HomeMy WebLinkAboutItem GAGENDA STAFF REPORT,
DATE: January 9, 2017
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Victoria L. Beatley, Director of Finance /City Treasurer
SUBJECT: CITY OF SEAL BEACH ANNUAL REPORTS FOR
FISCAL YEAR ENDED JUNE 30, 2016
SUMMARY OF REQUEST:
That the City Council receive and file the following documents for fiscal year
ending June 30, 2016:
A. Audit Communication Letter
B. Report on Internal Control
C. Comprehensive Annual Financial Report (CAFR)
D. Appropriations Limit Final Report
BACKGROUND AND ANALYSIS:
The audit firm of Lance, Soll & Lunghard LLP, has completed the annual audit of
the City of Seal Beach (City) for the fiscal year ended June 30, 2016. The audit
was conducted in accordance with generally accepted auditing standards and
included examining, on a test basis, evidence supporting the amounts and
disclosures to obtain reasonable assurance that the financial statements are free
of material misstatements.
In the opinion of the auditors, the financial statements fairly present, in all
material respects, the financial position of the City of Seal Beach at June 30,
2016. The 2016 CAFR (Attachment C) is included for your information and use.
The CAFR was submitted to the Government Finance Officers Association to,
once again, be considered for the Certificate of Achievement for Excellence in
Financial Reporting.
The purpose of the Audit Communication Letter (Attachment A) is to provide a
mechanism for communication with the governing body highlighting significant
issues that may arise during the audit process. As indicated, the City's financial
statements were clearly presented.
Agenda Item G
The purpose of the Report on Internal Control (Attachment B) is to help the
auditor in designing audit procedures for the purpose of expressing an opinion on
the financial statements.
The purpose of the Appropriations Limit Final Report (Attachment D) is to attest
that the calculation was performed using the correct methodology and was
correctly calculated based upon the information provided.
The Council Audit Committee reviewed and discussed these items at a meeting
on December 15, 2016.
ENVIRONMENTAL IMPACT:
This action is exempt from the California Environmental Quality Act, because it is
not defined as a "project' under CEQA.
LEGAL ANALYSIS:
The City Attorney has reviewed this staff report and approved it as to form.
FINANCIAL IMPACT:
There is no financial impact in receiving this information.
RECOMMENDATION:
That the City Council receive and file the following for fiscal year ended
June 30, 2016: the Audit Communication Letter, the Report on Internal Control,
and Appropriation Limit Final Report.
SUBMITTED-BY:
Victoria L. Beatley
Director of Finance /City
Attachments:
NOTED AND APPROVED:
JO. Ingram, City M ger
r
A. Audit Communication Letter
B. Report on Internal Controls
C. Comprehensive Annual Financial Report (CAFR)
D. Appropriations Limit Final Report
Page 2
Attachment "A"
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CPAs AND ADVISORS
November 28, 2016
To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
We have audited the financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the City of Sea(Beach (The City) for the year
ended June 30, 2016. Professional standards require that we provide you with information about our
responsibilities under generally accepted auditing standards, Government Auditing Standards and
Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We
have communicated such information in our letter to you dated May 11, 2016. Professional standards also
require that we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in the notes to the financial statements.
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that future events affecting them may differ significantly
from those expected. The most sensitive estimate(s) affecting the City's financial statements was (were):
Management's estimate of its net pension liability is based on actuarial valuation specialist
assumptions. We evaluated the key factors and assumptions used to develop the
proportionate share of the net pension liability in determining that it is reasonable in relation
to the financial statements taken as a whole.
Management's estimate of its Other Post - Employment Benefit Annual Required
Contribution is based on actuarial valuation specialist assumptions. We evaluated the key
factors and assumptions used to develop the Other Post - Employment Benefit Annual
Required Contribution in determining that it is reasonable in relation to the financial
statements taken as a whole.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
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Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management.
Management has corrected all such misstatements. In addition, none of the misstatements detected as a
result of audit procedures and corrected by management were material, either individually or in the
aggregate, to the financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing
matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or
the auditor's report. We are pleased to report that no such disagreements arose during the course of our
audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated November 28, 2016.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion' on certain situations. If a consultation involves application
of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion
that may be expressed on those statements, our professional standards require the consulting accountant
to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were
no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City's auditors. However, these discussions
occurred in the normal course of our professional relationship and our responses were not a condition to
our retention.
Other Matters
We applied certain limited procedures to management discussion and analysis, budgetary comparison
information as listed in the table of contents, the schedule of proportionate share of the net pension liability
and the schedule of plan contributions, which are required supplementary information (RSI) that
supplements the basic financial statements. Our procedures consisted of inquiries of management
regarding the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion
or provide any assurance on the RSI.
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Ce Ae AND A0VISOPS
To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
We were engaged to report on combining and individual nonmajor fund financial statements and schedules,
which accompany the financial statements but are not RSI. With respect to this supplementary information,
we made certain inquiries of management and evaluated the form, content, and methods of preparing the
information to determine that the information complies with accounting principles generally accepted in the
United States of America, the method of preparing it has not changed from the prior period, and the
information is appropriate and complete in relation to our audit of the financial statements. We compared
and reconciled the supplementary information to the underlying accounting, records used to prepare the
financial statements or to the financial statements themselves.
MMAY11154m T[.1FLT.E]T.11111215*09il;
This new auditing standard is effective for financial periods ending on or after December 15, 2016; for most
California municipalities it is effective for the period July 1, 2016 through June 30, 2017 and future periods
thereafter. The standard allows CPA firms to issue an opinion on the financial statements conformity with
generally accepted accounting principles, as well as an opinion on the operating effectiveness of internal
controls over financial reporting through an integrated audit. This standard does not change the objectives
of a financial statement audit, it only enhances the value and scope of a financial statement audit and
increases the level of assurance provided by CPA firms on financial controls. Municipalities should look to
perform an integrated audit for more assurance on the operating effectiveness of internal controls over
financial reporting.
New Accounting Standards
We were not engaged to report on the introductory section and statistical section, which accompany the
financial statements but are not RSI. We did not audit or perform other procedures on this other information
and we do not express an opinion or provide any assurance on it.
The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for
fiscal year 2015 -2016 audit:
GASB Statement No. 72, Fair Value Measurement and Application.
GASB Statement No. 76, The Hierarchy of Generally accepted Accounting Principles for State and
Local Governments.
GASB Statement No. 79, Certain External Investment Pools and Pool Participants.
The following Governmental Accounting Standards Board (GASB) pronouncements are effective in the
following fiscal year audit and should be reviewed for proper implementation by management:
Fiscal year 2016 -2017
GASB Statement No; 73, Accounting and Financial Reporting for Pensions and Related Assets
That Are Not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions
of GASB Statement Nos. 67 and 68.
GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans.
GASB Statement No. 77, Tax Abatement Disclosures.
GASB Statement No. 78, Pensions Provided through Certain Multiple - Employer Defined Benefit
Pension Plans.
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To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
GASB Statement No. 80, Blending Requirements for Certain Component Units -an Amendment of
GASB Statement No. 14.
GASB Statement No. 82, Pension Issues an Amendment of GASB Statements No. 67, No. 68, and
No. 73.
Fiscal year 2017 -2018
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions.
GASB Statement No. 81, Irrevocable Split Interest Agreements.
Restriction on Use
This information is intended solely for the use of City Council or individuals(s) charged with governance and
management of the City and is not intended to be, and should not be, used by anyone other than these
specified parties.
Very truly yours,
Brea, California
Attachment "B"
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CPAs AND ADVISORS
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business -type activities, each major fund, and the aggregate remaining fund information of
the City of Seal Beach, California, (the City) as of and for the year ended June 30, 2016, and the related
notes to the financial statements, which collectively comprise the City's basic financial statements, and
have issued our report thereon dated November 28 2016.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not
express an opinion on the effectiveness of the City's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and
was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were
not identified. However, we identified certain deficiencies in internal control that we consider to be material
weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control such that there is a reasonable possibility that a material misstatement of the entity's
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance. We consider
the following deficiencies to be material weaknesses:
Net Position Restatement
In performing our audit procedures, it was noted that the Public Works Department did not
communicate with the Finance Department on timely basis regarding reimbursement requests
needing to be submitted relating to the grant expenditures. These expenditures were incurred
in the previous fiscal year, which would have subsequently resulted in revenue recognized on
the government -wide statement of activities in the amount of $374,314. This resulted in a current
year restatement of net position in the same amount. We recommend that that the Public Works
Department communicate with the Finance Department on a timelier basis regarding
reimbursable grant expenditures of this type.
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To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
Management's Response:
In the future, the Public Works Department will provide timely updates to the Finance
Department for any and all grant expenditures. In addition, the Public Works Department will
coordinate with the Finance Director to comply with the necessary OCTA reimbursements
requirements for the grant program. Based on the grant requirements, the Director of Finance
will approve the scheduled reimbursements and amounts.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of .noncompliance or other matters that are required to be
reported under Government Auditing Standards.
City's Response to Findings
The City's response to the findings identified in our audit was not subjected to the auditing procedures
applied in the audit of the financial statements and, accordingly, we express no opinion on it.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control
or on compliance. This report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the City's internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
Brea, California
November 28, 2016
Affachment "C"
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aOMPREHENSIVE `NUAL
FINANCIAL REPO .
,F.ORTHE YEAR ENDED JUNE 30, 016'
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City of Seal Beach
Comprehensive Annual Financial Report
For the Year Ended June 30, 2016
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Prepared by the Finance Department
Victoria L. Beatley, CCMT
Director of Finance /City Treasurer
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF SEAL BEACH
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2016
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal .............
Page
Number
GFOA Certificate of Achievement ...........................................................................
............................... A
OrganizationalChart ..............................................................................................
............................... vii
Listof Officials .......................................................................................................
............................... viii
FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT ....................................................................
..............................1
MANAGEMENT'S DISCUSSION AND ANALYSIS ..................................................
..............................5
BASIC FINANCIAL STATEMENTS
Government —Wide Financial Statements:
Statementof Net Position ...........................................................................
.............................13
Statementof Activities .................................................................................
.............................14
Fund Financial Statements:
Balance Sheet — Governmental Funds .......................................................
.............................16
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position ................................................................. .............................19
Statement of Revenues, Expenditures and Changes in Fund
Balances — Governmental Funds ................................................................ .............................20
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the
Statementof Activities ................................................................................. .............................22
Statement of Net Position — Proprietary Funds ..................................'....... .............................23
Statement of Revenues, Expenses and Changes in Net Position —
ProprietaryFunds ........................................................................................ .............................24
Statement of Cash Flows — Proprietary Funds ........................................... .............................25
Statement of Fiduciary Net Position — Fiduciary Funds .............................. .............................26
Statement of Changes in Fiduciary Net Position — Fiduciary Funds .......... .............................27
CITY OF SEAL BEACH
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2016
TABLE OF CONTENTS
Page
Number
Notes to Basic Financial Statements ................................................................. .............................29
REQUIRED SUPPLEMENTARY INFORMATION
Notes to Required Supplementary Information ................................................. .............................69
Budgetary Comparison Information:
Budgetary Comparison Schedule — General Fund ..................................... .............................70
Budgetary Comparison Schedule — Citywide Grants ................................. .............................71
Schedule of Proportionate Share of the Net Pension Liability ...............!....... .............................72
Schedule of Plan Contributions ...................................................................... .............................73
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet— Nonmajor Governmental Funds .......................... .............................74
Combining Statement of Revenues, Expenditures and Changes
in Fund Balances — Nonmajor Governmental Funds ........................................ .............................80
Budgetary Comparison Schedules — Special Revenue Funds:
StreetLighting ............................................................................................. .............................85
Supplemental Law Enforcement ................................................................. .............................86
DetentionCenter ......................................................................................... .............................87
PoliceAsset Forfeiture ........................................................................:....... .............................88
AirQuality Improvement .............................................................................. .............................69
ParkImprovement ....................................................................................... .............................90
TrafficImpact AB 1600 ................................................................................ .............................91
StateGasoline Tax ................................................... ..............................................................
MeasureM2 ........................................................................................:....... .............................93
Community Development Block Grant. ................................................. ----
....... ............ 94
PoliceGrants ............................................................................................... .............................95
LandscapeDistrict ....................................................................................... .............................96
HeronPointe ............................................................................................... .............................97
PacificGateway ..................................................................................:....... .............................98
SealBeach Cable ....................................................................................... .............................99
CITY OF SEAL BEACH
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2016
TABLE OF CONTENTS
Page
Number
Budgetary Comparison Schedules — Capital Projects
Capital Projects and Equipment ................................. ............................... ............................100
Budgetary Comparison Schedules — Debt Service Funds:
CityDebt Service ........................................................ ............................... ............................101
Combining Balance Sheet — All Agency Funds ................. ............................... ............................102
Combining Statement of Changes in Assets and Liabilities —
AllAgency Funds ............................................................... ............................... ............................103
STATISTICAL SECTION
NetPosition by Component ............................................... ............................... ............................106
Changesin Net Position .................................................... ............................... ............................108
Fund Balances of Governmental Funds ............................ ............................... ............................112
Changes in Fund Balances of Governmental Funds ......... ............................... ............................114
Assessed Value and Estimated Actual Value of Taxable Property .................. ............................116
Direct and Overlapping Property Tax Rates ...................... ........................:...... ............................118
PrincipalProperty Tax Payers ........................................... ............................... ............................120
Property Tax Levies and Collections ................................. ............................... ............................121
Ratios of Outstanding Debt by Type .................................. ............................... ............................122
Ratio of General Bonded Debt Outstanding ...................... ............................... ............................124
Schedule of Direct and Overlapping Debt ......................... ............................... ............................125
Legal Debt Margin Information .......................................... ........................:...... ............................126
Pledged - Revenue Coverage ........................................... ............................... ............................128
Demographic and Economic Statistics .............................. ............................... ............................129
Top 25 Sales Tax Producers ............................................. ............................... ............................130
Full -time and Part-time City Employees by Function ........ ............................... ............................131
Operating Indicators by Function ...................................... ............................... ............................132
Capital Asset Statistics by Function .................................. ............................... ............................133
THIS PAGE INTENTIONALLY LEFT BLANK
November 28, 2016
Honorable Mayor, Members of the City Council and Citizens of the City of Seal Beach
City of Seal Beach staff is pleased to submit for your information the Comprehensive Annual
Financial Report (CAFR) of the City of Seal Beach (City) for the fiscal year ended
June 30, 2016. Responsibility for both the accuracy of presented data and the completeness and
fairness of the presentation including all disclosures rests with the City. In our opinion, the data
is accurate in all material aspects, is presented in a manner designed to fairly set forth the
financial position and results of operations of the City, and contains all disclosures necessary to
enable the reader to gain an understanding of the City's financial affairs.
The financial statements are prepared in accordance with Generally Accepted Accounting
Principals (GAAP) as promulgated by the Government Accounting Standards Board (GASB).
This report consists of management's representations concerning the finances of the City.
Consequently, management assumes full responsibility for the completeness and reliability of all
of the information presented in this report. To provide a reasonable basis for making these
presentations, management of the City has established a comprehensive internal control
framework that is designed to protect the City's assets from loss, theft, or misuse, and to compile
reliable information for the preparation of this report in conformity with GAAP. As
Management, we assert to the best of our knowledge and belief, this financial report is complete
and reliable in all material respects within the reasonable of internal control framework.
i
The City's financial statements have been audited by Lance, Soll & Lunghard LLP, a public
accounting firm fully licensed and qualified to perform audits of the state and local governments
within the State of California. The audit was designed to obtain reasonable assurance about
whether the basic financial statements are free of material misstatement. The independent
auditor concluded, based on the audit, that there was a reasonable basis for rendering an
unmodified opinion that the City of Seal Beach's financial statements for the year ended
June 30, 2016, are fairly presented in conformity with Generally Accepted Accounting
Principles. The independent auditor's report is presented as the first component of the financial
section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statement in the form of Management's Discussion and Analysis
(MD &A). This letter of transmittal is designed to complement MD &A and should be read in
conjunction with it. The City's MD &A can be found immediately following the report of the
independent auditors in the financial section of the CAFR.
PROFILE OF THE CITY
The City of Seal Beach is located on the coast of northwestern Orange County California, was
incorporated on October 25, 1915. The City charter, which was adopted in 1964, established the
form of government, states the powers and duties of the City Council, and establishes various
City Offices.
The City is operated under the City Council /City Manager form of government, and is governed
by a five- member city council elected by district serving four -year alternating terms and who, in
turn elect the Mayor and Mayor Pro Tem from among themselves for a one year term. The
governing council is responsible for policy - making, passing local ordinances, adopting the
budget, appointing committees, and hiring the City Manager and City Attorney.
The City Manager is responsible for carrying out the policies and ordinances of the City Council,
for overseeing the day -to -day operations of the City, and for appointing of all department heads.
The City Clerk is an appointed position and is responsible for maintaining city records and
overseeing elections.
The City provides a full range of services for the citizens utilizing a mix of contracts with other
governmental entities or private companies. The City has its own Police Department but
contracts for fire and paramedic services through the Orange County Fire Authority (OCFA).
The City also operates water and sewer utilities but contracts for refuse and sanitation treatment
services.
The Successor Agency to the Seal Beach Redevelopment Agency (Agency) is a component unit
of the City. Component units are legally separate entities for which the primary government is
financially accountable. The Seal Beach City Council Members, in separate session, serve as the
governing body of the Successor Agency and the City Manager serves as the Executive Director.
History of Seal Beach
The City has an area of 13.23 square miles and sits on the coast as the gateway to Orange County
between the cities of Long Beach and Huntington Beach. In 1901 J.C. Ord, a Civil War veteran
known as "the father of Seal Beach," hired a 30 —mule team to bri ng his small general store
building from Los Alamitos to Bay City where he set it down at the southwest corner of
crossroads now known as Main Street. J.C. Ord was the first ;Trustee, the first Mayor,
Postmaster, and the first Judge. His store on Main Street was the Post Office and Court House
and the jail house when it was necessary.
The population in 1915 was 250 persons, including children. Bay City'was renamed Seal Beach
in 1916. California Sea Lions, commonly called Seals, were a regular'part of the scene along the
coast and a perfect name for the new town.
On January 16, 1916, it was reported in the newspaper, the POST, that Frank Burt, who had
managed the concessions at the recent Panama Pacific Exposition just closing in San Francisco,
was coming to Seal Beach. His purpose was to establish an amusement zone for fun and frolic in
this small beach village. The Jewel City Amusement Company was formed and a new
1,865 foot long pier was constructed in early summer 1916, and is the second longest wooden
pier in California. The City became a popular recreation destination !in the area, and featured a
beach side amusement park before Disneyland was founded.
During World War II, the U.S. Navy purchased 5,256 acres of land and established the Naval
Ammunition and Net Depot for storage and loading of ammunition for the Pacific Fleet. The
Seal Beach National Wildlife Refuge was established in 1972.
In 1961, Leisure World was built on 541 acres of the Hellman Ranch property and was annexed
in 1964.
The Rossmoor Business Center was remodeled and now called the Shops at Rossmoor and was
annexed by the City in 1962.
In 1964 -65, the College Park East and West construction took place.
In 1969, Surfside Colony was annexed into Seal Beach and the City population grew to 24,441
by 1970.
ECONOMIC CONDITIONS
Local economy. Although the focus of this Comprehensive Annual Financial Report is the
financial condition of the City at June 30, 2016, it may be best understood when it is considered
from the broader perspective of the specific environment within which the City operates.
The City is the home of Boeing Company Integrated Defense System international headquarters,
the U.S. Naval Weapons Station, the first Leisure World Retirement Community and the
1,000 acre Seal Beach National Wildlife Refuge. The City's one and a half miles of beaches and
the public pier attracts more than 2,000,000 visitors each year making recreation an important
factor in the local economy. Seal Beach has a variety of local beach' front stores at Main Street
which include several fine dining establishments. Throughout the year many exciting
community events take place in which the residents, and visitors, enjoy and participate.
Long -term financial planning. The City of Seal Beach economy and tax base continue to stay
the course and maintain the present package of core services for our residents, businesses,
visitors, and protect all essential municipal services that contribute 'to the high quality of life
within the City.
In FY 2015 -2016 the tax revenue declined overall, primarily due decline in the petroleum
services industry and a decline in the price of oil. Property Tax revenues increased 4% in the
General Fund and Sales Tax revenues decreased less than 1% compared with the projected
revenues at the beginning of the FY 2015 -2016. The primary reason for the decline in sales tax
was the decline in oil prices and the continued price declines in the fuel and service stations
industry.
For the upcoming fiscal year, property taxes are expected to increase as the result of continued
improvement in real estate values. On the other (rand, continued declines in sales tax is expected
from the on -going decline in the price of oil and in the fuel and service stations industry in
general.
The Southern California region continues to show signs of improved economic activity.
According to local economic updates, Orange County's unemployment rate will continue to
decline and the housing market will continue to show improvement. Consumer spending is
expected to increase slightly as well.
Major initiatives. The City of Seal Beach will continue to be a major participant in improving
ocean water quality as mandated in the Clean Water Act. The City has a National Pollution
Discharge Elimination System Program operated for this purpose.
The City has been aggressively seeking and will continue to search for funding sources from
other governmental agencies or use non - recurring or future developmental revenues to maintain
and improve its infrastructure. The City completed several capital projects throughout the fiscal
year, including the completion of the Eisenhower Park Improvements, 8` Street Sewer Pump
Station and Repaving local streets.
INANCIAL POLICIES AND PROCEDURES
Internal control structure. Management of the City is responsible for establishing and
maintaining an adequate internal control structure. Internal accounting controls are designed to
ensure that the assets of the City are protected from loss, theft, or' misuse, and that adequate
accounting data are compiled to allow for the preparation of financial statements in conformity
with generally accepted accounting principles.
The internal control structure is designed to provide reasonable, but not absolute, assurance, that
these objectives are met. The concept of reasonable assurance recognizes that: (I) the cost of the
control should not exceed the benefits likely to be derived; and (2) the valuation of costs and
benefits require estimates and judgment by management.
Budgetary controls. The annual budget serves as the foundation for the City of Seal Beach's
financial planning and control. The City Council adopts an annual budget and appropriates tine
funds necessary to provide the services and operations for the fiscal year. The City Manager
may make appropriation transfers within and between departments 'which do not result in an
increase in appropriations. The City of Seal Beach City Council must approve all appropriation
changes that results in an increase in appropriations.
AWARDS
GFOA Award Program — Comprehensive Annual Financial Report
The Government Finance Officers Association of the United States (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Seal Beach for
its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2015. This was
the fifteenth consecutive year that the City has received this prestigious award. In order to be
awarded a Certificate of Achievement, a government must publish an easily readable and
efficiently organized comprehensive annual financial report. This report must satisfy both
generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. City staff believes that our
current comprehensive annual financial report continues to meet the Certificate of Achievement
Program's requirements and we are submitting it to the GFOA again this year for award.
iv
ACKNOWLEDGEMENTS
This report was made possible by the highly dedicated Finance staff with their special efforts and
the teamwork, special thanks to the staff in the Finance Department. Sincere appreciation is also
expressed to the City Council and City Manager for their interest and support, which made this
presentation possible; and finally to the City's auditing firm of Lance; Soll & Lunghard, LLP for
their professional assistance.
Respectfully submitted,
Victoria L. Beatley
Director of Finance /City Treasurer
Lip
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Seal Beach
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2015
Executive Director /CEO
vi
City of Seal Beach
Organizational Chart
I Represents City in all lapel matters I
Financial Services /Reporting
Business Tax
Utility Billing /Cashiering
Budget/Audit /Grants
Accounts Payable /Payroll
Debt Administration
Administration
DEVELOPMENT
Building /Code Enforcement
Development Review
Community Development Block Grant
Land Use and Coastal Issues
General Plan and Code
,dull Class Activity
Event Permitting
jOrange County Fire Authority I
CITIZENS OF SEAL BEACH
MAYOR AND CITY COUNCIL
Management
VII
Over All Departments
Agenda Preparation
Administrative Policies
City Council Support
Computer Network
Administration
Intergovernmental Relations
Special Studies /Projects
HUMAN RESOURCES
Personnel Recruitment
Employee Benefits
Maintenance
h Maintenance
r /Sewer Maintenance
al Projects
i Drains
ng Maintenance
t Maintenance
c and Transportation
Control
in Center
CITY OF SEAL BEACH
CALIFORNIA
Principal Officers
City Council
Sandra Massa - Lavitt, Mayor
Mike Varipapa, Mayor Pro Tern
Ellery Deaton, Council Member
Gary Miller, Council Member
David Sloan, Council Member
Executive Officers
Jill R. Ingram, City Manager
Craig A. Steele, City Attorney
Administrative Personnel
Joe Bailey, Marine Safety Chief
Jim Basham, Director of Community Development/Interim Director of Public Works
Victoria L. Beatley, Director of Finance /City Treasurer
Patrick Gallegos, Assistant City Manager
Robin L. Roberts, City Clerk
Joseph Stilinovich, Chief of Police
viii
LSL:o °::
CPAs AND ADVISORS
Ill 011 UlA123r_IoI elk Ce]CZ. .2€i:1le]€71I
To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of City of Seal Beach,
California, (the City) as of and for the year ended June 30, 2016, and the related notes to the financial
statements, which collectively comprise the City's basic financial statements as listed in the table of
contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
O PrimeGlobal
cC4p FNO fIJVNDPS'
To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund,
and the aggregate remaining fund information of the City of Seal Beach, California, as of
June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof
for the year then ended in accordance with accounting principles generally accepted in the United States
of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, the budgetary comparison schedules for the General Fund and Citywide Grants
Fund, the schedule of proportionate share of the net pension liability, and the schedules of plan
contributions as listed in the table of contents be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The introductory section, combining and individual
nonmajor fund financial statements and schedules, and statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records
used to prepare the basic financial statements. The information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves,
and other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the combining and individual nonmajor fund financial statements and
schedules are fairly stated in all material respects in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
LSL*:::
.Iln.V, SIOIs
To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
November 28, 2016 on our consideration of the City's internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on internal
control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City's internal control over
financial reporting and compliance.
z
Brea, California
November 28, 2016
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF SEAL BEACH
MANAGEMENT'S DISCUSSION AND ANALYSIS
Management of the City of Seal Beach is pleased to offer this narrative overview and analysis of the
financial activities of the City for the fiscal year ended June 30, 2016. We encourage readers to consider
the information presented here in conjunction with additional information that we have furnished in our
letter of transmittal and the City's financial statements.
FINANCIAL HIGHLIGHTS
Assets and Deferred Outflows included in the City's combined governmental and business -type
activities exceeded liabilities and Deferred Inflows by $130,209,047 for the fiscal year ended
June 30, 2016, representing an increase of .81% in net position from the prior fiscal year. Of this
amount, a decrease of $1,386,198 was due to the decline in capital assets during the fiscal year.
In addition, $18,257,351 (unrestricted net position) of the total net position may be used to meet
the government's ongoing obligations to citizens and creditors in accordance with the City's
budget and fiscal policies. This amount includes City Council designations of fund balance.
The City's change in net position was $22,662,706 more than last fiscal year. The major reason
for the increase in the change in net position is attributable to the fact that the Net Position was
restated to properly reflect the pension liabilities related to GASB 68 at June 30, 2015 in the
amount of $23,594,076 and a restatement of $374,314 related to grants receivable at
June 30, 2016. In addition, there's an increase in revenues for property tax of $357,690, use of
money and property of $278,852, public safety expenses increased by $950,415, and public
works expenses decreased by $906,449 for the fiscal year ended June 30, 2016.
As of the close of the current fiscal year, the City's governmental funds reported combined ending
fund balances of $32,919,607, representing a decrease of 1.2% from the prior fiscal year. This
resulted in an unassigned fund balance of $20,759,783, or 63% of the total fund balance, after
recording all assigned fund balances.
At the end of the current fiscal year, unassigned fund balance in the General Fund was
$20,811,037 or 64.9% of total general fund expenditures and transfers out.
Revenues associated with the City's business -type activities were $767,600 more than the
$5,778,879 in expenses recorded. During the fiscal year ended 'June 30, 2010, a water rate
study was conducted and as a result of that study, water rates were reduced in fiscal year
2009 -2010 but increased in fiscal year 2010 -2011 and for the next three years. The final
approved water rate increase occurred in the fiscal year ended June 30, 2014.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an
introduction to
the
City's basic financial
statements. The City's basic financial statements
are comprised
of
three components:
1) government -wide financial statements, 2) fund financial
statements and
3)
notes to the financial
statements. This report also contains other supplementary information
in addition to the basic financial
statements themselves.
Government -wide financial statements — The government -wide financial statements are designed to
provide readers with a view of the City's finances as a whole in a manner similar to a private- sector
business.
The Statement of Net Position presents information on all of the City's assets and liabilities, with the
difference between the two reported as net position. Increases or decreases in net position may serve as
a useful indicator of whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the City's net position changed during the
fiscal year. All changes in net position are reported when the underlying event giving rise to the change
occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in the future fiscal periods.
