HomeMy WebLinkAbout1996/1997 Comprehensive Annual Financial Report - CAFR - wit � OFFICE OF THE ����
CITY OF HUNTINGTON BEACH,
� CALIFORNIA
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� COMPREHENSIVE
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� ANNUAL FINANCIAL
� REPORT
' For the Fiscal Year Ending September 30, 1997
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Increase (Decrease) '
from 1995196
Dollar Amounts in Thousands: 1996197 Percent of Amount Percent '
Amount Total
City Council $ 233 0.2% $ 9 3.9 %
City Administrator 875 0.9% (38) (4.3) % '
City Treasurer 781 0.8% 38 4.9 %
City Attorney 1,565 1.6% 129 8.2 % '
City Clerk 470 0.5% (18) (3.8) %
Administrative Services 4,208 4.4% 27 0.6 %
Community Development 3,694 3.8% 454 12.3 % '
Fire 15,763 16.4% 1,016 6.4 %
Police 32,489 33.8% 536 1.6 %
Community Services 6,827 7.1% (7) (0.1) % '
Library Services 2,638 2.7% (35) (1.3) %
Public Works 15,673 16.3% 1,328 8.5 %
Non-Departmental 9,426 9.8% 490 5.2 % '
Capital Outlay 623 0.6% 40 6.4 %
Debt Service 900 0.9% (15) (1.7)
Total $ 96,165 100% $ 3,954 4.1 6 % '
Community Development and Public Works expenditures increased due to increased development in '
the Holly Seacliff area. City Administrator expenditures decreased due to some current year
expenditures being paid out of different funds. City Attorney expenditures increased due to the
increased cost of outside attorneys in tort cases. '
Fund Equity- Below is a summary of fund equity with explanation of significant fluctuations (dollar '
amounts in thousands):
GENERAL FUND: Total Equity Total Percent '
1996197 Equity Increase
1995196 (Decrease)
Reserved $ 23,358 $ 28,069 (16.8) % '
Unreserved/Designated 4,959 591 739.1 %
Unreserved/Undesignated 6,183 - n/a
Total $ 34,500 $ 28,660 20.4 % '
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' GOVERNMENTAL FUNDS: Total Equity Total Equity Percent
1996197 1995196 Increase
(Decrease)
Reserved $ 78,034 $ 92,785 (15.9) %
Unreserved/Designated 13,525 2,557 428.9 %
Unreserved/Undesignated 27,862 18,367 51.7 %
' Total $ 119,421 $ 113,709 5.0 %
PROPRIETARY FUNDS: Total Equity Total Equity Percent
1996197 1995196 Increase
(Decrease)
' Contributed Capital $ 29,764 $ 60,743 (51.0) %
Retained Earnings 37,139 (7,962) n/a
Total $ 66,903 $ 52,781 26.8 %
' General and governmental fund equity increased due to the improved local economy and accounting
changes relating to property tax recognition. Proprietary fund equity increased due to better financial
results from the Water and Refuse Fund. There was also an accounting change that resulted in $23
' million in contributed capital to be transferred to retained earnings which affected the allocation of the
fund equity.
' PROPRIETARY FUNDS
The City operates five enterprise and two internal service funds. The enterprise funds are the Water
' Utility Fund, the Refuse Collection Fund, the Cultural Affairs, the Emergency Fire Medical Fund and
the Emerald Cove Housing Fund. These funds are supported through user charges to the public.
' The internal service funds are the Self-Insurance Fund and the Equipment Replacement Fund and
are supported by charges to user departments within the City.
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Shown below is an analysis of the City's five enterprise funds: '
$In Thousands
Water Fund Emerald Cove Housing Emergency Fire Medical '
ENTERPRISE 1996-97 1995-96 1996-97 1995-96 1996-97 1995-96
FUNDS:
Operating Revenues $ 21,870 $ 19,497 $ 621 $ 633 $ 3,229 $ 2,818 '
Operating Income' 203 (291) 206 265 (46) (794)
(Loss)
Net Income (Loss) 1,880 86 6 58 (46) (794) '
Debt Service N/A N/A 0.45 0.58 N/A N/A
Coverage
Refuse Collection Cultural Affairs
1996-97 1 1995-96 1996-97 1995-96
Operating $ 9,079 $ 8,457 $ 132 $ 316 '
Revenues
Operating Income 386 (364) (271) (99)
(Loss) '
Net Income (Loss) 386 (401) (190) (18)
Debt Service N/A N/A N/A N/A
Coverage ,
Water fund revenue and net income increased primarily due to an accounting change where the
capital facilities charge is now recorded as part of the Water Fund rather than as a separate fund. '
The loss in the Emergency Fire Medical Fund is due to a write off of prior receivables. The loss in
the Cultural Affairs Fund is primarily due to reduced contributions to the art center. '
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Shown below is a table analyzing the performance of the City's internal service funds (in thousands):
' $In Thousands
' INTERNAL SERVICE FUNDS: Insurance Reserve Equipment
Replacement
1996-97 1 1995-96 1996-97 1995-96
' Operating Revenues $ 9,673 $ 8,120 $ 2,419 $ 2,147
Operating Income (Loss) 136 (1,751) (85) (1,199)
Net Income (Loss) 169 (2,078) 3,963 (1,863)
' This table shows that the multi-year funding plans to replenish the Insurance Reserve and Equipment
Replacement Fund are working.
' Pension Obligations - The City participates in the California Public Employment Retirement System
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(PERS) which sets the rates the City uses to make contributions on behalf of all eligible employees.
At June 30, 1996, which is the most recent information available from PERS, the City's total future
pension obligation for all current and retired employees was $270,110,000 and assets available for
these obligations was $303,791,000 leaving surplus of$33,680,000.
The City also maintains a supplemental retirement plan. An independent actuary conducted a study
' of this plan for the year. The annual required contribution for this plan was $2,150,804, or 4.1% of
normal salary. The City contributed $2,322,000 in 1996/97, or 4.5% of the payroll. The unfunded
liability for this plan is $23,008,000. Subsequent to year-end one of the employee groups agreed to
' end this plan for new hires.
Agency Funds - Agency funds are moneys held by the City in trust for others. Total assets and
tliabilities of the City's agency funds decreased by $31,491,000 due to new accounting rules for the
recording of deferred compensation plans. The assets of the deferred compensation plan held by
the two trustees are not recorded on the City's financial statements under the new accounting rules.
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Debt Administration - The City's outstanding long-term debt at year-end was (in thousands): '
Bonds: '
Reservoir Hill Assessment District Bonds $ 1,145
1992 Public Financing Authority Revenue Bonds 31,360 '
1997 Public Financing Authority Lease Revenue Bonds 8,070
Certificates of Participation:
Emerald Cove Housing (Redevelopment Agency) 5,300 '
Civic Improvement Corporation 33,960
Notes Payable: '
Energy Conservation 308
Redevelopment Agency 554
Other Debt: '
Self-Insurance Claims 11,761
Pension Obligation 5,592
Advances to Other funds (Redevelopment Agency) 63,614 '
Advances to Other Funds (Other) 3,846
TOTAL $ 165,510
The City's legal debt limitation for general obligation bonds is 12% of the total of assessed valuation '
in the city. The City currently has no general obligation bonds outstanding so the legal debt margin is
$1.4 billion.
Moody's Investor's Service rates certain obligations as to their safety as an investment. Below are '
the current ratings of certain City obligations:
Civic Improvement Corporation Certificates of (A1)
Participation (Insured) '
Public Financing Authority 1992 Revenue Bonds (Baa)
Notes 12 and 13 to the General Purpose Financial Statements include further information on the ,
City's long-term debt.
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' Cash Management- The City Treasurer invests the unexpended cash in authorized investments.
These include investments such as US Treasury notes, certain federal government agency
' securities, high grade bankers acceptances, high grade commercial paper and the State of California
Local Agency Investment Fund. The cash management system of the City monitors and forecasts
revenues and expenditures to maintain adequate liquidity and to maximize investment capabilities.
The investment of non-restricted cash and investment yielded interest of $3,889,329 , or 5.77%
during the year.
t The California Government Code requires the City Treasurer to prepare an annual statement of
investment policy and quarterly report containing specific information about compliance with the
City's investment policy and specific information on the City's investment portfolio. The City
Treasurer has complied with this law. Note 3 to the General Purpose Financial Statements includes
further information on the City's cash and investments.
Risk Management- The City is self-insured for liability, worker's compensation and employee health
claims. The City is a member of the Big Independent Cities Excess Pool (BICEP) which provides
coverage for liability claims in excess of $1 million through a managed program of pooling and private
' insurance. The City also maintains privately purchased insurance coverage for worker's
compensation and employee health claims in excess of certain amounts.
Other Information- The Single Audit Act of 1984 requires the City's grant programs that use Federal
funds, either directly or passed through from other agencies, to be subjected to special audit
' procedures. This includes test of compliance with Federal laws and regulations and an organization-
wide examination of financial operations. Copies of this audit are available from this office.
' This report includes the financial activity of separate legal entities whose activities the City controls.
These entities are the:
• Redevelopment Agency of the City of Huntington Beach
t0 Huntington Beach Public Facilities Corporation
• Huntington Beach Public Financing Authority
' 0 Huntington Beach Civic Improvement Corporation
• Parking Authority of the City of Huntington Beach
• City of Huntington Beach Community Facilities District
' Reservoir Hill Assessment District
• Huntington Beach Auto Business Improvement District
' Component unit reports (stand-alone reports) are available for the Redevelopment Agency, the
Public Facilities Corporation and the Public Financing Authority.
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CITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS t
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL '
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(In Thousands)
(Continued) '
TRANSPORTATION
Variance
Favorable
REVENUES: Budget Actual (Unfavorable) t
Other Taxes $ 1,391 $ 1,322 $ (69)
From Use of Money and Property 122 154 32
From Other Agencies 2,170 210 (1,960)
TOTAL REVENUES 3,683 1,686 (1,997)
EXPENDITURES:
Current: '
Public Works 333 391 (58)
Capital Outlay 3,208 539 2,669
TOTAL EXPENDITURES 3,541 930 2,611
EXCESS OF REVENUES OVER(UNDER) '
EXPENDITURES 142 756 614
FUND BALANCE-BEGINNING OF YEAR 2,742 2,742 -
Prior Period Adjustment (420) (420) -
FUND BALANCE AS RESTATED 2,322 2,322 -
FUND BALANCE -END OF YEAR $2,464 $ 3,078 $ 614
AIR QUALITY '
Variance
Favorable
REVENUES: Budget Actual (Unfavorable) '
From Use of Money and Property $ 2 $ 13 $ 11
From Other Agencies 210 197 (13)
TOTAL REVENUES 212 210 (2) '
EXPENDITURES:
Current:
City Administrator 94 41 53 '
Capital Outlay 16 16 -
TOTAL EXPENDITURES 110 57 53
EXCESS OF REVENUES OVER EXPENDITURES 102 153 51
OTHER FINANCING USES: '
Operating Transfers Out (14) (14) -
EXCESS OF REVENUE OVER EXPENDITURES AND
OTHER USES 88 139 51
FUND BALANCE -BEGINNING OF YEAR 184 184 -
FUND BALANCE -END OF YEAR $ 272 $ 323 $ 51
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tCITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS
' STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
' FOR THE YEAR ENDING SEPTEMBER 30, 1997
(In Thousands)
(Continued)
' TRAFFIC IMPACT FEE
Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
' Licenses and Permits $ 1,000 $ 330 $ (670)
From Use of Money and Property 13 28 15
TOTAL REVENUES 1,013 358 (655)
' EXPENDITURES:
Public Works 332 143 189
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES 681 215 (466)
' FUND BALANCE -BEGINNING OF YEAR 473 473
Prior Period Adjustment (43) (43)
FUND BALANCE AS RESTATED 430 430 -
' FUND BALANCE -END OF YEAR $ 1,111 $ 645 $ (466)
FOURTH OF JULY PARADE
' Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
From Use of Money and Property $ 3 $ 1 $ (2)
Other 183 200 17
TOTAL REVENUE 186 201 15
' EXPENDITURES:
Current:
Community Services 197 196 1
TOTAL EXPENDITURES 197 196 1
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (11) 5 16
FUND BALANCE-BEGINNING OF YEAR 12 12 -
' FUND BALANCE-END OF YEAR $ 1 $ 17 $ 16
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' Page 77
CITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS '
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL '
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(In Thousands)
(Continued) '
LIBRARY SERVICE
Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
From Use of Money and Property $ 178 $ 156 $ (22) '
Charges for Current Service 230 430 200
Other 60 63 3
TOTAL REVENUES 468 649 181
EXPENDITURES: '
Current:
Library Services 152 117 35
Public Works 10 4 6 '
TOTAL EXPENDITURES 162 121 41
EXCESS OF REVENUES OVER EXPENDITURES 306 528 222
OTHER FINANCING USES: '
Operating Transfers Out (296) (296) -
TOTAL OTHER FINANCING USES (296) (296) -
EXCESS OF REVENUES OVER EXPENDITURES AND '
OTHER SOURCES 10 232 222
FUND DEFICIT-BEGINNING OF YEAR (513) (513) -
Prior Period Adjustment (45) (45) -
FUND DEFICIT AS RESTATED (558) (558) -
FUND DEFICIT-END OF YEAR $ (548) $ (326) $ 222
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CITY OF HUNTINGTON BEACH
' SPECIAL REVENUE FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
' BUDGET AND ACTUAL
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(In Thousands)
' (Continued)
TOTAL SPECIAL REVENUE FUNDS
Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
' Other Taxes $ 1,391 $ 1,322 $ (69)
Licenses and Permits 3,453 2,293 (1,160)
From Use of Money and Property 887 1,080 193
' From Other Agencies 13,493 9,537 (3,956)
Charges for Current Service 230 485 255
Other 248 336 88
' TOTAL REVENUES 19,702 15,053 (4,649)
EXPENDITURES:
Current:
t City Administrator 2,070 981 1,089
Fire 82 43 39
Police 904 924 (20)
Economic Development 2,918 1,042 1,876
' Community Services 345 474 (129)
Library Services 220 249 (29)
Public Works 1,993 1,441 552
' Capital Outlay 15,767 4,566 11,201
TOTAL EXPENDITURES 24,299 9,720 14,579
EXCESS OF REVENUES OVER(UNDER)
' EXPENDITURES (4,597) 5,333 9,930
OTHER FINANCING SOURCES(USES):
Operating Transfers In 1,054 1,054 -
' Operating Transfers Out (3,615) (3,606) 9
TOTAL OTHER FINANCING SOURCES (USES) (2,561) (2,552) 9
EXCESS OF REVENUES AND OTHER SOURCES OVER
' (UNDER) EXPENDITURES AND OTHER USES (7,158) 2,781 9,939
FUND BALANCE- BEGINNING OF YEAR 11,076 11,076
Prior Period Adjustment (1,723) (1,723) -
FUND BALANCE AS RESTATED 9,353 9,363 -
' FUND BALANCE -END OF YEAR $2,195 $ 12,134 $ 9,939
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' Page 79
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DEBT SERVICE FUNDS account for the receipts for and payment of general long-
term debt.
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' • The Redevelopment Agency Debt Service Fund records the property tax increment
revenues received from Redevelopment projects. The tax increment repays the debt of the
Redevelopment Agency.
• The Public Facilities Corporation Debt Service Fund records the debt service activity of the
' Huntington Beach Public Facilities Corporation.
• The Public Financing Authority Fund records the debt service activity of the Huntington
' Beach Public Financing Authority.
' • The Reservoir Hill Debt Service Fund records the debt service activity of the Reservoir Hill
Assessment bonds.
' • The Civic Improvement Corporation Fund records the debt service activity of the
Huntington Beach Civic Improvement Corporation.
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CITY OF HUNTINGTON BEACH '
DEBT SERVICE FUNDS
COMBINING BALANCE SHEET '
SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1996 '
(IN THOUSANDS)
Public Reservior Hill '
Redevelopment Public Facilities Financing Assessment Civic Improvement
ASSETS: Agency Corporation Authority District Corporation Total1997 Total1996
Cash and Investments $ 1,312 $ - $ - $ 292 $ - $ 1,604 $ 1,973 '
Cash With Fiscal Agent - 58 3,622 14 2,868 6,562 6,282
Taxes Receivable 1,117 - - 75 25 1,217 1,213
Other Receivables 159 - 38 6 - 203 195
Receivables-O.C.I.P. - - - - - - 641
Advances to Other Funds - - 28,644 - - 28,644 29,069
TOTAL ASSETS $ 2,588 $ 58 $ 32,304 $ 387 $ 2,893 $38,230 $ 39,373
LIABILITIES AND FUND EQUITY '
LIABILITIES:
Accounts Payable $ 141 $ - $ - $ 3 $ - $ 144 $ 143
Due to Other Funds - - - - 87
Deferred Property Taxes - - - - 1,122
TOTAL LIABILITIES 141 - - 3 - 1" 1,352
FUND EQUITY:
Reserved Equity: '
Long-Term Receivables-O.0 Bankruptcy - - - - - - 641
Long-Term Receivables from Other Funds - - 28,644 - - 28,644 31,841
Total Reserved Fund Equity - - 28,644 - - 28,644 32,482
Unreserved Equity:
Designated for Future Expenditures 388 - - - - 388
Undesignated 2,059 58 3,660 384 2,893 9,054 5,539
Total Unreserved Fund Equity 2,447 58 3,660 384 2,893 9,442 5,539
TOTAL FUND EQUITY 2,447 58 32,304 384 2,893 38,086 38,021
TOTAL LIABILITIES AND FUND EQUITY $ 2,588 $ 58 $ 32,304 $ 387 $ 2,893 $38,230 $39,373 '
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Page 80 '
CITY OF HUNTINGTON BEACH
' DEBT SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
' CHANGES IN FUND BALANCES
FOR THE YEAR ENDING SEPTEMBER 30, 1997
' WITH COMPARATIVE TOTALS FOR THE
YEAR ENDING SEPTEMBER 30, 1996
(IN THOUSANDS)
Public Reservlor Hill
Redevelopment Public Facilities Financing Assessment Civic Improvement
REVENUES: Agency Corporation Authority District Corporation Total1997 Total1996
' Property Taxes $4,089 $ - $ $205 $ - $4,294 $ 4,706
Licenses and Permits
From Use of Money and Property 337 22 2,238 20 214 2,831 2,703
TOTAL REVENUES 4,426 22 2,238 225 214 7,125 7,409
' EXPENDITURES:
Current:
Non-Departmental 57 - 358 21 - 436 115
Debt Service:
Principal 480 385 480 55 940 2,340 2,966
Interest 5,061 20 2,207 96 1,905 9,289 10,346
TOTAL EXPENDITURES 5,598 405 3,045 172 2,846 12,066 13,427
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (1,172) (383) (807) 53 (2,631) (4,940) (6,018)
' OTHER FINANCING SOURCES(USES): - - -
Operating Transfers In - - 2,648 2,648 4,578
Proceeds of Long-Term Debt 1,624 8,070 9,694 242
Operating Transfers Out (830) - (6,821) - - (7,651) (995)
' TOTAL OTHER FINANCING SOURCES(USES) 794 - 1,249 - 2,648 4,691 3,825
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (378) (383) 442 53 17 (249) (2,193)
FUND BALANCE-BEGINNING OF YEAR 2,539 441 31,882 283 2,876 38,021 40,427
Prior Period Adjustments (608) - (20) (13) - (641)
Cumulative Effect of Changes in Accounting Principles 894 - - 61 - 955
' FUND BALANCE AS RESTATED 2,825 "1 31,862 331 2,876 38,335 40,427
RESIDUAL EQUITY TRANSFERS
Residual Equity Transfers Out - - - - - - (213)
' TOTAL RESIDUAL EQUITY TRANSFERS - - - - - - (213)
FUND BALANCE-END OF YEAR $ 2,447 $ 58 $ 32,304 $ 384 $ 2,893 $38,086 $ 38,021
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tPage 81
CITY OF HUNTINGTON BEACH '
DEBT SERVICE FUNDS '
COMBINING STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDING SEPTEMBER 30, 1997 '
(In Thousands)
Redevelopment Agency '
Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
Property Taxes $4,483 $4,089 $ (394) '
From Use of Money and Property 80 337 257
TOTAL REVENUES 4,563 4,426 (137)
EXPENDITURES: ,
Current:
Non-Departmental 81 57 24
Debt Service: '
Principal 545 480 65
Interest 4,973 5,061 (88)
TOTAL EXPENDITURES 5,599 5,598 1 '
EXCESS OF REVENUES UNDER EXPENDITURES (1,036) (1,172) (136)
OTHER FINANCING SOURCES (USES)
Proceeds of Long-Term Debt 1,624 1,624 -
Operating Transfers Out (1,006) (830) 176 '
TOTAL OTHER FINANCING SOURCES (USES) 618 794 176
EXCESS OF REVENUE AND OTHER SOURCES OVER
(UNDER) EXPENDITURES AND OTHER USES (418) (378) 40 '
FUND BALANCE-BEGINNING OF YEAR 2,639 2,539 -
Prior Period Adjustments (608) (608)
Cumulative Effect of Changes in Accounting Principles 894 894
FUND BALANCE AS RESTATED 2,825 2,825 -
FUND BALANCE -END OF YEAR $ 2,407 $ 2,447 $ 40
Public Facilities Corporation ,
Variance
Favorable '
REVENUES: Budget Actual (Unfavorable)
From Use of Money and Property $ 25 $ 22 $ (3)
EXPENDITURES: '
Debt Service:
Principal 385 385 -
Interest 22 20 2 '
TOTAL EXPENDITURES 407 406 2
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (382) (383) (1)
FUND BALANCE-BEGINNING OF YEAR 441 441
FUND BALANCE-END OF YEAR $ 59 $ 58 $ (1)
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Page 82 '
' CITY OF HUNTINGTON BEACH
' DEBT SERVICE FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
' FOR THE YEAR ENDING SEPTEMBER 30, 1997
(Continued)
(In Thousands)
' Public Financing Authority
Variance
' Favorable
REVENUES: Budget Actual (Unfavorable)
From Use of Money and Property $ 2,677 $ 2,238 $ (439)
EXPENDITURES:
' Current:
Non-Departmental 114 358 (244)
Debt Service:
Principal 480 480 -
Interest 2,202 2,207 (5)
TOTAL EXPENDITURES 2,796 3,045 (249)
' EXCESS OF REVENUES(UNDER) EXPENDITURES (119) (807) (688)
OTHER FINANCING SOURCES (USES):
Proceeds of Long-Term Debt 8,070 8,070 -
Operating Transfers Out (6,821) (6,821) =
TOTAL OTHER FINANCING SOURCES (USES) 1,249 1,249
EXCESS OF REVENUES AND OTHER SOURCES OVER
' (UNDER) EXPENDITURES 1,130 442 (688)
FUND BALANCE -BEGINNING OF YEAR 31,882 31,882
Prior Period Adjustments (20) (20) -
FUND BALANCE AS RESTATED 31,862 31,862 -
' FUND BALANCE -END OF YEAR $ 32,992 $ 32,304 $ (688)
Reservoir Hill Assessment District
' Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
' Property Taxes $196 $205 $ 9
From Use of Money and Property 20 20
TOTAL REVENUE 196 225 29
EXPENDITURES:
' Current:Non-Departmental 21 21 -
Debt Service:
' Principal 45 55 (10)
Interest 98 96 2
TOTAL EXPENDITURES 164 172 (8)
' EXCESS OF REVENUES OVER EXPENDITURES 32 53 21
FUND BALANCE-BEGINNING OF YEAR 283 283
Prior Period Adjustments (13) (13) -
' Cumulative Effect of Changes in Accounting-Principles 61 61 -
FUND BALANCE AS RESTATED 331 331 21
FUND BALANCE-END OF YEAR $ 363 $ 384 $ 42
' Page 83
CITY OF HUNTINGTON BEACH '
DEBT SERVICE FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENDITURES '
AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(Continued) '
(In Thousands)
Civic Improvement Corporation t
Variance
Favorable '
REVENUES: Budget Actual (Unfavorable)
From Use of Money and Property $ 175 $ 214 $ 39
EXPENDITURES: '
Debt Service:
Principal 940 940 -
Interest 1,909 1,905 4 '
TOTAL EXPENDITURES 2,849 2,845 4
EXCESS OF REVENUES OVER EXPENDITURES (2,674) (2,631) 43
OTHER FINANCING SOURCES (USES)
Operating Transfers In 2,650 2,648 (2) '
EXCESS OF REVENUE AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES (24) 17 41
FUND BALANCE-BEGINNING OF YEAR 2,876 2,876 - '
FUND BALANCE -END OF YEAR $ 2,852 $ 2,893 $ 41
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Page 84 '
CITY OF HUNTINGTON BEACH
' DEBT SERVICE FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENDITURES
' AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(Continued)
' (In Thousands)
TOTAL DEBT SERVICE FUNDS
Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
Property'Taxes $ 4,679 $ 4,294 $ (385)
From Use of Money and Property 2,957 2,831 (126)
TOTAL REVENUES 7,636 7,125 (611)
EXPENDITURES:
Current:
Community Services - - -
' Non-Departmental 216 436 (220)
Debt Service:
Principal 2,395 2,340 55
Interest 9,204 9,289 (85)
' TOTAL EXPENDITURES 11,815 12,065 (250)
EXCESS OF REVENUES (UNDER) EXPENDITURES (4,179) (4,940) (761)
OTHER FINANCING SOURCES (USES):
Operating Transfers In 2,650 2,648 (2)
Proceeds of Long-Term Debt 9,694 9,694
Operating Transfers Out (7,827) (7,651) 176
' TOTAL OTHER FINANCING SOURCES 4,517 4,691 174
EXCESS OF REVENUES AND OTHER SOURCES
UNDER EXPENDITURES AND OTHER USES 338 (249) (587)
' FUND BALANCE- BEGINNING OF YEAR 38,021 38,021 -
Prior Period Adjustments (641) (641)
Cumulative Effect of Changes in Accounting Principles 955 955 -
' FUND BALANCE AS RESTATED 38,335 38,335 -
FUND BALANCE-END OF YEAR $ 38,673 $ 38,086 $ (587)
Page 85
' CAPITAL PROJECTS FUNDS account for the acquisition and construction of
capital assets other than those financed by proprietary fund types.
• The Building COPs Fund records the construction activity from proceeds of the 1986 and 1989 Civic
Improvement Corporation Certificates of Participation.
' • The Redevelopment Agency Capital Projects Fund accounts for acquisition and construction in the five
project areas.
• The Low-Income Housing Fund accounts for the 20% set-aside of tax increment revenues required by the
California Health and Safety Code.
• The Parking Authority Capital Projects Fund accounts for capital improvements made by the Parking
Authority of the City of Huntington Beach.
' • The Capital Improvement Fund accounts for major capital improvements not made by other capital
projects funds or proprietary funds.
• The Pier Rebuilding Fund accounts for the rebuilding of the City's pier.
• The Mello-Roos Assessment District Capital Projects Fund accounts for expenditures made from the
' Community Facilities District bonds.
• The Parking In-Lieu Fund records construction activity from developers who pay fees in-lieu of directly
' providing parking spaces in certain areas of the City.
• The Holly Seacliffe Fund accounts for capital improvements made to the Holly Seacliffe area.
' • The Pier Plaza Fund accounts for capital improvements for the Pier Plaza area.
' • The Water Facilities Fund accounts for surcharges for major improvements to the City's water
infrastructure.
t • The Library Cultural Facilities Fund accounts for the continued costs of the expansion of the City's Library
facilities related to the City's growth.
• The Park Improvement Fund accounts for the remaining funds from the 1970 Park Bond debt service
activity.
