HomeMy WebLinkAboutFY 1988/1989 Comprehensive Annual Financial Report FY ended CITY V '
OFFICL T HE CITY CLERK
2000 MAIN STIMEET
CALIF. 92648
City of Huntington Beach, California
1 Comprehensive Annual Financial Report
For the fiscal year ended June 30, 1989
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Increase (Decrease)
' Percent from 1987/88
Amount of Total Amount Percent
City Council $ 156 .1 $ 26 20.0
' City Achninistrator 1,304 1.0 198 17.9
City Treasurer 322 .2 32 11.0
City Attorney 1,042 .8 69 7.1
City Clerk 293 .2 48 19.6
Administrative Services 3,409 2.5 122 3.7
Economic and Community Development 4,393 3.2 206 4.9
Fire 12,722 9.3 882 7.4
' Police 23,565 17.2 1,195 5.3
Community Services 7,595 5.5 641 9.2
Public Works 16,893 12.3 688 4.2
' Non-Departmental 7,088 5.2 (65) ( .9)
Capital Outlay 43,289 31.5 33,503 342.4
Debt Service 15,177 11.1 9,934 189.5
' Total 137,248 100.0 47,479 52.9
' City Council expenses increased due to the increased expense allowances adopted
during the year. Administration expenditures increased due to the effects of
reorganization and higher temporary salaries for the cable television operation.
' Expenditures for the City Clerk increased due to contractual services relating to
the November, 1988 election. Expenditures for the City Treasurer to increased due
to salaries and printing costs for new forms. Community Services expenditures
' increased due to higher temporary salaries and beach maintenance costs. Capital
outlay expenditures increased due to large property acquisitions in the Main/Pier
project area. Debt service expenditures increased due to the requirements of the
Public Financing Authority's revenue bonds and the repayment of debt from the Agency
' to the City.
Fund Equities- The City's total fund equities for governmental funds increased
' 30.2% and for proprietary funds increased 15.1% as shown in the table below
(expressed in thousands) :
' Total Total Percent
Equity Equity Increase
Governmental Funds 1988/89 1987/88 (Decrease)
General $29,543 $22,349 32.2
' Special Revenue 19,621 14,848 32.1
Debt Service 34,146 32,875 3.9
Capital Projects 53,736 35,099 53.1
Total 13$ 7,046 10$ 5,171 30.3
' Proprietary Funds
Internal Service $14,062 $12,561 11.9
Enterprise 40,640 35,091 15.8
' Total 5$ 4,702 117,652 14.8
' -viii-
The total fund equity is classified as follows (expressed in thousands) :
Total Total Percent t
Equity Equity Increase.
Governmental Funds 1988/89 1987/88 Decrease)
Reserved $119,976 $88,415 35.7 '
Unreserved/Designated 4,036 6,469 (37.6)
Unreserved/Undesignated 13,034 10,287 26.7
Total 13$ 7,046 J1Q5,171 30.3
Proprietary Funds '
Retained Earnings $ 4,462 1,516 194.8
Contributed Capital 50,240 49,362 1.8
Total 5S 4,702 5$ 0,878 7.5
The increases in governmental and proprietary fund equity show the general financial
health of the City. The increases in General Fund equity is largely due to
increases in amounts reserved for future, specific long-tenn projects. The
increases in Special Revenue Fund equity is due to revenue received from other
Governmental Agencies for projects to be completed in the future. The increases in
Capital Projects Fund Equity is due to advances from the City for specific future
projects and land purchases. The increase in net income for Internal Service Funds
is due to reduced liability and workers compensation expenditures. The increases in t
Enterprise Fund equity and retained earnings is due to the Water Fund's net income
of $2,191,152.
rie 'Prc� tart Operations
The City operates three enterprise and two internal service funds. Enterprise funds '
include the Water Utility Fund, the Meadowlark Golf Course Fund and the Emerald Cove
Housing Fund and are supported through user charges to the public. The internal
service funds include the Self-Insurance Fund and the Equipment Replacement Fund and '
are supported by charges to user departments within the City.
Shown below is a table comparing the performance of the City's enterprise funds to '
the prior year (dollar amounts expressed in thousands) .
1
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1
Meadowlark Emerald
' Water Utility Golf Course Cove Housing
1988/89 1987/88 1988/89 1987/88 1988/89 1987/88
Operating $13,483 $10,147 $283 $305 $607 $606
' Revenues
Operating $1,442 $(513) $256 $278 $248 $251
' Income (Loss)
Net Income (Loss) $2,191 $15 $221 $213 $13 $(35)
' Income Available 2,222 1,301 342 363 $462 $494
for Debt Service
' Debt Service, Bonds 31 39 121 123 $449 $450
and Notes
' Debt Service 71.7 33.3 2.8 3.0 1.0 1.1
Coverage
t A water rate increase during the year caused the increase in net income for the
Water Fund. All other changes were due to normal conditions.
' Shown below is a table comparing the performance of the City's internal service
funds to the prior year (expressed in thousands) :
' Equipment
Self-Insurance Replacement
' 1987/88 1988/89 1987/88 1988/89
tOperating Revenues $7,056 $6,896 $1,780 $1,581
Operating Income 812 130 (1,707) (828)
tNet Income 1,749 690 (1,228) (571)
' The increase in the net loss for the Equipment Replacement Fund is due to increased
depreciation charges (non-cash) for the City's replacement equipment. The increase
' in the net income for the Self-Insurance Fund is due to reduced claims expense.
Pension Obligations
The City is a participant in the California Public Employee's Retirement System
(PERS) . PERS sets rates that the City uses to make contributions on behalf of all
permanent employees and temporary employees who have worked in excess of 1000 hours
' during the year. At June 30, 1988, which is the most recent information available,
the City's total future pension obligation for all current and retired employees was
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$126,787,000 and assets available for these obligations was $120,609,000 leaving an '
unfunded pension benefit obligation of $6,1.78,000. This will be funded by future
contributions to PERS. t
The City also maintains a supplemental benefits plan. The City has not
set aside funds to pay the plan's unfunded liability of $7,071,000. Adequate '
funding of this supplemental plan will be addressed in the next few years.
Agency Funds
Total assets and liabilities of the City's agency funds increased by $3,054,887, or
27.3% to $14,209,157. This is due to increased employee participation in the City's '
section 457 deferred compensation plan and the Retiree Health Insurance Fund which
began during the year.
Debt Administration '
Below is a summary of the City's outstanding long-term debt at June 30, 1988 '
(expressed in thousands) :
Amount
Description Outstanding '
General Obligation Bonds
1970 Park Bonds $2,280
Special Assessment Bonds
Reservoir Hill Bonds 1,654
Revenue Bonds '
1963 Water Bonds 703
Parking Authority Bonds 700 '
Public Financing Authority Bonds (Redevelopment Agency) 26,510
Certificates of Participation '
Redevelopment Agency-
Emerald Cove Housing 4,536
Civic Improvement Corporation 19,610
Public rinancing Authority 5,510 '
Leasehold Mortgage Bonds '
Public racilities Corporation- 2nd Issue 2,770
Notes Payable '
Meadowlark Golf Course 1,700
San Joaquin Reservoir 166
County of Orange 336
Mortgages 2,875
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' OLher
Compensated Absences 4,435
' Redevelopment Agency Debt 83,884
Self-Insurance Claims 7,422
Amounts Due Under Owner Participation 3,588
' and Disposition and Development Agreements
Total 16�5 8,679
' 's Investor's Service rates certain obligations as to their_ safety�Y ga Y as an
investment. Below are the ratings of certain City obligations:
1970 Park Bonds Aa
Civic Improvement Corporation Certificates Al
' of Participation
Public Facilities Corporation Leasehold Mortgage Al
Bonds
' Parking Authority Revenue Bonds Al
The City's legal debt limitation for general obligation bonds is 150 of the total of
assessed valuation in the City. At June 30, 1989 the City's general obligation debt
' was $1,284,950,000 less than its legal debt limitation.
Further information on the City's long-term indebtedness is included in notes 10 and
' 11 to the general purpose financial statements.
Cash
' The City Treasurer is responsible for investing available cash in allowable
instruments. These include insured or collateralized certificates of deposit,
certain government securities, five year or less commercial paper rated A or better
' and the State Treasurer's Local Agency Investment Fund. The cash management system
of the City is designed to monitor and forecast revenues and expenditures to ensure
the investment of monies to the fullest extent possible. The criteria for selecting
' investments are, in order of priority, (1) safety, (2) liquidity, (3) yield.
Further information on the City's investments are detailed in note 3 to the general
purpose financial statements. The average total of non-restricted cash and
investments was $79,818,723 which yielded interest of $6,745,486 for a return of
' 8.33%.
The California Government Code requires the City Treasurer to prepare an annual
' statement of investment policy and monthly report containing specific information
regarding the City's investment policy. The City Treasurer has complied with this
law. Farther information on the City's investment is detailed in note 3 of the
' financial statements.
' -xii-
Risk Mara t '
The City is self-insured for liability, workers compensation and employee health '
claims. In October, 1988, the City entered into a joint-powers arrangement with
five other local cities which will provide coverage for liability claims in excess
of one-million dollars. This will reduce the City's exposure from large liability '
claims. At year-end, an estimate was made of the total cash that will be eventually
paid out by the City due to claims made through June 30, 1989. The City has set
aside sufficient cash to fund all outstanding liability, workers compensation and '
employee health insurance claims outstanding as of June 30, 1989
OTHER IlOh T ON '
Single Audit
In accordance with the Single Audit Act of 1984, the City's grant programs which '
utilize Federal funds, either directly or passed through from state or county
agencies, have been subjected to audit requirements of the Office of Management and
Budget. This included tests of compliance with Federal laws and regulations and an
organization-wide examination of financial operations. The results of this expanded
audit of grant activity are included under separate cover. Copies of the report are
available from this office. '
Financial Reporting CerLificates
The City has prepared an easily readable and efficiently organized Comprehensive '
Annual Financial Report. The City's report for the fiscal year ending June 30, 1988
has been given recognition from the Government Finance Officer's. Association (GFOA)
and the California Society of Municipal Finance Officers (CSMFO) . The GFOA awarded t
the City a Certificate of Achievement for Excellence in Financial Reporting which is
the highest form of recognition for financial reporting that the GFOA awards. The
certificate is valid for one year only and is awarded only to cities whose reports '
conform substantially with high standards of public financial reporting. The CSMFO
awarded the City a Certificate of Award for Outstanding Financial Reporting. This
is also the highest form of award given by the CSMFO. ,
We believe that this year's report continues to conform to the requirements of both
award programs and we are submitting it to both organizations to determine its '
eligibility for another award.
The City received similar recognition for its Annual Budget for 1987/88 from GFOA.
We are one of very few cities to receive recognition for both our Annual Budget and ,
Comprehensive Annual Financial Report.
1
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' SC EDUTIE C-1
' Park
Acquisition
Public and Narcotics Totals
' Cmmunications Grants Develommt Forfeiture 1989 1988
$ 51 $ - $ 3,007 $ 466 $ 16,901 $ 13,543
1 - 9 2 73 67
1,172 3,110 _ 5,300 4,766
1,289 1,644 437
' 52 2 461 $ 6,126 $ 468 23,918 18,813
$ 6 $ 163 $ 4 $ - $ 390 $ 340
t - 4 6 _ - 10 1-
14 14
3,110 3,378 3,452
505 - - 505 -
' - - - - - 140
10 674 3,114 - 4,297 3,965
463 212 - 2,706 2,558
t = 1,172 = = 1,922 � 1,314
423 585
5 - 1,418 - 3,550 1,550
37 152 1,382 468 11,020 8,841
' 42 1,787 3,012 468 19,621 14,848
' 52 2 461 $ 6,126 $ 468 23,918 $ 18,813
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CITY OF HUNTING ON BEACH '
SPECIAL REVENUE FUNDS '
CCIMIN]M STATIIEIVT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES '
For the year ended June 30, 1989
With comparative totals for the year ended June 30, 1988
(expressed in thousands) '
Planned '
Local
Gas Tax Sewer Drainage '
REVENUES:
Other taxes $ - $ - $ -
Licenses and permits - 249 -
Fran use of money and property 429 458 346
F % n other agencies 8,314 - 864
Fines, forfeitures and penalties - - -
TOTAL REVENUES 8,743 707 1,210 '
Current - - - '
City Achninistrator
Police - - -
Economic Develcpanent
Community Services - - -
Capital outlay 4,127 236 392
Non-departmental - - - '
TOTAL EXPENDITURES 4,127 236 392
EXCESS OF REVENUES OVER ,
(UNDER) EXPENDITURES 4,616 471 818
OTHER FINANCING SOURCES (USES) : '
Operating transfers out (1,291) - -
EXCESS OF REVENUES AND '
OTHER SOURCE'S OVER
(UNDER) EXP MIURM
AND OTHER USES 3,325 471 818 '
FUND BALANCE'S BEGINNING OF YEAR 1,725 4,674 3,351
Residual equity transfers in - - -
Residual equity transfers out - 52 - '
FUND BALANCE'S - END OF YEAR 5 050 5 093 4 169
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' SCI E= C-2
1
1
Park
Acquisition
Public and Naroatics Totals
' Ccumunications Grants Development Forfeiture 1989 1988
$ 217 $ - $ - $ - $ 217 $ 186
_ - 1,874 - 2,123 1,072
9 477 696 34 2,449 1,403
3,513 488 13,179 7,572
3
' 226 3,990 2,570 522 17,968 10,236
198 - - - 198 175
' = 9 _ = 9 13
748 748 1,178
76 47 123 145 .
25 2,856 3,110 64 10,810 6,618
' - 4 - - 4 -
223 3,693 3,157 64 11,892 8,129
' 3 297 (587) 458 6,076 2,107
- - - - (1,291) (1,438)
' 3 297 (587) 458 4,785 669
39 2,091 2,875 93 14,848 14,179
782 - 782
(601) (58) (83) (794)
42 1,787 3,012 $ 468 19,621 14,848
' -77-
SCHEDULE C-3 '
CITY OF HUNTINGION BEACH
SPECIAL REVENUE FUNDS '
axmnTIlc STATEl= OF REVENUES, EXPEMITURFS AND
CHANGES IN FUND ESAIANCES - BUDGET AND ACTUAL
(Continued) '
For the year ended June 30, 1989
(expressed in thousands)
GAS TAX '
Variance -
Favorable '
Budget Actual (Unfavorable)
REVENUES:
Fran use of money and property $ 220 $ 429 $ 209 '
Fran other agencies 6,906 8,314 1,408
TOTAL REVENUES 7,126 8,743 1,617
EXPENDITURES: '
Capital outlay 9,213 4,127 5,086
EXCESS OF REVENUE OVER (UNDER) ,
EXPENDITURES (2,087) 4,616 6,703
OTHER FINANCING USES: ,
CIperating transfers out (1,300) (1,291) 9
EXCESS OF REVENUES OVER (UNDER)
EXPENDITURES AND OTHER USES (3,387) 3,325 6,712 '
FUND BALANCE - BEGINNING OF YEAR 1,725 1,725 -
FUND BALANCE - END OF YEAR $ (1,662)$ 5,050 $ 6,712 '
SEWER
REUIIV(JFS
Licenses and permits $ 220 $ 249 $ 29
From use of money and property 302 458 156 '
TOTAL REVENUES 522 707 185
EXPENDITURES: '
Capital outlay 684 236 448
EXCESS OF REVENUE OVER (UNDER)
EXPENDITURES (162) 471 633
FUND BALANCE - BEGINNING OF YEAR 4,674 4,674 - '
Residual equity transfer out (52) (52) -
FUND BALANCE - END OF YEAR $ 4,460 $ 5,093 $ 633
(CONTINUED) '
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1
' SCEEDULE C-3
CITY OF HUNTINGTON BEACH
' CO MnM4G STATE[U OF REVENUES, EXPENDMURES AND
CHANGES IN FUND BAIANCES - BUDGET AND ACIUAL
' (Continued)
For the year ended June 30, 1989
(expressed in thousands)
1
' PLANNED LOCAL DRAINAGE
' Variance -
Favorable
Budcget Actual (Unfavorable)
REVENUES:
' Fran use of money and property $ 203 $ 346 $ 143
Fran other agencies 650 864 214
tTOTAL REVENUES 853 1,210 357
EXPENDITURES:
' Capital outlay 2,133 392 1,741
EXCESS OF REVENUE OVER (UNDER)
E GIENDIZURFH (1,280) 818 2,098
FUND BALANCE - BEGINNING, OF YEAR 3,351 3,351 -
' FUND BALANCE - END OF YEAR $ 2,071 $ 4,169 $ 2,098
t
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' -79-
SCHEDULE C-3
CITY OF H[JNrINGPON BEACH
SPECIAL REVENUE FUNDS '
OOMBTNTNG STATII�Pr OF REVENUES, EXPENDITURES AND '
CHANGES IN FUND BALANCES - BUDMr AND ACTUAL
(Continued)
For the year ended June 30, 1989 '
(expressed in thousands)
PUBLIC M24UNICATIONS '
Variance -
Favorable '
Budget Actual (Unfavorable)
REVENUES:
Other taxes $ 209 $ 217 $ 8 t
From use of money and property 9 9 -
TOTAL REVENUES 218 226 8
EXPENDITURES: '
City Administrator 189 198 (9)
Capital outlay 31 25 6
TOTAL EXPENDITURES 220 223 (3) t
EXCESS OF REVENUE OVER
(UNDER) EXPIIdDITURFS (2) 3 5
FUND BALANCE - BEGINNING OF YEAR 39 39
FUND BALANCE - END OF YEAR $ 37 $ 42 $ 5 '
GRANTS
REVENUES: ,
From use of money and property $ 265 $ 477 $ 212
From other agencies 1,272 3,513 2,241
TOTAL REVENUES 1,537 3,990 2,453 '
E PENDITURFS:
Non-departmental 4 4 - '
Economic Development 437 748 (311)
Police 10 9 1
Community Services 87 76 11
Capital outlay 5,952 2,856 3,096 '
TOTAL EXPENDMURFS 6,490 3,693 2,797
EXCESS OF REVENUE OVER (UNDER)
EXPENDITURES (4,953) 297 5,250 '
FUND BALANCE - BEGINNING OF YEAR 2,091 2,091 -
Residual equity transfer out (601) (601) - '
FUND BALANCE - END OF YEAR $ (3,463)$ 1,787 $ 5,250
( ) '
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' SCUEQJIE C-3
CITY OF HUNTINGTON BEACH
' SPECIAL REVENUE FUNDS
' CMMINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDMT AND ACIUAL
(Continued)
' For the year ended June 30, 1989
(expressed in thousands)
' PARK ACQUISITION AND DEVELOPMENT
' variance -
Favorable
Budget Actual (Unfavorable)
REVENUES:
' Licenses and permits $ 1,500 $ 1,874 $ 374
From use of money and property 568 696 128
TOTAL REVENUES 2,068 2,570 502
' EXPENDITURES:
Cm m nity Services 102 47 55
' Capital outlay 4,698 3,110 1,588
TOTAL F UMITURES 4,800 3,157 1,643
EXCESS OF REVENUE OVER (UNDER)
' EX]PENIDITURES (2,732) (587) 2,145
FUND BALANCE - BEGINNING OF YEAR 2,875 2,875 -
' Residual equity transfer in 782 782
Residual equity transfer out (58) (58)
' FUND BALANCE - END OF YEAR $ 867 $ 3,012 $ 2,145
' NARCOTICS FORFEITURE
REVENUES:
Fran use of money and property $ - $ 34 $ 34
' Fran other agencies 610 488 (122)
'DOTAL REVENUES 610 522 (88)
' EXPIIdDITURES:
Capital outlay 198 64 134
' EXCESS OF REVENUE OVER
EXPENDITURES 412 458 46
FUND BALANCE - BEGINNING OF YEAR 93 93 -
' Residual equity transfer out (83) (83) -
FUND BALANCE - END OF YEAR $ 422 $ 468 $ 46
1 ( )
' -81-
SC HEDUIE C-3 '
CITY OF HUNI'DVION BEACH
SPECIAL REVENUE FUNDS '
axen IId- STATEMENT' OF REVENUES, EXI�EiDIZURES AND '
C00G S IN FUND BAIANC ES - BUDGET AND ACTUAL
(Continued)
For the year ended June 30, 1989 '
(expressed in thousands)
TOTALS
Variance - '
Favorable
Budget Actual (Unfavorable) '
REVENUES:
Other taxes $ 209 $ 217 $ 8
Licenses and permits 1,720 2,123 403
From use of money and property 1,567 2,449 882 '
ft%= other agencies 9,438 13,179 3,741
TOTAL REVENUES 12,934 17,968 5,034 '
Ena�EIDI'IURES:
Nonni 4 4 -
City Adninistrator 189 198 (9) '
Ecorr.mic DevelopTkent 437 748 (311)
Police 10 9 1
C mmmnity Services 189 123 66 '
Capital outlay 22,909 10,810 12,099
TOTAL EXPENDrARMS 23,738 11,892 11,846 '
EXCESS OF REVENUE OVER (UNDER)
EXPENDITURES (10,804) 6,076 16,880
OTHER FINANCING USES: '
Operating transfers out (1,300) (1,291) 9
EXCESS OF REVENUES OVER ,
(UNDER) EXPENDITURES
AND OTHER USES (12,104) 4,785 16,889 '
FUND BALANCE - BEGINNING OF YEAR 14,848 14,848 -
Residual equity transfers in 782 782 -
Residual equity transfers out (794) (794) - '
FUND BAIANCE - END OF YEAR ,$ 21732 $ 19,621 $ 16,889
1
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DM SINnM FUNDS
' Debt service funds are used to account for the accumulation of resources for the
payment of general long-term debt.
' 1970 Park Bonds- This fund records the receipt and disbursement of property tax
revenues to meet the debt service requirements of the 1970 Park Bonds, a general
obligation bond.
' Redevelopment Agency- This fund records the property tax increment revenues received
due to Redevelopment projects. The tax increment will be used to repay the debt of the
Redevelopment Agency.
Public Facilities Corporation- This records the accumulation and disbursement of monies
required to meet the debt service requirements of the Huntington Beach Public
' Facilities Corporation.
Parking Authority- This fund records the accumulation and disbursement of monies to
meet the debt service requirements of the Parking Authority of the City of Huntington
' Beach.
Public Financing Authority- This fund records the accumulation and disbursement of
' monies to meet the debt service requirements of the Huntington Beach Public Financing
Authority.
Reservoir Hill Assessment District- This fund records the accumulation and
disbursements of monies to meet the debt service requirements of the Reservoir Hill
Assessment Bonds.
