HomeMy WebLinkAboutItem Gr� 5f A(
AGENDA STAFF REPORT
'`C4(60RNPi
DATE: January 22, 2018
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, 2017
SUMMARY OF REQUEST:
That the City Council receive and file the following documents for fiscal year
ending June 30, 2017:
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 The Pun Group Accountants & Advisors has completed the
annual audit of the City of Seal Beach (City) for the fiscal year ended June 30,
2017. 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,
2017. The 2017 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 January 11, 2018.
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 documents for fiscal year
ending June 30, 2017:
A. Audit Communication Letter
B. Report on Internal Control
C. Comprehensive Annual Financial Report (CAFR)
D. Appropriations Limit Final Report
SUBMITT D BY: NOTED AND APPROVED:
f
Victoria L. Beatley JWO. Ingram, City Ma ag r
Director of Finance/City Treasurer
Attachments:
A. Audit Communication Letter
B. Report on Internal Controls
C. Comprehensive Annual Financial Report (CAFR)
D. Appropriations Limit Final Report
Page 2
Attachment "A"
THE
PUN GROUP
ACCOUNTANTS 6m ADVISORS
December22,2017
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
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 Seal Beach (the "City') for the year ended June
30, 2017. Professional standards require that we provide you with information about our responsibilities under
generally accepted auditing standards and Government Auditing Standards, as well m certain information related to
the planned scope and timing of our audit. We have communicated such information in our letter to you dated May
3, 2017. Professional standards also require that we communicate to you the following information related to our
audit
Significant Audit F9ndings
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 Note I to the financial statements. As described in Note 1 to the financial
statements, the City changed accounting policies as follows:
GASB Statement No. 77, Tax Abatement Disclosure. This Statement requires governments that enter into tax
abatement agreements to disclose the following information about the agreements: 1) Brief descriptive
information, such as the tax being abated, the authority under which tax abatements are provided, eligibility
criteria, the mechanism by which taxes are abated, provisions for recapturing abated taxes, and the types of
commitments made by tax abatement recipients. 2) The gross dollar amount of taxes abated during the period 3)
Commitments made by a government, other than to abate taxes, m part of a tax abatement agreement. This
statement did not have a significant impact on the City's financial statements for the year ended Jane 30, 2017.
GASB Statement No. 78, Pensions Provided through Certain Muitiple-Employer Defined Benefit Pension
Plans (GASB 78). This Statement amends the scope and applicability of Statement 68 to exclude pensions
provided to employees of state or local governmental employers through a cost-sharing multiple -employer
defined benefit pension plan that (1) is not a state or local governmental pension plan, (2) is used to provide
defined benefit pensions both to employees of state or local governmental employers and to employees of
employers that are not state or local governmental employers, and (3) has no predominant state or local
governmental employer (either individually or collectively with other state or local governmental employers
that provide pensions through the pension plan). This Statement establishes requirements £or recognition and
measurement of pension expense, expenditures, and liabilities; note disclosures; and required supplementary
information for pensions that have the characteristics described above. This statement did not have a significant
impact on the City's financial statements for the year ended Jane 30, 2017.
200 Fast Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Tel: 949-777-8800 • Fax: 949-777-8850
www.pungroup.com
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
Seal Beach, California
Page 2
GASB Statement No. 80, Blending Requirements for Certain Component Units (GASB 80). The objective of
this Statement is to improve financial reporting by clarifying the financial statement presentation requirements
for certain component units. This Statement amends the blending requirements for the financial statement
presentation of component units of all state and local governments. The additional criterion requires blending of
a component unit incorporated as a not-for-profit corporation in which the primary government is the sole
corporate member. The additional criterion does not apply to component units included in the financial
reporting entity pursuant to the provisions of Statement No. 39, Determining Whether Certain Organizations
Are Component Units. This statement did not have a significant impact on the City's financial statements for
the year ended June 30, 2017.
GASB Statement No. 82, Pension Issues (GASB 82). The objective of this Statement is to address certain
issues that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68,
Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for
Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to
Certain Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding (1)
the presentation of payroll -related measures in required supplementary information, (2) the selection of
assumptions and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial
reporting purposes, and (3) the classification of payments made by employers to satisfy employee (plan
member) contribution requirements. This statement did not have a significant impact on the City's financial
statements for the year ended June 30, 2017.
No other new accounting policies were adopted and the application of existing policies was not changed during
2017. 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 estimates affecting the City's financial statements were:
• Management's estimate of the investment fair market value is based on information
provided by US Bank for the City's investments. We evaluated the key factors and
assumptions used to develop the investment fair market value in determining that it is
reasonable in relation to the financial statements taken as a whole.
• Management's estimate of the depreciation on capital assets is based on the industry
standard and past experience on actual useful life of the asset groups. We evaluated the key
factors and assumptions used to develop the depreciation on capital assets in determining
that it is reasonable in relation to the financial statements taken as a whole.
• Management's estimate of the annual other post employment benefit (" OPEB") cost is
based on the actuarial valuation. We evaluated the key factors and assumptions used to
develop the annual OPEB cost in determining that it is reasonable in relation to the
financial statements taken as a whole.
• Management's estimate of the net pension liabilities is based on the proportionate share of
actuarial valuation on total pension liability and based on proportionate share of the audited
fiduciary net position for Ca1PERS plans. We evaluated the key factors and assumptions
used to develop the net pension liability in determining that it is reasonable in relation to
the financial statements taken as a whole.
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
Seal Beach, California
Page 3
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement
users. The most sensitive disclosures affecting the financial statements were:
• Note 1 — Summary of Significant Accounting Policies
• Note 9 — Defined Benefit Pension Plan
• Note 10 — Other Postemployment Benefit Plan
• Note 12 — Commitments and Contingencies
• Note 14 — Prior Period Adjustments
The financial statement disclosures are neutral, consistent, and clear.
DiJftcuhies Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit,
other than those that are clearly 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 each
opinion unit's 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 he 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 December 22 2017.
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 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 am responses were not a condition to our retention.
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
Seal Beach, California
Page 4
Other Matters
We applied certain limited procedures to the Management's Discussion and Analysis, Budgetary Comparison
Schedules, Schedule of the City's Proportionate Share of the Net Pension Liabilities and Related Rations, Schedule
of the City's Contributions, and Schedule of Funding Progress — Other Postemployment Benefits, which are
required supplementary information C RSPj 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.
We were engaged to report on the Combining and Individual Normtjor Fund Financial Statements and the
Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual, which accompany the
financial statements but are not RSL 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.
We were not engaged to report on the hrtroductory and Statistical Sections, which accompany the financial
statements but are not RSI. Such information has 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 it.
Restriction on Use
This information is intended solely for the use of the City Council 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,
Qct L� L�
Santa Ana, California
Attachment "B"
City of Seal Beach
Seal Beach, California
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
For the Year Ended June 30, 2017
THE
PUN GFOUP
ACCOUN MN 1,& 41n95J0.S
PUN OUP
ACCOUNTANTS O. ADVISORS
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND
OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERIVMENTAUDITTNGSTAAFDARDS
lndeoendentAudBors'Jteoor!
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
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 infuriation of the City of Seal Beach, California (the "City") as of and
for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the
City's basic financial statements, and have issued our report thereon dated December 22, 2017.
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.
A deficiency in internal control exists when the design or operation of a control does nut allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. Amaterial 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. Asignificant 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.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section 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 have not been identified.
Given these limitations, during am audit we did not identify any deficiencies in internal control that we consider to
be material weaknesses. We did identify certain deficiencies in internal control, described in the accompanying
Schedule of Findings and Responses that we consider to be significant deficiencies as item 2017-001.
200 Fast Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Tel: 949-777-8800 • Fax: 949-777-WSO
w .pungroup.c rn
City of Seal Beach
Schedule of Findings and Responses
For the Year Ended June 30, 2017
Finding 2017-001 Pension Accounting
Criteria:
An effective internal control system on financial reporting over pension provides reasonable assurance for the
reliability of financial information.
Government Accounting Standard Board ("GASB") Statement No. 68 — Accounting and Financial Reporting for
Pensions — an amendment of GASB Statement No. 27, was effective for fiscal years beginning after June 15, 2014.
This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources,
deferred inflows of resources, and expenselexpenditures.
Condition:
The City participates in the California Public Employees' Retirement System ("CalPERS") for both miscellaneous
and safety employees, in the cost-sharing plans. GASB Statement No. 68 was a new accounting pronouncement that
was implemented during the fiscal year 2014-15. The City hired a consultant for the implementation for both fiscal
year 2014-15 and 2015-16 due to the complexity of the calculation. During the audit of net pension liabilities and
related deferred outflows and inflows of resources for the fiscal year 2016-17, we noted that the prior year pension
amounts were not correctly allocated between the governmental activities and the business -type activities.
Furthermore, we noted that the differences between the proportionate share of contribution and City's actual
contribution contained errors in calculation materially.
Cause:
During the first year of implementing GASB Statement No. 68 in the year ended June 30, 2015, the City used the
CaIPERS GASB 68 accounting report to prepare the pension entries. For the year ended June 30, 2016, CaIPERS
discontinued providing the individual employer's GASB 68 accounting report for the cost-sharing plans. Instead, a
guideline was issued to assist the public agencies to calculate the pension amounts. Due to unfamiliarity with this
complex calculation, the City incorrectly calculated and allocated the pension amounts.
Effect:
Prior period adjustments in the amounts of $(383,283) and $(598,085) were made to July 1, 2016 governmental and
business -type activities' net position, respectively, to correct the net pension liabilities and related deferred outflows
and inflows of resources.
Recommendation:
We recommended that the City pursue more in-depth training on GASB implementations, so that staff can monitor
and review the work done by specialists.
Management Response:
The City will implement the recommendation as noted in the audit finding and understands management's
responsibility. It should be noted that the City recorded its transactions in good faith based on the reliance of entries
submitted by a consulting CPA firth that is expert in the analysis and implementation of the GASB 68.
Attachment "C"
CMy 11
t�^ S
COlME JTXSIV .,.A NUAL 't
FINANCIAL REPORT- T
VOR THE Vt rNAD J UNE 30, 2017
r
City of Seal Beach
Comprehensive Annual Financial Report
For the Year Ended June 30, 2017
Prepared by the Finance Department
Victoria L. Beatley, CCMT
Director of Finance/City Treasurer
The City of Seal Beach provides
excellent city services to enhance
the quality of life and to
preserve our small town character.
G,SE to
4 E
�i
\C'FORN�P
The City of Seal Beach Values:
Excellent Customer Service
Mutual Respect
Teamwork
Professionalism
Honest & Ethical Behavior
Cover photos courtesy of Clinton /no, MPA Student (Cal Suite Long Beach)
City of Seal Beach
Comprehensive Annual Financial Report
For the Year Ended June 30, 2017
Table of Contents
pace
INTRODUCTORY SECTION (UNAUDITED)
Letterof Transmittal................................................................................................................................................... i
Certificate of Achievement for Excellence in Financial Reporting —
Government Finance Officers Association........................................................................................................ vi
OrganizationalChart ................................................................................................................................................ vii
Principal Officials of the City of Seal Beach..........................................................................................................viii
Independent Auditors' Reports:
Report on the Financial Statements
Management's Discussion and Analysis (Required Supplementary Information) (Unaudited) ............................. 5
Basic Financial Statements:
Government—Wide Financial Statements:
Statement of Net Position .......................
Statement of Activities ...........................
Fund Financial Statements:
Governmental Fund Financial Statements:
16
18
BalanceSheet.............................................................................................................................................. 25
Reconciliation of the Governmental Funds Balance Sheet
to the Government—wide Statement of Net Position............................................................................ 26
Statement of Revenues, Expenditures,
and Changes in Fund Balances............................................................................................................. 27
Reconciliation of the Governmental Funds Statement of Revenues,
Expenditures, and Changes in Fond Balances to the Government—Wide
Statementof Activities ......................................................................................................................... 28
Proprietary Fund Financial Statements.
Statementof Net Position........................................................................................................................... 31
Statement of Revenues, Expenses, and Changes in Net Position............................................................... 32
Statementof Cash Flows.................................................................................... 11
Fiduciary Fund Financial Statements:
Statement of Fiduciary Net Position ..................
Statement of Change in Fiduciary Net Position.
Index to the Notes to the Basic Financial Statements
Notes to the Basic Financial Statements
38
41
43
City of Seal Beach
Comprehensive Annual Financial Report
For the Year Ended June 30, 2017
Table of Contents (Continued)
FINANCIAL SECTION !Continued)
Required Supplementary Information (Unaudited):
Page
Budgetary Comparison Schedule — General Fond.........................................................................................................
87
Budgetary Comparison Schedule — Citywide Grant Special Revenue Fond..................................................................
88
Notes to the Budgetary Comparison Schedule...............................................................................................................
89
Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios ........................................
90
Schedule of the City's Contributions..............................................................................................................................
91
Schedule of Funding Progress — Other Postemployment Benefits.................................................................................
92
Supplementary Information:
Nonmajor Governmental Funds:
CombiningBalance Sheet.................................................................................................................................
96
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .......................................
101
Schedule of Revenues, Expenditures, and Changes in Fond Balances — Budget and Actual
Nonmajor Special Revenue Funds:
StreetLighting....................................................................................................................................
106
Supplemental Law Enforcement........................................................................................................
107
DetentionCenter................................................................................................................................
108
PoliceAsset Forfeiture.......................................................................................................................
109
AirQuality Improvement...................................................................................................................
110
ParksImprovement............................................................................................................................
111
TrafficImpact AB 1600.....................................................................................................................
112
StateGasoline Tax.............................................................................................................................
113
MeasureM2........................................................................................................................................
114
Community Development Block Grant..............................................................................................
115
PoliceGrant........................................................................................................................................
116
LandscapeDistrict..............................................................................................................................
117
HeronPointe.......................................................................................................................................
118
PacificGateway..................................................................................................................................
119
SealBeach Cable...............................................................................................................................
120
Nonmajor Debt Service Fund -
CityDebt............................................................................................................................................
121
Agency Fund Financial Statements:
Combining Statement of Assets and Liabilities.............................................................................................. 124
Combining Statement of Changes in Assets and Liabilities........................................................................... 125
City of Seal Beach
Comprehensive Annual Financial Report
For the Year Ended June 30, 2017
Table of Contents (Continued)
STATISTICAL SECTION (Unaudited) Pan
NetPosition by Component.........................................................................................................................................
128
Changesin Net Position...............................................................................................................................................
130
FundBalances of Governmental Fonds.......................................................................................................................
134
Changes in Fund Balances of Governmental Funds.....................................................................................................
136
Assessed Value and Estimated Actual Value of Taxable Property..............................................................................
138
Direct and Overlapping Property Tax Rates................................................................................................................
139
PrincipalProperty Taxpayers.......................................................................................................................................
I40
Property
Tax Levies and Collections...........................................................................................................................
141
Ratios
of Outstanding Debt by Type............................................................................................................................
142
Ratios of General Bonded Debt Outstanding...............................................................................................................
144
Schedule of Direct and Overlapping Debt....................................................................................................................
145
LegalDebt Margin Information...................................................................................................................................
146
Pledged -Revenue Coverage.........................................................................................................................................
148
Demographic and Economic Statistics.........................................................................................................................
149
Top25 Sales Tax Producers.........................................................................................................................................
150
Full -Time and Part -Time City Employees by Function...............................................................................................
151
OperatingIndicators by Function.................................................................................................................................
152
Capital Asset Statistics by Function.............................................................................................................................
153
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December 22, 2017
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,
2017. 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.
The City's financial statements have been audited by The Pon Group, 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 unqualified opinion that the
City of Seal Beach's financial statements for the year ended June 30, 2017, 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
tum elect the Mayor and Mayor Pro Tem from among themselves for a one year tern. 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 -today 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 and 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 bring his small general store
building from Los Alamitos to Bay City where he set it down at the southwest comer 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, 2017, 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 2016-2017 the tax revenue increased overall, primarily due to an increase in property
values. Property Tax and Franchise Tax revenues increased 6% in the General Fund and Sales
Tax increased 40/a compared with the projected revenues at the beginning of the FY 2016-2017.
The primary reason for the increase in sales tax was the result of continued improvement in
general consumer goods, fuel and service stations, and State and County Pool revenue.
For the upcoming fiscal year, property taxes are expected to increase as the result of continued
improvement in real estate values. On the other hand, sales tax is expected to remain unchanged.
With the recent passage of SBI, which affects the tax rates on fuel, they City is now expecting to
see a related increase in sales tax revenue.
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. Over the last two years, the City has developed a Mission Statement (inside
the front cover), a Values Statement, and Strategic Plan initiatives. The Strategic Plan goals are
approved and/or affirmed by the City Council twice a year. The Strategic Plan goals and
objectives are updated monthly at a City Council meeting.
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 a tot lot replacement, street sealing on various streets, sidewalk
replacement and City Hall and Chambers remodel.
FINANCIAL 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: (1) 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 the
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.
IIW111 t1A.9
GFOA Award Program — Comprehensive Annual Financial R ort
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, 2016. This was
the sixteenth consecutive year that the City has received this prestigious award. In order to be
awarded a Certificate of Achievement, a government most 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.
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 The Pun Group, LLP for their
professional assistance.
Respectfully submitted,
Victoria L. Beatley
Director of Finance/City Treasurer
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, 2016
�/ 1�0''�
Executive Director/CEO
Peyaue a mll
Enforcement
Use and Coaalel ladles
City of Seal Beach
Organizational Chart
CITIZENS OF SEAL BEACH
MAYOR AND CITY COUNCIL
Management
Over All Departments
tads Pumanean
imputer Network
AEminlstratice
ergovemmental ReMWns
.ail StuEieslProjects
Benefits
Meintenenca
r Maintenance
Prolacb
Dreina
g Maintenance
Maintenance
dull ClaesA vlty
Event Permitting
CITY OF SEAL BEACH
CALIFORNIA
Principal Officers
City Council
Sandra Massa-Lavitt, Mayor
Mike Varipapa, Mayor Pro Tem
Ellery Deaton, Council Member
Thomas Moore, Council Member
Shelly Sustarsic, Council Member
Executive Officers
Jill R. Ingram, City Manager
Craig A. Steele, City Attorney
Administrative Personnel
Joe Bailey, Marine Safety Chief
Victoria L. Beatley, Director of Finance/City Treasurer
Patrick Gallegos, Assistant City Manager
Crystal Landavazo, Interim Director of Community Development
Joseph Miller IV, Interim Chief of Police
Robin L. Roberts, City Clerk
iii
THE �
PUN GROUP
ACCOUNTANTS A ADVISORS
INDEPENDENT AUDITORS'REPORT
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
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 the City of Seal Beach, California (the "City"), as
of and for the year ended June 30, 2017, 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.
Aud'itor'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 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 fm our audit
opinions.
200 Fast Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Tel: 949-777-8800 • Fax: 949-777-8850
wwsv.pungroup.com
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
Seal Beach, California
Page 2
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 find, and the aggregate
remaining fund information of the City as of June 30, 2017, 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.
Emphasis of Matter
Prior Period Adjustments
As discussed in Note 14 to the basic financial statements, the City had recorded prior period adjustment in the
amount of $383,283 in the Governmental Activities and $598,085 in the Business Type Activities due to the
restatement of the net pension liabilities and the related deferred outflows and inflows of resources. Our opinion is
not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion
and Analysis, Budgetary Comparison Schedule -General Fund, Schedule of the City's Proportionate Share of the Net
Pension Liability and Related Ratios, Schedule of the City's Contributions, and the Schedules of Funding Progress -
Other Postemployment Benefits on pages 5 to 12 and 87 to 92, 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, the Schedule of Revenues, Expenditures, and Changes in Fond Balances — Budget and Actual, and
Statistical Section, are presented for purposes of additional analysis and are not a required part of the basic financial
statements.
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
Seal Beach, California
Page 3
The Combining and Individual Nonmajor Fund Financial Statements and the Schedule of Revenues, Expenditures,
and Changes in Fund Balances — Budget and Actual 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. Such
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 the
Schedule of Revenues, Expenditures, and Changes in Fund Balances — Budget and Actual 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2017, 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
solely 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 the effectiveness of the City's 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.
Qi.Gf-` �� l
Santa Ana, California
December 22, 2017
Thi, page intentionally left blank.
City of Seal Beach
Management's Discussion and Analysis
For the Year Ended June 30, 2017
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, 2017. 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 included in the City's combined governmental and business -type activities exceeded liabilities by
$126,041,742 for the fiscal year ended June 30, 2017, representing a decrease of 2.5% in net position from
the prim fiscal year. Of this amount, a decrease of $2,482,878 was due to the decline in capital assets during
the fiscal year. In addition, $15,945,651 (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 $3,862,034 less than last fiscal year. The major reason for the decrease
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, 2017 in the amount of $31,535,854. In addition, there's a
decrease in revenues for use of money and property of $588,334 (inclusive of the unrealized loss in the City's
investment portolio of $435,606), utilities users tax of $267,467, public safety expenses increased by
$2,894,180, and general government expenses decreased by $369,421 for the fiscal year ended June 30, 2017.
• As of the close of the current fiscal year, the City's governmental funds reported combined ending fund
balances of $31,209,932, representing a decrease of 5.2% from the prior fiscal year. This resulted in an
unassigned fund balance of $19,585,294, or 62.8% 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 $19,770,202 or 60.4%
of total general fund expenditures and transfers out.
• Revenues associated with the City's business -type activities were $48,793 less than the $7,616,203 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.
City of Seal Beach
Management's Discussion and Analysis (Continued)
For the Year Ended June 30, 2017
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 fiords 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 Fond financial statements to those in the
Govemment-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 Fonds and Fiduciary Funds.
City of Seal Beach
Management's Discussion and Analysis (Continued)
For the Year Ended June 30, 2017
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 $126.0 million and $129.2 million for the years ended June 30, 2017 and June 30,
2016, respectively, as shown in Table 1.
Coosa and other assets
Capital assets
Total assets
l a.ai�i'DTi[S!!3SiftT^'SI^,�
long -tam liabilities outstanding
Oder liabilities
Taal liabilities
Defmrd Inflows ofResowces
Net position
Net inwsma:nt in capital asets
Rsaicted
Unrestilcted
Total net position
Covmmartal
7,505
Business -Type
Total
4,693
Activities
Activities
Activities
8,656
(As Restated)
40,137
(As Restated)
(As Restated)
2,300
2016
2017
2016 2017
2016
2017
7 38,064
$ 36,339
$ 16,639 7 17,033
$ 54,703 $
53,372
77,195
75,914
40,271 s
117,466
114,984
115.259
112,253
56,910 56,103
172,169
168,356
4,321
7,505
372
765
4,693
8,270
31,481
35,943
8,656
9,264
40,137
45,207
2,251
2,300
910
1,077
3,161
3,377
33,732
3"3
9,566
J0341
43,298
48,584
3,711
2,304
625
409
4,336
2,713
73,940
72,400
34,145
33,109
108,085
105,509
3,867
4,740
-
-
3,867
4,740
4,330
2,070
12,946
13,722
17,276
15,792
S &Z137
8 79,210
$ 47,091
$ 46,831
$ 129,228
S 126,041
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 $105.5 million, or 83.7%, of the
total $ 126.0 million net position, a increase of 0.7% 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 Jane 30, 2017, unrestricted net position decreased by 8.6% to $15.8 million
from $17.3 million in the prior fiscal year. Restricted net position represents resources that are legally restricted to
specific uses. These restrictions are generally enforced by external agencies.
As of lune 30, 2017, 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.
City of Seal Beach
Management's Discussion and Analysis (Continued)
For the Year Ended June 30, 2017
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 Entemrise 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, 2017 and 2016.
Re,enn s:
Pmgrmn Reuares:
Cl.w for services
0pmaling ®mala noel Hilal mmbaiors
Capml grams andcavibIDons
Canal Resas:
Taxes
Rweyunes
S" axes
Tim®nv oxAm yfess
abohm
Use pommy" rurety
aha
Touln ms
F.pozes:
Game] gnamre[
Pblic Safely
C.rnn.®tydesdopma
aarrnutysavias
P.bhe,w&
Imeeemlolg-larin&M
Wax
Sona
Tonal mTe ee:
B-W(defi.e cy) befeeV=a] aenn
Ttamfms
min ms p®lim
Nmpositionm bgnnnaWofyear
Reamlelaadmpootion
Ndpositimmedofyear
$ 9.137 s X9210 $j091 s 46,531 $ 129228 $ 126,041
8
Tablet
Clangs; in ret Position (in Thaaauk)
Cmsrnmml
Bruns -Type
Tocol
Activities
Activiaa
Activities
2016
2017
7016
2017
2016
2017
$ 6,544
8 6,991
$ 6,728
S 7-61
S 13,M S
14,558
2,214
1,721
-
-
2,214
1,721
m
175
10
175
10,409
11,012
-
-
10,409
11,012
4229
4,379
-
-
4X9
4,379
1,655
1,694
-
-
1,655
1,614
5,608
5,396
-
-
5,608
5,3%
1,005
425
In
168
1,182
593
536
214
20
556
214
32,210
32,007
6,925
7.735
39,135
39.742
6.164
5,895
-
-
6,264
51895
ion
19,867
-
-
16"
19,867
1,100
1,219
-
-
1,100
1219
1,037
995
-
-
1,037
995
6956
6,993
-
-
6,956
6,993
350
344
-
-
350
344
-
-
4,102
4,971
V02
4,971
1,677
16n
2639
32.680
35,313
5,779
7,616
78,459
42,929
(470)
(3,306)
1,146
119
676
(3,187)
379
379
(91)
(2,927)
767
(261)
676
(31187)
82237
()
82,137
46,922
47,091
129,159
129228
$ 9.137 s X9210 $j091 s 46,531 $ 129228 $ 126,041
8
City of Seal Beach
Management's Discussion and Analysis (Continued)
For the Year Ended June 30, 2017
Analysis of the City's Operations — The City's Net Position decreased by $3.2 million during Fiscal Year 2016-
2017 or 2.5%, over prior year results.
Governmental Activities experienced a decrease of $2.9 million in net position as of lune 30, 2017 compared to an
decrease of $0.1 million for year ended June 30, 2016. The primary reason for the decrease in net position is
attributable to a decrease in utlities users tax of $.3 million, use of money and property of $.6 million and an increase
in public safety expense of $2.9 million.
The cost of all governmental activities during the current fiscal year was $35.3 million, slightly higher than last year.
As shown on the statement of activities, those who directly benefited from the programs paid $7.0 million of the cost,
and $1.6 million was financed by contributions and grants received from other governmental organizations. The
remainder of the costs of operations, $26.5 million was subsidized through general City taxes and other revenue
sources. The largest operating cost was comprised of Public Safety, representing 56.3% of total governmental
expenditures compared to 51.9% of total governmental expenditures in fiscal year 2015-2016.
