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Southern California Water Company - Purchase of Southern Cal
:n CITY OF HUNTINGTON BEACH RESOLUTION NO. __18.44--- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, CALIFORNIA, AUTHORIZING THE ISSUANCE OF $3,750,000 WATER REVENUE BONDS OF SAID CITY AND PROVIDING THE TERMS AND CONDITIONS FOR THE ISSUANCE OF SAID BONDS. WHEREAS, pursuant to Resolution No. 1730, a special municipal election was held in the City of Huntington Beach on April 30, 1963, for the purpose of submitting to the qualified voters of said city and the proposition of issuing water revenue bonds of said city in the amount of $5,700,000 pursuant to the Revenue Bond Law of 1941 (ChapteC6, Part 1, Division 2, Title 5 of the Government Code of the State of California) for the following purposes, to wit: The acquisition, construction and financing of additions to the waterworks system of the City of Huntington Beach including works and facilities for the production, storage, transmission and distribution of water, including capacity rights in works and facilities to be used jointly with other public corporations including capacity rights in the San Joaquin Reservoir to be constructed by the Irvine Ranch Water District, the West Orange County Feeder No. 2 and the Irvine Reservoir Transmission Line and additional capacity rights in the East Orange County Feeder No. 2, water storage reservoirs and tanks, water transmission and distribution mains, treatment plants, and water wells, and including the acquisition of all water rights, lands, easements, buildings, pipe, pumps, valves, fittings, meters, machinery, equipment, materials, apparatus and other property necessary or convenient therefor, and incidental expenses included in connection therewith. and WHEREAS, said proposition was approved by the votes of more than a majority of all the voters voting on said proposition at said special election, and this City is now authorized to issue said bonds as provided in said Revenue Bond Law of 1941; and WHEREAS, this City Council deems it necessary to issue and sell at this time $3,750,000 of said bonds as "Series A"; NOW, THEREFORE, the City Council of the City of Huntington Beach, California, DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows: Section 1. Definitions. As used in this resolution the following terms shall have the following meanings: (a) "City" means the City of Huntington Beach, California. (b) "City Council' or "Council' means the City Council of said City. (c) "Treasurer" means the City Treasurer of the City of Huntington Beach, California. (d) "Revenue Bond Law" means the Revenue Bond Law of 1941 as cited in the recitals hereof. (e) "The bonds", "said bonds" or "this series" means the bonds authorized by this resolution. (f) "Enterprise" means the enterprise defined in said Resolution No. 1730 calling said election, as follows: 1 i "That the enterprise referred to herein is defined to be the entire waterworks system of the City of Huntington Beach as such system now exists together with all additions to be acquired, constructed and financed with funds derived from the sale of the revenue bonds herein proposed to be issued, together with all improvements and extensions to said system later constructed or acquired." (g) "Gross revenues of the enterprise" means all revenues (as defined in Section 54315 of the Government Code, which include all charges received for, and all other income and receipts derived by the city from the operation of the enterprise or arising from the enterprise) received by the city from the services, facilities and water sales of the enterprise and excepting therefrom Zn revenues derived from connection charges and other deposits to secure service. (h) "Necessary and reasonable maintenance and operation costs of the enterprise" means the reasonable expenses of management, repair and other expenses necessary to maintain and preserve the enterprise in good repair and working order, excluding depreciation and obsolescence. (i) "Net revenues of the enterprise" means the amount of the gross revenues of the enterprise remaining after payment therefrom of the necessary and reasonable maintenance and operation costs of the enterprise. (j) "Maximum annual debt service" shall be the maximum sum obtained for any fiscal year thereafter by totaling the following: (a) The principal amount of all outstanding bonds payable in such fiscal year; and (b) The amount of minimum term bond payments for bonds required to be made in such fiscal year together with the premium thereon, if any be payable; and (c) The interest which would be due during such fiscal year on the aggregate principal amount of bonds which would be outstanding in such fiscal year if the bonds are retired as scheduled, but deducting and excluding from such aggregate amount the amount of bonds already retired in advance of said schedule. Security 1st National (k) "Fiscal Agent" means the Bank--ot-.L.as..Angel_es------------ or its successor, appointed pursuant to Section 10 of this resolution. (1) "Parity Bonds" means revenue bonds (including further series of bonds of the issue of which this series is a part) revenue notes or any other evidences of indebtedness which may be authorized and/or issued for the acquisition, construction and financing of extensions of, additions to, and improvements of the enterprise, payable out of the revenues derived from the enterprise and which, as provided in this resolution, rank on a parity with the bonds of this series. (m) "Subsequent resolution" means any resolution of issuance for any parity bonds. (n) "Fiscal year"means the year period beginning on July lst and ending on the next following June 30th. (o) "Authorized Investments" means any negotiable direct obligations of the United States, or any negotiable obligations for which the full faith and credit of the United States are pledged for the payment of principal and interest, or any obligations issued by federal land banks or federal intermediate credit banks established under the Federal Farm Loan Act, as amended, bonds or debentures of the Federal Home Loan Bank Board or of any federal home loan bank established under the Federal Home Loan Bank Act, obligations of the Federal National Mortgage Association established under the National Housing Act, as amended, and debentures and consolidated deben- tures issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm Credit Act of 1933, as amended. 2 i Section 2. Equality of Bonds, Pledge of Revenues. Pursuant to the Revenue Bond Law of 1941 and this resolution, said bonds shall be equally secured by a pledge, charge and lien upon the gross revenues of the enterprise without priority for number, date of bonds, date of sale, date of execution, or date of delivery, and the payment of the interest on and principal of said bonds and any premiums upon the redemption of any thereof shall be and are secured by an exclusive pledge, charge and lien upon the gross revenues of the enterprise, and all of the gross revenues of the enterprise (including revenues of improvements and extensions later constructed or acquired and revenues of existing systems, plants, works or undertakings to be acquired, improved or extended or for the acquisition, improvement or extension of which said bonds are to be issued) are hereby pledged, charged and assigned for the security of said bonds, and such gross revenues and any interest earned on the gross revenues shall constitute a trust fund for the security and payment of the interest on and principal of said bonds and so long as any of said bonds or interest thereon are unpaid said gross revenues and interest thereon shall not be used for any other purpose, except as permitted by this resolution and any subsequent resolution, and shall be held in trust for the benefit of the bondholders and shall be applied pursuant to this resolution, or to this resolution as modified pursuant to provisions herein, and any subsequent resolution. Nothing in this resolution or in any subsequent resolution shall preclude: (a) the redemption prior to maturity of any bonds subject to call and redemption and payment of said bonds from,proceeds of refunding bonds issued under said Revenue Bond Law of 1941 as the same now exists or as hereafter amended, or under the charter of said city or any other law of the State of California; (b) the issuance, subject to the limitations in Covenant 11 in Section 13 hereof, of additional indebtedness evidenced by revenue bonds, revenue notes or any other evidences of indebtedness payable out of the revenues of the enterprise and ranking on a parity with said bonds. Section 3. Amount, Issuance, Purpose and Nature of Bonds. That under and pursuant to said Revenue Bond Law revenue bonds of the city in the amount of $3,750,000 shall be issued for the purpose stated in the recitals hereof. Said revenue bonds shall be and are special obligations of the city and shall be and are secured by a pledge of and lien upon, and shall be and are a charge upon, and shall be and are payable as to the principal thereof and interest thereon and any premiums upon the redemption of any thereof, solely from the gross revenues of the enterprise, such gross revenues being hereby pledged, charged and assigned for the security of the bonds. Section 4. No General City Liability. The general fund of the city is not liable for the pay- ment of the bonds or their interest, nor is the credit or taxing power of the city pledged for the payment of the bonds or their interest. The holder of the bonds or coupons shall not compel the exercise of the taxing power by the city or the forfeiture of any of its property. The principal of and interest on the bonds and any premiums upon the redemption of any thereof are not a debt of the city nor a legal or equitable pledge, charge, lien, or encumbrance, upon any of its property, or upon any of its income, receipts, or revenues, except the gross revenues of the enterprise which. are, under the terms of this resolution and said Revenue Bond Law, pledged to the payment of said bonds and interest. Section 5. Description of Bonds. Said bonds shall be in the principal sum of $3,750,000, shall be 3,750 in number, numbered Al to A3,750, inclusive, and shall be of the denomination of $1,000 each. Said bonds shall be designated 1963 WATER REVENUE BONDS, SERIES A, shall be dated November 1, 1963, and shall be payable in consecutive numerical order on November 1 in each year of maturity in the amounts for each of the several years as follows: Bonds Bonds Bonds Year Maturing Year Maturing Year Maturing 1965............ $ 10,000 1970-1971_._.____.__. $ 90,000 1981 ------------ $ 140,000 1966------------ 20,000 1972-1973--------.--- 100,000 1982-1983.----------- 150,000 1967............ 40,000 1974-1976_---------__ 110,000 1993 1,890,000 1968___......... 60,000 1977-1978------------ 120,000 1969------------ 80,000 1979-1980------------ 130,000 3 r , The bonds maturing in the years 1965 to 1983, inclusive, are herein sometimes referred to as "serial bonds." The bonds maturing in the year 1993 are herein sometimes referred to as "term bonds." Section 6. Interest. Said bonds shall bear interest at a rate or rates to be hereafter fixed by resolution or resolutions, but not to exceed six per cent (6%) per annum, payable annually for the first year and semiannually thereafter, on the 1st days of May and November of each year. Each bond shall bear interest until the principal sum thereof has been paid, provided, however, that if at the maturity date of any bond, or if the same is redeemable and has been duly called for redemption, funds are available for the payment or redemption thereof in full accordance with the terms of this resolution, said bonds shall then cease to bear interest. Said bonds and the interest thereon shall be payable in lawful money of the United States of America at the _aer_ur_it_y_..1_.t__i�"'1.._B,%nk in Los Angeles, California, Fiscal Agent for the city, or, at the option of the holder, at any paying agent of the city in Chicago, Illinois, or in New York, New York. Section 7. Execution of Bonds. The Mayor of the city and the Treasurer of the city are hereby authorized and directed to sign all of said bonds by their printed, lithographed or engraved facsimile signatures, and the City Clerk of the city is hereby authorized and directed to countersign said bonds and to affix thereto the corporate seal of the city, and the Treasurer of the city is hereby authorized and directed to sign the interest coupons of said bonds by his printed, lithographed or engraved facsimile signature. Section 8. Registration. Said bonds may be registered either as to principal only or as to both principal and interest, and the form of registration of any registered bond may be discharged from registration in the manner and with the effect set forth in the provisions for registration contained in the form of bond set forth herein. Section 9. Redemption of Bonds. The bonds maturing on or prior to November 1, 1983 are not subject to call or redemption prior to maturity. The bonds maturing on November 1, 1993 are subject to call and redemption, at the option of the city,on November 1, 1973 or on any interest payment date there- after prior to maturity, at a redemption price equal to the principal amount thereof plus the following premiums (percentage of par value) if redeemed at the following times: REDEMPTION DATES AND PREMIUMS On or After And Prior to On or After And Prior to November 1 November 1 Premium November 1 November 1 Premium 1973 1974 4 % 1982 1983 1'3/a%O 1974 1975 33/4 1983 1984 11/a 1975 1976 31/2 1984 1985 11/4 1976 1977 31/4 1985 1986 1 1977 1978 3 1986 1987 3/4 1978 1979 23/ 1987 1988 1/2 1979 1980 21/2 1988 1989 1/4 1980 1981 21/4 1989 Maturity —0— j 1981 1982 2 4 All or any of the bonds subject to call may be called for redemption at any one time. If less than all of the bonds are redeemed at any one time, such bonds shall be redeemed by lot. The interest payment date on which bonds are to be presented for redemption is hereinafter sometimes called the "redemption date." (a) Notice of Redemption. Notice of the intended redemption shall be published by one insertion in a newspaper of general circulation in the County of Orange, California, and in a financial news- paper or journal of national circulation published in the City of New York, New York, said publica- tions to be at least 30 days but not more than 60 days prior to the redemption date. The notice of redemption shall (a) state the redemption date; (b) state the redemption price; (c) state the numbers and date of maturity of the bonds to be redeemed, provided, however, that whenever any call includes all of the outstanding bonds subject to call the numbers of the bonds need not be stated; (d) require that such bonds be surrendered with all interest coupons maturing subsequent to the redemption date (except that no coupons need be surrendered on bonds registered as to both principal and interest) at the See_ay.x_ity__lat___Nat'_I ,Ban-kin Los Angeles, California, Fiscal Agent for the city, or, at the option of the holder, at any paying agent of the city in Chicago, Illinois, or in New York, New York; (e) require that bonds which at the time of call are registered so as to be payable otherwise than to bearer shall be accompanied by appropriate instruments of assignment duly executed in blank; and (f) give notice that further interest on such bonds will not accrue after the designated redemption date. The Fiscal Agent shall, on or before the date of publication of said notice of redemption, mail a similar notice, postage prepaid to any person, firm or corporation that originally purchased bonds from the city. If any of the bonds designated for redemption shall be registered so as to be payable otherwise than to bearer, the Fiscal Agent shall, on or before the date of publication of said notice of redemption, mail a similar notice, postage prepaid, to the respective registered owners thereof at the addresses appearing on the bond registry books. The actual receipt by the holder of any bond (hereinafter referred to as "bondholder") of notice of such redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such bonds or the cessation of interest on the date fixed for redemption. The notice or notices required by this section shall be given by the Fiscal Agent. A certificate by the Fiscal Agent that notice of call and redemption has been given to original purchasers and to holders of registered bonds as herein provided shall be conclusive as against all parties, and no bondholder whose bond or registered bond is called for redemption may object thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that he failed to actually receive such notice of call and redemption. (b) Redemption. Prior to the redemption date there must be set aside in the Retirement Fund moneys for the purpose and sufficient to redeem, at the premiums payable as in this resolution pro- vided, the bonds designated in such notice for redemption. Said moneys must be set aside in said fund solely for that purpose and shall be applied on or after the redemption date to the payment (principal and premium) of the bonds to be redeemed upon presentation and surrender of such bonds and (except as to bonds registered as to both principal and interest) all interest coupons maturing after the redemption date. Any interest coupon due on or prior to the redemption date shall be paid from the Interest Fund upon presentation and surrender thereof. Any interest due on or prior to the redemption date upon bonds registered as to both principal and interest shall be paid from said Interest Fund. Each bond presented (if unregistered or registered as to principal only) must have attached thereto or presented therewith all interest coupons maturing after the redemption date. (c) Effect of the Notice of Redemption;. When notice of redemption has been given, and when the amount necessary for the redemption of the bonds called for redemption (principal and premium) is set aside for that purpose in the Retirement Fund, the bonds designated for redemption shall become 5 due and payable on the date fixed for redemption thereof, and upon presentation and surrender of said bonds and (except as to bonds registered as to both principal and interest) all interest coupons maturing after the redemption date, at the place specified in the notice of redemption, and, if any of said bonds be registered, upon the appropriate assignment thereof in blank, such bonds shall be redeemed and paid at said redemption price out of the Retirement Fund, and no interest will accrue on such bonds called for redemption or on any interest coupon thereof after the redemption date specified in such notice, and the holders of said bonds so called for redemption after such redemption date shall look for the payment of such bonds and the premium thereon only to said Retirement Fund. All bonds redeemed and all interest coupons thereof shall be cancelled forthwith by the Fiscal Agent and shall not be reissued. All interest coupons pertaining to any redeemed bonds, which coupons have matured on or prior to the time fixed for redemption, shall continue to be payable to the respective holders thereof but without interest thereon. All unpaid interest payable at or prior to the date fixed for redemption upon bonds registered in such manner that the interest is payable only to the registered owners shall continue to be payable to the respective registered owners of such bonds, or their order,but without interest thereon. Section 10. Fiscal Agent. The city hereby appoints the Security 1st Nat'I.Bank in the City of Los Angeles, State of California, as the Water Revenue Bond Fiscal Agent for the purpose of paying the principal of and interest on any of the bonds presented for payment in the City of Los Angeles, State of California, and for the purpose of performing all other duties assigned to or imposed upon the Fiscal Agent as in this resolution provided. The Fiscal Agent initially appointed and any successor thereof may be removed by the city and a successor or successors appointed; provided that each such successor shall be a bank or trust company doing business in and having an office in the City of Los Angeles, State of California. Any such Fiscal Agent designated by the city shall continue to be the Fiscal Agent of the city for all of said purposes until the designation of a successor as such Fiscal Agent, and the city agrees that it will maintain a Fiscal Agent in said City of Los Angeles so long as any of said bonds or any parity bonds are outstanding and unpaid. The Fiscal Agent is hereby authorized and directed to withdraw from the funds and in the manner provided herein all sums required for the payment of the principal of and interest on the bonds presented for payment at the places herein provided at maturity, or on call and redemption or on purchase by the Fiscal Agent prior to maturity. The Fiscal Agent is hereby authorized to redeem the bonds and the interest coupons appertaining thereto when duly presented to it for payment at maturity, or on call and redemption or on purchase by the Fiscal Agent prior to maturity, and to cancel all bonds and coupons upon payment thereof and to return the same so cancelled to the.Treasurer. The Fiscal Agent shall keep accurate records of all funds administered by it and of all bonds and coupons paid and discharged by it. The City Council is hereby authorized to compensate the Fiscal Agent for the services rendered pursuant to the provisions of this resolution. The Fiscal Agent shall have no duty or obligation whatsoever to enforce the collection of or to exercise diligence in the enforcement of the collection of funds assigned to it hereunder, or as to the correctness of any amounts received, but its liability shall be limited to the proper accounting for such funds as it shall actually receive. The recitals of fact and all promises, covenants and agreements herein and in the bonds of said authorized issue contained shall be taken as statements, promises, covenants and agreements of the city, and the Fiscal Agent assumes no responsibility for the correctness of the same, and makes no representa- tions as to the validity or sufficiency of this resolution or of the bonds or coupons, and shall incur no responsibility in respect thereof, other than in connection with the duties or obligations herein or in the bonds assigned to or imposed upon the Fiscal Agent. The Fiscal Agent shall be under no responsi- bility or duty with respect to the issuance of the bonds for value. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or default. Any Fiscal Agent appointed hereunder may resign at any time. Upon the merger, consolidation or other reorganization of any Fiscal Agent into another entity so that the identity of the Fiscal Agent is 6 i lost, the City Council shall appoint a new Fiscal Agent, which may be the corporation resulting from such reorganization. Section 11. Revenues and Funds. Under and pursuant to said Revenue Bond Law there are hereby created the following funds which shall be applied pursuant to this resolution and under and pursuant to said Revenue Bond Law: 1. Water Revenue Bond Acquisition and Construction Fund (herein sometimes referred to as "Construction Fund," held by the City); 2. Water Revenue Fund (herein sometimes referred to as "Revenue Fund," held by the, Fiscal Agent); 3. Water Revenue Bond Interest Fund (herein sometimes referred to as "Interest Fund;" held by the Fiscal Agent); 4. Water Revenue Bond Retirement Fund (herein sometimes referred to as "Retirement Fund," held by the Fiscal Agent); 5. Water Revenue Bond Reserve Fund (herein sometimes referred to as "Reserve Fund," held by the Fiscal Agent); 6. Maintenance and Operation Fund (herein sometimes referred to as "M & O Fund," held by the City); 7. Water Revenue Surplus Fund (herein sometimes referred to as "Surplus Fund," held by the City). (a) Disposition of Bond Proceeds. The proceeds of the sale of the bonds shall be placed by the Treasurer as follows: (1) The accrued interest, if any, shall be deposited with the Fiscal Agent to be placed in the Interest Fund. (2) The amount of $175,000 shall be placed in the Reserve Fund. (3) The balance shall be placed in the Construction Fund. The City may deposit money received from any source in the Construction Fund. The money set aside and placed in the Construction Fund shall remain therein until from time to time expended for the purposes for which the bonds were issued. Money in the Construction Fund may be invested in any authorized investments, provided that the maturity or maturities thereof shall not be later than the date or dates on which money must be available to meet scheduled Construction Fund expenditures. If any sum remains in said Construction Fund after the full accomplishment of the purposes for which the bonds were issued, it shall be transferred to and placed in the Reserve Fund to the extent necessary at that time to bring the Reserve Fund up to an amount equal to the maximum annual debt service and, as to any remaining balance to the Water Fund. (b) Revenue Fund. The Treasurer shall,on or before the fifth business day of each calendar month next succeeding the calendar month in which the gross revenues of the enterprise have been collected, commencing in the month of November, 1963,deposit the gross revenues with the Fiscal Agent. Said gross revenues shall be deposited by the Fiscal Agent in the Revenue Fund and shall be held in trust by the Fiscal Agent. The Fiscal Agent shall transfer moneys from the Revenue Fund to the following funds in the following order of priority. (c) Interest,Fund. On or before the tenth business day of each calendar month so long as any of j the bonds are outstanding the Fiscal Agent shall set aside out of the Revenue Fund into the Interest 7 Fund one-sixth (1/e th) of the interest which will become due and payable on the outstanding bonds within the next ensuing six (6) months, except that for the first year after the date of the bonds, commencing in the month of November 1963,the monthly sum transferred for interest shall be one-twelfth (1/12th) of the interest which will become due and payable at the end of the first year less the amount of any accrued interest placed in said fund. Such sums shall be so transferred that the full amount required to pay the interest on said bonds shall be set aside in the Interest Fund at least fifteen (15) days prior to the date the installment of interest becomes due. Any amount required to be set aside, transferred to and placed in the Interest Fund may be prepaid at the direction of the City in whole or in part by being earlier set aside, transferred to and placed in the Interest Fund, and in that event the monthly transfer which has been so prepaid need not be made at the time appointed therefor. In any event at least fifteen (15) days prior to the due date of any installment of interest on such bonds all sums required for the payment thereof must be in the Interest Fund. Money in the Interest Fund may be temporarily invested in any Authorized Investments provided, that the maturity or maturities thereof shall not be later than the date or dates on which money must be available in the Interest Fund. The interest coupons shall recite that they are payable from the Revenue Fund, but said coupons notwithstanding such recital shall be paid from the Interest Fund which is derived from the Revenue Fund. If after all of the bonds and any parity bonds have been redeemed and, cancelled or paid and cancelled there are moneys remaining in the Interest Fund said money shall be transferred to the Revenue Fund; provided, however, that if said moneys are part of the proceeds of refunding bonds said moneys shall be transferred to the fund or account created for the payment of the principal of and interest on such refunding bonds. (d) Retirement Fund. For the payment of the principal amount of the bonds on or before the tenth business day of each calendar month so long as any of such bonds are outstanding the Fiscal Agent shall set aside out of the Revenue Fund into the Retirement Fund, one-twelfth (1/12th) of the principal amount of such bonds which will mature and be payable within the next ensuing twelve (12) months except that said payments of one-twelfth (1/12th) of the principal amount shall not commence until the month of November, 1964. Such sums shall be so transferred that the full amount required to pay as it becomes due any maturity or installment of principal on said bonds shall be set aside in the Retirement Fund at least fifteen (15) days prior to the date the installment of principal becomes due. Any amount required to be set aside, transferred to and placed in the Retirement Fund may be prepaid at the direction of the City in whole or in part by being earlier set aside, transferred to and placed in the Retirement Fund, and in that event the monthly transfer which has been so prepaid need not be made at the time appointed therefor. In any event at least fifteen (15) days prior to the due date of any installment of principal on such bonds all sums required for the payment thereof must be in the Retirement Fund. Money in the Retirement Fund may be temporarily invested in any Authorized Investments, provided that the maturity or maturities thereof shall not be later than the date or dates on which money must be available in the Retirement Fund for call or retirement of bonds. The bonds shall recite that they are payable from the Revenue Fund, but said bonds notwith- standing such recital shall be paid from the Retirement Fund which is derived from the Revenue Fund. 8 For the payment of the term bonds on or before the tenth business day of each calendar month, commencing in the month of November, 1983, there shall be transferred from the Revenue Fund and set aside in the Retirement Fund an amount not less than the minimum amount hereinafter specified. Such transfer shall in no event be less than the amounts (herein sometimes referred to as "minimum term bond payments") which will be sufficient to call and redeem said term bonds (including premiums thereon) in the following respective minimum principal amounts on November 1 in each of the following years, to wit: Minimum Amount Minimum Amount Year Each Year Year Each Year 1984--- ----------_----------------------- $160,000 1989---------------------------------------- $190,000 1985--- ----------------------------------- $160,000 1990---_-------------------- ------------ $200,000 1986---•---......... ----------------------- $170,000 1991---------------------_-- ------------- $210,000 1987---------------- ---------------------_ $180,000 1992--------------------------------------- $220,0()0 1988--------_----- ----------------------- $180,000 1993---------------------------------------- $220,000 The minimum term bond payment to be made on the tenth business day of each calendar month as aforesaid shall be one-twelfth (1/12th) of the amount needed in each year to call and redeem the minimum amount of term bonds according to the above table, it being the intent of this provision that the respective minimum amounts necessary to call and redeem term bonds according to the above table (or to purchase all or any part of such bonds in lieu of call and redemption prior to maturity) shall be transferred to the Retirement Fund prior to the redemption date. In the event that the transfer made for any month is less than the minimum term bond payment for that month because of lack of funds or for' any other reason the deficiency shall be added to and become a part of the minimum term bond payment required for the following month. Except as hereinafter provided, moneys in the Retirement Fund set aside for the minimum term bond payments shall be used solely for the purpose of purchasing and/or calling and redeeming said term bonds prior to maturity. Money in said fund in excess of that which has been set aside for the purpose of redeeming bonds which have been called prior to maturity may be used to purchase from time to time on the open market any of the outstanding bonds subject to such call and redemption (irrespective of the number of such bonds), either at public or private sale or otherwise, but the purchase price (including brokerage or other charges, but excluding accrued interest) shall not exceed the redemp- tion price thereof on the next interest payment date. If on September 15, 1984 or on any September 15th of any year thereafter,the fiscal agent determines that there will be in the Retirement Fund on the next succeeding November 1 an amount at least sufficient, including premiums, to call $5,000 principal amount of term bonds or more, the fiscal agent shall then call and redeem term bonds from minimum term bond payments deposited in the Retirement Fund, together with the amount to be so deposited prior to the next available November 1 redemption date, in the largest amount which can be redeemed with the money to be available at said redemption date. If after all of the bonds and any parity bonds have been redeemed and cancelled or paid and cancelled there are moneys remaining in the Retirement Fund said money shall be transferred to the Revenue Fund; provided, however, that if said moneys are part of the proceeds of refunding bonds.said moneys shall be transferred to the fund or account created for the payment of the principal of and interest on such refunding bonds. (e) Reserve Fund. From the proceeds of the sale of the bonds the amount of $175,000 shall be immediately placed in the Reserve Fund, held in trust by the Fiscal Agent, and shall be invested in any Authorized Investments, provided that the maturity of said investments shall not be later than twelve years from the date thereof. The interest earned 'on such investments shall be credited to said fund until there shall be in said fund an amount equal to the maximum annual debt service and thereafter 9 i there shall be maintained at all times in the Reserve Fund an amount equal to said maximum annual debt service. From the proceeds of the sale of additional bonds or of any parity bonds there shall be immediately placed by the City in the Reserve Fund an amount which, when added to the amount, if any, transferred from Surplus to the Reserve Fund on the same day, will make the Reserve Fund equal to the maximum annual debt service and thereafter there shall be maintained in said Reserve Fund an amount at least equal to said maximum annual debt service. Moneys in the Reserve Fund shall be used solely for the purpose of paying the principal of and interest on the bonds or any parity bonds in the event that the moneys in the Interest Fund or the Retirement Fund are insufficient therefor and for that purpose the Fiscal Agent shall withdraw and transfer moneys from the Reserve Fund to the appropriate fund as the case may be. Whenever moneys are withdrawn from the Reserve Fund for the purposes provided in this section an equal amount of money shall be placed in the Reserve Fund by transfers from the Surplus Fund as provided herein or from the first available moneys in the Revenue Fund. Money in the Reserve Fund may be used to pay the principal and/or interest on the last outstanding maturity of the bonds or any parity bonds. (f) M&O Fund. All moneys remaining in the Revenue Fund or on or before the tenth business day of each month, after setting aside and transferring all the sums required to be set aside and transferred by the preceding paragraphs of this section, shall be transferred by the Fiscal Agent to the Treasurer and the Treasurer shall deposit in the M & O Fund an amount necessary to pay from said M & O Fund the necessary and reasonable maintenance and operation costs of the enterprise, to set aside and maintain in said M&O Fund at least $25,000 as a reserve for replacements and repairs and to set aside and maintain in said M & O Fund at least $10,000 as unencumbered working capital. Money in the M & O Fund set aside as a reserve for replacements and repairs or as unencumbered working capital may be invested in any authorized investments. (g) Surplus Fund. Any money received by the Treasurer from the Fiscal Agent in excess of the amount needed to fill the above stated requirements shall be placed in the Surplus Fund. Moneys in the Surplus Fund shall be used for the restoration, if necessary, of the Reserve Fund to an amount equal to the maximum annual debt service. After the above transfers and uses have been made and all other covenants of the city contained herein have been duly performed moneys in the Surplus Fund may be (i) used for extensions and betterments of the water system; (ii) invested in any securities in which the city may invest funds subject to its control; (iii) transferred to the Retirement Fund to be used for the redemption of any of said bonds which are subject to call and redemption prior to maturity or to the purchase from time to time in the open market of any outstanding bonds whether or not subject to call and redemption (irrespective of the maturity or number of such bonds) at prices and in such manner, either at public or private sale, or otherwise, as the city in its discretion may determine, but such purchase price (including brokerage and other charges, but excluding accrued interest) shall not exceed 104% of the principal amount or the redemption price of the callable bonds on the next interest payment date, or (iv) used for any lawful purpose of the city. (h) Withdrawals. The Fiscal Agent shall not permit any withdrawal to be made by the city of any moneys held by the Fiscal Agent if and when to the knowledge of the Fiscal Agent, the city is in default hereunder. The Treasurer shall not permit the withdrawal of any moneys in the M & O Fund or in the Surplus Fund (except restoration of the Reserve Fund) if and when the city is in default hereunder. (i) Security for Deposits. All moneys whether held by the Treasurer or the Fiscal Agent shall be held in time or demand deposits, and shall be secured at all times by such obligations and to the extent required by law except to the extent that such moneys are invested as hereinbefore provided. 10 I (j) Investments. Obligations purchased.as an investment of money in any funds which are herein authorized to be invested shall be deemed at all times to be a part of such funds and any profit realized from investments shall be credited to such funds and any losses resulting from such investment shall be charged to such funds, and the interest accruing thereunder shall be credited to the Revenue Fund except where expressly provided otherwise. The Treasurer or Fiscal Agent, as the case may be, shall sell at the best price obtainable or present for redemption any obligations so purchased whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer from such funds. For the purpose of determining at any given time the balance in any such funds any such investments constituting a part of such funds shall be valued at the then estimated or appraised market value of such investments. Section 12. Warranty. The city shall preserve and protect the security of the bonds and the rights of the bondholders and warrant and defend their rights against all claims and demands of all persons. Section 13. Covenants. So long as any of the bonds issued hereunder are outstanding and unpaid, or so long as provision for the full payment and discharge thereof at maturity or upon redemption thereof prior to maturity through the setting apart in the Retirement Fund to insure the payment or redemption thereof of money sufficient for that purpose has not been made, the city makes the following covenants with the bondholders under the provisions of the Revenue Bond Law of 1941 (to be performed by the city or its proper officers, agents or employees) which covenants are necessary, convenient and desirable to secure the bonds and tend to make them more marketable; provided however, that said covenants do not require the city to expend any funds other than the revenues received or receivable from the enterprise. Covenant 1. Punctual Payment. The city covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every bond issued hereunder, together with the premium thereon, if any be payable, on the date, at the place and in the manner mentioned in the bonds and coupons and in accordance with this resolution, and that the payments into the Interest Fund, the Retire- ment Fund, and the Reserve Fund will be made, all in strict conformity with the terms of said bonds and of this resolution, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this resolution and all resolutions supplemental thereto and of the bonds issued here- under, and that time of such payment and performance is of the essence of the city's contract with the bondholders. Covenant 2. Discharge Claims. The city covenants that in order to fully preserve and protect the priority and security,of the bonds the city shall pay from the Revenue Fund and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the enterprise which, if unpaid, may become a lien or charge upon the revenues prior or superior to the lien of the bonds and impair the security of the bonds. The city shall also pay from the Revenue Fund all taxes and assess- ments or other governmental charges lawfully levied or assessed upon or in respect of the enterprise or upon any part thereof or upon any of the revenues therefrom. Covenant 3. Commence Acquisition and Construction. As soon as funds are available therefor, the city will commence the accomplishment of the purposes for which the bonds are issued and will continue the same to completion with all practical dispatch and in an economical manner. Covenant 4. Operate Enterprise in Efficient and Economical Manner. The city covenants and agrees to operate the enterprise in an efficient and economical manner and to operate, maintain. and preserve the enterprise in good repair and working order. Covenant 5. Against Sale, Eminent Domain. The city covenants that the enterprise shall not be mortgaged or otherwise encumbered, sold, leased, pledged, any charge placed thereon, or disposed of as a whole or substantially as a whole unless such sale or other disposition be so arranged as to provide for a continuance of payments into the Revenue Fund sufficient in amount to permit payment 11 therefrom of the principal of and interest on and premiums, if any, due upon the call and redemption thereof, of the bonds, payment of which is required to be made out of the revenues of the enterprise, and also to provide for such payments into the funds as are required under the terms of this resolution. The revenues from the enterprise or any other funds pledged or otherwise made available to secure payment of the principal of and interest on the bonds shall not be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed of or used except as authorized by the terms of this reso- lution. The city further covenants that it will not enter any agreement which impairs the operation of the enterprise or any part of it necessary to secure adequate revenues to pay the principal and interest of the bonds or which otherwise would impair the rights of the bondholders with respect to the revenues or the operation of the enterprise. If any substantial part of the enterprise is sold the payment therefor shall either be used for the acquisition and/or construction of improvements and extensions of the enterprise or shall be placed in the appropriate funds and shall be used to pay or call and redeem said bonds and any parity bonds in the manner provided in this resolution and any subsequent resolution. The city covenants that any amounts received as awards as a result of the taking of all or any part of the enterprise by the lawful exercise of eminent domain, if and to the extent that such right can be exercised against such property of the city, shall either be used for the acquisition and/or construction ` of improvements and extension of the enterprise or shall be placed in the appropriate funds and shall be used to pay or call and redeem said bonds and any parity bonds in the manner provided in this resolution and any subsequent resolution. Covenant 6. Insurance. The city covenants that it shall at all times maintain with responsible insurers all such insurance on the enterprise as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to such works or properties. If any useful part of the enterprise shall be damaged or destroyed, such part shall be restored to use. The money collected from insurance against accident to or destruction of the physical enterprise shall be used for repairing or rebuilding the damaged or destroyed enterprise, and to the extent not so applied, shall be applied to the retirement of said outstanding and unredeemed bonds and any parity bonds issued for the enterprise and for such purpose paid into the appropriate funds. The city shall also maintain with responsible insurers workmen's compensation insurance and insurance against public liability and property damage to the extent reasonably necessary to protect the city and the bondholders. Covenant 7. Records and Accounts. The city covenants that it shall keep proper books of record and accounts of the enterprise, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the enterprise. Said books shall at all times be subject to the inspection of the holders of not less than 10% of the outstanding bonds or their repre- sentatives authorized in writing. The city covenants that it will cause the books and accounts of the enterprise to be audited annually by an independent certified public accountant or firm of certified public accountants and will make available for inspection by the bondholders at the office of the Treasurer of said city and at the office of the Fiscal Agent, a copy of the report of such accountant or accountants. The city covenants that it will cause to be published annually, not more than 120 days after the close of each fiscal year a summary statement showing the amount of gross revenues and the amount of all other funds collected which are required to be pledged or otherwise made available as security for payment of principal of and interest on the bonds, the disbursements from such revenues and other funds in reasonable detail, and a general statement of the financial and physical condition of the enter- prise. The city shall furnish a copy of the statement to any bondholder upon request. Covenant 8. No Free Service. The city covenants that, except to the extent that the city is required under agreements and/or contracts existing on the effective date of this resolution, no water or other service from the enterprise may be furnished or rendered to the United States of America, the 12 i State of California, the city, any municipal or public corporation or district or public agency or any private corporation or person free, and that, except to the extent that the city is required under agree- ments and/or contracts existing on the effective date of this resolution, no such service shall be rendered to the United States of America, the State of California, the city, any other municipal or public corpo- ration or district or any private corporation or person at rates lower than those charged other persons for similar service, except that charges to the city for water used for street or sewer flushing and for fire ` hydrants may be made at rates lower than those charged private persons, and all rates for service rendered to the city shall be a reasonable charge for the service rendered. No building or other real property of the enterprise shall be furnished free to the city, but the city shall pay into the Revenue Fund the reasonable rental value of any property so used, and reasonable and proper charges for service rendered or quarters furnished to the enterprise shall be paid to the city from the Revenue Fund. The city covenants that it shall at all times during the period any of the bonds are outstanding maintain and enforce valid regulations for the payment of bills for water service and that such regulations shall at all times during such period provide that the city shall discontinue water service to any user whose water bill has not been paid within the time fixed by said regulations, which shall not be more than two .months from the date the water bill became delinquent. Covenant 9. Rates and Charges. The city shall and hereby covenants that it shall prescribe, revise and collect such charges for the services, facilities and water of the enterprise which, after making allowances for contingencies and error in the estimates, shall be at least sufficient to pay the following amounts in the order set forth: (a) The interest on and principal payments or minimum term bond payments of the bonds as they become due and payable; (b) All payments required for compliance with this resolution including payments required to be made into the Reserve Fund; (c) All payments required to meet any other obligations of the city which are charges, liens, encumbrances upon or payable from the revenues of the enterprise; (d) All current expenses for the necessary and reasonable maintenance and operation costs of the enterprise and the charges shall be so fixed that the net revenues shall be at least 1.25 times the amounts payable under (a). Covenant 10, No Priority for Additional Bonds. The city covenants that no additional bonds shall be issued pursuant to said Revenue Bond Law or any other law of the State of California having any priority in payment of principal or interest out of the revenues of the enterprise over the bonds hereby authorized,to be issued and payable out of said revenues. Covenant 11. Limits on Additional Debt. The city covenants that, except for bonds issued to refund said bonds, no additional indebtedness evidenced by revenue bonds, revenue notes or any other evidences of indebtedness payable out of the Revenue Fund and ranking on a parity with these bonds shall be created or incurred unless: First: That the city is not then in default and that the principal of and interest on the bonds have been paid; and that all required payments into the Retirement Fund and the Reserve Fund have been made, and Second: That the last maturity date of any parity bonds shall not be earlier than the last maturity date of any bonds then outstanding and that any parity bonds of this same issue shall mature on November 1, and Third: The net revenues of the enterprise, calculated on sound accounting principles, as j shown by the books of the city for the latest fiscal year or the last completed 12 month period 13 ended 60 days prior to the adoption of the resolution of issuance for such additional indebtedness as shown by an audit certificate or opinion of an independent certified public accountant or firm of certified public accountants employed by the city, plus, at the option of the city, any or all of the items hereinafter in this Covenant 11 designated (a) and (b), shall have amounted to at least 1.25 times the maximum annual debt service in any fiscal year thereafter on all indebtedness to be outstanding immediately subsequent to the incurring of such additional indebtedness. For the purposes of this Covenant 11, and net revenues of the enterprise shall not include any sum transferred from the Construction Fund under the provisions of Section 11(a) hereof. The items any or all of which may be added to such net revenues for the purpose of applying the restriction contained in this Covenant 11 are the following: (a) An allowance for net revenues from any additions to or improvements or extensions of the enterprise to be made with the proceeds of such additional indebtedness, and also for net revenues from and such additions, improvements or extensions which have been made from moneys from any source but which,'during all or any part of such fiscal year or last completed 12 month period, were not in service, all in an amount equal to 75% of the estimated additional average annual net revenues to be derived from such additions, improvements and extensions for the first 36 month period in which each addition, improvement or extension is respectively to be in operation, all as shown by the certificate or opinion of a qualified independent engineer employed by the city. (b) An allowance for earnings arising from any increase in the charges made for service from the enterprise which has become effective prior to the incurring of such additional indebtedness but which, during all or any part of such fiscal year or last completed 12 month period, was not in effect, in an amount equal to 75% of the amount by which the net revenues would have been increased if such increase in charges had been in effect during the whole of such fiscal year or last completed 12 month period, as shown by the certificate or opinion of a qualified independent engineer employed by the city. Section 14. host, Stolen, Destroyed or Mutilated Bonds. In the event that any bond or any interest coupon pertaining thereto is lost, stolen, destroyed or mutilated, the city will cause to be issued a new bond or coupon similar to the original to replace the same in such manner and upon such reasonable terms and conditions, including the payment of costs and the posting of a surety bond if the city deems such surety bond necessary, as may from time to time be determined and prescribed by resolution. The city may authorize such new bond or coupon or coupons to be signed and authenticated in such manner as it determines in said resolution. Section 15. Cancellation of Bonds. All bonds and coupons surrendered to the Fiscal Agent or any paying agent of the city for payment upon maturity or for redemption shall upon payment therefor be cancelled immediately. Any bonds purchased by the city as authorized herein together with all unpaid coupons pertaining thereto shall be cancelled forthwith and shall not be reissued. All of the cancelled bonds and interest coupons shall be transferred to and shall remain in the custody of the Fiscal Agent until returned to the Treasurer. Section 16. Consent of Bondholders. The consents of bondholders provided for in this section shall relate solely to the amendment, waiver or modification of the covenants specified in Section 13 hereof and shall not be effective to waive or modify any other provisions of this resolution or any other proceeding for the issuance of said bonds. Any act relating to the amendment, waiver or modification of any of the said covenants consented to by bondholders holding sixty-six (66%) in aggregate principal amount of the outstanding bonds, exclusive of bonds, if any owned by the city, shall be binding upon the holders of all of the bonds and interest coupons, whether such coupons be attached to bonds or detached therefrom, and shall not be deemed an infringement of any of the provisions of this resolution, whatever the character of such act may be, and may be done and performed as fully and freely as if expressly permitted by the terms of this resolution, and after such consent relating to such specified- l4 matters has been given, no bondholder or holder of any interest coupon, whether attached to a bond or detached therefrom, shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the city or any officer thereof from taking any action pursuant thereto. Bondholders may consent by affirmative vote at a bondholders' meeting or may consent in writing without a meeting, all as hereinafter provided. No such amendment, waiver or modification shall be made which will permit (a) a change in the maturity or term of redemption of the principal of any bond or any installment of interest thereon; (b) a reduction in the principal amount of or redemption price or redemption premium or rate of interest upon any bond without the consent of the holder of such bond; or (c) a reduction of the percentage of, the principal amount of bonds the vote or consent of which is required to effect any such amendment. (a) Calling Bondholders' Meeting. If the city shall desire to obtain any such consent it may call a meeting of bondholders, by resolution, for the purpose of considering the action, the consent to which is desired. (b) Notice of Meeting. Notice specifying the purpose, place, date and hour of such meeting shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New York, not less than sixty (60) days and not more than ninety (90) days prior to the date fixed for the meeting. .Such notice shall set forth the nature of the proposed action,, consent to which is desired. If any of the bonds shall be so registered as to be payable otherwise than to bearer, the City Clerk shall, on or before the first publication of such notice, mail a similar notice, postage prepaid, to the respective registered owners thereof at their addresses appearing on the bond registry books. The place, date and hour of holding such meeting and the date or dates of publishing and mailing such notice shall be determined by the city, in its discretion. The actual receipt by any bondholder of notice of any such meeting shall not be a condition precedent to the holding of such,meeting, and failure to receive such notice shall not affect the validity of the proceedings thereat. A certificate by the City Clerk, approved by resolution of the City Council that the meeting has been called and that notice thereof has been given as herein provided shall be conclusive as against all parties and it shall not be open to any bondholder to show that he failed to receive notice of such meeting. (c) Voting Qualifications. Any bondholder may, prior to any such meeting, deliver his bond or bonds to any agency designated by the City for the purpose, and shall thereupon be entitled to receive an appropriate receipt for the bond or bonds so deposited, calling for the redelivery of such bond or bonds at any time after the meeting. The Treasurer shall prepare and deliver to the chairman of the meeting a list of the names and addresses of the registered owners of bonds, with a statement of the maturities and serial numbers of the bonds held and deposited by each of such bondholders, and no bondholder shall be entitled to vote at such meeting unless his name appears upon such list or unless he shall present his bond or bonds at the meeting or a certificate of deposit thereof, satisfactory to the city, executed by a bank or trust company. No bondholders shall be permitted to vote with respect to a larger aggregate principal amount of bonds than is set against his name on.such list, unless he shall produce the bonds upon which he desires to vote, or a certifi- cate of deposit thereof as above provided. (d) Issuer-owned Bonds. The city covenants that it will present at the meeting a certificate, signed and verified by one member of the City Council and by the Treasurer stating the maturities and serial numbers of all bonds owned by, or held for account of, the city, directly or indirectly. No person shall be permitted at the meeting to vote or consent with respect to any bond appearing upon such certificate, or any bond which it shall be established at or prior to the meeting is owned by the city, directly or indirectly, and no such bond (in this resolution referred to as "issuer-owned bond") shall be counted in determining whether a quorum is present at the meeting. 15 � I (e) Quorum and Procedure. A representation of at least sixty-six per cent (66%) in aggre- gate principal amount of the bonds then outstanding (exclusive of issuer-owned bonds) shall be necessary to constitute a quorum at any meeting of bondholders, but less than a quorum may adjourn the meeting from time to time, and the meeting may be held as so adjourned without further notice, whether such adjournment shall have been had by a quorum or by less than a quorum. The city shall, by an instrument in writing, appoint a temporary chairman of the meeting, and the meet- ing shall be organized by the election of a permanent chairman and a secretary. At any meeting each bondholder shall be entitled to one vote for every $1,000 principal amount of bonds with respect to which he shall be entitled to vote as aforesaid, and such vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The city, by its duly author- ized representative, may attend any meeting of the bondholders, but shall not be required to do so. (f) Vote Required. At any such meeting held as aforesaid there shall be submitted for the consideration and action of the bondholders a statement of proposed action, consent to which is desired, and if such action shall be consented to and approved by bondholders holding at least sixty-six per cent (66%) in aggregate amount of the bonds then outstanding (exclusive of issuer- owned bonds) the chairman and secretary of the meeting shall so certify in writing to the city, and such certificate shall constitute complete evidence of consent of bondholders under the provisions of this resolution. A certificate signed and verified by the chairman and the secretary of any such meeting shall be conclusive evidence and the only competent evidence of matters stated in such certificate relating to proceedings taken at such meeting. (g) Written Consent of Bondholders. If the city shall desire to obtain any such consent in writing, without a meeting of bondholders, the City Council thereof may, by resolution, propose the action,to which consent is desired. A copy of such resolution, together with a request to bondholders for their consent to the action proposed therein, shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New York. If any of the bonds shall be so registered as to be payable otherwise than to bearer, the City Clerk shall, on or before the publication of such resolution and request, mail a copy thereof to each registered owner at the address appearing on the bond registry books. The actual receipt by any bondholder of such resolution and request shall not affect the validity of the proceedings for the obtaining of such consent. A certificate by the City Clerk, approved by resolution of the City Council of said city, that said resolution and request has been published and mailed as herein provided shall be conclusive as against all parties, and it shall not be open to any bondholder to show that he failed to receive such resolution and consent. Each written consent shall be accompanied by proof of ownership of the bonds for which such consent is given. Proof of ownership shall be made in such manner as shall be prescribed by the resolution proposing the action. Any such written consent shall be binding upon the holder of the bonds giving such consent and on any subsequent holder (whether or not such subsequent holder has notice thereof) unless such consent is revoked in writing by the holder giving such consent or by the subsequent holder. To be effective, any revocation of consent must be filed before the adoption of the resolution accepting consents as hereinafter provided. After the holders of at least sixty-six per cent (66%) in aggregate principal amount of the bonds then outstanding (exclusive of issuer-owned bonds) shall have consented in writing, the City Council shall adopt a resolution accepting such consents and such resolution shall constitute complete evidence of the consent of bondholders under this resolution. (h) Publication of Consent. Notice specifying the amendment, waiver or modification that has received the consent of bondholders as required by this section shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New. York, not less than sixty (60) days following the final action in the proceedings for the obtaining 16 of such consent. Said notice is only for the information of bondholders and failure to publish such notice or any defect therein shall affect the validity of the proceedings theretofore taken in the obtaining of such consent. Section 17. Bond and Coupon Forms. Said bonds shall be payable to bearer, shall be issued in negotiable form, and shall be negotiable, and the form of said bonds and interest coupons thereof shall be substantially as follows: UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF HUNTINGTON BEACH 1963 WATER REVENUE BOND, SERIES A No- -------------- ----- $1,000 THE CITY OF HUNTINGTON'BEACH, a public corporation situated in the County of Orange, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from the Revenue Fund,' as hereinafter provided, to the bearer, on November 1,.........upon presentation and surrender of this bond, the sum of ONE THOUSAND DOLLARS,with interest thereon at the rate of--------% per annum, payable annually for the first year and semiannually thereafter on the first days of May and November of each and every year from the date hereof until this bond is paid, upon presentation and surrender .of the respective interest coupons hereto attached; provided, however, that if at the maturity date of this bond or, if the same is redeemable and shall be duly called for redemption,then at the date fixed for redemption, funds are available for the payment or redemption thereof, as provided in the resolution hereinafter mentioned, this bond shall then cease to bear interest. Both principal and inres are payable in lawful money of the United States of America at the-Se-uritY---12t-.N.a-V A 1,mLos Angeles, California, Fiscal Agent for the city, or, at the option of the holder, at any paying agent of the city in Chicago, Illinois, or in New York, New York. This is one of a duly authorized issue of bonds of the city designated "1963 Water Revenue Bonds Series A," hereinafter called "the bonds", all of which have been issued pursuant to the Charter of said city and the Revenue Bond Law of 1941 (being Chapter 6, Part 1, Division 2, Title 5 of the Government Code of the State of California) for the purpose of the acquisition, construction and financing of a water system for said city and the creation of said issue and the terms and conditions of the bonds are provided for by the resolution of the City Council of said city authorizing the bonds adopted --------------------- 19......... designated Resolution No------------------ and this reference incorporates said resolution, said Charter and said Chapter 6 herein, and by acceptance hereof the holder of this bond and the coupons hereto attached assents to said terms and conditions. Said resolution is adopted under, and this bond and the interest coupons hereto attached are issued under and are to be construed in accordance with the Charter of said city and the laws of the State of California. This bond and the interest hereon and any premium upon the redemption hereof are not a debt of the city of Huntington Beach, nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts, or revenues except the gross revenues of the enterprise (as defined in said resolution) pledged to its payment, and the principal of and the interest on this bond and any premium upon the redemption hereof are payable solely from the gross revenues of the enterprise pledged to its payment and said city is not obligated to pay such principal, interest and premium except from said gross revenues. The Revenue Fund is established under and pursuant to the Revenue Bond Law of 1941, and under the provisions of said resolution authorizing the issuance of this bond the gross revenues received from the enterprise are required to be deposited to the credit of said Revenue Fund and used only for the purposes authorized by said resolution, including the payment of principal and interest of the issue of bonds of which this is one. 17 By the terms of said Revenue Bond Law and by covenant expressed in said resolution, the city is obligated to prescribe, revise and collect charges for the services, facilities and water of the water system of the city such as to provide revenues sufficient to pay the interest on and principal of the bonds as they become due and payable in addition to all other payments required for compliance with said resolution and the necessary and reasonable maintenance and operation costs of the water system, is prohibited from issuing bonds having any priority with respect to payment from the gross revenues of the enterprise, and is subject to conditions with respect to any sale of said water system. In the manner provided in the resolution, any or all of the obligations referred to in this paragraph and certain other obligations mentioned in said resolution may be waived with the consent of the holders of 66% in aggregate principal amount of the outstanding bonds, exclusive of issuer-owned bonds. This bond is callable and redeemable prior to maturity in accordance with the provisions for redemption endorsed hereon. This bond and the coupons hereto attached are negotiable instruments and shall be negotiable by delivery. This bond may be registered as to principal only or as to both principal and interest, in accord- ance with the provisions for registration endorsed hereon. It is hereby certified and recited that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the incurring of the indebtedness evidenced by this bond and in the issuance of this bond exist, have happened,and have been performed in due time, form and manner as required by the Constitution and laws of the State of California and the charter of said city, and that this bond, together with all other indebtedness of the city pertaining to the aforesaid water system, is within every debt and other limit prescribed by the Constitution and laws of the State of California. IN WITNESS WHEREOF, said City of Huntington Beach has caused this bond to be signed by the Mayor and the Treasurer of said city by their facsimile signatures, countersigned by the City Clerk of said city, and sealed with the corporate seal of said city, and the interest coupons hereto attached to be signed' by the Treasurer by his facsimile signature, and has caused this bond to be dated the first day of November, 1963. COUNTERSIGNED: Mayor of the City of Huntington Beach, California City Clerk of the City of Treasurer of the City of Huntington Beach, California Huntington Beach, California (SEAL) 18 (COUPON FORM) On the first day of ------------ 19______ the CITY OF HUNTINGTON BEACH, CounW of Orange, California will pay to the bearer, at the _S e cur i ty___1st_NAAh 3Los ngeles, California, Fiscal Agent Coupon No. for the city, or, at the option of the holder, at any paying agent of the city -------- in Chicago, Illinois, or in New York, New York, out of the Revenue Fund of said city and not out of any other fund or moneys of the city, the sum of $__________________ in lawful money of the United States of America, being the interest then due on 1963 WATER REVENUE BOND, SERIES A, No. ____________________ Dated November 1, 1963, subject to the provisions on the reverse hereof. Treasurer of the City of Huntington Beach, California On the reverse side of the coupon there shall be printed substantially the following: (REVERSE OF COUPON) If the bond to which this coupon is attached is redeemable and is duly called for redemption on a date prior to the maturity date of this coupon, this coupon will be void. PROVISIONS FOR REDEMPTION Unless this bond matures on or prior to November 1, 1983, it is redeemable in the manner and subject to the terms and provisions, and with the effect, set forth in the resolution referred to on the face of this bond, at the option of the city, on November 1, 1973, or on any interest payment date thereafter prior to maturity, upon at least 30 days'prior notice published in a newspaper circulated in the County of Orange, California, and in a financial newspaper or journal of national circulation published in the City of New York, New York, at a redemption price equal to the principal amount thereof plus the following premiums (percentage of par value) if redeemed at the following times: REDEMPTION DATES AND PREMIUMS On or After And Prior to On or After And Prior to November 1 November 1 Premium November 1 November 1 Premium 1973 1974 4% 1982 1983 13/4% 1974 1975 33/4 1983 1984 11/z 1975 1976 3V2 1984 1985 1V4 1976 1977 31/4 1985 1986 1 1977 1978 3 1986 1987 3/4 1978 1979 23/4 1987 1988 1/2 1979 1980 21/a 1988 1989 1/4 1980 1981 21/4 1989 Maturity —0- 1981 1982 2 PROVISIONS FOR REGISTRATION This bond may be registered in the name of any person as the registered owner hereof, either as to principal only or as to both principal and interest, and, if registered in either of said forms may be changed to registration in the other of said forms or discharged from registration. I 19 Each registration, transfer after registration, change of form of registration, or discharge from regis- tration of this bond shall be entered by the Fiscal Agent in books kept by it for the purpose and noted by it in the registration blank below. Registration as to principal only shall not affect the negotiability by delivery of the coupons pertaining hereto. Upon registration as to both principal and interest, all unmatured coupons pertaining hereto shall be surrendered to the Fiscal Agent and shall be preserved. So long as this bond is registered no transfer hereof shall be valid for any purpose unless made by the registered owner and entered and noted as herein provided, and the principal hereof and any redemption premium shall be payable only to the registered owner, or to his order. Interest on this bond, if registered as to both principal and interest, shall be payable to the person whose name appears upon the registry books as the registered owner hereof at the close of business on the tenth day preceding the interest payment date, or to his order. If this bond is registered as to both principal and interest and its registration is changed to registration as to principal only, or if it is discharged from registration, there shall be attached hereto coupons representing interest hereon to become due thereafter to the date of maturity hereof. In lieu thereof, and upon surrender and cancellation thereof, the Fiscal Agent at the direction of the Treasurer of the city may issue in exchange therefor a new bond, with such coupons attached, identical with this bond, except for the previous notations on the registration blank hereon, and except that the signatures on the new bond shall be those of the persons holding the offices at the time of affixing such signatures. The issuance of any such new bond or new coupons shall be at the expense of the- registered owner. Each discharge hereof from registration shall be effected by an entry on the registry books, and a notation in the blank below, that this bond is payable to bearer, whereupon this bond shall become an unregistered bearer instrument, negotiable by delivery as if it had never been registered. Each request for registration, transfer, change or discharge must be in form satisfactory to the Treasurer and must be made in writing, signed by the registered owner, or by his agent duly authorized in writing, or by the bearer, as the case may be. Date of In Whose Name Manner of Signature of Registration Registered Registration Fiscal Agent •.............. .._--------------- ---- -------------• ---------- .................... --------- ------.......... ......