HomeMy WebLinkAbout2000/2001 Comprehensive Annual Financial Report - CAFR - wit - IN
(City Council/Redevelopment Agency) Study Session —Presentation by the
Administrative Services Director and Consultant Diehl Evans & Company. LLP to
Review Comprehensive Annual Financial Audit (300.20)
The Director of Administrative Services and representatives from Diehl Evans & Company, LLP
will provide a summary report on the city's annual financial audit.
**The following 3 communications are included in the agenda packet:
1) Letter from Diehl Evans & Company, LLP dated March 6, 2002;
2) Inter-Departmental Communication dated May 1, 2002 from the Administrative Services
Director Re: Staff Responses to Management Letter from Diehl, Evans and Company,
3) PowerPoint Presentation titled City of Huntington Beach Comprehensive Annual Financial
Report For the Year Ended September 30, 2001.
**A Report dated September 30, 2001 and titled Comprehensive Annual Financial Report—
0�4t--02 With Report on Audit by Independent Certified Public Accountants is available for public review
tDV�AU in the City Clerk's Office.
Administrative Services Director Clay Martin, Finance Director
Dan Villella, Principal Accountant Robert Sedlak and Diehl Evans CPA/
Partner Bob Callahan reported.
-� Staff directed to reconcile issues re: trash fee, full cost recovery and
Emerald Cove.
—�J COMPUTER INTERNET ACCESS TO CITY COUNCIL/REDEVELOPMENT AGENCY
AGENDAS IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS
http.lAvww.ci.huntington-beach.ca.us
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Huntington Beach in the year represented by this Comprehensive Annual
Financial Report established a 0% rate for the voter approved supplemental
property tax allocated toward the City's employee retirement obligations. This
created a decline in revenue of approximately $9 million. The City's 2001/2002
fiscal year budget was reduced by over $8 million in response to this and in
anticipation to the general economy's impact of City revenue.
Financial Background
The City prepares financial statements on the modified accrual basis for all
governmental funds and on the accrual basis for the proprietary fund types (see
Note 1 to the financial statements). Generally, both methods recognize revenue
when it is earned and expenditures when they are incurred. Governmental
Funds record the financial activity of general governmental activities generally
financed through taxes and inter-governmental grants. The City's General Fund
is a governmental fund. Proprietary Funds record activities that are similar to
activities in the private sector. The City's enterprise funds are examples of
proprietary funds.
The City Council adopts the annual budget and may amend or revise it at any
time at a properly noticed meeting. Budgetary control is at the department level
within each fund. A Department Head, with the Finance Officer's approval, may
transfer funds within like categories of the same department. The City
Administrator must approve changes to capital outlay requests. The City
utilizes an encumbrance system as a management control technique.
Encumbrances are holds placed on funds for orders or contracts for goods or
services anticipated but not completed or received. The City reports these as
reservations of fund balance in governmental funds.
The City's financial activity is recorded in different funds and account groups
depending on the type of financial activity. The following are the types of funds
used to manage the City's financial activity:
Governmental Funds
General Fund
Special Revenue Funds
Debt Service Funds
Capital Projects Funds
Proprietary Funds
Enterprise Funds
Internal Service Funds
Trust & Agency Funds
CAFR Transmittal Letter VIII 4/1/2002 1:02 PM
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In addition, information is provided for the following:
Pension Obligations
Long-Term Debt
Cash Management
Risk Management
Below is significant summary information about the City's financial condition as
of September 30, 2001:
Governmental Funds
These funds record the financial activity of general governmental activities
generally financed through taxes and inter-governmental grants. The
governmental funds the City uses are:
• General Fund — Accounts for all financial activity not required to be
accounted for in another fund.
• Special Revenue Funds — Accounts for the receipt and expenditure of
monies legally restricted to a specific use.
• Debt Service Funds — Accounts for the receipt and disbursement of
monies used for the payment of general and redevelopment long-term
principal and interest.
• Capital Projects Funds — Accounts for monies used for the acquisition
and construction of major capital facilities.
CAFR Transmittal Letter jX 4/1/2002 1:02 PM
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General Fund Revenue: Below is a table analyzing major changes (greater than
5% and $500,000) by revenue source:
SourceIncrease Percent
Revenue 111 11 of D-
thousands) • • from • • • 1 1 -
Property Taxes $ 30,738 11 23.9% 8 1,176 3.7%)
Other Taxes 56,705 1 44.2 7,138 14.4
Licenses and Permits 5,896 4.6 (719) (10.9
Fines and Forfeitures 4,092 3.2 74 1.8
From Use of Money
and Property 7,333 5.7 ! (1,100) (13.0)
From Other Agencies 13,571 j 10.6 (2,521) j (13.7
Charges for Current
Service 9,654 7.5 630 6.8
Other 361 0.3 (586) (61.9
Total $ 128,067 100% $ 1,740 1.4
The decrease in Property Taxes was due to the impounding of supplemental
property tax revenue that had been allocated toward the City's employee
retirement obligations. The increase in Other Taxes was due to increased
energy rates, which created a corresponding increase in Utility Users Tax
revenue. The Licenses and Permits decrease was due to decreased residential
construction activity. Revenue from Use of Money and Property decreased due
to closed concessions from construction activity on the beach. Revenue from
Other Agencies decreased due to one-time reimbursements from the State of
California, which were realized in the 1999/2000 fiscal year. Charges for Current
Service increased due to increased recreation programming. Total General
Fund revenue, including one-time revenue increased $1,740,000 or 1.4% overall.
CAFR Transmittal Letter X 4/1/2002 1:02 PM
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General Fund Expenditures: Total General Fund expenditures increased
$4,276,000 or 3.6% overall. Below is a table analyzing major changes (greater
than 5% and $500,000) by department:
F _ Increase Percent
Expenditures 2000/2001 - D-
crease) Increase
($ in thousands) Amount Total from . . . ee (Decrease
Council j $ 231 0.2% $ 46 19.9%
City Administrator 1,456 j 1.2 133 9.1 j
City Treasurer 916 0.7 32 1 3.5
City Attorney 2,458 2.0 686 27.9
City Clerk 559 0.5 108 I 19.3
Administrative Services 3,874 3.2 349 9.0
Planning 2,201 1.8 + 32 N/A
Building 2,589 2.1 205 N/A
Fire 18,085 14.8 723 I 4.0
Information Systems 2,814 2.3 i 2,814 N/A
Police 37,812 31.0 2,648 7.0
Community Services 9,906 j 8.1 800 8.1
Library Services 3,641 3.0 j 323 8.9
Public Works 20,973 17.2 1,427 6.8
Non-Departmental 12,724 10.4 ' 2,256 17.7
Capital Outla j 1,900 1.6 3 2.1
Debt Service - 0.0 845 N/A
TOTAL $ 122,139 100% $ 4,276 j 3.6%
Police Department expenditures increased largely due to salary increases that
went into effect during the 2000/2001 fiscal year. Non-Departmental
expenditures decreased and Information Systems expenditures increased
because Information Systems expenditures were included in the Non-
Departmental budget prior to the 2000/2001 fiscal year. Public Works
expenditures decreased primarily due to beach closure expenditures that
occurred primarily in fiscal year 1999/2000. City Attorney expenditures
increased due to the cost of outside legal firms. Community Services
expenditures increased due to increased special event activity and contract
classes that were offset by additional revenue.
CAFR Transmittal Letter Xi 4/1/2002 1:02 PM
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General 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, and land held for resale. Examples of
Unreserved/Designated fund equity include amounts designated for future
expenditures and the reserve for economic uncertainties. The reserve for
economic uncertainties is the 7% General Fund Reserve established by the
City's financial policies. 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
Reserved $ 26,115 6 23,677 9%
Unreserved/Designated 17,618 111,129 (37%) j
Unreserved/Undesi nated - 623 N/A
TOTAL $ 43,733 $ 35,429 j (19%)
Proprietary Funds
Proprietary Funds record activities that are similar to activities in the private
sector. The proprietary funds the City uses are:
• Enterprise Funds - Accounts 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.
Enterprise funds are supported by revenue generated from user
charges to the general public.
• Internal Service Funds - Accounts for goods and services provided one
department of the City to another on a cost-reimbursement basis.
Internal Service Funds are supported by user charges to different
departments of the City.
CAFR Transmittal Letter XII 4/1/2002 1:02 PM
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
17.COMMITMENTS AND CONTINGENCIES (CONTINUED):
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.
h. 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 four joint ventures. Three are reported as investment in joint ventures
in the general fixed asset account group in the accompanying financial statements. One is
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 $ 141
Metro Cities Fire Authority 109
Public Cable Television Authority 78
Total General Fixed Asset Account Group: 328
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 201
Total Joint Venture Amounts-Proprietary Funds 201
Total Joint Venture Amounts $ 529
See Independent Auditors' Report 60
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
18. JOINT VENTURES (CONTINUED):
a. Central Net Operations Authority:
In July, 1992 the Cities of Huntington Beach, Fountain Valley, Newport Beach,
Westminster and the County of Orange formed the Central Net Operations Authority
(Central Net)as a training and dispatch joint-powers entity.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).
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:
Age nc 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.
See Independent Auditors' Report 61
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
18. JOINT VENTURES (CONTINUED):
b. Metro Cities Fire Authority:
In July, 1996 the Metro Cities Fire Authority (the Fire Authority) was created by a joint-
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, rescue service,
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 00-01) 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.
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:
A.gengy 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.
See Independent Auditors' Report 62
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
18. JOINT VENTURES (CONTINUED):
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
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 100.000A
See Independent Auditors' Report 63
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
19. OTHER INFORMATION:
a. Expenditures Exceeding Appropriations:
Expenditures exceeded appropriations at the departmental level in the funds shown (in
thousands):
General Fund:
Non-Departmental $ 1,216
Special Revenue Funds:
Public Communications
Principal 60
Debt Service Funds:
Reservoir Hill Assessment District
Principal 145
Interest 4
Redevelopment Agency
Principal 8,495
Interest 700
Public Financing Authority
Interest 165
Civic Improvement Corporation
Interest 13
b. Fund and Accumulated Deficits:
The following funds had total fund deficits at year-end (in thousands):
Governmental Funds
Special Revenue Funds:
Narcotics Forfeiture $ (258)
Capital Projects Funds:
Pier Plaza (659)
Proprietary Funds
Enterprise Funds:
Refuse Collection (369)
Internal Service Funds:
Workers'Compensation Reserve (5,973)
These deficits will be eliminated through monitoring of expenditures and increasing
charges to other funds.
See Independent Auditors' Report 64
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
19. OTHER INFORMATION (CONTINUED):
c. Restatement of Beginning Fund Balances:
The City did not have certain plant, property, and equipment correctly recorded at
September 30, 2000. The City also did not properly accrue property tax revenue and
expenses at September 30, 2000. Below is a restatement of beginning balances to
properly reflect the beginning balance of certain amounts in the accompanying financial
statements (in thousands):
Fund/Retained Fund/Retained
Earnings Earnings Balance
Balance, October 1, 2000 -
October 1, 2000 Restatement as Restah d
FUND BALANCE:
General Fund $ 43,733 $ (3,050) $ 40,683
Debt Service Funds:
Redevelopment Agency 11,880 (439) 11,441
Reservoir Hill Assessment District 334 (6) 328
Capital Projects Funds:
Low-Income Housing 7,147 (110) 7,037
RETAINED EARNINGS:
Enterprise Funds:
Water Utility 38,592 (458) 38,134
Emergency Fire Medical 1,536 120 1,656
Internal Service Funds:
Equipment Replacement 13,730 685 14,415
See Independent Auditors' Report 65
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
19 . OTHER INFORMATION (CONTINUED):
d. Subsequent Event—Issuance of$31,095,000 of Lease Revenue Bonds:
In November, 2001,the City defeased Huntington Beach Civic Improvement Corporation
Refunding Certificates of Participation (Civic Center), and Huntington Beach Civic
Improvement Corporation Refunding Certificates of Participation (Police Administration
Project). Below is a schedule of the required information for this defeasance (in
thousands):
Sources:
Total of Lease Revenue Bonds $31,095
Premium on Bonds 334
Cash Available from Existing Civic Improvement Corporation Certificates 2,835
of Participation
Total Sources $34,264
Uses:
Deposit to Refunding Escrow $31,071
Deposit to Debt Service Reserve 2,620
Costs of Issuance 196
Underwriter Discount 157
Bond Insurance Premium 220
Total Uses $34,264
The net present value benefit due to this refunding was $1,761,908 and the effective
interest rate on the new borrowing was 4.145%. The total decrease in cash flows related to
this refunding was $3,165,000
e. Issuance of$2,155,000 of Community Facilities District No. 1990-12001 Special Tax
Refunding Bonds:
In October, 2001 the Community Facilities District 1990-1 issued $2,155,000 of Special
Tax Refunding bonds which defeased the Community Facilities District 1990-1 bonds.
The defeased bonds were not recorded as a debt in the accompanying financial
statements (see note 2).
See Independent Auditors' Report 66
City of Huntington- Beach
Notes to Financial Statements
September 30, 2001
19. OTHER INFORMATION (CONTINUED):
f. Establishment of the City of Huntington Beach Community Facilities District 2000-
01 and Issuance of$16,000,000 of 2001 Special Tax Bonds:
In December, 2002 the Community Facilities District 2000-01 issued $16,000,000 of
Special Tax Bonds for capital improvements relating to the Grand Coast Resort. This debt
will not be recorded as a debt in the City's financial statements because the City is not
liable in any way for the debt if the taxes received are not sufficient to make the required
debt service payment.
Year of Issuance 2001
-Type of Debt Special Tax Bonds '
-Original Principal Amount $16,000,000
Security Special Tax Levies
Interest Rates 3.80% to 6.40%
Interest Payment Dates September 15 and March 1S
.Principal Payment Dates September 1st
Purpose of Debt Public Improvements for Grand
Coast Resort
See Independent Auditors' Report 67
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The General Fund accounts for activity not required to be accounted for in another
fund.
CITY OF HUNTINGTON BEACH
GENERALFUND
BALANCE SHEET
SEPTEMBER 30,-2001
WITH COMPARATIVE TOTALS
FOR SEPTEMBER 30, 2000
(IN THOUSANDS)
ASSETS: 2001 2000
Cash and Investments 3,186 26,408
Taxes Receivable 15,344 16,376
Other Receivables 1,571 1,398
Due from Other Funds 3,299 1,330
Unbilled Receivables 767 692
Inventory 760 631
Advances to Other Funds 27,112 26,523
Deposits and Other Assets 138 42
TOTAL ASSETS $ 52,177 $ 73,400
LIABILITIES AND FUND BALANCES
LIABILITIES:
Accounts Payable $ 3,084 $ 2,213
Other Accrued Liabilities 3,349 2,705
Deposits 972 1,621
Tax and Revenue Anticipation Notes - 16,400
Interest Payable on Tax and Revenue Anticipation Notes - 702
Deferred Property Taxes 2,711 -
Other Deferred Revenue 6,643 6,026
TOTAL LIABILITIES 16,769 29,667
FUND BALANCE:
Reserved:
Reserved for Inventory 760 631
Reserved for Encumbrances 2,448 4,987
Reserved for Long-Terre Receivables from Other Funds 20,469 20,497
Total Reserved Fund Balance 23,677 26,115
Unreserved:
Designated for Economic Uncertainties 9,354 9,181
Designated for Future Expenditures 1,775 8,437
Total Designated Fund Balance 11,129 17,618
Undesignated 612 -
Total Unreserved Fund Balance 11,741 17,618
TOTAL FUND BALANCE 35,418 43,733
TOTAL LIABILITIES AND FUND BALANCE $ 52,177 $ 73,400
se
CITY OF HUNTINGTON BEACH
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2000
(IN THOUSANDS)
REVENUES: Budget Actual Variance 2000
Property Taxes $ 34,044 $ 30,738 $ (3,306) $ 31,914
Other Taxes 52,071 56,705 4,634 49,567
Licenses and Permits 6,332 5,896 (436) 6,615
Fines,Forfeitures and Penalties 3,730 4,092 362 4,018
From Use of Money and Property 14,147 7,333 (6,814) 8,433
From Other Agencies 11,726 13,571 1,845 16,092
Charges for Current Service 8,972 9,654 682 9,024
Other 440 361 (79) 1,913
TOTAL REVENUES 131,462 128,350 (3,112) 127,576
EXPENDITURES:
Current •..
City Council 259 231 28 277
City Administrator 1,624 1,456 168 1,323
City Treasurer 1,048 916 132 884
City Attorney 2,518 2,458 60 1,772
City Clerk 628 559 69 451
Administrative Services 4,018 3,874 144 3,525
Planning 3,395 2,201 1,194 2,169
Building 2,718 2,589 129 2,384
Fire 18,454 18,085 369 17,362
Information Systems 3,197 2,814 383 -
Police 37,856 37,812 44 35,164
Community Services 10,025 9,906 119 9,106
Library Services 3,772 3,641 131 3,318
Public Works 22,944 20,973 1,971 22,400
Non-Departmental 11,508 12,724 (1,216) 14,980
Capital Outlay 4,296 1,900 2.396 1,903
Debt Service:
Principal - - - 15
Interest 874 - 874 830
TOTAL EXPENDITURES 129,134 122,139 6,995 117.863
EXCESS OF REVENUES OVER EXPENDITURES 2,328 6,211 3,883 9,713
OTHER FINANCING SOURCES(USES):
Operating Transfers In 2,857 2,587 (270) 2,752
Operating Transfers Out (10,491) (14,063) (3,572) (11.651)
TOTAL OTHER FINANCING SOURCES(USES) (7,634) (11,476) (3,842) (8,899)
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (5,306) (5,265) 41 814
FUND BALANCE-BEGINNING OF YEAR 43,733 43,733 - 42,919
Prior Period Adjustments (3,050) (3,050) - -
FUND BALANCE AS RESTATED 40,683 40,683 - 42,919
FUND BALANCE-END OF YEAR $ 35,377 $ 35,418 $ 41 $ 43,733
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Special Revenue Funds account for revenues and expenditures legally
restricted to a specific purpose.
• The Gas Tax Fund accounts for moneys allocated under the Streets and Highways Code
of California. Expenditures may be made for any street-related purpose allowed under the
code.
• The Sewer Fund accounts for fees received from developers to construct and maintain
sewer facilities.
• The Drainage Fund accounts for fees received from developers to construct and
maintain the City's drainage system.
• The Public Communications Fund accounts for revenues from cable television
franchises granted within the City's limits spent on community-oriented television.
• The Grants Fund accounts for federal, state and county grants not accounted for in other
funds. The granting agency restricts expenditures to appropriate items. -
• The Park Acquisition and Development Fund accounts for fees received from
developers to develop and maintain the City's park system.
• The Narcotics Forfeiture Fund accounts for moneys received from the State of
California for special law enforcement expenditures.
• The Transportation Fund accounts for moneys received from the countywide % cent
sales tax and other specific sources to be spent on transportation-related expenditures.
• The Air Quality Fund accounts for revenues from the local agencies used to improve
local air quality.
• The Traffic Impact Fee Fund accounts for moneys received from the traffic impact fee
levied on new developments in the City.
• The Fourth of July Parade Fund accounts for the activities of the City's annual parade.
• The Library Services Fund accounts for revenues and expenditures related to the
expanded Central Library including some construction.
CITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS
FOR SEPTEMBER 30,2000
(IN THOUSANDS)
Public
ASSETS: Gas Tax Sewer Drainage Communications
Cash and Investments E 3,181 $ 1,680 $ 428 $ 132
Taxes Receivable 409 - -
Other Receivables 54 19 7 112
Advances to Other Funds 1,227 314 595 -
Deposits and Other Assets
TOTAL ASSETS $ 4,871 $ 2,013 $ 1,030 $ 244
LIABILITIES AND FUND BALANCE
LIABILITIES:
Accounts Payable $ 192 $ 262 $ 60 $ 5
Other Accrued Liabilities 7 4 1 13
Deposits - - -
Due to Other Funds - -
18 -
Deferred Revenue 726 4 345
TOTAL LIABILITIES 925 450 406 18
FUND BALANCE:
Reserved Balance:
Encumbrances 492 1,433 374 5
Long-Term Receivables from Other Funds 500 130 250
Total Reserved Fund Balance 992 1,563 624 5
Unreserved Balance:
Designated for Future Expenditures 2,358 - 18
Undesignated 596 203
Total Unreserved Fund Balance 2,954 - - 221
TOTAL FUND BALANCE 3,946 1,663 624 226
TOTAL LIABILITIES AND FUND BALANCE $ 4,871 S 2,013 i 1,030 $ 244
70
Fourth of
Park Acquisition Narcotics Traffic July Library
Grants and Development Forfeiture Transportation Air Ouallty Impact Fee Parade Services Totals 2001 Totals 2000
$ 5,827 $ 2,092 $ - $ 3,952 $ 607 $ 5,875 $ 45 $ 1,388 $ 25,207 $ 15,503
- - - - 409 1,719
7,481 33 - 59 11 74 1 19 7,870 10,674
- 4,600 - - - - - - 6,736 6,381
- 2,172 - 2,172 2,348
$ 13,308 S 8,897 S S 4,011 S 618 S 5,949 $ 46 S 1,407 S 42,394 S 36,625
$ 1,710 $ 238 $ 52 $ 24 $ 16 $ 8 $ 4 $ 3 $ 2,574 $ 1,127
55 - - 21 1 - - 2 104 118
- - - - - - - - - 63
- 206 - - - - - 206 94
3,300 6,773 11,328 11,117
5,065 7,011 258 45 17 8 4 5 14,212 12,517
2,468 543 - 164 8 107 14 6 5,604 4,124
880 880
2,468 543 154 8 107 14 6 6,484 5,004
5,775 1,102 - 1,868 302 - 28 425 11,876 6,063
241 (258) 1,944 291 5,834 971 9,822 13,041
5,775 1,343 (258) 3,812 593 5,834 28 1,396 21,698 19,104
8,243 1,886 (258) 3,966 601 5,941 42 1,402 28,182 24,108
S 13,308 $ 8,897 S - $ 4,011 S 618 $ 5,949 $ 46 i 1,407 $ 42,394 $ 36,625
71
CITY OF HUNTINGTON BEACH
SPECIAL REVENUE FUNDS
COMBINING STATEMENT OF REVENUES,EXPENDITURES
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30,2000
(IN THOUSANDS)
Nubile
REVENUES: Gas Tax Sewer Drainage Communlcations
Other Taxes $ - $ - $ - $ 584
Licenses and Permits - -
From Use of Money and Property 170 84 41 6
From Other Agencies 4,212 411 378 -
Charges for Current Service - 69 - -
Other 4 -
TOTAL REVENUES 4,386 564 419 570
EXPENDITURES:
Current
City Administrator - - 320
Planning -
Fire - -
Police -
Economic Development - -
Community Services - -
Library Services -
Public Works 527 175 73
Non-Departmental - - -
Capital Outlay 3,060 613 435 -
Debt Service:
Principal - - - 60
Interest - 9
TOTAL EXPENDITURES 3,587 788 508 389
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 799 (224) (89) 181
OTHER FINANCING SOURCES(USES):
Operating Transfers In - - - -
Proceeds of Long-Term Debt - - - 28
Operating Transfers Out (1,809) (89)
TOTAL OTHER FINANCING SOURCES(USES) (1,809) (61)
USES (1,010) (224) (89) 120
FUND BALANCE-BEGINNING OF YEAR 4,956 1,787 713 106
FUND BALANCE-END OF YEAR = 3,946 $ 1,563 $ 624 $ 226
72
Fourth o/
Park Acquisition Narcotics Traffic July Library
Grants and Development Forfeiture Transportation Air Quality Impact Fee Parade Services Totals 2001 Totals 2000
a - a - $ - a 2,159 a - i - $ - $ - $ 2.723 $ 1,805
910 - - - - - 5 915 1,439
808 153 - 292 53 260 3 359 2,229 1,656
8,445 304 143 632 221 761 - 330 15,837 13,319
- - - - - - 361 430 633
64 176 205 1 450 5,906
9,317 1,543 143 3,083 274 1,021 208 1,056 22,584 24,758
- - _ 320 476
128 - - - - - - - 128 -
57 - - - - - - - 57 54
1,004 - 265 - - - - - 1,269 976
898 - - - - - - - 898 4,887
126 1,028 - - - - 219 - 1,373 495
82 - - - - - 185 267 267
1,072 - - 706 84 73 - - 2,710 2,629
223 - - - - 223
8,504 232 - 1,218 464 55 - - 14,581 8,675
70 - - - - - - - 130 85
95 104 34
12,259 1,260 265 1,924 548 128 219 185 22,060 18,578
(2,942) 283 (122) 1,159 (274) 893 (11) 871 524 6,180 '
r
1,953 294 - 509 - 3,550 - - 6,306 5,082
- - - - - - - - 28 2,755
(545) (69) (272) (2,784) (6,687)
1,953 294 (36) (69) 3,550 (272) 3,550 1,150
(989) 577 (122) 1,123 (343) 4,443 (11) 599 4,074 7,330
9,232 1,309 (136) 2,843 9" 1,498 53 803 24,108 16,778
i 8,243 S 1,886 S (268) $ 3,966 i 601 S 5,941 i 42 S 1,402 i 28,182 i 24,108
73
CITY OF HUNTINGTON BEAC
SPECIAL REVENUE FUNDS
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2001
(in Thousands)
GAS TAX
REVENUES: Budget Actual Variance
From Use of Money and Property $ 690 $ 170 $ (520)
From Other Agencies 4,951 4,212 (739)
Other - 4 4
TOTAL REVENUES 5,641 4,386 (1,255)
EXPENDITURES:
Current:
Public Works 2,846 527 2,319
Capital Outlay 5,125 3,060 2,065
TOTAL EXPENDITURES 7,971 3,587 4,384
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (2,330) 799 3,129 f
OTHER FINANCING SOURCES(USES):
Operating Transfers Out (1,809) (1,809) -
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES (4,139) (1,010) 3,129
FUND BALANCE-BEGINNING OF YEAR 4,956 4,956 -
FUND BALANCE-END OF YEAR $ 817 $ 3,946 $ 3,129
SEWER
REVENUES: Budget Actual Variance
From Use of Money and Property $ 113 $ 84 $ (29)
From Other Agencies 900 411 (489)
Charges for Current Service 10 69 59
TOTAL REVENUES 1,023 564 (459)
EXPENDITURES:
Current:
Public Works 539 175 364
Capital Outlay 2,715 613 2,102
TOTAL EXPENDITURES 3,254 788 2,466
EXCESS OF REVENUES(UNDER)EXPENDITURES (2,231) (224) 2,007
FUND BALANCE-BEGINNING OF YEAR 1,787 1,787 -
FUND BALANCE-END OF YEAR $ (4") $ 1,563 $ 2,007
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, 2001
(In Thousands)
(Continued)
DRAINAGE
REVENUES: Budget Actual Variance
From Use of Money and Property $ 298 $ 41 $ (257)
From Other Agencies 102 378 276
TOTAL REVENUES 400 419 19
EXPENDITURES:
Current:
Public Works 266 73 193
Capital Outlay 1,762 435 1,327
TOTAL EXPENDITURES 2,028 508 1,520
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (1,628) (89) 1,539
FUND BALANCE-BEGINNING OF YEAR 713 .713 -
FUND BALANCE-END OF YEAR $ (915) $ 624 $ 1,539
PUBLIC COMMUNICATIONS
REVENUES: Budget Actual Variance ,
Other Taxes $ 440 $ 564 $ 124
From Use of Money and Property - 6 6
From Other Agencies 40 - (40)
TOTAL REVENUES 480 570 90
EXPENDITURES:
Current:
City Administrator 381 320 61
Capital Outlay 89 - 89
Debt Service
Principal - 60 (60)
Interest 85 9 76
TOTAL EXPENDITURES 555 389 166
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (75) 181 256
OTHER FINANCING USES
Proceeds of Long-Term Debt - 28 28
Operating Transfers Out (89) (89) -
TOTAL OTHER FINANCING SOURCES (89) (61) 28
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES (164) 120 284
FUND BALANCE-BEGINNING OF YEAR 106 106 -
FUND BALANCE-END OF YEAR $ (58) $ 226 $ 284
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, 2001
(In Thousands)
(Continued)
GRANTS
REVENUES: Budget Actual Variance
From Use of Money and Property $ 13,904 $ 808 $ (13,096)
From Other Agencies 10,444 8,445 (1,999)
Other - 64 64
TOTAL REVENUES 24,348 9,317 (15,031)
EXPENDITURES:
Current:
Planning 139 128 11.