Business -type Activities' net position decreased $0.3 million primarily due to capital projects.
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, 2017 the City's governmental funds reported combined ending fund balances of $31.2 million.
Approximately $19.6 million, or 62.8%, 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 Fond ended the fiscal year with a fund balance of $27.3 million, representing a net decrease of $1.8
million in fund balance compared to the $.9 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, use of money and property, and
other taxes. Additionally, public safety expenditures increased by $1.2 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 $7.6 million and $6.1
million for the Water and Sewer funds, respectively. The Water fund decreased by $0.4 million in net position,
mainly due to decrease in revenue collection. The decrease of $0.2 million in the Sewer fund net position resulted
from GASB 68 (pension liability adjustment). Sewer operating fees represent 22% of customer water charges for
both usage and capital costs.
General Fund Budgetary Highlights — Thee 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 $1.0
million. This difference is due to a variety of budget amendments approved by the City Council during the fiscal year
including comprehensive parking management plan, city hall upgrade, Police Department security lobby, winter
pump rental, west end pump station emergency repair, and purchase order and CIP carryover from prior fiscal year.
General Government revenues including transfer in came in less than projected in the final budget by approximately
$4.2 million.
City of Seal Beach
Management's Discussion and Analysis (Continued)
For the Year Ended June 30, 2017
General Fund expenditures were $13.4 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 2017-2018 fiscal year.
CAPITAL ASSETS
The City's capital assets for its governmental and business -type activities as of June 30, 2017, amounts to $115.0
million compared to $117.5 million (net of accumulated depreciation) for FY 2015-2016. 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 1.66% and the City's investment in capital
assets for business -type activities for the current fiscal year also decreased 2.98%.
Table 3
Capital Assns At Year -End
(NctofDepreciation,in Thousands)
During FY 2016-2017, major capital projects formally completed include:
• Energy Efficiency Project for $955,018. This project replaced lighting, irrigations controls and other energy
efficient items throughout the City.
• Traffic Management Center Project No. ST1408 for $582,509. This project constructed a new traffic signal
management office to fully view and control the traffic signals along Seal Beach Blvd. and for future
connects of all other remaining signals throughout the City.
• Annual Slurry Seal Project No. ST1601 for $106,237. This project sealed various street in College Park East.
• Annual Concrete Repair Project No. STI604 for $67,886. This project replaced sidewalks, curb and gutters
and ramps throughout the City.
• West End Sturm Pump Station Equipment Replacement Project No. SD1601 for $178,491. This project
replaced a variable frequency drive and sump pump.
• Eisenhower Park Tot Lot Rehabilitation Project No. PR1602 for $177,160. This project replaced the play
equipment at the beach lot.
• Council Chambers and SBTV-3 Remodel Project No. BG1402 for $266,353. This project created a new
office for SBTV-3 and a new egress, bullet proofing the dais and new panic buttons for the Chambers.
• City Hall Security Upgrade Project No. EM1504 for $156,177. This project installed new cameras, access
control doors, Police Support Office and automated voice dialing systems.
Additional information on the City's capital assets can be found in note 5 in the Financial Section of this report.
10
GovmmevW
Businms T pe
Acannm
Ac&idn
Taal
2016
2017
2016 2017
2016
2017
IaMaWleMeasement
S 11,420
S 11,420
$ - S -
$ 11,420 S
11,420
BuiUd .dhWro v is
9,497
91967
1 -
9,498
91967
Mwhine and Equipment
302
242
683 651
985
893
Vehicl®
1,220
1,369
385 352
1,605
1,]21
InBasnucture
5212W
50,752
38,166 36,715
90,445
87,467
Cmwction-N-pm®c?4
4T!
2,164
1,036 1,352
3,513
3,516
Taals
$ 77.195
57914
S 40,271 $$7070
$ 117466 $
114,984
During FY 2016-2017, major capital projects formally completed include:
• Energy Efficiency Project for $955,018. This project replaced lighting, irrigations controls and other energy
efficient items throughout the City.
• Traffic Management Center Project No. ST1408 for $582,509. This project constructed a new traffic signal
management office to fully view and control the traffic signals along Seal Beach Blvd. and for future
connects of all other remaining signals throughout the City.
• Annual Slurry Seal Project No. ST1601 for $106,237. This project sealed various street in College Park East.
• Annual Concrete Repair Project No. STI604 for $67,886. This project replaced sidewalks, curb and gutters
and ramps throughout the City.
• West End Sturm Pump Station Equipment Replacement Project No. SD1601 for $178,491. This project
replaced a variable frequency drive and sump pump.
• Eisenhower Park Tot Lot Rehabilitation Project No. PR1602 for $177,160. This project replaced the play
equipment at the beach lot.
• Council Chambers and SBTV-3 Remodel Project No. BG1402 for $266,353. This project created a new
office for SBTV-3 and a new egress, bullet proofing the dais and new panic buttons for the Chambers.
• City Hall Security Upgrade Project No. EM1504 for $156,177. This project installed new cameras, access
control doors, Police Support Office and automated voice dialing systems.
Additional information on the City's capital assets can be found in note 5 in the Financial Section of this report.
10
City of Seal Beach
Management's Discussion and Analysis (Continued)
For the Year Ended June 30, 2017
DEBT ADMINISTRATION
As of June 30, 2017, the City had bonded debt, notes payable, compensated absences, claims payable, and capital
Imes totaling $13.7 million compared to $16.1 million at the end of FY 2015-2016. The City's governmental
activities maintained $7.6 million in bonds, capital leases, compensated absences, and claims payable versus $9.7
million last year, representing a decrease of approximately $2.1 million from the previous fiscal year. This decrease
reflects interest and principal payments made during FY 2016-2017.
The City's business -type activities debt decreased $.3 million from $6.4 million to $6.1 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.
Capital 1.
P kxi Obligati.I &
L. Rev.. Banda
CaUfim dpmcipai.s
seas Capial hp.. Roj.
W-insiv,sid repayable
Taal
Table 4
Outstanding Debt' At Year -End
(in Thousands)
Oovammval B.ia a Type
Aaivio® A 116ea Taal
2116 2017 2116 2017 2016 2017
E 028 E 1,224
1,368
673
3,461
2,414
3,255
2,835
378
427
$ 128 $ 140
2.565 2,420
3.718 3,538
$ 1,356 E 1,364
1,368
673
3,461
2,414
3255
2,835
2,565
2,420
3,718
3,538
378
427
S 9,M s 7,573 E 6.411 y E 16,101 S 13,671
Additional information on the City's long-term debt can be found in note 6 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 2016-2017 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, Property Tax revenues increased 6% and Other Taxes decreased 41 %
compered with the projected revenues at the beginning of the FY 2016-2017. The primary reason for the decline is a
reduction in utilities users tax and the unrealized loss in the investment portfolio.
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 are expected to remain relatively flat.
City of Seal Beach
Management's Discussion and Analysis (Continued)
For the Year Ended June 30, 2017
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.
The City prepared an annual budget for FY 2016-2017. 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 2017-18 CIP recommends $33.6 million
in improvements over the next 5 years. The 5 Year Capital Improvement Program identifies needs in the following
areas: Beach and Pier ($4.0M) Buildings and Facilities ($6.2M), Parks ($180k), Sewer System ($230k), Storm Drain
System ($559k), Streets and Transportation ($6.5M) and Water System ($15.8M). Based upon the list of known
projects there is over $206 million of capital improvements needed in the new 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 uestions about this report or need additional financial infortnation, contact the City's Finance Department at
21182 Street, Seal Beach, CA 90740-6379 or call (562) 431-2527.
12
BASIC FINANCIAL STATEMENTS
13
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GOVERNMENT -WIDE FINANCIAL STATEMENTS
City of Seal Beach
Statement of Net Position
June 30, 2017
ASSETS
Current Assets:
Cash and investments
Receivables:
Accounts
Tuna
Interest
Prepaid items
Due from other govemmenLs
Total Current Assets
Noncurrent Assets:
Restricted cash with fiscal agent
Advance m Successor Agency
Net OPEB assets
Capital assets:
Capital assets, not being depreciated
Capital assets, being depreciated, net
Total capital assets, net
Total Noncurrent Assets
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding
Deferred pension related items
Tom] Deferred Outflows of Resources
See accompanying Not s to the Basic Financial Statements
16
Primary Government
Govemmental Business -Type
Activldes Activitlea Total
$ 31,565,673
S 15,849,326
S 47,414,999
1,092,234
1,183,788
2,276,022
1,567,469
-
1,567,469
35,172
-
35,172
13,272
-
13,272
598,466
598,466
34,872,286
17,033,114
51,905,400
741,820 - 741,820
- 714,110 714,110
725,223 - 725,223
13,583,972
1,351,575
14,935,547
62,329,471
37,718,241
100,047,712
75,913,443
39,069,816
114,983,259
77,380,486
39,783,926
117,164,412
112,252,772
56,817,040
169,069,812
-
144,844
144,844
7,504,625
620,645
8,125,270
7,504,625
765,489
8,270,114
City of Seal Beach
Statement of Net Position (Continued)
June 30, 2017
LIABILITIES
Current Liabilities:
Accounts payable
Accrued liabilities
Accrued interest
Unearned revenues
Deposits payable
Retention payable
Lang -term liabilities, due within one year
Long-term liabilities:
Long-term liabilities, due in more than one year
Aggregate no pension liabilities
Total Liabilities
DEFERRED]
Deferred pension related items
Total Deferred Inflows of Resources
NET POSITION
Net investment in capital assets
Restricted for:
Cosomunity development projects
Public safety
Commonly services
Public works
Debt service
Other
Total restricted
Unrearimed
Total Net Position
See accompunying Notes to the Basic Financial Statements
17
Primary Government
Governmental Business -Type
Activities Activities Total
1,336,517
784,696
2,121,213
430,602
63,051
493,653
30,703
68,535
99,238
18,550
-
18,550
478,018
13,535
491,553
5,862
147,202
153,064
2,100,452
376,132
2,476,584
5,472,986
5,722,050
11,195,036
28,369,690
3,166,164
31,535,854
38,243,380
10,341,365
48,584,745
2,303,785
409,654
2,713,439
2,303,785
409,654
2,713,439
72,399,752
33,109,258
105,509,010
596,529
-
596,529
338,240
-
338,240
324,218
-
324,218
2,586,274
-
2,586,274
729,543
-
729,543
12,277
12,277
4,587,081
4,587,081
2,223,399
13,722,252
15,945,651
$ 79.210,232 $
46831 510
1 12Q041.742
Functioraftogn ns
Governmental Activities:
General government
Public safety
Community development
Community services
Public works
Interest and fiscal chmges
Total Governmental Activities
Business -Type Activities:
Water Utility
Sewer Utility
Total Business -Type Activities
Total Primary Government
City of Seal Beach
Statement of Activities
For the Year Ended June 30, 2017
Program Revenues
Capital Grants
Charges for Operating Grants and
Expenses Services and Contributions Contributions Total
S 5,894,947
$ 1,913,909
S 7,641
$ -
S 1,921,550
19,867,060
2,045,589
430,455
-
2,476,044
1,218,902
217,486
290,770
-
508,256
995,468
707,813
-
-
707,813
6,992,604
2,105,747
992,301
174,685
3,272,733
342,951
35,311,932
6,990,544
1,721,167
174,685
8,886,396
4,977,160
4,782,468
-
-
4,782,468
2,639,043
2,784,942
2,784,942
7,616,203
7,567,410
-
-
7,567,410
$ 42,928,135
$ 14,557,954
$ 1,721,167
$ 174,685
$ 16,453,806
See accompanying Nn4a to the Basic Financial Starcments
18
City of Seal Beach
Statement of Activities (Continued)
For the Year Ended June 30, 2017
Funedons/Programs
Governmental Activities:
General government
Public safety
Community development
Community services
Public works
Interest and fiscal charges
Total Governmental Activities
Buaiaesa-Type Activities:
Water Utility
Sewer Utility
Total Business -Type Activities
Total Primary Government
General Revenues:
Taxes:
Property hazes, levied for general purpose
Sales fazes
Franchise renes
Utility users tax
Transient occupancy taxes
Other rates
Motor vehicle in lieu- unrestricted
Use of money and property
Other
Transfers
Total General Revenues and Transfers
Changes in Net Position
Net Position:
Beginning of Year, as restated (Note 14)
End of Year
See accompanying Notes to the Basic Financial Smtements
19
Net (Expense) Revenue and Changes in Net Positions
Governmental Business -Type
(194,692)
Activities Activities
Total
$ (3,973,397) S -
$ (3,973,397)
(17,391,016) -
(17,391,016)
(710,646) -
(710,646)
(287,655) -
(287,655)
(3,719,871) -
(3,719,871)
(342951)
(342,951)
(26,425,536) (26,425,536)
-
(194,692)
(194,692)
145,899
145,899
(48,793)
(48,793)
(26,425,536)
(48,793)
(26,474,329)
11,012,246
-
11,012,246
4,379,341
-
4,379,341
1,016,938
-
1,016,938
4,177,713
-
4,177,713
1,693,515
-
1,693,515
190,510
-
190,510
11,235
-
11,235
425,014
167,661
592,675
214,219
-
214,219
378.500
(378.500)
23,499,231
(210,839)
23,288,392
(2,926,305)
(259,632)
(3,185,937)
82,136,537
47,091,142
129,227,679
$ 79,210,232
$ 46.831,510 $
126A41.742
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20
FUND FINANCIAL STATEMENTS
21
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FF
GOVERNMENTAL FUND FINANCIAL STATEMENTS
23
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24
City of Seal Beach
Balance Sheet
Governmental Funds
June 30.2017
See accompanying Nora to the Basic Financial Suac=no
25
Nonmajor
Citywide
Govemmeatal
General
Grants Fond
Foods
Total
ASSETS
Cash and invcsweots
$
26,382,476
S -
$ 3,562,486
$
29,944,962
Receivables:
Accounts
947,257
-
144,977
1,092,234
Taxes
1,566,762
-
707
1,567,469
Interest
34,795
-
377
35,172
Prepaid items
2,877
-
10,395
13,272
Due from other governments
-
582,509
15,957
598,466
Due from other funds
182,409
-
-
182,409
Restricted assets:
Cash and investments with fiscal agents
12,277
729,543
741,820
TONI Assets
$
29,128,853
$ 582,509
S 4,464,442
$
34,175,804
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable
$
960,856
$ -
S 292,622
S
1,253,478
Accrued liabilities
426,342
-
4,260
430,602
Uneamed revenues
-
-
18,550
18,550
Deposits payable
478,018
-
-
478,018
Due to other funds
-
138,908
43,501
182,409
Retentions payable
5,862
5,862
Total Liabilities
1,865,216
138,908
364,795
2,368,919
Deferred Io0ows of Resources:
Unavailable revenues
5829509
14,444
596,953
Total Deferred Mom of Resources
582,509
14,444
596,953
Fund Balances:
Nonspendable
2,877
-
-
2,877
Restricted
12,277
-
4,131,203
4,143,480
Assigned
7,478,281
-
7,478,281
Unassigned (deficit)
19,770,202
(138,908)
(46,000)
19,585,294
Total Fund Balances
27,263,637
(138,908)
4,085,203
31,209,932
Total Liabilities and
Fund Balances
$
29,128,853
$ 582,509
$ 4,464,442
S
34,175,804
See accompanying Nora to the Basic Financial Suac=no
25
City of Seal Beach
Reconciliation of the Governmental Funds Balance Sheet to the
Government -wide Statement of Net Position
June 30, 2017
Tend Fund Balances- Total Governmental Funds $ 31,209,932
Amounts reported for governmental activities in the Smtemem of Net Position were reported differently because:
Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the
Governmental Funds Balance Sheet.
Nondepreciable
Depreciable, net of$1,175,325 reported in Internal Service Fund
S 13,583,972
61,154,146 74,738,118
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 contributions are reported as an asset or liability.
Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities. All
liabilities, both current and long-term, are reported in the Statement of Net Position:
Bands payable
Loans payable
Claims and judgments
Compensated absences
725,223
$ (5,249,000)
(672,829)
(427,595)
(1,224,014) (7,573,438)
Interest payable on long-tenn debt does not require current financial resources. Therefore, interest payable is not reported as a
liability in the governmental funds.
Net pension liabilities and the related defe rsd outflows of resources and deferred inflows of resources are not due and
payable in the current period or not available for current expenditures and are not reported in the governmental fund financial
statements:
Pension related deferred outflows ofresourees
Aggregate net pension liability
Pension related deferred inflows of resources
(30,703)
$ 7,504,625
(28,369,690)
(2,303,785) (23,168,850)
Revenue reported as unavailable revenue in the governmental funds when it is not received soon enough after year- d m be
considered available. The Availability criteria does not apply to the government -Wide Financial Statements and. therefore,
the revenue is recognized when eligibility requirements are met and earned.
Internal Service Funds were used by managcmem to charge the costa of cenein activities, such as insurance and equipment
replacement to individual fonds. The sesets and liabilities of the Internal Service Funds were included in the governmental
activities in the Government -Wide Statement of Net Position.
Net Poseidon of Governmental Activities
See accompmying Notes to the Basic Financial Statemenu
26
596,953
2,712,997
$ 79,210,232
City of Seal Beach
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30. 2017
See accompanying Notes to the Basic Financial Statcmenu
27
Other
General
Citywide
Governmental
Food
Grants Fund
Funds
Total
Revenues:
T.cs
S 22,033,465
$ -
$ 1,334,906
$ 23,368,371
Licenses and permits
1,234590
-
-
1,234,590
Intergovernanental
90,028
-
654,876
744,904
Charges for services
5,225,368
-
123,715
5,349,083
Use of tourney and property
393,700
-
32,718
426,418
Fines and forfeitures
152,845
-
-
152,845
Contributions
180,511
-
-
180,511
Miscellaneous
440,495
51,750
492,245
Total Revenues
29,751,002
2,197,965
31,948,967
Expenditures:
Current
General goverument
5,408,672
-
264,637
5,673,309
Public safety
17,218,671
-
177,294
17,395,965
Community development
894,476
-
291,605
1,186,081
Community services
1,004,690
-
-
1,004,690
Public works
4,551,667
-
34,706
4,586,373
Capital outlay
-
-
1,506,476
1,506,476
Debt service:
Principal retirement
695,379
-
1,467,000
2,162,379
Interest and fiscal charges
69,347
283,975
353,322
Total Expenditures
29,842,902
4,025,693
33,868,595
Revenues over (under) expenditures
(91,900)
(1,827,728)
(1,919,628)
Other Financing Sources (Uses):
Transfers in
1,159,591
-
3,312,538
4,472,129
Transfers out
(2,908,236)
(215,745)
(1,138,195
(4,262,176)
Total Other Financing Sources (Uses):
(1,748,645)
(215,745)
2,174,343
209,953
Net Change in Fund Balances
(1,840545)
(215,745)
346,615
(1,709,675)
Fund Balances:
Beginning of Year
29,104,182
76,837
3,738,588
32,919,607
EndofYcar
1 27.263637aaaaaaaaiisQaa
Saaa(138,908)
S 4.085103
L.31
See accompanying Notes to the Basic Financial Statcmenu
27
City of Seal Beach
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures,
and Changes in Fund Balances to the Government -Wide Statement of Activities
For the Year Ended June 30, 2017
Net Change In Fund Balances - Total Governmental Funds
Governmental activities in the Statement of Activities were reported differently because:
Capital mm used in governmental activities are not fivaocial resources and therefore are not
reported in governmemal funds.
Capital outlay, net of 5335,902 reported in Internal Service Fond
Depreciation, net of$189,830 reported in Internal Service Food
No effect on disposal of capital assets
Governmental funds report all OPEB contributions as expendiNrea; however, in the Statement of
Activities, only the OPEB cost is reported as an expense.
Repayment of debt principal is an expenditure in the governmental foods, but the repayment
reduces long-term liabilities in the Statement of Net Position.
Interest expense on long-term debt is reported in the Statement of Activities, but do not require the
use of current financial resources. Therefore, interest expense is not reported as expenditures in
governmental funds. This amount represents the change in accrued interest from the prior year
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.
Campensmed absences were reported in the Government -Wide Statement of Activities, but they
did not require the use of current financial resources. Therefore, compensated absences were not
reponed as expenditures in the govcmmemad fonds.
Certain pension expenses reported in the Statement of Activities do not require the use of current
financial resonances and, therefore, are not reported as expenditures in governmental funds, net of
contribution made during the measurement period in the amount of 52,301,287.
Revenues reported as unavailable revenue in the governmental funds and recognized in the
Statement of Activities.
Internal Service Foods ore used by management to charge the costs of certain activities, such as
insurance and equipment replacement, to individual funds. The net revenue of the Internal Service
Foods is reported in governmental activities.
Change In Net Position of Governmental Activities
Sec accompanying Notes to the Basic Financial Statement
28
$ (1,709,675)
S 1,392,507
(2,695,324)
(124,453) (1,417,270)
37,969
2,162,379
10,371
(49,697)
4,068
(1,987,856)
58,160
(34,754)
S (2,926,305)
PROPRIETARY FUND FINANCIAL STATEMENTS
29
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30
City of Seal Beach
Statement of Net Position
Proprietary Funds
June 30. 2017
Sm accompanying Notes m the Basic Financial Statements
31
Governmental
Business -Type Activities
Activities
Vehicle
Replacement
Internal
Water Utility
Sewer Utility
Total
Service Fund
ASSETS
Current Assets:
Cash and investments
$ 9,435,170
$ 6,414,156 $
15,849,326
$ 1,620,711
Accounts receivable
752,301
431,487
1,193,788
Total Current Assets
10,187,471
6,845,643
17,033,114
1,620,711
Noncurrent Asrefa:
Advance to Successor Agency
-
714,110
714,110
-
Capitalassets,notbeing depreciated
850,743
500,832
1,351,575
-
Capitalassets,netofaccumulated depreciation
15,006,555
22,711,686
37,718,241
1,175,325
Total Noncurrent Assets
15,857,298
23,926,628
39,783,926
1,175,325
Total Assets
26,044,769
30,772,271
56,817,040
2,796,036
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding
-
144,844
144,844
-
Deferred pension related items
361,099
259,546
620,645
Tocol Deferred Outflows of Resources,
361,099
404,390
765,489
LIABILITIES
Current Liabilities:
Accounts payable
745,183
39,513
794,696
83,039
Acensed liabilities
39,818
23,233
63,051
-
Accrned interest
-
68,535
68,535
-
Depositspayable
11,935
1,600
13,535
-
Retention Payable
73,410
73,792
147,202
-
Accrued compensated absences
29,270
12,352
41,622
-
Long-term debt - due within one year
334,510
334,510
Total Current Liabilities
899,616
553,535
1,453,151
83,039
Noncurrent Liabilities:
Accrued compensated absences
59,486
38,874
98,360
-
Long-term debt - due in more Nan one year
-
5,623,690
5,623,690
-
Aggregate net pension liability
1,842,113
1,324,051
3,166,164
Tohl Noncurrent Liabilities
1,901,599
6,986,615
8,888,214
Tohl LiabiOtier
2,801,215
7,540,150
10,341,365
83,039
DEFERRED INFLOW OF RESOURCES
Deferred pension related items
238,342
171,312
409,654
Total Deferred Inflow. of Resources
238,342
171,312
409,654
NET POSITION
Net invemvtort in capital assets
15,783,888
17,325,370
33,109,258
1,175,325
Unrestricted
7,582,423
6,139,829
13,722,252
1,537,672
Total Net Position
S jj66,311
$ 23,465,199 $
46,831,510
S 2712997
Sm accompanying Notes m the Basic Financial Statements
31
City of Seal Beach
Statement of Revenues, Expenses, and Changes in Net Position
For the Year Ended June 30, 2017
See accompan,ing Notes to the Basic Fima cial Statements
32
Governmental
Business -Type Activities
Activities
Vehicle
Replacement
Internal
Water Utility
Sewer Utility
Total
Service
OPERATING REVENUES:
Sales and service charges
$ 4,707,102
$ 2,784,713
$ 7,491,815
$ -
Miscellamous
75,366
229
75,595
18,533
Tom] Operating Revenues
4,782,468
2,784,942
7,567,410
18,533
OPERATING EXPENSES:
Administration
4,375,248
1,288,708
5,663,956
32,004
Amortization and depreciation expenses
601,912
1,135,834
1,737,746
189,830
Tohl Operating Expenses
4,977,160
2,424,542
7,401,702
221,834
OPERATING INCOME (LOSS)
(194,692)
360,400
165,708
(203,301)
NONOPERATING INCOME (LOSS):
Interest revenues
100,362
67,299
167,661
Interval expenses
(214,501)
(214,501)
TOW Nanoperating Income (Loss)
100,362
(147,202)
(46,840)
(LOSS) BEFORE TRANSFERS
(94,330)
213,198
118,868
(203,301)
TRANSFERS:
Transfers in
-
-
-
310,000
Transfers ow
(324,500)
(54,000)
(378,500)
(141,453)
Tom]Transfers
(324,500)
(54,000)
(378,500)
168,547
CHANGES IN NET POSITION
(418,830)
159,198
(259,632)
(34,754)
NET POSITION:
Beginning ofthe Year, as restated (Note 14)
23,785,141
23,306,001
47,091,142
2,747,751
End ofthe Year
$ 23,366,311
$ 23,465,199
$ 46,831,510
$ 2,712,997
See accompan,ing Notes to the Basic Fima cial Statements
32
City of Seal Beach
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2017
See accompanying Notes to Ne Basic Financial Sutemenu
33
Governmental
Business -Type Activities
Activities
Vehicle
Replacement
Water Utility
Sewer Utility
Total
terminal Service
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users
$ 4,582,781
$ 2,697,012
S 7,279,793
$ -
Cash paid to suppliers for goods and services
(2,768,166)
(145,912)
(2,914,078)
(29,575)
Cash paid to employees for services
(1,366,245)
(913,658)
(2,279,903)
-
CasM1 received from others
75,366
229
75,595
18,533
Net Cash Provided by (Used in) Operating Activities
523,736
1,637,671
2,161,407
(11,042)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cesb (roosters in
Cash transfers out
(324,500)
(54,000)
(378.500)
310,000
(141.453)
Net Cash Used In Noneap)tal Financing Activities
(324,500)
(54,000)
(378,500)
168,547
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition ofcapbal assets
(113,243)
(373,071)
(486,314)
(335,902)
Proceeds from disposal of assets
Principal paid on capital debt
-
-
-
(324,833)
-
(324,833)
10,307
-
Interest paid on debt
-
(218,109)
(218,109)
No Cash (Used in) Capital and Related
Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES:
(113,243)
(916,013)
(1,029,256)
(325,595)
Interest received
100,362
67,299
167,661
Net Cash Provided by Investing Activities
100,362
67,299
167.661
Net Change In Cash and Cub Egalvalenb
186,355
734,957
921,312
(168,090)
CASH AND CASH EQUIVALENTS:
Beginning of Year
9,248,815
5,679,199
14,928,014
1,788,801
End of Year
J.1&35
6.414.156
$ 15.849.326
$ 1620.711
Reeunciliatiun of OPenting Income (Loss) to
to Net Cash Provided by (Used In) Operating Activities:
Operating lnoome(loss)
$ (194,692)
$ 360,400
165,708
S (203,301)
Adjustments to reconcile operating income (loss)
to net cash provided by (used in) operating activities:
Amortization
-
12,070
12,070
-
Depreciation
Changes in assets and liabilities:
601,912
1,123,764
1,725,676
189,830
(Increaseydecresc, in accounts receivables
(128,671)
(88,201)
(216,872)
-
(Increase)dccrease in prepaid costa
15,220
14,770
29,990
(lncreaseydecrease I. deferred outflows oftevemes
related to pension
(229,763)
(176,009)
(405,772)
Increase/(decome) in accounts payable
99,070
15,981
115,051
2,429
Immme/(decrease) in seemed liabilities
10,416
2,992
13,408
Income4decame) in deposits payable
4,350
500
4,850
Increase/(decrease) in compensated absences
19,688
(8,161)
11,527
Ineresec4decrease) in net pension liabilities
469,944
451,277
921,221
-
Increasd(dcOme) in deferred mile" ofnwames
related to pension
(143,738) (71,712)
(215,450)
Net Cash Provided by (Used in) Operating Activities
$ 523.736 _L_1.637 671
$ 2.161 407$
111 0421
See accompanying Notes to Ne Basic Financial Sutemenu
33
Thin pegs i—.clonally kF hknk
34
FIDUCIARY FUND FINANCIAL STATEMENTS
35
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36
City of Seal Beach
Statement of Fiduciary Net Position
Fiduciary Funds
June 30. 2017
ASSETS
Cash and investments
Restricted Assets:
Investments with fiscal agent
Taxes receivable
Depreciable capital assets, net of accumulated depreciation
Tohl Assets
LIABILITIES
Current liabilities:
Accounts payable
Accrued interest
Deposit payable
Due m bondholders
Advances firm the City's Sewer Fund, due within one year
Bonds payable, due within one year
Total current liabilities
Noncurrent liabilities:
Advances from the City's Sewer Fwd due in more than one year
Bonds payable, due in more than one year
Total noncurrent liabilities
Total liabilities
NET POSITION
Held in trust for Successor Agency
Net position held in trust for Successor Agency
See accompanying Notes to We Basic Financial Statements
37
Successor Agency
Agency Private -purpose
Funds Trust Fwd
271,553 S 1,022,134
951,485 742,753
6,841
53,701
S 1,229,879 1,818,588
a
7,204
50,475
44,836 -
1,185,043
240,912
600,000
S 1,229,879 898,591
473,198
1,925,000
2,398,198
3,296,789
(1,478,201)
S (1,478,201)
City of Seal Beach
Statement of Change in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2017
ADDITIONS:
Redevelopment property tax trust fund
Investment income
Total Additions
DEDUCTIONS:
Administru&c expenses
Interest expense
Depreciation expenses
Total Deductions
Change in Net Position
NET POSITION:
Beginning of Year
End of Year
See accompei ging Nnke to the Basic Financial Statements.