------...... •----------------------------------- ................................ .................................... --- ......................... -------------- ------------------ ------------ ----------------------- ................................... ------------------- -------------- --------------------------------- ....................... ............. ........................ .......... Section 18. Proceedings Constitute Contract. The provisions of this resolution and of the resolu- tions providing for the sale of the bonds and awarding the bonds and fixing the interest rate or rates thereon shall constitute a contract between the city and the bondholders and the provisions thereof shall be enforceable by any bondholder for the equal benefit and protection of all bondholders similarly situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is now or may hereafter be authorized under the laws of the State of California in any court of competent jurisdiction. Said contract is made under and is to be construed in accordance with the Iaws of the State of California. No remedy conferred hereby upon any bondholder is intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by the Revenue Bond Law of 1941 or any other law of the State of California. No waiver of any default or breach of duty or contract by any bond- 20 holder shall affect any subsequent default or breach of duty or contract or shall impair any rights or remedies on said subsequent default or breach. No delay or omission of any bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the bondholders may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and the bondholder shall prevail, said bondholder shall be entitled to receive from the Revenue Fund reimbursement for reasonable costs, expenses, outlays and attorney's fees and should said suit, action or proceeding be abandoned, or be determined adversely to the bondholders then, and in every such case, the city and the bondholders shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. After the issuance and delivery of the bonds this-resolution shall be irrepealable, but shall be subject to modification to the extent and in the manner provided in Section 16 of this resolution, but to no greater extent and in no other manner. Section 19. Future Contracts. Nothing herein contained.shall be deemed to restrict or prohibit the city from making contracts or creating bonded or other indebtedness payable from the general fund of the city or from taxes or any source other than the revenues of the enterprise as defined herein, and from and after the sale of the bonds the general fund of the city shall not include the revenues of the enterprise and no contract or other obligation payable from the general fund of the city shall be payable from the revenues of the enterprise, except as provided in Section 11(g) hereof. Section 20. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this resolution, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this resolution and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this resolution and the bonds issued pursuant hereto shall remain valid and the bondholders shall retain all valid rights and benefits accorded to them under this resolution and the Constitution and laws of the State of California and the Charter of said city. If the provisions relating to the appointment and duties of a Fiscal Agent are held to be unconstitutional, invalid or un- enforceable said duties shall be performed by the officer of the city performing the functions of a treasurer. i 21 Section 21: Effective Date. This resolution shall take effect upon adoption. ADOPTED, SIGNED AND APPROVED this ----3__ day of __Sept-ember_, 1963. Robert M. Lambert Mayor of the City of Huntington Beach, California ATTEST: Paul C. Jones City Clerk of the City of Huntington Beach, California (SEAL) STATE OF CALIFORNIA 1 COUNTY OF ORANGE ss. CITY OF HUNTINGTON BEACH I, PAUL C. JONES, City Clerk of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the City Council of said city and was approved by the Mayor of said city at a____ ------------------------ regular meeting of said City Council held on the ---�------ day of __Sep_tembex'------- 1963, and that it was so adopted as follows: AYES: Councilmen Wells Gisler Stewart Welch, Lambert NOES: Councilmen none ABSENT: Councilmen none Paul C. Jones City Clerk of the City of Huntington Beach, California (SEAL) STATE OF CALIFORNIA 1 COUNTY OF ORANGE ss. CITY OF HUNTINGTON-BEACH j I, PAUL C. JONES, City Clerk of the City of Huntington Beach, California, DO HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. .----1844_ ---------- and that the same has not been amended or repealed. DATED: September 5__, 1963. City ClerE of City of Huntington B ch, California (SEAL), 22 J, r 4 Key, kj m/ 3D J. 66403 Decision No. BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA In the matter of the Application of ) SOUTHERN CALIFORNIA WATER COMPANY ) Application No . 45872 and CITY OF HUNTINGTON BEACH )} (Filed October 15, 1963) for an order authorizing the sale of certain properties of Southern California Water Company, ) O P I N I O N Southern California Water Company (applicant) seeks author- ity to sell its Huntington Beach District properties to the City of Huntington Beach (City) pursuant to the terms of the Agreement of Purchase and Sale, a copy of which is attached to the application as Exhibit !I. The price is $1,225,000 subject to adjustment, if any, as provided in Section 2 of the agreement. City will assume and perform all obligations of applicant under outstanding main extension agreements listed in Exhibit C of the agreement. The book cost of the system to be sold, as shown on applicant's balance sheet, is $1,180,041.44. Properties to be sold by applicant to City lie entirely within the City limits, where applicant serves approximately 2,836 customers . They comprise applicant's Huntington Beach District LL --which—comst-itutes a single °opera:ting unit -segregated from and physically and geographically unconnected with applicant's other ;cater systems . -1- A. 45872 - HT Applicant's water-distribution lines are partially paral- leled by City' s own water system, and applicant alleges that owner- ship, operation and development of its Huntington Beach District system as a part of City's system will eliminate further and increasing wasteful duplication of facilities which would result from continued separate ownerships of the two systems . Applicant further alleges that the sale to City of properties pursuant to the agreement will avoid the expense and delay which would result from proceedings by the City to condemn said properties . According to the Agreement, Exhibit II, City has authorized the issuance of revenue bonds in an amount sufficient to acquire applicant' s properties and facilities , and the parties desire to avoid the expense, delay and other difficulties which could result from condemnation proceedings . A letter, dated October 18, 1963, from the City requests immediate action on the instant application. Exhibit IV shows that applicant' s Huntington Beach District rates for water service and those of City are fairly comparable; Southern California' s minimum monthly charge is $1.65 for usage of 500 cubic feet; City' s minimum charge is $2.25 for 1,000 cubic feet. Southern California's monthly charge for 1,500 cubic feet is $4.25 and City' s, $3.25 . City' s rates are lower than applicant' s for larger usages . -2- A. 45872 - GF The Commission finds that: 1. Public hearing is not necessary. 2. The granting of the application would not be adverse to the public interest. 3. The public interest requires that the effective date of the ensuing order be its date. The Commission concludes that the application should be granted. Applicant is put on notice that, in future rate proceedings, the Commission will appropriately consider any income tax effects resulting from the authorization hereinafter granted. The action taken herein is not to be construed to be a finding of the value of the properties herein authorized to be transferred. O R D E R IT IS ORDERED that: 1. Southern California Water Company is authorized to enter into the Agreement of Purchase and Sale attached to this application as Exhibit II, and to thereby sell its Huntington Beach District water-system properties to the City of Huntington Beach pursuant to the terms of said Agreement. 2. When applicant shall have disposed of its Huntington Beach District properties, and within ten days thereafter, applicant shall notify the Commission in writing thereof. Upon such notification, -3- or A . 45872 - HT/SD Southern California Water Company shall be relieved of all its responsibilities as a public utility within its Huntington Beach District, other than refunds of customers ' deposits for service as set forth in the agreement. The effective date of this order shall be the date hereof. Dated at San Francisw , California, this -4.2,4 day of DECEMBER 1953. WILLIAM M. BENNETT President PETER E. MITCHELL EVJj] .T;TT C. Mc:KE.AGE FREDERICK B. HOLOBOFF Commissioners Commissioner George G. Grover present but not voting. Certified as _a Trde%Copy -- ------------- ----------------- - -- ------------ ASSISTANT" SECI$ETA€ Y. PUdL{C UTILITIES COMMISSIQ.N ---- -- STA-TE. OF CALIFORNIA - ---. --- -4- :. AI :.' 2, . BEYEtt HILL S• s ' ft ft Alk- ' �hhN • grIkl, AR[O mob_ i s L040 . WHIT BIER 441 o% Oi L A As_ ftow s • R E r f}vtA145 • r 14 s I i s F ULLRTN• e5 y APi++H:EihA• ewi 40 15EYLA`lD QNJ474E ' c d l Aim BftG ♦., `' s 01 des P&R Alooft H•U:N T N 'T Q f1SWEAX H01 / s s Aw r�EOTI C PXITAREKOH s: OFFICIAL STATEMENT of the CITY OF HUNTINGTON BEACH r Orange County, California $ 3,750, 000 1963 WATER REVENUE BONDS SERIES A Bids will be received by the City Council of the City of Huntington Beach on or before 7:30 p.m. (Calif. D.S.T.), Wednesday, October 2, 1963, in the Council Chambers of the City Hall, Fifth Street and Orange Avenue, Huntington Beach, California 4 CITY OF HUNTINGTON BEACH Orange County, California CITY COUNCIL ROBERT M. LAMBERT, Mayor ERNEST H. GISLER THOMAS H. WELCH JAKE R. STEWART LYNDON A. WELLS, SR. DOYLE MILLER City Administrator PAUL C. JONES JAMES D. PLUNKETT City Clerk City Attorney BETTY DIEKOFF JAMES R. WHEELER City Treasurer City Engineer SPECIAL SERVICES O'MELVENY &MYERS, Los Angeles Bond Counsel STONE &YOUNGBERG, San Francisco and Los Angeles Financing Consultants SECURITY FIRST NATIONAL BANK, Los Angeles Fiscal Agent BANKERS TRUST COMPANY, NeW York HARRIS TRUST& SAVINGS COMPANY, Chicago Paying Agents The information contained within this Official Statement was prepared under the direction of the City Council of the City of Huntington Beach by Stone & Youngberg, who were employed by the city as financing consultants in connection with the water system improvement project. All of the following summaries of the statutes, ordinances, resolutions, and engineers' reports are made subject to all of the provisions of such documents. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further inf or- mation. The information contained within this Official Statement has been compiled from sources be- lieved to be reliable. The Official Statement contains estimates and matters of opinion, which are not intended as representations of fact. This Official Statement is not to be construed as a contract with the purchasers of the bonds. SEPTEMBER 3, 1963 CONTENTS PAGE PAGE INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 1 Pipeline;Additions . . . . . . . . . . . . . . . . . . . . . . 13 Capital Additions . . . . . . . . . . . . . . . . . . . . . . . 13 THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Revenues and Expenses . . . . . . . . . . . . . . . . . 14 Authority for Issuance Estimated Revenues Expenses, and Terms of Sale 2 Coverage Ratios . . . :. . . . . . . . . . . . . . . . . 15 Description of Bonds . . . . . . . . . . . . . . . . . . . 2 Annual Bond Service . . . . . . . . . . . . . . . . . . . . 17 , Minimum Term Bond Payments . . . . . . . . . . 3 Redemption Provisions . . . . . . . . . . . . . . . . . . 3 FINANCIAL DATA . . . . . . .I. . . . . . . . . . . . . . . . 18 Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Assessed Valuation . . . . . . . . . . . . . . . . . . . . . 18 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Tax Rates, Levies, and Delinquencies . . . . . 18 Tax Exempt Status . . . . . . . . . . . . . . . . . . . . . 4 Receipts, Expenditures and Fund Balances . 20 Purpose of Issue . . . . . . . . . . . . . . . . . . . . . . . 4 Direct and Overlapping Debt . . . . . . . . . . . . 21 Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Disposition of Bond Proceeds. . . . . . . . . . . . . 4 Creation of Special Funds 5 THE CITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 p ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' Municipal Government 23 Maintenance and Operation Fund . . . . . . . . 5 Population and Area . . . . . . . . . . . . . . . . . . . . 23 Establishment of Fees, Rates, Tolls and Indices of Growth 24 Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Residential Development . . . . . . . . . . . . . . . . 24 Deposit and Application of Revenues . .- . . . 6 Major Building Construction and Additional Bonds . . . . . . . . . . . . . . . . . . . . . . . 7 Development 24 Additional Covenants . . . . . . . . . . . . . . . . . . . 7. Proposed Residential-Commercial Development . . . . . . . . . . . . . . . . . . . . . . . . 25 THE ENTERPRISE . . . . . . . . . . . . . . . . . . . . . . 8 Commercial Activity Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Industrial Development in Huntington Management of the Water System . . . . . . . . 8 Beach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 The 1963 Improvement Program 8 Orange County Industry . . . . . . . . . . . . . . . . . 29 Purchase Agreement . . . . . . . . . . . . . . . . . . . . 9 Transportation . . . . . . . . . . . . . . . . . . . . . . . . 29 Description of System to be Acquired . . . . . 9 Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Existing Facilities . . . . . . . . . . . . . . . . . . . . . . 9 Educational Facilities . . . . . . . . . . . . . . . . . . . 31 Water Supply and Production . . , . . . . . . . . . 10 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Water Supply for Orange County . . . . . . . . 11 Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Orange County Water District . . . . . . . . . . . 12 Community Facilities . . . . . . . . . . . . . . . . . . . 33 Water Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Recreation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 TABLES I Table 1. Water Department Revenues and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Table 2. Huntington Beach System Revenues and Expenses. . . . . . . . Table 3. Estimated Revenues, Expenses and Coverage Ratios. . . . . . . . . . . . . . . . . . . . . . . 16 Table 4. Estimated Annual Bond Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Table 5. Summary of Receipts, Expenditures and Fund Balances. . . . . . . . . . . . . . . . . . . . 20 Table 6. Major Manufacturing Firms in Orange County. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 FIGURE Figure 1. Major Orange County Industries and Water Supply. . . . . . . . . . . . . . . . . . . . . . . 22 f INTRODUCTION The City of Huntington Beach is located in northwestern Orange County on the Pacific Ocean. It is 18 miles southeast of Long Beach, a major seaport, and 35 miles southeast of the City of Los Angeles. Since 1960, the City of Huntington Beach has been the leading city of Orange County in terms of population growth. Recently released figures indicate that during the period April 1, 1962 to April 1, 1963, the population of Huntington Beach increased by almost 16,000 persons. This represented a percentage growth five times that of the county of a whole. City of Huntington Beach OrangeVounty Population Increase Population Increase 1950 . . . . . . . . . . . . . . . . . . . 5,237 % 216,224 % 1960 . . . . . . . . . . . . . . . . . . . 11,492 119 703,925 226 -+96 .. . . . . . . . . . . . . . . . . . . 40,285 251 951,091 35 It is generally estimated that the rate of growth of Huntington Beach and throughout Orange County will continue through the 1960's. One key factor in support of prospects for continued de- velopment is the substantial acreage of land available for residential, commercial and industrial use. Within the present city limits of Huntington Beach, a total area of 25 square miles, approximately half the total acreage is still undeveloped. 0 Until recently the city was known principally as a beach resort and oil producing area. How- ever, beginning in 1960, a series of housing developments were started. From January 1, 1960 to January 1, 1963, a total of 9,175 residential units, primarily single-family dwellings, were started. The city planning department estimates that dwellings sufficient to house an additional 35,000 pop- ulation either are under construction or have had final or tentative map approvals. The residential housing boom has been accompanied by impressive commercial and industrial development. The Huntington Beach Company (partially owned by Standard Oil Company of Cali- fornia) has embarked on a ten-to-twenty-year plan for developing 1,300 acres of its shoreline and inland real estate holdings in Huntington Beach into a carefully planned community at an estimated cost of$500,000,000. The Douglas Aircraft Company's multi-million dollar Space Systems Center is under construc- tion on a,,9.e-acre site within the Huntington Beach Industrial Park. The first nine-building com- plex, containing more than 700,000 square feet of floor space and housing 2,500 employees, is expected to be ready for occupancy by the end of 1963. By 1970, the Center will contain a minimum of 17 buildings with approximately 2,000,000 square feet of usable floor space, representing a total investment of $75,000,000. By 1965, it is expected that more than 5,000 engineers, scientists, and other technical personnel will be employed in the construction of the first Saturn deep-space moon rocket. ""06-000 .The proceeds of the$3,750,000 1963 Water Revenue Bonds, Series A, presently being offered will be used to finance construction of pipelines and other improvements to the storage, supply, and distribution facilities of the present city-owned water system (approximately 8,345 services) and to acquire the Huntington Beach Water System of the Southern California Water Company (approxi- mately 2,825 services). The bonds being offered are water revenue bonds issued pursuant to the Rev- enue Bond Law of 1941, and are secured by the gross revenues to be derived from operation of the combined water systems. All gross revenues from the water system are to be deposited with the Se- curity First National Bank, Los Angeles, fiscal agent for the city, for disbursement only as provided in the Resolution of Issuance. Anticipated net revenues from the combined water systems appear to be sufficient to provide more than 1.45 coverage on estimated bond service. 1 THE BONDS Authority for Issuance The $3,750,000 principal amount of City of Huntington Beach 1963 Water Revenue Bonds, Series A, .are to be issued pursuant to Resolution No. 1844 of the City Council of the City of Hunt- ington Beach adopted September 3, 1963. The bonds will be issued under the Revenue Bond Law of 1941 (Chapter 6, Part 1, Division 2, Title 5 of the California Government.Code). The bonds represent the first series of $5,700,000 revenue bonds authorized by the voters of the city at a special election held April 30, 1963. The vote at the election was 1944 in favor and 115 against. No further series of the authorized bonds will be offered for sale prior to October 1, 1964 and then only if required and subject to the earnings test provided in the resolution of issuance. Terms of Sale Bids for the purchase of the bonds will be received by the City Council of the City of Hunt- ington Beach'at 7:30 p.m. (Calif. D.S.T.), Wednesday, October 2, 1963. The bonds will be awarded by the City Council pursuant to the terms of sale set forth. in the notice inviting bids adopted September 3, 1963. Description of Bonds The Series A bonds consist of $3,750,000 aggregate principal amount, numbered Al to A3,750, inclusive, each in the denomination of $1,000 all dated November 1, 1963. Bonds are to mature and become payable in the following amounts on November 1 of the years specified. Maturity Schedule Series A Annual Annual Maturity Principal Maturity Principal Date Amount Date Amount 1965 . . . . . . . . . . . . . $ 10,000 1975 . . . . . . . . . . . $ 110,000 1966 . . . . . . . . . . . . . 20,000 1976 . . . . . . . . . . . 110,000 1967 . . . . . . . . . . . . . 40,000 1977 . . . . . . . . . . . 120,000 1968 . . . . . . . . . . . . . 60,000 1978 . . . . . . . . . . . 120,000 1969 . . . . . . . . . . . . . 80,000 1979 . . . . . . . . . . . 130,000 1970 . . . . . . . . . . . . . 90,000 1980 130,000 1971 . . . . . . . . . . . . . 90,000 1981 . . . . . . . . . . . 140,000 1972 . . . . . . . . . . . . . 100,000 1982 . . . . . . . . . . . 150,000 1973 . . . . . . . . . . . . . 100,000 1983 . . . . . . . . . . . 150,000 1974 . . . . . . . . . . . . . 110,000 1993 . . . .. . . . . . . 1,890,000 The $1,890,000 of bonds maturing in 1993 are term bonds and minimum term bond payments are required to assure payment of these bonds at or before maturity. Interest is payable annually for the first year and semi-annually thereafter on November I and May 1 of each year. Interest and principal are payable at the Security First National Bank, 561 South Spring St., Los Angeles, fiscal agent for the city, or at the option of the holder, at any paying agent of the city in Chicago or New York. 2 Minimum Term Bond Payments In order to provide for payment of the $1,890,000 term bonds maturing November 1, 1993, Resolution No. 1844 provides that beginning in the month of November 1983 revenues will be trans- ferred to the retirement fund in amounts sufficient to call and redeem on November 1 of each year at the then prevailing redemption price the following principal amounts of term bonds: Minimum Term Bond Payments 1984 . . . . . . . . . . . . . $160,000 1989 . . . . . . . . . . . . . $190,000 1985 . . . . . . . . . . . . . 160,000 1990 . . . . . . . . . . . . . 200,000 1986 . . . . . . . . . . . . . 170,000 1991 . . . . . . . . . . . . . 210,000 1987 . . . . . . . . . . . . . 180,000 1992 . . . . . . . . . . . . . 220,000 1988 . . . . . . . . . . . . . 180,000 1993 220,000 The funds so deposited in the retirement fund in November 1983 and thereafter may be used to purchase at public or private sale at any time any outstanding Series A term bonds at prices not to exceed the redemption price on the next interest payment date. Any of these funds not so used must be used to call and redeem by lot Series A term bonds then outstanding. Redemption Provisions Serial bonds maturing on or before November 1, 1983, a total principal amount of $1,860,000 are not subject to call or redemption prior to their stated maturity dates. The $1,890,000 principal amount of term bonds maturing November 1, 1993 are subject to call and redemption at the option of the city as a whole at any time or in part by lot on any interest payment date on and after November 1, 1973 at a redemption price equal to the principal amount and accrued interest to the redemption date plus a premium based on the date of redemption as set forth below. Redemption Dates and Premiums On or And Prior On or And Prior After to After to November 1 November 1 Premium November 1 November 1 Premium 1973 .1974 4 % 1982 1983 13/4 1974 1975 33/4 1983 1984 11/2 1975 1976 .31/2 1984 1985 11/4 1976 1977 31/4 1985 1986 1 1977 1978 3 1986 1987 3/4 1978 1979 23/4 1987 1988 1/2 'v 1979 1980 21/2 1988 1989 1/4 1980 1981 21/4 1989 Maturity 0 1981 1982 2 Registration The bonds will be issued as coupon bonds and will be registrable either as to principal only or as to both principal and interest, at the holder's option, with the privilege of discharge from reg- istration. 3 Legal Opinion All proceedings in connection with these bonds are subject to the approval of O'Melveny&Myers of Los-Angeles, bond counsel for the City of Huntington Beach. The unqualified opinion of O'Mel- veny & Myers approving the validity of the bonds will be supplied free of charge to the original purchasers of the bonds. A copy of the legal opinion, certified by the official in whose office the original is filed, will be printed on each bond without charge to the successful bidder. Tax Exempt Status In the opinion of O'Melveny & Myers, interest on the bonds is exempt from federal income taxes under present federal income tax laws and from State of California personal income taxes under present state income tax laws. Purpose of Issue Proceeds of the Series A bonds are to be used for the construction and financing of water system improvements to the existing municipal water system, consisting of major reservoir, trans- mission, and water supply facilities, and for the acquisition of the Huntington Beach system of the Southern California Water Company. The water systems, the improvements proposed, and the rev- enues and expenses thereof are discussed in detail under the heading "The Enterprise." Security The bonds and the interest thereon are payable from and secured by a first lien on the gross revenues of the Enterprise. Gross revenues include all the income, receipts or revenues derived from the operation of the Enterprise or arising out of the Enterprise or in any way incidental to the Enterprise including interest on investments of reserve funds, provided, however, that moneys de- rived from the levy and collection of taxes by the city shall not constitute revenues of the Enterprise. No recourse shall be had for payment of the bonds to the taxing power of the city. To further secure payment of the bonds and to insure sound fiscal operations of the city, special funds are to be established as discussed on the following page. Disposition of Bond Proceeds The resolution provides that the proceeds received by the city upon sale of bonds is to be applied as follows: 1. Funds held by the fiscal agent: (a) Accrued interest, if any, paid by the purchasers of the bonds is to be deposited in the Water Revenue Bond Interest Fund. (b) The sum of $175,000 is to be deposited in the Water Revenue Bond Reserve Fund. 2. Funds held by the city: (a) The balance of the proceeds of sale is to be deposited in the Water Revenue Bond Acquisition and Construction Fund and used for acquisition, improvement and financing of the Enterprise including incidental expenses attendant thereto. (b) Any balance remaining in the Water Revenue Bond Acquisition and Construction Fund after completion of the acquisition, construction, improving and financing shall be transferred to the Reserve Fund to the extent necessary to make the amount therein equal to the maximum annual debt service and thereafter shall be deemed to be revenues of the Enterprise and depos- ited in the Water Revenue Fund. k ,t fi Creation of Special Funds The resolution provides for the creation of special funds for the administration and control of the funds obtained from sale of bonds and from revenues of the Enterprise. These funds are listed below and grouped according to whether the funds are administered by the fiscal agent or the city. This tabulation also indicates the flow of funds from the Water Revenue Fund, the amount of initial deposit and if investment of moneys held in the funds is possible. Special aspects of these funds are discussed in the following sections of the official statement. 1963 Water Revenue Bond Funds Pursuant to Resolution No. 1844 Priority in Amount of Transfers from Initial Investment Name of Fund Held by Revenue Fund Deposit PermittedQ Water Revenue Fund . . . . . . . . . . . . . . . . . . . . . . Fiscal Agent No Water Revenue Bond Interest Fund . . . . . . . . . Fiscal Agent 1 .O Yes® Water Revenue Bond Retirement Fund . . . . . . Fiscal Agent 2 Yes® Water Revenue Bond Reserve Fund . . . . . . . . . Fiscal Agent 3 $175,000 Yes® Maintenance and Operation Fund . . . . . . . . . . . City 4 Q@ Yes® Water Revenue Surplus Fund . . . . . . . . . . . . . . City 5 O Water Revenue Bond Acquisition and Construction Fund . . . . . . . . . . . . . . . . . . . . . . City Balance@ Yes@ (J) Interest to date of delivery. Q Investment in direct obligations of, negotiable obligations guaranteed by or "Instrumentality" obli- gations of the United States with maturities as specified below@@. "Instrumentality" obligations in- clude certain obligations of federal land banks, Federal Home Loan Bank, Federal National Mortgage Association, and the Central Bank of Cooperatives. O Maturing prior to time at which funds needed. ®Maturing in up to twelve years. O$10,000 to be maintained as unencumbered working capital reserve. @$25,000 to be maintained as 'replacement and repair reserve. O May be used for M & O, improvements, investment, retirement of bonds or any lawful purpose of city. @ Balance of bond proceeds after other deposits. Maintenance and Operation Fund All operation and maintenance costs of the Enterprise are to be paid from this fund. Monthly deposits of a portion of the revenues remaining after bond service and reserve fund requirements are to be made into the fund in sufficient amounts to meet annual budgeted operation and maintenance expenses and to maintain not less than $25,000 as a replacement and repair reserve and at least $10,000 as unencumbered working capital. A replacement and repair reserve of $25,000 is to be maintained in the Maintenance and Opera- tion Fund. This reserve is to be used only to meet emergency and unforeseen necessary repairs or replacements of the water facilities. The reserve may be used at the discretion of the City Council for such needs but must be replenished from the first available funds. Moneys in the replacement and repair and unencumbered working capital reserves may be invested in obligations of the United States or in other federal guaranteed or federal agency obligations. 5 Establishment of Fees, Rates, Tolls and Charges The city covenants and agrees that as long as any bonds are outstanding it will fix and maintain fees, tolls, rates, and other charges for water service which will provide net revenues equal to at least one and twenty-five one-hundredths (1.25) times the interest and principal or minimum term bond payments required to be made in the next twelve months. • Net revenues are defined as gross revenues less maintenance and operation expenses. The latter includes the reasonable and necessary costs of maintaining and operating the Enterprise calculated on sound accounting principles including among other things the cost of administration, overhead, insurance,taxes (if any) and other similar costs,but without allowance for depreciation or obsoles- cence. Deposit and Application of Revenues The gross revenues of the Enterprise are to be deposited by the city treasurer with the fiscal agent for deposit in the Water Revenue Fund on or before the fifth business day of each month. Pay- ments from these funds are to be made by the fiscal agent only as follows: On the tenth business day of each month the fiscal agent is required to transfer money from the Water Revenue Fund to the following funds and in the priority listed below: 1. Bond Interest Fund—Each month an amount is to be transferred to the Bond Interest Fund which, together with additional equal monthly transfers to be made thereafter, will be sufficient, at least fifteen days prior to the respective due dates, to meet the next succeeding installments of inter- est on the bonds. 2. Bond Retirement Fund—Each month an amount is to be transferred to the Bond Retirement Fund which, together with additional equal monthly transfers to be made thereafter, will be sufficient, at least fifteen days prior to the respective due dates, to meet the next succeeding maturities of the bonds. Beginning in November 1983 an amount is to be transferred to the Bond Retirement Fund each year in equal monthly installments sufficient to call and redeem bonds in the stated minimum amounts (see minimum term bond payments) prior to the November I call date of the term bonds. 3. Reserve Fund—The amount, if any, required to maintain the Reserve Fund at the required balance is to be deposited therein from the first available money after requirements I and 2 above have been satisfied. Monies in the fund may be invested. Interest earned on the investment of the Reserve Fund is to be retained in the fund until the amount therein equals the maximum annual debt service, and thereafter such interest is to be a part of the gross revenues of the Enterprise. 4. Maintenance and Operation Fund—After the transfers under 1, 2, and 3 above, monthly sums sufficient for the necessary and reasonable maintenance and operation costs of the Enterprise are to be transferred to this fund. After monthly allocations, as provided in the resolution, this fund shall contain not less than $25,000 as a replacement and repair reserve and an additional $10,000 unencumbered working capital, both of which may be invested by the city. 5. Surplus—All money remaining in the Water Revenue Fund each month after.the require- ments specified above have been made is surplus which is to be transferred to the Surplus Fund. Surplus must be used for replenishment of the Bond Reserve Fund, if necessary, or at the option of the city, such surplus may be used for any of the following purposes: (a) Capital outlay expenditures for improvements and betterments of the Enterprise; (b) Unbudgeted maintenance and operation expenses; (c) Redemption of callable bonds; (d) Purchase of bonds at public or private sale; (e) For investment of any securities in which the city may legally invest funds subject to its control;and (f) For any.lawful purpose of the city. 6 k Additional Bonds A total of $5,700,000 of water revenue bonds was authorized by the voters of the city at the April 1963 election. The city has the authority to issue $1,950,000 of additional bonds without an- other election, and more bonds may be issued above that amount if another election is held and if the earnings tests and other requirements of the resolution are satisfied. The resolution further provides that additional bonds secured by the same revenues may be issued on a parity with the bonds if certain conditions are satisfied, as follows: ' 1. The city must not be in default under terms of the resolution. f 2. Net revenues to be received from the Enterprise must amount to at least 1.25 times the C maximum debt service required in any future year on outstanding bonds and on the additional bonds proposed to be issued. In determining net revenues, the resolution permits allowance to be made for net revenues from additions or extensions of the water system or from increases in water rates. In either case the allowance is to be equal to 75 per cent of the estimated additional annual net revenues, as shown by the estimate of a qualified independent engineer. Additional Covenants In addition to those recited above, the resolution contains additional covenants, including: 1. The city will punctually pay or cause to be paid the principal and interest on every bond issued under the resolution, together with any premium payable, in strict conformity with the terms of the bonds and of the resolution. 2. The city will maintain the Enterprise in good order and operate it efficiently and economi- cally, as provided in the resolution. 3. The city agrees not to sell, mortgage, or otherwise encumber the Enterprise unless provision is made for a continuance of payments into the Water Revenue Fund sufficient to permit payment of interest and principal on all outstanding bonds. The city agrees not to enter into any agreement impairing the operation of the Enterprise or any part necessary to secure adequate revenues to pay the bonds or which otherwise would impair the rights of the bondholders with respect to the revenues or operation of the Enterprise. If any substantial part of the Enterprise is sold, the proceeds of sale may be applied to con- struction or acquisition of new facilities or are to be placed in the Bond Interest and Retirement Funds and used to pay or call outstanding bonds. 4. The city will maintain or otherwise provide for all such insurance on the Enterprise as is customarily maintained on similar facilities. If any useful part of the Enterprise is damaged or destroyed, it is to be restored to use. 5. The city will maintain accurate records and accounts covering the Enterprise and all rev- enues of the Enterprise. These records and accounts will be subject at all times to inspection by holders of not less than 10 per cent of the outstanding bonds. The district will have its accounts and records audited annually by an independent certified public accountant. Copies of the audit will be available for inspection at the city hall, and copies will be sent to the city's fiscal agent. The city will publish annually, not more than 120 days after the close of each fiscal year, a summary statement showing the amount of gross revenues and the amount of all other funds collected which are pledged to the payment of the bonds,the disbursements from such revenues and other funds in reasonable detail, and a general statement of the financial and physical condition of the Enterprise. Copies of this statement will be furnished to any bondholder upon request. 6. The city will not permit free use of the Enterprise by any person, firm, or corporation, in- cluding governmental agencies. 7 THE ENTERPRISE Background The 1963 water revenue bond project of the City of Huntington Beach will provide for an expenditure of $3,750,000 for the construction of improvements to the existing municipal water sys- tem and for the acquisition of the Huntington Beach System of the Southern California Water Company. This is the first part of the $5,700,000 water revenue bond issue approved by the city electorate on April 30, 1963. It is expected that the balance of the bonds will be issued within the next two years. Management of the Water System The municipal water system is operated under the Director of Public Works and City Engineer, James R. Wheeler, who is directly responsible to the City Administrator. Mr. Wheeler has been in his present capacity for five years. Prior to coming to the City of Huntington Beach, he was em- ployed by the Los Angeles County Road Department. He has had ten years of professional civil engineering experience and is a registered civil engineer in the State of California. The municipal water system staff consists of a water superintendent, who reports to the Di- rector of Public Works, an assistant water superintendent, and three field men. It is anticipated that when the Huntington Beach System of the Southern California Water Company is acquired, its operations will be merged with those of the existing municipal system. Approximately three addi- tional field employees will be required at that time to handle the increased workload. The 1963 Improvement Program The proceeds of the 1963 Water Revenue Bonds, Series A, will be used for the following major purposes: 1. Acquisition of the Huntington Beach System of the Southern California Water Company. 2. The city's share of the 6-mile transmission line to be constructed from the San Joaquin Res- ervoir to the Huntington Beach city limits. The city will share the cost of this line, which will be completed in August 1964, with the Costa Mesa County Water District. 3. Final payment for capacity rights to 20 cubic feet per second in the West Orange County Feeder No. 2 transmission line. Construction of the line, which will carry Metropolitan Water Dis- trict water to member agencies of the West Orange County Water Board, including Huntington Beach, is expected to be completed in April 1964. 4. Expansion of existing reservoir capacity to 5,000,000 gallons. 5. Other improvements to the existing system. i The following tabulation shows the estimated project costs, which include construction and land costs, and allowances for engineering and administrative overhead and contingencies. An additional amount of$535,000 is included for improvements to the existing systems including inter-connections with the company system and with the proposed major improvements, for contingencies, and for incidental expenses connected with the bond issue. A bond reserve of $175,000 will also be provided from bond proceeds. 8 I CITY OF HUNTINGTON BEACH 1963/64 Improvement Program Acquisition of water company. . . . . . . . . . . . . . . . . . . . . $1,225,000 Costa Mesa-Huntington Beach Transmission Line. . . . 940,000 West Orange County Feeder No. 2. . . . . . . . . . . . . . . . . 575,000 Reservoir expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000 Improvements, contingencies, incidentals. . . . . . . . . . . . $ 535,000 Bond reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 175,000 Bonds required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,750,000 Purchase Agreement The Southern California Water Company and the City of Huntington Beach have entered into a purchase agreement which provides for the sale to the city of all company properties and facili- ties, franchises, water rights, operative rights, and other assets (except accounts receivable, cash, and certain real property) of its Huntington Beach system at a purchase price of $1,225,000 as of January 1, 1963. The city will assume obligations under existing refund contracts. In addition to the purchase price, the city is to pay the company the actual cost, less depreci- ation of all improvements and additions to the system after January 1, 1963, except that the cost of such additions built pursuant to refund contracts, the liability for which the city is assuming, shall not be added to the purchase price. In no event, however, shall the base purchase price, adjusted as set forth, be less than $1,225,000. Water sales revenues and taxes and other expenses will be prorated as of the date of settlement. The Southern California Water Company will file an application with the State Public Utilities Commission for permission to dispose of its assets in the City of Huntington Beach. It is expected that the Commission will act favorably on this application. Description of System to be Acquired The Huntington Beach system of the Southern California Water Company serves the south- western portion of the city. It has approximately 2,825 customers, primarily residential. However, its largest single customer, the Southern California Edison Steam Plant, alone consumes about two million cubic feet each month, with average monthly water sales of almost $2,000. The facilities to be acquired include approximately 244,000 feet of pipeline of two inch or larger in diameter, three operating wells with a combined capacity of 4,200 gallons per minute, and a utility plant in service valued at $933,000 (after depreciation). Existing Facilities The municipal water system was inaugurated in 1960 with service to the new housing develop- ments in outlying areas of the city that had no previous water service. Since that time the system has grown rapidly and served approximately 8,345 customers as of July 1, 1963. Southern Califor- nia Water Company has served the older\ established sections of the city since 1929. At the end of 1962 it had 2,825 active services. The following table shows the growth of services in the city from July 1, 1959 to July 1, 1963. Almost 4,000 services were added during 1962/63. 9 Active Service Connections Added Year Municipal During (est.July 1) System Company Total Year 1959 . . . . . . . . . . . . . . . . . . . . 2,530 2,530 . . . . 1960 . . . . . . . . . . . . . . . . 258 2,642 2,900 370 1961 . . . . . . . . . . . .. . . . 1,857 2,729 4,586 1,686 1962 . . . . . . . . . . . . . . . . 4,423 2,793 7,216 2,630 1963 8,345 2,825 11,170 3,954 The City Engineer's projected growth for the combined systems over the next five-year period is based on an average annual increase of 3,000 services as follows: Added Fiscal Beg.Year End Year During Average Year (July 1) (June 30) Year for Year 1963/64 . . . . . . . . . . . . . . . 11,170 14,170 3,000 12,670 1964/65 . . . . . . . . . . . . . . . 14,170 17,170 3,000 15,670 1965/66 . . . . . . . . . . . . . . . 17,170 20,170 3,000 18,670 1966/67 . . . . . . . . . . . . . . . 20,170 23,170 3,000 21,670 1967/68 . . . . . . . . . . . . . . . 23,170 26,170 3,000 24,670 Water Supply and Production Water purchased from the Metropolitan Water District will provide an increasing share of the future city water supply. Figure 1 on page 22 shows the present MWD transmission lines supplying the City of Huntington Beach.The city has secured capacity rights in MWD supply lines amounting to 35.25 cubic feet per second or 25,520 acre-feet a year. This will be sufficient to meet the needs of approximately 175,000 persons, and provide more than three times the amount of purchased water estimated by the city engineer to be required by 1967/68. The City of Huntington Beach is part of the Orange County Municipal Water District, which purchases Colorado River water from the Metropolitan Water District and resells it to water distributors within its area. MWD water is now received by the city from a takeout at Newland and Edinger Avenues on the West Orange County Feeder No. 1 extension, which runs to the center of the city. Two more takeouts will be built as part of the improvement project within the next two years. In addition, MWD water from two other sources will be made available as a result of the improvement program. These are the West Orange County Feeder No. 2 and the East Orange County Feeder No. 2 (through the San Joaquin Reservoir and the Costa Mesa-Huntington Beach Transmission Line). The city has secured the following capacity rights to MWD water: 1. West Orange County Feeder No. 1 (existing source)-10.25 cubic feet per second, 2. West Orange County Feeder No. 2-20 cubic feet per second, and 3. East Orange County Feeder No. 2-5 cubic feet per second. To take MWD water from the East Orange County Feeder No. 2 to the Huntington Beach city R limits, capacity rights of 5 cubic feet per second and 400 acre-feet storage have been secured in the San Joaquin Reservoir of the Irvine Ranch Water District and capacity rights of 15 cubic feet . per second in the Costa Mesa County Water District-City of Huntington Beach transmission line. The following tabulation shows water production in the City of Huntington Beach since 1959 and estimated production for fiscal years 1963/64 through 1967/68. Well water has accounted for only a small percentage of city water production. In contrast, the Southern California Water Com- pany's Huntington Beach system produces all its water from wells within the city limits. 10• f Future projections by the city engineer are based on a constant well production together with an increasing usage of MWD water, and an average consumption per person of 125 gallons per day or approximately .14 acre feet a year. i I Production of Water f (Acre-Feet) City Production Company Year Wells MWD Production Wells Total Actual: 1959. . . . . . . . . . . . . . . . . . . . 1,795 1,795 1960 . . . . . . . . . . . . . . . . 171 1,930 2,101 1961 . . . . . . . . . . . . . . . . 1,031 2,220 3,251 1962 88 2,119 2,025 4,232 Estimated: 1.963/64 . . . . . . . . . . . . . 2,450 2,5200 2,000 6,970 1964/65 . . . . . . . . . . . . . 3,680 2,7600 2,000 8,440 ! 1965/66 . . . . . . . . . . . . . 3,680 4,2900 2,000 9,970 1966/67 . . . . . . . . . . . . . 3,680 5,7900 2,000 11,470 1967/68 3,680 7,3500 2,000 13,030 D The city has total capacity rights of 25,520 acre-feet. Water Supply for Orange County Metropolitan Water District—The major portion of the water produced and consumed through- out Orange County is supplied by the Metropolitan Water District of Southern California through its aqueduct from the Colorado River. The Metropolitan Water District was organized in 1928 by an act of the State Legislature for the purpose of providing Southern California with an adequate water supply from the Colorado River. The district was comprised originally of eleven cities and covered 624 square miles in the counties of Los Angeles, Orange, and San Bernardino. It now covers more than 4,000 square miles and extends into three other counties; Riverside, San Diego, and Ventura. Its constituent members include 13 cities, eleven municipal water districts, and a county water authority. The population of the district has increased from 1,600,000 in 1928 to about 8,000,000 in 1963. Assessed valuation during the same period has grown from $2.2 billion to about$15 billion. In population and assessed valuation the Metropolitan Water District now represents approximately one half of the entire State of California. With the expansion of its main aqueduct in 1960 the district now has an annual delivery capacity of 1,212,000 acre-feet. This amounts to more than one billion gallons of water a day which is ex- pected to meet anticipated water demands. in Southern California at least until 1970. The district has negotiated a contract with the State of California for purchase of surplus Northern California water. Delivery of this water is scheduled to begin about 1971, with an ultimate delivery of 1.5 million acre-feet per year. The following summary shows water delivered by Metropolitan Water District to Orange County agencies for the period 1955/56 through 1962/63. � 11 I M ' t Water Deliveries to Orange County by Metropolitan Water District (Acre-Feet) 1955/56 1956/57 1957/58 1958/59 1959/60 1960/61 1961/62 1962/63 Softened Water: Orange County Munic- ipal Water District 4,617.3 6,816.8 8,926.6 12,641.1 15,957.9 19,716.8 18,290.8 18,532.5 City of Santa Ana. . . 5,018.9 5,751.9 5,858.3 7,102.1 7,396.1 8,323.5 8,365.9 9,106.4 City of Anaheim. . . . 4,986.8 4,370.0 5,219.1 4,468.3 4,593.2 5,184.7 8,834.0 8,218.5 ' Coastal Municipal Water District . . . 7,474.6 8,084.9 8,522.6 11,803.3 12,168.0 14,470.8 14,646.0 16,517.0 City of Fullerton. . . . 4,693.5 5,643.7 6,241.4 7,810.0 7,935.2 6,457.4 7,774.8 6,291.7 U.S.Marine Corps, E1 Toro . . . . . . . . . . 1,360.3 1,434.6 1,533.0 1,643.3 1,672.4 1,795.8 1,736.5 1,797.3 Total softened water . . . . . . . . . 28,151.4 32,101.9 36,301.0 45,468.1 49,722.8 55,949.0 59,648.0 60,463.4 Unsoftened water: Orange County Munic-. ipal Water District and others . . . . . . . 20,915.9 98,118.6 84,320.7 88,273.7 165,935.3 192,356.8 194,032.0 264,136.7 Total deliveries to Orange County agencies . . . . 49,067.3 130,220.5 120,621.7 133,741.8 215,658.1 248,305.8 253,680.0 324,600.1 Total MWD deliveries to all areas. . . . . . . . . 405,960.7 543,705.9 539,732.3 601,096.6 734,917.2 935,227.1 925,463.8 1,020,820.3 Orange County per cent of total . . . . . . . . . . . . 12.1% 23.9% 22.3% 22.217o 29.3% 26.6% 27.417, 31.8% Orange County Water District The Orange County Water District was created in 1933 by an act of the State Legislature for the purpose of water conservation and replenishment. The district comprises an area of approxi- mately 300 square miles. Its boundaries include most-of the developed areas of northern and central Orange County which overlie the coastal plain at the lower end of the Santa Ana River watershed. Since 1949, the Orange County Water District has purchased Colorado River water furnished by the Metropolitan Water District through the Orange County Municipal Water District (which includes most of north and central Orange County except the cities of Anaheim, Fullerton, and Santa Ana which are also members of the Metropolitan Water District) for replenishment of the underground water supply. Water is delivered to the Orange County Water District's spreading grounds in the Santa Ana River channel and other areas and then percolated into the underground basin. The district owns approximately 800 acres of land, in addition to another 120 acres of County Flood Control District lands, which are used for water spreading purposes. Approximately 234,000 acre-feet of water were percolated into the basin in 1962/63. More than 1,200,000 acre-feet have been percolated by the district since 1949. Water Rates Present monthly municipal water system rates, in effect since the system was established in 1959, are shown on the following page. Corresponding rates for the Huntington Beach system of 12 Southern California Water Company are about 20 per cent higher, but after acquisition will be G reduced to the level of the municipal system. i MUNICIPAL WATER SYSTEM i General Metered Service Water Rate Schedule Monthly Quantity Rates i First 1,000 cubic feet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.25 Next 1,000 cubic feet, per 100 cubic feet. . . . . . . . . . . . . . . . . .20 Next 1,000 cubic feet, per 100 cubic feet.. . . . . . . . . . . . . . . . .18 Next 2,000 cubic feet, per 100 cubic feet. . . . . . . . . . . . . . . . . .16 j Next 10,000 cubic feet, per 100 cubic feet. . . . . . . . . . . . . . . . .14 ` Next 85,000 cubic feet, per 100 cubic feet. . . . . . . . . . . . . . . . .12 Next 150,000 cubic feet, per 100 cubic feet. . . . . . . . . . . . . . . .11 Over 250,000 cubic feet, per 100 cubic feet. . . . . . . . . .09 I Monthly Minimum Charges 5/sx-3/4 inch meter . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . $ 2.25 I inch meter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.65 11/2 inch meter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.25 I 2 inch meter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05 3 inch meter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05 4 inch meter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.55 6 inch meter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.25 8 inch meter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.25 10 inch meter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.25 12 inch meter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.25 f� - E Pipeline Additions During the period July 1, 1959 to July 1, 1963, the first four years of the municipal water system, approximately 633,000 feet of water mains four inches or larger were installed. Of this amount, approximately 521,895 feet, or 82 per cent of the total, were installed in subdivision tracts. The Huntington Beach system of the Southern California Water Company contained approxi- mately 244,344 feet of pipe on December 31, 1962, of which approximately 191,405 feet were four inches in diameter or larger. Future additions for the combined systems through 1967/68 are estimated at a total of 500,000 linear feet. Most of the new lines will be installed as part of the revenue bond construction pro- gram. Anticipated year by year additions in linear feet are as follows: 1963/64 . . . . . . . . 130,000 1966/67 . . . . . . . . 80,000 1964/65 . . . . . . . . 130,000 1967/68 . . . . . . . . 50,000 1965/66 . . . . . . . . 110,000 Capital Additions Gross capital expenditures for the city water system during the four-year period July 1, 1959 to July 1, 1963 were about$4,000,000. These expenditures were financed primarily by construc- tion of facilities in new subdivisions which were subsequently incorporated into the city system. 13 Revenues and Expenses A summary of the City of Huntington Beach Water Department revenues and expenses since its establishment is shown in Table 1.During 1959/60 the system was being constructed and organized, and water sales were negligible. Revenue received was principally from meter and service installa- tion charges. During the following three years of full-time operation, the system has shown a surplus of operating income over,operating expenses. The water department has shown a cumulative surplus, after capital outlay, of approximately $112,000 during the first four years of operation. TABLE 1 CITY OF HUNTINGTON BEACH Water Department Revenues and Expenses Estimated 1959/60 1960161 1961162 1962/63 REVENUES Operating revenue: Water sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23 $ 39,197 $120,422 $277,642 Service charges and other. . . . . . . . . . . . . . . . . . . . . 51,780 751 37 . . . . Total operating revenue. . . . . . . . . . . . . . . . . . . $51,803 $ 39,948 $120,459 $277,642 Non-operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . $ . . . . $ 70,550 $ 44,246 $503,4420 Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . $51,803 $110,498 $164,705 $781,084 EXPENSES Operating expense: Source of supply. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ . . . . $ 11,283 $ 33,286 $ 53,617 Pumping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298 5,428 Water treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,270 248 1,833 Transmission and distribution. . . . . . . . . . . . . . . . . . . . . 32,867 15,377 63,959 Customer account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,950 12,952 13,260 Administrative and general. . . . . . . . . . . . . . . . . . . . $ 770 7,070 10,397 12,589 Total operating expense. . . . . . . . . . . . . . . . . . . $ 770 $ 58,440 $ 72,558 $150,686 Non-operating expense: Capital outlay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,806 $ 9,703 $ 38,398 $598,6179 Refund of acreage fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,661 44,246 . . . . Total non-operating expense. . . . . . . . . . . . . . . $ 1,806 $ 30,364 $ 82,644 $598,617 Total expense . . . . . .. . . . . . . . . . . . . . . . . . . . . $ 2,576 $ 88,804 $155,202 $749,303 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $49,227 $ 21,694 $ 9,503 $ 31,781 Cumulative surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $49,227 $ 70,921 $ 80,424 $112,205 Q Includes $502,000 transfer from General Fund. Q Includes $502,000 for capacity rights in East Orange County Feeder No.2. 14 I _ i A summary of the Huntington Beach system of the Southern California Water Company op- erating revenues and expenses for the calendar years 1958 through 1962 is shown in Table 2. During that period, the level of revenues, expenses and net operating income remained fairly constant. Under city operation, at reduced rates, gross revenues are expected to be about $160,000. Op- erating expenses under the city are expected to be about$70,000 a year,somewhat less than at present because of contemplated economies in operating the combined systems, according to a study made by the city engineer. Net,operating income of the company system under municipal management after reduction to city rates is expected to be approximately $90,000 each year. Z r TABLE 2 f SOUTHERN CALIFORNIA WATER COMPANY Huntington Beach System Revenues and Expenses i 1958 1959 1960 1961 1962 i I REVENUES Metered water sales. . . . . . . . . . . . . . $143,318 $157,711 $163,845 $182,517 $173,549 Other revenue . . . . . . . . . . . . . . . . . . 6,516 7,556 8,240 8,192 8,481 I Total operating revenue. . . . . . $149,834 $165,267 $172,085 $190,709 $182,030 i i EXPENSES Operating expenses: Source of supply. . . . . . . . . . . . . . . $ . . . . $ . . . . $ 44 $ $ ! Pumping . . . . . . . . . . . . . . . . . . . . . 20,080 20,098 20,623 27,340 23,477 Pump tax . . . . . . . . . . . . . . . . . . . . 5,848 6,744 7,934 11,939 12,526 Water treatment . . . . . . . . . . . . . . 8,601 5,245 6,779 6,886 7,041 { Transmission and distribution. . . 13,483 11,728 11,462 12,770 16,190 Customer accounts . . . . . . . . . . . . 8,283 9,181 10,007 11,357 12,231 i Sales 636 211 800 609 . . . . Administrative and general. . . . . 13,989 13,614 16,101 17,192 14,984 Total operating expenses. . . . . $ 70,920 $ 66,821 $ 73,750 $ 88,093 $ 86,449 Net revenue . . . . . . . . . . . . . . . . . . . . . . $ 78,914 $ 98,446 $ 98,335 $102,616 $ 95,581 j Depreciation . . . . . . . . . . . . . . . . . . . . $ 18,611 $ 19,895 $ 20,070 $ 20,626 $ 21,304 Taxes other than income. . . . . . . . . . 7,961 8,559 10,087 12,255 12,404 Income taxes . . . . . . . . . . . . . . . . . . . 13,894 22,626 20,110 19,863 15,284 Total depreciation and taxes. . $ 40,466 $ 51,080 $ 50,267 $ 52,744 $ 48,992 Net operating income. . . . . . . . . . . . . . $ 38,448 $ 47,366 $ 48,068 $ 49,872 $ 46,589 I Estimated Revenues, Expenses, and Coverage Ratios i Two schedules of estimated revenues and expenses for the combined city and company sys- tems for the five-year period July 1, 1963 to July 1, 1968 are shown in Table 3. Alternate 1 is based on revenue projections for the municipal system made by the city engineer, which assumes i 15 I f a continuing growth of 3,000 services each year, starting from a base of 8,300 services on July 1, 1963, and average annual water sales during this period beginning at $40.00 per service and in- creasing by $1.00 each year to $44.00 in 1967/68. Alternate 2 is based on a more conservative growth projection of 1,000 services each year, also with annual water sales ranging from $40.00 to $44.00 per service. Operating revenues and expenses of the company system are assumed tb remain constant at $160,000 and $70,000 per year, respectively.Under either schedule, anticipated net revenue will be sufficient to provide more than the minimum coverage required under revenue bond financing. Operation and maintenance expenses which range from $22.00 to $24.00 per service reflect the increased cost of water projected in the next few years by the Metropolitan Water District. They t. also include allowances for increased staff and greater use of materials and supplies required by a rapidly developing system. The annual bond service payments shown are taken from the schedule in Table 4, rounded to the nearest $1,000. Based on estimated revenues, expenses and maximum bond service, the net coverage ratios for the Series A bonds under Alternate 1 will range from 1.77 to 2.41 for the first four years, and will average 2.21 during the remainder of the issue. Projected surpluses after all operating ex- penses and bond service have been met during the five-year period total approximately $1,059,000. Under Alternate 2, the net coverage ratios will range from 1.65 to 1.74 during the first four years and will average 1.45 during the life of the issue. Cumulative surpluses during the first five years are estimated at $574,000. Surpluses under either schedule will be sufficient to pay for the lease of storage capacity in the Irvine Reservoir, which will be approximately $100,000 each year during this period. These lease payments can also be made from the proceeds of the revenue bonds or from the general funds of the city. TABLE 3 CITY OF HUNTINGTON BEACH Estimated Revenues, Expenses and Coverage Ratios Net Revenue Gross Annual Gross Operation Before Net Operating Bond Coverage and Bond Coverage Surplus Cumulative Year Revenue Serviced Ratio Maintenance Service RatioQ Revenue Surplus ALTERNATE 1 (Probable) 3,000 Services per Year 1963/64 . . . . . . $ 552,000 $150,000 3.68 $286,000 $266,000 1.77 $116,000 ' $ 116,000 1964/65 . . . . . . 685,000 160,000 4.28 358,000 327,000 2.04 167,000 283,000 1965/66 . . . . . . 824,000 170,000 4.85 433,000 391,000 2.30 221,000 504,000 1966/67 . . . . . 968,000 189,000 5.12 512,000 456,000 2.41 267,000 771,000 1967/68 . . . . . . 1,119,000 238,000® 4.70 593,000 526,000 2.21 288,000 1,059,000 ALTERNATE 2 (Minimum) 1,000 Services per Year • 1963/64 . . . . . . $ 512,000 $150,000 3.41 $264,000 $248,000 1.65 $ 98,000 $ 98,000 1964/65 . . . . . . 562,000 160,000 3.51 291,000 271,000 1.69 111,000 209,000 1965/66 . . . . . . 614,000 170,000 3.61 318,000 296,000 1.74 126,000 335,000 1966/67 . . . . . . 667,000 189,000 3.53 347,000 320,000 1.69 131,000 466,000 1967/68 . . . . . . 723,000 238,000Q 3.04 377,000 346,000 1.45 108,000 574,000 Q From Table 4, rounded to nearest $1,000. Q Ratio of annual net'revenue (gross revenue less operation and maintenance expenses) to bond service. Q Maximum bond service. 16 Annual Bond Service Table 4 presents an estimate of total annual bond service on the 1963 Water Revenue Bonds, Series A. Bond service is composed of interest, principal due, or minimum term bond payments, and is based on an estimated annual bond interest rate of 4 per cent. The average annual bond service after the first five years is approximately $232,000. TABLE 4 CITY OF HUNTINGTON BEACH 1963 WATER REVENUE BONDS, SERIES A Estimated Annual Bond Service, $3,750,000 Principal Amount ' Year Interest Principal Due Premiums on Ending Principal Estimated or Minimum Minimum Term Total Bond Sept.1 Outstanding at 4010 Payments iQ Bond Payments Service SERIAL BONDS: 1964 . . . . . . $3,750,000 $ 150,000 $ . . . . $ . . . . $ 150,000 1965 . . . . . . 3,750,000 150,000 10,000 160,000 1966 . . . . . . 3,740,000 149,600 20,000- . . . . 169,600 1967 . . . . . . 3,720,000 148,800 40,000 . . . . 188,800 1968 . . . . . . 3,680,000 147,200 60,000 . . . . 207,200 1969 . . . . . . 3,620,000 144,800 80,000 224,800 1970 . . . . . . 3,540,000 141,600 90,000 . . . . 231,600 1971 . . . . . . 3,450,000 138,000 90,000 . . . . 228,000 1972 . . . . . . 3,360,000 134,400 100,000 . . . . 234,400 1973 . . . . . . 3,260,000 130,400 106,000 . . . . 230,400 1974 . . . . . . 3,160,000 126,400 110,000 . . . . 236,400 1975 . . . . . . 3,050,000 122,000 110,000 . . . . 232,000 1976 . . . . . . 2,940,000 117,600 110,000 . . . . 227,600 1977 . . . . . . 2,830,000 113,200 120,000 . . . . 233,200 1978 . . . . . . 2,710,000 108,400 120,000 . . . . 228,400 1979 . . . . . . 2,590,000 103,600 130,000 . . . . 233,600 1980 . . . . . . 2,460,000 98,400 130,000 . . . . 228,400 1981 . . . . . . 2,330,000 93,200 140,000 . . . . 233,200 1982 . . . . . . 2,190,000 87,600 150,000 . . . . 237,600 1983 . . . . . . 2,040,000 81,600 150,000 . . . . 231,600 TERM BONDS (Minimum Term Bond Payments) : 1984 . . . . . . 1,890,000 75,600 160,000 2,000 237,600 1985 . . . . . . 1,730,000 69,200 160,000 1,600 230,800 1986 . . . . . . 1,570,000 62,800 170,000 1,275 234,075 1987 . . . . . . 1,400,000 56,000 180,000 1,180 237,180 1988 . . . . . . 1,220,000 48,800 180,000 450 229,250 1989 . . . . . . 1,040,000 41,600 190,000 . . . . 231,600 1990 . . . . . . 850,000 34,000 200,000 . . . . 234,000 1991 . . . . . . 650,000 26,060 210,000 . . . . 236,000 1992 . . . . ... 440,000 17,600 220,000 . . . . 237,600 1993 . . . . . . 220,000 8,800 220,000 . . . . 228,800 $2,927,200 $3,750,000 $6,505 $6,683,705 QQ Minimum term bond payments for$1,890,000 principle amount of term bonds due November 1, 1993. FINANCIAL DATA Assessed Valuation The City of Huntington Beach uses the facilities of Orange County for the assessment and collection of taxes for city purposes. City taxes are assessed and collected at the same times and on the same tax rolls as are county, school, and special district taxes. Taxes are payable in two install- ments on November 1 and February 1 and become delinquent on December 10 and April 10, re- spectively. The State Board of Equalization reports the 1963/64 Orange County valuations to average 23.9 per cent of full value, except for public utility property,which is assessed at 50 per cent. Total assessed valuation in the city for 1963/64 is $126,176,360, an increase of more than $20,000,000 over the previous year. Mineral rights, representing oil producing land, are valued at almost $19,- 000,000 on the 1963/64 secured roll. The following are the 1962/63 and 1963/64 assessed valuations of the City of Huntington Beach as reported by the Orange County Assessor. CITY OF HUNTINGTON BEACH Assessed Valuations 1962/63 1963/64 Secured roll . . . . . . . . . . . . . . . . . . . $ 57,265,020 $ 77,205,030 Unsecured roll . . . . . . : . . . . . . . . . 3,504,720 4,311,650 Utility roll . . . . . . . . . . . . . . . . . . . . 44,607,540 44,659,680 Net Total . . . . . . . . . . . . . . . . . $105,377,280 $126,176,360 Tax Rates, Levies, and Delinquencies The following tabulation presents a summary of the city's assessed valuation, secured tax levy, and delinquencies for the past five years. CITY OF HUNTINGTON BEACH Fiscal Assessed Secured Tax Delinquent Per Cent Year Valuation Levy June 30 Delinquent 1958/59 . . . . . . . . . . . . $ 70,723,320 $ 888,832 $ 9,011 1.01% 1959/60 . . . . . . . . . . . . 76,278,490 976,683 9,086 0.93 1960/61 . . . . . . . . . . . . 75,903,380 974,209 7,980 0.82 1961/62 . . . . . . . . . . . . 96,347,340 1,241,691 13,415 1.08 1962/63 . . . . . . . . . . . . 105,377,280 1,354,893 12,352 0.91 18 Tax rates per $100 assessed valuation on all taxable property for the City of Huntington Beach for all city and county purposes, including schools, for the years 1958/59 through 1962/63 are as follows: 1958/59 1959/60 1960161 1961162 1962/63 I City tax rate . . . . . . . . . . $1.2800 $1.3300 $1.3300 $1.3300 $1.3300 County tax rate . . . . . . . . 4.3173 4.5026 5.0144 5.1973 6.0561 k j Total . . . . . . . . . . . . . . . $5.5973 $5.8326 $6.3444 $6.5273 $7.3861 P i The city tax rate of $1.33 per $100 assessed valuation has not changed since 1959/60. The total tax rate per $100 assessed valuation for the largest tax code area in the City of Huntington C Beach (1962/63 secured assessed valuation $29,621,130) for all city and county purposes for 1962/ 63 (the latest year for which these figures are available) is $7.3861 on all taxable property, $0.5504 on land and improvements and $0.11 on land, excluding mineral rights, and is composed of the fol- lowing tax levies: R f 1962/63 Tax Rate Code Area 4-001 k , 1962/63 City of Huntington Beach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.3300 Orange County . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6848 P Huntington Beach School District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5634 School modification aid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .•. . . .0188 School institution tuition tax . . . . . . . . . . . . . . . . . . .I . . . . . . . . . . . . . . . . . . .0004 Orange County Flood Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3000 t Orange County Harbor District . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1171 Orange County Mosquito Abatement District . . . . . . . . . . . . . . . . . . . . . . . .0093 Metropolitan Water District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2100 Orange County Municipal Water District . . . . . . . . . . . . . . . . . . . . . . . . . . .1523 r. Tax rate on total valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7.3861 jOrange County Sanitation District No. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . .47040 Orange County Water District . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .080000 Orange County Water District Water Reserve . . . . . . . . . . . . . . . . . . . . . . .11000 G w O Applicable to land and improvements. ®Applicable to land and improvements,excluding mineral rights. 33019 -7169 k Receipts, Expenditures and Fund Balances The following table presents a summary of the city's receipts, expenditures and cash fund bal- ances for the fiscal years 1958/59 through 1962/63. The figures from 1958/59 through 1961/62 are based upon the city's annual reports to the State Controller. The figures for 1962/63 have been estimated by the city's auditors. TABLE 5 6, 6� CITY OF HUNTINGTON BEACH Summary of Receipts, Expenditures and Fund Balances Estimated 1958/59 1959/60 1960/61 1961/62 1962/63 Receipts General property tax. . . . . . . . . . . $ 898,668 $1,018,050 $1,019,184 $1,267,592 $1,404,443 Franchises . . . . . . . . . . . . . . . . . . . 20,498 22,670 27,279 41,073 46,993 Sales and use tax. . . . . . . . . . . . . . 104,543 128,761 167,675 178,776 227,205 Licenses and permits. . . . . . . . . . 124,239 172,992 326,877 - 709,278 946,999 Fines and penalties. . . . . . . . . . . . 35,842 51,852 48,207 54,127 72,608 Interest and rental income. . . . . . 291,764 266,123 300,787 140,290 148,870 Subventions and grants. . . . . . . . 