Fire 62 57 51,
Police 1,353 1,004 349
Economic Development 1,078 898 180 ='
Community Services 128 126 2
Library Services 95 82 13
Public Works 3,213 1,072 2,141
Non-Departmental 262 223 39
Capital Outlay 18,788 8,504 10,284
Debt Service: -
Principal 70 70 -
Interest 95 95 -
TOTAL EXPENDITURES 25,283 12,259 13,024
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (935) (2,942) (2,007)
OTHER FINANCING SOURCES:
Operating Transfers In 701 1,953 1,252
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES (234) (989) (755)
FUND BALANCE-BEGINNING OF YEAR 9,232 9,232 -
FUND BALANCE(DEFICIT)-END OF YEAR $8,998 $8,243 ($755)
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, 2001
(In Thousands)
(Continued)
PARK ACQUISITION AND DEVELOPMENT
REVENUES: Budget Actual Variance
Licenses and Permits $ 250 $ 910 $ 660
From Use of Money and Property 888 153 (735)
From Other Agencies 168 304 136
Other - 176 176
TOTAL REVENUES 1,306 1,543 237
EXPENDITURES:
Current:
Community Services 1,694 1,028 666
Capital Outlay 982 232 750
TOTAL EXPENDITURES 2,676 1,260 1,416 '
EXCESS OF REVENUES (UNDER)EXPENDITURES (1,370) 283 1,653
OTHER FINANCING SOURCES:
Operating Transfers In 294 294 -
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES (1,076) 577 1,653
FUND BALANCE-BEGINNING OF YEAR 1,309 1,309 -
FUND BALANCE-END OF YEAR $ 233 $ 1,886 $ 1,653
NARCOTICS FORFEITURE
REVENUES: Budget Actual Variance
From Use of Money and Property $ 4 $ - $ (4)
From Other Agencies 434 143 (291)
TOTAL REVENUES 438 143 (295)
EXPENDITURES:
Current:
Police 442 265 177
EXCESS OF REVENUES (UNDER)EXPENDITURES
FUND BALANCE(DEFICIT) -BEGINNING OF YEAR (136) (136) -
FUND BALANCE(DEFICIT)-END OF YEAR $ (140) $ (258) $ (118)
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, 2001
(In Thousands)
(Continued)
TRANSPORTATION
REVENUES: Budget Actual Variance
Other Taxes $ 1,607 $ 2,159 $ 552
From Use of Money and Property 363 292 (71)
From Other Agencies 160 632 472
TOTAL REVENUES 2,130 3,083 953
EXPENDITURES:
Current:
Public Works 1,054 706 348
Capital Outlay 3,491 1,218 2,273 ;
TOTAL EXPENDITURES 4,545 1,924 2,621
EXCESS OF REVENUES(UNDER) EXPENDITURES (2,415) 1,159 3,574
OTHER FINANCING SOURCES(USES):
Operating Transfers In 529 509 (20)
Operating Transfers Out (545) (545) -
TOTAL OTHER FINANCING SOURCES(USES) (16) (36) (20)
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES (2,431) 1,123 3,554
AND OTHER USES
FUND BALANCE-BEGINNING OF YEAR 2,843 2,843 -
FUND BALANCE-END OF YEAR $ 412 $ 3,966 $ 3,554
AIR QUALITY
REVENUES: Budget Actual Variance
From Use of Money and Property $ 20 $ 53 $ 33
From Other Agencies 200 221 21
TOTAL REVENUES 220 274 54
EXPENDITURES:
Current:
Public Works 181 84 97
Capital Outlay 680 464 216
TOTAL EXPENDITURES 861 548 313
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (641) (274) 367
OTHER FINANCING USES: .
Operating Transfers Out (100) (69) 31
EXCESS OF REVENUE OVER EXPENDITURES AND
OTHER USES (741) (343) 398
FUND BALANCE-BEGINNING OF YEAR 9" 9" -
FUND BALANCE-END OF YEAR $ 203 $ 601 $ 398
78
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, 2001
(In Thousands)
(Continued)
TRAFFIC IMPACT FEE
REVENUES: Budget Actual Variance
From Use of Money and Property $ 424 $ 260 $ (164)
From Other Agencies 200 761 561
TOTAL REVENUES 624 1,021 397
EXPENDITURES:
Current:
Public Works 106 73 33
Capital Outlay 185 55 130
TOTAL EXPENDITURES 291 128 163
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES 333 893 560
OTHER FINANCING SOURCES:
Operating Transfers In 3,550 3,550 -
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES 3,883 4,443 560
FUND BALANCE-BEGINNING OF YEAR 1,498 1,498 -
FUND BALANCE -END OF YEAR $ 5,381 $ 5,941 $ 560
FOURTH OF JULY PARADE
REVENUES: Budget Actual Variance
From Use of Money and Property $ 1 $ 3 $ 2
Other 200 205 (5)
TOTAL REVENUES 201 208 (3)
EXPENDITURES:
Current:
Community Services 253 219 34
EXCESS OF REVENUE AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES (52) (11) 41
FUND BALANCE-BEGINNING OF YEAR 53 53
FUND BALANCE-END OF YEAR $ 1 $ 42 $ 41
79
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, 2001
(In Thousands)
(Continued)
LIBRARY SERVICE
REVENUES: Budget Actual Variance
Licenses and Permits $ 100 $ 5 $ (95)
From Use of Money and Property 328 359 31
From Other Agencies - 330 330
Charges for Current Service 186 361 175
Other 5 1 (4)
TOTAL REVENUES 619 1,056 437
EXPENDITURES:
Current:
Library Services 194 185 9
EXCESS OF REVENUES OVER EXPENDITURES 425 871 446
OTHER FINANCING SOURCES(USES):
Operating Transfers Out (294) (272) 22
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES 131 599 490
FUND DEFICIT-BEGINNING OF YEAR 803 803 -
FUND DEFICIT-END OF YEAR $ 934 $ 1,402 $ 490
80
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, 2001
(In Thousands)
(Continued)
TOTAL SPECIAL REVENUE FUNDS
REVENUES: Budget Actual Variance
Other Taxes $ 2,047 $ 2,723 $ 676
Licenses and Permits 350 915 565
From Use of Money and Property 17,033 2,229 (14,804)
From Other Agencies 17,599 15,837 (1,762)
Charges for Current Service 196 430 234
Other 205 450 235
TOTAL REVENUES 37,430 22,584 (14,856)'_
EXPENDITURES:
Current:
City Administrator 381 320 61
Planning 139 128 11
Fire 62 57 5
Police 1,795 1,269 526
Economic Development 1,078 898 180 -
Community Services 2,075 1,373 702
Library Services 289 267 22
Public Works 8,205 2,710 5,495
Non-Departmental 262 223 39
Capital Outlay 33,817 14,581 19,236
Debt Service -
Principal 70 130 (60)
Interest 180 104 76
TOTAL EXPENDITURES 48,353 22,060 26,293
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES (10,923) 524 11,447
OTHER FINANCING SOURCES(USES):
Operating Transfers In 5,074 6,306 1,232
Proceeds of Long-Term Debt - 28 28
Proceeds of Bankruptcy Settlements - - 22
Operating Transfers Out (2,837) (2,784) 53
TOTAL OTHER FINANCING SOURCES(USES) 2,237 3,550 1,335
EXCESS OF REVENUES AND OTHER SOURCES
OVER(UNDER)EXPENDITURES AND OTHER USES (8,686) 4,074 12,782
FUND BALANCE-BEGINNING OF YEAR 24,108 24,108 -
FUND BALANCE -END OF YEAR $ 15,422 $ 28,182 $ 12,782
81
zf W)
�1�C1Ih` 1 j I,tlel y I
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.
CITY OF HUNTINGTON BEACH
DEBT SERVICE FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2000
(IN THOUSANDS)
Ra levelopmant Public Financing Reservoir Hill Civic improvement
ASSETS: Aw+xy Authorty Assessrtrnt District Corporation Totals 2001 Totals 2000
Cash and Investments $ 2,378 $ - $ 98 $ - $2,476 $ 9,676
Cash With Fiscal Agent 807 6,327 113 2,835 10,082 8,097
Taxes Receivable 1,543 - 51 - 1,594 1,555
Other Receivables 120 56 3 27 206 180
Advances to Other Funds - 18,468 - - 18,468 18,894
TOTAL ASSETS $ 4,848 $ 24,851 $ 26S $ 2,862 $32,826 $ 38,402
LIABILITIES AND FUND EQUITY
LIABILITIES:
Accounts Payable $ 376 $ - $ - $ - $ 376 S 23
Deposits 161 - - - 161 -
Due to Other Funds - - - 42 42 -
Deferred Property Taxes 800 10 - 810
TOTAL LIABILITIES 1,337 10 42 1,389 23
FUND BALANCE:
Reserved Balance:
Long-Term Receivables from Other Funds - 18,468 - 18,468 18,894
Debt Service 19,485
Total Reserved Fund Balance 18,468 18,468 38,379
Unreserved Equity:
Undesignsted 3,511 6,383 255 2,820 12,969
Total Unreserved Fund Equity 3,511 6,383 255 2,820 12,969
TOTAL FUND BALANCE 3,611 24,851 255 2,820 31,437 38,379
TOTAL LIABILITIES AND FUND EQUITY $ 4,848 $ 24,851 $ 265 $ 2,862 $32.826 $ 38,402
COMBINING STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE
FOR THE YEAR ENDED SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED SEPTEMBER 30, 2000
(IN THOUSANDS)
Redevalopm rat Public Financing Reservoir Hilt Civic improvement
REVENUES: Agency Authority Assessment District Corporation Totals 2001 Totals 20M
Property Taxes ,93 - $ 18 $ - 6,122 $ 5.731
From Use of Money and Property 715 2,846 22 166 3,749 2,547
From Other Agencies 462
TOTAL REVENUES 6,662 2,846 20T 166 9,871 8,740
EXPENDITURES:
Current
Non-Departmental 145 - - - 145 906
Debt Service:
Principal 8,785 1,335 210 1,130 11,460 3,733
Interest 10,662 3,333 70 1,709 16.774 11,300
TOTAL EXPENDITURES 19,592 4,668 280 2,839 27,379 16,939
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (12,940) (1,822) (73) (2,673) (17,608) (7,199)
OTHER FINANCING SOURCES(USES):
Operating Transfers In - 3,474 - 2,546 6,020 3,469
Proceeds of Long-Term Debt 6,295 - - - 6,295 29,512
Payments to Refunding Escrow - - - - - (4,573)
Operating Transfers Out (1,285) (19) (1,304) (12,809)
TOTAL-OTHER FINANCING SOURCES(USES) 6,010 3,466 2,646 11,011 16,599
EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES (7,930) 1,633 (73) (127) (6,497) 0,400
FUND BALANCE-BEGINNING OF YEAR 11,880 23,218 334 2,947 38,3T9 29,979
Prior Period Adjustments (439) (6) (445)
FUND BALANCE AS RESTATED 11,441 23,218 328 2,947 37,934 29,979
FUND BALANCE-END OF YEAR $ 3,611 $ 24,861 S 265 $ 2,820 $31,437 $ 38,379
82
CITY OF HUNTINGTON _EACH
DEBT SERVICE FUNDS
COMBINING STATEMENTS OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30,2001
(in Thousands)
Redevelopment Agency
REVENUES: Budget Actual Variance
Property Taxes $5,706 $5,937 $ 231
From Use of Money and Property 260 715 455
From Other Agencies 9 - (9)
TOTAL REVENUES 5,975 6,652 677
EXPENDITURES:
Current:
Non-Departmental 200 145 55
Debt Service:
Principal 290 8,785 (8,495)
Interest 9,962 10,662 (700)
TOTAL EXPENDITURES 10,452 19,592 (9,140)
EXCESS OF REVENUES(UNDER)EXPENDITURES (4,477) (12,940) (8,463)
OTHER FINANCING SOURCES(USES)
Proceeds of Long-Term Debt - 6,295 6,295
Operating Transfers Out (918) (1,285) (367)
TOTAL OTHER FINANCING SOURCES(USES) (918) 5,010 5,928
EXCESS OF REVENUE AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (5,395) (7,930) (2,535)
FUND BALANCE-BEGINNING OF YEAR 11,880 11,880 -
Prior Period Adjustments (439) (439) -
FUND BALANCE AS RESTATED 11,441 11,441 -
FUND BALANCE-END OF YEAR $ 6,046 $ 3,511 $ (2,535)
Public Financing Authority
REVENUES: Budget Actual Variance
From Use of Money and Property 156 2,846 2,690
EXPENDITURES:
Debt Service:
Principal 1,365 1,335 30
Interest 3,168 3,333 (165)
TOTAL EXPENDITURES 4,533 4,668 (135)
EXCESS OF REVENUES(UNDER)EXPENDITURES (4,377) (1,822) 2,555
OTHER FINANCING SOURCES(USES):
Operating Transfers In 4,048 3,474 (572)
Operating Transfers Out - (19) (19)
TOTAL OTHER FINANCING SOURCES(USES) 4,046 3,455 (591)
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (331) 1,633 1,964
FUND BALANCE-BEGINNING OF YEAR 23,218 23,218 -
FUND BALANCE-END OF YEAR $ 22,887 $ 24,851 $ 1,964
83
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, 2001
(In Thousands)
Reservoir Hill Assessment District
REVENUES: Budget Actual variance
Property Taxes $250 $185 $ (65)
From Use of Money and Property 23 22 (1)
TOTAL REVENUES 273 207 (66)
EXPENDITURES:
Current:
Non-Departmental 18 - 18
Debt Service:
Principal 65 210 (145)
Interest 66 70 (4)
TOTAL EXPENDITURES 149 280 (131)
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 124 (73) (197)
FUND BALANCE-BEGINNING OF YEAR 334 334 -
Prior Period Adjustments (6) (6) -
FUND BALANCE AS RESTATED 328 328 (197)
FUND BALANCE-END OF YEAR $ 452 $ 255 $ (197)
Civic Improvement Corporation
REVENUES: Budget Actual variance
From Use of Money and Property $ 130 $ 166 $ 36
EXPENDITURES:
Debt Service:
Principal 1,130 1,130 Interest 1,696 1,709 (13)
TOTAL EXPENDITURES 2,826 2,839 (13)
EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (2,696) (2,673) 23
OTHER FINANCING SOURCES
Operating Transfers In 2,816 2,546 (270)
EXCESS OF REVENUES AND OTHER SOURCES OVER
EXPENDITURES AND OTHER USES 120 (127) (247)
FUND BALANCE-BEGINNING OF YEAR 2,947 2,947 -
FUND BALANCE-END OF YEAR $ 3,067 $ 2,820 $ (247)
84
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, 2001
(Continued)
(In Thousands)
TOTAL DEBT SERVICE FUNDS
REVENUES: Budget Actual Variance
Property Taxes $ 5,956 $ 6,122 $ 166
From Use of Money and Property 569 3,749 3,180
From Other Agencies 9 - (9)
TOTAL REVENUES 6,534 9,871 3,337
EXPENDITURES:
Current:
Non-Departmental 218 145 73
Debt Service:
Principal 2,850 11,460 (8,610)
Interest 14,892 15,774 (882)
TOTAL EXPENDITURES 17,960 27,379 (9,419)
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (11,426) (17,508) (6,082)
OTHER FINANCING SOURCES(USES):
Operating Transfers In 6,862 6,020 (842)
Proceeds of Long-Term Debt - 6,295 6,295
Operating Transfers Out (918) (1,304) (367)
TOTAL OTHER FINANCING SOURCES(USES) 5,944 11,011 5,086
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER)EXPENDITURES AND OTHER USES (5,482) (6,497) (996)
FUND BALANCE-BEGINNING OF YEAR 38,373 38,379 -
Prior Period Adjustments (445) (445) -
FUND BALANCE AS RESTATED 37,928 37,934 -
FUND BALANCE-END OF YEAR _ $ 32,446 $ 31,437 $ (996)
85
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rx el
//C// 41�f�cwh- ijII1ew&-f �1,�rll.
At&A&AILA&A&A&AilILAIALA&A&,-iLA&A&®A&ALA&A&A&�AIL®AiL,Ak,ALAk
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.
• 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.
• The Public Financing Authority Fund accounts for expenditures relating to capital
improvements funding by Public Financing Authority bond issues
CITY OF HUNTINGTON BEACH
CAPITAL PROJECTS FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS
FOR SEPTEMBER 30, 2000
(IN THOUSANDS)
Redevelopment Low4ncome Capital
ASSETS: Agency Housing Improvement Pier Rebuilding
Cash and Investments $ 4,021 $ 3,798 $ 1,862 $ 668
Cash With Fiscal Agent - - 5,932 -
Taxes Receivable 43 - - -
Other Receivables 298 76 85 12
Notes Receivable 2,132 1,820 - -
Advances to Other Funds - 2,094 447 -
Land Held for Resale(Net) 9,139 - -
TOTAL ASSETS S 15,633 $ 7,788 $ 8,326 $ 680
LIABILITIES AND FUND BALANCE
LIABILITIES:
Accounts Payable $ 1,434 $ 2 $ 1,263 $ -
Other Accrued Liabilities 26 - 3 -
Deposits 154 - - -
Due to Other Funds - - - -
Deferred Revenue - 1,820 247 -
TOTAL LIABILITIES 1,614 1,822 1,613 -
FUND BALANCE:
Reserved Fund Balance:
Land Held for Resale 9,139 - - -
Encumbrances 298 131 6,613 97
Long-Term Receivables 2,132 2,094 200 -
Capital Projects - - - -
Total Reserved Fund Balance 11,569 2,225 6,813 97
Unreserved Fund Balance:
Designated for Future Expenditures 69 3,741 - -
Undesignated 2,381 - - 583
Total Unreserved Fund Balance 2,450 3,741 - 583
TOTAL FUND BALANCE 14,019 5,966 6,813 680
TOTAL LIABILITIES AND FUND BALANCE $ 16,633 $ 7,788 $ 8,326 $ 680
86
Library
Mello-Roos Holly Cultural Public Financing
Assessment District Parking In-Lieu Seacliffe Pier Plaza Facilities Authority Totals 2001 Totals 2000
$ 14 $ 441 $ 579 $ - $ 681 $ - $ 12,064 $ 15,347
85 - - 10 - 28,701 34,728 6,944
- - - - - - 43 74
10 - 481 234
- - 3,952 2,343
- 2,541 2,516
- - - - - - 9,139 15,401
$ 99 $ 441 $ 579 $ 10 $ 691 $ 28,701 $ 62,948 $ 42,859
$ - $ - $ - $ 61 $ 9 $ - $ 2,769 $ 1,542
- - - 29 82
- - - 154 134
608 - - 608 413
- - - 2,067 222
669 9 - 5,627 2,393
- - - 9,139 15,401
11 - 7 - 7,157 1,861
- - - - 4,426 4,637
- - - 28,701 28,701 6,774
11 - 7 28,701 49,423 28,673
- - 147 - - - 3,957 1,215
99 441 421 (659) 675 - 3,941 10,578
99 441 568 (659) 675 - 7,898 11,793
99 441 679 (659) 682 28,701 67,321 40,466
S 99 $ 441 $ 679 $ 10 $ 691 $ 28,701 $ 62,948 $ 42,869
87
CITY OF HUNTINGTON BEACH
CAPITAL PROJECTS FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30, 2000
(IN THOUSANDS)
Redevelopment Low-income Capital
REVENUES: Agency Housing Improvement Pier Rebuilding
Other Taxes $ 795 $ - $ - $ -
Licenses and Permits - - - -
From Use of Money and Property 688 378 515 306
From Other Agencies - - 2,192 34
Charges for Current Service - - -
Other 405 - 8 " 27
TOTAL REVENUES 1,888 378 2,715 367
EXPENDITURES:
Current
City Attorney 485 - - -
Economic Development 1,847 71 - -
Community Services - - 42 -
Library Services - - -
Public works - - 993 59
Non-Departmental - 10 2,196 -
Capital Outlay 5,835 2,520 8,044 488
Debt Service
Principal 48 - 246 -
Interest 40 - 65 -
TOTAL EXPENDITURES 8,255 2,601 11,586 547
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (6,367) (2,223) (8,871) (180)
OTHER FINANCING SOURCES(USES):
Operating Transfers In 20 1,187 5,147 -
Proceeds of Long-Term Debt 264 - - -
Operating Transfers Out - (35) (53) (580)
TOTAL OTHER FINANCING SOURCES(USES) 284 1,152 5,094 (580)
EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES (6,083) (1,071) (3,777) (760)
FUND BALANCE(DEFICIT)-BEGINNING OF YEAR 20,102 7,147 10,590 1,440
Prior Period Adjustments - (110) - -
FUND BALANCE AS RESTATED 20,102 7,037 10,590 1,440
FUND BALANCE(DEFICIT)-END OF YEAR $ 14,019 $ 6,966 $ 6,813 $ 680
88
Library
Mello-Roos Holly Cultural Public Financing
Assessment District Parking In-Lieu Seacliffe Pier Plaza Facilities Authority Totals 2001 Totals 2000
$ - $ - $ - $ - $ - $ - $ 795 $ 822
41 - - 50 - 91 484
19 30 42 348 - 134 2,460 1,967
- - - - - - 2,226 2,590
- - 375 - 375 420
- - 440 - - - 880 1,342
19 71 482 348 425 134 6,827 7,626
- - - - - - 485 455
- - - 1,918 1,598
74 - - 116 214
- - 357 - 357 399
128 7 - - 1,187 234
- - - - - - 2,206 2,950
218 - 86 - 3 - 17,194 8,099
- - - - - - 294 2,500
- - - - - 221 326 2,800
218 - 214 81 360 221 24,083 19,349
(199) 71 268 267 66 (87) (17,266) (11,724)
- - - - - - 6,354 19,226
- - - - - 31,360 31,624 2,416
(35) - - (482) - (2,572) (3,757) (1,812)
(35) - - (482) - 28,788 34,221 19,830
(234) 71 268 (216) 65 28,701 16,966 8,106
333 370 311 (444) 617 - 40,466 32,360
(110) -
333 370 311 (444) 617 - 40,356 32,360
$ 99 $ 441 $ 679 $ (669) $ 682 $ 28,701 $ 67,321 $ 40,466
89
A.-,llnllewal aweie'll J`
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.
