $ - $ 632 $ 4,096 $ 414
79
Special Revenue Funds
Park
Acquisiton Total Special
Special .Cultural and Revenue
Traffic Im act Fourthof,luly Affairs Develo ment Funds
- - 2,129
36 - - - 1,178 1,214
156 4 430 3 50 828
9 - - - 773 6,322
739 - 596 133 - 1,800
220 36 63 306 671
940 224 1,062 199 2,307 12,964
- 41
- 288 - 288
200 - - 249 449
- - 866 - 866
17 - 1,072
373 - - - 31 2,080
390 200 866 288 280 4,796
550 24 196 (89) 2,027 8,168
- 18 - 1,977 243 3,538
- - - (1,743) - (1,743)
- (517) (457) (5,393)
18 (517) 234 (214) (3,598)
650 42 (321) 145 1,813 4,570
6,898 64 1,995 940 17,335
$ 7,448 $ 106 $ 1,674 $ 145 $ 2,753 $ 21,905
80
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2003
(IN THOUSANDS)
(CONTINUED)
DEBT SERVICE FUND CAPITAL PROJECTS FUNDS
Total Non-
Reservoir Hill Total Capital Major
Assessment Capital Parking in- Sewer Projects Governmental
REVENUES: District Improvement Pier Holly Seaclifl lieu Dev, ment Funds Funds
Property Taxes $ 196 $ $ $ $ $ $ $ 196
Sales Taxes - 2,129
Licenses and Permits - 300 300 1,514
From Use of Money and Property 3 - 618 19 62 - 699 1,530
From Other Agencies - 2,052 - - - 95 2,147 8,469
Charges for Current Service - - - - 46 46 1,846
Other 18 14 14 703
TOTAL REVENUES 217 2,052 632 19 62 441 3,206 16,387
EXPENDITURES:
Current:
City Council - - - - - - _
City Administrator
City Treasurer
City Attorney
City Clerk
Administrative Services
Planning - - - - - - - _
Building - 477 - - - - 477 477
Fire - - _
Information Systems 547 547 547
Police 34 34 75
Economic Development - - 288
Community Services - - 80 - - - 80 529
Library Services - - - 866
Public Works - 448 17 204 669 1,741
Non-Departmental 16 2,052 - - - 2,052 2,068
Capital Outlay - 14,539 600 298 15,437 17,517
Debt Service: - -
Principal 120 200 - 200 320
Interest 32 40 40 72
TOTAL EXPENDITURES 168 18,337 97 600 502 19,536 24,500
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 49 (16,285) 535 (581) 62 (61) (16,330) (8,113)
OTHER FINANCING SOURCES(USES):
Transfers In - 11,135 - - - - 11,135 14,673
Capital Assets Reclassifications for Change in Fund Type - - (1,743)
Proceeds of Long-Term Debt 2,370 - 2,370 2,370
Transfers Out (200) (1,276) (130) (1,606) (6,999)
TOTAL OTHER FINANCING SOURCES(USES) 13,305 (1,276) (130) 11,899 8,301
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES 49 (2,980) (741) (581) 62 (191) (4,431) 188
FUND BALANCE-BEGINNING OF YEAR 185 1,232 (465) 1,184 473 (42) 2,382 19,902
FUND BALANCE-END OF YEAR $ 234 $ (1,748) $ (1,206) $ 603 $ 62 $ (233) $ (2,049) $ 20,090
81
CITY OF HUNTINAN BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2003
(IN THOUSANDS)
Gas Tax
REVENUES: Original Budget Final Budget Actual Variance
From Use of Money and Property $ 40 $ 40 $ 69 $ 29
From Other Agencies 5,360 5,360 4,536 (824)
TOTAL REVENUES 5,400 5,400 4,605 (795)
EXPENDITURES:
Current:
Public Works 1,325 1,259 469 790
Capital Outlay 4,050 5,014 1,140 3,874
TOTAL EXPENDITURES 5,375 6,273 1,609 4,664
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 25 (873) 2,996 3,869
OTHER FINANCING SOURCES(USES):
Transfers In 1,300 1,300 1,300 -
Transfers Out (900) (1,400) (1,400) -
TOTAL OTHER FINANCING SOURCES(USES) 400 (100) (100) -
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES 425 (973) 2,896 3,869
FUND BALANCE-BEGINNING OF YEAR 2,823 2,823 2,823 -
FUND BALANCE-END OF YEAR $ 3,248 $ 1,850 $ 5,719 $ 3,869
Drainage
REVENUES: Original Budget Final Budget Actual Variance
Charges for Current Service $ 200 $ 206 $ 332 $ 126
Other 70 70 6 (64)
TOTAL REVENUES 270 276 338 62
EXPENDITURES:
Current:
Capital Outlay 165 35 15 20
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 35 241 323 82
OTHER FINANCING SOURCES(USES):
Transfers Out - (1,513) (1,513) -
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES'AND OTHER USES 35 (1,272) (1,190) 82
FUND BALANCE-BEGINNING OF YEAR 108 108 108
FUND BALANCE-END OF YEAR $ 143 $ (1,164) $ (1,082) $ 82
Public Communications
Original Budget Final Budget Actual Variance
OTHER FINANCING SOURCES(USES):
Transfers Out 1 (254) (254) (254) -
FUND BALANCE-BEGINNING OF YEAR 254 254 254
FUND BALANCE-END OF YEAR $ - $ - $ - $
82
QCITY OF HUNTINGTO,vBEACH
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2003
(IN THOUSANDS)
Narcotics Forfeiture
REVENUES: _Original Budget Final Budget Actual Variance
From Use of Money and Property $ - $ - $ 9 $ 9
From Other Agencies 25 25 780 755
TOTAL REVENUES 25 25 789 764
EXPENDITURES:
Police 50 70 41 29
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (25) (45) 748 793
FUND BALANCE-BEGINNING OF YEAR (116) (116) (116)
FUND BALANCE-END OF YEAR $ (141) $ (161) $ 632 $ 793
Transportation
REVENUES: Original Budget Final Budget Actual Variance
Sales Taxes $ 2,316 $ 2,316 $ 2,129 $ (187)
From Use of Money and Property 150 150 103 (47)
From Other Agencies 160 160 - (160)
Other - - 40 40
TOTAL REVENUES 2,626 2,626 2,272 (354)
EXPENDITURES:
Current:
Public Works 804 1,597 510 1,087
Capital Outlay 906 1,143 415 728
TOTAL EXPENDITURES 1,710 2,740 925 1,815
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 916 (114) 1,347 1,461
OTHER FINANCING SOURCES(USES):
Transfers Out (1,252) (1,252) (1,252) -
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES 916 (1,366) 95 1,461