88,921 200,692 139,612 244,541 307,789 Charges for services. . . . . . . . . . . 49,457 235,353 462,580 587,935 843,694 Public service enterprise. . . . . . . . . . . . 51,033 110,498 164,705 279,084 Miscellaneous . . . . . . . . . . . . . . . . 35,647 33,925 28,017 56,267 44,853 Total receipts $1,649,579 $2,181,451 $2,630,716 $3,444,584 $4,322,538 Expenditures General government . . . . . . . . . . . $ 366,267 $ 412,593 $ 492,253 $ 545,921 $ 740,761 Public safety 315,194 413,393 480,121 631,944 896,670 Public works . . . . . . . . . . . . . . . . . 409,471 520,910 785,306 924,316 1,327,555 Health . . . . . . . . . . . . . . . . . . . . . . . 2,400 300 . . . . . . . . . . Libraries . . . . . . . . . . . . . . . . . . . . 53,146 57,337 62,148 65,498 128,059 Parks and recreation. . . . . . . . . . 241,355 277,231 314,957 356,487 406,886 Public service enterprise. . . . . . . . . . . . 2,576 88,804 125,693 749,3030, Total expenditures . . . . . . . . . . $1,387,833 $1,684,340 $2,223,589 $2,649,859 $4,249,234 Capital outlay included above. . . . . $ 21,287 $ 224,890 $ 223,697 $ 416,973 $1,292,677 Cash fund balances-June 30 ` General fund . . . . . . . . . . . . . . . . . $ 573,487 714,169 696,335 $1,002,107 $ 875,166 Capital outlay fund. . . . . . . . . . . . 127,358 187,720 236,811 293,580 158,665 Water fund . . . . . . .. . . . . . . . . . . . . . . . 49,226 69,747 118,679 170,735 Other special funds. . . . . . . . . . . . 323,777 481,393 832,831 1,252,828 1,652,791 Total .. . . . . . . . . . . . . . . . . . . . . $1,024,622 $1,432,508 $1,835,724 $2,667,194 \, $2,857,357 QQ Includes $502,000 advance from General Fund. 20 t Direct and Overlapping Debt The City of Huntington Beach has a total of $595,000 in general obligation bonds outstanding. They comprise the balance of a total of $860,000 issued in 1955 for water system development. Bonds are being retired at the rate of $35,000 each year. The last payment is due August 1, 1980. The state- ment of direct and overlapping debt follows. i i CITY OF HUNTINGTON BEACH fDirect and Overlapping Bonded Debt Population (1963 Estimated) . . . . . . . . 40,285 Assessed Valuation (1963/64 County Basis) . . . . . . . . . . . . . . . . . . . . . . . $126,176,360 Estimated Market Value. . . . . . . . . . . . . $430,400,0009 4 Per Cent Debt Applicable Applicable September 2, 1963 Orange County 6.931% $ 443,584 Orange County Flood Control District. . . . . . . . 6.931 2,504,517 Orange County Harbor District. .. . . . . . . . . . . . 6.933 1,525 Metropolitan Water District (General Issues) . 0.731 1,024,460 Metropolitan Water District (1957-59 Issues). . 0.729 347,004 f ' Orange County Sanitation District #3. . . . . . . . 4.966 652,731 Orange County Sanitation District #11. . . . . . . 98.053 1,677,687 Orange County Water Works District #5. . . . . 2.359 6,841 Huntington Beach School District. . . . . . . . . . . . 84.962 819,883 Ocean View School District (Various Issues). . 81.776-83.308 1,026,437 Fountain Valley School District. . . . . . . . . . . . . . 56.541 148,137 Westminster School District (Various Issues). 15.594-14.790 287,855 Seal Beach School District. . . . . . . . . . . . . . . . . . 0.089 338 F Huntington Beach Union High School District. 55.886 5,309,170 I Midway City Sanitary District. . . . . . . . . . . . . . 1.637 18,498 City of Huntington Beach. . . . . . . . . . . . . . . . . . 100. 595,0000 TOTAL DIRECT AND OVERLAPPING BONDED DEBT . . . . . . . . . . . . . . . . . . . . . $14,863,667® Ratio to Ratio to Assessed Estimated Per Valuation Market Value Capita F Assessed Valuation . . . . . . . . . . . . . . . . . . ... $3,132 Direct Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . .47% .14% 15 Total Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.78 3.45 369 Compiled by California Municipal Statistics, Inc. f ®The California State Board of Equalization reports the 1963/64 Orange County valuations to average 23.9 per cent of full value. Public utility property ($44,659,680) is assessed at 50 per cent. i 0 Does not include $3,750,000 1963 Water Revenue Bonds, Series A, to be sold October 2, 1963. 21 i i LTY i I � sPalncs�,�� LA HABAA � � M. LOWER FE R BAEA NOAwAL Index of Numbered Areas With Principal Industries OIEMER FILTRATION PLANT 0 Sull Miller Contracting Com ®Union Oil Company f California Y 9 Pant Pant o ©Anaconda Wire&Cable Company OD Beckman Instruments,Inc. BELLF��ft 6 s n ��\ _ s : State Farm In suronce Companies Hughes A rcraff Company,Ground ` Pr CE� 0 L.M.Cox Manufactur ng Company,Inc. ^° ® 5 stem Gr ERTUN ,T s % 0 Allstate Insurance Campan es Hunt Foods andpIndustries,Inc. g naiLsin r ,;BUENA PA A- ^- ✓' r e a / Q El Toro Marne Corps Air Station Autonet cs,A D v s oa of North ® ® Am lean Aiat on,Inc. D ryentl _ , - QU S.Marine Corps Air Facility s .... T a ru oarkl� �l ' ` "• ,�-^""` (Helicopter Training) LAKEWOOD vaner L...... ,...,.. ...: -- _ Control,, Warner t IH � � E d'nglon F f Company 0 Barg Co ols,Borg W K mberly Clark Corporation porn Laura Scudders • a;N OLIVE < Cannon Electr c Company Moore Bus in—Forms pany Nortron'a Systems Support,Dwision 1� ..�'� s �' Holly Sugar Corporation�.�a. z / ^ W J S U.S.Pol Chemicals Inc. NorthropPlacentia Mut Corporation s..i � \ Ymer c of J.Voit ber f3 d-P 0° Standard Pressed ed Steel ISPSI Western Deice Ferry Dfuas cm,General Metornge as I t �\P 0 5 Corporation 6 0 Collins Radio Company Corporation o a Pa Leor-Siegler Corporation SiA i Z ° n 0 University of California,a,Iry me "s ro Ir c v s on of Ford Motor Rob rlshaw Fu ton Confro s Company ¢ '; Com a ®AeC on D U.Se ElectricallMotors,Inc. / tessmoa Company n _ RANGE - / ®Fa ry ew State Hospital ®Altec Lansing Corporation i-. GARDEN \ 0 Babcock Radio Engineering„Inc Autonet cs,D v'i on of North American r - Cadillac Gage Company 'Av at on,Int. { ♦♦ w1. '' I Hughes Sem conductor D v s on, Buzza Cardozo \ ,. ♦ (3 ..rr. tl�ra iu►� ey \ Hughes Aircraft Company D'sneYland,Inc'. ♦ iw rn rvs sR :, ° 1 J S Interstate Electron cs Corporation 0 U.S.Navy Ammunition and Net Depot Interstate Engince,ing Corporation �V A ANA,. (D Los Alamitos Naval Air Station Jewel Tea Company,Inc. t r,. STI - Kw kset Division,Amer can Hardware rv�P�es y l r _ w , 0 Paul Hardeman,-Inc. �. q 3 "MI Y rr �� � ( � �. Corporation SEAL j a a fi CI _ �I , ' 0 Knott's Berry Form Ling Electronics 5 m le radi s ,l\ v Kroft Foods Company porn BEACN a e 0 Menasha Conta net Corporation *',T #'h �, y Y ♦♦ § t��� \ Fr.ty ®Alpha Beta Food Markets,Inc. Southern CounPes Gas Company Rubber Corporation of California 0 Ch cksan Company eean ,§T �. ,�_. ♦ 0 ., x _ i h ll Rubber Company Prrn,r( 11 ! bear ure Shaffer ` r ve TeIeT � � O4� Shaffer Tool Works tl oar.in BI-.rk. a (Fou m� i Crec'at % SCALE OF MILES .�rj1,$TA E �e ro �� IRNNE O 1 2 3 4 5 y Over 1,000 manufacturing organizations are located HUNBEACN ON T —� / �� �. within a 30-mile radius of the City of Huntington • Beach. More than 53,000 persons are employed by the concerns en Figure 1 - �' 58 idtified the . 9 �� -CTlyNESA''i w� �� on e maP MAJOR ' fr ORANGE COUNTY INDUSTRIES ° q Major MWD water supply lines for the City of Hunt- AND WATER SUPPLY a ® / ington Beach are shown in red. Prepared by NEWPORT SAN JOAQUIN RESERVOIR STONE & YOUNGBERG BEACH Base Map courtesy National Automobile Club, copyright owner BA BOA CORONA / `DEL MAR 1> THE CITY 3 The City of Huntington Beach occupies more than square miles in the northwestern Orange 1 County coastal area. It is 18 miles southeast of the nearest seaport, Long Beach, and 35 miles south- east of the City of Los Angeles, at an elevation of 40 feet. It enjoys a mild climate with an average temperature of 52 degrees in winter and 69 degrees in summer. The city has long been noted as a major oil producing and beach resort area of Southern Cali- fornia. However, beginning in 1959, a series of residential housing developments were started, which show little sign of diminishing. Currently the fastest growing city in Orange County, the city has also attracted the attention of commercial and industrial developers. The heavy influx of new city residents has created a market for a wide variety of services as well as developed a readily available local labor supply. Municipal Government The City of Huntington Beach was incorporated in 1909 and operates under its own charter, which was granted in 1937 and last revised in 1950. The city is governed under a council-adminis- trator form of government. The charter provides for election of the city clerk, city treasurer, city attorney, and police chief. I The City Council is comprised of Five.members elected at large for alternating four-year terms. Several commissions consisting of public-spirited citizens, including the Planning, Park and Recre- ation and Library Commissions, assist the City Council in making policy recommendations in their special fields. The city has a staff oW- ipal ull-time and�ar_t_time e�mp oye aer the over-aii coor- dination of the city administrator. departiA s include pu is wor fs, police, re, ieguard, recreation, planning and building inspection. The water department is operated as part of the public works department. � poliG�-� Jar en -s-a6-5 -p en personne ire-departm-ent � 1 A 8'g flmf—pumpers, nc�;25-0�llon The City Administrator, Doyle Miller, has served in his present capacity since January, 1960. Prior to coming to Huntington Beach, he served as the City Administrator of Fontana, California, for four years. He has had previous city administrative experience in both Utah and Missouri, and is a registered professional engineer in both of those states. He has had a total of(2.0�years ex- perience in municipal administration. d� Population and Area The latest population estimates by the Orange County Population Research Committee-indicate that the City of Huntington Beach experienced the largest numerical increase in population of all Orange County cities from April 1, 1962 to April 1, 1963. During that twelve-month period, the city population increased by almost 16,000, for a 65 per cent increase, while county population as a whole increased twelve per cent. City area has grown rapidly, and is now almost six times greater than the original city area in 1909. Huntington Beach is now the second largest Orange County city in terms of area, ranking just below the City of Anaheim. The following summary illustrates the rapid growth in city area and in city and county population since 1950. Area figures are as of January 1 and population figures as of April 1. City Area City County Year (Sq.Miles) Population Population 1950 . . . . . . . . . ... . . . . . . . . 1 5,237 216,224 1960 . . . . . . . . . . . . . . . . . . 3.41 11,492 703,925 . . . . . . . . . . . . . . . . . . 25.07 -Oft,-2 — 3 75.d53 The rapid rate of growth in Huntington Beach is expected to continue according to all indica- tions. Approximately half of the total city land area is yet undeveloped. The city planning department predicts a land area of 30 square miles by 1970, and has made the following annual population pro- jection to that date: 1964 . . . . . . . . . . . . 59,000 1968 . . . . . . . . . . . . 127;000 j✓-�N/� ����J 1965 . . . . . . . . . . . . 79,000 1969 . . . . . . . . . . . . 138,000 1966 . . . . . . . . . . . . 97,000 1970 . . . . . . . . . . . . 145,000 1967 . . . . . . . . . . . . 113,000 Indices of Growth Further evidence of the rapid residential and commercial development that has occurred in the city over the last five-year period can be seen in the tabulation below. During that time, the value of building permits and the number of new dwellings under construction increased about 20 times, utility connections more than doubled and post office gross receipts and taxable transactions were about twice as great. �7 Indices-of Growth f q 3 1958 1959 1960 1961 1962 A Value of building permits . . . . . . . . . . . . . $ 3,112,000 $12,990,000 $23,725,000 $46,195,181 $66,661,327 .pop Dwelling units started . . . . . . . . . . . . . . . . 201 833 1,759 3,318 4,098 Post office gross receipts . . . . . . . . . . . . . . $ 83,391 $ 93,001 $ 111,283 $ 131,054 $ 175,237 ✓ Taxable transactions . . . . . . . . . . . . . . . . . $10,427,000 $11,660,000 $14,820,000 $16.982,000 $18,909,000 City water meters . . . . . . . . . . . . . . . . . . . . 2,474 2,585 3,470 5,860 9,425 Electric meters0 . . . . . . . . . . . . . . . . . . . . 4,622 4,964 6,158 8,862 12,735 Gas meters . .. . . . . . . . . . . . . . . . . . . . . . . . 2,987 3,589 4,494 6,997 10,269 " �--- (i Service area larger than city. Residential Development Residential development has been the greatest single factor in city growth in recent years. From January 1, 1958 to January 1, 1963, building permits were granted for 10,209 dwelling units involving more than 100 individual tract developments. These were primarily single-family resi- dences. During the first six months of 1963, building permits were issued for an additional 3,043 housing units. In 1963, the City of Huntington Beach ranked behind only the Cities of Los Angeles and San Diego in the volume of building construction among California cities. The city planning department estimates that all the housing tracts now under construction or approved for construc- tion will house an additional 35,000 persons. Major Building Construction and Development Total volume of building permits issued in the five-year period 1958-62 was over $152,000,000. An additional $46,000,000 was issued during the first six months of 1963, indicating a building pace considerably ahead of the preceding year. Major building construction, totaling more than $42,- 000,000,for which building permits were issued since January 1, 1963 is summarized on the following page. Public construction, such as schools, and offsite construction, such as streets and sewers in tract developments, are not included in these totals. Single family residential building costs per unit averaged more than $15,000, not including land and development costs. 24 r- Major Building ��truction ` Since January 1, 1963 Z1,% 1 (Developer or Owner in Parentheses) 163 home residential tract (Gindling) $2,275,480 31 duplexes (Nelson & Reames) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .'t,. 833,559 167 home residential tract (Hunsaker) . . . . . . . . . . . . . . . . . . . . . . . . . .. 2,363,718 99 home residential tract (Werbco) 1,581,327 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 home residential tract (Huntington Harbour) . . . . . . . . . . . . . . . . . . 502,507 49 home residential tract (Luxury Homes) . . . . . . . . . . . . . . . . . . . . . . . . 848,104 62 home residential tract (Luxury Homes) . . . . . . . . . . . . . . . . . .. . . . . . 1,055,561 180 unit apartments (Hycroft Terrace) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,702,800 25 unit apartments (John Curry) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197,000 189 home residential tract (South Shore Homes) 2,141,370 16 home residential tract (Huntington Harbour) . . . . . . . . . . . . . . . . . . 335,202 179 home residential tract (Glen Mar) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,614,016 139 home residential tract (Nova Homes) . . . . . . . . . . . . . . . . . . . . . . . . . 2,145,187 445 unit condominium (Kaufman & Broad) . . . . . . . . . . . . . . . . .. . . . ... 4,557,240 56 unit apartments (S. E. Bell) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 533,790 126 home residential tract (Glen Mar) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,506,548 Tooling tower (Douglas Aircraft) . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 2,400,000 118 home residential tract (South Shore Homes) . . . . . . . . . . . . . . . . . . 1,336,940 82 home residential tract (Williamson Park) . . . . . . . . . . . . . . . . . . . . . . 969,486 125 home residential tract (Doyle & Shields) . . . . . . . . . . . . . . . . . . . . . . 1,996,885 76 home residential tract.(Glen Mar) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,358,316 125 home residential tract (Gindling) . . . . . . . . . . . . . . . . . . . . . .. . . . . . 1,741,520 80 unit apartments (Cord Construction) . . . . . . . . . . . . . . . . . . . . . . . . . . 671,200 40 unit apartments (Cord Construction) . . . . . . . . . . . . . . . . . . . .. . . . . . 340,000 10 unit apartments (B. A. Berks) . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 120,940 Structures testing lab (Douglas•Aircraft) . . . . . . . . . . . . . . . . . . .. . . . . . 1,099,000 Production testing lab (Douglas Aircraft) 394,000 2 - 48 unit motels (Huntington Driftwood) . . . . . . . . . . . . . . . . . . . . . . . . 394,050 28 home residential tract (Newport Contractors) . . . . . . . . . . . .. . . . . . 441,140 ` 71 home residential tract (Williamson Park) . . . . . . . . . . . . . . . . . . . . . . 839433 88 unit apartments (Doumani) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727:750 / Bank and office building (U. S. National Bank) . . . . . . . . . . . . . .. . . . . . 218,280 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$42,242,345 Proposed Residential-Commercial velopment Several multi-million dollar residential and commercial developments for Huntington Beach are - now under way or being planned. Luxury Homes, Inc. of Anaheim, one of the nation's major home builders, recently purchased 200 acres of farmland for a price in excess of $3,000,000. Construction of an 800-home development t .on the property is expected to begin shortly. HUNTINGTON DRIFTWOOD, INC. Huntington Driftwood Corporation is completing the first phase of its multi-million dollar recreation complex at the junction of Pacific Coast Highway and Beach Boulevard (U.S. 101 Alternate and State Highway 39). The first phase of the development includes the 96-room Driftwood Inn, a 166-space deluxe mobile home park featuring direct room service from the adjoining hotel, a nine-hole golf course and a recreation building with pool and other facilities. The second phase, which is expected to be completed by July 1964, will include a restaurant,banquet facilities for 500 persons, and 128 additional hotel rooms. ,25 I p� • r t, • i ^ An aerial view of the City of Huntington Beach looking northeast. The municipal pier extending into the Pacific Ocean is seen in the left foreground. Pacific Air Industries Photo The land belongs to the City of Huntington Beach and is on a 50-year lease to the corporation. Minimum payment to the city is set at $1,000 a month for the first year, rising eventually to $3,600 a month plus a percentage of gross income. Gross income from food and beverages alone has been estimated at $1,500,000 a year. In addition to the lease fees and taxes,this development is expected to bring into the city a substantial amount of additional tourist and vacation business. HUNTINGTON BEACH COMPANY. The Huntington Beach Company, an affiliate of Standard Oil Company of California which owns and leases extensive petroleum producing lands in the Hunting- �2J ton Beach area, has embarked upon a comprehensive program of surface development. The company �l plans to transform 1,300 acres of its shoreline and inland real estate holdings, previously used primarily for sub-surface oil extraction, into a balanced community. To date a motel, restaurant, mobile home park, shopping center and nucleus of a light industrial complex have been built on company oil lease lands where existing oil operations have been carefully submerged or landscaped from view. An estimated half billion dollars will be invested over a ten to fifteen year period. The master plan, prepared by Victor Gruen Associates and Quinton Engineers, Limited, includes the construc- tion of a beachside recreation area northwest of the present Municipal Pier with a restaurant, motel, parking area, concession buildings and a protected salt water lagoon. Also planned are garden and high rise apartments, a variety of single-family residential structures, and an 18-hole golf course. Sites for churches, schools, parks, medical facilities, stores, commercial and light industry are in- cluded in the plan. The company will lease the land to interested developers who will finance and construct the various facilities in general conformity to the master plan. HUNTINGTON HARBOUR. Huntington Harbour is a planned marina development consisting of approximately 880 acres within the northwestern city boundary. Expected to be completed within the next seven years, it will contain about 2,500 homes with waterfront or waterview in an island community complete with single and multiple family dwellings, shopping centers, schools, churches, 26 recreation areas, and clubs. Almost a fourth of the entire area will be devoted to waterways, which will be dredged to ten feet below low tide and range in width from 150 to 400 feet. Approximately $20,000,000 will be invested by the Huntington Harbour Corporation in con struction of the waterways, utilities, sidewalks, roads, drains, and other site development, exclusiv of building construction. Commercial Activity The City of Huntington Beach, in the twelve months ending December 31, 1962, had total taxable transactions of $18,909,000 as reported by the California State Board of Equalization. This represents an 11 per cent increase over the previous year, and an 81 per cent increase in the las five years. Industrial Development in Huntington Beach There are more than 3,200 acres within the City of Huntington Beach zoned for industry. About 55 per cent of this land is vacant and available for development. There are two planned industrial tracts in the city, which together comprise almost 1,200 acres. The Peck Estate's HUNT- INGTON BEACH INDUSTRIAL PARK occupies an 800-acre site in the northwest portion of the city. Located just south of the future San Diego and Garden Grove freeways, it is presently served by the Southern Pacific Railroad. All utilities are available. Parcels vary in size from 11/2 to 60 acres. The Douglas Aircraft Company recently acquired a 245-acre site in the park on which it has begun construction of its Space Systems Center, which is described below. The Freeway Industrial Park constitutes a 380-acre tract south of the future San Diego Freeway and adjacent to the Southern Pacific rail line. Thirty-eight acres of the tract have been subdivided and are fully developed with An aerial view of Huntington Harbour—a 2500 home residential marina development in the northwestern portion of the city. Pacific Air Industries Photo 119 y - a _ „-ter �`�- moo+' .�» � r3^ fi•. r -f - - ... t f f 27" 'i ■ streets, 12-inch water lines, 10-inch sewer lines and other utilities.In addition to the industrial parks, approximately 300 acres now owned by various individuals and firms are ready for development with available water, sewer, power, and access roads. The largest industries in Huntington Beach at present are oil production and electricity. Many oil companies, including Standard Oil Company of California,Signal Oil and Gas Company,and Socal Oil and Refining Company, operate more than 1,600 wells producing 47,000 barrels a day, the second largest producing field in Southern California. -- > �— The Southern California Edison Company, presently the largest employer in the city with 230 employees, operates the Huntington Beach Steam Plant. The generating plant has a capacity of 100,000 kilowatts and is the largest of its kind on the Pacific Coast. It represents an investment of �n more than $110,000,000. It is also the largest single customer of the Southern California Water Company in Huntington Beach, and will become a customer of the city upon acquisition of the company system. DOUGLAs AIRCRAFT COMPANY. The Douglas Aircraft Company's multi-million dollar Space Sys- V-1,"tems Center is under construction on a 245-acre site in the Huntington Beach Industrial Park. The first nine-building complex, containing more than 700,000 square feet of floor space and housing 2500 employees, is expected to be ready for occupancy by the end of 1963. By 1970, the Space Systems Center will contain a minimum of 17 buildings with approximately 2,000,000 square feet of usable floor space, representing a total investment of $75,000,000. Included will be a nuclear re- actor and facilities for space and atomic research. By 1965, it is expected that more than 5,000 engineers, scientists and other technical personnel will be employed at the center, working in con- junction with other companies and the National Aeronautics and Space Administration in the con- struction of the first Saturn deep-space moon rocket. The $110,000,000 Huntington Beach steam generating plant of the Southern California Edison Company. The largest on the Pacific Coast with a capacity of 900,000 kilowatts. /r o v '. > o/ ' s \ #b \ 14, W. c 'TAR r3 � WWI -: -' �z 2 28 .: - 4': OW . The Engineering Building of the Douglas Aircraft Company Space Systems Center, under construction on a 245 acre site in the !!! Huntington Beach Industrial Park. r f ®range County Industry The relationship of Huntington Beach to the major manufacturing firms in Orange County is shown in Figure 1 on page 22. Table 6 on page 30 lists 134 major manufacturing firms in Orange County employing over 100 persons. I Electronics is the largest single industry in Orange County. Of the more than 87,000 employed k in Orange County manufacturing establishments, over 47,000, or better than half, are accounted for by the electronics and electric products industries. The California State Department of Employment estimates that the majority of a 26 per cent increase in manufacturing employment in the county between 1962 and 1963 was due to expanding developments in the electronics field.The Department of Employment estimates that 12,000 employees were added in this field during the 12-month period f ending March 1963. The nine largest electronic firms in Orange County out of a total of 59 firms are as follows: ' Employees Autonetics Division, North American Aviation, Inc., Anaheim . . . . . . . . . . 11,000 Ground Systems Group, Hughes Aircraft Company, Fullerton . . . . . . . . . . . 7,000 Aeronutronic Division, Ford Motor Company, Newport Beach . . . . . . . . . . . 5,000 Beckman Instrument Inc., Fullerton . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 4,000 Nortronics-Systems Support, Northrop Corporation, Anaheim . .. . . . . . . . . 2,700 Hughes Semiconductor Division,Hughes Aircraft Company,Newport Beach 2,100 Autonetics Division, North American Aviation, Inc., Fullerton . . . . . . . . . . 2,000 Collins Radio Company, Newport Beach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875 The Lear-Siegler Corporation, Anaheim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 Transportation The City of Huntington Beach is traversed by the Pacific Coast Highway (U.S. 101 Alternate) and Beach Boulevard (State Highway 39) which provide good access to all north, south, and east- 2.9 ■ TABLE 6 MAJOR MANUFACTURING FIRMS IN ORANGE COUNTY (100 or More Employees) Aircraft and Missile Research and American Electronics, Inc. Hardware (40) Products (15) Astrodata, Inc. Autonetics Division, North American L. nI• Cox Manufacturing Company, Aerojet General Corp. Aviation, Inc. Inc. Astropower•, Inc., a subsidiary of vision of Tubbs Babcock Radio Engineering, Inc. Great Western Cordage Company, Di- Douglas Aircraft Company Beckman Instruments, Inc, Cordage Company John J. Foster Manufacturing Interstate Engineering Corporation Bendix Aviation Corporation, Company Alexander H. Kerr&Company, Inc. NIetatronics Division, Texas Metal & Scintilla Division Kwikset Division, the American N1.inera.ls Corp. Borg-Warner Controls, Borg-Warner Hardware Corporation Pacific Scientific Company Corporation Williams Furnace Company Plasmadyne Corporation Collins Radio Company, Western Shinn Engineering Corporation Division Metal Products (273) Electronic Engineering Corporation Engineered Electronics Company Anaconda Wire & Cable Company Automobiles, Parts,and Accessories Epsco West Anaheim Foundry Company Products (18) Fender Electric Instrument Company Federal-Mogul-Bower Bearings Company Chrysler Motors Corporation Hughes Aircraft Company, Ground F. E. Olds&Son, Inc. Delco Remy Division, General Motors Systems Group Otis Elevator Company Corporation Hughes Aircraft Company, Semicon- Rosan, Inc. Kohlenberger Engineering Corporation ductor Division SPS Western Savage-California Interstate Electronics Corporation Townsend Company, Cherry Rivet Lear-Siegler Corp. Division Construction (49) Ling Electronics W. C. Froelich, Inc. Nortronics Division, Northrop Paper Products (20) Paul Hardeman, Inc. Corporation Buzzes-Cardozo Sully-Miller Contracting,Company Robe r•tshaw-Fulton Controls Company Dixie Cup Company, Division of Servonic Instruments, Inc. American Can Company Construction and Building Materials Sylvania Electric Products, Inc. Georgia Pacific Company (140) Task Corporation Kimberly-Clark Corporation Menasha Container Corporation Ador Corporation Monarch Marking Systems, Inc. American Meter Financial and Institutional Services Moore Business Forms Anaheim Foundry Company (9) R. C. Can Company The Bellwood Company, Division of St. Regis Paper Company, Growers Packard Bell Electronics Allstate Insurance Companies Container Division Corporation Bank of America, Supply&Service Depot Petroleum Research, Products,and Consumer Goods and Services (134) Pacific Telephone &Telegraph Co. Processing (35) Anaheim Truck&Transfer Company Southern California Edison Company California Research Corporation Boss Coverall&Linen Supply Southern Counties Gas Company Catalina, Inc. State Farm Insurance Companies Chicksan Company Conolon Corporation Richfield Oil Corporation General Aniline & Film Corporation Shaffer Tool Works Jewel Tea Company, Inc. Food Processing and Storage (32) Union Oil Company of California, Malibu Lady, Inc, Union Research Center Merrifield Trucking Company Alpha Beta Food Markets, Inc. U. S. Divers Company :Burry Biscuits Plastic and Fibreglass Products (52) Vista Furniture Company Case Swayne Company, Inc. CTL.Division, Studebaker-Packard Demler Farms Corporation Drugs, Chemicals, and Paint (16) Excelsior Creamery Company, Limited Glasspa.r Company Holly Sugar Corporation Narmco Materials Division American Continental Laboratories Brunswig Drug Company Hunt Foods and Industries, Inc. Plax Corporation Collier Carbon and Chemical Kraft Foods Company Rexall Drug and Chemical Company Corporation Laura Scudder's U. S. Polymeric Chemicals, Inc. Nutrilite Products, Inc. Mutual Citrus Products Company Rinshed-Mason Company Weber Bakery Division of Interstate Pumps and Valves (18) U. S. Borax Research Corporation, Bakeries Corporation Cadillac Gage Company a subsidiary of U. S. :Borax&Chemi- The J. C. Carter Company cal Corporation Fruit Packers and Shippers (13) Ca Company Jabscoco Pump Company Electrical Products (28) Consolidated Orange Growers Cannon Electric Company Eadington Fruit Company Recreational Facilities (8) Electra Motors (Manufactures) Minute Maid Corp. Disneyland Hotel Electrical Products Corporation Munemitsu Farms Disneyland, Inc. U. S. Electrical Motors, Inc.,Defense Olive Heights Citrus Association Knotts's Berry Farm Products Division Orange Cooperative Citrus Association Electronics (59) Placentia Mutual Orange Association Rubber Products (15) Placentia Orange Growers Association E-irkhill Rubber Aeronutronic Division, Ford Motor Santiago Orange Growers Association Rubber Corporation of California Company Uddo&Taormina Corporation of U. S. Rubber Company Altec Lansing Corporation California W. J. Voit Rubber Corporation NOTE: Based on information furnished by a number of Chambers of Commerce of Orange County cities and from the 1962 Industrial Directory, Orange County Industrial News (Volume VI, No. 5, June, 1962), showing industrial firms in Orange County (see Figure 1). Only major firms are listed above. Numbers indicate total firms in each category in study area. 30 ern points. The new San Diego Freeway will pass along the northern city limits and will provide even faster travel time to Los Angeles and San Diego County points. Overnight truck freight service by a number of carriers is available to Los Angeles, Long Beach, n San Diego, San Bernardo, an ther cities in Southern California. '�__R ifir Greyhound an Santa F Bus Lines provide long distance bus service, while direct bus service to Los Angeles is provided by the r olit t, xan°sitrity_and Manta Ana by the Huntington Beach-Santa Ana Stage Line �'07 � The Pack Electric P.ailwM (Southern Pacific Subsidiary) freight line runs north and south through the city, paMl_lling-8t High_wa 391 from Los Angeles to Stanton. This railroad main- tains a freight office in the city. '� C The Orange County Airport, seven miles f om the city, offers several regularly scheduled daily hts by Bonanza Airlines. Los Angeles Airways maintains a heliport at nearby Newport Beach, ch provides direct passenger and air freight service to Disneyland and Los Angeles Interna- al Airport. Employment The City of Huntington Beach is located in the Los Angeles-Long Beach-Orange County con- solidated labor market are . The following estimates for the area, made by the California State Department of Empyn ,t show a 9 fo increase in total civilian labor force employed between May 1961 and May During this period among the categories showing the greatest growth were contract constn (13 Jo) ; government (11 Jo) ; and manufacturing (10%). f May 1961 May 1962 May 1963 Civilian labor force . . . . . . . . . . . . . . . . . . . . . . . 2,904,000 2,989,700 3,110,800 Employed 2,699,400 2,837,700 2,937,800 Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,300 28,800 26,400 Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,300 12,300 12,400 i Contract construction . . . . . . . . . . . . . . . . . . 152,500 164,700 171,900 Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . 791,200 851,300 872,000 Transportation, commerce & utilities. . . . . 145,300 147,300 153,200 Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 587,000 608,600 631,700 Finance, insurance, and real estate . . . . . . . 145,900 151,500 158,300. Service and miscellaneous . . . . . . . . . . . . . . . 523,600 549,400 570,300 Government . . . . . . . . . . . . . . . . . . . . . . . . . . . 308,300 323,800 341,600 Educational Facilities The City of Huntington Beach is served by one high school and four elementary school districts. In addition a private school, the Country Day School, is located within the city. The Huntington Beach High School District has one school, Huntington Beach High School, located within the city limits. Another high school is under construction. The Ocean View School District, serving the newer, rapidly-developing residential areas, has nine schools in operation and has already selected sites for 30 additional schools. The Huntington Beach School District, which serves the older, established sections, maintains two elementary schools, one of which was opened this year. The Westminster School District,covering the northern tip of the city, opened two new schools during 1963, with a present enrollment of 429 pupils. The Fountain Valley School District, which serves the eastern part of the city, also opened a new school this year with an enrollment of 243. 81 The City of Huntington Beach also lies within the Orange Coast College District. The Orange Coast College is a junior college located within four miles of the city, and holds a number of evening classes in the city. A second campus of the college is to be located on a 100-acre site in Huntington Beach, with preliminary construction scheduled to begin in 1964. Total enrollment for all the public schools located within the city limits of Huntington Beach W the five-year period 1958-1962 as reported in October of each year is given below. During this iod, elementary school enrollment more than tripled. Four additional schools, with an enrollment eeding 1,500, were opened since October 1962, and do not appear in these statistics. These repre- t an additional 24 per cent increase since October 1962. 1958 1959 1960 1961 1962 Elementary schools . . . . . . 1,971 2,194 2,731 4,570 6,571 High school . . . . . . . . . . . . . 1,988 1,054 D 1,249 1,676 1,926 TOTAL . . . . . . . . . . . . . 3,959 3,248 3,980 6,246 8,497 Di Enrollment reduced by opening of second high school in district outside of city limits. There are seven colleges in Orange County, with an additional twelve located in the adjacent areas of southern Los Angeles County. Almost all of the campuses are located in the larger cities of the county and have become well-established and important segments of their respective communi- ties. The following colleges are located in Orange County: University of California, Irvine (new campus; classes to begin in 1965) ; Orange County State College (Fullerton) ; Chapman College (Orange) ; Southern California College (Costa Mesa) ; Fullerton Junior College (Fullerton) ; Orange Coast College (Costa Mesa) ; and Santa Ana College (Santa Ana). THE UNIVERSITY OF CALIFORNIA, IRVINE—The new 1,000-acre Orange County campus of the University of California, Irvine, is situated adjacent to the City of Newport Beach. It was donated to the University in 1960 by the Irvine Company. The university anticipates a total expenditure of $36,160,000 on the new campus by mid-1967. Site planning and development are almost completed, and the first phase of construction, estimated to cost $13,000,000 is scheduled to begin in fall 1963. An initial enrollment of 1000 students is expected in the fall of 1965, increasing to 12,500 by 1970, and reaching an ultimate of 27,500 in 1980. ORANGE COUNTY STATE COLLEGE—The California State Legislature established the Orange County State College in 1957 and the first classes were held in temporary facilities in March 1959 in the City of Fullerton. The permanent campus site in Fullerton occupies 252 acres and consists of 19 temporary buildings. There are 305 classes offered at present, a faculty of 81, and an enrollment of 2,000 students. Building plans provide for the expenditure of $13,000,000 over the next three- year period for permanent buildings. By 1970, the college is expected to offer 1,000 classes,to have a faculty of 600, and a student body of 12,000, and to grant bachelor, master, and doctoral degrees, the latter in conjunction with the University of California. ORANGE COUNTY JUNIOR COLLEGES—There are three junior colleges serving Orange County: Fullerton Junior College; Santa Ana College, and Orange Coast College in Costa Mesa. These col- leges are two-year institutions which provide a full complement of courses found in the lower divisions of four-year colleges and universities as well as offering a number of occupational pro- grams under terminal two-year courses leading to the Associate of Arts degree. Late afternoon and evening courses are also offered, especially courses related to industry, commerce, management, and supervision. Junior college enrollment for full-time students exceeds 6,300 in Orange County and this figure is expected to exceed 12,000 in 1965 and 19,000 by 1970. 32 i Utilities The following public utilities provide service in the City of Huntington Beach: Electricity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Southern California Edison Company Gas. . . . . . . . . . . . . . . . . . . . . . . . . . . .Southern Counties Gas Company of California Telephone. . . . . . . . . . . . . . . . . . . . . . . . . . .General Telephone Company of California '�----=�Water. . . .Southern California Water Company and the City of Huntington Beach As previously indicated in the section on indices of growth, all utilities have experienced a rapid expansion of their services in the city and anticipate a continuation of this growth during 1963. �Banking n\ �` The following banks have a total of seven offices in the City of Huntington Beach: Bank of America (two branches), United California Bank, Citizens National Bank,.Huntington Valley Bank, Security First National Bank, and U. S. National Bank. The Anaheim Savings and Loan Association also has an office in the city. Community Facilities �'A% j Within the City of Huntington Beach are located more than 20 churches representing many religious denominations. There are more than 40 organizations, including major service and fra- ternal groups. A clinical laboratory and an 80-bed convalescent hospital are located within the city and four general hospitals with a total bed capacity in excess of 400 are within a few minutes drive from the Civic Center. Medical practitioners within the city include 30 physicians, nine dentists, two chiropractors, and an optometrist. The City Library system maintains its main library at the Civic Center and has another branch. The Huntington Beach News, published locally, is a weekly publication. The Orange Coast Daily Pilot and the Santa Ana Register are also widely circulated in the area. There are eight motels and hotels and ten trailer parks providing more than 700 spaces to accommodate the numerous visitors to the city. Recreation O Recreation is one of the major activities in the City of Huntington Beach. Each year several million bathers visit the eight miles of public beach area located in or adjacent to the city limits. Swimming and surfboard riding are extremely popular sports and are conducted under the super- vision of the municipal life guards. Two state parks, Huntington Beach State Park and Bolsa Chica State Park, are located there. No overnight camping is allowed on the beaches; however, fire rings are provided for picnics. The 1,821-foot concrete municipal pier annually attracts hundreds of thousands of fishermen who find an abundance of halibut, red rock, cod, yellowfin, spotfin, croaker, bass, and sun perch. Grunion runs attract thousands of persons to the beaches every summer. The City of Huntington Beach also provide two parks and a variety of recreation activities. Renowned Orange County recreation areas in the vicinity of Huntington Beach include the Orange County Boat Harbor in Newport Beach, about a ten-minute ride, and Disneyland, Knott's Berry Farm, and the Movieland Wax Museum, each about a 30-minute drive from Huntington Beach. 33 t \ WHITEHALL 4-2680 `"A. T. S T. NY 1-623 NY 1-624 THE BOND BUYER Founded in 1891 by WM.F.G.SHANKS TH, AUTHORITY ON MUNICIPAL BOLOS DAILY AND WEEKLY 67 PEARL STREET E D I T I O N S NEW YORK 4, N.Y. January 9, 1964 Mr. Paul Co Jones, City Clerk, Huntington Reach, Cal. Dear MroJOneso We could appreciate your advice as to whether or not any further action has been taken toward issuing the $1,950,000 Water Revenue bonds 'balance of the $5,700,000 issue authorized at an election Meld on April 30, 19530 If your plans have progressed we Mould appreciate receiving further details by return mail. Publication of additional information in our nears columns enables us to provide an extremely valuable service for you and our interested waders o the municipal bond dealers, dealer banks and investors all over the country. In the event your bond issue is coming to market in the very near future, we `,rish to rewind you that potential underwriters must have your "Official Notice of Sale" before they can submit bids for the bonds. The most effective way to insure receipt of your notice by all active dealers is to authorize publication in the advertising columns of THE ROUND BLMR. The enclosed brochure further explains the many benefits and advantages that accrue from this marketing procedure. With your assistance we are prepared to utilize our facilities to the fullest extent so you way promote your financing in the most effective manaer. Very truly yours, y William So Shanks, Vice President. WSSoAT Encl. LAW OFFICES OF O'M ELVENY & MYERS 433 SOUTH SPRING STREET LOS ANGELES 13 November $th 1 6 CITY OF HUNTINGTON BEACH g 3 OUR FILE NUMBER 1963 WATER REVENUE BONDS, SERIES A B-542 5 FINAL OPINION Blyth & Co. , Inc . and Associates Gentlemen: We have examined certified copies of proceedings taken for the issuance of $3,750,000 revenue bonds of the City of Huntington Beach. Said bonds are issued under and pursuant to the Revenue Bond Law of 1941 and the Charter of said city, are designated "1963 WATER REVENUE BONDS, SERIES A, " and consist of 3,750 bonds numbered Al to A3,750, of the denomination of $1,000 each, dated November 1, 1963, payable annually for the first year and semiannually thereafter, at the following rates per annum, and mature in consecutive numerical order as follows : Maturing on Amount Interest November 1 of: Each Year Rate 1965 $10,000 4-3/4% 1966 20,000 4-3/4 1967 40,000 4-3/4 1968 60,000 4-3/4 1969 80,000 4-3/4 1970 - 1971 90,000 4-3/4 1972 - 1973 100,000 4-3/4 1974 110,000 4-3/4 1975 - 1976 110,000 3-1/4 1977 - 1978 120,000 3-1/4 1979 - 1980 130,000 3.30 1981 140,000 3.30 1982 - 1983 150,000 3.40 1993 1,890,000 3-1/2 All bonds maturing on or after November 1, 1993, are subject to call and redemption prior to maturity on November 1, 1973, or on any interest payment date thereafter as stated in said bonds and in the resolution providing for the issuance of said bonds, Resolution No. 1844. November 8, 1963 #2 Blyth & Co. , Inc . and Associates From such examination we are of the opinion that the proceedings have been taken in accordance with the laws and Constitution of the State of California and the Charter of said city and that said bonds, having been issued in duly authorized form and executed by the proper officials and delivered to and paid for by you, constitute the legal and binding obligations of said city, payable solely from the Revenue Fund established by said Resolution. We are further of the opinion that : (1) Said City has power and is obligated to prescribe, revise and collect charges for the services, facilities and water of its water- works system at least sufficient to pay as the same become due the interest on and principal of the bonds, all payments re- quired for compliance with said Resolution and also the neces- sary and reasonable maintenance and operation costs of said waterworks system; (2) No bonds of the City payable out of said Revenue Fund, whether heretofore issued or hereafter to be issued, have or will have any priority over bonds of this issue with respect to payment of principal and interest out of said Revenue Fund; (3) The provisions and covenants con- tained in said Resolution are authorized by the laws of the State of California and are legal and binding in accordance with their terms; and (4) Interest on said bonds is exempt from income taxes of the United States of America under present federal income tax laws and such interest is also exempt from personal income taxes of the State of California under present state income tax laws Respectfully submitted, ■ LAW OFFICES OF O'M ELVENY & MYERS BEVERLY HILLS OFFICE 433 SOUTH SPRING STREET 9601 WILSHIRE BOULEVARD BEVERLY HILLS III LOS ANGELES 13 273-41I1 620-1120 - CABLE ADDRESS"MOMS" October 24thOUR FILE NUMBER 1 g 6 3 B-5425 CITY OF HUNTINGTON BEACH 1963 WATER REVENUE BONDS, SERIES A Mr. Paul Co Jones City Clerk City Hall Huntington Beach, California Dear Mr. Jones - We have today issued to the purchaser our pre- liminary opinion and instructions re delivery covering the above entitled bonds, a copy of which is enclosed herewith. Accordingly delivery thereof may go forward when the bonds are received from the printer. We enclose herewith the customary Signature Certificate and Treasurer' s Receipt to be filled in and signed as indicated. Please see that two copies of each are given to the purchaser at the time of delivery. When you are notified by Jeffries Banknote Company that the bonds are ready for signature you should arrange through Jeffries a satisfactory date for signing and delivery. These matters can be best handled over the telephone. Yours very truly, O 'MELVENY & MYERS By DRH-mt nald Ro Hodgman Enc. cc - Blyth & Co. L `t LAW OFFICES OF I O'M ELVENY & MYERS (- 433 SOUTH SPRING STREET ,/gy p LOS ANGELES CITY &.t�"y�q " IN N tE�«TA 13 1'963 WATER EVMM October � � � � � � � OUR FILE NUMBER ]BON w:wawwropk 'anr+e.+ray,. r ,'yj�ry� $ - PruMIRWARY OPTION 629 South Spring sf Los An 14" a : ° r* Oet We have. expihInad cer-titic-,d copies of prooeedings talten for the I u w .1' 50� 00 0l n( f the i of Hun each, design-at e 96 1.x la e d Series ,�, dated November award to you and your assoclates. a� ��ratio we are of the opinion that tho pro,- e . s, have been, taken in accordance with the lawsand Constitution bf the State of Califomia., and we are prepared to renderour unqualified approving o-ninion on said bonda whon, 'they have been i,'s- sued In duly authorized form, executed by the proper officials and delivered to and paid for b you In the manner provided by lWa. The, CityClerk has been ntotifled that arrangements for deii%rer,7 car. go forward h n the bonde are received frorr, the printer. When the azwount of accrued interest.,., , is l ea and verified with the City Treasurer, ploase call us and vorify that amount before deliver. At or prior to dallvery you should check all of the bonds for zignatures, seal,, number ,, maturity deves,, aiiiovmtsand Interest rates,, and the coupona thouldchecked to see thet they have- cor- redt signaturias, numbers, zwtountz and maturity dates Our final a ; ov p' . o being, printed on the back of the bonds. Copies of our mama-Illy siened opinion -will be delivered to you along, with the bonds. After delivex T, please have yournes- seqger bring to us forour examination exect,xtedd f' this ;issue along with one oopy of each of the properly filled u aatur Cei-t.,ificate and rarla Receipto forms for 1610h, together with inbtruetiogs,, have been sent direct to the City Clerk. Yours vend° a WIMMY 1a1TE DPI.M-t Hodto * co t nau 1 0. Jones city Clerk Huntington poach LAW OFFICES OF O'M ELVENY & MYERS BEVERLY HILLS OFFICE 433 SOUTH SPRING STREET 9601 WILSHIRE BOULEVARD BEVERLY HILLS LOS ANGELES 13 273-4111 620-1120 CABLE ADDRESS MOMS October 18th OUR FILE NUMBER 1 9 6 3 B-542 5 CITY OF HUNTINGTON BEACH 1963 WATER REVENUE BONDS SERIES A Mr. Paul C. Jones City Clerk City Hall Huntington Beach, California Dear Mr. Jones: Prior to delivery we will need the follow- ing items in order to complete our transcript : (1) Certified copy of the minutes of the regular meeting of September 16 showing adjournment to October 2; and (2) Affidavit of posting of the order of adjournment from September 16 to October 2 . Yours very truly, O'MELVENY & MYERS By DRH:mt Do ald R. Hodgman I October 22, 1963 WMelveny & Myers 433 South Spring Street Los Angeles 13, California Attention: Donald R. Hodgman Gentlemen: Pursuant to your request of October 16, 1963, we are enclosing one copy of certified minutes of September 16, 1963 and a copy of the affidavit of posting of the order of adjournment, as requested. Sincerely yours, Paul. O. Jones City Clerk By: eputy E cs a .. c [FI Y October 10, 196- O°Melveny & Myers 433 So. Spring Street Los A elew 1 a9 California Gentlemen: Enclosed please find Certificate of the City C f rk and Resolution Noo 1860 passed and adopted October 1963,, 1 by the Huntington Beach City Council. If any -further information is required, please contact this office. We are also enclosing a copy of the minutes of the Coon it for October 2, 196300 ;Sincerely your , P jul C;m Jo s City Cl er'i��'**' PCJeed Enc �, o Ir 1 October 10, 196 i Stone .&. Youngberg 1314 Russ Building San Francisco, Ca.11f'ornf.a Gentle€xien c We are forwardin ; a copy of the City Clerks Certificate and ;K a coy of esolution too. 1860 passed and adopted day the C ty Council on October 2, 1963. Also a copy of the Council minutes of October 2. 1963. if you have need for further information, please contact this office. ' Sincerely yours, Paul C. Jones � t y C l erR \'J s ed E ; t OPY Sarcus , Kindred & Company 231 South La Salle Street Chicago 40 Illinois October 2 , 1963 City Council City of Huntington Beach Huntington Beachs, California Rt#- Proposal for City of Huntington Beach, Orange County, 1963 Water Revenue Bonds , Series A Gentlement In accordance with your official Notice of Sale , we hereby te-n- der you a proposal for all but not less than all. pf Tkgg $3 ,,750.,000 legally issued bonds For all of the bonds maturing as scheduled, November 1. 1965 to November 1. 19930 we will pay' 100$ of the par value plus inter- est at the following rates: Bonds maturing�,J965 through 1979 - 3 3/4 percent inclusive Bonds maturini' i980 through 1983 - 3.60 per cent inclusive Bonds maturing 1993 -' �.3-e.Mper cent In addition we will pay a total premium of $340.88,, We are enclosing our cashiers check #717035 , in the amount of $25s000.00v payable to the City . of Huntington Beach. Very trulyyours ,,- Barcus , Kindred A,§sociates By Estimated Interest Cost $3 $062 ,264 .12 Estimated Net Interest Cost 367649 LY-f H &0Ot C NEW YORK CHICAGO 629 SOUTH SPRING STREET BOSTON PHILADELPHIA SAS FRANCISCO CABLE ADDRESS Los ANGELELES LOS ANGELES 14 B L Y T H CO SEATTLE PORTLAND October 2, 1963 City Council of the City of Huntington Beach City Hall - Huntington Beach, Calif Gentlemen: In accordance with the terms of the official notice of sale for $3,750,000. par value of CITY OF HUNTINGTON BEACH, cmLIFORNIA, 1963 WATER REVENUE BONDS, Series "A", 'to be dated November 1, 1963,-4nd maturing in amounts-and call- able as,set forth therein, with interest payable annually for the first year on November 1, 1964, and semi-annually thereafter on May 1 and November 1 in each year, said bonds to be of the denomination of $1,000. each, we sub- mit the following: f. Bonds maturing on: To bear-interestat rate- of: November 1, 1965 to November 11 1974, incl. 4 3/4% November 1, 1975 to November 1, 1978, incl. 3 1/4% Norte- ber 1, 1979 to November 1, 1981, incl. 3.30°fo N6V6 ber 1, 1982 to November 1, 1983, incl. 3 4o% November 1, 1 • / I 993� 3 1 2 0 We will pay you, PAR ($3,750,000) and accrued—interest from date of the bonds to date of delivery to. us, plus a premium= =$2;587.50 The net interest cost to the City is $2,868,317.50, or l/'J"53807 0: We are attaching hereto a certified check for the summ of $25,000.00 payable to the order of the City of Huntington Beach, California, which check is to be retained by you to be applied as part payment on the purchase price of these bonds if we are .the successful bidder, otherwise, it is to be imme- diately returned to us. This bid is made for immediate acceptance or rejection, and subject to appro- val of legality by O'Melveny & Myers, attorneys, whose opinion will be fur- nished to us without cost. We request that a copy of such opinion, certi- fied by an officer of the city by his facsimile signature be printed on the back of each bond, without charge 'to us. Very truly yours, BLYTH & 0., ' INC. & AS SO 7A RAJ/ABP By Encl. k6ynionf A. Johnson, ice-Pres. Municipal Bond Department r Res $32750,000. City of Huntington Beach, California 1963 Water Revenue Bonds, Series "A" List of Members: BLYTH & CO., INC. (Manager) Los Angeles, California J. C. Bradford & Co. Nashville, Tenn. Eastman Dillon, Union Sec. Co. New York, New York J. A. Hogle & Co. Los Angeles, California E. F. Hutton & Co., Inc. Los Angeles, California Kalman &_ Company, Inc. Minneapolis, Minn. Kenower, MacArthur & Co. Detroit, Michigan Irving' Lundborg & Co. San Francisco, Calif. R. H• Moulton& Company Los Angeles, California Wm. E. Pollock & Co. New York, New York Shearson, Hammill & Co. Los Angeles, California William R. Staats & Co. Los Angeles, California Stern, Frank, Meyer & Fox Los Angeles, California. Wagenseller & Durst, Inc. Los Angeles, California Weeden & Co. Los Angeles, California Dean Witter & Co. Los Angeles, California i 523 W.67--STREET LOS ANGELES 14,CALIF. MADISON 6-2511 MERRILL LYNCH, PIERCE, FENNER & SMITH INC October 2, 1963 City of Huntington Beach c o Mr.c e/ . Paul C. Jones City Clerk - City Hall Huntington Beach, California r� Gentlemen: For the $3'750,000 par value of City of Huntington Beach 1963 Water Revenue Bonds, Series A, which are offered for sale in accordance with your published notice of sale, said bonds being dated November, l, 1963, and in denomination of $1,000 each, -interest payable November 1, 1964, and semi-annually thereafter on May and November 1. $ 390 000:00 par value maturing 11-1-65 to 11-1-71 both incisive, to bear interest at the ra e o t % per annum. $ 900 000.00 par value maturing U-1-7r. to 11-1-79 both inclusive,, bear interest at the rate o per annum. $ 570 000.00 par value maturing 11-1-80.to 11-1-83 both inc usive.wear interest at the Mat = % per annume $ 1,890,000.00 par value maturing 11-1-93 to - both inclusive ., to bear interest at the rate o .= % per annum, e will ay $3,750,000.00 which is the par value thereof, together with a premium of $ 450,00 and accrued interest to date of delivery. This bid is made subject to our ob ni-7 the unqualified legal opinion of OtMelveny & Myers, 'attorneys., in geies, approving in all respects the validity of this issue. We further request that if we are the successful bidder, a copy of the legal opinion of the above attorneys will be printed on each bond. We enclose herewith a certified check in the amount of $25000.00 as evidence of our good faithe If we are awarded the bonds you may apply this check as partial payment, otherwise please return it promptly to use In the event that ours is the high bid, we would appreciate being informed as to the name of the firm which will print-the°°b s• For information purposes only,./'we compute the total net interest cost to be $ 2,877,000.00 , which/is 3,548785 °" • Respectfully submitted, MERRILL LYNCH, PIERCE, FENNER & SMITH TAY COMPANY AND ASSOCIATES Thomas M. Thiel - Manager TMT:cam Municipal Bond Department Encl. check GOLDMAN, SACHS & CO. BOSTON CHICAGO DEL 20 BROAD STREET STILOUISPHIA LOS ANGELES NEW YORK 5, N. Y. ALBANY BALTIMORE BUFFALO (�J DETROIT WHITEHALL 4-2300 October 2, 1963 Proposal for Bonds City Council City of Huntington Beach Huntington Beach, California Gentlemen: We hereinafter bid for $3,750,000 par value 1963 Water Revenue Bonds, Series A of the City of Huntington Beach, California dated November -1, 1963 and more fully described in your Notice of Sale appended hereto, which by reference, is made part hereof, said bonds to mature November 1 and bear coupon rates as follows: Maturity Coupon Amount Maturity Coupon Amount 1965 4.75 $ 10,000 1975 3.25 ° $110,000 1966 4.75 0 20,000 1976 .2 °° 110.1000 1967 .75 4o,000 1977- 33.25 ob 120.1000 1968 4.75 6o,000 19 0 1° 120,000 1969 75 8o,000 1979 3.30 5 130,000 1970 4.75 ° 90,000 1980 40 ° 130,000 1971' �.__ 4.75 ° 90,000 1981 40 14o,000 1972 . 4.40 100,000 1982 40 150,000 1973 _ 3.25 0 100,000 1983 � 40 150,000 1974 3.25 ° 110,000 1993 3.60 ° $1,890,000 We will pay par and a premium of zero dollars ($ 0.00 plus accrued interest from date of bonds to date of delivery. Please find enclosed a certified or a cashier's check for $25,000 which check is to be returned to us if this bid is not accepted, but otherwise .is to be retained as and for full liquidated damages if we fail to accept delivery and pay for the bonds. This bid is made subject to our being furnished without cost to us the unqualified approving opinion of 0`Melveny & Myers, attorneys, and the usual closing papers in a form satisfactory to us. Very truly yours, GOLDMAN, SACHS & CO. AND ASSOCIATES NOT PART OF BID Gross Interest Cost $ 2,896,935.00 Less: Premium 0.00 Net Interest Cost $ 2,896,935,00 By: Effective Interest Rate 3.5733 % / I I (Published Huntington Beach News Sept. payment date thereafter prior to maturity, be more than '1-1/2% 'higher than the each proposal as a guaranty that .the 12, 1963) at a redemption price equal to the prin- interest rate on any other maturity or bidder, if successful, will accept and pay NOTICE INVITING BIDS ON$3,750,000 cipal amount thereof plus the following group of maturities. for said bonds in accordance with the BONDS OF THE CITY OF HUNTING- Premiums (percentage of par value) if Award: The bonds shall be sold for terms of his bid. The check accompany- TON BEACH, CALIFORNIA, DESIG- redeemed at the following .times: cash only. All bids must be for not less ing any accepted proposal shall be ap- NATED "1963 WATER REVENUE REDEMPTION DATES AND PREMIUMS than all of the bonds hereby offered for plied on the purchase price or, if such BONDS, SERIES A." On or After And Prior to sale and each bid shall state that the proposal is accepted but not performed, NOTICE IS HEREBY GIVEN that sealed November 1 November I Premium bidder offers par and accrued interest .to unless such failure of performance shall 1973 1974 4% the date of delivery, ,the premium, if any, be caused by any act or omission of the proposals for the purchse of $3,750,000 1974 1975 3-3/4 and the interest rate or rates not to city, shall ,then be cashed and the pro- par value water revenue bonds of the 1975 1976 3=1/2 exceed'those specified herein, at which ceeds retained by the city. The check ac- City of Huntington Beach, California, will 1976 1977 34/4 the bidder offers to buy said bonds. companying each unaccepted proposal be received by the City Council of said 1977 1978 3 Each bidder shall state in his bid the will be returned promptly. city at the place and up to the time below 1978 1979 2-3/4 total net interest cost in dollars and .the Change in Tax Exempt Status: At any specified. 1979 1980 2-1/2 average net interest rate determined time before .the bonds are tendered for TIME: Wednesday, October 2, 1963 at 1980 1981 2-1/4 thereby, which shall be considered in- delivery, the successful bidder may dis- 7:30 o'clock P.M. 1981 1982 2 formative only and not a part of the bid. affirm and withdraw the proposal if the PLACE: City Hall 1982 1983 1-3/4% Highest Bidder: The bonds will be interest received by'•private holders from Huntington Beach, California 1983 11984 1-1/2 awarded to the highest responsible bidder bonds of the same type and character MAILED BIDS: Mailed bids should be `1984 1985 1-1/4 or bidders considering the interest rate shall be declared to be taxable income addressed: 1985 1986 1 or rates specified and the premium of- under present federal income tax laws, City of Huntington Beach 1986 1987 3/4 fered, if any. The highest bid will be either by a ruling of.the Internal Revenue 1987 1988 1/2 determined b deducting the amount of Service or by a decision of an federal c/o Mr. Paul C. Jones Y g Y 1988 1989 1/4 the premium bid (if any) from the total court, or shall be declared taxable by City Clerk '1989 Maturity0 Y City Hall amount of interest'which -the city wouldthe terms of any federal income tax law Huntington Beach, California All or any of the bonds subject to call be required to .pay from ,the date of said enacted subsequent to the date of this may be called for redemption at any one bonds to the respective maturity dates notice. OPENING OF BIDS: The bids will be time. If less than all of the bonds are thereof at the coupon rate or rates speci- Legal Opinion: The unqualified opinion opened at the meeting of said City Coun- redeemed at any one time, such bonds fied in the bid, and the award will be of O'Melveny & Myers, attorneys, ap- cfl :to be held October 2, 1963, at 7:30 shall be redeemed by lot. A sinking fund made on the basis of the lowest net proving the validity of said bonds will o'clock P.M. at the City Hall of said city. with a.•compulsory redemption provision interest cost to the city. The purchaser be furnished .the successful bidder at or ISSUE: $3,750,000 consisting of 3,750 for the term bonds maturing on November must pay accrued interest from the date prior to the time of delivery of the bonds, bonds, numbered Al to A3,750, both 1, 1993, has been provided for in the of the bonds to the date of delivery com- at the expense of the city. A copy of such inclusive, of the denomination of $1,000 Resolution of Issuance. puted on a 360-day year basis. The cost opinion, certified by an officer of the each, all dated November 11, 1963, and PURPOSE OF ISSUE: Said bonds were of printing the bonds will be borne by city by his facsimile signature will be to be designated 1963 WATER REVENUE authorized for the acquisition, construc- the city. printed on the back of each bond unless BONDS, SERIES A." "tion and financing of additions to the Right of Rejection: The city reserves the purchaser requests that such printed MATURITIES: The bonds will mature in-water system for the City of Huntington .the right, in its discretion, to reject any copy be omitted. No charge will be made consecutive numerical order on November Beach. and all bids and to .the extent not pro- to the purchaser for such printing or 1 in the amounts for each of the several SECURITY: Said bonds are issued pur- 'hibited by law to waive any irregularity certification. years as follows: suant to the Revenue Bond Law of 1941 or informality in any bid. No Litigation Certificate: At the time Maturity Years Amount (Government Code 54300 et seq.). Said Prompt Award: The city will take ac- of payment for and delivery of said bonds, -Inclusive- Each Year .bonds are equally secured by a pledge, tion awarding .the bonds or rejecting all the city will furnish the successful bid- 11965 $ 10,000 charge and lien upon the gross revenues bids not dater than twenty-six (26) 'hours der a certificate that .there is no litiga- 1966 20,000 of the entire water system of .the City of after the time herein .prescribed for the tion pending affecting the validity of the 1967 40,000 Huntington Beach, together with all ad- receipt of proposals; provided that the bonds. 1968 60,000 `ditions and improvements to said system award may be made after the expiration INFORMATION AVAILABLE: For further 1969 80,000 hereafter made. The principal of and of the specified time if the bidder shall information respecting the .terms and con- 1970-1971 90,000 interest on the bonds and any premiums not have given to the City Council notice ditions of the bonds, bidders are refer- 1972-'1973 100,000 -upon the redemption of any thereof are in writing of the withdrawal of such red to the copy of the resolution of 1974-11976 1 10 000 not a debt of the City of Huntington proposal. issuance which accompanies the Official 1977-1978 120:000 'Beach nor a legal or equitable pledge, Place of Delivery: Delivery of said Statement. Said resolution contains the 1979-1980 130,000 charge, lien or encumbrance upon any bonds will be made to the successful various covenants and provisions made 1981 140,000 of ids.property or upon any of its income, bidder at the office of Jeffries Banknote for the security and protection of the 1982-1983 150,000 receipts or revenues, except the gross Company, 117 Winston Street, Los Ange- bondholders, including covenants relat- 1993 1,890,000 revenues of said water system which are les, California, or at any other place ing to rates and charges to be made INTEREST: The bonds shall bear inter- under the terms of the resolution of fs- agreeable to both the successful bidder for water service, the use of the revenues est at a rate or rates to be fixed upon suance, and said Revenue Bond Law of and the city. of the water system, the establishment the sale thereof but not to exceed 6% 194'1, pledged to the payment of said of funds, the limitations upon transfer / bonds and interest. The general fund of Prompt Delivery: Cancellation for Late from the Revenue Fund, the limitations per annum, payable annually the first the Cid of Huntington Beach is not Delivery: It is expected ,that said bonds upon additional debt year and semiannually thereafter. Y g wild be delivered to the successful bidder P payable from such liable for •the payment of the bonds or revenues, and said bonds shall be issued PAYMENT: Said bonds and,the interest their interest, nor is the credit or the within thirty days from the date of sale ,,,,der and pursuant to said resolution. thereon will be payable in lawful money taxing power of the city pledged. The thereof. The successful bidder shall have Copies of this notice inviting bids for of the United States of America at the holder of the bonds or coupons shall not 'the right, at his option, to cancel .the ;the purchase of said bonds, together with Security First National Bank of Los An- compel the exercise of the taxing power contract of .purchase if the city shall fail copies of said Official Statement to be geles in Los Angeles, California, Fiscal by the City of Huntington Beach or the to execute ,the bonds and tender them for issued in connection with the sale of said delivery within sixty days from the date bonds and copies of said resolution of Agent for the city, or, at the option of ,forfeiture of any of its property. the holder, at any paying agent of the TERMS OF SALE herein fixed for the receipt of bids, and issuance may be obtanied from: City in Chicago, Illinois, or in New York, in such event the successful bidder shall New York. Interest Rate: The maximum rate bid be entitled to the return of the check STONE & YOUNGBERG may not exceed 6% per annum, payable accompanying his bid. 1314 Russ Building REGISTRATION: The bonds will be coupon bonds re isterable either as to ,annually the first :year and semiannually Form of Bid: Each bid together with 235 Montgomery Street g thereafter. Each rate bid must be a San Francisco 4, California principal only or as to both principal multiple of 1/20 of d'%. No bond shall the 'bid check, must be in a sealed en- GIVEN b order of the City Council and interest. bear more than one interest rate, and all velope, addressed to the city with the Y Y Water adopted September 3, '1963. CALLABLE: The bonds maturing on or bonds of the same maturity shall bear envelope and bid clearly marked "Pro_ of the City of Huntington Beach, Cali- prior to November 11, 1983, shall not 'be the same rate. Only one coupon will be ateosal for City of Huntington Beach, 1963 fornia, PAUL C. JONES subject to call or redemption prior to attached to each bond for each install- Wr Revenue Bonds, Series A." City Clerk of the City of maturity. The bonds maturing on Novem- ment of interest thereon, and bids pro- Bid Check: A certified or cashier's Huntingdon Beach, California ber 1, 11993, are subject to call and re- viding for additional or supplemental check on a responsible bank or trust com- demption, at the option of the city, on coupons will be rejected. The rate on any pany in the amount of $25,000 payable November 1, 1973, or on any interest maturity or group of maturities shall not to the order of the city must accompany J r, SMITH, BARNEY & CO. zo BROAD STREET NEW YORK 5, N.Y. DIGBY 4-9600 October 2, 1963 City of Huntington Beach c/o Mr. Paul C. Jones City" Clerk City Hall Huntington Beach, California Dear Sir: For all but no part of the following described, legally issued, properly executed, direct special obligations of. the City of Huntington Beach, California. 1963 Water Revenue Bonds, Series A, to be dated November 1, 1963, to mature each November l and bear in- terest as follows: Maturities Coupon Amount (Inclusive) Rates $ 300,000.00 1965 to 1970 4.75 n1 $ 90,000.00 19 71 .ttTo-1' - 4,50 f $ 650,000.00 19_2 to �933 3.25. $ 820,000.00 1928 to 19 83 3040 $1,89o,000.oo 19 93 ���, 3,70" $ 19 to 19 the Bonds being subject to redemption in accordance with the notice- of sale referred to below, to be in. coupon form in the denomination of $1, 000, principal and semi-annual interest (November 1 and May 1) to be payable at the Security First National Bank of Los Angeles in Los Angeles, California, Fiscal Agent for the city, or, at the option. of the holder, at any paying agent of the City of Chicago, Illinois, or in New York, New York, and as further described in the official notice of sale adopted September 3, 1963, and signed Paul C. Jones, City Clerk of the City of Huntington Beach, California, we bid the sum of $ 3 750 592.50 or $ 100.0158 for each 100 Bond and accrued interest from date of bonds to date of delivery thereof. C/Huntington Beach,Calif. -2 October 2, 1963 It is. understood that we will be furnished, without expense to us at the time of or prior to the delivery of these bonds, satis- factory legal opinion of Messrs.O?`Melwreny &. Myers, of Los Angeles, California, approving the validity of the bonds, together with certified papers examined by them. As. evidence of our good faith in bidding, we enclose cashier's check in the amount of $2.5, 000 payable to the order of City of Huntington Beach, California. If this proposal is accepted this check is to be. retained as part payment for the above mentioned $3,750,.000 Bonds ; otherwise it is to be returned immediately to us. This bid is for immediate acceptance. Very truly yours, SMITH.,; BARNEY & CO. and Associates By:) GROSS INTEREST $ 2,945,365.00 LESS: PREMIUM $ 592.50 NET: INTEREST $ 2,944, .50 N.I..C. 3.6325 1 i . 89 B ®AD'"7AY TELEPHONE- . Aylow YORK 69 1 ® Y. DIGBY 4-2200 s October 2, 1963 City of Huntington Beach C/o Paul C. Jones City Clerk - City Hall Huntington Beach, California Dear Mr. Jones: For all but not any part of $3, 750, 000 CITY OF HUNTINGTON BEACH, CALIFORNIA DESIGNATED 1963 WATER REVENUE BONDS SERIES "A" Dated November 1963 .(lst) and maturing annually November 1, 1965 through.1993, inclusive, said bonds to bear interest as follows: i 1965 through 1970 maturities at 4.75 % per annum 1971 44P0'+9k only maturities at 4.25 % per annum 1972 through 1978 maturities at 3.25 % per annum 1979 through 1981 maturities at 3,40- % per annum 1982 through 1983 maturities at 3.50 - % per annum 1993 only maturities at 3.70 % per annum certain of the bonds being redeemable as outlined in you Official Notice of Sale, all other details to be in accordance with said Notice of Sale, we will pay $ 3,75o,825.0o - and accrued interest to the date of delivery of the bonds to us. i The above bid is equivalent to: Total interest cost of $ 2 46 14-. Less Pren um 825.00 " Net Interest Cost '2.,945, .00 Effective Rate . 