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Home My WebLink About2004/2005 Mid Year Budget Review and the Comprehensive Annua a ��rlrv�ra_ 3 CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION TO: JOAN FLYNN, CITY CLERK FROM: DAN T.VILLELLA SUBJECT: LATE ITEM SUBMISSION FOR STUDY SESSION ON THE MIDYEAR BUDGET&THE CAFR(COMPREHENSIVE ANNUAL FINANCIAL REPORT) DATE: MAY 2,2005 CC: Today's study session will discuss the audited financial statements for the year ended September 30, 2004, as well as, fiscal year 2004/5's budget status and projections. It was originally planned to have separate sessions for these items, but time restraints on April 18 necessitated that we combine them for today. Attached is a copy of today's presentation. z ^ c o x_ C I" 7. �J C7 Cat of Hun t � n ton Beach Yg Fm_-__-_-a n ce _O t-ce Report - - i Ah n u a I Cit Au d lt C A F R M i-d Y=ea r_ g Bu_d et Re ort3_1 __7 - _ p f - C&L Caporicci & Larson G'crtlf'lcrcl llrlalfc Ac:cutrlrt !!8 INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of City Council of the City of Huntington Beach Huntington Beach, California ". . .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, 2004, 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. . . ." ear Costa Mesa, California February 11, 2005 2 Statement of Net Assets Net Assets represent th e diff erence between the City .s as-_sets and I �a bi I �tes . Overtime conti n ued_ � increases or f decreases_ i n net assets may i nd Cate Whether the Ct 's financial cond-ition is Improving . or detel7iom ng . ; 4 - 3- ; Net Assets Comparison Fi sca � - Yea r Ending 2004 _ _ 200.3 2002 t _ - =---- (in thousands)-- ----- Governmental IActivities - - 4 0 484: 398_ 457 639 , - - $ 99,99 - $ _ $ - , Business-type - _ - Activities = $ 159,522 1$ 14%50li $ 134,060 General Fund Summary 15 (in thousands) - CAFR Location Assets $45,32Z = _ pg 15 top Liabilities 990 15-- middle p9 _ = - Fund Balance (9/30/04) $26=,332 _ - pg 1s_- bottom Fund Balance E uit =Assets --Liabilities --- General Fund Balance Detail (in thousands) Encumbrances - $ 21113 Desi Hated for future -ex end itu res -3 124 g - P Economic uncertainties (7%) 10,359 - � $21,095 Unreserved, jundesiggated - - - _ =10,736 _ Total Fund Balance _ - _ = $261332 r l 004/05-- AddDted BudgetGene ' c i n 000's • - Estimated Reven-ue _ _ $ 147,980 ■ -A ropriations _ ( 151 103 )pp _ Sur__plus/( De_ficit) _ _ = 124) --- Genera 1 Fund 04/05Projection . in -000 s = Year T o _Date _ _Projected March 31, 2005 Sept. 30, - 2005 Revenue _ $61 861 = $ 152 ,465 = - Expenses 61-,676 = - 148 230 Pr-oj ected even u e i n - $4, 235 excess of expenditures- = _ - Gene -a I Fu nd - Bud et Overview Pro ected revenue increases - over ado =ed a re -= _ = - estimated tbeo $4 . 42 6 mil lion . - ■ OtherSRevenueIN Veriz on -pro ject - $ 1 . 517 million __ - ■ Franchises _ $ 1 ._166 million ■ Use of Money and Property, interest, concessions; parking - $--,,7 8 8-ID 0 0 ■ Transi=ent Occu=pancy Tax $373,000 - _ - - ■ Utility-User= Tax $346,000 ■ Pro, . petty Tax - $291000 ■ Other -net changes _ ($55,000) _ Genera I Fu n d - = Bud et 0verview • ; Projected expenditure savings from revised budget , a ro - riations _are est� rnatea to _be $ 5 . 358 million . pp p = - , This includes alI additional -appropriations since ad=opti=on , and prior- yearcesencumbran . ' ■ A savin s of near- 1 .9 million will exist in the Personnel portion of the _budget. ■ Operating savings are anticipated to save $3 . 2 mi_Ilon . Capital and Equipment savings= will -be $2=39k. 10 - Ge.ne .ral - F und - - Bud e t Overview .� Additionaltdet ils of_budget -savings mo-ant Numerous vamanci_es stillext_st _ 1 .9=rr�il_Iion f• EqIui rh nt/Supplies and Repairs/M=aint. 1 . 