Att 1 FY 2021-22 Annual Comprehensive Financial Report (ACFR) — City Council/Public Financing Authority, February 21, 2023

CITY OF

HUNTINGTON BEACH
California
Annual Comprehensive
Financial Report
For The Fiscal
Year Ended
June 30, 2022

CITY OF HUNTINGTON BEACH, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FOR THE YEAR ENDED
JUNE 30, 2022

Prepared by the Finance Department

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INTRODUCTORY SECTION

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City of Huntington Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022

TABLE OF CONTENTS

INTRODUCTORY SECTION

Table of Contents ........................................................................................................................................ i-ii Letter of Transmittal .................................................................................................................................... iii-x City Officials ................................................................................................................................................ xi Organizational Chart ................................................................................................................................... xii Certificate of Achievement in Excellence in Financial Reporting ................................................................. xiii

FINANCIAL SECTION

Independent Auditor’s Report...................................................................................................................... 1-3 Management’s Discussion and Analysis (Required Supplementary Information) ....................................... 4-21 Basic Financial Statements:

Government-wide Fi nancial Statements:

Statement of Net Position .................................................................................................................. 23 Statement of Activities ....................................................................................................................... 24 Fund Financial Statements:

Balance Sheet – Gov ernmental Funds .............................................................................................. 25 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ......... 26 Statement of Revenues, Expendi tures and Changes in Fund Balances – Governmental Funds ...... 27 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................................................................... 28 Statement of Net Positi on – Proprietary Funds .................................................................................. 29 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ............ 30 Statement of Cash Flows – Proprietary Funds ................................................................................... 31 Statement of Fiduciary Fund Ne t Position – Fiduciary Funds ............................................................ 32 Statement of Changes in Fiducia ry Fund Net Position – Fiduciary Funds ......................................... 33 Notes to Financia l Statements .............................................................................................................. 34-124 Required Supplemental Information:

Notes to Required Supplem entary Information .................................................................................. 128 Schedule of Revenues, Expenditure s and Changes in Fund Balance – Budget And Actual – General Fund ............................................................................................................. 129 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget And Actual – Grants S pecial Revenue Fund ................................................................................... 130 Schedule of Changes in the Net P ension Liability and Related Ratios .............................................. 131-133 Schedule of Changes in the Ne t OPEB Liability and Related Ratios ................................................. 134 Schedule of Cont ributions .................................................................................................................. 135-137 Schedule of Money Market W eighted Rate of Return ........................................................................ 137 Schedule of Contributions for the OPEB Plan .................................................................................... 138

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FINANCIAL SECTION (Continued)

Supplementary Information:

Combining and Individual Fund Statements and Schedules:

Combining Balance Sheet – O ther Governmental Funds .................................................................. 141-144 Combining Statement of Revenues , Expenditures, and Changes in Fund Balances Other Governm ental Funds ............................................................................................................ 145-148 Schedule of Revenues, Expenditure s, and Changes in Fund Balances – Budget and Actual – Other Governmental Funds ........................................................................... 149-156 Statement of Net Position – Internal Service Funds ........................................................................... 159 Statement of Revenues, Expens es, and Changes in Fund Net Position Internal Service Funds .................................................................................................................. 160 Statement of Cash Flows – Internal Service Funds ........................................................................... 161 Combining Statement of Fiducia ry Fund Assets and Liabilities.......................................................... 165 Combining Statement of Changes in Fiduciary Net Position .............................................................. 165

STATISTICAL SECTION

Net Position by Component – Last Ten Fiscal Years .................................................................................. 169-170 Changes in Net Position – Last Ten Fiscal Years ....................................................................................... 171-172 Fund Balances – Governmental Funds – Last Ten Fiscal Years ................................................................ 173 Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years ............................................. 175-176 Assessed and Actual Valuation of All Taxable Property (Excluding Redevelopment Agency) - Last Ten Fiscal Years .............................................................................................................................. 177 Property Tax Rates – All Direct and Overlapping Government Tax Rate 04-001 Largest Area in City – Last Ten Fiscal Years ........................................................................................... 177 Property Tax Levies and Collections – Last Ten Fiscal Years .................................................................... 178 Top Ten Property Tax Payers – Current Year and Nine Years Ago ............................................................ 179 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ..................................................................... 181-182 Legal Debt Margin – Last Ten Fiscal Years ................................................................................................ 183 Statement of Direct and Overlapping Bonded Debt .................................................................................... 184 Principal Private Employers – Current Year and Nine Years Ago ............................................................... 185 Full-Time Actual and Budgeted City Employees by Function/Program– Last Ten Fiscal Years .................. 186 Operating Indicators by Function/Activity – Last Ten Fiscal Years .............................................................. 187-188 Capital Assets Statistics by Function/Activity .............................................................................................. 189

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CITY OF HUNTINGTON BEACH

December 21, 2022
Honorable Mayor, City Council and Citizens of the City of Huntington Beach:

In accordance with the requirements of the City Charter, and th e City of Huntington Beach’s ongoing commitment to transparent f inancial reporting, I am ple ased to present the Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2022.

As required by the City Charter, and to ensure the reliability of the information contained herein, the City of Huntington Beach (the City) contracted with the ind ependent auditing firm of Davis Farr LLP. The goal of the audit was to provide reasonable assu rance that the City’s financial statements are free fr om material misstatement. In addition, Da vis Farr LLP audits the City’s major program expenditures of f ederal grants for compliance wit h Title 2 of the United States Code of Federal Regulations Part 200 (Uniform Guidance). The re port of the Single Audit is published separately from this ACFR and may be obtained upon request from the City’s Finance Department.