1
CITY OF HUNrING'IM BEACH
Der SERVICE FUNDS '
OCHBINING BALANCE SHEET
June 30, 1989 '
With couparative totals for June 30, 1988
(expressed in thousands)
1
1970
Park Redevelcpykent '
Bonds Agency
ASSETS
Cash and investments $ 180 $ 3,714
Cash with fiscal agent - - '
Taxes receivable 14 34
Interest receivable 1 17
Advances to other funds -
TOTAL ASSETS 195 3 765
L MILSTIFS AND FUND BALANCES '
LIABILITIES: '
Deferred revenue - $
FUND BALANCES:
: '
Reserved for long-terns receivable - -
Reserved for debt service 195 3,765
TOTAL FUND BALANCES 195 3,765 '
TOTAL LIABIT AND FUND BALANCES 195 3,765
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' SCEE= D-1
1
Public civic Public
Facilities Parking Inprovement Financing Totals
Corporation Authority corporation Authority 1989 1988
$ - $ - $ - $ - $ 3,894 $ 2,644
t 630 1,114 1,815 5,510 9,069 15,153
48 113
20 32 4 82 156 96
t - - - 21,340 21,340 15,237
650 1,146 $ 1,819 26,932 34,507 33,243
' - - - 361 361 368
' - - - 21,340 21,340 -
650 1,146 1,819 5,231 12,806 32,875
' 650 1,146 1,819 26,571 34,146 32,875
650 1,146 1 819 26,932 34,507 33,243
' -84-
CITY OF BUNrINGION EEAC H[
DEBT SERVICE FUNDS
COMBINING STATEMENT' OF REVENUES, EXPEMIZURES
AND CHANGES IN FUND BALANCES '
For the year ended June 30, 1989
With cmparative totals for June 30, 1988
(expressed in thousands) '
1970 '
Park Redevelopment
Bonds Agency
REVENUES:
Property taxes $ 516 $ 2,782 '
Fran use of money and property 15 298
TOM REVENUES 531 3,080 '
EXPENDITURES:
Current: '
Non-departmental - -
Debt service:
Principal 310 212
Interest 156 1,744 '
TOTAL IMPENDITURES 466 1,956
EXCESS OF REVENUES OVER (UNDER) EY 'IIMMIRES 65 1,124 '
0= MiANCING SOURCES (USES)
Proceeds of long-term debt - -
Operating transfers in - -
Operating transfers out - -
TOTAL OTHER FMANCING SOURCES (USES) - -
EXCESS OF REVENUES AND OTHER SOURCES '
OVER EXPENDITURES AND OTHER USES 65 1,124
FUND BALANCES - BEGINNING OF YEAR 130 2,641 '
Residual equity transfer out - -
FUND BALANCES - END OF YEAR 195 3,765 '
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SCHEDULE o-2
1
1
' Public civic Public
Facilities Parking Improvement Financing Totals
Corporation Authority Corporation Authority 1989 1988
t $ - $ - $ - $ - $ 3,298 $ 2,057
59 83 147 2,590 3,192 674
' 59 83 147 2,590 6,490 2,731
' - - - 55 55 98
230 125 220 265 1,362 975
' 159 39 1,521 2,180 5,799 2,545
389 164 1,741 2,500 71216 3,618
' (330) (81) (1,594) 90 (726) (887)
' - - - - - 26,313
399 - 1,601 - 2,000 1,874
' - (3) - _ (3)
399 (3) 1,601 1,997 28,187
' 69 (84) 7 90 1,271 27,300
t581 1,230 1,812 26,481 32,875 6,925
- - - - - (1,350)
' 650 1,146 1 819 26 571 34,146 32 875
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SCHEDULE D-3
CITY OF HUN 'INGDON BEACH
DEBT SERVICE FUNDS '
azon ING STATEMENT OF REVIIVUES, E-MENDrARMS AND '
CHMIGE.'S IN FUND BALANCES - BUDGET AND ACTUAL
For the year ended June 30, 1989
(expressed in thousands) '
1970 PARK BONDS ' -
Variance -
Favorable
Budget Actual (Unfavorable)
REVENUES:
Property taxes $ 465 $ 516 $ 51
F xn use of money and property 5 15 10 '
TOTAL RE HUES 470 531 61
EXPENDITURES: '
Principal 310 310 -
Interest 179 156 23 t
TOTAL E}0 ENDIZURE.S 489 466 23
EXCESS OF REVENUE OVER '
(UNDER) EXPE NDITUM (19) 65 84
FUND allM E - B INN] G OF YEAR 130 130
FUND BALANCE - END OF YEAR $ 111 $ 195 84
REDEYE MPNENT AGENCY '
REVEM M: '
Property taxes $ 1,756 $ 2,782 $ 1,026
Fran use of money and property 174 298 124
TOTAL REVENUES 1,930 3,080 1,150 '
EXPEMdDI'T(MMSS:
Principal 212 212 - '
Interest 2,447 1,744 703
TOTAL EXPENDITURES 2,659 1,956 703 '
EXCESS OF REVENUES OVER
(UNOM) EXPENDITURES (729) 1,124 1,853
FUND BALANCE - BEGINNING OF YEAR 2,641 2,641 - '
FUND RUANCE - END OF YEAR $ 1,912 $ 3,765 1 853
(CONTINUED)
-87- '
' CITY OF HUNT NIGIM BEACH SCHEDULE D-3
' DEBT SERVICE FUNDS
COMBINING SrATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
' (Continued)
For the year ended June 30, 1989
(expressed in thousands)
' PUBLIC FACILITIES CORPORATION
Variance -
Favorable
Budget Actual (Unfavorable)
REVENUES:
' Fran use of money and property $ 84 $ 59 $ (25)
EXPENDITURES:
Principal 230 230 -
' Interest 169 159 10
TOTAL EXPENDITURES 399 389 10
' EXCESS OF REVENUE OVER
(UNDER) N-Cp DImum (315) (330) (15)
' OTHER F NANCING SOURCES:Operating transfers in 399 399 -
EXCESS OF REVENUE AND OTHER SOURCES
tOVER (UNDER) EX14NDITURFS 84 69 (15)
FUND BALANCE - BEGINNING OF YEAR 581 581 -
' FUND BALANCE - END OF YEAR $ 665 $ 650 $ (15)
PAMCTIG AUTHORITY
REVENUES:
' Frcm use of money and property $ 255 $ 83 $ (172)
EXPENDITURES:
Principal 125 125 -
' Interest - 39 (39)
TOTAL EXPENDITURES 125 164 (39)
t EXCESS OF REVENUE OVER
(UNDER) E MMITURES 130 (81) 211
' OTHER FINANCING SOURCES:Operating transfer out -
01 (3)
EXCESS OF REVENUE AND OTHER SOURCES
' OVER (UNDER) EXPENDITURES 130 (84) (214)
FUND BALANCE - BEGINNING OF YEAR 1,230 1,230 -
FUND BALANCE - END OF YEAR $ 1,360 $ 1,146 $ (214)
(CONrINUID)
' -88-
SCHE]= D-3
CITY OF HUNTING ON BEACH t
DEBT SERVICE FUNDS
COINING SMEMENT OF REVENUES, IMENDITURES AND
CHANGES IN FUND BALANCES - BUDGES AND ACIUAL
(Continued)
For the year ended June 30, 1989
(expressed in thousands)
CIVIC IMPROVEMENT CORPORATION
Variance
Favorable
Budget Actual (Unfavorable)
REVENUES '
Fran use of money and property $ 160 $ 147 $ (13)
EXPENDITURES: '
Principal 220 220 -
Interest 1,515 1,521 (6)
TOTAL EXPENDITURES 1,735 1,741 (6)
EXCESS OF REVENUE OVER (UNDER) '
EXPENDITURES (1,575) (1,594) (19)
OTHER FINANCING,ANCIlJG SOURCES: '
Operating transfers in 1,700 1,601 (99)
EXCESS OF REVENUE AND OTHER
SOURCES OVER (UNDER) '
EXPENDITURES 125 7 (118)
FUND BALANCE - BEGINNING OF YEAR 1,812 1,812 -
FUND BALANCE - END OF YEAR $ 1,937 $ 1,819 118) '
PUBLIC FINANCING AVIiiORITY '
REVENUES:
Fran use of money and property $ 2,590 $ 2,590 $ - '
EXPENDITURES:
Non 55 55 -
Principal 265 265 -
Interest 2,180 2,180 - '
TOTAL EXPENDITURES 2,500 2,500 -
E,XCESS OF REVENUES OVER '
EXPNDITURFS 90 90 -
FUND BALANCE - BEGINNING OF YEAR 26,481 26,481 - '
FUND BALANCE - END OF YEAR 26 571 $ 26,571 $ -
-89-
tSCHEDUTE D-3
' CITY OF HUN MGTON BEACH
DEBT SERVICE FUNDS
' COMINI1n SMMMM OF REVENUES, EXPENDITURES AND
CHMNGE'.S IN FUND allMCES - BJD= AND ACTUAL
' (Continued)
For the year ended June 30, 1989
(expressed in thousands)
1
TOTALS
' Variance -
Favorable
t Budget Actual (Unfavorable)
REVENUES:
Property taxes $ 2,221 $ 3,298 $ 1,077
Fran use of money and property 3,268 3,192 (76)
' TOTAL REVENUES 5,489 6,490 1,001
' EXPENDITURES:
Non 55 55
Principal 1,362 1,362 -
' Interest 6,490 5,799 691
TOTAL EXPE NDMURES 7,907 7,216 691
' EXCESS OF REVENUE OVER (UNDER)
E (PENDI'IURES (2,418) (726) 1,692
' OTHER, F NANC IM SOURCES (USES)
Operating transfers in 2,099 2,000 (99)
Operating transfers out - (3) (3)
' TOTAL OTHER FINANCIM
SOURCES (USES) 2,099 1,997 (102)
' EXCESS OF REVENUE AND OTHER
SOURCES OVER (UNDER)
ECMIDITURFS AND OTHER USES (319) 1,271 1,590
' FUND BALANCE - BEGINNING OF YEAR 32,875 32,875 -
tFUND BATMCE - END OF YEAR $ 32,556 $ 34,146 1,590
-90-
1
1
CAPrML PROMCI,S FUNDS
Capital projects funds are used to account for the acquisition and construction of
major capital facilities other than those financed by proprietary funds.
Parking Structure- This fund accounts for the construction of parking garages from
' proceeds of the Huntington Beach Civic Improvement Corporation Certificates of
Participation.
' Redevelopment Agency- This fund accounts for acquisition and construction activity in
the five project areas.
' Low-Income Housing- This fund accounts for acquisition and construction activity for
low-income housing. The California Health and Safety Code requires that 20% of all tax
increment revenue received by the Redevelopment Agency be set aside in this fund for
' low-income housing development.
Public Facilities Corporation- This fund accounts for major capital improvements made
' to the Library complex by the Huntington Beach Public Facilities Corporation.
Parking Authority This fund accounts for capital improvements made to certain off-
street beach parking facilities.
' Capital Improvement Fund- This fund accounts for major capital improvements authorized
by the City Council.
Reservoir Hill Assessment District- This fund accounts for the capital improvements
made from the proceeds of the Reservoir Hill Assessment District Bonds 88-1.
1
1
CITY OF HUNI'I14911M B'FAal
CAPITAL PRa7DC S FUNDS
OCINING BALANCE SHEET
June 30, 1989
With comparative totals for June 30, 1988
(expressed in thousands) '
Parking Redevelopment t
Structure Agency
ASSETS '
Cash and investments $ 2,665 $ 12,919
Cash with fiscal agent - - '
Taxes receivable - -
Accounts receivable 2,350
Interest receivable 20 75
Advances to other funds 7,425 '
Land held for resale - 19,549
TOTAL ASSETS $ 101110 $ 34,893 '
LIABILITIES AND FUND BALANCES '
LIABILITIES:
Accounts payable $ - $ 124
Accrued liabilities - 8 '
Deferred revenue 675 -
Notes payable - -
TOTAL LIABILITIES 675 132 '
FUND BALANCES: '
Reserved for land held for resale - 19,549
Reserved for continuing projects 2,685 12,862
Reserved for long-tern receivables 6,750 2,350
TOTAL FUND BALANCES 9,435 34,761 '
TOTAL LIABILITIES AND FUND BALANCES $ 10,110 $ 34,893 '
1
-91- '
' SCHEDULE E-1
1
1
' Reservoir
Iaw Public Hill
' Inccame Facilities Parking Capital Assessment Totals
Housincr Corporation Authority Improyement District 1989 1988
' $ 5,260 $ - - 3,394 $ - $ 24,238 $ 30,856
- 148 153 - 563 864 139
' - 8 - - - 8 24-
2,350
6 5 1 7 - 114 148
- 7,425 -
- - - -
19,549 4,854
' 5 274 $ 153 154 $ 3,401 $ 563 L2t 548 36 021
$ - $ - $ - $ 5 $ - $ 129 $ 87
' - - - - - 8 17
675
- 818
' - - - 5 - 812 922
' - - - - - 19,549 4,854
5,274 153 154 3,396 563 25,087 30,245
- - - - - 9,100 -
5,274 153 154 3,396 563 53,736 35,099
5 274 $ 153 154 $ 3,401 $ 563 54 548 36 021
-92-
r
CITY OF HUNrINGTON BEACH
CAPITAL PR0ITECI'S FUNDS
COINING STATMMU OF REVR OM, EXPENDI'1URES
AND C ANGES IN FUND BALANCES
For the year ended June 30, 1989
With comparative totals for June 30, 1988
(expressed in thousands) '
Parking Redevelopment '
Structure Agency
REVENUES:
Property taxes $ - $ -
From use of money and property 189 951 '
Contributions from property owners - -
TOTAL RENAMES 189 951 '
EXPENDITURES:
Current:
City Council - 43 '
City Administrator - 324
City Treasurer - 2
City Attorney - 627
City Clerk - 123 '
Administrative Services - 453
Ca mmunity Development - 1,535
Public Works - 388 '
Non-departmental - 17
Capital outlay 2,880 26,648
Debt Service: '
Principal - 4,984
Interest - 2,315
TO'PAL EXPENDITURES _ 2,880 37,459 '
EXCESS OF REVENUES OVER (UNDER)
EiDI'IURES (2,691) (36,508)
OTHER FINANCIM SOURCES (USES) : '
Operating transfers in - -
Advances from other funds - 44,677
Proceeds of long-term debt - 6,463 '
Operating transfers out - -
Gain on sale of land - -
Other - 1,250 '
TOTAL OTHER FINANCING SOURCES (USES) - 52,390
EXCESS OF REVENUES AND OTHER SOURCES
OVER (UNDER) EXPENDITURES AND '
OTHER USES (2,691) 15,882
FUND BALANCES - BEGINNING OF YEAR 12,126 18,879
Residual equity transfers in - - '
Residual equity transfers out - -
FUND BALANCES - END OF YEAR $ 9,435 $ 34,761 '
-93-
' SaDMUIE E-2
1
' Reservoir
Law Public Hill
' Inome Facilities Parking Capital Assessment Totals
Housinq Corporation Authority Improvement District 1989 1988
' $ 493 $ - $ - $ - $ 107 $ 600 $ 391
226 13 5 294 35 1,713 1,580
- - - - 1,654 1,654 -
' 719 13 5 294 1,796 3,967 1,971
' _ _ _ _ _ 43 52
324 298
- - - 2 2
' - - - 627 597- -
123 117
- - 453 431
_ - 388 1, 994
388 370
17 15
- - 24 762 1,139 31,453 2,191
53 - - - - 5,037 -
436 - - - - 2,751 1,723
' 489 - 24 762 1,139 42,753 6,790
' 230 - (19) (468) 657 (38,786) (4,819
- - 173 - - 173 -
' 1,356 _ _ _ _ 46,033 21,108
6,463
- (32)
' - - - 727- -
1,250
1,356 - 173 - - 53,919 21,803
1,586 13 154 (468) 657 15,133 16,984
' 3,748 140 206 - - 35,099 18,115
- - - 3,864 - 3,864 -
60 - (206) - (94) 360 -
' S 274 $ 153 154 $ 3,396 $ 563 L.5 736 LIL099
' -94-
1
1
1
ENTERPRISE EUMS
1
Enterprise funds are used to account for operations that are financed and operated in a
' manner similar to private business enterprises where the intent of the City is to
recover the costs of providing the goods or services to the general public on a
continuing basis be financed or recovered through user charges or where the City
' desires a periodic determination of net income.
' Water Utility- This accounts for the City's water service to residents and businesses.
Meadowlark Golf Course- This fund accounts for the operations of a City-owned golf
' course which is leased to a private corporation which pays the City rent based on the
operation's total revenues.
' Emcrald Cove Housing- This fund-is used to account for the operation of a senior
citizen apartment coaplex.
1
1
CITY OF HUNTINGTON BEACH
IIVTERPRISE FUNDS '
COMBMI% BALANCE SHEET
June 30, 1989 '
With cmparative totals for June 30, 1988
(expressed in thousands)
Water Utility
ASSETS
CURB 4T ASSETS: '
Cash and terns investments $ 7,200
Accounts receivable 1,146
Accrued interest receivable 34 '
Unbilled receivables 1,373
TOTAL CURRENT ASSETS 9,753
OILIER ASSETS:
Cash with fiscal agent 614 t
Advances to other funds 1,417
TONAL OIIm ASSETS 2,031
PLANT, PROPERTY AND EQUTIPMENT' (AT COST) : '
Land 391
Buildings 971 '
Machinery and equipment 49,205
50,567
Less accm lated depreciation (22,129)
TOTAL PLANT, PROPERTY AND EQiTIPNI M 28,438 '
TOTAL ASSETS $ 40,222
LIABILITIES AND FUND EWITY ,
CURRENT T TABILITIES:
Accounts payable $ 1,306 '
Accrued payroll 36
Accrued interest 6
Deposits 1,085
Current portion of long-term debt 241 '
TOTAL CURRENT LIABILITIES 2,674
IiI ITT: '
Bonds payable 703
Nate payable 166
Certificates of Participation -
Compensated absences payable 128 '
Advances to other funds -
T current portion (241)
TONAL L0NG-qTM DEBT 756 '
TOTAL LIABILITIES 3,430
FUND EQUITY:
Contributed capital 34,884
Retained earnings (deficit) : '
Unreserved 1,908
TOTAL FUND EQUITY 36,792
TOTAL LIABILITIES AND FUND EWITY $ 40,222 '
-95-
1 SCIIM= F-1
1
1
Meadowlark Emerald
' Golf Owe Totals
Course Housing 1989 1988
' $ 1,001 $ 1,582 $ 9,783 $ 6,522
- - 1,146 472
' 5 19 58 40-
1,373 1,218
1,006 1,601 12,360 8,252
' _ 322 936 1,448
1,417 1,289
- 322 2,353 2,737
3,052 1,289 4,732 4,732
' 260 4,102 5,333 5,333
359 49,564 49,134
3,671 5,391 59,629 59,199
(518) (328) (22,975) (21,603)
' 3,153 5,063 36,654 37,596
$ 4,159 $ 6,986 ,$ 51,367 $ 481585
' $ _ $ 15 $ 1,321 $ 814
36 95
41 37 84 79
24 1,109 1,416
' 29 - 270 260
70 76 2,820 2,664
' - _ 703 869
1,700 1,866 1,949
- 4,536 4,536 4,523
' _ - 128 119
944 944 944
(29) - (270) (260)
' 1,671 5,480 7,907 8,144
1,741 5,556 10,727 10,808
1,267 1,435 37,586 37,148
' 1,151 (5) 3,054 629
2,418 1,430 40,640 37,777
' $ 4,159 Ss 6,986 $ 51,367 $ 48,585
-96-
CITY OF HUNTINGIC)N MACH
ENIEPPRISE FUNDS '
CIUM ING STAZEMERr OF REVENUES, EXPENSES
AND CHANGES IN RETAINED EARNINGS '
For the year ended June 30, 1989
With cagmrative totals for year ended June 30, 1988
(expressed in thousands) '
Water '
Utility
OPERATING REVENUES:
Water sales $ 12,467 '
Rentals -
Other revenues 1,016
TOTAL OPERATING REVENUES 13,483 '
OPERATING, EXPENSES: ,
Water purchases 2,807
Administration 882
Engineering 1,282
Production 2,490 '
Maintenance 956
Water meters 520
Contribution to General Fund in lieu of taxes 1,829 '
Depreciation 1,275
TOTAL OPERATING EXPENSES 12,041 t
OPERATING INCCME (LOSS) 1,442
NON-OPERATING REVENUES (EXPENSES) : '
Interest irccme 780
Interest expense (31)
TO1AL NON-OPERATING REVENUES (EXPENSES) 749 '
NET INCOME 2,191 '
RETAINED EARNINGS (DEFICIT) - BEJGMUM OF YEAR (283)
RETAINED FAR C24GS - END OF YEAR $ 11908 t
-97-
' SC EDUIE F-2
t
' Meadowlark IInerald
Golf Cave Totals
Course Housing 1989 1988
' $ - $ - $ 12,467 $ 9,698
283 604 887 911
- 3 1,019 449
' 283 607 14,373 11,058
- - 2,807 2,988
222 1,104 581
' _ 1,282 827
2,490 2,123
-- 47 1,003 1,167
- 520 595
' t - 1,829 1,390
27 90 1,392 1,353
' 27 359 12,427 11,024
256 248 1,946 34
' 86 214 1,080 771
(121) (449) (601) (612)
(35) (235) 479 159
' 221 13 2,425 193
930 (18) 629 436
' $ 1,151 Ss (5) $ 31054 $ 629
' -98-
CITY OF HUN INGION MACH '
ENTERPRISE FUNDS '
CCH BIKING STATEMENT OF C E ANGFS IN FINANCIAL POSITION
For the year ended June 30, 1989 '
With gnparative totals for year ended June 30, 1988
(expressed in thousands)
Water t
Utility
SOURCES OF WORK M CAPITAL:
Operations: '
Net income $ 2,191
Loss on sale of plant, property and equipment 9
Depreciation 1,275
Working capital provided by operations 3,475 '
Sale of plant, property and equipment -
Contributions received 376
Increase in certificates of participation - '
Decrease in restricted assets 151
Increase in coanpen_sated absences 9
TOTAL SOURCE'S OF WORIUM CAPITAL 4,011 '
USES OF WORKING CAPITAL:
Increase in plant, property and equipment 459 '
Decrease in long-term notes 64
Decrease in long-term bonds 166
Increase in advances from other funds 128 '
Increase in restricted assets -
Decrease in cmpensated absences -
TOTAL USES OF WORKING CAPITAL 817 ,
NET INCREASE IN WORKING CAPITAL $ 3,194
MA'S OF NET INCREASE (DECREASE) IN WORKING CAPITAL: '
Cash and term investments $ 2,533
Interest receivable 10 '
Accounts receivable 676
Unbilled receivables 155
Acquits payable (530) '
Due to other funds 59
Interest payable (6)
Deposits 307
Current portion of long-term debt (10) '
NET INCREASE IN WORKING CAPITAL ,$ 3,194
-99-
1
' SCIE= F-3
Meadowlark Ehierald
' Golf Cove Totals
Course Housing 1989 1988
' $ 221 $ 13 $ 2,425 $ 193
- - 9 12
' 27 90 1,392 1,353
248 103 3,826 1,558
5
62 438 2,496
13 13 13
361 512 70
9 -
' 248 539 4,798 4,142
459 2,720
29 93 79
166 -
' 128 1,118
34
6
' 29 - 846 3,957
$ 219 $ 539 $ 3,952 $ 185
$ 218 $ 510 $ 3,261 $ 452
' _ 8 18 10
(2) 674 (9)
- 155 289
23 (507) 66
59 (33)
1 - (5) 6
307 (593)
(10) (3)
$ 219 $ 539 $ 3,952 $ 185
-100-
1
INTERNAL SERVICE FUNM
' Internal service funds are account for the financing of s or services
used to g good
' provided by one City department to others on a cost reimbursement basis.
' Self Insurance- This fund accounts for the City's self insurance activities
(liability, health and workers compensation) .
' Equipment Replacement- This fund accounts for the purchase and operation of certain
vehicles and equipment leased to City departments.
1
CITY OF HUNTINGTON BEACH
INTERNAL SERVICE FUNDS '
COMBINING BALANCE SHEET '
June 30, 1989
With comparative totals for June 30, 1988
(expressed in thousands) '
ASSETS '
Self Equipmnent Totals '
Insurance Replacement 1989 1988
CURRENT ASSET:
Cash and investments $ 8,264 $ 3,389 $ 11,653 $ 9,917
Accounts receivable 4 - 4 '
Accrued interest receivable 42 63 105 52
TOTAL CLIMU V'T ASSETS 8,310 3,452 11,762 9,969 '
OTC ASSETS:
Investment in joint venture 184 - 184 - '
Cash with fiscal agent - 4,822 4,822 -
TONAL OTHER ASSETS 184 4,822 5,006 -
PLANT, PROPERTY AND EQUIPMENT (AT CX)ST) :
Machinery and equipment - 22,342 22,342 21,267
Less accumulated depreciation - (11,440) (11,440) (10,128 '
TOTAL PLANT, PROPERTY AND
EQUIPMENT - 10,902 10,902 11,139 '
TOTAL ASSETS 8 494 19,176 27 670 Laj.L108 '
-101- '
' SCHE= G-1
1
' LIABILITIES AND FUND BQ=
t Self Equip wnt Totals
Insurance Replacement, 1989 1988
CiJFtRM LIABILITIES:
Accounts payable $ 160 $ 19 $ 179 $ 219
' Accrued payroll 36 - 36 43
Accrued interest 125 125
Current portion of long-term debt - 73 73 73
' TOTAL CUM= LIABILITIES 196 217 413 335
' OTHER LIABILITIES:Note payable -
336 336 409
Workers compensation claims 3,901 - 3,901 3,977
Health claims 192 - 192 192
' General liability claims 3,329 - 3,329 3,167
certificates of participation 5,510 5,510
Less current portion - (73) 73) 73
' TOTAL OTHER LIABILITIES 7,422 5,773 13,195 7,672
TOTAL LIABILITIES 7,618 5,990 13,608 8,007
' FUND EQUITY:
Contributed capital - 12,654 12,654 12,214
' Retained earnings 876 532 1,408 887
TOTAL FUND EQUITY 876 13,186 14,062 13,101
' TOTAL LIABILITIES AND
FUND EXQ[JITY 8,494 19,176 L2L670 LnL108
1
1
' -102-
SCHEDULE G-2
C= OF HUNTINGTON' EEAC H
INTERNAL SERVICE FUNDS
C OMBDM4G STATEMENT! OF REVENUES, EX1M4SES
AND CHANGES IN RETAINED EARNINGS
For the year ended June 30, 1989
With camparative totals for June 30, 1988
(expressed in thousands)
1
Self Equipment Totals
Replacement 1989 1988
OPERATING REVENUES: Insurance
Charges for service 7,056 1,780 8,836 8,477
OPERATING EXPENSES:
Administration and general 1,531 1,746 3,277 2,320
Workers ccnpensation claims 1,491 - 1,491 2,245
Eftployee medical claims 2,095 - 2,095 1,834
Liability claims 1,127 - 1,127 914
Depreciation - 1,741 1,741 1,862
TONAL OPERATING, EXPENSES 6,244 3,487 9,731 9,175
OPERATIM INCOME (LOSS) 812 (1,707) 895) 698)
NON-OPERATING, REVENUES:
Interest i1ccme 753 479 1,232 817
Joint venture 184 - 184 -
TONAL NON-OPERAING REVENUES 937 479 1,416 817
NET INCOME (LOSS) 1,749 (1,228) 521 119
RETAU4ED EARNINGS (DEFICIT) - '
BEGINNING OF YEAR (873) 1,760 887 768
RE93ONM EARNINGS - END OF YEAR 876 532 1 408 887
1
1
t
-103- '
1
' CITY OF HUNI'ING70N PEAQ1 SCEEDJIE G-3
tINTERNAL SERVICE FUNDS
QMBINING STATEMENT OF CFANGES IN FINANCIAL POSITION
' For the year ended June 30, 1989
With comparative totals for June 30, 1988
(expressed in thaisands)
' Self Equipment Totals
Insurance Replacement 1989 1988
' SOURCES OF WORKING CAPITAL:
operations:
Net inccme (loss) $ 1,749 $ (1,228) $ 521 $ 119
' Depreciation - 1,741 1,741 1,862
Loss on sale of plant
property and equipment - 15 15 80
Working capital provided
' (used) by operations 1,749 528 2,277 2,061
Increase in self-insurance
claims payable - - - 163
Sale of plant, property and equipment _ 60 60 97
contributions received 819 819
Increase in Certificates of
Participation - 5,510 5,510 -
' Increase in claims payable 86 _ 86 -
Increase in notes payable 336
Contributions received - - - 420
' TOTAL SOURCES OF WORKING
CAPITAL 1,835 6,917 8,752 3,077
' USES OF WORKING CAPITAL:
Acquisition of plant, property
and equipment - 1,580 1,580 2,299
Increase in restricted assets - 4,822 4,822 -
' Decrease in long-term debt - 73 73 -
Increase in investment in joint
venture 184 - 184 -
' Disposition of feixed assets acquired with contributed capital - 379 379 -
TOTAL USES OF WORKING CAPITAL 184 6,854 7,038 2,299
' NET INCREASE (DECREASE)
IN WORKING CAPITAL 1 651 63 1 714 778
' EIEKWIS OF INCREASE (DECREASE)
IN WORKM CAPITAL:
' cash and investments $ 1,755 $ (19) $ 1,736 $ 733
Interest receivable 8 45 53 11
Accounts receivable 4 - 4 (16)
Accounts payable (123) 162 39 93
t Accrued payroll 7 - 7 (43)
-
Interest payable (125) (125)
' NET INCREASE (DECREASE)
IN WORKING CAPITAL 1 651 63 1 714 1 778
' -104-
' Trust and Agency funds are used to account for assets held by the City as an agent for
individuals, private organizations of other governments.