3.6337 As required in your Official Notice of Sale, we enclose check in the amount of $25, 000 payable to the order of Huntington Beach, California, which check is to be applied as part payment should we purchase the bonds, or it is to be retained by you as and for liquidated damages in the event we should fail to take up and pay for the bonds in accordance with the terms of this proposal; in the event we are not the successful bidders, it is to be returned to our representative. 6 Page -2- City of Huntington Beach C/o Mr. Paul C. Jones City Clerk City Hall Huntington Beach, California Should this proposal be accepted, it is our understanding that the unqualified legal opinion of Messrs. O'Melveny & Myers of Los Angeles, California will be furnished, without charge, simultaneously with the delivery of the bonds to us. Very truly yours, PHELPS, FENN & CO. i i I i B. J. VAN I N G E N & CO. INC. MUNICIPAL BONDS 40 WALL STREET MIAMI, FLORIDA NEW YORK 5, N.Y CHICAGO, ILL. BOSTON, MASS. October 2 , 1963 City Council City Hall Huntington Beach,' California "Proposal for City of Huntington Beach, 1963 Water Revenue Bonds Series A. " Gentlemen: For all, but no part of the $3, 750 ,000 City of Huntington Beach, California, 1963 Water Revenue Bonds, Series A, dated November 1, 1963, and more fully described in the Official. Notice of Sale, as appeared in the Office tatement, dated September 3 , 1963 , which is hereby made part of this bid, we will pay' you $3, 750 ,000 plus a total premium of $ 262.50 , plus accrued interest from November 1, 1 �tote of delivery for said Bonds . Said Bonds are to mature in ac with the Official Notice of Sale and are to bear interest on each serial maturity as follows: Due Due November 1 . Rate November 1 Rate 1965 ., 1 1975 k 1966 _ 1976 3.5 1967 5 _ 1977 1968- 4. 1978 . 1969 — 3.5 1979 1970 3.5 1980 j. 1971- L5- 1981 3.5 1972 3.5 1982 3.5 1973 .1 3,.5 1983 - - s� 19 74, . 3_3.5 Term Bonds 1993 3.70 This proposal is made subject to our being furnished with the unqualified legal opinion of Messrs. O°Melveny & Myers, Los Angeles`, California, as to the validity of the said Bonds. This proposal is also subject to our receiving the usual closing documents customary with such transactions . Enclosed herewith is a certified (cashier's) check for $25,000 payable to the City of Huntington Beach. The proceeds of the said check are to be applied to the purchase of the said Bonds if we are'.the successful bidder. In the event we are not the successful bidder for the said Bonds, the enclosed check is to be returned to us promptly. City Council October 2, 1963 Page 20 We calculate the effective interest rate as follow: GROSS INTEREST: . $ 2,955,950.00 Less PREMIUM: 262.50 NET INTEREST: $ 2.955687.50 NET INTEREST C : 3.6458 This proposal is submitted for prompt acceptance or rejection— Respectfully submitted: B. Jo VAN INGEN & CO. INC AND ASSOCIATES By: Bo Jo VAN INGEN & CO. INC i BY Exe utive Vice Pr sident i I n A Barcus , Kindred 8 Company 231 South La Salle Street Chicago 4 , Illinois October 2 , 1963 City Council City of Huntington Beach Huntington Beach , California RE: Proposal for City of Huntington Beach, Orange County , 1963 Water Revenue Bonds ,. Series A Gentlemen: In accordance with your official Notice 'of Sale , we hereby ten- der you a proposal for all but not less than all of the $3 ,750 ,000 legally issued bonds. i For all of the. bonds maturing as scheduled, November 1, 1965 to -November 1 , 19�9 3 , we wil l pay 10 0% of the par. value plus inter- est at the following rates: Bonds maturing 1965 through 1979 1 .3/4 percent inclusive Bonds maturing 1980 through 1983 - 3 .60 per ceninclusive Bonds maturing 1993 =', 3•:80 -,per cent In addition we will pay a total premium of' $340 . 88 . We are enclosing our cashiers check #.77035 , in the amount of $25 ,000 .00 , payable .to the City of Huntington Beach. Very truly yours , Barcus , Kindred 8 Associates By Estimated Interest Cost,;,'6 ,052 ,264..12 ' Estimated Net InteresaCo t 3. 7649 r LAW OFFICES OF O'M ELVENY & MYERS BEVERLY HILLS OFFICE 433 SOUTH SPRING STREET 9601 WILSHIRE BOULEVARD BEVERLY HILLS ' LOS ANGELES 13 273-4II1 620-1120 CABLE ADDRESS MOMS September 26thOUR FILE NUMBER 1963 B-542 5 CITY OF HUNTINGTON BEACH 1963 WATER REVENUE BONDS, SERIES A Mr. Paul C. Jones City Clerk City Hall Huntington Beach, California Dear Mr. Jones ; The enclosed documents are enclosed for the opening of bids which is set for the adjourned regular meeting of October 2nd. (1) Suggested form of minute excerpts and Resolution of Award; and (2) Certificate of City Clerk. The enclosed minute excerpts can be used for the purpose of. entering the tabulation of bids in the minutes . Assuming a satisfactory bid is received, the Resolution of Award should be adopted at the meeting of October 2nd. Please inform us on Thursday following the meeting of the interest rates of the successful bidder and we will pass this information on to Jeffries Banknote Company so that the printing of the bonds can go forward. In connection with the printing of the bonds you will recall that forms and memorandum covering filing of signatures of the Mayor and the City Treasurer with the Secretary of State were provided with our letter of August 26th. The enclosed Certificate of City Clerk should be completed by filling in the various blanks. The changes in the boundaries, if any, need only be listed by title or other appropriate designation. I also assume there are no other obligations payable out of the revenues of the waterworks . i #2 Mr. Paul C. Jones 9-26-63 In order to complete our transcript we need the following items : (1) Certified copy of the minutes of regular meeting of March 4, 1963; (2) Affidavit of publication of the resolution calling the bond election, Resolution No. 1730; (3) Certified copy of the minutes of the regular meet- ing of May 6, 1963, showing adoption of Resolution 1769 and entry of Secretary's statement; (4) Certified copy of the minutes of regular meeting 4y of September 3, 1963, showing adoption of Resolutions Nos . , 1844 and 1848; (5) Affidavit of publication of the Notice Inviting Bids . Yours very truly, O'MELVENY & MYERS ! y DRH:mt �naldHodgman Enc. f �4��sT N9rfo � aC0 SECURITY FIRST NATIONAL BANK SAVINGS COMMERCIAL TRUST TRUST DEPARTMENT CORPORATE TRUST DIVISION 124 WEST FOURTH STREET MAILING ADDRESS- P.O.BOX 3546,TERMINAL ANNEX Los ANGELES,CALIFORNIA LOS ANGELES 54,CALIFORNIA September 17, 1963 Reference: C-6779 Mr. Doyle Miller, City Administrator City of Huntington Beach P. 0. Box 190 Huntington Beach, California Dear Mr. Miller: We were pleased to learn through Mr. Paul V. Phillips, Manager of our Huntington Beach Branch, that we are to be designated Fiscal Agent under the resolution creating your new Water Revenue Bonds. In this connection we should be furnished in due time with three copies of the following documents for our files and those of the Chicago and New York Paying Agents: 1. Certified copy of the resolution of the City Council authorizing the issuance of the bonds and providing the terms and conditions for the issuance thereof. 2. Certified copy of the resolution appointing this Bank Fiscal o Agent. �. 3,. Certified specimens' of the bonds. "4. Signed copies of the legal opinion of Messrs. O'Melveny & Myers. 5. Schedules showing the serial numbers of th bonds, interest rates, maturity dates, etc. 't„v`s"U't d �a 'jam`F�'E'r.� Prior to the issuance of the bonds we will be in touch with you to discuss in more detail our function as Fiscal Agent. We appreciate this additional opportunity to be of service to the City of Huntington Beach, and we look :forward to a long and pleasant rela- tionship. Since 1 oars, MH:bm Marshall Holden cc: Mr. Paul V. Phillips Vice President STONE & YOUNGBERG DANIEL STONE MUNICIPAL FINANCING CONSULTANTS RICHARD M.BARTLE - BENJAMIN J.BAUM EDWARD W.BURNETT DON M.DAVIS 1314 RUSS BUILDING DAVID E.HARTLEY RICHARD P.GROSS SAN FRANCISCO 4 PATRICK J.KAVANAUGH BARRY M.NEWMAN YUKON 1-1314 EDWIN A.WELLS,JR. EVERETT D.WILLIAMS August 27, 1963 I Mr. Doyle Miller, Administrative Officer City of Huntington Beach City Hall Huntington Beach, California Dear Doyle: Enclosed are seven copies of the galley proofs of the official statement. These should be distributed to.each councilman , with one copy each to I Jim Wheeler and yourself. We would appreciate yow- reading through the proofs and p4ssing along any comments or changes by a-telephone call Friday morning, A part of "The Enterprise" section entitled "Estimated Revenues, Expenses and Coverage Ratios,'" including Table 3, is not included in this set_ of proofs, but will be sent to you and Jim Wheeler later in the week. We hope you will be able to follow the copy and the proofs without too much difficulty. Very truly yours, STONE &,-YOUNGBERG Joseph J. Azzolino JJA:wl encl. RC.eM rLH W.sv'nw NT F'fa P. SAM MANGISM4 Pwrmcu J. V'i -191A G"ar W. p.UftuAfte August a?, 1963 '. Doyleminer, Administrative Officer City of ri Beach City Han Huntington Beach, California Pear Doyle: Enclosed are eeven copies of the galley ' of the official stoat .' These should be dUtributed to eoch counc man , Frith one copy each to Jim Wheeler and yourself. We wduld appreciate yoxg reading through the proofs and ppseing along any co to or changes by a,telophone call Friday morning. A pan of "The Enterpr1se" section entitled "Estimated Revenwa, Expenses and Coverage !,," including Fable 3, is neat included in this set of proofs, but will be sent to you and Jim Wheeler later in the week. We hope you will be able to follow the copy and the ifs without too much difficulty. Very truly yours, SMNE & YOUNC-BERG Joseph J. Azaolino JJAoWI i encl. i ✓ LAW OFFICES OF a 0 M ELVENY & MYERS BEVERLY HILLS OFFICE 433 SOUTH SPRING STREET 9601 WILSHIRE BOULEVARD BEVERLY HILLS LOS ANGELES 13 273-4111 620-II20 - .4]MLT RETURN gyp® CABLE ADDRESS��MOMS' August Ss CITYliCL 111�� i 26thOUR FILE NUMBER l 9 6 3 B-5425 CITY OF HUNTINGTON BEACH Mr. Paul C. Jones WATER REVENUE BONDS, 1963 City Cleric City Hall Huntington Beach, California Dear Mr. Jones: Looking forward to the next regular meeting of September 3rd, we enclose herewith the following documents: (1) Calendar for Bond Sale; and (2) Resolution of Sale (includin text of Notice Inviting Bids The resolution of issuance is being printed by Jeffries Banknote Company and printed copies of the resolu- tion will- be ordered from Jeffries and will be sent to' you under separate cover when the corrections have been agreed upon sometime this week. I am sending a copy of this fetter to Mr.' Ed Wells, of Stone & Youngberg, to remind him that any corrections .he has, as. well as the city's corrections, should be available by Wednesday or Thurs- day of this week so that.- we will have time to obtain the printed copies from Jeffries. { The Notice Inviting Bids included in the resolution of sale should be published in the HUNTINGTON BEACH NEVIS on the indicated date. Stone & Youngberg- has. requested that we ask you to order 600 copies of. the Notice Inviting 'Bids for their use in mailing to the bondbuyers . . These should ` . be prepared by the newspaper using the same type but should be made up on plain white 8-1/2" x 11" paper.f Please have the newspaper send us two copies of proof for our examina- Lion before the Notice Inviting Bids is published or printed. i f >< I I• E` . #2 Mr. Paul C. Jones 8-26-63 The facsimile signatures of theMayorr -and the City Treasurer will appear on the bonds . This will require a filing of their manual signatures with the Secretary of State. A memorandum covering this require- ment and forms to accomplish this filing are enclosed herewith. We are covering the fact that this filing has been made by a customary recital which appears in our Signature Certificate which we will furnish you at the time of delivery of the bonds. Yours very truly, OIMEL 8c MYER By DRH:mt nald R. Ho man Enc . cc: Mr. Ed Wells Stone & Youngberg Jeffries Banknote Co. ALBANY R. W. PRESSPRICH & CO. CABLE ADDRESS: BOSTON MEMBERS NEW YORK STOCK EXCHANGE "PRICHPRESS,NEW YORK" CH ICAGO MEMBERS MIDWEST STOCK EXCHANGE PHILADELPHIA INVESTMENTS 80 PINE STREET TELEPHONE HANOVER 2-1700 SAN FRANCISCO NEW YORK HONG KONG August 21 , 1963 Mr. Doyle Miller NEW YORK 5 City Administrator City Hall Huntington Beach California Re: $3,750,000 HUNTINGTON BEACH, CAL. Water Revenue Bonds Date of Sale: October 2, 1963 Sir: We would appreciate receiving two copies each of the Notice of Sale and Bid Form, together with the latest financial statement and any other pertinent data relating to the proposed sale of the above mentioned bonds. Very truly yours, R. W. PRESSPRICH & CO. �l 10A VV Walter W. Friend, Jr. ALBANY R. W. PRESSPRICH & Co. CAMLE ADDRESS' BOSTON NENGEAS NEW roan STOCK EXCHANGE PRIG HPRES S,NEW YORK" CHICAGO 04ENDEA5 —DWES' STOCK E+CHANGE PHILADELPH)A INVESTMENTS �O PINE STREET T GI.t-'r+fJNE r+n+JOVEN: /?G SAN FRANCISCO NEW YORK HONG KONG August 21 , 1963 Mr. Doyle Miller NEW YORK 5 City Administrator City Hall Huntington Beach California Re: $3 ,750,000 HUNTINGTON BEACH, CAL. Water Revenue Bonds Date of Sale: October 2, 1963 Sir: We would appreciate receiving two copies each of the Notice of Sale and Bid Form, together with the latest financial statement and any other pertinent data relating to the proposed sale of the above mentioned bonds. Fiery truly yours, R, W. PRESSPR I CIS & CO. U) 60A a Walter W. Friend, Jr. i August 9, 1962 j Stone & Youngberg Municipal Financing I:onsultants 1314 Russ building :pan Francisco 4, California Gentlemen Enclosed herewith Tease find executed copy of contract agreement between your firm and the City of Huntington Beach which was approved by the City Council at their regular meeting held on Monday, August 6. 1962. Sincerely yours, Paul C. Jones City Clerk CJ:ed Encs a STONE & YOUNGBERG DANIEL STONE MUNICIPAL FINANCING CONSULTANTS RICHARD M.BARTLE BENJAMIN J.BAUM EDWARD W.BURNETT DON M.DAVIS 1314 RUSS BUILDING DAVID E.HARTLEY RICHARD P.GROSS SAN FRANCISCO 4 PATRICK J.KAVANAUGH BARRY M.NEWMAN YUKON 1-1314 EDWIN A.WELLS,JR. EVERETT D.WILLIAMS August 7 , 1962 Mr. Doyle Miller Administrative Office City of Huntington Beach City Hall Huntington Beach, California Dear Mr. Doyle: In accordance with your discussions with our Mr. Bulot, we enclose herewith two copies of a proposed form of contract employing us as financing consultants in connection with your proposed water improvement project. If you find this contract to be in proper form, will you kindly have one copy of same executed by the proper officials and returned to us for file. We appreciate very much this opportunity of being of service to your city. Yours very truly, STONE & YOUNGBERG Don M. Davis DMD:mw encl: 2 copies of proposed form of contract OFFICIALS INGT� DOYLE MILLER RATFO �9 (�%jJ/�p� �/�J1� ADMINISTRATIVE OFFICER yCITY OF JItalt i iy/( l/Y f (/,f l/BRANDER D. CASTLE �`--- --- ASSISTANT ADMINISTRATOR .... -- ---- f�c„ Q ------------------ JAMES R. WHEELER O rF'�-T...ld'r. _ y F ;;-40 yCF = P. O. BOX 190 C A L I F O R N I A ENGINEER 1909+P ��OQ JAMES D. PLUNKETT COUNTY CITY ATTORNEY HOWARD ROBIDOUX March 1, 1963 POLICE CHIEF COUNCILMEN DELBERT G. HIGGINS ROBERT M. LAMBERT, MAYOR FIRE CHIEF ERNEST H. GISLER VINCENT G. MOORHOUSE JAKE R. STEWART LIFEGUARD CHIEF THOMAS H. WELCH LYNDON A. WELLS, SR. OLBUILIN C. CLRECTOR D BUILDING DIRECTOR CITY CLERK - WILLIS C. WARNER PAUL C. JONES PLANNING DIRECTOR TREASURER BETTY DIEKOFF The Honorable Mayor and City Council City of Huntington Beach, Re: Partial Payment under Stone and Youngberg Contract Honorable Sirs: The Cityst contract with Stone and Youngberg dated August 6th, 1962, states that they shall be paid $2, 500. 00 coon submission of their written report covering the finances of proposed water improvements. In as much as this report was accepted by the Council February 4th, the statement dated February 27th7 19637 is in order and payment is recommended. Sincerely, DoylefMiller City Administrator DM: s s STONE & YOUNGBERG DANIEL STONE MUNICIPAL FINANCING CONSULTANTS RICHARD M.BARTLE BENJAMIN J.BAUM EDWARD W.BURNETT DON M.DAVIS 1314 RUSS BUILDING DAVID E.HARTLEY RICHARD P.GROSS SAN FRANCISCO �L PATRICK J.KAVANAUGH BARRY M.NEWMAN YUKON 1-1314 EDWIN A.WELLS,JR. EVERETT D.WILLIAMS February 27, 1963 City of Huntington Beach City Hall Post Office Box 190 Huntington Beach, California Attention of Mr. Paul C. Jones, City Clerk Gentlemen: In accordance with the terms of our contract of employ- ment dated August 6, 1962, we enclose our statement showing the sum now due for financial consulting services rendered pur- suant to Paragraph 7 (a) of said contract. Would you kindly process this claim for payment in the usual manner. Yours very truly, STONE & YOUNGBERG L" k(�040� Don M. Davis DM D:er Encl. STONE & YOUNGBERG DANIEL STONE MUNICIPAL FINANCING CONSULTANTS RICHARD M.BARTLE BENJAMIN J.BAUM EDWARD W.BURNETT DON M.DAVIS 1314 R U S S BUILDING DAVID E.HARTLEY RICHARD P.GROSS SAN FRANCISCO 4 PATRICK J.KAVANAUGH Y I.JKON I-1314 BARRY M.NEWMAN EDWIN A.WELLS,JR. EVERETT D.WILLIAMS February 27, 1963 City of Huntington Beach Post Office Box 190 City Hall Huntington Beach, California For financial consulting services rendered pursuant to Paragraph 7 (a) of contract of employment dated August 6, 1962 . . . . . . . . . . . $2, 500. 00 i AGREEMENT FOR SALE OF HUNTINGTON BEACH DISTRICT WATER SYSTEM THIS AGREEMENT, made and entered into this day of , 1963, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation and political subdivision of the State of California (hereinafter referred to as the "City") and SOUTHERN CALIFORNIA WATER COMPANY, a California corporation (hereinafter referred to as the "Company") , W I T N E S S E T H• WHEREAS, the City desires to acquire and operate a municipal water system to serve the City and its inhabitants and to that end wishes to purchase the properties and facilities of the Company in the City of Huntington Beach; and WHEREAS, the City holds power of eminent domain: NOW, THEREFORE, for and in consideration of the mutual agreements herein contained, it is hereby agreed between the City and the Company as follows: 1. Upon and subject to the terms and conditions herein- after set forth, the Company agrees to sell and the City agrees to purchase all of the water production and distribution properties and facilities and all properties , franchises, water rights , operative rights and assets of every kind (except accounts receivable and cash and the real property hereinafter specifically excluded) com- prising the water system of the Company located within the territor- ial limits of the City of Huntington Beach, County of Orange, State of California, owned and operated by the Company as its so-called Huntington Beach District Water System, including, without limiting the generality of the foregoing, all operating and customer account records , maps and drawings, equipment, supplies, materials , the motor vehicles specifically described in Exhibit A attached hereto and hereby made a part hereof, all lands , easements and rights of way, and all physical properties and appurtenances thereto comprising said Hunt- ington Beach District Water System and including, without limiting the j -1- r generality of the foregoing, the real property specifically described in Exhibit B, which is attached hereto and hereby made a part hereof, but excluding the real property described in Exhibit C, which is attached hereto and made a part hereof. 2. The base purchase price shall be the sum of One Million Two Hundred Twenty-Five Thousand Dollars ($1,225,000) , ;representing the agreed valuation of said Huntington Beach District Water System as of January 1, 1963, to which there shall be added the Company' s cost of all additions , betterments and extensions , from January 1, 1963 to the Closing Date (except that the cost of such additions built pursuant to refund contracts , the liability of which is to be assumed by the City, shall not be added to the base price) , and from which there shall be deducted an amount equal to the accrued depreciation on the Huntington Beach. District Water System based on the Company' s usual accounting methods from January 1, 1963 to the Closing Date, and from which there shall be a further deduction of an amount equal to the depreciated book value of all property retired from service by the Company after January 1, 1962 and prior to the Closing Date . In no event, however, shall the base purchase price, adjusted as set forth above, be less than $1,225,000. The purchase price shall be paid by the City to the Company in cash upon the Closing Date on delivery to the City of a conveyance of the purchased properties . Real and personal property taxes, charges for power, pay- ments for water service by flat rate customers and unbilled charges for metered water service shall be adjusted as hereinafter provided in paragraphs 3, 7 and 8 hereof. 3. The purchased properties shall be conveyed to the City upon the Closing Date free and clear of all liens , encumbrances and liabilities, excepting only (a) the lien of property taxes for the then current fiscal year; (b) the obligations of the Company under all main extension agreements relating to the system to which the Company is a party; and (c) such other liens and encumbrances as , in the opinion of the City Attorney, shall not impair the usefulness or value of the purchased properties in utility operations . The Company shall deliver to the City on the Closing Date all deeds , bills of sale, -2- assignments and other documents required to effectuate transfer of title to the City. The Company at its expense shall procure and affix to the appropriate instrument of conveyance any stamps representing stamp taxes imposed upon the transfer. The Company shall cause to be issued to the City, at the Company' s expense, a policy of title insurance by a title insurance company satisfactory to the City in- suring title in the City to each parcel of real estate , other than easements described in-Exhibit B, free and clear of all liens, encumbrances and liabilities except said above mentioned liens , en- cumbrances and liabilities, such policy to be in the face amount of One Hundred Thousand Dollars ($100,000) . The Company shall .also furnish the City with a report of a title .insurance company as to any chattel mortgages or other liens of record against the purchased properties . Real and personal property taxes relating to the purchased properties shall be prorated as of the Closing Date. 4. It is believed by the parties that this transaction is not subject to California sales or use tax, but if any such tax is claimed or imposed by the State of California, the City agrees to assume all responsibility and expense in defending any such claim and to pay any tax found to be due . 5 . In accepting the conveyance of the properties compris- ing the Huntington Beach District Water System, the City expressly agrees to assume and perform the obligations of the Company under all main extension agreements relating to the system to which the Company is a party as of January 1, 1963 and in accepting payment of the purchase price for said properties , the Company expressly assigns to the City all of its rights in and under said extension agreements . Attached hereto as Exhibit D is a list showing the dates , original amounts and unpaid balances of all main extension agreements in effect as of January 1, 1963. The Company will supply the City at the Closing Date with an accounting of the deposits under said agreements , includ- ing the amounts thereof refunded, the amounts thereof remaining to be refunded and the amount of any unexpended portion thereof, together with copies of all main extension agreements pursuant to which such deposits were made . Refunds accrued during 1963, due April 1, 1964. are to be paid by the City. -3- 6. The Company shall pay over to the City upon the Closing Date the amount of any refundable deposits , including accrued interest, made by consumers to guarantee payment of bills. The City hereby agrees to assume all obligations of the Company to consumers in respect of said deposits . 7 . Charges for power purchased from Southern California Edison for use in connection with the Huntington Beach District Water System shall be prorated as of the Closing- Date. If appropriate arrangements can be made, such proration shall be made on the basis of meter readings taken on the Closing Date jointly by the City and the Company and, otherwise, in such equitable manner as may be agreed upon by the parties . 8. It is understood that all accounts receivable and unbilled revenues for water supplied to and including the Closing Date are excluded from the properties to be conveyed to the City. The City agrees that, without charge to the Company, it shall attempt to collect all bills for water service transmitted by the Company prior to the Closing Date and to .use such methods as are legally available to .the City to enforce collection of such bills, other than the in- stitution of litigation, provided the City shall not be responsible to the Company for the non-payment of such bills, or the amount thereof, if such collection attempts are unsuccessful. The City shall be entitled to reveive all amounts paid by flat rate customers which are allocable to water service furnished after the Closing Date. The Company shall pay to the City within fifteen (15) days after the Closing Date and from time to time there- after as received such portion of any amounts collected by the Company from flat rate customers billed by the Company prior to the Closing Date as is allocable to water service furnished after the Closing Date. As and when the City collects any bills from flat rate customers, the City shall be entitled to retain such portion as is allocable to service furnished after the Closing Date and shall pay over the balance to the Company. All unfilled revenues for water service to metered c&stomers shall be prorated as of the Closing Date upon the basis of such portion of a thirty (30) day month as shall -4- i have elapsed between the last meter reading date for which a bill has been transmitted and the Closing Date. Remittances shall be made to the Company by the City as collections are made . 9. All risk of loss or injury or destruction to any and all of the properties covered by this agreement shall be upon the Company at all times until the Closing Date and in the event of any such loss , injury or destruction, the purchase price shall be appropriately adjusted, but the Company shall be entitled to retain any insurance proceeds or claims against an insurance carrier re- lating to any such loss, injury or destruction. 10. At all times prior to the - Closing Date, the Company shall continue such usual upkeep, maintenance and repair of the properties covered by this agreement as it would if it were to con- tinue in ownership and operation of the same and any and all expense incurred by the Company in so doing, together with any and all operational expenses incurred in connection with said properties prior to the Closing Date, shall be borne by the Company. 11 . Between the date of this agreement and the Closing Date, the Company shall submit to the .City for approval any expend- itures in excess of Fifteen Hundred Dollars ($1500) before incurring the same or incurring obligations therefor, for any proposed addition, betterment or extension to said Huntington Beach District Water System but no such approval shall be required for expenditures for ordinary repairs and maintenance or expenditures that may be required to comply with the Company's regularly filed utility rules and regulations or any expenditures of Fifteen Hundred Dollars ($1500) or less for any addition, betterment or extension. 12. If between the date of this agreement and the Closing Date, the City shall make any street improvements or construct any public projects which require the Company to reconstruct or relocate any part of its water system, the City shall reimburse the Company for the entire cost of such reconstruction or relocation by adding such cost to the purchase price. -5- 13. The City agrees upon the Closing Date to undertake the distribution of water to all consumers then served by the Company's Huntington Beach District Water System and the City shall assume as of that date any and all public service obligations now resting upon the Company's Huntington Beach District Water System, subject, however, to the right of the City to fix rates and determine conditions of service as a municipal corporation engaged in the public supply of water. 14. This agreement is hereby expressly made subject to the condition that the sale and transfer of the properties comprising the said Huntington Beach District Water System, upon the terms and conditions herein provided, shall be approved and authorized by the Public Utilities Commission of the State of California and this agree- ment shall not become effective until such approval and authorization shall have been obtained. It is understood that the purchase price herein provided is to be obtained by the City by means of the issuance and sale of water revenue bonds for the acquisition and improvement of a municipal water system which were authorized by the electorate of the City of Huntington Beach on April 30, 1963. to make application to the Public Utilities Commission for appropriate authorization to consummate this transaction and the City agrees to join in said application if requested by the Company. The City agrees promptly after the Company shall have obtained such authorization from the Public Utilities Commission to take all proceedings necessary to offer for sale and agrees to offer for sale a sufficient amount of revenue bonds to provide funds on the Closing Date for the purchase of said water system. The City's obligations hereunder are expressly subject to the conditional upon the issuance and sale of said bonds . 15 . The Closing Date shall be such date as may be agreed upon in writing between the City and the Company at any time subsequent to the date upon which appropriate authorization of the Public Utilit- ies Commission is obtained, not later, however, than November 1, 1963, unless the parties agree in writing to extend the period for determin- ation of a Closing Date in order to permit the City to complete arrangements to finance this purchase. -6- 16 . The Company agrees that while this agreement is in effect, the Company will not initiate any proceedings to change the rates applicable in the Huntington Beach District Water System and will not sell or otherwise dispose of any of the properties which it has hereby contracted to sell to the City. 17 . All notices, demands or other writings in this agreement provided to be given or made or sent or which may be given or made .or sent by the parties hereto shall be deemed to have been fully given or made or sent when made in writing and deposited in the United States mail addressed as follows : To Company: 11911 S . Vermont Avenue Los Angeles, California To City: City Council City of Huntington Beach City Hall Huntington Beach, California The address to which any notice, demand or other writing may be given or made or sent to any party may be changed upon written notice given by such party as above . provided. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by persons thereunto duly authorized, the day and year first above written. CITY OF HUNTINGTON BEACH By Its SOUTHERN CALIFORNIA WATER COMPANY By Its -7- Stone & Youngberg May 22, 196-3 PURCHASE OF SoliTHERN CALIFORNIA WATER COMPANY HUNTING90H BEACH SYS-l"EM .1. R1Lrchas' ._zELCe The following piirchase price has been agreed upon by the barga.Wng committee and is subject to the approval of the City Council, the Board of Directors of the Company, and the Public Uldl;rdes Commission,* a. The base price, free and clear of all Incumbrances (except certain obliga- tions subject to refund), is $1,225,000.00 taken as of 1/1/63 and is sub- ject to the following adjustments: 1) The cost of add.:,Uon� to the system from 1/1/63 to the date of closing to be added t6 base price. 2) Accrued depreciation from 1/l/63 to the date of closing of the entire. plant Is to be deducted from the adjusted base price but In no everrk shall %he final adjusted price be less than $1,225,000.00. b. the zalvances subject to refund (estimated at $94,483.97 are to be assumed by fiche City as of 1/1/63. Refunds accrued during 1963, due April 1, 1964, are to be paid by Vie City. (1) Estimated present worth of revenue liability $3i,849. 2'he purchase price will Include all real property and facAlAties owned by the cuimpany within HUWUnT*on Beach together with all system and customer records 2. Rev ues and ensues The purchase price Is self supporting under revenue bonding (at exist- Ing city rates - which will require a reductions a. Revenues ompan - ates City Rakps 126 1964 1 R M Av zes COWL cust. 6 2 2 10 2 "750 Uo a Rev. Com% 130,617 127 ,152 128,885 1330500 $104,300 (_22%Q Indus. 36,708 33,307 35"007 36,000 32'500 -10%1' Pub. Ath. 1511191 13,089 14,140 14,300 11,400 C-20%1 Misc. L.94A __g)ZZ 10 8 200__gA_ __RAE A_ 190,461 181,725 186,093. 192.000 $156,400 Use $160,000 P chase ®g So. aliso eater Co. ®2- Ailay 22, 1.96S ba Revenue Bonding Requirements (as a pare of first Issue) Purchase Price $1,22S o 000 Bond Reserve 65,000 Encidentals $1,310,000 c. Revenues and Expenses Revenue (1964-Ist year) $160,000 Enpenses (0 & M) $70,000 Bond Se ce (Average)Q1) 71,2`000 Refunds P n 6 00 I48R800 Surplus $ 11,200 �1) On $1,310,000 @ 3-1./2% for 30 yeas. 30 Ccaglso �fcl?ase M. a. Replacement Cost Probable replacemen'-, cost new leas accrued depreciation shoe in Table l which also shwvs now capital additions since 1928 bo Other Sales (Refer to' page 17 of Acquisition Report) (Use $1,270,000, adjusted for refunds.) 1) Mce per customer (Power Plant as one customer) 11,270,000 _ $9&0 2,82S 2) RaLio to depreciated plant 11,,272_,000 = 136% $933,000 HJ.NTING'1ON BEACH DIST-RI T SYSTEM Trended RepyoductAon Cost Now Less Depreciation Analyal! .-.Total RONILD 193Z. 30 p 432 60,864 (1) 1932. 6h032 1i,461 1933. 6,846 14,961 1934 7,04 13,038 1935 12,652 22,,774 1936 15a753 25,520 1937 6m452 10,646 1933 26,043 44,794 1939 20,509 36,094 1940 2,362 4,063 1941 6,264 10,524 1942 14,�42 24,140 1943 3,4�9 51725 1944 4,779 81029 1945 5,935 91199 1946 9d909 11,938 1947 36,797 44,746 1948 2V,616 34,520 1949 142,539 172,470 1950 59,031 69,090 1951 49,149 571504 1952 86,26i 99,339 1953 52,.787 591121 1954 1.6,266 17,693 1955 34,224 37,304 1956 93,407 99,946 1957 33,443 40,365 1959 63,970 65,889 1959 77,670 79,223 1960 76,991 77,650 1961 27,847 1962 3q5 9 is 379 Total $1 ,145,267 RONLD ` otal Additlons Laud 19 62 - 31 k 343 x 3 _ 95 0 529 Indicated RC14LD Values �1� AdJusted for ratimme is DRAFT - 7/15/63 1 AGRE MT FOR SALE OF IMNGN IM &IT WAS SYSIM 2 3 4 5 6 , 7 8 TRIS AGREMMT, made and enter into as of this 9 day of 1963, by and: between the 10 CITY OF HMMNMN BEACH.. a. nanicipal corporation and 11 political subdivision 4r the ,Mate or California (the 12 "City") and SOV=fW CALMRNTA WATM COMPANY, a Cal i- 13 forma corporation (the "Company"),, 14 15 16 n 18 19 2.01 Compenyle Service Within the City 20 21 The CompuW servesportion* of the City with 22 water aervi a as a public utility regulated by the Commission 23 and has eonstructedp maintained and Installed water agate 24 ,fac3ilitleso both within and without the bou'ndarios of the 25 City In connection with auoh service. 26 27 28 29 30 DWG`. 1 2.02 City*e Plan for Municipal Ownership 2 3 The City operates a municipal water system which 4 presently serves portions of the City,, and City has de- 5 ter mined that no a matter of public policy all portions 6 of the City should receive water service from facilities 7 owned by the City, and to that end, either by me ne. of con- 8 demnation or by negotiated purchase, proposes to acquire 9 the properties and facilities of the Company in the City 10 and such properties and facilities of the Company In 11 territory adjacent to the City as are an Integral pert of 12 the facilities of Company that are used to render iervice 13 in the City. 14 15 16 2.0.10 Basis of Agreement 17 18 The parties share the belief that it Is desirable 19 to avoid they expense, delay and other difficulties Bch 20 would revalt from proceedings by the City to condemn said 21 properties and facilities of the Company and have agreed to 22 do so by entering Into thie Agreement. 23 24 25 26 27 28 29 30 . DRAFT, 5L63 ZAL 1 2.04 Water Revenue Bands 2 3 In anticipation of the further development of 4 C.ity's water serer facilities, including acquisition of 5 the Companytis Water System, on April 30, 1963.. electors 6 of the City approves the i.ssuame and sale of water revenue 7 bonds. 8 9 10 2.05 Definitions 11 12 (a) Water §Vtgg. to Naater System" is the 13 property to be conveyed pursuant to this Agreement, 14 and it consists of the real property described 3n 15 Exhibit A, the personal property identified in 16 Exhibit BO all of the property and facilities of 17 the Company., real or pereonal, used by the Company 18 i the perfortnerice of its duties to the public 19 located within the City or located outside the City 20 and physic€ l ly cormected to and operated as as unit 21 with such facilities within the City, and, at the 22 option or the any, either originals or copies 23 of all operating records and maps and customer 24 aceount records pertaining to such facilities,, all 25 equipment and rupplies located or stored on any of 26 the real property described in Exhibit A on the 27 Closing Date, extepting,, however,, the real property 28 29 30 ZFT - YZ151 1 described in Exhibit C. accounts receivable and 2 revenues attributable to service rendered prior 3 to the Closing Date, whether bills for such 4 sevirice are rendered before or after the Closing 5 Date. 6 7 b LuMWe Prue, The "Puxchase Price" 8 is the water of $1,225,OW or an aunt 9 detemined as follows% 10 11 (i) 1,22 , 0 , PLUA 12 13 (ii) The cost of all property added to the 14 Water System after December 31, 1 2, 15 prior to the Closing Dates, leas the sum of 16 17 110 The amount of all advances for construction 18 received by the Company after December 31,, 19 1 62, and prior to the Closing Date, and 20 21 (10 a dollar a count of depreciation, as 22 determined by the Companyls normal methods 23 of recording depreciation expense.. accruinLr 24 with respect to the taster Syetem after 25 member 31, 1962, and prior to than Closing 26 Date, and 27 28 29 30 4. IW 1 v) Other than With respect to property retired 3 public projects of the 0it , the depreciated 4 book cost as of December 31, 19,62, of all 5 property a-hl e owned by the CoWany and 6 retired from service prior to the Clueing 7 Mto which would have been, if not so re- 8 tared, a., part of the Water System. 9 11 11 10 or such earlier date as way be agreed by the 12 partied p providedj, that if the conditions, precedent to 13 the obligation of the Company etatedIn Section 5.01 14 have not then e metj suohdate my be extendedat 15 the option of the Company to a date not later than 16 one hundred eighty (180) days 4. ter the order of the 17 Conwilssion authorizing the CoMany to perform this 18 Aereement shall have become final. 19 20 (d) .:� :c * The "Closing" in the ceremony 21 on the Closing Dates, at whUh all setione provided 22 herein then to occur will be performed. 'A* Closing 23 ill tAke place at to'clock A.M., Pacific 24 1 ,11-Mandard TIm, at 25 26 27 28 29 30 M.AF. - 2 Extension AGM pats" Are the agreements under 3 which the any to liable for reflunds of advances 4 for conatniot on which agreementsentered into 5 by the CoMomy pursuant to its rules and regulations 6 on file with the Covenission 4nd are identified in 7 Exhiblt D, andt in addition., all such agreements 8 entered into by the Company after December 31, 1962, 9 and prior to the Closine Date. 10 11 ssi ►n. "Commission" is the 12 Public Utilities Comission of the State of 13 California. 14 15 is Indenture. e, "Company's 16 :Indenture" is that certain Indenture dated May i, 17 1947,, e en the CoMany and Bank of America 18 National t and Savings Association, as 041ruetee 19 recorded,, smong other places, in Book 1522, 20 , of Official Records of Orange County: 21 California,* and all Indentures entered into by the 22 Company supplementing,* confirming and amendingsaid 23 Inde-nture dated May 1, 1947. 24 25 26 27 28 29 30 1 . a Accounting Deteinninations 2 3 All determinations of capital cost, expense, 4 depreciation and other Matters relating to the books and 5 records of the Company are to be made in areordance with the 6 Comission's Uniform System of Aceounts for Class A Vater 7 Utilities. 9 10 2.07 Pro-Ration 11 12 All expenses, taxes, assessments and revenues 13 shall be determined to the extent possible by inspection, 14 readins and the most precise feasible, methoid. Where 15 exact d teminati n Is UTpracticable pro-ration shall 16 be utilized on the bads Of thirty-day months. 17 18 19 20 21 22 23 24 25 26 27 28 29 30 2 COV-X 14T a OF THE COMPANY 3 4 5 3.01 11b Sell, Water System 6 7 The Company promiees to sell the Ulater Syrtem to 8 the City on the Closing Date and concurrently to assigr all 9 of the Company's rights under the Main E t, n ion Agmem nt 10 to the city. 11 12 13 '4.02 To provide Title: Insurance 14 15 The Company promises to provide to City A polley 16 r policies of title invurance in the form of the C TA 17 Standard FormOwner's Policy with aggrepate liability ity not 18 In excess of showing title to the land,, 19 anther than water rlGts, described under the heading 20 ",Pee" In Exblblt A vested in City subject only to 21 22 (a) the lien of property taxev for the ten 23 current fiscal yearl and 24 25 (b) such other Ilene and encumbrances at co 26 not reneonably Impair the usefulness or value of 27 each properties in utility op ratione . 28 29 30 V-01AFT a 3,03 To Pay stamp 7'axes 2 3 The Company Promises to pay all 3tamp tax,es imposed 4 upon the conveyan4e of the water System. 5 6 7 3.04 "Tro twlivar all Refundable Deposits 8 9 The Company promises to pay over to the, City 10 upon the Closing to the amount of any refundable depooltss 11 Including accrued interestj, made by customers to Suarantee 12 payments of bills* 13 14 15 3.05 To Pad All ses and Taxes Accruing 16 Prior to Closing Date 17 18 The Company prorrUses for the sole benefit of 19 City that it will pay all expen of maintenance, operation 20 and repair and real and personal property taxes and assess- 21 ment"s associatod, with the ownership, operation and maintenance 22 of the -water systan. prior to the Closing Date, 23 24 25 3. '"Zo Pay Over Post-Musing Revenues 26 27 Me corap2r'y promi"s to pay to the City WIUhIn 28 fifteen (15) days after the Closlr4 Date and from time to 29 30 Me= "" 14 i }II t 4 1 tlzethart4ftOr as reoeived suoh portion. *,f art; amounts { 2 oolleeted by tho CmPany t flat rats oustomers, bIlled 3 y the Company prior to the ClosInS Date as is allo*able 4 to servicefurnishafter the ClosIrg Date. � 5 i 61 7 1 �4, a the for y I' s 1 1 91 The Cappany Prmiststhat after the date hereof' 10 and prior o tho Closing Dote, the Company shall continue its 11 ` sl t4pkeep, maintenanoe and repair of the Voter system 12 sn4 and and all ; ' 3 incurred the Company In so doing 1,3 shall be boryke by the Cm- pany, 14 1 15 I ! 16 3,08 To Subrdt Certain Water System 17 Additions for Approval ! 18 19 . he m fix* * that art*r the date or this - I Agree- 20 merit and before the Closing, D + o, It will submit to the City for 21 approval any expenOlture in sows of One Thousand rivee 22 1, 0 for any single addition, betterment or extension 23 before rourrI the same or Inti4rring obligotlons therefor, for 24 any Apr* sad s4dition,, betterment or extension to the said Water 25 I System but do such approval 1 e re uir d for expenditures 26 for ordinary repair* and maUtenante or expenditures that way to 271 requlred to comply 28 � rules and, regalations or any oxpenditures of' One Thousand Pi v 29 Hundred il s 1 .- r less for "y alngle a4ditloa,, 30 batterment or extension. i bA -�-l� ' ii I l ' S I 2 3 Tho Ony promises that after the date hereof 4 and prior* to ". posing Mosing Date It will not initiate any pro- i 5 eoeftngs to ralse its rates for water i applicable in 6 the Huntington o 3istrut. 7 8 9 3#10 ftrthOrOUr 10 11 The CoMany pr*mlsea to deliver to the City o 12 the Closing Date all deed*, bills f saleg assigrMents 13 other 4*oumonts required to effectuate transfer title 14 f the at yo the City. 15 r 16 17 3.11 To Apply to the Cwmission 18 19 The Oftpany agrees to make application to the 20 Comisalon for appropriate authorization to ooumote this 21 t r on 22 i 23 24 25 26 27 28 29 30 i I r III RAFT t i IV i 1 2 OOVM I 3 5 i 6 The City promises to pay the hide P 7 the Cwwpary on V,,,he Closing Date. f�f 8 9 10 4#02 'To P"vide Service to th4 PublioI i 11 12 The City promises that upon and after the Closing 13 Date, It will ondortake the distribution of water to all con- � 14 I sumors then served by the Water System ando assame as of, that 15 date any and all pubilt sorvloelli o ans now resting sing I 16 the parry as a result of its ownorstdp and operation of the 6 17 Water System,,subject# howevor, to the sight of the City to � 18 MY, rates and determine *ondltiona of service as a s u ie ps I 19 oorpor#tlon engaged in the publIo supply of water. � 20 21 M 22 4.03 To Offer Bonds for Sale ' 23 I 24 The City promises that not mro thensixty. days, i 1 25 after the Company, sholl have obtained the aeth rizat on from tho 26 Comission referred Uo in Se o -01* it will offer for soloi 27 soffleiant prIncipal mount or revenue o provide fads on tto 28 Closings for the purobaso of the, Water Sys Systea In acoordance 29 with this a 30 I i f 1 AL 1 14.04 To Portorm Main Extension Agreements � 2 3 City prmines, to assume ,'axed perform ell obli- 4 ptions of Ito Company purauant to the gain Hxten3ionAgreements. 5 .*A p o any Rules andl atlons of tho Comission ! 6 with ''eta o the depoalts raftrrad to in goatioo3.04. 7 8 9 4,0ri To Dsere Sales Tax Liability I 10 11 Xt Is believed by the peruse, that this transaction { 12 Is not subject 'to Cali t sal or use "fax,, but AT any sui t, 13 tox1a elaivied or i y the State of Callfornle, the City 14 s, to statme all responolb-11.1ty and expense Un det 15 arty such clalm and to pay any tax fo=d to be d 16 17 18 4.06 To Attempt Collection of Pro-ClosingI 19 Revenues and to Psy Over Collect Lone 20 21 The Olty p that, without o the Compsmyo 22 I it 4hall atteuVt to oolleat all b l a renftred by the Owpany 23 prior o she Closing Date -axed to use such Methods, as are 24 legally available to the City to enforce collection of bills � 25 rendered by thoCity to gusto :is, of the other than the 26 a hullon of litleations provided ht City Mall not be 27 responsible the any for the notVayment of such Miles 28 or the - u h rs Ir saga zoll atl*n attompts are 29 30 I 13. . 1 1 As and when the Cltr collectsany bills from, l +� j I 21 rite customers,, the City shall be entitledretain each Closing3 portion as in alloaable to sorvioe furnished after, the 4 � Date and shall pay over the ba-lanoo to the ; * The el 7 t 51 first bill to all customers ro-aelving water servUe through � 6 motors, shall be based upon tho last zetor reading made b 7 , the CoWony# and amounts collootedy the City and all suoh 8 i bills *o, b4sedupon any reading prior to the Closing Date sholl 4 9 ' be Prorrateda *f the ClosingDate upon the basin of such ` 10 portion f a thirty (30) day month as shall have elapsed I 11 between the last motor reading date ftr which a bill has been f 12 transmitted an4 the Closing Date* Aomittances shall be made 13 o the Oompany by the City as #ollootl s are 14 15 l } 16 i 4.07 To Join In Appliestion to the Commission, 17 18 The CIty promises at its expense to join with 19 she any $ at the request or the icompany,* In, tiling and 20 prosecuting an appliostion to the Commission to su i ie the 21 CoVaily to porrormthis Agreemont. 22 23 i 24 25 , 26 1 I 27 28 f 29 30 i 14 II 1 1 2 ► 3 4 5.01 To OmpanyfsBaal 5I 6 The Obligations Of the 004wany pis o sootionsi 7 .01* 3.0 s 3.03* 3,04 OrA, 3,10 are sabject to the fallowing 9 10 ( and transfer of the properties om- 11 i . * Water y t ,, upon the t and 00-nditions 12 and at the prioe heroun. pro lde ,, shall have been 13 approve and au-uhor1z*d by the Comdaston and no o` i- 14 gation of the Comp hereunder which is sabjeot to any 15 reqttirexent of love that It rezoive prior p royal 4nd4 16 authorlzatlon of' the Commission shall b000me afreet1ve 17 . su h approval and authorization shall have been o 18 19 20 b Porfo City of Uie oovenunts set 21 forth In sootions 4.oi, 4.03 and 4.o7. 22 1 23 Receipt on the Closing Wto of an1 24 opl,nion dated that d8te of the City Attorney o I 25 he CIty In form and substance satisfactory to � 26 .sal for the ConVany to the offoot that City can 27 lawfully sequina and operate the Water S s om upon the 28 terms Ond oondItionsd for the oonsidoration provided 29 Ir this Agreement. 30 ' i i i j 1 d The Company have obtained from Bank of 2 AvIerloo VotwlonalTrot and Savings A4soolsttion,, as 3 Trustee, a release f the Water Systex from the lien 4 f the ps *s Inftnture. 5 6 75.02 To Ciyfx Purchase I 9 'rho obligations of the City are subject to the 10 ft tip precadeot th4t; f 11 12 The water revenue, bongs referred to In 13 '� S otion 4.03 be sold in an, amounte4ual to the 14 Purchase PrIee. at not less than par value. 15 I 16 17 18 19 20 21 22 23 24 25 26 27 { 28 I I 29 i 30 i f16, jlD R AFT ,, I i 1 I VX 2 , MASON&ANSOM AND PROCMAL 3I 4 �' .. 1 Notices and Dexanda i t i 5 � 6 All notioe*o demands or other writings in this Agreement ! 7 provided to be given or made or sent or wh1ch may be giverm or made l s I` or sent by the parties hereto *hall be deemed to have boon full 9 I� given or made or sent when made In writing and deposited in the � I� 10 i United States mail addressed as foll wa t 11 �� 12 TOCompany: Southern Oulifornia Water CoMany si 11 South Vermont Avenue � 13 s Angeles 44# California I Attentlont Philip F. welsh, 14 Prs8id"t j 15 To 01tys City Council City of Huntington Sssch 16 I t e I I City I 17 Huntington untin,, ton ftsahp Californ I 11 18 II The address to which any notice, dmand or other writing may 1 19to given or wads or seat to any party way be changed upon written i 20 ! notioe given by such party as above provided, 21 22 II IN °FIT S 'WRMSOFjp the parties hereto have caused this � 23 �I Agreement to be o"e*ut d W persons th reunto duly authorized,, 24 �' the day sAd yosr First above written, x� apt r� 25 11 CITY Op =X dTO)( BEACH I 26 ; 27 its 28 29 �`� 30 ` B ! President II I 1 � 17 II �.T "& l) Fee Lan4g$ inolude statemnt as to water rights. (2) Easements and Rights of Warr. I A HMI A l autiosbatnx sod;: # madlininvr7 , t orlp l or the ro- l property oot being i i I I I I I i RIBI T Ci i A-MOO-At :' Of Uouptl Itmount to of Some aold Addroam *A.'s adjiustod pursuant to Afire i FINANCING WATER SYSTEM IMPROVEMENTS CITY OF HUNTINGTON BEACH CITY COUNCIL Robert M. Lambert, Mayor Ernest H. Gisler Thomas H. Welch Jake R. Stewart Lyndon A. Wells, Sr. Doyle Miller, Administrative Officer James D. Plunkett, City Attorney James R. Wheeler, City Engineer February 1963 STONE & YOUNGBERG Municipal Financing Consultants San Francisco Los Angeles STONE & YOUNGBERG DANIEL STONE MUNICIPAL FINANCING CONSULTANTS RICHARD M.BARTLE BENJAMIN J.BAUM EDWARD W.BURNETT DON M.DAVIS 1314 RUSS BUILDING DAVIE) E.HARTLEY RICHARD P.GROSS SAN FRANCISC.•O 4 PATRICK J.KAVANAUGH BARRY M.NEWMAN YUKON 1-1314 EDWIN A.WELLS,JR. EVERETT D.WILLIAMS February 4, 1963 The Honorable City Council City of Huntington Beach, City Hall Huntington Beach, California Attention: Mr. Doyle Miller, Administrative Officer Gentlemen: We are pleased to present our report on the feasibility of financing the proposed water system improvements for the City of Huntington Beach . Our study has been based upon the waterworks project prepared by your engineer. Our report includes a review of the proposed waterworks development pro- gram for the next three years . Our study has also included an estimate of future water revenues and expenses based on projections made by your city engineer through fiscal year 1964/65 . Our findings indicate that the city can equitably finance construction of the proposed facilities . We recommend that the City Council authorize the issuance of $4, 200, 000 of revenue bonds for the needed improvements . We have recommended the issuance of revenue bonds to pay for the improvements , because the improve- ments can be financed entirely through revenues from the water system without re- quiring or pledging the use of property taxes . We wish to acknowledge the cooperation and assistance given us in the preparation of this report by Mr. Doyle Miller, Administrative Officer and Mr.James R. Wheeler, City Engineer. If there are any questions, please do not hesitate to contact us . We stand .'' ready to perform such additional services as you may direct in connection with the financing of your water project. • Very truly yours, STONE & YOUNGBERG APPROVED: Edwin A. Wells,. ,Jr. Don M. Davis ose h Azzol o JJA:rc J p J TABLE OF CONTENTS Page INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . 1 THE PROJECT . . . . . . . 0 2 Sources of Supply Existing Facilities Description of Proposed Improvements Estimated Project Costs Nonproject Costs CITY AND WATER DEPARTMENT DATA . . . . . . . . . . . . . . 6 History and Organization Municipal Receipts and Expenditures Outstanding Water Bonds Service Area and Population Estimated Future Population and Services Water Rates Monthly Water Sales Comparison of Water Rates and Billing Analyses Revenues and Expenses FINANCINGMETHODS . . . . . . . . . . . . . . . . . . . . 16 Revenue Bonds General Obligation Bonds RECOMMENDED FINANCING PROGRAM . . . . . . . . . . . . . 20 Method of Financing Bond Authorization Composite Maturity Schedule Estimated Revenue and Expenses Required Bond Service Coverage CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . 23 TABLES Table 1 - Estimated Water Project Costs . . . . 5 Table 2 - Summary of Municipal Receipts and Expenditures 7 Table 3 - City Growth . . . . . . . . . . . . . . 9 Table 4 - Present Water Rates . . . . . . . . . . . 10 Table 5 - Average Monthly Water Sales . . . . . . 11 Table 6 - Comparisons of Water Rates . . . . . . . . a 13 Table 7 - Water Department Revenues and Expenses . . . . . . . . 15 Table 8 -- Estimated Bond Service . . . . . . . . . . . . . . . . 21 Table 9 - Estimated Revenues, Expenses and Coverage Ratios . . . . 22 re[ s r M I w 1u��o�J❑� r- o������oao � aA�=MI 000�00000a . c 121 GCE ' b C I T- A, O i X11 i o W Y 4 I 'Wil ��OOOOOppO�Op� �ouu.�uo p0 �4Q e Y 3 1 � r CITY OF HUNTINGTON BEACH Water BY—. CiU,B.—n V -- Proposed Faetlers 4� ��������1 Maln Extenalona 7, Reservolra � ' Y Stone A Youngbeq FebrverY 1963 INTRODUCTION The City of Huntington Beach covers an area of 25 square miles in northwestern Orange County. It is now experiencing a population boom comparable to what has previously occurred in other parts of Orange County. From a population of approximately 11 , 500 in April 1960, the city had grown to an estimated 37, 646 in January 1963 . This growth trend is expected to continue over the next few years since the building of new housing tracts within the city limits shows little sign of declining. The older established portion of the city is served by a private water utility, the Southern California Water Company, which had approxi- mately 2, 800 customers in the city at the end of 1961 . However, the rapid construction of a great number of homes in the outlying undeveloped sec- tions of the city without an adequate source or supplier of water has re- quired that the city itself provide water services to its newly developed areas . Consequently, the city began water service in early 1960 to some 200 initial customers . The city financed construction of its existing system through an $860, 000 general obligation bond issue approved by the voters in 1955 and through acreage fees on new subdivision construction. However, with its water system now grown to approximately 6, 600 services and expected to continue its rapid rate of increase in the foresee- able future, the city now finds it necessary to embark on a large scale de- velopment program to expand the supply, distribution and storage facilities of its water system. The City Council retained the firm of Stone and Youngberg in August 1962 to determine the financial feasibility of the proposed improvements recommended by the city engineering and water department staffs and to recommend an economical and equitable method of financing their costs . This report presents the consultant's findings and recommendations regard- ing the financing of the proposed water improvement project. -1- THE PROJECT SOURCES OF SUPPLY The City of Huntington Beach is included in the Orange County Municipal Water District, which includes most of north and central Orange County, except the cities of Anaheim, Fullerton and Santa Ana. The Orange County Municipal Water District in turn is a member agency of the Metro- politan Water District, and is entitled to receive MWD water and distribute it through constituent agencies, including Huntington Beach. . Five such agencies in northwesternand north central Orange County, the cities of Huntington Beach, Seal Beach, Garden Grove and Westminster and the Orange County Water Works District No. 5, are also members of the West Orange County Water Board. The Board was formed to coordinate the efforts of these agencies with respect to the extension of MWD facilities in this area. The Board members are presently served from the MWD West Orange County Feeder and extension which runs a distance of 13 miles south and east of the Los Angeles County line, and which has a capacity ranging from 50 to 100 cubic feet per second. The Board is now making engineering studies of a second West Orange County Feeder. Construction of the new transmission line is included in the project described later in this section. Another source of supply that is available to the City of Huntington Beach is the East Orange County Feeder No. 2 . This connection to the MWD lower feeder will carry water from the Yorba Linda area to the Irvine Ranch Water District Reservoir. From that point a transmission line has been pro- posed as a joint project of the Costa Mesa County Water District and the City of Huntington Beach. EXISTING FACILITIES The city now serves approximately 6, 600 customers, about 98% of which have 5/8 x 3/4 inch meters. The major source of water supply is from the West Orange County Feeder No. 1 of the Metropolitan Water District, in which the city has capacity rights of 10.25 cubic feet per second. Usage from this source has been as high as 9 cubic feet per second. A second water source is the recently completed city well, which has a capacity of -2- approximately 1,200 gallons per minute. However, the possibility of addi- tional potable ground water supplies within the city's service area is slight because of topographical considerations; therefore, the city must seek additional capacity rights in existing and proposed MWD connections to increase its available water supply. Existing storage facilities consist of a 1, 000, 000 gallon reservoir. This capacity will be expanded to 3,000,000 gallons during the current fiscal year. However, further expansion to 5,000, 000 gallon capacity, and construction of another 5,000, 000 gallon storage capacity are necessary to meet fire protection and emergency needs within the next few years . The water distribution system consists of about 500, 000 feet of pipe- line, which is predominantly of 6 inch or larger size. Since all of this has been installed within the last three years it is in good condition. DESCRIPTION OF PROPOSED IMPROVEMENTS The major improvements proposed for construction and development in the next three years include: 1 . Construction by Metropolitan Water District of the East Orange County Feeder No. 2 to the Irvine Ranch Water District. The city has already deposited $502 , 000 with the Orange County Municipal Water District for capacity rights of 5 cubic feet per second. The city may use these funds for purchase of capacity in the Irvine Ranch Reservoir. Under design is a 6-mile transmission line from the proposed Irvine Reservoir to the Huntington Beach city limits . The city will share the cost of this line with the Costa Mesa County Water District. The city's share of the project cost is estimated at $940 ,000. 2. Construction of the West Orange County Feeder No. 2 trans- mission line. This will carry Metropolitan Water District ` water to the member agencies of the West Orange County Water Board. The city will pay approximately $1, 125,000 for capacity rights of 20 cubic feet per second in the line. Engineering studies for the project have been recently author- ized, and construction is expected to be completed in two years. 3. Interconnection of the existing city system with Irvine Reservoir transmission line. This would occur in 1964/65. Estimated total cost is $280,000. -3- 4. Construction of Reservoir Hill 16-inch extension and 12-inch Coast loop. Progress on this distribution project is dependent upon the development within the Talbert Valley area. However, the first phase costing about $150, 000 is expected to be under- way in late 1963. Total project cost is estimated at $220, 000. 5. Expansion of existing reservoir to 5, 000, 000 gallon capacity and construction of additional 5,000,000 gallon storage capacity in the northwest city area. Total estimated cost including land acquisition and connecting mains is $750,000. 6. Improvements throughout existing system, including mains, A pressure regulation, production and, purification equipment. Estimated cost is $183,000. y 7. Bond reserve equaling the maximum annual bond service is required under revenue bond financing. Therefore, this item has been included under project costs . ESTIMATED PROJECT COSTS A summary of the estimated project costs covering the three-year period July 1963 to July 1966, grouped by expected year of construction is shown below in Table I . Of the total project costs of $4, 200, 000 approxi- mately $2, 040, 000 will be required during 1963/64, and an additional $1, 120, 000 during 1964/65. w -4- Table 1 CITY OF HUNTINGTON BEACH Estimated Water Project Costs 1962 63 1963 64 1964 65 Total Capacity Rights Irvine Ranch Reservoir (1) $ - $ 251, 000 $ 251, 000 $ 502, 000 West Orange County Feeder No. 2 750, 000 375, 000 - 1 , 125, 000 Irvine Reservoir Transmission Line 740, 000 200, 000 - 940, 000 Reservoirs and Appurtenances Reservoirs 300, 000 - 300, 000 600, 000 Land Acquisition - 37, 500 37, 500 75, 000 Connecting Mains - 37 , 500 37, 500 75, 000 Distribution Interconnect Irvine Reservoir Transmission Line - - 280, 000 280, 000 Reservoir Hill Extension and Coast Loop 150, 000 70, 000 - 220, 000 Mains and Misc. Equipment - 90, 000 93, 000 183,000 Total Project Costs $1,940, 000 $1, 061, 000 $ 999, 000 $4, 000, 000 Bond Reserve 100, 000 59, 000 41 , 000 200, 000 Total Bonds Required $2, 040, 000 $1, 120, 000 $1, 040, 000 $4,200, 000 (1) As alternate for purchase of capacity in East Orange County Feeder No. 2 NON PROTECT COSTS The city has agreed to lease 600 acre feet of storage capacity in the Irvine Ranch Water District reservoir, which is expected to be completed by the summer of 1964. Annual lease payments commencing July 1964 are ex- pected to be $100, 000 during the first ten year period, $95, 000 during the second ten years and $90, 000 during the following seven years . The cost of the lease has not been included under project costs, and would not be required to be paid out of water revenues . However, Table 9 will indicate that sufficient surplus water revenues would be available to cover the annual lease payments . -5- CITY AND WATER DEPARTMENT DATA HISTORY AND ORGANIZATION The City of Huntington Beach was incorporated in 1909 . Although the city has long been famous for its fine residential and beach resort sections, as well as being an important oil producing area, growth was moderate until 1960 when a series of housing developments and a movement of industry into the area started a rapid rate of growth which appears to be continuing unabated. The city operates under its own charter, and has a council-adminis- trator form of government. The water department is headed by a water su- perintendent who is appointed by and responsible to the City Engineer. MUNICIPAL RECEIPTS AND EXPENDITURES A summary of municipal receipts and expenditures for fiscal years 1958/59 through 1961/62 based on the city reports to the State Controller is shown in Table 2 . It indicates that city revenues have been increasing at a faster rate than expenditures . At the same time the city has been able to increase its capital outlay appreciably. -6- Table 2 CITY OF HUNTINGTON BEACH Summary of Municipal Receipts and Expenditures 1958 59 1959 60 1960 61 1961 62 Receipts General Property Tax $ 898, 668 $1, 018, 050 $1, 019 , 184 $1 , 267, 592 Franchises 20, 498 22, 670 27, 279 41, 073 Sales and Use Tax 104, 543 128,761 167, 675 178, 776 Licenses and Permits 124, 239 172,992 326, 877 709 , 278 Fines and Penalties 35,842 51,852 48, 207 54, 127 Interest and Rental Income 291, 764 266, 123 300, 787 140, 290 Subventions and Grants 88,921 200, 692 139, 612 244, 541 Charges for Services 49 , 457 235,353 462, 580 587,935 Public Service Enterprise -- 51, 033 110, 498 164,705 Miscellaneous 35, 647 33,925 28, 017 56,267 Total Receipts $1, 649, 579 $2, 181, 451 $2, 630, 716 $3, 444, 584 Expenditures General Government 366,267 412, 593 492, 253 545,921 Public Safety 315, 194 413,393- 480, 121 631,944 Public Works 409, 471 520,910 785, 306 924,316 Health 2, 400 300 -- Libraries 53, 146 57,337 62, 148 65,498 Parks and Recreation 241 ,355 277 ,231 314,957 356,487 Public Service Enterprise - 2, 576 88, 804 125, 693 Total Expenditures $1, 387, 833 $1, 684,340 $2, 223, 589 $2, 649, 859 Capital Outlay Included Above $ 21, 287 $ 224, 890 $ 223, 697 $ 416,973 Surplus, End of Year $ 845, 421 $1, 294, 075 $1, 680, 483 $2, 476, 857 -7- OUTSTANDING WATER BONDS In 1955 the city issued $860,000 in general obligation.bonds for the purpose of water system development. Of this principal amount, $630,000 is currently outstanding, and is being retired at the rate of $35, 000 each year. The last payment is due August 1, 1980. The retirement schedule for the next four years is as follows: Year Ending Principal Interest Principal Annual August 1 Outstanding Due Due Bond Service 1963 $630, 000 $17, 500 $35,000 $521500 1964 595,000 16,450 35,000 51, 450 1965 560, 000 15,400 35, 000 50,400 1966 525,000 14,350 35,000 49, 350 SERVICE AREA AND POPULATION The city water department serves the newer, outlying portions of the city, while the Southern California Water Company serves the downtown and older established sections. Out of a total population estimated by the Orange County Planning Department at 37, 646 in January 1963, an estimated 27, 000 are served by the city system and about 10, 000 by the water company. However, since the company service area is substantially developed, it is assumed that the preponderance of population growth, which has recently averaged 1, 000 per month, will occur in the areas served by the city system and will result in a continuing heavy rate of increase in the number of city water customers . Table 3 shows growth of city population, area, and assessed valua- tion, since 1950, new building permits issued since 1958, and growth of the city water system since 1960. It clearly indicates that the greatest growth in the city has occurred within the last three years . -8- Table 3 CITY OF HUNTINGTON BEACH City Growth Active New New Service Connections Building City Area Assessed Population Connections Added Permits (Sq. Miles) Valuation Year (4/30) (6/30) (7/1-6/30) (1/1-12/31) (12/31) (7 1-6 30) 1950 5, 237 -- -- -- 4.71 $ 38, 323, 840 1955 5,871 -- -- -- 4.71 43, 613, 170 1958 10, 100 -- -- 202 23 . 10 70,723,320 1959 10, 300 -- -- 833 23 .38 76, 278, 490 1960 . 11,492 200 200 1,759 24.86 75,903,380 1961 15, 847 1, 693 1,493 3, 218 24.97 96, 347,340 1962 24, 350 4,334 2, 641 7, 574 25.10 105, 377, 280 1963(1) 37 , 646 6, 607 2, 273 (1) Estimated January 1 . ESTIMATED FUTURE POPULATION AND SERVICES The rapid population growth in the City of Huntington Beach since 1960 has exceeded the most optimistic predictions previously made, and no official projections of future growth are currently available . However, from the city engineer's projections of future city services , the following population estimates have been made on the basis of 3 . 6 persons for each new service added. An annual population increase of approximately 10, 000 is forecast through 1965. Year an. 1 City Services Population 1963 6, 607 37, 646 1964 9, 519 48, 129 1965 12, 269 58, 029 WATER RATES Water rates in effect since the city water system was established are shown below: -9- Table 4 CITY OF HUNTINGTON BEACH Present Water Rates Monthly Metered Rates First 1 , 000 cubic feet $ 2 .25 Next 1, 000 cubic feet, per 100 cubic feet .20 Next 1, 000 cubic feet, per 100 cubic feet . 18 Next 2 , 000 cubic feet, per 100 cubic feet . 16 Next 10, 000 cubic feet, per 100 cubic feet . 14 Next 85, 000 cubic feet, per 100 cubic feet . 12 Next 150, 000 cubic feet, per 100 cubic feet . 11 Over 250, 000 cubic feet, per 100 cubic feet . 09 Monthly Minimum Charges For each 5/8 inch or 3/4 inch service 2 .25 For each 1 inch service 3 .65 For each 1-1/2 inch service 4.25 For each 2 inch service 6.05 For each 3 inch service 12 .05 For each 4 inch service 22 .55 For each 6 inch service 35.25 For each 8 inch service 47.25 For each 10 inch service 65.25 For each 12 inch service 101 .25 MONTHLY WATER SALES a Table 5 shows average monthly water sales per active service con- nection from July 1961 to July 1963 based on records and estimates pro- vided by the Water Superintendent. The overall monthly average during fiscal year 19 61/62 was $3 .21 , while the monthly average for the current year is expected to rise to $3 .39 . The highest average monthly sales during this period occurred in September 1961 , while the lowest occurred in March-April 1962 . The difference between the two extremes was more than two dollars . -10- Table 5 CITY OF HUNTINGTON BEACH Average Monthly Water Sales Metered Estimated ASC Average Month Water Sales (as. of 20th month) Sales/ASC(1) 1961 Jul $ 5, 491 1, 693 $3 .24 Aug 6, 835 1, 878 3 . 64 ` Sep 10, 841 2, 157 5. 03 Oct 10, 063 2, 533 3 .97 Nov 11, 085 2, 687 4. 13 Dec 7,373 2,912 2 .53 1962 Jan 10, 318 3, 100 2 .62 Feb 6, 467 3, 302 2 .62 Mar 10, 618 3, 505 2 .36 Apr 6, 431 3, 716 2 .36 May 13, 674 3, 887 3 .02 Jun 10, 254 4, 040 3 . 02 Jul 20, 273 4, 740 3 .31 Aug 12, 263 5, 086 3 .31 Sep 30,480 5,480 4. 17 Oct 16, 047 5, 679 4. 17 Nov 27, 129 6, 212 3 . 15 Dec 13, 244 6, 607 3 . 15 1963 Jan 17, 943 6,771 2.65 Feb 19 , 310 6,946 2.78 Mar 23, 334 7 , 071 3 .30 Apr 24, 146 7, 251 3 .33 May 27, 469 7, 424 3 .70 Jun 28, 130 7, 644 3 .68 (1) Because of billing procedures , average sales for 1962 are more accurately shown on a bi-monthly basis . -11- COMPARISON OF WATER RATES AND BILLING ANALYSES Table 6 gives a comparison of the city water department's metered water rates and average revenues per customer with those of the Southern California Water Company's Huntington Beach System and with water sys- tems of nearby cities. It indicates that the City of Huntington Beach rates are in the middle range of this group. By contrast the Southern California Water Company's average rate for Huntington Beach is more than $1 .00 per month greater than the city rate. The consumption block statistics used in Table 6 are based on a billing analysis of 343 accounts for the period from November 1960 to November 1961. This sample represents approximately two-thirds of all billings in November 1960. The bi-monthly factors shown in Table 6 indicate that in a given consumption block, the "average " customer will purchase a certain proportion of that amount for each billing period. The proportion becomes lower as the consumption block becomes greater. Thus, within the 2, 000 cubic feet bi-monthly consumption block, the "average" customer will use approximately 1,920 cubic feet. However, in the 6, 000 cubic foot block, he will use only approximately 3, 290 cubic feet. This pattern of consumption indicates simply that for the customers of the size of meter studied the greatest amount of consumption is in the lowest quantities . It follows, therefore, that the rates established for the lesser quantities of water have the most effect in determining the total amount of revenue from the system. By use of the consumption block curve and monthly or bi-monthly factors, the "average" monthly and annual revenues per customer can be estimated for any given combination of water rates. The "average " monthly bill of $3.67 derived above is somewhat higher than the averages for subsequent periods derived from the records of the water department shown in Table 5, which were $3.21 and $3 .39 per month. However, the billing analysis included only those customers who received water during the entire year, and vacancy periods were minor, The vacancy factor for the entire system, on which the figures in Table 6 are based, would have been substantially greater than for this sample. -12- Table 6 CITY OF HUNTINGTON BEACH Comparison of Residential Water Costs with Rates in Nearby Cities City of Huntington Beach Southern Costa Mesa Consumption Bi-Monthly City Water California (2) County Water Garden Block(100c.f.) Factor(1) Department Water Co. Anaheim Buena Park District Grove Santa Ana 5. 