1 il_lion ■ utility appropriations _ -800housand • Professional services sayings= projected- =534thousand • Other Contract Services = 29a thouand -• Rental and Claims Expeuses - 382houand M isc. Expenses - - - 113 thouand ■ Ca ital _Outla= -and E ui ==merit Re l_acement . 239- thousand 1 = -p = Y q p p _ Genera 1 Fund B u dge t Additions Since Adoption : Budget Additions Throu . h March _31 . -2005 _ ■ Police -Grant_-Office of Crlmindl Justice - _ $21250 ■ Contract-Amendments - _ _ 10Q,000 ■ Maintenance Worker for Graffiti Removal = - 40000 ■ eCivis Grant _ 40,000 ■ Reinstatement of= Permanent__Positions _ 507000 Included _in Bu_dget- Report $_708 250 FIS's Requested Since March 31, 2005 • Huntington Beach Command Vehicle - 550 _000 ti i ! • Verizon Project Expendi ures ` - - = 800 000 : : ■ Blufftop Park Em=ergen_cy Repairs = . _ 120,_000 I ' ■ -CityHall Elevator_ Control Replacement = 300,000 I Total Additional A ro matrons _ 2,478. 250 p=P P - _ _ Pro ' ected Chan e _to Ge neral Fund Balance J - - - -g _ _ in 000's I ■ Starting designated -budge deficit _- $ 3124 j ■ Will be rdl-ased --to un-reserved, undesignated balance E . f■ Net Fi sca I Year Rev_e-n u e=s i n Excels o_f Expenditures - _ 4_ 235 ,■ Po-st 3/31_/05 Appropriations = _ (1- 770) !■ Projected Increase to Fund Bea I nice _ 5= 589 i , Transfer to CI P Fund _ The City's fi na ncia I =oI is -re u-ir_es a ortion of the , I l ' ► General Fu=nd balance, in excess -of 7% , to be transferred to the CI=P Fund : The ca - .Ula _ion is as 1 follows for this year. An : ■ Undesi Hated G-F Bala-nce _ 21 095- = 9 _ _ $ _ - i ■ Fund Balance Policy (7% of =revenue-s) _ 1-0 359 Remaining Funds $ 10,736 50% -_of th-e remaining= funds_ are contributed to the CIP 0 Fund $5-. 368 m=' Ilion -for 204/05 - _ _ - _ - - = - - - i I i ev- Red - Ipmen A ec _e o t- = g Y_ I : III - { A= 2 . 5 mil-lion a-cce_I°erated a rnent =to the - $ - - - p Y = = � ) e neral fund was bud a e=d- to hel balance the L g - - g _ - p - budget. Payment reduc e s the I �qu �=dty of the agency. Liquidity aids_ the agency's neg_otiat ona for- or _ new projects . This a ment to the e_neraI fund in_ OA 5 �s not needed to balance projected expenditures - iJ _j J LJ - - Office of the Cat -- AU o-.rn-e f 1 - i ; � it - _ - _ - - - - _ j ; An RCA will be submitted for =the May 16 2005 City Cou nci I rneei n _wh=ich wi I I transfer_ i a_ppropr�ations sa- ings from _ profes ' iona_I services in o sera n to ermanent _saI- a_nd p 9 �= p _ Y benefit acco-unts- Tor addit�onal De ut Cat _ - _ - _ - - p Y Y 4 Attorney s . 16 Buogetarv. - Ien--. r Ca a _ The 2005/06 bud et develo= merit = rocess has 9 - _p - p= i be - - - comDepar m nis wi lete- 005/06_ -__bud_ etsin - Ma y The City Administrator will review 2005/06 ` budget requests in June . - = _ The 2005 06 Pro osed Bud - et will be s WI_bmitted= to the City Codncil _ on- August_ 2005 . A Cit Council stud - session on the - 2005= 06 -bud et y y = - _/ =9 I wi 1] be _held on Aug u5t 18, 2005 . A Public Hearing on the= 2005/06 budget _will _be held on September 6, 2005 . • ; A fi na I bud=get report for 2004/05 wi LI be prepared i n_ October, 2005 1NGTQ� CITY OF HUNTINGTON BEACH e " INTERDEPARTMENTAL COMMUNICATION � cP�Qo TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: DAN l.VILLELLA,FINANCE OFFICER SUBJECT: STUDY SESSION - COMPREHENSIVE ANNUAL FINANCIAL REPORT DATE: 4/5/2005 CC: PENNY CULBRETH-GRAFT The annual Comprehensive Annual Financial Report (CAFR) for fiscal year 2003/2004 has been completed and distributed to Council. Independent auditors Caporicci & Larson, Certified Public Accountants, audited the report. The CAFR represents the City's financial position as of September 30, 2004. The document