Employee Deferred Compensation Rand- This fund accounts for the deposit of monies
' authorized by employees to be withheld from salaries for payment at a later date. The
City retains title to the funds until the employee withdraws the funds, which may not
be done until employment is terminated, or any later date.
' Retiree Medical Insurance Fund- This fund accounts for the expenditure of City provided
benefits for medical insurance coverage for retired employees.
SCEEDU E H-1
CITY OF HUNTINMM BEACH '
AGENCY FUND
COMBINIM STAZa'T OF CEANMS IN ASSETS AND LIABILITIES ,
For the year ended June 30, 1989
(expressed in thousands)
1
July 11 June 30, '
1988 Additions Deductions 1989
DEFERRED COMPENSATION
ASSETS: '
Cash with fiscal agent $ 9,266 $ 1,871 $ 965 $ 10,172
Notes receivable, net of '
allowance for amounts
uncollectible 1,859 1,820 424 3,255
Other assets 29 - - 29 '
TOTAL ASSETS 11,154 3,691 1,389 13,456
LIABILITIES:
Notes payable $ 28 $ - $ 1 $ 27
Employee deferred caTensation 11,126 2,848 545 13,429
TOTAL LIABILITIES $ 11,154 $ 2,848 $ 546 $ 13,456 ,
FZEi'IILF'E' MEDICAL INSURANCE '
ASSETS:
Cash $ - $ 626 $ 53 $ 573
TOTAL ASSETS $ - $ 626 $ 53 $ 573 '
LIABILITIES: '
Claims payable $ - $ 626 $ 53 $ 573
TOTAL LIABILITIES $ - $ 626 $ 53 $_ 573 '
-105- '
SCHED= H-1
CITY OF HUNTINGTON BEACH
1
AGENCY FUND
COMBINING STATEMENT OF CIVNCES IN ASSETS AND LIABILITIES
(Continued)
For the year ended June 30, 1989
(expressed in thousands)
1
' July 1, June 30,
1988 Additions Deductions 1989
1TOTALS
ASSETS:
Cash $ - $ 626 $ 53 $ 573
Cash with fiscal agent 9,266 1,871 965 10,172
Notes receivable, net of
allowance for amounts
uncollectible 1,859 1,820 424 3,255
Other assets 29 - - 29
' TOTAL ASSETS $ 11,154 $ 4,317 $ 1,442 $ 14,029
LIABILITIES:
' Notes payable $ 28 $ - $ 1 $ 27
Claims payable 626 53 573
Employee deferred compensation 11,126 21848 545 13,429
TOTAL LIABILITIES $ 11,154 $ 3,474 $ 599 $ 14,029
1
1
1
1
1
1
-106-
1
t
tCMML KXM &%'qM AIR' GW"
This account group accounts for plant, property and equipment that are not recorded in
' proprietary funds.
1
1
1
t
1
SCHEDULE I-1 '
CITY OF HUNrINGDON BEACH
SCHEDULE OF GENERAL FDCED ASSETS 1
June 30, 1989 '
(expressed in thousands)
GENERAL FDCE.D ASSETS: '
Land $ 42,499
Buildings 24,647
Improvements other than buildings 1,732
Construction in progress 564 '
TOTAL GENES AL FDCED ASSETS 69 442
INVESTMENTS IN GENERAL FIXED ASSETS FROM: '
General Fund $ 14,259
Special Revenue Funds 13,363 '
Capital Projects Funds 21,217
Donations 20,603
TOTAL INVESTMENT IN GENERAL FDCED ASSETS 69 442 '
1
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-107- '
1
SCHEDULE I-2
CITY OF MI rINGION BEACH
' SCHEDULE OF GENERAL FIX® ASSETS
BY FUNCTION AND ACrIVrrY
' June 30, 1989
(expressed in thousands)
Land Building Imroveznents Total
' Fire $ - $ 3,357 $ - $ 3,357
' Police - 546 - 546
Cmmunity Services 35,751 8,376 1,732 45,859
' Public Works - 3,854 - 3,854
Non-departmental 6,748 9,078 - 15,826
' $ 42,499 $ 25,211 iS_ 1,732 $ 69,442
1
-108-
SCHEDULE I-3
CITY OF AUNTING ON BEACH
SCHEDULE OF CHANGES IN GENERAL FDCED '
ASSETS BY FUNCTION AND ACTIVITY
For the year ended June 30, 1989 '
(expressed in thousands)
July 1, 1988 Additions Deletions June 30, 1989 '
Fire $ 3,357 $ - $ - $ 3,357
Police 546 - - 546 t
Ccmamity Services 42,656 4,278 511 46,423 '
Public Works 3,290 - - 3,290
Non-departmental 15,826 - - 15,826 '
$ 65,675 $ 4,278 $ 511 $ 69,442
1
1
1
-109- '
1
' COAL III1CrTIIiM DM hCOOM GR"
' This account group accounts for long-term debt that is not recorded in proprietary
funds or trust funds.
1
1
1
' SCHEDULE J-1
CITY OF HLWINGION BEACH
' SCHEDULE OF CHANGES IN GENERAL IONG-'PERT DEBT
' For the year ended June 30, 1989
(expressed in thousands)
' Outstanding Outstanding
July 1, June 30,
1988 Additions Reductions 1989
' 1970 Park Bonds $ 2,590 $ - $ 310 $ 2,280
' Public Facilities Corporation 3,000 -
230 2,770
' Parking Authority Revenue Bonds 825 -
125 700
tCalifornia Coastal 408 - 408 -
Civic Improvement Corporation 19,830 - 220 19,610
' Public Financing Authority 26,775 - 265 26,510
Ctisated absences 3,822 485 - 4,307
' Amounts due under owner
participation and disposition
and development agreements 1,408 3,588 1,408 3,588
Mortgages payable - 2,875 - 2,875
Advances from other funds 36,918 53,923 7,901 82,940
Totals $ 95,576 $ 60,871 $ 10,867 $ 145,580
1
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-110-
r
r
1
i
i
r
r
STATISTICAL SECTION
r
r
r
r
r
r
r
r
' A table of the ten largest property taxpayers was not presented as the
information was not readily attainable.
1
1
CITY OF HUNTING'I'ON BEACH '
GOVERNMENTAL FUND RF;VENUES BY SOURCE
Last Ten Fiscal Years '
(in thousands)
Fiscal Property Other Licenses and Fines and '
Year Taxes Taxes Permits Forfeitures
1979-80 $9,690 $14,557 $4,076 $1,285 '
1980-81 11,761 16,994 5,496 1,526
1981-82 13,646 19,050 3,003 1,516
1982-83 15,830 20,661 3,148 1,749 '
1983-84 16,935 22,879 5,100 1,923 ,
1984-85 17,638 25,923 5,963 2,094
1985-86 19,428 27,798 4,427 1,974
1986-87 23,087 28,885 4,919 2,096
1987-88 24,275 30,207 4,348 2,338 '
1988-89 26,970 30,736 5,773 2,458 t
Source: Administrative Services Department,
City of Huntington Beach
Note: Includes General, Special Revenue
Capital Projects and Debt Service Funds '
1
' EXHIBIT A
' Use of Money From Other Charges for Other Total
and Property Agencies Current Svc. Revenue
$2,586 $9,294 $1,159 $315 $42,962
4,250 11,403 1,489 374 53,293
5,838 91109 1,316 529 54,007
4,551 7,954 2,917 11180 57,990
61177 9,937 2,009 1,053 66,013
5,896 12,888. 2,161 364 72,927
' 5,718 14,143 2,350 736 76,574
7,634 14,422 2,799 456 84,298
1 8,365 15,492 3,208 1,410 89,643
' 13,884 21,721 5,886 2,731 110,159
' -112-
1
CITY OF HUNTINGTON BEACII '
GOVERMENTAL FUND EXPENDITURE BY FUNCTION
Last Ten Fiscal Years '
(in thousands)
Fiscal City City City City City Administrative Community '
Year Council Administrator Treasurer Attorney Clerk Services Development
1979-80 $48 $1,941 $862 $350 $164 $626 $1,617 '
1980-81 81 403 1,028 435 143 1,682 1,645
1981-82 77 399 158 872 194 2,060 1,750
1982-83 98 498 264 629 165 2,140 1,712 '
1983-84 ill 480 141 730 163 2,362 2,319
1984-85 129 731 268 806 195 2,559 2,726
1985-86 135 848 288 897 203 2,949 2,715 '
1986-87 129 959 283 913 252 3,088 3,248
1987-88 130 1,106 290 973 245 3,287 4,187 '
1988-89 156 1,304 322 1,042 293 3,409 4,393
1
Source: Administrative Services Departme '
City of Huntington Beach
Note: Includes General, Special Revenue t
Capital Projects and Debt Service Funds
-113-
1
EXHIBIT B
' Community Public Non Capital Debt
Fire Police Services Works Departmental Outlay Service Total
$6,059 $10,879 $2,654 $5,442 $5,645 $9,628 $504 $46,420
' 6,862 11,721 4,340 8,780 5,177 8,725 503 51,524
7,315 13,367 4,405 9,707 4,010 8,860 471 53,645
' 7,758 14,103 5,028 10,989 4,058 9,639 469 57,552
' 8,569 15,601 5,070 12,528 3,741 8,621 1,830 62,267
9,494 17,123 5,287 13,652 4,867 7,874 1,896 67,605
' 10,252 18,745 5,668 15,249 6,796 11,791 1,847 78,385
11,187 20,519 6,090 14,863 7,726 10,730 2,189 82;177
' 11,840 22,370 6,954 16,205 7,153 9,786 5,243 89,769
' 12,722 23,565 7,595 16,893 7,088 43,289 15,177 137,248
1
1
' -114-
PROPERTY TAX LEVIES AND COLLECTIONS '
Last Ten Fiscal Years '
(expressed in thousands)
1
SECURED TAXES
Fiscal Total Total - Delinquency-
Year '
Levy Collections Amount Percent
1
1979-80 $8,843 $8,603 $240 2.71 '
1980-81 10,245 9,872 352 3.44
1981-82 10,300 9,894 407 3.95 '
1982-83 11,405 11,117 289 2.53
1983-84 11,403 11,665 430 3.77 '
1984-85 12,418 11,634 425 3.42 '
1985-86 13,608 12,781 452 3.32
1986-87 15,089 14,448 572 3.79 ,
1987-88 16,055 15,419 500 3.12
1988-89 16,963 16,346 493 2.91 ,
Source- County of Orange '
Note- Delinquency does not necessarily equal the levy amount
minus the collections since there are always collections of '
amounts levied in prior years.
1
1
-115-
1
EXHIBIT C
1
UNSECURED TAXES
Total Total - Delinquency-
' — Levy Collections Amount Percent
' $862 $839 $23 2.67
827 789 38 4.59
' 808 737 47 5.82
' 960 909 51 5.31
982 942 26 2.65
' 1,032 955 33 3.20
1,130 1,060 40 3.54
' 1,187 11100 45 3.75
' 1,250 11180 46 3.68
1,287 1,234 37 2.87
1
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1 -116-
t
COMPREHENSIVE ANNUAL FINANCIAL REPORT
CITY OF HUNTINGTON BEACH, CALIFORNIA
' FISCAL YEAR ENDED JUNE 30, 1989
1
' PREPARED BY ADMINISTRATIVE SERVICES DEPARTMENT
' CITY OF HUNTINGTON BEACH
1
CITY OF "IINGIM BEACH, CALF... M
CMUMEMSM AIDIUAL FIlANCIAL REPORT
' Fiscal year ended June 30, 1989
' Table of Contents
' INTRODUCTORY SECTION
Page
Ntm�ber
Table of Contents i - iii
Letter of Transmittal iv - xiv
Elected and Administrative Officials xv
Organizational Chart xvi
' Financial Reporting Awards xvii - xviii
' FINANCIAL SECTION
Schedule
' Independent Auditors' Report 1
General Purpose Financial Statements:
Combined Balance Sheet - All Fund Types and
' Account Groups A-1 2 - 3
combined Statement of Revenues, Expenditures and
-
Changes in Fund Balances All Governmental
Fund Types A-2 4 - 5
Combined Statement of Revenues, Expenditures and
Changes in Fund Balances - Budget and Actual -
General, Special Revenue and Debt Service
' Fund Types A-3 6 - 8
Coubined Statement of Revenues, Expenses and
Changes in Retained Earnings - All Proprietary
' Fund Types A-4 9
combined statement of Changes in Financial
Position All Proprietary Fund Types A 5 10
Notes to Financial Statements 11 - 71
Financial Statements of Individual Funds and Account Groups:
' General Fund:
Cagmrative Balance Sheet B-1 72
Statement of Revenues, Expenditures and
Changes in Fluid Balance - Budget and Actual B-2 73
1
' -i-
Page '
Schedule Ntnnber
Special Revenue Funds:
Combining Balance Sheet C-1 74 - 75 '
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances C-2 76 - 77
Combining Statement of Revenues, Expenditures '
and Changes in Fund Balances - Budget and Actual C-3 78 - 82
Debt Service Funds:
Combining Balance Sheet D-1 83 - 84 '
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances D-2 85 - 86
Combining Statement of Revenues, Expenditures '
and Changes in Fund Balances - Budget and Actual D-3 87 - 90
Capital Projects Funds: '
Combining Balance Sheet E-1 91 - 92
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances E-2 93 - 94
Enterprise Funds: '
Combining Balance Sheet F-1 95 - 96
Combining Statement of Revenues, Expenses and '
Changes in Retained Earnings F-2 97 - 98
Combining Statement of Changes in Financial Position F-3 99 - 100
Internal Service Funds: '
Combining Balance Sheet G-1 101 - 102
Combining Statement of Revenues, Expenses and
Changes in Retained Earnings G-2 103 '
Combining Statement of Changes in Financial Position G-3 104
Agency Fund: '
Combining Statement of Changes in Assets and Liabilities H-1 105 - 106
General Fixed Assets Account Group: '
Schedule of General Fixed Assets I-1 107
Schedule of General Fixed Assets by
Function and Activity I-2 108
Schedule of Changes in Fixed Assets by ,
Function and Activity I-3 109
General Long-'Perm Debt Account Group: '
Schedule of Changes in General Long-Term Debt J-1 110
t
-ii-
t
' STATISTICAL SECTION
Page
' Exhibit Munber
Governmental Fund Types - Revenues by Source -
' Last Ten Fiscal Years A 111 - 112
Governmental Rand Types - Expenditures by Function -
Last Ten Fiscal Years B 113 - 114
' Property Tax Levies and Collections - -
last Ten Fiscal Years C 115 - 116
Assessed and Actual Value of All Taxable Property D 117 118
Property Tax Rates - All Overlapping Governments -
' Last Ten Fiscal Years . E 119
General Bonded Debt Ratios - Last Ten Fiscal Years F 120 - 121
Cwputation of Legal Debt Margin G 122
' Computation of Direct and Overlapping Bonded Debt H 123
Water Revenue Bond Coverage - Last Ten Fiscal Years I 124
Demographic Statistics J 125
' Construction Activity and Bank and Savings and
Loan Deposits - Last Ten Fiscal Years K 126
Insurance in Force L 127 - 128
Miscellaneous Statistics M 129
t -iii-
1
CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
' December 8, 1989
The Honorable Mayor and City Councilmembers
' City of Huntington Beach, California
Mayor and Councilmembers:
' We are pleased to submit to you the Comprehensive Annual Financial Report for the
City of Huntington Beach for the fiscal year ending June 30, 1989. We believe that
the data is an accurate summary of the financial position and results of operations
' of our City to you. The Administrative Services Department is responsible for the
accuracy of the information presented. We have included all necessary disclosures
to enhance your understanding of the financial condition of the City.
' The financial statements are prepared in accordance with the standards of the
Government Accounting Standards Board and its predecessor, the National Council on
Governmental Accounting and includes the report of our independent auditors, Diehl,
' Evans and Company.
The report is presented in three sections: introductory, financial and statistical.
' The introductory section includes this transmittal, the City's organizational chart
and a list of principal officials. The financial section includes the general
purpose financial statements and the combining and individual fund and account group
' financial statements and schedules as well as the auditors report on the financial
statements. The statistical section includes selected financial and demographic
information, generally presented on a multi-year basis.
' The Single Audit Act of 1984 requires that the City's grant programs which utilize
Federal funds, whether directly or passed through from state or county agencies be
subjected to special audit requirements. These include tests of compliance with
' Federal laws and regulations and an organization-wide examination of financial
operations. The results of this expanded-audit of grant activity are included under
a separate cover. Copies of the report are available from this office.
' Huntington Beach is a full-service City including public safety, parks and
recreation, beach services, library services, planning and zoning, public works and
related administration. The City also provides water services to residents and
' businesses. This report includes the financial activity of certain separate legal
entities whose activities are significantly controlled by and/or related to the
City. These entities are, the Redevelopment Agency of the City of Huntington Beach
' (Redevelopment Agency) , the Huntington Beach Public Facilities Corporation (Public
Facilities Corporation) , the Huntington Beach Public Financing Authority (Public
Financing Authority) , the Huntington Beach Civic Improvement Corporation (Civic
Improvement Corporation) and the Parking Authority of the City of Huntington Beach
' (Parking Authority) .
' -iv-
Compon
ent unit financial reports have been prepared for the Public Facilities '
Corporation, the Redevelopment Agency and the Public Financing Authority.
These reports show the financial activities of these entities on a "stand-alone" ,
basis. Copies of these reports are available from this office.
EXXXCWC 00NDITION AND OUPIDM '
Huntington Beach is located approximately 35 miles southeast of Los Angeles in '.
Orange County. The economy of Orange County has had strong, sustained growth for
the past seven years. Residents of Huntington Beach in general have a higher-than-
average median income. The unemployment. rate of the City is below four percent. '
The median price of a single-family detached dwelling in the City approximates
$280,000.
Over the years the City has developed diverse revenue sources including property ,
tax, sales tax, utility tax and oil-related revenues which along with conservative
fiscal policies should lessen the impact of any local or national recession. '
1►'�1JC�t INIT.IA'�IVFS
For the Year '
During the year the renaissance of the downtown area began! Several owner '
participation and disposition and development agreements were signed during the year
and construction began. Below are some of the more significant ones:
. The Waterfront Hilton, a first-class hotel which will house restaurants, meeting '
rooms, tennis courts and all the amenities necessary to attract people to Huntington
Beach. The hotel will be one of few in California which is directly on the Pacific
Ocean. The hotel is the first of four to be built as a result of an agreement with ,
the Robert Mayer Corporation. The development will also include condominiums. The
first hotel is scheduled to open in the summer of 1990.
. The Huntington Bayshores, a 159 unit condominium development worth approximately '
$30 million developed by Newcomb Development Company which is complete and all the
units are now sold. '
. The Townsquare development by Mola Development Corporation which includes 16
townhomes and 73 condominiums. The Redevelopment Agency contributed land valued at
$2.5 million to the project and will receive payment for the land through sale of '
the condominium units. Minimum payment to the Agency is $2.5 million. The project
is expected to be completed in May, 1990.
. The Pier Colony development by California Resorts, Inc. which will include a six- t
plex movie theatre, restaurants, office space and residential units. The total
value of the development is approximately $45 million. The project began in Spring,
1989 and is expected to be completed by summer of 1990. '
The City initiated a refuse collection fee during the year which helped ease the
burden of increased dumping fees charged by the County. '
-v- '
1
' [br the Future
' Hunting Lon Beach's future is one of economic promise and vitality. The City's
coastal location provides unique challenges in developing an ideal mix of tourism,
light industry, residential and commercial development. This will require the
' efforts not only of local government but also of local businesses and citizens
groups.
The Redevelopment Agency will play a vital role in the City's economic future. Much
' of the focus of the Agency's efforts will be on the downtown area or Main/Pier
project area. The economic potential of this area for the local business community
is substantial.
During the year construction began on many exciting residential and commercial
projects in the downtown area. The City Council is firmly committed to rebuilding
' the landmark pier. During the year fundraising continued and plans for the
architectural design of the pier were agreed upon.
' The City has already gained positive results from Redevelopment efforts in the
Talbert/Beach, Oakview and Huntington Center project areas.
Article 13(b) of the California constitution (The Gann Limit) will have a profound
' effect on many local governments in California. The Gann Limit allows the City's
expenditures from "proceeds of taxes" to grow only at the rate of inflation and
population growth. Huntington Beach is growing closer to its Gann Limit and if in
' the next several years it is exceeded, the City will have to decide whether to
rebate monies to taxpayers or to hold an election which would allow the City to
exceed its Gann Limit.
' FINANCIAL ROUI*VMCN
' The City's financial statements are prepared on the modified accrual basis for all
governmental fund types except for the financial statements of the proprietary fund
' types which are prepared on the accrual basis. The City's system of internal
control has been carefully designed to protect City assets while ensuring that the
cost of a particular control does not exceed its expected benefits.
' Bixlgeting Controls
The City Council adopts the annual budget and may amend or revise the budget at any
' time. Budgetary control is maintained at the departmental level. A department
head, with the Finance Director's approval can transfer funds within like object
categories of the same department. The City Administrator can transfer funds from
' one object category to another without increasing the total budget of a department.
The City Administrator must approve any changes to capital outlay requests. Any
increases to a total departmental budget must be approved by the City Council. The
' City utilizes an encumbrance system as a management control technique. Encumbrances
represent orders for goods or services unfilled or services not yet performed. At
year end these are reported as reservations of fund balance in governmental fund
types. These outstanding encumbrances are then re-appropriated in the new fiscal
' year.
' -vi-
The Accounting Division of the Administrative Services Department is responsible for '
maintaining the City's financial information and for preparing this report.
Financial Summary '
General governmental functions include the operations of the General, Special '
Revenue, Debt Service and Capital Projects Funds. Below is an analysis (in
thousands) of general governmental revenues with an explanation of significant
fluctuations: '
Increase (Decrease) '
Percent from 1987/88
Amount of Total Amount Percent
Property Taxes $26,970 24.5 $2,695 11.1
Other Taxes 30,736 27.9 529 1.8 '
Licenses and Permits 5,773 5.2 1,425 32.8
Fines and Forfeitures 2,458 2.2 120 5.1
From Use of Money and Property 13,884 12.6 5,519 66.0 '
From Other Agencies 21,721 19.7 6,229 40.2
Charges for Current Service 5,886 5.3 2,678 83.5
other 2,731 2.6 1,321 93.7
Total $1101159 100.0 $20,516 22.9 ,
Property taxes increased due to the rapid increase in property values in Orange '
County between 1987 and 1989 and new construction. There were a large number of
property transactions during this period which under the guidelines of Article 13-A
of the California constitution caused increased assessed valuation. Increased '
redevelopment tax increment also caused part of the increase. Licenses and permits
increased due to new construction. Revenue from the use of money and property
increased because of larger cash balances due to new bond issues done in June of
1988, and May of 1989 and slightly higher interest rates. Also during the year, '
debt was repaid from the Redevelopment Agency to the City with over $2 million of
accrued interest. Revenue from other agencies increased due to a large number of
capital projects which were partly financed by other governmental agencies. Charges '
for current services increased due to the implementation of a trash fee in
September, 1988. Other revenue decreased because there were sales of surplus City
property in fiscal year 1987/88 and there was no comparable sale this year and due
to contributions from property owners for the Reservoir Hill Assessment District '
bonds.
Below is an analysis (in thousands) of general governmental expenditures with an '
explanation of significant fluctuations:
t
1
-vii- '
' Aclavowledments
' We wish to thank the City Council and the various City departimnts for conducting
the fiscal affairs of Huntington Beach in a responsible and progressive manner. We
would also like to thank the members of the Accounting Division, especially Robert
' Sedlak and Annabelle Richards, Principal Accountants for their work in the
preparation of this report.
' DAN T. VILLELI,A
A
Finance;;�Z
pyyAdministrator/
Administrative Services Department
1
' -xiv-
CITY OF HUNTINGTON BEACH
PRINCIPAL CITY OFFICIALS
CITY COUNCIL
Wes Bannister Mayor
Thomas Mays Mayor Pro-Tem
John Erskine Councilperson
Peter Green Councilperson
Don Mac Allister Councilperson
Jim Silva Councilperson
Grace Winchell Councilperson
OTHER ELECTED OFFICIALS
Donald L. Watson City Treasurer
Gail Hutton City Attorney
Connie Brockway City Clerk
ADMINISTRATIVE OFFICIALS
i
Paul Cook City Administrator
Robert J. Franz Deputy City Administrator
Douglas LaBelle Deputy City Administrator
James Palin Deputy City Administrator
Lou Sandoval Public Works Director
Melvin Bowman Community Services Director
Raymond Picard Fire Chief
Ron Lowenberg Police Chief
Mike Adams Director of Community Development
Dan T . Villella Director of Finance
PEOPLE
.CITY OF
HUNTINGTON BEACH L
CITY COUNCIL
CITY
ADMINISTRATOR
J.
�i CITY CITY
CITY CLE.RA
HUNTINGTON BEACH 'I'llF.ASUItFI( A'1"1'()ItNi•:\'
ECONOMIC COMMUNITY ADMINISTRATIVE COMMUNITY
POLICE' FIRE PUBLIC WORKS DEVELOPMENT DEVELOPMENT SERVICES SERVICES
ti
I UNIFORM FIRE ECONOMIC
DIVISION PREVENTION ENGINEERING DEVELOP. PLANNING FINANCE LIBR:1Rl
Hi
PUBLIC RECREATIC
ADMIN. INFORMATION . INFORMATION IIU�fA\
OPERATIONS WATElt BUILDING SYSTEMS
DIVISION /VIDEO RESOURCES
INVESTIGATION . EMERGENCY LANDSCAPE REDEV./ PERSONNEL BEACH DIVISION SERVICES . HOUSING
ItEAI.
