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CITY OF HUNTINGTN BEACH, CALIFORNIA
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COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED SEPTEM ER 30, 2011
Prepared by the Finance Department
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INTRODUCTORY SECTION
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City of Huntington Beach
Comprehensive Annual Financial Report
Year Ended September 30, 2011
TABLE OF CONTENTS
INTRODUCTORY SECTION
Tableof Contents......................................................................................................................................i-ii
Letter of Transmittal
CityOfficials................................................................................................................................................ vii
OrganizationalChart................................................................................................................................... vui
Certificate of Achievement in Excellence in Financial Reporting................................................................. ix
FINANCIAL SECTION
IndependentAuditor's Report...................................................................................................................... 1-2
Management's Discussion and Analysis (Required Supplementary Information) .......................................4-17
Basic Financial Statements:
Government-wide Financial Statements:
Statementof Net Assets .................................................................................................................... 19
Statementof Activities ....................................................................................................................... 20
Fund Financial Statements:
Balance Sheet— Governmental Funds .............................................................................................. 21
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets........... 22
Statement of Revenues, Expenditures and Changes in Fund Balances— Governmental Funds ...... 23-24
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities.................................................................... 25
Statement of Net Assets— Proprietary Funds.................................................................................... 26
Statement of Revenues, Expenses and Changes in Fund Net Assets — Proprietary Funds.............. 27
Statement of Cash Flows— Proprietary Funds................................................................................... 28
Statement of Fiduciary Fund Net Assets............................................................................................ 29
Statement of Changes in Fiduciary Fund Net Assets—Trust Funds.................................................. 29
Notes to Financial Statements .............................................................................................................. 30-91
Required Supplemental Information:
BudgetaryInformation........................................................................................................................ 94
Schedule of Revenues, Expenditures and Changes in Fund Balance— Budget
AndActual— General Fund............................................................................................................. 95
Schedule of Revenues, Expenditures and Changes in Fund Balance— Budget
And Actual — Grants Special Revenue Fund................................................................................... 96
Schedule of Funding Progress (Normal Retirement Plan, Supplemental Retirement Plan,
And Other Postemployment Benefits).............................................................................................97-98
Schedule of Employer Contributions (Supplemental Retirement Plan).............................................. 98
i
FINANCIAL SECTION (Continued)
Supplementary Information:
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet— Other Governmental Funds .................................................................. 103-106
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Other Governmental Funds ............................................................................................................ 107-110
Schedule of Revenues, Expenditures, and Changes in Fund Balances—
Budget and Actual —Other Governmental Funds ........................................................................... 111-119
Schedule of Revenues, Expenditures and Changes in Fund Balances— Budget
And Actual — Redevelopment Agency Debt Service and Capital Projects...................................... 120
Schedule of Revenues, Expenditures and Changes in Fund Balances— Budget
And Actual — Low Income Housing Fund ........................................................................................ 121
Combining Statement of Fiduciary Fund Net Assets.......................................................................... 124
Combining Statement of Changes in Fiduciary Assets and Liabilities................................................ 125-126
STATISTICAL SECTION
Net Assets by Component— Last Ten Fiscal Years.................................................................................... 129-130
Changes in Net Assets- Last Ten Fiscal Years........................................................................................... 131-132
Fund Balances — Governmental Funds— Last Ten Fiscal Years ................................................................ 133
Changes in Fund Balances— Last Ten Fiscal Years................................................................................... 135-136
Assessed and Actual Valuation of All Taxable Property (Excluding Redevelopment Agency) -
LastTen Fiscal Years .............................................................................................................................. 137
Property Tax Rates —All Direct and Overlapping Government Tax Rate 04-001
Largest Area in City— Last Ten Fiscal Years........................................................................................... 137
Property Tax Levies and Collections— Last Ten Fiscal Years ................................................I..............:.... 138
Ratios of Outstanding Debt by Type— Last Ten Fiscal Years..................................................................... 139
Top Ten Property Tax Payers —Current Year and Ten Years Ago............................................................. 140
Legal Debt Margin — Last Ten Fiscal Years ................................................................................................ 141
Principal and Private Employers—Current Year and Six Years Ago .......................................................... 141
Full-Time Actual and Budgeted City Employees by Program/Function — Last Ten Fiscal Years................. 142
Operating Indicators by Function/Activity— Last Seven Fiscal Years.......................................................... 143
Capital Assets Statistics by Function/Activity.............................................................................................. 143
Statement of Direct and Overlapping Bonded Debt .................................................................................... 144
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CITY OF HUNTINGTON BEACH
March 30, 2012
To the Honorable Mayor and City Council:
In accordance with the requirements of the City Charter, and the City of Huntington
Beach's ongoing commitment to transparent financial reporting, I am pleased to present
the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September
30, 2011 .
As required by the City Charter, and to ensure the reliability of the information contained
within this report, the City of Huntington Beach contracted with the independent auditing
firm Macias Gini & O'Connell LLP. The goal of the audit was to provide reasonable
assurance that the City's financial statements are free from material misstatement. After
examining on a test basis assessing the accounting principles used, as well as significant
estimates made by management, Macias Gini & O'Connell LLP granted the City an
unqualified (clean) opinion for the fiscal year ended September 30, 2011. The auditor's
opinion can be found in the Financial Section of this report. Management assumes full
responsibility for the completeness and accuracy of the information presented in this
document. This transmittal letter is designed to complement and should be read in
conjunction with the Management's Discussion and Analysis.
In addition to the City's financial information, this report includes financial statements for
separate legal entities whose activities the City controls. These entities are:
■ The Redevelopment Agency of the City of Huntington Beach
■ The Huntington Beach Public Financing Authority
■ Various Community Facilities Districts
Additional financial information for the Redevelopment Agency can be found in the
Agency's component unit (stand-alone) report.
CITY PROFILE
The City of Huntington Beach is located on the Orange County coast, 35 miles south of
Los Angeles and 90 miles north of San Diego. With a population of 192,000 residents, it
is known as Surf City due to its abundance of beaches, sunny, warm Mediterranean
climate, and casual lifestyle. With over eight miles of coastline to boast of, Huntington
Beach plays host to over 16 million visitors annually. 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 by the Federal Bureau of Investigation.
Founded in the late 1880's, Huntington Beach was incorporated as a Charter City in
1909. Huntington Beach has a Council/Manager form of government wherein seven City
iii
Council members are elected to four-year terms, and the Mayor is filled on a rotating
basis from the incumbent Council members.
On August 22, 2011, the unincorporated County oceanfront community of Sunset Beach
was officially annexed by the City of Huntington Beach. Sunset Beach is a small
beachfront community with approximately 1,000 residents and 0.2 square miles of land.
Sunset Beach features one of the widest and most pristine beaches in Southern
California and is home to the historic Sunset Beach Arts Festival.
The City of Huntington Beach is one of the leading commercial and industrial centers in
Southern California. As the fourth largest city in Orange County, more than 110,600
people are currently employed by over 5,400 businesses and governmental entities in
the City. The Huntington Beach business community is extremely diversified with no
single industry or business dominating the local economy. Local businesses include
aerospace and high technology, petroleum and petroleum support, manufacturing,
computer hardware and software, financial and business services, hotel and tourism,
automobile services, machine shop services, precision instruments, retailers and surf
apparel, just to name a few.
FINANCIAL POLICIES AND PRACTICES
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 Manager and transmitted
to the City Council for deliberation thirty days prior to the end of the fiscal year. Pursuant
to the City's Charter, the City Council must adopt the annual budget by September 30th
and may amend it or revise it at any time at a properly noticed meeting. Budgetary
control is at the department level within each fund and a Department Head, with the
Director of Finance's approval, may transfer funds within like categories (operating and
capital expenditures) of the same department. Transfer of funds for salaries and benefits
require additional approval by the City Manager or his designee.
Surplus cash is invested by the elected City Treasurer, in investments allowed by the
City's investment policy. The investment policy is adopted annually by the City Council
after approval by the Investment Advisory Board. It outlines guidelines to meet the daily
cash flow needs of the City, maximize the efficiency of the City's cash management
system, and identifies prudent investment vehicles for the City's cash balances.
The rate of return earned for the fiscal year ended September 30, 2011 was 1.30%. The
City Treasurer, as required by California Government Code 53601, has prepared an
annual statement of investment policy which allows for the City to meet current
obligations while earning a market rate of return. Further information regarding the City's
cash and investments can be found in Note 2 of the financial statements.
LONG-TERM FINANCIAL PLANNING
In 2011, the City Council updated its Strategic Plan, which outlines five goals:
• Maintain financial viability and our reserves;
• Maintain, improve and obtain funding for infrastructure and equipment;
• Maintain public safety;
• Enhance economic development; and,
iv
• Improve internal and external communication.
As part of the strategic goal to maintain our financial reserves, the City of Huntington
Beach completed and implemented a Long-Term Financial Plan. This plan enables the
City to forecast cause and effect relationships for large financial decisions such as
employee labor contracts, capital projects, equipment replacements, as well as revenue
fluctuations due to the weakening economy or state takeaways.
The City's Strategic Plan drives budgetary decisions and the day-to-day operations of the
City by ensuring that the City is consistently working to achieve the goals outlined by the
City Council.
MAJOR INITIATIVES
Sunset Beach Annexation
The annexation of Sunset Beach was one of the major achievements of the fiscal year
ended September 30, 2011. The annexation is expected to generate approximately
$500,000 in net new revenue annually to the City for the provision of core public safety
and community services. As the integration of Sunset Beach into the larger community
of Huntington Beach continues over the next year, it is anticipated even greater
economies of scale may be achieved.
Shared Services Agreements
The City of Huntington Beach continues to explore ways to "do more with less" and to
reduce costs and generate new revenues in every way possible. In August 2011, the
City's Police Department entered into a landmark contract with the city of Newport Beach
for the provision of helicopter patrol services to these neighboring communities. In a
creative effort to "outsource" City services, the Police Department will generate $575,000
in annual revenue to the City with no increases in police staffing.
Ten Point Plan for Local Business
On March 4, 2011, the City launched its "Ten Point Plan for Local Business." The Plan
was created as a vehicle to cement the City's commitment to supporting and influencing
local business retention and attraction, with a goal of producing more new jobs,
expanding the local tax base, and increasing the satisfaction of the business community
in receiving the important services they need to remain successful. Recognizing that
maintaining local businesses is just as important as attracting new businesses, the City
underwent a major effort to create a plan to enhance services to the existing business
community.
The City's Ten Point Plan was honored by the Orange County Business Council (OCBC)
as the recipient of the inaugural "Turning Red Tape into Red Carpet" award in the
category of Business Retention and Expansion. The award recognizes the City for
proactively cutting through the red tape and opening the door for business by creating.—
and implementing - the Ten Point Plan. The Ten Point Plan included a new local vendor
preference program that provides a 5% advantage to local businesses competing for City
contracts, among other strategies.
v
2011 Series A Bond Refundinq
In an effort to further reduce costs, the City issued the Huntington Beach Public Finance
Authority Lease Revenue Refunding Bonds Series 2011-A, to refund the 2001 Public
Finance Authority Lease Revenue Series A and Series B Bonds. The bond refunding
resulted in a net present value savings of$3.8 million thereby further reducing costs.
Economic Development
Despite fiscal constraints, the City's commitment to economic development and
community revitalization is stronger than ever. Recognizing that economic development
is the foundation of the local economy, the City renewed its efforts to assist in the
development of hundreds of acres of dormant City land. In the fiscal year ended
September 30, 2011, 31 acres of formerly inactive oceanfront property were sold to a
new developer, Crescent Heights, for the development of the much anticipated "Pacific
City" project, a mixed use development featuring 517 residential units, 191,000 square
feet of commercial space and 400 hotel rooms in a new, state-of-the-art hotel. To further
improve the sales tax base, construction started on 150,000 square feet of warehouse
space for a new Costco store anticipated to generate over $1 million in annual sales tax
revenue. Other major developments include Bella Terra II, a mixed use project featuring
467 residential units, plus an additional 30,000 square feet of retail space to further
revitalize the economy and the local tax base.
AWARDS AND ACKNOWLEDGEMENTS
Last year, the City of Huntington Beach was once again the honored recipient of the
"Certificate of Achievement for Excellence in Financial Reporting" award bestowed by the
Government Finance Officers Association (GFOA) of the United States and Canada.
This was the 25th consecutive year the City has received this prestigious award. Receipt
of the award requires government entities to publish transparent, easily readable and
efficiently organized Comprehensive Annual Financial Reports, conforming to program,
accounting, and legal standards.
The Certificate of Achievement earned for the fiscal year ended September 30, 2010, 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 the GFOA for their consideration for another award.
wish to thank the City Council, City Manager, and City Departments for their continued
diligence in their role as fiscal stewards for the City of Huntington Beach. Specifically, I
would also like to thank Dahle Bulosan, Sunny Han, Janet Lockhart, and Dennis Jaw for
their efforts in preparing this report.
Lori Ann Farrell
Director of Finance
vi
City of Huntington Beach
City Council
Don Hansen, Mayor
Devin Dwyer, Mayor Pro Tem
Connie Boardman, Councilmember
Keith Bohr, Councilmember
Joe Carchio, Councilmember
Matthew Harper, Councilmember
Joe Shaw, Councilmember
Executive Team
Fred A. Wilson, City Manager
Paul Emery, Deputy City Manager
Robert Hall, Deputy City Manager
Laurie E. Payne, Community Relations Officer
City Treasurer
Alisa Cutchen
Elected Department Heads
Joan L. Flynn, City Clerk
Jennifer M. McGrath, City Attorney
Department Directors
Stephanie Beverage, Library Services
Michele Carr, Human Resources
Paul Emery, Community Services
Lori Ann Farrell, Finance
Robert Hall, Economic Development
Scott Hess, Building & Planning
Travis Hopkins, Public Works
Jack Marshall, Information Services
Chief Patrick McIntosh, Fire
Chief Kenneth W. Small, Police
vii
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Certificate of
Achievement
for Excellence
in Financial
deporting
Presented to
City of Huntington Beach
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30,2010
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(CAFts)achieve the highest
standards in government accounting
and financial reporting.
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•
FINANCIAL SECTION
CertiffedftbKc Accountants.
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The Honorable Mayor and
Members of City Council
City of Huntington Beach, California
Independent Auditor's Report
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, 2011, 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 opinions on these financial statements based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States. 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 consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes 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, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinions.
In our opinion,the 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, 2011, and the respective changes in
financial position and, where applicable, cash flows thereof for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
As discussed in Note 15 to the basic financial statements, on June 29, 2011, the California State Legislature
enacted legislation that is intended to provide for the dissolution of redevelopment agencies in the State of
California (Assembly Bill IX 26)unless certain payments can be made to the State of California(Assembly
Bill IX 27). On December 29, 2011, the California Supreme Court(Court) largely upheld the legislation for
the dissolution of redevelopment agencies. Furthermore, the Court invalidated Assembly Bill IX 27.
Accordingly, the Agency was required to dissolve on February 1,2012 and the guidelines for dissolution are
set forth in the legislation. The financial statements do not include any adjustments as a result of the
dissolution of the Agency.
In accordance with Government Auditing Standards,we have also issued our report dated March 30,2012,on
our consideration of the City's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of
that report is to describe the scope of our testing of'internal control over financial reporting and compliance
and the results of that testing, and not to provide an opinion on the internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government Auditing
Standards and should be considered in assessing the results of our audit.
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Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and other required supplementary information identified in the accompanying table of
contents be presented to supplement the basic financial statements. Such information, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board, who considers
it to be an essential part of financial reporting for placing the basic financial statements in
an appropriate operational,economic,or historical context.We have applied certain limited procedures to the
required supplementary information in accordance with auditing standards generally accepted in the United
States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management's responses to our inquiries,
the basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements as a whole. The introductory section, combining and individual
fund statements and schedules listed as supplementary information, and statistical section are presented for
purposes of additional analysis and are not a required part of the financial statements. The combining and
individual fund statements and schedules are the responsibility of management and were derived from and
relate directly to the underlying accounting and other records used to prepare the financial statements. The
information has been subjected to the auditing procedures applied in the audit of the financial statements and
certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the financial statements or to the financial statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the information is fairly stated in all material respects in relation to
the financial statements as a whole. The introductory and statistical sections have not been subjected to the
auditing procedures applied in the audit of the basic financial statements and, accordingly,we do not express
an opinion or provide any assurance on them.
0
Newport Beach,California
March 30,2012
2
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City of Huntington Beach
Management's Discussion and Analysis
,pw For the Year Ended September 30, 2011
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, 2011. 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-vi 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
2011 2010 (Decrease) (Decrease)
Assets $ 1,054,953 $ 1,043,111 $ 11,842 1.1%
Liabilities 170,892 179,714 (8,822) -4.9%
Total Net Assets 884,061 863,397 20,664 2.4%
Unrestricted Net Assets 100,499 94,578 5,921 6.3%
Long-Term Obligations 149,259 155,809 (6,550) -4.2%
Program Revenues 118,588 116,384 2,204 1.9%
Taxes 143,898 140,584 3,314 2.4%
Other General Reoenues 13,081 19,995 (6,914) -34.6%
Expenses 254,903 265,805 (10,902) -4.1%
• The total assets of the City of Huntington Beach exceeded its liabilities at the
close of the most recent fiscal year by $884,061,000. Of this amount,
$100,499,000 may be used to meet the City's ongoing obligations to citizens and
creditors. Net assets increased $20,664,000 or 2.4%. This increase is due in
large part to additions made to capital assets for residential street improvements
and infrastructure improvements to the City's water and sewer systems.
Unrestricted net assets increased by $5,921,000 or 6.3%.
• Long-term obligations decreased by $6,550,000 or 4.2%. This decrease is
primarily due to debt service payments and a new bond issue used to refund two
existing bonds held by the City.
• Program revenues increased by $2,204,000 or 1.9%. This increase is primarily
due to an increase in Gas Tax and Planning and Building permit and review
revenue from prior year. Taxes increased $3,314,000 or 2.4% due in large part to
increases in sales tax, transient occupancy tax, and utility franchise revenue.
Other General Revenues decreased by $6,914,000 primarily due to a gain on sale
of property in the prior fiscal year and none in the current year.
• Expenses decreased by $10,902,000 or 4.1% due to ongoing efforts to cut costs
given the sluggish economy.
Overview of the Financial Statements
This discussion and analysis serve as an introduction to the City of Huntington Beach's
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.
4
f
'. City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2011
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 full 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 City Council, City Manager, City Treasurer, City Attorney, City Clerk, Finance,
Human Resources, Planning & Building, Fire, Information Services, Police, Economic
Development, Community Services, Library Services, Public Works, and Non-
Departmental. Business activities include Water, Sewer, Refuse, and Hazmat Service.
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, and various assessment districts
described in Note 1 to the financial statements.
The government-wide financial statements can be found on pages 19-20 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 resource
inflows and outflows available for spending, as well as balances of resources available
for spending at the end of the fiscal year.
It is useful to compare information presented for the governmental funds to information
presented for governmental activities in the government-wide financial statements. The
reconciliations indicate to the reader the differences in financial reporting between the
governmental activities section and the governmental funds section.
5
o City of Huntington Beach
Management's Discussion and Analysis
¢eE„ ¢ For the Year Ended September 30, 2011
The City maintains 20 individual governmental funds. Information is presented
separately in the governmental funds balance sheet and in the governmental funds
statement of revenue, expenditures, and changes in fund balances for the General Fund,
Grants Special Revenue Fund, Redevelopment Agency Debt Service Fund,
Redevelopment Agency Capital Projects Fund, and Low-Income Housing Capital
Projects Fund all of which are considered to be major funds. Data from the other 15
smaller funds are combined into a single, aggregated presentation. Individual fund data
for each of these other governmental funds is provided in combining statements
elsewhere in this report.
The City provides an annual appropriated budget for its governmental funds. Budgetary
comparison schedules for the General Fund and the major special revenue funds
(Grants) are required to be presented and are included on pages 95-96 and 111-121 of
this report and demonstrate compliance with the budget.
The basic governmental fund financial statements can be found on pages 21-24 of this
report.
Proprietary Funds
Proprietary funds or 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 Service, Refuse, and Hazmat Service
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, Sewer Service, Refuse, and Hazmat Service Funds, all of which
are considered to be major funds of the City.
The basic proprietary fund financial statements can be found on pages 26-28 of this
report.
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 29 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 30-91 of this report.
6
City of Huntington Beach
_ Management's Discussion and Analysis
For the Year Ended September 30, 2011
x
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 and OPEB benefits to its employees and
General Fund budget-to-actual comparisons. Required supplementary information can
be found on pages 94-98 of this report.
The combining statements and schedules referred to earlier in connection with other
governmental funds is presented immediately following the required supplementary
information on pensions. Combining and individual fund statements and schedules can
be found on pages 103-110 of this report.
Government-wide Financial Analysis
As noted earlier, net assets may serve, over time, as a useful indicator of a government's
financial position. At the end of the current fiscal year, the City reported positive net
asset balances for both governmental and business-type activities, with total assets
exceeding liabilities by $884,061,000.
Below is a summary schedule of the City's net assets at September 30, 2011 (in
thousands):
Amount Percent
September 30, September 30, Increase Increase
Governmental Activities 2011 2010 (Decrease) (Decrease)
Current and Other Assets $ 152,402 $ 142,600 $ 9,802 6.9%
Capital Assets 672,119 678,791 (6,672) -1.0%
Total Assets 824,521 821,391 3,130 0.4%
Current and Other Liabilities 14,424 16,927 (2,503) -14.8%
Long-Term Obligations 148,166 154,878 (6,712) -4.3%
Total Liabilities 162,590 171,805 (9,215) -5.4%
Net Assets:
Invested in Capital Assets, Net of Related Debt 569,497 567,631 1,866 0.3%
Restricted 51,195 49,100 2,095 4.3%
Unrestricted 41,239 32,855 8,384 25.5%
Total Net Assets $ 661,931 $ 649,586 $ 12,345 1.9%
Amount Percent
September 30, September 30, Increase Increase
Business Activities 2011 2010 (Decrease) (Decrease)
Current and Other Assets $ 95,550 $ 100,141 $ (4,591) -4.6%
Capital Assets 134,882 121,579 13,303 10.9%
Total Assets 230,432 221,720 8,712 3.9%
Current and Other Liabilities 7,209 6,978 231 3.3%
Long-Term Obligations 1,093 931 162 17.4%
Total Liabilities 8,302 7,909 393 5.0%
Net Assets:
Invested in Capital Assets, Net of Related Debt 134,882 121,576 13,306 10.9%
Restricted 27,988 30,512 (2,524) -8.3%
Unrestricted 59,260 61,723 (2,463) -4.0%
Total Net Assets $ 222,130 $ 213,811 $ 8,319 3.9%
7
r
City of Huntington Beach
Management's Discussion and Analysis
e � For the Year Ended September 30, 2011
Analysis of the City's Net Assets
Current and Other Assets: The increase in current and other assets of $9,802,000 is
primarily due to an increase in cash and investments as a result of modest improvements
in revenue accompanied by cost cutting measures in the current fiscal year.
Current and Other Liabilities: The decrease in current and other liabilities of
$2,503,000 is primarily due to a disbursement from deposits payable for a loan to a
developer relating to the acquisition, rehabilitation and operation of a multifamily
residential project.
Long-Term Obligations: The decrease in long-term obligations of $6,712,000 is
primarily due debt service payments made in the current year.
Invested in Capital Assets, Net of Related Debt: 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. Net assets invested in capital assets net of related debt from
governmental activities increased $1,866,000 or 0.3%. This increase was primarily due
to improvements made to the City's buildings and road infrastructure. Net assets
invested in capital assets net of related debt from business activities increased
$13,306,000 or 10.9% due to improvements made to the City's water and sewer
systems.
Restricted Net Assets: An additional portion of the City's net assets is subject to
external (legally imposed or statutory) restrictions ($51,195,000 for governmental
activities, and $27,988,000 for business activities). These amounts represent 7.7% and
12.6% of net assets for governmental activities and business activities, respectively.
Restricted net assets from governmental activities increased $2,095,000 or 4.3%. The
increase is primarily due to more funds available for capital projects. Restricted net
assets from business activities decreased by $2,524,000 or 8.3% primarily due to
restricted funds used for improvement to the City's water and sewer systems.
Unrestricted Net Assets: The unrestricted assets ($41,239,000 for governmental
activities and $59,260,000 for business activities) represent 6.2% and 26.7% of net
assets for governmental activities and business activities, respectively. Unrestricted net
assets for governmental activities increased $8,384,000 or 25.5% primarily due to an
increase in sales tax, transient occupancy tax, and utility franchise revenue along with
cost cutting measures. Unrestricted net assets for business activities decreased by
$2,463,000 or 4.0%. This decrease was primarily due to improvements made to the
City's water and sewer systems.
8
City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2011
A condensed summary of governmental activities (in thousands) follows:
Governmental Activities
Amount Percent
September 30, September 30, Increase Increase
Revenues: 2011 2010 (Decrease) (Decrease)
Program Revenues:
Charges for Current Services $ 48,347 $ 46,234 $ 2,113 4.6%
Operating Grants and Contributions 8,914 7,069 1,845 26.1%
Capital Grants and Contributions 5,198 7,418 (2,220) -29.9%
Total Program Revenues 62,459 60,721 1,738 2.9%
General Revenues:
Property Taxes 86,056 85,552 504 0.6%
Sales Taxes 25,339 23,646 1,693 7.2%
Utility Taxes 19,135 19,757 (622) -3.1%
Other Taxes 13,368 11,629 1,739 15.0%
Use of Money and Property 3,239 4,043 (804) -19.9%
From Other Agencies-Unrestricted 5,647 4,184 1,463 35.0%
Other 3,060 9,944 (6,884) -69.2%
Total General Revenues 155,844 158,755 (2,911) -1.8%
Total Revenues 218,303 219,476 (1,173) -0.5%
Expenses:
City Council 300 301 (1) -0.3%
City Manager 1,502 1,674 (172) -10.3%
City Treasurer 1,274 1,532 (258) -16.8%
City Attorney 2,354 2,772 (418) -15.1%
City Clerk 813 883 (70) -7.9%
Finance 3,423 4,309 (886) -20.6%
Human Resources 4,792 5,284 (492) -9.3%
Planning and Building 6,036 7,778 (1,742) -22.4%
Fire 35,393 33,545 1,848 5.5%
Information Services 5,909 6,812 (903) -13.3%
Police 60,192 59,049 1,143 1.9%
Economic Development 10,876 11,891 (1,015) -8.5%
Community Services 16,104 16,147 (43) -0.3%
Library Services 3,838 4,519 (681) -15.1%
Public Works 27,232 26,483 749 2.8%
Non-Departmental 19,595 24,303 (4,708) -19.4%
Interest on Long-Term Debt 6,287 6,146 141 2.3%
Total Expenses 205,920 213,428 (7,508) -3.5%
Change in Net Assets Before Transfers 12,383 6,048
Transfers (38) (38)
Change in Net Assets After Transfers 12,345 6,010
Net Assets-Beginning of Year 649,586 643,576
Net Assets-End of Year $ 661,931 $ 649,586
The cost of all governmental activities this year was $205,920,000. However, as shown
in the Statement of Activities, the amount that the taxpayers ultimately financed for these
activities was $143,461,000, because costs of $48,347,000 were paid by those who
directly benefited from the programs, or by other governments and organizations that
subsidized certain programs with operating grants and contributions of $8,914,000, and
capital grants and contributions of$5,198,000. Overall, the City's governmental program
revenues were $62,459,000. The City paid for the remaining "public benefit" portion of
governmental activities with $155,844,000 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. Charges for Current Services increase by $2,113,000 or 4.6% due
to an increase in gas tax, building and planning revenue.
9
0:. . City of Huntington Beach
Management's Discussion and Analysis
¢A f tg For the Year Ended September 30, 2011
Operating Grants and Contribution increased by $1,845,000 or 26.1% primarily due to an
increase in police grants from the prior year. Capital Grants and Contributions have
decreased by $2,220,000 or 29.9% primarily due to a decrease in economic
development and public works grants.
Total program expenses decreased by $7,508,000 due to the following:
• Planning and Building decreased by $1,742,000 primarily due to savings realized
from the reduction of their document imaging services and the deferral of various
building and planning contracts.
• Fire and Police expenditures increased by $1,848,000 and $1,143,000,
respectively, primarily due to and increase in pension and worker's compensation
costs.
• Non-Departmental expenditures decreased by $4,708,000 primarily due to
general and sick leave payouts for early retirement incentive in the prior year.
• Salary across all governmental funds decreased by $5,472,000 primarily due to a
strict hiring freeze in the current year.
Total resources available during the year to finance governmental operations were
$867,851,000 consisting of net assets at October 1, 2010, of $649,586,000, program
revenues of $62,459,000, general revenues of $155,844,000, less transfers of $38,000.
Total expenses for governmental activities during the year were $205,920,000, thus, net
assets were increased by $12,345,000, to $661,931,000.