Both of the government -wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from functions that are
intended to recover all or a significant portion of their costs through user fees and charges (business -type
activities). The governmental activities of the City include general government and administration, public
safety, development services, public works, and recreation. The business -type activities of the City
include water and sewer operations.
Fund Financial Statements — The fund financial statements provide detailed information about the most
significant funds and other funds — not the City as a whole. Some funds are required to be established by
State law and by bond covenants. However, management established many other funds to help control
and manage money for particular purposes or to verify that all legal requirements for using certain taxes,
grants, and other resources are being satisfied. The City's three types of funds are governmental,
proprietary, and fiduciary funds.
Governmental funds — Most of the City's basic services are reported in governmental funds, which focus
on how money flows in and out of those funds and the balances left at year -end that are available for
spending. These funds are reported using an accounting method called modified accrual accounting,
which measures cash and all other financial assets that can readily be converted to cash. The
governmental fund statements provide a detailed short-term view of the City's general government
operations and the basic services it provides. Governmental fund information helps determine whether
there are more or fewer financial resources that can be spent in the near future to finance the City's
programs. The differences of results in the Governmental Fund financial statements to those in the
Government -wide financial statements are explained in a reconciliation following each of the
Governmental Fund financial statements.
Proprietary funds — Customer charges for various City services are generally reported in proprietary
funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of
Net Position and the Statement of Activities. In fact, the City's enterprise funds are comprised of the
business -type activities reported in the government -wide statements but provide more detail and
additional information such as a statement of cash flows.
Fiduciary funds — The City utilizes Fiduciary funds to account for assets held by the City in a trustee
capacity, or as an agent for other governmental entities, private organizations, or individuals. All of the
City's fiduciary activities are reported in a separate statement of fiduciary net position and a statement of
changes in fiduciary net position. We exclude these activities from the City's Government -wide Financial
Statements because the City cannot use these assets to finance its operations.
Notes to the Financial Statements — The financial statements also include the Notes to the
Financial Statements that provide important narrative details about the information contained in the
financial statements. Information contained in the Notes to the Financial Statements is critical to a
reader's full understanding of the Government -wide and Fund Financial Statements.
Supplementary Information — In addition to the required elements of the Basic Financial Statements, a
Supplementary Information section is included which contains budgetary and combining schedules that
provide additional details about the City's non -major Governmental Funds and Fiduciary Funds.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
Our analysis focuses on the City's net position and changes in net position resulting from the City's
activities.
Net Position - Net position may serve over time as a useful indicator of a government's financial
position. The City's combined net position were $130.2 million and $129.2 million for the years ended
June 30, 2016 and June 30, 2015, respectively, as shown in Table 1.
Investment in capital assets represents assets such as land, buildings, infrastructure, and equipment less
any related outstanding debt used to acquire those assets. Investment in capital assets represents
$108.1 million, or 83 %, of the total $ 130.2 million net position, a decrease of .6% from the prior fiscal
year. The City's capital assets do not represent a financial resource and consequently are not available
for future spending.
Unrestricted position represents the second largest portion of the City's net position. The City is required
by Council Policy to maintain a minimum of 20% to 25% of operating expenditures to maintain the City's
credit worthiness and to meet cash flow requirements. As of June 30, 2016, unrestricted net position
increased by 10% to $18.3 million from $16.6 million in the prior fiscal year. Restricted net position
represent resources that are legally restricted to specific uses. These restrictions are generally enforced
by external agencies.
As of June 30, 2016, the City reported positive balances in all three categories of net position for both
Governmental and Business -type Activities.
With the exception of contracting the City's fire services with the Orange County Fire Authority, the City is
a full service city providing residents and visitors with the following functional services:
General Government is comprised of the City Council, City Clerk, City Manager, Human Resources, and
Finance. These departments provide general governance, executive management, records
management, risk management, finance, cash management, accounting,' and information technology
services. An outside firm appointed by the City Council provides legal services.
Goemetal
mess -Type
Total
Activities
Pctivfties
Activities
3715
2016
2015
2016
2015
2016
Onertanddhaassets
$ 38,407 _T
38,064
$ 16,346
$ 16,640
-T-9-7-5-3 $
54,704
Capital assets
77 ,972
77,195
40,881
40,271
118,853
117,466
Tod assets
116,379
115,259
57,227
56,911
173,606
172,170
DArned Ottion6 of Resauoes
2003
4,274
363
389
2,366
4,663
Imgfermliatilitiesoitstaxirg
2 $352
31,837
8,529
8,301
36,861
40,138
Ofer liabilitiess
2,018
2,251
1,436
910
3,454
3,161
Totalliatilities
30,370
34,088
9,965
9,211
40,335
43,259
Dafared IrHonaot Fbxuoes
5 ,775
2,925
703
400
6,478
3,325
Nat position
Net irnestmantin capital axt.
74,297
73,940
34,451
34,145
106,748
108,085
%sticted
3,843
3,857
-
-
3,843
3,867
Unrestricted
4,097
4,713
12,471
13,544
16,568
18,257
Total net pcostion
$ 82,237 $
82,520
$ 46,922
$ 47,698
$ 129,159 $ 137,209
Investment in capital assets represents assets such as land, buildings, infrastructure, and equipment less
any related outstanding debt used to acquire those assets. Investment in capital assets represents
$108.1 million, or 83 %, of the total $ 130.2 million net position, a decrease of .6% from the prior fiscal
year. The City's capital assets do not represent a financial resource and consequently are not available
for future spending.
Unrestricted position represents the second largest portion of the City's net position. The City is required
by Council Policy to maintain a minimum of 20% to 25% of operating expenditures to maintain the City's
credit worthiness and to meet cash flow requirements. As of June 30, 2016, unrestricted net position
increased by 10% to $18.3 million from $16.6 million in the prior fiscal year. Restricted net position
represent resources that are legally restricted to specific uses. These restrictions are generally enforced
by external agencies.
As of June 30, 2016, the City reported positive balances in all three categories of net position for both
Governmental and Business -type Activities.
With the exception of contracting the City's fire services with the Orange County Fire Authority, the City is
a full service city providing residents and visitors with the following functional services:
General Government is comprised of the City Council, City Clerk, City Manager, Human Resources, and
Finance. These departments provide general governance, executive management, records
management, risk management, finance, cash management, accounting,' and information technology
services. An outside firm appointed by the City Council provides legal services.
Public Safety is comprised of the Police and Lifeguard departments. The two departments provide
general law enforcement, oversee animal control services, ocean and pool lifeguard services, and parking
control.
Public Works provides engineering, construction and maintenance of public streets, highways, buildings,
beaches, parks and related infrastructure, as well as traffic engineering, and street lighting.
Development Services is comprised of the Planning and Building departments that provide planning and
zoning services, economic development services, and building plan check and code enforcement
services.
Community Services provides leisure classes, monitors use of community facilities, sports programs, and
aquatic services.
Business Enterprise Operations include water and sewer operations and are administered by Public
Works.
The following table provides a summary of the City's operations for the years ended June 30, 2016 and
2015.
Table 2
Changes in Net Position
(in Thousands)
"I
Governmental
Business -Type
Total
Activities
Activities
Activities
2015
2016
2015
2016
2015
2016
Revenues:
Program Revenues:
Charges for services
$ 7,097
$ 6,544
$ 7,321
$ 6,728
$ 14,418
$ 13,272
Operating grants and capital contributions
2,768
2,214
-
-
2,768
2,214
Capital grants and condbutions
20
10
-
-
20
10
General Revenues:
Taxes
Property taxes
10,051
10,409
-
-
10,051
10,409
Sales taxes
4,246
4,229
-
-
4,246
4,229
Transient occupancy taxes
1,526
1,655
-
-
1,526
1,655
Othertaxes
6,164
5,608
-
-
6,164
5,608
Use of money and property
726
1,005
110
177
836
1,182
Other
357
536
4
20
361
556
Extraordinary gain /(loss) on loan
695
-
-
-
695
-
Transfers
379
379
(379)
(379)
-
Total revenues
34,029
32,589
7,056
6,546
41,085
39,135
Expenses:
General government
6,551
6,264
-
-
6,551
6,264
Public safety
16,022
16,973
-
-
16,022
16,973
Community development
1,394
1,100
-
-
1,394
1,100
Community Services
1,129
1,037
-
-
1,129
1,037
Public works
7,863
6,956
-
-
7,863
6,956
Interest on long -term debt
444
350
-
-
444
350
Water
-
-
4,038
4;102
4,038
4,102
Sewer
-
-
1,661
1,677
1,661
1,677
Total expenses
33,403
32,680
5,699
5,779
39,102
38,459
Excess/(deficiency)
626
(91)
1,357
767
1,983
676
Changes in net position
626
(91)
1,357
767
1,983
676
Net position at beginning of year
102,877
82,237
47,893
46,922
150,770
129,159
Restatement of net position
2( 1,266)
374
(2,328)
-
(23,594)
374
Net position at end of year
$ 82,237
$ 82,520
$ 46,922
$ 47,689
$ 129,159
$ 130,209
"I
Analysis of the City's Operations — The City's Net Position increased by $1.1 million during Fiscal Year
2015 -2016 or .81 %, over prior year results.
Governmental Activities experienced an increase of $.3 million in net position as of June 30, 2016,
compared to a decrease of $20.6 million at June 30, 2015. The primary reason for the increase in net
position is attributable to the OCTA Co -Op agreement reimbursement that is being restated to properly
reflect receivable at June 30, 2016 in the amount of $.4 million.
The cost of all governmental activities during the current fiscal year was $32.7 million, slightly lower than
last year. As shown on the statement of activities, those who directly benefited from the programs paid
$6.6 million of the cost, and $2.2 million was financed by contributions and grants received from other
governmental organizations. The remainder of the costs of operations, $23.9 million was subsidized
through general City taxes and other revenue sources. The largest operating cost was comprised of
Public Safety, representing 52% of total governmental expenditures compared to 48% of total
governmental expenditures in fiscal year 2015 -2016.
Business -type Activities' net position increased $.8 million primarily due planned increase in sewer rates
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
Governmental funds — The objective of the City's governmental funds is to provide information on
near -term inflows, outflows, and balances of spendable resources. Such information is useful in
assessing the City's financing requirements. In particular, unreserved fund balance may serve as a
useful measure of a government's net resources available for spending at the end of the fiscal year.
As of June 30, 2016, the City's governmental funds reported combined ending fund balances of
$32.9 million. Approximately $20.8 million, or 63.1 %, of this total amount constitutes unassigned fund
balance. The remainder of the fund balance is assigned to indicate that it is not available for new
spending because it has already been committed to pay for encumbrances, loans, prepaid expenses, or
advances to other funds.
The General Fund ended the fiscal year with a fund balance of $29.1 million; representing a net decrease
of $.9 million in fund balance compared to the $2.1 million decrease experienced during the prior fiscal
year. The primary reason for the decrease in fund balance was due to a'decline in utilities users tax,
franchise tax, other taxes, and sales tax. Additionally, public safety expenditures increased by
$1.0 million.
Proprietary funds — The City's proprietary funds financial statements provide the same type of
information found in the government -wide financial statements, but in more detail. Unrestricted net
position totaled $7.8 million and $5.8 million for the Water and Sewer funds, respectively. The Water fund
decreased by $36.4 thousand in net position, mainly due to decrease in revenue collection. The increase
of $804 thousand in the Sewer fund net position resulted from planned increases in sewer operating fees
and sewer capital fees charged to customers to rehabilitate and maintain'the sewer infrastructure and
satisfy future debt service commitments. Sewer operating fees represent 22% of customer water charges
for both usage and capital costs.
General Fund Budgetary Highlights — There was no amendment of the original and final amended
budgeted revenues.
The difference between the original and final amended budget in General Fund expenditures was an
increase of $.8 million. This difference is due to a variety of budget amendments approved by the City
Council during the fiscal year including tennis center emergency repair, noise study, FEMA contract, tree
trimming, emergency city hall security updgrade, 800 MHz, El Nino, and purchase order and CIP
carryover from prior fiscal year.
General Fund revenues came in less than projected in the final budget by approximately $2.1 million.
Actual revenues came in lower than budgeted revenues and were almost entirely due to sales tax,
franchise tax, utilities users tax, other taxes, and transfer in, however property tax came in higher than
budgeted.
General Fund expenditures were $9.8 million less than appropriations. This difference is due to transfers
out and budgeted capital projects that were either not started or completed during the fiscal year. These
appropriations were carried forward to the FY 2016 -2017 fiscal year.
CAPITAL ASSETS
The City's capital assets for its governmental and business -type activities as of June 30, 2016, amounts
to $117.5 million compared to $118.9 million (net of accumulated depreciation) for FY 2014 -2015. This
investment in capital assets includes land, building, equipment, improvements, infrastructure, and
construction in progress. Total capital assets for governmental activities for the current fiscal year
decreased 1% and the City's investment in capital assets for business -type activities for the current fiscal
year also decreased 1.49°/x.
Table 3
Capital Assets At Year -End
(Net of Depreciation, in Thousands)
During FY 2015 -2016, major capital projects formally completed include:
• Eisenhower Park Improvement Project No. PR1502 for $181,167. This project added a concrete
walkway and protective railing to a portion of Eisenhower Park.
81^ Street Sewer Pump Station Project No. SS0901 -3 for $2,702,866. This project replaced the
existing sewer pump station and upgraded it with emergency backup power.
• 2015 Local Street Resurfacing Project No. ST1502 for $331,361. This project resurfaced 11'h
Street, 131" Street, Balboa Drive, Harbor Way, and Silver Shoals Avenue.
• Pier Structural Assessment Implementation Project No. BP1103: This project report analyzed the
entire Pier Structure for $60,813.
• 2015 Annual Slurry Seal Project No. ST1501: This project slurryed various city wide streets for
$60,735.
Additional information on the City's capital assets can be found in note 6 in the Financial Section of this
report.
10
Governmental
Business -Type
Activities
Activities
Total
2015 2016
2015 2016
2015
2016
Land and land easement
$ 11,420 $ 11,420
$ - $ -.
$ 11,420 $
11,420
Buildings and Improvements
9,638 9,497
2 1
9,640
9,498
Machinery and Equipment
407 302
708 683
1,115
985
Vehicles
970 1,220
398 385
1,368
1,605
Infrastructure
54,513 52,279
31,604 38,167
86,117
90,446
Gontruction -in- progress
1,024 2,477
8,169 1,036
9,193
3,513
Totals
$ 77,972 $ 77,195
$ 40,881 $ 40,272
$ 118,853 $
117,467
During FY 2015 -2016, major capital projects formally completed include:
• Eisenhower Park Improvement Project No. PR1502 for $181,167. This project added a concrete
walkway and protective railing to a portion of Eisenhower Park.
81^ Street Sewer Pump Station Project No. SS0901 -3 for $2,702,866. This project replaced the
existing sewer pump station and upgraded it with emergency backup power.
• 2015 Local Street Resurfacing Project No. ST1502 for $331,361. This project resurfaced 11'h
Street, 131" Street, Balboa Drive, Harbor Way, and Silver Shoals Avenue.
• Pier Structural Assessment Implementation Project No. BP1103: This project report analyzed the
entire Pier Structure for $60,813.
• 2015 Annual Slurry Seal Project No. ST1501: This project slurryed various city wide streets for
$60,735.
Additional information on the City's capital assets can be found in note 6 in the Financial Section of this
report.
10
DEBT ADMINISTRATION
As of June 30, 2016, the City had bonded debt, notes payable, compensated absences, claims payable,
and capital leases totaling $16.1 million compared to $17.8 million at the end of FY 2014 -2015. The
City's governmental activities maintained $9.7 million in bonds, capital leases, compensated absences,
and claims payable versus $11.1 million last year, representing a decrease of approximately $1.4 million
from the previous fiscal year. This decrease reflects interest and principal payments made during
FY 2015 -2016.
The City's business -type activities debt decreased $3 million from $6.7 million to $6.4 million. Debt in the
business -type activities consists of Sewer Certificates of Participation Payable to provide funds for
improvements to the City's sewer system, a State revolving loan for the sewer capital improvement
project, and compensated absences.
Table 4
Outstanding Debt, At Year -End
(in Thousands)
Additional information on the City's long -term debt can be found in note 7 in the Financial Section of the
report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
The City of Seal Beach economy and tax base continue to support the present package of core services
for our residents, businesses, and visitors and protect all essential municipal services that contribute to
the high quality of life within the City.
In FY 2015 -2016 the tax revenue decreased overall as a direct result of a decline in the petroleum
industry and a decline in the price of oil. In the General Fund, Transient Occupancy Tax revenues
increased 8% and Other Taxes decreased 43% compared with the projected revenues at the beginning of
the FY 2015 -2016. The primary reason for the decline in other taxes was a significant decrease in sales
related to the fuel and service stations industry.
For the upcoming fiscal year, property tax and sales tax are projected to increase slightly primarily due to
the continued improvement in real estate values and retail sales throughout the City.
The Southern California region, as well as the entire country, continues to show signs of improved
economic activity. According to local economic updates, Orange County's unemployment rate will
continue to decline and the housing market will continue to show improvement. Consumer spending is
expected to increase slightly as well.
11
Governmental
Business -Type
Activities
Activities
Total
2015
2016
2015 2016
2015
2016
Compensated absences
$ 1,206 $
1,228
$ 119 $ 128
$ 1,325
$ 1,356
Capital leases
1,488
1,368
- -
1,488
1,368
Pension Obligation Bonds
4,411
3,461
- -
4,411
3,461
Lease Revenue Bonds
3,675
3,255
- -
3,675
3,255
Certificates of participations
-
-
2,705 2,565
2,705
2,565
Sewer Capital l mprov. Proj.
-
-
3,893 3,718
3,893
3,718
Self- insured claims payable
315
378
-
315
378
Total
$ 11,095 $
9,690
$ 6,717 $ 6,411
$ 17,812
$ 16,101
Additional information on the City's long -term debt can be found in note 7 in the Financial Section of the
report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS
The City of Seal Beach economy and tax base continue to support the present package of core services
for our residents, businesses, and visitors and protect all essential municipal services that contribute to
the high quality of life within the City.
In FY 2015 -2016 the tax revenue decreased overall as a direct result of a decline in the petroleum
industry and a decline in the price of oil. In the General Fund, Transient Occupancy Tax revenues
increased 8% and Other Taxes decreased 43% compared with the projected revenues at the beginning of
the FY 2015 -2016. The primary reason for the decline in other taxes was a significant decrease in sales
related to the fuel and service stations industry.
For the upcoming fiscal year, property tax and sales tax are projected to increase slightly primarily due to
the continued improvement in real estate values and retail sales throughout the City.
The Southern California region, as well as the entire country, continues to show signs of improved
economic activity. According to local economic updates, Orange County's unemployment rate will
continue to decline and the housing market will continue to show improvement. Consumer spending is
expected to increase slightly as well.
11
The City prepared an annual budget for FY 2015 -2016. The one year budget represents a General Fund
surplus of operating revenues over operating expenditures (excluding capital projects) in each fiscal year.
Expenditures of the City were budgeted at the current level of service with capital improvement projects to
be supported primarily by the City's General Fund reserves. The revenue projections for the
FY 2016 -2017 budget year were very conservative due to the slow improvement in the economy. The
City will continue to monitor revenue streams throughout the coming years and will adjust spending levels
as deemed necessary.
The most significant issues facing the City are the aged condition of the City's infrastructure. The City
has completed and adopted numerous infrastructure planning documents e.g. (Water Master Plan, Sewer
Master Plan, Master Plan of Drainage, Facilities Master Plan, and Pavement Management Plan). These
plans identify well over $150 million in needed improvements throughout the City. The City annually
adopts a 5 year Capital Improvement Program (CIP) that strategically plans construction of these needed
improvements. The FY 2016 -17 CIP recommends $33.3 million in improvements over the next 5 years.
The 5 Year Capital Improvement Program identifies needs in the following areas: Beach and Pier
($41M), Buildings and Facilities ($61M), Parks ($390k), Sewer System ($680k), Storm Drain System
($255k), Streets and Transportation ($5.7M) and Water System ($16.1 M). Based upon the list of known
projects there is over $146 million of capital improvements needed in the near future.
REQUEST FOR INFORMATION
This financial report is designed to provide the City's citizens, taxpayers, customers, investors, and
creditors with a general overview of the City's finances and to demonstrate the City's accountability for
the funds it receives. If you have questions about this report or need additional financial information,
contact the City's Finance Department at 211 8" Street, Seal Beach, CA 90740 -6379 or call
(562) 431 -2527.
12
CITY OF SEAL BEACH
STATEMENT OF NET POSITION
JUNE 30, 2016
Assets:
Cash and investments
Receivables:
Accounts
Taxes
Accrued interest
Prepaid costs
Due from other governments
Restricted cash with fiscal agent
Advance to Successor Agency
Net OPEB asset
Capital assets not being depreciated
Capital assets, net of depreciation
Total Assets
Deferred Outflows of Resources:
Deferred charge on refunding
Deferred pension related items
Total Deferred Outflows
of Resources
Liabilities:
Accounts payable
Accrued liabilities
Accrued interest
Unearned revenue
Deposits payable
Retentions Payable
Noncurrent liabilities:
Due within one year
Due in more than one year
Net pension liability
Total Liabilities
Deferred Inflows of Resources:
Deferred pension related items
Total Deferred Inflows
of Resources
Net Position:
Net investment in capital assets
Restricted for:
Community development projects
Public safety
Community services
Public works
Debt service
Unrestricted
Total Net Position
See Notes to Financial Statements 13
Primary Government
Governmental Business -Type
Activities Arfivitips Tntals
$ 32,015,146
1,308,851
2,112, 566
26,024
682,859
494,036
736,887
687,254
13,897,227
63,297,721
115,258,571
$ 14,928,014
967,415
29,990
714,110
1,036,004
39,235,185
56.910.718
$ 46,943,160
2,276,266
2,112,566
26,024
712,849
494,036
736,887
714,110
687,254
14,933,231
102,532,906
172.169.289
-
156,914
156,914
4,273,852
232,151
4,506,003
4,273,852
389,065
4,662,917
1,496,434
669,645
2,166,079
342.733
49,642
392,375
41.074
72,143
113,217
23,921
-
23,921
294,216
8,685
302,901
52,474
109,712
162,186
1,957,453
354,706
2,312,159
7,732,735
6,056,783
13,789,518
22,146,510
1,889,349
24,035,859
34,087,550
9,210,665
43,298,215
2,925,053
399,891
3,324,944
2,925,053
399,891
3,324,944
73,939,948
34,145,069
108,085,017
587,736
-
587,736
80,323
-
80,323
323,589
-
323,589
2,151,921
-
2,151,921
723,110
-
723,110
4,713,193
13,544,158
18,257,351
$ 82,519,820 1
$ 47,689,227
$ 130,209,047
CITY OF SEAL BEACH
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2016
Functions /Programs
Primary Government:
Governmental Activities:
General government
Public safety
Community development
Community services
Public works
Interest on long -term debt
Total Governmental Activities
Business -Type Activities:
Water Utility
Sewer Utility
Total Business -Type Activities
Total Primary Government
Program Revenues
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
$ 6,264,368
$ 2,074,448
$ 12,972 $
16,972,880
1,428,864
-
1,100,110
192,878
537,885
1,036,627
1,015,517
58,157 -
6,956,443
1,832,289
1,605,481 10,000
349,652
- -
32,680,080
6,543,996
2,214,495 10,000
4,102,228 4,261,566
1,676,651 2,466,869
5,778,879 6,728,435 - -
$ 38,458,959 $ 13,272,431 $ 2,214,495 $ 10,000
General Revenues:
Taxes:
Property taxes, levied for general purpose
Transient occupancy taxes
Sales taxes
Franchise taxes
Utility users tax
Other taxes
Motor vehicle in lieu - unrestricted
Use of money and property
Other
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position at Beginning of Year
Restatement of Net Position
Net Position at End of Year
See Notes to Financial Statements 14
Net (Expenses) Revenues and Changes in
Net Position
Primary Government
Governmental Business -Type
Activities Activities Totals
—
$ (4,176,948)
(15,544,016)
(369,347)
37,047
(3,508,673)
(349,652)
(23,911,589)
$ (4,176,948)
(15,544,016)
(369,347)
37,047
(3,508,673)
(349,652)
(23,911,589)
See Notes to Financial Statements 15
159,338
159,338
790,218
790,218
949,556
949,556
(23,911,589)
949,556
(22,962,033)
10,408,505
-
10,408,505
1,655,376
-
1,655,376
4,228,730
-
4,228,730
955,922
-
955,922
4,445,180
-
4,445,180
197,166
-
197,166
9,960
-
9,960
1,004,572
176,437
1,181,009
536,175
20,107
556,282
378,500
(378,500)
-
23,820,086
(181,956)
23,638,130
(91,503)
767,600
676,097
82,237,009
46,921,627
129,158,636
374,314
-
374,314
$ 82,519,820
$ 47,669,227
$ 130,209,047
See Notes to Financial Statements 15
CITY OF SEAL BEACH
BALANCE SHEET
GOVERNMENTALFUNDS
JUNE 30, 2016
Assets:
Pooled cash and investments
Receivables:
Accounts
Taxes
Accrued interest
Prepaid costs
Due from other governments
Due from other funds
Restricted assets:
Cash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Unearned revenues
Deposits payable
Due to other funds
Retentions Payable
Total Liabilities
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances:
Nonspendable:
Prepaid costs
Restricted for:
Community development projects
Public safety
Community services
Public works
Debt service
Assigned to:
Buildings
Storm drain
Street improvements
Swimming pool
College park east
Community services
Waste Management
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
See Notes to Financial Statements 16
Special Capital Projects
Revenue Funds Funds
Capital Projects
General Citywide Grants and Equipment
$ 26,631,596 $ 76,837 $ 542,166
1,086,957 - -
2,111,313 - -
25,767 - -
682,859 - -
48,088 417,824 -
125,298 - -
10,777 -
$ 30,722,655 $ 494,661 $ 542,166
$ 887,128 $ - $ 491,442
337,129 -
294,216
- 50,724
1,518,473 - 542,166
100,000 417,824
100,000 417,824
682,859
76,837
278,181 -
678,036 -
117,167 -
4,782,441 -
477,000 -
977,461 -
300,000 -
20,811,037 -
29,104,182 76,837
$ 30,722,655 $ 494,661 $ 542,166
CITY OF SEAL BEACH
BALANCE SHEET
GOVERNMENTALFUNDS
JUNE 30, 2016
Assets:
Pooled cash and investments
Receivables:
Accounts
Taxes
Accrued interest
Prepaid costs
Due from other governments
Due from other funds
Restricted assets:
Cash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Unearned revenues
Deposits payable
Due to other funds
Retentions Payable
Total Liabilities
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances:
Nonspendable:
Prepaid costs
Restricted for:
Community development projects
Public safety
Community services
Public works
Debt service
Assigned to:
Buildings
Storm drain
Street improvements
Swimming pool
College park east
Community services
Waste Management
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
See Notes to Financial Statements 17
Other Total
Governmental Governmental
Funds Funds
$ 2,975,746 $ 30,226,345
221,894
1,308,851
1,253
2,112,566
257
26,024
-
682,859
28,124
494,036
-
125,298
726,110 736,887
$ 3,953,384 $ 35,712,866
$ 37,254 $
1,415,824
5,604
342,733
23,921
23,921
-
294,216
125,298
125,298
1,750
52,474
193,827
2,254,466
-
117,167
20,969
538,793
20,969
538,793
682,859
510,899
587,736
80,323
80,323
323,589
323,589
2,151,921
2,151,921
723,110
723,110
-
278,181
-
678,036
-
117,167
-
4,782,441
-
477,000
-
977,461
-
300,000
(51,254) 20,759,783
3,738,588 32,919,607
$ 3,953,384 $ 35,712,866
THIS PAGE INTENTIONALLY LEFT BLANK
18
CITY OF SEAL BEACH
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2016
Fund balances of governmental funds
$ 32,919,607
Amounts reported for governmental activities in the statement of net position are
different because:
Capital assets net of depreciation have not been included as financial resources
in governmental fund activity.
76,155,388
Deferred outflows related to pension items:
Pension contributions subsequent to measurement date
$ 2,005,832
Adjustments due to the differences in proportions
2,225,214
Differences between actual contributions and the proportionate share of contributions
16,617
Difference between expected and actual experiences
26,189 4,273,852
Long -term debt and compensated absences
that have not been included in the governmental fund activity:
Long -term liabilities:
Bonds payable
$ (6,716,000)
Loan
(1,368,208)
Compensated Absences
(1,228,082)
Claims and judgments
(377,898)
Net pension liability
(22,146,510) (31,836,698)
Governmental funds report all OPEB contributions as expenditures,
however in the statement of net position any excesses or deficiencies
in contributions in relation to the Annual Required Contribution (ARC) are
recorded as an asset or liability.
687,254
Accrued interest payable for the current portion of interest due on
Bonds has not been reported in the governmental funds.