This report consists of management’s representations concerning the City’s finances. As such, management assumes full responsibility for the completeness and accuracy of the information presented in this document and t hat it is reported in a manner that fairly presents the financial position and operations of the va rious funds of the City. To pr ovide a reasonable basis for making these representations, and assurance that the financial statements will be free from material misstatement, management has established a comprehensi ve internal control framework that is designed to both protect the government’s assets from theft, loss, or misuse and to compile sufficient reliabl e information for financial st atement conformity with GAAP. As the cost of internal controls should not outweigh their benefit s, the City’s comprehensive framework of internal controls has been designed to provide reasonable assurance rather than absolute assurance that the financial statements will be free from material misstatement.

We are pleased to report that Davis Farr LLP granted the City an unmodified (clean) opinion for the financial statements of the City for the year ended June 30, 2022. The auditor’s opinion can be found in the Financial Section of this report. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the financial statements in the form of a Management Discussion and Anal ysis (MD&A). This transmitta l letter is designed to complement and should be read in conjunction with it. The MD&A can be found immediately following the independent auditor’s report.

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Profile of the City of Huntington Beach

The City of Huntington Beach is home to a thriving beach commun ity, located on the Orange County coast, 35 miles south of Los Angeles and 90 miles north of San Diego. With a population of 197,437 residents, it is known as Surf City due to its abundance of beaches; the year-round sunny and warm Mediterranean climate; and its casual lifestyle. With over 10 miles of coastline and iconic pier spanning 1,856 foot in length- the longest pier on the West Coast- Huntington Beach plays host to over 16 million visitors annually.

As the fourth largest city in Orange County, and the 23rd large st in California by population, Huntington Beach is recognized as a prime location to live, wor k and play, ranking #1 in the nation for “Quality of City Serv ices” and #1 for “Best-Run City ” in the State of California by WalletHub (June 2022). Huntington Beach was also ranked #1 and #18 in the state and country, respectively, for “Best City for People with Disabilities” by W alletHub (September 2022). The City boasts an annual median household income of $91,318, 51 percent higher than the median household income for the United States, 28 percent higher than the State of California and 6 percent higher than Orange County. In addition, more than half of its residents, or 53 percent, have a college education. There ar e over 104,300 people employe d by public and private entities in Huntington Beach.

Founded in the late 1880s, Huntingt on Beach was incorporated as a C h a r t e r C i t y i n 1 9 0 9 .

Huntington Beach has a Council /Manager form of government where in seven City Council members are elected to four-year terms, and the Mayor is filled on a rotating basis from the incumbent Council Members. The City Attorney, City Clerk and Ci ty Treasurer positions are also elected and serve four-year terms. The City of Huntington Beach is a full-service city including police, fire, public works, and other key functional departments with a dedicated and talented team of over 980 full-time equivalent employees.

In 2011, the unincorporated oceanfront community of Sunset Beach was officially annexed by the City of Huntington Beach. Suns et Beach is a small beachfron t community with approximately 1,000 residents and 1.5 square miles of land. Bea chfront properties with high property values make this community a valuable addition to the City. Sunset Beach features one of the widest and most pristine beaches in Southern California and is home to the historic Sunset Beach Arts Festival.

A thriving beach community, Huntington Beach is home to numerous events, including the Great Pacific Airshow – the only beachfront airshow on the West Coast featuring the U.S. Air Force Thunderbirds, U.S. Navy F-35C Demo Team, PACAF F-16 Viper Demo Team, and many others. This unique airshow, whic h first premiered in October 2 016, has gained tremendous popularity and attracts visitors from all over the world to view the three-day event.

The City’s century-old traditional Fourth of July Fireworks Show and Parade, known nationally as “the largest Fourth of July P arade west of the Mississippi,” spans a four-day period that includes the Pier Plaza Festival with live music, carnival ride s, and other family-friendly activities, Surf City 5K Run, and spectacular fireworks show ov erlooking the pier.

The City also hosts a variety of other exciting events for families and visitors such as the annual Concours d’Elegance, Civil War Da ys, and other events. In Septe mber 2022, the City hosted the International Surfing Association (ISA) World Surfing Games for the first time since 2006.

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Economic Condition and Outlook

After more than two years of contending with the pandemic, the economy is showing continuing signs of recovery as seen through the major decline in COVID-19 cases and expansion of the nation’s economy to 93 percent of pre-pandemic levels. While global tensions and supply chain shortages remain prevalent, the City is experiencing sustained increases to its major revenue sources, such as Sales Tax and Transient Occupancy Tax, through remarkable improvements to the local economy. However, continuing volatility in the fi nancial and equity markets, along with the rapidly changing economic picture and the length and continuing impacts of the COVID- 19 pandemic, add a layer of uncertainty to the City’s financial projections.