A condensed summary of business activities (in thousands) follows:
Business Activities
Amount Percent
September 30, September 30, Increase Increase
2011 2010 (Decrease) (Decrease)
Program Revenues:
Charges for Current Services $ 56,129 $ 55,525 $ 604 1.1%
Capital Grants and Contributions - 138 (138) -100.01
Total Program Revenues 56,129 55,663 466 0.8%
Use of Money and Property 1,135 1,824 (689) -37.8%
Total Revenues 57,264 57,487 (223) -0.4%
Expenses:
Water Utility 31,712 34,902 (3,190) -9.1%
Refuse Collection 10,690 10,585 105 1.0%
Sewer Service 6,338 6,575 (237) -3.6%
Hazmat Service 243 315 (72) -22.9%
Total Expenses 48,983 52,377 (3,394) -6.5%
Increase in Net Assets Before Transfers 8,281 5,110
Transfers 38 38
Total Change In Net Assets 8,319 5,148
Net Assets-Beginning of Year 213,811 208,663
Net Assets-End of Year $ 222,130 $ 213,811
The City's net assets from business activities increased by $8,281,000 before transfers.
Contributing to this increase were net program revenue of $7,146,000 and interest
income of $1,135,000. Use of money and property decreased by $689,000 due to a
decrease in the rate of return of the City's cash and investments.
10
k City of Huntington Beach
Management's Discussion and Analysis
� n,ga For the Year Ended September 30, 2011
The cost of all Business-Type activities this year was $48,983,000. As shown in the
Statement of Activities, the amount paid by users of the systems was $56,129,000, there
were no capital grants and contributions, other revenue was $1,135,000, and transfers
were $38,000. Beginning net assets were $213,811,000 and ending net assets were
$222,130,000. Of the ending net asset amount, $134,882,000, or 60.7%, was invested
in capital assets, $27,988,000 or 12.6% was restricted for expenditures for the Water
Master Plan, and $59,260,000, or 26.7% was unrestricted.
The transfers for Business-Type activities was $38,000 in both the current year and prior
year.
Financial Analysis of the City's Major Governmental Funds
Below is an analysis of the City's major governmental fund activities for the year (in
thousands):
GOVERNMENTAL FUNDS
Amount Percent
September 30, September 30, Increase Increase
2011 2010 (Decrease) (Decrease)
Total Fund Equity:
General Fund $ 54,556 $ 41,352 $ 13,204 31.9%
Grants Special Revenue Fund 1,093 923 170 18.4%
Redevelopment Agency Debt Service (1,497) (152) (1,345) 884.9%
Redevelopment Agency Capital Projects 685 7,809 (7,124) -91.2%
Low-Income Housing Fund 10,921 11,409 (488) -4.3%
Total Fund Equity $ 65,758 $ 61,341 $ 4,417 7.2%
The General Fund Balance increased by $13,204,000 primarily due to the transfer of
land held for resale from the Redevelopment Capital Projects Fund and a slight revenue
growth combined with overall cost cutting measures implemented by all departments.
The Grants Special Revenue Fund Balance increased by $170,000 primarily due to the
combination of the Narcotics Forfeiture Special Revenue Fund with the Grants Special
Revenue Fund in the current year. The prior year information was not restated.
The Redevelopment Agency Debt Service Fund Balance decreased by $1,345,000. This
decrease was primarily due to the State-mandated Supplemental Education Revenue
Augmentation Fund (SERAF) contribution required by AB 26 4x.
The Redevelopment Agency Capital Projects Fund Balance decreased by $7,124,000
primarily due to the transfer of land held for resale to the General Fund.
The Low-Income Housing Fund decreased $488,000. This decrease was primarily due
affordable housing project expenditures exceeding revenues. The revenue from the
housing set-aside portion of property tax increment received was less than anticipated
due to the sluggish economy.
11
J
City of Huntington Beach
Management's Discussion and Analysis
0����tF For the Year Ended September 30, 2011
Financial Analysis of the City's Major Proprietary Funds
Below is an analysis of the fund equity of the City's proprietary funds (in thousands):
Enterprise Funds
Amount Percent
September 30, September 30, Increase Increase
2011 2010 (Decrease) (Decrease)
Net Assets:
Water Fund $ 164,199 $ 160,410 $ 3,789 2.4%
Sewer Fund 57,672 53,263 4,409 8.3%
Refuse Fund 31 39 (8) -20.5%
Hazmat Service Fund 228 99 129 130.3%
Total Net Assets $ 222,130 $ 213,811 $ 8,319 3.9%
Unrestricted Net Assets:
Water Fund $ 37,727 $ 45,117 $ (7,390) -16.4%
Sewer Fund 21,274 16,468 4,806 29.2%
Refuse Fund 31 39 (8) -20.5%
Hazmat Service Fund 228 99 129 130.3%
Total Unrestricted Net Assets $ 59,260 $ 61,723 $ (2,463) -4.0%
The Water Fund net assets increased by $3,789,000 and unrestricted net assets
decreased by $7,389,000. The net assets increased due in large part to interest income
and less expenses for supplies and operations. The unrestricted net assets decreased
due to the remodeling of the water operations facility.
The Sewer Fund net assets increased by $4,409,000 and unrestricted net assets
increased by $4,806,000. This increase is due to a reduction in repairs and maintenance
costs in the current year.
Debt Administration
Below is a schedule of the changes to the City's long-term obligations (in thousands):
Balance
Balance September 30,
Governmental Activities: October 1,2010 Additions Retirements 2011
Re\enue Bonds $ 55,385 $ 36,275 $ (42,185) $ 49,475
Tax Allocation Bonds 21,080 - (1,375) 19,705
Judgement Obigation Bonds 5,989 - (810) 5,179
Claims 13,927 8,947 (5,739) 17,135
Compensated Absences 10,277 3,712 (2,858) 11,131
Pension Obligation 4,176 3,812 (3,957) 4,031
Loans 33,838 142 (1,110) 32,870
Leases Payable 857 - (285) 572
Pollution Remediation 2,200 - - 2,200
PARS Payable 7,149 - (1,281) 5,868
Total Long-Term Obligations-Governmental
Activities 154,878 52,888 (59,600) 148,166
Business Activities:
Compensated Absences 928 260 (95) 1,093
Leases 3 - (3) -
Business Activities 931 260 (98) 1,093
Total Long-Term Obligations $ 155,809 $ 53,148 $ (59,698) $ 149,259
12
�a
City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2011
Additional information on the City's long-term debt is shown in Note 11 to the financial
statements. The City of Huntington Beach is legally restricted to issuing general
obligation bonds to 12% of its assessed valuation. Since the City has no general
obligation bonds outstanding, the limit does not apply. This is shown on page 144 of the
financial statements. The City's total debt decreased $6,550,000 or 4.2% from the prior
fiscal year. This decrease was due in large part to the following:
• Issuance of $36,275,000 a new Lease Revenue Bond used to refund outstanding
amounts for the 2001 Series A and B Public Financing Authority Lease Revenue
Bonds totaling $24,900,000 and $13,960,000, respectively. Although the
redemption of the old bonds occurred after the end of the fiscal year, the refunding
qualified as an in-substance defeasance of debt. Accordingly, the bond liability
has been removed from the financial statements as of fiscal year-end.
• Current year debt service payments on Bonds, PARS payable, and various other
loans.
The City continues to maintain strong credit ratings on all of its debt issues. The
following are the latest ratings as determined by Moody's Investors Service and Standard
and Poor's.
Debt Instrument Moody's S & P
1999 Tax Allocation Refunding Bonds Baa2 A
2002 Tax Allocation Refunding Bonds Baa2 A
2004 Judgment Obligation Bonds Aa2 AA
2010 Lease Revenue Bonds, Series A Aa3 AA
2011 Lease Revenue Bonds, Series A Aa3 AA
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.
•
13
City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2011
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: 2011 2010 (Decrease) (Decrease)
Land $ 366,751 $ 367,323 $ (572) -0.2%
Buildings 133,074 128,662 4,412 3.4%
Machinery and Equipment 8,836 11,274 (2,438) -21.6%
Construction in Progress 3,181 10,242 (7,061) -68.9%
Joint Venture 2,258 2,094 164 7.8%
Infrastructure 158,019 159,196 (1,177) -0.7%
Total Governmental Activities 672,119 678,791 (6,672) -1.0%
Busi ness Activities:
Land 3,907 3,907 0.0%
Buildings 39,523 40,820 (1,297) -3.2%
Machinery and Equipment 2,582 2,700 (118) -4.4%
Construction in Progress 19,382 12,375 7,007 56.6%
Infrastructure 69,488 61,777 7,711 12.5%
Total Business Activities 134,882 121,579 13,303 10.9%
Total Capital Assets $ 807,001 $ 800,370 $ 6,631 0.8%
Capital assets from governmental activities decreased $6,672,000 or 1.0%. This
decrease is largely due to depreciation outpacing acquisitions of capital assets due to
cost cutting measures taken in the current fiscal year. Capital assets from business
activities increased $13,303,000 or 10.9%. This increase was largely due to ongoing
improvement and rehabilitation of the City's sewer system and water facilities and off-set
by annual depreciation. Further information on the City's capital assets can be found in
Note 12 of the financial statements.
General Fund Budgetary Highlights
Changes to Original Budget
Final budgeted revenues for the General Fund increased $4,811,000 or 2.8% from the
original (adopted) budget for the fiscal year ended September 30, 2011. The change
from original to final budget occurred primarily as a result of adjustments made to
budgeted sales tax.
Comparing the fiscal year 2010/2011 original budget (or adopted) General Fund
expenditures amount of $171,611,000 to the final budgeted amount of $175,654,000
shows a net increase of $4,043,000 (2.4%). This overall increase was the result of
budget carryovers from the previous year.
Variance with Final Budget
General Fund actual revenues were greater than the final budget by $2,804,000 for the
fiscal year ended September 30, 2011. The steady yet modest gains in the economy
yielded positive results above budgeted projections. The impact of the improving
economy on major categories of revenue is listed below:
14
City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2011
• Property Tax: The net $1,017,000 positive variance in actual vs. final budgeted
revenue in this category was primarily due to fewer property tax delinquencies and
home foreclosures than originally projected.
• Other Taxes: The net $833,000 positive variance in actual vs. final budgeted
revenue in this category was primarily due to additional sales tax revenue from the
State under the "Triple Flip" reimbursement formula whereby cities receive 0.25
percent of sales tax revenue one year delayed.
• Intergovernmental: The net $1,060,000 positive variance in actual vs. final
budgeted revenue in this category was primarily due to helicopter services
revenue and overhead charges received from the Community Facilities Districts
that were not originally projected in the current year.
General Fund expenditures were $4,937,000 less than the final budget. The favorable
budget variance is due in large part to the following:
• Salary savings of $885,000 from fully-funded positions that remained vacant
during the year due to a strict hiring freeze.
• Public Works realized $1,344,000 in savings from deferred repairs and
maintenance of building, grounds, storm drains and postponement of the fleet
management software implementation.
• Planning and Building realized $925,000 in savings from the reduction of their
document imaging services and the deferral of various building and planning
contracts.
• Continuing cut costing measures in Community Services and Library Services
programs generating a $1,584,000 in savings.
Analysis of City's Other Major Governmental Funds
Grants Special Revenue Fund
The fund balance in the Grant Special Revenue Fund decreased by $753,000 due to the
inherent timing differences between when grant expenditures are incurred versus when
the revenues are received. Significant grant expenditures in the current year were
$748,000 in loans made through the HOME program and $627,000 of improvements to
the Edison Youth Sports Park.
Redevelopment Debt Service Fund
The fund balance in the Redevelopment Debt Service Fund decrease by $1,345,000
primarily due to less tax increment revenues received than originally projected.
15
J
a= City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2011
x
Redevelopment Agency Capital Projects Fund
The fund balance in the Redevelopment Agency Capital Projects Fund decreased by
$7,124,000 primarily due to the transfer of land held for resale with a book value of
$5,978,000 to the General Fund and the acquisition of leasehold interest in a property
located on Edinger Avenue in the amount of $1,103,000 for the purpose of future
development of the site.
Low-Income Housing Capital Projects Fund
The fund balance in the Low-Income Housing Capital Projects Fund decreased by
$488,000 due to loans made through the first time homebuyers program in the amount of
$1,349,000 in the current year.
Economic Factors and Next Year's Budgets and Rates
The local and regional economies are demonstrating signs of a steady, albeit slow,
recovery in the economy. As a result, many General Fund revenue sources are slowly
climbing out of the precipice of the Great Recession. Overall General Fund revenue
performance, however, has not yet been restored to its pre-recession levels. In light of
this, the General Fund forecast for fiscal year 2011/2012 is conservative, with certain
revenue sources projected to remain flat, while others are projected to slightly outpace
last year's performance. Key General Fund revenue highlights are discussed below:
• Property tax revenue will remain relatively flat due to the prolonged weakness in
the real estate market as evidenced by the decrease in home sales, declines in
market prices, continuing property value re-assessments and increasing property
tax appeals.
• Modest increases will be realized in Transient Occupancy Tax revenue as the
Huntington Beach Marketing and Visitor's Bureau continues to promote the City
as a desirable and affordable vacation location, and the City's new boutique hotels
continue to attract new and younger visitors.
• Continuing increases in sales tax revenue will be realized due to steadily
increasing fuel prices, as well as, new retail stores and restaurants.
• Utility taxes will remain relatively flat as economic pressures and energy
conservation efforts continue to suppress demand and prices.
• Significant increases in the annually required contributions to the City's pension
plans due to longer than anticipated life expectancies, declines in CaIPERS'
portfolio values and other actuarial losses.
While the local and regional economies are showing steady, albeit slow, signs of
improvement, the State continues to face budgetary challenges that have required
draconian cuts in virtually every area of State spending. Over the past few years, the
State has reduced local government revenues as a solution to it chronic budget deficits.
Despite a recent ballot measure to protect local government revenue, the most recent
attack on local governments is unprecedented, and devastating. In a move that has
toppled the very foundation of economic development funding across California for the
16
•
t
City of Huntington Beach
Management's Discussion and Analysis
For the Year Ended September 30, 2011
V t484=4- \
X
past five decades, the State essentially obliterated all redevelopment activities
statewide. AB 1X 26, new State legislation that eliminates redevelopment funding
statewide, was adopted in June 2012. While cities and redevelopment agencies alike
challenged this groundbreaking legislation in the courts, it was ultimately upheld, creating
an at least $1.7 billion windfall for the State. As of this writing, all redevelopment
agencies, including the Redevelopment Agency of the City of Huntington Beach, have
been dissolved, and are winding down their activities, pursuant to State law. The City
will work closely with its partners at the State and at the regional level to continue to
create opportunities to encourage developers to invest in Huntington Beach, despite the
elimination of critical redevelopment seed money, as a great place to live, work and
play.
Contacting the City's Financial Management Team
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 Finance Department at 2000 Main Street, Huntington Beach,
California, 92648-2702, phone (714) 536-5630 or e-mail kirsty.wapner@surfcity-hb.org.
17
BASIC FINANCIAL STATEMENTS
CITY OF HUNTINGTON BEACH
STATEMENT OF NET ASSETS
SEPTEMBER 30,2011
(In Thousands)
Governmental Business-Type
ASSETS Activities Activities Total
Cash and Investments $ 47,339 $ 60,755 $ 108,094
Receivables, Net 30,102 5,527 35,629
Inventories - 1,280 1,280
Prepaids 4,540 - 4,540
Other Assets 1,265 1,265
Land Held for Resale 5,978 - 5,978
Other Postemployment Benefits Asset 8,792 - 8,792
Subtotal 98,016 67,562 165,578
Restricted Assets:
Cash and Investments 25,237 27,988 53,225
Cash and Investments with Fiscal Agent 6,846 - 6,846
Receivables, Net 22,303 - 22,303
Total Restricted Assets 54,386 27,988 82,374
Capital Assets:
Non-Depreciable 372,190 23,289 395,479
Depreciable 299,929 111,593 411,522
Total Capital Assets 672,119 134,882 807,001
Total Assets 824,521 230,432 1,054,953
LIABILITIES
Accounts Payable 4,238 5,634 9,872
Accrued Payroll 5,526 - 5,526
Deposits 1,469 1,575 3,044
Subtotal 11,233 7,209 18,442
Liabilities Payable from Restricted Assets:
Accounts Payable 1,454 - 1,454
Accrued Interest Payable 459 - 459
Deposits 1,278 - 1,278
Total Liabilities Payable from Restricted Assets 3,191 - 3,191
Long-Term Obligations:
Long-Term Obligations Due Within One Year 18,487 298 18,785
Long-Term Obligations Due in More than One Year 129,679 795 130,474
Total Long-Term Obligations 148,166 1,093 149,259
Total Liabilities 162,590 8,302 170,892
NET ASSETS
Invested in Capital Assets, Net of Related Debt 569,497 134,882 704,379
Restricted for:
Debt Service 6,856 - 6,856
Capital Projects 17,330 27,988 45,318
Public Works and Community Services Projects 27,009 - 27,009
Total Restricted Net Assets 51,195 27,988 79,183
Unrestricted 41,239 59,260 100,499
Total Net Assets $ 661,931 $ 222,130 $ 884,061
See Notes to the Financial Statements
19
CITYOF HUNTINGTON BEACH
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
Net(Expense)Revenue and Changes in
Program Revenues Net Assets
Charges for Operating Capital Grants Business-
Current Grants and and Governmental Type
Functions/Programs Expenses Services Contributions Contributions Activities I Activities Total
Governmental Activities:
City Council $ 300 $ 63 $ $ - $ (237) $ $ (237)
City Manager 1,502 127 - (1,375) (1,375)
City Treasurer 1,274 568 - (706) - (706)
City Attorney 2,354 127 - (2,227) (2,227)
City Clerk 813 98 - (715) (715)
Finance 3,423 1,202 - (2,221) (2,221)
Human Resources 4,792 1,117 - (3,675) (3,675)
Planning&Building 6,036 6,084 - 48 48
Fire 35,393 8,632 178 - (26,583) (26,583)
Information Services 5,909 741 - - (5,168) - (5,168)
Police 60,192 5,207 1,420 - (53,565) (53,565)
Economic De\elopment 10,876 2,800 1,517 778 (5,781) (5,781)
Community Services 16,104 15,345 93 - (666) (666)
Library Services 3,838 325 70 - (3,443) (3,443)
Public Works 27,232 5,638 5,636 4,420 (11,538) (11,538)
Non-Departmental 19,595 273 - - (19,322) (19,322)
Interest on Long-Term Debt 6,287 - (6,287) (6,287)
Total Governmental Activities 205,920 48,347 8,914 5,198 (143,461) - (143,461)
Business-type Activities:
Water Utility 31,712 34,583 - - 2,871 2,871
Sewer Service 6,338 10,532 4,194 4,194
Refuse Collection 10,690 10,631 (59) (59)
Hazmat SerHce 243 383 140 140
Total Business-Type Activities 48,983 56,129 - - 7,146 7,146
Total Governmental and Business
Type Activities $ 254,903 $ 104,476 $ 8,914 $ 5,198 (143,461) 7,146 (136,315)
General Revenues:
Taxes:
Property Taxes 86,056 86,056
Sales Taxes 25,339 25,339
Utility Taxes 19,135 19,135
Other Taxes 13,368 13,368
Total Taxes 143,898 143,898
Other:
Use of Money and Property 3,239 1,135 4,374
From Other Agencies-Unrestricted 5,647 - 5,647
Other 3,060 - 3,060
Total General Revenues 155,844 1,135 156,979
Transfers (38) 38 -
Total General Revenues and Transfers 155,806 1,173 156,979
Change in Net Assets 12,345 8,319 20,664
Net Assets-Beginning of Year 649,586 213,811 863,397
Net Assets-End of Year $ 661,931 $ 222,130 $ 884,061
See Notes to the Financial Statements
20
CITY OF HUNTINGTON BEACH
BALANCE SHEET
GOVERNMENTALFUNDS
SEPTEMBER 30,2011
(In Thousands)
Low-Income
Grants Redevelopment Redevelopment Housing Other
Special Agency Debt Agency Capital Capital Governmental
ASSETS General Fund Revenue Service Projects Projects Funds Total
Cash and Investments $ 47,339 $ $ 301 $ 853 $ 5,653 $ 18,430 $ 72,576
Cash and Investments with Fiscal Agent - 2,451 - - 4,395 6,846
Taxes Receivable 24,771 3,866 - - 197 28,834
Other Receivables,Net 5,331 6,285 79 120 10,232 1,524 23,571
Due from Other Funds - - - 1,097 - 886 1,983
Advances to Other Funds 341 - 5,291 - 5,632
Land Held for Resale 5,978 - - 5,978
Other Assets - 1,265 1,265
Prepaids 4,540 - - - 4,540
TOTAL ASSETS $ 88,300 $ 6,285 $ 6,697 $ 2,070 $ 21,176 $ 26,697 $ 151,225
LIABILITES AND FUND BALANCES
Liabilities:
Accounts Payable $ 4,238 $ 381 $ $ 22 $ 36 $ 1,015 $ 5,692
Accrued Payroll 5,526 - - - - 5,526
Due to Other Funds - 513 1,097 - 373 1,983
Advances from Other Funds - - 3,928 1,363 341 5,632
Deposits Payable 1,469 11 - - - 1,267 2,747
Deferred Revenue 15,519 4,287 3,169 10,219 1,001 34,195
Claims Payable 6,992 - - - - - 6,992
Total Liabilities 33,744 5,192 8,194 1,385 10,255 3,997 62,767
Fund Balances:
Nonspendable
Land Held for Resale 5,978 - - - - - 5,978
Prepaid Insurance 3,922 3,922
Advances to Other Fund 341 341
Worker's Compensation Claims Deposit 600 600
Restricted
Underground Utilities 364 364
Restitution 244 - 244
Pollution Remediation - - 442 442
Debt Service 2,451 4,349 6,800
Highways,Streets and Transportation - - 8,811 8,811
Low Income Housing 5,567 - 5,567
Air Quality - 765 765
Parks - 2,946 2,946
Advances to Other Fund - 5,291 - 5,291
Other Capital Projects - 280 - 280
Long-Term Receivables - 56 - - 56
Other Purposes 696 1,093 - 405 63 - 2,257
Committed
Other Capital Projects - - - - 4,049 4,049
Assigned
Economic Uncertainties 23,185 - 23,185
Litigation Reserves 900 900
Capital Projects Reserve 4,270 4,270
Equipment Replacement 6,913 - 6,913
Capital Projects - 1,675 1,675
PARS Obligation 4,649 - 4,649
Other Purposes 2,494 36 2,530
Unassigned (4,004) (373) (4,377)
TOTAL FUND BALANCES 54,556 1,093 (1,497) 685 10,921 22,700 88,458
TOTAL LIABILITES AND FUND BALANCES $ 88,300 $ 6,285 $ 6,697 $ 2,070 $ 21,176 $ 26,697 $ 151,225
See Notes to the Financial Statements
21
CITY OF HUNTINGTON BEACH
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
SEPTEMBER 30,2011
(In Thousands)
Amounts reported for governmental activities in the statement of net assets are
different because:
Total Fund Balances Governmental Funds $ 88,458
Net capital assets used in governmental activities are not current financial resources and,
therefore, are not reported in the governmental funds
Capital Assets 933,465
Accumulated Depreciation (261,346)
Total Capital Assets 672,119
Long-term receivables are not available to pay for current-period expenditures and
accordingly are deferred in the governmental funds. 34,195
Other Postemployment Benefit Asset 8,792
Other long-term liabilities are not due in the current period and, therefore, are not recorded
in the governmental funds.
Accrued Interest Payable (459)
Long-term Liabilities, including bonds and certificates of participation payable, are not due
and payable in the current period and therefore are not reported in the governmental funds.
Long-Term Obligations Due in One Year (11,495)
Long-Term Obligations Due in More than One Year (129,679)
Net Assets of Governmental Activities $ 661,931
See Notes to the Financial Statements
22
CITY OF HUNTINGTON BEACH
STATEMENT OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
Redevelopment
Grants Special Agency Debt
REVENUES General Fund Revenue Service
Property Taxes $ 67,842 $ $ 18,027
Sales Taxes 22,617 -
Utility Taxes 19,135
Other Taxes 13,368
Licenses and Permits 6,593
Fines and Forfeitures 4,334 -
From Use of Money and Property 14,267 172 114
Intergovernmental 5,448 5,958 -
Charges for Current Services 23,543 - -
Other 2,253 58 -
Total Revenues 179,400 6,188 18,141
EXPENDITURES
Current:
City Council 300 - -
City Manager 1,493 -
City Treasurer 1,274
City Attorney 2,142
City Clerk 798
Finance 3,423 -
Human Resources 6,043
Planning&Building 5,826 208
Fire 34,317 229
Information Services 5,879 -
Police 58,848 698 -
Economic Development 1,723 2,131 3,376
Community Services 12,736 267 -
Library Services 3,480 66
Public Works 16,169 470
Non-Departmental 14,360 -
Capital Outlay - 2,521 -
Debt Service:
Principal 1,566 135 2,351
Interest 340 36 3,008
Total Expenditures 170,717 6,761 8,735
Excess(Deficiency)Of Revenues Over
(Under)Expenditures 8,683 (573) 9,406
OTHER FINANCING SOURCES(USES)
Transfers In 13,199 - -
Issuance of Long-Term Debt -
Issuance Premium
Payments to Escrow -
Transfers Out (8,678) (180) (10,751)
Total Other Financing Sources (Uses) 4,521 (180) (10,751)
Net Change In Fund Balances 13,204 (753) (1,345)
Fund Balances-Beginning Of Year 41,352 1,846 (152)
Fund Balances-End Of Year $ 54,556 $ 1,093 $ (1,497)
See Notes to the Financial Statements
23
CITY OF HUNTINGTON BEACH
STATEMENT OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
FOR THE YEAR ENDED SEPTEMBER 30,20,11
(In Thousands)
(continued)
Redevelopment Low-Income Other
Agency Capital Housing Capital Governmental
Projects Projects Funds Total
$ $ - $ - $ 85,869
2,417 25,034
- 19,135
- 13,368
135 6,728
- 4,334
752 126 229 15,660
- - 6,253 17,659
- - 636 24,179
26 3 477 2,817
778 129 10,147 214,783
- - - 300
- 1,493
- - 1,274
212 - 2,354
- - 798
- 3,423
63 6,106
- 6,034
- 34,546
- 5,879
- - - 59,546
2,729 3,825 - 13,784
- - 721 13,724
- - 3,546
2 2,365 19,006
- 554 14,914
4,351 6,872
5,394 9,446
- - 3,013 6,397
2,943 3,825 16,461 209,442
(2,165) (3,696) (6,314) 5,341
1,280 3,605 9,301 27,385
- - 36,275 36,275
1,884 1,884
- (37,601) (37,601)
(6,239) (397) (1,178) (27,423)
(4,959) 3,208 8,681 520
(7,124) (488) 2,367 5,861
7,809 11,409 20,333 82,597
$ 685 $ 10,921 $ 22,700 $ 88,458
See Notes to the Financial Statements
24
CITY OF HUNTINGTON BEACH
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 30,2011
(In Thousands)
Amounts reported for governmental activities in the Statement of
Activities are different because:
Net Changes in Fund Balances-Total Governmental funds $ 5,861
Capital Expenditures-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.
Depreciable Assets Purchased 5,502
Non-Depreciable Assets Purchased 1,180
Non-Depreciable Assets Disposition (572)
Capital Asset Depreciation (12,782)
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.
Current Year Property Tax Accrual 18,094
Prior Year Property Tax Accrual (17,602)
Current Year Grant Revenue Accrual 1,469
Repayments on long-term receivables provide current financial resources to
governmental funds,while loans provided consume the current financial
resources of governmental funds. These transactions, however, have no
effect on net assets. 2,928
Other Postemployment Benefits Payments-Expenses reported in the
Statement of Activities do not require the use of current financial resources
and therefore are not reported as expenditures in governmental funds. 131
Liabilities not Liquidated with Current Resources-Some expenses reported
in the Statement of Activities do not require the use of current financial
resources and, therefore, are not reported as expenditures in governmental
funds.
Current Year Interest Accrual (459)
Prior Year Interest Accrual 569
Repayments of long-term debt are expenditures in the governmental funds,
but the repayment reduces long-term debt in the Statement of Net Assets. 47,047
Some expenses reported in the Statement of Activities do not require the
use of current resources, and therefore are not reported as expenditures in
the governmental funds. This amount also includes the amount of debt
proceeds during the year. (39,021)
Change in Net Assets of Governmental Activities $ 12,345
See Notes to the Financial Statements
25
CITY OF HUNTINGTON BEACH
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
SEPTEMBER 30,2011
(In Thousands)
Hazmat
Sewer Service Service
Water Fund Fund Refuse Fund Fund Total
ASSETS
Current Assets:
Cash and Investments $ 39,473 $ 21,185 $ 28 $ 69 $ 60,755
Restricted Cash and Investments 27,988 - - - 27,988
Other Receivables, Net 2,030 484 442 189 3,145
Inventories 1,280 - - - 1,280
Unbilled Receivables 1,510 434 438 - 2,382
Total Current Assets 72,281 22,103 908 258 95,550
Capital Assets:
Land 3,907 - - - 3,907
Buildings and Improvements 40,071 13,505 - 53,576
Machinery and Equipment 8,879 996 - 9,875
Infrastructure 92,190 40,204 - 132,394
Construction in Progress 13,093 6,289 - 19,382
Less Accumulated Depreciation (59,656) (24,596) - (84,252)
Total Capital Assets 98,484 36,398 - - 134,882
Total Assets 170,765 58,501 908 258 230,432
LIABILITIES
Current Liabilities:
Accounts Payable 4,207 580 847 - 5,634
Deposits Payable 1,575 - - - 1,575
Current Portion of Compensated
Absenses and Capital Leases 214 68 8 8 298
Total Current Liabilities 5,996 648 855 8 7,507
Non-Current Liabilities:
Compensated Absences 570 181 22 22 795
Total Liabilities 6,566 829 877 30 8,302
NET ASSETS
Invested in Capital Assets, Net of Related Debt 98,484 36,398 - - 134,882
Restricted for.
