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Home My WebLink AboutFY 1980/1981 City of Huntington Beach Annual Financial Repor CITY OF HUNTINGTON BEACH STATE OF CALIFORNIA ANNUAL -- FINANCIAL HUNTINGTON BEACH REPORT FOR THE YEAR ENDED JUNE 3001981 l Financial Section Certified Public Accountants Plat,Marwick,Mitchell&Ca NNe-MacArthur aouapt aesa,,Californiaornia 92660 (714)951-2000 The Honorable Members of the City Council City of Huntington Beach, California We have examined the combined financial statements of the City of Huntington Beach, California, as listed in the accompanying table of contents, as of and for the year ended, June 30, 1981. Except as set forth in the. following two paragraphs, our examination was made in accordance with generally accepted auditing standards and, accordingly, Included such tests of the accounting records and such other auditing procedures as we considered necessary In the circumstances._ . The City's records of the fixed assets of the Water Utility Fund were not adequate to allow us to satisfy ourselves as to the balance oIF net fixed assets, stated at $24,096,761, and the related depreciation expense of $768,809. The scope of our work was not sufficient to enable us to express, and we do not express, an opinion on the financial statements of the Water Utility Fund. The City's records of the General Fixed Assets Account Group were not adequate to allow us to satisfy ourselves as to the balance of the General Fixed Assets Account Group, stated at $32,477,065. The scope of our work was not sufficient to enable us to express, and we do not express, an opinion on the .financial statements of. the General Fixed Assets Account Group. In our opinion, the combined financial statements referred to above, other than those of the Water Utility Fund and General Fixed Assets Account Group as noted in the two preceding paragraphs, present fairly the financial position of the City of Huntington Beach, California, at June 30, 1981 and the results of .its operations and the changes in financial position of its proprietary funds for the year then ended, in conformity with generally accepted accounting princlples.appiied on a basis consistent with that of the preceding year after giving retroactive effect to the change, with which we concur, in the method of recording encumbrances as described in Note 2 to the combined financial statements. Our examination was made for the purpose of forming an opinion on the combined financial statements taken as a whole. The combining financial statements and schedules listed in the table of contents are presented for supplementary analysts purposes and are not a required part of the combined financial statements of the City of Huntington Beach, California. The information has been subjected to the auditing procedures applied in the examination of the combined financial statements and, in our opinion, except as stated In the second and third preceding paragraphs, is stated fairly in all material respects in relation.to the combined financial statements taken as a whole. RD- September 25, 1981, except as to the second paragraph of note 10, which is as of November 23, 1981. r �■■i r � �■ r r r r r �■ r r r r r r r r Combined Financial Statements CITY OF HUNTINGTON BEACH EXHIBIT 1 Combined Balance Sheet - All Fund Types and Account Groups June 30, 1981 Governmental Fund Types Proprietary Fund Types Fiduciary Account Groups Fund Type General General Special Debt Enterprise Internal Expendable Fixed Long-Term Totals General Revenue Service Note 12 Service Trust Assets Debt Memo Only) Assets and Other Debts Cash and term deposits $5,745,407 11,922,252 44,802 4,902,145 4,900,348 1,462,475 -- -- 28,977,429 Accounts receivable, net 109,435 -- -- 337,357 -- -- -- -- 446,792 Property taxes receivable, net of allowance for uncollectible taxes 573,249 -- 27,191 -- -- -- -- -- 600,440 Notes receivable, net -- -- -- -- -- 872,267 -- -- 872,267 Interest receivable 94,557 190,076 1,175 81,278 80,405 -- -- -- 447,491 Other receivables -- -- -- 15,050 -- -- -- -- 15,050 Investments at cost which. - approximates market (Note 6) 109,811 -- -- -- -- -- -- -- 109,811 Due from redevelopment agency 184,150 -- -- -- -- -- -- -- 184,150 Due from other funds -- -- -- -- 13,722 -- -- -- 13,722 Due from other governmental units, net 890,094 1,571,026 -- -- -- -- -- -- 2,461,120 Prepaid expenses 85,568 -- -- -- -- -- -- -- 85,568 Deposits -- -- -- 32,269 -- -- -- -- 32,269 Amount available in debt service -- -- -- - 73,168 73,168 Amount to be provided for debt retirement -- -- -- -- -- -- -- 4,286,832 4,286,832 Amount to be provided for under 'financing leases (Note 4) -- -- -- -- -- -- -- 12,556,577 12,556,577 Leased facilities under financing leases (Note 4) -- -- -- -- - -- 13,913,304 -- 13,913,304 Property plant and equipment, net of allowance for depreciation -- -- -= 27,196,041 -- -- 18,563,761 -- 45,759,802 Restricted assets - cash and investments -- -- -- 405,504 -- -- -- -- 405,504 Total assets and other debits $7,792,271 13,683,354 73,168 32,969,644 4,994,475 2,334,742 32,477,065 16,916,577 111,241,296 See accompanying notes to combined financial statements 1 CITY OF HUNTINGTON BEACH EXHIBIT 1 Combined Balance Sheet - All Fund Types and Account Groups June 30, 1981 Governmental Fund Types Proprietary Fund Types Fiduciary Account Groups Fund Type General General Special Debt Enterprise Internal Expendable Fixed Long-Term Totals General Revenue Service Note 12 Service Trust Assets Debt TMemo Only Liabilities Cash overdraft $ -- 273,241 -- -- -- -- -- -- 273,241 Accounts payable 1,102,624 475,790 -- 286,646 18,331 -- -- -- 1,883,391 Accrued payroll 882,522 19,538 -- 122,196 989 -- -- -- 1,025,245 Insurance claims payable -- -- -- -- 2,006,876 -- -- -- 2,006,876 Deposits 420,738 4,439 -- 329,650 -- 170,169 -- -- 924,996 Due to other funds 13,185 -- -- 537 -- -- -- -- 13,722 Accrued interest payable -- -- -- 46,325 -- -- -- --. 46,325 Current installment of notes payable (Notes 8, 9) -- -- -- 56,725 -- 21,692 -- -- 78,417 Deferred rental & other income (Note 4) 578,787 -- -- -- -- 32,843 -- -- 611,630 Current liabilities (payable from restricted assets) -- -- -- -- -- -- -- -- -- Current installment of bonds, payable (Note 7) -- -- -- 140,000 -- -- -- -- 140,000 Accrued interest payable -- -- -- 14,000 -- -- -- -- 14,000 Obligation under financing leases -- -- -- -- -- -- -- 12,556,577 12,556,577 Bonds, net of current installment (Note 7) -- -- -- 1,626,000 -- -- -- 4,360,000 5,986,000 Notes payable, net of current installment (Notes 8, 9) -- -- -- 2,355,136 -- -- -- -- 2,355,136 Other 8,488 -- -- -- -- -- -- -- 8,488 Total liabilities $3,006,344 773,008 -- 4,977,215 2,026,196 224,704 -- 16,916,577 27,924,044 See accompanying notes to combined financial statements 2 �r r r■ rr ri r rr r� it rr rr r r r r r rr it r CITY OF HUNTINGTON BEACH EXHIBIT 1 Combined Balance Sheet - All Fund Types and Account Groups June 30, 1981 Governmental Fund Types Proprietary Fund Types Fiduciary Account Groups Fund Type General General Special Debt Enterprise Internal Expendable Fixed Long-Term Totals General Revenue Service Note 12 Service Trust Assets Debts Memo Only) Fund Equity Contributed capital: In aid of construction $ -- -- 15,121,693 -- -- -- -- 15,12.1,693 From general fund -- -- 1,359,932 -- -- -- 1,359,932 -- -- -- -- -- -- -- 16 481 625 investment in general fixed assets -- -- -- -- -- 32,477,065 Retained earnings: Reserved for revenue bond retirement -- -- -- 251,504 -- -- -- -- 251,504 Reserved for future insurance claims -- -- -- -- 750,000 -- -- -- 750,000 Unreserved -- -- -- 11,259,300 2,218,279 -- -- -- 13,477,579 Fund balance: Reserved for encumbrances 928,446 2,103,649 -- -- -- -- -- -- 3,032,095 Reserved for amounts due beyond one year 753,869 437,500 -- -- -- -- -- -- 1,191,369 Reserved for reimbursement agreements -- 632,469 -- -- -- -- -- -- 632,469 Reserved for disaster relief -- 115,102 -- -- -- -- -- -- 115,102 Unreserved: Designated For: Vacation and sick leave 2,050,501 -- -- -- -- -- -- - 2,050,501 . Special enforcement 25,000 -- -- -- -- -- -- 25,000 Future development -- 78,226 -- -- -- -- -- -- 78,226 Undesignated (Note 11) 1,028,111 9,543,400 73,168 - - 2,110,038 -- -- 12,754,717 Total retained earnings/fund balance 4,785,927 12,910,346 73,168 11,510,804 2,968,279 2,110,038 -- -- 34,358,562 Total fund equity 4,785,927 12,910046 73,168 27,992,429 2i368,279 2,110,038 32,477,065 -- 83,317,252 Commitments and contingencies (Notes 4, 5, 10, 11) -- -- -- -- -- -- -- -- Total liabilities and fund equity $7,792,271 13�683+354 73,168 32,969,644 4,994+475 2,334+742 32,477,065 16,916,577 111,241,296 See accompanying notes to combined financial statements 3 MEN CITY OF HUNTINGTON BEACH A nual. FISCAL YEAR • 0 ENDED JUNE 309 1981F. tial . . Rep rt 0 DEPT. OF ADMINISTRATIVE SERVICES Frank B. Arguello ,Chief HUNTINGTON BEACH CITY OF HUNTINGTON BEACH ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Letter of Transmittal Elected City Officals Departments of the City Exhibit Page FINANCIAL SECTION Accountants' Report Combined Financial Statements: Combined Balance Sheet - All Fund Types and Account Groups I 1 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds II 4 Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Governmental Fund Types III 6 Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types IV 10 Combined Statement of Changes in Financial Position - All Proprietary Fund Types V 12 Notes to Combined Financial Statements 14 Combining Financial Statements Statement Page Special Revenue Funds: Combining Balance Sheet I 25 Combining Statement of Revenues, Expenditures and Changes in Fund Balance II 21 _ Combining Statement of Revenues, Expenditures and Change in Fund Balance - Budget and Actual 111 29 Schedule Page Statistical Section (continued) . Statement of Future water Revenue Bond Requirements by Year Based on Outstanding Debt VI 53 Huntington Beach Public Facilities Corporation Statement of Bonded Debt VII 54 Huntington Beach Public Facilities Corporation Statement of Future Debt Requirements by Year Based on Bonded Debt Vlll 55 Parking Authority of the City of Huntington Beach Statement of Bonded Debt IX 56 Parking Authority of the City of Huntington Beach Statement of Future Debt Requirements by Year Based on Bonded Debt X 56 City of Huntington Beach Miscellaneous Statistics XI 57 Huntington Beach Public Facilities Corporation Exhibit Page Accountants' Report Financial Statements: Combined Balance Sheet I I Combined Statement of Earnings and Retained Earnings II 2 Combined Statement of Changes in Financial Position 111 3 Notes to Combined Financial Statements 4 Parking Authority of the City of Huntington Beach Accountant's Report Financial Statements: Balance Sheet 1 1 Statements of Earnings and Retained Earnings 11 2 Statements of Changes in Financial Position 111 3 Notes to Financial Statements 4 Statement Page Combinina Financial Statements (continued) Debt Service Funds: Combining Balance Sheet IV 35 Combining Statement of Revenues, Expenditures and Changes in Fund Balances V 36 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Vi 37 Enterprise Funds: Combining Balance Sheet VII 38 Combining Statement of Revenues, Expenses and Changes in Retained Earnings Vill 40 Combining Statement of Changes in Financial Position IX 41 Internal Service Funds: Combining Balance Sheet. X 43 Combining Statement of Revenues, Expenses and Changes in Retained Earnings XI 44 Combining Statement of Changes in Financial Position X11 45 Expendable Trust Funds: Combining Balance Sheet X111 46 -Combining Statement of Revenues, Expenditures and Changes in Fund Balances XIV 47 Statistical Section Schedule Page Statement of General Fund Revenues - Other than Property Taxes - Last Ten Fiscal Years 1 48 Statement of General Fund Expenditures - Last Ten Fiscal Years 11 49 Statement of Assessed Value, Debt Limit and Ratio of General Obligation Bonded Debt to Assessed Value and Per Capita - Last Ten Fiscal Years 111 50 •Statement of Tax Delinquencies and Impounds - Last Ten Fiscal Years IV 51 Statement of Future General Obligation Bonded Debt Requirements by Year Based on Bonded Debt V 52 OFFICE OF THE CHIEF OF ADMINISTRATIVE SERVICES FRANK B. ARGUELLO, CHIEF Mr. Charles M. Thompson City Administrator City of Huntington Beach Dear Mr. Thompson: Submitted herewith is the Department of Administrative Services Annual Report containing the City's financial statements for the fiscal year ended June 30, 1981. The comprehensive report encompasses all funds, reflects the results of all financial transactions, and represents the culmination of accounting processes performed during the fiscal year. General Fund Revenues and transfers from Other Funds for general fund purposes totaled $42,390,145 In FY-1981, an increase of $6,617,850, or 15.6% when compared to FY-1980. The revenue from various sources and the changes as compared with FY-1980 are as follows: Percent Change from FY-1980 Source Amount of Total Amount Percent General Property Taxes $11,250,790 26.5% $1,926,121 17.1% Other Local Taxes 16994,338 40.1 2,437,008 14.3 Licenses and Permits 2:984,303 7.0 386,349 12.9 Fines and Forfeitures (1) 1,526,072 3.6 1,127,195 73.9 Use of Money and Property 2,552,637 6.0 731,937 28.7 Revenue from Other Agencies 4,495,328 10.6 620,565 13.8 Charges for Current Services 1,382,055 3.3 223,761 16.2 Other Revenue 366,125 .9 275,976 75.4 Transfers from Other Funds (1) 838,497 2.0 (1,m,062) (132.5) Total $42,390,145 100.0% $6 617,850 15.6% (1) Fines and Forfeitures includes traffic fines which were included in Transfers from Other Funds in FY-1980. Gross expenditures and encumbrances for general -fund purposes totaled $41,422,839 in FY-1981 -- an increase of $6,116,426 or 14.2% over FY-1980. The undesignated general fund balance decreased from $1,972,908 in FY-1980 to $1,028,111 in FY-1981, a decrease of $944,797 or 47.9%. The City continues to fund accrued employee vacation and sick leave which increased from $1,225,205 in FY-1980 to $2,050,501 in FY-1981, an increase of $825,296 or 67.4%. Assessed