HomeMy WebLinkAbout1999/2000 Comprehensive Annual Financial Report - CAFR - wit Ale
DIEHL, EVANS & COMPANY, LLP �a /v�
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS MICHAEL R.LUDIN,CPA
2121 ALTON PARKWAY,SUITE 100 CRAIG W. SPRAKER,CPANITIN P PATEL,CPA
IRVINE,CALIFORNIA 92606-4906 'PHILIP H.HOLTKAMP,CPA
(949)399 0600 •FAX(949)399-0610 THOMAS M.PERLOWSKI,CPA
HARVEY J.
I A
www.diehlevans.com April 4, 2001 ROFUSONALCORPORAnON
City Council
City of Huntington Beach
Huntington Beach, California
In planning and performing our audit of the financial statements of the City of Huntington Beach for the
year ended September 30, 2000, we considered its internal control structure in order to determine our
auditing procedures for the purpose of expressing our opinion on the financial statements and not to
provide assurance on the internal control structure. Our study and evaluation was more limited than would
be necessary to express an opinion on the system of internal accounting control taken as a whole and we
do not express such an opinion.
The management of the City is responsible for establishing and maintaining a system of internal
accounting control. In fulfilling this responsibility, estimates and judgments by management are required
to assess the expected benefits and related costs of control procedures. The objectives of a system are to
provide management with reasonable,but not absolute,assurance that assets are safeguarded against loss
from unauthorized use or disposition, and that transactions are executed in accordance with management's
authorization and recorded properly.
During our audit, we noted certain matters involving the internal control structure and its operation that
we wish to call to your attention. These matters are set forth below, together with our recommendations
for improvement.
Cash Reconciliations
We noted that monthly reconciliations of cash to the General Ledger were not completed timely for the
entire fiscal year resulting in adjustments to the general ledger after the end of the fiscal year. Late
completion of cash reconciliations may result in unauthorized transactions not being detected and resolved
in a timely manner. In addition, any financial reports prepared using the general ledger may not be
accurate, as adjustments recorded as part of the cash reconciliation effects these reports. We recommend
completion of cash reconciliations within 30 days after the end of the month.
- 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
Combining Financial Statements and Schedules of Individual Funds and Account Groups
Debt Service Funds: '
Combining Balance Sheet 79 ,
Combining Statements of Revenues, Expenditures and Changes in Fund Balance 79-
Combining Statement of Revenues, Expenditures and Changes in Fund Balance 80-82
Budget and Actual
Capital Protects Funds: '
Combining Balance Sheet 83-84
Combining Statements of Revenues, Expenditures and Changes in Fund Balance 85-86
Enterprise Funds: ,
Combining Balance Sheet 87
Combining Statement of Revenue, Expenses, and Changes in Retained Earnings 88
Combining Statement of Cash Flows 89 ,
Internal Service Funds:
Combining Balance Sheet 90
Combining Statements of Revenues, Expenses and Changes in Retained Earnings 91
(Accumulated Deficits) '
Combining Statement of Cash Flows 92
Trust and Agency Funds:
Combining Balance Sheet 93-94 ,
Agency Funds:
Combining Statement of Changes in Assets and Liabilities 95-96
Pension Trust Fund:
Statement of Plan Net Assets 96 '
Statement of Changes in Plan Net Assets 96
Expendable Trust Fund:
Balance Sheet 97 '
Statement of Revenues, Expenditures, and Changes in Fund Balance 97
General Fixed-Assets Account Group:
Schedule of General Fixed Assets 98 ,
Schedule of Changes in General Fixed Assets by Function and Activity 98
Schedule of General Fixed Assets by Function and Activity 98
General Long-Term Debt Account Group:
Schedule of Changes in General Long-Term Debt 99 '
11
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STATISTICAL SECTION
' Governmental Fund Revenues by Source-Last Ten Fiscal Years 100-101
Governmental Fund Expenditures by Function-Last Ten Fiscal Years 100-101
' Property Tax Levies and Collections-Last Ten Fiscal Years 100-101
Assessed and Actual Valuations of Property-Last Ten Fiscal Years 102
Property Tax Rates-All Direct and Overlapping Governments 102
General Obligation Bonded Debt Ratios-Last Ten Fiscal Years 102
' Construction Activity and Bank and Savings and Loan Activity-Last Ten Fiscal Years 103
Computation of Legal Debt Margin 103
Statement of Direct and Overlapping Bonded Debt 103
Demographic Statistics 104
Top Ten Secured Property Owners 104
Miscellaneous Statistics 104
111
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1 .
J � CITY OFHUNTINGTON BEACH
r Administrative Services Department
' 2000 Main St.
r Huntington Beach, CA 92648
r
rApril 27, 2001
The Honorable Mayor, City Council Members, and Citizens of
Huntington Beach, California
Mayor and Council Members:
rThis letter transmits the Comprehensive Annual Financial Report for the City of Huntington Beach for
the fiscal year ending September 30, 2000. The intent of this report is to provide a firm understanding
r of the City's financial position. The Administrative Services Department is responsible for the
accuracy of the information at the close of the 1999-2000 fiscal year.
r 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.
rThis report is organized into three sections:
• Introductory- The introductory section includes this transmittal letter, the City's organizational
chart and a list of the principal officials of the City.
r • 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.
' • Statistical — The statistical section contains summary information about the City generally
presented on a multi-year basis.
1
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r
Background '
The economy remained generally strong and in an expansion mode for 1999/2000. Local evidence of
this expanding economy includes the following projects:
• Completion of the Grand Coast Resort and Conference Center. '
• Completion of the Plaza Almeria mixed-used project.
• Initiation of the Summerland residential project. '
• Completion of Phase I of the McDonnell Center Business Park.
• Completion of the final building of the West County Commercial Center.
Despite the strop economy, the City continues to face challenges to maintain both a stront local
'p g y, y g oca
economy and a solid revenue base. The following concers will be monitored closely: ,
• Continued state action to erode City revenue sources.
• Management of the projected shortfall in infrastructure funding ,
• Resolution of the Howard Jarvis litigation
Financial 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 (see note 1 to the financial statements).
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. Budgetary control is at the departmental
level. A department head, with the Finance Officer'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. '
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General Fund Revenue - Total General Fund revenue, including one-time revenue, increased
' $10,943,000 or 9.5% from the prior year. Below is a table analyzing the revenue along with an
explanation of major changes (greater than 5% and $500,000):
1
Increase Percent
1999/2000 Percent of (Decrease) Increase
r Revenue Source:($in thousands) Amount Total from 1998199 (Decrease)
Property Taxes $ 31,914 25.2% $ 2,594 8.8
Other Taxes 49,567 39.1% 3,148 6.8
Licenses and Permits 6,615 5.2% (435) (6.2)
Fines and Forfeitures 4,018 3.2% 1,274 46.4
' From Use of Money and Property 8,433 6.7% 2,054 32.2
From Other Agencies 16,092 12.7% 4,312 36.6
' Charges for Current Service 9,024 7.1% (52) (0.6)
Other 947 0.7% (1,952) (67.3)
' Total $ 126,610 100% $ 10,943 9.5
r
Property tax, sales tax, revenue from use of money and property, and revenue from other
agencies generally increased due to the strong economy. Revenue from other agencies
increased largely due to vehicle licence fee increases. Revenue from fines and forfeitures
increased largely due to the street sweeping program instituted this year. Other revenue
decreased due to one-time revenue being recognized in the prior fiscal year.
Total General Fund expenditures increased $14,813,000, or 12.6%. Below is a table
analyzing the expenditures along with an explanation of significant fluctuations greater than
5% and $500,000):
1
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Increase Percent
199912000 Percent of (Decrease) Increase
EXPENDITURES:(in thousands) Amount Total from 1998199 (Decrease) '
City Council $ 277 0.2% $ 2 0.7
City Administrator 1,323 1.1% 209 15.8
City Treasurer 884 0.8% 64 7.2
City Attorney 1,772 1.5% 52 2.9 '
City Clerk 451 0.4% (23) (5.1)
Administrative Services 3,525 3.0% 649 18.4
Community Development - 0.0% (4,067) n/a r
Planning 2,169 1.8% 2,169 n/a
Building 2,384 2.0% 2,384 n/a ,
Fire 17,362 14.7% 1,817 10.5
Economic Development - 0.0% - -
Police 35,164 29.8% 1,436 4.1
Community Services 9,106 7.7% 1,478 16.2 '
Library Services 3,318 2.8% 361 10.9
Public Works 22,400 19.0% 5,507 24.6 '
Non-Departmental 14,980 12.7% 2,155 14.4
Capital Outlay 1,903 1.6% 600 31.5
Debt Service 845 0.7% 20 2.4
Total $ 117,863 100% $ 14,813 12.6%
Administrative Services expenditures increased due to the implementation of the B.E.A.C.H.
Project and full recognition of the Real Estate program. Fire expenditures increased due to
the implementation of an MOU with the Fire Association. Community Services expenditures
increased due to reorganization and special events. Non-departmental and capital outlay '
expenditures increased largely due to the B.E.A.C.H. Project. Public Works expenditures
increased due to reorganization and increased staffing. Community Development was split
into the Planning and the Building departments. ,
vii
CITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2000
(In Thousands)
' (Continued)
DRAINAGE
REVENUES: Budget Actual Variance
Licenses and Permits $ 400 $ 429 a; 29
From Use of Money and Property 20 93 73
' From Other Agencies 2 13 11
Other 3 3
TOTAL REVENUES 422 538 116
' EXPENDITURES:
Current:
Public Works 315 198 117
Capital Outlay 3 2 1
TOTAL EXPENDITURES 318 200 118
EXCESS OF REVENUES OVER EXPENDITURES 104 338 234
OTHER FINANCING SOURCES(USES):
' Proceeds of Bankruptcy Settlements - 203 203
Operating Transfers Out (1,923) (1,923)
TOTAL OTHER FINANCING SOURCES(USES) (1,923) (1,720) 203
EXCESS OF REVENUES AND OTHER SOURCES
' OVER(UNDER) EXPENDITURES AND OTHER USES (1,819) (1,382) 437
FUND BALANCE-BEGINNING OF YEAR 2,095 2,095
FUND BALANCE-END OF YEAR $ 276 $ 713 $ 437
PUBLIC COMMUNICATIONS
' REVENUES: Budget Actual Variance
From Other Agencies $ 475 $ 490 $ 15
EXPENDITURES:
Current:
City Administrator 535 437 98
Capital Outlay 72 216 (144)
Debt Service -
Principal 30 30
Interest 9 9
TOTAL EXPENDITURES 646 692 (46)
' EXCESS OF REVENUES OVER EXPENDITURES (171) (202) (31)
OTHER FINANCING SOURCES
Proceeds of Long-Term Debt - 185 185
' TOTAL OTHER FINANCING SOURCES - 185 185
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES (171) (17) 154
FUND BALANCE-BEGINNING OF YEAR 123 123 -
FUND BALANCE-END OF YEAR $ (48) $ 106 $ 154
' Page 72
CITY OF HUN ,TINGTON BEACH
SPECIAL REVENUE FUNDS '
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL '
FOR THE YEAR ENDED SEPTEMBER 30, 2000
(In Thousands)
(Continued) ,
GRANTS
REVENUES: Budget Actual Variance
From Use of Money and Property $ 280 $ 600 $ 320
From Other Agencies 12,988 6,931 (6,057) '
Other - 4,119 4,119
TOTAL REVENUES 13,268 11,650 (1,618)
EXPENDITURES:
Current: '
Fire 159 54 105
Police 1,554 668 886
Economic Development 6,912 4,887 2,025 '
Library Services 68 34 34
Public Works 1,147 494 653
Capital Outlay 11,767 4,003 7,764
Debt Service: - ,
Principal - 55 (55)
Interest - 25 (25)
TOTAL EXPENDITURES 21,607 10,220 11,387 '
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (8,339) 1,430 9,769
OTHER FINANCING SOURCES(USES): '
Operating Transfers In 4,598 4,598 -
Proceeds of Long-Term Debt 2,570 2,570 -
Operating Transfers Out (2,000) (2,085) (85)
TOTAL OTHER FINANCING SOURCES(USES) 5,168 5,083 (85) '
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER) EXPENDITURES AND OTHER USES (3,171) 6,513 9,684
FUND BALANCE-BEGINNING OF YEAR 2,719 2,719 -
FUND BALANCE(DEFICIT)-END OF YEAR ($452) $9,232 $9,684
Page 73 ,
' CI F HUNTINGTON BEACH CITY O H
' SPECIAL REVENUE FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2000
(In Thousands)
(Continued)
PARK ACQUISITION AND DEVELOPMENT
REVENUES: Budget Actual Variance
Licenses and Permits $ 400 $ 288 $ (112)-
From Use of Money and Property 99 99
From Other Agencies 68 68 -
' TOTAL REVENUES 468 455 (13)
EXPENDITURES:
Current:
Community Services 375 240 135
Capital Outlay 619 619
TOTAL EXPENDITURES 994 859 135
EXCESS OF REVENUES (UNDER)EXPENDITURES (526) (404) 122
' OTHER FINANCING SOURCES(USES):Operating Transfers In 194 194 -
Proceeds of Bankruptcy Settlements - 22 22
Operating Transfers Out (68) (68)
' TOTAL OTHER FINANCING SOURCES(USES) 126 148 22
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER) EXPENDITURES AND OTHER USES (400) (256) 144
FUND BALANCE-BEGINNING OF YEAR 1,565 1,565 -
FUND BALANCE-END OF YEAR $ 1,165 $ 1,309 $ 144
NARCOTICS FORFEITURE
' REVENUES: Budget Actual Variance
From Other Agencies $ 390 $ 177 $ (213)
EXPENDITURES:
' Current:
Police 437 308 129
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (47) (131) (84)
FUND BALANCE(DEFICIT) -BEGINNING OF YEAR (5) (5)
FUND BALANCE(DEFICIT)-END OF YEAR $ (52) $ (136) $ (84)
1
' Page 74
CITY OF HUNTINGTON BEACH '
SPECIAL REVENUE FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND '
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2000 '
(In Thousands)
(Continued)
TRANSPORTATION
REVENUES: Budget Actual Variance '
Other Taxes $ 1,475 $ 1,805 $ 330
Licenses and Permits - 26 26 '
From Use of Money and Property 160 221 61
From Other Agencies 2,002 171 (1,831)
Other - 1 1
TOTAL REVENUES 3,637 2,224 (1,413) ,
EXPENDITURES:
Current:
Public Works 1,363 1,075 288 ,
Capital Outlay 3,922 2,518 1,404
TOTAL EXPENDITURES 5,285 3,593 1,692
EXCESS OF REVENUES(UNDER) EXPENDITURES (1,648) (1,369) 279
OTHER FINANCING SOURCES(USES):
Operating Transfers In 20 - (20)
Proceeds of Bankruptcy Settlements - 299 299
Operating Transfers Out (100) (100) '
TOTAL OTHER FINANCING SOURCES(USES) (80) 199 279
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER) EXPENDITURES AND OTHER USES (1,728) (1,170) 558
AND OTHER USES '
FUND BALANCE-BEGINNING OF YEAR 4,013 4,013 -
FUND BALANCE-END OF YEAR $ 2,285 $ 2,843 $ 558
AIR QUALITY
REVENUES: Budget Actual Variance ,
From Use of Money and Property $ 20 $ 51 $ 31
From Other Agencies 200 215 15 '
TOTAL REVENUES 220 266 46
EXPENDITURES:
Current:
City Administrator 114 39 75 '
Capital Outlay 520 19 501
TOTAL EXPENDITURES 634 58 576
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (414) 208 622 '
FUND BALANCE-BEGINNING OF YEAR 736 736
FUND BALANCE-END OF YEAR $ 322 $ 9" $ 622
Page 75
' CITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS
' STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
' FOR THE YEAR ENDED SEPTEMBER 30, 2000
(In Thousands)
(Continued)
' TRAFFIC IMPACT FEE
' REVENUES: Budget Actual Variance
Licenses and Permits $ 200 $ 612 $ 412
' From Use of Money and Property 40 97 57
Other 283 283
TOTAL REVENUES 240 992 752
EXPENDITURES:
' Current:
Public Works 139 71 68
Capital Outlay 838 838 -
' TOTAL EXPENDITURES 977 909 68
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (737) 83 820
' OTHER FINANCING SOURCES: -
Proceeds of Bankruptcy Settlements 31 31
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES (737) 114 851
' FUND BALANCE-BEGINNING OF YEAR 1,384 1,384 -
FUND BALANCE -END OF YEAR $ 647 $ 1,498 $ 851
FOURTH OF JULY PARADE
REVENUES: Budget Actual Variance
From Use of Money and Property $ 1 $ 2 $ 1
Other 200 273 73
TOTAL REVENUES 201 275 74
EXPENDITURES:
' Current:
Community Services 252 255 (3)
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (51) 20 71
' FUND BALANCE-BEGINNING OF YEAR 33 33 -
FUND BALANCE-END OF YEAR $ (18) $ 53 $ 71
' Page 76
CITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS '
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL '
FOR THE YEAR ENDED SEPTEMBER 30, 2000
(In Thousands)
(Continued) '
LIBRARY SERVICE
REVENUES: Budget Actual Variance '
From Use of Money and Property $ 306 $ 291 $ (15)
Charges for Current Service 393 633 240
Other 5 8 3 ,
TOTAL REVENUES 704 932 228
EXPENDITURES:
Current: '
Library Services 220 233 (13)
EXCESS OF REVENUES OVER EXPENDITURES 484 699 215
OTHER FINANCING SOURCES(USES):
Operating Transfers In 290 290 - '
Proceeds of Bankruptcy Settlements - 31 -
Operating Transfers Out (311) (311) 31
TOTAL OTHER FINANCING SOURCES(USES) (21) 10 31 '
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES 463 709 246
FUND DEFICIT-BEGINNING OF YEAR 94 94 - '
FUND DEFICIT-END OF YEAR $ 557 $ 803 $ 246
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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 ENDED SEPTEMBER 30, 2000
' (In Thousands)
(Continued)
' TOTAL SPECIAL REVENUE FUNDS
REVENUES: Budget Actual Variance
' Other Taxes $ 1,475 $ 1,805 $ 330
Licenses and Permits 1,050 1,439 389
From Use of Money and Property 882 1,656 774
' From Other Agencies 19,935 13,319 (6,616)
Charges for Current Service 393 633 240
Other 205 4,690 4,485
TOTAL REVENUES 23,940 23,542 (398)
' EXPENDITURES:
Current:
City Administrator 649 476 173
' Fire 159 54 105
Police 1,991 976 1,015
Economic Development 6,912 4,887 2,025
Community Services 627 495 132
' Library Services 288 267 21
Public Works 4,335 2,629 1,706
Capital Outlay 21,470 8,675 12,795
' Debt Service -
Principal 30 85 (55)
Interest 9 34 (25)
TOTAL EXPENDITURES 36,470 18,578 17,892
' EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (12,530) 4,964 17,494
OTHER FINANCING SOURCES(USES):
' Operating Transfers In 5,102 5,082 (20)
Proceeds of Long-Term Debt 2,570 2,755
Proceeds of Bankruptcy Settlements - 1,216 1,370
' Operating Transfers Out (6,602) (6,687) (54)
TOTAL OTHER FINANCING SOURCES(USES) 1,070 2,366 1,296
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER) EXPENDITURES AND OTHER USES (11,460) 7,330 18,790
' FUND BALANCE-BEGINNING OF YEAR 16,778 16,778 -
FUND BALANCE -END OF YEAR $ 5,318 $ 24,108 $ 18,790
' Page 78
Debt Service Funds account for the receipts for and payment of general
' long-term debt.
• The Redevelopment Agency Fund records the property tax increment revenues
received from Redevelopment projects. The tax increment repays the debt of the
' Redevelopment Agency.
' • The Public Financing Authority Fund records the debt service activity of the Huntington
Beach Public Financing Authority.
• The Reservoir Hill 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.