(41,074)
Deferred inflows related to pension items:
Net difference between projected and actual earnings on plan assets
$ (239,681)
Adjustment due to differences in proportions
(777,017)
Differences between actual contributions and the proportionate share of contributions
(575,801)
Change in assumptions
(1,138,822)
Difference between expected and actual experiences
(193,732) (2,925,053)
Revenues reported as unavailable revenue in the governmental funds and recognized
in the statement of activities. These are included in the intergovernmental revenues
in the governmental fund activity.
538,793
Internal service funds are used by management to charge the costs of certain
activities, such as equipment management and self- insurance, to individual funds.
The assets and liabilities of the internal service funds must be added to the
statement of net position.
2,747,751
Net Position of Governmental Activities
$ 82,519,820
See Notes to Financial Statements 19
CITY OF SEAL BEACH
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
YEAR ENDED JUNE 30, 2016
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Fines and forfeitures
Contributions
Miscellaneous
Total Revenues
Expenditures:
Current:
General government
Public safety
Community development
Community services
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total Expenditures
Excess of Revenues Over
Expenditures
Other Financing Sources (Uses):
Transfers in (Note 4)
Transfers out (Note 4)
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
See Notes to Financial Statements 20
Special Capital Projects
Revenue Funds Funds
Citywide Capital Projects
General Grants and Equipment
$ 21,510,272 $ - $ -
1,304,924 - -
160,398 527,771 -
4,085,676 - -
967,400
1,110,606 - -
283,222 - -
529,985 - -
29,952,483 527,771 -
5,077,980 -
16,036,899 -
888,226
1,075,282 -
4,829,741 -
- - 2,619,901
120,150
28,028,278 - 2,619,901
1,924,205 527,771 (2,619,901)
1,202,636 - 2,619,901
(4,024,272) (43,510)
(2,821,636) (43,510) 2,619,901
(897,431) 484,261
30,001,613 (407,424)
$ 29,104,182 $ 76,837 $
CITY OF SEAL BEACH
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTALFUNDS
YEAR ENDED JUNE 30, 2016
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Fines and forfeitures
Contributions
Miscellaneous
Total Revenues
Expenditures:
Current:
General government
Public safety
Community development
Community services
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total Expenditures
Excess of Revenues Over
Expenditures
Other Financing Sources (Uses):
Transfers in (Note 4)
Transfers out (Note 4)
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
See Notes to Financial Statements 21
Other
Total
Governmental
Governmental
Funds
Funds
$ 1,317,872
$ 22,828,144
-
1,304,924
699,887
1,388,056
129,014
4,214,690
37,172
1,004,572
-
1,110,606
-
283,222
7,792
537,777
2,191,737
32,671,991
273,150
5,351,130
341,517
16,378,416
287,113
1,175,339
-
1,075,282
32,317
4,862,058
25,922
2,645,823
1,370,000
1,490,150
355,819
355,819
2,685,838
33,334,017
(494,101) (662,026)
1,780,407 5,602,944
(1,272,526) (5,340,308)
j 507,881 262,636
I 13,780 (399,390)
3,724,808 33,318,997
$ 3,738,588 _L 32,919,607
CITY OF SEAL BEACH
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2016
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the statement of activities are
different because:
Governmental funds report capital outlays as expenditures. However, in the statement
of activities, the costs of those assets is allocated over their estimated useful lives
as depreciation expense. This is the amount by which capital outlays exceeded
depreciation in the current period.
Capital outlay $ 1,853,114
Depreciation (2,702,571)
Repayment of bond principal is an expenditure in the governmental funds, but the
repayment reduces long -term liabilities in the statement of net position.
Principal repayments. I
Accrued interest for long -term liabilities. This is the net change in accrued interest
for the current period.
Pension obligation expenses reported in the statement of activities do not require
the use of current financial resources and, therefore, are not reported as
expenditures in governmental funds.
(399,390)
(849,457)
1,490,150
6,167
230,133
Claims and judgment changes reported in the statement of activities do not
require the use of current financial resources and, therefore, are not reported as
expenditures in governmental funds. (63,073)
Compensated absences expenses reported in the statement of activities do not
require the use of current financial resources and, therefore, are not reported as I
expenditures in governmental funds. (21,975)
Governmental funds report all contributions in relation to the annual required
contribution (ARC) for OPEB as expenditures, however in the statement
of activities only the ARC is an expense. 35,608
Revenues reported as unavailable revenue in the governmental funds and recognized
in the statement of activities. These are included in the intergovernmental revenues
in the governmental fund activity. (461,914)
Internal service funds are used by management to charge the costs of certain
activities, such as equipment management and self- insurance, to individual funds.
The net revenues (expenses) of the internal service funds is reported with
governmental activities. (57,752)
Change in net position of governmental activities 1 $ (91,503)
See Notes to Financial Statements 22
CITY OF SEAL BEACH
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2016
Governmental
Activities -
Vehicle
Replacement
Business -Type Activities - Enterprise Funds Internal Service
Water Utility Sewer Utility Total Fund
Assets:
Current:
Cash and investments
$
9,248,815
$ 5,679,199
$ 14,928,014
$ 1,788,801
Receivables:
Accounts
624,129
343,286
967,415
-
Prepaid costs
15,220
14,770
i
29,990
Total Current Assets
9,886,164
6,037,255
15,925,419
1,788,801
Noncurrent:
Advance to Successor Agency
-
714,110
714,110
-
Capital assets:
Buildings and improvements
73,284
-
73,284
-
Machinery andequipment
605,152
785,802
1,390,954
169,204
Vehicles
298,217
420,651
718,868
1,375,322
Infrastructure
31,653,574
38,057,140
69,710,714
-
Construction in progress
906,747
129,257
1,036,004
Accumulated depreciation
(17,210,251)
(15,448,384)
(32,658,635)
(504,966)
Total Noncurrent Assets
16,326,723
24,658,576
40,965,299
1,039,560
Total Assets
26,214,687
30,695,831
56,910,718
2,828,361
Deferred Outflows of Resources:
Deferred charge on refunding
-
156,914
156,914
-
Deferred pension related items
142,558
89,593
232,151
-
Total Deferred Outflows of Resources
142,558
246,507
389,065
-
Liabilities:
Current:
Accounts payable
646,113
23,532
669,645
80,610
Accrued liabilities
29,402
20,240
49,642
-
Accrued interest
-
72,143
72,143
-
Deposits payable
7,585
1,100
8,685
-
Retentions Payable
54,665
55,047
109,712
-
Accrued compensated absences
21,498
8,374
29,872
-
Bonds, notes, and capital leases
-
324,834
324,834
-
Total Current Liabilities
759,263
505,270
1,264,533
80,610
Noncurrent:
Accrued compensated absences
47,570
51,013
98,583
-
Bonds, notes, and capital leases
-
5,958,200
5,958,200
Net Pension Liability
1,202,413
686,936
1,889,349
-
Total Noncurrent Liabilities
1,249,983
6,696,149
7,946,132
-
Total Liabilities
2,009,246
7,201,419
9,210,665
60,610
Deferred Inflows of Resources:
Deferred pension related items
254,497
145,394
399,891
Total Deferred Inflows of Resources
254,497
145,394
399,891
Net Position:
Net investment in capital assets
16,326,723
17,818,346
34,145,069
1,039,560
Unrestricted
7,766,979
5,777,179
13,544,158
1,708,191
Total Net Position
$
24,093,702
$ 23,595,525
I
$ 47,669,227
$ 2,747,751
Total Liabilities and Net Position
$
26,357,445
$ 30,942,338
$ 57,299,783
$ 2,828,361
See Notes to Financial Statements 23
CITY OF SEAL BEACH
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2016
Governmental
Activities -
Business -Type Activities - Enterprise
Funds
Vehicle
Replacement
Internal Service
Water Utility
Sewer Utility
Total
Fund
Operating Revenues:
Sales and service charges
$ 4,261,566
$ 2,466,869
$ 6,728,435
$ -
Miscellaneous
19,256
851
20,107
-
Total Operating Revenues
4,280,822
2,467,720
6,748,542
-
Operating Expenses:
Administration and general
3,504,206
823,007
4,327,213
8,357
Amortization and depreciation expense
598,021
627,613
1,225,634
165,259
Total Operating Expenses
4,102,227
1,450,620
5,552,847
173,616
Operating Income (Loss)
178,595
1,017,100
1,195,695
(173,616)
Nonoperating Revenues (Expenses):
Interest revenue
109,530
66,906.
176,436
-
Interest expense
-
(226,031)1
(226,031)
-
Total Nonoperating
Revenues(Expenses)
109,530
(159,125)
(49,595)
-
Income (Loss) Before Transfers
288,125
857,975
1,146,100
(173,616)
Transfers in
-
-
-
310,000
Transfers out
(324,500)
(54,000),
(378,500)
(194,136)
Changes in Net Position
(36,375)
803,975
767,600
(57,752)
Net Position:
Beginning of Fiscal Year
24,130,077
22,791,550 1
46,921,627
2,805,503
End of Fiscal Year
$ 24,093,702
$ 23,595,525
I,
$ 47,689,227
$ 2,747,751
See Notes to Financial Statements
24
i
CITY OF SEAL BEACH
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2016
Governmental
Activities -
Vehicle
Business -Type Activities - Enterprise Funds
Replacement
Internal
Water Utility Sewer Utility Total Service Fund
Cash Flows from Operating Activities
Cash received from customers and users
$ 4,292,263 $
2,538,160
$ 6,830,423 $ 2,800
Cash (paid to) /received from suppliers for goods and services
(64,451)
(488,230)
(552,681) 34,708
Cash paid to employees for services
(3,725,259)
(856,508)
(4,581,767) -
Cash received from others
19,256
851
20,107
(8,300)
18,420
12,718
Net Cash Provided (Used) by Operating Activities
521,809
1,194,273
1,716,082 37,508
Cash Flows from Capital
and Related Financing Activities:
Acquisition and construction of capital assets
Principal paid on capital debt
Interest paid on capital debt
Net Cash Provided (Used) by
Capital and Related Financing Activities
Cash Flows from Non - Capital
Financing Activities:
Cash transfers out
Cash transfers in
Repayment received from advance to Successor Agency
Net Cash Provided (Used) by
Non - Capital Financing Activities
Cash Flows from Investing Activities:
Interest received
Net Cash Provided (Used) by
Investing Activities
Net Increase (Decrease) in Cash
and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
net cash provided (used) by operating activities:
Depreciation and amortization
(Increase) decrease in accounts receivable
(Increase) decrease in prepaid expense
(Increase) decrease in deferred outflows from pensions
Increase (decrease) in accounts payable
Increase (decrease) in retentions payable
Increase (decrease) in deposits payable
Increase (decrease) in accrued liabilities
Increase (decrease) in compensated absences
Increase (decrease) in net pension liability
Increase (decrease) in deferred inflows from pensions
Total Adjustments
Net Cash Provided (Used) by
Operating Activities
(258,255) (346,099)
(315,277)
(229,389)
(258,255) (890,765)
(324,500) (54,000)
238,234
(324,500) 184,234
109,530 66,908
109,530 66,908
(604,354) (237,729)
(315,277)
(229,389) -
(1,149,020) (237,729)
(378,500) (194,136)
- 310,000
238,234 -
(140,266) 115,864
176,438
176,438
48,584
554,650
603,234
(84,357)
9,200,231
5,124, 549
14, 324, 780
1,873,158
$ 9,248,815
$ 5,679,199
$ 14,928,014
$ 1,788,801
$ 178,595
$ 1,017,100
$ 1,195,695
$ (173,616)
(8,300)
18,420
12,718
64,115
598,021
627,613
31,497
70,191
(15,220)
(14,770)
(18,522)
(19,857)
(51,920)
(383,368)
-
(97,719)
(800)
1,100
2,689
7,657
(8,300)
18,420
12,718
64,115
(206,949)
(96,179)
343,214
177,173
$ 521,809 $ 1,194,273
See Notes to Financial Statements 25
1,225,634
165,259
101,688
2,800
(29,990)
-
(38,379)
-
(435,318)
43,065
(97,719)
-
300
-
10,346
-
10,120
-
76,833
-
(303,128)
-
520,387
211,124
$ 1,716,082 $ 37,508
CITY OF SEAL BEACH
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2016
Assets:
Pooled cash and investments
Restricted assets:
Cash and investments with fiscal agents
Capital assets:
Capital assets, net of accumulated depreciation
Total Assets
Liabilities:
Accounts payable
Accrued interest
Deposits payable
Advances from the City's Sewer Fund
Due to bondholders
Long -term liabilities:
Due in one year
Due in more than one year
Total Liabilities
Net Position:
Held in trust for other purposes
Total Net Position
See Notes to Financial Statements 26
Private- Purpose
Trust Fund
Successor
Agency of the
,Agency Funds Former RDA
$ 338,845 $ 821,411
949,304 741,413
- 57,282
$ 1,288,149 1,620,106
$ 25,241
- 59,972
39,013 -
- 714,110
1,249,136 -
575,000
- 2,525,000
$ 1,288,149
3,899,323
(2,279,217)
$ (2,279,217)
CITY OF SEAL BEACH
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
YEAR ENDED JUNE 30, 2016
Additions:
Taxes
Interest and change in fair value of investments
Total Additions
Deductions:
Administrative expenses
Interest expense
Depreciation expense
Total Deductions
Changes in Net Position
Net Position - Beginning of the Year
Net Position - End of the Year
See Notes to Financial Statements 27
Private - Purpose
Trust Fund
Successor
Agency of the
Former RDA
$ 1,329,343
743
1,330,086
227,651
172,982
3,580
404,213
925,873
(3,205,090)
$ (2,279,217)
THIS PAGE INTENTIONALLY LEFT BLANK
28
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2016
I. SIGNIFICANT ACCOUNTING POLICIES
Note 1: Organization and Summary of Significant Accounting Policies
The basic financial statements of the City of Seal Beach, California (City) have been
prepared in conformity with generally accepted accounting principles (GAAP) as applied to
Government units. The Governmental Accounting Standards Board (GASB) is the accepted
standard - setting body for establishing governmental accounting and financial reporting
principles. The more significant of the City's accounting policies are described in the following
pages:
a. Description of the Reporting Entity
The City of Seal Beach (City) was incorporated on October 27, 1915, under the laws of
the State of California and enjoys all the rights and privileges applicable to a charter city.
It is governed by an elected five- member council. As required by accounting principles
generally accepted in the United States of America, these, financial statements present
the City of Seal Beach (the primary government) and its component units. The
component units discussed below are included in the reporting entity because of their
operational or financial relationships with the City of Seal Beach.
Blended Component Units:
The Seal Beach Public Financing Authority (Authority) was formed May 8, 2000,
pursuant to Articles 1 through 4 of Chapter 5, Division 7, Title 1 of the California
Government Code, to create a joint exercise of powers authority between the City of
Seal Beach and the former Seal Beach Redevelopment Agency. The City Council of
the City of Seal Beach is the governing board. Management of the primary
government has operational responsibility for the blended component unit. The
Authority was formed to undertake the financing of public capital improvements.
The City has accounted for the Authority as "blended" component unit. Despite being
legally separate, the Authority is so intertwined with the City that it is, in substance,
part of the City's operations. The Authority has not had any activity for the year
ended June 30, 2016.
The Seal Beach Cable Communications Foundation (Foundation) was organized
under the laws of the State of California on August 27; 1984, to foster and promote
civic advancement through activities related to cable communications, community
promotion, and other public services deemed approp(iate by the foundation. The
Foundation is governed by a board of directors consisting of seven members, all
appointed by the City Council of the City of Seal Beach.
The City has accounted for the Foundation as "blended" component unit. Despite
being legally separate, the Foundation is so intertwined with the City that it is, in
substance, part of the City's operations. The Foundations' budget is adopted and
approved by the City Council. Since the City Council has influence over the
governing board of the Foundation by appointment of all seven members and a
financial burden relationship exist between the City and Foundation, the Foundation
is reported as a blended component unit and no separate financial statements are
prepared.
29
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
b. Government -Wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net position and the
statement of activities) report information on all of the nonfiduciary activities of the
primary government and its component units. All fiduciary activities are reported only in
the fund financial statements. For the most part, the effect of interfund activity has been
removed from these statements. Governmental activities, which normally are supported
by taxes and intergovernmental revenues, are reported separately from business -type
activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenues
include: 1) charges to customers or applicants who purchase, use, or directly benefit from
goods, services or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational', or capital requirements of a
particular function or segment. Taxes and other items are 'properly not included among
program revenues are reported instead as general revenues.
While separate government -wide and fund financial statements are presented, they are
interrelated. The governmental activities column incorporates data from governmental
funds and internal service funds, while business -type activities incorporate data from the
government's enterprise funds. Separate financial statements are provided for
governmental funds, proprietary funds, and fiduciary funds, even though the latter are
excluded from the government -wide financial statements.
The fund financial statements provide information about the government's funds,
including its fiduciary funds and blended component units. The emphasis of fund financial
statements is on major governmental and enterprise funds,'each displayed in a separate
column. Major individual governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund and
fiduciary fund financial statements. Revenues are recorded when earned and expenses
are recorded when a liability is incurred, regardless of the timing of related cash flows.
Property taxes are recognized as revenues in the year for which they are levied. Grants
and similar items are recognized as revenue as soon as all eligibility requirements
imposed by the provider have been met. The Agency funds; however, are unlike all other
types of funds, reporting only assets and liabilities. Therefore, the Agency funds cannot
be said to have a measurement focus. They do, however, use the accrual basis of
accounting to recognize receivables and payables.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For'this purpose, the government
considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. Expenditures generally are recorded when a liability is incurred, as
under accrual accounting. However, debt service expenditures, as well as expenditures
related to compensated absences and claims and judgments, are recorded only when
payment is due. '
30
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
Property taxes, franchise fees, licenses and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as
revenues of the current fiscal period. Only the portion of special assessments receivable
due within the current fiscal period is considered to be susceptible to accrual as revenue
of the current period. All other revenue items are considered to be measurable and
available only when cash is received by the government.
The private - purpose trust funds are reported using the economic resources measurement
focus and the accrual basis of accounting.
d. Fund Classification
The City reports the following major governmental funds
General Fund - This fund is used to account for most of the day -to -day operations of the
City, which are financed from property taxes, utility user taxes, sales tax and other
general revenues. Activities financed by the General Fund include police services, fire
services, community services, general administration, engineering, and planning.
Citywide Grants Fund — This fund accounts for various Federal and State grants that are
restricted to expenditures for specific projects or purposes.
Capital Projects and Equipment Fund — This fund accounts for financial transactions of
general capital improvements.
The City reports the following major proprietary funds:
Water Utility Enterprise Fund — This fund accounts for the operation and maintenance of
the City's water distribution system.
Sewer Utility Enterprise Fund — This fund accounts for the financial transactions of the
City's waste water collection system.
Additionally, the City reports the following fund types:
Debt Service Funds — These funds account for the servicing of the long -term debt not
being financed by proprietary or nonexpendable trust funds.
Internal Service Fund — This fund accounts for vehicle replacements. Departments of the
City are charged for services provided or benefits received from these funds. For the
current year, departments were not charged for services.
Agency Funds — These funds are used to account for money and property held by the
City as trustee or custodian. They are also used to account for various assessment
districts for which the City acts as an agent for debt service activity.
31
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
Private Purpose Trust Fund — This fund accounts for the assets and liabilities of the
former redevelopment agency and is allocated revenue to pay estimated installment
payments of enforceable obligations until obligations of the former redevelopment agency
are paid in full and assets have been liquidated.
As a general rule, the effect of interfund activity has been eliminated from the
government -wide financial statements. Exceptions to this general rule are charges
between the government's proprietary funds function and various other functions of the
government. Elimination of these charges would distort the direct costs and program
revenues reported for the various functions concerned.
Amounts reported as program revenues include: 1) charges to customers or applicants
for goods, services or privileges provided, 2) operating grants and contributions, and
3) capital grants and contributions, including special assessments. Internally dedicated
resources are reported as general revenues rather than ash program revenues. Likewise,
general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing
and delivering goods in connection with a proprietary fund's principal ongoing operations.
The principal operating revenues of the enterprise funds are charges to customers for
sales and services. Operating expenses for enterprise funds include the cost of sales and
services, administrative expenses and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as nonoperating revenues and
expenses.
When both restricted and unrestricted resources are available for use, it is the
government's policy to use restricted resources first, then unrestricted resources as they
are needed.
e. Assets, Liabilities, Deferred Outflows, Deferred Inflows and Net Position or Equity
i
1. Deposits and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand
deposits and short-term investments with original maturities of three months or less
from the date of acquisition. For financial statement presentation purposes, cash and
cash equivalents are shown as both restricted and unrestricted cash and investments
in the proprietary funds.
Investments for the City, as well as for its component units, are reported at fair value.
The City's policy is generally to hold investments until maturity or until market values
equal or exceed cost. The State Treasurer's Investment Pool operates in accordance
with appropriate state laws and regulations. The reported value of the pool is the
same as the fair value of the pool shares.
2. Receivables and Payables
Activity between funds that are representative of lending /borrowing arrangements
outstanding at the end of the fiscal year are referred togas "due to /from other funds"
(i.e., the current portion of interfund loans) or "advances:to /from other funds' (i.e., the
noncurrent portion of interfund loans). All other outstanding balances between Funds
32
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
are reported as "due to /from other funds ". Any residual balances outstanding
between the governmental activities and business -type, activities are reported in the
government -wide financial statements as "internal balances'.
All trade and property tax receivables are shown net of an allowance for uncollectible
amounts. Property tax revenue is recognized on the modified accrual basis, that is, in
the fiscal year for which the taxes have been levied providing they become available.
Available means then due, or past due and receivable within the current period and
collected within the current period or expected to be collected soon enough thereafter
to be used to pay liabilities of the current period.
3. Functional Classifications
Expenditures of the Governmental Funds are classified by function. Functional
classifications are defined as follows:
General government includes legislative activities, which have a primary objective of
providing legal and policy guidelines for the City. Also !included in this classification
are those activities which provide management or support services across more than
one functional area.
Public safety includes those activities which involve the protection of people and
property.
Community development includes those activities which involve the enhancing of the
general quality of life.
Community services include those activities which involve the community cultural and
leisure activities.
Public works includes those activities which involve the maintenance and
improvement of City streets and roads, and park department development and
maintenance. I
4. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and
are recorded as prepaid items in both government -wide and fund financial
statements. These payments are recorded as expenditures when consumed rather
than when purchased. The fund balances in the governmental fund types have been
classified as nonspendable for amounts equal to the prepaid items in the fund -level
statements, since these amounts are not available for appropriation.
5. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets
(e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable
governmental or business -type activities columns in the government -wide financial
statements. Capital assets are defined by the City as assets with an initial, individual
cost of more than $5,000 and an estimated useful life in excess of two years. Such
assets are recorded at historical cost or estimated historical cost if purchased or
33
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
constructed. Donated capital assets are recorded at estimated fair market value at
the date of donation.
Capital assets are public domain (infrastructure) consisting of certain improvements
including roads, bridges, curbs, gutters, streets and sidewalks, medians, sewer and
storm drains.
The costs of normal maintenance and repairs that do not add to the value of the
asset or materially extend assets lives are not capitalized. Major outlays for capital
assets and improvements are capitalized as projects are constructed. Interest
incurred during the construction phase of capital assets of business -type activities is
included as part of the capitalized value of the assets constructed.
Property, plant, and equipment of the primary government, as well as the component
units, are depreciated using the straight -line method over the following estimated
useful lives:
Assets Years
Building and Improvements 20 -99
Machinery and Equipment 5 -50
Vehicles 4 -10
Infrastructure 20 -60
6. Deferred Outflows /Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a
separate section for deferred outflows of resources. This separate financial statement
element, deferred outflows of resources, represents a consumption of net position
that applies to a future period(s) and so will not be recognized as an outflow of
resources (expense/ expenditure) until then. The government only has two items that
qualify for reporting in this category. One is the deferred charge on refunding
reported in the statement of proprietary net position. A deferred charge on refunding
results from the difference in the carrying value of refunded debt and its reacquisition
price. This amount is deferred and amortized over the shorter of the life of the
refunded or refunding debt. The second are deferred outflows relating to the net
pension obligation reported in the government -wide statement of net position. These
outflows are the results of contributions made after the measurement period, which
are expensed in the following year, adjustments due to differences in proportions,
differences between actual contributions made and the proportionate share of the
risk pool's total contributions, and differences between expected and actual
experiences. These amounts are deferred and amortized over the expected average
remaining service life time.
In addition to liabilities, the statement of financial position will sometimes report a
separate section for deferred inflows of resources. This separate financial statement
element, deferred inflows of resources, represents an acquisition of net position that
applies to a future period(s) and thus will not be recognized as an inflow of resources
(revenue) until that time. The government has one item, which arises only under a
modified accrual basis of accounting that qualifies for reporting in this category.
Accordingly, the item, unavailable revenue, is reported only in the governmental
funds balance sheet.
tail
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
The governmental funds report unavailable revenues from two sources: taxes and
grant revenues. These amounts are deferred and recognized as an inflow of
resources in the period that the amounts become available. In addition, the
government has one item that qualifies for reporting in this category which are
deferred inflows relating to the net pension obligation reported in the
government -wide statement of net position. These inflows are the result of the net
difference between projected and actual earnings on pension plan investments,
adjustments due to differences in proportions, differences between actual
contributions made and the proportionate share of the 'risk pool's total contributions,
changes in assumptions and differences between expected and actual experiences.
These amounts are deferred and amortized over the eexpected average remaining
service life time, with the exception of the net difference between projected and
actual earnings on pension plan investments, whicH is deferred and amortized
straight -line over a five -year period.
Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted
(e.g., restricted bond or grant proceeds) and unrestricted resources. In order to
calculate the amounts to report as restricted — net position and unrestricted — net
position in the government -wide and proprietary fund, financial statements, a flow
assumption must be made about the order in which the resources are considered to
be applied. It is the City's policy to consider restricted — net position to have been
depleted before unrestricted — net position is applied. ,
8. Fund Balance Flow Assumptions
Sometimes the City will fund outlays for a particular purpose from both restricted and
unrestricted resources (the total of committed, assigned, and unassigned fund
balance). In order to calculate the amounts to report as restricted, committed,
assigned, and unassigned fund balance in the governmental fund financial
statements a flow assumption must be made about the order in which the resources
are considered to be applied. It is the City's policy to consider restricted fund balance
to have been depleted before using any of the components of unrestricted fund
balance. Further, when the components of unrestricted fund balance can be used for
the same purpose, committed fund balance is depleted first, followed by assigned
fund balance. Unassigned fund balance is applied last.
Compensated Absences
In accordance with GASB Statement No. 16, a liability is recorded for compensated
absences (unpaid vacation, sick leave and compensatory time) since the employees'
entitlement to these balances are attributable to services already rendered and it is
probable that virtually all of these balances will be liquidated by either paid time off or
payments upon termination or retirement.
Under GASB Statement No. 16 a liability is recorded fogy unused sick leave balances
only to the extent that it is probable that the unused balances will result in termination
payments. This is estimated according to the Memorandum of Understanding for
each employee bargaining group. Other amounts of unused sick leave are excluded
from the liability since their payment is contingent solely upon the occurrence of a
future event (illness) which is outside the control of the City and the employee.
35
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30. 2016
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
10. Pension Plans
For purposes of measuring the net pension liability, deferred outflows and inflows of
resources related to pensions, and pension expense, information about the fiduciary
net position and additions to /deductions from the fiduciary net position have been
determined on the same basis as they are reported by the CaIPERS Financial Office.
For this purpose, benefit payments (including refunds of employee contributions) are
recognized when currently due and payable in accordance with the benefit terms.
Investments are reported at fair value. CaIPERS audited financial statements are
publicly available reports that can be obtained at CaIPERS' website under Forms and
Publications.
11. Long Term Obligations
In the government -wide financial statements, and proprietary fund types in the fund
financial statements, long -term debt and other long -term obligations are reported as
liabilities in the applicable governmental activities, I business -type activities, or
proprietary fund type statement of net position. Bond 'premiums and discounts are
deferred and amortized over the life of the bonds using the effective interest method.
Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental fund types recognize bond premiums
and discounts, as well as bond issuance costs, during', the current period. The face
amount of debt issued is reported as other financing sources. Premiums received on
debt issuances are reported as other financing sources while discounts on debt
issuances are reported as other financing uses. Issuance costs, whether or not
withheld from the actual debt proceeds received, are reported as debt service
expenditures.
12. Fund Equity
In the fund financial statements, government funds report the following fund balance
classifications:
Nonsoendable includes amounts that cannot be spent because they are either
(a) not in spendable form or (b) legally or contractually required to be maintained
intact.
Restricted includes amounts that are constrained on the use of resources by either
(a) external creditors, grantors, contributors, or laws of regulations of other
governments or (b) by law through constitutional provisions or enabling legislation.
