HomeMy WebLinkAboutReport on Examination of Financial Statements - 6/30/75 r1
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CITY OF HUNTINGTON BEACH
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REPORT ON EXAMINATION OF FINANCIAL STATEMENTS
A For The Year Ended Jime 30, 1975
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CITY OF HUNTINGTON BEACH
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TABLE OF CONTENTS
Page
Accountants' Report 1
Balance Sheet, All Funds 3
Balance Sheet, .Special Revenue Funds 4
Balance Sheet, Debt Service Funds 5
Balance Sheet, Capital Project Funds 6
Balance Sheet, Enterprise Funds 7
Analysis Of Changes In Fund Balances, All Funds g
Analysis Of Changes In Fund Balances, Special
Revenue Funds 5
Statement Of Revenue, All Funds 10
Statement Of Revenue •- Estimated And Actual -
General Fund 11
Statement Of Revenue - Estimated And Actual -
Special Revenue Funds 12 i
. Statement Of Revenue, Expenditures And Fund
Balances - Debt Service Funds 14
Statement Of Revenue, Expenditures And Fund
Balances - Capital Project Fundc 15
Statement Of Expenditures And Encumbrances
Compared With Appropriations - General Fund 16
Statement Of Expenditures And Encumbrances
Compared with Appropriations - Special
Revenue Funds 17
Statement Of Income - Budgeted And Actual -
Water Utility Fund 3.8
Analysis Of Changes In Retained Earnings -
Water Utility Fund ly
Schedule Of Operating Expenses - Budgeted And
Actual - Water Utility Fund :0
M Statement Of Changes In Financial Position -
Water Utility Fund
21 �
Statement Of Income (Loss) And Retained
Earnings (Deficit) - Meadowlark Golf
Course Fund 22
Statement Of Changes In Financial Position -
Meadowlark Golf Course Fund 23
Notes To Financial Statements 24
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COOPERS 6 LYBRAND
CCRTIrICD PUaOC ACCOUNTANT$
IV PRINCIPAL Ap[AS
or?me wOPLD
City Council
City of Huntington Beach
Huntington Beach, California
We have examined the financial statements of the various funds and
M account groups of the City of Huntington Beach as of June 30, 1975
and for the year then ended, listed in the foregoing table of
contents. Our examination was made in accordance with generally
accepted auditing standards, and accordingly included such teste of
the accounting records and such other auditing procedures as we
considered necessary in the circumstances except as stated in the
following paragraph.
The Water Utility Fund does not maintain detailed records of
approximately $10,400,000 of purchased property and equipment that
is capitalized. In addition, the Water Utility Fund has capitalized
approximately $8:370,000 for assets contributed to the City t rough
June 30, 1968 by subdividers at values estimated by City personnel.
There is no supporting documentation for the amount capitalized.
Contributions by subdividers since June 30, 1968 have not been
recorded o, the books. Because we were unable to satisfy ourselves
by appropriate audit tests or by other means as a result of these
t incomplete records we are unable to express an opinion on the
.� accompanying rinanci.al statements of the Water Utility Fund.
The City does not maintain detail property accounts and is therefore
unable to properly account for its fixed assets as exvlat-ed in
No-' - 1. Generally accepted accounting principles applicable to
municipalities recommend that, in the absence of complete historical
A cost records, the fixed asset accounts be adjusted to reflect actual
or estimated acquisition costs of property currently owned. Because
I of the possible material effect of the foregoing deviation from
generally accepted accounting principles we do not express an
`` opinion on the financial statements of the General Fixed Assets.
I � In our opinion, the financial statements listed in the table of
contents other than the financial statements of the Water Utility
Fund and the General Fixed Assets present fairly the financial
position of such funds and account groups of the City of
Huntington Beach at June 30, 1975 and the results of operations of
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such funds for the year then ended, in conformity with generally
accepted accounting principles which, except for the change, with
n which we concur, in the method of recording certain abatements
as described in Note 9 to the financial statements, have "een
applied on a basis consistent with that of the preceding year.