FUND BALANCE-BEGINNING OF YEAR 4,001 4,001 4,001
FUND BALANCE-END OF YEAR $ 4,917 $ 2,635 $ 4,096 $ 1,461
Air Quality
REVENUES: Original Budget Final Budget Actual Variance
From-Use of Money and Property $ 20 $ 20 $ 4 $ (16)
From Other Agencies 210 210 224 14
TOTAL REVENUES 230 230 228 (2)
EXPENDITURES:
Current:
Public Works 135 218 76 142
Capital Outlay 395 484 106 378
TOTAL EXPENDITURES 530 702 182 520
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (300) (472) 46 518
OTHER FINANCING SOURCES(USES):
FUND BALANCE-BEGINNING OF YEAR 368 368 368
FUND BALANCE-END OF YEAR $ 68 $ (104) $ 414 $ 518
83
CITY OF HUNTINGTON BEACH
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2003
(IN THOUSANDS)
Traffic Impact
REVENUES: Original Budget Final Budget Actual Variance
Licenses and Permits $ - $ - $ 36 $ 36
From Use of Money and Property 40 40 156 116
From Other Agencies - - 9 9
Charges for Current Service 300 300 739 439
TOTAL REVENUES 340 340 940 600
EXPENDITURES:
Current:
Public Works 50 50 17 33
Capital Outlay 2,273 2,282 373 1,909
TOTAL EXPENDITURES 2,323 2,332 390 1,942
EXCESS;OF REVENUES OVER(UNDER)EXPENDITURES (1,983) (1,992) 550 2,542
FUND BALANCE-BEGINNING OF YEAR 6,898 6,898 6,898 -
FUND BALANCE-END OF YEAR $ 4,915 $ 4,906 $ 7,448 $ 2,542
Fourth of July
REVENUES: Original Budget Final Budget Actual Variance
From Use of Money and Property $ 2 $ 2 $ 4 $ 2
Other 200 200 220 20
TOTAL REVENUES 202 202 224 22
EXPENDITURES:
Community Services 253 253 200 53
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (51) (51) 24 75
OTHER FINANCING SOURCES(USES):
Transfers In 18 18
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (51) (33) 42 75
FUND BALANCE-BEGINNING OF YEAR 64 64 64
FUND BALANCE-END OF YEAR $ 13 $ 31 $ 106 $ 75
Special Library
REVENUES: Original Budget Final Budget Actual Variance
From Use of Money and Property $ 388 $ 388 $ 430 $ 42
Charges for Current Service 750 750 596 (154)
Other 6 6 36 30
TOTAL REVENUES 1,144 1,144 1,062 (82)
EXPENDITURES:
Current:
Library Services 926 926 866 60
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 218 218 196 (22)
OTHER FINANCING SOURCES(USES):
Transfers Out (517) (517) (517) -
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (299) (299) (321) (22)
FUND BALANCE-BEGINNING OF YEAR 1,995 1,995 1,995
FUND BALANCE-END OF YEAR $ 1,696 $ 1,696 $ 1,674 $ (22)
84
CITY OF HUNTINGTON BEACH
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2003
(IN THOUSANDS)
Cultural Affairs
I
REVENUES: Original Budget Final Budget Actual Variance
Licenses and Permits $ 1 $ 1 $ - $ (1)
From Use of Money and Property - - 3 3
Charges for Current Service 54 54 133 79
Other 75 75 63 (12)
TOTAL REVENUES 130 130 199 69
EXPENDITURES:
Current:
Community Services 473 473 288 185
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (343) (343) (89) 2"
OTHER FINANCING SOURCES(USES):
Transfers In 56 1,977 1,977 -
Capital Assets Reclassifications for Change in Fund Type - (1,743) (1,743) -
TOTAL OTHER FINANCING SOURCES(USES) 56 234 234
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (287) (109) 145 254
FUND BALANCE-BEGINNING OF YEAR 149 -
FUND BALANCE-END OF YEAR $ (138) $ (109) $ 145 $ 254
Park Acquisition and Development
REVENUES: Original Budget Final Budget Actual Variance
Licenses and Permits $ 1,700 $ 1,700 $ 1,178 $ (522)
From Use of Money and Property - - 50 50
From Other Agencies 900 900 773 (127)
Other 25 25 306 281
TOTAL REVENUES 2,625 2,625 .2,307 (318)
EXPENDITURES:
Current:
Community Services 522 875 249 626
Capital Outlay 1,160 1,211 31 1,180
TOTAL EXPENDITURES 1,682 2,086 280 1,806
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 943 539 2,027 1,488
OTHER FINANCING SOURCES(USES):
Transfers In - 243 243 -
Transfers Out (457) (457) -
TOTAL OTHER FINANCING SOURCES(USES) (214) (214)
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES 943 325 1,813 1,488
FUND BALANCE-BEGINNING OF YEAR 940 940 940
FUND BALANCE-END OF YEAR $ 1,883 $ 1,265 $ 2,753 $ 1,488
85
CITY OF HUNTINGTON BEACH
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2003
(IN THOUSANDS)
Reservoir Hill Assessment District
REVENUES: Original Budget Final Budget Actual Variance
Property Taxes $ 151 $ 151 $ 196 $ 45
From Use of Money and Property - 3 3
Other 23 - 18 18
TOTAL REVENUES 174 151 217 66
EXPENDITURES:
Current:
Non-Departmental 20 20 16 4
Capital Outlay
Debt Service:
Principal 120 120 120 -
Interest 32 32 32 -
TOTAL EXPENDITURES 172 172 168 4
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 2 (21) 49 70
FUND BALANCE-BEGINNING OF YEAR 185 185 185
FUND BALANCE-END OF YEAR $ 187 $ 164 $ 234 $ 70
Capital Improvement
REVENUES: Original Budget Final Budget Actual Variance
From Other Agencies $ 2,052 $ 2,052 $ 2,052 $ -
EXPENDITURES:
Current:
Planning 2 2 - 2
Building 546 924 477 447
Information Systems 2,563 2,563 547 2,016
Police - 34 34 -
Public Works 1,618 2,095 448 1,647
Non-Departmental 585 3,108 2,052 1,056
Capital Outlay 17,347 25,713 14,539 11,174
Debt Service: -
Principal 200 200 200 -
Interest 40 40 40 -
TOTAL EXPENDITURES 22,901 34,679 18,337 16,342
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (20,849) (32,627) (16,285) 16,342
OTHER FINANCING SOURCES(USES):