t
CITY OF HUNTINGTON BEACH ,
DEBT SERVICE FUNDS
COMBINING BALANCE SHEET '
SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999
(IN THOUSANDS) '
Redevelopment Public Financing Reservoir Hill Civic Improvement
ASSETS: Agency Authority Assessment District Corporation Totals 2000 Totals 1999
Cash and Investments $ 9,513 $ $ 163 $ - $ 9,676 $ 2,624 '
Cash With Fiscal Agent 790 4,274 114 2,919 8,097 6,572
Taxes Receivable 1,500 55 - 1,555 1,299
Other Receivables 98 50 4 28 180 233
Advances to Other Funds 18,894 - 18,894 19,324
TOTAL ASSETS $ 11,901 $ 23,218 $ 336 $ 2,947 $ 38,402 $ 30,052 ,
LIABILITIES AND FUND EQUITY
LIABILITIES:
Accounts Payable $ 21 $ - $ 2 $ - $ 23 $ 73 ,
FUND BALANCE:
Reserved Balance:
Long-Term Receivables from Other Funds 18,894 - - 18,894 19,324
Debt Service 11,880 4.324 334 2,947 19,485 10,655 '
Total Reserved Fund Balance 11,880 23,218 334 2,947 38,379 29,979
TOTAL FUND BALANCE 11,880 23,218 334 2,947 38,379 29,979
TOTAL LIABILITIES AND FUND EQUITY $ 11,901 $ 23,218 $ 336 $ 2,947 $ 38,402 $ 30,062
t
DEBT SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES, ,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS FOR THE ,
YEAR ENDED SEPTEMBER 30, 1999
(IN THOUSANDS)
t
Redevelopment Public Financing Reservoir Hill Civic Improvement
REVENUES: Agency Authority Assessment District Corporation Totals 2000 Totals 1999
Property Taxes $ 5,543 $ - $ 188 $ - $ 5,731 $ 5,025 '
From Use of Money and Property 384 1,972 22 169 2,547 2.388
From Other Agencies 20 - - - 20 30
TOTAL REVENUES 6,947 1,972 210 169 8,298 7,443
EXPENDITURES:
Current: '
Economic Development 264 - - - 264 -
Non-Departmental 627 15 - 642 32
Debt Service:
Principal 1,633 810 215 1,075 3,733 11,560
Interest 7,151 2,299 88 1,762 11,300 11,622 '
TOTAL EXPENDITURES 9,048 3,736 318 2,837 15,939 23,214
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (3,101) (1,764) (108) (2,668) (7,641) (16,771)
OTHER FINANCING SOURCES(USES):
Operating Transfers In - 742 - 2,727 3,469 15,542 '
Proceeds of Long-Term Debt 11,202 18,310 - - 29,512 3,466
Proceeds of Bankruptcy 433 - 9 442 -
Payments to Refunding Escrow - (4,573) - (4,573) (10.001)
Operating Transfers Out (1,109) (11,700) (12,809) (968)
TOTAL OTHER FINANCING SOURCES(USES) 10,626 2,779 9 2,727 16,041 8,039 ,
EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES 7,425 1,016 (99) 59 8,400 (7,732)
FUND BALANCE-BEGINNING OF YEAR 4,466 22,203 433 2,888 29,979 37,711
FUND BALANCE-END OF YEAR $ 11,880 $ 23,218 $ 334 $ 2,947 $ 38,379 $ 29,979
Page 79 ,
' CITY OF HUNTINGTON BEACH
DEBT SERVICE FUNDS
' COMBINING STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2000
(In Thousands)
' Redevelopment Agency
' REVENUES: Budget Actual Variance
Property Taxes $5,257 $5,543 $ 286
From Use of Money and Property 244 384 140
From Other Agencies - 20 20
TOTAL REVENUES 5,501 5,947 446
EXPENDITURES:
Current:
Economic Development 984 264 720
Debt Service:
Principal 280 1,633 (1,353)
' Interest 9,612 7,151 2,461
TOTAL EXPENDITURES 10,876 9,048 1,828
EXCESS OF REVENUES(UNDER)EXPENDITURES (5,375) (3,101) 2,274
OTHER FINANCING SOURCES(USES)
Proceeds of Long-Term Debt 11,170 11,202 32
Proceeds of Bankruptcy Settlements 433 433
Operating Transfers Out (1,058) (1,109) (51)
' TOTAL OTHER FINANCING SOURCES(USES) 10,112 10,526 414
EXCESS OF REVENUE AND OTHER SOURCES OVER
(UNDER) EXPENDITURES AND OTHER USES 4,737 7,425 2,688
FUND BALANCE-BEGINNING OF YEAR 4,455 4,455 -
FUND BALANCE-END OF YEAR $ 9,192 $ 11,880 $ 2,688
Public Financing Authority
' REVENUES: Budget Actual Variance
From Use of Money and Property $ 1,929 $ 1,972 $ 43
' EXPENDITURES: -
Current:
Non-Departmental 627 627
Debt Service:
' Principal 810 810 -
Interest 2,278 2,299 (21)
TOTAL EXPENDITURES 3,715 3,736 (21)
' 'EXCESS OF REVENUES(UNDER)EXPENDITURES (1;786) (1,764) 22
OTHER FINANCING SOURCES(USES):
Operating Transfers In 740 742 2
Proceeds of Long-Term Debt 18,310 18,310 -
' Payments to Refunding Escrow (4,573) (4,573)
Operating Transfers Out (11,700) (11,700)
TOTAL OTHER FINANCING SOURCES(USES) 2,777 2,779 2
EXCESS OF REVENUES AND OTHER SOURCES OVER -
(UNDER)EXPENDITURES AND OTHER USES 991 1,015 24
FUND BALANCE-BEGINNING OF YEAR 22,203 22,203
FUND BALANCE-END OF YEAR $ 23,194 $ 23,218 $ 24
Page 80
CITY OF HUNTINGTON BEACH
DEBT SERVICE FUNDS '
COMBINING STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2000 '
(In Thousands)
Reservoir Hill Assessment District '
REVENUES: Budget Actual Variance '
Property Taxes 5
From Use of Money and Property 23 22 (1)
TOTAL REVENUES 273 210 (63) ,
EXPENDITURES:
Current:
Non-Departmental 9 15 (6)
Debt Service: '
Principal 65 215 (150)
Interest 108 88 20
TOTAL EXPENDITURES 182 318 (136) '
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 91 (108) (199)
OTHER FINANCING SOURCES:
Proceeds of Bankruptcy Settlements - 9 9 ,
EXCESS OF REVENUE OVER EXPENDITURES AND
OTHER SOURCES 91 (99) (190)
FUND BALANCE-BEGINNING OF YEAR 433 433 -
FUND BALANCE-END OF YEAR $ 524 $ 334 $ (190) '
Civic Improvement Corporation
REVENUES: Budget Actual Variance
From Use of Money and Property $ 130 $ 169 $ 39 ,
EXPENDITURES:
Debt Service:
Principal 1,075 1,075 -
Interest 1,748 1,762 (14) '
TOTAL EXPENDITURES 2,823 2,837 (14)
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (2,693) (2,668) 25
OTHER FINANCING SOURCES '
Operating Transfers In 2,695 2,727 32
EXCESS OF REVENUES AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES 2 59 57
FUND BALANCE-BEGINNING OF YEAR 2,888 2,888 '
FUND BALANCE-END OF YEAR $ 2,890 $ 2,947 $ 57
Page 81
CITY OF HUNTINGTON BEACH
DEBT SERVICE FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
' FOR THE YEAR ENDED SEPTEMBER 30, 2000
(Continued)
(In Thousands)
TOTAL DEBT SERVICE FUNDS
REVENUES: Budget Actual Variance
' Property Taxes $ 5,507 $ 5,731 $ 224
From Use of Money and Property 2,326 2,547 221
From Other Agencies - 20 20
' TOTAL REVENUES 7,833 8,298 465
EXPENDITURES:
Current:
Economic Development 984 264 720
' Non-Departmental 636 642 (6)
Debt Service:
Principal 2,230 3,733 (1,503)
' Interest 13,746 11,300 2,446
TOTAL EXPENDITURES 17,596 15,939 1,657
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (9,763) (7,641) 2,122
' OTHER FINANCING SOURCES(USES):
Operating Transfers In 3,435 3,469 34
Proceeds of Long-Term Debt 29,480 29,512 32
Proceeds of Bankruptcy Settlements - 442 442
' Payments to Refunding Escrow (4,573) (4,573)
Operating Transfers Out (12,758) (12,809) (51)
TOTAL OTHER FINANCING SOURCES(USES) 15,584 16,041 457
' EXCESS OF REVENUES AND OTHER SOURCES OVER -
(UNDER)EXPENDITURES AND OTHER USES 5,821 8,400 2,579
FUND BALANCE-BEGINNING OF YEAR 29,979 29,979
FUND BALANCE-END OF YEAR $ 35,800 $ 38,379 $ 2,579
1
' Page 82
Capital Projects Funds account for the acquisition and construction of capital
assets other than those financed by proprietary fund types.
• The Redevelopment Agency 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 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 Fund accounts for expenditures made from the
' Community Facilities District bonds. y
' • 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 Library Cultural Facilities Fund accounts for the continued costs of the expansion
of the City's Library facilities related to the City's growth.
CITY OF HUNTINGTON BEACH '
CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS
FOR SEPTEMBER 30, 1999 '
(IN THOUSANDS)
Redevelopment Low-Income Capital '
ASSETS: Agency Housing Improvement Pier Rebuilding
Cash and Investments $ 4,587 $ 4,090 $ 3,801 $ 1,430 '
Cash With Fiscal Agent - - 6,612 -
Taxes Receivable 74 - - -
Other Receivables 58 80 54 19
Long-Term Receivables 2,343 - - - ,
Advances to Other Funds - 2,094 422 -
Land Held for Resale(Net) 14,516 885 - -
Due from Other Funds - - - -
TOTAL ASSETS $ 21,578 $ 7,149 $ 10,889 $ 1,449 '
LIABILITIES AND FUND BALANCE
LIABILITIES:
Accounts Payable $ 1,321 $ 2 $ 58 $ 5
Other Accrued Liabilities 21 - 19 4
Deposits 134 - - -
Due to Other Funds - - -
Deferred Revenue - - 222
TOTAL LIABILITIES 1,476 2 299 9
FUND BALANCE:
Reserved Fund Balance: '
Land Held for Resale 14,516 885 - -
Encumbrances 751 26 889 41
Long-Term Receivables 2,343 2,094 200 - '
Capital Projects 162 - 6,612 -
Total Reserved Fund Balance 17,772 3,005 7,701 41
Unreserved Fund Balance:
Designated for Future Expenditures - 724 - 316
Undesignated 2,330 3,418 2,889 1,083
Total Unreserved Fund Balance 2,330 4,142 2,889 1,399
TOTAL FUND BALANCE 20,102 7,147 10,590 1,440
TOTAL LIABILITIES AND FUND BALANCE $ 21,578 $ 7,149 $ 10,889 $ 1,449 '
Page 83
' Library
Mello-Roos Holly Cultural
Assessment District Parking In-Lieu SeacliHe Pier Plaza Facilities Totals 2000 Totals 1999
$ 10 $ 363 $ 456 $ - $ 610 $ 15,347 $ 10,425
323 9 6,944 315
- - - - - 74 60
' = 7 4 = 12 234 363
2,343343 3,238
2,516 2,493
15,401 17,018
' - - - - - - 484
$ 333 $ 370 $ 460 $ 9 $ 622 $ 42,869 $ 34,396
149 $ 2 $ 5 $ 1,542 $ 452
- 38 - 82 32
- - 134 129
' = - 413 - 413 499
222 924
149 453 5 2,393 2,036
' - - - - - 15,401 17,018
136 12 6 1,861 2,688
- � _ - = 4,637 4,807
6,774 2,879
136 12 6 28,673 27,392
- - 175 - - 1,215 2,449
333 370 (456) 611 10,578 2,519
333 370 175 (456) 611 11,793 4,968
333 370 311 (444) 617 40,466 32,360
$ 333 $ 370 $ 460 $ 9 $ 622 $ 42,859 $ 34,396
1
' Page 84
CITY OF HUNTINGTON BEACH '
CAPITAL PROJECTS FUNDS '
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED SEPTEMBER 30, 2000 '
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30, 1999 ,
(IN THOUSANDS)
Redevelopment Low-Income Capital '
REVENUES: Agency Housing Improvement Pier Rebuilding
Other Taxes $ 822 $ - $ - $ -
Licenses and Permits - - $ -From Use of Money and Property 717 392 94 346 ,
From Other Agencies - - - -
Charges for Current Service - - - 310
Other 84 5 19 25
TOTAL REVENUES 1,623 397 113 681
EXPENDITURES:
Current:
City Attorney 455 - - -
Administrative Services - - 34
Planning - - 11 -
Fire - - 55 -
Economic Development 1,447 151 - -
Community Services - - - 127 ,
Library Services - - - -
Public Works - - - -
Non-Departmental 1,263 - 1,687 -
Capital Outlay 1,638 553 2,001 1,003
Debt Service
Principal - - - 2,500
Interest 1,212 - 88 1,500 '
TOTAL EXPENDITURES 6,015 704 3,876 5,130
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (4,392) (307) (3,763) (4,449)
OTHER FINANCING SOURCES(USES):
Operating Transfers in 2,000 1,109 12,117 4,000
Proceeds of Long-Term Debt 1,536 - 880 -
Bankruptcy Proceeds 440 198 61 263
Operating Transfers Out (74) (35) (1,300) (86) '
TOTAL OTHER FINANCING SOURCES(USES) 3,902 1,272 11,758 4,177
EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES (490) 965 7,995 (272)
FUND BALANCE(DEFICIT)-BEGINNING OF YEAR 20,592 6,182 2,596 1,712 '
FUND BALANCE(DEFICIT)-END OF YEAR $ 20,102 S 7,147 $ 10,590 $ 1,440
I
Page 85 ,
Library
Mello-Roos Holly Cultural
Assessment District Parking In-Lieu Seacliffe Pier Plaza Facilities Totals 2000 Totals 1999
$ - $ - $ - $ - $ - $ 822 $ 767
15 - 1 468 484 299
17 22 8 334 37 1,967 1,464
2,590 2,590 1,297
110 - - 420 2
' - - - - - 133 275
17 37 2,708 335 605 6,416 4,104
- 455 249
34
- - - 55 -
' _ = - - 1,598 1,424
87 214 95
399 399 267
111 123 - 234 22
- _ - 2,950 41
2,896 8 8,099 11,376
' - - 2, 00 51
2,800 4,707
3,007 210 407 19,349 18,232
17 37 (299) 125 98 (12,933) (14,128)
' - - - - - 19,226 10,142
2,416 1,168
3 244 - 1,209 -
- (317) (1,812) (1302)
3 (73) 21,039 10,008
17 37 (296) 62 98 8,106 (4,120)
316 333 607 (496) S19 32,360 36,480
$ 333 $ 370 $ 311 $ (444) $ 617 $ 40,466 $ 32,360
-
' Page 86
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 wished
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 Hazmat Service Fund accounts for user fees charged for City's hazardous material
' program.
• The Cultural Affairs Fund accounts for the operation of the City's Art Center.
CITY OF HUNTINGTON BEACH '
ENTERPRISE FUNDS
COMBINING BALANCE SHEET ,
SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS
FOR SEPTEMBER 30, 1999 '
(IN THOUSANDS)
ASSETS: '
Emerald Emergency
Cove Fire Refuse Hazmat Cultural
Current Assets: Water Utility Housing Medical Collection Service Affairs Totals 2000 Totals 1999
Cash and Investments $ 34,674 $ 2,116 $ 659 $ - $ 159 $ 87 $ 37,695 $ 24,237 '
Accounts Receivable 1,510 - 1,174 436 - - 3,120 2,258
Interest Receivable 620 41 16 1 1 679 187
Due from Other Funds - - - - 3,084
Inventory 912 - 912 1,301
Unbilled Receivables 3,603 - 1,132 4,735 1,964 '
Total Current Assets 41,319 2,157 1,849 1,569 160 87 47,141 33,031
Other Assets:
Cash With Fiscal Agent - - - - - - 459
Advances to Other Funds 2.735 2,735 6,528
Total Other Assets 2,735 2,735 6,987 '
Plant,Property and Equipment:
Land 391 1,288 759 2,438 2.438
Buildings 2,708 4,102 1,249 8,059 8,059
Machinery and Equipment 62,461 601 20 5 63,087 68,881 '
Construction in Progress 5,377 - - 5,377 7,731
Subtotal 70,937 5,390 601 20 2,013 78,961 77,109
Less Accumulated Depreciation (36,195) (1,231) (353) (12) (130) (37.921) (36,278)
Total Plant,Property and Equipment 34,742 4,159 248 8 1,883 41,040 40,831
TOTAL ASSETS $ 78,796 $ 6,316 $ 2,097 $ 1,569 $ 168 $ 1,970 $ 90,916 $ 80,849
LIABILITIES AND FUND EQUITY
LIABILITIES: '
Current Liabilities:
Accounts Payable $ 1,473 $ 2 $ 169 $ 241 $ 5 $ 64 $ 1,954 $ 2,156
Accrued Payroll 151 - 49 7 - 3 210 179
Accrued Interest 3 - - 3 45 '
Deposits 1,531 20 - - 1,551 1,657
Due to Other Funds - - 823 823 1,456
Current Portion of Long-Terre Debt 9 9 148
Total Current Liabilities 3.167 22 218 1,071 5 67 4,550 5,641 ,
Long-Term Liabilities:
Certificates of Participation - - - - - 5,105
Compensated Absences 319 32 39 7 3 400 333
Leases Payable 9 - - - - 9 47
Advances from Other Funds - 244 - 244 243 ,
Less Current Portion (9) (9) (148)
Total Long-Terre Liabilities 319 244 32 39 7 3 644 5,580
TOTAL LIABILITIES 3,486 266 250 1,110 12 70 5,194 11,221
FUND EQUITY: '
Contributed Capital 36,718 5,860 311 - 1,883 44,772 33,610
Retained Earnings 38,592 190 1.536 459 156 17 40,950 36,018
TOTAL FUND EQUITY 75,310 6,050 1,847 459 156 1,900 85,722 69,628
TOTAL LIABILITIES AND FUND EQUITY S 78,796 $ 6,316 $ 2,097 $ 1,569 $ 168 $ 1,970 S 90,916 S 80,649 '
Page 87 '
CITY OF HUNTINGTON BEACH
ENTERPRISE FUNDS
' COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS (ACCUMULATED DEFICIT)
' FOR THE YEAR ENDED SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
1 (IN THOUSANDS)
Emerald Emergency
Cove Fire Refuse Hazmat Cultural
' OPERATING REVENUES: Water Utility Housing Medical Collection Service Affairs Totals 2000 Totals 1999
Sales $ 21,913 $ - $ $ $ $ - $ 21,913 $ 17,839
Rentals 654 654 661
Fees for Service - 3,807 8,843 180 - 12,830 12,311
Other 1,083 3 51 - - 172 1,309 1,319
TOTAL OPERATING REVENUES 22,996 657 3,858 8,843 180 172 36,706 32,130
OPERATING EXPENSES:
Water Purchases 4,541 - 4,541 4,019
Supplies and Operations 3,887 390 3,419 8,131 121 255 16,203 18,324
' Engineering 837 - - - - - 837 810
Production 4,833 4,833 4,278
Maintenance and Water Meters 4,096 4,096 2,169
City Attorney - - - 5
' Water Quality 291 291 245
In-Lieu Taxes to General Fund 4,102 4,102 2,808
Depreciation 1,487 82 68 4 24 1,665 1,584
TOTAL OPERATING EXPENSES 24,074 472 3,487 8,131 125 279 36,568 34,242
OPERATING INCOME(LOSS) (1,078) Ills 371 712 55 (107) 138 (2.112)
' NON-OPERATING REVENUES(EXPENSES): -
Interest Income 1,980 150 48 2,178 2,014
Joint Venture Income(Expense) 56 56 48
Proceeds of Bankruptcy Settlements 1,009 210 1,219 -
' Interest Expense (2) (352) (354) (493)
TOTAL NON-OPERATING REVENUES(EXPENSES) 3,043 8 48 3,099 1,569
NET INCOME(LOSS)BEFORE OPERATING TRANSFERS 1,965 193 419 712 55 (107) 3,237 (543)
OPERATING TRANSFERS:
Operating Transfers In - 35 - - - 622 657 155
' Operating Transfers Out (181) (12) - (193) (11)
TOTAL OPERATING TRANSFERS 35 (181) (12) 622 464 1"
NET INCOME(LOSS) 1,965 228 238 712 43 515 3,701 (399)
Add Depredation on Contributed Assets 1,207 - - 24 1,231 1,253
' INCREASE IN RETAINED EARNINGS 3,172 228 238 712 43 539 4,932 854
RETAINED EARNINGS(ACCUMULATED DEFICITS)-BEGINNING OF
YEAR 35,420 (38) 1,298 (253) 113 (522) 36,018 35,164
RETAINED EARNINGS-END OF YEAR $ 38,592 $ 190 $ 1,536 $ 459 S 156 E 17 5 40,950 $ 36,018
Page 88
CITY OF HUNTINGTON BEACH
ENTERPRISE FUNDS '
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS ,
FOR THE YEAR ENDED SEPTEMBER 30, 1999
(IN THOUSANDS)
Emerald Emergency t
Cove Fire Refuse Hazmat Cultural
CASH FLOWS FROM OPERATING ACTIVITIES Water Utility Housing Medical Collection Service Affairs Totals 2000 Totals 1999
OPERATING INCOME(LOSS) $ (1,078) i 185 $ 371 $ 712 $ 55 $ (107) S 138 $ (2,112) '
Adjustments Required to Reconcile Operating Income(Loss)to Net Cash Provided
(Used)by Operating Activities:
Depreciation 1,487 82 68 - 4 24 1,665 1,584
Loss on Sale of Capital Assets - - - - - - - - '
Decrease(Increase)in Accounts Receivable (521) - (251) (93) 3 (862) 477
Decrease(Increase)in Interest Receivable (489) (3) 2 - (1) (491) (21)
Decrease(Increase)in Unbilled Receivables (519) - - (60) (579) (99)
Decrease(Increase)in Advances to Other Funds 3,793 - 3,793 (308) '
Decrease(Increase)in Due from Other Funds 1,301 1,301 (158)
Decrease(Increase)in Inventory (20) - - - (20) 42
Increase(Decrease)in Accounts Payable 139 (2) 56 (451) 3 57 (198) (541)
Increase(Decrease)in Accrued Payroll (10) - 18 2 (2) 1 9 18
Increase(Decrease)in Accrued Interest Payable 12 (32) - - - - (20) -
Increase(Decrease)in Due to Other Funds - - (123) (510) (633) 160
Increase(Decrease)in Deposits (105) (1) - - (106) (1,154)
Increase(Decrease)in Compensated Absences 41 8 13 2 64 2
TOTAL ADJUSTMENTS 5,109 44 (99) (712) 9 (428) 3,923 2 ,
NET CASH PROVIDED(USED) BY OPERATING ACTIVITIES 4,031 229 272 64 (535) 4,061 (2,110)
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Operating Transfers In From Other Funds - 35 - 622 657 155
Operating Transfers Out to Other Funds - (181) (12) - (193) (11) '
TOTAL CASH FLOWS PROVIDED(USED)BY NON-CAPITAL
FINANCING ACTIVITIES 35 (181) (12) 622 464 1"
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Contributions 7,013 4,572 - 11,585 51882
Interest Paid (1) ( ) - (1(353) (493)
352 ,
Acquisition and Construction of Capital Assets (858) - (211) - ,069) (1,972)
Principal Paid on Long-Term Debt (37) (5,105) - (5,142) (133)
TOTAL CASH PROVIDED(USED)BY CAPITAL AND RELATED
FINANCING ACTIVITIES 6,117 (885) (211) 5,021 3,284 '
CASH FLOWS FROM INVESTING ACTIVITIES:
Joint Venture Cash Received(Paid) 56 - - 56 (14)
Proceeds of Bankruptcy Settlements 1,009 210 - 1,219 -
Interest onInvestments 1,980 150 48 2,178 2,016 '
TOTAL CASH FLOWS PROVIDED(USED)BY INVESTING ACTIVITIES 3,045 360 48 - - 3,453 2,002
NET INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS 13,193 (261) (72) 52 87 12,999 3,320
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 2 ,481 2,377 731 107 24,696 21,376
CASH AND CASH EQUIVALENTS-END OF YEAR $ 34,674 $ 2,116 $ 659 $ $ 159 S 87 $ 37,695 $ 24,696
1
Page 89 1
Internal Service Funds account for goods and services provided by one City
' department to another on a cost-reimbursement basis.
' Insurance Reserve Funds:
The Medical Insurance Fund accounts for self-insurance activities for health costs.
• The Workers' Compensation Fund accounts for self-insurance activities for workers'
' compensation costs.
' . The General Liability Fund accounts for self-insurance activities for disability costs.
The Public Financing Authority Fund accounts for a portion of the equipment
' replacement activity funded by Public Financing Authority bonds.
o The Equipment Replacement Fund accounts for the purchase, operation and
' replacement of vehicles and equipment leased to City departments.