CITY OF HUNTINGTON BEACH '
CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET '
SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1996
(IN THOUSANDS)
Low-
Building Redevelopment Income Parking Capital
ASSETS: COPS Agency Housing Authority Improvement
Cash and Investments - 4,956 2,118 - 525
Cash With Fiscal Agent - - - - -
Taxes Receivable - - - - -
Other Receivables - 197 40 - 15
Receivables-O.C.I.P. - - - - -
Unbilled Receivables - - - - -
Advances to Other Funds - - 2,094 - 357 ,
Deposits and Other Assets - - - -
Land Held for Resale(Net) - 17,628 885 - -
Due from Other Funds
TOTAL ASSETS $ - $ 22,781 $ 5,137 $ - $ 897
LIABILITIES AND FUND EQUITY '
LIABILITIES:
Accounts Payable $ - $ 84 - $ - $ 13
Other Accrued Liabilities - - - - -
Deposits - 31 - - 18
Due to Other Funds - 1,600 - - -
Deferred Revenue - - - - 157 '
TOTAL LIABILITIES - 1,715 - - 188
FUND EQUITY:
Reserved Equity:
Land Held for Resale - 17,628 885 - - '
Encumbrances - 510 49 - 134
Long-Term Receivables-O.C. Bankruptcy - - - - -
Long-Term Receivables from Other Funds - - 2,094 - 200 '
Capital Projects - - 100 - -
Totai Reserved Fund Equity - 18,138 3,128 - 334
Unreserved Equity: '
Designated for Future Expenditures - 945 278 - 372
Undesignated - 1,983 1,731 - 3
Total Unreserved Fund Equity - 2,928 2,009 - 375 '
TOTAL FUND EQUITY - 21,066 5,137 - 709
TOTAL LIABILITIES AND FUND EQUITY $ - $ 22,781 $ 5,137 $ - $ 897
1
Page 86
' Mello-Roos Library
Pier Assessment Parking In- Holly Water Cultural Park
' Rebuilding District Lieu Seacliffe Pier Plaza Facilities Facilities Improvement Total 1997 Total 1996
1,689 10 249 8 $ 1,171 53 $ - PRO-,7-7-9-T 13,235
278 - - 3,009 - - - 3,287 269
38 6 1 28 325 802
- - - - - - - - - 2,260
' - - - - - - - -
- 503
2,451 2,57474
- - - - - - - - 50
18,513 18,513
' - - - - 132 - - - 132 29
$ 1,727 $ 288 $ 255 $ 9 $ 4,340 $ - $ 53 $ - $35,487 $ 38,240
$ - $ - $ - $ 1 $ 1,199 $ 15 $ - $ 1,312 $ 138
' - - - 2 19
- - - - - 49 50
1,600 1,781
- - - - = 157',. 180
1 1,201 15 3,120 2,168
- - - - - - - - 18,513 18,513
- - - - 293 - 9 - 995 4,295
- - - - - - - - - 2,260
' - - - - - � 2,294 100- -
100 200
- - - - 293 - 9 - 21,902 25,368
t - - - - 2,846 - - - 4,441 586
1,727 288 255 8 - - 29 - 6,024 10,118
' 1,727 288 255 8 2,846 29 10,465 10,704
1,727 288 255 8 3,139 38 32,367 36,072
$ 1,727 $ 288 $ 255 $ 9 $4,340 $ - $ 53 $ - $35,487 $38,240
' Page 87
CITY OF HUNTINGTON BEACH
CAPITAL PROJECTS FUNDS ,
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES '
FOR THE YEAR ENDING SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR THE YEAR ENDING
SEPTEMBER 30, 1996 '
(IN THOUSANDS)
Low-
Building Redevelopment Income Parking Capital
REVENUES: COPS Agency Housing Authority Improvement
Property Taxes $ - $ - $ - $ - $
Other Taxes - 557 - - -
Licenses and Permits - - - - -
From Use of Money and Property 45 973 99 1 34
From Other Agencies - - - - -
Charges for Current Service - - - - -
Other - - 53 - -
TOTAL REVENUES 45 1,530 152 1 34 t
EXPENDITURES:
Current:
City Attorney - 156 - -
Economic Development - 915 185 - -
Community Services - - - - -
Library Services - - - - -
Public Works - - - - -
Non-Departmental - 5 - -Capital Outlay - 5,491 5 92 142 '
TOTAL EXPENDITURES - 6,567 190 92 142
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES 45 (5,037) (38) (91) (108) '
OTHER FINANCING SOURCES (USES):
Operating Transfers In - 4,625 832 - -
Proceeds of Long-Term Debt - - - - 26
Operating Transfers Out - - (35) - '
TOTAL OTHER FINANCING SOURCES (USES) - 4,626 797 - 26
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER) EXPENDITURES AND OTHER USES 45 (412) 759 (91) (82) '
FUND BALANCE -BEGINNING OF YEAR 2,436 22,096 4,432 302 877
Cumulative Effect of Changes in Accounting Principle - - 224 - -
Prior Period Adjustments (376) (618) (278) (93) (86) ,
FUND BALANCE AS RESTATED 2,060 21,478 4,378 209 791
RESIDUAL EQUITY TRANSFERS:
Residual Equity Transfers In - - - - -
Residual Equity Transfers Out (2,105) - - (118) -
TOTAL RESIDUAL EQUITY TRANSFERS (2,105) - - (118) -
FUND BALANCE- END OF YEAR $ - $ 21,066 $ 5,137 $ - $ 709
t
Page 88
' Mello-Roos Library
Pier Assessment Parking In- Holly Water Cultural Park
Rebuilding District Lieu Seacliffe Pier Plaza Facilities Facilities Improvement Total 1997 Total 1996
' $ = $ = $ $ _ $ _ $ = $ = $ 8 $ 8 $ 14
557 552
6 2 2 - 185 - 195 56
' 330 14 15 - 144 = - 3 1,658 1,523
111 175 286 339
- - - - - - 2,899
' 4 - - - 1 = - - 58 2,194
445 14 21 177 147 185 11 2,762 7,577
= = = 17 = = = - 173 30
1,100 1,953
- - - - - - - - 268
= 147 = 147 =
45 45
- - - - - - - - 5 354
' 136 = - 231 2,525 = - 22 8,644 3,309
136 248 2,570 147 22 10,114 5,914
' 309 14 21 (71) (2,423) - 38 (11) (7,352) 1,663
- - - - 3,008 - - - 8,465 858
- - - - - - - - 26 3,361
' (90) (5) (6) - = = - (136) (1,545)
(90) (5) (6) 3,008 8,355 2,674
' 219 9 21 (77) 586 - 38 (11) 1,003 4,337
1,879 279 234 90 658 2,572 217 36,072 30,902
- - - - - (2,572) - - (2,348) -
' (371) - - (5) (343) = = (90) (2,260) -
1,508 279 234 85 315 127 31,464 30,902
' 2,239 = = - 2,239 864
- - - -
(116) (2,339) (31)
- - - 2,239 - - (116) (100) 833
' $ 1,727 $ 288 $ 255 $ 8 $3,139 $ - $ 38 $ - $32,367 $ 36,072
' Page 89
ENTERPRISE FUNDS account for operations similar to private businesses. The
City's intent is to recover the costs to the general public through user charges or where the
City wishes to periodically determine net income.
' • The Water Utility Fund accounts for the City's water services.
' • The Emerald Cove Housing Fund accounts for the operations of a senior-citizens
apartment complex.
' • The Emergency Fire Medical Fund accounts for the user-fee portion of the City's
paramedic service.
' • The Refuse Collection Fund accounts for the City's refuse collection program.
' • The Cultural Affairs Fund accounts for the operation of the City's Art Center.
t
CITY OF HUNTINGTON BEACH '
ENTERPRISE FUNDS
COMBINING BALANCE SHEET '
SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS '
FOR SEPTEMBER 30, 1996
(IN THOUSANDS)
ASSETS: '
Emerald
Cove Emergency Refuse Cultural
Current Assets: Water UUlity Housing Fire Medical Collection Affalrs Total 1997 Total 1996
Cash and Investments $ 11,643 $ 1,847 $ 144 $ - $ - $13,634 $ 7,388
Accounts Receivable 1,045 - 631 430 - 2,106 1,901
Interest Receivable 35 53 16 - - 104 53
Due from Other Funds 1,277 - - - - 1,277 1,040 '
Inventory 939 - - - - 939 856
Unbilled Receivables 3,508 - - 1,197 - 4,705 3,837
Total Current Assets 18,447 1,900 791 1,627 - 22,765 15,075
Other Assets: '
Cash With Fiscal Agent - 460 - - - 460 457
Investment in Joint Venture 611 - - - - 611 123
Advances to Other Funds 5,897 - - - - 5,897 5,595
Total Other Assets 6,508 460 - - - 6,968 6,175 ,
Plant, Property and Equipment:
Land 391 1,289 - - 759 2,439 2,439
Buildings 2,709 4,102 - - 1,248 8,059 8,059 '
Machinery and Equipment 54,518 - 406 - 20 54,944 54,256
Construction in Progress 7,995 - - - - 7,995 5,859
Subtotal 65,613 5,391 406 - 2,027 73,437 70,613
Less Accumulated Depreciation (32,130) (985) (274) - (56) (33,445) (31,985) '
Total Plant, Property and Equipment 33,483 4,406 132 - 1,971 39,992 38,628
TOTAL ASSETS $ 58,438 $ 6,766 $ 923 $1,627 $1,971 $69,725 $ 59,878
LIABILITIES AND FUND EQUITY
LIABILITIES: '
Current Liabilities:
Accounts Payable $ 1,555 $ 25 $ 70 $ 679 $ 7 $ 2,336 $ 1,561
Accrued Payroll 94 - 26 4 9 133 190 '
Accrued Interest - 31 - - - 31 31
Deposits 2,450 18 - - - 2,468 2,487
Due to Other Funds - - - 954 400 1,354 1,381
Current Portion of Long-Term Debt 32 90 - - - 122 85 '
Total Current Liabilities 4,131 164 96 1,637 416 6,444 5,735
Long-Term Liabilities:
Certificates of Participation - 5,300 - - - 5,300 5,390
Compensated Absences 235 - 48 27 12 322 233 '
Leases Payable 136 - - - - 136 -
Advances from Other Funds - 243 - - - 243 243
Less Current Portion (32) (90) - - - (122) (85)
Total Long-Term Liabilities 339 5,453 48 27 12 5,879 5,781 '
TOTAL LIABILITIES 4,470 5,617 144 1,664 428 12,323 11,516
FUND EQUITY:
Contributed Capital 21,387 1,288 311 - 1,957 24,943 41,942 '
Retained Earnings(Accumulated Deficits): 32,581 (139) 468 (37) (414) 32,459 6,420
TOTAL FUND EQUITY 53,968 1,149 779 (37) 1,643 57,402 48,362
TOTAL LIABILITIES AND FUND EQUITY $ 58,438 $ 6,766 $ 923 $1,627 $1,971 $69,725 $ 59,878
1
Page 90 '
CITY OF HUNTINGTON BEACH
' ENTERPRISE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
' CHANGES IN RETAINED EARNINGS (ACCUMULATED DEFICIT)
FOR THE YEAR ENDING SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS
' FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996
(IN THOUSANDS)
' Emerald
Cove Emergency Refuse Cultural
OPERATING REVENUES: Water Utility Housing Fire Medical Collection Affairs Total 1997 Total 1996
' Sales $ 19,758 $ $ $ - $ - $19,758 $19,371
Rentals 619 619 953
Fees for Service 357 3,226 9,061 12,644 11,273
Other 1,755 2 3 18 132 1,910 502
' TOTAL OPERATING REVENUES 21,870 621 3,229 9,079 132 34,931 32,099
OPERATING EXPENSES:
Water Purchases 4,822 - - - - 4,822 4,203
Supplies and Operations 3,584 333 3,265 8,693 375 16,250 16,323
' Engineering 460 _ - _ _ 460 432
Production 4,167 4,167 3,343
Maintenance 1,234 - - - - 1,234 1,243
Water Meters 735 - - - - 735 1,240
' Non-Departmental 2,712 - _ _ 2,712 2,028
City Attorney 306 306
Water Quality 246 - - - - 246 244
In-Lieu Taxes to General Fund 2,060 - - - - 2,060 2,809
' Depreciation 1,341 82 29 - 28 1,480 1,490
TOTAL OPERATING EXPENSES 21,667 415 3,294 8,693 403 34,472 33,355
OPERATING INCOME(LOSS) 203 206 (65) 386 (271) 459 (1,256)
NON-OPERATING REVENUES(EXPENSES):
Interest Income 1,404 141 19 - 1,564 460
Joint Venture Income 303 303 144
Interest Expense - (376) - - - (376) (371)
' TOTAL NON-OPERATING REVENUES(EXPENSES) 1,707 (235) 19 - - 1,491 233
NET INCOME(LOSS)BEFORE OPERATING
TRANSFERS 1,910 (29) (46) 386 (271) 1,950 (1,023)
OPERATING TRANSFERS:
' Operating Transfers In - 35 81 116 116
Operating Transfers Out (30) (30) (128)
TOTAL OPERATING TRANSFERS (30) 35 81 86 (12)
NET INCOME(LOSS) 1,880 6 (46) 386 (190) 2,036 (1,035)
' Add Depreciation on Contributed Assets 932 - - - 25 957 -
INCREASE(DECREASE)IN RETAINED EARNINGS 2,812 6 (46) 386 (165) 2,993 (1,035)
RETAINED EARNINGS(ACCUMULATED DEFICITS)-
BEGINNING OF YEAR 6,748 (145) 514 (423) (274) 6,420 9,548
' Cumulative Effect of Changes in Accounting Principles(Note 20) 23,021 - - - 25 23,046 -
RETAINED EARNINGS(ACCUMULATED DEFICIT)-
BEGINNING OF YEAR AS RESTATED 29,769 (145) 514 (423) (249) 29,466 9,548
' RESIDUAL EQUITY TRANSFERS Residual Equity Transfers Out to Other Funds - - - - - - (2,093)
RETAINED EARNINGS(ACCUMULATED DEFICIT)-
END OF YEAR $ 32,581 $ (139) $ 468 $ (37) $ (414) $32,459 $ 6,420
t
' Page 91
CITY OF HUNTINGTON BEACH '
ENTERPRISE FUNDS
COMBINING STATEMENT OF CASH FLOWS '
FOR THE YEAR ENDING SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS '
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996
(IN THOUSANDS)
Emerald
Cove Emergency Refuse Cultural
CASH FLOWS FROM OPERATING ACTIVITIES Water Utility Housing Fire Medical Collection Affairs Total 1997 Total 1996 '
OPERATING INCOME(LOSS) $ 203 $ 206 $ (65) $ 386 $ (271) $ 459 $ (1,256)
Adjustments Required to Reconcile Operating Income(Loss)to Net
Cash Provided (Used)by Operating Activities:
Depreciation 1,341 82 29 - 28 1,480 1,490
Decrease(Increase)in Accounts Receivable (401) - 285 (191) 101 (206) 1,294 t
Decrease(Increase)in Interest Receivable (6) (28) (16) - - (50) 64
Decrease(Increase)in Unbilled Receivables (710) - - (158) - (868) (1,614)
Decrease(Increase)in Advances to Other Funds (302) - - - - (302) (311)
Decrease(Increase)in Due from Other Funds (276) 39 - - - (237) 5,908 '
Decrease(Increase)in Inventory (83) - - - - (83) (180)
Increase(Decrease)in Accounts Payable 749 25 9 (3) (5) 775 (199)
Increase(Decrease)in Accrued Payroll 21 - (44) (28) (6) (57) 107
Increase(Decrease)in Due to Other Funds - - (66) (33) 72 (27) 185 '
Increase(Decrease)in Deposits (18) (1) - - - (19) 142
Increase(Decrease)in Compensated Absences 2 - 48 27 - 77 (13)
TOTAL ADJUSTMENTS 317 117 245 (386) 190 483 6,643 '
NET CASH PROVIDED(USED) BY OPERATING ACTIVITIES 520 323 180 - (81) 942 5,387
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Operating Transfers In From Other Funds - 35 - - 81 116 116
Operating Transfers Out to Other Funds (30) - - - - (30) (128) ,
Residual Equity Transfers Out - - - - - - (307)
TOTAL CASH FLOWS PROVIDED(USED)BY NON-CAPITAL
FINANCING ACTIVITIES (30) 35 - - 81 86 (319)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: '
Net Contributions from Water Customers 6,747 - - - - 6,747 -
Interest Paid - (376) - - - (376) (371)
Acquisition and Construction of Capital Assets (2,226) - (55) - - (2,281) (369)
Proceeds of Sale of Plant,Property and Equipment - - - - - 115 '
Principal Paid on Long-Term Debt - (90) - - - (90) (85)
TOTAL CASH PROVIDED(USED)BY CAPITAL AND RELATED
FINANCING ACTIVITIES 4,521 (466) (55) - - 4,000 (710)
CASH FLOWS FROM INVESTING ACTIVITY: '
Joint Venture Cash Received(Paid) (343) - - - - (343) 144
Interest on Investments 1,404 141 19 - - 1,564 460
TOTAL CASH FLOWS PROVIDED(USED)BY INVESTING ACTIVITI 1,061 141 19 - - 1,221 604
EQUIVALENTS 6,072 33 144 - - 6,249 4,962 '
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 5,571 2,274 - - - 7,845 2,883
CASH AND CASH EQUIVALENTS-END OF YEAR $ 11,643 $ 2,307 $ 144 $ - $ - $14,094 $ 7,845
NON-CASH ACTIVITIES: '
Plant,Property,and Equipment Contributions/Transfers $ 957 $ - $ - $ - $ - $ 957 $ (1,774)
Joint Venture Activity $ 158 $ - $ - $ - $ - $158 $144
Acquisition of Asset Through Capital Lease $ 136 $ - $ - $ - $ - $136 $ -
1
Page 92 '
1
t
INTERNAL SERVICE FUNDS account for goods and services provided by one
' City department to another on a cost-reimbursement basis.
• The Insurance Reserve Fund accounts for the City's self-insurance activities (liability,
thealth and workers' compensation).
' • The Equipment Replacement Fund accounts for the purchase, operation and
replacement of vehicles and equipment leased to City departments.
1
1
1
CITY OF-HUNTINGTON BEACH '
INTERNAL SERVICE FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30, 1997 '
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1996
(IN THOUSANDS) '
ASSETS:
Insurance Equipment
Current Assets: Reserve Replacement Total 1997 Total 1996 '
Cash and Investments $ - $2,359 $ 2,359 $ 3,032
Prepaid Insurance 1,800 - 1,800 1,079
Due from Other Funds 1,600 202 1,802 1,643 '
Other Receivables 32 53 85 105
Total Current Assets 3,432 2,614 6,046 5,859
Other Assets:
Cash With Fiscal Agent - 2,657 2,657 5 '
Total Other Assets - 2,657 2,657 5
Plant, Property and Equipment:
Machinery and Equipment - 36,652 36,652 35,092 '
Construction in Process - 2,826 2,826 -
Subtotal - 39,478 39,478 35,092
Less Accumulated Depreciation - (25,327) (25,327) (23,523) '
Total Plant, Property and Equipment - 14,151 14,151 11,569
TOTAL ASSETS $ 3,432 $ 19,422 $ 22,854 $ 17,433
LIABILITIES AND FUND EQUITY '
LIABILITIES:
Current Liabilities:
Accounts Payable $ 318 $ 159 $ 477 $ 459 '
Accrued Payroll 10 - 10 12
Due to Other Funds 202 - 202 242
Accrued Interest - 8 8 - '
Current Portion of Long-Term Debt 4,514 245 4,759 5,447
Total Current Liabilities 5,044 412 5,456 6,160
Long-Term Liabilities: '
Leases Payable - 857 857 896
Workers'Compensation Claims 5,537 - 5,537 5,378
Health Claims 157 - 157 177 '
General Liability Claims 6,067 - 6,067 5,817
Compensated Absences 38 - 38 33
Less Current Portion (4,514) (245) (4,759) (5,447) '
Total Long-Term Liabilities 7,285 612 7,897 6,854
TOTAL LIABILITIES 12,329 1,024 13,353 13,014
FUND EQUITY:
Contributed Capital - 4,821 4,821 18,801 ,
Retained Earnings(Accumulated Deficits):
Reserved for Capital Projects - 2,690 2,690 -
Unreserved (8,897) 10,887 1,990 (14,382) '
Total Retained Earnings (8,897) 13,577 4,680 (14,382)
TOTAL FUND EQUITY (8,897) 18,398 9,501 4,419
TOTAL LIABILITIES AND FUND EQUITY $ 3,432 $ 19,422 $ 22,854 $ 17,433 '
Page 93 '
' CITY OF HUNTINGTON BEACH
INTERNAL SERVICE FUNDS
' COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN ACCUMULATED DEFICITS
' FOR THE YEAR ENDING SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996
' (IN THOUSANDS)
Insurance Equipment
OPERATING REVENUES: Reserve Replacement Total 1997 Total 1996
Fees for Service $ 9,348 $ 2,303 $ 11,651 $ 9,921
Other 325 116 441 145
TOTAL OPERATING REVENUES 9,673 2,419 12,092 10,066
OPERATING EXPENSES:
Supplies and Operating 770 307 1,077 2,435
' Employee Medical Claims and Insurance 4,410 - 4,410 3,214
Liability Claims and Insurance 1,440 1,440 2,808
Workers'Compensation Claims and Insurance 2,917 - 2,917 1,904
Depreciation - 2,197 2,197 2,532
' TOTAL OPERATING EXPENSES 9,537 2,504 12,041 12,893
OPERATING INCOME(LOSS) 136 (85) 51 (2,827)
NON-OPERATING REVENUES (EXPENSES):
t Interest Income 33 260 293 337
Interest Expense (81) (81) (81)
Gain on Disposal of Assets - 55 55 -
Joint Venture Income(Loss) - - - 227
TOTAL NON-OPERATING REVENUES (EXPENSES) 33 234 267 483
NET INCOME(LOSS) BEFORE OPERATING 169 149 318 (2,344)
' Operating Transfers In - 3,900 3,900 525
Operating Transfers Out (86) (86)
NET INCOME (LOSS) 169 3,963 4,132 (1,819)
Add Depreciation on Contributed Assets - 1,501 1,501 -
' INCREASE (DECREASE) IN RETAINED EARNINGS 169 5,464 5,633 (1,819)
ACCUMULATED DEFICIT-BEGINNING OF YEAR (9,066) (5,316) (14,382) (12,563)
Cumulative Effect of Changes in Accounting Principles - 13,429 13,429 -
RETAINED EARNINGS (ACCUMULATED DEFICIT)AS
RESTATED (9,066) 8,113 (953) (12,563)
RETAINED EARNINGS(ACCUMULATED DEFICIT) -END
' OF YEAR $ (8,897) $ 13,577 $ 4,680 $ (14,382)
' Page 94
CITY OF HUNTINGTON BEACH t
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDING SEPTEMBER 30, 1997 '
WITH COMPARATIVE TOTALS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996 '
(IN THOUSANDS)
Insurance Equipment
CASH FLOWS FROM OPERATING ACTIVITIES: Reserve Replacement Total 1997 Total 1996 '
OPERATING INCOME(LOSS) $ 136 $ (85) $ 51 $ (2,827)
ADJUSTMENTS TO RECONCILE OPERATING INCOME
(LOSS)TO NET CASH PROVIDED(USED) BY
OPERATING ACTIVITIES:
Depreciation - 2,197 2,197 2,532
Decrease (Increase) in Prepaid Insurance (721) - (721) 564
Decrease (Increase) in Due from Other Funds - (159) (159) 34
Decrease(Increase) in Other Receivables 17 3 20 -
Increase (Decrease) in Accounts Payable 183 (165) 18 (131)
Increase (Decrease) in Due to Other Funds (40) - (40) 99 '
Increase (Decrease) in Claims Payable 389 - 389 106
Increase (Decrease) in Leases Payable - (39) (39) 674
Increase (Decrease) in Compensated Absences 5 - 5 2 t
Increase (Decrease) in Accrued Payroll (2) - (2) 1
Increase (Decrease) in Accrued Interest - 8 8 (27)
TOTAL ADJUSTMENTS (169) 1,845 1,676 4,003 '
TOTAL CASH FLOWS PROVIDED (USED) BY
OPERATING ACTIVITIES (33) 1,760 1,727 1,176
CASH FLOWS FROM NON-CAPITAL FINANCING '
ACTIVITIES:
Operating Transfers In From Other Funds - 3,900 3,900 525
Operating Transfers Out to Other Funds - (86) (86) - '
TOTAL CASH FLOWS PROVIDED(USED) BY NON-
CAPITAL FINANCING ACTIVITIES - 3,814 3,814 525
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES: '
Interest Paid - (81) (81) (81)
Acquisition and Construction of Capital Assets - (3,829) (3,829) (2,169)
Principal Paid on Long-Term Debt - - - (1,545) '
TOTAL CASH USED IN CAPITAL AND RELATED
FINANCING ACTIVITIES - (3,910) (3,910) (3,772)
CASH FLOWS FROM INVESTING ACTIVITIES: '
Joint Venture Cash Received - 55 55 -
Interest on Investments 33 260 293 337
TOTAL CASH FLOWS PROVIDED BY INVESTING '
ACTIVITY 33 315 348 337
NET INCREASE(DECREASE) IN CASH AND CASH
EQUIVALENTS - 1,979 1,979 (1,734) '
CASH AND CASH EQUIVALENTS -BEGINNING OF
YEAR - 3,037 3,037 4,771
CASH AND CASH EQUIVALENTS-END OF YEAR $ - $ 5,016 $ 5,016 $ 3,037
NON-CASH ACTIVITIES: '
Equipment Contributions $ - $ 950 $ 950 $ 232
Joint-Venture Activity $ 370 $ - $ 370 $ 227
Acquisition of Asset Through Capital Lease $ - $ 404 $ 404 $ - '
Page 95 '
t
■ TRUST AND AGENCY FUNDS account for assets held by the City as an agent
■ for individuals, private organizations or other governments.
' Agency Funds:
t • The Employee Deferred Compensation Fund accounts for moneys held for employees
under the City's section 457 deferred compensation plan.
' • The General Deposit Fund accounts for the deposit of general moneys held by the City for
private individuals and businesses.
• The Mello-Roos Assessment District Fund accounts for the debt service requirements of
the Mello-Roos Assessment District bonds.
• The Retiree Medical Insurance Fund accounts for the City's medical retirement program.
• The Business Improvement District accounts for the activities of the Huntington Beach
Auto Business Improvement District.
' . The Central Net Fund accounts for the activity of the Central Net Operations Authority.