• The Ocean View Estates Fund accounts for the operation of the Ocean View Estates
Mobile Home Park owned by the City
CITY OF HUNTINGTOt EACH
ENTERPRISE FUNDS
COMBINING BALANCE SHEET
SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS
FOR SEPTEMBER 30, 2000
(IN THOUSANDS)
ASSETS:
Emerald Emergency
Water Cove Fire Refuse Hazmat Cultural
Current Assets: utility Housing Medical Collection Service Affairs
Cash and Investments $ 39,145 $ 2,142 $ 835 $ - $ 228 $ 226
Accounts Receivable 1,429 - 1,099 279 1 -
Interest Receivable 618 35 13 - - -
Inventory 1,104 - - - -
Unbilled Receivables 4,015 - - 1,215 - -
Total Current Assets 46,311 2,177 1,947 1,494 229 226
Other Assets:
Advances to Other Funds 2,894 - - - -
Total Other Assets 2,894 - - - - -
Plant, Property and Equipment:
Land 3,907 1,288 - - - 759
Buildings 2,709 4,102 - - - 1,249
Machinery and Equipment 63,497 - 1,135 - 20 -
Construction in Progress 5,593 - - - - -
Subtotal 75,706 5,390 1,135 - 20 2,008
Less Accumulated Depreciation (36,819) (1,312) (361) - (16) (150)
Total Plant,Property and Equipment 38,887 4,078 774 - 4 1,858
TOTAL ASSETS $ 88,092 $ 6,256 $ 2,721 $ 1,494 $ 233 $ 2,084 r
LIABILITIES AND FUND EQUITY
LIABILITIES:
Current Liabilities:
Accounts Payable $ 2,793 $ 84 $ 254 $ 757 $ - $ 62
Accrued Payroll 161 - 43 8 3 6
Accrued Interest - - - - - -
Deposits 1,510 21 - - - -
Due to Other Funds - - - 1,069 - -
Current Portion of Long-Term Debt - - 151 - - -
Total Current Liabilities 4,464 105 448 1,834 3 68
Long-Term Liabilities:
Compensated Absences 386 - 46 29 9 2
Leases Payable - - 431 - - -
Advances from Other Funds - 244 - - - -
Less Current Portion - - (151) - - -
Total Long-Term Liabilities 386 244 326 29 9 2
TOTAL LIABILITIES 4,860 349 774 1,863 12 70
FUND EQUITY:
Contributed Capital 35,040 5,860 311 - - 1,858
Retained Earnings 48,202 46 1,636 (369) 221 156
TOTAL FUND EQUITY 83,242 5,906 1,947 (369) 221 2,014
TOTAL LIABILITIES AND FUND EQUITY $ 88,092 $ 6,266 $ 2,721 $ 1,494 $ 233 $ 2,084
90
Ocean
View
Estates Totals 2001 Totals 2000
$ 472 $ 43,048 $ 37,695
- 2,808 3;120
5 671 679
1,104 912
5,230 4,735
477 52,861 47,141
- 2,894 2,735
- 2,894 2,735
2,644 8,598 2,438
560 8,620 8,059
- 64,652 63,087
- 5,593 5,377
3,204 87,463 78,961
(22) (38,680) (37,921)
3,182 48,783 41,040
$ 3,659 $ 104,638 $ 90,916
$ - $ 3,950 $ 1,954
221 210
3
- 1,531 1,551
- 1,069 823
- 151 9
- 6,922 4,550
- 472 400
- 431 9
- 244 ' 244
(151) (9)
996 644
7,918 5,194
- 43,069 44,772
3,659 53,551 40,950
3,659 96,620 85,722
$ 3,659 $ 104,538 $ 90,916
st
CITY OF HUNTINGTON EACH
ENTERPRISE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN RETAINED EARNINGS (ACCUMULATED DEFICIT)
FOR THE YEAR ENDED SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
(IN THOUSANDS)
Emerald Emergency
Water Cove Fire Refuse Hazmat Cultural
OPERATING REVENUES: Utility Housing Medical Collection Service Affairs
Sales $ 22,010 $ - $ - $ - $ - $ -
Rentals - 671 - - - -
Fees for Service - - 3,505 8,969 - -
Other 539 - 46 55 179 276
TOTAL OPERATING REVENUES 22,549 671 3,651 9,024 179 276
OPERATING EXPENSES:
Water Purchases 9,098 - - - - -
Supplies and Operations 4,135 568 3,327 9,885' 126 235
Engineering 2,187 - - - - -
Production 2,603 - - -
Maintenance 1,576 - - - - -
Water Quality 325 - - - - -
In-Lieu Taxes to General Fund 4,242 - - - - -
Depreciation 1,606 82 131 - 4 25
TOTAL OPERATING EXPENSES 25,772 650 3,458 9,885 130 260
OPERATING INCOME(LOSS) (3,223) 21 93 (861) 49 16
NON-OPERATING REVENUES(EXPENSES):
Interest Income 3,557 166 68 33 6 13
Joint Venture Income(Expense) - - - - - -
Capital Contributions 8,779 - - - - -
Interest Expense - - - - - -
TOTAL NON-OPERATING REVENUES(EXPENSES) 12,336 166 68 33 6 13
NET INCOME(LOSS)BEFORE OPERATING TRANSFERS 9,113 187 161 (828) 55 29
OPERATING TRANSFERS:
Operating Transfers In - 35 - - 10 85
Operating Transfers Out - (366) (181) - - -
TOTAL OPERATING TRANSFERS - (331) (181) - 10 85
NET INCOME(LOSS) 9,113 (144) (20) (828) 65 114
Add Depreciation on Contributed Assets 955 - - - - 25
INCREASE(DECREASE)IN RETAINED EARNINGS 10,068 (144) (20) (828) 65 139
RETAINED EARNINGS-BEGINNING OF YEAR 38,592 190 1,536 459 156 17
Prior Period Adjustment (458) - 120 - - -
RETAINED EARNINGS -BEGINNING OF YEAR AS RESTATED 38,134 190 1,666 459 156 17
RETAINED EARNINGS(ACCUMULATED DEFICIT)-END OF YEAR $ 48,202 $ 46 $ 1,636 $ (369) S 221 $ 156
92
Ocean
View
Estates Totals 2001 Totals 2000
$ - $. 22,010 $ 21,913
671 654
12,474 12,830
462 1,557 1,309
462 36,712 36,706
- 9,098 4,541
- 18,276 16,203
- 2,187 837
- 2,603 4,833
- 1,576 4,096
- 325 291
- 4,242 4,102
22 1,870 1,665
22 40,177 36,568 ,
"0 (3,466) 138
16 3,859 2,178
- - 56
3,203 11,982 1,219
- - (354)
3,219 15,841 3,099
3,669 12,376 3,237
- 130 657
(547) (193)
(417) 464
3,669 11,959 3,701
- 980 1,231
3,659 12,939 4,932
40,950 36,018
(338) -
40,612 36,018
$ 3,659 $ 53,651 S 40,950
93
CITY OF HUNTINGTON BEACH
ENTERPRISE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
(IN THOUSANDS)
Emerald Emergency
Water Cove Fire Refuse Hazmat Cultural
CASH FLOWS FROM OPERATING ACTIVITIES Utility Housing Medical Collection Service Affairs
OPERATING INCOME(LOSS) $ (3,223) $ 21 $ 93 $ (861) $ 49 $ 16
Adjustments Required to Reconcile Operating Income(Loss)to Net Cash Provided
(Used)by Operating Activities:
Depreciation 1,606 82 131 - 4 25
Loss on Sale of Capital Assets - - - - - -
Decrease(Increase)in Accounts Receivable 81 - 75 157 (1) -
Decrease(Increase)in Interest Receivable 2 6 3 1 1 -
Decrease(Increase)in Unbilled Receivables (412) - - (831. - -
Decrease(Increase)in Advances to Other Funds (159) - - - - -
Decrease(Increase)in Due from Other Funds - - - - -
Decrease(Increase)in Inventory (192) - - - - -
Increase(Decrease)in Accounts Payable 1,320 82 85 516 (5) (3)
Increase(Decrease)in Accrued Payroll 10 - (6) 1 3 3
Increase(Decrease)in Accrued Interest Payable (3) - - - - -
Increase(Decrease)in Due to Other Funds - - - 246 - -
Increase(Decrease)in Deposits (21) - - - - -
Increase(Decrease)in Compensated Absences 67 - 14 (10) 2 -
TOTAL ADJUSTMENTS 2,299 170 302 828 4 25
NET CASH PROVIDED(USED) BY OPERATING ACTIVITIES (924) 191 395 (33) 53 41
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Operating Transfers In From Other Funds - 35 - - 10 85
Operating Transfers Out to Other Funds - (366) (181) - - -
TOTAL CASH FLOWS PROVIDED(USED)BY NON-CAPITAL
FINANCING ACTIVITIES - (331) (181) - 10 85
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Contributions 8,779 - - - - -
Interest Paid - - - -
Acquisition and Construction of Capital Assets (6,941) - (106) - - -
Principal Paid on Long-Term Debt - - - - -
TOTAL CASH PROVIDED(USED)BY CAPITAL AND RELATED
FINANCING ACTIVITIES 1,838 - (106) - -
CASH FLOWS FROM INVESTING ACTIVITIES:
Joint Venture Cash Received(Paid) - - - - - -
Proceeds of Bankruptcy Settlements - - - - - -
Interest on Investments 3,557 166 68 33 6 13
TOTAL CASH FLOWS PROVIDED(USED)BY INVESTING ACTIVITIES 3,567 166 68 33 6 13
NET INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS 4,471 26 176 - 69 139
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 34,674 2,119 -
CASH AND CASH EQUIVALENTS-END OF YEAR S 39,146 $ 2,142 $ 835 $ - $ 228 $ 226
94
Ocean
View
Estates Totals 2001 Totals 2000
E 440 E (3,465) E 138
22 1,870 1,665
- 312 (862)
(6) 7 (491)
- (495) (579)
(159) 3,793
- 1.301
(192) (20)
1,995 (198)
11 9
- (3) (20)
- 246 (633) -
- (21) (106)
I
- 73 64
16 3,644 3,923
456 179 4,061
- 130 657
(547) (193)
(417) 464
8,779 11,585
- (353)
(7,047) (1,069)
- (5,142)
1,732 5,021
- 56
- 1,219
16 3,859 2,178
16 3,869 3,453
472 5,353 12,999
37,695 24,696-
E 472 E 43,048 E 37,695
95
j
�M4
J. X hGGC: 44zl>lh. (")Illclylliowl
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.
• 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 30,2001
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30,2000
(IN THOUSANDS)
ASSETS:
Health Workers' Liability Public
insurance Compensation Insurance Financing Equipment
Current Assets: Reserve Reserve Reserve Authority Replacement Totals 2001 Totals 2000
Cash and Investments S 1,346 $ - $ 5,616 S $ 8,134 $ 15,096 S 10,004
Prepaid Insurance 51 21 1,321 - 1,393 1,242
Other Receivables 44 66 3 438 551 21T
Total Current Assets 1'"1 21 7,003 3 8,572 17,040 11,463
Other Assets:
Cash WHh Fiscal Agent 1,225 1,225 1,167
Total Other Assets 1,225 1,225 1,167
Plant,Property and Equipment
Machinery and Equipment - 44,370 44,370 40,135
Construction in Process 4,379 4,379 4,432
Subtotal 48,749 48,749 44,567
Less Accumulated Depreciation (28,356) (28,356) (29.534)
Total Plant,Property and Equipment 20,393 20,393 15,033
TOTAL ASSETS S 1,441 $ 21 S 7,003 $ 1,228 S 28,965 $ 38,658 i 27,663
LIABILITIES AND FUND EQUITY
LIABILITIES:
Current Liabilities:
Accounts Payable $ 44 S 2 $ 248 S $ 201 $ 495 S 210
Accrued Payroll 15 7 4 - 26 428
Due to Other Funds - 1,374 - - 1,374 -
Accrued Interest 394 4 9 407 9
Current Portion of Long-Tenn Debt 200 3,621 2,924 6,745 5,000
Total Current Liabilities 653 5,008 3,176 210 9,047 5,645
Long-Term Liabilities:
Leases Payable - - - 1.884 1,884 1,541
Claims Payable 200 4,586 5,391 - 10,177 9,743
Compensated Absences 43 21 18 - 82 57
Less Current Portion (200) (3,621) (2,924) (6,745) (5,000)
Total Long-Tenn Liabilities 43 986 2,485 1,894 5,398 6,341
TOTAL LIABILITIES 696 5,994 5,661 2,094 14,44E 11,986
FUND EQUITY:
Contributed Capital 3,815 3.815 4,849
Retained Earnings(Accumulated Deficits): - 26,756
Reserved for Capital Projects - 1,228 - 1228 1,175
Unreserved 745 (5,973) 1,342 23,056 19,170 9,653
Total Retained Earnings 745 (5,973) 1,342 1,228 23,056 20,398 10,828
TOTAL FUND EQUITY 745 (5,973) 1,342 1,228 26,871 24,213 15,677
TOTAL LIABILITIES AND FUND EQUITY S 1,441 i 21 S 7,003 S 1,228 $ 28,965 S 38,658 S 27,663
96
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Introductory
Table of Contents
Letter of Transmittal i iv — xvii j
City Officials xviii
Organizational Chart xix
i
Financial Reporting Certificate xx j
Financial Section
Independent Auditors' Report 1 - 2
General Purpose Financial Statements:
I
Combined Balance Sheet — All Fund Types and Account Groups 3 - 4
Combined Statement of Revenues, Expenditures and Changes in
Fund Balance — All Governmental Fund Types and Expendable
Trust Fund 5 - 6
Combined Statement of Revenues, Expenditures and Changes in
Fund Balance, Budget and Actual — General; Special Revenue,
and Debt Service Fund Types 7 - 8
Combined Statement of Revenues, Expenses and Changes in
I j
Retained Earnings — All Proprietary Fund Types 9
Combined Statement of Cash Flows — All Proprietary Fund Types 10
Statement of Chan es in Plan Net Assets Pension Trust Fund 11
Notes to General Purpose Financial Statements 12 - 67
Supplementary
Combined Financial Statements and Schedules of Individual Funds
and Account Groups
General Fund:
I
Balance Sheet 68
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual 69
Special Revenue Funds:
Combined Balance Sheet 70 - 71
Combining Statement of Revenues, Expenditures and Changes in Fund
Balance Deficits i 72 - 73
Combined Statements of Revenues, Expenditures and Changes in Fund
Balance Deficits — Budget and Actual 74 - 81 j
f j
Supplementary
Combined .
and Account Groups
Debt Service Funds:
Combining Balance Sheet 82
Combining Statements of Revenues, Expenditures and Charges in
Fund Balance 82
Combining Statements of Revenues, Expenditures and Charges in
Fund Balance — Budget and Actual 83 — 85
Capital Projects Funds: j
Combining Balance Sheet 86 — 87
Combining Statements of Revenues, Expenditures and Changes in
Fund Balance j 88 — 89
Enterprise Funds:
Combining Balance Sheet 90 — 91
Combining Statement of Revenue, Expenses, and Changes in
Retaining Earnings 92 — 93
Combining Statement of Cash Flows 94 — 95
i
Internal Service Funds:
96
Combining Balance Sheet
Combining Statements of Revenues, Expenses and Changes in
Retaining Earnings Accumulated Deficits 97
Combining Statement of Cash Flows 98
Trust and Agency Funds:
Combining Balance Sheet 99 — 100
Agency Funds:
i
Combininq Statement of Changes in Assets and Liabilities 101 — 102
Pension Trust Funds:
Statement of Plan Net Assets 103
Statement of Changes in Plan Net Assets 103
Expendable Trust Fund:
Balance Sheet j 103
Statement of Revenues. Expenditures, and Changes in Fund Balance i 104
Supplementary • •
Combined Financial Statements and Schedules of Individual Funds
• Account Groups
•
General Fixed-Assets Account Group:
Schedule of General Fixed Assets 105
Schedule of Changes in General Fixed Assets by Function and
Activity 105
i
Schedule of General Fixed Assets by Function and Activity 105
General Long-Term Debt Account Group:
Schedule of Changes in General Long-Term Debt 106
Statistical Section
Governmental Fund Revenues by Source — Last Ten Fiscal Years 107 - 108
Governmental Fund Expenditures by Function — Last Ten Fiscal Years 107 - 108
Property Tax Levies and Collections — Last Ten Fiscal Years 107 - 108
Assessed and Actual Valuations of Property— Last Ten Fiscal Years 109 j
PropertV Tax Rates — All Direct and Overlapping Governments 109
General Obligation Bonded Debt Ratios — Last Ten Fiscal Years 109
i
Construction Activity and Bank and Savings and Loan Activity— Last Ten j
Fiscal Years 110
Computation of Legal Debt Margin 110
Statement of Direct and Overlapin Bonded Debt 110
Demographic Statistics ill
Top Ten Secured Property Owners 111
Miscellaneous Statistics 111
SU City _
� HBBeaw)
City of Huntington Beach
Hunting Administrative Services Department
2000 Main Street
Huntington Beach, California 92648
March 31, 2002
The Honorable Mayor, City Council Members
and
Citizens of Huntington Beach, California
Mayor and Council Members:
This letter transmits the Comprehensive Annual Financial Report for the City of
Huntington Beach for the fiscal ending September 30, 2001. The intent of this
report is to provide a firm understanding of the City's financial position as of that
date. The Administrative Services Department is responsible for the accuracy of
the information at the close of the 2000/2001 fiscal year.
The financial statements comply with the standards of Government Accounting
Standards Board and include the report of our independent auditors, Diehl, Evans
and Company LLP.
This report is organized into three sections:
• Introductory — Includes this transmittal letter, the City's organizational
chart, and a list of the principal officials of the City.
• Financial — Includes the general purpose financial statements, the
individual fund and account group financial information, and the
auditor's report on the general purpose financial statements.
• Statistical— Contains summary information about the City generally on
a multi-year basis.
Economic Background
The United States officially slipped into recession in March 2001. This was
driven by a declining economy and the resulting uncertainty from the tragic
events of September 111h. The Gross Domestic Product (GDP), the broadest
measure of the US economy, declined for two consecutive quarters bringing
about the recession.
United States Gross Domestic Product
Federal Fiscal Year 2000/2001
2.5
2
1.5 0
-C 1
O 0.5 '
� 0
-0.5
-1
-1.5
41' Qrtr. 1st Qrtr. 2"d Qrtr. 3rd Qrtr.
2000 2001 2001 2001
Period
Source: United States Bureau of Economic Analysis
Despite the recession, most economists are optimistic that the economy is
gaining strength and that GDP will show growth in the first quarter of 2002.
The most significant issue related to the financial position of the City is the
State economy. With the economy growing again, the next most significant
issue to the financial position of the City is the condition of the State of
California's budget. The State has failed to realize revenues equal or better than
their forecast in fiscal year 2001/2002. Currently, the State is behind forecast by
2.2% overall for the their fiscal year beginning in July 2001. This condition is
compounding deficits realized in the State's budget due to the energy crisis of
2001. Projections of the total State budget deficit range from $12 to $19 billion.
CAFR Transmittal Letter V 4/1/2002 1:02 PM
I
t
General Fund Agency Cash
2002-03 Governor's Budget Forecast
(Dollars in Billions)
16.000
14.000
12.000
10.000
8.000
6.000
4.000
2.000 IHN so
0.000in rn - son
July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June
0 Actual _! Frecast
Source: California Department of Finance
The State of California has demonstrated a willingness to use revenues
allocated for local government to help balance their budget.
The local economy was certainly a bright spot. Huntington Beach's economy
remained strong in the midst of otherwise negative economic news. This was
the result of stronger than expected auto sales and a growing retail base. Over
the past five years, retail spending has grown by almost 47% in
Huntington Beach.
CAFR Transmittal Letter vi 4/1/2002 1:02 PM
i
The Hyatt Regency Resort and Spa
In addition, construction is currently underway at the Hyatt Regency Resort and
Spa, a 519-room hotel and conference center adjacent to the Hilton Waterfront
Beach Resort. Plans are moving forward with the developer (CIM Group) for the
development of The Strand in downtown Huntington Beach. Demolition is
expected to begin in 2002 at the Huntington Beach Mall to create a new center
with an entertainment and retail focus. Finally, the McDonnell Center Business
Park and West Orange County Commerce Center continue to serve and attract
clientele such as Boeing, Sharp Electronics, Cambro, and Quicksilver.
-h- _�•i-';ter_'"'S.i"-.. __ _ J-__ '"� mot.- __-�
'���• .� r -��-.tee--.- 2� —.`cam
1 � i
The Strand in Downtown Huntington Beach
The City has initiated two significant projects with construction beginning
during the year on the City's Sports Complex and South Beach improvements.
Both of these projects were funded through the issuance of bonds to be paid for
primarily through future anticipated revenue resulting from the completed
projects. These projects will continue to keep Huntington Beach ranked as one
of the best places to live in Orange County.
CAFR Transmittal Letter VII 4/1/2002 1:02 PM
t
� .
Enterprise Funds: The City currently has seven Enterprise Funds. The largest
of these funds is the Water Utility fund. Below is a summary net income (loss)
of these funds (in thousands):
ENTERPRISE • • • eee eee ee
Water Utility $ 1,965 $ 9,113
Emerald Cove Housing 228 (144
Emergency Fire Medical 238 (20
Refuse Collection 712 828
HazMat Service 43 65
Cultural Affairs 515 114
Ocean View Estates — 3,659
The net income of the Water Utility Fund is inflated this year due to new
accounting standards requiring that contributed capital, assets deeded to the
city by developers or cash paid to fund additional capacity, be reported as a
part of net income. Staff will review the Refuse, Emergency Fire Medical
(FireMed), and Emerald Cove revenue schedules to determine an appropriate
recommendation to bring to the City Council to address the net loss reflected
in this report.
Internal Service Funds: The City currently has five internal service funds.
Below is a summary net income (loss) of these funds (in thousands):
INTERNAL SERVICE FUNDS • • • eee eee ee
Health Insurance Reserve $ 972 j $ 1,173
Workers' Compensation Reserve 518 2
Liability Insurance Reserve 634 984
Public Financing Authority 3,905 I 53
Equipment Replacement j 65 j 7,607
The City's insurance funds are well on their way back to financial health.
Overall, Health Insurance and Workers' Compensation have net income
compared with prior years. The net loss in the Liability Insurance Reserve fund
is a conservative estimate of potential liability claims. Next year, the Liability
and Equipment Replacement funds will be designated as governmental
operations to more accurately reflect Governmental Accounting Standards
Board decision number thirty-four, commonly referred to as GASB 34. The net
income of the Equipment Replacement fund is inflated this year due to new
CAFR Transmittal Letter XIII 4/1/2002 1:02 PM
f
i
accounting standards requiring that contributed capital be reported as a part of
net income similar to the Water Utility fund.
Proprietary Funds Equity Fund equity is the net worth of a particular fund.
Below is a schedule of the City's fund equity in the Enterprise and Internal
Service Funds (in thousands):
Percent
Total Equity Total Equity Increase
INSURANCE FUNDS • • • oeo eoo ee (Decrease)
contributed Capital $ 49,621 1 $ 46,884 j 5.5%
Retained Earnings 50,603 73,949 46.1
TOTAL $ 100,224 ! $ 120,883 I 20.6%
Trust & 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 $5,980,000 largely because the City recorded in an agency
fund supplemental property taxes received but placed on hold pending appeal
of the Howard Jarvis vs. City of Huntington Beach lawsuit.
Pension Obligations
The City participates in the California Public Employee's Retirement System
(CaIPERS). At June 30, 2000, the City's future total pension obligation for all
current and retired employees was $408,674,000 and assets available for these
obligations were $521,545,000 leaving a surplus of $112,871,000. The City
currently maintains "excess funds" for safety retirement programs and is
"superfunded" for miscellaneous retirement programs through CalPERS.
The City also maintains a supplemental retirement plan. An independent
actuary completed a study of this plan for the year. The annual pension cost
for this plan was $4,282,000, while the City contributed $1,718,000. The
unfunded liability for this plan was $29,775,000.
CAFR Transmittal Letter Xlv 4/1/2002 1:02 PM
r
Long-Term Debt
Long-Term debt represents resources used to pay the principal and interest on
long-term. The City's outstanding long-term debt at year-end was (in
thousands):
Bonds and Certificates of Participation:
Reservoir Hill Assessment District Bonds $ 605
Public Financing Authority 76,240
Redevelopment Agency
9,770 1
Civic Improvement Corporation 29,750
Notes • . .
Energy Conservation ! 123
Section 108 Loan 4,756
Redevelopment Agency 8,475
Other Debt:
Self-Insurance Claims 10,177
Compensated Absences 7,134
Leases 2,438
Pension Obligation 8,337
Leases 2,438
Advances to Other Funds (Redevelopment Agency ! 57,755 j
TOTAL
The City's legal debt limitation for general obligation bonds is 12% of the total
of assessed valuation in the city, which is $15,877,065,000. The City currently
has no general obligation bonds outstanding so the legal debt margin is over
$1.9 billion.
All bonded debt has been incurred by the Huntington Beach Public Financing
Authority, the Huntington Beach Civic Improvement Corporation,
Redevelopment Agency of the City of Huntington Beach, or the Reservoir Hill
Assessment District.
CAFR Transmittal Letter XV 4/1/2002 1:02 PM
i
Cash Management
The City Treasurer invests surplus cash in authorized investments allowed by
government code and City policy. The City forecasts revenues and
expenditures to ensure enough available cash to meet current obligations and
to maximize interest income. During 2000/2001, the investment of non-
restricted cash and investments yielded interest of $6,930,453 or 5.95% return.
The California Government Code requires the City Treasurer to prepare an
annual statement of investment policy. 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
over a certain amount.
Other Information
Single Audits: 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 these audits are
available from this office.
These reports include the financial activity of separate legal entities whose
activities the City controls. These entities are:
• 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.
CAFR Transmittal Letter Xvi 4/1/2002 1:02 PM
i
I `1
Future Financial Reporting Chances: Beginning in fiscal year 2001/2002, the
City will begin reporting its financial activities under new requirements
prescribed by Government Accounting Standards Board Statement 34
(GASB 34). These new requirements will for the first time require the City to
account for the acquisition of, and depreciation on, infrastructure. It will also
require the City to prepare financial statements similar to private businesses.
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 for its
September 30, 2000 report. The GFOA awards the certificate to governmental
agencies whose reports conform to high standards of public financial
reporting. The City has received this certificate for fifteen (15) consecutive
years and plans on submitting this report for another award. This certificate is
valid for one year only.
Acknowledgements: 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, and Shari Donoho, Administrative Assistant, for her graphic
art design work, on this report.
Sincerely,
Vag
Dan T. Villella
Finance Officer
C&y ltlla4-t-,�l2
Clay Martin
Director of Administrative Services
CAFR Transmittal Letter XVII 4/1/2002 1:02 PM
suit CI
City of Huntington Beach
Hunlrgt nlBeac�h i/ Administrative Services Department
2000 Main Street
Huntington Beach, California 92648
March 31, 2002
The Honorable Mayor, City Council Members
and
Citizens of Huntington Beach, California
Mayor and Council Members:
This letter transmits the Comprehensive Annual Financial Report for the City of
Huntington Beach for the fiscal ending September 30, 2001. The intent of this
report is to provide a firm understanding of the City's financial position as of that
date. The Administrative Services Department is responsible for the accuracy of
the information at the close of the 2000/2001 fiscal year.
