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2003/2004 Second Quarter Budget Report and 2002/2003 Compreh
CITY OF HUNTINGTON BEACH MEETING DATE: MAY 17, 2004 DEPARTMENT ID NUMBER: AS-04-016 Council/Agency Meeting Held: o c o x Deferred/Continued to: )(Approved 0 Conditionally Approved 0 Denied I 's ig ature —c c-,- <c' Council Meeting Date: MAY 17, 2004 Depa me ID Number: ASN-04-�l CITY OF HUNTINGTON BEACH w C-) REQUEST FOR ACTION D SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS SUBMITTED BY: WILLIAM P. WORKMAN, ACTING CITY ADMINISTRATOR PREPARED BY: CLAY MARTIN, DIRECTOR OF ADMINISTRATIVE SERVICES SUBJECT: RECEIVE AND FILE: FISCAL YEAR 2003/2004 SECOND QUARTER REPORT, FISCAL YEAR 2002/2003 COMPREHENSIVE ANNUAL FINANCIAL REPORT, AND MANAGEMENT LETTER TO FISCAL YEAR 2002/2003 COMPREHENSIVE ANNUAL FINANCIAL REPORT Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: 1. The second quarter (January 1, 2004 through March 31, 2004) of the city's fiscal year 2003/2004 has been completed. 2. The fiscal year 2003/2004 second quarter budget report provides an overview of the current state of the fiscal year 2003/2004 budget. The General Fund Unreserved, Undesignated Fund Balance at the end of fiscal year 2003/2004 is projected to be $5,405,000. 3. The city's Comprehensive Annual Financial Report has been completed for the 2002/2003 fiscal year. 4. The city's auditors Caporicci and Larson, CPAs have issued the final draft of the Management Letter to the fiscal year 2002/2003 Comprehensive Annual Financial Report. 3 H:\RCA's\2nd Quarter Report and Management Letter.doc -2- 5/12/2004 7:49 AM City Council City Clerk •General Fund Other.Funds �■General; ��ther 300,000 0 0 1,000,000 250,000 0 800,000 0 4•• _� 600,000 150,000 +76,486 275,764 0 841,823 0 400,000 753,362 100,000 _38"57,4^31 50,000 / 200,000 0 0 276,486 275,764 128,595 841,823 753,362 385,451 Budgeted Projected Expended Budgeted Projected Expended • • . : Community Services Economic Development ■'Gerieral Fun�dA Other Funds Generaall rEM,, FI Other Funds 16,000,000 14,000,000 14,000,000 4!854,589 4,650,560 12,000,000 AP2,000,000 Y , � 10,000,000 10,000,000 12,847 986 92,796,192 8,000,000 8,000,000 6,000,000 10,589,973 10,421,773 1,674,930 6,000,000 4,000,000 _ —47, 9 41000,000 _ _5,135,836 820,11 2 2,000,000 1000,000 /982-,285 91,1r363 2g2_346 0 0 15,444,562 15,072,333 6,495,049 13,830,271 13,707,555 5,418,182 Budgeted Projected MExpended Budgeted Projected Expended &0 7 T I • Fire Department Library Services ++ 'al Fund At Fundsr :'General undl er Funds n A 30,000,000 r 5,000,000 25,000,000 8,005,837 7,917,466 1 737,049 ,728,608 ��!! 4,000,000 20,000,000 , ,- ... 15,000,000 4628297 972,882 10,000,000 19 , , ,572,258 19,558,910 2,000,000 3,151,082 3,147,771 5,000,000 —9,1"'4` 50 1,000,000 — —1',472,749 0 p 27,578,095 2"I,476,376 13,770,647 4,888,131 4,876,379 2,445,631 Budgeted Projected Expended Budgeted Projected Expended • _ is. �� • • A Information Systems Non Departmental '� neral Fund Other Funds General Fu��nd Oth Funds 12,000,000 60,000,000 10,000,000 3,229,665E31,2rO6,929 50,000,000 w 31,33A,251,341 57,476 {4 �� 8,000,000 40,000,000 ram. 6,000,000 ° 30,000,000 " 16,676,602 4,000,000 8,022,209 7,623,268 480,952 20,000,000 2 ,537,253 _24,138,268 — 2,000,000 3,104,158 10,000,000 10,9269 0 / 0 11,251,874 10,830,196 3,585,110 55,894,729 55,389,60 668,8, Budgeted Projected Expended Budgeted Projected Expended • • . _ Planning Police Deparfiment ■General-,F�und "©tHer Funds !GeheralsFu ther Fun s 3,000,000 0 0 50,000,000 2,510,371 2,500,000 2 707 109 40,000,000 2,000,000 �;-� Wit,• =��;��r: ,,� - t yr . 1,500,000 '' 936,117 2,716,80 0 30,000,000 2 E, . 40,743,089 41,167,339 1,156,313 1,000,000 20,000,000 4 _ 1,403,5 3 19,479,006 500,000 10,000,000 — 0 0 2,936,117 2,716,802 1,403,583 43,450,198 43,677,710 20,635,319 Budgeted Rroie N WBTdgeted Projected Expended • pll or • PublTCW,'orks City Treasuirer •General Fund other Funds •Generafi und, Other Fundss 140,000,000 2,000,000 120,000,000 54,.765 53,67 100,000,000 1,500,000 .•, �. .�, , 80,000,000 r ,117,767,926 99,989,436 00011, 1.588,922 1,533,158 966 60,000,000 40,000,000 45,826,503 500,000 20,000,000 16+�,558r3,089 1 i 828,2,71 8;350:798 _ 0 0 134,351,015 115,817,707 54,177,301 1,643,687 1,586,829 806,534 Budgeted Projected Expended Budgeted Projected Expended General Fund Balance Sheet ( 2003/04 FY) 1st Quarter 2nd Quarter Total 2002/03 Ending General Fund (1) $14;940 (2) $14,974 Balance(Pg.18 CAFR) (September 30,2003) ' Total Fund Balance(Pg. 18 CAFR) 14,940 ; 14,974 Prior-Year Encumbrances(Pg. 18 CAFR) (2,749) 1 (2,757) Total Unreserved(Pg. 18 CAFR) 12,191 ; 12,217 1 Unaudited Est. 2 Audited Actual ADOPTED REVENUE $142 634 i $142,634 Property Tax 32,195 ; 32,195 ; Sales Tax 26,610 26,610 Transient Occupancy Tax 2,137 i 2,137 Utility Users Tax 19,114 ; 19,114 Franchises 10,441 10,441 Licenses&Permits 6,499 i6,499 Fines&Forfeitures 5,723 5,723 Use of Money 8,115 8,115 Vehicle License 10,900 10,900 Revenue from Other Agencies 1,244 i 1,244 Charges for Service 11,694 11,694 Other Revenue 250 i 250 Transfers In 7,712 7,712 TOTAL REVENUE 142,634 1142,634 i PROJECTED EXPENDITURE $142,245 i $142 301 i Operating Expenses Personnel,operating,and capital 125,118 1125,118 Equipment Replacement Department allocations from Non-Dept. 3,766 1 3,766 Liability Program General city insurance 3,768 3,768 Transfers Out Includes$1.6 m to General Fund Balance 11,511 11,511 Prior-Year Encumbrances Net of carry forward and cancellations 1,780 1,780 Additional Appropriations See memo page 3 for details 151 411 I Projected"Normal"Savings See memo page 2 for details (1,849) (2,053) Extraordinary Savings Frozen vacancies and operating (2,000) (2,000) TOTAL EXPENDITURE 142,245 :142,301 Not detailed In budget report calculations Total 2003/04 Ending General Fund $15,329 $15,307 Balance(Projected net of liabilities&reserves) (September 30,2004) I I Total Fund Balance 15,329 ; 15,307 Prior-Year Encumbrances(Pg. 18 CAFR) (2,749) (2,757) Reserve for Equipment Replacement (3,850) (3,850) Unreserved, Undesignated Fund Balance 8,730 8,700 Projected 2003/04"Available"General $5,501 $5,405; Fund Balance Unreserved, Undesignated Fund Balance 8,730 8,700 i Budgeted Transfer to Fund Balance 03/04 1,600 1,600 ADJUSTMENTS TO REVENUES Parking Fines Reduced due to vacancies (400) (700) Sports Complex Delay in opening for business (1,300) (1,000) Cost Allocation Charges To be eliminated from revenue projections (1,350) 1 (1,169) Property Tax(Employee Retirement) Held back pending further review. (1,279) (1,279) VLF Fee Reduction State budget ERAF revisions (500) (500) Fees, Permits,Charges for Services Revenue stream behind projection 0 1 (800) Property Tax Increase based on updated projections 0 i 500 Revenue Adjustments Revenue revisions already in acctg.system 0 53 Projected Fund Balance 5,501 5,405 ALL NUMBERS IN 1,000's Page 7 5/6/2004 City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Expenditure Summary By Type - All Funds R14113 MONTHLY (MonthlyRpt) For.the Pe�itid:Endin `>March.31°;2004 =:� 50.1% - of the FiscalYear Com"leted W Projected Prior Year Adopted Revised Year To Date Yea (Over)/Under �.w�q. Description Actual Budget Budget Expended %Expended Expenditure Budget 4 .' EXPENDITURES PERSONAL SERVICES " Salaries Permanent 65,033,961 67,670,992 67,692,310 31,017,019 45 8% 63 884 636 3,807,674 Salaries Temporary 4,355,852 3,599,389 3,649,115 1,381,902 37 9% '3 918 477,; (269,362) Salaries Overtime 6,812,193 4,929,137 5,228,043 3,435,771 65�7%; Z 553 883 (2,325,840) Termination Pay Outs 2,162,105 2,050,000 2,050,000 1,214,214 59:2% 2.247.318 (197,318) Benefits 23,863,151 30,974,732 30,966,132 10,822,276 - 3W9% 29 349 7Z0 1,616,362 PERSONAL SERVICES 102,227,260 109,224,260 109,585,600 47,871,182 437% 106.954,084 2,631,516 OPERATING EXPENSES It` " Utilities 6,826,623 8,836,368 8,846,284 2,782,396 31i5% 8 369 358 476,926 74 Purchased Water 8,507,528 9,463,500 9,463,500 7,092,596 9%° 9 277 089 186,411 Equipment and Supplies 6,160,517 6,527,310 7,116,676 4,1211,260 579% ,6 912 670 204,006 Repairs and Maintenance 6,185,992 9,861,274 10,899,826 6,325,728 � 580°0 1Q 681 829 217,997 Conferences and Training 502,325 1,054,289 1,054,429 266,917 25°3 1 035 735 18,694 Professional Services 14,651,239 16,679,251 20,050,539 8,887,106 44t3°/a 19 772;685 277,854 Other Contract Services 13,157,998 14,771,303 14,950,920 13,086,897 87.5% 14 0' 9 0 244,992 Rental Expense 341,920 2,225,183 2,452,298 2,263,824 9230% 24034319 48,879 Claims Expense 33,114,360 10,974,866 10,974,866 5,760,132 52 5% 10 755 369 219,497 Insurance 2,112,896 3,172,000 3,172,000 556,655 �� 175% 3 108 560, 63,440 Pension Payments 1,505,036 2,000,000 2,000,000 2,022,0001011% 2 022 000 (22,000) Contribution to Private Agency 0 (0) Payments to Other Governments 3,606,906 5,159,121 5,156,516 3,089,717 59 9% 5.053.386 103,130 Interdepartmental Charges 8,221,925 8,929,481 8,929,481 1,836,112 20 6% 8 750 89T 178,590 Expense Allowances 665,033 679,298 679,298 471,01169 3% 666,973 12,325 2 Other Expenses 1,572,461 2,357,706 2,419,446 328,580 i- „413'6% 2 371294 48,152 OPERATING EXPENSES 107,132,758 102,690,950 108,166,079 58,890,930 _ � 105,887,187; 2,278,892 � CAPITAL EXPENDITURES Land Purchase 35,427 150,000 150,000 153,000 102 0% 300 000 (150,000) Improvements 35,030,432 52,177,693 72,202,478 21,644,749 - 30 0% 56 200 907 16,001,571 Equipment 2,530,980 6,200,144 7,555,530 2,619,738 34 7P/o Z 404 419 151,111 Vehicles 1,291,289 1,569,704 2,195,510 1,742,747 794% 2151600 43,910 Software-Capital 291,105 2,566,424 2,820,090 330,123 17°/0 7761688 56,402 Capitalized PP&E Offset -8,853,303 -8,092 *. 8 092 8,092 CAPITAL EXPENDITURES 30,325,930 62,663,966 84,923,608 26,482,265 31 2° 68,812,622 16,111,086 NON-OPERATING EXPENSES t � 4x�s x 4 4 = Debt Service Expenses 15,174,238 20,689,975 23,053,198 12,505,307 i � 54 2% 23 053 198 (0) E Pass Through Payments 125,321 320,000 320,000 41,786 131/0 320 000. (0) Transfers to Other Funds 35,365,218 18,219,453 19,961,357 8,619,37219 961 357 (0) Depreciation 16,001,190 2,082,000 2,082,000 35,940 �1 7% =,2 084;900' (2,900) Loans Made 488,257 500,000 509,806 180,210 35:3% 509 806. (0) NON-OPERATING EXPENSES 67,154,224 41,811,428 45,926,361 21,1182,61445,929;261 (2,900) EXPENDITURES 306.840.172 316.390.593 348.601.648 154.626.992 44:4"/0 5327,58054 21,018,594 Qtr 2-All Funds 04 5/5/2004 Expenditure Summary By Type Page 8 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Summary By Category-Department - All Funds R14113 MONTHLY (MonthlyRpt) For the`,,Peri6d Eridin'§,March-,31 2004 r.. W =` =501c/o!-- Projected Prior Year Adopted Revised Year To Date Yea To�Date Projected (Over)/Under Description Actual Budget Budget Expended °/ E p nded_ Exp6ndlture Budge40 EXPENDITURES is PERSONAL SERVICES Administration 1,305,377 1,047,112 1,047,112 454,238 � 434% 967 883 79,229 Administrative Services 4,647,710 4,619,307 4,619,307 1,799,947 _44` 390% 4 327 640 291,667 City Attorney 1,430,371 1,666,171 1,686,865 724,400 429% -1 684 722 2,143 Building 2,236,865 2,588,929 2,588,929 1,147,297 -- 44�3% 2 540 639 48,290 City Council 133,064 147,788 147,788 68,254 462% 146 724 1,064 City Clerk 433,406 578,203 578,203 234,621 40 6"/0 494 211 83,992 Community Services 7,325,544 7,901,962 7,921,600 3,014,740 38t1% 7 672 221 249,379 Economic Development 1,419,949 1,527,655 1,490,879 665,992 7%o V,437 358 53,521 Fire 18,654,877 20,454,580 20,524,580 9,269,511 45. % 20 531 172 (6,592) 0 Library 3,210,673 3,134,671 3,151,436 1,445,747 459% 3160798 (9,362) Information Systems 719,338 3,565,772 3,565,772 1,340,286 376% -3 297 81:7 267,955 Non Departmental 2,073,378 2,050,000 2,050,000 1,162,133 5670/c 2 141 122 (91,122) Planning 1,974,870 2,227,546 2,227,546 925,194 41.5 2 022-.401i 205,145 Police 36,556,627 37,277,816 37,548,845 17011,914 �� 453% 3I 885 71Z (336,872) Public Works 18,974,556 19,236,769 19,236,769 8:076,243 42:0"/0 17491 674 1,745,095 CityTreasurer 1,130,656 1,199,969 1,199,969 530,667 442001`151984 47,985 PERSONAL SERVICES 102,227,261 109,224,250 109,585,600 47,871,184 -43t7% 1Q6�944 084 2,631,516 OPERATING EXPENSES _, , Administration 476,263 539,710 1,055,925 807,739 = 765% 1034807 21,118 Administrative Services 19,965,252 21,851,581 22,026,211 11,338,457 51 5%0 21 647,686 378,525 City Attorney 1,859,987 1,907,000 2,360,207 1,098,086 46, % 2 343 275 16,932 Building 807,492 593,644 715,965 336,577 47'0% :742 647 (26,682) City Council 123,360 128,698 128,698 60,341 ` 46 % 129; (341) City Clerk 121,864 263,620 263,620 150,810 57Qo 259 15T 4,469 Community Services 3,203,964 4,663,310 5,639,648 2,885,513 51 2/0 5 526 856. 112,792 Economic Development 920,714 4,481,800 2,962,907 569,16619 2"% 2-903 649 59,258 ft Fire 4,332,418 5,425,045 5,485,406 3,555,180 64 8% 5 403 3 1 82,035 Library 1,116,223 901,098 1,055,695 667,884 63 3%0 1034 581 21,114 Information Systems 2,714,794 4,192,903 4,199,977 2,041,772 486%0 _4 115 977 84,000 Non Departmental 30,381,218 11,856,000 12,867,884 7,141,034 55 5% 12 330 292 537,592 .1 Planning 411,480 261,375 698,571 478,389 601 13,970 Police 3,813,728 3,504,169 3,341,540 2,418,6495. 72 4% 3 274 71;0, 66,830 Public Works 36,329,832 41,752,393 44,973,905 25,065,465 55.7% 44 074 426 899,479 CityTreasurer 554,170 368,604 389,918 275,867 %Z0:8% 382,121 7,797 OPERATING EXPENSES 107,132,769 102,690,960 108,166,077 68,890,929 Ok 154 4°h 1 k 105;887,190. 2,278,887 Qtr 2-All Funds 04 5/5/2004 Summary By Category-Department Page 9 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Summary By Category-Department - All Funds R14113 MONTHLY (MonthlyRpt) 501"/o of the"Fiscal.YearCom leted = Projected Prior Year Adopted Revised Year To Date Year To Datex Projected (Over)/Under Description Actual Budget Budget Expended °/aExpended_ Expenditure Budget EXPENDITURES CAPITAL EXPENDITURES Administration 663 0 0 0 0 0% 0 (0) Administrative Services 4,093,349 0 0 0 0 0% 0 (0) City Attorney 0 0 0 0 0 d% 0 (0) Building 0 50,000 50,000 0t 0 0% 49 000 1,000 City Council 12,500 0 0 0 1A0% =0 City Clerk 0 0 0 0 (0)00% -= Community Services 68,590 463,500 502,913 143,894 28:% 492,855 10,058 Economic Development 1,603,873 5,522,883 8,146,858 3,701,468 i_` 45-4/0 8136 921' 9,937 Fire 181,809 830,971 1,313,800 818,977 62-3%0 1287 524 26,276 Library 0 0 0 0 0,0% 0 (0) Information Systems 201,136 3,293,078 3,486,125 203,051 58% 3416,403 69,723 Non Departmental -6,934,864 2,446,000 2,672,961 1,163,389 43,5% 2"611 411 61,550 Planning 0 10,000 10,000 0 0 0% 9,800 200 Police 1,526,074 1,607,923 2,126,479 963,017g 453% 2,083,949 42,530 Public Works 29,544,560 48,385,810 66,560,671 19,488,469 = 29 3% 50 671 937 15,888,734 City Treasurer 28,240 53,800 53,800 0 0:0% 52;724 1,077 CAPITAL EXPENDITURES 30,325,930 62,663,965 84,923,607 26,482,265 312% 1, „68,812523 16,111,085 NON OPERATING EXPENSES Administration 189,987 0 0 0 0 0% 0. (0) Administrative Services 75,336 64,137 64,137 0 � 00% 64137 (0) City Attorney 0 0 0 0 0.0% 0 (0) m Building 0 0 0 0 00 0 0. (0) City Council 0 0 0 0 -0:0% Q (0) City Clerk 0 0 0 0 0:0% 0 (0) Community Services 9,100,654 1,327,000 1,380,401 450,901 327% 1380401 (0) Economic Development 919,338 760,261 1,229,627 481,556 39:2% 1 229,627 (0) Fire 264,174 254,309 254,309 126,979 49.96%, 254309 (0) Library 681,000 681,000 681,000 332,000 48:8% W 681 000 (0) Information Systems 0 0 0 0 0 0% W 0 (0) Non Departmental 49,088,758 34,988,721 38,303,884 18,202,316 47 5% 38 306,784 (2,900) Planning 0 0 0 0 �0 0% _ Q (0) Police 623,896 400,000 433,333 241,740 s 433 333 (0) Public Works 6,211,080 3,336,000 3,579,669 1,547,123 43.2°/u 3 579 669 (0) City Treasurer 0 0 0 0 _k d 0 0% 0 0 NON-OPERATING EXPENSES 67,164,223 41,811,428 45,926,360 21,382,616 --46:6% 45'929 260 2,900 TOTAL EXPENDITURES 306,840,173 316,390,593 348,601,644 164,626,993 44 4°h_ 327,58.3,.057 21,018,588 Qtr 2-All Funds 04 5/5/2004 Summary By Category-Department Page 10 10:35 AM CITY OF HUNTINGTON BEACH STATEMENT OF REVENUES, EXPENSES,AND CHANGES IN NET ASSETS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2003 • (in thousands) Sewer Total Major Non-Major Service Refuse Enterprise Enterprise Water Fund Fund Fund Funds Funds Total OPERATING REVENUES: Sales $ 25,883 $ $ - $ 25,883 $ - $ 25,883 Rentals - - - 959 959 Fees for Service - 5,876 9,069 14,945 4,276 19,221 Other 960 - 54 1,014 92 1,106 TOTAL OPERATING REVENUES 26,843 5,876 9,123 41,842 5,327 47,169 OPERATING EXPENSES: Water Purchases 8,501 - 8,501 - 8,501 Supplies and Operations 3,418 3,055 9,681 16,154 4,154 20,308 Engineering 657 - 657 - 657 Production 3,104 - 3,104 - 3,104 Maintenance 2,040 - - 2,040 - 2,040 Water Meters 1,085 - - 1,085 - 1,085 Water Quality 301 - 301 - 301 In-Lieu Taxes to General Fund 3,909 - 3,909 - 3,909 Depreciation 1,928 720 - 2,648 220 2,868 TOTAL OPERATING EXPENSES 24,943 3,775 9,681 38,399 4,374 42,773 OPERATING INCOME(LOSS) 1,900 2,101 (558) 3,443 953 4,396 NON-OPERATING REVENUES(EXPENSES): Interest Income 1,253 118 33 1,404 78 1,482 Capital Improvement Fees 6,469 - - 6,469 - 6,469 TOTAL NON-OPERATING REVENUES(EXPENSES) 7,722 118 33 7,873 78 7,951 CHANGE IN NET ASSETS BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS: 9,622 2,219 (525) 11,316 1,031 12,347 TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers In - - - - 35 35 Transfers Out (3,018) - (3,018) (2,554) (5,572) Capital Contributions 97 4,534 - 4,631 - 4,631 TOTAL TRANSFERS AND CAPITAL CONTRIBUTIONS (2,921) 4,534 1,613 (2,619) (906) TOTAL CHANGE IN NET ASSETS 6,701 6,753 (525) 12,929 (1,488) 11,441 NET ASSETS-BEGINNING OF YEAR 98,928 21,056 (365) 119,619 14,"1 134,060 NET ASSETS-END OF YEAR $ 105,629 $ 27,809 $ (890) $ 132,548 $ 12,953 $ 145,501 See independent auditors'report and notes to financial statements 23 CITY OF HUNTINGTON BEACH STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2003 . (in thousands) Sewer Total Major Non-Major Service Refuse Enterprise Enterprise Water Fund Fund Fund Funds Funds FTotal Cash Flows from Operating Activities: Cash Received from Customers and Users $ 29,025 $ 5,845 $ 9,351 $ 44,221 $ 5,788 $ 50,009 Cash Paid to Employees for Services (4,733) (1,222) (179) (6,134) (1,649) (7,783) • Cash Paid to Suppliers of Goods and Services (20,809) (1,507) (9,646) (31,962) (2,522) (34,484) Other Operating Items (1,527) - 441 (1,086) 60 (1,026) Net Cash Provided(Used)by Operating Items 1,956 3,116 (33) 5,039 1,677 6,716 Cash Flows from Noncapital Financing Activities: Transfers In - - - - 35 35 Transfers Out (2,554) (2,554) Net Cash Provided(Used)by Non Capital Financing Activities - - (2,519) (2,619) Cash Flows from Capital and Related Financing Activities: Purchase of Plant,Property,and Equipment (8,853) - (8,853) - (8,853) Principal Paid on Long-Term Debt - - - (281) (281) Capital Surcharge 6,469 - 6,469 - 6,469 Net Cash Provided(Used)by Capital and Related Financing Activities (2,384) (2,384) 1,532 (852) Cash Flows from Investing Activities Cash Received from Investments 1,253 118 33 1,404 78 1,482 Net Increase in Cash and Cash Equivalents 825 3,234 - 4,059 768 4,827 Cash and Cash Equivalents,Beginning of Year 41,217 2,756 - 43,973 3,480 47,463 Cash and Cash Equivalents,End of Year $ 42,042 $ 5,990 $ - $ 48,032 $ 4,248 $ 52,280 Reconciliation of Operating Income to Net Cash Provided(used)by Operating Activities Operating Income(Loss) $ 1,900 $ 2,101 $ (558) $ 3,443 $ 953 $ 4,396 Adjustments to Reconcile Operating Income to Net Cash Provided(Used)by Operating Activities Depreciation 1,928 720 - 2,648 220 2,868 Decrease(Increase)in Accounts Receivable (2,534) (363) (565) (3,462) 287 (3,175) Decrease(Increase)in Unbilled Receivables 2,304 350 847 3,501 - 3,501 Decrease(Increase)in Prepaid Insurance - - - - - - Decrease(Increase)in Advances to Other Funds 2,894 - 2,894 - 2,894 Decrease(Increase)in Due from Other Funds (1,527) - (1,527) - (1,527) Decrease(Increase)in Inventory (50) - (50) - (50) Increase(Decrease)in Accounts Payable 68 190 35 293 95 388 Increase(Decrease)in Accrued Payroll 72 (4) 8 76 65 141 Increase(Decrease)in Due to Other Funds - - 235 235 - 235 Increase(Decrease)in Claims Payable - - - - - Increase(Decrease)in Advances from Other Funds (3,018) (3,018) - (3,018) Increase(Decrease)in Deposits (92) - (92) 12 (80) Increase(Decrease)in Compensated Absences 11 122 (35) 98 45 143 Net Cash Provided(Used)by Operating Activities $ 1,956 $ 3,116 $ (33) $ 5,039 $ 1,677 $ 6,716 See independent auditors'report and notes to financial statements 24 CITY OF HUNTINGTON BEACH STATEMENT OF FIDUCIARY FUND NET ASSETS FIDUCIARY FUNDS SEPTEMBER 30, 2003 • Trust Fund- Total Agency Retirement Assets: Funds Supplemental Fund Cash and Investments $ 7,552 $ 10,474 Cash with Fiscal Agent 2,119 - Accounts Receivable, Net 445 51 Total Assets $ 10,116 $ 10,526 Liabilities: Accounts Payable $ - 2 Due to Bondholders 3,369 - Total Liabilities 3,369 2 Net Assets: S Held in Trust for Pension Benefits and Other Purposes $ 6,747 $ 10,523 CITY OF HUNTINGTON BEACH STATEMENT OF CHANGES IN FIDUCIARY FUND NET ASSETS TRUST FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2003 Trust Fund- Retirement Supplemental Additions: Fund Employer Contributions $ 3,036 Interest Income 216 Total Additions $ 3,252 Deductions: Benefits 1,505 Change in Net Assets 1,747 Net Assets-Beginning of Year 8,776 Net Assets-End of Year $ 10,623 i • See independent auditors'report and notes to financial statements 25 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 0 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. Reporting Entity: The City of Huntington Beach is the primary government. It was incorporated in 1909, is a charter, full-service city. The form of government is Council-Manager. Component units are legally separate organizations for which the City Council is financially accountable, or organizations that if excluded from the accompanying financial statements,would make them misleading. The component units described below are blended (presented as if they are part of the primary government) with the primary government for financial reporting purposes because either the component units have governing bodies identical to the City's (the City Council) or provide services exclusively to the City. Financial accountability means the appointment of a voting majority of the component unit's board and either the ability to impose will by the City or the possibility that the component unit will provide a financial benefit or impose a financial burden on the City. • 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. Separately prepared financial statements are available for the Redevelopment Agency from the City's Administrative Services Department. • Huntington Beach Public Financing Authority (Public Financing Authority) —This corporation was formed in March, 1988 to issue debt to finance public improvements 0 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. There are separately prepared financial statements available for the Public Financing Authority available from the City's Administrative Services Department. • The City of Huntington Beach Community Facilities Districts 1990-1. 2000-1 . and Boeing (Community Facilities Districts), 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 Districts' debt is not an obligation of the City. There are no separate financial statements prepared for these entities. 26 • • • C/Votes to eLnancloal Cjta ments City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ■ The Huntington Beach Auto Business Improvement District (the Business Improvement District) was formed in 1992 to fund capital improvements within this non-contiguous district. The Business Improvement District's governing body is the City Council. The business owners within the district petitioned the City Council under the Streets and Highways Code to form the district, which assisted in the funding of an electronic reader board sign advertising the auto dealers. There are no separate financial statements for this entity. b. Government-Wide Financial Statements: The Government-Wide Financial Statements include a Statement of Net Assets, a Statement of Activities, and Changes in Net Assets. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. These statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Assets. The Statement of Activities presents changes in net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The statement of activities demonstrates the degree with which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect expenses are allocated to the various functions based on a proportionate use of services. The types of transactions reported as program revenues for the City are reported in three categories: 1) charges for current services, 2) operating grants and contributions, and 3) capital grants and contributions. Taxes and other items not properly included among program revenues are reported as general revenues. Government-wide financial statements do not provide information by fund or account group. They simply distinguish between governmental and business activities. The City's statement of net assets includes both current and non-current assets and liabilities. Financial Statement Classification In the Government-Wide financial statements net assets are classified in the following categories: • 27 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): b. Government-Wide Financial Statements: A Invested In Capital Assets, Net of Related Debt — This category groups all capital assets, including infrastructure, into one component of net assets. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduces this category. • Restricted Net Assets — This category presents restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. This category presents restrictions placed on the categories of Capital Projects, Debt Service, and Specific Projects and Programs as established by the City Council. Unrestricted Net Assets — represent the net assets of the City, not restricted for any project or other purpose. c. Fund Financial Statements: • Separate fund financial statements are prepared for governmental funds, proprietary funds, and fiduciary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. The City applies all applicable GASB pronouncements (including all NCGA Statements and Interpretations currently in effect) as well as the following pronouncements issued on or before November 30, 1989, to the business type activities, unless those pronouncements conflict with or contradict GASB pronouncements, Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARB) of the committee on Accounting Procedure. The City applies all applicable FASB Statements and Interpretations issued after November 30, 1989, except those that conflict with or contradict GASB pronouncements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation All governmental funds are accounted for on a spending or"current financial resources" measurement focus and the modified accrual basis of accounting. Only current assets and current liabilities are included on the Balance Sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are recorded when received in cash, except 28 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): d. Fund Financial Statements: that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources,which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. In the Fund financial statements, reserves and designations segregate portions of fund balance that are either not available or have been earmarked for specific purposes. The various reserves and designations are established by actions of the City Council and Management and can be increased, reduced or eliminated by similar actions. The City reports the following major funds: Governmental Funds: • General Fund is used to account for activity not required to be accounted for in another fund. • Redevelopment Agency accounts for the acquisition and construction of capital assets and the related debt service activity for certain projects in the City's Redevelopment project areas. • Public Financing Authority accounts for the activity of the Huntington Beach Public Financing Authority. • Grant Fund accounts for revenues and expenses of grant-related activity. • The Property Tax Refund Fund records the activity relating to the refund of property taxes for the Jarvis case. Proprietary Funds ■ Water Fund is used to account for water sales to customers ■ Sewer Service Fund accounts for user fees charged to residents and businesses for sewer services. ■ Refuse Fund is used to account for the activities of the City's refuse program Governmental Fund Financial Statements: Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net assets as presented in these statements to the net . assets presented in the Government-Wide Financial Statements. The City presents all major funds that met those qualifications. 29 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): e. Fund Financial Statements: • Proprietary Fund Financial Statements: Proprietary Fund Financial Statements include a Statement of Net Assets, a Statement of Revenues, Expenses and Changes in Fund Net Assets, and a Statement of Cash Flows for each major proprietary fund and non-major funds aggregated. Proprietary funds are accounted for using the"economic resources"measurement focus and the accrual basis of accounting.Accordingly, all assets and liabilities(whether current or non-current) are included on the Statement of Net Assets.The Statement of Revenues, Expenses and Changes in Fund Net Assets presents increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses. Fiduciary Fund Financial Statements Fiduciary Fund Financial Statements include a Statement of Net Assets and a Statement of Changes in Net Assets for Trust Funds. The City's Fiduciary funds represent Agency Funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The Agency funds are accounted for on the accrual basis of accounting. Contributions made are funded by a percentage of payroll and are recognized when the payroll is incurred. Fiduciary funds are not presented in the government-wide financial statements because these funds do not represent net assets available to the City. Reconciliations of Financial Statements Reconciliation of the Fund financial statements to the Government-Wide financial statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34. • 30 • City of Huntington Beach 0 Notes to Financial Statements For the Year Ended September 30, 2003 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): 0 d. Cash and Investments: The City records investments at fair value. The City pools cash resources of its various r funds to facilitate cash management. Cash in excess of current requirements is invested and reported as investments. It is the City's intent to hold investments until maturity. However, the City may, in response to market conditions, sell investments prior to maturity in order to improve the quality, liquidity or yield of the portfolio. Interest earnings are apportioned among funds based on ending accounting period cash and investment balances. The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and highly liquid investments with original maturities of three months or less at the time of acquisition. • In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available. The City participates in the Local Agency Investment Fund (LAIF), an investment pool managed by the State of California. LAIF has invested a portion of the pool funds in Structured Notes and Asset-Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as a result of changes in interest rates. The City early-implemented GASB Statement 40 (Deposit and Investment Risk Disclosures) The City's investment policy is further discussed in note 2 on page 36. 01 e. Capital Assets: Capital assets,which include property, plant, equipment, and infrastructure, are reported in the applicable governmental or business-type activities columns in the government- wide financial statements. Capital assets have an acquisition cost of $5,000 or greater • ($50,000 for infrastructure) and a useful life of two years or more. The City records all purchased capital assets at historical cost (where historical records are available) and at estimated historical cost where no historical records exist. Capital assets acquired from gifts or contributions are recorded at fair market value at the time received, or in the case of infrastructure assets, at City Council acceptance date. 31 0 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): e. Capital Assets: In the Government-Wide and proprietary fund financial statements, depreciation is recorded on the on the straight-line method over the estimated useful lives of the assets shown below and charged to the respective fund. No depreciation is recorded in the governmental funds of the fund financial statements. Production, pumping transmission and distribution plant 10 to 15 years General Plant 20 to 50 years Transportation Equipment 5 to 30 years Infrastructure 50 Years • Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of borrowing until completion of the project with interest earned on the invested proceeds over the same period. • f. Inventories: Proprietary inventories are valued at weighted-average cost. There are no inventories in governmental funds. g. Interfund Transactions: As a general rule, interfund transactions have been eliminated from the government-wide financial statements. Exceptions to this rule are payments in-lieu or charges for current service between the City's enterprise activity and the City's General Fund. Elimination of • these transactions would distort the direct costs and program revenues for the various functions. Certain eliminations have been made regarding interfund activities, payables and receivables. All internal balances in the Statement of Net Assets have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. • Numerous transactions occur between funds of the City resulting in operating transfers, amounts due 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. • 32 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): h. Long-Term Obligations: In the government-wide and proprietary fund financial statements, long-term obligations are recorded as liabilities in the. applicable governmental activities, business type activities, or proprietary fund-type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the debt for all issues after October 1, 2001. Premiums and discounts for debt issued before October 1, 2001 are not recorded or amortized. • In the governmental fund financial statements, bond discounts and premiums are recognized as another financing source or use. Issuance costs are recorded a current year expenditure. i. Employee Compensated Absences: • The Agency records the cost of all accumulated and unused leave time (vacation, sick, comp) as a liability when earned in the government-wide financial statements. In the fund financial statements these amounts are recorded as expenditures in the years paid since it is the City's policy to pay these from future financial resources, rather than available, • spendable resources. j. 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. In the government-wide financial statements, property tax is recorded when earned, • regardless of when levied, due, or received. In the fund financial statements, 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 that are collected more than 60 days after the fiscal year • end. Since the City's fiscal year differs from the County's property tax year, there is a difference between the property tax revenue recorded on the fund financial statements and the government-wide financial statements which is noted as a reconciling item in both the Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund Balance of Governmental Funds to the Statement of Activities and the Reconciliation of • the Balance Sheet of Governmental Funds to the Statement of Net Assets. 33 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): j. 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 k. 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. I. 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. m. 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. 34 City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 • 2. CASH AND INVESTMENTS: Cash and investments were recorded in the government-wide statements as follows (in thousands): Statement of Net Assets: Cash and Investments $ 22,490 Restricted Assets(Cash and Cash Equivalents) 70,797 Cash with Fiscal Agent- Restricted 22,850 Total Per Statement of Net Assets 116,137 Fiduciary Funds: Cash and Investments 18,026 Cash with Fiscal Agent- Restricted 2,119 Total Fiduciary Funds 20,145 Total Cash and Investments $ 136,282 At September 30, 2003 the City had the following investments and maturities (amounts in thousands): Investment Maturities In Years DEPOSITS: Fair Value Less than 1 1 to 3 3 to 5 more than 5 Total Demand Accounts $ 5,113 $ 5,113 $ - $ - $ 5,113 INVESTMENTS: U5 Treasuries 1,031 21 1,010 - - 1,031 US Agencies 56,807 8,345 10,112 38,350 - 56,807 Commercial Paper 26,847 26,847 - - - 26,847 Medium Term Notes 10,954 6,775 - - 4,179 10,954 Local Agency Investment Fund 35,530 35,530 - - 35,530 Subtotal of Investments 131,169 77,518 10,112 38,350 4,179 131,169 Total Deposits and Investments $ 136,282 $ 82,631 $ 10,112 $ 38,350 $ 4,179 $ 136,282 35 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 2. CASH AND INVESTMENTS (CONTINUED): Interest Rate Risk—As a means of limiting exposure to fair value losses arising from interest r rates, the City's investment policy limits investments over three years to be 30% or less. Credit Risk-State law limits investments in commercial paper and corporate bonds to have at least an "A" rating issued by a nationally recognized statistical rating organization. It is the City's policy to limit its investments in these investment types to the top two ratings issued by • these rating organizations. As of September 30, 2003, the City's investments in commercial paper were rated Al or better by Standard and Poor's, and p-1 by Moody's Investor's Service. The City's investments in medium-term bonds were rated AAA or AA buy Standard and poor's, and Aaa, Aa or A by Moody's. Concentration of Credit Risk — The City's investment policy limits investments in any one issuer, except for U.S. Government Agencies to no more than 10% of the investments. In addition, no more than 60% can be invested in U.S. Government Agencies and each investment type has a specific limit. 3. 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. 4. DEFERRED REVENUE: • Certain revenues in governmental funds are deferred until received. The property tax amounts are recognized in the year as revenue in the government-wide financial statements, but are recorded as deferred revenue in the fund financial statements. The other amounts are unearned revenue in both the funds and government-wide financial statements. The • amounts are as follows (in thousands): 36 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 4. DEFERRED REVENUE (CONTINUED): 0 Other Property Deferred r Taxes Revenue (Unavailable) (Unearned) Total General Fund $ 2,950 $ - $ 2,950 Grant Fund - 3,370 3,370 Redevelopment Agency 881 2,721 3,602 Non-Major Governmental Funds 19 19 Total $ 3,831 $ 6,110 $ 9,941 5. 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 0 represents an amount which is made by the employee, but is reimbursed to the employee by the City (the member rate). The member rate is set by contract and normally remains unchanged. The employer rate is an actuarially established rate, is set by CALPERS, and changes 0 from year to year. The employer rates for the fiscal year ending September 30, 2002 are: October 1, 2002 to June July 1, 2003 to 30, 2003 September 30, 2003 Local Miscellaneous 0.000% 0.000% 9 Local Safety 0.000% 8.997% 37 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 5. RETIREMENT PLAN — NORMAL (CONTINUED): b. Employer and Employee Contribution Obligations: The member rates are as follows: Rate Local Miscellaneous 7.000% • Local Safety 9.000% c. Annual Pension Cost: The City's annual pension cost of$5,588,323 was equal to the City's required and actual contributions. The required contribution was determined as part of a June 30, 2002 actuarial valuation using the entry age normal actuarial cost method. CALIPERS 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, 2003. Significant assumptions were: • Average amortization remaining period — 18 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 41 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. 38 • City of Huntington Beach 0 Notes to Financial Statements For the Year Ended September 30, 2003 5. RETIREMENT PLAN — NORMAL (CONTINUED): 0 d. Trend Information: Annual Pension Percentage of APC Net Pension 0 Fiscal Year Cost Funded Obli atoin 9/30/2001 $5,516 100% $0 9/30/2002 $4,642 100% $0 9/30/2003 $5,583 100% $0 6. RETIREMENT PLAN — SUPPLEMENTAL: a. Plan Description: The City provides a supplemental retirement plan for all employees hired prior to January 0 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 0 at retirement and remains constant for his or her life. Of the 1,033 active employees reported on the July 1, 2003 data, only 680 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 4.95% of total payroll for all permanent employees. Administrative costs of this plan are financed through investment earnings. • • 39 0 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 6. RETIREMENT PLAN — SUPPLEMENTAL (CONTINUED): c. Annual Pension Cost and Net Pension Obligation: • The City's annual pension cost and net pension obligation for this plan at June 30, 2003 were (in thousands): Annual required contribution $2,937 Interest on net pension obligation 472 Adjustment to annual required contribution (623) Annual pension cost 2,786 Contributions made 3,037 Increase (decrease) in net pension obligation (251) Net Pension Obligation — Beginning of Year 8,593 Net Pension Obligation — End of Year 8 34 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 (closed) • 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 6/30/01 $2,455 88% $8,337 6/30/02 3,092 92% 8,593 6/30/03 2,786 100% 8,342 • 40 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 6. RETIREMENT PLAN — SUPPLEMENTAL (CONTINUED): • d. Trend Information: 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% 0 1998 2,151 70% 1999 2,613 60% 2000 2,638 62% 2001 2,578 88% 2002 2,836 88% • 2003 2,937 103% 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 government-wide financial statements. The amount of this liability is $8,342,000. The benefits are recognized when due and payable. Actuarial studies and updates were performed since • 1991 and there is a substantial amount of unfunded pension benefit liability that would have been recorded as a liability in the government-wide financial statements if the studies would have been performed (see Note 10). • • 41 0 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 7. 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 6). • Below are the required disclosures for this plan (in thousands): Number of active participants 1,033 Employer's actuarially required contributions 766 Employer's actual contributions $591 Below is a summary of the Unfunded Actuarial Accrued Liability for the plan (in thousands) Actuarial accrued liability $11,307 Net assets available for plan benefits 1 $4,595 Unfunded Actuarial Accrued Liability $6,698 42 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 7. POST-EMPLOYMENT MEDICAL INSURANCE (CONTINUED): • b. Accounting and Funding: Under current generally accepted accounting principles, unfunded liabilities on other post- • employment benefits, are not required to be recorded in the financial statements. 8. 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 records all of these claims as expenditures in the General Fund. The liability for these claims is recorded as part of long-term obligations in the Government-Wide financial statements. The City records the amount of claims payable at year-end expected to be paid in the next 12 months as a liability in the General Fund in the fund financial statements. The full amount of claims is reported as a liability in the a government-wide financial statements. Liabilities include amounts incurred, but not reported. Liability Claims: Claims of up to $1,000,000 are paid from the General Fund. 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. Workers' compensation claims of up to$350,000 per claim and health claims of greater than $100,000 per claim are paid from these funds. 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. • 43 • • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 8. RISK MANAGEMENT (CONTINUED): Claims activity and liabilities relating to the current and prior year are (in thousands): • Health Workers Liability Insurance Compensation Insurance Total Balance October 1,2001 $ 200 $ 4,586 $ 5,391 $ 10,177 Additions 2001-2002 6,138 3,400 2,400 11,938 Reductions-2001-2002 (5,953) (2,921) (629) (9,503) Net Increase (Decrease)2001-2002 185 479 1,771 2,435 Balance September 30,2002 385 5,065 7,162 12,612 Additions 2002-2003 7,470 6,231 3,130 16,831 Reductions-2002-2003 (7,455) (4,727) (2,208) (14,390) Net Increase (Decrease)2002-2003 15 1,504 922 2,441 • Balance September 30, 2003 $ 400 $ 6,569 $ 8,084 $ 15,053 9. INTERFUND TRANSACTIONS: • a. Due To/From Other Funds: The amounts at September 30, 2003 were (in thousands): Due from Other Due to Other Funds Funds Governmental Funds: General Fund $ 3,048 $ - Public Financing Authority 3,048 • Non-Major Governmental Funds 4,123 4,123 Proprietary Funds Water Fund 1,527 - Non-Major Proprietary Funds - 1,527 Total Due to/from Other Funds $ 8,698 $ 8,698 • 44 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 9. INTERFUND TRANSACTIONS (CONTINUED): b. Transfers In/Out: The amounts at September 30, 2003 were (in thousands): Transfers In Transfers Out Proprietary Funds $ 35 $ (5,572) Governmental Funds 54,463 (57,096) Internal Service Funds 8,170 - Total 62,668 (62,668) • Transfers Out Non-Major Total • Transfers In: Redevelopment PublicFinancing Governmental Governmental General Fund Agency Authors Grants Funds Funds General Fund $ - $ 6,200 $ - $ - $ 1,678 $ 7,878 Redevelopment Agency 20,572 - - - 573 21,145 Public Financing Authority 2,934 226 - - 1,276 4,436 Grants 222 - - - 2,514 2,736 Non-Major Governmental Funds 794 1,799 7,003 2,142 958 12,696 • otal Governmental Funds 24,522 8,225 7,003 2,142 6,999 48,891 Non-Major Enterprise Funds - 35 - - 35 Internal Service Funds 8,170 - - - 8,170 Total Transfers Out $ 32,692 $ 8,260 $ 7,003 $ 2,14 $ 6,999 $ 57,096 Transfers Out • ransfers In: Non-Major Total Transfers Water Fund Enter rise Funds In General Fund $ - $ 194 $ 8,072 Redevelopment Agency 3,018 24,163 • Public Financing Authority - 383 4,819 Grants - 2,736 Non-Major Governmental Funds - 1,977 14,673 Total Governmental Funds 3,018 2,554 54,463 Non-Major Enterprise Funds - 35 • Internal Service Funds - 8,170 Total Transfers Out $ 3,018 $ 2,55 $ 62,668 45 • • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 0 9. INTERFUND TRANSACTIONS (CONTINUED): c. Other: Certain amounts in the accompanying financial statements are recorded as `other financing sources (uses)". These amounts represent differences in accounting between governmental funds and enterprise funds, and changes in accounting for loans to the Redevelopment Agency described in note 12(d). Reclassification of Interfund Advances $ 16,018 Proceeds from Agency Fund 2,318 Long-Term Debt from Internal Service Funds (1,610) Capital Assets Reclassifications for Change in Fund Type (1,743) 1. Reclassification of Interfund Advances -This amount represents the accrued, unpaid interest on advances from the City to the Redevelopment Agency. For this fiscal year,the City changed how these are accounted for(see note 12d). In prior years this interest was recorded as an expense in the Redevelopment Agency and deferred revenue in the various funds (which did not affect fund balance). Thus, there is a difference in the amounts transferred in and out of the Redevelopment Agency. 2. Proceeds from Agency Fund -This amount represents the reclassification of this fund from an agency fund to a debt service fund. This was caused by a court decision that affirmed a specific liability. 3. Capital Assets Reclassifications for Change in Fund Type -This amount represents the difference caused by the reclassification of the Cultural Affairs Fund from an enterprise fund to a special revenue fund. The value of the plant, property, and equipment is recorded here. 4. Long-Term Debt from Internal Service Funds - This amount represents the reclassification of the Workers Compensation, and Employee Health internal service funds to the General Fund. Since internal service funds recognize the total amount of claims payable and the General Fund recognized the amount of claims at year-end that will be paid within one year, there is a difference in the transfers. • • 46 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 10. LONG-TERM OBLIGATIONS: 0 Below is a schedule of changes in long-term obligations for the year (in thousands). Principal 0 October 1, September 30, Accrued Due Within Governmental Activities: Note 2002 Additions Retirements 2003 Interest One Year Public Financing Authority: 1997 Leasehold Revenue Bonds 10(a)(1) $ 6,070 $ - $ (555) $ 5,515 $ 81 $ 575 2000 Certificates of Participation 10(a)(2) 17,295 - (565) 16,730 71 590 2001-a Lease Revenue Bonds 10(a)(3) 30,780 - (560) 30,220 117 585 2001-b Lease Revenue Bonds 10(a)(4) 29,275 - (1,475) 27,800 181 1,535 Total Public Financing Authority 83,420 - (3,155) 80,265 449 3,285 Redevelopment Agency: 1999 Tax Allocation Refunding Bonds 10(b)(1) 9,470 - (310) 9,160 46 320 2002 Tax Allocation Refunding Bonds 10(b)(2) 20,900 - (685) 20,215 143 750 . Mayer Disposition and Development - - Agreement 10(b)(3) 11,280 - (731) 10,549 Section 108 Loan 10(b)(4) 7,890 - (260) 7,630 97 280 Note Payable 10(b)(5) 293 - (293) - - - Total Redevelopment Agency 49,833 - (2,279) 47,554 287 1,350 Other Long-Term Obligations: . Reservoir Hill Assessment Bonds 10(c)(1) 415 - (55) 360 2 $ 55 Energy Financing Loan 10(c)(2) 742 - (197) 545 9 209 Leases Payable 10(c)(3) 4,107 4,054 (1,741) 6,420 - 1,795 Compensated Absences 10(c)(4) 8,950 - (727) 8,223 2,050 Net Pension Obligation 10(c)(6) 8,593 - (251) 8,342 - Claims Payable 10(c)(5) 12,612 16,831 (14,390) 15,053 - 5,900 Property Tax Claims 10(c)(6) - 22,138 - 22,138 - 22,138 Total Other Long-Term Obligations 35,419 43,023 (17,361) 61,081 11 32,147 Total Long-Term Obligations- Governmental Activities $168,672 $ 43,023 $ (22,795) $ 188,900 $ 747 $ 36,782 Below are reconciliations from amounts in the above table to amounts in the accompanying government-wide financial statements (in thousands): Proceeds of Long-Term Debt in Governmental Fund Financial Statements $ 26,192 Items Not Recorded as Proceeds of Long-Term Debt: Increase in Claims Payable 16,831 Additions in Above Schedule $ 43,023 Principal Paid in Governmental Fund Financial Statements $ 7,427 Decrease in Claims Payable 14,390 Decrease in Net Pension Obligation 251 Decrease in Compensated Absences 727 Retirements in Above Schedule $ 22,795 47 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 10. LONG-TERM OBLIGATIONS (CONTINUED): Below is a reconciliation of the amounts in the above schedule to the amounts in the government-wide financial statements (in thousands) • a. Public Financing Authority (1.) 1997 Public Financing Authority Revenue Bonds: • Year of Issuance 1997 _Type of Debt Lease Revenue Bonds Original Principal Amount $8,070,000 Security Lease Agreement with City for Central Library Interest Rates 5.00% to 5.50% • Interest Payment Dates June 15 and December 15 tn 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 2004 $ 575 $ 278 $ 853 2005 610 245 855 2006 640 214 854 2007 665 171 836 2008 80 163 243 2009-2013 475 746 1,221 2014-2018 610 597 1,207 2019-2023 805 406 1,211 2024-2028 1,055 151 1,206 Total $ 5,515 $ 2,971 $ 8,486 • 48 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 10. LONG-TERM OBLIGATIONS (CONTINUED): a. Public Financing Authority (2.) 2000 Public Financing Authority Certificates of Participation: Year of Issuance 2000 -Type of Debt Certificates of Participation -Original Principal Amount $18,310,000 • Security Lease with City Interest Rates 4.0% to 5.0% Interest Payment Dates September 1S and March 1s' Principal Payment Dates September 1s' Purpose of Debt Capital improvements and defeasance of Emerald Cove • Certificates of Participation (see note 14 Debt service requirements to maturity are (in thousands): Year • Ending September 30 Principal Interest Total 2004 $ 590 $ 852 $ 1,442 2005 615 827 1,442 • 2006 640 801 1,441 2007 670 773 1,443 2008 700 744 1,444 2009-2013 3,025 3,258 6,283 2014-2018 3,115 2,554 5,669 2019-2023 3,235 1,626 4,861 2024-2028 2,795 847 3,642 2029-2030 1,345 110 1,455 Total $ 16,730 $12,392 $ 29,122 • 49 • • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 10. LONG-TERM OBLIGATIONS (CONTINUED): a. Public Financing Authority • (3). 2001(a) 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 1 s and September 1 S Principal Payment Dates September 1st • Purpose of Debt Construct Sports Complex and South Beach Phase II Improvements Debt service requirements to maturity are (in thousands): • Year Ending September • 30 Principal Interest Total 2004 $ 585 $ 1,401 $ 1,986 2005 605 1,378 1,983 2006 630 1,354 1,984 2007 650 1,333 1,983 2008 675 1,312 1,987 2009-2013 3,775 6,156 9,931 2014-2018 4,640 5,285 9,925 2019-2023 5,835 4,092 9,927 2024-2028 7,425 2,501 9,926 2029-2030 5,400 550 5,950 Total $ 30,220 $ 25,362 $ 55,582 • • 50 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 10. LONG-TERM OBLIGATIONS (CONTINUED): • a. Public Financing Authority (4). 2001(b) Public Financing Authority Lease Revenue Bonds: • Year of Issuance 2001 Type of Debt Lease Revenue Bonds Original Principal Amount $31,095,000 • Security Lease on Civic Center Buildings Interest Rates 4.0% to 5.0% Interest Payment Dates August 1, February 1 Principal Payment Dates August 1 Purpose of Debt Defease Civic Improvement Corporation Certificates Year Ending September 30, Principal Interest Total • 2004 $ 1,535 $ 1,084 $ 2,619 2005 1,595 1,023 2,618 2006 1,640 975 2,615 2007 1,690 926 2,616 2008 1,745 875 2,620 2009-2013 9,775 3,316 13,091 • 2014-2018 8,785 1,235 10,020 2019 1,035 52 1,087 Total $ 27,800 $ 9,484 $ 37,284 • • 51 • • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 10. LONG-TERM OBLIGATIONS (CONTINUED): b. Redevelopment Agency: • (1.) 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 15 and 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 2004 $ 320 $ 278 $ 598 2005 335 245 580 2006 350 214 564 • 2007 365 171 536 2008 380 163 543 2009-2013 2,145 746 2,891 2014-2018 2,705 597 3,302 2019-2023 2,200 406 2,606 • 2024 360 53 413 Total $ 9,160 $ 2,873 $ 12,033 • • 52 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 10. LONG-TERM OBLIGATIONS (CONTINUED): • b. Redevelopment Agency: (2.) 2002 Redevelopment Agency Tax Allocation Refunding Bonds: • Year of Issuance 2002 -Type of Debt Tax Allocation Refunding Bonds Original Principal Amount $20,900,000 -Security Tax Increment Interest Rates 2.00% to 5.00% • Interest Payment Dates February 1 S and August 1 s -Principal Payment Dates August 1" Purpose of Debt Prepay Agency's 1992 Loans to Public Financing Authority and fully defease 1992 Public • Financing Authority bonds Debt service requirements to maturity are (in thousands): • Year Ending September 30, Principal Interest Total 2004 $ 750 $ 860 $ 1,610 2005 765 841 1,606 • 2006 790 822 1,612 2007 815 798 1,613 2008 845 771 1,616 2009-2013 4,760 3,372 8,132 2014-2018 5,905 2,283 8,188 • 2019-2023 4,805 875 5,680 2024 780 39 819 Total $ 20,215 $ 10,661 $ 30,876 (3). 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, 2003, the Agency obligation under the agreement amounted to $10,549,000. Project-generated revenues as available will repay these amounts over the time needed to fully amortize the advance. 53 • • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 10. LONG-TERM OBLIGATIONS (CONTINUED): b. Redevelopment Agency: • (4.) 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 1st Principal Payment Dates August 1" • 1 Purpose of Debt I Capital Improvements Debt service requirements to maturity are (in thousands): Year Ending • September 30, Principal Interest Total 2004 $ 280 $ 581 $ 861 2005 300 561 861 2006 315 540 855 2007 340 518 858 • 2008 365 493 858 2009-2013 2,220 2,026 4,246 2014-2018 3,070 1,051 4,146 2019 740 59 799 Total $ 7,630 $ 5,829 $ 13,484 • • • 54 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 10. LONG-TERM OBLIGATIONS (CONTINUED): • c. Other Long-Term Obligations: (1). Reservoir Hill Assessment Bonds: • Year of Issuance 1989 -Type of Debt 1915 Improvement Act Bonds Original Principal Amount $1,653,905 • -Security Property tax assessments Interest Rates 6.00% to 8.15% Interest Payment Dates March 2 nd and September 1s' Principal Payment Dates September 2" Purpose of Debt Capital Improvements • Debt service requirements to maturity are (in thousands): Year Ending • September 30, Principal Interest Total 2004 $ 55 $ 58 $ 113 2005 65 51 116 2006 70 42 112 • 2007 170 33 203 Total $ 360 $ 184 $ 544 (2.) Energy Financing Loan: • Year of Issuance 1995 Type of Debt Note Payable — State of California -Original Principal Amount $1,173,000 -Security Loan Agreement • Interest Rates 6.1% Interest Payment Dates December 22" and June 22" -Principal Payment Dates December 22" and June 22" Purpose of Debt Capital Improvements • 55 • • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 10. LONG-TERM OBLIGATIONS (CONTINUED): c. Other Long-Term Obligations: • Debt service requirements to maturity are (in thousands): Year Ending September • 30, Principal Interest Total 2004 $ 209 $ 30 $ 239 2005 221 18 239 2006 115 10 125 Total $ 545 $ 58 $ 603 • (3). Leases Payable: The City entered into capital leases for various items: • Year of Issuance 1993 through 2003 Type of Debt Capital Leases Original Principal Amount Various ($93,000 to $1,200,000 Security Lease Agreement Interest Rates 5.0% to 6.9% Interest Payment Dates Monthly, Quarterly, Semi- Annually Principal Payment Dates Monthly, Quarterly, Semi- Annually Purpose of Debt Equipment Financing • Future minimum lease payments to maturity are (in thousands): Year Ending Governmental September 30, Activities • 2004 $2,054 2005 1,884 2006 988 2007 489 2008-2013 1,833 • Total minimum lease payments 7,248 Less interest (828) Total $6,420 56 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 10. LONG-TERM OBLIGATIONS (CONTINUED): • c. Other Long-Term Obligations: (4) Compensated Absences: • There is no repayment schedule to pay the compensated absences amount of$8,223,000 relating to governmental operations. The General Fund typically liquidates the vacation and sick leave liability. (5) Net Pension Obligation: • There is no fixed repayment schedule to fund the actuarial liability for the unfunded net pension obligation totaling $8,342,000 for the City's Retirement Supplement Plan described in Note 6.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. (5). Claims Payable: • There is no repayment schedule for the claims payable of$15,053,000 described in note 8. The City pays the claims upon final settlement. (6). Property Tax Claims: • During the year, the California State Appellate Court ruled that the City improperly levied and collected property taxes relating to City pension costs for the years of 1997-98 to 2000-2001. The City chose not to petition for Supreme Court review. The total potential tax refund is$18,397,049 plus estimated interest of$3,741,000). The actual liability may be less depending on the number of taxpayers that request a refund. • d. Long-Term Obligations — Business Activities: Below is a schedule of the long-term obligations of business activities (in thousands): • Principal Long-Tenn Obligations-Business October September Accrued Due Within Activities: 1,2002 Additions Retirements 30,2003 Interest One Year Compensated Absences 10(d)(1) $ 491 $ 132 $ - $ 623 $ - $ 125 Leases Payable 10(d)(2) 595 - (345) 250 - 198 Total Long-Tenn Obligations-Business • Activities $ 1,086 $ 132 $ (345) $ 873 $ - $ 323 57 • • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 10. LONG-TERM OBLIGATIONS (CONTINUED): d. Long-Term Obligations — Business Activities: • (1.) Compensated Absences: There is no repayment schedule for the compensated absences amount of $623,000 • relating to business activities. (2.) Leases Payable: The City entered into capital leases for various items: • Year of Issuance 1993 through 2002 Type of Debt Capital Leases Original Principal Amount Various Security Lease Agreement • Interest Rates 5.0% to 6.9% Interest Payment Dates Monthly, Quarterly, Semi- Annually Principal Payment Dates Monthly, Quarterly, Semi- Annually • Purpose of Debt Equipment Financing Future minimum lease payments to maturity are (in thousands): Year Ending • September 30, Business-Type Activities 2004 $ 81 2005 77 2006 77 2007 38 Total minimum • lease payments 273 Less interest (23) Total $250 • 58 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 10. LONG-TERM OBLIGATIONS (CONTINUED): • (e). Long-Term Obligations for which City is not Liable in any Manner: • Obligations Not Recorded in Financial Statements: October 1, September Community Facilities Districts: 2002 Additions Retirements 30,2003 Community Facilities District No. 1990-1 • Special Tax Refunding Bonds 10(e)(1) $ 2,155 $ - $ (85) $ 2,070 Community Facilities District 2000-1 Special Assessment Tax Bonds 10(e)(2) 16,000 - - 16,000 Community Facilities District NO.2002-1 4,900 Special Assessment Tax Bonds 10(e)(3) 4,900 Total Community Facilities Districts 23,055 - (85) 22,970 No-Commitment Debt 10(e)(4) 51,695 - (22,195) 29,500 • Defeased Debt Outstanding 10(e)(5) 13,580 - (13,580) - Total Obligations Not Recorded in Financial Statements $ 88,330 $ - $ (35,860) $ 52,470 (1). Community Facilities District 1990-1 2001 Special Tax Refunding Bonds: • Year of Issuance 2001 Type of Debt Community Facilities District Assessment Bonds -Original Principal Amount $2,155,000 • Security Special Tax Levies Interest Rates 4.00% to 5.40% Interest Payment Dates Aril 1st and October 1st -Principal Payment Dates October 1st • • • 59 • • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 10. LONG-TERM OBLIGATIONS (CONTINUED): (e). Long-Term Obligations for which City is not Liable in any Manner: (1). Community Facilities District 1990-1 2001 Special Tax Refunding Bonds: • Debt service requirements to maturity are (in thousands): Year • Ending September 30, Principal Interest Total 2004 $ 75 $ 103 $ 178 2005 80 100 180 2006 85 96 181 • 2007 85 93 178 2008 90 90 180 2009-2013 510 384 894 2014-2018 660 241 901 2019-2021 485 53 538 • $ 2,070 $ 1,160 $ 3,230 (2.) Community Facilities District 2000-2001 Special Tax Bonds: Year of Issuance 2001 • Type of Debt Community Facilities District Assessment Bonds Original Principal Amount $16,000,000 Security Special Tax Levies Interest Rates 3.80% to 6.40% • Interest Payment Dates September 1S and March 1" Principal Payment Dates September 1st Purpose of Debt Public Improvements for Grand Coast Resort • • 60 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 • 10. LONG-TERM OBLIGATIONS (CONTINUED): (e). Long-Term Obligations for which City is not Liable in any Manner: (2.) Community Facilities District 2000-2001 Special Tax Bonds: • Debt service requirements to maturity are (in thousands): Year Ending September • 30, Principal Interest Total 2004 $ 245 $ 988 $ 1,233 2005 255 979 1,234 2006 265 968 1,233 2007 280 956 1,236 2008 295 943 1,238 0 2009-2013 1,710 4,466 6,176 2014-2018 2,290 3,892 6,182 2019-2023 3,120 3,059 6,179 2024-2028 4,265 1,915 6,180 2029-2031 3,275 431 3,706 $ 16,000 $ 18,597 $ 34,597 (3.) Community Facilities District Boeing: Year of Issuance 2002 Type of Debt Community Facilities District Assessment Bonds -Original Principal Amount $4,900,000 Security Special Tax Levies Interest Rates 3.80% to 6.20% Interest Payment Dates March 1 s and September 1 s Principal Payment Dates September 1st 61 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 10. LONG-TERM OBLIGATIONS (CONTINUED): (e). Long-Term Obligations for which City is not Liable in any Manner: • (3.) Community Facilities District Boeing: Debt service requirements to maturity are (in thousands): Year • Ending September 30, Principal Interest Total 2004 $ 5 $ 303 $ 308 2005 10 303 313 2006 15 302 317 0 2007 20 301 1,680 2008 30 300 1,715 2009-2013 280 1,468 1,748 2014-2018 580 1,362 1,942 2019-2023 1,000 1,140 2,140 0 2024-2028 1,605 288 2,023 2029-2031 1,355 177 1,532 $ 4,900 $ 5,944 $ 13,718 (4.) 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. • These bond issues are (in thousands): Outstanding September 30, Original Issue Bond Issue 2003 Amount • Five Points Senior Project Multi-Family Housing $9,500 $9,500 Revenue Bonds— Series A— 1991 Huntington Breakers Mortgage Revenue Bonds $16,000 16,000 Refunding Issue— 1996 Series A • 62 • City of Huntington Beach • Notes to Financial Statements For the Year Ended September 30, 2003 • 11. CAPITAL ASSETS: a. Changes in Capital Assets: Capital asset activity for the year was (in thousands): • Balance, Beginning Governmental Activities: of Year Additions Dispositions Balance, End of Year Capital Assets, not depreciated: • Land $ 317,391 $ 8,641 $ (2,937) $ 323,095 Construction in Progress 22,202 16,387 (26,772) 11,817 Joint Ventures 328 - - 328 Total Capital Assets, not depreciated 339,921 25,028 (29,709) 335,240 • Capital Assets being depreciated: Buildings 86,469 25,145 - 111,614 Machinery&Equipment 50,189 2,427 (1,043) 51,573 Infrastructure 274,079 6,268 - 280,347 Total Capital Assets being depreciated 410,737 33,840 (1,043) 443,534 Less accumulated depreciation: Buildings (22,192) (1,987) - (24,179) Machinery&Equipment (27,531) (5,218) 753 (31,996) Infrastructure (135,918) (5,476) - (141,394) Total accumulated depreciation (185,641) (12,681) 753 (197,5991 Total depreciated, net 225,096 21,159 (290) 245,965 Total Capital Assets 750,658 58,868 (30,752) 778,774 Total Accumulated Depreciation (185,641) (12,681) 753 (197,569) • Capital Assets of Governmental Activities-Net $ 565,017 $ 46,187 $ (29,999) $ 581,205 • • 63 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 11. CAPITAL ASSETS (CONTINUED): a. Changes in Capital Assets: • Balance, Beginning Business Activities: of Year Additions Dispositions Balance, End of Year Capital Assets, not depreciated: Land $ 8,598 $ (759) $ 7,839 Construction in Progress 7,845 7,198 (6,972) 8,071 Total Capital Assets,not depreciated 16,443 7,198 (7,731) 15,910 Capital Assets being depreciated: Buildings 30,882 9,625 (1,248) 39,259 Machinery and Equipment 7,208 249 (32) 7,425 Infrastructure 83,711 3,385 (291) 86,805 Total Capital Assets being depreciated 121,801 13,259 (1,571) 133,489 • Less Accumulated Depreciation: - Buildings (7,251) (748) 175 (7,824) Machinery&Equipment (3,014) (608) 34 (3,588) Infrastructure (47,602) (1,247) (48,849) Total accumulated depreciation (57,867) (2,603) 209 (60,261) • Total depreciated, net 63,934 10,656 (1,362) 73,228 Total Capital Assets 138,244 20,457 (9,302) 149,399 Total Accumulated Depreciation (57,867) (2,603) 209 (60,261) Capital Assets of Business Activities • -Net $ 80,377 $ 17,854 $ (9,097) $ 89,134 64 City of Huntington Beach 0 Notes to Financial Statements For the Year Ended September 30, 2003 11. CAPITAL ASSETS (CONTINUED): • b. Depreciation Expense: Depreciation in governmental activities was charged to the following functions/programs • in the Statement of Activities (in thousands) Department: Administrative Services $ 11 ` Building 29 City Attorney 4 City Administration 63 City Clerk 4 City Treasurer 34 Community Services 1,089 Economic Development 2 Fire 702 Information Systems 1,063 Library Services 359 • Non-Departmental 214 Planning 14 Police 2,506 Public Works 6,587 TOTAL $ 12,681 • Depreciation in business activities was charged to the following functions/programs in the Statement of Activities (in thousands): Water Fund $1,928 • Sewer Service 720 Emerald Cove 82 Emergency Fire Medical 138 TOTAL $ 2,881 • 65 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 • 11. CAPITAL ASSETS (CONTINUED): c. Capital Assets Acquired via Capital Leases: At year-end the City's assets acquired through outstanding capital leases (see note 11) were in thousands): Governmental Activities Business Activities Machinery and Equipment $4,708 $824 Less: Accumulated depreciation 1,542 129 Total 1 $3,166 $695 12.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. Huntington Beach Union High School District (HBUHSD) Sharing Agreement: In 1997 the City Council agreed to pay the HBUHSD certain increased sales tax revenues • relating to the development of a new commercial site by Home Depot. The City will retain the first$50,000 of annual increased sales tax revenues and will pay HBUHSD a portion of the amount over $50,000 until the year 2015/2016. • c. 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$7.9 million pursuant to a Third Implementation Agreement approved on October 21, 2002. 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. 66 City of Huntington Beach 0 Notes to Financial Statements For the Year Ended September 30, 2003 12.COMMITMENTS AND CONTINGENCIES (CONTINUED): 0 c. Disposition and Development Agreements: On January 2, 2002 the Redevelopment Agency entered into an Owner Participation 0 Agreement with Fountains Huntington Beach, LLC, to provide$2 million to meet the cost of providing and maintaining 80 affordable housing units for a period of 60 years. At year- end no liability had been incurred. The expectation is that the amount will be disbursed in fiscal year 2003-2004. • On 9/2/03 the Redevelopment Agency Approved a Cooperation Agreement Regarding Capital Improvements in the Southeast Coastal Redevelopment Project with the City. This agreement commits the Redevelopment Agency to reimburse the City for a number of capital improvement projects to be undertaken as part of the Five Year Capital Improvement Program in the Southeast Redevelopment project area starting in FY A 2003/04 as they are undertaken. d. Redevelopment Agency Debt to City: The City has advanced money to the Redevelopment Agency for capital improvements and operations. There is no fixed repayment schedule for these advances and the Council/Agency has no requirement for the timing of any repayment. Accordingly, the City has not recorded the advances in the accompanying financial statements. These advances have been made since 1984 and include direct advances of cash, overhead charges, deferred development fees, deferred land sales, and interest. Below is a schedule of the activity for the year (in thousands): • • 67 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 12.COMMITMENTS AND CONTINGENCIES (CONTINUED): d. Redevelopment Agency Debt to City: . Amount @ Amount @ GENERAL FUND: 10/1/02 Reductions Additions 9/30/2003 Direct Advances $ 11,806 $ (221) $ - $ 11,586 Overhead Charges 6,752 (184) - 6,567 Land Sales 32,833 - - 32,833 Interest 40,227 (9,351) 3,326 34,201 Total General Fund $ 91,618 $ (9,756) $ 3,326 $ 85,188 Sewer Development Fund: Direct Advances $ 131 $ - $ - $ 131 Deferred Development Fees 72 - 7 79 Interest 159 - 12 171 ' Total Sewer Development $ 362 $ - $ 19 $ 381 Gas Tax Fund: Direct Advances $ 500 $ (500) $ - $ - Interest 780 (800) 20 - Total Gas Tax $ 1,280 $ (1,300) $ 20 $ - Drainage Fund: Direct Advances $ 250 $ - $ - $ 250 Deferred Development Fees 54 - - 54 Interest 317 - 23 340 Total Drainage $ 621 $ - $ 23 $ 644 Park Acquisition and Development Fund: Land Sales $ 1,741 $ - $ - $ 1,741 Deferred Development Fees 2,271 - 146 2,417 Interest 2,556 (244) 165 2,477 Total Park Acquisition and Development $ 6,568 $ (244) $ 311 $ 6,635 Capital Improvement Fund: Direct Advances $ 200 $ - $ - $ 200 Interest 266 - 17 283 Total Capital Improvement Fund $ 466 $ - $ 17 $ 483 Water Fund: Direct Advances $ 1,138 $ - $ - $ 1,138 Interest 1,881 - 110 1,990 Total Water Fund $ 3,019 $ - $ 110 $ 3,128 0 Total All Funds $ 103,933 $ (11,300) $ 3,825 $ 96,468 68 City of Huntington Beach 0 Notes to Financial Statements For the Year Ended September 30, 2003 M 12.COMMITMENTS AND CONTINGENCIES (CONTINUED): d. Redevelopment Agency Debt to City: The reductions were comprised of the following (in thousands): Cash Repayments $ 7,500 Other Reductions(non-cash) 3,800 Total Reductions $ 11,300 • The cash repayments are recorded as transfers from the Redevelopment Agency to the fund receiving the repayment. 13. OTHER INFORMATION: • a. Expenditures Exceeding Appropriations: Expenditures exceeded appropriations at the departmental level in the funds shown (in thousands): • EXPENDITURES EXCEEDING APPROPRIATIONS General Fund: Current: Fire $ (149) • Police (1,483) Library Services (48) Debt Service: Principal (1,124) Public Financing Authority Debt Service: 0 Principal (820) Redevelopment Agency Debt Service: Principal (371) 69 • City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2003 13. OTHER INFORMATION (CONTINUED): b. Fund and Accumulated Deficits: The following funds had total fund deficits at year-end (in thousands): FUND DEFICITS Governmental Funds: Non-Major Governmental Funds: Drainage $ (1,082) Capital Improvement (1,748) Pier (1,206) Sewer Development (233) Enterprise Funds: • Refuse (890) The deficits in these funds will be eliminated through monitoring of expenditures and reviewing fee structures. The unrestricted deficit ($12,924,000) in the government-wide financial statements for governmental activities is primarily a result of the above deficits . and the property tax court decision (see note 10(c)(6)). c. Prior Period Adjustment (Government-Wide Financial Statements) • In the prior year, the City incorrectly recorded a liability for deferred revenue for interfund loans totaling $16,018,000. This amount should have been classified as net assets in the government-wide financial statements. Also, long-term claims payable from internal service funds were excluded from the government-wide statement of net assets. These were related to the implementation of GASB Statement 34. Below is a schedule of the restatement of beginning net assets for the governmental activities (in thousands): Beginning Net Assets- Governmental $473,573 Activities Deferred Interest on Interfund Loans 16,018 Debt from Internal Service Funds (10,084) Beginning Net Assets- Governmental $479,507 Activities (Restated) 1 70 CTA p a ye Ircterttional6t lefthlanh REQUEST FOR ACTION MEETING DATE: MAY 17, 2004 DEPARTMENT ID NUMBER: AS-04-016 City Council Recommended Action: 1. Receive and file the fiscal year 2003/2004 second quarter budget report. 2. Receive and file the fiscal year 2002/2003 Comprehensive Annual Financial Report. 