CITY OF HUNTINGTON BEACH '
INTERNAL SERVICE FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30,2000
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30,1999 '
(IN THOUSANDS)
ASSETS:
Health Workers' Liability Public
Insurance Compensation Insurance Financing Equipment
Current Assets: Reserve Reserve Reserve Authority Replacement Totals 2000 Totals 1999 '
Cash and Investments $ 196 $ 435 $ 4,319 $ $ 5.054 $ 10.004 $ 7,781
Prepaid Insurance 39 24 1.179 1,242 685
Due from Other Funds - - 411
Other Receivables 36 4 74 8 95 217 865
Total Current Assets 271 463 5,572 8 5,149 11,463 9,742 '
' Other Assets:
Cash With Fiscal Agent 1.167 1,167 1,084
Total Other Assets 1,167 1,167 1,084
Plant,Property and Equipment:
Machinery and Equipment - 40,135 40,135 37.668 '
Construction in Process 4.432 4,432 4.432
Subtotal 44.567 44,567 42.100
- Less Accumulated Depredation (29.534) (29,534) (26,928)
- Total Plant,Property and Equipment 15,033 15,033 15,172
TOTAL ASSETS $ 271 $ 463 $ 5,572 $ 11175 $ 20,182 $ 27,663 $ 25,998 ,
LIABILITIES AND FUND EQUITY
LIABILITIES:
Current Liabilities:
Accounts Payable $ 46 $ 7 $ 104 $ $ 53 $ 210 $ 1.235 ,
Accrued Payroll 415 7 4 426 18
Due to Other Funds - - - 12
Accrued Interest 9 9 1,032
Current Portion of Long-Tenn Debt 210 2.890 1,900 5.000 533
Total Current Liabilities 671 2,904 2,008 62 5,645 2,830 ,
Long-Term Liabilities:
Leases Payable 1.541 1,541 1,587
•° Claims Payable 210 6.408 3,125 - 9,743 9,982
Compensated Absences 28 16 13 57 50
Less Current Portion (210) (2,890) (1,900) - (5,000) (533) ,
Total Long-Term Liabilities 28 3,534 1,238 1,541 6,341 11,086
TOTAL LIABILITIES 699 6,438 3,246 1,603 11,986 13,916
FUND EQUITY:
Contributed Capital - - 4,849 4,849 4,040
Retained Earnings(Accumulated Deficits): ,
Reserved for Capital Projects - 1,175 - 1,175 -
Unreserved (428) (5,975) 2,326 13,730 9,653 8,042
Total Retained Earnings (428) (5,975) 2.326 1,175 13,730 10,828 8.042
TOTAL FUND EQUITY (426) (5,975) 2,326 1,175 18,579 15,677 12,082
TOTAL LIABILITIES AND FUND EQUITY $ 271 $ 463 $ 5,572 $ 1,175 $ 20,182 $ 27,663 $ 25,998 ,
1
Page 90 ,
' CITY OF HUNTINGTON BEACH
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES,EXPENSES AND
CHANGES IN RETAINED EARNINGS(ACCUMULATED DEFICITS)
' FOR THE YEAR ENDED SEPTEMBER 30,2000
WITH COMPARATIVE TOTALS
FOR THE YEAR ENDED SEPTEMBER 30,1999
(IN THOUSANDS)
Health Workers' Liability Public
Insurance Compensation Insurance Financing Equipment
OPERATING REVENUES: Reserve Reserve Reserve Authority Replacement Totals 2000 Totals 1999
Fees for Service $ 3,964 $ 2,928 $ 3,750 $ $ 2,796 E 13,438 $ 14,223-
Other 13 13 210 236 471
TOTAL OPERATING REVENUES 3,964 2,941 3,763 3,006 13,674 14,694
OPERATING EXPENSES:
' Supplies and Operating 1,364 581 - 1,051 2,996 2.300
Claims and Insurance 3,782 4,125 101 8,008 7,931
Depreciation 3,072 3,072 2,626
TOTAL OPERATING EXPENSES 5,146 4,706 101 4,123 14,076 12,857
OPERATING INCOME(LOSS) (1,182) (1,765) 3,662 (1'117) (402) 1,837
NON-OPERATING REVENUES(EXPENSES):
' Interest Income 11 243 65 329 648 476
Interest Expense (136) (136) (230)
Proceeds of Bankruptcy Settlements 220 586 806 -
Gain(Loss)on Disposal of Assets (364)
TOTAL NON-OPERATING REVENUES(EXPENSES) 231 243 65 779 1,318 (118)
NET INCOME(LOSS)BEFORE OPERATING TRANSFERS (1,182) (1,534) 3,905 65 (338) 916 1,719
Operating Transfers In 1,700 900 150 2,750 990
Operating Transfers Out (784) (784)
NET INCOME(LOSS) 518 (634) 3,905 65 (972) 2,882 2,709
' Add Depredation on Contributed Assets - - - - 1,113 1,113 1,165
INCREASE IN RETAINED EARNINGS 618 (634) 3,905 65 141 3,995 3,874
RETAINED EARNINGS(ACCUMULATED DEFICIT)-BEGINNING OF YEAR (946) (5,341) (1,579) 1,110 13,589 6,833 2,959
RETAINED EARNINGS(ACCUMULATED DEFICIT)-END OF YEAR $ (428) $ (5,975) $ 2,326 S 1,175 S 13,730 $ 10,828 $ 6,833
' Page 91
CITY OF HUNTINGTON BEACH '
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30,2000 '
WITH COMPARATIVE TOTALS
FOR THE YEAR ENDED SEPTEMBER 30,1999
(IN THOUSANDS)
Health Workers' Liability Public '
Insurance Compensation Insurance Financing Equipment
CASH FLOWS FROM OPERATING ACTIVITIES: Reserve Reserve Reserve Authority Replacement Totals 2000 Totals 1999 ,
OPERATING INCOME(LOSS) $ (1,182) S (1,765) $ 3,662 S S (1,117) $ (402) $ 1,837
ADJUSTMENTS TO RECONCILE OPERATING INCOME(LOSS)TO NET
t. CASH PROVIDED(USED)BY OPERATING ACTMTIES:
Depreciation - - 3,072 3,072 2,626 '
Decrease(Increase)in Prepaid Insurance 7 1 (565) (557) (178)
Decrease(Increase)in Due from Other Funds - - 783 82 865 528
Decrease(increase)in Other Receivables 327 (4) (74) (8) (48) 193 (375)
,1 Increase(Decrease)in Accounts Payable 44 3 (672) (399) (1,024) 876 '
Increase(Decrease)in Due to Other Funds (1,032) - - - (1,032) (416)
Increase(Decrease)in Claims Payable (76) 1,056 (1,219) - (239) (1,798)
Increase(Decrease)in Leases Payable - - (46) (46) -
Increase(Decrease)in Compensated Absences 3 (1) 5 - 7 6
Increase(Decrease)in Accrued Payroll 405 2 1 - 408 2 ,
Increase(Decrease)in Accrued Interest - - - - (3) (3) (5)
TOTAL ADJUSTMENTS (322) 1,057 (1,741) (8) 2,658 1,644 1,268
TOTAL CASH FLOWS PROVIDED(USED)BY OPERATING ACTIVITIES (1,504) (708) 1,921 (8) 1,641 1,242 3,105
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Operating Transfers In From Other Funds 1,700 900 150 2,750 990 '
Operating Transfers Out to Other Funds (784) (784)
TOTAL CASH FLOWS PROVIDED(USED)BY NON-CAPITAL FINANCING
ACTIVITIES 1,700 900 (634) 1,966 990
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: '
Interest Paid (136) (136) (230)
Proceeds from Sale of Assets 102 102 -
Acquisition and Construction of Capital Assets (1.625) (1,625) (1,438)
Principal Paid on Long-Tenn Debt (697) (697) (549) '
TOTAL CASH USED IN CAPITAL AND RELATED FINANCING ACTIVITIES (2,356) (2,366) (2,217)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds of Bankruptcy Settlements 220 586 806 -
Interest on Investments 11 243 65 329 648 398
TOTAL CASH FLOWS PROVIDED BY INVESTING ACTIVITIES 231 243 65 916 1,464 398
NET INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS 196 423 2,164 57 (534) 2,306 2,276 '
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 12 2,165 1,110 5,588 8,865 6,589
CASH AND CASH EQUIVALENTS-END OF YEAR $ 196 $ 435 S 4,319 $ 1,167 $ 5,054 $ 11,171 $ 8,865
NON-CASH ACTIVITIES:
Equipment Contributions $ $ - $ $ - $ 713 $ 713 $ 372 ,
Joint-Venture Activity - - (823)
Acquisition of Asset Through Capital Lease 614 614 1,279
1
t
Page 92 '
Trust and Agency Funds account for assets held by the City as an agent for
' individual, private organizations or other governments.
Agency Funds
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 Funds
• The Retirement Supplement Trust Fund accounts for the supplemental retirement plan
' provided to retirees.
• The Employee Deferred Compensation Trust Fund accounts for moneys held for
' employees under the City's section 457 deferred compensation plan.
CITY OF HUNTINGTON BEACH '
TRUST AND AGENCY FUNDS
COMBINING BALANCE SHEET '
SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999
(IN THOUSANDS) '
Agency Funds
Retiree Business t
General Mello-Roos Medical Improvement
ASSETS: Deposit Assessment Insurance District Central Net
Cash and Investments $ 465 $ 27 $ 4,340 $ 4 $ 1,000
Restricted Cash and Investments with Fiscal Agent - 902 - - - '
Interest Receivable - - 91 - 16
Due from Other Funds - - - - -
Notes Receivable, Net of Allowance for Doubtful Acc - - - - - '
Other Assets - 73 - 9 66
TOTAL ASSETS $ 465 $ 1,002 $ 4,431 $ 13 $ 1,082
LIABILITIES AND FUND BALANCE '
LIABILITIES:
Accounts Payable $ - $ - $ - $ - $ - ,
Deposits Payable 465 1,002 - 13 1,082
Due to Other Funds - - - - -
Funds Held for Others - - 4,431 - - '
TOTAL LIABILITIES $ 465 $ 1,002 $ 4,431 $ 13 $ 1,082
FUND BALANCE
Reserved for Pension Benefits - - - - -
Reserved for Employee Benefits
TOTAL FUND BALANCE $ - $ - $ - $ - $ -
TOTAL LIABILITIES AND FUND BALANCE $ 465 $ 1,002 $ 4,431 $ 13 $ 1,082
93
1
Trust Funds Totals
t Employee
Retirement Deferred
Supplement Compensation 2000 1999
$ 4,826 $ - $10,662 $ 9,253
t - 902 850
92 199 1
- - - 138
' - 298 298 339
238 386 139
$ 5,156 $ 298 $12,447 $10,720
' $ _ $ $ - $ 8
2,562 2,251
13 13 11
' - - 4,431 3,961
$ - $ 13 $ 7,006 $ 6,231
5,156 - 5,156 4,128
' - 285 285 361
$ 5,156 $ 285 $ 5,441 $ 4,489
$ 5,156 $ 298 $12,447 $10,720
t
94
CITY OF HUNTINGTON BEACH '
AGENCY FUNDS
STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2000 '
(IN THOUSANDS)
GENERAL DEPOSIT FUND '
October 1, September 30,
ASSETS: 1999 Additions Deductions 2000
Cash and Investments '
LIABILITIES:
Deposits Payable 462 38 (35) 465
MELLO-ROOS ASSESSMENT DISTRICT FUND '
October 1, September 30,
ASSETS: 1999 Additions Deductions 2000 '
Cash and Investments $ 26 $ 261 $ (260) $ 27
Cash With Fiscal Agent 850 233 (181) 902
Other Assets 68 8 (3) 73 '
TOTAL ASSETS $ 944 $ 502 $ (444) $ 1,002
LIABILITIES:
Deposits Payable $ 9" $ 502 $ (444) $ 1,002
RETIREE MEDICAL INSURANCE FUND
October 1, September 30, ,
ASSETS: 1999 Additions Deductions 2000
Cash and Investments $ 3,893 $ 1,053 $ (606) $ 4,340
Interest Receivable - 91 91 '
Due From Other Funds 68 - (68)
TOTAL ASSETS $ 3,961 $ 1,144 $ (674) $ 4,431
LIABILITIES: -
Funds Held for Others $ 3,961 $ 1,144 $ (674) $ 4,431 ,
BUSINESS IMPROVEMENT DISTRICT FUND
October 1, September 30, '
ASSETS: 1999 Additions Deductions 2000
Cash and Investments $ - $ 4 $ - $ 4
Other Assets 61 62 (114) 9 '
TOTAL ASSETS $ 61 $ 66 $ (114) $ 13
LIABILITIES:
Deposits Payable 61 66 (114) 13 '
CENTRAL NET FUND '
October 1, September 30,
ASSETS: 1999 Additions Deductions 2000
Cash and Investments $ 774 $ 508 $ (282) $ 1,000 '
Interest Receivable - 16 - 16
Other Assets 10 56 66
TOTAL ASSETS $ 784 $ 580 $ (282) $ 1,082
LIABILITIES: ,
Deposits Payable $ 784 $ 580 $ (282) $ 1,082
Page 95 '
' CITY OF HUNTINGTON BEACH
TOTAL AGENCY FUNDS
' COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED SEPTEMBER 30,2000
' (IN THOUSANDS)
October 1, September 30,
ASSETS: 1999 Additions Deductions 2000
Cash and Investments 5,155 1,864 (1,183) $ 5,836
Cash With Fiscal Agent 850 233 (181) 902
Interest Receivable 107 107
Due From Other Funds 68 - (68) -
' Other Assets 139 126 (117) 148
TOTAL ASSETS $ 6,212 $ 2,330 $ (1,649) $ 6,993
LIABILITIES:
Deposits Payable 2,251 1,186 (875) 2,562
Funds Held for Others 3,961 1,144 (674) 4,431
TOTAL LIABILITIES $ 6,212 $ 2,330 $ (1,549) $ 6,993
' RETIREMENT SUPPLEMENT TRUST FUND
STATEMENT OF PLAN NET ASSETS
SEPTEMBER 30,2000
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30,1999
(IN THOUSANDS)
' ASSETS: TOTAL 2000 TOTAL 1999
Cash and Investments $ 4,826 $ 4,066
Prepaid Expenses 238 -
' Interest Receivable 92 70
TOTAL ASSETS $ 5,156 $ 4,136
LIABILITIES AND FUND BALANCES:
t Liabilities:
Accounts Payable $ -
$ 8
Fund Balances:
Fund Balance Reserved for Pension Benefds 5,156 4,128
TOTAL LIABILITIES AND FUND BALANCES $ 5,156 $ 4,136
t RETIREMENT SUPPLEMENT TRUST FUND
STATEMENT OF CHANGES IN PLAN
NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30,2000
' WITH COMPARATIVE TOTALS FOR THE YEAR ENDED
SEPTEMBER 30,1999
(IN THOUSANDS)
Additions: TOTAL 2000 TOTAL 1999
Employer Contributions $ 1,702 $ 1,559
Interest Income 281 133
' Total Additions $ 1,983 $ 1,692
Deductions:
Benefits $ 934 $ 847
' Administration 21 -
Total Deductions 955 847
Net Increase in Plan Assets 1,028 845
' Fund Balance-Beginning of Year 4,128 3,283
Fund Balance Reserved for Employer's Pension
Benefits-End of Year $ 5,156 $ 4,128
' Page 96
CITY OF HUNTINGTON BEACH '
DEFERRED COMPENSATION EXPENDABLE TRUST FUND
BALANCE SHEET
SEPTEMBER 30,2000 ,
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED
SEPTEMBER 30,1999
(IN THOUSANDS) '
ASSETS: TOTAL 2000 TOTAL 1999 '
Cash and Investments $ - $ 32
Notes Receivable 298 339
Other Assets 1
Total Assets $ 298 $ 372 '
LIABILITIES AND FUND BALANCES:
Liabilities-Notes Payable $ - $ 11
Deposits 13
Fund Balance Reserved for Employee Benefds 285 361 ,
Total Liabilities and Fund Balances $ 298 $ 372
CITY OF HUNTINGTON BEACH t
DERRERRED COMPENSATION
EXPENDABLE TRUST FUND
STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE '
SEPTEMBER 30,2000
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED
SEPTEMBER 30, 1999 ,
(IN THOUSANDS)
Revenues: Total2000 Total1999
Interest Income $ - $ 14
Expenditures: '
Payments to Participants 63 31
Total Expenditures 63 31
Excess of Revenues Over(Under)Expenditures (63) (17) '
Fund Balance-Beginning of Year 361 378
Fund Balance-End of Year $ 298 $ 361
Page 97 '
The General Fixed Assets Account Group records plant, property
' and equipment not recorded in proprietary funds.
1
1
CITY OF HUNTINGTON BEACH ,
SCHEDULE OF GENERAL FIXED ASSETS
SEPTEMBER 30, 2000
(IN THOUSANDS) '
GENERAL FIXED ASSETS:
Land $ 74,978 '
Buildings 68,317
Improvements Other Than Buildings 2,345
Construction In Progress 6,684
Joint Ventures 365 ,
TOTAL INVESTMENT IN GENERAL FIXED ASSETS $152,689
INVESTMENTS IN GENERAL FIXED ASSETS '
General Fund $ 12,610
Special Revenue Funds 31,407
Capital Projects Funds 86,695
Donations 21,612 '
Joint Ventures 365
ASSETS $152,689
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS '
BY FUNCTION AND ACTIVITY
FOR THE YEAR ENDED SEPTEMBER 30, 2000 '
(IN THOUSANDS)
October 1, September 30, '
1999 Additions Retirements 2000
Fire $ 3,185 $ 194 $ - 3,379
Police 842 - - 842 ,
Community Services 92,243 564 - 92,807
Public Works 6,993 3,491 - 10,484
Library Services 13,286 - - 13,286
Non-Departmental 31,528 1,133 (770) 31,891 '
TOTAL $148,077 $ 5,382 $ (770) $ 152,689
SCHEDULE OF GENERAL FIXED ASSETS '
BY FUNCTION AND ACTIVITY
SEPTEMBER 30, 2000 '
(IN THOUSANDS)
Construction In
Land Buildings Improvements Progress Joint Ventures Total '
Fire $ - $ 3,185 $ - $ 194 $ - $ 3,379
Police - 784 58 - - 842
Community Services 53,913 36,790 2,104 - - 92,807
Public works - 5,118 183 5,183 - 10,484 '
Library - 13,213 - 73 - 13,286
Non-Departmental 21,065 9,227 - 1,234 365 31,891
TOTAL $ 74,978 $ 68,317 $ 2,345 $ 6,684 $ 365 $ 152,689
Page 98
The General Long-Term Debt Account Group accounts for
' long-term debt not recorded in proprietary or trust funds.
CITY OF HUNTINGTON BEACH ,
SCHEDULE OF CHANGES IN GENERAL LONG-TERM DEBT
FOR THE YEAR ENDED SEPTEMBER 30, 2000 '
(IN THOUSANDS)
October 1, September
1999 Additions Retirements 30,2000
Civic Improvement Corporation Refunding Certificates of Participation(Civic Center)-1993 $ 18,030 $ $ (670) $ 17,360 '
Civic Improvement Corporation Refunding Certificates of Participation(Police Administration Building)-
1993 13,925 - (405) 13,520
Compensated Absences 5,463 2,141 (1,469) 6,135
Advances from Other Funds 59,897 5,202 (8,294) 56,805 '
1992 Public Financing Authority Revenue Bonds 21,275 - (390) 20,885
Notes Payable 451 - (58) 393 '
1999 Redevelopment Agency Tax Allocation Refunding Bonds 10,340 (280) 10,060
1999 Public Financing Authority Certificates of Participation - 18,310 - 18,310
Mayer Disposition and Development Agreement 10,142 1,536 - 11,678 ,
Section 108 Loan - 8,570 (215) 8,355
Reservoir Hill Assessment Bonds 1,030 - (215) 815 ,
2000 Public Financing Authority Certificates of Participation 7,440 - (420) 7,020
Net Pension Obligation 7,244 906 - 8,150
Leases Payable - 185 (30) 155 ,
Energy Financing Loan 308 880 (15) 1,173
Total General Long-Term Debt $ 155,546 $ 17,730 $ (12,461) $ 180,814
Page 99
' STATISTICAL SECTION
CITY OF HUNTINGTON BEACH '
GOVERNMENTAL FUND EXPENDITURES
BY FUNCTION AND ACTIVITY
LAST TEN FISCAL YEARS ,
(IN THOUSANDS)
Administrative Community
City Council City Administrator City Treasurer City Attorney City Clerk Services Development Planning Building Fire
1990-91 $ 197 $ 1.564 $ 700 $ 1.340 $ 457 $ 4.187 $ 5,306 $ $ $ 14,169 '
1991-92 297 1,569 727 1.563 402 4,042 6,628 13.173
1992-93 213 1.480 709 1.807 449 4,108 6.097 16.505
•1993.94 282 2.691 897 2.168 517 5,140 10.406 19.502
1994-95 224 1.672 709 1.866 485 4,200 3.252 15.304 '
1995-96 224 2.140 743 1.468 488 4.181 3.252 14.747
1996.97 233 1,856 781 1.738 470 4,208 3,694 15.806
1997-98 207 1.092 805 2,340 434 3,056 3.919 16,368
1998-99 275 1,569 820 1.969 474 2.876 4.067 15.639 '
1999-2000 277 1,799 884 2,227 451 3,559 2.180 2.384 17,471
Source:Administrative Services Department-City of Huntington Beach
GOVERNMENTAL FUND REVENUES BY SOURCE '
LAST TEN FISCAL YEARS
(IN THOUSANDS)
Use of ,
Licenses and Fines and Money and From Other Charges for
Fiscal Year Property Tax Other Taxes Permits Forfeitures Property Agencies Current Service Other Total
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
1997-98 32.477 44,895 8,848 2,649 12,614 21.539 10,147 3,798 136.967
1998-99 34,345 48,757 10.527 2.744 10,913 24.753 9,557 4.514 146.110
1999-2000 37,645 52,194 8.538 4.018 14,603 32.021 10.077 5.770 164.866
Source:Administrative Services Department-City of Huntington Beach
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(IN THOUSANDS)
SECURED TAXES UNSECURED TAXES
BELINQUENZY-bEINQUENCYTOTAL DEUNQUFNGY oEuNQUENCY
TOTAL LEVY TOTAL COLLECTIONS AMOUNT PERCENT TOTAL LEVY COLLECTIONS AMOUNT PERCENT 1
1990-91 $ 18.764 $ 17,827 $ 747 3.00% $ 1,509 $ 1,377 S 62 4.50%
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%
1997-98 17.630 17,176 272 1.54% 1,247 1,077 40 3.21%
1998-99 18.341 17,868 262 1.47% 1.243 1,146 35 3.05% '
1999-2000 1 21.001 20,676 264 1.35% 1.321 1.231 29 2.20%
RESERVOIR HILL MELLO-ROOS t
1990-91 $ 168 $ 163 $ 4 2.45%
1991-92 170 167 3 1.80% $ 264 $ 236 $ 27 11.44%
1992-93 191 187 3 1.60% 264 245 19 7.76%
*1993-94 180 175 4 2.29% 264 181 83 45.86% '
1994-95 187 183 4 2.19% 264 258 6 2.33%
1995.96 186 176 9 5.11% 264 239 25 10.46%
1996-97 182 179 3 1.68% 264 251 13 5.18%
1997-98 173 184 9 4.89% 264 255 9 3,53% ,
1998-99 194 184 9 4.89% 264 255 8 3.14%
1999-2000 1 184 181 3 1.63% 264 259 5 1.89% .