Transfers In 5,003 11,135 11,135 -
Proceeds of Long-Term Debt 9,900 9,900 2,370 (7,530)
Transfers Out - (200) (200) -
TOTAL OTHER FINANCING SOURCES(USES) 14,903 20,835 13,305 (7,530)
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (15,846) (11,792) (2,980) 8,812
FUND BALANCE-BEGINNING OF YEAR 1,232 1,232 1,232
FUND BALANCE-END OF YEAR $ (14,614) $ (10,560) $ (1,748) $ 8,812
86
CITY OF HUNTINGTON BEACH
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2003
(IN THOUSANDS)
Pier
REVENUES: Original Budget Final Budget Actual Variance
From Use of Money and Property $ 1,175 $ 1,175 $ 618 $ (557)
Other 49 49 14 (35)
TOTAL REVENUES 1,224 1,224 632 (592)
EXPENDITURES:
Current:
Community Services 98 98 80 18
Public Works 75 75 17 58
TOTAL EXPENDITURES 173 173 97 76
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 1,651 1,051 535 (516)
OTHER FINANCING SOURCES(USES):
Transfers Out (1,276) (1,276) (1,276) -
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (225) (225) (741) (516)
FUND BALANCE-BEGINNING OF YEAR (465) (465) (465)
FUND BALANCE-END OF YEAR $ (690) $ (690) $ (1,206) $ (516)
Holly Seacliff
REVENUES: Ordinal Budget Final Budget Actual Variance
From Use of Money and Property $ - $ - $ 19 $ 19
EXPENDITURES:
Current:
Capital Outlay - 1,132 600 532
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (1,132) (581) 551
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES - (1,132) (581) 551
FUND BALANCE-BEGINNING OF YEAR 1,184 1,184 1,184
FUND BALANCE-END OF YEAR $ 1,184 $ 52 $ 603 $ 551
Parking in-Lieu
REVENUES: Budget Actual Variance
From Use of Money and Property $ - $ - $ 62 $ 62
FUND BALANCE-BEGINNING OF YEAR 471 471 471
FUND BALANCE-END OF YEAR $ 471 $ 471 $ 533 $
87
CITY OF HUNTINGTON BEACH
COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2003
(IN THOUSANDS)
Sewer Development
REVENUES: Budget Actual Variance
Licenses and Permits $ - $ 300 $ 300
From Other Agencies 100 100 95 (5)
Charges for Current Service - 46 46
TOTAL REVENUES 100 100 441 341
EXPENDITURES:
Current:
Public Works 50 50 204 (154)
Capital Outlay 257 845 298 547
TOTAL EXPENDITURES 307 895 502 393
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (207) (795) (61) 734
OTHER FINANCING SOURCES(USES):
Transfers Out (130) (130) (130) -
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (207) (925) (191) 734
FUND BALANCE-BEGINNING OF YEAR (42) (42) (42)
FUND BALANCE-END OF YEAR $ (249) $ (967) $ (233) $ -
88
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30,2003
-(In Thousands)
Public Financing Authority
Original
REVENUES: Budget Final Budget Actual Variance
From Use of Money and Property $ 156 $ 156 $ 892 736
EXPENDITURES:
Debt Service:
Principal 2,335 2,335 3,155 (820)
Interest 4,397 4,397 3,763 634
TOTAL EXPENDITURES 6,732 6,732 6,918 (186)
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (6,732) (6,576) (6,026) 550
OTHER FINANCING SOURCES(USES):
Transfers In 4,819 4,819 4,819 -
Transfers Out (7,003) (7,003) (7,003) -
TOTAL OTHER FINANCING SOURCES(USES) (2,184) (2,184) (2,184) -
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (8,916) (8,760) (8,210) 550
FUND BALANCE-BEGINNING OF YEAR 24,295 24,295 24,295 -
FUND BALANCE-END OF YEAR $ 15,379 $ 15,535 $ 16,085 $ 550
Redevelopment Agency
Original
REVENUES: Budget Final Budget Actual Variance
Property Taxes $ 7,009 $ 7,009 $ 9,099 $ 2,090
Other Taxes 822 822 1,492 670
From Use of Money and Property 1,075 1,074 896 (178)
Other 76 76 232 156
TOTAL REVENUES 7,009 8,981 11,719 2,738
EXPENDITURES:
Current:
Economic Development 1,588 2,018 1,398 620
Capital Outlay 1,900 1,595 1,347 248
Debt Service:
Principal 1,629 1,597 1,968 (371)
Interest 1,567 2,673 2,016 657
TOTAL EXPENDITURES 6,684 7,883 6,729 1,154
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES 325 1,098 4,990 3,892
OTHER FINANCING SOURCES(USES):
Transfers In 1,423 23,372 24,163 (791)
Reclassification of Interfund Advances - 16,018 16,018 -
Proceeds of Long-Term Debt - 290 1,684 (1,394)
Transfers Out (4,460) (8,260) (8,260) -
TOTAL OTHER FINANCING SOURCES(USES) (3,037) 31,420 33,605 (2,185)
EXCESS OF REVENUES AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES (2,712) 32,518 38,595 1,707
FUND BALANCE-BEGINNING OF YEAR - (26,013) (13,030) 12,983
FUND BALANCE-END OF YEAR $ (2,712) $ 6,505 $ 25,565 $ 14,690
89
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2003
(In Thousands)
Property Tax Refund
Original Final
REVENUES: Budget Budget Actual Variance
From Use of Money and Property $ - $ - $ 62 $ 62
EXPENDITURES:
Current:
Non-Departmental - 19,820 19,820 -
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES - (19,820) (19,758) 62
OTHER FINANCING SOURCES(USES):
Proceeds from Agency Fund - 2,318 2,318
Proceeds of Long-Term Debt - 19,820 19,820 -
TOTAL OTHER FINANCING SOURCES(USES) - 22,138 22,138 -
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES - 2,318 2,380 62
FUND BALANCE-BEGINNING OF YEAR - -
FUND BALANCE-END OF YEAR $ - $ 2,318 $ 2,380 $ 62
90
Non-Major Enterprise Funds
Enterprise Funds account for operations similar to private businesses. The City's intent is to recover the costs to the general
public through user charges or where the City wished to periodically determine net income.