Sl:ltISIOVICEN TELL. MAINTENANCE H1'It()I'1?li'I'1 ARTS
DIVISWN COMMUNICATIONS
CINSSUNEFITSRANCE&
ORGANIZATIONAL. CHART'
I
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Huntington Beach,
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 1988
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFR's) achieve the highest
standards in government accounting
and financial reporting.
AGE OF T!�HWE
4�a �9s
� D$T�h$ y
uo o President
cnwiaA )
s CORPOIGTM
og SEAL��o.�
Mato
Jr CExecutive Director
CALIFORNIA SOCIETY OF MUNICIPAL FINANCFEI
DEDICATED TO THE PROFESSIONAL ADVANCEMENT OF MUNICIPAL FINANCE ADMINISTRATION
ward
61errtilleatep
FOR
OUTSTANDING FINANCIAL REPORTING
PRESENTED TO THE
1
Cltj of Huntie tom Beach
1 .
This certificate is issued in recognition of meeting professional standards and criteria in reporting
which reflect a high level of quality in the annual financial statements and in the underlying accounting
system from which the reports were prepared for the fiscal year 198y/19$$
Chair,Professional Standards Committee > ident
gal Fu rza r-1
D to ate
z
0
N
H
u
w
�a
u
z
N
W
DIEHL,EVANS
&COMPANY OTHER OFFICES AT:
CERTIFIED PUBLIC ACCOUNTANTS 2965 ROOSEVELT ST.
CARLSBAD.CA 92008-2389
' A PARTNFRSNIP INCLUDRVO ACCOUNTANCY CORPORATI-1 (619) 729-2343
18401 VON KARMAN,SUITE 200 120 WEST WOODWARD AVE.
IRVINE • CALIFORNIA 92715-1542 ESCONDIDO.CA 92025-9990
PHONE 1114) 757-7700 September 14, 1989 1619) 741-3141
' FAX(714) 757-2707
' INDEPENDENT AUDITORS' REPORT
City Council
City of Huntington Beach
Huntington Beach, California
We have audited the general purpose financial statements of the City of
' Huntington Beach, California as of and for the year ended June 30, 1989, as
listed in the table of contents. These financial statements are the
responsibility of the City's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
' We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
' assurance about whether the general purpose financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
' also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall general purpose financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
' In our opinion, the general purpose financial statements referred to above
present fairly, in all material respects, the financial position of the City of
' Huntington Beach as of June 30, 1989, and the results of its operations and the
changes in financial position of its proprietary fund types for the year then
ended in conformity with generally accepted accounting principles.
' Our audit was made for the purpose of forming an opinion on the general purpose
financial statements taken as a whole. The financial statements of the
individual funds and account groups listed in the table of contents are
' presented for purposes of additional analysis and are not a required part of the
general purpose financial statements of the City of Huntington Beach. The
information has been subjected to the auditing procedures applied in the audit
' of the general purpose financial statements and, in our opinion, is fairly
stated in all material respects in relation to the general purpose financial
statements taken as a whole. The statistical information listed in the table of
' contents is not a required part of the basic financial statements, and we did
not audit or apply limited procedures to such information and do not express any
assurance on such information.
' -1-
CITY OF BUNTINGION BEACH '
COINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS '
June 30, 1989
(expressed in thousands)
Governmental Fund Types '
Special Debt Capital
ASSETS General Revenue Service Projects
Cash and investments (Notes le and 3) $ 21,279 $ 16,901 $ 3,894 $ 24,238 '
Cash with fiscal agent (Note 3) 224 - 9,069 864
Taxes receivable (Nate 1c) 2,164 - 48 8
Other receivables 697 1,717 156 2,464 '
Unbilled receivables (Note lb) - - - -
Inventory (Note lg) 263 - - -
Due from other funds 505 - - - '
Advances to other funds (Note 10) 48,402 5,300 21,340 7,425
Deposits and other assets (Note 20) 13 - - -
Land held for resale (Note lf) - - - 19,549
Property, plant and equipment, '
net (Notes if and 15) - - - -
Amount available for debt service funds - - - -
Amount to be provided for payment '
of long-term debt - - - -
TOTAL ASSETS 73 547 123 918 LIL507 54 548
LIABILITIES AND FUND EQUITY '
LIABILITIES:
Accounts payable $ 1,528 $ 390 $ - $ 129 '
Accrued liabilities 1,614 10 - 8
Deposits 701 14 - -
Tax and revenue anticipation note t
payable (Note 19) 5,000 - -
Due to other funds - 505 -
Advances fran other funds (Notes 10 and 12) - - - -
Deferred compensation (Note 4) -
Claims payable (Note 9) - - - -
Deferred revenue (Note 5) 35,161 3,378 361 675
Current portion of long-term debt - - - - '
Long-term debt (Notes 12 and 13) - - - -
Compensated absences payable
(Notes lj, 12 and 13) - - - - '
TOTAL LIABILITIES 44,004 4,297 361 812
FUND EQUITY:
Contributed capital (Note 10) - - - - '
Investment in general fixed assets - - - -
Retained earnings - - - -
Fund Balances: '
Reserved (Note 16) 27,043 5,051 34,146 53,736
Unreserved:
Designated (Note 16) 486 3,550 - - '
Undesignated 2,014 11,020 - -
TOTAL FUND EQUITY 29,543 19,621 34,146 53,736
TOTAL LIABILITIES AND FUND EQUITY 73,547 L22j918 34 507 54 548 '
See independent auditors' report and notes to financial statements.
-2- '
SCEED= A-1
' Account Groups
Propriety Fund Types Fiduciary General General
Internal Fund Type Fixed ring-Term Total (Memorandum Only)
Enterprise Service Agency Assets Debt 1989 1988
' $ 9,783 $ 11,653 $ 573 $ _ $ _ $ 88,321 $ 75,432
936 4,822 10,172 26,087 26,197
- - - - - 2,220 2,243
' 1,204 109 3,255 _ s 9,602 4,450
1,373 1,373 1,218
- - - - - 263 208
' - - -
1,417 83,884 884 38,002
-
184 29 226 28
- - - - - 19,549 4,854
36,654 10,902 - 69,442 - 116,998 114,410
- - - - 12,806 12,806 17,638
' - - - - 132,774 132,774 77,938
$ 51,367 $ 27,670 $ 14,029 $ 69,442 $ 145,580 $ 494,608 $ 362,618
1
' $ 1,321 $ 179 $ _ $ _ $ _ $ 3,547 $ 2,701
120 161 1,913 4,040
1,109 - - - - 1,824 2,630
' _ _ _ _ _ 5,000
505
944 - - - 82,940 83,884 38,002
' _ - 13,429 - _ 13,429 11,126
7,422 573 7,995 7,336
- - - - - 39,575 7,946
t 270 73 - _ - 343 818
6,835 5,773 27 58,333 70,968 62,354
t 128 - - = 4,307 4,435 3,941
10,727 13,608 14,029 145,580 233,418 140,894
' 37,586 12,654 _ - _ 50,240 49,362
69,442 69,442 65,675
3,054 1,408 - - - 4,462 1,516
' - - - - - 119,976 88,415
- - - 4,036 6,469
' - - - - - 13,034 10,287
40,640 14,062 - 69,442 - 261,190 221,724
' $ 51,367 $ 27,670 $ 14,029 $ 69,442 $ 145,580 $ 494,608 $ 362,618
' -3-
CITY OF HUNTINGTON BEACH '
OCMBINE D STATEMENT OF REVENUES, EXPENDITURES '
AND CHANGES IN FUND BAIANCES
ALL FUND TYPES
For the year ended June 30, 1989 '
(expressed in thousands)
General
REVENUES: '
Property taxes (Note li) $ 23,072
Other taxes 30,519
Licenses and permits 3,650 '
Fines, forfeitures and penalties 2,458
From use of money and property 6,530
Fran other agencies 8,542
Charges for current services 5,886 '
Other 1,077
Contributions froan property owners (Note 14) -
TOTAL REVENUES 81,734 '
EXPENDITURES:
Current:
City Council 113 '
City Adzmj tr tor 782
City Treasurer 320
City Attorney 415 '
City Clerk 170
Administrative Services 2,956
Cmmnmity Development 2,110
Fire 12,722 '
Police 23,556
Ecorx mic Development -
C mmunity Services 7,472 '
Public Works 16,505
Non-departmental 7,012
Capital outlay 1,026
Debt Service: t
Principal -
Interest 228
TOTAL EXPENDITURES 75,387 '
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 6,347
OTHER FINANCING SOURCES (USES) : t
Operating transfers in 1,291
Advances frcen other funds (Note 12g) -
Proceeds of long-term debt -
Operating transfers out (2,170) '
Other (Note 20) 6,191
TOTAL OILIER FINANCING SOURCES (USES) 5,312
EXCESS OF REVENUES AND OTHER SOURCES OVER '
EXPENDITURES AND OILER USES 11,659
FUND BALANCE - BEGINNING OF YEAR 22,349 '
Residual equity transfers in (Note lob) 346
Residual equity transfers out (Note 10b) (4,811)
FUND BALANCE - END OF YEAR $ 29,543 '
See independent auditors' report and notes to financial statwzts.
-4- '
' SCfM= A-2
' Totals
Special Debt Capital (Mewranchm Only)
Revenue Service Projects 1989 1988
$ - $ 3,298 $ 600 $ 26,970 $ 24,275
217 - - 30,736 30,207
2,123 _ _ 5,773 4,348
2,458 2,338
2,449 3,192 1,713 13,884 8,003
13,179 - - 21,721 15,492
' _ _ _ 5,886 3,208
1,077 1,410
- - 1,654 1,654 -
' 17,968 6,490 3,967 110,159 89,281
' - _ 43 156 130
198 324 1,304 1,106
- - 2 322 290
' _ _ 627 1,042 973
123 293 245
- - 453 3,409 3,287
. 1,535 3,645 4,187
' - _ _ 12,722 11,840
9 23,565 22,370
748 - - 748 -
' 123 _ - 7,595 6,954
388 16,893 16,205
4 55 17 7,088 7,153
' 10,810 - 31,453 43,289 9,786
- 1,362 5,037 6,399 975
- 5,799 2,751 8,778 4,268
' 11,892 7,216 42,753 137,248 89,769
6,076 (726) (38,786) (27,089) (488)
' - 2,000 173 3,464 3,154
- 46,033 46,033 21,108
t - - 6,463 6,463 26,313
(1,291) (3) (3,464) (3,607)
- 1,250 7,441 727
(1,291) 1,997 53,919 59,937 47,695
' 4,785 1,271 15,133 32,848 47,207
t14,848 32,875 35,099 105,171 57,964
782 3,864 4,992 1,350
(794) - (360) (5,965) (1,350)
' $ 19,621 $ 34,146 $ 53,736 $ 137,046 105,171
' -5-
CITY OF HUNrINGrON BEACH '
CUOINED STATEMENT OF REVENUES, EXPENDITURES AND '
CHANGES IN FUND BALANCES - BUDGEr AND ACTUAL
GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUND TYPES
For the year ended June 30, 1989 '
(expressed in thousands)
General Fund
Variance -
Favorable
Budget Actual (Unfavorable)
REVENUES:
Property taxes $ 22,440 $ 23,072 $ 632
Other taxes 31,978 30,519 (1,459)
Licenses and permits 3,366 3,650 284 '
Fines, forfeitures and penalties 2,570 2,458 (112)
From use of money and property 6,875 6,530 (345)
From other agencies 8,894 8,542 (352) '
Charges for current services 5,197 5,886 689
Other 596 1,077 481
TOTAL REVENUES 81,916 81,734 (182)
EXPENDITURES: '
Current:
City Council 98 113 (15)
City Administrator 772 782 (10)
City Treasurer 319 320 (1)
City Attorney 398 415 (17)
City Clerk 199 170 29 '
Administrative Services 3,215 2,956 259
Cmmmity Development 2,219 2,110 109
Fire 12,701 12,722 (21) ,
Police 23,373 23,556 (183)
Ccemmmity Services 7,386 71472 (86)
Public Works 18,558 16,505 2,053 '
Non-departmental 7,086 7,012 74
Capital outlay 1,915 1,026 889
Debt Service:
Principal - '
Interest 228 228 -
TOTAL EXPENDITURES 78,467 75,387 3,080
EXCESS OF REVENUES OVER '
(UNDER) EXPENDITURES 3,449 6,347 2,898
OTHER FINANCING SOURCES (USES) :
Operating transfers in 1,300 1,291 (9) '
Operating transfers out (2,044) (2,170) (126)
Other 6,191 6,191
TOTAL OTHER FINANCING
SOURCES (USES) 5,447 5,312 (135) '
EXCESS OF REVENUES AND OTHER SOURCES OVER
(UNDER) EXPENDITURES AND Orin USES 8,896 11,659 2,763
FUND BALANCES - BEGINNING OF THE YEAR 22,349 22,349 - ,
Residual equity transfers in 346 346
Residual equity transfers out (4,811) (4,811) -
FUND BALANCES - END OF YEAR $ 26,780 $ 29,543 $ 2,763 '
See independent auditors' report and notes to financial statements.
-6- '
' SC HEDUIE A-3
' Special Revenue Rands Debt Servioe Funds
Variance - Variance -
Favorable Favorable
Budget Actual (Unfavorable) Budqet Actual (Unfavorable)
$ - $ - $ - $ 2,221 $ 3,298 $ 1,077
209 217 8 - - -
' 1,720 2,123 403
1,567 2,449 882 3,268 3,192 (76)
t 9,438 13,179 3,741 = _ _
12,934 17,968 5,034 5,489 6,490 1,001
1
' 189 198 -(9)
437 748 (311) - - -
' 10 9 1 - - -
189 123 66 - - -
' 4 4 - 55 55
22,909 10,810 12,099 - -
' _ _ _ 1,362 1,362 -
6,490 5,799 691
23,738 11,892 11,846 7,907 7,216 691
' (10,804) 6,076 16,880 (2,418) (726) 1,692_
- - 2,099 2,000 (99)
(1,300) (1,291) 9 (3) (3)
' (1,300) (1,291) 9 2,099 1,997 102
(12,104) 4,785 16,889 (319) 1,271 1,590
' 14,848 14,848 _ 32,875 32,875
782 782
(794) (794) - - - -
' $ 2,732 $ 19,621 $ 16,889 $ 32,556 $ 34,146 1 590
( )
' -7-
CITY OF HUNTINGTON BEACH SCHEE= A-3
CCMBINED STATEMENT OF REVENUES, FG�EMIZURES AND '
CHMIGES IN FUND BAIANCES - BUDGET AND ACTUAL (CONTINUED)
GENERAL, SPECIAL REVENUE AND DEBT SERVICE FUND TYPES
For the year ended June 30, 1989 '
(expressed in thousands)
Totals (Memorandum Only)
Variance
Favorable
REVENUES: Budget Actual (Unfavorable)
Property taxes $ 24,661 $ 26,370 $ 1,709 '
Other taxes 32,187 30,736 (1,751)
Licenses and permits 5,086 5,773 687
Fines, forfeitures and penalties 2,570 2,458 (112) '
From use of money and property 11,710 12,171 461
Fran other agencies 18,332 21,721 3,389
Changes for current services 5,197 5,886 689
Other 596 1,077 481 '
TOTAL REVENUES 100,339 106,192 5,853
EXPIIdDIZURES
Current: '
City Council 98 113 (15)
City Administrator 961 980 (19)
City Treasurer 319 320 (1) '
City Attorney 398 415 (17)
City Clerk 199 170 29
Administrative Services 3,215 2,956 259
M m minty Developanent 2,656 2,858 (2 02) '
Fire 12,701 12,722 (21)
Police 23,383 23,565 (182)
Cmmunity Services 7,575 7,595 (20) '
Public Works 18,558 16,505 2,053
Non-departmental 7,145 7,071 74
Capital outlay 24,824 11,836 12,988
Debt Service: '
Principal 1,362 1,362 -
Interest 6,718 6,027 691
TONAL EXPENDITURES 110,112 94,495 15,617 '
EXCESS OF PXV09 ES OVER
EXPENDITURES (9,773) 11,697 21,470
OTHER FINANCING SOURCES (USES) : '
Operating transfers in 3,399 3,291 (108)
Operating transfers out (3,344) (3,464) (120)
Other 6,191 6,191
TOTAL OTHER F NANCING
SOURCES (USES) 6,246 6,018 (228)
EXCESS OF REVENUES AND OTHER SOURCES OVER ,
(UNDER) EXPIIQDI JRES AND arHER USES (3,527) 17,715 21,242
FUND BAIANCEs - BEGIlm i% OF THE YEAR 70,072 70,072 -
Residual equity transfers in 1,128 1,128
Residual equity transfers out (5,605) (5,605) -
FUND BAIANCES - END OF YEAR $ 62,068 $ 83,310 $ 21,242
See independent auditors' report and notes to financial statements.
-8-
SQEWIE A-4
CITY OF HUNI'INGT N BEACH
C OMINED STATE!,= OF REVENUES, EXPENSES AND C fw;ms
IN =A-UIED EARNINGS - ALL PROPRIETARY FUND TYPES
For the year ended June 30, 1989
(expressed in thousands)
Totals
Internal (Memorandum Only)
Enterprise Service 1989 1988
OPERATING REVENUES:
Sales $ 12,467 $ 8,836 $ 21,303 $ 9,698
Rentals 887 - 887 9,388
Other 1,019 - 1,019 449
TOTAL OPERATING
REVENUES 14,373 8,836 23,209 19,535
OPERATING EXPENSES:
Water purduases 2,807 - 2,807 2,988
Administration 1,104 3,277 4,381 2,901
Engineering 1,282 1,282 827
Production 2,490 - 2,490 2,123
Maintenance 1,003 _ 1,003 1,167
Water Meters 520 520 595
Contribution to General
Fund in lieu of taxes 1,829 - 1,829 1,390
Employee medical claims _ 2,095 2,095 1,834
Liability claims 1,127 1,127 914
Workers campensation claims - 1,491 1,491 2,245
Depreciation (Note 1f) 1,392 1,741 3,133 3,215
TOTAL OPERATING EXPENSES 12,427 9,731 22,158 20,199
OPERATING I14MM (LOSS) 1,946 (895) 1,051 (664)
NON-OM WING REVENUES
(EXPENSES) :
Interest income 1,080 1,232 2,312 1,588
Interest expense (601) - (601) (612)
Joint venture - 184 184 -
'DOTAL NON-OPERATING
REVE14UFS (EXPENSES) 479 1,416 1,895 976
NET INGCHE 2,425 521 2,946 312
R01AINED EARNINGS -
EtDGGINTTIlJG OF YEAR 629 887 1,516 1,204
RETAINED EARNINGS -
END OF YEAR $ 3,054 $ 1,408 $ 4,462 $ 1,516
See independent auditors' report and notes to financial statements.
I -9-
CITY OF HUNTINGTON BEACH SCHEDULE A-5
CCMBINED STATIIMENr OF CHANGES IN FINMCIAL POSITION ALL PROPRIETARY FUND TYPES
For the year ended June 30, 1989
(expressed in thousands)
Totals
Internal (Memoranduun Only)
Enterprise Service 1989 1988
SOURCES OF WORKING CAPITAL:
Operations:
Net income $ 2,425 $ 521 $ 2,946 $ 312
Loss on sale of plant, property
and equipment 9 15 24 92
Depreciation 1,392 1,741 3,133 3,215
Working capital provided by
operations 3,826 2,277 6,103 3,619
Increase in self-insurance claims
payable - 86 86 163
Increase in cmpensated absences 9 - 9 -
C7ontributions received 438 819 1,257 2,915
Increase in Certificates
of Participation 13 5,510 5,523 13
Decrease in restricted assets 512 - 512 71
Increase in note payable - - - 336
Sale of property, plant and equipment - 60 60 102
TOTAL SOURCES OF WORKING CAPITAL 4,798 8,752 13,550 7,219
USES OF WORKING CAPITAL:
Increase in investment in joint venture - 184 184 -
Increase in plant, property and
equipment 459 1,580 2,039 5,019
Increase in restricted assets - 4,822 4,822 34
Decrease in long-term notes 93 73 166 79
Decrease in long-term bonds 166 - 166 -
Increase in advances from other funds 128 - 128 1,118
Disposition of fixed assets acquired
with contributed capital - 379 379 -
Decrease in compensated absences - - - 6
TOTAL USES OF WOR ING CAPITAL 846 7,038 7,884 6,256
NET INCREASE IN WORKING CAPITAL $ 3,952 1 714 5 666 L 963
KLEMM OF NET INCREASE (DECREASE)
IN WORICM CAPITAL:
Cash and investments $ 3,261 $ 1,736 $ 4,997 $ 1,185
Interest receivable 18 53 71 21
Accounts receivable 674 4 678 (25)
Unbilled receivable 155 - 155 289
Accounts payable (507) 39 (468) 159
Due to other funds 59 - 59 -
Interest payable (5) (125) (130) 6
Deposits 307 - 307 (593)
Current portion of long-term debt (10) - (10) (3)
Accrued payroll - 7 7 76)
NET INCREASE IN
WORKING CAPITAL $ 3,952 1 714 5 666 L 963
See independent auditors' report and notes to financial statements.
-10- ,
i
NOTES TO FINANCIAL STATEMENTS
' Number Description
' 1 . Summary of Significant Accounting Policies
2 . Description of the Reporting Entity
r3 . Cash and Investments
4 . Deferred Compensation
' 5 . Deferred Revenue
' 6 . Retirement Plan (Normal )
7 . Retirement Plan ( Supplemental )
' 8 . Postretirement Medical Insurance
9 . Self Insurance
' 10 . Interfund Transactions
' 11 . Proprietary Funds Supplementary Information
12 . General Long-Term Debt
' 13 . Proprietary Fund Long-Term Debt
14 . Reservoir Hill Assessment Bonds
15 . Changes in Fixed Assets
16 . Reserves and Designations of Fund Equity
17 . Commitments and Contingencies
t18 . Joint Ventures
19 . Tax and Revenue Anticipation Notes
t20 . Other Required Disclosures
' 21 . Subsequent Events
1
CITY OF HUNTINGTON Br.ACH
' NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1989
1
1. S[IMfRY OF SIGNIFICANT ACCOUNTING POLICIES:
' a. Description of Fund Types and Account Groups:
The City of Huntington Beach (City) accounts for its financial position and
operations in accordance with generally accepted accounting principles for
governmental units prescribed by the Government Accounting Standards Board
(GASB) . The City uses various funds and account groups to record its
financial activity. A fund or account group is an accounting entity with a
self-balancing set of accounts established to record the financial position
and results of operations of a specific governmental activity. The City
' maintains the following fund types and account groups:
Governmental Fund Types:
' The General Fund is used to account for all financial activity that is not
required to be accounted for in another fund.
' Special Revenue Funds are used to account for the receipt and expenditure of
monies legally restricted to a specific use.
' Debt Service Funds are used to account for the receipt and disbursement of
monies used for the payment of general and redevelopment long-term principal
and interest.
' Capital Projects Funds are used to account for monies used for the acquisition
and construction of major capital facilities.
' Proprietary Fund Types:
Enterprise Funds are used to account for City operations that are financed in
' a manner similar to private businesses. Enterprise funds are used when the
City wishes to recover the cost of a particular service furnished to the
public on a cost (expenses including depreciation) reimbursement basis or when
the City wishes to make periodic determinations of net income.
Internal Service Funds are used to account for goods and services provided by
one department of the City to another on a cost-reimbursement basis.
' Fiduciary Fund Type:
' Agency Fluids are used to account for assets held by the City as an agent for
individuals or private organizations.
' See independent auditor' s report -11-
CITY OF HUNTINGTON BEACH ,
NOTES TO FINANCIAL STATEMENTS '
(continued)
JONE 30, 1989
1. S[IMRY OF SIGNIFICANT AO K)UWr1 NG POLICIES (00WINQED):
a. Description of Fund Types and Account Groups: '
Account Groups:
The General Fixed Assets Account Group is used to record and control capital '
assets owned by the City other than those owned by proprietary fund types.
The General Long Term Debt Account Group is used to account for the unmatured '
long-term liabilities that will be financed from governmental funds.
b. Basis of Accounting: t
Governmental and agency fund types use a modified accrual basis of '
accounting. Revenues are recognized when they are susceptible to accrual.
This means that they must be measurable and available to finance current
period expenditures. Revenues susceptible to accrual are received within 60 ,
days after year-end and include property taxes, sales tax, federal and state
grants and subventions, interest and certain charges for current service.