The financial statements comply with the standards of Government Accounting
Standards Board and include the report of our independent auditors, Diehl, Evans
and Company LLP.
This report is organized into three sections:
• Introductory — Includes this transmittal letter, the City's organizational
chart, and a list of the principal officials of the City.
• Financial — Includes the general purpose financial statements, the
individual fund and account group financial information, and the
auditor's report on the general purpose financial statements.
• Statistical — Contains summary information about the City generally on
a multi-year basis.
l
Economic Background
The United States officially slipped into recession in March 2001. This was
driven by a declining economy and the resulting uncertainty from the tragic
events of September 11th. The Gross Domestic Product (GDP), the broadest
measure of the US economy, declined for two consecutive quarters bringing
about the recession.
United States Gross Domestic Product
Federal Fiscal Year 2000/2001
2.5
2
1.5
L 1
O 0.5
� 0
-0.5
-1
-1.5
4th Qrtr. 1st Qrtr. 2nd Qrtr. 3rd Qrtr.
2000 2001 2001 2001
Period
Source: United States Bureau of Economic Analysis
Despite the recession, most economists are optimistic that the economy is
gaining strength and that GDP will show growth in the first quarter of 2002.
The most significant issue related to the financial position of the City is the
State economy. With the economy growing again, the next most significant
issue to the financial position of the City is the condition of the State of
California's budget. The State has failed to realize revenues equal or better than
their forecast in fiscal year 2001/2002. Currently, the State is behind forecast by
2.2% overall for the their fiscal year beginning in July 2001. This condition is
compounding deficits realized in the State's budget due to the energy crisis of
2001. Projections of the total State budget deficit range from $12 to $19 billion.
CAFR Transmittal Letter V 4/1/2002 1:02 PM
I
General Fund Agency Cash
2002-03 Governor's Budget Forecast
(Dollars in Billions)
16.000
14.000
12.000
10.000
8.000
6.000
4.000
2.000 I�
0.000
July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June
Actual Fo ecast
Source: California Department of Finance
The State of California has demonstrated a willingness to use revenues
allocated for local government to help balance their budget.
The local economy was certainly a bright spot. Huntington Beach's economy
remained strong in the midst of otherwise negative economic news. This was
the result of stronger than expected auto sales and a growing retail base. Over
the past five years, retail spending has grown by almost 47% in
Huntington Beach.
CAFR Transmittal Letter Vi 4/1/2002 1:02 PM
r
� 1
i
The Hyatt Regency Resort and Spa
In addition, construction is currently underway at the Hyatt Regency Resort and
Spa, a 519-room hotel and conference center adjacent to the Hilton Waterfront
Beach Resort. Plans are moving forward with the developer (CIM Group) for the
development of The Strand in downtown Huntington Beach. Demolition is
expected to begin in 2002 at the Huntington Beach Mall to create a new center
with an entertainment and retail focus. Finally, the McDonnell Center Business
Park and West Orange County Commerce Center continue to serve and attract
clientele such as Boeing, Sharp Electronics, Cambro, and Quicksilver.
;4' .sue. � �.yn•�^S.s.�.,. '.sii'£•-.y,_ ��,t—•t+-
OP
"A
The Strand in Downtown Huntington Beach
The City has initiated two significant projects with construction beginning
during the year on the City's Sports Complex and South Beach improvements.
Both of these projects were funded through the issuance of bonds to be paid for
primarily through future anticipated revenue resulting from the completed
projects. These projects will continue to keep Huntington Beach ranked as one
of the best places to live in Orange County.
CAFR Transmittal Letter Vii 4/1/2002 1:02 PM
1 _
I I
`
Huntington Beach in the year represented by this Comprehensive Annual
Financial Report established a 0% rate for the voter approved supplemental
property tax allocated toward the City's employee retirement obligations. This
created a decline in revenue of approximately $9 million. The City's 2001/2002
fiscal year budget was reduced by over $8 million in response to this and in
anticipation to the general economy's impact of City revenue.
Financial Background
The City prepares financial statements on the modified accrual basis for all
governmental funds and on the accrual basis for the proprietary fund types (see
Note 1 to the financial statements). Generally, both methods recognize revenue
when it is earned and expenditures when they are incurred. Governmental
Funds record the financial activity of general governmental activities generally
financed through taxes and inter-governmental grants. The City's General Fund
is a governmental fund. Proprietary Funds record activities that are similar to
activities in the private sector. The City's enterprise funds are examples of
proprietary funds.
The City Council adopts the annual budget and may amend or revise it at any
time at a properly noticed meeting. Budgetary control is at the department level
within each fund. A Department Head, with the Finance Officer's approval, may
transfer funds within like categories of the same department. The City
Administrator must approve changes to capital outlay requests. The City
utilizes an encumbrance system as a management control technique.
Encumbrances are holds placed on funds for orders or contracts for goods or
services anticipated but not completed or received. The City reports these as
reservations of fund balance in governmental funds.
The City's financial activity is recorded in different funds and account groups
depending on the type of financial activity. The following are the types of funds
used to manage the City's financial activity:
Governmental Funds
General Fund
Special Revenue Funds
Debt Service Funds
Capital Projects Funds
Proprietary Funds
Enterprise Funds
Internal Service Funds
Trust & Agency Funds
CAFR Transmittal Letter VIII 4/1/2002 1:02 PM
i
Ak
In addition, information is provided for the following:
Pension Obligations
Long-Term Debt
Cash Management
Risk Management
Below is significant summary information about the City's financial condition as
of September 30, 2001:
Governmental Funds
These funds record the financial activity of general governmental activities
generally financed through taxes and inter-governmental grants. The
governmental funds the City uses are:
• General Fund - Accounts for all financial activity not required to be
accounted for in another fund.
• Special Revenue Funds - Accounts for the receipt and expenditure of
monies legally restricted to a specific use.
• Debt Service Funds - Accounts for the receipt and disbursement of
monies used for the payment of general and redevelopment long-term
principal and interest.
• Capital Projects Funds - Accounts for monies used for the acquisition
and construction of major capital facilities.
CAFR Transmittal Letter ix 4/1/2002 1:02 PM
r
�' .
Genera! Fund Revenue: Below is a table analyzing major changes (greater than
5% and $500,000) by revenue source:
Increase Percent
Revenue Source eee ee Percent D-
($ inthousands) Amount Total from . . . ee (Decrease)
Property Taxes $ 30,738 23.9% $ 1,176 3.7%)
Other Taxes 56,705 44.2 7,138 14.4
Licenses and Permits 5,896 4.6 (719) 10.9
Fines and Forfeitures 4,092 3.2 74 1.8
From Use of Money
and Property 7,333 5.7 1,100 13.0
From Other Agencies 13,571 10.6 (2,521) (13.7
i
Charges for Current
Service j 9,654 7.5 j 630 6.8
Other 361 1 0.3 586 I 61.9
Total $ 128,067 100% $ 1,740 1 1.4
The decrease in Property Taxes was due to the impounding of supplemental
property tax revenue that had been allocated toward the City's employee
retirement obligations. The increase in Other Taxes was due to increased
energy rates, which created a corresponding increase in Utility Users Tax
revenue. The Licenses and Permits decrease was due to decreased residential
construction activity. Revenue from Use of Money and Property decreased due
to closed concessions from construction activity on the beach. Revenue from
Other Agencies decreased due to one-time reimbursements from the State of
California, which were realized in the 1999/2000 fiscal year. Charges for Current
Service increased due to increased recreation programming. Total General
Fund revenue, including one-time revenue increased $1,740,000 or 1.4% overall.
CAFR Transmittal Letter X 4/1/2002 1:02 PM
I ,
II %
General Fund Expenditures: Total General Fund expenditures increased
$4,276,000 or 3.6% overall. Below is a table analyzing major changes (greater
than 5% and $500,000) by department:
Increase Percent
ExpendituresIIA 11 of D-
thousands) • • from • • • 1 1 -
City Council ! $ 231 0.2% $ (46) (19.9%
City Administrator j 1,456 1.2 133 9.1
City Treasurer 916 0.7 32 3.5
City Attorney 2,458 2.0 686 1 27.9
City Clerk j 559 0.5 j 108 19.3
Administrative Services 3,874 3.2 349 9.0
Planning 2,201 1.8 ! 32 N/A
Building 2,589 2.1 205 N/A
Fire 1 18,085 j 14.8 723 4.0
Information Systems 1 2,814 2.3 2,814 j N/A
Police 37,812 1 31.0 2,648 7.0
Community Services 9,906 8.1 ! 800 8.1
i
Library Services 3,641 3.0 323 8.9
Public Works 20,973 j 17.2 1,427 6.8
Non-Departmental 12,724 10.4 25256 17.7
Capital Outla 1,900 1.6 3 2.1
Debt Service - 0.0 845 N/A
TOTAL $ 122,139 100% $ 4,276 i 3.6%
Police Department expenditures increased largely due to salary increases that
went into effect during the 2000/2001 fiscal year. Non-Departmental
expenditures decreased and Information Systems expenditures increased
because Information Systems expenditures were included in the Non-
Departmental budget prior to the 2000/2001 fiscal year. Public Works
expenditures decreased primarily due to beach closure expenditures that
occurred primarily in fiscal year 1999/2000. City Attorney expenditures
increased due to the cost of outside legal firms. Community Services
expenditures increased due to increased special event activity and contract
classes that were offset by additional revenue.
CAFR Transmittal Letter Xi 4/1/2002 1:02 PM
r
1
General 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, and land held for resale. Examples of
Unreserved/Designated fund equity include amounts designated for future
expenditures and the reserve for economic uncertainties. The reserve for
economic uncertainties is the 7% General Fund Reserve established by the
City's financial policies. 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
Reserved $ 26,115 $ 23,677 9%
Unreserved/Designated 17,618 11,129 37%)
Unreserved/Undesi nated i — 623 :. N/A
TOTAL $ 43,733 $ 35,429 (19%)
Proprietary Funds
Proprietary Funds record activities that are similar to activities in the private
sector. The proprietary funds the City uses are:
• Enterprise Funds — Accounts 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.
Enterprise funds are supported by revenue generated from user
charges to the general public.
• Internal Service Funds — Accounts for goods and services provided one
department of the City to another on a cost-reimbursement basis.
Internal Service Funds are supported by user charges to different
departments of the City.
CAFR Transmittal Letter XII 4/1/2002 1:02 PM
i
i
1 '
Enterprise Funds: The City currently has seven Enterprise Funds. The largest
of these funds is the Water Utility fund. Below is a summary net income (loss)
of these funds (in thousands):
ENTERPRISE FUNDS • • • / 11 111 11
Water Utility $ 1,965 $ 9,113
Emerald Cove Housing1 228 14�
Emergency Fire Medical I 238 20
Refuse Collection 712 828
HazMat Service 43 65
Cultural Affairs 515 114
Ocean View Estates — 3,659 j
The net income of the Water Utility Fund Is inflated this year due to new
accounting standards requiring that contributed capital, assets deeded to the
city by developers or cash paid to fund additional capacity, be reported as a
part of net income. Staff will review the Refuse, Emergency Fire Medical
(FireMed), and Emerald Cove revenue schedules to determine an appropriate
recommendation to bring to the City Council to address the net loss reflected
in this report.
Internal Service Funds: The City currently has five internal service funds.
Below is a summary net income (loss) of these funds (in thousands):
INTERNAL SERVICE FUNDS • • • 111 1 / 1 11
Health Insurance Reserve $ 972 $ 1,173
Workers' Compensation Reserve 518 2
Liability Insurance Reserve 634) 984
Public Financing Authority 3,905 53
Equipment Replacement 65 ! 7,607
The City's insurance funds are well on their way back to financial health.
Overall, Health Insurance and Workers' Compensation have net income
compared with prior years. The net loss in the Liability Insurance Reserve fund
is a conservative estimate of potential liability claims. Next year, the Liability
and Equipment Replacement funds will be designated as governmental
operations to more accurately reflect Governmental Accounting Standards
Board decision number thirty-four, commonly referred to as GASB 34. The net
income of the Equipment Replacement fund is inflated this year due to new
CAFR Transmittal Letter XIII 4/1/2002 1:02 PM
i
1 '
accounting standards requiring that contributed capital be reported as a part of
net income similar to the Water Utility fund.
Proprietary Funds Equity Fund equity is the net worth of a particular fund.
Below is a schedule of the City's fund equity in the Enterprise and Internal
Service Funds (in thousands):
Percent
Total Equity Total Equity Increase
INSURANCE FUNDS • • • eee eee ee (Decrease)
Contributed Capital $ 49,621 $ 46,884
Retained Earnings 50,603 73,9491 46.1
TOTAL 8 100,224 $ 120,883 j 20.6%
Trust & 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 $5,980,000 largely because the City recorded in an agency
fund supplemental property taxes received but placed on hold pending appeal
of the Howard Jarvis vs. City of Huntington Beach lawsuit.
Pension Obligations
The City participates in the California Public Employee's Retirement System
(CaIPERS). At June 30, 2000, the City's future total pension obligation for all
current and retired employees was $408,674,000 and assets available for these
obligations were 8521,545,000 leaving a surplus of $112,871,000. The City
currently maintains "excess funds" for safety retirement programs and is
"superfunded" for miscellaneous retirement programs through CalPERS.
The City also maintains a supplemental retirement plan. An independent
actuary completed a study of this plan for the year. The annual pension cost
for this plan was $4,282,000, while the City contributed $1,718,000. The
unfunded liability for this plan was $29,775,000.
CAFR Transmittal Letter Xlv 4/1/2002 1:02 PM
/ 1I
1
Long-Term Debt
Long-Term debt represents resources used to pay the principal and interest on
long-term. The City's outstanding long-term debt at year-end was (in
thousands):
Bonds and Certificates of Participation:
Reservoir Hill Assessment District Bonds $ 605 j
Public Financing Authority j 76,240
Redevelopment Agency 9,770
Civic Improvement Corporation j 29,750
Notes Payable:
Energy Conservation 123
Section 108 Loan 4,756
Redevelopment Agency 8,475
Other Debt:
Self-Insurance Claims ! 10,177
Compensated Absences 7,134
Leases 2,438
Pension Obligation 8,337
Leases 2,438
Advances to Other Funds (Redevelopment Agency) 57,755
The City's legal debt limitation for general obligation bonds is 12% of the total
of assessed valuation in the city, which is $15,877,065,000. The City currently
has no general obligation bonds outstanding so the legal debt margin is over
$1.9 billion.
All bonded debt has been incurred by the Huntington Beach Public Financing
Authority, the Huntington Beach Civic Improvement Corporation,
Redevelopment Agency of the City of Huntington Beach, or the Reservoir Hill
Assessment District.
CAFR Transmittal Letter XV 4/1/2002 1:02 PM
`I
Cash Management
The City Treasurer invests surplus cash in authorized investments allowed by
government code and City policy. The City forecasts revenues and
expenditures to ensure enough available cash to meet current obligations and
to maximize interest income. During 2000/2001, the investment of non-
restricted cash and investments yielded interest of $6,930,453 or 5.95% return.
The California Government Code requires the City Treasurer to prepare an
annual statement of investment policy. 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
over a certain amount.
Other Information
Single Audits: 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 these audits are
available from this office.
These reports include the financial activity of separate legal entities whose
activities the City controls. These entities are:
• 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.
CAFR Transmittal Letter XVI 4/1/2002 1:02 PM
r
Future Financial Reporting Changes: Beginning in fiscal year 2001/2002, the
City will begin reporting its financial activities under new requirements
prescribed by Government Accounting Standards Board Statement 34
(GASB 34). These new requirements will for the first time require the City to
account for the acquisition of, and depreciation on, infrastructure. It will also
require the City to prepare financial statements similar to private businesses.
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 for its
September 30, 2000 report. The GFOA awards the certificate to governmental
agencies whose reports conform to high standards of public financial
reporting. The City has received this certificate for fifteen (15) consecutive
years and plans on submitting this report for another award. This certificate is
valid for one year only.
Acknowledgements: 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, and Shari Donoho, Administrative Assistant, for her graphic
art design work, on this report.
Sincerely,
Vag 7, j?U&&
Dan T. Villella
Finance Officer
C&Iy, /tla't-'t4v
Clay Martin
Director of Administrative Services
CAFR Transmittal Letter XVII 4/1/2002 1:02 PM
CITY OF HUNTINGTON BEACH
THE�PEOPLE` ..
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CITY�CLERK p
Conme Brockwa
CITY COUNCIL
Records Division Mayor Debbie Cook CITY CITY, z
��TREASURER $� �ATTORNEY
Elections Mayor Pro Tem Ralph Bauert
Passport Services
Council Members'Boardman, Dettloff,Green, Houchen,Winchell Shari L''Freidennch Gail Hutton
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x CITY Investments
fi ADMINISTRATOR
OROMIZATIOML ADMINISTRATNE SERVICES COMMUNICATIONS AND Ray$IIVBf. Business license
EFFECT ClpyYaMrm SPECIAL PROJECTS,
Pete Grairt Richard Bernard ,'.
fl"a"C° ASSISTANT"CITY Accounts Receivable
Dan Vinous
Risk Management Public Information a ADMINISTRATOR
Kam Fester ;WIIIIam.Wo"an - ," Municipal services
Central Services HBTV 3 Billing/
Rick Amadril Central Cashiering
Human Resources
t Vacant
• Special
Real Property
Projects
Vacant
W Employee Benefits
Sharon Henn en
PLIWNINO BUILDING b l CONOYIC PUBLIC WORKS COMMUNItY SERVICES LIBRARY SERVICES; x <.POLICE
Howud Zalets SAFETY- DEVELOPMENT: Robert F.Beardsley g Ron Ha an Ron Hayden Mfdiael P. er_ Ron Lorrerm
g
Ross.Crannrer81ggs
Planning DeputyOperations Fire Prevention
Director Beaches,Recreation OP Uniform Division
Manager Paul E Jan Halvorsam Chuck Bumey
Scott Hens Permit b Plan Redevelopment b y b Facilities Development Captain Bill MamelO
Check Services Housing Jim Engle
Gerald Ceralg Gus Duran Engineering Sherrie 0 ch DuanOperations
0 son istration Dhision
Curtest Dave Webb Human Services b Captain Jim Cut°hm
Plannts8 Inspection Business Recreation Childrens 1 Media Emerges-Services
Herb Fauland Services Devdopmermt Water Operations Bill Fosmler Nan Williams Jacpue Pelletler investigation Division
601 Grove Jim Lamb Vacant Technical Services Captain Ed McErlain
Advanced Cultural,Historic Roger Hiles Telecommunications
Planning b Event Services Information Systems Cheri White Special Operations
Park Tree b Michael Mudd
Mary Beth Cam Ha Division
Broeren Landscape Information Systems Cs in Jon Arnold
John Van Oeffelen Vacant
Neighborhood
Preservation Transportation
801 Zylla Bob StsmdmelaW
Maintenance
03/11/02 Jim Jones
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.40 ell
City Council
Debbie Cook, Mayor
Ralph Bauer, Mayor Pro Tem
Connie Boardman, Council Member
Shirley Dettloff, Council Member
Peter Green, Council Member
Pam Houchen, Council Member
Grace Winchell, Council Member
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
Rich Barnard, Director of Communications
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, Director of Library Services
Ron Lowenberg, Chief of Police
Clay Martin, Director of Administrative Services
Howard Zelefsky, Planning Director
XIX
Certificate' of
Achieveme nt = a
- f or : Excellen ce
in: Financial
Reportinq
Presented to
City of Huntington Beach,
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30; 2000
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.: .
,3 �JIDA
GUM dent
COMM r
. - off• G�� .
Executive Director
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DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS& CONSULTANTS
• MICHAEL R.LUDIN,CPA
CRAA PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS NITIN W. TEL,SPR CPA CPA
NITIN P.PATEL,CPA
2121 ALTON PARKWAY,SUITE 100 PHILIPROBER H.
OLT ANAN,CPA
•PHILIP H.HOLTKAMP,CPA
IRVINE,CALIFORNIA 926064906 -THOMAS M.PERLOWSKI,CPA
-HARVEY J.SCHROEDER,CPA
(949)399-0600•FAX(949)399-0610 MICHAEL C.FRIEDMAN.CPA
www.diehlevans.com March 6,2002 -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 30,2001 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 auditing standards generally accepted in the United States
of America 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, 2001
and the results of its operations and cash flows of its proprietary fund types for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 6,
2002 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 -
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--pose of forming an opinion on the get,,.al 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.