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Newport Beach, California
October 8, 1975
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CITY OF H9WINOION BEACH
BALANCE SHIMI, ALL FM3
June 30, 1975
Total special Debt Capital General General
(Memorandum General Revenue Service Project Enterprise Trust Long-Term Fixed
Only) Fund Funds Funds Ponds Funds Fund Debt Assets
A S S E T S:
Cash (Note 2) $7 912 130 $1 582 697 35 333 146 $14 810 483 353 $768 060 0130 072
Cash advanced to fiscal agent 357 893 6 619 351 274
Marketable securities (Note 3) 166 060 166 COO
Accounts receivable (Note 9) 1 320 864 320 144 169 939 9 740 220 658 383
Less, Allowance for doubtful
accounts (15 756) (2 088) (1 670) (12 000)
Receivable - federal grants 271 015 271 015
Property taxes impounded B89 957 889 957
Less, Reserve for property
taxes impounded (889 957) (889 957)
Special assessments receivable 24 636 24 636
Prepaid leases and other 279 896 21T 254 62 742
Deposits 40 969 8 700 32 249
Due from other funds 693 538 71 259 620 250 2 000
Estimated future revenue and
resources for long term debt
retirement (Notes 4, 5, and 6) 18 615 532 118 615 532
Property and equipment, leas
allowance for depreciation
(Note 1) 37 O63 358 18 837 899 818 225 659
66 7� 3`= j Bn i 57 089 789 833i3 LjL%= 2 i k55 :8 6 s S 18 22S 659
LIABILITIES, RESERVES, FUND
BALANCES AND RETAINED EARNINGS:
General payables 903 270 538 460 246 607 115 003
Accrued interest payable 141 203 13 786 127 41T
Contracts payable (Note 8) 274 557 273 667 900
Payroll payables 700 409 6B1 246 19 163
Due to other funds 693 538 510 430 ill 850 65 971 5 287
Deferred eompenaation payable 246 260 24b 260
Deferred revenue no 885 110 655
Other liabilities 22: 990 209 720 13 869 401
Deposits held in trust 127 i68 127 168
Matured interest payable 21 9B1 6 619 15 366
Bonded debts not natured (Note 4) • 8 675 470 35 478 3 056 000 5 590 D00
Long-term debt (Note i) 260 00 260 000
Long-term leases payable,
Including deferred rental
Income (Note 6) 13 406 302 640 770 12 765 532
Notes payable (Note 7) 2 272 000 2 272 000
Peserved for:
Encumbrances (Note 1E) 613 079 327 790 285 289
Revenue bond rctireaent 441 550 441 550
Other 31 526 31 526
Contributions to Enterprise Funds 9 733 331 9 T33 331
Investment in general fixed assets 18 225 659 18 225 659
Fund balances 5 108 023 61 018 5 050 952 24 550 (28 497)
Retained earnings 2 520 058 4 520 058
466 73 82 1 $2 Ge= Sjl= 4jj= SjQ..: $1-AZ ASS 018 6�-42 $111 22„9
See accompanying notes. 3
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C1Tr OF HUNTIUMpi 8EAC8
UUMC$ SMW, SPECIAL BSIfE M FUNDS
-Tuna 30a 1975
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Parks And Clvle Planned
Special Oes Recreation Local Special Revenue Unpower
Total Tax Fund Fund Liprovaaent Serer Drainage Grant Asseaament Sharing Grant
Fund
_A 3 S E T 5: ---__ F►a�d - _ Fund rand------� r»td
Cash $5 333 146 31 344 667 $45 506 41 1T6 244
$1 340 006 $6g8 227 014 568) S44 168 Accounts receivable (Note 9) 769 939 532 010 66 377 138 049 B 8 iT22 796 (i29 420)
Less. Allowance for doubtful 5 588 5 389 q 2qb 9 382
accounts 0 670)
(1 b7o)
Receivable - federal grants 271 015
Special aasesanr_nts receivable 24 636 2T1 015
Prepaid lease expense 24 636
62 742 62 742
Deposits 8 Too
8 700
Due from other funds 620 260
—p—T-�-� 08 410 Ill.� � �e�5�a _
T 09`8g 1 87 1L.� 3 pi5 112 621 1 172 014 665 (2ils} 71..059 1 G
LIABILITIES. RESERVES. ol IQ% (&a ' O)
AND FUND BALANCES:
General payables 246 807 8 497 1 900 139 507 5 549 TT 313
Contracts payable (Motu 8) 273 667 T90 13.251
273 667
Due to other rondo 510 430
OthMr liabilities 491 coo 19 430
Bondrd debt, not natured ( 13 8ti3 513
11 346 2 01(Note #) 35 478 .
Deferred rental income (Note 6) 35 t78
640 770 640 TTO
Reserved for:
Encumbrances (Note 1£) 285 289 55 324 101 315 20 216 TOO
Other 31 526 105 Fund balances 97 807 9 822
31 526
a 0 2 1 812 8T6 172 212 411 o31 1 934 923 8 41) (9 284) 16 132 904
See accompanying notes. 37 0r i1 8� $17� $1 7` =,1 Bl2 014
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CITY OF HUNTINGTON BEACH
BALANCE SHEET, DEBT SERVICE FUNDS
June 30, 1975
1955 Water 1970 Park
Interest And Bond Intereat
Redemption And Redemption
Total Fund Fund
A S S E T S:
Cash $14 810 $60 449 ($45 639)
Cash advanced to fiscal agent 6 619 825 5 794
Accounts receivable a.Z40 1 027 8 713
LIABILITIES
AND FUND BALANCES:
Matured interest payable 6 619 825 5 794
Fund balances 224 550 61 476, (36 926)
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See accompanying notes.
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CITY OF HUXTINOTON BEACH
BALANCE ZHEET, CAPITAL PROJECT FUNDS
June 30. 1975
I970
Park Band 1955
Special Capital Construction Water Bond
Total Outlay Fund Fund Construction Pund
A S S E T S:
Caah $83 3.._ $14 554 (s8 51I} �77 310
87t '451 14 S5h
LIABILITIES
AND FUND BALANCES:
Due to other funds Ill 850 Ill 850
Fund Calancea (28 497) 14 554 (120 363) 77 310
See accompanying notes.