Assigned includes amounts that are constrained by the government's intent to be
used for specific purposes, but are neither restricted nor committed. The City
Manager, and /or the Director of Finance are authorized to assign amounts to a
specific purpose, which was established by the governing body in a minute action.
Unassigned includes the residual amounts that have not been restricted, committed,
or assigned to specific purposes.
1E
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 1: Organization and Summary of Significant Accounting Policies (Continued)
An individual governmental fund could include nonspendable resources and amounts
that are restricted or unrestricted (assigned or unassigned) or any combination of
those classifications. Restricted amounts are to be considered spent when
expenditure is incurred for purposes for which both restricted and unrestricted fund
balance is available assigned, then unassigned amounts are considered to have
been spent when an expenditure is incurred for purposes for which amounts in any of
those unrestricted fund balance classifications can be used.
13. Change in Accounting Principles
The entity implemented GASB Statement No. 72, Fair Value Measurement and
Application, during the year ended June 30, 2016. The changes resulting from this
implementation are reflected in Note 3.
II. STEWARDSHIP
Note 2: Stewardship, Compliance and Accountability
a. Property Taxes
Under California law, property taxes are assessed and collected by the counties up to
1% of assessed value, plus other increases approved by the voters. The property taxes
go into a pool, and are then allocated to the cities based on complex formulas.
Accordingly, the City recognizes as revenue only those taxes which are received within
60 days after year end.
The property tax calendar is as follows:
Lien Date: January 1
Levy Date: July 1
Due Date: First Installment- November 1
Second Installment- February 1
Delinquent Date: First Installment- December 11
Second Installment- April 11
b. Use of Estimates
The preparation of basic financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenditures during the reporting period. Actual
results could differ from those estimates.
37
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30. 2016
Note 2: Stewardship, Compliance and Accountability (Continued)
c. Deficit Fund Balances
The following non -major funds have a deficit fund balance at June 30, 2016:
Special Revenue Funds:
Street Lighting $ 13,014
Community Development Block Grant 2,409
Police Grants 35,831
III. DETAILED NOTES ON ALL FUNDS
Note 3: Cash and Investments
Cash and investments as of June 30, 2016, are classified in the accompanying financial
statements as follows:
Statement of Net Position
Cash and investments $ 46,943,160
Restricted:
Cash and investments with fiscal agent 736,887
Statement of Fiduciary Net Assets:
Cash and investments 1,160,256
Restricted:
Cash and Investments with fiscal agent 1,690,717
Total cash and investments $ 50,531,020
Cash and investments as of June 30, 2016, consist of the following:
Cash on hand
$ 6,919
Deposits with financial institutions
2,198,694
Investments
48,325,407
Total cash and investments
$ 50,531,020
Investments Authorized by California Government Code and the City's Investment Policy
The following table identifies the investment types that are authorized for the City by the
California Government Code Section 53601 or the City's investment policy, where more
restrictive. The table also identifies certain provisions of the California Government Code
(or the City's investment policy if more restrictive) that address interest rate risk, credit
risk, and concentration of credit risk. This table does not address investments of debt
proceeds held by bond trustees that are governed by the provisions of debt agreements
of the City, rather than the general provisions of the California Government Code or the
City's investment policy.
The City Treasurer may waive the collateral requirement for deposits that are fully
insured up to $250,000 by the FDIC.
IR
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 3: Cash and Investments (Continued)
Authorized Investment Type
Maximum
Maturity
Maximum
Percentage of
Portfolio*
Maximum
Investment in
One Issuer*
U S treasury securities
5 years
100%
None
U S agency securities
5 years
20%
None
Obligations of the Slate of
None
California or any local agency
5 years
100%
None
Registered treasury notes or
bonds of any of the 49 states
in addition to California
5 years
100%
None
Bankers' acceptance
180 days
40°%
5°%
Commercial paper
270 days
25%
10°%
Non - negotiable CDs
5 years
100°%
None
Negotiable CDs
5 years
30%
None
Medium tens notes
5 years
30%
None
Money market mutual funds
89 days
15%
10%
Local Agency Investment Fund
$50 Million
(LAIF)
None
100%
peraccount
*Based on state law requirements or investment policy requirements whichever is more
restrictive.
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt
agreements, rather than the general provisions of the Califomia Government Code or the
City's investment policy. The following table identifies the investment types that are
authorized for investments held by bond trustees. The ;table also identifies certain
provisions of these debt agreements that address interest rate risk, credit risk, and
concentration of credit risk.
Maximum
Authorized Investment Type Maturity
U S treasury securities None
U S agency securities
None
Bankers' acceptance
180 days
Commercial paper
270 days
Money market mutual funds
89 days
Investment contracts
30 years
Local Agency Investment
None
Fund (LAIF)
None
*Based on state law requirements or investment
restrictive.
Disclosures Relating to Interest Rate Risk
Maximum
Percentage of
Portfolio*
Maximum
Investment in
One Issuer*
None
None
None
None
None
30%
None
None
None
None
None
None
None None
policy requirements whichever is more
Interest rate risk is the risk that changes in market interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the
greater the sensitivity of its fair value is to changes in market interest rates. One of the
ways that the City manages its exposure to interest rate risk is by purchasing a
combination of shorter term and longer term investments and by timing cash flows from
maturities so that a portion of the portfolio is maturing or coming close to maturity evenly
over time as necessary to provide the cash flow and liquidity' needed for operations.
39
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 3: Cash and Investments (Continued)
Information about the sensitivity of the fair values of the City's investments
(including investments held by bond trustees) to market interest rate fluctuations is
provided by the following table that shows the distribution of the City's investments by
maturity.
Investment Type
U.S. Agency Securities
U.S. Treasury Securities
Medium -term notes
Obligations of the State of California
or any local agency
certificates of Deposit
Registered Treasury Notes or Bonds
of Any Other 49 Stales
Local Agency Investment Fund (LAIF)
Held by Fiscal Agent:
Money Market Mutual Funds
Total
Credit Risk
555,640
6,054,266
321,335 -
19,695,717 19,695,717
555,640
3,148,712 2,905,554
321,335
2,426,785 2,426,785 - - -
$ 48,325,407 $ 22,122,502 $ 3,148,712 $ 11,749,495 $ 11,304,698
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation
to the holder of the investment. This is measured by the assignment of a rating by a
nationally recognized statistical rating organization. Presented below is the minimum
rating required by (where applicable) the California Government code or the City's
investment policy, or debt agreements, and the actual rating as of the year -end for each
investment type:
Remaining as of Year End
Minimum I
Investment Type Legal Rating Total AA- to AA+ A to A+ A- Unraled
U.S. Agency Securities
Remaining Maturity (in Months)
$ 5,340,855
6 months or
6 months to 1 1 year to 3
3 years to 5
Total less
year years
years
$ 5,340,855 $ -
$ - $ 5,006,713
$ 334,142
10,583,833 -
- 953,887
9,629,946
3,346,976 -
- 2,006,366
1,340,610
555,640
6,054,266
321,335 -
19,695,717 19,695,717
555,640
3,148,712 2,905,554
321,335
2,426,785 2,426,785 - - -
$ 48,325,407 $ 22,122,502 $ 3,148,712 $ 11,749,495 $ 11,304,698
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation
to the holder of the investment. This is measured by the assignment of a rating by a
nationally recognized statistical rating organization. Presented below is the minimum
rating required by (where applicable) the California Government code or the City's
investment policy, or debt agreements, and the actual rating as of the year -end for each
investment type:
Remaining as of Year End
Minimum I
Investment Type Legal Rating Total AA- to AA+ A to A+ A- Unraled
U.S. Agency Securities
N/A
$ 5,340,855
$ 5,340,855
$ - $ - $ -
U.S. Treasury Securities
N/A
10,583,833
10,583,833
- - -
Medium -term notes
A
3,346,976
1,557,799
1,026,207 762,970 -
Obligations of the State of califomia
or any local agency
N/A
555,640
414,522
- - 141,118
certificates of Deposit
N/A
6,054,266
-
- - 6,054,266
Registered Treasury Notes or Bonds
of Any Other 49 States
N/A
321,335
321,335
- - -
Local Agency Investment Fund (LAIF)
NIA
19,695,717
-
- - 19,695,717
Held by Fiscal Agent:
Money Market Mutual Funds
N/A
2,426,785
-
- - 2,426,785
Total
48,325,407
18,21T, 4
1,026,207 762,970 28,317,886
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository
financial institution, a government will not be able to recover its deposits or will not be
able to recover collateral securities that are in the possession of an outside party. The
custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty (e.g., broker - dealer) to a transaction, a government will not be able to
recover the value of its investment or collateral securities that are in the possession of
another party.
40
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 3: Cash and Investments (Continued)
The California Government Code and the City's investment policy do not contain legal or
policy requirements that would limit the exposure to custodial credit risk for deposits or
investments, other than the following provision for deposits: The California Government
Code requires that a financial institution secure deposits made by state or local
governmental units by pledging securities in an undivided collateral pool held by a
depository regulated under state law (unless so waived by the governmental unit). The
market value of the pledged securities in the collateral pool must equal at least 110% of
the total amount deposited by the City. California law also allows financial institutions to
secure City deposits by pledging first trust deed mortgage notes having a value of
150% of the secured City deposits. Investments held by a bond trustee are selected
under the terms of the applicable trust agreement. The trustee acquires the investment
and holds the investment on behalf of the reporting government.
Concentration of Credit Risk
The investment policy of the City contains no limitations, on the amount that can be
invested in any one issuer beyond what is stipulated by the California Government Code.
The City did not have any investments in any one issuer (other than Certificates of
Deposit, mutual funds, and external investment pools) that represents 5% or more of total
City investments.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by California Government Code Section 16429 under the oversight of the
Treasurer of the State of California. The fair value of the City's investment in this pool is
reported in the accompanying financial statements at amounts based upon the City's
pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to
the amortized cost of that portfolio). The balance available for withdrawal is based on the
accounting records maintained by LAIF, which are recorded on an amortized cost basis.
Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy
established by generally accepted accounting principles. The hierarchy is based on the
valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted
prices in active markets for identical assets; Level 2 inputs are significant other
observable inputs; Level 3 inputs are significant unobservable inputs. The City has the
following recurring fair value measurements as of June 30, 2016:
Lexel
Investment Type Totals 1 2 3
U.S. Agency Securities $ 5,340,854 $ 5,340,854 $ - $ -
U.S. Treasury Securities 10,583,833 10,583,833 - -
Medium -tenn notes 3,346,977 - 3,346,977 -
Obligations of the Stale of California
or any local agency
Certificates of Deposit
Registered Treasury Notes or Bonds
of Any Other 49 Slates
Local Agency Investment Fund (LAIF)
Held by Fiscal Agent:
Money Markel Mutual Funds
Total Investments
555,640
6,054,266
321,335
19,695,717
555,640
6,054,266
321,335
19,695,717
2,426,785 2,426,785 - -
$ 48,325,407 $ 18,351,472 $ 29,973,935 $ -
41
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 3: Cash and Investments (Continued)
Deposits and Federal Agency Securities classified in Level 1 of the fair value hierarchy
are valued using prices quoted in active markets for those securities. Local Agency
Investment Funds, Certificates of Deposit, Obligations of the State or California or any
local agency, and Registered Treasury Notes or Bonds of any other 49 States are
classified in Level 2 of the fair value hierarchy are value using institutional bond quotes or
specified fair market value factors.
Note 4: Interfund Receivable, Payable and Transfers
The composition of interfund balances as of June 30, 2016, was as follows:
Due From and To Other Funds
Due to Other Funds:
Nonmajor
Funds Governmental
Due From Other Funds:
Total
General fund $ 125,298 $ 125,298
These interfund balances are a result of short-term borrowings to cover deficit cash balances
in the Police Asset Forfeiture Fund and Police Grants Fund from the General Fund at
June 30, 2016.
Intertund Transfers
Transfers totaling $1,202,636 from the Water Utility Fund, Sewer Utility Fund, Internal Service
Funds, and various nonmajor governmental funds were made to the General Fund primarily
to reimburse the General Fund for certain administrative costs.
The General Fund, Citywide Grants Fund and Nonmajor Governmental Funds transferred
$2,619,901 to the Capital Projects and Equipment Fund for infrastructure projects such as
street improvements, public work facilities, and storm drain improvements.
The General Fund transferred $1,780,407 to various nonmajor governmental funds to pay for
debt service and to cover other budgeted amounts.
The General Fund transferred $310,000 to the Internal Service Fund to reimburse the fund
for vehicle and equipment purchases.
42
Transfers Out:
Internal
Nonmajor
General
City Wide
Water
Sewer
SeMce
Governmental
Transfers in:
Fund
Grant
Utility
Utility
Fund
Funds
Total
Fund
General Fund
$ -
$ -
$ 324,500
$ 54,000
$ 194.136
$ 630,000
$ 1,202,636
Capital Projects and
Equipment Fund
1,933,865
43,510
-
-
-
642,526
2,619,901
Nonmajor Governmental Funds
1,780,407
-
-
-
-
-
1,780,407
Internal SerNce Fund
310,000
-
-
-
-
-
310,000
Total
$ 4,024,272
$ 43,510
$ 324,500
$ 54,000
$ 194,136
$ 1,272,526
$ 5,912,944
Transfers totaling $1,202,636 from the Water Utility Fund, Sewer Utility Fund, Internal Service
Funds, and various nonmajor governmental funds were made to the General Fund primarily
to reimburse the General Fund for certain administrative costs.
The General Fund, Citywide Grants Fund and Nonmajor Governmental Funds transferred
$2,619,901 to the Capital Projects and Equipment Fund for infrastructure projects such as
street improvements, public work facilities, and storm drain improvements.
The General Fund transferred $1,780,407 to various nonmajor governmental funds to pay for
debt service and to cover other budgeted amounts.
The General Fund transferred $310,000 to the Internal Service Fund to reimburse the fund
for vehicle and equipment purchases.
42
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 5: Advance to Successor Agency
In 2012, the Sewer Fund advanced $1,200,000 to the former, redevelopment agency. This
was subsequently denied by the Department of Finance (DOF). The City appealed the
DOF decision and, in 2014, this advance was approved. Interest on the advance is consistent
with the Local Agency Investment Fund (LAIF) interest rate at the time the Oversight Board
made the finding that the advance was for legitimate redevelopment purposes, which is at
0.00367 %. The balance of the advance at June 30, 2016, was $714,110.
Note 6: Capital Assets
Capital asset activity for the year ended June 30, 2016, was as follows:
Beginning Transfers
Balance of CIP Additions Deletions
Governmental Activities:
Capital assets, not being depreciated
Land $ 10,519,847 $ - $ - $
Intangible asset - land easement 900,000 - -
Construction -in- progress 1,023,735 (211,462) 1,665,107
Total Capital Assets,
Not Being Depreciated
Capital assets, being depreciated:
Buildings and improvements
Machinery and equipment
Vehicles
Infrastructure
Total Capital Assets,
Being Depreciated
Less accumulated depreciation:
Buildings and improvements
Machinery and equipment
Vehicles
Infrastructure
Total Accumulated
Depreciation
Total Capital Assests,
Being Depreciated, Net
Governmental Activities
Capital Assets, Net
12,443,582 (211,462) 1,665,107
Ending
Balance
$ 10,519,847
900,000
2,477,380
13,897,227
14,652,927
211,462 -
- 14,864,389
2,210,114
- -
- 2,210,114
2,032,926
- 425,736
- 2,458,662
82,090,619
-
- 82,090,619
100,986,586
211,462 425,736 .
- 101,623,784
5,014,552
- 352,385
- 5,366,937
1,802,957
- 104,923
- 1,907,880
1,062,930
- 176,155
- 1,239,085
27,577,794
- 2,234,367
- 29,812,161
35,458,233 - 2,867,830 - 38,326,063
65,528,353 211,462 (2,442,094)' - 63,297,721
$ 77,971,935 $ - $ (776,987)x, $ - $ 77,194,948
43
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 6: Capital Assets (Continued)
Depreciation expense was charged in the following functions in the Statement of Activities for
the year ended June 30, 2016, as follows:
Governmental Activities:
General Government
Public Safety
Public Works
Community development
Internal Service funds
Total Depreciation Expense - Governmental Activities
-
Beginning Transfers of
5,553
Balance CIP Increases
Business -type Activities:
249,768 -
Capital assets, not being depreciated:
420,651 -
Construction -in- progress - water
$ 702,494 $ - $ 204,253 $
Construction -in- progress - sewer
7,466,425 (7,387,298) 50,130
Total Capital Assets,
Not Being Depreciated
Capital assets, being depreciated:
Building and improvements -water
Machinery and equipment - water
Machinery and equipment - sewer
Vehicles - water
Vehicles - sewer
Infrastructure - water
Infrastructure - sewer
Total Capital Assets,
Being Depreciated
Less accumulated depreciation:
Building and improvements - water
Machinery and equipment - water
Machinery and equipment - sewer
Vehicles - water
Vehicles - sewer
Infrastructure - water
Infrastructure - sewer
Total Accumulated
Depreciation
Total Capital Assets,
Being Depreciated, Net
Business -type Actimties
Capital Assets, Net
8,168,919 (7,387,298) 254,383
73,284 -
-
599,599 -
5,553
785,802 -
-
249,768 -
48,949
420,651 -
-
31,653,574 -
-
30,373,873 7,387,298
295,969
64,156,551 7,387,298 350,471
i
$ 216,043
177,991
2,284,822
23,715
165,259
$ 2,867,830
Ending
Decreases Balance
- $ 906,747
- 129,257
- 1,036,004
73,284
605,152
785,802
298,717
420,651
31,653,574
38,057,140
71,894,320
71,595
- 675.
- 72,269
471,287
- 16,060
- 487,347
206,227
- 14,929
- 221,156
162,091
- 15,947
- 178,038
109,982
- 45,991
- 155,973
15,907,257
- 565,339
- 16,472,596
14,516,631
- 554,624
- 15,071,256
31,445,070 - 1,213,565 - 32,658,635
32,711,481 7,387,298 (863,094) - 39,235,685
$ 40,880,400 $ - $ (608,711) 1 $
$ 40,271,689
Depreciation expense was charged in the following programs of the primary government for
the year ended June 30, 2016, as follows:
Business -type Activities:
Water $ 598,021
Sewer 615,544
Total Depreciation Expense - Business -type Activities $ 1,213,565
44
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 7: Long -Term Debt
The following is a schedule of changes in long -term debt of, the City for the year ended
June 30, 2016:
Balance Due Within
Additions Deletions June 30, 2016 One Year
$ - $ 950,000 $ 3,461,000 $ 1,047,000
- 420,000 3,255,000 420,000
- 120,150 1,368,208 124,270
165,768 102,695 377,898 23,451
550,672 528,697 1,228,082 342,732
$ 716,440 $ 2,121,542 $ 9,690,188 $ 1,957,453
1
2008 Taxable Pension Obligation Bonds
I
On June 1, 2008, the City issued Taxable Pension Obligation Bonds for the purpose
of refunding the City's obligations to the California Public Employees' Retirement
System for pension benefits accruing for its members in the amounts of $2,170,000
and $8,775,000 for Series 2008A -1 and 2008A -2, respectively. Interest rate on the
bonds varies from 4.9% to 5.66 %. Payments have been presented as expenditures
in the fund financial statements and as prepaid assets in the government -wide
financial statements. The balance in the Series 2008A -1 has been paid off as of
June 30, 2016. The balance in the 2008A -2 bonds at June 30, 2016, was
$3,461,000.
2008 Taxable Pension
Year Ending Obligation Bonds, Series A -2
June 30, Principal Interest
2017 $ 1,047,000 $ 1� 169,059
2018 1,151,000 1 107,153
2019 1,263,000 I 39,129
Total $ 3,461,000 $ 315,341
I
45
Balance
July 1, 2015
2008 Taxable Pension Obligation Bonds,
Series A -2
$ 4,411,000
2009 Lease Revenue Bands
3,675,000
Municipal Finance Corporation
1,488,358
Claims payable
314,825
Compensated absences
1,206,107
Total
$ 11,095,290
Balance Due Within
Additions Deletions June 30, 2016 One Year
$ - $ 950,000 $ 3,461,000 $ 1,047,000
- 420,000 3,255,000 420,000
- 120,150 1,368,208 124,270
165,768 102,695 377,898 23,451
550,672 528,697 1,228,082 342,732
$ 716,440 $ 2,121,542 $ 9,690,188 $ 1,957,453
1
2008 Taxable Pension Obligation Bonds
I
On June 1, 2008, the City issued Taxable Pension Obligation Bonds for the purpose
of refunding the City's obligations to the California Public Employees' Retirement
System for pension benefits accruing for its members in the amounts of $2,170,000
and $8,775,000 for Series 2008A -1 and 2008A -2, respectively. Interest rate on the
bonds varies from 4.9% to 5.66 %. Payments have been presented as expenditures
in the fund financial statements and as prepaid assets in the government -wide
financial statements. The balance in the Series 2008A -1 has been paid off as of
June 30, 2016. The balance in the 2008A -2 bonds at June 30, 2016, was
$3,461,000.
2008 Taxable Pension
Year Ending Obligation Bonds, Series A -2
June 30, Principal Interest
2017 $ 1,047,000 $ 1� 169,059
2018 1,151,000 1 107,153
2019 1,263,000 I 39,129
Total $ 3,461,000 $ 315,341
I
45
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 7: Long -Term Debt (Continued)
2009 Series Lease Revenue Bonds
On January 14, 2009, the City issued 2009 Series Lease Revenue Bonds for the
purpose of financing the construction of a new fire station in the City in the amount of
$6,300,000 Interest rate on the bonds is 3.71 %.
The balances of the 2009 Series Lease Revenue bonds at June 30, 2016, were
$3,255,000.
Year Ending
June 30,
2017
2018
2019
2020
2021
2022 -2024
Total
Municipal Finance Corporation Loan
2009 Series Lease
Revenue Bonds
Principal
$ 420,000
420,000
420,000
420,000
420,000
1,155,000
$ 3,255,000
Interest
$ 114,917
99,335
83,753
68,171
52,589
64,276
$ 483,042
On May 8, 2014, the City entered into a Lease with Option to Purchase agreement
with Municipal Finance Corporation relating to a capital project to be performed by
Climatec LLC in the amount of $1,546,931. Interest rate on the loan is 3.40 %.
The balance of the Municipal Finance Corporation Loan at June 30, 2016, was
$1,368,208.
Year Ending
June 30,
2017
2018
2019
2020
2021
2022 -2026
Total
Compensated Absences Payable
Municipal Finance Corporation
Loan
Principal
$ 124,270
128,531
132,938
137,497
142,211
702,761
$ 1,368,208
Interest
$ 45,472
41,211
36,803
32,245
27,530
61,076
$ 244,337
The City's policy relating to compensated absences is described in Note 1 of the
Notes to Financial Statements. This liability will be paid in future years from future
resources. The outstanding liability for compensated absences earned was
$1,228,082 governmental and $128,455 business -type totaling $1,356,537. The
general fund typically has been used to liquidate the liability for compensated
absences. '
at
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 7: Long -Term Debt (Continued)
Claims Payable
The City is exposed to various risks of loss to its operation, including losses
associated with errors and omissions, injuries to employees and members of the
public. The claims and judgments reported in the Government -wide financial
statements is based on the requirements of Governmental Accounting Standards
Board No. 10, which requires that a liability for claims be reported if information prior
to the issuance of the financial statements indicates that it is probable that liability
has been incurred at the date of the financial statements and the amount of loss can
be reasonably estimated. As of June 30, 2016, claims, payable including estimated
claims for incurred but not reported claims, amounted to $377,898.
The following is a summary of changes in Proprietary Fund long -term debt for the year ended
June 30, 2016:
Current Year
Balance
Beginning of
Claims and
July 1, 2015
Balance at
Fiscal Year
Changes in
Claim
Fiscal Year
Liability
Estimates
Payments',
End
$ 329,048
$ 8,739
$ (22,962)
$ 314,825
314,825
165,768
(102,695)
377,898
The following is a summary of changes in Proprietary Fund long -term debt for the year ended
June 30, 2016:
A description of Proprietary Fund long -term debt outstanding as of June 30, 2016, follows:
2011 Sewer System Revenue Refunding Bonds
I
On March 2, 2011, the City issued 2011 Sewer System Revenue Refunding Bonds in
the amount of $3,310,000 to pay off the 2000 Sewer System Certificates of
Participation. The 2000 Sewer System Certificates of Participation were issued to
provide for improvements to the City's sewer system.
Interest rate on the 2011 Sewer System Revenue Refunding Bonds is 4.8 %, and the
balance of the 2011 Sewer System Revenue Refunding Bonds at June 30, 2016,
was $2,565,000.
47
Balance
Balance
Due Within
July 1, 2015
Additions Deletions
June 30, 2016
One Year
2011 Sewer Revenue Refunding Bonds
$ 2,705,000
$ - $ 140,000
$ 2,565,000
$ 145,000
Sewer Capital Improvement Project #1
2,309,073
- 1109,744
2,199,329
112,598
Sewer Capital Improvement Project #2
1,584,238
- 65,533
1,518,705
67,236
Compensated absences
118,335
165,260 155,140
128,455
29,872
Total
$ 6,716,646
$ 165,260 $', 470,417
$ 6,411,489
$ 354,706
A description of Proprietary Fund long -term debt outstanding as of June 30, 2016, follows:
2011 Sewer System Revenue Refunding Bonds
I
On March 2, 2011, the City issued 2011 Sewer System Revenue Refunding Bonds in
the amount of $3,310,000 to pay off the 2000 Sewer System Certificates of
Participation. The 2000 Sewer System Certificates of Participation were issued to
provide for improvements to the City's sewer system.
Interest rate on the 2011 Sewer System Revenue Refunding Bonds is 4.8 %, and the
balance of the 2011 Sewer System Revenue Refunding Bonds at June 30, 2016,
was $2,565,000.
47
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 7: Long -Term Debt (Continued)
Sewer Capital Improvement Project Loan #1
On April 6, 2011, the City entered into an agreement' with the Clean Water State
Revolving Fund Control Board for construction of theiSewer Capital Improvement
project. The City may borrow up to $2,644,356 or the eligible costs of the project,
whichever is less. At June 30, 2016, the State Water Resources Control Board had
disbursed $2,644,015. The loan has an interest rate ofi2.6% with maturities through
2031. The outstanding balance at June 30, 2016, is $2,199,329.
2011 Sewer System Revenue
Refunding
Bonds
Year Ending
June 30,
Principal
Interest
2017
$ 145,000
$ 121,440
2018
150,000
114,360
2019
160,000
107,040
2020
170,000
99,240
2021
175,000
91,080
2022 -2026
1,025,000
318,000
2027 -2029
740,000
63,480
Total
$ 2,565,000
$ 914,640
Sewer Capital Improvement Project Loan #1
On April 6, 2011, the City entered into an agreement' with the Clean Water State
Revolving Fund Control Board for construction of theiSewer Capital Improvement
project. The City may borrow up to $2,644,356 or the eligible costs of the project,
whichever is less. At June 30, 2016, the State Water Resources Control Board had
disbursed $2,644,015. The loan has an interest rate ofi2.6% with maturities through
2031. The outstanding balance at June 30, 2016, is $2,199,329.
Sewer Capital Improvement Project Loan #2
On April 6, 2011, the City entered into an agreement! with the Clean Water State
Revolving Fund Control Board for construction of thelSewer Capital Improvement
project. The City may borrow up to $2,125,112 or the eligible costs of the project,
whichever is less. At June 30, 2016, the State Water Resources Control Board had
disbursed $1,652,742. The loan has an interest rate of 2.6% with maturities through
2031. The outstanding balance at June 30, 2016, is $1,518,705.
ED
Sewer Capital Improvement
Project
Loan #1
Year Ending
June 30,
Principal
Interest
2017
$ 112,598
$ 57,183
2018
115,525
54,255
2019
118,529
51,251
2020
121,611
48,170
2021
124,772
45,008
2022 -2026
674,244
174,658
2027 -2031
766,572
�'i 82,328
2032
165,478
4,302
Total
$ 2,199,329
$ 517,155
Sewer Capital Improvement Project Loan #2
On April 6, 2011, the City entered into an agreement! with the Clean Water State
Revolving Fund Control Board for construction of thelSewer Capital Improvement
project. The City may borrow up to $2,125,112 or the eligible costs of the project,
whichever is less. At June 30, 2016, the State Water Resources Control Board had
disbursed $1,652,742. The loan has an interest rate of 2.6% with maturities through
2031. The outstanding balance at June 30, 2016, is $1,518,705.
ED
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 7: Long -Term Debt (Continued)
Sewer Capital
Improvement
Year Ending
Project Loan #2
June 30,
Principal
Interest
2017
$ 67,236
$ 39,486
2018
68,985
37,738
2019
70,778
35,945
2020
72,618
34,104
2021
74,506
32,216
2022 -2026
402,617
130,997
2027 -2031
457,751
75,863
2032 -2034
304,214
15,954
Total
$ 1,518,705
$ 402,303
Note 8: Debt Issued Without Government Commitment
Surfside Colony Reassessment District No. 2000 -1
The Surfside Colony Reassessment District No. 20011 -1 was formed to finance
improvements within the Surfside Colony and to refundi the outstanding unmatured
portion of the Assessment District 94 -1 (Surfside Colony) limited obligation improvement
bonds. The debt service payments on the bonds will be included on property tax bills
within the reassessment district and will be collected by the City and then forwarded to
the paying agent. A Reserve Fund was established in which the City may make
withdrawals enough to cover any delinquent payments on the reassessments. The City
has no liability for the bonds beyond the amount held in the Reserve Fund. The bonds
are not secured by the general taxing power of the City, county, state, or any political
subdivision of the state nor have the City, county, state, or any political subdivision
thereof pledged its full faith and credit for the repayment thereof. Since the City has no
liability for these bonds, the reserve fund and debt service monies are stored in the
Agency Fund and the debt is not included in the financial statements. The bonds were
paid off in the year ended June 30, 2016.