3. Receive and file the Management Letter to the fiscal year 2002/2003 Comprehensive Annual Financial Report. Alternative Action(s): Do not receive and file the documents and provide staff with appropriate direction. Analysis: Fiscal Year 2003/2004 Second Quarter Report The Administrative Services Department prepares the "Quarterly Report". This tool allows executive management to get a snapshot of the city's financial situation on a quarterly basis and make any necessary resource allocation decisions. Additionally, any recommended changes to revenue or expenditure projections are transmitted in the quarterly reports. General Fund Beginning Fund Balance At the time the budget for fiscal year 2003/2004 was presented to the City Council in August 2003, it was estimated that the beginning General Fund balance would be $8.0 million after allowing for a reserve for equipment replacement of$3.85 million. This amount represents the undesignated, unreserved portion of the city's General Fund balance carried over from fiscal year 2002/2003. With the completion of the Fiscal Year 2002/2003 Comprehensive Annual Financial Report (CAFR), the ending General Fund fund balance for fiscal year 2002/2003 was $14.974 million. The following table provides detail of the components of the fund balance. (in thousands) CAFR Budget General Fund Reserve (%of General Fund) $9,984 (7%) $8,367 (6%) Reserve for Encumbrances 2,757 2,757 Reserve for Equipment 0 3,850 Undesignated, Unreserved 2,233 0 Ending CAFR Fund Balance for 2002/03 $14,974 $14,974 H:\RCA's\2nd Quarter Report and Management Letter.doc -3- 5/12/2004 7:49 AM REQUEST FOR ACTION MEETING DATE: MAY 17, 2004 DEPARTMENT ID NUMBER: AS-04-016 General Fund Revenue — FY 2003/2004 As of the First Quarter Report (December 31, 2003) General Fund revenue was projected to be $137.80 million. This was a reduction of $4.83 million from the adopted General Fund revenue of $142.63 million. The reduced revenue projections in the first quarter were attributed to reductions in: Parking Fine ($400,000); Sports Complex ($1.3 million); Cost Allocation Charges ($1.35 million); Property Tax Override impounding ($1.28 million); and VLF Fees ($500,000) as compared with projections. As of the end of the second quarter of fiscal year 2003/2004, the revised General Fund revenue projection is $137.74 million. This new estimate reflects the following changes to General Fund revenue projections: Increasing Property Tax revenue by $500,000, cost allocation charges by $180,500 and Sports Complex revenue by $300,000, and decreasing Parking Fines ($300,000) and Charges for Services ($800,000). General Fund Expenditures — FY 2003/2004 As of the First Quarter Report (December 31, 2003) the revised General Fund expenditures were $142.245 million. As of the second quarter, the expenditure projection is $141.801 million. Management Letter to the Comprehensive Annual Financial Report By law, auditors are required to communicate all reportable conditions to management. The means by which the auditors communicate (report) these conditions is through the Management Letter. The attached Management Letter (Attachment #3) is a formal report by the city's auditors (Caporicci and Larson, CPAs) to management that focuses on internal control weaknesses discovered in the course of the audit of the financial statements. While the Management Letter is part of the CAFR, it is not part of the formal document and is always transmitted separately. The city has typically received a Management Letter with each CAFR. The auditors did choose not to issue a Management Letter last fiscal year. As with an employee's annual evaluation, the Management Letter assists management in improving the city's financial systems, as an employee's evaluation assist an employee on improving their work product. It is important to note that the Management Letter does not affect the opinion (grade) of the financial statements that the city has already received from the auditors, which was without qualification or"unqualified" the highest possible mark. The main focus of the fiscal year 2002/2003 Management Letter was the city's implementation of the new utility billing system, Utiligy. The Management Letter provides an overview of the auditors concerns or observations regarding Utiligy and their recommendations to improve the financial statements vis-a-vis Utiligy. As part of any Management Letter staff is invited to respond to the concerns and observations reported in the Management Letter. Staffs response to the Management Letter is provided as Attachment#4. H:\RCA's\2nd Quarter Report and Management Letter.doc -4- 5112/2004 7:49 AM REQUEST FOR ACTION MEETING DATE: MAY 17, 2004 DEPARTMENT ID NUMBER: AS-04-016 Attachment(s): City Clerk's . . - No. Description Number 1. Fiscal Year 2003/2004 Second Quarter Budget Report 2. Comprehensive Annual Financial Report 3. Management Letter to the Comprehensive Annual Financial Report 4. Staff Responses to Management Letter RCA Author: William McReynolds/John Roulette H:\RCA's\2nd Quarter Report and Management Letter.doc -5- 5/12/2004 7:49 AM ATTACHMENT # 1 S ity ADMINISTRATIVE SERVICES Hn. INTERDEPARTMENTAL COMMUNICATION TO: William P. Workman,Acting City Administrator FROM: Clay Martin, Director of Administrative Services SUBJECT: Second Quarter Budget Report—FY 2003/04 DATE: May 6, 2004 General Fund Appropriation Analysis: Attached is the Second Quarter Budget Report of Fiscal Year 2003/04. In September 2003, the City Council adopted a General Fund budget of $144,163,090. Adopted revenues were $142,634,018. To this amount, a funding reserve of$1,529,072 from 2002/03 was applied to support the same amount in carry over expenditure. Primarily, carry over consisted of numerous Information Services projects and programs, which were not expensed in 2002/03. The budget plan, as submitted to and adopted by the City Council,was balanced. As of the end of the second quarter of 2003/04, revised General Fund appropriations totaled $146,354,276. The difference, $2,191,186, is the result of adding prior year encumbrances and funding of $1,780,000 to original appropriations, $279,000 of additional funding approved by the City Council since adoption, and $132,186 relating to accounting adjustments for accruals and fund closures. General Fund Balance Analysis for endinsa 2002/03: At the time the budget for 2003/04 was presented to the City Council, it was estimated the General Fund unreserved fund balance would be $8 million at the end of 2002/03 after allowing for a reserve for equipment replacement of$3.85 million. This estimate included the assumptions and actions adopted by the City Council and implemented by city staff between June and August of 2003 (as described in the 1$ Quarter Budget Report of 2003/04). The comprehensive audit for FY 2002/03 is now complete and the General Fund total fund balance stands at $14.974 million (page 18 of CAFR). From this amount, encumbrances of$2.757 million are deducted leaving the unreserved fund balance at $12.217 million. After allowing for the equipment reserves of$3.85 million, the remaining fund balance is $8.367 million. General Fund Adopted Revenue—FY 2003/04: When the FY 2003/04 budget was adopted in September 2003, it included several new funding measures to balance the budget. Fee increases, new cost allocation charges, Sports Complex revenues, additional parking fines, revenue from major construction developments, and the reinstatement of a portion of the property tax retirement rate were expected to provide nearly $5 million to the general fund beginning in 2003/04. Economically driven revenues were also anticipated to improve over the prior fiscal year. Those driven by the economy appear to be providing the expected support. However, other areas will require additional time to develop and, in some cases, will not be forthcoming. The following explains the main revenue issues for 2003/04 and beyond. General Fund Adjustments to Adopted 2003/04 Revenues: The following are revisions to the revenue projection expected to occur this fiscal year. The majority of these were described in the 1"' Quarter Budget report. Updates to those are shown here as well as additional revisions staff is recommending. Net Revenue reductions as of the 2"d Quarter total$4,948,000. Pagel • Increased cost allocation transfers from the enterprise funds totaling $1.169 million will be eliminated from the revenue projections for 2003/04 and future years due to a recent legal decision--concerning a similar charge used by another California city. (Decreased from$1.35 million in 1st Qtr.) • While some issues appear to be resolved, potential, major uncertainty lies with the state budget. The amount could be larger, but staff is estimating at this time $500,000 in VLF revenue losses in 2003/04. (Same as 1"Qtr.) • All of the Parking Control Officer vacancies have now been filled. However, staffing shortages caused the parking fine revenue to be lowered by$700,000. (Increased from$400k in the 1s'Qtr.) • Reductions in the Sports Complex revenues for this year of $1,000,000 are expected due to a delayed opening of portions of Phases 1 and 2. This is less than previously predicted and will be partly offset by a reduction in expenditures. (Decreased from$1.3m in the 1st Qtr.) • Use of the recently re-established property tax for employee retirement of$1.279 million will continue to be held in abeyance pending further study. (Same as 1st Qtr.) • Reduce Fees and Charges for Services revenue by $800,000. This area will require some additional analysis to be confirmed. Staff is reviewing this issue and will provide further information in the next quarterly budget report. (New this Qtr.) • Increase Property Tax estimate by$500,000. (New this Qtr.) Projected General Fund Expenditure Variances from Budget: Includes savings or overages in the following departments and categories: • Administration 104,000 Vacancy and operating savings. • Administrative Services 175,000 Vacancy and operating savings. • City Clerk 88,000 Vacancy savings. • Community Services 168,000 Vacancy and operating savings • Economic Development 71,000 Operating savings. • Information Services 399,000 Vacancy and operating savings. • Non-Departmental-City Wide 399,000 Utility and operational savings • Planning Department 219,000 Vacancy and operating expense savings. • Police Department (424,000) Budgeting error, overtime underfunded. • Public Works 755,000 Vacancy savings, operating and capital savings. • City Treasurer 56,000 Operating savings • Misc. Savings 43,000 $2,053,000 General Fund Balance Sheet—FY 2003/04 Ending 9/30/04: The General Fund balance started the 2003/04-year with $14.974 million. This amount is depicted on page 18 of the 2002/03 CAFR (Audit). From this amount, encumbrance reserves of $2.757 million are deducted. City financial policy states a 7% reserve based on projected revenues will be maintained. Calculated on adopted revenues for 2003/04, this equates to $9.984 million. These are identified as part of the $14,974 million fund balance. As a result of the updated computations for revenues and expenditures as of the td quarter of this fiscal year, an unreserved fund balance of$9.255 million is estimated as of 9130104. This includes a budgeted transfer to fund balance in 2003/04 of $1.6 million. The projected general fund balance is close, but slightly below the city policy amount. After allowing for the equipment fund reserve of $3.85 million, remaining funds as of 9/30/04 are estimated at$5.405 million. All Funds Expenditure Analysis—FY 2003/04: Expenditures in all funds should produce an appropriation savings of approximately $21 million and possibly a greater amount depending on the progress of capital improvements. This estimate is based on a completion factor of 75% for capital projects currently budgeted. In most cases, unexpended funds earmarked for these capital improvements will be carried over to the following year. Savings in the General Fund are expected to be $2 million of the total. Regarding extraordinary General Fund savings of $2,000,000 as depicted on the balance sheet, this is only an estimate. In the near future, departments will be asked to identify specific savings related to the $2,000,000 estimate, or a lesser/greater amount depending on economic circumstances as we enter the summer months. Page 2 The Fiscal Year 2003/04 Adopted Budget, exclusive of prior year encumbrances, was $316,390,593. Currently, revised appropriations total $348,601,648. The difference is $32,211,055 and consists largely of prior year encumbrances, grant reallocations from previous years, and budget additions as depicted in the chart below. Prior year encumbrances come from appropriations committed last year but not expended. They represent numerous, previously scrutinized funding measures approved during last year's budget process and fiscal year and are carried forward as a formality. Budget additions represent new appropriations for specific items approved during this year and are accompanied by an explanation. The following chart is a list of encumbrance carryovers from last year and new appropriations since budget adoption last September. Fund Encumbrance Budaet Additions Description Of Budnet Revisions 100-General Fund $1,780,420 $0 100-General Fund, Public Works 0 250,000 Development Services 100-General Fund, City Attorney 0 10,000 Contract Legal Services 100-General Fund, Econ Dev 0 19,000 Bella Terra CFD. 100-General Fund, Non Dept 0 62,796 Reclassify from old Equip. Fund 100-General Fund, Planning 0 68,971 Reinstate funds from prior year 103- Donation Funds 0 165,000 Reinstate funds from prior year 206-Traffic Impact 101,000 0 207-Gas Tax Fund 256,000 0 209- Park Acquisition & Dev. 1,225,000 0 210-Sewer Fund 304,000 0 213-Measure M 116,000 0 214—Narcotic Forfeiture, State 0 250,000 Police costs 301 - Capital Projects Fund 8,825,000 0 305- Redevelopment Cap Project 386,000 1,500,000 Transfer to 407 Fund for Settlement 307- Holly/Seacliff 0 94,000 Seacliff Partners-Road Constr. 405-Grand Coast Resort 0 549,000 Adjust debt service for Mello Roos 407 - Redevelopment Debt Service 0 1,500,000 Mulligan Settlement 502—FireMed Fund 0 174,167 Ambulance contract and operational 503—Emerald Cove 0 400,000 Repairs and maintenance 506-Water Fund 2,307,000 371,000 Equipment Purchases 507-Water Master Plan 5,330,000 0 511 -Sewer Service Fund 742,000 0 707—Employees Rate Contingency 0 500,000 Refund processing, attorney fees 756-758—Police Grants 0 633,000 Reinstate prior year grants 760—Homeland Security 2004 0 376,422 Grant 761 —B.J.A. Police Grant 0 84,070 Reinstate prior year grants 810- Bluff-top Park 0 1,064,000 Reinstate prior year grants 839- HOME Grants 0 2,193,000 Reinstate prior year grants 865/866—HCD Grants 2003 &2004 0 (1,122,000) Adjust and correct double entry 870—Supplemental Law Enforcement Grant 0 (277,709) Correct grant appropriations 873-OCTA/CIP Grant 291,000 0 878-CALTRANS Grants 237,000 0 892- Storm Water Quality 785,000 0 Misc. 501,055 159,863 $23,186,475 $9,024,580 Cc City Council Department Heads Budget Staff Page 3 Tot►al City Budget General'Fund C. er Fumds mac . 400,000,000 300,000,000 202,247,372 183,281,741 200,000,000 `v; 87,204,766 - 0 348,601,648 32*7,583,054 154,626,992 Budgeted Projected Expended • • - Adminismt III Iion Administrative Services GneF rahFund:air er:�.urs4 MGen�e,a � O' h r Fns 2,5uu,uuu 30,000,000 21000,000 504,987 25,000,000 13500,000 , 20,000,000 48,018,712 17,523,183 514,146 15,000,000 1,000,000 1, 98,0 0 1. 941 g 10,000,000 9,802,996 500,000 — '— 7 83 5,000,000 8.6�43 —8;55,.16f79 3,335,408 0 0 2,103,037 2,002,690 1,261,977 26,709,655 26,039,463 13,138,404 Budgeted Projected Expended Budgeted Projected Expended City Attorney BuildingU&Iafety ■Ge- al' and 1Other F.urids ■General Fund Other FAnds� 5,000,000 3,500,000 446,971 35,331 41000,000 714,298 110,167 3,000,000 2,500,000 F.�. 3,000,000 Fl, -,� 2,000,000 .'• � 2,000,000 3,332,774 3,317,880 204,918 1,500,000 2;907,923 2,896,956 129,427 —1•,617,568 1,000,000 1:354!446 1,000,000 — 500,000 0 0 4,047,072 4,02 ,997 1,822,486 3,354,894 3,333,286 1,483,873 Budgeted Projected Expended Budgeted Projected Expended City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Administration - All Funds R14113 MONTHLY (MonthlyRpt) 501%° of tWwFiscal YeaK 0m lefed For tfiePeriod Ending March 31°,2004>- _ �. x._�. . Prior Year Adopted Revised Year To Date Year To Date £Projected Description Actual Budget Budget Expended %yExaended Expenditure; EXPENDITURES PERSONAL SERVICES Salaries Permanent 891,903 801,073 801,073 361,964 45:2% 738Y067: Salaries Temporary 173,306 12,000 12,000 7,013 58 P/c 14 300 Salaries Overtime 610 0 Termination Pay Outs 15,735 =.0 Benefits 223,823 234,039 234,039 85,261 = 36.4% 215°516 PERSONAL SERVICES 1,305,377 1,047,112 1,047,112 454,238 3 43 4/0 967.883. OPERATING EXPENSES Utilities 3,872 3,700 3,700 10 _ U:3% 3826 Equipment and Supplies 131,270 130,460 135,532 76,480 Repairs and Maintenance 15,107 10,000 10,000 1,080 10.8% 9 800 Conferences and Training 40,071 56,500 56,500 9,538 16.,9% 55 370 Professional Services 265,619 255,000 764,880 681,630 _ = 89:1:% 749 582 Other Contract Services 7,232 21,000 22,264 1,464 6i60 21819, Rental Expense 40,000 40,000 29,839Js 76% 39200. Claims Expense 0 Insurance 0 Pension Payments v0 Interdepartmental Charges _= 0. Expense Allowances 13,092 20,050 20,050 6,498 32.4% 19;649 Other Expenses 3,000 3,000 1,200 40 2 940 _ tNi__ OPERATING EXPENSES 476,263 539,710 1,056,925 807,739 76.5/0 1,034,80T CAPITAL EXPENDITURES Land Purchase _ -0 Improvements 0 Equipment 663 0 Vehicles Software-Capital 0 CAPITAL EXPENDITURES 663 Q, NON-OPERATING EXPENSES w Debt Service Expenses 29,839 0 Transfers to Other Funds 160,148 0 Depreciation . 0, NON-OPERATING EXPENSES 189,987 EXPENDITURES 1,972,290 1,686,822 2,103,037 1,261,977 Y# 60:0°h 2,002 690 Projected ver n er Budget 100,347 Qtr 2-All Funds 04 5/5/2004 Administration Page 11 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Adminstrative Services - All Funds R14113 MONTHLY (MonthlyRpt) Forthe Period Endin _MarW31,�2004, - t; .. _ ,..-;� �Ws 501"/0 �, of<the Fiscal Yeai Cornpleted M Prior Year Adopted Revised Year To Date YearTo Date Projected Description Actual Budget Budget Expended %fExpended Ezpendittare' EXPENDITURES PERSONAL SERVICES Salaries Permanent 2,906,271 2,960,134 2,960,134 1,400,144 47>3% 2 854 981; Salaries Temporary 22,382 6,792 13 849 Salaries Overtime 12,336 9,597 19 569 Termination Pay Outs 2,967 6,977 14227; Benefits 1,703,754 1,659,173 1,659,173 376,438 22.70 1 425 014 PERSONAL SERVICES 4,647,710 4,619,307 4,619,307 1,799,947 39.000 =4,327,140. OPERATING EXPENSES Utilities 363 1,900 1,900 0:00% 1862 Equipment and Supplies 573,309 572,300 583,128 293,850 5014 % 571 465. Repairs and Maintenance 6,459 42,400 42,400 4,571 10`8% 41 552 Conferences and Training 31,187 72,150 72,150 15,889 22 WO 70 Z07 Professional Services 4,766,655 4,601,765 4,742,966 2,366,905 499% 4 648 1.07 Other Contract Services 297,674 353,300 375,900 248,444 66 368382 Rental Expense 72,291 88,000 88,000 64,948 = 738% 86 240 Claims Expense 10,585,094 10,974,866 10,974,866 5,760,132 52.5% ]0 755 369 Insurance 2,112,896 3,125,000 3,125,000 556,655 a� 1 3062500 Pension Payments 1,505,036 2,000,000 2,000,000 2,022,000 101:1% 2 022 000 Payments to Other Governments 2,013 3,000 3,000 0:0% 2 940 Interdepartmental Charges 0 Expense Allowances 12,150 14,400 14,400 4,849 A 4-33:7/0 14 112 Other Expenses 125 2,500 2,500 213 85% 2,450 y OPERATING EXPENSES 19,965,252 21,851,581 22,026,211 11,338,457 5C6., 21,647,686 CAPITAL EXPENDITURES - Land Purchase f Improvements 4,093,349 0 Equipment 0 Vehicles 0 Software-Capital 0 CAPITAL EXPENDITURES 4,093,349 NON-OPERATING EXPENSES W Debt Service Expenses .f. = 0 Pass Through Payments -0 Transfers to Other Funds 64,136 64,137 64,137 -0:00 64,137 Depreciation 11,200 0 NON-OPERATING EXPENSES 76,336 64,137 64,137 0.0% W 64,137 EXPENDITURES 28,781,647 26,535,025 26,709,655 13,138,404 492"/0 :26;039,463 Projected ver n er Budget 670,192 Qtr 2-All Funds 04 5/5/2004 Adminstrative Services Page 12 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 City Attorney - All Funds R14113 MONTHLY (MonthlyRpt) For the'Period`Endm °March31;2004 -- ,. _ -:- . : _ ar=50 % ofthe.,Fiscal YeCompleted Prior Year Adopted Revised Year To Date Year-To Date Protected Description Actual Budget Budget Expended %Ex Den ded Expenditure nn EXPENDITURES `{ PERSONAL SERVICES Salaries Permanent 1,121,824 1,266,682 1,287,376 572,462 44 5'/6 =1 272 286 Salaries Temporary 38,574 30,826 30,826 13,688 A4Ao 27 9I1' Salaries Overtime 1,760 145 296 Termination Pay Outs 0 Benefits 268,212 368,663 368,663 138,105 omcoi 384230 PERSONAL SERVICES 1,430,371 1,666,171 1,686,865 724,400 4MUM 1,684;722 OPERATING EXPENSES ` Utilities 558 3,600 3,600 76 2:1% 3 528 Equipment and Supplies 62,474 73,900 108,900 48,911 44£9%0 �106 722 Repairs and Maintenance 342 1,000 1,000 0 0%0 980 Conferences and Training 6,436 14,500 14,500 1,225 8,4F/ 14 210 Professional Services 1,704,322 1,745,000 2,163,158 1,009,637 467% 2150000 Other Contract Services 80,897 63,000 63,049 35,115 55! 61 788 Rental Expense 167 167 Claims Expense Insurance 0 Pension Payments 0 Interdepartmental Charges = _ - 0 Expense Allowances 4,958 6,000 6,000 2,954 49.2% 5 880 Other Expenses 0 OPERATING EXPENSES 1,859,987 1,907,000 2,360,207 1,098,086 465'/0 2,343275 CAPITAL EXPENDITURES �- Improvements 0 Equipment 0 Software-Capital `0 CAPITAL EXPENDITURES 0 NON-OPERATING EXPENSES x 0 Transfers to Other Funds 0 NON-OPERATING EXPENSES 0. EXPENDITURES 3,290,358 3,573,171 4,047,072 1,822,486 -` 45:0,•% 4,027997 Projected ver n er Budget 19,075 Qtr 2-All Funds 04 5/5/2004 City Attorney Page 13 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Building - All Funds R14113 MONTHLY (MonthlyRpt) For?thePeriotl Endin' Matchr31,2004_ w ,. _r= R r 50.1'/0 6 ofNtheFiscal Yeas=Com leted t� Prior Year Adopted Revised Year To Date Ye�ar To Date Projected Description Actual Budget Budget Expended %Expended..Ezaenditure; EXPENDITURES PERSONAL SERVICES Salaries Permanent 1,712,926 1,909,678 1,909,678 882,423 46 2% 113,741316 Salaries Temporary 43,789 47,680 47,680 21,079 44.2%0 42 981` Salaries Overtime 14,268 11,000 11,000 6,959 633% 14190 Termination Pay Outs 0 Benefits 465,882 620,571 620,571 236,835 38:2% 609153 PERSONAL SERVICES 2,236,865 2,588,929 2,588,929 1,147,297 RM44 3'/° : 2,540,639 OPERATING EXPENSES Utilities 11 8,250 8,250 0.0% 8,0.85, Equipment and Supplies 79,500 57,990 61,684 21,407 34 7%u 60;450, Repairs and Maintenance 33,058 73,000 73,000 32,451 44-5% 71,540 Conferences and Training 13,404 27,700 27,700 3,852 1~ 39% �27 196 Professional Services 635,019 383,344 501,972 248,628 49 5-o 532 933 Aiiq Other Contract Services 36,110 33,000 33,000 25,247 - 76'5 (' 32 340. Rental Expense 151 160 160 52 325% 157 Interdepartmental Charges W 0 Expense Allowances 10,239 10,200 10,200 4,941 48 4% 9 996 Other Expenses - 0 OPERATING EXPENSES 807,492 593,644 716,966 336,677 47 0% 742,647 CAPITAL EXPENDITURES _ Land Purchase 0 Improvements 50,000 50,000 49 OOQ Equipment r .`0 Vehicles =0 Software-Capital e 0 CAPITAL EXPENDITURES 50,000 60,000 b 49,000 NON-OPERATING EXPENSES �� = Transfers to Other Funds 3 0. NON-OPERATING EXPENSES 0 EXPENDITURES 3,044,356 3,232,673 3,354,894 1,483,873 „p 44:2% 3,332;286 Projected ver n er Budget 22,608 Qtr 2-All Funds 04 5/5/2004 Building Page 14 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 City Council - All Funds R14113 MONTHLY (MonthlyRpt) For the`Period'EndrngMarcl%31,2004 � �. Prior Year Adopted Revised Year To Date Year To at ted Description Actual Budget Budget Expended %=Expended Expenditure EXPENDITURES PERSONAL SERVICES _ Salaries Permanent 66,824 65,645 65,645 32,457 ,�494°/ -65,182 Salaries Temporary 0 Salaries Overtime 0 Termination Pay Outs 0 Benefits 66,240 82,143 82,143 35,797 43.6% 81542 , PERSONAL SERVICES 133,064 147,788 147,788 68,254 46.2% 146,724 OPERATING EXPENSES Utilities 0. Equipment and Supplies 5,918 3,900 3,900 7,143 183.2% 7 857 Repairs and Maintenance0 Conferences and Training 13,238 14,000 14,000 2,108 = 151%' 12 ti00 Professional Services 0 Other Contract Services A, Rental Expense h 0 Expense Allowances 104,204 110,798 110,798 51,090 46:1*0 108 582. Other Expenses 0 OPERATING EXPENSES 123,360 128,698 128,698 60,341 r 46 9"/0 129,039 CAPITAL EXPENDITURES Improvements Equipment 12,500 0 Software-Capital 0 CAPITAL EXPENDITURES 12,500 y 0 NON-OPERATING EXPENSES 0 EXPENDITURES 268,924 276,486 276,486 128,696 �-' 46,5% 275,764 Projected ver n er Budget 722 Qtr 2-All Funds 04 5/5/2004 City Council Page 15 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 City Clerk - All Funds R14113 MONTHLY (MonthlyRpt) For.the Period''Endin :March 31`,,2004 -; a 1/° of he Fi _,�scal Year,Completed Prior Year Adopted Revised Year To Date Yeac To Date Projected Description Actual Budget Budget Expended %Ekpenaeaa 7Expenditure x: r� EXPENDITURES PERSONAL SERVICES W Salaries Permanent 279,288 370,023 370,023 160,744 , 43.6 ` 327 767 Salaries Temporary 48,716 52,700 52,700 22,411 42.5°/n 45 697; Salaries Overtime 26,231 22,000 22,000 1,188 5 4% 2 422 Termination Pay Outs 0 Benefits 79,170 133,480 133,480 50,277 37, /ol 118;324 PERSONAL SERVICES 433,406 578,203 578,203 234,621 40:6"/° 494,211. OPERATING EXPENSES _ Utilities 366 800 800 0.0°!0 0 784 Equipment and Supplies 72,184 101,200 101,200 5,616 -176 Repairs and Maintenance n '0 Conferences and Training 4,827 1,520 1,520 2,502 164 6% 5 004 Professional Services 4,027 100,100 100,100 139,502 139:4'/0 150`:150 nj . Other Contract Services 34,574 54,000 54,000 137 0.3% 52 920 Rental Expense " 0 Expense Allowances 5,885 6,000 6,000 2,815 46 9% 5 880 Other Expenses 237 - 237 OPERATING EXPENSES 121,864 263,620 263,620 150,810 57 2, 2W151' CAPITAL EXPENDITURES Improvements _ � ;0 Equipment `=,; = 0 Software-Capital 0 CAPITAL EXPENDITURES 0 NON-OPERATING EXPENSES 0 EXPENDITURES 555,269 841,823 841,823 385,431 - 458'/0 753362 Projected ver n er Budget 88,461 Qtr 2-All Funds 04 5/5/2004 City Clerk Page 16 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Community Services - All Funds R14113 MONTHLY (MonthlyRpt) FortFiePerlod Eridin`'March 31,2004 s _ - 5 Oil% of=ahe Ftscal.Year=Completed - ;z Prior Year Adopted Revised Year To Date Year To Date P:ro�ected Description Actual Budget Budget Expended %Expend tl Expenditure;' EXPENDITURES -IA PERSONAL SERVICES Salaries Permanent 3,726,909 3,897,770 3,887,770 1,760,623 45 3% 3 590020 Salaries Temporary 1,903,348 1,851,409 1,884,370 478,158 c, 25 4% 2 025.000 Salaries Overtime 341,735 451,685 448,362 124,165 e 27 7% 425 000 Termination Pay Outs 2,445 8,186 16 692 Benefits 1,351,108 1,701,098 1,701,098 643,608 37 8% W 1 615j509 PERSONAL SERVICES 7,325,544 7,901,962 7,921,600 3,014,740 x m 38_1 OPERATING EXPENSES Utilities 78,059 112,564 122,564 65,701 53.6�0 y120 113 Equipment and Supplies 599,219 686,240 874,853 352,685 40"3% 857 356 Repairs and Maintenance 565,528 890,470 1,355,638 580,684 Y 42`8% 1 328 525 Conferences and Training 63,138 143,705 143,705 3,035 2 1° R140 83;1 Professional Services 391,222 1,115,530 1,396,342 551,996 39 5% 1,368A15 Other Contract Services 1,264,395 1,347,830 1,375,576 1,212,400 881°/o rt 1 348 064 Rental Expense 60,853 87,440 91,440 56,888 62 206 89 611 Claims Expense 0 Insurance 25,000 25,000 0'0% 24,500 Payments to Other Governments 20,931 20,931 'T Wh0% 20,512 Interdepartmental Charges 25,000 25,000 0 0% 24;50Q Expense Allowances 19,992 31,500 31,500 13,131 4i1�7% 30,870 .a Other Expenses 161,557 177,100 177,100 48,993 277°/0 173;558 OPERATING EXPENSES 3,203,964 4,663,310 5,639,648 2,885,513 512% 5,526,856 CAPITAL EXPENDITURES Land Purchase 30,927 150,000 150,000 0 0% 147 000 Improvements 235,000 235,000 35,565 15% 230 300 Equipment 13,146 78,500 106,513 96,930104;383 Vehicles 24,517 11,400 11,400 11,172 Software-Capital 0 CAPITAL EXPENDITURES 68,590 463,500 502,913 143,894 28 6"/0 492,855 NON-OPERATING EXPENSES Debt Service Expenses 441,000 441,000 0.00o44,1 000 Pass Through Payments ` w Q Transfers to Other Funds 9,018,609 804,000 857,401 450,901 52 69 W 857 401 Depreciation 82,045 82,000 82,000 �0 0% 82 000 Loans Made NON-OPERATING EXPENSES 9,100,664 1,327,000 1,380,401 460,901 32 7% 1,380,401 EXPENDITURES 19,698,762 14,365,772 15,444,662 6,496,049 '- 42.1"/0 15,072 333 Projected ver n er Budget 372,229 Qtr 2-All Funds 04 5/5/2004 Community Services Page 17 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Economic Development - All Funds R14113 MONTHLY (MonthlyRpt) For the_Pe�iodiEn`ding.Marchrv31 2004 _� oft he Eiscal YewCompleted Prior Year Adopted Revised Year To Date YearTo Date Protected Description Actual Budget Budget Expended %Expended Expenditure EXPENDITURES PERSONAL SERVICES Salaries Permanent 1,033,744 1,190,651 1,175,205 518,472 .1% 1 057 197 Salaries Temporary 96,457 22,553 45 987 Salaries Overtime 320 28 57 Termination Pay Outs 17,316 21 43 Benefits 272,111 337,004 315,674 124,918 39.6% 334074 PERSONAL SERVICES 1,419,949 1,527,655 1,490,879 665,992 �44.7"/0 1,437,358 OPERATING EXPENSES �r Utilities 2,554 1,900 1,900 0 0% 1 862 Purchased Water N 0 Equipment and Supplies 53,046 92,258 92,258 23,922 25 9°!0 90 413 Repairs and Maintenance 200 200 00 10 196. Conferences and Training 24,630 45,436 40,436 7,241 17`90 39 627; Professional Services 541,481 3,336,713 2,049,851 381,284 18.60% 2 008;854 Other Contract Services 99,596 607,497 614,598 112,662 1 602 QW6' 306. Rental Expense 4,021 6,000 6,000 5,286 881% Ei 588Q Claims Expense ~ 0. Insurance 0. Pension Payments '0 Contribution to Private Agency ;" 0 Payments to Other Governments 40,000 274,560 15,000 5,421 36.1% 14,700 Interdepartmental Charges 0 Expense Allowances 6,029 6,000 6,000 3,015 50 /0 5`880 Other Expenses 149,356 111,236 136,664 30,335 22P2 133 931 OPERATING EXPENSES 920,714 4,481,800 2,962,907 669,166 19`2"/° 2,903,649 CAPITAL EXPENDITURES Land Purchase 153,000 A Z 153 000 Improvements 1,603,873 5,522,883 8,146,858 3,548,468 436% 7 983 921.` Equipment 0 Vehicles 0 Software-Capital 0 CAPITAL EXPENDITURES 1,603,873 5,522,883 8,146,858 3,701,468 45.4°k8,136921 NON-OPERATING EXPENSES Debt Service Expenses 260,261 260,261 519,821 259,560 � 49:9 0 519 821 Pass Through Payments 125,321 200,000 41,786 200 000 Transfers to Other Funds 45,500 Depreciation 0 Loans Made 488,257 500,000 509,806 180,210 35t39!° 509 80ti NON-OPERATING EXPENSES 919,338 760,261 1,229,627 481,556 392% 1,2_29,627 EXPENDITURES 4,863,874 12,292,699 13,830,271 5,418,182 39-i 4 -13,707 555 Projected ver n er Budget 122,716 Qtr 2-All Funds 04 5/5/2004 Economic Development Page 18 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Fire - All Funds R14113 MONTHLY (MonthlyRpt) For the°Period:Endin March 3'1 2004, E - 50:1'/0 . , ofthe=Fiscal Year:Completed Prior Year Adopted Revised Year To Date Y:ear'JT&Dater Projected-_" Description Actual Budget Budget Expended 'Expended Ex66ndit6re EXPENDITURES PERSONAL SERVICES Salaries Permanent 10,854,724 11,476,539 11,476,539 5,288,154 46.1:% 10842V877 Salaries Temporary 155,652 97,575 97,575 36,304 37:2% 74026 Salaries Overtime 3,211,854 2,649,734 2,719,734 1,791,390 65 9% 3 652,756 Termination Pay Outs 10,209 4,303 � 8 774 Benefits 4,422,438 6,230,732 6,230,732 2,149,360 34 % 5 952 739 PERSONAL SERVICES 18,654,877 20,454,580 20,524,680 9,269,511 45 2% 20,531 172 OPERATING EXPENSES Utilities 118,787 181,117 178,775 10,604 - 59% 175200 Purchased Water 435 700 700 1,000 142.90/c' 2;500 Equipment and Supplies 882,915 1,135,159 1,123,208 723,702 64.4% 1 097 828 Repairs and Maintenance 200,986 416,671 449,237 210,373 46 8% 440 252 Conferences and Training 47,373 113,628 113,628 19,370 .-a 17.0% 111355 Professional Services 728,041 957,775 997,958 562,114 563% 977;999 Other Contract Services 1,177,445 1,436,836 1,438,704 1,320,296 � 9 % 1438704 Rental Expense 53,432 80,535 80,573 65,056 80.7% 78 962 711 Claims Expense - 0 Payments to Other Governments 930,992 778,630 778,630 536,521 68.9% 763,057 Interdepartmental Charges 160,000 283,949 283,949 80,000 2820/c' 278;270 Expense Allowances 27,902 30,950 30,950 23,796376% 30331` Other Expenses 4,111 9,095 9,095 2,351 25 8°!0 . ;8,913 OPERATING EXPENSES 4,332,418 6,425,045 6,485,406 3,555,180 g 64.88% 5,403,371; CAPITAL EXPENDITURES Land Purchase x 0 Improvements 50,345 85,000 135,234 8,234 -r 61°!0 132,529 Equipment 121,464 348,767 418,247 298,749 71:4% 409882 Vehicles 357,204 720,319 511,993 `F7x1.1°0 705913 Software-Capital 10,000 40,000 40,000 fl u u% 39 200 CAPITAL EXPENDITURES 181,809 830,971 1,313,800 818,977 62 30 1,287,524 NON-OPERATING EXPENSES Debt Service Expenses 10,217 352 352 0!0% 352: Pass Through Payments 0 Transfers to Other Funds 253,957 253,957 253,957 126,979 s 50.0% 253957; Depreciation - 0 NON-OPERATING EXPENSES 264,174 264,309 254,309 126979 49:9°k 254 309 EXPENDITURES 23,433,278 26,964,905 27,578,095 13,770:647 49:9,% 27,476 376 Projected ver n er Budget 101,719 Qtr 2-All Funds 04 5/5/2004 Fire Page 19 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003104 Library - All Funds R14113 MONTHLY (MonthlyRpt) _or the Period°Endm March 3.1„2004` FAN, - � `_-. " ` of-the Fiscal.Year Completed Prior Year Adopted Revised Year To Date Y�ea�To Date PFo�ected Description Actual Budget Budget Expended %Expended Expenditure s EXPENDITURES PERSONAL SERVICES - Salaries Permanent 1,997,051 1,874,044 1,874,044 915,49748 9% 106,756 Salaries Temporary 646,546 512,459 529,224 248,874 =47 0% JZ1567 VO Salaries Overtime 1,954 180 180 84 46:7% 1:71' Termination Pay Outs 514 5,737 11 698 Benefits 564,608 747,988 747,988 275,554 36 8% 774 704 PERSONAL SERVICES 3,210,673 3,134,671 3,151,436 1,445,74745 9% 3,160,798 OPERATING EXPENSES Utilities 96,214 85,700 85,700 53,738 627°/o 83 986 Purchased Water 0 Equipment and Supplies 784,452 484,068 624,988 417,337 66 8% 612;48t3 Repairs and Maintenance 224,653 262,816 275,623 190,295 `€ 69:0%° 270 1.1�1 Conferences and Training 1,845 1,018 1,018 527 8°moo y 998 Professional Services 1,602 41,500 42,370 1,423 340 41 623 Other Contract Services 880 18,596 18,596 200 1 1% 18 224 Rental Expense 650 650 40 0°`/0637 Claims Expense = 0 Payments to Other Governments a)' Interdepartmental Charges 0 -. Expense Allowances 5,885 6,000 6,000 2,815 4619%° 5;880 Other Expenses 693 750 750 1,549 206 5% OPERATING EXPENSES 1,116,223 901,098 1,055,696 667,884 63:3 1,034,581 CAPITAL EXPENDITURES Land Purchase 0 Improvements 0 Equipment _0 Vehicles :0 Software-Capital s 3 0 CAPITAL EXPENDITURES �° 0 NON-OPERATING EXPENSES Debt Service Expenses =x£ 0 Pass Through Payments 0 Transfers to Other Funds 681,000 681,000 681,000 332,000 48 8% 681,000 Depreciation 3 0 NON-OPERATING EXPENSES 681,000 681,000 681,000 332,000 48 8°% fi 681,000 EXPENDITURES 6,007,896 4,716,769 4,888,131 2,445,631 _ R50.0% 4,876 379 Projected ver n er Budget 11,752 Qtr 2-All Funds 04 5/5/2004 Library Page 20 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Information Systems - All Funds R14113 MONTHLY (MonthlyRpt) FWthe`Period Endmg'March 31 2004-= = 'S0 1% Hof tfie Fiscal Year Completed Prior Year Adopted Revised Year To Date Year To Dated Projected Description Actual Budget Budget Expended %-Expentlet Expenditure EXPENDITURES PERSONAL SERVICES Salaries Permanent 512,411 2,442,257 2,442,257 1,025,623 42- 2,291,309 Salaries Temporary 42,607 166,880 166,880 44,981 27:0% 91 7=19 Salaries Overtime 24,935 53,000 53,000 32,860 � " 620°/067,004 Termination Pay Outs 4,445 0 Benefits 134,941 903,635 903,635 236,823 - 26.% 847,,784 PERSONAL SERVICES 719,338 3,565,772 3,565,772 1,340,286 = 37 6% 3,297,81Z OPERATING EXPENSES Utilities 473,402 844,000 844,000 825,165 INT 8% 827,120 Equipment and Supplies 171,586 231,400 229,999 62,181 27+0 0 225°399 Repairs and Maintenance 379,597 1,337,934 1,346,409 887,177 6&9. 1 3ff19 481 Conferences and Training 18,723 120,500 120,500 17,984 14 9.- 118"090 Professional Services 1,667,617 1,616,569 1,616,569 243,743 15:1a% 1584238 Other Contract Services := `0 Rental Expense . 0 Interdepartmental Charges `=0 Expense Allowances 3,870 10,200 10,200 4,860 9,996 Other Expenses 32,300 32,300 664 2.1% 31,654 OPERATING EXPENSES 2,714,794 4,192,903 4,199,977 2,041,772 4&6% "4;115,977 CAPITAL EXPENDITURES Improvements 0 Equipment 1,395,629 1,395,629 1,688 = K-0:1% 1 367 7.1Ei Vehicles0 Software-Capital 201,136 1,897,449 2,090,496 201,363 9.6% 2 048 686 CAPITAL EXPENDITURES 201,136 3,293,078 3,486,125 203,051 5:8% 3,416,403 NON-OPERATING EXPENSES Debt Service Expenses 0. Transfers to Other Funds ,0 NON-OPERATING EXPENSES 0 EXPENDITURES 3,635,268 11,051,763 11,251,874 3,585,110 K 31.9,00 10,830196 Projected ver n er Budget 421,678 Qtr 2-All Funds 04 5/5/2004 Information Systems Page 21 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Non Departmental - All Funds R14113 MONTHLY (MonthlyRpt) : ofath50 / - egFicl,YearForthe'Period°Endm Mar-ch3A,2004= Comp - lefe8 Prior Year Adopted Revised Year To Date YearTo Date Projected Description Actual Budget Budget Expended °/ Ezpendeil Expenditure z EXPENDITURES r PERSONAL SERVICES Salaries Permanent 17,627 5,695 A11 612 Salaries TemporaryL 0 Salaries Overtime 64 6 12 Termination Pay Outs 1,975,711 2,050,000 2,050,000 1,117,445 54 5% 2,0 000 Benefits 79,976 38,987 _ 79 49Z PERSONAL SERVICES 2,073,378 2,050,000 2,050,000 1,162,133 56 70 2,141,122 OPERATING EXPENSES Utilities 4,308,120 5,878,000 5,879,500 1,518,206 258'/o 5461910 Purchased Water 1,045 1 045 Equipment and Supplies 5,787 215,000 873,000 865,700 a99 2'/0 873 000 Repairs and Maintenance 0 Conferences and Training '= 0 Professional Services 39,257 76,000 76,000 6,465 8 5% - 74 480 Other Contract Services 831,742 662,000 754,995 491,209 6"5A1% 739 895 Rental Expense 124,856 1,849,000 2,072,077 2,010,584 9700% =2 030635 Claims Expense 21,899,366 r£0 Insurance 22,000 22,000 21560 Pension Payments 0 Contribution to Private Agency 0 Payments to Other Governments 2,150,713 3,114,000 3,114,000 2,202,747 � g70 7/C 3 051 720. Interdepartmental Charges 40,000 40,000 40,000 20,000 a50 00%0' Z 39 200 Expense Allowances 1,542 1,261 _ 1 26f Other Expenses 979,835 36,312 23,817 65 6%0 35 586 OPERATING EXPENSES 30,381,218 11,856,000 12,867,884 7,141,034 x 6616% 12,330,292 CAPITAL EXPENDITURES Land Purchase 0 Improvements 416,396 260,000 341,814 89,260 1,0 334978 Equipment 576,821 956,500 1,101,585 430,966 3916. 1 079 553: Vehicles 925,221 829,500 829,563 651,255 78 5% �812 972 Software-Capital 400,000 400,000 0'00 392,000 Capitalized PP&E Offset -8,853,303 -8,092 8Q92 CAPITAL EXPENDITURES -6,934,864 2,446,000 2,672,961 1,163,389 = 43 5% 2,611,411; NON-OPERATING EXPENSES _ Debt Service Expenses 14,669,161 18,783,362 20,798,525 10,952,333 52 7/0 20 798 525 Pass Through Payments 320,000 120,000 0£0'/0 120 000 Transfers to Other Funds 21,174,116 15,885,359 17,385,359 7,247,083 41 7'/0 17 385 359 Depreciation 13,245,481 2,900 _ 2 900, Loans Made ;{ 0 fr` NON-OPERATING EXPENSES 49,088,758 34,988,721 38,303,884 18,202316 747:5% 38,308,784 EXPENDITURES 74,608,490 51,340,721 66,894,729 27,668:871 =L _g 4%6 55389 609 Projected ver n er Budget 606,120 Qtr 2-All Funds 04 5/5/2004 Non Departmental Page 22 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Planning - All Funds R14113 MONTHLY (MonthlyRpt) For tKd,Period-Endin 'March 31 2004 ` F _�50 10 k,, Wttie Fiscal YearComplefed Prior Year Adopted Revised Year To Date Year*.To Date Protected Description Actual Budget Budget Expended oExpend'ed Expenditure EXPENDITURES PERSONAL SERVICES Salaries Permanent 1,509,057 1,610,948 1,610,948 699,316 >,y =434% 1 475 949 Salaries Temporary 66,479 100,000 100,000 34,981 35.0% 71,328 Salaries Overtime 5,329 11,100 11,100 5,726 ,!5 6% 11 676 Termination Pay Outs 0 Benefits 394,005 505,498 505,498 185,171 36 6% 463 448 PERSONAL SERVICES 1,974,870 2,227,646 2,227,546 925,194 41 6% 2,022,401 OPERATING EXPENSES r Utilities 3,725 3,725 0:0% 3 651 Equipment and Supplies 17,206 38,600 41,528 14,905 359% 40 t97 Repairs and Maintenance ` 0 Conferences and Training 20,302 62,050 62,050 13,248a. 214°/a 60 809. Professional Services 358,728 124,000 553,885 429,885 77:6% 542 80Z_ Other Contract Services 9,359 27,000 31,384 17,397 554°/o` 30;756 Rental Expense _ 0 Interdepartmental Charges 0 Expense Allowances 5,885 6,000 6,000 2,954 49'%a 5,880 Other Expenses i 0 OPERATING EXPENSES 411,480 261,376 698,671 478,389 686 684,601f CAPITAL EXPENDITURES " Improvements f 0. Equipment 10,000 10,000 0:0% 9'800 Vehicles 7 0 Software-Capital 0 CAPITAL EXPENDITURES 10,000 10,000 >0`0'/0 9,800 NON-OPERATING EXPENSES Transfers to Other Funds 0 NON-OPERATING EXPENSES H 0 EXPENDITURES 2,386,350 2,498,921 2,936,117 1,403,583 478% 2,716,802 Projected ver n er Budget 219,315 Qtr 2-All Funds 04 5/5/2004 Planning Page 23 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 Police - All Funds R14113 MONTHLY (MonthlyRpt) F:.or,tfielPeriod E rid iri MarcFif3,1,2004,; "' . 501'/0$ of the Fiscal Year--Com lete.d Prior Year Adopted Revised Year To Date Year To Date F ojected Description Actual Budget Budget Expended %Expended Expenditure EXPENDITURES PERSONAL SERVICES - Salaries Permanent 24,263,440 23,976,549 24,002,619 11,267,051 46.9% 23 024;221 Salaries Temporary 707,696 214,844 214,844 297,795 138.E%° = 607223 Salaries Overtime 2,637,993 1,184,395 1,416,624 1,254,147 188.5% 2 857;284 Termination Pay Outs 13,666 :0 Benefits 8,933,832 11,902,028 11,914,758 4,192,92035 2% 11 396,989 PERSONAL SERVICES 36,556,627 37,277,816 37,548,845 17,011,914 45`3"/0 37,885,717 OPERATING EXPENSES `y Utilities 165,855 93,887 94,645 90,827 96 01 92 752 Equipment and Supplies 1,082,062 900,699 665,366 439,440 = 66,.00 652;059. Repairs and Maintenance 1,032,853 746,924 752,787 666,401 88:5% 737;Z3t Conferences and Training 179,733 287,882 292,992 143,367 48 99% = 287132. Professional Services 482,715 552,595 613,667 393,132 64 1% 601394 Other Contract Services 98,532 145,959 145,861 15,697 10 8% 142 944 Rental Expense 398,039 420,998 420,998 353,863 84 1% 412 578 Interdepartmental Charges f> Expense Allowances 375,629 347,500 347,500 309,763 89.1°/u 340 550 Other Expenses -1,690 7,725 7,725 6,160 79 76 7 571 OPERATING EXPENSES 3,813,728 3,504,169 3,341,640 2,418,649 72 4% 3,274,710 CAPITAL EXPENDITURES Land Purchase 0. Improvements 0. Equipment 1,446,105 1,407,748 1,865,685 834,257 4 Ep% 1 828;371 Vehicles 25,000 25,000 0.0% 24500. Software-Capital 79,969 175,175 235,794 128,760 54 6% 231 078 CAPITAL EXPENDITURES 1,626,074 1,607,923 2,126,479 963,017 _ 45.3'/0 4-, 2;083 949, NON-OPERATING EXPENSESkx Debt Service Expenses 181,304 30 Transfers to Other Funds 442,592 400,000 433,333 241,740 55 8.0 _-433 333 Depreciation °0 NON-OPERATING EXPENSES 623,896 400,000 433,333 241,740 9 55:80 433,333 EXPENDITURES 42,520,326 42,789,908 43,450,198 20,635,319 s 475 k :43,677710 Projected ver n er Budget (227,512) Qtr 2-All Funds 04 5/5/2004 Police Page 24 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003104 Public Works - All Funds R14113 MONTHLY (MonthlyRpt) For the Peri6d.Endin`"Macch,;3£1,.2004`, ". _, 601% of the Fiscal Year Completed Prior Year Adopted Revised Year To Date Year ToaDate Pro�e66d '. Description Actual Budget Budget Expended VEExpended -Expenditure:' EXPENDITURES PERSONAL SERVICES Salaries Permanent 13,286,818 12,956,021 12,956,021 5,717,094 44.1% 11 757 512 Salaries Temporary 387,523 513,016 513,016 146,790 28:6% 350,000 Salaries Overtime 530,712 546,043 546,043 207,786 g 38 1/° 500,000 Termination Pay Outs 119,098 71,545 145 885 Benefits 4,650,405 5,221,689 5,221,689 1,933,028 37 0% 4 738 277 PERSONAL SERVICES 18,974,556 19,236,769 19,236,769 8,076,243 ' 42 0% 17,491,674 OPERATING EXPENSES r,. r Utilities 1,578,100 1,616,625 1,616,625 218,071 #. 135% 1 584 293 r , Purchased Water 8,507,093 9,462,800 9,462,800 7,090,551 74 /0 9 273 544 Equipment and Supplies 1,519,585 1,591,385 1,372,411 633,024 46 % 1 344 963 Repairs and Maintenance 3,711,356 6,062,486 6,576,159 3,740,892 56.?9% 6 444,636 Conferences and Training 34,138 92,800 92,800 26,602 2W77% 90 944 Professional Services 2,715,898 1,733,360 4,389,857 1,861,797 42:4% 4 302 060 Other Contract Services 9,160,150 9,910,305 9,923,665 9,489,872 956% 9 725,192 Rental Expense 5,128 32,400 32,400 15,46447701, 31 752 Claims Expense 629,900 0 Payments to Other Governments 106,338 588,000 844,955 6,705 ul .0 828;056 Interdepartmental Charges 8,021,925 8,580,532 8,580,532 1,736,112 20. 1 o 8408921 Expense Allowances 61,749 67,700 67,700 33,313 49 /0 66 346 Other Expenses 278,474 2,014,000 2,014,000 213,061 10:6% 1 973 720 ti OPERATING EXPENSES 36,329,832 41,752,393 44,973,905 25,065,465 � - 557% ' 44,074,426 CAPITAL EXPENDITURES Land Purchase 4,500 .4 0 Improvements 28,866,468 46,024,810 63,293,572 17,963,222 28 4?/° 47 470 179 Equipment 332,041 2,003,000 2,657,872 957,148 36 0% 2 604 T.15 Vehicles 341,551 358,000 609,228 568,099 TT, 93 2%0 597 043 Software-Capital 0 CAPITAL EXPENDITURES 29,644,660 48,385,810 66,560,671 19,488,469 v 29:3% 50,671-937 NON-OPERATING EXPENSES Debt Service Expenses 23,456 1,205,000 1,293,500 1,293,414 100 0% 1 293 500 Pass Through Payments J0 Transfers to Other Funds 3,525,160 131,000 286,170 220,670 77'P/0 = 286170 Depreciation 2,662,464 2,000,000 2,000,000 33,039 1*7% 2 000;000 NON-OPERATING EXPENSES 6,211,080 3,336,000 3,679,670 1,647124 43.2°k 3,579,670 EXPENDITURES 91,060,028 112,710,972 134,351,015 54,177:301 40;3/° 115,817,707 Projected ver n er Budget 18,533,308 Qtr 2-All Funds 04 5/5/2004 Public Works Page 25 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 City Treasurer - All Funds R14113 MONTHLY (MonthlyRpt) _.. _ For thePe�iod'Endln MarcFio31;2004 � - 501"/ ofthe Fiscal;YearCompleted eL Prior Year Adopted Revised Year To Date Year;To Date Projected Description Actual Budget Budget Expended :'%Eyendeii Expenditure' EXPENDITURES PERSONAL SERVICES Y Salaries Permanent 853,142 872,978 872,978 409,298 46.9% 834,584 Salaries Temporary 22,777 483 985 Salaries Overtime 2,091 1,6903 446 Termination Pay Outs 0 Benefits 252,646 326,991 326,991 119,195 y 36 5% 312 969. PERSONAL SERVICES 1,130,656 1,199,969 1,199,969 530,6672"/0 1,151,984 OPERATING EXPENSES 0. Utilities 363 600 600 588 Equipment and Supplies 120,004 212,751 224,722 134,959 p 60 1"% 194,976 Repairs and Maintenance 16,054 17,373 17,373 11,804 :67 9'/0 17;026 Conferences and Training 3,279 900 930 429 Y46.1% 911` Professional Services 349,034 40,000 40,966 8,966 2A px � 40 147 Other Contract Services 59,412 90,980 99,328 116,756 11€7.50 _ 122 594 Rental Expense =_ s0 Expense Allowances 6,023 6,000 6,000 2,954 49e2'/o 5;880 Other Expenses 0 OPERATING EXPENSES 554,170 368,604 389,918 275,867x= 70.8% 382`121 CAPITAL EXPENDITURES Improvements �a 0 Equipment 28,240 0 Software-Capital 53,800 53,800 MOF/0 52-724 CAPITAL EXPENDITURES 28,240 53,800 63,800 0.0'/0 52,724 NON-OPERATING EXPENSES 0 EXPENDITURES 1,713,065 1,622,373 1,643,687 806,534 - _ 49:1% 1;586;829 Projected ver n er Budget 66,858 Qtr 2-All Funds 04 5/5/2004 City Treasurer Page 26 10:35 AM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 General Fund Revenue Account Account FY 02103 FY 02103 FY 03/04 FY 03/04 FY 03/04 FY 03104 Difference Description Number Actual 2nd Quarter Budgeted Revised 1st Quarter 2nd Quarter PROPERTY TAXES 40010 Basic Levy 40060 Sec Basic Levy 40070 -25,269,027 -9,953,832 -26,960,000 -26,960,000 -9,885,119 -12,388,939 -14,571,061 Unsec Basic Levy 40080 -1,366,525 -76,955 -1,468,000 -1,468,000 -86,660 -1,381,340 Basic Levy 40060 -26,635,553 -10,030,787 -28,428,000 -28,428,000 -9,885,119 -12,475,599 -15,952,401 Prior Year Prop.Taxes 40160 Sec Prior Year Prop.Tax 40170 -479,323 -150,653 -450,000 -450,000 -82,027 -166,476 -283,524 Unsec Prior Year Prop.Tax 40180 -18,350 -18,000 -18,000 -18,000 Prior Year Prop.Taxes 40160 -497,673 -150,653 -468,000 -468,000 -82,027 -166,476 -301,524 Supp Roll Prop.Taxes 40305 Sec Supp Roll 40310 -1,463,599 -498,635 -850,000 -850,000 -210,596 -463,326 -386,674 Supp Roll Debt Svc 40320 Supp Roll Prop.Taxes 40305 -1,463,599 -498,635 -850,000 -850,000 -210,596 -463,326 -386,674 Other Prop.Taxes 40350 Interest Prop.Taxes 40360 -39,898 -100,000 -100,000 -100,000 Misc Prop.Taxes 40370 -152,801 -822 -1,279,113 -1,279,113 -538,846 -703,026 -576,087 Aircraft Taxes 40380 -96 293 Refund of Impounds 40390 Homeowner Exemption 40400 -362,689 -163,009 -390,000 -390,000 -11,883 -186,166 -203,834 Utility Unitary Tax 40410 -535,904 -260,565 -680,000 -680,000 -275,993 -404,007 Other Prop.Taxes 40350 -1,091,389 -424,396 -2,449,113 -2,449,113 -550,729 -1,164,892 -1,284,221 PROPERTY TAXES 40010 -29,688,213 -11,104,470 -32,195,113 -32,195,113 -10,728,473 -14,270,293 1 -17,924,820 OTHER LOCAL TAXES 41000 Sales Tax 41100 1%Allocation Sales Tax 41110 -24,266,926 -8,382,165 -24,675,000 -24,675,000 -2,541,130 -8,359,272 -16,315,728 Public Safety Sales Tax 41120 -1,614,736 -563,691 -1,935,000 -1,935,000 -158,713 -587,435 -1,347,565 Measure M Sales Tax 41130 Sales Tax 41100 -25,881,662 -8,945,857 -26,610,000 -26,610,000 -2,699,843 -8,946,707 -17,663,293 Franchises 41200 Utility Franchises 41210 -2,664,904 -303,986 -2,000,000 -2,000,000 -598,560 -1,401,440 Transfer Station Franchi 41220 -258,186 -79,818 -283,000 -283,000 -20,460 -77,880 -205,120 Pipeline Franchises 41230 -66,864 -53,432 -188,000 -188,000 -16,316 -171,684 Refuse Franchises 41240 -380,775 -121,500 -430,000 -430,000 -32,735 -129,794 -300,206 Cable TV Franchises 41250 -1,247,565 -297,154 -1,600,000 -1,600,000 -348,369 -1,251,631 Coca Cola Franchise 41260 -300,000 -300,000 -300,000 -300,000 -300,000 0 Bus Bench Franchise 41270 -438,750 -255,000 -300,000 -300,000 -63,750 -236,250 Franchises 41200 -5,357,045 -1,410,889 -5,101,000 -5,101,000 -53,196 -1,534,669 -3,566,331 In-Lieu Tax 41300 Water In-Lieu 41310 -3,500,764 -2,840,000 -2,840,000 -2,840,000 Water Master Plan In-Lie 41320 -1,014,668 -2,500,000 -2,500,000 -2,500,000 In-Lieu Tax 41300 -4,515,432 -5,340,000 -5,340,000 -5,340,000 Transient Occupancy Tax 41400 -1,972,786 -554,966 -2,137,000 -2,137,000 -450,599 -1,000,528 -1,136,472 Utility Users Tax 41500 Water Utility Tax 41510 -1,413,982 -498,157 -1,414,000 -1,414,000 133,819 -227,619 -1,186,381 Gas Utility Tax 41520 -1,833,377 -491,246 -1,900,000 -1,900,000 -112,846 -776,474 -1,123,526 Telephone utility Tax 41530 -6,627,439 -2,161,552 -7,000,000 -7,000,000 -533,582 -2,448,330 -4,551,670 Electric Utility Tax 41540 -6,891,995 -2,243,868 -7,300,000 -7,300,000 -387,486 -2,074,666 -5,225,334 Cable Utility Tax 41550 -1,542,894 -504,015 -1,500,000 -1,500,000 -142,142 -549,079 -950,921 Utility Users Tax 41500 -18,309,686 -5,898,838 -19,114,000 -19,114,000 -1,042,238 -6,076,168 -13,037,832 OTHER LOCAL TAXES 41000 -66,036,611 -16,810,649 -58,302,000 -58,302,000 -4,246,876 -17,658,072 -40,743,928 LICENSE AND PERMITS 42000 Lic General 42100 Fire Code Lic 42103 -145,830 -69,572 -102,600 -102,600 -35,970 -69,487 -33,113 Oil Well Taxes Lic 42105 -589,780 -147,757 -575,000 -575,000 -47 -147,049 -427,951 Business Lic 42110 -2,121,875 -1,000,254 -1,900,000 -1,900,000 -434,990 839,617 -1,060,383 Bicycle Lic 42115 9,115 6,045 1,435 -3,390 3,390 FY 03-04 2nd Quarter Revenues 5/6/2004 Master Page 27 4:41 PM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 General Fund Revenue Account Account FY 02103 FY 02/03 FY 03/04 FY 03/04 FY 03/04 FY 03/04 Difference Description Number Actual 2nd Quarter Budgeted Revised let Quarter 2nd Quarter Oil Inspection 42120 -135,785 1,437 -53,640 -53,640 -8,382 -40,798 -12,842 Miscellaneous Lic 42125 -21,140 -11,386 -7,000 -7,000 -6,008 -10,600 3,600 Deferred Fees 42128 Subdivision 42130 -20,476 -10,300 -10,000 -10,000 -517 -517 -9,483 Svcmark 42135 Lie General 42100 -3,044,000 -1,246,763 -2,648,240 -2,648,240 -487,348 -1,111,458 -1,536,782 Lie and Permits Public Wo 42150 Street and Curb 42152 -947 -785 Encroachment Permit 42155 -623,649 -336,919 -680,000 -680,000 -76,678 -156,832 -523,168 Erosion Control 42160 Grading Permit 42165 -95,904 -42,002 -100,000 -100,000 -48,152 -88,018 -11,982 Harbor&Dock Const 42170 -3,139 -1,655 -5,000 -5,000 -325 -1,367 -3,633 Hydrant Use 42175 Obstruction Permit 42180 -26,366 -19,162 -35,000 -35,000 -12,100 -27,356 -7,644 Parking Permit 42185 -13,803 -1,592 -1,500 -1,500 -850 -1,553 53 Stock Piling 42190 Wide/Overweight/Loading 42195 -17,425 -9,553 -18,000 -18,000 -728 -2,984 -15,016 Lie and Permits Public Wo 42150 -781,234 -411,668 -839,600 -839,500 -138,833 -278,110 -561,390 Lie and Permits Bldgs 42300 Alarm Permits 42305 -117,910 -58,680 -135,000 -135,000 -32,345 -75,231 -59,769 Building Permits 42310 -1,152,803 -531,362 -1,290,735 -1,290,735 -296,852 -551,812 -738,923 Plumbing Permits 42315 -198,495 -91,458 -222,161 -222,161 -54,107 -122,433 -99,728 Electrical Permits 42320 -215,146 -109,920 -267,008 -267,008 -49,369 -105,367 -161,641 Mechanical Permits 42325 -168,262 -86,801 -210,849 -210,849 -46,649 -95,532 -115,317 Combination Permits 42330 Swim Pool Permits 42335 Swim Building 42340 -57,348 -25,402 -88,041 -88,041 -10,348 -23,730 -64,311 Swim Electrical 42345 -13,358 -6,185 -2,312 -4,980 4,980 Swim Plumbing 42350 -10,118 -4,657 -1,781 -4,148 4,148 Swim Pool Permits 42335 -80,824 -36,244 -88,041 -88,041 -14,442 -32,857 -55,184 Certificate of Occupancy 42355 -135,337 -65,033 -110,000 -110,000 -31,786 -63,134 -46,866 Lie and Permits Bldgs 42300 -2,068,778 -979,498 -2,323,794 -2,323,794 -625,551 -1,046,366 -1,277,428 Lie and Permits Planning 42400 Planning Commission 42410 Coastal Development Per 42415 -1,993 -5,000 -5,000 -8,808 -13,157 8,157 Conditional Use Permit 42420 -63,886 -31,616 -25,000 -25,000 -12,254 -19,069 -5,931 Continuance 42425 -360,000 -360,000 -584 -359,416 Development Agreement 42430 -1,840 -1,840 -2,000 -2,000 -1,840 -1,840 -160 Ent Plan Amend-New Hr 42435 -4,680 -1,170 -1,500 -1,500 585 585 -2,085 Ent Plan Amend-Dir Re 42440 -500 -500 -500 General Plan Amendment 42445 -14,175 -14,175 -14,000 -14,000 -17,669 -17,669 3,669 Local Coastal Program 42450 -7,172 -7,172 7,172 Specific Plan Review 42455 Tentative Tract Map 42460 -38,785 -26,413 -10,000 -10,000 -2,942 -7,058 Variance 42465 -3,198 -1,599 -2,000 -2,000 -1,599 -1,599 -401 Zoning Map Amendment 42470 -6,440 -6,768 -10,000 -10,000 -10,000 Zoning Text Amendment 42475 -8,283 -8,283 8,283 Planning Commission-Ot 42480 270 270 -9,137 -9,137 9,137 Planning Commission 42410 -134,727 -83,310 -430,000 -430,000 -66,177 -80,867 -349,133 Zoning Administrator 42600 Coastal Development Per 42605 -18,522 -11,010 -15,000 -15,000 -17,287 -20,128 5,128 Conditional Use Permit 42610 -50,630 -31,314 -30,000 -30,000 -20,385 -43,706 13,706 Continuance 42615 -338 -61 -500 -500 -206 -294 Entitlmt Plan Amendment 42620 -2,459 -1,156 -2,500 -2,500 -6,178 -6,178 3,678 Sign Code Exception 42625 -4,536 -2,268 -3,000 -3,000 -1,540 -1,460 Temporary Use Permit 42630 -2,324 -2,000 -2,000 -3,371 -3,371 1,371 Tentative Parcel Map 42635 -22,570 -9,552 -10,000 -10,000 -1,926 -7,988 -2,012 Variance 42640 -15,951 -7,247 -10,000 -10,000 -15,048 -15,818 5,818 Zoning Admin.-Other 42645 -4,172 -2,492 -2,500 -2,500 -82 -5,082 2,582 Zoning Administrator 42600 -121,502 -65,100 -75,500 -75,500 -64,277 -104,017 28,517 Environ Processing 42700 Environ Assmnt 42705 -20,969 -13,015 -15,000 -15,000 -35,970 -43,092 28,092 Environ Impact Report 42710 -158,673 -20,000 -20,000 -140,370 -284,562 264,562 Environ Processing-Ot 42715 Environ Processing 42700 -179,642 -13,015 -35,000 -35,000 -176,340 -327,654 292,654 Staff Review 42750 Add Assign Proc-Add Chn 42755 -7,013 -3,906 -4,000 -4,000 -5,437 -10,251 6,251 CCBR Review 42760 -5,000 -5,000 -993 -4,007 FY 03-04 2nd Quarter Revenues 5/6/2004 Master Page 28 4:41 PM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 General Fund Revenue Account Account FY 02/03 FY 02/03 FY 03/04 FY 03/04 FY 03104 FY 03/04 i Difference Description Number Actual 2nd Quarter Budgeted Revised 1st Quarter 2nd Quarter Certificate of Complian 42765 -1,285 -1,070 -215 -215 215 Code Enforcement Fee 42770 -29,285 -12,813 -75,000 -75,000 -13,855 -28,450 -46,550 Design Review Board 42775 -39,247 -11,131 -20,000 -20,000 -21,961 -32,509 12,509 Final Parcel Map 42780 -1,608 -1,608 -4,000 -4,000 -843 -2,324 -1,676 Initial Plan,Zoning a 42785 -2,136 -708 -1,000 -1,000 -1,128 -2,418 1,418 Limited Sign Permit 42790 -7,523 -2,865 -2,000 -2,000 -1,177 -3,023 1,023 Preliminary Plan Review 42795 -5,002 -1,000 -1,000 -1,196 -1,196 196 Temporary Sign Permit 42800 -12,612 -7,427 -10,000 -10,000 -2,628 -7,785 -2,215 Temporary Sales/Event 42805 -16,281 -8,171 -10,000 -10,000 -4,764 -11,860 1,860 Zoning-Flood Verifica 42810 -56,737 -3,693 -3,000 -3,000 -45,686 -63,023 60,023 Appeals 42815 -5,830 -5,012 -2,000 -2,000 -1,540 -2,803 803 Staff Review-Other 42820 -16,856 -10,129 -10,000 -10,000 -9,255 -24,695 14,695 Staff Review 42750 -201,413 -68,532 -147,000 -147,000 -109,685 -191,545 44,545 Library 42850 Library Svc 42855 -593 -309 -36 -153 153 Library 42850 -593 -309 -36 -153 153 Parking In-Lieu 42860 -77 -60 -33 33 Lic and Permits Planning 42400 -637,953 -230,326 -687,600 -687,500 -416,515 -704,269 16,769 LICENSE AND PERMITS 42000 -6,531,965 -2,868,245 -6,499,034 -6,499,034 -1,568,248 -3,140,203 -3,358,831 FINES AND FORFEITURES 42900 Court/Traffic Fines 42905 -738,813 -198,338 -1,075,000 -1,075,000 -134,065 -310,746 -764,254 Library Fines 42910 Main Street Lib Finds 42915 -2,474 -1,272 -7,302 -7,302 -131 -131 -7,171 Center Lib Fines 42920 -115,272 -56,022 -113,500 -113,500 -26,777 -57,705 -55,795 Banning Lib fines 42925 -3,404 -1,387 -4,360 -4,360 -913 -1,803 -2,557 Oakview Lib Fines 42930 -2,669 -1,206 -2,766 -2,766 -508 -1,168 -1,598 Murphy Lib Fines 42935 -2,439 -1,312 -925 -925 -925 Library Fines 42910 -126,268 -61,199 -128,853 -128,853 -28,329 -60,807 -68,046 Parking Fines 42940 -2,595,778 -790,670 -3,939,000 -3,939,000 . -161,198 -737,491 -3,201,509 Parking Fines Delinquent 42945 -180,000 -180,000 -180,000 Alarm Fines 42950 -353,828 -123,000 -400,000 -400,000 -29,600 -108,704 -291,296 FINES AND FORFEITURES 42900 -3,814,676 -1,173,207 -5,722,853 -5,722,853 -353,193 -1,217,748 -4,505,105 USE OF MONEY AND PROP. 42955 Interest Income 42960 Pooled Cash Interest 42965 -272,652 112,514 -156,700 -156,700 -156,700 Market Adjustments 42966 88,645 81,388 81,388 -81,388 Restricted Cash Interest 42970 -228 228 Late Charges 42975 -51,967 -28,778 -50,000 -50,000 -18,031 -37,810 -12,190 Interfund Loans Interest 42977 -4,000,000 -5,795,000 Interest Income 42960 -4,235,974 -5,711,265 -206,700 -206,700 63,357 43,350 -250,050 Deferred Comp 43005 Def Comp c-84-A 43010 -59 59 Deferred Comp 43005 -59 59 Lease and Concession inco 43055 Waterfront Project 43065 Land Lease Income 43075 -679,131 -283,035 -833,600 -833,600 -195,378 -390,973 -442,627 Bldgs Lease Income 43085 Beach Concessions 43095 -69,491 -11,327 -70,000 -70,000 -9,991 -14,951 -55,049 Prop.Equipment Lease 43105 Rooms Rentals 43115 Main Street Room Rental 43125 -5,484 5,484 Center Room Rentals 43135 -47 -14 Senior Center Rentals 43136 -23,000 -23,000 -14,110 -8,890 City Gym Rentals 43137 -15,766 15,766 Clubhouse Rentals 43138 -2 -85,000 -85,000 -58,852 -26,148 Community Center Rental 43139 -48,000 -48,000 -45,212 -2,788 Rooms Rentals 43115 -49 -14 -156,000 -156,000 -139,424 -16,576 Central Park Concessions 43145 -132,191 -61,743 -1,309,585 -1,309,585 -34,027 -65,077 -1,244,508 Vending machines 43155 -31,021 -16,197 -30,000 -30,000 -7,109 -15,646 -14,354 FY 03-04 2nd Quarter Revenues 5/6/2004 Master Page 29 4:41 PM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 General Fund Revenue Account Account FY 02/03 FY 02/03 FY 03/04 FY 03/04 FY 03104 FY 03/04 Difference Description Number Actual 2nd Quarter Budgeted Revised 1st Quarter 2nd Quarter Rentals 43165 -75,775 -38,216 -47,000 -47,000 -19,388 -33,328 -13,672 Lease and Concession Inco 43055 -987,658 -410,532 -2,446,185 -2,446,185 -266,893 -659,399 -1,786,786 Royalties 43900 Oil Well 43910 -191,331 -51,818 -200,000 -200,000 -48,747 -96,876 -103,124 Other Royalties 43920 -40,751 -18,519 -8,513 -23,105 23,105 Royalties 43900 -232,083 -70,337 -200,000 -200,000 -57,260 -119,981 -80,019 Parking Revenue 44000 Parking Lots 44010 -1,678,547 -495,666 -2,087,700 -2,087,700 -150,314 -562,708 -1,524,992 Resident Parking Permit 44020 -3,500 -3,500 -3,500 Sunset Vista 44030 -37,374 -37,374 Parking Structures 44040 -1,040,657 -350,753 -1,136,000 -1,136,000 -156,683 -384,415 -751,585 Meters-Business 44050 -547,546 -226,698 -500,000 -500,000 -117,286 -253,458 -246,542 Meters-Residential 44060 -506,226 -158,874 -400,000 -400,000 -66,998 -160,688 -239,312 Meters-Recreational 44070 -656,583 -192,842 -529,000 -529,000 -90,825 -231,023 -297,977 Pier Plaza 44080 -698,382 -263,246 -600,000 -600,000 -120,942 -268,970 -331,030 Meters Beach Blvd. 44090 -11,754 -2,784 -4,000 -4,000 -1,186 -3,053 -947 Parking Revenue 44000 -5,177,069 -1,728,237 -6,260,200 -5,260,200 -704,234 -1,864,315 -3,395,885 Contract Jail Bookings 45000 City of FV Jail Bookings 45010 -80 80 City of Wstmnstr Jail Bo 45020 Other Municipalities 45030 -143 -143 -1,000 -1,000 -1,000 Other Govt Jail Bookings 45100 -525 -525 -500 -500 -500 Contract Jail Bookings 45000 -668 -668 -1,500 -1,500 -80 -1,420 PCS Wireless 45110 -192,065 -66,807 -3,542 -38,563 38,563 USE OF MONEY AND PROP. 42955 -10,825,516 -7,987,846 -8,114,585 -8,114,585 -967,572 -2,639,047 -5,476,538 REVENUE FROM OTHER AGENCIES 46000 State of California Agenc 46100 Tidelands Revenue 46110 -146,460 State Set-Aside 15% 46120 Real Prop.Transfer 46130 -1,250,640 -337,975 -1,000,000 -1,000,000 -130,967 -473,168 -526,832 State Mandated Cost Reim 46140 State Public Lib Funds 46150 -175,244 -175,244 -10,000 -10,000 -88,489 78,489 From State of Cal 46160 -73,637 -25,537 -189 -356 356 Vehicle License Fee 46170 -9,128,609 -3,775,182 -10,900,000 -10,900,000 -202,990 -3,470,159 -7,429,841 POST Reimbursement 46180 -25,452 -7,519 -28,000 -28,000 -415 -5,520 -22,480 Direct Library Loans 46190 -210 State of California Agenc 46100 -10,800,252 -4,321,456 -11,938,000 -11,938,000 -334,561 -4,037,692 -7,900,308 Federal Agencies 46300 AHFP 46310 CDBG Allocations 46320 Other Federal 46330 -29,660 -17,668 -2,838 -16,605 16,605 Federal Agencies 46300 -29,660 -17,668 -2,838 -16,605 16,605 County Agencies 46400 County Payments 46410 -28,863 -10,946 -132,704 -132,704 -868 -33,950 -98,754 Abandoned Vehicles 46420 -70,000 -70,000 -70,000 OCTA 46430 Entitlmt 46440 Grants 46450 OCTA 46430 Orange County Sanitation 46470 2,622 -8,273 Reg Narc O/T Reimburseme 46480 Other Governmental Agenc 46490 -6,889 -2,051 -3,000 -3,000 -3,555 -4,949 1,949 County Agencies 46400 -33,130 -21,270 -205,704 -205,704 -4,423 -38,899 -166,805 Gas Tax Revenues 46500 Gas Tax 2107.5 46520 AQMD 46710 Subvention 46720 Grants 46730 AQMD 46710 JPA'S 46740 Training 46750 FY 03-04 2nd Quarter Revenues 5/6/2004 Master Page 30 4:41 PM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 General Fund Revenue Account Account FY 02103 FY 02/03 FY 03/04 FY 03104 FY 03/04 FY 03/04 Difference Description Number Actual 2nd Quarter Bud eted Revised 1st Quarter 2nd Quarter Other 46760 -12,437 -7,841 -1,845 -7,998 7,998 JPA'S 46740 -12,437 -7,841 -1,845 -7,998 7,998 Other Agencies 46790 Fountain Valley 46800 -5,378 -2,241 -7,619 7,619 Westmnstr 46810 HBUHSD 46820 OVESD 46830 FVSD 46840 HBCSD 46850 City of Newport Beach 46860 Other 46870 -4,700 -3,060 3,060 Other Agencies 46790 -10,078 -2,241 -10,679 10,679 Gas Tax Revenues 46500 -22,515 -7,841 -4,086 -18,677 18,677 REVENUE FROM OTHER AGENCIES 46000 -10,885,567 -4,368,235 -12,143,704 -12,143,704 -345,909 -4,111,873 -8,031,831 CHARGES FOR CURRENT SVC 47000 Public Works 47100 Residential Tree Replace 47110 -7,466 -6,629 -3,025 -4,589 4,589 Developer Fee 47115 -98,274 -20,000 -20,000 -2,551 -66,708 46,708 Engineering and Insp Fee 47120 -192,111 -171,973 -200,000 -200,000 -15,112 -145,223 -54,777 GIS Survey Fee 47125 -15,000 -15,000 -528 -1,724 -13,276 Grading Plan Check 47130 -236,421 -111,052 -200,000 -200,000 -52,503 -98,629 -101,371 Landscape Inspection Fee 47135 -30,818 -17,514 -30,000 -30,000 -8,094 -14,097 -15,903 Landscape Plan Check 47140 -58,523 -15,130 -75,000 -75,000 -9,224 -14,066 -60,934 O.C.Sanitation Collecti 47145 Commercial Sanitation 47150 -656 -61,064 656 -656 Residential Sanitation 47155 -13,258 -3,435 -100,000 -100,000 -5,542 -6,950 -93,050 O.C.Sanitation Collecti 47145 -13,914 -64,499 -100,000 -100,000 -5,542 -6,294 -93,706 Public Impr Plan Check 47160 -178,630 -69,676 -150,000 -150,000 -49,023 -90,631 -59,369 Recordation Fee 47165 -3,424 -6,532 6,532 Reinspection Fee 47170 362 364 -2,000 -2,000 -2,000 Tract Map Review 47175 -1,200 -3,012 3,012 Traffic Impact Fee 47180 Traffic Plan Check Fees 47185 Water Quality Inspection 47190 -7,172 7,172 Public Works 47100 -815,794 -456,108 -792,000 -792,000 -150,226 -458,677 -333,323 Building 47200 Permit Issuance 47205 -279,679 -139,156 -260,000 -260,000 -60,655 -116,851 -143,149 Plan Review 47210 Building Plan Review 47215 -688,606 -332,938 -772,691 -772,691 -226,688 -555,511 -217,180 Plumbing Plan Review 47220 -25,649 -14,696 -35,700 -35,700 -12,854 -30,830 -4,870 Electrical Plan Review 47225 -54,285 -37,311 -94,161 -94,161 -18,466 -47,005 -47,156 Mechanical Plan Review 47230 -44,302 -19,607 -47,626 -47,626 -17,315 -54,995 7,369 Combination Review 47235 Planning Review 47240 -204,898 -93,077 -112,004 -318,102 318,102 Plan Review 47210 -1,017,740 -497,629 -950,178 -950,178 -387,328 -1,006,443 56,265 Plan Review Extension 47245 Permit Extension 47250 -7 -2 Microfilming 47255 -76,892 -35,802 -52,000 -52,000 -15,557 -27,565 -24,435 SMIP 47260 Automation Fee 47265 -92,000 -92,000 -92,000 Administrative Citation 47275 -71,516 -30,176 -33,000 -33,000 -53,140 -101,001 68,001 Building 47200 -1,445,835 -702,765 -1,387,178 -1,387,178 -516,679 -1,251,860 -135,318 Library 47300 Non-Res Library Card Fee 47305 -46,794 -23,347 35,000 -35,000 -11,010 -23,140 -11,860 Media Library 47310 -1,675 -805 1,098 -1,098 Library Reserve 47315 -2,238 -1,094 -476 -1,107 1,107 Community Enrichment Fee 47320 Library 47300 -50,707 -25,246 -35,000 -35,000 -11,486 -23,149 -11,851 Special City Svcs 47400 Video Productions 47410 Weed Abatement 47415 -15,447 -6,789 -20,000 -20,000 -13,370 -16,277 -3,723 Sewer Svcs 47420 Vehicle Body Work 47425 -388 Radio Maintenance 47430 -3,632 -1,506 -2,000 -2,000 -954 -2,156 156 Jail Charges 47435 -13,960 7,275 -16,000 -16,000 -16,000 FY 03-04 2nd Quarter Revenues 5/6/2004 Master Page 31 4:41 PM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 General Fund Revenue Account Account FY 02103 FY 02/03 FY 03104 FY 03/04 FY 03104 FY 03/04 Difference Description Number Actual 2nd Quarter Budgeted Revised list Quarter 2nd Quarter Impounded Veh.Rel.Fee 47440 -166,850 -80,160 -125,000 -125,000 -69,610 -164,825 39,825 Research Requests 47445 -243,204 -127,958 -200,000 -200,000 -19,721 -35,313 -164,687 Performance Bond Reducti 47450 -525 -525 Maps&Publications 47455 -327 -327 -304 304 Fingerprinting Fee 47470 Banners and Pennants 47480 Special City Svcs 47400 -444,333 -209,990 -363,000 -363,000 -103,655 -218,875 -144,125 Recreational Classes 47500 Recreational Fees 47501 -2,422,408 -804,375 -2,354,000 -2,354,000 -233,133 -694,165 -1,659,835 Junior Lifeguard 47510 -421,086 -425,000 -425,000 -425,000 Recreational Classes 47500 -2,843,494 -804,375 -2,779,000 -2,779,000 -233,133 -694,165 -2,084,835 Special Events 47600 -91,929 -45,065 -15,000 -15,000 -21,977 -24,758 9,768 Utility Charges 47700 Refuse Charges 47705 Water Sales 47710 Customer Billings 47725 -110,000 -110,000 -110,000 Setup Charges 47735 -114,625 -57,450 -825 825 City Water Usage 47745 Water Sales 47710 -114,625 -57,450 -110,000 -110,000 -110,000 Utility Charges 47700 -114,626 -57,450 -110,000 -110,000 -825 -109,175 Firemed 47800 Ambulance Charges 47850 -180,000 -180,000 -180,000 Emergency Response 47860 Police Emerg Resp 47865 -80,878 -43,364 -50,000 -50,000 -20,598 -29,990 -20,010 Fire Emerg Resp 47870 -4,067 -3,443 -5,000 -5,000 -871 -871 -4,129 Public Works Emerg Resp 47875 Emergency Response 47860 -84,945 -46,807 -55,000 -55,000 -21,469 -30,861 -24,139 Hazmat Fees 47900 Fire 47905 -10,745 -10,534 -10,500 -10,500 -450 -2,445 -8,055 Public Works 47910 -37,359 -22,584 -35,000 -35,000 -4,697 -22,322 -12,678 Hazmat Contracts 47915 -94 Hazmat Fees 47900 -48,198 -33,118 -45,500 -45,500 -5,147 -24,767 -20,733 Fire 47925 Fire Clearance Inspectio 47930 Fire Company Inspection 47935 -73,404 -215,000 -215,000 -41,112 -141,294 -73,706 Fire 47925 -73,404 -215,000 -215,000 -41,112 -141,294 -73,706 Miscellaneous 47950 Postage 47955 -4,220 -1,173 -229 -1,634 1,634 Bus Shelter Inspection 47960 Photocopying 47965 -16,011 -10,064 -2,099 -3,900 3,900 Abandoned Oil Wells 47970 -10,263 -5,229 -8,000 -8,000 -692 -2,965 -5,035 Insurance Subrogation 47975 -2,106 -2,106 Stop Loss Recoveries 47980 -1,400,000 -1,400,000 -1,400,000 Miscellaneous 47950 -32,600 -18,573 -1,408,000 -1,408,000 -3,020 -8,499 -1,399,501 Proprietary Fund Charges 48050 -3,138,170 -1,569,094 -4,309,600 -4,309,500 -1,836,112 -2,473,388 CHARGES FOR CURRENT SVC 47000 -9,184,034 -3,968,581 -11,694,178 -11,694,178 -1,107,905 -4,713,842 -6,980,336 OTHER REVENUE 48100 Sales 48110 Admissions 48120 Property 48130 Land Sales 48135 Equipment Sales 48140 -22,013 -3,946 -2,555 -3,799 3,799 Fixed Asset Sales 48145 -54,754 -29,688 -18,777 -38,085 38,085 Property 48130 -76,767 -33,634 -21,332 -41,884 41,884 Sales 48110 -76,767 -33,634 -21,332 -41,884 41,884 General Sales 48200 Coin Telephones 48210 -1,156 -858 -63 -127 127 FY 03-04 2nd Quarter Revenues 5/6/2004 Master Page 32 4:41 PM City of Huntington Beach 2nd Quarter Budget Report - FY 2003/04 General Fund Revenue Account Account FY 02103 FY 02/03 FY 03/04 FY 03/04 FY 03/04 FY 03/04 Difference Description Number Actual 2nd Quarter Budgeted Revised 1st Quarter 2nd Quarter Employee Phone Reimb 48220 -5,124 -2,554 -1,173 -2,731 2,731 Souvineer Sales 48230 -55 -45 -10 -10 10 Library Sales 48240 Records and Cassettes 48245 -267 -140 -46 -92 92 Lost Books 48250 -11,524 -6,455 -10,000 -10,000 -3,530 -5,937 -4,063 Library Sales 48240 -11,791 -6,594 -10,000 -10,000 -3,576 -6,029 -3,971 Bus Bench Ads 48260 -45,000 -11,250 -22,500 22,500 Plans and Specs 48270 -1,406 -982 -200 -650 650 Video Sales 48280 General Sales 48200 -19,531 -56,034 -10,000 -10,000 -16,272 -32,047 22,047 Donations 48300 -1,375 -1,375 -29,000 -29,000 -240 -240 -28,760 Naming Rights 48350 -250 -111,150 -111,150 -340 -110,810 Reimbursables 48370 Seacliff Partners 48375 -40 40 Blood Alcohol Reimburse 48380 -17,540 -17,540 -15,000 -15,000 -450 -14,550 Prop.Damage Reimb 48385 -13,113 -3,986 -5,000 -5,000 -27,484 -42,823 37,823 Mello-Roos Reimbursement 48390 Restitution 48400 -472 -472 -16,887 -17,612 17,612 Other Reimbursement 48410 -473,487 -461,440 -6,225 -11,475 11,475 Reimbursables 48370 -504,611 -483,437 -20,000 -20,000 -60,595 -72,400 52,400 Settlements 48500 -32 Other 48510 Passport fee 48515 -82,448 -32,680 -50,000 -50,000 -17,134 -49,248 -752 Evidence Recovery 48520 -31,011 -31,011 -30,000 -30,000 -30,000 Newsrack Impounds 48530 DDAs and OPAs 48540 Miscellaneous 48550 -529,767 -351,458 -27,122 -132,091 132,091 Other 48510 -643,226 -415,149 -80,000 -80,000 -44,256 -181,339 101,339 OTHER REVENUE 48100 -1,245,792 -989,630 -250,150 -250,160 -132,695 -328,250 78,100 NON-OPERATING REVENUE 49000 Operating Transfers In 49100 General 49101 -3,443,777 -1,511,006 -6,009,000 -6,062,401 -53,401 -2,937,429 -3,071,571 Air Quality Fund 49102 Donation Fund 49103 -2,465 -2,465 -803,401 -803,401 -803,401 Gas Tax Fund 49104 -900,000 -450,000 -900,000 -900,000 -450,000 -450,000 Pier Plaza Fund 49105 Private Project Self Suf 49106 Res Economic Uncertainty 49107 Operating Transfers In 49100 -4,346,242 -1,963,471 -7,712,401 -7,765,802 -53,401 -3,387,429 -4,324,972 Proceeds of Long Term Deb 49300 -116,167 Prior Period Adjustment 49350 27,001,033 827,753 827,753 -827,753 Joint Venture Income 49400 NON-OPERATING REVENUE 49000 22,538,623 -1,963,471 -7,712,401 .7,765,80211 774,352 -2,559,676 -5,206,126 REVENUES 40000 -105,673,743 -51,234,234 -142,634,018 -142,687,419 -18,675,517 -50,539,004 -92,148,415 FY 03-04 2nd Quarter Revenues 5/6/2004 Master Page 33 4:41 PM ATTACHMENT #2 AdP Tij it .� .•P ! Ve :rtai-gq. p ry ''14 ti4,9a bt• .a 4[f/•�<+p9d ifSt_.. _ ti,a__'>i�_ .2 .i'lti>� �j• f�� VL `�2."t"t. �f n; p�Y�f^ � e F����M�f% + '� ��. �� ��� • ��,f,°�i�`j• u alp.cxs pot s i'� .. ,:� ..a ,,.a. u .-.• „a �. .�,$�+.� J s1 . WN kW: g aqS �g v . M. w+sz�. nn� I;tfffiI�IIE$���Ntt�4,�5€�i�k�l`3� �iU'aS�,�'?l;.. i �''• �`.�`-: A9 / • I / / / I I I ATTACHMENT #3 City of Huntington Huntington Beach, California Recommendations to Management For the year ended September 30, 2003 C&L Caporicci&Larson Certified Public Accountants City of Huntington Beach Recommendations to Management For the year ended September 30, 2003 Table of Contents Page RecommendationLetter................................................................................................................................1 Recommendations to Management: MunicipalBilling System.........................................................................................................................2 C&L Caporicci&Larson Certi,f ied Public Accountants February 6, 2004 To the Honorable Mayor and Members of the City Council of the City of Huntington Beach Huntington Beach,California In planning and performing our audit of the basic financial statements of the City of Huntington Beach (City) for the year ended September 30, 2003, we considered the City's internal control to plan our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on internal control. However, during our audit,we noted certain matters involving internal control and other operational matters that are presented for your consideration. This letter does not affect our report dated February 6, 2004, on the basic financial statements of the City. We will review the status of these comments during our next audit engagement. Our comments and recommendations, all of which have been discussed with management, are intended to improve internal control or result in other operating efficiencies. We will be pleased to discuss these comments in further detail at your convenience, to perform any additional study of these matters, or to assist you in implementing the recommendations. We would like to express our appreciation to the City's staff for their cooperation, assistance, and support during this year's audit process. This report is intended solely for the information and use of the City Council, management and others within the City. Caporicci&Larson,CPAs Costa Mesa,California Toll Free Ph:(877)862-2200 Toll Free Fax:(866)436-0927 Oakland Orange County Sacramento San Diego 180 Grand Ave.,Suite 1365 3184-D Airway Avenue 777 Campus Commons Rd.,Suite 200 600"B"Street,Suite 1900 Oakland,California 94612 Costa Mesa,California 92626 Sacramento,California 95825 San Diego,California 92101 City of Huntington Beach Recommendations to Management For the year ended September 30, 2003 MUNICIPAL BILLING SYSTEM Observation On September 1, 2003, the City implemented a new municipal billing system. The following conditions were encountered: Customer billing: • Because of data conversion issues, customers received statements that did not reflect previous payments made outside the billing period. Significant City time and resources were required to remedy the problem. Reports: • System generated reports did not include or provide the following: ✓ Sufficient information to analyze account balances and assist in the reconciliation of the sub- ledger to the general ledger. ✓ Detail necessary to trace to supporting documentation. ✓ A detailed listing of account balances by customer as of a specific date. Integration with general ledger: • Incomplete batches were created that could not be posted to the general ledger. • Duplicate batches were created that could not be posted to the general ledger. • Summary information posted to the general ledger did not agree to the detailed information. • Adjustments to customer accounts were not reflected in the general ledger until the next billing cycle. • Date of batches posted to the general ledger changed when adjustments to the billing system were made. • Cash receipts were not applied against accounts receivable balances daily. Technical support: • Significant turnover in project management by the system provider. Recommendation We recommend that the City evaluate the costs and benefits of the new system. The following are some considerations: • Accuracy and timeliness of the information provided to customers. • Costs associated with the correction of the conditions mentioned above, and any continuing maintenance and system upgrades. • Reports that: ✓ Reconcile to the general ledger easily. ✓ Allow management to analyze revenue and determine collectibility of accounts. ✓ Provide sufficient detailed information to support account balances. ✓ Reflect updated information to the general ledger immediately. • Ability to integrate with the general ledger. • Ease of use by City employees. • Quality of services provided by the system provider. 2 ATTACHMENT #4 Observation Recommendation to Improve: Response Municipal Billing System: Timeliness of information provided to Concur-The statements are now sent on a Customer Billing— Due to data conversion issues, customers. timely manner, and data conversion items customers received statements that'did not reflect have been resolved. previous payments made outside the billing period. Significant City time and resources were required to remedy the problem. Municipal Billing System: Reports that: Concur-The City staff has created a detail Reports —System generated report did not include or . Reconcile to the general ledger report that shows listing of account provide the following: . Allow management to analyze balances by customer to assist in the • Sufficient information to analyze account balances revenue and determine reconciliation of sub-ledger to the general and assist in the reconciliation of the sub-ledger to collectibility of accounts. ledger. general ledger. • Provide detailed information to • Detail necessary to trace to supporting support account balances. documentation. • Reflect updated information • A detailed listing of account balances by customer timely. as of a specific date Municipal Billing System: • Cost associated with the Concur - The City staff is working with the Integration with general ledger correction of conditions system provider in resolving the integration • Incomplete batches were created which could not mentioned, and any continuing with the general ledger issues. be posted to the general ledger. maintenance and system • Duplicated batches were created which could not upgrades. be posted to the general ledger. • Ability to integrate with general • Summary information posted to the general ledger ledger. did not agree to the detailed information. • Ease of use by City employees. • Adjustments to customer accounts were not reflected in the general ledger until the next billing cycle. • Date of batches posted to the general ledger changed when adjustments to the billing system were made. • Cash receipts were not applied against general ledger accounts receivable balances daily. Municipal Billing System: Quality of services provided by Concur- A new project manager has Technical Support—Significant turnover in project system provider. recently been assigned to the City. management by system provider. RCA ROUTING SHEET INITIATING DEPARTMENT: ADMINISTRATIVE SERVICES SUBJECT: RECEIVE AND FILE: FISCAL YEAR 2003/2004 SECOND QUARTER REPORT, FISCAL YEAR 2002/2003 COMPREHENSIVE ANNUAL FINANCIAL REPORT, AND MANAGEMENT LETTER TO FISCAL YEAR 2002/2003 COMPREHENSIVE ANNUAL FINANCIAL REPORT COUNCIL MEETING DATE: May 17, 2004 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) Signed in full by the City Attorney Not Applicable Subleases, Third Party Agreements, etc. Approved as to form by City Attorney Not Applicable Certificates of Insurance (Approved by the City Attorney) Not Applicable Financial Impact Statement (Unbudget, over $5,000) Not Applicable Bonds (If applicable) Not Applicable Staff Report (If applicable) Not Applicable Commission, Board or Committee Report (If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED -F0 A ED. Administrative Staff Assistant City Administrator Initial City Administrator (Initial) ( ( l City Clerk EXPLANATION. FOR RETURN OFITEM: (BelowUse Only) RCA Author: William McReynolds/John Roulette x ��� a �'� ' <' � '� =fir � �•�`t � .