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CITY OIL HUNTINGTON BEACH
BALANCE SHEET, ENTERPRISE FUNDS
June 30, 1975
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Water Meadowlark
Utility Golf Course
A Total Fund Fund
A S S E T S:
cash $768 060 $413 721 $354 339
Cash advanced to fiscal agent 351 274 351 274
Marketable securities (Note 3) 166 000 166 oo0
Accounts receivable ^20 658 195 658 25 000
Less, Allowance for doubtful
accounts (12 000) (12 000)
Deposit] 32 269 32 260,
Property and equipment, less
allowance for depreciation
(Note 1) 18 837 899 12-64 4 058 3 193 843
~ 9 3§4 160 16 722 9§ 7
LIABILITIES, RESERVES, AND
RETAINED EARNINGS:
General payables 118 003 118 003
i Accrued interest payable 127 4:17 17 417 110 000
Contracts payable (Note 8) 900 900
Payroll payables 19 163 19 163
Due to other funds 65 971 65 971
Other liabilities 40? 401
Matured interest payable 15 366 15 366
Bonded debt, not matured
(Note 4) 3 050 000 3 050 000
i Notes payable (Note 7) 2 272 000 2 272 000
Reserve for revenue bond
retirement 441 550 441 550
Contributions to Enterprise
Funds 9 733 331 8 466 oo6 1 267 325
Retained earnings (deficit) 4 520 058 4 596 203 — �76 145
$20 164 160 $16 790 980 $3 573 180
See accompanying notes.
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CI:Y OF HUNTINGTON BEACH
i,NALYSIS OP CHAHOES IN FUND BALANCES, ALL FUNDS
For The Year Ended June 30, 1975
Total Special Debt Capital
(Me�oorandum Oeneral Revenue Service Project
Oat 1Y) Pad_ Funds Funds Funds
$
Salances� July 2, 1974 8G�2 g53 ----
313 381 s e3 44 2T5 x30 643 ts30 596)
Revenues Current year abatements 27 485 248 19 388 406
? 593 005 500 793 3 044 Reversal of prior year encumbrances 116 014116 014
Transfers from other funds excluding 228 050 16 770 211 280
Enterprise Funds 2 118 940 2 318 940
Transfera from Enterprise Funds
2 350 42 550
Transfers from long-terns debt (Note 5)
Adjustment to set up abatements 260 000 260 000
applicable to prior years
expenditures (Note 9) 912 350
Total additions 350 �—
i 18 1 2 Leas: 11 826 666 8 85�6-4 00 044
Expenditures and nonexpenditure
disbursements 27 206 063 21 451 239 5 246 4
Reserve for encumbrances 7 3 507 136 945
June 30, 1975 613 077
327 790 285 289
Transfers to other funds 2 116 340
2 il$ 940
Total deductio-19 29 g38 082 6 0 Z 507 136 t
Balances, June 30, 1575
See accompanying notes.
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CT27 OF HURTINOTON BEACH
ANALISIS OF CHANGES IN FtWD BALANCES, SFECIAL REVENUE FWW
For The Year Ended June 30. 19T5
Planned
Special Parka And CIVIC Local Special Revenue Itanporer Parking Traffic
Gas Tax Recreation Iasruvement Serer Drainage Grant Fssesaarnt Sharing Grant Meter Safety
Total Tund fund Fund Fund Fund Ynnd Fund Fund Pond lhaLa Tund
Balances. July 1. 1974 $3 84 275 i 22 16 (1306 4 2) ijl= !1 993 251 1299 289 {i2 '165) i16 132 it 4 0
AQven'1e3 7 593 005 1 347 944 562 366 2 274 5T8 219 499 52T 429 179 23? 1 193 2;5 790 406 $05 4113 $412 778
Current year abatements 116 014 116 014
Reuaraal of prior year encumbrances 211 280 106 027 105 253
Adjustment to act up abatemento
applicable to prior years g32 350 43 2 350
arpendltures (dote 9) _
Total additions 8 852 642 2 396 308 562 166 z 190 60 214 429 127 429 112237 — 1 298 549 790 406 85 413 412 TTB
Less;
Expenditures and nonexpendlture
disbursements 5 246 T43 450 273 83 702 1 274 244 357 612 844 559 195 551 1 217 244 B33 559
Reserve for encumbrances
June 30. 2975 285 289 55 324 111 315 20 215 700 105 97 BOT 9 822
Tranafers to other funds 2 115 940 400 GOO `_45 752 57i ss, 85 473 412 77!
Total deduettons 7 650 972 905 597 83 702 2 021 311 T 127 8!� 2 185 656 — 1 1" 988 843 391 8R 473 422779
Balances. June 30. 1975 SL 0S0 = !l B� S17x 222 xR11 oil UJI 923 "A=) ($2-M) W.AW $90% S96 O! 2 M)
See accompanying notes.
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CM OP HUN' UCIT,)M BEACH
STATPOMOp �' ALL F WDSp d Q
30. 1975
Total(RemaraMto Ge
rAral special Debt capital
i Taxes U--- sti._ Fitnd PundaRevenu4 ervice Project
!16 538 OnS13 804 8
Lieen3es and percits 5o0 $2 236 75 $497 450
Pines, forfeltures and 2 394 $11 2 236 292 158 529
Penalties 538 476
Une of money and property 125 698 412 778
Current services 1 088 428 767 233 316 348 3 343 $2 004
2 562 12a
From other agencies 639 064 923 056
Other revenue 5 14o 529 1 774 192 3 366 337
221 55C —.._y 27 1 0 2
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See aaconpanying notes.