• The Emerald Cove Housing Fund accounts for the operations of a senior-citizens apartment complex.
• The Emergency Fire Medical Fund accounts for the user-fee portion of the City's paramedic service.
• The Hazmat Service Fund accounts for user fees charged for City's hazardous material program.
• The Ocean View Estates Fund accounts for the operation of the Ocean View Estates Mobile Home Park owned by the
City
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF NET ASSETS
NON-MAJOR ENTERPRISE FUNDS
SEPTEMBER 30,2003
(in thousands)
Emerald
Cove Emergency Hazmat Cultural Ocean View
ASSETS Housing Fire Medical Service Affairs Fund Estates I Total
CURRENT ASSETS:
Cash and Investments $ 2,097 $ 935 $ 326 $ $ 890 $ 4,248
General Receivables 1,400 10 4 1,414
TOTAL CURRENT ASSETS 2,097 2,335 336 894 5,662
CAPITAL ASSETS:
Land 1,289 - - 2,644 3,933
Buildings 4,102 - 560 4,662
Machinery and Equipment - 1,106 - 1,106
Less Accumulated Depredation (1,477) (343) (45) (1,865)
TOTAL CAPITAL ASSETS 3,914 763 3,159 7,836
TOTAL ASSETS 6,011 3,098 336 4,053 13,498
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES:
Accounts Payable - 278 10 1 289
Accrued Payroll - 100 13 - 113
Deposits Payable 39 39
TOTAL CURRENT LIABILITIES 39 378 23 1 441
NON-CURRENT LIABILITIES:
Compensated Absences 83 21 104
TOTAL NON-CURRENT LIABILITIES 83 21 104
TOTAL LIABILITIES 39 461 44 1 645
NET ASSETS:
Invested in Capital Assets,Net of Related Debt 3,914 763 - 3,159 7,836
Unrestricted 2,058 1,874 292 893 5,117
TOTAL NET ASSETS $ 5,972 $ 2,637 $ 292 $ $ 4,052 $ 12,953
91
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
NON-MAJOR ENTERPRISE FUNDS
SEPTEMBER 30, 2003
(in thousands)
Emerald
Cove Emergency Hazmat Cultural jOceanView
Housing iFireMedicall Service I Affairs Fund Estates Total
OPERATING REVENUES:
Rentals $ 714 $ - $ - $ $ 245 $ 959
Fees for Service - 4,053 223 - 4,276
Other 32 50 10 92
TOTAL OPERATING REVENUES 746 4,103 233 245 5,327
OPERATING EXPENSES:
Water Production -
Supplies and Operations 319 3,627 150 58 4,154
Depreciation 82 138 220
TOTAL OPERATING EXPENSES 401 3,765 150 58 4,374
OPERATING INCOME(LOSS) 345 338 83 187 953
NON-OPERATING REVENUES(EXPENSES):
Interest Income 35 23 20 78
CHANGE IN NET ASSETS BEFORE OPERATING
TRANSFERS AND CAPITAL CONTRIBUTIONS 380 361 83 207 1,031
TRANSFERS AND CAPITAL CONTRIBUTIONS:
Transfers In 35 - - - - 35
Transfers Out (383) (181) (13) (1,977) (2,554)
TOTAL TRANSFERS AND CAPITAL CONTRIBUTIONS (348) (181) (13) (1,977) (2,519)
TOTAL CHANGE IN NET ASSETS 32 180 70 (1,977) 207 (1,488)
NET ASSETS-BEGINNING OF YEAR 5,940 2,457 222 1,977 3,845 14,441
NET ASSETS-END OF YEAR $ 5,972 $ 2,637 $ 292 $ $ 4,052 $ 12,953
92
0
CITY OF HUNTINGTON BEACH
STATEMENT OF CASH FLOWS
NON-MAJOR ENTERPRISE FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2003
(in thousands)
Emerald
Cove Emergency Hazmat Cultural Ocean View
Housing Fire Medical Service Affairs Fund Estates Total
Cash Flows from Operating Activities:
Cash Received from Customers and Users $ 762 $ 4,570 $ 213 $ $ 243 $ 5,788
Cash Paid to Employees for Services - (1,553) (96) - (1,649)
Cash Paid to Suppliers of Goods and Services (307) (2,136) (35) (44) (2,522)
Other Operating Items 50 10 60
Net Cash Provided(Used)by Operating Activities 455 931 92 199 1,677
Cash Flows from Noncapital Financing Activities:
Transfers In 35 - - - 35
Transfers Out (383) (181) (13) (1,977) (2,554)
Other Noncapital Financing Activities
Net Cash Provided(Used)by Non Capital Financing (348) (181) (13) (1,977) (2,519)
Cash Flows from Capital and Related Financing Activities:
Proceeds from sale of Plant,Property,and Equipment - - 1,813 1,813
Principal Paid on Long-Term Debt (281) (281)
Interest Paid on Long-Term Debt -
Capital Improvement Fees
Net Cash Provided(Used)by Capital and Related (281) 1,813 1,532
Cash Flows from Investing Activities
Cash Received from Investments 35 23 20 78
Net Increase(Decrease)in Cash and Cash Equivalents 142 492 79 (164) 219 768
Cash and Cash Equivalents-Beginning of Year 1,955 443 247 164 671 3,480
Cash and Cash Equivalents-End of Year $ 2,0973
Reconciliation of Operating Income to Net Cash
provided(used)by Operating Activities
Operating Income(Loss) $ 345 $ 338 $ 83 $ $ 187 $ 953
Adjustments to Reconcile Operating income to Net
Cash Provided(Used)by Operating Activities
Depreciation 82. 138 - - 220
Decrease(Increase)in Accounts Receivable 16 285 (10) (4) 287
Increase(Decrease)in Accounts Payable - 83 (4) 16 95
Increase(Decrease)in Accrued Payroll - 52 13 - - 65
Increase(Decrease)in Deposits 12 - - 12
Increase(Decrease)in Compensated Absences 35 10 45
Net Cash Provided(Used)by Operating Activities $ 455 $ 931 $ 92 $ $ 199 $ 1,677
93
Internal Service Funds
Internal Service Funds account for goods and services provided by one City department to another on a cost-reimbursement
basis.