' Trust Fund:
• The Retirement Supplement Fund accounts for the supplemental retirement plan provided
to retirees.
r
CITY OF HUNTINGTON BEACH '
TRUST AND AGENCY FUNDS
COMBINING BALANCE SHEET '
SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1996 '
(IN THOUSANDS)
Pension '
Agency Trust
ASSETS: Funds Fund Total1997 Total1996
Cash and Investments $ 4,766 $ 2,288 $ 7,054 $ 4,654
Cash With Fiscal Agent 795 - 795 37,979
Interest Receivable 23 46 69 32
Due from Other Funds 23 - 23 13
Notes Receivable,Net of Allowance for Doubtful Accounts 618 - 618 873 ,
Other Assets 195 - 195 209
Long-Term Claims OCIP - - - 485
TOTAL ASSETS $ 6,420 $ 2,334 $ 8,754 $ 44,245 '
LIABILITIES:
Deposits Payable $ 2,121 $ - $ 2,121 $ 2,257 '
Notes Payable 21 - 21 22
Due to Other Funds 23 23 120
Funds Held for Others 3,593 - 3,593 3,769
Deferred Compensation Payable 662 - 662 38,197 '
TOTAL LIABILITIES 6,420 - 6,420 44,365
FUND BALANCES
Reserved for Pension Benefits - 2,334 2,334 (120) 1
TOTAL LIABILITIES AND FUND BALANCES $ 6,420 $ 2,334 $ 8,754 $ 44,245
CITY OF HUNTINGTON BEACH
TOTAL AGENCY FUNDS
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDING SEPTEMBER 30, 1997 '
(IN THOUSANDS)
October September 30, '
ASSETS: 1, 1996 Additions Deductions 1997
Cash and Investments $ 4,654 $ 3,132 $ (3,020) $ 4,766
Cash With Fiscal Agent 37,979 7,400 (44,584) 795 '
Interest Receivable 32 241 (250) 23
Notes Receivable,Net of Allowance for Doubtful Accounts 873 61 (316) 618
Due From Other Funds 13 23 (13) 23
Other Assets 209 431 (445) 195
Long-Term Claims OCIP 485 - (485) -
TOTAL ASSETS $44,245 $ 11,288 $ (49,113) $ 6,420
LIABILITIES:
Deposits Payable 2,257 2,751 (2,887) 2,121
Notes Payable 22 - (1) 21 '
Due to Other Funds - 23 - 23
Funds Held for Others 3,769 990 (1,166) 3,593
Deferred Compensation Payable 38,197 7,547 (45,082) 662
TOTAL LIABILITIES $44,245 $ 11,311 $ (49,136) $ 6,420 '
Page 96 '
' CITY OF HUNTINGTON BEACH
' AGENCY FUNDS
STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDING SEPTEMBER 30, 1997
' (IN THOUSANDS)
EMPLOYEE DEFERRED COMPENSATION FUND
October September 30,
ASSETS: 1, 1996 Additions Deductions 1997
' Cash and Investments $ 59 $ 371 $ (396) $ 34
Cash With Fiscal Agent 37,264 7,102 (44,366) -
Interest Receivable - 7 (5) 2
' Notes Receivable,Net of Allowance for Doubtful Accounts 873 61 (316) 618
Other Assets 23 6 29
TOTAL ASSETS $38,219 $ 7,547 $ (45,083) $ 683
LIABILITIES:
Notes Payable $ 22 $ - $ (1) $ 21
' Deferred Compensation Payable 38,197 7,547 (45,082) 662
TOTAL LIABILITIES $38,219 $ 7,547 $ (45,083) $ 683
GENERAL DEPOSIT FUND
' October September 30,
ASSETS: 1, 1996 Additions Deductions 1997
' Cash and Investments $ 485 $ 137 $ (168) $ 454
LIABILITIES:
Deposits Payable $ 485 $ 137 $ (168) $ 454
MELLO-ROOS ASSESSMENT DISTRICT FUND
October September 30,
ASSETS: 1, 1996 Additions Deductions 1997 Cash and Investments $ 14 $ 253 $ (267) $ -
Cash With Fiscal Agent 715 298 (218) 795
Other Assets 27 140 (27) 140
' TOTAL ASSETS $ 756 $ 691 $ (512) $ 935
LIABILITIES:
' Deposit Payable $ 756 $ 691 $ (535) $ 912
Due to Other Funds 23 23
TOTAL LIABILITIES $ 756 $ 714 $ (535) $ 935
1
Page 97
CITY OF HUNTINGTON BEACH '
AGENCYFUNDS
STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES '
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(CONTINUED)
(IN THOUSANDS) '
RETIREE MEDICAL INSURANCE FUND
October September 30, '
ASSETS: 1, 1996 Additions Deductions 1997
Cash and Investments $ 3,298 $ 733 $ (482) $ 3,549
Interest Receivable 32 234 (245) 21 '
Due from Other Funds 13 23 (13) 23
Long-Term Claims OCIP 426 - (426) -
TOTAL ASSETS $ 3,769 $ 990 $ (1,166) $ 3,593 '
LIABILITIES:
Funds Held for Others $ 3,769 $ 990 $ (1,166) $ 3,593 '
BUSINESS IMPROVEMENT DISTRICT FUND ,
October September 30, '
ASSETS: 1, 1996 Additions Deductions 1997
Cash and Investments $ 5 $ 61 $ (62) $ 4
Other Assets 15 58 (62) 11 '
TOTAL ASSETS $ 20 $ 119 $ (124) $ 15
LIABILITIES:
Deposits Payable $ 20 $ 119 $ (124) $ 15
CENTRAL NET FUND '
October September 30,
ASSETS: 1, 1996 Additions Deductions 1997
Cash and Investments 793 1,577 (1,645) 725 '
Other Assets 144 227 (356) 15
Long-Term Claims OCIP 59 - (59) -
TOTAL ASSETS $ 996 $ 1,804 $ (2,060) $ 740 '
LIABILITIES:
Deposits Payable $ 996 $ 1,804 $ (2,060) $ 740
Page 98 '
CITY OF HUNTINGTON BEACH
RETIREMENT SUPPLEMENT TRUST FUND
STATEMENT OF PLAN NET ASSETS
SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1996
' (IN THOUSANDS)
TOTAL TOTAL
ASSETS: 1997 1996
Cash and Investments $ 2,288 $ =
Interest Receivable 46
Total Assets $ 2,334 $ -
' LIABILITIES AND FUND BALANCES:
Due to Other Funds $ - $ 120
Fund Balance Reserved for Pension Benefits 2,334 (120)
' Total $ 2,334 $ -
STATEMENT OF CHANGES IN PLAN
' NET ASSETS
FOR THE YEAR ENDING SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR THE YEAR ENDING
' SEPTEMBER 30, 1996
(IN THOUSANDS)
TOTAL TOTAL
Additions: 1997 1996
Employer Contributions $ 818 $ 793
' Transfers In 2,204 -
Interest Income 82
Total Additions $ 3,104 $ 793
Deductions:
Benefits $ 646 $ 614
' Administration 4 10
Total Deductions 650 624
Net Increase in Plan Assets 2,454
Fund (Deficit) - Beginning of Year (120) (289)
Fund Balance (Deficit) Reserved for
Employer's Pension Benefits - End of Year $ 2,334 $ (120)
1
1
Page 99
1
1
1
1
1
The GENERAL FIXED ASSETS ACCOUNT GROUP records plant,
property and equipment not recorded in proprietary funds.
1
i
1
1
1
1
1
i
1
1
1
CITY OF HUNTINGTON BEACH ,
SCHEDULE OF GENERAL FIXED ASSETS
SEPTEMBER 30, 1997 '
(IN THOUSANDS)
GENERAL FIXED ASSETS: '
Land $ 69,460
Buildings 59,889
Improvements Other Than Buildings 2,162 '
Construction In Progress 4,234
Joint Ventures 988
TOTAL INVESTMENT IN GENERAL FIXED
ASSETS $136,733 '
INVESTMENTS IN GENERAL FIXED
ASSETS FROM:
General Fund $ 8,090 ,
Special Revenue Funds 25,664
Capital Projects Funds 80,733
Donations 21,258 '
Joint Ventures 988
TOTAL INVESTMENTS IN GENERAL FIXED
ASSETS $136,733 '
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY '
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(IN THOUSANDS) '
October 1, September 30,
1996 Additions Retirements 1997
Fire $ 3,024 $ 161 $ - $ 3,185 '
Police 701 - - 701
Community Services 84,680 181 (2,070) 82,791
Public Works 4,931 1,538 (489) 5,980 '
Library Services 13,213 33 - 13,246
Non-Departmental 30,210 620 - 30,830
TOTAL $ 136,759 $ 2,533 $ (2,559) $ 136,733 '
SCHEDULE OF GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY '
SEPTEMBER 30, 1997
(IN THOUSANDS) '
Construction in Joint
Land Buildings Improvements Progress Ventures Total
Fire $ - $ 2,820 $ - $ - $ 365 $ 3,185
Police - 643 58 - - 701 '
Community Services 49,891 29,984 2,104 812 - 82,791
Public works - 2,726 - 3,254 - 5,980
Library - 13,800 - 33 - 13,833 '
Non-Departmental 19,569 9,916 - 135 623 30,243
TOTAL $ 69,460 $59,889 $ 2,162 $ 4,234 $ 988 $ 136,733
1
Page 100 '
1
1
' The GENERAL LONG-TERM DEBT ACCOUNT GROUP accounts for
long-term debt not recorded in proprietary or trust funds.
1
t
t
CITY OF HUNTINGTON BEACH '
SCHEDULE OF CHANGES IN GENERAL LONG-TERM DEBT '
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(IN THOUSANDS)
1
October 1, September 30, '
1996 Additions Retirements 1997
Public Facilities Corporation Leasehold Mortgage Bonds $ 385 $ - $ (385) $ -
Civic Improvement Corporation Refunding Certificates of
Participation (Civic Center)-1993 19,865 - (585) 19,280 '
Civic Improvement Corporation Refunding Certificates of
Participation(Police Administration Building)-1993 15,035 - (355) 14,680
Compensated Absences 5,014 1,102 (1,139) 4,977 '
Advances from Other Funds 71,872 1,907 (6,319) 67,460
1992 Public Financing Authority Revenue Bonds 31,840 - (480) 31,360
Notes Payable 606 - (52) 554
Leases Payable 79 - (79) - ,
Reservoir Hill Assessment Bonds 1,200 - (55) 1,145
1997 Public Financing Authority Leasehold Revenue Bonds - 8,070 - 8,070
Pension Benefit Obligation - 5,592 - 5,592 '
Energy Financing Loan 308 - - 308
Total General Long-Term Debt $ 146,204 $ 16,671 $ (9,449) $ 153,426
1
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Page 101
STATISTICAL SECTION
CITY OF HUNTINGTON BEACH
GOVERNMENTAL FUND EXPENDITURES
BY FUNCTION AND ACTIVITY ,
LAST TEN FISCAL YEARS
(IN THOUSANDS)
City City City Administrative Community Economic '
Council Administrator Treasurer City Attorney City Clerk Services Development Fire Police Development
1987-88 $ 130 $ 1,106 $ 290 $ 973 $ 245 $ 3,287 $ 4,187 $ 11,840 $ 22,370 $ -
1988-89 156 1,304 322 1,042 293 3,409 4,393 12,722 23,565 - '
1989-90 215 853 438 1,308 330 3,835 5,404 14,148 26,369 -
1990-91 197 1,564 700 1,340 457 4,187 5,306 14,169 28,148 -
1991-92 297 1,569 727 1,563 402 4,042 6,628 13,173 30,417 -
1992-93 213 1,480 709 1,807 449 4,108 6,097 16,505 32,355 - '
•1993-94 282 2,691 897 2,168 517 5,140 10,406 19,502 40,535
1994-95 224 1,672 709 1,866 485 4,200 3,252 15,304 32,795 2,637
1995-96 224 2,140 743 1,466 488 4,181 3,252 14,747 32,650 3,010
1996-97 233 1,856 781 1,738 470 4,208 3,694 15,806 33,413 2,142 t
Source:Administrative Services Department-City of Huntington Beach'
GOVERNMENTAL FUND REVENUES BY SOURCE
LAST TEN FISCAL YEARS '
(IN THOUSANDS)
Use of
Licenses Money Charges for '
Fiscal Property and Fines and and From Other Current
Year Tax Other Taxes Permits Forfeitures Property Agencies Service Other Total
1987-88 $24,275 $ 30,207 $ 4,348 $ 2,338 $ 8,365 $ 15,492 $ 3,208 $ 1,410 $ 89,643 '
1988-89 26,970 30,736 5,773 2,458 13,884 21,721 5,886 2,731 110,159
1989-90 30,460 32,679 3,944 2,256 14,140 15,211 7,267 1,019 106,976
1990-91 33,697 32,092 3,629 1,904 11,854 27,243 8,341 2,012 120,772
1991-92 35,376 35,069 4,236 1,324 19,451 21,850 4,699 3,192 125,197 '
1992-93 33,163 36,332 4,846 1,354 11,382 19,334 6,453 2,493 115,357
`1993-94 32,545 46,194 6,579 1,894 17,303 25,894 9,528 6,221 146,158
1994-95 25,265 38,259 5,978 2,134 11,704 19,941 8,706 1,071 113,058
1995-96 29,320 39,879 6,567 2,134 14,291 18,171 13,129 3.579 127,070 '
1996-97 29,341 42,203 8,121 2,707 12,971 19,810 10,448 743 126,344
Source:Administrative Services Department-City of Huntington Beach'
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(IN THOUSANDS)
SECURED TAXES UNSECURED TAXES '
DELINQUENCY
TOTAL LEVY TOTAL COLLECTIONS AMOUNT PERCENT TOTALLEVY TOTAL COLLECTIONS AMOUNT PERCENT
1987-88 $16,055 $ 15,419 $ 500 3.11% $ 1,250 $ 1,180 $ 46 3.68%
1988-89 16,963 16,346 493 2.91% 1,287 1,234 37 2.87%
1989-90 17,283 16,654 500 2.89% 1,524 1,421 71 4.66% '
1990-91 18,764 17,827 747 3.98% 1,509 1,377 62 4.11%
1991-92 20,171 18,948 899 4.46% 1,646 1,525 63 3.83%
1992-93 19,060 17,847 853 4.48% 1,542 1,205 30 1.95%
1993-94' 16,612 15,632 572 3.44% 1,205 1,106 56 4.65% '
1994-95 16,781 16,300 481 2.87% 1,231 1,299 69 5.61%
1995-96 16.272 16,100 647 3.86% 1,165 1,138 27 2.32%
1996-97 16,722 16,401 320 1.91% 1,102 1,085 17 1.60%
RESERVOIR HILL MELLO-ROOS
1989-90 $ 214 $ 211 $ 3 1.40% '
1990-91 168 163 4 2.38%
1991-92 170 167 3 1.76% $ 264 $ 236 $ 27 10.23%
1992-93 191 187 3 1.57% 264 245 19 7.20%
*1993-94 180 175 4 2.22% 264 181 83 31.44%
1994-95 187 183 4 2.14% 264 258 6 2.27%
1995-96 186 176 9 5.00% 264 239 25 9.47%
1996-97 182 179 3 1.59% 264 251 13 4.94%
Fiscal Year 1993-94 is a fifteen month fiscal year.
Source:County of Orange Auditor Controller's Office
Note-Delinquency amount does not always equal levy amount minus collections
amount since there are always amounts collected from prior years
Page 102
1
Community Library Public Non- Capital Debt
Services Services Works Departmental Outlay Service Total
' $ 6,954 $ - $16,205 $ 7,153 $ 10,206 $ 5,243 $ 90,189
7,595 16,893 7,088 42,462 15,177 136,421
8,307 18,428 7,955 20,622 10,626 118,838
9,127 - 20,275 7,052 24,076 11,895 128,493
9,420 - 15,889 11,255 39,069 48,643 183,094
' 7,228 2,775 16,633 21,488 17,328 9,397 138,572
9,892 3,513 20,802 10,787_ 22,228 18,699 168,059
7,064 2,921 16,714 9,953 12,958 11,933 124,687
7,535 2,951 16,297 9,399 9,823 14,227 123,133
' 7,301 3,034 17,159 9,867 13,833 12,529 128,064
1
' Page 103
CITY OF HUNTINGTON BEACH
ASSESSED AND ACTUAL VALUATION '
OF ALL TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(IN THOUSANDS) ,
Estimated Full
Fiscal Common Total Assessed Market Percent '
Year Property Public Utilities Total Secured Unsecured Valuation Valuation Increase
1987-88 $ 7,457,614 $ 487,793 $7,945,407 $436,502 $ 8,381,909 $8,381,909 N/A
1988-89 8,116,790 3,317 8,120,107 460,095 8,580,202 8,580,202 2.37%
1989-90 9,030,107 3,298 9,033,405 717,652 9,751,057 9,751,057 13.65% ,
1990-91 9,979,107 3,324 9,982,431 536,847 10,519,278 10,519.278 7.88%
1991-92 10,639,970 10,011 10,649,981 678,150 11,328,131 11,328,131 7.69%
1992-93 11,125,356 2,311 11,127,667 758,178 11,885,845 11,885,845 4.92%
1993-94 11,313,256 1,964 11,315,220 560,665 11,875,885 11,875,885 -0.08%
1994-95 11,712,153 2,151 11,714,304 599,842 12,314,146 12,314,146 3.69% ,
1995-96 11,817,571 2,218 11,819,789 538,559 12,358,348 12,358,348 0.36%
1996-97 11,761,075 2,129 11,763,204 542,084 12,305,288 12,305,288 -0.43%
Source:Administrative Services Department-City of Huntington Beach'
PROPERTY TAX RATES
ALL DIRECT AND
OVERLAPPING GOVERNMENTS
TAX RATE 04 001
LARGEST AREA IN CITY
School Metro Water ,
Year Basic Levy City Orange County Districts District Others Total
1987-88 1.00000 0.05490 0.00027 0.09514 0.01120 0.00638 1.16789
1988-89 1.00000 0.05470 0.00022 0.09470 0.01100 0.00321 1.16383 '
1989-90 1.00000 0.05419 0.00022 0.01004 0.01210 0.00029 1.07684
1990-91 1.00000 0.05406 0.00110 0.00841 0.00970 0.00015 1.07342
1991-92 1.00000 0.05339 0.00098 0.00482 0.00890 0.00012 1.06821
1992-93 1.00000 0.05325 0.00087 0.00201 0.00890 0.00013 1.06516 '
1993-94 1.00000 0.05320 0.00081 0.00227 0.00890 0.00019 1.06537
1994-95 1.00000 0.04930 0.00078 0.00046 0.00890 0.00019 1.05963
1995-96 1.00000 0.04930 0.00050 0.00033 0.00890 0.00018 1.05921
1996-97 1.00000 0.04930 0.00012 - 0.00890 - 1.05832 '
Note-Rates are per$100 of assessed valuation
Source-County of Orange
GENERAL OBLIGATION ,
BONDED DEBT RATIOS
LAST TEN FISCAL YEARS
Percent of Debt Service
General Assessed Debt to Total Debt General Fund to Total '
Bonded Debt Market Value Assessed Bonded Debt Principal Interest Service Expenditures General Fund
(000s) (000s) Value Population Per Capita (000s) (000s) (000s) (000s) Expenditures
1987-88 $2,590 $8,381,909 0.031 187,740 $ 14 $ 295 $ 175 $ 470 $ 71,232 0.66%
1988-89 $2,280 $8,580,202 0.027 188,701 $ 12 $ 310 $ 155 $ 465 $ 75,593 0.62%
1989-90 $1,975 $9,751,057 0.020 188,701 $ 10 $ 305 $ 139 $ 444 $ 83,616 0.53% '
1990-91 $1,625 $10,519,278 0.015 181,155 $ 9 $ 350 $ 118 $ 468 $ 88,079 0.53%
1991-92 $1,255 $11,328,131 0.011 182,353 $ 7 $ 370 $ 98 $ 468 $ 91,457 0.51%
1992-93 $ 860 $11,885,845 0.007 186,867 $ 5 $ 395 $ 75 $ 470 $ 91,650 0.51%
1993-94 $ 445 $11,875,885 0.004 189,159 $ 2 $ 415 $ 52 $ 467 $ 115,757 0.40% '
1994-95 $ - $12,314,146 0.000 186,587 $ - $ 445 $ 13 $ 458 $ 92,467 0.00%
1995-96 $ - $12,358,348 0.000 187,180 $ - $ - $ - $ - $ 92,211 0.00%
1996-97 $ - $12,305,288 0.000 188,518 $ - $ - $ - $ - $ 96,165 0.00%
Source-AdministrativeServices Department,City of Huntington Beach '
Page 104
' CITY OF HUNTINGTON BEACH
CONSTRUCTION ACTIVITY
' AND BANK AND
SAVINGS AND LOAN DEPOSITS
LAST TEN FISCALYEARS
Banks and
Number Estimated Savings and
of Value of New Loan
' Building Percent Construction Percent Deposits Percent
Permits Change (OOOs) Change (000S) Change
1987-88 4,666 N/A $ 177.297 N/A $ 2,395,503 N/A
1988-89 5,039 8.0 $ 272,013 53.42 $ 2,653,166 10.8
' 1989-90 4,318 (14.3) $ 102,907 (62.17) $ 2,598,415 (2.1)
1990-91 4,650 7.7 $ 76,175 (25.98) $ 2.803.740 7.9
1991-92 5,041 8.4 $ 81,250 6.66 $ 2,458,259 (12.3)
1992-93 10,400 106.3 $ 100,400 23.57 $ 2,455,333 (0.1)
1993-94 6,844 (34.2) $ 107,420 6.99 $ 2,552,603 4.0
1994-95 4,471 (34.7) $ 84,388 (21.44) $ 2,554,669 0.1
1995-96 7,594 69.9 $ 110,375 30.79 $ 2,569,196 0.6
1996-97 Not Yet Available
Source-Community Development Department,City of Huntington Beach and the Findley
' Reports on California Institutions,Information is the most recent available
COMPUTATION OF LEGAL DEBT MARGIN
September 30, 1997
' (IN THOUSANDS)
ASSESSED VALUATION $ 12,305,288
' DEBT LIMIT: 12%OF ASSESSED VALUATION 1,476,635
DEBT APPLICABLE TO LIMITATION:
LEGAL DEBT MARGIN $ 1,476.635
Source-Administrative Services Department,City of Huntington Beach
STATEMENT OF DIRECT AND
OVERLAPPING BONDED DEBT
JUNE 30, 1997
' 1996-97 Assessed Valuation$11,929.410.012(after deducting$428,938,034 incremental redevelopment valuation
OVERLAPPING TAX AND ASSESSMENT DEBT %Applicable Debt@sn0197
Orange County(D.C.) 7.51% $ 15,014
O.C.Teeter Plan Obligations 7.51% 11.635,850
Metropolitan Water District 1.48% 8,976,642
OC Sanitation Dist No.11 99.91% 44,961
Fountain Valley School District 28.50% 357,700
City of Huntington Beach Comm Fac.Dist No 1990-1 100.00% 2,260,000
City of Huntington Beach 1915 Act Bonds 100.00% 1,255,000
' TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 24,545.167
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT
O.C.General Fund Obligations 7.51% 88,114.839
O.C.Pension Obligations 7.51% 23,486.049
0.C.Transit Authority 7.51% 1,418.448
' MWD of Orange County Water Facilities Corp 11.40% 8,892,420
O.C.Sanitation District No.3,COPS 11.69% 14,451,875
O.C.Sanitation District No.11.COPS 99.91% 24.913,585
OCWD Certificates of Participation 11.90% 23.924,272
Coast Community College COPS 30.42% 6.157,210
' Htg Beach Union High School District COPS 71.52% 697,310
Fountain Valley School Dist COPS 28.50% 6,548
City of Huntington Beach General Fund Obligations 100.00% 43,364,465
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 235,427,021
Less: OC Transit Authority(80%self supporting) (1,134,758)
OC Water District COPS(100%self supporting) (23,924.272)
MWDOC Water Facilities Corporation(100%Self Supporting) (8,892,420)
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 201,475,571
GROSS COMBINED DEBT $ 259,927.188
NET COMBINED TOTAL DEBT $ 226,020,738
Excludes Tax and Revenue Anticipation Notes,revenue,mortgage revenue and tax allocation bonds,
and non-bonded capital lease obligations
Ratios to Assessed Valuation:
Combined Direct Debt($43,364,465) 0.36%
' Total Overlapping Tax and Assessment Debt 0.21%
Gross Combined Total Debt 2.18%
Net Combined Total Debt 1.89%
State School Building Aid Repayable as of 6130/97$10,226,261
' Source-California Municipal Statistics
Page 105
CITY OF HUNTINGTON BEACH '
DEMOGRAPHIC STATISTICS
city
Population
Orange as a Percent
Square County of County
Year Population Percent Increase Miles Population Population
1910 815 3.57 34,436
1920 1,687 107.0% 3.57 61,375 2.75%
1930 3,690 118.7% 3.57 62.451 5.91% '
1940 3,738 1.3% 3.57 130.760 2.86%
1950 5,158 38.0% 4.72 216.224 2.39%
1960 11.492 122.8% 23.47 703,995 1.63%
1970 116.400 912.9% 26.73 1,420.386 8.19%
1980 172,200 47.9% 27.20 1,931,570 8.92%
1990 188,701 9.6% 27.20 2,362,211 7.99%
1991 191,630 1.6% 27.20 2.453,277 7.81%
1992 182,783 -4.6% 27.20 2.512,198 7.28%
1993 184.962 1.2% 27.20 2.557,346 7.23%
1994 186.866 1.0% 27.20 2.596,511 7.20%
1995 186,587 -1.1% 27.20 2.627.949 7.10%
1996 187.180 0.3% 27.20 2,624.335 7.13%
1997 188.518 0.7% 27.20 2,659.316 7.09%
Source-Administrative Services Department,City of Huntington Beach
TOP TEN PROPERTY TAX PAYERS
SEPTEMBER 30, 1997
Assessed Percent
Valuation of Toal
W.T Newland $ 350,890.433 2.85%
McDonnel Douglas Corporation 279.135,277 2.27%
MCA Huntington Associates Ltd 64.114,971 0.52% '
Waterfront Construction 1 A Cal 28.600,000 0.23%
Ox Pierside Corporation 21,000,000 0.17%
Huntington Breakers Apts Ltd 18,717,257 0.15%
LIU Corporation 21,691,355 0.18%
Title Insurance and Trust Comp 75,400.350 0.61% '
Bentall Properties Inc 21,313,925 0.17%
Calresources LLC 62,786,314 0.51%
Total Top Ten 943.649.882 7.67%
All Other Properties 11,361.638,118 92.33%
Total $ 12,305,288,000 100.00%
Source-HDL Coren,Cone '
MISCELLANEOUS STATISTICS
SEPTEMBER 30, 1997
Year of Incorporation
o t
Charter City-City
Council-City
Form of Government Administrator '
Area 27.2 Square Miles
Population 188,518
Miles of Streets 370
Number of Street Lights 14.350
Fire Protection:
Number of Stations 7
Number of Firefighters 139
Police Protection:
Number of Stations 4
Number of Sworn Police Offic 223 ,
Municipal Water Department:
Number of Customers 49,000
Average Daily Consumption 32.0 Million Gallons
Miles of Water Mains 520
Public Works:
Sanitary Sewers 600 Miles
Storm Sewers 136 Miles
Recreation and Culture:
Number of Parks 57
Park Acreage Developed 555
Miles of Beach 3.4
Annual Beach Visitors 7,000,000
Number of Libraries 4
Volumes in Libraries 370,945
Full-Time Employees 1,039
Source-Administrative Services Department,City of Huntington Beach '
Page 106
' CITY OF HUNTINGTON BEACH, CALIFORNIA
' COMPREHENSIVE ANNUAL FINANCIAL REPORT
' FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1997
' PREPARED BY ADMINISTRATIVE SERVICES DEPARTMENT
1
1
1
1
COMPREHENSIVE ANNUAL FINANCIAL
REPORT
YEAR ENDING SEPTEMBER 30, 1997
TABLE OF CONTENTS
INTRODUCTORY SECTION
Table of Contents
Letter of Transmittal iv-xiv
' City Officials xv
Organizational Chart xvi
Financial Reporting Certificate xvii
FINANCIAL SECTION
' Independent Auditors' Report 1
General Purpose Financial Statements:
Combined Balance Sheet-All Fund Types and Account Groups 2-3
Combined Statement of Revenues, Expenditures and Changes in Fund Balances-All 3-4
Governmental Fund Types
Combined Statement of Revenues, Expenditures and Changes in Fund Balances, 5-6
Budget and Actual -General, Special Revenue, and Debt Service Funds
Combined Statement of Revenues, Expenses, and Changes in Retained Earnings-All 7
Proprietary Fund Types
Combined Statement of Cash Flows-All Proprietary Fund Types 8
Statement of Changes in Plan Net Assets(Pension Trust Fund) 9
Notes to General Purpose Financial Statements 10-65
Supplementary Information - Combining Financial Statements and Schedules of Individual
Funds and Account Groups
General Fund:
Balance Sheet 66
Statement of Revenues, Expenditures and Changes in Fund Balances- Budget and
Actual 67
' Special Revenue Funds:
Combining Balance Sheet 68-69
Combining Statements of Revenues, Expenditures and Changes in Fund Balances
(Deficits) Budget and Actual 70-71
Combining Statements of Revenues, Expenditures and Changes in Fund Balances
(Deficits)- Budget and Actual 72-79
I
1
1
Combining Financial Statements and Schedules of Individual Funds and Account Groups '
Debt Service Funds: '
Combining Balance Sheet 80
Combining Statements of Revenues, Expenditures and Changes in Fund Balances 81
Combining Statements of Revenues, Expenditures and Changes in Fund Balances-
Budget and Actual 82-85
Capital Proiects Funds:
Combining Balance Sheet 86-87
Combining Statements of Revenues, Expenditures and Changes in Fund Balances 88-89 ,
Enterprise Funds:
Combining Balance Sheet 90
Combining Statement of Revenue, Expenses, and Changes in Retained Earnings '
(Accumulated Deficit) 91
Combining Statement of Cash Flows 92
Internal Service Funds: '
Combining Balance Sheet 93
Combining Statements of Revenues, Expenses and Changes in Accumulated Deficits 94
Combining Statement of Cash Flows 95 t
Trust and Agency Funds:
Combining Balance Sheet 96
Agency Funds:
Combining Statement of Changes in Assets and Liabilities 96-98 '
Trust Fund:
Statement of Plan Net Assets 99
Statement of Changes in Plan Net Assets 99 '
General Fixed Asset Account Group:
Schedule of General Fixed Assets 100
Schedule of Changes in General Fixed Assets by Function and Activity 100 '
Schedule of General Fixed Assets by Function and Activity 100
General Long-Term Debt Account Group:
Schedule of Changes in General Long-Term Debt 101
ii '
' STATISTICAL SECTION
' Governmental Fund Revenues by Source-Last Ten Fiscal Years 102-103
Governmental Fund Expenditures by Function- Last Ten Fiscal Years 102-103
Property Tax Levies and Collections- Last Ten Fiscal Years 102-103
' Assessed and Actual Valuations of Property- Last Ten Fiscal Years 104
Property Tax Rates-All Direct and Overlapping Governments 104
General Obligation Bonded Debt Ratios- Last Ten Fiscal Years 104
Construction Activity and Bank and Savings and Loan Activity -Last Ten Fiscal Years 105
Computation of Legal Debt Margin 105
Statement of Direct and Overlapping Bonded Debt 105
Demographic Statistics 106
' Top Ten Secured Property Owners 106
Miscellaneous Statistics 106
Ill
• CITY OF HUNTINGTON BEACH ,
Administrative Services Department
2000 Main St. '
Huntington Beach, CA 92648
March 9, 1998
The Honorable Mayor and City Council Members '
Y Y
City of Huntington Beach, California t
Mayor and Council Members:
This document is the Comprehensive Annual Financial Report for the City of Huntington Beach for '
the fiscal year ending September 30, 1997. We believe the data is an accurate summary of
Huntington Beach's financial position. The Administrative Services Department is responsible for the t
accuracy of the information presented. We have included disclosures to improve the understanding
of the financial condition of the City.