The City of Huntington Beach c ontinues to thrive together throu gh the motto “ OneHB.” On November 29 th, Al Zelinka presented his “100 Days Report,” which included th e City’s commitment to the following seven key principles:

 Reaffimation of the City’s OneHB Mission to stay committed to being One Team , working together to have One Focus, and continuing to pursue One Goal, through the City’s core values of humility, exceptionality, social awareness, passion, teamwork, and integrity.
 Accountability to the Huntington Beach community using best practices and placing the “Triple Bottom Line” approach of sustainability- whi ch includes the City’s environme nt, people, and economy- as the authentic and central platform to u phold and advance Huntington Beach’s sense of community and quality of life.  Dedication to Transparency, striving to continuously expand access to public information and increasing the visibility of programs, services, Boards, Committees, and Commissions as opportunities for community participation and public information.  Responsiveness to the needs of the Huntington Beach community, committing to continuous all-hands training to p rovide exceptional customer s ervice and diversifying communication efforts so that the City’s residents can access C ity information, provide input, and receive needed services in a timely manner.
 Commitment to remaining Effective & Efficient , promoting high performance and financial responsibility to maxim ize the value of services prov ided to HB taxpayers, residents, and businesses while sim ultaneously working to strea mline and improve the City’s customer service experience and address problems effectively.  Fostering a culture which supports D i v e r s i t y , E q u i t y , & I n c l u s i v i t y, serving all residents, visitors, and businesses with an open mind and provide a sense of welcoming and belonging and respecting the di verse viewpoints within the community which contribute to our collective strength.
 Investment in public Engagement & Consensus Building to provide continuous, meaningful engagement with the community in order to establish relationships and build trust by providing a platform that facilities inclusive civic engagement.

Property Tax

The City of Huntington Beach’s assessed valuations are very str ong, reflecting both new development and increased property values. The City’s Fiscal Year 2022/23 assessed property value grew 6.3 percent to $50.3 billion. This solid performance, coupled with steady year-over- year growth, reflects a stable property tax base that can weath er steep declines in real estate
markets. Over 60 percent of parcels have an assessed valuation (AV) base year prior to 2004,

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representing a significant am ount of untapped AV. For Fiscal Ye ar 2020/21, secured property tax revenue collections totaled $61.1 million. For Fiscal Year 2021/22, secured property taxes are estimated at $62.9 million, reflecting a 3 percent increase.

Sales Tax

Huntington Beach’s business community is well-diversified with no single industry or business dominating the local economy. Local businesses include aerospac e and high technology, petroleum, manufacturing, comput er hardware and software, finan cial and business services, hotel and tourism, automobile ser vices, large-scale retailers, and surf apparel. The City’s diverse sales tax base makes it a stable source of revenue and mitigates the impact of industry- specific downturns as shown below.

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*Fiscal Year 2017/18 reflects nine months of data only due to the change in the City’s fiscal year

Transient Occupancy Tax (TOT)

Transient Occupancy Tax (TOT), a 10 percent tax applied to hotel stays within the City remains strong as Huntington Beach remains a prime tourist destination and the hotel industry continues to thrive. With a full fiscal year of TOT collections since the lifting of the Shelter-in-Place orders, the City collected $15.8M in TOT revenues during Fiscal Year 2021/22, with the $5.4M, or 51.8 percent increase, exceeding even pre-pandemic levels.

Autos and
Transportation
21%
Building and
Construction
8%
Business and
Industry
9%
Fuel and Service
Stations
9%
General Consumer
Goods
18%
Restaurants and
Hotels
14%
State and County
Pools
16%
Other
5%
City of Huntington Beach
Composition of Sales Tax Revenue
Fiscal Year 2021/22

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*Fiscal Year 2017/18 reflects nine months of data only due to the change in the City’s fiscal year.

Budget Development and Monitoring

The budget is prepared under the supervision of the City Manage r and transmitted to the City Council for deliberation at least 30 days prior to the end of the fiscal year. Pursuant to the City’s Charter, the City Council must adopt the annual budget by June 30th and may amend or revise it any time at a properly notic ed meeting. Budgetary control is at the Department level within each fund and a Department Head, wit h the Chief Financial Offic er’s approval, may transfer funds within like categories (operating and capital expenditures) of the same Department. The transfer of funds for salarie s and benefits requires additional approval by the City Manager or his designee.

Cash Management Policies and Practices

Surplus cash is invested by the elected City Treasurer, in inve stments allowed by the City’s Investment Policy. The Investment Policy is adopted annually by the City Council after approval by the Investment Advisory Board. It outlines guidelines to mee t the daily cash flow needs of the City, maximize the efficiency of the City’s cash management system, and identifies prudent investment vehicles for cash balances. The rate of return earne d for the year ended June 30, 2022 was 1.19 percent. The City Treasurer, as required by California Government Code 53601, has prepared an annual Statement of Investment Policy which allows the City to meet current obligations while earning a market rate of return. Further information regarding the City’s cash and investments can be found in Note 2 of the financial statements.

Long-Term Financial Planning and Major Initiatives

The Strategic Goals provides t he framework for the goals and ob jectives of the City. The City Council held a Strategic Planning Workshop on February 4, 2022, affirming four of the five policy goals set in 2021 (excluding COVID-19 response). The five Strategic Goals for 2022 are listed below:

 Community Engagement
 Homelessness Response
 Economic Development & Housing

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 Infrastructure and Parks
 Fiscal Sustainability, Public Safety, Other

The goals drive both short and l ong-term budgetary decisions an d the daily operations of the City by ensuring everyone is consistently working to achieve the goals outlined in the Plan.

Sustainability Master Plan

The City is in the process of dev eloping a comprehensive Sustai nability Master Plan (“SMP”) that not only ties together past, current, and planned City sustainability efforts, but also outlines a bold, inclusive vision for growth that balances the co-equal values of environment, equity, and economy. The plan will define an achievable pathway to sustaina bility that supports the health and well-being of all residents, r esponsible stewardship of the natural and built environment, and long-term economic growth. Focus areas of the plan include, but are not limited to, the following areas: Water, Energy, Climate, Biodiversity, Land use and Transportation, Resource Recovery and Waste Management, and Public Health and Well-Being.