38
Successor Agency
Private -purpose
Trust Pond
$ 1,218,363
2,798
1,221,161
277,304
139,260
3,581
420,145
801,016
(2,279,217)
S (1,478,201)
ses
NOTES TO THE BASIC FINANCIAL STATEMENTS
39
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40
City of Seal Beach
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2017
Note 2 — Cash and Investments .............. ............ .......... ........... ........... ...... ...... ... ....... ...... ............. ... ........ 53
A. Demand Deposits............................................................................................................................
Page
Note 1— Summary of Significant Accounting Policies.....................................................................................
43
A.
Financial Reporting Entity ..............................................................................................................
43
B.
Basis of Accounting and Measurement Focus................................................................................
44
C.
Cash and Investments.....................................................................................................................
46
D.
Fair Value Measurement.................................................................................................................
47
E.
Property Taxes Receivable.............................................................................................................
47
F.
Prepaid Items..................................................................................................................................
47
G.
Interfund Transactions....................................................................................................................
47
H.
Capital Assets.................................................................................................................................
48
I.
Unearned and Unavailable Revenue...............................................................................................
48
J.
Compensated Absences Payable.....................................................................................................
48
K.
Claims Payable...............................................................................................................................49
L.
Pensions..........................................................................................................................................49
M.
Deferred Outflows/inflows of Resources.......................................................................................
49
N.
Long -Term Obligations..................................................................................................................
50
O.
Net Position....................................................................................................................................
50
P.
Fund Balances.................................................................................................................................
50
Q.
Spending Policy..............................................................................................................................
51
R.
Use of Estimates.............................................................................................................................
51
S.
Tax Abatement................................................................................................................................
51
T.
Accounting Changes.......................................................................................................................
52
Note 2 — Cash and Investments .............. ............ .......... ........... ........... ...... ...... ... ....... ...... ............. ... ........ 53
A. Demand Deposits............................................................................................................................
53
B. Investments Authorized by the California Government Code and the
City's Investment Policy............................................................................................................
54
C. Investments Authorized by Debt Agreements................................................................................
54
D. Fair Value Measurement.................................................................................................................
55
E. Risk Disclosures.............................................................................................................................
55
F. Investment in Local Agency Investment Fund("LAIF")...............................................................
57
Note 3 — Interfund Transactions
....................................................................................................................... 57
A. Due From/To Other Funds..............................................................................................................
57
B. Transfers.........................................................................................................................................
58
Note 4 — Advance to Successor Agency.........................................................................................................
58
Note5 — Capital Assets........................................................................................................................................
59
Note 6 — Long -Term Liabilities..........................................................................................................................
61
A. Governmental Activities.................................................................................................................
61
B. Business -Type Activities................................................................................................................
63
C. Fiduciary Activities........................................................................................................................
66
41
City of Seal Beach
Index to the Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Page
Note7 — Non -City Obligations............................................................................................................................ 67
A. Heron Pointe Community Facilities District No 2002-01..............................................................
67
B. Pacific Gateway Business Center Community Facilities District No 2005-01 ..............................
67
Note 8 — Risk Management and Self Insurance Program................................................................................67
A. Description of Self -Insurance Pool Pursuant to Joint Powers Agreement ......................................
67
B. Self -Insurance Programa of the Authority ......................................................................................
68
C. Purchased Insurance.......................................................................................................................
69
D. Adequacy of Protection..................................................................................................................
69
E. Claims Activity ...............................................................................................................................
69
Note 9 — Defined Benefit Pension Plans..............................................................................................................
70
Note 10 — Other Postemployment Benefit Plan.................................................................................................. 79
Note 11— Classification of Fund Balances..........................................................................................................81
Note 12—Commitments and Contingencies........................................................ _............. _ .........
_................... 82
A. Commitments...................................................................................................................................
82
B. Contingencies..................................................................................................................................
82
C. Grants...............................................................................................................................................
82
Note 13 — Individual Fund Disclosure ................ ........ ........... ....... ... .......... ..._.... ... ....... .............................
82
A. Expenditures in Excess of Appropriation........................................................................................
82
B. Deficit Net Positions and Fund Balances.........................................................................................
83
Note 14 — Prior Period Adjustments...................................................................................................................
83
Note 15 — Subsequent Events...............................................................................................................................83
42
City of Seal Beach
Notes to the Basic Financial Statements
For the Year Ended June 30, 2017
Note 1— Summary of Significant Accounting Policies
The basic financial statements of the City of Seal Beach, California, (the "City') have been prepared in accordance
with accounting principles generally accepted in the United States ("U.S. GAAP") m applied to governmental
agencies. The Governmental Accounting Standards Board ("GASB") is the accepted standard setting body for
establishing govemmental accounting and financial reporting principles. The following is a summary of the City's
significant policies:
A. Financial Reporting Entry
The 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 U.S.
GAAP these financial statements present the City (the primary government) and its component units. The
component unit discussed below is included in the reporting entity because of its operational or financial
relationships with the City.
In evaluating how to define the City for financial reporting purposes, management has considered all potential
component units. The primary criteria for including a potential component unit within the reporting entity are
the governing body's financial accountability and a financial benefit or burden relationship and whether it is
misleading to exclude. A primary government is financially accountable and shares a financial benefit or
burden relationship, if it appoints a voting majority of an organization's governing body and it is able to
impose its will on the organization, or if there is a potential for the organization to provide specific financial
benefits to, or impose specific financial burdens on the primary government. A primary government may also
be financially accountable if an organization is fiscally dependent on the primary government regardless of
whether the organization has a separately elected governing board, a governing board appointed by a higher
level of government, or a jointly appointed board, and there is a potential for the organization to provide
specific financial benefits to, or impose specific financial burdens on the primary government.
Blended Component Units
Management determined that the following entities should be reported as blended component units based on
the criteria above. Although the following is legally separate from the City, it has been "blended" w though it
is part of the City because the component unit's governing body is substantially the same as the City's and
there is a financial benefit or burden relationship between the City and the component mit; management of
the City has operational responsibilities for the component mit; and/or the component unit provides services
entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even
through it does not provide services directly to it.
The Seal Beach Public Financing Authority (the "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 and the former Seal Beach Redevelopment
Agency. The City Council of the City 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. Please also refer to Note 15A for
subsequent event relating to the Authority.
The Seal Beach Cable Communications Foundation (the "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
appropriate 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.
43
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 1— Summary of Significant Accounting Policies (Continued)
A. Financial Reporting Bndty (Continued)
Blended Component Unit (Continued)
The Seal Beach Parking Authority ("the Parking Authority') was formed on June 12, 2017, pursuant to the
Part 2 of Division 18 of the California Streets and Highway Code. The Parking Authority is governed by the
Board of Director which is the City Council of the City of Seal Beach.
B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting
entity. The operations of each fund are accounted for by providing a separate set of self -balancing accounts that
comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. City resources
are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and
the means by which spending activities are controlled.
Government -Wide Financial Statements
The government -wide financial statements are presented on an "economic resources" measurement focus and the
accrual basis of accounting. Accordingly, all of the City's assets, deferred outflows of resources, liabilities, and
deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities,
we included in the accompanying statement of net position. The statement of activities presents changes in net
position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned
while expenses are recognized in the period in which the liability is incurred. Fiduciary activities of the City are
not included in these statements.
Certain types of transactions are reported as program revenues for the City in three categories:
➢ Charges for services
➢ Operating grants and contributions
D Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal
balances in the statement of net position have been eliminated. In the statement of activities, internal service fund
transactions have been included in the governmental activities. The following interfund activities have been
eliminated:
➢ Due from and to other funds, which are short-term loans within the primary government
D Transfers in and out, which are flows of assets between funds without the requirement for repayment
Governmental Fund Financial Statements
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and
the modified accrual basis of accounting. Accordingly, only current assets, current liabilities, and deferred
inflows of resources are included on the balance sheet. The statement of revenues, expenditures and changes in
fund balances presents increases (revenue and other financing sources) and decreases (expenditures and other
financing uses) in fund balances. Under the modified accrual basis of accounting, revenues are recognized in the
accounting period in which they become both measurable and available to finance expenditures of the current
period.
W
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 1— Summary of Significant Accounting Policies (Continued)
B. Basis ojAccoundng and Measurement Focus (Continued)
Governmental Fund Financial Statements (Continued)
Revenues are recorded when received in cash, except those revenues subject to accrual (generally 60 days after
year-end) which are recognized when due. The primary revenue sources that have been treated as susceptible to
accrual by the City we property taxes, intergovernmental revenues and other taxes. Business license fees are
recorded as received, except at year-end when they are accrued pursuant to the modified accrual basis of
accounting. The City recognizes business license revenue collected within 60 days as revenue at June 30.
Expenditures are recorded in the accounting period in which the related fund liability is incurred.
Reconciliations of the fund financial statements to the government -wide financial statements are provided to
explain the differences.
The City reports the following major Governmental Fund:
General Fund — The General Fund is the City's principal operating fund. It accounts for all revenues and
expenditures used to finance the traditional services associated with a municipal government except those
required to be accounted for in another fund.
Citywide Grants Special Revenue Fund: The City Gants Special Revenue Fond accounts for various Federal
and Sate grants that are restricted to expenditures for specific projects or purposes.
PronrWgry Fund Financial Statements
Proprietary Fond Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses
and Changes in Net Position, and a Statement of Cash Flows for each major Proprietary Fund.
A separate column representing internal service funds is also presented in these statements. However, internal
service balances and activities have been combined with the governmental activities in the Government -Wide
Financial Statements. The City has Vehicle Replacement Intemal Service Fund that provides services directly to
other City funds.
Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of
accounting. Accordingly, all assets, deferred outflows of resources, liabilities (whether current or noncurrent), and
deferred inflows of resources are included on the Statement of Net Position. The Statement of Revenues,
Expenses and Changes in Fund Net Position presents increases (mvenues) and decreases (expenses) in mal Net
Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned
while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have
been recorded as revenue and provisions have been made for uncollectible amounts.
Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of
the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that
are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.
45
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 1 — Summary of Significant Accounting Policies (Continued)
B. Basis ojAccoundng and Measurement Focus (Candnrred)
Froorietary Fund Financial Statements (Continued)
The City reports the following major Proprietary Funds:
Water Utility Enterprise Fond — This fund accounts for the operation and maintenance of the City's water
distribution system.
Sewer Utility Enterprise Fond — This fund accounts for the financial transactions of the City's waste water
collection system.
Internal service funds are presented in the proprietary fund financial statements. However, internal service
balances and activities have been combined with the governmental activities in the govemment-wide financial
statements.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary
Net Position. The City's fiduciary funds represent agency funds and private purpose trust funds. Both agency
funds and the private purpose min funds are accounted for on the full accrual basis of accounting.
The City reports the following fiduciary funds:
Private -purpose Trust Fund — This fund accounts for the assets and liabilities of the former redevelopment
agency and its 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.
Agency Funds — These funds account for resources held by the City in a trustee capacity as an agent for
individuals, private organizations, other governments, and/or other funds. Agency Fonds are custodial in
nature (assets equal liabilities) and do not involve measurement of results of operations.
C. Cash and Investments
The City's cash and cash equivalents are comprised of cash on hand, demand deposits, and short-term
investments with original maturity of three months or less from the date of acquisition. All cash and investments
of proprietary funds are held in the City's investment pool. These cash pools have the general characteristics of a
demand deposit account, therefore, all cash and investments in the proprietary funds are considered cash and cash
equivalents for statement of cash flows purposes.
46
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 1 — Summary of Significant Accounting Policies (Continued)
D. Fair Value Measurement
Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based
upon the level of judgment associated with the inputs used to measure their fair value.
The three levels of the fair value measurement hierarchy are described below:
➢ Level 1 — Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets
at the measurement date.
➢ Level 2 — Inputs, other than quoted prices included in Level 1, that are observable for the assets
or liabilities through corroboration with market data at the measurement date.
D Level 3 — Unobservable inputs that reflect management's best estimate of what market
participants would use in pricing the assets or liabilities at the measurement date.
E. Property Taxes Receivable
Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become
available. Available means due, or past due and receivable within the current period and collected within the
current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay
liabilities in the current period.
Under California law, property taxes are assessed and collected by the counties at 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.
The property tax calendar is as follows:
Lim Date:
January 1
Levy Date:
July I
Due Date:
First Installment- November l
Second Installment- February l
Delinquent Date:
First Installment- December l l
Second Installment- April 1 l
F. Prepaid Items
Prepaid items are payments made to vendors for services that will benefit periods beyond the fiscal year ended
using purchase method.
G. Interjund Transactions
Activities between funds that are representative of lendingfborowing arrangements outstanding at the end of the
fiscal year are referred to as "due fmm/to other fonds" (i.e., current portion of interfund loans).
47
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note I — Summary of Significant Accounting Policies (Continued)
K Capital Assets
In the government -wide financial statements, capital assets, which include land, buildings, improvements,
equipment, fumiture, and infrastructure assets (e.g., roads, sidewalks, and similar items), we recorded at
historical cost or estimated historical if purchased or constructed. Donated capital assets are valued at the
estimated acquisition value on the date donated. City policy has set the capitalization threshold for reporting
capital assets with an initial, individual cost of more than $5,000 and an estimated useful life of one year or more.
The City defines infrastructure as the basic physical assets that allow the City to function. The assets include
street network, street appurtenances, and storm drains.
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.
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.
Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method.
The lives used for depreciation purposes are as follows:
Assets
yeas
Building and Improvements
20-99
Machinery and Equipuant
5-50
Vehicles
4.10
In6astmcture
20-60
I. Unearned and Unavailable Revenue
In the government -wide and fund financial statements, unearned revenue is reported for transactions for which
revenue has not yet been earned. Typical transactions recorded as unearned revenues in the government -wide
financial statements are cell phone site license lease payments received in advance, prepaid charges for services,
facility rentals paid in advance, and quarterly encroachment fees, and advance registration for recreation classes.
In the governmental fund financial statements, unavailable revenue is reported when transactions have not yet
met the revenue recognition criteria based on the modified accrual basis of accounting. The City reports an
unavailable revenue when an asset is reported in governmental fund financial statements but the revenue is not
available.
J. Compensated Absences Payable
City employees have vested interest in varying levels of vacation, sick leave and compensatory time based on
their length of employment It is the policy of the City to pay all accumulated vacation pay and all or a portion of
sick pay when an employee retires or terminates. The long-term amount is included as a liability in the
governmental activities of the government -wide financial statements. A liability for these amounts is reported in
governmental funds only if they have matured, for example, as a result of employee resignations and retirements.
All of the liability for compensated absences applicable to proprietary funds is reported in those funds.
48
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 1—Summary of Significant Accounting Policies (Continued)
K Claims Payable
The City records a liability to reflect an actuarial estimate of ultimate uninsured losses for both general liability
claims (including property damage claims) and workers' compensation claims. The estimated liability for
workers' compensation claims and general liability claims includes "incurred but not reported' C'IBNR') claims.
There is no fixed payment schedule to pay these liabilities.
L Pensions
For purposes of measuring the aggregate net pension liability, deferred outflows of resources and deferred inflows of
resources related to pensions, and pension expense, information about the fiduciary net position of the plans and
additions to/deductions from the plans' fiduciary net position have been detennined on the same basis as they are
reported by the plans (Note 10). For this purpose, benefit payments (including refunds of employee contributions) are
recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.
The following timeframes are used for pension reporting:
CalPERS
Valuation Date
June 30, 2015
Measurement Date
June 30, 2016
Measurement Period
July 1, 2015 m Jane 30, 2016
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension
expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain
or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to
pensions and are to be recognized in future pension expense. The amortization period differs depending on the source
of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All
other amounts are amortized straight-line over the average expected remaining service lives of all members that are
provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.
M. Deferred Outffows/lei lows of Resources
The Statement of Net Position reports separate sections for Deferred Outflows of Resources, and Deferred
Inflows of Resources, when applicable.
Deferred Outflows of Resources represent outflows of resources (consumption of net position) that apply to
future periods and that, therefore, will not be recognized as an expense until that time.
Deferred Inflows of Resources represent inflows of resources (acquisition of net position) that apply to
future periods and that, therefore, are not recognized as revenue until that time.
49
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 1 —Summary of Significant Accounting Policies (Continued)
N. Long -Term Obligations
In the government -wide financial statements, long-term debt and other long -tern obligations are reported as
liabilities in the 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.
O. Net Position
In the government -wide financial statements and proprietary fund financial statements, net position is classified
as follows:
Net Investment in Capital Assets — This component of net position consists of capital assets, net of
accumulated depreciation, debt, and retention payable.
ResMcted — This component of net position consists of restricted assets and related deferred outflows of
resources reduced by liabilities and deferred inflows of resources related to those assets.
Unrestricted — This component of net position is the amount of the assets, deferred outflows of resources,
liabilities, and deferred inflows of resources that are not included in the determination of net investment in
capital assets or the restricted component of net position.
P. Fund Balances
In the governmental fund financial statements, fund balances are classified as follows
Non_ spOdah — Nonspendable fund balances include amounts that cannot be spent because they are not in a
spendable form, such as unrestricted loans receivable or prepaid items, or because resources legally or
contractually must remain intact.
Restricted — Restricted fund balances are the portion of fund balance that have externally enforceable
limitations on their usage through legislation or limitations imposed by creditors, grantor, laws and
regulations of other governments or enabling legislation.
Committed — Committed fund balances are self-imposed limitations by the highest level of decision-making
authority, namely the City Council, prior to the end of the reporting period. City Council adoption of a
resolution is required to commit resources or to rescind the commitment.
Assinned — Assigned fund balances me limitations imposed by management based on the intended use of the
funds. Modifications or rescissions of the constraints can be removed by the same type of action that limited
the use of the funds. Assignment of resources can be done by the highest level of decision making or by a
committee or official designated for that purpose. The City Council has authorized the Finance Director for
that purpose.
50
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 1 — Summary of Significant Accounting Policies (Continued)
P. Fund Balances (Continued)
In the governmental fund financial statements, fund balances are classified as follows (Continued):
Unassigned — Unassigned fund balances represent the residual net resources in excess of the other classifications.
The general fund is the only fund that reports a positive unassigned fund balance amount. In other governmental
funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds
other than general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted,
committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that
fund.
Q. Spending Policy
Government -Wide Financial Statements and the Proprietary Fund Financial Statements
When expenses are incurred for purposes for which both restricted and unrestricted components of net position
are available, the City's practice is to apply the restricted component of net position first, then use the unrestricted
component of net position as needed.
Governmental Fund Financial Statements
When expenditures are incurred for purposes for which both restricted and unrestricted fund balances are
available, the City's practice is to apply restricted fund balances first, then use unrestricted fund balances as
needed.
When expenditures are incurred frr purposes where only unrestricted fund balances are available, the City uses
the unrestricted resources in the following order, except for instances wherein an ordinance specifies the fund
balance:
➢ Committed
➢ Assigned
➢ Unassigned
R Use of Estimates
The preparation of the basic financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could
differ from those estimates.
S. Tax Abatement
Tax abatement is a reduction in tax revenues that results from an agreement between one or more governments
and an individual or entity in which (a) one or more governments promise to forgo tax revenues to which they are
otherwise entitled and (b) the individual or entity promises to take a specific action after the agreement has been
entered into that contributes to economic development or otherwise benefits the governments or the citizens of
those governments. City policy has set the threshold for reporting tax abatement with abatement agreements more
than $15,000
51
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 1— Summary of Significant Accounting Policies (Continued)
T. Accounting Changes
GASB has issued Statement No. 77, Tax Abatement Disclosure. This Statement requires governments that enter
into tax abatement agreements to disclose the following information about the agreements: 1) Brief descriptive
information, such as the tax being abated, the authority under which tax abatements are provided, eligibility
criteria, the mechanism by which taxes are abated, provisions fm recapturing abated taxes, and the types of
commitments made by tax abatement recipients. 2) The gross dollar amount of taxes abated during the period 3)
Commitments made by a government, other than to abate taxes, as part of a tax abatement agreement. This
statement became effective for periods beginning after June 15, 2016 and did not have a significant impact on the
City's financial statements for the year ended June 30, 2017.
GASB has issued Statement No. 78, Pensions Provided through Certain Multiple -Employer Defined Benefit
Pension Plans. This Statement amends the scope and applicability of Statement 68 to exclude pensions provided
to employees of state or local governmental employers through a cost-sharing multiple -employer defined benefit
pension plan that (1) is not a state or local governmental pension plan, (2) is used to provide defined benefit
pensions both to employees of state or local governmental employers and to employees of employers that are not
state or local governmental employers, and (3) has no predominant state or local governmental employer (either
individually or collectively with other state or local governmental employers that provide pensions through the
pension plan). This Statement establishes requirements for recognition and measurement of pension expense,
expenditures, and liabilities; note disclosures; and required supplementary information for pensions that have the
characteristics described above. This statement became effective for periods beginning after June 15, 2016 and
did not have a significant impact on the City's financial statements for the year ended June 30, 2017.
GASB has issued Statement No. 80, Blending Requirements for Certain Component Units. The objective of this
Statement is to improve financial reporting by clarifying the financial statement presentation requirements for
certain component units. This Statement amends the blending requirements fm the financial statement
presentation of component units of all state and local governments. The additional criterion requires blending of a
component unit incorporated m a not-for-profit corporation in which the primary government is the sole corporate
member. The additional criterion does not apply to component units included in the financial reporting entity
pursuant to the provisions of Statement No. 39, Determining whether Certain Organizations Are Component
Units. This statement became effective for periods beginning after June 15, 2016, and should be applied
retroactively. This statement did not have a significant impact on the City's financial statements for the year
ended June 30, 2017.
GASB has issued Statement No. 82, Pension issues. The objective of this Statement is to address certain issues
that have been raised with respect to Statements No. 67, Financial Reporting for Pension Plans, No. 68,
Accounting and Financial Reporting for Pensions, and No. 73, Accounting and Financial Reporting for Pensions
and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain
Provisions of GASB Statements 67 and 68. Specifically, this Statement addresses issues regarding (1) the
presentation of payroll -related measures in required supplementary information, (2) the selection of assumptions
and the treatment of deviations from the guidance in an Actuarial Standard of Practice for financial reporting
purposes, and (3) the classification of payments made by employers to satisfy employee (plan member)
contribution requirements. This statement became effective for periods beginning after lune 15, 2016, and should
be applied retroactively. This statement did not have a significant impact on the City's financial statements for
the year ended June 30, 2017.
52
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 2 — Cash and Investments
The City maintains a cash and investment pool, which includes cash balances and authorized investments of all
funds.