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CITY OF HUNTINGTON BEACH
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STATEMENT OF REVENUE - ESTIMATED AND ACTUAL -- GENERAL FUND
For The Year Ended ,rune 30, 1975
Over
Estimated Actual (Under)
Revenue Revenue Estimated
Taxes:
Property taxes - current
year $8 087 829 $8 045 399 ($42 430)
Property taxes - prior
year 120 000 11 520 (108 480)
Other property taxes 3 000 3 783 783
Penalties on delinquent
taxes 18 000 19 803 1 803
Sales and use taxes 3 800 000 3 521 982 (278 018)
Franchises 299 000 334 969 35 969
In lieu - water utility 382 350 388 258 5 908
Cigarette tax 521 000 467 668 (53 332)
�► Occupancy tax 58 000 61 324 3 324
Real property transfer tax 1 235 000 949 794 (28 206)
Total taxes 14 524 IZ9 i3 804500, Q15 679)
Licenses and permits:
Business licenses 465 000 497 497 32 497
Oil well licenses 1 ;0 000 1 224 038 (245 962)
Building permits 684 000 429 D47 (254 553)
Other licenses and permits 154 000 85 310 (668 690) I
Total licenses and
permits 2 773 000 2- 236 292 ( 35 6 708) I
Fines, forfeitures and
penalties 185 000 125 698 (5_UO2)
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Revenues from use of money 1
and property 903 500 767 233 (14�) t
Revenue from other agencies:
State 1 487 000 1 415 948 (71 052)
County 360 000 208 263 (151 737)
Federal 16 526 16 526
Other 125 000 133 455 8 455
• Total revenue from other
agencies 1 972 000 1 774 192 (1997 808)
Charges for current service 722 000 639 064 (82 936) j
Other revenue 18000_ 41 427 2 427
Total revenue -
general fund $21 102 679 $12 388 406 ($1- 714 271)
See accompanying notes. iI
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j CITY OF HUNTINGTON BEACH
• STATEMENT OF REVENUE - ESTIMATED AND ACTUAL -
SPECIAL REVENUE F'JNDS
For The Year Ended Jung. 30, 1975
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• Over
Estimated Actual (Under)
Revenue Revenue Estimated
Special gas tax fund:
State gas tax $1 492 000 $1 312 634 ($179 366)
• Interest income 8 000 35 310 Z7. 210
Total revenue -
special gas tax fund 1 500 000 1 347 244 (152 0 6)
Parks and recreation fund:
• Subdivision license and
unit lot fees 790 000 6� 2 166 (22.7 634)
Civic improvement fund:
Utility taxes 2 070 000 2 236 875 166 875
Interest income 20 000 18 611 (1 389)
• Other revenue 19 092 12 092
Total revenue - civic
improvement fund ng0 000 2 274 578 184 5i8
Sewer fund:
• Sewer permits 180 000 73 046 (106 954)
Interest income 65 000 93 999 28 999
Local asseszment 60 000 _ 52 454 (7 546)
Total revenue - sewer
fund $ 0 000 $?19 499 ($85 503.)
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Continued
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CITY OF HUNTINGTON BEACH
STATEMENT OF REVENUE - ESTIMATED AND ACTUAL -
SPECIAL REVENUE FUNDS, Continued
For The Year Ended June 30, 1975
Over
Estima-ed Actual (Under)
Revenue Revenue Estimated
Planned local drainage fund:
Interest income $75 000 $59 193 ($15 807)
Local assessment 475 000 308 236 (166 764)
Other 160 OGO 160 000
Total revenue - planned
local drainage fund 520 000 5. 27 422 (22 1)
Grant fund:
Grants 1 294 000 172 23Z (1 114 763)
Revenue sharing fund:
Interest income 60 000 109 235 49 235
Federal revenue sharing 1 100 000 1 084 060 (15 940)
Total revenue - revenue
sharing fund 1 160 000 1 193 295 33 29
Manpower grant Fund:
Grants 310 -586 I90 406 479 820
Parking mater fund:
Meter collections U5 000 8. 5 473 (29 52 )
Traffic safety fund:
Vehicle code fines 380 000 412 778 32 778
'p Total revenue -
special revenue funds $8 4 86 $ 00 ($ off)
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See accompanying notes.
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CITY OF HUNTINaTON BEACH
STATEMENT OF REVENUE, EXPENDITURES AND FUND BALANCES --
• DEBT SERVICE FUNDS
For The Year Ended June 30, 1975
1955 Water 1970 Park
Interest Bond Interest
And And
Redemption Redemption
Total Fund Fund
« Revenue:
Property taxes $497 450 $33 744 $463 706
Interest incoxe - 3 341 2 202 1 1.41
Total revenue 50 J 793 .15 946 4644 8477
Expenditures:
Redemption of serial bonds 175 000 35 000 140 000
Interest on bondq 331 550 5 425 326 125
Fiscal agent's fees -- FIC5 106_
Total expenditures 507 136 40, 531 466_605
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(Deficit) to fund balance (6 343) (4 585) (1 758)
Fund balances, July 1, 1974 30 893 66 061 (35 168)
Fund balances,
� • .Tune 30, 1475 $24 "„1,0 $6 ($ 6 226)
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See accompanying notes.