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 100 ,
Economic Community library Non-
Police Development Services Services Public Works Ospertmental Capital Outlay Debt Service Total
i 28,148 $ $ 9,127 E - $ 20,275 3 7.052 $ 24.076 $ 11,895 E 128.493
30.417 9.420 15,889 11,255 39,069 48.643 183,094
32.355 7,228 2,775 16,633 21,488 17.328 9,397 138.572
40,535 9,892 3.513 20,802 10,787 22.228 18,699 168.059
32,795 2.637 7,064 2,921 16,714 9,953 12.958 11,933 124.687
32.650 3,010 7;535 2,951 16.297 9.399 9,823 14,227 123,133
33.413 2,142 7,301 3,034 17.159 9,867 13,833 12,529 128.064
34,267 3.216 7,703 3.212 18.676 14,898 15,978 11,941 137,912
' 34,343 3.598 8,439 3,510 18,287 12,929 20,739 28,765 158.299
36,140 6,749 9,815 3.984 25,263 18,572 18,740 21,297 171,792
' Page 101
CITY OF HUNTINGTON BEACH
ASSESSED AND ACTUAL VALUATION '
OF ALL TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(IN THOUSANDS) '
Total Assessed Estimated Full
Fiscal Year Common Property Public Utilities Total Secured Unsecured Valuation Market Valuation Percent Increase
1989-90 $ 9,030,107 $ 3.298 $ 9,033.405 $ 717.652 $ 9,751,057 $ 9.751,057
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%
1997-98 12,338,032 2,297 12,340.329 624,469 12,964,798 12,964,798 5.36%
1998-99 12,968,754 2,252 12,971.006 566,077 13,537.083 13,537,083 4.41% '
1999-2000 14,698.098 2,026 14,700,124 618,883 15.319,007 15,319,007 13.16%
Source:Administrative Services Department-City of Huntington Beach'
PROPERTY TAX RATES
ALL DIRECT AND ,
OVERLAPPING GOVERNMENTS
TAX RATE 04-001
LARGEST AREA IN CITY '
Year Basic Levy City Orange County School Districts Metro Water District Others Total
1989-90 1.00000 0.05419 0.00022 0.01004 0.01210 0.00029 1.07684 '
199D-91 1.00000 0.05406 0.00110 0.00841 0.00970 0.00015 1.07342
1991-92 1.0D000 0.05339 0.00098 0.00482 0.00890 0.00012 1.06821
1992-93 1.DD000 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
1997-98 1.00000 0.04930 0.00010 0.00890 1.05830 ,
1998-99 1.00000 0.04930 0.00020 0.D0890 1.05840
1999-2000 1.00000 0.04930 - 0.00880 1.05810
Note-Rates are per$100 of assessed valuation
Source-County of Orange '
GENERAL OBLIGATION
BONDED DEBT RATIOS '
LAST TEN FISCAL YEARS
Debt Service to
Total Debt General Fund Total General '
General Bonded Assessed Market Percent of Debt to Bonded Debt Per Service Expenditures Fund
Debt(0009) Value(000s) Assessed Value Population Capita Principal(000s) Interest(000s) (000s) (000s) Expenditures
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%
1997-98 $ $ 12.964,798 0.0D0 192,430 $ $ - $ - $ $ 103,875 0.00%
1998-99 $ $ 13,537.083 0.000 196.660 $ $ $ $ $ 103.050 0.00%
1999-2000 $ $ 15.319,007 0.000 199,327 $ $ $ $ 117.863 0.00%
Source-Administrative Services Department,City of Huntington Beach ,
Page 102
' CITY OF HUNTINGTON BEACH
CONSTRUCTION ACTIVITY
AND BANK AND
' SAVINGS AND LOAN DEPOSITS
LAST TEN FISCALYEARS
Number of Estimated Value of Banks and
' Building Percent New Construction Percent Savings and Loan
Permits Change 10003) Change Deposits(000s) Percent Change
1989-90 4.318 N/A $ 102.907 WA $ 2,598.415 N/A
1990-91 4,650 7.7 $ 76,175 (25.98) S 2.803.740 7.9
1991.92 5,041 8.4 S 81.250 6.66 S 2,458.259 (12.3)
1992-93 10,400 106.3 $ 100,400 23.57 $ 2,121.253 (13.7)
1993-94 6,844 (34.2) S 107,420 6.99 $ 2,141.528 1.0
1994-95 4.471 (34.7) $ 84,388 (21.44) $ 2,579,514 20.5
1995-96 7.594 69.9 S 110.375 30.79 $ 2.581,844 0.1
1996-97 5.413 (28.7) S 205,970 86.61 S 2,737,588 6.0
1997-98 6.368 17.6 111 206.035 0.03 $ 2,684,384 (1.9)
1998-99 6.735 5.8 S 308,319 49.64 S 2,908,376 8.3
1999-2000 5,474 (18.7) S 207.509 (32.70)
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, 1999
' (IN THOUSANDS)
ASSESSED VALUATION $ 14,698.098
DEBT LIMIT:12%OF ASSESSED VALUATION 1,763,772
' DEBT APPLICABLE TO LIMITATION: -
LEGAL DEBT MARGIN $ 1,763,772
Source-Administrative Services Department City of Huntington Beach
STATEMENT OF DIRECT AND
' OVERLAPPING BONDED DEBT
SEPTEMBER 30, 1999
1998-e9 Assass.d v.lutioe$13./02,492.975(aav deducting s437,535.e38 naementsl rMmlopment vexation)
OVERLAPPING TAX AND ASSESSMENT DEBT x Appac.El. D.M a snap
O.C.Teeter Plan Obligations 7.53% S 9,818,688
Metropolitan Water District 1.54% e,872.837
OC Sanitation Dist No.11 1.43% 188,594
City of Huntington Beach Comm Fac.Dist No 1990.1 100.00% 2.145.000
City of Huntington Beach 1915 Act Bonds 100.00% 1,030.000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT S 22.055,117
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT
O.C.General Fund Obligations 7.53% 80,435,189
' O.C.Pension Obligations 7.53% 22,720.164
O.C.Transit Authority 7.53% 926.305
MWD of Orange County Water Facilities Corp 11.37% 7.309.624
O.C.Sanitation District No.3,COPS 12.38% 13.950.598
O.C.Sanitation District No.11,COPS 99.94% 22,897.554
OCWO Certificates of Participation 12.27% 22,S43,884
Coast Community College COPS 30.71% 5.295.785
Htg Beach Union High School District COPS 72.43% 387.517
Los Alamitos Unified School District COPS 1.43% 85,944
' Fountain Valley School Dist COPS 97.51% 4.724.253
City of Huntington Beach General Fund Obligations 100.00% 48.733,006
TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT S 227,990,593
-Less: OC Transit Authority(80%self supporting) 041,044)
OC Water District COPS(100%sett supporting) (22,S43,664)
MWDOC Water Facilities Corporation(100%Self Supporting) (7,309,824)
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT s 197.395,261
GROSS COMBINED DEBT S 250,045,710
NET COMBINED TOTAL DEBT S 219.4S1,378
•Excludes Tea and Revenue Anticipation Notes,revenue,mortgage revenue and tax allocation bonds,
and non-bonded capital base obligations
Ratios to Assessed Valuation:
Total Overlapping Tar and Assessment Debt 0.16%
' Combined Direct Debt($48,733.008) 0.36%
Gross Combined Total Debt 1.91%
Not Combined Total Debt 1.67%
State School Budding Aid Repayable as of 9130199$9,096.701
Source-California Municipal Statistics
' Page 103
CITY OF HUNTINGTON BEACH '
DEMOGRAPHIC STATISTICS
City Population '
as a Percent of
Square Orange County County
Year Population Percent Increase Miles Population Population
1910 815 3.57 34,436
1920 1.687 107.0% 3.67 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%
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%
1998 192,430 2.1% 27.20 2.722.291 7.07%
1999 198,660 2.2% 27.20 2,775,619 7.09%
2000 199.326 1.4% 27.20 2,828,400 7.05%
Source-Administrative Services Department,City of Huntington Beach ,
TOP TEN PROPERTY TAX PAYERS
SEPTEMBER 30, 2000 Pe I
Assessed Valuation rcent of Estimated Tax
(0008) Toal J0003)•' Percent of Toal
McDonnell Douglas Corporation(8) $ 329.150 2.54% S 657 1.97%
Waterfront Construction(1) 35.250 0.27% 321 0.96% '
Huntington Breakers Apts Ltd.(1) 43.238 0.33% 250 0.75%
Kyray LLC 26.800 0.21% 208 0.62%
Atlanta HB LLC 112.153 0.87% 204 0.61%
Huntington Ctr Assoc.LLC 21,442 0.17% 169 0.51%
LIU Corporation(10) 18.135 0.14% 165 0.49% '
Bentall US Partners(2) 78.806 0.61% 138 0.41%
Cal Resources LLC 22.125 0.17% 131 0.39%
Bay Apt Communities 21,877 0.17% 112 0.34%
Total Top Ten 708,976 5.47% 2.355 7.06% '
All Other Properties 12,255,822 94.53% 31.016 92.94%
Total S 12,964,798 100.00%1 S 33,371 100.00%
Source-HDL Coren,Cone(number of parcels in parenthesis)
••The estimated total tax includes only the portion of the total tax paid to the City's reporting
entity.Properties in different tax areas or in a redevelopment agency project area pay a different '
percentage of tax to the City's reporting entity.
MISCELLANEOUS STATISTICS
SEPTEMBER 30, 2000
Year of Incorporation 1909 ,
Charter City-City
Form of Government Council-City
Area 27.2 Square Miles
Population 196,660 '
Miles of Streets and Alleys 539
Number of City Trees 54,563
Fire Protection:
Number of Stations 7
Number of Firefighters 139 '
Police Protection:
Number of Stations 4
Number of Sworn Police Officers 223
Municipal Water Department
Number of Customers 49,000 ,
Average Daily Consumption Total 32.0 Million Gallons
Average Daily Consumption Per Person 163
Miles of Water Mains 520
Public Works:
Sanitary Sewers 576 Miles '
Storm Sewers 136 Miles
Recreation and Culture:
Number of Parks 57
Park Acreage Developed 529 ,
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 104 ,
s
Independent Financial Audit
�-- The financial audit conducted for the City is the same type of audit
t
that is performed annually on all publicly traded corporations.
x The purpose of an auditor's work is to form an opinion as to fairness
of the financial representation resented b the financial statements.
p p Y
Transaction test work is performed to obtain confidence in the
accuracyof financial operations.
p
z
EE* A review is made of the procedures, controls, and segregation of
duties to determine the amount of test work they feel is appropriate.
The management letter is a byproduct of conducting the generally
accepted auditing standards.
8Z .£ d I Z IOOl
V9'HOb38 N019NI1NnN
8310�1110
3A 13,138
r
Diehl, Evans & Company, LLP
-1 L
Certified Public Accountants & Consultants
INDEPENDENT AUDITORS REPORT
(Continued)
In accordance with Government Auditing Standards, we have also issued our report dated April 4, 2001 on our
consideration of the City of Huntington Beach's internal control over financial reporting and our tests of its
compliance with certain provisions of laws, regulations, contracts and grants. This report is an integral part of an
audit performed in accordance with Government Auditing Standards and should be read in conjunction with our
audit report in considering the results of this audit.
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.
Ty.
es of Financial Audit Opinions
pp� Unqualified
Qualified
pp� Adverse
EE* Disclaim
Self Insurance Equity Balances
Health Workers' Liability Total Assets as
September 30, 1999 Insurance Compensation Insurance Insurance % of Liabilities
Assets $ 409,000 $ 37,000 $3,552,000 $ 3,998,000 33.70%
Liabilities $1,355,000 $5,378,000 $5,131,000 $11,864,000
Fund Equity -$ 949,000 -$5,341,000 -$1,579,000 ($7,869,000)
September 30, 2000
Assets $ 271,000 $ 463,000 $5,572,000 $ 6,306,000 60.73%
Liabilities $ 699,000 $6,438,000 $3,246,000 $10,383,000
Fund Equity -$ 428,000 -$5,975,000 $2,326,000 ($4,077,000)
Diehl, Evans & Company, LLP
Certified Public Accountants & Consultants
April 4, 2001
City Council
City of Huntington Beach
Huntington Beach, California
In planning and performing our audit of the financial statements of the City of Huntington Beach for the year ended
September 30, 2000, we considered its internal control structure in order to determine our auditing procedures
for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal
control structure. Our study and evaluation was more limited than would be necessary to express such an opinion.
The management of the City is responsible for establishing and maintaining a system of internal
accounting control. In fulfilling this responsibility, estimates and judgments by management are required
to assess the expected benefits related costs of control procedures, The objectives of a system are to provide
management with reasonable, but not absolute, assurance that assets are safeguarded against loss from
unauthorized use or disposition, and that transactions are executed in accordance with management's
authorization and recorded properly.
During our audit, we noted certain matters involving the internal control structure and its operation that we wish to
call to your attention. These matters are set forth below, together with our recommendations for improvement.
Diehl, Evans & Company, LLP
Certified Public Accountants & Consultants
INDEPENDENT AUDITORS REPORT
April 4, 2001
City Council
City of Huntington Beach
Huntington Beach, California
We have audited the general purpose financial statements of the City of Huntington Beach, California as of
and for the year ended September 30, 2000 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 and the standards applicable to
financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States. 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 misstatements. 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, 2000 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.
RESPONSES TO MANAGEMENT LETTER FROM DIEHL, EVANS AND COMPANY
FISCAL YEAR 1998/99
FINDING RESPONSE COSTIBENEFIT IMPLEMENTATION PLAN
Cash Reconciliations-The City's reconciliation of cash for Concur-The reconciliations were Cost-Administrative Time Currently 1 %Sr.Accountants are
September 30,2000 was not completed in a timely manner. delayed for a variety of reasons including Benefit-Better accounting records assigned full-time to bring the
staff reassignments and changes in the and reduced possibility of reconciliation up to date. When the
supervisory structure due to the unauthorized or undiscovered reconciliation is up to date,the goal
B.E.A.C.H. Project. transactions is to have the reconciliation take
50%of one Sr.Accountant's time.
The goal is to have the March 3&
200°reconciliation complete by June
30°i and the September 3&
reconciliation complete by October
31".
Budgets—Certain transfers out of the general fund were Concur- Cost-None The 2001-2002 budget will be
not shown as appropriations and corresponding transfers in Benefit-Clearer budget information prepared to accurately and dearly
to the other funds were not shown as sources of revenue. show transfers and their effect on
This understated appropriations and estimated revenue fund balance of relevant funds.
Insurance Reserve-The City s insurance reserve funding Concur. Cost-Increased transfers from Staff will continue to refine plans to
is not adequate and has resulted in deficits in two of the other funds reduces amounts reduce these deficits and provide
three of the insurance programs. available for other needs. additional funding in future
14 Benefit—More accurate accounting budgets.—During fiscal year
records and assurance that the City 1999/2000 the City improved the
has reserves to fund workers net position of these funds by
compensation, health, and tort $2,753,000
claims.
Grants-The City had a few grant funds in which no activity Concur-The fund activity needs to be Cost-Administration Staff and The Administrative Services staff
was recorded. In addition, grant reimbursement requests reviewed to determine the appropriate other Department Staffs time. will work with other department's
were not being requested in a timely manner. recording and closing out of fund Benefit-Improve collection and staff to assist in the preparation of
amounts. The request for reporting over the grants. the requests. In addition,the
reimbursement need to be more timely various funds will be reviewed for
filed. possible closure.
EDP Disaster Recovery Plan-The City does not have an Concur-$80,000 was approved in fiscal Cost-Funds were approved. In addition to 2000-2001
adequate EDP Disaster Recovery Plan year 2000/2001 budget Benefit-Better records security appropriations,staff has$400,000
over accounting records and ability in the 2002/2003 budget to
continue day to day operations of implement Disaster Recovery as
the City in the event of a disaster. well as$350,000 for Event
Recovery.
Bu_ dgets
We noted that certain transfers out of the general fund were not budgeted as appropriations and the
corresponding transfers in to the other funds were not shown as sources of revenue which understated
appropriations and budgeted revenues. All transfers out of funds should be budgeted as appropriations and
the corresponding transfers in should be shown as sources of revenue.
Insurance Reserves
The City's Insurance Reserve Internal Service Funds accounts for the City's self-insured liability, health
and workers' compensation activities,which are to be funded by City departments on a cost-reimbursement
basis. At the City's fiscal year-end, September 30, 2000,the medical program had a deficit of$428,000
and the workers' compensation program had a deficit of$5,975,000. The accumulated deficits indicate that
claims to date for each of the programs are in excess of the amounts reimbursed by other City departments.
As such,total assets of the Insurance Reserve Internal Service Fund are below anticipated payouts related
to existing litigation and claims. Correspondingly, liabilities of the funds which must ultimately pay
self-insurance losses are understated.
We recommend that the City refine its plan for the eventual funding of self-insured costs to ensure that
incurred but not reported liabilities are included. We also recommend that the plan and related reserve
levels be monitored annually for reasonableness in relation to cash requirements. We also recommend that
on a periodic basis the insurance requirements of the City be reviewed for adequacy and determine the
cost/benefit of any additional insurance.
Grants
We observed the following regarding grant programs.
• We noted that there were a few grant programs which had no financial activity in the current year.
These grant funds had either deficit or positive cash balances.
We recommend that a comprehensive review be completed for all grant programs. Any grant programs
with deficit cash balances should be funded by transfers of cash. For any grant programs with positive
cash balances, amounts should be returned to the grant program if appropriate.
• We noted that the City was not requesting reimbursement of expenses on completed grant programs
on a timely basis.
We recommend that reimbursements for expenses be submitted promptly.
- 2 -
14
Electronic Data Processing (EDP) Disaster Recovery Plan
We recommend that the City develop a formalized Electronic Data Processing (EDP) disaster recovery
plan. This plan is a written set of instructions to assist City personnel to process data in such events as
power outages, hardware or software breakdown, or other disasters that keep data from being processed
in a normal manner. This plan should contain such information as the name and phone number of the firms
providing hardware and software support, location of documentation for all hardware and software, and
the location of back-up data and alternative processing locations (such as other cities using the same
software). This would assist the City in the absence of those employees familiar with the system.
These conditions were considered in determining the nature, timing and extent of the audit tests to be
applied in our audit of the City of Huntington Beach's financial statements and this letter does not affect
our report on these financial statements dated April 4, 2001.
This report is intended solely for the information and use of the City Council and management of the City
of Huntington Beach, and is not intended and should not be used by anyone other than these specified
parties.
�.�c, L ALP
.�e City Huntington ton Bead
g
INTER-DEPARTMENT COMMMUNICATION
HUNTINGTON BEACH fC
TO: Honorable Mayor and City Council
VIA: Ray Silver, City Administrator
FROM: Clay Martin, Director of Administrative Services
SUBJECT: Staff Responses to Management Letter from Diehl, Evans and Company
DATE: May 18, 2001
The City of Huntington Beach engaged Diehl, Evans to conduct an independent audit of
the City's financial statements for the fiscal year 1999/2000. In the process of conducting
their audit, the auditors have made five recommendations as to how the City of
Huntington Beach can improve its financial operations through a management letter to the
City Council. A management letter represents comments made by the City's auditors to
management on how to improve the City's internal control structure. Staff has reviewed
the five findings made by Diehl, Evans, and Company and we agree that all the
suggestions would improve our operation.
Below is a summary of the City's responses to these comments and an implementation
plan.
Cash Reconciliation's — Essentially, Diehl, Evans recommends that bank (cash)
reconciliation's be kept current. We concur with the findings and will implement the
auditor's recommendations. The backlog of bank reconciliation's was aided by numerous
extraordinary events such as:
• Implementation of the JD Edwards system caused key staff members to be
temporarily reassigned out of Finance.
• The asbestos situation and temporary relocation of the Finance staff made
access to records vital to the reconciliation difficult.
• Difficulties in the legacy accounts receivable system made cash entries
difficult to trace and reconcile.
All reconciliation's for the period of this audit have been completed. Additional staff time is
being assigned to bring the reconciliation's for the current year up to date.
Staff Response to Management Letter 5/18101 1:05 PM
Staff Responses to Management Letter from Diehl, Evans and Company
Budgets — Essentially Diehl, Evans recommends that all fund transfers be shown as
appropriations within the budget document. We concur. The 2001-2002 budget will be
prepared to accurately.and clearly show transfers and their effect on the available fund
balance of relevant funds.
Insurance Reserves - Essentially, Diehl, Evans recommends that the City continue to
address unfunded liabilities in the insurance reserve funds. We concur. There are
currently three separate insurance reserve funds: liability, health, and workers
compensation. At any time, the City Council may transferfunds among or between these
individual funds. When taken as a whole, the fund deficit in these three funds decreased
by $2,753,000 during fiscal year 1999/2000. Below is a schedule of the progress the City
has made in the past three years in restoring the funding of the City's Insurance Reserves
(dollar amounts in thousands).
19.97/1998 199811999 1999/2000
Total Assets $1,287 $3,998 $6,306
Total Liabilities 12,065 11,864 10,383
Deficit (10,778) (7,866) (4,077)
% Funded 11% 34% 61%
Staff plans on continuing this trend during each budget cycle.
Grants — Essentially, Diehl, Evans recommends that the City provide greater
administrative oversight for grants. We concur. The Administrative Services staff will
work with other department's staff to assist in the preparation of the requests to ensure
that revenues are received by the City in a timely manner. In addition, the various funds
will be reviewed for possible closure where there is no more activity anticipated.
The City's grant activity has grown significantly in recent years. Below is a schedule of
the grant revenue for the past three years (dollar amounts in thousands):
1997/1998 1998/1999 1999/2000
Total Grant Revenue and Financing Sources $4,299 $5,743 $18,818
% Increase from Prior Year N.A 34% 228%
This increase does not include more than $10 million from sources other than grants such
as earmarks in state or federal legislation. This increase has made the process of
monitoring these grants more labor intensive. Staff will explore different options of how to
ensure that this is done in the most efficient manner.
Disaster Recovery Plan — Essentially, Diehl, Evans recommends that the City create a
plan to safeguard business data in the event of a disaster. We concur - $80,000 is
Staff Response to Management Letter -2- 5/18/01 1:05 PM
Staff Responses to Management Letter from Diehl, Evans and Company
budgeted in fiscal year 2000/2001 to hire a company to do a Business Assessment, Risk
Analysis and develop a Disaster Recovery Plan for the City. The Business. Assessment
will show what we should be protected and the Risk Analysis should show what is at risk
(in terms of dollars lost; productivity, etc.) if business data cannot be recovered. There
may be some funds left over to implement some "stop-gap" measures until funding is
available for a full recovery system. $400,000 has been requested in the 2002/2003
budget to implement Disaster Recovery as well as $350,000 for Event Recovery
(relocation of City Hall employees in the event of evacuating City Hal( - such as recently
experienced in the power outage and asbestos situations).
DTV:CM:skd
Staff Response to Management Letter -3- 5/18/01 1:05 PM
� CITY OF
� HUNTINGTON BEACH ,
� CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
' For the Year Ended September 30, 2000
CITY OF HUNTINGTON BEACH
COMPREHENSIVE ANNUAL FINANCIAL REPORT
WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED
' PUBLIC ACCOUNTANTS
SEPTEMBER 30, 2000
Prepared by Administrative Services Department
COMPREHENSIVE ANNUAL FINANCIAL
REPORT
YEAR ENDED SEPTEMBER 30 2000
TABLE OF CONTENTS
INTRODUCTORY SECTION
' Table of Contents
Letter of Transmittal iv-xii
City Officials xiii
' Organizational Chart xiv
Financial Reporting Certificate xv
' FINANCIAL SECTION
Independent Auditors' Report 1-2
' General Purpose Financial Statements: -
Combined Balance Sheet-All Fund Types and Account Groups 3-4
Combined Statement of Revenues, Expenditures and Changes in Fund Balance All 5-6
Governmental Fund Types and Expendable Trust Fund
' Combined Statement of Revenues, Expenditures and Changes in Fund Balance, 7-8
Budget and Actual-General, Special Revenue, and Debt Service Fund Types
Combined Statement of Revenues, Expenses, and Changes in Retained Earnings-All 9
Proprietary Fund Types
Combined Statement of Cash Flows-All Proprietary Fund Types 10
Statement of Changes in Plan Net Assets(Pension Trust Fund) 11
Notes to General Purpose Financial Statements 12-64
' Supplementary Information - Combining Financial Statements and Schedules of Individual
Funds and Account Groups
General Fund:
Balance Sheet 65
Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and 66
Actual
Special Revenue Funds:
' Combining Balance Sheet 67-68
Combining Statement of Revenues, Expenditures and Changes in Fund Balance 69-70
(Deficits)
Combining Statements of Revenues, Expenditures and Changes in Fund Balance 71-78
(Deficits)-Budget and Actual
1
1
Fund Equity- Fund equity is the net worth of a particular fund. Examples of reserved fund equity
' include amounts reserved for encumbrances, long-term receivables, debt service, land held for
resale, etc. Examples of unreserved, designated equity include amounts designated for future
expenditures and the reserve for economic uncertainties. Unreserved, undesignated equity describes
the remaining balance
Below is a summary of General Fund equity at year-end (in thousands):
Percent
' Total Equity Total Equity Increase
GENERAL FUND: 1998199 199912000 (Decrease)
Reserved $ 23,628 $ 26,115 11%
' Unreserved/Designated 9,035 17,618 95%
Unreserved/Undesignated 10,256 - -100%
1 Total $ 42,919 $ 43,733 2%
Total general fund equity increased 2%, however, the unreserved/undesignated amount has been
reduced to zero due to an increase of $6.1 million in the Reserve for Economic Uncertainties
approved by the City Council, which was amended after year-end.
' Governmental funds include the General Fund, Special Revenue Funds, Debt Service Funds, and
Capital Projects Funds: Below is a summary of Governmental Fund equity at year-end (in
thousands):
' Percent
Total Equity Total Equity Increase
GOVERNMENTAL FUNDS: 1998199 199912000 (Decrease)
Reserved $ 89,518 $ 103,612 16%
Unreserved/Designated 15,419 24,896 61%
Unreserved/Undesignated 21,588 23,619 9%
' Total $ 126,525 $ 15Z 127 20.2
PROPRIETARY FUNDS
Proprietary funds include the Enterprise and Internal Service Funds. Enterprise funds are
supported by revenue generated from the public. Internal Service funds are supported by
user charges to different departments of the City.
viii
Contributed capital represents amounts contributed by other funds or outside sources to
proprietary funds. Retained earnings represents the accumulated earnings of the funds. '
Below is a summary of the Proprietary Fund equity at year-end (in thousands):
Percent '
Total Equity Total Equity Increase
1998199 199912000 (Decrease)
Contributed Capital $ 37,650 $ 49,621 31.8 '
Retained Earnings 44,060 51,778 17.5
Total $ 81,710 $ 101,399 24.1 '
Below is a summary of enterprise fund net income (loss) (in thousands): ,
ENTERPRISE FUNDS: 1998-99 1999-2000 ,
Water Fund $ (106) $ 1,965
Emerald Cove Housing (10) 228
Emergency Fire Medical 132 238 ,
Refuse Collection (283) 712
Hazmat Service (23) 43 '
Cultural Affairs (109) 515
Staff will continue to study user fees and rates relating to these funds to ensure that costs are '
recovered.
Below is a summary of internal service fund net income (loss) (in thousands):
INTERNAL SERVICE FUNDS: 1998-99 1999-2000
Equipment Replacement $ (203) $ (972) '
Health Insurance Reserve 776 518
Workers Compensation Insurance Reserve (515) (634)
Liability Insurance Reserve 2,651 3,905
Public Financing Authority - 65
The insurance funds are now on their way back to financial health. Staff will continue to study rates '
and available funds to ensure that adequate reserves are rebuilt. The Public Financing Authority
equipment replacement funds were not separately shown in prior years.
ix
r
Pension Obligations - The City participates in the California Public Employee's Retirement System.