Capital Projects 27,988 - - 27,988
Unrestricted 37,727 21,274 31 228 599260
Total Net Assets $ 164,199 $ 57,672 $ 31 $ 228 $ 222,130
See Notes to the Financial Statements
26
CITY OF HUNTINGTON BEACH
STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET ASSETS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
Hazmat
Sewer Service Service
Water Fund Fund Refuse Fund Fund Total
OPERATING REVENUES
Sales $ 33,981 $ - $ - $ - $ 33,981
Fees for Service - 10,471 10,517 383 21,371
Other 602 61 114 - 777
Total Operating Revenues 34,583 10,532 10,631 383 56,129
OPERATING EXPENSES
Water Purchases 12,945 - - - 12,945
Supplies and Operations 2,704 5,103 10,686 243 18,736
Engineering 1,533 - - - 1,533
Production and Distribution 6,600 - - - 6,600
Maintenance 1,842 - - - 1,842
Water Meters 1,796 - - - 1,796
Water Quality 655 - - - 655
Water Use Efficiency 538 - - - 538
Depreciation 3,099 1,235 - - 4,334
Total Operating Expenses 31,712 6,338 10,686 243 48,979
Operating Income(Loss) 2,871 4,194 (55) 140 7,150
NON-OPERATING REVENUES (EXPENSES)
Interest Income 918 215 - 2 1,135
Interest Expense - - (4) - (4)
Total Non-Operating Revenues (Expenses) 918 215 (4) 2 1,131
Change In Net Assets Before Capital
Contributions and Transfers 3,789 4,409 (59) 142 8,281
TRANSFERS
Transfers In - - 51 - 51
Transfers Out - (13) (13)
Total Transfers - - 51 (13) 38
Total Change In Net Assets 3,789 4,409 (8) 129 8,319
Net Assets-Beginning Of Year 160,410 53,263 39 99 213,811
Net Assets-End Of Year $ 164,199 $ 57,672 $ 31 $ 228 $ 222,130
See Notes to the Financial Statements
27
CITY OF HUNTINGTON BEACH
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
Hazmat
Sewer Service Service
Water Fund Fund Refuse Fund Fund Total
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers and Users $ 34,740 $ 10,635 $ 10,646 $ 196 $ 56,217
Cash Paid to Employees for Services (7,852) (2,365) (205) (248) (10,670)
Cash Paid to Suppliers of Goods and Services (20,473) (2,786) (10,441) (1) (33,701)
Net Cash and Investment Provided(Used)by
Operating Activities 6,415 5,484 - (53) 11,846
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers In - - 51 - 51
Transfers Out - - - (13) (13)
Cash Received(Paid)to Other Funds 19 - (23) - (4)
Net Cash and Investments Used by
Noncapital Financing Activities 19 28 (13) 34
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchase of Capital Assets (16,799) (838) - (17,637)
Capital Lease Payment (3) - - (3)
Net Cash and Investments Used by
Capital and Related Financing Activities (16,802) (838) - (17,640)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received 918 215 - 2 1,135
Net Cash and Investments Provided(Used)by
Investing Activities 918 215 - 2 1,135
Net Increase(Decrease)in Cash
and Investments (9,450) 4,861 28 (64) (4,625)
Cash and Investments-
Beginning of Year 76,911 16,324 - 133 93,368
Cash and Investments-End of Year $ 67,461 $ 21,185 $ 28 $ 69 $ 88,743
RECONCILIATION OF OPERATING
INCOME(LOSS)TO NET CASH AND INVESTMENTS
PROVIDED(USED)BY OPERATING ACTIVITIES
Operating Income(Loss) $ 2,871 $ 4,194 $ (55) $ 140 $ 7,150
Adjustmentsto Reconcile Operating
Income to Net Cash and Investments
Provided(Used)by Operating Activities
Depreciation 3,099 1,235 - - 4,334
Decrease(Increase)in Other Receivables, Net 85 108 20 (187) 26
Increase in Unbilled Receivables (2) (5) (5) - (12)
Increase in Inventory (48) - - - (48)
Increase(Decrease)in Accounts Payable 496 9 31 (1) 535
Decrease in Accrued Payroll (279) (81) (10) (8) (378)
Increase in Deposits Payable 74 - - - 74
Increase in Compensated Absences 119 24 19 3 165
Net Cash and Investments Provided(Used)
by Operating Activities $ 6,415 $ 5,484 $ - $ (53) $ 11,846
See Notes to the Financial Statements
28
CITY OF HUNTINGTON BEACH
STATEMENT OF FIDUCIARY FUND NET ASSETS
FIDUCIARY FUNDS
SEPTEMBER 30, 2011
(In Thousands)
Pension Trust
Fund-Retirement
Total Agency Supplemental
ASSETS Funds Fund
Cash and Investments $ 3,431 $ -
Cash and Investments with Fiscal Agent 4,132 -
Mutual Funds - 26,859
Money Market Funds - 793
Accounts Receivable, Net 89 2
Total Assets $ 7,652 27,654
LIABILITIES
Accounts Payable $ 724 15
Due to Bondholders 4,453 -
Held for Others 2,475 -
Benefits Due to Plan Members and Beneficiaries - 4,031
Total Liabilities $ 7,652 4,046
NET ASSETS
Held in Trust For Pension Benefits and Other Purposes $ 23,608
CITY OF HUNTINGTON BEACH
STATEMENT OF CHANGES IN FIDUCIARY FUND NET ASSETS
PENSION TRUST FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(In Thousands)
Pension Trust
Fund-Retirement
Supplemental
ADDITIONS Fund
Employer Contributions $ 3,957
Other Income 96
Total Additions 4,053
DEDUCTIONS
Benefits 3,063
Administrative Costs 240
Investment Expense, Net 1,134
Total Deductions 4,437
Change in Net Assets (384)
Net Assets-Beginning of Year 23,992
Net Assets-End of Year $ 23,608
See Notes to the Financial Statements
29
. .: . , City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
Footnote
Number Description Page
1. Summary of Significant Accounting Policies................31-44
2. Cash and Investments .....................................................45-50
3. Other Receivables ............................................................50-51
4. Deferred Compensation...................................................51-52
5. Deferred Revenue...........................................................:.52
6. Retirement Plan — Normal ...............................................53-55
7. Retirement Plan — Supplemental ...................................56-58
8. Postemployment Medical Insurance ............................59-61
9. Risk Management..................................................... 62-63
10. Interfund Transactions............................................................64-65
11. Long-Term Obligations.....................................................66-82
12. Capital Assets....................................................................83-84
13. Commitments and Contingencies..................................85-86
14. Other Information ..............................................................87
15. Subsequent Events...........................................................87-91
30
City of Huntington Beach
(Votes to Financial Statements
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Reporting Entity
The City of Huntington Beach is the primary government. It was incorporated in
1909 as 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 Finance 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 no separately issued financial statements
available for the Public Financing Authority.
The City of Huntington Beach Community Facilities Districts 1990-1, 2000-1,
2002-1, and 2003-1 (Community Facilities Districts) — 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.
31
= City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The City of Huntington Beach Supplemental Retirement Plan and Trust
(Supplemental Retirement Plan and Trust) — The Trust was formed to provide a
supplemental retirement plan for all employees hired prior to 1997 (exact dates
differed for various associations). The governing board of the Supplemental
Retirement Plan consists of the City Treasurer, Director of Finance, and the City
Administrator (or designee). The Retirement Board is responsible for supervising
all investments, resolving benefit disputes, and ensuring that contributions are
made in order to pay the required benefits. There are no separate financial
statements for this plan and trust.
b. Government-wide Financial Statements
The government-wide financial statements include a Statement of Net Assets and
a Statement of Activities. 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 to which the direct expenses
of a given function or segment is 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.
When both restricted and unrestricted resources are available for use, it is the
government's policy to use restricted resources first, then unrestricted resources
as they are needed.
Government-wide financial statements do not provide information by fund. They
simply distinguish between governmental and business-type activities. The City's
Statement of Net Assets includes both current and non-current assets and
liabilities.
32
46
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Financial Statement Classification
In the government-wide financial statements, net assets are classified in the
following categories:
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
reduce 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.
Unrestricted Net Assets — This category represents 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 Governmental Accounting Standards Board
(GASB) pronouncements (including all National Council on Governmental
Accounting NCGA Statements and Interpretations currently in effect) as well as
the following pronouncements issued on or before November 30, 1989, to the
governmental activities, business-type activities, and proprietary funds, 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 has elected not to
follow applicable FASB Statements and Interpretations issued after November
30, 1989 for business-type activities and enterprise funds.
33
W City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 the 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 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, use of money and property, intergovernmental
revenues, charges for current services, and other taxes. Expenditures are
recorded in the accounting period in which the related fund liability is incurred.
However, debt service expenditures as well as expenditures related to
compensated absences and claims are recorded only when payment is due.
Governmental Funds Financial Statements
Governmental Funds 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. Accompanying
schedules are presented to reconcile and explain the differences in fund balances
and changes in fund balances as presented in these statements to the net assets
and changes in net assets presented in the government-wide financial statements.
The City presents all major funds that meet those qualifications.
The City's Governmental Fund Balances are comprised of the following
components:
• Nonspendable fund balance typically includes inventories, prepaid items, and
other items that by definition are not in spendable form.
• The restricted fund balance category includes amounts that can be spent only
for the specific purposes stipulated by constitution, external resource
providers, or through enabling legislation.
• The committed fund balance classification includes amounts that can be used
only for the specific purposes determined by a formal action of the City
Council. The City Council has authority to establish, modify, or rescind a fund
balance commitment.
34
City of Huntington Beach
Notes to Financial Statements
a
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
• Amounts in the assigned fund balance classification are intended to be used
by the City for specific purposes but do not meet the criteria to be classified as
restricted or committed. The City Council with a lesser action than an
ordinance, City Manager or designee has the authority to establish, modify, or
rescind a fund balance assignment.
• Unassigned fund balance is the residual classification for the City's General
Fund and includes all spendable amounts not contained in the other
classifications. Unassigned fund balance in other governmental funds is
limited to any negative residual fund balance after fund balance has been
classified as restricted, committed, or assigned.
In the government-wide statements, the City considers restricted funds to be
spent first then unrestricted amounts when expenditures are incurred for purposes
for which both restricted and unrestricted fund balance is available. In the
governmental fund statements, when expenditures are incurred, the City's uses
the most restrictive funds first. The City would use the appropriate funds in the
following order: committed, assigned, and lastly unassigned amounts.
The Agency establishes encumbrances to record the amount of purchase orders,
contracts, and other obligations, which have not yet been fulfilled, cancelled, or
discharged. Encumbrances outstanding at year-end are recorded as part of
restricted or assigned fund balance.
Encumbrances outstanding as of September 30, 2011, by major fund (in
thousands):
General Fund $ 3,074
Grants Special Revenue 1,617
Redevelopment Agency Capital Projects 405
Low-Income Housing Capital Projects 223
Other Go\emmental Funds 4,813
Total Encumbrance All Funds $ 10,132
Economic Uncertainties Reserve
The City Council established an Economic Uncertainty Reserve in the General
Fund with a goal to commit the value of two months of the General Fund
expenditure adopted budget amount. Appropriations from the Economic
Uncertainties Reserve commitments can only be made by formal City Council
action. Generally, appropriations and access to these funds will be reserved for
emergency situations. Examples of such emergencies include, but are not limited
to:
35
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
• An unplanned, major event such as catastrophic disaster requiring
expenditures over 5% of the General Fund adopted budget
• Budgeted revenue taken by another government entity
• Drop in projected/actual revenue of more than 5% of the General Fund
adopted revenue budget
Should the Economic Uncertainties Reserve be used, and its level falls below the
minimum amount of two months of General Fund expenditures adopted budget,
the goal is to replenish the fund within three fiscal years.
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.
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 present
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 Funds Financial Statements
Fiduciary Funds Financial Statements include a Statement of Net Assets and a
Statement of Changes in Net Assets for Trust Funds. The City's fiduciary funds
include 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. The Retirement Trust Fund
accounts for the activities of the supplemental retirement plan for all employees
hired prior to 1997, which accumulates resources for pension benefits to qualified
employees. Contributions made are funded by a percentage of the Retirement
Trust 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.
36
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The City reports the following major funds:
Governmental Funds
General Fund - accounts for activity not required to be accounted for in another
fund.
Grant Special Revenue - accounts for revenues and expenditures of grant
related activity.
Redevelopment Agency Debt Service - accounts for the related debt service
activity for certain projects in the City's Redevelopment project areas.
Redevelopment Agency Capital Projects - accounts for acquisition and
construction of capital assets for certain projects in the City's Redevelopment
project areas.
Low Income Housing Capital Projects - accounts for the activity related to the
development of affordable housing.
Proprietary Funds
Water Fund - used to account for water sales to customers.
Sewer Service Fund - accounts for user fees charged to residents and
businesses for sewer service.
Refuse Fund - used to account for activities related to refuse collection and
disposal.
Hazmat Service Fund — accounts for user fees charged for the City's hazardous
waste material program.
The City's fund structure also includes the following fund types:
Special Revenue Funds are used to account for and report the proceeds of
specific revenue sources that are restricted or committed to expenditure for
specified purposes other than debt service or capital projects.
Debt Service Funds are used to account for the receipts for and payment of
general long-term debt.
Capital Projects Funds are used to account for and report financial resources
that are restricted, committed, or assigned to expenditure for capital outlays,
including the acquisition or construction of capital facilities and other capital
assets.
37
City of Huntington Beach
Notes to Financial Statements
. z For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fiduciary Funds
General Deposit Fund - accounts for the deposit of general monies held by the
City for private individuals and businesses.
Community Facilities Districts Funds - accounts for the debt service activity of
the City's community facilities districts where the City is not obligated in any
manner for the outstanding debt.
Huntington Beach Business Improvement Districts Fund - accounts for the
activities of the City's business improvement districts.
Central Net Operations Authority Fund - accounts for the activity of the Central
Net Operations Authority.
Parking Structures Fund - accounts for the activities of the Bella Terra Parking
Structure and Strand Parking Structure.
West Orange County Water Board - accounts for the West Orange County
Water Board.
Supplemental Retirement Plan and Trust - accounts for the City's supplemental
retirement plan.
Reconciliations of Financial Statements
Reconciliation of the Governmental Funds financial statements to the government-
wide financial statements is provided to explain the differences created by the
integrated approach of GASB Statement No. 34.
38
City of Huntington Beach
Notes to Financial Statements
a For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Cash and Investments
The City records investments at fair value except for guaranteed investment
contracts (GICs), which are reported at cost, because the investments are not
transferable and the fair values are not affected by changes in interest rates. The
City pools cash resources of its various funds to facilitate cash management.
Cash in excess of daily needs 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 month-end cash and investment balances.
The City's cash and cash equivalents are considered to be cash on hand, demand
deposits, and highly liquid investments, such as money market funds, and any
investment with a maturity of 90 days or less at the time of purchase.
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 Treasurer of 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. In addition, these structured notes and
asset-backed securities are subject to interest rate risk as a result of changes in
interest rates. The City's investment policy is further discussed in Note 2 on page
45.
The City pools all non-restricted cash for investment purchases and allocates
interest income to the funds based on month-end cash balances. Funds that have
restricted cash record interest income in the respective fund.
39
City of Huntington Beach
Notes to Financial Statements
$„ For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 and in the proprietary funds financial
statements. Capital assets have an acquisition cost of $50,000 or greater
($100,000 for infrastructure) and a useful life of one year 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 value
at the time received, or in the case of infrastructure assets, at City Council
acceptance date. Capital assets acquired through annexation are recorded at net
book value.
In the government-wide and proprietary funds financial statements, depreciation is
recorded on the straight-line method over the estimated useful life of the assets as
shown below and charged to the respective activity or fund. No depreciation is
recorded in the governmental funds of the fund financial statements.
Buildings 20 to 50 years
Machinery and Equipment 5 to 30 years
Infrastructure 50 Years
Interest is capitalized on proprietary fund assets acquired with taxable and 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, and for tax-exempt debt, offset with interest earned on the invested
proceeds over the same period. There was no capitalized interest for the year
ended September 30, 2011.
40
City of Huntington Beach
(Votes to Financial Statements
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. Inventories
Proprietary fund 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 activities 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 transfers and
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.
h. Long-Term Obligations
In the government-wide and proprietary funds 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. In the governmental fund financial statements, bond
discounts and premiums are recognized as an other financing source or use.
Issuance costs are recorded as a current year debt service expenditure.
i. Employee Compensated Absences
The City records the cost of all accumulated and unused leave time (vacation,
sick, and comp) as a liability when earned in the government-wide and proprietary
funds financial statements. In the governmental funds financial statements these
amounts are recorded as expenditures when due and payable.
41
u q• City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 Balances of Governmental Funds to the Statement of Activities and the
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of
Net Assets.
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, 4th Monday in September - Levy Fiscal Year
• Due Date, First Installment - November 1
• Due Date, Second Installment - February 1
• 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
42
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
k. Cash Flow Statements
For purposes of the Statement of Cash Flows, the Proprietary Funds consider all
cash and investments to be cash equivalents, as these funds participate in the
citywide cash and investment pool. Restricted Cash and Investments are also
included resource. They are either deposits or investments with original maturities
of less than 90 days.
I. Estimates
The accompanying financial statements require management to make estimates
and assumptions that effect certain reported amounts and disclosures. Actual
results could differ from those estimates.
m. Implementation of New Accounting Pronouncements
During the year, the City implemented Governmental Accounting Standards Board
(GASB) Statement No. 59, Financial Instruments Omnibus. This Statement
updates and improves existing standards regarding financial reporting of certain
financial instruments and external investment pools. . Implementation of this
Statement had no material effect on amounts reported in the City's financial
statements for the fiscal year ended September 30, 2011.
The City is currently analyzing its accounting practices to determine the potential
impact on the financial statements for the following GASB Statements:
In November 2010, GASB issued Statement No. 60, Accounting and Financial
Reporting for Service Concession Arrangements. The objective of this Statement
is to improve financial reporting by addressing issues related to service
concession arrangements ("SCAs"), which are a type of public-private or public-
public partnership. This Statement requires disclosures about an SCA including a
general description of the arrangement and information about the associated
assets, liabilities, and deferred inflows, the rights granted and retained, and
guarantees and commitments. Application of this Statement is effective for the
City's fiscal year ending September 30, 2013.
In November 2010, GASB issued Statement No.61, The Financial Reporting
Entity. Omnibus — an amendment of GASB Statement No. 14 and No. 34. The
Statement modifies certain requirements for inclusion of component units in the
financial reporting entity. The requirements of this Statement result in financial
reporting entity financial statements being more relevant by improving guidance
for including, presenting and disclosing information about component units and
equity interest transactions of a financial reporting entity. Application of this
Statement is effective for the City's fiscal year ending September 30, 2013.
43
,F. City of Huntington Beach
Notes to Financial Statements
. 3 For the Year Ended September 30, 2011
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In December 2010, GASB issued Statement No. 62, Codification of Accounting
and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB
and AICPA Pronouncements. The objective of this Statement is to incorporate into
the GASB's authoritative literature certain accounting and financial reporting
guidance that is included in the following pronouncements issued on or before
November 30, 1989, which does not conflict with or contradict GASB
pronouncements:
1. Financial Accounting Standards Board ("FASB") Statements and Interpretations
2. Accounting Principles Board Opinions
3. Accounting Research Bulletins of the American Institute of Certified Public
Accountants' ("AICPA") Committee on Accounting Procedure
Hereinafter, these pronouncements collectively are referred to as the "FASB and
AICPA pronouncements." This Statement will improve financial reporting by
contributing to the GASB's efforts to codify all sources of generally accepted
accounting principles for state and local governments so that they derive from a
single source. Application of this Statement is effective for the City's fiscal year
ending September 30, 2013.
In June 2011, GASB issued Statement No. 63, Financial Reporting of Deferred
Outflows of Resources, Deferred Inflows of Resources, and Net Position. This
Statement provides financial reporting guidance for deferred outflows of resources
and deferred inflows of resources. This Statement also amends the net asset
reporting requirements in Statement No. 34, Basic Financial Statements—and
Management's Discussion and Analysis—for State and Local Governments, and
other pronouncements by incorporating deferred outflows of resources and
deferred inflows of resources into the definitions of the required components of the
residual measure and by renaming that measure as net position, rather than net
assets. The requirements of this Statement are effective for the City's fiscal year
ending September 30, 2013.
In June 2011, GASB issued Statement No. 64, Derivative Instruments:Application
of Hedge Accounting Termination Provisions. This Statement sets forth criteria to
establish when the effective hedging relationship continues and hedge accounting
should continue to be applied. The requirements of this Statement enhance
comparability and improve financial reporting by clarifying the circumstances in
which hedge accounting should continue when a swap counterparty, or a swap
counterparty's credit support provider, is replaced. The requirements of this
Statement are effective for the City's fiscal year ending September 30, 2012.
44
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
2. CASH AND INVESTMENTS
Investments Authorized by the California Government Code and the City's
Investment Policy
The table below identifies the investment types that are authorized for the City by the
California Government Code (or the City's investment policy, where more restrictive).
The table also identifies certain provisions of the California Government Code 53601
(or the City's investment policy, where more restrictive) that address interest rate risk
and concentration of credit risk.
Ma)amum Maximum
Ma)omum Percentage Investment
Authorized Investment Type* Maturity of Portfolio in One Issuer
United States(U.S.)Treasury Obligations 5 years No Limit No Limit
U.S. Government Sponsored
Enterprise Securities 5 years No Limit No Limit
Banker's Acceptances 180 days 25%/40%**(c) 10%
Time Certificate of Deposits 3 years (a) 50% (d) 10%
Negotiable Certificates of Deposit 3/5 years*** 30% 10%
Repurchase Agreements 3 months(b) 20% 10%
Reverse-Repurchase Agreements***** 92 days 20% 10%
Local Agency Investment Fund (LAIF) N/A No Limit $60 million total
between City&RDA
Commercial Paper 270 days 25%(e) 10%
Municipal Bonds from Any State 5 years 50%(d) 10%
Money Market Funds**** 60 Day Wgt Avg 15%(f) 10%
Medium Term Notes 5 years 20%/30%****(g) 10%
Notes: Carrfornia Government Code:
*The following investment types are authorized for the City bythe California Government Code; (a)5 years
however,theyare not considered permissable investments bythe Citys Investment Policy. (b)1 year
mortgage pass-through securities,CD placement service,and collateralized bank deposits. (c)40%
**-40%only with City Council approval (d)N/A
*** -5 years only with City Council approval (a)25%
30%with City Council approval (f)20%
*****-Onlywith City Council approval (g)30%
N/A-Not Applicable (h)$50,000,000 per Entity
45
«gin
City of Huntington Beach
Notes to Financial Statements
wY.3;a, For the Year Ended September 30, 2011
2. CASH AND INVESTMENTS (Continued)
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the
debt agreements, rather than the general provisions of the California Government
Code or the City's investment policy. The table below identifies the investment types
that are authorized for investments held by a bond trustee, but bond indentures do
allow for other forms of investments if approved in writing by the bond insurer that are
not identified below. The table also identifies certain provisions of these debt
agreements that address interest rate risk and concentration of credit risk.
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio in One Issuer
United States (U.S.)Treasury Obligations Life of Bond No Limit No Limit
U.S. Government Sponsored
Agency Securities Life of Bond No Limit No Limit
Banker's Acceptances 180 days No Limit No Limit
Time Certificate of Deposits 360 days No Limit No Limit
Negotiable Certificates of Deposit 360 days No Limit No Limit
LAIF N/A No Limit No Limit
Commercial Paper 270 days No Limit No Limit
Municipal Bonds from Any State Life of Bond No Limit No Limit
Money Market Funds N/A No Limit No Limit
Investment Agreements Life of bond No Limit No Limit
Forward Purchase/Delivery Agreements Life of bond No Limit No Limit
N/A-Not Applicable
46
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
2. CASH AND INVESTMENTS (Continued)
Investment of the Supplemental Pension Retirement Trust
The Investment Policy Statement (IPS) of the Huntington Beach Supplemental
Pension Trust is established in accordance with the assignment of fiduciary duties by
the State of California Constitution and State and Local Government Codes. The
purpose of the Investment Policy is to set guidelines for a prudent investment-making
process. The policy was established with the assumption that the longer-term nature
of the portfolio provides for higher risk tolerance and short-term volatility, but more
potential for capital growth. The Investment Manager will be responsible for carrying
out the activities related to the portfolio in accordance with the IPS to meet the goals
of an agreed- upon risk/return profile, and in accordance with the mix of parameters
outlined below:
Maximum
Maturity/ Strategic
Authorized Investment Type Credit Quality Allocation
Fixed Income 30%
Money Market& Cash Equivalents 13 months/A-1 1%
P-1/AAA
Investment Grade BBB or higher 16%
High Yield N/A 3%
Inflation Protected Securities N/A 2%
Foreign Sovereign N/A 8%
Equity N/A 59%
Real Estate N/A 7%
Commodities N/A 4%
N/A- Not Applicable
47
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
4
2. CASH AND INVESTMENTS (Continued)
At year-end the City had the following deposits and investments (amounts in
thousands):
Statement of Net Assets:
Cash and Investments $ 108,094
Restricted Assets (Cash and Cash
Equivalents) 53,225
Cash and Investments with Fiscal Agent-Restricted 6,846
Total Per Statement of Net Assets 168,165
Fiduciary Funds:
Cash and Investments 3,431
Cash and Investments with Fiscal Agent-Restricted 31,784
Total Fiduciary Funds 35,215
Total Deposits and Investments $ 203,380
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.
Investments maturities are as follows (in thousands):
Investment Maturities(in Years)
INVESTMENTS: Fair Value Less than 1 1 to 3 7 3 to 5 I more than 5 Total
US Agencies $ 84,231 $ - $ 42,091 $ 42,140 $ - $ 84,231
Guaranteed Investment Contracts 1,649 - - - 1,649 1,649
Mutual Funds 26,859 26,859 - - 26,859
Money Market Funds 3,355 3,355 - - 3,355
Medium Term Notes 24,313 15,202 7,663 1,449 24,314
Local Agency Investment Fund 54,347 54,347 - - - 54,347
Total Investments $ 194,754 $ 99,763 $ 49,754 $ 43,589 $ 1,649 194,755
Total Deposits 8,625
Total Deposits and Investments $ 203,380
48
w , City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
2. CASH AND INVESTMENTS (Continued)
Credit Risk - State law allows investment in United States Government Sponsored
Enterprise (GSE) obligations noted above as U.S. Agencies. As of year-end, the
Standard and Poor's and Moody's ratings of the GSE's were AA and AAA,
respectively. Investments in Guaranteed Investment Contracts (GIC) are backed by
collateral of either 104% or 107% depending on the type of collateral and GIC
provider. The GIC provider is rated by Standard and Poor's and Moody's at A+ and
A2. State law limits investments in commercial paper and medium term notes to have
at least an A-1 or P-1 or an "A" rating, respectively, and 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 year-end, the City had no commercial paper holdings.
The City's investment policy for operating funds limits investments in Money Market
Funds to 15% of the portfolio. Both Standard and Poor's and Moody's have rated the
Money Market Funds in our operating funds and in our bond investment portfolio as
AAA. Standard and Poor's rated the City's investments in medium-term notes as AAA
and AA while Moody's rated them as Aaa and Aa.
Concentration of Credit Risk — The City's investment policy limits investments in any
one issuer, except for U.S. Treasury Securities, U.S. Government Agencies, and
Local Agency Investment Fund to no more than 10% of the investments. In addition,
no more than 50% can be invested in a single security type or with a single financial
institution and every security type has a specific limit. This is in addition to the limits
placed on investments by State law. Investments in any one issuer (other than U.S.
Treasury Securities, external investment pools, or mutual funds) that represent 5% or
more of total City's investments are as follows:
Fair Value
Issuer Investment Type Amount
Federal Home Loan Mortgage Corporation U.S. Government Sponsored
Enterprise Securities $20,000,000
Federal Home Loan Bank U.S. Government Sponsored
Enterprise Securities $13,999,000
Federal National Mortgage Association U.S. Government Sponsored
Enterprise Securities $46,996,000
General Electric Capital Corp Medium Term Notes $9,620,000
Custodial Credit Risk — For an investment, custodial credit risk is the risk that, in the
event of the failure of the counterparty, the City will not be able to recover the value of
its investments or collateral securities that are in the possession of an outside party.