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CITY OF H'JII4 IM"I0N BEACH
STATEMM OF REV"EME, EXPMMITURES AIM FiFhSD BALANCES -
CAPITAL PROJECT FUNDS
For The Year Ended June 30, 1975
1970 1955
Park 'tend Water Bond
Special Capital Construction Construction
Total Outlay Pund Fund Fund
Revenue:
.nterest income :2 004 $2 0o4
Sale or property 1 040 $1 040
Total revenue 3 O44 2 004 1 040
Expenditures:
Central Par', g 211 24
Increase in fend balance 2 099 1 093 1 006
Fund balances, July 1, 1414 (30 596) 13 461 (121 367} $7.1 3n
Fund balances, June 30, 1975 (s28-,4,2) 1M 2% (3 3) *=2a
See accompanying notes.
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CITY OF WM-ING OON BEACH
STATEMMrr OF EXPENDITURES AND EUCUMBRANCE.S COMPARED
WITH APPROPRIATIONS - OER .L FUND
For The Year Ended June 30, 1975
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Expenditures
Total
Supplies Expenditures Original
Personal And Other Fees Capital And Appronrlations Unencumbered
Services And Services Outlay Total Encumbrances Encumbrances (Note 1D} Balance
General government:
City administration $193 077 1123 601 it 315 $31? 993 $12 167 $310 160 f36T 539 3!T 379
Finance department 463 828 91 B11 2 694 558 333 5 080 563 413 65? 340 6 927
City attorney 216 202 36 873 2 003 255 078 287 255 365 20 540 29 1T5
Planning 402 432 112 793 105 515 330 30 B12 545 842 557 590 11 748
All other 277 113 2 191 083 16 OB1 2 494 277 2 334 2 486 611 2 242 106 (24.4 0 )
7 552 652 2 556 162 22 198 4 13f 011 50 39D 4 181 391 4 084 11 (g3 276)
Culture - recreation:
Library 508 820 261 948 6 109 176 677 88 988 665 B65 952 086 i1S 221
Parks and recreation 1 135 293 413 928 22 670 2 571 891 23 2 1 595 190 1 519 748 24 558
1 644 113 675 816 26 7T9 2 346 768 212 28 2 461 91 2 601 834 140 T79
Public safety:
Police 5 GOT 029 508 359 132 678 5 848 265 60 695 5 708 961 5 612 306 (97 655)
Fire 3 000 365 318 779 55 260 3 374 405 43 993 3 41U 395 3 489 38 71 41L0
Barbara and beaches 844 687 260 962 38 911 2 044 560 12 297 1 056 757 1 287 212 230 455
Building 635 357 44 596 27 552 707 505 TOT 505 726 425 18 920
Other 48 593 33 114 1 682 83 589 679 B4 265 103 831 19 563
9 516 032 1 065 BID 2256 483 10 959 325 117 564 10 975 889 11 218 612 242 723
H!ghway, sanitation and
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waste removal:
Streets 1 120 656 1 1gg9 614 7 202 2 267 552 16 797 2 284 349 2 526 60r, 244 25T
Engineering 717 616 63 243 2 799 783 $55 193 784 051 818 124 34 073
Other 535 20B 523 423 13094 1 061.725 10 569 2 092 294 1 237 908 142 614
2 373 680 1 716 280 23 175 4 113 135 47 559 4 160 624 4 584 638 423 944
Total 11S _0 61177 $6 Olt 147 Ej'U_"' $21 4551 s219 47127 792 $21 779 029 $222 48��4 $110 1 0
See accompanying rotes.
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CITY OF HUNTINGTON BEACH
STATEXDIT OF EXPENDITURES MD ENCUMBRANCES
COMPARED WITH APPROPRIATIONS - SPECIAL REVENUE FUNDS
For The Year Ended Jung 30. 1975
Special Parka Andd Civic Pla=ed
Local Revenue Manpower
Gas Tax Recreation I
Total Fund Fund rprovement Sewer Drainage Grant Sharing Grant
Fund Fund Fund Fund Fund Grad
Original Appropriations (Ncte 1D) $5 702 Ill it`o_000 =810 000 #1 629 248 ! 0 000 = 0 000 $29 000 $1 aim
Expenditures 5 246 743 450 273 83 702 1 274 244
r 357 611 840 559 185 551 1 217 244 #833 559
Encumbrances 28 28 - 102 2 20 216 OG �05 80 822
Total expenditures and �'3 �-
encumbrances 5 532 0a2 505 527 83 702 L175 559 377 827 845 259 165 656 1-315 051 643 181
Unencumbered balance 3170 081 $555 i725 298 l251 689 {# � {#
See accompanying notes.