�� �. :: _ ,sk. � :z, - --. .�, �• .A � � s. r � _z" ,.�,-viz �,. < t a ,::s �_ ,e� _ �Z'=ski• _ �°" 1 5 a d a. m i ac E s$%:'>7 �'� ;ry,, ,;,at:. �' .r"'�'0""""� �'F.bssP'� �'�;', ;us �.' "` 'et• ",c ,.a ra}•aa:aE*�. ,7,•C•; �'. .�. k�«r't E,.rv�E s az, r r '»a; �r •^W� 's,F a yx`'; ,K• xw� �} ..�,a:�'� „.^ a» „4;,.$, akn t,6 Y!• �, an>'.a rr,?,., <y'!?r' SA P$. ,�.., .}� erg"" yp t^R ��F , �_ %$s's» ;d. .,•� r, �, �° s" x.,, ••%7-� ro xz." ��M�w ti �' +,�,r. �s:f•., 's" ,t"} r .,t,t. ;eE .... M ,'s •e,..t. 'ti.f,,»„€t ,,,.. . � •'' , .F '�{i°. �', ft,.:s,!w s. ,C. Y x�.. >�.r.9.:a ^'4 3,R3 '+;s•, , an.$� �y i� r .,,."3„w, r: e ,��. 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Statement of Net Assets—Proprietary Funds 22 Statement of Revenues, Expenses and Changes in Fund Net Assets— 23 Proprietary Funds Statement of Cash Flows— Proprietary Funds 24 Statement of Fiduciary Fund Net Assets 25 Statement of Changes in Fiduciary Fund Net Assets-Trust Funds 25 e Notes to Financial Statements 26-70 Required Supplementary Information: Budgetary Information 71 Schedule of Revenues, Expenditures and and Changes in Fund Balances— 72 Bud et and Actual—General Fund Schedule of Revenues, Expenditures and and Changes in Fund Balances— 73 • Budget and Actual—Grants Fund Schedule of Funding Progress Normal and Supplemental Retirement Plans 74 • i • Supplementary Information: Combining and Individual Fund Statements and Schedules: • CombiningBalance Sheet—Nonma'or Governmental Funds 75-78 Combining Statement of Revenues, Expenditures, and Changes in Fund 79-81 Balances— Nonma'or Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances— 82-88 Budget and Actual—Non Major Governmental Funds Schedule of Revenues, Expenditures, and Changes in Fund Balances— 89-90 Budget and Actual—Major Debt Service and Capital Projects Funds Combining Statement of Net Assets—Nonma'or Enterprise Funds 91 Combining Statement of Revenues, Expenses, and Changes in Net Assets- 92 Nonma'or Enterprise Funds Combining Statement of Cash Flows— Nonma'or Enterprise Funds 93 Combining Statement of Revenues, Expenses, and Changes in Net Assets- 94 Nonmajor Internal Service Funds Combining Statement of Cash Flows—Nonma'or Internal Service Funds 94 Combining Statement Of Fiduciary Fund Net Assets 95 Capital Assets Used in the Operation of Governmental Funds: Schedule by Source 96 Schedule by Function and Activity 96 Schedule of Changes by Function and Activity 96 Statistical Section (Unaudited) General Governmental Expenditures by Function and Activity—Last Ten Fiscal Years 97-98 General Governmental Revenues by Function and Activity— Last Ten Fiscal Years 97-98 Property Tax Levies and Collections—Last Ten Fiscal Years 97-98 Assessed and Actual Valuations of Property— Last Ten Fiscal Years 99 Property Tax Rates—All Direct and Overlapping Governments 99 General Obligation Bonded Debt Ratios—All Overlapping Governments 99 Construction Activity and Bank and Savings and Loan Activity—Last Ten Fiscal Years 100 Computation of Legal Debt Margin 100 Statement of Direct and Overlapping Bonded Debt 100 Demographic Statistics 101 Top Ten Secured Property Owners 101 Miscellaneous Statistics 101 ii • CITY OF HUNTINGTON BEACH • � 2000 MAIN STREET CALIFORNIA 92648 ADMINISTRATIVE SERVICES March 31, 2004 • To the Honorable Mayor and City Council City of Huntington Beach Huntington Beach, California • We are pleased to submit to you the Comprehensive Annual Financial Report for the City of Huntington Beach, California for the year ending September 30, 2003 as required by Section 616 of the City Charter. The intent of this report is to provide the residents, the City Council and staff of Huntington Beach with a firm understanding of the'City's financial position. This report is published in accordance with state law requirements that financial statements are presented in conformity with generally accepted accounting principles and audited in accordance with generally accepted auditing standards by • a firm of licensed certified public accountants. Responsibility for both the accuracy of the information and the completeness and fairness of the presentation including all disclosures rests with the City's Administrative Services Department. Consequently, Administrative Services assumes full responsibility for the completeness and reliability of all information presented in this report. • We believe the information and data, as presented, are accurate in all material aspects and presented in a manner designed to fairly set forth the financial position, and changes in financial position, of the City as measured by the financial activity of its governmental activities, business-type activities, each major fund, and the aggregate remaining fund information, and all disclosures necessary to enable the residents, the City Council and staff to gain the maximum understanding of the City's financial affairs. • ABOUT THE CITY OF HUNTINGTON BEACH The City of Huntington Beach is located along the Southern California coast in Orange County, 35 miles south of Los Angeles and 90 miles north of San Diego. With a population of approximately 200,000 residents, and projected to grow to 204,000 by 2005, it is known as Surf City due to its abundance of beaches; sunny, warm mediterranean climate; and casual lifestyle. Huntington Beach covers 28 • square miles of land, 26 square miles of water, and is the one of the 20 largest cities in California. With 8.5 miles of uninterrupted beach along the Pacific Ocean,the city also plays host to an annual visitor population of over 11 million people, especially during the summer, special events and weekends. Listed among the nation's safest cities for decades, Huntington Beach has often been ranked among the Top Ten Safest Cities by City Crime Rankings. Founded in the late 1880s, Huntington Beach was incorporated as a Charter City in 1909. Huntington Beach has a City Council/City Administrator form of government. The City Council has seven members, each of whom are elected to four-year terms. City Council Members are limited to two consecutive terms. There are three elected department heads, the City Attorney, City Clerk and City Treasurer. The position of Mayor is filled on a rotating basis. The City of Huntington Beach is a full service city. Its major departments include the City Administrator's Office,Administrative Services, Building and Safety, Community Services, Economic Development, Fire, Information Services, Library Services, Planning, Police and Public Works. This report includes 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 • Various community facilities districts • Reservoir Hill Assessment District • Huntington Beach Auto Business Improvement District Component unit reports (stand-alone reports)are available for the Redevelopment Agency and Public Financing Authority. Local Economy The City of Huntington Beach is one of the leading commercial and industrial centers in Southern California. The City works diligently to maintain its business friendly atmosphere, working closely with the Huntington Beach Chamber of Commerce and the Huntington Beach Conference and Visitors Bureau. The City seeks to attract new businesses and support existing business through retention and expansion efforts. The City also supports business through an inter- departmental team formed to review projects at their earliest stages to guide development through the approval process. As the third largest city in Orange County, more than 60,000 people are currently employed by over 12,800 businesses in the City. Huntington Beach residents represent nearly 10% of the entire Orange County working population. Huntington • Beach businesses include aerospace and high technology; petroleum and petroleum support; manufacturing; computer hardware and software; financial and iv • business services; automobile services; machine shop services, precision instruments, retailers and surf apparel, just to name a few. • Fiscal Year 2002/2003 Economy The 1 s and 22— Quarter Budget Reports presented to the City Council identified significant concerns with both revenue and expenditure in the fiscal year 2002/2003 General Fund Budget. Revenue impacts were most significant in Sales Tax and • Utility Users Tax(UUT). Significant expenditure impacts include increased costs for liability and safety retirement. As a result,the City Council agreed to review budget reductions in the fiscal year 2002/2003 General Fund Budget. The City reopened the adopted budget and reduced personnel, operating expenses and capital purchases in an amount representing $11.1 million on an ongoing basis in the General Fund. This reduction was essential to recognize and account for shortfalls in revenue since the adoption of the fiscal year 2002/2003 Budget. Necessary reductions considered all of the strategic goals, making cuts in areas that would have the least possible impact on core services. MAJOR INITIATIVES Through its Strategic Plan, the Huntington Beach City Council seeks to assure a high quality of life endures and improves as the City ages. The Strategic Plan was first created in July 2001 as a way to help the City Council assess the effects of today's decisions on the City's future quality of life. As a blueprint for the City's future, the Strategic Plan defines the City Council's goals and objectives. The following are the City Council's strategic goals set forth in the City's development of the annual budget: • Public Safety - Maintain a healthy and safe community • Fiscal Integrity- Establish a sound financial foundation forthe City's finances • Infrastructure and Transportation - Assure the long-term adequacy of the City's infrastructure, facilities, and transportation network. • Economic Development-Achieve development that maintains and improves the city's fiscal viability and reflects economic demands while maintaining and improving quality of life for current and future residents • Organizational Development and Technology - Maintain and continually improve organizational effectiveness. • Community Livability and Sustainability—Build and maintain a sense of place and an exceptional quality of life within a sustainable urban environment. • Enrichment, Communication and Involvement - Ensure that Huntington Beach's local government is open, accessible, responsive, nurturing, and respectful to all the citizens it serves. • Environment and Natural Resources — Enhance the community's environmental quality and its unique natural resources. • v • FINANCIAL INFORMATION To provide reasonable basis for making these presentations, Administrative Services and the management of the City of Huntington Beach have established a r comprehensive internal control system deigned to compile sufficient reliable information for the preparation of the City's financial statements and protect the City's assets from loss, theft, or misuse. Because cost is an important part of any internal control system, the cost of the internal control system does not exceed the expected benefit. Therefore, the internal controls have been designed to provide • reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As Administrative Services Department and the management of the City of Huntington Beach, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. Caporicci and Larson, CPAs, a firm of licensed independent certified public accountants, has audited the City of Huntington Beach's financial statements. The goal of the audit was to provide the residents, City Council and staff with reasonable assurance that the financial statements of the City of Huntington Beach for fiscal year ended September 30, 2003, are free of material misstatement and comply with generally accepted accounting principles as determined by the Government Accounting Standards Board. The audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; evaluating the overall financial statement presentation. The independent auditor concluded that there was a reasonable basis for rendering an unqualified opinion that the City of Huntington Beach's financial statements for the fiscal year ended September 30, 2003, are fairly presented in conformity with generally accepted accounting principles. • Single Audit By federal mandate the City is required to undergo an annual "single audit" in conformity with the provisions of the Single Audit Act of 1984 and the United States Office of Management and Budget's Circular A-133, Audits of States, Local • Governments, and Non-Profit Organizations. Information related to this single audit, including a schedule of federal financial assistance, the independent auditors' reports on the internal controls and compliance with applicable laws and regulations, and a schedule of findings and questioned cost, is available in the Administrative Services Department separately issued Single Audit Report. Budgetary Controls The City operates on a fiscal year basis, beginning October 1st and ending September 30th. The budget is prepared under the supervision of the City Administrator and transmitted to the City Council for deliberation sixty days prior to the end of the fiscal year. The City Council adopts the annual budget by September vi • • 30th of the prior fiscal year and may amend it or revise it at any time at a properly • noticed meeting. The City utilizes an encumbrance system as a management control technique over all fund types. Encumbrances are orders, or contracts, for goods or services not completed or received and are unavailable for general expenditures. Appropriations that are not encumbered lapse at the end of the fiscal year. Year-end • encumbrances are forwarded and become part of the following year's budget. 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. Retirement Systems The City participates in the California Public Employees' Retirement System • (CaIPERS). CalPERS was established by state law in 1932 to provide retirement benefits for state employees. In 1939, public agency employees were allowed to participate. The City of Huntington Beach joined the CalPERS system in 1945. The CalPERS system manages pension and health benefits for more than 1.4 million California public employees, retirees, and their families. As of June 30, 2003, CalPERS provided benefits for 1,014,360 active and inactive members and 402,740 • retirees. CalPERS membership is divided approximately in thirds among current and retired employees of the state, schools, and participating public agencies. CalPERS is a defined benefit retirement plan. It provides benefits based on a member's years of service, age, and highest compensation. In addition, benefits are • provided for disability and death, with payments in some cases going to survivors or beneficiaries of eligible members. The City also maintains a supplemental retirement plan for each employee hired before 1998 (date varies according to bargaining group) who retires from the City under CalPERS with an optional form of benefit payment (as opposed to the Unmodified Allowance provided by CaIPERS). The City's Retirement Supplement Plan will provide a monthly benefit. This benefit commences at the same time the CalPERS benefit commences and will be payable for the employee's lifetime. The amount of the monthly benefit is calculated as the difference between the • employee's Unmodified Monthly Allowance and the actual monthly retirement benefit the individual actually receives. Information on these pension plans can be found in notes 6 and 7 to the financial statements. • vii 0 Cash Management Polices and Practices The elected City Treasurer invests surplus cash in authorized investments allowed by the government code and City policy. The City adopts an annual Investment Policy intended to provide guidelines for the prudent investment of the city's cash balances, and outlines the policies to assist in maximizing the efficiency of the city's cash management system while meeting the daily cash flow demands of the city. Both the Investment Advisory Board and the City Council approved the City's • Investment Policy. The investment practices and policies of the City of Huntington Beach are based upon state law and prudent money management. The primary goals of these practices are: • To assure compliance with all Federal, State, and local laws governing the investment of public funds under the control of the City Treasurer. • To protect the principal moneys entrusted to the City Treasurer. • Achieve a reasonable rate of return within the parameters of prudent risk • management while minimizing the potential for capital losses arising from market changes or issuer default. The City forecasts revenues and expenditures to meet current obligations and to earn a market rate of return on its investments. The City Treasurer earned a return • of 3.17%for the year. 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 and Workers' Compensation • The City is self-insured for liability, workers compensation and employee health claims. The Risk Management Division of Administrative Services is responsible for 0 managing the City's insured and self-insured programs by administering the City's property, liability and workers compensation programs. Risk Management procures property insurance coverage processes liability claims and administers the City's workers compensation program. Risk Management is actively involved in controlling, transferring, or eliminating risk exposure to the City. The City is a • founding member of the Big Independent Cities Excess Pool (BICEP), which is a pooled liability insurance program for medium to large cities.Through a combination of self-funding and the purchase of commercial insurance, B10EP provides coverage for liability claims and suits in excess of$1 million. The Workers' Compensation Section is responsible for administrating the City's • Workers' Compensation Program. The program delivers all state mandated medical viii • • and disability benefits to injured workers. The City also purchases excess workers' compensation insurance by a joint purchase through BICEP. • The Medical Plan Section is responsible for managing the City's self-insured medical programs by administrating a Point-of-Service (POS) Plan for City employees and their families. The City also purchases stop loss insurance coverage for additional protection against adverse losses. • FINANCIAL REPORTING CERTIFICATE: The Governmental Finance Officers Association (GFOA) of the United States and Canada awarded the Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report ended • September 30, 2002. This was the seventeenth consecutive year the City has received this prestigious award. To qualify for the Certificate of Achievement, the government entity must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, the contents of which conform to program standards. Such report must satisfy both generally accepted accounting principles • as well as all legal requirements. The Certificate of Achievement is valid for one year only. The City believes that this Comprehensive Annual Financial Report continues to conform to the Certificate of Achievement Program requirements and will be submitted to GFOA to determine its eligibility for another certificate. • ACKNOWLEDGEMENTS: We wish to thank the City Council and the City Departments for responsibility conducting the fiscal affairs of the City of Huntington Beach. We would also like to thank Robert Sedlak, Principal Accountant, who prepared this report and AJ Arts for the photographic collage on the cover. • Clay Marffin, Director of Administrative Services aniel T. Villella, w Finance Officer • ix • • CITY OF HUNTINGTON BEACH • PRINCIPAL CITY OFFICIALS CITY COUNCIL Cathy Green, Mayor • Jill Hardy, Mayor Pro-Tem Connie Boardman, Councilmember Gil Coerper, Councilmember Debbie Cook, Councilmember Pam Houchen, Councilmember • Dave Sullivan, Councilmember OTHER ELECTED OFFICIALS Connie Brockway, City Clerk • Jennifer McGrath, City Attorney Shari Freidenrich, City Treasurer ADMINISTRATIVE OFFICIALS Ray Silver, City Administrator • William P. Workman, Assistant City Administrator Robert F. Beardsley, Director of Public Works David Biggs, Director of Economic Development Ross Cranmer, Director of.Building and Safety Jim Engle, Director of Community Services 0 Ron Hayden, Director of Library Services Janis Ingles, Director of Information Services Clay Martin, Director of Administrative Services Duane Olson, Fire Chief Kenneth Small, Police Chief • Howard Zelefsky, Director of Planning A • x • CITY OF HUNTINGTON BEACH THE PEOPLE CITY COUNCIL Mayor Cathy Green CITY ATTORNEY CITY CLERK CITY TREASURER Mayor Pro Tem Jill Hardy Jennifer McGrath Connie Brockway Shari Freidenfich Council Members Boardman, Coerper,Cook, Houchen, Sullivan Litigation 1n�"e"� Records Division CITY ADMINISTRATOR Transactions Business License INFORMATION ADMINISTRATIVE Organizational Communily Ray Silver J Sections SERVICES SERVICES Effectiveness Relations Janis Ingeis Clay Martin Pate Grant Laurie Payne ASSISTANT CITY Accounts Recelveble Systems Finance Public ADMINISTRATOR Passport Service Municipal Services Information Billings Communications Risk Management HBTV 3 William Workman Central Cashiering Operations Central Services Human Resources Real Property PLANNING BUILDING& ECO OMIC PUBLIC wbRKS COMMUNITY SERVICES LIBRARY§ERVICES FIRE POLICE Howard Zeists SAFETY DEVELOPMENT Robert F.Beardsley Jim Engle Ron Hayden Duane Olson Kenneth Small Ross.Crenmer Devld Biggs Planning Men Director Recreation,Youth Fire Prevention g >� P Mlt 6 Plan �P ti Cultural Services Reference!Reception Uniform DNhlon Housing 3 Check Services RedevebpmeM Operations Current Planning EngineeringFacilities,Develo ent Adminhtions Inspection Services � 3 Concessions Chlldrens 1 Media I Operations Business Brenches Emergency Se,W� Division Advanced Pisnning Developmerd Udltiles Beach Servi Informatlon Systems I FlreMed Investigation Division MaiMenanoe Circulation Neighborhood Preservation Transportation X. • 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, 2002 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. Og71( 1 ofF CMPAMW Sn President >�SM Asti a,eac Executive Director xii • • eLnanclsal clection • C&L Caporicci&Larson Certified Public Accountants • INDEPENDENT AUDITORS'REPORT To the Honorable Mayor and Members of City Council of the City of Huntington Beach • Huntington Beach,California We have audited the accompanying financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of • Huntington Beach,California (City), as of and for the year ended September 30,2003,which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in the United States • 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial • statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the basic financial statements referred to above present fairly,in all material respects,the respective financial position of the governmental activities,the business-type activities,each major fund, and the aggregate remaining fund information of the City as of September 30, 2003, and the respective • changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with generally accepted accounting principles in the United States. As described in Note 1 to the basic financial statements, the City adopted Statements of the Governmental Accounting Standards Board No.40, Deposit and Investment Risk Disclosures. • The accompanying Required Supplementary Information, such as management's discussion and analysis, budgetary comparison information and other information as listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquires of management regarding the methods of measurement and • presentation of the Required Supplementary Information. However, we did not audit the information and express no opinion on it. • Toll Free Ph:(877)862-2200 Toll Free Fax:(866)436-0927 Oakland Orange County Sacramento San Diego 180 Grand Are.,Suite 1365 3184-DAirwayAvenue 777 Campus Commons Rd.,Suite 200 600"B"Street,Suite 1900 Oakland.Califomia 94612 Costa Mesa,California 92626 Sacramento,California 95825 San Diego.California 92101 • e • To the Honorable Mayor and Members of City Council of the City of Huntington Beach Huntington Beach,California • Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying supplementary information is presented for purpose of additional analysis and is not a required part of the basic financial statements. The supplementary information has been subjected to the auditing procedures • applied in the audit of the basic financial statements and,in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The Introductory Section and Statistical Tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and,accordingly,we express no opinion on them. • E� ;eoew Costa Mesa,California February 6,2004 • • • • • • 2 • City of Huntington Beach • Management's Discussion and Analysis For the Year Ended September 30, 2003 • As management of the City of Huntington Beach, we offer readers of the City's financial • statements this narrative overview and analysis of the financial activities of the City of Huntington Beach for the fiscal year ended September 30, 2003. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages iii-ix of this report. • Financial Highlights Below is a summary of the City's government-wide financial information (in thousands): Total Governmental and Business Activities Amount Percent September 30, September 30, Increase Increase 2003 2002 Decrease Decrease Assets $ 845,077 $ 820,466 $ 24,611 3.0% Liabilities 215,178 202,265 12,913 6.4% • Total Net Assets 629,899 618,201 11,698 1.9% Unrestricted Net Assets 12,747 23,329 (10,582) -45.4% Long-Term Obligations 188,900 175,220 13,680 7.8% Program Revenues 89,918 119,820 (29,902) -25.0% Taxes 100,291 93,190 7,101 7.6% Other General Revenues 31,826 36,858 (5,032) -13.7% • Expenses 207,185 211,902 (4,717) -2.2% • The total assets of the City of Huntington Beach exceeded its liabilities at the close of the most recent fiscal year by $629,899,000. Of this amount, $12,747,000 may be used to meet the City's ongoing obligations to citizens and creditors. Net assets increased • $11,698,000 (1.9%), while unrestricted net assets decreased $5,908,000 (25.3%). • Long-term obligations increased by $13,680,000 (7.8%). • Program revenues decreased $29,902,000 (25.0%) largely because in the prior year all of the infrastructure of the the Sewer Enterprise Fund was recorded as program revenue. Taxes increased $7,101,000 (7.6%), other general revenues decreased $5,032,000 • (13.7%). Expenses decreased $83,000 (.001%) • 3 • City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2003 • Overview Of The Financial Statements: This discussion and analysis serve as an introduction to the City of Huntington Beach basic financial statements. The City of Huntington Beach's basic financial statements comprise three components: 1)government-wide financial statements, 2)fund financial statements, and 3)notes • to the financial statements. This report also contains certain other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements: The government-wide financial statements are designed to provide readers with a broad overview of the City's financial condition and are • prepared similarly to those in the private sector. The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, continued increases or decreases in net assets may indicate whether the City's financial condition is improving or • deteriorating. The statement of activities presents information on how the City's net assets changed during the most recent fiscal year. These changes are reported on the accrual basis (when the economic event occurs), not when the cash is received or paid. • The government-wide financial statements separate functions that are primarily supported by taxes and intergovernmental revenues (governmental activities) from functions that are supported by user fees(business activities). Governmental activities include public safety, public works, general government, and community-related activities. Business activities include the Water, Sewer, Refuse, FireMed, Hazmat Service, and Ocean View Estates. • The government-wide financial statements include the City and all of its component units that are legally separate but whose activities entirely support the City of Huntington Beach. These entities are, the Redevelopment Agency of the City of Huntington Beach, the Huntington Beach Public Financing Authority, the Huntington Beach Civic Improvement Corporation, and various • assessment districts described in Note 2 to the financial statements. The government-wide financial statements can be found on pages 16-17 of this report. Fund Financial Statements. The City separates financial activities into funds to maintain • control over resources that have been legally separated. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for the same functions reported in governmental activities in the government-wide financial statements. However, the focus in the governmental fund section of these financial statements is on near-term inflows and • outflows of spendable resources as well as on balance of spendable resources available at the end of the fiscal year. 4 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2003 • It is useful to compare information presented for the governmental funds to information presented for governmental activities in the government-wide financial statements. A reconciliation shows the reader the differences in financial reporting between the governmental activities section and the governmental funds section. • The City maintains twenty-seven individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenue, expenditures, and changes in fund balances for the General Fund, Redevelopment Agency, Huntington Beach Public Financing Authority, and Capital Improvement Fund, all of • which are considered to be major funds. Data from the other twenty-one funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in a combining statement elsewhere in this report. The City provides an annual appropriated budget for its governmental funds. Budgetary • comparison schedules on pages 72-73, and 82-90 demonstrate compliance. The basic governmental fund financial statements can be found on pages 18-21 of this report. Proprietary Funds. The City maintains two types of proprietary funds (enterprise and internal service). Enterprise funds are used to account for the same activities as the business-type • activities in the government-wide financial statements. The City uses enterprise funds to account for its Water, Sewer, Refuse, FireMed, Hazmat Service, and Ocean View Estates activities. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statement provides information for • Water operations, which is considered to be major funds of the City. The remaining proprietary funds noted above are combined into a single, aggregated presentation. The basic proprietary fund financial statements can be found on pages 22-24 of this report. • • • 5 • • City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2003 • Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City of Huntington Beach's own programs. The accounting used for fiduciary funds is much like that • used for proprietary funds The basic fiduciary fund financial statements can be found on page 25 of this report. Notes to the financial statements. The notes provide additional information that is essential to • a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 26-70 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's progress in • funding its obligation to provide pension benefits to its employees and General Fund budget to actual comparisons. Required supplementary information can be found on pages 71-74 of this report. The combining statements referred to earlier in connection with non-major government funds and internal service funds are presented immediately following the required supplementary • information on pensions. Combining and individual fund statements and schedules can be found on page 75-96 of this report. • • • • � 6 City of Huntington Beach • Management's Discussion and Analysis For the Year Ended September 30, 2003 Government-Wide Financial Analysis • As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. Below is a summary schedule of the City's net assets at September 30, 2003 (in thousands): Amount Percent • September 30, September 30, Increase Increase Governmental Activities 2003 2002 Decrease Decrease Current and Other Assets $ 111,518 $ 113,185 $ (1,667) -1.5% Capital Assets 581,205 565,017 16,188 2.9% Total Assets 692,723 678,202 14,521 1.4% Current Liabilities 27,796 19,927 $ 7,869 39.5% • Long-Term Liabilities 188,900 174,134 14,766 8.5% Total Liabilities 216,696 194,061 22,635 48% Net Assets: Invested in Capital Assets, Net of Related Debt 446,061 425,697 $ 20,364 4.8% Restricted 51,261 58,351 (7,090) -12.2% Unrestricted (12,924) 93 (13,017) na Total Net Assets $ 484,398 $ 484,141 7,347 1.5% Amount Percent September 30, September 30, Increase Increase • Business Activities 2003 2002 Decrease Decrease Current and Other Assets $ 89,514 $ 61,888 $ 27,626 44.6% Capital Assets 89,134 80,376 8,758 10.9% Total Assets 178,648 142,264 36,384 55.5% Current Liabilities 6,303 7,118 $ (815) -11.4% • Long-Term Obligations 550 1,086 (536) na Total Liabilities 6,853 8,204 (1,361) -16.5% Net Assets: Invested in Capital Assets, Net of Related Debt 88,884 79,781 9,103 11.4% Restricted 30,946 31,043 (97) -0.3% Unrestricted 25,671 23,236 2,435 10.5% • Total Net Assets $ 145,501 $ 134,060 $ 11,538 8.6% The largest portion of the City's net assets reflects investment in capital assets (e.g., land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding. The City uses capital assets to provide services to citizens; • consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt,the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net assets is subject to external (legal imposed or statutory) restrictions ($51,261,000 for governmental activities, and $30,946,000 for business • activities). These amounts represent 10.6% and 21.2% of net assets for governmental activities and business activities respectively. 7 • • City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2003 The unrestricted assets for governmental activities was a negative $12,924,000. This primarily results from the Jarvis lawsuit expenditure recognized during the year. A condensed summary of governmental activities (in thousands) follows: Governmental Activities Year Ended Year Ended Amount Percent September 30, September 30, Increase Increase Revenues: 2003 2002 Decrease Decrease Program Revenues: Charges for Current Services $ 22,958 $ 23,556 $ (598) -2.5% Operating Grants and Contributions 1,736 5,063 (3,327) -65.7% Capital Grants and Contributions 6,955 13,039 (6,084) -46.7% Total Program Revenues 31,649 41,658 (10,009) -24.0% General Revenues: Property Taxes 40,633 38,106 2,527 6.6% • Sales Taxes 28,011 23,449 4,562 19.5% Utility Taxes 18,310 18,014 296 1.6% Other Taxes 13,337 13,621 (284) -2.1% Use of Money and Property 9,923 13,895 (3,972) -28.6% From Other Agencies 16,412 20,359 (3,947) -19.4% Other: 5,491 2,604 2,887 110.9% • Total General Revenues $ 132,117 $ 130,048 $ 2,069 1.6% Total Revenues $ 163,766 $ 171,706 $ (7,940) -4.6% Expenses: City Council 267 262 5 1.9% City Administrator 1,587 2,214 (627) -28.3% City Treasurer 1,341 1,160 181 15.6% City Attorney 2,899 3,634 (735) -20.2% City Clerk 559 698 (139) -19.9% Administrative Services 8,357 7,230 1,127 15.6% Planning 3,633 2,658 975 36.7% Building 3,045 3,101 (56) -1.8% Fire 19,490 19,361 129 0.7% Information Systems 4,401 4,464 (63) -1.4% Police 41,104 42,187 (1,083) -2.6% Economic Development 3,830 3,080 750 24.4% Community Services 9,989 12,440 (2,451) -19.7% Library Services 6,721 4,801 1,920 40.0% • Public Works 25,386 28,237 (2,851) -10.1% Non-Departmental 25,604 24,359 1,245 5.1% Interest on Long-Term Debt 6,199 9,438 (3,239) -34.3% Total Expenses 164,412 169,324 (4,912) -2.9% Increase in Net Assets Before Transfers (646) 2,382 • Transfers 5,537 (244) Net Assets -Beginning of Year(Restated) 479,507 477,369 Net Assets-End of Year $ 484,398 $ 479,507 • 8 City of Huntington Beach • Management's Discussion and Analysis For the Year Ended September 30, 2003 • The cost of all governmental activities this year was $164,412,000. However, as shown in the Statement of Activities, the amount that the taxpayers ultimately financed for these activities was only$132,763,000, because some of the cost was paid by those who directly benefited from the programs ($22,958,000), or by other governments and organizations that subsidized certain programs with operating grants and contributions ($1,736,000), and capital grants and • contributions ($6,955,000). Overall, the City's governmental program revenues were $31,649,000. The City paid for the remaining "public benefit" portion of governmental activities with $100,291,000 in taxes and general revenue (some of which could only be used for certain programs) and with other revenues, such as interest and general entitlements. Total resources available during the year to finance governmental operations were • $621,658,000, consisting of net assets at October 1, 2002 of$484,141,000, program revenues of $31,649,000, general revenues of$100,291,000, and transfers of$5,537,000.Total expenses for governmental activities during the year were $164,412,000; thus, net assets were increased by $4,891,000, to $489,072,000. A condensed summary of business activities (in thousands) follows: Business Activities Amount Percent September 30, September 30, Increase Increase 2003 2002 Decrease Decrease Program Revenues: Charges for Current Services $ 47,169 $ 45,106 $ 2,063 4.6% Capital Grants and Contributions 11,100 33,056 (21,956) -66.4% Total Program Revenues 58,269 78,162 (19,893) -25.5% Use of Money and Property 1,482 1,923 (441) -22.9% Total Revenues 59,751 80,085 (20,334) -25.4% Expenses: Water Utility 24,943 27,250 (2,307) -8.5% Emerald Cove Housing 401 405 (4) -1.0% Emergency Fire Medical 3,765 3,172 593 18.7% Refuse Collection 9,681 9,178 503 5.5% Sewer Service 3,775 2,419 1,356 56.1% Hazmat Service 150 143 7 4.9% Ocean View Estates 58 11 47 427.3% Total Expenses 42,773 42,578 196 0.5% Increase in Net Assets Before Transfers 16,978 37,507 Transfers (5,537) 244 Net Assets -Beginning of Year $ 134,060 96,309 Net Assets -End of Year $ 145,501 $ 134,060 The City's net assets from business activities increased by$16,978,000 The largest reasons for • this increase were developer contributions of infrastructure of $4,631,000 and capital contributions for the Water Master Plan of$6,469,000. 9 • City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2003 • The cost of all Proprietary(Business Type) activities this year was$42,773,000. As shown in the Statement of Activities and Changes in Net Assets,the amount paid by users of the systems was $47,169,000, capital grants and contributions were$11,100,000, other revenue was$1,482,000, and transfers were $5,537,000. Beginning net assets were 134,060,000 and ending net assets were $145,501,000. Of the ending net asset amount, $88,884,000, or 61%, was invested in • capital assets, $30,946,000, or 21% was restricted for expenditures for the Water Master Plan, and $25,671,000, or 18% was unrestricted. The City's programs for governmental activities include General Government, Fire, Police, Public Works, Redevelopment, Community Services and Library. Business type activities include the • Water, Sewer, Refuse, FireMed, Hazmat Service, and Ocean View Estates. A listing of each program's revenues and expenses (in thousands) for the current year is presented below. 2002-2003 2001-2002 Funded by • Funded by Taxes and Taxes and Other Less Program Other Generall General Governmental Activities: Expenses Revenues Revenues Revenues City Council $ 267 $ - $ 267 $ 262 City Administrator 1,587 - 1,587 2,181 City Treasurer 1,341 - 1,341 1,160 City Attorney 2,899 - 2,899 3,634 City Clerk 559 (82) 477 652 Administrative Services 8,357 - 8,357 7,230 Planning 3,633 (752) 2,881 2,078 Building 3,045 (3,067) (22) (839) Fire 19,490 (1,157) 18,333 18,756 Information Systems 4,401 (79) 4,322 4,464 Police 41,104 (5,083) 36,021 36,763 Economic Development 3,830 (1,514) 2,316 1,303 Community Services 9,989 (10,311) (322) 3,785 Library Services 6,721 (801) 5,920 4,535 Public Works 25,386 (8,798) 16,588 12,316 Non-Departmental 25,604 (5) 25,599 15,314 Interest on Long-Term Debt 6,199 - 6,199 9,438 Total Governmental Activities $ 164,412 $ (31,649) $ 132,763 $ 123,032 Business Activities Water Utility 24,943 (37,943) (13,000) 1,202 Emerald Cove Housing 401 (746) (345) (302) Emergency Fire Medical 3,765 (4,103) (338) (931) Refuse Collection 9,681 (9,123) 558 (4) Sewer Service 3,775 (5,876) (2,101) (2,121) Hazmat Service 150 (233) (83) (2) Ocean View Estates 58 (245) (187) 128 Total Business Activities $ 42,773 $ (58,269) $ (15,496) $ (2,030) 10 City of Huntington Beach • Management's Discussion and Analysis For the Year Ended September 30, 2003 • Financial Analysis Of The City's Governmental Funds Below is an analysis of the City's governmental fund activities for the year (in thousands): GOVERNMENTAL FUNDS • Amount Percent September 30, September 30, Increase Increase 2003 2002 Decrease Decrease Total Fund Equity: General Fund $ 14,974 $ 41,745 $ (26,771) -64.1% • Redevelopment Agency 25,565 (13,030) 38,595 na Public Financing Authority 16,085 24,295 (8,210) -33.8% Grants 1,294 2,913 (1,619) -55.6% Property Tax Refund 2,380 - 2,380 na Other Governmental Funds 20,090 19,902 188 0.9% Total Fund Equity $ 80,388 $ 75,825 $ 4,563 6.0% Unreserved Fund Equity: General Fund $ 12,217 15,972 $ (3,755) -23.5% Redevelopment Agency 9,363 - 9,363 na Public Financing Authority - - - na Grants Fund - - - na Property Tax Refund 2,380 - 2,380 na Other Governmental Funds 18,201 15,635 2,566 16.4% Total Unreserved Fund Equity $ 42,161 $ 31,607 $ 10,554 -7.1% • As of the close of the current fiscal year, the City's governmental fund balances reported combined ending balance of$80,388,000, an increase of$4,563,000 in comparison to the prior year. • The total fund balance at year-end for the City's General fund was$14,974,000, which is an overall decrease of $26,771,000 over last year. It was primarily due to a change in accounting for interfund advances (see note 12d on page 68). The unreserved fund balance was $12,217,000, or 9.8% of General Fund expenditures. • The fund balance of the Redevelopment Agency increased by $38,595,000 also largely due to the change in accounting for interfund advances (see page 68). • The total fund balance of the Public Financing Authority decreased by $8,210,000 as a result of bond proceeds being spent on capital projects. • The total fund balance of the Grants Fund decreased by $1,619,000. • The total fund balance of the Property Tax Refund Fund increased by $2,380,000. The fund began operation during the year. • During the year the City closed out the operation of all internal service funds by transferring $8,170,000 from the General Fund. 11 • City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2003 • Financial Analysis of the City's Proprietary Funds Below is an analysis of the fund equity of the City's proprietary funds (in thousands): Amount Percent September 30, September 30, Increase Increase • 2003 2002 Decrease Decrease Net Assets: Water Fund $ 105,629 $ 98,928 $ 6,701 6.8% Sewer Fund 27,809 21,056 6,753 32.1% Refuse Fund (890) (365) (525) -143.8% Other Enterprise Funds 12,953 14,076 (1,123) -8.0% • Total Net Assets $ 145,501 $ 133,695 $ 11,806 8.8% Unrestricted Net Assets: Water Fund $ 14,903 $ 15,191 $ (288) -1.9% Sewer Fund 6,541 3,592 2,949 82.1% • Refuse Fund (890) (365) (525) -143.8% Other Enterprise Funds 5,117 4,453 664 14.9% Total Unrestricted Net Assets $ 25,671 $ 22,871 $ 2,800 12.2% ■ Total net assets of the Water Fund increased $6,701,000 (6.8%), while unrestricted net • assets decreased $288,000 (1.9%). The increase in the total net assets is largely due to the Water Master Plan revenues. ■ Total net assets of the Sewer Fund increased $6,753,000 (6.8%) while unrestricted net assets increased by $2,949,000 (82.1%). The increase in total assets is largely due to additional contributed infrastructure. The increase in net assets is due to funds being • accumulated to pay for future capital improvements. ■ Total and unrestricted net assets of the Refuse Fund decreased $525,000 (143.8%) resulting from billing issues relating to the new Utiligy system. Staff is reviewing to ensure that customers are properly billed and the bills properly recorded. • ■ Total net assets of non-major enterprise funds decreased $1,123,000 (8.8%), while unrestricted net assets increased $664,000 (14.9%). This is largely due to the transfer of the Art Center from an enterprise fund to a special revenue fund. • • 12 City of Huntington Beach • Management's Discussion and Analysis For the Year Ended September 30, 2003 • Debt Administration Below is a schedule of the changes to the City's long-term debt (in thousands). Additional information on the City's long-term debt is shown in note 11 to the financial statements. • Balance Balance October September Governmental Activities: 1, 2002 Additions Retirements 30, 2003 Certificates of Participation $ 17,295 $ - $ (565) $ 16,730 Revenue Bonds 66,125 - (2,590) 63,535 • Tax Allocation Bonds 30,370 - (995) 29,375 Special District Bonds 415 - (55) 360 Claims 12,612 16,831 (14,390) 15,053 Compensated Absences 8,950 - (727) 8,223 Leases 4,107 4,054 (1,741) 6,420 Pension Obligation 8,593 - (251) 8,342 Loans 8,925 - (750) 8,175 Property Tax Claims - 22,138 - 22,138 Other Redevelopment Obligations 11,280 - (731) 10,549 Total Debt-Governmental Activities 168,672 43,023 (22,795) 188,900 Business Activities: Compensated Absences 491 132 - 623 Leases 595 - (345) 250 Total Long-Term Obligations - Business Activities 1,086 132 (345) 873 Total Debt $ 169,758 $ 43,155 $ (23,140) $ 189,773 The City of Huntington Beach is legally restricted to issuing general obligation bonds to 15% of its assessed valuation. Since the City has no general obligation bonds outstanding, the limit does not apply. This is shown on page 100 of the financial statements. The City's total debt for increased $20,015,000 or 11.9%from its beginning amount largely due to the property tax refund claim. Certain long-term obligations of the City are rated by independent agencies for their relative safety as an investment. The City received AAA ratings on the following recently issued obligations: ■ Public Financing Authority 2000 Certificates of Participation ■ Public Financing Authority 2001 (a) Lease Revenue Bonds ■ Public Financing Authority 2001 (b) Lease Revenue Bonds 13 • City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2003 • Capital Assets The capital assets of the City are those assets, which are used in the performance of the City's functions including infrastructure assets. The City has elected to use the "Basic Approach" as defined by GASB statement 34 for infrastructure reporting. The following infrastructure networks • are recorded as capital assets in the government-wide financial statements: • Storm drain system including pump stations, drainage system and manholes. • Streets, (including land underneath streets)traffic signals, curbs, gutters, and sidewalks. • Below is a schedule of the City's capital assets, net of accumulated depreciation (in thousands): Amount Percent September 30, September 30, Increase Increase Governmental Activities: 2003 2002 Decrease Decrease Land $ 323,095 $ 317,391 $ 5,704 1.8% • Buildings 87,435 64,277 23,158 36.0% Machinery and Equipment 19,905 22,986 (3,081) -13.4% Construction in Progress 11,817 22,202 (10,385) -46.8% Infrastructure 138,953 138,161 792 0.6% Total Governmental Activities 581,205 565,017 16,188 2.9% • Business Activities: Land $ 7,839 $ 8,598 $ (759) -8.8% Buildings 31,435 23,631 7,804 33.0% Machinery and Equipment 3,833 4,194 (361) -8.6% Construction in Progress 8,071 7,845 226 2.9% Infrastructure 37,956 36,108 1,848 5.1% Total Business Activities 89,134 80,376 8,758 10.9% Total Capital Assets $ 670,339 $ 645,393 $ 24,946 3.9% Capital assets from governmental activities increased $16,188,000 (2.9%) while capital assets • from business activities increased $8,758,000 (10.9%). These increases were largely due to infrastructure additions. General Fund Budgetary Highlights • Comparing the fiscal year 2002/2003 original budget (or adopted) General Fund (expenditures and transfers) amount of$141,853,000 to the final budget of$164,813,000 shows a net increase of $27,517,000. Included in original budget amount is $4,557,000 of prior year encumbrance carryover into fiscal year 2003/2004. The major portion of the increase resulted from the transfer resulting changing the method of accounting for interfund advances ($20,572,000) and the transfer resulting from consolidating the internal service fund activity ($8,170,000). The • remaining changes are largely from budget reductions and cancellation of prior year encumbrances carried forward. • 14 City of Huntington Beach • Management's Discussion and Analysis For the Year Ended September 30, 2003 • General Fund expenditures were $7,570,000 less than the final budget. This was largely the result of approximately$11 million of permanent expenditure reductions/freezes approved by the City Council during the year. Two departments(Police and Fire) had expenditures that exceeded the final budget amounts. This was largely due to increased retirement and overtime costs. • Economic Factors And Next Year's Budgets And Rates The key assumptions in the General Fund revenue forecast for fiscal year 2002/2003 were: ■ Revenue shortfalls from expected sales tax revenue ■ Revenue shortfalls from reduced utility tax revenue • ■ Reduction in Gas Tax transfers to the General Fund ■ Increase in expected fee study revenue ■ Increase in parking revenue ■ General Growth in revenue • Contacting the City's Financial Management This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. If you have questions about this report, separate reports of the City's component units or need any additional financial information, contact the Administrative Services • Department, Finance Division at 2000 Main Street, Huntington Beach, California, 92648, phone (714) 374-5358 or e-mail kreed@surfcity-hb.org. • • • • 15 • • • • • C; ars,LL'*e LnancLal c1ta menti CITY OF HUNTINGTON BEACH STATEMENT OF NET ASSETS SEPTEMBER 30, 2003 (IN THOUSANDS) • Business- Governmental Type ASSETS: Activities Activities Total Cash and Investments $ 7,136 $ 15,354 $ 22,490 • Receivables 16,910 9,786 26,696 Inventories - 1,154 1,154 Other Assets 4,143 - 4,143 Subtotal 28,189 26,294 54,483 Restricted Assets: - Cash and Investments 33,871 36,926 70,797 • Cash with Fiscal Agent 22,850 - 22,850 Receivables 15,584 - 15,584 Land Held for Resale 11,024 - 11,024 Total Restricted Assets 83,329 36,926 120,255 Capital Assets : Non-Depreciable 335,240 15,910 351,150 • Depreciable 245,965 73,224 319,189 Total Capital Assets 581,205 89,134 670,339 TOTAL ASSETS 692,723 152,354 845,077 LIABILITIES: Accounts Payable 2,741 4,107 6,848 Accrued Payroll 3,967 416 4,383 Deposits 1,663 1,457 3,120 Subtotal 8,371 5,980 14,351 Liabilities Payable from Restricted Assets: - Accounts Payable 3,489 - 3,489 Accrued Interest Payable 747 - 747 • Deferred Revenue 3,389 - 3,389 Deposits 3,429 - 3,429 Total Liabilities Payable from Restricted Assets 11,054 - 11,054 Long-Term Obligations: Claims Payable 5,900 - 5,900 Long-Term Obligations Due Within One Year 30,882 323 31,205 • Long-Term Obligations Due in More than One Year 152,118 550 152,668 Total Long-Term Obligations 188,900 873 189,773 TOTAL LIABILITIES 208,325 6,853 215,178 NET ASSETS: Investment in Capital Assets, Net of Related Debt 446,061 88,884 534,945 Restricted for: • Debt Service 15,045 - 15,045 Capital Projects 13,017 - 13,017 Other Purposes 23,199 30,946 54,145 Total Restricted Net Assets 51,261 30,946 82,207 Unrestricted (12,924) 25,671 12,747 • TOTAL NET ASSETS $ 484,398 $ 145,501 $ 629,899 See independent auditors' report and notes to financial statements 16 CITY OF HUNTINGTON BEACH STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30,2003 (In Thousands) Net(Expense)Revenue and Changes in Net Pro ram Revenues Assets Charges for Operating Current Grants and Capital Grants and Governmental Business-Type Ez ensea Services Contributions Contributions Activities Activities Total Functions/Programs Governmental Activities: City Council $ 267 $ $ $ $ (267) $ $ (267) City Administrator 1,587 (1,587) (1,587) • City Treasurer 1,341 (1,341) (1,341) City Attorney 2,899 (2,899) (2,899) City Clerk 559 82 (477) (477) Administrative Services 8,357 - (8,357) (8,357) Planning 3,633 752 (2,881) (2,881) Building 3,045 3,067 - 22 22 Fire 19,490 1,157 (18.333) (18.333) Information Systems 4,401 - 79 (4,322) (4,322) • Police 41,104 4,176 272 635 (36,021) - (36,021) Economic Development 3,830 257 1,257 - (2,316) (2,316) Community Services 9,989 9,433 - 878 322 322 Library Services 6,721 673 128 - (5,920) (5,920) Public Works 25,386 3,356 - 5,442 (16.588) (16,588) Non-Departmental 25,604 5 - (25.599) (25,599) Interest on Long-Term Debt 6,199 (6,199) (6,199) Total Governmental Activities 164,412 22,958 1,736 6,955 (132,763) (132,763) Business-type Activities: • Water Utility 24,943 26,843 - 11,100 13,000 13,000 Sewer Service 3,775 5,876 - 2,101 2,101 Refuse Collection 9,681 9,123 (558) (558) Emerald Cove Housing 401 746 345 345 Emergency Fire Medical 3,765 4,103 338 338 Hazmat Service 150 233 83 83 Ocean View Estates 58 245 187 187 Total Business Type Activities 42,773 47,169 11,100 15,496 15,496 Total Business and Government Type Activities $ 207,185 $ 70,127 $ 1,736 $ 18,065 (132,763) 15,496 (117,267) General Revenues: Taxes: Property Taxes 40,633 - 40,633 Sales Taxes 28,011 28,011 Utility Taxes 18,310 18,310 Other Taxes 13,337 13,337 Total Taxes 100,291 100,291 Other General Revenue: • Use of Money and Property 9,923 1,482 11,405 From Other Agencies 16,412 16,412 Other: 5,491 5,491 Total Other General Revenue 31,826 1,482 33,308 Transfers 5,537 (5,537) Total General Revenues and Transfers 137,664 (4,065) 133,599 Change In Net Assets 4,891 11,441 16,332 Net Assets-Beginning of Year(Restated) 479,507 134,060 613,567 Net Assets-End of Year $ 484,398 $ 146,601 $629,899 • See independent auditors'report and notes to financial statements 17 CITY OF HUNTINGTON BEACH BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30,2003 Other Ma or Govemmental Funds Public Total Major Other • Redevelopment Financing Property Tax Governmental Governmental ASSETS: General Fund Agency Authority Grants Refund Funds Funds Total Cash and Investments $ 7,136 $ 10,860 $ - $ 1,010 $ 2,369 $ 21,375 $ 19,632 $ 41,007 Cash and Investments with Fiscal Agent - 2,503 19,047 - - 21,550 1,300 22,850 Taxes Receivable 16,910 2,252 - - - 19,162 1,067 20,229 Other Receivables 2,094 4,513 88 5,151 11 11,857 140 11,997 Unbilled Receivable 268 - - - 268 268 Due from Other Funds 3,048 - 3,048 4,123 7,171 • Land Held for Resale 11,024 11,024 11,024 Other Assets 2,557 2,557 1,586 4,143 TOTAL ASSETS $ 32,013 $ 31,152 $ 19,135 $ 6,161 $ 2,380 $ 90,841 $ 27,848 $ 118,689 LIABILITIES AND FUND BALANCES LIABILITIES Accounts Payable $ 2,741 $ 126 $ 2 $ 1,440 $ - $ 4,309 $ 1,921 $ 6,230 Accrued Payroll 3,785 16 57 3,858 109 3,967 Due to Other Funds - - 3,048 3,048 4,123 7,171 Deposits Payable 1,663 1,843 - - 3,506 1,586 5,092 Deferred Revenue 2,950 3,602 3,370 9,922 19 9,941 Claims Payable 5,900 - 5,900 5,900 TOTAL LIABILITIES 17,039 5,587 3,050 4,867 30,543 7,758 38,301 FUND BALANCES Reserved for: Encumbrances 2,757 414 - 1,294 4,465 1,889 6,354 Long-Term Receivables - 4,764 - - 4,764 - 4,764 Debt Service - 4,053 4,053 4,053 Capital Projects - 12,032 12,032 12,032 Land Held for Resale 11,024 11,024 11,024 Total Reserved Fund Balance 2,757 16,202 16,085 1,294 36,338 1,889 38,227 Unreserved,Designated: Designated for Future Expenditure(Reported in): 8,378 - - 8,378 - 8,378 Special Revenue Funds - - 603 603 Capital Projects Funds - - 10,220 10,220 • Designated for Economic Uncertainties 9,984 9,984 - 9,984 Unreserved,Undesignated(Reported in): General Fund 2,233 2,233 - 2,233 Special Revenue Funds - - - 9,796 9,796 Debt Service Funds 2,380 2,380 234 2,614 Capital Projects Funds 985 985 (2,652) (1,667) Total Unreserved 12,217 9,363 2,380 23,960 18,201 42,161 TOTAL FUND BALANCES 14,974 25,565 16,085 1,294 2,380 60,298 20,090 80,388 TOTAL LIABILITES AND FUND BALANCES $ 32,013 $ 31,152 $ 19,135 $ 6,161 $ 2,380 $ 90,841 $ 27,848 $ 118,689 • See independent auditors'report and notes to financial statements 18 CITY OF HUNTINGTON BEACH RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS SEPTEMBER 30,2003 (in thousands) Amounts reported for governmental activities in the statement of net assets are different because: Total Fund Balances Governmental Funds $ 80,388 A Net capital assets used in governmental activities are not financial resources and,therefore,are not reported in the funds 581,205 Other long-term assets are not available to pay for current-period expenditures and,therefore,are deferred in the funds 6,552 Accrued Interest Payable not Recorded in Liabilities (747) Long-term Liabilities,including bonds and certificates of participation payable are due and payable and therefore are not reported in the funds. (188,900) w Current Portion of Claims Payable Included in Long-Term Liabilities that is already recorded in the fund statements 5,900 Net Assets of Governmental Activities $ 484,398 See independent auditors'report and notes to financial statements 19 CITY OF HUNTINGTON BEACH STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 (IN THOUSANDS) Other Major Governmental Funds Public Total Major Other General Redevelopment Financing Property Tax Governmental Governmental REVENUES: Fund A enc Authors Grants Refund Funds Funds Total Property Taxes $29,688 $ 9,099 $ $ $ $ 38,787 $ 196 $ 38,983 Sales Taxes 25,882 - - 25,882 2,129 28,011 A Utility Taxes 18,310 - - 18,310 - 18,310 Other Taxes 11,845 1,492 13,337 - 13,337 Licenses and Permits 6,531 - 6,531 1,514 8,045 Fines and Forfeitures 3,815 3,815 - 3,815 From Use of Money and Property 6,843 892 596 62 8,393 1,530 9,923 From Other Agencies 10,885 - - 5,749 - 16,634 8,469 25,103 Charges for Current Service 9,244 896 - - 10,140 1,846 11,986 Other 967 232 252 - 1,451 703 2,154 • TOTAL REVENUES 124,010 11,719 892 6,697 62 143,280 16,387 169,667 EXPENDITURES Current: City Council 269 - - - - 269 - 269 City Administrator 1,559 1,559 1,559 City Treasurer 1,376 1 1,377 1,377 City Attorney 2,836 - 2,836 2,836 City Clerk 555 - 555 555 Administrative Services 8,323 - 8,323 8,323 w Planning 2,403 141 2,544 2,544 Building 2,566 - 2,566 477 3,043 Fire 18,848 173 19,021 - 19,021 Information Systems 3,072 - 3,072 547 3,619 Police 40,825 - 284 41,109 75 41,184 Economic Development 843 1,398 1,087 3,328 288 3,616 Community Services 9,381 - 272 9,653 529 10,182 Library Services 3,192 157 3,349 866 4,215 Public Works 17,009 1,082 - 18,091 1.741 19,832 Non-Departmental 9,348 - - 19,820 29,168 2,068 31,236 Capital Outlay - 1,347 - 5,353 - 6,700 17,517 24,217 Debt Service: - - Principal 1,984 1,968 3,155 - 7,107 320 7,427 Interest 162 2,016 3,763 260 6,201 72 6,273 TOTAL EXPENDITURES 124,551 6,729 6,918 8,810 19,820 166,828 24,600 191,328 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER) EXPENDITURES (641) 4,990 (6,026) (2,213) (19,758) (23,648) (8,113) (31,661) OTHER FINANCING SOURCES(USES) Transfers In 8,072 24,163 4,819 2,736 - 39,790 14,673 54,463 Proceeds from Agency Fund - - - - 2,318 2,318 - 2,318 Reclassification of Interfund Advances 16,018 - 16,018 - 16,018 Proceeds of Long-Term Debt 1,684 19,820 21,504 2,370 23,874 Long-Term Debt from Internal Service Funds (1,610) - - (1,610) - (1,610) Capital Assets Reclassifications for Change in Fund Type (1,743) (1,743) Transfers Out (32,692) (8,260) (7,003) (2,142) (50,097) (6,999) (57,096) TOTAL OTHER FINANCING SOURCES(USES) (26,230) 33,606 (2,184) 694 22,138 27,923 8,301 36,224 INCREASE(DECREASE)IN FUND BALANCES (26,771) 38,696 (8,210) (1,619) 2,380 4,376 188 4,663 FUND BALANCE-BEGINNING OF YEAR 41,746 (13,030) 24,296 2,913 66,923 19,902 76,826 FUND BALANCE-END OF YEAR $ 14,974 $ 26,666 $ 16,086 $ 1,294 $ 2,380 $ 60,298 $ 20,090 $ 80,388 See independent auditors'report and notes to financial statements 20 CITY OF HUNTINGTON BEACH RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended September 30,2003 (in thousands) Net Changes in Fund Balances-Total Governmental funds $ 4,563 Amounts reported for governmental activities In the Statement of Activities are different because: • CAPITAL EXPENDITURES AND DEPRECIATION - Governmental funds report capital outlays as expenditures. However,in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. 24,217 Donated Infrastructure from Developers-Infrastructure donated from • developers that increased the City's capital assets 7,879 Depreciation Expense - Depreciation is not recorded in the govrenmental funds. However, it is recorded in the Statement of Activities (12,681) ACCRUAL OF REVENUES - Certain revenues in the Statement of Activities do not meet the"availability"criteria for revenue recognition in the governmental funds and are not reported in the governmental funds as revenue. 1,650 INTERNAL SERVICE FUNDS - These are used by management to charge the cost of certain activities to individual funds. During the year these funds were closed out with a transfer. 8,170 LONG-TERM DEBT PROCEEDS-Issuances and changes in long-term debt (bonds, leases, certificates of participation, compensated absences, etc) provide current financial resources to governmental funds, while repayments of this debt consumes the current financial resources of governmental funds. Neither transaction, however, has • any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, etc. when debt is first issued. These amounts are deferred and amortized in the Statement of Activities. (23,874) CLAIMS PAYABLE-Due to changes in the City's method for recording long-term insurance claims (12,460) PAYMENTS OF LONG-TERM DEBT-Principal payments on long-term debt are recorded an expenditure in the governmental funds and a reduction of liability in the government-wide statements. 7,427 Change in Net Assets of Governmental Activities $ 4,891 See independent auditors'report and notes to financial statements 21 CITY OF HUNTINGTON BEACH • STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30,2003 (in thousands) Sewer Total Major Non-Major Service Refuse Enterprise Enterprise ASSETS Water Fund Fund Fund Funds Funds Total Current Assets: Cash and Investments $ 42,042 $ 5,990 $ - $ 48,032 $ 4,248 $ 52,280 Other Receivables 4,324 653 1,026 6,003 1,414 7,417 Inventories 1,154 - - 1,154 - 1,154 Unbilled Receivable 1,711 264 394 2,369 - 2,369 Due from Other Funds 1,527 - - 1,527 - 1,527 Total Current Assets 50,758 6,907 1,420 59,086 5,662 64,747 Capital Assets: Land 3,907 - - 3,907 3,933 7,840 Buildings 30,723 1,219 - 31,942 4,662 36,604 Improvements Other than Buildings - 2,653 - 2,653 - 2,653 Machinery and Equipment 6,107 191 - 6,298 1,106 7,404 Infrastructure 51,370 35,434 - 86,804 - 86,804 . Construction in Process 8,072 - - 8,072 - 8,072 Less Accumulated Depreciation (40,149) (18,229) - (58,378) (1,865) (60,243) Total Capital Assets 60,030 21,268 81,298 7,836 89,134 TOTAL ASSETS 110,788 28,175 1,420 140,383 13,498 153,881 LIABILITIES Current Liabilities: Accounts Payable 2,861 191 766 3,818 289 4,107 Accrued Payroll 233 53 17 303 113 416 . Due to Other Funds - - 1,527 1,527 - 1,527 Deposits Payable 1,418 - 1,418 39 1,457 Current Portion of Claims and Leases 323 323 - 323 Total Current Liabilities 4,835 244 2,310 7,389 441 7,830 Liabilities Payable from Restricted Assets - Non-Current Liabilities: Compensated Absences 397 122 - 519 104 623 Capital Leases 250 - 250 - 250 • Less Current Portion of Claims and Leases (323) - (323) - (323) Total Non-Current Liabilities 324 122 446 104 550 TOTAL LIABILITIES 5,159 366 2,310 7,835 545 8,380 NET ASSETS Invested in Capital Assets,Net of Related Debt 59,780 21,268 - 81,048 7,836 88,884 Restricted for: - Other Purposes 30,946 - - 30,946 - 30,946 Unrestricted 14,903 6,541 (890) 20,554 5,117 25,671 TOTAL NET ASSETS $ 105,629 $ 27,809 $ (890) $ 132,548 $ 12,953 $ 146,601 See independent auditors'report and notes to financial statements 22 4 • • • • C&e q u L"t CIUPPlementatjt 9.n f+�tmation City of Huntington Beach Required Supplementary Information September 30, 2003 Budgetary Information The City Council must annually adopt a budget by September 30 of the prior fiscal year. The budgeted expenditures become the appropriations to the various departments. The budget includes estimates for revenue that, along with the appropriations, compute the budgetary fund balance. The 0 appropriated budget covers substantially all governmental fund expenditures with the exception of capital improvement projects (capital projects funds) carried forward from prior years, which constitute a legally authorized non-appropriated budget. The City Council may amend the budget at any time. The City Administrator may transfer funds from between object purposes (personal services, operating expenditures or capital outlay expenditures)within the same department without • changing the total departmental budget. Department heads may transfer funds from like object categories of the same department. The City Council must approve any changes to departmental budgets. Expenditures may not exceed appropriations at the departmental level. All unused appropriations lapse at year-end. During the year the City Council made several supplemental appropriations with included carryovers of prior year encumbrances all of which were within available fund balance and estimated revenue amounts. The City Council adopts governmental fund budgets consistent with generally accepted principles as legally required. There are no significant non-budgeted financial activities. Revenues for special revenue funds are budgeted by entitlements, grants and estimates of future development and economic growth. Expenditures and transfers are budgeted based upon available financial resources. On or before May 31 of each year, each department submits data to the City Administrator for budget preparation. Staff prepares the budget by fund, function and activity. The budget includes information on past years, current year estimates and requested appropriations for the next fiscal year. Before August 1,the City Council receives the proposed budget. The City Council holds public hearings and • may amend the budget by a majority vote. Changes to the budget must be within the available revenues and reserves. These financial statements show budgetary data for the General, Special Revenue, Capital Projects and Debt Service Funds. The original budget, revised budget, actual expenditures, and variance • amounts are shown. The City uses an encumbrance system as an aid in controlling expenditures.When the City issues a purchase order for goods or services, it records an encumbrance until the vendor delivers the goods or performs the service. At year-end, the City reports all outstanding encumbrances as reservations of fund balance in governmental fund types. The City reappropriates these encumbrances into the new fiscal year. Below is a schedule of a budget to actual comparison of the General and Grant Fund's Revenues, and Expenditures (in thousands): 71 • CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES- BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2003 (In Thousands) General Fund Original REVENUES: Budget Final Budget Actual Variance Property Taxes $29,753 $29,753 $29,688 $ (65) Sales Taxes 27,870 27,870 25,882 (1,988) Utility Taxes 20,900 20,900 18,310 (2,590) • Other Taxes 11,690 11,690 11,845 155 Licenses and Permits 6,149 6,149 6,531 382 Fines,Forfeitures and Penalties 3,971 3,971 3,815 (156) From Use of Money and Property 6,159 6,159 6,843 684 From Other Agencies 12,319 12,319 10,885 (1,434) Charges for Current Service 11,799 11,799 9,244 (2,555) Other 709 709 967 258 TOTAL REVENUES 131,319 131,319 124,010 (7,309) EXPENDITURES: Current: City Council 265 279 269 10 City Administrator 1,892 1,891 1,559 332 City Treasurer 1,738 1,410 1,376 34 City Attorney 2,270 3,377 2,836 541 City Clerk 667 732 555 177 • Administrative Services 5,136 9,757 8,323 1,434 Planning 2,950 3,059 2,403 656 Building 2,846 2,814 2,566 248 Fire 19,365 18,699 18,848 (149) Information Systems 5,424 5,038 3,072 1,966 Police 41,077 39,342 40,825 (1,483) Economic Development 1,055 1,126 843 283 Community Services 10,578 10,403 9,381 1,022 • Library Services 3,345 3,144 3,192 (48) Public Works 21,679 19,224 17,009 2,215 Non-Departmental 12,588 10,804 9,348 1,456 Debt Service: Principal - 860 1,984 (1,124) Interest 162 162 - TOTAL EXPENDITURES 132,875 132,121 124,551 7,570 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (1,556) (802) (541) 261 OTHER FINANCING SOURCES(USES): Transfers In 2,325 7,700 8,072 372 Long-Term Debt from Internal Service Funds - (1,610) (1,610) - Transfers Out (8,975) (32,692) (32,692) TOTAL OTHER FINANCING SOURCES(USES) (6,650) (26,602) (26,230) 372 EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)EXPENDITURES AND OTHER USES (8,206) (27,404) (26,771) 633 FUND BALANCE-BEGINNING OF YEAR 41,745 41,745 41,745 41,745 FUND BALANCE-END OF YEAR $ 33,539 $ 14,341 $ 14,974 $ 42,378 72 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2003 (IN THOUSANDS) Grants Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ - $ 360 $ 596 $ 236 From Other Agencies 5,404 16,582 5,749 (10,833) Other - - 252 252 TOTAL REVENUES 5,404 16,942 6,597 (10,345) EXPENDITURES: Current: City Treasurer - 19 1 18 Planning 162 162 141 21 Fire 18 298 173 125 Police 514 1,090 284 806 A Economic Development 953 1,352 1,087 265 Community Services 152 313 272 41 Library Services 81 179 157 22 Public Works 5,160 5,343 1,082 4,261 Non-Departmental - 79 - 79 Capital Outlay 13,390 16,579 5,353 11,226 Debt Service: Interest 260 265 260 5 TOTAL EXPENDITURES 20,690 25,414 8,810 16,869 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES _(15,286) (8,472) (2,213) 6,259 OTHER FINANCING SOURCES(USES): Transfers In - 2,736 2,736 - Transfers Out - (2,142) (2,142) - TOTAL OTHER FINANCING SOURCES(USES) 594 594 - • EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)EXPENDITURES AND OTHER USES (15,286) (7,878) (1,619) 6,259 FUND BALANCE-BEGINNING OF YEAR 2,913 2,913 2,913 FUND BALANCE-END OF YEAR $ 12,373) $ (4,965) $ 1,294 $ 6,259 73 ` CITY OF HUNTINGTON BEACH REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 SCHEDULE OF FUNDING PROGRESS RETIREMENT PLAN- NORMAL Entry Age Excess Normal Assets as a Actuarial Actuarial Percentage of Actuarial Valuation Accrued Value of Funded Covered Covered Date Liability(AAL) Assets Excess Assets Ratio Payroll Payroll 2000 Safety $258,857 $291,309 $32,452 112.5% $23,270 139.5 % Non Safety 163,688 230,236 66,548 140.7% 34,683 191.9% Total $422,545 $521,545 $99,000 123.4% 57,953 170.8% 2001 Safety $283,438 $295,280 $11,842 104.2% $27,717 42.7 % Non Safety 177,467 237,108 59,641 133.6% 35,985 165.7 % Total $4609905 $5329388 $71,483 116.6% $63,702 112.2% 2002 Safety $299,052 $272,367 ($26,685) 91.1% $23,270 (114.7) % ' Non Safety 191,997 223,364 31,367 140.7% 37,811 83.0 % Total $491,049 $495,731 $4,682 101.0% $61,081 7.7% CITY OF HUNTINGTON BEACH REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2003 SCHEDULE OF FUNDING PROGRESS RETIREMENT PLAN- SUPPLEMENTAL Entry Age Actuarial UAAL as a% Actuarial Valuation Normal Accrued Value of Unfunded AAL Funded Covered of Covered Date Liability Assets (UAAL) Ratio Payroll Payroll 6/30/94 Actual $ 14,673 $ 52 $ 14,725 0.4% $ 53,593 -27.5% 6/30/95 Update 15,776 290 16,066 1.8% 51,779 -31.0% » 6/30/96 Actual 16,071 120 16,191 0.7% 54,368 -29.8% 6/30/1997Actual 25,342 2,334 23,008 -10.1% 49,881 -46.1% 6/30/98 Update 26,493 3,251 23,242 -14.0% 48,585 -47.8% 6/30/99 Actual 28,601 4,162 24,439 -17.0% 50,723 -48.2% 6/30/2000 Update 28,844 5,077 23,767 -21.4% 57,674 -41.2% 6/30/2001 Actual 36,453 6,678 29,775 -22.4% 63,345 -47.0% 6/30/2002 Update 35,524 8,775 26,749 -32.8% 65,137 -41.1% 6/30/2003 Actual 40,436 10,474 29,962 -35.0% 65,227 -45.9% 74 CTlus page intentional6t left ,61anh • • • • clu,�p�nlem e nta� t2A fiotmation • • • OTIL a p a ,ye uttentLoitacl6e Left AlanA Non-Major Governmental Funds • 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 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 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'/z 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 Special Library Fund accounts for revenues and expenditures related to the expanded Central Library including some construction. . • The Park Acquisition and Development Fund accounts for fees received from developers to develop and maintain the City's park system. • The Cultural Affairs Fund accounts revenues and expenditures associated with the Citys'Art Center. Debt Service Funds account for the receipts for and payment of general long-term debt. • The Reservoir Hill Fund records the debt service activity of the Reservoir Hill Assessment bonds. Capital Projects Funds account for the acquisition and construction of capital assets other than those financed by proprietary fund types. • The Pier Fund accounts for the construction of the City's pier and surrounding area. • The Holly Seacliffe Fund accounts for capital improvements made to the Holly Seacliff area. • Redevelopment Agency • The Capital Improvement Fund accounts for major new improvements and equipment purchased for governmental operations • The Parkinq in-lieu Fund records construction activity from developers who pay fees in-lieu of directly providing parking facilities to the City • The Sewer Development Fund accounts for fees received from developers to construct and maintain sewer facilities. f CITY OF HUNTINGTON BEACH BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2003 (in thousands) SPECIAL REVENUE FUNDS Public Narcotics ASSETS: Gas Tax Drainage Communications Forfeiture Transportation Cash and Investments $ 914 $ $ $ 629 $ 3,761 Cash and Investments with Fiscal Agent - - - Taxes Receivable 676 340 Other Receivables 27 3 28 Due from Other Funds 4,123 - - Other Assets TOTAL ASSETS $ 5,740 $ $ $ 632 $ 4,129 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts Payable $ 12 $ $ $ - $ 12 Accrued Payroll 9 21 Due to Other Funds - 1,082 - Deposits Payable - Deferred Revenue TOTAL LIABILITIES 21 1,082 33 FUND BALANCES: Reserved for: Encumbrances 345 - 4 116 . Advances Total Reserved Fund Balances 345 4 116 Unreserved Fund Balances Unreserved,Designated for Future Expenditures 2,328 40 2,369 Undesignated 3,046 (1,082) 588 1,611 Total Unreserved Fund Balance 5,374 (1,082) 628 3,980 TOTAL FUND BALANCES 5,719 (1,082) 632 4,096 TOTAL LIABILITIES AND FUND BALANCES $ 5,740 S $ S 632 S 4,129 • i 75 SPECIAL REVENUE FUNDS Par" Acquisition Special Cultural and Total Special Air Quality Traffic Impact Fourth of July Library Affairs Development Revenue Funds . $ 418 $ 7,727 $ 104 $ 1,717 $ 164 $ 2,754 $ 18,188 - - - - - - 1,016 2 38 3 5 1 13 120 - - - - - - 4,123 1,586 1,586 $ 420 $ 7,765 $ 107 $ 1,722 $ 165 $ 4,353 $ 25,033 • $ 4 $ 315 $ 1 $ 34 $ 3 $ 1 $ 382 2 2 14 17 13 78 - - - - - - 1,082 1,586 1,586 6 317 1 48 20 1,600 3,128 54 101 12 26 2 1,229 1,889 54 101 12 26 2 1,229 1,889 360 4,366 94 359 15 289 10,220 2,981 1,289 128 1,235 9,796 360 7,347 94 1,648 143 1,524 20,016 414 7,448 106 1,674 145 2,753 21,905 $ 420 $ 7,765 $ 107 $ 1,722 $ 165 S 4,353 $ 25,033 • 76 CITY OF HUNTINGTON BEACH BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2003 (in thousands) (continued) DEBT SERVICE FUND CAPITAL PROJECTS FUNDS Reservoir Hill Assessment