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Home My WebLink AboutFinancial Statements/Reports - City 06/30/1991 to 01/21/199 . CA 93-3 a^ � CITY OF HUNTINGTON BEACH COUNCIL - ADMINISTRATOR COMMUNICATION HUNTINGTON BEACH ' TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: MICHAEL T. UBERUAGA, City Administrat 77 l.._ -SUBJECT: CITY FINANCIAL CONDITION CuUNC. DATE: JANUARY 21., 1993 Introduction: This report will give the City Council an overview of the current year budget along with future year budget planning activities. The report is presented with the following sections: I. Five Year Projections II . 1992/93 Revenue and Expense Projections III . Reserves IV. Projections for Next Year' s Budget (1993/94) V. California State Budget VI. Conclusion I. FIVE YEAR PROJECTIONS City staff has been working since last July to prepare multi—year revenue and expense projections, as well as a 5—Year Capital Improvement Program and an implementation plan for Phase II, of the MSI Study. Attachments 1 and 2 are overviews of the process and schedule for these efforts. Attachment 3 is a preliminary 5—year revenue and expense projection that is currently being revised to take into account specific departmental input on the expenditure projections as well as the inclusion of "best case" and "worst. case" scenarios. It is suggested that a study session be scheduled in mid—March to review, these budget planning efforts. By that time we will have some additional data on the status of the State budget. This study session will be timely in terms of the review of the budget issues since we will , by that time, have conducted our preliminary budget reviews with departments for the 1993/94 budget. II . CITY REVENUE AND EXPENSE ESTIMATES — 1992/93 In September, the State adopted their budget which took $2.25 million of the City' s General Fund revenues to help balance the State budget. The City amended its budget to reduce expenses by $1 ,689,033 and utilize $564,667 of the projected budget surplus to absorb the $2.25 million revenue loss. Attachment 4 is the Quarterly Budget report which provides details of revisions to General Fund revenue and expense estimates since the adoption of the 1999/93 budget including the impact of the State take—away of City . revenue. General Fund revenues are currently projected to be $2.2 million short of estimated expenditures. This estimated General Fund shortfall is caused primarily by a continuation of the lethargic recovery from the economic recession in California and Orange County. In addition, some new revenues that the City had counted on have not materialized. For example, estimated Revenue from renting the City' s jail for INS detainees has been reduced from $600,000 to $90,000 for fiscal year 1992/93. • CA 93-3 CITY FINANCIAL CONDITI(�, General Fund expenditure reductions in the current year includes $3,061 ,544 in reductions approved so that we would have a balanced budget to start the year. In addition, current year expenses have been reduced as follows: Sept. 92 Budget Amendment: Expenditure Reductions $1 ,689,033 Hiring freeze: Estimated 1992/93 Savings $2,114,490 1992/93 expenditures are generally in control and an estimated savings of $2.1 million will occur due to the hiring freeze and normal vacancies. General Fund budget amendments for new expenditures totalling over $700,000 are partially offsetting our efforts to control and reduce expenditures. The $2.2 million estimated shortfall could be reduced by: 1 ) further expense reductions, 2) further charges to enterprise funds, 3) use of the General Fund reserve (see next section) , 4) new revenues, or 5) a combination of these approaches. The subject of the current year estimated shortfall will be scheduled for the February 16, 1992 City Council Meeting for a review of these options and consideration of a staff recommendation for reducing the shortfall . III. GENERAL FUND RESERVES The audited fund balance (reserve) for June 30 of 1992 was $3,414,000. In addition, the City has received a refund from the Public Employee' s Retirement System (PERS) totalling $6.7 million for a total General Fund reserve of $10. 1 million. If the current estimates of the 1992/93 shortfall are accurate and no action is taken, the $10. 1 million would be reduced to $7.9 million by July 1 , 1993. This represents a reserve of 8% to 10.2% depending upon the elimination of the current year shortfall . The City's adopted fiscal policies require a minimum General Fund reserve of 3% to 5% With the inclusion of the PERS refund, the City' s General Fund reserves are at an all time high. While this increases the City' s options and flexibility in terms of dealing with the current and future year budget shortfalls, it is easy to see that the healthy reserve could disappear quickly. Consider that during the 1992/93 fiscal year, the State took $2.25 million of our General Fund revenue. The State considered proposals that would have taken up to $9 million annually from the City' s General Fund. Governor Wilson' s 1993/94 budget that he presented the first week of January, 1993 proposes taking additional money from cities and counties, with the estimated impact on Huntington Beach being as much as $6 million per year additional General Fund revenue loss. IV. NEXT YEAR'S PROJECTIONS Staff' s preliminary projections of next year' s revenues and expenses indicate that there would be a $2.5 million General Fund shortfall unless revenues are increased or expenditures are reduced. This shortfall estimate assumes continuation of all current operations at the staffing levels established in this year' s budget but includes no assumption regarding salary increases after current MOU' s expire nor does it include any additional State take—away of City revenue. —2— WPADSERT: 1242 N . CA 93-3 CITY FINANCIAL CONDITIV Department Heads have been directed to reduce their requested expenditures so that there would be no shortfall compared to estimated revenues. While this appears to be the most prudent action to take, we must also be prepared to absorb additional reductions due to the California State budget problems. V. STATE BUDGET As reported in the League of California Cities bulletins and the media, Governor Wilson has presented a preliminary budget to the State Legislature which proposes to take money from cities to balance the State budget. Using estimates prepared last year on the same type of State proposals, the additional loss of property tax revenue to Huntington Beach could be as great as $6 million per year. It is to early to assume that the State action will result in any specific revenue loss for Huntington Beach. For instance, last year the proposals that were considered by the Legislature ranged in impact on Huntington Beach from $9 million to less than $1 million in annual revenue loss. The final adopted State budget took $2.25 million from the City. While a prolonged State budget battle is again likely, it is impossible to predict what the ultimate impact would be upon the City. One cautionary note, however, is that last year the Governor opposed Legislative proposals to take more than the $2.25 million that was eventually taken from the City of Huntington Beach. This year, with the Governor' s initial proposal being to take significantly more from cities, we will be facing an uphill battle. VII. CONCLUSION The continuing impact of the recession and its lethargic recovery, along with the State' s taking of City' s revenue to solve its budget problems, is further threatening the City' s finances. While the City has done an excellent job of absorbing the impact of the recession by reducing expenses and balancing its budget, the additional burden of helping balance the State' s budget is too much to handle without a significant reduction in service to the community or expansion of our General Fund revenue base. Efforts currently underway to balance the current and next year' s budget can only succeed if the State will stop reducing City revenues by its actions. Since 50% of the City' s expenditures are for public safety, further expense reductions that do not reduce public safety services will be difficult to implement. Following are planned activities in regards to the various budget issues: 1 . February 16, 1993 City Council Meeting - Review options and recommendation to reduce current year (1992/93) budget shortfall . 2. City Council Budget Study Session in March: A. Management Services Institute Study - Phase II B. Five Year Revenue and Expense Projections C. California State Budget Update D. City' s Infrastructure Needs E. Five Year Capital Improvement Plan F. Guidelines and Strategies - 1993/94 Budget Preparation -3- WPADSERT: 1242 City of Huntington Beach FIVE-YEAR FINANCIAL PLAN INPUT OUTPUT Five-year Budget Five- ear Y Revenue: &: Expense Fitancial Projections! plan ReVtew - Alternative Five year Cap tal Improvement Needs PIanS Five-year Operating Budget Projections Infrastructure Fwe- ear Ca v al Needs y p Improvement Program MSI Implementation Debt ManagernenJL Al ernatives Plan k ATTACHMENT 1 . I I...I...I....-.1-...�...- - 1.1- ........�.........-.........11.11, , . - - - �:�::-::�::::�::-.� ,.:� ::x� :�,.- . I - � -...�'-...- - .I.........1.1'.......%I...11-11.11, :-:., �. ,�� 1. -: ::: :.: :�:::�:,::,::, ".....'.. 1".., -.��-,...- ... ..".1,11 1,1,%.... :,,::::::::::::::,::::::::: .1...1.11,..... ''I'll, I . I -.11- 11 � . .... � .... .... 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Progress x-------x Study Session 0 - ' ---- Adoption # Milestone X I ' � F��T�AHMENT 2 ' 5YRBGT.XLS • ATTACHMENT 3 • 5 FEAR . REVENUE & EXPENDITURE PROJECTION S.0 . MARY GENERAL FUND I. CURRENT <-------------------------PROJECTED------------------------------> ATE RY `»>: 0 . . ..... 92193.: 93194 ......9:419:5 €> :> > ::>:9I9r::<>:>:::::' :«::::9697:<;:s;:. :.;. >.> 7198: >;... ............................................................................................................................................................................................................................................................................... ........................................................................................................................................................................ ...................................................................................................... ................................................................................................................................................................................................................................................................................ EXPENDITURES $94,661,190 $100,533,353 $107,350,661 $112,341,068 $117,717,003 $123,205,528 REVENUES 92,454,000 98,083,500 103,963,000 109,345,000 115,356,500 121,062,000 r :.. r is r r r : (2...143A28)r • ATTACHMENT 4 • CITY OF HUNTINGTON BEACH 17 INTER-DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: MICHAEL T. UBERUAGA, City Administrator FROM: ROBERT J. FRANZ, Deputy City Administrator SUBJECT: QUARTERLY BUDGET REPORT: 1992/93 DATE: JANUARY 19, 1993 f SUMMARY OF SIGNIFICANT ECONOMIC ISSUES The first half of the fiscal year 1992/93 was significant because of two major factors negatively affecting City revenues: 1 . The State of California took over $3 million of the City' s revenues ($2.25 million in the General Fund) . The General Fund loss is a permanent reduction in the City' s annual property tax revenue. 2. A Reduction of General Fund revenue estimates by $3.8 million due to a variety of factors including the continuation of a lethargic to non-existent recovery from the economic recession. 3. Additional expenditure authorizations (General Fund budget amendments) of over $700,000 have offset a portion of our estimated $2. 1 million expenditure savings due to the hiring freeze and normal vacancies . While action has been taken to reduce expenditures to absorb the impact of the State take-aways of City revenue, the $3.8 million reduction in revenue estimates is more difficult to absorb. Currently, we project General Fund expenditure savings of roughly $2.1 million this year which will help offset the revenue reduction. Unfortunately, approved General Fund budget amendments totalling about $700,000 will partially offset the projected expenditure savings. The result is a projected General Fund budget shortfall of $2.2 million that will occur unless General Fund expenditures are further reduced or economic conditions improve. Our General Fund reserve of $8 million (estimated) provides some safety for this type of shortfall , but the economic stagnation is cause for concern for this year' s budget and future years. REVENUE/EXPENSE SUMMARY 1992/93 Adopted Revision General Fund Due to Current Budget State Budget Estimates Revenue Estimates $ 98,490,200 $ 96,236,500 $ 92,454,500 Expense Estimates 97,771 ,399 96,082,346 94,661 , 190 Surplus/(Shortfall ) $ 718,821 $ 154,154 ($ 2,206,690) i I 1 , QUARTERLY BUDGET REPORT: 199� EXPLANATION OF CHANGES TO REVENUE ESTIMATES Our first quarter revenue has been revised downward by $341 ,000 to bring the total estimated revenue reduction to $6,035,700, including the impact of the State take-away of City revenues. The reduced General Fund revenue estimate is a combination of changes to budget estimates as summarized below: Change Adopted from General Fund 1992/93 First Quarter Mid Year Original Revenue Source Budget Estimate Estimate Estimate Property Tax $ 31 ,855,000 $ 28,417,000 28,578,000 $ -3,277,000 Sales Tax 17,500,000 16,500,000 16,500,000 -1 ,000,000 Other Local Taxes 4,814,000 4,303,000 4,308,000 - 506,000 Fines/Forfeitures 1 ,650,000 1 ,430,000 1 ,380,000 - 270,000 Use of Money & Property 6,289,000 5,517,000 5,328,000 - 961 ,000 Other Changes - 21 ,700 Net Revenue Estimate Reduction $ -6.035 M EXPLANATION OF CHANGES: Property Tax (- $3,277,000) The State took $2,081 ,000 of our current year property tax revenue to balance the State budget. Orange County will take an estimated $300,000 for "administration costs" . The Orange County Assessor' s Office submitted actual assessed valuation and property tax levy data in August and September. The original budget estimate was based on projections prepared in April of this year. Our April estimate was 1 .8% too high resulting in a $600,000 reduction in the estimate for 1992/93. The balance of the reduction in the 1992/93 estimate is due to Orange County changing their method of estimating supplemental and other tax revenues. Sales Tax (- $ 1 ,000,000) The revised estimate reflects a continuation of the non-existent recovery from the recession and is based on our sales tax consultant' s review and input. It reflects a conservative outlook on Southern California/Orange County/Huntington Beach economic recovery. Other Local Taxes (-$506,000) The State is taking all of our cigarette tax revenue which was estimated to total $172,000 for fiscal year 1992/93. Current year estimated franchise fee revenue was over-estimated by $350,000 due to one time revenue received in 1991 /92. Fines Forfeitures (- $270,000) The State of California took 50% of our citation revenue last year to balance the State Budget, resulting in a continuing loss of an estimated $500,000 per year. In addition, courts are levying fewer fines. Estimated Parking citation revenue generated by parking tickets written by the Police Department has been decreased $100,000. -2- WPADSERT: 1177 QUARTERLY BUDGET REPORT: 1990 Use of Money and Property (- $961 ,000) Estimated interest earnings revenue has been reduced $250,000 because the State take-away of General Fund revenue and the reduction in overall General Fund revenue means we will have a lower amount (averaging over $4 million) invested in interest earning accounts. Estimated jail rental revenue has been reduced $510,000 due to the Federal Government' s drastic reduction in referring INS detainees to our jail facility. The current inoperative status of the City' s three Civic Center oil wells has prompted a $125,000 reduction in the estimated revenue from the wells. Other Changes ($21 ,700) Parking lot, parking meter and recreation program revenues are higher than original projections, but are offset by numerous minor reductions in other revenue estimates. EXPENDITURES Current estimates for fiscal year 1992/93 are that General Fund expenses will be $2. 1 million less than budget authorizations. This reflects the estimated cost savings from the hiring freeze, normal vacancies, and control of expenditures by departments. Although departments are controlling costs better then the trend data of the first quarter, General Fund budget amendments authorizing new expenses of about $700,000 have offset the improved controls. See Attachment 2 for more detail on expenses. Current projections of total fiscal year expenditures for overtime and temporary salary expenditures use the first six months actual expenses to project totals for the fiscal year. Several one time events, including the Pier opening, resulted in unusually high first quarter expenses in these categories. RESERVES The estimate of our General Fund reserve (fund balance) for the end of the current fiscal year is summarized in the following chart: Amount July 1 , 1992 Fund Balance (Audited) $ 3,414,000 Less 1992/93 Budget Shortfall (Current Estimate) -2,206,690 Sub Total $ 1 ,207,310 Litigated PERS Reserve 6,731 ,604 Estimated Fund Balance - June 30, 1993 $ 7.938.914 PERS Litigation Update In 1991 (eighteen months ago) the State budget included an action to transfer Public Retirement System (PERS) reserves to the State General Fund and to cities. This refund to the City will total an estimated $6.7 million. Lawsuits against the State, including appeals to the State Supreme Court, failed to -3- WPADSERT: 1177 QUARTERLY BUDGET REPORT: 1990 invalidate these transfers. Somewhat unexpectedly, the litigants filed an appeal in the U. S. Supreme Court. The court refused to hear the case, and this litigation is now final . The City may utilize these funds for any purpose approved by the City Council . CONCLUSION The recession' s impact has caused further reduction in City revenue estimates. While expenditures appear to be in control , cost cutting efforts need to be expanded and General Fund budget amendments must be controlled. Economic trends must be monitored closely. �08W J. WNZ Deputy City Administrator RJF:skd -4- I I 1� WPADSERT: 1177 i —Est/93 ATTACHMENT 1 1/21/93 IIARTERIJY>R . ....... <:::: . .;.:.:....:..:::.: . . :::...... i::`'."'1:::::`.::::::::::::.'.:::'..::::::":::i:%::::.y'::>::::y::.:::i::::::is:::::..............:`:'::::::::ii::::i::i::::::::':::::#";iii'ii::::i::i::iii:::::::::::::'::`':':: car er.. �x c ar . 1 311 ::: ::....... ....:::::::: <:>>..:::: C2 .... ...... .. THISNEAR EAST YEAR "< RECEIVED RECEIVED REVISED .i .. .. _. ADOPTED FIRST HALF PERCENT ...FIRST HALF- ESTIMATE:;' .............. ..... ............ __. ._.. . . . _ ._. ........_ ...... REVENUE; BUDGET 1992/93 RECEIVED.199fl92 1992/93 Property Tax $31,855,000 $12,806,609 40% $13,767,000 $28,578,000 Sales Tax 17,500,000 8,166,000 47% 8,080,000 16,500,000 Utility Tax 12,800,000 5,404,000 42% 5,153,000 12,800,000 Transient Occupancy Tax 1,200,000 564,000 47% 526,000 1,200,000 Other Local Taxes 4,814,000 1,555,000 32% 1,924,000 4,308,000 Licenses &Permits 31640,000 1,739,134 48% 1,814,605 3,496,000 Fines/Forfeitures &Penalties 1,650,000 496,902 30% 738,995 1,380,000 Use of Money &Property 6,289,000 2,741,769 44% 3,747,340 5,328,000 Revenue From Other Agencies 8,279,000 3,424,707 41% 4,188,730 8,212,000 Charges for Current Service 6,657,000 2,759,229 41% 2,761,869 6,694,000 Other Revenue 651,200 272,879 42% 313,000 598,000 Transfers from Other Funds 3,060,000 3,264,023 107% 1,696,096 3,360,000 TOTAL $98,395200 $43,1:94,252 44% $44,71j0,635 $92,454,000: 1� —Est/93 ATTACHMENT 2 1/21/93 ..... ART'ERLY EXPIDIT :: > :. 11Ir I ........... . ...... .. .................I II. ........:::.:::.:...........:: :. .:........:.::::::::::: . .> ..... . ,: .........:::::;:.:::...:........................................................................................................................................................................................................................................... ................................................................................................................................................................................................................................................................... I AL:: .. . _ ......... . 13:.............: :::::............:::..:......... .........................._. ::. a.....te....... d 1292/93* 1992/93 % 199.1/92 1992/93sEST. EXPENDITURES .APPROPRIATIONS 6>MO EXP EXP G.MO EXP. EXPENDITURE {LAST YR) Salaries/Benefits $64,287,391 $30,090,077 47% $28,507,465 $62,852,741 Overtime 3,931,600 2,124,861 54% 1,770,338 $4,335,723 Temporary Salaries 2,897,979 1,524,488 53% 1,542,268 $2,882,875 Operating Expenses 21,377,180 10,488,454 49% 9,883,110 $20,308,321 Transfers/Interest 4,281,530 3,108,877 73% 2,962,516 $4,281,530 Capital Outlay 0 0 0% 99,073 $0 Total $96,775 680 $47,33&J57 49% $44,764,770 $94,661,190.: Est�matied.%;to be ex ended 978/0 Pro ected Ex sense Sav�n s ' '> $2,114,490' * Includes the following approved budget amendments: DESCRIPTION AMOUNT Legal Counsel - Griffin $40,000 Legal Counsel -Bloom 150,000 Legal Counsel - Oil Spill 51,105 Operational Evaluation - Conununity Development Dept. 47,600 Criminal Apprehension Program 215,953 Reimbursement- CDBG Program 96,000 Police Motorcycle Radios 37,000 Conummications Maintenance Facility 55,000 $692,658 t� �F ..Y rr, 1 I 1 mc CLr ,, 1111t 's"I" O ►1' � 1 '1 1 ' 11 1.1 11h ti111 fit t ' $ ■m 11 fill � � ■� ��,ti �r` ,, �.y,•►I �1 .I, ill ■� ICI i �'. , �� M�vi l 1� i (1 ■� sit 4T. J. '.1, 1K% ■_ ••i.• LAM ,Iv1 • '� III Will y ;•y►• i 1c If v, t'; I t,► ' 0 ►, ,Y ; do fit' ''I ;��;�,, 11 "� O r 1 ' COMPREHENSIVE ANNUAL FINANCIAL REPORT CITY OF HUNTINGTON BEACH, CALIFORNIA FISCAL YEAR ENDED DONE 30, 1991 1 1 r r 1 ' PREPARED BY ADMINISTRATIVE SERVICES DEPARTMENT CITY OF HUNTINGTON BEACH 1 r r 1 r 1 r r CITY OF H mm=CI1 BEACH, all FUNM CCN�REHERSIVE ANNUAL FINANCIAL REPCEU ' Fiscal Year Ended June 30, 1991 ' Table of Contents IN SECTIM Page Number ' Table of Contents i-iii Letter of Transmittal iv-xiii Principal city Officials xiv ' Organizational Chart xv Financial Reporting Awards xvi ' FINANCIAL SECTICII Schedule Independent Auditors' Report General Purpose Financial Statements: ' Combined Balance Sheet - All Fund Types and Account Groups A-1 2 - 3 Combined Statement of Revenues, MWnditures and Changes in Fund Balances - All Governmental al Fund Types A-2 4 - 5 Combined Statement of Revenues, Egenditures and ' Changes in Fund Balances - Budget and Actual - General, Special Revenue and Debt Service Fuund Types A-3 6 - 8 Combined Statement of Revenues, Expenses and ' Changes in Retained Earnings - All Proprietary Fund Types and Similar 'Dust Funds A-4 9 Combined Statement of Cash Flows - ' All Proprietary Fund Types and Similar Trust Funds A-5 10 Notes to General Purpose Financial Statements 11-74 Combining Financial Statements and Schedules of Individual Funds and Account Gros: ' General Fund: Comparative Balance Sheet B-1 75 Statement of Revenues, Expenditures and ' Changes in Fund Balance - Budget and Actual B-2 76 _i_ Schedule Page Number Special Revenue Funds: Combining Balance Sheet C-1 77-78 Combining Statement of Revwmles, Eq*.nditures and Charges in Fund Balances C-2 79-80 Combining Statement of Revemies, Egxniditures and Changes in Fund Balances - Budget and Actual C-3 81-86 n Debt Service Funds: Combining Balance Sheet D-1 87-88 Combining Statement of Revenues, Expenditures and Changes in Fund Balances D-2 89-90 Combining Statement of Revenues, Fgenditures and Changes in Fund Balances - Budget and Actual D-3 91-97 Capital Projects Funds: Combining Balance Street E-1 98-99 -Y Combining Statement of Revenues, EgDenditures and Changes in Fund Balances E-2 100-101 Enterprise Funds: Ocinbining Balance Sheet F-1 102-103 Combining Statement of Revenues, E43enses and Changes in Retained Earnings F-2 104-105 Canbinirg Statement of Cash Floras F-3 106-107 Internal Service Funds: CImbining Balance Sheet G-1 108 Combining Statement of Revenues, Expenses and Changes in Retained Earnings G-2 109 Combining Statement of Cash Flows G-3 110 Ttust and Agency Funds: Combining Balance Sheet H-1 111 Agency Funds: Combining Statement of Changes in Assets and Liabilities H-2 112-114 Zest Funds: Oomparative Balance Sheet H-3 115 Statement of Revenues, Expenses and Changes in Fund Balance H-4 115 Statement of Cash Flows H-5 116 General Fixed Assets Account Group: Schedule of General Fixed Assets I-1 117 Schedule of General Fixed Assets by Function and Activity I-2 118 Schedule of Changes in General Fixed Assets by Function I-3 119 and Activity General L q-'Ilezm Debt Account Group: Schedule of Changes in General Lon g-Ilerm Debt J-1 120 -ii- ' STATISTICAL SECTION Exhibit Page Number GoverrmmTtal F1uxi - Revenwes by Source- Last Ten Fiscal Years A 121-122 Fund - E4Dwdibwes by Function B 123-124 and Activity - Last Ten Fiscal Years Property Tax Levies and Collections - Last Ten Fiscal Years C 125 Assessed and Actual Value of All Taxable Property D 126 Property Tax Rates, All Overlapping Governwmts Last Ten Fiscal Years E 127 General Bonded Debt Ratios - Last Ten Fiscal Years F 128-129 Oomputation of Legal Debt Margin G 130 Computation of Direct and Overlapping Boarded Debt H 131 Water Revenue Bond Coverage - Last Ten Fiscal Years I 132 Demographic Statistics J 133 Construction Activity and Bank and Savings and Loan K 134 ' Deposits - Last Ten Fiscal Years Schedule of Insurance in Force L 135-136 Miscellaneous Statistics M 137 ' -iii- • 0 tj JA CITY OF HUNTINGTON BEACH Lo" 2000 MAIN STREET CALIFORNIA 92648 ADMINISTRATIVE SERVICES December 15, 1991 The Honorable Mayor and City Councilmembers ' City of Huntington Beach, California Mayor and Councilmembers: tWe are pleased to submit the Coapvhensive Annual Financial Report for the City of Huntington Beach for the fiscal year ending June 30, 1991. We believe that the data is an aerate summary of our City's financial position and results of operations. ' The Administrative Services Department is responsible for the accuracy of the information presented. We have included disclosures to improve your understanding of the financial condition of the City. ' The financial statements are prepared according the standards of the Government Accounting Standards Board and includes the report of our independent auditors, IqM Peat Marwick and Co►pany. The report is presented in three sections: , financial and statistical. The introductory section includes this tran-mittal, the City's organizational chart and a list of principal officials. The financial section includes the general purpose financial statements and the individual fund and account group financial statements as well as the auditors report an the financial statements. The ' statistical section includes selected financial and information, presented on a multi year basis. Huntington Beach is a full-service City including public safety, parks and recreation, beach services, library services, planning and zoning, public works and related admunistraticn. The City also provides water services to residents and businesses. This report includes the financial activity of certain separate legal ' entities whose activities are controlled by and/or related to the City. These entities are, the Redevelopment Ark.envy of the City of Huntington Beach (Redevelopment Agency) , the Beach Public Facilities Corporation (Public Facilities Corporation) , the Huntington Beach Public Financing Authority (Public Financing Authority) , the Huntington Beach Civic iMKg ant Corporation (Civic Improvenent Corporation) and the Parking Auth city of the City of Huntington Beach ' (Parking Authority) . These entities were included in the report because the City Council is responsible for their oversight and the entities are financially dependent on the City for all operations. Component unit financial reports have been prepared for the Public Facilities Corporation, the Redevelopment Agency and the Public Financing Authority. These reports show the financial activities of these entities on a "stand-alone" basis. Copies of these reports are available from this office. ' -iv- nocVMac 0CMITIoN AND CUTTIAM Huntington Beach is located anx-cx�mately 35 miles southeast of Los Angeles in Orange County. The economy of Orange County, like the rest of the nation, has been affected by the national. recession. We are hopeful that 1991-92 will spell the end of the recession and that economic growth will continue thereafter. Traffic problems and housing costs have also dampened job and economic growth of Huntington Beach and other cities in Orange County. We must continue to work with other local goveTrments, private industry and citizens groups to meet these challenges. Over the years the City has developed diverse and stable revenue sources including property tax, sales tax, utility tax and oil-related revenues. There was a reduction in City revenues, especially in sales tax and development fees in 1990/91. In June, 1991 the Council approved a utility tax on cable television which will add approximately $750,000 per year to City revenues. Measures were taken to contain expenditures during the year. A fee study by an independent consultant will help the City Council to determine alternate revenue possibilities. An independent budget task-force was formed in August, 1991 to help develop long-range financial strategies. 