valuation increased by $90,377,031 to $1,074,304,701 in FY-1981 -- a 9.2E increase. In FY-1982 it is anticipated the assessed valuation will increase to $5,219,684,140, an increase of $4,145,379,439 or 385.9%. A comparison of assessed valuation over the last three years with anticipated FY-1982 assessed valuation is as follows: Assessed Change from Prior Year Fiscal Year Valuation Amount Percent * 1982 $5,219,684,140 $4,145,379,439 385.9E 1981 1,074,304,701 90,377,031 9.2 1980 983,927,670 152,144,050 18.3 1979 831,783,620 (22,538,125) (2.6) * The method used to determine Assessed Valuation has been changed for FY-1982. Previously, assessed valuation was 25% of market value. The new method is 100E of market value. Therefore, to compute the change from the prior year, the FY-1981 assessed valuation should be stated at $4,297,218,804 ($1,074,304,701 x 4). The change then would be $922,465,336 or 21.5E. Outstanding general obligation bonds as of June 30, 1981 totaled $4,360,000. This is comprised in total of 1963 Park Bonds. The 1955 Water Bonds were retired in August, 1980. There is, as of June 30, 1981, $1,766,000 outstanding on the 1963 Water Revenue Bond but this does not represent a general obligation of the City of Huntington Beach. The tax rate necessary to provide funds for voter approved indebtedness totaled $.1854 per $100 of assessed valuation. This is in addition to the City's share of the overall $4.00 per $100 of assessed valuation permitted as a result of the passage and implementation of Proposition 13. The method of determining assessed valuation has changed for the FY-1982. The tax rate necessary to provide funds for the voter approved debt will be $0.04635 per $100 of assessed valuation. This, in addition to the City's portion of the overall tax rate of $1.00 per $100 of assessed value, will be the City's_ total property tax revenue. Comparative data for the City's Water Utility operation for the past two years is as follows: 1981 1980 Total operating revenue $5,814,133 $5,451,565 Net income 1,098,393 1,674,765 A supplemental information section has been included in this report which contains comprehensive statistical data. Such data is presented-so as to relate physical, economic, social, and political characteristics of our City which should give the readers of this report a more broad and complete understanding of the City and its financial operations. This financial report has been changed to report in conformance with Statement I of the National Council on Governmental Accounting printed by the Municipal Finance Officers' Association of the United States and Canada dated March, 1979• In accordance with Section 616 of the City Charter, the City Council shall employ at the beginning of each fiscal year, an independent certified public accountant who should examine all the City's accounts and the results reported to the City Council. The opinion of Peat, Marwick, Mitchell and Company, Certified Public Accountants, is included in this report. I wish to express my appreciation to the members of the Administrative Services Department without whose dedicated efforts this report would not be possible. In addition, I would express my appreciation to you and the City Council for the continuing support and interest in planning and conducting the fiscal affairs of this city in a responsible and progressive manner. Respectfully �submitted, Frank B. Arguello Chief of Administrative Services CITY OF HUITINGTON BEACH ELECTED OFFICIALS CITY COUNCIL Ruth S. Bailey Councilperson Ruth E. Finley Mayor Jack Kelly Councilperson Robert P. Mandic, Jr. Councilperson Donald A: MacAllister Councilperson Ronald R. Pattinson Mayor Pro Teat John A. Thomas Councilperson OTHER Gail Hutton City Attorney Warren G. Hall City Treasurer Alicia M. Wentworth City Clerk DEPARTMENTS OF THE CITY Charles W. Thompson City Administrator Frank B. Arguello Chief of Administrative Services James Palin Development Services Director Paul E. Cook Director of Public Works Vincent G. Moorhouse Community Services Director Raymond C. Picard Fire Chief Earle W. Robitaille Po►ice Chief CITY OF HUNTINGTON BEACH EXHIBIT II Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds Year Ended June 30, 1981 Governmental Fund Types Fiduciary Fund Types Special Debt Expendable Total General Revenue Service Trust (Memo only) Revenues: General property taxes (Note 3) $11,250,790 -- 514,217 -- 11,765,007 Other local taxes 16,994,338 -- -- -- 16,994,338 Licenses and permits 2,984,303 1,879,380 -- -- 4,863,683 Fines and forfeitures 1,526,072 -- -- -- 1,526,072 Use of money and property 2,552,637 1,481,445 -- 262,958 4,297,040 Revenue from other agencies 4,495,328 7,698,023 -- -- 12,193,351 Charges for current services 1,382,055 106,909 -- -- 1,488,964 Contributions -- -- -- 257,846 257,846 Other revenues 366,125 8,124 -- -- 374,249 Total revenues 41,551,648 110 73,881 514,217 520,804 53,760,550 Expenditures: Administrative 479,481 9,773 -- -- 489,254 Support 4,792,744 73,361 -- -- 4,966,105 Community services 5,337,407 303,190 -- -- 5,640,597 Public safety 18,916,394 1,061,231 -- -- 19,977,625 Highways and streets 6,077,756 3,174,106 -- -- 9,251.862 Drains and sewers 368,901 1,609,262 -- -- 1,978,163 Park development -- 963,355 -- -- 963,355 Paid to participants in employee deferred compensation plan -- -- -- 13,186 13086 Reimbursement agreements -- 430 -- -- 430 .Loan subsidies -- -- -- 104,754 104,754 Grants -- 2,379,240 -- -- 2,379,240 Miscellaneous 4,521,710 33,704 442 -- 4,555,856 Redemption of matured bonds -- -- 230,000 -- 230,000 Interest -- '- 272,087 -- 272,087 Total expenditures 40,494,393 9,607,652 502,529 117,940 50,722,514 4 r �r rr r � � r �■r � � �r r �■■ �r �■■ �r r r■ �r rr r �r �■ rr r r rr r �r r■� rr r r � rr rr r r� CITY OF HUNTINGTON BEACH EXHIBIT II Combined Statement of Revenues, Expenditures and Changes in Fund Balances - All Governmental Fund Types and Expendable Trust Funds Year Ended June 30, 1981 Governmental Fund Types Fiduciary Fund Type Special Debt Expendable Total General Revenue Service Trust (Memo only) Excess of revenues over expenditures $1,057,255 1,566,229 11,688 402,864 3,038,036 Other financing sources (uses): Operating transfers in (out) (615,004) 615,004 -- -- -- Excess of revenue and operating transfers in over expenditures and operating transfers out 442,251 2,181,233 11,688 402,864 3,038,036 Fund balance at June 30, 1980 as previously reported 3,382,263 9,090,736 82,667 1,357,174 13,912,840 Cumulative effect of change in accounting principal (Note 2) 962,890 1,965,713 -- -- 2,928,603 Fund balance, as adjusted June 30, 1980 4,345,153 11,056,449 82,667 1,357,174 16,841,443 Equity transfers in (out) (1,477) (327,336) (21087) 350,000 -- Fund balance at June 30, 1981 $4,785,927 12,910,346 73,168 2,110,038 19,879,419 ,See accompanying notes to combined financial statements 5 CITY OF HUNTINGTON BEACH EXHIBIT III Combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Governmental Fund Types Year Ended June 30, 1981 General Fund Special Revenue Funds Variance - Variance - Favorable Favorable Budget Actual (Unfavorable) Bum Actual (Unfavorable) Revenues: General property taxes $11,298,626 $11,250,790 $(47,836) $ -- $ -- $ -- Other local taxes 16,175,000 16,994,338 819,338 -- -- Licenses and permits 3,047,108 2,984,303 (62,805) 1,789,000 1,879,380 90,380 Fines and forfeitures 1,367,000 1,526,072 159,072 -- -- -- Use of money and property 2,614,770 2,552,637 (62,133) 1,233,200 1,481,445 248,245 Revenue from other agencies 4,031,160 4,495,328 464,168 11,983,544 7,698,023 (4,285,521) Charges for current services 1,531,890 1,382,055 (149,835) 24,000 106,909 82,909 Other revenues 45,400 366,125 320,725 2,394_,609 8,124 (2,386,485) Total revenues 40,110,954 41,551,648 1,440,694 17,424,353 11,173,881 (6,250,472) Expenditures: Administrative 433,042 480,512 (47,470) 13,446 9,773 3,673 Support 5,106,597 4,913,560 193,037 114,889 76,810 38,079 Community services 5,232,126 5,434,608 (202,482) 564,671 456,828 107,843 Public safety 19,242,710 19,007,983 234,727 1,611,639 1,499,060 112,579 Highway and streets 6,547,195 6,538,397 8,798 12,614,892 4,014,826 8,600,066 Drains and sewers 399,247 375,446 23,801 2,571,861 1,726,188 845,673 Park development -- -- -- 2,972,273 1,212,453 1,759,820 Reimbursement agreements -- -- -- 10,750 430 10,320 Grants -- -- -- 5,933,595 2,681,229 3,252,366 Miscellaneous 6,221,714 4,672,333 1,549,381 1,844,357 33,704 1,810,653 Total expenditures 43,182,631 41,422,839 1,759,792 28,252,373 11,711,301 16,541,072 6 rr r� rr r r r rr rr rr rr rr r� rr rr rr r ■r rr rr CITY OF HUNTINGTON BEACH EXHIBIT III Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Governmental Fund Types Year Ended June 30, 1981 General Fund Special Revenue Funds Variance - Variance - Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Excess (deficiency) of revenue over expenditures (3,071,677) 128,809 3,200,486 (10,828,020) (537,420) 10,290,600 Other financing: Operating transfers in (out) 951,000 (615,004) (1,566,004) (1,020,000) 615,004 1,635,004 Excess (deficiency) of revenue and operating transfers in over expenditures and operating transfers out (2,120,677) (486,195) 1,634,482 (11,848,020) 77,584 11,925,604 Fund balance June 30, 1980 as previously reported 3,382,263 3,382,263 -- 9,090,736 9,090,736 -- Cumulative effect of change in accounting principle (Note 2) 962,890 962,890 -- 1,965,713 1,965,713 -- Fund balance, at June 30, 1980, as adjusted 4,345,153 4,345,153 -- 11,056,449 11,056,449 -- Equity transfers in (out) -- (1,477) (1,477) -- (327,336) (327,336) Fund balance at June 30, 1981 budgetary basis 2,224,476 3,857,481 1,633,005 (791,571) 10,806,697 11,598,268 Encumbrances outstanding at June-30, 1981 928,446 928,446 -- 2,103649 2,103,649 -- Fund balance at June 30, 1981 GAAP basis $3,152,922 $4 7S, 5,927 $1,633,005 $1,312,078 $12,910,346 $11,598,268 See accompanying notes to combined financial statements 7 HUNTINGTON BEACH EXHIBIT III Comc;,ed Statement of Revenues, Expenditures and C"anges in Fund.Balances - Budget and Actual Governmental Fund Types Year Ended June 30, 1981 Debt Service Funds Total Variance - Variance - Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: General property taxes $483,915 $514,217 $30,302 $11,782,541 $11,765,007 $0 7,534) Other local taxes -- -- -- 16,175,000 16,994,338 81g,338 Licenses and permits -- -- 4,836,108 4,863,683 27,575 Fines and forfeitures -- -- -- 1,367,000 1,526,072 159,072 Use of money and property -- -- -- 3,847,970 4,034,082 186,112 Revenue from other agencies -- -- -- 16,014,704 12,193,351 (3,821,353) Charges for current services -- -- 1,555,890 1,488,964 (66,926) Other revenues -- -- -- 2,440,009 374,249 (2,065,760) Total revenues 483,915 514,217 30,302 58,019,222 53,239,746 (4,779,476) Expenditures: Administrative -- -- -- 446,488 490,285 (43,797) Support -- -- -- 5,221,486 4,990,370 231,116 Community services -- -- -- 5,796,797 5,891,436 (94,639) Public safety -- -- -- 20,854,349 20,507,043 347,306 Highways and streets -- -- -- 19,i62,087 10,553,223 8,608,864 Drains and sewers -- -- 2,971,108 2,101,634 869,474 Park development -- -- -- 2,972,273 1,212,453 1,759,820 Reimbursement agreements -- -- -- 10,750 430 10,320 Grants -- -- -- 5,933,595 2,681,229 3,252,366 Miscellaneous 600 442 158 8,066,671 4,706,479 3,360,192 Redemption and matured bonds 230,000 230,000 -- 230,000 230,000 -- !nterest 271,988 272,087 (99) 271,988 272,087 (99) Total expenditures 502,588 502,529 59 71,937,592 53,636,669 18,300,923 8 ■■� � r r � a■ r � a� a r r r � a r a� a� � CITY OF HUNTINGTON BEACH EXHIBIT III Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Governmental Fund Types Year Ended June 30, 1981 Debt Service Funds Total Variance - Variance - Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Excess (deficiencies) of revenues over expenditures $0 8,673) $11,688 $30,361 $0 3,918,370) $ (396,923) $13,521,447 Other financing: Operating transfers in (out) -- -- -- (62,000) 69,000 Excess (deficiencies) of revenues and operating transfers in over expenditures and operating transfers out (1 ,673) 11,688 30,361 (13,987,370) 396 92 .) +3,590,447 Fund balance at June 30, 1980 as previously reported 82,667 821667 -- 12,555,666 12,555,666 -- Cumulative effect of change in accounting principle -- -- -- 2,928,603 2,928,603 -- Fund balance at June 30, 1980, as adjusted 82,667 82,667 -- 15,484,269 15,484,269 -- Equity tranfers in (out) -- (21,187) (21,187) -- (350,000) (350,000) Fund balance at June 30, 1981 budgetary basis 63,994 73,168 9,174 1,496,899 14,737,346 13,240,447 Encumbrances outstanding at June 30, 1981 -- -- -- 3,032,095 3,032,095 -- Fund balance at June 30, 1981 GMP basis $63,994 $73,168 $ 9,174 $ 4,528,994 $17,769,441 $13,240,447 See accompanying notes to combined financial statements 9 CITY OF HUNTINGTON BEACH EXHIBIT IV Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types Year Ended June 30, 1981 Enter rise Internal Total (Note 12 Service (Memo Only) Operating Revenues: Charges for current services $5,669,115 1,854,176 7,523,291 Use of money and property 170,342 -- 170,342 Other operating revenue 145,018 -- 145,M Total operating revenues 5,984,475 1,854,176 7,838,651 Operating Expenses: Source of supply 1,078,819 -- 1,078,819 Pumping expense 1,030,123 -- 1,030,123 Water treatment 32,671 -- 32,671 Transmission and distribution 573,686 -- 573,686 Administrative and general 1,065,301 113,955 1,179,256 Contribution to general fund in lieu of taxes 923,667 -- 923,667 Depreciation 784,569 -- 784,808 Workers' compensation claims -- 654,055 654,055 Employee medical claims -- 784,808 784,569 Liability Claims -- 199,579 199,579 Other -- 5,774 5,774 Total operating expenses $5,488,836 1,758,171 7,247,007 10 CITY OF HUNTINGTON BEACH EXHIBIT IV Combined Statement of Revenues, Expenses and Changes in Retained Earnings - All Proprietary Fund Types Year Ended June 30, 1981 Enter rise Internal Total Note 12 Service (Memo Only) Operating income 495,639 96,005 591,644 Non-operating Revenue (Expense): Interest income 638,880 559,861 1,198,741 Other revenue 194,667 -- 194,667 Interest expense (209,345) -- (209,345) Total non-operating revenue 624,202 559,861 1,184,063 Net income 1,119,841 655,866 1,775,707 Retained earnings at June 30, 1980 10,381,016 2,312,413 12,693,429 Increase in reserve for retirement of revenue bonds 9,947 -- 9,947 Retained earnings at June 30, 1981 $11,510,804 8,279 14,479�083 See accompanying notes to combined financial statements 11 CITY OF HUNTINGTON BEACH EXHIBIT V Combined Statement of Changes in Financial Position All Proprietary Fund Types Year Ended June 30, 1981 Enter rise Internal Total Note 12 Service (Memo Only) Sources of Working Capital: Operations: Net income $1,119,841 655,866 1,775,707 Item not requiring working capital: Depreciation 784,569 -- 784,569 Working capital provided for by operations 1,904,410 655,866 2,560,276 Increase in note payable 526,817 -- 526,817 Increase in reserve for revenue bond retirement 9,947 -- 9,947 Total sources of working capital 2,441,174 655,866 3,097,040 Uses of Working Capital: Addition of fixed assets 1,943,975 -- 1,943,975 Increase in restricted assets - cash with fiscal agents 14,038 -- 14,038 Reclassification of note payable 38,678 -- 38,678 Reclassification and redemption of long-term bonds payable 252,047 -- 252,047 Total uses of working capital 2,248,738 -- 2,248,738 Net increase in working capital $ 192,436 655,866 848,302 12 r� rr rr rr rr rr rr rr rr rr rr r r rr rr rr rr rr rr CITY OF HUNTINGTON BEACH EXHIBIT V Combined Statement of Changes in Financial Position All Proprietary Fund Types Year Ended June 30, 1981 Enter rise Internal Total Note 12 Service (Memo Only Changes in Components of Working Capital: Increase (decrease) in current assets: Cash and long term deposits $239,735 841,331 1,081,066 Accounts receivable, trade (net) (7,843) -- (7,843) Accounts receivable, other (net) 2,426 __ 2,426 Interest receivable 16,166 (14,172) 1,994 Due from other funds -- 964 964 Total 250,484 828,123 1,078,607 Decrease (increase) in current liabilities: Accounts payable 116,192 (1,771) 114,421 Accrued payroll 96 96 Accrued expenses (95,857) -- (95,857) Customer deposits (34,370) -- (34,370) Due to other funds (63) -- (63) Accrued Interest payable 447 -- 447 Matured interest payable 5,462 -- 5,462 Insurance claims payable -- (170,582) (170,582) Increase in current portion of notes and bonds payable (49,859) -- (49,859) Total (58,048) (172,257) (230,305) Net increase in working capital $192,436 655LB66 848,302 See accompanying notes to combined financial statements 13 CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS June 30, 1981 Note (1) Summary of Significant Accounting Policies The following is a summary of the significant accounting policies of The City of Huntington Beach, California (City). A. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenue and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are spent and the means by which spending activities are controlled. The various funds are grouped in the financial statements in this report into six generic fund types and three broad fund categories as follows: GOVERNMENTAL FUNDS General Fund The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than_ special assessments and expendable trusts) that are restricted to expenditures for specified purposes. Debt Service Funds Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. PROPRIETARY. FUNDS Enterprise Funds Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises and where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. 14 CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS Internal Service Funds Internal Service Funds are used to account for the financing of services provided by one department to the other departments of the City on a cost reimbursement basis. FIDUCIARY FUNDS Expendable Trust Funds Expendable Trust Funds are used to account for assets held by the City for individuals, private organizations or other governments. Expendable Trust Funds are accounted for in essentially the same manner as governmental funds. B. FIXED ASSETS AND LONG-TERM LIABILITIES AND RECEIVABLES The accounting and reporting treatment applied to the fixed assets and long-term liabilities associated with a fund are determined by its measurement focus. All governmental funds and Expendable Trust Funds are accounted for an a spending or "financial flow" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance (net current assets) is considered a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period. Fixed assets used in governmental fund type operations (general fixed assets) are accounted for in the General Fixed Asset Group, rather than in governmental funds. Public domain ("infrastructure") general fixed assets consisting of certain improvements other than buildings, are not capitalized along with other general fixed assets. No depreciation has been provided on general fixed assets. Long-term liabilities expected to be financed from governmental funds are accounted for in the General Long-Term Debt Account Group, not in the governmental funds. The two account groups are not "funds." They are concerned only with the measurement of financial position. They are not involved with measurement of results of operations. Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets, in spite of their spending measurement focus. Special reporting treatments are used to indicate, however, that they should not be considered "available spendable resources," since they do not represent net current assets. Recognition of governmental fund type revenues represented by noncurrent receivables is deferred until they become current receivables. Noncurrent portions of long-term loans receivable are offset by fund balance reserve accounts. 15 CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by noncurrent liabilities. Since they do not affect net current assets, such long-term amounts are not recognized as governmental fund type expenditures or fund liabilities. They, are instead reported as liabilities in the General Long-Term Debt Account Group. All proprietary funds are accounted for on a cost of services or "capital maintenance" measurement focus. This means that all assets and all liabilities (whether current or noncurrent) associated with their activity are included on their balance sheets. Their reported fund equity (net total assets) is segregated into contributed capital and retained earnings components. Proprietary fund type operating statements present increases (revenues) and decreases (expenses) in net total assets. The accounts of the Water Utility Fund include $31,113,131 of property and equipment, less $7,016,370 accumulated depreciation. Of these assets, approximately $8,373,000 represent water service assets which have been donated to the City by independent contractors prior to June 30, 1968. Such donated assets have been recorded at values estimated by City personnel. During 1977 and 1978 the City conducted an inventory of fixed assets of the Water Utility Fund. This inventory resulted in the recording of approximately $1,894,000 in water service assets that were previously unrecorded. The City's evaluation of its water utility fixed assets is still continuing. Depreciation of fixed assets is charged to operations using the straight-line method, based on the useful life of an asset within a particular group as follows: Asset Group Life Production and pumping plant 15-40 years Transmission and distribution plant 25-75 years General plant 10-30 years Transportation equipment 6-10 years The Meadowlark Golf Course property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets. C. Basis of Accounting Basis of accounting refers to the recognition of revenues and expenditures or expenses in the accounts and the reporting of revenues and expenditures in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. 16 �r r rr r r rr r rr rr rr � rr r r r �r rr rr r CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS All governmental funds and Expendable Trust Funds are accounted for using the modified accrual basis of accounting. Their revenues are recognized when they become measurable and available as net current assets. Expenditures are generally recognized under the modified accrual basis of accounting when.the related fund liability is incurred. Exceptions to this general rule include: (1) accumulated unpaid vacation, sick leave, and other employee amounts which are not accrued; and (2) principal and interest on general long-.term debt which is recognized when due. All proprietary funds are accounted for using the accrual basis of accounting. Revenues are recognized when earned, and expenses are recognized when incurred. D. Budgetary Process Annual budgets adopted by the City Council provide for the general operations of the City. Revenues for the Special Revenue Funds..are budgeted by entitlements and grants; expenditures ind transfers are budgeted based upon available fund resources. The modified accrual basis of accounting is employed in the preparation of the-budgetary information. Encumbrances are thus included with expenditures for comparison with budget data but not in the combined statement of Revenues, Expenditures and Changes in Fund Balance. Expenditures in that statement wi11 be less than expenditures reported in the combined Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual by the amount of encumbrances outstanding at June 30, 1981. These encumbrances are subtracted from the fund balances in the later statement so the ending fund balance in the two statements will be equal. E. Encumbrances -Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded In order to reserve that portion of the applicable appropriation, is employed as a budgetary control in the General and Special Revenue Funds. Encumbrances outstanding at year end are reported as reservations of fund balances since they do not constitute expenditures or liabilities. F. Investments Investments are stated at cost, which approximate market value. Investments generally consist of federal government-backed securities, bankers acceptances, and municipal securities. G. Vacation and Sick Leave It is the policy of the City to record the cost of vacation and sick leave when paid. At June.30, 1981 the total unrecorded liability for vacation and sick leave accumulated by City employees was approximately $2,154,000. In the General Fund, fund balance has been partially designated for this amount. The liability has been recorded in the proprietary funds. 17 CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS H. Pension Plan Substantially all City employees participate in the Public Employees Retirement System (PERS) administered by the State of California. The total pension expense recognized by the City for the fiscal year ended June 30, 1981 was approximately $5,042,460. At June 30, 1981, the excess of the actuarially computed value of vested benefits over available assets, if any, was not available. J. Deferred Employee Compensation The City has a deferred compensation plan whereby eligible City employees may elect to defer a portion of their earnings for federal income tax purposes. The deferred compensation plan has been approved by the Internal Revenue Service (Service). The Service stipulated in its approval that legal title to the deferred campensation funds, together with any interest thereon, must rest with the City. For purposes of financial statement presentations, these deferred compensation funds have been treated as a separate Expendable Trust Fund of the City. K. Total Columns an Combined Financial Statements Total columns on the Combined Financial Statements are captioned memorandum (memo) to Indicate they are presented only to facilitate financial analysis. Data in these columns do not present financial position, results of operations, or changes in financial position in conformity with generally accepted accounting principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been made in the aggregation of this data. L. Operational Reserve Fund The City has established an Operational Reserve Fund (Special Revenue Fund) under Article XIIIB Section 5 of the State Constitution. The purpose of the fund is to provide sources of monies for operating expenditures in the event of future declines in revenues from the State and Federal government. Note (2) Accounting Change A change in accounting principle has been effected for fiscal year 1981 to conform with Statement 1 of the National Council on Governmental Accounting. In prior years, encumbrances were treated as expenditures and reserves were considered separate from fund balance. In accordance with Statement 1, encumbrances are reported as reservations of fund balances since they do not represent expenditures or liabilities. The cumulative effect of this change in accounting principle at June 30, 1980 was to increase beginning fund balance by $962,890 for the General Fund and $1,965,713 for the Special Revenue Funds. Beginning fund balances also include reserves reported separately at June 30, 1980. Certain other reclassifications were made to conform with Statement 1; the only significant revisions were the inclusion of the .Capital Outlay Fund as a Special Revenue Fund rather than a Capital Projects Fund and the combination of the Parking Meter and Traffic Safety Funds (previously Special Revenue Funds) with the General Fund. 18 rr �r �r r rr r� �r rr r� rr rr �r rr r r■ rr �r r rr CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS Note (3) Property Taxes Property taxes receivable as of June 30, 1981 and expected to be collected during fiscal year 1982 are recognized as revenues in 1981. Impound and delinquent taxes are recognized as revenue when received. Note (4) Leases The City has entered into two noncancelable lease and sublease agreements with the Huntington Beach Public Facilities Corporation (Corporation) for the Huntington Beach Civic Center complex and the Central Library. Under both agreements, the City is to pay all taxes, insurance, administrative and maintenance costs. Title to the site improvements will pass to the City at the termination of the leases. The City has determined that such leases are capital leases and require use of the financing method. Under the financing method, a transaction is regarded as an installment purchase whereby an asset and related liability are recorded.. Annual rental payments are treated as reductions of the liability. Advance rentals from the Corporation received by the City for lease of the site upon which the facilities are constructed are recorded as deferred rental income in the General Fund and are amortized over the term of the sublease. A description of each lease agreement is as follows: A. Civic Center This involves a noncancelable lease and sublease agreement with the Corporation for the Huntington Beach Civic Center. The City has leased the Civic Center site to the Corporation for $350,000 advance rental. The term of the lease is from January 15, 1972 to one week after the termination of the sublease. The Corporation has subleased the Civic Center site and Improvements to the City for $854,900 annual base rental. The sublease commenced July 1, 1974 for a term of 30 years or until all debts of the Corporation related to the Civic Center have been discharged, whichever comes first. B. Central Library This involves a noncancelable lease and sublease agreement with the Corporation for the Central Library. The City has leased the site to the Corporation for $300,000 advance rental. The term of the lease is from September 1, 1972 to one week after the termination of the sublease. The Corporation has subleased the Library site and improvements to the City for $399,000 annual base rental. The sublease commenced February 15, 1975 for a term of 30 years or until all debts of the Corporation related to the Library have been discharged, whichever comes first. 