Capital ASSETS: District Improvement Pier Holly Seacliff Parkin In-lieu Cash and Investments $ 85 $ - $ $ 826 $ 533 Cash and Investments with Fiscal Agent 113 1,187 - - Taxes Receivable 51 - - - Other Receivables 4 10 4 2 Due from Other Funds - - - - Other Assets TOTAL ASSETS $ 253 $ 1,187 $ 10 $ 830 $ 535 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts Payable $ - 1,260 $ 43 $ 227 $ - Accrued Payroll 18 - - Due to Other Funds 1,657 1,173 Deposits Payable - - - Deferred Revenue 19 - TOTAL LIABILITIES 19 2,935 1,216 227 FUND BALANCES: Reserved for: Encumbrances - - - - Debt Service Total Reserved Fund Balances Unreserved Fund Balances Unreserved,Designated for Future Expenditures - 603 Undesignated 234 (1,748) (1,206) - 535 Total Unreserved Fund Balance 234 (1,748) (1,206) 603 535 TOTAL FUND BALANCES 234 (1,748) (1,206) 603 535 TOTAL LIABILITES AND FUND BALANCES $ 253 $ 1,187 $ 10 $ 830 $ 535 77 • CAPITA PROJECTS FUNDS 'Total Non- Total Capital Major Sewer Projects Governmental Development Funds Funds $ $ 1,359 $ 19,632 1,187 1,300 - 1,067 16 140 - 4,123 1,586 j $ 2,562 $ 27,848 $ 9 $ 1,539 $ 1,921 13 31 109 211 3,041 4,123 - - 1,586 19 • 233 4,611 7,758 - - 1,889 1,889 603 10,823 (233) (2,652) 7,378 • (233) (2,049) 18,201 (233) (2,049) 20,090 $ $ 2,562 $ 27,848 78 CITY OF HUNTINGTON BEACH • COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2003 (IN THOUSANDS) Special Revenue Funds Public Narcotics REVENUES: Gas Tax Drainage Communications Forfeiture Transportation AlrQuallty Property Taxes $ $ $ $ $ - $ Sales Taxes 2,129 Licenses and Permits - From Use of Money and Property 69 9 103 4 From Other Agencies 4,536 780 - 224 Charges for Current Service 332 - Other 6 40 TOTAL REVENUES 4,605 338 789 2,272 228 EXPENDITURES: Current: City Council - - - City Administrator • City Treasurer City Attorney City Clerk Administrative Services Planning Building Fire Information Systems Police - - - 41 - - Economic Development - • Community Services Library Services - - - Public Works 469 510 76 Non-Departmental - - - - Capital Outlay 1,140 15 415 106 Debt Service: Principal - - - - Interest - - TOTAL EXPENDITURES 1,609 15 41 925 182 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 2,996 323 748 1,347 46 OTHER FINANCING SOURCES(USES): Transfers In 1,300 - - - - Capital Assets ReGassifications for Change in Fund Type - Proceeds of Long-Term Debt Transfers Out (1,400) (1,513) (254) (1,252) TOTAL OTHER FINANCING SOURCES(USES) (100) (1,513) (254) (1,252) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES 2,896 (1,190) (264) 748 95 46 FUND BALANCE-BEGINNING OF YEAR 2,823 108 254 (116) 4,001 368 FUND BALANCE-END OF YEAR $ 5,719 S (1,082) $ $ 632 E 4,096 E 414 • 79 Special Revenue Funds Park Acquisiton Total Special Special Cultural and Revenue Tragic Im act FourthofJuly Library Affalra Develo meM Funds - • - - 2,129 36 1,17 8 1,214 156 4 430 3 50 828 9 - - 773 6,322 739 - 596 133 - 1,800 220 36 63 306 671 940 224 1,062 199 2,307 12,964 . - 41 288 - 288 200 - - 249 449 866 - 866 17 - - - - 1,072 373 31 2,080 • 390 200 866 288 280 4,796 550 24 196 (89) 2,027 8,168 18 1,977 243 3,538 - - - (1,743) - (1,743) (517) (457) (5,393) • 18 (617) 234 (214) (3,598) 550 42 (321) 145 1,813 4,570 6,898 64 1,995 940 17,335 E 7,448 E 106 E 1,674 E 145 E 2,753 E 21,905 • • 80 CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2003 (IN THOUSANDS) (CONTINUED) . DEBT SERVICE FUND CAPITAL PROJECTS FUNDS Tot7Nont.,ReservoirHill Total Capital MAssessment Capital Parking in- Sewer Projects GoveREVENUES: District Im rovement Pier Holl Seaeliff lieu Develo ment Funds Fu Property Taxes $ 196 $ $ $ $ $ $ $ 196 Sales Taxes - 2,129 • Licenses and Permits - 300 300 1,514 From Use of Money and Property 3 618 19 62 - 699 1,530 From Other Agencies 2,052 - - 95 2,147 8,469 Charges for Current Service - - - 46 46 1,846 Other 18 14 14 703 TOTAL REVENUES 217 2,052 632 19 62 441 3,206 16,387 EXPENDITURES: Current: City Council - - - - - - City Administrator • City Treasurer City Attorney City Clerk Administrative Services Planning Building 477 477 477 Fire - - - infonnation Systems 547 547 547 Police 34 34 75 , Economic Development - - 288 Community Services 80 80 529 Library Services 866 Public Works - 448 17 - - 204 669 1,741 Non-Departmental 16 2,052 - - 2,052 2,068 Capital Outlay - 14,539 600 298 15,437 17,517 Debt Service: - - Principal 120 200 - 200 320 Interest 32 40 - - 40 72 • TOTAL EXPENDITURES 168 18,337 97 600 502 19,536 24,500 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 49 (16,285) 535 (581) 62 (61) (16,330) (8,113) OTHER FINANCING SOURCES(USES): Transfers In - 11,135 - 11,135 14,673 Capital Assets Reclassifications for Change in Fund Type (1,743) Proceeds of Long-Term Debt 2,370 - 2,370 2,370 Transfers Out (200) (1,276) (130) (1,606) (6,999) TOTAL OTHER FINANCING SOURCES(USES) 13,305 (1,276) (130) 11,899 8,301 . EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES 49 (2,980) (741) (581) 62 (191) (4,431) 188 FUND BALANCE-BEGINNING OF YEAR 185 1,232 (465) 1,184 473 (42) 2,382 19,902 FUND BALANCE-END OF YEAR $ 234 $ (1,748) $ (1,206) $ 603 $ 62 $ (233) $ (2,0491 $ 20,090 • 81 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 (IN THOUSANDS) Gas Tax REVENUES: Original Budget Final Budget Actual Variance From Use of Money and Property $ 40 $ 40 $ 69 $ 29 From Other Agencies 5,360 5,360 4,536 (824) TOTAL REVENUES 5,400 5,400 4,605 (795) EXPENDITURES: Current: Public Works 1,325 1,259 469 790 Capital Outlay 4,050 5,014 1,140 3,874 TOTAL EXPENDITURES 5,375 6,273 1,609 4,664 r EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 25 (873) 2,996 3,869 OTHER FINANCING SOURCES(USES): Transfers in 1,300 1,300 1,300 - Transfers Out (900) (1,400) (1,400) - TOTAL OTHER FINANCING SOURCES(USES) 400 (100) (100) EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES 425 (973) 2,896 3,869 FUND BALANCE-BEGINNING OF YEAR 2,823 2,823 2,823 - FUND BALANCE-END OF YEAR $ 3,248 $ 1,850 $ 5,719 $ 3,869 • Drainage REVENUES: Original Budget Final Budget Actual Variance Charges for Current Service $ 200 $ 206 $ 332 $ 126 Other 70 70 6 (64) TOTAL REVENUES 270 276 338 62 EXPENDITURES: Current: Capital Outlay 165 35 15 20 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 35 241 323 82 OTHER FINANCING SOURCES(USES): Transfers Out - (1,513) (1,513) - EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES 35 (1,272) (1,190) 82 FUND BALANCE-BEGINNING OF YEAR 108 108 108 FUND BALANCE-END OF YEAR $ 143 $ (1,164) $ (1,082) $ 82 Public Communications Original Budget Final Budget Actual Variance . OTHER FINANCING SOURCES(USES): Transfers Out (254) (254) (254) - FUND BALANCE-BEGINNING OF YEAR 254 254 254 FUND BALANCE-END OF YEAR $ - $ - $ - $ 82 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 (IN THOUSANDS) Narcotics Forfeiture REVENUES: Original Budget Final Budget Actual Variance From Use of Money and Property $ - $ - $ 9 $ 9 From Other Agencies 25 25 780 755 TOTAL REVENUES 25 25 789 764 EXPENDITURES: Police 50 70 41 29 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (25) (45) 748 793 FUND BALANCE-BEGINNING OF YEAR (116) (116) (116) FUND BALANCE-END OF YEAR $ (141) $ (161) $ 632 $ 793 Transportation r REVENUES: Original Budget Final Budget Actual Variance Sales Taxes $ 2,316 $ 2,316 $ 2,129 $ (187) From Use of Money and Property 150 150 103 (47) From Other Agencies 160 160 - (160) Other - - 40 40 • TOTAL REVENUES 2,626 2,626 2,272 (354) EXPENDITURES: Current: Public Works 804 1,597 510 1,087 Capital Outlay 906 1,143 415 728 TOTAL EXPENDITURES 1,710 2,740 925 1,815 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 916 (114) 1,347 1,461 + OTHER FINANCING SOURCES(USES): Transfers Out (1,252) (1,252) (1,252) - EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES 916 (1,366) 95 1,461 FUND BALANCE-BEGINNING OF YEAR 4,001 4,001 4,001 FUND BALANCE-END OF YEAR $ 4,917 $ 2,635 $ 4,096 $ 1,461 Air Quality A REVENUES: Original Budget Final Budget Actual Variance From Use of Money and Property $ 20 $ 20 $ 4 $ (16) From Other Agencies 210 210 224 14 TOTAL REVENUES 230 230 228 (2) EXPENDITURES: Current: Public Works 135 218 76 142 Capital Outlay 395 484 106 378 TOTAL EXPENDITURES 530 702 182 620 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (300) (472) 46 518 OTHER FINANCING SOURCES(USES): • FUND BALANCE-BEGINNING OF YEAR 368 368 368 FUND BALANCE-END OF YEAR $ 68 $ (104) $ 414 $ 518 83 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 (IN THOUSANDS) Traffic Impact REVENUES: Original Budget Final Budget Actual Variance • Licenses and Permits $ - $ - $ 36 $ 36 From Use of Money and Property 40 40 156 116 From Other Agencies - - 9 9 Charges for Current Service 300 300 739 439 TOTAL REVENUES 340 340 940 600 EXPENDITURES: Current: Public Works 50 50 17 33 Capital Outlay - 2,273 2,282 373 1,909 TOTAL EXPENDITURES 2,323 2,332 390 1,942 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (1,983) (1,992) 550 2,542 FUND BALANCE-BEGINNING OF YEAR 6,898 6,898 6,898 - FUND BALANCE-END OF YEAR $ 4,915 $ 4,906 $ 7,448 $ 2,542 • Fourth of July REVENUES: Original Budget Final Budget Actual Variance From Use of Money and Property $ 2 $ 2 $ 4 $ 2 Other 200 200 220 20 TOTAL REVENUES 202 202 224 22 EXPENDITURES: Community Services 253 253 200 53 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (51) (51) 24 75 OTHER FINANCING SOURCES(USES): Transfers In 18 18 EXCESS OF REVENUES AND OTHER SOURCES OVER • (UNDER)EXPENDITURES AND OTHER USES (51) (33) 42 75 FUND BALANCE-BEGINNING OF YEAR 64 64 64 FUND BALANCE-END OF YEAR $ 13 $ 31 $ 106 $ 75 Special Library REVENUES: Original Budget Final Budget Actual Variance From Use of Money and Property $ 388 $ 388 $ 430 $ 42 Charges for Current Service 750 750 596 (154) Other 6 6 36 30 TOTAL REVENUES 1,144 1,144 1,062 (82) EXPENDITURES: Current: Library Services 926 926 866 60 • EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 218 218 196 (22) OTHER FINANCING SOURCES(USES): Transfers Out (517) (517) (517) - EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES (299) (299) (321) (22) FUND BALANCE-BEGINNING OF YEAR 1,995 1,995 1,995 . FUND BALANCE-END OF YEAR $ 1,696 $ 1,696 $ 1,674 $ (22) 84 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 (IN THOUSANDS) Cultural Affairs REVENUES: Original Budget Final Budget Actual Variance Licenses and Permits $ 1 $ 1 $ - $ ( )) From Use of Money and Property - - 3 3 • Charges for Current Service 54 54 133 79 Other 75 75 63 (12) TOTAL REVENUES 130 130 199 69 EXPENDITURES: Current: Community Services 473 473 288 185 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (343) (343) (89) 254 OTHER FINANCING SOURCES(USES): Transfers In 56 1,977 1,977 - Capital Assets Reclassifications for Change in Fund Type - (1,743) (1,743) TOTAL OTHER FINANCING SOURCES(USES) 56 234 234 EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES (287) (109) 145 254 FUND BALANCE-BEGINNING OF YEAR 149 FUND BALANCE-END OF YEAR $ (138) $ (109) $ 145 $ 264 Park Acquisition and Development REVENUES: Original Budget Final Budget Actual Variance Licenses and Permits $ 1,700 $ 1,700 $ 1,178 $ (522) From Use of Money and Property - - 50 50 From Other Agencies 900 900 773 (127) Other 25 25 306 281 TOTAL REVENUES 2,625 2,625 2,307 (318) EXPENDITURES: Current: Community Services 522 875 249 626 Capital Outlay 1,160 1,211 31 1,180 TOTAL EXPENDITURES 1,682 2,086 280 1,806 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 943 539 2,027 1,488 OTHER FINANCING SOURCES(USES): Transfers In - 243 243 - Transfers Out - (457) (457) - TOTAL OTHER FINANCING SOURCES(USES) - (214) (214) EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES 943 325 1,813 1,488 FUND BALANCE-BEGINNING OF YEAR 940 940 940 FUND BALANCE-END OF YEAR $ 1,883 $ 1,265 $ 2,753 $ 1,488 85 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 (IN THOUSANDS) Reservoir Hill Assessment District REVENUES: Original Budget Final Budget Actual Variance • Property Taxes $ 151 $ 151 $ 196 $ 45 From Use of Money and Property - 3 3 Other 23 - 18 18 TOTAL REVENUES 174 151 217 66 EXPENDITURES: Current: Non-Departmental 20 20 16 4 Capital Outlay Debt Service: Principal 120 120 120 - Interest 32 32 32 TOTAL EXPENDITURES 172 172 168 4 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 2 (21) 49 70 FUND BALANCE-BEGINNING OF YEAR 185 185 185 • FUND BALANCE-END OF YEAR $ 187 $ 164 $ 234 $ 70 Capital Improvement • REVENUES: Original Budget Final Budget Actual Variance From Other Agencies $ 2,052 $ 2,052 $ 2,052 $ - EXPENDITURES: Current: Planning 2 2 - 2 Building 546 924 477 447 Information Systems 2,563 2,563 547 2,016 Police - 34 34 - Public Works 1,618 2,095 448 1,647 Non-Departmental 585 3,108 2,052 1,056 Capital Outlay 17,347 25,713 14,539 11,174 Debt Service: - Principal 200 200 200 - Interest 40 40 40 - TOTAL EXPENDITURES 22,901 34,679 18,337 16,342 • EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (20,849) (32,627) (16,285) 16,342 OTHER FINANCING SOURCES(USES): Transfers In 5,003 11,135 11,135 - Proceeds of Long-Term Debt 9,900 9,900 2,370 (7,530) Transfers Out - (200) (200) - TOTAL OTHER FINANCING SOURCES(USES) 14,903 20,835 13,305 (7,530) EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES (15,846) (11,792) (2,980) 8,812 FUND BALANCE-BEGINNING OF YEAR 1,232 1,232 1,232 FUND BALANCE-END OF YEAR $ (14,614) $ (10,560) $ (1,748) $ 8,812 t 86 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS . FOR THE YEAR ENDED SEPTEMBER 30,2003 (IN THOUSANDS) Pier REVENUES: Original Budget Final Budget Actual Variance • From Use of Money and Property $ 1,175 $ 1,175 $ 618 $ (557) Other 49 49 14 (35) TOTAL REVENUES 1,224 1,224 632 (592) EXPENDITURES: Current: Community Services 98 98 80 18 Public Works 75 75 17 58 TOTAL EXPENDITURES 173 173 97 76 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 1,051 1,051 535 (516) OTHER FINANCING SOURCES(USES): Transfers Out (1,276) (1,276) (1,276) - EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES (225) (225) (741) (516) FUND BALANCE-BEGINNING OF YEAR (465) (465) (465) - • FUND BALANCE-END OF YEAR $ (690) $ (690) $ (1,206) $ (516) Holly Seacliff REVENUES: Original Budget Final Budget Actual Variance From Use of Money and Property $ - $ - $ 19 $ 19 EXPENDITURES: Current: Capital Outlay - 1,132 600 532 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (1,132) (581) 551 EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES - (1,132) (581) 551 FUND BALANCE-BEGINNING OF YEAR 1,184 1,184 1,184 FUND BALANCE-END OF YEAR $ 1,184 $ 52 $ 603 $ 551 Parking in-Lieu REVENUES: Budget Actual Variance From Use of Money and Property $ - $ - $ 62 $ 62 FUND BALANCE-BEGINNING OF YEAR 471 471 471 FUND BALANCE-END OF YEAR $ 471 $ 471 $ 533 $ 87 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL • NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2003 (IN THOUSANDS) Sewer Development REVENUES: Budget Actual Variance • Licenses and Permits $ - $ 300 $ 300 From Other Agencies 100 100 95 (5) Charges for Current Service - 46 46 TOTAL REVENUES 100 100 "1 341 EXPENDITURES: Current: Public Works 50 50 204 (154) Capital Outlay 257 845 298 547 TOTAL EXPENDITURES 307 895 502 393 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (207) (795) (61) 734 OTHER FINANCING SOURCES(USES): Transfers Out (130) (130) (130) - EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES (207) (925) (191) 734 FUND BALANCE-BEGINNING OF YEAR (42) (42) (42) FUND BALANCE-END OF YEAR $ (249) $ (967) $ (233) $ • 88 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2003 (In Thousands) Public Financing Authority Original REVENUES: Budget Final Budget Actual Variance From Use of Money and Property $ 156 $ 156 $ 892 736 EXPENDITURES: Debt Service: Principal 2,335 2,335 3,155 (820) Interest 4,397 4,397 3,763 634 TOTAL EXPENDITURES 6,732 6,732 6,918 (186) • EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (6,732) (6,576) (6,026) 550 OTHER FINANCING SOURCES(USES): Transfers In 4,819 4,819 4,819 - Transfers Out (7,003) (7,003) (7,003) - TOTAL OTHER FINANCING SOURCES(USES) (2,184) (2,184) (2,184) - EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES (8,916) (8,760) (8,210) 550 FUND BALANCE-BEGINNING OF YEAR 24,296 24,295 24,295 - FUND BALANCE-END OF YEAR $ 16,379 $ 16,636 $ 16,086 $ 660 Redevelopment Agency Original . REVENUES: Budget Final Budget Actual Variance Property Taxes $ 7,009 $ 7,009 $ 9,099 $ 2,090 Other Taxes 822 822 1,492 670 From Use of Money and Property 1,075 1,074 896 (178) Other 76 76 232 156 TOTAL REVENUES 7,009 8,981 11,719 2,738 EXPENDITURES: Current: Economic Development 1,588 2,018 1,398 620 Capital Outlay 1,900 1,595 1,347 248 Debt Service: Principal 1,629 1,597 1,968 (371) Interest 1,567 2,673 2,016 657 TOTAL EXPENDITURES 6,684 7,883 6,729 1,154 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 326 1,098 4,990 3,892 OTHER FINANCING SOURCES(USES): Transfers In 1,423 23,372 24,163 (791) Reclassification of Interfund Advances - 16,018 16,018 - Proceeds of Long-Term Debt - 290 1,684 (1,394) Transfers Out (4,460) (8,260) (8,260) - TOTAL OTHER FINANCING SOURCES(USES) (3,037) 31,420 33,605 (2,185) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES (2,712) 32,518 38,595 1,707 FUND BALANCE-BEGINNING OF YEAR - (26,013) (13,030) 12,983 FUND BALANCE-END OF YEAR $ (2,712) $ 6,505 $ 26,665 $ 14,690 89 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES AND • CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2003 (In Thousands) Property Tax Refund Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ - $ - $ 62 $ 62 EXPENDITURES: Current: Non-Departmental - 19,820 19,820 - • EXCESS OF REVENUES OVER(UNDER) - EXPENDITURES (19,820) (19,768) 62 OTHER FINANCING SOURCES(USES): Proceeds from Agency Fund - 2,318 2,318 Proceeds of Long-Term Debt - 19,820 19,820 - TOTAL OTHER FINANCING SOURCES(USES) - 22,138 22,138 - EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER)EXPENDITURES AND OTHER USES - 2,318 2,380 62 FUND BALANCE-BEGINNING OF YEAR - - - FUND BALANCE-END OF YEAR $ - $ 2,318 $ 2,380 $ 62 90 1 1 1 1 1 CThi.6 intentionall le blank page � 1 1 • • Non-Major Enterprise Funds 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 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 Hazmat Service Fund accounts for user fees charged for City's hazardous material program. • The Ocean View Estates Fund accounts for the operation of the Ocean View Estates Mobile Home Park owned by the • City • • • • • 0 CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF NET ASSETS NON-MAJOR ENTERPRISE FUNDS SEPTEMBER 30, 2003 (in thousands) Emerald Cove Emergency Hazmat Cultural Ocean View ASSETS HousingFire Medical Service Affairs Fund Estates Total CURRENT ASSETS: Cash and Investments $ 2,097 $ 935 $ 326 $ $ 890 $ 4,248 General Receivables 1,400 10 4 1,414 TOTAL CURRENT ASSETS 2 097 2,335 336 894 5,662 CAPITAL ASSETS: Land 1,289 - - 2,644 3,933 Buildings 4,102 - 560 4,662 Machinery and Equipment 1,106 - 1,106 Less Accumulated Depreciation (1,477) (343) (45) (1,865) TOTAL CAPITAL ASSETS 3,914 763 3,159 7,836 TOTAL ASSETS 6,011 3,098 336 4,053 13,498 LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts Payable - 278 10 1 289 Accrued Payroll - 100 13 113 . Deposits Payable 39 39 TOTAL CURRENT LIABILITIES 39 378 23 1 441 NON-CURRENT LIABILITIES: Compensated Absences 83 21 - 104 TOTAL NON-CURRENT LIABILITIES 83 21 104 TOTAL LIABILITIES 39 461 44 1 545 NET ASSETS: Invested in Capital Assets,Net of Related Debt 3,914 763 - 3,159 7,836 Unrestricted 2,058 1,874 292 893 5,117 • TOTAL NET ASSETS $ 5,972 $ 2,637 $ 292 $ S 4,052 $ 12,953 91 CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS NON-MAJOR ENTERPRISE FUNDS SEPTEMBER 30, 2003 (in thousands) Emerald Cove Emergency lH:zmat Cultural Ocean ViewHousin Fire Medical Srvice Affairs Fund Estates Total OPERATING REVENUES: Rentals $ 714 $ - $ - $ $ 245 $ 959 Fees for Service - 4,053 223 - 4,276 Other 32 50 10 92 TOTAL OPERATING REVENUES 746 4,103 233 245 5,327 OPERATING EXPENSES: Water Production - Supplies and Operations 319 3,627 150 58 4,154 Depreciation 82 138 220 TOTAL OPERATING EXPENSES 401 3,765 150 58 4,374 • OPERATING INCOME(LOSS) 345 338 83 187 953 NON-OPERATING REVENUES(EXPENSES): Interest Income 35 23 20 78 CHANGE IN NET ASSETS BEFORE OPERATING TRANSFERS AND CAPITAL CONTRIBUTIONS 380 361 83 207 1,031 TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers In 35 - - 35 Transfers Out (383) (181) (13) (1,977) (2.554) TOTAL TRANSFERS AND CAPITAL CONTRIBUTIONS (348) (181) (13) (1,977) (2,519) TOTAL CHANGE IN NET ASSETS 32 180 70 (1,977) 207 (1,488) • NET ASSETS-BEGINNING OF YEAR 5,940 2,457 222 1,977 3,845 14,441 NET ASSETS-END OF YEAR $ 5,972 $ 2,637 $ 292 $ $ 4,052 E 12,953 • • 92 r CITY OF HUNTINGTON BEACH STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2003 (in thousands) Emerald Cove Emergency Hazmat Cultural Ocean View Housin Fire Medical Service Affairs Fund Estates Total Cash Flows from Operating Activities: Cash Received from Customers and Users $ 762 $ 4,570 $ 213 $ $ 243 $ 5,788 Cash Paid to Employees for Services - (1,553) (96) - (1,649) Cash Paid to Suppliers of Goods and Services (307) (2,136) (35) (44) (2,522) Other Operating Items 50 10 60 Net Cash Provided(Used)by Operating Activities 455 931 92 199 1,677 Cash Flows from Noncapital Financing Activities: Transfers In 35 - - 35 Transfers Out (383) (181) (13) (1,977) (2.554) Other Noncepital Financing Activities Net Cash Provided(Used)by Non Capital Financing (348) (181) (13) (1,977) (2,619) Cash Flows from Capital and Related Financing Activities: • Proceeds from sale of Plant,Property,and Equipment - - - 1,813 1,813 Principal Paid on Long-Tenn Debt (281) (281) Interest Paid on Long-Term Debt Capital Improvement Fees Net Cash Provided(Used)by Capital and Related (281) 1,813 1,532 Cash Flows from Investing Activities Cash Received from Investments 35 23 20 78 Net Increase(Decrease)in Cash and Cash Equivalents 142 492 79 (164) 219 768 Cash and Cash Equivalents-Beginning of Year 1 955 443 247 164 671 3 480 • Cash and Cash Equivalents-End of Year Reconciliation of Operating Income to Net Cash provided(used)by Operating Activities Operating Income(Loss) $ 345 $ 338 $ 83 $ $ 187 $ 953 Adjustments to Reconcile Operating Income to Net Cash Provided(Used)by Operating Activities Depreciation 82 138 - 220 • Decrease(Increase)in Accounts Receivable 16 285 (10) (4) 287 Increase(Decrease)in Accounts Payable 83 (4) 16 95 Increase(Decrease)in Accrued Payroll 52 13 - 65 Increase(Decrease)in Deposits 12 - - 12 Increase(Decrease)in Compensated Absences 35 10 45 Net Cash Provided(Used)by Operating Activities $ 455 $ 931 $ 92 $ $ 199 $ 1,677 • 93 i Internal Service Funds 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. • • CITY OF HUNTINGTON BEACH • STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET ASSETS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2003 (in thousands) workers • Medical Insurance Com nsation Total TRANSFERS IN $ 1,211 $ 6,959 $ 8,170 NET ASSETS OCTOBER 1,2002 (1,211) (6,959) (8,170) NET ASSETS SEPTEMBER 30,2003 $ . $ $ STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2003 (in thousands) Workera' Medical Insurance Com nsation Total Cash Flows from Operating Activities: Other Operating items (1,211) (6,959) (8,170) . Cash Flows from Noncapital Financing Activities: Transfers In 1,211 6,959 8,170 Net Increase in Cash and Cash Equivalents - - - Cash and Cash Equivalents,October 1,2002 Cash and Cash Equivalents,September 30,2003 $ - $ - $ Reconciliation of Operating Income to Net Cash provided(used)by Operating Activities • Operating Income(Loss) $ - $ - $ - Adjustments to Reconcile Operating income to Net Cash Provided(Used)by Operating Activities Decrease(increase)in Accounts Receivable 12 - 12 Decrease(increase)in Prepaid Insurance 115 67 182 Increase(Decrease)in Accounts Payable (24) (7) (31) Increase(Decrease)in Accrued Payroll (15) (9) (24) Increase(Decrease)in Due to Other Funds (869) (1,945) (2,814) Increase(Decrease)in Claims Payable (385) (5,065) (5,450) . Increase(Decrease)in Compensated Absences (45) (45) Net Cash Provided(Used)by Operating Activities $ (1,211) $ (6,959) • • • • 94 Fiduciary Funds Fiduciary Funds account for assets held by the City as an agent for other organizations or individuals. ■ The General Deposit Fund accounts for the deposit of general monies held by the City for private individuals and businesses. ■ The Community Facilities District accounts.for the debt service activity of the City's community facilities districts. • 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 Retiree Medical Insurance Fund accounts for the City's medical retirement program. • r CITY OF HUNTINGTON BEACH STATEMENT OF FIDUCIARY FUND NET ASSETS FIDUCIARY FUNDS SEPTEMBER 30, 2003 Agency Funds Business Central Net Community Improvement Operations Retiree Medical Total Agency Assets: General Deposit Facilities Districts District Authority Insurance Funds Cash and Investments $ 652 $ 827 $ 66 $ 1,434 $ 4,573 $ 7,552 Cash with Fiscal Agent - 2,119 - - - 2,119 Accounts Receivable,Net - 423 22 445 Total Assets $ 652 $ 3,369 $ 66 $ 1,434 $ 4,595 $ 10,116 • Liabilities: Due to Bondholders 3,369 3,369 Net Assets: Held in Trust for Pension Benefits and Other Purposes $ 652 $ - $ 66 $ 1,434 $ 4,595 6,747 95 r eap,t (711.6.6 e ts CYi e cl • to the 16P etation of Sovetnmen I (functs CITY OF HUNTINGTON BEACH CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE SEPTEMBER 30,2003 (IN THOUSANDS) CAPITAL ASSETS: Land $ 323,095 Buildings 111,614 Machinery&Equipment 51,901 Construction In Progress 11,817 Infrastructure 280,347 TOTAL INVESTMENT IN CAPITAL ASSETS $ 778,774 INVESTMENTS IN CAPITAL ASSETS FROM: • General Fund $ 158.203 Special Revenue Funds 53,493 Capital Projects Funds 30,814 Donations 536,264 TOTAL INVESTMENTS IN CAPITAL ASSETS $ 778,774 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS BY FUNCTION AND ACTIVITY FOR THE YEAR ENDED SEPTEMBER 30,2003 (IN THOUSANDS) October 1, September 30, 2002 Additions Retirements 2003 Administrative Services $ 152 $ - $ $ 152 Building 676 481 1,157 City Attorney 83 83 City Administration 902 (21) 881 City Clerk 40 - - 40 City Treasurer 198 66 (67) 197 Community Services 93,445 26,353 (318) 119,480 Economic Development 18,463 1,609 (2,414) 17,658 Fire 13,296 231 (132) 13,395 Information Systems 7,532 594 (268) 7,858 Library Services 14,471 - - 14,471 Non-Departmental 12,037 12,037 Planning 133 - - 133 Police 16,045 531 (405) 16,171 Public Works 573,185 29,003 (27,127) 575,061 TOTAL $ 750,658 $ 68,868 $ (30,752) $ 778,774 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY SEPTEMBER 30,2003 (IN THOUSANDS) Machinery& Construction In Land Buildings Equipment Progress Infrastructure Total Administrative Services $ $ $ 152 $ - $ $ 152 Building 268 889 1,157 City Attorney 83 - 83 City Administration 881 881 City Clerk 40 40 City Treasurer 197 197 Community Services 48,162 66,151 5,167 119.480 Economic Development 17,607 - 51 17,658 Fire - 5,976 7,419 13,395 Information Systems - 7,858 7,858 Library Services - 13,667 804 14,471 Non-Departmental 1,409 10,168 460 12,037 Planning - 133 - 133 Police 785 14,530 856 16,171 Public Works 255,917 15,195 13,530 10,072 280,347 575,061 TOTAL $ 323,095 $ 111,942 $ 51,573 $ 11,817 $ 280,347 $ 778,774 96 • c1tatistical clection CITY OF HUNTINGTON BEACH GOVERNMENTAL FUND EXPENDITURES BY FUNCTION AND ACTIVITY LAST TEN FISCAL YEARS (IN THOUSANDS) Administrative Community re . City Council City Administrator City Treasurer City Attomey City Clark a."= Development Planning euildl l; 1993-94 $282 $2,691 $897 $2,168 $517 $5,140 $10,406 $ $ 1994-95 224 1.672 709 1,866 485 4.200 3,252 1995-96 224 2,140 743 1,466 488 4.181 3,252 - - 1996-97 233 1.856 781 1,738 470 4,208 3.694 - 1997-98 207 1.092 805 2.340 434 3.056 3,919 - 1998-99 275 1,569 820 1,969 474 2,878 4,067 1999-2000 277 1,799 884 2,227 451 3,559 - 2,180 2,384 2000-2001 231 1,776 916 2,943 559 3,874 2.329 2,589 . 2001.2002 237 2,109 1.108 3,570 676 7,095 2.585 2,991 2002-2003 269 1,559 1.377 2.836 555 0,323 2,544 3,043 Source:Administrative Services Department-City of Huntington Beach GOVERNMENTAL FUND REVENUES BY SOURCE LAST TEN FISCAL YEARS (IN THOUSANDS) From Charges for Licenses and Fines and Use of Money Other Current Fiscal Year Property Tax Sales Taxes Utility Taxes Other Taxes Permits Forfeitures and Property Agencies Service '1993-94 $ 32,545 $ 21,364 $ 16,068 $ 8.762 $ 6,579 $ 1.894 $ 17.303 $ 25,894 $ 15.749 1994-95 25,265 17,678 12,916 7.665 5,978 2,134 11,704 19,941 9.777 1995-96 29,320 18,555 13,222 8.102 6,567 2,134 14,291 18,171 16,708 1996-97 29,341 19,512 14,059 8,632 8.121 2,707 12,971 19,810 11,191 . 1997-98 32.477 21,156 13,888 9,851 8.848 2,649 12.614 21.539 13.945 1998-99 34,345 22.699 14,936 11,122 10,527 2.744 10.913 24.753 14.071 1999-2000 37,645 26.268 15,058 10,868 8,538 4.018 14,603 32,021 15,847 2000-2001 36,860 28,082 17,045 15,096 6,902 4,092 15,812 31,634 12,150 2001-2002 33,204 23,449 18.014 13,621 7,162 3,797 13,895 28,426 15,201 2002-2003 38,983 28,011 18.310 13.337 8,045 3,815 9.923 25,103 11,986 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 DELINQUENCY DELINQUENCY TOTAL LEVY TOTAL COLLECTIONS AMOUNT PERCENT TOTALLEVY TOTAL COLLECTIONS AMOUNT PERCENT 1993-94' $ 16,612 S 15.632 S 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 2.45% 2001-2002 24,581 24.238 343 1.40% 1,419 1,366 53 3.74% 2002-2003 1 26,376 25.937 362 1.37% 1 1,467 1,343 82 5.59% RESERVOIR HILL COMMUNITY FACILITIES DISTRICTS . '1993-94 $ 180 $ 175 $ 4 2.29% E 264 $ 181 $ 83 45.86% 1994-95 187 183 4 2.19% 264 258 6 2.33% 1995-96 186 176 9 5.11% 264 239 25 10.46% 1996-97 182 179 3 1.68% 264 251 13 5.18% 1997-98 173 184 9 4.89% 264 255 9 3.53% 1998.99 194 184 9 4.89% 264 255 8 3.14% 1999-2000 184 181 3 1.63% 264 259 5 1.89% • 2000-2001 184 180 4 2.17% 264 258 5 1.89% 2001-2002 188 184 4 2.13% 264 258 6 2.27% 2002-2003 1 191 188 3 1.57% 538 538 1 0.19% Fiscal Year 1993-94 is a fifteen month fiscal year. • 97 • « V � V �pAp1 Oal �pOWp11 (OANfI J W OAl = t0 m m V N OWgI pN A pN (tpD� a W tUp W OI O V A O ONO OND N A N D fw0 m 01 V A N M N a W W N a WW WW Wp « Q r two W A S1 W N N 0 � To � Wo � � W W N W W W N W N OI O OD V N N_ O Uf � 01 W D♦ ta0 OOD W N O v m O O t0 OD V V V V m O 4f m'A V tJ tT U •� r a a Z W AI VpJO N � O tD i0� � 9 C v R' a 5 m(T Oi IppJ��N CI AI V� N 0 O W v OVi 0 V A N 2 _ ag w fJ U 00 N A f0 w w O IW�f A N U f0 W OO W OV w N 10 w V fD W OVD e n v' o A W m 0 Oi W fD N N � V N V O IWO OVD w W N OO p d yg «_ p O W OOmO V (VUT � tUNO V W t0 S' � top � � �pp � m uWW 00a0y�1� m 6 � ONO A W N f0 N � W V tNp 10 OD 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 • 1993.1994 $ 11,313,256 $ 1.964 5 11.315,220 $ 560,865 $ 11.875,885 5 11,875,885 N/A 1994.1995 11.712,163 2.151 11,714,304 599.842 12.314,148 12,314.146 3.69% 1995.19N 11,817,571 2.218 11,819.789 538,559 12.358,348 12.358,348 0.38% 1996.1997 11,761,075 2,129 11,783,204 542,084 12,305,288 12,305,288 .0.43% 1997-1998 12,338,032 2.297 12,340,329 624.469 12,964.798 12,964,798 5.36% 1998-1999 13,376.116 2,705 13,378.821 598,733 13,977.554 13,977,554 7.81% 1999.2000 14,493.635 2,383 14,496.018 636.747 15.132.765 15,132,765 8.28% 20DD-2001 15,796,157 2,745 15,798,902 674,719 16,473.621 16,473,621 8.86% 2001-2002 17,076.822 2.805 17,079.627 732,334 17,811,961 17,811,961 8.12% • 2002.2003 18,660,711 2,779 18,663.490 851,591 19,515,081 19,515.081 9.56% Source:County of Orange Auditor Controller PROPERTY TAX RATES ALL DIRECT AND OVERLAPPING GOVERNMENTS TAX RATE 04-001 LARGEST AREA IN CITY Year aasie Levy City orange County School Districts Matro Water District Others Total 1993-1994 $ 1.00000 $ 0.05320 $ 0.00081 $ 0.00227 $ 0.00890 $ 0.00019 $ 1.06537 1994-1995 1.00000 0.04930 0.00078 0.00046 0.00890 0.D0019 1.05963 1995-1996 1.00000 0.04930 0.00050 0.00033 0.00890 0.00018 1.05921 1996.1997 1.00000 0.04930 0.00012 - 0.00890 - 1.05832 1997-1998 1.000D0 0.04930 0.00010 - 0.00890 - 1.05830 1998-1999 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 2001-2002 1.00000 - - - 0.00770 - 1.00770 2002.2003 1.00000 - - 0.01232 0.00670 - 1.01902 Note-Rates are per$100 of assessed Valuation Source-County of Orange GENERAL OBLIGATION BONDED DEBT RATIOS LAST TEN FISCAL YEARS General Fund Debt Servim to General Bonded Debt Assessed Market Percent of Debt to Bonded Debt Per Total Debt Expenditures Total General Fund (0002 ) Val"bogs) Assessed Value Population Capita Principal 1000s) Interest(000a) Service(000s) (000.) Expenditures 1993.1994 $ 445 $ 11,875,885 0.004 189,159 $ 2 $ 415 $ 52 S 467 $ 115,757 0.40% 1994-1995 $ - $ 12,314,146 0.000 186,587 $ - $ 445 $ 13 $ 458 $ 92,467 0.50% 1995-1996 S $ 12.358,348 0.000 187,180 $ - S - $ - $ - $ 92,211 0.00% • 1996.1997 $ - S 12,305.288 0.000 188,518 $ - S - s - $ - $ 96,165 0.00% 1997.1998 $ - $ 12,964.798 0.000 192,430 S - $ - $ $ - $ 103,875 0.00% 1998-1999 $ - $ 13,977,654 0.000 196.660 $ - $ $ - $ - $ 103,050 0.00% 1999.2000 $ - $ 15,132.765 0.000 199,327 $ - $ - $ $ - $ 117,863 0.00% 2000-2001 $ - $ 16,473.621 0.000 191.500 $ - $ $ - $ - $ 122,139 0.00% 2001-2002 $ - $ 17,811.961 0.000 194,600 $ - $ - $ - $ - $ 130.326 0.00% 2002-2003 $ - $ 19,515,081 0.000 196,954 $ - $ - $ - $ - $ 124.551 100.00% Source-Administrative Services Department,City of Huntington Beach • • 99 • CITY OF HUNTINGTON BEACH CONSTRUCTION ACTIVITY AND BANK AND SAVINGS AND LOAN DEPOSITS LAST TEN FISCALYEARS Number of Estimated Value of Banks and Savings Building Percent New Construction and Loan Deposits Permits Change (OOOs) Percent Change (OOOS) Percent Change 1993-1994 6,844 n/a $ 107,420 n/a $ 2,141.528 We 1994-1995 4,471 (34.7) $ 84,388 (21.44) $ 2,579,514 20.5 1995-1996 7,594 69.9 $ 110,375 30.79 $ 2.581,844 0.1 1996-1997 5,413 (28.7) $ 205,970 86.61 $ 2,737.588 6.0 • 1997-1998 6,368 17.6 $ 206,035 0.03 $ 2,684.384 (1.9) 1998-1999 6,735 5.8 $ 308,319 49.64 $ 2,911,437 8.5 1999-2000 5,474 (18.7) $ 207,509 (32.70) $ 3.019.180 3.7 2000-2001 5.106 (6.7) $ 153,279 (26.13) $ 3,370,986 11.7 2001-2002 5,429 6.3 $ 190,873 24.53 $ 3.598,628 2002-2DO3 5.540 2.0 $ 123,474 (35.31) $ 4,088,726 Source-Building Department,City of Huntington Beach and the Findley Reports on California Institutions COMPUTATION OF LEGAL DEBT MARGIN September 30, 2003 (IN THOUSANDS) ASSESSED VALUATION $ 19,515.081 DEBT LIMIT:12%OF ASSESSED VALUATION 2,341.810 DEBT APPLICABLE TO LIMITATION: • LEGAL DEBT MARGIN $ 2,341,810 Source-Administrative Services Department,City of Huntington Beach STATEMENT OF DIRECT AND OVERLAPPING BONDED DEBT SEPTEMBER 30, 2003 2002-2003 Assessed Valuation$18,029,103.868(after deducting$742++9,5727)of incremental redevelopment valuation) • OVERLAPPING TAX AND ASSESSMENT DEBT %Applicable 001 U30103 O.C.Teeter Plan Obligations 7.421% $ 9,223.579 Metropolitan Water District 1.592% 7,073,176 Coast Community College District 31.132% 34.245,200 Huntington Beach City School District 97.651% 29.177,105 Los Alamitos Unified School District Community Facilities District 1.244% 147,912 City of Huntington Beach Comm Fac.Dist No 1990-1 100.000% 2,070,000 City of Huntington Beach Comm Fac.Dist No 2000-01 100.000% 16,000,000 • City of Huntington Beach Comm Fac.Dist No 2002-01 100.000% 4,900,0DO City of Huntington Beach 1915 Act Bonds 100.000% 295,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 103.131,972 DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT O.C.General Fund Obligations 7.421% 70,345.440 O.C.Pension Obligations 7.421% 8.665,687 O.C.Board of Education Certificates of Participation 7.421% 1,482,716 • O.C.Transit Authority 7A21% 366,597 MWD of Orange County Water Facilities Corp 8.992% 3,751.013 O.C.Sanitation District COPS 99.953% 15,124,363 Coast Community College District 31.132% 2,527,918 Los Alamitos Unified School District COPS 1.328% 142,301 Htg Beach Union High School District COPS 95,854% 4,413,825 Ocean View School District COPS 94.095% 9,576,728 City of Huntington Beach General Fund Obligations 81,745.813 TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 198,142.401 Less: OC Transit Authority(80%self supporting) (293,278) MWDOC Water Facilities Corporation(100%Self Supporting) (3.751,013) TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 194,098,110 GROSS COMBINED DEBT - $ 301.254.373 NET COMBINED TOTAL DEBT $ 297,230.082 Excludes Tax and Revenue Anticipation Notes,revenue,mortgage revenue and tax allocation bonds, and non-bonded capital lease obligations • Ratios to Assessed Valuation: Total Overlapping Tax and Assessment Debt 0.55% Combined Direct Debt($81,745,813) 0.45% Gross Combined Total Debt 1.67% Net Combined Total Debt 1.65% State School Building Aid Repayable as of 9/30/03$4,835,479 Source-California Municipal Statistics 100 CITY OF HUNTINGTON BEACH DEMOGRAPHIC STATISTICS City Population as a Percent of Square Orange County County Year Population Percent Increase Miles Population Population • 1910 815 3.57 34,436 1920 1,687 107.0% 3.57 61,375 2.75% 1930 3,690 118.7% 3.57 62,451 5.91% 1940 3,738 1.3% 3.57 130,760 2,86% 1950 5.158 38.0% 4.72 216,224 2,39% 1960 11,492 122.8% 23.47 703.995 1.63% 1970 116,400 912.9% 26.73 1,420,386 8.19% 1980 172,200 47.9% 27.20 1,931,570 8.92% 1990 188,701 9.6% 27.20 2,362,211 7.99% • 1995 186,587 -1.1% 27.20 2,627,949 7.10% 2000 199,326 6.8% 27.20 2,828,400 7.05% 2001 191,500 -3.9% 27.20 2,846,289 6.73% 2002 194,600 1.6% 27.20 2,939,500 6.62% 2003 196,954 1.2% 27.20 2,978,816 6.61% Source-Administrative Services Department,City of Huntington Beach TOP TEN PROPERTY TAX PAYERS • SEPTEMBER 30, 2003 Percent of Estimated Tax Assessed Valuation 000s Taal 000s Percent of Total Mayer Financial Limited Partnership $ 110,777 0.62% $ 592 1.52% McDonnel Douglas Corporation 397,367 2.23% 509 1.31% AES Huntington Beach LLC 327.249 1.84% 381 0.98% Huntington Center 53,516 0.30% 348 0.89% Waterfront Construction 1 A California LP 37,596 0.21% 299 0.77% Mullrock Mortgage LLC 41,900 0.24% 268 0.69% Essex Huntington Breakers 28,967 0.16% 218 0.56% Atlanta Huntington Beach LLC 21,854 0.12% 211 0.54% Pierside 24,053 0.14% 177 0.45% Liu Corporation 18,470 0.10% 131 0.34% Total Top Ten 1.061,749 5.96% 3,134 8.04% All Other Properties 16,750,212 94.04% 35.849 91.96% • Total $ 17,811,961 100.00%1$ 38.983 100.00% Source-HDL Coren,Cone The estimated total tax includes only the portion of the total tapaid to the City's reporting entity.Properties in different tax areas or in a redevelopment agency project area pay a different percentage of tax to the City's reporting entity. MISCELLANEOUS STATISTICS SEPTEMBER 30, 2003 • Year of Incorporation 1909 Charter City-City Council-City Form of Government Administrator Area 27.2 Square Miles Population 196,954 Miles of Streets and Alleys 463 Number of City Trees 54,563 Fire Protection: • Number of Stations 8 Number of Firefighters 131 Police Protection: Number of Stations 4 Number of Sworn Police Officers 220 Municipal Water Department: Number of Customers 52,000 Average Daily Consumption Total 28.6 Million Gallons Average Daily Consumption Per Person 138 • Miles of Water Mains 522 Public Works: Sanitary Sewers 352 Miles Storm Sewers 136 Miles Recreation and Culture: Number of Parks 57 Park Acreage Developed 529 Miles of Beach 3.4 • Annual Beach Visitors 7,000,000 Number of Libraries 4 Volumes in Libraries 370,945 Full-Time Employees 1,051 Source-Administrative Services Department,City of Huntington Beach 101 • � x �` q �s,:,.r " ��.°, i'�"'�' K.� �. ��" �ft�i; .��� ,.. �,r;�:i ���,'�.�a:'�,�y�,}Fly`,�'fY rd f f�,, �°. �''�; ,.:. � M�. r` �€ t6�i aw�� r,"� `,�; w � "'y ;s�;z�+ •t= � � di, , ;r � �r.S 7u�. „1K, .,.� :�� p��• raY ,a7, s �r ;G�,: at t } '.as' ',. �'t; �, �,�, ,� '�`�y , :;'% ,r%�, �.. .w E " ;,.{;ti., ,`1 E`S, •��," r � t �'�' r�'se'z�,i.., (; '�'`� ' �'� s,�m r` �x✓ ��r �y � 3 f^ r� .� t`�:, r�.; ��. &�',:, ���f,. s�.^"at n'f` ,�'W;; �....,, F :q,,e„;.� A`.�;lxr� a 2'? E r ca�,a,f„L' r,;"i;.r �.,,�"^ :r� rw&M�� ,e:'�LtA � +*; .,.�,�.., f, ;"� q,fi�Rp� �U ,�r4G`, a. �� T e�,.�,.. ,�a �.Y ESA �,, ��''„ ''� 4' °a', + .z :, "�� �� s,i� m ,�.. r'a •�'^+ �. h.�.�d rlt '� �� *:C.�'. ��;'"' '�� �>,��m.a:�.� �. �,.f; .�a, �einw� .x � �,��,�„ �� � �, y3,,, �"`w,L`,, ,r< e,� ;k� r f� � � ' ;w,. '� �d' .� �' �� �z� w f �^+�s �,a a '� s s: ��e+ r n'4 � �'� ,R ks �d� �: �,a,pr. �a�s �4� Y C n n.� x �:� ii�` � §'��'�� a#��� '� ,�,#¢ fix: �s � , h^ r� Yz-(W S a? fi „ L�� �:,. €� �k ��. ���,Fab ✓a,,'b� '� ,.f�, �^ u 2,� 2� ;s,�, ® �,�) 'Sr'�kµ a �.' �„ � .�J.� �' �t t t,' R :,w n?I �� �:.; ��x '�'� R` ,s{',. S ;a r t �U lb3 un ei. :v S iy ADMINISTRATIVE SERVICES HunGn t INTERDEPARTMENTAL COMMUNICATION TO: Honorable Mayor and City Council VIA: Ray Silver, City Administrator FROM: Clay Martin, Director of Administrative Services SUBJECT: Fiscal Year 2001/2002 Comprehensive Annual Financial Report DATE: April 1, 2003 Attached is the Fiscal Year 2001/2002 Comprehensive Annual Financial Report (CAFR). This document represents an independent auditor's review of the city's financial statements as required by State Law and the City Charter. The auditor, Caporicci and Larson, CPAs, has given the city an unqualified or "clean" opinion. This is the highest possible mark that the city can receive from an independent auditor. The city has filed copies of the CAFR with the Government Finance Officers' Association for a Certificate of Achievement in Financial Reporting. An overview of the CAFR will be provided at the April 7, 2003 City Council Study Session. If you would like a detailed review of the CAFR I would be happy to sit down with you and review the report. If you have any questions or comments please feel free to call me at (714) 536-5236. o c o � cc: Finance Board a =' Department Heads Finance Staff y Overview • What is the CAFR • Key Discussion Points Regarding the CAFR • Key Points Not Discussed in the CAFR • Conclusion S 6tv Hmti What is the CAFR • Each year California State Law and City Charter require that the city's financial statements be audited. • The audit checks to ensure that the city is following generally accepted accounting principals (GAAP) as determined by the Governmental Accounting Standards Board (GASB). • The audit is preformed by an independent auditor, this year Caporicci and Larson. CPAs S . ::pry Hm Key Discussion Points regarding the CAFR • The city received an "unpualifled " or clean opinion which is the highest possible mark. • The staff will be submitting the CAFR to the Government Finance Officers Association (GFOA) for a certificate of achievement for excellence in financial reporting. • The city has received the certificate each year since 1986. S # sty ;; 4 KeyDiscussion Points regarding the • Total city assets — The city's total assets exceeded liabilities by $629.90 million of which $ 12.75 million is unrestricted net assets. — City assets include: • Cash and Investments • Receivables • City Building including the Center Civic, Community Centers and Libraries • Streets and Other Infrastructure — City liabilities include: • Accounts Payable • Accrued Salaries S 'tV • Claims Payable • Deposits 5 Hund 9 Long-Term Debt (bonds and other debt) Key Discussion Points regarding the CAFR • Long Term Obligations — The city' s long-term debt obligation increased by $ 13 .68 million. — The increase in long-term obligations is largely due to the Howard Jarvis lawsuit. S , .pry 6 Key Discussion Points regarding the CAFR • Revenue — Program revenue decreased by $29.9 million largely because in the prior year all the infrastructure of the Sewer Fund was recorded as program revenue. — Tax revenue increased $7. 1 million — General revenue decreased $5.0 million S . . ;ry Key Points Not Discussed in the CAFR • The auditor can issue a management letter to discuss necessary (required) improvement to the financial statements. • The auditor did not issue a management letter last year. • The only management letter comment regards Utiligy. • Staff received a draft of a management letter on Thursday, April 29, 2004 and has s r,ry not had time to thoroughly review the letter. 8 y E P CITY OF HUPII N B CPi. CA 2004 MAY -3 P 2: 2 b s lit_ 1 Fiscal Year 2002/2003 e � Comprehensive Annual Huntu► each® • • -s Financial Report (CAFR Clay Martin, Director of Administrative Services Dan Villella, Finance Officer May 3, 2004 - City Council Study Session Conclusion • The auditors opinion of the financial statements is unqualified. • Staff is addressing all issues raised by the auditor and will return to City Council on May 17th with the staff response. • The city ended fiscal year 2002/2003 with an unreserved fund balance of $ 12.22 million in the General Fund which includes the Equipment Replacement reserve. • Staff has submitted the CAFR for to GFOA for review. s ,pry Hmd CITY OF HUNTINGTON BEACH , CALIFORNIA S f it Y Hunti each o COMPREHENSIVE ANNUAL �- FINANCIAL REPORT � == for the Year Ending September 30, 2002 Cl T y G.O u NGiL �E�' i V �.� i A/ ., �.�tJrf aIGE .. _�s. � - a-�✓ .�.� �asr=y :. /L1s�-;het/ a�, �00� — �uDeD B`� Asfn.n S62u<o5 CITY OF HUNTINGTON BEACH , CALIFORNIA S f it Y Hunti each ,,,,, 17103 COMPREHENSIVE ANNUAL- FINANCIAL REPORT � for the Year Ending September 30, 2002 CITY PF HUNTINGTON BEACH COMPREHENSIVE ANNUAL FINANCIAL REPORT WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR ENDED SEPTEMBER 301 2002 Prepared by Administrative Services Department COMPREHENSIVE . ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2002 TABLE OF CONTENTS INTRODUCTORY SECTION Table of Contents i-ii Letter of Transmittal iii-vi City Officials vii Organizational Chart viii Financial Reporting Certificate ix FINANCIAL SECTION Independent Auditors' Report 1-2 Mana emPnt Discussion and Analysis 3-16 Basic Fina icial Statements: Government-wide Financial Statements: Statement of Net Assets 17 Statement of Activities and Changes in Net Assets 18 Fund Financial Statements: Balance Sheet—Governmental Funds 19 Reconciliation of the Balance of Governmental Funds to the Statement of Net Assets 20 Statement of Revenues, Expenditures and Changes in Fund Balances— Governmental Funds 21 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 22 Statement of Net Assets—Proprietary Funds 23 Statement of Revenues, Expenses and Changes in Fund Net Assets— Proprietary Funds 24 Statement of Cash Flows—Proprietary Funds 25 Statement of Fiduciary Fund Net Assets 26 Statement of Changes in Fiduciary Fund Net Assets-Trust Funds 26 Notes to Financial Statements 27-78 Required Supplementary Information: Budgetary Information 79 Schedule of Revenues, Expenditures and and Changes in Fund Balances— 80 Budget and Actual—General Fund Schedule of Revenues, Expenditures and and Changes in Fund Balances— Bud et and Actual—Public Financing Authority Debt Service Fund 81 Schedule of Revenues, Expenditures and and Changes in Fund Balances— Bud et and Actual—Redevelopment Agency Debt Service Fund 81 i s Schedule of Revenues, Expenditures and and Changes in Fund Balances— Bud et and Actual—Redevelopment Agency Capital Projects Fund 82 Schedule of Revenues, Expenditures and and Changes in Fund Balances— Bud et and Actual—Capital Improvement Fund 82 Schedule of Revenues, Expenditures and and Changes in Fund Balances— 83 Budget and Actual—Public Financing Authority Capital Projects Fund Schedule of Funding Progress Normal and Supplemental Retirement Plans 84 Supplementary Information: Combining and Individual Fund Statements and Schedules: Combining Balance Sheet—Nonmajor Governmental Funds 85-88 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances— Nonmajor Governmental Funds 89-92 Schedule of Revenues, Expenditures, and Changes in Fund Balances— Bud et and Actual—Non Major Governmental Funds 93-100 Combining Statement of Net Assets— Nonma'or Enterprise Funds 101 Combining Statement of Revenues, Expenses, and Changes in Net Assets- Nonmajor Enterprise Funds 102 Combining Statement of Cash Flows—Nonmajor Enterprise Funds 103 Combining Statement of Net Assets— Internal Service Funds 104 Combining Statement of Revenues, Expenses, and Changes in Net Assets- Nonmajor Internal Service Funds 104 Combining Statement of Cash Flows—Nonmajor Internal Service Funds 104 Capital Assets Used in the Operation of Governmental Funds: Schedule by Source 105 Schedule by Function and Activity 105 Schedule of Changes by Function and Activity 105 Statistical Section (Unaudited) General Governmental Expenditures by Function and Activity—Last Ten Fiscal Years 106-107 General Governmental Revenues by Function and Activity—Last Ten Fiscal Years 106-107 Property Tax Levies and Collections— Last Ten Fiscal Years 106-107 Assessed and Actual Valuations of Property— Last Ten Fiscal Years 108 Property Tax Rates—All Direct and Overlapping Governments 108 General Obligation Bonded Debt Ratios—All Overlapping Governments 108 Construction Activity and Bank and Savings and Loan Activity— Last Ten Fiscal Years 109 Computation of Legal Debt Margin 109 Statement of Direct and Overlapping Bonded Debt 109 Demographic Statistics 110 Top Ten Secured Property Owners 110 Miscellaneous Statistics 110 ii S ity Hwtm n ch March 31, 2003 Honorable Mayor, City Councilmembers and Citizens of Huntington Beach: This letter transmits the Comprehensive Annual Financial Report for the City of Huntington Beach, California for the year ending September 30, 2002. The intent of this report is to provide a firm understanding of the City's financial position. The Administrative Services Department is responsible for the accuracy of the information. - - Management has established an internal control system that provides reasonable, but not absolute assurance that these financial statements do not ,=� have material misstatements. This system allows " _ for the presentation of financial statements that comply with generally accepted accounting Huntington Beach Municipal Pier principles. An important part of this system is that the cost of any control should not exceed its expected benefit. We believe that this financial report is complete and reliable in all material respects. The financial statements comply with the standards of the Government Accounting Standards Board and include the report of our auditors, Caporicci and Larsen. This year the City implemented Government Accounting Standards Board Statement No. 34 which has significantly modified the statements and disclosures of this report. See note 1 of the Notes to the Basic Financial Statements for further information. The independent audit of these financial statements was part of a broader, federally mandated "Single Audit" designed for the Federal Government. This single audit requires the auditor to not only report on the fair presentation of the City's financial statements, but also on internal controls and compliance with legal requirements. This report is available from the Finance Division of the Administrative Services Department. This year for the first time an additional narrative introduction and overview is required to accompany the City's basic financial statements (Management Discussion and Analysis). This letter complements the Management Discussion and Analysis and �J iii 1 � About the City of Huntington Beach Huntington Beach was incorporated in 1909 and is a full-service City including Police, Fire, Public Works, Community and Library Services, Economic Development, Planning, Building, and related Administration. It is located in the southwest portion of Orange County approximately 37 miles Tfi south of Los Angeles. �' ss :g,t-` Qf = This report includes the financial _ -- . activity of separate legal entities whose activities the City controls. Hyatt Regency Huntington Beach Re-sort&Spa These entities are: within the Main Pier Sub-Area Redevelopment Project Area • Redevelopment Agency of the City of Huntington Beach • Huntington Beach Public Financing Authority • Huntington Beach Civic Improvement Corporation • Various community facilities districts • Reservoir Hill Assessment District • Huntington Beach Auto Business Improve nent District ist ( , Component unit reports (stand-alone reports) are available for the Redevelopment Agency and Public • Financing Authority. Auto Business Improvement District The City Council adopts the annual budget by assists with the September 30th of a prior fiscal year and may amend it Beach Blvd of Cars campaign 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 orders, or contracts, for goods or services not completed or received. The City reports these as reservations of fund balance in governmental funds. Local Economy: The City is located in Orange County, California. Despite the slower than desired economic growth nationwide, Orange County remains one of the economic leaders of the nation in jobs and economic potential. Huntington Beach is the third largest City in Orange County with a population of just under 200,000. ►v Future Priorities: • Maintain a healthy and safe community r- : .: • Establish a sound financial foundation for the City's finances. • Assure the long-term adequacy of the City's infrastructure, facilities, and 4 transportation network. • Achieve development that maintains and improves the city's fiscal viability and reflects economic demands while maintaining and improving quality of life for current and future residents. L • Maintain and continually improve organizational effectiveness. • Build and maintain a sense of place Tlee old Huntington Center and an exceptional quality of life within will be reborn as Bella Terra a sustainable urban environment. • Ensure that Huntington Beach's local government is open, accessible, responsive, nurturing, and respectful to all the citizens it serves. • Enhance the community's environmental quality and its unique natural resources. Maior Capital Projects: • The Huntington Beach Sports Complex • Major improvements to the South Beach • Completion of the Beach Maintenance Facility • Completed rehabilitation of 37 miles of deteriorated sewer pipes PENSION OBLIGATIONS: The City participates in the California Public Employee's Retirement System. The City also maintains a supplemental retirement plan. Information on these pensions can be found in notes 6 and 7 to the financial statements. CASH MANAGEMENT: The City Treasurer invests surplus cash in authorized investments allowed by the government code and City policy. The City forecasts revenues and expenditures to meet current obligations and to maximize interest income. The City Treasurer earned a return of 4.4% for the year. 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. V RISK MANAGEMENT: The City is self-insured for liability, workersrtc� compensation and employee health claims. _st , 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 workers' w compensation and employee health claims ` r over a certain amount. FINANCIAL REPORTING CERTIFICATES: Huntington Beach Pier Plaza 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, 2001 report. The GFOA awards the certificate to governmental agencies whose reports conform with high standards of public financial reporting. The City has received this certificate for 16 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 responsibility conducting the fiscal affairs of Huntington Beach. We would also like to thank Robert Sedlak, Principal Accountant, who prepared this report. Clay rtin Dan T. Villella Director of Administrative Services Finance Officer vi CITY OF HUNTINGTON BEACH PRINCIPAL CITY OFFICALS City Council Connie Boardman, Mayor Cathy Green, Mayor Pro-Tem Gil Coerper, Councilmember Debbie Cook, Councilmember Jill Hardy, Councilmember Pam Houchen, Councilmember Dave Sullivan, Councilmember Other Elected Officials Connie Brockway, City Clerk Jennifer McGrath, City Attorney Shari Freidenrich, City Treasurer Administrative Officials Ray Silver, City Administrator William P. Workman, Assistant City.Administrator Robert Beardsley, Director of Public Works David Biggs, Director of Economic Development Ross Cranmer, Director of Building & Safety Jim Engle, Director of Community Services Ron Hayden, Director of Library Services Janis Ingles, Director of Information Services Clay Martin, Director of Administrative Services Duane Olsen, Acting Fire Chief Kenneth Small, Police Chief Howard Zelefsky, Director of Planning Vii CITY OF HUNTINGTON BEACH THE PEOPLE CITY CLERK CITY COUNCIL CITY CITY Mayor TREASURER ATTORNEY Records Division Mayor Pro Investments Elections Council Members Business License Passport Services - Accounts Receivable CITY ADMINISTRATOR Municipal Services ORGANIZATIO ADMINISTRATIVE COMMUNICATIONS& Billing -] Central Cashiering EFFECTIVENESS SERVICES SPECIAL PROJECTS Finance ASSISTANT CITY m y ADMINISTRATOR p .Risk Management s _ ' } r Central Servitas i a. F ~ Human Resources Real Estate Services Employee Services s PLANNING BUILDING&SAFETY ECONOMIC DEVELOPMENT PUBLIC WORKS. COMMUNITY SERVICES - LIBRARY SERVICES . FIRE POLICE Current Planning Permit& Redevelopment 8 Engineering Beaches,Recreation Operations Fire Prevention Uniform Division Plan Check Services Housing &Faci ities Development Advanced Plarmin Water Reference Operations Administration Division Inspection Services Business Development Human Services& Code Enforcement Park Tree&Landscape Recreation Childrens 1 Media Emergency Services investigation Division Historic Cultural, P Trans ortation Technical Services Telecommunicahons S ecial alone P &Event Services Information Syatema Drvisbn Maintenance M July 2 P 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, 2001 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. ED TH nIDTATES UM W s President v�SQL anti a¢►co Executive Director -ix- Financial Section C&L Caporicci&Larson Certified Public Accountants INDEPENDENT AUDITORS'REPORT To the Honorable Mayor and Members of City Council of the City of Huntington Beach Huntington Beach,California We have audited the accompanying financial statements of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund information of the City of Huntington Beach, California (City), as of and for the year ended September 30, 2002,which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in the United States 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 financial statements are free of material misstatement. An audit includes examining, o11 a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the basic financial statements referred to above present fairly,in all material respects,the respective financial position of the governmental activities,the business-type activities, each major fund, and the aggregate remaining fund information of the City as of September 30, 2002, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with generally accepted accounting principles in the United States. As described in Note 1 to the basic financial statements, the City adopted Statements of the Governmental Accounting Standards Board No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments; No. 37, Basic Financial Statements - and Management's Discussion and Analysis -for State and Local Governments: Omnibus; and, No. 38, Certain Financial Statement Note Disclosures. In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2002 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Toll Free Ph:(877)862-2200 Toll Free Fax:(866)436-0927 Oakland Orange County Sacramento San Diego 180 Grand Ave.,Suite 1365 3184-D Airway Avenue 777 Campus Commons Rd.,Suite 200 600"B"Street,Suite 1900 Oakland,California 94612 Costa Mesa,California 92626 Sacramento,California 95825 San Diego,California 92101 . a To the Honorable Mayor and Members of City Council of the City of Huntington Beach Huntington Beach,California The accompanying Required Supplementary Information, such as management's discussion and analysis, budgetary comparison information and other information as listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquires of management regarding the methods of measurement and presentation of the Required Supplementary Information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying supplementary information is presented for purpose of additional analysis and is not a required part of the basic financial statements. The supplementary information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The Introductory Section and Statistical Tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and,accordingly,we express no opinion on them. em Costa Mesa,California December 20,2002 2 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 S ity Hun' As management of the City of Huntington Beach, we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City of Huntington Beach for the fiscal year ended September 30, 2002. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages iii-vi of this report. Financial Highlights This is the first year that government-wide financial statements have been prepared. Prior year comparative statements were not prepared so no comparisons have been made. Next year full comparisons will be made. • The total assets of the City of Huntington Beach exceeded its liabilities at the close of the most recent fiscal year by $607,633,000. Of this amount, $12,761,000 may be used to meet the City's ongoing obligations to citizens and creditors. • The City's total debt increased by $9,554,000 to $168,673,000 largely as a result of the issuance of new leases and additional Redevelopment Agency operative agreements. Overview Of The Financial Statements: This discussion and analysis are intended to serve as an introduction to the City of Huntington Beach basic financial statements. The City of Huntington Beach's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains certain other supplementary information in addition to the basic financial statements themselves. 3 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the City's financial condition and are prepared similarly to those in the private sector. The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, continued increases or decreases in net assets may indicate whether the City's financial condition is improving or deteriorating. The statement of activities presents information on how the City's net assets changed during the most recent fiscal year. These changes are reported on the accrual basis (when the economic event occurs), not when the cash is received or paid. The government-wide financial statements separate functions that are primarily supported by taxes and intergovernmental revenues (governmental activities) from functions that are supported by user fees (business activities). Governmental activities include public safety, public works, general government, and community-related activities. Business activities include the Water, Sewer, Refuse, FireMed, Hazmat Service, Ocean View Estates, and Art Center activities. The government-wide financial statements include the City and all of its component units that are legally separate but whose activities entirely support the City of Huntington Beach. These entities are, the Redevelopment Agency of the City of Huntington Beach, the Huntington Beach Public Financing Authority, the Huntington Beach Civic Improvement Corporation, and various assessment districts described in Note 2 to the financial statements. The government-wide financial statements can be found on pages 17-18 of this report. Fund Financial Statements. The City separates financial activities into funds to maintain control over resources that have been legally separated. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for the same functions reported in governmental activities in the government-wide financial statements. However, the focus in the governmental fund section of these financial statements is on near-term inflows and outflows of spendable resources as well as on balance of spendable resources available at the end of the fiscal year. 4 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 It is useful to compare information presented for the governmental funds to information presented for governmental activities in the government-wide financial statements. A reconciliation shows the reader the differences in financial reporting between the governmental activities section and the governmental funds section. The City maintains twenty-seven individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenue, expenditures, and changes in fund balances for the general fund, Redevelopment Agency Debt Service, Redevelopment Agency Capital Projects, Huntington Beach Public Financing Authority Debt Service Fund, Huntington Beach Public Financing Authority Capital Projects Fund, and Capital Improvement Fund, all of which are considered to be major funds. Data from the other twenty-one funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in a combining statement else where in this report. The City provides an annual appropriated budget for its governmental funds. Budgetary comparison schedules on page 80-83, and 93-100 demonstrate compliance. The basic governmental fund financial statements can be found on pages 19-22 of this report. Proprietary Funds. The City maintains two types of proprietary funds (enterprise and internal service). Enterprise funds are used to account for the same activities as the business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Water, Sewer, Refuse, FireMed, Hazmat Service, Ocean View Estates, and Art Center activities. Internal service funds are an accounting device used to accumulate and allocate costs among the various City departments. The City uses these funds to account for its employee health and workers compensation insurance programs. Since these programs primarily benefit governmental operations they have been included within the governmental activities section of the government- wide financial statements. 5 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statement provides information for Water operations, which is considered to be major funds of the City. The remaining proprietary funds noted above are combined into a single, aggregated presentation. All internal service funds are also combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the nonmajor proprietary funds and the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 23-25 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City of Huntington Beach's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds The basic fiduciary fund financial statements can be found on page 26 of this report. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government- wide and fund financial statements. The notes to the financial statements can be found on pages 27-78 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also present certain required supplementary information concerning the City's progress in funding its obligation to provide pension benefits to its employees and General Fund budget to actual comparisons. Required supplementary information can be found on pages 79-84 of this report. The combining statements referred to earlier in connection with nonmajor government funds and internal service funds are presented immediately following the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on page 85-105 of this report. 6 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 Government-wide Financial Analysis As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. This is the City's first year of implementing the new reporting model and prior year amounts were not prepared. Thus, no comparison is available this year. In subsequent years, however, comparisons will be prepared. Below is a summary schedule of the City's net assets at September 30, 2002 (in thousands): Governmental Business Activities Activities Total Current and Other Assets $ 113,185 $ 61,888 $ 175,073 Capital Assets 565,017 80,376 645,393 Total Assets 678,202 142,264 820,466 Current Liabilities 35,957 7,118 43,075 Long-Term Liabilities 168,672 1,086 169,758 Total Liabilities 204,629 8,204 212,833 Net Assets: Invested in Capital Assets, Net of Related Debt 425,697 79,781 505,478 Restricted 58,351 31,043 89,394 Unrestricted (10,475) 23,236 12,761 Total Net Assets $ 473,573 $ 134,060 $ 607,633 By far the largest portion of the City's net assets ($505,478,000 or 83.9% of the total net assets) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding. The City uses capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net assets ($89,394,000 or 14.7% of the total net assets) is subject to external restrictions. The remaining amount of$12,761,000 or 2.1% of total net assets is unrestricted. 7 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 The unrestricted assets for governmental activities was a negative $10,475,000. This was caused primarily from the activities of the Redevelopment Agency, which is a blended component unit of the City. The Agency exists to finance improvements that remediate blight within the City. The Statement of Net Assets reflects the debt obligation of the Redevelopment Agency, that will be repaid through future tax revenues, without an offsetting asset. This is typical of Redevelopment Agencies in California. The City's net assets from business activities increased by $37,751,000, or 39.1%. The largest reasons for this increase were developer contributions of infrastructure of $26,090,000 and capital contributions for the Water Master Plan of$6,886,000. A condensed summary of activities (in thousands) follows: Governmental Business Activities Activities Total Revenues: Program Revenues: Charges for Current Services $ 23,556 $ 45,106 $ 68,662 Operating Grants and Contributions 5,063 - 5,063 Capital Grants and Contributions 13,039 33,056 46,095 General Revenues: - Property Taxes 38,106 - 38,106 Other Taxes 55,084 - 55,084 Use of Money and Property 13,895 2,240 16,135 From Other Agencies 20,359 - 20,359 Other 2,604 - 2,604 Total Revenues 171,706 80,402 252,107 8 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 City Council 262 - 262 City Administrator 2,214 - 2,214 City Treasurer 1,160 - 1,160 City Attorney 3,634 - 3,634 City Clerk 698 - 698 Administrative Services 7,230 - 7,230 Planning 2,658 - 2,658 Building 3,101 - 3,101 Fire 19,361 - 19,361 Information Systems 4,464 - 4,464 Police 42,187 - 42,187 Economic Development 3,080 - 3,080 Community Services 12,440 - 12,440 Library Services 4,801 - 4,801 Public Works 28,237 - 28,237 Non-Departmental 19,725 - 19,725 Interest on Long-Term Debt 9,438 - 9,438 Water Utility - 27,250 27,250 Emerald Cove Housing - 405 405 Emergency Fire Medical - 3,172 3,172 Refuse Collection - 9,178 9,178 Sewer - 2,419 2,419 Hazmat Service - 143 143 Cultural Affairs - 317 317 Ocean View Estates - 11 11 Total Expenses 164,690 42,895 207,585 Increase in Net Assets Before Transfers 7,015 37,507 44,522 Transfers (244) 244 - Net Assets -Beginning of Year(as Restated) 466,802 96,309 563,111 Net Assets -End of Year $ 473,573 $ 134,060 $ 607,633 Since no prior year comparable financial statements were prepared, no trend information is presented. This information will be made available in next year's report. 9 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 The cost of all governmental activities this year was $164,690,000. However, as shown in the Statement of Activities, the amount that the taxpayers ultimately financed for these activities was only $123,032,000 because some of the cost was paid by those who directly benefited from the programs ($23,556,000), or by other governments and organizations that subsidized certain programs with operating grants and contributions ($5,063,000), and capital grants and contributions ($13,039,000). Overall, the City's governmental program revenues were $41,658,000. The City paid for the remaining "public benefit" portion of governmental activities with $129,803,000 in taxes and general revenue (some of which could only be used for certain programs) and with other revenues, such as interest and general entitlements. Total resources available during the year to finance governmental operations were $633,256,000, consisting of net assets at October 1, 2001 of $466,802,000, program revenues of $41,658,000, general revenues of $130,048,000, and transfers of $244,000. Total expenses for governmental activities during the year were $164,690,000; thus, net assets were increased by $6,771,000, to $476,573,000. The cost of all Proprietary (Business Type) activities this year was $42,895,000. As shown in the Statement of Activities and Changes in Net Assets, the amount paid by users of the systems was $45,106,000, capital grants and contributions were $33,056,000 other revenue was $2,240,000, and transfers were $244,000. Beginning net assets were $96,309,000 and ending net assets were $134,060,000. Of the ending net asset amount, $79,785,000, or 59.5% was invested in capital assets, $31,043,000, or 23.2% was restricted for expenditures for the Water Master Plan, and $23,232,000, or 17.3% was unrestricted. 10 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 The City's programs for governmental activities include General Government, Fire, Police, Public Works, Redevelopment, Community Services and Library. The programs for the business type activities include the Water, Sewer, Refuse, FireMed, Hazmat Service, Ocean View Estates, and Art Center activities. A _ listing of each program's revenues and expenses (in thousands) for the current year is presented below. Funded by Taxes and Less Program Other General Expenses Revenues Revenues Governmental Activities: City Council $ 262 $ - $ 262 City Administrator 2,214 (33) 2,181 City Treasurer 1,160 - 1,160 City Attorney 3,634 - 3,634 City Clerk 698 (46) 652 Administrative Services 7,230 - 7,230 Planning 2,658 (580) 2,078 Building 3,101 (3,940) (839) Fire 19,361 (605) 11j,756 Information Systems 4,464 - 4,464 Police 42,187 (5,424) 36,763 Economic Development 3,080 (1,777) 1,303 Community Services 12,440 (8,655) 3,785 Library Services 4,801 (266) 4,535 Public Works 28,237 (15,921) 12,316 Non-Departmental 19,725 (4,411) 15,314 Interest on Long-Term Debt 9,438 - 9,438 Total Governmental Activities $ 164,690 $ (41,658) $ 123,032 Business Activities Water Utility 27,250 (26,048) 1,202 Emerald Cove Housing 405 (707) (302) Emergency Fire Medical 3,172 (4,103) (931) Refuse Collection 9,178 (9,182) (4) Sewer 2,419 (4,540) (2,121) Hazmat Service 143 (145) (2) Cultural Affairs 317 (189) 128 Ocean View Estates 11 (192) (181) Total Business Activities $ 42,895 $ (45,106) $ (2,211) 11 Y City o; Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 The City's revenue sources were as follows for both governmental and business activities: Governmental Percent of Business Percent of Revenues: Activities Total Activities Total Property Taxes $ 38,106 14.4% $ - 0.0% Other Taxes 55,084 20.8% - 0.0% Use of Money and Property 13,895 5.2% 2,240 2.8% From Other Agencies 20,359 7.7% - 0.0% Other 2,604 1.0% - 0.0% Charges for Current Service 23,556 8.9% 45,106 56.1% Operating Grants 5,063 1.9% - 0.0% Capital Grants 13,039 4.9% 33,056 41.1% Total $ 264,896 100.0% $ 80,402 100.0% Financial Analysis Of The City's Governmental Funds • As of the close of the current fiscal year, the City's governmental fund balances reported combined ending balance of $75,822,000, a decrease of $35,654,000 in comparison to the prior year, largely a result of expenditure of bond proceeds from prior years. $8,785,000, or 11.5 % of the total is considered unreserved fund balance and is available for spending at the City's discretion. • The total fund balance at year-end for the City's General fund was $41,745,000, which is an overall decrease of$9,780,000 over last year. It was primarily due to a reduction in sales and utility taxes. At the end of the current fiscal year, unreserved fund balance for the general fund was $15,974,000, or 12.1% of the total general fund expenditures. The amount designated for economic uncertainties was $6,088,000. • The fund balance of the Redevelopment Agency Debt Service Fund increased $20,467,000 from a deficit of $57,527,000 to a deficit of $33,549,000. This fund normally operates at a deficit since the Redevelopment Agency incurs debt (in this case, largely interfund debt) to finance operations and capital improvements. By California law, this is how Redevelopment Agencies operate. This increase was largely due to a refunding bond issue, which repaid loans owed to the Huntington Beach Public Financing Authority. 