Heron Pointe Community Facilities District No. 2002 -01
The Heron Pointe Community Facilities District No. 2002-01 was formed to finance public
facilities improvements within Heron Pointe. The debt service payments on the bonds will
be included on property tax bills within community facilities district and will be collected by
the City and then forwarded to the paying agent. A Reserve Fund was established in
which the City may make withdrawals enough to cover any delinquent payments on the
reassessments. The City has no liability for the bonds beyond the amount held in the
Reserve Fund. The bonds are not secured by the general taxing power of the City,
county, state, or any political subdivision of the state nor has the City, county, state, or
any political subdivision thereof pledged its full faith and credit for the repayment thereof.
Since the City has no liability for these bonds, the reserve fund and debt service monies
are stored in the Agency Fund and the debt is not included in the financial statements.
The outstanding balance at June 30, 2016, was $3,480,000.
49
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 8: Debt Issued Without Government Commitment (Continued)
Pacific Gateway Business Center Community Facilities District No 2005 -01
The Pacific Gateway Business Center Community Facilities District No. 2005 -01 (District)
was formed to finance public facilities within the District. The debt service payments on
the bonds will be included on property tax bills within the community facilities district and
will be collected by the City and then forwarded to the paying agent. A Reserve Fund was
established in which the City may make withdrawals enough to cover any delinquent
payments on the reassessments. The City has no liability for the bonds beyond the
amount held in the Reserve Fund. The bonds are not secured by the general taxing
power of the City, county, state, or any political subdivision of the state nor has the City,
county, state, or any political subdivision thereof pledged its full faith and credit for the
repayment thereof. Since the City has no liability for theselbonds, the reserve fund and
debt service monies are stored in the Agency Fund and the debt is not included in the
financial statements. The outstanding balance at June 30, 2016, was $8,450,000.
Note 9: Retirement Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City's
separate Safety (police) and Miscellaneous (all other) Employee Pension rate plans,
cost - sharing multiple employer defined benefit pension rate plans administered by the
California Public Employees' Retirement System (CalPERS). Benefit provisions under the
Plan are established by State statute and City resolution. CaIPERS issues publicly available
reports that include a full description of the pension plans regarding benefit provisions,
assumptions and membership information that can be found on the CalPERS website
Benefits Provided
CaIPERS provides service retirement and disability benefits, annual cost of living adjustments
and death benefits to plan members, who must be public employees and beneficiaries.
Benefits are based on years of credited service, equal to one year of full time employment.
Members with five years of total service are eligible to retire at age 50 with statutorily reduced
benefits. All members are eligible for non -duty disability benefits after 10 years of service.
The death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit,
or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan
are applied as specified by the Public Employees' Retirement Law.
6111
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 9: Retirement Plans (Continued)
* Closed to new entrants
Contribution Description
Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that
the employer contribution rates for all public employers be determined on an annual basis by
the actuary and shall be effective on the July 1 following notice of a change in the rate. The
total plan contributions are determined through CaIPERS' annual actuarial valuation process.
The actuarially determined rate is the estimated amount necessary to finance the costs of
benefits earned by employees during the year, with an additional amount to finance any
unfunded accrued liability. The employer is required to contribute the difference between the
actuarially determined rate and the contribution rate of employees. Employer contribution
rates may change if plan contracts are amended. It is the responsibility of the employer to
make necessary accounting adjustments to reflect the impact due to any Employer -Paid
Member Contributions or situations where members are paying a portion of the employer
contribution.
For the year ended June 30, 2016, the contributions recognized as a reduction to the total net
pension liability for the Plan was $1,956,992.
Pension Liabilities, Pension Expense and Deferred Outflows and Deferred Inflows of
Resources Related to Pensions
As of June 30, 2016, the City reported net pension liabilities /(assets) for its proportionate
shares of the net pension liability of each Rate Plan as follows:
Proportionate Share of Net Pension Liability/(Asset
Miscellaneous Rate Plan $
Cost sharing Rate Plans
Miscellaneous PEPRA Rate Plan
(1,394)
Safety Rate Plan
PEPRA
Total Plan Net Pension Liability: $
24,035,859
Miscellaneous
Miscellaneous
Safety Rate
Rate Plan*
Rate Plan
Plan*
Prior to
January 1, 2013
Prior to
Hire date
January 1, 2013
and after
January 1, 2013
Benefit formula
2% @ 55
2% @ 62
3% @ 50
Benefit vesting schedule
5 years service
5 years service
5 years service
Benefit payments
monthly for life
monthly for life
monthly for life
Retirement age
minimum 50 yrs
minimum 52 yrs
minimum 50 yrs
1.426% - 2.418 %,
1.000% - 2.500 %,
Monthly benefits, as a % of
50 yrs - 63+ yrs,
52 yrs - 67+ yrs,
eligible compensation
respectively
respectively
3.000 %, 50+ yrs
Required employee
contribution rates
6.891%
6.500%
8.986%
Required employer
,
contribution rates
9.353%
6.730%
20.230%
* Closed to new entrants
Contribution Description
Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that
the employer contribution rates for all public employers be determined on an annual basis by
the actuary and shall be effective on the July 1 following notice of a change in the rate. The
total plan contributions are determined through CaIPERS' annual actuarial valuation process.
The actuarially determined rate is the estimated amount necessary to finance the costs of
benefits earned by employees during the year, with an additional amount to finance any
unfunded accrued liability. The employer is required to contribute the difference between the
actuarially determined rate and the contribution rate of employees. Employer contribution
rates may change if plan contracts are amended. It is the responsibility of the employer to
make necessary accounting adjustments to reflect the impact due to any Employer -Paid
Member Contributions or situations where members are paying a portion of the employer
contribution.
For the year ended June 30, 2016, the contributions recognized as a reduction to the total net
pension liability for the Plan was $1,956,992.
Pension Liabilities, Pension Expense and Deferred Outflows and Deferred Inflows of
Resources Related to Pensions
As of June 30, 2016, the City reported net pension liabilities /(assets) for its proportionate
shares of the net pension liability of each Rate Plan as follows:
Proportionate Share of Net Pension Liability/(Asset
Miscellaneous Rate Plan $
j7,780,130
Miscellaneous PEPRA Rate Plan
(1,394)
Safety Rate Plan
16,257,123
Total Plan Net Pension Liability: $
24,035,859
51
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30. 2016
Note 9: Retirement Plans (Continued)
The City's net pension liability for each rate plan is measured as the proportionate share of
the net pension liability. The net pension liability of each of the rate plans is measured as of
June 30, 2015, and the total pension liability for each rate plan used to calculate the net
pension liability was determined by an actuarial valuation as of June 30, 2014, rolled forward
to June 30, 2015, using standard update procedures. The City's, proportion of the net pension
liability was based on a projection of the City's long -term share of contributions to the pension
plan relative to the projected contributions of all participating employers, actuarially
determined. The City's proportionate share of the net pension liability for each rate plan as of
June 30, 2013 and 2014, was as follows:
For the year ended June 30, 2016, the City recognized a total pension expense of
$1,715,902 for all rate plans in total. At June 30, 2016, the City reported deferred outflows
and deferred inflows of resources related to pensions as follows:
52
PEPRA
Miscellaneous
Miscellaneous
Safety Rate
Rate Plan
Rate Plan
Plan
Total Plan
Proportion -June 30, 2014
0.29315%
0.00001%1
0.31522%
0.60838%
Proportion - June 30, 2015
0.28359%
-0.00005%;
0.39455%
0.67809%
Change - Increase (Decrease)
- 0.00956%
- 0.00006% i
0.07933%
0.06971%
For the year ended June 30, 2016, the City recognized a total pension expense of
$1,715,902 for all rate plans in total. At June 30, 2016, the City reported deferred outflows
and deferred inflows of resources related to pensions as follows:
52
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 9: Retirement Plans (Continued)
Deferred Outflow Deferred Inflow of
of Resources Resources
Miscellaneous Rate Plan
Change in assumptions $
Pension contributions subsequent to
measurement date
Difference between expected and actual
experiences
Differences between actual contributions and
the proportionate share of contributions
Net difference between projected and actual
earnings on pension plan investments
Adjustment due to difference in proportions
Tote I
Miscellaneous PEPRA Rate Plan
Change in assumptions $
Pension contributions subsequent to
measurement date
Difference between expected and actual
experiences
Differences between actual contributions and
the proportionate share of contributions
Net difference between projected and actual
earnings on pension plan imestments
Adjustment due to difference in proportions
Tote I
Safety Rate Plan
- $ 306,840
666,327
32,432
128,796
153,823
- 1,026,287
698,759 1,615,746
20,426
67,928
2,159
21,948
- 10,240
55,761 -
$ 147,796 $ 30,666
Change in assumptions $
Pension contributions subsequent to
measurement date
Difference between expected and actual
experiences
Differences between actual contributions and
the proportionate share of contributions
Net difference between projected and actual
eamings on pension plan imestments
Adjustment due to difference in proportions
Tote I
Total Plan
- $ 891,044
1,476,452
193,732
142,169
- 451,587
2,182, 996 -
$ 3,659,448 $ 1,678,532
$ 4,506,003 $ 3,324,944
$2,210,707 reported as deferred outflows of resources related to contributions subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the year
ended June 30, 2017. Other amounts reported as deferred outflows or deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
53
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 9: Retirement Plans (Continued)
Measurement
Period ended
June 30:
Deferred Outflowst(inflows) of Resources
PEPRA
Miscellaneous
Miscellaneous
Safety Rate
Rate Plan
Rate Plan
Plan
Total Plan
2016
$ (644,876)
$ 16,344
$ 9,305 $
(619,227)
2017
(635,060)
14,725
7,530
(612,805)
2018
(499,999)
5,044
(66,722)
(561,677)
2019
196,621
13,089
554,351
764,061
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
For the measurement period ended June 30, 2015 (the measurement date), the total pension
liability was determined by rolling forward the June 30, 2014 total pension liability. The
June 30, 2014 and the June 30, 2015, total pension liabilities were based on the following
actuarial methods and assumptions:
Actuarial Cost Method
Actuarial Assumptions
Discount Rate
Inflation
Salary Increases
Imestment Rate of Return
Mortality Rate Table (1)
Post Retirement Benefit
Increase
Entry Age Normal in accordance with the
requirements of GASB Statement No. 68
7.65%
2.75%
Vanes by Entry Age and Service
7.65% Net of Pension Plan Investment and
Administrative Expenses; includes Inflation
Derived using CaIPERS' Membership Data
for all Funds '
Contract COLA up to 2.75% until
Purchasing Power Protection Allowance
Floor on Purchasing Povver applies, 2.75%
thereafter
(1) The mortality table used was developed based on CalPERS' specific data. The
table includes 20 years of mortality improvements using Society of Actuaries Scale
BB. For more details on this table, please refer to the 2014 experience study report
on the CaIPERS website.
All other actuarial assumptions used in the June 30, 2014, valuation were based on the
results of an actuarial experience study for the period from 1997 to 2011, including updates to
salary increase, mortality and retirement rates. The Experience Study report can be obtained
at CaIPERS' website under Forms and Publications.
54
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 9: Retirement Plans (Continued)
Change of Assumptions
GASB 68, paragraph 68 states that the long -term expected rate of return should be
determined net of pension plan investment expense but without reduction for pension plan
administrative expense. The discount rate of 7.50 percent used for the June 30, 2014
measurement date was net of administrative expenses. The discount rate of 7.65 percent
used for the June 30, 2015 measurement date is without reduction of pension plan
administrative expense.
Discount Rate
The discount rate used to measure the total pension liability was 7.65 percent. To determine
whether the municipal bond rate should be used in the calculation of a discount rate for each
plan, CaIPERS stress tested plans that would most likely result in a discount rate that would
be different from the actuarially assumed discount rate. Based on the testing of the plans, the
tests revealed the assets would not run out. Therefore, the current 7.65 percent discount rate
is appropriate and the use of the municipal bond rate calculation is not deemed necessary.
The long -term expected discount rate of 7.65 percent is applied to all plans in the
Public Employees Retirement Fund. The stress test results are presented in a detailed report
called "GASB Crossover Testing Report" that can be obtained at CaIPERS' website under the
GASB 68 section.
The long -term expected rate of return on pension plan investments was determined using a
building -block method in which best - estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for
each major asset class.
In determining the long -term expected rate of return, staff took into account both short-term
and long -term market return expectations as well as the expected pension fund
(Public Employees' Retirement Fund) cash flows. Such cash flows were developed assuming
that both members and employers will make their required contributions on time and as
scheduled in all future years. Using historical returns of all the funds' asset classes, expected
compound (geometric) returns were calculated over the short-term (first 10 years) and the
long -term (11 -60 years) using a building -block approach. Using the expected nominal returns
for both short-term and long -term, the present value of benefits was calculated for each fund.
The expected rate of return was set by calculating the single equivalent expected return that
arrived at the same present value of benefits for cash flows as the one calculated using both
short-term and long -term returns. The expected rate of return was then set equivalent to the
single equivalent rate calculated above and rounded down to the nearest one quarter of
one percent.
The table on the following page reflects long -term expected real rate of return by asset class.
The rate of return was calculated using the capital market assumptions applied to determine
the discount rate and asset allocation. The target allocation shown was adopted by the Board
effective on July 1, 2014.
55
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30. 2016
Note 9: Retirement Plans (Continued)
Discount Rate - 1% Current Discount
6.65% 7.65%
Discount Rate +1%
8.65%
Miscellaneous Rate Plan
$ 13,707,063 $
Current Target
Real Return
Real Return
Asset Class
Allocation
Years 1 - 10 (1)
Years 11+ (2)
Global Equity
51.0%
5.25%
5.71%
Global Fixed Income
19.0
0.99
2.43
Inflation Sensitiee
6.0
0.45
3.36
Private Equity
10.0
6.83
6.95
Real Estate
10.0
4.50
5.13
Infrastructure and Forestland
2.0
4.50
5.09
Liquidity
2.0
(0.55)
(1.05)
(1) An expected inflation of 2.5% used for this period
(2) An expected inflation of 3.0% used for this period
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the
Discount Rate
The following presents the City's proportionate share of the net pension liability for each rate
plan, calculated using the discount rate for each rate plan„ as well as what the City's
proportionate share of the net pension liability would be if it were calculated using a discount
rate that is 1 % point lower or 1 % point higher than the current rate:
Plans Net Pension
Liability/(Asset)
Discount Rate - 1% Current Discount
6.65% 7.65%
Discount Rate +1%
8.65%
Miscellaneous Rate Plan
$ 13,707,063 $
7,780,130
$ 2,886,758
Miscellaneous PEPRA Rate Plan
5,999
(1,394)
(7,497)
Safety Rate Plan
26,664,519
16,257,123
7,723,248
TOTAL Plan:
$ 40,377,581 $
24,035,859
$ 10,602,509
Pension Plan Fiduciary Net Position
Detailed information about each pension plan's fiduciary net position is available in the
separately issued CalPERS financial reports. See CalPERS website for additional
information.
56
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 10: Joint Ventures
Orange County Fire Authority
The City of Seal Beach entered into a joint powers agreement with seventeen other cities
and the County of Orange in January 1995, and subsequently amended on
September 23, 1999, to create the Orange County Fire Authority (the Authority). Since
1995, other cities within the County have also joined the Authority to bring the total
members in the Authority to twenty -two. The purpose of the Authority is to provide for
mutual fire protection, prevention and suppression services and related and incidental
services including, but not limited to, emergency medical and transport services,
hazardous materials regulation as well as providing facilities and personnel for such
services. The effective date of formation was March 1, 1995. The Authority's governing
board consists of one representative from each City and two from the County. The
operations of the Authority are funded with structural fire fees collected by the County
through either the property tax roll or with cash contributions based on the Authority's
annual budget. The County pays all structural fire fees it collects to the Authority. In
2015 -2016 the City of Seal Beach paid $4,781,416 to the Authority.
No determination has been made as to each participant's proportionate share of fund
equity as of June 30, 2016. Upon dissolution of the Authority, all surplus money and
property of the Authority will be conveyed or distributed to each member in proportion to
all funds provided to the Authority by that member or by the County on behalf of that
member during its membership. The following audited financial data is presented as of
and for the year ended June 30, 2015 (the most recent data available).
Governmental Activities
Total Assets & Deferred Outflows
$
493,734,716
Total Liabilities & Deferred Inflows
$
662,859,089
Total Revenues
$
341,022,597
Total Expenses
391,125,698
Changes in Net Position
(50,103,101)
Net Postion, Beginning
243,754,615
Prior period adjustment
(362,775,887)
Net Position, Ending
$
(169,124,373)
Complete financial statements may be obtained from the Orange County Fire Authority,
1 Fire Authority Road, Irvine, California 92602.
57
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 10: Joint Ventures (Continued)
West Communications Financing Authority
The West Communications Financing Authority (Authority) was established
December 23, 1996, pursuant to a Joint Exercise of Powers Agreement by the Cities of
Seal Beach, Cypress, and Los Alamitos for the purpose of operating a public safety
communications center.
The Board of Directors is comprised of three elected officials, one designated by each
participating City. Each Director has one vote over budgeting and financial matters. The
Authority is a public entity separate from the Cities, and is not included in the financial
statements of those entities.
Each City pays a contractual fee to the Authority, which consists of personnel costs,
capital expenditures and reserves to fund accrued employee leave and equipment
purchases. The contractual fee remains stable from year to, year. In 2015 -2016, the City
of Seal Beach paid $724,969.50 to the Authority.
Audited information is not available. Unaudited financial information may be obtained
from the City of Cypress, 5275 Orange Avenue, Cypress, California, 90630.
Note 11: Liability, Property and Workers Compensation Protection
a. Description of Self- Insurance Pool Pursuant to Joint Powers Agreement
The City of Seal Beach is a member of the California Joint Powers Insurance Authority
(the Authority). The Authority is composed of 116 California public entities and is
organized under a joint powers agreement pursuant to California Government
Code §6500 et seq. The purpose of the Authority is to arrange and administer programs
for the pooling of self- insured losses, to purchase excess insurance or reinsurance, and
to arrange for group purchased insurance for property and other lines of coverages. The
California JPIA began covering claims of its members in 1978. Each member government
has an elected official as its representative on the Board of Directors. The Board
operates through a nine - member Executive Committee.
b. Self- Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. A
retrospective adjustment is then conducted annually thereafter, for coverage years
2012 -13 and prior. Retrospective adjustments are scheduled to continue indefinitely on
coverage years 2012 -13 and prior, until all claims incurred during those coverage years
are closed, on a pool -wide basis. This subsequent cost re- allocation among members,
based on actual claim development, can result in adjustments of either refunds or
additional deposits required. Coverage years 2013 -14 and forward are not subject to
routine annual retrospective adjustment.
The total funding requirement for self- insurance programs is estimated using actuarial
models and pre- funded through the annual contribution. Costs are allocated to individual
agencies based on exposure (payroll) and experience (claims) relative to other members
of the risk - sharing pool. Additional information regarding the cost allocation methodology
is provided below.
M.
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 11: Liability, Property and Workers Compensation Protection (Continued)
Liability
In the liability program claims are pooled separately between police and general
government exposures. (1) The payroll of each member is evaluated relative to the
payroll of other members. A variable credibility factor is determined for each
member, which establishes the weight applied to payroll and the weight applied to
losses within the formula. (2) The first layer of losses includes incurred costs up to
$30,000 for each occurrence and is evaluated as a percentage of the pool's total
incurred costs within the first layer. (3) The second layer of losses includes incurred
costs from $30,000 to $750,000 for each occurrence and is evaluated as a
percentage of the pool's total incurred costs within the second layer. (4) Incurred
costs from $750,000 to $50 million, are distributed based on the outcome of cost
allocation within the first and second loss layers.
For 2015 -16 the Authority's pooled retention is $2 million per occurrence, with
reinsurance to $20 million, and excess insurance to,$50 million. The Authority's
reinsurance contracts are subject to the following additional pooled retentions:
(a) $2.5 million annual aggregate deductible in the $3 million x/s $2 million layer, and
(b) $3 million annual aggregate deductible in the $5 million x/s $10 million layer.
There is a third annual aggregate deductible in the amount of $2.5 million in the
$5 million x/s $5 million layer, however it is fully covered under a separate policy and
therefore not retained by the Authority.
The overall coverage limit for each member, including all layers of coverage, is
$50 million per occurrence. Costs of covered claims for subsidence losses have a
sub -limit of $30 million per occurrence.
Workers' Compensation
In the workers' compensation program claims are pooled separately between public
safety (police and fire) and general government exposures. (1) The payroll of each
member is evaluated relative to the payroll of other members. A variable credibility
factor is determined for each member, which establishes the weight applied to payroll
and the weight applied to losses within the formula. (2) The first layer of losses
includes incurred costs up to $50,000 for each occurrence and is evaluated as a
percentage of the pool's total incurred costs within the first layer. (3) The second
layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence
and is evaluated as a percentage of the pool's total incurred costs within the second
layer. (4) Incurred costs from $100,000 to statutory limits are distributed based on the
outcome of cost allocation within the first and second loss layers.
For 2015 -16, the Authority's pooled retention is $2 million per occurrence, with
reinsurance to statutory limits under California Workers' Compensation Law.
Employer's Liability losses are pooled among members to $2 million. Coverage from
$2 million to $5 million is purchased as part of a reinsurance policy, and Employer's
Liability losses from $5 million to $10 million are pooled among members.
59
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 11: Liability, Property and Workers Compensation Protection (Continued)
c. Purchased Insurance
Pollution Legal Liability Insurance
The City of Seal Beach participates in the pollution legal liability insurance program
which is available through the Authority. The policy covers sudden and gradual
pollution of scheduled property, streets, and storm drains owned by the City of
Seal Beach. Coverage is on a claims -made basis. There is a $50,000 deductible. The
Authority has a limit of $50 million for the 3 -year period from July 1, 2014 through
July 1, 2017. Each member of the Authority has a $10 million sub -limit during the
3 -year term of the policy.
Propertylnsurance
The City of Seal Beach participates in the all -risk property protection program of the
Authority. This insurance protection is underwritten by several insurance companies.
City of Seal Beach property is currently insured according to a schedule of covered
property submitted by the City of Seal Beach to the Authority. City of Seal Beach
property currently has all -risk property insurance protection in the amount of
$47,968,529. There is a $5,000 deductible per occurrence except for
non - emergency vehicle insurance which has a $1,000 deductible. Premiums for the
coverage are paid annually and are not subject to retrospective adjustments.
Earthquake and Flood Insurance
The City of Seal Beach purchases earthquake and Flood insurance on a portion of its
property. The earthquake insurance is part of the property protection insurance
program of the Authority. City of Seal Beach property currently has earthquake
protection in the amount of $47,849,368. There is a deductible of 5% per unit of value
with a minimum deductible of $100,000. Premiums for the coverage are paid annually
and are not subject to retrospective adjustments.
Crime Insurance
The City of Seal Beach purchases crime insurance coverage in the amount of
$3,000,000 with a $2,500 deductible. The fidelity coverage is provided through the
Authority. Premiums are paid annually and are not subject to retrospective
adjustments.
d. Adequacy of Protection
During the past three fiscal years, none of the programs of protection experienced
settlements or judgments that exceeded pooled or insured coverage. There were also no
significant reductions in pooled or insured liability coverage in, 2015 -16.
99
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30. 2016
Note 12: Other Post - Employment Benefits Other than Pension
Plan Descriptions
The City of Seal Beach provides postretirement medical benefits to employees who retire
directly from the City under CalPERS under a single - employer defined benefit
post - employment benefits plan. Eligible retirees can continue participation in the City
medical plans (PEMHCA). For miscellaneous retirees, the City contributes up to a
capped dollar amount which varies by bargaining unit, medical coverage, and years of
service. For police safety retirees, the City contribution rate varies by date of hire and
date of retirement.
City's Funding Policy
The contribution requirements of plan members and the City are established and may be
amended by City Council. For fiscal year 2015 -16, the City contributed $502,000 to the
plan, including premiums.
The City uses CaIPERS to hold irrevocable employer contributions in a trust restricted for
benefits under this program. CaIPERS publishes a publically available financial report
conforming to GASB Statement No. 43 that includes ! separately issued financial
statements for the CalPERS OPEB Trust. Copies of PERS' annual financial reports for its
OPEB Trust may be obtained from its executive office at 400 "Q" Street, Sacramento,
California 95811.
Annual OPEB Cost and Net OPES Obligation
The City's annual other postemployment benefit (OPEB) cost (expense) for each plan is
calculated based on the annual required contribution of the employer (ARC), an amount
actuarially determined in accordance with the parameters of GASB Statement 45. The
ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover
the value of employer promised benefits expected to be earned or allocated for each
fiscal year and to amortize any unfunded actuarial liabilities (or funding excess) over a
period not to exceed thirty years. The City's annual OPEB 'cost for the current year and
the related information for the plan are as follows:
Annual required contribution $ 449,709
Interest on net OPEB obligation (25,951)
Adjustment to annual required contribution 42,634
Annual OPEB cost (expense) 466,392
Contributions made (including premiums paid) 502,000
Increase (decrease) in net OPEB obligation (35,608)
Net OPEB obligation (asset) — beginning of year (651,646)
Net OPEB obligation (asset) — end of year $ (687,254)
61
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 12: Other Post-Employment Benefits Other than Pension (Continued)
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the
plan, and the net OPEB obligation for 2016 and the two preceding years were as follows:
Funded Status and Funding Progress
Actuarial valuations of an ongoing plan involve estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality, and the
healthcare cast trend. Amounts determined regarding the funded status of the plan and
the annual required contributions of the employer are subject to continual revision as
actual results are compared to past expectations and new estimates are made about the
future. The schedule of funding progress, presented below, presents multiyear trend
information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for the benefits.
Schedule of Funding Progress!
(dollar amounts in thousands)
(latest information available) j
Actuarial
Net OPEB
Percentage of
OPEB
Fiscal Year
Annual
OPEB Cost
Obligation
Ended
OPEB Cost
Contributed
(Asset)
6/30/2014
$ 332,508
98.0%
$ (295,009)
6/30/2015
336,962
193.4%
(651,646)
6/30/2016
466,392
147.4%
(687,254)
Funded Status and Funding Progress
Actuarial valuations of an ongoing plan involve estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality, and the
healthcare cast trend. Amounts determined regarding the funded status of the plan and
the annual required contributions of the employer are subject to continual revision as
actual results are compared to past expectations and new estimates are made about the
future. The schedule of funding progress, presented below, presents multiyear trend
information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for the benefits.
Schedule of Funding Progress!
(dollar amounts in thousands)
(latest information available) j
62
Actuarial
Unfunded
UAAL as a
Actuarial
Actuarial
Accrued
AAL
Funded
Covered
Percentage of
Valuation
Value of
Liability (AAL)-
(UAAL)
ratio
Payroll
covered payroll
Date
Assets (a)
Entry Age (b)
(b -a)
(a /b)
(c)
((b -a) /c)
6/30/2011
$ 1,738
$ 6,902
$ 5,164
25%
$ 8,083
63.89%
7/1/2013
2,672
6,657
3,985
40%
6,903
44.76%
7/1/2015
3,516
9,009
5,493
39%
8,977
61.19%
62
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30. 2016
Note 12:
Note 13:
Other Post - Employment Benefits Other than Pension (Continued)
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan
(the plan as understood by the employer and the plan members) and include the types of
benefits provided at the time of each valuation and the historical pattern of sharing of
benefit costs between employer and plan members to that point. The actuarial methods
and assumptions used include techniques that are designed to reduce the effects of
short -term volatility in actuarial accrued liabilities and the actuarial assets, consistent with
the long -term perspective of the calculations. Significant methods and assumptions were
as follows:
Actuarial valuation date
Actuarial cost method
Amortization method
Amortization period
Asset valuation method
7/1/2015
Entry Age Normal
Level percentage of payroll
30 years
5 -year smoothed market
Actuarial assumptions:
Investment rate of return' 7.00%
Projected salary increases' 2.75%
Includes an inflation assumption of 4 %.