At June 30, 1999 the City's total future pension obligation for all current and retired employees was
$364,350,000 and assets available for these obligations were $467,408,000, leaving a surplus of
$103,058,000.
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 $2,578,000 while the City
' contributed $1,709,000. The unfunded liability for this plan was $23,767,000.
Trust and Agency Funds -. The City's Trust and Agency funds consist largely of the Retiree Medical
' Fund, the Retirement Supplement Fund, the Central Net Operations Authority and a portion of the
City's deferred compensation plan. The total assets of these funds increased by $1,636,000, or
15.3%. This was due largely to an increase in the assets of the Retirement Supplement Fund of
' $1,020,000.
' Debt Administration - The outstanding long-term debt was (in thousands):
' Bonds:
Reservoir Hill Assessment District Bonds $ 815
Public Financing Authority 20,885
Redevelopment Agency 10,060
' Certificates of Participation:
Public Financing Authority 25,330
Civic Improvement Corporation 30,880
Notes Payable:
Energy Conservation 1,173
Section 108 Loan 8,355
Redevelopment Agency 12,071
Other Debt:
Self-Insurance Claims 9,982
' Pension Obligation 8,150
Leases 1,705
Compensated Absences 6,592
Advances to Other funds (Redevelopment Agency) 57,049
' TOTAL $ 193,047
x
�e
1
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
over $1.7 billion. All bonded debt has been incurred by the Huntington Beach Public Financing
Authority, the Redevelopment Agency, the Huntington Beach Civic Improvement Corporation, or the '
Reservoir Hill Assessment District.
Moody's Investor's Service rates obligations as to their safety as an investment. The City received a '
rating of (Al) on the Civic Improvement Corporation Certificates of Participation and a rating of (Baa)
on the Public Financing Authority 1992 Revenue Bonds.
Notes 12 and 13 to the General Purpose Financial Statements include further information on the '
City's long-term debt.
Cash Management The City Treasurer invests surplus cash in authorized investment allowable by '
the government code and City policy. The City forecasts revenues and expenditures to maximize
interest income and maintain enough cash to meet current obligations. During 1999/2000 the '
investment of non-restricted cash and investment yielded interest of$6,351,730, or 5.94 %.
The California Government Code requires the City Treasurer to prepare an annual statement of '
investment policy, quarterly report showing compliance with the City's investment policy, and
information on the City's investments. The City Treasurer complied with this law. Note 3 to the
General Purpose Financial Statements shows 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 pooling and private insurance. The City
also maintains private insurance coverage for worker's compensation and employee health claims in
over a certain amount. r
Other Information- The Single Audit Act of 1984 requires special audit procedures and reports for
the activities that use Federal funds (either directly or passed through from other governmental ,
agencies). Copies of this audit are available from this office.
This report includes the financial activity of separate legal entities whose activities the City controls. I
These entities are the:
• Redevelopment Agency of the City of Huntington Beach '
• Huntington Beach Public Financing Authority
• Huntington Beach Civic Improvement Corporation
• 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 and the '
Public Financing Authority.
Xi
1 -
' 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, 199.9 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 14 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.
' Acknowled_gments - We wish to thank the City Council and the City departments for 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 �
Dan T. Villella,
Finance r
' Clay Marti ,
Director of Administrative Services
1
1
t -
1
' xii
1
CITY OF HUNTINGTON BEACH
PRINCIPAL CITY OFFICIALS ,
CITY COUNCIL
Pam Julien Houchen, Mayor
,
Y -
Debbie Cook, Mayor Pro Tern
Ralph Bauer, Councilmember '
Connie Boardman, Councilmember
Shirley Detloff, Councilmember
Dave Garafolo, Councilmember '
Peter Green, Councilmember
OTHER ELECTED OFFICIALS
Connie Brockway, City Clerk ,
Gail Hutton, City Attorney
Shari Freidenrich, City Treasurer '
ADMINISTRATIVE OFFICIALS
Ray Silver, City Administrator ,
Bill Workman, Assistant City Administrator
Robert Beardsley, Public Works Director '
David Biggs, Director of Economic Development
Ross Cranmer, Building Director
Michael Dolder, Fire Chief ,
Ron Hagan, Community Services Director
Ron Hayden, Library Services Director
Ron Lowenberg, Police Chief ,
Clay Martin, Director of Administrative Services
Howard Zelefsky, Planning Director
1
xiii
■� III � I� r r Ilill� r r III Illr r � r � � i� r r
CITY OF HUNTINGTON BEACH
THE PEOPLE
Mayor Pam Julien Houchen [n�MQI[Hutton;-,
CiTY°CLERK"" "' y TREASURER ATTORNEY;Xonni :Brockwa y. Mayor Pro TernDebbie Cook :;Shari L.Fceidentich: g=
CouncilPMembers"Bauer,,Dettloff,Green,Garofalo,l3oardman Investments
ti CITY 1.
;
- ADMINISTRATOR
_ �'�; Business Lkense
ORGANQATIONAL 'WliliTRANE�T SERVICES COMMU IONS ANfI NICAT
EFFECTNENESS3 �CI�rUartieSPECUU-FROJECTS',= RaySilver
�r YaaM Richard BamaM Accounts Receivable
Finance
ASSISTITY
Dan Villella ANT C
r ,
Risk Managements ADMINISTRATOR Municipal Services
Karen Foster William Workman 8r Cashiering
ash
Central Services ierin
Rick Amadril
Human Resources
C William Osness
Real Property
Matt lamb
Employee Benefits
Sharon Henn an
PLANNING�� BUILOING�b ECONOMIC -y PUBLIC WORKS COYl- --- SERVICES UBRARY:SERVICES' '. E � r
POI ICE
a Roe Hs en Micheal P Doldei
Howard - $SAFETY DEYELOPMENI Robert F BeaiAsley ;t Ron Hegat% yd_ Ron L mwenb�g .
RossQCranmer =David Biggs ".
Principal _ De Director Fire Prevention
Putt Beaches,Recreation Operations Uniform Division
Planner P�g Plan Redevelopment& Paul Emery &Facilities Development Jan Halvorsen Duane Olson Captain Bill Mamelli
Scott Hess
Check Services Housing Jim Engle Operations
Khanh Nguyen Gus Duran Engineering Reference ministration Division
Chuck Reynolds
Current Dave Webb Human Services 3 Sherrie Dau h Captain Jim Cutshaw
Planning Inspection Business Recreation Em en Services
Herb Fauland Services Development Water Bill Fowler Childrens I Media erg
Jim Lamb Dennis Mac Lain Chuck Bumey Investigation Division
Bill Grove Interim Nan Williams Captain I McEriain
Advanced Cultural,Historic Telecommunications
Planning &Event Services Technical Services Cheri White S
pecial Operations
Mary Beth Park Tree a Michael Mudd Roger Hiles Division
Broeren Landscape Information Systems Jon Amoid
John Van OeBelen
Code Transportation
Enforcement Tom Brohard
Mike Strange (Interim)
04/09/01
Maintenance
Don Noble
1
Certificate of
1
Achievement
for Excellence 1
in Financial
Reporting
1
Presented to
City of Huntington Beach,
California
For its Comprehensive Annual '
Financial Report
for the Fiscal Year Ended 1
September 30, 1999
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 1
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
i
C`NA°" res
CORPURAT� ident
N g '
'� OIK►CO � � .
Y
��
Executive Director
Page XV
' FINANCIAL SECTION
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS '
A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS
L R.LUDIN,CPA
CRAIG ,
2121 ALTON PARKWAY,SUITE 100 NITIN W. TEL,CPR,CPA
NITIN P.PATEL,CPA
IRVINE,CALIFORNIA 92606-4906 •PHILIP H.HOLTKAMP,CPA
(949)399-0600•FAX(949)399-0610 'THOMAS M.PERLOWSKI,CPA
Www diehlevans.com •HARVEY J.SCHROEDER,CPA
April 4, 2001 A PROFESSIONAL CORPORATION '
INDEPENDENT AUDITORS' REPORT '
City Council '
City of Huntington Beach
Huntington Beach, California '
We have audited the general purpose financial statements of the City of Huntington Beach, California '
as of and for the year ended September 30, 2000 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 and the standards
applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller '
General of the United States. 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, 2000
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. '
In accordance with Government Auditing Standards, we have also issued our report dated April 4,
2001 on our consideration of the City of Huntington Beach's internal control over financial reporting '
and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. This
report is an integral part of an audit performed in accordance with Government Auditing Standards and
should be read in conjunction with our audit report in considering the results of this audit. ,
1
- 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
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.
LL P
' -2 -
CITY OF HUNTINGTON BEACH '
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 2000 '
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 1999
(IN THOUSANDS)
GOVERNMENTAL FUNDS '
Special
ASSETS AND OTHER DEBITS General Revenue Debt Service Capital Projects '
Cash and Investments(Note 3) $ 26,408 $ 15,503 $ 9,676 $ 15,347
Cash With Fiscal Agent(Note 3) - - 8,097 6,944
Taxes Receivable 16,376 1,719 1,555 74
Other Receivables 1,398 10,674 180 2,577 '
Unbilied Receivables 692 - - -
Inventory 631 - - -
Due from Other Funds(Note 10) 1,330 - - -
Deposits and Other Assets 42 2,348 '
Advances to Other Funds(Note 10) 26,523 6,381 18,894 2,516
Investment in Joint Venture(Note 18) - - - -
Land Held for Resale - - - 15,401
Property,Plant and Equipment (Net) - - - - '
General Fixed Assets(Note 15) - - - -
Amount Available in Debt Service Funds(Note 16) - - - -
Amount to be Provided for Payment of Long-Term Debt - - - -
TOTAL ASSETS AND OTHER DEBITS $ 73,400 $ 36,625 $ 38,402 $ 42,859 ,
LIABILITIES,FUND EQUITY AND OTHER CREDITS
LIABILITIES:
Accounts Payable $ 2,213 $ 1,127 $ 23 $ 1,542
Other Accrued Liabilities 2,705 116 - 82 '
Deposits 1,621 63 - 134
Leases Payable(Note 13) - - - -
Due to Other Funds(Note 10) - 94 - 413
Tax and Revenue Anticipation Notes(Note 19) 16,400 - - - '
Interest Payable on Tax and Revenue Anticipation Notes 702 - - -
Advances from Other Funds(Notes 10, 12,and 13) - - - -
Claims Payable (Note 9) - - - -
Funds Held for Others - - - -
11,11 ,
Deferred Revenue(Note 5) 6,026 7 - 222
Long-Term Debt(Notes 12 and 13) - - - -
Compensated Absences(12 and 13) - - - -
TOTAL LIABILITIES 29,667 12,517 23 2,393 ,
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 26,115 5,004 38,379 28,673
Unreserved:
Designated 17,618 6,063 - 1,215
Undesignated - 13,041 - 10,578
TOTAL FUND EQUITY AND OTHER CREDITS 43,733 24,108 38,379 40,466
TOTAL FUND EQUITY,LIABILITIES,AND OTHER CREDITS $ 73,400 $ 36,625 $ 38,402 $ 42,859
See Independent Auditors'Report and Notes to General Purpose Financial Statements 3 '
1
FIDUCIARY FUND
PROPRIETARY FUNDS TYPES ACCOUNT GROUPS (Memorandum Only)
General Fixed General Long-Term
' Enterprise Internal Service Trust and Agency Assets Debt Account Group Totals 2000 1 .Totals 1999
$ 37,695 $ 10,004 $ 10,662 $ - $ 125,295 $ 78,898
- 1,167 902 - - 17,110 9,280
- - - - - 19,724 16,382
' 3,799 217 497 _ 19,342 13,833
4,735 5,427 3,744
912 - - - - 1,543 1,368
- - - - - 1,330 3,365
' - 1,242 386 - - 4,018 3,536
2,735 57,049 60,141
- - - 365 - 365 1,399
- - - - - 15,401 17,018
t 41,040 15,033 _ - - 56,073 56,003
152,324 152,324 146,942
- - - - 19,485 19,485 10,655
- - - - 161,329 161,329 144,890
$ 90,916 $ 27,663 $ 12,447 $ 152,689 $ 180,814 $ 655,815 $ 567,454
$ 1,954 $ 210 $ - $ - $ - $ 7,069 $ 9,091
' 213 435 - _ - 3,551 368
1,551 2,562 5,931 4,663
9 1,541 13 - - 1,563 1,633
823 - - - - 1,330 3,365
' - - - - - 16, 0 -
702
244 - - - 56,805 57,049 60,141
- 9,743 - - - 9,743 9,982
' - - 4,431 - - 4,431 3,961
17,365 16,802
- - - - 117,874 117,874 95,290
400 57 - - 6,135 6,592 5,846
' 5,194 11,986 7,006 - 180,814 249,600 211,142
44,772 4,849 - - - 49,621 37,650
- - - 152,689 - 152,689 148,077
' - 1,175 - - - 1,175 -
40,950 9,653 - - - 50,603 44,060
- - 5,441 - - 103,612 89,518
- - - 24,896 15,419
- - - - - 23,619 -21,588
' 85,722 15,677 5,441 152,689 - 406,215 356,312
$ 90,916 $ 27,663 $ 12,447 $ 152,689 $ 180,814 E 655,815 $ 567,454
' 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
ALL GOVERNMENTAL FUND TYPES '
FOR THE YEAR ENDED SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30, 1999 '
(IN THOUSANDS)
Special Revenue Debt Service Capital Projects ,
REVENUES: General Fund Funds Funds Funds
Property Taxes $ 31,914 $ - $ 5,731 $ -
Other Taxes 49,567 1,805 - 822 ,
Licenses and Permits 6,615 1,439 - 484
Fines,Forfeitures and Penalties 4,018 - - -
From use of Money and Property 8,433 1,656 2,547 1,967 '
From Other Agencies 16,092 13,319 20 2,590
Charges for Current Service 9,024 633 - 420
Other 947 4,690 - 133
TOTAL REVENUES 126,610 23,542 8,298 6,416 '
EXPENDITURES:
Current:
City Council 277 - - - '
City Administrator 1,323 476 - -
City Treasurer 884 - - -
City Attorney 1,772 - 455 '
City Clerk 451 - - -
Administrative Services 3,525 34
Planning 2,169 - - 11
Building 2,384 - - - ,
Community Development - - -
Fire 17,362 54 - 55
Police 35,164 976 - - ,
Economic Development - 4,887 264 1,598
Community Services 9,106 495 - 214
Library Services 3,318 267 - 399
Public Works 22,400 2,629 - 234 '
Non-Departmental 14,980 - 642 2,950
Capital Outlay 1,903 8,675 - 8,099
Debt Service(Note 12): '
Principal 15 85 3,733 2,500
Interest 830 34 11,300 2,800
TOTAL EXPENDITURES 117,863 18,578 15,939 19,349
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 8,747 4,964 (7,641) (12,933) '
OTHER FINANCING SOURCES(USES):
Operating Transfers.In(Note 10) 2,752 5,082 3,469 19,226
Proceeds of Bankruptcy Settlements(Note 19) 966 1,216 442 1,209 ,
Proceeds of Long-Term Debt(Note 12) - 2,755 29,512 2,416
Payments to Refunding Escrow(Note 19) - - (4,573) -
Operating Transfers Out(Note 10) (11,651) (6,687) (12,809) (1,812) '
TOTAL OTHER FINANCING SOURCES(USES) (7,933) 2,366 16,041 21,039
EXCESS OF REVENUE AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES 814 7,330 8,400 8,106
FUND BALANCE-BEGINNING OF YEAR 42,919 16,778 29,979 32,360
FUND BALANCE-END OF YEAR $ 43,733 $ 24,108. $ 38,379 $ 40,466
See Independent Auditors'Report and Notes to General Purpose Financial Statements 5 '
Fiduciary Fund
' Types Totals(Memorandum Only)
Expendable
Trust 2000 1999
$ - $ 37,645 $ 34,345
' 52,194 48,757
8,538 10,527
4,018 2,744
= 14,603 10,913
32,021 24,753
10,077 9,557
5,770 4,514
- 164,866 146,110
277 275
1,799 1,569
884 820
' = 2,227 1,969
451 474
3,559 2,876
2,180 -
' � 2,384 -
4,067
17,471 15,639
' 36,140 34,343
6,749 3,598
9,815 8,439
- 3,984 3,510
- 25,263 18,287
18,572 12,929
63 18,740 20,739
- 6,333 12,111
14,964 16,654
63 171,792 158,299
' (63) (6,926) (12,189)
- 30,529 7,794
' � 3,833 -
34,683 25,684
- (4,573) (10,001)
' (32,959) (9,053)
31,513 14,424
(63) 24,587 2,235
361 122,397 120,162
$ 298 $ 146,984 $ 122,397
See Independent Auditors'Report and Notes to General Purpose Financial Statements 6
CITY OF HUNTINGTON BEACH ,
COMBINED STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
GENERAL,SPECIAL REVENUE AND DEBT SERVICE FUND TYPES ,
FOR THE YEAR ENDED SEPTEMBER 30,2000
(IN THOUSANDS)
GENERAL FUND SPECIAL REVENUE FUNDS '
REVENUES: Budget Actual Variance IBudget Actual Variance
Property Taxes $ 30,612 $ 31,914 $ 1.302 S $ - $
Other Taxes 44.200 49.567 5.367 1.475 1,805 330 '
Licenses and Permits 6,386 6,615 229 1.050 1,439 389
Fines,Forfeitures and Penalties 3,630 4,018 388 -
From Use of Money and Property 7,921 8.433 512 882 1.656 774
From Other Agencies 13,060 16,092 3,032 19,935 13.319 (6,616) ,
Charges for current Service 8,520 9,024 504 393 633 240
Other 1,184 947 (237) 205 4,690 4,485
TOTAL REVENUES 115,513 126,610 11,097 23,940 23,542 (398)
EXPENDITURES:
Current: '
City Council 296 277 19 - -
City Administrator 1,289 1.323 (34) 649 476 173
City Treasurer 1,047 884 163 -
City Attorney 1.704 1.772 (68) '
City Clerk 456 451 5
Administrative Services 3,414 3,525 (111)
Planning 2,503 2,169 334
Building 2,516 2,384 132
Fire 16,775 17,362 (587) 159 54 105 ,
Police 34.966 35.164 (198) 1.991 976 1,015
Community Services 9,756 9.106 650 627 495 132
Library Services 3,075 3.318 (243) 288 267 21
Public Works 23,239 22.400 839 4,335 2.629 1,706 '
Non-Departmental 15,342 14,980 362 - - -
Capital Outlay 3,036 1,903 1,133 21.470 8,675 12,795
Debt Service:
Principal - 15 (15) 30 85 (55)
Interest 875 830 45 9 34 (25)
TOTAL EXPENDITURES 120,289 117,863 2,426 36,470 18,578 17,892
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (4,776) 8,747 13,623 (12.630) 4,964 17,494 '
OTHER FINANCING SOURCES(USES):
Operating Transfers In 2,690 2.752 62 5,102 5,082 (20)
Proceeds of Bankruptcy Settlements(Note 19) - 966 966 1,216 1.216
Operating Transfers Out (11.651) (11,651) - (6,602) (6,687) (85)
TOTAL OTHER FINANCING SOURCES(USES) (8,961) (7,933) 1,028 1,070 2,366 1,296 '
EXCESS OF REVENUE AND OTHER
SOURCES OVER(UNDER)EXPENDITURES
AND OTHER USES (13,737) 814 14,551 (11.460) 7,330 18,790
FUND BALANCE-BEGINNING OF YEAR 42,919 42,919 16,778 16,778 '
FUND BALANCE-END OF YEAR S 29,182 S 43,733 $ 14,551 S 5,318 $ 24,108 S 18,790
See Independent Auditors'Report and Notes to General Purpose Financial Statements 7
' DEBT SERVICE FUNDS TOTALS(MEMORANDUM ONLY)
REVENUES: Budget Actual Variance I Budget Actual Variance
Property Taxes $ 5,507 $ 5,731 $ 224 $ 36,119 $ 37.645 $ 1.526
' Other Taxes - - - 45,675 51.372 5,697
Licenses and Permits 7,436 8.054 618
Fines,Forfeitures and Penalties 3,630 4.018 388
From Use of Money and Property 2.326 2.547 221 11.129 12.636 1,507
' From Other Agencies - 20 20 32,995 29,431 (3,564)
Charges for Current Service 8.913 9.657 744
Other 1.389 5.637 4,248
TOTAL REVENUES 7,833 8,298 465 147,286 158,450 11,164
EXPENDITURES:
Current:
City Council 296 277 19
City Administrator 1.938 1,799 139
City Treasurer - - - 1.047 884 163
' City Attorney 1,704 1.772 (68)
City Clerk 456 451 5
Administrative Services - - - 3,414 3,525 (111)
Planning 2.503 2,169 334
' Building = = 2.516 2.384 132
Fire 16,934 17,416 (482)
Police 36,957 36,140 817
Community Services 10.383 9,601 782
Library Services 3.363 3.565 (222)
' Public Works 27,574 25,029 2,545
Non-Departmental 636 642 (6) 15.978 15,622 356
Capital Outlay - - 24.506 10,578 13,928
Debt Service:
' Principal 2.230 3,733 (1,503) 2,260 3.833 (1,573)
Interest 13,746 11.300 2,446 14,630 12,164 2,466
TOTAL EXPENDITURES 17,596 16,939 1,657 174,355 152,380 21,975
' EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (9,7631 (7,641) Z122 (27,069) 6,070 33,139
OTHER FINANCING SOURCES(USES):
Operating Transfers In 3.435 3,469 34 11,227 11.303 76
Proceeds of Bankruptcy Settlements(Note 19) - 442 442 - 2,624 2,624
' Operating Transfers Out (12,758) (12,809) (51) (31,011) (31,147) (136)
TOTAL OTHER FINANCING SOURCES(USES) 15,584 16,041 457 7,693 10,474 2,781
EXCESS OF REVENUE AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES 5,821 8,400 2,579 (19,376) 16,644 35,920
FUND BALANCE-BEGINNING OF YEAR 29,979 29,979 89,676 89,676
FUND BALANCE-END OF YEAR $ 35,800 $ 38,379 $ 2,579 $ 70,300 $ 106.220 $ 35,920
' See Independent Auditors'Report and Notes to General Purpose Financial Statements a
CITY OF HUNTINGTON BEACH
COMBINED STATEMENT OF REVENUES, EXPENSES AND ,
CHANGES IN RETAINED EARNINGS
ALL PROPRIETARY FUND TYPES
FOR THE YEAR ENDED SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30, 1999 '
(IN THOUSANDS)
Memorandum Only '
OPERATING REVENUES: Enterprise Internal Service I Total 2000 Total 1999
Sales $ 21,913 $ - $ 21,913 $ 17,839
Rentals 654 - 654 661
Fees for Service 12,830 13,438 26,268 26,534 ,
Other 1,309 236 1,545 1,790
TOTAL OPERATING REVENUES 36,706 13,674 50,380 46,824
OPERATING EXPENSES:
Water Purchases 4,541 - 4,541 4,091 '
Supplies and Operations 16,203 2,996 19,199 20,624
Engineering 837 - 837 810
Production 4,833 - 4,833 4,278
Maintenance 4,096 - 4,096 1,224 '
Water Meters - - - 945
Water Quality 291 - 291 245
In-Lieu Taxes to General Fund 4,102 - 4,102 2,808
Claims and Insurance - 8,008 8,008 4,099 '
City Attorney - - - 5
Depreciation 1,665 3,072 4,737 4,210
TOTAL OPERATING EXPENSES 36,568 14,076 50,644 43,339
OPERATING INCOME(LOSS) 138 (402) (264) 3,485
NON-OPERATING REVENUES(EXPENSES) '
Interest Income 2,178 648 2,826 2,273
Joint Venture Income - - - (72)
Bankruptcy Proceeds 1,219 806 2,025
Interest Expense (354) (136) (490) (942) '
Joint Venture 56 - 56 (311)
TOTAL NON-OPERATING REVENUES(EXPENSES) 3,099 1,31E 4,417 948
NET INCOME(LOSS)BEFORE OPERATING TRANSFERS 3,237 916 4,153 4,433
OPERATING TRANSFERS IN(OUT)(NOTE 10) '
Operating Transfers In 657 2,750 3,407 383
Operating Transfers Out (193) (784) (977) (25)
TOTAL OPERATING TRANSFERS IN(OUT) 464 1,966 2,430 358
NET INCOME BEFORE ADDBACK OF DEPRECIATION 3,701 2,882 6,583 4,791 '
Depreciation on Donated Assets 1,231 1,113 2,344 2,090
NET INCOME(LOSS) 4,932 3,995 8,927 6,881
RETAINED EARNINGS-BEGINNING OF YEAR 36,018 6,833 43,876 36,995
RETAINED EARNINGS -END OF YEAR $ 40,950 $ 10,828 $ 51,778 $ 43,876 '
See Independent Auditors'Report and Notes to General Purpose Financial Statements s ,
CITY OF HUNTINGTON BEACH
COMBINED STATEMENT OF CASH FLOWS
ALL PROPRIETARY FUND TYPES
FOR THE YEAR ENDED SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30, 1999
(IN THOUSANDS)
Memorandum Only
CASH FLOWS FROM OPERATING ACTIVITIES: Enterprise Internal Service I Totals 2000 F Totals 1999:d
OPERATING INCOME(LOSS) $ 138 $ (402) $ (264) $ 510
Adjustments Required to Reconcile Operating Income(Loss)to Net Cash
Provided (Used)by Operating Activities:
' Depreciation 1,665 3,072 4,737 3,677
Decrease(Increase)in Accounts Receivable (862) 193 (669) (186)
Decrease(Increase)in Interest Receivable (491) - (491) (50)
Decrease(Increase)in Prepaid Insurance - (557) (557) (721)
Decrease(Increase)in Unbilled Receivable (579) (579) (868)
Decrease(Increase)in Advance to Other Funds 3,793 - 3,793 (302)
Decrease(Increase in Due from Other Funds 1,301 865 2,166 (396)
Decrease(Increase)in Inventory (20) - (20) (83)
Increase(Decrease)in Accounts Payable (198) (1,024) (1,222) 793
Increase(Decrease)in Accrued Payroll 9 408 417 (59)
Increase(Decrease)in Interest Payable - (3) (3) 8
Increase(Decrease)in Leases Payable (20) (46) (66) (39)
Increase(Decrease)in Claims Payable (239) (239) 389
Increase(Decrease)in Amount Due to Other Funds (633) (1,032) (1,665) (67)
Increase(Decrease)in Deposits (106) - (106) (19)
' Increase(Decrease)in Compensated Absences 64 7 71 82
TOTAL ADJUSTMENTS 3,923 1,644 5,567 2,159
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,061 1,242 5,303 2,669
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
' Operating Transfers In From Other Funds 657 2,750 3,407 4,016
Operating Transfers Out to Other Funds (193) (784) (977) (116)
TOTAL CASH FLOWS PROVIDED(USED)FROM NON-CAPITAL
FINANCING ACTIVITIES 464 1,966 2,430 3,900
CASH FLOWS FROM CAPITAL AND RELATED FINANCING Contributions 11,585 - 11,585 6,747
Interest Paid (353) (136) (489) (457)
Acquisition and Construction of Capital Assets (1,069) (1,625) (2,694) (6,110)
Proceeds of Sale of Plant,Property and Equipment - 102 102 -
Principal Paid on Long-Term Debt (5,142) (697) (5,839) (90)
TOTAL CASH PROVIDED(USED)FOR CAPITAL AND RELATED
FINANCING ACTIVITIES 5,021 (2,356) 2,665 90
CASH FLOWS FROM INVESTING ACTIVITIES: -
Joint Venture Cash Received(Paid) 56 - 56 (288)
Proceeds of Bankruptcy Settlements 1,219 806 2,025
Interest on Investments 2,178 648 2,826 1,857
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES 3,453 1,454 4,907 1,569
NET INCREASE IN CASH AND CASH EQUIVALENTS 12,999 2,306 15,305 8,228
CASH AND CASH EQUIVALENTS,BEGINNING OF YEAR 24,696 8,865 19,110 10,882
CASH AND CASH EQUIVALENTS,END OF YEAR $ 37,695 $ 11,171 $ 34,415 $ 19,110
NON-CASH ACTIVITIES:
Plant,Property,and Equipment Contributions/Transfers $ - $ 713 $ 713 $ 372
Joint Venture Activity $ - $ - $ - $ (364)
Acquisition of Asset Through Capital Lease $ - $ 614 $ 614 $ -
' See Independent Auditors'Report and Notes to General Purpose Financial Statements 10
CITY OF HUNTINGTON BEACH
STATEMENT OF CHANGES IN PLAN
NET ASSETS '
FOR THE YEAR ENDING SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED
SEPTEMBER 30, 1999 '
(IN THOUSANDS)
TOTAL TOTAL
Additions: 2000 1999 '
Employer Contributions $ 1,702 $1,559
Interest Income 281 133
Total Additions 1,983 1,692 ,
Deductions:
Benefits 934 847 ,
Administration 21 -
Total Deductions 956 847
Net Increase in Plan Assets 1,028 845 '
Fund Balance-Beginning of Year 4,128 3,283
Fund Balance Reserved for Employer's Pension
Benefits-End of Year $ 6,156 $4,128
See Independent Auditors'Report and Notes to General Purpose Financial Statements '
11
' Notes to Financial Statements
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 INFORMATION
12.GENERAL LONG-TERM DEBT
13.PROPRIETARY FUND LONG-TERM DEBT
' 14.LONG-TERM DEBT NOT RECORDED IN FINANCIAL STATEMENTS
15.FIXED ASSETS
16.RESERVES AND DESIGNATIONS OF FUND EQUITY
17.COMMITMENTS AND CONTINGENCIES
18.JOINT VENTURES
' 19.OTHER INFORMATION
City of Huntington Beach
Notes to Financial Statements '
September 30, 2000
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 ,
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 Projects Funds account for moneys used for the acquisition and construction
of major capital facilities.