The City had the following cash and investments at June 30, 2017:
Government -Wide
Statement of
Net Position Statemem of
Governmental Fiduciary
Activities Net Position Total
Cash and investments $ 47,414,999 $ 1,293,687 $ 48,708,686
Restricted cash and investment
with fiscal agent 741,820 1,694,238 2,436,058
Total cash and investments S 48,156,819 $ 2,987,925 $ 51,144,744
The City's cash and investments at June 30, 2017 in more detail:
Cash and cash equivalents
Petty cash
$ 6,919
Demand deposits
6,681,702
Investments
44,456,123
Total cash and cash equivalents
$ 51,144,744
A. Demand Deposits
The carrying amounts of the City's demand deposits were $6,681,702 at Jane 30, 2017. Bank balances at that
date were $7,059,095, the total amount of which was insured or collateralized with accounts held by the pledging
financial institutions in the City's name as discussed below.
The California Government Code requires California banks and savings and loan associations to secure the City's
cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall
have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus,
collateral for cash deposits is considered to be held in the City's name.
The market value of pledged securities most equal at least 110% of the City's cash deposits. Califomia law also
allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of
the City's total cash deposits. The City may waive collateral requirements for cash deposits, which are fully
insured up to $250,000 by the Federal Deposit Insurance Corporation ("FDIC"). The City, however, has not
waived the collatemliration requirements.
53
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 2 — Cash and Investments (Continued)
B. Investments Authorized by the California Government Code and the City's investment Policy
The table below identifies the investment types that are authorized by the City's investment policy and the
California Government Code. 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 trustee 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.
Aurhodzed Nvcetrnmt Type
U.S. treasury, securities
U.S. agency and U.S. government sponsored
enterprise securities
Obligmion of the State of California
or my local agency
Registered treasury notes or bonds of my
Of the 49 sates in addition to California
Bankers' acceptance
Commercial paper
Non-negotiable certificate of deposit
Negotiable certificate of deposit
Medium term notes
Money market mutual funds
Local Agency Investment Fund (LABF)
*The table is based on state law requirements or investment policy requirements, whichever is more restrictive.
C. Investments Authorized by DebtAgreements
Authorized Investment T"e
U.S. treasury securities
U.S. agency and U.S. government sponsored
enterprise securities
Bankera me,ptanec
Commercial paper
Money market mutual funds
Investment contacts
Local Agency Investment Fund (LAT)
Maximum
Maximum
Manny
Portfolio*
One Issuer*
5 years
1000A
None
5 years
20%
Now
5 years
100%
Now
5 years
100%
Now
180 days
40%
5%
270 days
25%
10%
5 Yeats
100%
None None
5 years
30%
None None
5 years
30%
10%
89 days
I5%
50 Milllion par
None
100%
account
*The table is based on state law requirements or investment policy requirements, whichever is more restrictive.
C. Investments Authorized by DebtAgreements
Authorized Investment T"e
U.S. treasury securities
U.S. agency and U.S. government sponsored
enterprise securities
Bankera me,ptanec
Commercial paper
Money market mutual funds
Investment contacts
Local Agency Investment Fund (LAT)
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than
the general provisions of the California Government Code or the City's investment policy. The table on the
following page identifies the investment types that are authorized for investments held by bond trustee. The table
also identifies certain provisions of these debt agreements that address interest rate risk, and concentration of
credit risk.
54
Maximum
Maximum
Maximum
Percentage of
Investment
yNone
Portfolio*
One Issuer*
None
None
None
None
None
180 days
None
30%
270 days
None
None
89 days
None
None
30 years
None
None
None
Now
None
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than
the general provisions of the California Government Code or the City's investment policy. The table on the
following page identifies the investment types that are authorized for investments held by bond trustee. The table
also identifies certain provisions of these debt agreements that address interest rate risk, and concentration of
credit risk.
54
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 2 —Cash and Investments (Continued)
D. Fair Value Measurement
At June 30, 2017, investments are reported at fair value. The following table presents the fair value measurement
of investments on a recurring basis and the levels within the fair value hierarchy in which the fair value
measurements fall at June 30, 2017:
Fair Value Meeauremnrt
Level) Level2 Level3
Investment Type Value Input Input Input Uncaugorized
US Treasury Bond/Now
Municipal BondMote
U.S. government sponsor
enterprise securities
Continue Now
Commercial Paper
Negotiable Certificates ofdeposit
LAW
Held by Fiscal Agent:
Money Market Mutual Funds
E. Risk Disclosures
Disclosures Relating to Interest Rate Risk
§ 9,237,371 S 9,237,371 $ - § $ _
722,271 - 722,271 -
6,106,429 - 6,106,429 - -
4,584,756 - 4,584,756 - -
99,869 - 99,869 -
5,533,369 - 5,533,369 -
15,748,277 - - - 15,748,277
2,423,781 - 2,423,781
$ 44,456,127 $ 9,237,371 $ 17,046,694 $ $ 18.172,058
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 is, the greater the sensitivity of its fair value 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.
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:
_ Inveatment Maturities lin your)
Invo nent Tvce Amcor Leas then I I to 2 2 b 3 3 to 4 4 to 5
US Treasury HOndfNote
Municipal Bond/Notc
U.S. government sponsored
enterprise securities
Corporate Now
Commemiel Paper
Negotiable Certificate, of deposit
LAIF
Held by Fiscal Agent:
Money Market Mmual Funds
Tad
S 9,237,371
S .
S 420,935
$ 1,941,416 S 4,299,052
$ 2,575,968
722,271
407,211
315,060
_
6,106,429
-
-
3,211,807 780,969
2,113,653
4,584,756
505,265
1,522,758
2,179,536 -
377,197
99,869
99,869
-
-
5,533,369
2,146353
3,386,816
15,748,277
15,748,277
2,423,781 2,423 781
$ 44,456,123 $ 21,330,956 S 5,645,569 $ 7,332,759 $ 5,080,021 $ 5,066,819
55
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 2 — Cash and Investments (Continued)
F— Risk Disclosures (Continued)
Disclosures Relative to Credit Risk
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 fiscal year end for each
investment type.
Minimum
Investment Type Legal Radius Total AAA AA -to AA+ A to A+ A- Uneated
US Treasury BondMote
Municipal BoodNote
U.S. government sponsored
eano,"n seunties
Corpumlc Note
Cunma:rcial Paper
Negotiable Certificates of deposit
LAW
Held by Fiscal Agent:
Money Mabel Mutual Funds
Concentration of Credit Risk
N/A 5 9,237,371 $
N/A
722,271 -
A
6,106,429 -
4,584,756 310,790
N/A
99,869 -
N/A
5,533,369
15,748,277 -
$ 9,237,371 $ . $
407,211 315,060
6,106,429 -
1,940,352 1,387$82
2,677,220 2,856,149
946,332
99,869
15,748,277
N/A
N/A 2,423,781 2,423,781
S 4,456,123 $ 310.790 $ 20,368,583 5 4,558491 S 1,046,201 $ 18,172,058
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer
beyond that stipulated by the California Government Code. The City's investment in Fannie Mae Agency Note in
amount of $4,425,188 represented 10.5% of total City investments.
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. 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 government 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 most equal at
least 110% of the total amount deposited by the public agencies. 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 public
deposits. At June 30, 2017, the City deposits (bank balances were insured by the Federal Depository Insurance
Corporation up to $250,000 and the remaining balances were collateralized under California law.
56
City of seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 2 — Cash and Investments (Continued)
R. Risk Disclosures (Condnaed)
Custodial Credit Risk (Continued)
For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms
of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting
government.
F. Investment in Local Agency Investment Fund (LAIF")
The City is a participant in LAIF, which is regulated by California Government Code Section 16429 under
the oversight of the Treasurer of the State of California. The City's investments with LAIF at June 30, 2017
included a portion of the pool funds invested in Structured Notes and Asset -Backed Securities, which
included the following:
Structured Notes: debt securities (other than asset-backed securities) whose cash flow characteristics (coupon
rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded
forwards or options.
Asset -Backed Securities: generally mortgage-backed securities that entitle their purchasers to receive a share
of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages
(for example, collateralized mortgage obligations), or credit card receivables.
As of June 30, 2017, the City had $15,748,277 invested in LAIF, which had invested 2.890/o of the pool
investment funds in Structured Notes, Medium-term Asset -Backed Securities, and Short-term Asset Backed
Commercial Paper.
Note 3 — Interfund Transactions
A. Due From/To Other Funds
At Jane 30, 2017, the City had the following due from/to other funds:
Due From ONer Funds
Due To Other Funds General Food
Nonmajor Governmental funds $ 182,409
Tow] $ 182,409
The above amounts resulted from when one fund reflects a deficit in its pooled cash account. Short -tens loans
were made to the Community Development Block Grant Special Revenue Fund, Police Grant Special Revenue
Fund, and Citywide Grant Special Revenue Fond to address these deficits.
57
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 3 — Interfund Transactions (Continued)
B. Transfers
During the year ended June 30, 2017, the City had the following transfers:
imoafere out
General Fond
Citywide Grants Fund
Special Revenue Fund
Noumajm Governmental
Funds
waterutility
Sewer Utility
Internal Service fuvds
TOM
Transfera in
Nomnajor Intemal
General Governmental Service
Fund Foods
$ 2,598,236 $
215,745
639,638 498,557
374,500 -
54,000
Foods Total
310,000 $ 2,908,236
- 215,745
- 1,138,195
- 324,500
54,000
141,453 141,453
$ 1,159,591 $ 3,312,538 $ 310,000 $ 4,782,129
In general, transfers are used to 1) use unrestricted revenues collected in one fund to finance various programs
accounted for in other funds in accordance with budgetary authorizations, and 2) to transfer to the General Fond to
fund administration services.
Transfers totaling $1,159,591 from Water Utility, Sewer Utility, Nonmajor Governmental Funds, and Internal
Services Fund were made to the General Fund to provide funding for certain administrative costs.
General Fund transferred $1,762,466 to City Debt Service Debt Service Food to pay for debt service obligations.
General Fund and nonmajor governmental fund, transferred to the Capital Projects and Equipment Fund of
$1,507,372 and Street Lighting Special Revenue Food of $42,700 for infllstmcture projects such as strut
improvements, public work facilities, and storm drain improvements.
General Fund transferred $310,000 to the internal service fund for vehicle and equipment purchases
Note 4 — Advance to Successor Agency
In 2012, the Sewer Fund advanced $1,200,000 to the former redevelopment agency, but 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 Food (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, 2017, was $714,110.
58
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 5 — Capital Assets
The following is a summary of changes in capital assets for the governmental activities for the year ended
June 30, 2017:
Less accumulated depreciation for
Buildings and improvements
Balance
(366,436)
-
- (5,733,373)
Balance
(1,907,880)
July 1, 2016
Additions
Deletions
Reclassifications
lune 30, 2017
Capital assets not beingdepreciated:
59,986
- (1,374,797)
Infrastructure
(29,812,161)
(2,233,875)
Land
S 10,519,847
$ -
$ -
S -
$ 10,519,847
Intangible asset -land easement
900,000
-
-
-
900,000
Construction in progress
2,477,380
1,229,167
$ (138760) $
(1,542,422)
2,164,125
Total capital assets not being depreciated
13,897,227
1,229,167
(1,542,422)
13,583,972
Capital assets being depreciated:
Buildings and improvements
14,864,389
-
-
835,528
15,699,917
Machinery and equipment
2,210,114
21,554
(127,089)
-
2,104,579
Vehicles
2,458,662
477,688
(192,076)
-
2,744,274
Infrastructure
82,090,619
706,894
82,797,513
Total capital assets being depreciated
101,623,784
499,242
(319,165)
1,542,422
103,346,283
Less accumulated depreciation for
Buildings and improvements
(5,366,937)
(366,436)
-
- (5,733,373)
Machinery and equipment
(1,907,880)
(79,145)
124,419
- (1,862,606)
Vehicles
(1,239,085)
(195,698)
59,986
- (1,374,797)
Infrastructure
(29,812,161)
(2,233,875)
(32,046,036)
Total accumulated depreciation
(38,326,063)
(2,875,154)
184,405
(41,016,812)
Total capital assets being depreciated, net
63,297,721
(2,375,912)
(134,760)
1,542,422 62,329,471
Total governmental activities
S 77,194,948
S (1,146,745)
$ (138760) $
- $ 75,913,443
Depreciation expense was charged to functions/programs of governmental activities for the year ended June 30, 2017
W follows:
General government
S 229,563
Public safety
172,846
Community development
23,442
Public works
2,259,473
Internal service funds
189,830
Total depreciation expense
$ 2,875,154
59
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 5 — Capital Assets (Continued)
The following is a summary of changes in capital assets for the
June 30, 2017:
business -type activities for the year ended
Balance
Balance
July 1, 2016
Additions
Deletions Reclassifications June 30, 2017
Capital assets not being depreciated:
Construction in progress -water
Construction in progress -sewer
S 906,747 $
102,080
$ $ (158,085) S 850,742
Tocapital assets not being depreciated
129,257tal _
1.036,004
391,816
493,896
(20,241) 500,832
- (178,326) 1,351,574
Capitol assets being depreciated:
Buildings and improvements - water
73 284
Machinery and equipment - water
605,152
-
73,284
Machinery and equipment-sewer785,802
605,152
Vehicles -water
Vehicles - sewer
298,707
29,908
39,111 785,802
( ) 289,514
Infinsaucuve - water
420,651
31,653,574
420,651
InfmsWCNre - sewer
38,057.140
-
- 158,085 31,8111,659
Total capital assets being depreciated
_
_ 71,894,320
-
29,908
- _ 20,241 38,077,381
(39,111) 178,326 72,063,443
Less accumulated depreciation for:
Buildings and improvements - water
(72,269)674
( )
Machinery and equipment - water
(487,347
(16,497)
- (72,943)
-
Machinery and equipment-sewer
(221,156)
- (503,844)
Vehicles - water
Vehicles - sewer
(178,038)
(19,5 51)
39111 (236,084)
, - (158,478)
Infreatrucnne - water
(155,973)
(16,472,596 )
(43,669)
(565,190)
- (199642)
-
hilashucture-sewer
(15,071,256)
(1,065,167)
- (17,037,786)
-
Total accumulated depreciation
(32,658,635) (1,725676)
- (16,136421)
39,111
Total capital assets being depreciated, net
39,235,685 (1,695 768)
- (34,345,210)
- 178,326
Taal business -type acfivlties
S 40,271,689 $
(1,201,872)
37,718,743
$ $
- -$ 39,069817
Depreciation expense was charged to functions/programs
as follows:
of business -type
activities for the year ended June 30, 2017
water Utility $ 601,912
Sewer Utility 1,123,764
Total depreciation expense S _ ,1 725,676
i
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 5 — Capital Assets (Continued)
The following is a summary of changes in capital assets for the fiduciary activities for the year ended Jane 30, 2017
Note 6 — Long -Term Liabilities
A. Governmental Activities
Summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2017 is as
follows:
Claesificadun
Balance Balance Duewithin Due in mure
July I, 2016 Addition Deletions June 30, 2017 one Year man On Year
2008 Taxable Panion Obligation Bond
Balance
Balance
July 1, 2016
Additions Deletions
June 30, 2017
Capital assets being depreciated:
- S
(1,047,000) S
2,414,000 S
Buildings and improvements
s 370,804
S - S
- $ 370,804
Machinery and equipment
64,784
2,835,000
64,784
Total capital nasties being depreciated
435,588
1,368,208
435,588
Less accumulated depreciation for:
672,829
69,521
603,308
Buildings and improvements
(313,522)
(3,581)
- (317,103)
Machinery and equipment
(64,784)
320,696
(64,784)
Total accumulated depreciation
(378,306)
(3,581)
(381,887)
Total capital assets being depreciated, net
$ 57,282
$ (3,581) $
$ 53,701
Note 6 — Long -Term Liabilities
A. Governmental Activities
Summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2017 is as
follows:
Claesificadun
Balance Balance Duewithin Due in mure
July I, 2016 Addition Deletions June 30, 2017 one Year man On Year
2008 Taxable Panion Obligation Bond
Bonds, Series A-2
S 3,461,000 $
- S
(1,047,000) S
2,414,000 S
1,151,000 $
1,263,000
2009 Leese Revenun Bands
3,255,000
-
(420,000)
2,835,000
420,000
2,415,000
Municipal Finance Corporetion
1,368,208
-
(695,379)
672,829
69,521
603,308
China payable
377,898
152,708
(103,011)
427,595
106,899
320,696
Compenaated absences
1,228,082
512,072
(516,140)
1,224,014
353,032
870,982
Total
S 9,690,188 $
664,780 S
(2,781,530) $
7,573,438 $
2,100,452 S
5,472,986
The General Fond has been used to liquidate the majority of the liability for compensated absences and net pension
liabilities.
1008 Taxable Pension Obli¢ation Bonds
On Jame 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 expenditmes in the fund financial statements
and as prepaid assets in the government -wide financial statements. The balance in the Series 2008A-1 was paid
off during the year ended Jame 30, 2016. The balance in the 2008A-2 bonds at Jane 30, 2017 was $2,414,000.
61
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 6— Long -Term Liabilities (Continued)
A. Governmental Activities (Continued)
2008 Taxable Pension Oblieation Bonds (Continued)
The annual debt service requirements are as follows:
Year eedivg
Jece 30,
Principal
Interest
Total
2018
$ 1,151,000
$ 107,153
S 1,258,153
2019
1,263,000
39,129
1,302,129
Total
$ 2,414,000
S 146,282
S 2,560,282
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, 2017, were $2,835,000.
The annual debt service requirements are as follows:
Year ending
June 30,
Principal
Interest
Tocol
2018 $
420,000
S 99,335
S 519,335
2019
420,ODD
83,753
503,753
2020
420,000
68,171
488,171
2021
420,000
52,589
472,589
2022
420,000
37,007
457,007
2023-2024
735,000
27,269
762,269
Total $
2,835,000
$ 368,124
S 3,203,124
62
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 6 - Long -Term Liabilities (Continued)
A. Governmenta(Acdvides(Conrinaed)
Municipal Finance Corporation Loan
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, 2017, was
$672,829.
The annual debt service requirements are as follows:
Year ending
lane 30,
Principal
Interest
Tafel
2018
$ 69,521
$ 22,290
S 91,811
2019
71,904
19,906
91,810
2020
74,370
17,441
91,811
2021
76,920
14,891
91,811
2022
79,558
12,253
91,811
2023-2026
300,556
20,782
321,338
Total
$ 672,829
S 107,563
S 780,392
B. Business -Type Activities
Summary of changes in long-term liabilities for business -type activities for the year ended June 30, 2017 is as
follows:
The Water Utility Fund and Sewer Utility Fund have been used to liquidate the liability for compensated absences
and net pension liabilities.
63
Classification
Balance
Balance
Due wiMin
Due in more
July 1, 2016 Additions
Deletions
lune 30, 2017
One Year
than One Year
20115ewer Revenue Refimding Ban&
$ 2,565,000 $ -
$ (145,000)
$ 2,420,000
$
Sewer Capital Improvement Project 41
2,199,329
150,000
$ 2,270,000
Sewer Capital Improvement Project k2
-
1,518,705
(112,597)
2,086,732
115,525
1,971,207
Compensated absences
-
128,455
(67,236)
1,451,469
68,985
1,382,484
153,773
(142,247)
139,981
41,622
98,359
Tote1 _
$ 6,411,489 S 153,773
S (467,080)
$ 610985182
$ 376,132
$ 5,722,050
The Water Utility Fund and Sewer Utility Fund have been used to liquidate the liability for compensated absences
and net pension liabilities.
63
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 6— Long -Term Liabilities (Continued)
B. Business -Type Activities(Continued)
2911 Sewer Yvstem Revenue Refundin Bonds
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, 2017, was $2,420,000.
The annual debt service requirements are as follows:
Year ending
June 30,
Principal
Interest
Total
2018
$ 150,000
$ 114,360
$ 264,360
2019
160,000
107,040
267,040
2020
170,000
99,240
269y10
2021
175,000
91,080
266,080
2022
185,000
82,560
267,560
2023-2027
840,000
235,440
1,075,440
2028-2029
740,000
63,480
803,480
Total
S 2,420,000
S 793,200
$ 3,213,200
Sewer Caoital IMrovement Praiect Loan #1
On April 6, 2011, the City entered into an agreement with the Clean Water State Revolving Fund Control Board
for construction of the Sewer Capital Improvement project The City may borrow up to $2,644,356 or the eligible
costs of the project, whichever is less. At Jane 30, 2016, the State Water Resources Control Board had disbursed
$2,644,015. The loan has an interest rate of 2.6% with maturities through 2031. The outstanding balance at June
30,2017, is $2,086,732.
64
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 6 - Long -Term Liabilities (Continued)
B. Business -Type Activities (Continued)
Sewer Capital Improvement Proiect Loan #I (Continued)
The annual debt service requirements are as follows:
Year ending
June 30,
Principal
Interest
Total
2018
$ 115,525
S 54,255
S 169,780
2019
118,529
51,251
169,780
2020
121,610
48,170
169,780
2021
124,772
45,008
169,780
2022
128,017
41,764
169,781
2023-2027
691,774
157,127
548,901
2028-2032
786,505
62,397
848,902
Total
S 2,086,732
$ 459,972
S 2,546,704
Sewer Capital Improvement Proiect Loan #2
On April 6, 2011, the City entered into an agreement with the Clean Water State Revolving Fund Control Board
for censtmction of the Sewer 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, 2017, is $1,451,469.
The annual debt service requirements are as follows:
Year ending
June 30,
Principal
Interesl
Total
2018
S 68,985
$ 37,738
S 106,723
2019
70,778
35,945
106,723
2020
72,618
34,104
106,722
2021
74,506
32,216
106,722
2022
76,444
30,279
106,723
2023-2027
413,085
120,529
533,614
2028-2032
469,653
63,962
533,615
2033-2034
205,400
8,045
213,445
Toal
S 1,451,469
S 362,818
S 1,814,287
65
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 6 — Long -Term Liabilities (Continued)
C. Fiduciary Activities
1000 Tax Allocation Re(undin¢ Bonds
On December 20, 2000, the Agency issued 2000 Tax Allocation Refunding Bonds for the Riverfmnt 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 lune 30, 2017, were $2,410,000 and $115,000 respectively.
This liability was transferred to the Successor Agency upon dissolution of the redevelopment agency.
The annual debt service requirements are as follows
Year ending
Bands, Series A
Bonds, Series B
cinuifim.
Principal
Balance
Principal Interest
Belm�ce
Due within
Due in more
$ 55,000 $
July 1, 2016 Additions
Delefi.
Jme30,2017
One Y.
thin one Yam
2000 Tu Al tion Bonds SmA
1 2,930,000 1 -
$ (520,000)
$ 2,410,000
$ 545,000
$ 1,865,000
2000 Tu A1lastion Bonds Series B
170,000 -
(55,000)
115,000
55,000
60,000
Advance Oom Sewer Fund (Note 4)
7149110
-
714,110
24,031
474,079
TOW
$ 3,814,110 $
s (575,000)
S 3,239,110
$ 80,031
$ 2,399,079
1000 Tax Allocation Re(undin¢ Bonds
On December 20, 2000, the Agency issued 2000 Tax Allocation Refunding Bonds for the Riverfmnt 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 lune 30, 2017, were $2,410,000 and $115,000 respectively.
This liability was transferred to the Successor Agency upon dissolution of the redevelopment agency.
The annual debt service requirements are as follows
Year ending
Bands, Series A
Bonds, Series B
June 30,
Principal
Interest
Principal Interest
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
165,000
23,784
-
-
2023-2024
360,000
19,619
-
TOW
S 2,410,000
S 326,559
$ 115,000 S
6,756
66
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 7 - Non -City Obligations
A. 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 Fond 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 outstanding balance at
Jane 30, 2017, was $3,365,000.
B. Pacific Gateway Business Center Community Facilities District No 2005-0I
The Pacific Gateway Business Center Community Facilities District No. 2005-01 was formed to finance public
facilities within the Pacific Gateway. 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 seemed 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 fond 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, 2017, was $8,265,000.
Note 8 — Risk Management and Self Insurance Program
A. Description of Self -Insurance Pool Pursuant to Joint Powers Agreement
The City is a member of the California Joint Powers Insurance Authority (the "Authority'). The Authority is
composed of 117 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 coverage. 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.
67
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note S — Risk Management and Self Insurance Program (Continued)
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. Coverage years 2013-14 and forward
are not subject to routine annual retrospective adjustment. The total funding requirement for self-insurance
programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims
history, relative to other members of the risk -sharing pool.
Primary Liabilin, 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 deterrnined 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 2016-17 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 in excess of $2 million layer, and
(b) $3 million annual aggregate deductible in the $5 million in excess of $10 million layer. There is a third annual
aggregate deductible in the amount of $2.5 million in the $5 million in excess of $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. Annual contributions made for fiscal year 16-17
was $548,262.
Workers' Compensation Program
Claims are pooled separately between public safety (police and fire) and general govemment 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 2016-17 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. Annual contributions made for fiscal
year 16-17 was $509,216.
68
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 8—Risk Management and Self Insurance Program (Continued)
C. Purchased Insurance
Pollution Leeal Liability Insurance
The City 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 an
aggregate 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 policy term.
Property Insurance
The City 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 $47,794,034. There is a $5,000 deductible
per occurrence except for non -emergency vehicle insurance which has a $2,500 deductible.
Crime Insurance
The City purchases crime insurance coverage in the amount of $3,000,000 with a $2,500 deductible. The fidelity
coverage is provided through the Authority.
D. Adequacy ofProtecdon
During the past three fiscal years, none of the above 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 2016-17.
E. Claims Activity
Claims expenses and liabilities are reported when it is probable that a loss has occurred and the amount of that
loss can be reasonably estimated. There were workers' compensation claims that remained outstanding for
claims occurred prior to joining the Authority. At June 30, 2017, the amount of these liabilities was $427,595
and was the City's best estimate based on available information.
A stationary of the changes in claims liabilities for the past three fiscal years is as follows:
Workers' Comoemanon
2014-2015 s 329,048 $ 8,739 $ (22,962) $
2015-2016 314,825 165,768 (102,695)
2016-2017 377,898 152,708 (103,011)
W
314,825 S 22,962 $ 291,863
377,898 23,451 354,447
427,595 106,899 320,696
Curem Year
Amounts
Beginning
Claims and
End
Anoints
Due in
of Year
Changes in Claim
of Year
Due within
more than
Liability
Estimates Payments
Liability
One Year
One Year
Workers' Comoemanon
2014-2015 s 329,048 $ 8,739 $ (22,962) $
2015-2016 314,825 165,768 (102,695)
2016-2017 377,898 152,708 (103,011)
W
314,825 S 22,962 $ 291,863
377,898 23,451 354,447
427,595 106,899 320,696
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 9 — Defined Benefit Pension Plans
The following is a summary of net pension liabilities and related deferred outflows and inflows of resources as of
June 30, 2017 and pension expenses for the year then ended June 30, 2017:
Governmental suaneu-Type
AedvIdes Acffviffu TOW
Deferred outflows of resources:
Passion contribution made after measurement date:
Miscellaneous
S
553,199
S
238,555
S
791,754
Safety
1,748,129
-
1,748,129
Difference between Expected and Actoal Experience:
Miscellaneous
I
13,657
5,890
19,547
Difference in projected and actual earrings on
peasion investments:
Miscellaneous
872,388
376,200
1,248,588
Safety
2,715302
-
2,715,502
Adjustment due to diffemnces in proportions:
Safety
1,601,750
1,601,750
Tobi deferral outflows of resource
$
7,504,625
S
620,645
S
8,125,270
Aggregate Net pension liabilities:
Aggregate Net pension liabilities
Miacelleneous
$
7,342,181
S
3,166,164
$
10,508,345
Safety
21,027,509
21,027,509
Total net pension 0ab0id.