Insurance Reserve Funds:
• The Medical Insurance Fund accounts for self-insurance activities for health costs.
• The Workers'Compensation Fund accounts for self-insurance activities for workers'compensation costs.
0
CITY OF HUNTINGTON BEACH
STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET ASSETS
INTERNAL SERVICE FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2003
(in thousands)
Workers'
Medical Insurance Com nsation Total
TRANSFERS IN $ 1,211 $ 6,959 $ 8,170
NET ASSETS OCTOBER 1,2002 (1,211) (6,959) (8,170)
NET ASSETS SEPTEMBER 30,2003 $ _ $ _ $
STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2003
(in thousands)
Workers'
Medical insurance Com nsation Total
Cash Flows from Operating Activities:
Other Operating Items (1,211) (6,959) (8,170)
Cash Flows from Noncapital Financing Activities:
Transfers In 1,211 6,959 8,170
Net Increase in Cash and Cash Equivalents - -
Cash and Cash Equivalents,October 1,2002
Cash and Cash Equivalents,September 30,2003 $ - $ - $
Reconciliation of Operating Income to Net Cash provided(used)by Operating Activities
Operating Income(Loss) $ - $ - $ -
Adjustments to Reconcile Operating income to Net Cash Provided(Used)by Operating
Activities
Decrease(Increase)in Accounts Receivable 12 - 12
Decrease(Increase)in Prepaid Insurance 115 67 182
Increase(Decrease)in Accounts Payable (24) (7) (31)
Increase(Decrease)in Accrued Payroll (15) (9) (24)
Increase(Decrease)in Due to Other Funds (869) (1,945) (2,814)
Increase(Decrease)in Claims Payable (385) (5,065) (5,450)
Increase(Decrease)in Compensated Absences (45) - (45)
Net Cash Provided(Used)by Operating Activities $ (1,211) $ (6,959) $ (8,170)
94
Fiduciary Funds
Fiduciary Funds account for assets held by the City as an agent for other organizations or
individuals.
■ The General Deposit Fund accounts for the deposit of general monies held by the City
for private individuals and businesses.
■ The Community Facilities District accounts for the debt service activity of the City's
community facilities districts.
■ The Business Improvement District accounts for the activities of the Huntington Beach
Auto Business Improvement District.
■ The Central Net Fund accounts for the activity of the Central Net Operations Authority
■ The Retiree Medical Insurance Fund accounts for the City's medical retirement
program.
�. ITY OF HUNTINGTON BEACH
STATEMENT OF FIDUCIARY FUND NET ASSETS
FIDUCIARY FUNDS
SEPTEMBER 30, 2003
Agency Funds
Business Central Net
Community Improvement Operations Retiree Medical Total Agency
Assets: General Deposit Facilities Districts District Authority Insurance Funds
Cash and Investments $ 652 $ 827 $ 66 $ 1,434 $ 4,573 $ 7,552
Cash with Fiscal Agent - 2,119 - - - 2,119
Accounts Receivable,Net - 423 - - 22 445
Total Assets $ 652 $ 3,369 $ 66 $ 1,434 $ 4,595 $ 10,116
Liabilities:
Due to Bondholders 3,369 3,369
Net Assets:
Held in Trust for Pension Benefits and Other Purposes $ 652 $ $ 66 $ 1,434 $ 4,595 6,747
c
95
oCap,Ltal C 711.6.6 CY.6 e al
in the 16P etation
o f ovetnmentaL (functs
CITY OF HUN1-.4GTON BEACH
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE BY SOURCE
SEPTEMBER 30,2003
(IN THOUSANDS)
CAPITAL ASSETS:
Land $ 323,095
Buildings 111,614
Machinery&Equipment 51,901
Construction In Progress 11,817
Infrastructure 280,347
TOTAL INVESTMENT IN CAPITAL
ASSETS $ 778,774
INVESTMENTS IN CAPITAL ASSETS
FROM:
General Fund $ 158,203
Special Revenue Funds 53,493
Capital Projects Funds 30,814
Donations 536,264
TOTAL INVESTMENTS IN CAPITAL
ASSETS $ 778,774
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
BY FUNCTION AND ACTIVITY
FOR THE YEAR ENDED SEPTEMBER 30,2003
(IN THOUSANDS)
October 1, September 30,
2002 Additions . Retirements 2003
Administrative Services $ 152 $ - $ $ 152
Building 676 481 1,157
City Attorney 83 - 83
City Administration 902 (21) 881
City Clerk 40 - - 40
City Treasurer 198 66 (67) 197
Community Services 93,445 26,353 (318) 119,480
Economic Development 18,463 1,609 (2,414) 17,658
Fire 13,296 231 (132) 13,395
Information Systems 7,532 594 (268) 7,858
Library Services 14,471 - - 14,471
Non-Departmental 12,037 12,037
Planning 133 - - 133