None of the City's investments were subject to custodial credit risk.
49
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
2. CASH AND INVESTMENTS (Continued)
Local Agency Investment Fund — The City is a voluntary participant in the Local
Agency Investment Fund (LAIF) that is regulated by California Government Code
Section 16429 under the oversight of the Treasurer of the State of California. The fair
value of the City's investment in this pool is reported in the accompanying financial
statements at amounts based upon the City's pro-rata share of the fair value provided
by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio).
The balance available for withdrawal is based on the accounting records maintained
by LAIF, which are recorded on an amortized cost basis. LAIF had invested 4.43% of
the pooled investments funds in Structured Notes and Asset-Backed Securities. This
external investment pool is not rated.
Guaranteed Investment Contracts (GIC) — The City records GICs at cost versus fair
value due to the lack of readily available market pricing for these types of
instruments. GICs held by the City are either collateralized with government
securities that under the GIC agreement are required to have a higher market value
than cost or fully guaranteed by a government entity and no losses are expected.
As of September 30, 2011, the City held $85,994,000 in callable securities, which
amounted to approximately 44% of investments.
3. OTHER RECEIVABLES
a. Developer Loans
Loans made to developers to construct or rehabilitate certain facilities under
deferred loan agreements total $36,376,000 at year-end. These loans are
deferred until a future event occurs. Loans made by the Agency total $25,258,000
and loans made under the Home Program total $11,118,000. Interest rates on
these loans range from 0% to 6.5%. The allowance for uncollectible developer
loans is $36,376,000 due to the terms of the agreement to forgive the balance of
loans after a specified time period if all the conditions of loan forgiveness are met.
b. Emerald Cove Loan
On June 15, 2010, the Agency loaned Emerald Cove, LP $8,000,000 to acquire
and rehabilitate Emerald Cove Senior Apartments. The loan has an interest rate
of 3% and is to be repaid annually from residual receipts over 60 years. The loan
balance as of September 30, 2011 is $8,252,000.
50
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
3. OTHER RECEIVABLES (Continued)
c. Housing Rehabilitation Loans
Loans made to qualified homeowners and landlords in the City of Huntington
Beach to rehabilitate certain single-family homes or multifamily rental housing
under deferred loan agreements total $3,500,000 at year-end. These loans are
deferred until a future event occurs. The interest rates on these loans range from
0% to 6%.
d. Deferred Loans — First Time Homebuyers
Loans made for down payment assistance of qualified first time homebuyers
under deferred loan agreements total $1,967,000 at year-end. These loans are
deferred until a future event occurs.
e. Other Receivables
A summary of Other Receivables as of September 30, 2011 is as follows (in
thousands):
Descri pton Amount
Developer Loans Receivable $ 36,376
Emerald Cove Loan Receivable 8,252
Housing Rehabilitation Loans Receivable 3,500
Emergency Medical Fee Receivable 1,395
Franchise Fee Receivable 1,941
HOME Program Grant Receivable 1,217
OCTA Grant Receivable 900
First Time Homebuyers Receivable 1,967
Other Receivables 4,399
Total Other Receivables 59,947
Allowance for Uncollectible Developer Loans (36,376)
Net Other Receivables $ 23,571
4. DEFERRED COMPENSATION
Permanent City employees may defer a portion of their salary under tax-deferred
plans as permitted under the Internal Revenue Code. These plans permit 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.
51
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
4. DEFERRED COMPENSATION (Continued)
The City has established a trust for the assets of the plans 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 not reported as assets of the City. The City does not have
fiduciary responsibility for these assets.
5. DEFERRED REVENUE
Certain revenues in governmental funds are deferred until received. The property
and sales 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 to the extent they are not collected within 60 days after year-end. The
other amounts are unearned revenue in both the funds and government-wide
financial statements. The amounts are as follows (in thousands):
Redevelopment Low-Income Total Major
Grants Special Agency Debt Housing Capital Governmental
General Fund Revenue Service Projects Funds
Property Taxes $ 10,965 $ - $ 3,169 $ - $ 14,134
Sales Tax 3,960 - - - 3,960
Grants - 787 - - 787
Deferred Loans:
Emerald Cove - - - 8,252 8,252
Housing Rehabilitation - 3,500 - - 3,500
First Time Homebuyers - - - 1,967 1,967
Other Deferred Revenue 594 - - - 594
Tota 1 $ 15,519 $ 4,287 $ 3,169 $ 10,219 $ 33,194
Total Major Other
Governmental Governmental Total Deferred
Funds Funds Revenue
Property Taxes $ 14,134 $ - $ 14,134
Sales Tax 3,960 - 3,960
Grants 787 682 1,469
Deferred Loans:
Emerald Cove 8,252 - 8,252
Housing Rehabilitation 3,500 - 3,500
First Time Homebuyers 1,967 - 1,967
Other Deferred Revenue 594 319 913
Total $ 33,194 $ 1,001 $ 34,195
Deferred Loans to developers and qualified individuals for housing rehabilitation and
to first time homebuyers are discussed in Note 3.
52
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
6. RETIREMENT PLAN — NORMAL
a. Plan Description
The City contributes to the California Public Employees' Retirement System
(CalPERS), an agent, which is a 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 or on their website: www.calpers.ca.gov.
b. Employer and Employee Contribution Obligations
The City makes two types of contributions for covered employees. The first
contribution represents the amount the City is required to make (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 ended
September 30, 2011 are:
10/1/2010 a 7/1/2011
6/30/2011 9/30/2011
Local Miscellaneous 10.222% 15.311%
Local Safety 29.203% 34.196%
The member rates are as follows:
Rate
Local Miscellaneous 8.000%
Local Safety 9.000%
53
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
6. RETIREMENT PLAN — NORMAL (Continued)
c. Annual Pension Cost
The City's annual pension cost of $23,363,000 was equal to the City's required
and actual contributions. The required contribution was determined as part of the
June 30, 2009 and 2010 actuarial valuation using the entry age normal actuarial
cost method. The actuarial assumptions used to determine the required
contribution for fiscal year ended September 30, 2011 were:
• Maximum amortization remaining period — 30 years as of the Valuation Date —
closed end
• Asset valuation method - 15 years smoothed market
• Investment Rate of Return - 7.75%
• Projected salary increases - 3.55% to 13.15% (safety) and 3.55% to 14.45%
(miscellaneous) depending on age, service, and type of employment
• Inflation - 3.00%
• Payroll growth - 3.25%
• Individual salary growth - A merit scale varying by duration of employment
coupled with an assumed annual inflation component of 3.0% and an annual
production growth of 0.25%.
CalPERS conducted an actuarial valuation using the entry-age actuarial cost
method using a level percent of payroll to determine the City's funded status as of
June 30, 2010. Significant assumptions are the same as the June 30, 2009
valuation.
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 30 year period with
the exception of special gains and losses in fiscal years 2008-2009, 2009-2010
and 2010-2011. Each of these years special gains or losses will be isolated and
amortized over fixed and declining 30 year periods (as opposed to the current
rolling 30 year amortization). 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.
54
.F City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
6. RETIREMENT PLAN — NORMAL (Continued)
d. Trend Information
Local Miscellaneous Local Safety
Annual Pension Annual Pension
Cost(in Percentage of Net Pension Cost(in Percentage of Net Pension
Fiscal Year thousands) APC Funded Obligation thousands) APC Funded Obligation
9/30/2009 $ 4,765 100% $ $ 10,763 100% $
9/30/2010 $ 5,380 100% $ $ 11,826 100%. $ -
9/30/2011 $ 8,163 100% $ $ 15,200 1 100% $ -
e. Funded Status and Funding Progress
Below is the funding progress based on the June 30, 2010 actuarial valuation for
the miscellaneous and safety plans (in thousands):
Entry Age
Normal UL as a
Actuarial Percentage
Accrued Actuarial Value Unfunded Funded Covered of Covered
Plan Liability(AAL) of Assets Liability(UL) Ratio Payroll Payroll
Safety $ 500,725 $ 384,956 $ (115,769)1 76.9% $ 41,015 -282.3%
Miscellaneous 382,6711 334,778 (47,893)1 87.5%1 47,596 -100.6%
Total $ 883,3961 $ 719,734 $ (163,662)1 81.5%1 $ 88,611 -184.7%
The schedule of funding progress presented as Required Supplementary
Information (RSI) following the notes to the basic financial statements, presents
multiyear trend information about whether the actuarial value of plan assets is
increasing or decreasing over time relative to the actuarial accrued liability for
benefits.
55
;.; City of Huntington Beach
Notes to Financial Statements
g For the Year Ended September 30, 2011
7. RETIREMENT PLAN — SUPPLEMENTAL
a. Plan Description
The City provides a supplemental retirement plan for all employees hired prior to
1997 (exact dates are different for various associations). It is a single-employer
defined benefit plan. It is a defined benefit plan and will pay the retiree an additional
amount to his or her CaIPERS amount for life. The City contracts with employee
bargaining associations, which establish the plan. These associations must agree to
any changes to the plan. The amount will cease upon the employee's death. The
amount that 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 1,001 active
employees reported on the September 30, 2011 data, only 336 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. Prior to fiscal year
2008-09, the City had prefunded these benefits and recorded the amounts in a
fiduciary fund. In fiscal year 2008-09, the City established the Supplemental
Employee Retirement Plan and Trust, and transferred $24,918,000 to an irrevocable
trust from the prefunded amounts. The plan and trust are still reported as a fiduciary
fund pension trust.
Below is the plan participant data as of September 30, 2011:
Retirees and beneficiaries receiving benefits 649
Active Plan Members 336
Total Plan Participants 985
Effective in 1998 (exact dates are different for various associations), new City
employees are ineligible to participate in the Supplemental Employee Retirement
Plan.
b. Employer Obligations and Funding Status and Progress
The City annually transfers amounts from the various City funds to the pension
trust fund. The City is required to contribute the actuarially determined rate of
4.38% of total payroll for all permanent employees for the year ended September
30, 2011. Administrative costs of this plan are financed through investment
earnings.
56
City of Huntington Beach
(Votes to Financial Statements
For the Year Ended September 30, 2011
7. 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 fiscal year
2010/11 were (in thousands):
Annual required contribution $ 3,957
Interest on net pension obligation 229
Adjustment to annual required contribution (374)
Annual pension cost 3,812
Contributions made (3,957)
Decrease in net pension obligation (145)
Net Pension Obligation— Beginning of Year 4,176
Net Pension Obligation — End of Year $ 4,031
The annual required contribution was determined as part of an independent
actuarial valuation as of September 30, 2010 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% to
15.0% per annum depending on years of service
• Projected salary increases due to merit - 0%
• Inflation rate - 3.0%
• Postemployment 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):
Annual Pension Percentage Net Pension
Cost of APC Obligation
Fiscal Year Funded
9/30/09 $3,348 104% $4,312
9/30/10 $3,831 104% $4,176
9/30/11 $3,812 104% $4,031
57
= City of Huntington Beach
Dotes to Financial Statements
For the Year Ended September 30, 2011
7. RETIREMENT PLAN — SUPPLEMENTAL (Continued)
e. Funded Status and Funding Progress
Below is the funding progress based on the September 30, 2011 actuarial
valuation update (dollar amounts in thousands):
Entry Age
Normal Actuarial UAAL as a %
Accrued Value of Unfunded AAL Covered of Covered
Liability Assets (UAAL) Funded Ratio Payroll Payroll
$ 62,926 $ 32,146 $ (30,780) 51.1% $ 34,098 -90.3%
The September 30, 2011 actuarial valuation for funding progress uses the same
assumptions as the September 30, 2010 actuarial valuation to determine the
annual pension costs and net pension obligation as listed in note 7c. The
schedule of funding progress presented as Required Supplementary Information
following the notes to the basic financial statements, presents multiyear trend
information about whether the actuarial value of plan assets is increasing or
decreasing over time relative to the actuarial accrued liability for benefits.
f. Accounting for Plan
Since the City is required to adopt GASB Statement 27 for the supplemental
pension plan, the difference between the ARC and the amount of pension cost
funded for the years must be recorded as a liability in the government-wide
financial statements. The amount of this liability is $4,031,000 (see Note 11).
Contributions are recognized when due and payable. Benefits are recognized
when due and payable under plan provisions.
8. POSTEMPLOYMENT MEDICAL INSURANCE
a. Plan Description
The City agreed, via contract, with each employee association to provide
postempioyment medical insurance to retirees. These Other Postemployment
Benefits (OPEB) are based on years of service and are available to all retirees
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 of ten years of service
credit or is granted a service connected disability retirement.
• Following official separation from the City, CaIPERS grants a retirement
allowance.
58
City of Huntington Beach
Notes to Financial Statements
411 For the Year Ended September 30, 2011
8. POSTEMPLOYMENT MEDICAL INSURANCE (Continued)
The City's obligation to provide the benefits to a retiree ceases when either of the
following occurs:
• 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
The maximum subsidy a retiree is entitled to is $344 per month after 25 years of
service. 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 medical insurance plans
that the City's active employees may enroll.
b. Accounting and Funding
The City utilizes the California Employers' Retiree Benefit Trust (CERBT), an
agent multiple-employer plan, for the postemployment medical insurance benefit.
Benefits paid from the CERBT were $958,000. The assets of the CERBT are
excluded from the accompanying financial statements since they are in an
irrevocable trust administered by CaIPERS. Copies of CalPERS annual financial
report may be obtained from their executive office: 400 P Street, Sacramento, CA,
95814 or on their website: www.calpers.ca.gov. The City's policy is to make
100% of each year's ARC. Actuarial assumptions for the June 30, 2011 valuation
were:
• Entry age normal — 30 year amortization of unfunded liabilities
• Discount rate — 6.36%
• All other retirement assumptions equivalent to CalPERS assumptions used for
the City's normal retirement plan
• The medical trend rate represents the long-term expected growth of medical
benefits paid by the plan, due to non-age-related factors such as general
medical inflation, utilization, new technology, and the like. The following table
sets forth the trend assumption used for the valuation:
Year Annual Rate Year Annual Rate
2011/12 10.5% 2017/18 7.5%
2012/13 10.0% 2018/19 7.0%
2013/14 9.5% 2019120 6.5%
2014/15 9.0% 2020/21 6.0%
2015/16 8.5% 2021/22 5.5%
2016/17 8.0% 2022/23+ 5.0%
59
.: City of Huntington Beach
(Votes to Financial Statements
n , For the Year Ended September 30, 2011
8. POSTEMPLOYMENT MEDICAL INSURANCE (Continued)
The City's actual contributions, annually required contribution (ARC), Net OPEB
asset NOA, and Annual OPEB Cost (AOC) were computed as follows (in
thousands):
Employer Contribution
Direct Contributions - City health plan contributions $ 1,052
Implicit subsidy 507
Total Employer Contributions $ 1,559
Development of Annual OPEB Cost(AOC)
Amortization of Actuarially Accrued Liability $ 714
Normal Cost 845
Total Annual Required Contribution (ARC) 1,559
Interest on Net OPEB Assets (NOA) (671)
Adjustment to the Annual Required Contribution (ARC) 540
Total Annual OPEB Cost (AOC) $ 1 ,428
Development of Net OPEB Asset(NOA)
Net OPEB Asset(NOA), beginning of year $ (8,661)
Annual OPEB Cost(AOC) 1,428
Employer Contribution (1,559)
Net OPEB Asset(NOA), end of year $ (8,792)
The City's actual contributions of $1,559,000 are equal to the annual required
contribution. The Annual OPEB Cost is reported as expenses in the non-
departmental governmental activities program.
c. Other Disclosures
Three-year trend information is disclosed below in thousands
Annual OPEB Actual Percentage of
Fiscal Year Cost(AOC) Contribution AOC Contributed Net OPEB (Asset)
9/30/2009 $1,564 $1,715 109.70% $8,378
9/30/2010 $1,320 $1,603 121.40% $8,661
9/30/2011 $1,428 $1,559 109.20% $8,792
60
db
a
City of Huntington Beach
` Notes to Financial Statements
For the Year Ended September 30, 2011
8. POSTEMPLOYMENT MEDICAL INSURANCE (Continued)
d. Funding Status and Funding Progress
As of June 30, 2011, the most recent actuarial valuation date, the plan was 42.9%
funded. The actuarial accrued liability for benefits was $22.5 million, and the
actuarial value of assets was $9.6 million, resulting in an unfunded accrued
liability (UAAL) of $12.8 million. The covered payroll (annual payroll of active
employees covered by the plan) was $82.4 million, and the ratio of the UAAL to
the covered payroll was 15.5%.
The annual required contribution was determined as part of an independent
actuarial valuation as of September 30, 2010 using same assumptions in the June
30, 2011 valuation in Note 8b except for the following:
S Discount rate — 7.75%
Actuarial valuations of an ongoing plan involve estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into
the future. Examples include assumptions about future employment, mortality,
and the healthcare cost trend. Amounts determined regarding the funded status
of the plan and the annual required contributions of the City are subject to
continual revision as actual results are compared with past expectations and new
estimates are made about the future. The schedule of funding progress,
presented as Required Supplementary Information following the notes to the
financial statements, presents multiyear trend information about whether the
actuarial value of plan assets is increasing or decreasing over time relative to the
actuarial accrued liability for benefits.
Projections of benefits for financial reporting purposes are based on the
substantive plan (the plan as understood by the City and plan members) and
include the types of benefits provided at the time of each valuation. The actuarial
methods and assumptions used include techniques that are designed to reduce
the effects of short-term volatility in actuarial accrued liabilities and the actuarial
value of assets, consistent with the long-term perspective of the calculations.
61
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
9. RISC 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, and natural
disasters. 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 that is due and payable at year-end 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 shares payments for claims between $1,000,000 and $2,000,000. It also
provides general liability insurance of $25,000,000 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 a claims payment pool for certain liability claims in
excess of $1,000,000 million to a limit of $27,000,000. 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. Payments for claims beyond what is covered by BICEP, from
$27,000,000 to $37,000,000, are paid by excess insurance coverage. There were no
liability claims in the last three years that exceeded the coverage limit.
Workers' Compensation Claims
Workers' compensation claims of up to $1,000,000 per claim are paid from the
General Fund. The BICEP is a member of CSAC-Excess Insurance Authority for
excess workers' compensation coverage. Payments for claims from $1,000,000 to
statutory limits are covered by CSAC-Excess Insurance Authority.
62
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
9. RISK MANAGEMENT (Continued)
Claims activity and liabilities relating to the current and prior year are (in thousands):
Workers' Liability
Compensation Insurance Total
Balance September 30, 2009 $ 7,281 $ 5,219 $ 12,500
Additions 5,590 664 6,254
Reductions (4,086) (741) (4,827)
Net Increase (Decrease) 1,504 (77) 1,427
Balance September 30, 2010 8,785 5,142 13,927
Additions 2,979 5,968 8,947
Reductions (4,749) (990) (5,739)
Net Increase (Decrease) (1,770) 4,978 3,208
Balance September 30, 2011 $ 7,015 $ 10,120 $ 17,135
63
r; City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
10.INTERFUND TRANSACTIONS
a. Due To/From Other Funds
The amounts at year-end were (in thousands):
Due to(Payable):
Redevelopment Other
Grant Special Agency Debt Governmental Total Due from
Revenue Service Fund (Receivable):
Due from(Receivable):
Major Governmental Funds
Rede\elopment Agency Capital Projects $ - $ 1,097 $ - $ 1,097
Other Governmental Funds
Traffic Congestion Relief 513 - 373 886
Total Due to(Payable): . $ 513 $ 1,097 $ 373 $ 1,983
These outstanding balances result mainly from year-end accruals for payments for
goods and services.
b. Advances to/from Other Funds
The amounts at year-end were (in thousands):
Advances to(Payable):
Redevelopment Redevelopment Other Total Advances
Agency Capital Agency Debt Governmental from
Projects Service Funds (Receivable):
Advances from(Receivable):
Major Governmental Funds
General Fund $ - $ - $ 341 $ 341
Low-Income Housing Capital Projects 1,363 3,928 - 5,291
Total Advances to(Payable): $ 1,363 $ 3,928 $ 341 $ 5,632
There is a $1,363,000 advance from the Low-Income Housing Fund to the
Redevelopment Agency Capital Projects Fund for Main Pier property acquisitions.
The amount will be repaid by fiscal year ending September 30, 2014.
There is a $3,928,000 advance from the Low-Income Housing fund to the
Redevelopment Agency Debt Service Fund for Supplemental Education Revenue
Augmentation Fund (SERAF) contributions.
There is a $341,000 advance from the General Fund to the Park Acquisition and
Development Fund (a non-major governmental fund) for closed school site
purchases. The amount will be repaid by fiscal year ending September 30, 2012.
64
.,. City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
10. INTERFUND TRANSACTIONS (Continued)
c. Transfers In/Out
The amounts at year-end were (in thousands):
Transfers Out
Total Major
Grant Special RDA Debt RDA Capital Low Income Governmental
Transfers In General Fund Revenue Service Fund Pro ct jes Fund Housing Fund Funds
General Fund $ $ - $ 6,046 $ 6,239 $ $ 12,285
RDA Capital Projects Fund 180 1,100 - 1,280
Low Income Housing Fund - 3,605 3,605
Other Gmernmental Funds 8,627 - 397 9,024
Total Governmental Funds 8,627 180 10,751 6,239 397 26,194
Refuse Enterprise Fund 51 - - - - 51
Total Transfers Out $ 8,678 $ 180 $ 10,751 $ 6,239 $ 397 $ 26,245
Transfer Out
Hazmat
Total Major Other Total Service
Governmental Governmental Governmental Enterprise Total
Transfers In Funds Funds Funds Fund Transfers In
General Fund $ 12,285 $ 901 $ 13,186 $ 13 $ 13,199
RDA Capital Projects Fund 1,280 - 1,280 - 1,280
Low Income Housing Fund 3,605 - 3,605 3,605
Other Governmental Funds 9,024 277 9,301 - 9,301
Total Governmental Funds 26,194 1,178 27,372 13 27,385
Refuse Enterprise Fund 51 - 51 - 51
Total Transfers Out $ 26,245 $ 1,178 $ 27,423 $ 13 $ 27,436
The following is a summary of the significant transfers:
a $8,627,000 was transferred from the General Fund to Other Governmental
Funds primarily for debt service payments
a $6,046,000 was transferred from the Redevelopment Agency (RDA) Debt
Service Fund to the General Fund to repay the General Fund Loan to the
Redevelopment Agency
Y $1,100,000 was transferred from RDA Debt Service Fund to RDA Capital
Projects Fund for the termination of a leasehold interest.
a $3,605,000 was transferred from the RDA Debt Service Fund to the Low
Income Housing Fund to comply with the twenty percent set-aside to Low
Income Housing
® $6,239,000 was transferred from the RDA Capital Projects Fund to the
General Fund which includes the transfer of Land Held for Resale of
$5,978,000.
® $901,000 was transferred from Other Governmental Funds to the General
Fund primarily for General Fund expenditures of Gas Tax Fund related
projects.
65
City of Huntington Beach
(Votes to Financial Statements
r}£ Y For the Year Ended September 30, 2011
11. LONG-TERN( OBLIGATIONS
Below is a schedule of changes in long-term governmental obligations for the year
(in thousands):
October 1, September Accrued Due Within One
Governmental Activities: 2010 Additions Retirements 30,2011 Interest Year
Judgment Obligation Bonds $ 5,989 $ $ (810) $ 5,179 $ 125 $ 840
Public Financing Authority:
2001-a Lease Revenue Bonds 25,650 (25,650) - - -
2001-b Lease Revenue Bonds 15,915 (15,915) - - -
2010-a Lease Revenue Bonds 13,820 (620) 13,200 50 635
2011-a Lease Revenue Bonds - 36,275 - 36,275 107 2,120
Total Public Financing Authority 55,385 36,275 (42,185) 49,475 157 2,755
Redevelopment Agency:
1999 Tax Allocation
Refunding Bonds 6,610 - (430) 6,180 50 450
2002 Tax Allocation
Refunding Bonds 14,470 (945) 13,525 107 995
Mayer DDA 6,153 (350) 5,803 - -
Bella Terra OPA(Parking) 14,076 (154) 13,922 -
CIM DDA(Parking&Infrastructure) 7,444 - (156) 7,288 168
CIM DDA(Additional Parking) 440 (5) 435 - 6
Section 108 Loan RDA/Bowen Court 4,165 142 (310) 3,997 14 972
Pollution Remediation 200 - - 200 - 200
Total Redevelopment Agency 53,558 142 (2,350) 51,350 171 2,791
Other Long-Term Obligations:
Leases Payable 857 - (285) 572 - 282
Compensated Absences 10,277 3,712 (2,858) 11,131 3,336
Net Pension Obligation 4,176 3,812 (3,957) 4,031 -
Clairrs Payable 13,927 8,947 (5,739) 17,135 6,992
Pollution Remediation 2,000 - 2,000 -
PARS Payable 7,149 (1,281) 5,868 - 1,351
Section 108 Loan City 1,560 (135) 1,425 6 140
Total Other Long-Term Obligations 39,946 16,471 (14,255) 42,162 6 12,101
Total Long-Term Obligations-
Governmental Activities $ 154,878 $ 52,888 $ (59,600) $ 148,166 $ 459 $ 18,487
66
City of Huntington Beach
Notes to Financial Statements
E�
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
Below are reconciliations from amounts in the above table to amounts in the
accompanying governmental fund financial statements (in thousands):
Issuance of Long-Term Debt in Governmental Fund Financial Statements $ 36,275
Decrease in Net Pension Obligation (145)
Increase in Compensated Absences 854
Increase in Claims Payable 3,208
Increase in Section 108 Loan/Bowen Court 142
Increases in Above Schedule 40,334
Increase in Current Portion of Claims Payable reported in the Governmental
Fund Financial Statement (1,313)
Changes in Long-term Obligations reported in the Reconciliation to the
Government-wide Financial Statements $ 39,021
Principal Paid in Governmental Fund Financial Statements $ 9,446
Refunding of 2001 Series A and B Lease Revenue Bonds 37,601
Decreases in Above Schedule $ 47,047
a. Judgment Obligation Bonds
Year of Issuance 2004
Type of Debt Judgment Obligation Bonds
Original Principal Amount $12,500,000
Security Council Appropriations
Interest Rates 2.00% to 4.20%
Interest Payment Dates February 1 st and August 1 st
Principal Payment Dates February 1st
Purpose of Debt Pay claims on court judgment
Debt service requirements to maturity are (in thousands):
Year Ending Principal Interest Total
September 30
2012 $ 840 $ 188 $ 1,028
2013 865 156 1,021
2014 900 121 1,021
2015 940 84 1,024
2016 975 46 1,021
2017 659 13 672
Total $ 5,179 $ 608 $ 5,787
67
>, City of Huntington Beach
Dotes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
b. Public Financing Authority
(1) 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 1S and September 1S
Principal Payment Dates September 1st
Purpose of Debt Construct Sports Complex and
South Beach Phase II
Improvements
Bonds of $24,900,000 were advance refunded by the 2011(a) Lease
Revenue Bonds on September 28, 2011. The 2001(a) Lease Revenue
Bonds were paid on October 17, 2011 but in substance defeased as of
September 30, 2011.
(2) 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
Bonds of $13,960,000 were advance refunded by the 2011(a) Lease
Revenue Bonds on September 28, 2011. The 2001(a) Lease Revenue
Bonds were paid on October 17, 2011 but in substance defeased as of
September 30, 2011.
68
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
V,
r
11. LONG-TERM OBLIGATIONS (Continued)
(3) 2010(a) Public Financing Authority Lease Revenue Bonds
Year of Issuance 2010
Type of Debt Lease Revenue Bonds
Original Principal Amount $14,745,000
Security Lease with City
Interest Rates 2.0% to 5.0%
Interest Payment Dates March 1, September 1
Principal Payment Dates September 1
Purpose of Debt Defease 1997 Leasehold Revenue Bonds
(Construct Pier Plaza and Purchase 800
MHz System) and 2000 Lease Revenue
Bonds (Capital Improvements and
defeasance of Emerald Cove Certificates of
Participation)
Debt service requirements to maturity are (in thousands):
Year Ending principal Interest Total
September 30
2012 $ 635 $ 604 $ 1,239
2013 655 585 1,240
2014 680 559 1,239
2015 705 532 1,237
2016 730 503 1,233
2017-2021 4,155 2,028 1 6,183
2022-2026 3,035 1,122 4,157
2027-2030 2,605 314 2,919
Tota I $ 13,200 $ 6,247 $ 12,371
(4) 2011(a) Public Financing Authority Lease Revenue Bonds
On September 28, 2011, the Public Financing Authority issued
$36,275,000 of 2011 Series A Lease Revenue Bonds on behalf of the City.
The bond proceeds including premiums of $1,884,000 were used to
advance refund the outstanding 2001 Series A and B Lease Revenue
Bonds. The 2011 Series A bonds bear fixed interest rates ranging from
2.00% to 5.00% and have a final maturity date of September 1, 2031. The
2011 Series A bonds payments to escrow from net proceeds are reported
as other financing uses. The 2001 Series A and Series B bonds in the
amount of $24,900,000 and $13,960,000, respectively, were redeemed on
69
City of Huntington Beach
(Votes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
October 17, 2011. The Public Financing Authority in effect reduced its
aggregate debt service payments by approximately $5,382,000 over the
next 20 years and obtained a net economic gain (difference between the
present values of the old and new debt service payments) of$3,773,000.