5. 10. 9 .9 $ 3.30 13.33 13.1 32. 1 $ 6.50 15. 14.7 -9.9 $ 4.00 33.9 $ 3. 15 22.2 33.9 -13. 1 33 .3 x$.26(3) -14.7 20.8 -14.7 19.2 x $ . 113(2 3) 18.6 20. 19 .2 $ 4.50 x $. 146 $ 4.40 $ 4.50 x $.18(3) 30.1 32.9 32 .9 -19 .2 -19.2 -19 .2 10.9 13.7 13.7 30 26.0 x $.20(3) x $.22(3) x $ . 15(3) 35 28.3 37.5 29.3 40 30.1 $ 2. 18 32.9 -30.1 8 50 32.1 x $.18(3) $ 5.77 60 32.9 $ .50 33.9 $ 3.01 $ 2 .06 75 33.3 33.9 -32.1 33.9 33.9 $ 3.35 -32.9 1.8 -32.9 -32.9 33 .9 1.0 x $.20(3) 1.0 1.0 -33.3 x $.16(3) x $. 18(3) x $.13(3) .6 x $. 16(3) Over75 33.9 $ . 16 $ .36 $ 2.80 $ 2.35 $ . 18 $ . 13 $ . 10 Bi-Month,Revenue per Customer $ 7 .34 $ 9.43 $ 6.80 $ 8.85 $ 7.59 $ 6.69 $ 6.60 Annual Revenue per Customer $44.04 $56.58 $40.80 $53. 10 $45.54 $40. 14 $39.60 (1) Average amount of water sold per customer at or below consumption block shown based on billing analysis of City of Huntington Beach. (2) Adjusted from rates for gallon consumption. (3) Charge per 100 cubic feet within that rate block. -13- REVENUES AND EXPENSES A summary of the City Water Department revenues and expenses covering fiscal years 1959/60 through 1961/62 is given in Table 7 . During 1959/60 the system was being constructed and organized, and water sales were negligible . Revenue received was principally from meter and service installation charges . During the following two years of full-time operation, the system has shown a surplus of operating income over operating expenses . The water department has shown a cumulative surplus of approximately $80, 000 during the first three years of operation. -14- Table 7 CITY OF HUNTINGTON BEACH Water Department Revenues and Expenses 1959 60 1960 61 1961 62 Revenues Operating Revenue: Water Sales $ 23 $39, 197 $120,422 Service Charges and Other 51,780 751 37 Total Operating Revenue $51, 803 $39, 948 $120, 459 Non-Operating Revenue: Acreage Service Fees - 70, 550 44, 246 Total Revenue $51, 803 $110, 498 $164, 705 Expenses Operating Expense: Source of Supply $ - $ 11, 283 $ 33, 286 Pumping - - 298 Water Treatment - 2, 270 248 Transmission & Distribution - 32, 867 15, 377 Customer Account - 4,950 12,952 Administrative and General $ 770 7, 070 10, 397 Total Operating Expense $ 770 $ 58, 440 $ 72, 558 Non-Operating Expense: Capital Outlay $ 1, 806 $ 9, 703 $ 38, 398 Refund of Acreage Fees - 201661 44, 246 Total Non-Operating Expense $ 1, 806 $ 30,364 $ 82, 644 Total Expense $ 2, 576 $ 88, 804 $155, 202 Net Income $49, 227 $ 21, 694 $ 9, 503 Cumulative Surplus $49 ,227 $ 70, 921 $ 80,424 -15- FINANCING METHODS There are several generally accepted methods of financing available to cities for major capital improvements . This section of the report pro- vides a summary of the two most widely used methods, revenue bonds and general obligation bonds . In the summary are included comments and opinions as to the applicability of each method in financing the proposed project and the principal reasons for recommending the use of revenue bonds . REVENUE BONDS (Government Code, Sections 54,300 et seq.) Funds for financing water, sewerage, and other revenue-producing facilities may be provided by the issuance of revenue bonds under the Revenue Bond Law of 1941 . The issuance of such bonds must be authorized by a majority of the voters voting at an election held for this purpose in the city. The City of Huntington Beach is also authorized by terms of its charter to authorize and issue bonds by appropriate action of the City Council without the necessity of a vote by the city electorate. However, because of the large amount of the proposed bond issue and the desira- bility of voter understanding and approval, it is specifically recommended that the issuance of such bonds follow the Revenue Bond Law of 1941 . Revenue bonds are secured only by the revenues of the project they finance or from related projects . In this case the funds obtained by the sale of revenue bonds will be repaid solely from the revenues of the water department. Revenue bonds are not secured by liens on property and cannot, therefore, be repaid through the use of taxes. For this reason, the bond buyer must be given reasonable assurance that the revenues will be suffi- cient to retire the bonds and that adequate reserves will be maintained to provide the necessary funds for bond service in any year when revenue falls below the expected amount. An important measure of revenue bond security (and salability) is the "coverage, " the ratio of pledged revenue to annual bond service re- quirements . In selling revenue bonds for the purpose of purchasing the water system, the city would pledge the gross revenues of the system to bond interest and principal repayment. Pledging of revenues to the pay- ment of interest and bond redemption does not necessarily mean that all of these funds will be used for those purposes and a clear distinction should be drawn between pledging revenues to bond service and actually -16- using the entire amount of revenues pledged for that purpose. Pledging revenues in excess of the amount actually required for bond service means only that the city agrees to make these revenues available as added security, and that in guaranteeing to maintain the coverage ratio, the city assures the bond buyer that there will be sufficient funds available for bond service. The excess pledged revenues (not required for bond service or operating expenses) may be used for early retirement of the debt, for im- provements and additions to the system, or these excess funds may be returned to the city for civic betterments or for use in the general funds of the city with a corresponding reduction in taxes. Furthermore, in the event that the excess pledged revenues exceed the "coverage " requirement, a reduction in water rates may be effected. For the purposes of this study, a coverage ratio of 135 per cent is assumed; that is, it is assumed that to be salable revenue bonds supported by the pledge of gross revenues from the system are limited to the point such that net annual revenues after all operating expenses equal or exceed 135 per cent of the fixed annual bond service. If this coverage ratio is maintained, it is estimated that interest for revenue bond financing with a 30-year term and approximately equal annual bond service would require an interest rate of approximately 4-1/2 per cent. A 4-1/2 per cent interest rate has been assumed throughout this study. However, an actual water revenue bond sale in the present market would probably bring a net interest rate around 4%, providing an additional safety margin and greater coverage than anticipated in this report. As added security, a cash reserve equal to one year's interest and principal should be created from the proceeds of the bond sale or from other sources. This reserve may be invested at interest and may be used to retire the remaining bond maturities. The principal advantages of financing by the use of revenue bonds are: (1) Separates financing of water facilities from the finances of the city as a whole. (2) Does not impair the city's bonding capacity for other projects. (3) Does not add to tax liability of property owner. (4) Can be authorized by a simple majority. The disadvantages of revenue bonds lie in their slightly higher cost and in the lack of flexibility in the use of departmental funds . Neither of -17- these two objections to revenue bonds will be serious in the case of Huntington Beach, however, because of the current revenue picture and the dynamic growth and financial stability of the area. GENERAL OBLIGATION BONDS (Government Code, Sections 43,600 et seq.) General obligation bonds are widely used by California cities to finance municipal improvements such as waterworks, sewers, buildings, and other facilities considered to be of general benefit to the city as a whole. The bonds may be issued if two-thirds of the electors voting on the proposition vote for it. Propositions for more than one unrelated pro- ject or purpose may be submitted at the same election but they must be submitted as separate propositions. The Huntington Beach City Charter provides that the city may incur indebtedness and issue bonds in such manner as may be provided by the general laws of the state, or by the city charter, provided, however, that no bonds shall be issued to meet current indebtedness. The limitation on general law cities is 15 per cent of the city's assessed valuation. Bonds in excess of the debt limitation may be authorized, however. General obligation bonds and the interest thereon are secured by and payable from ad valorem taxes levied on all taxable property in the city. The city pledges its "full faith and credit" to the repayment of the bonds . Actual funds for payment of bond interest and repayment of bond principal (i.e. , bond service) may come from either or both of two sources: (1) taxes, and (2) other revenues of the city: Tax-Supported General Obligation Bonds: If other funds are not available, the City Council must levy and collect a tax for bond service due before the next general tax levy will become available. Revenue-Supported General Obligation Bonds: Other revenues of the city such as utility or sales tax revenues may be used in place of a tax levy to meet bond service payments. If water revenues (connection charges, water sales, etc.) are sufficient to pay part of all of bond service, after operating expenses, it will reduce (or elimi- nate) the amount of tax required to pay bond service. Bonds which are totally supported by water revenues (without the use of taxes) provide a better credit than bonds which are solely tax supported. -18- As with revenue bonds, general obligation bond issues may be divided into series and sold separately to coincide with the need for project funds. The unsold bonds create no liability; the authorization to sell such bonds is unlimited as to time unless revoked by the council. The bonds are usually issued in denominations of $1,000. The final maturity date must not exceed forty years from the date of the issue. Interest on the bonds cannot exceed 6 per cent per annum. The principal advantages of financing by the issuance of general obligation bonds are: (1) a slightly lower interest cost, resulting in lower annual costs to pay principal and interest, and lower total cost; (2) no coverage requirement; and (3) more flexibility in management of water department funds. There are several disadvantages to the use of general obligation bonds: (1) Requirement of a two-thirds majority for approval. (2) General obligation bonds imply an increase in the general property tax rate, even though in actuality they may be paid completely from the revenues of the proposed project. (3) The statutory limitation on the amount of outstanding indebtedness might preclude the use of general obligation bonds for other necessary projects where no other method of financing is possible. -19- RECOMMENDED FINANCING PROGRAM METHOD OF FINANCING Financing the proposed projects through revenue bonds is recom- mended for the following reasons: (1) The estimated revenues allow sufficient coverage to sell the issue at favorable interest rates and easily meet required bond service payments out of current revenues . (2) Revenue bonds are payable solely from the revenue of the project and can never become a lien or charge against real property. (3) Since the city must obtain funds to meet its obligation to the Metropolitan Water District the lesser voting requirements of revenue bonds should provide greater assur- ance that the city can meet its commitments . (4) There is no legal limit to the amount of revenue bonds that may be authorized or issued as there is in the case of general obligation bonds. However, from a practical viewpoint the amount of revenues and coverage available from the project limits the salability of an excessive or unrealistic amount of revenue bonds . INDICATED BOND AUTHORIZATION As summarized in Table 1, the estimated total cost of the proposed three-year project, including bond reserve, is $4, 200, 000. This amount of bonds should be authorized, even though the initial amount of bonds to be sold is $2 , 040, 000. The remaining unsold bonds would not constitute a liability against the city. MATURITY SCHEDULE Table 8 shows the first ten years of a 30-year maturity schedule for $2 , 040, 000 principal amount of bonds with interest conservatively estimated at 4-1/2 per cent. There are no principal payments during the first two years . The average annual bond service during the first ten-year period is approximately $118, 200. -20- Table 8 CITY OF HUNTINGTON BEACH Estimated Annual Bond Service, $2, 040, 000 Principal Amount Estimated Fiscal Principal Interest Principal Total Year Outstanding at 4-1/2% Maturing Bond Service 1963/64 $2, 040, 000 $91, 800 $ - $ 91, 800 1964/65 2, 040, 000 91, 800 - 91, 800 1965/66 2 , 040, 000 91, 800 10, 000 101, 800 1966/67 2, 030, 000 91,350 20, 000 111, 350 ' 1967/68 2, 010, 000 90, 450 30, 000 120, 450 1968/69 1,980, 000 89, 100 40, 000 129, 100 1969/70 1 ,940, 000 87, 300 50, 000 137, 300 1970/71 1, 890, 000 85, 050 50, 000 135, 050 1971/72 1 ,840, 000 82 , 800 50, 000 132 , 800 1972/73 1,790, 000 80, 550 50, 000 130, 550 ESTIMATED REVENUES AND EXPENSES Estimated revenues and expenses of the city water system for the period after July 1, 1963 are shown in Table 9 . They are based on the city engineer's estimates of revenues and expenses for fiscal years 1963/64 and 1964/65 and a continuation of the 1964/65 level during the remainder of the period. These projections are considered conservative in view of the city growth during the last year, which has exceeded the most optimis- tic projections previously made. The cost of leasing capacity rights in the Irvine Reservoir, which is estimated at $100, 000 annually during this period, is not included under maintenance and operation. Additional revenue bonds may be issued for this purpose under the wording of the proposed authorization. However, the estimated surplus after expenses are paid and bond service , as shown in the last column of Table 9 , would amount to almost $1 ,700, 000 during the first ten years of bond service , and would be sufficient to cover the lease costs . -21- Table 9 CITY OF HUNTINGTON BEACH Estimated Revenues , Expenses and Coverage Ratios Fiscal Operating Operating Net Annual Net Cover- Year Revenue Expense Income Bond Service age Ratio Surplus 1963/64 $387 , 000 $160, 000 $227 , 000 $ 91 , 800 2 .47 $135, 200 1964/65 503 , 600 210, 000 293 , 600 91 , 800 3 .20 201, 800 1965/66 503, 600 210, 000 293, 600 101 , 800 2 .88 191 , 800 1966/67 503, 600 210, 000 293, 600 111 , 350 2 .64 182 , 250 1967/68 503 , 600 210, 000 293, 600 120, 450 2 .44 173, 150 1968/69 503 , 600 210, 000 293, 600 129 , 100 2 .27 164, 500 1969/70 & (1) Thereafter 503, 600 210, 000 293, 600 133 , 300 2 .20 160, 300 (1) Average annual bond service after the fifth year. REQUIRED BOND SERVICE COVERAGE Estimated bond service coverage ratio on the first issue of $2, 040, 000 as shown in Table 9 will not be lower than.2 . 12, and will average 2 .59 over the first seven years of the issue. If the bonds are sold at an interest rate lower than 4-1/2% the coverage would be even greater. This is well over the 1 .35 coverage that would be required as security on this issue. As previously discussed, an estimated annual surplus averag- ing $169 , 000 during the first ten-year period will be available. This can be applied to the cost of the Irvine Reservoir lease, or it may be used to secure additional revenue bond issues . This surplus is based only on projected growth through 1964/65. In the likelihood that the growth of the water system continues beyond 1964/65 and/or the bonds are sold at an interest rate lower than that used in this study, even greater surpluses of operating revenues over expenses can be anticipated. Although the responsibility for determining water rates belongs to the City Council alone, it should be kept in mind that the coverage require- ments for a revenue bond issue, as previously shown, make it mandatory that the water system show an adequate amount of operating revenue through the entire bonding period. In the event that operating revenues are less than anticipated, and insufficient to provide the required coverage for either the first or succeed- ing bond issues, an increase in water rates would be required. If it were decided to adjust present water charges, it would be a relatively easy matter for the city to estimate the additional amount of revenue that could be raised through higher rates by means of the consumption block studies already made in this report. -22- CONCLUSIONS The findings and analyses presented in this report lead to the general conclusion that the estimated revenues from the city water system based on current water rates will be sufficient to meet operating expenses and the cost of the Irving Reservoir lease, and to amortize the first issue of the revenue bonds needed to finance the construction of the improvements previously described. Other specific conclusions are as follows: 1 . Revenue bonds will provide the most feasible source of financing for the water system project. A total authori- zation of $4, 200, 000 will be required for the three-year project. This includes an allowance for reserves re- quired under revenue bond financing, in addition to the estimated project cost. 2 . Estimated operating revenues of the water system will be sufficient to provide adequate coverage for an initial issue in the amount of $2, 040, 000. In addition, an estimated average annual surplus of $169, 000 will be available to pay for the cost of leasing capacity in the Irvine Reservoir. In the event this expense is paid out of general funds , the estimated surplus can then be used as coverage for subsequent bond issues . 3 . Authorized but unsold bonds will not create any liability for interest or principal payments . The bonds remaining after the first issue has been sold can be sold in series to correspond with the need for project funds , depending upon the availability of sufficient coverage from surplus operating revenue . 4. In the event that unexpectedly higher operating costs occur during the life of the project, or anticipated reve- nues are otherwise insufficient to provide the required coverage, ,it may become necessary to increase present water rates but it does not appear that .this will be neces- sary within the next one to two year period. -23- FINANCING WATER SYSTEM ACQUISITION CITY OF HUNTINGTON BEACH CITY COUNCIL Robert M. Lambert, Mayor Ernest H. Gisler Thomas H. Welch Jake R. Stewart Lyndon A. Wells, Sr. Doyle Miller, Administrative Officer James D. Plunkett, City Attorney James R. Wheeler, City Engineer April 19 6 3 ar.. STONE & YOUNGBERG Municipal Financing Consultants San Francisco Los Angeles STONE & YOUNGBERG DANIEL STONE MUNICIPAL FINANCING CONSULTANTS RICHARD ART BENJAMIN J.BAUM ED WARD W..B BURUR NETT N LE DON M.DAVIS 1314 RUSS BUILDING DAVID E.HARTLEY PATRICK J.KAVANAUGH RICHARD P.GROSS SAN FRANCISCO 4 BARRY M.NEWMAN YUKON 1-1314 EDWIN A.WELLS,JR. EVERETT D.WILLIAMS April 2, 1963 The Honorable City Council City of Huntington Beach Huntington Beach, California Attention: Mr. Doyle Miller, Administrative Officer Gentlemen: We are pleased to present our financing report on the feasibility of city acquisition and operation of the Southern California Water Company's Huntington Beach System. In the preparation of this report, we have reviewed the records of the company for the years 1960, 1961 and 1962 on file with the Public Utilities Commission. As you know, the Southern California Water Company has expressed a willingness to sell its Huntington Beach System to the city at a price not to ex- ceed $1 ,500,000. Subsequently, the city council increased the previously recom- mended water revenue bond authorization for water system improvements from $4,200,000 to $5,700,000 to include this amount, with the actual purchase price to be negotiated after the bond issue has passed. In our study we have used a possible cost to the city of $1 , 180,000 for testing the financing ability of the system under revenue bonding. This maximum cost includes bond reserve requirements and other expenses totaling $80,000, in addition to a payment of $1 , 100,000 to the company for purchase of the Hunting- ton Beach System. We feel that the assumed purchase price represents a fair price to the company and that it compares favorably to recent sales of water sys- tems by other public utilities in California. We find that the revenues of the system under municipal ownership and operation would be sufficient to meet all operating expenses and to amortize the estimated acquisition expense under revenue bonds. We are pleased to have been asked to prepare this report and stand ready to perform such additional services as you may direct. Very truly yours , STO E & YOU/N/G/BERG Edwin A. Wells, Jr. Joseph J. Azzolino TABLE OF CONTENTS Paqe INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . 1 DESCRIPTION OF EXISTING SYSTEM . . . . . . . . . . . . . . . . 2 Ownership and Area Served . . . . . . . . . . . . . . . . . 2 Active Service Connections . . . . . . . . . . . . . . . . 2 Distribution System. . . • . . . . . . . . . . . . . . . . 3 Water Supply and Production . . . . . . . . . . . . . . . . 4 UtilityPlant in Service . . . . . . . . . . . . . . . . . . . 4 Contributions and Advances . . . . . . . . . . . . . . . . . 5 Estimated Rate Base . . . . . . . . . . . . . . . . . . . . 5 WATER COMPANY OPERATIONS . . . . . . . . . . . . .. . . . . . 7 Water Rate Schedule . . . . . . . . . . . . . . . . . . 7 Comparison of Water Charges . . . . . . . . . . . . . . . . 7 Water Revenue . . . . . . . . . . . . . . . . . . . . . . . 8 Operating Expenses . . . . . . . . . . . . . . . . . . . . . 9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 9 Depreciation . . . . . . . . . . . . . . . . . . . . . . 10 Income Statement. . . . . . . . . . . . . . . . . . . . . . 10 MUNICIPAL OWNERSHIP AND OPERATION . . . . . . . . . . . . . 12 Operating Organization . . . . . . . . . . . . . . . . . . . 12 Estimated Operating Expenses . . . . . . . . . . . . . . . . 12 Comparison of Revenues and Expenses . . . . . . . . . . . . 12 VALUATION OF WATER SYSTEMS . . . . . . . . . . . . . . . . . 14 General . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Rate Base and Rate of Return . . . . . . . . . . . . . . . . . 14 Original (Historical) Cost . . . . . . . . . . . . . . . . . . 15 Reproduction Cost New Less Depreciation . . . . . . . . . . . 15 Investment Value . . . . . . . . . . . . . . . . . . . . . . 15 Negotiated Sales of Public Utility Water Systems . . . . . . . . 16 Revenue Bonding Value . . . . . . . . . . . . . . . . . . . 17 Estimated Value of the Huntington Beach Water System . . . . . 18 Estimated Capital Expenditures. . . . . . . . . . . . . . . . 19 REVENUE BOND FINANCING . . . . . . . . . . . . . . . . . 20 General . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Estimated Revenue Bonding Pro Forma . . . . . . . . . . . . . 21 Recommended Method of Financing . . . . . . . . . . . . . . 22 CONCLUSIONS. . . . . . . . . . . . . . . . . . . . . 24 v TABLES Paqe Table 1 - Active Service Connections . . . . . . . . . . . 3 Table 2 - Pipe in Distribution System . . . . . . . . . . . . 3 w Table 3 - Estimated Rate Base. . . . . . . . . . . . . . . . 6 Table 4 - Water Rate Schedule - General Metered Service. . . . 7 Table 5 - Comparison of Monthly Water Charges. . . . . . . . 8 Table 6 - Operating Revenues . . . . . . . . . . . . . . . . 9 Table 7 - Income Statement . . . . . . . . . . . . 11 Table 8 - Estimated Municipal Operating Expenses. . . . . . . 13 Table 9 - Estimated Acquisition and Improvement Allowance . . . 19 Table 10- Estimated Revenue and Expense Statement . . . . . . 21 s INTRODUCTION The City of Huntington Beach covers an area of 25 square miles in northwestern Orange County. It is now experiencing a rapid increase in housing construction and development, which has more than tripled the city's population in the last three-year period. This growth trend is ex- pected to continue over the next few years. The older, established portion of the city is served by the Hunting- ton Beach District system of the Southern California Water Company, a public utility which operates a number of other water systems throughout California. The Huntington Beach District had approximately 2,800 active customers at the end of 1962 , located in the older, established sections of the city. The system has not grown appreciably in recent years, and geographical considerations limit further growth. It is surrounded by the Pacific Ocean and the municipal water system. The municipal water system, since its inception in 1960, has grown rapidly by providing service to all the newly developed sections of the city, and now serves approximately 7,000 customers, and about seventy per cent of the total city population. The City Council retained the firm of Stone & Youngberg in August 1962 to determine the financial feasibility of proposed improvements to the municipal water system. In February 1963, Stone & Youngberg submitted a financing report to the City Council which recommended that a $4.2 million water revenue bond issue be placed before the city electorate to finance the proposed improvements. Subsequent to the preparation of that report, the president of the Southern California Water Company, Mr. Philip F. Walsh, offered to sell the Huntington Beach System to the city at a price not to exceed $1 ,500,000 and to be negotiated at a later date. The City Council then requested that Stone & Youngberg prepare this additional report on the financial feasibility of city acquisition of the system. The report which follows presents the findings, analyses and conclusions of the financing consultants. s -1- DESCRIPTION OF EXISTING SYSTEM OWNERSHIP AND AREA SERVED The water distribution system of the Southern California Water Company, located within the city limits of the City of Huntington Beach, is designated by the Public Utilities Commission of the State of California as the Huntington Beach District. It was acquired by the Southern Cali- fornia Water Company in 1929. The system serves the southwestern por- tion of the City of Huntington Beach bounded by Golden West Avenue on the west, Talbert Avenue on the north, Beach Boulevard on the east, and the Pacific Ocean on the south. Further growth of the system is limited, being blocked by the Pacific Ocean on one side and the municipal water system in other directions. However, under municipal ownership the ex- isting system facilities could be readily merged with the adjoining city water,system. ACTIVE SERVICE CONNECTIONS Table 1 shows the number of active service connections served by the Huntington Beach System over the past three-year period. Active service connections are residential, commercial, industrial, and public authority metered accounts and do not include fire hydrants. The break-. down of active services into various classes of accounts.is shown in the tabulation which follows: 1960 1961 1962 Metered Commercial (and residential) 2,591 2,649 2,693 Industrial 60 66 88 Public Authorities 47 45 44 Total Active Services 2,698 2,760 2,825 Flat Rate Private Connections 3 4 4 Fire Hydrants 250 254 260 2,951 3,018 3,089 -2- From Table 1 , it may be seen that the water system has had a limited growth averaging about 80 services in each of the last three years. Since the area served by the system is practically all built up, it is esti- mated that the system will add no more than approximately 25 metered. customers during 1963 and 1964. Table 1 HUNTINGTON BEACH WATER SYSTEM Active Service Connections Added Year End of Year During Year Average 1960 2, 698 113 2, 642 1961 2,760 62 2,729 1962 2,825 65 2,793 DISTRIBUTION SYSTEM On December 31 , 1962 , the distribution system contained approxi- mately 244, 344 feet of pipe. Of this amount, approximately 191 ,405 feet were four inches in diameter or larger. Table 2 summarizes the major pipe by sizes. Table 2 HUNTINGTON BEACH WATER SYSTEM Pipe in Distribution System (as of 12/31/62) 10-inch & Type 2-inch 3 & 4-inch 6-inch 8-inch larger Total Cement-Asbestos - 12,793 20,501 24,254 14,593 72, 141 Cast Iron, Steel, Misc. 20,406 69,748 39,574 26,762 15,713 172,203 Total 20,406 82,541 60,075 51 ,016 30, 306 244, 344 -3- WATER SUPPLY AND PRODUCTION All of the water used in the Huntington Beach System is derived from three wells with a combined capacity of 4,200 gallons per minute. The tabulation below shows the total water deliveries to metered customers since 1959: Water Deliveries (100 Cubic Feet) Classification 1959 1960 1961 1962 Commercial 384,744 398,648 454,483 434,356 Industrial 193,391 221 ,354 275,893 265 ,512 Public Authorities 116,758 115,385 115,904 90,624 Other 12 ,771 8,360 6,335 4,417 Total 707 ,664 743,747 852,615 794,909 UTILITY PLANT IN SERVICE The utility plant in service on December 31 , 1962 , amounted to $1, 186,424. "Utility plant in service" is the original, recorded historical cost (undepreciated) of the enterprise and includes land, buildings, and all water facilities. A summary of the utility plant in service by classes of facility at the end of each of the last two calendar years is shown below: December 31 December 31 1961 1962 Land $ 7 ,663 $ 7 ,574 Source of Supply 36 ,840 36,840 Pumping Plant 77 ,765 78, 126 Water Treatment 46,732 46,742 Transmission & Distribution 897 ,110 971 ,821 General Plant & Miscellaneous 44,698 45,321 $1 ,110,808 $1 ,186,424 The following tabulation shows the additions which have been made to the utility plant in the various categories over the past three-year period: Source of Pumping Distribution General Year Su 1 1 Plant System Plant Total 1960 $ 4 $8 ,714 $ 68 ,015 $2 ,224 $ 78 ,957 1961 2 - 27 , 301 4 ,951 32 ,254 1962 34 361 83 ,331 2 ,816 86 , 542 $40 $9 ,075 $178 ,647 $9 ,991 $197 ,753 (1) Includes land and land rights. The depreciation reserve of the company for the Huntington Beach System amounted to $252,741 as of December 31 , 1962. When deducted from the utility plant in service, it indicates a net depreciated utility plant in service of $933,683. CONTRIBUTIONS AND ADVANCES The system has a total "contributions in aid of construction" amounting to $15,7 64 as of December 31 , 19 62. This includes contribu- tions in the form of cash, service, or property made by individuals and others to the company for construction purposes. "Advances for construc- tion" amounted to $94,436 as of December 31 , 1962. This reflects cash advances for construction which are to be refunded wholly or in part under the company refund extension rules. Advances for construction under re- fund agreements bear no interest. Both contributions in aid of construction and advances for con- struction are deducted from the utility plant in service in determining the rate base. Both, however, reflect the actual costs of facilities used and owned by the company for which the company has made no cash expendi- ture. In the case of advances subject to refund, the company has an ob- ligation to repay which depends upon either revenues or new customers. In the event that the system were acquired by the city, the company would probably retain these obligations and deliver the system to the city "free and clear" of any obligations. ESTIMATED RATE BASE Table 3 shows estimated rate bases for the company at the end of the year from 1960 through 1962. The effective rate base of the company and its relationship to earnings and valuation are discussed subsequently in this report. -5- Table 3 HUNTINGTON BEACH WATER SYSTEM Estimated Rate Base (1) 1960 1961 1962 Utility Plant in Service $1,089 ,210 $1,110,808 $1, 18 6,424 Depreciation Reserve 223,054 237,811 252 ,741 Depreciated Utility Plant $ 866, 156 $ 872,997 $ 933,683 Working Capital $ $ $ Construction Work in Progress - 15,500 - Materials and Supplies (1) (I) (1) Sub Total Additions $ - $ 15,500 Advances $ 97 ,367 $ 94,092 $ 94,436 Contributions 11 ,814 16,078 15 ,764 Sub Total Deductions $ 109 , 181 $ 110, 170 $ 110,200 Estimated Rate Base $ 756,975 $ 778,327 $ 823,483 Not available by districts. -6- WATER COMPANY OPERATIONS WATER RATE SCHEDULE Table 4 shows the water rate schedule for general metered service authorized by the Public Utilities Commission, which has been in effect since January 4, 1956. Other rates are charged by the company for special services, including public and private fire protection. Table 4 HUNTINGTON BEACH WATER SYSTEM Water Rate Schedule - General Metered Service Per Meter Quantity Rates: Per Month First 500 cubic feet $1 .65 Next 2,000 cubic feet, per 100 c.f. .26 Next 7 .500 cubic feet, per 100 c.f. .20 Next 40,000 cubic feet, per 100 c.f. . 17 Next 100,000 cubic feet, per 100 c.f. . 13 Over 150,000 cubic feet, per 100 c.f. . 10 Minimum Charges: For each 5/8 x 3/4 inch meter 1 .65 For each 3/4 inch meter 2. 35 For each 1 inch meter 3.75 For each 1-1/2 inch meter 6.50 For each 2 inch meter 10.00 For each 3 inch meter 20.00 For each 4 inch meter 30.00 For each 6 inch meter 50.00 COMPARISON OF WATER CHARGES Table 5 shows a comparison of charges for given quantities of water, based on the prevalent 5/8 x 3/4 inch service, between the South- ern California Water Company and the municipal water system. It indi- cates that the city's monthly rates .are approximately 23 per cent lower than those of the water company for quantity blocks of water of from 1,000 to 5,000 cubic feet. The company rates for blocks of 700 cubic feet or less are lower than those of the city system. -7- Table 5 HUNTINGTON BEACH WATER SYSTEM Comparison of Monthly Water Charges Water Percentage Quantity Company City System Difference 500 cubic feet $ 1 .65 $2.25 +36% ` 1 ,000 cubic feet 2.95 2.25 -24 1 ,500 cubic feet 4.25 3.25 -24 2,000 cubic feet 5.55 4.25 -23 2,500 cubic feet 6.85 5.15 -25 3,000 cubic feet 7 .85 6.05 -23 3,500 cubic feet 8.85 6.85 -23 4,000 cubic feet 9.85 7.65 -22 4, 500 cubic feet 10.85 8.45 -22 5,000 cubic feet 11.85 9 .25 -22 In the previous financing report for the City of Huntington Beach, a consumption block study made of the city water system was compared with the rate structure of neighboring water suppliers, including the Huntington Beach System of the Southern California Water Company. The study indicated an average bi-monthly revenue per customer of $7 .34 in the city water system and of $9 .43 in the Southern California Water Company's Huntington Beach System. This represents a difference of more than a dollar a month per active service connection. In the event that the city acquires the company water system and re- vises existing water company rates downward to correspond to the city charges, a reduction in anticipated revenues of the system would have to be projected under city operation. WATER REVENUE Table 6 shows a comparison of operating revenues for the Hunting- ton Beach District system for the calendar years 1960 through 1962. -8- Table 6 HUNTINGTON BEACH WATER SYSTEM Operating Revenues 1960 1961 1962 Metered Commercial $117 ,57 3 $130,617 $127 ,152 Metered Industrial 30,643 36,709 33,308 Metered Public Authorities 15,629 151,191 13,089 Unmetered and Fire Service 6,631 6,987 7 ,277 Other Water Revenues 1 ,609 1 ,205 1,204 Total Operating Revenues $172,085 $190,709 $182,030 Average Revenues: Average Metered Service Connections 2,642 2,729 2,793 Total Metered Sales $163,845 $182,517 $173,548 Average per Connection 62.00 66.90 62. 15 OPERATING EXPENSES The principal expenditures of the company are made under the oper- ation and maintenance accounts for pumping, transmission and distribution, customer accounts, and administrative and general expenses as shown in Table 7 . The pump tax levied by the Orange County Water District for pur- poses of water replenishment is shown as an item of operating expense. Total operating expense (before depreciation and taxes) per average active service connection during the three-year period varied from $27.90 to $32.30 per year. TAXES In 1962 , the company paid a total of approximately $27 ,7 00 in taxes on its Huntington Beach System, exclusive of pump taxes. Of this amount, approximately $15,300 was paid for federal and state taxes based on income; approximately $9 ,200 for county and city taxes on real and personal property; the balance of taxes were for state and local taxes and licenses, and for federal unemployment and insurance taxes, and included payment of $1,37 0 for a city business license and $633 for a street franchise tax. -9- DEPRECIATION Depreciation charged to expenses in 1962 amounted to $21,304, or approximately $7.65 per average active service connection. In most public utility accounting depreciation is a deduction from gross revenue which is intended to compensate the owners for the loss of usefulness of the property. Depreciation is determined in such a way that it would theoretically repay the original cost of the facility over its useful life. In actual practice de- preciation funds are commonly used to provide extensions to the system, ad- ditional facilities or replacements, and the original debt on the system is not reduced. The interest on the original borrowing remains constant. Util- ities as a rule do not repay long-term borrowing.by annual payments of prin- cipal. In public financing the regular retirement of debt through maturing bonds or sinking fund payments has the effect of amortizing the costs of the facility over its useful life so that the annual repayments of borrowed capital may be considered as roughly the equivalent to annual depreciation charges used by private utilities. INCOME STATEMENT Table 7 shows a summary of revenues and expenses for the Hunting- ton Beach District system over the past three-year period. Net utility in- come per active service connection under company operation during the three years shown ranged from a high of approximately $18.20 in 1960 to a. low of about $16.7 0 in 19 62. -10- Table 7 HUNTINGTON BEACH DISTRICT Income Statement 1960 1961 1962 Average Active Service Connections 2,642 2,729 2 ,793 Operating Revenues $172 ,085 $190,709 $182 ,030 Operating Expenses: Supply $ 44 $ - $ - Pumping 20,623 27 ,340 23,477 Pump Tax 7 ,934 11,939 12,526 Treatment 6,779 6,886 7 ,041 Distribution 11 ,462 12,770 16, 190 Accounts 10,007 11 ,357 12 ,231 Sales 800 609 - General 17 ,769 18 ,403 15,018 Rents 1 ,004 1 ,200 1,200 Credits (2,672) (2,411) (1 ,234) Total Operating Expenses $ 73,750 $ 88 ,093 $ 86,449 Net Revenue $ 98,335 $102,616 $ 95,581 Depreciation 20,070 20,626 21,304 Taxes, General 10,087 12,255 12,404 Taxes, Income 20, 110 19 ,863 15 ,284 Total Depreciation & Taxes 50,267 52 ,744 48,992 Net Operating Income $ 48,068 $ 49 ,872 $ 46,589 -11- MUNICIPAL OWNERSHIP AND OPERATION OPERATING ORGANIZATION The City of Huntington Beach Department of Public Works operates a complete water department for its existing system which presently has approximately 7 ,000 customers. The acquisition of the Huntington Beach District system with approximately 2,800 customers will not require any major modifications in the present organizational structure of the city water department. It is anticipated that, to the extent possible, the city will employ the present Huntington Beach District water company employees. ESTIMATED OPERATING EXPENSES The anticipated additional operating expenses of water company system have been studied by the Department of Public Works. Based on information made available to the city from the company and on information from the file with the California State Public Utility Commission, the De- partment of Public Works estimates that the incremental additional operat- ing expenses for the water system will be approximately $70,000 per year. COMPARISON OF REVENUES AND EXPENSES Table 8 shows a comparison of company and city revenues and ex- penses based on 2,825 active service connections, which was the number of active services in the system as of January 1, 1963. Company revenues and expenses are for the calendar year 1962 and are the same as those shown in Table 7 . Anticipated revenues under city operation are substan- tially less than those realized by the company in 1962 because they are projected on the lower rates presently in effect in the city system. How- ever, anticipated expenses under city operation are less than those shown for the company. This results from (1) anticipated economies in operation resulting from merger of the company system with the municipal system and (2) no depreciation allowance or taxes (other than pump taxes) required under municipal ownership. -12- Table 8 CITY OF HUNTINGTON BEACH Comparison of Company and City Revenues and Expenses 1962 Est. City Company (2 ,825 cust,) Revenues $182 ,030 $150,000 (1) Expenses Operation and Maintenance (2) 86,449 70,000 (3) Depreciation 21,304 Taxes 27 ,688 $135,441 Net Income to Company $ 46,589 Net City Income Available for Bond Service $ 80 ,000 (1) After allowance for reduction in rates. (2) Includes Pump Tax. (3) Based on study by City Engineer. -13- VALUATION OF WATER SYSTEMS GENERAL A public agency such as the City of Huntington Beach has the legal right to acquire public water systems under the laws of the State of Cali- fornia. Such acquisition may be accomplished by negotiated agreement or by proceedings in eminent domain (condemnation) . In negotiated agreements, the price to be paid is established by agreement during the course of nego- tiations. In condemnations the price to be paid may be fixed either by the Public Utilities Commission or by proceedings in the Superior Court. Both of these legal proceedings are designed to secure to the owner (company) "just compensation" for the property that the public is acquiring through its public agency. In each proceeding the law requires that the owner be paid the "fair market value, " which is: " . . .The highest price, estimated in terms of money which it (the property) would bring if exposed for sale in the open market, with reasonable time allowed in which to find a purchaser, buying with knowledge of all the uses and pur- poses to which it was adapted and for which it was capable. " This report has considered the various factors which influence and would tend to establish a fair market value for the facilities of the Hunting- ton Beach District water system. The following section of the report dis- cusses these subjects--the approaches to estimating fair market value and the possible total capital expenditure necessary to acquire the private water system and to integrate it with the existing city system. RATE BASE AND RATE OF RETURN Privately owned public utilities which operate water systems in the State of California are regulated by the California Public Utilities Commis- sion. The commission regulates water rates charged by the operating util- ities in a manner designed to allow a fair rate of return on the company's in- vestment in the plant and system. Under the methods used by the Public Utilities Commission, the theoretical investment of the company is called the "depreciated rate base". The rate base consists of the original installed cost of plant and fa- cilities necessary to serve the public, plus the cost of work in progress, materials and supplies, and working cash which represent investment by the company to operate the system. The "depreciated rate base" is then -14- determined by deducting from the total rate base the estimated deprecia- tion reserve, advances (subject to refund) , and contributions to the sys- tem. The "depreciated rate base" is usually based on average values over a period of time, usually one year. Estimated rate bases for the years 1960, 1961 and 1962 based on year end figures are shown in Table 3. ORIGINAL (HISTORICAL) COST The company is required to keep plant records which state the original cost of the facilities at their actual cost to the company or at the cost of the facilities when first acquired for public service. These costs are accumulated on the books of the company with adjustments for capital additions as they are made for retirements and other adjustments and are shown as utility plant in service in the company's books . REPRODUCTION COST NEW LESS DEPRECIATION The reproduction cost new less depreciation method of appraisal is used by the Public Utilities Commission of the State of California as a fac- tor in the determination of "just compensation" of a utility property. Such an appraisal includes a detailed field inventory of pipe and other utility plant properties and an appraisal of the current reproduction cost and appli- cable depreciation. This method requires a thorough review of the work orders of the utility which establishes the type of material and the age and condition of the original installation of each increment of the utility prop- erty. Such value, while perhaps more widely known than other methods of valuation, achieves prominence mainly in proceedings under the juris- diction of the Public Utilities Commission. Values based exclusively on this method of appraisal are seldom used in negotiated sales. INVESTMENT VALUE From the standpoint of the owners of common stock of most private utilities, the value of a water system is based upon its investment return. The investors in water properties generally expect a rate of return of 6 to -15- 10 per cent or more. The market value of common stock (or net income to common stockholders from sale of property) can be increased to some point where the expected rate of return (from anticipated earnings) on that value is so low that the investor will sell his stock and reinvest in other utility property or other investments. The investment value of the water utility property can be considered as the point at which the common stockholders accept cash rather than retain stock based on expected rate of return. A value based on earnings of the Huntington Beach system would be based r primarily on a projection of net utility income under the present rates au- thorized for the system. In addition, the investment value of the Hunting- ton Beach system would depend on the assumed long-term debt structure of the Southern California Water Company. Estimates of investment value of the system have been made in connection with the preparation of this report; however, no value based on this method of valuation is presented because of the hypothetical nature of the assumptions involved. NEGOTIATED SALES OF PUBLIC UTILITY WATER SYSTEMS Several major sales of public utility water properties have been made in California in recent years by direct negotiation between the buyer and seller. These sales may be divided into two groups, sales to private inves- tors and sales to public agencies. Sales to Private Investors - In many cases the sale of a water sys- tem to a private investor is accomplished through a sale of the stock of the company owning the water property. It is difficult in such cases to relate the stock sale to the market value of the water system because of the influence of other assets and liabilities of the company on the value paid for the stock. In those sales of water systems to private investors where the market values of the system are evident, the market values (sale prices) are usually approximately equal to the depre- ciated rate bases of the systems. Inasmuch as a private investor cannot earn on a rate base higher than the original cost (depreciated), such invest- ments must be restricted approximately to the amount of the rate base. Customarily, investors in water properties expect a rate of return (net earnings) on their investment of not less than 6 to 10 per cent. While the Public Utilities Commission normally limits the earnings of a water utility to about 6 per cent to 6-1/2 per cent of its rate base (unamortized capital investment), a higher rate of return is normally attained, insofar as the common stock of a company is concerned, by means of a leverage fac- tor. That is, a company will obtain a major portion of the funds required to -16- construct, acquire, or improve a system by sale of bonds, mortgages, or preferred stock, at interest or dividend rates below the earnings rate al- lowed by the commission and consequently the earnings to the capital equity represented by common stock will be at a higher rate. A private buyer of the Huntington Beach system would be forced to find long-term capital in order to exercise the leverage principal re- ferred to above. This might prove to be quite difficult, however, so that the value of the system based on its possible sale to a private buyer might be less than the rate base. Sales to Public Agencies - The sales of water properties to public agencies, and where the sale price is usually stated, can be compared in a few respects but such comparisons should be evaluated cautiously because of the inherent differences among water systems. The tabulation below sets forth the approximate price per customer and ratio of price to depreciated utility plant in service for the major recent sales of water systems to public agencies (and includes the one recent major condemnation value for comparison) . Price per Percentage Ratio Purchase Active Service of Price to Price Connection Depreciated Plant Arcade County Water District $2, 169,298 $185 120% City of Hanford 1,909,626 433 164 City of Vacaville 1 ,700,071 685 123 City of Lakewood 4,465,000 257 130 City of Petulama 2,425,000 481 156 San Ramon County Water District 1,765,000 420 99 City of North Sacramento(1) 2,206, 000 306 139 (1) Based on condemnation value set by P.U.C. REVENUE BONDING VALUE It is possible to estimate the value of a privately owned water sys- tem based on its revenue bonding capacity under public ownership. From the viewpoint of the public entity, the purchase price of the system should be such as to permit it to pay all annual operating expenses and annual bond service of the debt incurred to finance the purchase from revenues of the system, and in addition, to permit certain annual reserves to accumu- late. The revenue bonding value of a water system is pertinent from the -17- standpoint that the bonds sold depend entirely upon the demonstrated earn- ing ability of the enterprise and not on the taxing power of the public entity operating the system. The limitations imposed by the revenue bonding ca- pacity of the Huntington Beach system are an important consideration in de- termining the value of the system for the purposes of this study. ESTIMATED VALUE OF THE HUNTINGTON BEACH WATER SYSTEM Special conditions pertain in an estimate of the market value of the Huntington Beach system compared with other water systems, specifically: 1. The water system is located in an area which limits further growth. Growth of its service area has not been as attractive as similar growth in other systems operated by the company. 2. The water supply, while presently adequate, may in the future suffer from sea water intrusion, which will require the purchase of supplemental water and thereby increase operating costs. 3. The water rates authorized by the Public Utilities Commission will provide an attractive return to the company for several years. This anticipated return increases the investment value of the system. 4. The company is interested in selling the system, and appears to be willing to consider and accept a reasonable offer. In assuming a value of the Huntington Beach system as a basis for a study of financing feasibility, possible values of the system and special circumstances surrounding possible acquisition of the system have been considered to varying degrees. For the purpose of this study a value of $1 , 100,000 (base price) is assumed as of January 1, 1963, for the entire system. It is further assumed that the city would assume the system free and clear of all obligations. The suggested base price used in this report is approximately 118 per cent of the depreciated utility plant in service. -18- ESTIMATED CAPITAL EXPENDITURES Table 9 presents a summary of the estimated capital expenditures required to purchase the Huntington Beach District system and to initiate municipal water service starting with the base price suggested above. To this would be added a bond reserve and incidentals amounting to $65,000 and $15,000 respectively. This results in an estimated acquisi- tion cost of $1, 180,000. Table 9 HUNTINGTON BEACH WATER SYSTEM Estimated Acquisition and Improvement Allowance Base Price (1/1/63) $1 , 100,000 Plus Bond Reserve 65,000 Incidentals 15 ,000 Revenue Bonds Required $1 , 180,000 _-19- REVENUE BOND FINANCING GENERAL Two types of financing are available to the City of Huntington Beach for the acquisition of the company water system, and for the expenses neces- sary to initiate water service. These are revenue bond and general obliga- tion bond financing. General obligation bonds, though secured by the power of taxation, can be paid from water revenues. The legal bonding capacity of the City of Huntington Beach, at this time, is approximately $15, 170,000 after de- duction of existing outstanding debt. While this is more than sufficient to acquire the water system, it is felt that.the city may find extensive use for the use of general obligation bonding powers. for construction of other needed improvements in connection with the rapid growth which the city is now ex- periencing. Many of these potential projects may not be suitable for reve- nue bond financing and will depend upon the ability of the city to finance them through the issuance and sale of general obligation bonds. Because of the possible need for the general obligation bonding for other types of pro- jects, the use of this method of financing for acquisition of the water system has not been considered further. Revenue bonds appear suitable for financing the proposed acquisition because they would be supported entirely from water revenues , they would require only a majority vote, and they would not utilize any of the city's bonding capacity. A description of revenue bonds was presented in the pre- vious report on financing water system improvements, and therefore is not repeated herein. For the purposes of this study, a coverage ratio of 125 per cent is assumed; that is, it is assumed that to be salable revenue bonds supported by the pledge of gross revenues from the system are limited to the point such that net,annual revenues after all operating expenses equal or exceed 125 per cent of the fixed annual bond service. If this coverage ratio is main- tained, it is estimated that interest for revenue bond financing with a 30- year term and approximately equal annual bond service would require an in- terest rate of approximately 3-1/2 per cent. As added security, a cash reserve equal to one year's interest and principal could be created from the proceeds of the bond sale and included -20- in the amount of bonds to be sold to finance the acquisition (see Table 9) . This reserve may be invested at interest and may be used to retire the remaining bond maturities. ESTIMATED REVENUE BONDING PRO FORMA Table 10 presents an estimated revenue and expense statement based upon 2,825 customers. Statement of revenues and expenses and net income available for bond service has been shown previously in Table 8. Bond service on a principal amount of $1 , 180,000 is estimated to average $64,000 per year. The total net annual surplus remaining after all expenses and financing costs is estimated to total $16,000 per year. This will meet the minimum annual coverage requirements necessary to support revenue bonds and may be used for improvements to the system. Table 10 CITY OF HUNTINGTON BEACH Estimated Bonding Pro Forma Revenues $150,000 Expenses 70,000 Net Revenue 80,000 Bond Service ($1,180,000 @ 3-1/2% - 30 years) 64,000 Surplus for Improvements $ 16,000 -21- RECOMMENDED METHOD OF FINANCING Based on the findings and analyses presented in this report, we recommend the use of revenue bonds for the acquisition of the Huntington Beach Water System. The city should allow at least $1, 180,000 for the costs of acquir- ing the system, associated financing costs, and reserves as shown pre- viously in Table 9 . Reserves for future improvements have not been in- cluded in the amount shown above. Such allowances should be included in the principal amount of bonds to be authorized. Where revenue bonds are used to acquire water distribution facili- ties, we recommend that an amount of revenue bonds substantially in ex- cess of the actual indicated need be authorized by the electorate. Bonds should be authorized in an amount not only sufficient to cover all costs and reserves as presently estimated, but also sufficient to make possible future improvements to the system, and to cover possible increases in the value of the system should its acquisition be delayed. Several communities have acquired water systems in the past few years and have authorized more bonds than are required in accordance with the general recommendations outlined above. The following tabulation shows the amounts of bonds authorized, the base price of the system, the amount of bonds sold in the first sale, and the amount of bonds remaining unsold. Bonds Base Price Bond Sale Bonds Entity Authorized For System 1 st Sale Unsold Arcade County Water District $ 2 ,500,000 $ 1 ,707 ,500 $ 2, 100,000 $ 400,000 City of Hanford 3,000,000 1 ,900,000 2 , 150,000 850,000 City of Petaluma 3,300,000 2 ,425 ,000 2 ,800,000 500,000 City of Vacaville 2 ,450,000 1 ,700,000 1 ,950,000 500,000 City of Lakewood 6,250,000 4,425,000 5 , 150,000 1 , 100,000 Contra Costa County Water District 13,840,000 12 ,050,000 12 ,840,000 1 ,000,000 West Kern County Water District 2 ,920,000 1 ,425,000 2 ,375,000 545,000 -22- This does not mean that all of the bonds authorized will necessarily be sold. The amounts to be sold and the timing of sales will be governed first by the amounts of funds actually required at a given time and secondly by the amount of revenues available to support the bonds proposed to be sold. One of the principal arguments in favor of revenue bond financing is that regardless of the amount of bonds authorized, the amount that can be sold successfully is limited by the amount of revenues to become available for their payment. In other words, the project to be financed by revenue bonds must be 100 per cent self-supporting and must stand up under the careful scrutiny of bond houses, financial institutions, and other possible bond purchasers. The minimum estimated bond authorization of $1, 180,000 required for acquisition of the water system is substantially less than the $1,500,000 included in the proposed bond issue of $5,700,000. The bonds not required for acquisition will not be sold in connection with the acquisition but may be reserved for possible later use in connection with improvements to the water system. -23- CONCLUSIONS The findings and analyses presented in this report lead to the general conclusion that the earnings from the Huntington Beach District system will be sufficient to meet operating expenses and to amortize revenue bonds to acquire the system based on the conditions stated in the report. Other specific conclusions obtainable in the findings and analyses are as follows: 1. The water system has a total of approximately 2,825 water customers. Because of geographical limitations little future growth can be expected. 2. We have estimated a value of the Huntington Beach water system for use in determining financial feasibility of city acquisition by consideration of numerous factors used in the evaluation of such systems. We find from these analyses that an estimated value of $1 ,100,000 as of January 1, 1963, subject to the conditions stated in this report, is a reasonable value for purposes of the study. 3. The total capital expenses necessary to acquire the water system will be approximately $1, 180,000. However, an amount of $1,500,000 should be authorized for acquisition to cover unforeseen contingencies. 4. Revenue bonds are the most equitable and appropriate method of financing the water system acquisition. Revenues from the system will be sufficient to meet all operating expenses, to amortize total acquisition costs, and to provide sufficient coverages and surplus revenues to meet revenue bonding requirements. 5. An amount of $1,500,000 for acquisition should be added to the previously recommended $4,200,000 for water system improvements, providing a total -revenue bond issue of $5,700,000 to be placed before the city electorate. -24- I i i December 12, 1960 Mr. N. M McC41len II M. 114. PkCallen Realty S ydicate P. o. Box 550 11untington Beach., California Dear I&. C eu: I am returning hem with one copy of the executed lease for our xting. ton Bch office. Tbank you very much for your cooperation in the matter. DIle' y try yours, SOUTMUI CALIFORM WMER COMPA14Y Vice p sident WWF-.ms Enc..l.a bcc: V3! C. Welmon ✓Ed Stang HT/5D Decision No. 66403 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA 1 In the matter of the Application of ) SOUTHERN CALIFORNIA WATER COMPANY )) Application No . 45872 and CITY OF HUNTINGTON BEACH ) (Filed October 15, 1963) for an order authorizing the sale of certain properties of Southern California Water Company. ) 0 P IN 10 N Southern California Water Company (applicant) seeks author- ity to sell its Huntington Beach District properties to the City of Huntington Beach (City) pursuant to the terms of the Agreement of Purchase and Sale, a copy of which is attached to the application as Exhibit II. The price is $1,225,000 subject to adjustment, if any, as provided in Section 2 of the agreement. City will assume and perform all obligations of applicant under outstanding main extension agreements listed in Exhibit C of the agreement. The book cost of the system to be sold, as shown on applicant' s balance sheet, is $1,180, 041.44. Properties to be sold by applicant to City lie entirely within the City limits, where applicant serves approximately 2,836 customers . They comprise applicant's Huntington Beach District which constitutes a single operating unit segregated from and " physically and geographically unconnected with applicant' s other water systems . -1- " A. 45872 - HT Applicant's water-distribution lines are partially paral- leled by City's own water system, and applicant alleges that owner- ship, operation and development of its Huntington Beach District system as a part of City's system will eliminate further and increasing wasteful duplication of facilities which would result from continued separate ownerships of the two systems . Applicant further alleges that the sale to City of properties pursuant to the agreement will avoid the expense and delay which would result from proceedings by the City to condemn said properties . According to the Agreement, Exhibit II, City has authorized the issuance of revenue bonds in an amount sufficient to acquire applicant' s properties and facilities , and the parties desire to avoid the expense, delay and other difficulties which could result from condemnation proceedings . A letter, dated October 18, 1963, from the City requests immediate action on the instant application. Exhibit IV shows that applicant' s Huntington Beach District rates for water service and those of City are fairly comparable; Southern California' s minimum monthly charge is $1.65 for usage of 500 cubic feet; City' s minimum charge is $2.25 for 1,000 cubic feet . Southern California's monthly charge for 1,500 cubic feet is $4.25 and City' s, $3.25 . City' s rates are lower than applicant' s for larger usages . I -2- A. 45872 - GF The Commission finds that: 1. Public hearing is not necessary. 2. The granting of the application would not be adverse to the public interest. 3. The public interest requires that the effective date of the ensuing order be its date. The Commission concludes that the application should be granted. Applicant is put on notice that, in future rate proceedings, the Commission will appropriately consider any income tax effects resulting from the authorization hereinafter granted. The action taken herein is not to be construed to be a finding of the value of the properties herein authorized to be transferred. O R D E R IT IS ORDERED that: 1. Southern California Water Company is authorized to enter into the Agreement of Purchase and Sale attached to this application as Exhibit II, and to thereby sell its Huntington Beach District water-system properties to the City of Huntington Beach pursuant to the terms of said Agreement. 2. When applicant shall have disposed of its Huntington Beach District properties, and within ten days thereafter, applicant shall notify the Commission in writing thereof. Upon such notification, I -3- 1 A . 45872 - HT/SD Southern California Water Company shall be relieved of all its responsibilities as a public utility within its Huntington Beach District, other than refunds of customers ' deposits for service as set forth in the agreement. The effective date of this order shall be the date hereof. Dated at San Francisco , California, this 9,eza- day of nFr.FMRFR 1963. WILLIAM M. BENNETT President PETER E. MITCHELL EVERETT C. McKEAOE FREDERICK B. HOLOBOFF Commissioners Cow^i!-sioner George, G. Grover present but not voting.. as a True C6PY __.,._._.._... ---- ----- - -- ASSM:iA T SECRETARY PUBLt-C 'UTILIT9ES COMMISSION S`Z ATt IMF CDALIFORNIA -4- I f Y MEMORANDUM This report on the operations of the Huntington Beach District of the Southern California 4ater Company for the recorded year 1950 and the estimated year 1951 was prepared by the Public Utilities Department, under the direction of C. T. Mess, Assistant Director of Public Utilities. In the Hydraulic Division under the supervision of M. R. MacKall, Hydraulic Engineer, the chapters covering revenues, operating expenses, and customer distribution, usage, and rates were prepared by Associate Engineer E. F. Catey, assisted by Assistant Engineers W. J. Cavagnaro and H. H. Heidrick. In the Valuation Division under the direction of C. G. Ferguson, Valuation Engineer, the chapters covering capital and rate bases (except for the working cash allowances) and depreciation expense and reserves were pre— pared by Associate Engineer R. L. Davis. In the Research Division under the direction of C. W. Mors, Research Engineer, Associate Engineer D. C. Neill was responsible for the chapters cov- ering general and miscellaneous expenses, taxes, and summary of earnings. He was also responsible for developing the working cash allowances included in the rate bases. Associate Engineer J. M. McCraney was responsible for the chapter covering introduction, history, and present operations. The Research Division was also responsible, under C. T. Mess, for the general coordination of the report. I REPORT ON THE RESULTS OF OPERATIO14S OF SOUTHERN CALIFORNIA WATER COMPANY HUNTINGTON BEACH DISTRICT TABLE OF CONTENTS -Page Chapter No. I - INTRODUCTION, HISTORY AND PRESENT OPERATIONS - - - - - - 1 II - OPERATING:REVENUES - - - - - - - - - - - - - - - - - - - - - 7 III '- MAINTENANCE AND OPERATING EXPENSES EXCLUSIVE OF GENIAL AND DEPRECIATION EXPENSES AND TAXES - - - - - - - - - - - - - - - - - - - 9 IV - GENERAL AND MISCELLANEOUS EXPENSES - - - - - - - - - - - - ,- 11 V - TAXES - - - - - - - - - - - - - - - - - -. - - - - - - - - - 13 VI —FIXED CAPITAL AND RATE BASES. - - - - - - - - - - - - - - - 14 VII - DEPRECIATION EXPENSE AND RESERVES - - - -- - - - - - - - - - 21 VIII - SUNDRY OF EARNINGS - - - - - - - - - - - - - - - - - - 22 IX —CUSTOMER DISTRIBUTION, USAGE, AND RATES - - - - - - - - - - 23 INDEX TO CHARTS AND TABLES Chart Follows No. Page 1 - Map of property locations - - - - - - - - - - - - - - - - 2 2 - Company Organization Chart - 2 3 - District Organization Chart - - - - - - - - - - - - .- - - - 3 4 - Map of Huntington Beach District - - - - - - - - - - - - - 3 Table No. 2-A - Operating Revenues, Years 1950 and 1951 - - - - - - - - - - 8 3-A - Operating Expenses, 1949 and 1950 Recorded, 1951 Estimated - - - - - - - - - - - - - - - - 10 4-A, - General and Miscellaneous Expenses, 1950 Recorded and 1951 Lstimated - - - - - - - - - - - - - - 12 5-A - Summary of Taxes, 1950 Recorded and 1951 Estimated -- - - - - - - - - - - - - - - - - - - - - 13 5-B - Computation of State Corporation Franchise and Federal Income Ta.xes - - - - - - - - - - - - - - - - - - 13 INDEX TO CHARTS AND TABLES (Continued) Table Follows No. Page 6-A -. Analysis of Plant, Year 1949 - - - - - - - - - - - - - - - 17 6-B -.Analysis of Plant, Year 1950 - - - - - - - - - - - - - - - - 17' 6-C - Analysis of Plant, Year 1951 •- - - - - - - - - - - - - - - - 17 6-D -- Adjusted Weighted- Average Fixed Capital Estimated for Years 1950 and 1951- - - - - - - - - - - - - - - - - - - - 18 6-E - Weighted Average Rate Bases, Years 1950 and 1951 Estimated - - - - - - - - - - - - - - - - - - - - - 20 7-A -.Depreciation Expense - Basis and Computation, Years 1950, and 1951 Estimated— - - - - - - - - - - - 21 7-B - Depreciation Reserves for- 1950 and 1951 Estimated for Rate Base Calculations - - - - - - - - - - - - - 21 8 A - Summary of :Earnings, Year 1950 Recorded Year 1951 Estimated - - - - - - - - - - - - - - - - - - - 22 9 A - Domestic and Coxamercial viater Use Table, a July 1949 through June 1950 - -•- - - - - - - - - - - - - 25 9-B - Industrial Water Use Table, July 1949 r, through June 1950, - - - - - - - - - - - - - - - - 25 9-C - Municipal Water Use Table, July 1949 through June 1950 - - - 25 9-D - Irrigation Water Use Table, July 1949 through June 1950 - - 25 9-E - Data for Computing; Extra Revenue from Large, Meters, July 1949 through June 1950 - - - - - - - - - - 25 9-F - COfipPresentandhProposedrGeneral-MetereRatesr - - - - - - 25 CHAPTER I INTRODUCTION, HISTORY, AND PRESENT OPERATIONS A PURPOSE OF REPORT The purpose of this report is to present to the Commission, for review, estimates of the operations and earnings of the Huntington Beach District of Southern California Water Company in connection with Application No. 31696 for authority to increase rates in that district. B - SCOPE OF REPORT The report presents in some detail the revenues and expenses as recorded for the year 1950 and as .estimated for the year 1951. Rates of return are shown for the two periods using the depreciated average rate bases developed herein. For the estimated year 1951 the results of operation are shown based on both the presently effective rates for water service- and the rates proposed by the applicant. In addition. to data dealing with revenues, expenses, rate bases, and rates of return, the report includes general'Iinfor- ..• mation regarding the company and the Huntington Beach District and -a section on customer distribution, .usage, and rates. C GENERAL The company was incorporated is California on December 31, 1929, under the name of American States V3ater Company of California. On December 18, 1936, the name was changed to Southern California Water Company. Water serv- ice is rendered to various ,communities in Southern California and, in addition, to South Sacramento in Northern California. The location of these communi ties is shown on Chart 1. The company also is engaged in the distribution of electric energy in the vicinity of Big Bear Lake, San Bernardino County, and in the manufac- ture of ice at Barstow, which is located in San Bernardino County. The breakdown between water, electric, and ice revenues for 1950 was as follows; 1950 Operat- % of ing Revenues Total Water $2,528,076 92.4% Electric 163,790 6.0 Ice 44,789 1.6 Total 2,736,655 100.0 -1- '7 I - INTRODUCTION, HISTORY, AND FRESENT OPERATIONS The stock of. the Southern California Water Company is rather widely distributed. At the end of i950 there were-1,777 common stockholders and 193 preferred stockholders, the largest of whom owned slightly more than 2% of the total voting shares. At that time there were 100,000 shares of $25 par value- preferred stock outstanding and 440,179 shares of $5 par value common either outstanding or issuable in exchange for outstanding shares of $25 par value common, in accordance with a five-to-one stock split plan effec- tive September 22, 1950. ' The organization .of the company is shown on Chart 2. The general offices of the company are located at 1206 South Maple Avenue, Los Angeles, California. D - HISTORY OF THE 'HUNTINGTON BEACH DISTRICT According to available records, water service in the Huntington Beach.District of the Southern California Water Company was begun in 1903 by the Huntington Beach .Company. This latter company was incorporated under h the laws of the State of California on May 4, 1903, primarily for the pur- C pose of acquiring and marketing a large tract of -land in Huntington Beach. 