The financial statements comply with the standards of the Government Accounting Standards Board '
and include the report of our independent auditors, Diehl, Evans and Company LLP.
This report is organized into three sections:
INTRODUCTION
• The introductory section includes this transmittal letter, the City's organizational chart and ,
a list of the principal officials of the City.
FINANCIAL ,
The financial section includes the general purpose financial statements, the individual '
fund and account group financial information and the auditors' report on the general
purpose financial statements. '
iv t
1
' STA T/ST/CAL
' The statistical section includes selected financial and demographic information generally presented
on a multi-year basis.
' Huntington Beach is a full service City including public safety, parks and recreation, beach services,
library services, planning, zoning, economic development, public works and related administration.
The City also provides water services to residents.
' MAJOR INITIATIVES
' The national and local economy grew at a strong pace during the year. However, Huntington Beach
suffered from sluggish General Fund revenue growth in ongoing revenues due to property tax
refunds resulting from assessment appeals.
' Development increased at a rapid pace in the City, especially in the Holly Seacliff area where over
4,500 new homes are planned. Real-estate valuations increased strongly during the year and
' economists are optimistic that this recovery can sustain itself for several years. Plans were finalized
for a revamping of the Huntington Center to include a multiplex cinema complex and additional
shopping and dining.
' The City had one new debt issue for $8,070,000 which will fund a portion of the 800 MHZ public
safety radio system and a portion of the Pier Plaza construction. When completed the Pier Plaza will
tgive Huntington Beach residents a wonderful resource for entertainment.
The Future- Huntington Beach is primarily a residential community. The City's coastal location
provides unique challenges in developing a mix of tourism, industry, residential and commercial
development. This requires the efforts not only of local government but also of businesses,
developers and citizens' groups. The City is committed to ensuring that all future development in .
' Huntington Beach be economically and environmentally sound.
1
v
t
1
Despite the strong economic recovery, there continue to be threats to the City's finances: ,
• Actions by the State of California taking $6. million per year of City revenue to balance the State's
budget (total of$38.1 million since 1990/91.) ,
• The negative impact of the downsizing of the defense industry.
• Dwindling cash reserves for self-insurance and pension liabilities.
• Accumulating deferred maintenance on the City's infrastructure. '
• Continued or increased State and Federal unfunded mandates.
F/NANC/AL INFORMATION
The City prepares financial statements on the modified accrual basis for all governmental fund types
and on the accrual basis for the proprietary fund types. The City's system of internal control protects '
City assets while ensuring that the cost of controls do not exceed the expected benefits.
Budgeting Controls - The City Council adopts the annual budget and may amend or revise it at any '
meeting of the City Council that has been properly noticed for such action. Budgetary control is at
the departmental level. A department head, with the Finance Director's approval, can transfer funds '
within like object categories of the same department. The City Administrator can transfer funds from
one object category to another without increasing the total budget of a fund. The City Administrator
must approve any changes to capital outlay requests. The City utilizes an encumbrance system as a '
management control technique. Encumbrances are orders, or contracts, for goods or services not
yet completed or received. The City reports these as reservations of fund balance in governmental '
fund types.
FINANCIAL SUMMARY
General Fund Revenue - Total General Fund revenue, including one-time revenue, increased
$2,499,000 or 2.5% from the prior year. Below is a table analyzing the revenue along with an
explanation of significant fluctuations:
t
vi
1
' in thousands
1
' Increase (Decrease)
from 1995/96
Revenue Source: 1996197 AMT Percent of Total Amount Percent
' Property Taxes $ 25,039 24.7% $ 439 1.8 %
Sales Taxes 18,280 18.0% 877 5.0 %
Other Taxes 22,044 21.7% 1,435 7.0 %
' Licenses and Permits 5,633 5.6% 1,735 44.5 %
Fines and Forfeitures 2,707 2.7% 573 26.9 %
From Use of Money and 7,402 7.3% (1,663) (18.3) %
Property
' From Other Agencies 9,987 9.8% (1,269) (11.3) %
Charges for Current Service 9,963 9.8% 711 7.7 %
Other 349 0.3% (339) (49.3) %
' Total $ 101,404 100% $ 2,499 2.5 %
' Sales and other taxes increased due to an improving local economy. Licenses and permits and
charges for current services increased due to increased development in the Holly Seacliff area.
' Fines and forfeitures increased due to increased collection of receivables. Revenue from use of
money and property decreased due to declining interest rates and changes in Redevelopment debt
repayment. Revenue from other agencies decreased due to a smaller surplus from CALPERS.
General Fund Expenditures -Total General Fund expenditures increased $3,954,000 or 4.1%.
' Below is a table analyzing General Fund expenditures with an explanation of significant fluctuations:
1
V„
Financial Reporting Certificates - The City prepares easily readable and efficiently organized
Comprehensive Annual Financial Reports. The Government Finance Officer's Association (GFOA) '
awarded the City a Certificate of Achievement for Excellence in Financial Reporting, which is the
highest form of recognition for municipal financial reporting for its September 30, 1996 report. The
certificate is valid for a period of one year only. The City of Huntington Beach has received the
Certificate of Achievement for the past 11 fiscal years. The GFOA awards the certificate to
governmental agencies whose reports conform with high standards of public financial reporting. We '
believe that this year's report conforms to the GFOA's award program requirements and we will
submit it to them for review.
Acknowledgments - We wish to thank the City Council and the various City departments for t
responsibly conducting the fiscal affairs of Huntington Beach. We would also like to thank Robert
Sedlak, Principal Accountant for his work in the preparation of this report. '
Sincerely, '
1
Da4/ C?r?f,FIina
Vella*It
t
r
obert FraDeputy City A inistrativ Services
1
xiv
' CITY OF HUNTINGTON BEACH
PRINCIPAL CITY OFFICIALS
CITY COUNCIL
' Shirley Detloff, Mayor
Peter Green, Mayor Pro-Tem
' Ralph Bauer, Councilmember
Dave Garofolo, Councilmember
Tom Harman, Councilmember
' Pam Julien, Councilmember
Dave Sullivan, Councilmember
' OTHER ELECTED OFFICIALS
Connie Brockway, City Clerk
' Gail Hutton, City Attorney
Shari Freidenrich, City Treasurer
ADMINISTRATIVE OFFICIALS
Ray Silver, Acting City Administrator
Michael Dolder, Acting Assistant City Administrator/Fire Chief
David Biggs, Director of Economic Development
' Melanie Fallon, Director of Community Development
Robert Franz, Deputy City Administrator/Administrative Services
Ron Hagan, Community Services Director
' Ron Hayden, Library Services Director
Les Jones, Public Works Director
Ron Lowenberg, Police Chief
1
xv
CITY OF HUNTINGTON BEACH
PEOPLE
r
uommiftwl
'
FASSISTANT CITY '
MINISTRATOR
.DEPUTY CITY '
ADhIINISTRATION DMINISTRATOR
PUBLIC '
LVFOR:NIATION
EC010hfIC CCINMUNITY \ ORILS J ; POOL CEr+ -* FIRg'" Al)h11NISTRATI�E. COMA 1TY s#LIBRARYz
DE�'ELOPIMW I VXiLgPhfEAT } � x� w h �; ' SERVICES�?T a LSfiRVICES�� SERFVICES
Economic Uniform Fire Recreation& Public '
Development Planning Engineering Division Prevention Finance Human Secs. Senice
Redevelopment Building ��'ater F;;D
ministratire Operations Central Beach Support '
ivision Senices Dhision Senices
Investigation FT,-ge-ncy Cultural
Housing Landscape Division nices Personnel Arts
Maintenance Senices Tele- Real '
Division M ommunications Property
Information Insurance '
Systems &Benefits
ORGANIZATIONAL CHART
xvi
C
r
N
Certificate of
1
Achievement
for Excellence
1 in Financial
Reporting
Presented to
City of Huntington Beach,
California
rFor its Comprehensive Annual
Financial Report
rfor the Fiscal Year Ended
September 30, 1996
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
' systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
��E uFfk,
xrteo STATES y
W AND y
G""o" o c President
= oavoaa e Tm s
Sff AL agti
CHICk60 ,,//{{ y`�
����l o V-•/.
' Executive Director
' xvii
t
1
1
,
FINANCIAL SECTION
DIEHL, EVANS & COMPANY, LLP
tCERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
RODNEY K.MCDANIEL,CPA
A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS MICHAEL R.LUDIN,CPA
CRAIG W. SPRAKER,CPA
' NITIN P.PATEL,CPA
18401 VON KARMAN,SUITE 200 •PHILIP H.HOLTKAMP,CPA
IRVINE,CALIFORNIA 92612-1542 •THOMAS M.PERLOWSKI,CPA
(714) 757-7700 • FAX(714) 757-2707 'HARVEY J.SCHROEDER.CPA
' January 27, 1998 A PROFESSIONAL CORPORATION
' INDEPENDENT AUDITORS' REPORT
City Council
' City of Huntington Beach
Huntington Beach, California
t We have audited the general purpose financial statements of the City of Huntington Beach, California as of
and for the year ended September 30, 1997 as listed in the accompanying table of contents. These general
purpose financial statements are the responsibility of the City's management. Our responsibility is to express
an opinion on these general purpose financial statements based on our audit.
' We conducted our audit in accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the general purpose financial
' statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
' general purpose financial statement presentation. We believe`that our audit provides a reasonable basis for
our opinion.
' In our opinion, the general purpose financial statements referred to above present fairly, in all material
respects, the financial position of the City of Huntington Beach, California, as of September 30, 1997 and the
results of its operations and cash flows of its proprietary fund types for the year then ended in conformity with
' generally accepted accounting principles.
As discussed in Note 20 to the general purpose financial statements, the City changed its method of recording
' depreciation on contributed assets for proprietary funds and implemented Governmental Accounting Standards
Board Interpretation No. 5, "Property Tax Revenue Recognition in Governmental Funds".
' Our audit was made for the purpose of forming an opinion on the general purpose financial statements taken
as a whole. The financial statements of the combining individual funds and account group statements listed
in the table of contents under supplementary information are presented for purposes of additional analysis and
are not a required part of the general purpose financial statements of the City of Huntington Beach. The
' information has been subjected to the auditing procedures applied in the audit of the general purpose financial
statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose
financial statements taken as a whole. The statistical information listed in the table of contents is not a
' required part of the basic general purpose financial statements, and we did not audit or apply limited
procedures to such information and do not express any assurance on such information.
' 1
OTHER OFFICES AT: 2965 ROOSEVELT STREET 613 W.VALLEY PARKWAY,SUITE 330
' CARLSBAD,CALIFORNIA 92008-2389 ESCONDIDO,CALIFORNIA 92025-2598
(760)729-2343•FAX(760)729-2234 (760)741-3141•FAX(760)741-9890
CITY OF HUNTINGTON BEACH '
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 1997 '
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1996
(IN THOUSANDS) t
GOVERNMENTALFUNDS
Special Debt Capital '
ASSETS AND OTHER DEBITS: General Revenue Service Projects
Cash and Investments(Notes 1e and 3) $ 23,796 $ 11,038 $ 1,604 $ 10,779
Cash With Fiscal Agent(Note 3) - - 6,562 3,287 '
Taxes Receivable(Note 11) 12,214 293 1,217 -
Other Receivables 446 1,006 203 325
Unbilled Receivables(Note 1b) 669 - - - '
Inventory(Note 1g) 347 - - -
Due from Other Funds(Note 10) 155 290 - 132
Deposits and Other Assets 249 3,904 - -
Advances to Other Funds(Note 10) 25,026 5,685 28,644 2,451 '
Investment in Joint Venture(Note 18) - - - -
Land Held for Resale(Note 10 - - - 18,513
Property, Plant and Equipment (Net)(Note 1 f and 15) - - - - '
Amount Available in Debt Service Funds(Note 16) - - - -
Amount to be Provided for Payment of Long-Term Debt - - - -
TOTAL ASSETS AND OTHER DEBITS $ 62,902 $ 22,216 $ 38,230 $ 35,487
LIABILITIES,FUND EQUITY AND OTHER CREDITS '
LIABILITIES:
Accounts Payable $ 2,463 $ 553 $ 144 $ 1,312
Other Accrued Liabilities 1,645 83 - 2
Deposits 185 183 - 49 '
Leases Payable(Note 13 and 15) - - - -
Due to Other Funds(Note 10) 133 367 - 1,600
Tax and Revenue Anticipation Notes(Note 19) 19,450 - - - t
Interest Payable on Tax and Revenue Anticipation Notes 875 - - -
Advances from Other Funds(Notes 10, 12, and 13) - - - -
Deferred Compensation(Note 4) - - - -
Claims Payable Long-Term Portion(Note 9) - - - - '
Funds Held for Others - - - -
Other Deferred Revenue(Note 5) 3,651 8,896 - 157
Deferred Taxes(Note 5) - - - - '
Current Portion of Long-Term Debt(note 13) - - - -
Long-Term Debt(Notes 12 and 13) - - - -
Compensated Absences(Notes 1j, 12, 13) - - - - '
TOTAL LIABILITIES 28,402 10,082 144 3,120
FUND EQUITY AND OTHER CREDITS:
Contributed Capital(note 11) - - - -
Investment in General Fixed Assets - - - - '
Retained Earnings(Accumulated Deficits)(notes 16 and 19):
Reserved - - - -
Unreserved - - - - '
Fund Balances (Notes 16 and 19):
Reserved 23,358 4,130 28,644 21,902
Unreserved:
Designated 4,959 3,737 388 4,441 '
Undesignated 6,183 4,267 9,054 6,024
TOTAL FUND EQUITY AND OTHER CREDITS 34,500 12,134 38,086 32,367
TOTAL FUND EQUITY,LIABILITIES,AND OTHER CREDITS ,
See Independent Auditors'Report and Notes to General Purpose Financial Statements 2 '
FIDUCIARY
PROPRIETARY FUNDS FUND TYPES ACCOUNT GROUPS (Memorandum Only)
' General General Long-
Internal Trust and Fixed Term Debt
Enterprise Service Agency Assets Account Group Total 1997 Total 1996
$ 13,634 $ 2,359 $ 7,054 $ = $ $ 70,264 $ 57,036
460 2,657 795 13,761 44,992
13,724 11,313
2,210 85 687 - - 4,962 11,478
4,705 = 5,374 4,941
939 1,286 1,140
1,277 1,802 23 - - 3,679 5,177
' - 1,800 195 = 6,148 6,401
5,897 67,703 72,115
611 988 1,599 2,285
- - - - - 18,513 18,513
' 39,992 14,151 - 135,745 - 189,888 184,794
9,054 9,054 1,952
- - - - 144,372 144,372 144,252
$ 69,725 $ 22,854 $ 8,754 $ 136,733 $ 163,426 $ 550,327 $566,389
$ , 2,336 $ 477 $ - $ - $ - $ 7,285 $ 4,282
' 164 18 21 1,933 1,808
2,468 2,121 5,006 5,595
136 857 - - - 993 778
1,354 202 23 - - 3,679 5,177
' _ - - - 19,450 19,000
875 893
243 - - - 67,460 67,703 72,115
' = 662 - � 662 38,197
7,002 7,002 6,122
3,593 - 3,593 3,769
- - - 12,704 12,670
' - - - - 7,378
4 122 ,759 - 4,881 5,532
5,178 - - - 80,989 86,167 74,544
' 322 38 - 4,977 5,337 5,280
12,323 13,353 6,420 153,426 227,270 263,140
24,943 4,821 - - - 29,764 60,743
' - - - 136,733 - 136,733 136,759
- 2,690 - - - 2,690 -
' 32,459 1,990 - 34,449 (7,962)
2,334 80,368 92,785
' _ - - - 13,525 2,557
25,528 18,367
57,402 9,501 2,334 136,733 - 323,057 303,249
' See Independent Auditors'Report and Notes to General Purpose Financial Statements 3
CITY OF HUNTINGTON BEACH '
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
FOR THE YEAR ENDING SEPTEMBER 30, 1997 '
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDING SEPTEMBER 30, 1996
(IN THOUSANDS) '
Totals(Memorandum Only)
Special Capital
General Revenue Debt Service Projects '
REVENUES: Fund Funds Funds Funds 1997 1996
Property Taxes (Note 1) $25,039 $ - $ 4,294 $ 8 $ 29,341 $ 29,320
Other Taxes 40,324 1,322 - 557 42,203 39,879
Licenses and Permits 5,633 2,293 - 195 8,121 6,567
Fines,Forfeitures and Penalties 2,707 - - - 2,707 2,134
From Use of Money and Property 7,402 1,080 2,831 1,658 12,971 14,291
From Other Agencies 9,987 9,537 - 286 19,810 18,171
Charges for Current Service 9,963 485 - - 10,448 13,129
Other 349 336 58 743 3,579
TOTAL REVENUES 101,404 15,053 7,125 2,762 126,344 127,070
EXPENDITURES: '
Current:
City Council 233 - - - 233 224
City Administrator 875 981 - - 1,856 2,140 '
City Treasurer 781 - - - 781 743
City Attorney 1,565 - - 173 1,738 1,466
City Clerk 470 - - - 470 488
Administrative Services 4,208 - - - 4,208 4,181 '
Community Development 3,694 - - - 3,694 3,252
Fire 15,763 43 - - 15,806 14,747
Police 32,489 924 - - 33,413 32,650 '
Economic Development - 1,042 - 1,100 2,142 3,010
Community Services 6,827 474 - - 7,301 7,535
Library Services 2,638 249 - 147 3,034 2,951
Public Works 15,673 1,441 - 45 17,159 16,297 '
Non-Departmental 9,426 - 436 5 9,867 9,399
Capital Outlay 623 4,566 - 8,644 13,833 9,823
Debt Service(Note 12) '
Principal - - 2,340 - 2,340 2,966
Interest 900 - 9,289 - 10,189 11,261
TOTAL EXPENDITURES 96,165 9,720 12,065 10,114 128,064 123,133 '
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 5,239 5,333 (4,940) (7,352) (1,720) 3,937
OTHER FINANCING SOURCES(USES):
Operating Transfers In(Note 10) 2,653 1,054 2,648 8,465 14,820 9,203
Proceeds of Long-Term Debt(Note 12) 257 - 9,694 26 9,977 3,603 ,
Operating Transfers Out(Note 10) (9,531) (3,606) (7,651) (136) (20,924) (9,716)
TOTAL OTHER FINANCING SOURCES(USES) (6,621) (2,552) 4,691 8,355 3,873 3,090
EXCESS OF REVENUE AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (1,382) 2,781 (249) 1,003 2,153 7,027 '
FUND BALANCE-BEGINNING OF YEAR 28,660 11,076 38,021 36,072 113,829 106,151
Cumulative Effect of Changes in Accounting Principles(Note 20) 6,500 - 955 (2,348) 5,107 -
Prior Period Adjustments(Note 20) 622 (1,723) (641) (2,260) (4,002) - '
FUND BALANCE AS RESTATED 35,782 9,353 38,335 31,464 114,934 106,1 11
RESIDUAL EQUITY TRANSFERS:
Residual Equity Transfers In 100 - - 2,239 2,339 895
Residual Equity Transfers Out - - - (2,339) (2,339) (244) '
TOTAL RESIDUAL EQUITY TRANSFERS 100 - - (100) - 651
FUND BALANCE-END OF YEAR $ 34,500 $ 12,134 $ 38,086 $ 32,367 $ 117,087 $ 113,829
1
See Independent Auditors'Report and Notes to General Purpose Financial Statements 4 '
CITY OF HUNTINGTON BEACH
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
' BUDGET AND ACTUAL
GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUNDS
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(IN THOUSANDS)
' GENERAL FUND SPECIAL REVENUE FUNDS
Variance Variance
Favorable Favorable
' REVENUES: Budget Actual (Unfavorable) Budget Actual (Unfavorable)
Property Taxes $25,024 $ 25,039 $ 15 $ - $ - $
Other Taxes 37,796 40,324 2,528 1,391 1,322 (69)
Licenses and Permits 4,801 5,633 832 3,453 2,293 (1,160)
' Fines,Forfeitures and Penalties 2,355 2,707 352 - - -
From Use of Money and Property 7,096 7,402 306 887 1,080 193
From Other Agencies 8,536 9,987 1,451 13,493 9,537 (3,956)
Charges for Current Service 9,264 9,963 699 230 485 255
' Other 536 349 (187) 248 336 88
TOTAL REVENUES 95,408 101,404 5,996 19,702 15,053 (4,649)
EXPENDITURES:
Current:
' City Council 241 233 8 - - -
City Administrator 917 875 42 2,070 981 1,089
City Treasurer 784 781 3
City Attorney 1,652 1,565 87
City Clerk 524 470 54 - -
' Administrative Services 4,260 4,208 52 -
Community Development 3,909 3,694 215
Fire 16,169 15,763 406 82 43 39
Police 32,606 32,489 117 904 924 (20)
' Economic Development - - - 2,918 1,042 1,876
Community Services 6,816 6,827 (11) 345 474 (129)
Library Services 2,643 2,638 5 220 249 (29)
Public Works 15,942 15,673 269 1,993 1,441 552
Non-Departmental 9,336 9,426 (90) - - -
Capital Outlay 1,049 623 426 15,767 4,566 11,201
Debt Service:
Principal - - - - - -
Interest 900 900 - - - -
' TOTAL EXPENDITURES 97,748 96,165 1,583 24,299 9,720 14,579
EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (2,340) 5,239 7,579 (4,597) 5,333 9,930
OTHER FINANCING SOURCES(USES):
' Operating Transfers In 2,635 2,653 18 1,054 1,054 -
Proceeds of Long-Term Debt 257 257
Operating Transfers Out (9,972) (9,531) 441 (3,615) (3,606) 9
TOTAL OTHER FINANCING SOURCES(USES) (7,080) (6,621) 459 (2,561) (2,552) 9
' EXCESS OF REVENUE AND OTHER SOURCES OVER
(UNDER) EXPENDITURES AND OTHER USES (9,420) (1,382) 8,038 (7,158) 2,781 9,939
FUND BALANCE-BEGINNING OF YEAR 28,660 28,660 - 11,076 11,076 -
Cumulative Effect of Changes in Accounting Principles(Note 20) 6,500 6,500 - -
' Prior Period Adjustments(Note 20) 622 622 (1,723) (1,723)
FUND BALANCE AS RESTATED 35,782 35,782 9,353 9,353
RESIDUAL EQUITY TRANSFERS IN 100 100 - - - -
' FUND BALANCE-END OF YEAR $26,462 $ 34,500 $ 8,038 $ 2,195 $ 12,134 $ 9,939
' See Independent Auditors'Report and Notes to General Purpose Financial Statements 5
CITY OF HUNTINGTON BEACH '
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL '
GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUNDS
FOR THE YEAR ENDING SEPTEMBER 30, 1997 '
(IN THOUSANDS)
(continued) '
DEBT SERVICE FUNDS TOTAL(MEMORANDUM ONLY)
Variance Variance
Favorable Favorable
REVENUES: Budget Actual (Unfavorable) Budget Actual (Unfavorable) '
Property Taxes $ 4,679 $ 4,294 $ (385) $29,703 $29,333 $ (370)
Other Taxes - - - 39,187 41,646 2,459
Licenses and Permits - 8,254 7,926 (328)
Fines,Forfeitures and Penalties - - - 2,355 2,707 352 ,
From Use of Money and Property 2,957 2,831 (126) 10,940 11,313 373
From Other Agencies - - - 22,029 19,524 (2,505)
Charges for Current Service 9,494 10,448 954
Other - - 784 685 (99)
TOTAL REVENUES 7,636 7,125 (511) 122,746 123,582 836 ,
EXPENDITURES:
Current:
City Council - - 241 233 8 '
City Administrator 2,987 1,856 1,131
City Treasurer 784 781 3
City Attorney 1,652 1,565 87
City Clerk 524 470 54
Administrative Services 4,260 4,208 52 '
Community Development 3,909 3,694 215
Fire - 16,251 15,806 445
Police - 33,510 33,413 97
Economic Development - 2,918 1,042 1,876 ,
Community Services - 7,161 7,301 (140)
Library Services - 2,863 2,887 (24)
Public Works - 17,935 17,114 821
Non-Departmental 216 436 (220) 9,552 9,862 (310)
Capital Outlay - - - 16,816 5,189 11,627
Debt Service:
Principal 2,395 2,340 55 2,395 2,340 55
Interest 9,204 9,289 (85) 10,104 10,189 (85)
TOTAL EXPENDITURES 11,815 12,065 (250) 133,862 117,950 15,912 '
EXPENDITURES (4,179) (4,940) (761) (11,116) 5,632 16,748
OTHER FINANCING SOURCES(USES):
Operating Transfers In 2,650 2,648 (2) 6,339 6,355 16 '
Proceeds of Long-Term Debt 9,694 9,694 - 9,951 9,951 -
Operating Transfers Out (7,827) (7,651) 176 (21,414) (20,788) 626
TOTAL OTHER FINANCING SOURCES(USES) 4,517 4,691 174 (5,124) (4,482) 642
EXCESS OF REVENUE AND OTHER SOURCES OVER
(UNDER) EXPENDITURES AND OTHER USES 338 (249) (587) (16,240) 1,150 17,390 '
FUND BALANCE-BEGINNING OF YEAR 38,021 38,021 - 77,757 77,757 -
Cumulative Effect of Changes in Accounting Principles(Note 20) 955 955 7,455 7,455
Prior Period Adjustments(Note 20) (641) (641) (11742) (1,742) '
FUND BALANCE AS RESTATED 38.335 38,335 - 83,470 83,470 -
RESIDUAL EQUITY TRANSFERS IN - - 100 100 -
FUND BALANCE-END OF YEAR $38,673 $38,086 $ (587) $67,330 $84,720 $ 17,390
1
See Independent Auditors'Report and Notes to General Purpose Financial Statements 6 '
' CITY OF HUNTINGTON BEACH
COMBINED STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS (FUND DEFICITS)
' ALL PROPRIETARY FUND TYPES
FOR THE YEAR ENDING SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR THE
' YEAR ENDING SEPTEMBER 30, 1996
(IN THOUSANDS)
' Totals-Memorandum Only
Internal
OPERATING REVENUES: Enterprise Service Total 1997 Total 1996
Sales $ 19,758 $ - $ 19,758 $ 19,371
' Rentals 619 - 619 953
Fees for Service 12,644 11,651 24,295 21,194
Other 1,910 441 2,351 647
TOTAL OPERATING REVENUES 34,931 12,092 47,023 42,165
OPERATING EXPENSES:Water Purchases 4,822 - 4,822 4,203
Supplies and Operations 16,250 1,077 17,327 18,758
Engineering 460 - 460 432
Production 4,167 _ 4,167 3,343
Maintenance 1,234 1,234 1,243
Water Meters 735 735 1,240
Water Quality 246 - 246 244
t In-Lieu Taxes to General Fund 2,060 - 2,060 2,809 _
Employee Medical Claims 4,410 4,410 3,214
Liability Claims 1,440 1,440 2,808
Workers Compensation Claims - 2,917 2,917 1,904
City Attorney 306 - 306 -
' Non-Departmental 2,712 - 2,712 2,028
Depreciation 1,480 2,197 3,677 4,022
TOTAL OPERATING EXPENSES 34,472 12,041 46,513 46,248
OPERATING INCOME(LOSS) 459 51 510 (4,083)
' NON-OPERATING REVENUES(EXPENSES)
Interest Income 1,564 293 1,857 797
Interest Expense(Note 13) (376) (81) (457) (452)
Joint Venture(Note 18) 303 55 358 371
TOTAL NON-OPERATING REVENUES(EXPENSES) 1,491 267 1,758 716
NET INCOME(LOSS)BEFORE OPERATING
TRANSFERS 1,950 318 2,268 (3,367)
OPERATING TRANSFERS IN(OUT)(NOTE 10)
' Operating Transfers In 116 3,900 4,016 641
Operating Transfers Out (30) (86) (116) (128)
TOTAL OPERATING TRANSFERS IN(OUT) 86 3,814 3,900 513
' NET INCOME BEFORE ADDBACK OF DEPRECIATION 2,036 4,132 6,168 (2,854)
Depreciation on Donated Assets 957 1,501 2,458
NET INCOME(LOSS) __ 2,993 5,633 8,626 (2,854)
RETAINED EARNINGS(ACCUMULATED DEFICIT)-
' BEGINNING OF YEAR 6,420 (14,382) (7,962) (3,304)
Cumulative Effect of Changes in Accounting Principles
(Note 20) 23,046 13,429 36,475
RETAINED EARNINGS(ACCUMULATED DEFICIT)-
BEGINNING OF YEAR AS RESTATED 29,466 (953) 28,513 (3,015)
' RESIDUAL EQUITY TRANSFERS (NOTE 10)Residual Equity Transfers Out - - - (2,093)
RETAINED EARNINGS(ACCUMULATED DEFICIT) -
END OF YEAR $ 32,459 $ 4,680 $ 37,139 $ (7,962)
t
See Independent Auditors'Report and Notes to General Purpose Financial Statements 7
CITY OF HUNTINGTON BEACH '
COMBINED STATEMENT OF CASH FLOWS
ALL PROPRIETARY FUND TYPES
FOR THE YEAR ENDING SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDING SEPTEMBER 30, 1996
(IN THOUSANDS) '
Memorandum Only
CASH FLOWS FROM OPERATING ACTIVITIES: Enterprise Internal Service I Total 1997 1 Total 1996
OPERATING INCOME(LOSS) $ 459 $ 51 $ 510 $ (4,083) '
Adjustments Required to Reconcile Operating Income
(Loss)to Net Cash Provided (Used)by Operating Activities:
Depreciation 1,480 2,197 3,677 4,022 ,
Decrease(Increase)in Accounts Receivable (206) 20 (186) 1,294
Decrease(Increase)in Interest Receivable (50) - (50) 64
Decrease(Increase)in Prepaid Insurance - (721) (721) 564 '
Decrease(Increase)in Unbilled Receivable (868) - (868) (1,614)
Decrease(Increase)in Advance to Other Funds (302) - (302) (311)
Decrease(Increase in Due from Other Funds (237) (159) (396) 5,942
Decrease(Increase)in Inventory (83) - (83) (180) '
Increase(Decrease)in Accounts Payable 775 18 793 (330)
Increase(Decrease)in Accrued Payroll (57) (2) (59) 108
Increase(Decrease)in Interest Payable - 8 8 (27)
Increase(Decrease)in Leases Payable - (39) (39) 674
Increase(Decrease)in Claims Payable - 389 389 106 '
Increase(Decrease)in Amount Due to Other Funds (27) (40) (67) 284
Increase(Decrease)in Deposits (19) - (19) 142
Increase(Decrease)in Compensated Absences 77 5 82 (11) '
TOTAL ADJUSTMENTS 483 1,676 2,159 10,727
NET CASH PROVIDED(USED) BY OPERATING
ACTIVITIES 942 1,727 2,669 6,644
CASH FLOWS FROM NON-CAPITAL FINANCING
ACTIVITIES: '
Operating Transfers In From Other Funds 116 3,900 4,016 641
Operating Transfers Out to Other Funds (30) (86) (116) (128)
Residual Equity Transfers Out(Cash Portion) - - - (307)
TOTAL CASH FLOWS PROVIDED(USED)FROM NOW '
CAPITAL FINANCING ACTIVITIES 86 3,814 3,900 206
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Net Contributions from Water Customers 6,747 - 6,747 '
Interest Paid (376) (81) (457) (452)
Acquisition and Construction of Capital Assets (2,281) (3,829) (6,110) (2,619)
Proceeds of Sale of Plant,Property and Equipment - - - 138
Principal Paid on Long-Term Debt (90) - (90) (1,630) '
TOTAL CASH PROVIDED(USED)FOR CAPITAL AND
RELATED FINANCING ACTIVITIES 4,000 (3,910) 90 (4,563)
CASH FLOWS FROM INVESTING ACTIVITY:
Joint Venture Cash Received(Paid) (343) 55 (288) 144 '
Interest on Investments 1,564 293 1,857 797
TOTAL CASH FLOWS FROM INVESTING ACTIVITY 1,221 348 1,569 941
NET INCREASE(DECREASE)IN CASH AND CASH
EQUIVALENTS 6,249 1,979 8,228 3,228 '
CASH AND CASH EQUIVALENTS,BEGINNING OF
YEAR 7,846 3,037 10,882 7,654
CASH AND CASH EQUIVALENTS,END OF YEAR $ 14,094 $ 5,016 $ 19,110 $ 10,882
NON-CASH ACTIVITIES:
Plant,Property,and Equipment Contributions/Transfers $ 957 $ 950 $ 1,907 $ (1,542)
Joint Venture Activity $ 158 $ 370 $ 528 $ 371
Acquisition of Asset Through Capital Lease $ 136 $ 404 $ 540 $ -
See Independent Auditors'Report and Notes to General Purpose Financial Statements 8
' CITY OF HUNTINGTON BEACH
STATEMENT OF CHANGES IN PLAN ASSETS
' PENSION TRUST FUND
FOR THE YEAR ENDING SEPTEMBER 30, 1997
' WITH COMPARATIVE TOTALS FOR THE
YEAR ENDING SEPTEMBER 30, 1996
' (IN THOUSANDS)
1
Additions: 1997 1996
Employer Contributions $ 818 $ 793
Transfers In 2,204 -
t Interest Income 82 -
Total Additions 3,104 793
' Deductions
Benefits 4 10
Administration 646 614
' Total Deductions 650 624
' Net Increase in Plan Assets 2,454 169
Fund (Deficit) - Beginning of Year (120) (289)
Fund Balance (Deficit) Reserved for Employer's
' Pension Benefits - End of Year $2,334 $ (120)
See Independent Auditors'Report and Notes to General Purrpose Financial Statements 9
1
' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2. REPORTING ENTITY
' 3. CASH AND INVESTMENTS
' 4. DEFERRED COMPENSATION
5. DEFERRED REVENUE
' 6. RETIREMENT PLAN - NORMAL
7. RETIREMENT PLAN - SUPPLEMENTAL
8. POST EMPLOYMENT MEDICAL INSURANCE
' 9. RISK MANAGEMENT
' 10. INTERFUND TRANSACTIONS
11. PROPRIETARY FUND SEGMENT INFORMATION
' 12. GENERAL LONG-TERM DEBT
13. PROPRIETARY FUND LONG-TERM DEBT
' 14. LONG-TERM DEBT NOT RECORDED IN FINANCIAL STATEMENTS
' 15. FIXED ASSETS AND CAPITAL LEASES
16. RESERVES AND DESIGNATIONS OF FUND EQUITY
' 17. COMMITMENTS AND CONTINGENCIES
' 18. JOINT VENTURES
19. OTHER INFORMATION
' 20. CHANGES IN ACCOUNTING PRINCIPLES AND PRIOR PERIOD
ADJUSTMENTS
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: '
a. Description of Fund Types and Account Groups:
The City of Huntington Beach (City) accounts for its financial position and operations t
according to generally accepted accounting principles for governmental units prescribed
by the Government Accounting Standards Board (GASB). The City uses various funds
and account groups to record its financial activity. A fund or account group is an '
accounting entity with a self-balancing set of accounts to record the financial position and
results of operations of a specific governmental activity. The City maintains the following
fund types and account groups: '
Governmental Fund Types:
• The General Fund accounts for all financial activity not required to be accounted for in '
another fund.