Year of Issuance 2011
Type of Debt Lease Revenue Bonds
Original Principal Amount $36,275,000
Security Lease with City
Interest Rates 2.0% to 5.0%
Interest Payment Dates March 1, September 1
Principal Payment Dates September 1
Purpose of Debt Defease 2001(a) Leasehold Revenue
Bonds (Construct Sports Complex and
South Beach Phase II Improvements) and
2001(b) Lease Revenue Bonds (Defease
Civic Improvement Corporation
Certificates
Debt service requirements to maturity are (in thousands):
Year Ending principal Interest Total
September 30
2012 $ 2,120 $ 1,284 $ 3,404
2013 2,960 1,346 4,306
2014 3,030 1,272 4,302
2015 3,180 1,121 4,301
2016 3,335 962 4,297
2017-2021 8,080 3,605 11,685
2022-2026 6,140 2,286 8,426
2027-2031 7,430 986 1 8,416
Total $ 36,275 $ 12,8621 $ 49,137
70
City of Huntington Beach
Notes to Financial Statements
, . For the Year Ended September 30, 2011
4.�
11. LONG-TERM OBLIGATIONS (Continued)
c. 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 1st and August 1 S
Principal Payment Dates August 1 S
Purpose of Debt Prepay Agency's 1992 Loans to
Public Financing Authority
Debt service requirements to maturity are (in thousands):
Year Ending principal Interest Total
September 30
2012 $ 450 $ 298 $ 748
2013 465 278 743
2014 490 257 747
2015 515 234 749
2016 540 211 751
2017-2021 2,530 645 3,175
2022-2024 1,190 117 1,307
Total $ 6,180 $ 2,040 $ 8,220
71
City of Huntington Beach
Notes to Financial Statements
. ...E. � For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
(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 Februa 1 st and August 1S
Principal Payment Dates August 1"
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 principal Interest Total
September 30
2012 $ 995 $ 641 $ 1,636
2013 1,040 601 1,641
2014 1,080 558 1,638
2015 1,115 512 1,627
2016 1,180 464 1,644
2017-2021 5,540 1,410 6,950
2022-2024 2,575 253 2,828
Total $ 13,525 $ 4,439 $ 17,964
Pledged revenues
The 1999 and 2002 Tax Allocation Refunding Bonds are secured by tax
increment revenues excluding the 20% total tax increment dedicated to the
Low Income Housing fund. As of September 30, 2011, the total principal and
interest remaining for both bonds is $26,184,000. Pledged tax increment
revenue recognized during the fiscal year was $14,422,000 against the total
debt service payment of $2,369,000. Although the incremental property taxes
were projected to produce sufficient revenues to meet the debt service
requirements over the life of the bonds, certain conditions could have a
material adverse impact on revenues allocated to the Agency. These include
future decreases in the assessed valuation of the project areas, decreases in
the applicable tax rates or collection rates, general decline in the economic
condition of the project areas, or a change in law reducing the tax increment
received by the Agency. Current legislation dissolving the Agency discussed
in Note 15 will impact future revenues received.
72
City of Huntington Beach
tip__,
Notes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
(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
year-end, the Agency obligation under the agreement amounted to
$5,803,000. Project-generated revenues as available will repay these
amounts over the time needed to fully amortize the advance. The interest
rate of this obligation is 6.32%.
(4) Bella Terra Parking Structure
In fiscal year 2005-06, the Agency entered into an owner participation
agreement with Bella Terra Associates, LLC (formerly Huntington Center
Associates, LLC). Under the agreement, the Corporation would construct
various public improvements, including a parking structure, which would
then be deeded to the City. The Agency would reimburse $15,000,000 of
the costs of the public improvements. As of year-end, the Agency
obligation under the agreement amounted to $13,922,000. Project-
generated revenues as available will repay these amounts over the time
needed to fully amortize the advance. The interest rate of this obligation is
6.94%.
(5) CIM/Huntington Disposition and Development Agreement — Strand
Parking Structure and Infrastructure
Year of Issuance 2009
Type of Debt Loan from CIM Group, LLC
Original Principal Amount $7,900,000
Security Tax Increment
Interest Rates 7.0%
Interest Payment Dates September 30
th
Principal Payment Dates September 30
th
Purpose of Debt Strand Parking Structure and
Infrastructure
As of year-end, the Agency obligation under the agreement amounted to
$7,288,000. Repayment shall be made solely from net tax increment
generated by the Merged Redevelopment Project Area by 2034.
73
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
(6) CIM/Huntington Disposition and Development Agreement —
Additional Strand Parking
Year of Issuance 2009
Type of Debt Loan from CIM Group, LLC
Original Principal Amount $950,000
Security Tax Increment
Interest Rates 10.0%
Interest Payment Dates September 30
Principal Payment Dates September 30
th
Purpose of Debt Additional Strand Parking
Structure and Infrastructure
The loan repayment shall be made solely from net tax increment generated
by the Merged Redevelopment Project Area by 2034. As of year-end, the
Agency obligation under the agreement amounted to $435,000.
(7) Section 108 Loan Redevelopment Agency/Bowen Court
Year of Issuance and Refinance Original 2000
Refinanced 2010
Type of Debt Section 108 Loan from Federal
Government
Principal Amount Original $6,000,000
Refinanced $3,665,000
Security Loan Agreement with Federal
Government
Interest Rates Original 7.7%
Refinanced 2.3% to 3.3%
Interest Payment Dates February 1" and August 1"
Principal Payment Dates August 1"
Purpose of Debt Capital Im rovements.
74
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
Year of Issuance 2002
Type of Debt HELP Loan — Bowen Court
Principal Amount $500,000
Security Note with developer
Interest Rates 3.0%
Repayment terms Deferred for 10 years
Purpose of Debt Affordable Housing
In October 2011, CaIHFA offered an Early Payoff Discount to all HELP loan
holders, discounting the accrued interest based on the number of months the
loan was paid off prior to maturity. The Agency elected the early payoff
option and in November 2011, the HELP loan was paid in full.
Debt service requirements to maturity are (in thousands):
Year Ending principal Interest Total
September 30
2012 $ 972 $ 88 $ 1,060
2013 350 78 428
2014 375 73 448
2015 400 66 466
2016 430 57 487
2017-2019 1,470 95 1,565
Total $ 3,997 1 $ 457 $ 4,454
(8) Pollution Remediation — Redevelopment Agency
The Redevelopment Agency purchased property on Edinger Avenue to
consolidate land for redevelopment on January 28, 2009. The Agency
plans on remediating hazardous materials on this site. The estimated cost
of cleanup is $200,000 and is reported as a long-term liability in the
government-wide statements. The cleanup cost will not exceed the
estimated amount as an environmental insurance policy taken by the
Agency will indemnify itself against further liability.
75
•
City of Huntington Beach
Notes to Financial Statements
�3y:a For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
d. Other Long-Term Obligations
(1) Leases Payable
The City entered into capital leases for various items:
Years of Issuance 2001 through 2007
Type of Debt —Capital Leases
Original Principal Amount Various $10,000 to $1,800,000
Security Asset
Interest Rates 4.2% to 6.9%
Interest Payment Dates Monthly, Quarterly, Semi-Annuall
Principal Payment Dates Monthly, Quarterly, Semi-Annuall
Purpose of Debt Equipment Financing
Future minimum lease payments to maturity are (in thousands):
Year Ending principal Interest Total
September 30
2012 $ 282 $ 21 $ 303
2013 290 8 298
Total $ 572 $ 29 $ 601
(2) Compensated Absences
There is no repayment schedule to pay the compensated absences amount
of $11,131,000 relating to governmental operations. The General Fund
typically liquidates the vacation and sick leave liability.
(3) Net Pension Obligation
There is no fixed repayment schedule to fund the liability for the unfunded
net pension obligation totaling $4,031,000 for the City's Retirement
Supplement Plan described in Note 7. The amount will be funded through
a contribution rate determined by an independent actuarial study (see note
7).
76
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
(4) Claims Payable
There is no repayment schedule for the claims payable of $17,135,000
described in Note 9. The City pays the claims upon final settlement.
(5) Pollution Remediation
The City plans to remediate hazardous materials contamination of land
located within Huntington Central Park used as a gun range facility prior to
its close in 1997. The City is voluntarily planning to remediate the site in
order to use the area for park purposes. The cost of the gun range
remediation is estimated to be $2 million and is reported as a long-term
liability in the government-wide financial statements. The liability was
measured by estimating a reasonable range of potential outlays and
multiplying those outlays by their probability of occurring.
(6) Public Agency Retirement Systems (PARS) Notes Payable
In May 2010, the City Council approved a retirement incentive program to
eligible employees, under the condition the program meets the fiscal,
managerial, and operational goals of the City to help mitigate declining
General Fund revenues and institute long-term structural changes to avert
future budget shortfalls and ensure that the City remains financially sound.
The following were the eligibility requirements for the program:
• City miscellaneous (non-safety) and marine safety employees only
• Employed by the City as of May 3, 2010
• 50 years of age or older as of September 30, 2010
• Have at least five years of City service as of September 30, 2010
• Resign from City employment no later than September 30, 2010
• Retire under PERS no later than October 1, 2010
A total of 103 people participated and were approved by the Council for the
retirement incentive program through the Public Agency Retirement
Systems (PARS) Supplemental Retirement Program (SRP). The SRP
offered through PARS allowed the City to map its own strategy with respect
to payment for the program, backfilling of positions — both number and
timing, and program cost. The participants of this program selected from a
number of benefit options, the basic program in which one twelfth of 7% of
the individual employee's base annual salary as of July 1, 2010 would be
paid monthly over the lifetime of the participant commencing on October 1,
77
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
2010. Alternative payments are present value equivalents to the basic
program and include the following:
• Joint-and-survivor payments
• Payments made for the life of the participant subject to a ten year
minimum
• Fixed term payments from five to fifteen years. These payments are
guaranteed to the participant for the full term selected
The City is funding the cost of this program through an annuity that requires
a one-time payment of $82,000 in September 2010 and $1,587,000 fixed
annual payments over five years due in October of each year starting in
2010. In accordance with GASB 47, a liability of the accrual cost for this
benefit has been recognized in the amount of $ 7,231,000 in September
2010 and the balance as of September 30, 2011 is $5,868,000. The cash
flows associated with the five year funding were discounted at a rate of
5.5% in the table below (in thousands):
Year Ending principal Interest Annual
September 30 Payments
2012 $ 1,351 $ 236 $ 1,587
2013 1,426 161 1,587
2014 1,504 83 1,587
2015 1,587 - 11587
Tota I $ 5,868 $$ 480 6,3481
(7) Section 108 Loan City
Year of Issuance and Refinance Original 2000
Refinanced 2010
Type of Debt Loan from Federal Government
Principal Amount Original $2,570,000
Refinanced $1,560,000
Security Loan Agreement with Federal
Government
Interest Rates Original 3.8% to 3.9%
Refinanced 1.1% to 1.7%
Interest Payment Dates February 1" and August 1s'
Principal Payment Dates August 1 S
Purpose of Debt Capital Improvements. Section
108 Loan
78
City of Huntington Beach
_ °
11 ,
Notes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
Debt service requirements to maturity are (in thousands):
Year Ending Principal Interest Annual
September 30 Payments
2012 $ 140 $ 34 $ 174
2013 150 33 183
2014 160 31 191
2015 170 28 198
2016 180 24 204
2017-2019 625 40 665
Total $ 1,425 $ 190 $ 1,615
e. Long-Term Obligations — Business Activities
Below is a schedule of the long-term obligations of business activities (in
thousands):
Due
Long-Term Obligations-Business October 1, September Within
Activities: 2010 Additions Retirements 30,2011 One Year
Compensated Absences $ 928 $ 260 $ (95) $ 1,093 $ 298
Leases Payable 3 - (3) - -
Total Long-Term Obligations-
Business Activities $ 931 $ 260 $ (98) $ 1,093 $ 298
(1) Compensated Absences
There is no repayment schedule for the compensated absences amount of
$1,093,000 relating to business-type activities.
f. Long-Term Obligations for which City is not Liable in any Manner
Obligations Not Recorded in Financial Statements:
Community Facilities Districts: October 1, September
(in thousands) 2010 Additions Retirements 30,2011
Community Facilities District No. 1990-1
Special Tax Refunding Bonds $ 1,360 $ $ (110) $ 1,250
Community Facilities District No.2000-1
Special Assessment Tax Bonds 14,030 (340) 13,690
Community Facilities District No.2002-1
Special Assessment Tax Bonds 4,775 (50) 4,725
Community Facilities District No.2003-1
Special Assessment Tax Bonds 22,660 - (520) 22,140
Total Community Facilities Districts 42,825 (1,020) 41,805
Residential Redevelopment Bonds 9,500 9,500
Total Obligations Not Recorded in
Financial Statements $ 52,325 $ - $ (1,020) $ 51,305
79
City of Huntington Beach
(Votes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
(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 Aril 1st and October 1st
Principal Payment Dates October 1"
Debt service requirements to maturity are (in thousands):
Year Ending principal Interest Total
September 30
2012 $ 110 $ 65 $ 175
2013 120 59 179
2014 120 52 172
2015 130 45 175
2016 140 38 178
2017-2020 630 71 701
Total $ 1,250 $ 330 $ 1,580
(2) Community Facilities District 2000-1 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 st and March 1S
Principal Payment Dates September 1st
Purpose of Debt Public Improvements for Grand
Coast Resort
80
City of Huntington Beach
(Votes to Financial Statements
For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
Debt service requirements to maturity are (in thousands):
Year Ending principal Interest Total
September 30
2012 $ 360 $ 876 $ 1,236
2013 380 855 1,235
2014 405 832 1,237
2015 430 807 1,237
2016 455 780 1,235
2017-2021 2,755 3,426 6,181
2022-2026 3,765 2,416 6,181
2027-2031 5,140 1,036 6,176
Total1 $ 13,690 $ 11,028 $ 24,718
(3) Community Facilities District 2002-1 Special Tax Bonds
Year of Issuance 2002
Type of Debt Community Facilities District
Assessment Bonds
Original Principal Amount $4,900,000
Security Special Tax Levies
Interest Rates 3.80% to 6.20%
Interest Payment Dates March 1 s and September 1 s
Principal Payment Dates September 1"
Debt service requirements to maturity are (in thousands):
Year Ending principal Interest Total
September 30
2012 $ 55 $ 290 $ 345
2013 65 288 353
2014 80 284 364
2015 90 280 370
2016 100 275 375
2017-2021 730 1,271 2,001
2022-2026 1,215 994 2,209
2027-2031 1,905 532 2,437
2032 485 30 515
Total $ 4,725 $ 4,244 $ 8,969
81
City of Huntington Beach
Notes to Financial Statements
3,. For the Year Ended September 30, 2011
11. LONG-TERM OBLIGATIONS (Continued)
(4) Community Facilities District 2003-1 Special Tax Bonds
Year of Issuance 2003
Type of Debt Community Facilities District
Assessment Bonds
Original Principal Amount $25,000,000
Security Special Tax Levies
Interest Rates 2.65% to 5.85%
Interest Payment Dates March 1 St and September 1 s
Principal Payment Dates September 1 S
Debt service requirements to maturity are (in thousands):
Year Ending Principal Interest Total
September 30
2012 $ 545 $ 1,263 $ 1,808
2013 570 1,236 1,806
2014 595 1,209 1,804
2015 625 1,180 1,805
2016 660 1,148 1,808
2017-2021 3,875 5,158 9,033
2022-2026 5,130 3,897 9,027
2027-2031 6,825 2,212 9,037
2032-2033 3,315 1 294 31609
Tota I $ 22,140 1 $ 17,597 $ 39,737
(5) Residential Development Bonds
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 Original Issue
Bond Issue Year-end Amount
Five Points Senior Project Multi-Family Housing $9,500 $9,500
Revenue Bonds—Series A— 1991
82
#
t' City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
12. CAPITAL ASSETS
a. Changes in Capital Assets
Capital asset activity for the year was (in thousands):
October 1, September 30,
Governmental Activitites 2010 Additions Dispositions 2011
Capital Assets, Not Depreciated:
Land $ 367,323 - (572) $ 366,751
Construction in Progress 10,242 1,016 (8,077) 3,181
Joint Ventures 2,094 164 2,258
Total Capital Assets-Not Depreciated 379,659 1,180 (8,649) 372,190
Capital Assets Being Depreciated
Buildings 171,346 8,080 179,426
Machinery and Equipment 47,701 (146) 47,555
Infrastructure 329,497 5,499 (702) 334,294
Total Capital Assets Being Depeciated 548,5" 13,579 (848) 561,275
Less Accumulated Depreciation:
Buildings (42,684) (3,668) (46,352)
Machinery and Equipment (36,427) (2,438) 146 (38,719)
Infrastructure (170,301) (6,676) 702 (176,275)
Total Accumulated Depreciation (249,412) (12,782) 848 (261,346)
Total Depreciated-Net 299,132 797 - 299,929
Total Capital Assets 928,203 14,759 (9,497) 933,465
Total Accumulated Depreciation (249,412) (12,782) 848 (261,346)
Capital Assets of Governmental Activitites-Net $ 678,791 $ 1,977 $ (8,649) $ 672,119
October 1, September 30,
Business Activities: 2010 Additions Dispositions 2011
Capital Assets, Not Depreciated:
Land $ 3,907 $ 3,907
Construction in Progress 12,375 7,073 (66) 19,382
Total Capital Assets-Not Depreciated 16,282 7,073 (66) 23,289
Capital Assets Being Depreciated
Buildings 53,509 66 53,575
Machinery and Equipment 9,396 479 9,875
Infrastructure 122,345 10,084 (35) 132,394
Total Capital Assets Being Depeciated 185,250 10,629 (35) 195,844
Less Accumulated Depreciation:
Buildings (12,689) (1,363) (14,052)
Machinery and Equipment (6,696) (597) (7,293)
Infrastructure (60,568) (2,373) 35 (62,906)
Total Accumulated Depreciation (79,953) (4,333) 35 (84,251)
Total Depreciated-Net 105,297 6,296 - 111,593
Total Capital Assets 201,532 17,702 (101) 219,133
Total Accumulated Depreciation (79,953) (4,333) 35 (84,251)
Capital Assets of Business Activitites-Net $ 121,579 $ 13,369 $ (66) $ 134,882
83
City of Huntington Beach
(Votes to Financial Statements
a For the Year Ended September 30, 2011
12. 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:
City Manager $ 9
City Clerk 15
Fire 703
Information Services 30
Police 327
Economic Development 20
Community Services 1,501
Library Services 290
Public Works 8,646
Non-Departmental 1,241
Total $ 12,782
Depreciation in business activities was charged to the following
functions/programs in the Statement of Activities (in thousands):
Fund:
Water $ 3,099
Sewer Service 1,235
Total $ 4,334
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
Machinery and Equipment $ 1,869
Buildings 3,449
Less:Accumulated Depreciation (1,478)
Total $ 3,840
d. Sunset Beach Annexation
Sunset Beach, a small beachfront community founded in 1904 with less than
1,000 residents and 134 acres of land, was annexed to the City of Huntington
Beach in August 2011. While capital assets were transferred to the City, the
records supporting the net book value of those assets were not available as of the
issuance date of the financial statements. However, the City intends to capitalize
the assets transferred upon receipt of records supporting the net book value of
these assets. Further, the exclusion of these assets are not expected to have a
significant effect on the basic financial statements given the size and age of
Sunset Beach and the types of assets transferred relative to the City's
capitalization policy.
84
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
13. 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. Sales Tax Sharing Agreements
City Council agreed to provide sales tax rebates to various companies. The sales
tax rebates serve to attract and retain various companies in the City of Huntington
Beach. The City of Huntington Beach has sales tax agreements that extend until
2020. Sales tax rebates total $607,000 in fiscal year ended September 30, 2011.
c. Cooperation and Owner Participation Agreements
On September 2, 2003, 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.
On October 16, 2006, the Redevelopment Agency approved an Owner
Participation Agreement with Makallon Atlanta Huntington Beach, LLC (also
known as Makar) to develop a 31-acre site in the Main-Pier sub-area of the
Huntington Beach Redevelopment Project (Pacific City). Makar will advance
$5,500,000 to the Redevelopment Agency to fund the Agency's obligation for the
Regional Urban Runoff Treatment System and the Pacific View Drive Extension.
The advance will be repaid over 20 years from tax increment generated from the
site. Current development of the site is on hold and will proceed in the future as
economic conditions permit. Currently, Crescent Heights has purchased the
property from Makallon. The next steps are being discussed.
Bella Terra Phase II
On October 4, 2010, the Agency approved the affordable housing agreement with
BTDJM Phase II Associates (DJM). The agreement will facilitate the construction
of a 467 mixed-use unit project, including 43 moderate units and 28 very low units.
This agreement will reimburse DJM for construction of the affordable units only up
to $17 million plus 4% interest. The agreement also includes payment from DJM
to the City for up to $250,000 for the pedestrian access crossing between the
85
City of Huntington Beach
Notes to Financial Statements
* For the Year Ended September 30, 2011
t
13. COMMITMENTS AND CONTINGENCIES (Continued)
Levitz site and the Village at Bella Terra if construction is within 10 years of the
affordable housing agreement. The reimbursement of the affordable units will be
based upon the site-generated tax increment for the mixed use project as well as
the 20% housing fund from the site-generated Bella Terra I. Construction is
underway.
As of September 30, 2011, the City has no outstanding obligations related to the
cooperation and owner participation agreements discussed above.
d. Redevelopment Agency Debt to City
The City has advanced money to the Redevelopment Agency for major capital
improvements, economic development projects, and operations. In January 2011,
the City Council and Redevelopment Agency Board approved a revised
Cooperation Agreement, which included a Promissory Note that memorialized
indebtedness previously incurred by the Agency and owed to the City from a
series of loans made from the City to the Agency from 1982 to present. Based on
this Cooperation Agreement, the interest rate for the loan is 3.81% and the loan is
scheduled to be fully repaid by September 2030. The City has not recorded the
advances in the accompanying financial statements due to uncertainties
surrounding Assembly Bill 1X 26 and the introduction of Assembly Bill 1585 (see
Note 15 b and c). Below is a schedule of the activity for the year (in thousands):
10/1/2010 Additions Reductions 9/30/2011
General Fund
Direct Advances $ 2,312 $ - $ - $ 2,312
Indirect Advances 6,567 - - 6,567
Land Sales 32,833 - - 32,833
Interest 28,511 2,676 (6,307) 24,880
Emerald Cove 4,461 (407) 4,054
Total General Fund 74,684 2,676 (6,714) 70,646
Sewer Fund
Direct Advances 265 10 - 275
Deferred Development Fees 165 6 - 171
Total Sewer Fund 430 16 - 446
Drainage Fund
Direct Advances 639 24 - 663
Deferred Development Fees 175 7 - 182
Total Drainage Fund 814 31 - 845
Park Acquisition and Development Fund
Direct Advances 5,267 201 - 5,468
Deferred Development Fees 391 15 - 406
Total Park Acquisition and Development Fund 5,658 216 - 5,874
Water Fund
Direct Advances 3,964 151 - 4,115
Total Water Fund 3,964 151 - 4,115
Total All Funds $ 85,550 $ 3,090 $ (6,714) $ 81,926
The cash repayments are recorded as transfers from the Redevelopment Agency
to the fund receiving the repayment.
86
City of Huntington Beach
Notes to Financial Statements
g3 For the Year Ended September 30, 2011
14. OTHER INFORMATION
a. Expenditures Exceeding Appropriations
Expenditures exceeded appropriations at the departmental level in the fund shown
(in thousands):
General Fund
Fire $ 1,280
b. Fund and Accumulated Deficits
The following funds have total fund deficits at year-end (in thousands):
Major Fund
Redevelopment Agency Debt Service $ 1,497
Special Revenue Fund
Drainage 373
We have established plans to reduce and eliminate deficits in these Funds. This
will be accomplished in the Redevelopment Agency Debt Service by minimizing
expenditures over the next fiscal years. Given the dissolution of Redevelopment
Agencies pursuant to AB 1X 26, personnel and operating expenditures in the
Redevelopment Agency have been significantly decreased in the fiscal year
2011/12 budget. Future year's budget will also reflect the statutory driven winding
down of all Agency expenses. Expenditures are not authorized in the Drainage
Fund until annual revenues eliminate the negative fund balance.
15. SUBSEQUENT EVENTS
a. HB Auto I
In October 2011, The City entered into a Settlement Agreement with HB Auto I
regarding the purchase and sale of 7872 Edinger Avenue regarding retention in
escrow of Environmental Remediation funds in the amount of$240,000.
b. Legislation Dissolving California Redevelopment Agencies
On June 29, 2011, the Governor of the State of California signed Assembly Bills
1X 26 and 27 as part of the State's budget package. Assembly Bill 1X 26 requires
each California redevelopment agency to suspend nearly all activities except to
implement existing contracts, meet already-incurred obligations, preserve its
assets and prepare for the impending dissolution of the agency. Assembly Bill 1X
27 provides a means for redevelopment agencies to continue to exist and operate
by means of a voluntary alternative redevelopment program.
87
City of Huntington Beach
Notes to Financial Statements
a For the Year Ended September 30, 2011
15. SUBSEQUENT EVENTS (Continued)
The League of California Cities and the California Redevelopment Association
(CRA) filed a lawsuit on July 18, 2011 on behalf of cities, counties and
redevelopment agencies petitioning the California Supreme Court (Court) to
overturn Assembly Bills 1X 26 and 27 on the grounds that these bills violate the
California Constitution.
On December 29, 2011, the Court ruled that Assembly Bill 1X 26, the dissolution
measure, is largely upheld and is a proper exercise of the legislative power vested
in the Legislature by the State Constitution. A different conclusion was rendered
with respect to Assembly Bill 1X 27, which was invalidated in its entirety by the
Court Accordingly, the Agency is required to dissolve in fiscal year 2011/12 and
the guidelines for dissolution are set forth in Assembly Bill 1X 26. The financial
statements do not include any adjustments as a result of the dissolution of the
Agency.
During the City Council's January 9, 2012 meeting, the City approved two
resolutions designating the City as a Successor Agency to the Redevelopment
Agency, and the Huntington Beach Housing Authority as the Successor Agency
for housing-related items. As of February 1, 2012, the Redevelopment Agency
was dissolved pursuant to Health and Safety Code Section 34172(a) and AB 1X
26. As of this date, the City began implementing its duties as Successor Agency
under the direction of an Oversight Board, the California State Controller's Office,
and the California Department of Finance.
The following is a summary of the significant provisions of Assembly Bill 1X 26:
Assembly Bill 1X 26
Suspends Redevelopment Activity- As of June 29, 2011, the Agency cannot incur
new obligations and debt. More specifically, the Agency cannot enter into or
amend contracts, renew or extend leases or other agreements, and dispose of or
transfer real property or other assets. Agencies are required to continue to make
scheduled payments on bonds and other legally binding agreements, and to
manage existing contracts, projects, and other agreements.
Dissolves Redevelopment Agencies - Assembly Bill 1X 26 dissolves all
redevelopment agencies and community development agencies. All assets and
responsibilities for closing out the activities of the former agency are transferred to
a "Successor Agency."
Creates Successor Agencies - The Successor Agency is presumed to be the
sponsoring community of the redevelopment agency. The City has been
designated the Successor Agency. The responsibility of a Successor Agency
includes making payments and performing obligations of the former
redevelopment agency in accordance with a schedule of enforceable obligations.
88
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
15. SUBSEQUENT EVENTS (Continued)
Enforceable obligations include; bonds, loans, legally required payments,
including payments for pension obligations, judgments or settlements, and other
legally binding and enforceable agreements. A Successor Agency is required to
dispose of the former agency's assets in an expeditious fashion, to transfer the
housing functions to its sponsoring community, to wind down the affairs of the
former agency (including the payment of debt and completion of obligated
projects), to prepare administrative budgets, and to provide support to the
"Oversight Board."
Transfer of Housing Functions - The sponsoring community may choose to
assume the housing functions and the housing assets of the dissolved agency.
Should the sponsoring community choose not to assume these responsibilities, all
assets and functions would be transferred to the local housing authority. The City
has elected to continue to administer the housing functions and assets of the
former agency.
Creation of Oversight Boards - The Oversight Board, which is comprised of seven
member representatives from local government bodies, is tasked with reviewing
and approving the actions of the Successor Agency. Two of the seven members
would be City representatives appointed by the Mayor--one of which must be an
employee from the recognized employee organization representing the largest
number of employees working for the redevelopment agency as of the date of
dissolution. The remaining members are appointed by the County (2), the County
Superintendent of Education (1), the Chancellor of California Community Colleges
(1), and the largest special district taxing entity in the territorial jurisdiction of the
former redevelopment agency which is eligible to receive property tax revenues
pursuant to Section 34188. The Successor Agency's Oversight Board has been
established.