19 CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS Note (5) Commitments In 1969, the City entered into an operating lease agreement with the Huntington Beach Parking Authority for the lease of certain parking facilities. The term of the lease is 24 years or until all of the Parking Authority's 1968 revenue bonds have been retired. Annual base rental payments under the lease agreement are $170,050. Ownership of the parking facility will remain with the Parking Authority. Minimum aggregate rental commitments under the agreement are as follows: Year Amount 1982 $ 170,050 1983 170,050 1984 170,050 1985 170,050 1986 170,050 Remainder 1,020,300 $t,a70,550 The City has entered into agreements with contractors which generally provide for possible reimbursement to contractors of costs incurred in the construction of water, sewer, and drainage facilities. The extent of such reimbursement will generally be subsequent fees which are collected for other users of the facilities. The City recognizes fees as revenue as they are collected and charges subsequent payments to expenditures as they are made. Note (6) Investments In Marketable Securities- A summary of the City's marketable securities at June 30, 1981 Is as follows: . Approx. Interest Principal Market Description Rates Maturity Amount Cost Value General Fund City of Huntington Beach 1970 Park Bonds 6.0 1980 $25,000 $24,509 $15,750 Huntington Beach Parking Authority 1968 Parking Revenue Bonds 5-5.25 1984-1998 100,000 85,302 64,375 Total Investments $125,00o $109,811 $80,125 20 CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS Note (7) Outstanding Indebtedness A summary of bonded indebtedness outstanding as of June 30, 1981 is as follows: Bonds Bonds Bonds Date of Years of Rate of Amount of Outstanding Matured During Outstanding Issue Bonds Maturity Interest Orig. Issue June 30, 1980 Year June 30, 1981 General Obligation Bonded Debt Group: 1955 Water Bond 1955 1956-1962 5.50% $ 230,000 -0- -0- -0- 1963-1976 3.00 490,000 -D- -0- -0- 1977-1980 2.00 140,000 35,000 35,000 -0- Total 1955 Water Bond 860,000 35,000 35,000 -0- 1970 Park Bond 1970 1971-1972 5.00 225,000 -0- -0- -0- 1973-1974 5.25 255,000 -0- -0- -0- 1975-1977 5.50 440,000 -0- -0- -0- 1978-1983 5.75 1,150,000 625,000 195,000 430,000 1954-1995 6.00 3,930,000 3,930000 -0- 3,930,000 Total 1970 Park Bond 6,000,000 4,555,000 195,000 4,360,000 0,000 Total general obligation bonded debt $6,860,000 $4,590,000 $2 OL000 $4,360,000 Issue Revenue Bonds Water Utility Fund - 1963 Water Revenue Bond 1963 1963-1974 4.75% $700,000 $ -0- $ -0- $ -0- 1975-1978 3.25 460,000 -0- -0- -0- 1979-1981 3.30 400,000 270,000 130,000 140,000 1982-1983 3.40 300,000 295,000 -0- 295,000 1984-1993 3.50 i 8900,_000 1,425,000 000 1,331,000 Total Revenue Bonds (a)(b) $ 7, 50,000 $1,990,000 $224,000 $19766,000 Less current portion 140,000 Long term portion $1,626,000 21 CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS (a) The water revenue bonds do not represent a general liability of the City of Huntington Beach. (b) At June 30, 1981, there were $1,950,000 authorized but unused 1963 water revenue bonds. There are a number of limitations and restrictions contained in the various bond indentures. The City is in compliance with all limitations and restrictions. Note (8) Meadowlark Golf Course Note Payable In 1975, the City entered into an agreement to purchase the Meadowlark Golf Course from an independent party for a total purchase price of $3,200,000. Terms of the agreement called for an initial down payment of $928,000, with the remaining $2,272,000 in the form of a long-term 7 percent note. At June 30, 1981, the balance of the note was $1,885,044. A schedule of yearly principal and interest payments is as follows: Year Amount 1982-2001 $150,000 2002-2008 200,000 2009 115.703 In connection with the above purchase, the City has leased the golf course operation to an outside party for 34 years, at a minimum lease income of $150,000 annually through 2007 and a percentage of income based upon gross revenues for the years 2008-2009. As part of the Initial payment of $928,000, the County of/Orange contributed $600,000 upon the City's guarantee to use general City funds when and if necessary to ensure that Meadowlark Golf Course will be maintained as open space. The note payable is collateralized by future revenues and does not represent a general obligation of the City. Note (9) San Joaquin Reservoir In 1979 the City and several other local cities and water districts purchased the San Joaquin Reservoir. The City is paying a portion of the debt service for the 1961 construction of the reservoir based on its percentage ownership (13.1%). The construction bonds will be fully redeemed in 1992. Operating and improvement costs are also allocated to the owners In the same proportion. At June 30, 1981, the City's total principal payments. due under the purchase agreement are $526,817. Annual principal and interest payments for the next five years and the remainder of the agreement are as follows: 22 CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS Year Amount 1982 S 57,796 1983 56,361 1984 58,915 1985 57,318 1986 57,714 1987-92 355,006 Total Payments $643,tt0 The City has recorded its portion of the reservoir as a fixed asset in the Water Utility Fund. Note (10) Litigation At June 30, 1981, the City was defendant in several actions arising in the normal course of business. In several suits, the City was insured for public liability and property damage through various insurance policies aggregating up to $20,000,000 coverage for each occurrence. In the remainder of the suits, the City is self-insured. in the opinion of the City Attorney, the actual impact to the City upon resolution of the outstanding claims is insignificant and the self insurance funds are adequate. The City has been named as a defendant in a class action case seeking a refund of certain property taxes levied for the fiscal years ended June 30, 1979, June 30, 1980 and June 30, 1981 by the City. The complaint alleges that property taxes have been assessed and paid in excess of the limitations provided by Article XI11 A of the California Constitution (Proposition 13). The excess taxes in question are those property tax amounts authorized by city charter, and approved by the Voters, to partially offset the City's contribution to the Public Employees Retirement System (PERS) on behalf of the employees of the City of Huntington Beach. The class of persons whom the plaintiffs are attempting to represent has not yet been certified by the court; however, the purported class represents all real property owners within the City who paid property taxes during the years in question. The actions against the City are similar to other actions, to which this City is . not a party to, filed against other municipalities in the State. Final resolution of such cases is not expected for some time and several significant legal issues are yet to be resolved before proceeding further. Legal counsel for the City has determined that at this time there is no reasonable basis for concluding that the City will be required to refund the special property tax collected during the years ended June 30, 1979, 1980 and 1981. Note (11) Manpower Grant Fund The Manpower Grant Fund has an accumulated deficit of $189,825 at June 30, 1981. The deficit is primarily due to expenditures incurred which may or may not be fully reimbursed under the Comprehensive Employment and Training Act (CETA). Any amounts not fully reimbursed from the various grant funds must be reimbursed from the City's General Fund. 23 CITY OF HUNTINGTON BEACH NOTES TO COMBINED FINANCIAL STATEMENTS Note (12) Segments of Enterprise Activity The City has two Enterprise Funds which are run on the same basis as commercial enterprises -- water utility and Meadowlark Golf Course. The key financial data for the year ended June 30, 1981 for those funds are as follows: Water Meadowlark Utility Golf Course Total Operating revenues $ 5,814,133 18,528 5,832,661 Operating expenses: Depreciation 768,809 15,760 784,569 Other 4,704,267 -- 4,704,267 5,473,076 15,760 5,488,836 Operating Income $ 341,057 2,768 343,825 Net Income $ 1,098,393 211448 Ij119,841 Assets $29,762,991 3,206,653 32,969,644 Bonds and notes payable $ 2,114,139 1 86, 6.997 3,981,136 Fund Equity $26,717,145 1,275,284 27,992,429 Acquisition of fixed assets $ 1,943,975 -- 1,943,975 24 Combining Financial Statements This Page Left Blank Intentionally CITY OF HUNTINGTON BEACH STATEMENT I Special Revenue Funds Combining Balance Sheet June 30, 1981 Park Special Planned Federal Federal Acquisition Special Gas Library Local Revenue Manpower Other and Operational Capital Tax Service Sewer Drainage Sharing Grants Grants Development Reserve Outlay Total Assets Cash and term deposits $1,939,491 -- 2,258,070 1,763,069 9,207 -- 91,365 2,592,826 1,472,021 1,796,203 11,922,252 Interest receivable 31,594 -- 36,747 28,701 -- -- -- 38,867 23,955 30,212 190,076 Due from other governments, net 413,913 -- 595,186 -- 128,367 300,368 133,192 -- -- 1,571,026 Total assets S2 8,3 4,998 ZL12LO-02 1,791,770 9,207 128,367 3 1 7 2,764.0 1 49. 5,976 1,826,415 13,683,354 Liabilities and Fund Balance Liabilities: Cash overdraft -- -- -- -- -- 273,241 -- -- -- -- 273,241 Accounts payable 83,798 -- 31,632 -- 29,416 129,201 50,722 -- 151,021 475,790 Accrued payroll -- -- -- -- -- 15,535 3,357 646 -- -- 19,538 Deposits 1,035 -- 2,664 -- -- -- -- 740 -- -- 4,439 Total liabilities 84,833 34,296 -- -- 13 8,192 132,558 52,108 -- 151,021 773,008 See accompanying accountants' report. 25 CITY OF HU NTINGTON BEACH STATEMENT I Special Revenue Funds CommDining Balance Sheet June 30, 1981 Park Special Planned Federal Federal Acquisition Special Gas Library Local Revenue Manpower Other and Operational Capital Tax Service Sewer Drainage Sharing Grants Grants Development Reserve Outlay Total Fund balances: Reserved for: Encumbrances 588,767 -- 39,265 71,763 9,207 1,245 300,744 249,098 -- 843,560 2,103,649 Amounts due beyond one year -- -- 437,500 -- -- -- -- -- -- -- 437,500 Reimbursement Agreements -- -- -- 632,469 -- -- -- -- -- -- 632,469 Disaster Relief -- -- -- -- 115,102 -- -- -- 115,102 Unreserved: Designated for: Future development -- -- -- 31,226 . -- -- -- 47,000 -- -- 78,226 Undesignated 1,711,398 -- 2,378,942 1,056,312 -- 1 1 0 0) 156 6 1) 2,416,679 1 4 976 831,834 9,543,400 Total fund balances 2,300,165 -- 2,855,707 - 1 t 770 9.207 i 82 ) 259,175 2,712,777 1,495,976 1,675,394 12,910,346 Total liabilities and fund balances $2,384,998 $ -- $2 89, 0,003 $1,791,770 $ jLO $128,367 $391,733 $2,764,885 li ,495,976 $t,826,415 $13,683,354 See accompanying accountants' report. 26 CITY OF HUNTINGTON BEACH STATEMENT II Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes. in Fund Balances Year Ended June 30, 1981 Park Special Planned Federal Federal Acquisition Special Gas Library Local Revenue Manpower Other and Operational Capital Tax Service Sewer Drainage Sharing Grant Grants Development Reserve Outlay Total Revenues: Licenses and permits $ -- 73,003 639,814 509,005 -- -- -- 657,558 -- -- 1,879,380 Use of money s property 273,823 -- 335,004 221,535 59,213 -- -- 341,848 42,476 207,546 1,481,445 Revenue from other agencies 2,827,609 -- -- - 1,625,961 418,810 2,510,033 315,610 -- -- 7,698,023 Charges for current services -- -- -- -- -- -- -- 106,909 -- -- 106,909 Other revenues -- -- -- -- 8,124 -- -- -- -- -- 8,124 Total revenues 3,101,432 73,003 974,84 730,540 1,693,298 08,81() 2,510,033 1,421,925 42,476 207,546 11,173,881 Expenditures: Administrative -- -- -- - -- -- -- -- -- 9,773 9,773 Support -- -- -- -- -- -- -- -- -- 73,361 73,361 Ca munity services -- -- - -- -- 10,188 -- -- -- --. 