Revenues which are not susceptible to accrual include certain licenses, ,
permits, fines and forfeiture and other miscellaneous revenue. Expenditures,
other than principal and interest on long-term debt are recorded when
incurred. Proprietary fund types are accounted for on the accrual basis. '
Accounting for these fund types normally follows accounting for private
businesses. Revenues are recognized when earned, regardless of the date of
receipt. Expenditures are recognized when incurred. unbilled water revenue
is accrued when earned. '
c. Measurement Focus: ,
The City's governmental funds are accounted for on a spending or "financial ,
flow" measurement focus. This means that generally only current assets and
current liabilities are included on their balance sheets. Statements of
revenue, expenditures and changes in fund balance for governmental funds
generally present increases (revenues and other financing sources) and t
decreases (expenditures and other financing uses) in net current assets. All
proprietary funds are accounted for on a cost of services or "capital
maintenance" measurement focus. The fund equity amount represents total net '
assets. Proprietary funds are accounted for on a capital maintenance
See independent auditor' s report -12- '
' CITY OF HUNTINGTON BL.nCH
' NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
' 1. S[MKNRY OF SIINIFIC r ACODUNTING POLICIES (OONTI 1UEM:
' c. Measureinent Focus:
' measurement focus. This means that all assets and liabilities, whether
current or noncurrent, are shown. on the balance sheets. Their reported fund
equity represents total net assets. Proprietary fund operating statements
present increases (revenues) and decreases (expenses) in total net assets.
d. Budgets and Budgetary Accounting:
The City Council annually adopts a budget by June 30th of the prior fiscal
' year for all governmental fund types. The budgeted expenditures become the
appropriations to the various departments. Estimates are also made for
revenue which, along with the appropriations, are used to compute the
budgetary fund balance. This appropriated budget, as defined by GASB Code
' Section 2400.109, covers substantially all governmental fund type
expenditures with the exception of capital improvement projects (capital
projects funds) carried forward from prior years, which constitute a legally
' authorized non-appropriated budget. The City Council may amend the budget at
any time. The City Administrator may transfer funds from one object purpose
(personal services, operating expenditures or capital outlay expenditures) to
' another within the same department without changing the total budget of a
department. A department head may transfer funds from like object categories
of the same department. Any changes to a total departmental budget must be
approved by the City Council. Expenditures may not exceed appropriations at
the departmental level. All unused appropriations lapse at year-end.
Budgets for governmental fund types are adopted on a basis substantially
consistent with generally accepted accounting principles as legally required.
' There are no significant non-budgeted financial activities. Revenues for
special revenue funds are budgeted by entitlements, grants and estimates of
' future developnent and economic growth. Expenditures and transfers are
budgeted based upon available financial resources.
On or before February 28th of each year, each Department submits data to the
' City Administrator so that a budget may be prepared. This budget is
prepared by fund, function and activity and includes information on past
years, current year estimates and requested appropriations for the next
' fiscal year. Before May 1st, the proposed budget is presented to the City
Council. The City Council holds public hearings and may amend the budget by
' See independent auditor' s report -13-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS '
(continued)
JUNE 30, 1989
1. SUMMARY OF SIGNIFICANT A000UN ING PMICIES (CONTINUED): t
d. Budgets and Budgetary Accounting:
a majority vote. Any changes to the budget must be within the revenues and
reserves estimated as available. '
Budgetary data is presented for the General, special revenue and debt service
Funds. Budgetary information is not presented for the capital projects funds '
since these are budgeted on a long-term project by project basis.
The City utilizes an encumbrance system as an aid in controlling '
expenditures. Encumbrances represent amounts committed for goods or services
for which a purchase order has been issued and the goods have not been
received or the services have not been rendered. At year-end, all
outstanding encumbrances are reported as reservations of fund balance in '
governmental fund types. These outstanding encumbrances are then
reprogrammed into the new fiscal year.
The budgetary information presented for estimated revenue and appropriations '
represent the original budget adjusted for changes made by action .of the City
Council, City Administrator or Department Head. All changes to the original, '
adopted appropriations (expenditures plus other financing uses) are
summarized below (in thousands) . Funds with no changes are not shown.
Fund Original Revised '
General $79,672 $85,322
Special Revenue Funds: '
Gas Tax 8,161 10,513
Sewer 525 736 ,
Planned Local Drainage 1,795 2,133
Public Communications 219 220
Grants 1,930 6,490
Park Acquisition 2,326 4,858 '
and Development
Narcotics Forfeiture 100 198
See independent auditor' s report -14- '
CITY OF HUNTINGTON B. "CH
' NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
' 1. SI**VRY OF SIGNIFICMr ACCOUNTING POLICIES (00 TTINUED):
' e. Investments:
' Investments are stated at cost, which is less than market. If market
values decline below cost, no loss is recorded if such declines are
considered permanent. The assets of the Employee Deferred Compensation
Fund (an Agency Fund) are reported at market value rather than cost, in
.' accordance with GASB Statement 2.
f. Property and Equipment:
1
Acquisitions of property and equipment are generally recorded as
' expenditures in governmental fund types at the time of purchase and are
capitalized at cost in the General Fixed Assets Account Group. Land held
by the Redevelopment Agency for resale is capitalized at the lower of cost
or market in the Redevelopment Agency Capital Projects Fund. Expenditures
' for infrastructure (roads, curbs, sidewalks, sewers, etc. ) are not
capitalized as such assets are immovable and generally of value only to the
City. No depreciation is provided for any asset capitalized in the General
' Fixed Assets Account Group.
Property and equipment acquired by proprietary fund types are capitalized
' at cost at the time of purchase in the fund making the purchase. Both
proprietary and general fixed assets acquired from gifts or contributions
are capitalized at fair market value at the time received, or in the case
of water fixed assets, at City Council acceptance date. Depreciation for
' both donated and acquired assets is calculated on the straight-line method
over the estimated useful lives of the assets shown below and charged to
the operations of the respective fund.
' Production, pumping, transmission
and distribution plant - 10 to 50 years
' General plant- 20 to 50 years
Transportation equipment- 5 to 30 years
Interest is capitalized on proprietary fund assets acquired with tax-exempt
' debt. The amount of interest to be capitalized is calculated by offsetting
interest expense incurred form the date of borrowing until completion of
the project with interest earned on the invested proceeds over the same
' period. The City has capitalized $185,000 of interest on the construction
of the Emerald Cove apartment complex.
' See independent auditor' s report -15-
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
(continued)
.TUNE 30, 1989
1. St"90Y OF SIGNIFICANT AC00UNTING POLICIES (OOTPINUED): '
g. Inventories: '
Inventories are accounted for in governmental funds by the consumption '
method, whereby inventories are capitalized and recorded as expenditures
when used. Inventories of materials and supplies totalled $262,662 at June
30, 1989 and are valued using the weighted average cost method. This
amount is offset with an appropriate reservation of fund balance. '
h. Interfund Transactions: '
During the course of normal operations, numerous transactions occur between '
funds. These result in operating transfers, residual equity transfers,
balances due to or due from other funds and balances advanced to or from
other funds. Residual equity transfers represent nonrecurring or non-
routine transfers of equity between funds. Operating transfers represent '
transfers between funds that are normal and recurring. Amounts that are
due to or due from other funds represent the current (due within one year)
portion of monies that are to be paid to or received from other funds. '
Amounts that are classified as advances from other funds represent the
long-term portion of monies which will be repaid to other funds. Amounts
that are classified as advances to other funds represent the long-term '
portion of amounts that will be received from other funds. In governmental
funds amounts that are advanced to other funds are also offset equally by a
fund balance reserve account, which indicates that they do not constitute
expendable, available financial resources and therefore are not available '
for appropriation. In proprietary funds there is no reservation of fund
equity.
Quas
i-external transactions are interfund transactions that would be '
treated as revenues, expenditures or expenses if they had involved '
organizations external to the City. The City has recorded all quasi-
external transactions as revenues, expenditures or expenses. Transactions
that constitute reimbursement to a fund for expenditures or expenses
initially made from it that are properly applicable to another fund, are '
recorded as expenditures/expenses in the fund that it is reimbursed. All
other interfund transactions are reported as operating transfers.
1
See independent auditor' s report -16- '
' CITY OF HUNTINGTON BL.nCH
NOTES TO FINANCIAL STATEMENTS
' (continued)
JUNE 30, 1989
' 1. SCM4ARY OF SIGNIFICANT ACOOUNTING POLICIES (CONTINUED):
' i. Long-Term Obligations:
' Governmental fund long-tern debt (principal, interest and fiscal charges)
is recognized as an expenditure when due regardless of when the expenditure
is incurred. Obligations that are expected to be financed from spendable,
available financial resources are reported as a fund liability. The
' remainder of the obligation is reported in the General Long-Term Debt
Account Group. Bond discounts and issuance costs are recognized in the
period that the debt is issued.
Proprietary fund long-term debt is accounted for in the respective funds.
' Interest on the debt is recorded when incurred. Principal that is due
within one year is classified as a current liability. The remainder is
classified as a long-term liability. Bond discounts are recorded as a
reduction of outstanding debt and are deferred and amortized over the term
' of the debt.
' j. Employee Compensated Absences:
The City records the cost of vacation and sick leave when paid in the
' governmental fund types and when incurred in the proprietary fund types.
At June 30, 1989, the unfunded liability for vacation and sick leave
accumulated by the City's governmental funds totalled $4,307,025 (note
' 12f) . The City has recorded this amount in the General Long-Term Debt
Account Group with the assumption that these amounts will be paid with
future financial resources rather than currently available spendable
' resources. In the proprietary fund types the liability of $128,085 has
been recorded. These amounts represent the "cash surrender value" of all
accumulated vacation and sick leave which is the amount that would be paid
to employees if they terminate. Vacation is paid at 100% of the accrued
amount, while sick leave is paid at varying amounts depending on the
employee's contract.
1
1
See independent auditor' s report -17-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS '
(continued)
.TONE 30, 1989
1. SUMMARY OF SIGNIFICANT AOODUNrING POLICIES (O[WrINUED): '
k. Fund Equity: '
The various types of fund equity recorded on the balance sheet are '
described below:
Governmental Fund Types
Reserved Fund Balance represents that portion of fund balance that is not '
appropriable for expenditure or that is legally segregated for a specific
future use. '
Unreserved/Designated Fund Balance represents that portion of fund balance
that has been tentatively set aside by the City Council. '
Unreserved/Undesignated Fund Balance represents the portion of fund balance
that is available to be appropriated and spent by the City Council.
Proprietary Fund Types '
Retained Earnings represents the accumulated earnings of an enterprise or '
internal service fund.
Contributed Capital represents the permanent fund capital of a proprietary '
fund which is created when a general fixed asset is transferred to a
proprietary fund or a residual equity or certain types of operating
transfers are made to a proprietary fund. A description of the changes in
these amounts is shown in note 11(b) . ,
Account Groups '
Investment in General Fixed Assets represents the City's monetary
investment in general fixed assets at cost.
1. Property Tax Revenue:
Property tax in California is levied in accordance with article 13-A of the
California constitution. The basic levy is a countywide-levy of one '
percent of total assessed valuation. This basic levy is allocated to
1
See independent auditor' s report -18- '
CITY OF HUNTINGTON HnrsCH'
' NOTES TO FINANCIAL STATEMENTS
(continued)
JDNE 30, 1989
1. S[rT' M OF SIGNIFICANT ACOOUNrM POLICIES (CONTINUED):
' 1. Property Tax Revenue:
' county government, school districts, cities and special districts.
Additional levies require two-thirds approval by voters and are allocated
directly to the specific government unit. Property tax revenue is
recognized in the fiscal year levied provided that the revenue is collected
' during the year or within 60 days of year-end.
The County acts as a collection agent for property tax for all of the local
governmental units. Property taxes are normally collected twice per year.
The property tax calendar is as follows:
Lien Date- March 1st of prior fiscal year
Levy Date- July 1st
Due Date, First Installment- November loth
Due Date, Second Installment- February loth
Delinquent Date, First Installment- December llth
Delinquent Date, Second Installment- February llth
' The taxes are remitted to the local governments periodically during the
year. Below are shown the dates and percentages from the County (dates and
percentages vary slightly from year to year)
' November 30th- 5%
December 19th- 20%
December 28th- 20%
' February 1st- Balance of First Installment
March 28th- 5%
April 26th- 34%
' July 26th of next fiscal year- Balance of Second Installment
' m. Allocation of Interest Income Among Funds:
The City pools all non-restricted cash for investment purchases. Interest
' income is allocated monthly to the various funds based on the month-end
cash balances. Interest income from restricted cash is recorded directly
in the fund earning the income.
' See independent auditor' s report -19-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS '
(continued)
.TUNE 30, 1989
1. SUMMARY OF SIGNIFICANT AC00UNTING POLICIES (CONTINUED):
:
n. Equipment Replacement Fund: '
All machinery and equipment which is not owned by proprietary funds is '
owned by the Equipment Replacement Fund, an internal service fund. The
machinery and equipment is leased to user departments. All machinery and
equipment which does not replace existing equipment is purchased by the
respective fund and transferred to the Equipment Replacement Fund. This is '
recorded as a residual equity transfer out in the purchasing fund and
contributed capital in the Equipment Replacement Fund.
o. Emerald Cove Housing Fund Transfer:
The City operates the Emerald Cove Senior Citizens Apartment lex and '
Apia Comp
records the activity in the Emerald Cove Housing Fund, an enterprise fund.
The City annually transfers funds from the Low-Income Housing Fund to '
subsidize operations. These transfers are recorded as a residual equity
transfer in the Low-Income Housing Fund and contributed capital in the
Emerald Cove Housing Fund since the City desires annual determinations of '
net income.
p. Total Columns and Comparative Data on Combined Financial Statements: '
The combined financial statements include total columns which aggregate the '
financial statements of the various fund types and account groups. The
columns are designated "memorandum only" because the totals are not
comparable to a consolidation since interfund transactions (with the '
exception of certain leases between the oversight unit and component units
described in note 2) are not eliminated.
Comparative total data for the prior year have been presented in the '
accompanying financial statements in order to provide an understanding of
changes in the City's financial position and operations. However,
comparative data for individual funds have not been presented in all '
statements because their inclusion would make certain statements unduly
complex and difficult to understand.
See independent auditor' s report -20- '
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
(continued)
' JONE 30, 1989
' 1. SCARY OF SIGNIFICANT AC000M9 1G POLICIES (CONTINUED):
' q. Joint Ventures:
' The City is involved in one joint venture which is recorded in a
proprietary fund type. It is recorded using the equity method of
accounting. The net increase in the City's equity position is recorded as
a non-operating revenue or expense.
2. DESCRIPTIGN OF THE REPORTING ENTITY:
This report incorporates GASB Code Section 2100, "Defining the Governmental
' Reporting Entity," which outlines criteria to determine whether a separate
legal entity's financial information should be included in the City's
financial statements. Based upon the statement's guidelines, certain
separate legal entities have been included in this report. The criteria
' used in evaluating the different entities were oversight responsibility,
financial dependency, ability to influence operations, designation of
management, budget adoption, significant influence over operations,
' financing deficits or entitlement to surpluses, location within the City's
geographic boundaries and benefit and general availability to the citizens
of Huntington Beach. Below is a description of each of these entities and
' how their financial activity has been evaluated and incorporated into this
report:
Huntington Beach Public Facilities Corporation (Public Facilities
' Corporation)- This entity was formed in 1970 to issue bonds to construct
the civic center and library complexes. The City leases the facilities
from the Public Facilities Corporation. The lease is a capital lease
' because title to the facilities passes to the City upon termination of the
lease. The Public Facilities Corporation's original governing body was
appointed by the City Council. However, the governing board itself appoints
' any successors. The City Council adopts an annual budget for the Public
Facilities Corporation which cannot terminate its lease with the City if
the City meets the terms of the lease. At the termination of the lease,
the Public_ Facilities Corporation will dissolve and its assets will revert
' to the City. The assets and related revenue and expenditures that are used
for repayment of the bonds are recorded as a debt service fund. Assets
used to construct capital improvements are recorded as a capital projects
' fund. The capital projects fund normally receives no revenue other than
interest. If additional funds are required for capital projects, they will
' See independent auditor s report -21-
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
(continued)
JUNE 30, 1989 '
2. DFSCRIPTICN OF THE REPORT IM ENTITY: t
be transferred from the Public Facilities Corporation Debt Service Fund. '
Since the Public Facilities Corporation is a part of the City's reporting
entity, the capital lease between the City and the Public Facilities
Corporation has been eliminated. '
Parking Authority of the City of Huntington Beach (Parking Authority)-
This entity was formed in 1967 to issue bonds to construct off-street
parking facilities. The City leases the facilities from the Parking '
Authority. The lease is a capital lease because the City Council may, by
resolution, dissolve the Parking Authority and deed the assets to the City.
The Parking Authority's governing body is the City Council which annually '
adopts a budget for the Parking Authority. The Parking Authority is
financially dependent on the City for all its operations. At any time
during the term of the lease the lease payment may be forgiven by '
resolution of the City Council if there is sufficient cash in the Parking
Authority to meet the debt service requirements. The assets and related
revenue and expenditures that are used for repayment of the bonds are
recorded in a debt service fund. Assets used to construct capital ,
improvements are recorded in a capital projects fund. The capital projects
fund normally receives no revenue. If additional funds are required, they
will be transferred from the Parking Authority Debt Service Fund. Since '
the Parking Authority is a part of the City's reporting entity, the lease
has been eliminated.
Redevelopment Agency of the City of Huntington Beach (Redevelopment '
Agency)- This entity was formed in 1967 to facilitate the renovation of
older areas in the City limits. The City Council serves as governing body
of and adopts an annual budget for the Redevelopment Agency. The Agency '
is financially dependent on the City for all of its operations. The tax
increment revenue received by the Agency which can only be used to repay
Agency debt is recorded in a debt service fund and the capital improvements '
made are recorded in a capital projects fund. Long-term advances from the
City to the Agency have been recorded as a long-term advance on the
respective fund's balance sheet with a corresponding reservation of fund
equity. The Agency's debt is recorded in the General Long-Term Debt '
Account Group since these amounts will be paid from future financial
resources.
Huntington Beach Civic Improvement Corporation (Civic Improvement '
Corporation)- This corporation was formed to provide for the defeasance of
the Huntington Beach Public Facilities Corporation Leasehold Mortgage '
Bonds- 1st Issue as described in Note 12. The Civic Improvement
See independent auditor' s report -22- t
P P
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
' 2. DESCRIPTION OF THE REP(NTIM ENTITY:
' Corporation issued $20,000,000 of certificates of participation to provide
for this defeasance. The governing board of the Civic Improvement
Corporation is the City Council which also adopts its annual budget. The
Civic Improvement Corporation is dependent upon the City for all of its
' operations. The Civic Improvement Corporation has title to the Civic
Center complex and leases it to the City. It is a capital lease because
title to the Civic Center complex reverts to the City at the end of the
' lease. The lease cannot be terminated if the City meets all its financial
obligations. The assets pledged for repayment of the certificates of
participation and the related revenues and expenditures are recorded in the
' Civic Improvement Corporation Debt Service Fund. The lease has been
eliminated.
' Hunting(on Beach Public Financing Authority (Public Financing Authority)-
This corporation was formed in March, 1988 to issue debt to finance public
improvements and other capital purchases for the City and Redevelopment
Agency. The Authority's governing body is the City Council which also
' adopts the annual budget. The Authority is totally financially dependent
on the City. The Authority's activity is recorded as both a debt service
fund and as a portion of the activity in the Equipment Replacement Fund (a
' proprietary fund type) .
There are many other governmental agencies, including the County of Orange,
' various elementary school districts, the Coast Community College District,
the Huntington Beach Union High School District and various special
districts which provide services within the City. These entities have
independently elected governing boards and are not a component unit of the
' City of Huntington Beach and their financial information is not included in
this report..
' 3. CASH AND 1NVESIMENTS:
' Cash and investments at June 30, 1989 totalled $114,408,057 and are
classified in the accompanying combined balance sheet as follows (in
thousands) :
' Cash and Investments $ 88,321
Cash with Fiscal Agent 26,087
' Total 11$ 4,408
See independent auditor' s report -23-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 '
3. CASH AND INVESTMENTS VWrINUED): I
The following disclosures are made in accordance with GASB Statement '
Number 3.
Collateral for Deposits '
Under provisions of the California Government Code, California banks and
savings and loan associations are required to secure a City's deposits by
pledging government securities with a value of 110% of a City's deposit. '
California law also allows financial institutions to secure City deposits
by Pledging first trust deed morLgage notes having a value of 150% of a
City's total deposits. '
The collateral for deposits in Federal and state chartered banks is held in
safekeeping by an authorized Agent of Depository recognized by the State of
California Department of Banking. The collateral for deposits with savings '
and loan associations is generally held in safekeeping by the Federal Home
Loan Bank in San Francisco, California as a third-party trustee. These
securities are physically held in an undivided pool for all California '
public agency depositors. The trustees keep detailed records of the
security pool.
The City Treasurer, at his discretion, may waive the collateral requirement
for deposits which are fully insured up to $100,000 by the Federal Deposit '
Insurance Corporation or the Federal Savings and Loan Insurance
Corporation. It is the City's policy to waive the collateral requirement
if there is a higher interest yield on the investments.
Authorized Investments 1
The City of Huntington Beach operates its pooled cash investments under the '
"Prudent Man Rule" (California Civil Code sections 2261 et seq. ) . This
allows a broad spectrum of investments as long as the investment is deemed
prudent and allowable under legislation of the State of California '
(Government Code Section 53600 et seq. ) .
Under the provisions of the City's investment policy and in accordance
with Section 53601 of the California Government Code, the City may invest '
in the following types of instruments:
1
See independent auditor' - - 'p s report 24
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
t3. CASH AND INVESTMEWS (OONTINUED):
' a. Bankers acceptances
b. Negotiable certificates of deposit
c. Commercial paper
d. Bonds issued by the City
e. Obligations of the United States Treasury
f. Federal Agency Obligations of:
Federal Intermediate Credit Bank (FICBs)
Federal Land Bank (FLBs)
' Federal Home Loan Bank (FHLBs)
Federal National Mortgage Association (FNMAs)
Small Business Administration (SBAs)
' Government National Mortgage Association (GNMAs)
Tennessee Valley Authorities (TVAs)
Student Loan Association Notes (Sallie Mae's)
' g. Obligations of the State of California or of any local agency within the
State of California:
' The Local Agency Investment Fund (LAIF) is a special fund of the
California State Treasury through which any local government may pool
investments. Each agency may invest up to $10,000,000 in this fund.
' Investments in LAIF are highly liquid and may be converted to cash
within 24 hours. Investments with LAIF are secured by the full faith
and credit of the State of California.
' h. Repurchase Agreements:
Throughout the year ending June 30, 1989, the City utilized overnight
' repurchase agreements for temporary investment of idle cash. Such
agreements were used on average of 20 to 22 times per month and
generally did not exceed 10% of the City's investment portfolio.
' i. Reverse-Repurchase Agreements:
Although the City's investment policy does not preclude the use of
' Reverse-Repurchase Agreements, the City did not borrow through the use
of reverse repurchase agreements at any time during the year.
' j. Medium-Tenn Corporate Notes
See independent auditor' s report -25-
1
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
.TONE 30, 1989 '
3. CASE AND INVERIMM ( C T INUED)
k. Mutual Funds '
Safekeeping Arrangements for Investments
Under Sections 53651 to 53653 of the California Government Code, as '
amended, the collateral underlying an agency's investments must be
delivered to the City. If U.S. Federal obligations are used as the
underlying collateral, the delivery may be made by "book-entry" only. '
For all other collateral, the security must be physically delivered to
the City or a third-party custodial agent.
Under California Senate Bill number 2115, passed in 1986, a bank is '
permitted to maintain the underlying securities in its Trust or
Safekeeping Department when acting as a third-party custodial agent.
GASB Statement 3 requires the City's bank balance of deposits and
investments be categorized as follows:
Deposits '
Category 1- Deposits which are insured by FDIC, FSLIC, a state ,
depository insurance fund or a multiple-financial institution collateral
pool, or deposits which are collateralized with securities held by the
City or the City's agent in the City's name.
Category 2- Deposits which are collateralized with securities held by '
the pledging financial institutions trust department in the City's name.
Category 3- Deposits which are uncollateralized, or collateralized but
the pledged securities are not held in the City's name.
Investments '
Category 1- Investment which are insured by SIPC, or where the '
securities are held by the City or the City's agent in the City's name.
Category 2- Investments which are uninsured, where the securities are '
held by the purchasing financial institution's trust department or agent
in the City's name.
See independent auditor' s report -26-
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
' (continued)
.TUNE 30, 1989
' 3. CASH AND INVESTMUM (OONrINUED)
' Category 3- Investments which are uninsured, where the securities are
held by the purchasing financial institution's trust department or
agent, but not in the City's name.
tCategory Market
1 2 3 Cost Value
' Deposits
Demand Accounts $ - $ 1,853 $ - $ 1,853 $ 1,853
' Certificates 7,144 45,596 - 52,740 52,740
of Deposit
Cash with riscal - - 15,915 15,915 15,915
Agent
' Deferred - - 10,172 10,172 10,172
Compensation
Subtotal 7,144 47,449 26,087 80,680 80,680
' Investments
' Corporate Notes $ 2,936 $ 778 $ _ 3,714 3,672
Bankers 13,025 497 $13,522 13,547
Acceptances
Federal 1,444 - - 1,444 1,477
' Obligations -
Mutual Funds - 7,712 7,712 7,768
Repurchase - - 11900 1,900 1,900
' Agreements
Subtotal $ 17,405 $1,275 9$ ,612 2$ 8,292 2$ 8,364
' Investment in LAIF 10,000 10,000
Petty Cash 49 49
Savings
' Total Bank Deposits 119,021 119,093
and Investments
' Less Demand Warrants (4,613) (4,613)
Outstanding
' Total Cash and 11$ 4,408 11$ 4,480
Investments
See independent auditor' s report -27-
CITY OF HUNTINGTON BEACH t
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
4. DEFERRED OOMPEKSMCN: '
Permanent City employees have the option of deferring a portion of their ,
salary under Section 457 of the Internal Revenue Code. These amounts are
invested in savings accounts, certificates of deposit and other prudent
investments. The City retains title to these funds until withdrawn by. the '
employee, which may take place at termination or any later date. The
assets of the plan remain subject to the general claims of creditors of the
City. The amount of deferred compensation payable at June 30, 1989 was
$13,429,000 which represents the market value of the investments. '
Since the City has a fiduciary responsibility to administer the plan, the
assets are recorded in an agency fund in the City's financial statements. '
The assets of the plan are subject to the claims of the City's general
creditors and must remain the property of the City until paid or made
available to the participants. The City believes that it is unlikely that '
it will use the assets to satisfy the claims of general creditors now or in
the future. The City offers two different investment mediums for
participants. The choice of investment is made by the participants.