Proprietary Fund Types:
,
P rY YP
• 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. ,
• The Expendable Trust Fund accounts for the assets of the City's deferred
compensation plan that are still held by the City in a fiduciary capacity.
See Independent Auditors' Report - 12 -
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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.
b. Basis of Accounting:
Governmental, agency, and expendable trust funds use a modified accrual basis of
accounting. These funds recognize revenue when it is susceptible to accrual. It must be
measurable and available to finance current period expenditures. They include property
taxes, sales tax, governmental 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
measurable 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 No. 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:
The City accounts for its governmental and expendable trust 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.
Benefits paid from the pension trust fund are recognized when paid. Contributions made
are funded by a percentage of payroll and are recognized when the payroll is incurred.
13
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ,
d. Budgetary Information:
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
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 departmental budget. Department heads may transfer funds from like
object categories of the same department.The City Council must approve any 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 with included carryovers of prior year encumbrances
all of which were within available fund balance and estimated revenue amounts.
The City Council adopts governmental fund budgets consistent with generally accepted
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. 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.
14
See Independent Auditors' Report
' City of Huntington Beach
Notes to Financial Statements
September 30, 2000
( 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
d. Budgetary Information:
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 reapproprates these encumbrances into the new fiscal year.
e. Investments:
The City records investments at fair value.
f. 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.
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 15 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
tinvested proceeds over the same period.
15
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements ,
September 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ,
g. 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. Proprietary
inventories are valued at weighted-average cost.
h. Interfund Transactions: '
Numerous transactions occur between funds of the City resulting in operating transfers,
residual equity transfers, amounts due to orfrom otherfunds and amounts advanced to or
from other funds.
• Residual equity transfers are non-routine permanent equity transfers 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.
• 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.
i. 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.
16
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
I. Long-Term Obligations:
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
IStatement No. 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.
j. 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
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.
k. Fund Equity:
The various types of fund equity recorded on the balance sheet are described below:
Governmental and Fiduciary Fund Types:
• 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.
17
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements ,
September 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ,
k. Fund Equity:
Proprietary 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 reduced
from the contributed capital total. '
Account Groups:
• Investment in General Fixed Assets is the City's investment in general fixed assets
recorded at cost.
I. 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 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 January 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 10
• Delinquent Date, Second Installment April 10
18
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
I. Property Tax Revenue:
The taxes are paid to the local governments periodically during the year. Below are the
' dates of the payments from the County:
• Payments of First Installment November to December
• Balance of First Installment February 1
• Payments of Second Installment March to April
• Balance of Second Installment July 26
m. 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.
n. Equipment Replacement Fund:
All machinery and equipment not owned by proprietary funds or funded by the Public
' Financing Authority 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.
o. 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).
p. Joint Ventures:
rThe City is involved in four joint ventures. One is 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 activities are recorded
in governmental funds and the City's interest is recorded in the General Fixed Assets
Account Group (see Note 18).
19
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements '
September 30, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ,
q. 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 citywide
cash and investment pool.
r. 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 t
charter, full-service city. The form of government is Council-Manager. Component units are
legally separate organizations for which the City Council is financial 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.
• 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
two capital .projects.funds. The Redevelopment Agency's debt is recorded in the
General Long-Term Debt Account Group since these amounts will be paid from future
financial resources. Separately prepared financial statements are available for the
Redevelopment Agency from the City's Administrative Services Department.
r
t
Zo
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
( 2. REPORTING ENTITY (CONTINUED):
• Huntington Beach Civic Center Improvement Corporation (Civic Improvement
Corporation)—This corporation was formed to 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 Authori Public Financing Authority)—This
.� g ri ( 9 tY
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. The
Authority's activity is recorded as both a debt service fund and as an internal service
fund. There are separately prepared financial statements available for the Public
Financing Authority that are available from the City's Administrative Services
Department.
• 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 activity 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.
21
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements ,
September 30, 2000
2. REPORTING ENTITY (CONTINUED): ,
•
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 assets held on behalf of ,
the Business Improvement District's activity are 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 invest 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 $ 125,295 '
Cash With Fiscal Agent 17,110
Total $ 142,405
j
I
22 ,
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
3. CASH AND INVESTMENTS (CONTINUED):
The City's investment policy and Section 53601 of the California Government Code allows
the following investments:
Bankers acceptances
• Negotiable certificates of deposit
• Commercial paper
Bonds issued by the City or an Agency within the State of California
• Obligations of the United States Treasury
Federal Agency Obligations of:
Federal Intermediate Credit Bank
Federal Land Bank
Federal Home Loan Bank
Federal National Mortgage Association
Small Business Administration
Government National Mortgage Association
Tennessee Valley Authorities
Student Loan Association Notes
Federal Home Loan Corporation Notes
• Medium Term Corporate Notes
• Time Deposits — Certificates of Deposit
Obligations of the State of California
Mutual Funds
• 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.
• 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.
23
See Independent Auditors' Report
1
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
3. CASH AND INVESTMENTS (CONTINUED): ,
Classification of Deposits and Investments by Credit Risk:
The City categorizes its balance of deposits and investments with financial institutions
under the following risk categories:
_. DEPOSITS:
Category ry 1 - Deposits insured orcollateralized 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 in the City's
name.
INVESTMENTS: '
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.
24 ,
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
3. CASH AND INVESTMENTS (CONTINUED):
Deposits and investments were categorized as follows at September 30,2000(in thousands):
i Fair
Non Bank Value/Carrying
DEPOSITS: 1 2 3 Categorized Balance Amount
Demand Accounts $ 142 $1,853 $ - $ - $ 1,995 $ (1,083)
INVESTMENTS:
Commercial Paper 3,978 - - 3,978
Investment in L.A.I.F. - - - 37,149 37,149
Federal Agency Issues 56,179 56,179
Treasury Securities 6,964 - - - 6,964
Medium Term Notes 12,735 - - - 12,735
Mutual Funds 6,051 6,051
Repurchase Agreements 3,258 3,258
Investments with Fiscal Agent:
Guaranteed Investment
Contracts - - - 13,302 13,302
I Federal Agency Issues - = 295 295
Mutual Funds 2,434 2,434
U.S-Treasury Obligations - - 1,079 - 1,079
Subtotal of Investments $79,866 $ - $4,632 $ 58,936 $ - $ 143,424
Total Deposits and Investments $79,998 $1,853 $4,632 $ 58,936 $ 1,995 $ 142,341
Petty Cash 64
Totals $ 142,405
• Investments Not Subject to Categorization:
Investments in the California Local Agency Investment Fund (LAIF),"Guaranteed Investment
Contracts and Money Market Mutual Funds are not categorized, as GASB 3 does not require
categorization of investment pools managed by another government.
25
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements I
September 30, 2000
1
3. CASH AND INVESTMENTS (CONTINUED):
• Local Agency Investment Fund (LAIF):
The LAIF is a special fund of the California State Treasury through which local governments
may pool investments. Each city may invest up to $30,000,000 each in the Fund for the city
and redevelopment agency and may also invest without limitation in special bond proceeds
accounts. Investments in LAW are highly liquid, as deposits can be converted to cash within
twenty-four hours without loss of interest. Included in LAIF's investment portfolio are certain
derivative securities or similar products such as structured notes totaling $1,934,398,000 and
asset-backed securities totaling $761,227,000. LAIF's, and the City's, exposure tocredit,
market or legal risk is not available. The City's proportionate share of its fair value,in LAW
was $37,149,000.
4. DEFERRED COMPENSATION:
Permanent City employees may defer a portion of their salary under Section 457,of the
Internal Revenue Code. This plan permits employees to defer a portion of their salary until
future years. The compensation is not available to the employees until termination, ,
retirement, or unforeseen emergency.
The City has established a trust for the assets of the plan held by third parties. All property r
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.
Amounts administered by outside organizations in a trustee capacity are no longer reported
as assets of the City. The City does not have fiduciary responsibility for these assets.
A portion of the assets in the plan was still held by the City at year-end. The accompanying
financial statements show the amounts held by the City as an expendable trust fund.The City
has the duty of care of an ordinary prudent investor. The City believes it is unlikely that it will
use these assets to satisfy the claims of general creditors.
26
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
I
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 Redevelopment Agency $ 6,026
TOTAL GENERAL FUND 6,026
SPECIAL REVENUE FUNDS:
Park Acquisition and Development Fund:
Sale of Emerald Cove Site to Redevelopment Agency 1,984
Development Fees Deferred in 1985 248
Land-in-lieu Park Fees 2,851
' Interest 1,626
Total Park Acquisition and Development Fund 6,709
Sewer Fund:
Deferred Development Fees 38
Interest on Developer Fees and Advances to Redevelopment Agency 129
Total Sewer Fund 167
Gas Tax Fund:
Interest on Advances to Redevelopment Agency 660
Grant Fund:
Revenues Received in Advance 3,268
Drainage Fund:
Deferred Development Fees 54
Interest on Developer Fees and Advances to Redevelopment Agency 259
Total Drainage Fund 313
TOTAL SPECIAL REVENUE FUNDS 11,117
CAPITAL PROJECTS FUNDS:
Capital Improvement Fund:
Interest on Advances to Redevelopment Agency 222
TOTAL CAPITAL PROJECTS FUNDS 222
TOTAL OTHER DEFERRED REVENUE $ 17,365
27
See Independent Auditors' Report
r
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
6. RETIREMENT PLAN — NORMAL: ,
a. Plan Description:
The City contributes to the California Public Employees' Retirement System(CALPERS),
an agent, multiple-employer public employee defined benefit pension plan. CALPERS
provides retirement and disability benefits, annual cost-of-living adjustments, and death
benefits to plan members and beneficiaries. CALPERS acts as a common investment and
administrative agent for participating public entities within California. Benefit provisions
and all other requirements are established by state statute and city ordinance. Copies of
CALPERS annual financial report may be obtained from their executive office: 400 P
Street, Sacramento, CA 95814.
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 an actuarially established rate, is set by CALPERS, and changes
from year to year. The employer and member rates for the fiscal year ending September
30, 2000 are: ,
October 1, July 1, 2000 to
1999 to June September 30,
30, 2000 2000
Local Miscellaneous 0.0000% 0.0000% r
Local Safety 0.0218% 0.0000%
r
c. Annual Pension Cost:
The City's annual pension cost of$5,515,603 was equal to the City's required and actual
contributions. The required contribution was determined as part of a June 30, 1998
actuarial valuation using the entry age normal actuarial cost method.
r.
28
See Independent Auditors' Report
r
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
6. RETIREMENT PLAN — NORMAL (CONTINUED):
c. Annual Pension Cost:
CALPERS conducted an actuarial valuation using the entry-age actuarial cost method
using a level percent of payroll to determine the City's net pension obligation as of June
30, 1999. Significant assumptions were:
• Average remaining period —22 Years as of the Valuation Date—closed end
• Asset valuation method — 3 years smoothed market
• Investment Rate of Return — 8.25%
• Projected salary increases — 3.75% to 11.59% (safety) and 3.75% to 14.2%
(miscellaneous) depending on age, service, and type of employment
• Inflation — 3.50%
i • Payroll growth — 3.75%
• Individual salary growth —A merit scale varying by duration of employment coupled
with an assumed annual inflation component of 3.50% and an annual production
growth of .25%
Initial unfunded liabilities are amortized over a closed period that depends on the plan's
date of entry into CALPERS. Subsequent plan amendments are amortized as a level
percent of pay over a closed 20 year period. Gains and losses that occur in the operation
of the plan are amortized over a rolling period, which results in an amortization of 10% of
the unamortized gains and losses each year. If the plan's accrued liability exceeds the
actuarial value of the assets, then the amortization payment on the total unfunded liability
may not be lower than the payment calculated over a 30-year amortization period.
d. Trend Information:
Three-Year Trend Information for the Miscellaneous and Safety Plans:
Annual Pension
' Cost (In Percentage of Net Pension
Fiscal Year Thousands) APC Funded Obligation
9/30/98 $8,437 100% $0
9/30/99 $7,529 100% $0
9/30/2000 $5,516 100% $0
r29
See Independent Auditors' Report
r
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
6. RETIREMENT PLAN — NORMAL (CONTINUED):
e. Trend Information:
Schedule of Funding Progress for CALPERS (Dollar Amounts in thousands):
Entry Age
Normal
Actuarial Actuarial UAAL as a
Actuarial Accrued Value of Unfunded Funded Covered Percentage of
Valuation Date Liability (AAL) Assets AAL(UAAL) Ratio Payroll Covered Payroll
1997 (A) (B) (A)-(B) (B)/(A) (C) I(A)-(B)/Cl
Safety 184,026 195,194 (11,168) 106.1% 21,885 (51.03) %
Non Safety 119,945 152,628 (32,683) 127.2% 29,376 (111.26) %
Total 303,971 347,822 (43,851) 114.4% 51,261 (85.54) % '
1998
Safety 203,259 229,982 (26,723) 113.1% 21,218 (125.94) %
Non Safety 127,806 181,299 (53,493) 141.9% 29,025 (184.30) %
Total 331,065 411,281 (80,216) 124.2% 50,243 (159.66)%
1999
Safety 217,156 257,922 (40,691 118.7% 22,502 (180.83) %
Non Safety 147,194 210,071 (62,877) 142.7% 30,622 (205.33) %
Total 364,350 467,993 (103,643) 128.4% 53,124 (194.00) %
7. RETIREMENT PLAN — SUPPLEMENTAL: ,
a. Plan Description:
The City provides a supplemental retirement plan for all employees hired prior to January
1, 1998. 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 contracts with
employee bargaining associations establish the plan. These associations must agree to
any changes to the plan.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 remains constant for his or her life. Of the 1,000 active employees
reported on the July 1, 2000 data, only 888 were eligible for plan benefits. No separately
prepared financial statements are prepared for this plan and it is not included in the
financial report of any other pension plan.
30 r
See Independent Auditors' Report
r
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
7. RETIREMENT PLAN — SUPPLEMENTAL (CONTINUED):
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 5.34% of covered
payroll for all permanent employees.Administrative costs of this plan are financed through
investment earnings.
c. Annual Pension Cost and Net Pension Obligation:
The City's annual pension cost and net pension obligation for this plan at June 30, 2000
were (in thousands):
Annual required contribution $2,638
Interest on net pension obligation 398
Adjustment to annual required contribution (499)
Annual pension cost 2,537
Contributions made 1,631
Increase (decrease) in net pension obligation 906
Net Pension Obligation — Beginning of Year 7,244
Net Pension Obligation — End of Year 8 1 00
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%
Inflation rate — 3.0%
Post employment benefit increases—0%
• Amortization of unfunded liability— level percentage-of pay ending in 2027
• Actuarial value of assets— market value
31
See Independent Auditors' Report
1
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
7. RETIREMENT PLAN — SUPPLEMENTAL (CONTINUED):
d. Trend Information:
Below is the required three-year trend information (dollar amounts in thousands):
Fiscal Year Annual Pension Percentage of Net Pension
Cost APC Funded Obligation
6/30/98 $2,193 69% $6,271
6/30/99 2,532 62% 7,244
6/30/00 2,536 64% 8,150
Below is other required trend information (dollar amounts in thousands):
Fiscal Year Annual Percentage of
Ending June Required ARC r
30, Contribution 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%
1998 2,151 70%
1999 2,613 60%
2000 2,638 62%
32
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
7. RETIREMENT PLAN — SUPPLEMENTAL:
d. Trend Information:
Schedule of Funding Progress (Dollar Amounts in Thousands):
Entry Age UAAL as a
Actuarial Normal Actuarial Unfunded % of
Valuation Accrued Value of AAL Funded Covered Covered
Date Liability Assets UAAL Ratio Payroll Pa roll
6/30/94 $14,673 (52) $14,725 (.4%) $53,593 27.5%
Actual
6/30/95 15,776 (290) 16,066 (1.8%) 51,779 31.0%
Update
6/30/96 16,071 (120) 16,191 (.7%) 54,368 29.8%
Actual
6/30/97 25,342 2,334 23,008 9.2% 49,881 46.1%
Actual
6/30/98 26,493 3,251 23,242 12.3% 48,585 47.8%
Update
6/30/99 28,601 4,162 24,439 14.6% 50,723 48.2%
Actual
6/30/2000 28,844 5,077 23,767 17.6% 57,674 41.2%
Update
e. 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 $8,150,000. Actuarial studies and
updates were performed since 1991 and there is a substantial amount of unfunded
pension benefit-liability that would have been recorded in the General Long-Term Debt
Account Group if the studies would have been performed (see Note 12).
33
See Independent Auditors' Report
r
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
r
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 retiree 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 often years of service creditor
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 occur:
• 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 t
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).
Below are the required disclosures for this plan (in thousands):
Number of active participants 1,066
Employer's actuarially required contributions $ 589
Employer's actual contributions $ 544
Below is a summary of the Unfunded Actuarial Accrued Liability for the plan (in
thousands)
Actuarial accrued.liability $9,685
Net assets available for plan benefits 4,395
Unfunded Actuarial Accrued Liability 5 290
34
See Independent Auditors' Report
r
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
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 three separate insurance reserve funds(liability,workers compensation,
and employee health). These funds are recorded as internal service funds and 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 general liability insurance of
$24,000,000 above the City's retention of$1,000,000. BICEP was created by a joint powers
agreement between the City of Huntington Beach and four other local entities for the purpose
of providing joint insurance coverage and related risk management services for member
cities. BICEP allows member entities to finance claims payment pool for certain liability claims
in excess of $1 million to a limit of $25 million. BICEP's governing board has one
representative from each city (either a member of the City Council or designate). Current
members must approve any changes to the board. Each participating City pays an insurance
premium to BICEP that is used to fund the operating and debt service requirements.
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 these funds based on
estimated cost information.
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.