3 As an aid in the sale of real estate this company offered water, telephone, and electric utility service. On August 29, 1914, the Huntington Beach Water Company was incor- porated .for the purpose of taking over and operating the water utility busi. ness of the Huntington Beach Company. Similarly, the Huntington Beach'' Telephone Company was organized in 1916, and in 1920 took over Huntington Beach. Company telephone properties which were subsequently acquired by Associated Telephone Company, Ltd., in 1929. The electric utility ,plant was sold in 1914 to the Pacific Light and Power Corporation. The East Side ,later Company began operations in the Huntington Beach area in 1904, serving the Vista. Del Mar tract located east of the city. The system was, installed by a real estate developer and operated by S. H. Finley. In Burch, 19251 the sale of this utility to the Huntington Beach Water Company was authorized by Decision No. 14646 of this Commission. In 1929 the Huntington Beach Water. Company was acquired by the American States Water Service Company, now known as the Southern California Water Company. -2- CHART 1 SOUTHERN CALIFORNIA WATER COMPANY n I LOCATION OF WATER PROPERTIES 1 o I 1951 Q SAC RAM ENTO\ SO.SACRAME•O T SAN FRANCISCO LEGEND �.\ COMMUNITIES SERVED BY COMPANY ® PROPERTY TRANSFERRED TO CITY OF L.A. ^ O \ DECISION NO. 45965 \ •\ Q PRINCIPAL CITIES FOR LOCATION ONLY Q FRESNO 41 O / BARSTOW 0 OJAI F Q SANTA BARBARA BEAR VALLEY QLOS ANGELES NILAND AREA IN DETAIL BELOW CALIPATRIA QDISEGO_- - LOS ANGELES AREA f I 0 5 10 15 i --- �-- SCALE IN MILES SUNLAND-TUJUNGA� p GLENDALE \. p PASADENA LOS ANGELES WALNUT GROVE CITY LIMITS-- a CLAREMONT / HIGHIANDw C SAN BERNARDINO0 '+PALMS 1 ■WILMAR _ 0 \\ j POMONAQ O BLOOMINGTON ULVER CITY / _ SAN BERNARO/NO CO. SAN TA M_ONIC -� F----- R/VERB/L7E'CO.NI I FLORENCE GRAHAM ��' � NORMjANDIE! BELL ) / Q RIVERSIDE y1 1 SO. WCLARA ST. LOS ANGELES CO' r ' LENNOX� L.A. ___ I ,HOLLYDALE I— ORANGE CO. �\ I ^ GARDEN I "-L AWN DALE PLACENTIA / ARTESIA / ATWOOD LONG TESIA■�:CYPRESS OLIVE BEACH ` . STANTON Q / LOS ALAMITOS Q SANTA ANA A/ SAN p`EDRO HUNEACH N BEACH C� � \\\ LACUNA ! \ BEACH {I M JMM 510912 5-801 S-949-50-51-56 CHART 2 SOUTHERN CALIFORN.IA WATER COMPANY ORGANIZATION CHART' 1951 BOARD OF DIRECTORS GENERAL AUDITORS COUNSEL COUNSEL PRESIDENT PRESIDENT (Finance) 1 ICE-PRES. V PERSONNEL AND PURCHAS IN CHIEF AND ASST. VALUATION SUPS. OF DIRECTOR CHIEF ACC AGENT ENGINEER GEN. SUPT. GEN. SUPT. ENGINEER CONSTRUC- OFFICER TION ASSISTANT ENGZISEII2 INSPECTOR (VALUATION DISTRICT BILLING SANITARY ASSISTANT PIPE-LINE STORE- CHIEF PRODUCTION TREASURER AUDITOR SUPERVISO ENGINEER ENGINEER SUPT. )LEPER CLERK SUPT. Production) i ASST. PURIFICA- COST ASST. MATERIALS ASST. ENGINEIIi PIPE-LINE CHIEF PUMP TION ACCOUNTANT SECRETARY ACCOUNTANT ENGINEER (Conatr.co FOREMEN CTRII)IAN ME(71ANIC MECHANIC (Distr.) ordi nator) ADIST.SUP'T I O N SUP E R I N T E N D E N T S Eastern Orange Central Division- Division Division Claremont, ton DIST.SUPTearlley Highland alipatriaater,ectric Nslard DI S T IR I C T SUP E R I N T E N D EN TS DISTRICT roL' A. Bell Florence Lennox Gardena-ndie Graham Lawndale Gardena- Iswndale P. D I S T R I CT ISUP ERI NT E N D E INTS Culver Placentia, Wilmar, is ra South City Atwood, Walnut Street Hollydale Sacramento Ojai Olive Grove Orange Division comprises Los Alamitos, Stanton, Cypress, Huntington Beach, Artesia, and South Artesia. a. Organization of the caapany subsequent to sale of properties to the City of Los Angeles - Decision No. 45965. .l M M 510912 5-BBI, 949,950,951.958 I - INTRODUCTION, HISTORY, AND PRESENT OPERATIONS E - HISTORY OF RATE REGULATION Since this Commission undertook the regulation of water utilities in California on March 23, 1912, the domestic water consumers in the Huntington Beach area have had four different sets of rates. By Decision No. 5972 in Application No. 4071, decided December 3, 1918, the Commission authorized an increase in water rates. These rates remained in effect until 1928 when the company filed lower rates to be effective March 1, 1928. The rates were again lowered in October, 1939, to the schedule currently being charged. F - HUNTINGTON BEACH DISTRICT OPERATIONS Organization As shown in Chart-3, the Huntington Beach District is operated under the supervision of DGr. Edward Stang, Superintendent of the orange Division. The Orange Division includes the systems of Huntington Beach, Los Alamitos, Stanton, Artesia, South Artesia, and Cypress, as shown on Chart 2. The district office, which is located at 220 Main Street, r Huntington Beach, handles all matters pertaining to applications for serv- ice, collections, and service complaints. The billing of customers is done in the Los Angeles general office. Area Served The Huntington Beach District serves the incorporated city of Huntington Beach and contiguous unincorporated territory. The general loca- tion of the district may be determined by reference to Chart 1. A map of the Huntington Beach District is shown in Chart 4. The 1950 census for the city of Huntington Beach shows a population of .5,258; however, the company estimates that it served a population of 6,920 at the end of 1950. c —3— tl CHART 3 SOUTHERN CALIFORNIA WATER COMPANY n CIRGANIZATION OF HUNTINGTON MACH DISTRICT (As of•August, 1951) Vice President and General Superintendent Hoit C. Vicini 1 Service Foreman District Superintendent- 2 Servicemen Edward R. Stan 1 Cashier Clerk # Also Division Superintendent' of Orange County Division. 3� Also Foreman of Cypress, Los Ajpa tos, Stanton, Artesia, and South Artesia Systems. JI,DA/DCN 510912 CHA SOUTHERN CALIFORNIA WATER COMPANY HUNTINGTON BEACH DISTRICT 1951 It HLINTINGTON BEACH 8--ID, AVE iLp RIOA A V E. r....0 f ..� i y lis! Ir(e• .� t It L�� - - EN A 0[LAW AN[ i El CALI 0 R N :1 A t; 4 A V E. cl, 0 R .W Ix � CL4YPLANTF, � VE. J F ffN On OR nu mz ALABAMA 0 LANE Li Is JLIJ L-,!) rrSOT, I)\\L\ AVE `7 1 5 1 A L W, S. v 0 z C. & > RESERVOIR BOOSTER PLANT O GOLDENWESY L s mimsrEA -VE f GOLDENWEST PLANT ~ RESERVOIR CEDAR $1. L IJ "`"r OA 0 [IF] u PALM AV9. LLLLL C.E.., z 51. W '00 '? % v VO J> C, z IL SCALE IN FEET 0 400 B00 1200 lew 2000 JMM510912 5— I -- INTRODUCTION, HISTORY, AAD PRESENT OPERATION The water supply is obtained entirely from four company-owned wells located at the Goldenwest Plant and one well at the Clay Plant. By�.`.. . reference to Chart 4 the location of these plants may be established. Well data are as follows; 'GOLDENWES T PLANT Static Turbine Water Capacity Well No. Size Depth Level GPM 1 1411 2801 15 t 1,000 2 16t, 2o61 151 600 3 18" '5151 401 1•,100 4 16" 515' 40' 1,150 CLAY PLIANT Static Turbine Water Capacity Well No. Size Depth bevel GPM 3 1211► 2621 511 530 In 1949 Goldenwest ;cells Nos. 1, 3, and 4 produced 39%, 45%,, and 16%, respectively, of the total water produced during the year. . ',.+Tell No. l • is currently retained- -for standby service and Tells Nos. 3 and 4 furnished 8q% and 19% of the total water produced in 1950, the balance being from. Well No. 1. . Well No. 3 at Clay Plant and 'Rell No. 2 at Goldenwest produced no water during 1949 and 1950, being maintained for standby purposes only. Water produced from the standby wells feeds directly into the distribution system whereas water from Wells Nos. 3 and 4 at Goldenwest is pumped into a treatment tank prior to entering the system. Sea level elevation at Goldenwest Plant is about 15 feet and at Clay Plant about 25 feet. Purification Water from Wells Nos. 3 and 4 at the Goldenwest Plant is aerated into a forebay tank where it is then chlorinated and the sand is settled out. Chlorinators are in service feeding according to the volume of water produced. The main function of chlorination in this system is for bleach- ing purposes. —4— I - -INTRODUCTION, HISTORY., AND FRESENT OPERATIONS Storage and Distribution 'The -main storage, reservoir i$,"a 1,100,000-gallon "concrete structure located on the north side of the city at ,a sea level•elevation of approximately 85 feet. A 250,000-gallon redwood treatment' tank' is located at the Goldenwest pumping station approximately one mile farther north. All waterproduced is generally fed through the main storage reservoir and thence into the distribution system. ' The following tabulation ,p:tates the number of feet of distribution pipe in the system,., excluding services, at the end" of 1950,'.,classified by type and size of pipe: Feet of Distribution Pipe by Type and Size - Huntingtonl$each District Steel, or Size in Cast Riveted Standard Welded Total Inches Iron Steel Steel Casing Wood Trnsi_ttee Feet Per Cent 2-22 - - 33 315. - ^+.: 33.,315 16.0% 3 35,880. - - 35,880, 17.3 4-5 9,580 769 23,857 8,940 665 4,176 47,987 23.1 v 6-7 16,017 "89 6,570 7,708 2,707- . 7A 5 40,966 19.7 8-9 1i994 -.` 8,810 300 " 10,744 38,848 18.7 . 10-12 1;380 - - 3t283 1,375 31564 91602 4.6 14-16 - - 167 1 0 Z 11199 0.6 Totals 45,971.. ` 58 ,;22', 0,908 5� 7,3.9 207,797 0-0-.-d Per Cent 22.1% 0.4% 48.0% 2.4% 13.2% 100.0%., " Within the past 10 years all types of pipe �in service excepting cast-iron and transite have been declining in footage. The number of feet of pipe in service of 2- and 3-inch size has also been declining, offset by " the installation of larger size cast-iron and tran'slte pipe. Customers All of the 1,979 customers (excluding hydrants) being served at the end of 1950 .were metered;. By 'classes of service, the customers as of the end of 1950 were segregated as f ollows: Per Cent Customers of Total Domestic and Commercial 1,730 87.4% Industrial 201 10.2 Irrigation 12 ..6 Municipal 36 1.8 9 9 10000 -5- I - INTUDUCTION, HISTORY, AND PRESENT OPERATIOM r Fire Protection As of December 31, 1950, the company owned and maintained 218 fire hydrants connected directly .to its lines in the Huntington Beach District. Due to' the',,potential fire hazard existing in the oil fields located within the' company's service area, the company has provided a relatively high ratio of hydrants per mile of main in the system. -6- CHAPTER II n OPERATING REVENUES A - S=fi ARY OF RECORDED REVENUES BY-CLASSIFICATION.CF SERVICE The revenues received by this utility from its operations in the Huntington Beach District are, obtained from the sale of water to residen- tial, business, industrial, and municipal consumers on a meter rate basis; from municipal fire hydrant rentals on a fZwt rate basis; and from miscel- laneous other sources to a minor extent. A summary of the operating revenues received under each classi- fication of service for the years 1945 through 1950, together with other statistical information obtainable from the company's records and annual reports to the Commission, is shown in the following tabulation: . Ac. : Classification No, of Service 1945 1946 1947 1948 1949 1950 ; Recorded Operating Revenue(a) R-1-B Com. Pieter Rate � $29,266 02,072 $34,921 .35.547 $35,760 $37,015 A-2-B Indtl Meter Rate 18,755 180799 19,845 22,693, 21,272 19,017 R-3 Mun. Hydt. Rentals 4,209 4,212 41231 4,334 4.513 4,739 R-5 Mun. Meter Rate 2,358 2,185 2,691 2,507 2,434 3,068 R-6 Irrig. Meter Rate - - - - 1,540 19605 R-1 Misc. Earnings - - - 1 507 280 74 Total Operating Revenue 54,%8 57,268 61, 6611598 65-)7995,5 Index 100.0 104.9 113.0 112.0 120.5 120.0 Item (b) Other Statistics Water Delivered 420,795 443,507 489,224 57-114.,751 496,676 501,898 Avg. No, of Customers (b) 1,518 1,598 1,'712 1.,822 1,885 1,939 Average Delivered/Customer 277 278 236 283 263 259 Avg. Rev./100 C.F. Del. 0.130 $0..129 $0.126 $0.129 $0..132 $0.131. Avg. Rev./Customer 35.96 35.84 36.03 36.55 34.91 33.79 (a) Rounded to nearest dollar. (b) In units of 100 cubic feet. -7 II - OPERATING REVENUES B - PERCENTAGES OF RECORDED R EVENUES The percentages for the various groups of recorded operating revenues classified as listed in the preceding tabulation, and the average percentage of each classification for these years, are shown as follows: : Ac. : CLissification : Percentages 'of Recorded Operating evenues No, of Service : 1945 1946 :Average: R-1-B Com.Meter Rate 53.61% 56.00% 56.61% 53.39% 54.35% 56.50% 55..08%. R-2-B Ind 11 Meter Rite., 34.36 32.82... : 32.17 34.08 32.33 29.03 3246 R-3 Mun.Hydt.Rentals 7.71 7.36 6.86 6.51 6.8(, 7..23 7.09 R-5 Man. Meter.Rate 4.32 3.82 4.36 ' 3.76 3.70 4.68 4.11 R-6 Irrigation deter Rate - - - 2.34 2.45 .80 R-7 Miscellaneous Earnings - 2.26 0.42 .11 .46 .Total , M.00 100.00 100. 00. . . 00. C - COMPARISON OF OPERATING REVENUES UNDER FRESENT AND PROPOSED RATES In order to determine the effect of applying the rate schedules proposed by the applicant, a comparison has been made of the operating revenues obtainable under the present and the proposed rate schedules. Table 2-A shows a summary of operating revenues for each classi- fication of service,as recorded for the year 1950 and as estimated and adjusted for normal operation and applied to the year 1951 for present and proposed rates. Each of the estimates assumes a full year's operation under the particular rate being studied. The table also shows corresponding increases in revenue that would result from normal operation for a full year under the rates proposed by applicant. These increases are derived from a study of the character of use as shown in the water use analysis in Chapter IX of this report, together with comparisons of the actual water use in 1951 up to the time this report was prepared. -8- TABLE 2-A SOUTHERN CALIFCRNIA WATER COY2M HUNTINGTON BEACH DISTRICT OPERATING REVENUES YEARS 950 AIVD 1951 • 1950r 951 ; . Recorded : :Increase Due to : Ac. Classification Revenue : Estimated Revenue : Proposed Rates ; : No. of. Service :Pres.Rates:Pres..Rates:Prop.Rates:Amount ;Per Cent: R-1-B Commercial Meter Rate $37,015 $40,800 71,200 $30,400 74.5% R-2-B Industrial Meter .Rate 19,017 17,500 27,900 10,400 59.4 R-3 'Municipal Hydrhdt::'RentAls- 4,7.39.,.,,.. . ..-4,g5�?. .,. .. 4,850 0 0 R-5 Municipal deter Rate 3,068 3,300 ":,4,900 1,600 48.5 R-6 Irrigation Meter Rate 19605 3,400 6,300 2,900 85.3 R-7 Miscellaneous Earnings 74 150 150 0 0 Total 5,518-. 70,000 115,300 45000 64.7 WJC 510911 CHAPTER III MAINTENANCE AND OPERATING EXPENSES EXCLUSIVE OF GENERAL AND D EFRECIATION EXPENSES AND TAXES ;r• A - RECORDED EXPENSES BY GROUPS OF ACCOUNTS A summary of the expenses, as discussed in this chapter, of main twining and operating the company's Huntington Beach system for the years 1945 through 1950, together with other statistical information obtainable from .the company's records and annual reports to the Commission, is shown in the following tabulation: Group of Accounts 1945 1946 1947 1948 1949 1950 Recorded OEerating and Maintenance Expense a Source of Supply I - ' Z 40 120 1 Pumping 5,442 6,872 7,395 8,391 9,593 10,855 Purification 104 179 742 1,851 3,301 3,839 Trans. and Distrib. 2,692 5,444 7,311 11,008 9,585 12,020 Commercial 3> 30 �1.233 4, 69 4,758 4,,919 5,238 Total 1118 16,61.8 19 26,008 27,440 32,072 Index 100.0 142.4 169.8 222.9 235.2 274.9 It- Other Statistics Water Produced b 514,311 568,616 613,508 1,8 36,211 654,177 Water Delivered 420,795 443,507 489,224 514,757 496,676 501,898 % Unaccounted for 18.2% 22.0% 20.3% 22.2% 21.9% 23.3% Avg. No. of Cust. 1,518 1,598 1,712 1,822 1,885 1,939 Avg. Produced/Cust.b 339 356 358 363 338 337 Avg. Delivered/Cust b 277 278 286 283 263 259 Avg. Exp./100 C.F.Prod.c $ 0.023 0.029 $ 0,032 $$ 0.039 0.04.3 0.049 Avg. Exp./100 C.F. Del.c 0,028 0.037 0,041 0.051 0.055 0.064. Avg. Exp./Customerc 7.69 10.40 11,58 14.27 14.56 16.54 a. Rounded to nearest dollar. b. In units of 100 cu. ft. c. For above groups of accounts only. -9- III - MAINTENANCE AND OPERATING EXPENSES EXCLUSIVE OF GENERAL AND DEPRECIATION EXPENSES AND TAXES B RECORDED, ADJUSTED AND ESTIMED MAINTENANCE AND OPERATING EXPENSES, BY ACCOUNTS. An investigation of the accounts and other records of this system was made by the Commi.ssionts engineers to determine if recorded items of expense are proper charges. Table 3-i shows a summary of maintenance and operating expenses and uncollectibles, by accounts, as recorded for the years 1949 and 1950" and as estima-;ed and adjusted for a full yearts normal operation and applied to the year 1951. -lo- i CHAPTER IV GENERAL AND MISCELLANEOUS EXPENSES The general and. miscellaneous expenses of the Huntington Beach District consist of' direct charges incurred within the district and, A -pro- ration of the general ,office expenses of the coifpanyt s main office iry Los Angeles. The direct charges in the Huntington Beach District include a portion of the pay and expenses of the office personnel, office supplies, and maintenance; telephone and postage; gas and electricity in the office, . , Public Utilities Commission expense; provision for pensions, group life insurance and hospitalization; automobile expenses; and repairs to general structures and equipment. - The expenses in the general office include the pay and expenses of the general officers, directors, and general office employees; office supplies; printing and stationery; telephone, telegraph, and :postage; law expense; pension provision, group life insurance and hospitalization; other general- expenses, such as costs of publishing notices of dividend declarations, trusteets fees and transfer agent's fees; automobile expenses; general office. rent; auditing; insurance; and indirect charges for construction. From the total Los Angeles general office expense a portion is assigned to the company's electric and ice operations and also a portion to the Martin & Goold Water Corporation, a wholly owned operating subsidiary. The .amount assigned is based upon a study,which the,company reviews periodically. The balance of the general expensesi' 'after.deducting the above amounts, is considered applicable to the water department. The company then determines the amount of general office expense to be prorated to each district of the company by applying to the total general office expense attributable to the water department the ratio of the particular districtts gross revenue to the total water department gross revenue for the preceding year. The ratio used f6r.•1950 was,2. .76%... Due to the inherent disadvantage of using a revenue basis of proration for rate fixing purposes, the arith- metical average of the following three ratios has been adopted herein for 1951 estimated: (1) fixed capital, excluding general capital, (3) active meters, and (3) total expenses, excluding general, taxes, and depreciation. The ratios are based upon the relationship of the district to the total water department and reflect the assumption that the sale of certain properties to the City of Los Angeles took place prior to January 1, 1951. The resulting ratio for 1951 is 4.18%. _11- TABLE 3 A SOUTHERN CALIFCRNIA WATER COMPANY HUNTINGTON BEACH DISTRICT OPERATING EXPENSES 1949 AND 1950 RECCRDID, 1951 ESTIMATED Recorded :Estimated :No. Classification 949 1950 : 1951 Source of Water Su E-7 Repairs to Ground Supply 40 8 .120 3 50 Total 40 120 50 Pump E-9 Pumping Labor 1,502 1043 1,540 E-10 Miscellaneous Labour 135 38 150 E-12 Power Purchased 7,221 8,644 9,460 E-13 Lubricants, etc. 28 59 90 E-14 Misc.-Pumping Sta. Supplies & Expenses 146 278 290 E-15 Repairs to Primary Pumping Equip. 254 . 451 11000 E-18 Repairs to Pumping Sta. Buildings 302 42 150 Total 9,595 10,855 12,700 700 Purification E-19 Purification Labor 153 188 140 E-20 Purification Supplies and Expenses 2,860 3,.463 4,650 E=21 Repairs to Purification Plant 288 188 80 Total 300 3,839 4,870 Transmission and Distribution E-22 Superintendence 1,827 2,187 3,190 B-24 Meter and Fittings Dept. Supplies and Expenses 1,833 1,677 2,700 E-25 Street Dept. Supplies and Expenses 1,360 1,027 340 E-26 Customers' Premises Expenses 316 214 150 E-27 Miscellaneous Supplies and Expenses 131 75 130 EE-29 Repairs to Reservoirs, Tanks, .etc. 51` 24 50 E-30 Repairs to Distribution Mains 2,994 5,761 3,100 E-31 Repairs to Services 951 883 1,200 E-32 Repairs to Hydrants 122 172 170 Total 9,585 ,020 11,030 Commercial E--34 Collections, Reading Meters, etc. 4,593 4,705 5,500 E-35 Promotion of Business Expenses 326 453 390 Total 4,919 5,238 - 5,890 Subtotal Expenses, Ac. 7 Ac. 35 27,440 32,072 34,540 Uncollectible Water Bills, Present Rates 168 99 100 Uncollectible Water Bills, Proposed Rates - - 170 EFC 510912 IV - GENERAL AND MISCELLANEOUS EXPENSES The Huntington Beach District is one of. si:K systems operated as the Orange Division with headquarters located. in Huntington Beach. Table 4-A is a detailed summary, by accounts, of general and miscellaneous expenses as reported for 1950 and as estimated for 1951. The year 1950 As shown with a breakdown as between the .recorded direct and indirect charges, with the indirects representing 62,606:53 or 29.9%, of the ' total charges of $8,725.27 for that year. The 1951 estimates reflect the January, 1951 wage increase and trends of other expenses. In the case of Public Utilities Commission expense, the total estimated company cost of this proceeding has been spread over five years to include only an average years expense in the estimate. Some accounts wherein the charges vary considerably from year to year, have been estimated on an 11average year" basis. Expenses charged to general expenses and ,not considered properly includable for rate fixing purposes have been excluded. At the request of the Commission staff the company has reviewed the amounts credited to general expense as charges against its ice and electric operations and also the amount of indirect expenses charged to construction. f In each case the credits indicated bythe study were greater than the credits recorded in the year 1950. These larger credits have been used for the year 1951 estimated. Total general and miscellaneous expenses as estimated for 1951 are $9,820, of which $6,200 or 63.1%. is direct expense and the balance'of $3.;620 or 36.9% of the total is the amount apportioned by allocation from the general office. -12- 'TABLE 4-A SOUTHERN CALIFORNIA WATER COMPANY HUNTIVGTON BEACH DISTRICT GENERAL AND MISCELLANEOUS EXPENSES 1950 RECORDED AND 1951 .ESTIKATED :Ac. . 1950 Recorded 1951 :No. Account Prorated Direct Total :Estimated: E-36 Salaries of General Officers $1,086.12 - $1,086.12 $1,640 E-37'Salaries of General Off.Clerks 982.72 1,413.12 2,395.84 3,030 E-38 Misc.Gen'l Office Supplies i:rd Expenses 514.28 119057.44 571.72 1,470 E-39 Law Expenses - Cenral 75.22 - 75.22 130. E-40. Public Utilities Comm.Expenses - 809.80 809.80 359 E-42 Relief Dept. and Expenses 103.78 935.27 1,039.05 10210 E744 Other General Expenses 515.50 1,887.79 2,4O3.29 21990 E-45 Insurance 108.26 - 108.26 130 E-46. Repairs to General Structures - - - ];-47 Repairs to General Equipment -- - - 10 E-48 Undistributed Adjustments - 4 Balance 15,32 ( 6� 8.22) (1 180) E-49 Extraordinary Repairs 4.19 4.19 - Total General and Miscellaneous Expenses 2,606.53 691.18.74 8,725.27 9,820 Average Cost per Customer 4.50 4.81 Per Cent of Gross Revenue (Present Rates) 13.3% 14.E (Red Figure) DCN 510913 lip-A CHAPTER v TAXES The taxes applicable to the Huntington Beach District consist of several types of taxes levied by city, county, state, and federal taxing authorities. They include both direct and prorated charges. The following tabulation sets forth the recorded taxes applicable to the district for 1950 and estimated taxes for 1951. For the latter year the taxes are shown under both present and requested water rates. Total Taxes — Huntington Beach District Period Amount 1950 Recorded 4,664.89 1951 Estimated at Present Water Rates 482 1951 Estimated at Requested Water Rates 22.0,46 Table 5—A shows the detail of the above totals. Ad valorem taxes are accrued by the company on a fiscal year basis, from July 1 to June 30. Hence the 1951 calendar year amount represents the average of the actual taxes for 1950-1951 and the estimated taxes for 1951- 1952. The 1951-1952 taxes were estimated using the actual assessed valua— tion and tax rates applicable, where such information was available. The local franchise tax payment has been estimated for 1951 to be in the same ratio to total gross revenue as was actually experienced in 1950. General office taxes for the district are comprised of an allocable portion of ad valorem taxes on general property located in Los Angeles County and social security taxes on the general office pay roll. The social security taxes for district personnel are charged into the accounts along with the pay roll charges. The 1950 state corporation franchise tax reflects the tax appli— cable to the previous yearts income,, whereas the 1951 estimate is computed in connection with the calculation of the federal income taxes, shown on Table 5—B. The interest deduction, preferred stock dividend credit, and $25,000 surtax exemption are allocated portions of the company total, based upon the ratio of fixed capital in the district to the total company fixed capital. It should be noted that the negative income tax amounts shown for the year 1951 at present rates represent the reduction in taxes otherwise payable by the corporation as a whole by reason of operations in the Huntington Beach District. —13— TABLE 5-A SOUTHERN CALIFORNIA WATER COMPANY HUNTINGTON BEACH DISTRICT SUL AaRY OF TAXES 1950 RECORMED AM 19 1 EST12AATED 1951 Estimated 1950 :Present:Proposed: Class of Tax :Recorded: Rates : Rates Ad Valorem 3,335.11 $ 3,650 3,650 Local Franchise 117.00 132 226 City License 12.00 U 12 General Office Taxes 172.71. 330 330 State Corporation Franchise 589.07 (770) 1,546 Federal Income 439.00 (g:3$2) 1b.82 Total 4,664-89 482 22,746 _ (Red Figure) _ DCN/JIM 510917 CHAPTER VI FIXED -CAPITAL AND RATE BASE A GENERAL This chapter deals with Construction Work in Progress, Materials and Supplies,',and Working Capital as well as with Fixed Capital and Rate,,. Base. It contains a number of tabulations, designed to be reasonably self- explanatory, which serve to simplify the text and reduce .it.below what _ otherwise might be essential. Weighted average figures have been used.almost entirely - the , principal exception having to do with the Depreciation Reserve .- in arriving at the respective amounts contained in the rate base. By.the use of.weighted averages each item is reflected, as correctly as possible, in its proper ; relation to the years operations. They have been computed by .either of.,two methods: one, byderiving the average of monthly averages of month-end : balances for the year, the other by adding to the beginning�of-year balance the monthly net additions after factoring them for the period between -the end of that year and the middle of each of the respective months involved. Both of these methods yield identical results when the additions during any month are -considered as being centered around the middle of that month - a premise adhered.to throughout., The estimates prepared by the staff of amounts to be included in the rate bases for 1950, and 1951 estimated, and covering the items . particularly mentioned in the first sentence of this chapter, rest primarily upon statements of month--end balances, monthly debits and credits, and adjustments which are :contained in pertinent accounting and engineering records prepared and maintained by the company. These records embrace, among others, the respective ledgers for construction.work in progress and for fixed capital; the budgetary estimates of expenditures, retirements and adjustments projected for the year 1951; and the financial statements issued monthly. _1�_ • TABIE 5—B SOUTHERN CALIFORNIA WATER COUPANY HUNTINGTON BEACH DISTRICT COMPUTATION OF STATE CORPORATION FRANCHISE AND FEDERAL INCOME TAXES 1951 Estimated Present Proposed Item Rates Rates Operating Revenues $ 70,000 $115,3M Maintenance and Operating Expenses 34,540 34,540 General arid' Miscellaneous Expenses 9,820 9,820 Taxes Other than Income 4424 4,218 Depreciation (Income Tax) 20,118 20,118 Interests 7,795 7,795 Uncollectible Bills 100 170 Total Deductions 76,497 76,661 State Corporation Franchise Tax Net Income ( 7) 38,639 State Corporation Franchise Tax at 4% (90) 1,546 Preferred Stock Dividend Credits 447 447 Federal Normal Tax Net Income 36,646 Federal Normal Tax at 25% (1 71) 9,161 $25,000 Surtax Exemptions 1,095 1,095 Federal Surtax Net Income (7�779) 35,551 Federal Surtax at 22% ( ) 7,821 Total Federal-Income' taxes (3 82) 16,982 (Red Figure) a. Prorated on basis of gross fixed capital — 4.379% to this district DCN/JMM 510917 VI - FIXED CAPITAL AND RATE BASE Accounting and engineering records pertaining to plant are kept with respect to each water district, or system.,- the Bear Valley electric utility, the ice plant, and a subdivision entitled "General" which embraces various items of fixed capital, the use or advantage of which is shared by. all the districts and divisions. This general capital was reported at..the following amounts (to the nearest dollar) as of December 31, 1950:, Ac. No. Account &mount C-1 Organization 16,452 C-5 Land 17,986 C-6 Buildings - General Office and Other 51,641 G-14 Pumping Equipment (1 Unit for Standby) 2,268 C-16 Purification System (Experimental Pilot Plant) 1064 C-22 deters 10,090 C-23 Misc. Equipment (1 Gasoline Tank and Pump) 81 C-24 General Equipment: Office Furniture and Equipment 88,783 Shop Equipment 51,494 Vehicular Equipment 62,559 C-25 Undistributed Construction Expenditures 18,0Z7 Total ,3� 20,745 Ac. C-22, Meters and Ac. C-25, Undistributed Construction Expenditures in the foregoing table are in effect clearing accounts. The former is used for the recording of all water meter purchases during the year, up to about the year's end when average unit costs are determined for the purchases, and appropriate clearances are made to the meter fixed capital accounts of the respective districts. The latter is similarly used for the recording of office salaries, construction pay roll and various expenses, of a general overheads nature, which have been apportioned or directly charged to fixed capital and are cleared at percentages or otherwise to the work orders and other basic records of fixed capital cost. The amounts appearing in the above statement are accumulations or remainders following the clearances. Interest during construction is not being charged to either construction work in progress or fixed capital. Amounts thereof which appear in the reported current fixed capital balances, for some of the districts and the water utility as a whole, represent charges made in early years, by predecessor companies, and carried forward to date. -15- VI - FIXED CAPITAL AND RATE BASE The staff has not attempted, for the purposes of this proceeding, ^ to •trace the fixed capital entries as a whole to the year or years of their.. .. origin. - It has, however, reviewed a number of the fixed capital ledgers covering the period from about 1930 onward. The records inspected for this .: period.were of two quite different .forms, the earlier ones extending up to 1944 and being reasonably clear and informative but not nearly so comprehensive and satisfying- as the ones in use since 1943. With regard to retirements there was found ample evidence to assure that throughout the period since 1929 the matter of making retirements was not overlooked; and sample tests to determine the monetary basis of retirement credits to fixed capital revealed that the various elements of cost, including overhead loadings, had all been included. In the present study the estimates of fixed capital, construction work in progress, materials and supplies, consumers' advances, donations, and depreciation reserve have originated with figures, as of December 31, 194% reported by the company. Succeeding month-end balances up to December 31, 1951" mostly represent reported totals up to June 1, 1951, and estimated totals thereafter, the balances as of December 31, 1951, being in harmony with the " ' company's budgetary and other estimates of projected construction activities for 1951. Regarding the fixed capital which represents certain water properties being sold this year to the City of Los Angeles, 'it' has been eliminated in its entirety from the staff's estimates for 1951 'as though it all had been transferred out of the company's books at the' end of 1950. Result of the sale, so far as the present study is concerned, has been to reduce the base over which the common utility items must be spread and, consequently, to increase the amounts of the various allocations for 1951 to the respective �I local districts. Two water meter shops have been maintained by the company, one in Venice District and the other in South Los Angeles District, the former serving the Venice District installations exclusively, the latter the other water districts. The Venice shop' is included among properties being sold to the City but all meter parts in storage there remain the property of the company and are to be transferred to the South Los Angeles shop. Both the meter shop capital and the meter parts are considered as allocable items for the purposes of the present study. -16- VI - FIXED CAPITAL AND RATE BASE Eaterials and supplies are stored at and issued from both local and general sites, those in the first named category being within the areas of some of the districts and those in the last at four general storage places known as Construction Store No. 90, Ballona, Laura, and Advance. In some instances the materials and supplies at a local storage site are shared in common by two or more adjoining or nearby districts. Office and shop facilities, material storage places, construction tools and automotive units which are reflected in the fixed capital statements for certain districts may likewise be shared by some other district or districts not having items of this nature in their fixed capital set-ups. Where this is the case, appropriate allocations either out or in are necessary in order to distribute the items shared. Consumers' Advances for Construction are cash advances by consumers to cover the cost of extensions or for other specific purposes, in cases where such amounts are to be refunded in whole or in part. After the consumer has been refunded the entire amount to which he is entitled, the balance is transferred to Donations in Aid of Construction. Also to be credited to the Donations account are cash or other property donated by municipalities, individuals or others where no refund in part or in whole is involved: The company pays the consumer no interest on the cash advanced by him and,...since neither these advances nor the donations represent investments-'of-company monies, they are both deductible from fixed capital balances. that. reflect the . costs of plant added by means of the advanced or donated cash. Nonoperative plant, if represented in the basic fixed capital balances, should of course also be excluded from the rate base. B - FIXED CAPITAL 1. Analysis of Plant Tables 6-4, 6-B, and 6-C show the analysis of plant, or fixed capital, for each of the years 1949, 1950, and 1951 estimated. The amounts are to the nearest dollar and are for property that is local to the district, no allocation of common utility capital being included. A footnote on the table for 1951 is to the effect that as of the beginning of this year the company commenced charging meter installation costs to Ac. C-21, Services, instead of to Ac. C-22, Meters, as previously it had done. -17- TABLE 6 A SOUTHERN CALIFORNIA WATER COMPANY HUNTINGTONTR ANALYSIS .OF PIA.NT - YEAR 1949 EXCLUSIVE OF PR ORATIONS OF COMMON CAPITAL Year 1949 Ac. : :Balance : Gross : Retire- Adjust--:Balance ; No. Account ments :12/31/49:. INTANGIBLE CAPITAL C-1 Organization 254 $ $ $ , 254 C-2 Franchises & Water Rights 88 88 .Total Intangible Capital 342 a 342 TANGIBLE CAPITAL C-5 Landed Capital 165,607 16,607 C-6 B1dgs.,Strctrs.,& Grounds A Source of Water Supply 2,750 2,750 B Pumping Station 2,178 2,178 C Purification 5,517 5;517 Source -of Water Supply C-10 Wells 20,641 20,641 PumpingStation Equipment C-14 Pumping Equipment 21,113 15,744 521 ( ) 34,569 Purification Capital C-16 Purification System 369 25074 369' 25,374 . Trans. & Distr. Capital C-17 Trans..Mains or Canals 22,202 22,202 C-18 Distr. Mains or Canals 181,538 84,479 6,761 259,256 C-19 Distr. Reservoirs, Tanks, & Standby 1,446 11,446 C-20 Hydrants, Fire Cisterns, Fountains; etc'. 8,599 4,456 140 12,915 C-21 Services 35,878 4,824 966 39,736 C-22 Meters & Meas. Devices 60,456 2,734 208 ( o-,O 0) 52022 C-23 Misc. Distr. Equipment 2,223 2,223 General Capital C-24 General Equipment A Gen. Office Equipment 1,725 59 5 . 1,779,:. B Gen. Shop Equipment 4,274 85 4059 D Gen. 'Stable &Garage Equipment 4,393 4,393 C-26 Interest During Constr. 806 806 Total Tangible Capital 397,198 143,272 8,970 ( 2�.i ) 519,073 Total Fixed Capital 397,540 143,272 8,970 (1 , 2 ) 519,415 (Re�g'e) RLD 510913 TABLE .6-B SOUTHERN CALIFORNIA VTATER COMPANY HUNTINGTON BEACH DISTRICT ANALYSIS OF PLANT - YEAR 1950 EXCLUSIVE OF._.PRORATIONS OF COMMON CAPITAL • Year 1950 Ac . : :Balance : Gross Retire- :Adjust-:Balance No. Account ;12/31/49:Additions:ments-Cr.: ments :12/31/50: INTANGIBLE CAPITAL C-1 Organization $ 254 rev 254 C-2 Franchises & Water Rights 88 88 Total Intangible Capital 342 342 TANGIBLE CAPITAL C-5 Landed Capital 16,607 16 16,623 C-6 B1dgs.,Strctrs.,& Grounds A Source of Water Supply 2,750 298 3,048 B Pumping Station 2,178 3,659 5,837 C Purification 5,517 5,517 Source of Water Supply C-10 Wells 20,641 20,641 Pumping Station Equipment C-14 Pumping Equipment 34,569 12,703 .924 . 46,348 Purification Capital C-16 Purification System 25,374 56 25,430 Trans. & Distr. Capital C-17 Trans. Mains or Canals 22,202 22,202 C-18 Distr. Mains or Canals 259,256 27,918 3,868 283,306 C-19 Distr. Reservoirs, Tanks & Standby 11,446 11,446 C-20 Hydrants, Fire Cisterns, Fountains, etc. 12,915 2,342 110 15,147 C-21 Services 39,736 6,101 703 45,134 C-22 Meters & Meas. Devices 52,322 2,638 18 20 ) 54735 C-23 Misc. Distr. Equipment 2,223 2,223 General Capital C-24 General Equipment A Gen. Office Equipment 1,779 142 1,921 B Gen. Shop Equipment 4,359 803 400 4,762 D Gen. Stable & Garage Equipment 4,393 14606 5,999 C-26 Interest During Constr. 806 806 Total Tangible Capital 519,073 58,282 .--6,023 207) 571,195 Total Fixed Capital 519,415 58,282 6,023 (=) 571,467 Red Figure) RID 510913 TABLE 6-C ' SOUTHERN CALIFORNIA DATER COUPANY HUNTINGTON BEACH DISTRICT ANALYSIS OF PLANT - Y&'1R 1951 ESTI11ATED EXCLUSIVE OF PRORATIO14S OF.COMMON CAPITAL _ ear 1 1 . . Ac. . :-Halanoe Gross . Retire- :Balance . No. Account :1.2/31/50:Additions:ments-Cr. :12/31/51: INTi�TGIBLE CAPITAL C-1 Organization, $ 254 254 C.-2; iFranchises & Water Rights 88 .88 Total Intangible Capital 342 342 TANGIBLE CAPITAL C-5--- -Landed Capital 16,623 16,623 C-6 Bldgs., Strctrs., & Grounds A Source of Water Supply 3,048 3,048 B Pumping Station 5,837 5,837 C Purification 5,517 5,517 Source of Water Supply C-10 . Wells 20,641 20,641 Pumping Station Equipment C-14. Pumping Equipment 46,348 556 293 46,611 Purification Capital C-16 Purification System 25,430 , 4,617 2,823 , 27,224 Trans. & Distr. Capital C-17 Trans. mains or Canals 22,202 22,202 C-18 Distr. 14ains or Canals 283,306 68,266 7,371 344.,wi C-19 Distr. Reservoirs, Tanks., & Stand. 11,446 4,120 1,000 14,566 C-20 hydrants, Fire Cisterns, Fountains, etc. 15,147,E 15,,147 C-21 Services 46,455' 11521 41 47,935 C-22 Meters & Measuring Devices 53,414 1,420 130 54,704 C-23 Misc. Distr. Equipment 2,223 2,223 General Capital C-24 General Equipment A Gen. Office Equipment 1,921 11-921 B Gen. Shop Equipment 4,762 4,762 D Gen. Stable & Garage Equipment 5,999 1,821 1,645 6,175 C-26 Interest During Construction 806 806 Total Tangible Capital 571,125 82,321 13003 640,143 Total Fixed Capital 571,467 82,321 13,303 6401485 it Meter Installation Costs Reflected in Ac. C-21, Services from 1-1-51 on. R.LD 510913 TABLE 6-D SOUTHERN CALIFORNIA WATER COMPANY HUNTINGTON BEACH DISTRICT ADJUSTED ZIGHTED AVERAGE FIXED CAPITAL ESTIMATED FOR YEARS 1950 AND 1951 Balance Weighted Weighted as of Net Average .Item January 1 Additions Capital Year 1950 District Capital: Organization $ 254 $ 254 Franchises 88 88- Lands 16,607 7 . 16,614 Depreciable Plant 502,466 12,271 514.737 Total 519,415 12,278 53`1;793 Adjustments: General Plant Allocated to Cypress, Los Alamitos, South Artesia and Stanton 3 ) Consumers► Advances for Construction (10 8 0) Donations in Aid of Construction 4 445) Nonoperative Lands Adjusted Total... 5059224 Allocations to Huntington Beach: South Los Angeles Meter Shop 286 Common Utility Capital 10 .188.. Total Adjusted Weighted Average Capital, Year 1950 515, 98 Year 1951 District Capital: Organization 254 254 Franchises 88 '88 Lands. 16,623 16,623 Depreciable Plant . 554,502 16 . 571.495 Total 5711 j,4 16 7 ,993 588,460 Adjustments: General Plant Allocated to Cypress, etc. .(4707 Consumers' Advances for Construction (10 72B Donations in Aid of Construction 44 606) Nonoperative Lands Adjusted Total 561;3q5 Allocations to Huntington Beach: South Los Angeles dieter Shop 314 Common Utility Capital 14 992 Total Adjusted Ueighted Average Capital, Year 1951 5 (Red Figure RLD 510913 VI - FIXED CAPITAL AND RATE BASE 2. Adjusted Weighted Average Fixed Capital .Table 6-D sets forth certain details of weighted average fixed capital, after various adjustments and allocations, the pertinent items of which have been transferred to Table-6-E., Weighted Average Rate Bases for Years 1950 and 1951 Estimated. 3. District Capital Allocated to Other Districts District fixed capital for office, shop and garage equipment has been allocated to Cypress, Los Alamitos, South Artesia, and Stanton Districts at 30.42% for 1950 and 31.31% for 1951, on the basis of relationships for fixed capital other than intangibles, lands, and general. 4. Nonoperative Capital -Nonoperative fixed capital includes unused lands at the Circle Plant site, the Clay Street Plant site, and a lot at Atlanta and Alabama a Avenues. 5. South Los Angeles deter Shop Fixed Capital South Los Angeles Meter Shop fixed capital has been allocated to this district at 2.95% for 1950 and 3.23% for 1951, on the basis of the relationship of the total number of metered water consumers for all districts, except Venice, to the.number of metered consumers for this district. 6. Common Utility Fixed Capital Common Utility or t1Generalt' fixed capital has been allocated to this:district at 3.29% for 1950 and 4.36% for 1951, on the basis primarily of the relationship of total local capital for all districts to the local capital for this district, both exclusive of intangibles and lands. -18- s VI - FIXED CAPITAL AND RATE BASE C - CONSTRUCTION WORK IN PROGRESS There follows a tabulation of the direct and allocated weighted average amounts of construction work in progress chargeable to this district for 1950 and 1951: Weighted Average Amount Item 1950 12.5-1 Direct Charges: District Construction Work $15,097 $6,542 Experimental Purification at Golden West Plant 648 _.::650 Purchase and Installation of Money Chest 22 Allocations of Common Utility Work: Construction Headquarters, Garage and Driveways 830 :. General Construction Dept. Office Quarters 107 . Construction Headquarters New Loading Docks 18 Miscellaneous .62 106 Total 16,784 7,298 Allocation to this district has been made for 1950 at 3.54% of the respective totals for the follovoing common utility items: Construction Headquarters, Garage and Driveways, General Construction Dept. Office Quarters, Construction Headquarters. New Loading Docks, made on the same fixed capital basis as that used in allocating. common utility plant of a comparable classification. D - MATERIALS AND SUPPLIES Following is a tabulation' of the direct and allocated weighted average amounts of materials and supplies chargeable to this district for 1950 and 1951, Weighted Average Amount Item1951 Local Storage: Total $ 3,645 $ 4,573 Prorated to Artesia, Cypress, Los Alamitos, South Artesia and Stanton (1s453) (1 820 Allocations of Common Utility Storage: Total 9,048 17,242 Total 11,240 19,995 (Red Figure) _19- VI - FIXED CAPITAL AND RATE BASE. The allocation of common utility storage to this district has been made at 4.11% for 1950 and 5.11.E for 1951, almost entirely on the basis of district gross additions in relationship to total gross additions for all water systems. E - WORKING CAPITAL. An allowance for working cash has been included herein, using the procedure customarily followed by the staff for water. companies with metered'- sales. This allowance is based on the expense for one month of purchased power plus two months' other operating expenses excluding taxes, depreci:ationy and uncollectibles. In determining the amount to be included in the rate base, a deduction has been made in recognition of the fact that substantial sums are accrued for taxes in advance of payment and such funds are usedfor working cash purposes. The allowance included in the 1950 rate base is K,900, $6,500 in the 1951 rate base at present rates, and WOW at proposed rates. F - RATE BASE Table 6 E is a statement in brief form of the weighted average rate bases for years 1950, and 1951 estimated.. It has been compiled, with one exception, from figures which appear in tabulations embraced in Chapters VI and VII of this report, the exception being Wgrking Cash for which the basis is given in the immediately preceding section of this chapter. The final totals on the table are as follows for each of'the two years: 1950 195 Estimated Total Rate Base, Depreciated - Present Rates $444,900 $D498,200 Depreciated Rate Base - Proposed Rates 495,000 -20- I CHAPTER V12 DEPRECIATION EXPENSE .AND RESERVE A GENERAL The company maintains a separate reserve for fixed capital in each of its water districts, the Bear Valley electric iztility""the ice plan ;;:and comulon utility or general fixed capital. It does: .not keep-a segregatfcaof any of the reserves with respect to automobiles, power tools, and storage facilities that are involved in the respective clearing ac.counts. for--,.-,, automobile, tool, and store expenses. Each of the reserves is credited with straight-line annq.;U4 s covering all depreciable capital, and debited with all retirements thgxeo£. The total annuity in each case, however, is segregated with regard tb-the portion chargeable. to operating expense,,-' on the one hand, and to clearing accounts on the other. The staff's compilations- of annuity 'and reserve amounts are ' consistent with the fixed capital computations-.described in Chapter VI 'a,nd carried forward to Table 6-E showing the rate bases. B - DEPRECIATION EXPENSE Table 7 A shows the basis ofdepreciation expense for 'this district, in detail, for 1950 and in brief form for 1951. C - DEPRECIATION RESERVE Table 7-B shows the consist of the adjusted reserve for rate base calculations for each of the two years. -21- TABLE 6-E SOUTHERN CALIFORNIA WATER COMPANY HUNTINGTON BEACH DISTRICT WEIGHTED AVERAGE RATE, BASES YEARS 1259 AND 1951 ESTIMATED Estimated Year a Year Item 1951 PLANT Plano: in Service ® Beginning, of Year District $519,400 $571,500 Weighted Average Net Additions District 12.300 17.000 TOTAL WEIGHTED AVERAGE DISTRICT PLANT 531,700 588,500 ADJUSTMENTS Donations in Aid of Construction 4.400) 600) Consumers Advances for Construction (110.900) (10 0) Nonoperative Lands (7.700) ) Plant Allocated to Cypress, etc® ( 500) (4.100) South Los Angeles Meter Shop Allocated 300 300 Common Utility Plant Allocated 10,200 15,000 Construction Work in Progress 16.800 7.300 TOTAL ADJUSTMENTS 800 (4.500) ADJUSTED PLANT 532,500 584,000. WORKING CAPITAL Weighted Average Materials & Supplies District 2,200 2'800 Common Utility ® Prorate 9,000 17,200 dorking Cash (at Present Rates) 5.900 6, C10 TOTAL WEIGHTED AVERAGE RATE BASE 549,600 610,500 DEDUCTION FOR DEPRECIATION 104.70C 112,300 WEIGHTED AVERAGE DEPRECIATED RATE BASE 444,900 498,200 Decrease in Working Cash to Reflect Proposed Rates (3.200) WEIGHTED AVERAGE DEPRECIATED RATE BASE FOR PROPOSED RATES 495,000 (Red F figure) RLD 510918 TABLE 7=A SOUTHERN CALIFORNIA INATER COMPANY HUNTINGTON BEACH DISTRICT DEPRECIATION EXPENSE - BASIS AND COMIPUTATION YEARS 1950, ANU 1951 ESTIMATED . Fixed Year 1950 :Straight-Line :Capital :Weighted Average . Rate :Annuity: Ac. as of . Net :Depreciable: in : for No. Description :12-31-49:Additions: Capital :PerCent: 1950 (1) (2) (3) (4) (5) (6) Year 1950 (4)x(5) For District Capital C-6 Buildings 10,445 $ 483 10,928 3.333% $ 365 C-10 Wells 20,641 - 20,641 3.333 688 C-14 ' Pumping Equipment 34,569 11691 36,260 3.333 11209 C-16 Purification Syptem 25,374 2 25,376 6.6,67 1,692 C-17 Transmission kains 22,202 - 22,202 2.000 444 C-18 Distribution Mains 259,256 5,410 264,,666 2.000 5,293 C-19 Distribution Reservoirs 11,446 - 11,446 2.500. 286 C-20 Hydrants 12,915 400 13,315 1.900 253 C 21 Services 39,736 2,207 41,943 2,420 1,015 �C 22 Meters 52,322 1,213 53,535 2,200 1,178 C-23 Misc. Distribution Equipment 2,223 2,223 6.667 148 C-24-A Office Equipment 1,779 36 1,815 5,000 91 C-24-B Shop Equipment 4,359 93 4,452 6.667 297 C-24-D Garage Equipment- 4,393 736 5,129 10.000 513 C-2b Interest During Construction 806 806 2.500 20 Total 502,466 12,271 514,737 13,492 For Allocation of General Capital to Cypress, Los Alamitos, South Artesia and Stanton Total (27-4) For Allocation of South Los Angeles Meter Sho to Hunt' ton Beach Total 226 9 For Allocation of Common Capital to Huntington Beach Total 8,995 611 Adjustment for Annuities Charged to Clearing Accounts On Local General Capital ,125) (537) On Allocated Common General Capital (1,455) ( ) Adjusted Total Depreciation Expense, 1950 12,977 Year 1951 For District Capital 15&_21) For Allocation of General to Cypress, etc. For Allocation of South Los Angeles Meter Shop 10 For Allocation of Common Capital �86 Adjustment For Annuities Charged Clearing Accounts 1 07b} Adjusted Total Depreciation Expense, 1951 14,491 (Red Figure) RID 510913 TABLE 7®B SOUTHERN CALIFORNIA WATER .COMPANY ' HUNTINGTON BEACH DISTRICT DEPRECIATION RESERVES FOR 1950 AND 1951 ESTIMATED FOR RATE BASE CALCULATIONS Item 12501251 For Local Plant; Reported Balance at January 1 9%627 Estimated Balance at December 31 106,740 Average of Jana 1 and Dec® 31 Balances 103,184 109,759 Adjustments: For Plant Allocated to Cypress, etc® (882) (E1) For Consumers' Advances for Construction (216) (423) For Donations in Aid of Construction w?. 731 Adjusted Total . 101, 0 107, 2:4 For Allocations to Huntington Beach® South Los Angeles Meter Shop 123 144 Common utility Capital �124 4.577 Adjusted Reserve for Rate Base Calculations Ol 4,707 , 4 (Red Figure) RLD 510913 CHAPTER VIII SUIliARY OF EARNINGS The results of operation for the .recorded year 1950 and for the estimated year 1951, as set forth in detail in the preceding chapters, are here brought together for the purposes of summary and for development of rates of return. Table 8—A summarizes-tlie*earnings for the two years, computed on the straight—line basis using the depreciated rate bases developed in Chapter VI. The resulting rates of return are as follows: Rate of Return Under Present Under ApplicantIs Proposed Water Rates Water Rates 1950 Recorded 1.62% % 1951 Estimated 2.12 6.77 In estimating the 1951 results for rate—fixing purposes, it has been assumed that those districts being sold to the City of Los Angeles had been transferred to the City prior to the beginning of 1951. This results in a higher allocation of general expenses and general capital to the remaining districts than will actually be experienced in 1951. TABLE 8-A SOUTHER: CALIFORNIA WATER COIIITANY HUNTINGTON BEACH DISTRICT SMIZIRY OF EARNINGS YEAR 1950 RECORDED YEAR 1951 ESTIMATED 1951 Estimated 1950 :Present Proposed Item . 'f Record-d Rates Rates Uperating revenue 65,518 y 70,000 $115,300 Operating Expenses Maintenance and Operating 32,072 34,540 34,540 General and !�-iscellaneous 8,725 9,820 9,820 Uncollectibles 99 100 170 Taxes 4,665 482 22,746 Depreciation 12 4 14,491 14,491 Total Operating Expenses 58,315 59,433 81,767 Net Revenue 79203 10,567 33,533 Rate Bases - Average Depreciated 444s,900 498,,200 495,pOCO Rate of Return 1.62% 2.12% 6.77% DCN/JII,NI 510917 r CHAPTER IX CUSTOMER DISTRIBUTION, USAGE, AND RATES• A - WATER USE ANALYSIS The water use tabulations in Tables 9-A' through 9 D have been prepared to show the relationship between the number of meter-rate custo- mers and their water consumption for the 12-month period ending June 30, 1950. Table 9 E gives additional data for metered services larger than 5/8 x 3/4 inch. The revenues computed by the use of these tables checked with actual revenues recorded in the company's books and therefore, the tables can be used to estimate the effect that any change in existing rates would have made in that period. Estimates for any other period can be pre- pared by making appropriate allowance for changes in number or type of cus- tomers. B - COMPARISON OF CHARGES AT PRESENT AND PROPOSED RATES L Table 9 F shows a comparison of monthly charges for water delivered to customers at present and proposed rates for general metered service. The increases are shown in amount and in per cent, assuming in each instance the minimum charge prevailing for a standard 5/8 x 3/4 inch domestic meter. C - COMPARISON OF PRESENT AND PROPCSED. RATE SCHEDULES Schedule No, 1, General Metered Service The basic rates for general metered service have not been changed since October 21, 1939, at which time the rates -were voluntarily reduced by the utility from a former rate established in 1928. Present and proposed rates are set out below in modified form for comparison: Per Meter Per Month Quantity Charge: Present Proposed First 600 cu.ft. or less 1100 1.50 Next 20G cu.ft.,per 100 cu.ft. - .21 Next 2,800. cu.ft., per 100 cu.ft. .125 .21 Next 1,460 cd'.ft., per 100 cu.ft. .08 .21 Next 45,000 cu.ft., per 100 cu.ft. .08 .15 Next 150,000 cu.ft., per 100 cu.ft. .08 .10 Over' 200,000 tuft., per 100 cu.ft. .08 .08 -23- IX - CUSTOAR DISTRIBUTION,, USAGE, AND RATES Per Yeter Per Month Minb= Charge: Present Proposed For 5/8 r. 3/4-inch meter 1.00 1.50 For 3/4-inch meter 1025 2.00 For 1-inch meter 1,50 2.50 For la-inch meter 2.00 4.00 For 2-inch meter 3.00 6.00 For 3-inch meter 6.00 12.00 For 4-inch meter 12.00 24.00 For 6-inch meter 17.50 35-00 Schedule No. 2, Municipal Service The present rates for municipal service are summarized below: Use Rate per 100 Cu.Ft. Sewer Flushing, City Mall Grounds, Parks and Parkways, Street Department and Ocean Front Recreation . $ 0.06 Buildings, Beach Concessions and Main Street Pier 0®08 Under the proposed rates, municipal departments would use the rates for general metered service except that no minimum charges would apply and all municipal use would be combined and billed as though all use were through a single meter© Schedule No. .3, Construction and Other Temporary Flat Rate Service Miscellaneous flat rates for temporary customers were established on October 1, 1949. No change in these rates has been requested. Schedule No. t ?. Fire Hydrant Rates The fire hydrant rates set out below were established by the com- pany by contract on June 211 1948 Ath the City of Huntington Beach. These rates have not been f iled with the Commission but presumably will be filed, foliovdfig this proceeding, unless they are disapproved by the Commission. ' Description Per Month 2-inch riser type hydrant attached to any size main . m o m 1.25 3-inch riser type hydrant attached to 4-inch main or smaller 1.25 34nikh`riser type hydrant attached to main larger than 4-inch 1fl50 4-inch riser type hydrant with one outlet attached to 4--inch main or smaller . . . . . . . . . . . . . . . . . . . . . 10 50 4-inch riser type hydrant with one outlet attached to main larger than 4-inch o a . . o . o m o o .. o o o . o m 1.75 -24- IX - CUSTOLIR. DISTRIBUTION, USAGE, AM RATES Description Per Month 4-inch standard type hydrant with one outlet attached to 4-inch main or smaller . . . . . . $ 1.75 4-inch standard type hydrant with one outlet attached to main larger than 4-inch . . . . . . . . . . . . . . . 2.00 6-inch standard type hydrant with one outlet attached to main less than 6-inch 2.25 6-inch standard type hydrant with one outlet attached to 6-inch main or larger . . . . . . . . . . . . . . . . . . . 2.50 Hydrant with two or more outlets, for.each outlet in excess of one . . . . . . . . . . . . . . . . . . . . . . 0.25 The contract provides for these rates to remain in full force and effect for one year periods unless either party makes written notice within 30 days of the end of any one year that it desires them canceled. 4 -25- TABLE 9-A SOUTHERN CALIFORNIA WATER COMPANY HUNTINGTO B CH DISTRICT DOMESTIC AND COMJERCIA TATWME TABLE JULY 19 9' THROU H JUNE I9 0 �Consumptiono Consumer Months Cons on Block . Cum® : Cum. :Hundred: Cum. y o Cum.' . :100 Cu.- Ft..Number:Number:of Total: % :Cu. Ft.:100 C.F. vof Total: 0 1,148 1,148 5.85 5.85 0 d 0.00 0.00 1 67o 1,818 3.41 9.26 670 67.0 0.25 0.25 2 750 2,568 3.82 13.o8 1,500 2.170 0.57' o.82 3 889 3,457 4.53 17.61 2,667� 4,837 1.01 1083 4 1,068 4,525 5.44 23.o5 4,272 . 99109 1.62 3.45 5 1,157 5,682 5.89 28.94 5,785 14,894 2.19 5.64 6 1,12o 6,8o2 5.71 34.65 6,720 21,614 2.54 8.18 7 1Do39 7,841 5.29 39.94 7,273 28,887. 2.75 . 10.93 . 8 1,039 89880 5.29 45.23 8,312 37,199 3.15 14.08 ' 9 929 9,809 4.73 49.96 8,361 45,560 3.17 17.25 10 859 lo,668 4.37 54.34 8,590 54,150 3.25 20.50 11-12 1,604 12,272 8.17 62.51 18,414 72,564 6.97 27.47 13-14 19260 13,532 6.42 68.93 16,965 89,529 6.42 33.89 15-16 1,114 14,646 5.67 74>60 172264 106,793 6.54 4o.43 17-18 902 152548 4.60 79.20 15,740 122,533 5.96 46.39 19-20 718 16,266 3.66 82.86 13,994 136,527 5.3o 51.69 21-25 13278 17,544 6.51 89.37 29,183 165,710 ll.o5 62.74 26-30 790 18,334 4.02 93.39 21,854 187,564 8.27 71.01 31-35 415 18,749 2.11 95.50 13,585 2019149 5.15 76.16 36 61 18,810 0.32 95.82 2,196 203,345 0.83 76.99 37-40 193 19,003 o.98 96.80 7,419 210,764 2.81 79.80 41-45 135 19,138 0.69 97.49 5,776 216,540 2.19 81.99 46-50 90 19,228 0.46 97.95 4,334 220,874 1.64 83.63 51-6o 127 19,355 0.64 98.59 7,011 227,885 2.65 86.28 61-70 78 19,433 o.4o 98.99 5,o59 232,944 1.92 88.20 71-80 49 19,482 0.25 99.24 3,687 236,631 1.4o 89.6o 81-90 34 199516 0.17 99.41 2,917 239,548 1.10 90.70 91-100 23 19,539 0.12 99.53 2,209 241,757 o.84 91.54 101-120 23 19,562 0.12 99.65 2,567 244,324 0.97 92.51 121-140 18 19,58o 0.09 99.74 2,330 246,654 0.88 93.39 141-160 11 19,591 0.05 99.79 1,631 248,285 o.62 94.ol 161-18o 6 19,597 0.03 99.82 19013 249,298 0.38 94-39 181-200 6 19,603 0.03 99.85 1,133 25o,431 o.43 94.82 201-250 6 19,609 0.03 99.88 1,310 251,741 o..5o 95.32 251-300 5 19,614 0.03 99.91 1,335 253,076 0.50 95.82 301-350 2 19,616 0.01 99.92 659 253,735 0.25 96-07 351-400 1 19,617 0.01 99.93 384 254,119 0.15 96.22 401-450 2 19,619 o.ol 99.94 882 255,001 0.33 96.55 451-500 1 19,620 mi 99.94 507 255,5o8 o019 96.74 5ol-600 1 19,621 o©ol 99.95 529 256,037 0.20 96.94 601-700 1 19,622 0.0o 99.95 607 256,644 0.23 97.17 701-800 2 19,624 o.ol 99.96 1,5o9 258,153 0.57 97.74 801-900 2 19,626 0.01 99.97 1,623 259,776 o.62 98.36 901-1,000 1 19,627 o.ol 99.98 936 260,712 0.35 98.71 1,001-1,200 3 19,630 0.02 100.00 3,399 264,111 1.29 100.00 Total 19,63o 100.00 264,111 100.00 EFC 510706 + TABLE 9-B SOUTHERN CALIFORNIA WATER COMPANY HUNTINGTON BEACH DISTRICT IVDUSTRIAL WATER USE Ur JU Y 1949 THROUGH JUNE 19 0 :Consumption: Consumer Months Cons ion Block . . Cum. Cum. :Hundred: Cum. . Cum. :100 Cu. Ft. :Number:Number:of Total: % :Cu. Ft. :100 C.F.:of..Total: % 0 1,284 1,284 48.42 48.42 0 0 - - 1. 304 1,588 11.46 59.88 304 304 0.19 0.19 2 154 1,742 5.81 65.69 308 612 0.19 0.38 3 104 1,846 3.92 69.61 37.2 924 0.20 0.58 4 66 1,912 2.49 72.10 264 1,188 0.17 0.75 5 51 1,963 1.92 74.02 305 1,493 0.19 0.94 6 42 2,005 1.58 75.6o 252 1,745 o.16 1.10 7 39 2,044 1.47 77.07 273 2,018 0.17 1.27 8 26 2,070 0.98 78.05 208 2,226 0.13 1.40 9 34 2,104 1.28 79.33 306 2,532 0.19 1.59 10 44 2,148 1.66 80.99 440 2,972 0.28 1.87 11-1.2 50 21198 1.89 82.88 566 3,538 0.35 2.22 . 13-14 33 2,231 1.24 84.12 445 3,983 0.28 2.50 .15-16 35 2,266 1.32 85.44 545 4,528 0.34 2.84 17-18 19 2,285 0.72 86.16 331 4,859 0.21 3.05 19-20 18 2,303 o.68 86.84 349 5,208 0.22 3.27 21-25 33 2036 1.24 88.08 752 5,960 0.47 3.74 26-30 31 2,367 1.17 89.25 872 6,832 0.55 4.29 31-35 26 2,393 0.98 90.23 851 7,683 o-53 4.82 36 5 2,398 o.19 9o.42 180 7,863 0.11 4.93 37-4o 20 2,418 0.75 91.17 770 8,633 0.49 5.42 41-45 25 2,443 0.94 92.11 1,075 9,708 0.67 6.o9 46-50 28 2,471 1.06 93.17 1,336 11,044 0.84 6.93 51-6o 18 2,489 o.68 93.85 974 12,ol8 o.61 7.54 61-70 19 2,5o8 0.72 94.57 1,247 13,265 0.78 8.32 71-80 8 2,616 0:30 94.87 589 13,854 0.37 8.69 81-90 10 2,526 0.38 95.25 850 14,704 0.54 9.23 91-100 8 21534 0.30 95.55 774 15,478 0.48 9.71 101-120 11 2,545 0.41 95.96 1,181 16,659 0.74 10.45 121-140 4 2,549 0.15 96.11 522 17,181 0.33 10.78 141-160 2 2,551 0.08 96.19 291 17,472 0.18 10.96 161-180 5 2,556 0.19 96.38 858 18,330 0.54 11.50 181-260 6 2,562 0.22 96.6o 1,153 19,483 0.73 12.23 201-300 12 2,574 0.45 97.05 2,913 22,396 1.83 14.06 301-400 5 2,579 0.19 97.24 1,722 24,118 1.o8 15.14 401-500 4 2,583 0.15 97.39 1,793 25,911 1.13 16.27 501-600 16 2,599 0.61 98.00 6,948 34,859 5.62 21.89 601-700 2 2,601 0.08 98.08 1091 36,250 0.87 22.76 701-800 2 2,603 0.07 98.15 1,508 37,758 0.95 23.71 801-900 2 2,605 0.08 98.23 2,591 40049 1.62 25.33 901-1,000 2 2,607 0.07 98.30 1,924 42,273 1.21 26.54 1,000-1,200 12 2,619 0.45 98.75 13,'643 55,916 8.57 35.11 1,201-1,400 4 2,623 0.15 90.90 51223 61,139 3.28 38.39 1,uol-1,600 5 2,628 0.19 99.09 7,544 68,683 4.74 43.13 ' 1,601-1,800 1 2,629 0.04 99.13 13767 70,450 1.11 44.24 1,801-2,000 3 2,632 0.11 99.24 5,570 76,020 3.50 47.74 2,001-31000 8 2,640 0.30 99.54 18,439 94,50 11.6-1 59.35 3,001-I�,000 2 21642 0.08 99.62 6,945 1Q1,4 � 4.36 6�.71 II11,0o1-55,000 4 2,646 o.15 99.77 17,342 118,79 10.89 74.60 5,001-7,500 5 2,651 0.19 99.96 30,593 149,369 19.21 93.81 7,5oo-10,000 1 2,652 0.04 100.00 9,848 159,237 6.12 100.00 Total 2,652 100.00 159,237 100.00 EFC 5107o6 TABLE 9-C SOUTHERN CALIF15RNIA WATER COMPANY HUNTINGTON BEACH DISTRICT MUUNICIPAL WATER USE TAB JUIX 19 9 THROUGH J 9 0 :Consumptions Consumer Months Consumption ' Block Cum. s Cum. -Hundred- Cum. . o . Cum. . s100 Cu. Ft'.:Number:Numbersof Totals' % sCu. Ft. o100 C.F. -of Totals' w 0 41 41 12.93% 12.93 0 0 0 0% 1 - 41 - 12.93 - 0 0 0 2 1 42 0.31 13.24 2 2 0.52 0.52 3 3 45 0.95 14.19 9 11 2.34 2.86 4 2 47 o.63 14.82 8 19 2.09 4.95 5 1 48 0.32 15.1.4 5 24 1.31 6.26 6 2 50 0.63 15.77 ' 12 36 3.13 9.39 7 1 51 0.31 16.o8 7 43 1.82 11.21 8 - 51 - 16.o8 - 43 - 11.21 9 1 52 0.32 16.40 9 52 2.35 13-56 10 52 - 16.40 - 52 - 13.56 11-12 3 55 o.95 17.35 34 86 8.87 22.43 13-14 2 57 0.63 17.98 26 112 6.78 29.21 15-16 - 57 - 17.98 - 112 - 29.21 17-18 - S7 - 17.98 - 112 - 29.21 19-20 - 57 - 17-98 - 112 - . 29.21 21-25 - 57 - 17.98 112 - 29.21 26-30 2 59 0.63 18.61 59 171 15.40 44.61 31-35 - 59 - 18.61 - 171 - 44.61 36-40 1 60 0.31 18.92 37 208 9.65 54.26 60 class 193 253 6o.89 79.81 33,886 34,094 34.69 88.95 80 class 64 317 20.19 100.00 42236 38,330 11.05 100.00 ,Total 317 100.00 38,330 100.00 RECAPITULATION BY MONTHS Hundred Month Cubic Feet July 1949 5,672 Aug. 4,5o8 Sept. 4,834 Oct. 3,431 Nova 2,610 Dec. 1,574 Jan. 1950 . 878 Feb. 1,043 gaar.. 1,633 Apr. 3,221 may 4,534 June 3 92 Total 38,330 EFC ' 510706 . TABLE 9-D SOUTHERN CALIFORNIA WATER C011PANY HUNTINGTON BEACH DISTRICT IRRIGATION WATER USE TAB JULY 19 9 THROUGH DUNE 19 0 :Consumption: Consumer Months ; Consum ion Block . Cum. : Cum. :Hundred: Cum. Cum. . :100 Cu. Ft.:Nunber:Number:of Total: % :Cu. Ft. :100 C.F. :of Total: % 0 76 16 37.62 37.62 0 0 - 0 1 1 77 0.5o .38.12 l .- 1 0.00 0.00 2 4 81 1.98 40.10 8 9 0.04 0.04 3 1 82 0.49 40.59 3 12 0.02 0.06 4 - 82 - 40.59 - 12 - 0.06 5 - 82 - 40.59 - 12 - 0.06 6 3 85 1.49 42.08 18 30 0.09 0.15 7 1 86 0.49 42.57 7 37 0.03 0.18 8 1 87 o.49 43.o6 8 45 0.04 0.22 9 - 87 - 43.06 - 45 - 0.22 10 5 92 2.48 45.54 50 95 0.24 0.46 11-12 l 93 o.49 46.03 12 107 0.06 0.52 13-14 1 94 0.49 46.52 1.4 121 0.07 0.59 15-16 3 97 1.50 48.02 45 166 0.22 o.81 17-18 4 101. 1.98 50.00 69 235 0.34 1.15 19-20 3 104 1.49 51.49 59 294 0.29 1.44 21-25 2 106 0.98 52.47 46 340 0.22 1.66 26-3o 5 111 2.48 54.95 143 483 0.70 2.36 -. 31-35 4 115 1.98 56.93 129 612 o.63 2.99 36 - 115 - 56.93 - 612 - 2.99 37-40 2 117 o.98 57.91 77 689 0.38 3.37 41-45 3 120 1.49 59.40 126 815 o.61 3.98 46-50 3 1.23 1.49 6o.89 146 961 0.71 4.69 51-6o 6 129 2.97 63.86 328 1,289 1.61 6.30 61-70 5 134 2:48 66.34 320 1,609 1.56 7.86 71-80 6 14o 2.97 69.31 448 2,057 2.19 10.05 81-90 2 142 0.98 70.29 171 2,228 o.84 lo.89 91-100 4 146 1.99 72.28 387 2,615 1.89 12.78 101-120 12 158 5.94 78.22 11337 3,952 6.54 19.32 121-14o 4 162 1.98 80.20 521 4,473 2.55 21.87 141-160, 1 163 o.49 80.69 156 40629 0.76 22.63 161-18o 4 167 1.98 82.67 692 5,321 3.38 26.01 181-200 4 171 1.98 84.65 762 6,083 3.73 29.74 201-25o 6 177 2.97 87.62 1,424 7,507 6.96 36.70 251-300 5 182 2.48 90.10 1,450 8,957 7.09 43.79 301-35o 3 185 1.48 91.58 981 9,938 4.79 48.58 351-400 3 188 1.49 93.07 1,131 ll,o69 5.53 54.11 401-450 1 189 o.49 93.56 46o 11,529 2.25 56.36 451-500 1 190 0.49 94.05 510 12,039 2.50 58.86 5ol-600 7 197 3.48 97.53 3,666 15,705 17.92 76.78 601-700 - 197 - 97.53 - 15,7o5 - 76.78 701-800 2 199 0.99 98.52 1,488 17,193 T.27 84.o5 801-900 1 200 0.49 99.G1 892 18,085 .4.36 88.41 901-12000 - 200 - 99.01 - 18,085 - 88.41 1,001-1,200 l 201 o.49 99.5o 1,120 19,2o5 5.48 93.89 1,201-1,400 1 202 0.50 100.00 12253 20,458 6.11 loo.00 Total 202 100.00 20,458 100.00 EFC 510706 TABLE 9-E SOUTHERN CALIFORNIA WATER CUNPANY HUNTINGTON BEACH DISTRICT DATA FOR COMPUTING EXTRA REVENUE FROM LARGE METERS DULY, 1949 THROUGH DUNE, 1950 Size of Meter Item :1-inchz1,-inch:2-inch:4-inch7- -inch- Present Rates Commercial A 404 76 71 2 8 B (@ 1220) 285 176 240 56 224 B (@ 80) - - 146 426 Industrial A 173 36 1MO - 24 B (@ 122O) 11 34 1,396 1.0 Municipal A 31 - 12 m B (@ 1220) 11 _ 0 - Irrigation A - 22 84 - B (@ 122¢) 0 141 - - Proposed Rates Commercial A 379 86 75 2 8 B (@ 210) 445 383 377 88 352 B (@ 150) - - 118 314 Industrial A 173 37 1,745 - 24 B (@ 210) 26 67 2,234 12 Municipal A 30. . 12 _ - B 14, 0 m Irrigation A o 22 A4 m B (@210) - 0 184 m Note: A - Consumer `months at less than quantity entitlement fox- minimum. charge. B - 'Quantity. (hundreds of c.f.) delivered between minimum for 5/8 x 3/4-inW meter and size shown® EFC 510816 TABLE 9-F SOUTHERN CALIFORNIA WATER COMPANY HUNTINGTON BEACH DISTRICT COMPARISON OF CHARGES FOR WATER SERVICE UNDER PRESENT AND PROPOSED GENERAL TI TER RA TES Monthly Monthly Charge s Consumption . Present . Proposed : Proposed Increase :(Cubic Feet) Rates Rates Amount Per Cent 0 1.00 1.5o 0.50 50% 600 1.00 1.50 .50 50 800 1.00 `1.92 .92 92 1,000 1.25 2.34 1.09 87 15200 1.50 2.76 1.26 84 1,400 1.75 3.18 1.43 82 1,600 2.00 3.6o 1.60 8o 1,800 2.25 4.02 1.77 79 2,000 2 .50 4.44 1.94 78 2,500 3.13 5.49 2.36 75 3,000 3.75 6.54 2 .79 74 3,600 4.50 7.80 3.30 73 4,000 2 8.64 3.82 79 4,500 5.22 9.69 4.47 86 5,000 5.62 10.74 5.12 91 10,000 9.62 1 .2 3.62 90 15,000 13.62 25.74 12.12 89 20,000 17.62 33.24 15.62 89 30,000 25.62 48.24 22.62 88 40,000 33.62 63.24 29.62 88 50,000 41.62 78.24 36.62 88 100,000 81.62 128.24 46.62 57 150,000 121.62 178.24 56.62 47 200,000 161.62 228.24 66.62 41 300,000 241.62 30 .2 66.62 28 400,000 321.62 388.24 66.62 21 500,000 4ol.62 468.24 66.62 17 1,000,000 8ol.62 868.24 66.62 8 EFC 501207 v �:. SOUTHERN CALIFORNIA WATER COMPANY GENERAL OFFICES 11011 SOUTH VERMONT AvENuE Los ANGELES 441 CiALIFOENIA The following items of Books, Maps and Records were turned over to the Water Department of the City of Huntington Beach. DATA FROM ENGINEERING DEPARTMENT: Daily pumping plant reports, 1951 thru 1963 8 binding cases ,/� ICIA; le 1 looseleaf book K -e,,,tjG.j' 2-/- 4 --- Water level records - Graphical Representations Production and Statistical Records - 1929 to 1963 on Form 435 Domestic Water Permit to operate system - granted by Department of Public Health, State of California Cathodic Protection Data - 1 folder Sanitation - 1 folder - data and operating correspondence re: sanitation problems 1 folder - water treatment records Chemical Analysis - water tests and analysis Work orders - 214 - also card index of same Maintenance Work Orders (22) (Cards & Folders) Water Supply Information: Planning - 1 folder Golden West Plant - 5 folders Reservoir - 4 folders Misc. - 1 folder Gas Engine reports - 2 folders Well tests - 8 folders Pump tests - 9 folders Fire hydrant cards - 262 (numbered chronologically) Drawings & Maps General system tracing (1) General system maps (a) GWO distribution tracings - in loose leaf binder part of the work orders Water supply tracings & maps (18 items) Preliminary distribution tracings (8) The above items received from Southern California. Water Company on this day of , 196 WATER DEPARTMENT OF THE CITY OF HUNTINGTON BEACH By SOUTHERN CALIFORNIA WATER COMPANY GENERAL OFFICES ]Soli SOUTH VERxoNT AvENuE Los A.NGELES 44, CALIFORNIA The following items of Books, Maps and Records were turned over to the Water Department of the City of Huntington Beach. DATA FROM ENGINEERING DEPARTMENT: (Continued) New Business Folders (16) Note: Estimate No. 2583 is active - balance are inactive. The above items received from Southern California Water Company on this day of , 196 WATER 1EPARTMENT OF THE CITY OF HUNTINGTON BEACH By SOUTHERN CALIFORNIA WATER COMPANY GENERAL OFFICES 11911 SOUTH VSRMONT AVENuE Los A.NGELES 14, CALIFORNIA The following items of Books, Maps and Records were turned over to the Water Department of the City of Huntington Beach. 19FI I c�' 4 . General Work Orders �clders roc.inq 5 f Wards LV, F6- * 51-63 G5 (1 4 (1z -63r- C. t, I el)- 70r 9235 it 38-4,3 t�2- 632 G,95 92z0 W )9-63 2,-1,13 04 1IIRF # 18-�z Y �2,-539 9IFI It - /11 11 - 958 70-/,I # 61- 917 GC-543 41- ell 9fg21 - R'133 : &3- Re 1 0-,587 97,F7 878P * 1,3-RA4 bl- 576 97F/ A* f373,Z r Ira -862 .d 61 -57Z 975P 8683 # /13-FNC il- 543 9724 R670 # 1,3-/,G,7 41-S03 y %Ez 8607 d 63 --454- 61- 110 s 9655 85`? 1 0-4140 (W- 9cz - # 9653 8590 1.3-G.39 46 -90/ 9571 # F465 5- E- ,2 I * 60-81�1 94F6 F44-9 ( - £- ,Z .1 60-653 939z 842E 4 - 1- / * 60-F51 - 9338 F-42.5 4,2 -F,24 6 0-783 9'zec # 8 3114 925fR o 8318 (Continued. on pn9e 2 �.9._4) " — The above items received from Southern California Water Company on this day of 196 WATER LEPARTMENT OF THE CM OF HUNTINGTON BEACH By SMOt1THaIM CALIFORNIA WATER COMPANY G�xas�z Omncrs 11911 Somw VzzmowT AvzNuz Los A`QoZLIEO 44, CALIFORNIA The following itemo of Books, Raps and Records were turned over to the Water Department of the City of Huntington Beach. Ph9e G.W.®. o 8317 G.W.0. (99G G.W.D. 3'4.0185 G.W.O. 5148 8 Z9 8 6,196 °' 56.3.5" 5112, 8249 O/Z �634 50�0 8 905 1578 4937 8157 1558 3 493� 8o87 &551 5�27 491g SolS �4I(- S51& d 49P3 7983 tD394 ��l3 4FG8 79.59 �309 - .sir 1 4R51� 788Z S498 " 0 4857 78(,to 62,57 10 78613 l0 00 P 5415 485-6- -9 7764 4 .59 57 .63 73 493,,2 d 7649 4 6953 '6349 4771R 7,668 584-9 -d 5330 477.E 7.567 .580® d 476n 7406 5784 8r., io 4749 7276 57Z9 d S237 4749 0 7/6� 10 5728 .523G 46,27 it 7//4- 0 .5 7,2 7 5232, 4588 A# 7099 5? 