Commitments and Contingencies
Construction Commitments
As of June 30, 2016, budgeted funds committed for major capital projects included the
following:
Contract Expenditures Unexpended
Amount To Date Balance
BG -0904: New Swimming Pool: Westbed +White Inc. $
238,930'
BG -1302: Emerg. Backup Power: Fakouri Electrical
455,060
SS -0901: 10 yr Sewer Improvement Master Plan: AKM
489,506
ST1502 &ST1503 Local and Arterial Paving - All American Asphalt
381,544
Sand Berth - Post Earth Works
275,366
SD1601 West End PS - Southern Contracting
223,500
PR1602 Eisenhower Park Design - DVD
53,286
ST1207 SB Parking Lots Data - Ramco
49,400
PR1502 Eisenhower Park Improvement - JDC
130,852
EM1601 El Nino Storm Prep - Post Earthworks
135,274
SS0901 -3 8th St Sewer P.S. - Charles King
1,999,170
BG1401 & BG1402 Chambers & SBTV3 Remodel - Ramco
310,700
PR1602 Eisenhower Park Design - R.E. Schultz
173,579
EM1601 El Nino Storm Prep - Godwin Pumps
257,035
ST1604 Concrete Repair - Golden State Constructors
67,993
Total $
5,241,195
63
$ 79,614 $
87, 880.00
244,201.80
307,044
112,488
29,376
48,709
84,920
135,274
2,170,931
204,525
159,317
367,180
245,304
74,500
275,366
111,013
23,910
691
45,932
(171,761)
106,175
173,579
257,035 -
- 67,993
3,761,997 $ 1,479,198
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 14: Net Position Restatement
Net Position on the government -wide statement of activities has been restated by $374,314
due to revenues earned in previous years that were not recognized relating to
reimbursements for the Community Development Block Grant.
Note 15: Successor Agency Trust for Assets of Former Redevelopment Agency
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 ( "the Bill ")
that provides for the dissolution of all redevelopment agencies in the State of California. This
action impacted the reporting entity of the City of Seal Beach that previously had reported a
redevelopment agency within the reporting entity of the City as a blended component unit.
The Bill provides that upon dissolution of a redevelopment agency, either the city or another
unit of local government will agree to serve as the "successor agency' to hold the assets until
they are distributed to other units of state and local government. On February 13, 2012, the
City Council elected to become the Successor Agency for the former redevelopment agency
in accordance with the Bill.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the
State of California cannot enter into new projects, obligations or commitments. Subject to the
control of a newly established oversight board, remaining assets can only be used to pay
enforceable obligations in existence at the date of dissolution (including the completion of any
unfinished projects that were subject to legally enforceable contractual commitments).
In future fiscal years, successor agencies will only be allocated revenue in the amount that is
necessary to pay the estimated annual installment payments on enforceable obligations of
the former redevelopment agency until all enforceable obligations of the prior redevelopment
agency have been paid in full and all assets have been liquidated.
The Bill directs the State Controller of the State of California to review the propriety of any
transfers of assets between redevelopment agencies and other public bodies that occurred
after January 1, 2011. If the public body that received such transfers is not contractually
committed to a third party for the expenditure or encumbrance of those assets, the
State Controller is required to order the available assets to be transferred to the public body
designated as the successor agency by the Bill.
Management believes, in consultation with legal counsel, that the obligations of the former
redevelopment agency due to the City are valid enforceable obligations payable by the
successor agency trust under the requirements of the Bill. The City's position on this issue is
not a position of settled law and there is considerable legal uncertainty regarding this issue. It
is reasonably possible that a legal determination may be made at a later date by an
appropriate judicial authority that would resolve this issue unfavorably to the City.
64
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 15: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued)
In accordance with the timeline set forth in the Bill (as modified by the California Supreme
Court on December 29, 2011) all redevelopment agencies in the State of California were
dissolved and ceased to operate as a legal entity as of February 1, 2012.
a. Cash and investments
Cash and investments reported in the accompanying financial statements consisted of
the following:
Cash and investments pooled with the City $ 821,411
Cash and investments with fiscal agent 741,413
$ 1,562,824
b. Capital Assets
Beginning Ending
Balance Additions Deletions Balance
Fiduciary Activities:
Successor Agency of the
Former RDA
Capital assets, being depreciated:
Buildings and improvements
Machinery and equipment
Total Capital Assets,
Being Depreciated
Less accumulated depreciation:
Buildings and improvements
Machinery and equipment
Total Accumulated
Depreciation
Total Capital Assets,
Being Depreciated, Net
Fiduciary Activities
Capital Assets, Net
$ 370,804 $ $ - $ 370,804
64,784 64,784
435,588 435,588
309,942 3,580 - 313,522
64,784 64,784
374,726 3,580 378,306
60,862
(3,580)
57,282
$
60,862
$ (3,580) $
$
57,282
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 15: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued)
c. Long -term Debt
Long -term liability activity for the year ended June 30, 2016, was as follows:
Balance
July 1, 2015 Additions
Fiduciary Activities
2000 Tax Allocation Bonds Series A $ 3,425,000 $
2000 Tax Allocation Bonds Series B 220,000
Total bonds 3,645,000
Advance from Sewer Fund 952,344
Total $ 4,597,344 $
Balance Due Within
Deletions June 30, 2016 One Year
$ 495,000 $ 2,930,000 $ 520,000
50,000 170,000 55,000
545,000 3,100,000 575,000
238,234 714,110
$ 783,234 $ 3,814,110 $ 575,000
A description of the individual issues of bonds of the Successor Agency of the former
redevelopment agency outstanding as of June 30, 2016, follows:
Agency 2000 Tax Allocation Refunding Bonds
On December 20, 2000, the Agency issued 2000 Tax Allocation Refunding Bonds for
the Riverfront Redevelopment Project in the amounts of $8,520,000 and $685,000 for
Series A and B, respectively. Interest rate on the bonds varies from 4% to 5.375 %.
The Agency used the proceeds of Series A Bonds to finance the refunding and
defeasance of $1,380,000 of 1986 Tax Allocation Bonds and $3,715,000 of 1991 Tax
Allocation Bonds.
Series B Bonds were used to pay bond issuance costs and finance certain
redevelopment activities of the Agency.
The Series A Bonds are payable exclusively from Tax,Revenues and certain funds
and accounts held under the Indenture. Series B Bonds are to be paid exclusively
from Surplus Tax Revenues and certain funds and accounts held under the
indenture.
The balances in the Series A and B bonds outstanding at June 30, 2016, were
$2,930,000 and $170,000 respectively. This liability was transferred to the Successor
Agency upon dissolution of the redevelopment agency.
A.,
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 15: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued)
The annual debt service requirements on the tax allocation bonds as of
June 30, 2016, are as follows:
2000 Tax Allocation Refunding 2000 Tax Allocation Refunding
Year Ending
Bonds, Series A
Bonds, Series B
June 30,
Principal
Interest
Principal Interest
2017
$ 520,000
$ 140,565
$ - 55,000 $
8,194
2018
545,000
113,271
55,000
5,031
2019
575,000
84,288
60,000
1,725
2020
605,000
53,078
-
-
2021
160,000
32,519
-
-
2022 -2025
525,000
43,403
-
-
Total
$ 2,930,000
$ 467,124
$ 170,000 $
14,950
On June 14, 2012, Moody's Investors Service ( "Moody's ") downgraded all California tax
allocation bonds rated 'Baa3' and above. As such, the. Bonds' insured rating was
downgraded from 'A3' to 'Ba1' and underlying rating was downgraded from 'A3' to 'Ba1'.
According to Moody's, all California tax allocation bond ratings remain on review for
possible withdrawal.
Advance from the City
In 2012, the sewer fund advanced $1,200,000 to the former redevelopment agency. This
was subsequently denied by the Department of Finance (DOF). The City appealed the
DOF decision and, in 2014, this advance was approved. Interest on the advance is
consistent Local Agency Investment Fund (LAIF) interest rate at the time the
Oversight Board made the finding that the advance was for legitimate redevelopment
purposes, which is at 0.00367 %. The balance of the advance at June 30, 2016, was
$714,110.
d. Pledged Revenue
The Successor Agency has debt issuances outstanding that are collateralized by the
pledging of certain revenues. The amount and term of the remainder of these
commitments are indicated in the debt service to maturity tables presented in the
accompanying notes. The purposes for which the proceeds of the related debt issuances
were utilized are disclosed in the debt descriptions in the accompanying notes. For the
current year, debt service payments as a percentage of, the pledged gross revenue
(or net of certain expenses where so required by the debt agreement) are indicated for
the Successor Agency tax allocation debt in the table below. These percentages also
approximate the relationship of debt service to pledged revenue for the remainder of the
term of the commitment:
Description of Pledged Annual Amount
Revenue of Revenue
Property tax
1,329,343
67
Annual Debt
Service Payments
(of all debt secured
by this revenue)
783,234
Debt Service as a
Percentage of Pledged
Revenue
58.9%
CITY OF SEAL BEACH
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2016
Note 15: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued)
e. Insurance
The Successor Agency is covered under the City of Seal Beach's insurance policies.
Therefore, the limitation and self- insured retentions applicable to the City also apply to
the Successor Agency. Additional information as to coverage and self- insured retentions
can be found in Note 11.
m
CITY OF SEAL BEACH
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
YEAR ENDED JUNE 30, 2016
Note 1: Budgetary Comparison Information
a. Budget Data
General Budget Policies
Budgets for the general, special revenue, debt service, and capital projects funds are
adopted on a basis consistent with generally accepted accounting principles (GAAP).
The City Council approves each year's budget submitted by the City Manager prior to
the beginning of the new fiscal year. Public hearings are conducted prior to its
adoption by the Council
Supplemental appropriations, where required during the, period, are also approved by
the Council. The City Manager may make transfers of appropriations within and
between functions and programs, in accordance with Fiscal Policy, as long as such
transfers do not increase the adopted annual budget appropriations. Budget
amendments which exceed total adopted appropriations require the approval of the
City Council. The legal level of budgetary control is at the function level. During the
year, several supplemental appropriations were necessary. At fiscal year -end, all
operating budget appropriations lapse.
b. Excess of expenditures over appropriations are as follows:
Expenditures for the year ended June 30, 2016, exceeded the appropriations of the
General and Major Special Revenue Funds are as follows:
Fund
Expenditures Appropriations Excess
General Fund:
Principal Retirement (Climatec) $ 120,150 $ 120,150
0
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
GENERALFUND
YEAR ENDED JUNE 30, 2016
Budgetary Fund Balance, July 1
Resources (Inflows):
Taxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Fines and forfeitures
Contributions
Miscellaneous
Transfers in
Amounts Available for Appropriations
Charges to Appropriation (Outflow):
General government
Public safety
Community development
Community services
Public works
Debt service:
Principal retirement
Transfers out
Total Charges to Appropriations
Budgetary Fund Balance, June 30
120,150 (120,150)
11,407,200 12,399,800 4,024,272 8,375,528
40,642,700 41,832,343 32,052,550 9,779,793
$ 22,452,013 $ 21,423,170 $ 29,104,182 $ 7,681,012
70
Variance with
Final Budget
Budget Amounts _
Actual
Positive
Original
Final
Amounts
(Negative)
$ 30,001,613
$ 30,001,613
$ 30,001,613
$ -
22,418,000
22,418,000
21,510,272
(907,728)
1,316,400
1,316,400
1,304,924
(11,476)
209,100
209,100
160,398
(48,702)
4,253,400
4,245,500
4,085,676
(159,824)
681,800
681,800
967,400
285,600
1,073,200
1,073,20D
1,110,606
37,406
83,000
83,000
283,222
200,222
144,700
139,100
529,985
390,885
2,913,500
3,087,800
1,202,636
(1,885,164)
63,094,713
63,255,513
61,156,732
(2,098,781)
5,227,700
5,228,226
5,077,980
150,246
16,210,200
16,263,307
16,036,899
226,408
996,100
996,100
888,226
107,874
1,195,500
1,187,636
1,075,282
112,354
5,606,000
5,757,274
4,829,741
927,533
120,150 (120,150)
11,407,200 12,399,800 4,024,272 8,375,528
40,642,700 41,832,343 32,052,550 9,779,793
$ 22,452,013 $ 21,423,170 $ 29,104,182 $ 7,681,012
70
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
CITYWIDE GRANTS
YEAR ENDED JUNE 30, 2016
71
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ (407,424)
$ (407,424)
$ (407,424)
$ -
Resources (Inflows):
Intergovernmental
1,636,700
1,636,700
527,771
(1,108,929)
Amounts Available for Appropriations
1,229,276
1,229,276
120,347
(1,108,929)
Charges to Appropriation (Outflow):
'
Transfers out
743,000
743,000
43,510
699,490
Total Charges to Appropriations
743,000
743,000
43,510
699,490
Budgetary Fund Balance, June 30
$ 486,276
$ 486,276
$ 76,837
$ (409,439)
71
CITY OF SEAL BEACH
COST SHARING MULTIPLE EMPLOYER BENEFIT PLAN
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
AS OF JUNE 30, 2016
Total Plan
Plan's Proportion of the Net Pension Liability 0.20166% 0.35018
Plan's Proportionate Share of the Net Pension Liability $ 19,069,106 $ 24,035,859
Plan's Covered Payroll $ 8,903,015 $ 9,271,107
Plan's Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll 21419% 259.26%
The Pension Plan's (PERF -C) Fiduciary Net Position as a Percentage
of the Total Pension Liability 79.82% 76.40%
Notes to Schedule:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which ocurred after the June 30, 2014
valuation date. This applies for voluntary benefit changes as well as any offer of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes of Assumptions: The discount rate was changed from 7.5 percent to 7.65 percent (net of administrative expense) to correct for an adjustment
to exclude administrative expense.
(1) Historical information is required only for measurement for which GASS 68 is applicable. Fiscal Year 2015 was the first year of implementation,
therefore only two years are shown.
72
2015
2016
Miscellaneous Rate Plan
Rate Plan's Proportion of the Net Pension Liability
0.01164%
0.11335%
Rate Plan's Proportionate Share of the Net Pension Liability
$
7,245,132
$
7,780,130
Rate Plan's Covered Payroll
$
4,308,433
$
4,102,234
Rate Plan's Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll
168.16%
189.66%
PEPRA Miscellaneous Rate Plan
Rate Plan's Proportion of the Net Pension Liability /(Asset)
0.00000%
- 0.00002%
Rate Plan's Proportionate Share of the Net Pension Liability/(Asset)
$
181
$
(1,394)
Rate Plan's Covered Payroll
$
315,408
$
502,805
Rate Plan's Proportionate Share of the Net Pension Liability/(Asset) as
Percentage of Covered Payroll
0.06%
-0.28%
Safety Rate Plan
Rate Plan's Proportion of the Net Pension Liability
0.19002%
0.23685%
Rate Plan's Proportionate Share of the Net Pension Liability
$
11,823,793
$
16,257,123
Rate Plan's Covered Payroll
$
4,279,174
$
4,666,068
Rate Plan's Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll
276.31%
348.41%
Total Plan
Plan's Proportion of the Net Pension Liability 0.20166% 0.35018
Plan's Proportionate Share of the Net Pension Liability $ 19,069,106 $ 24,035,859
Plan's Covered Payroll $ 8,903,015 $ 9,271,107
Plan's Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll 21419% 259.26%
The Pension Plan's (PERF -C) Fiduciary Net Position as a Percentage
of the Total Pension Liability 79.82% 76.40%
Notes to Schedule:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which ocurred after the June 30, 2014
valuation date. This applies for voluntary benefit changes as well as any offer of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes of Assumptions: The discount rate was changed from 7.5 percent to 7.65 percent (net of administrative expense) to correct for an adjustment
to exclude administrative expense.
(1) Historical information is required only for measurement for which GASS 68 is applicable. Fiscal Year 2015 was the first year of implementation,
therefore only two years are shown.
72
CITY OF SEAL BEACH
COST SHARING MULTIPLE EMPLOYER BENEFIT PLAN
SCHEDULE OF PLAN CONTRIBUTIONS
AS OF JUNE 30, 2016
Miscellaneous Rate Plan
Actuarially Determined Contribution
Contribution in Relation to the Actuarially Determined Contribution
Contribution Deficiency (Excess)
Covered Payroll
Contributions as a Percentage of Covered - Employee Payroll
PEPRA Miscellaneous Rate Plan
Actuarially Determined Contribution
Contribution in Relation to the Actuarially Determined Contribution
Contribution Deficiency (Excess)
Covered Payroll
Contributions as a Percentage of Covered - Employee Payroll
Safety Rate Plan
Actuarially Determined Contribution
Contribution in Relation to the Actuarally Determined Contribution
Contribution Deficiency (Excess)
Covered Payroll
Contributions as a Percentage of Covered - Employee Payroll
Total Plan
Actuarially Determined Contribution
Contribution in Relation to the Actuarially Determined Contribution
Contribution Deficiency (Excess)
Covered Payroll
Contributions as a Percentage of Covered - Employee Payroll
2015 2016
$ 576,325 $ 666,327
(576,325) (666,327)
$ 4,102,234 $ 3,877,132
14.05% 17.19%
$
38,342
$
67,928
(38,342)
(67,928)
$
$
$
502,805
$
550,084
7.63% 12.35%
$ 1,342,325 $ 1,476,452
(1,342,325) (1,476,452)
$ 4,666,068 $ 4,500,562
28.77% 32.81%
$ 1,956,992 $ 2,210,708
(1,956,992) (2,210,708)
$ $
$ 9,271,107 $ 8,927,778
21.11% 24.76%
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation,
therefore only two years are shown.
Note to Schedule:
Valuation Date:
Methods and assumptions used to determine contribution rates:
Actuarial cost method
Amortization method /period
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
Mortality
r3
June 30, 2013
Entry age normal
Level percent payroll /closed
Market value
2.75%
3.30% to 14.20%
3.00%
7.5% net of pension plan investment and
administrative expenses; includes inflation
The probabilities of retirement are based on the 2010
CaIPERS Experience Study for the period from 1997
to 2007
The probabilities of retirement are based on the 2010
CalPERS Experience Study for the period from 1997
to 2007. Pre - retirement and post- retirement mortality
rates include 5 years of projected mortality
improvement using Scale AA published by the
Society of Actuaries.
CITY OF SEAL BEACH
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2016
Assets:
Pooled cash and investments
Receivables:
Accounts
Taxes
Accrued interest
Due from other governments
Restricted assets:
Cash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Unearned revenues
Due to other funds
Retentions payable
Total Liabilities
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances:
Restricted for:
Community development projects
Public safety
Community services
Public works
Debt service
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
74
Revenue Funds
Supplemental
Street Law Detention Police Asset
Lighting Enforcement Center Forfeiture
$ - $ 56,236 $ 14,611 $ 9,070
- 7 105,251
1,253 - -
138
,
$ 1,253 $ 56,374 $ 14,618 $ 114,321
$ 14,267 $ 683 $ 6 $ -
- 778 - 3,085
100,438
14,267 ,1,461 6 103,523
- 54,913 14,612 10,798
(13,014) - -
(13,014) 54,913 14,612 10,798
$ 1,253 $ 56,374 $ 14,618 $ 114,321
CITY OF SEAL BEACH
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2016 (CONTINUED)
Assets:
Pooled cash and investments
Receivables:
Accounts
Taxes
Accrued interest
Due from other governments
Restricted assets:
Cash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Unearned revenues
Due to other funds
Retentions payable
Total Liabilities
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances:
Restricted for:
Community development projects
Public safety
Community services
Public works
Debt service
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
75
Revenue Funds
Traffic
Air Quality Parks Impact AB State
Improvement Improvement 1600 Gasoline Tax
$ 8,080 $ - $ 362,811 $ 847,988
8,445
$ 16,525 $ $ 362,811 $ 847,988
i
$ 8,080 $ - $
8,080
8,445 - 362,811 847,988
8,445 - 362,811 847,988
$ 16,525 $ - $ 362,811 $ 847,988
CITY OF SEAL BEACH
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2016
Assets:
Pooled cash and investments
Receivables:
Accounts
Taxes
Accrued interest
Due from other governments
Restricted assets:
Cash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Unearned revenues
Due to other funds
Retentions payable
Total Liabilities
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances:
Restricted for:
Community development projects
Public safety
Community services
Public works
Debt service
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
MET
Special Revenue Funds
Community
Development Police Landscape
Measure M2 Block Grant Grants District
$ 860,888 $ 406 $ - $ 202,124
71,789 9,835 - -
27,986
$ 932,677 $ 10,241 $ 27,966 $ 202,124
$ - $ - $ 6,462 $ 2,382
255 585
- 12,650 11,271 -
- 24,860 -
1,750
12,650 42,848 4,717
20,969
20,969
932,677
197,407
- (2,409) (35,831) -
932,677 (2,409) (35,831) 197,407
$ 932,677 $ 10,241 $ 27,966 $ 202,124
CITY OF SEAL BEACH
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2016 (CONTINUED)
Assets:
Pooled cash and investments
Receivables:
Accounts
Taxes
Accrued interest
Due from other governments
Restricted assets:
Cash and investments with fiscal agents
Total Assets
Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable
Accrued liabilities
Unearned revenues
Due to other funds
Retentions payable
Total Liabilities
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances:
Restricted for:
Community development projects
Public safely
Community services
Public works
Debt service
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
77
Debt Service
Revenue Funds Funds
Pacific Seal Beach City Debt
Heron Pointe Gateway Cable Service
$ 68,847 $ 247,920 $ 296,765 $
26,567
257
726,110
$ 68,847 $ 247,920 $ 323,589 $ 726,110
$ 1,750 $ 624 $ - $ 3,000
- 901 -
1,750 1,525 - 3,000
67,097 246,395
323,589
723,110
67,097 246,395 323,589 723,110
$ 68,847 $ 247,920 $ 323,589 $ 726,110
CITY OF SEAL BEACH
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2016
V1.1
Total
Nonmajor
Governmental
Funds
Assets:
Pooled cash and investments
$ 2,975,746
Receivables:
Accounts
221,894
Taxes
1,253
Accrued interest
257
Due from other governments
28,124
Restricted assets:
Cash and investments with fiscal agents
726,110
Total Assets
$ 3,953,384
Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable
$ 37,254
Accrued liabilities
5,604
Unearned revenues
23,921
Due to other funds
125,298
Retentions payable
1,750
Total Liabilities
193,827
Deferred Inflows of Resources:
Unavailable revenues
20,969
Total Deferred Inflows of Resources
20,868
Fund Balances:
Restricted for:
Community development projects
510,899
Public safety
80,323
Community services
323,589
Public works
2,151.921
Debt service
723,110
Unassigned
(51,254)
Total Fund Balances
3,738,588
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
$ 3,953,384
V1.1
THIS PAGE INTENTIONALLY LEFT BLANK
We]
CITY OF SEAL BEACH
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2016
Revenues:
Taxes
Intergovernmental
Charges for services
Use of money and property
Miscellaneous
Total Revenues
Expenditures:
Current:
General government
Public safety
Community development
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
Special Revenue Funds
196,373 - - -
- 107,304 4,446 146,506
196,373 107,304 4,446 146,506
(56,099) 25,200 5,637 71,048
43,085
43,085
i
(13,014) 25,200 5,637 71,048
29,713 8,975 (60,250)
$ (13,014) $ 54,913 $ 14,612 $ 10,798
J9
Supplemental
Street
Law
Detention
Police Asset
Lighting
Enforcement
Center
Forfeiture
$ 140,274
$ 1 -
$ -
$ -
-
131,957
-
217,510
-
-
10,083
-
547
-
44
140,274
132,504
10,083
217,554
i
196,373 - - -
- 107,304 4,446 146,506
196,373 107,304 4,446 146,506
(56,099) 25,200 5,637 71,048
43,085
43,085
i
(13,014) 25,200 5,637 71,048
29,713 8,975 (60,250)
$ (13,014) $ 54,913 $ 14,612 $ 10,798
J9
CITY OF SEAL BEACH
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2016 (CONTINUED)
Revenue Funds
Miscellaneous
Total Revenues
Expenditures:
Current:
General government
Public safely
Community development
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
31,321 10,602 10,476 555,121
30,888 - - 1,429
- 8,600 17,322 -
30,888 8,600 17,322 1,429
433 2,002 (6,846) 553,692
(50,443) (289,942) (423,405)
(50,443) (289,942) (423,405)
433 (48,441) (296,788) 130,287
8,012 48,441 659,599 717,701
$ 8,445 $ - $ 362,811 $ 847,988
81
Air Quality
Parks
Impact AB
Stale
Improvement
Improvement
1600
Gasoline Tax
Revenues:
Taxes
$ -
$ -
$ -
$ 545,212
Intergovernmental
31,315
10,000
-
-
Charges for services
-
-
2,926
-
Use of money and property
6
602
7,550
9,909
Miscellaneous
Total Revenues
Expenditures:
Current:
General government
Public safely
Community development
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
31,321 10,602 10,476 555,121
30,888 - - 1,429
- 8,600 17,322 -
30,888 8,600 17,322 1,429
433 2,002 (6,846) 553,692
(50,443) (289,942) (423,405)
(50,443) (289,942) (423,405)
433 (48,441) (296,788) 130,287
8,012 48,441 659,599 717,701
$ 8,445 $ - $ 362,811 $ 847,988
81
CITY OF SEAL BEACH
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2016
Y
Special Revenue Funds
Community
Development
Landscape
Measure M2
Block Grant
Police Grants
District
Revenues:
Taxes
$ 392,053
$ -
$ -
$ 183,072
Intergovernmental
-
167,350
91,755
-
Charges for services
-
-
-
-
Use of money and property
10,032
-
-
1,606
Miscellaneous
7,792
-
-
Total Revenues
41
167,350
91,755
184,678
Expenditures:
Current:
General government
-
-
-
-
Public safety
-
-
72,261
-
Community development
-
167,351
-
67,814
Public works
-
-
-
-
Capital outlay
-
-
-
-
Debt service:
Principal retirement
-
-
-
-
Interest and fiscal charges
-
-
-
Total Expenditures
-
167,351
72,261
67,614
Excess (Deficiency) of Revenues
Over (Under) Expenditures
409,877
(1)
19,494
116,864
Other Financing Sources (Uses):
Transfers in
-
-
-
-
Transfers out
(343,152)
-
-
(13,000)
Total Other Financing Sources
(Uses)
(343,152)
-
-
(13,000)
Net Change in Fund Balances
66,725
(1)
19,494
103,864
Fund Balances, Beginning of Year
865,952
(2,408)
(55,325)
93,543
Fund Balances, End of Year
$ 932,677
$ (2,409)
$ (35,831)
$ 197,407
Y
CITY OF SEAL BEACH
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2016 (CONTINUED)
Revenues:
Taxes
Intergovernmental
Charges for services
Use of money and property
Miscellaneous
Total Revenues
Expenditures:
Current:
General government
Public safety
Community development
Public works
Capital outlay
Debt service'.
Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
Debt Service
Revenue Funds Funds
76,777
7,392 44,556
11,000
- - 1,370,000
355,819
7,392 44,556 76,777 1,736,819
18,452 40,611 42,108 (1,736,573)
1,737,322
(11,000) (26,000) (115,584) -
(11,000)
Pacific
Seal Beach
City Debt
Heron Pointe
Gateway
Cable
Service
$ -
$ 57,261
$ - $
-
25,000
25,000
-
-
-
-
116,005
-
844
2,906
2,880
246
25,844
85,167
118,885
246
76,777
7,392 44,556
11,000
- - 1,370,000
355,819
7,392 44,556 76,777 1,736,819
18,452 40,611 42,108 (1,736,573)
1,737,322
(11,000) (26,000) (115,584) -
(11,000)
(26,000)
(115,584)
1,737,322
7,452
14,611
(73,476)
749
59,645
231,784
397,065
722,361
$ 67,097
$ 246,395
$ 323,589
$ 723,110
[$7
CITY OF SEAL BEACH
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2016
M
Total
Nonmajor
Governmental
Funds
Revenues:
Taxes
$ 1,317,872
Intergovernmental
699,887
Charges for services
129,014
Use of money and property
37,172
Miscellaneous
7,792
Total Revenues
2,191,737
Expenditures:
Current:
General government
273,150
Public safety
341,517
Community development
287,113
Public works
32,317
Capital outlay
25,922
Debt service:
Principal retirement
1,370,000
Interest and fiscal charges
355,819
Total Expenditures
2,685,838
Excess (Deficiency) of Revenues
Over (Under) Expenditures
(494,101)
Other Financing Sources (Uses):
Transfers in
1,780,407
Transfers out
(1,272,526)
Total Other Financing Sources
(Uses)
507,881
Net Change in Fund Balances
13,780
Fund Balances, Beginning of Year
3,724,808
Fund Balances, End of Year
$ 3,738,588
M
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
STREET LIGHTING
YEAR ENDED JUNE 30, 2016
99
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ -
$ -
$ -
$
Resources (Inflows):
Taxes
144,200
144,200
140,274
(3,926)
Transfers in
50,300
50,300
43,085
(7,215)
Amounts Available for Appropriations
194,500
194,500
183,359
(11,141)
Charges to Appropriation (Outflow):
General government
194,500
194,500
196,373
(1,873)
Total Charges to Appropriations
194,500
194,500
196,373
(1,873)
Budgetary Fund Balance, June 30
$ -
$
_L _113,014L
$ (13,014)
99
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
SUPPLEMENTAL LAW ENFORCEMENT
YEAR ENDED JUNE 30, 2016
Budgetary Fund Balance, July 1
Resources (Inflows):
Intergovernmental
Use of money and property
Amounts Available for Appropriations
Charges to Appropriation (Outflow):
Public safety
Total Charges to Appropriations
Budgetary Fund Balance, June 30
Budget Amounts
Original Final
$ 29,713 $ 29,713
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 29,713 $
100,000
100,000
131,957
31,957
300
300
547
247
130,013
130,013
162,217
32,204
121,200
122,900 i
107,304
15,596
121,200
122,900
107,304
15,596
$ 8,813
$ 7,113 $
54,913 $
47,800
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
DETENTION CENTER
YEAR ENDED JUNE 30, 2016
87
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ 8,975
$ 8,975
$ 8,975
$ -
Resources (Inflows):
Charges for services
10,000
10,000
10,083
83
Amounts Available for Appropriations
18,975
18,975
19,058
83
Charges to Appropriation (Outflow):
Public safety
15,000
15,000
4,446
10,554
Total Charges to Appropriations
15,000
15,000
4,446
10,554
Budgetary Fund Balance, June 30
$ 3,975
$ 3,975
$ 142612
$ 10,637
87
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
POLICE ASSET FORFEITURE
YEAR ENDED JUNE 30, 2016
i:Y.]