• Special Revenue Funds account for the receipt and expenditure of moneys legally
restricted to a specific use. '
• Debt Service Funds account for the receipt and disbursement of moneys used for the
payment of general and redevelopment long-term principal and interest.
• Capital Proiects Funds account for moneys used for the acquisition and construction of
major capital facilities. '
Proprietary Fund Types:
• Enterprise Funds account for City operations financed similarly to private businesses. '
The City recovers the cost of a particular service furnished to the public on a cost
reimbursement (expenses including depreciation) basis or when the City wants to
determine net income.
• Internal Service Funds account for goods and services provided by one department of '
the City to another on a cost-reimbursement basis.
Fiduciary Fund Types: '
• Agency Funds account for assets held by the City as an agent for individuals or private
organizations.
• Pension Trust Funds account for contributions made and retirement benefits paid. '
Account Groups:
• The General Fixed Assets Account Group records and controls the City's capital assets
not owned by proprietary funds. '
• The General Long Term Debt Account Group accounts for the unmatured long-term
liabilities financed from governmental funds.
10
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
b. Basis of Accounting:
' Governmental and agency funds use a modified accrual basis of accounting. These funds
recognize revenue when it is susceptible to accrual meaning it must be measurable and
available to finance current period expenditures. They include property taxes, sales tax,
' federal and state grants and subventions, interest and charges for current service.
Revenues not susceptible to accrual include certain licenses, permits, fines and forfeiture
and miscellaneous revenue. The City recognizes expenditures when it incurs a
tmeasurable liability except that it recognizes interest on long-term debt when due.
The City accounts for proprietary fund types and pension trust funds on the accrual basis,
similar to private businesses recognizing revenue when earned, regardless of the date of
receipt, and recognize expenses when incurred. The City selected under GASB
Statement 20 to apply all GASB pronouncements as well as any official statements or
opinions of the Financial Accounting Standards Board, the Accounting Principles Board,
' or any other Research Bulletins issued on or before November 30, 1989 unless they
conflict with GASB pronouncements.
' c. Measurement Focus: . e
The City accounts for its governmental funds on a spending or "financial flow"
measurement focus where it generally includes only current assets and current liabilities
' on the balance sheets. Statements of revenue, expenditures and changes in fund
balances for governmental funds present increases (revenues and other financing
sources) and decreases (expenditures and other financing uses) in net current assets.
' Proprietary funds and the pension trust fund record activity on a capital maintenance
measurement focus. Balance sheets show all current and non-current assets and
liabilities. Reported fund equity represents total net assets. Proprietary fund operating
' statements present increases(revenues)and decreases(expenses) in total net assets.
The City Council must annually adopt a budget by September 30 of the prior fiscal year.
' The budgeted expenditures become the appropriations to the various departments. The
budget includes estimates for revenue that, along with the appropriations, compute the
budgetary fund balance. The appropriated budget covers substantially all governmental
t fund expenditures with the exception of capital improvement projects (capital projects
funds) carried forward from prior years, which constitute a legally authorized non-
appropriated budget. The City Council may amend the budget at any time. The City
Administrator may transfer funds from between object purposes (personal services,
' operating expenditures or capital outlay expenditures)within the same department without
changing the total budget of a department. Department heads may transfer funds from
like object categories of the same department. The City Council must approve changes
' to departmental budgets. Expenditures may not exceed appropriations at the
departmental level. All unused appropriations lapse at year-end. During the year the City
Council made several supplemental appropriations which included carryovers of prior
' year encumbrances all of which were within available fund balance and estimated
revenue amounts.
11
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
c. Measurement Focus: 1
The City Council adopts governmental fund budgets consistent with generally accepted '
accounting principles as legally required. There are no significant non-budgeted financial
activities. Revenues for special revenue funds are budgeted by entitlements, grants and
estimates of future development and economic growth. Expenditures and transfers are
budgeted based upon available financial resources. '
On or before May 31 of each year each department submits data to the City Administrator
for budget preparation. Staff prepares the budget by fund, function and activity. The '
budget includes information on past years, current year estimates and requested
appropriations for the next fiscal year. Before August 1, the City Council receives the
proposed budget. The City Council holds public hearings and may amend the budget by '
a majority vote. Any changes to the budget must be within the available revenues and
reserves.
These financial statements show budgetary data for the General, Special Revenue and '
Debt Service Funds. They do not show budgetary information for the Capital Projects
Funds since these are budgeted on a long-term project by project basis.
The City uses an encumbrance system as an aid in controlling expenditures. When the '
City issues a purchase order for goods or services, it records an encumbrance until the
vendor delivers the goods or performs the service. At year-end, the City reports all '
outstanding encumbrances as reservations of fund balance in governmental fund types.
The City reappropriates these encumbrances into the new fiscal year.
d. Investments: t
The City records investments, other than deferred compensation investments, at the
lower of amortized cost or market value. If market value declines below amortized cost, '
no loss is recorded unless the declines are considered permanent. The assets of the
Employee Deferred Compensation Fund (an agency fund) are reported at market value
rather than cost. '
e. Property and Equipment:
The City records acquisitions of property and equipment as expenditures in governmental '
fund types at the time of purchase. It capitalizes them at historical cost or estimated
historical cost in the General Fixed Assets Account Group. Land held by the
Redevelopment Agency for resale is capitalized at the lower of cost or estimated net '
realizable value in the Redevelopment Agency Capital Projects Fund. Expenditures for
infrastructure (roads, curbs, sidewalks, sewers, etc.) are not capitalized as such assets
are immovable and generally of value only to the City. No depreciation is provided for any
asset capitalized in the General Fixed Assets Account Group. '
12
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
' e. Property and Equipment:
' The City records all purchased fixed assets acquired by proprietary funds at historical
cost (where historical records are available) and at estimated historical cost where no
historical records exist. Both proprietary and general fixed assets acquired from gifts or
' contributions are capitalized at fair market value at the time received, or in the case of
water fixed assets, at City Council acceptance date. Depreciation for proprietary fund
donated and acquired assets is calculated on the straight-line method over the estimated
useful lives of the assets shown below and charged to the respective fund. Depreciation
' for proprietary fund donated assets is recorded as a reduction to contributed capital.
Production, pumping transmission
' and distribution plant
10 to 50 years
General Plant 20 to 50 years
Transportation Equipment 5 to 30 years
' Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The
amount of interest to be capitalized is calculated by offsetting interest expense incurred
' from the date of borrowing until completion of the project with interest earned on the
invested proceeds over the same period.
f. Inventories:
' Inventories are recorded in governmental funds by the consumption method. Inventories
are capitalized and recorded as expenditures when used and are valued using the
' average cost method. This amount is offset with a reservation of fund balance.
g. Interfund Transactions:
' Numerous transactions occur between funds of the City resulting in operating transfers,
residual equity transfers, amounts due to or from other funds and amounts advanced to or
from other funds.
' • Operating transfers are non-recurring transfers between funds.
• Residual equity transfers are non-routine permanent transfers of equity between
funds.
' • Amounts due to or from are the current (due within one year) portion of moneys that
are to be paid or to be received from other funds.
• Amounts that are classified as advances from other funds are the long-term portion of
' moneys which will be repaid to other funds.
• Amounts classified as advances to other funds represent the long-term portion of
amounts to be received from other funds. In governmental funds, amounts advanced
to other funds are also offset equally by a fund balance reserve account (net of
' deferred interest on long-term advances), indicating that they are not spendable
financial resources.
13
1
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS t
FISCAL YEAR ENDING SEPTEMBER 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
g. Interfund Transactions: '
• Quasi-external transactions are interfund transactions that would be treated as '
revenues, expenditures or expenses if they had involved organizations external to the
City. The City records all quasi-external transactions as revenues, expenditures or
expenses. Transactions that reimburse a fund for expenditures or expenses initially '
made from that fund, are recorded as expenditures/expenses. All other interfund
transactions are reported as operating transfers.
h. Long-Term Obligations: '
The City records governmental fund long-term debt (principal, interest and fiscal charges) '
as an expenditure when paid regardless of when the expenditure is incurred. Obligations
financed from spendable, available financial resources are reported as a fund liability.
The remainder is reported in the General Long-Term Debt Account Group. Bond
discounts and issuance costs are recognized in the period that the debt is issued. '
The City also records, as a liability in the General Long-Term Debt Account Group, the
difference between the annual required contribution on a defined benefit pension plan '
recorded in a pension trust fund, and the contributions made to that plan for the years in
which there was an actuarial study performed. This is in accordance with GASB
Statement 25. '
Proprietary fund long-term debt is accounted for in the respective funds. Interest on the
debt is recorded when incurred. Principal due within one year is shown as a current
liability. The remainder is classified as a long-term liability. Bond discounts are recorded '
as a reduction of outstanding debt and are deferred and amortized over the life of the
debt.
i. Employee Compensated Absences: '
The City records the cost of vacation and sick leave when paid in the governmental fund
types and when incurred in the proprietary fund types. The City records the governmental t
fund liability in the General Long-Term Debt Account Group since these amounts will be
paid with future financial resources rather than currently available spendable resources.
The liability in proprietary fund types is recorded as a fund liability. The City records sick '
leave liability using benefits earned by employees at the balance sheet date that will result
in termination payments rather than compensated absences. The City records vacation
leave liability using the dollar value of employees' rights to receive compensation '
attributable to services already rendered.
14
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
j. Fund Equity:
' The various types of fund equity recorded on the balance sheet are described below:
Governmental and Fiduciary Fund Types:
' 0 Reserved Fund Balance is the portion of fund balance that cannot be appropriated for
expenditures or that is legally segregated for a specific future use.
Unreserved/Designated Fund Balance is the portion of fund balance that has been
tentatively set aside by the City Council.
Unreserved/Undesignated Fund Balance is the portion of fund balance that is
available to be spent by the City Council.
tProprietary Fund Types:
• Unreserved Retained Earnings is the accumulated earnings of an enterprise or
' internal service fund.
• Reserved Retained Earnings is the amount of retained earnings legally committed to
a specific purpose.
• Contributed Capital is the permanent fund capital of a proprietary fund created when
assets are contributed to a proprietary fund or a residual equity transfer is made to a
proprietary fund. Depreciation expense on assets acquired through contributed
capital is charged to retained earnings and then added back. This amount is then
treduced from the contributed capital total.
Account Groups
• Investment in General Fixed Assets is the City's investment in general fixed assets
' recorded at cost.
k. Property Tax Revenue:
' Property tax in California is levied according to Article 13-A of the California Constitution.
The basic levy is a countywide-levy of one percent of total assessed valuation and is
allocated to county governments, school districts, cities and special districts. Additional
' levies require two-thirds approval by voters and are allocated directly to the specific
government. Property tax revenue is recognized in the fiscal year levied provided that
revenue is collected in time to pay current year liabilities. The City changed its method of
' accruing property taxes (see note 20).
The County acts as a collection agent for property tax for all of the local governmental
units. Property taxes are normally collected twice per year. The property tax calendar is
' as follows:
• Lien Date-March 1- Prior Fiscal Year
• Levy Date-July 1- Prior Fiscal Year
' Due Date, First Installment- November 10
• Due Date, Second Installment- February 10
• Delinquent Date, First Installment- December 11
• Delinquent Date, Second Installment-April 10
' 15
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
k. Property Tax Revenue: '
The taxes are paid to the local governments periodically during the year. Below are the '
dates and percentages of the payments from the County (dates and percentages vary
slightly from year to year).
• November 30-5%
• December 19-20%
• December 28-20% '
February 1-balance of first installment
• March 28-5%
April 26-34%
• July 26-balance of second installment '
I.Allocation of Interest Income Among Funds: '
The City pools all non-restricted cash for investment purchases and allocates interest
income based on month-end cash balances. Funds that have restricted cash record
interest income in the respective fund. '
m. Equipment Replacement Fund:
All machinery and equipment not owned by proprietary funds are owned by the '
Equipment Replacement Fund, an internal service fund, and leased to user departments.
All machinery and equipment not replacing existing equipment is purchased by the '
respective fund and transferred to the Equipment Replacement Fund. The City records
this transaction as a capital outlay expenditure in the fund making the purchase and
contributed capital in the Equipment Replacement Fund.
n.Total Columns on Financial Statements: '
The combined financial statements include "total (memorandum only)" columns which '
total the financial statement amounts of the fund types and account groups. The columns
are labeled "memorandum only" because the totals are not comparable to a consolidation
since the City does not eliminate interfund transactions (except for certain leases between
the primary government and component units described in note 2). '
o.Joint Ventures:
The City is involved in five joint ventures. Two of them are recorded in proprietary fund
types using the equity method of accounting. The net increase or decrease in the City's
equity position is a non-operating revenue or expense. Three of the joint ventures are '
recorded in governmental funds and the City's interest is recorded in the General Fixed
Assets Account Group (see note 18).
1
16
i CITY OF HUNTINGTON BEACH
C
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
' p.Cash Flow Statements:
For purposes of the Statement of Cash Flows, the Proprietary Fund types consider all
cash and investments to be cash equivalents, as these funds participate in the city-wide
cash and investment pool.
' q. Estimates:
' The accompanying financial statements require management to make estimates and
assumptions that effect certain report amounts and disclosures. Actual results could
differ from those estimates.
2. REPORTING ENTITY:
The City of Huntington Beach is the primary government. It was incorporated in 1909, is a
' charter, full-service city. The form of government is Council-Manager. Component units
are legally separate organizations for which the City Council is financially accountable, or
organizations that if excluded from the accompanying financial statements, would make
them misleading. The component units described below are blended (presented as if
they are part of the primary government) with the primary government for financial
reporting purposes because either the component units have governing bodies identical
to the City's (the City Council) or provide services exclusively to the City. Financial
accountability means the appointment of a voting majority of the component unit's board
and either the ability to impose will by the City or the possibility that the component unit
will provide a financial benefit or impose a financial burden on the City.
' Huntington Beach Public Facilities Corporation (Public Facilities Corporation) - This
entity was formed in 1970 to issue bonds to construct the Civic Center and Central
Library complexes. It is financially dependent on the City for all of its operations. The
' Public Facilities Corporation leases the Central Library complex to the City. The
lease is a capital lease because title to the facility passes to the City upon termination
of the lease. The City Council appointed the Public Facilities Corporation's original
governing body. The Public Facilities Corporation appoints any replacements but
these replacements can be vetoed by the City Council. The City Council adopts an
annual budget for the Public Facilities Corporation which cannot terminate its lease
with the City if the City meets the lease's terms. The assets and related revenue and
' expenditures that are used for repayment of the bonds are recorded in a debt service
fund. Since the Public Facilities Corporation is a part of the City's reporting entity, the
capital lease between the City and the Public Facilities Corporation is not shown on
the combined balance sheet. The Public Facilities Corporation prepares a separate
financial report and a copy can be obtained from the City's Administrative Services
Department.
Subsequent to year-end, the lease with the City was terminated and there were plans
' to dissolve the Corporation and transfer all assets to the City.
17
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
2. REPORTING ENTITY (CONTINUED):
Parkin Authority of the City of Huntington Beach Parkin Authority)- This entity was '• g ty ty g (Parking ty) ty
formed in 1967 to issue bonds to construct off-street parking facilities. The bonds are
now fully retired. The City Council annually adopts a budget for the Parking
Authority. The Parking Authority is financially dependent on the City for all its
operations. There are no separate financial statements prepared for the Parking
Authority. The City Council also serves as the governing board of the Parking '
Authority. During the year all of the Parking Authority's assets were transferred via
Council and Parking Authority action to other City funds.
• Redevelopment Agency of the City of Huntington Beach (the Redevelopment '
Agency)- This entity was formed in 1967 to renovate older areas in the City. The City
Council serves as its governing body and adopts its annual budget. The
Redevelopment Agency is financially dependent on the City for all of its operations.
The tax increment revenue received and disbursed by the Redevelopment Agency is
recorded in a debt service fund and the capital improvements made are recorded in a
capital projects fund. The Redevelopment Agency's debt is recorded in the General
Long-Term Debt Account Group since these amounts will be paid from future financial t
resources. Separately prepared financial statements are available for the
Redevelopment Agency from the City's Administrative Services Department.
• Huntington Beach Civic Improvement Corporation (Civic Improvement Corporation)-
This corporation was formed to provide for the defeasance of the Huntington Beach
Public Facilities Corporation Leasehold Mortgage Bonds- 1st Issue and provide funds
for capital improvements. The City Council serves as the corporation's governing
body. The Civic Improvement Corporation is dependent upon the City for all of its
operations. The Civic Improvement Corporation has title to the Civic Center complex
and leases it to the City. It is a capital lease because title to the Civic Center complex
reverts to the City at the end of the lease. The lease cannot be terminated if the City
meets all its financial obligations.
The assets pledged for repayment of the certificates of participation and the related '
revenues and expenditures are recorded in the Civic Improvement Corporation Debt
Service Fund. Since the Civic Improvement Corporation is a part of the City's '
reporting entity, the capital lease is not shown on the combined balance sheet.
There are no separate financial statements prepared for the Civic Improvement
Corporation.
• Huntington Beach Public Financing Authority (Public Financing Authority)- This ,
corporation was formed in March, 1988 to issue debt to finance public improvements
and other capital purchases for the City and Redevelopment Agency. The Public
Financing Authority's governing body is the City Council which also adopts the annual
budget. The Public Financing Authority is financially dependent on the City. Its
Authority's activity is recorded as both a debt service fund and as a portion of the
activity in the Equipment Replacement Fund (a proprietary fund type) and the Pier
Plaza Fund (a Capital Projects Fund). There are separately prepared financial
statements available for the Public Financing Authority that are available from the
City's Administrative Services Department. '
18
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 2. REPORTING ENTITY (CONTINUED):
• The City of Huntington Beach Community Facilities District 1990-1 (Community
Facilities District), and the Reservoir Hill Assessment District (the Assessment
' District) were formed to construct public improvements within the City boundaries.
The governing board of these districts is the City Council. The proceeds of debt
issued and the expenditures for the public improvements are recorded in capital
' projects funds. The Community Facilities District's debt is not an obligation of the City
and the moneys collected for the debt are recorded in an agency fund. The
Assessment District's debt is recorded in a debt service fund. There are no separate
' financial statements prepared for these entities.
• The Huntington Beach Auto Business Improvement District (the Business
Improvement District) was formed in 1992 to fund capital improvements within this
non-contiguous district. The Business Improvement District's governing body is the
City Council. The business owners within the district petitioned the City Council under
the Streets and Highways Code to form the district which assisted in the funding of an
' electronic reader board sign advertising the auto dealers. The Business
Improvement District's activity is recorded in an agency fund. There are no separate
financial statements for this entity.
' The joint ventures described in note 18 are not part of the reporting entity because the
City is not accountable for their financial operations. The City is fiscal agent for two of
these joint ventures (Central Net Authority and the West Orange County Water Board).
' The activity of the Central Net Authority is recorded in an agency fund. The activity of the
West Orange County Water Board is recorded in the Water Fund (an enterprise fund) as
a joint venture.
3. CASH AND INVESTMENTS:
' The City Treasurer's Office administers a pooled investment program. This program
enables the City Treasurer to combine available cash from all funds and to investment
cash that exceeds current needs. The City has an agreement with a bank to maintain a
minimum cash balance to compensate the bank for services and uncleared checks that
' are deposited in the City's accounts in-lieu of interest earnings.
Cash and investments at year-end totaled (in thousands):
' Cash and Investments $ 70,264
Cash with Fiscal Agent - Restricted 13,761
Total Cash and Investments $ 84,025
t 19
1
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
3. CASH AND INVESTMENTS (CONTINUED): '
The City's investment policy and section 53601 of the California Government Code allows '
the following investments:
a. Bankers acceptances
b. Negotiable certificates of deposit ,
c. Commercial paper
d. Bonds issued by the City or an Agency within the State of California
e. Obligations of the United States Treasury '
f. Federal Agency Obligations of:
• Federal Intermediate Credit Bank(FICBs)
• Federal Land Bank(FLBs) '
• Federal Home Loan Bank(FHLBs)
• Federal National Mortgage Association (FNMAs)
• Small Business Administration (SBAs)
• Government National Mortgage Association (GNMAs) '
• Tennessee Valley Authorities (TVAs)
• Student Loan Association Notes (Sallie Mae's)
• Federal Home Loan Corporation Notes (FHLMC) '
g. Repurchase Agreements:
Throughout the year, the City utilized overnight repurchase agreements for temporary '
investment of idle cash. Such agreements were used 20 to 22 times per month and
generally did not exceed 5%of the City's investment portfolio. '
h. Reverse-Repurchase Agreements:
Although the City's investment policy allows reverse-repurchase agreements with '
specific City Council approval, the City did not borrow through the use of reverse
repurchase agreements at any time during the year.
i. Medium-Term Corporate Notes . I
j. Time Deposits-Certificates of Deposit
k. Obligations of the State of California '
I. Mutual Funds
m. Investment Pools: '
The Local Agency Investment Fund (LAIF) is a special fund of the California State '
Treasury through which any qualified local government may pool investments.