1
■
35
See Independent Auditors' Report
r
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
9. RISK MANAGEMENT (CONTINUED):
Claims activity and liabilities relating to the current and prior year are (in thousands):
Health Workers' Liability '
Insurance Compensation Insurance
Reserve Reserve Reserve Total
Balance October 1, 1998 $ 286 $ 5,199 $ 6,289 $ 11,774
Additions- 1998-99 4,099 3,079 753 7,931
Reductions- 1998-99 (4,099) (2,926) (2,698) (9,723)
Net Increase(Decrease) 1998-99 - 153 (1,945) (1,792)
Balance October 1, 1999 286 5,352 4,344 9,982
Additions- 1999-2000 3,782 4,125 101 8,008
Reductions- 1999-2000 (3,858) (3,069) (1,320) (8,247)
Net Increase (Decrease) 1999-2000 (76) 1,056 (1,219) (239)
Balance September 30, 2000 $ 210 $ 6,408 $ 3,125 $ 9,743
10. INTERFUND TRANSACTIONS:
a. Advances:
Interfund advances (in thousands) at September 30, 2000 were as follows:
Advances to Other Advances from
Fund Other Funds
General Fund $ 26,523 $ -
Special Revenue Funds: '
Gas Tax 1,160 -
Sewer 296 -
Drainage 564 -
Park Acquisition and Development 4,361 - '
Debt Service Funds:
Public Financing Authority 18,894 -
Capital Projects Funds:
Capital Improvement 422 -
Low-Income Housing 2,094 -
Enterprise Funds:
Water Utility 2,735
Emerald Cove Housing - 244
General Long-Term Debt Account Group - 56,805
Total $ 57,049 $ 57,049
36
See Independent Auditors' Report
r
r
City of Huntington Beach
iNotes to Financial Statements
September 30, 2000
10. INTERFUND TRANSACTIONS (CONTINUED):
b. Due To/From Other Funds:
' Due To/From Other Funds (in thousands) at September 30, 2000 were as follows:
Due from Other Due to Other
Funds Funds -
General Fund $ 1,330 $
Special Revenue Funds:
Narcotics Forfeiture - 94
Capital Projects Funds:
Pier Plaza 413
Enterprise Funds:
Refuse Collection - 823
Total $ 1,330 $ 1,330
c. Transfers:
Operating Transfers In/Out (in thousands) at September 30,2000 were as follows:
' Operating Transfers In -Governmental Funds $ 30,529
Operating Transfers In -Proprietary Funds 3,407
Total Operating Transfers In $ 33,936
1 Operating Transfers Out-Governmental Funds $ (32,959)
Operating Transfers Out-Proprietary Funds (977)
Total Operating Transfers Out $ (33,936)
1
37
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
11. PROPRIETARY FUND INFORMATION:
a. Segment Information for Enterprise Funds: '
Emerald Emergency Refuse Hazmat Cultural ,
Water Cove Fire Medical Collection Service Affairs Total
Operating Revenues $ 22,996 $ 657 $ 3,858 $ 8,843 $ 180 $ 172 $ 36,706
Depreciation Expense(Total) 1,487 82 68 - 24 24 1,685
Depreciation Expense
(Contributed Capital) 1,207 - - - - 24 1,231
Operating Transfers In - 35 - - - 622 657
Operating Transfers Out - - (181) - (12) - (193)
Operating Income(Loss) (1,078) 185 371 712 55 (107) 138
Net Income (Loss) 1,965 228 238 712 43 515 3,701
Fixed Asset Acquisitions 858 - 211 - 20 - 1,089
Net Working Capital (Deficit) 38,152 2,135 1,631 498 155 20 42,591
Total Assets 78,796 6,316 2,097 1,569 168 1,970 90,916
Current Assets 41,319 2,157 1,849 1,569 160 87 47,141
Long-Term Obligations Net of '
Current Portion 319 244 32 39 7 3 644
Current Liabilities 3,167 22 218 1,071 5 67 4,550
Retained Earnings (Fund
Deficit) ' 38,592 190 1,536 459 156 17 40,950
Contributed Capital 36,718 5,860 311 - - 1,883 44,772
Total Fund Equity (Deficit) 75,310 6,050 1,847 459 156 1,900 85,722
38
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
11. PROPRIETARY FUND INFORMATION (CONTINUED):
b. Contributed Capital:
The changes in Proprietary Fund Contributed Capital during the year, and the year-end
' balances were (in thousands):
Depreciation
Balance- on Balance -
October 1,Contributions/ Contributions Contributed September
Enterprise: 1999 Additions of Equipment Capital 30,2000
Water $ 30,104 $ 7,013 808 $ (1,207) $ 36,718
Emerald Cove 1,288 4,572 - - 5,860
Emergency Fire
Medical 311 - - - 311
Cultural Affairs 1,907 - - (24) 1,883
Total Enterprise
Funds 33,610 11,585 808 (1,231) 44,772
1 Internal Service: -
Equipment
Replacement 5,249 713 (1,113) 4,849
Total Internal Service
Funds 5,249 - 713 (1,113) 4,849
Total Contributed
Capital $ 38,859 $ 11,585 $ 1,621 $ (2,344) $ 49,621
39
See Independent Auditors' Report
� 1
r
City of Huntington Beach
Notes to Financial Statements ,
September 30, 2000
12. GENERAL LONG-TERM DEBT:
The changes in general long-term debt during the year were (in thousands): '
October 1, September 30,
1999 Additions Retirements 2000 ,
Civic Improvement Corporation Refunding
Certificates of Participation (Civic Center)-
1993 $ 18,030 $ - $ (670) $ 17,360
Civic Improvement Corporation Refunding ,
Certificates of Participation (Police
Administration Building) -1993 13,925 - (405) 13,520
Compensated Absences 5,463 2,141 (1,469) 6,135
Advances from Other Funds 59,897 5,202 (8,294) 56,805
1992 Public Financing Authority Revenue
Bonds 21,275 - (390) 20,885
Notes Payable 451 - (58) 393
1999 Redevelopment Agency Tax Allocation
Refunding Bonds 10,340 - (280) 10,060
2000 Public Financing Authority Certificates of
Participation - 18,310 18,310
Mayer Disposition and Development Agreement 10,142 1,536 - 11,678
Section 108 Loan - 8,570 (215) 8,355
Reservoir Hill Assessment Bonds 1,030 - (215) 815
1997 Public Financing Authority Leasehold
Revenue Bonds 7,440 - (420) 7,020
Net Benefit Obligation 7,244 906 - 8,150
Leases Payable - 185 (30) 155
Energy Financing Loan 308 880 (15) 1,173
Total General Long-Term Debt $ 155,545 $ 37,730 $ (12,461) $ 180,814 ,
40 '
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
12. GENERAL LONG-TERM DEBT:
Below are reconciliations from amounts in the above table to amounts in the accompanying
general purpose financial statements (in thousands):
' Proceeds of Long-Term Debt per General Purpose Financial Statements 34,683
Plus Increases in Compensated Absences 2,141
Plus Increases in Net Pension Obligation 906
Proceeds of Long-Term Debt in Statement of Changes in Long-Term Debt $ 37,730
' Principal Paid Per General Purpose Financial Statements 6,333
Plus Changes in Compensated Absences 1,469
Unpaid Interest on Interfund Debt 4,659
Deletions Shown in Statement in Changes in Long-Term Debt $ 12,461
a. Huntington Beach Civic Improvement Corporation Refunding Certificates of
Participation (Civic Center Project):
Year of Issuance 1993
Type of Debt Refunding Certificates of
Participation
' Original Principal Amount $21,895,000
Security Lease on Civic Buildings
' Interest Rates 2.75% to 5.8%
Interest Payment Dates February 1S and August 1S
Principal Payment Dates August 1s'
' Purpose of Debt Refinance 1986 Civic
Improvement Corporation
Certificates of Participation
1
' 41
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements '
September 30, 2000
12. GENERAL LONG-TERM DEBT (CONTINUED): ,
a. Huntington Beach Civic Improvement Corporation Refunding Certificates of '
:;. Participation (Civic Center Project):
Debt service requirements to maturity are (in thousands): ,
Year Ending Total
September 30, Principal Interest
2001 $ 705 $ 957 $ 1,662
2002 745 920 1,665
2003 785 880 1,665 '
2004 825 837 1,662
2005 865 792 1,657
2006 and after 13,435 4,836 18,271
Total $ 17,360 $ 9,222 $ 26,582
b. Huntington Beach Civic Improvement Corporation Refunding Certificates of
Participation (Police Administration Project): ,
Year of Issuance 1993
Type of Debt Refunding Certificates of
Participation
Original Principal Amount $16,350,000
Security Lease on Civic Buildings '
Interest Rates 4.0% to 5.7%
Interest Payment Dates February 1S and August 1s'
Principal Payment Dates August 1" ,
Purpose of Debt Refinance 1989 Civic
Improvement Corporation
Certificates of Participation ,
42 ,
See Independent Auditors' Report
' City of Huntington Beach
Notes to Financial Statements
September 30, 2000
12. GENERAL LONG-TERM DEBT (CONTINUED):
b. Huntington Beach Civic Improvement Corporation Refunding Certificates of
Participation (Police Administration Project):
' Debt service requirements to maturity are (in thousands):
' Year Ending
September 30, Principal Interest Total
2001 $ 425 $ 738 $ 1,163
' 2002 450 718 1,168
2003 470 694 1,164
2004 495 670 1,165
2005 520 644 1,164
2006 and after 11,160 5,132 16,292
Total $ 13,520 $ 8,596 $ 22,116
c. Compensated Absence:
There is no fixed repayment to pay the governmental fund compensated absences liability
of$6,135,000 at year-end.
d. Advances from Other Funds:
1 General Fund:
Direct Advances from 1979 to 1987 to Redevelopment Agency $ 9,319
Direct Advances from proceeds of 1988 Public Financing Authority 4,445
Revenue Bonds repaid to General Fund
Indirect Advances from Redevelopment Agency from 1987 to 1996 6,751
Land Sales to Redevelopment Agency from 1982 to 1992 32,833
Interest on above amounts 31,660
Total Debt 85,007
Less estimated uncollectible amounts (58,485)
' TOTAL GENERAL FUND 26,523
SPECIAL REVENUE FUNDS:
Park Acquisition and Development Fund:
' Land Sale in 1993 to Redevelopment Agency 1,741
Deferred Development Fees-Redevelopment Agency 248
Interest on Above Amounts 2,128
Total Advances from Park Acquisition and Development Fund 4,117
' Sewer Fund:
Advance 1990/91 to Redevelopment Agency 130
Deferred Development Fees—Redevelopment Agency 38
Interest on Above Amounts 129
Total Advances from Sewer Fund 297
43
See Independent Auditors' Report
�1
City of Huntington Beach
Notes to Financial Statements '
September 30, 2000
12. GENERAL LONG-TERM DEBT (CONTINUED):
d. Advances from Other Funds: ,
Drainage Fund:
Advance 1987/88- Redevelopment Agency 250 ,
Deferred Development Fees—Redevelopment Agency 54
Interest on Above Amounts 259
Total Advances from Drainage Fund 563
Gas Tax Fund: '
Advance in 1988/89- Redevelopment Agency 500
Interest on Above Amounts 660
Total Advances from Gas Tax Fund 1,160 ,
TOTAL SPECIAL REVENUE FUNDS 6,138
DEBT SERVICE FUNDS:
Public Financing Authority:
Advances in 1991/92—Redevelopment Agency 18,894
CAPITAL PROJECTS FUNDS:
Capital Improvement Fund:
Advance in 1989/90—Redevelopment Agency 200 '
Interest on Above Amounts 222
Total Capital Improvement Fund 422
Low-Income Housing Fund:
Advances for Educational Revenue Augmentation Fund 732 '
Advances to Redevelopment Capital Projects Fund 1,362
Total Low-Income Housing Fund 2,094
TOTAL CAPITAL PROJECTS FUNDS 2,516
ENTERPRISE FUNDS:
Water Fund:
Advances from 1986/87 to 1988/89—Redevelopment Agency 1,138
Interest on Above Amounts 1,597
TOTAL ENTERPRISE FUNDS 2,735
TOTAL ADVANCES FROM OTHER FUNDS $ 66,805
The changes during the year were (in thousands):
Advances—October 1, 1999 59,897
Advances Repaid (5,100)
Accrued-Interest—Net of Uncollectible Accounts Reported in Other 2,008
Funds as Deferred Revenue '
Advances—September 30,2000 $56,805
44 '
See Independent Auditors' Report
V7
City of Huntington Beach
' Notes to Financial Statements
September 30, 2000
' 12. GENERAL LONG-TERM DEBT (CONTINUED):
e. 1992 Public Financing Authority Revenue Bonds:
' Year of Issuance 1992
Type of Debt Revenue Bonds
' Original Principal Amount $33,495,000 with $10,835,000
defeased in 1999
' Security Loan Agreements with
Redevelopment Agency
Interest Rates 3.00% to 5.05%
' Interest Payment Dates February 15 and Au ust 1S
Principal Payment Dates August 1s'
Purpose of Debt Provide funds for Waterfront
' Development and Remove
Restrictive Covenants on 1988
Revenue Bonds
Debt service requirements to maturity are as follows (in thousands):
' Year Ending
September 30, Principal Interest Total
2001 $ 425 $ 1,458 $ 1,883
' 2002 450 1,430 1,880
2003 490 1,400 1,890
2004 520 1,366 1,886
2005 555 1,330 1,885
' 2006 and after 18,445 13,870 32,315
Total $ 20,885 $ 20,854 $ 41,739
' f. Notes Payable:
' Year of Issuance 1988
Type of Debt First Trust Deed Mortgage
Original Principal Amount $881,000
Security Real Property
Interest Rates 11.75% (variable)
Interest Payment Dates Monthly
' Principal Payment Dates Monthly
Purpose of Debt Purchase of Property
' 45
See Independent Auditors' Report
City 9 of Huntington Beach '
Notes to Financial Statements t
September 30, 2000
12. GENERAL LONG-TERM DEBT (CONTINUED): '
f. Notes Payable:
Debt service requirements to maturity are (in thousands): '
Year Ending t
September 30, Principal Interest Total
2001 $ 52 $47 $99
2002 52 47 99
2003 289 42 331 '
Total $393 $136 $529
g. 1999 Redevelopment Agency Tax Allocation Refunding Bonds: '
Year of Issuance 1999 ,
Type of Debt Tax Allocation Refunding Bonds
Original Principal Amount $10,835,000
Security Tax Increment '
Interest Rates 3.00% to 5.05%
Interest Payment Dates February 1stand August 15
-Principal Payment Dates August 1 s '
Purpose of Debt Prepay Agency's 1992 Loans to
Public Financing Authority '
Debt service requirements to maturity are (in thousands):
Year Ending
September 30 Principal Interest Total
2001 $ 290 $ 449 $ 739 '
2002 300 439 739
2003 310 439 739
2004 320 418 738 ,
2005 335 406 741
2006 and after 8,505 4,179 $12,684
Total $ 10,060 $ 6,330 $16,390 ,
1
46 'See Independent Auditors' Report
1
City of Huntington Beach
' Notes to Financial Statements
September 30, 2000
' 12. GENERAL LONG-TERM DEBT (CONTINUED):
h. 2000 Public Financing Authority Certificates of Participation:
Year of Issuance 2000
' Type of Debt Certificates of Participation
Original Principal Amount $18,310,000
' Security Lease with City
Interest Rates 4.0% to 5.0%
Interest Payment Dates September 1S and March 1S
' Principal Payment Dates September 1 S
Purpose of Debt Capital improvements and
defeasance of Emerald Cove
' Certificates of Participation (see
note 19d)
' Debt service requirements to maturity are (in thousands):
' Year Ending
September 30 Principal Interest Total
2001 $470 $ 970 $1,440
' 2002 545 897 1,442
2003 565 875 1,440
2004 590 851 1,441
2005 615 826 1,441
' 2006 and after 15,525 10,716 26,241
Total $18,310 $ 15,135 $ 33,445
i. Mayer Disposition and Development Agreement:
' In fiscal year 1996-97, the Agency entered into a disposition and development agreement
with Robert Mayer Corporation (Corporation)concerning additional development adjacent
' to the Waterfront Hotel. Under the agreement, the Corporation would advance payments
for the project costs with the Agency reimbursing up to $16,750,000 of the costs. As of
September 30, 2000, the Agency obligation under the agreement amounted to
' $11,678,000. Project-generated revenues as available will repay these amounts over the
time needed to fully amortize the advance.
' 47
See Independent Auditors' Report
1
City of Huntington Beach 'Notes to Financial Statements
September 30, 2000 '
12. GENERAL LONG-TERM DEBT (CONTINUED): '
j. Section 108 Loan:
Year of Issuance 2000 '
Type of Debt Loan from Federal Government
-Original Principal Amount $8,570,000 '
Security Loan Agreement with Federal
Government
Interest Rates 7.7% ,
Interest Payment Dates February 15 and August 1s
-Principal Payment Dates August 15
-Purpose of Debt Capital Improvements '
Year Ending ,
September 30 Principal Interest Total
2001 $ 225 $ 633 $ 858
2002 240 617 857 '
2003 260 600 860
2004 280 . 581 861
2005 300 561 861
2006 and after 7,050 4,687 11,737 '
Total $ 8,355 $ 7,679 $ 16,034
k. Reservoir Hill Assessment Bonds:
Year of Issuance 1989 '
Type of Debt 1915 Improvement Act Bonds
Original Principal Amount $1,653,905 ,
Security Property tax assessments
Interest Rates 6.00% to 8.15% '
Interest Payment Dates March 2" and September 1"
Principal Payment Dates .-September 2"
Purpose of Debt Capital Improvements t
t
48 ,See Independent Auditors' Report
City of Huntington Beach
' Notes to Financial Statements
September 30, 2000
' 12. GENERAL LONG-TERM DEBT (CONTINUED):
' k. Reservoir Hill Assessment Bonds:
Debt service requirements to maturity are (in thousands):
' Year Ending
September 30 Principal Interest Total
2001 $ 70 $ 78 $ 148
' 2002 85 72 157
2003 90 65 155
2004 95 58 153
' 2005 105 51 156
2006 and after 370 98 468
Total $ 815 $ 422 $ 1,237
' I. 1997 Public Financing Authority Revenue Bonds:
Year of Issuance 1997
' -Type of Debt Lease Revenue Bonds
-Original Principal Amount $8,070,000
Security Lease Agreement with City for
' Central Library
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
Debt service requirements to maturity are (in thousands):
Year Ending
' September 30 Principal Interest Total
2001 $ 440 $ 354 $ 794
2002 510 331 841
' 2003 555 303 858
2004 575 278 853
2005 610 245 855
2006 and after 4,330 2,448 6,778
' Total $ 7,020 $ 3,959 $ 10,979
t49
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements '
September 30, 2000
12. GENERAL LONG-TERM DEBT (CONTINUED): '
m. Net Pension Obligation:
There is no fixed repayment schedule to fund the unfunded net pension obligation totaling
'
9 9
$8,150,000 for the City's Retirement Supplement Plan as described in Note 7. The
amount will be funded through a contribution rate determined by an independent actuarial '
study. This amount is significantly less than the total unfunded liability for this plan since
actuarial studies only began in 1991 which was after the plan was in place
n. Leases Payable: '
Year of Issuance 2000 ,
-Type of Debt Capital Lease
-Original Principal Amount $185,000
-Security Lease Agreement '
Interest Rates 5.0% to 6.9%
Interest Payment Dates Variable t
-Principal Payment Dates Variable
Purpose of Debt Purchase Equipment
Future minimum lease payments to maturity are (in thousands): '
Year Ending
September 30 Total Payment
2001 $49
2002 49
2003 34 '
2004 29
2005 15
Total $176 '
Less interest (21)
Total $155
r
50 'See Independent Auditors' Report
' City of Huntington Beach
Notes to Financial Statements
September 30, 2000
t12. GENERAL LONG-TERM DEBT (CONTINUED):
' o. Energy Conservation Loan:
Year of Issuance 1995
' Type of Debt Note Payable— State of
California
Original Principal Amount $1,173,000
' Security Loan Agreement
Interest Rates 6.1%
Interest Payment Dates December 22" and June 22"
' Principal Payment Dates December 22" and June 22"
Purpose of Debt Capital Improvements
Debt service requirements to maturity are in thousands):
q tY ( )
Year Ending
September 30 Principal Interest Total
' 2001 $174 $65 $239
2002 185 54 239
2003 197 42 239
2004 209 30 239
2005 221 18 239
2006 and after 187 10 197
Total $1,173 $219 $1,392
1
51
See Independent Auditors' Report
1
City of Huntington Beach
Notes to Financial Statements ,
September 30, 2000
13. PROPRIETARY FUND LONG-TERM DEBT:
Below is a summary of changes in proprietary fund long-term debt for the year as well as how the ,
debt is reported in the accompanying financial statements (in thousands):
Internal '
Enterprise Service
Funds Funds Total
Advances from Other Funds $ 244 $ - $ 244 ,
Leases Payable 9 1,541 1,550
Claims Payable - 9,743 9,743 '
Compensated Absences 400 57 457
Total $ 653 $ 11,341 $ 11,994
September
October 1,1999 Additions Retirements 30, 2000 '
1991 Emerald Cove Certificates of
Participation $ 5,105 $ - $ (5,105) $ -
Compensated Absences 383 116 (42) 457 '
Advances from Other Funds 244 - - 244
Leases Payable 1,633 614 (697) 1,550
Claims Payable 9,982 8,008 (8,247) 9,743 '
Total $ 17,347 $ 8,738 $ (14,091) $ 11,994
a. Compensated Absences:
There is no fixed repayment schedule to pay the compensated absences for proprietary '
fund types of$457,000 at year-end.
b. Advance 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$244,000 at year-end. '
1
52 '
See Independent Auditors' Report
' City of Huntington Beach
Notes to Financial Statements
September 30, 2000
13. PROPRIETARY FUND LONG-TERM DEBT (CONTINUED):
' c. Leases Payable:
The City entered into capital leases for various equipment replacement items:
' Year of Issuance 1993 through 2000
Type of Debt Capital Leases
Original Principal Amount Various $93,000 to $1,200,000
Security Lease Agreement
Interest Rates 5.0% to 6.9%
' Interest Payment Dates Monthly, Quarterly, Semi-
Annually
Principal Payment Dates Monthly, Quarterly, Semi-
Annually
Purpose of Debt Equipment Financing
The future minimum required lease payments are (in thousands):
Year Ending
September 30 Total Payment
2001 $704
' 2002 635
2003 250
2004 62
' 2005 25
Total 1,676
Less interest (126)
Total $1,550
d. Claims Payable:
There is no fixed repayment schedule for estimated claims payable of$9,743,000 at year-
end (see Note 9). The City pays the claims upon final settlement
' 53
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements '
September 30, 2000
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:
1992 Public Financing Authority Revenue Bonds (partial refunding) $8,900,000 '
1991 Emerald Cove Certificates of Participation 4,995,000
b. Community Facilities District 1990/91 Special Assessment Tax Bonds: '
Year of Issuance 1990
Type of Debt Community Facilities District '
Assessment Bonds
Original Principal Amount $2,400,000
Security Special Tax Levies
Interest Rates 6.35% to 7.60%
Interest Payment Dates Aril 1s and October 15
Principal Payment Dates October 1 s '
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): '
Year Ending
September 30, Principal Interest Total '
2001 $ 45 $ 161 $ 206
2002 45 158 203
2003 50 154 204
2004 55 150 205 ,
2005 60 146 206
2006 and after 1,890 1,366 3,256
Total $ 2,145 $ 2,135 $ 4,280 '
54 '
See Independent Auditors' Report
1
1
' City of Huntington Beach
Notes to Financial Statements
September 30, 2000
14.LONG-TERM DEBT NOT RECORDED IN FINANCIAL STATEMENTS (CONTINUED):
' 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 Amount
Bond Issue Sept. 30, 2000 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 21,800,000 25,000,000
Huntington Village Senior Apartments 1997
Revenue Bonds 4,895,000 4,895,000
' Huntington Breakers Mortgage Revenue Bonds
Refunding Issue — 1996 Series A 16,000,000 16,000,000
' 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):
September 30,
October 1, 1999 Additions Dispositions 2000
Land $ 74,414 $ 564 $ - $ 74,978
Buildings 68,283 34 - 68,317
' Other 2,162 185 - 2,347
Construction in Progress 2,083 4,599 6,682
' Joint Ventures 1,135 - (770) 365
Total $ 148,077 $ 5,382 $ (770) $ 152,689
t55
See Independent Auditors' Report
1
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
15. FIXED ASSETS (CONTINUED): '
The changes in the proprietary fund fixed assets for the year are (in thousands): ,
October 1, September 30, '
ENTERPRISE FUNDS: 1999 Additions Dispositions 2000
Land $ 2,438 $ - $ - $ 2,438
Buildings 8,059 - - 8,059 ,
Construction in Progress 7,731 1,560 (3,914) 5,377
Machinery and Equipment 58,881 4,206 - 63,087 '
Total Cost 77,109 $ 5,766 $ (3,914) 78,961
Less Accumulated
Depreciation (36,278) (37,921)
Net Book Value Enterprise
Funds $ 40,831 $ 41,040
INTERNAL SERVICE October 1, September 30,
FUNDS: 1999 Additions Dispositions 2000 '
Machinery and Equipment $ 37,668 $ 3,055 $ (588) $ 40,135
Construction in Progress 4,432 - - 4,432
Total Cost 42,100 3,055 (588) 44,567
Less Accumulated '
Depreciation $ (26,928) $ (29,534)
Net Book Value Internal
Service Funds $ 15,172 $ 15,033 '
56 '
See Independent Auditors' Report
' City of Huntington Beach
Notes to Financial Statements
September 30, 2000
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 for which 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):
' Special Debt Capital
General Revenue Service Projects
Governmental Funds: Fund Funds Funds Funds Total
' Reservations:
Encumbrances $ 4,987 $ 4,124 $ - $ 1,861 $ 10,972
Long-Term Receivables 20,497 880 18,894 4,637 44,908
Debt Service 19,485 19,485
Capital Projects - - - 6,774 6,774
Pension Payments - - - -
Land Held for Resale 15,401 15,401
Inventory 631 - - - 631
' Total Reserved Fund Equity $ 26,115 $ 5,004 $38,379 $ 28,673 $ 98,171
Designated for Future Expenditures 8,437 6,063 - 1,215 15,715
Economic Uncertainties 9,181 - - - 9,181
' Total Designated $ 17,618 $ 6,063 $ - $ 1,215 $ 24,896
Total Reserved and Designated Fund Equity $ 43,733 $ 11,067 $38,379 $ 29,888 $ 123,067
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.