1r WM R=VW For the Year 1991 continued the rebirth of our downtown area. The City Council and staff are continually examining new ways to help Huntinqjton Beach remain as one of the best cities to live in the nation. Below is a summary of only some of the year's acccuplistments. .The Oakview Police Substation, which was financed with Oommmity Development Block Grant funds opened. This will help reduce crime and promote positive Police/Citizen relations. .Financing plans were finalized for the children's wing expansion to the Central Library which will give the children of Huntington Beach a wonderful resource with whichto learn and grow. .The 1914 landmark pier was demolished and construction of the new pier is well underway. The City's new pier should last for 100 years and will be a source of civic pride for all citizens of Huntington Beach and a resource for people from all over the world. The new pier is being funded by a combination of City resources, grants from federal and state agencies, and private fundraising. .Planning continued for development of the Bolsa Chica and Holly Seacliff areas which are the only remaining major undeveloped ass in the Huntington Beach "sphere-of-influence". The Bolsa Chica development, as proposed, will protect the wetlands in Bolsa Chica. Future actions will be scheduled to further consider this development proposal, including annexation proceedings. -v- 1 � r 1 For the Future Huntington Beach's future is one of economic promise and vitality. The City's 1 coastal location provides unique challenges in developing an ideal mix of tourism, light industry, residential and commercial development. This will require the efforts not only of local government but also of local businesses and citizens 1groups. Citizens of Huntington Beach demand and receive high quality municipal services. ' Over the past decade, the Federal government has passed on to state and local g� the responsibility for providing many services. Unfortunately, the Federal government has sharply cut back fuxb ng to state and local governments at the same time these increased responsibilities are required. Record State budget 1 deficits have also placed financial constraints on cities. ' I GOEM 335CF69MCK ' The City's financial statements are prepared on the modified accrual basis for all governmental fund types except for the financial statements of the proprietary fund types which are prepared on the accrual basis. The City's system of internal control has been carefully designed to protect City assets while ensuring that the ' cost of a particular control does not exceed its expected benefits. Budgeting Controls 1 The City Council adopts the annual budget and may amend or revise the budget at any time. Budgetary control is maintained at the departmental level. A department 1 head, with the Finance Director's approval can transfer funds within like object categories of the same department. The City Administrator can transfer funds from one object category to another without increasing the total budget of a fund. The City Administrator gust approve any changes to capital outlay requests. The City 1 utilizes an encumbrance system as a management control technique. Ehcumbrances represent orders for goods or services unfilled or services not yet performed. At year end these are reported as reservations of fund balance in governmental fund 1types. The Accounting Division of the Administrative Services Department is responsible for 1 maintaining the City's financial information and for preparing this report. Financial Summary 1 General g verimiental functions include the operations of the General, Special Revenue, Debt Service and Capital Projects Funds. Below is an analysis of general gel revenues with an explanation of significant fluctuations: i 1 1 1 -vi- (Dollar Amounts DWessed in 0=sands) Increase (Decrease) Percent from 1988/89 Revenue Source Amount of Total Anaunt Percent Property Taxes $33,697 27.9$ 3,237 10.6 Sales Taxers 16,875 14.0 (1,555) (8.4) Other Taxes 15,217 12.6 968 6.8 Licenses and Permits 3,629 3.0 (315) (8.0) Fines and Forfeitures 1,904 1.6 (352) (15.6) From Use of Money and Property 11,854 9.8 (2,286) (16.2) From Other Agencies 27,213 22.6 12,032 79.1 _ Charges for 0 ennt Service 8,341 6.9 1,074 14.8 Other 2,012 1.6 993 97.4 Total $12� 10� $13,796 12.9% Property taxes increased due to new construction and increased Redevelopment activity. sales tax and revenue from licenses and permits decreased due to the national recession. Revenue from fines and forfeitures decreased due to a change in state law concerning the distribution of traffic and general fines. Revenue from the use of money and property decreased due to lower interest rates. Revenue fraan other agencies increased largely to due the use of surplus funds from the City's retirement plan. Charges for current service increased mainly due to increased refuse fees. Other revenue increased due to property sales in the Redevelopment Agericy- Below is an analysis of general expenditures with an explanation of significant fluctuations: (Dollar Amounts Eqressed in 7hcusands) Increase (Decrease) .. Percent from 1988/89 Department Amount of Tbtal Amount Percent City Council 197 0.2% ($18) (8.4)% City Administrator 1,564 1.2 711 83.4 City Treasurer 700 0.5 262 59.8 City Attorney 1,340 1.0 32 2.4 City Clerk 457 0.4 127 38.5 Administrative services 4,187 3.3 352 9.2 o=mu ni.ty Development 3,032 2.4 261 9.4 F;conamic Development 2,274 1.8 (359) (13.6) Fire 14,169 11.0 21 .1 Police 28,148 21.9 1,779 6.7 CmmLmity and Library Services 9,127 7.1 820 9.9 Public Works 20,275 15.8 1,847 10.0 Non-Departmental 7,052 5.5 (903) (11.4) Capital Outlay 24,076 18.7 3,454 16.7 Debt Service 11,895 9.3 1,269 11.9 Total $12_493 10_0% $9i655 8.1% -vii- City Council expenditures decreased due to the transfer of a secretarial position froom the City Council budget. City Administrator expenditures increased due to the reclassification of the Cable TV operation from Boohomic Development to the City Administrator. City Clerk experxiitures increased because of the November, 1990 election costs (there was no election in the prior year) . City Treasurer ' expenditures increased due to the reclassification of the Business License function under the City Treasurer. expenditures decreased due to a reduced transfer from the General Fund to the Self-Insurance Fund for liability claims and ' reduced utility expenditures. Capital expenditures increased primarily due to the expenditures made for the pier reconstruction and other major projects. Fund Equities- The City's total fund equities for funds (general, special revenue, capital projects and debt service) decreased .2%, proprietary fund increased increased 11.9% as shown in the table below: ' (Dollar Amounts Expressed in Thousands) Total Total Percent ' Equity Bcluity Increase Governmental Funds 1990 91 1989 90 (Decrease) Reserved $138,830 $142,595 (2.6)% ' Unreserved/Designated 5,417 3,946 36.5 Unreserved/Undesignated 11,838 9,813 20.6 Total $15_ $15_ ' Proprietary Funds Retained Earnings $12,400 $7,363 69.6% Contributed Capital 55,084 53,045 3.8 ' Total $67,484 $60,408 11.9% The large increase in proprietary fund retained earnings is due to the almost $2.9 ' million dollar net income for the Water Fund. Proprietary Operations ' The City operates four enterprise and two internal service funds. Enterprise funds include the Water Utility Fund, the Meadowlark Golf Course Fund, the Emergency Fire ' Medical Fund and the Emerald Cave Housing Fund and are supported through user charges to the public. The internal service funds include the Self-Insurance Fund and the Bquipment Replacement Fund and are supported by charges to user departments within the City. ' Shown below is an analysis of the City's four enterprise funds. Financial information is compared to the prior year: 1 ' -viii- (Dollar Amounts Eqressed in Mwusands) Meadowlark Water Utility Golf Course 1990/91 1989190 1990/91 1989/90 Operating $13,634 $13,838 $314 $289 Revenues Operating $1,633 $124 $296 $262 Income Net Income $2,894 $951 $279 $253 Income Available $2,912 $982 $396 $368 for Debt Service Debt Service, Bonds $347 $113 $150 $150 and Notes Debt Service 8.4 8.7 2.6 3.2 Coverage The increase in Water Fund net income is due largely to a decrease in Water purchase and production costs. The increase in Emergency Fire Medical net income (summarized below) is due to 1990/91 being the first full year of operation for the fund. IInerald Emergency Fire Cove Housing Medical 1990/91 1989/90 1990/91 1989/90 Operating $598 $632 $2,755 $148 Revenues Operating $255 $313 $1,028 $37 Income Net Income $76 $89 $1,032 $46 Income Available $525 $536 N/A N/A for Debt Service Debt Service, Bonds $449 $449 N/A N/A w and Notes Debt Service 1.2 1.3 N/A N/A Coverage ' -ix- 1 • 1 Shown below is a table colparinj the performance of the City's internal service funds to the prior year (expressed in thousands) : 1 (E pressed in Thousands) Equipment Self-Insurance Replacement 1990/91 1989/90 1990/91 1989/90 Operating Revenues $7,283 $7,645 $2,034 $2,051 Operating Income (Doss) $(256) 877 ($1,050) ($1,063) Net Income (Doss) $583 $1,841 ($527) ($414) The decrease in Self-Insurance net income is largely due to a reduced payment from the General Fluid. The increase in Equipment Replacement Ftind net loss is due 1 largely to reduced interest income from laver interest rates. $2,459,000 in depreciation (non-cash) expenses result in the large operating loss in the Equipment Replacement Fluid. 1 Pension Obligations The City is a participant in the California Public Employee's Retirement System 1 (PERS) . PERS sets rates that the City uses to make contributions on behalf of all permanent employees and temporary employees who have worked in excess of 1000 hours during the year. At June 30, 1990, which is the most recent information available, 1 the City's total future pension obligation for all current and retired employees was $157,498,000 and assets available for these obligations was $158,762,000 leaving an surplus of $1,265,000. 1 The City also maintains a supplemental retirement plan. An independent actuarial study was performed as of June 30, 1991. The total unfunded pension liability for this plan was $10,332,251. The contribution rate required to fund this plan is 1 3.22% of total salary. During the next two years, a plan will be developed to fund these benefits. 1 Agency Fads Total assets and liabilities of the City's agency funds increased by $2,875,000, or 15.2% to $21,462,000. This is due to; increased employee participation in the 1 City's section 457 deferred compensation plan and the continued funding of the Retiree Medical Insurance program. 1 1 ' -x- Debt Administration Below is a summary of the City's outstanding long-term debt at June 30, 1991: (Egoressed in Thousands) Amount Description Outstanding General Obligation Bonds 1970 Park Bards $1,625 Special Assessment Bonds Reservoir Hill Bonds 1,651 Mello-Roos Bonds 2,400 Revenue Bonds 1963 Water Bonds 363 Parking Authority Bawds 425 Public Financing Authority Bonds (Redevelopment Agency) 25,945 Certificates of Participation Redevelopment Agency: Emerald Cove Housing 4,600 Civic Inprovement Corporation 34,025 Public Financing Authority 5,510 Leasehold Mortgage Bonds Public Facilities Corporation- (Library) 2,270 Notes Payable Meadowlark Golf Course 1,636 San Joaquin Reservoir 57 County of Orange 178 Mortgages 1,412 Other Connpensated Absences 4,722 Redevelopment Agency Debt 114,570 Advances From Other Fkmft Self-Insurance Claims 6,714 Amounts Due Under Owner Participation 5,660 and Disposition and Development Agreements Total $213,763 -Xi- ' Moody's Investor's Service rates certain obligations as to their safety as an investment. Below are the ratings of certain City obligations: ' 1970 Park Bonds Aa Civic Improvement Corporation Certificates Al of Participation Public Facilities Corporation Leasehold Mortrgage Al Bonds Parking Authority Revenue Bonds Al The City's legal debt limitation for general obligation bonds is 12% of the total of assessed valuation in the City. At June 30, 1991 the City's general obligation debt was $1.1 billion less than its legal debt limitation. Further information on the City's long-term indebtedness is included in notes 12 and 13 to the general purpose financial statements. ' Cash Managenetmt ' The City Treasurer is responsible for investing available cash in allowable instruments. These include insured or collateralized certificates of deposit, certain government securities, five year or less commercial paper rated A or better, the Orange County Investment Pool the and the State Treasurer's Local Agency Investment Fund. The cash management system of the City is designed to monitor and forecast revenues and expenditures to ensure the investment of monies to the fullest extent possible. The criteria for selecting investments are, in order of priority, ' (1) safety, (2) liquidity, (3) yield. Further information on the City's investments are detailed in note 3 to the general pu pose financial statements. The investment of non-restricted cash and yielded interest of $7,807,992 for an average return of 8.3$. The California Government Code requires the City Treasurer to prepare an annual statement of investment policy and monthly report containing specific information ' regarding the City's investment policy. The City Treasurer has omplied with this law. Further information on the City's investment is detailed in note 3 of the financial statements. ' Risk Management ' The City is self-insured for liability, workers compensation and employee health claims. The City is a member of the Big Cities Independent Emess Insurance pool (BIC P) which provides coverage for liability claims in excess of one million dollars. Time City also maintains insurance coverage for workers compensation and ' employee health claims in excess of certain amounts. At year-end, an estimate was made of the total cash that will be eventually paid out by the City due to claims made through June 30, 1991. The City has set aside sufficient cash to fund all ' outstanding liability, workers cmVenmsation and eMloyee health insurance claims outstanding as of June 30, 1991. t ' -xii- On= ]NICK single Audit In accordance with the Single Audit Act of 1984, the City's grant pmgMms which utilize Federal funds, either directly or passed through from state or county agencies, have been subjected to audit reTnrawnts of the Office of Management and Budget. This included tests of compliance with Federal laws and regulations and an organization-wide examination of financial operations. The results of this expanded audit of grant activity are included under separate cover. Copies of the report are available from this office. Financial Reporting Certificates ry The City has prepared an easily readable and efficiently organized CmTprehensive Annual Financial Report. Zhe City's report for the fiscal year ending June 30, 1990 has been given recognition from the GoverTm ent Finance Officer's Association (GFOA) and the California Society of Municipal Finance Officers (CR4M) . The GFOA awarded the City a Certificate of Achievement for Excellence in Financial Reporting which is the highest form of recxgriticn for financial reporting that the GM awards. The certificate is valid for one year only and is awarded only to cities whose reports conform substantially with high stares of public financial reporting. M e CSKM u awarded the City a Certificate of Award for Outstanding Financial Reporting which is also its highest form of award. We believe that this year's report continues to conform to the requirements of both award programs and we are submitting it to both organizations to determine its eligibility for another award. Ac)aiowledgments We wish to thank the City Council and the various City departments for conducting _. the fiscal affairs of Huntington Beach in a responsible and progressive manner. We would also like to thank the members of the Accounting Division, especially Robert Sedlak and Annabelle Richards, Principal Accountants for their work in the preparation of this report. We would also like to thank Dennis Williams of the Public Information Office for preparing the report covers and Liane Nakasone, Word Processing Systems Assistant, for her many hours of work to prepare this report. DAN T. V LIEL A Direat cr F' j ROBFET J. Deputy City / Administrative Services -xiii- K ' . CITY OF HUNTINGTON B& PRINCIPAL CITY OFFICIALS ' CITY COUNCIL ' Peter Green Mayor Jim Silva Mayor Pro-Tern Jack Kelly Councilmember ' Don Mac Allister Councilmember Linda Moulton-Patterson Councilmember Earle Robitaille Councilmember Grace Winchell Councilmember OTHER ELECTED OFFICIALS ' Donald L. Watson City Treasurer Gail Hutton City Attorney Connie Brockway City Clerk ' ADMINISTRATIVE OFFICIALS ' Michael Uberuaga City Administrator Ray Silver Assistant City Administrator Robert J. Franz Deputy City Administrator Barbara Kaiser Deputy City Administrator ' Lou Sandoval Public Works Director Ron Hagan Community Services Director Ron Hayden Library Director ' Michael Dolder Fire Chief Ron Lowenberg Police Chief Mike Adams Director of Community Development ' Dan T. Villella Director of Finance 1 ' -,:iv- CITY OF HUNTINGTON BEACH PEOPLE Organizational Chart CITY COUNCIL E ASSISTANT CITY CITY ADMINISTRATOR ADMINISTRATOR DEPUTY CITY CITY CITY CITY ADMINISTRATOR REASURER ATTORNEY CLERK PUBLIC NFORMATION PUBLIC ECONOMIC COMMUNITY ADMIN. COMMUNITY POLICE FIRE WORKS DEV. DEV. SVCS. SERVICES LIBRARY I Recreatl"k Puslk Uniform Fin Fa�pserlpS Ecomamk plyedat HHaan" Ilmman Serrke Dlrlslop Prerenlbp Dtr. Admin. Operations Water Rede•! °YgdipS Information °each Support Division IlemsMS Systems DlvWom Services i Investigation Ervices ertencq Landscape Peraoppal Culterol Division Arts Services Tsle• �� Real Division eammupiea• Malptepapeel Ipsmrapee 4 HUNTINCTON BEACH r C t 1 0 1 1 1 Certificate of 1 Achievement for Excellence 1 in Financial 1 Reporting 1 Presented to City of Huntington 1 Beach California 1 For its Comprehensive Annual Financial Report 1 for the Fiscal Year Ended June 30, 1990 1 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers Association of the United States and Canada to 1 government units and public employee retirement systems whose comprehensive annual financial reports (CAFR's) achieve the highest 1 standards in government accounting and financial reporting. 1 1 � AtPresid carw,ai r zezt yg SEAL7 Y� � a/ �/ 1 Executive Director 1 1 —xvi— • z 0 H E+ U W H U z H (4 • KPMG Peat Marwick ' Certified Public Accountants ' Orange County Office Center Tower 650 Town Center Drive Costa Mesa, CA 92626 ' INDEPENDENT Al IDTTO S'RF--PORT The Honorable City Council City of Huntington Beach,California We have audited the general purpose financial statements of the City of Huntington Beach, California, as of and for the year ended June 30, 1991, as listed in the accompanying table of contents. These general purpose financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these general purpose financial statements based on our audit. ' We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general ' purpose financial statements are Ste of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes 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 opinion. In our opinion, the general purpose financial statements referred to above present fairly, in all ' material respects, the financial position of the City of Huntington Beach, California,as of June 30, 1991, and the results of its operations and cash flows of its proprietary fund types and pension trust fund for the year then ended in conformity with generally accepted accounting principles. ' Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken as a whole. The combining, individual fund and individual account group ' financial statements and schedules listed in the accompanying table of contents are presented for purposes of additional analysis and are not a required part of the general purpose financial statements of the City of Huntington Beach, California. Such information has been subjected to ' the auditing procedures applied in the audit of the general purpose financial statements and,in our opinion, is fairly presented in all material respects in relation to the general purpose financial statements taken as a whole. ' The statistical information listed in the foregoing table of contents was not audited by us and, accordingly, we do not express an opinion thereon. October 10, 1991 ' Member h—of l Kly-eld Peal Marwick Gueldeler CITY OF HUNTINGTON BEACH COMBINED BALANuE SHEET - ALL FUND TYPES AND ACLuUNT GROUPS June 30, 1991 (expressed in thousands) Governmental Fund Types Special Debt Capital ASSETS AND OTHER DEBITS General Revenue Service Projects Cash and Investments (Notes le and 3) $ 9,192 $13,346 $ 5,256 $35,553 Cash With Fiscal Agent (Note 3) - - 7,225 1 ,314 Taxes Receivable (Note 1) 3,338 - 98 33 u Other Receivables 1,268 1,384 - 1,590 Unbilled Receivables (Note lb) - 185 Inventory (Note lg) 325 - - - Due from Other Funds - - - - Advances to Other Funds (Note 10) 66,072 5,862 23,619 18,279 Deposits and Other Assets 406 - - - Land Held for Resale (Note lf) - - 23,633 Property, Plant and Equipment, - - - - Net (Notes if and 15) - - - - Amount Available for Debt Service Funds (Note lb) - - - - Amount to be Provided for Payment of Long-Term Debt - - - - TOTAL ASSETS AND OTHER DEBITS $80,601 $20,592 $36,383 80 402 LIABILITIES, EQUITY AND OTHER CREDITS LIABILITIES: Accounts Payable $ 1,079 $ 27 $187 $ 876 Accrued Liabilities 1,516 38 - 13 Deposits 303 14 - - Tax and Revenue Anticipation Notes 4,500 - - - Due to Other Funds - - - - Advances from Other Funds (Notes 10 and 12) - - - - Deferred Compensation (Note 4) - - - - Claims Payable (Note 9) - - - - Deferred Revenue (Note 5) 46,141 3,764 358 3,260 Current Portion of Long-Term Debt - - - - Long-Term Debt (Notes 12 and 13) - - - - Compensated Absences (Notes lj, 12 and 13) - - - - TOTAL LIABILITIES $53,539 $3,843 545 $4,149 EQUITY AND OTHER CREDITS: Contributed Capital (Note llb) Investment in General Fixed Assets Retained Earnings Fund Balances: Reserved (Note 16) 21,868 4,696 35,838 76,253 Designated (Note 16) 1,300 4,117 - - Undesignated 3,894 7,936 - - TOTAL EQUITY AND OTHER CREDITS 27,062 16,749 35,838 76,253 TOTAL LIABILITIES, EQUITY AND OTHER CREDITS $80,601 $20,592 $36,383 IU,,402 See independent auditors' report and notes to general purpose financial statements. -2- ' . • SCHEDULE A-1 ' Fiduciary Account Groups Propriety Fund Types Fund Type General General Internal Trust and Fixed Long-Term Totals (Memorandum Only) Enterprise Service Agency Assets- Debt 1991 1990 $15,785 $14,192 $3,033 $96,357 $95,789 594 545 16,442 - - 26,120 23,925 - - - - - 3,469 3,372 2,028 132 2,133 _ _ 8,535 7,091 1,899 2,084 1,216 339 - - - - 664 284 97 1,682 115,514 105,793 - 347 29 - - 782 7,822 ' - _ 23,633 24,597 6 14,53 0 103,600 156,036 145,377 35,838 35,838 11, 162 ' - - - - 156,467 156,467 167,772 60 233 2$ 9� 2,1i637 1103,LOO $625,499 594 297 ' $ 708 $ 83 - - - $ 2,960 $ 5,194 140 182 - - - 1,889 1,596 1,734 - 786 - - 2,837 2,731 ' _ _ _ _ _ 4,500 - 97 944 - - - 114,570 115,514 105,793 - - 18,412 _ _ 18,412 15,795 6,131 2,238 8,369 8,135 - - - - - 53,523 55,755 284 960 - _ - 1,244 354 6,333 4,728 26 73,013 84,100 82,213 178 - - - 4,722 4,900 4,482 ' 10 321 $12,084 $21,462 $- $192,305 $298,248 $282,745 ' 40,324 14,760 _ - _ 55,084 53,045 103,600 103,600 94,790 9,588 2,902 - - - 12,490 7,363 ' - - 175 - - 138,830 142,595 - - - - - 5,417 3,946 - - - - - 11,830 9,813 49,912 17,662 175 103,600 - 327,251 311,552 60 233 129,746 121,637 1103,600 $625,499 $594,297 -3- CITY OF HUNTINGTON BEACH COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES For the year ended June 30, 1991 (expressed in thousands) General REVENUES: Property Taxes (Note 1) $27,917 Other Taxes 31,549 Licenses and Permits 3, 112 Fines, Forfeitures and Penalties 1,904 From Use of Money and Property 4,227 ffi From Other Agencies 15,369 Charges for Current Services 8,341 Other 770 TOTAL REVENUES 93,189 EXPENDITURES: Current: City Council 197 City Administrator 1 ,297 City Treasurer 700 City Attorney 1,340 City Clerk 457 Administrative Services 3,793 Community Development 3,032 Fire 14,169 Police 28,093 Economic Development 2 M Community Services 8,336 Public Works 20,221 Non-Departmental 6,100 Capital Outlay 72 Debt Service: Principal - Interest 270 TOTAL EXPENDITURES 88,079 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 5, 110 OTHER FINANCING SOURCES (USES) : Operating Transfers In (Note 10b) 2,003 Advances from Other Funds (Note 12g) - Proceeds of Long-Term Debt - Operating Transfers Out (Note 10b) (3,215) Inventory Increase - TOTAL OTHER FINANCING SOURCES (USES) 1 212) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES 3,898 FUND BALANCE - BEGINNING OF YEAR 24,147 Prior Period Adjustment (Note 20) - FUND BALANCE AS RESTATED - BEGINNING OF YEAR (Note 21) 24, 147 Residual Equity Transfers In (Note 10c) - Residual Equity Transfers Out (Note 10c) 983) FUND BALANCE - END OF YEAR 27 062 See independent auditors' report and notes to general purpose financial statements. -4- ' • • SCHEDULE A-2 ' Totals Special Debt Capital (Memorandum Only) ' Revenue Service Projects 1991 1990 $ - $ 4,781 $ 999 $ 33,697 $ 30,460 ' 327 108 108 32,092 32,679 517 3,629 3,944 - - 1,904 2,256 1,420 