12 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 Financial Analysis of the City's Proprietary Funds Unrestricted net assets of the Water Fund and non-major enterprise funds increased $15,686,000 and $22,065,000 respectively. The factors affecting this were discussed in the section on the City's business activities. Unrestricted net assets of the City's internal service funds decreased by $2,942,000 to a deficit of$8,170,000. This was a result of increased medical and workers compensation costs. Staff will develop a plan to eliminate these deficits over the next several years. Debt Administration Below is a schedule of the changes to the City's long-term debt (in thousands). Additional information on the City's long-term debt is shown in note 11 to the financial statements. Balance Balance October 1, Incurred or Satisfied or September Governmental Activities: 2001 Issued Matured 30, 2002 Certificates of Participation $ 47,590 $ - $ (30,295) $ 17,295 Revenue Bonds 58,400 31,095 (23,370) 66,125 Tax Allocation Bonds 9,770 20,900 (300) 30,370 Special District Bonds 605 - (190) 415 Claims 10,177 11,939 (9,503) 12,613 Compensated Absences 8,075 3,342 (2,467) 8,950 Leases 2,007 3,219 (1,119) 4,107 Pension Obligation 8,337 256 - 8,593 Loans 9,402 - (477) 8,925 Other Redevelopment Obligations 4,756 6,524 - 11,280 Total Debt-Governmental Activities 159,119 77,275 (67,721) 168,673 Business Activities: Compensated Absences 554 - (14) 540 Leases 431 345 (182) 594 Total Long-Term Obligations -Business Activities 985 345 (196) 1,134 Total Debt $ 160,104 $ 77,620 $ (67,917) $ 169,807 13 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 The City of Huntington Beach is legally restricted to issuing general obligation bonds to 15% of its assessed valuation. Since the City has no general obligation bonds outstanding, the limit does not apply. This is shown on page 108 of the financial statements. The City's total debt for governmental activities increased $9,554,000, or 6.0% from. its beginning amount largely due to additional claims and Redevelopment Agency operative agreements. Debt for business activities increased $149,000 due largely to additional leases. Certain long-term obligations of the City are rated by independent agencies for their relative safety as an investment. The City received AAA ratings on the following recently issued obligations: ■ Public Financing Authority 2000 Certificates of Participation ■ Public Financing Authority 2001 (a) Lease Revenue Bonds ■ Public Financing Authority 2001 (b) Lease Revenue Bonds Cash Management The City pools its cash and investments. Idle cash is invested in certain eligible securities as restricted by law and further limited by the City's Investment Polio. The goals of the City's Investment Policy are safety, liquidity and yield. For the year, the City Treasurer earned a return of 4.44%. Capital Assets The capital assets of the City are those assets, which are used in the performance of the City's functions including infrastructure assets. At September 30, 2002, net capital assets of the governmental activities totaled $565,017,000, an increase of $26,649,000, or 4.9%. This increase is largely due to new infrastructure and the construction of new facilities at the Beach and Sports Complex. The net capital assets of the business-type activities totaled $80,376,000, an increase of $34,033,000, or 73.1%. This is primarily due to the new Sewer enterprise fund and capital improvements in the Water Fund . The City has elected to use the "Basic Approach" as defined by GASB statement 34 for infrastructure reporting. The following infrastructure networks are recorded as capital assets in the government-wide financial statements: • Storm drain system including pump stations, drainage system and manholes. • Streets, (including land underneath streets) traffic signals, curbs, gutters, and sidewalks. 14 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 Below is a schedule of the City's capital assets, net of accumulated depreciation (in thousands): Balance Balance September 30, September 30, Government Activities: 2002 2001 Land $ 317,391 $ 313,142 Buildings 64,277 55,765 Machinery and Equipment 22,986 23,111 Construction In Progress 22,202 8,509 Infrastructure 138,161 137,841 Total Governmental Activities 565,017 538,368 Business Activities: Land 8,598 8,598 Buildings 23,631 10,230 Machinery and Equipment 4,194 3,395 Construction In Progress 7,845 5,593 Infrastructure 36,108 18,527 Total Business Activities 80,376 46,343 Total Capital Assets $ 645,393 $ 584,711 Beginning balances have been restated to comply with GASB Stat3ment 34. Additional information on the City's capital assets is shown in note 12 of the financial statements. General Fund Budgetary Highlights Comparing the fiscal year 2001/2002 original budget (or adopted) General Fund (expenditures and transfers) amount of $148,272,000 to the final budget of $156,302,000 shows a net increase of $8,030,000. Included in original budget amount is $2,448,000 of prior year encumbrance carryover into fiscal year 2001/2002. The largest supplemental General Fund budget changes were: • Civic Center Repairs $136,000 • Outside legal counsel for the City Attorney's $625,000 • Fiscal Policy Transfer to Capital Improvement Fund $1,395,500 • United States Department of Justice Fingerprint Charges $90,000 • National Pollutant Discharge Elimination System Permit $350,892 • Recreational and Instructional Class Amendment $310,000 • Employee Medical Insurance Charges $375,000 • Additional Equipment Replacement $1,625,000 15 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 Economic Factors And Next Year's Budgets And Rates The key assumptions in the General Fund revenue forecast for fiscal year 2001/2002 were: 1. While the City experienced a 8.8% increase in assessed valuation, property tax revenues decreased by 3.1% due to the City no longer collecting a voter approved Debt Service Property Tax to fund employee retirement costs, a revenue reduction of$10 million per year. 2. After the tragic events of September 11th the City was forced to revaluate its original sales tax projection from an increase of 6.0%, which was based on the anticipated growth in the retail base, to an actual decrease of 16.5%. Also effected by the events of September 11th was the City's Transient Occupancy Tax, which experience a 12.3% decrease. 3. Increased utility cost in California resulted in the City's Utility Users Tax increasing 5.7%. 4. Revenue for City issued license and permits increased 8.5% due to increased building activity. 5. Based upon increased debt repayment from the Redevelopment Agency to the General Fund use of Money and Property revenue increased 15.5%. 6. Increasing demands for service increased changes for service revenue by 3.8%. Contacting the City's Financial Management This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. If you have questions about this report, separate reports of the City's component units or need any additional financial information, contact the Administrative Services Department, Finance Division at 2000 Main Street, Huntington Beach, California, 92648, phone (714) 374-5358 or e-mail kreed@surfcity-hb.org. 16 Basic Financial Statements CITY OF HUNTINGTON E EACH STATEMENT OF NET ASSETS SEPTEMBER 30, 2002 (IN THOUSANDS) Business- Governmental Type ASSETS: Activities Activities Total Cash and Investments $ 37,381 $ 40,578 $ 77,959 Receivables 35,475 10,298 45,773 Internal Balances (2,775) 2,775 - Inventories 806 1,119 1,925 Land Held for Resale 9,139 - 9,139 Other Assets 3,407 - 3,407 Restricted Assets: - Cash and Investments - 7,118 7,118 Cash with Fiscal Agent 29,752 - 29,752 Capital Assets (Net of Accumulated Depreciation) 565,017 80,376 645,393 TOTAL ASSETS 678,202 142,264 820,466 LIABILITIES: Accounts Payable 9,210 5,218 14,428 Accrued Payroll 3,997 319 4,316 Accrued Interest Payable 821 - 821 Deposits 3,289 1,581 4,870 Deferred Revenue 18,640 - 18,640 Long-Term Obligations: Due Within One Year 13,720 230 13,950 Due in More than One Year 154,952 856 155,808 TOTAL LIABILITIES 204,629 8,204 212,833 NET ASSETS: Investment in Capital Assets, Net of Related Debt 425,697 79,781 505,478 Restricted for: Debt Service 7,967 - 7,967 Capital Projects 37,691 - 37,691 Other Purposes 12,693 31,043 43,736 Unrestricted (10,475) 23,236 12,761 TOTAL NET ASSETS $ 473,573 $ 134,060 $607,633 See independent auditors' report and notes to financial statements 17 L CITY OF HUNTIP:GTON BEACH STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30,2002 (In Thousands) Net(Expense)Revenue and Changes in Program Revenues Net Assets Charges for Operating Current Grants and Capital Grants and Governmental Business-Type Ez ensas Services Contributions Contributions Activities Activities Total Functions/Programs Governmental Activities: City Council $ 262 $ - $ $ $ (262) $ $ (262) City Administrator 2,214 33 (2,181) (2,181) City Treasurer 1,160 - (1,160) (1,160) City Attorney 3,634 - (3,634) (3,634) City Clerk 698 46 (652) (652) Administrative Services 7,230 - (7,230) (7,230) Planning 2,658 580 (2,078) (2,078) Building 3,101 3,940 839 839 Fire 19,361 500 56 49 (18,756) (18,756) Information Systems 4,464 - - - (4,464) (4,464) Police 42,187 4,433 679 312 (36,763) (36,763) Economic Development 3,080 - 1,777 - (1,303) (1,303) Community Services 12.440 8,510 145 - (3,785) (3,785) Library Services 4,801 - 87 179 (4,535) (4,535) Public Works 28,237 1.103 2,319 12,499 (12.316) (12,316) Non-Departmental 19,725 4,411 - - (15,314) (15.314) Interest on Long-Term Debt 9,438 (9,438) (9,438) Total Governmental Activities 164,690 23,566 6,063 13,039 (123,032) (123,032) Business-type Activities: Water Utility 27,250 26,048 - 33,056 31.854 31,854 Emerald Cove Housing 405 707 - 302 302 Emergency Fire Medical 3,172 4,103 931 931 Refuse Collection 9,178 9,182 4 4 Sewer 2,419 4,540 2,121 2,121 Hazmat Service 143 145 2 2 Cultural Affairs 317 189 (128) (128) Ocean View Estates 11 192 181 181 Total Business Type Activities 42,895 46,106 33,056 35,267 35,267 Total Business and Government Type Activities $ 207,686 $ 68,662 E 5 063 $ 46,096 (123,032) 35,267 (87,766) General Revenues: Taxes: Property Taxes 38,106 - 38,106 Other Taxes 55,084 55,084 Total Taxes 93,190 93,190 Other General Revenue: Use of Money and Property 13,895 2,240 16,135 From Other Agencies 20,359 - 20,359 Other 2,604 2.604 Total Other General Revenue 36,867 2,240 39,097 Transfers (244) 244 Total General Revenues and Transfers 129,803 2,484 132,287 Change in Net Assets 6,771 37,751 44,622 Net Assets-Beginning of Year(as Restated) 466,802 96,309 563,111 Net Assets-End of Year $ 473,673 $ 134,060 $607,633 See independent auditors'report and notes to financial statements 18 CITY OF HUNTINGTON BEACH BALANCE SHEET GOVERNMENTALFUNDS SEPTEMBER 30,2002 Debt Service Funds Capital Projects Funds Public Capital Public Total Major Other General Redevelopment Financing Redevelopment Improvement Financing Governmental Governmental ASSETS Fund Agency Authority Agency Fund Authority Funds Funds Total Cash and Investments $ 5,375 $ 2,241 $ - $ 4,733 $ 1,934 $ - $ 14,283 $ 23,098 $ 37,381 Cash and Investments with Fiscal Agent - 2,473 7,571 - 1,072 18,513 29,629 123 29,752 Taxes Receivable 18,278 2,324 - 55 - - 20,657 996 21,653 Acccounts Receivable 1,168 121 1,981 67 53 3,390 9,607 12,997 Unbilled Receivable 813 - - - - 813 - 813 Due from Other Funds 5,544 5,544 5,544 Inventories 806 - 806 806 Lend Held for Resale - 9,139 - 9,139 - 9,139 Advances to Other Funds 26,662 - 466 27,128 9,111 36,239 Other Assets 1,608 1,608 1,617 3,225 TOTAL ASSETS $ 60,264 $ 7,159 $ 7,571 $ 15,908 $ 3,539 $ 18,566 $ 112,997 $ 44,552 $ 157,549 LIABILITIES AND FUND BALANCES LIABILITIES Accounts Payable $ 3,449 $ 336 $ 5 $ 1,515 $ 2,036 $ - $ 7,341 $ 1,838 $ 9,179 Accrued Payroll 3,760 - - 38 5 3,803 170 3,973 Due to Other Funds - - - 1,837 1,837 893 2,730 Deposits Payable 1,523 - 140 - 1,663 1,626 3,289 Advances from Other Funds 39,014 - - 39,014 39,014 Deferred Revenue 9,777 1,358 266 11,401 12,141 23,542 TOTAL LIABILITIES 18,509 40,708 5 1,693 2,307 1,837 65,059 16,668 81,727 FUND BALANCES Reserved for: Encumbrances 4,557 - - 571 1,032 - 6,160 5,067 11,227 Long-Term Receivables 20,410 - 1,981 200 22,591 2,974 25,565 Debt Service - 7,566 - - 7,566 - 7,566 Inventory 806 - - 806 806 Capital Projects - - 16,729 16,729 16,729 Land Held for Resale 9,139 9,139 9,139 Total Reserved Fund Balance 25,773 7,566 11,691 1,232 16,729 62,991 8,041 71,032 Unreserved,Designated: Designated for Claims Payable 7,162 - - 7,162 - 7,162 Designated for Future Expenditures 2,722 2,722 5,578 8,300 Designated for Economic Uncertainties 6,088 6,088 - 6,088 Unreserved,Undesignated(Reported in): Special Revenue Funds - - 7,967 7,967 Debt Service Funds (33,549) (33,549) 185 (33.364) Capital Projects Funds 2,524 2,524 6,113 8,637 Total Unreserved 16,972 (33,549) 2,524 (15,053) 19,843 4,790 TOTAL FUND BALANCES 41,745 (33,549) 7,566 14,215 1,232 16,729 47,938 27,884 75,822 TOTAL LIABILITES AND FUND BALANCES $ 60,254 $ 7,159 $ 7,671 $ 15,908 $ 3,539 $ 18,566 $ 112,997 $ 44,552 $ 157,549 See independent auditors'report and notes to financial statements 19 CITY OF HUNTINGTON BEACH RECONCILIATION OF THE BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2002 (in thousands) Amounts reported for governmental activities in the statement of net assets are different because: Total Fund Balances Governmental Funds $ 75,822 Capital assets used in governmental activities are not financial resources and,therefore,are not reported in the funds 565,017 Other long-term assets are not available to pay for current-period expenditures and,therefore,are deferred in the funds 4,902 Long-term Liabilities, including bonds and certificates of participation payable are due and payable and therefore are not reported in the funds. This amount excludes$5,450,000 of long- term claims recorded in internal service funds (163,998) Internal Service funds are used by management to charge the costs of certain insurance to individual funds. The assets and liabilities of these funds are included in the governmental activities section in the Statement of Net Assets. This amount includes certain long-term claims payable. (8,170) Net Assets of Governmental Activities $ 473,573 See independent auditors'.report and notes to financial statements 20 CITY OF HUNTINGTON BEACH STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) Debt Service Funds Capital Pro ects Funds Public Capital Public Total Major Other General Redevelopment Financing Redevelopment Improvement Financing Governmental Governmental REVENUES: Fund A enc Authority Agency Fund Author) Funds Funds Total Property Taxes $26,796 $ 6,223 $ $ - $ $ $ 33,019 $ 185 $ 33,204 Other Taxes 51,808 - 705 52,513 2,571 55,084 Licenses and Permits 6,397 6,397 765 7,162 Fines and Forfeitures 3,797 - 3,797 - 3,797 From Use of Money and Property 8,576 304 609 568 70 1,493 11.620 2,275 13,895 From Other Agencies 13,180 - - - 2,523 15.703 12.723 28,426 Charges for Current Service 10.107 10.107 2,490 12,597 Other 794 220 6 1,020 1,584 2,604 TOTAL REVENUES 121,456 6,527 609 1,493 2,599 1,493 134,176 22,593 156,769 EXPENDITURES Current: City Council 237 - - - - 237 - 237 City Administrator 1,717 1.717 392 2,109 City Treasurer 1.108 - 1.108 - 1,108 City Attorney 3.363 207 3,570 3,570 City Clerk 676 - 676 676 Administrative Services 7,095 7,095 7.095 Planning 2.400 - 2,400 185 2,585 Building 2,591 - - - 400 - 2,991 - 2.991 Fire 17,858 17,858 166 18.024 Information Systems 2.720 780 3.500 3,500 Police 37.229 - - - - - 37,229 761 37,990 Economic Development 706 - - 1,026 - - 1,732 1,341 3,073 Community Services 9.944 - 67 10,011 1,054 11,065 Library Services 3,485 - 3,485 865 4.350 Public Works 17,727 - - - 1.596 - 19.323 2,242 21,565 Non-Departmental 9,676 648 512 2,548 13,384 23 13,407 Capital Outlay 10,602 - - 6,578 20,881 38,061 16,295 54,356 Debt Service: Principal 1,071 517 3.455 185 5,228 313 5,541 Interest 121 2.547 4,188 55 6,911 241 7,152 TOTAL EXPENDITURES 130,326 3,712 8,155 7,811 26,512 176,516 23,878 200,394 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER) EXPENDITURES (8,871) 2,815 (7,546) (6,318) (23,913) 1,493 (42,340) (1,285) (43,625) OTHER FINANCING SOURCES(USES) Transfers In 5,017 21,183 11,632 - 19,226 11 57,069 1,879 58,948 Proceeds of Lang-Term Debt 3,219 20,900 31.095 6,524 - 61,738 - 61,738 Premium(Discount)on Issuance of Long-Term Debt (68) (156) - (224) (224) Payments to Escrow (21,602) (31,071) (52,673) (52,673) Transfers Out (9,145) (2,761) (21.239) (10) (894) (13,476) (47,525) (12,293) (59,818) TOTAL OTHER FINANCING SOURCES(USES) (909) 17,652 (9,739) 6,614 18,332 (13,465) 18,385 (10,414) 7,971 INCREASE(DECREASE)IN FUND BALANCES (9,780) 20,467 (17,286) 196 (5,581) (11,972) (23,955) (11,699) (36,654) FUND BALANCE-BEGINNING OF YEAR 35,418 3,511 24,851 14,019 6.813 28,701 113,313 38,945 152,258 Prior Period Adjustments 16,107 57,527 - - - 41,4251) 638 (40,782) FUND BALANCE AS RESTATED 51,3 'F4�3� 6,�f3 7�8$3 315 583 39€- FUND BALANCE-SEPTEMBER 30,2002 $41,745 $ (33,549) $ 7,666 $ 14,215 $ 1,232 $ 16,729 $ 47,938 $ 27,884 $ 75,822 See independent auditors'report and notes to financial statements 21 CITY OF HUNTINGTON BEACH RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended September 30, 2002 (in thousands) Net Changes in Fund Balances-Total Governmental funds $ (35,654) Amounts reported for governmental activities in the Statement of Activities are different because: CAPITAL EXPENDITURES AND DEPRECIATION - Governmental funds report capital outlays as expenditures. However,in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceed depreciation in the current period. 46,052 ACCRUAL OF REVENUES - Certain revenues in the Statement of Activities do not meet the"availability"criteria for revenue recognition in the governmental funds and are not reported in the governmental funds as revenue. 4,902 LONG-TERM DEBT-Issuances and changes in long-term debt(bonds, leases,certificates of participation,compensated absences,etc)provide current financial resources to governmental funds,while repayments of this debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also,governmental funds report the effect of issuance costs,premiums, discounts, etc. when debt is firFt issued. These amounts are deferred and amortized in the Statemer t of Activities. This amount is the net effect of the differences in the treatment of long-term debt and related items (5,587) INTERNAL SERVICE FUNDS - These are used by management to charge the costs of certain activities to individual funds. The net revenue of the Internal Service Funds is reported with Governmental Activities. (2,942) Change in Net Assets of Governmental Activities $ 6,771 See independent auditors'report and notes to financial statements 22 CITY OF HUNTINGTON BEACH STATEMENT OF NET ASSETS PROPRIETARY FUNDS SEPTEMBER 30,2002 (in thousands) ENTERPRISE FUNDS Governmental Non-Major Activities- Enterprise Internal ASSETS Water Fund Funds Total Service Funds Current Assets: Cash and Investments $ 41,217 $ 6,479 $ 47,696 $ - Other Receivables 1,699 2,436 4,135 12 Inventories 1,119 - 1,119 - Unbilled Receivable 4,308 1,855 6,163 - Due from Other Funds 1,292 - 1,292 - Other Assets - - - 182 Total Current Assets 49,636 10,770 60,405 194 Non-Curret Assets: Advances to Other Funds 3,018 - 3,018 - Capital Assets: Land 3,907 4,691 8,598 - Buildings 23,751 7,129 30,880 - Machinery and Equipment 5,890 1,317 7,207 - Infrastructure 49,911 33,796 83,707 - Construction in Process 7,845 - 7,845 - Less Accumulated Depreciation (38,296) (19,565) (57,861) Total Capital Assets 53,008 27,368 80,376 TOTAL ASSETS 105,661 38,138 143,799 194 LIABILITIES Current Liabilities: Accounts Payable 4,281 937 5,218 31 Accrued Payroll 192 127 319 24 Due to Other Funds - 1,292 1,292 2,814 Deposits Payable 1,554 27 1,581 - Current Portion of Leases and Claims 129 101 230 3,885 Total Current Liabilities 6,156 2,484 8,640 6,764 Liabilities Payable from Restricted Assets - Non-Current Liabilities: Capital Leases 314 281 595 - Claims Payable - - - 5,450 Compensated Absences 392 99 491 45 Advances from Other Funds - 243 243 - Less Current Portion of Claims and Leases (129) (101) (230) (3,885) Total Non-Current Liabilities 577 522 1,099 1,610 TOTAL LIABILITIES 6,733 3,006 9,739 8,364 NET ASSETS Invested in Capital Assets,Net of Related Debt 52,694 27,087 79,781 - Restricted for: Other Purposes 31,043 - 31,043 Unrestricted 15,191 8,045 23,236 (8,170) TOTAL NET ASSETS $ 98,928 $ 35,132 $ 134,060 $ (8,170) See independent auditors'report and notes to financial statements 23 CITY OF HUNTINGTON BEACH STATEMENT OF REVENUES, EXPENSES,AND CHANGES IN NET ASSETS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2002 (in thousands) Governmental Non-Major Activities- Enterprise Internal Water Fund Funds Total Service Funds OPERATING REVENUES: Sales $ 24,145 $ - $ 24,145 $ Rentals - 831 831 - Fees for Service - 17,716 17,716 8,003 Other 1,903 511 2,414 15 TOTAL OPERATING REVENUES 26,048 19,058 45,106 8,018 OPERATING EXPENSES: Water Purchases 9,132 - 9,132 - Supplies and Operations 3,004 14,715 17,719 11,586 Engineering 1,638 - 1,638 - Production 2,010 2,010 - Maintenance 3,397 3,397 - Water Meters 1,301 1,301 - Water Quality 239 239 - In-Lieu Taxes to General Fund 4,433 4,433 - Depreciation 2,096 930 3,026 - TOTAL OPERATING EXPENSES 27,250 15,646 42,895 11,586 OPERATING INCOME(LOSS) (1,202) 3,413 2,211 (3,568) NON-OPERATING REVENUES(EXPENSES): Interest Income 2,011 170 2,181 - Capital Improvement Fees 6,886 - 6,886 - Loss on Sale of Plant,Property,and Equipment - 59 59 - TOTAL NON-OPERATING REVENUES(EXPENSES) 8,897 229 9,126 CHANGE IN NET ASSETS BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS: 7,695 3,642 11,337 (3,568) TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers In - 820 820 1,354 Transfers Out - (576) (576) (728) Capital Contributions 7,991 18,179 26,170 - TOTAL TRANSFERS AND CAPITAL CONTRIBUTIONS 7,991 18,423 26,414 626 TOTAL CHANGE IN NET ASSETS 15,686 22,065 37,751 (2,942) NET ASSETS-BEGINNING OF YEAR 83,242 13,067 96,309 (5,228) NET ASSETS-END OF YEAR $ 98,928 $ 35,132 $ 134,060 $ (8,170) See independent auditors'report and notes to financial statements 24 CITY OF HUNTINGTON BEACH STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2002 (in thousands) Governmental Non-Major Activities- Enterprise Internal Water Fund Funds Total Service Funds Cash Flows from Operating Activities: Cash Received from Customers and Users $ 24,200 $ 17,549 $ 41,749 $ 8,018 Cash Paid to Employees for Services (4,411) (2,668) (7,079) (609) Cash Paid to Suppliers of Goods and Services (19,255) (12,321) (31,576) (9,381) Other Operating Items 553 229 782 Net Cash Provided(Used)by Operating Items 1,087 2,789 3,876 (1,972) Cash Flows from Noncapital Financing Activities: Transfers In - 820 820 1,354 Transfers Out (576) (576) (728) Net Cash Provided(Used)by Non Capital Financing Activities - 2" 2" 626 Cash Flows from Capital and Related Financing Activities: Purchase of Plant,Property,and Equipment (7,222) (477) (7,699) - Principal Paid on Long-Term Debt (72) (150) (222) Capital Surcharge 6,886 - 6,886 Net Cash Provided(Used)by Capital and Related Financing Activities (408) (627) (1,035) Cash Flows from Investing Activities Cash Received from Investments 1,393 170 1,563 Net Increase in Cash and Cash Equivalents 2,072 2,676 4,648 (1,346) Cash and Cash Equivalents,Beginning of Year 39,146 3,903 43,0 1,8 1,346 Cash and Cash Equivalents,End of Year $ 41,217 $ 6,479 $ 47,6)6 $ Reconciliation of Operating Income to Net Cash Provided(used)by Operating Activities Operating Income(Loss) $ (1,202) $ 3,413 $ 2,211 $ (3,568) Other Nonoperating Items Adjustments to Reconcile Operating income to Net Cash Provided(Used)by Operating Activities Depreciation 2,096 930 3,026 - Decrease(Increase)in Accounts Receivable 348 (1,004) (656) 32 Decrease(Increase)in Unbilled Receivables (293) (636) (929) - Decrease(Increase)in Advances to Other Funds (124) - (124) Decrease(Increase)in Due from Other Funds (1,292) (1,292) - Decrease(Increase)in Prepaid Insurance - - (110) Decrease(Increase)in Inventory (15) (15) - Increase(Decrease)in Accounts Payable 1,488 (222) 1,266 (15) Increase(Decrease)in Accrued Payroll 31 69 100 2 Increase(Decrease)in Accrued Interest Payable - - (398) Increase(Decrease)in Due to Other Funds - 223 223 1,440 Increase(Decrease)in Advances from Other Funds - (1) (1) - Increase(Decrease)in Deposits 44 6 50 - Increase(Decrease)in Claims Payable - - - 664 Increase(Decrease)in Compensated Absences 6 11 17 (19) Net Cash Provided(Used)by Operating Activities $ 1,087 $ 2,789 $ 3,876 $ (1,972) See independent auditors'report and notes to financial statements 25 CITY OF HUNTINGTON BEACH STATEMENT OF FIDUCIARY FUND NET ASSETS FIDUCIARY FUNDS SEPTEMBER 30,2002 Agency Funds Trust Funds Business Central Not Employee Reli—d mmu Conity Improvement Operations Deferred Retiree Medical Supplement Assets: General Depose Facilities Districts District Authority Tax 0-rid. Compensation Insurance Fund Cash and Investments $ 528 $ 833 $ - $ - $ 2,318 $ 200 $ 4,781 $ 8,737 Cash with Fiscal Agent - 6,509 17 1,292 - Accounts Receivable,Net - 127 - - - - - - Interest Receivable 12 37 42 Total Assets $ 528 $ 7,469 $ 17 $ 1,292 $ 2,330 $ 200 f 4,818 $ 8,779 Liabilities: Accounts Payable - - 2 8 - - - 3 Due to Bondholders 7,469 Total Liabilities 7,469 2 8 3 Net Assets: Held in Trust for Pension Benefits and Other Purposes f 528 $ f 15 $ 1,294 f 2,330 f 200 f 4,818 f 8,776 CITY OF HUNTINGTON BEACH STATEMENT OF CHANGES IN FIDUCIARY FUND NET ASSETS TRUSTFUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 Employee Retirement Deferred Retiree Medical Supplement Additions: Compensation Insurance Fund Employer Contributions $ - $ 578 $ 2,746 Interest Income 6 166 266 Total Additions $ 6 $ 744 f 3,012 Deductions: Benefits 133 654 1,040 Administration 45 Total Deductions 133 654 1,085 Change In Net Assets (127) 90 1,927 Net Assets-Beginning of Year 327 4,728 6,849 Net Assets-End of Year f 200 $ 4,818 $ 8,776 See independent auditors'report and notes to financial statements 26 Notes to Financial Statements City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: a. Implementation of New Pronouncements: This is the first year the City of Huntington Beach has adopted the following new financial reporting requirements of Government Accounting Standards Board. ■ Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.- ■ Statement No. 37, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments: Omnibus ■ Statement No. 38, Certain Financial Statement Note Disclosures GASB Statement No. 34 is a new financial reporting requirement for local governments in the United States. The City has implemented this pronouncement and has restructured much of the information that it has presented in the past. The main goal is to make the reports more comprehensive and easier to understand and use. GASB Statement No. 37 addresses selected issuF.-s and amends GASB Statement No. 21, Accounting for Escheat Property, and No. ":A, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments. These Statements make selective changes including accounting for Escheat Property, Management's Discussion and Analysis, Capitalization of Construction—Period Interest, Modified Approach for Reporting Infrastructure, Program Revenues and Major Fund Criteria. GASB Statement No. 38 establishes and modifies disclosure requirements related to Summary of Significant Accounting Policies, actions taken to address violations of significant finance—related legal and contractual provisions, debt and lease obligations, short-term debt, disaggregation of receivable and payable balances, and interfund balances and transfers. b. Government-Wide Financial Statements: The Government-Wide Financial Statements include a Statement of Net Assets, a Statement of Activities, and Changes in Net Assets. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. These statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets and liabilities, including 27 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): b. Government-Wide Financial Statements: capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Assets. The Statement of Activities presents changes in net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The statement of activities demonstrates the degree with which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect expenses are allocated to the various functions based on a proportionate use of services. The types of transactions reported as program revenues for the City are reported in three categories: 1) charges for current services, 2) operating grants and contributions, and 3) capital grants and contributions. Taxes and other items not properly included among program revenues are reported as general revenues. GovE!rnment-wide financial statements do not provide information by fund or account group. They simply distinguish between governmental and business activities. The City's statement of net assets includes both current and non-current assets and liabilities. In prior years, the non-current assets and liabilities were recorded in the General Fixed- Assets Account Group and the General Long-Term Debt Account Group which are no longer reported. Financial Statement Classification In the Government-Wide financial statements net assets are classified in the following categories: Invested In Capital Assets, Net of Related Debt — This category groups all capital assets, including infrastructure, into one component of net assets. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduces this category. Restricted Net Assets — This category presents restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. This category presents restrictions placed on the categories of Capital Projects, Debt Service, and Specific Projects and Programs as established by the City Council. Unrestricted Net Assets — represent the net assets of the City, not restricted for any project or other purpose. 28 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): c. Fund Financial Statements: Separate fund financial statements are prepared for governmental funds, proprietary funds, and fiduciary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. The City applies all applicable GASB pronouncements (including all NCGA Statements and Interpretations currently in effect) as well as the following pronouncements issued on or before November 30, 1989, to the business type activities, unless those pronouncements conflict with or contradict GASB pronouncements, Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARB) of the committee on Accounting Procedure. The City applies all applicable FASB Statements and Interpretations issued after November 30, 1989, except those that conflict with or contradict GASB pronouncements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation All governmental funds are accounted for on a spending or"current financial resources" measurement focus and the modified accrual basis of accounting. Only current assets and current liabilities are included on the Balance Sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. In the Fund financial statements, reserves and designations segregate portions of fund balance that are either not available or have been earmarked for specific purposes. The various reserves and designations are established by actions of the City Council and Management and can be increased, reduced or eliminated by similar actions. 29 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): c. Fund Financial Statements: The City reports the following major funds: Governmental Funds: • General Fund is used to account for activity not required to be accounted for in another fund. Debt Service Funds: • 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. • Capital Projects Funds: • The Public Financing Authority Fund accounts for expenditures relating to capital improvements funding by Public Financing Authority bond issues. • The Redevelopment Agency Fund accounts for E cquisition and construction in the five project areas. • The Capital Improvement Fund accounts for major capital improvements not made by other capital projects funds or proprietary funds. Proprietary Funds • The Water Fund is used to account for sale of water to businesses and customers. Governmental Fund Financial Statements: Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net assets as presented in these statements to the net assets presented in the Government-Wide Financial Statements. The City presents all major funds that met those qualifications. Proprietary Fund Financial Statements: Proprietary Fund Financial Statements include a Statement of Net Assets, a Statement of Revenues, Expenses and Changes in Fund Net Assets, and a Statement of Cash Flows for each major proprietary fund and non-major funds aggregated. A column representing Internal Service Funds (used to report workers compensation and employee indemnity plan health insurance activity) are also presented in these statements. However, Internal Service balances and activities have been combined with the governmental activities in the Government-Wide financial statements. 30 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): c. Fund Financial Statements: Proprietary funds are accounted for using the"economic resources" measurement focus and the accrual basis of accounting.Accordingly, all assets and liabilities(whether current or non-current) are included on the Statement of Net Assets.The Statement of Revenues, Expenses and Changes in Fund Net Assets presents increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses. Fiduciary Fund Financial Statements Fiduciary Fund Financial Statements include n Statement of Net Assets and a Statement of Changes in Net Assets for Trust Funds. The City's Fiduciary funds represent Agency Funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The Agency funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting as are the governmental funds explained above. Benefits paid from the pension trust funds are recognized when paid. Contributions made are funded by a percentage of payroll and are recognized when the payroll is incurred. Fiduciary funds are not presented in the government-wide financial statements because these funds do not represent net assets available to the City. Reconciliations of Financial Statements Reconciliation of the Fund financial statements to the Government-Wide financial statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34. Prior-Year Restatements: In order to facilitate the implementation of GASB 34, the classification of certain funds has been changed for the current year (see note 14c). 31 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): d. Cash and Investments: The City records investments at fair value. The City pools cash resources of its various funds to facilitate cash management. Cash in excess of current requirements is invested and reported as investments. It is the City's intent to hold investments until maturity. However, the City may, in response to market conditions, sell investments prior to maturity in order to improve the quality, liquidity or yield of the portfolio. Interest earnings are apportioned among funds based on ending accounting period cash and investment balances. The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and highly liquid investments with original maturities of three months or less at the time of acquisition. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available. The City participates in the Local Agency Investment Fund (LAIF), an investment pool managed by the State of California. LAIF has invested a portion of the pool funds in Structured Notes and Asset-Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as a result of changes in interest rates. e. Capital Assets: Capital assets, which include property, plant, equipment, and infrastructure, are reported in the applicable governmental or business-type activities columns in the government- wide financial statements. Capital assets have an acquisition cost of$5,000 or greater ($50,000 for infrastructure) and a useful life of two years or more. The City records all purchased capital assets at historical cost (where historical records are available) and at estimated historical cost where no historical records exist. Capital assets acquired from gifts or contributions are recorded at fair market value at the time received, or in the case of infrastructure assets, at City Council acceptance date. 32. City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): e. Capital Assets: In the Government-Wide and proprietary fund financial statements, depreciation is recorded on the on the straight-line method over the estimated useful lives of the assets ;. shown below and charged to the respective fund. No depreciation is recorded in the governmental funds of the fund financial statements. Production, pumping transmission and distribution plant 10 to 15 years General Plant 20 to 50 years Transportation Equipment 5 to 30 years Infrastructure 50 Years Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of borrowing until completion of the project with interest earned on the invested proceeds over the same period. f. Inventories: Inventories are recorded in governmental funds by the consumption method. Inventories are capitalized and recorded as expenditures when used and are valued using the average cost method. This amount is offset with a reservation of fund balance. Proprietary inventories are valued at weighted-average cost. g. Interfund Transactions: As a general rule, interfund transactions have been eliminated from the government-wide financial statements. Exceptions to this rule are payments in-lieu or charges for current service between the City's enterprise activity and the City's General Fund. Elimination of these transactions would distort the direct costs and program revenues for the various functions Certain eliminations have been made regarding interfund activities, payables and receivables. All internal balances in the Statement of Net Assets have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. 33 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): g. lnterfund 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 otherfunds 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. h. Long-Term Obligations: In the government-wide and proprietary fund financial statements, long-term obligations are recorded as liabilities in the applicable governmental activities, business type activities, or proprietary fund-type statement of net assets. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the debt for all issues after October 1, 2001. Premiums and discounts for debt issued before October 1, 2001 are not recorded or amortized. In the governmental fund financial statements, bond discounts and premiums are recognized as another financing source or use. Issuance costs are recorded a current year expenditure. i. Employee Compensated Absences: The Agency records the cost of all accumulated and unused leave time (vacation,.sick, comp)as a liability when earned in the government-wide financial statements. In the fund financial statements these amounts are recorded as expenditures in the years paid since it is the City's policy to pay these from future financial resources, rather than available, spendable resources. 34 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): j. 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. In the government-wide financial statements, property tax is recorded when earned, regardless of when levied, due, or received. In the fund financial statements, 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 that are collected more than 60 days after the fiscal year end. Since the City's fiscal year differs from the County's property tax year, there is a difference between the property tax revenue recorded on the fund financial statements and the government-wide financial statements which is noted as a reconciling item in both the Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund Balance of Governmental Funds to the Statement of Activities and the Reconciliation of the Balance Sheet of Governmental Fur,ds to the Statement of Net Assets. 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 35 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): k. 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. I. 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. m. Estimates: The accompanying financial statements require management to make estimates and assumptions that effect certain report amounts and disclosures.Actual results could differ from those estimates. 2. REPORTING ENTITY: The City of Huntington Beach is the primary government. It was incorporated in 1909, is a charter, full-service city. The form of government is Council-Manager. Component units are legally separate organizations for which the City Council is financially accountable, or organizations that if excluded from the accompanying financial statements,would make them misleading. The component units described below are blended (presented as if they are part of the primary government) with the primary government for financial reporting purposes because either the component units have governing bodies identical to the City's (the City Council) or provide services exclusively to the City. Financial accountability means the appointment of a voting majority of the component unit's board and either the ability to impose will by the City or the possibility that the component unit will provide a financial benefit or impose a financial burden on the City. • 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. Separately prepared financial statements are available for the Redevelopment Agency from the City's Administrative Services Department. 36 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 2. REPORTING ENTITY: • 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. There are no separate financial statements prepared for the Civic Improvement Corporation. During the year all of the bonds for the Civic Center were defeased and the lease with the City was terminated. • 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. There are separately prepared financial statements available for the Public Financing Authority available from the City's Administrative Services Department. • The City of Huntington Beach Community Facilities Districts 1990-1. 2000-1 . and Boeing (Community Facilities Districts), 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 Districts' debt is not an obligation of the City. 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. There are no separate financial statements for this entity. 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. 37 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 3. CASH AND INVESTMENTS (CONTINUED): Cash and investments at year-end totaled (in thousands): Statement of Net Assets: Cash and Investments $ 77,959 Restricted Assets(Cash and Cash Equivalents) 7,118 Cash with Fiscal Agent- Restricted 29,752 Total Per Statement of Net Assets 114,829 Fiduciary Funds: Cash and Investments 17,397 Cash with Fiscal Agent- Restricted 7,818 Total Fiduciary Funds 26,215 Total Cash and Investments $140,044 Cash and investments were categorized as follows (in thousands) Category Fair Non Bank Value/Carrying DEPOSITS: 1 2 3 Categorized Balance Amount Demand Accounts $ 100 $ 339 $ - $ - $ 3,357 $ 439 INVESTMENTS: Commercial Paper 1,992 - 1,992 Investment in L.A.I.F. 37,814 37,814 Federal Agency Issues 52,954 - - - 52,954 Treasury Securities 5,053 - - - 5,053 Medium Term Notes 7,906 - - - 7,906 Investments with Fiscal Agent: Guaranteed Investment Contracts - - - 19,542 19,542 Investment in L.A.I.F. - - - 1,109 1,109 Federal Agency Issues - - - 3,110 3,110 Money Market Funds - - 9,707 9,707 U.S. Treasury Obligations - - 351 - 351 Subtotal of Investments 67,905 - 351 71,282 - 139,538 Total Deposits and Investments $ 68,005 $ 339 $ 351 $ 71,282 $ 3,357 139,977 Petty Cash 67 Totals $ 140,044 38 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 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 Nctes Federal Home Loan Corpora ion 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: 39 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 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. • Local Agency Investment Fund (LAIF): The LAIF is a special fund of the California State Treasury through which local governments may pool investments. Each city may invest up to $30,000,000 each in the Fund for the city and redevelopment agency and may also invest without limitation in special bond proceeds accounts. Investments in LAW are highly liquid, as deposits can be converted to cash within twenty-four hours without loss of interest. Included in LAIF's investment portfolio are certain derivative securities or similar products such as structured notes totaling$1,343,538,000 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 $38,923,000. 40 L Y City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 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.. 5. DEFERRED REVENUE: Certain revenues in governmental funds are deferred until received. The property tax amounts are recognized in the year as revenue in the government-wide financial statements, but are recorded as deferred revenue in the fund financial statements. The amounts are as follows (in thousands): Other Property Deferred Interest on Deferred Taxes Interfund Loans Revenue Total General Fund $ 3,520 $ 6,257 $ - $ 9,777 Redevelopment Agency Debt Service Fund 1,358 - - 1,358 Capital Improvement Fund - 266 - 266 Non-Major Governmental Funds 24 8,857 3,260 12,141 Total $ 4,902 $ 15,380 $ 3,260 $ 23,542 41 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 6. RETIREMENT PLAN — NORMAL: a. Plan Description: The City contributes to the California Public Employees' Retirement System (CALPERS), an agent, multiple-employer public employee defined benefit pension plan. CALPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. CALPERS acts as a common investment and administrative agent for participating public entities within California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of CALPERS annual financial report may be obtained from their executive office: 400 P Street, Sacramento, CA 95814. b. Employer and Employee Contribution Obligations: The City makes two types of contributions for covered employees. The first contribution represents the amount required to be made by the City (the employer rate). The second represents an amount which is made by the employee, but is reimbursed to the employee by the City (the member rate). The member rate is set by contract and normally remains unchanged. The employer rate is an actuarially established rate, is set by CALPERS, and changes from year to year. The employer and member rates for the fiscal year ending September 30, 2002 are: Rate Local Miscellaneous 0.0000% Local Safety 0.0000% c. Annual Pension Cost: The City's annual pension cost of$5,085,000 was equal to the City's required and actual contributions. The required contribution was determined as part of a June 30, 2001 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, 2002. Significant assumptions were: 42 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 6. RETIREMENT PLAN — NORMAL (CONTINUED): c. Annual Pension Cost: • 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 lo•,ses each year. If the plan's accrued liability exceeds the actuarial value of the assets, tl ien the amortization payment on the total unfunded liability may not be lower than the payment calculated over a 30-year amortization period. d. Trend Information: Annual Pension Cost Percentage of APC Net Pension Fiscal Year (In Thousands) Funded Obligation 9/30/2000 $5,516 100% $0 9/30/2001 $4,642 100% $0 9/30/2002 $5,085 100% $0 43 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 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, 2002 data, only 747 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 4.33% of total 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, 2002 were (in thousands): Annual required contribution $3,228 Interest on net pension obligation 458 Adjustment to annual required contribution (594) Annual pension cost 3,092 Contributions made (2,836) Increase (decrease) in net pension obligation 256 Net Pension Obligation — Beginning of Year 8,337 Net Pension Obligation — End of Year 8 9 44 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 7. RETIREMENT PLAN — SUPPLEMENTAL (CONTINUED): c. Annual Pension Cost and Net Pension Obligation: 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 thousand,;): Fiscal Year Annual Pension Percentage of Net Pension Cost APC Funded Obligation 6/30/00 $2,536 64% $8,150 6/30/01 2,455 88% 8,337 6/30/02 3,092 92% 8,593 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% 2002 2,836 88% 45 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 7. RETIREMENT PLAN — SUPPLEMENTAL (CONTINUED): 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 government-wide financial statements. The amount of this liability is $8,593,000. Actuarial studies and updates were performed since 1991 and there is a substantial amount of unfunded pension benefit liability that would have been recorded as a liability in the government- wide financial statements if the studies would have been performed (see Note 12). 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. 46 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 8. POST-EMPLOYMENT MEDICAL INSURANCE (CONTINUED): 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 1,065 Employer's actuarially required contributions $ 744 Employer's actual contributions $ 579 Below is a summary of the Unfunded Actuarial Accrued Liability for the plan (in thousands) Actuarial accrued liability $11,441 Net assets available for plan benefits 4( .818) Unfunded Actuarial Accrued Liability $6,623 Under current generally accepted accounting principles, unfunded liabilities on other post- employment benefits, are not required to be recorded in the financial statements. 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. Liability Claims: The City records liability claims as expenditures in the General Fund. The liability for these claims is recorded as part of long-term obligations in the Government-Wide financial statements. Claims of up to $1,000,000 are paid from the General Fund. 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. 47 r City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 9. RISK MANAGEMENT (CONTINUED): Health and Workers Compensation Claims: The City established separate reserve funds to account for workers compensation, and employee health. These funds are recorded as internal service funds and finance uninsured risks of loss.Workers' compensation claims of up to$350,000 per claim and health claims of greater than $100,000 per claim are paid from these funds. 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' Insurance Compensation Liability Reserve Reserve - insurance Total 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 Additions 2001-2002 6,138 3,400 2,400 11,938 Reductions-2001-2002 (5,953) (2,921) (629) (9,503) Net Increase (Decrease) 2001-2002 185 479 1,771 2,435 Balance September 30, 2002 $ 385 $ 5,065 $ 7,162 $ 12,612 48 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 10. INTERFUND TRANSACTIONS: a. Interfund Advances: The amounts at September 30, 2002 were (in thousands): Advances Advances To From Governmental Funds $ 36,239 $ 39,014 Enterprise Funds 3,018 243 Total $ 39,257 $ 39,257 Advances to: Capital Non-Major Total Total General ImprovementGovernmental Governmental Advances Advances from: Fund Fund Funds Funds Water Fund From Governmental Funds: Debt Service Funds: Redevelopment Agency $ 26,662 $ 466 $ 8,868 $ 35,996 $ 2,775 $ 38,771 Non-Major Enterprise Funds - - - - 243 243 Internal Service Funds - - Total Advances to $ 26,662 $ 466 $ 8,868 $ 35,996 $ 3,018 $ 39,014 b. Due To/From Other Funds: The amounts at September 30, 2002 were (in thousands): Due To Other Funds Total Due to Due From Other Funds General Fund Water Fund Other Funds Public Financing Authority Capital Projects Fund $ 1,837 $ - $ 1,837 Non-Major Governmental Funds 893 - 893 Non-Major Enterprise Funds - 1,292 1,292 Internal Service Funds 2,814 - 2,814 Total Due From Other Funds $ 5,544 $ 1,292 $ 6,836 49 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 10. INTERFUND TRANSACTIONS (CONTINUED): c. Transfers In/Out: The amounts at September 30, 2002 were (in thousands): Transfers Transfers In Out Governmental Funds $ 58,948 $ 59,818 Enterprise Funds 820 576 Internal Service Funds 1,354 728 Total $ 61,122 $ 61,122 Transfers Out Debt Service Funds Capital Projects Funds Transfers Public Capital Total Major In: Redevelopment Financing Redevelopment Improvement Public Financing Governmental General Fund Agency Authorit Agency Fund Authority Funds Governmental Funds: General Fund $ - $ $ 3,468 $ - $ 3,490 $ - $ 6,958 Debt Service Funds: Redevelopment Agency 98 - 1,418 - - - 1,516 Public Financing Authority - 21,183 - - - 11 21,194 Capital Projects Funds: - Redevelopment Agency 10 - - - - - 10 Capital Improvement Fund 713 - - - - 713 Public Financing Authority - - 2,392 11,084 - 13,476 Non-Major Governmental Funds 3,503 - 3,971 - 4,202 - 12,126 Non-Major Enterprise Funds 193 - 383 - - - 576 Internal Service Funds 500 - - - - - 500 Total Transfers In $ 6,017 $ 21,183 $ 11,632 $ - $ 19,226 $ 11 $ 67,089 50 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 10. INTERFUND TRANSACTIONS: d. Transfers In/Out: Transfers Out Non-Major Total Non-Major Governmental Governmental Enterprise Internal Service Total Transfers Transfers In: Funds Funds Funds Funds Out Governmental Funds: General Fund $ 361 $ 7,319 $ 700 $ 1,126 $ 9,145 Debt Service Funds: Redevelopment Agency 1,245 2,909 - - 2,761 Public Financing Authority 45 21,239 - - 21,239 Capital Projects Funds: - Redevelopment Agency - 10 - 10 Capital Improvement Fund 181 894 - - 894 Public Financing Authority - 13,476 - - 13,476 Non-Major Governmental Funds 47 11,723 120 - 12,293 Non-Major Enterprise Funds - 576 - - 576 Internal Service Funds - 500 - 228 728 Total Transfers In $ 1,879 $ 58,948 $ 820 $ 1,354 $ 61,122 51 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11.LONG-TERM OBLIGATIONS: Below is a schedule of changes in long-term obligations for the year (in thousands). Principal October 1, September Due Within Governmental Activities: Note 2001 Additions Retirements 30,2002 Accrued Interest One Year Civic Improvement Corporation: Refunding Certificates of Participation(Civic Center)-1993 11(a)(1) $ 16,655 $ - $ (16,655) $ - $ - $ - Refunding Certificates of Participation(Police Administration Building)-1993 11(a)(2) 13,095 - (13,095) - - - Total Civic Improvement Corporation 29,750 - (29,750) - - - Public Financing Authority: 1992 Revenue Bonds 11(b)(1) 20,460 - (20,460) - - - 1997 Leasehold Revenue Bonds 11(b)(2) 6,580 - (510) 6,070 88 555 2000 Certificates of Participation 11(b)(3) 17,840 - (545) 17,295 73 560 2001-a Lease Revenue Bonds 11(b)(4) 31,360 - (580) 30,780 117 560 2001-b Lease Revenue Bonds 11(b)(5) - 31,095 (1,820) 29,275 191 1,475 Total Public Financing Authority 76,240 31,095 (23,915) 83,420 468 3,160 Redevelopment Agency: 1999 Tax Allocation Refunding Bonds 11(c)(1) 9,770 - (300) 9,470 72 $ 310 2002 Tax Allocation Refunding Bonds 11(c)(2) - 20,900 - 20,900 155 685 Mayer Disposition and Development Agreement 11(c)(3) 4,756 6,524 - 11,280 Section 108 Loan 11(c)(4) 8,130 - (240) 7,890 100 260 Note Payable 11(c)(5) 345 - (52) 293 - 293 Total Redevelopment Agency 23,001 27,424 (592) 49,833 327 1,548 Other Long-Term Obligations: Reservoir Hill Assessment Bonds 11(d)(1) 605 - (190) 415 3 $ 55 Energy Financing Loan 11(d)(2) 927 - (185) 742 10 197 Leases Payable 11(d)(3) 2,007 3,219 (1,119) 4,107 13 - Compensated Absences 11(d)(4) 8,075 3,342 (2,467) 8,950 - Claims Payable 11(d)(5) 10,177 11,938 (9,503) 12,612 4,885 Net Pension Obligation 11(d)(6) 8,337 256 - 8,593 - Total Other Long-Term Obligations $ 30,128 $ 18,755 $ (13,464) $ 35,419 $ 26 $ 5,137 Total Long-Term Obligations-Governmental Activities $ 159,119 $ 77,274 $ (67,721) $ 168,672 $ 821 $ 9,835 52 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS: Below are reconciliations from amounts in the above table to amounts in the accompanying government-wide financial statements (in thousands): Proceeds of Long-Term Debt in Governmental Fund Financial Statements $ 61,738 Items Not Recorded as Proceeds of Long-Term Debt: Increase in Compensated Absences 3,342 Increase in Claims Payable 11,938 Interest in Net Pension Obligation 256 Increases in Above Schedule $ 77,274 Principal Paid in Governmental Fund Financial Statements $ 5,541 Decrease in Claims Payable 9,503 Decrease in Compensated Absences 2,467 Defeasance of Bonds (Note 15) 50,210 Decreases in Above Schedule $ 67,721 a. Civic Improvement Corporation: (1). 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 s and August 1 S -Principal Payment Dates August 1S Purpose of Debt Refinance 1986 Civic Improvement Corporation Certificates of Participation These certificates were defeased during the year (see note 14). 53 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): a. Civic Improvement Corporation: (2) Huntington Beach Civic Improvement Corporation Refunding Certificates of Participation (Police Administration Project): Year of Issuance 1993 Type of Debt Refunding Certificates of Participation Original Principal Amount $16,350,000 Security Lease on Civic Buildings Interest Rates 4.0% to 5.7% Interest Payment Dates February 1 s and Au ust is, Principal Payment Dates August 15 Purpose of Debt Refinance 1989 Civic Improvement Corporation Certificates of Participation These certificates were defeased during the year (see note 14). b. Public Financing Authority (1.) 1992 Huntington Beach 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 February 1S and August 15 Principal Payment Dates August 1" Purpose of Debt Provide funds for Waterfront Development and Remove Restrictive Covenants on 1988 Revenue Bonds These certificates were defeased during the year (see note 14). 54 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): b. Public Financing Authority (2.) 1997 Public Financing Authority Revenue Bonds: Year of Issuance 1997 -Type of Debt Lease Revenue Bonds -Original Principal Amount $8,070,000 Security Lease Agreement with City for Central Library Interest Rates 5.00% to 5.50% Interest Payment Dates June 15 th and December 15 th -Principal Payment Dates December 15 th 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 2003 $ 555 $ 303 $ 858 2004 575 278 853 2005 610 245 855 2006 640 214 854 2007 665 171 836 2008-2012 450 769 1,219 2013-2017 580 631 1,211 2018-2022 760 449 1,209 2023-2027 1,000 207 1,207 2028 235 7 242 Total $ 6,070 $ 3,274 $ 9,344 55 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): b. Public Financing Authority (3.) 2000 Public Financing Authority Certificates of Participation: Year of Issuance 2000 Type of Debt Certificates of Participation Original Principal Amount $18,310,000 Security Lease with City Interest Rates 4.0% to 5.0% Interest Payment Dates September 1S and March 1S Principal Payment Dates September 1s' Purpose of Debt Capital improvements and defeasance of Emerald Cove Certificates of Participation (see note 14 Debt service requirements to maturity are (in thousands): Year Ending September 30 Principal Interest Total 2003 $ 565 $ 875 $ 1,440 2004 590 852 1,442 2005 615 827 1,442 2006 640 801 1,441 2007 670 773 1,443 2008-2012 3,190 3,404 6,594 2013-2017 2,960 2,708 5,668 2018-2022 3,450 1,816 5,266 2023-2027 2,650 993 3,643 2028-2030 1,965 218 2,183 Total $ 17,295 $ 13,267 $ 30,562 56 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): b. Public Financing Authority (4). 2001(a) 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 1 S and Se tember 1 S -Principal Payment Dates --September 1st Purpose of Debt Construct Sports Complex and South Beach Phase II Im rovements Debt service requirements to maturity are (in thousands): Year Ending September 30, Principal Interest Total 2003 $ 560 $ 1,423 $ 1,983 2004 585 1,401 1,986 2005 605 1,378 1,983 2006 630 1,354 1,984 2007 650 1,333 1,983 2008-2012 3,635 6,297 9,932 2013-2017 4,445 5,483 9,928 2018-2022 5,565 4,360 9,925 2023-2027 7,070 2,854 9,924 2028-2031 7,035 902 7,937 Total $ 30,780 $ 26,785 $ 57,565 57 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): b. Public Financing Authority (5). 2001(b) Public Financing Authority Lease Revenue Bonds: Year of Issuance 2001 Type of Debt Lease Revenue Bonds Original Principal Amount $31,095,000 Security Lease on Civic Center Buildings Interest Rates 4.0% to 5.0% Interest Payment Dates August 1, February 1 Principal Payment Dates August 1 Purpose of Debt Defease Civic Improvement Corporation Certificates Year Ending September 30, Principal Interest Total 2003 $ 1,475 $ 1,143 $ 2,618 2004 1,535 1,084 2,619 2005 1,595 1,023 2,618 2006 1,640 975 2,615 2007 1,690 926 2,616 2008-2012 9,410 3,681 13,091 2013-2017 9,905 1,649 11,554 2018-2019 2,025 148 2,173 Total $ 29,276 $ 10,627 $ 39,902 c. Redevelopment Agency: (1.) 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 1" and August 1 S Principal Payment Dates August 15 Purpose of Debt Prepay Agency's 1992 Loans to Public Financing Authority 58 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): c. Redevelopment Agency: (1.) 1999 Redevelopment Agency Tax Allocation Refunding Bonds: Debt service requirements to maturity are (in thousands): Year Ending September 30 Principal Interest Total 2003 $ 310 $ 303 $ 613 2004 320 278 598 2005 335 245 580 2006 350 214 564 2007 365 171 536 2008-2012 2,060 769 2,829 2013-2017 2,575 631 3,206 2018-2023 2,795 512 3,307 2024 360 53 413 Total $ 9,470 $ 3,176 $ 12,646 (2.) 2002 Redevelopment Agency Tax Allocation Refunding Bonds: Year of Issuance 2002 -Type of Debt Tax Allocation Refunding Bonds -Original Principal Amount $20,900,000 -Security Tax Increment Interest Rates 2.00% to 5.00% Interest Payment Dates February 1 S and August 1 S -Principal Payment Dates August 1 s Purpose of Debt Prepay Agency's 1992 Loans to Public Financing Authority and fully defease 1992 Public Financing Authority bonds 59 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): c. Redevelopment Agency: (2.) 2002 Redevelopment Agency Tax Allocation Refunding Bonds: Debt service requirements to maturity are (in thousands): Year Ending September 30, Principal Interest Total 2003 $ 685 $ 928 $ 1,613 2004 750 860 1,610 2005 765 841 1,606 2006 790 822 1,612 2007 815 798 1,613 2008-2012 4,565 3,542 8,107 2013-2017 5,650 2,540 8,190 2018-2022 5,180 1,134 6,314 2023-2024 1,700 124 1,824 Total $ 20,900 $ 11,589 $ 32,489 (3). 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, 2002, the Agency obligation under the agreement amounted to $11,280,000. The beginning balance of this obligation was $4,756,000. During the year an additional $6,524,000 was advanced. Project-generated revenues as available will repay these amounts over the time needed to fully amortize the advance. 60 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): c. Redevelopment Agency: (4.) 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 1S and August 1" Principal Payment Dates August 1s' Purpose of Debt Capital Improvements Debt service requirements to maturity are (in thousands): Year Ending September 30 Principal Interest Total 2003 $ 260 $ 600 $ 860 2004 280 581 861 2005 300 561 861 2006 315 540 855 2007 340 518 858 2008-2012 2,085 2,180 4,265 2013-2017 2,870 1,276 4,146 2018-2019 1,440 173 1,613 Total $ 7,890 $ 6,429 $ 14,319 (5). Notes Payable: Year of Issuance 1988 -Type of Debt First Trust Deed Mortgage -Original Principal Amount $881,000 Security Real Property Interest Rates Variable Interest Payment Dates Monthly Princi al Payment Dates Monthly -Purpose of Debt Purchase or Property The principal ($293,000) and interest ($42,000) are due during 2002-2003. 61 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): d. Other Long-Term Obligations: (1). Reservoir Hill Assessment Bonds: Year of Issuance 1989 Type of Debt 1915 Improvement Act Bonds Original Principal Amount $1,653,905 Security Property tax assessments Interest Rates 6.00% to 8.15% Interest Payment Dates March 2" and September 15 Principal Payment Dates September 2" Purpose of Debt I Capital Improvements Debt service requirements to maturity are (in thousands): Year Ending September 30 Principal Interest Total 2003 $ 55 $ 65 $ 155 2004 55 58 153 2005 65 51 156 2006 70 42 157 2007 170 33 158 Total $ 415 $ 249 $ 779 (2.) Energy Financing Loan: Year of Issuance 1995 Type of Debt Note Payable —State of California Original Princi al Amount $1,173,000 Security Loan Agreement Interest Rates 6.1% Interest Payment Dates December 22 nd and June 22" Principal Payment Dates December 22" and June 22" Purpose of Debt Capital Improvements 62 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): d. Other Long-Term Obligations: (2.) Energy Financing Loan: Debt service requirements to maturity are (in thousands): Year Ending September 30, Principal Interest Total 2003 $197 $42 $239 2004 209 30 239 2005 221 18 239 2006 115 10 125 Total $742 $100 $ 842 (3). Leases Payable: The City entered into capital leases for various items: Year of Issuance 1993 through 2002 -Type of Debt Capital Leases -Original Principal Amount Various $93,000 to $1,200,000) -Security Lease Agreement Interest Rates 5.0% to 6.9% Interest Payment Dates Monthly, Quarterly, Semi- Annually Principal Payment Dates Monthly, Quarterly, Semi- Annually -Purpose of Debt Equipment Financing Future minimum lease payments to maturity are (in thousands): Year Ending September 30, Amount 2003 $1,440 2004 1,247 2005 1,069 2006 562 2007 132 Total minimum lease payments 4,450 Less interest (343) Total $4,107 63 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): d. Other Long-Term Obligations: (4) Compensated Absences: There is no repayment schedule to pay the compensated absences amount of$8,950,000 relating to governmental operations. (5). Claims Payable: There is no repayment schedule for the claims payable of$12,613,000 described in note 9. The City pays the claims upon final settlement. (6) Net Pension Obligation: There is no fixed repayment schedule to fund the unfunded net pension obligation totaling $8,593,000 for the City's Retirement Supplement Plan 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 1!ability for this plan since actuarial studies only began in 1991, which was after the plait was in place. e. Long-Term Obligations — Business Activities: Principal October 1, September Accrued Due Within Long-Term Obligations-Business Activities: 2001 Additions Retirements 30,2002 Interest One Year Compensated Absences 11(e)(1) $ 472 $ 34 $ (15) $ 491 $ - $ 236 Leases Payable 11(e)2 432 345 (182) 595 - 230 Total Long-Term Obligations-Business Activities $ 904 $ 379 $ (197) $ 1,086 $ - $ 466 (1.) Compensated Absences: There is no repayment schedule for the compensated absences amount of $540,000 relating to business activities. 64 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): e. Long-Term Obligations — Business Activities: (2.) Leases Payable: The City entered into capital leases for various items: Year of Issuance 1993 through 2002 -Type of Debt Capital Leases Original Principal Amount Various -Security Lease Agreement Interest Rates 5.0% to 6.9% Interest Payment Dates Monthly, Quarterly, Semi- Annually Principal Payment Dates Monthly, Quarterly, Semi- Annually -Purpose of Debt Equipment Financing Future minimum lease payments to maturity are (in thOL?sands): Year Ending September 30, Amount 2003 $246 2004 203 2005 77 2006 77 2007 39 Total minimum lease payments 642 Less interest (48) Total $594 65 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): 11(f). Long-Term Obligations Not Recorded in Financial Statements: Obligations Not Recorded in Financial Statements: October 1, September Community Facilities Districts: 2001 Additions Retirements 30,2002 Community Facilities District 1990-1 Special Assessment Tax Bonds 11(f)(1) $ 2,100 $ - $ (2,100) $ - Community Facilities District No. 1990-1 Special Tax Refunding Bonds 11(f)(2) - 2,155 2,155 Community Facilities District 2000-1 Special Assessment Tax Bonds 11(f)(3) - 16,000 - 16,000 Community Facilities District NO.2002-1 - 4,900 Special Assessment Tax Bonds 11(f)(4) 4,900 Total Community Facilities Districts 2,100 23,055 (2,100) 23,055 No-Commitment Debt 11(1)(5) 51,695 - - 51,695 Defeased Debt Outs°anding 11(f)(6) 13,580 - (13,580) - Total Obligations Not Recorded in Financial Statements $ 67,375 $ 23,055 $ (15,680) $ 74,750 (1.) Community Facilities District 1990/91 Special Assessment Tax Bonds: Year of Issuance 1990 Type of Debt Community Facilities District Assessment Bonds Original Principal Amount $2,400,000 Security Special Tax Levies Interest Rates 6.35% to 7.60% Interest Payment Dates Aril 1S and October 1s' Principal Payment Dates October 1s' Purpose of Debt Public Improvements and Police and Fire services These bonds were defeased during the year. 66 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): 11(f). Long-Term Obligations Not Recorded in Financial Statements: (2). Community Facilities District 1990-1 2001 Special Tax Refunding Bonds: Year of Issuance 2001 Type of Debt Community Facilities District Assessment Bonds Original Principal Amount $2,155,000 Security Special Tax Levies Interest Rates 4.00% to 5.40% Interest Payment Dates Aril 1st and October 1st Principal Payment Dates October 1 st Debt service requirements to maturity are (in thousands): Year Ending September 10, Principal Interest Total 2003 $ 85 $ 93 $ 178 2004 75 103 178 2005 80 100 180 2006 85 96 181 2007 85 93 178 2008-2012 490 407 897 2013-2017 625 274 899 2018-2022 630 87 717 Total $ 2,155 $ 1,253 $ 3,408 (3) Community Facilities District 2000-2001 Special Tax Bonds: Year of Issuance 2001 Type of Debt Community Facilities District Assessment Bonds -Original Principal Amount $16,000,000 Security Special Tax Levies Interest Rates 3.80% to 6.40% Interest Payment Dates September 1" and March 1s' Princi al Payment Dates September 1st Purpose of Debt Public Improvements for Grand Coast Resort 67 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): 11(f). Long-Term Obligations Not Recorded in Financial Statements: (3) Community Facilities District 2000-2001 Special Tax Bonds: Debt service requirements to maturity are (in thousands): Year Ending September 30, Principal Interest Total 2003 $ - $ 988 $ 988 2004 245 988 1,233 2005 255 979 1,234 2006 265 968 1,233 2007 280 956 1,236 2008-2012 1,625 4,554 6,179 2013-2017 2,155 4,026 6,181 2018-2022 2,930 3,248 6,178 2023-2027 4,010 2,174 6,184 2028-2031 4,235 704 4,939 Total $ 16,000 $ 19,585 $ 35,585 (4.) Community Facilities District Boeing: Year of Issuance 2002 Type of Debt Community Facilities District Assessment Bonds Original Principal Amount $4,900,000 Security Special Tax Levies Interest Rates 3.80% to 6.20% Interest Payment Dates March 1S and September 1S Principal Payment Dates September 1st 68 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): 11(Q. Long-Term Obligations Not Recorded in Financial Statements: (4.) Community Facilities District Boeing: Debt service requirements to maturity are (in thousands): Year Ending September 30, Principal Interest Total 2003 $ - $ 339 $ 339 2004 - 303 303 2005 5 303 308 2006 10 303 313 2007 15 302 317 2008-2012 190 1,490 1,680 2013-2017 445 1,415 1,860 2018-2022 815 1,246 2,061 2023-2027 1,335 933 2,268 2028-2032 2,085 421 2,506 Total $ 4,900 $ 7,056 $ 11,955 (5.) 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. These bond issues are (in thousands): Outstanding September 30, Original Issue Bond Issue 2002 Amount Five Points Senior Project Multi-Family Housing $ 9,500 $ 9,500 Revenue Bonds — Series A— 1991 Seabridge Villas Project Multi-Family Housing Revenue 25,000 25,000 Bonds — Series A— 1985 Huntington Village Senior Apartments 1997 - Revenue 4,895 4,895 Bonds Huntington Breakers Mortgage Revenue Bonds 16,000 16,000 Refunding Issue — 1996 Series A 69 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 12. CAPITAL ASSETS: a. Changes in Capital Assets: Capital asset activity for the year was (in thousands): Balance, Beginning of Balance, End of Governmental Activities: Year(Restated) Additions Dispositions Year Land $ 313,142 $ 4,273 $ (24) $ 317,391 Buildings 76,297 11,325 (1,153) 86,469 Machinery & Equipment 45,398 15,736 (10,617) 50,517 Construction in Progress 8,509 21,302 (7,609) 22,202 Infrastructure 268,397 5,682 - 274,079 Subtotal 711,743 58,318 (19,403) 750,658 Less Accumulated Depreciation (173,375) (12,576) 310 (185,641) Capital t.ssets of Governmental Activities - Net $ 538,368 $ 45,742 $ (19,093) $ 565,017 Balance, Beginning of Balance, End of Business Activities: Year(Restated) Additions Dispositions Year Land $ 8,598 $ - $ - $ 8,598 Buildings 16,478 14,516 (112) 30,882 Machinery and Equipment 5,983 2,376 (1,151) 7,208 Construction in Progress 5,593 4,140 (1,888) 7,845 Infrastructure 48,372 35,339 - 83,711 Total Cost 85,024 56,371 (3,151) 138,244 Less Accumulated Depreciation (38,681) (19,187) - (57,868) Capital Assets of Business Activities - Net $ 46,343 $ 37,184 $ (3,151) $ 80,376 Of the total additions of ($19,187,000) to the accumulated depreciation amount for business activities, ($3,005,000) represented current year depreciation expense and ($16,182,000) represented beginning accumulated depreciation on the capital assets of Sewer Enterprise Fund which began operations at the beginning of the year. 70 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 12. CAPITAL ASSETS (CONTINUED): b. Depreciation Expense: Depreciation in governmental activities was charged to the following functions/programs in the Statement of Activities (in thousands) Administrative Services $ 10 Building 39 City Attorney 4 City Administration 62 City Clerk 4 City Treasurer 19 Community Services 1,102 Economic Development 7 Fire 675 Information Systems 944 Library Services 360 Non-Departmental 245 Planning 11 Police 2,719 Public Works 6,375 TOTAL $ 12,576 Depreciation in business activities was charged to the following functions/programs in the Statement of Activities (in thousands): DEPRECIATION EXPENSE FOR BUSINESS ACTIVITIES: Water Fund $ 2,096 Emerald Cove Housing 82 Emergency Fire Medical 97 Refuse Collection - Sewer Service 711 Hazmat Service 4 Cultural Affairs 4 Ocean View Estates 11 Total $ 3,005 71 a City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 12. CAPITAL ASSETS (CONTINUED): c. Capital Assets Acquired via Capital Leases: At year-end the City's assets acquired through outstanding capital leases (see note 11) were (in thousands): Governmental Activities Business Activities Machinery and Equipment $4,472 $824 Less Accumulated Depreciation 1,007 48 Net Book Value 3,465 776 13.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. Huntington Beach Union High School District (HBUHSD) Sharing Agreement: In 1997 the City Council agreed to pay the HBUHSD certain increased sales tax revenues relating to the development of a new commercial site by Home Depot. The City will retain the first$50,000 of annual increased sales tax revenues and will pay HBUHSD a portion of the amount over $50,000 until the year 2015/2016. c. 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 $2,330,000. 72 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 13.COMMITMENTS AND CONTINGENCIES (CONTINUED): c. Property Tax Lawsuits: 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. d. 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$7.9 million pursuant to a Third Implementation Agreement approved on October 21, 2002. 