The City categorizes its balance of deposits and investments with financial institutions
under the following risk categories: '
20
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 3. CASH AND INVESTMENTS (CONTINUED):
Deposits
' • Category 1- Deposits insured or collateralized with securities held by the City or the
City's agent in the City's name.
Category 2- Deposits collateralized with securities held by the pledging financial
institution's trust department or agent in the City's name.
Category 3- Uncollateralized deposits, or collateralized with securities held by the
pledging financial institution or by its trust department or agent, but not the City's
name.
' A summary of the City's September 30, 1997 deposits follows (in thousands):
DEPOSITS: Category 1 Category 2 Category 3 Non- Bank Carrying
Categorized Balance Amount
' Demand Accounts $ 238 $ 1,980 $ - $ - $ 2,218 $ 2,218
' • Category 1- Insured or registered investments, or securities held by the City or its
agent in the City's name.
• Category 2- Uninsured and unregistered investments with securities held by the
' counterparty's trust department or agent in the City's name.
Category 3- Uninsured and unregistered investments with securities held by the
counterparty or by its trust department or agent but not in the City's name.
' A summary of the City's investments at September 30, 1997 follows (in thousands):
INVESTMENTS: Category 1 Category 2 Category 3 Non- Cost Market/Contract
Categorized Value
Bankers $ 1,946 $ - $ - $ - $ 1,946 $ 1,970
Acceptances
Investment in - - 24,026 24,026 24,026
L.A.I.F.
' Federal Obligations 32,459 - - - 32,459 32,546
Commercial Paper 3,935 - - 3,935 3,993
' Repurchase - - 1,833 - 1,833 1,833
Agreements
Medium Term Notes 5,019 - - - 5,019 5,018
' Money Market - - - 5,209 5,209 5,209
Funds
Investments with
Fiscal Agent:
' Investment - - - 6,208 6,208 6,208
Agreement
Federal - - 2,443 2,443 2,423
Obligations -
t Subtotal of Pooled $ 43,359 $ - $ 1,833 $ 37,886 $ 83,078 $ 83,226
Investments
' 21
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
3. CASH AND INVESTMENTS (CONTINUED):
At September 30, 1997, the market value of L.A.I.F. was $28,685,823,321. The City's '
proportionate share of that value was $24,026,000. Included in LAIF's investment
portfolio are certain securities in the form of structured notes and asset-backed securities. ,
L.A.I.F's and the City's exposure to credit, market, or legal risk is not available but
management believes it to be immaterial to the City's financial statements.
4. DEFERRED COMPENSATION:
Permanent City employees may defer a portion of their salary under Section 457 of the
Internal Revenue Code. Changes in IRS regulations of these plans allowed the City
established a trust for a portion ($44,672,000) of the assets of the plan. All property and
rights purchased with these assets, as well as all income attributable to them are held in
trust for the exclusive benefit of the participant and their beneficiary. The amounts are no '
longer the property of the City and are not subject to the claims of the City's general
creditors. These amounts are no longer reported as assets of the Employee Deferred
Compensation Fund (a trust and agency fund). The portion of the assets not held in a '
trust ($683,000) are still the property of the City and subject to the claims of the City's
general creditors.
5. DEFERRED REVENUE: '
Certain revenues in governmental funds are deferred until received The amounts are as
follows (in thousands): '
GENERAL FUND:
Interest on General Fund Advances to $ 3,651
Redevelopment Agency '
TOTAL GENERAL FUND 3,651
SPECIAL REVENUE FUNDS:
Gas Tax Fund: '
Interest on Advances to Redevelopment 479
Agency
Sewer Fund: '
Deferred Development Fees 38
Interest on Developer Fees and Advances 82
to Redevelopment Agency '
Total Sewer Fund 120
Drainage Fund:
Deferred Development Fees 54 '
Interest on Developer Fees and Advances 179
to Redevelopment Agency
Total Drainage Fund 233 '
1
22
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 5. DEFERRED REVENUE (CONTINUED):
Grant Fund:
' Revenues Received Prior to Grant Period 434
Park Acquisition and Development Fund:
Sale of Emerald Cove Site to 1,988
' Redevelopment Agency
Development Fees Deferred in 1985 244
Land-in-lieu Park Fees 3,904
' Interest 1,494
Total Park Acquisition and Development 7,620
Fund
Traffic Impact Fee Fund:
Interest on Advances to General Fund 5
TOTAL SPECIAL REVENUE FUNDS 8,896
CAPITAL PROJECTS FUNDS:
Capital Improvement Fund:
Interest on Advances to Redevelopment 157
Agency
' TOTAL DEFERRED REVENUE $ 12,704
6. RETIREMENT PLAN - NORMAL:
' a. Plan Description:
' The City contributes to the California Public Employees Retirement System (CALPERS), an
agent, multiple-employer retirement system that acts as a common investment and
administrative agent for participating public entities in California. Generally, only an
employee's base salary (excluding overtime) is subject to retirement benefits.
t • The plan covers all permanent employees and temporary employees who work more
than 1,000 hours in a twelve month period. Benefits vest after five years of service.
' Benefits for employees vary based on final yearly compensation, safety or non-safety
status, and age at retirement. There are two groups of covered employees.
' • Safety employees-include sworn police, fire, and marine safety employees.
• Miscellaneous employees all other covered employees.
' Since CALIPERS is on a different fiscal year (ending June 30) all actuarial calculations for
the City's retirement information are made on the year ending June 30, which differs from
the City's fiscal year.
23
t
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
6. RETIREMENT PLAN - NORMAL (CONTINUED:
b. Employer and Employee Contribution Obligations: '
The City makes two types of contributions for covered employees. The first contribution '
represents the amount required to be made by the City (the employer rate). The second
represents an amount which is made by the employee, but is reimbursed to the employee
by the City (the member rate). The member rate is set by contract and normally remains
unchanged.
The employer rate is set by CALPERS and changes from year to year. The employer rates
for the fiscal year ending September 30, 1997 are: '
October 1, July 1, 1997
1996 to June to September '
Membership Group 30, 1997 30, 1997
Local Miscellaneous 4.686% 4.071%
Local Safety 12.754% 15.584%
Member
Rates as ,
Percentage
Membership Group of Wages
Local Miscellaneous 7% '
Local Safety 9%
The employer rate contributes the remaining amounts necessary to fund the benefits for its
member using the actuarial basis recommended by the CALPERS actuaries and adopted '
by the Board of Administration.
c. Funding Status and Progress: '
The pension benefit obligation is a standardized measure of the present value of pension
benefits estimated to be payable in the future due to employee service to date. It helps
assess the funding status of the system, assess progress made in accumulating enough '
assets to pay benefits when due, and make comparisons among employers. This measure
is independent of the funding method used to determine city contributions to the system.
CALPERS conducted an actuarial valuation to determine the City's pension benefit '
obligation as of June 30, 1996, Significant assumptions were:
• Rate of return on present and future assets-8.5% per annum t
• Projected salary increases for covered employees due to inflation-4.5% per annum
• Projected salary increases due to merit-0%
• Postemployment benefit increases-0% ,
• Amortization of Unfunded Liability-Through 2011 (closed-end)
24
1
CITY OF HUNTINGTON BEACH
t NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 6. RETIREMENT PLAN - NORMAL (CONTINUED):
c. Funding Status and Progress.
' The assets in excess of pension benefit obligation at June 30, 1996 was $33,680,000.
Changes in the pension benefit obligation were due to(in thousands):
' Changes in Benefit Provisions n/a
Changes in Actuarial Methods and Assumptions n/a
' Other actuarial information is (in thousands):
Retirees and beneficiaries currently receiving benefits and $144,040
' terminated employees not yet receiving benefits
Current Employees:
Accumulated employee contributions and investment earnings 62,887
Employer Financed-Vested 61,548
' Employer Financed-Non Vested 1,636
Total Pension Benefit Obligation $270,111
Less Net Assets Available for Benefits at Actuarial Value (303,791)
' (Market$326,242,000)
Amounts in Excess of Pension Benefit Obligation $(33,680)
' d.Actuarially Determined Contribution Requirements and Contributions Made:
CALPERS uses the Entry Age Normal Actuarial Cost Method which is a projected benefit
full-cost method and takes into account those benefits that are expected to be earned in
t the future as well as those already accrued. This method states that the normal cost for
an employee is the level amount which would fund the projected benefit if it were paid
annually from the date of employment until retirement. CALPERS uses a modification of
' this method where the employer's total normal cost is expressed as a level percent of
payroll. CALPERS also uses the level percentage of payroll method to amortize any
unfunded actuarial liabilities. The amortization period of the unfunded actuarial liability
' ends in the year 2000 for prior benefits and 2011 for current service benefits.
The significant actuarial assumptions used to compute the actuarially determined
contribution requirement are the same as those used to compute the pension benefit
obligation as previously described.
The contributions were described as follows(in thousands):
' Unfunded
Normal Liability Total
Employee Contributions(Reimbursed $4,048 $ - $4,048
by City)
Member Contributions 4,756 (228) 4,528
Total $8,804 $(228) $8,576
25
1
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
6. RETIREMENT PLAN - NORMAL (CONTINUED):
1
e.Trend Information:
Trend information gives an indication of the progress made in accumulating enough '
assets to pay benefits when due. Ten year trend information for City of Huntington Beach
is not published in the CALPERS Annual Reports. Therefore, ten years of trend
information are required within the City's financial statements since CALPERS does not ,
display information for individual agencies within their report. The information below is
prepared using the fiscal year end of CALPERS (June 1 to June 30). Dollar amounts are
expressed in millions: '
1987-88 1988-89 1989-90 1990-91 1991-92 '
Net Assets Available for $ 105.6 $ 120.6 $ 139.5 $ 158.7 $ 168.6
Benefits
Pension Benefit $ 115.3 $ 126.7 $ 138.9 $ 157.4 $ 171.9 '
Obligation
Net Assets Available 91.6% 95.2% 100.4% 100.8% 98.1%
Expressed as a
Percentage of the
Pension Benefit '
Obligation
Annual Covered Payroll $ 34.4 $ 37.0 $ 40.4 $ 45.0 $ 48.4
Excess of Pension $ 9.7 $ 6.1 $ (0.6) $ (1.3) $ 3.3
Benefit Obligation Over '
(Under)Assets
Available
Employer Contributions $ 4.4 $ 4.5 $ 4.1 $ 3.5 $ 5.0
Employer Contributions 12.8% 12.2% 10.1% 7.8% 10.3% '
Expressed as a
Percentage of annual
Covered Payroll made
According to Actuarially '
Determined
Requirements
1
26
1
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
-
' 6. RETIREMENT PLAN - NORMAL (CONTINUED):
e.Trend Information-
' 1992-93 1993-94 1994-95 1995-96 1996-97
Net Assets Available for $ 183.5 $ 203.9 $ 248.7 $ 271 $ 303.8
' Benefits
Pension Benefit $ 189.8 $ 209.6 $ 219.3 $ 252.4 $ 270.1
Obligation
Net Assets Available 96.7% 97.3% 113.4% 107.3% 112.2%
t Expressed as a
Percentage of the
Pension Benefit
Obligation
' Annual Covered Payroll $ 54.5 $ 54.5 $ 51.6 $ 51.3 $ 51.6
Excess of Pension $ 6.2 $ 5.6 $ (29.5) $ (18.5) $(33.7)
Benefit Obligation Over
(Under)Assets
' Available
Employer Contributions $ 5.5 $ 5.2 $ 4.8 $ 4.1 $ 4.6
Employer Contributions 10.1% 9.5% 9.3% 7.9% 8.9%
Expressed as a
' Percentage of annual
Covered Payroll made
According to Actuarially
Determined
' I Requirements
7. RETIREMENT PLAN - SUPPLEMENTAL:
a. Plan Description:
The City provides a supplemental retirement plan to all employees covered under the
t City's normal retirement plan with CALPERS (see note 6). It is a single-employer PERS.
It is a defined benefit plan and will pay the retiree an additional amount to his or her
normal amount for life. The City's contract's with employee bargaining associations
' establishes the plan. Any changes to the plan must be agreed to by these associations.
The amount will cease upon the employee's death. The amount which is computed as a
factor of an employee's normal retirement allowance, is computed at retirement and
t remains constant for his or her life. All employees participating in the City's normal plan
participate in the supplemental plan (unless specific contract exception is made). 258
retirees received benefits during the year. Because the plan is accounted for in a pension
trust fund, GASB 25 requirements apply for the current year.
b. Employer Obligations and Funding Status and Progress:
' The City annually transfers amounts from the various City funds to a pension trust fund.
The City is required to contribute an actuarially determined rate of 4.10% of covered
payroll for all permanent employees. Administrative cost of this plan are financed through
' investment earnings.
27
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
7. RETIREMENT PLAN - SUPPLEMENTAL (CONTINUED):
c.Annual Pension Cost and Net Pension Obligation: '
The City's annual pension cost and net pension obligation for this plan at June 30, 1997 '
were (in thousands):
Annual Required Contribution $1,952 t
Interest on Net Pension Obligation 565
Adjustment to Annual Required Contribution: (551) t
Annual Pension Cost 1,966
Contributions Made (3,022)
Increase(Decrease) in Net Pension Obligation (1,056) t
Net Pension Obligation- Beginning of Year 6,648
Net Pension Obligation -End of Year $5,592
The annual required contribution was determined as part of an independent actuarial '
valuation using the Entry Age Normal Actuarial Cost Method which is a projected benefit
full-cost method which takes into account those benefits that are expected to be earned in
the future as well as those already accrued. The actuarial assumptions used were: '
• Rate of return on present and future assets-5.5% per annum
• Projected salary increases for covered employees due to inflation-3.0% per annum
• Projected salary increases due to merit-0% '
• Postemployment benefit increases-0%
• Amortization of Unfunded Liability- level percentage of pay open 30 years
• Actuarial value of assets-smoothed market value over 4 year period
c.Trend Information: '
Below is the required trend information (dollar amounts in thousands):
Three Year Trend Information '
Fiscal Year '
Ending June Annual Pension Percentage of Net Pension
30. Cost APC APC Funded Obli ation
1995 $1,865 34% $5,479 '
1996 1 1,974 30% 1 6,648
1997 1,966 35% 5,592
1
28
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
7. RETIREMENT PLAN - SUPPLEMENTAL (CONTINUED):
c.Trend Information.
Other Required Trend Information
Fiscal Year
' Ending June Annual Required Percentage of ARC
30• Contribution(ARC) Contributed
1992 $1,391 17%
1993 1,546 16%
' 1994 1,697 14%
1995 1,790 22%
1996 1,968 41%
1997 1,952 155%
Schedule of Funding Progress
' Dollar Amounts in Thousands
Unfunded
' Actuarial UAAL as
Actuarial Actuarial Actuarial Accrued Percent of
Type of Valuation Value of Accrued Liability Funding Covered Covered Interest Salary
Valuation Date Assets Liability (UAAL) Ratio Payroll Payroll Rate Scale
' Actual 6/30/91 $ 175 $ 11,575 $11,200 1.56% $43,199 25.9% 8.5% 5%
Update 6/30/92 157 12,331 12,174 1.29% 47,423 25.7% 8.5% 5%
Actual 6/30/93 75 14,664 14,589 0.52% 53,703 26.8% 8.5% 5%
' Update 6/30/94 (52) 14,673 14,725 -0.35% 55,593 26.5% 8.5% 5%
Actual 6/30/95 (290) 15,776 16,066 -1.81% 51,779 31.0% 8.5% 5%
Update 6131/96 (120) 16,071 16,191 -0.74% 54,368 29.8% 8.5% 5%
' Actual 6/30/97 2,334 18,944 16,610 12.30% 49,881 33.3% 8.5% 5%
Actual 6/30/97 2,334 25,342 23,008 9.2% 49,881 46.1% 5.5% 3%
d.Accounting for Plan:
' Since the City is required to adopt GASB 25 for the supplemental pension plan, the
difference between the ARC and the amount of pension cost funded for the years in which
there was an actuarial study must be recorded as a liability in the General Long-Term
Debt Account Group. The amount of this liability is$5,592,000.
29
1
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
7. RETIREMENT PLAN - SUPPLEMENTAL (CONTINUED):
e. Other Pension Information: '
The total pension benefit obligation for both the normal and supplemental plans are (in '
thousands):
Total Obligation $295,453 '
Assets Available (306,125)
Assets in Excess of Pension Benefit Obligation 119,672 '
In December, 1997, subsequent to year-end, two employee groups agreed via contract,
to eliminate this benefit for newly hired employees represented by those groups.
8. POST-EMPLOYMENT MEDICAL INSURANCE: '
a. Plan Description: '
The City agreed via contract with each employee association to provide post-employment
medical insurance to retirees. The benefits are based on years of service and are
available to all retirees who meet all three of the following criteria: '
. At the time of retirement the employee is employed by the City.
. At the time of retirement the employee has a minimum of ten years of service credit or is '
granted a service connected disability retirement.
. Following official separation from the City, CALPERS grants a retirement allowance.
The City's obligation to provide the benefits to a retiree ceases when either of the '
following occurs:
• During any period the retiree is eligible to receive health insurance at the expense of
another employer. '
• The retiree becomes eligible to enroll automatically or voluntarily in Medicare.
If a retiree dies, the benefits that would be payable for his or her insurance are provided to
the spouse or family for 18 months. Benefits for insurance premiums are payable based '
on the years of service credit for the retiree. The retiree may use the subsidy for any of
the insurance plans that the City's active employees may enroll.
b.Accounting and Funding: '
The Retiree Medical Insurance Fund is an agency fund. Other funds contribute on a
periodic basis. Employees do not contribute. The actuarial assumptions for the plan are
identical to the assumptions used for the Retirement Supplement Plan (see note 7).
30
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
8. POST-EMPLOYMENT MEDICAL INSURANCE (CONTINUED):
b.Accounting and Funding:
Below are the required disclosures for this plan (dollar amounts in thousands):
' Number of Active Plan Participants 1,014
Employees Receiving Subsidies 146
Employers Actuarially Required Contributions $319
' Employer's Actual Contributions $509
Interest Earned by Fund $224
Subsidies Given by Fund $482
Below i summary Actuarial for n in
s a s ary of the Unfunded ctua al Accrued Liability o the plan
' thousands):
Actuarial Accrued Liability $8,450
t Net Assets Available for Plan Benefits (3,593)
Unfunded Actuarial Accrued Liability $4,857
' 9. RISK MANAGEMENT:
' The City is exposed to various risks of losses related to torts; theft of, damage to and
destruction of assets; errors and omissions; injuries to employees; natural disasters and
employee health insurance claims.
' The City established an Insurance Reserve Fund (an internal service fund) to finance
uninsured risks of loss. This fund provides insurance for individual liability claims of up to
$1,000,000, workers' compensation coverage of up to $350,000 per claim and the first
$100,000 of each health claim. The City is also a participant in the Big Independent Cities
Excess Pool Joint Powers Authority (BICEP) which provides insurance of $24,000,000
above the City's retention of$1,000,000 (see note 18). The City purchases independent
insurance coverage for health and workers' compensation claims in excess of the above
amounts. Settled claims have not exceeded this commercial coverage in any of the past
three fiscal years.
All funds of the City participate in the program and make payments to the Insurance
Reserve Fund based on estimated cost information.
' The claims liability of $11,761,000 is composed of the following claim totals (in
thousands):
31
NTINGTON BEA H
CITY OF HU C
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
9. RISK MANAGEMENT (CONTINUED): '
Balance Additions Reductions Balance, t
October 1, September 30,
1996 1997
Liability $ 5,817 $ 1,440 $ (1,190) $ 6,067
Workers' Compensation 5,378 2,917 (2,758) 5,537
Health 177 4,410 (4,430) 157
Total $ 11,372 $ 8,767 $ (8,378) $ 11,761
Claims activity and liabilities relating to the prior year are (in thousands):
Balance Balance,
October 1, September 30, '
1995 Additions Reductions 1996
Liability $5,842 $2,808 $(2,833) $5,817
Workers' Compensation 5,293 1,904 (1,819) 5,378 '
Health 131 3,214 (3,168) 177
Total $11,266 $7,926 $(7,820) $11,372
The City reports liabilities at year-end to the extent that it can reasonably estimate the
claims prior to the issuance of the financial statements and includes an estimate of '
incurred but not reported claims.
r
32
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
10. INTERFUND TRANSACTIONS:
' a. Receivables/Payables:
Interfund advances at year-end were(in thousands):
Advances Advances
' to Other from Other
Funds Funds
General Fund $ 25,026 $ -
Special Revenue Funds:Gas Tax 979 -
Sewer 250 -
' Traffic Impact Fee 260 -
Drainage 475 -
Park Acquisition and Development 3,721 -
Debt Service Funds:
Public Financing Authority 28,644 -
' Capital Projects Funds: -
Capital Improvement 357
Parking Authority - -
' Low-Income Housing 2,094 -
Enterprise Funds:
Water Utility 5,897 - -
' Emerald Cove Housing - 243
General Long-Term Debt Account Group 67,460
Total $ 67,703 $ 67,703
t
' 33
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS t
FISCAL YEAR ENDING SEPTEMBER 30, 1997
10. INTERFUND TRANSACTIONS (CONTINUED): '
b. Due To/From Other Funds:
Below is a schedule of amounts due to and due from other funds (in thousands): '
Due from Other Due to Other '
Funds Funds
General Fund $ 155 $ 133
Special Revenue Funds: ,
Park Acquisition and Development 290 -
Public Communications - 9
Narcotics Forfeiture - 10
Library Services Fund - 348
Capital Projects Funds:
Pier Plaza Fund 132 - '
Water Facilities Fund - -
Redevelopment Agency - 1,600 '
Enterprise Funds:
Water Utility 1,277 -
Refuse Collection - 954 '
Cultural Affairs - 400
Internal Service Funds:
Insurance Reserve 1,600 202 '
Equipment Replacement 202 -
Trust and Agency Funds:
Mello-Roos Assessment District - 23 '
Retiree Medical Insurance 23 -
TOTAL $ 3,679 $ 3,679
34
_ t
CITY OF HUNTIN T H
C HUNTING TON N B EAC
' NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 10. INTERFUND TRANSACTIONS (CONTINUED):
' c. Operating Transfers In/Out:
Below is a schedule reconciling operating transfers in and out(in thousands):
Total Operating Transfers In, Government Funds $ 14,820
' Total Operating Transfers In, Proprietary Funds 4,016
Total Operating Transfers in Pension Trust Funds 2,204
Total Operating Transfers In $ 21,040
Operating Transfers Out Governmental Funds
P 9 $(20,924)
' Operating Transfers Out, Proprietary Funds (116)
Total Operating Transfers Out $(21,040)
11. PROPRIETARY FUND SEGMENT INFORMATION:
' a. Segment Information for Enterprise Funds:
The City maintains five enterprise funds; Water Utility, Emerald Cove Housing,
Emergency Fire Medical, Refuse, and Cultural Affairs. Certain key financial data are (in
thousands):
t
35
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
11. PROPRIETARY FUND SEGMENT INFORMATION (CONTINUED): '
a. Segment Information for Enterprise Funds:
Water Emerald Emergency Refuse Cultural Total '
9 Y
Cove Fire Medical Collection Affairs
Operating 21,870 621 3,229 9,079 132 34,931 '
Revenues
Depreciation 1,341 82 29 - 28 1,480
Expense (Total) '
Depreciation 932 - - - 25 957
Expense
(Contributed '
Capital)
Operating - 35 - - 81 116
Transfers In
Operating (30) - - - - (30) '
Transfers Out
Operating Income 203 206 (65) 386 (271) 459
(Loss) '
Cumulative Effect 23,021 - - - 25 23,046
of Changes in
Accounting '
Principles
Net Income 1,880 6 (46) 386 (190) 2,036
(Loss)
Fixed Asset 3,183 - 55 - - 3,238 '
Acquisitions
Net Working 14,316 1,736 695 (10) (416) 16,321
Capital (Deficit) '
Total Assets 58,438 6,766 923 1,627 1,971 69,725
Current Assets 18,447 1,900 791 1,627 - 22,765
Long-Term 339 5,453 48 27 12 5,879 '
Obligations Net
of Current
Portion
Current Liabilities 4,131 164 96 1,637 416 6,444 '
Retained 32,581 (139) 468 (37) (414) 32,459
Earnings (Fund
Deficit) '
Contributed 21,387 1,288 311 - 1,957 24,943
Capital
Total Fund Equity 53,968 1,149 779 (37) 1,543 57,402 '
(Deficit)
36 t
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
11. PROPRIETARY FUND SEGMENT INFORMATION (CONTINUED):
b. Contributed Capital:
' The changes in Proprietary Fund Contributed Capital during the year and the year-end
balances were(in thousands):
' Enterprise Internal Total
Funds Service Funds
' Balance-October 1, 1996 $41,942 $ 18,801 $ 60,743
Cumulative Effect of (20,474) (13,429) $ (33,903)
Changes in Accounting
' Principle (Note 20)
Balance-October 1, 21,468 5,372 26,840
1996 as Restated
' Additions-Customer 4,175 - 4,175
Contributions
Additions- Developer/City 257 950 1,207
Contributions
' Depreciation Expense on (957) (1,501) (2,458)
Contributed Assets
Balance-September 30, $24,943 $ 4,821 $ 29,764
' 1997
' Contributed capital consisted of the following at year-end (in thousands):
' Water Utility $21,387
Emerald Cove Housing 1,288
' Emergency Fire Medical 311
Cultural Affairs 1,957
Total Enterprise Funds 24,943
' Internal Service Funds
Equipment Replacement Fund 4,821
Total Contributed Capital $ 29,764
' 37
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
12. GENERAL LONG-TERM DEBT: '
The changes in general long-term debt during the year were (in thousands): '
October 1, Additions Retirements September
1996 30, 1997
Public Facilities $ 385 $ - $ (385) $ -
Corporation Leasehold '
Mortgage Bonds
Civic Improvement 19,865 - (585) 19,280
Corporation Refunding '
Certificates of
Participation (Civic
Center)-1993 '
Civic Improvement 15,035 - (355) 14,680
Corporation Refunding
Certificates of
Participation (Police '
Administration
Building)-1993
Compensated Absences 5,014 1,102 (1,139) 4,977 '
Advances from Other 71,872 1,907 (6,319) 67,460
Funds
1992 Public Financing 31,840 - (480) 31,360 '
Authority Revenue
Bonds
Notes Payable 606 - (52) 554
Leases Payable 79 - (79) - '
Reservoir Hill 1,200 - (55) 1,145
Assessment Bonds ,
1997 Public Financing - 8,070 8,070
Authority Leasehold
Revenue Bonds
Pension Benefit - 5,592 - 5,592 ,
Obligation
Energy Financing Loan 308 - - 308
Total $ 146,204 $ 16,671 $ (9,449) $ 153,426 '
38
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
12. GENERAL LONG-TERM DEBT (CONTINUED):
Below are reconciliation's from amounts in the above table to amounts in the
' accompanying general purpose financial statements(in thousands):
' Proceeds of Long-Term Debt $ 9,977
Increase in Pension Benefit Obligation 5,592
Increase in Compensated Absences 1,102
' Total Increases in General Long-Term Debt $ 16 671
Total Reductions in General Long-Term Debt $ 9,449
Less Payments for Compensated Absences (1,139)
Less Debt Forgiven by Agency (4,625)
Less Interest Paid on Interfund Advances (1,345)
' Principal Paid on General Long-Term Debt $ 2,340
' a. Huntington Beach Public Facilities Corporation Leasehold Mortgage Bonds:
' Year of Issuance 1972
Type of Debt Leasehold Mortgage Bonds
Security Lease on Civic Buildings
' Original Issuance Amount $5,000,000
Interest Rates 5.0%to 5.9%
Interest Payment Dates March 1 stand September 1 st
' Principal Payment Dates September 1 st
Purpose of Debt Finance Library construction
During the year the bonds were retired.