Police 16,045 531 (405) 16,171
Public Works 573,185 29,003 (27,127) 575,061
TOTAL $ 750,658 $ 58,868 $ (30,752) $ 778,774
CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS
SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY
SEPTEMBER 30,2003
(IN THOUSANDS)
Machinery& Construction in
Land Buildings Equipment Progress Infrastructure Total
Administrative Services $ $ $ 152 $ - $ $ 152
Building 268 889 1,157
City Attorney 83 - 83
City Administration 881 881
City Clerk 40 40
City Treasurer 197 197
Community Services 48,162 66,151 5,167 119,480
Economic Development 17,607 - 51 17,658
Fire - 5,976 7,419 13,395
Information Systems - 7,858 7,858
Library Services - 13,667 804 14,471
Non-Departmental 1,409 10,168 460 12,037
Planning - - 133 - 133
Police - 785 14,530 856 16,171
Public Works _ 255,917 15,195 13,530 10,072 280,347 575,061
TOTAL $ 323,095 $ 111,942 $ 51,573 $ 11,817 $ 280,347 $ 778,774
96
cltati.6tical clection
G i Y OF HUNTINGTON BEACH
GOVERNMENTAL FUND EXPENDITURES
BY FUNCTION AND ACTIVITY
LAST TEN FISCAL YEARS
(IN THOUSANDS)
Administrative Community
City Council City Administrator City Treasurer City Attomey City Cterk Services Development Planning Buildi g
*1993-94 $282 $2,691 $897 $2,168 $517 $5,140 $10,406 $ - $ -
1994-95 224 1,672 709 1,866 485 4,200 3,252 - -
1995-96 224 2,140 743 1,466 488 4,181 3,252 - -
1996-97 233 1,856 781 1,738 470 4,208 3,694 - -
1997-98 207 1,092 805 2,340 434 3,056 3,919 - -
1998-99 275 1.569 820 1,969 474 2,876 4,067 - -
1999-2000 277 1,799 884 2,227 451 3,559 - 2,180 2,384
2000-2001 231 1,776 916 2,943 669 3,874 - 2,329 2,589
2001-2002 237 2,109 1,108 3.570 676 7,095 - 2,585 2,991
2002-2003 269 1,559 1,377 2,836 555 8,323 - 2,544 3,043
Source:Administrative Services Department-City of Huntington Beach
GOVERNMENTAL FUND REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(IN THOUSANDS)
From Charges for
Licenses and Fines and Use of Money Other Current
Fiscal Year Property Tax Sales Taxes Utility Taxes - Other Taxes Permits Forfeitures and Property Agencies Service
1993-94 $ 32,545 $ 21,364 $ 16,068 $ 8,762 $ 6,579 $ 1,894 $ 17,303 $ 25,894 $ 15,749
1994-95 25,265 17,678 12.916 7,665 5,978 2,134 11,704 19,941 9,777
1995-96 29,320 18,555 13,222 8,102 6,567 2,134 14,291 18,171 16,708
1996-97 29,341 19,512 14,059 8,632 8.121 2,707 12,971 19,810 11,191
1997-98 32,477 21,156 13,888 9.851 8,848 2,649 12,614 21,539 13.945
1998-99 34,345 22,699 14,936 11,122 10,527 2,744 10,913 24,753 _ 14,071
1999-2000 37,645 26,268 15,058 10.868 8,538 4,018 14,603 32,021 15.847
2000-2001 36,860 28,082 17,045 15,095 6,902 4,092 15,812 31,634 12,150
2001-2002 33,204 23,449 18,014 13,621 7,162 3,797 13,895 28,426 15,201
2002-2003 38,983 28,011 18,310 13,337 8,045 3,815 9,923 25,103 11,986
Source:Administrative Services Department-City of Huntington Beach
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(IN THOUSANDS)
SECURED TAXES UNSECURED TAXES
DELINQUENCY DELINQUENCY DELINQUENCY DELINQUENCY
TOTAL LEVY TOTAL COLLECTIONS AMOUNT PERCENT TOTAL LEVY TOTAL COLLECTIONS AMOUNT PERCENT
1993-94` $ 16,612 $ 15.632 $ 572 3.44% $ 1,205 $ 1,106 $ 56 4.65%
1994-95 16,781 16,300 481 2.87% 1,231 1,299 69 5.61%
1995-96 16,272 16,100 647 3.86% 1,165 1,138 27 2.32%
1996-97 16,722 16,401 320 1.91% 1,102 1,085 17 1,60%
1997-98 17,630 17,176 272 1.54% 1,247 1,077 40 3.21%
1998-99 18,341 17,868 262 1.47% 1,243 1,146 35 3.05%
1999-2000 21,001 20,676 284 1.35% 1,321 1,231 29 2.20%
2000-2001 22.724 22,035 629 2.77% 1,348 1,267 33 2.45%
2001-2002 24,581 24,238 343. 1.40% 1,419 1,366 53 3.74%
2002-2003 1 26,376 25,937 362 1.37% 1 1,467 1,343 82 5.59%
RESERVOIR HILL COMMUNITY FACILITIES DISTRICTS
1993-94 $ 180 $ 175 $ 4 2.29% $ 264 $ 181 $ 83 45.86%
1994-95 187 183 4 2.19% 264 258 6 2.33%
1995-96 186 176 9 5.11% 264 239 25 10.46%
1996-97 182 179 3 1.68% 264 251 13 5.18%
1997-98 173 184 9 4.89% 264 255 9 3.53%
1998-99 194 184 9 4.89% 264 255 8 3.14%
1999-2000 184 181 3 1.63% 264 259 5 1.89%
2000-2001 184 180 4 2.17% 264 258 5 1.89%
2001-2002 188 184 4 2.13% 264 258 6 2.27%
2002-2003 191 188 3 1.57% 538 538 1 0.19%
Fiscal Year 1993-94 is a fifteen month fiscal year.