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CITY OF HUNTINGTON BEACH
WATER UTILITY FUND
STATEMENT OF INCOME - BUDGETED AND ACTUAL
For The Year Ended June 30, 1975
Over,
(Under)
Budget Actual Hud&et
Operating revenues:
o Metered water sales $2 475 000 $2 527 569 $52 569
Other water sales 74 000 58 085 (1.r,_915)
2 549 000 2 585 654 36 654
Less, Operating expenses 2 270 ,3,17 2652. 867 ( 8 )
Net operating income
(loss) 278 683 (67 21 ) (1 5 096)
Add nonoperating income:
Interest income 85 500 70 265 (15 235)
Acreage Pees 30 000 29 820 (180)
Tract fees 100 000 36 677 (63 323)
New service 100 000 94 481 (5 519)
Other 68 5006 979 8. 47g
384 000 308 222 (75 778)
Less, Nonoperating expenses:
Bond ir►tere,3t 102 000 106 242 4 242
Fiscal agenis fees 1 500 1 303 (197)
Other 20 000 32 792 12 122
123 500 14o 337 16 837
Net income $ U= $10� ($43�)
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See accompanying notes.
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CITY OIL HUNTINGTON BEACH
WATER UTILITY FUND
ANALYSIS 0P CHANGES IN RETAINED EARNINGS
+d For The Year Ended June 30, 19?5
BLiance of retained earnings, July 1, 1974 $4 503 081
Add:
Net income for the year ended June 30, 1975 in 672
Reduction in reserve for 1955 G. 0. bonds 35 000
Less transfers to general fund (42 550)
p► Balance of retained earnings,
June 30, 1975 $4 1596
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See accompanying notes.
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CITY OF HUNTINGTON BEACH
WATER UTILITY FUND
SCHEDULE OF OPERATING EXPENSES - BUDGETED AND ACTUAL
For The Year Ended June 30, 1975
p Under
(Over)
Budget Actual Bum
Water source: ,
Purchase of water $450 000 $603 474 ($153 474)
p Materials, supplies and service 9 900 38 607 (2�)
Total water source 4E2 goo 64,2 081 (18�)
Wells and treatment plant:
Labor 46 800 43 oo7 3 793
Pump tax 300 000 294 921 5 079
Materials, supplies and service 117 700 l 9 92 (22 225)
Total wells and
treatment plant 464 500 477_ 853 (11, 353)
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r Transmissicn and distribution:
Labor 188 goo 196 724 (7 824)
Materials, supplies and service 12 960 13 221 (261)
Total transmission and
distribution 201 860 209 945 (88 085) i
Customer accounting:
Labor 72 000 76 191 (4 191)
Accounting 91 504 91 132 372
Uncollectible accounts �4 _000 3 161 839
Total customer accounting 161 504 170 484 (2 980)
Administration and general: j
Labor 40 000 50 932 (10 932) i
Leases 105 510 105 011 499
Other 151043_ 187 8a (36 ems)
296 553 243 796 (47 245)
Depreciation 40,..0 000 G20!JG8 (20 448)
In-lieu tax 2880 000 388 258 (10 8 258) '
Total operating expenses $2.27,0a17 $2 2 86Z ($ 8 � U)
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See accompanying notes. ;
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CITY OF HUNTINGTON BEACH
WATER UTILITY FUND
A STATEMENT OF CHANGES IN FINANCIAL POSITION
For The Year Ended June 30, 1975
Funds were provided by:
Net income $100 672
Plus items not requiring working
capital - depreciation 420 448
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Funds were used for:
Additions property and equipment 580 086
1963 water revenue bond repayment 110 000
Transfer to general fund 42 550
M 6
Decrease in working capital
Changes in working capital are comprised of:
Cash (358 376)
Cash advanced to fiscal agent 5 364
Accounts receivable, net (43 057)
Marketable securities 166 000
Genera? payables 29 619
Payroll payables (3 260) ,
Other liabilities 300
Interest payable (8 096)
Decrease in working capital $2 1 516
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See accompanying notes.
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CITY OF HUNTINGTON BEACH
MEADOWLARK GOLF COURSE FUND
~ STATEMENT OF INCOME (LOSS)
AND RETAINED EARNINGS (DEFICIT)
For The Year Ended June 30, 1975
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Lease income $51 339
Less, Depreciation ij 484
Net operating income 33 855
Less, Interest expense 110 000
Net income (loss) and retained
earnings (deficit) ($ )
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See accompanying notes.
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CITY OF HUNTINGTON BEACH
MEADOWLARK GOLF COURSE FUND
STATEMENT OF CHANGES IN FINANCIAL POSITION
For The Year 7nded June 30, 1975
Funds were applied to:
Net loss $76 145
Less, Items not requiring working
capital - depreciation 17 484
58 661
Purchase of property and equipment 939 325
997 986
Funds were provided by:
Contributed capital:
County of Orange (Note 7) $600 000
Re7enue sharing fund 66y 325 1 267 325
Increase in working capital 269 339
Changes in working capital are comprised of:
Cash 354 339
Accounts receivable 25 000
Accrued interest payable (110 000)
Increase in working capital $262
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See accompanying notes.
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CITY OF HUNTINGTON BEACH
NOTE; TO FINANCIAL STATEMENTS
June 30, 1915
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3 . Summary Of Accounting Policies:
P
A. Method Of Accounting:
The City, like most municipalities, uses a modified accrual
basis of accounting under which expenditures are recorded
when incurred and revenues are generally recorded when
received.