2,902 3,305 11,854 14,140 ' 7,430 _ 4,444 27,243 15,211 8,341 7,267 1 81 1,160 2,012 11019 1 9,695 7,872 10,016 120,772 106,976 - - - 197 215 267 _ _ 1,564 853 700 438 - - 1,340 1,308 - 457 330 394 4,187 3,835 - - - 3,032 2,633 ' - _ _ 14,169 14,148 55 28,148 26,369 343 - 1,929 2,274 2,771 791 - - 9,127 8,307 ' 54 - - 20,275 18,428 212 740 7,052 7,955 8,573 - 15,431 24,076 20,622 ' - 2,948 - 2,948 2,996 7,800 877 8,947 7,630 ' 10,083 10,960 19,371 128,493 118,838 388 (3,088) (9,355) (7,721) (11,862) - 3,001 171 5,175 4,241 _ - - 15,848 10,882 10,882 16,226 (1,915) - (537) (5,667) (4,594) ' - - - - 21 (1,915) 3,001 10.516 10,390 31,742 ' (2,303) (87) 1,161 2,669 19,880 19,138 34,927 78,125 156,337 137,047 ' 298 (3,000) (2,702) 65) 19,138 35.225 75,125 153,635 136,982 316 1,204 1,595 3,115 10,829 402 504 (1,628) (3,517) (11,354) ' 1$ 6�749 35 838 76 253 155 902 156 337 ' -5- CITY OF HUNTINGTON BEACH COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUND TYPES For the year ended June 30, 1991 (expressed in thousands) General Fund .. Variance - Favorable Budget Actual (Unfavorable) _. REVENUES: Property Taxes $28,850 $27,917 ($933) Other Taxes 34,689 31,549 (3,140) - Licenses and Permits 3,269 3,112 (157) Fines, Forfeitures and Penalties 2,419 1,904 (515) From Use of Money and Property 4,663 4,227 (436) - From Other Agencies 9,478 15,369 5,891 Charges for Current Services 8,780 8,341 (439) Other 536 770 234 TOTAL REVENUES 92,684 93,189 505 EXPENDITURES: Current: City Council 197 197 - City Administrator 1,278 1,297 (19) City Treasurer 694 700 (6) City Attorney 1,411 1,340 71 City Clerk 455 457 (2) Administrative Services 3,867 3,793 74 Community Development 3,367 3,032 335 Fire 14,840 14,169 671 - Police 28,292 28,093 199 Economic Development 13 2 11 Community Services 8,567 8,336 231 Public Works 21,905 20,221 1,684 Non-Departmental 7,723 6,100 1,623 Capital Outlay 177 72 105 Debt Service: Principal - Interest 325 270 55 TOTAL EXPENDITURES 93,111 88,079 5,032 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 427 5, 110 5,537 OTHER FINANCING SOURCES (USES) : n Operating Transfers In 1,910 2,003 93 Operating Transfers Out (4,189) (3,215) 974 TOTAL OTHER FINANCING - SOURCES (USES) (2,279) (1,212) 1,067 EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES (2,706) 3,898 6,604 FUND BALANCE - BEGINNING OF YEAR 24,147 24, 147 - Prior Period Adjustment - - - FUND BALANCE AS RESTATED - BEGINNING OF YEAR 24,147 24,147 - - Residual Equity Transfers In - - - Residual Equity Transfers Out (1,133) 983 150 FUND BALANCE - END OF YEAR 20 308 27 062 6 754 See independent auditors' report and notes to general purpose financial statements. -6- ' • SCHEDULE A-3 ' Special Revenue Funds _ Debt Service Funds Variance - Variance - Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) $ - $ - $ - $ 4,151 $ 4,781 $ 630 260 327 67 - 108 108 2,285 517 (1,768) 2,200 1,420 (780) 3,223 2,902 (321) ' 10,320 7,430 (2,890) 2 1 U - 81 81 15,067 9,695 (5,372) 7,374 7,872 498 ' 253 267 (14) ' 62 55 7 300 343 (43) 970 791 179 - - - ' 110 54 56 _ - - 212 (212) 22,264 8,573 13,691 - - - ' - - - 2,859 2,948 (89) 7,533 7,800 267 23,959 10,083 13,876 10,392 10,960 568 t (8,892) 388 8,504 (3,018) (3,088) 70 ' - - _ 4,319 3,001 (1,318) 1 915 0,915) ' (1,915) (1,915) - 4,319 3,001 (1,318) (10,807) (2,303) 8,504 1,301 (87) (1,388) ' 19,138 19,138 _ 34,927 34,927 298 298 19,138 19,138 - 35,225 35,225 - ' 316 316 - 1,204 1,204 402 402 504 504 ' 8,245 $16,749 8,504 115,838 1 388 CITY OF HUNTINGTON BEACH SCHEDULE A-3 COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL TOTAL GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUND TYPES For the Year Ending June 30, 1991 (expressed in thousands) 4 Variance Favorable Budget Actual (Unfavorable) REVENUES: Property Taxes $33,001 $32,698 ($303) Other Taxes 34,949 31,984 (2,965) Licenses and Permits 5,554 3,629 (1,925) Fines, Forfeitures and Penalties 2,419 1,904 (515) From Use of Money and Property 10,086 8,549 (1,537) From Other Agencies 19,798 22,799 3,001 Charges for Current Service 8,780 8,341 (439) Other 538 852 314 TOTAL REVENUES 115,125 110,756 (4,369) EXPENDITURES: Current: City Council 197 197 0 City Administrator 1,531 1,564 (33) City Treasurer 694 700 (6) City Attorney 1,411 1,340 71 City Clerk 455 457 (2) Administrative Services 3,867 3,793 74 Community Development 3,367 3,032 335 Fire 14,840 14,169 671 Police 28,354 28,148 206 Economic Development 313 345 (32) Community and Library Services 9,537 9,127 410 x Public Works 22,015 20,275 1,740 Non-Departmental 7,723 6,312 1,411 Capital Outlay 22,441 8,645 13,796 Debt Service: Principal 2,859 2,948 (89) Interest 7,858 8,070 (212) TOTAL EXPENDITURES 127,462 109,122 18,340 . EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (12,337) 1,634 13,971 OTHER FINANCING SOURCES (USES) Operating Transfers In 6,229 5,054 (1,225) Operating Transfers Out (6,104) (5,130) 974 TOTAL OTHER FINANCING SOURCES (USES) 125 (126) (251) EXCESS OF REVENUES AND OTHER SOURCES OVER (12,212) 1,508 13,720 EXPENDITURES AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 78,212 78,212 - Prior Period Adjustments 298 298 - FUND BALANCE AS RESTATED - BEGINNING OF YEAR 78,510 78,510 - Residual Equity Transfers In 1,520 1,520 - Residual Equity Transfers Out (2,039) (1,889) 150 FUND BALANCE - END OF YEAR $65,779 $79,649 $13,870 See Independent Auditors' Report and Notes to General Purpose Financial Statements -8- 1 i i 1 CITY OF HUNTINGTON BEACH SCHEDULE A-4 ' COMBINED STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS ' For the Year Ending June 30, 1991 (Expressed in Thousands) Fiduciary Fund ' - Type --Proprietary Fund-- Totals Internal Pension (Memorandum Only) 1 Enterprise Service Trust 1991 1990 OPERATING REVENUES: ' Sates $13,108 $9,408 - 522,516 523,075 Rentals 909 909 899 Membership Fees 2,755 2,755 148 Other 529 - 400 929 644 ' TOTAL OPERATING REVENUES 17,301 9,408 400 27,109 24,766 OPERATING EXPENSES: ' Water Purchases 3,191 - 3,191 4,185 Administration 3,629 3,003 6,632 3,845 Engineering 612 - - 612 1,239 Production 1,703 - - 1,703 2,221 ' Maintenance 899 - 899 1,082 Water Meters 609 609 895 Water Quality 314 - - 314 197 ' Contribution to General Fund in lieu of Taxes 1,822 - 1,822 1,899 Employee Medical Claims 3,231 3,231 2,602 Liability Claims - - - 0 870 1 Workers Compensation Claims 1,930 - 1,930 1,018 Pension Payments 250 250 167 Depreciation (Note 1f) 1,310 2,459 - 3,769 4,000 TOTAL OPERATING EXPENSES 14,089 10,623 250 24,962 24,220 OPERATING INCOME (LOSS) 3,212 (1,215) 150 2,147 546 NON-OPERATING REVENUES (EXPENSES): Interest Income 1,547 1,178 7 2,732 2,782 ' Interest Expense (584) (400) (984) (999) Joint Venture 0 73 73 90 TOTAL NON-OPERATING REVENUES (EXPENSES) 963 851 7 1,821 1,873 NET INCOME BEFORE OPERATING TRANSFERS 4,175 (364) 157 3,967 2,419 OPERATING TRANSFERS IN (Note 10) 106 421 527 466 OPERATING TRANSFERS OUT (Note 10) (35) - - (35) (113) NET INCOME 4,246 57 157 4,460 2,772 RETAINED EARNINGS - BEGINNING OF YEAR 4,517 2,845 18 7,380 4,461 Prior Period Adjustment (Note 22) 825 0 - 825 147 BEGINNING RETAINED EARNINGS AS RESTATED 5,342 2,845 18 8,205 4,608 1 RETAINED EARNINGS - END OF YEAR S9,588 $2,902 $175 $12,665 S7,380 See Independent Auditors' Report and Notes to General Purpose Financial Statements CITY OF HUNTINGTON BEACH COMBINED STATEMENT OF CASH FLOWS SCHEDULE A-5 ALL PROPRIETARY FUND TYPES AND SIMILAR TRUST FUNDS For the Year Ended June 30, 1991 (Expressed in Thousands) FIDICUARY PROPRIETARY FUNDS FUND TYPE Totals Internal Pension (Memorandum Only) CASH FLOWS FROM OPERATING ACTIVITIES: Enterprise Service Trust 1991 1990 Operating Income: $3,212 (51,215) S157 52,154 5546 Adjustment to reconcile operating income to net cash provided by operating activities: Depreciation 1,310 2,459 - 3,769 4,012 Decrease (Increase) in Accounts Receivable (1,128) - - (1,128) 386 Decrease (Increase) in Interest Receivable 30 80 - 110 (214) Decrease in Unbilled Receivable (683) - - (683) 157 Decrease (Increase) in Advance to Other Funds (122) - - (122) (143) Decrease (Increase) in Joint Venture - (73) - (73) Decrease (Increase) in Inventory (339) - - (339) - Increase (Decrease in Accounts Payable (106) (178) - (284) (411) Increase (Decrease in Claims Payable - (831) - (831) (460) Increase (Decrease) in Accrued Payroll 5 4 - 9 5 Increase in Accrued Interest - (10) - (10) 164 Increase (Decrease) in Deposits 390 - - 390 236 Increase in Compensated Absences 17 - - 17 33 Total Adjustments (626) 1,451 - 825 3,765 Net Cash Provided by Operating Activities 2,586 236 157 2,979 4,311 CASH FLOW FROM NOW-CAPITAL FINANCING ACTIVITY Prior Period Adjustments (Note 21) 825 - - 825 - Operating Transfer In (Out) to Other Funds 71 421 - 492 353 TOTAL CASH FLOW FROM NOW-CAPITAL FINANCING AUTHORITY 896 421 - 1,317 353 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Interest Expense (584) (400) - (984) (999) Acquisition and Construction of Capital Assets (2,823) (2,795) - (5,618) (7,015) Capital Contributed 1,500 539 - 2,039 2,952 Principal Paid on Bonds (314) - - (314) (103) Principal Paid on Note Payable (76) (237) (313) (88) Total Cash Used for Capital (2,297) (2,893) - (5,190) (5,253) and Related Financing Activity CASH FLOWS FROM INVESTING ACTIVITY: Interest on Investments and Joint Venture 1,547 1,251 - 2,798 2,782 NET INCREASE (DECREASE) IN CASH EQUIVALENTS 2,732 (985) 157 1,904 2,193 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 13,647 15,722 18 29,387 27,194 CASH AND CASH EQUIVALENTS, END OF YEAR $16,379 514,737 $175 531,291 $29,387 See Independent Auditors' Report and Notes to General Purpose Financial Statements -10- ' CITY OF HUNTINGTON BE* NOTES TO FINANCIAL STATEMENTS ' JUNE 30, 1991 Number Description t1. Summary of Significant Accounting Policies 2. Description of the Reporting Entity ' 3. Cash and Investments ' 4. Deferred Compensation 5. Deferred Revenue ' 6. Retirement Plan - Normal 7 . Retirement Plan - Supplemental ' 8. Postretirement Medical Insurance 9. Risk Management 10. Interfund Transactions 11. Proprietary Funds Supplementary Information 12. General Long-Term Debt ' 13 . Proprietary Fund Long-Term Debt ' 14. Mello-Roos Bonds 15. Changes in Fixed Assets ' 16. Reserves and Designations of Fund Equity 17. Commitments and Contingencies ' 18. Joint Ventures ' 19. Other Information 20. Tax and Revenue Anticipation Notes 21. Prior Period Adjustments 22. Subsequent Events ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 1. StMMY OF SIGNIF ICAM AO00[ IUM ICLICIES a. Description of Fund Types and Account Groups: Y The City of Huntington Beach (City) accounts for its financial position and operations according to generally accepted accounting principles for 1 units prescribed by the Government Accounting Standards Board (GASB) . Zhe City uses various funds and account groups to record its financial activity. A fund or account group is an accounting entity with a self-balancing set of accounts to record the financial position and results of operations of a specific governmental activity. Me City maintains the following fund types and account groups: Governmental Fund Types: The General Fund accounts for all financial activity that is not required to be accounted for in another fund. Special Revenue Funds account for the receipt and expenditure of monies legally restricted to a specific use. Debt Service Funds account for the receipt and disbursement of monies used for the payment of general and redevelopment long-term principal and interest. Capital Projects Funds account for monies used for the acquisition and construction of major capital facilities. Proprietary Fund Types: F]zterprise Funds account for City operations financed similarly to private businesses and are used when the City wishes to recover the cost of a particular service furnished to the public on a cost reimbursement (o penes including depreciation) basis or when the City wishes to periodically determine net income. Internal Service Fxmds account for goods and services provided by one department of the City to another on a cost-reimbursement basis. Fiduciary Fund Types: Agency Funds account for assets held by the City as an agent for individuals or private organizations. -11- ' CITY OF HUNTINGTON BEA ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 1. S[ORY OF SIGNIFICAWr A000URrD i POLICIES (aQdrnWW): ' a. Description of Fund Types and Account Groups: Pension Trust Funds account for contributions made and retirement benefits ' paid. Account Gros: The General Fixed Assets Account (soup records and controls the City's capital assets not owned by proprietary funds. ' The General 14M Term Debt Aunt Group accounts for the unmatured long- term liabilities financed from governmental funds. tb. Basis of Accounting: Governmental and agency funds use a modified accrual basis of accounting. Revenues are recognized when they are susceptible to accrual. This means that they must be measurable and available to finance current period expenditures. They include property taxes, sales tax, federal and state grants and subventions, interest and certain charges for current service. Revenues which are not susceptible to accrual include certain licenses, permits, fines and forfeiture and other miscellaneous revenue. Expenditures are recognized when the related fund liability is incurred, if measurable, except for unmatured interest on long--term debt which is recognized when due. ' Proprietary fund types and pension trust funds are accounted for on the accrual basis. Accounting for these fund types normally follows accounting ' for private businesses. Revenues are recognized when earned, regardless of the date of receipt and expenses are recognized when the related fund liability is incurred. Unbilled water revenue is accrued when earned. ' c. Measurement Focus: ' The City's governmental funds are accounted for on a spending or "financial flaw,, t focus where generally only current assets and current ' liabilities are included on balance sheets. statements of revenue, expenditures and changes in fund balance for governmental funds generally present increases (revenues and other financing souroes) and decreases (expenditures and other financing uses) in net current assets. -12- 1 CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 1. SUNKRRY OF SIGNEFICAM PMICIES (CQdl'IIom) : c. Measurement Focus: Proprietary funds are anted for on a capital maintenance measurement focus. Assets and liabilities, whether current or noncurrent, are shown on the balance sheets. Reported fund equity represents total net assets. Proprietary fund operating statements present increases (revenues) and decreases (expenses) in total net assets. d. Budgets and Budgetary Accounting: The City Council annually adopts a budget by June 30th of the prior fiscal year for all governmental fund types. The budgeted expenditures become the appropriations to the various departments. Estimates are also made for revenue which, along with the appropriations, are used to ccapute the budgetary fund balance. 23-ie appropriated budget covers substantially all governmental fund type expenditures with the exception of capital imprave�ment projects (capital projects funds) carried forward from prior years, which constitute a legally authorized non-appropriated budget. The City Council may amend the budget at any time. The City Administrator may transfer funds from one object purpose (personal services, operating expenditures or capital outlay expenditures) to another within the same department without changing the total budget of a department. A department head may transfer funds from like object categories of the same department. Any charges to a total departmental budget must be approved by the City Council. Fwpenditures may not exceed appropriations at the departmental level. All unused appropriations lapse at year-pad. Budgets for governmental fund types are adopted on a basis substantially consistent with generally accepted aceaunting principles as legally required. Zhere 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. EqDenditures and transfers are budgeted based upon available financial resources. On or before February 28th of each year, each department submits data to the City Actninistr for so that a budget may be prepared. This budget is prepared by fund, function and activity and includes information on past years, current rent year estimates and requested appropriations for the next fiscal year. Before May 1st, the proposed budget is presented to the City Ccu ncil. The City Council holds public hearings and may amend the budget -13- ' CITY OF HUNTINGTON BEAD ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 1. SPRY OF SIGNIFICA V PMICIES (CmTFmmm) : ' d. Budgets and Budgetary Accounting: by a majority vote. Any changes to the budget must be within the revenues ' and reserves estimated as available. Budgetary data is presented for the General, Special Revenue and Debt ' Service Funds. Budgetary information is not presented for the Capital Projects Funds since these are budgeted on a long-term project by project basis. ' The City uses an encumbrance system as an aid in controlling expenditures. Ercumbrances are amounts committed for goods or services for which a purchase order has been issued and the goods have not been received or the ' services have not been rendered. At year-end, all outstanding encumbrances are reported as reservations of fund balance in governmental fund types. These outstanding encumbrances are then rem into the new fiscal ' year. ' e. Investments: Investments are stated at cost, which is less than market at June 30, 1991. ' If market values decline below cost, no loss is recorded unless such declines are considered permanent. The assets of the &playee Deferred CmgDensaticn Fund (an agency fund) are reported at market value rather than ' cost. ' f. Property and Equipment: Acquisitions of property and equipment are generally recorded as ' expenditures in governmental fund types at the time of purchase and are capitalized at historical cost or estimated historical cost in the General Fixed Assets Account Graff. Land held by the Redevelopment Agency for ' resale is capitalized at the lower of cost or net realizable value in the Redevelopment Agency Capital Projects Fund. Fq:)endituress for infrastructure (roads, curbs, sidewalks, sewers, etc.) are not capitalized as such assets ' are immovable and generally of value only to the City. No depreciation is provided for any asset capitalized in the General Fixed Assets Account Group. -14- .sITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 1. SUMM3 Y CF SIGNIFICANT' AOOL TT'II93 PCLIC 39 (C NTINUED): f. Property and Bguipment: All purchased fixed assets acquired by proprietary funds are valued at historical Cost (where historical records are available) and at estimated historical Cost where no historical records exist. Both proprietary and general fixed assets acquired from gifts or contributions are capitalized at fair market value at the time received, or in the case of water fixed assets, at City Council acceptance date. Depreciation for bath donated and proprietary fund acquired assets is calculated on the straight-line method over the estimated useful lives of the assets shown below and charged to the respective fund. Production, pumping, transmission and distribution plant - 10 to 50 years General plant- 20 to 50 years Transportation equipment- 5 to 30 years m Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of borrowing until oompletion of the project with interest earned on the invested proceeds over the same period. The City has capitalized $185,000 of interest on the construction of the Mw ald Cove apartment complex. g. Inventories: u Inventories are recorded in vernmental funds by the consumption method. Inventories are capitalized and recorded as expenditures when used. Inventories of materials and supplies totalled $325,000 at June 30, 1991 and are valued using the weighted average Cost method. This amount is offset with an reservation of fund balance. h. Interfund Transactions: During the can-se of normal operations, numerous transactions occur between funds. These result in operating transfers, residual equity transfers, V balances due to or due from other funds and balances advanced to or from other funds. Operating transfers are transfers between funds that are -15- ' CITY OF HUNTINGTON BE* ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 1. SUN-SW OF SIGNIFIC AW ACMUM7W PCH. a= mcta'IIwm) h. Interfund Transactions: normal and recurring. Residual equity transfers are nonrecurring or non- routine transfers of equity between funds. Amounts that are due to or due from other funds are the current (due within one year) portion of monies that are to be paid to or received from other funds. Amounts that are ' classified as advances from other funds are the long-term portion of monies which will be repaid to other funds. Amounts that are classified as advances to other funds represent the long-term portion of amounts that ' will be received from other funds. In governmental funds amounts that are advanced to other funds are also offset equally by a fund balance reserve account, which indicates that they are not spendable financial resources. In proprietary funds there is no reservation of fund equity. ' Quasi-external transactions are interfund transactions that would be treated as revenues, expenditures or expenses if they had involved t organizations external to the City. The City has recorded all quasi- external transactions as revenues, expenditures or expenses. Transactions that reimburse a fund for expenditures or expenses initially made from it ' that, are recorded as expenditures/expenses. All other interfund transactions are reported as operating transfers. ' i. LouxJ-l)erm Obligations: ' Goverrmental fund long-term debt (principal, interest and fiscal charges) is recorded as an expenditure when due regardless of when the expenditure is incurred. Obligations that are expected to be financed from spendable, available financial resources are reported as a fund liability. The ' remainder is reported in the General Icng-Term Debt Account Group. Bond discounts and issuance costs are recognized in the period that the debt is issued. Proprietary fund long-term debt is accounted for in the respective funds. Interest on the debt is recorded when incurred. Principal that is due ' within one year is shown as a current liability. The remainder is classified as a long-term liability. Bond discounts are recorded as a reduction of a&ztanding debt and are deferred and amortized over the life of the debt using the straight-line method which approximates the Ieffective-interest method. -16- I jITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 300 1991 1. SUKKRRY CP SIGNIFICARr POLICIES (Cmano m): th 7. &ployee Coapensated Absences: The City records the cost of vacation and sick leave when paid in the goverranental fund types and when incurred in the proprietary fund types. The City records this outstanding liability in the General Long-Ttzm Debt Account Group since these amounts will be paid with future f inancial resources rather than currently available spendable resources. In the proprietary fund types, the amounts are recorded as a fund liability. Both of these amounts represent the "cash surrender value" of all aoc�manlated vacation and sick leave which is the amount that would be paid to euploye:es if they terminate. Vacation is paid at 100% of the accrued amount, while sick leave is paid at varying amounts depending on the employees' contracts. k. Ftmd Dquity: The various types of fund equity recorded on the balance sheet are described below: Governmental Rind Types Reserved Rind Balance is the portion of fund balance that is not appropriable for expenditure or that is legally segregated for a specific future use. Unreserved/Designated RLuid Balance is the portion of fund balance that has been tentatively set aside by the City Council. Unreserved/Urxiesignated Fluid Balance is the portion of fund balance that is available to be spent by the City Council. Proprietary Fund Types Retained Earnings is the acc m dated earnings of an enterprise or internal service fund. Contributed Capital is the permnernt fund capital of a proprietary fund created when assets are contributed to a proprietary fund or a residual equity transfer is made to a proprietary fund. -17- ' • CITY OF HUNTINGTON BE* NOTES TO FINANCIAL STATEMENTS JIINE 301 1991 ' 1. su mRF,RY OF sIG=cmr AOOoIJNr= PoLicim (connium): k. Fund Equity: Fiduciary Fund Types Pension Trust Fund Reserved fund balance is the portion of fund balance that is reserved for future pension payments. Account Groups ' Investment in General Fixed Assets is the City's investment in general fixed assets recorded at cost. 1. Property Tax Revenue: Property tax in California is levied according to Article 13 A of the California constitution. The basic levy is a ootmtywide-levy of one ' percent of total assessed valuation and is allocated to county goverrmP.nt, school districts, cities and special districts. Additional levies require two-thirds approval by voters and are allocated directly to the specific ' government. Property tax revenue is reoognized in the fiscal year levied provided that the revenue is collected during the year or within 60 days of year-end. ' The County acts as a collection agent for property tax for all of the local goal units. Property taxes are normally collected twice per year. The property tax calendar is as follows: Lien Date- March 1st of prior fiscal year Levy Date- July 1st ' Due Date, First Installment- November loth Due Date, Second Installment- February loth Delinquent Date, First Installment- December llth ' Delinquent Date, Second Installment- February llth I I jITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 1. SIMMRRY or SIGNIFICANT POLICIES (CM?rII4UM) 1. Property Tax Revenue: The taxes are paid to the local periodically during the year. Below are the dates and percentages of the payments from the County (dates and percentages vary slightly from year to year) November 30th- 5% December 19th- 20% December 28th- 20% February lst- Balance of First Installment March 28th- 5% April 26th- 34% July 26th of next fiscal year- Balance of Second Installment m. Allocation of Interest Income Among Funds: The City pools all non-restricted cash for investment purchases. Interest income is allocated monthly to the various funds based on the month-end cash balances. Interest income from restricted cash is recorded directly in the fund earning the income. n. Equipment Replacement Fund: All machinery and equipment which is not awned by proprietary funds is owned by the Equipment Replacement Fund, an internal service fund, and leased to user departments. All machinery and equipment which does not replace existing equipment is purchased by the respective fund and transferred to the Equipment Replacement Fund. The transaction is recorded as a capital outlay expenditure in the fund making the purchase and contributed capital in the Equipment Replacement Fund. -19- ' • CITY OF HUNTINGTON BE NOTES TO FINANCIAL STATEMENTS ' JUNE 30, 1991 ' 1. SUMKRRY OF SIGNIFICANT AOODUNTM POLICIES (CQJ 7NUED): o. Emerald Cove Housing Fluid Transfer: The City operates the Emerald Cave Senior Citizens Apartment Cotplex and ' records the activity in the Raerald Cave Housing Fund, an enterprise fund. Zhe City annually makes an operating transfer from the 1cw-Income Housing Fund to subsidize operations. The transfer is reported as an operating ' transfer. p. Total Columns and Comparative Data on Combined Financial Statements: The combined financial statements include "total (memorandum only)" columns ' which total the financial statements of the fund types and account groups. The columns are labeled "memorandum only" because the totals are not comparable to a consolidation. Interf and transactions (except for certain ' leases between the oversight unit and component units described in note 2) are not eliminated. Couparative total data for the prior year have been shown in the a000panying financial statements in order to provide an understanding of changes in the City's financial position and operations. However, comparative data for individual funds has not been presented in all ' statements because their inclusion would make certain statements unduly co Alex and difficult to understand. ' q. Joint Ventures: ' The City is involved in two joint ventures. One of them is recorded in a proprietary fund type using the equity method of accounting. The net increase or decrease in the City's equity position is shown as a non- operating revenue or expense. M e other joint venture is recorded in a governmental fund (see note 18) . ' -20- .'ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 i. S[IlOG= CP SIGNIFICANT ACCOUNTIM POLICIES (CM4rn M) : r. PERS Surplus: The City has surplus funds in its aoco nt at the California Public " Retirement System (PERS) representing emo ss contributions received from past years. The City has elected to reduce future contribution rates to PERS. when credits are taken, the amount is recorded as revenue to offset the expenditure. s. Cash Flow Statements: For purposes of the Statement of Cash Flows, the Proprietary and Similar Trust Fund types considers all cash and investments to be cash equivalents, as these funds participate in the City-wide cash and investment pool. 2. DESCRIPTICK CIF THE REPC RTING ENTITY: The financial activity of certain separate legal entities have been included in this report. Each separate legal entity was evaluated to see if its operations should be combined with the City's. The criteria used were; oversight responsibility, financial dependency, ability to influence operations, designations of management, budget adoption, entitlements of budget surpluses or deficits and location within the City's geographic boundaries. Below is a description of each of these entities and how their financial activity was evaluated and sham in this report: Huntington Beach Public Facilities Corporation (Public Facilities Corporation)- This entity was formed in 1970 to issue bonds to construct the Civic Center and Central Library eouplexes. The Public Facilities Corporation leases the Central Library complex to the City. The lease is a capital lease because title to the facilities passes to the City upon " termination of the lease. The Public Facilities Corporation's original governing body was appointed by the City Cecil. However, the governing board itself appoints any successors. The City Cm=ll adopts an annual budget for the Public Facilities Corporation which cannot terminate its lease with the City if the City meets the terms of the lease. At the end of the lease, the Public Facilities Corporation will dissolve and its assets will revert to the City. The assets and related revenue and expenditures that are used for repayment of the bonds are recorded as a debt service fund. Assets used to construct capital inprovements were -21- ' CITY OF HUNTINGTON BES ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 2. DESCRIB aN OF THE REPcRrDG FN= (OWTI UED) : recorded in a capital projects fund. Since the Public Facilities Corporation is a part of the City's reporting entity, the capital lease between the City and the Public Facilities Corporation is not shown on the combined balance sheet. Parking Authority of the City of Huntington Beach (Parking Authority)- This entity was formed in 1967 to issue bonds to construct off-street ' parking facilities. The City leases the facilities from the Parking Authority. The City Council serves as the governing body of the Parking Authority. The lease is a capital lease because the City Council may, by resolution, dissolve the Parking Authority and deed the assets to the City. The Parking Authority's governing body is the City Council which annually adapts a budget for the Parking Authority. The Parking Authority is financially dependent on the City for all its operations. At any time during the term of the lease the lease payment may be forgiven by resolution of the City Council if there is enough cash in the Parking ' Authority to meet the debt service requirements. The assets and related revenue and expenditures that are used for repayment of the bonds are recorded in a debt service fund. Assets used to construct capital improvements were recorded in a capital projects fund. Since the Parking ' Authority is a part of the City's reporting entity, the capital lease is not sham on the combined balance sheet. ' Redevelopment Agency of the City of Huntington Beach (the Agency)- This d entity was forme in 1967 to renovate older areas in the City. The City Council serves its governing body and adapts its annual budget. The Agency ' is financially dependent on the City for all of its operations. The tax increment revenue received and disbursed by the Agency is recorded in a debt service fund and the capital 1uprovements, made are recorded in a ' capital projects fund. The Agency's debt is recorded in the General Long- Term Debt Account Group since these amounts will be paid from future financial resources. Huntington Beach Civic Improvement Corporation (Civic Impraven,ent Corporation)- This corporation was formed to provide for the defeasance of the Huntington Beach Public Facilities Corporation Leasehold Mortgage ' Bonds- 1st Issue as described in Note 12. In 1986 the Civic Improvement Corporation issued $20,000,000 of certificates of participation to provide for this defeasance. In 1989 the Civic Improvement Corporation also issued an additional $15,025,000 of additional certificates of participation. The ' governing board of the Civic Improvement Corporation is the City Council which also adopts its annual budget. The Civic Improvement Corporation is -22- .;ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 2. D f MC K OF THE RF.POHTnia ENTITY (C WT11WED) deperxient upon the City for all of its operations. The Civic Improvement Corporation has title to the Civic Center coWlex and leases it to the City. It is a capital lease because title to the Civic Center cooplex reverts to the City at the end of the lease. The lease cannot be terminated if the City meets all its financial obligations. The assets pledged for repayment of the certificates of participation and the related revenues and expenditures are recorded in the Civic Iupr^oven*nt Corporation Debt Service Fund. since the Civic Improvement Corporation is a part of the City's reporting entity, the capital lease is not shown on the balance sheet. 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 Authority's governing body is the City Council which also adapts the annual budget. The Authority is financially dependent on the City. The Authority's activity is recorded as both a debt service fund and as a portion of the activity in the Equipment Replacement Fund (a proprietary fund type) . The City of Huntington Beach Community Facilities District 1990-1 (Community Facilities Diti ) and the Reservoir Hill Assessment District (the Assessment District) were formed to construct public u�rovernP.nts within the City boundaries. The governing board of these districts is the City Council. The proceeds of debt issued and the expenditure for the public improvements are recorded in capital projects funds. For the Comawnity Facilities District's debt is not an obligation of the City and the monies collected for the debt are recorded in an agency fund. The Assessment District's debt is recorded in a debt service fund. The two joint ventures described in note 1(q) are not part of the reporting entity because the City does not have primary responsibility for their operations. There are many other goverrmental agencies, including the County of Orange, various elementary school districts, the Coast Comnnmity College District, the Huntington Beach Union High School District and various assessment _. districts and other special districts which prro a services within the City. These are not oonponent units of the City of Huntington Beach and their financial information is not included in this report. -23- ' CITY OF HUNTINGTON BEAS NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 3. CASH AND INVESTKWTS: ' Cash and investments at June 30, 1991 totalled $122,477,000 and are shown in the ac=gnnying combined balance sheet as follows (expressed in thousands) : ' Cash and Investments $96,357 Cash with Fiscal Agent 26,120 Total $122,477 Collateral for Deposits ' The California Government Code requires California banks and savings and loan associations to secure a City's deposits by pledging government ' securities with a value of 110% of a City's deposit. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total ' deposits. The collateral for deposits in Federal and state chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of ' California Department of Banking. The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Horne Loan Bank in San Francisco, California as a third party trustee. These ' securities are physically held in an undivided pool for all California public agency depositors. The trustees keep detailed records of the security pool. ' The City Treasurer, at his discretion, may waive the collateral requirement for deposits which are fully insured up to $100,000 by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance ' Corporation. Authorized Investments The City of Huntington Beach operates its pooled cash investments under the "Prudent Man Rule" (California Civil Code sections 2261 et seq.) . This allows a broad spectra m of investments as long as the investment is allowable under the California Government Code section 53600 et seq. I I -24- l ,:ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 3. CASH AMID (cman m) : The City's investment policy and Section 53601 of the California Government µ Code allows the following . a. Bankers acceptances b. Negotiable certificates of deposit c. Cannerci.al paper d. Bands issued by the City e. Obligations of the United States Treasury f. Federal Agency Obligations of: Federal Intermediate Credit Bank (FICBs) Federal land Bank (FLBs) Federal Ham Loan Bank (R] B.$) Federal National Mortgage Association (FNMAs) Small Business Administration (SBAs) National Mortgage Association (GNMAs) Tennessee Valley Authorities (TVAs) Student Loan Association Notes (Sallie Mae's) g. Obligations of the State of California or of any local agency within the State of California: The Local Agency Investment Fund (LAIF) is a special fund of the California State Treasury through which any local over may pool investments. Each agency may invest up to $10,000,000 in this fund. Investments in LAIF are highly liquid and may be converted to cash within 24 hours. Investments with LAIF are secured by the full faith and credit of the State of California. h. County of Orange Investment Pool: The County of Orange Investment Fool (County Pool) is a special fund of the County of Orange through which participating local gaverrmmyts in Orange County may pool investments. These investments are highly liquid and may be converted to cash in three days. Investments in the County Pool are secured by the credit and faith of the County of Orange. i. Repurchase Agreements: Throughout the year ending June 30, 1991, the City utilized overnight repurchase agreements for temporary investment of idle cash. such agreements were used 20 to 22 times per month and generally dial not exceed 10% of the City's investment portfolio. -25- ' • CITY OF HUNTINGTON BEA ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 3. CASH AMID INVFB'II NIS (CONTINUED): ' 7. Reverse-Repurchase Agreements: Although the City's investment policy does not preclude the use of Reverse-Repurchase Agree=.nts, the City did not borrow through the use ' of reverse repurchase agreements at any time during the year. k. Medim-Term Corporate Notes 1. Mutual Ftu-ds Safekeeping Arrangements for Investments Under Sections 53651 to 53653 of the California Goverrment Code, as amended, the collateral underlying an agency's inves-tunents must be t delivered to the City. If U.S. Federal obligations are used as the underlying collateral, the delivery may be made by "book-entry" only. For all other collateral, the security must be physically delivered to the City ' or a third party custodial agent. A bank is permitted to maintain the underlying securities in its Trust or Safekeeping Department when acting as a third-party custodial agent. ' The City's balance of deposits and investments with financial institutions is categorized under the following risk categories: ' Deposits ' Category 1- Deposits insured by FDIC, FSLIC, a state depository insurance fund or a multiple-financial institution Collateral pool, or deposits collateralized with securities held by the City or the City's agent in the t City's name. Ca o 2 Deposits collateralized with securities held by the pledging financial institutions trust department in the City's name. tfor 3- Uneollateralized deposits, or collateralized but the pledged securities are not held in the City's name. ' Investments ' Category 1- Investments insured by SIPC, or where the securities are held by the City or the City's agent in the City's name. -26- CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 3. CASH AMID I VP3 MKWTS (CM?rnVW): Ca 2- Uninsured investments, where the sect ities are held by the purchasing financial institution's trust dent or agent in the City's name. Ca 3- Uninsured investments where the severities are held by the purchasIng financial institution's trust. department or agent, but not in the City's name. Category Cost/Bank Market 1 2 3 Balanoe Value Deposits Demand Accounts $200 $1,321 $ - $1,521 $1,521 Certificates 1,179 18,600 - 19,779 19,779 of Deposit Cash with Fiscal - - 9,873 9,873 9,873 Agent Deferred Condensation - - 16,247 16,247 16,247 .. Subtotal 1,379 19,921 26,120 47,420 47,420 Investments Corporate Notes - - 21,778 21,778 21,800 Federal Mortgage - - 915 915 1,000 Notes Federal - - 1,500 1,500 1,500 Obligations U.S. Treasury Notes - - 4,993 4,993 5,000 Agreements - - 4,000 4,000 4,000 Subtotal 1,379 19,921 33,186 33,186 33,300 others Investment in LAIF 18,000 18,000 Investment in County 28,184 28,184 Pool Petty Cash 9 9 Subtotal 46,193 46,193 Total Deposits 126,799 126,913 and Investments in Financial Institutions Less Demand Warrants (4,322) (4,322) Outstanding Total Cash $122,477 $122,591 and Investments �" -27- ' CITY OF HUNTINGTON BEA• ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 4. DEFERRED MEMMC N: Permanent City employees may defer a portion of their salary under Section 457 of the Internal Revenue Code. These amounts are invested in savings accounts, certificates of deposit and other prudent investments. The City retains title to these funds until withdrawn by the employee, which may ' take place at termination or any later date. The assets of the plan remain subject to the general claims of creditors of the City. The amount of deferred compensation payable at June 30, 1991 was $18,412,000 which ' represents the market value of the total assets. Since the City has a fiduciary responsibility to administer the plan, the assets are recorded in an agency fund in the City's financial statements. The City believes that it is unlikely that it will use the assets to pay any general creditors now or in the future. 5. DEFERRED REVENUE: Certain revenues in gaverrmLental funds have been deferred until received. Interest on these amounts accrues at 8% per annuu with the exception of interest on loans frcan the Public Financing Authority which accrue interest at varying rates. The amounts are as follows (expressed in thousands) : GENERAL FUND: Land sales from the City to the ' Redevelopment Agency from 1982/83 to 1989/90 $32,903 Interest on above amounts and on general ' fund advances from 1978/79 to 1990/91 13,238 Total General Fund 46,141 -28- 'ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30o 1991 S. DEFERRED REVENUE (CQdrnMM) SPECIAL REVENUE FUNDS: Park Acquisition and Developnent Fund: Sale of Emerald Cave site to Redevelopment Agency 1,741 land sale proceeds paid to Rnerald Cave 832 Development fees deferred in 1985 248 Interest on above amounts 490 Total Park Acquisition and Development Fund 3,311 Sewer Fund: Development fees deferred in 1985 38 Interest on above amounts and on 1990/91 . Advances 59 Total Sewer Fund 97 Gas Tax Fund: Interest on advances fran 1988/89 153 Planned Local Drainage: w Development fees deferred in 1985 53 Interest on above amounts and on advances 150 from 1987/88 _ Total Drainage Fund 203 Tonal Special Revenue Funds $3,764 -29- • CITY OF HUNTINGTON BEA NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 mmum REVZWE (CmammED) : DEBT SERVICE F[AW: Public Financing Authority: Interest on advances from 1988/89 358 CAPITAL PROTECTS FUNDS Capital Improvement Fund: Interest on Advances from 1990/91 38 Parking Structure: Interest on advances from 1988/89 and 1990/91 3,222 Total Capital Projects Fund 3,260 Total Deferred Revenue $53,523 6. I2LTIItEl W PLAN - NlxilM: ' a. Plan Description: The City contributes to the California Public Employees Retirement System (PE12.S) , an agent, multiple employer retirement system that acts as a common investment and administrative agent for participating public entities in California. Generally only an employee's base salary (excluding overtime) is subject to retirement benefits. The total payroll for the year ending ' June 30, 1991 was $53,108,309. The payroll subject to retirement benefits was $45,622,629. 'The plan covers all permanent City employees and temporary employees who ' work more than 1000 hours in a twelve month period. Benefits vest after five years of service. Benefits for employees vary based upon final yearly C=Lpensatian, safety or non-safety status and age at retirement. There are ' two groups of covered employees: Safety employees- include sworn police, fire and marine safety employees ' Miscellaneous employees- all other covered employees. -30- uITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 6. EME NT PLAN - NMM (CQdFIIMED) b. Fnployee and EMloyer Contribution obligations: The City makes two types of contributions for covered employees. The first contribution represents the amount required to be made by the City (the employer rate) . The second refits an amount which is normally paid by the employee, but is reimbursed to the employee by the City (the member rate) . The member rate is set by contract and normally retains unchanged. hanged. The employer rate is set by PFRS and changes frcm year to year. The employer rates for the fiscal year ending June 30, 1991 are shown below: Miscellaneous Safety Normal Cost Rate 6.163% 14.468% Unfunded Liability Rate 6.163%) 14.468$ Tbtal Required ._= The member rates for the fiscal year ending June 30, 1991 are as follows: Member Rates HI as a Percentage of Wagee; Local Miscellaneous Members 7% Focal Safety Members 9% The employer rate ccxtributes the remaining amounts necessary to fund the _. benefits for its members, using the actuarial basis recommended by the PERS actuaries and adopted by the Hoard of Aftburtraticn. c. Finding Status and Progress: Pension benefit obligation is a stmx1a dized measure of the present value of pension benefits estimated to be payable in the future due to employee service to date. It helps assess the funding status of the system, assess progress made in aeccamulatirg enough assets to pay benefits when due, and a make comparisons amm g employers. This measure is J. --spendent of the funding method used to determine City contributions to the system. 31 CITY OF HUNTINGTON BEA NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 6. RERZR ZEW PLAN - I63ElM (OQirnium) c. Funding Status and Progress: PERS corxhuc,-ted an actuarial valuation to determine the City's pension benefit obligation as of June 30, 1990. Significant actuarial assumptions used were as follows: . pate of return on present and future assets- 8.5% per aimmun► . Projected salary Increases for covered employees due to inflation- 5.0% per year . Projected salary increases due to merit- 1.5% per year. . Across the board real salary increases- .50% benefit increases- 0% Assets in excess of the pension benefit obligation applicable to City employees were $1,264,000 at June 30, 1990. There was no change from the prior year due to changes in benefit provisions and a change of $2,819,000 resulting from changes in actuarial provisions. Below is further actuarial information (expressed in thousands) : Retirees and beneficiaries currently reoeiving benefits and terminated employees not yet receiving benefits $58,938 t Current Employees. Ac==11ated employee contributions and investment 40,873 earnings ' Employer-financed, vested 55,846 Employer-financed, non-vested 1,840 ' Total pension benefit obligation 157,497 Less net assets available for benefits at cost (158,762) (market value is $180,036) ' E�aoess (deficiency) of assets available over pension benefit obligation $1 265 32 .ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JIINE 30, 1991 6. REPIRZ3r W PLAN - HMML ( ) d. Actuarially Determined Contribution and Cohtributiohs Made: PERs uses the Entry Age Normal Actuarial cost Method which is a projected benefit cost method and takes into account those benefits that are expected to be earned in the future as well as those already accrued. T7his method states that the normal cost for an employee is the level amount KK, which would fund the projected benefit if it were paid annually from date of employment until retirement. PERS uses a modification of the Entry Age Cost method in which the employer's total normal cost is expressed as a level percent of payroll. PERS also uses the level percentage of payroll method to amortize any unfunded actuarial liabilities. The amortization period of the unfunded actuarial liability ends in the year 2000 for prior service benefits and in 2011 for current service benefits. The significant. actuarial assumptions used to cxapute the actuarially , determinned contribution requirement are the same as those used to con ute the pension benefit obligation, as previously described. The contribution to the system for 1990/91 of $7,375,289 was made in accordance with actuarially determined r ecquted through an actuarial valuation performed as of June 30, 1990. The contribution consisted of the normal cost, $3,945,538 (9.76% of current covered payroll) and a $179,810 amortization of the unfunded actuarial accrued liability (.44% of covered payroll) . The City made employer omitributicns of $4,128,245 (10.21$ of covered payroll) and on behalf of employees contributed $3,247,044 (8.03% of covered payroll.) e. Trend Information: Trend information gives an indication of the progress made in aac�mulatinq enough assets to pay benefits when due. Ten year tread information for the City of Huntingtm Beach is not published in the California Public Employees Retirement System Annual Report. Therefore, ten years of trend information are required within the City's financial statements since PERS does not display financial information for individual agencies within their report. 1987/88 is the first year that this actuarial information has been made available by PERS and until ten years are available, as many years as are available will be presented. Trend information for 1987/88, 1988/89 and 1989/90 and 1990/91 are sham and employer contributions for 1986/87, 33 ' CITY OF HUNTINGTON BEAD ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 6. RL'PIIWUNT PLAN - ILL (CO?rnWW) ' e. Tread Information: 1987/88 and 1988/89 aryl 1989/90 are shown (collar amounts expressed in ' millions) : ' 1986 87 1987 88 1988 89 1989 90 Net assets available for benefits $105.6 $120.6 $139.5 Pension benefit obligation $115.3 $126.7 $138.9 ' Net assets available for benefits, expressed as a percentage of the 91.6 95.1 100.4 pension benefit obligation Unfunded pension benefit obligation 9.7 6.1 (.7) ' Annual Covered Payroll $32.1 $ 34.4 $ 37.0 $40.4 Unfunded pension benefit obligation as 28.3% 16.7% (1.5%) ' a percentage of covered payroll Employer contributions $4.5 $4.4 $4.5 $ 4.1 ' Employer contributions expressed as a percentage of annual coveted made 14.1% 12.7% 11.9% 10.1% according to actuarially determined requirements 1990 91 ' Net assets available for benefits $158.7 Pension benefit obligation $115.3 Net assets available for benefits, ' expressed as a percentage of the $100.8 pension benefit obligation Unfunded pension benefit obligation ($1.3) Armual Covered Payroll $45.0 Unfunded pension benefit obligation as (2.8)$ a percentage of covered payroll ' Employer contributions $3.5 Employer contributions expressed as a 7.8% ' percentage of annual covered made according to actuarially determined requirements -34- -ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS r JUNE 30, 1991 7. Rti'PIItIIC ' T PLAN - a. Plan Description: The City provides a supplemental retirement plan to all employees covered under the City's normal retirement plan with the California Public Employees Retirement System (see note 6) . It is a single-employer PERS. It is a defined benefit plan and will pay the retiree an additional amount v to his or her normal amount for life. The amount will cease upon the employee's death. The amount is computed at retirement and remains constant for his or her life. At June 30, 1991 there were 1,057 active City employees in the plan. 124 retirees were receiving benefits. b. Employer Obligations: The City annually transfers the estimated payments for the year frc4m the General Fund to a pension trust fund (pay-as-you-go-basis) . An independent actuary conducted a study of the plan and the required funding for the plan. The actuarial assumptions are identical to the assumptions for the City's normal retirement program (note 6) . The employer contribution rate for all permanent the year is 3.22% of base salary for all permanent employees covered under the City's normal retirement plan. Below is an analysis of the pension benefit obligation and unfunded liability for the plan (expressed in thousands) : Retirees Currently Receiving Benefits- $2,011 Active, Vested Safety Employees 4,002 Active, Vested Non-Safety Employees 4,494 Total Pension Benefit Obligation $10,507 Less Assets Available 175) Unfunded Liability $10,332 c. Trend Information: This is the first year that there has been an independent actuarial study of this plan. Therefore only one year of trend information is presented. As soon as trend information is available, it will be presented (expressed in thousands) : -35- ' CITY OF HUNTINGTON BEAD ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 7. RLTIREMERr PLAN - (CCUrIN JED) ' c. Trend Information: 1990 91 ' Net assets available for benefits $175 Pension benefit obligation $10,507 Net assets available for benefits, .7% expressed as a percentage of the ' pension benefit obligation Unfunded pension benefit obligation $10,332 Annual Covered Payroll $40,400 Unfunded pension benefit obligation as 304% a percentage of covered payroll t Employer contributions 400 Employer contributions expressed as a .1% percentage of annual covered payroll made ' according to actuarially determined requirements ' d. Accounting For Supplemental Pension Plan: ' E43enditures for this pension plan are recorded in a pension trust fund. During the year, contributions of $400,000 were made and expenditures of $250,000 were recorded. -36- -STY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 301 1991 S. MEDICAL INSMUW E: a. Plan Description: The City provides post-retirement medical insurance benefits to retirees who meet all three of the following criteria: .At the time of retirement the employee is employed by the City; and .At the time of retirement the employee has a minimum of ten years of service or is granted a service connected disability retirement. .Following official separation from the City, the retiree is granted a retirement allowance by the California Public Employee's Retirement System. 