' b. 1993 Huntington Beach Civic Improvement Corporation Refunding Certificates of
Participation (Civic Center Project):
' Year of Issuance 1993
Type of Debt Refunding Certificates of
Participation
' Security Lease on Civic Buildings
Original Issuance Amount $21,895,000
Interest Rates 2.75%to 5.5%
' Interest Payment Dates February 1st and August 1st
Principal Payment Dates August 1st
Purpose of Debt Refinance 1986 Civic
' Improvement Corporation
Certificates of Participation
' 39
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
12. GENERAL LONG-TERM DEBT (CONTINUED): '
b. 1993 Huntington Beach Civic Improvement Corporation Refunding Certificates of '
Participation (Civic Center Project):
Year Ending ,
September 30, Principal Interest Total
1998 $ 610 $ 1,050 $ 1,660
1999 640 1,022 1,662 '
2000 670 990 1,660
2001 705 957 1,662
2002 745 920 1,665 '
2003-2016 15,910 7,349 23,259
Total $ 19,280 $12,288 $31,568
c. 1993 Huntington Beach Civic Improvement Corporation Refunding Certificates of '
Participation (Police Administration Project):
Year of Issuance 1993
Type of Debt Refunding Certificates of '
Participation
Security Lease on Civic Buildings
Original Issuance Amount $16,350,000 '
Interest Rates 4.0%to 5.7%
Interest Payment Dates February 1st and August 1st
Principal Payment Dates August 1 st '
Purpose of Debt Refinance 1989 Civic
Improvements Corporation
Certificates of Participation
Year Ending
September 30, Principal Interest Total '
1998 $ 370 $ 795 $ 1,165
1999 385 778 1,163
2000 405 758 1,163 '
2001 425 738 1,163
2002 450 718 1,168
2003 and after 12,645 7,140 19,785 '
Total $ 14,680 $10,927 $25,607
1
40
1
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 12. GENERAL LONG-TERM DEBT (CONTINUED):
d. Compensated Absences Payable:
' There is no fixed payment schedule to pay the governmental fund liability of $4,977,000
for compensated absences through September 30, 1997.
' e. Long-Term Advances from Other Funds:
There is no fixed payment schedule for the various interfund advances listed below (in
thousands):
' GENERAL FUND:
Direct Advances from 1979 to 1987 to Redevelopment $ 9,991
Agency
Direct Cash Advances from Proceeds of 1988 Public 4,445
' Financing Authority Revenue Bonds Repaid to General
Fund
Indirect Advances from Redevelopment Agency from 6,960
' 1987 to 1996
Land Sales to Redevelopment Agency from 1982 to 1992 32,833
Interest on Above Amounts 23,118
' Total Debt 77,347
Less Estimated Uncollectible Amounts (52,321)
TOTAL GENERAL FUND 25,026
1
1
41
1
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
12. GENERAL LONG-TERM DEBT (CONTINUED): t
e. Long-Term Advances from Other Funds:
SPECIAL REVENUE FUNDS: '
Park Acquisition and Development Fund:
Land Sale in 1993 to Redevelopment Agency 1,745 '
Deferred Development Fees- Redevelopment Agency 248
Interest on Above Amounts 1,485
Total Advances from Park Acquisition and Development 3,478 t
Fund
Sewer Fund:
Advance 1990/91 to Redevelopment Agency 130
Deferred Development Fees- Redevelopment Agency 38 t
Interest on Above Amounts 82
Total Advances from Sewer Fund 250
Drainage Fund: '
Advance 1987/88- Redevelopment Agency 250
Deferred Development Fees- Redevelopment Agency 54
Interest on Above Amounts 171 '
Total Advances from Drainage Fund 475
Gas Tax Fund:
Advance in 1988/89 - Redevelopment Agency 500 '
Interest on Above Amounts 479
Total Advances from Gas Tax Fund 979
Advances from the Traffic Impact Fee Fund to the General 255 '
Fund
Interest on Above Amounts 5
Total Advanced from the Traffic Impact Fee Fund 260 '
TOTAL SPECIAL REVENUE FUNDS 5,442
DEBT SERVICE FUNDS:
Public Financing Authority: '
Advances in 1991/92 -Redevelopment Agency 28,644
CAPITAL PROJECTS FUNDS:
Capital Improvement Fund: '
Advance in 1989/90- Redevelopment Agency 200
Interest on Above Amounts 156
Total Capital Improvement Fund 356 '
Low-Income Housing Fund:
Advances for Educational Revenue Augmentation Fund 732
Advances to Redevelopment Capital Projects Fund 1,363 '
Total Low-Income Housing Fund 2,095
TOTAL CAPITAL PROJECTS FUNDS 2,451
42
1
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 12. GENERAL LONG-TERM DEBT (CONTINUED):
e. Long-Term Advances from Other Funds:
ENTERPRISE FUNDS:
Water Fund:
Advances from 1986/87 to 1988/89- Redevelopment 1,138
Agency
Advances from Water Fund to Pier Rebuilding Fund 2,500
Interest on Above Amounts 2,259
Total Advances from Water Fund 5,897
TOTAL ENTERPRISE FUNDS 5,897
' TOTAL ADVANCES FROM OTHER FUNDS $ 67,460
' These advances are classified between the Redevelopment Agency and Other Advances
as follows(in thousands):
' Redevelopment Agency Advances $ 63,614
Other Advances 3,846
Total $ 67,460
t
The changes during the year were as follows (in thousands):
Advances, October 1, 1996 $ 71,872
Advances Made 255
Advances Repaid (1,694)
' Advances Forgiven (4,625)
Accrued Interest Reported in Other Funds as 1,652
Deferred Revenue
' Total at September 30, 1997 $ 67,460
' 43
CITY OF HUNTINGT N BEA H
C O C
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
12. GENERAL LONG-TERM DEBT (CONTINUED):
f. Public Financing Authority Revenue Bonds:
Year of Issuance 1992
Type of Debt Revenue Bonds
Security Loan Agreements with
Redevelopment Agency
Original Issuance Amount $33,495,000
Interest Rates 4.0% to 7.0% '
Interest Payment Dates August 1st and February 1st
Principal Payment Dates August 1st
Purpose of Debt. Provide funds to amend '
agreements with Robert Mayer
Corporation, remove restrictive
covenants on, and refinance '
1988 Public Financing
Authority Revenue Bonds.
Debt service requirements to maturity are (in thousands):
Year Ending
September 30, Principal Interest Total t
1998 $ 500 $ 2,178 $ 2,678
1999 530 2,148 2,678
2000 560 2,115 2,675 '
2001 605 2,079 2,684
2002 645 2,038 2,683
2003 and after 28,520 25,619 54,139 '
Total $ 31,360 $ 36,177 $ 67,537
g. Notes Payable:
Year of Issuance 1988 '
Type of Debt First trust deed mortgage
Security Real property
Original Issuance Amount $881,000
Interest Rates 7.75% (variable rate)
Interest Payment Dates monthly '
Principal Payment Dates monthly
Purpose of Debt Purchase of property
44
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 12. GENERAL LONG-TERM DEBT (CONTINUED):
g. Notes Payable:
Debt service requirements to maturity are (in thousands):
Year Ending
September 30, Principal Interest Total
1998 $ 52 $ 50 $ 102
' 1999 52 45 97
2000 52 47 99
t 2001 52 47 99
2002 52 42 94
2003 and after 294 86 380
' Total $ 554 $ 317 $ 871
h. Reservoir Hill Assessment Bonds:
Year of Issuance 1989
Type of Debt 1915 Improvement Act
' Assessment Bonds
Security Property tax assessments
Original Issuance Amount $1,653,905
Interest Rates 6.5%to 8.1%
' Interest Payment Dates March 2nd and September 2nd
Principal Payment Dates September 2nd
Purpose of Debt Capital improvements
Debt service requirements to maturity are(in thousands):
' Year Ending
September 30 Principal Interest Total
' 1998 $ 55 $ 92 $ 147
1999 60 87 147
2000 65 83 148
2001 70 78 148
2002 85 72 157
2003 and after 810 284 1,094
Total $ 1,145 $ 696 $ 1,841
' 45
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
12. GENERAL LONG-TERM DEBT (CONTINUED): ,
I. Public Financing Authority 1997 Lease Revenue Bonds:
Year of Issuance 1997
Type of Debt Lease Revenue Bonds
Security Lease Agreement with City for
Central Library
Original Issuance Amount Total Issue$8,070,000:
Pier Plaza Portion-$3,385,000
800 MHZ Portion-$4,235,000
Interest Rates 5.00%to 5.50%
Interest Payment Dates June 15 and December 15 '
Principal Payment Dates December 15
Purpose of Debt Construct Pier Plaza and
Purchase 800 MHZ System '
Year Ending
September 30 Principal Interest Total '
1998 $ 230 $ 463 $ 693
1999 400 395 795 '
2000 420 375 795
2001 440 354 794
2002 510 331 841 '
2003 and after 6,070 3,274 9,344
Total $ 8,070 $ 5,192 $ 13,262
j. Pension Benefit Obligation:
There is no fixed repayment schedule to fund the unfunded pension benefit obligation 1
totaling $5,592,000 described in note 7. The amount will be funded through a
contribution rate determined by an independent actuarial study. '
46
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 12. GENERAL LONG-TERM DEBT (CONTINUED):
k. Energy Conservation Loan:
Year of Issuance 1995
Type of Debt Note Payable-State of California
Security Loan Agreement
Original Issuance Amount $308,000
Interest Rates 6.1%
Interest Payment Dates December 22nd, June 22nd
Principal Payment Dates December 22nd, June 22nd
Purpose of Debt Capital improvements
' Debt service requirements to maturity are(in thousands):
Year Ending
' September 30 Principal Interest Total
1998 $ 54 $ 18 $ 72
1999 58 15 73
' 2000 61 12 73
2001 75 8 73
2002 70 4 74
Total $ 308 $ 57 $ 365
' 13. PROPRIETARY FUND LONG-TERM DEBT:
' Below is a summary of changes in proprietary fund long-term debt for the year (in
thousands):
October 1, September
' 1996 Additions Retirements 30, 1997
1991 Emerald
Cove Certificates
' of Participation $ 5,390 - $ (90) $ 5,300
Compensated
Absences 266 67 - 333
' Advances from - -
Other Funds 243 243
Leases Payable 896 137 (40) 993
' Claims Payable 11,372 8,602 (8,213) 11,761
Total $ 18,167 $ 8,806 $ (8,343) $ 18,630
47
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
13. PROPRIETARY FUND LONG-TERM DEBT(CONTINUED): '
The above total is reported in the accompanying financial statements as follows (in t
thousands):
Internal
Enterprise Service
Funds Funds Total '
Advances from Other Funds $ 243 $ - $ 243
Long-Term Debt 5,210 - 5,210
Leases Payable- Long-Term Portion 137 856 993 '
Claims Payable- Long Term Portion - 7,253 7,253
Compensated Absences 295 38 333
Current Portion of Long-Term Debt 90 4,349 4,439 '
Total $ 5,975 $ 12,655 $ 18,630
a. 1991 Emerald Cove Certificates of Participation (Redevelopment Agency):
Year of Issuance 1991 '
Type of Debt Certificate of Participation
Security Lease With City for Apartment
Complex '
Original Issuance Amount $5,740,000
Interest Rates 4.8% to 7.0%
Interest Payment Dates March 1 stand September 1 st '
Principal Payment Dates March 1st
Purpose of Debt Refinance 1984 Emerald Cove
Certificates of Participation '
1
48
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 13. PROPRIETARY FUND LONG-TERM DEBT(CONTINUED):
a. 1991 Emerald Cove Certificates of Participation (Redevelopment Agency):
Debt service requirements to maturity are(in thousands):
Year Ending
September 30, Principal Interest Total
1998 $ 95 $ 364 $ 459
1999 100 359 459
2000 110 353 463
' 2001 115 347 462
2002 120 340 460
' 2003 and after 4,760 3,966 8,726
Total $ 5,300 $ 5,729 $ 11,029
' b. Compensated Absences:
' There is no fixed repayment schedule to pay the compensated absences for proprietary
fund types of$333,000 at year-end.
' c.Advances from Other Funds:
There is no fixed repayment schedule to repay the amounts advanced from the Park
Acquisition and Development Fund (a special revenue fund) to the Emerald Cove
' Housing Fund (an enterprise fund) of$243,000 at year-end.
d. Claims Payable:
There is no fixed repayment schedule for estimated claims payable of $11,761,000 at
year-end (see note 9). The City will pay the claims when it reaches final settlements on
outstanding litigation.
1
t
49
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
13. PROPRIETARY FUND LONG-TERM DEBT(CONTINUED):
e. Leases Payable:
The City entered into capital leases for various equipment replacement items.
Year of Issuance 1993 through 1997 '
Type of Debt Capital Lease
Security Lease Agreement
Original Amount varies '
Interest Amount 5.2% to 6.9%
Interest Payment Dates Monthly, Quarterly, Semi-
Annually '
Principal Payment Dates Monthly, Quarterly, Semi-
Annually
Purpose of Debt Acquire Equipment '
The future minimum required lease payments are (in thousands): '
Year Ending September
30, Total Payment '
1998 $328
1999 303
2000 249 '
2001 138
2002 88
Total Minimum Lease 1,106 '
Payments
Less Interest (113)
Total Present Value of $993 t
Future Minimum Lease
Payments
1
50
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 14. LONG-TERM DEBT NOT RECORDED IN FINANCIAL STATEMENTS:
a. Defeased Debt Outstanding:
' At year-end the following long-term, defeased debt outstanding was not recorded in the
financial statements:
' Public Financing Authority 1988 Lease $23,770,000
Revenue Bonds
Civic Improvement Corporation 1986 16,910,000
Certificates of Participation
Public Facilities Corporation 1972 765,000
' Lease Revenue Bonds
Civic Improvement Corporation 1989 13,365,000
Certificates of Participation
b. Community Facilities District 1990191 Special Assessment Tax Bonds:
Year of Issuance 1990
t Type of Debt Community Facilities District
Assessment Bonds
Security Special Tax Levies
' Original Issuance Amount $2,400,000
Interest Rates 6.35%to 7.60%
Interest Payment Dates April 1 st and October 1 st
' Principal Payment Dates October 1st
Purpose of Debt Public improvements and
police and fire services
These bonds are excluded from the accompanying financial statements since the City is
' not liable to make any payment on the bonds if taxes collected are not sufficient to pay
the debt service. Debt service requirements to maturity are (in thousands):
1
' 51
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
14. LONG-TERM DEBT NOT RECORDED IN FINANCIAL STATEMENTS:
b. Community Facilities District 1990/91 Special Tax Bonds: '
Year Ending '
September 30, Principal Interest Total
1998 $ 30 $ 169 $ 199 ,
1999 40 167 207
2000 40 164 204
2001 45 161 206 ,
2002 45 158 203
2003 and after 2,055 1,814 3,891
Total $ 2,255 $ 2,633 $ 4,910 '
c. Other"No-Commitment" Debt:
The City is involved in various bond issues where the City or Redevelopment Agency
issued bonds to assist in the financing of residential developments. A trustee holds all
funds and payment cannot be made from any other source than the mortgages received. '
Only the original issue amount is readily available.
These bond issues are:
Amount Outstanding '
Bond Issue at September 30, 1997 Amount Issued
Five Points Senior Project Multi-Family '
Housing Revenue Bonds-Series A- 1991 $9,500,000 $9,500,000
Seabridge Villas Project Multi-Family Housing
Revenue Bonds-Series A- 1985 23,300,000 25,000,000 '
Rivermeadows Variable Rate Demand Bonds-
1985 Series A unavailable 10,000,000
Huntington Breakers Mortgage Revenue Bonds
Refunding Issue- 1996 Series A 16,000,000 16,000,000 '
Huntington Breakers Mortgage Revenue
Bonds-Original Issue- 1983 15,540,000 16,000,000
Warner Avenue Apartment Project Multi-Family '
Housing Revenue Bonds-October, 1985 8,165,000 8,165,000
1
52
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
t 15. FIXED ASSETS AND CAPITAL LEASES:
a. Changes in Fixed Assets.
' The changes in the general fixed assets account group for the year are(in thousands):
Balance Balance
' October 1, September 30,
1996 Additions Dispositions 1997
Land $69,460 $ - $ - $69,460
Buildings 59,363 587 (61) 59,889
' Other 2,162 - - 2,162
Construction in
Process 3,730 1,580 (1,076) 4,334
' Joint Ventures 794 194 - 988
Total $135,509 $2,361 $(1,137) $136,733
' The changes in the proprietary fund fixed assets for the year are (in thousands):
' Balance - Balance-
ENTERPRISE October 1, September
FUNDS: 1996 Additions Dispositions 30, 1997
' Land $2,439 $ = $ = $ 2,439
Buildings 8,059 8,059
Construction in 5,859 2,195 (59) 7,995
Process
t Machinery and 54,246 727 (28) 54,945
Equipment
Total Cost 70,613 2,922 (87) 73,438
' Less Accumulated (39,815) (33,446)
Depreciation
Net Book Value- $38,628 $39,992
' Enterprise
Funds
1
53
1 '
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
15. FIXED ASSETS AND.CAPITAL LEASES (CONTINUED): '
INTERNAL Balance- Balance- t
SERVICE October 1, September 30,
FUNDS: 1996 Additions Dispositions 1997
Machinery and $35,092 $2,016 $(456) $ 36,652 '
Equipment
Construction in 2,826 2,856
Process
Total 35,092 $4,831 $(456) 39,478 '
Less: Accumulated (23,523) (25,327)
Depreciation
Net Book Value $11,872 $14,151 '
Internal Service
Funds
b. Leases:
The City has various lease agreements that qualify as capital leases involving a '
helicopter, sewer truck, fire truck, sweepers, asphalt truck, backhoe and trailer, mowers,
and aerial devices. '
The equipment is carried in the accompanying financial statements as follows (in
thousands):
Machinery and Equipment $2,661 '
Less Accumulated
Depreciation 675
Carrying Value 11,586 '
Information on the future minimum lease payments is shown in note 13. This amount is
recorded as a liability on the balance sheet of the Equipment Replacement Fund. '
16. RESERVES AND DESIGNATIONS OF FUND EQUITY:
The City maintains reserves and designations of fund equity in its governmental funds. '
Reserves are amounts that cannot be appropriated in future periods or which are legally
set aside for a specific use. Designations are amounts that the City has made tentative
plans to use in a future period. The City's reserves and designations in governmental '
funds at year end are (in thousands):
1
1
54
1
t
CITY OF HUNTINGTON BEACH
t NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
16. RESERVES AND DESIGNATIONS OF FUND EQUITY (CONTINUED):
Governmental General Special Debt Capital Total
Funds: Fund Revenue Service Projects
Funds Funds Funds
Reservations:
Encumbrances $ 1,636 $ 3,124 $ - $ 995 $ 5,755
Long-Term 21,375 1,006 28,644 2,294 53,319
' Receivables from
Other Funds
Capital Projects - - 100 100
t Pension Payments = = _ - -
Land Held for Resale 18,513 18,513
Inventory 347 - - - 347
' Total Reserved Fund $ 23,358 $ 4,130 $ 28,644 $ 21,902 $ 78,034
Equity
Designated for Future 1,959 3,737 388 4,441 10,525
t Expenditures -
Economic 3,000 - - 3,000
Uncertainties
Total Designated $ 4,959 $ 3,737 $ 388 $ 4,441 $ 13,525
' Total Reserved and $ 28,317 $ 7,867 $ 29,032 $ 26,343 $ 91,559
Designated Fund
Equity
1
The City also maintains reserved portions of retained earnings that are legally
t segregated for a specific use in the proprietary fund types. These amounts are
summarized as follows (in thousands):
' Proprietary Fund Types Enterprise Internal Total
Funds Service
Funds
Retained Earnings
Reserved for Capital Projects $ - $ 2,690 $ 2,690
1
Trust Funds
' Fund Balance
Reserverved for Employee Pension Benefits $2,334
1
' 55
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
17. COMMITMENTS AND CONTINGENCIES:
a. Legal Actions:
There are legal actions pending against the City resulting from normal operations. In the '
opinion of management and the City Attorney, the financial resolution of these actions
should not have a significant impact on these financial statements.
b. Five-Points Seniors Housing:
In 1991 the Redevelopment Agency agreed to loan $500,000 over 5 years in $100,000
increments beginning in 1993/94 to a private partnership to facilitate affordable senior '
housing. At year-end $100,000 remained to be loaned.
c. Driftwood Mobilehome Acquisition and Relocation Agreement: '
In 1988 the Redevelopment Agency made an agreement with Robert Mayer Corporation
and a private mobilehomeower's association to purchase and provide relocation benefits ,
for up to 10 mobilehomes per year at an agreed value if the owners are unable to sell
their homes on the open market for a minimum of 90 days. To qualify for the buyout, the
owners must apply by September 26th of each year, meet the 90 day requirement and
submit an offer letter. If greater than 10 owners qualify, a lottery is held. At year-end '
there were 144 remaining mobilehomes on the site. Each November 1st, the agreed
value for each mobilehome type is adjusted by a formula in the agreement. On November
1, 1995, (the last adjustment date) the average adjusted value was $69,258 per t
mobilehome. After each home is purchased, the Agency markets the coaches for resale
at a value substantially less than the purchase price. The Agency's goal is to clear the
site to allow for commercial and residential development. During the fiscal period the
Agency spent$694,725 for purchase and relocation benefits. '
d. Central Net Operations Authority:
In 1992 the Central Net Operations Authority (CNOA) was formed. CNOA has title to a '
building valued at $732,000. If either of the cities of Fountain Valley and/or Westminster
withdraw from CNOA prior to August 20, 2021 the City shall reimburse them by an '
amount equal to 1/50th of their contributions. At year-end these amounts totaled
$366,000.
e. Owner Participation Agreement-Abdelmuti: '
In 1991, the Agency agreed to assist a private business in the demolition and the
construction of a new building in the Main/Pier project area. The Agency agreed to make '
public improvements totaling $500,000 and to loan the business $3,126,000 (which have
been reported as expenditures) for 15 years at 7% interest to make building
improvements. At year-end the balance of the loan was$2,820,000. '
1
56
1
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 17. COMMITMENTS AND CONTINGENCIES (CONTINUED):
' f.Townsquare Commercial Loan:
During 1995 the Redevelopment Agency and the Resolution Trust Corporation (RTC) sold
the interest in the Townsquare development for $820,000. The Agency/RTC financed
$779,000 with a note and deed of trust. The Agency is servicing the loan and 20.8%, or
approximately $162,000 of the sale proceeds will be kept by the Agency. The remainder
will be forwarded to RTC as the note is paid. The revenue is being recognized when
' received.
g. Huntington Beach Union High School District(HBUHSD) Sharing Agreement:
In 1997 the City Council agreed to pay the HBUHSD certain increased sales tax revenues
relating to the development of a new commercial site by Home Depot. The City will retain
the first $50,000 of annual increased sales tax revenues and will pay HBUHSD a portion
' of the amount over$50,000 until the year 2015/2016.
h. CALPERS
' CALPERS has indicated that the City may be responsible for paying an unfunded liability
of approximately $13 million asociated with 153 employees' conversion of certain benefits
' to compensation in fiscal year 1993/94.
18. JOINT VENTURES:
The City is involved in four joint ventures that are recorded as investments in joint
ventures in the accompanying financial statements as follows (in thousands):
General Fixed Asset Account Group:
' Central Net Operations Authority $365
Public Cable Television Authority 623
Total General Fixed Asset Account Group: 988
Joint Venture Amounts Reported in Proprietary Fund:
San Joaquin Reservoir Trust 609
Reported as Part of Other Balance Sheet Amounts:
' Reported as Part of Water Fund Cash:
West Orange County Water Board 255
Reported as Part of.Prepaid Insurance:
' Big Independent Cities Excess Pool Joint Authority 963
Total Reported as Part of Other Balance Sheet Amounts 1,218
Total Joint Venture Amounts $2,815
57
CITY OF HUNTINGTON BEAC
H
NOTES TO FINANCIAL STATEMENTS ,
FISCAL YEAR ENDING SEPTEMBER 30, 1997
18. JOINT VENTURES (CONTINUED):
a. Central Net Operations Authority: '
In July, 1992 the cities of Huntington Beach, Fountain Valley, Newport Beach, '
Westminster and the County of Orange formed the Central Net Operations Authority
(Central Net) as a training and dispatch joint-powers entity.
Central Net is governed by a four member board consisting of the Chief Executive Officer '
of each entity and, as an alternate, the Fire Chief or designee. Each year the board
adopts a budget and each entity pays a portion of the costs. Each entity's share is based '
on the number of recorded incidents during the preceding calendar year and the number
of authorized safety personnel in each entity. The breakdown for the year was:
Agency Percent
Huntington Beach 50.5%
Newport Beach 35.6%
Fountain Valley 13.9%
Total 100.0% '
The City will receive title to all communications equipment upon Central Net's termination
that occurs when two or more entities withdraw. The City's equity interest is recorded in
the General Fixed Assets Account Group. '
The financial activity for Central Net Operations Authority is recorded in an Agency Fund.
Separate, audited financial statements for CNOA are available from this office. '
b. Public Cable Television Authority:
In 1971 the Public Cable Television Authority (PCTA) was formed to oversee the cable '
television franchise agreement for the cities of Huntington Beach, Westminster, Stanton
and Fountain Valley. PCTA enters into one franchise agreement with a cable operator
and then enters into agreements with the individual cities. PCTA collects all franchise and '
utility tax revenue and remits them to the individual cities. PCTA is governed by a four
member body consisting of one councilmember from each city. Each participants share
of the PCTA are: '
Agency Percent
City of Huntington Beach 62.6%
City of Stanton 5.9% '
City of Fountain Valley 15.9%
City of Westminster 15.6%
Total 100.0%
The City's equity interest is recorded in the general fixed assets account group. Separate
audited financial statements are available from PCTA.
58
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
t18. JOINT VENTURES (CONTINUED):
c.West Orange County Water Board:
' The City is involved in a joint-venture with the cities of Westminster, Seal Beach and
Garden Grove formed in 1955 to provide for the operation and maintenance of water
transportation. WOCWB is governed by a five member board. The City appoints two
members while each other participant appoints one member each. Thus no participant
appoints a voting majority. The City acts as fiscal agent for WOCWB and retains custody
of all assets. Members must either be a member of a City Council or employee of a
' participant. The City records its share of WOCWB's assets as an asset of the Water
Fund and records the other participants' shares as deposits. At year end, the City
recorded the investment in WOCWB as part of the Water Fund's cash and investments.
WOCWB has no long-term debt and no plant, property and equipment.
Each participants'share of the assets, liabilities and fund equities are:
' A enc : Percent
City of Huntington Beach 52.5%
Ci of Garden Grove 7.8%
City of Seal Beach 14.3%
t City of Westminster 25.4%
Total 100.0%
Separate audited financial statements for June 30, 1997 are available for this agency from
' the City of Huntington Beach Administrative Services Department.
' d.San Joaquin Reservoir Trust:
In 1980 the City entered into a joint venture agreement with seven other entities for the
' operation and use of the San Joaquin Reservoir. The entity's official name is the San
Joaquin Reservoir Trust (the Reservoir Trust). The Metropolitan Water District of
Southern California (MWD) operates the reservoir and acts as administrator. Each of the
' owners contributes a portion of the capital and administrative expenditures:
' 59
F H NTI CITY O U NGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
18. JOINT VENTURES (CONTINUED):
Each participant's share of the Reservoir Trust's financial activity is:
Expense
Participant: Ownership% Allocation % '
Irvine Ranch Water Dist 46.26 47.26
Mesa Consolidated Water District 19.11 19.52
City of Huntington Beach 13.11 13.40 t
Metropolitan Water District of Southern 9.84 10.05
California
South Coast County Water District 1.64 1.67 '
Laguna Beach County Water District 5.12 5.22
City of Newport Beach 2.82 2.88
The Irvine Company 2.1 -
Total 100.00% 100.00% ,
Separate reviewed financial statements are available from the Reservoir Trust.
e. Big Independent Cities Excess Pool Joint Authority (BICEP): '
In 1988 the City and four other local cities formed BICEP to finance a claims payment pool for certain '
liability claims in excess of$1 million. BICEP's governing board has one representative from each city
(either a member of the City Council or designate). Any changes to the board must be approved by
current members. Each participating City pays an insurance premium to BICEP that is used to fund the
operating and debt service requirements. The participants share of the assets, liabilities, and fund equity '
are as follows:
Huntington Beach 21.43% '
Oxnard 15.63%
San Bernardino 19.09%
Santa Ana 30.27% '
Pomona 13.59%
Total 100.00%
Separate unaudited financial statements for BICEP are available. '
60
CITY OF HUNTINGTON BEACH
t NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
19. OTHER INFORMATION:
a. Expenditures Exceeding Appropriations
Expenditures exceeded appropriations at the departmental level in the funds shown (in
thousands):
General Fund:
t Community Services $11
Non-Departmental 90
Special Revenue Funds:
' Public Communications Fund:
City Administrator 3
Capital Outlay 2
Grant Fund:
' Police 91
Library Services 64
Park Acquisition and Development Fund:
' Community Services 130
Transportation Fund:
Public Works 58
' Debt Service Funds:
Reservoir Hill Assessment District 10
Public Financing Authority (Non- 249
Departmental
' Redevelopment Agency (Interest) 88
b. Fund and Accumulated Deficits:
' The following governmental funds had total fund deficits at year-end (in thousands):
Special Revenue Funds:
Library Services Fund $326
This deficit will be eliminated through increased development and fees.
