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HUNTINQTON BEACH PUBLIC FACILITIES CORPORATION
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REPORT ON EXAMINATION OF FINANCIAL STATEMENTS
For The Period From Inception On November 25, 1970
i To Junes 30, 1974
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COOPERS & LYBRAND
CCRTIf eo PUBLIC ACCOUNTANTS
IN PRINCIPAL ARCAS
Or TNZ WORLP
Board of Directors
i Huntington Beach Public Facilities Corporation
Huntington Beach, California
We have examined the balance sheet of the various funds of the
Huntington Bleach Public Facilities Corporation as of June 30, 1974
and the related analysis of changes in fund and reserve balances
for the period From inception, on November 25, 1970 to June 30, 1974.
Our examination was made in accordance with generally accepted auditing
standards, and accordingly included such tests of the accounting
records and such other auditing procedures as we considered neces-
sary in the circumstances.
In our opinion, the aforementioned financial statements present
fairly the financial position of the various funds of the Huntington
Beach Public Facilities Corporation at June 30, 1974, and the
results of operations of such funds for the period 2rom inception
or, Hovember 25, 1970 to June 30, 1974, in conformity with generally
i accepted accounting principles.
Newport Beach, California
August 27, 1974
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BUNTINCTON BEACH PUBLIC FACILITIES CORPORATION
BALANCE SHEET, ALL PUN03
June 30, 1974
Civic Center Libra
Total Interest Interest
All Funds Total Curing Total During
(Memorandum Wenorandum Construction Construction Reserve (Memorandum Construction Construction Reserve
Only) Cnly) Fund Pund Fund Only) Fund Fund Fund
ASSETS:
Cash held by trustee $5 907 $2 835 $2 834 $1 $3 072 $3 072
Time certiricntes or deposit 3 777 607 1 420 105 1 281 557 U 37 214 1 334 2 357 502 2 176 790 $180 712
Temporary Investment in U.S. Government
securities, at cost (market $1,207.510) 1 346 296 937 400 83 194 854 286 408 816 1 003 $407 813
Accrued Interest receivable 68 686 18 294 8 057 4 664 5 553 50 392 29 428 11 115 9 649
Long-torn leases receivable (Note 2) 10 565 B78 8 386 437 8 386 437 2 179 441 2 179 441
Deferred rental expense Ulo::e 2) 650 000 350 000 350 000 300 000 300 000
Duo from other funds 61 339 35 446 36 446 44 893 44 893
LLU—W 21.,;51 sq I 148 5T4 ;:.Lm 861 17$ 45�3.�17� a 714 ?T 191 827 LiT 662
LIABILITIE3, RESERVES
AND FUND BALANCES:
Bonds payable (Note 31 16 100 coo 11 Ica Goo 11 100 000 5 000 000 5 000 00n.
Accrued Interest payable 387 948 269 992 289 992 97 956 97 956
Accounts payable, construction 689 60% 420 115 420 115 269 489 269 489
Accounts payable, trustee 972 972 972
Due to other funds 81 339 36 446 36 446 44 893 44 893
Due to City of Huntington Beach 94 368 93 294 93 294 i C'! 1 014
17 354 231 11 940 Big 11 614 381 326 435 5 413 412 5 270 563 142 849
Reserve for bond retirement 1 278 836 861 174 861 174 417 6G2 417 662
Fund balences (2 137 354) (1 650 396} (1 465 856) (194 540) 4s 86 958) (535 936? 48 978
$16�13 $1 5U1, SqT no 14_8 4325 $1!L Bg8 1861 114 $5 -441; 116 $4 VAN 997 627 $1I Uj
The accompanying notes are an antegral part of this statement.
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HMIMDTON BEACH PUBLIC FACILITIES CORPORATION
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ANALYSIS OF CHANOES ZN FUND AND RESERVE BALANCES
For The Period From Inception On November 25. 1976
To June 3D, 1974
Civic Center Library
Total Interest Interest
All Funds Total During Total During
(Hemorandun {Memorandum Construction Construction Reserve (Memorandum Construction Construction Reserve
only) only) Fund Fund Fund Only) Fund Fund wand
Revenues:
Interest incase it 281 385 3800 540 $592 352 $75 397 1132 791 $480 845 1390 r,06 $44 8*; $45 446
Premium on bond sale 1 172 654 854 318 318
1 252 557 801 394 593 206 75 397 132 791 481 163 390 824 44 893 45 W
Transfera from other funds 3 486 116 2 427 704 2U1 923 1 370 872 854 909 1 058 41? 71 677 5ST 735 399 000
Total additions 4 768 673 3 229 098 795 129 1 446 269 987 Too 1 539 575 462 501 632 628 444 446
Less:
Interest expense 2 094 711 1 555 954 542 1 555 412 538 757 538 757
Administrative expense 46 364 34 662 34 662 11 702 11 7D2
Transfers to other funds 486 116 2 427 704 2 225 781 73 397 225 526 1 05A 412 58� 6 735 44 893 26 784
Total deductions 5 62T 191 4 018 320 2 260 985 1 630 809 126 526 1 608 871 998 437 563 650 26 784
Reserve balances.
June 30. 1974 l 2+,T�,8,�5 861 174 $861 jL 417 662 341766
Fund balances,
June 30. 1974 65�) ($184 540) (3486 958) (4c ) =48 978
The accompanying notes are an integral part of this statement.