293,002 303,190 Public safety -- -- -- -- 104,628 -- -- -- -- 956,603 1,061,231 Highways and street 2,383,375 -- -- -- -- -- -- -- -- 790,731 3,174,106 Drains and sewers -- -- 694,900 790,650 -- -- -- -- -- 123,712 1,609,262 Park development -- -- -- -- -- -- -- 963,355 -- -- 963,355 Reimbursement agreements -- -- 430 -- -- -- -- -- -- -- 430 Grants -- -- -- -- -- 451,825 1,927,415 -- -- -- 2,379,240 Miscellaneous -- -- -- - -- -- -- -- -- 33,704 33,704 Total expenditures $2,383,375 -- 695,330 790,650 114,816 451,825 1,927,415 7,415 963,355 -- 2,280,886 9,607,652 27 CITY OF HUNTINGTON BEACH STATEMENT II Sepcial Reveunue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year Ended June 30, 1981 Park Special Planned Federal Federal Acquisition Special Gas Library Local Revenue Manpower Other and Operational Capital Tax Service Sewer Drainage Sharing Grant Grants Development Reserve Outlay Total Excess (deficiency) of revenue over expenditures 718,057 73,003 279,488 (60,110) 1,578,482 (33,015) 582,618 458,570 42,476 (2,073,340) 1,566,229 Other financing sources operating transfers in (out) (697,488) (73,003) -- -- (1,692,966) -- -- -- 1,453,500 1,624,961 615,004 Excess (deficiency) of revenue and operating transfers in over expenditures and operating transfers out 20,569 -- 279,488 (60,110) (114,484) (33,015) 582,618 458,570 1,495,976 (448,379) 2,181,233 Fund balance at June 30, 1980 as previously reported 1,698,393 -- 2,523,879 1,541,711 429,406 (156,810) 3,893 2,014,939 -- 1,035,325 9,090,736 Cumulative effect of change In accounting principle 581,203 -- 52,340 310,169 124,032 -- -- 239,268 -- 658,701 1,965,713 Fund balance as adjusted June 30, 1980 2,279,596 -- 2,576,219 1,851,880 553,438 (156,810) 3,893 2,254,207 -- 1,694,026 11,056,449 Equity transfers in (out) -- -- -- -- (429,747) -= (327,336) -- -- 429,747 (327,336) Fund balance at June 30, 1981 $2,3000 65 -- 2 8, 55,707 1,791,770 9,207 (189,825) 2 L11J ILLILM 1,495,976 1,675,394 12,910,346 See accompanying accountants' report. 28 CITY OF HUNTINGTON BEACH STATEMENT III Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Year Ended June 30, 1981 Park Acquisition and Federal Revenue Sharing Federal Manpower Grant Other Grants Development Variance Variance Variance Variance Favorable Favorable Favorable Favorable Budget Actual .(Unfavorable) Budget Actual (Unfavorable) Budget Actual. (Unfavorable) Budget Actual (Unfavorable) Revenues: Licenses and permits $ -- -- -- -- -- -- - 1,117,000 657,558 (459,442) Use of money and property 90,000 59,213 (30,787) -- -- -- -- -- -- 243,200 341,848 98,648 Revenue from other agencies 1,542,000 1,625,961 83,961 972,527 418,810 (553,717) 4,841,W 2,510,033 (2,331,785) 1,439,699 315,6i0 (1,124,089) Charges for current services -- -- -- -- -- -- -- -- -- 24,000 106,909 82,909 Other revenues -- 8,124 8,124 -- -- -- -- -- -- 2,312,000 2,000 -- (2,312,000) Total revenues 1,632,000 1,693,Z98 61.2g8 972,527 418,810 5 1 ) 4,841,818 2,510,033 (2,331,785) 5,135,899 1,421,925 (3,713,974) Expenditures: Administrative -- -- -- -- -- -- -- Support -- -- -- -- -- -- -- -- -- -- -- -- Community services $ 10,970 10,961 9 -- -- -- -- -- -- -- -- -- Public safety 110,771 110,771 -- -- -- -- -- -- -- -- -- -- Highways and street 2,291 2,291 -- -- -- -- -- Drains and sewers -- -- -- -- -- -- -- Park development 20,000 -- 20,000 -- -- -- -- -- -- 2,952,273 1,212,453 1,739,820 Reimbursement agreements -- -- -- -- -- -- -- -- -- -- -- -- Grants -- 972,527 453,070 519,457 4,961,068 2,228,159 2,732,909 -- -- -- Miscellaneous -- -- -- -- -- -- -- -- -- -- -- -- Total expenditures 144,032 124,023 20,009 972,527 453,070 519.457 4,961,068 2,228,159 2,732,909 2,952,273 1,212,453 1,739,820 29 � � r � r �■ � r � r r � � r� � r � r � CITY OF HUNTINGTON BEACH STATEMENT ill Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Year Ended June 30, 1981 Park Acquisition and Federal Revenue Sharing Federal Manpower Grant Other Grants Development Variance Variance Variance Variance Favorable Favorable Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) Excess (deficiency) of revenue over expenditure 1,487,968 1,569,275 81,307 -- (34,260) (34,260) (119,250) 281,874 401,124 2,183,626 209,472 (1,974,154) Other financing sources (uses) (1,601,000) (1,692,966) (91,966) -- -- -- -- -- -- Excess (deficiency) of revenue and other sources over expenditure and other uses (113,032) 12 691) 10 6 ) -- (34,260) (34,260) (119,250) 281,874 401,124 2,183,626 209,472 (1,974,154) Fund balance at June 30, 1980 as previously reported 429,406 429,406 -- (156,810) (156,810) -- 3,893 3,893 -- 2,014,939 2,014,939 -- Cumulative effect of change in accounting principle 124,032 124,032 -- -- -- -- -- -- -- 239.268 239,268 -- Fund balance as adjusted June 30, 1980 553,438 553,438 -- (156,810) (156,810) -- 3,893 3,893 -- 2,254,207 2,254,207 -- Equity transfers in (out) -- 429 74 ) (429,747) -- -- -- -- (327,336) (327,336) -- -- Fund balance at June 30, 1981 budgetary basis 440,406 -- (440,406) (156,810) (191,070) (34,260) (115,357) (41,569) 73,788 4,437,833 2,463,679 (1,974,154) Add encumbrances outstanding June 30, 1981 9,207 9,207 -- 1,245 1,245 -- 300,744 300,744 -- 249,098 249,098 -- Fund balance at June 30, 1981 GAAP basis $ 449,613 9,207 (440,406) (155,565) (18�825) (34,260) 185,387 259,175 ]3,788 4,686�31 2,712,777 (1s974,154) See accompanying accountants' report. 30 CITY OF HUNTINGTON BEACH STATEMENT III Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes In Fund Balance - Budget and Actual Year Ended June 30, 1981 Special Gas Tax Library Service Sewer Planned Local Drainage Variance Variance Variance Variance Favorable Favorable Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: Licenses and permits $ -- -- -- 102,000 73,003 (28,997) 120,000 639,814 519,814 450,000 509,005 59,005 Use of money b property 300,000 273,823 (26,177) -- -- -- 250,000 335,004 85,004 250,000 221,535 (28,465) Revenue from other agencies 3,187,500 2,827,609 (359,891) -- -- -- -- -- -- -- -- Charges for current services -- -- -- -- Other revenues 82,609 -- 82 60 ) -- -- -- -- -- -- -- -- Total revenues 3,570,109 3,101,432 (468,677) 102,000 73,003 (28,997) 370,000 974,818 604,818 700,000 730,540 30,540 Expenditures: Administrative -- -- -- -- -- -- -- -- Support -- -- -- -- -- Camunity services -- -- -- -- -- Public safety -- -- -- -- -- -- -- Highways and street 11,319,792 2,972,142 8,347,650 -- -- - Drains and sewers 12,848 -- 12,848 -- -- -- 1,460,553 734,165 726,388 944,986 862,413 82,573 Park development -- -- -- -- -- -- -- -- -- Reimbursement agreements -- -- -- -- -- -- 430 430 -- 10,320 -- 10,320 Grants -- -- -- -- - -- Miscellaneous -- -- -- -- -- -- -- -- -- -- -- -- Total expenditures 11,332,640 2,972,142 8 6*3 o,498 -- -- -- 1,460,983 734,595 726,388 955,206 862,413 92,893 31 CITY OF HUNTINGTON BEACH STATEMENT III Special Revenue Funds Canbining Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Year Ended June 30, 1981 Special Gas Tax Library Service Sewer Planned Local Drainage Variance Variance Variance Variance Favorable Favorable Favorable Favorable Budget Actual (Unfavorable) Bud et Actual (Unfavorable) Budget Actual . (Unfavorable) Budget Actual (Unfavorable) Excess (deficiency) of revenue over expenditure (7,762,531) 129,290 7,891,821 102,000 73,003 (28,997) (1,090,983) 240,223 1,331,206 (255,306) (131,873) 123,433 Other financing sources (uses) (849,000) (697,488) 151,512 (102,000) (73,003) 28,997 -- -- -- -- -- -- Excess (deficiency) of revenue and other sources over expenditures and other uses (8,611,531) (568,198) 8,043,333 -- -- -- 1 0 0 ) 240,223 1,331,206 2 5 06) 131 8 ) 123,433 Fund balance at June 30, 1980 as - previously reported 1,698,393 1,698,393 -- -- -- -- 2,523,879 2,523,879 -- 1,541,711 1,541,711 -- Cumulative effect of change in accounting principle 581,203 581,203 -- -- -- -- 52,340 52,340 310,169 310,169 -- Fund balance as adjusted June 30, 1980 2,279,596 2,279,596 -- -- -- -- 2,576,219 2,576,219 -- 1,851,880 1,851,880 -- Equity transfers In (out) -- -- -- -- -- -- -- Fund balance at June 30, 1981 (6,331,935) 1,711,398 8,043,333 -- -- -- 1,485,236 2,816,442 1,331,206 1,596,574 1,720,007 123,433 budgetary basis Add encumbrances outstanding June 30, 1981 588,767 588,767 -- -- -- -- 39,265 39,265 -- 71,763 71,763 -- Fund balance at June 30, 1981 GAAP basis $(5,743,168) 2,300,165 8,043,333 -- -- -- 1,524,501 2,855,707 1L331,206 1,668,337 1,791,770 123,433 See accompanying accountants' report. 32 CITY OF HUNTINGTON BEACH STATEMENT Ill Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Year Ended June 30, 1981 Operational Reserve Fund Special Capital Outllr Total Variance Variance Variance Favorable Favorable Favorable Budget Actual (unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: Licenses and permits -- -- -- -- -- -- 1,789,000 1,879,380 90,380 Use of money and property -- 42,476 42,476 100,000 207,546 107,546 1,233,200 1,481,445 248,245 Revenue from other agencies -- -- -- -- -- -- 11,983,544 7,698,023 (4,285,521) Charges for current services -- -- -- -- -- -- 24,000 106,909 82,909 Other revenues -- -- -- -- -- -- 2,394,609 8,124 2 86 48 ) Total revenues -- 42,476 42,476 100,000 207,546 107,546 17,424,353 11,173,881 6 2 0 472) Expenditures: Administrative -- -- -- 13,446 9,773 3,673 13,446 9,773 3,673 Support -- -- -- 114,889 76,8t0 38,079 114,889 76,810 38,079 Community services -- -- -- 553,701 445,867 107,834 564,671 456,828 107,843 Public safety -- -- -- 1,500,868 1,388,289 112,579 1,611,639 1,4",060 112,579 Highways and street -- -- 1,292,809 1,040,393 252,416 12,614,892 4,014,826 8,600,066 Brains and sewers -- -- 153,474 129,61.0 23,864 2,571,861 1,726,188 845,673 Park development -- -- -' -- -' -- 2,972,273 1,212,453 1,759,820 Reimbursement agreements -- -- -- -- -- -- 10,750 430 10,320 Grants -- -- -- -- -- -- 5,933,595 2,681,229 3,252,366 Miscellaneous 1,790,000 -- 1,790,000 54 7 33,704 20,653 1,844,357 33,704 1,810,653 Total expenditures 1,790,000 -- 1,790,000 0,000 3,683,544 123, 4,4b6 559,098 28,252,373 11,711,301 16,541,072 33 CITY OF HUNTINGTON BEACH STATEMENT III Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Year Ended June 30, 1981 Operational Reserve Fund Special Capital Outlay Total Variance Variance Variance Favorable Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) Excess (deficiency) of revenues over expenditure (1,790,000) 42,476 1,832,476 (3,583,544) (2,916,900) 666,644 (10,828,020) (537,420) 10,290,600 Other financing sources (uses) -- 1,453,500 1,453,500 1,532,000 1,624,961 92,961 (1,020,000) 6152004 12635,004 Excess (deficiency) of revenues and other sources over expenditures sources (uses) and other uses (1.,790,000) 1,495,976 3,285,976 (2,051,544) (1,291,939) 759,605 (11,848,020) 77,584 11,925,604 Fund balance at June 30, 1980 as previously reported -- -- 1,035,325 1,035,325 -- 9,090,736 9,090,736 -- Cumulative effect of change in accounting principle -- -- -- 658,701 658,701 -- 1,965,713 1,965,713 -- Fund balance as adjusted June 30, 1980 -- -- -- 1,694,026 1,694,026 -- 11,056,449 11,056,449 -- Equity.transfers in (out) -- -- -- -- 429,747 429,747 -- (327,336) (327,336) Fund balance at June 30, 1981 budgetary basis (1,790,000) 1,495,976 3,285,976 (357,518) 831,834 1,189,352 (791,571) 16,806,697 11,598,268 Add encumbrances outstanding June 30, 1981 -- -- -- 843,560 843,560 -- 2,103,649 2,103,649 -- Fund balance at June 30, 1981 GAAP basis $0,790,000) $1,495,976 $3,285,976 $ 486LO42 $1 6, 75,394 $1,189,352 $1,312,078 $12,910,346 $11,598,268 ' See accompanying accountants' report. 34 CITY OF HUNTINGTON BEACH STATEMENT IV Debt Service Funds Combining Balance Sheet June 30, 1981 1955 Water Bond 1970 Park Bond Interest and Interest and Bond Redemption Bond Redemption Total Assets Cash and term deposits -- $44,802 44,802 Property taxes receivable -- 27,191 27,191 Interest receivable -- 1,175 1,175 Total assets -- $73,168 73,168 Liabilities and Fund Balances Liabilities -- $ -- Fund balances -- 73,168 Mi 8 Total liabilities and fund balances -- $73z168 73,168 See accompanying accountants' report. 35 CITY OF HUNTINGTON BEACH STATEMENT V Debt Service Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Year Ended June 30, 1981 1955 water 1970 Park Bond Interest Bond Interest and Redemption Fund and Redemption Fund Total, Revenues: General property taxes $ -- 514,217 514,217 Total revenues 514,217 514,217 Expenditures: Redemption of matured bonds 35,000 195,000 230,000 Interest 350 271,737 272,087 Miscellaneous 442 442 Total expenditures 35,350 467,179 502,529 Excess (deficiency) of revenues over expenditures (35,350) 47,038 11,688 Fund balances at June 3q, 1980 56,537 26,130 82,667 Equity transfer in (out) (21,187) -- (21,187) Fund balances at June 30, 1981 $ -- 73,168 73,168 See accompanying accountants' report. 36 CITY OF HUNTINGTON BEACH STATEMENT VI Debt Service Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Year Ended June 30, 1981 1955 Water Bond Interest 1970 Park Bond Interest and Redemption Fund and Redemption Fund Total Variance- Variance- Variance- Favorable Favorable Favorable Budget Actual (Unfavorable) Budget Actual (Unfavorable) Budget Actual (Unfavorable) Revenues: General property taxes S 2,428 5 -- S (2,428) $481,487 $514,217 $32,730 $483,915 5514,217 $30,302 Total revenues 2,428 -- (2,428) 481,487 514,211 32,730 483,915 514,217 30,302 Expenditures: Redemption of matured bonds 35,000 35,000 195,000 195,000 -- 230,000 230,000 -- Interest 250 350 (100) 271,738 271,737 1 271,988 272,087 (99) Miscellaneous 100 -- 100 500 442 588 600 442 158 Total expenditures 35,350 35,350 -- 467,238 467,179 _ 9 502,588 502,529 59 Excess (deficiency) of revenues over expenditures (32,922) (35,350) (2,428) 14,249 47,038 32,789 (18,673) 11,688 30,361 Fund balances at June 30, 1980 56,537 56,537 -- 26,130 26,130 -- 82,667 82,667 -- Equity transfers in (out) -- (21,187) (21,187) -- -- -- -- (21,187) (21,187) Fund balances at June 30, 1981 $23,615 5 -- $(23 6t ) $ 40,379 $ 73.168 $1 ,789 $ 63,994 $ 73,168 $ 9,174 See accompanying accountants' report. 37 This Page Left Blank Intentionally CITY OF HUNTINGTON BEACH STATEMENT VII Enterprise Funds Combining Balance Sheet ,tune 30, 1981 Hater Meadowlark utility Golf Course Total Assets Current assets: Cash and term deposits $ 4,796,590 105,555 4,902,145 Accounts receivable: Trade, net of $2,000 allowance 337,357 -- 337,357 Other 15,050 -- 15,050 Deposits 32,269 -- 32,269 Interest receivable 79,460 1,818 81,278 Total current assets 5,260,726 107,373 5,368,099 Property, plant, and equipment, net of allowance for depreciation 74,096,761 3,099,280 27096,041 Restricted assets - cash with fiscal agent 405,504 -- 405,504 Total assets $29,762,991 3,206,653 32,969,644 See accompanying accountants' report. 