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. If a retiree dies, the benefits that would be payable for his or her insurance will be provided to the spouse or family for eighteen months. Benef its ,for insurance premiums are payable based on the years of service credit for the retiree. The premiums may be used for any of the health plans that the City's active employees may participate in. b. Accounting and Funding: The Retiree Medical Insurance Fund is recorded as an agency fund. Contributions are made by the City's operating funds on a periodic basis. The fund is only to be used to purchase medical insurance for retirees. There are no outstanding liabilities at year-end. For the year contributions of $441,000 were made by active employees and $158,000 of premiums were paid from the fund. The plan is being "advance-funded", but not on an actuarial basis. Forty- eight participants were eligible to receive benefits at June 30, 1991. -37- ' CITY OF HUNTINGTON BEA ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 9. RISK MANAGEMENP: The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and anissions; injuries to employees; natural disasters and employee health insurance claims. ' The City established a Self-Insurance Furri (an internal service fund) to account for and finance uninsured risks of loss. This fund provides liability coverage for claims up to $1,000,000, workers compensation coverage up to $150,000 per claim and the first $75,000 of each health claim. The City is also a participant in the Big Independent Cities Excess Pool Joint Powers Authority, (see note 18) which provides insurance ' for individual liability claims in excess of $1,000,000. Independent insurance coverage is purchased for health and workers causation claims in excess of the above amounts. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. All funds of the City participate in the program and make payments to the Self-Insurance Fluid based on historical cost information. The payments are ' adjusted over a reasonable period of time so that revenues and expenses of the Self-Insurance Flmd are approximately equal. ' The claims liability of $6,714,000 is composed of the following claims totals (expressed in thousands) : ' Liability Claims $1,929 Workers' Compensation Claims 4,067 Health Claims 135 ' Total $6,131 Liabilities are reported if, prior to the issuance of the financial statements, it is probable that a liability has been incurred as of the date of the financial statements and the amount of the claim can be reasonably estimated. Changes in the claims liability during the year were ' as follows (expressed in thousands) : -38- t .:ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS n JUNE 30, 1991 9. RIM MNNZIIMERT (CCtUMNUED) : Balance Balance July 1, 1990 Additions Payments June 30, 1991 Liability $2,837 $326 ($1,234) $1,929 Workers' 3,990 1,174 (1,097) 4,067 a C uperLsation Health 135 3,230 (3,230) 135 Total $6_962 $4_ $5 561 $6_ 10. nmwmID 1'FtVW=CNB: a. Receivables/Payables: Individual interfund receivables and payables at June 30, 1991 were as follows (expressed in thousands) : Advances to Advances from Other Funds Other Funds General Fund 66,072 Special Revenue Funds: Sewer 272 Planned Local Drainage 453 Giants 1,173 Gas Tax 653 Park Acquisition and 3,311 Devel Anent Debt Service Funds: Public Financing Authority 23,619 Capital Projects Funds: Parking Structure 18,041 Capital InFrovemmt 238 Enterprise Funds: Water Utility 1,682 Emerald Cave Housing 944 General Long-Term Debt Aooaunt Grasp 114,570 Totals $1_ 15,_ $115,514 -39- ' CITY OF HUNTINGTON BEA ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 10. IIdI'MFMID TRAMALTICM (CQJl' NUM): b. Operating Transfers In/Out: Belay is a schedule reconciling operating transfers in and out (expressed ' in thousands) : Operating Transfers In, GavernmwTtal Funds $5,175 ' Operating Transfers In, Proprietary Funds 527 ' Total Operating Transfers In $5,702 Operating Transfers Out, Goverimiental Funds $5,667 ' Operating Transfers Out, Proprietary Funds 35 Tbtal Operating Transfers Out $5,702 c. Residual Equity Transfers In/Out ' Below is a schedule reconciling residual equity transfers in and out (expressed in thousands) : ' Residual Equity Transfers in $3,115 Transfer from Mello-Roos Capital Project Fund to ' Mello-Roos Debt Service Agency Fund which does not disclose a statement of revenue and expense 402 ' Tbtal Residual Equity Transfers Out $3_ ' 11. PROPRIETARY FMMS SU MiENMY 320aaumam a. Segment Information for Enterprise Funds: The City maintains four enterprise funds; Water Utility, Meadowlark Golf ' Course, Emerald Cave Housing and Emergency Fire Medical. Certain key financial data was as follows (expressed in thousands) : -40- STY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 11. Y 31MMS SUPPL130mmy no mmcv: a. Segment Information for D*Rx=ise Funds: MEADOWLARK IIMERAID ZGENCY iMM GOLF COVE FIRE iTI'II.ITY COURSE HOUSING MIDICAL TOTAL Operating $13,634 $314 $598 $2,755 $17,301 Revenues Depreciation 1,210 18 82 0 1,310 Operating 1,633 296 255 1,028 3,212 Income (Loss) Net Income (Loss) 2,894 279 76 997 4,246 Contributed 1,500 0 0 0 1,500 Capital Received, Net Net Acquisitions 2,800 0 0 0 2,800 (Dispositions) of Fixed Assets Net Working 12,503 1,443 1,886 1,353 17,185 Capital Total Assets 47,110 4,624 7,129 1,370 60,233 Long_Tenm 349 1,601 5,505 0 7,455 Obligations Net of Current Portion Total Equity 44,036 2,950 1,573 1,353 49,912 -41- CITY OF HUNTINGTON BEAD ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 11. FUNDS SUPPLEMENTARY IMUOPMON (CQUMMED) : ' b. Contributed Capital: ' Below is a schedule of the changes in contributed capital during the year (expressed in thousands) Meadowlark Emerald Emergency Water Golf Cave Fire Bguipment ' Utility Course Housing Medical Replacement Additions Developer ' Contributions $1,500 - - - - Contributions ' from other funds - - - - 539 Net Increase ' (Decrease) 1,500 - - - 539 Contributed ' Capital July 1, 1990 35,958 1,267 1,288 311 14,221 Contributed $37,458 $1,267 $1,288 $311 $14,760 Capital, June 30, 1991 ' 12. GENERAL IIONr-TERM DEBT: ' Below is a summary of changes in general long-tern debt for the year ending June 30, 1991 (expressed in thousands) : 1 -42- JITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 12. GENERAL IARX3-JP DEBT (Qmanww) : Balance July 1, June 30, 1990 Additions (Retirements) 1991 1970 Park Bonds $1,975 - (350) 1,625 Public Facilities Corporation Leasehold 2,530 - (260) 2,270 Mortgage Bonds- 2nd Issue Parking Authority 565 - (140) 425 Revenue Bonds Civic Inprovement Corporation Certificates 19,380 - (245) 19,135 of Participation-1986 Civic 7nprovement Corporation Certificates 15,025 - (135) 14,890 of Participation-1989 Ccupwmted Absences 4,321 401 - 4,722 Advances From 104,849 11,076 (1,355) 114,570 Other Funds Amptmts Due Under Owner Participation 1,587 4,073 - 5,660 and Disposition and Development Agreements y Public Financing Authority Revenue Bonds 26,240 - (295) 25,945 w Mortgages Payable 2,462 - (1,050) 1,412 Reservoir Hill Assessment Bonds 1,654 - (3) 1,651 Total $18�0,588 $15_,_ $3 833 $19_ -43- CITY OF HUNTINGTON BE* ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 12. GMWM IAA-TERM DEBT (CCWrINUED) : ' a. 1970 Park Bonds: On March 1, 1970 the City sold $6,000,000 of general obligation bonds to ' acquire and construct park facilities. Principal matures annually on March 1st with interest, at 6%, payable semi-annually. The annual debt service requirements to amortize the bonds outstanding at June 30, 1991 are as ' follows (expressed in thousands) : Year ErxiinI ' June 30, Principal Interest Total 1992 $370 $ 98 $ 468 1993 395 75 470 ' 1994 415 52 467 1995 445 27 472 Total $1,625 $252 $1,877 ' b. Huntington Beach Public Facilities Corporation Leasehold Mortgage Bonds- Second Issue: On September 1, 1972 $5,000,000 of leasehold mortgage bonds were issued to ' construct the Central Library ccuplex. The bonds are secured by a lease which requires the City's General Fund to annually transfer $399,000 to the Public Facilities Corporation's Debt Service Fund. Principal matures ' annually on September 1st with interest ranging from 5.0% to 5.9% per annum Payable semi-annually. The annual debt service requirements to amortize the bonds outstanding at June 30, 1991 are as follows (expressed in thousands) : 1 Year Ending ' June 30, Principal Interest Total 1992 $ 270 $117 $ 387 1993 290 101 391 ' 1994 305 84 389 1995 320 66 386 1996 340 46 386 1997 360 28 388 ' 1998 385 10 395 Total $2_0 $_ $2_722 ' -44- ,ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 12. GENERAL Wb -TERM DWr (CM?rnWED) : c. Parking Authority Revenue Bonds: On September 1, 1968 $2,300,000 of revenue boards were issued to construct off-street parking intprovements. The boards are secured by a lease which requires that the City budget annual transfers to the Parking Authority sufficient to meet the debt service requirements on the bonds. Principal w matures annually on September 1 and bears interest at 5.25% per annum, payable semi-annually. The annual debt service requirements to amortize the bonds outstanding at June 30, 1991 are as follows (expressed in thousands) : Year Ending June 30, Principal Interest Total 1992 $150 $18 $168 A 1993 160 10 170 1994 115 3 118 Total $425 $31 $456 d. Huntington Beach Civic Inprovement corporation Certificates of Participation- 1986: On July 15, 1986 the Huntington Civic Improvement Corporation issued $20,000,000 of certificates of participation in order to defense the Huntington Beach Public Facilities Corporation leasehold Mortgage Bonds- First Issue and construct certain parking facilities. The certificates are secured by a lease on the Civic Center camplex which requires the City,s General Fund to transfer to the Civic IuVrovement Corporation an amount equal to the annual debt service requirements on the certificates. The interest rates on the certificates vary between 4.75% and 7.9%. Interest is payable semi-annually on February 1st and August 1st with principal maturing annually on August 1st. Debt service requirements to maturity are as follows (expressed in thousands) : -45- ' . CITY OF HUNTINGTON BEAD ' NOTES TO FINANCIAL STATEMENTS JONE 301 1991 12. GENERAL ICtrr-!'ERM DEBT (COWMIUM): d. Huntington Beach Civic Inprovenent Corporation Certificates of Participation- 1986: Year Ending June 30, Principal Interest Total ' 1992 $ 260 $1,479 $1,739 1993 275 1,462 1,737 1994 295 1,443 1,738 ' 1995 315 1,422 1,737 1996 335 1,399 1,734 1997 360 1,374 1,734 1998 385 1,346 1,731 1999 415 1,316 1,731 2000-2007 4,715 9,079 13,794 2008-2016 11,780 5,234 17,014 ' Total $19_5 $25_ $44_ ' e. Huntington Beach Civic Improvement Corporation Certificates of Participation- 1989: ' In August, 1989 the Civic Improvement Corporation issued $15,025,000 of additional certificates of participation to provide further funds far ' parking stricture and other public iarrovempzits in the Main/Pier redevelopment Project area. As described in note 2, the Civic Improvement corporation owns the Civic Center complex which represents the security for the certificates. The City will annually transfer sufficient monies to fund the debt service requiremexts on the certificates. twee interest rates on the certificates vary between 5.9% and 7.0% with interest payable semi- annually on February 1st and August 1st with principal maturing annually on t August 1st. Debt service requirements to maturity are as follows (expressed in thousands) : ' -46- CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 12. GENERAL ICVG-TIItM DEBT (00ffrnME D) : e. Huntirx toaz Beach Civic Improvement Corporation Certificates of Participation- 1989: Year Ending June 30, Principal Interest Total 1992 $ 180 $1,021 $1,201 1993 190 1,010 1,200 1994 205 998 1,203 1995 215 985 1,200 1996 230 971 1,201 1997 245 955 1,200 1998 260 939 1,199 1999 275 921 1,196 2000 295 902 1,197 2001 315 882 1,197 2002 335 860 1,195 2003 360 837 1,197 2004 385 811 1,196 2005-2020 11,400 12,369 23,769 Total $14,890 $24,461 $39,351 f. Compensated Absences Payable: There is no fixed payment schedule to pay the 1 fund liability of $4,722,000 for compensated absences earned through June 30, 1991. g. Long-term Advances from Other Funds: There is no fixed repayment schedule for the Redevelopment Agency to pay w. the long-term advances from the City which totalled $114,570,000 at June 30, 1991. These advances were used to fund the operating and capital expenditures of the Redeveloprent Agency. Below is a description of the various transactions (expressed in thousands) : -47- ' • CITY OF HUNTINGTON BEA ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 12. GENERAL LZNG-TERM DEBT (CM?rn M) : ' g. Long-term Advances fran Other Funds: General Fund ' Cash Advances from 1979 to 1991 $19,820 Land Sales from 1982 to 1991 32,902 Interest on above amounts 13,238 Total Advances from General Fund 65,960 ' Special Revenue Funds: Park Acquisition and Development Fund: ' Land Sale in 1983 1,741 Deferred Development Fees 247 Interest on above amounts 491 Total Advances from Park Acquisition 2,479 ' Develops nt Fund Sewer Fund: Advance in 1990/90 175 ' Deferred Develcpment Fees 38 Interest on above ammmts 59 Total Advances from Sewer Fund 272 ' Drainage Fund: —" Advance in 1987/88 250 Deferred Development Fees 54 Interest on above amounts 149 ' Total Advances from Drainage Fund 453 Gas Tax Fund: Advance in 1988/89 500 ' Interest on above amounts 153 Total Gas Tax Fund 653 Grant Floyd: ' Advances fray 1983 to 1989 1,173 Total Special Revenue Funds $5,030 Capital Projects Funds ' Capital Improvement Fund: Advance in 1989/90 200 Interest on above amounts 38 ' Total Capital Improvement Fund 238 Parking Structure: Advance in 1987/88 and 1989/90 14,819 ' Interest on above amounts 3,222 Total Parking Structure Fund 18,041 Total Capital Projects Funds $18,279 -48- t .JITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 12. GENERAL Iarr-TERM DEBT (CMT1'I WM) : g. Img-term Advances from Other Funds: M Debt Service Funds: Public Financing Authority: Advances from 1988 to 1990 23,261 Interest on above at varying rates 358 Total Debt Service Funds 23,619 Enterprise Funds Water Fund: Advances from 1986/87 to 1988/89 1,138 Interest from 1987 to 1990 524 Deferred Development Fees 20 Total Water Fund 1,682 Total Advanced from Other Funds $114,570 The interest on the above amounts was computed at varying rates. h. Amounts Due Under Owner Participation and Disposition and Development Agreements: In 1988 the Redevelopment Agency entered into an agreement with a private party (Robert Mayer Corporation) to receive a loan to relocate tenants of a mobile home park and to make public improvements that would be reimbursed by the Agency. Robert Mayer Corporation agreed to construct hotels and residential developments. At year end, the amounts to be remrbursed were as follows (expressed in thousands) : Public Improvements and Relocation $3,468 Eq3enditures Made by Mayer Direct Loans 2,192 Total $5,660 -49- ' • CITY OF HUNTINGTON BEAD ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 32. GMGMn I4MG-SUM DEBT (COUrn ED) h. Amounts Due under Owner Participation and Disposition and Development Agreements: ' This total will be repaid to Robert Mayer Corporation by a pledge of tax increment and transient occupancy tax revenues generated by the hotel and residential developments. The advances bear interest at 10% per annom. ' payments are due quarterly. During the year $233,000 of interest was paid on the advances and $190,000 of unpaid interest was outstanding at June 30, 1991. ' i. Public Financing Authority Revenue Bonds: On May 1, 1988 the Public Financing Authority issued $26,775,000 of Revenue Bonds to finance loans to four of the Redevelopment project areas. The ' bonds are secured by four separate loan agreements between the Public Financing Authority and the Redevelopment Agency. Each loan agreement is secured by a pledge of all taxes levied upon all taxable property within ' the related project area. Interest on the bands ranges from 5.75% to 8.375%. Interest is payable semi-annually on May 1st and November 1st. Principal matures annually on November 1st. Debt service requirements are as follows (expressed in thousands) : Year Ending ' June 30, Principal Interest Total 1992 $ 305 $2,131 $2,436 ' 1993 325 2,111 2,436 1994 340 2,089 2,429 1995 370 2,065 2,435 1996 405 2,038 2,443 1997 430 2,009 2,439 1998 465 1,976 2,441 1999 495 1,940 2,435 ' 2000-2007 5,735 13,775 19,510 2008-2018 17,075 4,858 21,933 ' Total $25,945 $34,992 $60,937 -50- 'ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 12. GENERAL Utrr-TERM DEBT (OONrZN JED) : j. Miscellaneous Notes Payable: In 1988 the Redevelopment Agency purr ased property in the Main/Pier w Project area and assumed three separate mortgages. The mortgages bear interest at lit with debt service payable monthly according to the mortgage contract. 4. Below is a schedule of debt service requiXWwnts to maturity (expressed in thousands) . Fiscal Year Ending June 30, Principal Interest Total 1992 $614 $117 $731 1993 798 88 886 Total $1,412 $205 $1,617 k. Reservoir Hill Assessment Bonds: M In January, 1989, the City issued $1,653,905 of special assessment bonds to finance certain public in rovements. The bonds are to be repaid only by property taxes levied in the assessment district. The City has no liability on the bonds if revenues are insufficient to fund the required debt service but may decide to fund any delinquency or deficiency. Principal matures annually on September 2nd, with interest payable semiannually on March 2nd and September 2nd. Interest rates on the bonds range between 6.5% and 8.1% Debt service requirements to maturity are as follows (expressed in thousands) -51- ' • CITY OF HUNTINGTON BEAD ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 12. GENERAL IarrJ IIK DEBT (Cmanwm) : k. Reservoir Hill Assessment Bands: Year ' wing June 30, Principal Interest Total 1992 $ 4 $133 $137 1993 40 129 169 1994 45 125 170 ' 1995 50 122 172 1996 50 118 168 1997 55 114 169 1998 60 110 170 ' 1999 65 105 170 2000 70 100 170 2001-2011 1,212 610 1,822 tTotal $1_1 $1_666 $3__ ' m. Defeased Bonds Outstanding: AS of June 30, 1991, there were $5,010,000 of defeased Public Facilities Corporation Leasehold Mortgage Bonds- 1st Issue outstanding. The debt ' service on these bonds is being paid from an escrow account consisting of guaranteed federal securities with yields sufficient to fund all of the required debt service. Accordingly, the bonds payable are not shown in the taccompanying financial statements. -52- CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 13. TICERIEl M FMW Ig*X;-'1'= DEBT: The following is a summary of changes in poroprietaxy fund long-term debt for the year ending June 30, 1991 (eXpresSed in thousands) : Balance Balance Outstanding Outstanding July 1, June 30, 1990 Additions (Retirements) 1991 1963 Water Revenue Bonds $677 $ - $(314) $363 San. Joaquin 113 - (56) 57 Reservoir Note Meadowlark Golf 1,669 - (33) 1,636 Course Note Flnpra 1 rl Cove Certificates of Participation, net of unamortized discount of $39 4,548 13 - 4,561 Note Payable 259 - (81) 178 M County of Orange Oouperzated Absences 161 17 - 178 Advances from other 944 - - 944 Funds Claims Payable 6,962 4,730 (5,561) 6,131 Public Financing Authority Certif icates of Participation 5,510 - - $5,510 Total $20_ $4,760 $ 6 045 $19,558 The current Portion of the proprietary fund long-term debt is $1,244,000 -53- CITY OF HUNTINGTON BEIG ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 13. PINNRILTARY FM ICNG-M M DEBT (CCNTIN ED): a. 1963 Water Revenue Bonds: On November 1, 1963 the City sold $3,750,000 of revenue bonds to construct water improvements. The bonds are secured by revenues of the Water Fund. Principal matures annually on November 1 and bears interest at 3.5% per arv=, payable semi-annually. The annual debt service requirements to amortize the bonds outstanding at June 30, 1991 are as follows (expressed in thousands) : Year Ending June 30, Principal Interest Total ' 1992 $200 8 $208 1993 163 3 166 Total $363 $11 $374 The bond indenture requires that the Water Fluid net revenues equal or exceed 1.25 times the annual debt service requirement (principal and interest) . Net revenues are defined as gross revenues less maintenance and ' operation revenues, excluding depreciation. The City has complied with this requirement as shown below (in thousands) : ' Gross revenues $14,913 Operating expenses, excluding $10,791 interest and depreciation Net revenues $ 4,122 ' Debt service $ 209 Debt service coverage 20.0 ' -54- CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 13. PROPRIEnwY F@ID LQM-TE3tM DEBT (CM4TINOED): b. San Joaquin Reservoir Note Payable: In 1979 the City and several other local cities and water districts purchased the San Joaquin Reservoir. The City is paying a portion (13.56%) of the debt service for the 1961 construction of the reservoir plus operating and movement costs. In the event of default, the expenses and/or debt service payments shall be reallocated among the remaining non- defaulting a -iers in proportion to the percentage interest owned as though the party in default did not exist. 7he City recorded its portion of the reservoir as plant, property and equipment in the Water Utility Fund. Interest on the note is payable semi-annually on December 1st and June 1st with principal maturing on December 1st. Debt service requirements to maturity are as follows (expressed in thousands) : Year Ending June 30, Principal Interest Total 1992 $57 $1 $58 c. Meadowlark Golf Course Notre Payable. In October, 1974 the City purchased Meadowlark Golf Course through a long- term 7% note totalling $2,272,000 (Sales price of $3,200,000 less downpayment of $928,000) . The note payable is collateralized by future revenues and does not represent a general obligation of the City. The City µ has leased the golf course to an outside party for a minim amount of $150,000 annually through 2002 plus a percentage of income based upon gross revenues. From 2003 until 2008 the m;nimm payment will be $200,000 plus a percentage of income above a certain amount of base gross revenues. In 2009 the payment will be $115,703. As part of the City's initial payment of $928,000 the county of Orange contributed $600,000 upon the City's guarantee to use general City funds, when and if necessary, to ensure that Meadowlark Golf Course will be maintained as open space. -55- ' 0 CITY OF HUNTINGTON BEAS ' NOTES TO FINANCIAL STATEMENTS JONE 30, 1991 ' 13. F@ID 14NG-TERM DEBT (CMPIISED): C. Meadowlark Golf course Note Payable: ' The annual debt service (principal and interest) is due on February 28th of each year. Debt service requrements to maturity (assuming ing the percentage of irioane rent does riot exceed the base) are as follows (expressed in thousands) : ' Year Ending ' June 30, Principal Interest Total 1992 $ 35 $115 $150 1993 38 112 150 ' 1994 40 110 150 1995 43 107 150 1996 46 104 150 ' 1997 50 100 150 1998 53 97 150 1999 57 93 150 ' 2000-2009 1,274 548 1,922 Total $1_636 $1_6 $3 122 I d. Emerald Cove Housing certificates of Participation: Cn June 1, 1984, the Redevelopnent Agency sold certificates of ' participation to finance the "Instruction of a senior citizens apartment ccuplex. The certificates bear interest at 9.5% per amnmt, which is payable semi-am1mily. 7 e entire principal is due on June 1, 1994 A discount of $126,500 is being amortized to maturity. The unamortized ' discount at June 30, 1991 is $39,000. Below is a schedule of debt service requirements to maturity (expressed in thousands) : I I I -56- I .:ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1921 13. PROfPRIL'PARY FMID IZN3-qM DEEP (CMTPaN=): d. Emerald Cave Housing Certificates of Participation: Year End in4 June 30, Principal Interest Total 1992 $ 0 $ 437 $ 437 1993 0 437 437 1994 4,600 400 5,000 4,600 1,274 5,874 less discount (39) - (39) Totals $4_ $1_ $5,835 e. Note Payable- Canty of Orange: In July, 1987 the City received $409,140 of Fire Cann Mications Equipment under an agreement with the County of Orange whereby the City will repay the County for the equipment. The equipment, and note are recorded in the Equipment Replacement Fund, an internal service fund. Interest rates on the note vary between 5.4% and 6.5%. Interest is payable amorally on December 1st and June 1st with principal maturing on June 1st. Debt service requirements are as follows (expressed in thousands) : Year &xUng June 30, Principal Interest Total 1992 $ 86 11 97 1993 92 6 98 Total $178 $17 $195 -57- ' • CITY OF HUNTINGTON BE* ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 13. PRopttlLIMY FM LQW,-TERM DEBT (cQJmm): f. Ccapensated Absences: There is no fixed repayment schedule to repay the ccupensated absences for ' proprietary fund types of $178,000 at June 30, 1991. g. Advances Fran Other Funds: ' There is no fixed repayment schedule to repay the amounts advanced from the General F1rd and Park Acquisition and Development Fund to the IInerald Cove Housing FUnd of $944,000 at June 30, 1991. $832,000 was advanced from the Park Acquisition and Development Fund and $112,000 was advanced in 1984 ' from the General Fund which helped fund the initial operation of the apartment coWlex. Both advances bear no interest. ' h. Claims Payable ' There is no repayment schedule for claims payable of $6,131,000 as of June 30, 1991 (see note 9) . ' i. Public Financing Authority Certificates of Participation: ' In March, 1989, the Public Financing Authority issued $5,510,000 of certificates of participation to finance the purchase of capital equipment. ' The amount is recorded as a liability of the IIguipment Replacement Fund, an internal service fund. Interest on the certificates ranges from 6.75% to 6.95%. Interest is payable semiannually on February 1st and August 1st With principal maturing annually of February 1st. Debt service ' reVirements to maturity are as follows (expressed in thousands) : I I -58- -ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 301 1991 13. PRrOFRIE 19LRY FMW LONG-TERK DEBT (CONTnMM)s i. Public Financing Authority Certificates of Participation: Year Ending June 30, Principal Interest Total 1992 $960 $ 376 $1,336 1993 1,025 313 1,338 1994 1,100 243 1,343 1995 1,170 168 1,338 1996 1,255 87 1,342 Total $5� $1_87 $6_ 14. XM.1O-ROOS BCMS: In August, 1990, the City issued $2,400,000 of Mello-Roos Special Tax Bonds to finance the acquisition and lion of public improvements within the Huntington Beach Ccmmmity Facilities District 1990-1. The bonds are secured by a special tax levy on property within the district. The City is not liable to make any bond payment if the taxes collected are not sufficient to cover the debt service. Interest rates on the certificates vary from 6.35% to 7.6%. Interest is payable semi-annually on April 1st and October 1st with principal maturing annually on October 1st. Debt service requirements are as follows: Year Ending June 30, Principal Interest Total 1991 $ 0 $ 180 $ 180 1992 0 180 180 1993 25 179 204 1994 25 177 202 1995 30 176 206 1996 30 174 204 1997 30 172 202 1998 35 169 204 1999 40 167 207 2000 45 164 209 2001-2021 2,140 1,959 4,099 Total $2,400 $3,697 $6,097 -59- • CITY OF HUNTINGTON BEA• ' NOTES TO FINANCIAL STATEMENTS JUNE 301 1991 ' IS. CHANGES IN F'IM ASSETS: ' Below is a schedule of the changes in the general fixed assets account group for the year (expressed in thousands) : Balance Balance ' July 1, 1990 Additions Dispositions June 30, 1991 Land $61,468 $1,322 ($58) $62,732 ' Buildings 24,443 17 (34) 24,426 Other 1,733 9,180 10,913 Construction in Process 7,146 7,563 (9,180) 5,529 Total $94__ $18__ $9 272 $10_3,_ ' Below is a schedule of changes in proprietary fund fixed assets for the year (in thousands) : ' Enterprise Funds: Balance Balance July 1, 1990 Additions Dispositions June 30, 1991 band $4,732 - (1) $4,731 ' Buildings 5,334 - (2) 5,332 MadUrbery and 50,660 2,851 (57) 53,458 Equipment ' Total Cost 60,726 $2,851 $60 63,521 Less aomm ulated (24,332) (25,615) ' depreciation Net Book Value, $36,394 $37,906 Enterprise Funds 1 1 -60- 1 .:ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 15. CHANMS IN TYPE ASSETS (CM?rnI M): Internal Service Funds: Balance Balance July 1, 1990 Additions Dispositions June 30, 1991 Machinery and $27,347 $3,717 ($2,199) $28,865 BauipIQent Less accLmnxlated (13,154) (2,438) 1,257 (14,335) depreciation Net Book Value, $14,193 $1�9 $942 $14,530 Internal Service Funds 16. RESERVES AMID DESIGI MCM OF F@ID EMITY: Under generally accepted accounting principles, the City is allowed to set up reserves and designations of fund equity. Reserves indicate amounts which cannot be appropriated in future periods or which are legally set aside for a specific future use. Designations represent amounts that the City has made tentative plans to use in a future period. The City's reserves and designations are described below (e)qressed in thousands) : -61- ' • CITY OF HUNTINGTON BEJ0 ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 16. RESERVES AMID DESIQUMCNB OF FM EgUITY (CQnII=M): Special Debt Capital Tnvst General Revenue Service Projects and Fund Flmds Flwrds Funds Agency Total ' RESERVES $1,576 $2,177 $ - - $ - $ $3,753 I ;-term 19,932 2,098 23,619 14,819 - 60,468 receivables Reimbursement - 421 - - - 421 ' agreements Capital 35 - - 37,801 - 37,836 projects ' Debt service - - 12,219 - - 12,219 ' Pension Payments - - - - 175 175 Land held for - - - 23,633 - 23,633 resale - - - - Inventory 325 325 ' TOTAL RESERVES 21,868 4,696 35,838 76,253 175 138,830 DESIGNATIONS 1 .9 ibsequent year's e)penditures 1,300 4,117 - - - 5,417 ' TO►T!AL RESERVES $23,168 $8,813 $35,838 $76,253 $175 $144,247 AND DESICTiATIONS - - a. Reserves for encumbrances are amounts committed for unperformed services or for undelivered goods where a commitment to purchase has been made. ' b. Reserves for advances to other funds, deposits and other assets are for amounts not scheduled to be repaid until future years, and for which there is no offsetting deferred revenue. 