5. DEkINMED REVENUE:
Certain revenues in governmental funds due from the Redevelopment Agency
have been deferred until received from the Agency. Interest on these '
amounts accrues at 10% per annum with the exception of interest on loans
from the Public Financing Authority which accrues interest at varying
rates. They are detailed below (in thousands) :
1
GENERAL FUND:
Development fees deferred in 1984 and 1985 $ 173 ,
Land sales from the City to the
Redevelopment Agency from 1982/83 to 30,636 '
1988/89
Interest on above amounts and on general 4,352
fund advances from 1978/79 to 1987/88
Total General Fund 35,161 ,
See independent auditor' s report -28-
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
5. DEFERRED REVENUE (OONT1'INUED):
SPECIAL REVENUE FUNDS:
Park Acquisition and Development Fund:
' Sale of Emerald Cove site to Redevelopment 1,741
Agency
Development fees deferred in 1985 248
' Land sale proceeds paid to Emerald Cove 832
Interest on above amounts 289
Total Park Acquisition and Development Fund 3,110
' Sewer Fund:
' Development fees deferred in 1985 43
Interest on above amounts 19
Total Sewer Fund 62
' Gas Tax Fund
Interest-on advances from 1988/89 50
' Planned Local Drainage:
Development fees deferred in 1985 72
' Interest on above amounts and on advances 84
from 1987/88
Total Drainage Fund 156
Total Special Revenue Funds 3,378
DEBT SERVICE FUNDS:
Public Financing Authority:
' Interest on advances from 1988/89 361
CAPITAL PROJECTS FUNDS
' Parking Structure
Interest on above advances from 1988/89 675
Total Deferred Revenue 3$ 9,575
' See independent auditor' s - -
p r s report 29
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
6. REMEMENT PLAN - NORMAL: '
a. Plan Description: ,
The City contributes to the California Public Employees Retirement System '
(PERS) , an agent, multiple employer retirement system that acts as a common
investment and administrative agent for participating public entities in
California. Generally only an employee's base salary (excluding overtime)
is subject to retirement benefits. The total payroll for the year ending t
June 30, 1989 was $46,537,456. The payroll subject to retirement benefits
was $38,113,271.
The plan covers all permanent City employees and temporary employees who '
work more than 1000 hours in a twelve month period. Benefits vest after
five years of service. Benefits for employees vary based upon such factors '
as final yearly compensation, safety or non-safety status and age at
retirement. There are two groups of covered employees:
Safety employees- include sworn police, fire and marine safety employees '
Miscellaneous employees- all other covered employees
b. Employee and Employer Contribution Obligations:
The City makes two types of contributions on behalf of covered employees. '
The first contribution represents the amount required to be made by the
City (the employer rate) . The second represents an amount which is '
normally paid by the employee, but is reimbursed to the employee by the
City (the member rate) . The member rate is set by contract and normally
remains unchanged.
The employer rate is set by PERS and changes from year to year. The '
employer rates for the fiscal year ending June 30, 1989 are shown below:
See independent auditor' s report -30-
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
(continued)
,TUNE 30, 1989
' 6. RETIREMENT PLAN — No[ftkL (00NTINUED):
' b. Employee and Employer Contribution Obligations:
Miscellaneous Safety
' Category Category
Normal Cost Rate 6.141% 16.384%
Unfunded Liability Rate .038% .137%
tTotal Required 6.179% 16.521%
' The member rates for the fiscal year ending June 30, 1989 are as follows:
' Member Rates
as a Percentage
of Wages
' Local Miscellaneous Members- 7%
Local Safety Members- 9%
' The employer rate contributes the remaining amounts necessary to fund the
benefits for its members, using the actuarial basis recommended by the PERS
' actuaries and actuarial consultants and adopted by the Board of
Administration.
' c. Funding Status and Progress:
' Pension benefit obligation is a standardized measure of the present value
of future pension benefits estimated to be payable in the future due to
employee service to date. It helps assess the funding status of the
' system, assess progress made in accumulating sufficient assets to pay
benefits when due, and make comparisons among employers. This measure is
independent of the funding method used to determine City contributions to
the system.
PERS conducted an actuarial valuation to determine the City's pension
' benefit obligation as of June 30, 1989. Significant actuarial assumptions
used were as follows:
See independent auditor' s report -31-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
.TUNE 30, 1989
6. RE H"Wr PLAN - NORMAL (OWTINUED): '
c. Etiinding Status and Progress: '
. Rate of return on present and future assets- 8.5% per annum '
. Projected salary increases for covered employees due to inflation- 5.5%
per year
• Projected salary increases due to merit- 1.5% per year.
• Postretirement benefit increases- 0%
The pension benefit obligation as of June 30, 1989 based upon June 330,
1988 data adjusted for plan amendments adopted through January 9, 1989 was '
as follows (in thousands) :
Retirees and beneficiaries currently receiving benefits '
and terminated employees not yet receiving benefits $44,478
Current Employees:
Accumulated employee contributions and investment 32,135 '
earnings
Employer-financed, vested 48,521 t
Employer-financed, non-vested 1,653
Total pension benefit obligation 126,787 '
Net assets available for benefits at cost
(market value is $136,408 120,609 '
Unfunded pension benefit obligation $ 6,178
d. Actuarially Determined Contribution Requirements and Contributions Made:
PERS uses the Ent Age Normal Actuarial Cost Method which 's a '
Entry 9 � projected
benefit cost method. That is, it takes into account those benefits that
are expected to be earned in the future as well as those already accrued. '
This method states that the normal cost for an employee is the level amount
which would fund the projected benefit if it were paid annually from date '
of employment until retirement. PERS uses a modification of the Entry Age
See independent auditor' s report -32-
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
' 6. RETIR04fflP PLAN - NOR RL (OONTINUED):
' d. Actuarially Determined Contribution Requirements and Contributions Made:
' Cost method in which the employer's total normal cost is expressed as a
level percent of payroll. PEELS also uses the level percentage of payroll
method to amortize any unfunded actuarial liabilities. The amortization
period of the unfunded actuarial liability ends in the year 2000 for prior
' service benefits and in 2011 for current service benefits.
The significant actuarial assumptions used to compute the actuarially
' determined contribution requirement are the same as those used to compute
the pension benefit obligation, as previously described.
The contribution to the system for 1988/89 of $6,817,910 was made in
' accordance with actuarially determined requirements computed through an
actuarial valuation performed as of June 30, 1987. The contribution
consisted of the normal cost, $4,400,028 (11.54% of current covered
' payroll) and a $121,050 amortization of the unfunded actuarial accrued
liability ( .32% of covered payroll) . The City made employer contributions
of $4,521,078 (11.86% of covered payroll) and on behalf of employees
' contributed $2,296,832 (6.02% of covered payroll.
' e. Trend Information:
Trend information gives an indication of the progress made in accumulating
' sufficient assets to pay benefits when due. Ten year trend information for
the City of Huntington Beach is not published in the California Public
Employees Retirement System Annual Report. Therefore, ten years of trend
' information are required within the City's financial statements since PEELS
does not display financial information for individual agencies within their
report. 1987/88 is the first year that this actuarial information has been
' made available by PERS and until ten years are available, as many years as
are available will be presented. Trend information for 1987/88 and 1988/89
are shown and employer contributions for 1986/87, 1987/88 and 1988/89 are
shown (dollar amounts expressed in millions) :
1
See independent auditor' o p s report -3 -
3
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 '
6. RETIR04Mr PLAN -NFL (CONTINUED): '
e. Trend Information: '
1986/87 1987/88 1988/89
Net assets available for benefits - $105.6 $120.6
Pension benefit obligation - $115.3 '
$126.7
Net assets available for benefits, expressed - 91.6% 95.1%
as a percentage of the pension benefit '
obligation
Unfunded pension benefit obligation - 9.7% 6.1%
Annual Covered Payroll $32.1 $ 36.7 $ 38.1 ,
Unfunded pcnsion benefit obligation as - 26.4% 16.0%
a percentage of covered payroll '
Employer contributions $ 4.5 $ 4.4 $ 4.5
Employer contributions expressed as a
percentage of annual covered made 14.1% 12.7% 11.9% '
according to actuarially determined
requirements
7. IZETIREMENT PLAN - .
a. Plan Description: '
The City provides a retirement supplement plan to all employees covered '
under the City's normal retirement plan with the California Public
Etployees Retirement System (see note 6) . This plan will pay the retiree '
an additional amount to his or her normal amount for life. The amount will
cease upon the employee's death. The amount is computed at retirement and
remains constant for his or her life.
b. Employer and &Vloyee Contribution Obligations:
The City is funding the retirement supplement plan on a "pay-as-you-go"
basis. This means that no funds are being set-aside to fund the future '
unfunded liabilities.
See independent auditor' s report -34- '
P P
t
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
t7. PLAN - SUPPLEMENTAL (OO TL'INUED):
' c. Funding Status and Progress:
' The City conducted an actuarial valuation to determine the pension benefit
obligation as of June 30, 1989. Significant actuarial assumptions used
were identical to the assumptions described in note 6. The pension benefit
obligation as of June 30, 1988 is as follows:
' Retirees and beneficiaries currently receiving benefits
and terminated employees not yet receiving benefits $1,292
' Current employees who are vested 5,779
' Total pension benefit obligation $7,071
Net assets available for benefits 0
' Unfunded pension benefit obligation 7$ ,071
' Since there was no analysis of the pension benefit obligation as of June
30, 1988, no analysis of the total change in pension benefit obligation is
' presented.
d. Actuarially Determined Contribution Requirements and Contributions Made
' Since the City is on a "pay-as-you-go" basis, there was no computation as
to the level of funding for the plan.
' e. Trend Information
This is the first, year any analysis of funding status and no trend
' information is available. As soon as trend information is available, it
will be presented.
f. Accounting For Supplemental Pension Plan
tExpenditures for this pension plan are recorded in the general fund.
During the year, expenditures of $156,170 were recorded.
1
See independent auditor' s report -35-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 '
8. POGIRETIREMENT MEDICAL INSURANCE: '
a. Plan Description: '
The City provides post-retirement medical insurance benefits to retirees '
who meet all three of the following criteria:
.At the time of retirement the employee is employed by the City; and
.At the time of retirement the employee has a minimum of ten years of '
service or is granted a service connected disability retirement.
.Following official separation from the City, the retiree is granted a
retirement allowance by the California Public Employee's Retirement '
System.
The City's obligation to provide the benefits to a retiree ceases when any '
of the following occurs:
.During any period the retiree is eligible to receive health insurance at
the expense of another employer. '
.The retiree becomes eligible to enroll automatically or voluntarily in
Medicare.
If an retiree dies, the benefits that would be payable for his or her '
insurance would be provided to the spouse or family for eighteen months.
Benefits for insurance premiums are payable based on the years of service '
credit for the retiree. The premiums may be used for any of the health
plans that the City's active employees may participate in.
1
b. Accounting and Funding:
1
The Retiree Medical Insurance Fund is recorded as an agency fund.
Contributions are made by the City's operating funds on a periodic basis. '
The fund is only to be used to purchase medical insurance for retirees.
There are no outstanding liabilities at year-end. During the year payments
of $53,151 were made for insurance premiums.
1
1
See independent auditor' s report -36-
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
9. SELF INSURANCE:
1 The City. is self-insured for workers' compensation, general liability and
certain health claims. The self-insurance covers the first $150,000 for
worker's compensation claims and the first $75,000 of each health claim.
Claims in excess of self-insurance limits are covered by insurance up to
$1,000,000 for health and the statutory limit for workers' compensation.
The City maintains no general liability policy.
' Self-Insurance activity is recorded in an internal service fund. It is the
City's policy to charge expense claims that are reasonably determinable and
where the evidence of the City's liability is probable in accordance with
' GASB Code Section C.50.110. Expense is recognized for claims that have
occurred but have not yet been reported to the City. Charges are made by
the Self-Insurance Rand to other funds based on estimated costs. The
' liability for self-insurance claims includes an estimate for amounts
incurred but not reported at year-end. Transfers from the General Fund are
periodically made to cover deficits caused from inadequate charges to other
funds.
10. I11T INFUND TRAN.SA TICNS:
a. Receivables/Payables:
Individual interfund receivables and LAY ables at June 30, 1989 were as
follows (in thousands) :
' Advances to Advances from
Other Rands Other Rands
tGeneral Rand $48,402
Special Revenue Funds:
' Sewer 62
Planned Local Drainage 406
Grants 1,172
Gas Tax 550
' Park Acquisition and 3,110
Development
1
1
See independent auditor' s report -37-
1
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 '
10. INMFUND TRANSACTICNS (OONl'INUFA):
Debt Service Funds: '
Public Financing Authority 21,340
Capital Projects Funds: '
Parking Structure 7,425
Enterprise Funds: '
Water Utility 1,417
Emerald Cove Housing $ 944
General Long-Term Debt Account Group 82,940 '
Totals 8$ 3,884 8$ 3,884 '
b. Residual Equity Transfers
Below is a schedule reconciling total residual equity transfers in with
total residual equity transfers out (in thousands) '
Residual Equity transfers $4,992
Plus current year transfers to Equipment Replacement '
Fund (a proprietary fund) which were recorded as
contributed capital in the Equipment Replacement Fund 819
Plus transfers from Low Income Housing Fund to the '
Emerald Cove Housing Fund (a proprietary fund) which
were recorded as contributed capital in the Emerald 60 '
Cove Housing Fund.
Plus transfers from Reservoir Hill Fund to the Water
Fund (a proprietary fund) which were recorded as '
contributed capital in the Water Fund. 94
Residual transfers out $5,965 '
See -independent auditor' s report -3 'p p 8
1
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
11. PROPRIETARY FUNDS SUPPLEMENTARY INFCF94 ON:
' a. Segment Information for Enterprise Funds:
' The City maintains three enterprise funds; Water Utility, Meadowlark Golf
Course and Emerald Cove Housing. Certain key financial data was as follows
(in thousands) :
' MEADOWLARK EMERALD
WATER GOLF COVE
UTILITY COURSE HOUSING TOTAL
' Operating
Revenues $13,483 $ 283 $ 607 $14,373
' Depreciation
Expense 1,275 27 90 1,392
Operating
Income (Loss) 1,442 256 248 1,946
' Net Income (Loss) 2,191 221 13 2,425
Contributed
' Capital Received, 470 0 62 532
Net
Net Acquisitions
' (Dispositions)
of Fixed Assets 430 0 0 430
Net Working
Capital 7,079 936 1,525 9,540
' Total Assets 40,222 4,159 6,986 51,367
Long-Term
Obligations,
' Net of
Current Portion 756 1,671 5,480 7,907
' Total Equity 36,792 2,418 1,430 40,640
See independent auditor' s report -39-
1
1
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
c
11. PiZOPRIETARY FUNDS .:UPPIED22?TARY IlNIMVjTIOrT:
b. Contributed Capital: '
Below is a schedule of the changes in contributed capital during the year '
(in thousands) :
Water Meadowlark Emerald Equipment '
Source: Utility Golf Course Cove Housing Replacement
Additions '
Developer $ 282 $ - $ - $ -
Contributions
Reservoir Hill '
Transfer (note 10b) 94 - - -
Low Income '
Housing Transfer - - 62 -
(note llb)
Equipment Purchases - - -
by City (note llb) 819
Total Additions $ 376 $ - $ 62 $ 819 '
Reductions
Disposals of
Equipment - - - 379
Total Reductions - - - 379 '
Net Increase '
(Decrease) in
Contributed Capital 376 - 62 440
Contributed Capital '
July 1, 1988 34,508 1,267 1,373 12,214
Contributed Capital, 3$ 4,884 $1,267 11,435 1$ 2,654 '
June 30, 1989
See independent auditor' s report -40- '
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
12. GENERAL LCl3G-PERM DEBT:
Below is a summary of changes in general long-term debt for the year ending
June 30, 1989 (in thousands) :
Balance Balance
Outstanding Outstanding
July 1, June 30,
1988 Additions (Retirements) 1989
1970 Park Bonds $2,590 $ 0 $(310) $2,280
Public Facilities
t Corporation Leasehold 3,000 0 (230) 2,770
Mortgage Bonds-
2nd Issue
Parking Authority 825 0 (125) 700
Revenue Bonds
' Civic Improvement
Corporation
Certificates 19,830 0 (220) 19,610
' of Participation
Coastal Conservancy 408 0 (408) 0
' Note
Compensated Absences 3,822 485 0 4,307
' Advances From 36,918 51,145 (6,194) 82,940
Other Funds
' Amounts Due Under
Owner Participation 1,408 3,588 (1,408) 3,588
and Disposition and
' Development Agreements
Public Financing
Authority Revenue 26,775 0 (265) 26,510
' Bonds
' Mortgages Payable 0 2,875 0 2,875
Total 9$ 5,576 60,871 ($11,167) 1145,580
See independent auditor' s report -41-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS t
(continued)
JONE 30, 1989
12. COAL 10r-TER14 DEBT (OONrINOCD):
a. 1970 Park Bonds: '
on March 1, 1970 the City sold $6,000,000 of general obligation bonds to '
acquire and construct park facilities. Principal matures annually on March
1st with interest, at 6%, payable semi-annually. The annual debt service
requirements to amortize the bonds outstanding at June 30, 1989 are as
follows (in thousands) :
Year
Ending
June 30, Principal Interest Total '
1990 $305 $137 $442
1991 350 118 468 '
1992 370 98 468
1993 395 75 470
1994 415 52 467
1995 445 27 472 '
Total 2$ ,280s507 2$ ,787
b. HuntingLon Beach Public Facilities Corporation Leasehold Mortgage Bonds- '
Second Issue:
on September 1, 1972 $5,000,000 of leasehold mortgage bonds were issued to '
construct the Central Library complex. The bonds are secured by a lease
whereby the City annually transfers $399,000 to the Public Facilities
Corporation. Principal matures annually on September 1st with interest '
ranging from 5.0% to 5.9% per annum payable semi-annually The annual debt
service requirements to amortize the bonds outstanding at June 30, 1989 are
as follows (in thousands) :
See independent auditor' s report -42- '
' CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
12. GENERAL IENG-TER14 DMr (00Nl'INOED):
' b. Huntington Beach Public Facilities Corporation Leasehold mortgage Bonds-
Second Issue:
' Year
Ending
' June 30, Principal Interest Total
1990 $240 $146 $386
' 1991 260 132 392
1992 270 117 387
1993 290 101 391
1994 305 84 389
' 1995 320 66 386
1996 340 46 386
1997 360 28 388
' 1998 385 10 395
Total 2$ ,770 $730 3$ ,500
c. Parking Authority Revenue Bonds:
1
On September 1, 1968 $2,300,000 of revenue bonds were issued to construct
' off-street parking improvements. The bonds are secured by a lease which
requires that the City budget annual transfers to the Parking Authority
sufficient to meet the debt service requirements on the bonds. Principal
' matures annually on September 1 and bears interest at 5.25% per annum,
payable semi-annually.
' The annual debt service requirements to amortize the bonds outstanding at
June 30, 1989 are as follows (in thousands) :
1
1
' See independent auditor' s report -43-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JONE 30, 1989 '
12. (SAL I ONG-TE104 DEBT (OCHTJ.'INOED)
c. Parking Authority Revenue Bonds: '
Year '
Ending
June 30, Principal Interest Total
1990 135 33 168 '
1991 140 26 166
1992 150 18 168
1993 160 10 170 '
1994 115 3 118
Total $ 70090 $ 790 '
d. Huntington Beach Civic Improvement Corporation Certificates of '
Participation:
on July 15, 1986 the Huntington Civic Improvement Corporation issued '
$20,000,000 of certificates of participation in order to defease the
Huntington Beach Public Facilities Corporation Leasehold Mortgage Bonds- '
First Issue and construct certain parking facilities. The Civic
Improvement Corporation owns the Civic Center complex and leases it to the
City. The City has agreed to make annual lease payments equal to debt
service requirements on the certificates. The interest rates on the '
certificates varies between 4.75% and 7.9%. Interest is payable semi-
annually on February 1st and August 1st with principal maturing annually on
August 1st. Debt service requirements to maturity are as follows (in '
thousands) :
1
See independent auditor' s report -44- '
P P
1
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
' 12. GENERAL 104G- gI M DEDT (CO NIINUED):
d. Huntington Beach Civic Improvement Corporation Certificates of
Participation:
' Year
Ending
June 30, Principal Interest Total
' 1990 $230 $1,508 $1,738
1991 245 1,494 1,739
1992 260 1,479 1,739
1993 275 1,462 1,737
1994 295 1,443 1,738
' 1995 315 1,422 1,737
1996 335 1,399 1,734
1997 360 1,374 1,734
' 1998 385 1,346 1,731
1999 415 1,316 1,731
2000-2007 4,715 9,079 13,794
2008-2016 11,780 5,234 17,014
Total 19,610 2$ 8,556 $ 48,166
' e. California Coastal Conservancy Payable:
able:
Y
' In March, 1983, a storm damaged the municipal pier. The California Coastal
Conservancy agreed to lend the City $425,000 to cover a portion of the
' repair costs. Due to the complete destruction of the end of the pier in
January of 1988 and the later condemnation of the entire pier, the State
Coastal Conservancy Commission agreed to amend the original loan agreement
' and forgive the loan.
f. Compensated Absences Payable:
There is no fixed payment schedule to pay the governmental fund liability
' of $4,307,025 for compensated absences earned through June 30, 1989 (see
note lk) .
t
See independent auditor' s report -45-
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
JONE 30, 1989 ,
12. GENERAL ITEM DEBT (CONTINUED): '
g. Long-term Advances from Other Funds: '
There is no fixed repayment schedule for the Redevelopment Agency to pay '
the long-term advances from the City which totalled $82,940,076 at June 30,
1989. Below is a description of the various transactions (in thousands) :
Sale of land by the Park Acquisition and Development '
Fund in 1983 for $1,741 plus interest of $74 which was $1,915
computed at 10% per annum. During the year $177 of '
principal and $192 of interest was repaid.
Land sales from the General Fund from 1983 to 1989 '
totalling $30,635 plus interest totalling $3,064. 33,699
During the year 358 of interest was repaid.
Cash advances from the General Fund from 1978 to t
1989 for $13,132 plus interest of $1,271 14,403
which was computed at 10% per annum. During the
year $3,570 and $1,648 of interest was repaid. '
Cash advances from the Grant Fund in 1983 and 1989
no interest. 1,173 '
Developers fees payable to various funds totalling
$558 which are subsidized by the Agency plus
interest of $190 which was computed at 10% per annum. '
During the year $130 of principal and $117 of interest 748
was repaid.
Cash advances from the Public Financing Authority '
in 1988 and 1989 totalling $20,979 plus interest of 21,340
$361 computed at varying rates.
Advances from the Drainage Fund in 1987 totalling $250 t
plus interest of $53 computed at 10% per annum: 303
Advances from the Parking Structure Fund in 1988 totalling 7,425 '
$6,750 plus interest of $675 computed at 10% per annum.
See independent auditor ' s report -46- '
1
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
12. GENERAL IONG-TERM DEBT (QONT•INUED):
' g. Long-term Advances from Other Funds:
t Advances from the Gas Tax Fund in 1988 totalling $500 plus 550
interest of $50 computed at 10% per annum.
Advances from the Water Fund totalling $1,139 in
' 1986/87 and 1987/88 plus interest of $245 which
was computed at 10% per annum: 1,384
tTotal amount advanced from other funds 8$ 2,940
' Below is a reconciliation of the changes in amounts advanced from other
funds to the Redevelopment Agency recorded as general long-term debt for
' the year ended June 30, 1989:
Amount due to other funds on July 1, 1988 $36,918
' Advances Received 46,033
Advances Repaid (6,194)
Interest recorded in other funds as deferred revenue 5,112
' Amount advanced from other funds, June 30, 1989 8$ 2,940
' h. Amounts Due Under Owner Participation and Disposition and Development
Agreements:
' Beginning in 1983, the Redevelopment Agency entered into various agreements
with outside parties to facilitate Redevelopment activities (see note 17) .
' part of two of these agreements calls for debt to be incurred to outside
developers.
In 1983, the Redevelopment Agency agreed to purchase certain public
' improvements from Nola Development Corporation for $1,408,047. The amount
carried interest at 11% per annum. The amount was to be repaid to Mola by
a pledge of tax increment revenues generated by other improvements
' constructed by Mola. In July, 1988 the Agency and Mola agreed to settle
the debt for $1,200,000.
See independent auditor ' s report -47-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 '
12. C114Q2AL I10r1G-47IiM DEBT (00 TrINUED): . I
h. Amounts Due Under Owner Participation and Disposition and Development '
Agreements:
In 1988 the Redevelopment Agency was loaned $2,730,332 by a private '
corporation to relocate tenants of a mobile home park. This advance
carries no interest. There is no fixed repayment schedule for this advance
but the amount will be repaid with a pledge of tax increment revenues and '
transient occupancy tax revenues received by the Agency.
Also in 1989 the Agency agreed to reimburse a private party for various t
public =Vrovements made for a specific project totalling $857,771. There
is no specific repayment schedule except that the amount is expected to be
repaid by early 1991. '
i. Public Financing Authority Revenue Bonds:
On May 1, 1988 the Public Financing Authority issued $26,775,000 of Revenue
Bonds to finance loans to four of the Redevelopment project areas. The '
bonds are secured by four separate loan agreements between the Public
Financing Authority and the Redevelopment Agency. Each loan agreement is
secured by a pledge of all taxes levied upon all taxable property within '
the related project area. A portion of the proceeds of the bonds were
withheld from the Public Financing Authority since the increment assessed
valuation (assessed valuation minus base year valuation) was not sufficient
to yield tax increment revenues to repay the loans. These proceeds are '
recorded as "Restricted Cash" on the Public Financing Authority's balance
sheet. This escrowed cash is invested in securities with yields sufficient
enough to cover debt service on the bonds should the increment assessed '
valuation not increase enough to yield sufficient tax increment revenues.