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. On January 2, 2002 the Redevelopment Agency entered into an Owner Participation Agreement with Fountains Huntington Beach, LLC, to provide$2 million to meet the cost of providing and maintaining 80 affordable housing units for a period of 60 years. At year- end no liability had been incurred. The expectation is that the amount will be disbursed in fiscal year 2002-2003 73 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 14. OTHER INFORMATION: a. Expenditures Exceeding Appropriations: Expenditures exceeded appropriations at the departmental level in the funds shown (in thousands): General Fund: Current: City Treasurer $ (66) Debt Service: Principal (1,071) Public Financing Authority Debt Service Fund: Current: Non-Departmental (356) Non-Major Governmental Funds Drainage Current: Non-Departmental (3) PU')Iic Communications ,urrent: City Administrator (31) Debt Service: Principal (48) Interest (6) Grants Current: Planning (42) Community Services (7) Library Services (11) Reservoir Hill Assessment District Current: City Council (2) 74 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 14. OTHER INFORMATION (CONTINUED): b. Fund and Accumulated Deficits: The following funds had total fund deficits at year-end (in thousands): Governmental Funds: Redevelopment Agency Debt Service Fund $ (33,549) Non-Major Governmental Funds: Sewer Development (42) Narcotics Forfeiture (119) Pier Plaza (755) Non-Major Enterprise Funds: Refuse Collection (365) Internal Service Funds: Medical Insurance (1,211) Workers' Compensation (6,959) The deficits in funds other than the Redevelopment Agency Debt Service Fund will be eliminated through monitoring of expenditures and increasing charges to other funds. The Redevelopment Agency Debt Service Fund normally operates at a deficit since the Redevelopment Agency incurs debt to finance operations and capital improvements. By California law, this is how Redevelopment Agencies operate. This deficit primarily caused the negative unrestricted net assets for governmental operations in the Statement of Net Assets of$10,475,000. c. Restatement of Beginning Fund Balances and Net Assets: The City changed the method of recording certain transactions at October 1, 2001. For fiscal year 2001-2002, the Equipment Replacement and Liability Reserve activity will be reported as part of the General Fund. Below is a restatement of the beginning fund balances due to the changes (in thousands): 75 a + City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 14. OTHER INFORMATION (CONTINUED): c. Restatement of Beginning Fund Balances and Net Assets: Capital Assets Used in the Liability Equipment Redevelopment Non-Major Operation of Fund Financial General Reserve Replacement Agency Debt Govenmental Governmental Statements: Fund Fund Fund Service Fund Funds Funds Fund Equity(Beginning Balance)-October 1, 2001 $ 35,418 $ 1,342 $ 26,871 $ 3,511 $ 38,946 $ 146,785 a.)Changes in Recording of Internal Service Funds 15,122 (1,342) (26,871) - - 48,749 b.)GASB 33 Revenue Accruals 985 - - - 638 - c.)Revenues Improperly Accrued in Prior Year 2,581 - - - - d.)Changes in Recording of Redevelopment Agency Advances (1,596) - (57,527) - - e.)Restatements to Include Infrastructure - - - - - 342,834 Total Restatements 17,092 (1,342) (26,871) (57,527) 638 391,583 Fund Equity(Beginning Balance)as Restated $ 52,510 $ - $ - $ (54,016) $ 39,583 $ 538,368 a) The Equipment Replacement and Liability Insurance Reserve Fund were recorded as Internal Service Funds in prior years and now are recorded as part of the General Fund. b) The City recorded additional revenue relating to GASB 33 that had not been accrued in prior years. Amounts recorded in error in prior years. c) Changes in reporting long-term advances from the City to the Redevelopment Agency from GASB 34 d) Restatements to include net book value of infrastructure . Below is a calculation of how the beginning amount for Net Assets in the Government- Wide Financial Statements was computed (in thousands): Total Governmental Fund Balance-October 1, 2001 (Restated) $ 111,476 Capital Assets 518,965 Long-Term Debt (157,190) Accrued Interest (1,222) Other (5,227) Net Assets-Governmental Activities -October 1, 2001 $ 466,802 76 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 14. OTHER INFORMATION (CONTINUED): d. Bond Defeasance - Civic Improvement Corporation Refunding Certificates of Participation - 1993: 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) by the issuance of $31,095,000 of Public Financing Authority 2001-b Lease Revenue Bonds (see note 12(b)(5)). 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 of Participation 2,835 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 77 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 14. OTHER INFORMATION (CONTINUED): e. Bond Defeasance — Public Financing Authority 1992 Revenue Bonds: In July, 2002, the City defeased the Huntington Beach Public Financing Authority 1992 Revenue Bonds by issuing $20,900,000 of Redevelopment Agency 2002 Tax Allocation Bonds (see note 12(c)(2)). Below is a schedule of the required information for this defeasance (in thousands): Sources: Principal Amount of Bonds $20,900 Premium on Bonds 124 Cash Available from Existing Public Financing Authority Bonds 2,716 Total Sources $23,740 Uses: Deposit to Refunding Escrow $21,602 Deposit to Debt Service Reserve 1,649 Costs of Issuance 420 Underwriter Discount 69 Total Uses $23,740 The net present value benefit due to this refunding was $3,699,571 and the effective interest rate on the new borrowing was 4.58%. The total decrease in cash flows related to this refunding was $6,719,000. 78 Required Supplementary Information City of Huntington Beach Required Supplementary Information September 30, 2002 Budgetary Information The City Council must annually adopt a budget by September 30 of the prior fiscal year. The budgeted expenditures become the appropriations to the various departments. The budget includes estimates for revenue that, along with the appropriations, compute the budgetary fund balance. The appropriated budget covers substantially all governmental fund expenditures with the exception of capital improvement projects (capital projects funds) carried forward from prior years, which constitute a legally authorized non-appropriated budget. The City Council may amend the budget at any time. The City Administrator may transfer funds from between object purposes (personal services, operating expenditures or capital outlay expenditures)within the same department without changing the total departmental budget. Department heads may transfer funds from like object categories of the same department. The City Council must approve any changes to departmental budgets. Expenditures may not exceed appropriations at the departmental level. All unused appropriations lapse at year-end. During the year the City Council made several supplemental appropriations with included carryovers of prior year encumbrances all of which were within available fund balance and estimated revenue amounts. The City Council adopts governmental fund budgets consistent with generally accepted principles as legally required. There are no significant non-budgeted financial activities. Revenues for special revenue funds are budgeted by enti-.lements, grants and estimates of future development and economic growth. Expenditures and transfers are budgeted based upon available financial resources. On or before May 31 of each year, each department submits data to the City Administrator for budget preparation. Staff prepares the budget by fund,function and activity. The budget includes information on past years, current year estimates and requested appropriations for the next fiscal year. Before August 1,the City Council receives the proposed budget. The City Council holds public hearings and may amend the budget by a majority vote. Changes to the budget must be within the available revenues and reserves. These financial statements show budgetary data for the General, Special Revenue, Capital Projects and Debt Service Funds. The original budget, revised budget, actual expenditures, and variance amounts are shown. The City uses an encumbrance system as an aid in controlling expenditures.When the City issues a purchase order for goods or services, it records an encumbrance until the vendor delivers the goods or performs the service. At year-end, the City reports all outstanding encumbrances as reservations of fund balance in governmental fund types. The City reappropriates these encumbrances into the new fiscal year. Below is a schedule of a budget to actual comparison of the General Fund's Revenues, and Expenditures: 79 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES- BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2002 (In Thousands) General Fund Original REVENUES: Budget Final Budget Actual Variance Property Taxes $28,578 $28,578 $26,796 $ (1,782) Other Taxes 57,676 57,676 51,808 (5,868) Licenses and Permits 6,650 6,650 6,397 (253) Fines,Forfeitures and Penalties 3,765 3,765 3,797 32 From Use of Money and Property 7,821 7,821 8,576 755 From Other Agencies 12,026 12,026 13,180 1,154 Charges for Current Service 11,853 11,853 10,107 (1,746) Other 885 885 794 (91) TOTAL REVENUES 129,254 129,264 121,455 (7,799) EXPENDITURES: Current: City Council 260 261 237 24 City Administrator 2,189 2,228 1,717 511 City Treasurer 1,047 1,042 1,108 (66) City Attorney 1,912 3,499 3,363 136 City Clerk 603 743 676 67 Administrative Services 8,383 7,860 7,095 765 Planning 2,942 3,573 2,400 1,173 Building 2,733 2,806 2,591 215 Fire 19,033 18,900 17,858 1,042 Information Systems 3,670 3,758 2,720 1,038 Police 40,536 39,746 37,229 2,517 Economic Development 958 980 706 274 Community Services 9,765 10,267 9,944 323 Library Services 3,647 3,689 3,485 204 Public Works 19,413 20,060 17,727 2,333 Non-Departmental 14,352 12,194 9,676 2,518 Capital Outlay 7,360 12,979 10,602 2,377 Debt Service: - Principal - - 1,071 (1,071) Interest 860 860 121 739 TOTAL EXPENDITURES 139,663 145,445 130,326 15,119 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (10,409) (16,191) (8,871) 7,320 OTHER FINANCING SOURCES(USES): Transfers In 7,412 7,412 5,017 (2,395) Proceeds of Long-Term Debt - - 3,219 3,219 Transfers Out (8,609) (10,857) (9,145) 1,712 TOTAL OTHER FINANCING SOURCES(USES) (1,197) (3,445) (909) 2,536 EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)EXPENDITURES AND OTHER USES (11,606) (19,636) (9,780) 9,856 FUND BALANCE-BEGINNING OF YEAR 35,418 35,418 35,418 35,418 Prior Period Adjustment 16,107 16,107 16,107 FUND BALANCE AS RESTATED 51,525 51,525 51,525 35,418 FUND BALANCE-END OF YEAR $ 39,919 $ 31,889 $ 41,745 $ 9,856 so CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2002 (In Thousands) Public Financing Authority Debt Service Fund Original REVENUES: _ Budget Final Budget Actual Variance From Use of Money and Property $ 539 $ 539 $ 609 $ 70 EXPENDITURES: Current: Non-Departmental - 156 512 (356) Debt Service: Principal 1,205 21,923 21,923 - Interest 2,702 5,345 4,188 1,157 TOTAL EXPENDITURES 3,907 27,424 26,623 801 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (3,907) (26,885) (26,014) 871 OTHER FINANCING SOURCES(USES): Transfers In 9,613 11,632 2,019 Proceeds of Long-Term Debt - 31,095 31,095 - issuance Discount - (156) (156) - Payments toEscrow - (31,071) (31,071) - Transfers Out - (2,771) (2,771) TOTAL OTHER FINANCING SOURCES(USES) 6,710 8,729 2,019 EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)EXPENDITURES AND OTHER USES (3,907) (20,175) (17,285) 2,890 FUND BALANCE-BEGINNING OF YEAR 24,851 24,851 24,851 FUND BALANCE-END OF YEAR $ 20,944 $ 4,676 $ 7,566 $ 2,890 Redevelopment Agency Debt Service Fund Original REVENUES: Budget Final Budget Actual Variance Property Taxes $ 6,200 $ 6,200 $ 6,223 $ 23 From Use of Money and Property 260 18,852 18,774 (78) TOTAL REVENUES 6,460 25,052 24,997 (55) EXPENDITURES: Current: Non-Departmental 931 1,168 648 520 Debt Service: Principal 1,567 352 352 - Interest 2,953 2,794 2,712 82 TOTAL EXPENDITURES 5,451 4,314 3,712 602 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 1,009 20,738 21,285 547 OTHER FINANCING SOURCES(USES): Transfers In - 2,715 2,715 - Proceeds of Long-Term Debt - 20,900 20,900 - Premium(Discount)on Issuance of Long-Term Debt - (68) (68) - Payments to Escrow - (21,602) (21,602) - Transfers Out - (2,717) (2,761) (44) TOTAL OTHER FINANCING SOURCES(USES) _ (772) (816) (44) EXCESS OF REVENUES AND OTHER SOURCES OVER EXPENDITURES AND OTHER USES 1,009 19,966 20,469 503 •FUND BALANCE-BEGINNING OF YEAR 3,511 3,511 3,511 - Prior Period Adjustments (57,527) (57,527) FUND BALANCE AS RESTATED 3,511 (54,016) (54,016) FUND BALANCE-END OF YEAR $ 4,520 $ (34,050) $ (33,547) $ 503 81 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2002 (In Thousands) Redevelopment Agency Capital Projects Original REVENUES: Budget Final Budget Actual Variance Other Taxes $ 822 $ 822 $ 705 $ (117) From Use of Money and Property 1,171 1,171 568 (603) Other 77 77 220 143 TOTAL REVENUES 2,070 2,070 1,493 (577) EXPENDITURES: Current: City Attorney 500 550 207 343 Economic Development 1,315 1,503 1,026 477 Capital Outlay 624 7,424 6,578 846 TOTAL EXPENDITURES 2,439 9,477 7,811 1,666 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (369) (7,407) (6,318) 1,089 OTHER FINANCING SOURCES(USES): Transfers In 20 20 - (20) Proceeds of Long-Term Debt - 6,524 6,524 - Transfers Out (10) (10) (10) - TOTAL OTHER FINANCING SOURCES(USES) 10 6,534 6,514 (20) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)EXPENDITURES AND OTHER USES (359) (873) 196 1,069 FUND BALANCE-BEGINNING OF YEAR 1,409 14,019 14,019 FUND BALANCE-END OF YEAR $ 1,050 $ 13,146 $ 14,215 $ 1,069 Capital Improvement OHE inal REVENUES: Budget Final Budget Actual Variance From Use of Money and Property 150 $ 150 $ 70 $ (80) From Other Agencies 2,523 2,523 2,523 - TOTAL REVENUES 2,673 2,673 2,599 (74) EXPENDITURES: Current: Planning 202 202 - 202 Building 1,343 1,325 400 925 Information Systems 3,069 3,120 780 2,340 Community Services 72 72 67 5 Public Works 598 3,224 1,596 1,628 Non-Departmental 571 3,094 2,548 546 Capital Outlay 6,662 32,354 20,881 11,473 Debt Service: Principal 185 185 185 - Interest 55 55 55 - TOTAL EXPENDITURES 12,757 43,631 26,512 17,119 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (10,084) (40,958) (23,913) 17,045 OTHER FINANCING SOURCES(USES): Transfers In 3,102 19,226 19,226 - Transfers Out - (894) (894) - TOTAL OTHER FINANCING SOURCES(USES) 3,102 18,332 18,332 EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)EXPENDITURES AND OTHER USES (6,982) (22,626) (5,581) 17,045 FUND BALANCE-BEGINNING OF YEAR 6,813 6,813 6,813 FUND BALANCE-END OF YEAR $ (10,084) $ (34,145) $ 1,232 $ 17,045 82 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2002 (In Thousands) Public Financing Authority Capital Projects Fund Original REVENUES: Budget Final Budget Actual Variance From Use of Money and Property $ $ - $ 1,493 $ 1,493 OTHER FINANCING SOURCES(USES): Transfers In 11 11 - Transfers Out (13,476) (13,476) - TOTAL OTHER FINANCING SOURCES(USES) - (13,465) (13,465) - FUND BALANCE-BEGINNING OF YEAR 28,701 28,701 28,701 FUND BALANCE-END OF YEAR $ 28,701 $ 15,236 $ 16,729 $ 1,493 83 CITY OF HUNTINGTON BEACH REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2002 SCHEDULE OF FUNDING PROGRESS RETIREMENT PLAN- NORMAL Entry Age Excess Normal Assets as a Actuarial Actuarial Percentage of Actuarial Valuation Accrued Value of Funded Covered Covered Date Liability(AAL) Assets Excess Assets Ratio Payroll Payroll 1999 Safety $217,230 $257,921 $40,691 118.7% $22,502 180.8 % Non Safety 147,194 210,071 62,877 142.7% 30,622 205.3 % Total $364,424 $467,992 $103,568 128.4% $53,124 195.0% 2000 Safety $258,857 $291,309 $32,452 112.5% $23,270 139.5% Non Safety 163,688 230,236 66,548 140.7% 34,683 191.9% Total $422,545 $521,545 $99,000 123.4%, $57,963 170.8% 2001 Safety $283,438 $295,280 $11,842 104.2% $27,717 42.7 % Non Safety 177,467 237,108 59,641 133.6% 35,985 165.7 % Total $460,906 $532,388 $71,483 115.5% $63,702 112.2% SCHEDULE OF FUNDING PROGRESS RETIREMENT PLAN-SUPPLEMENTAL Entry Age Actuarial UAAL as a% Actuarial Valuation Normal Accrued Value of Unfunded AAL Funded Covered of Covered Date Liability Assets (UAAL) Ratio Payroll Payroll 6/30/94 Actual $ 14,673 $ 52 $ 14,725 0.4% $ 53,593 -27.5% 6/30/95 Update 15,776 290 16,066 1.8% 51,779 -31.0% 6/30/96 Actual 16,071 120 16,191 0.7% 54,368 -29.8% 6/30/1997Actual 25,342 2,334 23,008 -10.1% 49,881 -46.1% 6/30/98 Update 26,493 3,251 23,242 -14.0% 48,585 -47.8% 6/30/99 Actual 1 28,601 4,162 24,439 -17.0% 50,723 -48.2% 6/30/2000 Update 28,844 5,077 23,767 -21.4% 57,674 -41.2% 6/30/2001 Actual 36,453 6,678 29,775 -22.4% 63,345 -47.0% 6/30/2002 Update 35,524 8,775 26,749 -32.8% 65,137 -41.1% 84 Supplementary Information Non-Major Governmental Funds 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 Development 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 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'/z 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. • 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. Debt Service Funds account for the receipts for and payment of general long-term debt. • 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. Capital Projects Funds account for the acquisition and construction of capital assets other than those financed by proprietary fund types. • The Low-income Housinq Fund accounts for the 20% set-aside of tax increment revenues required by the California Health and Safety Code. • The Pier Rebuilding Fund accounts for the rebuilding of the City's pier. • The Parkinq In-Lieu Fund records construction activity from developers who pay fees in-lieu of directly providing parking spaces in certain areas of the City. • The Holly Seacliffe Fund accounts for capital improvements made to the Holly Seacliffe area. • The Pier Plaza Fund accounts for capital improvements for the Pier Plaza area. • The Library Cultural Facilities Fund accounts for the continued costs of the expansion of the City's Library facilities related to the City's growth. CITY OF HUNTINGTON BEACH BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2002 (in thousands) SPECIAL REVENUE FUNDS Sewer Public Narcotics ASSETS: Gas Tax Development Drainage Communications Forfeiture Cash and Investments $ 2,334 $ 42 $ $ 160 $ Taxes Receivable 612 - - Other Receivables 22 26 3 130 Advances to Other Funds 1,280 328 621 - Other Assets TOTAL ASSETS $ 4,248 $ 396 $ 624 $ 290 $ LIABILITIES AND FUND BALANCES LIABILITIES: Accounts Payable $ 642 $ 236 $ 108 $ 5 $ Accrued Payroll 3 5 31 Due to Other Funds - 37 119 Deposits Payable - Deferred Revenue 780 197 371 TOTAL LIABILITIES 1,425 438 516 36 119 FUND BALANCES: Reserved for: Encumbrances 974 588 8 - Advances 500 131 250 Total Reserved Fund Balances 1,474 719 250 8 Unreserved Fund Balances Unreserved,Designated for Future Expenditures 875 - - - - Undesignated 474 (761) (142) 246 (119) Total Unreserved Fund Balance 1,349 (761) (142) 246 (111 TOTAL FUND BALANCES 2 823 42 108 254 191 TOTAL LIABILITES AND FUND BALANCES 4,248 396 624 290 85 SPECIAL REVENUE FUNDS Air Traffic Fourth of Library Park Acquisition Total Special Transportation Quality Impact July Services Grants and Development Revenue Funds $ 3,836 $ 433 $ 6,885 $ 63 $ 1,137 $ 191 $ 964 $ 16,045 329 - - - - - 941 26 4 29 5 8 6,579 13 6,845 - - - - - - 4,788 7,017 1,617 1,617 $ 4,191 $ 437 S 6,914 $ 68 $ 1,145 $ 6,770 $ 7,382 $ 32,465 $ 173 $ 1 $ 16 $ 4 $ 26 $ 550 $ 36 $ 1,797 17 68 - - 5 38 - 167 - - - - - 156 9 1,617 1,626 3,260 4,789 9,397 190 69 16 4 31 3,867 6,442 13,143 12 167 12 9 3 2,913 373 5,059 881 12 167 12 9 3 2,913 373 5,940 1,983 201 1,983 55 318 - - 5,415 2,006 4.903 793 567 7,967 3,989 201 6,886 65 1,111 567 13,382 4 001 368 6 898 64 1,114 2,913 940 19,322 4,191 $ 437 6,914 68 1,145 $ 6,770 $ 7,382 32,465 86 CITY OF HUNTINGTON BEACH BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2002 (in thousands) (continued) DEBT SERVICE FUNDS CAPITAL PROJECTS FUNDS Reservoir Hill Civic Total Debt Assessment Improvement Service Low-Income ASSETS: District Corporation Funds Housing Pier Rebuilding Cash and Investments $ 41 $ $ 41 $ 4,184 $ 294 Cash and Investments with Fiscal Agent 113 113 - Taxes Receivable 55 55 - Other Receivables - - 2,749 Advances to Other Funds 2,094 Other Assets TOTAL ASSETS $ 209 $ $ 209 $ 9,027 $ 294 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts Payable $ - $ $ - $ - $ 4 Accrued Payroll 3 - Due to Other Funds - Deposits Payable - - - Deferred Revenue 24 24 2,720 TOTAL LIABILITIES 24 24 2,723 4 FUND BALANCES: Reserved for: Encumbrances - - 3 - Advances 2,093 Total Reserved Fund Balances 2,096 Unreserved Fund Balances Unreserved,Designated for Future Expenditures 163 - Undesignated 185 185 4,045 290 Total Unreserved Fund Balance 185 185 4,208 290 TOTAL FUND BALANCES 185 185 6,304 290 TOTAL LIABILITES AND FUND BALANCES $ 209 $ $ 209 $ 9,027 $ 294 87 CAPITAL PROJECTS FUNDS Total 0 on. Library Capital Major Holly Cultural Projects Govemmental Parkin In-Lieu SeacliN Pier Plaza Facilities Funds Funds $ 470 $ 1,178 $ - $ 886 $ 7,012 $ 23,098 - - 10 - 10 123 - - - 996 3 6 4 2,762 9,607 - - 2,094 9,111 1,617 $ 473 $ 1,184 S 10 $ 890 $ 11,878 $ 44,552 $ $ 28 $ 9 $ 41 $ 1,838 - - 3 170 737 737 893 - - 1,626 - 2,720 12,141 765 9 3,501 16,668 - 5 8 5,067 2,093 2,974 5 2,101 8,041 - 163 5,578 473 1,184 (755) 876 6,113 14,265 473 1,184 (755) 876 6,276 19,843 473 1,184 (755) 881 8,377 27,884 $ 473 $ 1,184 $ 10 $ 890 $ 11,878 $ 44,552 88 CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) Special Revenue Funds Sower Public Narcotics REVENUES: Gas Tax Develo ment Draina a Communications Forfeiture Transportation Other Taxes $ $ $ $ 500 $ $ 2,069 Licenses and Perils - From Use of Money and Property 89 5 5 144 From Other Agencies 4,827 25 - 160 42 Charges for Current Service - 81 229 33 - - Other 26 70 TOTAL REVENUES 4,942 111 229 538 160 2,325 EXPENDITURES: Current: City Administrator - - 392 - - Planning - Fire - Police 21 Economic Development Community Services Library Services - - Public Works 446 225 - 672 Non-Departmental - 3 - Capital Outlay 3,529 1,491 742 30 1,946 Debt Service: Principal - - 48 Interest 6 TOTAL EXPENDITURES 3,975 1,716 745 476 21 2,618 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 967 (1,606) (616) 62 139 (293) OTHER FINANCING SOURCES(USES): Transfers In - - - Transfers Out (2,400) (34) TOTAL OTHER FINANCING SOURCES(USES) (2,400) (34) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (1,433) (1,605) (516) 28 139 (293) FUND BALANCE-BEGINNING OF YEAR 3,946 1,563 624 226 (258) 3,966 Prior Period Adjustments 310 - - 328 FUND BALANCE AS RESTATED 4,256 1,563 624 226 (258) 4,294 FUND BALANCE-END OF YEAR $ 2,823 $ (42) $ 108 $ 254 $ (119) $ 4,001 89 Special Revenue Funds Park Aequisiton Total Special Air Library and Revenue Quality Traffic Impact Fourth of July Services Grants Develo ment Funds $ $ $ $ a $ - $ 2,569 748 748 15 224 1 333 476 48 1,340 220 - - 7,430 19 12,723 1,142 - 433 - 1,918 247 10 81 558 992 235 1,366 248 776 7,987 1,373 20,290 - - - - - - 392 185 185 166 166 740 761 1,258 - 1.258 231 232 502 965 - 359 99 458 73 15 - 772 2,203 3 311 394 4,923 1,852 15,218 75 - 123 185 191 384 409 231 359 8,635 2,354 21,923 (149) 957 17 417 (648) (981) (1,633) - - 5 594 35 634 (84) _ (705) (5,276) (8,499) (84) 5 (705) (4,682) 35 (7,865) (233) 957 22 (288) (5,330) (946) (9,498) 601 5,941 42 1,402 8,243 1,886 28.182 638 601 5,941 42 1,402 8,243 1,886 28,820 $ 368 $ 6,898 $ 64 S 1,114 S 2,913 S 940 $ 19,322 ao CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) (CONTINUED) Debt Service Funds CAPITAL PROJECTS FUNDS Reservoir Hill Civic Assessment ImprovemaM Total Debt REVENUES: District Co oration ServI%Fund Lm4ncome Housing Pier Rebuilding P.rki.q In•Lleu Property Taxes $ 185 $ $ 185 $ $ - $ Other Taxes - 2 Licenses and Permits - - 17 From Use of Money and Property 5 14 19 195 268 15 From Other Agencies - - - - - Charges for Current Service - Other 18 TOTAL REVENUES 190 14 204 195 288 32 EXPENDITURES: Current: City Administrator - - - - - Planning Fire Police Economic Development 83 Community Services - Library Services - - - - - - Public Works - - Non-Departmental 20 20 - - capital outlay - 984 88 Debt Service: Principal 190 190 - Interest 50 50 TOTAL EXPENDITURES 260 260 1,067 88 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES _ (70) 14 (56) (872) 200 32 OTHER FINANCING SOURCES(USES): Transfers In - 1,245 Transfers Out (2,834) (2,834) (35) (590) TOTAL OTHER FINANCING SOURCES(USES) (2,834) (2,834) 1,210 (590) EXCESS OF REVENUES AND OTHER S(URCES OVER(UNDER) EXPENDITURES AND OTHER USES (70) (2,820) (2,890) 338 (390) 32 FUND BALANCE-BEGINNING OF YEAR 255 2,820 3,075 5,966 680 "1 Prior Period Adjustments FUND BALANCE AS RESTATED 255 2,820 3,075 5,966 680 "1 FUND BALANCE-END OF YEAR $ 185 $ $ 185 $ 6,304 $ 290 $ 473 91 CAPITAL PROJECTS FUNDS Total Non-Major Library Cultural Total Capital G—,nm ntal Holly 9emliff Mar Pl.. Facilities Pro acts Fund. Fund. $ $ $ $ - $ 185 2 2,571 17 765 40 366 32 916 2,275 - - 12,723 1 571 572 2.490 570 4 592 1,584 610 367 607 2,099 22,593 - - 392 185 166 761 83 1,341 89 - 89 1,054 - 407 407 865 39 - 39 2,242 23 5 1,077 16,295 - 313 241 5 128 407 1,695 23,878 605 239 200 404 (1,285) - - 1,245 1,879 (335) (960) (12,293) (335) 285 (10,414) 605 (96) 200 689 (11,699) 579 (659) 681 7,688 38,945 638 579 (659) 681 7,688 39,583 S 1,184 E (765) $ 881 j 8,377 $ 27,884 92 CITY OF HUNTINGTON B=ACH SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) Gas Tax Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 40 $ 40 $ 89 $ 49 From Other Agencies 4,901 4,901 4,827 (74) Other - - 26 26 TOTAL REVENUES 4,941 4,941 4,942 1 EXPENDITURES: Current: Public Works 1,167 1,408 446 962 Capital Outlay 2,591 5,953 3,529 2,424 TOTAL EXPENDITURES 3,758 7,361 3,975 3,386 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 1,183 (2,420) 967 3,387 OTHER FINANCING SOURCES(USES): Transfers Out (2,400) (2,400) (2,400) - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES 1,183 (4,820) (1,433) 3,387 FUND BALANCE-BEGINNING OF YEAR 3,946 3,946 3,946 - Prior Period Adjustments - 310 310 - FUND BALANCE AS RESTATED 3,946 4,256 4,256 FUND BALANCE-END OF YEAR $ 5,129 $ (664) $ 2,823 $ 3,387 Sewer Development Original Final REVENUES: Budget Budget Pctual Variance From Use of Money and Property $ 70 $ 70 $ 5 $ (65) From Other Agencies - - 25 25 Charges for Current Service 100 100 81 (19) TOTAL REVENUES 170 170 111 (59) EXPENDITURES: Current: Public Works 379 516 225 291 Capital Outlay 89 2,302 1,491 811 TOTAL EXPENDITURES 468 2,818 1,716 1,102 EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (298) (2,648) (1,605) 1,043 FUND BALANCE-BEGINNING OF YEAR 1,663 1,563 1,563 FUND BALANCE-END OF YEAR $ 1,265 $ (1,085) $ (42) $ 1,043 93 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) (CONTINUED) Drainage Original Final REVENUES: Budget Budget Actual Variance Charges for Current Service $ - $ 200 $ 229 $ 29 EXPENDITURES: Current: Non-Departmental - - 3 (3) Capital Outlay 193 995 742 253 TOTAL EXPENDITURES 193 995 745 250 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (193) (795) (516) 279 FUND BALANCE-BEGINNING OF YEAR 624 624 624 FUND BALANCE-END OF YEAR $ 431 $ (171) $ 108 $ 279 Public Communications Original Final REVENUES: Budget Budget Actual Variance Other Taxes $ 458 $ 458 $ 500 $ 42 From Use of Money and Property - 5 5 Charges for Current Service 40 40 33 (7) TOTAL REVENUES 498 498 538 40 EXPENDITURES: Current: City Administrator 331 361 392 (31) Capital Outlay 96 70 30 40 Debt Service: Principal - - 48 (48) Interest 6 (6) TOTAL EXPENDITURES 427 431 476 (45) EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 71 67 62 (5) OTHER FINANCING SOURCES(USES): Transfers Out (89) (34) (34) - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (18) 33 28 (5) FUND BALANCE-BEGINNING OF YEAR 226 226 226 FUND BALANCE-END OF YEAR $ 208 $ 259 $ 254 $ (5) a _ Narcotics Forfeiture Original Final REVENUES: Budget Budget Actual Variance From Other Agencies $ 25 $ 25 $ 160 $ 135 EXPENDITURES: Police 25 30 21 9 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (5) 139 144 FUND BALANCE-BEGINNING OF YEAR (258) (258) (258) - FUND BALANCE-END OF YEAR $ (258) $ (263) $ (119) $ 144 94 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) (CONTINUED) Transportation Original Final REVENUES: Budget Budget Actual Variance Other Taxes $ 1,718 $ 1,718 $ 2,069 $ 351 From Use of Money and Property 40 40 144 104 From Other Agencies 160 160 42 (118) Other 70 70 TOTAL REVENUES 1,918 11918 2,325 407 EXPENDITURES: Current: Public Works 721 792 672 120 Capital Outlay 3,705 3,798 1,946 1,852 TOTAL EXPENDITURES 4,426 4,590 2,618 1,972 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (2,508) (2,672) (293) 2,379 FUND BALANCE-BEGINNING OF YEAR 3,966 3,966 3,966 - Prior Period Adjustments - 328 328 - FUND BALANCE AS RESTATED 3,966 4,294 4,294 FUND BALANCE-END OF YEAR $ 1,458 $ 1,622 $ 4,001 $ 2,379 Air Quality Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 20 $ 20 $ 15 $ (5) From Other Agencies 210 210 220 10 TOTAL REVENUE:; 230 230 235 5 EXPENDITURES: Current: Information Systems 50 50 - 50 Public Works 85 186 73 113 Capital Outlay 397 413 311 102 TOTAL EXPENDITURES 532 649 384 265 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (302) (419) (149) 270 OTHER FINANCING SOURCES(USES): Transfers Out - (24) (84) (60) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (302) (443) (233) 210 FUND BALANCE-BEGINNING OF YEAR 601 601 601 FUND BALANCE-END OF YEAR $ 299 $ 158 $ 368 $ 210 Traffic Impact Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 40 $ 40 $ 224 $ 184 From Other Agencies 160 160 - (160) Charges for Current Service 300 300 1,142 842 TOTAL REVENUES 500 500 1,366 866 EXPENDITURES: Current: Public Works 50 75 15 60 Capital Outlay 153 526 394 132 TOTAL EXPENDITURES 203 601 409 192 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 297 (101) 957 1,058 FUND BALANCE-BEGINNING OF YEAR 5,941 5,941 5,941 FUND BALANCE-END OF YEAR $ 6,238 $ 5,840 $ 6,898 $ 1,058 95 CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) (CONTINUED) Fourth of July Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 2 $ 2 $ 1 $ (1) Other 200 200 247 47 TOTAL REVENUES 202 202 248 46 EXPENDITURES: Current: Community Services 253 263 231 32 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (51) (61) 17 78 OTHER FINANCING SOURCES(USES): Transfers In - 5 5 EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (51) (56) 22 78 FUND BALANCE-BEGINNING OF YEAR 42 42 42 FUND BALANCE-END OF YEAR $ (9) $ (14) $ 64 $ 78 Library Services Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 338 $ 338 $ 333 $ (5) Charges for Current Service 320 320 433 113 Other 6 6 10 4 TOTAL REVENUES 664 664 7.r6 112 EXPENDITURES: Current: Library Services 827 386 359 27 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (163) 278 417 139 OTHER FINANCING SOURCES(USES): Transfers Out (705) (705) (705) - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (868) (427) (288) 139 FUND BALANCE-BEGINNING OF YEAR 1,402 1,402 1,402 FUND BALANCE-END OF YEAR $ 534 $ 975 $ 1,114 $ 139 ss 1 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) Grants Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 1,030 $ 1,030 $ 476 $ (554) From Other Agencies 14,888 14,888 7,430 (7,458) Other 81 81 TOTAL REVENUES 15,918 15,918 7,987 (7,931) EXPENDITURES: Current: City Administrator - 50 - 50 Planning 142 143 185 (42) Fire 43 534 166 368 Police 868 1,119 740 379 Economic Development 803 1,805 1,258 547 Community Services 111 225 232 (7) Library Services 83 88 99 (11) Public Works 1,590 3,020 772 2,248 Capital Outlay 15,466 19,726 4,923 14,803 Debt Service: Principal - 75 75 - Interest 185 185 TOTAL EXPENDITURES 19,106 26,785 8,635 18,285 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (3,188) (10,867) (648) 10,219 OTHER FINANCING SOURCES(USES): Transfers In 594 594 - Transfers Out - (5,276) (5,276) _ - TOTAL OTHER FINANCING SOURCES(USES) (4,6^2) (4,682) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (3,188) (15,549) (5,330) 10,219 FUND BALANCE-BEGINNING OF YEAR 8,243 8,243 8,243 FUND BALANCE-END OF YEAR $ (3,188) $ (7,306) $ 2,913 $ 10,219 Park Acquisition and Development Original Final REVENUES: Budget Budget Actual Variance Licenses and Permits $ 499 $ 499 $ 748 $ 249 From Use of Money and Property - - 48 48 From Other Agencies - 19 19 Other - - 558 558 TOTAL REVENUES 499 499 1,373 874 EXPENDITURES: Current: Community Services 815 1,504 502 1,002 Capital Outlay 3,485 3,360 1,852 1,508 TOTAL EXPENDITURES 4,300 4,864 2,354 2,510 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (3,801) (4,365) (981) 3,384 OTHER FINANCING SOURCES(USES): Transfers In 35 35 35 - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (3,766) (4,330) (946) 3,384 FUND BALANCE-BEGINNING OF YEAR 1,886 1,886 1,886 FUND BALANCE-END OF YEAR $ (1,880) $ (2,444) $ 940 $ 3,384 97 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) Reservoir Hill Assessment District Original Final REVENUES: Budget Budget Actual Variance Property Taxes $ 151 $ 151 $ 185 $ 34 From Use of Money and Property 23 23 5 (18) TOTAL REVENUES 174 174 190 16 EXPENDITURES: Current: Non-Departmental 1 18 20 (2) Debt Service: Principal 150 220 190 30 Interest - 62 50 12 TOTAL EXPENDITURES 151 300 260 40 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 23 (126) (70) 56 FUND BALANCE-BEGINNING OF YEAR 255 255 255 FUND BALANCE-END OF YEAR $ 278 $ 129 $ 185 $ 56 Civic Improvement Corporation Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 130 $ 130 $ 14 $ (116) OTHER FINANCING(USES): Transfers Out (2,834) (2,834) (2,834) - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (2,704) (2,704) (2,820) (116) FUND BALANCE-BEGINNING OF YEAR 2,820 2,820 2,820 FUND BALANCE-END OF YEAR $ 116 $ 116 $ - $ (116) Low-Income Housing Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 110 $ 110 $ 195 $ 85 EXPENDITURES: Current: Economic Development 135 149 83 66 Capital Outlay 5,190 5,136 984 4,152 TOTAL EXPENDITURES 5,325 5,285 1,067 4,218 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (5,325) (5,175) (872) 4,303 OTHER FINANCING SOURCES(USES): Transfers In 1,259 1,259 1,245 (14) Transfers Out (35) (35) (35) - TOTAL OTHER FINANCING SOURCES(USES) 1,224 1,224 11210 (14) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (4,101) (3,951) 338 4,289 FUND BALANCE-BEGINNING OF YEAR 5,966 5,966 5,966 FUND BALANCE-END OF YEAR $ (5,325) $ 791 $ 6,304 $ 4,289 98 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) Pier Rebuilding Original Final REVENUES: Budget Budget Actual Variance Other Taxes $ 24 $ 24 $ 2 $ (22) From Use of Money and Property 560 560 268 (292) Other 24 24 18 (6) TOTAL REVENUES 608 608 288 (320) EXPENDITURES: Capital Outlay - 90 88 2 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 608 518 200 (318) OTHER FINANCING SOURCES(USES): Transfers Out (590) (590) (590) - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES 18 (72) (390) (318) FUND BALANCE-BEGINNING OF YEAR 680 680 680 FUND BALANCE-END OF YEAR $ 698 $ 608 $ 290 $ (318) Parking In-Lieu Original Final REVENUES: Budget Budget Actual Variance Licenses and Permits $ - $ $ 17 $ 17 From Use of Money and Property - 15 15 TOTAL REVENUES - - 32 3 "1 4 FUND BALANCE-BEGINNING OF YEAR 441 41 FUND BAL 1NCE-END OF YEAR $ 441 $ 441 $ 473 $ 32 99 CITY OF HUNTINGTON BEACH COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) Holly Seacliff Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ - $ - $ 40 $ 40 Other 570 570 TOTAL REVENUES 610 610 EXPENDITURES: Capital Outlay 147 147 5 142 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (147) (147) 605 752 FUND BALANCE-BEGINNING OF YEAR 579 579 579 FUND BALANCE-END OF YEAR $ 432 $ 432 $ 1,184 $ 752 Pier Plaza Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 600 $ 600 $ 366 $ (234) Charges for Current Service 1 1 TOTAL REVENUES 600 600 367 (233) EXPENDITURES: Current: Community Services 90 90 89 1 Public Works 75 98 39 59 TOTAL EXPENDITURES 165 188 128 60 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 435 412 239 (173) OTHER FINANCING SOURCES(USES): Transfers Out (335) (335) (335) - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES 100 77 (96) (173) FUND BALANCE-BEGINNING OF YEAR (659) (659) (659) FUND BALANCE-END OF YEAR $ (559) $ (582) $ (755) $ (173) Library Cultural Facilities REVENUES: Budget Actual Variance From Use of Money and Property $ 30 $ 30 $ 32 $ 2 Charges for Current Service 477 477 571 94 Other 4 4 TOTAL REVENUES 507 507 607 100 EXPENDITURES: Current: Library Services 445 445 407 38 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 62 62 200 138 FUND BALANCE-BEGINNING OF YEAR 681 681 681 FUND BALANCE-END OF YEAR $ 743 $ 743 $ 881 $ 138 100 Non-Major Enterprise Funds 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 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 Sewer Service Fund accounts for the City's sewer program to residents and businesses • 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 HUNTINGTON BEACH STATEMENT OF NET ASSETS NON-MAJOR ENTERPRISE FUNDS SEPTEMBER 30, 2002 (in thousands) Emerald Cove Emergency Refuse Sewer Hazmat Cultural Ocean View ASSETS HousingjFlreMedlcal� Collection Service I Service I Affairs I Estates I Total CURRENT ASSETS: Cash and Investments $ 2,198 $ 443 $ - $ 2,756 $ 247 $ 164 $ 671 $ 6,479 General Receivables 16 1,685 461 272 - 2 2,436 Unbilled Receivable 1,241 614 1.855 TOTAL CURRENT ASSETS 2,214 2,128 1,702 3,642 247 164 673 10,770 CAPITAL ASSETS: Land 1.288 - - - - 759 2.644 4,691 Buildings 4.102 - 1,219 - 1,248 560 7.129 Machinery and Equipment 1.106 191 20 - - 1.317 Infrastructure - 33,796 - - 33,796 Less Accumulated Depreciation (1,394) (204) (17.742) (20) (175) (30) (19,565) TOTAL CAPITAL ASSETS 3,996 902 17,464 1,832 3,174 27,368 TOTAL ASSETS 6,210 3,030 1,702 21,106 247 1,996 3,847 38,138 LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts Payable - 195 731 1 8 2 937 Accrued Payroll 48 9 49 14 7 - 127 Due to Other Funds - - 1,292 1,292 Deposits Payable 27 27 TOTAL CURRENT LIABILITIES 27 243 2,032 50 14 15 2 2,383 NON-CURRENT LIABILITIES: Capital Leases - 281 - 281 Compensated Absences - 49 35 11 4 99 Advances from Other Funds 243 243 TOTAL NON-CURRENT LIABILITIES 243 330 35 11 4 623 TOTAL LIABILITIES 270 573 2,067 50 25 19 2 3,006 NET ASSETS: Invested in Capital Assets,Net of Related Debt 3,996 621 17,464 - 1,632 3.174 27,087 Unrestricted 1,944 1,836 (365) 3,592 222 145 671 8,045 TOTAL NET ASSETS $__ 5,940 $ 2,457 $ (365) S 21,056 $ 222 $ 1,977 $ 3,945 $ 35,132 101 CITY OF HUNTINGTON BEACH STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS NON-MAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002 (in thousands) Emerald Cove Emergency Refuse Sewer Hazmat Cultural Ocean View HousingFire Medical Collection Service Service Affairs Estates Total OPERATING REVENUES: Rentals $ 661 $ - $ - $ $ $ $ 170 $ 831 Fees for Service - 4,103 9,073 4,540 - 17,716 Other 46 109 145 189 22 511 TOTAL OPERATING REVENUES 707 4,103 9,182 4,540 145 189 192 19,058 OPERATING EXPENSES: Supplies and Operations 323 3,075 9,178 1,708 139 292 14.715 Depreciation 82 97 711 4 25 11 930 TOTAL OPERATING EXPENSES 405 3,172 9,178 2,419 143 317 11 15,645 OPERATING INCOME(LOSS) 302 931 4 2,121 2 (128) 181 3,413 NON-OPERATING REVENUES(EXPENSES): Interest Income 80 12 - 56 11 6 5 170 Gain(Loss)on Sale of Plant,Property,and Equipment 59 59 TOTAL NON-OPERATING REVENUES(EXPENSES) 80 71 56 11 6 5 229 CHANGE IN NET ASSETS BEFORE OPERATING TRANSFERS AND CAPITAL CONTRIBUTIONS 382 1,002 4 2,177 13 (122) 186 3,642 TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers In 35 - - 700 - 85 - 820 Transfers Out (383) (181) - (12) - (576) Capital Contributions 18,179 18,179 TOTAL TRANSFERS AND CAPITAL CONTRIBUTIONS (348) (181) 18,879 (12) 85 18,423 TOTAL CHANGE IN NET ASSETS 34 821 4 21,056 1 (37) 186 22,065 NET ASSETS OCTOBER 1,2001 5,906 1,636 (369) 221 2,014 3,659 13,067 NET ASSETS SEPTEMBER 30,2002 $ 5,940 $ 2,457 $ (365) $ 21,056 $ 222 $ 1,977 $ 3,845 $ 35,132 102 CITY OF HUNTINGTON BEACH STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002 (in thousands) Emerald Cove I Emergency Refuse Sewer Hazmat Cultural Ocean View HousingFire Medical Collection Service Service Affairs Estates Total Cash Flows from Operating Activities: Cash Received from Customers and Users $ 674 $ 3,712 $ 8,974 $ 3,654 $ 146 $ 194 $ 195 $ 17,549 Cash Paid to Employees for Services (1,173) (231) (918) (116) (230) - (2,668) Cash Paid to Suppliers of Goods and Services (350) (2,135) (8,972) (736) (10) (117) (1) (12,321) Other Operating Items 229 229 Net Cash Provided(Used)by Operating Activities 324 404 2,000 20 (153) 194 2,789 Cash Flows from Noncapital Financing Activities: Transfers In 35 700 - 85 820 Transfers Out (383) (181) (12) (576) Net Cash Provided(Used)by Non Capital Financing Activities (348) (181) 700 (12) 85 244 Cash Flows from Capital and Related Financing Activities: Purchase of Plant.Property,and Equipment - (477) - - (477) Principal Paid on Long-Term Debt (150) (150) Net Cash Provided(Used)by Capital and Related Financing Activities (627) (627) Cash Flows from Investing Activities Cash Received from Investments 80 12 56 11 6 5 170 Net Increase(Decrease)in Cash and Cash Equivalents 56 (392) 2,756 19 (62) 199 2,576 Cash and Cash Equivalents,October 1,2001 2,142 835 228 226 472 3,903 Cash and Cash Equivalents,September 30,2002 $ 2,198 $ 443 $ - $ 2,756 $ 247 S 164 $ 671 $ 6,479 Reconciliation of Operating Income to Net Cash provided(used)by Operating Activities Operating Income(Loss) $ 302 $ 931 $ 4 $ 2,121 $ 2 $ (128) $ 181 $ 3,413 Adjustments to Reconcile Operating Income to Net Cash Provided(Used)by Operating Activities Depreciation 82 97 - 711 4 25 11 930 Decrease(Increase)in Accounts Receivable 19 (573) (182) (272) 1 3 (1,004) Decrease(Increase)in Unbilled Receivables - - (26) (610) - - - (636) Increase(Decrease)in Accounts Payable (84) (59) (26) 1 - (53) (1) (222) Increase(Decrease)in Accrued Payroll 5 1 49 13 1 - 69 Increase(Decrease)in Due to Other Funds - - 223 - - - 223 Increase(Decrease)in Advances from Other Funds (1) - (1) Increase(Decrease)in Deposits 6 - - 6 Increase(Decrease)in Compensated Absences 3 6 2 11 Net Cash Provided(Used)by Operating Activities $ 324 $ 404 $ $ 2,000 $ 20 $ (153) $ 194 $ 2,789 103 - -Y Internal Service Funds 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. CITY OF HUNTINGTON BEACH , STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS SEPTEMBER 30,2002 in thousands Workers' ASSETS Medical Insurance Com nsatlon Total Current Assets: Other Receivables $ 12 $ - $ 12 Prepaid Insurance 115 67 182 TOTAL ASSETS 127 67 194 LIABILITIES Current Liabilities Accounts Payable 24 7 31 Accrued Payroll 15 9 24 Due to Other Funds 869 1,945 2,814 Current Portion of Claims Payable 385 3,500 3,885 Total Current Liabilities 1,293 5,461 6,754 Non-Current Liabilities Compensated Absences 45 - 45 Claims Payable 385 5,065 5,450 Less Current Portion (385) (3,500) (3,885) Total Non-Current Liabilities 45 1,565 1,610 TOTAL LIABILITIES 1,338 7,026 8,364 NET ASSETS Unrestricted (1,211) (6,959) (8,170) TOTAL NET ASSETS $ (1,211) j (6,959) $ (8,170) STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET ASSETS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2002 in thousands Workers' Medical Insurance I Compensation Total OPERATING REVENUES: Fees for Service $ 4,858 $ 3,145 $ 8,003 Other 15 15 TOTAL OPERATING REVENUES 4,873 3,145 8,018 OPERATING EXPENSES: Claims and Insurance 6,799 3,941 10,740 Supplies and Operating 598 248 846 TOTAL OPERATING EXPENSES 7,397 4,189 11,586 OPERATING INCOME(LOSS) (2,624) (1,044) (3,568) TRANSFERS: Transfers In 746 608 1,354 Transfers Out (178) (550) (728) TOTAL TRANSFERS 568 58 626 TOTAL CHANGE IN NET ASSETS (1,956) (986) (2,942) NET ASSETS OCTOBER 1,2001 745 (5,973) (5,228) NET ASSETS SEPTEMBER 30,2002 j (1,211) $ (6,959) $ (8,170) STATEMENT OF CASH FLOWS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2002 (in thousands) Workers' Medical Insurance I Compensation Total Cash Flows from Operating Activities: Cash Received from Customers and Users $ 4,873 $ 3,145 $ 8,018 Cash Paid to Employees for Services (423) (186) (609) Cash Paid to Suppliers of Goods and Services (6,364) (3,017) (9,381) Net Cash Provided by Operating Items (1,914) (58) (1,972) Cash Flows from Noncapital Financing Activities: Transfers In 746 608 1,354 Transfers Out (178) (550) (728) Net Cash Provided(Used)by Non Capital Financing Activities 568 58 626 Net Increase in Cash and Cash Equivalents (1,346) - (1,346) Cash and Cash Equivalents,October 1,2001 1,346 1,346 Cash and Cash Equivalents,September 30,2002 $ - $ - $ Reconciliation of Operating Income to Net Cash provided(used)by Operating Activities Operating Income(Loss) $ (2,524) $ (1,044) $ (3,568) Adjustments to Reconcile Operating income to Net Cash Provided(Used)by Operating Activities Decrease(Increase)in Accounts Receivable 32 - 32 Decrease(Increase)in Prepaid Insurance (64) (46) (110) Increase(Decrease)in Accounts Payable (20) 5 (15) Increase(Decrease)in Accrued Payroll - 2 2 Increase(Decrease)in Accrued Interest Payable (394) (4) (398) Increase(Decrease)in Due to Other Funds 869 571 1,440 Increase(Decrease)in Claims Payable 185 479 664 Increase(Decrease)in Compensated Absences 2 (21) (19) Net Cash Provided(Used)by Operating Activities $ (1,914) $ (58) $ (1,972) 104 y i Capital Assets Us ed in'the Qperatio in of Governmental :Funds; CITY OF HUNTINGTON BEACH CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE SEPTEMBER 30,2002 (IN THOUSANDS) CAPITAL ASSETS: Land $ 317,391 Buildings 86,469 Machinery&Equipment 50,517 Construction In Progress 22,202 Infrastructure 274,079 TOTAL INVESTMENT IN CAPITAL ASSETS $ 750,658 INVESTMENTS IN CAPITAL ASSETS FROM: General Fund $ 124,908 Special Revenue Funds 60,210 Capital Projects Funds 41,819 Donations 523,721 TOTAL INVESTMENTS IN CAPITAL ASSETS $ 750,658 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS BY FUNCTION AND ACTIVITY FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) October 1, September 30, 2001 Additions Retirements 2002 Administrative Services $ 794 $ 53 $ (695) $ 152 Building 289 464 (77) 676 City Attorney 89 - (6) 83 City Administration 748 230 (76) 902 City Clerk 34 6 - 40 City Treasurer 100 125 (27) 198 Community Services 89,184 4,667 (406) 93,445 Economic Development 18,486 (23) 18,463 Fire 13,171 2,614 (2.489) 13,296 Information Systems 5,707 1,955 (130) 7,532 Library Services 14,491 56 (76) 14,471 Non-Departmental 12,037 - 12,037 Planning 124 81 (72) 133 Police 18,024 8,146 (10,125) 16,045 Public Works 538,464 39,921 (5,200) 573,185 TOTAL $ 711,742 $ 58,318 $ (19,402) $ 750,658 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY SEPTEMBER 30,2002 (IN THOUSANDS) Machinery& Construction In Land Buildings Equipment Progress Infrastructure Total Administrative Services $ $ $ 152 $ $ $ 152 Building 268 408 676 City Attorney 83 83 City Administration 902 902 City Clerk 40 40 City Treasurer 198 198 Community Services 47,598 41,005 4,842 93,445 Economic Development 18,412 - 51 18,463 Fire - 5,835 7,461 - 13,296 Information Systems 7,422 110 7,532 Library Services - 13,667 804 14,471 Non-Departmental 1,410 9,981 646 12,037 Planning 133 - 133 Police 785 14,545 715 16,045 Public Works 249,971 15,196 12,970 20,969 274,079 573,185 TOTAL $ 317,391 $ 86,469 $ 50,517 $ 22,202 $ 274,079 $ 750,658 105 r Statistical Section CITY OF HUNTINGTON BEACH GOVERNMENTAL FUND EXPENDITURES BY FUNCTION AND ACTIVITY LAST TEN FISCAL YEARS (IN THOUSANDS) Administrat omm Ws Cunity City Council City Adminbtnror City Treasurer City Attorney City Clerk Services Development Planning Building 1992-93 $213 $1,480 $709 $1,807 S449 S4,108 $6,097 S _ - $ - '1993-94 282 2,691 897 2,168 517 5,140 10.406 - - 1994-95 224 1,672 709 1,866 485 4,200 3.252 1995-96 224 2,140 743 1,466 488 4,181 3.252 1996-97 233 1,856 781 1,738 470 4.208 3,694 1997-98 207 1,092 805 2.340 434 3,056 3,919 - - 1998-99 275 1,569 820 1,969 474 2,876 4,067 1999-2000 277 1,799 884 2.227 451 3,559 - 2,180 2,384 2000-2001 231 1,776 916 2.943 559 3,874 - 2,329 2,589 2001-2002 237 2,109 1.108 3.570 676 7,095 - 2,585 2,991 Source:Administrative Services Department-City of Huntington Beach GOVERNMENTAL FUND REVENUES BY SOURCE LAST TEN FISCAL YEARS (IN THOUSANDS) Licenses and Fines and Use of Money From Other Charges for Fiscal Year Property Tax Other Taxes Permits Forfeitures and Property Agencies Current Service Other Total 1992-93 $ 33,163 $ 36,332 $ 4,846 $ 1,354 $ 11.382 S 19,334 $ 6,453 $ 2.493 $ 115,357 '1993-94 32,545 46,194 6,579 1,894 17,303 25,894 9,528 6,221 146,158 1994-95 25,265 38,259 5.978 2,134 11,704 19,941 8,706 1,071 113.058 1995-96 29,320 39.879 6.567 2,134 14,291 18,171 13,129 3,579 127,070 1996-97 29,341 42,203 8,121 2,707 12,971 19.810 10,448 743 126,344 1997-98 32,477 44.895 8,848 2,649 12,614 21.539 10,147 3,798 136.967 1998-99 34,345 48.757 10,527 2.744 10,913 24,753 9.557 4,514 146,110 1999-2000 37.645 52,194 8.538 4.018 14,603 32,021 10.077 5.770 164,866 2000-2001 36,860 60,223 6.902 4.092 15,812 31,634 10.459 1,691 167.673 2001.2002 33.204 55,084 7.162 3.797 13,895 28.426 12,597 2,604 156,769 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 DELINQUENCY DEUNQUENC TOTALLEVY TOTAL COLLECTIONS AMOUNT PERCENT TOTAL LEVY TOTAL COLLECTIONS AMOUNT PERCENT 1992-93 $ 19.060 $ 17,847 $ 853 4.48% $ 1.542 $ 1,205 $ 30 1.95% 1993-94' 16,612 15,632 572 3.44% 1,205 1.106 56 4.65% 1994-95 16,781 16,300 481 2.87% 1,231 1,299 69 5.61% 1995-96 16,272 16.100 647 3.86% 1,165 1.138 27 2.32% 1996-97 16,722 16.401 320 1.91% 1,102 1.085 17 1.60% 1997-98 17,630 17.176 272 1.54% 1,247 1.077 40 3.21% 1998-99 18,341 17,868 262 1.47% 1,243 1,146 35 3.05% 1999-2000 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 2.45% 2001-2002 1 24,581 24,238 343 1.40% 1.419 1,366 53 3.74% RESERVOIR HILL MELLO-ROOS 1992-93 S 191 $ 187 S 3 1.60% $ 264 S 245 $ 19 7.769% '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 5A1% 264 239 25 10.46% 1996-97 182 179 3 1.68% 264 251 13 5.18% 1997-98 173 184 9 4.89% 264 255 9 3.53% 1998-99 194 184 9 4.89% 264 255 8 3.14% 1999-2000 184 181 3 1.63% 264 259 5 1.89% 2000-2001 184 180 4 2.17% 264 258 5 1.89% 2000-2002 1 188 184 4 2.13% 264 258 6 2.27% Fiscal Year 1993-94 is a fifteen month fiscal year. Source:County of Orange Auditor Controllers Office Note-Delinquency amount does not always equal levy amount minus collections amount since there are always amounts collected from prior years 106 a �! n�ia � wG'ipmpa °pp' oo A N �D Oi Ol V Y N N M W N O � 9 V p Dp . WW A W N N O N fO0 OD A A ONI O + O W J W 0 M Sm 3� fJ N Of 41 W N W N O m A m 0 a O m �• W W O O) W N O V � 9 + -+ - m V V V V f0 V }�5•' +pq W m A V W (/i ppp CD N (Olf W w W + 0 A N NN �C r d a ZN A A W W W W N N fJ N W IJ 1000Dp ut � WOW 1D 1D � J � O m A O N A + + W fn 9 C (+q A 4Ni W m j W W 0 O1 #3 T m T m V N tN0 O W E � Ui O W V 01 f0 V A N W p2p f] M b + + fJ N m N A UmmJ f0 t0 O O fND V N IUD W fWD (�T m � Y O3a ((�� (�t _ _ _ M 6ppp• L W m O (Ji pWppp 10 N N J m A W V W N lOT N N J O iD OD ffJJ W m O) m o% N Ol 0 + IV V f0 fT IU fD ��p 1J W m V m A tN0 r W t0 v O N + V m 54 A m en s (J OI V �tpJ iD pp� W Of O UN � A W N 10 N m W v tN0 N 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 1992-93 $ 11,125.356 S 2,311 $ 11,127,667 S 758,178 $ 11,885.845 $ 11.885,845 0.00% 1993.94 11,313.256 1,964 11,315,220 560,665 11,875,885 11.875,885 408% 1994-95 11,712,153 2,151 11,714,304 599,842 12,314,146 12,314,148 3.69% 1995.96 11,817.571 2,218 11,819.789 538.559 12,358.348 12,358,348 0.36% 1996.97 11,761.075 2,129 11,763,204 542.084 12,305,288 12.305,288 -0.43% 1997.98 12,338,032 2.297 12,340,329 624.469 12,964,798 12.964,798 5.36% 1998.99 12,968.754 2.252 12.971,006 566,077 13,537,083 13.537.083 4.41% 1999-2000 14,698,098 2,026 14.700,124 618,883 15,319,007 15,319,007 13.16% 2000.2001 15,877.065 2.404 15.879,469 646,594 16,526,063 16.526,063 7.88% 2001-2002 17,076.822 2,805 17,079,627 732,334 17,811.961 17,811,961 7.78% 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 Other. Total 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 199596 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 1990-2000 1.00000 0.04930 - - 0.00880 - 1.05810 2000-2001 1.00000 0.04930 - - 0.00880 1.05810 2001.2002 1.00000 - 0.00770 1.00770 Note-Rates are per$100 of assessed valuation Source-County of Orange GENERAL OBLIGATION BONDED DEBT RATIOS LAST TEN FISCAL YEARS Garen]Fund Debt Service to General Bonded Debt Assessed Market Percent of Debt to Bonded Debt Par Total Debt Expenditure. Total General Fund (000.) Value low.) A......d Value Population Capita Principal(000s) Interest(000s( service(000.) (000.) Expenditures 1992-93 $ 860 $ 11,885,845 0.007 186,867 $ 5 $ 395 $ 75 $ 470 S 91,650 0.51% 1993.94 $ 445 S 11,875,885 0.004 189,159 $ 2 $ 415 $ 52 $ 467 $ 115,757 0.40% 1994-95 $ - S 12,314,146 0.000 186,587 $ - $ 445 $ 13 $ 458 $ 92,467 0.50% 1995.98 $ - S 12,358,348 0.000 187,180 S - $ - $ - $ - $ 92,211 0.00% 1996-97 S - $ 12,305,288 0.000 188,518 $ - $ - $ - $ - $ 96,165 0.00% 1997.98 $ - $ 12,964,798 0.000 192.430 S - $ - $ - $ $ 103,875 0.00% 1998-99 $ - $ 13,537,083 0.000 196.660 $ - $ - $ - $ - $ 103,050 0.00% 1999.2000 $ - $ 15,319,007 0.000 199.327 $ - $ - $ - $ - $ 117,863 0.00% 2000.2001 $ - $ 16.526,063 0.000 191.500 $ - S - $ - $ - $ 122,139 0.00% 2001.2002 $ - $ 17,811,961 0.000 194.600 S - $ - $ - $ - $ 130,326 0.00% Source-Administrative Services Department,City of Huntington Beach 108 • CITY OF HUNTINGTON BEACH CONSTRUCTION ACTIVITY AND BANK AND SAVINGS AND LOAN DEPOSITS LAST TEN FISCALYEARS Number of Estimated Value of Banks and Savings Building Percent New Construction and Loan Deposits Permits Change (000s) Percent Change (0005) Percent Change 1992-93 10,400 $ 100,400 $ 2,121,253 1993-94 6,844 (34.2) $ 107,420 6.99 $ 2,141,528 1.0 1994-95 4,471 (34.7) $ 84,388 (21.44) $ 2,579,514 20.5 1995-96 7,594 69.9 $ 110,375 30.79 $ 2.581.844 0.1 1996-97 5,413 (28.7) $ 205,970 86.61 $ 2.737.588 6.0 1997-98 6,368 17.6 $ 206,035 0.03 S 2.684.384 (1.9) 1998-99 6,735 5.8 $ 308.319 49.64 $ 2,908,376 8.3 1999-2000 5,474 (18.7) $ 207.509 (32.70) $ 3,554,438 22.2 2000-2001 5.106 (6.7) $ 153,279 (26.13) (100.0) 2001-2002 5,429 6.3 $ 190,873 24.53 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, 2002 (IN THOUSANDS) ASSESSED VALUATION $ 17.811,961 DEBT LIMIT:12%OF ASSESSED VALUATION 2,137,435 DEBT APPLICABLE TO LIMITATION: LEGAL DEBT MARGIN $ 2,137.435 Source-Administrative Services Department.City of Huntington Beach STATEMENT OF DIRECT AND OVERLAPPING BONDED DEBT SEPTEMBER 30, 2002 2001-2002 Assessed Valuation$18,874,320,585(after deducting$568.820.737)of incremental redevelopment valuation) OVERLAPPING TAX AND ASSESSMENT DEBT x Applicable, Deal a vwtea O.C.Teeter Plan Obligations 7.442% $ 9,259,709 Metropolitan Water District 1.574% 7,910.294 Huntington Beach City School District 95.854% 19,166.029 Los Alamitos Unified School District Community Facilities District 1.328% 162.946 City of Huntington Beach Comm Fee.Dist No 1990.1 100.000% 2,155,000 City of Huntington Beach Comm Fac.Dist No 2000-01 100.000% 16,000,000 City of Huntington Beach Comm Fac.Dist No 2002.01 100.000% 4,900,000 City of Huntington Beach 1915 Act Bonds 100.000% 440,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT S 59,993,978 DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT O.C.General Fund Obligations 7.442% 73,622,887 O.C.Pension Obligations 7.442% 8.987,889 O.C.Board of Education Certificates of Participation 7.442% 1.488,400 O.C.Transit Authority 7.442% 459.544 MWD of Orange County Water Facilities Corp 11.179% 5,353.064 O.C.Sanitation District No.3,COPS 12.331% 6,533.248 O.C.Sanitation District No.11.COPS 99.956% 3,304,206 OCWD Certificates of Participation 12.331% 25,506,674 Coast Community College COPS 30.909% 4,732,168 Los Alamitos Unified School District COPS 1.328% 56,706 Htg Beach Union High School District COPS 95.854% 4,414,077 Ocean View School District COPS 94.095% 9,879,975 City of Huntington Beach General Fund Obligations 100.000% 85,104,398 TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 229.443,236 Less: OC Transit Authority(80%self supporting) (367,635) OC Water District COPS(100%self supporting) (25,506,674) MWDOC Water Facilities Corporation(100%Self Supporting) (5,353,064) TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 198,215,863 GROSS COMBINED DEBT $ 2a9,437,214 NET COMBINED TOTAL DEBT $ 258,209.841 •Excludes Tax and Revenue Anticipation Notes,revenue,mortgage revenue and tax allocation bonds. and non-bonded capital lease obligations Ratios to Assessed Valuation: Total Overlapping Tax and Assessment Debt 0.35% Combined Direct Debt($46,733,006) 0.51% Gross Combined Total Debt 1.74% Net Combined Total Debt 1.55% State School Building Aid Repayable as of 9/30/02$8,191,270 Source-California Municipal Statistics 109 CITY OF HUNTINGTON BEACH ' .s DEMOGRAPHIC STATISTICS City Population as a Percent of Square Orange County County Year Population Percent Increase Miles Population Population 1910 815 3.57 34,436 1920 1,687 107.0% 3.57 61,375 2.75% 1930 3,690 118.7% 3.57 62,451 5.91% 1940 3,738 1.3% 3.57 130,760 2.86% 1950 5.158 38.0% 4.72 216,224 2.39% 1960 11,492 122.8% 23.47 703,995 1.63% 1970 116,400 912.9% 26.73 1.420,386 8.19% 1980 172,200 47.9% 27.20 1,931,570 8.92% 1990 188,701 9.6% 27.20 2,362,211 .7.99% 1995 186,587 -1.1% 27.20 2.627,949 7.10% 2000 199,326 6.8% 27.20 2,828,400 7.05% 2001 191,500 -3.9% 27.20 2.846,289 6.73% 2002 194,600 1.6% 27.20 2,939,500 6.62% Source-Administrative Services Department,City of Huntington Beach TOP TEN PROPERTY TAX PAYERS SEPTEMBER 30, 2002 Percent of Estimated Tax Assessed Valuation 000s Toal 000s " Percent of Total Duke Solutions Huntington $ 416,963 2.34% $ 627 1.89% Huntington Center 52.466 029% 346 1.04% Waterfront Construction(1) 36,828 021% 328 0.99% Essex Huntington Breakers 28,399 0-16% 253 0.76% Kyray LLC 21,429 0.12% 206 0.62% Atlanta HB LLC 27,853 0-16% 206 0.62% LIU Corporation 23,581 0.13% 170 0.51% AES Huntington Beach LLC 101,865 0.57% 158 0.48% McDonnel Douglas Corporation 63,632 0.36% 143 0.43% Bentall US Partners 15,905 0.09% 104 0.31% Total Top Ten 788,921 4.43% 2,541 7.65% All Other Properties 17,023.040 95.57% 30,663 92.35% Total $ 17,811.961 100.00% $ 33,204 100.00% Source-HDL Coren,Cone(number of parcels in parenthesis) The estimated total tax includes only the portion of the total tapaid to the City's reporting entity.Properties in different tax areas or in a redevelopment agency project area pay a different percentage of tax to the City's reporting entity. MISCELLANEOUS STATISTICS SEPTEMBER 30, 2002 Year of Incorporation 1909 Charter City-City Council-City Form of Govemment Administrator Area 27.2 Square Miles Population 194,600 Miles of Streets and Alleys 463 Number of City Trees 54,563 Fire Protection: Number of Stations 7 Number of Firefighters 139 Police Protection: Number of Stations 4 Number of Sworn Police Officers 223 Municipal Water Department: Number of Customers 49,000 Average Daily Consumption Total 32.0 Million Gallons Average Daily Consumption Per Person 163 Miles of Water Mains 522 Public Works: Sanitary Sewers 352 Miles Stone Sewers 136 Miles Recreation and Culture: Number of Parks 57 Park Acreage Developed 529 Miles of Beach 3.4 Annual Beach Visitors 7,000.000 Number of Libraries 4 Volumes in Libraries 370,945 Full-Time Employees 1,039 Source-Administrative Services Department,City of Huntington Beach 110 CITY OF HUNTINGTON BEACH , CALIFORNIA 5r-,-6 Y moo. / - 5��7�v3 /;/TG Sfi curl �Syro� Huntin each ,,,, C= -7; C= --q v _ COMPREHENSIVE ANNUAL FINANCIAL REPORT for the Year Ending September 30, 2002 CITY OF HUNTINGTON BEACH 1 COMPREHENSIVE ANNUAL � FINANCIAL REPORT 1 1 � WITH REPORT ON AUDIT BY INDEPENDENT CERTIFIED PUBLIC � ACCOUNTANTS 1 � FOR THE YEAR ENDED SEPTEMBE.R .30 , 2002 1 Prepared by Administrative Services Department COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2002 TABLE OF CONTENTS INTRODUCTORY SECTION Table of Contents i-ii Letter of Transmittal iii-vi City Officials vii Organizational Chart viii ' Financial Reporting Certificate T ix FINANCIAL SECTION Independent Auditors' Report 1-2 Management Discussion and Analysis 3-16 ' Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets 17 ' Statement of Activities and Changes in Net Assets 18 Fund Financial Statements: Balance Sheet—Governmental Funds 19 Reconciliation of the Balance of Governmental Funds to the Statement of Net ' Assets 20 Statement of Revenues, Expenditures and Changes in Fund Balances— Governmental Funds 21 ' Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 22 Statement of Net Assets— Proprietary Funds 23 ' Statement of Revenues, Expenses and Changes in Fund Net Assets— Proprietary Funds 24 Statement of Cash Flows— Proprietary Funds 25 Statement of Fiduciary Fund Net Assets 26 ' Statement of Changes in Fiduciary Fund Net Assets-Trust Funds 26 Notes to Financial Statements 27-78 Required Supplementary Information: ' Budgetary Information 79 Schedule of Revenues, Expenditures and and Changes in Fund Balances— 80 Budget and Actual—General Fund Schedule of Revenues, Expenditures and and Changes in Fund Balances— Bud et and Actual—Public Financing Authority Debt Service Fund 81 Schedule of Revenues, Expenditures and and Changes in Fund Balances— Bud et and Actual—Redevelopment Agency Debt Service Fund 81 ' i Schedule of Revenues, Expenditures and and Changes in Fund Balances— ' Budget and Actual—Redevelopment Agency Capital Projects Fund 82 Schedule of Revenues, Expenditures and and Changes in Fund Balances— Bud et and Actual—Capital Improvement Fund 82 , Schedule of Revenues, Expenditures and and Changes in Fund Balances— 83 Budget and Actual—Public Financing Authority Capital Projects Fund Schedule of Funding Progress Normal and Supplemental Retirement Plans 84 ' Supplementary Information: Combining and Individual Fund Statements and Schedules: Combining Balance Sheet—Nonmajor Governmental Funds 85-88 ' Combining Statement of Revenues, Expenditures, and Changes in Fund Balances— Nonmajor Governmental Funds 89-92 Schedule of Revenues, Expenditures, and Changes in Fund Balances— Bud et and Actual—Non Major Governmental Funds 93-100 ' Combining Statement of Net Assets—Nonmajor Enterprise Funds 101 Combining Statement of Revenues, Expenses, and Changes in Net Assets- Nonmajor Enterprise Funds 102 ' Combining Statement of Cash Flows— Nonmajor Enterprise Funds 103 Combining Statement of Net Assets— Internal Service Funds 104 Combining Statement of Revenues, Expenses, and Changes in Net Assets- Nonmajor Internal Service Funds 104 ' Combining Statement of Cash Flows—Nonmajor Internal Service Funds 104 Capital Assets Used in the Operation of Governmental Funds: Schedule by Source 105 ' Schedule by Function and Activity 105 Schedule of Changes by Function and Activity 105 Statistical Section (Unaudited) ' General Governmental Expenditures by Function and Activity— Last Ten Fiscal Years 106-107 ' General Governmental Revenues by Function and Activity—Last Ten Fiscal Years 106-107 Property Tax Levies and Collections— Last Ten Fiscal Years 106-107 Assessed and Actual Valuations of Property— Last Ten Fiscal Years 108 Property Tax Rates—All Direct and Overlapping Governments 108 , General Obligation Bonded Debt Ratios—All Overlapping Governments 108 Construction Activity and Bank and Savings and Loan Activity—Last Ten Fiscal Years 109 Computation of Legal Debt Margin 109 ' Statement of Direct and Overlapping Bonded Debt 109 Demographic Statistics 110 Top Ten Secured Property Owners 110 , Miscellaneous Statistics 110 1 ii ' S iv H- ch. ' March 31, 2003 ' Honorable Mayor, City Councilmembers and Citizens of Huntington Beach: This letter transmits the Comprehensive Annual Financial Report for the City of Huntington Beach, California for the year ending September 30, 2002. ' The intent of this report is to provide a firm understanding of the City's financial position. The , Administrative Services Department is responsible for the accuracy of the information. Management has established an internal control system that provides reasonable, but not absolute assurance that these financial statements do not ' ' have material misstatements. This system allows for the presentation of financial statements that ' comply with generally accepted accounting Huntington Beach Municipal Pier principles. An important part of this system is that the cost of any control should not exceed its expected benefit. We believe that this financial report is complete and reliable in all material respects. The financial statements comply with the standards of the Government Accounting ' Standards Board and include the report of our auditors, Caporicci and Larsen. This year the City implemented Government Accounting Standards Board Statement No. 34 which has significantly modified the statements and disclosures of this report. See ' note 1 of the Notes to the Basic Financial Statements for further information. The independent audit of these financial statements was part of a broader, federally mandated "Single Audit" designed for the Federal Government. This single audit requires the auditor to not only report on the fair presentation of the City's financial statements, but also on internal controls and compliance with legal requirements. This report is available from the Finance Division of the Administrative Services Department. ' This year for the first time an additional narrative introduction and overview is required to accompany the City's basic financial statements (Management Discussion and Analysis). This letter complements the Management Discussion and Analysis and About the City of Huntington Beach Huntington Beach was incorporated in 1909 and is a full-service City including Police, ' Fire, Public Works, Community and Library Services, Economic Development, Planning, Building, and related , Administration. It is located in the southwest portion of Orange t i County approximately 37 miles south of Los Angeles. ' �:T F This report includes the financial _— activity of separate legal entities ' activities the City controls. Hyatt Regency Huntington Beach Resort&Spa These entities are: ' within the Main Pier Sub-Area Redevelopment Project Area • Redevelopment Agency of the City of Huntington Beach , • Huntington Beach Public Financing Authority • Huntington Beach Civic Improvement Corporation • Various community facilities districts , • Reservoir Hill Assessment District • Huntington Beach Auto Business Improvement District ' Component unit reports (stand-alone reports) are available for the Redevelopment Agency and Public • , Financing Authority. • • : - Auto Business Improvement District ' The City Council adopts the annual budget by assists with the September 30th of a prior fiscal year and may amend it Beach Blvd of Cars campaign 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 orders, or contracts, for goods or services not ' completed or received. The City reports these as reservations of fund balance in governmental funds. Local Economy: ' The City is located in Orange County, California. Despite the slower than desired economic growth nationwide, Orange County remains one of the economic leaders of ' the nation in jobs and economic potential. Huntington Beach is the third largest City in Orange County with a population of just under 200,000. iv ' t Future Priorities: • Maintain a healthy and safe community • Establish a sound financial foundation for the City's finances. • Assure the long-term adequacy of the a ..YL;it' 1�tSSCI iu •15JPy..p. City's infrastructure, facilities, and Oz0 ^, transportation network. ' Achieve development that maintains and improves the cit 's fiscal viability p Y Y ' and reflects economic demands while maintaining and improving quality of life ). for current and future residents. • Maintain and continually improve organizational effectiveness. • Build and maintain a sense of place The old Huntington Center and an exceptional quality of life within will be reborn as Bella Terra a sustainable urban environment. • Ensure that Huntington Beach's local government is open, accessible, ' responsive, nurturing, and respectful to all the citizens it serves. • Enhance the community's environmental quality and its unique natural resources. Major Capital Proiects: ' • The Huntington Beach Sports Complex • Major improvements to the South Beach • Completion of the Beach Maintenance Facility ' • Completed rehabilitation of 37 miles of deteriorated sewer pipes ' PENSION OBLIGATIONS: The City participates in the California Public Employee's Retirement System. The City ' also maintains a supplemental retirement plan. Information on these pensions can be found in notes 6 and 7 to the financial statements. ' CASH MANAGEMENT: The City Treasurer invests surplus cash in authorized investments allowed by the ' government code and City policy. The City forecasts revenues and expenditures to meet current obligations and to maximize interest income. The City Treasurer earned a return of 4.4% for the year. 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. V RISK MANAGEMENT: ' The City is self-insured for liability, workers 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 workers' compensation and employee health claims _ over a certain amount. ' FINANCIAL REPORTING CERTIFICATES: Huntington Reach Pier Plaza 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, 2001 report. The GFOA awards the certificate to governmental agencies whose reports conform with high standards of public financial reporting. The City has received this certificate for 16 ' 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 responsibility conducting the fiscal affairs of Huntington Beach. We would also like to thank Robert ' Sedlak, Principal Accountant, who prepared this report. �G�GZ�G22� Clay rtin Dan T. Villella ' Director of Administrative Services Finance Officer vi ' CITY OF HUNTINGTON BEACH PRINCIPAL CITY OFFICALS City Council Connie Boardman,- Mayor Cathy Green Mayor Pro-Tem 1 Gil Coerper, Councilmember Debbie Cook, Councilmember Jill Hardy, Councilmember ' Pam Houchen, Councilmember Dave Sullivan, Councilmember 1 Other Elected Officials Connie Brockway, City Clerk 1 Jennifer McGrath, City Attorney: Shari Freidenrich, City Treasurer 1 Administrative Officials. Ray Silver, City Administrator ' William P. Workman,`Assistant City Administrator Robert Beardsley, Director of Public Works David Biggs, Director of Economic Development 1 Ross Cranmer, Director of Building & Safety Jim Engle, Director of Community Services ' Ron Hayden, Director of Library Services Janis Ingles, Director of Information Services Clay Martin, Director of Administrative Services Duane Olsen, Acting Fire Chief ' Kenneth Small, Police Chief Howard Zelefsky, Director of Planning V;i 1 CITY OF HUNTINGTON BEACH THE PEOPLE CITY CLERK CITY COUNCIL CITY CITY Mayor TREASURER ATTORNEY Records Division Mayor Pro Investments Elections Council Members Business License Passport Services Accounts Receivable CITY ADMINISTRATOR Municipal Services Billing ORGANIZATIONAL ADMINISTRATIVE COMMUNICATIONS 8. Central Cashiering EFFECTIVENESS SERVICES SPECIAL PROJECTS Finance ASSISTANT CITY ADMINISTRATOR , b . Risk Management a CentialServices�r r• a d � 5� t .b 3 � S d e - j Human Resources Real Estate Services Employee Services _. PLANNING. BUILDING 8 SAFETY ECONOMIC DEVELOPMENT PUBLIC WORKS COMMUNITY SERVICES LIBRARY SERVICES.. FIRE 71 POLICE Current Planning Permit 6 Redevelopment 8 Engineering Beaches,Recreation Operations Fire Prevention Uniform Division Plan Check Services Housing &FaclL es Development - Advanced Planning., Water Reference Operations Administration Division Inspection Services Business Development Human Services 8 Code Enforcement Park Tree.&Landscape Recreation Childrens 1 Media EmergencyServices Investigation Division Cultural,Historic Transportation Technical Services Telecommunntenance ications Spedal,Operationa , &Event Services _ ., r,:.. -` '-,_:,,_Mai Div information Systems - ` Jul 2002 W � IP I� IIIIIIIIIIII 1 1 Certificate of 1 Achievement 1 for Excellence 1 in Financial Reporting Presented to City of Huntington Beach, California 1 For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2001 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. ED TH U"OSTARS `o'��a S President o� as drrc�co Executive Director -ix- 1 1 1 1 1 1 1 � Financial Section 1 1 1 1 1 1 1 1 1 C&L Caporicci&Larson ' Certified Public Accountants INDEPENDENT AUDITORS'REPORT ' To the Honorable Mayor and Members of City Council ' of the City of Huntington Beach Huntington Beach,California ' We have audited the accompanying financial statements of the governmental activities, the business- ' type activities, each major fund, and the aggregate remaining fund information of the City of Huntington Beach, California (City), as of and for the year ended September 30, 2002, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial ' statements are the responsibility of the City's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards in the United States ' 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used ' and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the basic financial statements referred to above present fairly, in all material respects,the ' respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of September 30, 2002, and the respective ' changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with generally accepted accounting principles in the United States. As described in Note 1 to the basic financial statements, the City adopted Statements of the ' Governmental Accounting Standards Board No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments; No. 37, Basic Financial Statements - and , Management's Discussion and Analysis -for State and Local Governments: Omnibus; and, No. 38, Certain Financial Statement Note Disclosures. In accordance with Government Auditing Standards, we have also issued our report dated December 20, 1 2002 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations,contracts, and grants. That report is an integral ' part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considering the results of our audit. Toll Free Ph:(877)862-2200 Toll Free Fax:(866)436-0927 Oakland Orange County Sacramento San Diego 180 Grand Ave.,Suite 1365 3184-D Airway Avenue 777 Campus Commons Rd.,Suite 200 600"B"Street,Suite 1900 ' Oakland,California 94612 Costa Mesa,California 92626 Sacramento,California 95825 San Diego,California 92101 1 To the Honorable Mayor and Members of City Council ' of the City of Huntington Beach Huntington Beach,California The accompanying Required Supplementary Information, such as management's discussion and ' analysis, budgetary comparison information and other information as listed in the table of contents are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquires of management regarding the methods of measurement and presentation of the Required Supplementary Information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying supplementary information is presented for purpose of additional analysis and is not a required part of the basic financial statements. The supplementary information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material ' respects in relation to the basic financial statements taken as a whole. The Introductory Section and Statistical Tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements and,accordingly,we express no opinion on them. ew ' Costa Mesa,California December 20,2002 2 City of Huntington Beach ' Management's Discussion and Analysis For the Year Ended September 30, 2002 ' S ity ' Hun' As management of the City of Huntington Beach, we offer readers of the City's financial statements this narrative overview and analysis of the financial activities ' of the City of Huntington Beach for the fiscal year ended September 30, 2002. We encourage readers to consider the information presented here in conjunction ' with additional information that we have furnished in our letter of transmittal, which can be found on pages iii-vi of this report. Financial Highlights ' This is the first year that government-wide financial statements have been ' prepared. Prior year comparative statements were not prepared so no comparisons have been made. Next year full comparisons will be made. • The total assets of the City of Huntington Beach exceeded its liabilities at t the close of the most recent fiscal year by $607,633,000. Of this amount, $12,761,000 may be used to meet the City's ongoing obligations to ' citizens and creditors. • The City's total debt increased by $9,554,000 to $168,673,000 largely as a result of the issuance of new leases and additional Redevelopment ' Agency operative agreements. Overview Of The Financial Statements: ' This discussion and analysis are intended to serve as an introduction to the City of Huntington Beach basic financial statements. The City of Huntington Beach's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains certain other supplementary information in ' addition to the basic financial statements themselves. 