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
• NOTES TO FINANCIAL STATEMENTS
1. Summary Of Accounting Policies:
• a. Method Of Accounting:
The Corporation uses a modified accrual basis of accounting
under which expenditures are recorded when incurred and
revenues are generally recorded when received. Revenue
• from lease operations is recorded on the financing method.
b. Interest Income:
Until completion of a project interest earned in the
Interest During Construction Fund shall be transferred to
the Construction Fund and Interest earned in the Reserve
• Fund may he transferred to the Construction Fund.
Upon completion of a project interest earned in the various
funds will be used first to make up any deficiency in that
fund and second it will be transferred to the Rental Revenue
• Fund.
c. Funds:
Upon completion of construction, a Rental Revenue Fund will
be established into which all lease and other revenues and
any excess Construction Funds will be aeposited.
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Funds in the Rental Revenue Fund will be disbursed, first
to a Debt Service Fund in an amount sufficient to pay one
succeeding principal and two succeeding interest install-
ments, second any amount, necessary to restore Reserve Fund
to an amount equal to one year's lease revenue, third to an
• Administrative Expense Fund an amount equal to the budgeted
administrative expenses of the Corporation, and fourth to 1
Bond Redemption Fund all remaining amounts.
The Bond Redemption Fund will be used first to make up any
deficiency in the Debt Service Fund, Reserve Fund, or
Administrative Expense Fund in that order and then may be
used to purchase or redeem outstanding bonds, or for changes,
additions or alterations to the project or to reimburse the
city for rent paid to the Corporation.
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Continued
HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
« NOTES TO FINANCIAL STATEMENTS, Continued
1. Summary Of Accounting Policies, Continued:
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d. Organization:
The Huntington Beach Public Facilities Corporation was
incorporated as a nonprofit corporation for the purpose of
financing the construction of public buildings for the City
of Fentington Beach. The Corporation is currently
financing construction of the Civic Center and Central
Library projects.
2. Leases:
Civic Center:
The Corporation has entered into a lease and sublease agreement
with the City of Huntington Beach for the Huntington Beach
Civic Center. The city has leased to the Corporation the
Civic Center site for $350,000 advance rental. Term of the
lease is from January 15, 1972 to one week after the termination
of the sublease.
The Corporation has subleased the Civic Center site and improve-
ments to the city for $854 ,900 annual rental. The sublease
commenced July 1, 1974 for a term of 30 years or until after
all debts of the first bond issue (see Note 3) have been
discharged, whichever comes first.
Library:
The Corporation has entered into a lease and sublease agreement
with the City of Huntington Beach for the Central Library. The
city has leased the site to the Corporation for $300,9000 advance
rental. Term of the lease is from September 1, 1972 to one week
after termination of ;he sublease.
i The Library is currently under construction and is projected to
be completed in 1975 at which time the city will take possession
and the sublease will commence for a term of 30 years or until
all debts of the second bond issue (see Note 3) have been dis-
charged, whichever comes first. Annual rental under the subleace
will be $399,000.
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Continued
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HUNTTNGTON BEACH PUBLIC FACILITIES CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
2. Leases, Continued:
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Library, Continued;
The city is to pay all taxes, insurance, administrative and
maintenance costs under the leased. Title to site improvements
will pass to the city at the termination of the leases. Advance
rentals paid to the city are recorded as deferred rental expense
and will be amortized over the terms of the subleases. Revenue
from the above leases will be recorded under the finance method.
The effective interest rate to be paid by the city is estimated
to be approximately 8h$ under both leases. The effective
interest rate is subject to change based upon any refunds the
Corporation may make to the city with excess funds (see Note le) .
3. Bonds Payable:
Original Balance
0 Amount Not Matured
Sold June 30,, 1974
First issue:
Civic Center leasehold mortgage
bonds, with interest rates 5.0$
i to 7.0%, payable semiannually
on January 15 and July 15.
Maturing annually on January 15
in varying amounts from $200,000
to $890,000 with final maturity
in 1998
$11 100 000 $11 _100 000
ww�i�a t1w�.�
i Second issue:
Library leasehold mortgage
bonds, %-.ith interest rates
5.0% to 7.0%, payable semi-
annually on March 1 and
0 September 1. Maturing annually
on September 1 in varying
amounts from $305,000 to
$385,000 with final maturity
in 1997 $'1ML0 ILO $j.a0m.000
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Continued
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HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION
r NOTES TO FINANCIAL STATEMENTS, Continued
3. Bonds Payable, Continued:
The bonds were issued under separate trust indentures with the
Bank of America N.T. & S.A. as trustee. The Corporation, at
its option, may redeem first issue bonds maturing on or after
January 151 1983 and second issue bonds maturing on or after
September 1, 1983 with funds from any source. Redemption shall
be at the principal amount plus a premium equal to one -fourth of
1; for each year and remaining fraction of a year between the
date of redemption and the date of maturity up to a premium of
3--1/2% plus accrued interest to the date of redemption.
Unless the City of Huntington Beach accepts and takes possession
• of the Library prior to March 1, 1975 (see Note 2) there will not
be sufficient funds in the Interest During Construction Fund to
pay the necessary interest and it will be necessary to use
Reserve Funds.
4. Commitments:
Uni_(•orded contractual obligations for construction of the
Civic Center and Library amounted to approximately $1,350,000.
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