If the increment assessed valuation becomes large enough, this cash will be
released for general use by the Public Financing Authority. '
Interest on the bonds ranges from 5.75% to 8.375%. Interest is payable
semi-annually on May 1st and November 1st. Principal matures annually on
November 1st. Debt service requirements are as follows (in thousands) : '
See independent auditor' s report -48-
1
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
' (continued)
JUNE 30, 1989
' 12. GENERAL IONG-41M DEEP (OONTINUED):
' i. Public Financing Authority Revenue Bonds:
' Year
Ending
June 30, Principal Interest Total
t1990 $270 $2,165 $2,435
1991 295 2,149 2,444
1992 305 2,131 2,436
' 1993 325 2,111 2,436
1994 340 2,089 2,429
1995 370 2,065 2,435
t 1996 405 2,038 2,444
1997 430 2,009 2,439
1998 465 1,976 2,441
' 1999 495 1,940 2,435
2000-2007 5,735 13,775 19,510
2008-2018 17,075 4,858 21,933
' 26$ ,510 119,306 65,817
j. Miscellaneous Notes Payable:
In 1988 the Redevelopment Agency purchased property in the Main/Pier
project area and assumed three separate mortgages. The mortgages bear
interest at 11% with debt service payable monthly according to the mortgage
contract.
' Below is a schedule of debt service requirements to maturity (expressed in
thousands) .
See independent auditor' s report -49-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 ,
I
i
12. GENERAL IONG-'TERM DEEP (00NTIlQUED): '
j. Miscellaneous Notes Payable: '
Fiscal '
Year
Ending
June 30, Principal Interest Total
1990 $ 14 321 $ 335 '
1991 11050 200 1,250
1992 1,014 134 1,148
1993 18 87 105 '
1994 21 85 106
1995 758 759 1,517
Total $ 2,875 $ 1,586 11,461
'
k. Defeased Bonds Outstanding:
As of June 30, 1989, there were $6,095,000 of defeased Public Facilities ,
Corporation Leasehold Mortgage Bonds -1st Issue outstanding. The debt
service on these bonds is being handled by an escrow account consisting of '
guaranteed Federal securities with yields sufficient to fund all of the
required debt service.
13. PROPRIETARY FUND IKWY-TERM DEBT: '
The following is a summary of changes in proprietary fund long-term debt '
for the year ending June 30, 1989 (in thousands) :
t
See independent auditor' s report -50-
1
' CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
t13. PROPRIETARY FUND IEXrTERM DEEP:
' Balance Balance
Outstanding Outstanding
' July 1, July 1,
1988 Additions (Retirements) 1989
1963 Water
Revenue Bonds $ 869 $ 0 $166 $ 703
San Joaquin 220 0 54 166
Reservoir Note
' Meadowlark Golf
Course Note 1,729 0 29 1,700
' Emerald Cove
Certificates of
' Participation, net 4,523 13 0 4,536
of unamortized
discount of $64
' Note Payable
County of Orange 409 0 73 336
' Compensated
Absences 119 9 0 128
' Advances from other 944 0 0 944
Funds
' Claims Payable 7,336 86 0 7,422
Public financing
' Authority Certificates
of Participation 0 5,510 0 5,510
' Total 1$ 6,149 5$ ,618 _$ 22 121,445
The current portion of the proprietary fund long-term debt is $269,620
1
1
' See independent auditor' s report -51-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS '
(continued)
JDNR 30, 1989
1
13. PBURtIETARY FOND IGYk1G-TERt4 DWr (00NTINUED:
a. 1963 Water Revenue Bonds: '
On November 1, 1963 the City sold $3,750,000 of revenue bonds to construct '
water improvements. The bonds are secured by revenues of the Water Fund.
Principal matures annually on November 1 and bears interest at 3.5% per '
annum, payable semi-annually.
The annual debt service requirements to amortize the bonds outstanding at '
June 30, 1989 are as follows (in thousands) :
Year
Ending '
June 30, Principal Interest Total
1990 $ 190 $ 19 $ 209 '
1991 200 10 210
1992 200 6 206
1993 113 1 114
Total $ 703 $ 36 $ 739 '
The bond indenture requires that the Water Fund net revenues equal or '
exceed 1.25 times the annual debt service requirement (principal and
interest) . Net revenues are defined as gross revenues less maintenance and '
operation revenues, excluding depreciation. The City has complied with
this requirement as shown below (in thousands) :
Gross revenues $ 12,467 '
Operating expenses, excluding $ 10,766 '
interest and depreciation
Net revenues $ 1,701
Debt service $ 30 '
Debt service coverage 56.7 '
See independent auditor' s report -52- '
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
' 13. PROPRIETARY FUND IONG_TERM IMP (CONTINUED):
tb. San Joaquin Reservoir Note Payable:
In 1979 the City and several other local cities and water districts
purchased the San Joaquin Reservoir. The City is paying a portion (13.56%)
of the debt service for the 1961 construction of the reservoir plus
operating and improvement costs. In the event of default, the expenses
' and/or debt service payments shall be reallocated among the remaining non-
defaulting owners in proportion to the percentage interest owned as though
the party in default did not exist. The City has recorded its portion of
' the reservoir as a fixed asset in the Water Fund.
The future required payments on the note are as follows (in thousands) :
' Year
Ending Required
June 30, Payment
' 1990 $ 60
1991 61
1992 55
' $ 176
less amount representing
' interest (10)
Principal Outstanding $ 166
at June 30, 1989
c. Meadowlark Golf Course Note Payable:
In October, 1974 the City financed the purchase of Meadowlark Golf Course
' through a long-term 7% note totalling $2,272,000 (Sales price of $3,200,000
less downpayment of $928,000. The note payable is collateralized by future
revenues and does not represent a general obligation of the City. The City
has leased the golf course to an outside party for a minimum amount of
' $150,000 annually through 2002 plus a percentage of income based upon gross
revenues. From 2003 until 2008 the mininm payment will be $200,000 plus a
percentage of income based upon gross revenues. In 2009 the payment will
' be $115,703.
1
See independent auditor' s report -53-
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
(continued)
.TUNE 30, 1969 '
13. PROPRIETARY FUND 1K*rr-TEW4 DEBT (OONTINUED)
c. Meadowlark Golf Course Note Payable: '
As part of the City's 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 future required payments on the note are as follows (in thousands) : '
Year '
Ending Required
June 30, Payment
1990 $ 150 ,
1991 150
1992 150
1993 150 '
1994 150
1995 and after 2,565
'less amount 3,315
representing interest (1,615) '
Principal Outstanding $ 1,700
at June 30, 1989
d. Emerald Cove Housing Certificates of Participation:
On June 1, 1984, the Redevelopment Agency sold certificates of '
P� g cY
participation to finance the construction of a senior citizens apartment
complex. The certificates bear interest at 9.5516 per annum, which is '
payable semi-annually. The entire principal is due on June 1, 1994 A
discount of $126,500 is being amortized to maturity. Below is a schedule
of debt service requirements to maturity (expressed in thousands) : '
See independent auditor' s report -54- '
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989
' 13. OwrmuIA .
PFDPRi F[A�ID I�7Cy-TERM DID ( )
1
d. Emerald Cove Housing Certificates of Participation:
Year
' Ending
June 30, Principal Interest Total
t 1990 $ 0 $ 437 $ 437
1991 0 437 437
1992 0 437 437
1993 0 437 437
' 1994 4,600 400 5,000
Totals $4,6006$ ,748
e. Note Payable- County of Orange:
' In July, 1987 the City received Fire Commmications Equipment valued at
$409,140 under an agreement with the County of Orange whereby the City will
t repay the County for the equipment. The equipment and note are recorded in
the Equipment Replacement Fund, an internal service fund. Interest rates
on the note vary between 5.4% and 6.5%. Debt service requirements are as
' follows (in thousands) :
Year
Ending Required
June 30, Payment
1990 $ 98
' 1991 98
1992 97
1993 and after 97
' $390
less amount representing
interest (54)
' Principal Outstanding $336
at June 30, 1989
1
See independent auditor' s report -55-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
,TUNE 30, 1989 '
13. PiiOPRTEI'ARY FMID IiWG-TER4 DEBT (OONTIlWED) : '
f. Compensated Absences: ,
There is no fixed repayment schedule to repay the compensated absences for '
proprietary fund types of $128,075 at June 30, 1989.
g. Advances From Other Funds: '
There is no fixed repayment schedule to repay the amounts advanced from '
other funds of $943,081 at June 30, 1989.
h. Claims Payable '
There is no repayment schedule for claims payable of $7,422,000 as of June '
30, 1989 (see note 10) .
i. Public Financing Authority Certificates of Participation: '
In March, 1989, the Public Financing Authority issued $5,510,000 of '
certificates of participation to finance the purchase of capital equipment.
The amount is recorded as a liability of the Equipment Replacement fund.
Interest on the certificates ranges from 6.75% to 6.95%. Interest is '
payable semiannually on February 1st and August 1st with principal maturing
annually on February 1st. A discount of $68,875 is being amortized to
maturity. Debt service requirements to maturity are as follows: '
See independent auditor' s report -56-
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
JONE 30, 1989
13. 04X41IEMY FUND ID1CrTERM DEBT (OONTINUM:
' i. Public Financing Authority Certificates of Participation:
Year
Ending
' June 30, Principal Interest Total
1990 $ 0 $ 346 $ 346
' 1991 0 376 376
1992 960 376 1,336
1993 1,025 313 1,338
1994 1,100 243 1,343
' 1995 1,170 168 1,338
1996 1,255 87 1,342
' Total J5,510 1$ ,909 7$ ,419
' 14. RES'011R HILL ASSESSMENT DONDS:
' In January, 1989, the City issued $1,653,905 of special assessment bonds to
finance certain public improvements. Proceeds from the issue which are to
be used for improvements have been accounted for in a capital project fund,
' and have been designated as "contribution from property owners". The bonds
are only to be repaid by property taxes levied in the assessment district.
The City has no liability on the bonds if revenues are insufficient to fund
' the required debt service. Accordingly, these bonds have been excluded
from the General Long-Term Debt Account Group.
Principal matures annually on September 2nd, with interest payable
' semiannually on March 2nd and September 2nd. Interest rates on the bonds
range between 6.5% and 8.1% Debt service requirements to maturity are as
follows (in thousands) :
' See independent auditor' s report -57-
1
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued) '
JONE 30, 1989
14. RESERVOIR HILL ASSESSMI24T DOWS (OOTPINUED): '
Year 1
Ending
June 30, Principal Interest Total
1990 $ 0 $ 146 $ 146 '
1991 4 133 137
1992 40 129 169 '
1993 45 125 170
1994 50 122 172
1995 50 118 168 '
1996 55 114 169
1997 60 110 170
1998 65 105 170
1999 70 100 170 '
2000-2010 1,215 610 1,825
Total 1$ ,654 IL,812 3$ ,466 '
15. CnANG S IN E-91M ASSETS: '
Below is a schedule of the changes in general fixed assets for the year (in '
thousands) :
Balance Balance '
July 1, 1988 Additions Dispositions June 30, 1989
Land $ 38,784 $ 3,714 $ 0 $42,498
Buildings 25,158 0 (511) 24,647 ,
Other 1,733 0 0 1,733
Construction in
Process 0 564 0 564 ,
Total 6$ 5,675 $ 4,278 ($ 511) 69$ ,442
t
See independent auditor' s report -58-
tCITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' .TUNE 30, 1989
' 15. CHANGES IN FIXED ASSETS (00NTIINUED):
Below is a schedule of changes in proprietary fund fixed assets for the
year (in thousands) :
' Enterprise Funds:
' Balance Balance
July 1, 1988 Additions Dispositions June 30, 1989
Land $ 4,731 $ 0 $ 0 $ 4,731
Buildings 5,334 0 0 5,334
Machinery and
Equipment 49,134 458 (28) 49,564
Total Cost $59,199 $ 458 $ (28) 59,629
Less accumulated
depreciation (21,270) (22,975)
' Net Book Value, 3$ 7,929 $ 36,654
Enterprise Funds
Internal Service Fluids
' Balance Balance
July 1, 1988 Additions Dispositions June 30, 1989
' Machinery and $21,267 11580 ($ 505) $ 22,342
Equipnent
Less accumulated
tdepreciation (10,128) (11,440)
Net Book Value, 1$ 1,139 10,902
' Internal Service
Funds
See independent auditor' s report -59-
CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS '
(continued)
JUNE 30, 1989 '
16. RESERVES AND DESIGN?ITIONS OF FUND DQUITY: t
Under the provisions of GASB Code Sections 1800.121-123, the City has set '
up reserves and designations of fund equity. Reserves indicate amounts
which cannot be appropriated in future periods or which are legally set
aside for a specific future use. Designations represent amounts that the '
City has made tentative plans to use in a future period. The City's
reserves and designations are described below (in thousands) :
Special Debt Capital
General Revenue Service Projects
Fund Funds Funds Fluids Total '
RESERVES
Encumbrances $2,086 $2,706 $ - $ - $ 4,792
Long-term '
receivables 13,241 1,922 21,340 9,100 45,603
Reimbursement - 423 - - 423 '
agreements
Capital 11,453 - - 25,087 36,540 ,
projects
Debt service - = 12,806 - 12,806 '
Land held for 19,549 19,549
resale
Inventory 263 - - - 263
TOTAL RESERVES 27,043 5,051 34,146 53,736 119,476 '
DESIGNATIONS
Subsequent
year's 486 3,550 - - 4,036 ,
expenditures
TOTAL RESERVES 2$ 7,529 8$ ,601 3$ 4,146 $53,736 $124,012 '
AND DESIGNATION—
'
See independent auditor' s report -60- t
P p
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
' 16. REmms AND DEsiGNAnow OF FUND EQUITY:
' a. Reserves for encumbrances represent amounts committed for unperformed
services or for undelivered goods where a commitment to purchase has been
made.
' b. Reserves for long-term receivables represent amounts included in
advances to other funds and other receivables which are not scheduled to be
repaid until future years, and for which there is no offsetting deferred
' revenue.
c. Reserves for reimbursement agreements represent expected future
' reimbursements to developers for sewer and drainage construction.
d. Reserves for continuing projects represent amounts committed for long-
term projects not yet completed.
e. Reserves for debt service represent amounts accumulated in debt service
funds or set aside in another fund in accordance with a bond indenture or
' similar covenant.
f. Reserves for land held for resale represent land held by the Agency that
' is legally committed for resale.
g. Reserves for inventory represent amounts for general supplies inventory.
' h. Designations for subsequent years' expenditures -are made to provide for
deficits budgeted in subsequent years.
t i. Designations for other fund deficits represent amounts to cover fund
deficits in the Self-Insurance Fund.
' 17. CummiTmE T s AND .
' a. Legal Actions:
' There are certain legal actions pending against the City that have arisen
in the course of normal operations. In the opinion of management and the
City Attorney, the ultimate resolution of these actions is not expected to
' have a significant impact on these financial statements.
See independent auditor' s report -61-
CITY OF nUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 '
17. COMMITMENTS AMID CONTIN GENCIES (OONTINUED): ,
b. Mortgage Revenue Bonds: '
The City established a program in February, 1983 to provide funds for the '
purchase of home mortgages within the City. Under this program, a total of
$40,000,000 of mortgage revenue bonds has been issued, $20,000,000 in
March, 1983 and an additional $20,000,000 in July, 1984. '
In 1983 the City also issued $16,000,000 of Loans to Lender Revenue Bonds
to construct an apartment complex for low and moderate income housing. In
1985 the City also issued $25,000,000 of Multi-Family Housing Revenue Bonds '
for construction of various apartment complexes.
The bonds are payable from, and are secured by, a pledge of payments made '
on the home mortgages and all funds held by the trustee under the indenture
agreements. The bonds are not an indebtedness of the City and there exists
no legal obligation on the part; of the City to make payments on the bonds ,
from any source other than the revenue and assets that were pledged.
Accordingly, these programs have been excluded from the accompanying
combined financial statements.
1
c. Land Purchases- A.C. Marion:
The Cityhas entered into an agreement to purchase a parcel of land from a t
g Pu
private party for $3,190,000. The agreement required the City to pay
$1,000,000 for the purchase of phase I of the parcel and pay $500,000 for '
phase II of the parcel. For the next three years the City may purchase one
of the remaining phases each year. For the use of the remaining parcels
the City pays a rental/option fee which is paid quarterly on February 28th, '
May 31st, August 31st and November 30th. The City may cancel the agreement
at any time in which case the obligation to pay the remaining rental/option
fees or to purchase any remaining phases ceases. Listed below is the '
schedule of payments and rental/option fees for the life of the contract
(in thousands) :
1
1
See independent auditor' s report -62-
1
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
' 17. COMMTTMENTS AND OONTINGENCIES (OONrINUED):
' c. Land Purchases- A.C. Marion:
' Fiscal
Year
Ending Purchase Quarterly
June 30, Price Phase Rents
1 1990 $500 4 $ 71
1991 690 5 26
' Total 1$ ,190 � g7
' d. 1988 Owner Participation Agreement-Mola Develognent Corporation:
1 In July, 1988, the Redevelopment Agency, the City and Nola Development
Corporation (Nola) entered into an owner participation agreement for the
' Townsquare project (a residential and commercial development in the
Main/Pier project area of the Redevelopment Agency) . Certain property
which was owned by third parties was acquired by both the Agency and Nola.
This property was combined with adjacent property owned by Mola, property
' owned by the Agency and property sold to the Agency by the City for
$1,956,000 (see note 17) . The resultant configuration was used for the
development.
During the year, Mola obtained a land draw to construct the project. The
Agency received $1,250,094 of this land draw representing its share of the
' total proceeds which was computed based upon the relative value of the
Redevelopment Agency's land to the total land value in the project. This
amount is recorded as an "other financing source" in the Redevelopment
' Agency's Capital Projects Fund. The total value of Redevelopment Agency
owned land in the project is $1,956,000 which is recorded as "Land Held for
Resale" on the balance sheet of the Agency's Capital Projects Fund.
' When the individual residential units are completed and sold, proceeds will
be distributed which will reimburse the Redevelopment Agency for the
remaining value of its land which was not reimbursed by the land draw
' ($1,250,000) and pay a 9% developers fee to Mola. The remaining proceeds
will be divided between the Agency and Mola based on the value of the
respective land contributed by each party.
1
See independent auditor' s report -63-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 '
17. OC W rff4E fl'S AND OONTINGENCIES (OONrINUED): I
d. 1988 Owner Participation Agreement-Mola Development Corporation: '
one year after the commercial units are conpleted, Mola will be obligated '
to pay to the Agency 50% of the net operating income of the commmercial
units for the proceeding year and on a monthly basis thereafter.
e. 1983 Owner Participation Agreement Mola Development Corporation:
In 1983, the City, the Redevelopment Agency and Mola Development t
Corporation (Mola) entered into an owner participation agreement relating
to certain improvements in the Oakview project area of the Redevelopment ,
Agency. The Agency agreed to purchase certain public inprovements from
Mola for $1,408,047 plus interest at 11% per annum. The purchase price was
to be paid by a pledge of certain tax increment revenues in the project
area. The Agency agreed to advance to the City $211,394 plus interest at '
11% per annum of building fees normally due at the time of occupation.
In July, 1988, the Agency and Mola agreed that the Agency would pay Mola '
$1,200,000 to settle the liability for the public improvements. It was
also agreed that the amount of deferred development fees plus interest was
$300,000. Mola paid $100,000 in July, 1988 and agreed to pay $81,843 '
annually on June 30th 1989, 1990 and 1991 to settle the deferred
development fees.
f. Owner Participation Agreement-N/R Huntington Partners: 1
In October, 1987, the City, the Redevelopment Agency and N/R entered into '
an owner participation agreement which will provide for a residential
development in the Main/Pier project area of the Redevelopment Agency. N/R ,
Hunting Lon Partners loaned the City $300,000 for certain parcel
acquisitions. The amount will be repaid by a pledge of a portion of tax
increment revenues generated by the improvements.
1
1
See independent auditor' s report -64-
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' .TONE 30, 1989
' 17. 001MMYTMENTS AND CONTINGENCIES (COIN INUED):
' g. Owner Participation Agreement-Koury:
In November, 1988, the City, the Redevelopment Agency and Robert Koury, an
individual entered into an owner participation agreement which will provide
for the development of a parking structure and related commercial and
retail space in the Main/Pier project area of the Redevelopment Agency.
' The Redevelopment Agency purchased land from the City valued at $3,133,500.
This sales price will be paid to the City by future tax increment revenues
' of the Main/Pier project area (see note 12) . This land was combined with
other Redevelopment Agency owned land and land owned by Koury to provide
the space for the development. The Agency purchased the land held by Koury
' for $1,235,000 and secured the performance of the agreement by issuing
Koury a deed of trust. The Agency agreed to construct a parking garage and
32,000 square feet of retail/commercial space. When the construction is
completed the Agency will sell interest in the retail/commercial space for
' $1,235,000. The Agency will retain title to the parking structure.
' h. Disposition and Development Agreement-Robert L. Mayer Corporation:
' In August, 1988, the Redevelopment Agency, the City and Robert L. Mayer
Corporation (Mayer) entered into a disposition and development agreement
for the development of hotels, residential and commercial parcels in the
Main/Pier project area. The development will take place in three different
' residential and six different commercial phases.
Mayer agreed to loan to the Agency $4,800,000 to relocate residents of a
' mobilehome park in the area. As of June 30, 1989, $2,730,332 of the costs
have been incurred and $461,535 cash has been received from Mayer. Mayer
will be repaid by the Agency pledging a portion of the tax increment and
' transient occupancy tax revenues that the improvements generate. After the
indebtedness is repaid, the Agency will also be liable to rebate to Mayer
additional tax increment and transient occupancy tax revenue generated by
the project when the project is completed.
1
The Agency purchased land from the City for $22,400,000. This sales price
' will be repaid to the City by future tax increment revenues of the
Main/Pier project area. The land purchased from the City which will be
See independent auditor' s report -65-
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 '
17. 00MKIT14MM AND CONTINGENCIES (OONTINUED): '
h. Disposition and Development Agreement-Robert L. Mayer Corporation: '
used for the commercial portion of the development will be leased by the '
Agency to Mayer for 99 years. The remaining land will be used for the
residential development. When the residential units are sold, the Agency
will receive revenue based on a specific schedule in the agreement. '
At June 30, 1989, $8,377,000 of the land representing the residential
portion is recorded as "Land Held for Resale" on the balance sheet of the
Redevelopment Agency's Capital Projects Fund. '
i. Disposition and Development Agreement-California Resorts: '
In August, 1988, the Redevelopment Agency, the City and California Resorts
entered into a disposition and development agreement. The City sold the ,
Redevelopment Agency certain land for $1,512,500. This will be repaid from
future tax increment revenues. This land was combined with land owned by
California Resorts and other third parties to construct a hotel. '
18. JOINT VENTURES: '
In October, 1988, the City and the cities of Pomona, San Bernardino, Santa
Ana and Oxnard formed the Big Independent Cities Excess Pool Joint Powers '
Authority, (BICEP) to finance a claims payment pool for certain liability
claims in excess of $1,000,000 per claim. .
BICEP is governed by a Board of Directors which is cor -,osed of one director '
representing each City, appointed by each City's City Council. A director
must be a member of the City Council or an official or staff person of the '
City which he or she represents. Any changes to the board must be approved
by the current board members. Each participating City pays an insurance
premium to BICEP which is used to fund the operating and debt service
expenditures of BICEP. The participants' shares of the assets, liabilities '
and fund equity are as follows:
See independent auditor' s report -66-
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
' 18. JOINT VE[ TMW ( ONTINUED):
Huntington Beach 21.43%
' Oxnard 15.62%
San Bernardino 19.09%
Santa Ana 30.27%
Pomona 13.59%
' In December, 1988, BICEP issued $15,055,000 of Insurance Program Revenue
Bonds, 1988A which was used to initiate the insurance pool. The interest
rates on these bonds varies between 6.5% and 8.25% and are payable from
' premium payments from the participating cities. The premiums paid from the
participants represents the security for the debt Debt service
requirements to maturity are as follows (in thousands) :
' Year
Ending
June 30, Principal Interest Total
' 1990 $ 90 $1,208 $1,298
1991 360 1,203 1,563
1992 390 1,178 1,568
' 1993 425 1,151 1,576
1994 450 1,120 1,570
1995 485 1,087 1,572
' 1996 520 11050 1,570
1997 560 11010 1,570
1998 620 967 1,587
1999 670 918 1,588
' 2000-2009 10,485 8,639 19,124
Total 1$ 5,055 1$ 9,531 3$ 4,586
1
The City's share of the liability is $3,226,287.
' The June 30, 1989 financial information for BICEP is as follows (expressed
in thousands) :
See independent auditor' s report -67-
1
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JONE 30, 1989 '
18. JOINT VENTURES (OONTINQED): '
BICEP City '
Balance Sheet Total Share
Assets $16,711 $3,581
Liabilities 15,850 3,397 '
Equity 861 184
1
Revenue and Expense
Revenues 1,824 391 '
Expenses 1,268 272
Non-Operating Revenue 305 65 '
Expense
Excess of Revenue over 861 184 '
Expense
19. TAX AND REVENUE ANTICIPATION NOTES: '
On November 21, 1988 the City issued $5,000,000 of tax and revenue '
anticipation notes which bear interest at 4.50. The entire principal and
interest is due on November 20, 1989. At year-end the City had accrued
$200,000 of interest on these notes. '
20. OTHER REQUIRED DISCU IRES: '
a. Budgetary Information: '
Expenditures exceeded appropriations at the departmental level in the funds
shown as follows (expressed in thousands) : '
See independent auditor' s report -68-
CITY OF HUNTINGTON BEACH
' NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
' 20. OTHER REQUIRED DISC[DSURLS:
' a. Budgetary Information:
General Eland
City Council $ 15
City Administrator 10
City Treasurer 1
' City Attorney 17
Fire 21
Police 183
' Community Services 86
Operating Transfer Out 126
Public Communications
' City Administrator 9
Grants
tEconomic Development 311
Parking Authority
' Operating Transfer Out 3
' b. Other Financing Sources (Other) :
Other financing sources (other) totalled $7,441,097 which included the
' following:
.$1,250,094 of proceeds from the sale of City owned property (see note 17)
' in the Main/Pier project area of the Redevelopment Agency which is. recorded
in the Capital Projects Eland of the Redevelopment Agency.