The following proprietary funds had accumulated deficits at year-end (in thousands):
Enterprise Funds
Emerald Cove $139
' Refuse 37
Cultural Affairs 414
Internal Service Funds:
' Self-Insurance 8,650
t The deficits in the Emerald Cove and Refuse Collection Funds will be eliminated through
increased rents and user charges. The deficit in the Cultural Affairs Fund will be
eliminated through increased donations. The deficit in the Self Insurance Fund will be
eliminated by increasing charges to other funds.
t
61
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
19. OTHER INFORMATION (CONTINUED):
c.Supplemental Appropriations: ,
During the year various supplemental appropriations were necessary for items that were
originally budgeted. None of the supplemental appropriations caused fund deficits except
for those shown in note 19(b).
d. County of Orange Bankruptcy: '
In December, 1994, the County of Orange declared bankruptcy under Chapter 9 of the
United States Bankruptcy Code because of significant losses in its investment pool. At t
year-end, the remaining claims totaled $9,525,000. This receivable amount is offset by an
allowance for uncollectible accounts.
e. Tax and Revenue Anticipation Notes and Subsequent Events: '
At September 30, 1997 the City had $19,450,000 of Tax and Revenue Anticipation Notes '
outstanding bearing interest of 4.5% In October, 1997 (subsequent to year-end) the City
issued $18,325,000 of Tax and Revenue Anticipation Notes maturing September 30, 1998
with an interest rate of 4.5%.
20. CHANGES IN ACCOUNTING PRINCIPLE AND PRIOR PERIOD '
ADJUSTMENTS:
Below is a summary of the changes in accounting principle and prior period adjustments '
in the accompanying financial statements (in thousands):
Special Debt Capital '
General Revenue Service Projects
Governmental Funds: Fund Funds Funds Funds Total '
Fund Balance-October 1,
1996 $28,660 $ 11,076 $ 38,021 $ 36,072 $113,829
Changes in Accounting
Principles: '
Contributed Capital Reporting
Changes-note 20a - - - (2,572) (2,572)
Property Taxes-note 20b 6,500 - 955 224 7,679
Total Changes in Accounting '
Principles 6,500 - 955 (2,348) 5,107
Prior Period Adjustments:
Orange County Investment Pool '
-note 20c (777) (1,723) (641) (2,260) (5,401)
Recording of Sales Tax-note
20d 1,399 - - - 1,399
Total Prior Period '
Adjustments 622 (1,723) (641) (2,260) (4,002)
Fund Balance-October 1,
1996 as Restated $35,782 $ 9,353 $ 38,335 $ 31,464 $114,934 '
62
1
1
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
' 20. CHANGES IN ACCOUNTING PRINCIPLE AND PRIOR PERIOD
ADJUSTMENTS (CONTINUED):
t
' Proprietary Fund Retained Earnings Internal Service
(Accumulated Deficit): Enterprise Funds Funds Total
Retained Earnings(Accumulated
Deficit)-October 1, 1996 $ 6,420 $ (14,382) $ (7,962)
' Changes in Reporting of Capital Facilities Fund-note 20a 2,572 - 2,572
Contributed Capital Reporting
Changes-note 20a 20,474 13,429 33,903
' Total Changes in Accounting
Principles 23,046 13,429 36,475
Retained Earnings-October 1,
1996 as Restated $29,466 ($953) $28,513
' Proprietary Funds Contributed Internal Service
Capital: Enterprise Funds Funds Total
Balance-October 1, 1996 $41,942 $ 18,801 $ 60,743
Contributed Capital Reporting (20,474) (13,429) (33,903)
' Changes-note 20a
Balance-October 1, 1996 as $21,468 $ 5,372 $ 26,840
Restated
1
a. Change in Accounting Principle -Contributed Capital:
' During the year, the City changed its method of recording depreciation on assets acquired
via contributed capital. In prior years the City recorded depreciation expense on these
' assets as a reduction to retained earnings. The City now uses the depreciation addback
option and records depreciation on these assets as a reduction of contributed capital.
The City has three funds with depreciation expense on assets acquired via contributed
' capital; the Equipment Replacement Fund (an internal service fund), the Water Fund (an
enterprise fund), and the Cultural Affairs Fund (an enterprise fund).
' In prior years the City recorded the activity of the Water Facilities Fund in a capital
projects fund. This fund is used to record a capital facilities surcharge to customer water
bills. These funds must be used to construct major water facilities in the City. Beginning
tthis fiscal year the City will record these items as contributed capital in the Water Fund.
1
63
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
FISCAL YEAR ENDING SEPTEMBER 30, 1997
20. CHANGES IN ACCOUNTING PRINCIPLE AND PRIOR PERIOD
ADJUSTMENTS (CONTINUED): '
a. Change in Accounting Principle-Contributed Capital:
Below is a summary of the amounts and funds involved (in thousands): '
Changes to Changes to '
Retained Contributed
ENTERPRISE FUNDS: Earnings Capital '
Water Fund $20,449 ($23,021)
Cultural Affairs Fund 25 (25)
Total Enterprise Funds 20,474 (23,046) '
INTERNAL SERVICE FUNDS:
Equipment Replacement Fund $13,429 ($13,429)
TOTAL PROPRIETARY FUND TYPES $33,903 ($36,475) '
CAPITAL PROJECTS FUNDS:
Water Facilities Fund: $2,572
b. Change in Accounting Principle -Property Tax Accruals: '
The GASB issued Interpretation 5, "Property Tax Revenue Recognition in Governmental '
Funds" in November, 1997. This now permits the City to accrue property taxes generated
in a fiscal year, but not due until the after the fiscal year-end provided that they are
received in time to pay current year liabilities. Effective this year, the City will accrue
property taxes earned in one year, due and received in a subsequent year that are '
available to pay current year liabilities.
Below is a summary of the funds affected by this change (in thousands): '
General Fund $6,500
Redevelopment Agency Debt Service Fund 894
Reservoir Hill Assessment District Debt Service Fund 61 '
Total Debt Service Funds 955
Capital Projects Funds
Low-Income Housing Fund 224 '
Total Restatements Shown on Accompanying Financial
Statements $7,679
Changes not Shown on Accompanying Financial Statements:
Mello-Roos Assessment District Fund (An Agency Fund)-Shown '
as an Addition to Deposits Payable 74
Total Restatements due to changes in Property Tax Accruals $7,753
64
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
FISCAL YEAR ENDING SEPTEMBER 30, 1997
20. . CHANGES IN ACCOUNTING PRINCIPLE AND PRIOR PERIOD
tADJUSTMENTS (CONTINUED):
c. Prior Period Adjustment-Orange County Investment Pool:
' In prior years, the City recorded the amounts due from the Orange County Investment Pool
in governmental funds as an asset offset with a fund balance reserve amount. The method
' used in proprietary fund types was to fully write-off the amounts via a contra-asset account.
The City should have recorded the governmental fund receivables in the same manner as it
recorded the proprietary fund receivables.
' Beginning this year the City will fully record a contra-asset amount to the receivable on the
governmental fund balance sheet. The City will record any additional payments as revenue
when received. Below is a summary of the funds and amounts involved (in thousands):
' General Fund $ (777)
Special Revenue Funds:
' Gas Tax Fund (307)
Sewer Fund (578)
Drainage Fund (286)
Public Communications (12)
Park Acquisition and Development (32)
Transportation (420)
Traffic Impact Fee (43)
' Library Service Fund (45)
Total Special Revenue Funds (1,723)
Debt Service Funds:
' Redevelopment Agency (608)
Public Financing Authority (20)
Reservoir Hill Assessment District (13)
' Total Debt Service Funds (641)
Capital Projects Funds:
Building COPS (376)
' Redevelopment Agency (618)
Low-Income Housing (278)
Parking Authority (93)
' Capital Improvement (86)
Pier Rebuilding (371)
Holly-Seacliff (5)
' Pier Plaza (343)
Park Improvement (90)
Total Capital Project Funds (2,260)
' Total $ (5,401)
d. Prior Period Adjustment-Recording of Sales Tax:
' In prior years the City did not accrue$1,399,000 of sales tax in the General Fund.
65
1
FINANCIAL STATEMENTS OF INDIVIDUAL FUNDS AND ACCOUNT GROUPS
1
1
1
1
t
' The GENERAL FUND accounts for activity not required to be accounted for in another
fund.
1
t
1
CITY OF HUNTINGTON BEACH '
GENERALFUND
BALANCE SHEET '
SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS '
FOR SEPTEMBER 30, 1996
(IN THOUSANDS)
ASSETS : 1997 1996
Cash and Investments $ 23,796 $ 18,347
Taxes Receivable 12,214 10,095 '
Other Receivables 446 1,800
Due from Other Funds 155 2,257
Unbilled Receivables 669 601 '
Inventory 347 284
Advances to Other Funds 25,026 29,717
Deposits and Other Assets 249 196
TOTAL ASSETS $ 62,902 $ 63,297 '
LIABILITIES AND FUND EQUITY
LIABILITIES: '
Accounts Payable $ 2,463 $ 1,792
Other Accrued Liabilities 1,645 1,451
Deposits 185 801 '
Tax and Revenue Anticipation Notes 19,450 19,000
Interest Payable on Tax and Revenue Anticipation Notes 875 893
Due to Other Funds 133 625 '
Deferred Property Taxes - 6,256
Other Deferred Revenue 3,651 3,819
TOTAL LIABILITIES 28,402 34,637
FUND EQUITY: '
Reserved:
Reserved for Inventory 347 284
Reserved for Encumbrances 1,636 1,110 '
Reserved for Long-Term Receivables-Orange County Bankruptcy - 777
Reserved for Long-Term Receivables from Other Funds 21,375 25,898
Total Reserved Fund Equity 23,358 28,069 '
Unreserved:
Designated for Economic Uncertainties 3,000 591
Designated for Future Expenditures 1,959 -
Total Designated Fund Equity 4,969 691 '
Undesignated 6,183 -
Total Unreserved Fund Equity 11,142 591
TOTAL FUND EQUITY 34,600 28,660
TOTAL LIABILITIES AND FUND EQUITY $ 62,902 $ 63,297
Page 66
CITY OF HUNTINGTON BEACH
GENERALFUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDING SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDING SEPTEMBER 30, 1996
(IN THOUSANDS)
t Variance
Favorable
REVENUES: Budget Actual (Unfavorable) Total1996
Property Taxes $ 25,024 $ 25,039 $ 15 $ 24,600
Other Taxes 37,796 40,324 2,528 38,012
Licenses and Permits 4,801 5,633 832 3,898
' Fines, Forfeitures and Penalties 2,355 2,707 352 2,134
From Use of Money and Property 7,096 7,402 306 9,065
From Other Agencies 8,536 9,987 1,451 11,256
' Charges for Current Service 9,264 9,963 699 9,252
Other 536 349 (187) 688
TOTAL REVENUES 95,408 101,404 6,996 98,905
EXPENDITURES:
Current:
City Council 241 233 8 224
City Administrator 917 875 42 913
City Treasurer 784 781 3 743
City Attorney 1,652 1,565 87 1,436
City Clerk 524 470 54 488
' Administrative Services 4,260 4,208 52 4,181
Community Development 3,909 3,694 215 3,240
Fire 16,169 15,763 406 14,747
Police 32,606 32,489 117 31,953
' Community Services 6,816 6,827 (11) 6,834
Library Services 2,643 2,638 5 2,673
Public Works 15,942 15,673 269 14,345
' Non-Departmental 9,336 9,426 (90) 8,936
Capital Outlay 1,049 623 426 583
Debt Service:
Interest 900 900 - 915
' TOTAL EXPENDITURES 97,748 96,165 1,583 92,211
EXCESS OF REVENUES OVER (UNDER)EXPENDITURES (2,340) 5,239 7,679 6,694
OTHER FINANCING SOURCES(USES):
' Operating Transfers In 2,635 2,653 18 2,861
Proceeds of Long-Term Debt 257 257
Operating Transfers Out (9,972) (9,531) 441 (3,860)
' TOTAL OTHER FINANCING SOURCES (7,080) (6,621) 459 (999)
EXCESS OF REVENUES AND OTHER SOURCES(USES)OVER
(UNDER)EXPENDITURES AND OTHER USES (9,420) (1,382) 8,038 5,695
FUND BALANCE-BEGINNING OF YEAR 28,660 28,660 - 22,965
Cumulative Effect of Changes in Accounting Principle 6,500 6,500 - -
Prior Period Adjustment 622 622
FUND BALANCE AS RESTATED 35,782 35,782 - 22,965
RESIDUAL EQUITY TRANSFERS:Residual Equity Transfers In 100 100 -
FUND BALANCE-END OF YEAR $ 26,462 $ 34,500 $ 8,038 $ 28,660
Page 67
SPECIAL REVENUE FUNDS account for revenues and expenditures legally
restricted to a specific purpose.
' • The Gas Tax Fund accounts for moneys allocated under the Streets and Highways Code of California.
Expenditures may be made for any street-related purpose allowed under the code.
' • The Sewer Fund accounts for fees received from developers to construct and maintain sewer facilities.
• The Drainage Fund accounts for fees received from developers to construct and maintain the City's
' drainage system.
• The Public Communications Fund accounts for revenues from cable television franchises granted within
' the City's limits spent on community-oriented television.
• The Grants Fund accounts for federal, state and county grants not accounted for in other funds. The
granting agency restricts expenditures to appropriate items.
• The Park Acquisition and Development Fund accounts for fees received from developers to develop and
maintain the City's park system.
The Narcotics Forfeiture Fund accounts for moneys special law s received from the State of California for
• Y
' enforcement expenditures.
• The Transportation Fund accounts for moneys received from the countywide 1/2 cent sales tax and other
specific sources to be spent on transportation-related expenditures.
• The Air Quality Fund accounts for revenues from the local agencies used to improve local air quality.
' • The Traffic Impact Fee Fund accounts for moneys received from the traffic impact fee levied on new
developments in the city.
' • The Fourth of July Parade Fund accounts for the activities of the City's annual parade.
• The Library Services Fund accounts for revenues and expenditures related to the expanded Central
Library including some construction.
1
CITY OF HUNTINGTON BEACH '
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET ,
SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS
FOR SEPTEMBER 30, 1996 '
(IN THOUSANDS)
Public '
ASSETS: Gas Tax Sewer Drainage Communications
Cash and Investments $ 1,073 $ 2,544 $ 1,467 $ 1 '
Taxes Receivable 293 - - -
Other Receivables 17 69 93 76
Advances to Other Funds 979 250 475 -
Deposits and Other Assets - - - -
Due from Other Funds - - - -
TOTAL ASSETS $ 2,362 $ 2,863 $ 2,035 $ 77
LIABILITIES AND FUND EQUITY ,
LIABILITIES: '
Accounts Payable $ 112 $ 2 $ 8 $ 7
Other Accrued Liabilities 7 3 3 $ 6
Deposits - - - -
Due to Other Funds - - - 9 '
Deferred Revenue 479 120 233 -
TOTAL LIABILITIES 598 125 2" 22
FUND EQUITY: '
Reserved Equity:
Encumbrances 310 150 607 14
Long-Term Receivables-O.C. Bankruptcy - - - - '
Long-Term Receivables from Other funds 500 130 121 -
Total Reserved Fund Equity 810 280 728 14
Unreserved Equity:
Designated for Future Expenditures - 1,288 - - '
Undesignated 954 1,170 1,063 41
Total Unreserved Fund Equity(Deficits) 954 2,458 1,063 41
TOTAL FUND EQUITY (DEFICITS) 1,764 2,738 1,791 55 '
TOTAL LIABILITIES AND FUND EQUITY(DEFICITS) $ 2,362 $ 2,863 $ 2,035 $ 77
1
Page 68 '
' Park
Acquisition Traffic Fourth Library
and Narcotics Air Impact of July Services
Grants Development Forfeiture Transportation Quality Fee Parade Fund Total1997 Total1996
$ 1,465 $ 404 $ 263 $ 2,964 $ 334 $ 481 $ 19 $ 23 $ 11,038 $ 8,407
293
432 39 - 257 7 13 1 2 1,006 2,816
' 3,721 - 260 5,685 5,160
3,904 3,904 4,382
- 290 - - - - - - 290 195
$ 1,897 $ 8,358 $ 263 $ 3,221 $ 341 $ 754 $ 20 $ 25 $22,216 $20,960
$ 146 $ 26 $ - $ 129 $ 16 $ 103 $ 3 $ 1 $ 553 $ 189
33 12 14 2 1 2 83 83
- - 183 - - - - - 183 -
- - 10 = - - - 348 367 941
434 7,625 5 8,896 8,671
613 7,651 205 143 18 109 3 351 10,082 9,884
' 889 128 - 1,007 18 - 1 - 3,124 834
- - - - - - - - - 1,678
t - - = - - 255 - 1,006 751
889 128 1,007 18 255 1 4,130 3,263
- 579 - 1,864 - - 6 - 3,737 1,380
395 58 207 305 390 10 (326) 4,267 6,433
395 579 58 2,071 305 390 16 (326) 8,004 7,813
' 1,284 707 58 3,078 323 645 17 (326) 12,134 11,076
$1,897 $ 8,358 $ 263 $ 3,221 $ 341 $ 754 $ 20 $ 25 $22,216 $20,960
1
1
Page 69
CITY OF HUNTINGTON BEACH '
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES '
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDING SEPTEMBER 30, 1997
WITH COMPARATIVE TOTALS FOR THE '
YEAR ENDING SEPTEMBER 30, 1996
(IN THOUSANDS) '
Public
REVENUES: Gas Tax Sewer Drainage Communications
Other Taxes $ - $ - $ - $ -
Licenses and Permits - 110 444 From Use of Money and Property 36 156 90 From Other Agencies 4,085 - 107 363
Charges for Current Service - - 4 51 '
Other - 9 4 12
TOTAL REVENUES 4,121 275 649 426
EXPENDITURES: ,
Current:
City Administrator - - - 379
Community Development - - - - '
Fire - - - -
Police - - - -
Economic Development - - - -
Community Services - - - - '
Library Services - - - -
Public Works 337 283 192 -
Capital Outlay 1,023 25 230 34
TOTAL EXPENDITURES 1,360 308 422 413 '
EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 2,761 (33) 227 13
OTHER FINANCING SOURCES(USES) :
Operating Transfers In - - 33 - '
Operating Transfers Out (2,775) (50) (30) -
TOTAL OTHER FINANCING SOURCES(USES) (2,775) (50) 3 -
EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) '
EXPENDITURES AND OTHER USES (14) (83) 230 13
FUND BALANCES(DEFICITS)-BEGINNING OF YEAR 2,085 3,399 1,847 54
Prior Period Adjustment (307) (578) (286) (12) '
FUND BALANCES(DEFICITS)AS RESTATED 1,778 2,821 1,561 42
RESIDUAL EQUITY TRANSFERS
Residual Equity Transfers In - - - -
FUND BALANCES(DEFICITS)-END OF YEAR '
1
Page 70 '
' Park Traffic Fourth Library
Acquisition and Narcotics Air Impact of July Services
Grants Development Forfeiture Transportation Quality Fee Parade Fund Total1997 Total1996
' $ $ - $ $ 1,322 $ $ - $ = $ - $ 1,322 $ 1,315
1,409 330 2,293 2,613
406 40 - 154 13 28 1 156 1,080 1,000
' 3,887 126 562 210 197 - 9,537 6,576
430 485 978
48 - - - - - 200 63 336 697
4,341 1,575 562 1,686 210 358 201 649 15,053 13,179
561 - - - 41 - - - 981 1,227
' - 12
43 43- - - - - - -
575 - 349 - - - - - 924 697
' 1,042 = = - 474 1, 1,051
278 196 474 433
132 117 249 278
91 - - 391 - 143 - 4 1,441 1,952
' 1,465 1,234 - 539 16 - - - 4,566 5,931
3,909 1,512 349 930 57 143 196 121 9,720 11,581
432 63 213 756 153 215 5 528 5,333 1,598
' 1,021 - - - _ - 1,054 906
(431) (10) (14) (296) (3,606) (3,316)
590 (10) - - (14) - - (296) (2,552) (2,410)
1,022 53 213 756 139 215 5 232 2,781 (812)
262 686 (155) 2,742 184 473 12 (513) 11,076 11,857
' - (32) - (420) - (43) - (45) (1,723) -
262 654 (155) 2,322 184 430 12 (558) 9,353 11,857
- - - - - - - - - 31
' 1,284 $ 7 OT $ 58 3,0785 311,076
1
' Page 71
CITY OF HUNTINGTON BEACH '
SPECIAL REVENUE FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND '
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDING SEPTEMBER 30, 1997 '
(In Thousands)
GAS TAX '
Variance
Favorable t
REVENUES: Budget Actual (Unfavorable)
From Use of Money and Property $ 50 $ 36 $ (14)
From Other Agencies 3,435 4,085 650 '
TOTAL REVENUES 3,485 4,121 636
EXPENDITURES:
Current:
Public Works 386 337 49 '
Capital Outlay 1,405 1,023 382
TOTAL EXPENDITURES 1,791 1,360 431
EXCESS OF REVENUES OVER EXPENDITURES 1,694 2,761 1,067
OTHER FINANCING SOURCES (USES): ,
Operating Transfers Out (2,775) (2,775) -
TOTAL OTHER FINANCING USES (2,775) (2,775) - '
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER) EXPENDITURES AND OTHER USES (1,081) (14) 1,067
FUND BALANCE-BEGINNING OF YEAR 2,085 2,085 -
Prior Period Adjustment (307) (307)
FUND BALANCE AS RESTATED 1,778 1,778 -
FUND BALANCE- END OF YEAR $ 697 $ 1,764 $ 1,067
SEWER '
Variance
Favorable
g (U REVENUES: Budget Actual '
(Unfavorable)
Licenses and Permits $ 110 $ 110 $ -
From Use of Money and Property 100 156 56
Other - 9 9 '
TOTAL REVENUES 210 275 65
EXPENDITURES:
Current: '
Public Works 323 283 40
Capital Outlay 610 25 585
TOTAL EXPENDITURES 933 308 625 '
EXCESS OF REVENUES (UNDER) EXPENDITURES (723) (33) 690
OTHER FINANCING SOURCES (USES)
Operating Transfers Out (50) (50) - '
EXCESS OF REVENUE OVER(UNDER)
EXPENDITURES AND OTHER USES (773) (83) 690
FUND BALANCE-BEGINNING OF YEAR 3,399 3,399 -
Prior Period Adjustment (578) (578) - '
FUND BALANCE-END OF YEAR $ 2,048 $ 2,738 $ 690
Page 72 '
' CITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS
' STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
' FOR THE YEAR ENDING SEPTEMBER 30, 1997
(In Thousands)
(Continued)
' DRAINAGE
' Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
' Licenses and Permits $ 600 $ 444 $ (156)
From Use of Money and Property 40 90 50
From Other Agencies 34 107 73
Charges for Current Service - 4 4
' Other 2 4 2
TOTAL REVENUES 676 649 (27)
EXPENDITURES:
' Current:
Public Works 252 192 60
Capital Outlay 1,045 230 815
' TOTAL EXPENDITURES 1,297 422 875
EXCESS OF REVENUES (UNDER) EXPENDITURES (621) 227 848
OTHER FINANCING USES:
' Operating Transfers In 33 33 -
Operating Transfers Out (30) (30)
TOTAL OTHER FINANCING SOURCES(USES) 3 3 -
EXCESS OF REVENUE OVER(UNDER)
t EXPENDITURES AND OTHER USES (618) 230 848
FUND BALANCE -BEGINNING OF YEAR 1,847 1,847
Prior Period Adjustment (286) (286) -
' FUND BALANCE AS RESTATED 1,561 1,561 -
FUND BALANCE-END OF YEAR $ 943 $ 1,791 $ 848
' PUBLIC COMMUNICATIONS
Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
' From Use of Money and Property $ 2 $ - $ (2)
From Other Agencies 412 363 (49)
Charges for Current Service - 51 51
' Other 3 12 9
TOTAL REVENUES 417 426 9
EXPENDITURES:
' Current:
City Administrator 376 379 (3)
Capital Outlay 32 34 (2)
' TOTAL EXPENDITURES 408 413 (5)
EXCESS OF REVENUES OVER EXPENDITURES 9 13 4
FUND BALANCE -BEGINNING OF YEAR 54 54 -
Prior Period Adjustment (12) (12) -
' FUND BALANCE AS RESTATED 42 42 -
FUND BALANCE-END OF YEAR $ 51 $ 55 $ 4
' Page 73
CITY OF HUNTINGTON BEACH '
SPECIAL REVENUE FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND '
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDING SEPTEMBER 30, 1997 '
(In Thousands)
(Continued)
GRANTS
Variance '
Favorable
REVENUES: Budget Actual (Unfavorable)
From Use of Money and Property $ 362 $ 406 $ 44
From Other Agencies 6,731 3,887 (2,844) '
Other - 48 48
TOTAL REVENUES 7,093 4,341 (2,752)
EXPENDITURES: '
Current:
City Administrator 1,600 561 1,039
Fire 82 43 39 '
Police 484 575 (91)
Economic Development 2,918 1,042 1,876
Library Services 68 132 (64) '
Public Works 357 91 266
Capital Outlay 7,695 1,465 6,230
TOTAL EXPENDITURES 13,204 3,909 9,295
EXCESS OF REVENUES OVER(UNDER) '
EXPENDITURES (6,111) 432 6,543
OTHER FINANCING SOURCES (USES):
Operating Transfers In 1,021 1,021 - '
Operating Transfers Out (440) (431) 9
TOTAL OTHER FINANCING SOURCES 581 590 9
EXCESS OF REVENUE AND OTHER SOURCES OVER '
(UNDER) EXPENDITURES AND OTHER USES (5,530) 1,022 6,552
FUND BALANCE-BEGINNING OF YEAR 262 262 -
FUND BALANCE (DEFICIT) -END OF YEAR ($5,268) 1,284 $6,552 '
1
1
1
Page 74 t
CITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
' BUDGET AND ACTUAL
FOR THE YEAR ENDING SEPTEMBER 30, 1997
(In Thousands)
(Continued)
PARK ACQUISITION AND DEVELOPMENT
Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
Licenses and Permits $ 1,743 $ 1,409 $ (334)
From Use of Money and Property 15 40 25
From Other Agencies 126 126 -
TOTAL REVENUES 1,884 1,575 (309)
' EXPENDITURES:
Current:
Community Services 148 278 (130)
Capital Outlay 1,756 1,234 522
TOTAL EXPENDITURES 1,904 1,512 392
EXCESS OF REVENUES OVER(UNDER)
t EXPENDITURES (20) 63 83
OTHER FINANCING USES:
Operating Transfers Out (10) (10) -
EXCESS OF REVENUE OVER EXPENDITURES AND
OTHER USES (30) 53 83
FUND BALANCE-BEGINNING OF YEAR 686 686 -
Prior Period Adjustment (32) (32) -
' FUND BALANCE AS RESTATED 654 654 -
FUND BALANCE -END OF YEAR $ 624 $ 707 $ 83
' NARCOTICS FORFEITURE
Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
From Other Agencies $ 375 $ 562 $ 187
EXPENDITURES:
' Current:
Police 420 349 71
TOTAL EXPENDITURES 420 349 71
EXCESS OF REVENUES (UNDER) EXPENDITURES (45) 213 258
FUND BALANCE-BEGINNING OF YEAR (155) (155)
FUND BALANCE(DEFICIT)-END OF YEAR $ (200) $ 58 $ 258
tPage 75