38 CITY OF HUNTINGTON BEACH STATEMENT VII Enterprise Funds Combining Balance Sheet June 30, 1981 Water Meadowlark Utility Golf Course Total Liabilities and Fund Equity Current liabilities payable from current assets): ' Accounts payable $ 286,646 -- 286,646 Customer deposits 329,650 -- 329,650 Accrued interest payable -- 46,325 46,325 Accrued payroll 122,196 -- 122,196 Due to other funds 537 -- 537 Current installment of long-term note payable 38,678 18,047 56,725 Current liabilities (payable from restricted assets): Current installment of bonds payable 140,000 -- 140,060 Accrued interest payable 14,000 -- 14,000 Total current liabilities 931,707 64,372 996,079 Long-term liabilities: Long-term note payable net of current installment 488,139 1,866,997 2,355,136 Bonds payable in future years net of current installment 1,626,000 -- 1,626,000 Total liabilities 3,045,846 1,931,369 4,977,215 Fund equity: Contributed capital: In aid of construction 15,121,693 -- 15,121,693 From general fund 92,608 1,267,324 1,359,932 Total contributed capital 15,214,301 1,267,324 16,481,625 Retained earnings: Reserved for the retirement of revenue bonds 251,504 -- 251,504 Unreserved/undesignated 11,251,340 7,960 11,259,300 Total retained earnings 11;502,844 7,960 11,510,804 Total fund equity 26,717,145 1,275,284 27,992,429 Total liabilities and fund equity $29,762,991 3,206,653 32,969,644 See accompanying accountant's report 39 CITY OF HUNTINGTON BEACH STATEMENT V111 Enterprise Funds Combining Statement of Revenue, Expenses and Changes in Retained Earnings Year Ended June 30, 1981 Water Meadowlark Utility Fund Golf Course Total Operating Revenues: Charges for current service $ 5,669,115 -- 5,669,115 Use of money and property 170,342 170,342 Other operating revenues 145,018 -- 145,018 Total operating revenues 5,814,133 170,342 5,984,475 Operating expenses: Source of supply 1,078,819 -- 1,078,819 Pumping expense 1,030,123 -- 1,030,123 Water treatment 32,671 -- 32,671 Transmission and distribution 573,686 -- 573,686 Administrative and general 1,065,301 -- 1,065,301 Contributions to general fund in lieu of. taxes 923,667 -- 923,667 Depreciation 768,809 15,760 784,569 Total operating expenses 5,473,076 15,760 5,488,836 Operating income 341,057 154,582 495,639 Non-operating revenues (expenses): Interest Income 638,880 -- 638,880 Other revenue 194,667 -- 194,667 Interest expense (76,211) (133,134) (209,345) Total non-operating revenues (expenses): 757,336 1 1 4 624,202 Net intone 1,098,393 21,448 1,119,841 Retained earnings (accumulated deficit) at June 30, 1980 10,394,504 (13,488) 10,381,016 Increase in reserve for retirement of revenue bonds 9,947 -- 92947 Retained earnings at dune 30, 1981 $11,502,844 7,960 11,510,804 See accompanying accountants' report 40 4 This Page left Blank Intentionally CITY OF HUNTINGTON BEACH STATEMENT IX Enterprise Funds Combining Statement of Changes in Financial Position Year Ended June 30, 1981 Water Meadowlark Utility Golf Course Total Sources of Working Capital: Operations: Net earnings $1,098,393 21,448 1,119,841 Item not requiring working capital: Depreciation 768,809 15,760 784,569 Working capital provided from operations 1,867,202 37,208 1,904,410 Increase in note payable 526,817 -- 526,817 Increase in reserve for revenue bond retirement 9,947 -- 9,947 Total sources of working capital 2,403,966 37,208 2,441,174 Uses of Working Capital: Addition of fixed assets 1,943,975 -- 1,943,975 Increase in restricted assets - cash with fiscal agents 14,038 -- 14,038 Reclassification of note payable 38,678 -- 38,678 Reclassification and redemption of long-term bonds payable 234,000 18,047 252,047 Total uses of working capital 2,230,691 18,047 2,248,738 Net increase in working capital $ 173,275 19,161 192,436 41 �■ �■ m ow CITY OF HUNTINGTON BEACH STATEMENT IX Enterprise Funds Ccmbinrng Statement of Changes in Financial Position Year Ended June 30, 1981 Water Meadowlark Utility Golf Course Total Changes in components of working capital: Increase (decrease) in current assets: Cash and long term deposits $221,211 18,524 239,735 Account receivable, trade (net) (7,843) (7,843) Account receivable, other (net) 2,326 100 2,426 Interest receivable 14,448 1,718 16,166 Total 230,142 20,342 250,484 Decrease (increase) in current Liabilities: Accounts payable 116,192 -- 116,192 Customer deposits (34,370) -- (34,370) Accrued expenses (95,857) -- (95,857) Due to other funds (63) -- (63) Accrued interest payable 447 -- 447 Matured interest payable 5,462 -- 5,462 Increase in current portion of bonds payable (10,000) (10,000) Increase in current portion of note payable (38,678) 1 t81) (39,859) Total (56,867) (1,181) (58,048) Net increase in working capital $173,275 19,161 192,436 See accompanying accountants' report. 42 CITY OF HUNTINGTON BEACH STATEMENT X Internal Service Funds Combining Balance Sheet June 30, 1981 Public Employee Worker's Liability Health Compensation Self-Insurance Self-Insurance Self-Insurance Total Assets Cash and term deposits $2,241,626 416,833 2,241,889 4,900,348 Interest receivable 37,266 6,463 36,676 80,405 Due from other funds -- -- 13,722 13,722 Total assets $2L278,892 423,296 2,292,287 4,994:475 Liabilities and Fund Equity Liabilities: Accrued payroll $ -- -- 989 989 Accounts payable 35 -- 18,296 18,331 Insurance claims payable 976,742 251,116 779,018 2,006,876 Total liabilities 976,777 2512116 798,303 2,026,196 Fund Equity: Retained Earnings: Reserved for future insurance claims 750,000 -- -- 750,000 Unreserved 552,115 172,180 1,493,984 2,218,279 Total fund equity 1,302,115 172,180 1,493,984 2 8 279 Total liabilities and fund equity $2 278 8 2 42 2 2 2, 92,287 4,99,4 See accompanying accountants' report. 43 CITY OF HUNTINGTON BEACH STATEMENT XI Internal Service Funds Combining Statement of Revenues, Expenses and Changes in Retained Earnings For Year Ended June 30, 1981 Public Employee Worker's Liability Health Compensation Self-Insurance Self-Insurance Self-Insurance Total Operating revenues: Charges for current service $ 400,000 960,161 494,015 1,854,176 Total operating revenues 400,000 96o,16i 494,015 1,854,176 Operating expenses: Worker's compensation claims -- -- 654,055 654,055 Employee medical claims -- 784,808 -- 784,808 Administrative and general -- 77,929 36,026 113,955 Liability claims 199,579 -- -- 199,579 Other -- -- 5,774 5,774 Total operating expenses 199,579 862,737 _695,855 1,758,171 Operating income (loss) 200,421 97,424 (201,840) 96,005 Mon operating revenues: Interest income 301,468 43,359 215,034 559,861 Net income 501,889 140,783 13094 655,866 Retained earnings at June 30, 1980 800,226 31,397 1,480,790 2,312,413 Retained earnings at June 30, 1981 $1,302,115 im 180 i 49, 3,984 2 68 27 See accompanying accountants' report. - 44 CITY OF HUNTINGTON BEACH STATEMENT X11 Internal Service Funds Combining Statement of Changes in Financial Position Year Ended June 30, 1981 Public Employee Worker's Liability Health Compensation Self-Insurance Self-Insurance Self-Insurance Total Sources of working capital: Current operations: Net income $501,889 140,783 13094 655,866 Increase in working capital $ OS 1,889 140,783 13,194 655,866 Changes in components of working capital: Increase (decrease) in current assets: Cash and term deposits $432,650 183,326 225,355 941,331 Interest receivable 37,266 5,063 (56,501) (14,172) Due from other funds -- -- 964 964 Total increase in current assets 469,916 188,389 16q,M 828,123 Decrease (increase) in current liabilities: Accrued payroll -- -- 96 96 Accounts payable (35) -- (1,736) (1,771) Insurance claims payable 32,008 (47,606) (154,984) (170,582) Total decrease (increase) in current liabilities 31,973 (47,606) (156,624) (172,257) Increase in working capital 5501,889 140 7 1 1.24 655,866 See accompanying accountants' report. 45 CITY OF HUNTINGTON BEACH STATEMENT XIII Expendable Trust Funds Combining Balance Sheet June 30, 1981 Employee HUD Special Deferred Improvement Interest- Deposit Compensation Act Subsidy Total ASSETS Cash and term deposits $170,169 1,012,497 21,692 258,117 1,462,475 Notes receivable, net of unearned discount -- 872,267 -- -- 872,267 Total assets $170,169 1,884,764 21,692 258,117 2,334,742 4,742 LIABILITIES AND FUND BALANCE Liabilities: Refundable deposits $170069 -- -- -- 170,169 Bond principal and interest payable - -- -- 21,692 -- 21,692 Deferred revenue -- 32,843 -- __ 32,843 Total liabilities 170,169 32,843 21,692 -- 224,704 Fund Balances: Unreserved-undesignated: -- 1,851,921 -- 258,117 2,110,038 Total liabilities and fund balances $170,169 1,884,764 21,692 258,117 2,334,742 See accompanying accountants' report. 46 CITY OF HU NTINGTON BEACH STATEMENT XIV Expendable Trust Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances Year Ended June 30, 1981 Employee HUD Special Deferred Improvement Interest- Deposit Compensation Act Subsidy Total Revenues: Contributions $ -- 257,846 -- -- 257,846 Interest -- 250,087 -- 12,871 262,958 Total revenues -- 507,933 -- 12,871 520,804 Expenditures: Loan subsidies -- -- -- 104,754 104,754 Paid to participants in employee deferred compensation plan -- 13,186 -- __ 13,186 Total expenditures -- 13,1 10W,75W 117.9 Excess (deficiency) of revenue over expenditures -- 494,747 -- (91,883) 402,864 Fund balances at June 30, 1980 -- 1,357,174 -- -- 1,357,174 Equity transfers In (out) -- -- -- 350,000 35MOO Fund balances at June 30, 1981 $ -- $1 85R 1,921 $ -- $258 It $2 it, 0,038 See accompanying accountants' report. 47 Statistical Section SCHEDULE I STATEMENT OF GENERAL FUND REVENUES - OTHER THAN PROPERTY TAXES Last Ten Fiscal Years Use of From Charges Fiscal Other Licenses b Fines b Money b Other for Current Other Year Taxes Permits Forfeitures Property Aaencies Services Revenue 1972 $ 3,115,977 $1,269,922 $ 109,851 $ 596,857 $1,373,140 $ 489,013 $ 59,200 1973 3,800,728 1,997,105 126,651 651,746 1,589,742 701,760 112,172 1974 4,386,433 1,834,580 152,769 682,395 1,830,265 615,379 32,325 1975 5,723,995 2,236,292 125,698 767,233 1,774,192 639,964 41,427 1976 5,722,103 2,588,932 135,216 907,470 2,040,207 825,912 49,277 1977 6,785,656 2,817,209 214,808 1,050,938 2,567,992 942,760 48,714 1978 7,953,048 2,653,129 216,362 1,415,212 3,076,250 938082 99,600 1979 12,825,591 2,485,540 224,026 1,814,115 5,502,464 953,790 84,458 1980 14,557,330 2,597,954 398,877 1,820,700 3,874,763 1,158,294 90,149 1981 16,994,338 2 4 0 1 26 0 2 2 2 6 41 1,382,055 6� 6 125 48 SCHEDULE II STATEMENT OF GENERAL FUND EXPENDITURES Last Ten Fiscal Years Fiscal Administrative Community Public Safety Support Total Year Services Services Services Services General Fund 1972 $1,676,714 $ 4,736,550 $ 6,966,277 S 724,723 $14,104,264 1973 1,330,792 5,978,271 8,489,612 720,979 16,519,654 1974 1,494,073 6,601,075 9,541,847 906,900 18,543,895 1975 2,802,270 6,977,233 10,858,325 813,411 21,451,239 1976 3,194,089 6,653,560 12,233,405 1,247,564 23,328,618 1977 2,664,478 7,747,535 14,074,326 2,493,348 26,979,687 1978 3,635,719 8,673,505 14,953,652 1,814,454 29,077,330 1979 5,594,195 7,786,972 16,709,463 2,375,756 32,466,386 1980 6,723,175 11,387,668 16,789,782 2,001,019 36,901,644 1981 5aOOl,l91 11,784,064 18,216,394 4 2 744 40,494 J 49 � r � r � r �■ r � r � � r � � � r r � SCHEDULE III STATEMENT OF ASSESSED VALUE, DEBT LIMIT AND RATIO OF GENERAL OBLIGATION BONDED DEBT TO ASSESSED VALUE AND PER CAPITA Last Ten Fiscal Years % Bonded Debt to Fiscal Estimated Total Legal Debt Total General Legal Assessed Bonded Debt Year Population Assessed Value Limit (15%) Bonded Debt Debt Margin Value Per Capita 1972 129,992 $370,230,779 $ 55,534,617 $ 6,090,000 $ 49,444,617 1.64 46.85 1973 143,325 410,283,199 61,542,480 5,930,000. 55,612,480 1.45 41.37 1974 143,636 442,271,658 66,340,749 5,765,000 60,575,749 1.30 40.14 1975 146,400 529,973,310 79,495,997 5,590,001) 73,905,997 1.05 38.18 1976 151,500 580,623,450 87,093,518 5,410,000 81,683,518 .93 35.71 1977 157,800 710,079,235 106,511,885 5,220,000 101,291,885 •74 33.08 1978 161,200 854,321,745 128,148,262 5,020,000 123,128,262 .59 31.14 1979 167,500 831,783,620 124,767,543 4,810,000 119,957,543 .58 28.72 1980 172,200 983,927,670 147,589,151 4,590,000 142,999,151 .46 26.66 1981 172,813 1,074,304,70 161,145.705 4 6,3 0,000 155,785,705 .41 25.23 50 SCHEDULE IV STATEMENT OF TAX DELINQUENCIES AND IMPOUNDS Last Ten Fiscal Years SECURED TAXES UNSECURED TAXES Fiscal Tax Total Total Delinquency Total Total Delinquency Year Rate Levey Collections Amount Percent Levy Collections Amount Percent Impounds 1972 $ 1.62 $5,565,713 $5,395,846 $ 59,651 1.07% $432,025 $ 401,297 $ 4,628 1.07% $ 136,322 1973 1.62 6,249,372 6,094,111 51,276 .82 397,216 391,186 6,030 1.51 130,985 1974 1.62 6,703,620 6,499,009 66,654 .99 461,181 456,296 4,885 1.06 137,957 1975 1.62 8,099,022 7,844,596 74,987 .93 486,545 484,124 11,169 2.30 179,439 1976 1.62 8,852,049 8,587,784 82,622 .93 545,344 516,539 28,798 4.36 186,648 1977 1.62 9,982,983 9,844,450 116,794 1.17 549,994 538,370 6,791 1.23 328,451 1978 1.55 12,563,144 12,336,834 186,310 1.49 742,053 711,519 30,534 4.11 204,883 1979 .1972 5,635,879 5,525,120 110,759 1.97 561,420 537,307 24,113 4.30 195,202 1980 .1972 8,842,899 8,602,751 240,148 2.72 861,976 839;468 22,508 2.61 2,962 1981 1854 10,224,680 91872,496 352,184 3.44 827,168 789 078 38,090 4.60 28,585 51 r �■r ins r no m r r m r r m r r No r SCHEDULE V STATEMENT OF FUTURE GENERAL OBLIGATION BONDED DEBT REQUIREMENTS BY YEAR BASED ON BONDED DEBT JUNE 30, 1981 Fiscal Year Principal interest Total 1982 S 210,000 $ 260,515 S 470,525 1983 220,000 248,450 468,450 1984 235,000 235,800 470,800 1985 245,000 221,700 466,700 1986 260,000 207,000 467,000 1987 280,000 191,400 471,400 1988 295,000 174,600 469,600 1989 310,000 156,900 466,900 1990 330,000 138,300 468,300 1991 350,000 118,500 468,500 1992 370,000 97,500 467,500 1993 395,000 75,300 470,300 1994 415,000 51,600 466,600 1995 445,000 26,700 471,700 Total $4 60 000 $2 2y�04,275 $6,564,275 52 SCHEDULE VI STATEMENT OF FUTURE WATER REVENUE BOND REQUIREMENTS BY YEAR BASED ON OUTSTANDING DEBT JUNE 30, 1g81 Fiscal Year Principal Interest Total 1982 $ 140,000 $ 62,435 $ 202,435 1983 145,000 57,590 202,590 1984 150,000 