1 3 ' City of Huntington Beach Management's Discussion and Analysis ' For the Year Ended September 30, 2002 ' Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the City's financial condition and are prepared similarly to those in the private sector. The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, ' continued increases or decreases in net assets may indicate whether the City's financial condition is improving or deteriorating. The statement of activities presents information on how the City's net assets changed during the most recent fiscal year. These changes are reported on the accrual basis (when the economic event occurs), not when the cash is received ' or paid. The government-wide financial statements separate functions that are primarily ' supported by taxes and intergovernmental revenues (governmental activities) from functions that are supported by user fees (business activities). Governmental activities include public safety, public works, general government, ' and community-related activities. Business activities include the Water, Sewer, Refuse, FireMed, Hazmat Service, Ocean View Estates, and Art Center activities. ' The government-wide financial statements include the City and all of its component units that are legally separate but whose activities entirely support ' the City of Huntington Beach. These entities are, the Redevelopment Agency of the City of Huntington Beach, the Huntington Beach Public Financing Authority, ' the Huntington Beach Civic Improvement Corporation, and various assessment districts described in Note 2 to the financial statements. ' The government-wide financial statements can be found on pages 17-18 of this report. Fund Financial Statements. The City separates financial activities into funds to maintain control over resources that have been legally separated. All of the funds of the City can be divided into three categories: governmental funds, ' proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for the same ' functions reported in governmental activities in the government-wide financial statements. However, the focus in the governmental fund section of these financial statements is on near-term inflows and outflows of spendable resources ' as well as on balance of spendable resources available at the end of the fiscal year. 4 City of Huntington Beach ' Management's Discussion and Analysis For the Year Ended September 30, 2002 ' It is useful to compare information presented for the governmental funds to ' information presented for governmental activities in the government-wide financial statements. A reconciliation shows the reader the differences in ' financial reporting between the governmental activities section and the governmental funds section. The City maintains twenty-seven individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenue, expenditures, and changes in fund ' balances for the general fund, Redevelopment Agency Debt Service, Redevelopment Agency Capital Projects, Huntington Beach Public Financing Authority Debt Service Fund, Huntington Beach Public Financing Authority ' Capital Projects Fund, and Capital Improvement Fund, all of which are considered to be major funds. Data from the other twenty-one funds are combined into a single, aggregated presentation. Individual fund data for each of ' these nonmajor governmental funds is provided in a combining statement else where in this report. The City provides an annual appropriated budget for its governmental funds. ' Budgetary comparison schedules on page 80-83, and 93-100 demonstrate compliance. ' The basic governmental fund financial statements can be found on pages 19-22 of this report. ' Proprietary Funds. The City maintains two types of proprietary funds (enterprise and internal service). Enterprise funds are used to account for the ' same activities as the business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Water, Sewer, Refuse, FireMed, Hazmat Service, Ocean View Estates, and Art Center , activities. Internal service funds are an accounting device used to accumulate and allocate costs among the various City departments. The City uses these funds to account for its employee health and workers compensation insurance programs. Since these programs primarily benefit governmental operations they have been included within the governmental activities section of the government- , wide financial statements. 5 ' City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statement provides information for Water operations, which is considered to be major funds ' of the City. The remaining proprietary funds noted above are combined into a single, aggregated presentation. All internal service funds are also combined into a single, aggregated presentation in the proprietary fund financial ' statements. Individual fund data for the nonmajor proprietary funds and the .internal service funds is provided in the form of combining statements elsewhere in this report. ' The basic proprietary fund financial statements can be found on pages 23-25 of this report. ' Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the ' government-wide financial statement because the resources of those funds are not available to support the City of Huntington Beach's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds ' The basic fiduciary fund financial statements can be found on page 26 of this report. ' Notes to the financial statements. The notes provide additional information that. is essential to a full understanding of the data provided in the government- wide and fund financial statements. The notes to the financial statements can be found on pages 27-78 of this report. ' Other information. In addition to the basic financial statements and accompanying notes, this report also present certain required supplementary information concerning the City's progress in funding its obligation to provide pension benefits to its employees and General Fund budget to actual comparisons. Required supplementary information can be found on pages 79-84 of this report. ' The combining b Wing statements referred to earlier in connection with nonmajor government funds and internal service funds are presented immediately following ' the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on page 85-105 of this report. 1 1 6 I City of Huntington Beach ' Management's Discussion and Analysis For the Year Ended September 30, 2002 ' Government-wide Financial Analysis ' As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. This is the City's first year of implementing the ' new reporting model and prior year amounts were not prepared. Thus, no comparison is available this year. In subsequent years, however, comparisons will be prepared. ' Below is a summary schedule of the City's net assets at September 30, 2002 (in thousands): ' Governmental Business ' Activities Activities Total Current and Other Assets $ 113,185 $ 61,888 $ 175,073 Capital Assets 565,017 80,376 645,393 ' Total Assets 678,202 142,264 820,466 Current Liabilities 35,957 7,118 43,075 ' Long-Term Liabilities 168,672 1,086 169,758 Total Liabilities 204,629 8,204 212,833 Net Assets: ' Invested in Capital Assets, Net of Related Debt 425,697 79,781 505,478 Restricted 58,351 31,043 89,394 ' Unrestricted (10,475) 23,236 12,761 Total Net Assets $ 473,573 $ 134,060 $ 607,633 By far the largest portion of the City's net assets ($505,478,000 or 83.9% of the ' total net assets) reflects its investment in capital assets (e.g., land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire ' those assets that is still outstanding. The City uses capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of ' related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net assets ' ($89,394,000 or 14.7% of the total net assets) is subject to external restrictions. The remaining amount of $12,761,000 or 2.1% of total net assets is unrestricted. 1 7 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 ' The unrestricted assets for governmental activities was a negative $10,475,000. This was caused primarily from the activities of the Redevelopment Agency, which is a blended component unit of the City. The Agency exists to finance ' improvements that remediate blight within the City. The Statement of Net Assets reflects the debt obligation of the Redevelopment' Agency, that will be repaid through future tax revenues, without an offsetting asset. This is typical of ' Redevelopment Agencies in California. The City's net assets from business activities increased by $37,751,000, or 39.1%. The largest reasons for this increase were developer contributions of infrastructure of $26,090,000 and capital contributions for the Water Master Plan of $6,886,000. A condensed summary of activities (in thousands) follows: Governmental Business Activities Activities Total Revenues: ' Program Revenues: Charges for Current Services $ 23,556 $ 45,106 $ 68,662 Operating Grants and Contributions 5,063 - 5,063 ,apital Grants and Contributions 13,039 33,056 46,095 '. General Revenues: - Property Taxes 38,106 - 38,106 Other Taxes 55,084 - 55,084 Use of Money and Property 13,895 2,240 16,135 From Other Agencies 20,359 - 20,359 Other 2,604 - 2,604 ' Total Revenues 171,705 80,402 252,107 1 8 City of Huntington Beach ' Management's Discussion and Analysis For the Year Ended September 30, 2002 ' City Council 262 - 262 , City Administrator 2,214 - 2,214 City Treasurer 1,160 - 1,160 ' City Attorney 3,634 - 3,634 City Clerk 698 - 698 Administrative Services 7,230 - 7,230 , Planning 2,658 - 2,658 Building 3,101 - 3,101 Fire 19,361 - 19,361 Information Systems 4,464 - 4,464 ' Police 42,187 - 42,187 Economic Development 3,080 - 3,080 Community Services 12,440 - 12,440 ' Library Services 4,801 - 4,801 Public Works 28,237 - 28,237 Non-Departmental 19,725 - 19,725 ' Interest on Long-Term Debt 9,438 - 9,438 Water Utility - 27,250 27,250 Emerald Cove Housing - 405 405 ' Emergency Fire Medical - 3,172 3,172 Refuse Collection - 9,178 9,178 Sewer - 2,419 2,419 , Hazmat Service - 143 143 Cultural Affairs - 317 317 Ocean View Estates - 11 11 Total Expenses 164,690 42,895 207,585 ' Increase in Net Assets Before Transfers 7,015 37,507 44,522 Transfers (244) 244 - Net Assets-Beginning of Year(as Restated) 466,802 96,309 663,111 ' Net Assets -End of Year $ 473,673 $ 134,060 $ 607,633 Since no prior year comparable financial statements were prepared, no trend information is presented. This information will be made available in next year's ' ® report. 9 ' City of Huntington Beach Management's Discussion and Analysis ' For the Year Ended September 30, 2002 ' The cost of all governmental activities this year was $164,690,000. However, as shown in the Statement of Activities, the amount that the taxpayers ultimately financed for these activities was only $123,032,000 because some of the cost was paid by those who directly benefited from the programs ($23,556,000), or by other governments and organizations that subsidized certain programs with operating grants and contributions ($5,063,000), and capital grants and ' contributions ($13,039,000). Overall, the City's governmental program revenues were $41,658,000. The City paid for the remaining "public benefit" portion of governmental activities with $129,803,000 in taxes and general revenue (some of ' which could only be used for certain programs) and with other revenues, such as interest and general entitlements. ' Total resources available during the year to finance governmental operations were $633,256,000, consisting of net assets at October 1, 2001 of $466,802,000, program revenues of $41,658,000, general revenues of $130,048,000, and transfers of $244,000. Total expenses for governmental activities during the year were $164,690,000; thus, net assets were increased by $6,771,000, to $476,573,000. ' The cost of all Proprietary (Business Type) activities this year was $42,895,000. As shown in the Statement of Activities and Changes in Net Assets, the amount ' paid by users of the systems was $45,106,000, capital grants and contributions were $33,056,000 other revenue was $2,240,000, and transfers were $244,000. Beginning net assets were $96,309,000 and ending net assets were t $134,060,000. Of the ending net asset amount, $79,785,000, or 59.5% was invested in capital assets, $31,043,000, or 23.2% was restricted for expenditures ' for the Water Master Plan, and $23,232,000, or 17.3% was unrestricted. 10 City of Huntington Beach ' Management's Discussion and Analysis For the Year Ended September 30, 2002 ' The City's programs for governmental activities include General Government, ' Fire, Police, Public Works, Redevelopment, Community Services and Library. The programs for the business type activities include the Water, Sewer, Refuse, ' FireMed, Hazmat Service, Ocean View Estates, and Art Center activities. A listing of each program's revenues and expenses (in thousands) for the current year is presented below. ' Funded by ' Taxes and Less Program Other General Expenses Revenues Revenues ' Governmental Activities: City Council $ 262 $ - $ 262 City Administrator 2,214 (33) 2,181 ' City Treasurer 1,160 - 1,160 City Attorney 3,634 - 3,634 City Clerk 698 (46) 652 Administrative Services 7,230 - 7,230 ' Planning 2,658 (580) 2,078 Building 3,101 (3,940) (839) Fire 19,361 (605) 18,756 ' Information Systems 4,464 - 4,464 Police 42,187 (5,424) 36,763 Economic Development 3,080 (1,777) 1,303 ' Community Services 12,440 (8,655) 3,785 Library Services 4,801 (266) 4,535 Public Works 28,237 (15,921) 12,316 ' Non-Departmental 19,725 (4,411) 15,314 Interest on Long-Term Debt 9,438 - 9,438 Total Governmental Activities $ 164,690 $ (41,658) $ 123,032 ' Business Activities Water Utility 27,250 (26,048) 1,202 Emerald Cove Housing 405 (707) (302) Emergency Fire Medical 3,172 (4,103) (931) Refuse Collection 9,178 (9,182) (4) Sewer 2,419 (4,540) (2,121) Hazmat Service 143 (145) (2) ' Cultural Affairs 317 (189) 128 Ocean View Estates 11 (192) (181) Total Business Activities $ 42,895 $ (45,106) $ (2,21I L ' 11 1 City of Huntington Beach Management's Discussion and Analysis t For the Year Ended September 30, 2002 ' The City's revenue sources were as follows for both governmental and business activities: ' Governmental Percent of Business Percent of Revenues: Activities Total Activities Total ' Property Taxes $ 38,106 14.4% $ = 0.0% Other Taxes 55,084 20.8% 0.0% Use of Money and Property 13,895 5.2% 2,240 2.8% ' From Other Agencies 20,359 7.7% - 0.0% Other 2,604 1.0% 0.0% Charges for Current Service 23,556 8.9% 45,106 56.1% Operating Grants 5,063 1.9% - 0.0% ' Capital Grants 13,039 4.9% 33,056 41.1% Total $ 264,896 100.0% $ 80,402 100.0% ' Financial City's Analysis Of The Ci 's Governmental Funds Y ' As of the close of the current fiscal year, the City's governmental fund balances reported combined ending balance of $75,822,000, a decrease of $35,654,000 in comparison to the prior year, largely a result of expenditure of bond proceeds from prior years. $8,785,000, or 11.5 % of the total is considered unreserved fund balance and is available for ' spending at the City's discretion. • The total fund balance at year-end for the City's General fund was $41,745,000, which is an overall decrease of $9,780,000 over last year. It was primarily due to a reduction in sales and utility taxes. At the end of the current fiscal year, unreserved fund balance for the general fund was $15,974,000, or 12.1% of the total general fund expenditures. The ' amount designated for economic uncertainties was $6,088,000. • The fund balance of the Redevelopment Agency Debt Service Fund increased $20,467,000 from a deficit of $57,527,000 to a deficit of ' $33,549,000. This fund normally operates at a deficit since the Redevelopment Agency incurs debt (in this case, largely interfund debt) to finance operations and capital improvements. By California law, this is ' how Redevelopment Agencies operate. This increase was largely due to a refunding bond issue, which repaid loans owed to the Huntington Beach Public Financing Authority. 12 City of Huntington Beach Management's Discussion and Analysis For the Year Ended September 30, 2002 ' Financial Analysis of the City's Proprietary Funds ' Unrestricted net assets of the Water Fund and non-major enterprise funds increased $15,686,000 and $22,065,000 respectively. The factors affecting this ' were discussed in the section on the City's business activities. Unrestricted net assets of the City's internal service funds decreased by ' $2,942,000 to a deficit of$8,170,000. This was a result of increased medical and workers compensation costs. Staff will develop a plan to eliminate these deficits over the next several years. ' Debt Administration Below is a schedule of the changes to the City's long-term debt (in thousands). ' Additional information on the City's long-term debt is shown in note 11 to the financial statements. ' Balance Balance ' October 1, Incurred or Satisfied or September Governmental Activities: 2001 Issued Matured 30, 2002 Certificates of Participation $ 47,590 $ - $ (30,295) $ 17,295 ' Revenue Bonds 58,400 31,095 (23,370) 66,125 Tax Allocation Bonds 9,770 20,900 (300) 30,370 Special District Bonds 605 - (190) 415 , Claims 10,177 11,939 (9,503) 12,613 Compensated Absences 8,075 3,342 (2,467) 8,950 Leases 2,007 3,219 (1,119) 4,107 Pension Obligation 8,337 256 - 8,593 Loans 9,402 - (477) 8,925 Other Redevelopment Obligations 4,756 6,524 - 11,280 ' Total Debt-Governmental Activities 159,119 77,275 (67,721) 168,673 Business Activities: Compensated Absences 554 - (14) 540 , Leases 431 345 (182) 594 Total Long-Term Obligations -Business Activities 985 345 (196) 1,134 ' Total Debt $ 160,104 $ 77,620 $ (67,917) $ 169,807 13 ' City of Huntington Beach Management's Discussion and Analysis ' For the Year Ended September 30, 2002 ' The City of Huntington Beach is legally restricted to issuing general obligation bonds to 15% of its assessed valuation. Since the City has no general obligation ' bonds outstanding, the limit does not apply. This is shown on page 108 of the financial statements. The City's total debt for governmental activities increased $9,554,000, or 6.0% from its beginning amount largely due to additional claims ' and Redevelopment Agency operative agreements. Debt for business activities increased $149,000 due largely to additional leases. ' Certain long-term obligations of the City are rated by independent agencies for their relative safety as an investment. The City received AAA ratings on the following recently issued obligations: ■ Public Financing Authority 2000 Certificates of Participation ■ Public Financing Authority 2001 (a) Lease Revenue Bonds ' Public Financing Authority 2001 (b) Lease Revenue Bonds Cash Management ' The City pools its cash and investments. Idle cash is invested in certain eligible securities as 'estricted by law and further limited by the City's Investment Policy. ' The goals of the City's Investment Policy are safety, liquidity and yield. For the year, the City Treasurer earned a return of 4.44%. ' Capital Assets The capital assets of the City are those assets, which are used in the performance of the City's functions including infrastructure assets. At September 30, 2002, net capital assets of the governmental activities totaled $565,017,000, an increase of $26,649,000, or 4.9%. This increase is largely due to new infrastructure and the construction of new facilities at the Beach and Sports Complex. The net capital assets of the business-type activities totaled $80,376,000, an increase of $34,033,000, or 73.1%. This is primarily due to the ' new Sewer enterprise fund and capital improvements in the Water Fund . The City has elected to use the "Basic Approach" as defined by GASB statement ' 34 for infrastructure reporting. The following infrastructure networks are recorded as capital assets in the government-wide financial statements: • Storm drain system including pump stations, drainage system and manholes. • Streets, (including land underneath streets) traffic signals, curbs, gutters, ' and sidewalks. 14 City of Huntington Beach ' Management's Discussion and Analysis For the Year Ended September 30, 2002 ' Below is a schedule of the City's capital assets, net of accumulated depreciation (in thousands): ' Balance Balance September 30, September 30, , Government Activities: 2002 2001 Land $ 317,391 $ 313,142 Buildings 64,277 55,765 ' Machinery and Equipment 22,986 23,111 Construction In Progress 22,202 8,509 Infrastructure 138,161 137,841 , Total Governmental Activities 565,017 538,368 Business Activities: Land 8,598 8,598 ' Buildings 23,631 10,230 Machinery and Equipment 4,194 3,395 Construction In Progress 7,845 5,593 , Infrastructure 36,108 18,527 Total Business Activities 80,376 46,343 Total Capital Assets $ 645,393 $ 584,711 , Beginning balances have been restated to comply with GASB Statement 34. Additional information on the City's capital assets is shown in note 12 of the ' financial statements. General Fund Budgetary Highlights , Comparing the fiscal year 2001/2002 original budget (or adopted) General Fund ' (expenditures and transfers) amount of $148,272,000 to the final budget of $156,302,000 shows a net increase of $8,030,000. Included in original budget amount is $2,448,000 of prior year encumbrance carryover into fiscal year ' 2001/2002. The largest supplemental General Fund budget changes were: ' • Civic Center Repairs $136,000 • Outside legal counsel for the City Attorney's $625,000 • Fiscal Policy Transfer to Capital Improvement Fund $1,395,500 ' • United States Department of Justice Fingerprint Charges $90,000 • National Pollutant Discharge Elimination System Permit $350,892 ' • Recreational and Instructional Class Amendment $310,000 • Employee Medical Insurance Charges $375,000 • Additional Equipment Replacement $1,625,000 ' 15 City of Huntington Beach Management's Discussion and Analysis ' For the Year Ended September 30, 2002 Economic Factors And Next Year's Budgets And Rates The key assumptions in the General Fund revenue forecast for fiscal year 2001/2002 were: 1. While the City experienced a 8.8% increase in assessed valuation, property tax revenues decreased by 3.1% due to the City no longer collecting a voter ' approved Debt Service Property Tax to fund employee retirement costs, a revenue reduction of$10 million per year. 2. After the tragic events of September 11th the City was forced to revaluate its ' original sales tax projection from an increase of 6.0%, which was based on the anticipated growth in the retail base, to an actual decrease of 16.5%. Also effected by the events of September 11th was the City's Transient ' Occupancy Tax, which experience a 12.3% decrease. 3. Increased utility cost in California resulted in the City's Utility Users Tax increasing 5.7%. ' 4. Revenue for City issued license and permits increased 8.5% due to increased building activity. 5. Based upon increased debt repayment from the Redevelopment Agency to ' the General Fund use of Money and Property revenue increased 15.5%. 6. Increasing demands for service increased changes for service revenue by 3.8%. ' Contacting the City's Financial Management This financial report is designed to provide our citizens, taxpayers, customers, tand investors and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. If you have questions about this report, separate reports of the City's component units or need any additional financial information, contact the Administrative Services Department, Finance Division at 2000 Main Street, Huntington Beach, California, 92648, ' phone (714) 374-5358 or e-mail kreed@surfcity-hb.org. t 16 � Basic Financial Statements 1 1 1 1 1 1 CITY OF HUNTINGTON BEACH ' STATEMENT OF NET ASSETS SEPTEMBER 30, 2002 ' (IN THOUSANDS) Business- Governmental Type , ASSETS: Activities Activities Total Cash and Investments $ 37,381 $ 40,578 $ 77,959 Receivables 35,475 10,298 45,773 , Internal Balances (2,775) 2,775 - Inventories 806 1,119 1,925 Land Held for Resale 9,139 - 9,139 ' Other Assets 3,407 - 3,407 Restricted Assets: - Cash and Investments - 7,118 7,118 ' Cash with Fiscal Agent 29,752 - 29,752 Capital Assets (Net of Accumulated Depreciation) 565,017 80,376 645,393 TOTAL ASSETS 678,202 142,264 820,466 LIABILITIES: ' Accounts Payable 9,210 5,218 14,428 Accrued Payroll 3,997 319 4,316 ' Accrued Interest Payable 821 - 821 Deposits 3,289 1,581 4,870 Deferred Revenue 18,640 - 18,640 ' Long-Term Obligations: Due Within One Year 13,720 230 13,950 Due in More than One Year 154,952 856 155,808 ' TOTAL LIABILITIES 204,629 8,204 212,833 NET ASSETS: Investment in Capital Assets, Net of Related Debt 425,697 79,781 505,478 Restricted for: ' Debt Service 7,967 - 7,967 Capital Projects 37,691 - 37,691 Other Purposes 12,693 31,043 43,736 ' Unrestricted (10,475) 23,236 12,761 TOTAL NET ASSETS $ 473,573 $ 134,060 $607,633 See independent auditors' report and notes to financial statements 17 ' ' CITY OF HUNTINGTON BEACH STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS ' FOR THE YEAR ENDED SEPTEMBER 30,2002 (In Thousands) t Net(Expense)Revenue and Changes in Pro ram Revenues Net Assets Charges for Operating Current Grants and Capital Grants and Governmental Business-Type ' Ex ensea Services Contributions Contributions Activities Activities Total Functions/Programs Governmental Activities: City Council $ 262 $ - $ $ $ (262) $ $ (262) City Administrator 2,214 33 (2,181) (2,181) ' City Treasurer 1,160 - (1,160) (1,160) City Attorney 3,634 (3,634) (3,634) City Clerk 698 46 (652) (652) Administrative Services 7,230 - (7,230) (7,230) Planning �� 2,658 580 (2,078) (2,078) t Building 3,101 3,940 839 839 Fire 19,361 500 56 49 (18,756) (18,756) Information Systems 4,464 (4,464) (4,464) Police 42,187 4,433 679 312 (36.763) (36,763) Economic Development 3,080 - 1,777 - (1,303) (1,303) ' Community Services 12,440 8,510 145 - (3,785) (3,785) Library Services 4,801 87 179 (4,535) (4,535) Public Works 28,237 1,103 2,319 12,499 (12,316) (12,316) Non-Departmental 19,725 4.411 - - (15,314) (15,314) Interest on Long-Term Debt 9,438 (9,438) (9,438) ' Total Governmental Activities 164,690 23,656 6,063 13,039 (123,032) (123,032) Business-type Activities: Water Utility 27,250 26,048 33,056 31,854 31,854 Emerald Cove Housing 405 707 - 302 302 Emergency Fire Medical 3,172 4,103 931 931 ' Refuse Collection 9,178 9,182 = 4 4 Sewer 2,419 4,540 2,121 2.121 Hazmat Service 143 145 2 2 Cultural Affairs 317 189 (128) (128) Ocean View 7states 11 192 181 181 Total Business 1 ype Activities 42,896 45,106 33,056 35,267 36,267 Total Business and Government Type Activities E 207,686 $ 68,662 $ 5,063 $ 46,096 (123,032) 36,267 (87,766) General Revenues: Taxes: ' Property Taxes 38,106 - 38,106 Other Taxes 55,084 55,084 Total Taxes 93,190 93,190 Other General Revenue: Use of Money and Property 13,895 2,240 16,135 From Other Agencies 20,359 20,359 Other 2,604 2,604 Total Other General Revenue 36,857 2,240 39,097 Transfers (244) 244 Total General Revenues and Transfers 129,803 2,484 132,287 ' Change in Net Assets 6,771 37,751 44,622 Net Assets-Beginning of Year(as Restated) 466,802 96,309 663,111 Net Assets-End of Year $ 473,673 i 134,060 $607,633 ' See independent auditors'report and notes to financial statements 18 CITY OF HUNTINGTON BEACH ' BALANCE SHEET GOVERNMENTALFUNDS ' SEPTEMBER 30,2002 Debt Service Funds Capital Projects Funds Public Capital Public Total Major Other General Redevelopment Financing Redevelopment Improvement Financing Governmental Govemmental ' ASSETS Fund AgencyAuthority AgencyFund Authors Funds Funds Total Cash and Investments $ 5,375 $ 2,241 $ - $ 4,733 $ 1,934 $ - $ 14,283 $ 23,098 $ 37,381 Cash and Investments with Fiscal Agent - 2,473 7,571 - 1,072 18,513 29,629 123 29,752 Taxes Receivable 18,278 2,324 - 55 20,657 996 21,653 Acccounts Receivable 1,168 121 1,981 67 53 3,390 9,607 12,997 ' Unbilled Receivable 813 - - - - 813 - 813 Due from Other Funds 5,544 5,544 5,544 Inventories 806 - 806 806 Land Held for Resale - 9,139 - 9,139 - 9,139 Advances to Other Funds 26,662 - 466 27,128 9,111 36,239 , Other Assets 1608 - - - - - 1,608 1,617 3,225 TOTAL ASSETS $ 60,254 $ 7,159 $ 7,571 $ 15,908 $ 3,539 S 18,566 $ 112,997 $ 44,552 $ 157,549 LIABILITIES AND FUND BALANCES LIABILITIES ' Accounts Payable $ 3,449 $ 336 $ 5 $ 1,515 $ 2,036 $ - $ 7,341 $ 1,838 $ 9,179 Accrued Payroll 3,760 - - 38 5 3,803 170 3,973 Due to Other Funds - - - 1.837 1.837 893 2,730 Deposits Payable 1,523 - 140 - 1,663 1,626 3,289 Advances from Other Funds - 39,014 - 39,014 39,014 Deferred Revenue 9777 1,358 - - 266 - 11,401 12,141 23,542 ' TOTAL LIABILITIES 18,509 40,708 5 1,693 2,307 1,837 65,059 16,668 81,727 FUND BALANCES Reserved for: Encumbrances 4,557 - - 571 1,032 - 6,160 5.067 11,227 Long-Term Receivables 20,410 - 1.981 200 22,591 2,974 25,565 ' Debt Service - 7,566 - - 7,566 - 7,566 Inventory 806 - - 806 806 Capital Projects - - 16,729 16,729 16,729 Land Held for Resale 9,139 9,139 9,139 Total Reserved Fund Balance 25,773 7,566 11,691 1,232 16,729 62,991 8,041 71,032 ' Unreserved,Designated: Designated for Claims Payable 7.162 - - - 7,162 - 7,162 Designated for Future Expenditures 2.722 2,722 5.578 8,300 Designated for Economic Uncertainties 6,088 6,088 - 6,088 Unreserved,Undesignated(Reported in): ' Special Revenue Funds - - 7,967 7,967 Debt Service Funds (33,549) (33,549) 185 (33,364) Capital Projects Funds 2,524 2,524 6,113 8,637 Total Unreserved 16,972 (33,549) 2,524 (15,053) 19,843 4,790 TOTAL FUND BALANCES 41,745 (33,549) 7,566 14,215 1,232 16,729 47,938 27,884 76,822 ' TOTAL LIABILITES AND FUND BALANCES $ 60,254 $ 7,159 $ 7,571 $ 15,908 $ 3,539 $ 18,566 $ 112,997 $ 44,552 $ 157,649 1 1 1 See independent auditors'report and notes to financial statements 19 ' CITY OF HUNTINGTON BEACH RECONCILIATION OF THE BALANCE OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS SEPTEMBER 30, 2002. (in thousands) Amounts reported for governmental activities in the tstatement of net assets are different because: Total Fund Balances Governmental Funds $ 75,822 ' Capital assets used in governmental activities are not financial resources and,therefore,are not reported in the funds 565,017 Other long-term assets are not available to pay for current-period expenditures and,therefore,are deferred in the funds 4,902 ' Long-term Liabilities, including bonds and certificates of participation payable are due and payable and therefore are not reported in the funds. This amount excludes$5,450,000 of long- term claims recorded in internal service funds (163,998) Internal Service funds are used by management to charge the costs of certain insurance to individual funds. The assets and liabilities of these funds are included in the governmental activities section in the Statement of Net Assets. This amount includes certain long-term claims payable. (8,170) ' Net Assets of Governmental Activities $ 473,573 t ' See independent auditors'report and notes to financial statements 20 CITY OF HUNTINGTON BEACH ' STATEMENT OF REVENUES,EXPENDITURES,AND CHANGES IN FUND BALANCE ' GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) Debt Service Funds Capital Projects Funds ' Public Capital Publlc Total Major Other General Redevelopment Financing Redevelopment Improvement Financing Governmental Governmental REVENUES: Fund uthorltv Agency Fund Authority Funds Funds Total ' Property Taxes $26.796 $ 6.223 $ $ - $ $ $ 33.019 $ 185 $ 33,204 Other Taxes 51.808 - 705 52,513 2,571 55,084 Licenses and Permits 6,397 6,397 765 7.162 Fines and Forfeitures 3.797 3,797 - 3.797 From Use of Money and Property 8,576 304 609 568 70 1,493 11,620 2,275 13.895 ' From Other Agencies 13,180 - - 2,523 - 15,703 12,723 28.426 Charges for Current Service 10,107 - - 10,107 2.490 12,597 Other 794 220 6 1,020 1,584 2,604 TOTAL REVENUES 121,455 6,527 609 1,493 2,599 1,493 134,176 22,593 156,769 EXPENDITURES ' Current: City Council 237 - - - - 237 - 237 City Administrator 1,717 - - - - - 1.717 392 2.109 City Treasurer 1,108 - - - - - 1.108 - 1.108 City Attorney 3,363 207 3,570 3,570 ' City Clerk 676 - 676 676 Administrative Services 7.095 7.095 7,095 Planning 2.400 2,400 185 2,585 Building 2.591 400 2,991 2,991 Fire 17,858 - 17,858 166 18.024 Information Systems 2,720 780 3.500 - 3.500 ' Police 37,229 - - 37.229 761 37,990 Economic Development 706 1,026 - 1.732 1,341 3,073 Community Services 9,944 - 67 10,011 1,054 11,065 Library Services 3.485 3,485 865 4,350 Public Works 17.727 - 1,596 19,323 2,242 21,565 , Non-Departmental 9.676 648 512 2,548 13,384 23 13.407 Capital Outlay 10,602 - - 6,578 20,881 38.061 16.295 54,356 Debt Service: Principal 1,071 517 3.455 185 5.228 313 5,541 Interest 121 2,547 4,188 55 6,911 241 7,152 ' TOTAL EXPENDITURES 130,326 3,712 8,155 7,811 26,512 176,516 23,878 200,394 EXCESS(DEFICIENCY)OF REVENUES OVER(UNDER) EXPENDITURES (8,871) 2,815 (7,546) (6,318) (23,913) 1,493 (42,340) (1,285) (43,625) OTHER FINANCING SOURCES(USES) Transfers In 5,017 21,183 11,632 - 19,226 11 57,069 1,879 58.948 ' Proceeds of Long-Tenn Debt 3,219 20,900 31,095 6,524 - 61,738 - 61,738 Premium(Discount)on Issuance of Long-Tenn Debt - (68) (156) - (224) (224) Payments to Escrow - (21,602) (31,071) - - (52.673) (52.673) Transfers Out (9.145) (2,761) (21,239) (10) (894) (13,476) (47.525) (12,293) (59,818) TOTAL OTHER FINANCING SOURCES(USES) (909) 17,652 (9,739) 6,514 18,332 (13,465) 18,385 (10,414) 7,971 ' INCREASE(DECREASE)IN FUND BALANCES (9,780) 20,467 (17,285) 196 (5,681) (11,972) (23,955) (11,699) (35,664) FUND BALANCE-BEGINNING OF YEAR 35,418 3,511 24.851 14.019 6,813 28.701 113,313 38.945 152,258 Prior Period Adjustments 16,107 57,527 (41,420) 638 (40,782) FUND BALANCE AS RESTATED FUND BALANCE-SEPTEMBER 30,2002 $41,745 $ (33,549) $ 7,566 $ 14,215 $ 1,232 $ 16,729 $ 47,938 $ 27,884 $ 75,822 , See independent auditors'report and notes to financial statements 21 , CITY OF HUNTING TON BEACH RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Year Ended September 30, 2002 ' (in thousands) Net Changes in Fund Balances-Total Governmental funds $ (35,654) ' Amounts reported for governmental activities in the Statement of Activities are different because: CAPITAL EXPENDITURES AND DEPRECIATION - Governmental funds report capital outlays as expenditures. However,in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceed depreciation in the current period. 46,052 ' ACCRUAL OF REVENUES - Certain revenues in the Statement of Activities do not meet the"availability"criteria for revenue recognition in the governmental funds and are not reported in the governmental funds as revenue. 4,902 ' LONG-TERM DEBT-Issuances and changes in long-term debt(bonds, leases,certificates of participation,compensated absences,etc)provide current financial resources to governmental funds, while repayments of this debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also,governmental funds report the effect of issuance costs,premiums, discounts, etc. when debt is first issued. These amounts are deferred and amortized in the Statement of Activities. This amount is the net effect of the differences in the treatment of long-term debt and related items (5,587) INTERNAL SERVICE FUNDS - These are used by management to charge the costs of certain activities to individual funds. The net revenue of the Internal Service Funds is reported with Governmental Activities. (2,942) ' Change in Net Assets of Governmental Activities $ 6,771 t ' See independent auditors'report and notes to financial statements 22 CITY OF HUNTINGTON BEACH ' STATEMENT OF NET ASSETS PROPRIETARY FUNDS ' SEPTEMBER 30,2002 (in thousands) ENTERPRISE FUNDS ' Governmental Non-Major Activities- Enterprise Internal ASSETS Water Fund Funds Total Service Funds ' Current Assets: Cash and Investments $ 41,217 $ 6,479 $ 47,696 $ - Other Receivables 1,699 2,436 4,135 12 Inventories 1,119 - 1,119 - , Unbilled Receivable 4,308 1,855 6,163 Due from Other Funds 1,292 - 1,292 - Other Assets - - - 182 Total Current Assets 49,636 10,770 60,405 194 ' Non-Curret Assets: Advances to Other Funds 3,018 - 3,018 - Capital Assets: Land 3,907 4,691 8,598 - Buildings 23,751 7,129 30,880 - ' Machinery and Equipment 5,890 1,317 7,207 - Infrastructure 49,911 33,796 83,707 - Construction in Process 7,845 - 7,845 - LessAccumulatedDepreciation (38.296) (19,565) (57,861) - ' Total Capital Assets 53,008 27,368 80,376 - TOTAL ASSETS 105,661 38,138 143,799 194 LIABILITIES Current Liabilities: Accounts Payable 4,281 937 5,218 31 ' Accrued Payroll 192 127 319 24 Due to Other Funds - 1,292 1,292 2,814 Deposits Payable 1,554 27 1,581 - Current Portion of Leases and Claims 129 101 230 3,885 ' Total Current Liabilities 6,156 2,484 8,640 6,754 Liabilities Payable from Restricted Assets - Non-Current Liabilities: Capital Leases 314 281 595 - Claims Payable - - - 5,450 Compensated Absences 392 99 491 45 Advances from Other Funds - 243 243 Less Current Portion of Claims and Leases (129) (101) (230) (3,885) Total Non-Current Liabilities 577 522 1,099 1,610 , TOTAL LIABILITIES 6,733 3,006 9,739 8,364 NET ASSETS Invested in Capital Assets,Net of Related Debt 52,694 27,087 79,781 - Restricted for: ' Other Purposes 31,043 - 31,043 Unrestricted 15,191 8,045 23,236 (8,170) TOTAL NET ASSETS $ 98,928 $ 35,132 $ 134,060 $ (1,170) 1 See independent auditors'report and notes to financial statements 23 ' CITY OF HUNTINGTON BEACH ' STATEMENT OF REVENUES, EXPENSES,AND CHANGES IN NET ASSETS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2002 (in thousands) Governmental Non-Major Activities- Enterprise Internal Water Fund Funds Total Service Funds OPERATING REVENUES: ' Sales $ 24,145 $ - $ 24,145 $ Rentals 831 831 Fees for Service - 17,716 17,716 8,003 Other 1,903 511 2,414 15 TOTAL OPERATING REVENUES 26,048 19,058 45,106 8,018 OPERATING EXPENSES: Water Purchases 9,132 9,132 Supplies and Operations 3,004 14,715 17,719 11,586 ' Engineering 1,638 - 1,638 - Production 2,010 2,010 Maintenance 3,397 3,397 Water Meters 1,301 1,301 Water Quality 239 239 In-Lieu Taxes to General Fund 4,433 4,433 Depreciation 2,096 930 3,026 TOTAL OPERATING EXPENSES 27,250 15,645 42,895 11,586 OPERATING INCOME(LOSS) (1,202) 3,413 2,211 (3,568) ' NON-OPERATING REVENUES(EXPENSES): Interest Income 2,011 170 2,181 Capital Improvement Fees 6,886 6,886 Loss on Sale of Plant,Property,and Equipment - 59 59 TC TAL NON-OPERATING REVENUES(EXPENSES) 8,897 229 9,126 - CF ANGE IN NET ASSETS BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS: 7,695 3,642 11,337 (3,568) TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers In - 820 820 1,354 ' Transfers Out - (576) (576) (728) Capital Contributions 7,991 18,179 26,170 TOTAL TRANSFERS AND CAPITAL CONTRIBUTIONS 7,991 18,423 26,414 626 ' TOTAL CHANGE IN NET ASSETS 15,686 22,065 37,761 (2,942) NET ASSETS-BEGINNING OF YEAR 83,242 13,067 96,309 (5,228) NET ASSETS-END OF YEAR $ 98,928 $ 35,132 $ 134,060 $ (8,170) 1 1 ' See independent auditors'report and notes to financial statements 24 1 CITY OF HUNTINGTON BEACH ' STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002 (in thousands) , Governmental ' Non-Major Activities- Enterprise Internal Water Fund Funds Total Service Funds Cash Flows from Operating Activities: Cash Received from Customers and Users $ 24,200 $ 17,549 $ 41,749 $ 8,018 , Cash Paid to Employees for Services (4,411) (2,668) (7,079) (609) Cash Paid to Suppliers of Goods and Services (19,255) (12,321) (31,576) (9,381) Other Operating Items 553 229 782 Net Cash Provided(Used)by Operating Items 1,087 2,789 3,878 (1,972) ' Cash Flows from Noncapital Financing Activities: Transfers In - 820 820 1,354 Transfers Out (576) (576) (728) ' Net Cash Provided(Used)by Non Capital Financing Activities - 2" 2" 626 Cash Flows from Capital and Related Financing Activities: Purchase of Plant,Property,and Equipment (7,222) (477) (7,699) - ' Principal Paid on Long-Term Debt (72) (150) (222) - Capital Surcharge 6,886 - 6,886 - Net Cash Provided(Used)by Capital and Related Financing Activities (408) (627) (1,035) ' Cash Flows from Investing Activities Cash Received from Investments 1,393 170 1,563 - Net Increase in Cash and Cash Equivalents 2,072 2,576 4,648 (1,346) Cash and Cash :quivalents,Beginning of Year 39,145 3,903 43,048 1,346 Cash and Cash iquivalents,End of Year $ 41,217 $ 6,479 $ 47,696 $ - ' Reconciliation of Operating Income to Net Cash Provided(used)by Operating Activities Operating Income(Loss) $ (1,202) $ 3,413 $ 2,211 $ (3,568) ' Other Nonoperating Items Adjustments to Reconcile Operating Income to Net Cash Provided(Used)by Operating Activities Depreciation 2,096 930 3,026 - ' Decrease(Increase)in Accounts Receivable 348 (1,004) (656) 32 Decrease(Increase)in Unbilled Receivables (293) (636) (929) - Decrease(Increase)in Advances to Other Funds (124) - (124) Decrease(Increase)in Due from Other Funds (1,292) (1,292) - Decrease(Increase)in Prepaid Insurance - - (110) , Decrease(Increase)in Inventory (15) (15) - Increase(Decrease)in Accounts Payable 1,488 (222) 1,266 (15) Increase(Decrease)in Accrued Payroll 31 69 100 2 Increase(Decrease)in Accrued Interest Payable - (398) ' Increase(Decrease)in Due to Other Funds - 223 223 1,440 Increase(Decrease)in Advances from Other Funds - (1) (1) - Increase(Decrease)in Deposits 44 6 50 - Increase(Decrease)in Claims Payable - - - 664 Increase(Decrease)in Compensated Absences 6 11 17 (19) ' Net Cash Provided(Used)by Operating Activities $ 1,087 $ 2,789 $ 3,876 $ (1,972) 1 See independent auditors'report and notes to financial statements 25 ' ' CITY OF HUNTINGTON BEACH STATEMENT OF FIDUCIARY FUND NET ASSETS FIDUCIARY FUNDS SEPTEMBER 30,2002 Agency Funds Trust Funds Business Central Net Empbyea Retirementcommunity Improvement operations Deferred Retiree Medial supplement Assets: General Deposit Facilities Districts District Authority Tax Overide compensation Insurance Fund Cash and Investments $ 528 $ 833 $ - $ - $ 2,318 $ 200 $ 4,781 $ 8,737 Cash with Fiscal Agent - 6,509 17 1,292 - - ' Accounts Receivable,Net 127 - - - interest Receivable 12 37 42 Total Assets $ 528 f 7,469 f" 17 $ 1,292 S 2,330 $ 200 S 4,818 f 8,779 Liabilities: Accounts Payable _ - 2 8 - - 3 Due to Bondholders 7,469 Total Liabilities 7,469 2 8 3 Net Assets: ' Held In Trust for Pension Benefits and Other Purposes S 528 S S is f 1,284 S 2,330 $ 200 f 4,816 $ 6,776 CITY OF HUNTINGTON BEACH ' STATEMENT OF CHANGES IN FIDUCIARY FUND NET ASSETS TRUST FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 ' Employee Retirement Deferred Retiree Medical Supplement Additions: Compensation Insurance Fund Employer Contributions $ - $ 578 $ 2,746 Interest Income 6 166 266 ' Total Additions $ 6 $ 744 S 3,012 Deductions: Benefits 133 654 1,040 Administration 45 Total Deductions 133 664 "1,085 ' Change in Net Assets (127) 90 1,927 Net Assets-Beginning of Year 327 4,728 6.849 Net Assets-End of Year S 200 S 4,818 $ 8,776 1 1 ' See independent auditors'report and notes to financial statements 26 This page intentional left bl,3nk ' � Notes to Financial, Statements 1 1 1 1 1 1 1 1 1 City of Huntington Beach Notes to Financial Statements , For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ' a. Implementation of New Pronouncements: ' This is the first year the City of Huntington Beach has adopted the following new financial ' reporting requirements of Government Accounting Standards Board. ■ Statement No. 34, Basic Financial Statements and Management's Discussion ' and Analysis for State and Local Governments.- ■ Statement No. 37, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments: Omnibus ' ■ Statement No. 38, Certain Financial Statement Note Disclosures GASB Statement No. 34 is a new financial reporting requirement for local governments in ' the United States. The City has implemented this pronouncement and has restructured much of the information that it has presented in the past. The main goal is to make the reports more comprehensive and easier to understand and use. t GASB Statement No. 37 addresses selected issues and amends GASB Statement No. 21, Accounting for Escheat Property, and No. 34, Basic Financial Statements and ' Management's Discussion and Analysis for State and Local Governments. These Statements make selective changes including accounting for Escheat Property, Management's Discussion and Analysis, Capitalization of Construction—Period Interest, ' Modified Approach for Reporting Infrastructure, Program Revenues and Major Fund Criteria. GASB Statement No. 38 establishes and modifies disclosure requirements related to ' Summary of Significant Accounting Policies, actions taken to address violations of significant finance—related legal and contractual provisions, debt and lease obligations, ' short-term debt, disaggregation of receivable and payable balances, and interfund balances and transfers. b. Government-Wide Financial Statements: ' The Government-Wide Financial Statements include a Statement of Net Assets, a ' Statement of Activities, and Changes in Net Assets. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a ' total column. Fiduciary activities of the City are not included in these statements. These statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets and liabilities, including ' 1 27 1 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ' b. Government-Wide Financial Statements: capital assets, as well as infrastructure assets, and long-term liabilities, are included in the ' accompanying Statement of Net Assets. The Statement of Activities presents changes in net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability ' is incurred. The statement of activities demonstrates the degree with which the direct expenses of a ' given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect expenses are allocated to the various functions based on a proportionate use of services. The types of ' transactions reported as program revenues for the City are reported in three categories: 1) charges for current services, 2) operating grants and contributions, and 3) capital grants and contributions. Taxes and other items not properly included among program ' revenues are reported as general revenues. Government-wide financial statements do not provide information by fund. or account ' group. They simply distinguish betwean governmental and business activities. The City's statement of net assets includes both current and non-current assets and liabilities. In prior years, the non-current assets and liabilities were recorded in the General Fixed- Assets Account Group and the General Long-Term Debt Account Group which are no longer reported. ' Financial Statement Classification In the Government-Wide financial statements net assets are classified in the following ' categories:Invested In Capital Assets, Net of Related Debt — This category groups all capital ' assets, including infrastructure, into one component of net assets. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduces this category. Restricted Net Assets — This category presents restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions ' imposed by law through constitutional provisions or enabling legislation. This category presents restrictions placed on the categories of Capital Projects, Debt Service, and Specific Projects and Programs as established by the City Council. Unrestricted Net Assets — represent the net assets of the City, not restricted for any project or other purpose. 1 28 1 City of Huntington Beach Notes to Financial Statements , For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): , c. Fund Financial Statements: ' Separate fund financial statements are prepared for governmental funds, proprietary ' funds, and fiduciary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. The City applies all applicable GASB pronouncements (including all NCGA Statements ' and Interpretations currently in effect) as well as the following pronouncements issued on or before November 30, 1989, to the business type activities, unless those , pronouncements conflict with or contradict GASB pronouncements, Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARB) of the committee on ' Accounting Procedure. The City applies all applicable FASB Statements and Interpretations issued after November 30, 1989, except those that conflict with or contradict GASB pronouncements. ' Measurement Focus, Basis of Accounting, aad Financial Statement Presentation ' All governmental funds are accounted for on a spending or"current financial resources" measurement focus and the modified accrual basis of accounting. Only current assets and current liabilities are included on the Balance Sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under modified accrual basis of accounting, revenues are recognized in the , accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after year-end) are recognized when , due. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is ' incurred. In the Fund financial statements, reserves and designations segregate portions of fund ' balance that are either not available or have been earmarked for specific_purposes. The various reserves and designations are established by actions of the City Council and Management and can be increased, reduced or eliminated by similar actions. ' 29 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): c. Fund Financial Statements: The City reports the following major funds: Governmental Funds: • General Fund is used to account for activity not required to be accounted for in another fund. Debt Service Funds: • 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. • Capital Projects Funds: ' • The Public Financing Authority Fund accounts for expenditures relating to capital improvements funding by Public Financing Authority bond issues. • The Redevelopment Agency Fund accounts for acquisition and construction in the ' five project areas. ' • The Capital Improvement Fund accounts for major capital improvements not made ' by other capital projects funds or proprietary funds. Proprietary Funds ' • The Water Fund is used to account for sale of water to businesses and customers. Governmental Fund Financial Statements: ' Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net assets as presented in these statements to the net assets presented in the Government-Wide Financial Statements. The City presents all major funds that met those qualifications. Proprietary Fund Financial Statements: Proprietary Fund Financial Statements include a Statement of Net Assets, a Statement of ' Revenues, Expenses and Changes in Fund Net Assets, and a Statement of Cash Flows for each major proprietary fund and non-major funds aggregated. A column representing Internal Service Funds (used to report workers compensation and employee indemnity ' plan health insurance activity) are also presented in these statements. However, Internal Service balances and activities have been combined with the governmental activities in the Government-Wide financial statements. 30 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ' c. Fund Financial Statements: ' Proprietary funds are accounted for using the"economic resources"measurement focus ' and the accrual basis of accounting.Accordingly, all assets and liabilities(whether current or non-current) are included on the Statement of Net Assets.The Statement of Revenues, Expenses and Changes in Fund Net Assets presents increases (revenues) and ' decreases (expenses) in total net assets. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. ' Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating ' revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses. Fiduciary Fund Financial Statements Fiduciary Fund Financial Statements include a Statement of Net Assets and a Statement of Changes in Net Assets for Trust Funds. The City's Fiduciary funds represent Agency ' Funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The Agency funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual ' basis of accounting as are the governmental funds explained above. Benefits paid from the pension trust funds are recognized when paid. Contributions made are funded by a percentage of payroll and are recognized when the payroll is incurred. Fiduciary funds ' are not presented in the government-wide financial statements because these funds do not represent net assets available to the City. Reconciliations of Financial Statements , Reconciliation of the Fund financial statements to the Government-Wide financial statements is provided to explain the differences created by the integrated approach of ' GASB Statement No. 34. Prior-Year Restatements: ' In order to facilitate the implementation of GASB 34,the classification of certain funds has been changed for the current year (see note 14c). ' 31 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ' d. Cash and Investments: The City records investments at fair value. The City pools cash resources of its various funds to facilitate cash management. Cash in excess of current requirements is invested and reported as investments. It is the City's intent to hold investments until maturity. However, the City may, in response to market conditions, sell investments prior to ' maturity in order to improve the quality, liquidity or yield of the portfolio. Interest earnings are apportioned among funds based on ending accounting period cash and investment balances. ' The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and highly liquid investments with original maturities of three months or less at the time of acquisition. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for ' Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those ' securities for which market quotations are readily available. The City participates in the Local Agency Investment Fund (LAIF), an investment pool managed by the State of California. LAIF has invested a portion of the pool funds in Structured Notes and Asset-Backed Securities. LAIF's investments'are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. ' In addition, these Structured Notes and Asset-Backed Securities are subject to market risk as a result of changes in interest rates. ' e. Capital Assets: Capital assets, which include property, plant, equipment, and infrastructure, are reported in the applicable governmental or business-type activities columns in the government- wide financial statements. Capital assets have an acquisition cost of$5,000 or greater ($50,000 for infrastructure) and a useful life of two years or more. The City records all ' purchased capital assets at historical cost(where historical records are available) and at estimated historical cost where no historical records exist. Capital assets acquired from gifts or contributions are recorded at fair market value at the time received, or in the case ' of infrastructure assets, at City Council acceptance date. 32 1 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ' e. Capital Assets: ' In the Government-Wide and proprietary fund financial statements, depreciation is recorded on the on the straight-line method over the estimated useful lives of the assets ' shown below and charged to the respective fund. No depreciation is recorded in the governmental funds of the fund financial statements. Production, pumping transmission and distribution plant 10 to 15 years ' General Plant 20 to 50 years Transportation Equipment 5 to 30 years ' Infrastructure 50 Years Interest is capitalized on proprietary fund assets acquired with tax-exempt debt. The ' amount of interest to be capitalized is calculated by offsetting interest expense incurred from the date of borrowing until completion of the project with interest earned on the , invested proceeds over the same period. f. Inventories: ' Inventories are recorded in governmental funds by the consumption method. Inventories are capitalized and recorded as expenditures when used and are valued using the ' average cost method. This amount is offset with a reservation of fund balance. Proprietary inventories are valued at weighted-average cost. g. Interfund Transactions: , As a general rule, interfund transactions have been eliminated from the government-wide ' financial statements. Exceptions to this rule are payments in-lieu or charges for current service between the City's enterprise activity and the City's General Fund. Elimination of these transactions would distort the direct costs and program revenues for the various ' functions Certain eliminations have been made regarding interfund activities, payables and receivables. All internal balances in the Statement of Net Assets have been eliminated except those representing balances between the governmental activities and ' the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental , and business-type activities have not been eliminated. 33 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 ' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ' g. 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. h. Long-Term Obligations: ' In the government-wide and proprietary fund financial statements, long-term obligations are recorded as liabilities in the applicable governmental activities, business type activities, or proprietary fund-type statement of net assets. Bond premiums and ' discounts, as well as issuance costs, are deferred and amortized over the life of the debt for all issues after October 1, 2001. Premiums and discounts for debt issued before October 1, 2001 are not recorded or amortized. ' In the governmental fund financial statements, bond discounts and premiums are recognized as another financing source or use. Issuance costs are recorded a current ' year expenditure. ' i. Employee Compensated Absences: The Agency records the cost of all accumulated and unused leave time (vacation, sick, ' comp)as a liability when earned in the government-wide financial statements. In the fund financial statements these amounts are recorded as expenditures in the years paid since it is the City's policy to pay these from future financial resources, rather than available, ' spendable resources. 34 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ' j. 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. ' In the government-wide financial statements, property tax is recorded when earned, regardless of when levied, due, or received. In the fund financial statements, 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 that are collected more than 60 days after the fiscal year ' end. Since the City's fiscal year differs from the County's property tax year, there is a difference between the property tax revenue recorded on the fund financial statements and the government-wide financial statements which is noted as a reconciling item in both ' the Reconciliation of the Statements of Revenues, Expenditures, and Changes in Fund Balance of Governmental Funds to the Statement of Activities and the Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets. , 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 35 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 ' 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): ' k. 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. I. 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. m. Estimates: The accompanying financial statements require management to make estimates and assumptions that effect certain report amounts and disclosures.Actual results could differ ' from those estimates. 2. REPORTING ENTITY: ' The City of Huntington Beach is the primary government..It was incorporated in 1909, is a charter, full-service city. The form of government is Council-Manager. Component units are legally separate organizations for which the City Council is financially accountable, or organizations that if excluded from the accompanying financial statements,would make them misleading. The component units described below are blended (presented as if they are part ' of the primary government) with the primary government for financial reporting purposes because either the component units have governing bodies identical to the City's (the City Council) or provide services exclusively to the City. Financial accountability means the appointment of a voting majority of the component unit's board and either the ability to ' impose will by the City or the possibility that the component unit will provide a financial benefit or impose a financial burden on the City. ' 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. ' Separately prepared financial statements are available for the Redevelopment Agency from the City's Administrative Services Department. 36 City of Huntington Beach Notes to Financial Statements , For the Year Ended September 30, 2002 2. REPORTING ENTITY: ' • 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. There are no separate financial statements prepared for the Civic Improvement Corporation. During the year ' all of the bonds for the Civic Center were defeased and the lease with the City was terminated. • 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. There are separately prepared financial statements available for the Public Financing Authority ' available from the City's Administrative Services Department. • The City of Huntington Beach Community Facilities Districts 1990-1, 2000-1 and Boeing (Community Facilities Districts), 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 Districts' debt is not an obligation of the City. 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. There are no separate financial statements for this entity. ' 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. 37 1 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 ' 3. CASH AND INVESTMENTS (CONTINUED): ' Cash and investments at year-end totaled (in thousands): Statement of Net Assets: ' Cash and Investments $ 77,959 Restricted Assets (Cash and Cash Equivalents) 7,118 Cash with Fiscal Agent-Restricted 29,752 ' Total Per Statement of Net Assets 114,829 Fiduciary Funds: Cash and Investments 17,397 ' Cash with Fiscal Agent- Restricted 7,818 Total Fiduciary Funds 25,215 ' Total Cash and Investments $140,044 Cash and investments were categorized as follows (in thousands) Category Fair ' Non Bank Value/Carrying DEPOSITS: 1 2 3 Categorized Balance Amount Demand Accounts $ 100 $ 339 $ - $ - $ 3,357 $ 439 ' INVESTMENTS:Commercial Paper 1,992 - 1,992 Investment in L.A.I.F. 37,814 37,814 ' Federal Agency Issues 52,954 - - - 52,954 Treasury Securities 5,053 - - - 5,053 ' Medium Term Notes 7,906 - - - 7,906 Investments with Fiscal Agent: Guaranteed Investment Contracts - - - 19,542 19,542 ' Investment in L.A.I.F. - = = 1,109 1,109 Federal Agency Issues 3,110 3,110" Money Market Funds - - 9,707 9,707 U.S. Treasury Obligations - - 351 - 351 Subtotal of Investments 67,905 - 351 71,282 - 139,538 ' Total Deposits and Investments $ 68,005 $ 339 $ 351 $ 71,282 $ 3,357 139,977 Petty Cash 67 Totals $ 140,044 t 38 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 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 Throughoutthe year, the City utilized overnight repurchase agreements fortemporary , 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: 39 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 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 9 Y Contracts and Money Market Mutual Funds are not categorized, as GASB 3 does not require ' categorization of investment pools managed by another government. • 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 $38,923,000. t 40 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 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.. ' 5. DEFERRED REVENUE: ' Certain revenues in governmental funds are deferred until received. The property tax amounts are recognized in the year as revenue in the government-wide financial statements, ' but are recorded as deferred revenue in the fund financial statements. The amounts are as follows (in thousands): Other Property Deferred Interest on Deferred Taxes Interfund Loans Revenue Total ' General Fund $ 3,520 $ 6,257 $ - $ 9,777 Redevelopment Agency Debt Service Fund 1,358 - - 1,358 Capital Improvement Fund - 266 - 266 Non-Major Governmental Funds 24 8,857 3,260 12,141 ' Total $ 4,902 $ 15,380 $ 3,260 $ 23,542 1 41 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 ' 6. RETIREMENT PLAN — NORMAL: a. Plan Description: ' The City contributes to the California Public Employees' Retirement System (CALPERS), an agent, multiple-employer public employee defined benefit pension plan. CALPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death ' benefits to plan members and beneficiaries. CALPERS acts as a common investment and administrative agent for participating public entities within California. Benefit provisions and all other requirements are established by state statute and city ordinance. Copies of ' CALPERS annual financial report may be obtained from their executive office: 400 P Street, Sacramento, CA 95814. ' b. Employer and Employee Contribution Obligations: The City makes two types of contributions for covered employees. The first contribution represents the amount required to be made by the City (the employer rate). The second represents an amount which is made by the employee, but is reimbursed to the employee by the City (the member rate). The member rate is set by contract and normally remains ' unchanged. The employer rate is an actuarially established rate, is set by CALPERS, and changes from year to year. The employer and member rates for the fiscal year ending September 30, 2002 are: ' Rate Local Miscellaneous 0.0000% ' Local Safety 0.0000% ' c. Annual Pension Cost: ' The City's annual pension cost of$5,085,000 was equal to the City's required and actual contributions. The required contribution was determined as part of a June 30, 2001 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, 2002. Significant assumptions were: 42 1 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 6. RETIREMENT PLAN — NORMAL (CONTINUED): ' c. Annual Pension Cost: ' • 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 CALIPERS. 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 unfundea liability ' may not be.lower than the payment calculated over a 30-year amortization period. d. Trend Information: ' Annual Pension Cost Percentage of APC Net Pension Fiscal Year (In Thousands) Funded Obligation ' 9/30/2000 $5,516 100% $0 9/30/2001 $4,642 100% $0 9/30/2002 $5,085 100% $0 ' 1 43 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 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, 2002 data, only 747 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 4.33% of total 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, 2002 were (in thousands): ' Annual required contribution $3,228 Interest on net pension obligation 458 ' Adjustment to annual required contribution 594 Annual pension cost 3,092 Contributions made (2,836) ' Increase (decrease) in net pension obligation 256 Net Pension Obligation — Beginning of Year 8,337 Net Pension Obligation — End of Year 8 593 44 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 7. RETIREMENT PLAN — SUPPLEMENTAL (CONTINUED): ' c. Annual Pension Cost and Net Pension Obligation: ' 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 6/30/00 $2,536 64% $8,150 ' 6/30/01 2,455 88% 8,337 6/30/02 3,092 92% 8,593 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% 2002 2,836 88% 45 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 ' 7. RETIREMENT PLAN — SUPPLEMENTAL (CONTINUED): ' 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 government-wide financial statements. The amount of this liability is $8,593,000. Actuarial studies and ' updates were performed since 1991 and there is a substantial amount of unfunded pension benefit liability that would have been recorded as a liability in the government- wide financial statements if the studies would have been performed (see Note 12). ' 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 Ci-,y. • 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. 46 1 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 8. POST-EMPLOYMENT MEDICAL INSURANCE (CONTINUED): ' 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 1,065 Employer's actuarially required contributions $ 744 ' Employer's actual contributions $ 579 Below is a summary of the Unfunded Actuarial Accrued Liability for the plan (in ' thousands) Actuarial accrued liability $11,441 1 Net assets available for plan benefits 4( ,818) Unfunded Actuarial Accrued Liability $6,623 Under current generally accepted accounting principles, unfunded liabilities on other post- ' employment benefits, are not required to be recorded in the financial statements. 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. Liability Claims: ' The City records liability claims as expenditures in the General Fund. The liability for these claims is recorded as part of long-term obligations in the Government-Wide financial statements. Claims of up to $1,000,000 are paid from the General Fund. 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. 47 1 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' . 9. RISK MANAGEMENT (CONTINUED): Health and Workers Compensation Claims: ' The City established separate reserve funds to account for workers compensation, and employee health. These funds are recorded as internal service funds and finance uninsured risks of loss.Workers' compensation claims of up to$350,000 per claim and health claims of tgreater than $100,000 per claim are paid from these funds. 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' Insurance Compensation Liability Reserve Reserve Insurance Total ' 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 Additions 2001-2002 6,138 3,400 2,400 11,938 Reductions-2001-2002 (5,953) (2,921) (629) (9,503) Net Increase (Decrease)2001-2002 185 479 1,771 2,435 Balance September 30, 2002 $ 385 $ 5,065 $ 7,162 $ 12,612 1 t 48 t City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 10. INTERFUND TRANSACTIONS: ' a. Interfund Advances: , The amounts at September 30, 2002 were (in thousands): ' Advances Advances To From ' Governmental Funds $ 36,239 $ 39,014 Enterprise Funds 3,018 243 Total $ 39,257 $ 39,257 Advances to: Capital Non-Major Total Total ' General Improvemen Governmental Governmental Advances Advances from: Fund Fund Funds Funds Water Fund From Governmental Funds: ' Debt Service Funds: Redevelopment Agency $ 26,662 $ 466 $ 8,868 $ 35,996 $ 2,775 $ 38,771 Non-Major Enterprise Funds - - - - 243 243 ' Internal Service Funds - - Total Advances to $ 26,662 $ 466 $ 8,868 $ 35,996 $ 3,018 $ 39,014 1 b. Due To/From Other Funds: The amounts at September 30, 2002 were (in thousands): ' Due To Other Funds ' Total Due to Due From Other Funds General Fund Water Fund Other Funds Public Financing Authority Capital Projects Fund $ 1,837 $ - $ 1,837 ' Non-Major Governmental Funds 893 - 893 Non-Major Enterprise Funds - 1,292 1,292 ' Internal Service Funds 2,814 - 2,814 Total Due From Other Funds $ 5,644 $ 1,292 $ 6,836 49 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 10. INTERFUND TRANSACTIONS (CONTINUED): ' c. Transfers In/Out: The amounts at September 30, 2002 were (in thousands): Transfers ' Transfers In Out Governmental Funds $ 58,948 $ 59,818 Enterprise Funds 820 576 ' Internal Service Funds 1,354 728 Total $ 61,122 $ 61,122 Transfers Out Debt Service Funds Capital Projects Funds Transfers Public Capital Total Major Redevelopment Financing Redevelopment Improvement Public Financing Governmental In: General Fund Agency Authority Agency Funi Authority Funds ' Governmental Funds: General Fund $ - $ - $ 3,468 $ - $ 3,490 $ - $ 6,958 Debt Service Funds: ' Redevelopment - Agency 98 1,418 - 1,516 Public Financing Authority - 21,183 - - - 11 21,194 Capital Projects Funds: - Redevelopment Agency 10 - - - - - 10 ' Capital - Improvement Fund 713 713 Public Financing Authority - - 2,392 - 11,084 - 13,476 Non-Major Governmental Funds 3,503 - 3,971 - 4,202 - 12,126 Non-Major Enterprise Funds 193 - 383 - - - 576 Internal Service Funds 500 - - - - - 500 Total Transfers In $ 5,017 $ 21,183 $ 11,632 $ - $ 19,226 $ 11 $ 67,089 1 50 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 10. INTERFUND TRANSACTIONS: ' d. Transfers In/Out: ' Transfers Out Non-Major Total Non-Major ' Governmental Governmental Enterprise Internal Service ETotaisfers Transfers In: Funds Funds Funds Funds Governmental Funds: ' General Fund $ 361 $ 7,319 $ 700 $ 1,126 $ 9,145 Debt Service Funds: Redevelopment ' Agency 1,245 2,909 - - 2,761 Public Financing Authority 45 21,239 - 21,239 Capital Projects Funds: - ' Redevelopment Agency - 10 - - 10 Capital Improvement ' Fund 181 894 - - 894 Public Financing Authority - 13,476 - - 13,476 Non-Major ' Governmental Funds 47 11,723 120 - 12,293 Non-Major Enterprise Funds - 576 - - 576 ' Internal Service Funds - 500 - 228 728 Total Transfers In $ 1,879 $ 58,948 $ 820 $ 1,354 $ 61,122 51 1 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 I I.LONG-TERM OBLIGATIONS: Below is a schedule of changes in long-term obligations for the year (in thousands). ' Principal October 1, September Due Within Governmental Activities: Note 2001 Additions Retirements 30,2002 Accrued Interest One Year Civic Improvement Corporation: Refunding Certificates of Participation(Civic - Center)-1993 11(a)(1) $ 16,655 $ $ (16,655) $ - $ $ Refunding Certificates of Participation(Police ' Administration Building)-1993 11(a)(2) 13,095 (13,095) Total Civic Improvement Corporation 29,750 (29,750) Public Financing Authority: 1 1992 Revenue Bonds 11(b)(1) 20,460 - (20,460) - - - 1997 Leasehold Revenue Bonds 11(b)(2) 6,580 - (510) 6,070 88 555 2000 Certificates of Participation 11(b)(3) 17,840 - (545) 17,295 73 560 ' 2001-a Lease Revenue Bonds 11(b)(4) 31,360 - (580) 30,780 117 560 2001-b Lease Revenue Bonds 11(b)(5) 31,095 (1,820) 29,275 191 1,475 Total Public Financing Authority 76,240 31,095 (23,915) 83,420 468 3,150 ' Redevelopmen':Agency: 1999 Tax Allocation Refunding Bonds 11(c)(1) 9,770 (300) 9,470 72 $ 310 2002 Tax Allocation Refunding Bonds 11(c)(2) - 20,900 - 20,900 155 685 Mayer Disposition and Development Agreement 11(c)(3) 4,756 6,524 - 11,280 Section 108 Loan 11(c)(4) 8,130 - (240) 7,890 100 260 Note Payable 11(c)(5) 345 - (52) 293 - 293 Total Redevelopment Agency 23,001- 27,424 (592) 49,833 327 1,548 Other Long-Term Obligations: Reservoir Hill Assessment Bonds 11(d)(1) 605 - (190) 415 3 $ 55 Energy Financing Loan 11(d)(2) 927 (185) 742 10 197 Leases Payable 11(d)(3) 2,007 3,219 (1,119) 4,107 13 - ' Compensated Absences 11(d)(4) 8,075 3,342 (2,467) 8,950 - Claims Payable 11(d)(5) 10,177 11,938 (9,503) 12,612 - 4,885 ' Net Pension Obligation 11(d)(6) 8,337 256 - 8,593 - - Total Other Long-Term Obligations $ 30,128 $ 18,765 $ (13,464) $ 35,419 $ 26 $ 5,137 Total Long-Term Obligations-Governmental Activities $ 159,119 $ 77,274 $ (67,721) $ 168,672 $ 821 $ 9,835 1 52 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS: ' Below are reconciliations from amounts in the above table to amounts in the accompanying ' government-wide financial statements (in thousands): Proceeds of Long-Term Debt in Governmental Fund Financial Statements $ 61,738 ' Items Not Recorded as Proceeds of Long-Term Debt: Increase in Compensated Absences 3,342 ' Increase in Claims Payable 11,938 Interest in Net Pension Obligation 256 Increases in Above Schedule $ 77,274 ' Principal Paid in Governmental Fund Financial Statements $ 5,541 ' Decrease in Claims Payable 9,503 Decrease in Compensated Absences 2,467 Defeasance of Bonds (Note 15) 50,210 Decreases in Above Schedule $ 67,721 ' a. Civic Improv(!ment Corporation: ' (1). Huntington Beach Civic Improvement Corporation Refunding Certificates of Participation (Civic Center Project): ' Year of Issuance 1993 Type of Debt Refunding Certificates of t Participation -Original Principal Amount $21,895,000 -Security Lease on Civic Buildings ' Interest Rates 2.75% to 5.8% Interest Payment Dates February 1 St and August 1 s -Principal Payment Dates August 1 s ' Purpose of Debt Refinance 1986 Civic Improvement Corporation Certificates of Participation , These certificates were defeased during the year (see note 14). 1 53 t City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 ' 11. LONG-TERM OBLIGATIONS (CONTINUED): ' a. Civic Improvement Corporation: (2) Huntington Beach Civic Improvement Corporation Refunding Certificates of ' Participation (Police Administration Project): Year of Issuance 1993 Type of Debt Refunding Certificates of Participation Original Principal Amount $16,350,000 Security Lease on Civic Buildings Interest Rates 4.0% to 5.7% Interest Payment Dates February 15 and August 1s ' Principal Payment Dates August 1s' Purpose of Debt Refinance 1989 Civic Improvement Corporation Certificates of Participation ' These certificates were defeased during the year (see note 14). b. Public Financing Authority (1.) 1992 Huntington Beach 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 February 1 S and Au ust 1, ' Principal Payment Dates August 1s' Purpose of Debt Provide funds for Waterfront Development and Remove ' Restrictive Covenants on 1988 Revenue Bonds ' These certificates were defeased during the year (see note 14). 54 1 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): ' b. Public Financing Authority ' (2.) 1997 Public Financing Authority Revenue Bonds: Year of Issuance 1997 ' -Type of Debt Lease Revenue Bonds -Original Principal Amount $8,070,000 , Security Lease Agreement with City for Central Library Interest Rates 5.00% to 5.50% ' Interest Payment Dates June 1 51hand 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 2003 $ 555 $ 303 $ 858 ' 2004 575 278 853 2005 610 245 855 2006 640 214 854 , 2007 665 171 836 2008-2012 450 769 1,219 2013-2017 580 631 1,211 ' 2018-2022 760 449 1,209 2023-2027 1,000 207 1,207 2028 235 7 242 ' Total $ 6,070 $ 3,274 $ 9,344 1 55 1 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): ' b. Public Financing Authority (3.) 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 1st Principal Payment Dates September 15 ' Purpose of Debt Capital improvements and defeasance of Emerald Cove Certificates of Participation (see ' note 14 Debt service requirements to maturity are (in thousands): Year Ending September 30 Principal Interest Total 2003 $ 565 $ 875 $ 1,440 2004 590 852 1,442 ' 2005 615 827 1,442 2006 640 801 1,441 2007 670 773 1,443 2008-2012 3,190 3,404 6,594 2013-2017 2,960 2,708 5,668 2018-2022 3,450 1,816 5,266 ' 2023-2027 2,650 993 3,643 2028-2030 1,965 218 2,183 Total $ 17,295 $ 13,267 $ 30,562 1 56 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): ' b. Public Financing Authority ' (4). 2001(a) 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 1st and Se tember 15 -Principal Payment Dates September 1st Purpose of Debt Construct Sports Complex and , South Beach Phase II Improvements Debt service ri quirements to maturity are (in thousands): Year Ending September 30, Principal Interest Total , 2003 $ 560 $ 1,423 $ 1,983 2004 585 1,401 1,986 2005 605 1,378 1,983 , 2006 630 1,354 1,984 2007 650 1,333 1,983 2008-2012 3,635 6,297 9,932 ' 2013-2017 4,445 5,483 9,928 2018-2022 5,565 4,360 9,925 2023-2027 7,070 2,854 9,924 ' 2028-2031 7,035 902 7,937 Total $30,780 $ 26,785 $ 57,565 57 1 ' City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 ' 11. LONG-TERM OBLIGATIONS (CONTINUED): b. Public Financing Authority (5). 