89
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
15.SUBSEQUENT EVENTS (Continued)
c. Additional Legislation Related to Assembly Bill 1X 26
Three bills, Senate Bill 654, Senate Bill 986 and Assembly Bill 1585, have been
introduced to the legislature to make technical fixes to AB 1X 26.
SB 654 -- Senate Bill 654 would allow the successor agency to retain the funds on
deposit in the former redevelopment agency's Low-Income Housing Fund to
continue to "increase, improve, and preserve supplies" of low and moderate
income housing. The bill also expands the definition of an enforceable obligation
to include the following additional types of loan agreements between
cities/counties and redevelopment agencies: (1) a loan that was executed within
two years of the date of creation of a project area, if the loan is specific to that
project area; and (2) a loan to fund the agency's 2009-10 SERAF payment to
schools. SB 654 was approved by the Senate on January 31, 2012 and is
currently awaiting consideration in the State Assembly. The bill has not yet been
assigned to a committee. If adopted, the statute will not take effect until January 1,
2013.
SB 986 — Senate Bill 986 clarifies that all bond proceeds initiated by the former
redevelopment agency are considered encumbered and prohibits a successor
agency from sending the proceeds to the county auditor-controller. This bill has
been assigned to the Senate Committee on Government and Finance. Currently,
a hearing date has not yet been set for the bill.
AB 1585 — Assembly Bill 1585 was introduced as a companion bill to Senate Bill
654 on February 2, 2012. The bill makes various technical fixes to AB 1 X 26
clarifying the functions of successor agencies and oversight boards. AB 1585
expands the definition of an enforceable obligation to include the loan types
described under SB 654 and also includes the following: (1) other loan
agreements between the RDA and the City/County if the oversight board finds that
the loan was for a legitimate redevelopment purpose, had economic substance,
and was based on reasonable repayment terms; and (2) payments for costs
incurred to fulfill collective bargaining agreements for layoffs or terminations of city
employees who performed work directly on behalf of the former RDA.
AB 1585 also further expands the definition of the administrative cost allowance to
specify that: (1) employee costs associated with work on specific project
implementation activities shall be considered projects-specific costs (not
administrative), and (2) the oversight board may approve temporary increases to
the administrative cost allowance to carry out the requirements of an enforceable
• obligation, cover, litigation costs, and/or to maintain and preserve the value of
assets while in the possession of the successor agency.
90
City of Huntington Beach
Notes to Financial Statements
For the Year Ended September 30, 2011
Y
15. SUBSEQUENT EVENTS (Continued)
AB 1585 would authorize successor agencies, with oversight board approval, to
enter into agreements to fund required payments under enforceable obligations
that exceed the amount of property tax revenue available to the RDA during the
payment period. AB 1585 would also require the auditor-controller to reserve
additional funds in the Redevelopment Property Tax Trust Fund at the time of the
annual January 16t" allocation, if necessary, to cover payments made in the
second half of the calendar year that are in excess of amounts anticipated to be
deposited from the allocation in May or June.
AB 1585 includes an urgency clause and will require a two-thirds vote. The bill is
currently awaiting a hearing date in the Housing and Community Development
and Local Government Committee.
91
REQUIRE® SUPPLEMENTARY INFORMATION
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City of Huntington Beach
Required Supplementary Information
For the Year Ended September 30, 2011
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 Manager 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, with the Director of Finance's
approval, 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 schedules 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
restricted, committed, or assigned 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 and Changes in Fund Balance (in thousands):
94
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
General Fund
Variance with
Final Budget
Positive
REVENUES Original Budget Final Budget Actual (Negative)
Property Taxes $ 66,825 $ 66,825 $ 67,842 $ 1,017
Sales Taxes 20,115 23,015 22,617 (398)
Utility Taxes 19,480 19,480 19,135 (345)
Other Taxes 11,570 12,535 13,368 833
Licenses and Permits 6,613 6,836 6,593 (243)
Fines, Forfeitures and Penalties 4,158 4,374 4,334 (40)
From Use of Money and Property 14,379 14,380 14,267 (113)
Intergovemmental 4,388 4,388 5,448 1,060
Charges for Current Service 23,211 23,213 23,543 330
Other 1,046 1,550 2,253 703
Total Revenues 171,785 176,596 179,400 2,804
EXPENDITURES
Current:
City Council 306 306 300 6
City Manager 1,584 1,552 1,493 59
City Treasurer 1,379 1,274 1,274 -
City Attorney 2,493 2,203 2,142 61
City Clerk 1,024 965 798 167
Finance 4,320 3,938 3,423 515
Human Resources 6,186 6,443 6,043 400
Planning&Building 6,352 7,016 5,826 1,190
Fire 32,443 33,037 34,317 (1,280)
Information Services 6,313 6,085 5,879 206
Police 59,334 59,060 58,848 212
Economic Development 1,484 1,844 1,723 121
Community Services 13,135 13,607 12,736 871
Library Services 4,115 4,193 3,480 713
Public Works 17,444 17,614 16,169 1,445
Non-Departmental 13,155 14,395 14,360 35
Debt Service:
Principal 544 1,782 1,566 216
Interest - 340 340 -
Total Expenditures 171,611 175,654 170,717 4,937
Excess Of Revenues
Over Expenditures 174 942 8,663 7,741
OTHER FINANCING SOURCES(USES)
Transfers In 6,402 6,402 13,199 6,797
Transfers Out (6,523) (6,523) (8,678) (2,155)
Total Other Financing Sources (Uses) (121) (121) 4,521 4,642
Net Change In Fund Balances 53 821 13,204 12,383
Fund Balance -Beginning Of Year 41,352 41,352 41,352 -
Fund Balance -End Of Year $ 41,405 $ 42,173 $ 54,556 $ 12,383
95
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
Grants Special Revenue
Variance with
Final Budget
Positive
REVENUES Original Budget Final Budget Actual (Negative)
From Use of Money and Property $ 238 $ 238 $ 172 $ (66)
Intergovernmental 2,509 4,851 5,958 1,107
Other 5 5 58 53
Total Revenues 2,752 5,094 6,188 1,094
EXPENDITURES
Current:
Planning&Building - 208 208 -
Fire 787 229 558
Police - 1,231 698 533
Economic Development 1,862 3,355 2,131 1,224
Community Services - 381 267 114
Library Services - 88 66 22
Public Works 70 910 470 440
Capital Outlay - 6,605 2,521 4,084
Debt Service:
Principal 135 135 -
Interest - 61 36 25
Total Expenditures 1,932 13,761 6,761 7,000
Excess(Deficiency)Of Revenues Over(Under)
Expenditures 820 (8,667) (573) 8,094
OTHER FINANCING USES
Transfers Out - (180) (180) -
Total Other Financing Uses - (180) (180) -
Net Change In Fund Balances 820 (8,847) (753) 8,094
Fund Balance-Beginning of Year 1,846 1,846 1,846 -
Fund Balance -End Of Year $ 2,666 $ (7,001) $ 1,093 $ 8,094
96
to
CITY OF HUNTINGTON BEACH
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30,2011
SCHEDULE OF FUNDING PROGRESS
RETIREMENT PLAN-NORMAL
(In Thousands)
Entry Age Normal Unfunded Liability
Actuarial Actuarial Accrued Actuarial Value of as a Percentage of
Valuation Date Liability(AAL) Assets Unfunded Liability Funded Ratio Covered Payroll Covered Payroll
2008
Safety $ 439,687 $ 357,782 $ (81,905) 81.4% $ 36,791 -222.6%
Non Safety 320,209 307,549 (12,660) 96.0% 47,817 -26.5%
Total $ 759,896 $ 665,331 $ (94,565) 87.6% $ 84,608 -111.8%
2009
Safety $ 478,818 $ 370,250 $ (108,568) 77.3% $ 40,384 -268.8%
Non Safety 363,638 321,435 (42,203) 88.4% 48,439 -87.1%
Total $ 842,456 $ 691,685 $ (150,771) 82.1% $ 88,823 -169.7%
2010
Safety $ 500,725 $ 384,956 $ (115,769) 76.9% $ 41,015 -2823%
Non Safety 382,671 334,778 (47,893) 87.5% 47,596 -100.6%
Total $ 883,396 $ 719,734 $ (163,662) 81.5% $ 88,611 -184.7%
97
CITY OF HUNTINGTON BEACH
REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED SEPTEMBER 30,2011
(Continued)
SCHEDULE OF FUNDING PROGRESS
RETIREMENT PLAN-SUPPLEMENTAL
(In Thousands)
Actuarial Entry Age Normal Actuarial Value of Unfunded AAL UAAL as a% of
Valuation Date Accrued Liability Assets (UAAL) Funded Ratio Covered Payroll Covered Payroll
9/30/2006 Update $ 43,066 $ 16,821 $ (26,245) 39.1% $ 40,563 -64.7%
9/30/2007 Actual 51,028 20,452 (30,576) 40.1% 43,516 -70.3%
9/30/2008 Update 52,777 22,722 (30,055) 43.1% 44,822 -67.1%
9/30/2009 Actua]* 59,5761 24,980 (34,596)l 41.9% 44,978 1 -76.9%
9/30/2010 Update* 61,4481 28,467 (32,981)1 46.3% 42,827 -77.0%
9/30/2011 Actual* 62,9261 32,146 (30,780)1 51.1% 1 34,098 -90.3%
SCHEDULE OF EMPLOYER CONTRIBUTIONS
RETIREMENT PLAN-SUPPLEMENTAL
(In Thousands)
Annual Required Percentage
Year Ended Contribution Contributed
9/30/2006 $ 3,022 130.48%
9/30/2007 2,850 156.63%
9/30/2008 3,419 106.08%
9/30/2009 3,476 1 100.00 0
9/30/2010 3,967 100.000/0
9/30/2011 3,957 100.00%
OTHER POST EMPLOYMENT BENEFITS -MEDICAL RETIREMENT
SCHEDULE OF FUNDING PROGRESS
(In Thousands)
Unfunded
Actuarial Actuarial Value of Actuarial Accrued Actuarial Accrued UAAL as a% of
Valuation Date Assets Liability Liability FundedRatio Covered Payroll Covered Payroll
9/30/2009 Actual* $ 8,727 $ 19,474 $ (10,747) 44.8% $ 88,923 -12.1%
9/30/2010 Update* 9,157 20,608 (11,451) 44.4% 90,465 -12.7%
6/30/2011 Actual** 9,6391 22,447 (12,808)1 42.9% 1 82,443 1 -15.5%
*Actuarial valuation for each fiscal year ending September 30th was performed as of March 31 st of the same year using actual values at March 31st
projected forward to fiscal year end
**Actuarial valuation date changed to June 30th to conform with CalPERS year-end
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SUPPLEMENTARY INFORMATION
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101
City of Huntington Beach
Other 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 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 Park Acquisition and Development Fund accounts for fees received from developers to develop and
maintain the City's park system.
• The Highway Safety & Traffic Reduction Fund accounts for moneys used to fund transportation projects,
improve the movement of goods, improve air quality, and enhance the safety and security of the transportation
system under the Highway Safety,Traffic Reduction,Air Quality, and Port Security Bond Act of 2006.
• The Traffic Congestion Relief Fund accounts for moneys allocated for roadway maintenance as established
by Assembly Bill 2928.
Debt Service Funds account for the receipts for and payment of general long-term debt.
• The Property Tax Refund Fund records the payment of claims for repayment of the Judgment Obligation
Bonds.
• The Public Financing Authority accounts for the activity of the Huntington Beach Public Financing Authority.
Capital Projects Funds account for the acquisition and construction of capital assets other than those
financed by proprietary fund types.
• 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.
• The Infrastructure Fund records activity for certain designate infrastructure related expenditures.
• The Energy Efficiency Fund records activities to implement energy efficiency and infrastructure measures.
102
CITY OF HUNTINGTON BEACH
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
SEPTEMBER 30,2011
(In Thousands)
SPECIAL REVENUE FUNDS
ASSETS Gas Tax Drainage Transportation I Air Quality
Cash and Investments $ 2,188 $ - $ 1,728 $ 770
Cash and Investments with Fiscal Agent -
Taxes Receivable - - 197
Other Receivables 760 - 522 70
Due from Other Funds - -
Other Assets - - - -
Total Assets $ 2,948 $ - $ 2,447 $ 840
LIABILITIES
Accounts Payable $ 114 $ - $ 114 $ 7
Due to Other Funds - 373 - -
Advances from Other Funds - - - -
Deposits Payable - - - -
Deferred Revenue 563 - 244 68
Total Liabilities 677 373 358 75
FUND BALANCES
Restricted
Pollution Remediation - - - -
Debt Service - - - -
Highways, Streets and Transportation 2,271 - 2,089 -
Air Quality - - - 765
Parks - - - -
Committed
Other Capital Projects - - - -
Assigned
Capital Projects - - - -
Other Purposes - - -
Unassigned - (373) - -
Total Fund Balances 2,271 (373) 2,089 765
Total Liabilites and Fund Balances $ 2,948 $ - $ 2,447 $ 840
103
CITY OF HUNTINGTON BEACH
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
SEPTEMBER 30,2011
(in Thousands)
(continued)
SPECIAL REVENUE FUNDS
Park Acquisition Highway Safety Traffic
Traffic Impact Fourth of July and &Traffic Congestion Total Special
Fee Parade Development Reduction Relief Revenue Funds
$ 38 $ 32 $ 3,764 $ 1,357 $ 2,807 $ 12,684
197
130 9 7 4 8 1,510
886 886
- - 1,265 - - 1,265
$ 168 $ 41 $ 5,036 $ 1,361 $ 3,701 $ 16,542
$ 12 $ 5 $ 40 $ 504 $ 137 $ 933
- - - - 373
- 341 - - 341
- - 1,267 - - 1,267
126 - - - - 1,001
138 5 1,648 504 137 3,915
- - 442 - - 442
30 - - 857 3,564 8,811
- - - - - 765
- 2,946 - - 2,946
- 36 - - - 36
- - - - - (373)
30 36 3,388 857 3,564 12,627
$ 168 $ 41 $ 5,036 $ 1,361 $ 3,701 $ 16,542
104
CITY OF HUNTINGTON BEACH
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
SEPTEMBER 30, 2011
(In Thousands)
(continued)
Capital Projects
Debt Service Fund Funds
Public
Property Tax Financing Total Debt
ASSETS Refund Authority Service Fund Parking in-lieu
Cash and Investments $ - $ 23 $ 23 $ 821
Cash and Investments with Fiscal Agent 1 4,394 4,395 -
Taxes Receivable - - - -
Other Receivables - - - 2
Due from Other Funds - - - -
Other Assets - _ _ _
Total Assets $ 1 $ 4,417 $ 4,418 $ 823
LIABILITIES
Accounts Payable $ 1 $ 68 $ 69 $ -
Due to Other Funds - - - -
Advances from Other Funds - - - -
Deposits Payable - - - _
Deferred Revenue - - - -
Total Liabilities 1 68 69 -
FUND BALANCES
Restricted
Pollution Remediation - _ _ -
Debt Seance - 4,349 4,349 -
Highways, Streets and Transportation - - - -
Air Quality - - - _
Parks - _ - -
Committed
Other Capital Projects - _ _ 823
Assigned
Capital Projects - - - -
Other Purposes - - - _
Unassigned - - - _
Total Fund Balances - 4,349 4,349 823
Total Liabilites and Fund Balances $ 1 $ 4,417 $ 4,418 $ 823
105
CITY OF HUNTINGTON BEACH
COMBINING BALANCE SHEET
OTHER GOVERNMENTAL FUNDS
SEPTEMBER 30,2011
(In Thousands)
(continued)
Capital Projects Funds
Total Other
Sewer Energy Total Capital Governmental
Development Infrastructure Efficiency Projects Funds Funds
$ 1,082 $ 2,149 $ 1,671 $ 5,723 $ 18,430
- - - 4,395
- - - 197
3 5 4 14 1,524
- - - 886
- - - 1,265
$ 1,085 $ 2,154 $ 1,675 $ 5,737 $ 26,697
$ 13 $ - $ - $ 13 $ 1,015
- - - 373
- 341
- - - 1,267
- - - - 1,001
13 - 13 3,997
- - - - 442
- - - 4,349
- - 8,811
- - 765
- - - - 2,946
1,072 2,154 - 4,049 4,049
- - 1,675 1,675 1,675
- - 36
- - - - (373)
1,072 2,154 1,675 5,724 22,700
$ 1,085 $ 2,154 $ 1,675 $ 5,737 $ 26,697
106
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(In Thousands)
Special Revenue Funds
REVENUES Gas Tax Drainage Transportation EXIruality
Sales Taxes $ - $ - $ 2,417 $ -
Licenses and Permits - - -
From Use of Money and Property 14 - 6 6
Intergovernmental 3,685 - 151 224
Charges for Current Service - 119 - -
Other - - - -
Total Revenues 3,699 119 2,574 230
EXPENDITURES
Current:
Human Resources - - - 63
Community Services - - - -
Public Works 676 - 704 124
Non-Departmental - - - -
CapitalOutlay 853 - 1,271 81
Debt Service:
Principal - - - -
Interest - - - -
Total Expenditures 1,529 - 1,975 268
Excess Of Revenues Over
(Under) Expenditures 2,170 119 599 (38)
Other Financing Sources(Uses):
Transfers In - - - -
Issuance of Long-Term Debt - - - -
Issuance Premium - - - -
Payments to Escrow - - - -
Transfers Out (900) - - -
Total Other Financing Sources
Sources(Uses) (900) - -Net Change in Fund Balances 1,270 119 599 (38)
Fund Balances-Beginning Of Year 1,001 (492) 1,490 803
Fund Balances-End Of Year $ 2,271 $ (373) $ 2,089 $ 765
107
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(In Thousands)
(continued)
Special Revenue Funds
ParkAcquisiton HighwaySafety ra is
Traffic Impact Fourth of July and &Traffic Congestion Total Special
Fee Parade Development Reduction Relief Revenue Funds
$ - $ - $ - $ - $ - $ 2,417
22 - 64 - - 86
- 27 20 4 37 114
37 90 - 18 2,047 6,252
78 157 130 - - 484
272 77 115 1 - 465
409 351 329 23 2,084 9,818
- - - - - 63
- 373 348 - - 721
97 - - 156 489 2,246
26 - 230 1,079 678 4,218
123 373 578 1,235 1,167 7,248
286 (22) (249) (1,212) 917 2,570
277 - 593 - - 870
- - (1) - (277) (1,178)
277 - 592 - (277) (308)
563 (22) 343 (1,212) 640 2,262
(533) 58 3,045 2,069 2,924 10,365
$ 30 $ 36 $ 3,388 $ 857 $ 3,564 $ 12,627
108
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(In Thousands)
(continued)
Capital Projects
Debt Service Funds Funds
Property Tax Public Financing Total Debt
REVENUES Refund Authority Service Funds Parking In-Lieu
Sales Taxes $ - $ - $ - $ -
Licenses and Permits - - - 49
From Use of Money and Property 36 44 80 7
Intergovernmental - - - -
Charges for Current Service - - - -
Other _ - _ _
Total Revenues 36 44 80 56
EXPENDITURES
Current:
Human Resources - - - _
Community Services - - -
Public Works - - _ _
Non-Departmental 2 552 554 -
Capital Outlay - - _ _
Debt Service:
Principal 810 4,584 5,394 -
Interest 217 2,796 3,013 -
Total Expenditures 1,029 7,932 8,961 -
Excess Of Revenues Over
(Under) Expenditures (993) (7,888) (8,881) 56
Other Financing Sources(Uses):
Transfers In 1,027 5,729 6,756 -
Issuance of Long-Term Debt - 36,275 36,275 -
Issuance Premium - 1,884 1,884 -
Payments to Escrow - (37,601) (37,601) -
Transfers Out - - _ -
Total Other Financing Sources
Sources(Uses) 1,027 6,287 7,314 -
Net Change in Fund Balances 34 (1,601) (1,567) 56
Fund Balances-Beginning Of Year (34) 5,950 5,916 767
Fund Balances-End Of Year $ - $ 4,349 $ 4,349 $ 823
109
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(In Thousands)
(continued)
Capital Projects Funds
Total Other
Sewer Energy Total Capital Governmental
Development Infrastructure Efficiency Projects Funds Funds
$ - $ - $ - $ - $ 2,417
- 49 135
10 18 - 35 229
1 - - 1 6,253
152 - - 152 636
1 11 - 12 477
164 29 - 249 10,147
- - - - 63
- - - - 721
84 35 - 119 2,365
- - - - 554
87 46 - 133 4,351
- - - - 5,394
- - - - 3,013
171 81 - 252 16,461
(7) (52) - (3) (6,314)
- - 1,675 1,675 9,301
- - 36,275
- - 1,884
- - - (37,601)
- - - - (1,178)
- - 1,675 1,675 8,681
(7) (52) 1,675 1,672 2,367
1,079 2,206 - 4,052 20,333
$ 1,072 $ 2,154 $ 1,675 $ 5,724 $ 22,700
110
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
Gas Tax
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
From Use of Money and Property $ 10 $ 10 $ 14 $ 4
Intergovernmental 3,200 3,200 3,685 485
Other 2 2 - (2)
TOTAL REVENUES 3,212 3,212 3,699 487
EXPENDITURES:
Current:
Public Works 500 676 676 -
CapitalOutlay 2,346 1,994 853 1,141
TOTAL EXPENDITURES 2,846 2,670 1,529 1,141
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES 366 542 2,170 1,628
OTHER FINANCING SOURCES (USES):
Transfers Out (900) (900) (900) -
NET CHANGE IN FUND BALANCE (534) (358) 1,270 1,628
FUND BALANCE-BEGINNING OF YEAR 1,001 1,001 1,001 -
FUND BALANCE-END OF YEAR $ 467 $ 643 $ 2,271 $ 1,628
Drainage
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
Charges for Current Service $ 50 $ 50 $ 119 $ 69
FUND BALANCE-BEGINNING OF YEAR (492) (492) (492) -
FUND BALANCE-END OF YEAR $ (442) $ (442) $ (373) $ 69
111
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
(continued)
Transportation
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
Sales Taxes $ 2,000 $ 2,000 $ 2,417 $ 417
From Use of Money and Property 25 25 6 (19)
Intergovernmental - - 151 151
Other 2 2 - (2)
TOTAL REVENUES 2,027 2,027 2,574 547
EXPENDITURES:
Current:
Public Works 1,083 1,255 704 551
Capital Outlay 475 1,549 1,271 278
TOTAL EXPENDITURES 1,558 2,804 1,975 829
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES 469 (777) 599 1,376
OTHER FINANCING SOURCES (USES):
Transfers Out (631) (599) - 599
NET CHANGE IN FUND BALANCE (162) (1,376) 599 1,975
FUND BALANCE-BEGINNING OF YEAR 1,490 1,490 1,490 -
FUND BALANCE-END OF YEAR $ 1,328 $ 114 $ 2,089 $ 1,975
112
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES,EXPENDITURES,AND
CHANGES IN FUND BALANCES-BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
(continued)
Air Quality
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
From Use of Money and Property $ 20 $ 20 $ 6 $ (14)
Intergovernmental 240 240 224 (16)
TOTAL REVENUES 260 260 230 (30)
EXPENDITURES:
Current:
Human Resources 111 114 63 51
Public Works 142 153 124 29
Capital Outlay 100 125 81 44
TOTAL EXPENDITURES 353 392 268 124
NET CHANGE IN FUND BALANCE (93) (132) (38) 94
FUND BALANCE-BEGINNING OF YEAR 803 803 803 -
FUND BALANCE-END OF YEAR $ 710 $ 671 $ 765 $ 94
Traffic Impact Fee
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
Licenses and Permits $ - $ - $ 22 $ 22
From Use of Money and Property 10 10 - (10)
Intergovernmental - - 37 37
Charges for Current Service 100 100 78 (22)
Other - - 272 272
TOTAL REVENUES 110 110 409 299
EXPENDITURES:
Current:
Public Works 106 193 97 96
Capital Outlay - 284 26 258
TOTAL EXPENDITURES 106 477 123 354
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES 4 (367) 286 653
OTHER FINANCING SOURCES(USES):
Transfers In - - 277 277
NET CHANGE IN FUND BALANCE 4 (367) 563 930
FUND BALANCE-BEGINNING OF YEAR (533) (533) (533) -
FUND BALANCE-END OF YEAR $ (529) $ (900) $ 30 $ 930
113
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
(continued)
Fourth of July Parade
Variance with
Final Budget
Positive
REVENUES: Original Budget Final Budget Actual (Negative)
From Use of Money and Property $ 3 $ 3 $ 27 $ 24
Intergovemmental - - 90 90
Charges for Current Service - - 157 157
Other 400 400 77 (323)
TOTAL REVENUES 403 403 351 (52)
EXPENDITURES:
Current:
Community Services 400 402 373 29
NET CHANGE IN FUND BALANCE 3 1 (22) (23)
FUND BALANCE-BEGINNING OF YEAR 58 58 58 -
FUND BALANCE-END OF YEAR $ 61 $ 59 $ 36 $ (23)
114
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
(continued)
Park Acquisition and Development
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
Licenses and Permits $ - $ - $ 64 $ 64
From Use of Money and Property 50 50 20 (30)
Charges for Current Service 100 100 130 30
Other - - 115 115
TOTAL REVENUES 150 150 329 179
EXPENDITURES:
Current:
Community Services 1,194 1,515 348 1,167
Capital Outlay 880 871 230 641
Debt Service:
Principal 10 10 - 10
TOTAL EXPENDITURES 2,084 2,396 578 1,818
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES (1,934) (2,246) (249) 1,997
OTHER FINANCING SOURCES (USES):
Transfers In - - 593 593
Transfers Out (375) (375) (1) 374
TOTAL OTHER FINANCING SOURCES (USES) (375) (375) 592 967
NET CHANGE IN FUND BALANCE (2,309) (2,621) 343 2,964
FUND BALANCE-BEGINNING OF YEAR 3,045 3,045 3,045 -
FUND BALANCE-END OF YEAR $ 736 $ 424 $ 3,388 $ 2,964
Highway Safety&Traffic Reduction
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
From Use of Money and Property $ 50 $ 50 $ 4 $ (46)
Intergowmmental - - 18 18
Other - - 1 1
TOTAL REVENUES 50 50 23 (27)
EXPENDITURES:
Current:
Public Works - 156 156 -
CapitalOutlay 700 2,073 1,079 994
TOTAL EXPENDITURES 700 2,229 1,235 994
NET CHANGE IN FUND BALANCE (650) (2,179) (1,212) 967
FUND BALANCE-BEGINNING OF YEAR 2,069 2,069 2,069 -
FUND BALANCE-END OF YEAR $ 1,419 $ (110) $ 857 $ 967
115
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
(continued)
Traffic Congestion Relief
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
From Use of Money and Property $ 50 $ 50 $ 37 $ (1T)
Intergovernmental 2,000 2,000 2,047 47
TOTAL REVENUES 2,050 2,050 2,084 34
EXPENDITURES:
Current:
Public Works 360 764 489 275
Capital Outlay 2,271 2,591 678 1,913
TOTAL EXPENDITURES 2,631 3,355 1,167 2,188
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES (581) (1,305) 917 2,222
OTHER FINANCING SOURCES (USES):
Transfers Out - (277) (277) -
NET CHANGE IN FUND BALANCE (581) (1,582) 640 2,222
FUND BALANCE-BEGINNING OF YEAR 2,924 2,924 2,924 -
FUND BALANCE-END OF YEAR $ 2,343 $ 1,342 $ 3,564 $ 2,222
Property Tax Refund
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
From Use of Money and Property $ - $ - $ 36 $ 36
EXPENDITURES:
Current:
Non-Departmental 6 6 2 4
Debt Service:
Principal 810 810 810 -
Interest 217 217 217 -
TOTAL EXPENDITURES 1,033 1,033 1,029 4
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES (1,033) (1,033) (993) 40
OTHER FINANCING SOURCES (USES):
Transfers In 1,027 1,027 1,027 -
NET CHANGE IN FUND BALANCE (6) (6) 34 40
FUND BALANCE-BEGINNING OF YEAR (34) (34) (34) -
FUND BALANCE-END OF YEAR $ (40) $ (40) $ - $ 40
116
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(In Thousands)
(continued)
Public Financing Authority
Variance with
Final Budget
Positive
REVENUES: Original Budget Final Budget Actual (Negative)
From Use of Money and Property $ - $ - $ 44 $ 44
EXPENDITURES:
Current:
Non-Departmental 12 560 552 8
Debt Service:
Principal 3,636 4,584 4,584 -
Interest 2,207 2,796 2,796 -
TOTAL EXPENDITURES 5,855 7,940 7,932 8
EXCESS OF REVENUES OVER
(UNDER)EXPENDITURES (5,855) (7,940) (7,888) 52
OTHER FINANCING SOURCES(USES):
Transfers In 5,851 5,851 5,729 (122)
Issuance of Long Term Debt - 36,275 36,275 -
Issuance Premium - 1,884 1,884 -
Payments to Escrow - (37,601) (37,601) -
TOTAL OTHER FINANCING SOURCES(USES) 5,851 6,409 6,287 (122)
NET CHANGE IN FUND BALANCE (4) (1,531) (1,601) (70)
FUND BALANCE-BEGINNING OF YEAR 5,950 5,950 5,950
FUND BALANCE-END OF YEAR $ 5,946 $ 4,419 $ 4,349 $ (70)
Parking in-Lieu
Variance with
Final Budget
Positive
REVENUES: Original Budget Final Budget Actual (Negative)
Licenses and Permits $ 50 $ 50 $ 49 $ (1)
From Use of Money and Property 20 20 7 (13)
TOTAL REVENUES 70 70 56 (14)
EXPENDITURES:
Current:
Capital Outlay 100 100 - 100
NET CHANGE IN FUND BALANCE (30) (30) 56 86
FUND BALANCE-BEGINNING OF YEAR 767 767 767 -
FUND BALANCE-END OF YEAR $ 737 $ 737 $ 823 $ 86
117
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
(continued)
Sewer Development
Variance with
Final Budget
Original Positive
REVENUES: Budget Budget Actual (Negative)
Licenses and Permits $ - $ - $ - $From Use of Money and Property 10 10 10 -
Intergovemmental 12 12 1 (11)
Charges for Current Service 100 100 152 52
Other - - 1 1
TOTAL REVENUES 122 122 164 42
EXPENDITURES:
Current:
Public Works - 544 84 460
Capital Outlay 300 371 87 284
TOTAL EXPENDITURES 300 915 171 744
NET CHANGE IN FUND BALANCE (178) (793) (7) 786
FUND BALANCE-BEGINNING OF YEAR 1,079 1,079 1,079 -
FUND BALANCE-END OF YEAR $ 901 $ 286 $ 1,072 $ 786
Infrastructure
Variance with
Final Budget
Original Positive
REVENUES: Budget Budget Actual (Negative)
From Use of Money and Property $ - $ - $ 18 $ 18
Other - - 11 11
TOTAL REVENUES - - 29 29
EXPENDITURES:
Current:
Public Works - 35 35 -
CapitalOutlay - 1,891 46 1,845
TOTAL EXPENDITURES - 1,926 81 1,845
NET CHANGE IN FUND BALANCE - (1,926) (52) 1,874
FUND BALANCE-BEGINNING OF YEAR 2,206 2,206 2,206 -
FUND BALANCE-END OF YEAR $ 2,206 $ 280 $ 2,154 $ 1,874
118
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
(continued)
Energy Effiency
Variance with
Final Budget
Original Positive
Budget Budget Actual (Negative)
EXPENDITURES:
Capital Outlay - 1,675 - 1,675
OTHER FINANCING SOURCES (USES):
Transfers In - 1,675 1,675 -
NET CHANGE IN FUND BALANCE - - 1,675 1,675
FUND BALANCE-BEGINNING OF YEAR - - - -
FUND BALANCE-END OF YEAR $ - $ - $ 1,675 $ 1,675
119
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
Redevelopment Agency Debt Service
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
Property Taxes $ 19,650 $ 19,650 $ 18,027 $ (1,623)
From Use of Money and Property 150 150 114 (36)
Total Revenues 19,800 19,800 18,141 (1,659)
EXPENDITURES:
Current:
Economic Development 3,152 3,376 3,376 -
Debt Service:
Principal 5,160 3,209 2,351 858
Interest 1,281 3,008 3,008 -
Total Expenditures 9,593 9,593 8,735 858
Excess Of Revenues Over(Under)Expenditures 10,207 10,207 9,406 (801)
OTHER FINANCING SOURCES (USES):
Transfers Out (8,845) (9,945) (10,751) (806)
Net Change in Fund Balance 1,362 262 (1,345) (1,607)
Fund Balance -Beginning Of Year (152) (152) (152)
Fund Balance -End Of Year $ 1,210 $ 110 $ (1,497) $ (1,607)
Redevelopment Agency Capital Projects
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
From Use of Money and Property $ 655 $ 655 $ 752 $ 97
Other - - 26 26
Total Revenues 655 655 778 123
EXPENDITURES:
Current:
City Attorney 200 222 212 10
Economic Development 1,586 3,032 2,729 303
Public Works - 2 2 -
CapitalOutlay 125 432 - 432
Total Expenditures 1,911 3,688 2,943 745
Excess Of Revenues Over(Under)Expenditures (1,256) (3,033) (2,165) 868
OTHER FINANCING SOURCES (USES):
Transfers In - 1,280 1,280 -
Transfers Out - (5,495) (6,239) (744)
Total Other Financing Sources (Uses) - (4,215) (4,959) (744)
Net Change in Fund Balance (1,256) (7,248) (7,124) 124
Fund Balance -Beginning Of Year 7,809 7,809 7,809 -
Fund Balance -End Of Year $ 6,553 $ 561 $ 685 $ 124
120
CITY OF HUNTINGTON BEACH
SCHEDULE OF REVENUES, EXPENDITURES,AND
CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
(In Thousands)
(continued)
Low Income Housing Fund
Variance with
Final Budget
Original Positive
REVENUES: Budget Final Budget Actual (Negative)
From Use of Money and Property $ 175 $ 175 $ 126 $ (49)
Other - - 3 3
Total Revenues 175 175 129 (46)
EXPENDITURES:
Current:
Economic Development 2,498 5,021 3,825 11-196
Capital Outlay - 224 - 224
Total Expenditures 2,498 5,245 " 3,825 1,420
Excess Of Revenues Over(Under)Expenditures (2,323) (5,070) (3,696) 1,374
OTHER FINANCING SOURCES(USES):
Transfers In 3,910 3,909 3,605 (304)
Transfers Out (406) (406) (397) 9
Total Other Financing Sources(Uses) 3,504 3,503 3,208 (295)
Net Change in Fund Balance 1,181 (1,567) (488) 1,079
Fund Balance -Beginning Of Year 11,409 11,409 11,409 -
Fund Balance -End Of Year $ 12,590 $ 9,842 $ 10,921 $ 1,079
121
City of Huntington Beach
` 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 Districts Funds accounts for the debt service activity of the City's community
facilities district.