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ (60,250)
$ (60,250)
$ (60,250)
$
Resources (Inflows):
Intergovernmental
300,000
300,000
217,510
(82,490)
Use of money and property
-
-
44
44
Amounts Available for Appropriations
239,750
239,750
157,304
(82,446)
Charges to Appropriation (Outflow):
Public safety
304,000
304,000
146,506
157,494
Total Charges to Appropriations
304,000
304,000-
146,506
157,494
Budgetary Fund Balance, June 30
$ (64,250)
$ (64,250)
$ 10,798
$ 75,048
i:Y.]
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
AIR QUALITY IMPROVEMENT
YEAR ENDED JUNE 30, 2016
we
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ 8,012 $
8,012
$ 8,012
$ -
Resources (Inflows):
Intergovernmental
30,000
30,000
31,315
1,315
Use of money and property
-
6
6
Amounts Available for Appropriations
38,012
38,012
39,333
1,321
Charges to Appropriation (Outflow):
Public works
30,000
30,000
30,888
(888)
Total Charges to Appropriations
30,000
30,000
30,888
(888)
Budgetary Fund Balance, June 30
$ 8,012 $
8,012
$ 8,445
$ 433
we
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
PARKIMPROVEMENT
YEAR ENDED JUNE 30, 2016
Budgetary Fund Balance, July 1
Resources (Inflows):
Intergovernmental
Use of money and property
Amounts Available for Appropriations
Charges to Appropriation (Outflow):
Capital outlay
Transfers out
Total Charges to Appropriations
Budgetary Fund Balance, June 30
Budget Amounts
Original Final
$ 48,441 $ 48,441
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 48,441 $
-
-
10,000
10,000
200
200
602
402
48,641
48,641
59,043
10,402
10,000
10,000
8,600
1,400
-
54,000
50,443
3,557
10,000
64,000
59,043
4,957
$ 38,641
$ (15,359) $
- $
15,359
.r
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
TRAFFIC IMPACT AB 1600
YEAR ENDED JUNE 30, 2016
Budgetary Fund Balance, July 1
Resources (Inflows):
Charges for services
Use of money and property
Amounts Available for Appropriations
Charges to Appropriation (Outflow):
Capital outlay
Transfers out
Total Charges to Appropriations
Budgetary Fund Balance, June 30
Budget Amounts
Original Final
$ 659,599 $ 659,599
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 659,599 $
2,926 2,926
3,800
3,800
7,550
3,750
663,399
663,399
670,075
6,676
-
30,000
17,322
12,678
320,000
320,000
289,942
30,058
320,000
350,000
307,264
42,736
$ 343,399
$ 313,399
$ 362,811 $
49,412
91
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
STATE GASOLINE TAX
YEAR ENDED JUNE 30, 2016
Budgetary Fund Balance, July 1
Resources (Inflows):
Taxes
Use of money and property
Amounts Available for Appropriations
Charges to Appropriation (Outflow):
Public works
Transfers out
Total Charges to Appropriations
Budgetary Fund Balance, June 30
Budget Amounts
Original Final
$ 717,701 $ 717,701
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 717,701 $ -
569,200
569,200,
545,212
(23,988)
3,500
3,500
9,909
6,409
1,290,401
1,290,401!
1,272,822
(17,579)
2,000
2,000
1,429
571
1,000,000
1,000,000
423,405
576,595
1,002,000
1,002,000;
424,834
577,166
$ 288,401
$ 288,401;
$ 847,988
$ 559,587
92
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
MEASURE M2
YEAR ENDED JUNE 30, 2016
93
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ 865,952
$ 865,952
$ 865,952
$
Resources (Inflows):
Taxes
450,000
450,000
392,053
(57,947)
Use of money and property
3,800
3,800
10,032
6,232
Miscellaneous
-
-
7,792
7,792
Amounts Available for Appropriations
1,319,752
1,319,752
1,275,829
(43,923)
Charges to Appropriation (Outflow):
Transfers out
575,000
575,000
343,152
231,848
Total Charges to Appropriations
575,000
575,000
343,152
231,848
Budgetary Fund Balance, June 30
$ 744,752
$ 744,752
$ 932,677
$ 187,925
93
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
COMMUNITY DEVELOPMENT BLOCK GRANT
YEAR ENDED JUNE 30, 2016
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ (2,408)
$ (2,408)
$ (2,408)
$
Resources (Inflows):
Intergovernmental
180,000
180,000
167,350
(12,650)
Amounts Available for Appropriations
177,592
177,592
164,942
(12,650)
Charges to Appropriation (Outflow):
Community improvement
180,000
180,000
167,351
12,649
Total Charges to Appropriations
180,000
180,000
167,351
12,649
Budgetary Fund Balance, June 30
$ (2,408)
$ (2,408)
$ (2,409)
$ (1)
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
POLICE GRANTS
YEAR ENDED JUNE 30, 2016
Budgetary Fund Balance, June 30 $ (30,625) $ (30,625) $ (35,831) $ (5,206)
F�
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ (55,325)
$ (55,325)
$ (55,325)
$
Resources (Inflows):
Intergovernmental
165,000
305,000
91,755
(213,245)
Fines and forfeitures
13,000
13,000
-
(13,000)
Amounts Available for Appropriations
122,675
262,675
36,430
(226,245)
Charges to Appropriation (Outflow):
Public safety
153,300
293,300
72,261
221,039
Total Charges to Appropriations
153,300
293,300
72,261
221,039
Budgetary Fund Balance, June 30 $ (30,625) $ (30,625) $ (35,831) $ (5,206)
F�
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
LANDSCAPE DISTRICT
YEAR ENDED JUNE 30, 2016
1$14
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ 93,543 $
93,543
$ 93,543
$
Resources (Inflows):
Taxes
140,200
140,200
183,072
42,872
Use of money and property
2,500
2,500
1,606
(894)
Amounts Available for Appropriations
236,243
236,243
278,221
41,978
Charges to Appropriation (Outflow):
Community improvement
155,000
155,000
67,814
87,186
Transfers out
13,000
13,000
13,000
-
Total Charges to Appropriations
168,000
168,000
80,814
87,186
Budgetary Fund Balance, June 30
$ 68,243 $
68,243
$ 197,407
$ 129,164
1$14
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
HERON POINTE
YEAR ENDED JUNE 30, 2016
Budgetary Fund Balance, July 1
Resources (Inflows):
Intergovernmental
Use of money and property
Amounts Available for Appropriations
Charges to Appropriation (Outflow):
Community improvement
Transfers out
Total Charges to Appropriations
Budgetary Fund Balance, June 30
Budget Amounts
Original Final
$ 59,645 $ 59,645
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 59,645 $
25,000 25,000 25,000 -
300 300 844 544
84,945 84,945 85,489 544
8,000 8,000 7,392 608
11,000 11,000 11,000 -
19,000 19,000 18,392 608
$ 65,945 $ 65,945 $ 67,097 $ 1,152
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
PACIFIC GATEWAY
YEAR ENDED JUNE 30, 2016
no
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ 231,784
$ 231,784
$ 231,784
$
Resources (Inflows):
Taxes
50,000
50,000
57,261
7,261
Intergovernmental
25,000
25,000
25,000
-
Use of money and property
1,200
1,200
2,906
1,706
Amounts Available for Appropriations
307,964
307,964
316,951
8,967
Charges to Appropriation (Outflow):
Community improvement
67,700
67,700
44,556
23,144
Transfers out
226,000
226,000
26,000
200,000
Total Charges to Appropriations
293,700
293,700
70,556
223,144
Budgetary Fund Balance, June 30
$ 14,284
$ 14,284
$ 246,395
$ 232,111
no
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
SEAL BEACH CABLE
YEAR ENDED JUNE 30, 2016
Budgetary Fund Balance, July 1
Resources (Inflows):
Charges for services
Use of money and property
Amounts Available for Appropriations
Charges to Appropriation (Outflow):
General government
Transfers out
Total Charges to Appropriations
Budgetary Fund Balance, June 30
••
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
$ 397,065
$ 397,065
$ 397,065
$ -
90,000
90,000
116,005
26,005
2,000
2,000
2,880
880
489,065
489,065
515,950
26,885
75,000
75,000
76,777
(1,777)
225,000
225,000
115,584
109,416
300,000
300,000
192,361
107,639
$ 189,065
$ 189,065
$ 323,589
$ 134,524
••
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
CAPITAL PROJECTS AND EQUIPMENT
YEAR ENDED JUNE 30, 2016
100
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Budgetary Fund Balance, July 1
$ -
$ -
$ -
$
Resources (Inflows):
Transfers in
10,067,300
11,281,397
2,619,901
(8,661,496)
Amounts Available for Appropriations
10,067,300
11,281,397
2,619,901
(8,661,496)
Charges to Appropriation (Outflow):
Capital outlay
10,067,300
11,281,397
2,619,901
8,661,496
Total Charges to Appropriations
10,067,300
11,281,397:
2,619,901
8,661,496
Budgetary Fund Balance, June 30
$
$
$
$
100
CITY OF SEAL BEACH
BUDGETARY COMPARISON SCHEDULE
CITY DEBT SERVICE
YEAR ENDED JUNE 30, 2016
Budgetary Fund Balance, July 1
Resources (Inflows):
Use of money and property
Transfers in
Amounts Available for Appropriations
Charges to Appropriation (Outflow):
Public safety
Debt service:
Principal retirement
Interest and fiscal charges
Total Charges to Appropriations
Budgetary Fund Balance, June 30
101
Variance with
Final Budget
Budget Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
$ 722,361
$ 722,361
$ 722,361
$ -
-
-
246
246
1,757,600
1,757,600
1,737,322
(20,278)
2,479,961
2,479,961
2,459,929
(20,032)
2,500
2,500
11,000
(8,500)
1,370,000
1,370,000
1,370,000
-
385,100
385,100
355,819
29,281
1,757,600
1,757,600
1,736,819
20,781
$ 722,361
$ 722,361
$ 723,110
$ 749
101
CITY OF SEAL BEACH
COMBINING BALANCE SHEET
ALL AGENCY FUNDS
JUNE 30, 2016
-- Community
Community
Assessment Facilities
Facilities
District 94.1 District - Heion
District - Pacific
Deposits and 2000 -1 Pointe ,
Gateway Totals
Assets:
Pooled cash and investments $ 39,013 $ - $ 152,498 $ 147,334 $ 338,845
Restricted assets:
Cash and investments with
fiscal agents - - 254,886 694,418 949,304
Total Assets $ 39,013 $ - $ 407,384 $ 841,752 $ 1,288,149
Liabilities:
Deposits payable $ 39,013 $ - $ - $ - $ 39,013
Due to bondholders - - 407,384 841,752 1,249,136
Total Liabilities $ 39,013 $ - $ 407,384 $ 841,752 $ 1,288,149
102
CITY OF SEAL BEACH
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
ALL AGENCY FUNDS
YEAR ENDED JUNE 30, 2016
Balance Balance
7/112015 Additions Deductions 6130/2016_
Deposits
Assets:
Pooled cash and investments
$ 27,957
$ 13,242
$ 2,186
$ 39,013
Total Assets
27,957
13,242
2,186
7F 39,013
Liabilities:
Deposits payable
$ 27,957
$ 13,242
$ 2,186
$ 39,013
Total Liabilities
27,957
13,242
2,186
39,013
Assessment District 94 -1 and 2000 -1
Assets:
$ -
$ 546,935
$ 546,935
$ -
Pooled cash and investments
$ -
$ 70,948
$ 70,948
$ -
Receivables:
968,437
2,441,826
2,568,511
841,752
Accounts
236
-
236
-
Restricted assets:
Cash and investments with fiscal agents
198,918
39
198,957
-
Total Assets
199,154
70,987
270,141
Liabilities:
7,992
-
7,992
-
Due to bondholders
$ 199,154
$ 2,242
$ 201,396
$
Total Liabilities
199,154
2,242
201,396
949,304
Community Facilities District - Heron Pointe
1,653,774
2,162,905
2,528,530
1,288,149
Assets:
Pooled cash and investments
$ 168
$ 376,829
$ 224,499
$ 152,498
Receivables:
27,957
13,242
2,186
39,013
Accounts
7,756
-
7,756
-
Restricted assets:
1,653,774
3,255,802
3,621,427
1,288,149
Cash and investments with fiscal agents
450,302
254,914
450,330
254,886
Total Assets
458,226
631,743
682,585
407,394
Liabilities:
Accounts payable
$ -
$ 78,187
$ 78,187
$ -
Due to bondholders
458,226
720,305
771,147
407,384
Total Liabilities
458,226
798,492
849,334
07,384
ommunitv Facilities District - Pacific Gatewa
Assets:
Pooled cash and investments
$ 131,264
$ 744,002
$ 727,932
$ 147,334
Restricted assets:
Cash and investments with fiscal agents
837,173
702,931
845,686
694,418
Total Assets
968,437
1,446,933
1,57 ,618
841,752
Liabilities:
Accounts payable
$ -
$ 546,935
$ 546,935
$ -
Due to bondholders
968,437
1,894,891
2,021,576
841,752
Total Liabilities
968,437
2,441,826
2,568,511
841,752
Totals -All Agency Funds
Assets:
Pooled cash and investments
$ 159,389
$ 1,205,021
$ 1,025,565
$ 338,845
Receivables:
Accounts
7,992
-
7,992
-
Restricted assets:
Cash and investments with fiscal agents
1,486,393
957,884
1,494,973
949,304
Total Assets
1,653,774
2,162,905
2,528,530
1,288,149
Liabilities:
Accounts payable
$ -
$ 625,122
$ 625,122
$ -
Deposits payable
27,957
13,242
2,186
39,013
Due to bondholders
1,625,817
2,617,438
2,994,119
1,249,136
Total Liabilities
1,653,774
3,255,802
3,621,427
1,288,149
103
THIS PAGE INTENTIONALLY LEFT BLANK
iNL•I
CITY OF SEAL BEACH
Comprehensive Annual Financial Report
Year Ended June 30, 2016
STATISTICAL SECTION
This part of the City of Seal Beach comprehensive annual financial report presents detailed information
as a context for understanding what the information in the financial statements, note disclosures, and
required supplementary information says about the government's overall financial health.
TABLE OF CONTENTS
PAGE
Financial Trends
These schedules contain trend information to help the reader understand how the
government's financial performance and well -being have changed overtime. 106
Revenue Capacity
These schedules contain trend information to help the reader assess the
government's most significant current local revenue source, the property tax. 116
Debt Capacity
These schedules contain present information to help the reader assess the
affordability of the government's current levels of outstanding debt and the
government's ability to issue additional debt in the future. 122
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the government's financial activities take
place. 129
Operating Information
These schedules contain service and infrastructure data to help the reader
understand how the information in the government's financial report relates to the
services the government provides and the activities it performs. 132
105
Governmental activities:
Net investment in capital assets,
Restricted
Unrestricted
Total governmental activities net position
Business -type activities:
Net investment in capital assets,
Restricted
Unrestricted
Total business -type activities net position
Primary government:
Net investment in capital assets,
Restricted
Unrestricted
Total primary government net position
CITY OF SEAL BEACH
Net Position by Component
Last Eight Fiscal Years
(accrual basis of accounting)
2009
2010
2011
2012
$ 64,630,230
$ 64,607,970
$ 68,117,517
$ 70,801,667
5,004,891
6,190,852
5,179,337
2,662,285
32,204,164
30,050,739
27,557,417
29,666,427
$101,839,285
$100,849,561
$100,854,271
$ 103,130,379
$ 27,007,845
$ 27,416,082
$ 29,552,934
$ 32,020,831
396,321
294,407
-
-
12,314,589
14,376,270
13,633,764
11,3 l 8,443
$ 39,718,755
$ 42,086,759
$ 43,186,698
$ 43,339,274
$ 91,638,075
$ 92,024,052
$ 97,670,451
$ 102,822,498
5,401,212
6,485,259
5,179,337
2,662,285
44,518,753
44,427,009
41,191,181
40,984,870
$141,558,040
$142,936,320
$144,040,969
$ 146,469,653
The City of Seal Beach implemented GASB 34 for the fiscal year ended June
30, 2003. The City has elected to show only eight years of data for this
schedule.
Source: Finance Department, City of Seal Beach.
106
2013
2014
2015
2016
$ 73,693,829
$ 72,498,068
$ 74,296,935
$ 73,939,948
3,271,671
4,426,990
3,842,792
3,866,679
23,570,750
25,953,129
4,097,282
4,713,193
$100,536,250
$ 102,878,187
$ 82,237,009
$ 82,519,820
$ 32,645,747
$ 32,360,440
$ 34,451,074
$ 34,145,069
12,593,950
15,532,304
12,470,553
13,544,158
$ 45,239,697
$ 47,892,744
$ 46,921,627
$ 47,689,227
$ 106,339,576
$ 104,858,508
$ 108,748,009
$ 108,085,017
3,271,671
4,426,990
3,842,792
3,866,679
36,164,700
41,485,433
16,567,835
18,257,351
$ 145,775,947
$ 150,770,931
$ 129,158,636
$ 130,209,047
107
CITY OF SEAL BEACH
Changes in Net Position
Last Eight Fiscal Years
(accrual basis of accounting)
[DU
Fiscal Year
2009
2010
2011
2012
Expenses:
Governmental activities:
General government
$ 5,713,338
$ 6,462,182
$ 8,135,200
$ 6,477,795
Public safety
13,191,707
14,322,026
13,493,413
14,152,774
Community development
1,979,889
3,332,329
1,654,009
1,372,334
Community services
978,504
1,109,303
1,040,723
940,754
Public works
5,307,470
7,745,817
6,304,343
6,577,233
Interest on tong -term debt
1,083,063
889,721
1,012,516
693,065
Total governmental activities expenses
$ 28,253,971
$ 33,861,378
$ 31,640,204
$ 30,213,955
Business -type activities:
Water utility
$ 3,815,798
$ 4,063,497
$ 4,005,747
$ 4,165,575
Sewer utility
1,331,610
1,452,748
1,412,326
1,402,249
Total business -type activities expenses
5,147,408
5,516,245
5,418,073
5,567,824
Total primary government expenses
$ 33,401,379
$ 39,377,623
$ 37,058,277
$ 35,781,779
Program revenues:
Governmental activities:
Charges for services:
General government
$ 2,506,070
$ 2,190,386
$ 1,770,024
$ 1,462,840
Public safety
1,424,996
1,725,519
1,515,727
1,667,184
Community development
95,824
92,163
92,131
130,118
Community services
619,334
737,470,
815,779
930,501
Public works
1,909,011
1,817,794
1,738,965
1,869,575
Operating contributions and grants
1,604,904
1,999,260
1,775,825
5,890,556
Capital grants and contributions
224,264
422,645
23,967
44,405
Total governmental activities
program revenues
$ 8,384,403
$ 8,985,237,
$ 7,732,418
$ 11,995,179
Business -type activities:
Charges for services:
Water utility
$ 8,818,135
$ S,655,433
$ 4,190,824
S 4,376,906
Sewer utility
2,075,431
2,184,287
2,212,559
2,442,608
Operating grants and contributions
-
-
-
-
Total business -type activities
program revenues
$ 7,893,566
$ 7,839,720
$ 6,403,383
$ 6,819,514
Total primary government
program revenues
$ 16,277,969
$ 16,824,957
$ 14,135,801
$ 18,814,693
Net revenues (expenses):
Governmental activities
(19,869,568)
(24,876,141)
(23,907,786)
(18,218,776)
Business -type activities
2,746,158
2,323,475
985,310
1,251,690
Total net revenues (expenses)
$(17,123,410)
$(22,552,666)
$(22,922,476)
$(16,967,086)
[DU
2013
$ 1,632,975
2014
$ 2,074,448
2015
1,384,701
2016
1,521,220
111,008
182,021
186,858
192,878
981,440
1,062,796
$ 5,373,180
$
5,040,070
$
6,551,584
$
6,264,368
15,005,590
15,999, 900
-
16,022,465
20,000
16,972,880
1,781,188
1,306,898
1,393,712
1,100,110
1,272,680
1,079,006
1,129,300
1,036,627
6,212,516
6,902,521
7,862,892
6,956,443
574,763
487.221
444,132
349,652
$ 30,219,917
$
30,815,616
$
33,404,085
$
32,680,080
$ 4,267,840
$
4,439,797
$
4,037,798
$
4,102,228
1,520,478
1,730,940
1,661,225
1,676,651
5,788,318
6,170,737
5,699,023
5,778,879
$ 36,008,235
$
36,986,353
$
39,103,108
$
38,458,959
$ 450,911
$ 1,632,975
$ 1,820,019
$ 2,074,448
1,565,527
1,384,701
2,132,176
1,521,220
111,008
182,021
186,858
192,878
981,440
1,062,796
1,020,316
1,015,517
1,980,116
1,962,242
1,937,305
1,832,289
5,837,093
2,402,490
2,768,435
2,122,139
-
10,000
20,000
10,000
$ 10,926,095 $ 8,637,225 $ 9,885,109 $ 8,768,491
$ 4,924,109 $ 5,092,152 $ 4,556,001 $ 4,261,566
2,675,201 2,775,332 2,765,357 2,466,869
$ 7,599,310 $ 7,867,484 $ 7,321,358 $ 6,728,435
$ 18,525,405 $ 16,504,709 $ 17,206,467 $ 15,496,926
(19,293,822) (22,178,391) (23,518,976) (23,911,589)
1,810,992 1,696,747 1,622,335 949,556
$(17,482,830) $(20,481,644) $(21,896,641) $(22,962,033)
109
CITY OF SEAL BEACH
Changes in Net Position
Last Eight Fiscal Years
(accrual basis of accounting)
Changes in net position
Governmental activities
$ 4,082,330
Fiscal Year
$ 4,710
$ 2,276,108
2009
2010
2011
2012
152,576
Total primary government
General revenues and other changes in net position:
$ 1,378,280
$ 1,104,649
$ 2,428,684
Governmental activities:
Taxes:
Property taxes
$ 11,054,451
$ 10,738,530
$ 10,794,375
$ 10,337,486
Transient occupancy taxes
1,198,376
1,108,785
1,221,491
970,275
Sales tax
3,974,341
4,680,846
4,160,359
4,930,037
Franchise taxes
980,148
941,785
1,030,736
1,008,031
Utility users taxes
5,326,486
5,056,233
5,310,666
5,484,256
Othertaxes
393,570
151,724
228,449
338,176
Motor vehicle in lieu, unrestricted
88,304
76,234
119,022
12,868
Use of money and property
892,341
752,771
735,082
714,342
Other
43,881
319,134
312,316
230,997
Transfers
-
60,375
-
-
Extraordinary Gain(loss)
-
-
-
(3,531,584)
Total governmental activities
$ 23,951,898
$ 23,886,417
$ 23,912,496
$ 20,494,884
Business -type activities:
Use of money and property
$ 278,754
$ 92,259
$ 109,160
$ 96,774
Other
800
12,645
5,469
4,112
Transfers
-
(60,375)
-
-
Extraordinary Gain(loss)
-
-
-
(1,200,000)
Total business-type activities
$ 279,554
$ 44,529
$ 114,629
$ (1,099,114)
Total primary government
$ 24,231,452
$ 23,930,946
$ 24,027,125
$ 19,395,770
Changes in net position
Governmental activities
$ 4,082,330
$ (989,724)
$ 4,710
$ 2,276,108
Business -type activities
3,025,712
2,368,004
1,099,939
152,576
Total primary government
$ 7,108,042
$ 1,378,280
$ 1,104,649
$ 2,428,684
The City of Seal Beach implemented GASB 34 for the fiscal year ended June 30,
2003. The City has elected to show only eight years of data for this schedule.
Source: Finance Department, City of Seal Beach.
110
2013 2014 2015 2016
$ 9,958,198
$
9,498,277
$
10,050,815
$
10,408,505
1,289,007
1,509,095
1,525,723
1,655,376
5,408,756
4,742,859
4,246,080
4,228,730
1,126,398
1,324,860
1,163,595
955,922
4,732,597
4,644,218
4,646,434
4,445,180
328,743
555,804
344,789
197,166
13,333
11,035
10,659
9,960
372,693
674,875
725,720
1,004,572
331,175
544,406
356,749
536,175
-
378,500
378,500
378,500
-
-
694,585
-
$ 23,560,900
$
23,883,929
$
24,143,649
$
23,820,086
$ 84,371
$
133,995
$
109,575
$
176,437
5,060
805
3,698
20,107
-
(378,500)
(378,500)
(378,500)
-
1,200,000
$ 89,431
$
956,300
$
(265,227)
$
(181,956)
$ 23,650,331
$
24,840,229
$
23,878,422
$
23,638,130
$ 4,267,078
$
1,705,538
$
624,673
$
(91,503)
1,900,423
2,653,047
1,357,108
767,600
$ 6,167,501
$
4,358,585
$
1,981,781
$
676,097
111
General fund:
Reserved
Unreserved
Total general fund
All other governmental funds:
Reserved
Unreserved, reported in:
Low and moderate housing
Special revenue funds
Debt service funds
Capital project funds
Total all other governmental funds
General Fund:
Nonspendable
Restricted
Assigned
Unassigned
Total general fund
All Other government funds:
Nonspendable
Restricted
Assigned
Unassigned
Total all Other government funds:
CITY OF SEAL BEACH
Fund Balances of Governmental Funds
Last Eight Fiscal Years
(modified accural basis of accounting)
2009 2010
$ 211,000
$ 30,300
36,254,127
29,988,551
$36,465,127
$30,018,851
$ 1,888,229 $ 1,880,130
1,699,688
1,268,309
2,397,828
2,264,014
2,108,727
1,922,685
4,202,108
4,126,432
$12,296,580 $11,461,570
The City of Seat Beach has elected to .show only eight years of data for this schedule.
Source: Finance Department, City of Seal Beach
112
2011 2012
$ 100 $
9,371,679 9,106,458
16,952,806 19,263,118
$26,324,585 $28,369,576
$ 1,957,603 $ -
5,179,337 2,662,285
2,825,953 87,375
(134,079) (470,485)
$ 9,828,814 $ 2,279,175
2013 2014 2015 2016
$ $ 1,549,735
$ 666,102
$ 682,859
8,301,699 8,227,258
7,623,994
7,610,286
21,149,350 22,314,838
21,711,517
20,811,037
$29,451,049 $32,091,831
$30,001,613
$29,104,182
3,271,671 4,426,990 3,842,792 3,866,679
89,004 71,993 - -
(56,810) (368,629) (525,408) (51,254)
$ 3,303,865 $ 4,130,354 $ 3,317,384 $ 3,815,425
113
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Fines and forfeitures
Contributions from other governments
Miscellaneous
Total revenues
Expenditures
Current:
General government
Public safety
Community development
Parks and recreation
Public works
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Bond issuance costs
Total expenditures
Excess (deficiency) of
revenues over (under)
expenditures
Other financing sources (uses):
Transfers in
Transfers out
Debt issuance
Proceeds on sale of assets
Proceeds of Debt
Capital leases issued
Total other financing
sources (uses)
Extraodinary gain/(loss) on dissolution
of redevelopment agency
Net change in fund balances
Debt service as a percentage of
noncapital expenditures
CITY OF SEAL BEACF4
Changes in Fund Balances of Governmental Funds
Last Eight Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2009
2010
2011
2012
$23,399,203
$22,689,660
$23,624,925
$24,165,883
1,527,024
1,586,337
1,179,759
926,761
1,572,675
[,644,51 ,1
949,294
5,058,175
4,183,018
4,150,239
3,769,165
4,044,566
893,879
626,019
735,082
714,342
944,950
1,029,510
983,702
1,085,291
76,510
337,986
312,316
234,597
$32,597,259
$32,064,262
$31,554,243
$36,229,615
$ 5,611,104
$ 6,280,260
$ 7,211,870
S 5,169,799
12,485,796
13,377,245
13,297,057
13,948,663
1,949,425
3,346,961
t,649,921
1,353,068
908,708
1,036,376
965,222
880,983
3,557,704
2,817,379
4,059,001
4,047,013
4,725,348
9,438,315
6,622,692
5,530,575
1,418,230
1,942,476
2,066,373
2,195,014
1,048,026
903,286
1,027,743
790,581
1,316
-
-
$31,705,657
$39,142,298
$36,899,879
$33,915,696
$ 891,602 $ (7,078,036) $ (5,345,636) $ 2,313,919
$ t 1,180,500 $12,577,549
(13,180,500) (12,780,799)
6,300,000 -
$ 9,370,333 $ 8,209,025
(9,370,333) (8,209,025)
18,614
$ 4,300,000 $ (203,250) $ 18,614 $ -
$ - $ - $ - $ (7,818,567)
$ 5,191,602 $(7,281,286) ___L(5,504,648)
9.2% 9.6% 10.2% 10.5%
The City of Seal Beach has elected to .show only eight years of data for this schedule.