2001(b) Public Financing Authority Lease Revenue Bonds: Year of Issuance 2001 Type of Debt Lease Revenue Bonds ' Origin I Principal Amount $31,095,000 Security Lease on Civic Center Buildings Interest Rates 4.0% to 5.0% ' Interest Payment Dates August 1, February 1 Principal Payment Dates August 1 ' Purpose of Debt Defease Civic Improvement Corporation Certificates ' Year Ending September 30, Principal Interest Total 2003 $ 1,475 $ 1,143 $ 2,618 2004 1,535 1,084 2,619 2005 1,595 1,023 2,618 2006 1,640 975 2,615 ' 2007 1,690 926 2,616 2008-2012 9,410 3,681 13,091 2013-2017 9,905 1,649 11,554 ' 2018-2019 2,025 148 2,173 Total $ 29,275 $ 10,627 $ 39,902 ' c. Redevelopment Agency: t (1.) 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 1 S and August 1st Principal Payment Dates August 15 ' Purpose of Debt Prepay Agency's 1992 Loans to Public Financing Authority 58 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): , c. Redevelopment Agency: ' (1.) 1999 Redevelopment Agency Tax Allocation Refunding Bonds. Debt service requirements to maturity are in thousands): ' 4 Y ( ) Year Ending ' September 30 Principal Interest Total 2003 $ 310 $ 303 $ 613 ' 2004 320 278 598 2005 335 245 580 2006 350 214 564 ' 2007 365 171 536 2008-2012 2,060 769 2,829 2013-2017 2,575 631 3,206 , 2018-2023 2,795 512 3,307 2024 360 53 413 Total $ 9,470 $ 3,176 $ 12,646 ' (2.) 2002 Redevelopment Agency Tax Allocation Refunding Bonds: Year of Issuance 2002 ' -Type of Debt Tax Allocation Refunding Bonds Original Principal Amount $20,900,000 ' Security Tax Increment Interest Rates 2.00% to 5.00% Interest Payment Dates February 1 st and August 1 s ' -Principal Payment Dates August 1s' Purpose of Debt Prepay Agency's 1992 Loans to Public Financing Authority and ' fully defease 1992 Public Financing Authority bonds 59 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' 11. LONG-TERM OBLIGATIONS (CONTINUED): c. Redevelopment Agency: (2.) 2002 Redevelopment Agency Tax Allocation Refunding Bonds: ' Debt service requirements to maturity are (in thousands): ' Year Ending September 30, Principal Interest Total 2003 $ 685 $ 928 $ 1,613 ' 2004 750 860 1,610 2005 765 841 1,606 2006 790 822 1,612 ' 2007 815 798 1,613 2008-2012 4,565 3,542 8,107 2013-2017 5,650 2,540 8,190 ' 2018-2022 5,180 1,134 6,314 2023-2024 1,700 124 1,824 Total $ 20,900 $ 11,589 $ 32,489 (3). 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, 2002, the Agency obligation under the agreement amounted to ' $11,280,000. The beginning balance of this obligation was $4,756,000. During the year an additional $6,524,000 was advanced. Project-generated revenues as available will repay these amounts over the time needed to fully amortize the advance. 1 1 60 City of Huntington Beach Notes to Financial Statements , For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): ' c. Redevelopment Agency: ' (4.) 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" and August 1s' -Principal Payment Dates August 1" -Purpose of Debt Capital Improvements ' Debt service requirements to maturity are (in thousands): Year Ending Septembcr 30 Principal Interest Total ' 2003 $ 260 $ 600 $ 860 2004 280 581 861 2005 300 561 861 ' 2006 315 540 855 2007 340 518 858 2008-2012 2,085 2,180 4,265 2013-2017 2,870 1,276 4,146 ' 2018-2019 1,440 173 1,613 Total $ 7,890 $ 6,429 $ 14,319 ' (5). Notes Payable: Year of Issuance 1988 ' -Type of Debt First Trust Deed Mortgage -Original Principal Amount $881,000 ' Security Real Property Interest Rates Variable Interest Payment Dates Monthly ' -Principal Payment Dates Monthly -Purpose of Debt Purchase or Property The principal ($293,000) and interest ($42,000) are due during 2002-2003. ' 61 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' 11. LONG-TERM OBLIGATIONS (CONTINUED): ' d. Other Long-Term Obligations: (1). Reservoir Hill Assessment Bonds: ' Year of Issuance 1989 Type of Debt 1915 Improvement Act Bonds ' Original Principal Amount $1,653,905 Security Property tax assessments Interest Rates 6.00% to 8.15% ' Interest Payment Dates March 2" and September 1S Principal Payment Dates September 2" Purpose of Debt Capital Improvements 1 Debt service requirements to maturity are (in thousands): Year Ending ' September 30 Principal Interest Total 2003 $ 55 $ 65 $ 155 ' 2004 55 58 153 2005 65 51 156 2006 70 42 157 2007 170 33 158 Total $ 415 $ 249 $ 779 (2.) Energy Financing 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 nd and June 22" Principal Payment Dates December 22 nd and June 22" ' Purpose of Debt Capital Improvements 62 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): ' d. Other Long-Term Obligations: ' (2.) Energy Financing Loan: Debt service requirements to maturity are (in thousands): ' Year Ending ' September 30, Principal Interest Total 2003 $197 $42 $239 2004 209 30 239 2005 221 18 239 ' 2006 115 10 125 Total $742 $100 $ 842 (3). Leases Payable: ' The City entered into capital leases for various items: ' Year of Issuance 1993 throri h 2002 -Type of Debt Capital Leases ' -Original Principal Amount Various ($93,000 to $1,200,000) -Security Lease Agreement Interest Rates 5.0% to 6.9% ' Interest Payment Dates Monthly, Quarterly, Semi- Annually Principal Payment Dates Monthly, Quarterly, Semi- t Annuall -Purpose of Debt Equipment Financing ' Future minimum lease payments to maturity are (in thousands): Year Ending ' September 30, Amount 2003 $1,440 ' 2004 1,247 2005 1,069 2006 562 ' 2007 132 Total minimum lease payments 4,450 ' Less interest (343) Total $4,107 63 1 1 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' 11. LONG-TERM OBLIGATIONS (CONTINUED): d. Other Long-Term Obligations: (4) Compensated Absences: ' There is no repayment schedule to pay the compensated absences amount of$8,950,000 relating to governmental operations. (5). Claims Payable: ' There is no repayment schedule for the claims payable of$12,613,000 described in note 9. The City pays the claims upon final settlement. ' (6) Net Pension Obligation: There is no fixed repayment schedule to fund the unfunded net pension obligation totaling ' $8,593,000 for the City's Retirement Supplement Plan 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. e. Long-Term Obligations — Business Activities: Principal October 1, September Accrued Due Within Long-Term Obligations-Business Activities: 2001 Additions Retirements 30,2002 Interest One Year Compensated Absences 11(e)(1) $ 472 $ 34 $ (15) $ 491 $ - $ 236 ' Leases Payable 11(e)2 432 345 (182) 595 - 230 Total Long-Term Obligations-Business Activities $ 904 $ 379 $ (197) $ 1,086 $ - $ 466 (1.) Compensated Absences: ' There is no repayment schedule for the compensated absences amount of $540,000 relating to business activities. 1 64 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): , e. Long-Term Obligations — Business Activities: ' (2.) Leases Payable: The City entered into capital leases for various items: ' Year of Issuance 1993 through 2002 Type of Debt Capital Leases -Original Principal Amount Various -Security Lease Agreement ' Interest Rates 5.0% to 6.9% Interest Payment Dates Monthly, Quarterly, Semi- Annually ' Principal Payment Dates Monthly, Quarterly, Semi- Annually -Purpose of Debt Equipment Financing ' Future minimum lease payments to maturity are (in thousands): Year Ending September 30, Amount 2003 $246 ' 2004 203 2005 77 2006 77 ' 2007 39 Total minimum lease payments 642 ' Less interest (48) Total $594 ' 65 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' 11. LONG-TERM BLI OBLIGATIONS (CONTINUED): O G ( ) 11(fl. Long-Term Obligations Not Recorded in Financial Statements: Obligations Not Recorded in Financial Statements: October 1, September Community Facilities Districts: 2001 Additions Retirements 30,2002 ' Community Facilities District 1990-1 Special Assessment Tax Bonds 11(f)(1) $ 2,100 $ $ (2,100) $ Community Facilities District No. 1990-1 ' Special Tax Refunding Bonds 11(f)(2) - 2,155 - 2,155 Community Facilities District 2000-1 Special Assessment Tax Bonds 11(f)(3) 16,000 16,000 Community Facilities District NO.2002-1 - 4,900 ' Special Assessment Tax Bonds 11(1)(4) 4,900 Total Community Facilities Districts 2,100 23,055 (2,100) 23,055 No-Commitment Debt 11(f)(5) 51,695 - - 51,695 ' Defeased Debt Outstanding 11(f)(6) _ 13,580 - (13,580) - Total Obligations Not Recorded in Financial Statements $ 67,375 $ 23,055 $ (16,680) $ 74,750 ' (1.) Community Facilities District 1990191 Special Assessment Tax Bonds: 1 Year of Issuance 1990 Type of Debt Community Facilities District Assessment Bonds Original Principal Amount $2,400,000 Security Special Tax Levies ' Interest Rates 6.35% to 7.60% Interest Payment Dates Aril 1S and October 1S ' Principal Payment Dates October 15 Purpose of Debt Public Improvements and Police and Fire services These bonds were defeased during the year. 66 1 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): ' 11(f). Long-Term Obligations Not Recorded in Financial Statements: , (2). Community Facilities District 1990-1 2001 Special Tax Refunding Bonds: Year of Issuance 2001 ' Type of Debt Community Facilities District Assessment Bonds ' Original Principal Amount $2,155,000 Security Special Tax Levies Interest Rates 4.00% to 5.40% ' Interest Payment Dates Aril 1st and October 1st Principal Payment Dates October 1 st 1 Debt service requirements to maturity are (in thousands): Year Ending ' September 30, Principal Interest Total ' 2003 $ 85 $ 93 $ 178 2004 75 103 178 2005 80 100 180 2006 85 96 181 t 2007 85 93 178 2008-2012 490 407 897 2013-2017 625 274 899 ' 2018-2022 630 87 717 Total $ 2,155 $ 1,253 $ 3,408 (3) Community Facilities District 2000-2001 Special Tax Bonds: Year of Issuance 2001 ' Type of Debt Community Facilities District Assessment Bonds , -Original Principal Amount $16,000,000 Security Special Tax Levies Interest Rates 3.80% to 6.40% ' Interest Payment Dates September 1S and March 1S -Principal Payment Dates September 1st Purpose of Debt Public Improvements for Grand ' Coast Resort 67 City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 ' 11. LONG-TERM OBLIGATIONS (CONTINUED): ' 11(0. Long-Term Obligations Not Recorded in Financial Statements: (3) Community Facilities District 2000-2001 Special Tax Bonds: ' Debt service requirements to maturity are in thousands): q Y � ) ' Year Ending September 30, Principal Interest Total ' 2003 $ - $ 988 $ 988 2004 245 988 1,233 2005 255 979 1,234 ' 2006 265 968 1,233 2007 280 956 1,236 2008-2012 1,625 4,554 6,179 2013-2017 2,155 4,026 6,181 2018-2022 2,930 3,248 6,178 2023-2027 4,010 2,174 6,184 ' 2028-2031 4,235 704 4,939 Total $ 16,000 $ 19,585 $ 35,585 ' (4.) Community Facilities District Boeing: Year of Issuance 2002 ' Type of Debt Community Facilities District Assessment Bonds Original Principal Amount $4,900,000 Security Special Tax Levies Interest Rates 3.80% to 6.20% Interest Payment Dates I March 1 S and September 1 S ' Principal Payment Dates September 1st 68 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 11. LONG-TERM OBLIGATIONS (CONTINUED): ' 11(f). Long-Term Obligations Not Recorded in Financial Statements: ' (4.) Community Facilities District Boeing: Debt service requirements to maturity are (in thousands): ' Year Ending September ' 30, Principal Interest Total 2003 $ - $ 339 $ 339 2004 - 303 303 , 2005 5 303 308 2006 10 303 313 2007 15 302 317 ' 2008-2012 190 1,490 1,680 2013-2017 445 1,415 1,860 2018-2022 815 1,246 2,061 ' 2023-2027 1,335 933 2,268 2028-2032 2,085 421 2,506 Total $ 4,900 $ 7,055 $ 11,955 ' (5.) 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. These bond issues are (in thousands): ' Outstanding September 30, Original Issue ' Bond Issue 2002 Amount Five Points Senior Project Multi-Family Housing $ 9,500 $ 9,500 Revenue Bonds— Series A— 1991 ' Seabridge Villas Project Multi-Family Housing Revenue 25,000 25,000 Bonds — Series A— 1985 Huntington Village Senior Apartments 1997 - Revenue 4,895 4,895 , Bonds Huntington Breakers Mortgage Revenue Bonds 16,000 16,000 ' Refunding Issue — 1996 Series A 69 ' City of Huntington Beach Notes to Financial Statements For the Year Ended September 30, 2002 12. CAPITAL ASSETS: ' a. Changes in Capital Assets: ' Capital asset activity for the year was (in thousands): ' Balance, Beginning of Balance, End of Governmental Activities: Year(Restated) Additions Dispositions Year Land $ 313,142 $ 4,273 $ (24) $ 317,391 Buildings 76,297 11,325 (1,153) 86,469 Machinery & Equipment 45,398 15,736 (10,617) 50,517 Construction in Progress 8,509 21,302 (7,609) 22,202 ' Infrastructure 268,397 5,682 - 274,079 Subtotal 711,743 58,318 (19,403) 750,658 Less Accumulated Depreciation (173,375) (12,576) 310 (185,641) Capital Assets of Governmental Activities - Net $ 538,368 $ 45,742 $ (19,093) $ 565,017 t Balance, Beginning of Balance, End of Business Activities: Year(Restated) . Additions Dispositions Year Land $ 8,598 $ - $ - $ 8,598 ' Buildings 16,478 14,516 (112) 30,882 Machinery and Equipment 5,983 2,376 (1,151) 7,208 Construction in Progress 5,593 4,140 (1,888) 7,845 ' Infrastructure 48,372 35,339 - 83,711 Total Cost 85,024 56,371 (3,151) 138,244 ' Less Accumulated - Depreciation (38,681) (19,187) (57,868) Capital Assets of Business ' Activities - Net $ 46,343 $ 37,184 $ (3,151) $ 80,376 Of the total additions of ($19,187,000) to the accumulated depreciation amount for ' business activities, ($3,005,000) represented current year depreciation expense and ($16,182,000) represented beginning accumulated depreciation on the capital assets of Sewer Enterprise Fund which began operations at the beginning of the year. 70 City of Huntington Beach Notes to Financial Statements , For the Year Ended September 30, 2002 12. CAPITAL ASSETS (CONTINUED): 1 1 b. Depreciation Expense: Depreciation in governmental activities was charged to the following functions/programs ' in the Statement of Activities (in thousands) Administrative Services $ 10 Building 39 ' City Attorney 4 City Administration 62 City Clerk 4 , City Treasurer 19 Community Services 1,102 Economic Development 7 ' Fire 675 Information Systems 944 Library Services 360 ' Non-Departmental 245 Planning 11 Police 2,719 ' Public Works 6,375 TOTAL $ 12,576 Depreciation in business activities was charged to the following functions/programs in the ' Statement of Activities (in thousands): DEPRECIATION EXPENSE FOR BUSINESS ACTIVITIES: Water Fund $ 2,096 ' Emerald Cove Housing 82 Emergency Fire Medical 97 Refuse Collection - ' Sewer Service 711 Hazmat Service 4 ' Cultural Affairs 4 Ocean View Estates 11 Total $ 3,005 ' 71 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' 12. CAPITAL ASSETS (CONTINUED): ' c. Capital Assets Acquired via Capital Leases: ' At year-end the City's assets acquired through outstanding capital leases (see note 11) were (in thousands): ' Governmental Activities Business Activities Machinery and Equipment $4,472 $824 Less Accumulated Depreciation 1,007 48 Net Book Value 3,465 776 ' 13.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. Huntington Beach Union High School District HBUHSD Sharing Agreement: 9 9 (HBUHSD) 9 9 ' In 1997 the City Council agreed to pay the HBUHSD certain increased sales tax revenues relating to the development of a new commercial site by Home Depot. The City will retain ' the first$50,000 of annual increased sales tax revenues and will pay HBUHSD a portion of the amount over $50,000 until the year 2015/2016. ' c. 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 $2,330,000. 72 City of Huntington Beach Notes to Financial Statements , For the Year Ended September 30, 2002 13.COMMITMENTS AND CONTINGENCIES (CONTINUED): ' c. Property Tax Lawsuits: , 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. d. 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$7.9 million pursuant ' to a Third Implementation Agreement approved on October 21, 2002. 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. ' On January 2, 2002 the Redevelopment Agency entered into an Owner Participation Agreement with Fountains Huntington Beach, LLC, to provide$2 million to meet the cost ' of providing and maintaining 80 affordable housing units for a period of 60 years. At year- end no liability had been incurred. The expectation is that the amount will be disbursed in fiscal year 2002-2003 ' 73 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 14. OTHER INFORMATION: ' a. Expenditures Exceeding Appropriations: Expenditures exceeded appropriations at the departmental level in the funds shown (in thousands): ' General Fund: Current: City Treasurer $ (66) ' Debt Service: Principal (1,071) Public Financing Authority Debt Service Fund: ' Current: Non-Departmental (356) Non-Major Governmental Funds Drainage Current: Non-Departmental (3) Public Communications Current: City Administrator (31) Debt Service: ' Principal (48) Interest (6) Grants ' Current: Planning (42) Community Services (7) Library Services (11) Reservoir Hill Assessment District Current: City Council (2) 1 1 74 City of Huntington Beach Notes to Financial Statements , For the Year Ended September 30, 2002 14. OTHER INFORMATION (CONTINUED): ' b. Fund and Accumulated Deficits: ' The following funds had total fund deficits at year-end (in thousands): Governmental Funds: ' Redevelopment Agency Debt Service Fund $ (33,549) Non-Major Governmental Funds: ' Sewer Development (42) Narcotics Forfeiture (119) Pier Plaza (755) ' Non-Major Enterprise Funds: Refuse Collection (365) Internal Service Funds: Medical Insurance (1,211) ' Workers' Compensation (6,959) The deficits in funds other than the Redevelopment Agency Debt Service Fund will be ' eliminated through monitoring of expenditures and increasing charges to other funds. The Redevelopment Agency Debt Service Fund normally operates at a deficit since the ' Redevelopment Agency incurs debt to finance operations and capital improvements. By California law, this is how Redevelopment Agencies operate. This deficit primarily caused the negative unrestricted net assets for governmental operations in the Statement of Net ' Assets of$10,475,000. c. Restatement of Beginning Fund Balances and Net Assets: ' The City changed the method of recording certain transactions at October 1, 2001. For fiscal year 2001-2002, the Equipment Replacement and Liability Reserve activity will be ' reported as part of the General Fund. Below is a restatement of the beginning fund balances due to the changes (in thousands): ' 75 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' 14. OTHER INFORMATION (CONTINUED): c. Restatement of Beginning Fund Balances and Net Assets: ' Capital Assets Used in the Liability Equipment Redevelopment Non-Major Operation of Fund Financial General Reserve Replacement Agency Debt Govenmental Governmental ' Statements: Fund Fund Fund Service Fund Funds Funds Fund Equity(Beginning Balance)-October 1, ' 2001 $ 35,418 $ 1,342 $ 26,871 $ 3,511 $ 38,945 $ 146,785 a.)Changes in Recording of Internal Service Funds 15,122 (1,342) (26,871) - - 48,749 ' b.)GASB 33 Revenue - Accruals 985 638 c.)Revenues Improperly Accrued in Prior Year 2,581 - - - - d.)Changes in Recording of Redevelopment Agency Advances (1,596) - - (57,527) - - ' e.)Restatements to - Include Infrastructure - 342,834 Total Restatements 17,092 (1,342) (26,871) (67,527) 638 391,583 tFund Equity(Beginning Balance)as Restated $ 52,510 $ - $ - $ (64,016) $ 39,583 $ 538,368 ' a) The Equipment Replacement and Liability Insurance Reserve Fund were recorded as Internal Service Funds in prior years and now are recorded as part of the General Fund. ' b) The.City recorded additional revenue relating to GASB 33 that had not been accrued in prior years. Amounts recorded in error in prior years. ' c) Changes in reporting long-term advances from the City to the Redevelopment Agency from GASB 34 d) Restatements to include net book value of infrastructure . ' Below is a calculation of how the beginning amount for Net Assets in the Government- Wide Financial Statements was computed (in thousands): 1 Total Governmental Fund Balance-October 1, 2001 (Restated) $ 111,476 Capital Assets 518,965 ' Long-Term Debt (157,190) Accrued Interest (1,222) Other (5,227) Net Assets -Governmental Activities -October 1, 2001 $ 466,802 76 City of Huntington Beach Notes to Financial Statements ' For the Year Ended September 30, 2002 14. OTHER INFORMATION (CONTINUED): ' d. Bond Defeasance - Civic Improvement Corporation Refunding Certificates of ' Participation - 1993: 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) by the issuance of $31,095,000 of Public Financing Authority 2001-b Lease Revenue Bonds (see note 12(b)(5)). 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 of Participation 2,835 ' 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 1 1 77 City of Huntington Beach ' Notes to Financial Statements For the Year Ended September 30, 2002 ' 14. OTHER INFORMATION (CONTINUED): ' e. Bond Defeasance — Public Financing Authority 1992 Revenue Bonds: In July, 2002, the City defeased the Huntington Beach Public Financing Authority 1992 Revenue Bonds by issuing $20,900,000 of Redevelopment Agency 2002 Tax Allocation Bonds (see note 12(c)(2)). Below is a schedule of the required information for this defeasance (in thousands): ' Sources: Principal Amount of Bonds $20,900 ' Premium on Bonds 124 Cash Available from Existing Public Financing Authority Bonds 2,716 Total Sources $23,740 ' Uses: Deposit to Refunding Escrow $21,602 ' Deposit to Debt Service Reserve 1,649 Costs of Issuance 420 Underwriter Disco ant 69 ' Total Uses $23,740 ' The net present value benefit due to this refunding was $3,699,571 and the effective interest rate on the new borrowing was 4.58%. The total decrease in cash flows related to this refunding was $6,719,000. 1 78 � Required Supplementary Information 1 1 City of Huntington Beach ' Required Supplementary Information September 30, 2002 Budgetary Information ' The City Council must annually adopt a budget by September 30 of the prior fiscal year. The budgeted expenditures become the appropriations to the various departments.The budget includes estimates for revenue that, along with the appropriations, compute the budgetary fund balance. The appropriated budget covers substantially all governmental fund expenditures with the exception of , capital improvement projects (capital projects funds) carried forward from prior years, which constitute a legally authorized non-appropriated budget. The City Council may amend the budget at any time. The City Administrator may transfer funds from between object purposes (personal ' services, operating expenditures or capital outlay expenditures)within the same department without changing the total departmental budget. Department heads may transfer funds from like object categories of the same department. The City Council must approve any changes to departmental ' budgets. Expenditures may not exceed appropriations at the departmental level. All unused appropriations lapse at year-end. During the year the City Council made several supplemental appropriations with included carryovers of prior year encumbrances all of which were within available , fund balance and estimated revenue amounts. The City Council adopts governmental fund budgets consistent with generally accepted principles as legally required. There are no significant non-budgeted financial activities. Revenues for special revenue funds are budgeted by entitlements, grants and estimates of future development and economic growth. Expenditures and transfers are budgeted based upon available financial resources. ' On or before May 31 of each year, each department submits data to the City Administrator for budget preparation. Staff prepares the budget by fund, function and activity. The budget includes information ' on past years, current year estimates and requested appropriations for the next fiscal year. Before August 1, the City Council receives the proposed budget. The City Council holds public hearings and may amend the budget by a majority vote. Changes to the budget must be within the available ' revenues and reserves. These financial statements show budgetary data for the General, Special Revenue, Capital Projects ' and Debt Service Funds. The original budget, revised budget, actual expenditures, and variance amounts are shown. ' The City uses an encumbrance system as an aid in controlling expenditures.When the City issues a purchase order for goods or services, it records an encumbrance until the vendor delivers the goods or performs the service. At year-end, the City reports all outstanding encumbrances as reservations ' of fund balance in governmental fund types. The City reappropriates these encumbrances into the new fiscal year. ' Below is a schedule of a budget to actual comparison of the General Fund's Revenues, and Expenditures: ' 79 ' CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES,EXPENDITURES AND ' CHANGES IN FUND BALANCES- BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2002 (in Thousands) ' General Fund Original REVENUES: Budget Final Budget Actual Variance t Properly Taxes $28,578 $28,578 $26,796 $ (1,782) Other Taxes 57,676 57,676 51,808 (5,868) Licenses and Permits 6,650 6,650 6,397 (253) Fines,Forfeitures and Penalties 3,765 3,765 3,797 32 From Use of Money and Property 7,821 7,821 8,576 755 ' From Other Agencies 12,026 12,026 13,180 1,154 Charges for Current Service 11,853 11,853 10,107 (1,746) Other 885 885 794 (91) TOTAL REVENUES 129,254 129,254 121,455 (7,799) EXPENDITURES: Current: City Council 260 261 237 24 City Administrator 2,189 2,228 1,717 511 City Treasurer 1,047 1,042 1,108 (66) City Attorney 1,912 3,499 3,363 136 City Clerk 603 743 676 67 Administrative Services 8,383 7,860 7,095 765 ' Planning 2,942 3,573 2,400 1,173 Building 2,733 2,806 2,591 215 Fire 19,033 18,900 17,858 1,042 Information Systems 3,670 3,758 2,720 1,038 Police 40,536 39,746 37,229 2,517 Economic Development 958 980 706 274 Community Services 9,765 10,267 9,944 323 Library Services 3,647 3,689 3,485 204 Public Works 19,413 20,060 17,727 2,333 Non-Departmental 14,352 12,194 9,676 2,518 Capital Outlay 7,360 12,979 10,602 2,377 Debt Service: - Principal - - 1,071 (1,071) Interest 860 860 121 739 TOTAL EXPENDITURES 139,663 145,445 130,326 15,119 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (10,409) (16,191) (8,871) 7,320 ' OTHER FINANCING SOURCES(USES): Transfers In 7,412 7,412 5,017 (2,395) Proceeds of Long-Term Debt 3,219 3,219 Transfers Out (8,609) (10,857) (9,145) 1,712 TOTAL OTHER FINANCING SOURCES(USES) (1,197) (3,445) (909) 2,536 ' EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)EXPENDITURES AND OTHER USES (11,606) (19,636) (9,780) 9,856 FUND BALANCE-BEGINNING OF YEAR 35,418 35,418 35,418 35,418 Prior Period Adjustment 16,107 16,107 16,107 FUND BALANCE AS RESTATED 51,525 51,525 51,525 35,418 FUND BALANCE-END OF YEAR $ 39,919 $ 31,889 $ 41,745 $ 9,856 1 t ea CITY OF HUNTINGTON BEACH ' SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES ' BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2002 (In Thousands) Public Financing Authority Debt Service Fund ' Original REVENUES: Budget Final Budget Actual Variance From Use of Money and Property $ 539 $ 539 $ 609 $ 70 ' EXPENDITURES: Current: Non-Departmental - 156 512 (356) Debt Service: ' Principal 1,205 21,923 21,923 - interest 2,702 5,345 4,188 1,157 TOTAL EXPENDITURES 3,907 27,424 26,623 801 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (3,907) (26,885) (26,014) 871 OTHER FINANCING SOURCES(USES): Transfers In 9,613 11,632 2,019 Proceeds of Long-Term Debt 31,095 31,095 - issuance Discount (156) (156) - ' Payments to Escrow - (31,071) (31,071) - Transfers Out - (2,771) (2,771) - TOTAL OTHER FINANCING SOURCES(USES) _ - 6,710 8,729 2,019 , EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)EXPENDITURES AND OTHER USES (3,907) (20,175) (17,285) 2,890 FUND BALANCE-BEGINNING OF YEAR 24,851 24,851 24,851 - FUND BALANCE-END OF YEAR $ 20,944 $ 4,676 $ 7,566 $ 2,890 ' Redevelopment Agency Debt Service Fund Original ' REVENUES: Budget Final Budget Actual Variance Property Taxes $ 6,200 $ 6,200 $ 6,223 $ 23 From Use of Money and Property 260 18,852 18,774 (78) TOTAL REVENUES 6,460 25,052 24,997 (55) ' EXPENDITURES: Current: Non-Departmental 931 1,168 648 520 Debt Service: ' Principal 1,567 352 352 - Interest 2,953 2,794 2,712 82 TOTAL EXPENDITURES 5,451 4,314 3,712 602 EXCESS OF REVENUES OVER(UNDER) ' EXPENDITURES 1,009 20,738 21,285 547 OTHER FINANCING SOURCES(USES): Transfers In - 2,715 2,715 - Proceeds of Long-Term Debt - 20,900 20,900 - ' Premium(Discount)on Issuance of Long-Term Debt - (68) (68) - Payments to Escrow - (21,602) (21,602) - Transfers Out (2,717) (2,761) (44) TOTAL OTHER FINANCING SOURCES(USES) (772) (816) (44) EXCESS OF REVENUES AND OTHER SOURCES , OVER EXPENDITURES AND OTHER USES 1,009 19,966 20,469 503 FUND BALANCE-BEGINNING OF YEAR 3,511 3,511 3,511 - Prior Period Adjustments - (57,527) (57,527) FUND BALANCE AS RESTATED 3,511 (54,016) (54,016) FUND BALANCE-END OF YEAR $ 4,520 $ (34,050) $ (33,547) $ 503 r 81 � CITY OF HUNTINGTON BEACH ' SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL ' FOR THE YEAR ENDED SEPTEMBER 30,2002 (In Thousands) Redevelopment Agency Capital Projects ' Original REVENUES: Budget Final Budget Actual Variance Other Taxes $ 822 $ 822 $ 705 $ (117) From Use of Money and Property 1,171 1,171 568 (603) Other 77 77 220 143 ' TOTAL REVENUES 2,070 2,070 1,493 (577) EXPENDITURES: Current: City Attorney 500 550 207 343 Economic Development 1,315 1,503 1,026 477 Capital Outlay 624 7,424 6,578 846 TOTAL EXPENDITURES 2,439 9,477 7,811 1,666 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (369) (7,407) (6,318) 1,089 OTHER FINANCING SOURCES(USES): Transfers In 20 20 (20) Proceeds of Long-Term Debt - 6,524 6,524 - Transfers Out (10) (10) (10) ' TOTAL OTHER FINANCING SOURCES(USES) 10 6,534 6,514 (20) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER)EXPENDITURES AND OTHER USES (359) (873) 196 1,069 FUND BALANCE-BEGINNING OF YEAR 1,409 14,019 14,019 - FUND BALANCE-END OF YEAR $ 1,050 $ 13,146 $ 14,215 $ 1,069 Capital Improvement ' Original REVENUES: Budget Final Budget Actual Variance From Use of Money and Property 150 $ 150 $ 70 $ (80) From Other Agencies 2,523 2,523 2,523 TOTAL REVENUES _2,673 2,673 2,599 (74) EXPENDITURES: Current: Planning 202 202 - 202 Building 1,343 1,325 400 925 ' Information Systems 3,069 3,120 780 2,340 Community Services 72 72 67 5 Public Works 598 3,224 1,596 1,628 Non-Departmental 571 3,094 2,548 546 ' Capital Outlay 6,662 32,354 20,881 11,473 Debt Service: Principal 185 185 185 - Interest 55 55 55 - ' TOTAL EXPENDITURES 1.2,757 43,631 26,512 17,119 EXCESS OF REVENUES OVER(UNDER) EXPENDITURES (10,084) (40,958) (23,913) 17,045 OTHER FINANCING SOURCES(USES): ' Transfers In 3,102 19,226 19,226 Transfers Out (894) (894) TOTAL OTHER FINANCING SOURCES(USES) 3,102 18,332 18,332 EXCESS OF REVENUES AND OTHER SOURCES ' OVER(UNDER)EXPENDITURES AND OTHER USES (6,982) (22,626) (5,581) 17,045 FUND BALANCE-BEGINNING OF-YEAR 6,813 6,813 6,813 FUND BALANCE-END OF YEAR $ (10,084) $ (34,145) $ 1,232 $ 17,045 t ' 82 CITY OF HUNTINGTON BEACH , SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES ' BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2002 (In Thousands) Public Financing Authority Capital Projects Fund ' Original REVENUES: Budget Final Budget Actual Variance ' From Use of Money and Property $ - $ - $ 1,493 $ 1,493 OTHER FINANCING SOURCES(USES): Transfers In - 11 11 - Transfers Out (13,476) (13,476) - , TOTAL OTHER FINANCING SOURCES(USES) - (13,465) (13,465) - FUND BALANCE-BEGINNING OF YEAR 28,701 28,701 28,701 - FUND BALANCE-END OF YEAR $ 28,701 $ 15,236 $ 16,729 $ 1,493 1 83 ' ' CITY OF HUNTINGTON BEACH REQUIRED SUPPLEMENTARY INFORMATION FOR THE YEAR ENDED SEPTEMBER 30, 2002 ' SCHEDULE OF FUNDING PROGRESS RETIREMENT PLAN- NORMAL Entry Age Excess ' Normal Assets as a Actuarial Actuarial Percentage of Actuarial Valuation Accrued Value of Funded Covered Covered Date Liability(AAL) Assets Excess Assets Ratio Payroll Payroll 1999 Safety $217,230 $257,921 $40,691 118.7% $22,502 180.8 % Non Safety 147,194 210,071 62,877 142.7% 30,622 205.3 % Total $364,424 $467,992 $103,698 128.4% $53,124 195.0% 2000 Safety $258,857 $291,309 $32,452 112.5% $23,270 139.5 % Non Safety 163,688 230,236 66,548 140.7% 34,683 191.9 % Total $422,545 $521,645 $99,000 123.4% $57,953 170.8 % ' 2001 ' Safety $283,438 $295,280 $11,842 104.2% $27,717 42.7% Non Safety 177,467 237,108 59,641 133.6% 35,985 165.7 % Total $460,905 $532,388 $71,483 115.5% $63,702 112.2% ' SCHEDULE OF FUNDING PROGRESS RETIREMENT PLAN-SUPPLEMENTAL Entry Age Actuarial UAAL as a% Actuarial Valuation Normal Accrued Value of Unfunded AAL Funded Covered of Covered Date Liability Assets (UAAL) Ratio Payroll Payroll 6/30/94 Actual $ 14,673 $ 52 $ 14,725 0.4% $ 53,593 -27.5% 6/30/95 Update 15,776 290 16,066 1.8% 51,779 -31.0% 6/30/96 Actual 16,071 120 16,191 0.7% 54,368 -29.8% 6/30/1997 Actual 25,342 2,334 23,008 -10.1% 49,881 -46.1% 6/30/98 Update 26,493 3,251 23,242 -14.0% 48,585 -47.8% ' 6/30/99 Actual 28,601 4,162 24,439 -17.0% 1 50,723 -48.2% 6/30/2000 Update 28,844 5,077 23,767 -21.4% 57,674 -41.2% 6/30/2001 Actual 36,453 6,678 29,775 -22.4% 63,345 -47.0% 6/30/2002 Update 35,524 8,775 26,749 -32.8% 65,137 ' 84 � Supplementary Information 1 Non-Major Governmental Funds ' 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 Development 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 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. • 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. Debt Service Funds account for the receipts for and payment of general long-term debt. ' • The RE servoir 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. ' Capital Projects Funds account for the acquisition and construction of capital assets other than those financed by proprietary fund types. ' • The Low-Income Housinq Fund accounts for the 20%set-aside of tax increment-revenues required by the California Health and Safety Code. • The Pier Rebuilding Fund accounts for the rebuilding of the City's pier. • The Parkinq 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. 1 CITY OF HUNTINGTON BEACH ' BALANCE SHEET ' NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2002 (in thousands) ' SPECIAL REVENUE FUNDS ' Sewer Public Narcotics ASSETS: Gas Tax Development Drainage Communications Forfeiture Cash and Investments $ 2,334 $ 42 $ $ 160 $ , Taxes Receivable 612 - - Other Receivables 22 26 3 130 Advances to Other Funds 1,280 328 621 - Other Assets TOTAL ASSETS $ 4,248 $ 396 $ 624 $ 290 $ , LIABILITIES AND FUND BALANCES LIABILITIES: Accounts Payable $ 642 $ 236 $ 108 $ 5 $ Accrued Payroll 3 5 31 , Due to Other Funds - - 37 - 119 Deposits Payable - - - - Deferred Revenue 780 197 371 TOTAL LIABILITIES 1,425 438 516 36 119 FUND BALANCES: ' Reserved for: Encumbrances 974 588 - 8 - Advances 500 131 250 Total Reserved Fund Balances 1,474 719 250 8 Unreserved Fund Balances ' Unreserved,Designated for Future Expenditures 875 - - - - Undesignated 474 (761) (142) 246 (119) Total Unreserved Fund Balance 1,349 (7.61) (142) 246 (119) TOTAL FUND BALANCES 2 823 42 108 254 119 TOTAL LIABILITES AND FUND:1ALANCES 4,248 396 624 290 ' 85 ' SPECIAL REVENUE FUNDS Air Traffic Fourth of Library Park Acquisition Total Special Transportation Quality Impact July Services Grants and Development Revenue Funds ' $ 3,836 $ 433 $ 6,885 $ 63 $ 1,137 $ 191 $ 964 $ 16,045 329 941 26 4 29 5 8 6,579 13 6,845 - - - - - - 4,788 7,017 ' 1, 7 1,617 S 4,191 $ 437 $ 6,914 $ 68 $ 1,145 $ 6,770 $ 7,38382 $ 32,465465 ' $ 173 $ 1 $ 16 $ 4 $ 26 $ 550 $ 36 $ 1,797 17 68 5 38 167 156 9 1,617 1,626 3,260 4,789 9,397 190 69 16 4 31 3,857 6,"2 13,143 12 167 12 9 3 2,913 373 5,059 881 12 167 12 9 3 2,913 373 6,940 ' 1,983 201 1,983 55 318 - - 5,415 2,006 4,903 793 567 7,967 3,989 201 6,886 55 1,111 567 13,382 4,001 368 6,898 64 1,114 2,913 9'•0 19,322 ' S 4,191 $ 437 $ 6,914 68 $ 1,145 $ 6,770 7,31 S 32,465 ' 86 CITY OF HUNTINGTON BEACH ' BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS ' SEPTEMBER 30, 2002 (in thousands) ' (continued) DEBT SERVICE FUNDS CAPITAL PROJECTS FUNDS ' Reservoir Hill Civic Total Debt Assessment Improvement Service Low-Income ASSETS: District Corporation Funds Housing Pier Rebuilding ' Cash and Investments $ 41 $ $ 41 $ 4,184 $ 294 Cash and Investments with Fiscal Agent 113 113 - - Taxes Receivable 55 55 - Other Receivables - - 2,749 Advances to Other Funds 2,094 Other Assets ' TOTAL ASSETS $ 209 S $ 209 $ 9,027 $ 294 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts Payable $ - $ $ - $ - $ 4 ' Accrued Payroll - - - 3 - Due to Other Funds - Deposits Payable - - - Deferred Revenue 24 24 2,720 - TOTAL LIABILITIES 24 24 2,723 4 , FUND BALANCES: Reserved for: Encumbrances - 3 - Advances 2,093 Total Reserved Fund Balances 2,096 ' Unreserved Fund Balances Unreserved,Designated for Future Expenditures - 163 - Undesignated 185 185 4.045 290 Total Unreserved Fund Balance 185 185 4,201 290 TOTAL FUND BALANCES 185 185 6,301 290 , TOTAL LIABILITES AND FUND BALANCES $ 209 $ $ 209 $ 9,027 $ 294 87 ' 1 r r ' CAPITAL PROJECTS FUNDS Total o on- Llbrary Capital Major Holly Cultural Projects Governmental r Parkin In-Lieu SeacliN Pier Plaza Facilities I Funds Funds $ 470 $ 1,178 $ - $ 886 $ 7,012 $ 23,098 10 10 123 - - - - - 996 3 6 4 2,762 9,607 ' 2,094 9,111- - - 1,617 $ 473 $ 1,184 $ 10 $ 890 $ 11,878 $ 44,552 $ $ 28 $ 9 $ 41 $ 1,838 3 170 737 737 893 - - 1,626 ' - 2, 1 ,141 765 9 3,501 501 16,668 - 5 8 5,067 ' 2, 2,974 5 2,101 101 8,041041 163 5,578 _ 473 1,184 (755) 876 6,113 14,265 473 1,184 (755) 876 6,276 19,843 _ 473 1,184 (755) 881 8,377 27,884 E 473 $ 1,184 S 10 E 890 E 11,878 $ 44,552 r r r r r .. r r r ' 88 CITY OF HUNTINGTON BEACH ' COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS , FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) Special Revenue Funds , Sewer Public Narcotics REVENUES: Gas Tax Development Drainage Communications Forfeiture Transportation ' Other Taxes $ $ $ $ 500 $ $ 2,069 Licenses and Permits - - From Use of Money and Property 89 5 5 144 From Other Agencies 4,827 25 160 42 Charges for Current Service - 81 229 33 - - Other 26 - 70 ' TOTAL REVENUES 4,942 111 229 538 160 2,325 EXPENDITURES: Current: City Administrator - - 392 - - Planning - ' Fire - Police 21 Economic Development Community Services Library Services - - ' Public Works 446 225 - 672 Non-Departmental - 3 - - capital Outlay 3,529 1,491 742 30 1,946 Debt Service: Principal - 4 6 , Interest - - - 6 TOTAL EXPENDITURES 3,975 1,716 745 476 21 2,618 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 967 (1,605) (616) 62 139 (293) OTHER FINANCING SOURCES(USES): Transfers O ' Transfers Out (2,400) - (34) TOTAL OTHER FINANCING SOURCES(USES) (2,400) (34) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (1,4331 (1.606) (6161 26 139 (2931 FUND BALANCE-BEGINNINr I OF YEAR 3,946 1,563 624 226 (258) 3,966 Prior Period Adjustments 310 - - - - 328 FUND BALANCE AS RESTATED _4,256 1,563 624 226 (258) 4,294 FUND BALANCE-END OF YEAR $ 2,823 $ (42) $ 108 $ 254 $ (119) $ 4,001 ae 1 ' Special Revenue Funds Perk Acqulsiton Total Special Air library and Revenue ' Quality Traffic Impact Fourth of Jut Services Grants - Develo me t Funds $ $ $ $ $ $ - $ 2,569 748 748 15 224 1 333 476 48 1,340 220 - 7,430 19 12,723 ' - 1,142 - 4 10 1,918 247 10 81 558 99292 235 1,366 248 776 7,987 1,373 20,290 - - - 392 ' 1 185 166 66 16668 740 761 - 1,258 1.258 231 232 502 965 ' - 359 99 458 73 15 772 2,203203 3 311 394 4,923 1,852 15,218 ' 75 - 123- - 185 19191 384 409 231 359 8,635 2,354 21,923 (149) 957 17 417 (648) (981) (1,633) ' - 35 (84) - 276(705) (5 276) (8,499) 499) (84) 5 (705) (4,682) 35 (7,865) (233) 957 22 (288) (5,330) (946) (9,498) 601 5,941 42 1,402 8,243 1,886 211,1112 638 601 5,941 42 1,402 8,243 1,886 28,820 S 368 i 6,898 S 64 S 1.114 S 2,913 $ 940 S 19,322 1 CITY OF HUNTINGTON BEACH ' COMBINING STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES ' NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) (CONTINUED) ' Debt Service Funds CAPITAL PROJECTS FUNDS Reservoir Hill Civic Assessment Improvement Total Debt REVENUES: District Co oretion Serviee Fund Low-1n Housing Pier R.building Parkin I-uw Property Taxes $ 185 $ $ 185 $ $ - $ Other Taxes - 2 Licenses and Permits - - 17 From Use of Money and Property 5 14 19 195 268 15 From Other Agencies - - - - - , Charges for Current Service Other 18 TOTAL REVENUES 190 14 204 195 288 32 EXPENDITURES: Current: ' City Administrator - - - - - - Planning Fire Police - Economic Development 83 ' Community Services Library Services Public Works - - Non-Departmental 20 20 - - Capital Outlay - - 984 88 ' Debt Service: Principal 190 190 Interest 50 50 TOTAL EXPENDITURES 260 260 1,067 88 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (70) 14 (56) (872) 200 32 OTHER FINANCING SOURCES(USES): , Transfers In - - - 1,245 - - Transfers Out - (2,834) (2,834) (35) (590) TOTAL OTHER FINANCING SOURCES(USES) (2,834) (2,834) 1,210 (590) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (70) (2,820) (2,89)) 338 (390) 32 ' FUND BALANCE-BEGINNING OF YEAR 255 2,820 3,075 5,966 680 441 Prior Period Adjustments - FUND BALANCE AS RESTATED 255 2,820 3,075 5,966 680 441 FUND BALANCE-END OF YEAR $ 185 $ $ 185 $ 6,304 $ 290 $ 473 1 B1 ' CAPITAL PROJECTS FUNDS Total Non-Major ' - Library Cultur.l Total Capital Ciowrnme�dal Holly SeaoliR Pier Plaza Faeilitle. Pro ecu Fund. Funds $ $ $ $ $ 185 2 2,571 - 17 765 40 366 32 916 2,275 ' 1 12.723 1 57 572 2,490 490 570 4 592 1,584 610 367 607 2,099 22,593 392 - - 185 185 166 - - 761 89 89 1,054 407 407 865 39 39 2,242 - - 23 313 241 5 128 407 1,695 23,878 ' 606 239 200 404 11,21151 1,245 1,879 (335) (960) (12,293) (335) 285 (10,414) 605 (96) 200 689 (11,699) 579 (659) 681 7,688 38,945 638 579 (659) 681 7,688 39,583 $_1,184 $ (755) $ 881 S 8,377 $ 27,884 02 CITY OF HUNTINGTON BEACH ' SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL ' NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) , Gas Tax Original Final REVENUES: Budget Budget Actual Variance ' From Use of Money and Property $ 40 $ 40 $ 89 $ 49 From Other Agencies 4,901 4,901 4,827 (74) Other - 26 26 TOTAL REVENUES 4,941 4,941 4,942 1 ' EXPENDITURES: Current: Public Works 1,167 1,408 446 962 Capital Outlay 2,591 5,953 3,529 2,424 , TOTAL EXPENDITURES 3,758 7,361 3,975 3,386 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 1,183 (2,420) 967 3,387 OTHER FINANCING SOURCES(USES): Transfers Out (2,400) (2,400) (2,400) - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES 1,183 (4,820) (1,433) 3,387 FUND BALANCE-BEGINNING OF YEAR 3,946 3,946 3,946 - Prior Period Adjustments - 310 310 FUND BALANCE AS RESTATED 3,946 4,256 4,256 - ' FUND BALANCE-END OF YEAR $ 5,129 $ (564) $ 2,823 $ 3,387 Sewer Development ' Original Final REVENUFS: Budget Budget Actual Variance From Use of Money and Property $ 70 $ 70 $ 5 $ (65) ' From Other Agencies - - 25 25 Charges for Current Service 100 100 81 (19) TOTAL REVENUES 170 170 111 (59) EXPENDITURES: Current: ' Public Works 379 516 225 291 Capital Outlay 89 2,302 1,491 811 TOTAL EXPENDITURES 468 2,818 1,716 1,102 EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) ' EXPENDITURES AND OTHER USES (298) (2,648) (1,605) 1,043 FUND BALANCE-BEGINNING OF YEAR 1,563 1,563 1,563 FUND BALANCE-END OF YEAR $ 1,265 $ (1,085) $ (42) $ 1,043 93 ' CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS ' FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) (CONTINUED) Drainage Original Final REVENUES: Budget Budget Actual Variance ' Charges for Current Service $ - $ 200 $ 229 $ 29 EXPENDITURES: Current: Non-Departmental - - 3 (3) Capital Outlay 193 995 742 253 TOTAL EXPENDITURES 193 995 745 250 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (193) (795) (516) 279 FUND BALANCE-BEGINNING OF YEAR 624 624 624 FUND BALANCE-END OF YEAR $ 431 $ (171) $ 108 $ 279 ' Public Communications ' Original Final REVENUES: Budget Budget Actual Variance Other Taxes $ 458 $ 458 $ 500 $ 42 From Use of Money and Property - 5 5 ' Charges for Current Service 40 40 33 (7) TOTAL REVENUES 498 498 538 40 EXPENDITURES: Current: City Administrator 331 361 392 (31) ' Capital Outlay 96 70 30 40 Debt Service: Principal - - 48 (48) Interest - 6 (6) TOTAL EXPENDITURES 427 431 476 (45) EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 71 67 62 (5) OTHER FINANCING SOURCES(USES): Transfers Out (89) (34) (34) - ' EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (18) 33 28 (5) FUND BALANCE-BEGINNING OF YEAR 226 226 226 FUND BALANCE-END OF YEAR $ 208 $ 259 $ 254 $ (5) ' 8 Narcotics Forfeiture Original Final ' REVENUES: Budget Budget Actual Variance From Other Agencies $ 25 $ 25 $ 160 $ 135 EXPENDITURES: Police 25 30 21 9 ' EXCESS OF REVENUES OVER(UNDER)EXPENDITURES - (5) 139 144 FUND BALANCE-BEGINNING OF YEAR (258) (258) (258) FUND BALANCE-END OF YEAR $ (258) $ (263) $ (119) $ 144 1 94 CITY OF HU'4TINGTON BEACH ' SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL ' NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) ' (CONTINUED) Transportation Original Final ' REVENUES: Budget Budget Actual Variance Other Taxes $ 1,718 $ 1,718 $ 2,069 $ 351 From Use of Money and Property 40 40 144 104 ' From Other Agencies 160 160 42 (118) Other - 70 70 TOTAL REVENUES 1,918 1,918 2,325 407 EXPENDITURES: Current: ' Public Works 721 792 672 120 Capital Outlay 3,705 3,798 1,946 1,852 TOTAL EXPENDITURES 4,426 4,590 2,618 1,972 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (2,508) (2,672) (293) 2,379 ' FUND BALANCE-BEGINNING OF YEAR 3,966 3,966 3,966 - Prior Period Adjustments - 328 328 - FUND BALANCE AS RESTATED 3,966 4,294 4,294 FUND BALANCE-END OF YEAR $ 1,458 $ 1,622 $ 4,001 $ 2,379 Air Quality ' Original Final ' REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 20 $ 20 $ 15 $ (5) From Other Agencies 210 210 220 10 TOTAL REVENUES 230 230 235 5 ' EXPENDITURES: Current: Information Systems 50 50 - 50 Public Works 85 186 73 113 Capital Outlay 397 413 311 102 ' TOTAL EXPENDITURES 532 649 384 265 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (302) (419) (149) 270 OTHER FINANCING SOURCES(USES): Transfers Out - (24) (84) (60) ' EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (302) (443) (233) 210 FUND BALANCE-BEGINNING OF YEAR 601 601 601 FUND BALANCE-END OF YEAR $ 299 $ 158 $ 368 $ 210 Traffic Impact Original Final REVENUES: Budget Budget Actual Variance , From Use of Money and Property $ 40 $ 40 $ 224 $ 184 From Other Agencies 160 160 - (160) Charges for Current Service 300 .300 1,142 842 TOTAL REVENUES Soo 500 1,366 866 ' EXPENDITURES: Current: Public Works 50 75 15 60 Capital Outlay 153 526 394 132 ' TOTAL EXPENDITURES 203 601 409 192 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 297 (101) 957 1,058 FUND BALANCE-BEGINNING OF YEAR 5,941 5,941 5,941 FUND BALANCE-END OF YEAR $ 6,238 $ 5,840 $ 6,898 $ 1,058 1 95 ' CITY OF HUNTINGTON BEACH ' SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS ' FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) (CONTINUED) ' Fourth of July Original Final REVENUES: Budget Budget Actual Variance ' From Use of Money and Property $ 2 $ 2 $ 1 $ (1) Other 200 200 247 47 TOTAL REVENUES 202 202 248 46 EXPENDITURES: Current: ' Community Services 253 263 231 32 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (51) (61) 17 78 OTHER FINANCING SOURCES(USES): Transfers In - 5 5 - ' EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (51) (56) 22 78 FUND BALANCE-BEGINNING OF YEAR 42 42 42 FUND BALANCE-END OF YEAR $ (9) $ (14) $ 64 $ 78 ' Library Services Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 338 $ 338 $ 333 $ (5) Charges for Current Service 320 320 433 113 Other 6 6 10 4 ' TOTAL REVENUES 664 664 776 112 EXPENDITURES: Current: Library Services 827 386 359 27 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (163) 278 417 139 ' OTHER FINANCING SOURCES(USES): Transfers Out (705) (705) (705) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (868) (427) (288) 139 ' FUND BALANCE-BEGINNING OF YEAR 1,402 1,402 1,402 - FUND BALANCE-END OF YEAR $ 534 $ 975 $ 1,114 $ 139 1 1 96 CITY OF HUNTINGTON BEACH t COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL t NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) ' Grants Original Final ' REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 1,030 $ 1,030 $ 476 $ (554) From Other Agencies 14,888 14,888 7,430 (7,458) Other 81 81 TOTAL REVENUES 15,918 15,918 7,987 (7,931) EXPENDITURES: Current: City Administrator - 50 - 50 Planning 142 143 185 (42) ' Fire 43 534 166 368 Police 868 1,119 740 379 Economic Development 803 1,805 1,258 547 Community Services 111 225 232 (7) ' Library Services 83 88 99 (11) Public Works 1,590 3,020 772 2,248 Capital Outlay 15,466 19,726 4,923 14,803 Debt Service: Principal - 75 75 - ' Interest 185 185 - TOTAL EXPENDITURES 19,106 26,785 8,635 18,285 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (3,188) (10,867) (648) 10,219 OTHER FINANCING SOURCES(USES): ' Transfers In 594 594 - Transfers Out (5,276) (5,276) - TOTAL OTHER FINANCING SOURCES(USES) (4,682) (4,682) E XCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) ' EXPENDITURES AND OTHER USES (3,188) (15,549) (5,330) 10,219 FUND BALANCE-BEGINNING OF YEAR 8,243 8,243 8,243 FUND BALANCE-END OF YEAR $ (3,188) $ (7,306) $ 2,913 $ 10,219 Park Acquisition and Development ' Original Final ' REVENUES: Budget Budget Actual Variance Licenses and Permits $ 499 $ 499 $ 748 $ 249 From Use of Money and Property - - 48 48 From Other Agencies - - 19 19 ' Other - - 558 558 TOTAL REVENUES 499 499 1,373 874 EXPENDITURES: Current: Community Services 815 1,504 502 1,002 , Capital Outlay 3,485 3,360 1,852 1,508 TOTAL EXPENDITURES 4,300 4,864 2,364 2,510 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (3,801) (4,365) (981) 3,384 OTHER FINANCING SOURCES(USES): ' Transfers In 35 35 35 - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (3,766) (4,330) (946) 3,384 FUND BALANCE-BEGINNING OF YEAR 1,886 1,886 1,886 FUND BALANCE-END OF YEAR $ (1,880) $ (2,444) $ 940 $ 3,384 97 ' CITY OF HUNTINGTON BEACH ' COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES -BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2002 ' (IN THOUSANDS) Reservoir Hill Assessment District t Original Final REVENUES: Budget Budget Actual Variance Property Taxes $ 151 $ 151 $ 185 $ 34 From Use of Money and Property 23 23 5 (18) TOTAL REVENUES 174 174 190 16 EXPENDITURES: Current: Non-Departmental 1 18 20 (2) Debt Service: Principal 150 220 190 30 Interest 62 50 12 TOTAL EXPENDITURES 151 300 260 40 ' EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 23 (126) (70) 56 FUND BALANCE-BEGINNING OF YEAR 255 255 255 FUND BALANCE-END OF YEAR $ 278 $ 129 $ 185 $ 56 ' Civic Improvement Corporation Original Final REVENUES: Budget Budget Actual Variance ' From Use of Money and Property $ 130 $ 130 $ 14 $ (116) OTHER FINANCING(USES): Transfers Out (2,834) (2,834) (2,834) EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (2,704) (2,704) (2,820) (116) FUND BALANCE-BEGINNING OF YEAR 2,820 2,820 2,820 FUND BALANCE-END OF YEAR $ 116 $ 116 $ - $ (116) ' Low-Income Housing Original Final ' REVENUES: Budget Budget Actual Variance From Use of Money and Property $ 110 $ 110 $ 195 $ 85 EXPENDITURES: Current: ' Economic Development 135 149 83 66 Capital Outlay 5,190 5,136 984 4,152 TOTAL EXPENDITURES 5,325 5,285 1,067 4,218 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (5,325) (5,175) (872) 4,303 ' OTHER FINANCING SOURCES(USES): - Transfers In 1,259 1,259 1,245 (14) Transfers Out (35) (35) (35) TOTAL OTHER FINANCING SOURCES(USES) 1,224 1,224 1,210 (14) t EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES (4,101) (3,951) 338 4,289 FUND BALANCE-BEGINNING OF YEAR 5,966 5,966 5,966 FUND BALANCE-END OF YEAR $ (5,325) $ 791 $ 6,304 $ 4,289 98 CITY OF HUNTINGTON BEACH ' COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL ' NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2002 (IN THOUSANDS) ' Pier Rebuilding Original Final ' REVENUES: Budget Budget Actual Variance Other Taxes $ 24 $ 24 $ 2 $ (22) From Use of Money and Property 560 560 268 (292) Other 24 24 18 (6) ' TOTAL REVENUES 608 608 288 (320) EXPENDITURES: Capital Outlay 90 88 2 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 608 518 200 (318) ' OTHER FINANCING SOURCES(USES): Transfers Out (590) (590) (590) - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES 18 (72) (390) (318) ' FUND BALANCE-BEGINNING OF YEAR 680 680 680 - FUND BALANCE-END OF YEAR $ 698 $ 608 $ 290 $ (318) Parking In-Lieu , Original Final REVENUES: Budget Budget Actual Variance Licenses and Permits $ $ - $ 17 $ 17 ' From Use of Money and Property 15 15 TOTAL REVENUES - - 32 32 FUND BALANCE-BEGINNING OF YEAR 441 441 "1 FUND BALANCE-END OF YEAR $ 441 $ 441 $ 473 $ 32 r 99 ' CITY OF HUNTINGTON BEACH ' COMBINING SCHEDULE OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL NON-MAJOR GOVERNMENTAL FUNDS ' FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) Holly Seacliff ' Original Final REVENUES: Budget Budget Actual Variance From Use of Money and Property $ - $ - $ 40 $ 40 ' Other - - 570 570 TOTAL REVENUES 610 610 EXPENDITURES: Capital Outlay 147 147 5 142 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES (147) (147) 605 752 ' FUND BALANCE-BEGINNING OF YEAR 579 579 579 - FUND BALANCE-END OF YEAR $ 432 $ 432 $ 1,184 $ 752 ' Pier Plaza Original Final REVENUES: Budget Budget Actual Variance ' From Use of Money and Property $ 600 $ 600 $ 366 $ (234) Charges for Current Service 1 1 TOTAL REVENUES 600 600 367 (233) EXPENDITURES: Current: ' Community Services 90 90 89 1 Public Works 75 98 39 59 TOTAL EXPENDITURES 165 188 128 60 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 435 412 239 (173) OTHER FINANCING SOURCES(USES): Transfers Out (335) (335) (335) - EXCESS OF REVENUES AND OTHER SOURCES OVER(UNDER) EXPENDITURES AND OTHER USES 100 77 (96) (173) ' FUND BALANCE-BEGINNING OF YEAR (659) (659) (659) - FUND BALANCE-END OF YEAR $ (559) $ (582) $ (755) $ (173) ' Library Cultural Facilities REVENUES: Budget Actual Variance From Use of Money and Property $ 30 $ 30 $ 32 $ 2 Charges for Current Service 477 477 571 94 Other 4 4 TOTAL REVENUES 507 507 607 100 EXPENDITURES: ' Current: Library Services 445 445 407 38 EXCESS OF REVENUES OVER(UNDER)EXPENDITURES 62 62 200 138 FUND BALANCE-BEGINNING OF YEAR 681 681 681 FUND BALANCE-END OF YEAR $ 743 $ 743 $ 881 $ 138 100 Non-Major Enterprise Funds 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 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 Sewer Service Fund accounts for the City's sewer program to residents and businesses ' 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 1 1 CITY OF I IUNTINGTON BEACH ' STATEMENT OF NET ASSETS NON-MAJOR ENTERPRISE FUNDS , SEPTEMBER 30, 2002 (in thousands) Emerald , Cove Emergency Refuse Sewer Hazmat Cultural Ocean View ASSETS HousingIFIre Medical I Collection I Service Service Affairs Estates Total CURRENT ASSETS: Cash and Investments $ 2.198 $ 443 $ - $ 2,756 $ 247 $ 164 $ 671 $ 6,479 General Receivables 16 1,685 461 272 - - 2 2,436 ' Unbilled Receivable - - 1,241 614 - - 1,855 TOTAL CURRENT ASSETS 2,214 2,128 1,702 3,642 247 164 673 10,770 CAPITAL ASSETS: Land 1,288 - - - 759 2,644 4,691 Buildings 4,102 1,219 - 1,248 560 7,129 ' Machinery and Equipment - 1,106 191 20 - - 1,317 Infrastructure - 33,796 - - - 33,796 Less Accumulated Depreciation (1,394) (204) (17,742) (20) (175) (30) (19,565) TOTAL CAPITAL ASSETS 3,996 902 17,464 1,832 3,174 27,368 TOTALASSETS 6,210 3,030 1,702 21,106 247 1,996 3,847 38,138 ' LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts Payable - 195 731 1 8 2 937 Accrued Payroll 48 9 49 14 7 - 127 Due to Other Funds - - 1,292 - - 1,292 ' Deposits Payable 27 - - - - 27 TOTAL CURRENT LIABILITIES 27 243 2,032 50 14 15 2 2,383 NON-CURRENT LIABILITIES: Capital Leases - 281 - - - 281 Compensated Absences - 49 35 11 4 99 , Advances from Other Funds 243 - - - 243 TOTAL NON-CURRENT LIABILITIES 243 330 35 11 4 623 TOTAL LIABILITIES 270 573 2,067 50 25 19 2 3,006 NET ASSETS: invested in Capital Assets,Net of Related Debt 3.996 621 17,464 1.832 3.174 27,087 ' Unrestricted 1,944 1,836 (365) 3.592 222 145 671 8,045 TOTAL NET ASSETS $ 5,940 $ 2,457 $ (365) $ 21,056 $ 222 $ 1,977 $ 3,845 $ 35,132 101 ' CITY OF HUNTINGTON BEACH ' STATEMENT OF REVENUES, EXPENSES,AND CHANGES IN NET ASSETS NON-MAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002 ' (in thousands) Emerald ' Cove I Emergency Refuse Sewer Hazmat Cultural Ocean View HousingFire Medical Collection Service Service Affairs Estates Total OPERATING REVENUES: Rentals $ 661 $ - $ - $ $ $ $ 170 $ 831 Fees for Service - 4,103 9,073 4,540 - 17,716 Other 46 109 145 189 22 511 TOTAL OPERATING REVENUES 707 4,103 9,182 4,540 145 189 192 19,058 OPERATING EXPENSES: Supplies and Operations 323 3,075 9.178 1,708 139 292 - 14.715 Depreciation 82 97 - 711 4 25 11 930 TOTAL OPERATING EXPENSES 405 3,172 9,178 2,419 143 317 11 15,645 OPERATING INCOME(LOSS) 302 931 4 2,121 2 (128) 181 3,413 NON-OPERATING REVENUES(EXPENSES): Interest Income 80 12 56 11 6 5 170 Gain(Loss)on Sale of Plant,Property,and Equipment 59 59 TOTAL NON-OPERATING REVENUES(EXPENSES) 80 71 56 11 6 5 229 CHANGE IN NET ASSETS BEFORE OPERATING TRANSFERS AND CAPITAL CONTRIBUTIONS 382 1,002 4 2,177 13 (122) 186 3,642 TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers In 35 - 700 85 - 820 ' Transfers Out (383) (181) (12) - (576) Capital Contributions 18,179 18,179 TOTAL TRANSFERS AND CAPITAL CONTRIBUTIONS (348) (181) 18,879 (12) 85 18,423 TOTAL CHANGE IN NET ASSETS 34 821 4 21,056 1 (37) 186 22,065 NET ASSETS OCTOBER 1,2001 5,906 1,636 (369) 221 2,014 3,659 13,067 ' NET ASSETS SEPTEMBER 30,2002 $ 5,940 $ 2,457 $ (365) $ 21,056 $ 222 $ 1,977 $ 3,845 $ 35,132 1 1 102 CITY OF HUNTINGTON BEACH STATEMENT OF CASH FLOWS ' NON-MAJOR ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002 (in thousands) ' Emerald Cove Emergency I Refuse Sewer Hazmat Cultural Ocean View HousingFire Medical Collection Service I Service Affairs I Estates Total Cash Flows from Operating Activities: ' Cash Received from Customers and Users $ 674 $ 3,712 $ 8.974 $ 3,654 $ 146 $ 194 $ 195 $ 17.549 Cash Paid to Employees for Services - (1,173) (231) (918) (116) (230) - (2.668) Cash Paid to Suppliers of Goods and Services (350) (2,135) (8,972) (736) 00) (117) 0) (12.321) Other Operating Items 229 229 Net Cash Provided(Used)by Operating Activities 324 404 2,000 20 (153) 194 2,789 ' Cash Flows from Noncapital Financing Activities: Transfers In 35 - 700 - 85 - 820 Transfers Out (383) (181) (12) (576) Net Cash Provided(Used)by Non Capital Financing ' Activities (348) (181) 700 (12) 85 2" Cash Flows from Capital and Related Financing Activities: Purchase of Plant.Property,and Equipment (477) - - (477) Principal Paid on Long-Tenn Debt (150) (150) Net Cash Provided(Used)by Capital and Related ' Financing Activities (627) (627) Cash Flows from Investing Activities Cash Received from Investments 80 12 56 11 6 5 170 Net Increase(Decrease)in Cash and Cash Equivalents 56 (392) 2,756 19 (62) 199 2,676 ' Cash and Cash Equivalents,October 1,2001 2,142 835 - 228 226 472 3,903 Cash and Cash Equivalents,September 30,2002 $ 1,198 $ 443 $ $ 2,756 S 247 $ 164 $ 671 $ 6 479 Reconciliation of Operating Income to Net Cash ' provided(used)by Operating Activities Operating Income(Loss) $ 302 $ 931 $ 4 $ 2,121 $ 2 $ (128) $ 181 $ 3,413 Adjustments to Reconcile Operating income to Net Cash Provided(Used)by Operating Activities ' Depreciation 82 97 - 711 4 25 11 93u Decrease(Increase)in Accounts Receivable 19 (573) (182) (272) 1 3 (1,004) Decrease(Increase)in Unbilled Receivables - (26) (610) - - - (636) Increase(Decrease)in Accounts Payable (84) (59) (26) 1 - (53) (1) (222) Increase(Decrease)in Accrued Payroll 5 1 49 13 1 - 69 Increase(Decrease)in Due to Other Funds 223 - - 223 ' Increase(Decrease)in Advances from Other Funds (1) - (1) Increase(Decrease)in Deposits 6 - - - 6 Increase(Decrease)in Compensated Absences 3 6 2 11 Net Cash Provided(Used)by Operating Activities $ 324 $ 404 $ $ 2,000 $ 20 $ (153) $ 194 $ 2,789 103 ' 1 Internal Service Funds ' 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. 1 1 1 t CITY OF HUNTINGTON B=ACH ' STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS ' SEPTEMBER 30,2002 in thousands workers• ASSETS Medical insurance Compensation Total Current Assets: ' Other Receivables $ 12 $ - $ 12 Prepaid Insurance 115 67 182 TOTALASSETS 127 67 194 LIABILITIES Current Liabilities ' Accounts Payable 24 7 31 Accrued Payroll 15 9 24 Due to Other Funds 869 1,945 2,814 Current Portion of Claims Payable 385 3,500 3,885 Total Current Liabilities 1,293 6,461 6,764 Non-Current Liabilities ' Compensated Absences 45 - 45 Claims Payable 385 5,065 5,450 Less Current Portion (385) (3,500) (3,885) Total Non-Current Liabilities 45 1,565 1,610 ' TOTAL LIABILITIES 1,338 7,026 8,364 NET ASSETS Unrestricted (1,211) (6,959) (8,170) TOTAL NET ASSETS $ (1,211) $ (6,959) $ (8,170) STATEMENT OF REVENUES,EXPENSES,AND CHANGES IN NET ASSETS ' FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2002 in thousands Workers' ' Medical Insurance I Compensation Total OPERATING REVENUES: Fees for Service $ 4,858 $ 3,145 $ 8,003 Other 15 15 TOTAL OPERATING REVENUES 4,873 3,145 8,018 t OPERATING EXPENSES: Claims and Insurance 6,799 3,941 10,740 Supplies and Operating 598 248 846 TOTAL OPERATING EXPENSES 7,397 4,189 11,586 OPERATING INCOME(LOSS) (2,524) (1,044) (3,568) ' TRANSFERS: Transfers In 746 608 1,354 Transfers Out (178) (550) (728) TOTAL TRANSFERS 568 58 626 TOTAL CHANGE IN NET ASSETS (1,956) (986) (2,942) ' NET ASSETS OCTOBER 1,2001 745 (5,973) (5,228) NET ASSETS SEPTEMBER 30,2002 $ (1,211) $ (6,959) $ (8,170) STATEMENT OF CASH FLOWS FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2002 ' (in thousands) Workers' Medical Insurance I Compensation Total ' Cash Flows from Operating Activities: Cash Received from Customers and Users $ 4,873 $ 3,145 $ 8,018 Cash Paid to Employees for Services (423) (186) (609) Cash Paid to Suppliers of Goods and Services (6,364) (3,017) (9,381) Net Cash Provided by Operating Items (1,914) (58) (1,972) Cash Flows from Noncapital Financing Activities: ' Transfers In 746 608 1,354 Transfers Out (178) (550) (728) Net Cash Provided(Used)by Non Capital Financing Activities 568 58 626 Net Increase in Cash and Cash Equivalents (1,346) - (1,346) ' Cash and Cash Equivalents,October 1,2001 1,346 1,346 Cash and Cash Equivalents,September 30,2002 $ $ $ Reconciliation of Operating Income to Net Cash provided(used)by Operating Activities Operating Income(Loss) $ (2,524) $ (1,044) $ (3,568) Adjustments to Reconcile Operating income to Net ' Cash Provided(Used)by Operating Activities Decrease(Increase)in Accounts Receivable 32 - 32 Decrease(Increase)in Prepaid Insurance (64) (46) (110) Increase(Decrease)in Accounts Payable (20) 5 (15) Increase(Decrease)in Accrued Payroll - 2 2 ' Increase(Decrease)in Accrued Interest Payable (394) (4) (398) Increase(Decrease)in Due to Other Funds 869 571 1,440 Increase(Decrease)in Claims Payable 185 479 664 Increase(Decrease)in Compensated Absences 2 (21) (19) Net Cash Provided(Used)by Operating Activities $ (1,914) $ (58) $ (1,972) ' 104 ' � Capital Assets Used in the Operation of 1 Governmental Funds CITY OF HUNTINGTON BEACH ' CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY SOURCE SEPTEMBER 30,2002 ' (IN THOUSANDS) CAPITAL ASSETS: Land $ 317,391 Buildings 86,469 ' Machinery&Equipment 50,517 Construction In Progress 22,202 Infrastructure 274,079 TOTAL INVESTMENT IN CAPITAL ASSETS $ 750,668 ' INVESTMENTS IN CAPITAL ASSETS FROM: General Fund $ 124,908 Special Revenue Funds 60,210 , Capital Projects Funds 41,819 Donations 523,721 TOTAL INVESTMENTS IN CAPITAL ASSETS $ 750,658 CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS ' BY FUNCTION AND ACTIVITY FOR THE YEAR ENDED SEPTEMBER 30,2002 (IN THOUSANDS) ' October 1, September 30, 2001 Additions Retirements 2002 Administrative Services $ 794 $ 53 $ (695) $ 152 ' Building 289 464 (77) 676 City Attorney 89 - (6) 83 City Administration 748 230 (76) 902 City Clerk 34 6 - 40 City Treasurer 100 125 (27) 198 ' Community Services 89,184 4,667 (406) 93,445 Economic Development 18.486 (23) 18,463 Fire 13,171 2,614 (2,489) 13,296 Information Systems 5,707 1,955 (130) 7,532 Library Services 14,491 56 (76) 14,471 ' Non-Departmental 12,037 - - 12,037 Planning 124 81 (72) 133 Police 18,024 8,146 (10,125) 16,045 Public Works 538,464 39,921 (5,200) 573,185 TOTAL $ 711,742 $ 68,318 $ (19,402) $ 750,658 ' CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY SEPTEMBER 30,2002 ' (IN THOUSANDS) Machinery& Construction In Land Buildings Equipment Progress Infrastructure Total Administrative Services $ $ $ 152 $ - $ $ 152 Building 268 408 676 City Attorney 83 - 83 City Administration 902 902 City Clerk 40 40 City Treasurer 198 198 Community Services 47,598 41.005 4,842 93,445 ' Economic Development 18,412 - 51 18,463 Fire - 5,835 7,461 - 13,296 Information Systems - 7,422 110 7,532 Library Services - 13.667 804 - 14,471 Non-Departmental 1,410 9,981 646 12.037 ' Planning - 133 - 133 Police 785 14,545 715 16,045 Public Works 249,971 15,196 12,970 20,969 274,079 573,185 TOTAL $ 317,391 $ 86,469 $ 50,517 $ 22,202 $ 274,079 $ 750,658 1 1 1 105 ' 1 1 1 1 1 1 � Statistical Section CITY Of HUNTINGTON BEACH ' GOVERNMENTAL FUND EXPENDITURES BY FUNCTION AND ACTIVITY ' LAST TEN FISCAL YEARS (IN THOUSANDS) Administrative Community City Council City Administrator City Treasurer City Attorney City Clark Services Develaprnent Planning Building ' 1992-93 $213 $1,480 $709 $1,807 $449 $4,108 $6,097 $ $ •1993-94 282 2,691 897 2,168 517 5,140 10,406 - - 1994-95 224 1,672 709 1,866 485 4,200 3,252 - - 1995-96 224 2,140 743 1,466 488 4,181 3,252 - - 1996-97 233 1,856 781 1,738 470 4,208 3,694 - - 1997-98 207 1,092 805 2.340 434 3,056 3,919 - - 1998-99 275 1,569 820 1,969 474 2,876 4,067 - - 1999-2000 277 1,799 884 2,227 451 3,559 - 2,180 2.384 2000-2001 231 1,776 916 2,943 559 3,874 - 2.329 2,589 2001-2002 237 2,109 1,108 3,570 676 7,095 - 2,585 2,991 ' Source:Administrative Services Department-City of Huntington Beach GOVERNMENTAL FUND REVENUES BY SOURCE LAST TEN FISCAL YEARS (IN THOUSANDS) ' Licenses and Fines and Use of Money From Other Charges for , Fiscal Year Property Tax Other Taxes Permits Forfeitures and Property Agencies Current Service Other Total 1992-93 $ 33,163 S 36.332 S 4,846 $ 1,354 $ 11,382 $ 19,334 $ 6.453 $ 2.493 $ 115.357 •1993-94 32.545 46,194 6,579 1,894 17.303 25,894 9,528 6.221 146.158 1994-95 25,265 38.259 5,978 2,134 11,704 19,941 8,706 1,071 113,058 1995-96 29,320 39,879 6,567 2,134 14,291 18,171 13,129 3,579 127,070 ' 1996-97 29,341 42,203 8,121 2.707 12,971 19,810 10,448 743 126,344 1997-98 32.477 44,895 8.848 2,649 12,614 21,539 10.147 3,798 136,967 1998-99 34.345 48,757 10,527 2.744 10.913 24,753 9.557 4.514 146,110 1999-2000 37,645 52,194 8.538 4,018 14,603 32,021 10.077 5,770 164,866 2000-2001 36,860 60,223 6.902 4,092 15,812 31,634 10,459 1,691 167.673 ' 2001-2002 33.204 55,084 7.162 3.797 13,895 28.426 12,597 2,604 156.769 Source:Administrative Services Department•City of Huntington Beach PROPERTY 1 AX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS ' (IN THOUSANDS) SECURED TAXES UNSECURED TAXES DELINQUENCY DELINQUENCY DELINQUENCY DELmQUENC ' TOTAL LEVY TOTAL COLLECTIONS AMOUNT PERCENT TOTALLEVY TOTAL COLLECTIONS AMOUNT PERCENT 1992-93 $ 19,060 S 17,847 $ 853 4.48% S 1,542 $ 1,205 $ 30 1.95% 1993-94• 16.612 15.632 572 344% 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 2.45% 2001-2002 1 24,581 24,238 343 140% 1,419 1,366 53 3.74% ' RESERVOIR HILL MELLO-ROOS 1992-93 $ 191 $ 187 S 3 1.60% $ 264 $ 245 $ 19 7.76% •1993-94 180 175 4 2.29% 264 181 83 45.86% 1994-95 187 183 4 2.19% 264 258 6 2.33% 1995-96 186 176 9 5.11% 264 239 25 10.46% 1996-97 182 179 3 1.68% 264 251 13 5.18% 1997-98 173 184 9 4.89% 264 255 9 3.53% ' 1998-99 194 184 9 4.89% 264 255 8 114% 1999-2000 184 181 3 1.63% 264 259 5 1.89% 2000-2001 184 180 4 2.17% 264 258 5 1.89% 2000-2002 1 188 184 4 2.13% 264 258 6 2.27% Fiscal Year 1993-94 is a fifteen month fiscal year. ' Source:County of Orange Auditor Controllers Office Note-Delinquency amount does not always equal levy amount minus collections amount since there are always amounts collected from prior years 1 106 N �! m m �1 1n 1w,� 1n A 1n 1-D m a N A � W 01 mp a 1pi1 0 � A N 1D OJ Ol V A N U N w' O J 1w0 W A1� A W N N O N 1WD m A A ONi + (U� 1V0 W UWi O + O W V W O D U U M 0 3 W N W W W N W N 0 0) A fUD N A � W U 10 w 0 N O V w + 1D m v V�I + W m A V W U 0pp01� CO IJ M z, N U ow 0 L N m �[ r C a A A W W W w N N w N s ' W IJ IpppDp U � ppW(�1 1D ip U V � 01 v N m V U 1ND + O W � U O W V Ql tD V A N W 2 W 6%9-1N A 50 10 1D O A N U ID U � f w(pp rD V A v OOD N 1ND w V 10 W 7777776' y!7 Y A W m O 01 W 10 N N V O OI V O twD m W 01 0. C.�o 0 S 0) O AI V fD U IJ tD �01pp1 W � 401 � V N 1ND V W 1D J N + + ~ 8 � � � � m � Ammg �Wp OV1 1VD 10 U Doi W m N J A W N 1D N L W V 10 N CITY OF HUNTINGTON BEACH ' ASSESSED AND ACTUAL VALUATION OF ALL TAXABLE PROPERTY ' LAST TEN FISCAL YEARS (IN THOUSANDS) Total A.se.sed Estimated Full Fiscal Year Common Property Public Utilities Total Secured Unsecured Valuation Market Valuation Percent Inc.... 1992-93 $ 11,125,356 S 2.311 S 11,127.667 $ 758,178 S 11,885,845 $ 11.885,845 0.00% ' 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% 1995-98 11,817,571 2,218 11.819,789 538,559 12,358,348 12,358,348 0.36% 1998-97 11,761,075 2,129 11,763.204 542,084 12.305,288 12,305,288 -0.43% 1997-98 12.338,032 2,297 12,340,329 624,469 12,964,798 12.964.798 5.38% ' 1998-99 12,968,754 2,252 12,971,006 568.077 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 2,4D4 15,879,469 646.594 16.526.063 16,526,063 7.88% 2001-2002 17,076,822 2,805 17,079,627 732,334 17,811.981 17,811,961 7.78% Source:Administrative Services Department-City of Huntington Beach' ' PROPERTY TAX RATES ALL DIRECT AND OVERLAPPING GOVERNMENTS ' TAX RATE 04-001 LARGEST AREA IN CITY Yee, Basic Levy City Orange County School District. Metro Water District Other. Total ' 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 - 1.05630 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 2001-2002 1.00000 - - 0.00770 1.00770 Note-Rates are per$100 of assessed valuation ' Source-County of Orange GENERAL OBLIGATION BONDED DEBT RATIOS ' LAST TEN FISCAL YEARS General Fund Dal to ' General Banded Debt Assessed Assessed Markel Percent of De to Bonded De Per Total Debt Total General Fund (000.) Value(000.) A......d Value Population Capita Principal(000s) Interest(000.) service(000.) (GOO.) Expenditures 1992-93 S 860 $ 11,885,845 0-007 186.867 $ 5 $ 395 $ 75 $ 470 $ 91,850 0.51% 1993-94 $ 445 $ 11,875.885 0.004 189,159 $ 2 S 415 $ 52 $ 467 $ 115,757 0.40% 1994-95 $ S 12,314.146 0.000 186.587 $ - $ 445 $ 13 $ 458 $ 92,467 0.50% 1995-98 $ - $ 12,358,348 0.000 187,180 $ - S - $ - $ - $ 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 $ $ - $ - $ - $ 103.050 0.00% 1999-2000 S - $ 15,319.007 0.000 199,327 S $ - $ - $ - $ 117,863 0.00% 2000-2001 $ - $ 16,526,063 0.000 191,500 $ - $ - $ - $ - $ 122,139 0.00% ' 2001-2002 $ - $ 17,811,981 0.000 194,600 $ - $ - $ - S - $ 130,326 0-00% Source-Administrative Services Department,City of Huntington Beach 108 ' ' CITY OF HUNTINGTON BEACH CONSTRUCTION ACTIVITY ' AND BANK AND SAVINGS AND LOAN DEPOSITS LAST TEN FISCALYEARS Number of Estimated Value of Banks and Savings Building Percent New Construction and Loan Deposits Permits Change (OOOs) Percent Change (OOOs) Percent Change 1992-93 10,400 $ 100,400 $ 2,121,253 ' 1993-94 6,844 (34.2) $ 107,420 6.99 $ 2,141,528 1.0 1994-95 4,471 (34.7) $ 84,388 (21.44) $ 2,579,514 20.5 1995-96 7,594 69.9 $ 110,375 30.79 $ 2,581,844 0.1 1996-97 5,413 (28.7) $ 205.970 86.61 $ 2,737,588 6.0 1997-98 6,368 17.6 $ 206,035 0.03 $ 2,654,384 (1.9) 1998-99 6,735 5.8 $ 308.319 49.64 $ 2,908,376 8.3 1999-2000 5,474 (18.7) $ 207,509 (32.70) $ 3,554,438 22.2 2000-2001 5,106 (6.7) $ 153,279 (26.13) (100.0) 2001-2002 5,429 6.3 $ 190,873 24.53 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, 2002 ' ASSESSED VALUATION (IN THOUSANDS) $ 17,811,961 DEBT LIMIT:12%OF ASSESSED VALUATION 2,137,435 DEBT APPLICABLE TO LIMITATION: LEGAL DEBT MARGIN $ 2,137,435 Source-Administrative Services Department,City of Huntington Beach STATEMENT OF DIRECT AND ' OVERLAPPING BONDED DEBT SEPTEMBER 30, 2002 2001-2002 Assessed Valuation$18,674.320.585 tarter deducting$568,820.737)of incremental redevelopment valuation) OVERLAPPING TAX AND ASSES WENT DEBT ♦AWkabia Data a snaor O.C.Teeter Plan Obligations 7.442% $ 9.259.709 Metropolitan Water District 1.574% 7,910,294 Huntington Beach City School District 95.854% 19.166,029 Los Alamitos Unified School District Community Facilities District 1.328% 162,946 City of Huntington Beach Comm Fac.Dist No 1990-1 100.000% 2.155,000 City of Huntington Beach Comm Fac.Dist No 2000.01 100.000% 16,000,D00 City of Huntington Beach Comm Fac.Dist No 2002.01 100.000% 4,9DO,DDO City of Huntington Beach 1915 Act Bonds 100.000% 440,0DO TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 59,993.978 ' DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT O.C.General Fund Obligations 7.442% 73.622.887 O.C.Pension Obligations 7.442% 8,987.889 O.C.Board of Education Certificates of Participation 7.442% 1,488,400 O.C.Transit Authority 7.442% 459,544 ' MWD of Orange County Water Facilities Corp 11.179% 5,353.064 O.C.Sanitation District No.3,COPS 12.331% 6,533.248 O.C.Sanitation District No.11,COPS 99.956% 3,304,206 OCWD Certificates of Parfcipation 12.331% 25,506,674 ' Coast Community College COPS 30.909% 4.732,168 Los Alamitos Unified School District COPS 1.328% 56,706 Htg Beach Union High School District COPS 95.854% 4,414,077 Ocean Yew School District COPS 94.095% 9,879,975 City of Huntington Beach General Fund Obligations 100.DDO% 85,104,398 ' TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 229,443,236 Less: OC Transit Authority(80%self supporting) (367,635) OC Water District COPS(100%self supporting) (25,506.674) MWDOC Water Facilities Corporation(100%Self Supporting) (5,353,064) ' TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $ 198.215,863 GROSS COMBINED DEBT f 289.437.214 NET COMBINED TOTAL DEBT f 258,209,841 Excludes Tax and Revenue Anticipation Notes,revenue,mortgage revenue and tax allocation bonds, and non-bonded capital lease obligations ' Ratios to Assessed Valuation: Total Overlapping Tax and Assessment Debt 0.35% Combined Direct Debt($46,733,DD6) 0.51% Gross Combined Total Debt 1.74% ' Net Combined Total Debt 1.55% State School Building Aid Repayable as of 9/30102$8,191,270 Source-California Municipal Statistics ' 109 CITY OF KUNTINGTON BEACH DEMOGRAPHIC STATISTICS City Population ' as a Percent of Square Orange County County Year Population Percent Increase Miles Population Population 1910 815 3.57 34,436 ' 1920 1,687 107.0% 3.57 61,375 2.75% 1930 3,690 118.7% 3.57 62,451 5.91% 1940 3,738 1.3% 3-57 130,760 2.86% 1950 5,158 38.0% 4.72 216,224 2.39% ' 1960 11,492 122.8% 23.47 703,995 1.63% 1970 116,400 912.9% 26.73 1,420,386 8.19% 1980 172,200 47.9% 27.20 1,931,570 8.92% 1990 188,701 9.6% 27.20 2,362,211 7.99% 1995 186,587 -1.1% 2720 2,627,949 7.10% ' 2000 199,326 6.8% 27.20 2,828,400 7.05% 2001 191,500 -3.9% 27.20 2,846.289 6.73% 2002 194,600 1.6% 27.20 2,939,500 6.62% Source-Administrative Services Department,City of Huntington Beach TOP TEN PROPERTY TAX PAYERS , SEPTEMBER 30, 2002 Percent of Estimated Tax ' Assessed Valuation 000s Toal 0008 " Percent of Total Duke Solutions Huntington $ 416.963 2.34% $ 627 1.89% Huntington Center 52,466 0.29% 346 1.04% Waterfront Construction(1) 36,828 0.21% 328 0.99% ' Essex Huntington Breakers 28,399 0.16% 253 0.76% Kyray LLC 21.429 0.12% 206 0.62% Atlanta HB LLC 27.853 0.16% 206 0.62% LIU Corporation 23.581 0.13% 170 0.51% AES Huntington Beach LLC 101,865 0.57% 158 0.48% ' McDonnel Douglas Corporation 63,632 0.36% 143 0.43% Bentall US Partners 15.905 0.09% 104 0.31% Total Top Ten 788,921 4.43% 2.541 7.65% All Other Properties 17,023,040 95.57%1 30.663 92.35 Total 17,811.961 10a0ml$ 33,204 Source-HDL Coren,Cone(number of parcels in parenthesis) "The estimated total tax includes only the portion of the total tapaid to the City's reporting entity.Properties in different tax areas or in a redevelopment agency project area pay a different percentage of tax to the City's reporting MISCELLANEOUS STATISTICS ' SEPTEMBER 30, 2002 Year of Incorporation 1909 Charter City-City Council-City ' Form of Government Administrator Area 27.2 Square Miles Population 194,600 Miles of Streets and Alleys 463 ' Number of City Trees 54,563 Fire Protection: Number of Stations 7 Number of Firefighters 139 Police Protection: ' Number of Stations 4 Number of Sworn Police Officers 223 Municipal Water Department: Number of Customers 49,000 Average Daily Consumption Total 32.0 Million Gallons , Average Daily Consumption Per Person 163 Miles of Water Mains 522 Public Works: Sanitary Sewers 352 Miles Stone Sewers 136 Miles ' Recreation and Culture: Number of Parks 57 Park Acreage Developed 529 Miles of Beach 3.4 Annual Beach Visitors 7,000.000 ' Number of Libraries 4 Volumes in Libraries 370,945 Full-Time Employees 1,039 Source-Administrative Services Department,City of Huntington Beach ' 110 '