• The Huntington Beach Business Improvement District Fund accounts for the activities of the City's
business improvement district.
• The Central Net Fund accounts for the activity of the Central Net Operations Authority.
• The Parking Structures Fund accounts for the activities of the Bella Terra Parking Structure and Strand
Parking Structure.
• The West Orange County Water Board Fund accounts for the activities of the West Orange County
Water Board.
122
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123
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF FIDUCIARY FUND NET ASSETS
FIDUCIARY FUNDS
SEPTEMBER 30,2011
Agency Funds
Community Business Central Net West Orange
Facilities Improvement Operations Parking County Water Total Agency
Assets: General Deposit Districts Districts Authority Structures Board Funds
Cash and Investments $ 159 $ 255 $ 452 $ 1,316 $ 1,021 $ 228 $ 3,431
Cash with Fiscal Agent - 4,132 - - - - 4,132
Accounts Receivable,Net 67 18 - 2 2 89
Total Assets $ 159 $ 4,454 $ 470 $ 1,316 $ 1,023 $ 230 $ 7,652
Liabilities:
Accounts Payable $ - $ 1 $ 470 $ 6 $ 246 $ 1 $ 724
Due to Bondholders - 4,453 - - - - 4,453
Held for others 159 - - 1,310 777 229 2,475
Total Liabilities $ 159 $ 4,454 $ 470 $ 1,316 $ 1,023 $ 230 $ 7,652
124
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES
ALL AGENCY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30,2011
Balance Balance
October 1,2010 Additions Deletions September30,2011
General Deposit
Assets:
Cash and Investments $ 226 $ 914 $ (981) $ 159
Tota I Assets $ 226 $ 914 $ (981) $ 159
Liabilities:
Accounts Payable $ 49 $ - $ (49) $ -
Held for others 177 - (18) 159
Total Liabilities $ 226 $ - $ (67) $ 159
Community Facilities Districts
Assets:
Cash and Investments $ 1,190 $ 9,301 $ (10,236) $ 255
Cash with Fiscal Agent 4,139 16 (23) 4,132
Accounts Receivable, Net 78 67 (78) 67
Total Assets $ 5,407 $ 9,384 $ (10,337) $ 4,454
Liabilities:
Accounts Payable $ 6 $ 6,127 $ (6,132) $ 1
Due to Bondholders 5,401 - (948) 4,453
Total Liabilities $ 5,407 $ 6,127 $ (7,080) $ 4,454
Business Improvement Districts
Assets:
Cash and Investments $ 145 $ 1,620 $ (1,313) $ 452
Accounts Receivable, Net 18 278 (278) 18
Total Assets $ 163 $ 1,898 $ (1,591) $ 470
Liabilities:
Accounts Payable $ 90 $ 1,703 $ (1,323) $ 470
Held for others 73 - (73) -
Total Liabilities $ 163 $ 1,703 $ (1,396) $ 470
Central Net Operations Authority
Assets:
Cash and Investments $ 1,338 $ 1,824 $ (1,846) $ 1,316
Accounts Receivable, Net - 114 (114) -
Total Assets $ 1,338 $ 1,938 $ (1,960) $ 1,316
Liabilities:
Accounts Payable $ 15 $ 227 $ (236) $ 6
Held for others 1,323 - (13) 1,310
Total Liabilities $ 1,338 $ 227 $ (249) $ 1,316
125
CITY OF HUNTINGTON BEACH
COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES
ALL AGENCY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2011
(CONTINUED)
Balance Balance
October 1,2010 Additions Deletions September 30,2011
Parking Structures
Assets:
Cash and Investments $ 669 $ 1,971 $ (1,619) $ 1,021
Accounts Receivable, Net 2 2 (2) 2
Total Assets $ 671 $ 1,973 $ (1,621) $ 1,023
Liabilities:
Accounts Payable $ 259 $ 1,865 $ (1,878) $ 246
Held for others 412 365 - 777
Total Liabilities $ 671 $ 2,230 $ (1,878.) $ 1,023
West Orange County Water Board
Assets:
Cash and Investments $ 237 $ 837 $ (846) $ 228
Accounts Receivable, Net - 39 (37) 2
Total Assets $ 237 $ 876 $ (883) $ 230
Liabilities:
Accounts Payable $ - $ 173 $ (172) $ 1
Held for others 237 - (8) 229
Total Liabilities $ 237 $ 173 $ (180) $ 230
Total -All Agency Funds
Assets:
Cash and Investments $ 3,805 $ 16,467 $ (16,841) $ 3,431
Cash with Fiscal Agent 4,139 16 (23) 4,132
Accounts Receivable, Net 98 500 (509) 89
Total Assets $ 8,042 $ 16,983 $ (17,373) $ 7,652
Liabilities:
Accounts Payable $ 419 $ 10,095 $ (9,790) $ 724
Due to Bondholders 5,401 - (948) 4,453
Held for others 2,222 365 (112) 2,475
Total Liabilities $ 8,042 $ 10,460 $ (10,850) $ 7,652
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127
City of Huntington Beach
Statistical Section
f
This part of the City of Huntington Beach's Comprehensive Annual Report presents detailed information
as a context for understanding what the information in the financial statements, note disclosures, and
required supplementary information say about the City's overall financial health.
Financial Trends- contain trend information to aid the reader understand how the City's
financial performance has changed over time.
Revenue Capacity — contain information to help the reader assess the City's most significant
local revenue source, the property tax.
Debt Capacity - present information to assess the affordability of the City's current levels of
outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information - offers information to help the reader
understand the environment within which the City's financial activities take place.
Operating Information — contains service and infrastructure data to help the reader
understand how the City's financial report relates to the services the City provides and the
activities it performs.
Unless otherwise noted, the information in these schedules is derived from the comprehensive annual
financial reports for the relevant year. The City implemented GASB 34 in the 2002 fiscal year; schedules
presenting government-wide information include information beginning in that year.
128
CITY OF HUNTINGTON BEACH
NET ASSETS BY COMPONENT-LAST TEN FISCAL YEARS
(In Thousands)
Fiscal Year Ended September 30,
Governmental Activities 2011 2010 2009 2008 2007
Investment in Capital Assets, Net of Related Debt $ 569,497 $ 567,351 $ 559,059 $ 521,654 $ 486,552
Restricted 51,195 49,100 48,198 69,126 73,541
Unrestricted 41,239 33,135 36,319 35,615 59,182
Total Governmental Activities Net Assets $ 661,931 $ 649,586 $ 643,576 $ 626,395 $ 619,275
Business-Type Activities
Investment in Capital Assets, Net of Related Debt $ 134,882 $ 121,576 $ 118,059 $ 118,671 $ 119,874
Restricted 27,988 30,512 30,794 32,665 33,546
Unrestricted 59,260 61,723 59,810 57,704 54,822
Total Business-Type Activities Net Assets $ 222,130 $ 213,811 $ 208,663 $ 209,040 $ 208,242
Primary Government
Investment in Capital Assets, Net of Related Debt $ 704,379 $ 688,927 $ 677,118 $ 640,325 $ 606,426
Restricted 79,183 79,612 78,992 101,791 107,087
Unrestricted 100,499 94,858 96,129 93,319 114,004
Total Primary Government Net Assets $ 884,061 $ 863,397 $ 852,239 $ 835,435 $ 827,517
CITY OF HUNTINGTON BEACH
CHANGES IN NET ASSETS -LAST TEN FISCAL YEARS
(In Thousands)
Expenses: Fiscal Year Ended September 30,
Governmental Activities: 2011 2010 2009 2008 2007
City Council $ 300 $ 301 $ 295 $ 295 $ 287
City Manager 1,502 1,674 1,861 1,652 1,442
City Treasurer 1,274 1,532 1,308 1,408 1,088
City Attorney 2,354 2,772 2,877 2,914 2,534
City Clerk 813 883 1,099 1,020 950
Administrative Services - - - - -
Finance 3,423 4,309 4,479 4,944 4,454
Human Resources 4,792 5,284 4,749 4,725 4,202
Planning&Building` 6,036 3,170 3,232 3,881 3,098
Building - 4,608 9,549 5,747 4,899
Fire 35,393 33,545 33,942 27,299 27,247
Information Services 5,909 6,812 7,377 7,311 6,591
Police 60,192 59,049 60,551 58,378 56,988
Economic Development 10,876 11,891 15,758 18,031 9,209
Community Services 16,104 16,147 17,110 18,565 16,482
Library Services 3,838 4,519 4,574 5,607 5,586
Public Works 27,232 26,483 29,514 31,246 34,581
Non-Departmental 19,595 24,303 21,196 30,814 15,131
Interest on Long-Term Debt 6,287 6,146 5,232 5,291 5,875
Total Governmental Activities 2055920 ' 2135428 ' 224,703 ® 229,128 ' 200,644
Business-type Activities:
Water Utility 31,712 34,902 34,290 32,701 32,606
Sewer Service 6,338 6,575 7,306 7,120 5,766
Refuse Collection 10,690 10,585 10,623 10,561 10,542
Emerald Cove Housing - - 306 893 936
Emergency Fire Medical - 6,933 5,347
Cultural Affairs - - - - -
Hazmat Service 243 315 196 249 194
Ocean View Estates - - - 117 84
Total Business Type Activities 48,983 52,377 52,721 58,574 55,475
Total Business and Government Type Activities $ 254,903 $ 265,805 $ 277,424 $ 287,702 $ 256,119
'Planning and Building departments were combined in fiscal year ended September 30,2011.
129
CITY OF HUNTINGTON BEACH
NET ASSET ASSETS BY COMPONENT-LAST TEN FISCAL YEARS
(In Thousands)
(continued)
Fiscal Year Ended September 30,
Governmental Activities 2006 2005 2004 2003 2002
Investment in Capital Assets, Net of Related Debt $ 472,372 $ 479,897 $ 448,217 $ 446,061 $ 425,967
Restricted 68,381 39,227 61,051 51,261 42,417
Unrestricted 34,269 40,226 (9,278) (12,924) (10,745)
Total Governmental Activities Net Assets $ 575,022 $ 559,350 $ 499,990 $ 4849398 $ 4579639
Business-Type Activities
Investment in Capital Assets, Net of Related Debt $ 111,651 $ 102,068 $ 92,890 $ 88,884 $ 79,781
Restricted 31,109 34,085 32,968 30,946 31,043
Unrestricted 53,020 41,563 33,664 25,671 23,236
Total Business-Type Activities Net Assets $ 195,780 $ 1779716 $ 1599522 $ 1459501 $ 1349060
Primary Government
Investment in Capital Assets, Net of Related Debt $ 584,023 $ 581,965 $ 541,107 $ 534,945 $ 505,748
Restricted 99,490 73,312 94,019 82,207 73,460
Unrestricted 87,289 81,789 24,386 12,747 12,491
Total Primary Government Net Assets $ 770,802 $ 7379066 $ 659,512 $ 6299899 $ 591,699
CITY OF HUNTINGTON BEACH
CHANGES IN NET ASSETS-LAST TEN FISCAL YEARS
(In Thousands)
(continued)
Expenses: Fiscal Year Ended September 30,
Governmental Activities: 2006 2005 2004 2003 2002
City Council $ 271 $ 254 $ 280 $ 267 $ 262
City Manager 5,540 1,990 1,188 1,587 2,214
City Treasurer 1,479 1,568 1,541 1,341 1,160
City Attorney 2,317 2,852 2,775 2,899 3,634
City Clerk 756 685 717 559 698
Administrative Services - 5,554 6,348 8,357 7,230
Finance 3,306 2,501 - - -
Human Resources - - - - -
Planning&Building' 2,813 2,559 2,396 3,633 2,658
Building 3,930 3,321 2,858 3,045 3,101
Fire 24,787 23,365 20,000 19,490 19,361
Information Services 7,361 6,806 6,423 4,401 4,464
Police 50,877 47,029 40,686 41,104 42,187
Economic Development 4,977 4,199 19,372 3,830 3,080
Community Services 15,777 13,693 15,735 9,989 12,440
Library Services 4,829 4,394 4,138 6,721 4,801
Public Works 49,654 33,018 30,277 25,386 28,237
Non-Departmental 11,263 12,024 4,054 25,604 19,725
Interest on Long-Term Debt 5,575 6,810 6,001 6,199 9,438
Total Governmental Activities 1959512 172,622 164,789 1649412 164,690
Business-type Activities:
Water Utility 28,117 22,349 24,643 24,943 27,250
Sewer Service 3,855 5,924 4,042 3,775 2,419
Refuse Collection 10,289 9,826 9,806 9,681 9,178
Emerald Cove Housing 551 399 409 401 405
Emergency Fire Medical 5,637 5,497 5,605 3,765 3,172
Cultural Affairs - - - - 317
Hazmat Service 163 141 204 150 143
Ocean View Estates 120 118 62 58 11
Total Business Type Activities 489732 449254 44,771 42,773 42,895
Total Business and Government Type Activities $ 244,244 $ 216,876 $ 209,560 $ 2079185 $ 2079585
Planning and Building departments were combined in fiscal year ended September 30,2011.
130
CITYOF HUNTINGTON BEACH
CHANGES IN NET ASSETS -LAST TEN FISCAL YEARS
(In Thousands)
(continued)
Revenues: Fiscal Year Ended September 30,
Governmental Activities: 2011 2010 2009 2008 2007
Charges for Services
City Council $ 63 $ 62 $ 94 $ 103 $ 99
City Manager 127 126 370 404 392
City Treasurer 568 566 765 720 698
City Attorney 127 456 50 47 46
City Clerk 98 106 108 168 210
Finance 1,202 1,234 1,264 1,354 1,312
Human Resources 1,117 1,103 1,254 1,391 1,347
Planning&Building* 6,084 682 801 1,987 4,223
Building - 4,126 3,665 4,582 5,450
Fire 8,632 8,504 7,978 1,423 1,267
Information Services 741 731 674 697 675
Police 5,207 4,849 5,083 5,159 4,890
Economic Development 2,800 2,685 3,049 3,001 2,944
Community Services 15,345 15,470 15,278 15,383 15,036
Library Services 325 415 437 851 835
Public Works 5,638 4,850 4,328 6,000 5,016
Non-Departmental 273 269 216 239 232
Total Charges for Services 48,347 46,234 45,414 43,509 44,672
Operating Grants 8,914 7,069 4,181 7,684 1,996
Capital Grants 5,198 7,418 25,625 14,284 5,154
Transfers (38) (38) 7,175 9,594 491
Total Governmental Activities Program Revenue 62,421 60,683 82,395 75,071 52,313
Business-Type Activities Program Revenue
Water Utility 34,583 34,394 34,200 35,751 37,962
Sewer Service 10,532 10,565 10,535 9,906 7,242
Refuse Collection 10,631 10,506 10,386 10,521 10,550
Emerald Cove Housing - - 843 1,180 1,037
Emergency Fire Medical - 6,762 6,068
Cultural Affairs _ _ _
Hazmat Service 383 198 204 185 210
Ocean View Estates - - - 337 324
Total Business Type Activities 56,129 55,663 56,168 64,642 63,393
Total Primary Government Program Revenue 118,550 116,346 138,563 139,713 115,706
Net(Expense)Revenue:
Governmental Activities: (143,499) (152,745) (142,308) (154,057) (148,331)
Business-Type Activities 7,146 3,286 3,447 6,068 7,918
Total Net(Expense)Revenue (136,353) (149,459) (138,861) (147,989) (140,413)
General Revenue and Other Changes in Net Assets
Governmental Activities:
Property Taxes 86,056 85,552 84,010 84,016 79,369
Sales Taxes 25,339 23,646 21,427 25,560 30,608
Utility Taxes 19,135 19,757 20,616 21,591 21,479
Other Taxes 13,368 11,629 12,085 15,065 13,776
Use of Money and Property 3,239 4,043 5,002 5,714 7,895
From Other Agencies 5,647 4,184 8,500 6,899 12,689
Participation Payments - 4,496 - - 1,564
Other 3,060 5,448 7,849 2,332 2,696
Total Governmental General Revenue 155,844 158,755 159,489 161,177 170,076
Business-Type Activities:
Transfers 38 38 (7,175) (9,594) (491)
Use of Money and Property 1,135 1,824 3,351 4,324 5,035
Total Business-Type Activities General Revenue 1,173 1,862 (3,824) (5,270) 4,544
Total General Revenue and Transfers 157,017 160,617 155,665 155,907 174,620
Changes in Net Assets-Governmental Activities 12,345 6,010 17,181 7,120 21,745
Changes in Net Assets-Business Activities 8,319 5,148 (377) 798 12,462
Net Assets-Beginning of Year 863,397 852,239 835,435 827,517 793,310
Net Assets-End of Year $ 884,061 $ 863,397 $ 852,239 $ 835,435 $ 827,517
*Planning and Building departments were combined in fiscal year ended September 30,2011.
131
City of Huntington Beach
CHANGES IN NET ASSETS-LAST TEN FISCAL YEARS
(In Thousands)
(continued)
• Revenues Fiscal Year Ended September 30,
Governmental Activities: 2006 2005 2004 2003 2002
Charges for Services
City Council $ 90 $ $ - $ $
City Administrator 1,612 33
City Treasurer 1,332 -
City Attorney 43 -
City Clerk 95 111 82 46
Finance 325 - - - -
Human Resources - - - - -
Planning&Building* 825 1,024 1,403 752 580
Building 4,859 5,068 4,513 3,067 3,940
Fire 1,086 1,095 1,183 1,157 500
Information Services 641 - - - -
Police 5,355 5,254 1,605 4,176 4,433
Economic Development 505 385 5 257 -
Community Services 14,644 13,376 12,611 9,433 8,510
Library Services 714 714 4,290 673 -
Public Works 4,784 1,781 4,220 3,356 1,103
Non-Departmental 229 - 589 5 4,411
Total Charges for Services 37,139 28,808 30,419 22,958 23,556
Operating Grants 917 1,657 6,343 1,736 5,063
Capital Grants 6,893 43,341 7,384 6,955 13,039
Transfers 464 4,884 - - (244)
Total Governmental Activities Program Revenue 45,413 78,690 44,146 31,649 41,414
Business Type Activities Program Revenue
Water Utility 37,946 40,371 40,172 37,943 59,103
Sewer Service 7,873 8,512 6,373 5,876 4,540
Refuse Collection 10,292 9,985 10,412 9,123 9,182
Emerald Cove Housing 960 866 781 746 707
Emergency Fire Medical 6,145 5,725 5,650 4,103 4,103
Cultural Affairs - - - - 189
Hazmat Service 182 110 187 233 145
Ocean View Estates 273 263 258 245 192
Total Business Type Activities 63,671 65,832 63,833 58,269 78,161
Total Primary Government Program Revenue 109,084 144,522 107,979 89,918 119,575
Net(Expense)Revenue:
Governmental Activities: (150,099) (93,932) (120,643) (132,763) (123,276)
Business-Type Activities 14,939 21,578 19,062 15,496 35,266
Total Net(Expense)Revenue (135,160) (72,354) (101,581) (117,267) (88,010)
General Revenue and Other Changes in Net Assets
Governmental Activities:
Property Taxes 66,598 61,466 47,405 40,633 38,106
Sales Taxes 26,448 24,340 28,273 28,011 -
Utility Taxes 21,170 20,004 19,424 18,310 -
Other Taxes 13,226 14,952 11,365 13,337 55,084
Use of Money and Property 4,310 3,137 3,528 9,923 13,895
From Other Agencies 10,390 8,186 14,406 16,414 20,359
Participation Payments 6,221 12,697 - - -
Other 9,278 8,510 7,328 5,491 2,604
Total Governmental General Revenue 157,641 153,292 131,729 132,119 130,048
Business-Type Activities:
Transfers (464) (4,884) - - 244
Use of Money and Property 3,589 1,500 1,085 1,482 2,240
Total Business-Type Activities General Revenue 3,125 (3,384) 1,085 1,482 2,484
Total General Revenue and Transfers 160,766 149,908 132,814 133,601 132,532
Changes in Net Assets-Governmental Activities 7,542 59,360 11,086 (644) 6,772
Changes in Net Assets-Business Activities 18,064 18,194 20,147 16,978 37,750
Net Assets-Beginning of Year 745,196 659,512 628,279 613,565 563,111
Net Assets-End of Year $ 770,802 $ 737,066 $ 659,512 $ 629,899 $ 607,633
*Planning and Building departments were combined in fiscal year ended September 30, 2011.
132
40
CITY OF HUNTINGTON BEACH
FUND BALANCES-GOVERNMENTAL FUNDS-LAST TEN FISCAL YEARS
(In Thousands)
(Modified Accrual Basis of Accounting)
Fiscal Year Ended September 30,
2011 2010 2009(c) 2008
General Fund: General Fund:
Nonspendable $ 10,841 $ 4,605 $ 4,834 Reserved $ 10,967
Restricted 1,304 1,452 1,921 Unreserved 33,476
Committed - 30,493 20,600 Total General Fund $ 44,443
Assigned 42,411 4,802 11,733
Total General Fund $ 54,556 $ 41,352 $ 39,088
Other Governmental Funds: Other Governmental Funds:
Nonspendable $ - $ 6,576 $ 11,328 Reserved $ 35,445
Restricted 32,519 33,319 11,509 Unreserved, Reported in:
Committed 4,049 1,755 7,545 Special Revenue Funds 11,307
Assigned 1,711 3,914 24,437 Debt Service Funds 5,467
Unassigned (4,377) (4,319) (1,557) Capital Projects Funds 15,316
Total Other Governmental Funds $ 33,902 $ 41,245 $ 53,262 Total Other Governmental Funds $ 67,535
Fiscal Year Ended September 30,
2007 2006 2005 2004 2003(b) 2002(a)
General Fund:
Reserved $ 10,679 $ 7,382 $ 5,915 $ 2,113 $ 2,757 $ 25,773
Unreserved 33,017 33,204 32,371 24,219 12,217 15,972
Total General Fund $ 43,696 $ 40,586 $ 38,286 $ 26,332 $ 14,974 $ 41,745
Other Governmental Funds:
Reserved $ 42,013 $ 25,472 $ 35,458 $ 30,143 $ 35,470 $ 45,259
Unreserved, Reported in:
Special Revenue Funds 13,500 20,631 17,833 11,810 10,399 7,967
Debt Service Funds 5,484 4,022 3,916 4,434 10,992 (33,364)
Capital Projects Funds 18,286 27,096 16,820 10,242 8,553 8,637
Total Other Governmental Funds $ 79,283 $ 77,221 $ 74,027 $ 56,629 $ 65,414 $ 28,499
Notes:
(a)Beginning with fiscal year 2001/2002,the City implemented the new reporting model which changed the way in which interfund
advances were reported and resulted in a larger negative fund balance in the Redevelopment Agency Debt Service fund
(b)In fiscal year 2002-2003 the City changed accounting for interfund advances and eliminated the advances to/from in each fund.
This results in a smaller reserved fund balance in the General Fund and eliminates the deficit in the Redevelopment Agency Debt Service Fund
(c)The City implemented GASB statement No. 54 in the fiscal year ended September 30, 2009.