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CITY OF HUNTINGTON BEACH
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2000
(IN THOUSANDS)
GOVERNMENTAL FUNDS
Special
ASSETS AND OTHER DEBITS General Revenue Debt Service Capital Projects
Cash and Investments(Note 3) $ 3,186 $ 25,207 $ 2,476 $ 12,064
Cash With Fiscal Agent(Note 3) - - 10,082 34,728
Taxes Receivable 15,344 409 1,594 43
Other Receivables 1,571 7,870 206 4,433
Unbilled Receivables 767 - - -
Inventory 760 - - -
Due from Other Funds(Note 10) 3,299 - - -
Deposits and Other Assets 138 2,172 - -
Advances to Other Funds(Note 10) 27,112 6,736 18,468 2,541
Investment in Joint Venture(Note 18) - - - -
Land Held for Resale - - - 91139
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 $ 52,177 $ 42,394 $ 32,826 $ 62,948
LIABILITIES,FUND EQUITY AND OTHER CREDITS
LIABILITIES:
Accounts Payable $ 3,084 $ 2,574 $ 376 $ 2,769
Other Accrued Liabilities 3,349 104 - 29
Deposits 972 - 161 154
Leases Payable(Note 13) - - - -
Due to Other Funds(Note 10) - 206 42 608
Tax and Revenue Anticipation Notes - - - -
Interest Payable on Tax and Revenue Anticipation Notes - - - -
Advances from Other Funds(Notes 10,12,and 13) - - - -
Claims Payable (Note 9) - - - -
Deferred Revenue(Note 5) 9,354 11,328 810 2,067
Long-Term Debt(Note 12) - - - -
Compensated Absences(12 and 13) - - - -
TOTAL LIABILITIES 16,759 14,212 1,389 5,627
FUND EQUITY AND OTHER CREDITS:
Contributed Capital(note 11) - - - -
Investment in General Fixed Assets - - - -
Retained Earnings(Accumulated Deficits)(notes 16 and 19):
Reserved - - - -
Unreserved - - - -
Fund Balances (Notes 16 and 19):
Reserved 23,677 6,484 18,468 49,423
Unreserved:
Designated 11,129 11,876 - 3,957
Undesignated 612 9,822 12,969 3,941
TOTAL FUND EQUITY AND OTHER CREDITS 35,418 28,182 31,437 57,321
TOTAL FUND EQUITY,LIABILITIES,AND OTHER CREDITS $ 52,177 S 42,394 $ 32,826 $ 62,948
See Independent Auditors'Report and Notes to General Purpose Financial Statements 3
FIDUCIARY FUND
PROPRIETARY FUNDS TYPES ACCOUNT GROUPS Memorandum On
General Fixed General Long-Term
Enterprise Internal Service Trust and Agency Assets Debt Account Group Totals 2001 1 Totals 2000
$ 43,048 $ 15,096 $ 15,185 $ - $ - $ 116,262 $ 125.295
- 1,225 873 - - 46,908 17,110
- - - - - 17,390 19,724
3,479 551 532 - - 18,642 19,342
5,230 - - - - 5,997 5,427
1,104 - - - - 1,864 1,543
- - - - - 3,299 1,330
- 1,393 124 - - 3,827 4,018
2,894 - - - - 57,751 57,049
- - - 328 - 328 365
- - - - - 9,139 15,401
48,783 20,393 - - - 69,176 56,073
- - - 146,457 - 146,457 152,324
- 12,969 12,969 19,485
- - - - 191,596 191,596 161,329
$ 104,538 $ 38,658 $ 16,714 $ 146,785 $ 204,565 $ 701,605 $ 655,815
$ 3,950 $ 495 $ 86 $ - $ - $ 13,334 $ 7,069
221 433 - - - 4,136 3,551
1,531 - 9,538 - - 12,356 10,362
431 1,884 - - - 2,315 1,563
1,069 1,374 - - - 3,299 1,330
- - - - - 16,400
- - - - - - 702
244 - - - 57,507 57,751 57,049
- 10,177 - - - 10,177 9,743
- - - - 23,559 17,365
- - - - 138,983 138,983 117,874
472 82 - - 8,075 8,629 6,592
7,918 14,445 9,624 204,565 274,539 249,600
43,069 3,815 - - - 46,884 49,621
- - - 146,785 - 146,785 152,689
1,228 - - - 1,228 1,175
53,551 19,170 - - - 72,721 50,603
- - 7,090 - - 105,142 103,612
- - - 26,962 24,896
- - - - - 27,344 23,619
96,620 24,213 7,090 146,785 - 427,066 406,215
$ 104,538 $ 38,658 $ 16,714 $ 146,785 $ 204,565 S 701,605 $ 655,815
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, 2001
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30, 2000
(IN THOUSANDS)
Special Revenue Debt Service Capital Projects
REVENUES: General Fund Funds Funds Funds
Property Taxes $ 30,738 $ - $ 6,122 $ -
Other Taxes 56,705 2,723 - 795
Licenses and Permits 5,896 915 - 91
Fines,Forfeitures and Penalties 4,092 - - -
From Use of Money and Property 7,333 2,229 3,749 2,460
From Other Agencies 13,571 15,837 - 2,226
Charges for Current Service 9,654 430 - 375
Other 361 450 - ' 880
TOTAL REVENUES 128,350 22,584 9,871 6,827
EXPENDITURES:
Current:
City Council 231 - -City Administrator 1,456 320 - -
City Treasurer 916 - - -
City Attorney 2,458 - - 485
City Clerk 559 - - -
Administrative Services 3,874 - - - Y
Planning 2,201 128 - -
Building 2,589 - - -
Fire 18,085 57 - -
Information Systems 2,814 - -
Police 37,812 1,269 - -
Economic Development - 898 - 1,918
Community Services 9,906 1,373 - 116
Library Services 3,641 267 - 357
Public Works 20,973 2,710 - 1,187
Non-Departmental 12,724 223 145 2,206
Capital Outlay 1,900 14,581 - 17,194
Debt Service(Note 12):
Principal - 130 11,460 294
Interest - 104 15,774 326
TOTAL EXPENDITURES 122,139 22,060 27,379 24,083
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 6,211 524 (17,508) (17,266)
OTHER FINANCING SOURCES(USES):
Operating Transfers In(Note 10) 2,587 6,306 6,020 6,354
Proceeds of Long-Term Debt(Note 12) - 28 6,295 31,624
Payments to Refunding Escrow - - - -
Operating Transfers Out(Note 10) (14,063) (2,784) (1,304) (3,757)
TOTAL OTHER FINANCING SOURCES(USES) (11,476) 3,650 11,011 34,221
EXCESS OF REVENUE AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES (5,265) 4,074 (6,497) 16,965
FUND BALANCE-BEGINNING OF YEAR 43,733 24,108 38,379 40,466
Prior Period Adjustments(Note 19c) (3,050) - (445) (110)
FUND BALANCE AS RESTATED 40,683 24,108 37,934 40,366
FUND BALANCE-END OF YEAR $ 35,418 $ 28,182 $ 31,437 $ 67,321
See Independent Auditors'Report and Notes to General Purpose Financial Statements 5
Fiduciary Fund
Types Totals(Memorandum Only)
Expendable
Trust 2001 2000
$ - $ 36,860 $ 37,645
60,223 52,194
6,902 8,538
4,092 4,018
41 15,812 14,603
- 31,634 32,021
10,459 10,077
- 1,691 9,603
41 167,673 168,699
- 231 277
- 1,776 1,799
- 916 884
- 2,943 2,227
- 559 451
- 3,874 3,559
- 2,329 2,180
- 2,589 2,384
- 18,142 17,471
- 2,814 -
- 39,081 36,140
- 2,816 6,749
- 11,395 9,815
- 4,265 3,984
- 24,870 25,263
- 15,298 18,572
12 33,687 18,740
- 11,884 6,333
16,204 14,964
12 195,673 171,792
29 (28,000) (3,093)
- 21,267 30,529
37,947 34,683
- (4,573)
(21,908) (32,959)
37,306 27,680
29 9,306 24,587
298 146,984 122,397
- (3,605) -
298 143,379 122,397
$ 327 $ 152,686 $ 146,984
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 30,2001
(IN THOUSANDS)
GENERALFUND SPEMALREVENUEFUNDS
REVENUES: Budget Ac ua1 Variance Budget Actual Variance
Property Taxes S 34,044 $ 30.738 S (3,306) S - S - $
Other Taxes 52,071 56,705 4.634 2,047 2,723 676
Licenses and Permits 6,332 5,896 (436) 350 915 565
Fines,Forfeitures and Penalties 3,730 4.092 362 - - (14,80-
From Use of Money and Property 14,147 7,333 (6,614) 17,033 2,229 4)
From Other Agencies 11,726 13,571 1.845 17.599 15.837 (1,762)
Charges for Current Service 8,972 9,654 682 196 430 234
Other 440 361 (79) 205 450 245
TOTAL REVENUES 131,462 128,350 (3,112) 37,430 22,584 (14,849)
EXPENDITURES:
Current
City Council 259 231 28 - -
City Administrator 1,624 1,456 168 381 320 61
City Treasurer 1,048 916 132 -
City Attorney 2,518 2,468 60
City Clerk 628 5S9 69
Administrative Services 4,018 3,874 144 - - -
Planning 3,395 2,201 1,194 139 128 11
Building 2.718 2.689 129 -
Fire 18,454 18,085 369 62 57 5
Information Systems 3.197 2.814 383 - - -
Police 37,856 37,812 44 1,795 1,269 526
Community Services 10,025 9.906 119 2.075 1,373 702
Library Services 3.772 3,641 131 289 267 22
Public Works 22,944 20.973 1,971 8,205 2,710 5,495
Non-Departmental 11.508 12,724 (1,216) 262 223 39
Capital Outlay 4.296 1,900 2,396 33.817 14,581 19,236
Debt Service:
Principal - 70 130 (60)
Interest e74 974 180 104 76
TOTAL EXPENDITURES 129,134 122,139 6,995 48,353 22,060 26,293
EXCESS OF REVENUES OVER(UNDER)
EXPENDITURES Z328 6,211 3,883 (10,923) 524 11,447
OTHER FINANCING SOURCES(USES):
Operating Transfers In 2,857 2,587 (270) 5.074 6.306 1,232
Operating Transfers Out (10,491) (14,063) (3,572) (2,837) (2,784) 53
TOTAL OTHER FINANCING SOURCES(USES) (7,634) (11,476) (3,842) 2,237 3,550 1,313
EXCESS OF REVENUE AND OTHER
SOURCES OVER(UNDER)EXPENDITURES
AND OTHER USES 15,306) (5,265) 41 (8,88e) 4,074 1$782
FUND BALANCE-BEGINNING OF YEAR 43,733 43,733 24,108 24,108 -
Prior Period Adjustments(Note 19c) (3,050) (3,050) -
FUND BALANCE AS RESTATED 40,883 40,683 24,108 24,108
FUND BALANCE-END OF YEAR t 35,377 S 35,416 S 41 S 15,422 S 28,162 S 12,782
See Independent Auditors'Report and Notes to General Purpose Financial Statements 7
DEBT SERVICE FUNDS TOTALS(MEMORANDUM ONLY)
REVENUES: Buapet Actual variance Budget Actual variance
Property Taxes S 5,958 S 6,122 S 166 S 40,000 S 36,860 S (3,140)
Other Taxes - - 64,118 59,428 5,310
Licenses and Permits - 6,682 6,811 129
Fines,Forfeitures and Penalties - - 3,730 4,092 362
From Use of Money and Property 569 3,749 3,180 31,749 13,311 (18,438)
From Other Agencies 9 (9) 29,334 29,408 74
Charges for Current Service - - 9,168 10,084 916
Other 645 811 166
TOTAL REVENUES 6,534 9,871 3,337 175,426 160,805 (14,621)
EXPENDITURES:
Current:
City Council 259 231`; 28
City Administrator 2,005 1,776 229
City Treasurer 1,048 916 132
City Attorney 2,518 2,458 60
City Clerk 628 559 69
Administrative Services 4,018 3,874 144
Planning 3,534 2,329 1,205
Building 2,718 2,589 129
Fire 18,516 18,142 374
Information Systems 3,197 2,814 383 -
Police - - 39,661 39.081 670
Community Services - - - 12,100 11,279 821
Library Services 4,061 3,908 153
Public Works - 31,149 23,683 7,466
Non-Departmental 218 145 73 11,988 13,092 (1,104)
Capital Outlay - - 38,113 16,481 21,632
Debt Service:
Principal 2,850 11,460 (8,610) 2,920 11,590 (8,670)
Interest 14,892 15,774 (882) 15,946 15,878 68
TOTAL EXPENDITURES 17,960 27,379 (9,419) 195,447 171,578 23,869
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (11,426) (17,608) (6,082) (20,021) (10,773) 9,248
OTHER FINANCING SOURCES(USES):
Operating Transfers In 6,862 6,020 (842) 14,793 14,913 120
Operating Transfers Out (918) (1,304) (386) (14,246) (18,151) (3,905)
TOTAL OTHER FINANCING SOURCES(USES) 5,944 11,011 5,067 547 3,085 2,538
EXCESS OF REVENUE AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES (5,482) (6,497) (1,015) (19,474) (7,685) 11,608
FUND BALANCE-BEGINNING OF YEAR 38,373 38,379 6 106,214 106,220 9
Prior Period Adjustments(Note 19c) (445) (445) - (3,495) (3,495)
FUND BALANCE AS RESTATED 37,928 37,9u 6 102,719 102,725 6
FUND BALANCE-END OF YEAR S 32,446 S 31,437 S (1.009) S 83,245 S 95,037 s 11,814
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, 2001
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30, 2000
(IN THOUSANDS)
Memorandum On
OPERATING REVENUES: Enterprise Internal Service Total 2001 1 Tota12000
Sales $ 22,010 $ - $ 22,010 $ 21,913
Rentals 671 - 671 654
Fees for Service 12,474 16,165 28,639 26,268
Other 1,557 86 1,643 1,545
TOTAL OPERATING REVENUES 36,712 16,251 52,963 50,380
OPERATING EXPENSES:
Water Purchases 9,098 - 9,098 4,541
Supplies and Operations 18,276 3,157 21,433 19,199
Engineering 2,187 - 2,187 837
Production 2,603 - 2,603,." 4,833
Maintenance 1,576 - 1,576 4,096
Water Quality 325 - 325 291
In-Lieu Taxes to General Fund 4,242 - 4,242 4,102
Claims and Insurance - 10,121 10,121 8,008
Depreciation 1,870 3,518 5,388 4,737
TOTAL OPERATING EXPENSES 40,177 16,796 56,973 50,644
OPERATING INCOME(LOSS) (3,465) (545) (4,010) (264)
NON-OPERATING REVENUES(EXPENSES)
Interest Income 3,859 1,023 4,882 2,826
Joint Venture Income - - - -
Capital Contributions 11,982 6,643 18,625 2,025
Interest Expense - (107) (107) (490)
Gain(Loss)on Sale of Assets - (221) (221) -
Joint Venture - - - 56
TOTAL NON-OPERATING REVENUES(EXPENSES) 15,841 7,338 23,179 4,417
NET INCOME(LOSS)BEFORE OPERATING TRANSFERS 12,376 6,793 19,169 4,153
OPERATING TRANSFERS IN(OUT)(NOTE 10)
Operating Transfers In 130 1,068 1,198 3,407
Operating Transfers Out (547) (10) (557) (977)
TOTAL OPERATING TRANSFERS IN(OUT) _ (417) 1,058 "1 2,430
NET INCOME BEFORE ADDBACK OF DEPRECIATION 11,959 7,851 19,810 6,583
Depreciation on Donated Assets 980 1,034 2,014 2,344
NET INCOME(LOSS) 12,939 8,885 21,824 8,927
RETAINED EARNINGS-BEGINNING OF YEAR 40,950 10,828 52,803 43,876
Prior Period Adjustment(Note 19c) (338) 685 347 -
RETAINED EARNINGS-BEGINNING OF YEAR AS RESTATED 40,612 11,513 52,125 43,876
RETAINED EARNINGS -END OF YEAR $ 53,551 $ 20,398 $ 73,949 $ 52,803
See Independent Auditors'Report and Notes to General Purpose Financial Statements 9
CITY OF HUNTINGTON BEACH
COMBINED STATEMENT OF CASH FLOWS
ALL PROPRIETARY FUND TYPES
FOR THE YEAR ENDED SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30, 2000
(IN THOUSANDS)
Memorandum Only
CASH FLOWS FROM OPERATING ACTIVITIES: Enterprise Internal Service Total toot 1 Total 2000
OPERATING INCOME(LOSS) $ (3,465) $ (545) $ (4,010) $ (264)
Adjustments Required to Reconcile Operating Income(Loss)to Net Cash
Provided (Used)by Operating Activities:
Depreciation 1,870 3,518 5,388 4,737
Decrease(Increase)in Accounts Receivable 312 (334) (22) (669)
Decrease(Increase)in Interest Receivable 7 - 7 (491)
Decrease(Increase)in Prepaid Insurance - (151) (151) (557)
Decrease(Increase)in Unbilled Receivable (495) - (495) (579)
Decrease(Increase)in Advance to Other Funds (159) - (159) 3,793
Decrease(Increase in Due from Other Funds - - 2,166
Decrease(Increase)in Inventory (192) - (192) (20)
Increase(Decrease)in Accounts Payable 1,995 285 2,280 (1,222)
Increase(Decrease)in Accrued Payroll 11 (400) (389) 417
Increase(Decrease)in Interest Payable - 398 398 (3)
Increase(Decrease)in Leases Payable (3) - (3) (66)
Increase(Decrease)in Claims Payable - 434 434 (239)
Increase(Decrease)in Amount Due to Other Funds 246 1,374 1,620 (1,665)
Increase(Decrease)in Deposits (21) - (21) (106)
Increase(Decrease)in Compensated Absences 73 25 98 71' -
TOTAL ADJUSTMENTS 3,644 5,149 8,793 5,567 %
NET CASH PROVIDED BY OPERATING ACTIVITIES 179 4,604 4,783 5,303
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Operating Transfers In From Other Funds 130 1,068 1,198 3,407
Operating Transfers Out to Other Funds (547) (10) (557) (977)
TOTAL CASH FLOWS PROVIDED(USED)FROM NON-CAPITAL
FINANCING ACTIVITIES (417) 1,058 641 2,430
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
Contributions 8,779 - 8,779 11,585
Interest Paid - (107) (107) (489)
Acquisition and Construction of Capital Assets (7,047) (833) (7,880) (2,694)
Proceeds of Sale of Plant,Property and Equipment - 102 102 102
Principal Paid on Long-Term Debt - (697) (697) (5,839)
TOTAL CASH PROVIDED(USED)FOR CAPITAL AND RELATED
FINANCING ACTIVITIES 1,732 (1,535) 197 2,665
CASH FLOWS FROM INVESTING ACTIVITIES:
Joint Venture Cash Received(Paid) - - 56 56
Proceeds of Bankruptcy Settlements - - - 2,025
Interest on Investments 3,859 1,023 4,882 2,826
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES 3,859 1,023 4,938 4,907
NET INCREASE IN CASH AND CASH EQUIVALENTS 5,353 5,150 10,559 15,305
CASH AND CASH EQUIVALENTS,BEGINNING OF YEAR 37,695 11,171 34,415 19,110
CASH AND CASH EQUIVALENTS,END OF YEAR $ 43,048 $ 16,321 $ 44,974 $ 34,415
NON-CASH ACTIVITIES:
Plant,Property,and Equipment Contributions/Transfers $ - $ 6,643 $ 6,643 $ 713
Acquisition of Asset Through Capital Lease $ - $ 1,006 $ 1,006 $ 614
See Independent Auditors'Report and Notes to General Purpose Financial Statements 10
CITY OF HUNTINGTON BEACH
STATEMENT OF CHANGES IN PLAN ASSETS
PENSION TRUST FUND
FOR THE YEAR ENDING SEPTEMBER 30, 2001
WITH COMPARATIVE TOTALS FOR
SEPTEMBER 30, 2001
(IN THOUSANDS)
Additions: 2001 2000
Employer Contributions $ 2,268 $ 1,702
Interest Income 475,;: 281
Total Additions 2,743 1,983
Deductions:
Benefits 1,127 934
Administration 9 21
Total Deductions 1,136 955
Net Increase in Plan Assets 1,607 1,028
Fund Balance -Beginning of Year 5,156 4,128
Fund Balance -Reserved for Employee Pension
Benefits $ 6,763 $ 5,156
See Independent Auditors' Report and Notes to General Purrpose Financial Statements 11
.,)(Z�? I,'T
�_9 V'Invitt'r-d
1 Summary of Significant Accounting Policies
2. Reporting Entity
3. Cash and Investments
4. Deferred Compensation
5. Deferred Revenue
6. Retirement Plan — Normal
7. Retirement Plan — Supplemental
8. Post Employment Medical Insurance
9. Risk Management
10. Interfund Transactions
11 . Proprietary Fund Segment Information
12. General Long-Term Debt
13. Proprietary Fund Long-Term Debt
14. Long-Term Debt Not Recorded in Financial
Statements
15. Fixed Assets and Capital Leases
16. Reserves and Designations of Fund Equity
17, Commitments and Contingencies
18. Joint Ventures -
19. Other Information
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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:
• 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, 2001
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 acdrual 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.
See Independent Auditors' Report 13
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
c. Measurement Focus:
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.
d. Budgetary Information:
The City Council must annually adopt a budget by September 30 of the priorfiscal 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.
See Independent Auditors' Report 14
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
d. Budgetary Information:
These financial statements show budgetary data for the General, Special Revenue and
Debt Service Funds. They do not show budgetary information for the Capital Projects
Funds since these are budgeted on a long-term project-by-project basis.
The City uses an encumbrance system as an aid in controlling expenditures. When the
City issues a purchase order for goods or services, it records an encumbrance until the
vendor delivers the goods or performs the service. At year-end, the City reports all
outstanding encumbrances as reservations of fund balance in governmental fund types.
The City reapproprates these encumbrances into the new fiscal year.
e. Investments:
The City records investments at fair value.
f. Property and Equipment:
i
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
See Independent Auditors' Report 15
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
f. Property and Equipment:
Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The
amount of interest to be capitalized is calculated by offsetting interest expense incurred
from the date of borrowing until completion of the project with interest earned on the
invested proceeds over the same period.
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,
amounts due to or from other funds and amounts advanced to or from other 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.
See Independent Auditors' Report 16
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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.
The City also records, as a liability in the General Long-Term Debt Account Group, the
difference between the annual required contribution on a defined benefit pension plan
recorded in a pension trust fund, and the contributions made to that plan for the years in
which there was an actuarial study performed. This is in accordance -with GASB
Statement 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.
See Independent Auditors' Report 17
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
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.
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 prior for assets acquired prior to
implementation of GASB 33.This depreciation add back 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.
1. 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. Deferred property tax revenue
represents property taxes related to the current fiscal year which are collected more than
60 days after the fiscal year end.
See Independent Auditors' Report 18
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
I. Property Tax Revenue:
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 '
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).
See Independent Auditors' Report 19
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
p. Joint Ventures:
The 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).
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
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.
See Independent Auditors' Report 20
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
2. REPORTING ENTITY (CONTINUED):
• 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.
• 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 Authority (Public Financing Authority)—This
corporation was formed in March, 1988 to issue debt to finance public improvements
and other capital purchases for the City and Redevelopment Agency. The Public
Financing Authority's governing body is the City Council,which also adopts the annual
budget. The Public Financing Authority is financially dependent on the City. 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.
See Independent Auditors' Report 21
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
2. REPORTING ENTITY( CONTINUED):
• The City of Huntington Beach Community Facilities District 1990-1 and 2000-1
(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.
• 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.
See Independent Auditors' Report 22
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
3. CASH AND INVESTMENTS (CONTINUED):
Cash and investments at year-end totaled (in thousands):
Cash and Investments $ 116,262
Cash with Fiscal Agent-Restricted 46,908
Total Cash and Investments $ 163,170
Cash and investments were categorized as follows (in thousands)
Fair
Non Bank -Value/Carrying
DEPOSITS: 1 2 3 Categorized Balance Amount
Demand Accounts $ 100 $4,102 $ - $ - $ 4,202 $ 817
INVESTMENTS:
Commercial Paper 5,784 - - - 5,784
Investment in L.A.I.F. - - - 41,989 - 41,989
Federal Agency Issues 50,438 - - - - 50,438
Treasury Securities 4,151 - - - - 4,151
Medium Term Notes 13,004 - - - - 13,004
Investments with Fiscal Agent:
Guaranteed Investment Contracts - - - 14,193 - 14,193
Investment in L.A.I.F. - 28,701 - 28,701
Mutual Funds - - 2,898 - 2,898
U.S. Treasury Obligations - - 1,120 - - 1,120
Subtotal of Investments 73,377 0 1,120 87,781 - 162,278
Total Deposits and Investments $ 73,477 $4,102 $ 1,120 $ 87,781 $ 4,202 $ 163,095
Petty Cash 75
Totals $ 163,170
See Independent Auditors' Report 23
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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.
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:
See Independent Auditors' Report 24
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
3. CASH AND INVESTMENTS (CONTINUED):
DEPOSITS:
Category 1 - Deposits insured or collateralized with securities held by the City or the City's
agent in the City's name.
Category 2 - Deposits collateralized with securities held by the pledging financial institution's
trust department or agent in the City's name.
Category 3 - Uncollateralized deposits, or collateralized with securities held by the pledging
financial institution or by its trust department or agent, but not 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.
• 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.
See Independent Auditors' Report 25
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 LAIF 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 $1,343,538,000 and
asset-backed securities totaling $811,131,000. LAIF's, and the City's, exposure to credit,
market or legal risk is not available. The City's proportionate share of its fair value in LAIF
was $70,690,000.
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
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.
See Independent Auditors' Report 26
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 LAIF 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$1,343,538,000 and
asset-backed securities totaling $811,131,000. LAIF's, and the City's, exposure to credit,
market or legal risk is not available. The City's proportionate share of its fair value in LAW
was $70,690,000.
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
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.
See Independent Auditors' Report 26
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 $ 6,643
TOTAL GENERAL FUND 6,643
SPECIAL REVENUE FUNDS:
Gas Tax Fund:
Interest on Advances to Redevelopment Agency 726
Sewer Fund:
Deferred Development Fees 38
Interest on Developer Fees and Advances to Redevelopment Agency 146
Total Sewer Fund 184
Drainage Fund:
Deferred Development Fees 54
Interest on Developer Fees and Advances to Redevelopment Agency 291
Total Drainage Fund 345
Grant Fund:
Revenues Received in Advance 3,300
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 2,368
Interest 2,173
Total Park Acquisition and Development Fund 6,773
TOTAL SPECIAL REVENUE FUNDS 11,328
CAPITAL PROJECTS FUNDS:
Low-Income Housing
Deferred Loans 1,820
Capital Improvement Fund:
Interest on Advances to Redevelopment Agency 247
See Independent Auditors' Report 27
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
TOTAL CAPITAL PROJECTS FUNDS 2,067
5. DEFERRED REVENUE (CONTINUED):
Deferred Property Taxes
General Fund 2,711
Debt Service Funds
Redevelopment Agency:
Deferred Property Taxes 800
Reservoir Hill Assessment District
Deferred Property Taxes 10
Total Debt Service Funds 810
TOTAL DEFERRED PROPERTY TAXES 3,521
TOTAL DEFERRED REVENUE $ 23,559
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.
See Independent Auditors' Report 28
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
6. RETIREMENT PLAN — NORMAL (CONTINUED):
b. Employer and Employee Contribution Obligations:
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, 2001 are:
Local Miscellaneous 0.0000%
Local Safety 0.0000%
c. Annual Pension Cost:
The City's annual pension cost of$4,642,000 was equal to the City's required and actual
contributions. The required contribution was determined as part of a June 30, 2000
actuarial valuation using the entry age normal actuarial cost method.
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, 2000. Significant assumptions were:
• Average remaining period — 19 Years as of the Valuation Date —closed end
• Asset valuation method — 3 years smoothed market
• Investment Rate of Return —8.25%
• Projected salary increases — 4.27% to 11.59% (safety) and 3.75% to 14.2%
(miscellaneous) depending on age, service, and type of employment
• Inflation —3.50%
• 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.
See Independent Auditors' Report 29
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
6. RETIREMENT PLAN— NORMAL (CONTINUED):
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
9/30/1999 $7,529 100% $0
9/30/2000 $5,516 100% $0
9/30/2001 $4,642 100% $0
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
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 $217,131 $257,922 $(40,741) 118.7% $22,502 (180.83) %
Non Safety 147,194 210,071 (62,877) 142.7% 30,622 (205.33) %
Total $364,326 $467,993 $(103,668) 128.4% $53,124 (194.00)%
2000
Safety $244,986 $291,309 $(46,323) 118.9% $23,270 (199.07)
Non Safety o 163,688 230,236 (66,548) 140.7% 34,683 (191.87 �o
Total 408,674 621,546 (112,871) 127.6% $57,963 (194.76)%
See Independent Auditors' Report 30
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 817 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.
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, 2001
were (in thousands):
Annual required contribution $2,578
Interest on net pension obligation 447
Adjustment to annual required contribution (570)
Annual pension cost 2,455
Contributions made (2,268)
Increase (decrease) in net pension obligation 187
Net Pension Obligation— Beginning of Year 8,150
Net Pension Obligation — End of Year 8 337
See Independent Auditors' Report 31
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
7. RETIREMENT PLAN —SUPPLEMENTAL (CONTINUED):
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
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
6/30/99 $2,532 62% $7,244
6/30/00 2,536 64% 8,150
6/30/01 2,455 88% 8,337
Below is other required trend information (dollar amounts in thousands):
Fiscal Year Annual Percentage of
Ending June Required ARC
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%
2001 2,578 88%
See Independent Auditors' Report 32
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 Liabili Assets UAAL Ratio Payroll Payroll
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
6/30/01 36,453 6,678 29,775 18.3 1 63,345 1 47.0%
Actual
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 $8,337,000. 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).
See Independent Auditors' Report 33
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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
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 1,089
Employer's actuarially required contributions $ 616
Employer's actual contributions $ 573
Below is a summary of the Unfunded Actuarial Accrued Liability for the plan (in
thousands)
Actuarial accrued liability $11,085
Net assets available for plan benefits 4,610
Unfunded Actuarial Accrued Liability $B,47
See Independent Auditors' Report 34
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 that can be reasonably estimated claims prior to the
issuance of the financial statements including an estimate of incurred but not reported claims.