Citywide Mobility Plan

The City has adopted policies and built infrastructure to help people shift from driving alone to walking, biking, utilizing trans it, and carpooling. The Mobilit y Implementation Plan will help us more aggressively advance these goals and will need to adhere to criteria set forth in the City’s existing and ongoing plans. The Plan will ensure a diverse set of travel options that meet the access and mobility needs for people of all ages and abilities, based in transportation justice and the idea that infrastructur e should equally and equitably a ddress the needs of all people.

The Plan will provide clarity and specific, practical direction for strategies that support diverse transportation options and technological innovations, such as m icromobility devices, electric vehicles, and autonomous vehicles, while ensuring that these changes do not adversely impact progress towards other City commitments related to safety, equity, vehicular traffic congestion, and GHG emissions.

Oak View Streetscape Improvements and Community Center and Library Plans

The City is working collaborativ ely with the Ocean View School District and the general community to prepare a master plan to redevelop the Community C enter and adjacent Oak View Park, as well as expand and modernize Oak View Library to better meet the needs of this neighborhood. The City has been awarded a $5 million grant fro m the California Department of Transportation to add beautific ation elements, trees, and ar t in public spaces, as well as remove litter and debris to enhance spaces for walking and recreation.

Comprehensive 311 System

The City is in the pre-planning stages of developing and implem enting a robust, citywide 311 System to centralize all community requests, inquiries, information resources and engagements in one platform. This “one-st op-shop” will address non-emergen cy inquiries and requests for services. Establishing this one portal has the potential to im prove our community’s customer service experience and improve operational efficiencies, in kee ping with the City’s ongoing commitment to timely and efficient responsiveness.

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Awards and Acknowledgements

The City of Huntington Beach has once again received the “Certi ficate of Achievement for Excellence in Financial Reporting” award bestowed by the Govern ment Finance Officers’ Association (GFOA) of the United States and Canada for the 36th consecutive year. Receipt of the award requires government e ntities to publish transparent, easily readable and efficiently organized Annual Comprehensive Financial Reports, conforming to program, accounting, and legal standards.

The Certificate of Achievement earned for the fiscal year ended June 30, 2021, is valid for one year only. The City believes t hat this Annual Comprehensive Fin ancial Report continues to conform to the Certificate of Ach ievement Program requirements and will be submitted to the GFOA for its consideration for another award.

I wish to thank the City Council, City Manager, and City Depart ments for their continued diligence in their role as fiscal stewards for the City of Hunt ington Beach. Without their leadership and support, the favorable financial results contain ed in this report would not have been possible. I would also like to thank the Finance Commissio n, a seven member body appointed by the City Council, which has been instrumental in helping the City maintain its long term goal of financial sustainability.

The preparation of this report w ould also not have been possibl e without the professional dedicated staff of the Finance Department. Specifically, I would like to thank Sunny Rief, Zack Zithisakthanakul, Ian Wuh, Tara Mukund, Ming Zhai, Leslie Zimme r, Michael Dolan, and Thuy Vi for their hard work and dedication.

Respectfully,

Dahle Bulosan
Chief Financial Officer

City of Huntington Beach

City Council

Tony Strickland, Mayor
Gracey Van Der Mark, Mayor Pro Tem

Rhonda Bolton, Councilmember
Casey McKeon, Councilmember
Dan Kalmick, Councilmember
Natalie Moser, Councilmember
Pat Burns, Councilmember

Executive Team

Al Zelinka, City Manager
Travis Hopkins, Assistant City Manager

Elected Department Heads

Alisa Backstrom, City Treasurer
Robin Estanislau, City Clerk
Michael Gates, City Attorney

Department Directors

Dahle Bulosan, Finance
Sean Crumby, Public Works
Chief Scott Haberle, Fire
Chief Eric Parra, Police
Ursula Luna-Reynosa, Community Development
Brittany Mello, Administrative Services
Chris Slama, Community & Library Services

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FINANCIAL SECTION

Independent Auditor’s Report
City Council
City of Huntington Beach
Huntington Beach, California
Report on the Audit of the Financial Statements
Opinions
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 Huntington Beach (City), as of and for the year June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Huntington Beach as of June 30, 2022, 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.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
As described further in Note 14 to the financial statements, during the year ended June 30, 2022, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 87, Leases. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for 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. 1 In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for one year after the date that the financial statements are issued.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.
 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit 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 City’s internal control.

Accordingly, no such opinion is expressed.
 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information and pension and other post employment benefit schedules be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 2 the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained duri ng 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.

Supplementary 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 combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements 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 are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the Comprehensive Annual Financial Report. The other information comprises the introductory section and statistical section but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2022 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 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.

Irvine, California
December 21, 2022
3 MANAGEMENT DISCUSSION
AND

ANALYSIS
4 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

As management of the City of Hunt ington Beach, we offer readers of the City’s financial statements this narrative ove rview and analysis of the financia l activities of the City of Huntington Beach for the year ended June 30, 2022. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our Letter of Transmittal, which can be found on pages iii-x of this report.