1 -62- .:ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 16. RESERVES AMID DESIGN=C CIS OF FM EQ[TITY (CaJPnWE D) : c. Reserves for reimbursement agreements are expected future reimbursements to developers for sewer and drainage construction. d. Reserves for continuarg projects are amounts committed for long-term projects not yet ocupleted. e. Reserves for debt service are aroUnts accumulated in debt service funds or set aside in another fund in accordance with a bond indenture or similar covenant. f. Reserve for pension payments are amounts accuailated in the Retirement Supplement Pension Trust fund to fund future pension payments. g. Reserves for land held for resale represent lard held by the Redevelagnent Agency that is legally committed for resale. h. Reserves for inventory are for general supplies inventory. i. Designations for subsequent years' expenditures are made to fund deficits budgeted in subsequent years. 17. COMM17HEWS AMID : 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. Mortgage Revenue Bonds: The City established a program in February, 1983 to provide funds for the purchase of home mortgages within the City. Under this program, a total of $40,000,000 of mortgage revenue bonds has been issued, $20,000,000 in March, 1983 and an additional $20,000,000 in July, 1984. In 1983 the City also issued $16,000,000 of Loans to bender Revenue Bonds to construct an apartment complex for law and moderate income housing. In 1985 the City -63- • CITY OF HUNTINGTON BEAD 1 NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 17. CQ0TMEW TS AMID CX2 T11130 ZIES (CWTIN ID): b. Mortgage Revenue Bands: also issued $25,000,000 of Malti-Family Housing Revenue Bonds for construction of various apartment complexes. The boards are payable from, and are secured by, a pledge of payments made 1 on the home mortgages and all funds held by the trustee under the indenture agreements. The City is not required to make payments on the bonds from any other source. Therefore, these programs have been excluded from the 1 accompanying combined financial statements. c. 1988 Owner Participation Agreement-Mola Development Corporation: 1 In July, 1988, the Redevelop:rent Agency, the City and Mola Development 1 Corporation (Mola) entered into an owner participation agreement for the Tbwnsquare project (a residential and commercial development in the Main/Pier project area of the Redevelopment Agency) . Certain property which was owned by third parties was acquired by both the Agency and Mola. This property was combined with adjacent property owned by Mola, property owned by the Agency and property sold to the Agency by the City. The combined land was used for the development. During the year the Agency ' received the final $439,000 of its land value. When the individual residential units are completed and sold, the proceeds ' will reimburse the Redevelopment Agency for the market value of its land and pay a 9% developers fee to Mola. The remaining proceeds will be divided between the Agency and Mola based on the value of the respective 1 land contributed by each party. One year after the commercial units are completed, Mola will be obligated to pay to the Agency 50% of the net operating inane of the commercial ' units for the proceeding year and on a monthly basis thereafter. The Agency has tentative plans to sell this commercial portion as soon as economically feasible. i 1 1 -64- 1 -ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 17. AMID (amfrnmED)s d. Disposition and Development Agreement-Robert L. Mayer Corporation: In August, 1988, the Redevelopment Agency, the City and Robert L. Mayer Corporation (Mayer) entered into a disposition and development agreement for the development of hotels, residential and commercial parcels in the Main/Pier project area. The development will take place in three different residential and six different commercial phases. Mayer loaned. the Agency $2,192,000 to relocate residents of a mobilehame park in the area and expended $3,468,000 of its own funds for public improvements in the area. Mayer will be repaid these amounts by the Agency pledging a portion of the tax increment and transient occupancy tax revenues that the iztzovements generate. After the is repaid, the Agency will also be liable to rebate to Mayer additional tax increment and transient occupancy tax revenue generated by the project when the project is completed. The Agency purchased land from the City for $22,400,000. This sales price will be repaid to the City using future tax increment revenues of the Main/Pier project area. 2-me land purchased from the City which will be used for the commercial portion of the development will be leased by the Agency to Mayer for 99 years under an operating lease. Zhe remaining laird will be used for the residential development. When the residential units are sold, the Agency will receive revenue based on a specific schedule in the agreement. When Mayer commits to additional hotel developments, the City will be liable to construct additional public improvements. -65- ' • CITY OF HUNTINGTON BEACID ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 17. ODrRUMMA'8 AND CMRMNM2KMES (CCffrn QED): ' d. Disposition and Development Agreement Robert L. Mayer Corporation: At June 30, 1991, $5,377,000 of the land representing the residential ' portion is recorded as "Land Held for Resale" on the balance sheet of the Redevelopment Agency's Capital Projects Fund. ' e. Owner Participation Agreement - Abdelmuti: ' In 1991, in order to assist a private business in the demolition of a building and the construction of a new building the Redeve1q:ment Agency agreed to subsidize the the party's loss of income up to $1,530,000, make ' public improvements to the area totalling $250,000 and to loan the business $3,500,000 for 15 years at 7% interest to make improvements to a building in the Main/Pier Redevelopment Project Area. At June 30, 1991, no amounts ' had been expended for these its. ' f. Arbitrage: Internal Revenue Code Section 148, requires that governmental obligations ' be subject to "arbitrage" restrictions where the investment exceeds the yield of the debt issued. Such amounts must be rebated to the federal gdverimexit every five years unless a rebate exception is made. As of June t 30, 1991, the following debt issues have arbitrage rebate amounts as follows (expressed in thousands) : ' 1989 Public Financing Authority Certificates of Participation (note 13i) $ 74 1989 Civic Improvement Corporation Certificates of 9 ' Participation (note 12e) 1988 Public Financing Authority Revenue Bonds (note 12i) 145 1989 Reservoir Hill Assessment Bonds (Note 14) 8 ' Total $236 ' These amounts are not recorded as liabilities because it is not probable that they will be repaid, since the City believes there will be significant changes in arbitrage regulations prior to the required payment date. -66- CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 18. JMW vEta'tIIm: a. Big Cities Independent Cities Ewess Pool Joint Authority: In October, 1988, the City and the cities of Pomona, San Bernardino, Santa Ana and Oxnard formed the Big Independent Cities Ewcess Pool Joint Powers Authority, (BICEP) to finance a clams payment pool for certain liability claim In excess of $1,000,000 per claim. BICEP is governed by a Board of Directors which is composed of one director representing each City appointed by each City's City Council. A director w mist be a member of the City Council or an official or staff person of the City which he or she represents. Any changes to the board mist be approved by the current board members. Each participating City pays an insurance premium to BICEP which is used to fund the operating and debt service expenditures of BICEP. The participants' shares of the assets, liabilities and fund equity are as follows: Huntington Beach 21.43% Oxnard 15.62% San Bernardino 19.09% Santa Ana 30.27% Pomona 13.59% In December, 1988, BICEP issued $15,055,000 of Insurance Program Revenue Boris, 1988A which was used to initiate the insurance pool. The interest rages on these bonds varies between 6.5% and. 8.25% and are payable from premium payments Er an the participating cities. The premiums paid from the participants represents the security for the debt. Debt service requirements to maturity are as follows (in thousands) : Year Em ng June 30 Principal Interest Total 1992 $390 $1,178 $1,568 1993 425 1,151 1,576 1994 450 1,120 1,570 1995 485 1,087 1,572 1996 520 1,050 1,570 1997 560 1,010 1,570 1998 620 967 1,587 1999 670 918 1,588 2000-2009 10,485 8,639 19,124 Tbtal $14,605 $17_ $31_ -67- ' • CITY OF HUNTINGTON BEA* ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 ' 18. JOINT VENTURES (CONTINUED) : ' a. Big Cities Independent Cities Excess Pool Joint Authority: The City's share of the above liability is $3,129,000. The June 30, 1991 financial information for BICEP is as follows (expressed in thousands) : ' BICEP City Balance Sheet Tbtal Share ' Assets $16,658 $3,569 Liabilities 15,057 3,222 ' Equity 1,601 347 Revenue and Expense ' Revenues 2,989 640 Expenses (2,032) (435) ' Net Nam-Operating Revenue (615) (131) (use) ' Excess of Revenue aver 342 74 Expense b. Authority for Orange County-city Hazardous Materials Emergency Response Authority: ' The City also participates in the Authority for Orange county-city Hazardous Materials Emergency Response Authority (Hazmat Authority) . The ' Hazmat Authority coordinates responses to hazardous material emergencies to provide an equitable sharing of risks associated with such emergencies. ' The Hazmat Authority consists of the cities of Huntington Beach, Santa Ana, Newport Beach, Anaheim and the County of Orange. The board of directors consists of a voting member and an alternate appointed by the governing ' body of each member agency. -68- -tTY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 18. JOIW VEIJI'IAM (OOrT MMED) b. Authority for Orange Cauity-City Hazardous Materials Emergency Response Authority: Each year the board of directors adapts a budget and bills the associated costs to each member agency. Below are the participants shares of the assets, liabilities and fund equities: City of Anaheim 25% County of Orange 25% City of Santa Ana 25% City of Huntington Beach 12.5% City of Newport Beach 12.5% Zhe June 30, 1991 financial information for the Hazmat Authority is as follows (expressed in thousands) : Hazmat City Balance Sheet Total Share Assets $222 $28 Liabilities 77 10 Equity 145 18 Revenue and F�tpense Revenues 222 28 FqDenses 76 10 Excess of Revenue over Expenses 146 18 -69- ' CITY OF HUNTINGTON BE* ' NOTES TO FINANCIAL STATEMENTS JUNE 301 1991 ' 19. 07MM IM &TICK: ' a. Actual Expenditures Exceeding Appropriations: Expenditures exceeded appropriations at the departmental level in the funds ' shown as follows (expressed in thousands) : General Fund: Adninistration $19 City Treasurer 6 City Clerk 2 Special Revenue Funds: Grant Fund Fcor=ic Development 43 Public Ccm amications City Aduinistrator 14 Capital Outlay 28 tDebt Service Funds: Redevelopment Agency ' Non-Departmental 212 Debt Service 253 Civic I Twovement Corporation Debt Service 105 b. Retained Earnings Deficit: ' 'IY:e B uignent Replacement Fund, an internal service fund had a deficit retained earnings balance of $398,000. This deficit will be relieved ' through increased charges to user departments. 20. TA8 ACID PMENUE ANMCIPATICN NOTES: At June 30, 1991, $4,500,000 of Tax and Revenue Anticipation Notes bearing interest at 6.25% were . The notes are due July 31, 1991. -70- _ITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS DUNE 30, 1991 21. PRICR PERIOD a. Reservoir Hill Debt: In prior years, the City excluded the debt of the Reservoir Hill Assessment M District fran the General Long-Term Debt Account Group. The amount should have been included as of June 30, 1991. Below is a schedule showing the restatement of the prior year error (expressed in thousands) : Total Long-Term Debt June 30, 1990 $178,241 Prior Period Adjustment 1,654 Total Long-Term Debt June 30, 1991 $179,895 b. Reservoir Hill Debt Service: In prior years, the City recorded the activity of the Reservoir Hill Debt Service Fund in an Agency F'tud. The amount should be recorded in a Debt Service Ru-d. Below is a schedule showing a restatement of the Activity of the Debt Service and the Agency Flied of Reservoir Hill Assessment District (expressed in thousands) : Total Fkud Equity Debt Service Fluyds at June 30, 1990 $34,927 Restatement to Include Reservoir Hill Activity 298 Debt Service Fund Dquity as Restated $35,225 Total Assets Agency Funds at June 30, 1990 $18,587 Restatement to Exclude Reservoir Hill Activity 298 Agency Fund Assets as Restated $18,289 -71- ' • CITY OF HUNTINGTON BEAAD ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 21. PRICK PERIOD ADJUSTMENM (CONTINUED): c. Iand Held for Resale- Mayer DOA ' In prior years the City overvalued Redevelopment Agency Iand Held for Resale and the Fund Balance of the Redevelopment Agency Capital Projects Fund by $3,000,000. Below is a restatement of the Redevelopment Agency Capital Projects Fund Balance as of June 30, 1990 (expressed in thousands) : Total Fund Equity at June 30, 1990 $39,514 ' Restatement to Properly Reflect Value of Iand (3,000) Held for Resale Total Fund Dquity $36_ as Restated ' d. Water Fixed Assets and Inventories: In prior years the City expensed Certain fixed assets totalling $825,000 ' that should have been capitalized. General supplies inventory totalling $339,000 was not recorded as an asset. Below is a restatement of the Water Fund Retained Earnings as of June 30, 1991: ' Total Retained Earnings at June 30, 1990 $2,859 Restatement to Properly 486 ' Reflect Fixed Assets Restatement to Properly 339 Reflect Inventory ' Total Fluid as $3_684 Restated 22. E TASEUCEMU EVERM: ' a. Tax and Revenue Anticipation Notes: ' On July 1st, 1991 the City issued $5,000,000 of additional Tax and Revenue Anticipation Notes due June 30, 1992. The notes pay interest at 5.0%. -72- CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 301 1991 22. SQBSEQOIIJt EVPNM (ORJi'MOM) : b. Iand E mhange, Pacific Coast Homes: On July 1st, 1991 the Redevelopment Agency agreed to a land ex&onge where the Agency traded lam with, and agreed to pay an additional $426,000 to, Pacific Coast Homes. The amount will be repaid by pledging a portion of the Yorktown/lake tax increment. On August 1st, 1991, the Agency paid $106,000 as the first installment payment. c. Defeasance of Emerald Cove Elands: In September, 1991 the Agency issued $5,735,000 of certificates of participation to "advance-refund" the 1984 Emerald Gave Certificates of Participation (see note 13) . $5,075,972 of these proceeds were deposited in an escrow account consisting of guaranteed federal securities with interest yields sufficient to fund all of the required debt service on the original certificates. Below is an analysis of the eo=xftic gain of the transaction and the difference in cash flows between the old bonds and the new bands (expressed in thousands) . Foo mic Gain Present value of debt service on original COPS disoouuited at $5,418 the effective interest rate target of 7.186% Present value of debt service on new ODPS discounted at (5,549) the effective interest rate target of 7.186% Cash received from defeasance 394 Ebonomic Gain $263 Difference of Cash Flaws Cash flows of debt service on existing ODPS $5,911 Cash flaws of debt service on new CDPS (13,337) Difference in cash flows $7 426 -73- tCITY OF HUNTINGTON BEA* ' NOTES TO FINANCIAL STATEMENTS JUNE 30, 1991 t22. SMMQUERr EVENN (CQdF MED): ' c. Defeasance of Ehexald Cove Bonds: Zhe original certificates which were due in full in 1994 were defeased to ' take advantage of lower interest rates. The interest rates on the original certificates were 9.5% interest rate an the new certificates varied from 4.8% to 7.0%. Debt service requirements are as follows (expressed in ' thousands) : Year ' Ending Principal Interest Total 1992 $0 $194 $194 1993 30 386 416 1994 75 383 458 ' 1995 80 379 459 1996 80 375 455 1997 and after 5,475 6,274 11,749 ' Total $5_ $7_ $13_31 -74- t t FINANCIAL STATEMENTS OF ' INDIVIDUAL FUNDS ' AND ACCOUNT GROUPS 1 t 1 1 1 1 1 1 1 The General Fluid is used to account for all financial activity that is not required to be accounted for in another fund. 1 1 i 1 1 1 1 1 1 CITY OF HUNTINGTON BEACH SCHEDULE B-1 GENERAL FUND COMPARATIVE BALANCE SHEET JUNE 30, 1991 AND 1990 (expressed in thousands) ASSETS 1991 1990 Cash and Investments $9,192 $7,743 Taxes Receivable 3,338 2,985 Other Receivables 1,206 1,415 Interest Receivable 62 103 Inventory 325 284 Due from Other Funds - 97 Advances to Other Funds 66,072 57,140 Deposits and Other Assets 406 - TOTAL ASSETS $80,601 $69,767 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Payable 1,079 2,046 Accrued Liabilities 1,516 1,255 Deposits 303 346 Tax and Revenue Anticipation Notes 4,500 - Deferred Revenue 46,141 41,973 TOTAL LIABILITIES 53,539 45,620 FUND EQUITY Reserved for Other Fund Deficits - 49 Reserved for Inventory 325 284 Reserved for Encumbrances 1,576 2,258 Reserved for Long-Term Receivables 19,932 15,155 Reserved for Capital Projects 35 5,213 Total Reserved Fund Equity 21,868 22,959 Unreserved Designated for Future Year's Expenditures 1,300 - Undesignated 3,894 1,188 Total Unreserved 5,194 1,188 TOTAL FUND EQUITY 27,062 24,147 TOTAL LIABILITIES AND FUND EQUITY $80,601 $69,767 See independent auditors' report and notes to financial statements -75- 1 • • ' CITY OF HUNTINGTON BEACH SCHEDULE B-2 GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the Year Ending June 30, 1991 With Comparative Totals for June 30, 1990 (expressed in thousands) Variance Favorable 1990 ' Budget Actual (Unfavorable) Actual REVENUES: Property Taxes $28,850 $27,917 ($933) $26,061 ' Other Taxes 34,689 31,549 (3,140) 32,378 Licenses and Permits 3,269 3,112 (157) 2,962 Fines, Forfeitures and Penalties 2,419 1,904 (515) 2,256 From Use of Money and Property 4,663 4,227 (436) 4,032 From Other Agencies 9,478 15,369 5,891 8,979 Charges for Current Service 8,780 8,341 (439) 7,028 Other 536 770 234 351 ' TOTAL REVENUES 92,684 93,189 505 84,047 EXPENDITURES: Current: ' City Council 197 197 - 78 City Administrator 1,278 1,297 (19) 491 City Treasurer 694 700 (6) 414 City Attorney 1,411 1,340 71 744 City Clerk 455 457 (2) 275 Administrative Services 3,867 3,793 74 3,375 ' Community Development 3,367 3,032 335 2,515 Fire 14,840 14,169 671 14,148 Police 28,292 28,093 199 26,346 Economic Development 13 2 11 607 Community and Library Services 8,567 8,336 231 8,168 Public Works 21,905 20,221 1,684 18,102 Non-Departmental 7,723 6,100 1,623 7,491 Capital Outlay 177 72 105 750 Debt Service: Interest 325 270 55 112 TOTAL EXPENDITURES 93,111 88,079 5,032 83,616 EXCESS OF REVENUES OVER (UNDER) (427) 5,110 5,537 431 EXPENDITURES OTHER FINANCING SOURCES (USES) ' Operating Transfers In 1,910 2,003 93 1,525 Operating Transfers Out (4,189) (3,215) 999 (2,602 Inventory Increase - 21 ' TOTAL OTHER FINANCING SOURCES (USES) _(2,279) (1,212) 1,067 (1,056) EXCESS OF REVENUES AND OTHER SOURCES OVER (2,706) 3,898 6,604 (625) EXPENDITURES AND OTHER USES ' FUND BALANCE - BEGINNING OF YEAR 24,147 24,147 - 29,543 Prior Period Adjustment - - - 1,377 Residual Equity Transfers In (Note 10) - - 425 Residual Equity Transfers Out (Note 10) (1,133) (983) 150 (6,573) FUND BALANCE - END OF YEAR $20,308 $27,062 $6,754 $24,147 ' -76- 1 • ! 1 1 1 SPEMM REVENUE FMMS i Special revenue funds are used to account for specific revenues that are legally 1 restricted to expenditure for particular purposes. 1 Gas Tax- This fund accounts for financial activity apportioned tinder the street and 1 ffg-y Code of California. Expenditures, may be made for any street-related purpose allowable under the code. Sewer- This fund is used to account for fees received from developers to construct and 1 mau in sewer facilities. Drainage- Mus fund is used to account for fees received from developers to improve and 1 upgrade the City's drainage system. Public Caamix .cations- This fund accounts for revenue received from cable television rights granted within the City limits. These meanies must be spent on cc muzuty- oriented television. Grants- This fund accounts for grant monies received from federal, state and county agencies not accounted for in other funds. Expenditures for these funds are restricted to the granting agencies requirements. Park Acquisition and Development- This fund accounts for fees received from developers to develop the City's park system. Narcotics Forfeiture- This fund accounts for monies received from the State of California that are used for special law-enforcement purchases. Flood Control- This fund accounts for monies received and expenditures made to maintain ' and drove flood control facilities within the City. 1 SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET June 30, 1991 With comparative totals for June 30, 1990 (expressed in thousands) Gas Tax Sewer Drainage ASSETS: Cash and Investments $2,015 $4,789 $3,491 Interest Receivable 20 41 29 Advances to Other Funds 653 272 453 Due from Other Agencies 1 ,190 - - TOTAL ASSETS $3,878 $5,102 13,973 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts Payable $ 15 $ 2 $ - Accrued Liabilities - - - Deposits 14 - - Due from Other Funds - - - Deferred Revenue 153 97 203 TOTAL LIABILITIES 182 99 203 FUND BALANCES: Reserved Encumbrances 904 51 230 Long-Term Receivables 500 175 250 Reserved for Reimbursement Agreements - 25 396 Unreserved Designated for Future Years Expenditures 2,292 567 1,258 Undesignated - 4,185 1,636 TOTAL FUND BALANCES 3,696 5,003 3,770 TOTAL LIABILITIES AND FUND BALANCES $3,878 $5,102 $3,973 -77- ' SCHEDULE C-1 ' Park Acquisition ' Public and Narcotics Flood Totals Communications Grants Development Forfeiture Control 1991 1990 $294 $ 563 $ 525 $1,604 $65 $13,346 $16,816 2 - 14 2 108 237 - 1,173 3,311 - 5,862 1,014 - - 86 - 1,276 5,707 ' 296 $1,736 $3,922 $1,618 JL7 123l774 $ - $ 7 $ 3 $ - $ - $ 27 $ 905 ' -5 _ _ 32 -1 38 10 14 14 - - - - 47 - - 3,311 - = 3,764 3,660 5 7 3,314 32 1 3,843 4,636 3 556 293 140 - 2,177 4,176 ' - 1,173 - - - 2,098 1,959 - - - - 421 432 - - - - - 4,117 3,946 ' 288 - 315 1,446 66 7,936 8,625 291 1,729 608 1,586 66 16,749 19,138 296 $1,736 $3,922 $1,618 67 $23,774 ' -78- t 1 CITY OF HUNTINGTON BEACH • SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES I AND CHANGES IN FUND BALANCES For the year ended June 30, 1991 With comparative totals for the year ended June 30, 1990 (expressed in thousands) Gas Tax Sewer Drainage REVENUES: Other Taxes $ - $ - $ - Licenses and Permits - 34 139 From Use of Money and Property 200 333 250 From Other Agencies 4,538 - - ' Charges for Current Service Other - - - TOTAL REVENUES 4,738 367 389 ' EXPENDITURES: Current: City Council - - - City Administrator - - - ' Police - - - Economic Development - - - Community Services - - - I Non-Departmental - - - Capital Outlay 5,071 590 753 TOTAL EXPENDITURES 5,071 590 753 ' EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 333 223 364 ' OTHER FINANCING SOURCES (USES) : Operating Transfers In - - ' Operating Transfers Out (1,450) 40 Total Other Financing Sources (Uses) (1,450) 40 - EXCESS OF REVENUES AND ' OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES (1,783) (263) (364) ' FUND BALANCES - BEGINNING OF YEAR 5,479 5,266 4,244 Residual Equity Transfers In - - - ' Residual Equity Transfers Out - - 110) FUND BALANCE - END OF YEAR $3,696 $5,003 $3,770 I -79- ' I I ' • • SCHEDULE C-2 Park ' Acquisition Public and Narcotics Flood Totals Communications Grants Development Forfeiture Control 1991 1990 $327 $ _ $ - $ _ $ _ $ 327 $ 301 344 517 982 25 351 154 97 10 1,420 2,198 ' _ 1,584 59 1,249 _ 7,430 6,232 239 1 - - - - 1 28 353 1,935 557 1,346 10 9,695 9,980 - - - - - - 23 t 267 - _ - _ 267 - 9 46 55 1,390 343 - - - 343 139 ' _ 717 74 _ - 791 54 54 74 462 1.397 226 - 8,573 8,230 ' 341 1,531 1,471 272 54 10,083 9,782 12 404 9 4 1,074 44 (388) 198 425 (1,915) (1,526) - - 425 - (1,915) (1,526) ' 12 404 (914) 649 (44) (2,303) (1,318) 279 1,119 1,814 937 - 19,138 19,621 ' _ 206 - _ 