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134
CITY OF HUNTINGTON BEACH
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS-LAST TEN FISCAL YEARS
(In Thousands)
(Modified Accrual Basis of Accounting)
Fiscal Year Ended September 30,
2011 2010 2009 2008 2007
REVENUES:
Property Taxes $ 85,869 $ 85,072 $ 85,612 $ 82,138 $ 75,916
Sales Taxes 25,034 22,582 22,356 26,377 26,271
Utility Taxes 19,135 19,757 20,616 21,591 21,479
Other Taxes 13,368 11,629 12,085 15,065 13,776
Licenses and Permits 6,728 6,204 5,879 7,924 10,131
Fines and Forfeitures 4,334 3,965 4,144 4,060 4,165
From Use of Money and Property 15,660 16,330 17,285 18,221 19,796
From Other Agencies 17,659 19,893 21,152 19,231 19,304
Charges for Current Service/Other Revenue 26,996 26,401 24,894 20,645 23,270
TOTAL REVENUES 214,783 211,833 214,023 215,252 214,108
EXPENDITURES
Current:
City Council 300 301 295 295 287
City Manager 1,493 1,652 1,839 1,588 1,490
City Treasurer 1,274 1,532 1,308 1,357 1,060
City Attorney 2,354 2,772 2,877 2,881 2,526
City Clerk 798 868 1,084 992 932
Administrative Services - - - - -
Finance" 3,423 4,286 4,456 4,792 4,400
Human Resources 6,106 5,284 4,749 4,725 4,202
Planning& Building" 6,034 3,170 3,232 3,859 3,092
Building - 3,449 4,176 3,957 4,670
Fire 34,546 32,816 33,596 27,146 26,438
Information Systems 5,879 6,782 7,339 6,741 6,437
Police 59,546 58,566 59,686 56,535 55,461
Economic Development 13,784 14,704 11,086 16,228 8,292
Community Services 13,724 14,501 15,407 15,666 14,744
Library Services 3,546 4,158 4,336 4,962 5,097
Public Works 19,006 20,466 22,143 23,528 25,248
Non-Departmental 14,914 14,832 16,710 21,519 12,977
Capital Outlay 6,872 17,175 38,494 21,525 16,142
Debt Service:
Principal 9,446 7,351 11,480 8,234 10,453
Interest 6,397 6,368 5,383 5,345 5,514
TOTAL EXPENDITURES 209,442 221,033 249,676 231,875 209,462
EXCESS(DEFICIENCY)OF
REVENUES OVER(UNDER)
EXPENDITURES 5,341 (9,200) (35,653) (16,623) 4,646
OTHER FINANCING SOURCES(USES):
Transfers In 27,385 20,850 27,125 24,278 16,313
Reclassification of Interfund Advances - - - - -
Proceeds of Long-Term Debt 36,275 14,745 8,850 35
Issuance Premium 1,884 707 - -
Capital Assets Reclassication for Changes in - - -
Payments to Escrow (37,601) (15,967) - - -
Transfers Out (27,423) (20,888) (19,950) (18,656) (15,822)
TOTAL OTHER FINANCING SOURCES(USES 520 (553) 16,025 5,622 526
INCREASE(DECREASE)IN FUND BALANCES $ 5,861 $ (9,753) $ (19,628) $ (11,001) $ 5,172
DEBT SERVICE AS A PERCENTAGE OF
NON-CAPITAL EXPENDITURES 7.8% 7.2% 8.7% 6.9% 9.0%
Finance was originally included with Administrative Services
"Planning and Building departments were combined in fiscal year ended September 30, 2011.
135
Fiscal Year Ended September 30,
2006 2005(a) 2004 2003 2002
$ 69,065 $ 59,716 $ 43,501 $ 38,983 $ 33,204
26,448 24,340 28,273 28,011 23,449
21,170 20,004 19,424 18,310 18,014
13,226 13,068 11,365 13,337 13,621
7,432 7,457 7,736 8,045 7,162
4,288 4,365 4,342 3,815 3,797
16,461 12,733 11,856 9,923 13,895
16,611 20,179 26,321 25,103 28,426
27,237 33,950 17,553 14,140 15,201
201,938 195,812 170,371 159,667 156,769
271 254 280 269 237
5,508 1,917 1,165 1,559 2,109
1,446 1,547 1,519 1,377 1,108
2,313 2,848 2,771 2,836 3,570
828 679 712 555 676
- 5,731 6,295 8,323 7,095
3,283 2,501 - - -
2,800 2,548 2,382 2,544 2,585
3,729 3,291 2,938 3,043 2,991
24,334 22,365 19,018 19,021 18,024
6,540 5,726 5,315 3,619 3,500
50,151 45,778 39,414 41,184 37,990
4,172 2,866 5,132 3,616 3,073
14,382 12,321 11,718 10,182 11,065
4,359 3,969 3,745 4,215 4,350
28,448 21,535 16,756 19,832 21,565
13,831 13,039 23,809 31,236 13,407
30,174 9,065 29,484 24,217 54,356
9,406 8,474 8,718 7,427 5,541
6,512 5,999 5,987 6,273 7,152
212,487 172,453 187,158 191,328 200,394
(10,549) 23,359 (16,787) (31,661) (43,625)
21,531 20,890 30,274 54,463 58,948
- - - 16,018 -
15,579 1,102 13,236 24,582 61,514
(1,743) -
- - (52,673)
(20,075) (16,006) (24,148) (57,096) (59,818)
17,035 5,986 19,362 36,224 7,971
$ 6,486 $ 29,345 $ 2,575 $ 4,563 $ (35,654)
9.6% 9.7% 10.3% 8.9% 9.5%
136
CITY OF HUNTINGTON BEACH
ASSESSED AND ACTUAL VALUATION
OF ALL TAXABLE PROPERTY(EXCLUDING REDEVELOPMENT AGENCY)
LAST TEN FISCAL YEARS
(In Thousands)
Common Total Assessed Total Direct
Fiscal Year Property Public Utilities Total Secured Unsecured Valuation Tax Rate
2001-2002 $ 16,081,760 $ 2,449 $ 16,084,209 $ 699,307 $ 16,783,516 1.01902
2002-2003 17,949,445 2,428 17,951,873 820,219 18,772,092 1.02571
2003-2004 17,987,861 2,876 17,990,737 911,027 18,901,764 1.06575
2004-2005 19,532,238 3,524 19,535,762 877,078 20,412,840 1.06575
2005-2006 20,925,190 1,522 20,926,712 790,513 21,717,225 1.06487
2006-2007 22,817,616 1,458 22,819,074 962,198 23,781,272 1.06487
2007-2008 24,294,404 305 24,294,709 1,066,668 25,361,377 1.07024
2008-2009 25,062,579 263 25,062,842 1,039,636 26,102,478 1.06855
2009-2010 25,324,857 263 25,325,120 1,086,770 26,411,890 1.08082
2010-2011 25,513,584 70 25,513,654 1,090,869 26,604,523 1.08252
Source: County of Orange Auditor Controller
PROPERTY TAX RATES
ALL DIRECT AND
OVERLAPPING GOVERNMENTS
TAX RATE 04-001
LARGEST AREA IN CITY
LAST TEN FISCAL YEARS
Metro Water Total Direct
Fiscal Year Basic Levy City School Districts District Others Total Rate(1),(2)
2001-2002 1.00000 - 0.00770 1.00770 0.15300
2002-2003 1.00000 - 0.01232 0.00670 - 1.01902 0.15300
2003-2004 1.00000 0.00696 0.01214 0.00610 0.00051 1.02571 0.15300
2004-2005 1.00000 0.00696 0.02850 0.00520 0.02509 1.06575 0.15300
2005-2006 1.00000 0.00696 0.03814 0.00520 0.01545 1.06575 0.15300
2006-2007 1.00000 0.00700 0.03718 0.00470 0.01599 1.06487 0.15600
2007-2008 1.00000 0.00800 0.04273 0.00450 0.01501 1.07024 0.15600
2008-2009 1.00000 0.00900 0.04053 0.00430 0.01472 1.06855 0.15600
2009-2010 1.00000 0.01500 0.04479 0.00430 0.01673 1.08082 0.15600
2010-2011 1.00000 0.01500 0.04632 0.00370 0.01750 1.08252 0.15600
Note: Rates are per$100 of assessed valuation
Source: County of Orange Auditor Controller
(1)Excludes ratesassociated with Mello-Roos Districts
(2)In 1978, California voters passed Proposition 13 which sets the propertytax rate at a 1%fixed amount. This 1%is shared by all
taxing agencies forwhich the subject property resides. In 1986,the State Constitution was amended to allow rates overthe 1%
base rate forvoterapproved general obligation debt. Valuations of real property are frozen at the value of the property in 1975,
with an allowable adjustment upto 2%peryear for inflation. However,property is assessed to its current value when a change of
ownership occurs. New construction,includingtenant improvements,is assessed at its current value.
137
CITY OF HUNTINGTON BEACH
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(In Thousands)
Collected within the Fiscal
Year of the Levy Total Collections
Delinquent Delinquent
Percentage Tax Percentage Taxes Delinquency
Fiscal Year Total Levy Amount of Levy Collections* Amount of Levy Receivable Percent
Secured Taxes
2001-2002 $ 24,581 $ 24,238 98.6% $ $ 24,238 98.6% $ 343 1.4%
2002-2003 27,634 26,765 96.9% - 26,765 96.9% 507 1.8%
2003-2004 31,024 30,033 96.8% - 30,033 96.8% 441 1.4%
2004-2005 34,403 33,423 97.2% 434 33,857 98.4% 570 1.7%
2005-2006 36,556 35,318 96.6% 498 35,816 98.0% 795 2.2%
2006-2007 39,174 37,194 94.9% 622 37,816 96.5% 1,278 3.3%
2007-2008 42,269 40,001 94.6% 1,113 41,114 97.3% 1,734 4.1%
2008-2009 42,569 40,298 94.7% 1,789 42,087 98.9% 1,582 3.7%
2009-2010 43,892 36,992 84.3% 1,880 38,872 88.6% 1,038 2.4%
2010-2011 44,014 42,233 96.0% 1,339 43,572 99.0% 746 1.7%
Unsecured Taxes
2001-2002 1,419 1,366 96.3% - 1,366 96.3% 53 3.7%
2002-2003 1,467 1,343 91.5% - 1,343 91.5% 42 2.9%
2003-2004 1,507 1,382 91.7% - 1,382 91.7% 34 2.3%
2004-2005 1,606 1,474 91.8% 24 1,498 93.3% 40 2.5%
2005-2006 1,590 1,434 90.2% 23 1,457 91.6% 42 2.6%
2006-2007 1,842 1,600 86.9% 37 1,637 88.9% 150 8.1%
2007-2008 1,718 1,618 94.2% 60 1,678 97.7% 34 2.0%
2008-2009 1,783 1,606 90.1% 90 1,696 95.1% 49 2.7%
2009-2010 1,882 1,677 89.1% 44 1,721 91.4% 65 3.5%
2010-2011 1,940 1,739 89.6% 22 1,761 90.8% 75 3.9%
Reservoir Hill
2001-2002 188 184 97.9% - 184 97.9% 4 2.1%
2002-2003 192 189 98.4% - 189 98.4% 3 1.6%
2003-2004 191 190 99.5% - 190 99.5% 1 0.5%
2004-2005 - - 0.0% - - 0.0% 0.0%
2005-2006 - 0.0% - - 0.0% - 0.0%
2006-2007 - 0.0% - - 0.0% 0.0%
2007-2008 - 0.0% - - 0.0% - 0.0%
2008-2009 - 0.0% - - 0.0% - 0.0%
2009-2010 - 0.0% - - 0.0% - 0.0%
2010-2011 - - 0.0% - - 0.0% 0.0%
Community Facilities Districts
2001-2002 264 258 97.7% - 258 97.7% 6 2.3%
2002-2003 538 534 99.3% - 534 99.3% 1 0.2%
2003-2004 1,797 1,789 99.6% - 1,789 99.6% 2 0.1%
2004-2005 1,731 1,719 99.3% 4 1,723 99.5% 7 0.4%
2005-2006 4,085 4,069 99.6% 12 4,081 99.9% 11 0.3%
2006-2007 4,061 4,041 99.5% 22 4,063 100.0% 7 0.2%
2007-2008 4,106 4,085 99.5% 21 4,106 100.0% 9 0.2%
2008-2009 4,053 4,034 99.5% 12 4,046 99.8% 7 0.2%
2009-2010 3,937 3,925 99.7% 11 3,936 100.0% - 0.0%
2010-2011 3,850 3,838 99.7% - 3,838 99.7% 1 0.0%
Source:County of Orange Auditor Controller's Office
*Delinquency tax collections information not available prior to fiscal year 2004-2005
Note:The levy and tax year is for July 1st through June 30th and does not include the Redevelopment Agency
138
CITY OF HUNTINGTON BEACH
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(In Thousands)
Fiscal Year Ended September 30,
Long-Term Indebtedness 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Governmental Activities:
Judgement Obligation Bonds $ 5,179 $ 5,989 $ 6,774 $ 10,050 $ 10,795 $ 11,525 $ 12,245 $ 12,500 $ - $
Public Financing Authority:
1997 Leasehold Revenue Bond - 2,86D 2,945 3,025 3,690 4,330 4,940 5,515 6,070
2000 Lease Revenue Bond - 12,785 13,515 14,215 14,885 15,525 16,140 16,730 17,295
2001-a Lease Revenue Bond - 25,650 26,375 27,075 27,750 28,400 29,030 29,635 30,220 30,780
2001-b Lease Revenue Bond - 15,915 17,795 19,595 21,340 23,030 24,670 26,265 27,800 29,275
2010a Lease Revenue Bond 13,200 13,820 - - - - - - - -
2011a Lease Revenue Bond 36,275
Total Public Financing Authority 49,475 55,385 59,815 63,130 66,330 70,005 73,555 76,980 80,265 83,420
Civic Improvement Corporation:
Reservoir Hill Assessment Bonds 360 415
Total Civic Improvement Corporation 360 415
Redevelopment Agency:
1999 Tax Allocation Refunding Bonds 6,180 6,610 7,020 7,410 7,790 8,155 8,505 8,840 9,160 9,470
2002 Tax Allocation Refunding Bonds 13,525 14,470 15,380 16,250 17,095 17,910 18,700 19,465 20,215 20,900
Mayer Disposition and Development Agreement 5,803 6,153 6,503 6,810 7,101 8,197 10,083 10,730 10,549 11,280
Bella Terra OPA(Parking) 13,922 14,076 14,227 14,532 14,855 15,000 - - - -
CIM DDA(Parking$Infrastructure) 7,288 7,444 7,768
CIM DDA(Additional Parking) 435 440 421
Section 108 Loan RDA/Bowen Court 3,997 5,725 6,140 6,530 6,895 7,235 7,550 7,850 7,630 7,890
Total Redevelopment Agency 51,150 54,918 57,459 51,532 53,736 56,497 44,838 46,885 47,554 49,540
Other Long-Term Obligations:
Notes Payable _ _ _ _ _ _ 116 337 545 293
Energy Financing Loan _ _ _ _ _ _ _ _ _ 742
Capital Leases Payable 572 857 1,161 1,681 2,281 2,975 3,461 4,885 6,420 4,107
Property Tax Claims _ _ _ _ _ _ _ _ 22,138 _
PARS Payable 5,868 7,149 - - - - - - _ _
Section 108 Loan City 1,425
Total Other Long-Term Obligations 7,865 8,006 1,161 1,681 2,281 2,975 3,577 5,22 29,103 5,142
Total Long-Term Obligations-Governmental Activities $ 113,669 $ 124,298 $ 125,209 $ 126,393 $ 133,142 $ 141,002 $ 134,215 $ 141,587 $ 157,282 $ 138517
Long-Term Obligations-Business Activities:
Leases Payable $ - $ 3 $ 6 $ 9 $ 12 $ 40 $ 112 $ 183 $ 250 $ 595
Total Long Term Obligations-Governmental Activities
and Business Activities $ 113,669 $ 124,301 $ 125,215 $ 126,402 $ 133,154 $ 141,042 $ 134,327 $ 141,770 $ 157,532 $ 139,112
2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
Population' 190,377 203,484 202,480 201,993 202,250 201,000 200,023 198,996 197,263 194,889
Debt Per-Capita $ 597 $ 611 $ 578 $ 712 $ 619 $ 623 $ 705 $ 675 $ 719 $ 695
Total Personal Income(In Thousands)" $7,356,548 $8,440,720 $8,207,324 $8,000,943 $7,626,443 $7,436,799 $ 7,284,238 $7,246,837 $ 7,456,541
Per-Capita Personal Income- $ 38,642 $ 41,481 $ 40,534 $ 39,610 $ 37,708 $ 36,999 $ 36,417 $ 36,417 $ 37,800
Unemployment Rate"` 7.40% 7.80% 7.90% 4.70% 3.40% 2.70% 3.00% 3.20% 3.80% 4.00%
Total Employment" 110,600 112,100 114,100 119,300 121,100 121,400 119,600 117,200 114,400 112,600
Source:
`State of Califomia Department of Finance.FY 10/11 population decrease primarily attributed to the US Census adjustment
Claritas,Inc.
State of California Employee Development Department
NOTE:
Information on personal income is not readily available for year 2002 and earlier. Until Data is readily available,only available years will be presented.
139
CITY OF HUNTINGTON BEACH
TOP TEN PROPERTY TAXPAYERS
CURRENT YEAR AND TEN YEARS AGO
2010-2011
Revenue Percent
(In Thousands) of Total
Bella Terra Associates LLC $ 2,656 3.09%
CIM Huntington LLC 1,936 2.25%
Mayer Financial LP 1,810 2.11%
Mc Donnell Douglas 614 0.72%
NF Huntington Plaza 536 0.62%
Waterfront Construction 440 0.51%
Essex Huntington Breakers 324 0.38%
Pierside Pavilion LLC 301 0.35%
Atlanta Huntington Beach LLC 300 0.35%
BTDJM Phase II 234 0.27%
Total Top Ten 9,151 10.66%
All Other Properties 76,718 89.34%
City Total $ 85,869 100.00%
2001-2002
Revenue Percent
(In Thousands) of Total
Duke Solutions Huntington $ 627 1.89%
Huntington Center 346 1.04%
Waterfront Construction 328 0.99%
Essex Huntington Breakers 253 0.76%
Kyray LLC 206 0.62%
Atlanta HB, LLC 206 0.62%
LIU Corporation 170 0.51%
AES Huntington Beach LLC 158 0.48%
McDonnel Douglas Corporation 143 0.43%
Bentall US Partners 104 0.31%
Total Top Ten 2,541 7.65%
All Other Properties 30,663 92.35%
City Total $ 33,204 100.00%
Source: HdL Coren&Cone
Note:Information provided if for the period from July 1st through June 30th
140
CITY OF HUNTINGTON BEACH
LEGAL DEBT MARGIN
LAST TEN FISCAL YEARS
(In Thousands)
Debt Limit-12%
Assessed of Assessed Debt Applicable Legal Debt
Valuation Valuation to Limit Margin
2001-2002 $ 16,783,516 $ 2,014,022 - $ 2,014,022
2002-2003 18,772,092 2,252,651 - 2,252,651
2003-2004 18,901,764 2,268,212 - 2,268,212
2004-2005 20,412,840 2,449,541 - 2,449,541
2005-2006 21,717,225 2,606,067 - 2,606,067
2006-2007 23,781,272 2,853,753 - 2,853,753
2007-2008 25,361,377 3,043,365 - 3,043,365
2008-2009 26,102,478 3,132,297 - 3,132,297
2009-2010 26,411,890 3,169,427 - 3,169,427
2010-2011 26,604,523 3,192,543 - 3,192,543
PRINCIPAL PRIVATE EMPLOYERS
CURRENT YEAR AND SIX YEARS AGO
2011 %of total
Boeing 4,609 4.17%
Quiksilwr 1,230 1.11%
Cambro MFG Co. 951 0.86%
Hyatt Regency Huntington Beach 641 0.58%
C& D Aerospace 555 0.50%
Huntington Beach Hospital 503 0.45%
Rainbow Disposal 408 0.37%
Huntington Beach Healthcare 381 0.34%
Waterfront Hilton Beach Resort 343 0.31%
Clewland Golf/Srixon 280 0.25%
Total of top 10 9,901 8.95%
all others 100,699 91.05%
Total employment(public and private) 110,600 100.00%
2005 %of total
Boeing 4,282 3.58%
Quiksilwr 1,550 1.30%
Cambro Manufacturing 886 0.74%
Dynamic Cooking Systems 706 0.59%
Triad Financial 637 0.53%
Verizon 556 0.46%
E-Trade Mortgage 554 0.46%
C& D Aerospace 554 0.46%
Huntington Beach Hospital 513 0.43%
Rainbow Disposal 408 0.34%
Total of top 10 10,646 8.90%
all others 108,954 91.10%
Total employment(public and private) 119,600 100.00%
Source- Economic Dewlopment Department, City of Huntington Beach
Note: Information on the principal private employers in not readily available for fiscal year
ending September 2004 and earlier. Until data is readily available, only the available
years will be presented.
141
CITY OF HUNTINGTON BEACH
FULL-TIME ACTUAL AND BUDGETED CITY EMPLOYEES BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Actual Budgeted
General Government: 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002
City Council 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
City Administrator 7.00 6.00 9.00 9.00 8.00 7.00 8.00 8.00 34.00 35.00
City Treasurer 1.50 10.00 10.00 10.00 10.00 10.00 16.00 16.00 16.00 16.00
City Attorney 11.00 17.00 18.00 18.00 18.00 17.00 17.00 15.00 15.00 15.00
City Clerk 4.00 8.00 8.00 8.00 7.50 7.50 7.50 7.50 7.50 7.50
Finance 29.50 32.00 33.00 33.00 33.00 31.00 22.00 18.00 20.00 20.00
Human Resources 15.00 20.50 20.50 20.50 20.00 22.00 21.00 22.00 - -
Planning 43.75 26.00 28.00 28.00 28.00 28.00 26.50 25.00 26.00 26.00
Building* 25.75 30.50 31.50 31.50 31.50 29.50 27.50 27.50 27.50
Information Systems 29.50 39.00 40.00 39.00 38.00 37.00 36.00 37.00 18.50 17.25
Economic Development 11.50 14.00 14.00 14.00 13.00 13.00 14.00 14.00 15.00 15.00
Library Services 29.75 32.25 37.25 37.25 37.25 37.25 37.25 37.25 37.25 37.25
Fire 176.50 176.00 185.00 185.00 184.00 157.00 156.00 155.00 156.00 156.00
Police 367.00 355.00 381.00 381.00 376.00 371.50 371.00 367.00 369.00 369.00
Community Services 61.00 65.75 69.75 69.75 69.75 66.50 62.25 63.25 63.25 63.25
Public Works 203.00 227.00 258.00 258.00 255.00 247.00 239.00 235.00 231.00 231.00
991.00 1,055.25 1,143.00 1,143.00 1,130.00 1,084.25 1,064.00 1,048.50 1,037.00 1,036.75
Source:Finance Department,City of Huntington Beach
Note:Actual full-time city employees by function/program data available only for fiscal year ended September 30,2010.
Budgeted full-time employees provided for remaining years.
'Building and Planning reported as a combined figure for fiscal year ended September 30,2011.
142
CITY OF HUNTINGTON BEACH
OPERATING INDICATORS BY FUNCTION/ACTIVITY
LAST SEVEN FISCAL YEARS
Function/Program 2011 2010 2009 2008 2007 2006 2005
Finance:
Water Bills Processed 630,268 640,351 641,602 642,883 630,228 626,903 586,000
Business Licenses Issued 21,903 21,045 20,841 21,129 20,670 19,746 20,184
Accounts Receivable Billings Processed 42,968 37,146 31,894 26,263 21,352 22,453 22,768
City Clerk:
Passports Issued 3,082 3,251 3,186 4,386 5,687 3,416 3,672
Planning:
Entitlements Processed 195 353 465 674 504 566 523
Plan Reviews 1,524 2,216 1,447 1,941 1,456 2,105 2,296
Field Inspection Complaints 6,064 8,187 9,345 7,932 5,273 5,926 5,550
Code Violation Cases 2,521 3,315 3,876 3,385 2,231 3,580 3,906
Building:
#of Permits Issued 8,413 8,037 8,114 9,254 4,355 11,210 12,082
#of Inspections Completed 29,905 29,792 33,734 40,510 42,181 43,905 49,737
Value of Construction Permits(Thousands of Dollars) 104,238 91,049 72,727 123,843 141,277 196,453 169,570
Processed#of Certificate of Occupancies 765 796 484 540 590 307 683
Automated Information Requests n/a n/a n/a n/a 78,243 77,006 78,868
Counter Visits 20,288 20,272 19,149 18,775 n/a n/a n/a
Fire:
Inspections 7,858 7,450 6,375 6,203 4,900 4,300 4,100
Responses 15,940 15,629 14,130 13,879 12,400 12,100 12,100
Police:
Physical Arrests 6,457 5,695 6,380 6,930 5,576 6,368 5,282
Parking Violations 77,261 74,115 55,840 67,270 123,096 68,712 112,698
Traffic Violations 16,770 22,660 19,433 18,882 19,859 22,755 25,902
Community Services:
Acreage of Parks 998 1,003 999 1,001 999 999 998
Estimated Beach Visitors 7,840,968 8,208,477 9,922,165 10,452,461 10,363,719 10,085,358 8,727,369
Enrollment in Recreation Classes 32,565 31,743 32,906 35,537 34,932 25,447 22,346
Ocean Recues 3,845 2,822 6,047 n/a n/a n/a n/a
Public Works:
Water Sold(Acre Feet) 26,868 27,268 30,537 30,518 31,128 29,246 29,730
Gallons of Sewage Pumped Per Day 22 million 22 million 23 million 23 million 23 million 23 million 23 million
Library:
Items in Collection 427,707 437,603 440,578 438,467 431,304 437,472 441,523
Items Borrowed 943,695 1,009,634 944,492 879,225 826,921 823,116 931,347
Source:Various departments of the City of Huntington Beach
CAPITAL ASSET STATISTICS BY FUNCTION/ACTIVITY
SEPTEMBER 30,2011
Library Services One Main Library and Four Branches
Fire:
Fire Stations 8
Police:
Stations One Main Station and Three Substations
Community Services:
Acreage of Parks 998
Community Centers 6
Miles of Beach Maintained 3.5
Public Works:
Centerline Square Miles of Streets Maintained 443
Miles of Storm Drains Maintained 118
Miles of Sewer Maintained 360
Source:Various departments of the City of Huntington Beach
143
CITY OF HUNTINGTON BEACH
STATEMENT OF DIRECT AND
OVERLAPPING BONDED DEBT
SEPTEMBER 30,2011
2010-11 Assessed Valuation$26,675,158,861 (after deducting$1,769,142,738 of incremental redevelopment valuation)
Debt Repaid with Property Taxes(Tax and Assessment Debt):
Percent Debt Applicable
Overlapping Tax and Assessment Debt Applicable (1) to City
Metropolitan Water District 1.4920% $ 3,359,745
Coast Community College District 30.1890% 95,941,809
Huntington Beach Union High School District 77.6450% 175,928,039
Huntington Beach City School District 97.1950% 24,458,113
Westminster School District 41.6320% 14,044,839
Los Alamitos Unified School District School Facilities District No. 1 1.2680% 871,384
Los Alamitos Unified School District Comm Facilities Dist. 1990-1 1.1470% 82,699
City of Huntington Beach Community Facilities Districts 100.0000% 41,920,000
Total Overlapping Tax and Assessment Debt $ 356,606,628
Ratios to 2010-2011 Assessed Valuation
Total Ovedappng Tax asn Assessment Debt 1.25%
Direct and Overlapping General Fund Debt
Orange County General Fund Obligations $ 18,782,115
Orange County Pension Obligations 3,393,785
Orange County Board of Education Certifictes of Participation 1,356,790
MWDOC Facilities Corporation 1,022,730
North Orange County Regional Occupation Program Certificates of Participation 12,243
Coast Community College District Certificates of Participation 6,196,292
Huntington Beach Union High School District Certificates of Participation 46,327,736
Los Alamitos Unified School District Certificates of Participation 231,310
Fountain Valley School Districts Certificates of Participation 3,107,052
Huntington Beach City School District Certificates of Participation 16,581,467
Ocean View School District Certificates of Participation 6,377,683
Westminster School District Certificates of Participation 10,054,128
City of Huntington Judgement Obligation Bonds 5,179,000
City of Huntington Reporting Entity Beach General Fund Obligations: 49,475,000
Total Gross Direct and Overlapping General Fund Debt 168,097,331
Less Self Supporting Debt of MWDOC Water Facilities Corporation (1,022,730)
Total Net Direct and Overlapping General Fund Debt $ 167,074,601
Total Direct Debt $ 54,654,000
Total Gross Overlapping Debt 470,049,959
Total Net Overlapping Debt 469,027,229
Gross Combined Total Debt $ 524,703,959 (2)
Net Combined Total Debt 523,681,229
(1)Percentage of overlapping agency's assessed valuation located within boundaries of the City.
(2)Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds
and non-bonded capital lease obligations.
Ratios to Adjusted Assessed Valuations
Combined Direct Debt($54,654,000) 0.20%
Gross Combined Total Debt 1.97%
Net Combined Total Debt 1.96%
State School Building Aid Repayable $ -
Source: California Municipal Statistics and City of Huntington Beach Finance Department
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