.$6,191,003 of proceeds were recorded in the General Eland from the sale of
' the City's right to own its cable television franchise.
c. Deficit Retained Earnings:
1
The Emerald Cove Housing Fund (an enterprise fund) had a deficit retained
' earnings of $4,601 at year-end. This deficit will be funded in future
years through increased rents.
See independent auditor' s report -69-
1
CITY OF HUNTINGTON BEACH '
NOTES TO FINANCIAL STATEMENTS
(continued)
JUNE 30, 1989 ,
20. OTHER REQUIRED DISCGDSUEM: '
d. Other Assets: '
Other assets include the following (in thousands) : ,
Prepaid Expenses, General Fund $ 13
Investment in Joint Venture, Self-Insurance Fund 184
an Internal Service Fund '
House owned by Deferred Compensation Fund, 29
an Agency Fund
Total $226 ,
21. SUBSEQUENT EVENTS. '
In August, 1989 the Civic Improvement Corporation issued $15,025,000 of
additional certificates of participation to provide further funds for ,
parking structure and other public improvements in the Main/Pier
redevelopnent project area. As described in note 2, the Civic Improvement
owns the Civic Center complex which represents the security for the '
certificates. The City will annually transfer sufficient monies to fund
the debt service requirements on the certificates. The interest rates on
the certificates vary between 5.9% and 7.0% with interest payable semi- '
annually on February 1st and August 1st with principal maturing annually on
August 1st. Debt service requirements to maturity are as follows:
See independent auditor' s report -70-
' CITY OF HUNTINGTON BEACH
NOTES TO FINANCIAL STATEMENTS
(continued)
' JUNE 30, 1989
' 21. SUBSEQUENT EVENTS (00NTINUED):
' Year
Ending
June 30, Principal Interest Total
' 1990 $ 0 $ 517 $ 517
1991 135 1,031 1,166
' 1992 180 1,021 1,201
1993 190 11010 1,200
1994 205 998 1,203
1995 215 985 1,200
' 1996 230 971 1,201
1997 245 955 1,200
1998 260 939 11199
1999 275 921 1,196
2000 295 902 1,197
2001 315 882 1,197
2002 335 860 1,195
' 2003 360 837 1,197
2004 385 811 1,196
2005-2020 11,400 12,369 23,769
Total 115,025 2$ 6,009 41$ ,034
1
See independent auditor' s report -71-
1
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FINANCIAL STATEMENTS OF
' INDIVIDUAL FUNDS
rAND ACCOUNT GROUPS
r
r
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1
1
1
' GENERAL FUND
' The General Fund is used to account for all financial activity that is not required to
be accounted for in another fund.
t
1
' SCHEDUIE B-1
CITY OF HUNTINGTON BEACH
' GENERAL FUND
' OOIKPARATIVE BALANCE SHEET
June 30, 1989 and 1988
(expressed in thousands)
1
ASSETS
t1989 1988
' Cash and investments $ 21,279 $ 11,950
Cash with fiscal agent 224 191
Taxes receivable 2,164 1,958
Accounts receivable 591 867
' Interest receivable 106 89
Inventory 263 208
Advances to other funds 48,402 16,710
' Deposits and other assets 13 28
Due frcen other agencies 442
Due from other funds 505 -
' TOTAL ASSETS $ 73,547 $ 32,443
' LIABILITIES AND FUND BALANCE
I3ABILITIES:
Accounts payable $ 1,528 $ 1,241
' Accrued liabilities 1,614 3,527
Deposits 701 1,200
Tax and revenue anticipation note payable 5,000 -
' Deferred revenue 35,161 4,126
TOTAL LIABILITIES 44,004 10,094
' FUND BALANCE:
Reserved for inventory 263 208
Reserved for enambrances 2,086 1,842
' Reserved for long-term receivables 13,241 12,584
Reserved for capital projects 11,453 1,350
Designated for other fund deficits - 873
' Designated for future year's expenditures 486 4,046
Unreserved:
Undesignated 2,014 1,446
' TOTAL FUND BALANCE 29,543 22,349
TOTAL LIABILITIES AND FUND BALANCE $ 73,547 $ 32,443
1
1
-72-
CITY OF HUNTINGTON BEACH SCHEME E B-2 '
GENERAL FUND
STATFIEIT OF REVENUES, EXPENDITURES AND CHANGES IN '
FUND BALANCE - BUDGE ' AND ACTUAL
For the year ended June 30, 1989 '
With ccaparative totals for the year ended June 30, 1988
(expressed in thousands)
1989 '
Variance -
Favorable 1988
Budget Actual (Unfavorable) Actual '
REVENUES:
Property taxes $ 22,440 $ 23,072 $ 632 $ 21,827
Other taxes 31,978 30,519 (1,459) 30,021 '
Licenses and permits 3,366 3,650 284 3,276
Fines, forfeitures, and penalties 2,570 2,458 (112) 2,335
From use of Haney and property 6,875 6,530 (345) 4,346
Fran other agencies 8,894 8,542 (352) 7,920 '
Charges for current services 5,197 5,886 689 3,208
Other 596 1,077 481 1,410
TOTAL REVENUES 81,916 81,734 (182) 74,343 '
Current
City council 98 113 (15) 78
City Administrator 772 782 (10) 633 '
City Treasurer 319 320 (1) 288
City Attorney 398 415 (17) 376
City Clerk 199 170 29 128 '
Administrative Services 3,215 2,956 259 2,856
Cmmunity Development 2,219 2,110 109 2,015
Fire 12,701 12,722 (21) 11,840 '
Police 23,373 23,556 (183) 22,357
Camunity Services 7,386 7,472 (86) 6,809
Public Works 18,558 16,505 2,053 15,835
Non-departmental 7,086 7,012 74 7,040 '
Capital outlay 1,915 1,026 889 977
Debt Service:
Interest 228 288
'DOTAL EXPENDITURES 78,467 75,387 3,080 71,232
EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 3,449 6,347 2,898. 3,111 '
OTHER FINANCING SOURCES (USES) :
Operating transfers in 1,300 1,291 (9) 1,280
Operating transfers out (2,044) (2,170) (126) (2,137)
Sale of Public Cable Television rights 6,191 6,191 - - '
TOTAL OTHER FINANCING
SOURCES (USES) 5,447 5,312 (135) 857)
EXCESS OF REVENUES AND '
OTHER SOURCES OVER
(UNDER) EXPENDITURES
AND OTHER USES 8,896 11,659 2,263 2,254 '
FUND BALANCE - BEGINNING OF YEAR 22,349 22,349 - 18,745
Residual equity transfers in 346 346 - 1,350
Residual equity transfers out (4,811) (4,811) - -
FUND BALANCE - END OF YEAR 26 780 29 543 1 763 22,349 '
-73- '
1
1
1
1
' SPECIAL PXVMM FUNDS
' Special revenue funds are used to account for specific revenues that are legally
restricted to expenditure for particular purposes.
Gas Tax- This fund accounts for financial activity apportioned under the Street and
Highway Code of California. Expenditures may be made for any street-related purpose
allowable under the code.
' Sewer- This fund is used to account for fees received from developers to construct new
sewer facilities.
, Planned Local Drainage- This fund is used to account for fees received from developers
to improve and upgrade the City's drainage system.
' Public Corcrunications- This fund accounts for revenue received from cable television
rights granted within the City limits. These monies must be spent on community-
oriented television. '
t Grants- This fund accounts for grant monies received from federal, state and county
agencies not accounted for in other funds. Expenditures for these funds are restricted
to the granting agencies requirements.
' Park Acquisition and Development- This fund is used for fees received form developers
to develop the City's park system.
' Narcotics Forfeiture- This fund accounts is used to account for monies received from
the State of California that are used for special law-enforcement purchases.
1
1
1
CITY OF HUNTINGTON BEACH '
SPECIAL REVENUE FUNDS ,
COMBINING BALANCE SHEET
June 30, 1989 '
With ccparative totals for June 30, 1988
(expressed in thousands)
Planned '
Local
ASSETS Gas Tax Sewer Drainage '
Cash and investments $ 4,474 $ 5,070 $ 3,833
Interest receivable 20 23 18
Advances to other funds 550 62 406 '
Due fran other agencies 287 - 68
TOTAL ASSETS $ 5,331 $ 5,155 $ 4,325 '
LIABILITIES AND FUND BALANCE'S
LIABILITIES:
Accounts payable $ 217 $ - $ -
Accrued liabilities - - -
Deposits 14 '
Deferred revenue 50 62 156
Due fran other funds - - -
Advances fran other funds - - - '
TOTAL LIABILITIES 281 62 156
FUND BALANCES: '
Reserved for encumbrances 1,536 243 252
Reserved for long-term receivables 500 - 250
Reserved for reimbursement '
agreements - 26 397
Unreserved:
Designated for future '
years expenditures 216 1,047 864
Undesignated 2,798 3,777 2,406
TOTAL FUND BALANCE'S 5,050 51093 4,169 '
TONAL LIABILITIES AND
FUND BALANCE'S $ 5,331 $ 5,115 $ 4,325 '
1
-74-
CITY OF HUNTINGTON BEACH
ASSESSED AND ACTUAL VALUE OF ALL TAXABLE PROPERTY '
Last Ten Fiscal Years '
(expressed in thousands )
Fiscal Common Public Total '
Year Property Utilities Secured
1979-80 $872 , 397 $60 , 454 $932 , 851 '
1980-81 932 , 146 79 , 647 101 , 793 '
1981-82 4 , 608 , 703 322 , 527 4 , 931 , 230
1982-83 5 , 171 , 182 330 , 030 5 , 501 , 212 '
1983-84 5 , 559 , 792 362 , 186 5 , 921 , 977 '
1984-85 5 , 940 , 642 426 , 593 6 , 367 , 235
1985-86 6 , 519, 923 450 , 742 6 , 970 , 665 '
1986-87 7 , 019 , 854 475 , 467 7 , 495 , 321
1987-88 7 , 457 , 614 487 , 793 7 , 945 , 407 '
1988-89 8 , 116 , 790 3 , 317 8 , 120 , 107 '
Source: Orange County Auditor-Controller
Note : Assessed value approximates market value for
years beginning in 1981-82 . Prior to this
Assessed value was approximately 25% of '
market value. Assessed valuation follows the
guidelines of article 13-A of the California
Constitution. Public Utility assessed '
valuations were adjusted to conform
to Assembly Bill 454 .
-117- '
' EXHIBIT D
1
Total Estimated Full
' Assessed Market Percent
Unsecured Valuation Valuation Increase
' 6 7$ 1 , 54 $994 , 398 $3 , 977 , 592 19 .55
62 , 512 1 , 074, 305 41297 , 220 8 .04
288 , 453 5 , 219, 683 5 , 219, 683 21 .47
' 374 , 692 5 , 875 , 904 5 , 875 , 904 12 . 57
370 , 949 6 , 292 , 926 6 , 292 , 926 7 .10
466 , 571 6 , 833 , 806 6 , 833 , 806 8 .60
' 441 , 125 7 , 411 ,790 7 , 411 , 790 8 . 46
504 , 940 8 , 000', 261 8 , 000, 261 7 . 94
' 436 , 502 8 , 381 , 909 8 , 381 , 909 4 .77
460 , 095 8 , 580 , 202 8 , 580 , 202 2 . 36
1
-118-
EXHIBIT E
CITY OF HUNTINGTON BEACH
PROPERTY TAX RATES - ALL OVERLAPPING GOVERNMENTS
LARGEST TAX RATE AREA IN CITY
Last Ten Fiscal Years
Metro.
Basic Orange School Water
Year Levy City County Districts Dist. Others Total
1979-80 1 . 00000 0 . 04930 0. 00070 0 .12572 0. 02560 0 . 00393 1 .20525
1980-81 1 . 00000 0 . 04635 0 . 00057 0 .12430 0.02225 0 .00325 1 . 19672
1981-82 1 .00000 0 . 04635 0 .00080 0 .12810 0 . 01980 0 .00270 1 . 19775
1982-83 1 .00000 0 . 05756 0 . 00043 0 . 11656 0 . 01660 0 .00237 1 .19352
1983-84 1 . 00000 0 . 05682 0 .00039 0 .12096 0 .02370 0 .00210 1 .20397
' 1984-85 1 . 00000 0 . 05630 0 . 00032 0 . 09962 0. 01560 0 .00177 1 . 17361
' 1985"86 1 . 00000 0. 05565 0 . 00030 0 . 09329 0 . 01640 0 .00161 1 . 167.25
1986-87 1 . 00000 0.05529 0 . 00027 0 .10677 0 . 01480 0 .00142 1 .17855
1987-88 1 . 00000 0 . 05490 0 . 00022 0 .09514 0 .01120 0 . 00638 1 .16784
1988-89 1 .00000 0 . 05470 0 .00022 0 .09470 0 . 01100 0 . 00321 1 . 16383
Source- County of Orange
tNote- Rates are per $100 of Assessed Valuation
1
' -119-
CITY OF HUNTINGTON BEACH
GENERAL OBLIGATION BONDED DEBT RATIOS
Last Ten Fiscal Years
General Assessed Percent of Bonded
Bonded Market Debt to Debt
Fiscal Debt Valuation Assessed Per
Year (thousands ( in 1 , 000s) Valuation Population Capita
1979-80 $4 , 590 $3 , 977 , 592 0 . 12 172 , 200 $26 .66 '
1980-81 4 , 360 4 , 297 , 220 0 . 10 173, 393 25 .15
1981-82 4 , 150 5 , 219 ,683 0 . 08 175 , 714 23 .62
1982-83 3 , 930 5 , 875 , 904 0 . 07 178 , 706 21 .99
1983-84 3, 695 6 , 292 , 926 0 . 06 179 , 990 20 . 53
1984-85 3 , 425 6 , 833 , 806 0 . 05 181 , 000 18 . 92 '
1985-86 3 , 165 7 , 411 , 790 0 . 04 184, 838 17 . 12
1986-87 2 , 885 8 , 000 , 261 0 . 04 186, 757 15 .45
1987-88 2 , 590 8 , 381 , 909 0 .03 187 , 740 13 .80 '
1988-89 2 , 280 8 , 580 , 202 0 . 03 188 , 701 12 . 08
1
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-120- '
' EXHIBIT F
1
Debt Service
Debt Service- General Fund to Total
(thousands) Expenditures General Fund
Principal Interest Total (thousands) Expenditures
' 220 282 502 $36 , 902 1 .4
' 230 273 503 40, 494 1 . 2
210 261 471 44, 094 1 . 1
t220 248 468 48 , 747 1 .0
235 236 471 53 , 177 0.9
.270 222 492 59 ,694 0 .8
260 206 466 64 ,492 0 .7
280 191 471 67 ,126 0 .7
' 295 175 470 71 , 232 0 .7
310 155 465 75 , 593 0 .6
1
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' -121
1
1
EXHIBIT G '
CITY OF HUNTINGTON BEACH 1
COMPUTATION OF LEGAL DEBT MARGIN
June 30, 1989 '
(in thousands)
Assessed Valuation $8,580,202
Debt Limit: 15% of Assessed Value 1,287,030 '
Amount of Debt Applicable '
to Limit (General Obligation 1970 Park Bonds) $2,280
Less Net Assets in Debt
Service Fund (1970 Park Bonds 195 '
Total amount of Debt
Applicable to Limit 2,085
Legal Debt Margin $1,284,945 '
Source: Administrative Services Department, City of Huntington Beach
-122-
EXHIBIT H
' CITY OF HUNTINGTON BEACH
' COMPUTATION OF DIRECT AND OVERLAPPING
BONDED DEBT
' June 30, 1989
' 1968-89 Am�s,E d Valuation: $8,580,201,514 (after dArting $201,634,519 in redevelqment tax allCarticn
iricxgc�t)
' DUT ADD Oi 4PI P'M BCls®EERr Percent Debt at
Pyplicable June 30, 1989
' Orallge 0xvi y 7.611 $133,954
(range oarity Building AAharitaes 7.611 14,918,797
CrargEe 0a ty Flood Oat- dl District 7.613 583,537
Metxnpolitan Water District 1.480 7,605,572
' MXd0ipel Giter District Cf C ra lge Cbulty, 11.411 7,628,254
Water r-r-dities Ctxporaticn
Ora rie- ajz4 Sanitatim Districts #1,2 and 5.110 5,907,160
' 3 Oartificates caf Part:icipatacn
Orange Oarty Sanitation District #3 10.864 7,4%
Cwarrje Cbunty Sanitation District #11 98.4% 160,545
Cast. Ozunanity Cbllecg District htYnrity 29.701 6,127,316
' Lori Alamitos Lhi.fisd Sdml District 1.745 12,390
Rrt ngtm Baad1 Union Hick 9:fiml District 70.7Z 1,230,545
Hantingtcn Rmh 9d=1 District 97.486 1,023 603
' Ocxm Visa Sd-col District (Varicus Ismaes) 98.123 1,226,538
Raritain Valley Sdml District 29.585 1,347,597
City of Rrtingtm Beach 100.000 2,305,000
City of Hantangbm Beach Handing htl nrit i es 100.000 33,640,000
' City of Hartangtcn Beach 1915 Act Binds 100.000 1,653,905
10M GCM DIFECr ADD GMUTPM B2m= (2) $85,512,209
' Less City Cif Hartimitcn Beach de3at mt. iq:aid thraxfi prep zty taxes (35,293,905)
Iess KCX Gamer Facilities Ompauatim (1000-, self-sup3attang) (7,628,254)
' Less Onanrp Qxxtty Sanitation List. #3 (100% self ting) (7,496)
'IUTAL NFL ADD GARL4DmG aN FD EEDr $42,582,554
' (1) Drluies tax and reverue a-itici�ci rates, reverae, mirtgge revaLe and tax allaaticn book and rxxz-
bcrded Vital lease d ligsticns.
' R3ticas to Asti Vabmticn: Stare of Unalh rized and Ureold Bxds:
Direct Debt ($2,305,000) 0.039. M*-ttpolitan der District- $3.922.000
' Total GMES DEbt 0.58% Omm Visa Stdnol District $1,825,088
lbtal Nat Debt 0.5016
' State SJwl Banding Aid RT%able as cf 6/30/89- $29,130,826
Source: Califoamia nrdc Fal statistics, Inc.
' -123-
EXHIBIT I
CITY OF HUNTINGTON BEACH '
WATER REVENUE BOND COVERAGE
Last Ten Fiscal Years 1
(Expressed in thousands) '
Expenses
(Excluding Net Revenue -Debt Service Requirement
Fiscal Total Interest and Available for '
Year Revenues Depreciation) Debt Service Principal Interest Total Coverage
1979-80 $6,083 $3,643 $2,440 $130 $87 $217 11.2
1980-81 5,814 4,780 1,034 130 83 213 4.9 '
1981-82 6,558 5,286 1,272 140 79 219 5.8
1982-83 6,521 6,255 266 150 74 224 1.2 '
1983-84 7,035 6,658 377 150 69 219 1.7 '
1984-85 8,050 7,687 363 160 43 203 1.8
1985-86 8,651 8,760 (109) 58 40 98 N/A '
1986-87 9,162 8,476 686 184 34 218 3.1 '
1987 88 10,714 9,413 1,301 0 30 30 43.4
1988-89 12,467 10,765 1,702 0 30 30 56.7 '
Source, Administrative Services Department, City of '
Iiuntington Beach
Note- The 1963 Water Revenue Bond trust indenture '
requires that the net revenue available for
debt service be at least 1.25 times the
annual debt service requirement. '
1
-124- '
' EXHIBIT J
CITY OF HUNTINGTON BEACH
' DEMOGRAPHIC STATISTICS
City Population
' Percent Square Orange County as a Percent
Year Population Increase Miles Population County Popoulation
1910 815 - 3 .57 34, 436 2 .4
1920 1 , 687 107 . 0 3 . 57 61 , 375 2 .7
1930 3, 690 118 .7 3 .57 61 , 375 3 . 1
' 1940 3 ,738 1 . 3 3 . 57 130, 760 2 . 9
1950 5 , 158 38 .0 4 .72 216 , 224 2 .4
' 1960. 11 , 492 122.8 23 . 47 703, 995 1 .6
1970 116 , 400 912 . 9 26 .73 1 , 420 , 386 8 . 2
1980 172 , 200 47 . 9 27 . 20 1 , 931 , 570 8 . 9
t1981 173 , 393 0 .7 27 .20 1 , 972 , 724 8 .8
1982 175 , 714 1 . 3 27 .20 1 , 993 ,831 8 .8
' 1983 178 ,706 .1 .7 27 . 20 2 , 036 , 390 8 .8
1984 179, 990 0. 7 27 .20 2, 066, 498 8. 7
' 1985 181 , 015 0 .6 27 . 20 2 , 074, 326 8 .7
' 1986 184, 838 2 .1 27 . 20 2 ,180 , 831 8 . 5
1987 186, 757 1 .0 27 .20 2 ,193 , 614 8 .5
' 1988 187 , 740 0 .5 27 . 20 2 , 238 , 721 8 .4
1989 188 , 701 0 . 5 27 . 20 2 , 280 ,405 8 . 3
' Source: Community Development Department, City of
Huntington Beach
' -125-
' EXHIBIT K
' CITY OF HUNTINGTON BEACH
CONSTRUCTION ACTIVITY AND BANK AND SAVINGS AND LOAN DEPOSITS
' Last Ten Fiscal Years
' Estimated Bank
Number Valuation and Savings
Of of New and Loan
' Fiscal Building Percent Construction Percent Deposits Percent
Year Permits Change (000's) Change in (000's) Change
t1978-79 6,187 (10.8) $91,462 (39.1) $856,340 19.9
' 1979-80 4,457 (28.0) 91,289 ( .2) 955,539 11.6
1980-81 4,012 (10.0) 108,794 19.2 1,045,345 9.4
' 1981-82 3,230 (19.5) 58,298 (46.4) 1,134,324 8.5
' 1982-83 2,539 (21.4) 52,458 (10.0) 1,388,634 22.4
1983-84 2,776 930.0% 110,747 111.1 1,801,778 29.8
' 1984-85 3,163 1,390.0% 142,336 28.5 2,033,763 12.9
1985-86 3,173 30.0% 133,579 (6.2) 2,310,482 13.6
' 1986-87 4,098 2,920.0% 92,230 (31.0) 2,300,421 ( .1)
1987-88 4,666 1,390.0% 177,297 92.2 1,746,335 ( .24)
t1988-89 5,039 800.0% 242,013 36.5
Note- Bank and Savings and Loan Deposits for 1988/69
' not available in time for this report.
Source- Community Development Department, City of Huntington Beach
' and The Findley Reports on California Financial Institutions.
' -126-
EXHIBIT L '
CITY OF HUNTINGTON BEACH '
INSURANCE IN FORCE
June 30 , 1989 '
Cal-Surance- Broker '
Watercraft Hull and Liability ,
Watercraft Hull and Liability, Excess
Helicopter and Hangar Liability '
Robert F. Driver- Broker t
Boiler and Machinery
Fidelity Bonds '
Fidelity Bonds
Fire, Ext . Cov. , Flood, Earthquake
Fire, Ext. Cov. , Flood, Earthquake '
Fire, Ext. Cov. , Flood, Earthquake
Fire, Ext. Cov. , Flood, Earthquake
Fire, Ext . Cov. , Flood, Earthquake
Fire, Ext. Cov. , Flood, Earthquake '
Fire, Ext. Cov. , Flood, Earthquake
Fire, Ext. Cov. , Flood, Earthquake
Fire, Ext . Cov. , Flood, Earthquake '
Robert E. French - Broker '
Medical Stop Loss
Employees Travel Accident Policy '
TOTAL
Source: Administrative Services Department City of
Huntington Beach '
1
-127- '
' Annual
Insurance Company Policy# Expires Premium
Albany Insurance Company 8H10601 4/l/90 5,415
St. Paul Insurance Company 388FA6887 4/1/90 7,425
' U.S.A.I.G. 56GW404427 4/1/90 27,863
Kemper Group 3XNO-17455-61 4/1/89 10,350
' Kemper Group BIN104900 9/8/88 1,885
The Hartford Ins. Group PEBBX6441 9/8/88 11001
Commonwealth Ins Co C4M 3323 6/5/90 46,395
' Lloyds Underwriters 1922 6/5/90 46,395
Continental Insurance SFC 2983315 6/5/90 18,518
Houston Casualty Company 9HP 10623 6/5/90 18,903
' Lloyds Underwriters 1923 6/5/90 17,013
United Fire & Casualty UIM 461122 6/5/90 11,110
North American Specialty NA 00127 6/5/90 9,260
Commonwealth Ins CVW-3324 6/5/90 15,465
' Fireman's Fund Insurance XSP 0003973 6/5/90 15,150
1
' American General Insurance 19086 1/1/90 116,000
Provident Life and Accident GTA-1348 7/1/91 5,934
37$ 3,536
' -128-
EXHIBIT M
CITY OF HUNTINGTON BEACH '
MISCELLANEOUS STATISTICS '
June 30, 1989
Year of incorporation 1909
Form of Government Charter City- Council, '
City Ached nistrator
Area 27.2 Square Miles
Population 188,701 '
Miles of Streets 370
Number of Street Lights 14,350
Fire Protection: '
Number of Stations 7
Number of Firefighters 148
Police Protection:
Number of Stations 1
Number of Sworn Police Officers 238 '
Municipal Water Department
Number of Customers 47,986
Average Daily Consumption 35.0 Million Gallons '
Miles of Water Mains 480
Public Works: '
Sanitary Sewers 270 Miles
Storm Sewers 31 Miles
Number of Street Trees 36,000 '
Recreation and Culture
Number of Parks 57
Park Acreage Developed 555 '
Miles of Beach 3.4
Annual Beach Visitors 6,000,000
Number of Libraries 4 '
Library of Volumes 11900,000
Full-Time Employees 1,020 '
Source: Administrative Services Department, City of Huntington
Beach '
-129-