$
28,369,690
S
3,166,164
S
31,535,854
Deferred Inflows of Raourcm:
Difference between Expected and Actusl Experience:
Safety
$
126,769
$
-
S
126,769
Changes of msumptim:
Miscellaneous
167,617
72,281
239,898
safety
552,723
-
552,723
Adjustment due to differences in proportions:
Miscelhnmus
198,643
95,660
284,303
DiM. between Citys contributions and
pmportioruted sham of contributions:
Miscellaneous
583,707
251,712
835,419
Safety
674,326
674,326
Total deferral iaffows of Raw..
S
2,303,705
S
409,653
$
2,713,438
Pension expenses:
Miscellaneous
S
861,046
$
538,594
$
1,399,640
Safety
3,428,097
3,428,097
5
4,289,143
S
538,594
5
4,827,737
70
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 9—Defined Benefit Pension Plans (Continued)
GeneralInformation about the Pension Plan
Plan Description
The City contributes to the California Public Employees' Retirement System C CalPERS"), a cost-sharing multiple -
employer defined benefit pension plan. Ca1PERS provides retirement and disability benefits, annual cost -of -living
adjustments, and death benefits to plan members and beneficiaries. Ca1PERS acts as a common investment and
administrative agent for participating public entities within the State of California. Benefit provisions and all other
requirements are established by State statute and City ordinance. Copies of the CAPERS annual financial report may
be obtained from their Executive Office located at 400 P Street, Sacramento, California 95814.
Employees Covered by Benefit Terms
At lune 30, 2015, the following employees were covered by the benefit terms:
Active employees
Trausferred and terminated employees
Separated
Retired Employees and Beneficiaries
Total
Benefit Provided
MimUsseous
Mise PEPRA
Safety
May Fire
49
10
36
39
5
25
1
4
1
140
89
41
253
it
134
42
Ca1PERS provide retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan
members and beneficiaries. Classic and PEPRA Safety Ca1PERS member becomes eligible for service retirement
upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members become eligible
for service retirement upon attainment of age 62 with at least 5 years of service. The service retirement benefit is a
monthly allowance equal to the product of the benefit factor, years of service, and final compensation. The final
compensation is the monthly average of the member's highest 36 full-time equivalent monthly pay.
71
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 9 — Defined Benefit Pension Plans (Continued)
General Information about the Pension Plan (Continued)
Benefit Provided (Continued)
Following are the benefit provisions for each plan:
Cost-sharing Rale Plans
PEPRA Miscellaneous
Miscellaneous Rate Plan" Rate Plan Safety Rate Pim* PEPRA Safety Rate Plan
Hire date
Prior to Jauery 1, 2013
January 1, 2013 and after
Prior W January I, 2013
January 1, 2013 and after
Bmeth formula
2% Q 55
2% aQ 62
3%@ 50
2.7%Q 57
11me01 vesting schedule
5 years service
5 years service
5 year; service
5 yeas service
Benefit payments
monthly for life
monthly for life
monthly for life
monthly for life
Retiremenl age
minimum 50 yrs
minimum 52 yrs
minimum 50 yrs
minimum 50 yrs
Momhly benefits, as a%of
1.426%-2.418%, 50 yrs-
1.000%-2.500%,52 yrs-
3.000%, 50+ym
2.000%2.7000%,50ym-
eligible compensation
63+y a, respectively
67+ yrs, respectively
57+ yes, mspecowly
a Clased m newe mrts
Participants are eligible for non -industrial disability retirement if they become disabled and have at least 5 years of
credited service. There is no special age requirement. The standard non -industrial disability retirement benefit is a
monthly allowance equal to 1.8 percent of final compensation, multiplied by service. Industrial disability benefits are
not offered to miscellaneous employees.
An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The
employee most be actively employed with the City to be eligible for this benefit. An employee's survivor who is
eligible for any other pre -retirement death benefit may choose to receive that death benefit instead of this basic death
benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where
interest is currently credited at 7.5 percent per year, plus a lump sum in the amount of one month's salary for each
completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's
salary is defined as the membees average monthly full-time rate of compensation during the 12 months preceding
death.
Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated survivor(s),
or to the retiree's estate.
Benefit terms provide for annual cost -of -living adjustments to each employee's retirement allowance. Beginning the
second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a
compound basis by 2 percent.
72
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 9 — Defined Benefit Pension Plans (Continued)
General Inforasadon about the Pension Plan (Continued)
Contributions
Section 20814(c) of the California Public Employees' Retirement Law ("PEAL") 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 I following notice of a change in the rate. The total plan contributions are determined through CalPERS'
annual actuarial valuation process. The Public agency cost-sharing plans covered by either the Safety risk pools, the
Plan's actuarially determined rate is based on the estimated amount necessary to pay the Plan's allocated share of the
risk pool's costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer
is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
For the measurement period ended June 30, 2016 (the measurement date), the contribution rate were as follows:
Cost-sharing Rate Plans
PEPRA
Miscellaneous Miscellaneous Safety Rate PEPRA Safely
Race Plan- Rate Plan Plan- Rate Plan
Required employee contribution rates
6.891%
6.500%
8.986%
12.250%
Required employer contribution rates
9.353%
6.730%
20.230%
12.821%
a Closed to new enrrantr
Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pension
Actuarial Methods and Assumnlions Used to Determine Total Pension Liability
The Jane 30, 2015 valuation was rolled forward to determine June 30, 2016 total pension liability based on the
following actuarial methods and assumptions:
Actuarial Con Method
Entry Age Normal
Actuarial Assumptions:
Discount Rate
7.65%
Inflation
2.75%
Salary Increases Varies by Entry Age and Service
Inveurnent rate ofretum 7.65% net ofpmsion plan investmrnt expenses, includes inflation
Mortality Rate ]'able Derived using CaIPERS' Membership Data for all Funds.
Post Retirement Benefit Increase Contract COLA up to 2.75% until Purchasing Power Protection
Allowance Floor on Purchasing Power applies, 2.75% thereafter
'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 2014 experience
study report.
All other actuarial assumptions used in the Jane 30, 2015 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 CalPERS' website under Forms and Publications.
73
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 9 — Defined Benefit Pension Plans (Continued)
Pension Liabilities, Pension FVenses, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pension (Continued)
Chane ofAssumotion
There were no changes of assumptions for Jane 30, 2016 measurement date
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 tun 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 CalPERS' website
under the GASB 68 section.
The long-term expected rats 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, Ca1PERS took into account both short-term and long-term
market return expectations as well as the expected PERF pension fund cash flows. Taking into account historical
returns of all the Public Employees Retirement Funds' asset classes (which includes the agent plan and two cost-
sharing plans or PERF A, B, and C funds), expected compound (geometric) returns were calculated over the short-
term (first 10 years) and the long-term (I1-60 years) using a building-block approach. Using the expected nominal
terms for both short-term and long-term, the present value of benefits was calculated for each PERF 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 -tens returns. The expected rate
of return was then set equal to the single equivalent rate calculated above and rounded down to the nearest one quarter
of one percent.
The table below 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, 2015.
�An expected inflation of 2.5%used for flus pound
'An expected inflation of 3.0% used for this period
74
New strategic
Real Return
Real Rehm
Asset Clew
Allu elao-°/.
Y.l-lo,-°o
Yeersll��-Ya
Glebd Equity
51.00
5.25
5.71
Global Fixed Income
20.00
0.99
2.43
Inflation sensitive
6.00
0.45
3.36
Private Equity
10.00
6.83
6.95
Rod Eetu,
10.00
4.50
5.13
Infras0ucmre and Forestlaud
2.00
4.50
5.09
Liquidity
I.00
-0.55
-1.05
�An expected inflation of 2.5%used for flus pound
'An expected inflation of 3.0% used for this period
74
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 9 — Defined Benefit Pension Plan (Continued)
Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pension (Continued)
Sensitivity ofthe City's Proportionate Share ofthe Net Pension Liability to Chanes in the Discount Rate
The following presents the City's proportionate share of the net pension liability of the Plan as of the measurement
date, calculated using the discount rate of 7.65%, 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 percentage -point lower (6.65%) or 1 percentage -
point higher (8.65%) than the current rate:
Plan's
Net Pension LlabBity/(Ansel)
35,796,203 S
Discount Rate -1%
Current Discount
Discount Rate +I%
(6.65%)
Raw (7.651/6)
Net Changes during 2015-2016
(8.65%)
(860,741)
2,729,609
Miuellaoenus $ 16,371,726
S 10,508,345
$
5,662,552
Safety $ 31,477,373
S 21,027,509
S
12,449,241
Pension Plan Fiduciary Net Position
Detail information about the plan's fiduciary net position is available in the separately issued CalPERS financial
report and can be obtained from CalPERS' website under Forms and Publications.
Proportionate Share ofNet Pension Liability and Pension Expense
The following table shows the plan's proportionate share of the risk pool collective net pension liability over the
measurement period:
tweease (Decrease)
Plan Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability/(Asset)
Misceaancous
Balance at: 6/30/15 (Valuation due)
$ 43,574,939 $
35,796,203 S
7,778,736
Balance at:6/30/16(Measuctnentdate)
45,443,807
34,935,462
10,508,345
Net Changes during 2015-2016
1,868,868
(860,741)
2,729,609
Safety
Balance 9: 6/30/15(Valuation date)
$ 75,905,340 S
59,648,217 S
16,257,122
Balance at: 6/30/16(Meesureaunt date)
79,167,112
58,139,603
21,027,509
Net Changes during 2015-2016
3161,772
(1,508,614)
4,770,387
75
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 9 — Defined Benefit Pension Plan (Continued)
Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pension (Continued)
Proportionate Share o(Net Pension Liability and Pension Expense (Continued)
The following is the approach established by the plan actuary to allocate the net pension liability and pension expense
to the individual employers within the risk pool.
(1) In determining a cost-sharing plan's proportionate share, total amounts of liabilities and assets are first
calculated for the risk pool as a whole on the valuation date (June 30, 2015). The risk pool's fiduciary net
position ("FNP") subtracted from its total pension liability ("TPL') determines the net pension liability
("NPL") at the valuation date.
(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date
(June 30, 2015). Risk pool FNP at the measurement date is then subtracted from this number to compute the
NPL for the risk pool at the measurement date. For purposes of FNP in this step and any later reference
thereto, the risk pool's FNP at the measurement date denotes the aggregate risk pool's FNP at June 30, 2015
less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the
measurement period (2015-16).
(3) The individual plan's TPL, FNP and NPL are also calculated at the valuation date. TPL is allocated based on
the rate plan's share of the actuarial accrued liability. FNP is allocated based on the rate plan's share of the
market value assets.
(4) Two ratios are created by dividing the plan's individual TPL and FNP as of the valuation date from (3) by the
amounts in step (1), the risk pool's total TPL and FNP, respectively.
(5) The plan's TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the
TPL ratio generated in (4). The plan's FNP as of the Measurement Date is equal to the FNP generated in (2)
multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions
made by the employer on behalf of the plan during the measurement period.
(6) The plan's NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).
Deferred outflows of resources, deferred inflows of resources, and pension expense is allocate based on the City's
share of contributions timing measurement period.
The City's proportionate share of the net pension liability was as follows:
Mhgellan"us Safety
June 30, 2015 0.11333% 0.23685%
June 30, 2016 0.12144% 0.20301%
Change- Inorease(Decrease) 0.00811% 0.00616%
76
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 9 — Defined Benefit Pension Plan (Continued)
Pension Liabilities, Pension Expenses, and Deferred Ourylows of Resources and Deferred Inflows of Resources
Related to Pension (Continued)
Proportionate Share of Net Pension Liability and Pension Expense (Continued)
For the year ended June 30, 2017, the City recognized pension expense as follows:
Miscellaneous $ 1,399,640
Safety 3,428,097
$ 4,827,737
The amortization period differs depending on the source of the gain or loss. The difference between projected and
actual earnings is amortized over 5 -years straight line. All other amounts are amortized straight-line over the average
expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the
beginning of the measurement period.
The expected average remaining service lifetime C EARSL'D is calculated by dividing the total future service years by
the total number of plan participants (active, inactive, and retired) in the risk pool. The EARSL for risk pool for the
2015-2016 measurement period is 3.7 years, which was obtained by dividing the total service years of 475,689 (the
sum of remaining service lifetimes of the active employees) by 127,009 (the total number of participants: active,
inactive, and retired).
At June 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Pension contibulion after mean.con, date
Difference bmmn expected and aclaal experience
Changes of assumptions
Difference between projected and acral earning on
pension plan inweshnrnts
Adjusmwnt due to differences in proportions
Difference between City contributions and
proportionate share ofmntributions
Tend
Miscellaneous safety
Deferred outflows Deferred inflows Deferred outflows Deferred inflows
of Resources of Resources of Resources of Resources
S 791,754 8 -
19,547
- (239,898)
1,248,588 -
- (284,303)
(835,419)
1,748,129 S
-
-
(126,769)
-
(552,723)
2,715,502
-
1,601,750
-
(674,326)
S 2,059,889 S (1,359,620) S 6,065,381 S (1,353,818)
77
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 9 — Defined Benefit Pension Plan (Continued)
Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to Pension (Continued)
Proportionate Share oof Net Pension Liability and Pension P,xxvense (Continued)
Deferred outflows of resources related to pensions resulting from the City's contributions made subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended Jane 30, 2017.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will
be recognized in pension expense as follows:
Measurement Period
Deferred Outflows/(inflows) ofitewurces
Ended lune 30,
Miscellaneous
Safety
7.38%
June 30, 2017
2017 $
(579,236) T
521,592
2018
(377,434)
510,295
2019
541,788
1,224,622
2020
323,397
706,925
2021
Therwaer
-
-
-
$
(91,485) $
2963,434
Ca/PERS Discount Rate
On December 16, 2016, the Ca1PERS Board of Administration (the `Board") approved lowering the Ca1PERS
discount rate assumption, the long-term rate of return, from 7.50 percent to the rates below over the next three years.
This will increase the City's employer contribution costs beginning in fiscal year 2018-19. The phase in of the
discount rate change approved by the Board for the next three fiscal year is as follows.
Valuation Date
Required Contribution Rate
Discount Rate
Juin 30, 2016
2018-19
7.38%
June 30, 2017
2019-20
7.25%
June 30, 2018
2020-21
7.00%
Lowering the discount rate means plans will see increases in both normal costs, the cost of pension benefits accruing
in one year for active members, and the accrued liabilities. These increases will result in higher required employer
contribution.
78
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 10 —Other Postemployment Benefit Plan
Plan Description
The City of Seal Beach provides postretirement medical benefits to employees who retire directly from the City under
CalPERS under a singlecmployer 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.
Funding Policy
The contribution requirements of plan members and the City are established and may be amended by City Council.
For fiscal year 2016-2017, the City contributed $512,906 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 CaIPERS 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 OPEB Obligation
The City's annual Other Postemployment Benefits ('WEB") cost (expense) is calculated based on the Annual
Required Contribution of the Employer ("ARC"), an amount actuarially determined. The ARC represents a level of
funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded
actuarial liabilities (or funding excesses) over a period not to exceed thirty years.
The following table shows the components of the City's annual OPEB cost for the year, the amount actually
contributed to the Plan, and changes in the City's net OPEB obligation for these benefits:
Total
Annual required contribution
8 462,076
Interest on net OPEB obligation
(48,108)
Adjustment to anau d required contribution
60,969
Annual OPEB cost (expense)
474,937
Contributions made to the trust
(512,906)
(Increase) in net OPEB asset
(37,969)
Na OPEB asset - begimdng of year
(687,254)
Net OPEB asset - end of year
$ (725,223)
79
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 10 —Other Postemployment Benefit Plan (Continued)
Annual OPEB Cost and Net OPEB Obligation (Continued)
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan and the net OPEB
obligation for year ended June 30, 2017 and the preceding two years are as follows:
FIUN
Year
Ended
6/30/2015
6/30/2016
6/30/2017
Funded Status and Funding Progress
Annual
OPEB Contributions
Con Mede
336,962 $
693,599
466,392
502,000
474,937
512,906
%of Annual
OPEB Cost
Net OPER
Contributed
And
205.$4% $ 651,646
107.63% 687,254
107.99% 725,223
As of July 1, 2015, the most recent actuarial valuation date, the plan was 39% funded. The actuarial accrued liability
for benefits was $9,009,436 and the actuarial value of assets as of July 1, 2015 was $3,516,333, resulting in an UAAL
of $5,493,103. The covered payroll (annual payroll of active employees covered by the Plan) was $8,924,341 and the
ratio of UAAL to the covered payroll was 61 %.
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 costs trend. Amounts determined regarding the funded status of the Plan and the ARC
of the employer are subject to continual revision as actual results are compared with past expectations and new
estimates are made about the future. The schedule of funding progress, presented as Required Supplementary
Information following the Notes to the Basic Financial Statements, presents multi-year trend information about
whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued
liabilities for benefits.
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 the employer and Plan members. 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 value of assets, consistent with the long-term perspective of the calculations.
In the July 1, 2015 actuarial valuation, the entry age normal cost method was used. The actuarial assumptions include
a 7% investment rate of return, which is based on the assumed long-temm return on plan assets assuming 100%
funding through CERBT. Method used was the "Building Block Method" as described in ASOP 27 Paragraph 3.6.2.
The actuarial assumption for inflation was 2.75%, and the payroll increases was 2.75%. The UAAL is amortized as a
level percentage on a 30 -year closed amortization period. The residual UAAL is amortized based on level percentage
method on a open 23 year period at July 1, 2016. The medical trend is assumed at 4% per year.
90
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 11 - Classification of Fund Balances
At June 30, 2017, fund balances are classified in the governmental funds as follows:
Assigned
Citywide Grams
Nonmejor
377,000
- - 377,000
General
Special Revenue
Governmental
Street Improvement
117,167
Fund
Food
Funds
Total
Nonspendable
245,616
- - 745,616
Community Services
1,344,025
Prepaid items
$ 2,877
$
$
$ 2,877
Total nonspendable
2,877
Total fund balances
$ 27,263,637 $
2,877
Restricted
Supplemental Law Enforcement
-
-
62,002
62,002
Deteorion Center
-
-
20,977
20,977
Police Asset Forfeiture
-
-
255,261
255,261
Air Quality Improvement Projects
-
-
8,147
8,147
Parks Improvement
-
-
6,443
6,443
Traffic Lopact AS 1600
-
-
156,739
156,739
State Gasoline Tax
-
-
739,366
739,366
Measure M2
-
-
1,231,082
1,231,082
Community Development Block Grant
-
-
10,241
10,241
Landscape District
-
-
376,275
376,275
Heron Pointe
-
-
73,259
73,258
Pacific Gateway
-
-
136,755
136,755
Seal Beach Cable
-
-
324,218
324,218
City Debt Service
12,277
-
729,543
741,820
Capital Projects and Equipment
896
896
Total restricted
12,277
4,131,203
4,143,480
Assigned
College Park East
377,000
- - 377,000
Swimming Pool
4,782,441
- - 4,782,441
Street Improvement
117,167
- - 117,167
Storm Drain
612,032
- - 612,032
Buildings
245,616
- - 745,616
Community Services
1,344,025
1,344,025
Total assigned
7,478,281
7,478,281
Unassigned(delicin
19,770,202
(138,908) (46,000) 19,585,294
Total fund balances
$ 27,263,637 $
(138,908) $ 4,085,203 $ 31,209,932
81
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 12—Commitments and Contingencies
A. Commitments
The City had several outstanding or planed construction and other projects as of June 30, 2017. These projects
are evidenced by contractual commitments with contractors and include:
ST1509 & ST1610 Westmenter Rehabilitation
B. Contingencies
1,053,170 12,198 1,040,972
S 2,522,817 $ 1,156,066 S 1,264,540
The City is a defendant in a number of lawsuits, which have arisen in the normal course of business. While
substantial damages are alleged in some of these actions, their outcome cannot be predicted with certainty.
C. Grants
Amounts received or receivable from granting agencies are subject to audit and adjustment by grantor agencies.
While no matters of noncompliance were disclosed by the audit of the financial statements or single audit of the
Federal grant programs, grantor agencies may subject grant programs to additional compliance tests, which may
result in disallowed costs. In the opinion of management, future disallowances of current or prior grant
expenditures, if any, would not have a material adverse effect on the financial position of the City.
Note 13—Individual Fund Disclosure
A. Expenditures in Excess ojApproprindon
The following funds report expenditures in excess of appropriations for the yea ended June 30, 2017.
Expendioves m
Expenditure
Contact
dueas.Umc
Remaining
Proieet Name
Amomt
30,2017
Commitments
BG -0904: New Swimming Pool: Westbert+White Inc.
$ 238,930
$ 79,614
S 159,317
WT1607 Ah Street Alley Wner and Sew=Line Replacement
401,659
337,407
64,251
ST1509 & ST1610 Westmenter Rehabilitation
B. Contingencies
1,053,170 12,198 1,040,972
S 2,522,817 $ 1,156,066 S 1,264,540
The City is a defendant in a number of lawsuits, which have arisen in the normal course of business. While
substantial damages are alleged in some of these actions, their outcome cannot be predicted with certainty.
C. Grants
Amounts received or receivable from granting agencies are subject to audit and adjustment by grantor agencies.
While no matters of noncompliance were disclosed by the audit of the financial statements or single audit of the
Federal grant programs, grantor agencies may subject grant programs to additional compliance tests, which may
result in disallowed costs. In the opinion of management, future disallowances of current or prior grant
expenditures, if any, would not have a material adverse effect on the financial position of the City.
Note 13—Individual Fund Disclosure
A. Expenditures in Excess ojApproprindon
The following funds report expenditures in excess of appropriations for the yea ended June 30, 2017.
82
Expenditure
in Exceae of
Expenditure
Appropriation
Appropriation
General Fend:
Debt service
Principal retirement
$ 695,379
S 124,300
$ (571,079)
Interest and fiscal charges
69,347
-
(69,347)
Nonmajor Special Revenue funds:
Supplemental law Enforcement
Public safety
122,926
116,200
(6,726)
Ab Quality Improvement
Publicwork.
32,914
30,000
(2,914)
Seal Beach cable
General govemenem
81,609
75,000
(6,609)
Nonmajor debt service fund:
City Debt Service Fund
Public safety
6,000
2,500
(3,500)
Invest and fiscal charges
283,975
279,200
(4,775)
82
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2017
Note 13 — Individual Fund Disclosure (Continued)
B. Deficit Net Positions and Fund Balances
Funds with deficit net positions at June 30, 2017 are m follows:
Special Revenue Funds:
Deficit
Street Lighting
S (10,169)
Police Giants
(35,831)
Citywide Grants
(138,908)
Note 14 — Prior Period Adjustments
Net position as of July 1, 2016 was restated due to restatement of net pension liabilities and related items as follows:
Beginning net position, as previously reported
Prior period adjustments:
(Over)/Understatemcnt of
deferred outflows of,csoerce.
(UnderyOventatemeot of
net pension liabilities
(Undert'Oversratement of
deferred infiows of resources
Beginning net position, es restated
Note 15 — Subsequent Events
Governmwtal
water
Sewer
Business -type
Activities
Utility
Utility
Activities
$ 82,519,820
$ 24,093,702 $
23,595,525
$ 47,689,227
125,223
(11,222)
(6,056)
(17,278)
355,593
(169,756)
(185,838)
(355,594)
(864,099) (127,583) (97,630) (225,213)
$ 82,136,537 $ 23,785,141 $ 23,306,001 $ 47,091,142
In 2000, the City and the former Redevelopment Agency of the City of Seal Beach (the "Former RDA") entered into
a Joint Exercise of Powers Agreement, dated as of May 8, 2000 (the "Original PFA Agreement") and formed the Seal
Beach Public Financing Authority (the "Authority") pursuant to the Joint Exercise of Powers Act, set forth in
Government Code Sections 6500 et seg.
The Former RDA was dissolved as of February 1, 2012 pursuant to State law and the Successor Agency to the Seal
Beach Redevelopment Agency (the `Successor Agency") was established as the successor entity. The Successor
Agency is tasked with the wind -dawn of the Former RDA's affairs. It was desired for the Successor Agency's
withdrawal as a member of the Authority. However, because there are only two existing members to the Authority
(i.e., the City and the Successor Agency), the Successor Agency's withdrawal, without the substitution of a new
member, would jeopardize the continuing existence of the Authority and cause a disruption to the outstanding
Authority bond obligations.
On Jane 12, 2017, the City Council adopted Resolution No. 6741, to create the Parking Authority, and the Parking
Authority became a new member to the Authority. On the same date, the Successor Agency Board of Directors
adopted Resolution No. SA 17-3, approving the Successor Agency's withdrawal of its Authority membership.
On Jane 28, 2017, the Oversight Board to the Successor Agency adopted Resolution No. OB 17-03, approving such
withdrawal. Resolution No. OB17-03 became effective upon the State of California Department of Finance's
approval, received by the Successor Agency on August 18, 2017.