Financial Highlights
Below is a summary of the City’s government-wide financial information (in thousands):

 The City of Huntington Beach’s total assets and deferred outfl ows of resources exceeded its liabilities and defer red inflows of resources at the close of the most recent fiscal year by $754,738,000. Total net position increased by $63,008,000 or

9.1 percent primarily as a result of the decrease in liabilitie s related to pension contributions made with the iss uance of Pension Obligation Bond s in prior year, and the reduction of Net Pension and Other Post-Employment Benefit (OPEB) Liabilities due to strong investment returns during the fiscal year.

 Long-term obligations decreased by $430,308,000 or 47.0 percen t. This decrease is primarily due to prior year’s issuance of Pension Obligation Bonds in the amount of $363,645,000 to refinance 85 percent of the City’s unfunded pension liability with CalPERS. The effects of this issuance, along with strong investment returns, reduced Net Pension Liability by $423,225,000. In addition, the City paid down $35,342,000 of long-term obligat ions but added $31,479,000, of which $24,271,000 is in claims payable.

 Deferred outflows of resources decreased by $388,177,000 or 92 .6 percent primarily due to the timing of prior year’s pension contributio ns made subsequent to the June 30, 2021 measurement date. This includes the unfund ed liability payment to CalPERS totaling $3 62,430,000 made from proceeds of the Pension Obligation Bonds. Deferred inflows of resources increased by $1 26,798,000 or 656.4 percent primarily due to t he differences between projected and actual June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Assets 1,418,959$ 1,254,251$ 164,708$ 13.1% Deferred Outflows of Resources 30,890 419,067 (388,177) -92.6% Liabilities 548,996 962,271 (413,275) -42.9% Deferred Inflows of Resources 146,115 19,317 126,798 656.4% Total Net Position 754,738 691,730 63,008 9.1% Unrestricted Net Position (189,318) (236,030) 46,712 19.8% Long-Term Obligations 485,613 915,921 (430,308) -47.0% Program Revenues 154,221 136,519 17,702 13.0% Taxes 205,853 186,787 19,066 10.2% Other General Revenues 107 26,660 (26,553) -99.6% Expenses 297,173 346,399 (49,226) -14.2% Total Governmental and Business-Type Activities
5 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

earnings on Pension Plan investm ents used to determine the City ’s net pension liability.
 Program revenues increased by $17,702,000 or 13.0 percent. The increase is primarily due to easing of COVID-19 restrictions in Fiscal Year 21/22. As of June 15, 2021, the Governor terminated the executive orders that put into place the Stay at Home Order. With businesses and events permitted to operate at full capacity, the City saw revenue increases a cross the board. There was a $5 ,559,000 increase in Community Services revenues related to concessionaires, recreation classes, special events, and parking revenue. Parking related f ees increased as of June 2, 2021. Community Development related program revenue saw an increase of $4,073,000 which can be attributed to increase in p ermits issued, development projects, and grant reimbursements primarily relate d to Navigation Center operations. Fire saw an increase of $4,572,000 primarily related to an increase in emergency transport fees as the number of transports rose as hospital wait times decreased due to a reduction in the number of COVID-19 patients.

 Expenses decreased by $49,226,000 or 14.2 percent largely due to prior year’s $363,645,000 issuance of Pension Obligation Bonds to refinance 85 percent of the City’s unfunded pension liability wit h CalPERS. The effects of this issuance reduced the overall expenses related to the City's CalPERS Unfu nded Actuarial Liabilities.

Overview of the Financial Statements
This discussion and analysis serves as an introduction to the City of Huntington Beach’s basic financial statements. The City of Huntington Beach’s basic financial statements are comprised of three components: 1 ) government-wide financial sta tements; 2) fund financial statements; and 3) notes to the financial statements. This report also contains certain other supplementary information in addition to the basic financial statements.

Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s financial condition and are prepared similarly to those in the private sector.

The Statement of Net Position presents information on all of th e City’s assets, liabilities, deferred outflows and inflows with the difference between them reported as net position.

Over time, continued increases or decreases in net position may indicate whether the City’s financial condition is improving or deteriorating.

The Statement of Activities presents information on how the Cit y’s net position changed during the most recent fiscal year. These changes are reported on the full accrual basis when the economic event occurs (not when the cash is received or paid).

6 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

The government-wide financial st atements separate functions tha t are primarily supported by taxes and intergov ernmental revenues (governmental activities) from functions that are supported by user fees (business-type activi ties). Governmental activities include the City Council, City Manager, City Treasurer, City Attorney, City Clerk, Finance, Community Development, Fi re, Information Services, Police, Community Services, Library Services, and Public Works departments. Business-type activities include Water, Sewer, Refuse, and Hazmat Services.

The government-wide financial statements include the City and all of its component units that are legally separate but whose activities entirely support the City of Huntington Beach.

The government-wide financial statements can be found on pages 23-24 of this report.

Fund Financial Statements
The City separates financial acti vities into funds to maintain control over resources that have been legally separated. All of the funds of the City can b e divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds
Governmental funds are used to account for the same functions reported in governmental activities in the government-wi de financial statements. However, the focus in the governmental fund section of these financial statements is on near-term resource inflows and outflows available for spending, as well as balances of res ources available for spending at the end of the fiscal year.

It is useful to compare information presented for the governmen tal funds to information presented for governmental activ ities in the government-wide fi nancial statements. The reconciliations indicate to the reader the differences in finan cial reporting between the governmental activities section and the governmental funds section.