NOTE: On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26
that provides for the dissolution of all redevelopment agencies in the State of California. The
Redevelopment Agency was dissolved on February 1, 2012.
Source: Finance Department. City of Seal Beach
114
2013 2014 2015 2016
$23,831,431
$23,476,034
$23,114,876
$22,828,144
1,247,750
1,369,275
1 ,377,131
1,304,924
3,002.321
869,294
1,725,127
1,388,056
4,117,034
3,895,371
3,961,691
4,214,690
372,693
674,875
725,720
1,004,572
1,063,172
1,013,695
1,146,509
1,110,606
10,209
341,698
330,885
283,222
301.771
579,125
375,588
537.777
$33,946381
$32,219,367
$32,757,527
$32,671,991
$ 5,062,467
$ 4,493,594
$ 5,462,668
$ 5,351,130
14,460,833
15,439,757
15,811,773
16,378,416
1,420,065
1,298,071
1,362,308
1,175,339
1,182,716
1,048,427
1,129,497
1,075.282
4,156,616
4,871,887
5,631,015
4,862.058
3,316,684
2,094,120
4,578,308
2,645,823
1,734,446
1,265,135
1,337,573
1,490,150
562,184
492,935
441,040
355,819
$33,334,017
$31,896,011
$31,003,926
$35,754,182
$ 2,050,370 $ 1,215,441 $ (2,996,655) $ (662,026)
$ 5,825,432 $ 4,363,955 $ 7,012.848 $ 5,602,944
(6,135,432) (4,295,455) (6,919,381) (5,340,308)
1,546,931 - -
$ (310,000) $ 1,615.431 $ 91467 $ 262,636
$ - $ - $ - $ -
$ 1,740,370 $ 2,830,872 $ (2,903,188) $ (399,390)
8.0% 6.1% 5.7% 6.0%
115
CITY OF SEAL BEACH
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
Fiscal Year
Taxable
Ended
Assessed
June 30
Secured
Unsecured
Value
2007
$ 3,373,750,311
$ 211,551,053
S 3,585,301,364
2008
3,691,176,766
184,725,523
3,875,902,289
2009
4,031,469,067
225,415,156
4,256,884,223
2010
4,067,713,475
173,507,894
4,241,221,369
2011
4,114,053,573
167,978,268
4,282,031,841
2012
4,219,133,372
215,211,254
4,434,344,626
2013
4,304,310,243
176,246,398
4,480,556,641
2014
4,408,299,607
172,172,784
4,580,472,391
2015
4,706,609,532
184,449,987
4,891,059,519
2016
4,794,299,125
287,392,225
5,081,691,350
The City of Seal Beach has elected to show only ten years of data for this schedule.
Beginning with the fiscal year ended June 30, 2003, exemptions are netted
directly against the individual property categories.
NOTE:
In 1978 the voters of the State of California passed Proposition 13 which limited
property taxes to a total maximum rate of 1% based upon the assessed value of the
property being taxed. Each year, the assessed value of property may be increased by an
"inflation factor" (limited to a maximum increase of 2 %). With few exceptions,
property is only re- assessed at the time it is sold to a new owner. At that point, the
new assessed value is reassessed at the purchase price of the property sold. The
assessed valuation data shown above represents the only data currently available with
respect to the actual market value of taxable property and is subject to the limitations
described above.
Source: County of Orange, Auditor - Controller Assessed Valuations Detail
116
Redevelopment Agency
Taxable Total
Assessed Direct Tax
Secured Unsecured Value Rate
391,953,993
415,609,878
427,188,898
434,606,835
408.349,567
410,499,845
424,660,008
453,448,325
556,548,983
530,597,248
$ 37,126,974
$ 429,080,967
1.00%
7,010,892
422,620,770
1.00%
5,536,607
432,725,505
1.00%
9,702,557
444,309,392
1.00%
10,330,287
418,679,854
1.00%
6,813,130
417,312,975
1.00%
7,294,003
431,954,011
1.00%
8,270,821
461,719,146
1.00%
3,863,246
560,412,229
1.00%
32,693,247
563,290,495
1.00%
117
City Direct Rates:
City Direct Rate
Overlapping Rates:
Orange County Bonds
Metropolitan Water District
Other Districts
Total Direct Rate
CITY OF SEAL BEACH
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
Fiscal Year
2007 2008 2009 2010
1.00000 1.00000 1.00000 1.00000
0.01599
0.01501
0.01472
0.01673
0.00470
0.00450
0.00430
0.00430
0.00000
0.00000
0.00000
0.01995
1.02069
1.01951
1.01902
1.04098
NOTE:
In 1978, California voters passed Proposition 13 which sets the property tax rate at
a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the
subject property resides within. In addition to the 1.00% fixed amount, property
owners are charged taxes as a percentage of assessed property values for the
payment of the School District bonds.
Source: County of Orange, Auditor - Controller's Office
Source: Orange County Auditor Controller's Office
118
119
121
2011 2012 2013 2014 2015 2016
1.00000 1.00000 1.00000 1.00000 1.00000 1.00000
0.01750
0.01754
0.01881
0.03015
0.03015
0.03092
0.03347
0.00370
0.00350
0.00350
0.00350
0.00350
0.00370
0.03603
0.04124
0.04830
0.04821
0.05219
1.05467
1.05727
1.06355
l .08195
1.0866 1
1.08661
ifs']
CITY OF SEAL BEACH
Principal Property Tax Payers
Current Year and Nine Years Ago
The amounts shown above include assessed value data for both the City and the Redevelopment Agency
Source: HDL Coren & Cone
120
2016
2007
Percent of
Percent of
Total City
Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Value
Value
Value
Seal Beach Mutual $
796,235,092
15.67%
$ 599,053,903
16.72%
Boeing North American
135,437,922
2.67%
164,592,417
4.59%
CPT Shops at Rossmoor LLC
134,285,323
2.64%
-
0.00%
ASN Long Beach LLC
115,879,354
2.28%
78,782,000
2.20%
Terra Funding -Bixby Ranch LLC
87,091,909
1.71%
-
0.00%
Dendreon Manufacturing LLC
80,596,746
1.59%
0.00%
OXY Long Beach Inc
65,000,000
1.28%
-
0.00%
Bixby Office Park Associates LLC
-
0.00%
54,952,512
1.53%
OMP Seal Beach LLC
-
0.00%
50,497,000
1.41%
Al United States Seal Beach Senior Housing
49,732,601
0.98%
-
0.00%
Plains Exploration
-
0.00%
48,347,749
1.35%
Ranch Town Center LLC
44,347,031
0.87%
-
0.00%
Exxon Corporation
-
0.00%
42,706,434
1.19%
Levine Investments LP
-
0.00%
40,803,218
1.14%
Surfside Rental Properties
41,372,170
0.81%
-
0.00%
Century National Properties Inc
-
0.00%
38,540,294
1.08%
Hellman Properties LLC
0.00%
30,623,725
0.85%
$
1,549,978,148
30.50%
$ 1,148,899,252
32.06%
The amounts shown above include assessed value data for both the City and the Redevelopment Agency
Source: HDL Coren & Cone
120
CITY OF SEAL BEACH
Property Tax Levies and Collections
Last Ten Fiscal Years
NOTE
The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also
includes amounts collected by the City and Redevelopment Agency that were passed- through to other agencies. On
December 29, 2011, the California Supreme Court upheld Assembly Bill 1 X26 that provides for the dissolution of all
redevelopment agencies in the State of California. The Redevelopment Agency was dissolved on February 1, 2012.
Source: Orange County Tax Ledger
121
Collected within the
Fiscal
Taxes Levied
Fiscal Year of Levy
Collections in;
Total Collections to Date
Year Ended
for the
Percent
Subsequent
Percent
June 30
Fiscal Year
Amount
of Levy
Years
Amount
of Levy
2007
$8,332,294
$8,055,355
96.68%
$ 91,659,
$ 8,147,014
97.78%
2008
8,102,060
7,854,441
96.94%
151,578,
8,006,019
98.81%
2009
8,567,293
8,285,120
96.71%
107,589'
8,392,709
97.96%
2010
8,362,560
$7,314,382
87.47%
257,026
7,571,408
90.54%
2011
8,385,415
$8,190,860
97.68%
178,283
8,369,142
99.81%
2012
8,608,773
8,404,621
97.63%
125,019
8,529,640
99.08%
2013
8,814,252
8,629,271
97.90%
118,645
8,747,916
99.25%
2014
9,407,263
9,240,201
98.22%
103,007
9,343,208
99.32%
2015
10,438,079
10,222,017
97.93%
73,362'
10,295,379
98.63%
2016
10,472,603
10,196,356
97.36%
81,860
10,278,216
98.14%
NOTE
The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also
includes amounts collected by the City and Redevelopment Agency that were passed- through to other agencies. On
December 29, 2011, the California Supreme Court upheld Assembly Bill 1 X26 that provides for the dissolution of all
redevelopment agencies in the State of California. The Redevelopment Agency was dissolved on February 1, 2012.
Source: Orange County Tax Ledger
121
CITY OF SEAL BEACH
Ratios of Outstanding Debt by Type
Last Nine Fiscal Years
Government -wide Activities
Fiscal Year
Ended
June 30
Capital
Lease
Countrywide
Financing
Authority Lease
Tax
Allocation
Bonds
Pension
Obligation
Bonds
Fire
Station
Bonds
Climatec
Advance
to
RDA
Total
Governmental
Activities
2008
631,674
S 435,000
$ 6,800,000
$10,945,000
$ -
S -
$ -
$ 18,811,674
2009
534,444
335,000
6,410.000
10,219,000
6,195,000
-
-
23,693,444
2010
433,968
230,000
6.005,000
9,307,000
5,775,000
-
-
21,750,968
2011
323,595
120,000
5,575,000
8,311,000
5,355,000
-
1,200.000
20,884,595
2012
202,581
-
-
7,227,000
4,935,000
-
1,200.000
13,564,581
2013
70,135
-
-
6,045,000
4,515,000
-
1,200,000
11,830,135
2014
-
-
-
5,270,000
4,095,000
1,562,400
1,200.000
12,127,400
2015
-
-
-
4,411,000
3,675,000
1,488,358
952,344
10,526.702
2016
-
-
-
3,461,000
3,255,000
1,368,208
714,110
8,798,318
The City of Seal Beach has elected to show only nine years ofdara for this schedule
Notes:
Details regarding the City's outstanding debt can be found in the notes to the financial statements
In addition on December 29, 2011, the California Supreme Court upheld Assembly Bill I X26
that provides for the dissolution of all redevelopment agencies in the State of California. The
Redevelopment Agency was dissolved on February I, 2012. The debt was transferred to the
Successor Agency to the Seal Beach Redevelopment Agency.
See the schedule of Demographic and Economic Statistics on page 125 for personal income and
population data.
'Data not readily available.
Source: Finance Department, City of Seal Beach
122
Business -type Activities
Economic
S 3,777,388
$ 22,589,062
*
$ 874
-
3,676,962
27370,406
Development
Capital
Sewer
Sewer
Sewer Total
Total
Percentage
Debt
Administration
Equipment
Certificates of
2011 Installment
State Revolving Business -type
Primary
of Personal
Per
Loan
Lease
Participation
Agreement
Agreement Activities
Government
Income
Capita'
132,388 $ - S 3,645,000 S - $
121,962 - 3,555,000 -
111,016 - 3,460,000 -
99,521 - - 3,200,000
87,453 - - 3.085,000
74,780 - - 2,965,000
- - - 2,835,000
- 2,705,000
- 2,565,000
123
-
S 3,777,388
$ 22,589,062
*
$ 874
-
3,676,962
27370,406
*
1,058
-
3,571,016
25321,984
*
974
-
3,299,521
24,184,116
*
930
-
3.172,453
16,737,034
*
687
4,645,401
7,685,181
19,515,316
*
750
4,068,778
6,903,778
19,031,178
*
732
3.893,311
6598,311
17,125,013
*
697
3.718,034
6,283,034
15,081,352
*
613
CITY OF SEAL BEACH
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal Year
Tax
Private
Percent of
Ended
Allocation
Placement
Total
Assessed
Per
June 30
Bonds
Bonds
Bonds
Value I
Capita
2007
$ 7,170,000
$
$ 7,170,000
0.15%
$ 278
2008
6,800,000
6,800,000
0.14%
263
2009
6,410,000
16,414,000
22,824,000
0.47%
882
2010
6,005,000
15,082,000
21,087,000
0.43%
811
2011
5,575,000
13,666,000
19,241,000
0.38%
790
2012
-
12,162,000
12,162,000
0.24%
497
2013
-
10,560,000
10,560,000
0.21%
406
2014
-
9,365,000
9,365,000
0.19%
360
2015
-
8,086,000
8,086,000
0.15%
329
2016
-
6,716,000
6,716,000
0.12%
273
General bonded debt is debt payable with governmental fund resources and general
obligation bonds recorded in enterprise funds (of which, the City has none).
Assessed value has been used because the actual value of taxable property is not
readily available in the State of California.
NOTE:
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 that provides for the dissolution of
all redevelopment agencies in the State of California. The Redevelopment Agency was dissolved on February 1, 2012.
The debt was transferred to the Successor Agency to the Seal Beach Redevelopment Agency
Source: Finance Department, City of Seal Beach
124
CITY OF SEAL BEACII
Schedule of Direct and Overlapping Debt
.Tune 30, 2016
2015 -16 Assessed Valuation: $5,081,691,350
non- bonded capital lease obligations.
Ratios to Adjusted Assessed Valuation:
Orange County General Fund Obligations
1.018%
Total Debt
City's Share of
OVERLAPPING TAX AND ASSESSMENT DEBT:
%Applicable fI
6/30/2016
Debt 6/30/16
Metropolitan Water District
0.207%
$ 92,865,000
$ 192,231
Coast Community College District
3.073%
498,864,504
15,330,106
North Orange It. Community College District
1.251%
271,564,001
3,397,266
Los Alamitos Unified School District School Facilities Imp District No.1
50.986%
100,990,124
51,490,825
Huntington Beach Union High School District
0.0001%
198,629,998
199
City of Seal Beach Community Facilities District No. 2002 -1
100.000%
3,480,000
3,480,000
City of Seal Beach Community Facilities District No. 2005 -1
100.000%
8,450,000
8,450,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 82,340,627
OVERLAPPING GENERAL FUND DEBT:
non- bonded capital lease obligations.
Ratios to Adjusted Assessed Valuation:
Orange County General Fund Obligations
1.018%
124,614,000
S 1,268,571
Orange County Pension Obligations
1.018%
353,417,858
3,597,794
Orange County Board of Education Certificates of Participation
1.018%
14,840,000
151,071
Municipal Water District of Orange County Water Facilities Corporation
1.215%
2,770,000
33,656
North Orange County Regional Occupation Program Certificates of Participation
4.621%
10,190,000
470,880
Coast Community College District Certificates of Participation
3.073%
3,765,000
115,698
Los Alamitos Unified School District Certificates of Participation
55.563%
42,003,327
23,338,309
Other School District General Fund Obligations
0.001 - 0.0003%
89,846,090
141
City of Seal Beach Fire Station Lease Revenue Bonds
100%
3,255,000
3,255,000
City of Seal Beach Lease Agreement
100%
1,368,208
1,368,208
City of Seal Beach Taxable Pension Obligations
100%
3,461,000
3,461,000
TOTAL GROSS OVERLAPPING GENERAL FUND DEBT
$ 37,060,328
Less: MWDOC Water Facilities Corporation (100% self-supporting)
33,656
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT
$ 37,026,672
TOTAL DIRECT DEBT
$ 8,084,208
TOTAL GROSS OVERLAPPING DEBT
$114,416,747
SUBTOTAL OVERLAPPING DEBT
$1 14,383,091
GROSS COMBINED TOTAL DEBT $122,500,955 (z1
GRAND TOTAL OF DIRECT AND OVERLAPPING DEBT $122,467,299
n) Percentage of overlapping agency's assessed valuation located within boundaries of the city.
R1 Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and
non- bonded capital lease obligations.
Ratios to Adjusted Assessed Valuation:
Total Overlapping Tax and Assessment Debt
1.62%
Total Direct Debt ($8,084,208)
0.16%
Gross Combined Total Debt
2.41%
Net Combined Total Debt
2.41%
Ratios to Redevelopment Incremental Valuation ($530,289,926)
Total Overlapping Tax Increment Debt
Source: California Municipal Statistics, Inc.
125
0.58%
Debit limit
Total net debt applicable to limit
Legal debt margin
Total debt applicable to the limit
as a percentage of debt limit
Legal Debt Margin Calculation for Fiscal Year 2016
Assessed Valuation
Debt percentage
Debt limit
Debt applicable to limit
Legal debt margin
CITY OF SEAL BEACH
Legal Debit Margin Information
Last Nine Years
Fiscal Year
2008 2009 2010 2011
$ 644,778,459 S 703,441,459 $ 702,829,614 $ 705,106,754
$ 644,778,459 S 703,441,459 S 702,829,614 $ 705,106,754
0.0% 0.0% 0.0% 0.0%
$ 5,644,981,845
15%
$ 846,747,277
$ 846,747,277
The City has elected to show only nine years ofdata for this schedule.
Note: 'Under state finance law, the City of Seal Beach's outstanding general obligation debt should
not exceed 15 percent of total assessed property value. By law, the general obligation debt
subject to the limitation may be offset by amounts set aside for repaying general obligation bonds.
Source: Orange County Tax Assessors Office
126
2012 2013 2014 2015 2016
$ 760,030,328 $ 736,876,598 $ 756,328,731 $ 817,720,762 $ 846,747,277
$ 760,030,328 $ 736,876,598 $ 756,328,731 $817,720,762 $ 846,747.277
0.0% 0.0% 0.0% 0.0% 0.0%
127
CITY OF SEAL BEACH
Pledged- Revenue Coverage
Last Ten Fiscal Years
2000 Tax Allocation Refunding Bonds
Fiscal Year
Ended Tax Debt Service
June 30 Increment Principal Interest Coverage
2007
$ 2,426,176
$ 355,000
$ 373,933
3.33
2008
1,933,042
370,000
357,514
2.66
2009
1,930,719
390,000
338,879
2.65
2010
1,768,919
405,000
318,054
2.45
2011
1,784,964
430,000
296,183
2.46
2012
1,034,695
450,000
396,408
1.22
2013
1,790,960
470,000
330,684
2.24
2014
1,222,425
495,000
229,406
1.69
2015
1,084,135
515,000
204,269
1.51
2016
1,329,344
545,000
177,413
1.84
The City has elected to show only ten years of data for this .schedule.
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
Source: Finance Department, City of Seal Beach
128
Calendar
Year
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
CITY OF SEAL BEACH
Demographic and Economic Statistics
Last Ten Calendar Years
Population
25,388
25,752
25,851
25,881
26,010
24,354
24,487
24,591
24,586
25,078
Personal
Income
(in thousands)
$ 1,142,089
1,218,343
1,236,921
1,194,776
1,045,654
1,035,313
1,065,674
1,082,963
1,074,777
1,141,053
The City has elected to show only ten years of data.for this schedule.
Sources: HDL Caren & Cone
129
Per Capita
Personal
Unemployment
Income
Rate
$ 44,985
2.5%
47,311
2.8%
47,848
3.8%
46,164
6.6%
40,202
7.1%
42,511
6.4%
43,520
4.1%
44,039
3.7%
43,715
4.8%
45,500
3.9%
Business Name
CITY OF SEAL BEACH
TOP 25 SALES TAX PRODUCERS
FOR FISCAL YEARS 2015 -16 & 2006 -07
2015 -16
2006 -07
Business
Category
76
X
X
Service Stations
AT &T Mobility
X
Electronics /Appliance Store
Bed Bath & Beyond
X
X
Home Furnishings
Chevron
X
X
Service Stations
Chevron
X
X
Service Stations
Chilis
X
Casual Dining
CVS Pharmacy
X
X
Drug Stores
Energy Tubulars
X
X
Petroleum Prod /Equip
Home Goods
X
X
Home Furnishings
In N Out Burgers
X
Quick- Service Restaurants
Islands
X
Casual Dining
Kohls
X
X
Department Stores
Leisure World Automotive 76
X
Service Stations
Mahe
X
Casual Dining
Marshalls
X
Family Apparel
Mobil
X
X
Service Stations
Mobil
X
Service Stations
Old Ranch Country Club
X
X
Leisure /Entertainment
Original Parts Group
X
X
Automotive Supply Stores
Pavillions
X
X
Grocery Stores Liquor
Petsmart
X
Specialty Stores
Pinnacle Petroleum
X
Petroleum Prod/Equip
Ralphs
X
X
Grocery Stores Liquor
Roger Dunn Golf Shop
X
X
Sporting Goods /Bike Stores
Seal Beach Chevron
X
Service Stations
Smog Pros
X
Service Stations
Spaghettini
X
X
Fine Dining
Sprouts
X
Grocery Stores Beer /Wine
Stars Floral Supplies
X
Florist Shops
Target
X
X
Discount Dept Stores
Toys R Us
X
Specialty Stores
Ulta
X
Specialty Stores
Walts Wharf
X
X
Fine Dining
World Wide Technology
X
Office Equipment
2015 -16 Percent of Fiscal Year Total Paid by Top 25 Accounts = 58.65%
2006 -07 Percent of Fiscal Year Total Paid by Top 25 Accounts = 72.3 1 %
Firms Listed Alphabetically: Period April 2015 Thou March 2016
Source: Hinderliter, de Llamas & Associates, State Board of Equalization
130
CITY OF SEAL BEACH
Full -time and Part -time City Employees
by Function
Last Six Fiscal Years
The City of Seal Beach has elected to show only the previous six years of data for this .schedule.
Source: Finance Department, City of Seal Beach
131
Full -Time and Part -Time
Employees as of June 30,
Function
2011
2012
2013 2014
2015
2016
General government
14.52
13.83
10.97 10.56
14.64
14.34
Public safety
65.88
64.77
63.91 76.78
79.13
74.12
Public works
15.40
8.36
11.49 11.03
10.94
4.97
Community
development
10.18
8.80
10.60 12.01
18.16
17.25
Water
12.68
12.48
12.29 12.60
13.80
13.82
Sewer
3.75
3.95
3.95 5.28
5.91
7.11
Total
122.41
112.19
113.21 128.26
142.58
13 1.61
The City of Seal Beach has elected to show only the previous six years of data for this .schedule.
Source: Finance Department, City of Seal Beach
131
CITY OF SEAL BEACH
Operating Indicators
by Function
Last Six Fiscal Years
The City of Seal Beach has elected to show only the previous six years of data far this
schedule.
Source: City of Seal Beach
132
2011
2012
2013
2014
2015
2016
Police:
Arrests
834
705
819
758
798
790
Parking citations issued
17,377
18,528
18,451
18,931
21,043
19,264
Public works:
Street centerline miles resurfaced
3
2
2
1
2
1
Number of public right of way permits issued
141
127
96
140
151
184
Number of street related service requests
124
121
134
35
45
40
Parks and recreation:
Number of recreation classes
457
456
2,156
678
781
680
Number of facility rentals
308
562
3,182
1,763
2,633
557
Water:
Number of water meters replaced
158
112
128
85
57
76
Acre feet of water used
3,498
3,534
3,818
3,878
3,540
3,208
Sewer:
Number of feet of sewer cleaned
184,047
203,584
245,986
253,099
253,099
217,619
Number of catch basins cleaned
350
417
417
401
434
458
The City of Seal Beach has elected to show only the previous six years of data far this
schedule.
Source: City of Seal Beach
132
The City of Seal Beach has elected to shore only the previous six years of
data for this schedule.
Source: City of Seal Beach
133
2016
2
34
43
86
23
10
3
72
2
37
4
7
CITY OF SEAL BEACH
Capital Asset Statisitics
by Function
Last Six Fiscal Years
2011
2012 2013
2014
2015
Police:
Stations
2
2
2
2
2
Patrol units
36
34
34
34
34
Public works:
Streets (center tine miles)
43
43
43
43
43
Sidewalk (miles)
86
86
86
86
86
Signalized intersections
23
23
23
23
23
Parks and recreation:
Parks
10
10
10
10
10
Community centers
3
3
3
3
3
Water:
Water pipe (miles)
72
72
72
72
72
Reservoirs
2
2
2
2
2
Sewer
Sanitary sewers (miles)
37
37
37
37
37
Storm sewers (miles)
4
4
4
4
4
Sewer lift/pump stations
7
7
7
7
7
The City of Seal Beach has elected to shore only the previous six years of
data for this schedule.
Source: City of Seal Beach
133
2016
2
34
43
86
23
10
3
72
2
37
4
7
THIS PAGE INTENTIONALLY LEFT BLANK
134
Attachment "®"
LISL07��
CPAs AND ADVISORS
INDEPENDENT ACCOUNTANTS' REPORT ON AGREED -UPON
PROCEDURES APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS
To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet
No. 6 (or other alternative computation) of the City of Seal Beach, California (the City), for the year ended
June 30, 2016. These procedures, which were agreed to by the City and the League of California Cities
(as presented in the publication entitled Agreed -Upon Procedures Applied to the Appropriations Limitation
Prescribed by Article XI II -B of the California Constitution), were performed solely to assist the City in meeting
the requirements of Section 1.5 of Article XIII -B of the California Constitution. The City's management is
responsible for the Appropriations Limit Worksheet No. 6 (or other alternative computation).
This agreed -upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is
solely the responsibility of those parties specified in this report. Consequently, we make no representation
regarding the sufficiency of the procedures described below, either for the purpose for which this report has
been requested, or for any other purpose.
The procedures performed and our findings were as follows:
We obtained the completed Worksheets No. 1 through No. 7 (or other alternative computations) and
compared the limit and annual adjustment factors included in those worksheets to the limit and annual
adjustment factors that were adopted by resolution of the City Council. We also compared the
population and inflation options included in the aforementioned worksheets to those that were
selected by a recorded vote of the City Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Worksheet No. 6, we multiplied line A, last year's limit, by
line D, ratio of change, and agreed the resulting amount to line E, this year's limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the current year information presented in the accompanying Appropriations Limit
Worksheet No. 6 to the other worksheets described in No. 1 above.
Finding: No exceptions were noted as a result of our procedures.
4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit
Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the prior year.
Finding: No exceptions were noted as a result of our procedures.
0 PrimeGlobal
LS L9:::
44D Pf] \'3ilNi
To the Honorable Mayor and Members of the City Council
City of Seal Beach, California
We were not engaged to, and did not perform an audit, the objective of which would be the expression of an
opinion on the accompanying Appropriations Limit Worksheet No. 6 (or other alternative computation).
Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might
have come to our attention that would have been reported to you. No procedures have been performed with
respect to the determination of the appropriation limit for the base year, as defined by the League publication
entitled Article XIIIB Appropriations Limitation Uniform Guidelines.
This report is intended solely for the information and use of the City of Seal Beach, California, and is not
intended to be, and should not be, used by anyone other than this specified party.
04, .44
Brea, California
April 28, 2016
CITY OF SEAL BEACH
2015 -2016
APPROPRIATIONS LIMIT CALCULATION
A. 2014 -2015 APPROPRIATIONS LIMIT: $ 25,505,824
B. 2015 -2016 CHANGE IN PER CAPITA PERSONAL
INCOME:
C. 2014 -2015 CHANGE IN POPULATION:
D. RATIO OF CHANGE (1.0382 X 1.0045): X 1.0428719
E. 2015 -2016 APPROPRIATIONS LIMIT: $ 26.599.307
($25,505,824 X 1.0428719)
3.82%
0.45%