83
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84
REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)
85
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96
City of Seal Beach
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule — General Fund
For the Year Ended June 30, 2017
Expenditures:
Variance with
Current:
Final Budget
General government
Budgeted Amounts
Actual
Positive
166,628
Original
Final
Amounts
(Negative)
Revenues:
Community development
944,700
1,234,700
894,476
Taxes
$ 22,399,100 $
22,399,100
$ 22,033,465
IS (365,635)
Licenses and pemdts
1,428,300
1,258,300
1,234,590
(23,710)
Intergovernmental
195,800
192,800
90,028
(102,772)
Charges for services
4,244,900
5,317,900
5,225,368
(92,532)
Use of money and property
671,000
671,000
393,700
(277,300)
Fines and forfeitures
1,064,200
164,200
152,845
(11,355)
Contributions
100,500
100,500
180,511
80,011
Miscellaneous
180,200
470,200
440,495
(29,705)
Total Revenues
30,284,000
30,574,000
29,751,002
(822,998)
Expenditures:
Current:
General government
5,439,900
5,575,300
5,408,672
166,628
Public safety
17,365,800
17,813,900
17,218,671
595,229
Community development
944,700
1,234,700
894,476
340,224
Community services
1,073,900
1,077,800
1,004,690
73,110
Public works
4,964,100
5,045,500
4,551,667
493,833
Debt service:
Principal retirement
124,300
124,300
695,379
(571,079)
Interest and fiscal charges
69,347
(69,347)
Total Expenditures
29,912,700
30,871,500
29,842,902
1,028,598
Revenues Over (Under)
Expenditures
371,300
(297,500)
(91,900)
205,600
Other Financing Sources (Uses):
Transfers in
5,299,900
5,319,400
1,159,591
(4,159,809)
Transfers out
(14,006,700)
(15,277,400)
(2,908,236)
12,369,164
Total Other Financing
Sources (Uses):
(8,706,800)
(9,958,000)
(1,748,645)
8,209,355
Net Change in Fund Balance
$ (8,335,500)
S (10,255,500)
(1,840,545)
$ 8,414,955
Fund Balance, Beginning of year
29,104,182
Fund Balance, End ofyear
S 27,263,637
87
City of Seal Beach
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule — Citywide Grant Special Revenue Fund
For the Year Ended June 30, 2017
88
Varian. with
Final Budget
Budgeted
Amounts
Actual
Pasitive
Original
Final
Amounts
(Negative)
Revenues:
Intergovernmental
$ 2,861,000
S 2,861,000
$
S (2,861,000)
Total Revenues
2,861,000
2,861,000
942
(2,860,058)
Revenues over (under)
expenditures
2,861,000
2,861,000
(1,756,033)
(3,150,033)
Other Financing Sources (Uses):
Transfers in-
-
1,762,466
1,762,466
Transfeout
rs
(974,000)
(974,000)
(215,745)
758,255
Tsui Other Financing
sources (Uses):
(974,000)
(974,000)
1,546721
2,520,721
Net Change in Fund Balances
$ 1,887,000
$ 1,887,000
(209,312)
S (2,09.6312)
Fund Baleares, Beginning of Year
723,110
Fund Balances, End of Year
S 513.798
88
City of Seal Beach
Required Supplementary Information (Unaudited)
Notes to the Budgetary Comparison Schedule
For the Year Ended June 30, 2017
Budgetary Control and Accounting Policy
The City prepares its budgets on the basis of estimated revenues and expenditures and, accordingly, the budget
amounts included in the accompanying financial statements are presented on a basis substantially consistent with
generally accepted accounting principles. Encumbrance accounting is utilized during the fiscal year, whereby
purchase orders, contracts and other commitments are recorded in order to control appropriations. However, at fiscal
year end, all appropriates lapse. Accordingly, encumbrances are cancelled and generally aro re -appropriated as part of
the following year's budget. Encumbrances are not included in reported expenditures.
Annual budgets are adopted for the General Fond, Special Revenue Funds, Debt Service Funds, and Capital Projects
Fonda. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the
year.
The budgetary level of control for all governmental fund types is the fund level. The City Manager has the discretion
to transfer appropriations between departments within a fund, but transfers between funds must be approved by the
City Council.
89
City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of the City's Proportionate Share of the Net Pension Liabilities and Related Ratios
For the Year Ended June 30, 2017
Last Ten Fiscal Years
California Public Employees' Redrement System ("CalPERS") Miscellaneous Plan
Measurement Date J. 30, 2016 June 30, 2015 6/30/2014'
City's Proportion ofthe Net Pension Liability/(Asset)
City's Proportionate Share of the Net Pension Liability/(Asset)
City's Covered Payroll
City's Proportionate Share of the Net Pension Liability/(Asset)
as a Percentage of its Covered Payroll
Plan's Proportionate Share of the Fiduciary Net Position
as a Percentage ofthe Total Pension Liability
0.121441/6 0.11333% 0.11644%
$ 10,508,345 S 7,778,736 $ 7,245,313
$ 4,226,024 $ 4,710,212 $ 4,503,370
248.66% 165.15% 160.89%
7h88% 8215% 83.18%
California Public Employees' Retirement System ("CaIPERS") Safety Plan
Measurement Date
June 30, 2016
June 30, 2015
June 30, 2014'
City's Proportion ofthe Net Pension Liability/(Asset)
0.24301%
0.23685%
0.19002%
City's Proportionate Share ofthe Net Pension Liability/(Aasst)
$ 21,027,509
S 16,257,122
S 11,823,793
City's Covered Payroll
$ 4,454,998
S 4,734,950
$ 4,290,168
City's Proportionate Share ofthe Net Pension Liability/(Asset)
as a Percentage of its Covered Payroll
472.00%
343.34%
275.60%
Plays Proportionate Share of the Fiduciary Net Position
as a Percenmge ofthe Total Pension Liability
7344%
78.58%
81,42%
' Historical information is presented only for measurement periods for which GASB 68 is applicable. Additional years will be presented as they
become available.
90
City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of the City's Contributions
For the Year Ended June 30, 2017
Last Ten Fiscal Years
California Public Employees' Retirement
System ("CalPERS") Miscellaneous Plan
2016-17
2015-16
2014-15
2013-14'
Actuarially Determined Contribution
$ 415,323
$ 399,656
$ 614,667
$ 452,594
Contribution in Relation to the Actuarially
Determined Contribution
(791,754)
(709,945)
(734,255)
(614,667)
Contribution Defciency(Excess)
$ (376,431)
$ (310,289)
$ (119.5881
$ (1620731
Covered Payroll
$ 4.352,805
$ 4,22fi 024
S 4,"110212
$ 4,597,510
Contributions as a Percentage
of Covered Payroll
18.19%
1680°a
15.59%
13.37%
California Public Employees' Retirement System ("Ca1PEW') Safety Plan
2016-17
201546
2014-15
2013-14'
Actuarially Determined Contribution
$ 920,480
$ 916,387
$ 1,342,325
$ 1,196,592
Contribution in Relation to the Actuarially
Determined Contribution
(1,748,129)
(1,608,716)
(1,476,452)
(2,157,763)
Contribution Deficiency (Excess)
$ (827,6491
$ (692,329)
$ (134,1271
S (961.17D
Covered Pay ll`
$ 4.518 ,648
$ 4,454,991
5 4,734,950
$ 3,995,001
Contributions as a Percentage
of Covered Payroll
38.10%
36.11 %
54,01%
' Historical information is presented only for measurement periods for which GASB 68 is applicable. Additional years will be presented as they
become available.
Notes to Schedule:
Changes of Assumptions: Discount rate was changed from 7.50%6 7.65% for the June 30, 2015 measurement date
91
City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of Funding Progress — Other Postemployment Benefits
For the Year Ended June 30, 2017
The schedule of funding progress for the past three actuarial valuations is presented below:
92
Unfunded Actuarial
Actuarial
Actuarial Value
Entry Age Actuarial
Accrued Liability
Funded
Covered
UAAL as a %
Veluanon
of Amu
Accrued Liability
("UAAL")
Ratio
Payroll
of Payroll
Date
(A)
(B)
(A - B)
(A/B)
(C)
(A-B)/C
7/1/2011
S 1,738,000
S 6,902,000
(5,164,000)
25.2%
$ 8,083,000
63.891Y.
7/1/2013
2,672,000
6,657,000
(3,985,000)
40.1%
8,903,000
44.76%
7/1/2015
3,516,333
9,009,436
(5,493,103)
39.0%
8,977,000
61.19%
92
SUPPLEMENTARY INFORMATION
93
This pug, imemlwm/ly (e /t blank
94
NONMAJOR GOVERNMENTAL FUNDS
Street Lighting: To account for special assessments that are restricted for the maintenance of streetlights and to finance the
electricity used by the streetlights.
Supplemental Law Enforcement-. To account for funds received from the State under the State Citizens Option for Public Safety
Program. Certain procedures are required to be implemented prior to the use of the funds, and the funds cannot be used in supplant
existing funding for law enforcement.
Detention Center: To account for funds initially funded by monies seeded the previous jail services vendor. The revenues also
derived from sales of commissary items to the prisoners for thein benefit.
Police Asset Forfeiture: To accounts for revenues derived from monies and property seized in drug-related incidents.
Air Quality Improvement: To accounts for supplemental vehicle license fee revenue distributed to Cities by the South Coast Air
Quality Management District pursuant to Assembly Bill 2766. Expenditures are restricted far programs that will reduce air pollution
by reducing, directly or indirectly, mobile source emission pollutants.
Park Improvement: To account for the Quimby Act Fees received by developers that are restricted for the improvement of parks
and recreation facilities.
Traffic Impact: To account for fair -share based fees that will serve in offset, or mitigate, the traffic impacts caused by new
development.
State Gasoline Tax: To accounts for locally shared gas its monies collected by the State. Expenditures are restricted for repair,
construction, maintenance and right-of-way acquisitions relating to streets and highways.
Measure M2: To account for funds for transportation improvements through the Measure M Transportation Investment Plan (M2)
such as major improvement plans target Orange County freeways, streets and mads, transit and environmental programs.
Community Development Block Grant (CDBG) : To account for resources that are restricted for a wide variety of unique community
development needs.
Police Grants: To account for various grants include the Urban Area Security Initiative (UASI), the Office of Traffic Safety (OTS)
DUI grant reimburses funds advanced by the City for DUI enforcement, the Bullet Proof Vest Protection (BVP) grant which provides
matching funds that are restricted for the purchase of bullet -resistant vests, the Alcoholic Beverage Control (ABC) grant said the
Justice Assistance Grant (JAG).
Heron Pointe: To account for the construction and acquisition of certain public street improvements, water and sanitary sewer
improvements, dry utility improvements, park and landscaping improvements.
Pacific Gateway: To account for special assessment that are restricted for costs related to the maintenance of parks, parkways and
open space within the District (Landscape Maintenance).
Seal Beach Cable: To account for revenues derived from PEGS fees which provide for channel capacity to be designated for public,
education, or government use.
City Debt Service Debt Service Fund: To accounts for resources that are restricted for the payments of long-term debt.
Capital Projects and Equipment: To account for major capital projects with various revenues sources but excludes the Water and
Sewer Capital Fund. These sources get transferred into the Capital Imrovement Project Fund.
95
City of Seal Beach
Combining Balance Sheet
Noumajor Governmental Funds
June 30.2017
96
Supplemental
Sheet
Law
Detention
Police Asset
Lighting
Evforc sumt
Center
Forfeiture
ASSETS
Cash it investments
S 3,753
$
66,941
$
21,053
$
255,261
Receivables:
Acwavts
-
_
5
-
Taxes
499
-
_
-
Interest
-
-
_
-
Prepaid items
-
-
-
-
Due fnen other govemments
-
1,512
-
-
Restricted assets:
Cash and investments with fiscal agents
Total Assets
$ 4,252
$
68,453
$
21.058
$
255,261
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities
$ 14,421
$
5,192
$
81
$
-
Accrued wages and benefits payable
-
1,259
-
-
Uneamed revenues
-
_
_
-
Due to other funds
Retentions payable
Total Liabilities
14,421
6,451
81
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances:
Restricted
-
62,002
20,977
255,261
Unassigned (deficit)
(10,169)
Total Fund Balances
(10,169)
62,002
20,977
255,261
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
$ 4,252
$
68,453
$
21,058
$
255,261
96
City of Seal Beach
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2017
ASSETS
Crib and investments
Receivables:
Accounts
Taxes
Interest
Prepaid items
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 and accrued liabilities
Accrued wages and benefits payable
Unearned revenues
Due to other funds
Retentions payable
Total Liabilities
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances:
Restricted
Unassigned (deficit)
Total Fund Balances
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
Succial Revenue
97
Tragic
Air Quality
Parks
Impact AD
State
Improvement
Improvement
1600
Gasoline Tax
$
566
S
6,443
$
156,739
$
739,366
8,141
-
-
-
$
156,739
S.
739366
$
8,707
$
6,443
a
560
$
-
$
560
6,443
156,739
739,366
8,147
8,147
6,443
156,739
739,366
S
8,707
$
6,443
$
156,739
$
739,366
97
City of Seal Beach
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2017
ASSETS
Cash and investments
Receivables:
Accounts
Taxes
Interest
Prepaid items
Due from other governments
Restricted assets:
Cash and investments with fiscal agents
Tofal Assets
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities
Accrued wages and benefits payable
Unearned revenues
Due to other funds
Retentions payable
ToW Liabilities
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Balances:
Restricted
Unassigned (deficit)
Total Fund Balances
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
$ - $ - $ 400 $ -
- 1,343
18,550
26,619 16,882 -
26,619 35,832 1,343
4,444
14,444
1,231,082 10,241
376,275
(35,831)
1,231,082 10,241 (35,831) 376,275
S 1,231,082 $ 36,860 $ 14,445 $ 377,618
98
Commuoity,
Developmenl
Police
Landscape
Measure M2
Block Grant
Grants
District
S 1,160,190
$ -
$ -
s 377,618
70,892
36,860
-
-
14,445
S 1131,082
S 36,860
S 14.445
$ 377.618
$ - $ - $ 400 $ -
- 1,343
18,550
26,619 16,882 -
26,619 35,832 1,343
4,444
14,444
1,231,082 10,241
376,275
(35,831)
1,231,082 10,241 (35,831) 376,275
S 1,231,082 $ 36,860 $ 14,445 $ 377,618
98
City of Seal Beach
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30,2017
ASSETS
Cash and investments
Receivables:
Accounts
Taxes
Imcmat
Prepaid items
Due from other governments
Restricted assets:
Cash aad inveabuents with fiscal agents
Total Assets
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities
Accrued wages and benefits payable
Unearned revenues
One to other fonds
Retentions payable
Total Liabilities
Deferred Inflows of Resources:
Unavailable revenues
Total Deferred Inflows of Resources
Fund Bal ancea;
Restricted
Unassigned (deficit)
Total Fund Balances
Total Liabilities, Deferred Innows
of Resources and Fund Balances
$ 31 $ - $ S
- 1,658
31 1,658
73,258
Special Revenue
324,218
Debt Service
Fund
73,258
Pacific
Seal Beach
City Debt
Heron Man,
Gateway
Cable
Service
$ 73,289
$ 138,205
$ 284,367
$ -
-
29,079
208
-
377
-
10,395
729,543
$ 73.289
$ 138,413
$ 324118
$ 729 543
$ 31 $ - $ S
- 1,658
31 1,658
73,258
136,755
324,218
729,543
73,258
136,755
729,543
324,218
S 73,289 $
138,413 $
324,218 $
729,543
99
City of Seal Beach
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2017
ASSETS
Cash and investments
Receivables:
Accounts
Taxes
Interest
Prepaid items
Due from other governments
Reshided assets:
Cash and investments with fiscal agents
Total Assets
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable and accrued liabilities
Accrued wages and benefits payable
Unnamed revenues
Due to other funds
Retentions payable
Total Liabilities
Deferred follows of Resources:
Unavailable revenues
Total Deferred In0ows of Resources
Fund Balances:
Restricted
Unassigned (deficit)
Total Fund Balances
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
IfIu
Capital
Total Other
Projects and
Govemmemal
Equipment
Funds
278,695 $ 3,562,486
144,977
- 707
- 377
- 10,395
- 15,957
729,543
$ 278.695X442
$ 271,937 $
292,622
-
4,260
18,550
43,501
5,862
5,862
277,799
364,795
14,444
14,444
896 4,131,203
_ (46,000)
896 4,085,203
$ 278,695 $ 4,464,442
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30. 2017
Revenuer:
Taxes
lou rgovemmental
Charges for services
Use of money and property
Miscellaneous
Total Revenues
Expenditures:
Current:
General gover mrnt
Public safety
Community development
Public works
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total Expenditures
Revenues corer (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
Food Balances, End of Year
Soccial Revenue
Supplemental
Street Law Detention Police Asset
Lighting Enforcement Crnter Forfeiture
$ 143,173 $ - $ - $ -
- 129,324 - 256,605
- 11,294 -
691
1,547
143,173
130,015
11,294
258,152
183,028
-
-
-
-
122,926
4,929
13,689
122,926
183,028
4,929
13,689
(39,855)
7,089
6,365
244,463
42,700
-
42,700
2,845
7,089
6,365
244,463
(13,014)
54,913
14,612
10,798
$ (10,1691 $
62,0@ $
20977 $
255261
101
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
Nonmajor Governmental Funds
For the Year Ended June 30,2017
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
Interest and fiscal charges
Total Expenditures
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
Scecial Revenue
Traffic
AG Quality Parka hoped AB State
Imp evemeat Improvement 1600 Gasoline Tax
$ - $ - $ - $ 487,834
32,585 10,000
31
3,751 8,791
32,616 10,000 3,751 496,625
32,914
32,914
1,792
1,792
(298) 10,000 3,751 494,833
(3,557) (209,823) (603,455)
(3,557) (209,823) (603,455)
(298) 6,443 (206,072) (108,622)
8,445 362,811 847,988
$ 8,147 $ 6,443 $ 156,739 $ 739,366
102
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
Nonmajor Governmental Funds
For the Year Ended June 3O, 2017
Revenue
Expenditures:
Current:
General govemment
Public safety
Community development
Public works
Capital ou0ay
Debt service:
Principal
Interest and fiscal charges
Total Expenditures
Revenues over (under)
expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing
Sources (Uses):
Net Change in Fund Balances
Food Balances, Beginning of Year
Food Balances, End of Year
29,750
180,000
59,423
180,000
Community
59,423
Development
Police
Landscape
Measure M2
Block Grant
Quotas
District
Revenues:
(116,591)
(13,000)
Taxes
$ 399,038
$ - $
-
$ 247,032
Intergovemmootal
3,962
192,650
29,750
-
Charges for services
-
-
-
-
Use of money and property
11,996
-
-
2,509
Miscellaneous
376275
1,750
Total Revenues
414,996
192,650
29,750
251,291
Expenditures:
Current:
General govemment
Public safety
Community development
Public works
Capital ou0ay
Debt service:
Principal
Interest and fiscal charges
Total Expenditures
Revenues over (under)
expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing
Sources (Uses):
Net Change in Fund Balances
Food Balances, Beginning of Year
Food Balances, End of Year
29,750
180,000
59,423
103
180,000
29,750
59,423
414,996
12,650
191,868
(116,591)
(13,000)
(116,591)
(13,000)
298,405
12,650
-
178,868
932,677
(2,409)
(35,831)
197,407
$ 1,231,082 $
10 241
376275
103
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
Nonmajor Governmental Funds
For the Year Ended June 30, 2017
Revenues:
Taxes
Intergovernmental
Charges for services
Use of money and property
Miscellaneous
Total Revenues
Expenditures:
Correct
General government
Public safety
Community development
Public works
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total Expenditures
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
Fond Balances, End of Year
Revenue
Pacific
Heron Pointe Gateway
$ - $ 57,829
Debt Service
Seal Beach City Debt
Cable Service
$ - $
-
-
112,421
-
-
-
2,460
942
25,000
25,000
25,000
82,829
114,881
942
81,609
-
6,000
7,839
44,343
-
-
-
-
-
1,467,000
283,975
7,839
44,343
81,609
1,756,975
17,161
38,486
33,272
(1,756,033)
-
-
-
1,762,466
(11,000)
(148,126)
(32,643)
(11,000)
(148,126)
(32,643)
1,762,466
6,161
(109,640)
629
6,433
67,097
246,395
323,589
723,110
$ 73,258
$ 136,755
$ 324,218 $
729,543
104
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued)
Nonmajor Governmental Funds
For the Year Ended June 30. 2017
Expenditures:
Capital Projects
Current:
Fund
General government
Capital
Toted Other
Public safety
Projects and
Governmental
Community development
Equipment
Foods
Revenues:
-
34,706
Taxes
8 -
$ 1,334,906
Intergovernmental
-
654,876
Charges for services
-
123,715
Use of money and property
-
32,718
Miscellaneous
1,506,476
51,750
Total Revenues
2,197,965
Expenditures:
Current:
General government
-
264,637
Public safety
-
177,294
Community development
-
291,605
Public works
-
34,706
Capital outlay
1,506,476
1,506,476
Debt service:
Principal
-
1,467,000
Interest and fiscal charges
283,975
Total Expenditures
1,506,476
4,025,693
Revenues over (under)
expenditures
(1,506,476)
(1,827,728)
Other Financing Sources (Uses):
Transfers in
1,507,372
3,312,538
Tmosfere out
(1,138,195)
Total Other Financing
sources (Use.):
1,507,372
2,174,343
Net Change in Fund Balances
896
346,615
Food Balances, Beginning of Year
3,738,588
Food Balances, End of Year
$ 896
$ 4,085,203
105
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Street Lighting Special Revenue Fund
For the Year Ended June 30.2017
106
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Revenues:
Taxes
S 142,400
$ 142,400
$ 143,173
S 773
Total Revenues
142,400
142,400
143,173
773
Expenditures:
Current:
General government
185,100
185,100
183,028
2,072
Total Expenditures
185,100
185,100
183,028
2,072
Revenues over (under)
expenditures
(42,700)
(42,700)
(39,855)
2,845
Other Financing Sources (Uses):
Transfers in
42,700
42,700
42,700
Total Other Finandng
Sources (Uses):
42,700
42,700
42,700
Net Change in Fund Balances
$
$
2,845
S 2,845
Fund Balances, Beginning of Year
(13,014)
Fund Balances, End of Year
$ (10.1691
106
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Supplemental Law Enforcement Special Revenue Fund
For the Year Ended June 30. 2017
107
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Revenues:
Intergovernmental
$ 100,000
S 100,000 $
129,324
$ 29,324
Use of money and property
300
300
691
391
Total Revenues
100,300
100,300
130,015
29,715
Expenditures:
Cmrene
Public safety
116,200
116,200
122,926
(6,726)
Total Expenditures
116,200
116,200
122,926
(6,726)
Revenues over (under)
expenditures
(15,900)
(15,900)
7,089
22,989
Net Change in Fund Balances
$ (15,900)
S (15,900)
7,089
$ 22,989
Fund Balances, Beginning of Vear
54,913
Fund Balances, End of Vear
$
62,002
107
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Detention Center Special Revenue Fund
For the Year Ended June 30. 2017
108
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Revenue:
Charges for services
$ 10,000
$ 10,000 $
11,294
$ 1,294
Total Revenuer
10,000
10,000
11,294
1,294
Expendltures:
Current:
Public safety
15,000
15,000
4,929
10,071
Total Expenditures
15,000
15,000
4,929
10,071
Revenues over (under)
expenditures
(5,000)
(5,000)
6,365
11,365
Net Change in Fund Balances
$ (5,000)
$ (5,000)
6,365
$ 11,365
Fund Balances, Beginning of Year
14,612
Fund Balances, End of Year
$
20,977
108
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes In Fund Balance - Budget and Actual
Police Asset Forfeiture Special Revenue Fund
For the Year Ended June 30. 2017
109
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original Final
Amounts
(Negative)
Revenues:
Intergovernmental
$ 150,OOP S
150,000
$ 256,605
S 106,605
Use of money and property
1,547
1,547
Todd Revenues
150,000
150,000
258,152
108,152
Expenditures:
Corte.