The City maintains 24 individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and in the governmental funds Statement of Revenue, Expenditures, and Changes in Fund Balances for the Gen eral Fund, Grants Special Revenue Fund, Low and Moder ate Income Housing Asset Fund (LMIHAF) and Pension Liability Debt Service Fund, all of which are considered to be major funds. Data from the other 20 smaller funds are combined into a single, agg regated presentation.

Individual fund data for each of these other governmental funds is provided in combining statements elsewhere in this report.

The City provides an annual appr opriated budget for its governm ental funds. Budgetary comparison schedules for the General Fund and Grants Special Re venue Fund are required to be presented and are included on pages 129-130. Other major governmental 7 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

funds (LMIHAF Capital Projects Fund and Pension Liability Debt Service Fund) are presented in the Supplementary Information section on page 156 of this report and demonstrate compliance with the budget.

The basic governmental fund financial statements can be found o n pages 25 and 27 of this report.

Proprietary Funds
The City maintains two different types of proprietary funds, which are used to account for the same activities as the business-type activities in the government-wide financial statements. Enterprise funds are used to report the same functi ons presented as business-type activities in the government-wide financial state ments. The City uses enterprise funds to account for i ts Water, Sewer Service, Refus e, and Hazmat Service activities. Internal Service funds are used in accounting as a device to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its self-in surance worker’s compensation a ctivities, self-insurance general liability activities, and equipment replacement needs. Because these services predominantly benefit governmental rather than business-type functions, they have been included with governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provides information for Water, Sewer Service, Refuse, Hazmat Service, Self-Insurance Workers’ Compensation, Self-Insurance General Liability, and Equipment Replacement Funds.

The basic proprietary fund financial statements can be found on pages 29-31 of this report.

Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the govern ment-wide financial statements because the resources of those funds are not available to support the City of Huntington Beach’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.

The basic fiduciary fund financial statements can be found on page 32-33 of this report.

Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the government- wide and fund financial stateme nts. The notes to the financial statements can be found on pages 35-124 of this report.

8 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

Other information
In addition to the basic financ ial statements and accompanying notes, this report also presents certain required supplem entary information concerning the City’s progress in funding its obligation to provide pension and OPEB benefits to its employees and General Fund and major special revenue f unds budget-to-actual compariso ns. Required supplementary information can be found on pages 128-138 of this report.

The combining statements and sc hedules referred to earlier in connection with other governmental funds is presented i mmediately following the requi red supplementary information on pensions. Combini ng and individual fund statemen ts and schedules can be found on pages 141-148 of this report.

Government-wide Financial Analysis
As noted earlier, net position may serve, over time, as a useful indicator of a government’s financial position. At the end of the current fiscal year, the City reported positive net position balances for both governmental and business-type activities, with total assets plus deferred outflows exceeding liabilities plus deferred inflows by $754,738,000.

Below is a summary schedule of the City’s net position at June 30, 2022 (in thousands):

Governmental Activities June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Current and Other Assets 331,062$ 276,665$ 54,397$ 19.7% Non-Current Assets 106,219 - 106,219 N/A Capital Assets 746,371 737,256 9 ,115 1.2% Total Assets 1,183,652 1,013,921 63,512 1 6.7% Deferred Outflows of Resources 28,739 393,130 (364,391) -92.7% Current and Other Liabilities 57,250 34,751 22,499 64.7% Long-Term Obligations 461,797 864,784 (402,987) -46.6% Total Liabilities 519,047 899,535 (380,488) -42.3% Deferred Inflows of Resources 136,033 17,716 118,317 6 67.9% Net Position:

Net Investment in Capital Assets 712,289 699,204 13,085 1.9% Restricted 68,460 65,755 2,705 4.1% Unrestricted (223,438) (275,159) 51,721 18.8% Total Net Position 557,311$ 489,800$ 67,511$ 13.8% Business-Type Activities June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Current and Other Assets 82,651$ 97,861$ (15,210)$ -15.5% Non-Current Assets 8,658 - 8,658 N/A Capital Assets 143,998 142,469 1 ,529 1.1% Total Assets 235,307 240,330 (13,681) - 2.1% Deferred Outflows of Resources 2,151 25,937 (23,786) -91.7% Current and Other Liabilities 6,133 11,599 (5,466) -47.1% Long-Term Obligations 23,816 51,137 (27,321) -53.4% Total Liabilities 29,949 62,736 (32,787) -52.3% Deferred Inflows of Resources 10,082 1,601 8,481 5 29.7% Net Position:

Net Investment in Capital Assets 143,998 142,469 1,529 1.1% Restricted 19,309 20,332 (1,023) -5.0% Unrestricted 34,120 39,129 (5,009) -12.8% Total Net Position 197,427$ 201,930$ (4,503)$ -2.2% 9 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

 Prior year’s issuance of Pension Obligation Bonds in the amoun t of $363,645,000 to refinance 85 percent of the City’s unfunded pension liabilit y with CalPERS and strong investment returns resulted in a decrease of Long-Term O bligations in the amount of $402,987,000 and $27,321,000 for Governmental Activit ies and Business Activities, respectively. At the same time, the refina nce and strong investment returns generated a Net Pension Asset for the first time of $100,849,000 for Governmental Activities and $8,018,000 for Business Activities.

Analysis of the City’s Net Position

Current and Other Assets: The increase in current and other assets of $54,397,000 for governmental activities is mainly due to the increase in cash and receivables balances related to increased property, sales tax revenues, and transient occupancy tax. A majority of the increase is due to the im plementation of new GASB Statem ent No. 87, Leases.