110 316 1,848 292 402 (1,013) ' 291 $1,729 S 608 $1,586 $ 66 116,749 119,138 ' -80- 1 CITY OF HUNTINGTON BEACH SCHEDULE C-3 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended June 30, 1991 (Continued) (expressed in thousands) GAS TAX Variance Favorable Budget Actual (Unfavorable) REVENUES: From Use of Money and Property $360 $200 $(160) From Other Agencies 9,121 4,538 (4,583) TOTAL REVENUES 9,481 4,738 (4,743) EXPENDITURES: Capital Outlay 12,105 5,071 7,034 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (2,624) (333) 2,291 OTHER FINANCING SOURCES (USES) w Operating Transfers Out (1,450) (1,450) - EXCESS OF REVENUES AND OTHER SOURCES OVER (4,074) (1,783) 2,291 EXPENDITURES AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 59479 5,479 - FUND BALANCE - END OF YEAR $19405 $3,696 $2,291 -81- 0 CITY OF HUNTINGTON BEACO SCHEDULE C-3 COMBINING STATEMENT OF REVENUES, EXPENDITURES t AND CHANGES IN FUND BALANCES —BUDGET AND ACTUAL For the Year Ended June 30, 1991 (Continued) (expressed in thousands) ' SEWER Variance REVENUES: Favorable Budget Actual (Unfavorable) Licenses and Permits $310 $34 $(276) From Use of Money and Property 420 333 (87) TOTAL REVENUES 730 367 (363) EXPENDITURES: Capital Outlay 1,295 590 705 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (565) (223) 342 OTHER FINANCING SOURCES (USES) Operating Transfers Out (40) (40) - EXCESS OF REVENUES AND OTHER SOURCES OVER (605) (263) 342 EXPENDITURES AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 5,266 5,266 - ' FUND BALANCE - END OF YEAR $4,661 $5,003 $342 -82- CITY OF HUNTINGTON BEACH SCHEDULE C-3 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended June 30, 1991 (Continued) (expressed in thousands) DRAINAGE x Variance REVENUES: Favorable Budget Actual (Unfavorable) Licenses and Permits $375 $139 ($236) From Use of Money and Property 332 250 (82) w TOTAL REVENUES 707 389 (318) EXPENDITURES: Capital Outlay 2,775 753 2,022 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (2,068) (364) 1,704 EXCESS OF REVENUES AND OTHER SOURCES OVER (2,068) (364) 1,704 EXPENDITURES AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 4,244 4,244 - Residual Equity Transfers Out (110) (110) - FUND BALANCE - END OF YEAR $2,066 $3,770 $1,704 PUBLIC COMMUNICATIONS Variance Favorable Budget Actual (Unfavorable) REVENUES: Other Taxes $260 $327 $67 From Use of Money and Property 60 25 (35) Other 2 1 (1) TOTAL REVENUES 322 353 31 EXPENDITURES: Current: City Administrator 253 267 (14) Capital Outlay 46 74 (28) TOTAL EXPENDITURES 299 341 (42) µ EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 23 12 (11) FUND BALANCE - BEGINNING OF YEAR 279 279 - FUND BALANCE - END OF YEAR $302 $291 ($11) -83- ' CITY OF HUNTINGTON BEACH SCHEDULE C-3 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL ' For the Year Ended June 30, 1991 (Continued) (expressed in thousands) GRANTS Variance Favorable Budget Actual (Unfavorable) REVENUES: From Use of Money and Property $360 $351 $(9) From Other Agencies 899 1,584 685 TOTAL REVENUES 1,259 1,935 676 ' EXPENDITURES: Current: Police 9 9 0 ' Economic Development 300 343 (43) Community and Library Services 923 717 206 Capital Outlay 2,700 462 2,238 TOTAL EXPENDITURES 3,932 1,531 2,401 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (2,673) 404 3,077 FUND BALANCE - BEGINNING OF YEAR 1,119 1,119 0 ' Residual Equity Transfers In 206 206 0 FUND BALANCE - END OF YEAR ($1,348) $1,729 $3,077 ' PARK ACQUISITION AND DEVELOPMENT Variance Favorable ' Budget Actual (Unfavorable) REVENUES: Licenses and Permits $1,600 $344 $(1,256) ' From Use of Money and Property 600 154 (446) From Other Agencies 59 59 ' TOTAL REVENUES 2,200 557 (1,643) EXPENDITURES: Community and Library Services 47 74 (27) ' Capital Outlay 2,981 1,397 1,584 TOTAL EXPENDITURES 3,028 1,471 1,557 ' EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (828) (914) (86) ' FUND BALANCE - BEGINNING OF YEAR 1,814 1,814 0 Residual Equity Transfers Out (Note 10) (292) (292) 0 ' FUND BALANCE - END OF YEAR -84_ $694 $608 ($86) CITY OF HUNTINGTON BEACH SCHEDULE C-3 COMBINING STATEMENT OF REVENUESO EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended June 30, 1991 (Continued) (expressed in thousands) NARCOTICS FORFEITURE Variance Favorable REVENUES Budget Actual (Unfavorable) From Use of Money and Property $60 $97 $37 From Other Agencies 300 1,249 949 TOTAL REVENUES 360 1,346 986 EXPENDITURES: Police 53 46 7 Capital Outlay 362 226 136 TOTAL EXPENDITURES 415 272 143 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (55) 1,074 1,129 OTHER FINANCING SOURCES (USES) Operating Transfers Out (425) (425) 0 EXCESS OF REVENUES AND OTHER SOURCES OVER (480) 649 1,129 EXPENDITURES AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 937 937 0 FUND BALANCE - END OF YEAR $457 $1,586 $1,129 FLOOD CONTROL Variance Favorable Budget Actual (Unfavorable) REVENUES: From Use of Money and Property $8 $10 $2 EXPENDITURES: Public Works 110 54 56 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (102) (44) 58 OTHER FINANCING SOURCES (USES) FUND BALANCE BEGINNING OF YEAR - - - Residual Equity Transfers In 110 110 - FUND BALANCE - END OF YEAR $8 $66 $58 -85- CITY OF HUNTINGTON BEACH SCHEDULE C-3 ' COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended June 30, 1991 (Continued) ' (expressed in thousands) ' TOTAL SPECIAL REVENUE FUNDS Variance Favorable ' Budget Actual (Unfavorable) REVENUES: Other Taxes $260 $327 $67 ' Licenses and Permits 2,285 517 (1,768) From Use of Money and Property 2,200 1,420 (780) From Other Agencies 10,320 7,430 (2,890) ' Other 2 1 (1) TOTAL REVENUES 15,067 9,695 (5,372) ' EXPENDITURES: Current: City Administrator 253 267 (14) Police 62 55 7 ' Economic Development 300 343 (43) Community and Library Services 970 791 179 Public Works 110 54 56 ' Capital Outlay 22,264 8,573 13,691 TOTAL EXPENDITURES 23,959 10,083 13,876 ' EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (8,892) (388) 8,504 OTHER FINANCING SOURCES (USES) ' Operating Transfers Out (1,915) (1,915) - ' EXCESS OF REVENUES AND OTHER SOURCES OVER (10,807) (2,303) 8,504 EXPENDITURES AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 19,138 19,138 - t Residual Equity Transfers In (Note 10) 316 316 - ' Residual Equity Transfers Out (Note 10) (402) (402) - FUND BALANCE - END OF YEAR $8,245 $16,749 $8,504 ' —86— r • � 1 1 ' DEBT SERVICE FMMS rDebt service funds are used to account for the aalmulation of resources for the payment of general long-term debt. 1 1970 Park Bonds- This fund records the receipt and disbursement of property tax revenues to meet the debt service requirements of the 1970 Park Bonds, a general obligation bond. Redevelopment Agency- Mds fund records the property tax increment revenues received due to Redevelopment projects. Zhe tax increment will be used to repay the debt of the Redevelopment Agency. Public Facilities Corporation- Zhis records the aauamzlation and disbursement of monies required to meet the debt service requirements of the Huntington Beach Public Facilities Corporation. ' Parking Authority- This fund records the accumulation and t of monies to meet the debt service requirements of the Parking Authority of the City of Huntington r Beach. Civic Corporation- M s fund records the ac m%dation and disbursements of monies to meet the debt service requirements of the Huntington Beach Civic Improvement rCorporation certificates of participation. Public Financing Authority- Zhis fund records the accumulation and disbursement of monies to meet the debt service requirements of the Huntington Beach Public Financing Authority. ' Reservoir Hill- Mus fund accounts for funds received to meet the debt service requirements of the Reservoir Hill Assessment District Bonds. r i 1 r 1 CITY OF HUNTINGTON BEACH DEBT SERVICE FUNDS COMBINING BALANCE SHEET June 30, 1991 With comparative totals for June 30, 1990 (expressed in thousands) 1970 Park Redevelopment Bonds Agency ASSETS: Cash and Investments $393 $4,449 Cash with Fiscal Agent - - Taxes Receivable 10 87 Interest Receivable 3 31 Accounts Receivables - 98 Advances to Other Funds - - TOTAL ASSETS JjQ6 14,665 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts Payable $ - $ 187 Deferred Revenue - - FUND BALANCES - 187 Reserved Long-Term Receivables 406 4,478 Debt Service - - TOTAL FUND BALANCES 406 4,478 TOTAL LIABILITIES AND FUND BALANCES 406 14,665 -87- ' , • SCHEDULE D-1 Public Civic Public Reservoir Hill ' Facilities Parking Improvement Financing Assessment Totals Corporation Authority Corporation Authority District 1991 1990 ' $ - $ 194 $ - $ - $220 $ 5,256 $ 3,325 443 951 3,035 2,684 112 7,225 7,370 ' - 1 98 317 11 22 16 4 87 150 - - - - - 98 - - - 23,619 - 23,619 24,122 454 1 167 3 051 26 303 337 36 383 115,284 1 ' $ _ $ _ $ - $ - $ - $ 187 $ - - 358 - 358 358 - - 358 - 545 358 454 1,167 3,051 2,326 337 12,219 11,162 - - - 23,619 - 23,619 23,764 ' 454 1,167 3,051 25,945 337 35,838 34,926 ' 454 $1,167 $3,051 $26,303 337 $36,383 35 284 1 ' -88- CITY OF HUNTINGTON BEACH DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES For the year ended June 30, 1991 With comparative totals for the year ended June 30, 1990 (expressed in thousands) 1970 Park Redevelopment Bonds Agency REVENUES: Property Taxes $554 $4,043 Other Taxes - 108 From Use of Money Other Taxes and Property 24 394 Other - 81 TOTAL REVENUES 578 4,626 EXPENDITURES: Current: Non-Departmental - 212 Debt Service: Principal 350 1,495 Interest 118 2,725 TOTAL EXPENDITURES 468 4,432 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 110 194 OTHER FINANCING SOURCES (USES) : Operating Transfers In - - TOTAL OTHER FINANCING SOURCES (USES) - - EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES 110 194 FUND BALANCES - BEGINNING OF YEAR 296 3,249 Prior Period Adjustments - - Fund Balances as Restated 296 3,249 Residual Equity Transfer In - - Residual Equity Transfer Out - 1 ,035 FUND BALANCE - END OF YEAR JjQ6 4 418 -89- ' SCHEDULE D-2 ' Public Civic Public Reservoir Hill Facilities Parking Improvement Financing Assessment Totals Corporation Authority Corporation Authority District 1991 1990 $ - $ - $ - $ - $184 $ 4,781 $ 3,625 ' - - - - - 108 - 54 97 229 2,093 11 2,902 3,269 - - - - - 81 - 54 97 229 2,093 195 7,872 6,894 ' - - - - - 212 94 260 140 380 295 28 2,948 2,942 ' 131 _5 2,524 2,149 128 7,800 7,085 391 165 2,904 2,444 156 10,960 10, 121 ' 337 (68). (2.675) 35 39 (3,088) (3,227) ' 399 - 2,602 - - 3,001 2,593 ' 399 - 2.602 - - 3,001 2,593 62 68 73 35 39 87 634 ' 727 1,235 3,124 26,296 - 34,927 34, 146 - 298 298 - t727 1,235 3,124 26,296 298 35,225 34,146 169 - - - - 1,204 1,415 ' 504 - - - - 504 - 454 $1,167 $3,051 $25,945 1237 $35,838 134,927 -90- CITY OF HUNTINGTON BEACH SCHEDULE D-3 DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended June 30, 1991 (Continued) (expressed in thousands) 1970 PARR BONDS Variance Favorable REVENUES: Budget Actual (Unfavorable) Property Taxes $469 $554 $85 From Use of Money and Property 19 24 5 TOTAL REVENUES 488 578 90 EXPENDITURES: Principal 350 350 - Interest 118 118 TOTAL EXPENDITURES 468 468 - EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 20 110 90 FUND BALANCE - BEGINNING OF YEAR 296 296 - FUND BALANCE - END OF YEAR $316 $406 $90 -91- 1 � � CITY OF HUNTINGTON BEACH SCHEDULE D-3 DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL 1 For the Year Ended June 30, 1991 (Continued) (expressed in thousands) REDEVELOPMENT AGENCY Variance Favorable Budget Actual (Unfavorable) REVENUES: 1 Property Taxes $3,357 $4,043 $686 Other Taxes - 108 108 From Use of Money and Property 270 394 124 Other - 81 81 TOTAL REVENUES 3,627 4,626 999 EXPENDITURES: Current: Non-Departmental - 212 (212) Principal 1,406 1,495 (89) Interest 2,561 2,725 (164) TOTAL EXPENDITURES 3,967 4,432 (465) EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (340) 194 534 FUND BALANCE - BEGINNING OF YEAR 3,249 3,249 - Residual Equity Transfers In 1,035 1,035 - FUND BALANCE - END OF YEAR $3,944 $4,478 $534 —92— • • 1 CITY OF HUNTINGTON BEACH SCHEDULE D-3 DEBT SERVICE FUNDS I COMBINING' STATEMENT OF REVENUES, EXPENDITURES- AND CHANGES IN FUND BALANCES - BUDGET 'AND ACTUAL For the Year Ended June 30, 1991 (Continued) (expressed in thousands) PUBLIC FACILITIES CORPORATION Variance Favorable REVENUES' - Budget Actual (Unfavorable) From Use of Money and Property $37 54 17 EXPENDITURES: Principal 260 260 - Interest 132 131 1 TOTAL EXPENDITURES 392 391 1 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (355) (337) 18 I OTHER FINANCING SOURCES (USES) Operating Transfers In 399 399 EXCESS OF REVENUES AND OTHER SOURCES OVER 44" 62 18 EXPENDITURES AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 727 727 - Residual Equity Transfers In 169 .169 ' Residual Equity Transfers Out (504) (504) - FUND BALANCE - END OF YEAR $436 $454 $18 -93- CITY OF HUNTINGTON BEACH SCHEDULE D-3 DEBT SERVICE FUNDS COMBINING STATEMENT. OF REVENUES, EXPENDITURES AND CHANGES .IN FUND BALANCES - BUDGET AND ACTUAL ' For .the Year Ended June 30, 1991 (Continued) (expressed in thousands) PARKING AUTHORITY Variance Favorable Budget Actual (Unfavorable) REVENUES: From Use of Money and Property $0 $97 97 EXPENDITURES: Principal 140 140 - Interest 26 25 1 TOTAL EXPENDITURES 166 165 1 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (166) (68) 9.8 FUND BALANCE - BEGINNING OF YEAR 1,235 1,235 - FUND BALANCE - END OF YEAR $1,069 $1,167 $98 r r -94_ CITY OF HUNTINGTON BEACH SCHEDULE D-3 DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended June 30, 1991 (Continued) (expressed in thousands) CIVIC IMPROVEMENT CORPORATION Variance REVENUES: Favorable Budget Actual (Unfavorable) From Use of Money and Property 400 229 (171) EXPENDITURES: Principal 380 380 - Interest 2,419 2,524 (105) TOTAL EXPENDITURES 2,799 2,904 (105) EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (2,399) (2,675) (276) OTHER FINANCING SOURCES (USES) Operating Transfers In 3,920 2,602 (1,318) EXCESS OF REVENUES AND OTHER SOURCES OVER 1,521 (73) (1,594) EXPENDITURES AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 3,124 3,124 - FUND BALANCE - END OF YEAR $4,645 $3,051 ($1,594) PUBLIC FINANCING AUTHORITY Variance Favorable Budget Actual (Unfavorable) REVENUES: From Use of Money and Property $2,447 $2,093 $(354) EXPENDITURES: Principal 295 295 - Interest 2,149 2,149 - TOTAL EXPENDITURES 2,444 2,444 - EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 3 (351) (354) AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 26,296 26,296 - FUND BALANCE - END OF YEAR $26,299 $25,945 ($354) -95- CITY OF HUNTINGTON BEACH SCHEDULE D-3 ' DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL For the Year Ended June 30, 1991 (Continued) (expressed in thousands) ' RESERVOIR HILL ASSESSMENT DISTRICT ' Variance Favorable 1 Budget Actual (Unfavorable) REVENUES: Property Taxes $325 $184 ($141) ' From Use of Money and Property 50 11 (39) TOTAL REVENUES 375 195 (180) ' EXPENDITURES: Principal 28 28 - ' Interest 128 128 - TOTAL EXPENDITURES 156 156 - ' EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 219 39 (180) ' FUND BALANCE BEGINNING OF YEAR 298 298 - FUND BALANCE END OF YEAR $517 $337 ($180) i 1 ' —96— CITY OF HUNTINGTON BEACH SCHEDULE D-3 DEBT SERVICE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL For the Year Ended June 30, 1991 (expressed in thousands) TOTAL DEBT SERVICE FUNDS Variance REVENUES: Favorable Budget Actual (Unfavorable) Property Taxes $4,151 $4,781 $630 Other Taxes - 108 108 From Use of Money and Property 3,223 2,902 (321) Other - 81 81 TOTAL REVENUES 7,374 7,872 498 EXPENDITURES: Non-Departmental - 212 (212) Principal 2,859 2,948 (89) Interest 7,533 7,800 (267) TOTAL EXPENDITURES 10,392 10,960 (568) EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (3,018) (3,088) (70) OTHER FINANCING SOURCES (USES) Operating Transfers In 4,319 3,001 (1,318) EXCESS OF REVENUES AND OTHER SOURCES OVER 1,301 (87) (1,388) EXPENDITURES AND OTHER USES FUND BALANCE - BEGINNING OF YEAR 34,927 34,927 - Prior Period Adjustments 298 298 - FUND BALANCE AS RESTATED - BEGINNING OF YEAR 35,225 35,225 - Residual Equity Transfers In 1,204 1,204 - Residual Equity Transfers Out (504) (504) - FUND BALANCE - END OF YEAR $37,226 $35,838 ($1,388) -97- QMPrJML PR03E=s FMMB Capital projects funds are used to account for the acquisition and construction of tmajor capital facilities other than those financed by proprietary funds. Parking Structure- This fund accounts for the constriction of parking garages from ' proceeds of the Huntington Beach Civic Improv+ewnt Corporation Certificates of Participation (1986 and 1989 issues) . t Redevel2Enent Agency- This fund accounts for acquisition and construction activity in the five project areas. ' Low-Irccme Housing- This fund accounts for acquisition and construction activity for low-inane housing. The California Health and Safety Code requires that 20% of all tax merit reverm received by the Redevelapnent Agency be set aside in this fund for low-income housing development. Public Facilities Corporation- This fund accounts for major capital inprovements made ' to the lab ary eaaplex by the Huntington Beach Public Facilities Corporation. Parking Authority- This fund accounts for capital inFrovements made to certain off- street beach parking facilities. Capital Floyd- This fund accounts for major capital imps authorized by the City Council. Pier Rebuilding Flund- This fund aeeoaunts for the revenues and expenditures associated with the rebuilding of the City's landmark pier. ' Mello-Roos Assessment District This fund accounts for the expenditures from the Mello-Ross Assessment District bonds. ' Reservoir Hill Assessment District- This fund accounts for the capital improvements made from the proceeds of the Reservoir Hill Assessment District Bonds 88-1. 1 CITY OF HUNTINGTON BEACH CAPITAL PROJECTS FUNDS COMBINING BALANCE SHEET June 30, 1991 With comparative totals for June 30, 1990 (expressed in thousands) Low ASSETS Parking Redevelopment Income G Structure Agency Housing Cash and Investments $ 9,632 $10,750 $7,448 Cash with Fiscal Agent - - - Taxes Receivable - - 22 Interest Receivable 80 97 63 Accounts Receivable - - - Advances to Other Funds 18,041 - - Land Held for Resale - 23,633 - TOTAL ASSETS $27,753 134,480 17,533 LIABILITIES: Accounts Payable - 25 - Accrued Liabilities - 13 - Deposits - - - Due to Other Funds - - - Deferred Revenue 3,222 - - TOTAL LIABILITIES 3,222 38 - FUND BALANCES: Reserved: Reserved for Land Held for Resale - 23,633 - Long-Term Receivables 14,819 - - Reserved for Capital Projects 9,712 10,809 7,533 TOTAL FUND BALANCES 24,531 34,442 7,533 TOTAL LIABILITIES AND FUND BALANCES $27,753 $34,480 17,533 -98- ' • • SCHEDULE E-1 ' Reservoir Public Mello-Ross Hill Facilities Parking Capital Pier Assessment Assessment Totals ' Corporation Authority Improvement Rebuilding District District 1991 1990 S - $ - $6,381 $1,334 $ 8 $ $35,553 $38,772 - 130 - - 1,129 55 1,314 227 t _ - - 11 _ _ 33 70 1 54 295 545 - 1,295 - - 1,295 - 238 - - - 18,279 17,264 - - - - - 23,633 24,597 131 $6,673 12,640 1 137 55 80 402 81 475 - 432 19 400 - 876 1,013 ' - - - - - - 13 8 34 - - - - - 50 ' _ = 38 - - = 3,260 2,245 470 19 400 _ 4,149 3,350 - - - - 23,633 24,597 - - - - - 14,819 15,019 131 6,203 2,621 737 55 37,801 38,509 131 6,203 2,621 737 55 76,253 78,125 131 $6= $2,640 $1,137 155 180,402 181,475 t ' -99- CITY OF HUNTINGTON BEACH CAPITAL PROJECTS FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES - AND CHANGES IN FUND BALANCES For the Year Ended June 30, 1991 With comparative totals for the year ended June 30, 1990 (expressed in thousands) Low - Parking Redevelopment Income Structure Agency Housing REVENUES: - Property Taxes $ - $ - $ 999 Other Taxes - 108 From Use of Money and Property 976 989 470 From Other Agencies - - - Other - 834 - TOTAL REVENUES 976 1 ,931 1,469 EXPENDITURES: Current: City Council - - - City Administrator - - - City Treasurer - - - City Attorney - - - City Clerk - - - Administrative Services - 394 - Community Development - - - Economic Development - 1,929 - Public Works - - - Non-Departmental 9 492 - Capital Outlay - 8,170 135 Debt Service: Principal - - - Interest - 465 412 TOTAL EXPENDITURES 9 11,450 547 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 967 (9,519) 922 OTHER FINANCING SOURCES (USES) : Operating Transfers In Advances from Other Funds Proceeds of Long-Term Debt - 8,482 - Operating Transfers Out - - (106) Other - - - TOTAL OTHER FINANCING SOURCES (USES) - 8,482 106 EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER USES 967 (1,037) 816 FUND BALANCES - BEGINNING OF YEAR 23,564 39,514 6,717 Prior Period Adjustment - (3,000) - FUND BALANCE AS RESTATED - BEGINNING OF YEAR 23,564 36,514 6,717 Residual Equity Transfers In - - - Residual Equity Transfers Out - 1 035 - FUND BALANCE (DEFICIT) - END OF YEAR $24,531 34 4427�533 -100- ' • • SCHEDULE E-2 Reservoir ' Public Mello-Ross Hill Facilities Parking Capital Pier Assessment Assessment Totals Corporation Authority Improvement Rebuilding District District 1991 1990 108 2 9 448 320 86 5 3,305 4,641 _ 4, - - 4, 326 326 1, 160160 640 ' 2 9 448 5,090 86 5 10,016 6,055 362 - - - - - - - 24 _ _ 555 55 - 394 460 1,929 774 - - - 326 - - 239 - 740 370 - - 1,781 4,134 1,198 13 15,431 11,642 - - - - - 54 ' - - - - - - 877 433 1,781 4,134 1,437 13 19,371 15,319 ' 2 9 (1,333) 956 351 _.(_81 (9,3551 (9,264) 171 - - - - 171 113 - - _ - 15,848- 2,400 10,882 16,226 (431) - - - (537) (466) ' - 171 431 i 2.400 - 10.516 31,721 ' 2 180 (1,764) 956 1,049 (8) 1, 161 22,457 167 (49) 6,394 1,665 90 63 78,125 53,736 ' - - - - - - 3 000 (1,442) 167 (49) 6,394 1,665 90 63 75,125 52,294 - - 1,595 - - - 1,595 7,124 169 - (22) - 402 - (1,628) (3,768) 131 6 203 $2,621 737 155 76 253 7$ 8 ' -101- RPRIM FMWS Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent of the City is to recover the costs of providing the goods or services to the general public on a eontarauing basis through user charges or where the City desires a periodic determination of net income. ' Water Utility- This accounts for the City's water service to residents and businesses. Meadowlark Golf Course- This find accounts for the operations of a City-awned golf course which is leased to a private corporation which pays the City rent based on the ' operation's total revenues. Emerald Cove Housing- This fund is used to accouunt for the operation of a senior Citizen apartment conplex. PrniM ncy Fire Medical- This fund accounts for a self-supporting program where the ' City amides paramedic service to citizens. CITY OF HUNTINGTON BEACH ENTERPRISE FUNDS COMBINING BALANCE SHEET June 30, 1991 With comparative totals for June 30, 1990 (expressed in thousands) ASSETS Water Utility CURRENT ASSETS: Cash and Investments $12,337 Accounts Receivable 545 Accrued Interest Receivable 108 Inventory 339 Unbilled Receivables 1,899 TOTAL CURRENT ASSETS 15,228 OTHER ASSETS Cash with Fiscal Agent 300 Advances to Other Funds 1,682 TOTAL OTHER ASSETS 1,982 PLANT, PROPERTY AND EQUIPMENT (AT COST) : Land 391 Buildings 971 Machinery and Equipment 53,102 Subtotal 54,464 r Less Accumulated Depreciation (24,564) TOTAL PLANT, PROPERTY AND EQUIPMENT, NET 29,900 TOTAL ASSETS $47,110 v LIABILITIES AND FUND EQUITY CURRENT LIABILITIES: Accounts Payable $ 707 Accrued Payroll 44 Accrued Interest 6 Deposits 1,719 Current Portion of Long-Term Debt 249 TOTAL CURRENT LIABILITIES 2,725 LONG-TERM DEBT: Bond Payable 363 Note Payable 57 Certificates of Participation - Compensated Absences Payable 178 Advances from Other Funds - Less Current Portions (249) TOTAL LONG-TERM DEBT 349 TOTAL LIABILITIES 3,074 FUND EQUITY: Contributed Capital 37,458 Retained Earnings 6,578 TOTAL FUND EQUITY 44,036 TOTAL LIABILITIES AND FUND EQUITY $47,110 -102- ' • • SCHEDULE F-1 ' Meadowlark Emerald Emergency Golf Cove Fire Totals Course Housing - Medical 1991 1990 ' $1,505 $1,920 $ 23 $15,785 $12,747 1,347 1,892 787 11 17 - 136 - ' _ _ _ 339 144 1,899 1,216 1,516 1,937 1,370 20,051 14,894 ' - 294 - 594 900 - 1,682 1,560 ' - 294 - 2,276 2,460 ' 3,052 1,288 _ 4,731 4, 2 259 4,102 5,332 5,33 356 - 53,458 50,660 ' 3,667 5,390 _ 63,521 60,726 559 (492) (25,615) (24,332) 3,108 4,898 - 37,906 36,394 4 624 $7,129 $1,370 $60,233 $53,748 ' $ - $ - $ 1 $ 708 $ 814 - - 16 60 54 ' 38 36 - 80 81 15 1,734 1,345 35 - - 284 273 73 51 17 2,866 2,567 ' - - - 363 677 1,636 - - 1,693 1,782 ' _ 4,561 _ 4,561 4,548 178 161 - 944 - 944 944 ' (35) - = 284) 273) 1,601 5,505 7,455 7,839 1,674 5,556 17 10,321 10,406 ' 1,267 1,288 311 40,324 38,824 1,683 285 1,042 9,588 4,518 ' 2,950 1,573 1,353 49,912 43,342 4 624 $7,129 $1,370 6 0,233 In,748 ' -103- CITY OF HUNTINGTON BEACH ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN RETAINED EARNINGS For the year ended June 30, 1991 With comparative totals for year ended June 30, 1990 (expressed in thousands) Water Utility OPERATING REVENUES: Water Sales $13,108 Rentals - Membership Fees - Other Revenues 526 TOTAL OPERATING REVENUES 13,634 OPERATING EXPENSES: Water Purchases 3,191 m Administration 1,641 Engineering 612 Production 1,703 Maintenance 899 Water Meters 609 Water Quality 314 Contribution to General Fund in Lieu of Taxes 1,822 Depreciation 1,210 TOTAL OPERATING EXPENSES 12,001 OPERATING INCOME (LOSS) 1,633 NON-OPERATING REVENUES (EXPENSES) : Interest Income 1,279 Interest Expense 18 TOTAL NON-OPERATING REVENUES (EXPENSES) 1,261 INCOME BEFORE OPERATING TRANSFERS 2,894 OPERATING TRANSFERS IN - OPERATING TRANSFERS OUT NET OPERATING TRANSFERS IN (OUT) - NET INCOME 2,894 RETAINED EARNINGS (DEFICIT) - BEGINNING OF YEAR 2,859 PRIOR PERIOD ADJUSTMENT 825 RETAINED EARNINGS - AS RESTATED 3,684 RETAINED EARNINGS - END OF YEAR 6,578 -104- • • SCHEDULE F-2 1 1 Meadowlark Emerald Golf Cove Emergency Fire Totals Course Housing Medical 1991 1990 $ - $ - $ - $13,108 $13,379 314 595 - 909 899 - 2,755 2,755 148 3 529 459 314 598 2,755 17,301 14,885 - - - 3,191 4,185 261 1,727 3,629 1,091 612 1,239 - - 1,703 2,221 I 899 1,082- - - 609 895 - - - 314 197 1,822 1,889 18 82 - 1,310 1,362 18 343 1,727 14,089 14,171 296 _255 1,028 _ 3,212 714 100 164 4 1,547 1,266 (117) 54491 - (584) 595 (17) �2851 4 963 671 279 (30) 1,032 4,175 1,385 - 106 - 106 45 35 (35) 113 ' - 106 (35) 71 (68) 279 76 997 4,246 1,317 1,404 209 45 4,517 3,054 - - - 825 146 1,404 209 _ 45 5.342 , 3,200 1 683 285 $1,042 $9,5i88 4,517 ' -105- i CITY OF HUNTINGTON BEACH ENTERPRISE FUNDS COMBINING STATEMENT OF CASH FLOWS For the year ended June 30, 1991 With Comparative Totals for the year ended June 30, 1990 (expressed in thousands) Water CASH FLOWS FROM OPERATING ACTIVITIES: Operating Income: 1,633 Adjustment to reconcile operating income to net cash provided by operating activities Depreciation and Amortization 1,210 - Change in Assets and Liabilities Decrease (Increase) in Accounts Receivable 198 u Decrease (Increase) in Interest Receivable 16 Decrease (Increase) in Unbilled Receivable (683) Decrease (Increase) in Advance to Other Funds (122) Decrease (Increase) in Inventory (339) Increase (Decrease) in Accounts Payable (21) Increase (Decrease) in Accrued Payroll 1 Increase (Decrease) in Interest Payable - Increase (Decrease) in Deposits 399 Increase (Decrease) in Compensated Absences 17 Total Adjustments 676 Net Cash Provided by Operating Activities 2,309 m CASH FLOW FROM NON-CAPITAL FINANCING ACTIVITY Prior Period Adjustments 825 Operating Transfer in (Out) to Other Funds - CASH FLOW FROM CAPITAL AND RELATED FINANCING 825 ACTIVITIES: Interest Paid (18) Acquisition and Construction of Capital Assets (2,823) w Capital Contributed 1,500 Principal Paid on Bonds (314) Principal Paid on Note Payable 56) Total Cash Used for Capital R