Public safety
129,100
129,100
13,689
115,411
Total Expenditures
129,100
129,100
13,689
115,411
Revenues over (under)
expenditures
20,900
20,900
244,463
223,563
Net Change in Fund Balances
S 20,900 $
20,900
244,463
S 223,563
Fund Balances, Beginning of Year
10,798
Fund Balances, End of Year
_$ 255.261
109
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Air Quality Improvement Special Revenue Fund
For the Year Ended June 30, 2017
Revenuer:
Intergovemmenral
Use of county and property
Total Revenues
Expenditures:
Current:
Public works
Total Expenditures
Revenues over (under)
expenditures
Fund Balances, Beginning of Year
Fund Balances, End of Year
Variance with
Final Budget
Budgeted Amounts Actual positive
Original Final Amomts (Negative)
$ 30,000 S
30,000 $
32,585 S
2,585
31
31
30,000
30,000
32,616
2,616
30,000 30,000 32,914 (2,914)
30,000 30,000 32,914 (2,914)
110
(298) $ (2981
8,445
581`
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Parks Improvement Special Revenue Fund
For the Year Ended June 30. 2017
III
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original Final
Amounts
(Negative)
Revenues:
Intergovemmenial
$ - $
- $ 10,000
$ 10,000
Use of money and property
300
300
(300)
Total Revenues
300
300 10,000
9,700
Other Financing Sources (Uses):
Transfers out
-
- (3,557)
(3,557)
Total Other Financing
Sources (Uses):
-
(3,557)
(3,557)
Revenues over (under)
expenditures
-
- 3,557
(3,557)
Net Change in Fund Balances
$ 300 S
300 6,443
$ 6,143
Fund Balances, Beginning of Year
Fund Balances, End of Year
III
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Traffic Impact AB 1600 Special Revenue Fund
For the Year Ended June 30. 2017
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:
Charges for smites $ 213,500 $ 213,500 $ - $ (213,500)
Use of money and property 6,000 6,000 3,751 (2,249)
Total Revenues 219,500 219,500 3,751 (215,749)
Revenues over (under)
expenditures
219,500
219,500
3,751
(215,749)
Other Financing Sources (Uses):
Transfers out
(330,000)
(360,000)
(209,823)
150,177
Total Other Financing
sources (Us.):
(330,000)
(360,000)
(209,823)
150,177
Net Change in Fund Balances
$ (110,500)
$ (140,500)
(206,072)
S (65,572)
Fund Balances, Beginning of Year
362,811
Fund Balances, End of Year
$ 156,739
112
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
State Gasoline Tax Special Revenue Fund
For the Year Ended June 30. 2017
Expenditures:
Variance with
Current:
Final Budget
Budgeted Amounts
Actual
Positive
2,000
Original Final
Amounts
(Negative)
Revenues:
2,000
1,792
208
Taxes
$ 643,500 $ 643,500
$ 487,834
$ (155,666)
Use of money and property
6,000 6,000
8,791
2,791
Totud Revenues
649,500 6491500
496,625
(152,875)
Expenditures:
Current:
Public works
2,000
2,000
1,792
208
Tared Expenditures
2,000
2,000
1,792
208
Revenues over (under)
expenditures
647,500
647,500
494,833
(152,667)
Other Financing Sources (Uses):
Transfers out
(1,130,000)
(1,137,100)
(603,455)
533,645
TONI Other Financing
Sources (Uses):
(1,130,000)
(1,137,100)
(603,455)
533,645
Net Change in Fund Balances
$ (482,500)
$ (489,600)
(108,622)
$ 380,978
Fund Balances, Beginning of Vear
847,988
Fund Balances, End of vest
$ 739 366
113
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Measure M2 Special Revenue Fund
For the Year Ended June 30. 2017
expenditures
456,000
456,000
Variance with
(41,1104)
Other Financing Sources (Uses):
Final Budget
Budgeted Amounts
Actual
Positive
(1,169,000)
Original Final
Amounts
(Negative)
Revenues:
Taxes
$ 450,000 $ 450,000
$ 399,038
S (50,962)
Use of money and property
6,000 6,000
11,996
5,996
Total Revenues
456,000 456,000
414,996
(41,004)
Revenues over (under)
932,677
Fund Balances, End of Year
expenditures
456,000
456,000
414,996
(41,1104)
Other Financing Sources (Uses):
Transfers out
(1,050,000)
(1,169,000)
(116,591)
1,052,409
Totul Other Financing
Sources (Uses):
(1,050,000)
(1,169,000)
(116,591)
1,052,409
Net Change in Fund Balances
$ sssssssss.(594,000)
$ (713,000)
298,405
S 1,011,405
Fund Balances, Beginning of Year
932,677
Fund Balances, End of Year
$ 1,23 L082
114
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Community Development Block Grant Special Revenue Fund
For the Year Ended June 30. 2017
115
Variance with
Final Budget
_ Budgeted Amounts
Actual
Positive
Original Final
Amounts
(Negative)
Revenues:
Intergovernmental
$ 180,000 $
1801000
$ 192,650
$ 12,650
Total Revenues
180,000
180,000
192,650
12,650
Expenditures:
Current:
Community development
180,000
180,000
180,000
Total Expenditures
180,000
180,000
180,000
Revenues over (under)
expenditures
-
12,650
12,650
Net Change in Fund Balances
$ S
-
12,650
$ 12,650
Fund Balances, Beginning of Year
(2,409)
Fund Balances, End of Year
115
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Police Grant Special Revenue Fund
For the Year Ended June 30. 2017
116
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Revenues:
Intergovernmental
8 10,000
s 10,000
$ 29,750
8 19,750
Total Revenues
10,000
10,000
29,750
19,750
Expenditures:
Current
Public safety
179,000
179,000
29,750
149,250
Total Expenditures
179,000
179,000
29,750
149,250
Revenues over (under)
expenditures
(169,000)
(169,000)
169,000
Net Change in Fund Balances
$ (169,000)
3 (169,000)
-
$ 169,000
Fund Balances, Beginning of Year
(35,831)
Fund Balances, End of Year
S (35.83D
116
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Landscape District Special Revenue Fund
For the Year Ended June 30. 2017
117
Variance with
Final Budges
Budgeted Amorous
Acute)
Positive
Original
Final
Amounts
(Negative)
Revenues:
Taxes
$ 140,200
$ 140,200
S 247,032
S 106,832
Use of honey and property
2,500
2,500
2,509
9
Miscellaneous
1,750
1,750
Total Revenues
142,700
142,700
251,291
108,591
Expenditures:
Current:
Community development
178,200
178,200
59,423
118,777
Total ExpendiNres
178,200
178,200
59,423
118,777
Revenues over (under)
expenditures
(35,500)
(35,500)
191,868
227,368
Other Financing Sources (Uses):
Transfers out
(13,000)
(13,000)
(13,000)
Total Other Financing
Sources (Use):
(13,000)
(13,000)
(13,000)
Net Change in Fund Balances
S (48,500)
$ (48,500)
178,868
S 227,368
Fund Balances, Beginning of Year
197,407
Fund Balances, End of Year
$ 376 275
117
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Heron Pointe Special Revenue Fund
For the Year Ended June 30, 2017
Expenditures:
Curren
Community development
Total Expenditures
Revenues over (under)
expenditures
Other Financing Sources (Uses):
Transfers out
TONI Other Financing
Sources (Uses):
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
8,000 8,000 7,839 161
8,000 8,000 7,839 161
17,000 17,000 17,161 161
(11,000) (11,000) (11,000)
(11,000) (11,000) (11,000)
$ 6,000 $ 6,000 6,161 $ 161
118
67,097
$ 73,258
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original Final
Amounts
(Negative)
Revenues:
Miscellaneous
$ 25,000 $ 25,000
$ 25,000
$
Total Revenues
25,000 25,000
25,000
Expenditures:
Curren
Community development
Total Expenditures
Revenues over (under)
expenditures
Other Financing Sources (Uses):
Transfers out
TONI Other Financing
Sources (Uses):
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
8,000 8,000 7,839 161
8,000 8,000 7,839 161
17,000 17,000 17,161 161
(11,000) (11,000) (11,000)
(11,000) (11,000) (11,000)
$ 6,000 $ 6,000 6,161 $ 161
118
67,097
$ 73,258
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Pacific Gateway Special Revenue Fund
For the Year Ended June 30. 2017
119
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Revenues:
Taxes
$ -
$ -
S 57,829
S 57,829
Misceltaneous
25,000
25,000
25,000
Total Revenues
25,000
25,000
82,829
57,829
Expenditures:
Current:
Community development
81,700
81,700
44,343
37,357
Total Expenditures
81,700
81,700
44,343
37,357
Revenues over (under)
expenditures
(56,700)
(56,700)
38,486
95,186
Other Financing Sources (Uses):
Transfers out
(156,600)
(156,600)
(148,126)
8,474
Total Other Financing
Sources(Usm):
(156,600)
(156,600)
(148,126)
8,474
Net Change in Fund BalancesS
(213,300)
S (213,300)
as
(109,640)
$ 103,660
Fund Balances, Beginning of Year
246,395
Fund Balances, End of Year
$ 136.755
119
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
Seal Beach Cable Special Revenue Fund
For the Year Ended June 30. 2017
120
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
Revenues:
Charges for services
$ 90,000
$ 90,000
$ 112,421
$ 22,421
Use of money and property
2,000
2,000
2,460
460
Total Revenues
92,000
92,000
114,881
22,881
Expenditures:
Current:
Gemml government
75,000
75,000
81,609
(6,609)
Total Expenditures
75,000
75,000
81,609
(6,609)
Revenues met (under)
expenditures
17,000
17,000
33,272
16,272
Other Financing Sources (Uses):
Transfers out
(219,000)
(273,700)
(32,643)
241,057
Total Other Financing
Sources (Uses):
(219,000)
(273,700)
(32,643)
241,057
Net Change in Fund Balances
$ (202,000)
$ (256,700)
629
S 257,329
Fund Balances, Beginning of Year
323,589
Fund Balances, End of Vear
S 324.218
120
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual
City Debt Service Fund
For the Year Ended June 30. 2017
Valiance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
Revenues:
Use of money and property $ $ $ 942 $ 942
Total Revenues 942 942
Expenditures:
Current:
Public safety
Principal retirement
Interest and fiscal charges
Total Expenditures
Revenues over (under)
expenditures
Other Financing Sources (User):
Tmnsfers in
Total Other Financing
Sources (Uses):
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balance, End of Year
2,500
2,500
6,000
(3,500)
1,475,000
1,475,000
1,467,000
8,000
279,200
279,200
283,975
(4,775)
1,756,700
1,756,700
1,756,975
(275)
(1,756700) (1,756,700) (1,756,033) 667
1,756,700 1,756,700 1,762,466 5,766
1,756,700 1,756,700 1,762,466 5,766
$ $ 6,433 $ 6,433
121
723,110
$ 729,543
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122
AGENCY FUNDS FINANCIAL STATEMENTS
123
City of Seal Beach
Combining Statement of Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2017
124
Community
comtnuvity
Facilities
Facilities
District
District - Heron
Deposits
Hero. Pointe
Pacific Gateway
Total
Assets:
Cub and investments
$
44,836
$ 81,686
$ 145,031
$ 271,553
Restricted assets:
Cash and iavestments with fiscal agents
-
255,307
696,178
951,485
Taxes, receivable
-
5,056
1,785
6,841
Total Assets
$
44.836
S 342A49
842.994
$ 1.229.879
Liabilities:
Deposits payable
$
44,836
$ -
$ -
$ 44,836
Due to bondholders
342,049
842,994
1,185,043
Total Liabilities
S
44.836
J..==342 .049
$ 842.994
$ 1,229.879
124
City of Seal Beach
Combining Statement of Changes in Assets and Liabilities
Agency Funds
For the Year Ended June 30, 2017
Community Facilities District
Balance
Balmce
Her.. Pointe
July 1, 2016
Additions
Deletions
June 30, 2017
Deposit9
Awn:
Astets:
Cash and investments
$
152,498
$
Cash and inve9tmews
$
39,013
$
8,777
$ (2,954)
$ 44,836
Total Assets
$
39.013
Cash and investments with fiscal agents
Liabilities:
1,180
(759)
255,307
Taxes receivable
Deposits payable
$
39,013
$
8,777
$ (2,954)
$ 44,836
Total LloblOties
$
39.013
$
8.777
$(2,954)
$ 44,836
Community Facilities District
Her.. Pointe
Awn:
Cash and investments
$
152,498
$
185,308
$ (256,120)
$
81,686
Restricted assets:
Cash and investments with fiscal agents
254,886
1,180
(759)
255,307
Taxes receivable
5,056
5,056
Total Auele
$
407.384
$
191544
$ (256,879)
$
342049
Liablllaes:
Due to bondholders
$
407,384
$
191,544
$ (256,879)
$
342,049
Total Liabilifies
$
407,384
$
191J44
$ (256,879)
$
342,049
CommuniN Facilities District
Pacific Gateway
Assets:
Cash and inveshnemt
$
147,334
$
496,940
$ (499,243)
$
145,031
Restricted assets:
Cash and investments with fiwal agents
694,418
3,212
(1,452)
696,178
Taxes receivable
-
1,785
1,785
Total Assets
$
841,752
$
501,937
$ (500,695)
$ 842.994
Llabilitie9:
Due to bondholders
$
841,752
$
501,937
$ (500,695)
$
842,994
Total Liabilities
$
841.752
$
501 937
$ (500,695)
$
842,994
125
City of Seal Beach
Combining Statement of Changes in Assets and Liabilities (Continued)
Agency Fund
For the Year Ended June 30, 2017
Total
Assed:
Cash and investments
Restricted assets:
Cash and investments with fiscal agents
Taxes receivable
Total Assets
Liabilities:
Deposits payable
Due to bondholders
Tod) Liabilities
Balance Balance
July 1, 2016 Additions Deletions Jane 30, 2017
$
338,845
$
691,025
$ (758,317)
$
271,553
949,304
4,392
(2,211)
951,485
6,841
6,841
S
1.288.149
$
702,256
$(760,526)
$
1,229,879
$
39,013
$
8,777
$ (2,954)
$
44,836
1,249,136
693,481
(757,574)
1,185,043
$
1288,149
$
702,258$
(760 5
$
1,229,879
126
STATISTICAL SECTION
127
Governmental activities:
Net investment in capital assets,
Restricted
Unrestricted
Total governmental activities net position
Business -type activities:
Net investmeat in capital assets,
Restricted
Unrestricted
Total boniness -type activities net position
Primary government:
Net inveshnent 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)
2010
2011
2012
2013
$ 64,607,970
$
68,117,517
S
70,801,667
$ 73,693,829
6,190,852
5,179,337
2,662,285
3,271,671
30,050,739
27,557,417
29,666,427
23,570,750
100.849.561
$
100,854.271
$ 103.130.379
S 100.536,250
$ 27,416,082
$
29,552,934
$
32,020,831
S 32,645,747
294,407
-
-
-
14,376,270
13,633,764
11,318,443
12,593,950
$ 42,086,759
$
43186698
$
43,339,274
$ 45239,697
$ 92,024,052
$
97,670,451
$
102,822,498
$ 106,339,576
6,485,259
5,179,337
2,662,285
3,271,671
44,427,009
41,191,181
40,984,870
36,164,700
$ 142,936,320
$
144,040.969
$
146.469,653
$ 145.775.947
The City of Seal Beach implemented GASB 34 for the jural year ended June 30. 2003, The City has elected to show only eight years of data far
this schedule.
Source: Finance Department, City of Seal Beach.
128
Governmental activities:
Net investment in capital assets,
Restncted
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 (Continued)
Last Eight Fiscal Years
(accrual basis of accounting)
2014
2015
2016
2017
$ 72,498,068
$
74,296,935
$
73,939,948
$
72,399,752
4,426,990
3,942,792
3,866,679
4,587,081
25,953,129
4,097,282
4,713,193
2,223,399
$ 102,878.187
8,237.009$
82.519.820
S 79110.232
$ 32,360,440
$
34,451,074
$
34,145,069
$
33,109,258
15,532,304
12,470,553
13,544,158
13,722,252
S 47,892.744
$
46.921,627
$
47,689.227
$
46.831,510
$ 104,858,508
$
108,748,009
$
108,085,017
S
105,509,010
4,426,990
3,842,792
3,866,679
4,587,081
41,485,433
16,567,835
18,257,351
15,945,651
150,770,931
S
129,158,636
$
130.209.047
$
126,041,742
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 jar
this schedule.
Source: Finance Department, City of Seal Beech.
129
City of Seal Beach
Changes in Net Position
Last Eight Fiscal Years
accrual basis of accountin
Baalness-type activities:
Fiscal Year
Water utility
2010
2011
2012
2013
Expenses:
1,452,748
11412,326
11402,249
11520,478
Governmental activities:
5,516245
5,418,073
5,567,824
5,788,318
General government
$ 6,462,182 $
8,135,200 $
6,477,795 $
5,373,180
Public safety
14,322,026
13,493,413
14,152,774
15,005,590
Community development
3,332,329
1,654,009
1,372,334
1,781,188
Community services
1,109,303
1,040,723
940,754
1,272,680
Public works
7,745,817
6,304,343
6,577,233
6,212,516
Interest on long-term debt
889,721
1,012,516
693,065
574,763
Total governmental activities expenses
33,861,378
31,640,204
30,213,955
30,219,917
Baalness-type activities:
Water utility
4,063,497
4,005,747
4,165,575
4,267,840
Sewer utility
1,452,748
11412,326
11402,249
11520,478
Total business -type activities expenses
5,516245
5,418,073
5,567,824
5,788,318
Total primary government expenses
39,377,623
37,058,277
35,781,779
36,008,235
Program revenues:
Governmental activities:
Charges for services:
General government
2,190,386
1,770,024
1,462,840
450,911
Public safety
1,725,519
1,515,727
1,667,184
1,565,527
Community development
92,163
92,131
130,118
111,008
Community services
737,470
815,779
930,501
981,440
Public works
1,817,794
1,738,965
1,869,575
1,980,116
Operating contributions and grmts
1,999,260
1,775,825
5,890,556
5,837,093
Capita grants and contributions
422,645
23,967
44,405
Total governmental activities
Program revenues
8,985237
7,732,418
11,995,179
10,926,095
Business -type activities:
Charges for services:
Water utility
5,655,433
4,190,824
4,376,906
4,924,109
Sewer utility
2,184287
2,212,559
2,442,608
2,675,201
Operating some; and contributions
Total business -type activities
program revenues
7,839,720
6,403,383
6,819,514
7,599,310
Total primary government
program revenues
16,824,957
14,135,801
18,814,693
18,525,405
Net revenues (expenses):
Governmental activities
(24,876,141)
(23,907,786)
(18,218,776)
(19,293,822)
Business -type activities
2,323,475
985,310
1,251,690
1,810,992
Total net reveaues(expenses)
(22.552.6661
$ (22,922,4761 $
(16,967.0861
(17.482.8301
The City of Seal Beach implemented GASB 34 for thefrcal year ended June 30, 2003. The City has elected to show only
eight years ofdala
for this schedule.
Source: Finance Department, City of Seal Beach.
130
City of Seal Beach
Changes in Net Position (Continued)
Last Eight Fiscal Years
(accrual basis of accounting)
General revenues and other changes in net position:
Govemma oul activities:
Taxes:
Property faxes
Transient occupancy loxes
Sales tax
Franchise in.
Utility users totes
Other[aees
Motor vehicle in lieu, unrestricted
Use ofmoney and property
Other
Transfers
Extraordinary Gain(loss)
Total governmental activities
Business -type activities:
Use oftmeney and property
Other
Transfers
Extraordinary Gain(loss)
Total business -type activities
Total primary, government
Changes in net position:
Governmental activities
Business -type activities
Total primary, government
Fiscal Year
2010 2011 2012 2013
10,738,530 $
10,794,375 $
10,337,486 $
9,958,198
1,108,785
1,221,491
970,275
1,289,007
4,680,846
4,160,359
4,930,037
5,408,756
941,785
1,030,736
1,008,031
1,126,398
5,056,233
5,310,666
5,484,256
4,732,597
151,724
228,449
338,176
328,743
76,234
119,022
12,868
13,333
752,771
735,082
714,342
372,693
319,134
312,316
230,997
331,175
60,375
23,886,417 23,912,496 20,494,884 23,560,900
92,259
109,160
96,774
84,371
12,645
5,469
4,112
5,060
(60,375)
-
-
-
(1,200,000)
44,529
114,629
(1,099,114)
89,431
23,930,946
24,027,125
19,395,770
23,650,331
(989,724)
4,710
2,276,108
4,267,078
2,368,004
1,099,939
152,576
1,900,423
$ 1.378,280 $
1,104,649 $
2.428,684
$ 6.167.501
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 ofdam
for this schedule.
Source: Finance Department, City of Seal Beach.
131
City of Seal Beach
Changes in Net Position (Continued)
Last Eight Fiscal Years
(accrual basis of accountine)
Business -type activities:
Fiscal Year
Water utility
2014
2015
2016
2017
Expenses:
1,730,940
1,661,225
1,676,651
2,639,043
Governmental activities:
6,170.737
5,699,023
5,778,879
7,616203
General government
S 5,040,070 $
6,551,584 $
6,264,368 S
5,894,947
Public safety
15,999,900
16,022,465
16,972,880
19,867,060
Community, development
1,306,898
1,393,712
1,100,110
1,218,902
Community services
1,079,006
1,129,300
1,036,627
995,468
Public works
6,902,521
7,862,892
6,956,443
6,992,604
Interest on long-term debt
487,221
444,132
349,652
342,951
Tocol governmental activities expenses
30,815,616
33,404,085
32,680,080
35,311,932
Business -type activities:
Water utility
4,439,797
4,037,798
4,102228
4,977,160
Sewerutility
1,730,940
1,661,225
1,676,651
2,639,043
Tocol business -type activities expenses
6,170.737
5,699,023
5,778,879
7,616203
Tocol primary government expenses
36,986 353
39,103,108
38,458,959
42,928,135
Program revenues:
Governmental activities:
Charges for services:
General government
1,632,975
1,820,019
2,074,448
1,913,909
Public safety
1,384,701
2,132,176
1,521220
2,045,589
Community development
182,021
186,858
192,878
217,486
Community services
1,062,796
1,020,316
1,015,517
707,813
Public works
1,962,242
1,937,305
1,832,289
2,105,747
Operating contributions and grants
2,402,490
2,768,435
2,122,139
1,721,167
Capital starts and contributions
10,000
202000
10,000
174,685
Total governmental activities
program revenues
8,637,225
9,885,109
8,768,491
8,886,396
Business -type activities:
Charges for services:
Water utility
5,092,152
4,556,001
4,261,566
4,782,468
Sewer utility
2,775,332
2,765,357
2,466,869
2,784,942
Operating starts and contributions
Total business -type activities
program revenues
7,867,484
7,321,358
6,728,435
7,567,410
Total primary government
program revenues
16,504,709
17,206,467
15,496,926
16,453,806
Net revenues (expenses):
Governmental activities
(22,178,391)
(23,518,976)
(23,911,589)
(26,425,536)
Business -type activities
1,696,747
1,622,335
949,556
(48,793)
Total net revenues(expenses)
$ f20.48L6441
$ (21.896.6411 $
(22.962.0331$
(26.474.3291
The City ofSeal Beach implemented GASB 34 for the focal year ended June
30, 2003. The City has elected to show only eight years o%data, for
this schedule.
Source: Finance Departments City of Scal Beach.
132
City of Seal Beach
Changes in Net Position (Continued)
Last Eight Fiscal Years
(accrual basis of accounting)
General revenues and other changes in net position:
Governmental activities:
Taxes:
property taxes
Transient occupancy taxes
Sales tax
Franchise totes
Utility users tares
Other taxes
Motor vehicle in lieu, uvrest iaW
Use of money and property
Other
Transfers
Extraordinary Gain(loss)
Total governmental activities
Business -type activities:
Use of money and property
Other
Transfers
Extraordinary GainQoss)
Total business -type activities
Total primary government
Changes in net position:
Governmental activities
Business -type activities
Total printery government
Fiscal Year
2014 2015 2016 2017
$ 9,498,277 $
10,050,815 $
10,408,505 $
11,012,246
1,509,095
1,525,723
1,655,376
4,379,341
4,742,859
4,246,080
4,228,730
1,016,938
1,324,860
1,163,595
955,922
4,177,713
4,644,218
4,646,434
4,445,180
1,693,515
555,804
344,789
197,166
190,510
11,035
10,659
9,960
11,235
674,875
725,720
1,004,572
425,014
544,406
356,749
536,175
214,219
378,500
378,500
378,500
378,500
694,585
23,883,929
24,143.649
23,820,086
23,499,231
133,995 109,575 176,437 167,661
805 3,698 20,107 -
(378,500) (378,500) (378,500) (378,500)
956,300 (265,227) (181,956) (210,839)
24,840,229 23,878,422 23,638,130 23,288,392
1,705,538
624,673
(91,503)
(2,926,305)
2,653,047
1,357,108
767,600
(259,632)
$ 4.358.585 $
1981,781
$ 676.097
-L--2 ,1859371
The City of Seal Beach implemented GASB 34 for the fucal year ended June 30, 1003. The City has elected to show only eight years gt-dam for
this schedule.
Source: Finance Department, City of Seal Beach,
133
City of Seal Beach
Fund Balances of Governmental Funds
Last Eight Fiscal Years
(modified accrual basis of accounting)
General Fund
Nonspendable
2010 2011 2012 2013
General fwd:
-
Reserved
$ 30,300 $ - S - $ -
Unreserved
29,988,551
Total general fund
$ 30.018,851
All other gavemmental funds:
8,301,699
Reserved
$ 1,880,130 $ - $ - $ -
Unreserved, reported in:
21,149,350
Low and moderate housing
1,268,309 - - -
Specialrevenuefunds
2,264,014 - -
Debt seri. funds
1,922,685 - - -
Capital project funds
4,126,432
Total all other governmental funds
S 11.461570 $ S $
General Fund
Nonspendable
$ 100
-
Restricted
Assigned
9,371,679
9,106,458
8,301,699
Unassigned
16,952,806
19,263,118
21,149,350
Total general band
_ 26.324.585
S 28,369.576
$ UW4Ll 49
Aa Other government funds:
Nmspendable
$ 1,957,603
S -
$ -
Restnacd
5,179,337
2,662,285
3,271,671
Assigned
2,825,953
87,375
89,004
Unassigned
(134,079)
(470,485)
(56,810)
Total all Other government Ponds:
$ 4828,814
$ 2.279.175
$ 3,303,865
The City of Sea/ Beach has elecledro show only eight years ofdam for this schedule
Source: Finn" Department, City of Seal Beach
134
City of Seal Beach
Fund Balances of Governmental Funds (Continued)
Last Eight Fiscal Years
(modified accrual basis of accounting)
2014 2015 2016 2017
General fund:
Reserved $ - $ - $ - $ -
Unnserved
Total general fwd $ - $ - $ - --
All other governmental funds:
Reserved $ - $ - $ - $
Unreserved,reported in: - - -
Low and moderate housing - - - -
Special revenue foods - - - -
Debt service funds - - - -
Capital project foods
Total all other governmental funds
General Fwd
Nonspendable
$ 1,549,735
$ 666,102
$ 682,859
$ 2,877
Restricted
-
-
-
12,277
Assigned
8,227,258
7,623,994
7,610,286
7,478,281
Unassigned
22,314,838
21,711,517
20,811,037
19,770102
Total general fwd
$ 32A9L81l
$ a001.613
$ 29,100.182
$ 27363.637
All Other government funds:
Nonspendable
$ -
$ -
$ -
$ -
Restricted
4,426,990
3,842,792
3,866,679
4,131,203
Assigned
71,993
-
-
-
Unassigned
(368,629)
(525,408)
(51,254)
(184,908)
Total all Other government funds:
$ 4,130,354
$ 3,317,384
$ 3,815,425
$ 3,946,295
The City of Sea! Beach has elected to show only eight years ofdam for this scheda/e
Source: Finance Department, City of Seal Beach
135
City of Seal Beach
Changes in Fund Balances of Governmental Funds
Last Eight Fiscal Years
(modified accrual basis of accounting)
Expenditures
Fiscal Year
Current
2010
2011
2012
2013
Revenues:
6,280260
7,211,870
5,169,799
5,062,467
Taxes
$ 22,689,660
$ 23,624,925 $
24,165,883
$ 23,831,431
Licenses and perouts
1,586,337
1,179,759
926,761
1,247,750
Intergovemm®tal
1,644,511
949,294
5,058,175
3,002,321
Charges for services
4,150,239
3,769,165
4,044,566
4,117,034
Use ofmoney and property
626,019
735,082
714,342
372,693
Fines and forfeitures
1,029,510
983,702
1,085,291
1,063,172
Contributions from other governments
_
-
-
10,209
Miscellaneous
337,986
312,316
234,597
301,771
Total revenues
32,064262
31,554243
36,229,615
33,946,381
Expenditures
Current
General government
6,280260
7,211,870
5,169,799
5,062,467
Public safety,
13,377245
13,297,057
13,948,663
14,460,833
Community development
3,346,961
1,649,921
1,353,068
1,420,065
Community services
1,036,376
965,222
880,983
1,182,716
Public works
2,817,379
4,059,001
4,047,013
4,156,616
Capital outlay
9,438,315
6,622,692
5,530,575
3,316,684
Debt service:
Principal retirement
1,942,476
2,066,373
2,195,014
1,734,446
Interest and fiscal charges
903,286
1,027,743
790,581
562,184
Bond issuance costs
Total expenditures
39,142,298
36,899,879
33,915,696
31,896,011
Excess (deficiency) of
revenues ovm (under)
expenditures
(7,078,036) (5,345,636)
2,313,919
2,050,370
Other financing sources (uses):
Transfers in
12,577,549
9,370,333
8209,025
5,825,432
Transfers out
(12,780,799)
(9,370,333)
(8,209,025)
(6,135,432)
Debt issuance
-
Proceeds on sale of assets
-
18,614
-
-
ProceedsofDebt-
Capitalleasesissued
_
Total other financing
sources (uses)
(203,250)
18,614
(310,000)
Extraordinary gain/(Ion) on dissolution
ofr.developtnent agency
(7,818,567)
Net change in Pond balances
$ (7.281,286) $
(5,327022)
$ (5.504.6481
$ 1.740.370
Debt service as a percentage of
noncapital expenditures
9.6%
10.2%
10.5%
8.0%
The City of Sea/ Beach has elected to show only eight years
ofdata 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
136
City of Seal Beach
Changes in Fund Balances of Governmental Funds (Continued)
Last Eight Fiscal Years
(modified accrual basis of accountlne)
Expenditures
Fiscal Year
Current:
2014
2015
2016
2017
Revrnues:
4,493,594
5,462,668
5,351,130
5,673,309
Taxes
S 23,476,034
S 23,114,876 $
22,828,144
$ 23,368,371
Licenses and permits
1,369,275
1,377,131
1,304,974
1,234,590
Intergovernmental
869,294
1,725,127
1,388,056
744,904
Charges for services
3,895,371
3,961,691
4,214,690
5,349,083
Use attorney and property
674,875
725,720
1,004,572
426,418
Fines and forfeitures
1,013,695
1,146,509
1,110,606
152,845
Contributions from other governments
341,698
330,885
283,222
180,511
Miscellaneous
579,125
375,588
537,777
492,245
Total revenues
32,219,367
32,757,527
32,671,991
31,948,967
Expenditures
Current:
General government
4,493,594
5,462,668
5,351,130
5,673,309
Public safety
15,439,757
15,811,773
16,378,416
17,395,965
Community development
1,298,071
1,362,308
1,175,339
1,186,081
Community services
1,048,427
1,129,497
1,075,282
1,004,690
Public works
4,871,887
5,631,015
4,862,058
4,586,373
Capital outlay
2,094,120
4,578,308
2,645,823
1,506,476
Debt service:
Principal retirement
1,265,135
1,337,573
1,490,150
2,162,379
Interest and fiscal charges
492,935
441,040
355,819
353,322
Bond issuance costs
31,003,926
35,754,182
33,334,017
33,868,595
Excess (deficiency) of
revenues over (under)
expenditures
1,215,441
(2,996,655)
(662,026)
(1,919,628)
Other financing sources (uses):
Transfers in
4,363,955
7,012,848
5,602,944
4,472,129
Transfers out
(4,295,455)
(6,919,381)
(5,340,308)
(4,262,176)
Debt issuance
1,546,931
Proceeds an sale of assets
_
Proceeds of Debt
Capital leases issued
-
Total other financing
sources (uses)
1,615,431
93,467
262,636
209,953
Extraordinary gain/(loss) on dissolution
of redevelopment agency
Net change in fund balances
$ 2.830,872
$ (2,903,188)
$ (399390)
Debt smite as a percentage of
nonoapiml expenditures
6.1%
59%
6.0%
7.8%
The City ofSaa/ Beach has elected to show only eight years ofdata for this schedule.