97
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CITY OF HUN'b,-IGTON BEACH ,
ASSESSED AND ACTUAL VALUATION
OF ALL TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(IN THOUSANDS)
Total Assessed Estimated Full
Fiscal Year Common Prue" Public:Utilities Total Secured Unsecured Valuation Market Valuation Percent Increase
1993.1994 $ 11,313,256 $ 1,964 $ 11,315,220 $ 560,665 $ 11,875,885 $ 11,875,885 WA
1994-1995 11,712.153 2,151 11,714,304 599,842 12,314,146 12,314,146 3.69%
1995-1996 11,817,571 2,218 11,819,789 538,559 12,358,348 12,358,348 0.36%
1996-1997 11,761,075 2,129 11,763,204 542,084 12,305,288 12,305,288 -0.43%
1997-1998 12,338,032 2.297 12,340,329 624,469 12,964,798 12,964,798 5.36%
1998-1999 13,376,116 2,705 13,378,821 598,733 13,977,554 13,977,554 7.81%
1999-2000 14,493,635 2,383 14,496,018 636,747 15.132,765 15,132,765 8.26%
2000-2001 15,796,157 2,745 15,798,902 674,719 16,473,621 16,473,621 8.86%
2D01-2002 17,076,822 2,805 17,079,627 732,334 17,811,961 17,811,961 8.12%
2002-2003 18,660,711 2,779 18,663,490 851,591 19,515,081 19,515,081 9.56%
Source:County of Orange Auditor Controller
PROPERTY TAX RATES
ALL DIRECT AND
OVERLAPPING GOVERNMENTS
TAX RATE 04-001
LARGEST AREA IN CITY
Year Basic Levy City Orange County School Districts Metro Water District Others Total
1993-1994 $ 1.00001) $ 0.05320 $ 0.00081 $ 0.00227 $ 0.00890 $ 0.00019 $ 1.06537
1994-1995 1.00000 0.04930 0.00078 0.00046 0.00890 0.00019 1.05963
1995-1996 1.00000 0.04930 0.00050 0.00033 0.00890 0.00018 1.05921
1996-1997 1.00000 0.04930 0.00012 - 0.00890 - 1.05832
1997-1998 1.00000 0.04930 0.00010 - 0.00890 - 1.05830
1998-1999 1.00000 0.04930 0.00020 - 0.00890 - 1.05840
1999-2000 1.00000 0.04930 - - 0.00880 - 1.05810
2000-2001 1.00000 0.04930 - - 0.00880 - 1.05810
2001-2002 1.00000 - - - 0.00770 - 1.00770
2002-2003 1.00000 - - 0.01232 0.00670 - 1.01902
Note-Rates are per$100 of assessed valuation
Source-County of Orange
GENERAL OBLIGATION
BONDED DEBT RATIOS
LAST TEN FISCAL YEARS
General FurM Debt service to
General Bonded Debt Assessed Market Percent of Debt to Bonded Debt Per Total Debt Eapendlt= Total General Fund
(000.) Value(000s) Assessed Value Population Capita Principal(000s) Interest 1000s) service(000s) (000.) Eal.d.-
1993-1994 $ 445 $ 11,875,885 0.004 189,159 $ 2 $ 415 $ 52 $ 467 $ 115,757 0.40%
1994-1995 $ - $ 12,314,146 0.000 186,587 $ - $ 445 $ 13 $ 458 $ 92,467 0.50%
1995-1996 $ - $ 12,358,348 0.000 187,180 $ - $ - $ - $ - $ 92,211 0.00%
1996-1997 $ - $ 12,305,288 0.000 188,518 $ - $ - $ - $ - $ 96,165 0.00%
1997-1998 $ - $ 12,964,798 0.000 192,430 $ - $ - $ - $ - $ 103,875 0.00%
1998-1999 $ - $ 13,977,554 0.DD0 196,660 $ - $ - $ - $ - $ 103,050 0.00%
1999-2000 $ - $ 15,132,765 0.000 199,327 $ - $ - $ - $ - $ 117,863 0.00%
2000-2001 $ - $ 16,473,621 0.000 191,500 $ - $ - $ - $ - $ 122,139 0.00%
2001-2002 $ - $ 17,811;961 0.000 194,600 $ - $ - $ - $ - $ 130,326 0.00%
2002-2003 $ - $ 19,515,081 0.000 196,954 $ - $ - $ - $ - $ 124.551 100.00%
Source-Administrative Services Department,City of Huntington Beach
99
CITY OF HUNTINGTON BEACH
CONSTRUCTION ACTIVITY
AND BANK AND
SAVINGS AND LOAN DEPOSITS
LAST TEN FISCALYEARS
Number of Estimated Value of Banks and Savings
Building Percent New Construction and Loan Deposits
Permits Change (OOOs) Percent Change (OOOs) Percent Change
1993-1994 6,844 n/a $ 107,420 n/a $ 2,141,528 n/a
1994-1995 4,471 (34.7) $ 84,388 (21.44) $ 2,579,514 20.5
1995-1996 7,594 69.9 $ 110,375 30.79 $ 2,581,844 0.1
1996-1997 5,413 (28.7) $ 205,970 86.61 $ 2,737,588 6.0
1997-1998 6,368 17.6 $ 206,035 0.03 $ 2,684,384 (1.9)
1998-1999 6,735 5.8 $ 308,319 49.64 $ 2,911,437 8.5
1999-2000 5,474 (18.7) $ 207,509 (32.70) $ 3,019,180 3.7
2000-2001 5,106 (6.7) $ 153,279 (26.13) $ 3,370,986 11.7
2001-2002 5,429 6.3 $ 190,873 24.53 $ 3,598,628
2002-2003 5,540 2.0 $ 123,474 (35.31) $ 4,088,726
Source-Building Department,City of Huntington Beach and the Findley
Reports on California Institutions
COMPUTATION OF LEGAL DEBT MARGIN
September 30, 2003
(IN THOUSANDS)
ASSESSED VALUATION $ 19,515,081
DEBT LIMIT:12%OF ASSESSED VALUATION 2,341,810
DEBT APPLICABLE TO LIMITATION:
LEGAL DEBT MARGIN $ 2,341,810
Source-Administrative Services Department,City of Huntington Beach
STATEMENT OF DIRECT AND
OVERLAPPING BONDED DEBT
SEPTEMBER 30, 2003
2002-2003 Assessed Valuation$18,029.103,868(after deducting$742,++9,5727)of incremental redevelopment valuation)
OVERLAPPING TAX AND ASSESSMENT DEBT %Appll-bie Debt @ MOM3
O.C.Teeter Plan Obligations 7.421% $ 9,223,579
Metropolitan Water District 1.592% 7,073,176