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 1,1999 $ 286 $ 6,352 $ 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 October 1, 2000 210 6,408 3,125 9,743
Additions-2000-2001 3,261 2,999 3,861 10,121
Reductions-2000-2001 (3,271) (4,821) (1,595) (9,687)
Net Increase(Decrease)2000-2001 (10) (1,822) 2,266 434
Balance September 30,2001 $ 200 $ 4,586 $ 5,391 $ 10,177
See Independent Auditors' Report 35
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
10. INTERFUND TRANSACTIONS:
a. Advances:
Interfund advances (in thousands) at September 30, 2001 were as follows:
Advances to Other Advances from
Fund Other Funds
General Fund $ 27,112 $ -
Special Revenue Funds:
Gas Tax 1,227 -
Sewer 314 -
Drainage 595 -
Park Acquisition and Development 4,600 -
Debt Service Funds:
Public Financing Authority 18,468 -
Capital Projects Funds:
Capital Improvement 447 -
Low-Income Housing 2,094 -
Enterprise Funds:
Water Utility 2,894
Emerald Cove Housing - 244
General Long-Term Debt Account Group - 57,507
Total $ 57,751 $ 57,761
See Independent Auditors' Report 36
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
10. INTERFUND TRANSACTIONS (CONTINUED):
b. Due To/From Other Funds:
Due To/From Other Funds (in thousands) at September 30, 2001 were as follows:
Due from Other Due to Other
Funds Funds
General Fund $ 3,299 $ -
Special Revenue Funds:
Narcotics Forfeiture - 206
Capital Projects Funds "
Pier Plaza - 608
Debt Service Funds:
Civic Improvement Corporation - 42
Enterprise Funds:
Refuse Collection - 1,069
Internal Service Funds:
Workers' Compensation Reserve - 1,374
Total $ 3,299 $ 3,299
c. Transfers:
Operating Transfers In/Out (in thousands) at September 30, 2001 were as follows:
Operating Transfers In-Governmental Funds $ 21,267
Operating Transfers In-Proprietary Funds 1,198
Total Operating Transfers In $ 22,465
Operating Transfers Out-Governmental Funds $ (21,908)
Operating Transfers Out-Proprietary Funds (557)
Total Operating Transfers Out $ (22,465)
See Independent Auditors' Report 37
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
11. PROPRIETARY FUND INFORMATION:
a. Segment Information for Enterprise Funds:
Emerald Emergency Refuse Hazmat Cultural Ocean View
Water Cove Fire Medical Collection Service Affairs Estates Total
Opwv*Q
Revenues $ 22,549 $ 671 $ 3,551 $ 9,024 $ 179 $ 276 $ 462 $ 36,712
Depredation
Expense(rotal) 1,606 82 131 - 4 25 22 1,870
Depreciation
Expense
(Contributed
Capital) 955 - - - - 25 - 980
Operating
Transfers In - 35 - - 10 85 - 130
Operating
Transfers Out - (366) (181) - - - - (547)
Operating
Income(Loss) (3,223) 21 93 (861) 49 16 440 (3,465)
Net Income '
(Loss) 9,113 (144) (20) (828) 65 114 3,659 11,959
Fixed Asset
Acquisitions 6,941 - 106 - 20 - - 7,067
Net Working
Capital(Deficit) 41,847 2,072 1,499 (340) 226 158 477 45,939
Total Assets 88,092 6,255 2,721 1,494 233 2,084 3,659 104,538
Current Assets 46,311 2,177 1,947 1,494 229 226 477 52,861
Long-Term
Obligations Net
of Current
Portion 386 244 326 29 9 2 - 996
Current
Liabilities 4,464 105 448 1,834 3 68 - 6,922
Retained
Earnings(Fund
Deficit) 48,202 46 1,636 (369) 221 156 3,659 53,551
Contributed
Capital 35,040 5,860 311 - - 1,858 - 43,069
Total Fund
Equity(Deficit) 83,242 5,906 1,947 (369) 221 2,014 3,659 96,620
See Independent Auditors' Report 38
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
11. PROPRIETARY FUND INFORMATION (CONTINUED):
b. Contributed Capital:
The changes in Proprietary Fund Contributed Capital during the year were (in thousands):
Depreciation
Balance- on Balance-
October 1, Contributed Other September
Enterprise: 2000 Capital Deletions 30,2001
Water $ 36,718 $ (955) $ (723) $ 35,040
Emerald Cove 5,860 - - 5,860
Emergency Fire Medical 311 - - 311
Cultural Affairs 1,883 (25) - 1,858
Total Enterprise Funds 44,772 (980) (723) 43,069
Internal Service:
Equipment Replacement 4,849 (1,034) - 3,815
Total Internal Service Funds 4,849 (1,034) - 3,815
Total Contributed Capital $ 49,621 $ (2,014) $ (723) $ 46,884
See Independent Auditors' Report 39
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
12. GENERAL LONG-TERM DEBT:
October 1, September 30,
2000 Additions Retirements 2001
Civic Improvement Corporation Refunding
Certificates of Participation (Civic Center)-1993 $ 17,360 $ - $ (705) $ 16,655
Civic Improvement Corporation Refunding
Certificates of Participation (Police
Administration Building)-1993 13,520 - (425) 13,095
Compensated Absences 6,135 1,940 - 8,075
Advances from Other Funds 56,805 5,481 (4,779) 57,507
1992 Public Financing Authority Revenue
Bonds 20,885 - (425) 20,460
2001 Public Financing Authority Lease
Revenue Bonds - 31,360 - 31,360
Notes Payable 393 - (48) 345
1999 Redevelopment Agency Tax Allocation
Refunding Bonds 10,060 - (290) 9,770
*2000 Public Financing Authority Certificates of -
Participation 18,310 - (470) 17,84W
Mayer Disposition and Development Agreement 11,678 1,078 (8,000) 4,756
Section 108 Loan 8,355 - (225) 8,130
Reservoir Hill Assessment Bonds 815 - (210) 605
1997 Public Financing Authority Leasehold
Revenue Bonds 7,020 - (440) 6,580
Net Benefit Obligation 8,150 187 - 8,337
Leases Payable 155 28 (60) 123
Energy Financing Loan 1,173 - (246) 927
Total General Long-Term Debt $ 180,814 $ 40,074 $ (16,323) $ 204,565
See Independent Auditors' Report 40
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
12. GENERAL LONG-TERM DEBT (CONTINUED):
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 $ 37,947
Plus Increases in Compensated Absences 1,940
Plus Increases in Net Pension Obligation 187
Proceeds of Long-Term Debt in Statement of Changes in Long-Term Debt $ 40,074
Principal Paid per General Purpose Financial Statements $ 11,884
Unpaid Interest on Interfund Debt 4,439
Deletions Shown in Statement of Changes in Long-Term Debt $ 16,323
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 1' and Au ust 1S
Principal Payment Dates August 15
Purpose of Debt Refinance 1986 Civic
Improvement Corporation
Certificates of Participation
Debt service requirements to maturity are (in thousands):
Year Ending
September 30, Principal Interest Total
2002 $ 745 $ 920 $ 1,665
2003 785 880 1,665
2004 825 837 1,662
2005 865 792 1,657
2006 915 744 1,659
2007 and after 12,520 4,092 16,612
Total $ 16,665 $ 8,265 $ 24,920
See Independent Auditors' Report 41
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
12. GENERAL LONG-TERM DEBT (CONTINUED):
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 Februa 1S and Au ust 1S
Principal Payment Dates August 1s
Purpose of Debt Refinance 1989 Civic
Improvement Corporation
Certificates of Participation
Debt service requirements to maturity are (in thousands):
Year Ending
September 30, Principal Interest Total
2002 $ 450 $ 718 $ 1,168
2003 470 694 1,164
2004 495 670 1,165
2005 520 644 1,164
2006 550 615 1,165
2007 and after 10,610 4,517 15,127
Total $ 13,095 $ 7,858 $ 20,953
c. Compensated Absences:
There is no fixed repayment to pay the governmental fund compensated absences liability
of$8,075,000 at year-end.
See Independent Auditors' Report 42
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
12. GENERAL LONG-TERM DEBT (CONTINUED):
d. Advances from Other Funds:
There is no fixed repayment schedule for the advances from other funds detailed
below (in thousands):
General Fund:
Direct Advances from 1979 to 1987 to Redevelopment Agency $ 8,977
Direct Advances from proceeds of 1988 Public Financing
Authority Revenue Bonds repaid to General Fund 4,445
Indirect Advances from Redevelopment Agency from 1987 to
1996 6,752
Land Sales to Redevelopment Agency from 1982 to 1992 32,833
Interest on above amounts 36,241
Total Debt 89,248
Less estimated uncollectible amounts (62,136)
TOTAL GENERAL FUND 27,112
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 2,368
Total Advances from Park Acquisition and Development Fund 4,357
Sewer Fund:
Advance 1990/91 to Redevelopment Agency 130
Deferred Development Fees-Redevelopment Agency 38
Interest on Above Amounts 146
Total Advances from Sewer Fund 314
Drainage Fund:
Advance 1987/88-Redevelopment Agency 250
Deferred Development Fees-Redevelopment Agency 54
Interest on Above Amounts 291
Total Advances from Drainage Fund 595
Gas Tax Fund:
Advance in 1988/89-Redevelopment Agency 500
Interest on Above Amounts 727
Total Advances from Gas Tax Fund 1,227
TOTAL SPECIAL REVENUE FUNDS 6,493
DEBT SERVICE FUNDS:
Public Financing Authority:
Advances in 1991/92-Redevelopment Agency 18,468
See Independent Auditors' Report 43
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
12. GENERAL LONG-TERM DEBT (CONTINUED):
d. Advances from Other Funds:
CAPITAL PROJECTS FUNDS:
Capital Improvement Fund:
Advance in 1989/90-Redevelopment Agency 200
Interest on Above Amounts 247
Total Capital Improvement Fund 447
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 2,541,
ENTERPRISE FUNDS:
Water Fund:
Advances from 1986/87 to 1988/89-Redevelopment
Agency 1,138
Interest on Above Amounts 1,755
TOTAL ENTERPRISE FUNDS 2,893
TOTAL ADVANCES FROM OTHER FUNDS $ 57,507 ,
The changes during the year were (in thousands):
Advances-October 1,2000 56,805
Advances Repaid (1,126)
Accrued Interest-Net of Uncollectible Accounts
Reported in Other Funds as Deferred Revenue 1,828
Advances -September 30,2001 57,507
See Independent Auditors' Report 44
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 7.0%
Interest Payment Dates Februa 1S and August 1S
Principal Payment Dates August 1"
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
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 600 1,291 1,891
2007 and after 17,845 12,579 30,424
Total $ 20,460 $ 19,396 $ 39,856
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
See Independent Auditors' Report 45
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
12. GENERAL LONG-TERM DEBT (CONTINUED):
f. Notes Payable:
Debt service requirements to maturity are (in thousands):
Year Ending
September 30, Principal Interest Total
2002 $52 $47 $99
2003 293 42 335
Total $345 $89 $434
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 1S
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
2002 $ 300 $ 439 $739
2003 310 429 739
2004 320 418 738
2005 335 406 741
2006 350 393 743
2007 and after 8;155 3,786 11,941
Total $ 9,770 $ 6,871 $ 15,641
See Independent Auditors' Report 46
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 1 S and March 1 S
Principal Payment Dates September 15
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
2002 $ 545 $ 898 $ 1,442
2003 565 875 1,441
2004 590 852 1,443
2005 615 827 1,444
2006 640 801 1,443
2007 and after 14,885 9,912 24,792
Total $ 17,840 $ 14,165 $ 32,005
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, 2001, the Agency obligation under the agreement amounted to
$4,756,000. The beginning balance of this obligation was$11,678,000. During the year
$8,000,000 was repaid while$1,078,000 was advanced. Project-generated revenues as
available will repay these amounts over the time needed to fully amortize the advance.
See Independent Auditors' Report 47
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 1 S and August 1 S
Principal Payment Dates August 1"
Purpose of Debt I Capital Improvements
Year Ending
September 30 Principal Interest Total
2002 $ 240 $ 617 $ 857
2003 260 600 860
2004 280 581 861
2005 300 561 861
2006 315 540 855
2007 and after 6,735 4,147 10,882
Total $ 8,130 $ 7,046 $ 15,176
The principal and interest due August 1, 2001 was not paid until after the year-end.
k. Reservoir Hill Assessment Bonds:
Year of Issuance 1989
Type of Debt 1915 Im rovement Act Bonds
Original Principal Amount $1,653,905
Security Property tax assessments
Interest Rates 6.00% to 8.15%
Interest Payment Dates March 2nd and September 1s'
Principal Payment Dates September 2"
Purpose of Debt Capital Im rovements
See Independent Auditors' Report 48
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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
2002 $ 55 $46 $101
2003 55 40 95
2004 55 35 90
2005 65 31 96
2006 70 26 96
2007 and after 305 41 346
Total $ 605 $ 219 $824
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 --Su—n—e-1-5-15and 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
2002 $ 510 $ 331 $ 841
2003 555 303 858
2004 575 275 850
2005 610 245 855
2006 640 214 854
2007 and after 3,690 2,244 6,778
Total $ 6,580 $ 3,612 $11,036
See Independent Auditors' Report 49
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
12. GENERAL LONG-TERM DEBT (CONTINUED):
m. 2001 Public Financing Authority Lease Revenue Bonds:
Year of Issuance 2001
Type of Debt Lease Revenue Bonds
Original Principal Amount $31,360,000
Security Lease Agreement with City for
Public Buildings-
Interest Rates 2.45%to 5.0%
Interest Payment Dates March 1S and September 1s'
Principal Payment Dates September 1st
Purpose of Debt Construct Sports Complex and
South Beach Phase II
Improvements
Year Ending
September 30, Principal Interest Total
2002 $ 580 $ 1,403 $ 1,983
2003 560 1,424 1,984
2004 585 1,401 1,986
2005 605 1,378 1,983
2006 630 1,354 1,984
2007 and after 28,400 21,227 49,627
Total $ 31,360 $ 28,186 $ 59,546
n. Net Pension Obligation:
There is no fixed repayment schedule to fund the unfunded net pension obligation totaling
$8,337,000 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.
See Independent Auditors' Report 50
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
12. GENERAL LONG-TERM DEBT (CONTINUED):
o. Leases Payable:
Year of Issuance Various
Type of Debt Capital Lease
Original Principal Amount $185,000
Security Lease Agreement
Interest Rates 5.0% to 6.9%
Interest Payment Dates Variable
Principal Payment Dates Variable
Purpose of Debt Purchase Equipment
Future minimum lease payments to maturity are (in thousands):
Year Ending
September 30, Total
2002 $56
2003 33
2004 28
2005 14
Total 131
Less interest (8)
Total $123
p. 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 22nd and June 22"
Purpose of Debt Capital Improvements
See Independent Auditors' Report 51
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
12. GENERAL LONG-TERM DEBT (CONTINUED):
p. Energy Conservation Loan:
Debt service requirements to maturity are (in thousands):
Year Ending
September 30, Principal Interest Total
2002 $185 $54 $239
2003 197 42 239
2004 209 30 239
2005 221 18 239
2006 115 10 125
Total $927 $154 $1,081
13. PROPRIETARY FUND DEBT:
Below is a summary of the 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 431 1,884 2,315
Claims Payable - 10,177 10,177
Compensated Absences 472 82 554
Total $ 1,147 $ 12,143 $ 13,290
September
October 1, 2000 Additions Retirements 30,2001
Compensated Absences $ 457 $ 97 $ - $ 554
Advances from Other Funds 244 - - 244
Leases Payable 1,550 1,006 (241) 2,315
Claims Payable 9,743 10,121 (9,687) 10,177
Total $ 11,994 $ 11,224 $ (9,928) $ 13,290
See Independent Auditors' Report 52
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
13. PROPRIETARY FUND DEBT (CONTINUED):
a. Compensated Absences:
There is no fixed repayment schedule to pay the compensated absences for proprietary
fund types of$554,000 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.
c. Leases Payable:
The City entered into capital leases for various items:
Year of Issuance 1993 through 2001
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% r
Interest Payment Dates Monthly, Quarterly, Semi-
Annually
Principal Payment Dates Monthly, Quarterly, Semi-
Annuall
Purpose of Debt I Equipment Financing
The future minimum required lease payments are (in thousands):
Year Ending
September 30, Total
2002 $ 1,028
2003 655
2004 424
2005 242
2006 177
Total 2,526
Less interest (211)
Total $2,315
See Independent Auditors' Report 53
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
13. PROPRIETARY FUND DEBT (CONTINUED):
d. Claims Payable:
There is no fixed repayment schedule for estimated claims payable of $10,177,000 at
year-end (see Note 9). The City pays the claims upon final settlement
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) $ 8,700,000
1991 Emerald Cove Certificates of Participation 4,880,000
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 15 and October 1s'
Principal Payment Dates October 1s'
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.
See Independent Auditors' Report 54
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
14.LONG-TERM DEBT NOT RECORDED IN FINANCIAL STATEMENTS (CONTINUED):
b. Community Facilities District 1990-1 Special Assessment Tax Bonds:
Debt service requirements to maturity are (in thousands):
Year Ending
September 30, Principal Interest Total
2002 $ 45 $ 158 $ 203
2003 50 154 204
2004 55 150 205
2005 60 146 206
2006 65 141 206
2007 and after 1,825 1,225 4,866
Total $ 2,100 $ 1,974 $ 5,890
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, 2001 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 21,300,000 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
See Independent Auditors' Report 55
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
16.FIXED ASSETS:
a. Changes in Fixed Assets:
The changes in the general fixed assets account group for the year are (in thousands):
September 30,
October 1, 2000 Additions Dispositions 2001
Land $ 74,978 $ 885 $ (9,078) $ 66,785
Buildings 68,317 5,004 (124) 73,197
Other 2,347 - - 2,347
Construction in Progress 6,682 3,741 (6,295) 4,128
Joint Ventures 365 - (37) 328
Total $ 152,689 $ 9,630 $ (15,534) $ 146,786
The changes in the proprietary fund fixed assets for the year are (in thousands):
October 1, September 30,
ENTERPRISE FUNDS: 2000 Additions Dispositions 2001
Land $ 2,438 $ 6,162 $ (2) $ 8,598
Buildings 8,059 561 - 8,620
Construction in Progress 5,377 4,935 (4,719) 5,593
Machinery and Equipment 63,087 5,860 (4,295) 64,652
Total Cost 78,961 $ 17,518 $ (9,016) 87,463
Less Accumulated
Depreciation (37,921) (38,680)
Net Book Value Enterprise
Funds $ 41,040 $ 48,783
See Independent Auditors' Report 56
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
15. FIXED ASSETS (CONTINUED):
a. Changes in Fixed Assets:
INTERNAL SERVICE October 1, September 30,
FUNDS: 2000 Additions Dispositions 2001
Machinery and Equipment $ 40,135 $ 8,291 $ (4,056) $ 44,370
Construction in Progress 4,432 - (53) 4,379
Total Cost 44,567 8,291 (4,109) 48,749
Less Accumulated
Depreciation $ (29,534) $ (28,356)
Net Book Value Internal
Service Funds $ 15,033 $ 20,393
b. Change in Capitalization Threshold:
On October 1, 2001,the City changed its capitalization threshold from$2,000 to$5,000.All of
the assets with costs of between$2,000 and $4,999 were retired. Depreciation expense was
recognized on the full, undepreciated book value of these assets in the proprietary fund
types.
Of the depreciation shown in the accompanying financial statements,the following amounts
related to the change (in thousands):
Accumulated Depreciation
Total Depreciation Expense
Cost
Enterprise Funds $409 $282 $127
Internal Service Funds 3,008 2,290 718
General Fixed Assets Account Group 25 - -
Total $3,442 $2,572 $846
See Independent Auditors' Report 57
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
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 2,448 $ 5,604 $ - $ 7,157 $ 15,209
Long-Term Receivables 20,469 880 18,468 4,426 44,243
Capital Projects - - - 28,701 28,701
Land Held for Resale - - - 9,139 9,139
Inventory 760 - - - 760
Total Reserved Fund Equity $ 23,677 $ 6,484 $18,468 $ 49,423 $ 98,052
Designated for Future Expenditures 1,775 11,876 - 3,957 17,608
Economic Uncertainties 9,354 - - - 9,354 r
Total Designated $ 11,129 $ 11,876 $ - $ 3,957 $ 26,962
Total Reserved and Designated Fund
Equity $ 34,806 $ 18,360 $18,468 $ 53,380 $ 125,014
17.COMMITMENTS AND CONTINGENCIES:
a. Legal Actions:
There are legal actions pending against the City resulting from normal operations. In the
opinion of management and the City Attorney, the financial resolution of these actions
should not have a significant impact on these financial statements.
b. 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 1/50th of their contributions.At year-end these amounts totaled$366,000.
See Independent Auditors' Report 58
City of Huntington Beach
Notes to Financial Statements
September 30, 2001
17.COMMITMENTS AND CONTINGENCIES (CONTINUED):
c. Townsquare Commercial Loan:
During 1995 the Redevelopment Agency and the Resolution Trust Corporation(RTC)sold
the interest in the Townsquare development for $820,000. The Agency/RTC financed
$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. This loan was paid off subsequent to year-end.
d. Huntington Beach Union High School District (HBUHSD) Sharing Agreement:
In 1997 the City Council agreed to pay the HBUHSD certain increased salestax 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. Property Tax Lawsuits:
In February, 2001, 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 $15.2 million, which does not include any potential refund for fiscal year
2000-2001. The City recorded all revenue attributable to property tax earned after April 1,
2001 in a trust and agency fund.All property taxes relating to this levy earned prior to that
date are recorded as revenue. At year-end, the amount in this trust and agency fund
totaled $2,125,000.
During the year a taxpayer in Orange County filed and won a lawsuit claiming that the
County reassessed his property greater than the 2% allowed under California law. This
only affects the property of this homeowner and the court has not ruled whether this will
extend to other property owners. Until there is a final court settlement, the County
Assessor will continue to value property under the existing practice. If the court rules that
this applies to all homeowners in Orange County, there is a possibility of refunds of an
undetermined amount that will be due to property owners in Huntington Beach.
See Independent Auditors' Report 59
CITY OF HUNTINGTON BEACH
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES,EXPENSES AND
CHANGES IN RETAINED EARNINGS(ACCUMULATED DEFICITS)
FOR THE YEAR ENDED SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS
FOR THE YEAR ENDED SEPTEMBER 30,2000
(IN THOUSANDS)
Health Workers' Liability Public
Insurance Compensation Insurance Financing Equipment
OPERATING REVENUES: Reserve Reserve Rosa" Autba tt Replacement Totals 2004 Totals 20M
Fees for Service i 4,598 S 3,194 i 3,750 i - i 4,623 i 16,165 i 13,438
Other 38 48 86 236
TOTAL OPERATING REVENUES 4,598 3,194 3,788 4,671 16,251 13,674
OPERATING EXPENSES:
Supplies and Operating 485 208 1,286 - 1,178 3,157 2,996
Claims and Insurance 3,261 2,999 3,861 - - 10,121 8,008
Depredation 3,518 3,518 3,072
TOTAL OPERATING EXPENSES 3,746 3,207 5,147 4,696 16,796 14,076
OPERATING INCOME(LOSS) 852 (13) (1,359) (25) (646) (402)
NON-OPERATING REVENUES(EXPENSES):
Interest Income 41 15 375 53 539 1,023 "a
Interest Expense - - - - (107) (107) (136)
Capital Contributions 6,643 6,643 806
Gain(Loss)on Disposal of Assets (22% (221)
TOTAL NON-OPERATING REVENUES(EXPENSES) 41 16 375 53 6,854 7,338 1,318
NET INCOME(LOSS)BEFORE OPERATING TRANSFERS 893 2 (984) 53 6,829 6,793 816
Operating Transfers In 280 - - - 788 1,068 2,750
Operating Transfers out (10) (10) (764)
NET INCOME(LOSS) 1,173 2 (904) 63 7,607 7,851 2,882
Add Depredation on Contributed Assets 1,034 1,034 1,113
(98 INCREASE(DECREASE)IN RETAINED EARNINGS 1,173 2 4) 53 $,"1 8,885 3,995
RETAINED EARNINGS(ACCUMULATED DEFICIT)•BEGINNING OF YEAR (428) (5,975) 2,326 1,175 13,730 10,323 6,833
Prior Period Adjustment 685 685
RETAINED EARNINGS(ACCUMULATED DEFICIT)AS RESTATED (428) (5,975) 2,326 1,175 14,415 11,513 6,833
RETAINED EARNINGS(ACCUMULATED DEFICIT)-END OF YEAR i 745 S (5,973) i 1,342 i 1,228 i 23,056 i 20,398 i 10,828
r i
97
CITY OF HUNTINGTON BEACH
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS
FOR THE YEAR ENDED SEPTEMBER 30,2000
(IN THOUSANDS)
Health Wo*ew Liabiiity, Public -
Insurance Compensation Insurance Financing Equipment
CASH FLOWS FROM OPERATING ACTIVITIES: Reserve Reserve Reserve Authority Replacement Totals 2001 Totals 2000
OPERATING INCOME(LOSS) S 852 S (13) S (1,359) _ - S (25) S (545) S (402)
ADJUSTMENTS TO RECONCILE OPERATING INCOME(LOSS)TO NET
CASH PROVIDED(USED)BY OPERATING ACTIVITIES:
Depredation - - - 3,518 3,518 3,072
Decrease(Increase)in Prepaid Insurance (12) 3 (142) - (151) (557)
Decrease(Increase)in Due from Other Funds - - a65
Decrease(increase)in Other Receivables (8) 4 8 5 (343) (334) 193
Increase(Decrease)in Accounts Payable (2) (5) 144 - 148 285 (1,024)
Increase(Decrease)in Due to Otter Funds - 1,374 - - 1,374 (1,032)
Increase(Decrease)in Claims Payable (10) (1,822) 2,268 434 (239)
Increase(Decrease)in Leases Payable - - - - (46)
Increase(Decrease)in Compensated Absences 15 5 5 25 7
Increase(Decrease)In Accrued Payroll (400) - (400) 408
Increase(Decrease)in Accrued Interest 394 4 398 (3)
TOTAL ADJUSTMENTS (23) (437) 2,281 5 3,323 5,149 1,644
TOTAL CASH FLOWS PROVIDED(USED)BY OPERATING ACTIVITIES 829 (450) 922 6 3,298 4,604 1,242
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Operating Transfers In From Other Funds 280 - - 788 1,008 Z750
Operating Transfers Out to Other Funds (10) (10) (784)
TOTAL CASH FLOWS PROVIDED(USED)BY NON-CAPITAL FINANCING
ACTIVITIES 280 778 1,058 1,966
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTMTIES: -
Interest Paid (107) (107) (136)
Proceeds from Sale of Assets 102 102 102
Acquisition and Construction of Capital Assets (833) (833) (1,625)
Principal Paid on Long-Term Debt (697) (697) (697)
TOTAL CASH USED IN CAPITAL AND RELATED FINANCING ACTIVITIES 41,535) (1,535) (2,356)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Contributions - 806
Interest on Investments 41 15 375 53 639 1,023 648
TOTAL CASH FLOWS PROVIDED BY INVESTING ACTIVITIES 41 15 375 53 639 1,023 1,454
NET INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS 1,150 (435) 1,297 58 3,080 5,160 2,306
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR 196 435 4,319 1,167 5,054 11,171 8,865
CASH AND CASH EQUIVALENTS-END OF YEAR S 1,3411 $ $ 5,616 $ 1,225 $ 8,134 S 16,321 $ 11,171
NON-CASH ACTIVITIES:
Equipment Contributions S $ $ $ - $ 6,643 $ 6.643 S 372
Acquisition of Asset Through Capital Lease 1,006 1,008 1,279
98
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.