provides discussion and analysis of significant accounting activities, including financial statements and fund balances. Attached is the PowerPoint presentation that will be discussed at the study session. Attachment l J Comprehensive Annual F inancial Report ( CAFR) City of Huntington Beach Fiscal Year ended September 30, 2004 i Purpose of CAFR f � Provides City Council , residents , and staff with firm understanding of City' s financial position Complies with state law requirements 1' Conformity with generally accepted r accounting principles 1 Independent audit by certified public accounting firm in accordance with Government Auditing Standards as issued by ' � the U . S . Comptroller General 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 30,2003 A Certificate 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. r Ems DAMA MVIWM President IRAF Executive Director } Format 3' 7 f Introduction Independent Auditor' s Report f- p p Management' s s Discussion and Analysis �r. g y t, j Basic Financial Statements s Government-wide Financial Statements 0 Fund Financial Statements Notes to Financial Statements q Re uired Supplemental Information 0 Schedules of Revenue, Expenditures & Fund Balances 0 Combining & Individual Fund Statements & Schedules Statistical Section 4 41 a ' T c, CAFR Process 7 l Audit of financial statements M� Governmental activities including RDA, PFA r V Business-ty pe pe activities (enterprise funds) f y r Major fund Non-major funds combined 'h R Form opinion as to fairness of financial representation t Review procedures , controls & segregation of duties Perform transaction test work V Prepare management letter with opinion P g P } 4 CAFR Process Types of opinion provided upon completion Yp of audit p p p M� Unqualified 0 Qualified v 0Adverse 0 Disclaim f City received unqualified (clean) opinion t q p Unqualified opinion has been received annually for past q p Y �s Y 2 5 ears .. �c F i y f �;E Cfro. Caporicci & Larson Co-Iffited f ubIte AcCwintantts INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of City Council of the City of Huntington Beach Huntington Beach, California "...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, 2004, 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...." Costa Mesa, California February 11, 2005 r Genera Fund S (page 4. r� (in thousands) Assets $45 , 322 Liabilities 18 , 990 k Balance Fund B 1s (9130104) $ 265332 t Fund Balance E quity = Assets - Liabilities General Fund Balance Detail (in thousands) Encumbrances $ 2 , 113 !` Designated for future expenditures 35124 Economic uncertainties (7%) 10 , 359 Unreserved, undesignated 10 ,736 Total Fund Balance $ 26 ) 332 General Fund Budget FY 2003 / 2004 (in thousands Final Budget Actual Revenues $ 1345966 $ 1325040 Expenditures ( 1355515) ( 1225486) Net Transfers 3( '646) 15804 Net Change to Fund Balance (4, 195) 115358 Beginning Fund Balance $ 14,974 $ 14,974 I Ending Fund Balance $ 105779 $ 265332 Statement of Net Assets Net Assets represent the difference between the City s assets and liabilities . "Over time , continued increases or decreases in net assets may indicate whether the City' s financial condition is improving or deterioratin g. " Net Assets Comparison Fiscal Year Ending 2004 2003 2002 -----------(in thousands)____ ____ Governmental Activities $499 990 $484 398 $457 639 Business-type 060 Activities $ 1595522 $ 1455501 $ 1345 I� Additional CAFR Information � Fund balances schedules 1 Enterprise Funds Special Funds 1 Debt Service Funds 1 Capital Projects Funds � Lease payments & long-term obligations �i � Statistical information Comprehensive Annual Financial Report ( CAFR) City of Huntington Beach Fiscal Year ended September 30, 2004