Coast Community College District 31-132% 34,245,200
Huntington Beach City School District 97.651% 29,177,105
Los Alamitos Unified School District Community Facilities District 1.244% 147,912
City of Huntington Beach Comm Fac.Dist No 1990-1 100.000% 2,070,000
City of Huntington Beach Comm Fac-Dist No 2000-01 100.000% 16,000,000
City of Huntington Beach Comm Fac.Dist No 2002-01 100.000% 4,900,000
City of Huntington Beach 1915 Act Bonds 100.000% 295,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 103,131,972
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT
O.C.General Fund Obligations 7-421% 70,345,440
O.C.Pension Obligations 7.421% 8,665,687
O.C.Board of Education Certificates of Participation 7.421% 1,482,716
O.C.Transit Authority 7.421% 366,597
MWD of Orange County Water Facilities Corp 8.992% 3,751,013
D.C.Sanitation District COPS 99.953% 15,124,363
Coast Community College District 31.132% 2,527,918
Los Alamitos Unified School District COPS 1.328% 142,301
Htg Beach Union High School District COPS 95.854% 4,413,825
Ocean View School District COPS 94.095% 9,576,728
City of Huntington Beach General Fund Obligations 81,745,813
TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 198,142,401
Less: OC Transit Authority(80%self supporting) (293,278)
MWDOC Water Facilities Corporation(100%Self Supporting) (3,751,013)
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 194,098,110
GROSS COMBINED DEBT $ 301,284,373
NET COMBINED TOTAL DEBT $ 297,230,082
Excludes Tax and Revenue Anticipation Notes,revenue,mortgage revenue and tax allocation bonds,
and non-bonded capital lease obligations
Ratios to Assessed Valuation:
Total Overlapping Tax and Assessment Debt 0.55%
Combined Direct Debt($81,745,813) 0.45%
Gross Combined Total Debt 1.67%
Net Combined Total Debt 1.65%
State School Building Aid Repayable as of 9/30/03$4,835,479
Source-Califomia Municipal Statistics
100
CITY OF HaTINGTON BEACH
DEMOGRAPHIC STATISTICS
City Population
as a Percent of
Square Orange County County
Year Population Percent Increase Miles Population Population
1910 815 3.57 34,436
1920 1,687 107.0% 3.57 61,375 2.75%
1930 3,690 118.7% 3.57 62,451 5.91%
1940 3,738 1.3% 3.57 130,760 2.86%
1950 5,158 38.0% 4.72 216,224 2.39%
1960 11,492 122.8% 23.47 703,995 1.63%
1970 116,400 912.9% 26.73 1,420,386 8.19%
1980 172,200 47.9% 27.20 1,931,570 8,92%
1990 188,701 9.6% 27.20 2,362,211 7.99%
1995 186,587 -1.1% 27.20 2,627,949 7.10%
2000 199,326 6.8% 27.20 2,828,400 7.05%
2001 191,500 -3.9% 27.20 2,846,289 6.73%
2002 194,600 1.6% 27.20 2,939,500 6.62%
2003 196,954 1.2% 27.20 2,978,816 6.61%
Source-Administrative Services Department,City of Huntington Beach
TOP TEN PROPERTY TAX PAYERS
SEPTEMBER 30, 2003
Percent of Estimated Tax
Assessed Valuation(000s) Toal 1 (000s)" Percent of Total
Mayer Financial Limited Partnership $ 110,777 0.62% $ 592 1.52%
McDonnel Douglas Corporation 397,367 2.23% 509 1.31%
AES Huntington Beach LLC 327,249 1.84% 381 0.98%
Huntington Center 53,516 0.30% 348 0.89%
Waterfront Construction 1 A California LP 37,596 0.21% 299 0.77%
Mullrock Mortgage LLC 41,900 0.24% 268 0.69%
Essex Huntington Breakers 28,967 0.16% 218 0.56%
Atlanta Huntington Beach LLC 21,854 0.12% 211 0.54%
Pierside 24,053 0.14% 177 0.45%
Liu Corporation 18,470 0.10% 131 0.34%
Total Top Ten 1,061,749 5.96% 3,134 8.04%
Ali Other Properties 16,750,212 94.04%1 35,842
91.96%
Total $ 17,811,961 100.00% $ 38,983 100.00%
Source-HDL Coren,Cone
"The estimated total tax includes only the portion of the total tapaid to the City's reporting
entity.Properties in different tax areas or in a redevelopment agency project area pay a different
percentage of tax to the City's reporting entity.
MISCELLANEOUS STATISTICS
SEPTEMBER 30, 2003
Year of Incorporation 1909
Charter City-City Council-City
Form of Government Administrator
Area 272 Square Miles
Population 196,954
Miles of Streets and Alleys 463
Number of City Trees 54,563
Fire Protection:
Number of Stations 8
Number of Firefighters 131
Police Protection:
Number of Stations 4
Number of Sworn Police Officers 220
Municipal Water Department:
Number of Customers 52,000
Average Daily Consumption Total 28.6 Million Gallons
Average Daily Consumption Per Person 138
Miles of Water Mains 522
Public Works:
Sanitary Sewers 352 Miles
Storm Sewers 136 Miles
Recreation and Culture:
Number of Parks 57
Park Acreage Developed 529
Miles of Beach 3.4
Annual Beach Visitors 7,000,000
Number of Libraries 4
Volumes in Libraries 370,945
Full-Time Employees 1,051
Source-Administrative Services Department,City of Huntington Beach
101