B. General Fixed Assets:
The General Fixed Assets acquired by the City prior to
July 1, 1973 are not recorded on the City' s books. General
Fixed Assets, except municipal improvements other than
■ buildings, acquired since July 19 1973 are recorded at r,ost
on the City's books. General Fixed Assets are not
depreciated. +
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C. Water Utility Plant, Property And Equipment And
De reciation:
The accounts for the water utility plant include $18,731,164
of property and equipment, less $3,087 109 accumulated
depreciation. Of the total $18,731,164, $10,357,766
represents capital outlay at cost and $8,373,398 represents
an amount for assets coiitributed to the City through
June 30, 1968 by subdividers, at values estimated by City
personnel. Contributions by subdividers since June 30, 1968
are not recorded on the books of the City. Depreciation is
provided on the straight-line method over the estimated
useful lives of the assets.
D. Appropriations :
The City adopts a tidget annually which appropriates amounts
for each department or division. As of year-end the City
Council revises these appropriations. Amounts included in
the financial statements represent original rather than
revised appropriations.
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E. Reserve For Encumbrances: }
The City records obligations in the form of purchase orders,
contracts and other commitments which are chargeable to an
appropriation and for which a part of the appropriation is I
reserved. They cease to be encumbrances when the actual
liability is incurred.
0 Continued
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CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS, Continued
w June 30, 1975
1. Summary Of Accounting Policies, Continued:
F. Special Assessments:
The City has numerous local improvement districts and
maintains a separate special assessment fund for each. The
City records the monies received and disbursed for the
• construction of the improvements for which the District was
created, and the receipt and disbursement of monies handled
for the payment of interest on and retirement of principal
amounts of the bonded indebtedness in the respective funds.
The City acts only as a fiscal agent,.
• 0. Federal Grants, Revenueharing, Etc_,:
The City maintains restricted use funds and special revenue
funds to comply with requirements of state and federal
statutes stipulating that monies apportioned to the City
be spent only for certain designated functions. During
w the fiscal year ended June 30, 1975, the City received
maniea from the federal government under revenue sharing
which has been accounted for in a separate fund.
tt. Pension Flan:
A City employees participate in the Public Employees'
Retirement System (administered by the State of California)
which plan covers substantially all employees. The total
pansion expense recognized by the City for the fiscal year
ended June 30, 1975 was $1,084,000. The excess, if any, of
the actuarially computed value of vested benefits over the
r total of the above pension fund is not available.
I. Vacation And Sick Leave:
The City expenses vacations as they are taken rattier than
as vested. The present vacation policy is that the vacations
i vest as earned with certain limitations. At June 30, 1975
the total vested vacation was approximately $825,000.
The City also expenses sick leave as taken rather than as
vested. At June 30, 1975 the total vested sick leave was
approximately $322,000.
Continued
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CITY OF HUNTINGTON BFAC11
ur ?MUTES TO FIlIA14CIAL STATEMENTS, Continued
Jane 30, 1975
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�g 2. Cash:
At June 30, 1975 cash consisted of the following:
Active bank accounta ($510 871")
Time certificates of deposit 7 210 000
Temporary :investments in
U.S. Government securities,
at cost , which approximates
market 1 210 000
Cash on hand 3 010
$L--212 148
3. Marketable Securities:
The Water Utility Fund purchased at a cost of $166,000, $285,000
of City of Huntington Beach 1963, 3h% Water Revenue Bonds,
maturing 1993. The bonds were purchased as a short-term invest-
ment. The market value at June 30, 1975 was $156,750.
Continued
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CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS, Continued
June 30, 1975
4. Bonded Debt Not Matured:
Matured/
Balance Retired Balance
Original Not Matured During Not Matured
Amount July 1, 1974- June 30,
Issue Sold 1974 1} 5 1975
General Obligation
Bands:
1970 park bonds,
with interest
rates 5.5% to
6%. Maturing
annually on
March l in
varying amounts
with final
maturity in
1995 $6 000 000 $5 520 000 $140 000 $5 380 000
1955 water bonds
with interest
rates 2% to 3%,
maturing can
August 1, in
Installments of
$35,000 to 1980 660 000 245000 255 000 210 000
$5 860 000 $5 Z65 oo $1 000 $5 5 (.�
Revenue Bonds:
1963 water revenue
bonds Series A.
3.25% to 3.5%
maturing annually
on November 1
in varying
amounts with
final maturity
in 1993 $�0„ Log $ !.oc�. Oo 3 050 _000
The general obligation bond balance of $5,590,000 represents a
future liability of the City. The $3,050,000 water revenue bonds
do not represent a general liability of the: City of Huntington
Beach.
Continued
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CITY OF HUNTINGTON BEACH
11OTES TO FINANCIAL STATEMENTS, Continued
June 30, 1975
4 . Bonded Debt Not Matured, Continued:
At June 30, 1975 there were $1050,000 authorized but unissued
1963 water revenue bonds.
Special assessment district bonds outstanding; totaled $35,478.
See Note IF.
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5. Long-Term Debt :
Amount due bank, Including
Interest at an effective rate
of approximately 7k%,
collateralized by assets
of approximately $630,000 $26 0
The City has entered into a sale-lease back agreement with a
bank. This agreement is for a term of four years and is
�+ deemed to be a. financing arrangement. Annual payments are
$77,193. This represents a future general liability of
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the City of Huntington Beach.