• The Tax Override Fund accounts for the activity of funds_ received for the City's tax
override that may be refunded to residents.
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, 2001
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30, 2000
(IN THOUSANDS)
Agency Funds
Retiree Business
General Mello-Roos Medical Improvement Central Tax
ASSETS: Deposit Assessment Insurance District Net Override
Cash and Investments $ 472 $ 138 $ 4,635 $ 1 $ 1,028 $ 2,089
Restricted Cash and Investments with Fiscal Agent - 873 - - -
interest Receivable - - 93 - 32 9
Notes Receivable, Net of Allowance for Doubtful
Accounts - - - - - -
Other Assets - 78 - 19 - 27
TOTAL ASSETS $ 472 $ 1,089 $ 4,728 $ 20 $ 1,060 $ 2,126
LIABILITIES AND FUND BALANCE
LIABILITIES:
Accounts Payable $ - $ - $ - $ - $ - $ -
Deposits Payable 472 1,089 4,728 20 1,060 2,125
Due to Other Funds - - - - - -
TOTAL LIABILITIES $ 472 $ 1,089 $ 4,728 $ 20 $ 1,060 $ 2,125
FUND BALANCE
Reserved for Pension Benefits - - - - - -
Reserved for Employee Benefits - - - - - -
TOTAL FUND BALANCE $ - $ - $ - $ - $ - $
TOTAL LIABILITIES AND FUND BALANCE $ 472 $ 1,089 $ 4,728 $ 20 $ 1,060 $ 2,125
99
Trust Funds Totals
Employee
Retirement Deferred
Supplement Compensation 2001 2000
$ 6,744 $ 78 $15,185 $10,662
- - 873 902
105 - 239 199
- 293 293 298
- 124 386
$ 6,849 $ 371 $16,714 $12,447
$ 86 $ - $ 86 $ -
- 44 9,538 6,993
- - 13
$ 86 $ 44 $ 9,624 $ 7,006
6,763 - 6,763 5,156
- 327 327 285
$ 6,763 $ 327 $ 7,090 $ 6,"1
$ 6,849 $ 371 $16,714 $12,447
100
CITY OF HUNTINGTON BEACH
AGENCY FUNDS
COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED SEPTEMBER 30,2001
(IN THOUSANDS)
GENERAL DEPOSIT FUND
October 1, September 30,
ASSETS: 2000 Additions Deductions 2001
Cash and Investments 76 472 .
LIABILITIES:
Deposits Payable 465 6 76 (69) S 472
MELLO-ROOS ASSESSMENT DISTRICT FUND
October 1, September 30,
ASSETS: 2000 Additions Deductions 2001
Cash and Investments $ 27 $ 293 $ (182) $ 138
Cash With Fiscal Agent 902 225 (254) 873
Other Assets 73 5 78
TOTAL ASSETS $ 1,002 $ 523 $ (436) $ 11089
LIABILITIES:
Deposits Payable $ 1,002 $ 523 $ (436) $ 1,089
RETIREE MEDICAL INSURANCE FUND
October 1, September 30,
ASSETS: 2000 Additions Deductions 2001
Cash and Investments $ 4,340 $ 916 $ (621) $ 4,635
Interest Receivable 91 240 (238) 93
TOTAL ASSETS $ 4,431 $ 1,156 $ (859) $ 4,728 r
LIABILITIES:
Deposits Payable $ 4,431 $ 1156 $ (859) $ 4,728
BUSINESS IMPROVEMENT DISTRICT FUND
October 1, September 30,
ASSETS: 2000 Additions Deductions 2001
Cash and Investments $ 4 $ 111 $ (114) $ 1
Other Assets 9 10 19
TOTAL ASSETS $ 13 $ 121 $ (114) $ 20
LIABILITIES:
Deposits Payable
101
CITY OF HUNTINGTON BEACH
AGENCYFUNDS
COMBINING STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED SEPTEMBER 30,2001
(IN THOUSANDS)
CENTRAL NET FUND
October 1, September 30,
ASSETS: 2000 Additions Deductions 2001
Cash and Investments $ 1,000 $ 421 $ (393) $ 1,028
Interest Receivable 16 49 (33) 32
Otter Assets 68 (66)
TOTAL ASSETS $ 1,082 S 470 $ (492) $ 1,060
LIABILITIES:
Deposits Payable 1,082 470 (492) 1,060
TAX OVERRIDE FUND
ASSETS: 2000 Additions Deductions 2001
Cash and Investments $ - $ 2,089 $ - $ 2,089
Interest Receivable - 9 - 9
Otter Assets 27 27
TOTAL ASSETS $ - $ 2,125 $ - $ 2,125
LIABILITIES:
Deposits Payable $ - $ 2,125 $ - $ 2,125
CITY OF HUNTINGTON BEACH
TOTAL AGENCY FUNDS
STATEMENTS OF CHANGES IN ASSETS AND LIABILITIES
FOR THE YEAR ENDED SEPTEMBER 30,2001
(IN THOUSANDS)
October 1, September 30,
ASSETS: 2000 Additions Deductions 2001
Cash and Investments $ 5,836 $ 3,905 $ (1,379) $ 8,363
Cash with Fiscal Agent 902 225 (254) 873
Interest Receivable 107 298 (271) 134
Otter Assets 148 42 (66) 124
TOTAL ASSETS S 6,993 $ 4,471 $ (1,970) $ 9,494
LIABILITIES:
Deposits Payable S 6,993 $ 4,471 S (1,970) $ 9,494
102
RETIREMENT SUPPLEMENT TRUST FUND
STATEMENT OF PLAN NET ASSETS
SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30,2000
(IN THOUSANDS)
ASSETS: TOTAL 2001 TOTAL 2000
Cash and Investments $ 6,744 $ 4,826
Prepaid Expenses - 238
Interest Receivable 105 92
TOTAL ASSETS $ 6,849 $ 5,156
LIABILITIES AND FUND BALANCES:
Liabilities:
Accounts Payable $ 86 $ -
Fund Balances:
Fund Balance Reserved for Pension Benerds 6,763 5,156
TOTAL LIABILITIES AND FUND BALANCES $ 6,849 $ 5,156
RETIREMENT SUPPLEMENT TRUST FUND
STATEMENT OF CHANGES IN PLAN
NET ASSETS
FOR THE YEAR ENDED SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED
SEPTEMBER 30,2000
(IN THOUSANDS)
Additions: TOTAL 2001 TOTAL 2000
Employer Contributions $ 2,268 $ 1,702
Interest Income 475 281
Total Additions $ 2,743 $ 1,983
Deductions:
Benefits $ 1,127 $ 934
Administration 9 21
Total Deductions 1,136 955
Net Increase in Plan Assets 1,607 1,028
Fund Balance-Beginning of Year 5,156 4,128
Fund Balance Reserved for Employers Pension
Benefits-End of Year $ 6,763 $ 5,156
DEFERRED COMPENSATION EXPENDABLE TRUST FUND
BALANCE SHEET
SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED
SEPTEMBER 30,2000
(IN THOUSANDS)
TOTAL TOTAL
ASSETS:.. 2001 2000
Cash and Investments $ 78 $
Notes Receivable 293 298
Total Assets $ 371 $ 298
LIABILITIES AND FUND BALANCES:
Deposits $ 44 $ 13
Fund Balance Reserved for Employee Benefits 327 285
Total Liabilities and Fund Balances $ 371 $ 298
103
CITY OF HUNTINGTON BEACH
DERRERRED COMPENSATION
EXPENDABLE TRUST FUND
STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE
SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS FOR THE YEAR ENDED
SEPTEMBER 30,2000
(IN THOUSANDS)
Revenues: Total2001 Total2000
Interest Income i 41 i
Expenditures:
Payments to Participants 12 63
Total Expenditures 12 63
Excess of Revenues Over(Under)Expenditures 29 (63)
Fund Balance=Beginning of Year 298 361
Fund Balance-End of Year i 327 i 298
i -
104
�/`Gelj� �1.-("�Ih, 1,
The General Fixed Assets Account Group records plant, property
and equipment not recorded in proprietary funds.
CITY OF HUNTINGTON BEACH
SCHEDULE OF GENERAL FIXED ASSETS
SEPTEMBER 30, 2001
(IN THOUSANDS)
GENERAL FIXED ASSETS:
Land $ 66,785
Buildings 73,197
Improvements Other Than Buildings 2,347
Construction In Progress 4,128
Joint Ventures 328
TOTAL INVESTMENT IN GENERAL FIXED ASSETS $146,785
INVESTMENTS IN GENERAL FIXED ASSETS
General Fund $ 8,940
Special Revenue Funds 25,876
Capital Projects Funds 90,029
Donations 21,612
Joint Ventures 328
ASSETS $146,786
SCHEDULE OF CHANGES IN GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY
FOR THE YEAR ENDED SEPTEMBER 30, 2001
(IN THOUSANDS)
October 1, September 30,
2000 Additions Retirements 2001
Fire $ 3,379 $ 3,194 $ (37) 6,536
Police 842 - - 842
Community Services 92,807 997 (3,554) 90,250
Public Works 10,484 3,743 (5,134) 9,093
Library Services 13,286 - - 13,286
Non-Departmental 31,891 1,696 (6,809) 26,778
TOTAL $152,689 $ 9,630 $ (15,634) $ 146,785
SCHEDULE OF GENERAL FIXED ASSETS
BY FUNCTION AND ACTIVITY
SEPTEMBER 30, 2001
(1N THOUSANDS)
Construction In
Land Buildings Improvements Progress Joint Ventures Total
Fire $ - $ 6,201 $ - $ 194 $ 141 $ 6,536
Police - 784 58 - - 842
Community Services 50,366 37,780 2,104 - - 90,250
Public Works - 5,118 185 3,790 - 9,093
Library - 13,213 - 73 - 13,286
Non-Departmental 16,419 10,101 - 71 187 26,778
TOTAL $ 66,785 $ 73,197 $ 2,347 $ 4,128 $ 328 $ 146,785
105
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, 2001
(IN THOUSANDS)
October 1, September
2000 Additions Retirements 30,2001
Civic Improvement Corporation Refunding Certificates of Participation
(Civic Center)-1993 $ 17,360 $ - $ (705) $ 16,655
Civic Improvement Corporation Refunding Certificates of Participation
(Police Administration Building)-1993 13,520 - (425) 13,095
Compensated Absences 6,135 1,940 - 8,075
Advances from Other Funds 56,805 5,481 (4,779) 57,507
1992 Public Financing Authority Revenue Bonds 20,885 - (425) 20,460
2001 Public Financing Authority Lease Revenue Bonds - 31,360 - 31,360
Notes Payable 393 - (48) 345
1999 Redevelopment Agency Tax Allocation Refunding Bonds 10,060 - (290) 9,770
2000 Public Financing Authority Certificates of Participation 18,310 - (470) 17,840
Mayer Disposition and Development Agreement 11,678 1,078 (8,000) 4,756
Section 108 Loan 8,355 - (225) 8,130
Reservoir Hill Assessment Bonds 815 - (210) 605
1997 Public Financing Authority Leasehold Revenue Bonds 7,020 - (440) 6,580
Net Benefit Obligation 8,150 187 - 8,337
Leases Payable 155 28 (32) 123
Energy Financing Loan 1,173 - (246) 927
$ 180,814 S 40,074 $ (16,323) $ 204,565
106
I
l'rell f'f���l�!(
CITY OF HUNTINGTON BEACH
GOVERNMENTAL FUND EXPENDITURES
BY FUNCTION AND ACTIVITY
LAST TEN FISCAL YEARS
(IN THOUSANDS)
Administrative Community IMane.tiorr
city Council City Administrator City Trassurer City Attorney Clay Clark services Development Planning Building flh systams
1992-93 $213 $1.480 $709 $1,807 $449 $4.108 $6.097 $ $ $16,505 3
•1993-94 282 2,691 897 2.168 517 5,140 10,408 19,502 -
1994-95 224 1,672 709 1.866 485 4,200 3,252 - 15,304
1995.96 224 Z140 743 1.466 488 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 3,058 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
2000-2001 231 1,776 916 2.943 559 3.874 2.329 2,589 18.142 2,814
Source:Administrative Services Department-City of Huntington Beach
GOVERNMENTAL FUND REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(IN THOUSANDS)
Use of Charges for
Licenses and Fines and Money and From Other Current
Fiscal Year Property Tax Other Taxes Perndts Forfeitures Property Agencies Service Other Total
1991-92 $ 35,376 $ 35.069 $ 4,236 5 1,324 $ 19.451 $ 21.850 5 4,699 $ 3,192 $ 125,197
1992-93 33.163 36,332 4,546 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,S38 4,018 14,603 32,021 10,077 5,770 164,866
2000-2001 36,860 60,223 6.902 4.092 15,812 31.634 10,459 1,691 167,673
Source:Administrative Services Department-City of Huntington Beach
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(IN THOUSANDS)
SECURED TAXES UNSECURED TAXES
DELINQUENCY
DELINQUENCY
TOTAL DELINQUENCY DELINQUENCY
TOTAL LEVY TOTAL COLLECTIONS AMOUNT PERCENT TOTAL LEVY COLLECTIONS AMOUNT PERCENT
1991-92 3 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,W2 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 21.001 20,676 284 1.35% 1.321 1,231 29 2.20%
2000-2001 22.724 22,035 629 2.77% 1.348 1,267 33 245%
RESERVOIR HILL MELLO-ROOS
1991-92 $ 170 5 167 $ 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 6 3.14
1999-2000 184 181 3 1.63% 264 259 5 1.89
2000-2001 184 180 4 2.17% 264 258 5 1.89
Fiscal Year 1993-94 is a fifteen month fiscal year.
Source:County of Orange Auditor Controllers Office
Note-Delinquency amount does not ahvays equal levy amount minus Collections
amount air=there are ahvays amounts Collected from prior years
107
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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
1991-92 $ 10,639.970 $ 10.011 $ 10.649,981 S 678,150 S 11,328,131 $ 11,328,131 n/a
1992-93 11,125,356 2,311 11.127,667 758,178 11,885.846 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 6.36%
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%
2000.2001 15.877,065 2,404 15,879.469 646.594 16.526,063 16.526.063 7.88%
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
1991-92 1.00000 0.05339 0.00098 0.00482 0.00890 0.00012 1.06821
1992-93 1.00000 0.05325 0.00087 0.00201 0.00890 0.00013 1.06516
1993.94 1.00000 0.05320 0.00081 0.00227 0.00890 0.00019 1.06537
1994-95 1.00000 0.04930 0.00078 0.00046 0.00890 0.00019 1.05963
1995.96 1.00000 0.04930 0.00050 0.00033 0.00890 0.00018 1.05921
1996-97 1.00000 0.04930 0.00012 - 0.00890 - 1.05832
1997-98 1.00000 0.04930 0.00010 - 0.00890 - 1.05830
1998-99 1.00000 0.04930 0.00020 - 0.00890 - 1.05840
1999.2000 1.00000 0.04930 - - 0.00880 - 1.05810
2000-2001 1.00000 0.04930 - - 0.00880 1.05810
Note-Rates are per$100 of assessed valuation
Source-County of Orange
�5 GENERAL OBLIGATION
BONDED DEBT RATIOS
LAST TEN FISCAL YEARS
Debt Service to
Total Debt General Fund Total General
General Bonded Assessed Market Percerd of Debt to Bonded Debt Per Service Expenditures Fund
Debt(000s) Value(0005) Assessed Value Population Capita Principal(000s) Interest(000s) (0009) (000s) Expenditures
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 3 115.757 0.40%
1994-95 $ - $ 12,314.146 0.000 186,587 $ - $ 445 $ 13 $ 458 $ 92,467 0.50%
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 0.000 192,430 $ - $ - $ - $ - $ 103,875 0.00%
1998-99 $ - $ 13.537,083 0.000 196.660 $ - $ - $ - $ - S 103,050 0.00%
1999.2000 $ - $ 15.319,007 0.000 199,327 $ - $ - $ - $ - $ 117.863 0.00%
20DO.2001 $ - $ 16,526,063 0.000 189,594 $ - $ - $ - $ - $ 122,139 0.00%
Source-Administrative Services Department,City of Huntington Beach
109
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 (Otitis) Change Deposits(Otitis) Percent Change
1991-92 5,041 rda S 81,250 rds $ 2,458,259 Na
1992-93 10,400 106.3 S 100,400 23.57 3 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) 3 84,388 (21.44) S 2.579,514 20.5
1995-95 7,594 69.9 S 110.375 30.79 S 2,581.844 0.1
1SW97 5,413 (28.7) $ 205.970 86.61 S 2,737,588 6.0
1997-98 6.368 17.6 3 206,035 0.03 $ 2,684,384 (1.9)
1998.99 6,735 5.8 $ 308.319 49.64 S 2.908,376 8.3
1999-2000 5,474 (18.7) S 207,509 (32.70) 3 3,654.438 22.2
20OD-2001 5,106 (6.7) S 153,279 (26.13)
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, 2001
(IN THOUSANDS)
ASSESSED VALUATION $ 15.877,065
DEBT LIMIT:12%OF ASSESSED VALUATION 1,905,248
DEBT APPLICABLE TO LIMITATION:
LEGAL DEBT MARGIN $ 1.905,248
Source-AdministretNe Services Department,City of Huntington Beach
STATEMENT OF DIRECT AND
OVERLAPPING BONDED DEBT
SEPTEMBER 30, 2001
200IF2OOl MNpad Vahntion$15.412.826.005(after OeduOnp 11530.7911.3011 of atnantaral radwelopmefd valuation)
OVERLAPPING TAX AND ASSESSMENT DEBT %Apparaer Dap O Wiwi
O.C.Tester Plan Obligations 7.485% 3 9,374,3M
Metropolitan Water District 1.569% 8,276,161
OC Sanitation Dist No.11 1.366% 172.526
City of Huntagton Beach Comm Fac.Dist No 1980.1 100.000% 2.05,000
City of Huntington Beady 1915 Ad Bonds 100.000% 605,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT s 20,483,031
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT
O.C.General Fund Obligations 7.486% 78.471.287
G.C.Pension OblIgatidn 7.468% 10.077.091
O.C.Transit Authority 7.486% 591.768
MIND of Orange County Water Facliities Corp 11.211% 6.019.746
O.C.Sanitation Distrfd No.3.COPS 12.817% 8.659,943
O.C.Sanitation District No.11.COPS 99.956% 3.389,458
OCWD Certificates of Participation 12.516% 28,813,S56
Coast ConanaHy,coup COPS 30.694% 4,923.318
Hill Beach Union Mph Sritool Oahu COPS 73.495% 139.641
Los Alamitos Unsiod Sdtool District COPS 1.366% 59.967
Fountain Valley Sdwol Dist COPS 97.660% 4,S61.192
City of Hufditlglon Beach General Fund OOepations 100.000% 87,407258
TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT s 227,134,23S
Less: OC Transit Authority(90%ace suppoilIM) (473.415)
OC Water District COPS(100%oaf aupportutp) (28.e13.S58)
MWDOC water Facktin Corporation(100%Soft Suppomag) (6,019.746)
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT s 193.827.518
GROSS COMBINED DEBT 3 247,6172266
NET COMBINED TOTAL DEBT 3 214.310.549
E)mhmfn Tax and Revenue Anticipation Notes.rownue,moftgage rewnue and tax allocation Ronda,
and na►OOrded capital bass obligations
Ratios to Assessed Valuation:
Total Overlapping Tax and Assessment Debt 0.13%
Combined Direct Debi(1116.733.006) 0.57%
Gross Combined Total Debi 1.61%
Not Combined Total Debi 1.39%
Slate School Building Aid Repoyabio as of W/=I$7,947,503
Source-Coufomis Municipal Statistics
110
CITY OF HUNTINGTON BEACH
DEMOGRAPHIC STATISTICS
City Population
as a Percent of
Square Orange County County
Year Population Percent increass Miles Population Population
1910 815 3.57 34.438
1920 1,687 107.0% 3.57 81.375 2.75%
1930 3,890 116.7% 3.57 82,451 5.91%
1940 3.738 1.3% 3.57 130,760 2.86%
1950 5,156 38.0% 4.72 216,224 2.39%
19W 11,492 122.8% 23.47 703.995 1.63%
1070 110.400 912.9% 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 2.382,211 7.99%
1995 188,S87 •1.1% 27.20 2,527.949 7.10%
2000 199.326 6.8% 27.20 2.828.400 7.05%
2001 189,594 .4.9% 27.20 2,848,289 6.88%
Source-Administrative Services Department,City of Huntington Beach
TOP TEN PROPERTY TAX PAYERS
SEPTEMBER 30, 2001
Percent of Estimated Tax Percent of
Assessed Valuation(000s) Toal (OOOs)" Total
McDonnell Douglas Corporation(8) S 355,494 2.07% i 754 2.45%
Huntington Center 51.438 0.30% 357 1.16%
Woter"M Constnxfiar(1) 36,012 0.21% 334 1.09%
Essex Huntington Breakers 27.543 0.16% 259 0.64% -
Kyray LLC 21.114 0.12% 214 0.70%
Atlanta HB LLC 27.308 0.16% 211 0.8g%
AES Huntington Beach LLC 99,720 0.58% 205 0.67%
LIU Corporation 22.988 0.13% 172 0.56%
Bentatt US Partners(2) 22,728 0.13% 158 0.51%
JT Development Corporation 12.033 0.07% 112 0.36%
Total Top Ten 676,676 3.93% 2.776 9.03% ,
Ali Dow Properties 16.526,083 96.07% 27,962 90.97%
Total 17.202.739 100.00% S 30.738 100.
Source HDL Coron,Cone(number of parcels in parenthesis)
The estimated total tax includes only the portion of the total tax paid to the Citys reporting
entity.Properties in different tax areas or In a redevelopment agency project area pay a different
percentage of tax to the Clty's reporting entity.
MISCELLANEOUS STATISTICS
SEPTEMBER 30, 2001
Year of Incorporation 1909
Charter City-city Council
Form of Govemment City Administrator
Area 27.2 Square Miles
Population 189,594
Miles of Street and Alleys 539
Number of City Tres 54,563
Fire Protection:
Number of Stations 7
Number of Firefighters 139
Police Protection:
Number of Stations 4
Number of Swan Police Officers 223
Municipal Water Department
Number of Customers 49,000
Average Daily Consumption Total 32.0 Mipion Gallons
Average Daily Consumption Per Person 163
Miles of Water Mains 520
Public Works:
Sanitary Sewers 578 Miles
Storm Sewers 136 Miles
Recreation and Culture:
Number of Pars 57
Park Acreage Developed 529
Miles of BONG 3.4
Annual Beady Visitors 7,000,000
Number of libraries 4
Volumes in Libraries 370,945
Full-rum Employees 1.039
Sauce-Administrative Services Deperbnent,City of Huntington Beach
111
r
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS
MICHAEL R.LUDINCPA
CRAIG W. SPRAKER-CPA
A PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS NITIN P.P#0.,Ci-
ROBERT). 11ANAN,CPA
2121 ALTON PARKWAY,SUITE 100 •PHILIP H.HOLTKAMP,CPA
IRVINE,CALIFORNIA 92606-4906 •THOMAS Ri:PERLowsKl,CPA
•HARVEY J. OEDER,CPA.
(949)399-0600 •FAX(949)399-0610 MICHAEL C. EI)h6Ati7-CPA
www.diehlevans.com •A PROFESSIIAL CORPORATION,
March 6,2002
City Council
City of Huntington Beach
� D
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, 2001, 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
During our audit,we noted that the City's method regarding the reconciliation of cash to the general ledger
was not functioning efficiently. We have included various issues that we observed that are discussed
herein.
Checking Account:
We noted that amounts reported on the checking account as "reconciling items" between the bank
balance and general ledger are either not identified, or when identified,the reconciling items are not
recorded to the general ledger in a timely manner.
All items reported on the cash reconciliation as "reconciling items" should be identified and
investigated within 30 days and be recorded to the general ledger within this time period.
- 1 -
OTHER OFFICES AT: 2965 ROOSEVELT STREET 613 W.VALLEY PARKWAY,SUITE 330
CARLSBAD,CALIFORNIA 92008-2389 ESCONDIDO,CALIFORNIA 92025-2598
(760)77,299-2343•FAX(760)T29-2234 (760)741-3141•FAX(760)741-9890
'Cash(Continued)
Cash with Fiscal Agent:
The financial activity related to cash held by fiscal agent on various debt issues was not recorded on the
general ledger until the end of the fiscal year.
Financial activity related to debt issues should be recorded monthly to properly reflect debt payments,
outstanding debt balances and amounts held by the fiscal agent in reserve or construction accounts.
Subsidiary Reports
We noted that the total account balance on the subsidiary ledgers for accounts receivable and accounts
payable did not agree to the general ledger as the total account balances on the subsidiary ledgers are not
being reconciled on a periodic basis.