5203 4,531 V 7082, 57/ 2, d a 6-149 45C7 (Confinuea on Page 3 J4 ) The above it received from Southern California water Company o this y of 196 OF THE CITY OF HIM190TON BEACH By SOUTHERN CALIP'ORNIA WATER COMPANY Gaxa$ez. Omcas n9ii SouTu VH=xoxT Avsxua Los A.NaELEs 44, CALIFORNIA The following items of Books, Maps and Records were turned over to the Water Department of the City of Huntington Beach. fP M 3 c, 4. C.W.D. f 4460 GWA 2.585 KF-E. 0 1630 A. F. E. 90 4 4407 884 4384 251 ( 4 883 4249 878 r :0 4232 2382 A 1469 k- 866 r 0 4225 # Z378 14(( #I A 8E0 r A 4224 A 2,34S 1392 0 841 0 4223 d 23/4 1366 0 791 4 4222 4 22304- 0 1323 i ?121 4 4155 - 4 ,227.5 * 1159 0 &91 o 4154 1996 A 112.3 4 628 •- 0 4108 1961, 1105 617 0 4069 196-1 0 1087 0, 58 ► -0 4066 A. f. E. lesz e6 0 561 # 40Z4 18.51 1085 5 z 1 M 3056 Jf So 1073 A S13 Y j9 3013 1848 At I OZ& 31 4 2931 1791 100(0 261 •- 10 2925 1743 1 99.5 l34 4 # 214-Z •- 2685 942, w 2113 K 1634 � 2oS4 920 (CWInuect on Page &4 443 The above items received from Southern California Water Com y on this day of 196 WATER WPWnCR OF THE CITY OF HUNTINMN BEACH BY SOUTHERN CALIFORNIA WATER COMPANY GENERAL Orrlcas n9n SouTH VBRxoxT Avzwuz Los AxOEL$8 44� CiALIFORNIA The following items of Books, Maps and Records were turned over to the Water Department of the City of Huntington Beach. Page " 4 off' 4 . * z445 4 2C43 d 1984- 197E 41 19�9 +� 19.24 ` K 184E ►83 7 ` 17 7.S 173.1 j MIS- The above item received from Southern California Water Company on this day of , 196 WATER IZPPARTNEAP OF THE CITY OF HUNTIffGTOH BEACH By e t. • c • s BEFORE. THE PUBLIC UTILITIES-COMMISSION OF THE STATE OF CALIFORNIA �-� ---------------------- In the matter of the Application ) of the Southern California Water ) APPLICATION Company for authority to increase ) water rates in its Huntington ) No. Beach District. ) Application to the Public Utilities Commission of the State of California: By this application the Southern California Water Company (here- inafter called "Applicant") seeks an order of the Public Utilities Commission of the State of California (hereinafter called "Cor.miission") authorizing Applicant to increase its charges for metered water service in the Huntington Beach District to the .rates as shown on Exhibit A attached hereto and made a part hereof. I.' Applicant is a corporation organized under the laws of the State of California and represents the consolidation of some twenty cor- porations which were formerly operated under the jurisdiction of the' Commission as public utilities, said consolidation was effected upon the order of the Commission dated December 31, 1929. Applicant operates entirely in Southern California except for a system near Sacramento, known as the "South Sacramento District". Its business is confined to producing and distributing water for domestic, industrial, municipal and other purposes, and to the distribution of electricity in the Bear Valley District in San Bernardino County. Applicant also operates one non- utility service, a small ice plant in Barstow. Substantially all the revenues of Applicant are derived from the sale and distribution of water; a small portion is derived from the distribution of electricity and an even smaller portion from the non-utility operations. -1- . . , II. The post office address of Applicant is 1206 South Maple Avenue, Los Angeles 15, California. All correspondence and coriuiunications in regard to this Application are to be addressed to C. P. Harnish, President, Southern California Water Company at above address. III. A copy of the Applicant's Articles of Incorporation is on file with the Commission. A copy of Applicant 's Financial Statement for the year 1949 is on file with the Cormaission. A copy of the Balance Sheet and an Earnings Statement for the month of July, 1950, are attached hereto and made a part hereof and narked Exhibit B. IV. A statement of the operating revenues and expenses in Applicant's. Huntington Beach District, for the years 1947, 1948 and 1949 is shown on Exhibit C attached hereto and Made a part hereof. This statement shows that, in 1947 the gross operating revenue was $61,687.89 and a net operating revenue of $15,269.41,- which gave an indicated rate of return of 5.76%; in 1948 the gross operating revenue was $66,588.18 and a net operating revenue of $14,149.01, which gave art indicated rate of return of 4.64%; in 1949 the gross operating revenue was $65,798.93 and a net operating revenue of $13,488.46 which gave an indicated rate of return of 1-59%. Attached hereto and made a part hereof is Exhibit D which shows the summary of operations in the Huntington Beach District for 1949 actual and estimated for 1950 and 1951 with revenues based on present rates; and a summary of estimated operations for 1951 with revenues based on the proposed rates as shown in Exhibit A. Rates of return with present metered rates are 3.59% in 1949, and estimated at 1.69% in 1950, and 0.64% in 1951. With the proposed new metered rates in effect in 1951, the calculated rate of return is 6.00%. -2- V. Attached hereto and made a part hereof is Exhibit E which shows the development of the rate base for the Huntington Beach District for 1949 actual and estimated for 1950 and 1951. VI. There are five wells in the Huntington Beach District and all are equipped with deep well turbine pumps which discharge into forebay tanks with suitable aerating devices, except one well that discharges directly into the distribution system. The water is delivered by booster pumps to a 250,000 gallon concrete reservoir and is then delivered to the distribution system through a gas engine driven booster pump, with a standby electrical booster PUMP. The turbine and booster pumps with their electrical and other appurtenant equipment are housed in suitable buildings. The water is distributed to consumers through approximately 205,000 feet of distribution mains, ranging in size up to 14-inches in diameter. On December 31, 1949, there were 1,899 consumers served and fire service was also provided by means of 203 fire hydrants. All of the consumers are on the metered service schedule. The book cost of fixed capital of the Huntington Beach District was $519,415.10 as of December 31, 1949 and the book accrued depreciation reserve was $99,627.40 as of December 31, 1949. VII. Applicant served 1,899 consumers in the Huntington Beach District as of December 31, 1949 and anticipates that it will be serving approximately 2,049 consumers at December 31, 1951. Applicant's construction budget for the last six months of 1950 for the Huntington Beach District is approximately $49,000.00. Applicant proposes a construction budget for 1951 for the Huntington Beach District of approximately $66,600.00 of which $8,000.00 is in water supply facilities, approximately $46,000.00 in major improvements to the distribution system: and the balance is main extensions, services, meters and miscellaneous items. -3- VIII. Attached hereto and narked Exhibit F is a copy of the rates now charged by Applicant in its Huntington Beach District for metered water service. IX. Attached hereto and narked Exhibit G is a map showing the area covered by the Huntington Beach District. X. The additional revenue provided in the proposed rate (Exhibit A attached hereto) is necessary to allow Applicant to earn a fair return on its capital invested in facilities used, and useful, in rendering service in the Huntington Beach District and will not yield more than a fair return on said investl:ient. XI. Applicant will, either by supplemental application or at the hearing hereof, file any other data or other inforriation that may be requested with respect to any of the matters set forth in this Application. WHEREFORE, Applicant prays that the Commission hold a Hearing on this Application, and thereafter issue its Order authorizing Applicant to put into effect the rate for metered water service contained in Exhibit A attached hereto. Respectfully submitted, SOUTHERN CALIFORNIA WATER COMPANY By C. P. Harnish, President Applicant Attorneys for Applicant O'Melveny & Myers By L. M. Wright 433 South Spring Street Los Angeles 13, California -4- STATE OF CALIFORNIA ) ss. County of Los Angeles ) C. P. Harnish, being first duly sworn, deposes and says: That he is an officer, to-wit, President of the Southern California Water Company, the Applicant named in the foregoing Application, that he has read said Application and knows the contents thereof and that the same is true of his own knowledge, except as to the matters which are therein stated on information or belief, and that as to those matters he believes it to be true. Subscribed and sworn to before me this day of , 1950. Notary Public in and for said County and State. SOUTHERN CALIFORNIA WATER COMPANY Huntington Beach District' Proposed Rate for Metered Water Service RATES Per Meter Quantity Charge Per Month First 600 cu. ft. . or less 1.50 Next 4,400 cu. ft., per 100 cu. ft. . . . . . . . . . . . .21 Next 45,000 cu. ft., per 100 cu. ft. . . . . . . . . . . . .15 Next 150,000 cu. ft., per 100 cu. ft. . . . . . . . . . . . .10 Over 200,000 cu. ft. , per 100 cu. ft. . . . . . . . . . . . ,08 Minimum Charge For 5/8-inch x 3/4-inch meter $ 1.50 For 3/4-inch meter . . . . . . . . .. . . . .. . . . . . . .. . ... . . .. . 2.00 For 1-inch meter . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . 2.50 For 1-1-inch meter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.00 For 2-inch meter . . . . . . ... . . . . . . . . . .. . . . . . . . . . . . . . 6.00 For 3-inch meter . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.00 For 4-inch meter . . . . . . . . . . . . . 0 . 0 . . . . . . . . . . . 6 . . . . 24.00 For 6-inch meter . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 35.00 The Minimun Charge will entitle the consumer to the quantity of water which that monthly minimum charge will purchase at the Quantity Rate. SPECIAL CONDITION All meter readings for municipal departments of the City of Huntington Beach will be combined for the purpose of computing monthly bills at the Quantity Rate, and for such municipal departments there will be no monthly mini;num charge. Exhibit A Page, 1 SOUTHERN CALIFORNIA WATER COMPANY , BALANCE SHI+ET As of July 31 1Q/�0 .....1..,,..111.1..,..1,,.,.1�„i,f.,,,,,..,.,,,,.1.,.,,,..l,I r,11i,..��..,,,.,ii„,.,,.,,:.,.,,,,,,,,,,..,1.,.,,,,,.i.,1.1,..11......,1,..1....1......1(II.....,.I.�I.I....21 0-11.................. ( 1 , 1 i - 1 1 This Month Last Month Increase ASSETS ; July 31 June 30 (Decrease) Dec.31,1949 ' ; 1 ................................................................................................................I--,............ F[XED CAPITAL: Fixed capital 16,149,629. 16,033,558. 116,o7l. 15,677,658• .Construction work in progress 497,144 455,868. 41,276. 71,913. 1 1 , 1 1 ----------------- '--------------------+ TOTAL 16,b?+67_!_3�- ;..__'—u, _ :?+26_- - - l �a.3A7_t---- l5JZ `�15 le- CURRENT ASSETS. ' Cashin banks 343,636 332,009. 11,627. 438,625. Cash working funds - 13,005. 13,005. -- 13,005. Special deposits 42,107. ; 42,107. ; -` 42,371. ' U.S.Treasury Bills ''- ; `-' ; -' 1 498,710.- 1 Accounts receivable: ' Coiisumers and subscribers 26o,508. 218,119. 42,389. 181,968. Miscellaneous 30,058. ; 25,593. ; 4,465. ; 20, Interest receivable = 65. --- 65. ; 243. ; Merchandise,materials and supplies = 313,543. 318,217. (4,674• ) ; 295,997 Prepayments: 164,917. ; 9,332. 155,585. 82,651. Taxes 15,427. 20,694. (5,267. ) !+0,226. ; Insurance Other _ , i I = I TOTAL ----1y-1$3,-2626._.. 9791r976- ----.. 0-4,199, _ !,613,,895,--; OTHER ASSETS: ' 1 Miscellaneous investments 158,353• ; 158,353. ; r ; 5 Nonoperating property = 26,76o. ; 25,768. ; 992. l05,6 93. i + 1 ---' TOTAL -------1$5}113�- ;------ 184,121.--,----------992t.. 1— -�-7�7 --; DEFERRED ACCOUNT& ' Preferred stock expensed _ 2 33,805. 2 3,805. , 2 3,765. Common stock expenses 48,083. 48,083. ; -- 47,955• F Unamortited debt discount, 16,5614. 16,601. ; (37. ) ; 15,818. , premium and expense Other deferred items = 26,261. ; 26,973. ; (712.) t1,265. 1 , i 1 --------------------'--------------------'---------- ----- --- -------- -- TOTAL _ ].1 ,713. 11�,�+62.--'- -------� _�__.; - -- --g8,$03:__ ----------- -- --`1------- - 1 1 - , 1 I ' _ i , + t 1 =_..------------------+__--------_---__----1--..-----_---_--_-._,_-_----------------------------------------- 1 � TOTAL ASSETS 18,129,865. ; 17,768,085. ; 361,780. 17,568,olE�. ' Exhibit B Page 1 of 3 Pages SOUTHERN CALIFORNIA WATER.COMPANY Page 2 BALANCE SHEET As of July 31,i„ 1950 ..........................................................................................................................................�„..,., „ ... ...... LIABILITIES Thi:4 Month Last Month ; Increase July 31 ; June 30 (Decrease) Doc. 31,1949 .............................................................................................. ' CAFITAL STOCK: ' Common( 87,669.8 shares) 2,191,745. 2,181,320. 10,425. 2,Ogg,245. Preferred (4%%0-32,000 shares) 800,000. ; 800,000. ; -- ; 800,000. ; (4% —32,000 shares) 800,000. 800,000. 800,000. ; (5Y2%—32,300ahares} 807,500. 824,875, (17,3 7 5• ) 8 88,750 i S TOTAL = ---4,E06,3.95�--;------ ---;---4,587,995- ---; FUNDED DEBT: ' First Mortgage Bonds.2 7/$%Series due 1977 5,100,000. � 5,1C)0,000. , -' 5,100,000. ; 000. First Mortgage Bonds,3�o Series due 197$ = 990,000. 990,000. ; '- ; `�90, -----+--------------------'--------------------- ' TOTALCURRENT LIABILITIES. LIABILITIES: `--- ---- ' Accounts payable 198,979• ; 175,035• ; 23,944. ; 112,961. ; Dividends declared = 98,884. ; -- ; 98,884. -- , Consumers'deposits 64,965. 65,778, ; (813:) 7G,611. ; Accrued interest on funded debt _ 41,846. ; 26,912. 14,934. 26,8��7. ; Accrued taxes: r , 190,443. ''4 571. 165 872. 1pt' 9 State local and miscellaneous taxes ` , 2 , , , , t�t72 , Federal taxes on income 224,520.. ; 1Cr1�8,454. ; 36,066. ; 232)431. Accrued insurance 12)853. 10,765. 2,088. 8,945. ; Other current liabilities 39,062. ; 38,824. 238. ; 4o,886. --------------------'--------------------'--------------------' ------- TOTAL : _--6-7-1,-55.2-------------5.30r339--- ;----341,2. .3------;------`597r350fl -- OTHER LIABILITIES: Consumers'advances for construction 849,427. 827,81g, 21;608.. 7 60,1g8. Miscellaneous deferred credits 1,753. 2,207. (454. ) 3,727. TOTAL = ------83.5}rQ26,_-- -----21,.154=- ----76a-925.----' RESERVES: Depreciation 3,865,'711. 3 '835,190. ,30,521.. 3;674,537. Uncollectible accounts 7,000. 7 s 000. -- ; 7,000. Employees'pension _ 36,709• 3 7,2'47'-. (5 38. ) 4G,470. --------------------'--------------------'--------------------'-------------------- ' TOTAL ;-----�9, - 3=----- ' PREMIUM ON PREFERRED STOCK 101,120. - -- 101t 120. ----'- " - _ - - 101,120^ --'.----- -- --------------------'-------------------- '--------------------'--------------------- DONATIONS IN AID OF CONSTRUCTION 670z 188_ -- -- r��68,83 -- 1,_35 _ ---664 397.---_, ---- -- CAPITAL sclRPLus =----,----- 45 ----=-6, ----- EARNED SURPLUS: Balance at beginning of year 650 -- 583,669. 441. 6=0441 81!T. ) _ ; (3,369• ) Adjustments (814,) ;. Net income year to date ----222,$�+9.----'-----�5�=;9h1�---'- ---67i88------'-----4567# .----'e TOTAL _---872} z6-------------8.4 ,588- 6-7,8811.-_--- 1,0aZ,2-7a---- Dividends on common stock = 210,315. 139,034. ; 71)281. ; 272,470. ; Divideruisonpreferredstack ?-----_8?k,2 8-----=--------562,6 5:,:_-- -----2.7,603�____-i---_ 114,367----_� TOTAL !----0 31-----'-----19-5; 5;--;--'-----98 58k------�-----3,a6,83?�--- Balance at end of perio I(see noteh _ 5(7��33�___--;--_-_60�3,J2�•__._;_,---(3�a��v,)___-' bSG,�l il,----� ,- . TOTAL LIABILITIES 8,129,865. ; 17,768,085. . ; 361,780. ;17,568,016. `......:.................................'......................................................................................................................... $207,889. is restricted for the payments of dividends under the terms of the Indenture covering the First .blortgage Bonds. Exhibit B Page 2 of 3 Pages SOUTHERN CALIFORNIA WATER CO-,APANY Comparative Summary of Net Income Month of- lwfUlY, 1950.................. ............... .....................................................................l.................I....................................... ............................ .........!....... ...... ............. ...................... ........ THIS MONTH CALENDAR YEAR TO DATE T'ii;Z;L�V'E LA')ii1l) '1111S Mu; Z------------------------------ ----------- ---------- ------- Increase or 7nn-rease or Increase or This Year Last Year Decrease = This Year Last Year De^rease This Year ...............................I ............. .......... ............... ........... ............... .......................................... ...... OPERATING REVENUES: 266,573- 252,444. 14,129. 1,399,191. 1,316,466. 82,725. 2 465,355. 2,327,042. Water 138,31, 166 16)166. 1, 17,323. U 97,648. (4,636. ) Electric .9157-) 93,012 1 )039. 1711148�. (5,446.) Ice --------- ------- -----------------7_75,------ ------ 473------ --------2-,r714------- -------- --------44,J,87------ ------41 �__J,4_ -42------:----80.1-9-90--------L-21) 3j TOTAL OPERATING REVENUES ------2 .9,-7EQ........... -------- -37-,7 -67-5,-5 ------ Than Federal Taxes on Income); OPERATING EXPENSES(Other OPERATION: Water 100,979. 93,787- 7,192- = 6o5,220. 567,168. i 38)052. 1,033,269.. off 1),7()$ 52,565. 6 437. 6 (34o. 42,158 42 308. (150. ) i Electric .9 777, 139. 72 723. 1.� �5,016_ 99 )21,7------ 3 (2 ...... 17- ------ ------1 -------25,557------ Ice ------ - --------------- 0. ------- ------ TOTAL 623, 5 9,�49 :2 -.--.1 ------ o.9,977----------- MAINTENANCE. 169,861. (8,485. ) 11,900. 11,324. 576. 95,293. 99,118. (3,825. ) 178046. Water 295. 158.) 2 238. 1 4,251. 4080- 4 Electric 137. P868. 370- 2 6 -3_- ------- r2 Ice ------------aQ-9....... ----------- ---------�Y6,_ 917- 2- ----- ------- q 39,- ----- ---------- ------ --------- ------ ------16� -4-46---- 64 18o 490. 681 664. 43 -7 - (1231�: y TOTAL aAk ........... ------------------ --------p------L_ - -_ , _ I ----------------- ------ ...... j------- --- ------- ----------- -- UNCOLLECTIBLE ACCOUNTS: 151. 103. 48. 22866. 3,L034. (168. ) 5,270- 4,723. 547. Water Electric (51. ) 1 (15.) (36. ) 72. 7T. (5- ) 112. 144. (32. ) Ice ---------------------- I--------------------- ------ - ------ ----------- ----- ------------------- ------------ -------- -------4 - -------- --------------- -------- -- --------- � 7--- -----------100. 88* I 12 2,938. 3 yi �A ) ---- 2. ------ t867_'---- ------- -- �5?-- -----------------._1 ------- -------------. --.:__..---_'-- GENERAL TAXES. 143,440. 40,335. Water 15,857. 14,265. 1 592. 107,942. 84,905. 23,037- 183,775- 10 23, 2,231. 1 882. 3,029. 425- 18.7075- 5,350 Electric 349. 13,454. 1 147. 1 058. 89. 1 834. 1 81. Ice 185. 170. 15. 1 1 .9 753 --------------------- --------------------- -------- ----------------------------------- ------------61------- ----- 96 3 8 1 ---------------- ------2-0--9--,-0-�4 ----163,268---- - ----- ------ 956. 9 122 26,155. . Y5_.p.7K .... ...... --------- -------- ------------------------- ------ -------- TOTAL go_�Y: 1.)� j ------------- 188 1W Z! § 331 482.? PROVISIONS FOR RETIREMENTS ------- ------ ------------ ------------ ---- ----- ----------------- ........ TOTAL OPERATING EXPENSES(Other Than 1,oq6,o1o. 1,ol 251. 112. 4 838. 81,172. 1 865,253. 1,767,584. 97)669. Federal Taxes on Income) 158Y 13, _)........... I -------------- ------------------------------------------ ------ -------------- -------- --------------------- ------------------------------------------ ------- NET OPERATING INCOME(Before Federal TAxes on Income) -----1--1-8-.405------- ---1-17- 77--0------- ........-6-35. .422, .... ..---422,903---- - -------(182.)----- •--810- 2 328.---------772,416.--- 37,92 ----- ----------- ..... ---- - --- - FEDERAL ON INCOME528. (4 AX,,�12. 180,689. 16 123. ----- ---------- ------------------------ -- -- ------- .......... q!1 ----- ------- -------- ---------1---------- 325,21 16. ----5_W.T?7_t--------------- _7�9 NET OPERATING INCOME -jag,----- 80 ------- -------- 2�, ;--------- -------- ------ 39�j ---------------- ...... ----- ----- 101. ) 2 3,571 NON-OPERATING INCOME Net 760- 3,944. (31-184. ) 16 579- (13,008. 14,342. 18�1443- (4 --- ---------------------I- z ----------------------------------------- --------------------- I -------------------- --------------------- ----------------- GROSS INCOME 83,099. 84,621. (1,522. ) 328�784. 337,954. - (9,170. ) 627,858. 610,170- 17,688. --------------- --------------------- ----------------- -- --------------------- ---------------------- --------------- ------ ---- ---------------- - --------------------- ------------------- f INCOME DEDUCTIONS: WEREST. Funded debt = 14,1694. 14,719- (25.) = lo2,856. 103,031. (175. ) = 176425. 171,285. 5,14o Floating debt 482. 227- 255. 2,826. 11477. 1.,349. 4,364. 2,e__45. 2,119 z AMORTjZATION OF DEBT DISCOUNT AND EXPENSES 36. 36. 253. 253. 1, 435. 3,521. (3,086 - -------------------- ------ --------------------- ---------------------- ------------- ------- --------------------- ------------------------------------------- --------- z 15 212. TOTAL INCOME DEDUCTIONS --------- ------ 446 634. 433,119. '515. NET INCOME (1,752.) 222 849. 233,193. ('10,344. ) 13 57 887- 69,639. p J, ,,,....:' .......... ....... .................. ...................... ....................................I........... ............................... ..............I......,........................ Page 3 of 3 Page-z s, SOUTHERN CALIFORNIA WATER COMPANY Huntington Beach District Table Showing Operating Revenues and Expenses for the Years 1947, 1948, and 1949 1947 1948 1949 Operating Revenue: Commercial--Metered Rate $ 34,920.79 $ 35,546.89 $ 35,760.50 Industrial--Metered Rate 19,844.91 22,693.02 21,272.05 Earnings from Municipal Hydrant Rentals 4,231.00 4,333.50 4,512.75 Earnings from Sales to Municipal Departments 2,691.19 2,507.46 2,433.65 Earnings from Sales for Irrigation - - 1,539.87 Miscellaneous Earnings from Operation - 1,507.31 280.11 Gross Operating Revenue $ 61,687.89 $ 66,588.18 $ 65,798.93 Operating Expenses: Source of Water Supply Expense $ 1.27 $ - $ 40.22 Pumping Expense 7,395.21 8,391.14 9,594.51 Purification Expense 742.21 1,851.05 3,300.94 Transmission and Distribution Expense 7,311.03 11,007.95 9,585.25 Commercial Expense 4,368.85 4,757.80 4,918.82 General and Miscellaneous Expense 9,042.28 9,486.56 8,169.96 Taxes (Exclusive of Federal Income) 4.9071.16 3,846.06 3,724.16 General Amortization of Capital 7,706.35 9,063.25 9,355.22 Uncollectible Accounts 50.34 68.36 167.79 Operating Expenses (Before Federal Income Tax) $ 40,688.70 $ 48,472.17 $ 48,856.87 Net Operating Revenue (Before Federal Income Tax) $ 20,999.19 $ 18,116.01 $ 16,942.06 Federal Income Tax 5,729.78 3,967.00 3,453.60 Net Operating Revenue $ 15,269.41 $ 14,149.01 $ 13,488.46 Exhibit C SOUTHERN CALIFORNIA: WATER COMPANY Huntington Beach District i Table Showing Summary of Actual Operations for the Year 1949, and Surr mar y of Estimated Operations for the Years 1950 and 1951 with Revenue Based _on Present Rates, and a Summary of Estimated Operations for the Year 1951 with Revenue Based on 1 LToposed Rates as Shown in Exhibit A, Attached Hereto Revenue j Based on Proposed Revenue Based on Present Rates Rates Months Actual j Actual 6 Months Estimated Estimated Estimated i 1949 1950 1951 1951 Operating Revenue: Coriercas:7-dietered Rate $ 35,760.50 $ 36,99o.00 $ 37,980.00 $ 66,370.00 Industrial--Metered Rate ' 21,272.05 18,310.00 18,200.00 28,900.00 Earnings from MAnicipal Hydrant Rental 4,512.75 4,750.00 4,970.00 4,970.00 Earnings fron. Sales to Municipal Departments 2,433.65 2,96o.00 2,990.00 4,49o.0o Earnihg's.. from'Sales for Irrigation 1,539.87 1,710.00 1,710.00 3p.190.00 Miscellaneous- Earnirgs from Operation. 280.11 320.00 320.00 390.00 Gross Operating Revenue $`65",758-.93 $ 65,04o.0o $ 66,170.00 $108,310.00 Operating Expenses: Source of Water Supply Expense $ 40.22 $ - $ 100.00 $ 100.00 Pumping Expense 9,594.51 11,050.00 12,670.00 12,670.00 Purification Expense 3,300.94 3,800.00 5,440.00 5,44o.00 Trarisr:ission and Distribution Expense 9,585.25 11,6o0.00 10,900.00 10,900.00 Commercial Expense 4,918.82 4,930.00 5,290.00 5,290.00 General and Miscellaneous Expense 8,169.96 9,030.00 9,470,00, 9,470.00 Taxes (Exclusive of Federal Income) 3,724.16 4,120.00 4,860.00 4,86o.00 General Amortization. of Capital 9,355•22 12,750.00 14,030.00 14,030.00 Uncollectible Accour.ts 167.79 16o.00 200.00 2G0. �0 Operating Expenses (Before Federal Income Tax) $ 48,856.87 $ 57,44o.00 $ 62,96o.00 $ 62,96o.o0 Net Operating Revenue (Before Federal Income Tax) $ 16,942.o6 $ 7,600.00 $ 3,210.00 $ 45,350.00 Federal Income Tax 3,453.60 - - 15,170.00 Net Operating Revenue $ 13,488.46 $ 7,6o0.00 $ 3,210.00 $ 30,180.00 ` Depreciated Rate Base $375,993.00 $448,94o.0o $502,76o.00 $502,76o.00 p Indicated Rate of Return 3.59% 1.69% 0.64% 6.0o% SOUTHERN CALIFORNIA WATER C014PANY Huntington Beach District Table Showing Development of Rate Base for the Year 1949 .Actual, for the Year 1950 six Months Actual and Six Months Estimated, and Estimated for the Year 1951 Average Average Average Year. Year Year 1949 1950 1951 . Fixed Capital District Fixed Capital $ 421,410 $ 534,285 $ 590,84o Main Office and Construction Yard Fixed Capital Pro-rated to Huntington Beach 10,931 12,210 13,030 Construction Work in Progress 41,489' 13,200 14,990 Total Fixed Capital $ 473,830 $ 559,695 $ 618,860 Deductions Donations in Aid of Construction $ (4,370) $ (4,460) $ (4,615) COnSUiler Advancee in Aid of Construction (5,435) (10,880) (10,690) Noz_-operative Property (4,255) (4,255) (4,255) Total Adjustments $ (14,060) $ (19,595) $ (19,56o) Working Capital Material and Supplies $ 12,091 $ 9,610 $ 10,390 Working Cash 5,963 6,760 7,340 Total Working Capital $ 18,054 $ 16,370 $ 17,730 UNDEPRECIATED RATE BASE $ 477,824 $ 556,470 $ 617,030 ,ccrued Depreciation Reserve District Depreciation Reserve $ (99,183) $(104,280) $(110,570) Depreciation Reserve on Main Office and Construction Yard Fixed Capital Pro- rated to Huntington Beach (2,648) (3,250) (3,700) Total Depreciation Reserve $(101,831) (107,530) $(114,270) DEPRECIATED RATE BASE $ 375,993 $ 448,94o $ 502,76o Note: Red figures in parentheses Exhibit E PRESENT METERED RATES NOW CHARGED IN THE HUNTINGTON BEACH DISTRICT SOUTHERN CALIFORNIA WATER COMPANY 1206 South Maple Avenue Los, Angeles 15, California Schedule No. 1 Huntington Beach Tariff Area GENERAL METERED SERVICE APPLICABILITY Applicable to metered water service for domestic, commercial, industrial and other purposes. TERRITORY Within territory in and adjacent to the incorporated City of Huntington Beach, in the County of Orange. RATES Per Meter Quantity Charge Per Month First 800 cubic feet, or less $ 1.00 Next 2,800 cubic feet, per 100 cubic feet . . . . . . . . . . . .125 Over 3,600 cubic feet, per 100 cubic feet . . . . • • . • • . • .08 Minimum Charges Per Month For 5/8 x 3/4-inch meter $ 1.00 For 3/4-inch meter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.25 For 1-inch meter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.50 For 1-1-inch deter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.00 For 2-inch meter . . . . . . . . . . . . . . . . . . . . . . . 0 . . . . . . . . . . 3.00 For 3-inch meter . . . . . . . . . . . . . . . . . . . . . . . 0. . . . . . . . . . 6.00 For 4-inch meter . . . . . . . . . . . . . . . . . . . . . . . . . 4 . . . . . . . . 12.00 For6-inch meter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.50 The Minimum Charge will entitle the consumer to the quantity of water which that monthly minimum charge will purchase at the Quantity Rates. Advice Letter No. 126-W Date Filed August 29, 1949 Effective October 1, 1949 File No. 602 Issued by C. P. HARNISH President Exhibit F Page 1 of 2 Pages PRESENT METERED RATES NOW CHARGED IN'THE HUNTINGTON BEACH DISTRICT SOUTHERN CALIFORNIA WATER COMPANY 1206 South Maple Avenue Los Angeles 15, California Schedule No. 2 Huntington Beach Tariff Area MUNICIPAL RATES APPLICABILITY Applicable to all water service supplied to the municipality, City of Huntington Beach, in the County of Orange. TERRITORY Within territory in and adjacent to the incorporated City of Huntington Beach, in the County of Orange. RATES Monthly Metered Rates: For all water used for sewer flushing, City Hall grounds, parks and parkways, Street Department, and Ocean Front Recreation, six cents per 100 cubic feet. For all water used for buildings, and/or beach concessions, in- cluding Main Street Pier, eight cents per 100 cubic feet. All meter readings will be combined under their respective classi- fications for the purposes of computing monthly bills. As there is no minimum billing under this Tariff Schedule, the combining of meter readings does not affect the total billing and therefore does not conflict with Standard Rule and Regula- tion pertaining to "Readings of Separate Meters Not Combined. " SPECIAL CONDITIONS Applicant for service under this Schedule will be required to take this service for a period of twelve consecutive months. Advice Letter No. 126-W Date Filed August 29, 1949 Effective October 1, 1949 File No. 602 Issued by C. P. HARNISH President Exhibit F Page 2 of 2 Pages �41e�enme fn ` THE CITY OF HUNTINGTON BEACH MAP ON FILE WITH CITY CLERK Z BARGAIN AND SALE DEED Q Corporation THIS INMNTURNi Made the 24th day of September` in the year of our Lord nineteen hundred and twenty BETWEEN Huntington Beach Water -Company, a Corporation organized under the laws of the State of California, and having its principal place of business in the City of Huntington Beach, County of Orange and State of California, the party of the first part, AND Huntington Beach Company, a California corporation the party of the second part, WITNESSETH: That the said party of the first part, for and in consideration of the suss of Ten Dollars gold coin of the United States of America, to it in hand paid by the said party 'of the second part, the receipt whereof is hereby acknowledged, does by these presents grant, bargain and sell, convey and confirm unto the said party of the second part., and to its successors and assigns forever, all that certain lot,piece or parcel of land situate, lying and being in the City of Huntington Beach,and County of Orange and State of California and bounded and particularly described as follows, to4Kt: All that piece and parcel of land lying in the NW-; of Section 2 and She NJ* of Section 3, T. 6 S., R. 11 W., S.B.B. & M., more particularly described' as enclosed by the following described boundary, lines, to-wit- Beginning at a point of compound curve, which point is N.. 810 56* 8" W, a distance of three hundred (300) feet from "the northwesterly corner of Smeltzer Avenue and Clay Street (now known as Summit Avenue) as shown on that certain map of Garfield Tract, recorded on page 27-8 of Book 7 of Miscellaneous Yaps, Records of Orange County, Californian and running thence in a Westerly direction a distance of 445,058 feet from said point of beginning along the are of a circle of a radius of 510 .feet= the center of which oircle. beer-s South 310 281 W. -ftft"#he point of beginning, to a point of compound curve, thence southerly along the are of a circle. of 135,362 feet radIxop a distance of 240,03 foot to a point of compound curve, thence southeasterly along the are of a oirol4 of 613,156 feet radius, through a distance of 222.950 feet to .a point, of compound curves thence easterly along the are of a cire%e of 306,543 feet radius, through a distance of 470.41 feet� to a point of compound curve, thence northeasterly along t4 are of a circle of 149.52 feet radius,, through a distance of`°$Y,,4 feet to a point of compound curve, thence north- westerly along the are of a circle of 205 feet radius, through a.4istanco of 226.79 feet to the point of beginning, contain- ing 5..17 aores. RESERVING unto the Grandob, however, the right and easement, to use maintain, repair, renew and reconstruct the reservoir now existing on said property, together with the right to use the water mains running therefrom, and the further right to lay such additional water mains as the Company may require, adjacent to the water mains now existing and a s close thereto as is practicable to lay the same; together also with the right to use and oprate the water well now on said pre- mises for production of water therefrom. TOGETHER with all and singular the tenements, hereditaments and appurtenances thereunto belonging, or in anywise appertaining, and the revbrsion and reversions, remainder and remainders, rents, issues and profits thereof. TO HAVE END TO HOLD , all and singular the said premises, together with the appurtenancee .unto the said party of the second part, and to its successors and assigns forever. IN WITNESS WHEREOF, the said party of the first part has caused its corporate name and seal to be affixed by its Vice President and Secretary thereunto, duly authorized the day and year in this indenture first above written. HUNTINGTON BEACH WATER COMPANY By ALEX MILTS Me-President By JAS S. LAWSHE ecretary . State of California ) County of LGBANGELES ) Be, On This 24th day of September A.D. 1920 before me, C. E . Rachal, a Notary Public in and for the said County and State, residing therein, duly commissioned and sworn, personally appeared ALEX MILLS known to me to be the Vice President and JAS. S. LAWSHE, known to me to be the Secretary of the Huntington Beach Plater Company the corporation that executed the within instrument,. known to me to be the persons who executed the within instrument, on behalf' of the Corporation therein named, and acknowlddged to me that such Corporation executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and af�ixed my official seal the day and year in this certificate first above written. C. E. RACHAL No. 38349 DEED BARGAIN AND SALE Corporation Huntington Beach Water ComW ny to Huntington Beach Company Dated Sept. 24, 1920 Recorded at Request of Grantee Sep, 250 1920 At 4 Min. past 10 A.M. in Book 363, page 392 of Deeds, ORANGE COUNTY NECORDS JUSTINE WHITNEY County kecorder Fees. $1.30 FORM as4 SM It,�•l• ABSTRACT AND TITLE INSURANCE COMPANY - _A T JOINT PROTECTION FORM Guarantee Fund $100,000''° Deposited with Treasurer of State of California CAPITALAND SURPLUS OVER $350,00011 �i ,C. D\8A L. PRESIDENT \ D. N. KELLY, SECRETARY 01111-1 \mow - -10 ow TELEPHONE rib 414-16 No.MAIN ST. Amount 0 Order No.__90?'7S Ld �465-H I! ii H i! Vf GMifi? 3nourmar? j i Herein called the Company, for a valuable consideration, paid for this Policy of Title Insurance, ii AMERICAN STATES WATER SERVICE COMPANY OF OALIFORNIA, I herein called the Insured, against all loss or damage not i Fo-r--t-- -two---H---u--n--d---r--e---d-----F--i--f--t --------- --------------------- ---------------------- -- dollars, which the Insured shall sustain by reason of title to the land described in Schedule A being vested at the. date hereof otherwise than as therein stated, or by reason of unmarketability of the title of any insured vestee to or in said land on account of defects, liens, encumbrances and other matters not excepted in Schedule B, or by reason of any defect in, or lien' or encumbrance on said title,at the date hereof, other than defects, liens, encumbrances and other matters set forth iri.said Schedule B, all subject however to the con- �I ditions and stipulations hereto annexed, which conditions and stipulations together with said Schedules A and B are hereby made a part of this policy. The Company hereby also insures each Insured owner of an indebtedness secured by a mortgage or deed of trust described in Schedule B,against loss of principal, interest or other sums secured thereby, which such Insured shall sustain by reason of any defect in the execution of said mortgage or deed of trust, or of any note secured thereby, or by reason of priority thereto of any lien or encumbrance at the date hereof except as shown by said Schedule B. 3n4 Mi'sttmang 314tr ct, Abstract and Title Insurance Company has caused its corporate name-and seal to be hereunto affixed by its duly authorized ofltcers, this 14th day of February, 1931 at 8:45 l A.- M. (Tga ract and fide 14,n6una4tee Company. 'I � II BY � President i Attest Secretary This Policy consists of--------- - -----—-------pages, which are numbered at the end of each page. I Y 1 Y FORM x30 eM ts•e-ae ABSTRACT AND TITLE INSURANCE COMPANY OWNER'S AND JOINT PROTECTION FORM lip SCHEDULE A it �i 1. The title to said land is at the date hereof vested in fee simple absolute in ;I I ii AMERICAN STATES WATER SERVICE COMPANY OF CALIFORNIA, II a corporation. I 2. Description of the land, title to which is insured by this Policy: �I i The West Five acres of the South 20 acres of the West i 60 ores of the North half (N*) of the Southwest quarter (SWU of Section 26, Township b South, Range 11 West, S. . B. B. & M. , in the County of Orange, State of California. � II �j I r 1 i i I I I �i - ii i� • i, I �I I I i Page 2 of Policy No. 90778 - u • FORM SOO■M 6.740 ABSTRACT AND TITLE INSURANCE COMPANY. JOINT PROTECTION FORM I i III !II I' SCHEDULE B EXCEPTIONS Defects, liens, encumbrances and other matters to which said land is subject: (1) Any facts which a correct survey and inspection of said land would show; rights or claims of parties in possession of any part of said land, easements, liens or encumbrances which are not shown by the Official Records of (a) the County of Los Angeles, prior to August I st, 1889, the date of the formation II of the County of Orange; (b) the County of Orange; (c) the Federal Offices at Los Angeles; (d) any City in or adjacent to which said land is located. li (2) Proceedings for municipal and district improvement, which, at the date hereof, are shown by I, the official records of the city in or adjacent to which said land is located, and by the official records of any district in which said land is located, but which proceedings have not resulted in imposition of a lien upon, or establishment of an easement over, or adjudication of the right to a public use of, said land or any part I I thereof. (3) Any action by any governmental agency for the purpose of regulating occupancy or use of said j land or any building or structure thereon. I (4) Second installment State and County taxes for the fiscal year 1930-31, due and payable. I (5) The reservation of the use and control of cienegas and natural streams of water and a right of way for irrigation and drainage ditches through the hereinbefore described II premises, as contained in deeds of record. it (6) The reservation of the West 30 feet of the premises here- i, inbefore described for roads, railroads and ditches as reserved in deeds of record. . I i I I, I I i! ;i I� 'I �� II !j I i it it it i i I I• j Page 3 of Policy TO- 90778 it FORM as* OM,fa-e-i• ABSTRACT AND TITLE INSURANCE COMPANY - JOINT PROTECTION FORM i ;i ;I t CONDITIONS AND STIPULATIONS OF THIS POLICY u CONSTRUCTION OF TERMS The term "the Insured" includes all named as insured on the first page of this Policy, and as to each named owner of said land (a) if a person, any person or corporation deriving an estate or interest in said land as heir or devisee of such owner, or (b) if a corporation, any person or corporation deriving an estate or interest in said land by dissolution, merger,or consoli- dation, and as to each named owner of indebtedness secured by mortgage or deed of trust described in Schedule B, each successor in interest in ownership of such indebtedness. The list of numbered "Exceptions" shown in Schedule B, is (a) as to,each of the Insured a statement of defects, liens, encumbrances and other matters to which said land is subject, and (b), as to any Insured owner of indebtedness secured by mortgage or deed of trust upon said land, also an insurance of the priority, as therein shown, of the lien of such mortgage or deed of trust. RIGHTS AND DUTIES OF COMPANY UPON NOTICE OF CLAIM The Company will, and shall have the right to, at its own cost, defend the Insured in all actions or proceedings founded upon a defect, lien or encumbrance insured against by this Policy. In case any such action or proceeding shall be begun, or in case knowledge shall come to the Insured of any claim of title or interest adverse to the title hereby insured, as insured, or which might cause loss or damage for which the Company shall or may 6e liable by virtue of this Policy, the Insured shall at once notify the Company thereof in writing, and if such Insured be the owner of an indebtedness, shall, at the same time, state to the Company in writing the amount of the entire indebtedness of the mortgagor or trustor to the Insured. If such notice shall not be given to the Company at least five days before the appearance day in any such action or proceeding and the right to defend such action or proceeding be not secured to the Company or if the Insured shall not, in writing, promptly notify the Company of. any defect, lien or encumbrance insured against which shall come to the knowledge of the Insured, in respect to which loss or damage is apprehended, then all liability of the Company in regard to the subject matter of such action, proceeding or matter shall cease and terminate, provided, however, that failure to notify shall in no case prejudice the claim of any Insured, if such j Insured shall not be a party to such action or proceeding, nor be served with summons therein, nor have any knowledge of such action, proceeding, defect, lien or encumbrance. In all cases where this Policy permits or requires the Company to prosecute j or defend any action or proceeding, the Insured shall secure, to it the right to so prosecute or defend such action or proceeding, and all appeals therein; and give it all reasonable aid therein, and permit it to use,at its option, the name of the Insured for such purpose. The word "knowledge" in this paragraph means actual knowledge and does not refer to constructive knowledge or notice which may be imputed to the Insured by reason of any public record or otherwise. The Company reserves the option,to pay, settle, or compromise for or in the name of the Insured, any claim insured against or to pay this Policy in full, and payment or tender of payment of the full amount of this Policy shall terminate all liability of the Company hereunder. I RIGHTS OF COMPANY UPON PAYMENT OF CLAIM n Whenever the Company shall have settled a claim under this Policy, it shall be subrogated to and be entitled to all rights, securities and remedies which the Insured would have had against any person or property in respect to such claim, had this Policy not been made, and the Insured shall transfer or.cause to be transferred to the Company such rights, securities and remedies, and permit it to use the name of the Insured for the recovery, retention or defense thereof. If the payment does not cover the loss of the Insured, the Company shall be subrogated to such rights, securities and remedies, in the proportion which j said payment bears to the amount of said loss. The Company has the right and option, in case any loss is claimed under this Policy by an Insured owner of an indebted- ness secured by mortgage or deed of trust, to pay such Insured the entire indebtedness of the mortgagor or trustor under said mortgage or deed of trust to such Insured, together with all costs which may have been imposed upon such Insured in litigation carried on by the Company for such Insured, in which case, the Company shall become the owner of, and such Insured shall at once assign and`transfer to the Company said mortgage or deed of trust and the indebtedness thereby secured and such payment shall terminate all liability under this Policy to such Insured. LIABILITIES OF COMPANY The Company will pay, in addition to any loss insured against by this Policy, all costs imposed upon the Insured in litigation carried on by the Company for the Insured, but in no case will the Company be liable for any costs or expenses incurred by the Insured in such litigation without the written authorization of the Company. If the Insured comprise more than one person or corporation, any loss under this Policy shall be payable, first, to the Insured owner of the indebtedness secured by any mortgage or deed of trust shown in Schedule B, in the order of priority therein shown, and thereafter, to the Insured owner of said land, provided that, whenever any such ownership, either of indebtedness or land, vests in more than. one, payment shall be made to such owners ratably, as.their respective interests may appear. The liability of the Company under this Policy shall in no case exceed in all the actual loss of the Insured and costs which the Company is obligated hereunder to pay, and in no case shall the total liability exceed the amount of this Policy and said costs. All payments under this Policy shall reduce the amount of the insurance pro tanto. The Company will not be liable to anyone for loss or damage by reason of defects, claims or encumbrances created subsequent to the date hereof, or created or suffered by the Insured claiming such loss or damage, or for defects, claims or encumbrances existing at the date of this Policy and known to the Insured claiming such toss or damage at the date such Insured claimant acquired an insurable interest. No provision or condition of this Policy can be waived or changed except by writing endorsed hereon or attached hereto signed by the President, a Vice-President or the Secretary of the Company. Page 4 of Policy No. 90778 ,. .__ t ,� ,'�' s Y., �. :��. . , r • . -- _- �_ __ _ _ - - ti _ �._: ��- - _� =- - �.....1 _ �-- J _ 'R - - _ —Y.�-- -� ICY S Acces a{`S 2D He.c s o f ��= w 60 Ac�rS of Nz o{.S�a of Sec. 26-5-// � 2d - a ter- -vc_ - -� � - � — - - -- - - -I `- i � ' � I - � .i I � Iv m I I � ` -- � _ �� �3�� i � i _ --- _� � � -- i � Guarantee Fund $100,000 �_' Deposited withT^easurer of State of California C1kPITALAND SURPLUS OVER $350,000oo 4i k _ r C. E. PARKER, PRESIDENT *"E l' o f ^ H.A.GARDNER,Ex ECUTWE VICE PRESIDENT..G�''' 're A.J.CROOKSHANK,VICE PRESIDENT I R.V.SHAFER,VICE PRESIDENT I R.C.MIZE,SECRETARY ;\....'.�aa aai a ;'•j:%'':_: )_. I B.D.PARKER.As$T:SECRETARY •!a � a�. L.R. KENNEDY,AssT.SECRETARY. CEO.A. PARKER.TITLE OFFICER. �rA 's HEAD,RUTAN AN D SCOVEL,ATTORNEYS a R:crsafnl�© :tngeles and ©r ge Counties Complete Amount .$12,500.00. Order No. 106678-C. I GUAiANTEE- Issued for the protection and benefit of HUNTINGTON BEA n WATER C OUP AA After a careful examination of the Official Records of the County of Los Angeles, State of California, prior to the organization of Orange County on August 1st , 1889, and of the Official Records , of the 1 County of Orange, State of California, except those hereinafter men- tioned, and of the Official Records of the Federal Offices located at Los Angeles, in relation to the record title to the land herein de- scribed, the X, E ORANGE COUNTY TITLE; 001 , 4 a Corporation, its principal place of business being; in the City of I Santa Ana, County of Orange, State of California, 4 HiREBY GUARaNTEES I ` in an amount not to exceed Twelve Thousand Five Hundred Dollars , . that 3 I the title to the first hereinafter described land, as appears from said records, is now vested in HUNTINGTON BEACH W Ti:R -COUPAt a Corporation. d FreeU all Incu >ub ran c e -a. Except lst : Taxes for fiscal year 1928-1929, not yet payable. ?nd. A Lease, covering the hereinafter described and other land, dated September 23rd, 1921, executed by Huntington I ° Beach Company, a Corporation, as Lessor, and Miley-Keck Oil Company, a Corporation, as Lessee, recorded October 4 J t.. loth, 1921, is Book 28, pa.,, e 52 of Leases, records of Orange County, California, to the record of which reference is hereby made for particulars . Note. Certain instru_r:ents appear of record affecting or Purporting to affect the interest of the Lessee under said lease, but no Guarantee is made as to the e*tect of the s ,we, or as to the present ownership or condition of said leasehold estate. Except_ 3rd. A Right of 'or pipe lines to be laid lDn a strip of land 8 feet wide, lying West of, parallel with and immediately adjacent to the East line of Lots Two ( 2) and Four (4). here- inafter described, as conveyed by the Huntington Beach Company to the Standard Oil Company by deed recorded December 15th, 1922, in Book 445, page 207 of Deeds, records of Orange County, California. " 4th. A Right of Way from time to time to lay, construct , maiiitain, operate, repair, renew, change the size of and remove :Ape lines for transportation of oil , petroleum, gas or water , with right of ingress or egress to and from same over and through, under or along a. strip of land 10 feet wide, lying South of, parallel with and immediately adjacent to the north line of Lot Two ( 2) hereinafter described, as �,•r':nt ed by the Huntington Beach Company to the Standard Oil Company by deed recorded October 6th, 1924, in Book 544, page 130 of Deeds, records of Orange County, California. " 5th. An ALreement , dated February 3rd, 1922 , executed by the Huntincrton Beach Company, a Corporation , and Petroleum ?,midway Company, Ltd. , a Corporation, rel..tirc to a license to .recon- struct etc. a pipe 1-ne for conveying was on a portion of the hereinafter described land, recorded January ;; th, 19„5, in u ` r r Book 561 , page 135 of De4ds , records of Orange Gounty, Califcrnia. All that certain real property situated in the City of Huntington Beach, County of Orange, State of California, described as follows: - Lot Two (2) and the East one-half of Lot Four (a) of "Tract !do. 77" , as shown on a Map recorded in Book 10 , page 20 of iviiscellaneous Maps, records of Orange County, California.. Excepting therefrom all oil , ga.s, asphaltum and other hydrocarbon . . substances in or under the above described property. Note. No examination has been made as to City Taxes or assessments. and the title to the land next hereinafter described is now vested in riU'�`I ,G'i'ON 'y a �,R 0014 AiJY, a Cor,_or:)tion. Free of &IL I n c u m b r a n c e s. Excel Stat Corcoration Fran hire -for the year 1920' , not examii;ed. " 2nd. Taxes for fiscal year 1 26-1929 , . n:�t yet payable. " 3rc . An Agreement' ina.de by tr.e Huntington Beach C:)mpa.ny, a. Corpora- tion, with the Standard Oil Co;c.pany, a. Corporation, cont . ined in that certain lease of property adjoining tr,: land next hereinafter described, dated September 27th, 1919, in which the said Huntington Beach Company is Lessor, and the said Standard Oil Company is Lessee, recorded October 6th, 1919, in Book 11 , page 217 of Leases , records of Oran_;e County, California, as raodif i ed by an instrument executed by said Companies, dated October 21st , 1920, recorded November 9th, 1920, in Book 15, pace 322 of Leases, records of Orange County, Cal ifor_.ia, tnat said Huntington Beacri Coiii,oany will not sink any well or permit through lease or otherwise the sinking of any well on any of its lands adjacent to the lands covered by said lease at a less dist�a.nce than 150 feet from -J- a the boundaries of said leased lands. n -DLSC:ti1�T IGti- X\ The right and easement to use, maintain, repair, renew and rec:,n- , struct the reservoir now existing, together wits, the right to use the water mains running therefrom, and tl:e further right to lay such additional water mains, as the Huntington Beach Water Company may require, adjacent to the water mains now existing and as close thereto as practicable to lay the same, together with the right to use and o-cera.te the water well for ::production of water therefrom all on the following described property, to-wit ;- All that certain real property situated in the County of Orange, State of California, described as follows ; A portion of the North-west quarter (Vil) of Section Two ( 2) and the North-east quarter (NE4) of Section Three (3) , both Sections bein in Township Six (6) South, Range Ele-.en ( 11) ',rest , S. B. B. & 14. , particularly described as follows; Beginning at a point of compound curve which point, is North 810 561 . 8" 'Nest a distance of 300 feet from the North-westerly corner of Smeltzer Avenue and Clay Street (now known as Suir_amit Avenue) sh.Dwn on a Map of Garfield Street Addition to Huntington Beach, recorded in Hook 7 , pages 27 and 28 of Miscellaneous baps , records of Orange County, C,iliforriia, and running; thence in a Westerly direction a distance of 445.058 feet from said point of be :inning along; the arc of a circle' of radius of 510 feet , the center of which circle bears South 310 28 ' West from point of begin- ning, to a point of compound curve; thence Southerly aloe- the arc of a circle of 135. 362 feet radius, a distance of 240.03 feet to a po .nt, of compound curve; thence South-easterly orlon ; the arc of a circle of 613. 156 feet radius through a distance of 222. 950 feu-t to a point of comp -)und' curve; thence Easterly alon the arc of a circle of 305.543 feet radius through a dist .,.nce of 470.41 feet to a ooInt of cornp.. and curve; trience -4- do .. North-easterly along a are of a circle of 139.52 feet radius, through a distance of 86. 74 feet to a point of compound curve; thence North- ' westerly along the arc of a circle of 210 feet radius through a distance of 226. 79 feet to the point of beginning, containing 5. 17 acres, more or less, as reserved in the deed from Huntington Beach Water Company to the Huntington Beach Company recorded September 25th,, 1920 , in Book 363, page 392 of Deeds, and. re-recorded October 16th, 1923, in Book 459, page of Deeds, records of Orange County, California. and the title to the land next hereinafter described is now vested in HUNT INGTON BEACH WAT14,;R COMP N , a Corporation, by deed dated July 5th, 1921, from Huntington Beach Company. Free of all I n c u ffl b r a n c es Except Ist. State Corporation Franchise Tax for 'the yezr 1928, not examined. 2nd. Taxes for fiscal year 1928-1929, not yet payable. DESCRIPTION- , ;�• .,;.. .. All that certain real property situated in the City of Huntington Beach, County of Orane, State of California, described as follows:- Lots One (1) , Three ( 3) , Five (5) and Seven ( 7) in Block Seven Hundred Twelve (712) of "Wesley Park Section, Huntington Beach1f, as shown on a Map recorded in Book 4, page 17 of Miscellaneous Maps, records of Orange County, California. Excepting therefrom all mines, minerals, oils, gases and other hyUro- carbon substances under said property with the power to take said minerals, oils and gas from under said .property and to lay and repair pipes for conveying said minerals, oils or gas over and across said property and to erect upon said property any buildings , structures, machinery or other appliances incident to the recovery of said minerals oils or gas from said, lands, as excepted in the deed for said lots from Huntington Beach Company to Huntington Beach Water Company, dated July 5th, 1921 , recorded July 14th, 1921, in Book 401 , page 581 of Deeds , records of Orange County, California, which deed provides that n.)thing c::ntained in said reservation shall entitle grantor to actually drill any . well for oil or gas or other mineral upon said vremises and all of said mineral operations shall be conducted in a- manner so that at all times c-rantee shall have , full and absolute right to explore for and produce from said land water without litt,itation, and ,to operate and produce from any water well placed ucon said land, water for its uses. . Note No examination has been made as to City Taxes or assessments. and the title to the land next hereinafter described is now vested in HUNTIIvGTJN BEd ri WATZR QkPAN , a Corpor:t ion. Free of AU I n c u m b r a n c e s . Except let . State Corporation Franchise Tax for the year 1926, not examined. " 2nd. Taxes for fiscal year 1928-1929, not yet payable. -DESCRIPTION- All that certain real property situated. in the County of Orange, State of California, described as follows, to-wit :- '� Lot Thirty-three (33) in Block "A" ; Lot Thirty-nine ( 39) . in Block "B" ; Lot Twenty-nine ( 29) in Block "C" ; Lot 'Twerity-eight (28) in Block "D" ; Lot Twenty-five ( 25) in Block "E" and Lot Twenty-seven ( 27) in Block "F" all in "Garfield Street Addition to Huntington Beach" , as shown on a Nap recorded in Book 7, pages 27 and 28 of Miscellaneous Viaps, records of Orange County, California. Blocks "C" , �'���� , " �]" and "VI are subject to the reservation of the use and control of ai enegas and natural streams of water , if any, ... . -6- f naturally upon, flowing across, into or by said described tract, and subject to the right of way for and to construct irrigation or drainage ditches through said tract to irrigate or drain the adjacent land. Subject to an easement over the rear 4 feet of all of said lots for water mains for irrigation purposes and for pole lines as shown on said Map. Said Lot Thirty-three ' ( 33) in Block "A" , Lot Thirty-nine ( 39) in Block "B" , Lot 'Twenty-eight (28) in Block "DII and Lot Twenty-nine ( 29) in Block IIC" are subject to a right of way as granted to the Standard Oil Company by deed recorded in Book 377, page 303 of Deeds, records of Orange County, California. Said Lot Twenty-seven ( 27)- is .subject to a right of way as granted to the Standard Oil Company by deed recorded in Book 447, page 335 of Deeds, records of Orange County, . California. Subject to easements, franchises and licenses affecting a portion of said lots as recited in the assignment from Amalgamated Oil Company to Associated Oil Company recorded in Book 533, page 1 of Deeds , records of Orange County, California. This Guarantee is issued upon the stipulation that the liability of this Company shall in no case exceed in all the amount stated on the first page hereof and shall in all cases be limited to the actual loss of she persons and corporations for whose protection and benefit this Guarantee is issued as their respective interests may appear,provided,that each subsequent owner or pledgee of any indebtedness secured by mortgage or deed of trust shown herein,shall be entitled to,and shall have all the protection,rights and remedies secured to the original owner thereof by the issuance of this Guarantee. This Guarantee 1Z not include an examination of or report on,or guarantee as to: Reservations in Federal or State Patents,building contracts,crop or chattel mortgages and recitals contained therein,water rights,mining claims,or matters affecting title resulting therefrom. Action b any government or public agency for the=purpose of regulating,restricting or controlling the occupancy or use of the land herein desaribedor. local her the City of a Ana, ents and ds of tric any atlN�hce v records legality of district any tax eale,tpubl �esseaunent leaxt easemrntadeclaration of homestead,attachment, nrdieeds relating the City of Santa Ana,not now due and payable to the Count Tax Collector,and in the Cityof Santa Ana onlyafter the amount has'beeome a record lien use of the land or money yp y judgment mentioned herein. Liens for any Inheritance Tax on property transferred in contemplation of death,until notice is shown by the official records of the County of Orange. that proceedings for the collection of such tax have been commenced. Matters not shown by the official records covered hereby. ZU MMItUUMB 14MOf.the Orange County Title Company has caused these presents to be signed by its duly authorized officers, under its Corporate Seal,this 4th 'day of October, 1928, at 8:00 A. M. ORANGE U I= Za EGP:HRN Br-:�._ Vfe�P_WW& By..� . . .li�aZidlf.]�seeretary 7 •.o i i r //Q 77 ate. 2 I o.co. cal i j t f I `Go' Sur�rr�if .5� 40' o . I i h i � 4 D I i j I t i ORows CiouNTY TITLE COMPANY ; . i f�Ur��/r�gfor� c� w � 3 I � _ N OvAlwos Covxrr TITLs COMPANY f f - f i a i I •� :� 6or ic%' ✓'fir« i�io.� • Ab t7-AO 012s. /.✓o�i. o.Co.Cb/• r° J jo V 0 J �P �v ()2"oz CouNTY TITLE CoupAxy { +E 4 1 FBI � �Y{il cad _ I I \ WV r° S� I - t i tt 1 1 I� j[ Of �LCT. TL N Q iof 2B- � !of i IIRA (m LOVNTY TITLB COMPANY 4 1 i r PERSONAL PROPERTY 1. Vehicles 1954 Chevrolet 1/2 Ton Pickup (Serial No. 454Lol2084) 1957 Chevrolet 3/4 Ton Pickup (Serial No. 3E57L105455) 1961 Falcon 2 door Sedan (Serial No. 1R11U164686) 2. Power Tools 20' - 1-1/2" Suction Hose Schramm 105 Air Compressor - 1 Schramm BT 32 Tamper 133 S. M. Multwane Drill• 1 Thor #18 Clay Digger - 1 Gardner Denver Model Diggers - 1 Gorman Rupp Pump • 3. Office Furniture Company Sign ' Straight Back Chair Sofa Lounge Wicker Frame Drinking Fountain Stub Cutter _Counter with 2 Cash Drawers Floor Safe Desk 6 Drawers Desk 3 Drawers Adding Machine - Split Carriage Typewriter 15" Carriage f Sec. Posture Chair Sec. Posture Chair Wall. Heater - Gas Desk 6 Drawers File Cabinet 4 Drawers Arm Chair Swivel Chair Straight Back Chair Straight Back Chair Adding Machine - Hand Operated Desk 6 Drawers Arm Chair - Swivel Straight Back Chair - Swivel Straight Back Chair - Swivel 14" Royal Typewriter #52 Flewelling Oak Stand 4. Communication Equipment Mobile Radio Units #A-53315 Mobile Radio Units #67901 `1 Base Station 1 Table Model Radio I i i n i Exhibit B - Page 1 t Z f 5. Tool Shop and Garage Equipment Expendable Tools Welding Outfit 1 Weld Tip r. 1 Weld Tip 1 Wallace & Tierman Comparator 1 A7393 Aerol Hand Pump 1 Gauge Yodel 1 G 531 1 Rigid OOR 1%8 1 Acme Gas Mask 1 A7393 Aerol Street Hand Pump 1 #2 Vulvan Chain Vise 1 #o45 Columbian Bench Vise 1 CM 678 Acme Gas Mask 1 Gauge Model 1 G530 1 E-4 Machine Master Electronic hitch-leak Detector , 1 24 Hr. Recording Register I I Exhibit B - Page 2 MAIN EXTENSION REFUND AGREEMENTS Date Type Amount Refunds Balance Due of of of Made to as of Name Contract Contract Advance 12-31-62 12-31-62 State of California and City of Huntington Beach 12-15-48 35fa 30-year 11,058.86 6,500.82 $ 4,558.o4 Ralph E. Welch 5-5-54 35% 10-year 2,913.00 557.28 2,355.72 Atlas Builders 8-14-62 65% 10-year 4o8.00 1.87 406.13 William C. Bray 1-19-62 65% 10-year 539.81 - 539.81 - Ben Capocciama 6-26-59 65% 10-year 2,753.00 2,096.7o 656.40 Huntington Beach Union High School 12-27-57 65% 10-year 4,075.83 - 4,075.83 Lester R. Peterson 24-15-61 65% 10-year 292.49 - 292.49 Anaheim Realty, Inc. 6-2-59 22% 20-year 12,944.40 1,362.24 11,582.16 Chip & Norma Lee Chasin 1-25-61 22% 20-year 1,574.00 179.73 1,394.27 Evans Building Co. 10-2-59 22% 20-year 7,512.00 780.02 6,731.98 Fernhill Homes 12-11-61 22% 20-year 5,447.77 - 5,447.77 Fernhill Homes 5-7-62 22% 20-year 2,750.00 317.57 2,432.43 Harper Development Co. 7-1-60 22% 20-year 6,383.46 239.32 6,144.14 Southern California Edison Company 8-27-56 22% 20-year 61,500.00 17,825-34 43,674.66 Terril Investment Co. 10-17-60 .22% 20-year 4,337.00 144.86 4,192.14 Total $124,489.62 $30,005.65 $94,483.97 Exhibit C LEASED PROPERTY 1. Office Lease 220 Main Street, City of Huntington Beach, dated January 1, 1961 for five (5) years. Copy attached hereto. 2. Lease of Booster Station site Dated September 15, 1949 for period of fifteen (15) years. Copy of lease and description of property attached hereto. I j I J I i Exhibit D 1f 1 L 8 A S a� I 2 THIS LEASE,, made in duplicate this 1st day of January, 3 1961, by and between MC CALLEN REALTY SYNDICATE, a co-partnership 4 consisting of M. M. McCallent H. H. McVicar and Hazel L. Rood, as co-partners,, herein known and designated as Lessor, and 6 a SOUTHERN CALIFORNIA WATER COMPANY, a corporation organized and 8 existing under and by virtue of the laws of the State of Cali- 9 forniat herein known and designated as Lessees 10 WITNBSSETHs 11 . WHERgASO the Lessor owns that certain real property 12 hereinafter described, together with the building thereon, which 13 said property is located at 220 Main Street in the City of 14 15 Huntington Beach,, County of Orange, State of California; and 16 WHEREAS, said real property, above mentioned, is 11 described as follows: 18 All of Lot Twenty (20) in Block Two Hundred Three 19 (203) -of Huntington Beach, as per map recorded in Book 3, Page 36 of Miscellaneous Maps of Orange 20 County, California. EXCEPTING THEREFROM the South- westerly 6� inches thereof; 21 and 22 23 WHEREAS, Lessor desires to lease said premises and 24 ' improvements .to Lessee, and Lessee desires to lease said property 25 and inprovements from Lessor; 26 NOW, THERSFORR, in consideration of the premises, and 27 of the covenants and agreements .herein contained, - and the rental 28 herein agreed to be paid, and the faithful performance of all of 29 the covenants and conditions herein agreed to be performed,, Lessor 30 31- does hereby lease and demise, and the Lessee does hereby agree to 32 accept and take the above described real property and improvements -1- r f 1 for a term of five (5) years, commencing on the lot day of January, 2 1961, upon the terms,, conditions and agreements herein expressed; 3 (1) Lessee agrees to pay the rent herein reserved at 4 the times and in the manner herein provided, and to observe and 6 perform all of the terms and conditions herein contained, and the 6 Lessor covenants and agrees that during the term of this lease the 7 8 Lessee shall have peaceable possession of said demised premises. 9 (2) The term of this lease shall be five (5) years from 10 the lot day of January, 1961, and ,shall terminate on the lot day 11 of .January, 1966. 12 (3) The rent to be paid by said Lessee to the Lessor for 13 said demised premises is the sun of Nine Thousand ($9,000.00) Dolbrs 14 for said term, which said rental shall be paid in monthly install- 15 16 ments of One Hundred Fifty ($150.00) Dollars each, due and payable 17 on the lot day of each and every month hereafter, beginning January 18 1, 1961. Receipt is hereby acknowledged of the sum of One Hundred 19 Fifty ($150.00) Dollars, representing the first month's rent. 20 (4) Lessee covenants and agrees that the demised prem- 21 Lees shall be used for the purpose of carrying on the business of 22 water company, and for no other purpose except with the written 23 24 consent of the Lessors Lessee agrees that it shall not use or 25 suffer said premises to be used for any purpose that may tend to 26 injure said premises in any wise whatsoever, and Lessee shall not 27 use said premises in violation or contravention of any laws of the United States of America,. State of California, County of Orange or 29 the City of Huntington Beach or any other proper governmental 30 Authority; Lessee agrees to save and hold Lessor harmless from an 31 32 penalty or damage or claim of any kind by reason of the violation 2 - r I 1 of any of the terms or covenants of this lease, whether occasioned 2 by Lessee or any person or persons holding under or acting for and 3 with the consent of Lessee. 4 (5) Lessee has examined the aforementioned premises and 5 does hereby acknowledge that the same are in good order and condi- 6 7 tion, and Lessee agrees to maintain, throughout the term of this 8 lease, said premises in good order and condition. 9 (6) The Lessee will pay the said rent reserved to the 10 Lessor at Huntington Beach, California, or at such other place or 11 places as may be designated from time to time by the Lessor at the 12 times and in the manner provided as aforesaid for the payment 13 thereof; without deduction or delay; and in the event of the 14 15 failure of the Lessee so to do, or in the event of a breach of any 16 of the other covenants or agreements herein contained on the part 17 of the Lessee to be kept and performed, it shall be lawful for the 18 Lessor to re-enter into and upon the said premises, and every part 19 thereof, and to remove all persons and property therefrom, and to 20 repossess and enjoy the said premises. Any re-entry or re-possession 21 of said premises by the Lessor, or any notice served in connection 22 23 therewith, or for the money due the Lessor hereunder, shall not 24 operate to release the Lessee from any obligation under this lease, 25 except with the written consent of the Lessor. 26 If the Lessee shall be in default in the performance of 27 any condition, covenant or agreement herein contained, or shall 28_ abandon or vacate said premises, besides other remedies or rights 29 the Lessor may Have, it shall be, optional with the Lessor to re-let 30 31 the said premises, or any portion thereof, for such rent and upon 32 such terms as the Lessor may see fit, and if a sufficient sum shall 3 - 1 1- \ • v 1 not be thus realized after paying the expenses of such reletting 2, and collecting to satisfy the rents .hereby reserved, the Lessee 3 satisf to,agrees g y and pay any deficiency, and to pay the expenses 4 of such reletting and collecting* including any and all attorneys ' 5 tees and, real estate commissions. 8 7 Tine is of the essence hereof. 8 (7) Lessee will not assign this lease, or any interest 9 therein, and will not lease or underlet the said premises, or any 10 part thereof,, or any right or privilege appurtenant thereto, with 11 out the written consent of the Lessor first had and obtained, .and 12 a consent to one assignment or subletting shall not be construed as 13 a'consent to any subsequent assignment or subletting. And it is 14 15 hereby mutually covenanted and agreed that, unless such written 18 consent thereto has been so had and obtained, any assignment or 17 transfer, or attempted assignment or transfer, of this lease, or of 18 any interest therein, or underletting, either by voluntary or in- 19 voluntary act of the Lessee, or by operation of law, or otherwise, 20 shall at the option of the Lessor terminate this lease; and any 21 such purported assignment (by death excepted) , transfer, or under- 22 23 letting, without such consent, shall be null and void. The Lessor' 24 consent to any such assignment* or subletting, shall not relieve 25 the Lessee from any obligation under this lease, unless the Lessor 26 expressly agrees in writing to relieve the Lessee from such obliga- 27 tion. 28 (8) The Lessee will permit the Lessor and its agents to 29 enter into and upon said premises at all reasonable times for the 30 31 purpose of inspecting the same, or for the purpose of repossessing 32 said promises, or for the purpose of making repairs, alterations or additions to any portion of said building, without any rebate of 4 - 1 rent to the Lessee for any loss of occupancy or quiet enjoyment of 2 the promises thereby occasioned; and will permit the Lessor at any 3 tiws after thirty (30) days prior to the expiration of this lease 4 to place upon said premises any ordinary "To Let" or "To Lease" S sign. The Lessee will permit the Lessor, or its agents, upon any 6 default or violation under this lease by the Lessee to remove any 7 8 sign, or signs, on said premises, and substitute therefor any sign, 9 or signs, which the Lessor may deem advisable. 10 (9) The Lessee, as a material part of the consideration 11, under this lease, does hereby assuage all risk of injury, or damage 12 to rsons 'or their pe property, in or on the said premises from every, 13 source, and the Lessee will hold the Lessor harmless on account of 14 any such, damage or injury. 15 16 (10) The Lessee will pay for all water, heat, light and 17 power supplied to the said premises. r 18 (11) On the last day of the said term, or other sooner 19 termination of this lease, the Lessee will peaceably and quietly 20 loaves surrender, and yield up to the Lessor all and singular the 21 said premises, with the said appurtenances and fixtures, in good 22 order, condition, and repair, damage by irresistible superhuman 23 24 cause excepted. 25 (12) Ian case suit shall be brought for an unlawful de- 26 tainer of the said premises, for the recovery of any rent due under 27 the provisions of this lease, or because of the breach of any other 28_ covenant, promise, or condition therein contained, on the part of 29 the Lessee to be kept or performed, the Lessee will pay to the 30 31 Lessor a reasonable attorneys' fee, which shall be fixed by the 32 court as part of the costs of such suit. Upon the filing of any e 1 action for unlawful detainer, or any other action by the Lessor 2 against the Lessee , under the terms of this lease, the court may 3 appoint a. receiver without notice to the Lessee, to take possession 4 of the said premises, operate any business thereon conducted by the 5 Lessee, or terminate said business, remove the goods, chattels and e . fixtures of the Lessee therefrom, and conduct any other business 7 8 thereon, and collect any rent that may be or become due from any 9 sub-tenant, pay all operating and court expenses, and hold the 10 balance, if any, during the pendency of said action. 11 (13) The waiver by the Lessor of any breach of any term, 12 covenant or condition herein contained shall not be deemed to be a 13 waiver of any subsequent breach of the same or any other term, 14 15 covenantor condition herein contained. The acceptance of any pay- 16 went from Lessee by Lessor or of any performance of this lease by 17 the Lessee after such breach shall not be considered and deemed 18 to be a waiver of such breach unless such waiver is made in writing 19 by the Lessor. 20 (14) The covenants and conditions herein contained shall ' 21 subject to the provisions as to assignment, apply to and bind the 22 23 heirs, •executors,, and assigns of the parties hereto. 24 (15) Lessee shall not be entitled to any money vihatsoeve 25 by reason of any judgment had or award obtained for the destruction 26 or condemnation of the demised premises or leasehold estate and the 27 Lessee's. interest therein by eminent domain proceedings, except that 28 where the part of any award or judgment is made on account. of the 29 destruction or condemnation of any building or other structure con- 30 '31 structed on the premises herein demised, by the Lessee, Lessee shall 32 be entitled to that part of 'the judgment or award so made for the condemnation of or destruction of any such building or other struc- - 6 is . tune or part thereof as may have been erected by the Lessee at 1 Lessee•s cost and expense. 2 . (16) That in the event of fire or earthquake, or other 3 4 casualty, - which shall cause substantial damage to said demised 5 premises, the Lessor and/or the then owner thereof, shall not be 6 under obligation to restore and rebuild said premises, but may elect 7 to terminate this lease and in case such fire, earthquake or other 8 casualty shall render said premises uninhabitable or undesirable for 9 the purpose for uhich leased and used by Lessee, the said Lessee may, 10 at its option, terminate this lease, and upon such termination by 11 either party hereto, the Lessee shall not thereafter be liable for 12 13 any further rent hereunder, except for rent actually accrued prior 14 thereto. 15 (17) In the event of fire or earthquake or other casualty 16 which shall cause only partial damage or damage which, in the dis- 17 cretion of Lessor, Lessor is willing to repair, and such repairs 18 can be made within a period of not to exceed sixty days, then 19 Lessor may have the, right to demand that the lease continue in full 20 21 force and effect, but that the rent during such period of repairs 22 or reconstruction shall be abated or suspended. 23 (18) The remedies contained herein and granted to the 24 Lessor shall be deemed to be cumulative to any and all remedies now 25 or hereafter provided by law. 26 IN WITNESS W MRROF, the parties hereto have executed this 27 28 lease as of the date herein first written, in duplicate, the Lessee--- w 29 having caused this lease to be executed by its officers thereunto 30 duly authorized under its name and corporate seal. 31 SOUTHERN ZCrORNIA WATER COMPANY WTY 8YNDIC!►32 By BPros dent _ , Co-Partne By _..