52,500 202,500 1985 160,000 47,075 207,075 1986 160,000 41,475 201,475 1987 170,000 35,700 205,700 1988 180,000 29,575 209,575 19" 180,000 23,275 203,275 1990 190,000 16,800 206,800 1991 200,000 9,975 209,975 1992 91,000 3,238 94,23 Total $1 6,7 6,000 $V ,638 S2 14� 5,638 53 r■i i�r rr r r r� -ar rr � r r � r ■r �r r� r� rr rr SCHEDULE VII HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION (a) STATEMENT OF BONDED DEBT JUNE 30, 1981 Date Years Rate Bonds Bonds Bonds of of of Original Outstanding9 Matured Outstanding Description Bonds Maturity Interest Issue July 1, 1980 During Year June 30, 1981 Civic Center Jan., 1972 1975-1982 7.00% $ 2,010,000 600,000 290,000 310,000 Leasehold 1983 5.70 330,000 330,000 O 330,000 Mortgage Bonds, 1984-1996 5.50 7,040,000 6,985,000 0 6,985,000 First Issue 1997-1998 5.00 1,720,000 1,595,000 0 1,595,000 Total 11,100,000 9,510,000 290,000 9,220,000 Central Library Feb., 1972 1975-1983 7.00% 1,220,000 620,000 140,000 48o,0o0 Leasehold 1984 5.90 180,000 18o,0oo 0 180,000 Mortgage Bonds 1965 5.40 190,000 190,000 0 1909000 Second Issue 1986-1988 5.50 640,000 640,000 0 640,000 1989-1991 5.60 770,000 770,000 0 770,000 1992 5.70 290,000 290,000 0 290,000 1993-1995 5.75 965,000 965,000 0 965,000 1996-1997 5.00 745,000 745,000 0 745,000 Total 5,000,000 4,400,000 14o,000 4,26o,000 Total bonded debt $16,100,000 $13,910,000 $ 43os000 $131480,000 (a) The above schedule has been included for informational purposes only. The Huntington Beach Public Facilities Corporation is an independent entity. Accordingly, the obligations of the Public Facilities Corporation do not constitute an obligation of the City. 54 SCHEDULE VIII HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION STATEMENT OF FUTURE DEBT REQUIREMENTS BY YEAR BASED ON BONDED DEBT (a) JUNE 30, 1981 Fiscal Civic Center Issue Library Issue Total Year Principal Interest Total Principal Interest Total Principal Interest Total 1982 $ 310,000 $ 504,435 $ 814,435 $ 150,000 $ 236,817 $ 386,817 $ 460,000 $ 741,252 $ 1,201,252 1983 330,000 482,735 812,735 160;000 225,967 385,967 490,000 708,702 1,198,702 1984 360,000 463,925 823,925 170,000 214,417 384,417 530,000 678,342 1,208,342 1985 380,000 444,125 824,125 180,000 203,157 383,157 560,000 647,282 1,207,282 1986 400,000 423,225 823,225 190,000 192,717 382,717 590,000 615,942 1,205,942 1987 430,000 401,225 831,225 200,000 182,o87 382,087 630,000 583,312 1,213,312 1988 450,000 377,575 827,575 210,000 1709812 380,812 _ 660,000 548,387 1,208,387 1989 465,000 352,825 817,825 230,000 158,712 388,712 695,000 511,537 1,206,537 1990 530,000 327,250 857,250 240,000 145,667 385,667 770,000 472,917 1,242,917 1991 555,000 298,100 853,100 260,000 131,667 391,667 815,000 429,767 1,244,767 1992 600,000 267,575 867,575 270,000 116,827 386,827 870,000 384,402 1,2549402 1993 640,000 234,575 874,575 2909000 101,002 391,002 930,000 335,577 1,265,577 1994 675,000 199,375 874,375 305,000. 83,968 388,968 980,000 283,343 li263,343 1995 725,000 162,250 8879250 320,000 66,000 386,000 1,045,000 228,250 1,273,250 1996 775,000 122,375 897,375 340,000 47,025 3879025 1,115,000 16q,400 1,2849400 1997 830,000 79,750 909,750 360,000 28,250 388,250 1,190,000 108,000 1,298,000 1998 765,000 38,250 803,250 385,000 9,625 394,625 1,150,000 479875 1,197,875 Total $9,220,000 $5,179,570 $14,399,570 $4,260,000 S2,314,717 $6,574,717 $13,480,000 $7,494,287 $20,974,287 Principal Due: January September Interest Due: July and January September and March (a) The above schedule has been included herein for informational purposes only. The Huntington Beach Public Facilities Corporation is an independent entity. Accordingly, the obligations of the Public Facilities Corporation do not constitute an obligation of the City. 55 SCHEDULE IX PARKING AUTHORITY OF THE CITY OF HUNTINGTON BEACH STATEMENT OF BONDED DEBT (a) JUNE 30, 1981 Date Years Rate Bonds Bonds Bonds of of of Original Outstanding Matured Outstanding Description Bonds Maturity Interest Issue July 1, 1980 During Year June 30, 1981 1968 Parking Sept., 1968 1970-1972 6.00% $ 150,000 $ 0 $ 0 $ 0 Revenue Bonds 1973-1979 4.75 470,000 0 0 0 1980-1985 5.00 570,000 570,000 85,000 485,000 1986-1993 5.25 1,110,000 1,110,000 0 1,110,000 Total $2,300,000 $1,680,000 $85,000 $1,595,000 SCHEDULE X PARKING AUTHORITY OF THE CITY OF HUNTINGTON BEACH STATEMENT OF FUTURE DEBT REQUIREMENTS BY YEAR BASED ON BONDED DEBT (a) JUNE 30, 1981 Fiscal Year Principal Interest Total 1982 $ 85,000 $ 80,400 $ 165,400 1983 90,000 76,025 166,025 1984 95,000 71,400 166,400 1985 105,000 66,400 171,400 1986 110,000 61,025 171,02.5 1987 115,000 55,256 170,256 1988 .120,000 49,088 169,088 1989 125,000 42,656 167,656 1990 135,000 35,831 170,831 1991 14o,000 28,613 168,613 1992 150,000 21,000 171,000 1993 160,000 12,863 172,863 1994 165,000 4,331 169,331 Total $11 595,000 $604,888 $2,199,888 .a) The above schedules have been included herein for informational purposes only. The Parking Authority is an independent entity. Accordingly, its obligations are not obligations to the City. 56 SCHEDULE XI City of Huntington Beach Miscellaneous Statistics June 30, 1981 Date of incorporation 1969 Form of government Charter City — Council - City Administrator Area 28 square miles Population 172,000 Miles of streets 362.4 miles Number of street lights 12,190 Fire Protection: Number of stations 7 Number of firemen and officers 130 Police protection: Number of stations 1 Number of policemen and officers 190 Municipal water department: Number of consumers 44,036 Average daily consumption 24.9 million gal. Miles of water mains 423 Sewers: Sanitary sewers 250 miles Storm sewers 30 miles Building permits issued 3,230 per year . Recreation and Culture: Number of parks 51 Number of people using parks 670,000 Acres of beach 43.3 Number of people using beaches 3.8 million Number of libraries 4 Number of volumes 370,153 Total library circulation 796,695 Number of people using libraries 89,424 Employees 1,250 57 r� �r rr rr rr r rr �r �r r� r it �r ri �r �r ■r r� _ r■� Huntington Beach Public Facilities Corporation . Financial Statements June 30, 1981 (With Accountants' Report. Thereon) r a a a �■ � r a � r r �r a r r r r a a Certified Public Accountants 4400 MacArthur Boulevard RtMarwickMitcheR&Ca Newport Beach,California 92660 (714)851-2000 The Honorable Board of Directors Huntington Beach Public Facilities Corporation Huntington Beach, California We have examined the combined balance sheet of the Huntington Beach Public Facilities Corporation as of June 30, 1981 and the related combined statement of earnings and retained earnings and changes in financial position for the year then ended. Our examination was made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the aforementioned combined financial statements present.fairly the financial position of the Huntington Beach Public Facilities Corporation at June 30, 1981 and the results of its operations and the changes in its financial position for the year then ended in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. a4i September 25, 1981 ' EXHIBIT I HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION COMBINED BALANCE SHEET June 30, 1981 Civic Total Center Project Library Project Assets Restricted assets: Time certificates of deposit $ 1,098,854 604,910 493,944 Temporary investments in U.S. government securities, at cost (market: $1,998,060) 2,016,420 1,537,229 479,191 Accrued interest receivable 111,196 75,253 35,943 Total restricted assets 3,226,470 2,217,392 1,009,078 Long term leases receivable less unearned income of $ 9,175,054 (Note 3) 12,141,246 8,289,539 3,851,707 Total assets $15,367,716 $10,506,931 $4,860,785 Liabilities and Retained Earnings Current liabilities payable from restricted assets: Accrued interest $ 316,167 236,647 79,520 Current installment of bonds payable (Note 4) 460,000 310,000 150,000 Total current liabilities payable from restricted assets 761,167 546,647 229,520 Deferred rental income 72,502 72,502 Bonds payable, net of current installment (Note 4) 13,020,000_ 8,910,000 4,110,000 Total liabilities 13,868,669 9,529,149 4,339,520 Retained earnings 1,499,047 977,782 521,265 Total- liabilities and retained earnings $15�367,716 10,506,931 4,860,785 See accompanying notes to combined financial statements. 1 r r rr rr r rr� rr rr r� rr r rr rr rr r� r� r� rr rr EXHIBIT II HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION COMBINED STATEMENT OF EARNINGS AND RETAINED EARNINGS YEAR ENDED JUNE 30, 1981 Civic Total Center Project Library Project Operating revenue: Lease income: Lease payments received $1,253,900 $854,900 $399,000 Less amortization of leases receivable (323,160) (221 191) (101,269) 930,740 33,709 297,031 Operating expenses: (7,263) -- (7,263) Net operating income 923,477 633,709 289,768 Non-operating revenue: Interest earned 329,216 211,330 117,886 Total operating and non-operating income 1,252,693 845,039 407,654 Non-operating expenses: Interest expense (768,049) (521,694) (246,355) Net earnings 484,644 323,345 161,299 Retained earnings at July 1, 1980 1,014,403 654,437 359,966 Retained earnings at June 30, 1981 $1,499,047 $977,782 $521,265 See accompanying notes to combined financial statements. 2 EXHIBIT III HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION COMBINED STATEMENT OF CHANGES IN FINANCIAL POSITION YEAR ENDED JUNE 30, 1981 Civic Total Center Project Library Project Source of funds: Funds provided from operations: Net earnings $484,644 $323,345 $161,299 Amortization of leases receivable 323,160 221,191 101,969 $807,804 $544,536 s263,268 Use of funds: Reclassification and redemption of bonds payable $460,000 $310,000 $150,000 Decrease in deferred rental income 4,027 4,027 -- Increase in working capital 343,777 230,509 113,268 $807,804 $544,536 $263,268 Changes in components of working capital: Increase (decrease) in restricted assets: Cash held by trustee $ (32) $ (32) -- Time certificates of deposit (105,538) (201,178) 95,640 Temporary investments in government securities 411,809 403,298 8,511 Accrued.interest receivable 54,916 44,227 10,689 Interproject balances -- (5,815) 5,815 361,155 240,500 120,655 Decrease (increase) in current liabilities: Accrued interest payable 12,622 10,009 2,613 Current installment of bonds payable (30,000) (20,000) (10,000) (17,378) (91991) (7,387) Increase in working capital $3k3,777 $230,509 $113,268 See accompanying notes to combined financial statements. 3 r� r rr r �r rr rr rr rr r� r rr r r r r� r �r r� HUNTINGTON BEACH PUBLIC FACILITIES CORPORATION NOTES TO COMBINED FINANCIAL STATEMENTS JUNE 30, 1981 (1) Summary of Significant Accounting Policies The following is a summary of significant accounting policies used by the Huntington Beach Public Facilities Corporation (Corporation). Basis of Accounting The accompanying combined financial statements of the Corporation have been prepared using the accrual basis of accounting. Temporary investments Investments are stated at cost. . Such investments consist of Federal Government backed securities and are adjusted for amortization of purchase premium or discount. Funds Under the provisions of the bond indenture agreements, .the Corporation is required to maintain separate accountability for various types of funds received. A description of these funds, which are-combined for financial statement presentation, .is as follows: Account Source Use Reserve Fund Bond proceeds and rental revenue fund Bond principal and Interest Construction Fund Bond proceeds Cost of project Interest During Construction Fund Bond proceeds First twenty-six months' interest on bonds Rental Revenue Fund City of Huntington Beach rent payments Required transfers to various funds and/or other specified purposes Debt Service Fund Transfers from revenue fund Bond principal and interest Administrative Expenses Fund Transfers from revenue fund Corporation operating expenses Bond Redemption Fund Transfers from revenue fund Call and redemption of bonds, changes, alterations or additions to the project, or reimbursement of any base rent or additional rent previously paid by the City of Huntington Beach 4 (1) Summary of Significant Accounting Policies, Continued Upon completing construction, separate rental revenue funds were established to account for all lease and other revenue from the City of Huntington Beach for the Civic Center and Library. The separate construction funds for the Civic Center and Library projects continue to account for improvements and modifications to the project structures as approved by the Directors of the Corporation. Money in the respective rental revenue funds is disbursed as follows: First, to the debt service funds in amounts sufficient to pay one succeeding principal and two succeeding interest installments; Second, to the respective reserve funds in amounts necessary to restore a balance equal to one year's lease revenue; Third, to the administrative expense funds in amounts equal to the budgeted administrative expenses of the Corporation; Fourth, to the bond redemption funds. Money in the bond redemption fund is used to correct deficiencies in the debt service funds, reserve funds or administrative expense funds. Money remaining after meeting the minimum requirements of the bond agreements may be used to purchase or redeem outstanding bonds in order to make improvements or to reimburse the City of Huntington Beach for rent paid to the Corporation. (2) Organization The Huntington Beach Public Facilities Corporation was Incorporated under the laws of the State of California as a non-profit corporation on November 25, 1970. The Corporation was formed for the primary purpose of financing and constructing a civic center.complex and central library for the City of Huntington Beach. The constructed civic facilities have been leased to the City of Huntington Beach under long term lease agreements. (Note 3). (3) Leases The Corporation has entered into two lease and sublease agreements with the City of Huntington Beach. The terms of the leases are as follows: (a) Civic Center lease - This involves a lease and sublease agreement with the City of Huntington Beach for the Huntington Beach Civic Center. . The site occupied by the Civic Center is owned by the City and was leased to the Corporation for an advance rental of $350,000. The term of the lease is from January 15, 1972 to one week after the termination of the sublease described in the next paragraph. The Corporation has subleased the Civic Center site and civic buildings constructed thereon to the City for an annual rental of $854,900. This sublease commenced July 1, 1974 and extends for a term of the earlier of: (a) thirty years or (b) until the bonded indebtedness incurred by the Corporation to construct the Civic Center has been paid. . (b) Central Library lease - This involves a lease and sublease agreement with the City of Huntington Beach for the Central Library. The site occupied by the Central Library is owned by the City and was leased to the Corporation for an advance rental of $300,000. The term of the lease is from September 1, 1972 to one week after the termination of the sublease described in the next paragraph. 