NOTE: On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26
that provides fm the dissolution of all redevelopment agencies in the State of California. The
Redevelopment Agency was dissolved on February 1, 2012.
137
City of Seal Beach
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
Redevelopment Agency
city
Fiscal Year
Taxable
Total
Taxable
Ended
Assessed
Drect Tax
Assessed
June 30
Secured
Unsecured
Value
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
167978,268
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
2017
4,978,010,106
189,618,406
5,167,628,512
Redevelopment Agency
Taxable
Total
Assessed
Drect Tax
Secured
Unsecured
Value
Race
$415,609,878
$7,010,892
$422,620,770
1.00%
427,188,898
5,536,607
432,725,505
1.00%
434,606,835
9,702,557
444,309,392
1.00%
408,349,567
10,330,287
418,679,854
1.00%
410,499,845
6,813,130
417,312,975
1.00%
424,660,008
7,294,003
431,954,011
1.00%
453,448,325
8270,821
461,719,146
1.00%
556,548,983
3,863246
560,412,229
1.00%
530,597,248
32,693,247
563290,495
1.00%
300,533,393
2,090,757
302,624,150
1.00%
The City of Sea! Beach has elected to show only ren years ofdafajor this schedule.
Beginning with the fiscal year ended June 30, 2003, exemptions are netted
directly against the individual property categories.
NOTE:
En 1978 the voters of the State fCalifornia 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 ofproperty, 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 minket value of taxable property and is subject to the Incubations
described above.
Source: County ofOrsage,Auditor - Controller Assessed Valuations Detail
138
City of Seal Beach
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
Fiscal Yew
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
City Direct Rates:
City Direct Rate 1.00000 1.00000 1.00000 1.00000 1.011000 1.00000 1.00000 1.00000 1.00000 1.00000
Overlapping Rates:
Orange County Bonds 0.01501 0.01472 0.01673 0.01750 0.01754 0.01881 0.03015 0.03015 0.03092 0.03092
Metropolitan Water District 0.00450 0.00430 0.00430 0.03347 0.00370 0.00350 0.00350 0A0350 0.00350 0.00350
Other Districts 0.00000 0.00000 0.01995 0.00370 0.03603 0.04124 0.04830 0.04821 0.05219 0.05219
Total Direct Rate 1.02069 1.01951 1.01902 1.04098 1.05467 L05727 1.06355 1.08195 1.08661 1.08661
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
ofassessed property values for the payment ofthe School District bonds.
Source: County of Orange, Auditor -Controllers Office
139
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 Conn & Cone
140
2017
2008
Percent of
Percent of
Total City
Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Taxpayer
Value
Value
Value
Value
Seal Beach Mutual
$ 851,346,169
16.59%
$ 635,176,897
16.39%
CPT Shops at Rossmoor LLC
121,857,926
2.38%
-
0.00%
Boeing North American
119,326,874
2.33%
117,638,350
3.04%
ASN Long Beach LLC
117,350,468
2.29%
80,687,749
2.08%
Terra Funding -Bixby Ranch LLC
88,420,060
1.72%
-
0.00%
Thums Long Beach Co.
-
0.00%
76,227,062
1.97%
Bixbybit-Bixby Office Park LLC
-
0.00%
56,143,247
1.45%
At United States Seal Beach Senior Housing
48,800,992
0.95%
-
0.00%
Knickerbocker Props Inc XLVI
-
0.00%
46,145,235
1.19%
Ranch Town Center LLC
45,023,320
0.88%
-
OA0%
OXY Long Beach Inc
42,983,870
0.84%
-
0.0004
Levine Investments LP
-
0.00%
41,619,277
1.07%
Plains Exploration
-
0.00%
34,668,791
0.89%
Hellman Properties LLC
-
0.00%
29,815,789
0.77%
Old Reach Country Club LLC
-
0.00%
24,827,810
0.641/v
Columbia Regency Retail Partners LLC
24,454,351
0.48%
-
0.00%
Appo0o Building 2 LLC
24,150,442
0.47%
-
0.00%
$ 1,483,714,472
28.93%
29.49%
$ 1,142,950,207
The amounts shown above include assessed value data for both the City and the Redevelopment Agency.
Source: HDL Conn & Cone
140
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 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: Orange County Tax Ledger
141
Collected within the
Fiscal
Tates 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
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%
2017
10,945,834
10,710,665
97.85%
65,706
10,776,371
98.45%
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 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: Orange County Tax Ledger
141
City of Seal Beach
Ratios of Outstanding Debt by Type
Last Nine Fiscal Years
The City of Seal Beach has elected to show only nine years ofdalaforthis 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 ofall 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 Seel Beach Redevelopment Agency.
See the schedule of Demographic and Economic Statistics on page 149 fm personal income and
population data.
'Data not readily available.
Source: Finance Department, City of Seal Beach
142
Governmental Activities
Fiscal Year
Countrywide
Tax
Pension
Fire
Total
Ended
Capital
Financing
Allocation
Obligation
Station
Governmental
June 30
Leese
Authority Lease
Bonds
Bonds
Bonds
Climate,
Activities
2009
$ 534,444
$ 335,000
S 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
-
19,684,595
2012
202,581
-
-
7,227,000
4,935,000
-
12,364,581
2013
70,135
-
-
6,045,000
4,515,000
-
10,630,135
2014
-
-
-
5,270,000
4,095,000
1,562,400
10,927,400
2015
-
-
-
4,411,000
3,675,000
1,488,358
9,574,358
2016
-
-
-
3,461,000
3,255,000
1,368,208
8,084,208
2017
-
-
-
2,414,000
2,835,000
672,829
5,921,829
The City of Seal Beach has elected to show only nine years ofdalaforthis 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 ofall 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 Seel Beach Redevelopment Agency.
See the schedule of Demographic and Economic Statistics on page 149 fm personal income and
population data.
'Data not readily available.
Source: Finance Department, City of Seal Beach
142
City of Seal Beach
Ratios of Outstanding Debt by Type (Continued)
Last Nine Fiscal Years
the City of Seal Beach has elected to show only nine years ofdam far this schedule.
Noes:
Details resettling 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 1X26
that provides for the dissolution ofall 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.
'See the schedule of Demographic and Economic statistics on page 149 for personal income and
population data.
*Data not readily available.
Source: Finance Department' City of Seal Beach
143
Business -type Activifies
Economic
Fiscal Year
Development
Sewer
S. 2011
Sewer
Total
Total
Percentage
Debt
Ended
Administration
Certificates of
Installment
State Revolving
Businesa-type
Primary
ofpersonal
Per
lune 30
Loan
Participation
Agreement
Agreement
Acfivities
Crovemment
Income
-Capita
2009
$ 121,962
$ 3,555,000
$ -
$ -
$ 3,676,962
$ 27,370,406
•
1,058
2010
111,016
3,460,000
-
-
3,571,016
25,321,984
•
974
2011
99,521
-
3,200,000
-
3,299,521
24,184,116
'
930
2012
87,453
-
3,085,000
-
3,172,453
16,737,034
•
687
2013
74,780
-
2,965,000
4,645,401
7,685,181
19,515,316
•
750
2014
-
-
2,835,O00
4,068,778
6,903,778
19,031,178
'
732
2015
-
-
2,705,000
3,893,311
6,598,311
17,125,013
•
697
2016
-
-
2,565,000
3,718,034
6,283,034
15,081,352
•
613
2017
-
-
2,420,000
3,538,201
5,958,201
11,880,030
•
483
the City of Seal Beach has elected to show only nine years ofdam far this schedule.
Noes:
Details resettling 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 1X26
that provides for the dissolution ofall 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.
'See the schedule of Demographic and Economic statistics on page 149 for personal income and
population data.
*Data not readily available.
Source: Finance Department' City of Seal Beach
143
City of Seal Beach
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal Year
Ended
June 30
Bonds
2008
$ 6,800,000
2009
6,410,000
2010
6,005,000
2011
5,575,000
2012
-
2013
22,824,000
2014
882
2015
21,087,000
2016
811
2017
19,241,000
Private
Percent of
Placement
Total
Assessed
Per
Bonds
Bonds
V.I.,
Capita
$ -
S 6,800,000
0.14%
$ 263
16,414,000
22,824,000
0.47aA
882
15,082,000
21,087,000
0.43%
811
13,666,000
19,241,000
0.38%
790
12,162,000
12,162,000
0.24%
497
10,560,000
10,560,000
0.21%
406
9,365,000
9,365,000
0.19%
360
8,086,000
8,086,000
0.15%
329
6,716,000
6,716,000
0.12%
273
5,249,000
5,249,000
0.10%
213
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 Some 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 m Ne Successor Agency to
the Seal Beach Redevelopment Agency
Source: Finance Department, City of Seal Beach
144
City of Seal Beach
Schedule of Direct and Overlapping Debt
June 30, 2017
2016-17 Assessed Valuation' $5,167,628,512
OVERLAPPING TAX AND ASSESSMENT DEBT:
Metropolitan Water District
Coast Community College District
North Orange A. Community College District
Los Alamitos Unified School District School Facilities Imp District No.]
Huntington Beach Union High School District
Ocean View School District
City of Seal Beach Community Facilities District No. 2002.1
City of Seal Beach Community Facilities District No. 2005.1
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT
OVERLAPPING GENERAL FUND DEBT
Orange County General Fund Obligations
Orange County Pension Obligations
Orange County Board of Education Certificates of Participation
North Orange County Regional Occupation Program Certificates of Participation
Coast Community College District Certificates of Participation
Los Alamitos Unified School District Certificates of Participation
Other School District General Fund Obligations
City of Seal Beach Fire Station Lcase Revenue Bonds
City of Seal Beach Taxable Pension Obligations
TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT
OVERLAPPQ'G TAX INCREMENT DEBT (Successor Agency)'
TOTAL DIRECT DEBT
TOTAL OVERLAPPING DEBT
COMBINED TOTAL DEBT
Total Debt City's Share of
%Applicable m 6/302017 Debt 6130117
0.200%
$ 74,905,000
S 149,810
2.973%
805,844,504
23,957,757
1.229%
240,284,001
2,953,090
50.089%
104,615,227
52,400,721
0.0001%
193,079,998
193
0.0004%
45,000,000
180
100.000%
3,365,000
3,365,000
100.000%
8,265,000
8,265,000
$ 91,091,751
0.984% $227,516,000 $ 2,238,757
0.984%
386,762,539
3,805,743
0.984%
14,440,000
142,090
4.498%
9,910,000
445,752
2.973%
3,610,000
107,325
54.867%
42,901,903
23,538,987
0.001-0.0004%
87,881,090
160
100%
2,8.351000
2,835,000
100%
2,414,000
2,414,000
$ 35,527,814
100%
$ 2,525,000
$ 2,525,000
�'� Percentige ofoverlapping agency's assessed valuation located within boundaries of the city.
r" Excludes rax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and
non -bonded capital lease obligations.
Ratios to Adiusted Assessed Valuation'
Total Overlapping Tax and Assessment Debt 1.76%
Total Direct Debt ($5,249,000) 0.10%
Combined Total Debt 2.505/o
Combined Total Debt 2.50%
Ratios to Redevelopment Incremental Valuation ($301,296,947)'
Total Overlapping Tax Increment Debt
Source: California Municipal Statistics, Inc.
145
0.84%
S 5,249,000
$123,895,565
$129,144,565 m
Debit limit
Total net debt applicable to limit
Legal debt margin
Total debt applicable to the limit
as a percentage of debt limit
City of Seal Beach
Legal Debt Margin Information
Last Nine Years
Fiscal Year
2009 2010 2011 2012 2013
$ 703,441,459 S 702,829,614 $ 705,106,754 $ 760,030,328 $ 736,876,598
$ 703,441,459 S 702,829,614 $ 705,106,754 S 760,030,328 $ 736,876,598
0.0% 0.0% 0.0% 0.0% 0.0%
The City has elected to show only nine years ofdatafor this schedule.
Note: 'Under state finance law, the City of Seal Beach's outstanding general obligation debt should
not exceed 15 percent oftotal 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 Assessor's Office
146
City of Seal Beach
Legal Debt Margin Information (Continued)
Last Nine Years
Debit limit
Total net debt applicable to limit
Legal debt margin
Total debt applicable to the limit
as a percentage ofdebt limit
Legal Debt Margin Calculation for Fiscal Year 2016
Fiscal Year
2014 2015 2016 2016
S 756,328,731 $ 817,720,762 S 846,747,277 $ 820,537,899
$ 756,328,731 $ 817,720,762 $ 846,747,277 $ 820J.,537,899
0.0% 0.0% 0.0% 0.0%
Assessed Valuation
$ 5,470,252,662
Debt percentage
15%
Debt limit
$ 820,537,899
Debt applicable to limit
Legal debt margin
$ 820,537,899
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 oftotal 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.
Sconce: Orange County Tax Assessor's Office
147
City of Seal Beach
Pledged -Revenue Coverage
Last Ten Fiscal Years
2000 Tac Allocation Refunding Bonds
Fiscal Year
Ended
Tax
Debt Service
June 30
Increment
Principal
Interest
Coverage
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
2017
1,218,363
575,000
148,759
1.68
The Cin, has elected to show only len years ofdatafor this schedule.
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
Source: Finance Depamvent, City of Seal Beach
148
Calendar
Year
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
City of Seal Beach
Demographic and Economic Statistics
Last Ten Calendar Years
Population
25,752
25,851
25,881
26,010
24,354
24,487
24,591
24,586
25,078
24,890
The City has elected to show only ten years ofdata for this schedule.
Soarces: HDL Corey & Cove
Personal
Income
in thousands
149
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
1,164,182
Per Capita
Personal
Income
47,311
47,848
46,164
40,202
42,511
43,520
44,039
43,715
45,500
46,773
Unemployment
ante
2.8%
3.8%
6.6%
7.1%
6.4%
4.1%
3.7%
4.8%
3.9%
3.5%
City of Seal Beach
Top 25 Sales Tax Producers
For Fiscal Years 2016-17 & 2007-08
2016-17 Percent of Fiscal Year Total Paid by Top 25 Accounts = 57.21%
2007-08 Percent of Fiscal Year Total Paid by Too 25 Accounts = 77.89%
Firms Listed Alphabetically: Period April Thou March
Source: Hinderliter, de Llamas & Associates, State Bound of Equalisation
150
Business
Business Nerve
2016-17
2007-08
Category
76
X
x
Service Stations
AT&T Mobility
x
Electronics/Appliame Store
Bed Bath & Beyond
x
x
Home Furnishings
Chevron
x
x
Service Stations
Chevron & Auto Repair
x
x
Service Stations
Chick Fil A
x
Quick -Service Restaurants
Circuit City
x
Electronics/Appliance Store
Cosmodyne
x
Drugs/Chemicals
CVS Pbasmacy
x
x
Drugstores
Energy Tubulars
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 Star.
Old Ranch Country Club
x
x
Leisure/Entertainment
Original Parts Group
x
Automotive Supply Stores
Pavillions
x
Grocery Stares Liquor
Petsman
x
Specialty Stores
Pinnacle Petroleum
x
Petroleum Prod/Fgwp
Ralphs
x
x
Grocery Stores Liquor
Roger Dunn Golf Shop
x
x
Spurting Goods/Bike Stores
Seal Beach Chevron
x
Service Stations
Smog Pros
x
Service Stations
Spaghe0im
x
x
Fine Dining
Sprouts Farmers Market
x
Grocery Stores Beer/Wine
Staples
x
Office Supplies/Fumiture
Target
x
x
Discount Dept Stores
Toys R Us
x
Specialty Stora
Ulm Beauty
x
Specialty Stores
Walls Wharf
x
x
Fine Dining
World Wide Technology
x
Office Equipment
AT&T Mobility
x
Electm acs/Appliance Store
2016-17 Percent of Fiscal Year Total Paid by Top 25 Accounts = 57.21%
2007-08 Percent of Fiscal Year Total Paid by Too 25 Accounts = 77.89%
Firms Listed Alphabetically: Period April Thou March
Source: Hinderliter, de Llamas & Associates, State Bound of Equalisation
150
City of Seal Beach
Full-time and Part-time City Employees by Function
Last Six Fiscal Years
Full -Time and Part -Time
Employees as of June 30,
Function 2012 2013 2014 2015 2016 2017
General govermneot
13.83
10.97
10.56
Public safety
64.77
63.91
76.78
Public works
8.36
11.49
11.03
Community
13.82
12.60
5.91
development
8.80
10.60
12.01
Water
12.48
12.29
12.60
Sawer
3.95
3.95
5.28
Total
112.19
113.21
128.26
The City of Seal Beach has elected to show only the previous six years ofdala for this schedule
Sumce: Finance Department, City of Seal Beach
151
14.64
14.34
15.92
79.13
74.12
77.19
10.94
4.97
3.98
18.16
17.25
16.53
13.80
13.82
12.60
5.91
7.11
7.69
142.58
131.61
13391
Police:
Arrests
Parking citations issued
Public works:
Street centerline miles resurfaced
Number ofpublic right of way permits issued
Number of street related service requests
Parks and recreation:
Number of recreation classes
Number of facility rentals
Water:
Norther ofwater meters replaced
Acre feet ofwater used
Sewer.
Number of feet ofsewer cleaned
Number of catch basins cleaned
City of Seal Beach
Operating Indicators by Function
Last Sia Fiscal Years
2012
2013
2014
2015
2016
2017
705
18,528
819
18,451
758
18,931
798
21,043
790
19,264
781
18,319
2
2
l
2
l
127
96
140
151
184
259
121
134
35
45
40
68
456
2,156
678
781
680
710
562
3,182
1,763
2,633
557
585
Ill
128
85
57
76
56
3,534
3,818
3,878
3,540
3,208
3,259
203,584
245,986
253,099
253,099
217,619
417
417
401
434
458
216
The City of Seal Beach has elected to show only the previous six years ofdata for this schedule.
Source: City of Seal Beach
152
City of Seal Beach
Capital Asset Statistics by Function
Last Six Fiscal Years
The City of Seal Beach has elected io show only rhe previous six years ofdana forthis schedule.
Source: City of Sesl Beach
153
2012
2013
2014
2015
2016
2017
Police:
Stations
2
2
2
2
2
2
Patrol wits
34
34
34
34
34
34
Public works:
Streets (center line miles)
43
43
43
43
43
43
Sidewalk(miles)
86
86
86
86
86
86
Signalized intersections
23
23
23
23
23
23
Parks and recreation:
Parks
10
10
10
10
10
10
Community centers
3
3
3
3
3
3
Water:
Water pipe(miles)
72
72
72
72
72
72
Reservoirs
2
2
2
2
2
2
Sewer
Sanitary sewers (miles)
37
37
37
37
37
37
Storm sewers (miles)
4
4
4
4
4
4
Sewer 0/1/pump stations
7
7
7
7
7
7
The City of Seal Beach has elected io show only rhe previous six years ofdana forthis schedule.
Source: City of Sesl Beach
153
This page inrentinnal(y Jeff hl.nk
154
Attachment "D"
City of Seal Beach
Seal Beach, California
Independent Accountants' Report on
Agreed -Upon Procedures Applied to
Appropriations Limit Schedule
For the Year Ended June 30, 2017
PUN urs
CLOUN AN15& AIM71M
PUN GROUP
ACCOUNTANTS & ADVISORS
INDEPENDENT ACCOUNTANTS' REPORT ON
APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of City Council
of the City of Seal Beach
Seal Beach, California
We have performed the procedures enumerated below, which were agreed to by the City of Seal Beach, California
(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 XIII -B of the California Comanution) on assisting
you in meeting the requirements of Section 1.5 of Article XIII -B of the California Constitution for the year ended
June 30, 2017. The City's management is responsible for the Appropriations Limit Schedule. The sufficiency of
these procedures is solely the responsibility of the City. 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 any
other purpose.
The procedures performed and associated findings are as follows:
1. We obtained the completed worksheets used by the City to calculate its appropriations limit for the year
ended Jane 30, 2017, and determined that the limit and annual calculation factors were adopted by
resolution of the City Council. We also determined that the population and inflation options 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 Schedule, we added the prior year's limit to the total
adjustments, and agreed the resulting amount to the current year's limit.
Finding: No exceptions were noted as a result of our procedures.
3. We agreed the current year information presented in the accompanying Appropriations Limit Schedule to
corresponding information in worksheets used by the City.
Finding: No exceptions were noted as a result of our procedures.
4. We agreed the appropriations limit presented in the accompanying Appropriations Limit Schedule to the
appropriations limit adopted by the City Council.
Finding: No exceptions were noted m a result of our procedures.
200 Fast Sandpointe Avenue, Suite 600, Santa Ana, California 92707
Tel: 949-777-8800 • Fax: 949-777-8850
w .pungroup.com
To the Honorable Mayor and Members of City Council
of the City of Seal Beach
Seal Beach, California
Page 2
This agreed-upon procedures engagement was conducted in accordance with attestation standards established by
the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an
examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on
assisting you in meeting the requirements of Section 1.5 of Article XIII -B of the California Constitution.
Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other
matters might have come to our attention that would have been reported to you.
This report is intended solely for the information and use of the City Council and management of the City and is
not intended to be and should not be used by anyone other than these specified parties.
_7&_
izj G�
Santa Ana, California
July 25, 2017
City of Seal Beach
Appropriations Limit Schedule
For the Year Ended June 30, 2017
Amount Source
A. Appropriations Limit FY 2015-2016 $ 26,599,307 Prior year appropriation
limit adopted by the City
B. Calculation Factors:
1) Population increase % 1.0054 California Department of Finance
2) Inflation increase % 1.0537 California Department of Finance
3) Total adjustment % 1.0594 (Bl x 112)
C. Annual Adjustment Increase 1,579,732 {(B3-1) x A)
D. Other Adjustments
1) Loss responsibility (-) - N/A
2) Transfer to private (-) - N/A
3) Transfer to fees (-) - N/A
4) Assumed responsibility (+) - N/A
E. Total Adjustments 1,579,732 (C+D)
F. Appropriations Limit FY 2016-2017 $ 28,179,039 (A+E)
See Accompanying Notes to Appropriations Limit Schedule.
3
City of Seal Beach
Notes to Appropriations Limit Schedule
For the Year Ended June 30, 2017
Note 1—Purpose of Limited Procedures Review
Under Article XBIB of the California Constitution (the Gann Spending Limitation Initiative), California
governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective
for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the
appropriations limit is subject to a limited procedures review in connection with the annual audit.
Note 2 — Method of Calculation
Under Section 10.5 of Article XIBB, for fiscal years beginning on or after July 1990, the appropriations limit is
required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population
factors discussed in Notes 3 and 4 below.
Note 3 — Population Factors
A California governmental agency may use as its population factor either the annual percentage change of the
jurisdiction's own population or the annual percentage change in population of the county where the jurisdiction is
located. The factor adopted by the City for the year ended June 30, 2017, represents the annual percentage change
in population for the City of Seal Beach.
Note 4 — Inflation factors
A California governmental agency may use as its inflation factor either the annual percentage change in the 4'
quarter per capita personal income (which percentage is supplied by the California Department of Finance) or the
percentage change in the local assessment roll from the preceding year due to the change of local nonresidential
construction. The factor adopted by the City for the year ended Jane 30, 2017, represents the annual percentage
change in per capital personal income.
Note 5 — Other Adjustments
A California government agency may be required to adjust its appropriations limit when certain events occur, such
as the transfer of responsibility for municipal services to, or from, another government agency or private entity.
The City had no such adjustments for the year ended Jane 30, 2017.