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6. Long-Term Leases Payable :
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Civic Center $9 068 923
Central Library 4311 3772
$la 406 �02
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A Civic Center:
The City has entered into a noncancellable lease and sublease
agreement with the Huntln. ton Beach Public Facilities Corporation
for the Huntington Beach ::ivic 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
.Improvements to the City for $854,900 annual rental. The
sublease commenced July 1, 1974 for a term of 30 years or
W until after all debts of the Corporation related to the
civic center have been discharged, whichever comes first.. j
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Continued
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CITY OF HUNTINGTON BEACH
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NOTES TO FINANCIAL STATEMENTS, Continued
June 30, 1975
6. Long-Term Leases Payable, Continued:
Central Library:
The CJty has entered into a noncancellable lease and sublease
agreement with the Huntington Beach Public Facilities Corporation
N for the Central Library. The City has leased the site to the
Corporation for $300,000 advance rental. Term of the lease is
from September 1, 1972 to one 4reek after termination of the
sublease.
The Corporation has subleased the library site and improvements
to the City for $399,000 annual rental. The sublease commenced
February 15, 1975 for a term of 30 years or until after all
debts of the Corporation related to the library have been
discharged, whichever comes first.
Civic Center And Central Library:
The City is to pay all taxes, insurance, administrative and
maintenance costs under the leases. Title to site improvements
will pass to the City at the termination of the leases. The
leases are deemed to be financing arrangements with the related
costs of land and buildings (equivalent to the future rental
payments discounted at approximately 7W being recorded in the
General Fixed Assets and the lease commitments being recorded
in general long--term debt. Advance rentals received by the
City are recorded as deferred rental income and are being
amortized over the terms of the sublease in the Civic Improve-
ment Fund.
7. Note Payable:
7% note payable for purchase of
Meadowlark Golf Course $2 272 000
The City has entered into a purchase agreement for the Meadowlark
Golf Course for $3,200,000 with an initial down payment of
$928,000 and annual principal and interest payments as follows :
1
1976 $472 000
1977 2001 150 000
2001 - 2008 200 000
2009 115 703
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Continued �
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CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS, Continued
June 30, 1975 4
a 7. Note Payable, Continued:
In connection with the above purchase, the City has leased the
operation of the golf course to ar outside party for 34 years
with minimum lease income of $150,000 annualy through 2007 and
income based on gross revenues for the years 2008 and 2009.
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The note payable is .collateralized by gross revenues, and does
not represent a general liability of the City. As part of the
initial payment of $928,000 the County of Orange contributed
$600,000 with the City's guarantee to use general funds of the
City, if necessary to insure that Meadowlark Golf Course will
p be maintained as open space.
8. Contracts Payable:
The f7ity has water, sewer and drainage reimbursement agreements
which provide for reimbursement to developers of cost i.neurrod
in constructing water, sewer and drainage facilities to the
extent fees are collected from users of the facilities. The
Cizy follows the practice of recording the fees as a liability
as they are collected and charges subsequent payments to
developers under the agreements to the liability account.
9. Adjustment To Set Up Abatements Applicable To Prior �
Years Expenditures:
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Prior to July 1, 1974, the City of Huntington Beach recognized i
reimbursements for gas tax fund projects from the state and i
county agencies on a cash received basis. Beginning in 1975 the
City is recognizing a receivable for reimbursable contracts as
expenditures are incurred based on the individual agreements.
Reimbursements totaling $932,350 have been recognized for
! expenditures incurred prior to July 1, 1974. $528,800 of that
balance has been received by .the City. The remaining $403,570 1
is included In the accounts receivable balance in the Gas Tax l
Fund.
Continued
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CITY OF HUNTINGTON BEACIi
NOTES TO FINANCIAL STATEMENTS, Continued
June 30, 1975
10. Commitments And Contingencies :
The City has entered into lease agreements as follows :
(a) Water storage capacity in the San Joaquin Reservoir
for a terin of 50 years commencing in 1967.
(b) Parking facilities from the Huntington Beach Parking
Authority commencing in 1969 for a term of 24 years
or after all of the 1968 revenue bonds of the
Authority are retired.
» (c) Park site from Ocean View School, District commencing
June 19, 1974 for a term of five years. The City
may cancel the lease at the end of any budgetary year.
If the City makes all lease payments during the five-
year period title to the property will pass to the
City.
The minimum annual rental commitment under the above leases
is as follows :
1976 $334 925
1977 329 925
i 1978 329 925
1979 265 050
1980 265 050
Five years
1981-1985 1 325 250
Five years
1986-1990 1 305 250
Five years
1991-1995 800 150
Remainder 210 000
As of June 30, 1975 the City is defendant in a number of suits
arising in the normal course of business and covered by insurance.
In addition to the above suits there is a class action suit
against the City in the amount of $8,000,000 for which, according
to the Office of the City Attorney, settlement is being proposed
through the payment of attorney' s fees in the sum of $300,000. `
Continued f
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CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS, Continued
pi June 30, 1975
10. Commitments And Contingencies, Continued:
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As a result of a police helicopter crash in August 1964, the
City has been named in two suits totaling $1,750,000. Maximum
insurance coverage is $1,0009000. Outcome of the suits is not
known at this time.
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