� LESSOR Secretary t This ndD OF LEAS$, dated this 15th day of September, 1949, between HUNTIN6TON BEACH COMPANT,, a California corporation (hereinafter called "Lessor") with an office and place of business at 1210 Nain Street, Huntington Beach, California, Lessor, and SOUTHERN CALIFORNIA WATER COMPANI, a California corporation (hereinafter called "Losses") with its principal executive offices located at 950 Bendix Building, 1206 South Naple 'Avenus, Los Angeles 15, California, That for and in consideration of the payment of the rents hereinafter pro- vided and of the performance of the covenants, conditions and agreements hereinafter contained' Lessor does herotq lease and demise unto Lessee and Lessee does hereby rent and hire from Lessor that certain unimproved parcel of land situated in the County of Orange, State of California, described as follows: That part of the parcel of land in said County of Orange, conveyed by deed recorded August 291, 1917, in Book 303, Page 229, of Deeds, records of said County, and designated therein as parcel No. 1, described as follows: Beginning at a point of compound curvature in said parcel, said point being comas to the curves ,of radius 613,156 feet and 305,543 feet, respectively, thence Easterly along the curve of radius 305.543 feet, 76.00 feet to the true point of beginning, thence N. 170 281 09" E. 70,00 feet, thence S. 720 311 51" E. 77.79 feet, thence S. 17o 281 09" W. 70.00 feet to a point in said curve of radius 305.543 feet, thence Westerly along said curve 78 feet more or less to said true point of beginning: TO HAYl AND TO HOID .said demised premises unto the Lessee, its successors and assigns, for the term and upon the conditions, covenants and agreements heroin- - after set forth. ;4r 1. Mn. The term of this lease shall be for a period beginning on the o date hereof and continuing for 15 years and thereafter from year to year until said IV term and this lease shall be terminated by written notice from either the Lessor or the' Lessee to the other thereof given at least one year prior to the date of such termination to be specified in such notice. � �`� 2. AM. As rent for said demised premises Lessee shall pay to Lessor +1� the sus of ten dollars ($10) per year. Such rent for each yearly rental period shall f be payable in advance on or before the first day of the yearly rental period with respect to; which such rent is so payable. g. L&SLOOLIMs Said demised premises shall be used exclusively as. a site for a booster plant in connection with the operation of a public utility water busbwss.- Lessee shall cause all laws# ordinances and other requirements of any governmental authority applicable to the use or condition of said demised premises to be fully met and complied with without cost to Lessor. Lessee accepts said demised premises in their present condition and Lessor shall be under no obligation to make any improvement thereof or otherwise to put said demised premises in condition suitable to or requited for any use to be made thereof by the Lessee. The Lessee, at its option, may at any time or from time to time during the term of this lease makes Install, alter or change the location of any buildings# structures, machinery# pump, plants or fixtures or other improvements or equipment of any kind or character upon said demised premises for use thereon in the operation of the public utility water business; provided, however* that such improvaenta do not interfere with existing facilities located on said demised premises, The cost of making# installing# altering or changing the location of any such buildings, structures# machtnerys pumps# plants, fixtures or other im- provements or equipment shall be borne by Lessee and Lessee shall hold Lessor harm- less from and against all liability based upon or arising out of any such cost. Lessee shall, promptly disehar`e or cause to be discharged any and all mechanical liens or similar charges whieh may arise or be alaimed can acsount of any sash costs. ZR' the event of termination of this lease, the Lessee shall promptly commence the removal of all buildings# structures, machinery# ptmpa, plants, fixtures, and other improvements or equipment installed by Lessee upon said demised praises and shall diligently continue the work of such removal until it is completed. The Lessee shall restore said demised premises to as near their original condition u is reasonably practicable and shall leave said demised premises in a neat, clean and orderly condition. If the Lessee fails to remove such facilities or any thereof(or fails to restore said demised premises)within sixty days after termination of this lease, then the Lessor may elect to take title to such facilities or any thereof • 2 w without payment by or cost to the Lessor, or may cause such facilities or any thereof to be removed and disposed of and said demised premises to be restored, all at the expense of the Lessee. The Lessee shall pay to the Lessor upon demand the entire expense of such removal, disposition and restoration and the lessor shall not# be or be held liable or in any way responsible for any expense, loss or damage to the Lessee resulting from such removal, disposition or restoration. 5s . So long as any of the aforesaid buildings, structures, machinery# pampa, plants' fixtures and other Improvements or equipment shall remain the .property of the Lessee, a31 taxes and assessments levied thereon shall be paid before delin- quency by the Lessee. Lessor shall pay before delinquency all taxes levied and assessed upon the above described land hereby leased to Lessee. 6. DICE CHARGES. Lessee shall pay for -all charges for telephone, electricity, water or other public utility services rendered at its request to the demised premises by any third party and shall hold the Lessor harmless from and against all such charges. 7. If Lessee shall fail to pay rent as herein provided whom the same become dine and payable or shall fail to observe or perform any.other covenant, condition, or obligation of this lease on its part to be observed or performed, then in any such event Lessor shall have the right to enter Into possession of the demised premises and to remove all persons and property therefrom and, at the option of lessor, to terminate this lease. The foregoing enumeration of rights and remedies of Lessor shall not be exclusive, but in addition thereto Lessor may exercise any and all other rights and remedies to which it is legally entitled by reason of any failure or default hereunder on the part of Lessee. All such rights and remedies of Lessor shall be cumulative and the exercise of one thereof by Lessor shall not impair its right to any other thereof. The waiver by Lessor of any breach of any term, condition, covenant or provision of this lease shall not be deemed to be or constitute a waiver of any other breach thereof. S. AWIGMMNT. The Lessee shall not sell or otherwise dispose of any building or other structure now or hereafter located upon the demised premises or sell or assign this lease, or any part thereof, or interest therein, or sublet or - 3 - t underlet the demised premises in whole or in part, or become associated with any other person, directly or indirectly, as partner or otherwise, in regard to Lesseels Interest in, to or- under this lease, or permit anyone to occupy said premises or any part thereof in place and stead of Lessee, or occupy the said premises or any part thereof as trustee of an express or implied trust for any person whomsoever, without the written consent of the Lessor; no written consent by the Lessor hereunder shall be dewed a wpiver by the Lessor of any of the provisions hereof, except to the extent at such consent, And any assignment of this lease or any interest therein or by operation of law, by any process or proceeding of any court, or by attachment, execution, prcosedings in insolvency or bankruptcy, whether voluntary .or involuntary, or receivership or reorganization or composition prooeedings, shall constitute a broach of the covenant against the assignment of Lessee's rights here- 9. The Lessen agrees to hold the Lessor and its present and future subsidiaries harmless from and to indemnify then against any and all damage to or loss of property, or injury to or death of persons, that directly or indirectly may be oausid by or arise or result from Leasee!s occupancy or use of said premises, or the enjoyment of any of the rights herein, or the broach by Lessee of any of Lessee's obligations hereunder, irrespective of any negligence of Lessor. The Lessee also agrees to hold the Lessor and its present and future subsidiaries harmless from and to indemnify them against any claim for damage to or loss of any buildings# structures, improvements or other property of the Lessee in, on, and about the said demised premises, or injury to or death of any person on said premises on behalf of or at the invitation.of the Lessee, whether such clam arise out of the negligence of tM 4erao:- ar its present or future subsidiaries, or otherwise• 10. In=. Any notion with respect. to any matter covered by this lease shell for all purposes be deemed to have been properly and sufficiently given if sent by mail addressed, in the case of a notice to Lessee, to it at its address heseinabove given, or, in the case of a notice to Lessor, to it at Box 110, Hvntington Beach, California. Either party may at any time give notice to the other party of a change in the address to which notices thereafter shall be sent to the party giving notice of such change, This lease is made subject and subordinate to all the terms, covenants, and conditions of that certain oil and gas lease between Huntington Beach Company, as Lessor, and Amalgamated Oil Company, as Lessee, dated October 12, 1920. IN '71MUM MMREOF, the parties hereto have executed this lease the day and year first above given. HUNT INGTO BEACH COMPANT By wsa• Pre ident . By, .41 ASSISTANT SeOret&27 ( A) SOUTHERN CALIFORNIA WATER CONPANZ President By secretary tom) - s - TIDE WATER ASSOCIATED OIL COMPANY, successor in interest of Amalgamated Oil Company, Imasee named in that certain oil and gas lease dated October 12, 1920, between Huntington Beach Company and said llmalgamated Oil CompwWq covering, among other lands, the lands described In the foregoing booster plant lease dated the 15th. day of September, 19491, does hereby consent to the making of said booster plant lease with the nederstanding that said booster plant lease shall be subject to the terms, oovenants and conditions of said oil and gas lease dated October 12, 1920, and further, subject to the proviso that all of the oovenanta# terms and conditions in said booster plant lease dated the 15th day of September, 1949, oontained, except the right of Huntington Beach Company to receive the rental as provided for in said booster plant lease, shall inure to the benefit of said Tide Rater Associated Oil Company►, as well as to the benefit of Huntington Beach Company. Southern California hater Company, the Leanne named In said booster plant lease dated the lsth day of September, 1949, herebr accepts said consent subject to the above condition and provisions and agrees to be bound by and perform the same. DATED this day of �r :cb , 19490 TIDE WATER ASSOCIATED OIL COMPAn SOUTHERN CALIFORNIA RATER COMPAIIY I E PREMIX By E N VV , -_ - 4 � •. r NON-OPERATING PROPERTY (EXCEPTION) DESCRIPTION: Lot Two (2) and the East one-half (E 1/2) of Lot four (4) of Tract No. 77, as shown on a map recorded in Book 10, Page 20 of Miscellan- eous Maps records of Orange County, California. Copy of Title Policy attached. Exhibit E 41) Decision No. 46485 BEFORE THE PUBLIC. UTILITIES C014IYIISSION OF THE STATE OF CALIFORNIA In the matter of the Application N of Sout'l-l-ern California 'Water Company Application No. 31696 for a-,,ifnority to increase water rates (Amended) in its Huntington Beach District. FIRST SUPPLEMENTAL ORDER The Commission having on November 20, 1951, issued its Decision No. 46449 in the above-entitled proceeding., wherein a schedule of rates was established for the water delivered in and in the vicinity of Huntington Beach., Orange County, and it appearing that the rate for the use of water in the 2,000 cubic-foot block was inadvertently shown as $0.21 per 100 cubic feet, whereas it should have been shown as $0.23' per 100 cubic feet, now., therefore, good cause appearing IT IS HEREBY ORDERED that bc'-C*Iedule No. 1 of Exhibit A attached to the order in Decision No. 46449, issued November 6, 1951, be and it is modified to read as in Exhibit B attached hereto. - A. 31696 r IT IS HEREBY FURTHER ORDERED that in all other respects said Decision No. 46449 shall remain in full force and effect. The effective date of this order shah be the same as- the effective date of said Decision No. 46j+49. Dated at San Francisco, California, this day of R. E. MITTELSTAEDT President JUSTUS F. CRAEMER HAROLD P. HULS KENNETH POTTER. PETER E. MITCHELL Commissioners -z- A-31696 (Amended) EXHIBIT B Schedule No. 1 IIETERED 11AUR S=IICE APPLICABILITY Applicable to all metered water service. TERRITORY In and about the incorporated City of Huntington Beach, Orange County,as delineated on the map included in the Tariff Schedules. RATES Per Meter Quantity Rates: Per Month First 500 cu.ft. or less... . . . ... . . . . . .. . . . 01.40 Next 2,000 cu.ft., per 100 cu.ft. . . . . . . . . . .. .143 Next 7,500 cu.ft., per 100 cu.ft.. . . . . . . . . .. .17 Next 40,000 cu.ft., per 100 cu.ft. . . . . . . .. . . . .14 Next 100,000 cu.ft., per 100 cu.ft. .. . . . . . . . .. .11 Over 150,000 cu.ft., per 100 cu.ft. . . . . . . . . . . . .09 Minimun Charge: For 5/8 x 3/4-inch meter. . . . . . . . . . . . . . . .. . . .. . $1.40 For 3/4-inch meter... .. . . . . . .. . .. . .. . . . . 1.90 For 1-inch meter. . . . . . . . . . . . . . . . . . . . . . 2.50 For 12-inch meter. . . . . . . . . . . . . . . . . . . . . . 4.00 For 2-inch meter. . . . . . . . . . . . . . . . . . . . . . 6.00 For 3-inch meter. .. . . . . . . . . . . . . . . . . . . . 12.00 For 4-inch meter. . . . . . . . . . . . . . . . . . . . . . 22.00 For 6-inch meter. .. . . . . . . . . . . . . . . . . . .. 35.00 The Minimum Charge will entitle the consumer to the quantity of water which that monthly minimum charge will purchase at the Quantity Rates, SPECIAL CONDITION All meter readings for municipal departments of the City of Huntington Beach will be combined for the purpose of computing monthly bills at the Quantity Rate, and for such municipal departments there will be a monthly minimum charge in the amount of the sum of the I,iinimum Charges for all meters serving the City of Huntington Beach. r Decision No. � BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA In the matter of the Application ) of the Southern California Water ) Company for authority to increase ) Application No. 31696 water rates in its Huntington } (Amended) Beach District. ) For Applicant : L. M. Wright of O'Melveny & Myers; Protestant: City of Huntington Beach by C. A. Bauer, City Attorney ; Commission Staff : Robert P. O'Brien, Supervising Engineer. O P I N I O N The Southern California dater Company, operating a number of water distribution systems at various places in California and relatively minor electric utility and ice businesses, filed the above-entitled application on August 22 , 1950 for authority to increase water rates in its Huntington Beach District by $42 ,140 based on its 1951 estimate. On September 24, 1951 it filed an amendment to its application seeking even higher rates equivalent to an increase of P55 ,630 in Huntington Beach based on the estimated year 1952 . Applicant ' s final proposed increased rates are set forth in Amended Exhibit A of this application. The operations in Huntington Beach account for approximately 3% of the total revenues of the company at present rate levels. A public hearing on this application was held before Examiner M. V. Edwards on October 1, 1951 at Huntington Beach , California. Facilities of applicant for serving water to customers in this district consist of production, transmission, storage, and distribution equipment. The water supply is obtained from -1- r A-31696 Amended) four company-owned wells located at the Goldenwest Plant and one well at the Clay Plant. Storage consists of a 1,100,000-gallon concrete structure located on the north side of the city at an elevation 85 feet above sea level and a 250,000-gallon redwood treatment tank at the Goldenwest pumping station. As of December 31 , 1950 the company used 207,797 lineal feet of pipe to distribute water to 1,979 customers located in the City of Huntington Beach and contiguous. unincorporated territory. As of this same date the company owned and maintained 218 fire hydrants connected directly to its lines in the Huntington Beach District. Company' s Position In general the company seeks to increase revenues by 78% in this district in order to bring the rate of return from an estimated 0.11% up to 6.05% for 1952. Applicant claims that this additional revenue is necessary for it to earn a -fair return of not less than 6% on its capital invested in facilities used, and useful, in rendering service to the public . The reason it requests such a large increase at this time is due to the dis- proportionate cost of new capital which has been required in this area since the close of World War II compared to prewar costs. At the same time its rates are still at the prewar level. Applicant ' s Exhibit No. 2 shows that since 1940 common items of material used in the system show price increases ranging up to as much as 163/. Furthermore, it claims that the pay per hour also has increased sharply in this period and for the past five years has increased at the average rate of 8.6&'�J per year. -2- t A-31696 (Amended) The rate of return as computed by the company has exhibited the following down trend: 1949 (Recorded) 3 .59 1950 (Recorded) 1.71 1951 (Normalized) 1.18 1952 (Estimated) 0.11 Evidence of Earnings Both the applicant and the Commission' s staff presented analyses of earnings under present rates for the years 1950 and 1951. The following table briefly presents the results as testified to by the parties : Huntington Beach District - Earnings on Present Rates :Company Exhibit No. 2 : Staff Exhibit No. 3 Year 1951 Year 1951 Item 1950 Estimate 1950 Estimate Revenues 65 ,519 70,140 654518 70,000 Expenses and Taxes 57,876 64 160 58,315 59,433 Net Revenue 7,b43 ,9 0 7p2O3 0,5 7 Rate Base (Depr. ) 446 ,112 505 ,490 444,900 498 200 Rate of Return 1.71% 1.18alo 1.62% 2.12% Applicant claims that the proposed rates in the original application would have yielded a rate of return of only 5 .29% in 1952 and that the higher rates proposed in the amended application will yield 6% after allowing for an increase in federal income tax rates from the early 1951 level of 47;o to the 52% level recently established. The staff did not prepare an estimate for 1952 but determined that for 1951 the amended rates proposed by applicant would have yielded a rate of return of 7.24% with a 52"' federal income tax. The company took no particular exception to the staffs analysis except to point out the declining trend in rate of return between 1951 and 1952 due to large capital additions in the latter part of 1951 that are not reflected on a full-year basis in the staffs 1951 weighted average rate base. -3- A-31696 '(.Amended) f Conclusion on Earnings It is evident that the applicant will be faced with the problem of earning a reasonable return on the full amount of these capital expenditures in 1952. These plant expenditures made under today' s inflated costs of labor and material , require increased revenues to provide a fair return. Furthermore , the tax and wage increases, imposed or permitted with .the approval of the federal government , must be considered in determining rate increases if the utility is to receive a fair rate of return. The City Council of Huntington Beach entered a protest against the water rate increases requested by the company. This protest has been carefully considered by the Commission. No other parties entered any objection to the proposed increase in water rates. Having given consideration to all estimates of revenues and expenses for the test year 1951, we find that for that year the company will realize net revenues of approximately $35 ,800, assuming applicant' s proposed rates in effect throughout the entire period at an effective federal income tax rate of 52%. When tested against a rate base of $495 ,000, which we hereby adopt, a rate of return of 7.24% results. In our opinion, after giving weight to the declinin- trend, the rate of return, based on the year 1951 should be 6.81% in order for applicant to earn at least 6.O;o for the future, which rate of return we find to be fair and reasonable. On the basis of this finding we conclude that additional gross revenues of $49,400 in the test year 1951 are required, and increased rates to produce such gross revenues will be authorized as set forth in Exhibit A herein. -4- A-31696 (Amended) f Authorized Rates In authorizing an increase in rates we are of the opinion that it is desirable to reduce the quantity of water included in the minimum charge in order to spread more equitably the increase among the various sizes of customers. The company' s rate blocking has been changed as well as proposed rate levels modified to meet the finding of this order. The company' s present, proposed, and the authorized basic rates follow:. A. Present Rates: First 800 cu.ft. or less . . . . . .p1.00 per month Next 2,800 cu.ft. @ .122 per 100 cu.ft. Over 3,600 cu.ft. @ . . . . . . . . . . . . .08 per 100 cu.ft. B. Company Pro Posed Rates: First - -bOO cu.ft. or less . . . . . .$1.60 per month Next 4,400 tuft. @ . . . . . . . . . . . . .23 per 100 cu.ft. Next 4,500 cu.ft. @ . . . . . . . . . . . . .17 per 100 cu.ft. Next 150,000 cu.ft. L . . . . . . . . . . . . .11 per 100 cu.ft. Over 200,000 cu.ft. @ . . . . . . . . . . . . .09 per 100 cu.ft. C. Authorized Rates: first 500 cu.ft. or less . . . . . .$1.40 per month Next 2,000 cu.ft. @ . . . . . . . . . . . . .23 per 100 cu.ft. Next 7,500 cu.ft. @ . . . . . . . . . . . . .17 per 100 cu.ft. Next 40,000 cu.ft. @ . . . . . . . . . . . . .14 per 100 cu.ft. Next 100,000 cu.ft. @ . . . . . . . . . . . . .11 per 100 cu.ft. Over 150,000 cu.ft. @ . . . . . . . . . . . . .09 per 100 cu.ft. After reviewing all of the evidence brought before us in the matter, it is our conclusion that an order should be issued increasing the rates in accordance with the findings herein. O R D E R 0 Southern California Water Company having applied to this Commission for authority to increase water rates in its Huntington Beach District, a public hearing having been held, the matter having been submitted and now being ready for decision, -5- Y A-31696 (Amended) IT IS HEREBY FOUND AS A FACT that the increases in rates and charges authorized herein are justified and that present rates, in so far as they differ from those herein prescribed for the future , are unjust and unreasonable ; therefore, IT IS HEREBY ORDERED that applicant is authorized to file after the effective date of this decision, in quadruplicate with this Commission, in conformity with General Order No. 96, the schedule of rates shown in Exhibit A attached hereto and after not less than five ( 5 ) days ' notice to the Commission and the public , to make said rates effective for service rendered on and after December 15, 1951. The effective date of this order shall be twenty (20) days after the date hereof. Dated at San Francisco , California , this �� day of 1951. R. E. MITTELSTAEDT President JUSTUS F. CRAEMER HAROLD P. IIULS KENNETH POTTER PETER E. M:ITCHELL Commissioner -6- . A�31696 {Amended) EXHIBIT A Schedule No. 1 LiETMED WATEIR SERVICE APPLICABILITY Applicable to all metered water service. TERRITORY In and about the incorporated City of Huntington Beach, Orange County,as delineated on the map included in the Tariff Schedules. RATES Per Meter Quantity Rates: Per Month First 500 cu.ft. or less.. . . . . . . .. . . . . . . . . . 01.40 Next 2,000 cu.ft., per 100 cu.ft. . . . . . . ..... ,21r Next 7,500 cu.ft., per 100 cu.ft.. . . . . . . . ... .17 Next 40,000 cu.ft., per 100 cu.ft. . . . . . . .. .. . .14 Next 100,000 cu.ft., per 100 cu.ft. . . . . . . . . . . . .11 Over. 150,000 cu.ft., per 100 cu.ft. . . . . . . .. . . . .09 Minimun Charge: For 5/8 x 3/4-inch meter. . . . . . . . . . . . . . . . . . . .. . 01.40 For 3/4-inch meter.. . . . . . . . . . . . . . . . .. . . . 1.90 For 1-inch meter. . .. . . . . . . . . . . . . . . . . . . 2.50 For 12-inch meter. . . . . . . . . . . . . . . . . . . ... 4.00 For 2-inch meter. . . . . . . . . . . .. . . . . . . . . . 6.00 For 3-inch meter.. . . . . . . . . . . . . . . . . . . . . 12.00 For 4-inch meter. . . . . . . . . . . . . . . . . . . . . . 22.00 For 6-inch meter.. . . . . . . . . . . . . . . . . . . . . 35.00 The Ni.nimurn Charge will entitle the consumer to the quantity of water which that monthly minimum charge will purchase at the Quantity Rates. SPECIAL CONDITION All meter readings for municipal departments of the City of Huntington Beach will be combined for the purpose of computing monthly bills at the Quantity Rate, and for such municipal departments there will be a monthly minimum charge in the amount of the sum of the 11inimum Charges for all meters serving the City of Huntington Beach. ,t 1 A :equipment (Office) 1 Typewrites - Roya1 1 Adding machine Undcraood electric 1 Addressograph 1 Desk chair •t F i ling cabine L 5 Rand index fees 1 Neptune meter test air Y 6 Chairs straight Bo Tools ' Mueller tapping machine :3 2 Ditch pumps c . ?drenches - dies 1 Golden pipe locator Co Supplies `±tl Ildscellaneous }0 feet Vl-copper pipe 360 feet 1tt—copper pipe 6 S i th--Blair clamps Dayton coupling (assorted) Assorted j1491 and Vs fittings Assorted ser-v-ice clamps 55 Iro, 3 Brooks meter boxes 57 Too 3 Brooks meter boy extensions 5 17% , 4 To, valva boxes complete 2. Pipe 34. - 0, X 30 x 3" Y.O.A. RoT, Tran-site 9 6VV x 39 x 3" MoO*Ao Simplex Tranzite 3 311 X 13' S�raplex l'ranss�e 13 3" x 13' R.T. Translte 23 W 411 x 131 R.T. Trancite � 611 X 6c611 Simplex Transite 5? R.T. Transite. 2 611 X 611 RoT. Trausite 30 l`1e11 Pa nps �._,ayae & Bowler telth, UGS. motor 20 holao' la-ytae & Bowler with U.-Se, Rotor 20 4. Storage Facilities 3 Wooden Tanks combined capacity 161,000 gallons. -- — - - - ' EXHI BIT C Page 2 SUNSET BEACH-SURFSIDE WATER COMPANY SCHEDULE OF UTILITY PLANT APRIL 30,1966 RESERVE NET FOR BOOK COST DEPRECIATION VALUE Land $ 1,087 $ 1 - $ 1,087 Wells 9 ,165 6,873 2,292 Pumping Equipment 6,117 3,624 2,493 Water Treatment Equipment 401 227 174 Reservoirs and Tanks 19,667 7,216 12,451 Water Mains 54,997 15,066 39,931 Services 41,638 4,578 37,060 Meters 18,837 3,865 14,972 Hydrants 334 167 167 Structures 5,142 2,719 2,423 Furniture & Equipment - Office 1,684 732 952 Other Equipment 1,358 554 804 Contribution in Aid of Construction (3,431) - (3,431) TOTAL - UTILITY PLAN $156,996 $ 45,621 $ 111,375 • i EXHIBIT C Page 3 as oa 0 c� OS � CJ CS C-1 01 •ri •11 CL� O o-) ✓ .sl .t7 rd 'r l r-} 6] fl rl . �CQ 0 'rl U ' •rl C'� � ;O� -,-AC}JI t1 O O v) f! o W. O i • . O Gt c' o'n7 Cni 4-1 i :a f 1 .rr cJ O G� U ?-t .ram U (7 " O u\ 0 tq ti [d -P O i n ••-1 �1 (a c. ;� 0) ti `�J G� CJ 1- f�1 c3 t::) N :) >•n in - . C) C) G-1 :i ,.i r ;3 C) In O i G1 CS C) O . 4�t CT O :i 00 G! U cJ U -1 U Ol G' 1-0 6) O -i } TJ] G) U =a (fit ti� C) Q) •'J 11 of f.1 6] t ;: it, a U cJ rl < 0c) rJ 0) Fl O O n = O U O.O C d r} }-1 cJ O O o 0 { c5 c3 (1) U t-t r-1 nt Zt i i C�.g 7 • rl C) ON Z: Q 7 C) 0)O C) G) O c3 r3 CJ i 0 i;1 4i ;: i) U i-1 O H (1 S aS i) =:i C) i0 0� ♦ f O crl V f 1 N O C) O a v c-t c) c) (1) H T:] cJ 1 W N r•S s fil ON SJ t--I C+i C'\ c. !t la sir C) s ,:r cJ J t0 a} c.1 tSl:.7 In 1 O S to r.-I "-" •pt J-1 O {i U :J TJ� (I Ci3 ;=-i •r-1 ;L? r�r--r U al O ci. CJ i i vl ;� itl 6] CS `-1 ;J 'rl 0. .. O t C) O O r-1 0 C9 c• n a3 <i 1 ,>S en r :, O ° z3 r-t tN ri U ) u3 C7 r. '`) v-1 C4 C) OJ <ri •r•1 <s-t CS C) ,`S C]O G) ;-i °•1 `.;rJ J U] `-1 O O O f-i Ca O (?1 i) t; 1"} O 6j i) i- •aS �J O •C'j rl �) 51.to C) CJ 6) t-t C) GJ •ri 2y W rl -;) c} r-I C) t7 . Gti 2;) t i ci cS i.1 (.) l C7 'vJ � i'i C) •rl n -1 �t c' .ri ✓� •i) _' :r! cj ,> s'' ci c) 0 r;o ' cj --i ;� ;t o • i U� C:•1 ,`• 1-1 Cl.1 G'_;-� .;.� .�-7 O i;-1 '�� f•1 `='i Cat :�a SUNSET BEACH-SURFSIDE WATER COMPANY BALANCE SHEET APRIL 30, 1966 Utility Plant - Net (Sch,,- l) $ 111,375 CURRENT ASSETS ,t Cash in Bank & on Hand 2,048 Prepaid Expenses 5,563 TOTAL CURRENT ASSETS $ 7,611 TOTAL ASSETS $ 118,986 STOCKHOLDERS ' EQUITY Common Stock, par value 50 cents; 400,000 shares authorized 147,435 issued and outstanding $ 73,718 Paid-In-Capital 12,147 Retained Earnings (Deficit). (14,958) TOTAL STOCKHOLDER' EQUITY $ 70,907 Advance from Parent -.15,452- Long-Term Debt - Union Bank (Note 1) 22,500 o CURRENT LIABILITIES Notes Payable (Due within one Year) .(Note 1) 92500 Accrued Liabilities 459 Refundable Deposits 168 TOTAL CURRENT LIABILITIES $ 1091127 TOTAL EQUITY AND LIABILITIES $ 118,986 EXHIBIT E SUNSET BEACH-SURFSIDE WATER COMPANY STATEMENT OF INCOME AND DEFICIT FOR THE FOUR MONTHS ENDED APRIL 30,1966 OPERATING REVENUES Water Sales $ 10,858 Non-Utility Income 379 TOTAL REVENUE $ 115,237 OPERATING EXPENSES Depreciation 1,722 Taxes 809 Operation & Maint , - Employee Labor 451 Materials 344 Rover Expenses 250 Management Salary 250800 Office Supplies & Expenses 347 Insurance Expenses 66 General 452 Transportation 514 Accounting Legal & Other Services 201 TOTAL OPERATING EXPENSES $ 7,956 NET OPERATING PROFIT $ 3,281 Interest Expense 660 NET PROFIT FOR 4 MONTHS PERIOD $ 2,621 RETAINED EARNINGS (DEFICIT) BEGINNING OF YEAR (17,579) RETAINED_ EARNINGS (DEFICIT) AT 4/30i66 $ (14,958) SUNSET BEACH-SURFSIDE WATER COMPANY SCHEDULE OF UTILITY PLANT APRIL 30,1966 SCHEDULE 1 RESERVE NET FOR BOOK COST DEPRECIATION VALUE Land $ 1,087 $ - $ 1,087 Wells 9,165 6,873 2,292 Pumping Equipment 63,117 3,624 22493 Water Treatment Equipment 401 227 174 Reservoirs and Tanks 19 ,667 7,216 12,451 Water Mains 542997 15,066 39,931 Services 41,638 4,578 37,060 Meters 18,837 3,865 14,972 Hydrants 334 167 167 Structures 5,142 2,719 2,423 Furniture & Equipment - Office 111684 732 952 Other Equipment 1,358 '554 804 Contribution.in Aid of Construction (3,431) - (3,431) TOTAL - UTILITY PLANT $156,996 $ 45i621 $ 111,375 o SUNSET BEACH-SURFSIDE WATER COMPANY NOTES TO FINANCIAL STATEMENTS NOTE.1: Due Union Bank, Wilshire at Western Avenue Los Angeles, California $ 32,000 Less: Amount due within 1 year . 9,500 LONG TERM DEBT $ 22,500 The Note was obtained in February 1964 in the amount of $45,000 at 6% interest to replace 3047 feet of 4 inch and 3 inch wooden pipe with 6 inch transite pipe. The terms provide for quarterly payments of $1,500 each quarter for the first year, $2,000 each. quarter for the second year, $2,500 each quarter for the third and fourth years .and $2,750 each quay-� ter for the fifth year. CORPOIRAT m ON GRANT DEED FOR A VALMA-BLE CONSIDEi�AT1'ON, receipt of which is hereby acknowledged, SUNSET BEACH-SURFSIDE WATER COMPANY, a corporation organized under the laws of the State of California hereby sells, transfers and assigns to the City of Huntington Beach the following described real property in the City of Huntington Beach, County of Orange, State of California All of that real property described in Exhibit A hereto. This Corporation Grant Deed is made, executed and delivered pursuant to Decision No. of the California P ubl=i c Utilities Commission dated rN V TNESS kI!gEREOF, Sunset Beach-Surfside Water Coamipany has .caused its corporate name and seal ,to be affixed L Preto and this instrument to be executed by its Pres9 derit and Secretary thereunto duly authorized. Dated: 1966. SUNSET BEACH-SURFSIDE WATER, COMPANY By .�.i 'resident By Secretary ['Nlotarial acknowledgment of Sunset Beach-Surfside Water Company and acceptance of City of Huntington Beach to be added] . "' Hj_, ,T 1:1 i�L 1 BTLL OF SALE FOR A VALUABLE CONSIDERATION, SUNSET BEACH-SURFSIDE 1AATE'R COMPANY, a California corporation (hereinafter called the "Assignor") does hereby sell, assign, convey, transfer and set-over unto the CITY OF HUNTINGTON BEACH, a body politic and corporate, all personal property owned by Assignor con- sti�e=.uti ng a part of its Sunset Beach-Surfside water distribution system, including without limitation all that property described inExhibit A hereto and hereby made a part hereof. E_XCEPTTNG, EXCLUDING AND RETAINING the following: 1. All cash on hand; 20 All accounts receivable; and 3. Debts owing Assignor for water service supplied on or before the date hereof which have not yet been billed to sub- scribers. T2i s_ Bill of Sale is made, executed and delivered our- sua__L to Decision No. of the California Public Utilities Cos_a_ssio-.a dated , 1966. _: if:IT T NESS W-HEIUOF, Assignor has executed this Bill of Sale as cf this day of May, 1966. SUNSET BEACH-SURFSIDE WATER COMPAN�.L By Owens A. Durnahoo Vice President EXHi.BIT G PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA State Building,Civic Center SAN FRANCISCO, CALIFORNIA 94102 We acknowledge receipt of the following: Date 5/25/66 X--- Application_.-_trn—ssf-_wtr__ ys-_&_prOpS _t0 ---1 Original File No. A 48505 Complaint____-___City_.of__Huntington_BCh _ 12 Copies Filed by_-__Slmset---Bch-Surf side-Wtr_---Co-,__-et al ------ Petition ------ Enclosed -- --------------------------------------------------------------- -- Brief---------------------------- -----------------------------— ------ Filing Fee $-------------------------------- Receipt No. ------------------------------- Enclosed - Stu .r�esi-_in vQ''r---chick- lo-0.-_92-04,---for---&54.---- ioate- s------ -----not---being- ransferred®-=-------------------------------------- ------------------------------------------------------------------------------------------------- cca Owens---A. Dunnah_oo --------------------------------------------------- tcc-o-----Honorable Jake R. Stewart---------------------------------------------------------------------- F—Pfir. Rodney C. Hill 7 Nossaman, eaters, Scott, Krueger & '.,:Ziordan Attorneys at Law 611 Wilshire Boulevard - Suite 1000 Los Angeles, California 90017 57279-765 10-65 1M QUAD Q OSP WILLIAM W. DUNLOP, Secretary t` BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA In the Matter of the Application of ) SUNSET BEACH-SURFSIDE WATER .COMPANY ) APPLICATION and 3 NO. THE CITY OF HUNTINGTON BEACH ) For an Order authorizing Sunset Beach-Surfside Water Company -(a) to sell and transfer certain properties and (b) . to discontinue water service. A P P L I C A T I O N The joint application of Sunset Beach-Surfside Water Company (hereinafter referred to .as "Sunset`) , a. California corporation, having its principal offices at 16542 Chatham Place, Huntington Beach, California, and the City of Huntington Beach (hereinafter 'referred to as the "City"), a body corporate and politic, a city of the State of California, having its prin- cip-ali. offices at Civic Center, Huntington Beach, California, respectfully shows that: 1. Communications in regard to this application are to be addressed as follows : (a) To Sunset: Owens A. Dunnahoo, Vice President Sunset Beach-Surfside Water Company 16542 Chatham Place Huntington Beach, California; (b) To the City: Honorable Jake R. Stewart Mayor, and the Honorable 'C-ity :Cguncil;_of.....the:`_Gity, 'of'-.Huntington Beach Huntington Beach Water Department Civic Center Huntington Beach, California 2. This application is made under and pursuant to Sections 851 and 10002 of the California Public Utilitie"S"' Code, and 20 California Administrative Code, Article 8. 3. Sunset states: Sunset' s legal name is Sunset Beach-Surfside Water Company. Sunset' s principal place of business is 16542 Chatham Place, Huntington Beach, County of Orange, State of California. Sunset is a corporation organized and existing under and by virtue of the laws of the State of California. 4. The City states : The City is a body politic and corporate, a city of the State of California, and its legal name is the City of Huntington Beach. • The City' s principal place of business is City Hall, Civic Center, Huntington Beach, County of Orange, State of California. 5 . Sunset states : A certified copy of the Articles of Incorporation of Sunset was filed, with this Commission on March 30, 1964, as Exhibit C to the Application of Sunset For an Order Authorizing It to Issue a �45,000 Note, Proceeding Number 46331 of this Commission; said Articles of Incorporation have not .been amended since that filing. 2. 6. Sunset states : Sunset, as authorized by Decision No. 62508 of this Commission issued on September 5, 1961, succeeded to the public utility water system then owned by Sunset Land and Water Company and other rights as set forth in said Decision. Since the acquisition of the aforesaid system and rights Sunset has continuously furnished water for domestic purposes to con- sumers in the Sunset Beach and Surfside areas of Orange County, California, which areas constitute Sunset' s field of operations and whereat Sunset serves approximately 600 subscribers. The character of business performed by Sunset is the furnishing of water for domestic purposes to consumers in its territory as aforesaid. A plat showing the territory -served by Sunset is attached hereto, marked Exhibit A and is hereby made a part hereof. 7. The City and Sunset have entered into an agree- ment, a copy of which is attached hereto as Exhibit B and hereby made -a part hereof, to which reference is hereby made for the specific terms of the transaction for which authority to execute and perform is herein requested. Said Agreement provides that Sunset shall sell and transfer to the City cer- tain assets which generally constitute and comprise the water system owned and operated by Sunset; such properties are specifically described in Exhibit C hereto which is hereby made a part hereof. Sunset will retain, however, the real property described in Exhibit D hereto which is hereby made a part hereof, various accounts receivable as set forth in said Agreement and cash. Said real property is being retained by Sunset because, after the consummation of the transfer to the 3. t City, such real property will not be needed for utility pur- poses. The purchase price proposed to be paid by the City for such properties is $147,387. The City in said Agreement agrees to assume and perform all public service obligations, including the refund of consumer deposits, of Sunset with respect to the transferred properties on and after the date of transfer. 8. Sunset states : The S.chedule of Assets and Property attached hereto as Exhibit C contains a statement of the book cost and the original cost, to the extent known, of the property therein , described. 9. The City states : The City has acquired and now owns and operates a public utility as defined in Section 10001 of said Code as a department of said City known as the Water Department of the City of Huntington Beach. The character of business performed by said Water Department is contained in Application No. 45872 in the matter entitled "In the matter of the Application of SOUTHERN CALIFORNIA WATER COMPANY and CITY OF' HUNTINGTON BEACH for an order authorizing the sale of certain properties of Southern California Water Company" in the files of this Commission to which reference is hereby made. 10. Sunset states : There are no main extension contracts with respect to the properties proposed to be transferred to the City on which there are refundable balances. 4. 11. The City states: It desires and intends to operate the water service system of Sunset with existing Water Department per- sonnel. The City represents that it will not unlawfully discriminate against the subscribers of Sunset in furnishing service to them. The City further represents that it does not . intend to increase the rates at which water service presently is supplied to subscribers of Sunset. 12.- The. reasons upon the part of each Applicant for entering into the transaction for which authority is herein requested, and the facts warranting the same are as follows: Sunset' s water system is in close proximity to that presently owned and operated by the City of Huntington Beach and may be efficiently operated and served by existing personnel of. the City of Huntington Beach. Such method of operation- will be more efficient and economical than the present operation, especially in view of the fact that Sunset is faced with the immediate retirement of its. chief operating officer, Robert Niblick; there is no person in the employ of Sunset capable of assuming and performing Mr. Niblick s duties. Moreover, Sunset., as appears from the attached financial statement,, does not possess the working capital or means of financing that is possessed by and available to the City. By reason of the ex- pansion of the territorial bounds of the City through various annexations, some subscribers of Sunset are now located within the City limits and the City deems it appropriate to furnish water service to such subscribers. Both Sunset and the City believe that by the City's acquisition of Sunsets properties the duplication of service facilities which will occur as the 5. Y Sun*set Beach-Huntington Beach areas increase in population will be obviated . Sunset and the City believe that the acquisition of Sunset's water service system by the City is in the best interests of the public and Sunset' s subscribers . 13 . . Appended hereto marked Exh ib its E through Q. inclusive, and all by this reference made a part hereof are the following: . Exhibit .E - Sunset' s latest available Balance Sheet and Income and Profit and Loss Statements ; Exhibit F - -A copy of the Deed of real property proposed to be executed by Sunset in favor of the City in substantially the same form as will be employed ; Exhibit G A copy of the Bill of Sale proposed to be executed by Sunset in favor of the City in substantially the same form as will be employed . 14. Applicants believe that a public hearing is not neces- sary to afford this Commission a full and adequate basis for a deci- sion with respect to the authorization herein sought, and it is therefore respectfully requested that the Commission act herein ex parte and afford this application expedition . WHEREFORE, Applicants respectfully request an order: 1 . Authorizing Sunset to sell and transfer the public utility properties described herein to the City and the City to acquire the same upon the terms and conditions herein set forth; 2 . Relieving Sunset upon its conveyance of such public utility properties to the City of all of Sunset' s responsibilities as a public utility, other than the refund of customer ' s deposits fo-r service as set forth in the Agreement attached hereto as Exhibit B; 3 . Providing that the order of the Commission is 6. effective on the date thereof; 4. Granting such additional or different authoriza- tion as this Commission may deem to be necessary or appropriate. Dated this day of May, 1966. SUNSET BEACH-SURFSIDE WATER COMPANY ' By Owens A. Dunnahoo y` Vice President "Sunset" THE CITY OF HUNTINGTON BEACH By Jake R. Stewart, Mayor of (he City of Huntington Beach NOSSAMAN, WATERS, SCOTT, KRUEGER & RIORDAN By Rodney C. Hill Rodney C. Hill 611 Wilshire Boulevard Los Angeles, California Attorneys for Applicant Sunset Beach-Surfside Water Company r K. DALE BUSH, City Attorney of the City of Huntington Beach IL Olive 'AVenue Huntington Beach, California Attorneys for Applicant The City of Huntington Beach STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) JAKE R. STEWART, being by me first duly sworn, deposes and says : , That he is the Mayor of THE CITY OF HUNTINGTON BEACH, a body politic and corporate, one of the Applicants in the above entitled proceeding; that he has read the foregoing Application and knows the contents. thereof; and that the same is true of his own knowledge, except as to the matters which are therein stated upon his information or belief, and as to those matters he believes it to be true. C1 j ��� ^�✓ 5---j—ake R. Stewart Subscribed and sworn to before me this day of May, 1966. Notary Public in and for said �,% OFFICIAL SEAL County and State - ERNESYINA ®Q ram® NOTARY PUBLIC CALIFORNIA ' ' PRINCIPAL OFFICE N k My Commission Expires : , .,��r ORANGE COUNTY ' MY Commissign Expi�e,� June 25, 1969 t STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) OWENS A. DUNNAH00, being by me first duly sworn, deposes and says : That he is the Vice President of SUNSET BEACH-SURFSIDE WATER COMPANY, a corporation, an Applicant in the above entitled proceeding: that he has read the foregoing Application and knows the contents thereof; and that the same is true of his own knowledge, except as to the matters which are therein stated upon his information or belief, and as to those matters he believes it to be true. Owens A. Dunnahoo Subscribed and sworn to before me this 3 day of May, 1966. NI .11II.NI1111 I.IN.NIr................... ............r1III/IN/ OFFICIAL SEAL .LOAN MI 'BROWN ��./ _ : ,bow NOTARY PUBLIC-CALIFORNIA �/ 4 .cX jh+ PRINCIPAL OFFICE IN ORANGE COUNTY . IN.NIM N.N.IIIN N.ININN......................l.................IIN.IIII.YII Notary Public in and for said County and State My Commission Expires: JOAN M. BROWN k CiCii$YM4131on ExWaA .tuna 24, 2968 Revised Cal. _ .U.C. Sheet No. 64—W Canceling original Cal. P.U.C. Sheet No. 7-�� Me SHMINQ CCUFANY IS SERVICE ,AREAS and . •,, ,, LMC AT ION CF WELLS j r t .V. f t �s`,, o �, r, , •e e �r, ? r— i. ..... r Y r t( , j fl \ r '.r �4f - t 1 t,•1C, , 't� f. t Wei itminsUr +• 6 t ! 1 � i r y t •r • • '1 a r ' i r .}Saal Be a > ,• � �',/•..it��• Anaheim !t SURFSIUE Huntington Beach t Win ereburg i SUNSET BEACH > x , t We118 )• 4 � S j. , t _t;i f4 t . : , 1 1 � , � � q l ,n,1,F ``'f "•- ",+, ,4};. I ' l,1+ ' 1't4 , •t li t ,}•)i, ° 'Y. Y•rt �. `. I- , 9 T j, 1" •`t t t Y�, y 4 4 v ,; , ' �,t":'.`•r' 0 ' 7� i` La B laa V •, r 'i i,.� to j(' . 4,"r r ,a ,j1 , � `�-.S�'j+'�'L 1<• I • - :, ?, �r .,fie t t •, 4� Huntington Beach . (To be inserted by utility) _ "y. '✓ •. w •• (To be Inserted by C.I.P.U.C.) Issued by • `'� Advice Letter No._1.0 Sunset Beach-Surfside WaterDR-Re• Filed 6-22-65 ' Decision No. 69031 Name 5 . �,� ��. �� Effective 6-26-6 t... . Tit(. Resolution No. ' Vice-President EXHIBIT'"A. AGREEMENT OF PURCHASE AND SALE OF SUNSET BEACH-SURFSIDE WATER COMPANY THIS AGREEMENT, made and entered into this day of o 1966, by and between the CITY OF HUNTINGTON BEACH, a municipal corporation and political subdivision of the State of California (hereinafter referred to as the "City") and SUNSET BEACH-SURFSIDE WATER COMPANY, a California corporation (hereinafter referred to as the "Company"). W I T N E S S E T H: WHEREAS, the City desires to acquire and operate a water system to serve the Sunset Beach-Surfside and its inhabitants and to that end wishes to purchase the properties and facilities of the Company in Orange County; and NOW, THEREFORE, for and in consideration of the mutual agreements herein contained, it is hereby agreed between the City and the Company as follows: 1. Upon and subject to the terms and conditions hereinafter set forth, the Company agrees to sell and the City agrees to purchase all of the water production and distribution properties and facilities and all properties, franchises, water rights, operative rights and assets of every kind (except accounts receivable and cash and the real property hereinafter specifically . excluded) comprising the water system of the Company, located partially within the territorial limits of the City of Huntington Beach, County of Orange, State of California, owned and operated by the Company as its so-called Sunset Beach- Surfside Water Company, including, without limiting the generality of the foregoing, all operating and customer account records, maps and drawings, equipment, supplies and materials, specifically described in Exhibit A attached hereto and hereby made a part hereof, all lands, easements and rights of way, and all physical properties and appurtenances thereto comprising said Sunset Beach-Surfside Water Company System and including, without limiting the generality of the foregoing, the real property specifically described in Exhibit B, which is attached hereto and hereby made a part hereof, but exclud- ing the real property described in Exhibit C, which is attached hereto and made a part hereof, 2. The base purchase price shall be the sum of One Hundred Forty-Seven Thousand Three Hundred Eighty-Seven Dollars ($147,387) representing the agreed valuation of said Sunset Beach-Surfside Water Company System as of June 30, 1966. The purchase price shall be paid by the City to the Company in cash upon the Closing Date on delivery to the City of. a conveyance of the purchased properties, EXHIBIT B . Y . Real and personal property tares, charges for power, payments for water service by flat rate customers and unbilled charges for metered water service shall be adjusted as hereinafter provided in pa, agraphs 3, 6 and 7 the' reofo j. The purchased properties shall be conveyed to the City upon the Closing Date free and clear of all liens, encumbrances and liabilities, ex- cepting only (a) the lien of property taxes for the then current fiscal year; (b) the obligations of the Company under all main extension agreements relating to the system to which the Company is a party; and- (c) such other liens and encumbrances as, in the reasonable opinion of the City Attorney, shall not impair the usefulness or value of the purchased properties in utility operations. The Company shall deliver to the City on the Closing Date all deeds, bills of sale, assignments and other documents required to effectuate transfer of title to the City. The Company at its expense shall procure and affix to the appro- priate instrument of conveyance anY stamps representing stamp taxes imposed upon the transfer. The Company shall cause to be issued to the City, at the Company's expense, a policy of title insurance in the standard CLTA land owners policy form by a title insurance company satisfactory to the City insuring title in the City to each parcel of real estate, other than easements described in Exhibit B, free and clear of all liens, encumbrances and liabilities except said above mentioned liens, encumbrances and liabilities, such policy to be in the face amount of One Hundred Thousand Dollars ($100,000)o The Company shall also furnish the City with a report of a title insurance company as to any chattel mortgages or other liens of record against the purchased properties. Real and personal property taxes relating to the purchased properties. shall be prorated as.of the Closing Date. If the City Attorney is of the reasonable opinion that the purchased properties are subject to liens and incumbrances which impair the value or usefulness thereof in utility operations, 'he shall so notify the Company in writing,within ten (10) days after being furnished with a preliminary report of title specifying with particularity such liens and incumbrances and the. Company shall thereafter have the following options: (a) To terminate this agreement without liability; (b) To remove the liens or incumbrances specified in said notice within a reasonable time; (c) To agree to an equitable adjustment of the purchase price. The Company shall notify the City in writing of its election as aforesaid within twenty (20) days after receipt of such notice of the City Attorneyo In the event the City Attorney fails to give said notice to the Company within said ten (10) day period, title to the purchased properties shall be deemed acceptable to the City. • 4. It is believed by the parties that this transaction is not subject i to California sales or use tax, but if any such tax is claimed or imposed by the State of California, the City agrees to assume all responsibility and expense in defending any such claim and to pay any tax found to be due, 5. The Company shall pay over to the City upon the Closing Date the amount of any refundable deposits, including accrued interest if any, made by consumers to b-uarantee payment of bills, The City hereby agrees to assume all obligations of the Company to consumers in respect of said deposits. 6. Charges for power purchased from Sou.hern California Edison for use in connection with the Sunset Beach-Surfside.Water Company System shall be prorated as of the Closing Date, If appropriate arrangements can be made, such proration shall be made on the basis of meter readings taken 6A the Closing Date jointly by the City and the Company and, otherwise, in such equitable manner as may be agreed upon by the parties, ?. It is understood that all accounts receivable and unbilled revenues for hater supplied to and including the Closing Date are excluded from the properties to be conveyed to the City, The City agrees that, without charge to the Company, it shall attempt to collect for the account of the Company all bills for water service transmitted by the Company prior to the Closing Date and to use such methods as are legally available to the City to enforce collection of such bills, other than the institution of litigation, provided the City shall not be responsible to the Company for the non-payment of such bills, or the amount thereof, if such collection attempts are unsuccessful, The City shall be entitled to receive all amounts paid by flat rate customers which are allocable to water service furnished after the Closing Date, The Company shall pay to the City within fifteen (15) days after the Closing Date and from time to time thereafter as received such portion of any amounts collected by the Company from flat rate customers billed by the Company prior to the Closing Date as is allocable to water service furnished after the Closing Date. As and when the City collects any bills from flat rate customers, the City shall be entitled to retain such portion as is allocable to service furnished after the Closing Date and shall pay over the balance to the Company. All unbilled revenues for water service to metered customers shall be prorated as of. the Closing Date upon the basis of such portion of a thirty (30) day month as shall have elapsed between the last meter reading date for which a bill has been transmitted and the Closing Date. Remittances shall be made to the Company by the City as collections are made. 8. All risk of loss or injury or destruction to any and all of the properties covered by this agreement shall be upon the Company at all times until the Closing Date and in the event of any such loss, injury or destruction, . the purchase price shall be appropriately adjusted, but the Company shall be entitled to retain any insurance proceeds or claims against any insurance carrier relating to any such loss, injury or destruction. -3- , 9. At all times prior to the Closing Date, the Company shall continue such usual upkeep, maintenance and repair of the properties covered by this agreement as it would if it were to continue in ownership and operation of the same and any and all expense incurred by the Company in so doing, together with any and all operational expenses incurred in connection with said properties prior to the Closing Date, shall be borne by the Company. 10. Between the date of this agreement and the Closing Date, the Company shall submit to the City for approval any expenditures in excess of Five Hundred Dollars (S500) before incurring the same or incurring obligations therefor, for any proposed addition, betterment or extension to said Huntington Beach Water System but no such approval shall be required for expenditures for ordinary repairs and maintenance or expenditures that may be required to comply with the Company's regularly filed utility rules and regulatbns or any expenditures of Five Hundred Dollars 0500) or less for any addition, better- ment or extension. . 11. If between the date of this agreement and the Closing Date, the City shall make any street improvement or construct any public projects which require the Company to reconstruct or relocate any part of its water system, the City shall reimburse the Company for the entire cost of such reconstruction or relocation by adding such cost to the purchase price, 12. The City agrees upon the Closing Date to undertake the distribution of water to all consumers then served by the Company's Sunset Beach-Surfside [dater Company System and the City shall assume as of that date any and all public service obligations, to which the Company is then subject with respect to the purchased properties, subject, however, to the right of the City to fix rates and determine conditions of service as a municipal corporation i engaged in the public supply of water. 13. This agreement is hereby expressly made subject to the condition that the sale and transfer of the properties comprising the said Sunset Beach- Surfside Water Company System, upon the terms and.condit;ions herein provided, shall be approved and authorized by the Public Utilities Commission of the State of California and this agreement shall not ,become effective until such approval and authorization shall have been obtained. If said approval and authorization has not been obtained on or before September 1, 1966 either party may terminate this agreement. The City agrees to join in any reasonable application to the Public Utilities Commission for said approval and authorization. 14. The Closing Date shall be such date as may be agreed upon in writing between the City and the Company at any time subsequent to the date upon which appropriate authorization of the Public Utilities Commission is obtained. 15. The Company agrees that while this agreement is in effect, the Company will not initiate any proceedings to change the rates applicable in the Huntington Beach District dater System and will not sell or otherwise dis- pose of any of the properties which it has hereby contracted to sell to the City.. -4- 16. All notices, demands or other writings in this agreement provided to be given or made or sent or which may be given or made or sent by the parties hereto shall be deemed to have been fully given or made or sent when made in writing and deposited in the Mai.ted States mail addressed aE follow2: To Company: 16542 Chatham Place Huntington Beach, California To City: City Council City of Huntington Beach !' City Hall Huntington Beach, .California The address to w1iich any notice, demand or other writing may be given or made or sent to any party may be changed upon written notice given by such party as above provided. IN WITNESS WHEREOF, the parties hereto have caused this agreem3nt to be executed.by .persons theueunto duly authorized, the day and year first above written. CITY OF HliNTINGTON BEACH By- Mayor ATTEST: City Cl erk of the Citf Huntington Beach By y „�{. ��� LY , SUNSET.BEACH-SURFSIDE WATER COafiPANY . Dapuc,y President By Secretary . ATTEST: APP-IROVED AS TO FOM4. City Attorney _5_ EXHIBIT "A11 Ao Equipment (Office) 1 Typewriter - Royal 1 Adding machine - Underwood electric 1 Addressograph 1 Desk chair 1 Filing cabinet 5 Rand index files 1 Neptune meter testir, 6 Chairs straight Bo Tools Mueller tapping machine E 2 Ditch pumps Wrenches - dies 1 Goldak pipe locator Co "Supplies 10 Miscellaneous 540 feet Ya19-copper pipe 360 feet 119-copper pipe 6 Smith-Blair clamps Dayton coupling (assorted) Assorted � 11 and 1.91 fittings Assorted Is'+ervice clamps 55 No, 3 Brooks meter boxes 57 No, 3 Brooks meter box extensions 5 No. 4 ToTo' valve boxes complete 20 Pipe 34 - 6" x 31 x 3" MoO,Ao R.T. Transite 9 - 611 x 39 x 3" Mao,A, Simplex Transite 3 .. 3" x 13' Simplex Transite 13 - 314 x 131 R.T. Transite 23 - 411 x 130 R.T. Transite 1 - 691 x 61611 Simplex Transite 57 - 61t x 130 R,T, Transite o - 6t1 x 6P1 RoT, Transite 30 Well Pumps Layne & Bowler with U48, Motor 20 hopo Layne & Bowler with UoSo Motor 20 hopm 4. Storage, Facilities 3 Wooden Tanks combined capacity 161,000 gallons. EXHIBIT 19A" Ao Equipment (Office) 1 Typewriter - Royal 1 Adding machine - Underwood electric 1 Addressograph 1 Desk chair 1 Filing cabinet 5 Rand index files 1 Neptune meter testbr 6 Chairs straight Ba Tools Mueller tapping machine E 2 Ditch pumps Wrenches - dies 1 Goldak pipe locator Co Supplies to Miscellaneous 540 feet Y'4'Q-copper pipe 360 feet 144-copper pipe 6 Smith-Blair clamps Dayton coupling (assorted) Assorted W1 and 1T1 fittings Assorted service clamps 55 No. 3 Brooks meter boxes 57 No. 3 Brooks meter box extensions• 5 No. 4 T.T.-valve boxes complete 2, Pipe 34 _ 611 x 34 x 3" HoO.A, R.T. Transite 9 - 6" x 3' x 3" MoOoAo Simplex Transite 3 - 3" x 139 Simplex Transite 13 - 3" x 131 R.T. Transite 23 - 49, x 130 R.T. Transite 1 - 691 x 6061, Simplex Transite 57 - 611 x 130 R.T. Transite 2 - 6P1 x 611 R,T, Transite 30 Well Pumps Mayne & Bowler with US. Motor 20 hop® Layne & Bowler with UoSa Motor 20 hapti 4. 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CCU* W..,. d.� J�(_,.. ?+S q ..7.v . _J<. ..JJ.,J,. :.,>e;..N'"• � '.k:i`i S°i a •r -r.. S' ,.,_. „N ., .x i_,, „�1.i [.� "GOD d...,. ?tr`? .,i,:o >.`, ..r,,. •Ir Fs.? ;�3 ? ee:, Set, �.. .4, .F. tf; 's;•yrii _ ..._.a. PINK ,., n i.A .., . � .. .Jc" ..+, L. rJ ._ _,rJ ..,..Jd at allot an;�i�°b.t tf VMS _. toy t 1..:.r.', of W. ,. »�6"t::.`_'t' ..,_. �.'�> t 7 r �,F; %�W r•.•S'.'i",�'7,.t r• vla r-n_ �±,.... tLTr_,.> S>. >>r,•,: _ t J•- ':L`^ .'§ �'�^ 'i ,-22W ?.1: ;Ji ,1 ..i�0 feet .4u a''s.T, �jP e 4'of`.'�'C'.. .., •r L..'.l .'�3+..-G .. t ..;...-. ..f tii .t... •4 ....a 1.L•� :s^.M.ui�.8 <i,N.�� ., lid POW,a:ri.�1,r fall point •.».. ,. �� �'.�? F-. ....+� .:'l ... ...�b'.t �._... '3p.," ,a.i:�.�.tiP a:.i,> 11.5,00 AM ......... ,. N!. .,..1. Pvs.._, WAS.. Jt(. :fL 280.67 too! 104 sail e. M 4 5.;h .Yr :1 -:3 y „-f.:i .h f.,1..., ,.... 240 ,.i, - _a 5 '�i.•:.. �� - .r'i: PEA of ACTS:+' Ili . .... .i.i.`n '•:a;"w'i•,>. A .:-,. ,4•;O^w.;T at Fyv: •. `�;_} Willed "Flat UY 0 5 n '8y'Yj;:,.4`,n.•'f! '+,'," .. .. �. f . '' ._. .> � _ ...'.p.,.. .. - .,t7TJ1• . ., - .'tYtn,. . � r:r„ ?' c ., .... .. C Leal description ofreal property to be acglired by the City Of i'iL-:atington Beach from Sunset Be acf_-SLlrfside Plater Company. PARCEL 1:. r_'hat portion O' the northeast Quarter Of the north`:;est quarter Of CtiO _� section 29, iOls'n^'P,_ rj SGlI'U11, t{ ' 1 ;C 11 Wes', San Bernardino �. SC and^nry '^,1, 'heCity' __ i• jt n i "�Ch, " p`'� ''p recorded in Book 512 .!C_ Qi,..,__, ___ i, ti. C1 ui1T,__if C.. �..., uS �: iIIc.. pare 13) o_" .Lscell ':leous i:aps, .records of 0range County, descrii Dd as follol•.s: be i_ lli ,at. the Southeast cO per of 'he Northeast one-quarter Of the 10r thwost o cc-cua_' per of said Tract-tonal. Section 29i 1;'hance SG;a.j:h 891 51173" West 10.22 et al oi� t' - „ e 1 ✓� s�. cuarter of the No t' est quarter le et t^ �:' t-Y!c +.,Gu n line Of L+l\. :G_�l,l:l:t.�y T^ �!• y l.�'\C• of said __ Ct1 O'nal SCCti0i1 29 t0 a _A1 r_t, Said line also bel:� 'the Easterly J_"OlOi1g.'?110: Of try centerline OI j':arnei' Avenue, t-heace i:orth 0° 0181e 0711 West -0 00 fee: o he a i i f h irhi rt� ' 11 n 0^ l L J the _ p0_r O �t -_L._n-, said -point es on a line �o U i»eazui e Cam'' .at _if ht o.:CiC�!es.. for t'1 of the Easterly centerline _pi olon—ation of Warnel Avenue, thence S ui.h 89' 511 53" West 253.79 feet a1 o'1s said line 1 :iC � i t ra-.1.� nt l nrl N a t concave 1•' C'" Olq 1 to a '�10 w poi_ al o __. on curve concave t-o '-i e 1;ort,nl•?es -and nuv_nr a _radius oi' 6`•5.00 feet, a _adia1 line thrown said point bears South 20° 02, 27'1 s't; hen a 'Nc r rhea sterly alonu said curve 110.84 feet t'rrouE;1' a central angle cf 9` 5O' 58" to a -point, said -point also lying on a line 90.00 feet, moas'u=ed at .ifs'. a_nglec Nortil of the _Easterly atior_ Of Warner Avenue, thence Nort-11 890 51` 53" _.asp 180-38 feet alonz, said line to a poi nt, said point- also 1yi n a line -50�00 feet, maasured at _ " 1Clos Wrest Of the East line Of `-he rOr,heazto One-quarter of -the Nlorthwast one-quarter of said fractional '�' O 7 2 0 �. feet alon- said lire to point Sect.-Lon 2'y, ��.cilc.n South 0 . ;-3? 2,: 9 7� said point also lyin—CD, Gi'1 a t'-Zgzent curve concave to the Xforthwest and ravines a radius of 20.00 feet, thence Southl•:esterIy 51.62 feet along said curve throu_h a cell-VIT.1 aaCle Of 90°. ,5' •15".. t0 the true ?point Of begiinxind. PARCEL 2 : P01^" oil of _Fracti O al SCCtion 2.-, '1-'.Ow-ashi1> 5 Sout'ti, IRanre 12 .1r2St Of COveril.'ent Survey. approved ,?:i:^il 7, 19124 by Frank C. Gould, U "red S;a'� S-arve�t or General for Cial�fornia, bei�_`- a portion l . J _ � port,_on of the parcel ce_ d - n C Ord 'recorded July 15, 10-1 in BooiL 1 G:. la'P_ii �:CSCriI^,% _.i1 .t,Ilq: �at,ent- t,0 JOils OaSc 30 C1 1� t-e its, records Of 0_"an e County, California, described as follows: _..e rcl--I -.:in2; ..t _,Oi• t On ;,he 1` rt 1 ^^ er y t� e 50 L of .:� :�'.� y _� G t-:! cast-, r_- line of _z o 11t- o_' ?a de C i zed 41__7 t- C deed to '_Paci fic r;l ectric Paill;ay Compaiiy, recorded June 15, 1917 :GOB: j.l_, 'p;:, 100 of DoodS, distant 40 :i:eCt Lro:u th t,.^^_- .res rly 1i__c and/er the Soataresterly ext-.e lion thereof of rile B.a ncho La Bo lsa vtli Ca, as s__C:?n oil a i.7-•C recorded in BGG._ 1, pale ;•jl Of,rate '�s, records Of _G ____r _ s co-unty, U 11cnc�. i�or �_l s�erly Flo say a mart- easterly !. of Lhe Ijaci_:c -Electric _a_-71l;ay Con-pan y, 100 feet; tha_ace Nor theal, erg t l y t-0 of _anc _O La Bolos: i.:12 Cay SO f ect; hence �t'__e ,Orly rta_al" ,I tc sal �d ort-heaste_�l y line of re Pacific Electric P.ail- l.?ay Co :_ y 100 f0 :,; tile: ", = �l-,es= -1, ll h the Nr _ .L,.�: 1�i�i A7VwV..•fl%:JLC:l_.� par�...._cl l•?ia,i V..L +Cr Vnl':l:st,E.'ily __na G .t said ai1C: rC �a bO sa L-hiC , 60 1 eb v to t Z1e UGiilV O_ beer tirl EXH y Bi 1 C.. t age I C 1 TO `RA�NGEE11966-1967 STATEMENT OF SECURE® PROPERTY 'TAXES ASSESSELD VALUA?ION5 Pts jOF MARCH 7, 1966 TAXES FOR FISCAL YEAR JULY 1, 1966 - JUNE 30, 1967 DON S. MOZLEY - COUNTY TAX COLLECTOR LAND AND/OR IMPROVEMENTS PERSONAL PROPERTY EXEMPTION TOTAL NET TANGIBLE SOLVENT CREDITS MINERAL RIGHTS BUILDING OTHER TREES VINES " HOUSEHOLD OTHER TAXABLE VALUE $ $ $ $ 1480 $ $ $ $ S °? x. DESCRIPTION (SEE PARAGRAPH 9) MR INDICATES MINERAL RIGHTS CODE AREA PARCEL NUMBER LOCATION 106-6.03-04 WAIER SYSTEMS l 4-009 987-40 -01 BOARD ORDER CUT NO. BATCH NO. / I �NERIOF RECORD AS OF MARCH 7,1966 MAIL TO:• �� i HUNTINGTON HARBOUR CORP I City of Huntington Beach Huntington Beach City Hall *0459-* Huntington Bench, Calif. RATES AND DISTRIBUTION OF AMOUNTS BY TAXING AGENCY I ALSO SEE REVERSE SIDE.) TOTAL SECOND FIRST AGENCY TAX RATE VALUE BASE TAXES AND ASSESSMENTS INSTALLMENT INSTALLMENT CO .SCH BLDG AID .0026 1480 .02 $ 144.04 $ 72.02 $ 72.02 OCEAN_ _TEW _,E€.--f�F _1.;2�37 14_8€� I.6 .71y OL EAN X I E!M Et�-8 0415 U.. " _ "'4 480 � '7.32 6% PENALTY, 6% PENALTY COSCH SLOG (+ AID �ry �^y y'g y S•>� /•,� 6% y/� / y� AFTER ? AFTER .� C SCHt SLOG A I€l .0001 1.480 O � �"' 7- 4"f0-67 �. J � 12-10"66 AREA WIDE SCH TX .7226 1480 10.70 COSTS $3.0000STS HUNT BCH HS-t13 g .5€�93 148D0 8g.7�2 3 o v 4"f0.67 -3. 00 HUNT(�BCH HS-GF 1.5363 :1480 22.74 TOTAL 1 .0RANGE CST JC-iif .5548 1480 6.21 PAGE J SCH MODI.FICA AID .1832 148-0 2.71 IF YOU HAVE VOL PAGE CK VOLK Star INST TUITION .0005 1480 .01 SOLD THIS 127 143 4 127 143 4 " IHU dT BEACH CITY 1.3300 1480 19.6E PROPERTY - RETURN COUNTY FUNDS 1.7300 1480 25.60 THIS BILL WITH 2ND INSTALLMENT 1ST INSTALLMENT OC FLOOD C ONT .2895 1480 4.29 EXPLANATION OR RECEIPTED HERE RECEIPTED HERE 0947 1480 1.40 FORWARD THIS BILL OC HARBOR '� TO THE NEW MOSQUITO ABATE .0111 1480 .17 OWNER. Mwo OC MUN ORIG .1800 1460 2.66 bCMWO CIRIC AR .0979 1480 1.45 OC SANITATION 11 .4725 1480 6.99 OC WATER D IST .0800 1480 1.18 OCWD-WTR RESERVE .1000 1480 1.48 �- S INDICATES PREVIOUS SALE TO STATE 9.7338 TOTAL TAI. 144.04 SER I-I E REVERSE }}yy SEE DESCRIPTION AND REVERSE SIDE J SIDE FOR TYPE OF EXEMPTION IMPORTANT 1.VETERAN 2.CHURCH 3.ORPHANAGE INFORMATION 4.COLLEGE S.WELFARE 6.OTHER X WHOLLY EXEMPT WHEN PROPERLY VALIDATED THIS STATE- MENT BECOMES A RECEIPT FOR TAXES PAID ON"}PARCEL NUMBER ABOVE. j t VOL PAGE CK VOL PAGE CK 127 143 4 , 127 143 4 CODE AREA PARCEL NUMBER CODE AREA PARCEL NUMBER i 1 DO NOT DETACH DO NOT DETACH I. �y 1 iP+2P TT+1P TT+TP-I-C iP .� 4,03 OFFICE USE ONLY OFFICE USE ONLY 2P 41032 76 S4 U RETURN ENTIRE STATEMENT J 2ND INSTALLMENT 1ST INSTALLMENT CLDUE: FEBRUARY 1 1967 Et DUE: NOVEM13ER 1, 19�� DELINQUENT: APR. 16, 11967 DELINQUENT: DEC, 10, IE 5:00 P.M. 5:00 P.M. READ PARAGRAPH 2 'x 6?') ON REVERSE SIDE. ' i PLEASE MAIL THIS BILL WITH REMITTANCE TO: ``lJ DON S. MOYLEY, COUNTY TAX COLLECTOR. TOTAL TAXES P.O. BOX,1438, SANTA ANA, CALIFORNIA 92702 $ 04 OFFICE LOCATION 630 N. BROADWAY, FINANCE BLDG. RM. 110 TOTAL TAX MAY BE PAID jTfT TIME OF 1ST INSTALLME ® ' • ' • • PAYMENT. • 0 ® I Y ® ' VOL PAGE CK RETURN ENTIRE STATEMENT 127 143 4 . s • ��'s.G2C V *` SOUTHERN CALIFORNIA WATER COMPANY GENERAL OFFICES 11911 SOUTI3 VERMONT AVENUE Los ANGELES, CALIFORNIA 90044 October 17, 1963 City of Huntington Beach Huntington Beach, California Attention: Mr. Doyle Miller, City Administrator Gentlemen: Reference is made to an agreement of purchase and sale dated September 12, 1963 between the City of Huntington Beach and the Southern California Water Company. Among other things in the agreement we direct your atten- tion to those rights of the Company under certain leases as described in Exhibit D of the Agreement. To effect transfer of the office lease we are attaching an Assignment of Lease. Please sign under the Assignee's acceptance portion and return all three copies to the writer. Upon receipt we will arrange for the Lessor to sign the Consent portion of the Assignment. Then two copies of this document will be returned to you for your files. It is our desire to transfer this lease to coincide with the take over date of the water system so expeditious handling and return would be appreciated. Very truly yours, SOUTHERN CALIFORNIA WA COMPANY C. E. Landes Administrative Assistant CEL:ms i October 29, 1963 Southern California Water Company 11911 South Vermont Avenue Los Angeles, California 90044 Attention: - Co E. Landes Administrative Assistant Dear Sir: The City Council of the City of Huntington. Beach, at their regular adjourned meeting held October 28, 1963, approved the Assignment of the Lease relating to the 49ofTice Leaee" at 220 Main Street in Huntington Beach, "Exhibit D" of the "Purchase & Sales Agreeiuent4° of the Southern. California 'Eater Company system, Enclosed please find the three copies of Assignment of Lease with the Assignee's Acceptance executed, as per your letter of October 17, 1963. It is our understand- ing that two copies., of this document will be returned to the City of Huntington Peach after the Lessor signs the Consent poution of the Assignment Sincerely yours, Paul C o Josses City Clerk PCJeaw Enc: 3 To eZ14; A�DaDate I L8 (�J,411zz laple& I/ _ _ f v PLEASE REPLY TO®)► Signed Date �(J._,Z /- ' Signed Redif?rm SEND PARTS 1 AND 3 WITH CARBONS INTACT. 4S 465 PART 3 WILL BE RETURNED WITH REPLY. i SOUTHERN CALIFORNIA WATER COMPANY GENERAL OFFICES 11911 SOUTH VERMONT AVENUE Los ANGELES, CALIFORNIA 90044 January 3, 1964 Mr. Doyle Miller City e Admi.nistrator City of Huntington Beach City Hall Huntington Beach, California Dear Mr. Miller: On December 31 I sent you a pencil copy of a statement showing the amount of funds required by Huntington Beach for our first closing on January 8, 1964. As I told you over the telephone, there is a slight adjustment in the proration of taxes to January 8, 1964. Enclosed is a copy of a statement showing the estimated sales price to the City of Huntington Beach. The Exhibits will be forwarded to you on Monday, January 6. Very truly yours, SOUTHERN CALIFORNIA WATER COMPANY By `� .�. W. C• Welmon Vice President WCW/IS Enclosure SOUTHERN CALIFORNIA WATER Cobd� H=NGTON BEACH PROPERTIES Estimated Sales Price As of January 8, 1964 (First Closing) Basic Sales Price $1,225,000.00 Plus - Cost to the Company of all additions, betterments and extensions to the water system made between January 1, 1963 and November 30, 1963 (excluding cost to the Company of all such additions, better- ments and extensions built pursuant to refund contracts): as per Exhibit A attached 34,705.69 $1,259,705-69 Less - Depreciation on the water system from January 1, 1963 to November 30, 1963 11/12 of annual depreciation of $22,120.44 $20,277.07 Depreciated book value as of December 31, 1962 . of' all property then owned by the Company and retired from service prior to November 30, 1963 as per Exhibit B attached 4,260.42 24,.537.49 Cash Purchase Price $1,235,168.20 Less - Proration of Real and Personal Taxes to January 8, 1964 (excluding taxes on leased property) as per Exhibit C attached 217.39 Amount Due First Closing $1,2 43 ,950.81 Note: Second closing will reflect adjustments from November 30, 1963 to January K'4964. 5cc77 "m EAe deah DOYLE.MILLER, Administrative Officerr mot; a i q,5-Or 9� SOUTHERN CALIFORNIA WATER COMPANY GENERAL OFFICES 11911 SOUTH VERMONT AVENUE Los ANGELES, CALIFORNIA 90044 December 31, 1963 Mr. Doyle Miller City Administrator City of Huntington Beach City Hall Huntington Beach, California Dear Mr. Miller: Enclosed is a pencil copy of a statement showing the amount of funds required by Huntington Beach for our first closing on January 8, 1964. This statement reflects the property adjust- ments from January. l, 1963 to November 30, 1963. The proration of taxes is computed to January 8, 1964. The tax proration does not include some taxes in connection with the lease from the Huntington Beach Company as we have not yet received the bill for these taxes. This will have to be handled in our second closing. On Friday, January 3, we will forward to you a typed copy of the statement for the First Closing, with exhibits showing the details of the adjustments. In accordance with our previous understanding, we have arranged with the Title Insurance Company office in Santa Ana for the closing to take place in their office at 10:30 A.M., on Wednes- day, January 8, 1964. Very truly yours, SOUTHERN CALIFORNIA WATER COMPANY By W: C. Welmon, Vice President WCW/IS Enclosure ^ cc - Mr. Philip F.. Walsh p w Mr. Donn B. Miller 0'Melveny. & Myers 433 South Spring Street Los Angeles, California 90013