' 57
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements ,
September 30, 2000
17.COMMITMENTS AND CONTINGENCIES (CONTINUED): t
b. 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/Costa Mesa '
withdraw from CNOA prior to August 20, 2021 the City shall reimburse them by an
amount equal to 1/501h of their contributions.At year-end these amounts totaled$366,000.
c. Townsquare Commercial Loan:
During 1995 the Redevelopment Agency and the Resolution Trust Corporation (RTC)sold L
the interest in the Townsquare development for $820,000. The Agency/RTC financed
$799,000 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.
d. 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. ,
f. Subsequent Event— Property Tax Lawsuit: '
In February, 2001, subsequent to year-end, an independent taxpayer group won a lawsuit
against the City regarding the legality of a type of property tax levied by the City. Pending '
appeal, refunds may be due for fiscal years 1997-98 through 1999-2000 that may amount
to approximately$10.5 million,which does not include any potential refund for fiscal year
2000-2001. The City has designated the remaining General Fund balance for future '
expenditures due to this case.
g. Disposition and Development Agreements:
In June 1999, the Redevelopment Agency entered into a disposition and development
agreement with the CIM Group, LLC to allow development of a hotel, retail and restaurant ,
improvements and a public parking facility.The project costs are to be paid initially by the
developer with the Agency reimbursing the developer a maximum of $900,000 plus
project costs exceeding $45,800,000. ,
58 '
See Independent Auditors' Report
1 City of Huntington Beach
Notes to Financial Statements
September 30, 2000
16.COMMITMENTS AND CONTINGENCIES (CONTINUED):
' g. Disposition and Development Agreements:
During the year the Redevelopment Agency entered into a Disposition and Development
Agreement with a private developer regarding the development of the Huntington Center
Mall. This agreement will require payments by the Agency pending certain actions by the
developer. At year-end, no Agency liability had been incurred.
' 18. JOINT VENTURES:
The City is involved in five joint ventures. Three are reported as investment in joint ventures
in the general fixed asset account group in the accompanying financial statements. Two are
recorded as a portion of proprietary funds. Below is the City's net interest (in thousands):
General Fixed Asset Account Group:
' Central Net Operations Authority $ 128
Metro Cities Fire Authority 171
Public Cable Television Authority 66
' Total General Fixed Asset Account Group: 365
Joint Venture Amounts Reported in Proprietary Funds:
' Reported as Part of Other Balance Sheet Amounts:
Reported as Part of Water Fund:
West Orange County Board 362
' Reported as Part of Prepaid Insurance:
Big Independent Cities Excess Pool Joint Authority 426
1 Total Joint Venture Amounts- Proprietary Funds 788
Total Joint Venture Amounts $ 1,153
' a. Central Net Operations Authority:
In July, 1992 the Cities of Huntington Beach, Fountain Valley, Newport Beach,
I Westminster and the County of Orange formed the Central Net Operations Authority
(Central Net)as a training and dispatch joint-powers entity.The City of Huntington Beach
acts as fiscal agent for CNOA. Each member agency is billed for a portion of the operating
' costs. Other non-member local governments are allowed to participate in certain training
programs for a fee. In June 1996, the member cities agreed to eliminate the
communications services provided by CNOA. These services became the responsibility of
' a new and independent joint powers authority, funded by seven participating cities (see
Note 19b).
59
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements t
September 30, 2000
18. JOINT VENTURES (CONTINUED): '
a. Central Net Operations Authority: '
Central Net is governed by a three 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 13.67%
Newport Beach 50.00%
Fountain Valley 36.33%
Total 100.00%
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 Central Net are available from City of
Huntington Beach Administrative Services Department.
b. Metro Cities Fire Authority: ,
In July, 1996 the Metro Cities Fire Authority (the Fire Authority) was created by a joint- r
powers agreement between the Cities of Anaheim, Fountain Valley, Newport Beach,
Huntington Beach, Garden Grove, Orange and Fullerton.
The agreement provides fire suppression,emergency medical assistance rescueservice,
9 P PP 9 Y �
and related services of the members to a central communication network and record '
keeping systems. Members of the governing board are appointed by each member city.
The _City of_Anaheim acts as fiscal agency for the Fire Authority. The Fire Authority
collects contributions from each member agency based upon each entity's share of the
total recorded incidents in the calendar year preceding the fiscal year. The City's equity
interest of 25% (based on assessments charged for fiscal year 99-00) of the total net
assets of the Metro Cities Fire Authority $1,148,834 is recorded in the General Fixed ,
Assets Account Group. Audited financial statements are available from the City of
Anaheim, which is the fiscal agent for the Metro Cities Fire Authority.
1
60 '
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements
September 30, 2000
18. JOINT VENTURES (CONTINUED):
c. 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.A four-member body consisting
of one councilmember from each city governs PCTA. Each participant's share of the
PCTA is:
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 100.00%
The City's equity interest is recorded in the general fixed assets account group. Separate
' audited financial statements are available from PCTA.
d. West Orange County Water Board (WOCWB):
' 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. A five-member board governs WOCWB. 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
1 assets. Members must either be a member of a City Council or employee of a participant.
The City records all of WOCWB's assets as an asset of the Water Fund and the records
the other members' equity interest as a liability of the Water Fund.WOCWB has no long-
term debt and no plant, property and equipment. Separate audited financial statements
are available from the City of Huntington Beach Administrative Services Department.
Each participant's share of the assets, liabilities and fund equities are:
Agency Percent
' City of Huntington Beach 55.0%
City of Garden Grove 5.3%
City of Seal Beach 14.7%
' City of Westminster 25.0%
Total 100.00%
61
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements t
September 30, 2000
19. OTHER INFORMATION: t
a. Expenditures Exceeding Appropriations: '
Expenditures exceeded appropriations at the departmental level in the funds shown (in ,
thousands):
General Fund: ,
City Administrator $ 34
City Attorney 68
Administrative Services 111 I
Fire 587
Police 198
Library Services 243
Principal 15
Special Revenue Funds: ,
Public Communications:
Capital Outlay 144
Fourth of July Parade: '
Community Services 3
Library Services: ,
Library Services 13
Debt Service Funds:
Redevelopment Agency
Principal 1,353
Reservoir Hill Assessment District
Non-Departmental 6
Principal 150
Civic Improvement Corporation
Interest 14 ,
Public Financing Authority:
Interest 21 '
62 '
See Independent Auditors' Report
' City of Huntington Beach
Notes to Financial Statements
September 30, 2000
' 19. OTHER INFORMATION (CONTINUED):
b. Fund and Accumulated Deficits:
The following funds had total fund deficits at year-end (in thousands):
Special Revenue Funds:
Narcotics Forfeiture $ 139
Capital Projects Funds:
Pier Plaza 444
Internal Service Funds:
Health Insurance Reserve 428
Workers' Compensation Reserve 5,975
These deficits will be eliminated through monitoring of expenditures and increasing
' charges to other funds
' c. Defeasance of Emerald Cove Certificates of Participation:
In August, 2000, the City defeased the 1991 Emerald Cove Certificates of Participation
with a portion of the proceeds of the Huntington Beach Public Financing Authority Lease
Revenue Bonds, 2000 Series A. $739,725 of restricted cash plus $4,572,985 of the
proceeds of the new revenue bonds were deposited into an escrow account consisting of
1 guaranteed securities with yields to fund the remaining $5,105,000 of principal and related
interest on the Emerald Cove certificates.
' The economic gain on the transaction was (in thousands):
Present value of old debt payments $5,544
Present value of new debt payments (5,313)
Economic Gain $231
' The effective interest rate of the borrowing was 5.683%
1
63
See Independent Auditors' Report
City of Huntington Beach
Notes to Financial Statements '
September 30, 2000
19. OTHER INFORMATION (CONTINUED): ,
c. Defeasance of Emerald Cove Certificates of Participation:
A summaryof the cash flows related to the refunding is in thousands):
'
9 ( )
Sources: ,
Total Amount of Lease Revenue Bonds $18,310
Issuance Discounts (240) '
Costs of Issuance (497)
Plus Released Emerald Cove Certificates 739
Total Sources $18,312
Uses:
Deposits to Reserve Account $1,391
Transfer to Escrow for Emerald Cove 5,312 '
Certificates
Deposits to Capital Improvement Fund 11,700
Total Uses $18,312 ,
The total decrease in debt service cash flows relating to the defeasance was $468,000.
d. Tax and Revenue Anticipation Notes:
At year-end the City had $16,400,000 of Tax and Revenue Anticipation Notes outstanding
bearing interest at 4.25% maturing October 4, 2000.
e. Bankruptcy Recovery Proceeds:
During the year, the City received $5,859,000 of proceeds from the final settlement of the I
Orange County Bankruptcy.
f. Restatement of Beginning Balance: '
Retained earnings at October 1, 1999 in the Equipment Replacement Fund (an internal ,
service fund)was reclassified by$1,209,000 to contributed capital to properly reflect the
contributed capital. There was no net effect on total fund equity.
64 '
See Independent Auditors' Report
' SUPPLEMENTARY INFORMATION -
COMBINING FINANCIAL STATEMENTS AND
SCHEDULES OF
INDIVIDUAL FUNDS AND ACCOUNT GROUPS
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The General Fend accounts for activity not required to be accounted for in another
' fund.
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CITY OF HUNTINGTON BEACH ,
GENERALFUND
BALANCE SHEET
SEPTEMBER 30, 2000
WITH COMPARATIVE TOTALS
FOR SEPTEMBER 30, 1999 '
(IN THOUSANDS)
ASSETS : 2000 1999 '
Cash and Investments $ 26,408 10,069
Taxes Receivable 16,376 14,897 ,
Other Receivables 1,398 1,088
Due from Other Funds 1,330 200
Unbilled Receivables 692 660
Inventory 631 476 '
Advances to Other Funds 26,523 25,751
Deposits and Other Assets 42 -
TOTAL ASSETS $ 73,400 $ 52,941
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts Payabte $ 2,213 $ 1,546
Other Accrued Liabilities 2,705 2,820
Deposits 1,621 626
Tax and Revenue Anticipation Notes 16,400 - ,
Interest Payable on Tax and Revenue Anticipation Notes 702 -
Other Deferred Revenue 6,026 5,030
TOTAL LIABILITIES 29,667 10,022
FUND BALANCE: '
Reserved:
Reserved for Inventory 631 476
Reserved for Encumbrances 4,987 2,868
Reserved for Long-Term Receivables from Other Funds 20,497 20,284
Total Reserved Fund Balance 26,115 23,628
Unreserved:
Designated for Economic Uncertainties 9,181 3,000
Designated for Future Expenditures 8,437 6,035
Total Designated Fund Balance 17,618 9,035
Undesignated - 10,256 ,
Total Unreserved Fund Balance 17,618 19,291
TOTAL FUND BALANCE 43,733 42,919
TOTAL LIABILITIES AND FUND BALANCE $ 73,400 $ 52,941
Page 65 ,
' CITYNTIN T OF HU G ON BEACH
GENERALFUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
' BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2000
L WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30, 1999
(IN THOUSANDS)
REVENUES: Budget Actual Variance 1999
Property Taxes $ 30,612 $ 31,914 $ 1,302 $ 29,320
Other Taxes 44,200 49,567 5,367 46,419
Licenses and Permits 6,386 6,615 229 7,050
Fines,Forfeitures and Penalties 3,630 4,018 388 2,744
From Use of Money and Property 7,921 8,433 512 6,379
From Other Agencies 13,060 16,092 3,032 11,780
Charges for Current Service 8,520 9,024 504 9,076
Other 1,184 947 (237) 2,899
' TOTAL REVENUES 115,513 126,610 11,097 115,667
EXPENDITURES:
Current:
I City Council 296 277 19 275
City Administrator 1,289 1,323 (34) 1,114
City Treasurer 1,047 884 163 820
City Attorney 1,704 1,772 (68) 1,720
City Clerk 456 451 5 474
Administrative Services 3,414 3,525 (111) 2,876
Planning 2,503 2,169 334 -
' Building 2,516 2,384 132 -
Community Development 4,067
Fire 16,775 17,362 (587) 15,545
Police 34,966 35,164 (198) 33,728
1 Community Services 9,756 9,106 650 7,628
Library Services 3,075 3,318 (243) 2,957
Public Works 23,239 22,400 839 16,893
Non-Departmental 15,342 14,980 362 12,825
' Capital Outlay 3,036 1,903 1,133 1,303
Debt Service:
Principal - 15 (15) -
Interest 875 830 45 825
TOTAL EXPENDITURES 120,289 117,863 2,426 103,050
EXCESS OF REVENUES OVER (UNDER).EXPENDITURES (4,776) 8,747 13,523 12,617
OTHER FINANCING SOURCES(USES):
Operating Transfers In 2,690 2,752 62 2,038
Proceeds of Bankruptcy Settlements - 966 966 -
' Operating Transfers Out (11,651) (11,651) - (4,541)
TOTAL OTHER FINANCING SOURCES(USES) (8,961) (7,933) 1,028 (2,503)
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (13,737) 814 14,551 10,114
FUND BALANCE-BEGINNING OF YEAR 42,919 42,919 - 32,805
FUND BALANCE-END OF YEAR $ 29,182 $ 43,733 $ 14,551 $ 42,919
Page 66
Special Revenue Funds account for revenues and expenditures legally
restricted to a specific purpose.
1 e 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 underthe
' code.
e The Sewer Fund accounts for fees received from developers to construct and maintain
sewer facilities.
e The Drainage Fund accounts for fees received from developers to construct and
maintain the City's drainage system.
1 e The Public Communications Fund accounts for revenues from cable television
franchises granted within the City's limits spent on community-oriented television.
e The Grants Fund accounts for federal, state and county grants not accounted for in other
funds. The granting agency restricts expenditures to appropriate items.
e The Park Acquisition and Development Fund accounts for fees received from
developers to develop and maintain the City's park system.
' e The Narcotics Forfeiture Fund accounts for moneys received from the State of
California for special law enforcement expenditures.
e The Transportation Fund accounts for moneys received from the countywide Y2 cent
sales tax and other specific sources to be spent on transportation-related expenditures.
e The Air Quality Fund accounts for revenues from the local agencies used to improve
local air quality.
e The Traffic Impact Fee Fund accounts for moneys received from the traffic impact fee
' levied on new developments in the City.
e The Fourth of July Parade Fund accounts for the activities of the City's annual parade.
1 e The Library Services Fund accounts for revenues and expenditures related to the
expanded Central Library including some construction.
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CITY OF HUNTINGTON BEACH '
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30,2000 1
WITH COMPARATIVE TOTALS
FOR SEPTEMBER 30, 1999
(IN THOUSANDS)
ASSETS: Gas Tax Sewer Drainage Public Communications
Cash and Investments $ 2,742 $ 1,069 $ 540 $ 49 ,
Taxes Receivable 1,719 - - -
Other Receivables 48 601 2 95
Advances to Other Funds 1,160 297 563 -
Deposits and Other Assets - - - -
___ Due From Other Funds - - - - ,
TOTAL ASSETS $ 5,669 $ 1,967 $ 1,105 $ 144
LIABILITIES AND FUND BALANCE
LIABILITIES: '
Accounts Payable $ 47 $ 10 $ 77 $ 7
Other Accrued Liabilities 6 3 2 31
Deposits - - -
Due to Other Funds - - -
Deferred Revenue 660 167 313 - '
TOTAL LIABILITIES 713 180 392 38
FUND BALANCE:
Reserved Balance:
Encumbrances 205 103 22 8 ,
Long-Term Receivables from Other Funds 500 130 250 -
_ Total Reserved Fund Balance 705 233 272 8
Unreserved Balance:
Designated for Future Expenditures - 1,554 441 98 ,
Undesignated 4,251 - - -
Total Unreserved Fund Balance 4,251 1,554 441 98
TOTAL FUND BALANCE 4,956 1,787 713 106
r TOTAL LIABILITIES AND FUND BALANCE E 5,669 $ 1,967 $ 1,105 $ 144 '
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Page 67 '
Fourth of
Park Acquisition Narcotics Traffic July Library
Grants and Development Forfeiture Transportation Air Quality Impact Fee Parade Services Totals 2000 Totals 1999
$ 3,842 $ 1,213 $ - $ 2,760 $ 929 $ 1,489 $ 53 $ 817 $ 15,503 $ 14,509
1,719 326
9,542 96 5 235 17 30 1 2 10,674 4,768
- 4,361 - - - 6,381 6,045
2,348 - - - 2,348 2,851
- 377
S 13,384 $ 8,018 $ S $ 2,995 $ 946 $ 1,519 $ 54 $ 819 S 36,625 $ 28,876
$ 769 $ $ 47 $ 143 $ 1 $ 21 $ 1 $ 4 $ 1,127 $ 801
52 - 9 1 - 12 116 71
63 - - - 63
' 94 94 378
3,266 8,709 - - - - 11,117 10,84848
4,152 6,709 141 162 2 21 1 16 12,617 12,098
' 2,974 85 3 194 516 5 - 9 4,124 3,149
880 881
2,974 85 3 194 516 5 9 5,004 4,030
889 - 2,571 265 245 - - 6,063 3,935
6,258 335 (139) 78 163 1,248 53 794 13,041 8,813
6,258 1,224 (139) 2,649 428 1,493 53 794 19,104 12,748
9,232 1,309 (136) 2,843 944 1,498 53 803 24,108 16,778
' E 13,384 $ 8,018 $ 5 S 2,995 E 946 S 1,519 S 54 E 819 S 36,625 $ 28,876
Page 68
CITY OF HUNTINGTON BEACH '
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES '
FOR THE YEAR ENDED SEPTEMBER 30,2000
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30,1999
(IN THOUSANDS) ,
REVENUES: Gas Tax Sewer Drainage Public Communications
Other Taxes $ $ - $ - $
Licenses and Permits 84 429 From Use of Money and Property 127 75 93 -
From Other Agencies 4,714 540 13 490
Charges for Current Service - - - -
Other 3 3 - '
-- TOTAL REVENUES 4,841 702 538 490
EXPENDITURES:
Current:
City Administrator - - - 437 '
Fire -
Police
Economic Development
Community Services
Library Services - - - '
Public Works 482 309 198 -
Capital Outlay 349 111 2 216
Debt Service:
Principal - - 30 '
Interest - - - 9
TOTAL EXPENDITURES 831 420 200 692
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 4,010 282 338 (202)
OTHER FINANCING SOURCES(USES):
Operating Transfers In - - - - '
Proceeds of Long-Term Debt - - - 185
Proceeds of Bankruptcy Settlements 219 411 203 -
Operating Transfers Out (1,300) (900) (1,923)
TOTAL OTHER FINANCING SOURCES(USES) (1,081) (489) (1,720) 185 '
USES 2,929 (207) (1,382) (17)
FUND BALANCE-BEGINNING OF YEAR 2,027 1,994 2,095 123
FUND BALANCE-END OF YEAR $ 4,956 $ 1,787 $ 713 $ 106
Page 69 ,
Fourth of
Park Acquisition Narcotics Traffic July Library
Grants and Development Forfeiture Transportation Air Quality Impact Fee Parade Services Totals 2000 Totals 1999
' $ $ - $ $ 1,805 $ $ - $ $ $ 1,805 $ 1,571
288 26 612 1,439 3,178
600 99 221 51 97 2 291 1,656 682
6,931 68 177 171 215 - - - 13,319 11,676
- - - - - 633 633 479
4,119 - - 1 - 283 273 8 4,690 1,296
11,650 455 177 2,224 266 992 276 932 23,542 18,882
' - - - - 3 - 4 455
54 - 54 54 94
668 308 976 615
4,887 - - 4,887 2,174
- 240 255 495 716
34 - - - 233 267 286
494 1,075 71 2,629 1,372
4,003 619 2,518 19 838 8,675 8,060
55 - - - - 85 -
25 34
10,220 859 308 3,593 58 909 255 233 18,578 13,772
1,430 (404) (131) (1,369) 208 83 20 699 4,964 5,110
4,598 194 - - 290 5,082 1,122
2,570 2,755
- 22 299 31 31 1,216
(2,085) (68) (100) (311) (6,687) (2,242)
5,083 148 199 31 - 10 2,366 (1,120)
6,513 (256) (131) (1,170) 208 114 20 709 7,330 3,990
2,719 1,565 (5) 4,013 736 1,384 33 94 16,778 12,788
_$_ 9,232 $ 1,309 E (136) E 2,843 $ 944 $ 1,498 $ 53 E 803 E 24,108 E 16,778
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' Pape 70
CITY OF HUNTINGTON BEACH '
SPECIAL REVENUE FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2000 '
(In Thousands)
GAS TAX '
REVENUES: Budget Actual Variance
From Use of Money and Property $ 35 $ 127 $ 92 '
From Other Agencies 3,810 4,714 904
TOTAL REVENUES 3,845 4,841 996
EXPENDITURES: '
Current:
Public Works 743 482 261
Capital Outlay 2,260 349 1,911
TOTAL EXPENDITURES 3,003 831 2,172
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES 842 4,010 3,168
OTHER FINANCING SOURCES(USES): ,
Proceeds of Bankruptcy Settlements - 219 219
Operating Transfers Out (1,300) (1,300) -
TOTAL OTHER FINANCING SOURCES(USES) (1,300) (1,081) 219
EXCESS OF REVENUES AND OTHER SOURCES ,
OVER(UNDER) EXPENDITURES AND OTHER USES (458) 2,929 3,387
FUND BALANCE-BEGINNING OF YEAR 2,027 2,027 -
FUND BALANCE-END OF YEAR $ 1,569 $ 4,956 $ 3,387 ,
SEWER
REVENUES: Budget Actual Variance '
Licenses and Permits $ 50 $ 84 $ 34
From Use of Money and Property 20 75 55 '
From Other Agencies - 540 540
Other - 3 3
TOTAL REVENUES 70 702 632 '
EXPENDITURES:
Current:
Public Works 628 309 319
Capital Outlay 1,469 111 1,358 '
TOTAL EXPENDITURES 2,097 420 1,677
EXCESS OF REVENUES(UNDER) EXPENDITURES (2,027) 282 2,309
OTHER FINANCING USES: ,
Proceeds of Bankruptcy Settlements - 411 411
Operating Transfers Out (900) (900) -
TOTAL OTHER FINANCING SOURCES(USES) (900) (489) 411
EXCESS OF REVENUES AND OTHER SOURCES '
OVER(UNDER)EXPENDITURES AND OTHER USES (2,927) (207) 2,720
FUND BALANCE-BEGINNING OF YEAR 1,994 1,994 -
FUND BALANCE-END OF YEAR $ (933) $ 1,787 $ 2,720 '
Page 71 '