and Related Financing Activity (1,7111 CASH FLOWS FROM INVESTING ACTIVITY: r Interest on Investments 1,279 NET INCREASE (DECREASE) IN CASH EQUIVALENTS 2,702 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 9,935 CASH AND CASH EQUIVALENTS, END OF YEAR 112,637 -106- SCHEDULE F-3 Meadowlark Emerald Cove Emergency Fire Totals Golf Course Housing Medical 1991 1990 296 S 255 $1,028 3,212 S 714 18 82 - 1,310 1,374 - - (1,323 30 ) (1'1 ) 382 (101 5 6 ) - - - (683) 157 - 43) - - (339) (1- (62) (23) (106) (507) - 4 5 17 (9) - 390 236 - - 17 33 23 17 (1,342) 626 1,442 ' 319 272 (314) 2,586 2, 156 - - - 825 - - 106 35 71 (68) 106 35 896 68 1 (117) (449) - (584) (595) - - - (1 ) ( ),5001,385 (331 13 _ ((76) (88) ) I 150 (436) - (2,297) (426) I 100 164 4 1,547 1,266 269 106 (345) 2,732 2,928 1,236 2.108 368 13,647 10,719 1 505 $Z.214 S 23 $16,371 13 647 -107- I I CITY OF HUNTINGTON BEACH SCHEDULE G-1 INTERNAL SERVICE FUNDS COMBINING BALANCE SHEET JUNE 30, 1991 (With Comparative Totals for June 30, 1990) (Expressed in Thousands) ASSETS Self Equipment Totals Insurance Replacement 1991 1990 CURRENT ASSETS Cash and Investments $9,051 $5,141 $14,192 $13,673 Accrued Interest Receivable 86 46 132 212 TOTAL CURRENT ASSETS 9,137 5,187 14,324 13,885 OTHER ASSETS: Investments in Joint Venture 347 - 347 274 Cash with Fiscal Agent 545 545 2,049 TOTAL OTHER ASSETS 347 545 892 2,323 PLANT, PROPERTY AND EQUIPMENT Machinery and Equipment - 28,865 28,865 27,347 Less Accumulated Depreciation - (14,335) (14,335) (13,154) TOTAL PLANT, PROPERTY AND EQUIPMENT - 14,530 14,530 14,193 TOTAL ASSETS $9,484 $20,262 $29,746 $30,401 LIABILITIES AND FUND EQUITY CURRENT LIABILITIES Accounts Payable $25 $58 $83 $260 Accrued Payroll 28 - 28 24 Accrued Interest - 154 154 164 Current Portion of Long-Term Debt - 960 960 81 TOTAL CURRENT LIABILITES 53 1,172 1,225 529 OTHER LIABILITIES Notes Payable 178 178 259 Workers' Compensation Claims 4,067 - 4,067 3,990 Health Claims 135 - 135 135 General Liability Claims 1,929 - 1,929 2,837 Lease Payable - - - 156 Certificates of Participation - 5,510 5,510 5,510 Less Current Portion - (960) (960) (81) TOTAL OTHER LIABILITIES 6,131 4,728 10,859 12,806 TOTAL LIABILITIES 6,184 5,900 12,084 13,335 FUND EQUITY Contributed Capital - 14,760 14,760 14,221 Retained Earnings (Deficit) 3,300 (398) 2,902 2,845 TOTAL FUND EQUITY 3,300 14,362 17,662 17,066 TOTAL LIABILITIES AND FUND EQUITY $9,484 $20,262 $29,746 $30,401 -108- ' CITY OF HUNTINGTON BEACH SCHEDULE F-2 ' INTERNAL SERVICE FUNDS ' Combining Statement of Revenues, Expenses and Changes in Retained Earnings For the Year Ended June 30, 1991 With Comparative Totals for the Year Ended June 30, 1990 (Expressed in Thousands) ' Totals Self- Equipment (Memorandum Only) Insurance Replacement 1991 1990 OPERATING REVENUES: ' Charges for Service $7,373 $2,035 $9,408 $9,696 TOTAL OPERATING REVENUES 7,373 2,035 9,408 9,696 OPERATING EXPENSES: Administration 2,378 625 3,003 2,754 ' Employee Medical Claims 3,231 3,231 2,602 Liability Claims - 870 Workers Compensation Claims 1,930 1,930 1,018 Depreciation 2,459 2,459 2,638 TOTAL OPERATING EXPENSES 7,539 3,084 10,623 9,882 OPERATING INCOME (LOSS) (166) (1,049) (1,215) (186) ' NON-OPERATING REVENUES (EXPENSES) : Interest Income 676 502 1,178 1,516 Interest Expense (400) (400) (404) Joint Venture 73 73 90 ' TOTAL NON-OPERATING REVENUES (EXPENSES) 749 102 851 1,202 NET INCOME BEFORE OPERATING TRANSFERS 583 (947) (364) 1,016 ' OPERATING TRANSFERS IN 421 421 421 NET INCOME 583 (526) 57 1,437 ' RETAINED EARNINGS - BEGINNING OF YEAR 2,717 128 2,845 1,408 RETAINED EARNINGS - END OF YEAR $3,300 ($398) $2,902 $2,845 ' See Independent Auditors' Report and Notes to General Purpose Financial Statements ' -109- CITY OF HUNTINGTON BEACH EXHIBIT G-3 INTERNAL SERVICE FUNDS Combining Statement of Cash Flows For the Year Ended June 30, 1991 With Comparative Totals for the Year Ended June 30, 1990 (Expressed in Thousands) Totals Self Equipment Insurance Replacement 1991 1990 CASH FLOWS FROM OPERATING ACTIVITIES: Operating Income (loss): (5166) (51,049) ($1,215) ($186) Adjustment to reconcile operating income to net cash provided by operating activities Depreciation - 2,459 2,459 2,638 Decrease (Increase) in Accounts Receivable - - - 4 Decrease (Increase) in Interest Receivable 53 27 80 (107) «. Decrease (Increase) in Joint Venture (73) - (73) (73) Increase (Decrease) in Accounts Payable (98) (80) (178) 96 Increase (Decrease) in Claims Payable (831) - (831) (460) Increase (Decrease) in Accrued Payroll 4 - 4 (12) Increase (Decrease)in Accrued Interest - (10) (10) 16 Total Adjustments (945) 2,396 1,451 2,323 Net Cash Provided by Operating Activities (1,111) 1,347 236 2,137 CASH FLOW FROM NON-CAPITAL FINANCING ACTIVITY Operating Transfer In (Out) to Other Funds - 421 421 421 - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Interest Expense - (400) (400) (404) Acquisition and Construction of Capital Assets - (2,795) (2,795) (5,913) Capital Contributed - 539 539 1,567 - Principal Paid on Bonds - - - (77) Principal Paid on Notes and leases Payable - (237) (237) Total Cash Used for Capital (2,893) (2,893) (4,827) and Related Financing Activity CASH FLOWS FROM INVESTING ACTIVITY Interest on Investments and Joint Venture 749 502 1,251 1,516 NET INCREASE (DECREASE) IN CASH EQUIVALENTS (362) (623) (985) (753) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 9,413 6,309 15,722 16,475 CASH AND CASH EQUIVALENTS, END OF YEAR 59,051 $5,686 $14,737 $15,722 -110- ' MR= = AGM= FMW ' Trust and Agency funds are used to account for assets held by the City as an agent for individuals, private organizations of other governments. ' AGENCY FUNDS: Employee Deferred Coupensation- This fund accounts for the deposit of monies ' authorized by employees to be withheld fran salaries for payment at a later date. The City retains title to the funds until the employee withdraws the funds, which normally may not be done until employment is terminated, or any later date. ' Retiree Medical Insurance- This fund accounts for the expenditure of City provided benefits for medical insurance coverage for retired employees. ' Asset Seizure- This fund accounts for the deposit of monies held by the City for narcotics cases pending court decision on the final distribution. General Deposit- This fund accounts for the deposit of general monies held by the City for privay individuals and businesses. Mello-Roos- This fund accounts for funds received to meet the debt service requirements of the Mello-Roos Assessment Bonds. ' PENSION TRUST FUNDS: ' Retirement Supplement Fund- This fund accounts for the supplemental retirement benefits paid toretirees. I I I CITY OF HUNTINGTON BEACH SCHEDULE H-1 TRUST AND AGENCY FUNDS COMBINING BALANCE SHEET June 30, 1991 With Comparative Totals for June 30, 1990 (Expressed in Thousands) AGENCY PENSION TRUST TOTAL ASSETS: FUNDS FUND 1991 1990 Cash $2,858 $175 $3,033 $2,713 Cash With Fiscal Agent 16,442 - 16,442 13,379 Interest Receivable 27 - 27 24 Notes Receivable, Net of 2,106 - 2,106 2,460 Other Assets 29 - 29 29 TOTAL ASSETS $21,462 $175 $21,637 $18,605 LIABILITIES: Deposits $786 - $786 $992 Notes Payable 26 - 26 27 Claims Payable 2,238 - 2,238 1,773 Employee Deferred Compensation 18,412 - 18,412 15,795 TOTAL LIABILITIES 21,462 - 21,462 18,587 FUND BALANCES RESERVED FOR PENSION PAYMENTS - 175 175 18 TOTAL LIABILITIES AND FUND BALANCES $21,462 $175 $21,637 $18,605 -111- CITY OF HUNTINGTON BEACH SCHEDULE H-2 TOTAL AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES For the Year Ended June 30, 1991 (Expressed in Thousands) July 1, June 30, ' ASSETS: 1990 Additions Deductions 1991 Cash $2,501 $1,515 ($1,158) $2,858 Cash With Fiscal Agent 13,279 3,439 (276) 16,442 Interest Receivable 20 27 (20) 27 Notes Receivable, 2,460 - (354) 2,106 Other Assets 29 29 TOTAL ASSETS $18,289 $4,981 ($1,808) $21,462 ' LIABILITIES: ' Deposits Payable $694 $1,101 ($1,009) $786 Notes Payable 27 (1) 26 Claims Payable 1,773 623 (158) 2,238 Employee Deferred Compensation 15,795 3,275 (658) 18,412 ' TOTAL LIABILITIES $18,289 $4,999 ($1,826) $21,462 -112- CITY OF HUNTINGTON BEACH SCHEDULE H-2 AGENCY FUNDS COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILIITIES For the Year Ending June 30, 1991 (Expressed in Thousands) EMPLOYEE DEFERRED COMPENSATION July 1, June 30, ASSETS: 1990 Additions Deductions 1991 Cash $54 $3 - $57 Cash With Fiscal Agent 13,279 3,236 (269) 16,246 Notes Receivable, Net of 2,460 - (354) 2,106 Other Assets 29 - - 29 TOTAL ASSETS $15,822 $3,239 ($623) $18,438 LIABILITIES: Notes Payable $27 - ($1) $26 Employee Deferred Compensation 15,795 3,275 (658) 18,412 TOTAL LIABILITIES $15,822 $3,275 ($659) $18,438 RETIREE MEDICAL July 1, June 30, ASSETS: 1990 Additions Deductions 1991 Cash $1,755 $615 ($158) $2,212 Interest Receivable 18 26 (18) 26 TOTAL ASSETS $1,773 $641 ($176) $2,238 LIABILITIES: Claims Payable $1,773 $623 ($158) $2,238 TOTAL LIABILITIES $1,773 $623 ($158) $21238 MELLO-ROOS ASSESSMENT DISTRICT July 1, June 30, ASSETS: 1990 Additions Deductions 1991 Cash With Fiscal Agent - $605 ($409) $196 TOTAL ASSETS _ - $605 ($409) $196 LIABILITIES: Deposits Payable - $605 ($409) $196 TOTAL LIABILITIES - $605 ($409) $196 -113- ' CITY OF HUNTINGTON BEACH SCHEDULE H-2 AGENCY FUNDS COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILIITIES ' For the Year Ending June 30, 1991 (Expressed in Thousands) ' ASSET SEIZURE FUND July 1, June 30, ASSETS: 1990 Additions Deductions 1991 Cash $389 $115 ($373) $131 Interest Receivable 2 1 (2) 1 1 TOTAL ASSETS $391 $116 ($375) $132 t LIABILITIES: Deposits Payable $391 $116 ($375) $132 ' GENERAL DEPOSIT FUND July 1, June 30, ' ASSETS: 1990 Additions Deductions 1991 Cash $303 $380 ($225) $458 ' LIABILITIES Deposits Payable $303 $380 ($225) $458 I I I I I —114— CITY OF HUNTINGTON BEACH SCHEDULE H-3 RETIREMENT SUPPLEMENT PENSION TRUST FUND COMPARATIVE BALANCE SHEET JUNE 30, 1991 AND 1990 (Expressed in Thousands) 1991 1990 ASSETS: CASH $175 $18 FUND BALANCES RESERVED FOR BENEFITS $175 $18 SCHEDULE H-4 COMPARATIVE STATEMENT OF REVENUE, EXPENSE AND CHANGES IN FUND BALANCE For the Year Ended June 30, 1991 With Comparative Totals for the Year Ended June 30, 1990 (expressed in thousands) 1991 1990 REVENUES: CITY CONTRIBUTIONS $400 $185 INTEREST 7 - TOTAL REVENUES 407 185 EXPENSE: PENSION PAYMENTS 250 167 EXCESS OF REVENUES OVER EXPENDITURES 157 18 FUND BALANCE, BEGINNING OF YEAR 18 - FUND BALANCE END OF YEAR $175 $18 -115- CITY OF HUNTINGTON BEACH ' RETIREMENT SUPPLEMENT PENSION TRUST FUNDS STATEMENT OF CASH FLOWS For the Year Ended June 30, 1991 ' With Comparative Totals for the Year Ended June 30, 1990 (Expressed in Thousands) ' 1991 1990 CASH FLOWS FROM OPERATING ACTIVITIES: ' Operating Income $157 $18 ' CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 18 0 CASH AND CASH EQUIVALENTS, END OF YEAR $175 $18 —116— (This page left blank intentionally) a i CITY OF HUNTINGTON BEACH SCHEDULE I-1 SCHEDULE OF GENERAL FIXED ASSETS June 30, 1991 (Expressed in Thousands) GENERAL FIXED ASSETS LAND $62,732 BUILDINGS 24,426 IMPROVEMENTS OTHER THAN BUILDINGS 10,913 CONSTRUCTION IN PROCESS 5,529 TOTAL GENERAL FIXED ASSETS $103,600 INVESTMENTS IN GENERAL FIXED ASSETS FROM: GENERAL FUND $10,851 SPECIAL REVENUE FUNDS 18,511 CAPITAL PROJECTS FUNDS 53,612 DONATIONS 20,626 TOTAL INVESTMENT IN GENERAL FIXED ASSETS $103,600 -117- CITY OF HUNTINGTON BEACH SCHEDULE I-2 SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS BY FUNCTION AND ACTIVITY For the Year Ended June 30, 1991 (expressed in thousands) July 1, 1990 Additions Deletions June 30, 1991 Fire $3,357 $ = $ _ $3,357 Police 546 546 ' Community and Library Services 56,804 18,057 (9,272) 65,589 Public Works 2,726 - - 2,726 ' Non-Departmental 31,357 25 - 31,382 ' Total $94,790 $18,082 ($9,272) $103,600 t ' -118- SCHEDULE I-3 CITY OF HUNTINGTON BEACH SCHEDULE OF GENERAL FIXED ASSETS JUNE 30, 1991 (Expressed in Thousands Construction in Land Buildings Improvements Process Total Fire $- $3,357 $- $- $3,357 Police - 546 - - 546 Community/Library Services 41,291 7,881 10,913 5,504 65,589 Public Works - 2,726 - - 2,726 Non-Departmental 21,441 9,916 - 25 31,382 TOTAL $62,732 $24,426 $10,913 $5,529 $103,600 -119- .,.� .� • .� � � � i � � � � � � � � � � � � � � � CITY OF HUNTINGTON BEACH SCHEDULE J-1 SCHEDULE OF CHANGES IN GENERAL LONG-TERM DEBT For the Year Ended June 30, 1991 (Expressed in Thousands) Outstanding Outstanding July 1, June 30, 1990 Additions Reductions .1991 1970 Park Bonds $1,975 - ($350) $1,625 Public Facilities Corporation 2,530 - (260) 2,270 Leasehold Mortgage Bonds Parking Authority Revenue Bonds 565 - (140) 425 Reservoir Hill Assessment Bonds 1,654 - (3) 1,651 Civic Improvement Corporation 34,405 - (380) 34,025 Certificates of Participation Public Financing Authority 26,240 - (295) 25,945 Certificates of Participation Compensated Absences 4,321 401 - 4,722 Amounts Due Under Owner Participation 1,587 4,073 - 5,660 and Disposition and Development Agreements Mortgages Payable 2,462 - (1,050) 1,412 Advances from Other Funds 104,849 11,076 (1,355) 114,570 TOTAL $180,588 $15,550 ($3,833) $192,305 -120- 1 • • 1 1 1 1 1 STATISTICAL SECTION 1 1 i 1 1 1 1 1 1 A table of the ten largest property taxpayers was not presented as the 1 information was not readily attainable. 1 1 1 CITY OF HUNTINGTON BEACH GOVERNMENTAL FUND REVENUES BY SOURCE Last Ten Fiscal Years (in thousands) Fiscal Property Other Licenses and Fines and Year Taxes Taxes Permits Forfeitures 1981-82 $13,646 $19,050 $3,003 $1,516 1982-83 15,830 20,661 3,148 1,749 1983-84 16,935 22,879 5,100 1,923 1984-85 17,638 25,923 5,963 2,094 1985-86 19,428 27,798 4,427 1,974 1986-87 23,087 28,885 4,919 2,096 1987-88 24,275 30,207 4,348 2,338 1988-89 26,970 30,736 5,773 2,458 1989-90 30,460 32,679 3,944 2,256 1990-91 33,697 32,092 3,629 1,904 Source: Administrative Services Department, City of Huntington Beach Note: Includes General, Special Revenue Capital Projects and Debt Service Funds -121- 1 ! ! EXHIBIT A 1 Use of Money From Other Charges for Other Total and Property Agencies Current Svc. Revenue 1 $5,838 $9,109 $1,316 $529 $54,007 4,551 7,954 2,917 1,180 57,990 ' 6,177 9,937 2,009 1,053 66,013 5,896 12,888 2,161 364 72,927 1 5,718 14,143 2,350 736 76,574 7,634 14,422 2,799 456 84,298 1 8,365 15,492 3,208 1,410 89,643 13,884 21,721 5,886 2,731 110,159 ' 14,140 15,211 7,267 1,019 106,976 11,854 27,243 8,341 2,012 120,772 1 1 -122- 1 1 1 1 1 1 1 CITY OF HUNTINGTON BEACH GOVERNMENTAL FUND EXPENDITURES BY FUNCTION AND ACTIVITY Last Ten Fiscal Years (in thousands) Economic and Fiscal City City City City City Administrative Community Year Council Administrator Treasurer Attorney Clerk Services Development 1981-82 $77 $399 $158 $872 $194 $2,060 $1,750 1982-83 98 498 264 629 165 2,140 1,712 1983-84 111 480 141 730 165 2,362 2,319 1984-85 129 731 268 806 195 2,559 2,726 1985-86 135 848 288 897 203 2,949 2,715 1986-87 129 959 283 913 252 3,088 3,248 1987-88 130 1,106 290 973 245 3,287 4,187 1988-89 156 1,304 322 1,042 293 3,409 4,393 1989-90 215 853 438 1,308 330 3,835 5,404 1990-91 197 1,564 700 1,340 457 4,187 5,306 Source: Administrative Services Department, City of Huntington Beach Note: Includes General, Special Revenue Capital Projects and Debt Service Funds -123- EXHIBIT B Community ' and Library Public Non Capital Debt Fire Police Services Works Departmental Outlay Service Total $7,315 $13,367 $4,405 $9,707 $4,010 $8,860 $471 $53,645 7,758 14,103 5,028 10,989 74,058 9,639 469 127,550 ' 8,569 15,601 5,070 12,528 3,741 8,621 1,830 62,268 9,494 17,123 5,287 13,652 4,867 7,874 1,896 67,607 ' 10,252 18,745 5,668 15,249 6,796 11,791 1,847 78,383 11,187 20,519 6,090 14,863 7,726 12,168 2,189 83,614 ' 11,840 22,370 6,954 16,205 7,153 10,206 5,243 90,189 12,722 23,565 7,595 16,893 7,088 42,462 15,177 136,421 ' 14,148 26,369 8,307 18,428 7,955 20,622 10,626 118,838 14,169 28,148 9,127 20,275 7,052 24,076 11,895 128,493 -124- t CITY OF HUNTINGTON BEACH EXHIBIT C PROPERTY TAX LEVIES AND COLLECTIONS Last Ten Fiscal Years (Expressed in Thousands) x. SECURED TAXES UNSECURED TAXES Fiscal Total Total - Delinquency- Total Total - Delinquency- Year Levy Collection Amount Percent Levy Collection Amount Percent 1981-82 $10,300 $9,894 $407 3.95 $808 $737 $47 5.82 1982-83 11,405 11,117 289 2.53 960 909 51 5.31 1983-84 11,403 11,665 430 3.77 982 942 26 2.65 1984-85 12,418 11,634 425 3.42 1,032 955 33 3.20 1985-86 13,608 12,781 452 3.32 1,130 1,060 40 3.54 4 1986-87 15,089 14,448 572 3.79 1,187 1,100 45 3.75 1987-88 16,055 15,419 500 3.12 1,250 1,180 46 3.68 1988-89 16,963 16,346 493 2.91 1,287 1,234 37 2.87 1989-90 17,283 16,654 500 2.89 1,524 1,421 71 4.67 M. 1990-91 18,764 17,827 747 3.98 1,509 1,377 62 4.11 Source- County of Orange Note- Delinquency amount does not necessarily equal the levy amount minus the collections since there are collections of amounts levied in prior years -125- 1 . ' CITY OF HUNTINGTON BEACH ASSESSED AND ACTUAL VALUE OF ALL TAXABLE PROPERTY EXHIBIT D ' Last Ten Fiscal Years (expressed in thousands) Total Estimated Full Fiscal Common Public Total Assessed Market Percent Year Property Utilities Secured Unsecured Valuation Valuation Increase 1981-82 $4,608,703 $322,527 $4,931,230 $288,453 $5,219,683 $5,219,683 21.47 1982-83 5,171,182 330,030 5,501,212 374,692 5,875,904 5,875,904 12.57 1983-84 5,559,792 362,186 5,921,978 370,949 6,292,927 6,292,927 7.10 1984-85 5,940,642 426,593 6,367,235 466,571 6,833,806 6,833,806 8.60 1985-86 6,519,923 450,742 6,970,665 441,125 7,411,790 7,411,790 8.46 ' 1986-87 7,019,854 475,467 7,495,321 504,940 8,000,261 8,000,261 7.94 1987-88 7,457,614 487,793 7,945,407 436,502 8,381,909 8,381,909 4.77 ' 1988-89 8,116,790 3,317 8,120,107 460,095 8,580,202 8,580,202 2.36 1989-90 9,030,107 3,298 9,033,405 717,652 9,751,057 9,751,057 13.65 1990-91 9,979,107 3,324 9,982,431 536,847 10,519,278 10,519,278 7.88 Source: Orange County Auditor-Controller Note- Public utility valuations were ' adjusted to conform to Assembly Bill 454. -126- r CITY OF HUNTINGTON BEACH EXHIBIT E PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS LARGEST TAX RATE AREA IN CITY Last Ten Fiscal Years Metro. Basic Orange School Water Year Levy City County Districts Dist. Others Total 1981-82 1.00000 0.04635 0.00080 0.12810 0.01980 0.00270 1.19775 1982-83 1.00000 0.05756 0.00043 0.11656 0.01660 0.00237 1.19352 1983-84 1.00000 0.05682 0.00039 0.12096 0.02370 0.00210 1.20397 1984-85 1.00000 0.05630 0.00032 0.09962 0.01560 0.00177 1.17361 W 1985-86 1.00000 0.05565 0.00030 0.09329 0.01640 0.00161 1.16725 1986-87 1.00000 0.05529 0.00027 0.10677 0.01480 0.00142 1.17855 1987-88 1.00000 0.05490 0.00022 0.09514 0.01120 0.00638 1.16784 1988-89 1.00000 0.05470 0.00022 0.09470 0.01100 0.00321 1.16383 1989-90 1.00000 0.05419 0.00110 0.01004 0.01210 0.00029 1.07772 1990-91 1.00000 0.05406 0.00098 0.00841 0.00970 0.00015 1.07330 Source- County of Orange -127- CITY OF HUNTINGTON BEACH GENERAL OBLIGATION BONDED DEBT RATIOS Last Ten Fiscal Years General Assessed Percent of Bonded Bonded Market Debt to Debt Fiscal Debt Valuation Assessed Per M Year (thousands) (in 1,000s) Valuation Population Capita 1981-82 $4,150 $5,219,683 0.08 175,714 23.62 1982-83 3,930 5,875,904 0.07 178,706 21.99 1983-84 3,695 6,292,927 0.06 179,990 20.53 1984-85 3,425 6,833,806 0.05 181,000 18.92 1985-86 3,165 7,411,790 0.04 184,838 17.12 1986-87 2,885 8,000,261 0.04 186,757 15.45 1987-88 2,590 8,381,909 0.03 187,740 13.80 1988-89 2,280 8,580,202 0.03 188,701 12.08 1989-90 1,975 9,751,057 0.02 181,015 10.31 1990-91 1,625 10,519,277 0.02 181,630 8.95 Source- Administrative Services Department, City of Huntington Beach -128- EXHIBIT F ' Debt Service Debt Service- General Fund to Total ' (thousands) Expenditures General Fund Principal Interest Total (thousands) Expenditures $210 $261 $471 $44,094 1.1 220 248 468 48,747 1.0 235 236 471 53,177 0.9 ' 270 222 492 59,694 0.8 260 206 466 64,492 0.7 280 191 471 67,126 0.7 295 175 470 71,232 0.7 ' 310 155 465 75,593 0.6 305 139 444 83,616 0.5 350 118 468 88,079 0.5 t t t -129- SIT G CM OF HiRrINGIION BEACH OCHPUDMCN OF TBGAL DEBT MARGIN June 30, 1991 (in thou nds) Assessed Valuation $10,519,278 Debt Limit: 12% of Assessed Value 1,262,313 Amr mt of Debt Applicable to Limit (General Obligation 1970 Park Bonds) Less Net Assets in Debt Service Fund (1970 Park Bonds) (406) Total amount of Debt Applicable to Limit 1,261,907 Legal Debt Margin $9,2�57_1 Source: Admnistrative Services Department, City of Beach -130- EXHIBIT H ' CITY OF Emurnarm BEMZ ' OCMPVrATICN OF DIRECT AMID OVERIAMIM BMMED DEBT JMM 30, 1991 1990-91 Assessed Valuation - $10,519,278,078 (after deducting $384,143,293 of ' redevelopment tax allocation increment) Agency Applicable Debt 6/30/91 Orange County 7.446 $102,010 ' Orange County Building Authorities 7.446 14,608,549 Orange County Flood Control District 7.446 407,668 Metropolitan Water District 1.520 10,640,304 ' NWD of Orange County Water Facilities 11.642 7,152,288 Corporation O.C. Sanitation Districts #1,2,3 COPS 5.386 6,010,776 ' O.C. Sanitation Districts #3 COPS 11.433 3,243,542 O.C. Sanitation District ill COPS 99.877 8,679,310 O.C. Water District COPS 11.466 15,146,471 Coast Comaunity College Dist. Authority 30.084 6,124,703 ' Los Alamitos Unified School District 1.668 6,338 Huntington Beach Union High School Dist. 65.963 507,915 Fountain Valley School District 28.501 1,067,362 ' Huntington Beach City School District 95.119 475,595 Ocean View Elementary School District 92.454 73,963 City of Huntington Beach 100.000 1,625,000 (1) ' City of Huntington Beach Building 100.000 45,409,851 Authorities City of Huntington Beach Cmw unity 100.00 2,400,000 Facilities District 1990-1 City of Huntington Beach 1915 Act Bonds 100.00 1,650,000 TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT 125,331,645 ' LESS MWDOC Water Facilities Corp. (100% self supporting) 7,152,288 TOTAL NET DIRECT AND OVE2IAPPING, BONDED DEBT $118,179,357 (2) ' (1) Eludes tax and revenue anticipation notes (2) Ewludes revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease ' obligations. Ratios to Assessed Valuation ' Direct Debt ($47,034,851) .45% Total Gross Debt 1.19% Total Net Debt 1.12% ' State School Building Aid Repayable as of June 30, 1991 $24,086,536 ' -131- EXHIBIT I CITY OF HUNTINGTON BEACH WATER REVENUE BOND COVERAGE Last Ten Fiscal Years (Expressed in thousands) Expenses Debt (Excluding Net Revenue Service Requirement Fiscal Total Interest and Available for Year Revenues Depreciation) Debt Service Principal Interest Total Coverage 1981-82 $6,558 $5,286 $1,272 $140 $79 $219 5.8 1982-83 6,521 6,255 266 150 74 224 1.2 1983-84 7,035 6,658 377 150 69 219 1.7 1984-85 8,050 7,687 363 160 43 203 1.8 1985-86 8,651 8,760 (109) 58 40 98 N/A 1986-87 9,162 8,476 686 184 34 218 3.1 1987-88 10,714 9,413 1,301 0 30 30 43.4 1988-89 12,467 10,765 1,702 0 30 30 57 1989-90 14,809 12,461 2,348 26 19 45 52.2 1990-91 14,913 10,791 4,122 317 18 335 12.3 Source, Administrative Services Department, City of Huntington Beach -132- EXHIBIT J ' CITY OF HUNTINGTON BEACH DEMOGRAPHIC STATISTICS ' City Population Percent Square Orange County as a Percent of Year Population Increase Miles Population County Popoulation 1910 815 - 3.57 34,436 2.4 1920 1,687 107.0% 3.57 61,375 2.7 1930 3,690 118.7% 3.57 61,375 3.1 1940 3,738 1.3% 3.57 130,760 2.9 ' 1950 5,158 38.0% 4.72 216,224 2.4 1960 11,492 122.8% 23.47 703,995 1.6 1970 116,400 912.9% 26.73 1,420,386 8.2 ' 1980 172,200 47.9% 27.20 1,931,570 8.9 1985 181,015 5.1% 27.20 2,074,326 8.7 1990 181,155 0.1% 27.20 2,362,211 7.7 1991 181,630 0.3% 27.20 2,453,277 7.4 ' Source: Community Development Department, City of Huntington Beach ' -133- EXHIBIT K CITY OF HUNTINGTON BEACH CONSTRUCTION ACTIVITY AND BANK AND SAVINGS AND LOAN DEPOSITS Last Ten Fiscal Years M Estimated Bank Number Valuation and Savings of of New and Loan Fiscal Building Percent Construction Percent Deposits Percent Year Permits Change (000's) Change in (0001s) Change 1981-82 3,230 $58,298 $1,134,324 - 1982-83 2,539 (21.4) 52,458 (10.0) 1,388,634 22.4 1983-84 2,776 9.3 110,747 111.1 1,801,778 29.8 1984-85 3,163 13.9 142,336 28.5 1,843,295 2.3 1985-86 3,173 0.3 133,579 (6.2) 2,052,766 11.4 1986-87 4,098 29.2 92,230 (31.0) 2,138,624 4.2 1987-88 4,666 13.9 177,297 92.2 2,395,503 12.0 1988-89 5,039 8.0 242,013 36.5 2,653,166 10.8 1989-90 4,318 (14.3) 102,907 (57.5) 2,598,415 (2.1) 1990-91 4,650 7.7 76,175 (26.0) Note- Bank and Savings and Loan Deposits for 1990/91 were v not available in time for this report. Source- Community Development Department, City of Huntington Beach and The Findley Reports on California Financial Institutions. -134- AHIBIT L CITY OF HUNTINGTON BEACH INSURANCE IN FORCE June 30, 1991 Frank B. Hall- Broker Special Events Liability Excess Liability Excess Liability Reinsurance Workers Compensation Excess Robert F. Driver- Broker Boiler and Machinery Fire, Ext. Cov. , Flood, Earthquake Fire, Ext. Cov. , Flood, Earthquake Fire, Ext. Cov. , Flood, Earthquake Fire, Ext. Cov. , Flood, Earthquake Fire, Ext. Cov. , Flood, Earthquake Fire, Ext. Cov. , Flood, Earthquake Fire, Ext. Cov. , Flood, Earthquake Fire, Ext. Cov. , Flood, Earthquake Watercraft Hull Airport Liability Aircraft Liability Main Promenade Property Coverage (10 Locations) Blanket Faithful Performance Bond Bicycle Liability Robert E. French - Broker Employees Travel Accident Policy Medical Stop Loss Prescription Card Service California Psychological Health Plan Orange County Medical Review TOTAL Source: Administrative Services Department City of Huntington Beach -135- ' Annual Insurance Company Policy# Expires Premium t American Casualty G000520715 7-1-92 2,020 Ins. Co of the State of PA 4789-2389 7-1-92 497,541 National Reinsurance Corp. 01CX90063 7-1-92 187,782 General Reinsurance Carp. X-12191 7-1-92 70,318 t Kemper Group 3XNO-17455092 4-1-92 7,909 Ccamnorwealth Ins. Co. CWW5050 6-5-92 59,600 Houston Casualty C❑mpany HP 11534 6-5-92 20,450 Continental Ins. Co. SFC2984543 6-5-92 20,450 ' Associated Intl Ins. Co IM 308271 6-5-92 14,700 Associated Intl Ins. Co IM 308272 6-5-92 9,600 American National fire Ins. Co. CPP177 1709 6-5-92 14,700 ' Commmwealth Ins. Oo. Cx W 5051 6-5-92 15,000 Firemen's Fund Ins. Co. XSP 0004226 6-5-92 15,000 Albany Insurance 8H10601 4-1-92 15,383 ' Transamerica Ins. Co. 1206948 4-1-92 3,000 Transamerica Ins. Co. 1209120 4-1-92 47,759 Commoaxaealth Ins. 1NP134004104 6-5-92 3,884 Firemen's Fund 219MXF80202331 1-13-92 20,997 ' Kemper Group 3F68409200 9-7-91 2,350 Indemnity Urmlexwriters 8001 3-15-91 2,680 ' Provident Life & Accident G"IA--1348 7-1-92 1,593 American General Insurance 19086 12-31-91 131,000 P.C.S. 100434 12-31-91 300,000 C.P.H.P. 8098 11-1-91 61,000 ' O.C.M.R. 8500P 1-1-92 60,000 $1,584,716 -136- 14HIBIT M CITY OF HUNTINGTON BEAC R MISC IANEOM S=STICS June 30, 1991 Year of ir=nporaticn. 1909 Form of Government Charter City- Council, City Administrator st-rat Area 27.2 Square Miles Pgmlaticm 191,630 Miles of Streets 370 Number of Street Li cfts 14,350 Fire Protection: Number of Stations 7 Number of Firefighters 148 Police Protection: Number of Stations 1 Number of Sworn Police Officers 238 Municipal Water Department Number of Customers 47,986 Average Daily on 35.0 Million Gallons Miles of Water Mains 480 Public Works: Sanitary Sewers 270 Miles Storm Sewers 31 Miles Number of Street Trees 36,000 Recreation and Culture Number of Parks 57 Park Acreage Developed 555 Miles of Beach 3.4 Annual Beach Visitors 6,000,000 Number of Libraries 4 Library of Volumes 1,900,000 M Full-Time Ehplayees 1,020 Source: Administrative Services Department, City of Rmtingt'.on Beach -137-