The balances between the subsidiary reports and general ledgers should be reconciled periodically to
accurately identify customer balances and maintain the integrity of the general ledger balances. The
subsidiary reports should be reconciled to the general ledger on a monthly basis.
Investments
At September 30, 2001, we noted that the total City pooled investments in the Local Agency Investment
Fund (LAIF) was $39,997,966 which consisted of a City account balance of $10,894,466 and a
Redevelopment Agency account balance of$29,103,510.The City's investment policy states that"the City
may invest up to $20,000,000 per agency in this fund (LAIF)" which allows the City to invest up to a
combined total amount of$40,000,000 in LAIF.The current LAIF limitation for each of the two accounts
under the State's policy is $30 million and we understand the City does not plan to increase this limit in
their policy. Although total LAIF accounts are under the $40 million pooled total, the account for the
Redevelopment Agency's investment exceeded the limitation allowed by the investment policy. The City
Treasurer has represented that an adjustment to the LAIF balances subsequent to year end was made to
ensure compliance with the investment policy.
We recommend the investments held by the City are monitored to ensure compliance with the investment
policy.
General Ledger Accounts
As part of the conversion to the JD Edwards accounting software, "legacy conversion accounts" were
established to carryover beginning balances. At September 30,2001,many of these conversion accounts
remained on the general ledger resulting in accounts which were duplicated and not descriptive. This
resulted in certain instances where conversion accounts needed to be combined with other accounts to
obtain the correct balance. These processes took additional time to identify accounts correctly and obtain
balances.
We recommend the "legacy conversion accounts" be reviewed and combined with other accounts as
needed and these accounts be more descriptive to make the general ledger more readable.
-2 -
V
Inventor
At September 30,2001,inventory amounts at the general warehouse(public works)were not reconciled to
the inventory listing as a physical inventory was not completed. We observed differences between the
actual inventory and the amounts reported on inventory lists.Based on our inquiries,a physical inspection
has not occurred within the last three to five years.
We recommend that an actual physical inventory be completed by staff independent of the storekeeping
function and the general ledger or inventory listing be adjusted after analyzing any variances.
Loans Receivable
During our review of the financial activity for the Redevelopment Agency,we noted that the Agency does
not have a complete listing of notes receivable (notes) which have provided funding for development
activities. The Agency may collect"principal payments" on these notes based on future events.
The Agency should compile a list of all notes with detailed information on the payee and terms of
repayment. This list would assist the Agency in ensuring compliance with various agreements.
Governmental Accounting Standards Board Statement No. 34
The City of Huntington Beach will need to implement Statement No. 34 by the fiscal year ending
September 30, 2002. The Statement will require that the City present financial statements under the full
accrual method of accounting as well as under the modified accrual method of accounting. The most
significant effect of this change will be the reporting all general fixed assets and all general long-term debt
on the balance sheets of the funds responsible for these items. The reporting of general long-term debt on
fund balance sheets will include loans between the City and the Redevelopment Agency and other intercity
loans, if present. As a result, significant adjustments to fund balances may occur in the year of
implementation. Proprietary funds will not be affected, as they are presently required to report under the
full accrual method of accounting.
Statement No. 34 also requires that significant groups of infrastructure assets constructed or acquired in
fiscal years ending after June 30, 1981 be valued at estimated original cost and reported on fund balance
sheets. This is a significant change in that infrastructure assets were not previously required to be
capitalized. The required date for the capitalization of infrastructure assets in place prior to the adoption of
Statement No. 34 is four years after the implementation of the Statement. For the City of Huntington
Beach,this will need to occur by the fiscal year ending September 30, 2006.
As part of the Statement No. 34 implementation, we recommend the City perform an inventory of its
subsidiary listing of fixed assets. The City should verify physical assets on hand and review the list for
reasonableness as to the amounts on the listing.
Journal Entries
We noted that certain employees can create and post their own j ournal entries to the general ledger without
approval.
We recommend that the journal entries posted to the general ledger be approved by someone independent
of the preparation of the journal entry to properly segregate activities and improve internal controls.
- 3 -
r
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 police grant programs on a
timely basis. This was noted for the Universal Hiring Grant, the SWAT Training Fund and COPS
More Grant.In addition,certain reports were not filed in a timely manner with the Office of Criminal
Justice Planning in relation to the grant activity on a quarterly basis.
We recommend that reimbursements for expenses be reviewed by accounting staff and be submitted
promptly to the granting agencies.
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 March 6, 2002.
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.
LLjo
-4 -
City of Huntington Beach
Ito _ INTER-DEPARTMENT COMMMUNICATION
HUNTINGTON BEACH
_ era C
TO: Honorable Mayor and City Council.Members . �.
VIA: RAY SILVER, City Administrator
FROM: CLAY MARTIN, Director of Administrative Services- '� -`' -r
SUBJECT: Staff Responses to Management Letter from Diehl, Evans and Cpmpaany
DATE: May 1, 2002
The City of Huntington Beach engaged Diehl, Evans to conduct an independent audit of the
City's financial statements for the fiscal year 2000/2001. In the process of conducting their
audit, the auditors have made ten 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
ten 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 — Checking Account
Diehl Evans found that reconciling items on the bank reconciliation were not booked on a
timely basis. The City concurs. All throughout the year the Finance staff was "catching up"
on bank reconciliation. .The new JD Edwards system caused difficulties in the-reconciliation --
process due to 'integrity,problems, conversion.issues, and,understanding the capabilities, <_
and limitations of the new system:` The lengthy list of outstanding reconciling Items was
due to the complexity of the new system and concern that items listed as "reconciling" for
one month may be cleared in a subsequent month. .
Consequently, these were not always booked on a timely basis. The benefit of adopting
the auditor's recommendation is better accounting records and reduced possibility -of _
unauthorized or undiscovered transactions. For fiscal year 2001/02, staff is much more
aware how the new JD Edwards system operates. The.reconciliation's will be timelier an -
the reconciling items will be followed up on a timelier basis.
•l -e
Staff Responses to Management Letter from Diehl, Evans and Company
Cash with Fiscal Agent
Diehl, Evans found the.City did not book the journal entries relating cash.with fiscal agent in
a timely manner... The City concurs. With ..all the . backlog of accounting work,.. a
management decision was made that booking these entries was a lesser priority than other
work. .-Staff considers this to be a lower priority work demand. The benefit of adopting the
auditor's recommendation is more timely accounting records.- Staff-will prioritize the_cash
with the fiscal agent as a higher priority for fiscal year 2001/02.
Subsidiary Reports
Diehl, Evans found the City's subsidiary ledgers are not being reconciled to the general
ledger on a periodic basis. The City concurs. This is a result of integrity problems-with the
JD Edwards system. Until the integrity issues are resolved, it will be impossible to
accurately reconcile these ledgers. The benefit of adopting the auditor's recommendation
is better accounting records. Staff will continue to monitor and work with the new software
to ensure that the subsidiary ledgers have integrity.
Investments
Diehl, Evans found that the City's investment in one L.A.I.F. account exceeded the limit in
the investment policy for an individual account, but the L.A.I.F. accounts in total were below
the maximum amount allowed in the investment policy. The City concurs. This was an
administrative error, which does not affect any operations, and an adjustment was made so
that both L.A.I.F. accounts are in compliance with the investment policy. The benefit of
adopting the auditor's recommendation is to insure that the City remains compliant with the
investment policy for an individual L.A.I.F account. Staff has already corrected the
allocation of investments as of February 27, 2002.
General Ledger Accounts
Diehl, Evans found that the City, while converting from its Legacy System, utilized certain
account descriptions, which made the auditing of the balance_s difficult. The City concurs.---
These
. accounts .were -created to .track. carry.over,-balances more effectively,-,out_system
problems made their continued use for part of the year necessary.�'The benefit:of adopting '
`the auditor's recommendation is better accounting records. Staff will review and make
-necessary changes to eliminate the Legacy conversion accounts.
Diehl,Evans found that their test counts at the general warehouse showed discrepancies
- -between the listed and actual quantities of items, citing that there_has not been a complete -- --
inventory of this warehouse within the last three to five years. The City concurs. The
benefit of adopting the auditor's recommendation is better inventory records and reduced
Memo-Responses to Management Letter r -2- Wednesday,May 01,2002 4:09 PM
Staff Responses to Management Letter from Diehl, Evans-and Company
risks of inventory shrinkage. Staff will- have counts of both inventories conducted by
members of the division who do not have access to inventory records.
Loans Receivable
Diehl, Evans found that the Redevelopment Agency does. not have a complete listing of
notes and loans that provided funding for developers. These notes do not have .fixed
repayment schedules, but generally have principal collected only based on future events .
(selling property, etc.) The City concurs. The benefit of adopting the. auditor's
recommendation is that this practice would assist in ensuring compliance with various
agreements. Staff will maintain the list of these loans on an ongoing basis.
GASB 34 -
Diehl, Evans found that the City would need to convert its financial statements and
accounting records to comply with Government Accounting Standards Board Statement
#34 which will significantly change the City's financial statements. Further, that the City
should also take a 100% inventory of all assets on hand. The City concurs. The benefit of
adopting the auditor's recommendation is compliance with accounting requirements.. Staff
is currently preparing for the conversion. The inventory has been conducted.
Journal Entries �-
Diehl, Evans found that the person who prepares them could approve journal entries. The
system should be changed so that the person preparing the entry does not approve it. The
City concurs. The benefit of adopting the auditor's recommendation is better internal
controls. Staff initiated a manual change effective April 1, 2002. While the JD Edwards
System continues to allow this practice, staff is currently working to'determine the best way
to ensure that the system will only accept a different individual than the one who prepares
them approves entries.
-
Diehl, Evans found that the City had a few grant funds in which no activity was recorded. In
_ addition, grant reimbursement requests were not being requested. in a timely manner. The
City concurs. , The fund``activity-needs to be' reviewed-to determine the` appropriate
recording and closing out of fund amounts. The request for reimbursement needs to be
more timely filed. The. benefit of adopting the auditor's recommendation is improved
collection and reporting over the grants. The Administrative Services staff will work with - -
other department's staff to assist in the preparation of the requests. In addition, the various
funds will be reviewed for possible closure.
CM:DTV:skd
Memo-Responses to Management Letter -3- Wednesday,May 01,2002 4:09 PM
City
-of Huntington Beach
Comprehensive Annual Financial Report
For the Year Ended
September 30, 2001
dJ 'HOd3O PLO.►J giiP-,,nH
jo A.I.M
=t,::�
Independent Financial Audit
■ The financial audit conducted for the City is the same type of audit
that is performed annually on all publicly traded corporations.
■ The purpose of an auditor's work is to form an opinion as to fairness of
the financial representation presented by the financial statements.
■ Transaction test work is performed to obtain confidence in the accuracy
of financial operations.
■ 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.
Types of Financial Audit Opinions
. Unqualified
. Qual if ied
. Adverse
. Disclaim
Hyperlink to Slide 4 - Diehl Evans Letter
DIEHL, EVANS & COMPANY, LLP
CERTIFIED PUBLIC ACCOUNTANTS&CONSULTANTS
MICHAEL R.LUDIN,CPA
CRAIGA PARTNERSHIP INCLUDING ACCOUNTANCY CORPORATIONS NITIN W. TEL,SPR CPA CPA
NITiN P.PATEL,CPA
ROBERT J.CALLANAN.CPA
2121 ALTON PARKWAY,SUITE 100 •PHILIP H.HOLTKAMP,CPA
IRVINE,CALIFORNIA 92606.4906 •THOMAS M.PERLOWSKI,CPA
•HARVEY).SCHROEDER.CPA
(949)399-0600•FAX(949)399-0610 MICHAEL C.FRIEDMAN,CPA
www.dichlevans.com March 6,2002 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 30,2001 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 auditing standards generally accepted in the United States
of America 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, 2001
and the results of its operations and cash flows of its proprietary fund types for the year then ended in
conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated March 6,
2002 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 -
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.
L L P
- 2-
Responses to Management Letter
Finding Response Cost/Benef it Implementation Plan
Cash - Checking Account Concur- All throughout the Cost- Administrative Time For fiscal year 2001/02,staff is
Reconciling items on the bank year,the Finance staff was much more aware how the new
reconciliation were not booked "catching up" on bank Benefit- Better accounting JDEdwards System operates. The
on a timely basis. reconciliation. The new reconciliations will be more timely
JDEdwards System caused records and reduced possibility and the reconciling items will be
difficulties in the process due transactions.
or undiscovered followed up on a more timely
to integrity problems, tr .
basis.
conversion issues,and under-
standing the capabilities and
limitations of the new system.
The lengthy list of outstanding
reconciling items was due to the
complexity of the new system
and concern that items listed
as"reconciling" for one month
may be cleared in a subsequent
month. Consequently, these
were not always booked on a
timely basis.
Responses to Management Letter
Finding Response Cost/Benef it Implementation Plan
Cash with Fiscal Agent Concur - With all of the Cost- Administrative Staff will prioritize the cash with
The City did not book the backlog of accounting work,a Time fiscal agent as a higher priority
journal entries relating cash management decision was made for fiscal year 2001/02.
with fiscal agent in a timely that booking these entries was Benefit- More timely
manner. a lesser priority than other accounting records.
work. Staff considers this to
be a lower priority work demand.
Subsidiary Reports Concur- This is a result of Cost- Possible staff and Staff will continue to monitor and
The City's subsidiary ledgers integrity problems with the consultant time to correct the work with the new software to
are not being reconciled to JDEdwards System. Until the JDEdwards System. ensure that the subsidiary ledgers
the general ledger on a integrity issues are resolved, have integrity.
periodic basis. it will be impossible to Benefit- Better accounting
accurately reconcile these records.
ledgers.
Responses to Management Letter
Finding Response Cost/Benef it Implementation Plan
Investments Concur- This was an Cost- None. Staff has already corrected the
The City's investment in one administrative error which does allocation of investments.
L.A.I.F.account exceeded the not affect any operations and an Benefit-Compliance with
limit in the investment policy adjustment was made so that investment policy for an Adjustment made 2/27/02.
for an individual account, but both L.A.I.F.accounts are in individual L.A.I.F.account.
the L.A.I.F.accounts in total compliance with the investment
were below the maximum policy.
amount allowed in the
investment policy.
General Ledger Accounts Concur- These accounts were Cost- Administrative Time. Staff will review and make
The City, while converting from created to track carry over necessary changes to eliminate the
its Legacy System, utilized balances more effectively, Benefit- Better accounting 'Legacy" conversion accounts.
certain account descriptions but system problems records.
which made the auditing of the made their continued use for
balances difficult. part of the year necessary.
Responses to Management Letter
Finding Response Cost/Benef it Implementation Plan
Inventory Concur CoSt- Administrative Time. Staff will have counts of both
The test counts at the general inventories conducted by staff
warehouse showed Benefit- Better inventory that do not have access to
discrepancies between the records and reduced risks of inventory records.
listed and actual quantities of inventory shrinkage.
items. There has not been a
complete inventory of this
warehouse within the last
three to five years.
Loans Receivable Concur- Staff is now keeping Cost- Administrative Time. Maintain the list of these loans on
The Redevelopment Agency this list an ongoing basis.
does not have a complete Benef it- would assist in
listing of notes and loans that
provided funding for ensuring compliance with
various agreements.
developers. These notes do
not have fixed repayment
schedules, but generally
have principal collected
only based on future events
(selling property,etc.)
Responses to Management Letter--
Finding Response Cost/Benef it Implementation Plan
GASS 34 Concur Cost- Administrative Time. Staff is currently preparing for
The City will need to convert its the conversion. The inventory has
financial statements and accounting Benefit-Compliance with been conducted.
records to comply with Government accounting requirements.
Accounting Standards Board Statement
No. 34 which will significantly change
the City's financial statements. The
City should also take a 100% inventory
of all assets on hand.
Journal Entries Concur Cost-Time to change the Staff will determine the best way
Journal entries can be approved system. the JDEdwards System can work to
by the.person who prepares ensure that entries are approved
them. The system should be Benefit- Better internal by a different individual than
changed so that the person controls. the one who prepares them.
preparing the entry does not
approve it. Staff initiated a manual change as
of April 1, 2002. While the
JDEdwards System continues to
allow this practice,staff is currently
working to determine the best way
to ensure that the system will only
accept a different individual than
the one who prepares them approves
entries.
Responses to Management Letter
Finding Response Cost/Benef it Implementation Plan
Grants Concur- The fund activity Cost- Administration staff The Administrative Services staff
The City had a few grant funds needs to be reviewed to and other Department staff's will work with other department's
in which no activity was determine the appropriate time. staff to assist in the preparation
recorded. In addition,grant recording and closing out of of the requests. In addition,the
reimbursement requests were fund amounts. The request Benefit- Improve collection various funds will be reviewed
not being requested in a for reimbursement needs to and reporting over the grants. for possible closure.
timely manner. be filed more timely.
Hyperlink to Slide 11 - GFOA Award
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Huntington Beach,
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
September 30, 2000
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports(CAFRs)achieve the highest
standards in government accounting
and financial reporting.
'TEWM VA
aFpg
u�! M y;
: OAMA07i Pr sident
CUMIN
Executive Director
-Xc-
Hyperlink to Slide 12 - Balance Sheets
r
CITY OF HUNTINGTON BEACH
COMBINED BALANCE SHEET
ALL FUND TYPES AND ACCOUNT GROUPS
SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS FOR SEPTEMBER 30,2000
(IN THOUSANDS)
FIDUCIARY FUND
GOVERNMENTAL FUNDS PROPRIETARY FUNDS TYPES ACCOUNT GitO11PS Memorandum Onlyi
Spedal General Fixed General Long-Term
ASSETS AND OTHER DEBITS Gerard Revenue Debt SWcs CapitalProlectal Entmyofte trasmaiservicalTrustanclAgencyl Assets Debt Account TOWS 2001 Totab 2000
Cash and invesbcenb(Note 3) S 3,186 S 25,207 6 2.476 S 1ZO54 S 43,048 S 15.096 S 15.185 S - i - 5 116,262 S 125,295
Cash W M Fiscal Agent(Note 3) - - 10,082 34.728 - 1.225 873 - - 46.906 17.110
Tom Receivable 15.344 409 1,594 43 - - - - 17.390 19.724
OtlxYReceivables 1,571 7,670 2D6 4,433 3,479 551 532 - - 18,642 19,342
Unbisad Receivables 767 - - - 5,23o - - - - 5.997 5.427
finer" 760 - - 1.104 - - - - 1,884 1.543
Oue from Other Funds(Note 10) 3�299 - - - - - - - 3,209 1.330
Deposits and Other Assets 138 2.172 - - - 1.393 124 - - 3,827 4.018
Advances to Other Funds(Note 10) 27.112 6,738 18.468 2.541 2.894 - - - 57.751 57.049
Investment in Joint Vert"(Nola 18) - - - - - - - 328 - 328 365
Land Held for Resat - - - 9,139 - - - - - 91139 15.401
Property.Plant end Equomert(Net) _ _ _ 48.783 20.383 - - - 69.176 68.073
General Fixed Assets(Note 15) - - - - - - - 146,457 - 146,457 152.324
Amoat Available in Debt Service Funds(Note 16) - - - - - - 12,909 12.969 19.485
Amount to be Provided for Payment of Lon¢Tann Debt 191,596 1191,595 161,329
TOTAL ASSETS AND OTHER DEBITS S 52,1T7 f 42,394 S 32,626 9 62,948 6 104,638 38,666 f 16,714 5 146,7116 204,665 6 701JI06 5 665J516
LIABILITIES,FUND EQUITY AND OTHER CREDITS
LIABILITIES:
Accounts Payable f 3.084 S 2,574 S 376 S Z769 6 3.9W 5 425 S 88 5 - 6 - f 13,334 S 7.059
Other Accrued I'alaftes 3.349 104 29 221 433 4.138 3,551
Deposits 972 - 161 154 1.531 9.538 - - 12.356 10.362
Leases Payable(Note 13) - - - 431 1,864 - - 7,315 1,583
Due to Mar Funds(Nate 10) 206 42 508 1.089 1.374 - - - ILM 1.330
Tex and Revenue Anticipation Notes - - 1e,400
Imamst Payable on Tax and Revenue Anticipation Notes _ _ _ - - - - - - - 702
Advances from Other Funds(Naas 10.12.and 13) - _ _ - 244 - - - 67.507 67.751 67.049
Claims Payable(Note 9) - - - 10,177 - - - 10.177 9.743
Deterred Revenue(Note 5) 9,3$4 11,328 BID 2.057 - - - - 23,659 17,385
Lag-Term Debt(Watt 12) - - - - - - - - 138.90 138.983 117.874
Compensated Absences(12 and 13) 472 82 6.075 8.629 6,592
TOTAL LIABILITIES 16.T66 14,212 1,769 SAW 7.218 14,446 9.624 2"AW 274,639 24SAW
FUND EQUITY AND OTHER CREDITS:
Contributed Capital(note 11) - 43.069 3.815 - 46.884 49.621
bhvedmard in General Fixed Assets _ _ _ _ - - _ 146,785 - 146,7B5 152,689
Retaied Ewi ga(Aoomulated Deficits)(notes 16 and 19):
Reserved - - - - 1.228 - - 1=0 1,175
lMreserved - - - 53,551 19.170 - 72.721 50.603
Fund Balances(Notes 16 and 19):
Reserved 23.677 0.484 18.468 49.423 - - 7.090 - - 105.142 103.612
Lhreserved:
Designated 11.129 11.876 - 3.957 - - 26.982 24.8%
UndesiDeted 612 9.622 12,969 3.941 27,344 23.619
TOTAL FUND EQUITY AND OTHER CREDITS 36,41a 2a,t02 31,437 $7,321 96,620 24,213 7JT80 146,7a6 _ _ 408,216
TOTAL FUND EQUITY,LIABILITIES,AND OTHER CREDITS 62,177 S 4Z,394 f 32,826 6 62,948 S 104,636 6 36.66a 16,714 6 1f6,766 6 294,666 5 791,606 S MA15
See Independent Auditors'Report arhd Notes to General Purpose Financial Statements 3
f ` ,
CITY OF HUNTINGTON BEACH
COMBINED STATEMENT OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCES
ALL GOVERNMENTAL FUND TYPES
FOR THE YEAR ENDED SEPTEMBER 30,2001
WITH COMPARATIVE TOTALS FOR THE
YEAR ENDED SEPTEMBER 30,2000
(IN THOUSANDS)
Fliducira Fans
Types Totals(Memorandum terry)
apaclal Rawnue Dents."Im Capam FWeMetre
REVENUES: Caramel Fund Fnnda Funds Funes Trust 2001 2000
Property Twee S 30,735 $ - $ 8,122 $ - S - S 38.960 S 37.645
Dow Tam 58,705 2,723 - 795 60.223 52.194
liosroas and Pemvts 5,898 915 - 91 - 6,902 8.538
Fen,ForNit res and Penalties 4.092 - - - - 4.092 4.018
From Use of Money and Property 7.333 2,229 3.749 Z460 41 15.812 14,8W
FmmOgmAgerrbs 13.571 15,837 - 2,228 31,834 32A21
OmMm for Current Senke 9.664 430 - 375 - 10.459 1GA77
Otlrar Sal 450 SW 1,691 9,603
TOTAL REVENUES 128,360 22,564 9,871 6,827 - 41 167i673 168,629
EXPENDITURES:
Currant
Ctty Candl 231 - - - - 231 277
CiyAtrnNsbamr 1.456 320 - - - 1716 1.799
Coy 7mmurer Ole - - - - 918 884
CITY Aaorrey 2.458 - - 485 - 2,943 2.227
City Clark 559 - 559 451
AdmMsnet re So vice 3.074 - - 3.874 3.559
Pbnnen Z201 128 - - 2=9 2.180
BuktV 2,589 2,589 2.384
Fire 18.085 67 - - - 16.142 17.471
Wmma)on System 2,814 - - - - 2.814 -
poke 37.812 1.266 - - - 39.081 36.140
m Economic Davdq t - 898 - 1.918 - 2.818 6.749
C-~Ity Services 9,906 1.373 - 118 - 11.395 9.815
Library Sewrom 3.641 267 - 357 - 4,255 3.984
PublieMMdn 20,973 2.710 1.187 24,870 25.2G!
Na 13spamwdel 12.724 223 145 2,206 15.298 18.572
Capital Outlay 1.900 14,581 - 17.194 12 33.887 10.740
Debt Service Mote 12Y
Principal - 130 11,460 294 - liAS4 8.333
from" 104 15.774 326 18.204 14,964
TOTAL EXPENDITURES 122,139 22,050 27,379 24,093 12 195,673 171,T92
EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 6,211 524 (17,508) (17,256) 29 (28,000) (3,093)
OTHER FINANCING SOURCES(USES): .
Operating Transfer;In(Note 10) 2.587 6.306 6,020 6.354 - 21,287 30.W9
Praooede of Long-Tam Debt(Nob 12) - 28 6.295 31.624 37.947 34.663
Payments to RerunArq Escrow _ _ _ _ - (4.573)
Operating Tmsfae Out(Nob 10) (14,053) (2.784) (1.304) (3.757) (21,908) (32,9W
TOTAL OTHER FINANCING SOURCES 0 SES) (11,476) 3,550 11,011 34,221 37,306 27,660
EXCESS OF REVENUE AND OTHER SOURCES OVER(UNDER)
EXPENDITURES AND OTHER USES (5,265) 4,074 (6.497) 16.955 2B 8.3W 24.587
FUND BALANCE-BEOINMNOOF YEAR 43,733 24,108 38,379 40,466 298 146,964 M397
Prior Period A4uWY ms(Note 19c) (31050) (445) (110) (3.605)
FUND BALANCE AS RESTATED 40,683 24,108 37,934 40,356 298 143,37E 122,397
FUND BALANCE-END OF YEAR = 35,418 S 2a,ia2 S 31.437 S 57,321 6 327 S 152,685 S 146,9a4
See Independent Auditors'Report and Notes to General Purpose Rnandal Statements