5 (3) Leases, Continued The Corporation has subleased the Central Library site and building constructed thereon to the City for an annual rental of $399,000. This sublease commenced February 15, 1975 and extends for a term of the earlier of: (a) thirty years or (b) until the bonded indebtedness incurred by the Corporation to construct the Central Library has been paid. Under both agreements, the City is required -to pay all taxes, insurance, administrative and maintenance costs a3soclated with the leased facilities. At the conclusion of the lease agreements, title to the leased facilities will be transferred to the City at no additional cost. Proper accounting treatment requires that such leases be treated as financing leases. Under the financing method, the excess of aggregate rentals over the cost of the leased property is considered compensation to the lessor for the use of funds invested. At June 30, 1981, leases receivable from the City of Huntington Beach for the Civic Center and Central Library facilities total $12,141,246, net of unearned income. The site advances are included in the long term leases receivable and are amortized over the term of the leases. (4) Long-Term Debt A summary of the Corporation's bonded indebtedness as of June 30, 1981 is as follows: Maturities Date Interest Original Outstanding Annual Period Bond issue issue rates issue June 30, 1911 requirements covered Civic Center: Leasehold Mortgage Bonds, Varying amounts from First Issue (a) January, 1972 5.00 - 7.00% $11,100,000 $9,220,000 $200,000 to $890,000 1975-1988 Central Library: Leasehold Mortgage Bonds, Varying amounts from Second Issue (b) September, 1972 5.00 - 7.00% 5,000,000 4,260,000 $105,000 to $385,000 1975-1997 $16,100,000 1�,480,000 (a) The $11,100,000 principal amount of Leasehold Mortgage Bonds, First Issue (Bonds) are dated January 15, 1972 and were issued as coupon bonds in $5,000 denominations. These serial bonds mature annually on January 15. Interest is payable semi-annually on January 15 and July 15. Bonds maturing on or prior to January 15, 1982 .are generally not subject to call and redemption prior to their final maturity date. - Bonds maturing on or after January 15, 1983 (a principal amount of $9,090,000) are subject to call and redemption at the option of the Corporation, in total or in part, on January 15, 1982 or on any interest payment date thereafter. Cali price of the bonds shall be an amount equal to the principal amount plus a premium equal to 1/4 of 1 percent of the principal amount redeemed, plus 1/4 of 1 percent for each year or fraction of a year from the redemption date to the maturity date of the bonds. In no event shall the premium exceed 4-1/2 percent. 6 (4) Long-Term Debt, Continued (b) The $5,000,000 principal amount of Leasehold Mortgage Bonds, Second Issue (Bonds) are dated September 1, 1972 and were issued as coupon bonds in $5,000 denominations, These serial bonds mature annually on September 1. Interest is payable semi-annually on March 1 and September I. Bonds maturing on or prior to September 1, 1982 are generally not subject to call and redemption prior to their fixed maturity date. Bonds maturing on or after September 1, 1983 (a principal amount of $3,950,000) are subject to call and redemption at the option of the Corporation, in total or in part, on September 1, 1982 or on any interest payment date thereafter. Call price of the Bonds shall be an amount equal to the principal amount redeemed plus a premium equal to 1/4 of 1 percent of the principal amount redeemed, plus 1/4 of 1 percent for each year or fraction of a year from the redemption date to the maturity date of the Bonds. In no event shall the premium exceed 4 percent. 7 Parking Authority Of The City Of Huntington Beach Financial Statements June 30, 1981 and 1980 (With Accountants' Report Thereon) r� � r r� r �r r rr r r r rr �r rr �r rr r� r� ■r Certified Public Accountants 4400 MacArthur Boulevard R�Marwick,Mitchefl&Ca Newport Beach,California 92660 (714)951-2000 The Honorable Members of the Parking Authority City of Huntington Beach Huntington Beach, California We have examined the balance sheets of the Parking Authority of the City of Huntington Beach as of June 30, 1981 and 1980, and the related statements of earnings and retained earnings and changes in financial position for the years then ended. Our examinations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the aforementined financial statements present fairly the financial position of the Parking Authority of the City of Huntington Beach at June 30, 1981 and 1980, and the results of its operations and the changes in its financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. &AA.-J September 25, 1981 EXHIBIT I PARKING AUTHORITY OF THE CITY OF HUNTINGTON BEACH BALANCE SHEETS JUNE 30, 1981 and 1980 Assets: _ 1981 1980 Current assets: Cash and term deposits $ 163,863 $ 149,094 Receivables: Due from general fund 2,034 871 Accrued interest receivable 56,273 30,659 Total receivables 58,307 31,530 Total current assets 222,170 180 624 Restricted assets: Investments, at cost which approximates market (Note 3) 764,255 690,555 Cash with fiscal agent 7,594 1,156 Total restricted assets 771,849 691.711 Fixed assets, at cost: Land 371,065 3719065 Improvements 1,694,089 1,6949089 Less allowance for depreciation (821,959) (750,765) Total fixed assets, net 1,243,195 1,314,389 Total assets $Lint-2 4 $2,186,724 Liabilities and Retained EEarnings:_ Current liabilities:- Accrued interest payable $ 27,508 $ 28,925 Current installment of bonds payable (Note 3) 85,000 85,000 Matured interest payable from restricted assets 7,594 1,156 Total current liabilities 120,102 115,081 Bonds payable, net of current installment (Note 3) 1,510,000 1,595,000 Total liabilities 1,630,102 1,710,081 Retained earnings 607,112 476,643 Total liabilities and retained earnings $2,237,214 $2,186,724 �-.:�.i�ai ;; i.�t•�s to fina:v.'a1 = - Cements. -- - _ ---- -- 1 ■■� rr r r r rr r� rr r r r rr r r rr rr rr rr rr EXHIBIT It PARKING AUTHORITY OF THE CITY OF HUNTINGTON BEACH STATEMENTS OF EARNINGS AND RETAINED EARNINGS YEARS ENDED JUNE 30, 1981 and 1980 t98 t 1980 Operating revenue: Rentals (Note 2) $ 170,050 $ 170,050 Operating expenses: Depreciation 71,194 72,864 Net operating income 98,856 97,186 Non-operating revenue: Interest earned 114,847 89,257 Total operating and non-operating income 213,703 186,443 Non-operating expenses: Interest expense. 83,234 87,521 Net earnings 130,469 98,922 Retained earnings, beginning of year 476,643 377,721 Retained earnings, end of year $ 607,112 $ 47b,643 See accompanying notes to financial statements. 2 EXHIBIT III PARKING AUTHORITY OF THE CITY OF HUNTINGTON BEACH STATEMENTS OF CHANGES IN FINANCIAL POSITION YEARS ENDED JUNE 30, 1981 and 1980 198t 1980 Sources of working capital: Net earnings $130,469 $ 98,922 Item which does not use working capital: Depreciation of land improvements 71,194 72,864 $201,663 $171.786 Uses of working capital: Current installment of bonds payable $ 85,000 $ 85,000 Increase in restricted assets 80,138 53,626 Increase in working capital 36,525 33,160 $201,663 $171,786 Changes in components of working capital: Increase (decrease) in current assets: Cash and term deposits $ 14,769 $ 11,591 Receivables 26,777 20,035 $ 41,546 $ 31,626 Decrease (increase) in current liabilities: Accrued interest payable 1,417 1,.153 Matured interest payable (6,438) 5,381 Current installment of bonds payable -- (5,000) (5,021) 1,534 Increase in working capital $ 36,525 $ 33,160 See accompanying notes to financial statements. 3 PARKING AUTHORITY OF THE CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS JUNE 30, 1981 (1) Summary of Significant Accounting Policies Basis of Accounting The accompanying financial statements of the Parking Authority of the City of Huntington Beach (Parking Authority) have been prepared using the accrual basis of accounting. Fixed Assets and Depreciation Fixed assets are recorded at cost. Land improvements are depreciated using the straight-line method over the term of the lease with the City of Huntington Beach (City). Investments Investments are stated at cost and consist of Federal government backed securities and bank time certificates of deposit (see Note 3). Lease The Parking Authority leasing operations consist principally of the leasing of its parking facilities to the City of Huntington Beach. The Parking Authority lease with the City of Huntington Beach is classified as an operating lease. (2) Operations The Parking Authority is an independent public agency established in 1967 under provisions of the Parking Law of 1949. The primary purpose of the Parking Authority is to provide off-street parking facilities for the City of Huntington Beach. The Parking Authority leases its parking facilities to the City under a lease agreement which requires minimum annual rental payments of $170,050 through July 1, 1993• The Parking Authority obtained the funds to acquire and construct these facilities through the issuance of $2,300,000 of revenue bonds whic'i are secured by the rental payments received from the City. The rental is payable annually on July 1. Rental income is to be used for bond principal and interest requirements. Excess funds, if any, Including interest earned thereon, which are not required to meet scheduled principal and interest payments and which are not required by the bond indenture agreement to be established as a reserve may be: (1) used to finance additions and improvements to the parking facility, or (2) applied as a credit against annual rental payments from the City. 4 PARKING AUTHORITY OF THE CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS, CONTINUED (2) Operations (Continued) Under the terms of the lease agreement dated September 30, 1968 between the Parking Authority and the City, the lease is to terminate after all of the 1968 revenue bonds are retired or provision for retirement has been made. All costs of maintenance and operation have been assumed by the City. The City must also pay, in the form of additional rent, all taxes, assessments, insurance, fees and other expenses of the Parking Authority. At the termination of the lease, the Parking Authority will retain title to the parking facility. (3) Bonded Debt A summary of the Parking Authority bonded debt is as follows: Bonds Bonds Matured Matured Amount Bonds During Bonds During Bonds Date Years of Rates of Original Outstanding Fiscal Outstanding Fiscal Outstanding Description of Issue Maturity Interest Issue 1979 1980 6/30/80 1981 6/30/81 1968 Parking September, 1970-72 6.00% $ 150,000 Revenue Bonds 1968 1973-79 4.75 470,000 80,000 80,000 -- -- -- 1980-85 5.00 570,000 570,000 -- 570,000 85,000 485,000 1986-93 5.25 1,110,000 1,110,000 -- 1,110,000 -- 1,110,000 $2,300,000 1,760,000 80,OOO 1,680,000 85,000 1595 000 Interest is payable semi-annually on March 1 and September 1. Provisions of the bond agreement provide for the establishment of three special funds as follows: (a) Bond Service Fund - All revenues received by the Parking Authority from the lease of the parking facility are placed in the bond service fund. Money in this fund is used to pay bond principal and interest. Amounts received in excess of the amount required to meet principal and interest requirements may be transferred to the reserve fund or working capital fund. Under certain circumstances, such excess funds may be used to finance additions and improvements or reduce the annual rental due from_the City. 5 PARKING AUTHORITY OF THE CITY OF HUNTINGTON BEACH NOTES TO FINANCIAL STATEMENTS, CONTINUED (3) 3onded Debt ('ontinued) (b) Reserve Funds_ - An amount equal to one-half the maximum annual debt service must be set aside to be used to pay principal and interest currently payable in the event there is insufficient money in the bond service fund and may be applied to the final payments of principal and interest. (c) Working Capital Fund - After provision has been made for payment of bond principal and interest and an appropriate reserve fund balance has been established, excess money, if any, remaining in the bond service fund may be transferred to the working capital fund to he used to pay the administrative expenses of the Parking Authority and maintain the working capital fund's cash at a balance of at least $1,500. At June 30, 1981, the Parking Authority maintained the following investments pursuant to the terms of the bond agreement (see Note _ 1): 1981 1980 Bond Service Fund $666,011 $598,833 Reserve Fund 98,244 91,722 $764,255 $690,555 Bonds maturing on and after September 1, 1980 are subject to call and redemption at the option of the Parking Authority as a whole- or in part, in inverse order of maturity and by bond number within a single maturity on September 1, 1979 and on any interest payment date thereafter. The bonds are redeemable at par value plus accrued interest and a premium equal to 1/4 of 1 .percent for each year or portion of a year from the redemption date to the maturity date, up to a maximum of 3-1/2 percent. • 6