Under this Statement, the lessor of a lease contract is require d to recognize a lease receivable and a deferred inflow of resources. As a result, $12 ,570,000 in lease receivable was recognized. The overall combined asset increase by $63,512,000 or 16.7 percent for governmental activities.

The decrease in current and other assets of $15,210,000 for bus iness-type activities is primarily due to a reduced cash balance in the Water Master Pla n fund due to ongoing large capital project costs in Fiscal Year 2021/22, including water main replacements and the City’s share of sliplining t he OC-44 imported water transmi ssion line. The overall combined asset decrease by $13,681,000 or 2.1 percent.

Current and Other Liabilities: Current and Other Liabilities for governmental activities increased by $22,499,000 and decreased by $5,466,000 for business-type activities. For governmental activities, the majority of the increase is relate d to the second tranche of American Rescue Plan Act (ARPA) funds totaling $14,803,463 rece ived in June 2022 recorded as unearned revenue. The decrease in business-type activities is due to normal fluctuations in accounts payable and payroll cycles.

Deferred Outflows and Inflows of Resources: The decrease in deferred outflows of resources of $364,391,000 and $23, 786,000 for governmental acti vities and business- type activities, respectively, is mainly due to deferral of pen sion contributions made in prior year subsequent to the measurement date, including the unfunded liability payment to CalPERS totaling $362,430,000 made from proceeds of the Pension Obligation Bond.

The increase in deferred inflows of resources of $118,317,000 for governmental activities and $8,481,000 for business-type activities is primarily relate d to the actuarially determined amortization differences between projected and actua l earnings on pension plan investments, and differences between expected and actual e xperience used to determine the Net Pension and Other Postemployment Benefits Liabilities. The actuarially determined amortization differenc e also increased Net Pension A sset and Net Other 10 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

Postemployment Benefits Asset. See Notes 6, 7, and 8 for additi onal information. In addition, the City implemented GASB Statement No. 87, Leases. Under this Statement, the lessee is required to recognize a lease liability. This increased Governmental Deferred Inflows of Resources by $12,400,000. See Note 14 for additional information.

Long-Term Obligations: Long-term obligations decre ased by $402,987,000 for governmental activities and $27,321,000 for business-type activities primarily due to the City issuing a $363,645,000 Pension Obligation Bond in prior year to refinance 85 percent of its Unfunded Pension Liabilit y with CalPERS. The refinance a nd strong investment returns resulted in a decrease in Net Pension Liability of $396,763,000 and $26,462,000 in Governmental Activities and Business-type Activities, respectively.

Net Investment in Capital Assets: The largest portion of the City’s net position reflects investment in capital assets (e.g., land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding.

The City uses capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s inve stment in its capital assets are reported net of related debt, the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be u sed to liquidate these liabilities. Net position invested in capital assets, net of re lated debt from governmental activities increased $13,085,000 or 1.9 percent, primarily due to street improvements and construction projects such as improvements to Bluff Top Trail, Rodger’s Senior Center Repurposing, Central Park Improvements and Downtown Fiber Expan sion. Net position invested in capital assets net of related debt from business-ty pe activities increased $1,529,000 or 1.1 percent primarily due to replacement of water and sewer pipelines throughout the City and improvements to Lift Stations on Slater /Springdale and Saybrook/Heil.

Restricted Net Position: An additional portion of the City’ s net position is subject to external (legally imposed or sta tutory) restrictions ($68,460,0 00 for governmental activities, and $19,309,000 for bu siness-type activities). These amounts represent 12.3 percent and 9.8 percent of net pos ition for governmental activi ties and business-type activities, respectively. Restricted net position from governmental activities increased $2,705,000 or 4.1 percent, largely due to the change in restric ted net position in the Pension Liability Fund largely due to revenues set aside from the voter-approved property tax override dedicated to the pa yment of pension costs. Restric ted net position from business-type activities decreased by $1,023,000 or 5.0 percent primarily due to an increase in restricted Water Master Plan funds available for capital projects as funds are spent.

Unrestricted Net Position: The unrestricted net positi on (negative $223,438,000 for governmental activities and $34,120,000 for business-type activities) represent negative 11 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

40.1 percent and 17.3 percent, respectively, of net position fo r governmental activities and business-type activities. Unrestricted net position for gov ernmental activities increased $51,721,000 or 18.8 perc ent. Unrestricted net position for business-type activities decreased by $5,009,000 or 12.8 percent during the year due to the City having Net Pension and Other Postemployment Benefit Assets in Fiscal Year 2021/22.

A condensed summary of governmental activities (in thousands) follows:

Revenues: June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Program Revenues:

Charges for Current Services 68,051 $ 53,683 $ 14,368 $ 26.8% Operating Grants and Contributions 9,301 6,013 3,288 54.7% Capital Grants and Contributions 8,537 10,192 (1,655) -16.2% Total Program Revenues 85,889 69,888 16,001 22.9% General Revenues:

Property Taxes 102,539 99,958 2,581 2.6% Sales Taxes 57,652 51,162 6,490 12.7% Utility Taxes 19,528 18,374 1,154 6.3% Franchise Taxes 10,380 8,040 2,340 29.1% Transient Occupancy Tax 15,754 9,253 6,501 70.3% Use of Money and Property (Loss) (1,895) 4,399 (6,294) -143.1% From Other Agencies - Unrestricted 4,631 22,000 (17,369) -79.0% Gain on Sale of Property 1,699 - 1,699 N/A Total General Revenues 210,288 213,186 (2,898) -1.4% Total Revenues 296,177 283,074 13,103 4.6% Expenses:

City Council 382 423 (41) -9.7% City Manager 5,412 11,163 (5,751) -51.5% City Treasurer 259 340 (81) -23.8% City Attorney 2,183 3,140 (957) -30.5% City Clerk 1,060 1,147 (87) -7.6% Finance 5,581 6,828 (1,247) -18.3% Community Development 11,634 19,716 (8,082) -41.0% Fire 52,808 65,960 (13,152) -19.9% Information Services 6,469 6,230 239 3.8% Police 73,964 102 ,415 (28,451) -27.8% Community Services 11,517 11,365 152 1.3% Library Services 5,212 6,181 (969) -15.7% Public Works 42,598 40,270 2,328 5.8% Interest on Long-Term Debt 9,548 2,706 6,842 252.8% Total Expenses 228,627 277,884 (49,257) -17.7% Change in Net Position Before Transfers 67,550 5,190 Transfers (39) (38)
Change in Net Position 67,511 5,152
Net Position - Beginning of Year 489,800 478,901 Cumulative Effect of Changes in
Accounting Principles - 5,747
Net Position - Beginning of Year as Restated 489,800 484,648 Net Position - End of Year 557,311$ 489,800$
Governmental Activities
12 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

The cost of all governmental a ctivities this year was $228,627, 000. However, as shown in the Statement of Activities, the amount that taxpayers ultimately financed for these activities was $142,738,000, as costs of $68,051,000 were paid by those who directly benefited from the programs, or by other governments and organizations that subsidized certain programs with operating grants and contributions of $9,301,000, and capital grants and contributions of $8,537,000. Overall, the City’s gov ernmental program revenues were $85,889,000. The City paid for the remaining “pub lic benefit” portion of governmental activities with $210,288,000 in taxes and general revenue (some of which may only be used for certain programs) and with other revenues, such as interest and general entitlements.

Charges for current services increased $14,368,000, or 26.8 per cent. As noted in the financial highlights section, the easing of COVID-19 restrictio ns has allowed the City to provide services at full capacity. The City saw revenue increas es across the board, with the most significant increase from Community Development, Commu nity Services, and Fire. There was $5,559,000 increase in Community Services relat ed to concessionaire, recreational, special events, and facility rental revenues as w ell as increase in parking fees rates. Community Developm ent related program revenue saw a n increase of $2,600,000 which can be attributed to increase in permit issuan ce, fees collected for development projects such as Main Street Mixed-Use and Gisler R esidential, and reimbursements received for operational cost of the Navigation Center. Fire saw an increase of $4,524,000 due to increased billable call volume fr om emergency transport services.

Operating Grants and Contributions increased by $3,288,000 or 54.7 percent and Capital Grants and Contributions have dec reased by $1,655,000 or 16.2 p ercent. The increase in Operating Grant and Contributions primarily due to an increase in grant funds received by Community Development, Police, and Public Works. Community Development saw an increase primarily related to reimbursements for Navigation Center operating costs.

Police and Public Works had increases in Office of Traffic Safe ty grants and Highway Bridge Replacement and Rehabilitat ion grants, respectively. The decrease in Capital Grants and Contributions is related to the completion of the Ci ty's federal grant-funded Highway Safety Improvement project.

Program expenses decreased by $49,257,000, or 17.7 percent primarily due to prior year’s issuance of Pension Obligation Bonds to refinance the City’s Unfunded CalPERS Pension Liability. The refinanc e reduced the City’s required employer contribution by $26,012,000. Additionally, Police and Fire overtime costs decre ased as a result of the slowdown in COVID-19 related activities.

Total resources available during the year to finance government al operations were $785,977,000 consisting of net pos ition at July 1, 2021 of $489 ,800,000, program revenues of $85,889,000, and gener al revenues of $210,288,000. Total expenses for 13 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

governmental activities duri ng the year were $228,627,000 plus transfers of $39,000.

Thus, net position increased by $67,511,000 or 13.8 percent, to $557,311,000.

A condensed summary of business-type activities (in thousands) follows:

The City’s net position from bus iness-type activities decreased by $4,542,000 before transfers. This is mainly due to unrealized market losses in the City’s investments.

The cost of all business-type activities this year was $68,546, 000. As shown in the Statement of Activities, the amount paid by users of the systems was $68,332,000, unrealized market losses of $4,328,000, and transfers totaling $39,000. Beginning net position was $201,930,000 and ending net position was $197,427,000, a decrease of $4,503,000, or 2.2 percent. Of t he ending net position, $143,99 8,000, or 72.9 percent, was invested in capital assets, $19,309,000 or 9.8 percent was restricted for expenses for the Water Master Plan, and $34,120,000, or 17.3 percent was unrestricted.

Transfers in for business-type activities were $39,000 for the current year, similar to prior year.

June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Program Revenues:

Charges for Current Services 68,332$ 66,631$ 1,701$ 2.6% Total Program Revenues 68,332 66,631 1,701 2.6% Use of Money and Property (Loss) (4,328) 261 (4,589) -1758.2% Total Revenues 64,004 66,892 (2,888) -4.3% Expenses:

Water Utility 44,182 46,054 (1,872) -4.1% Sewer Service 10,390 9,284 1,106 11.9% Refuse Collection 13,738 12,936 802 6.2% Hazmat Service 236 241 (5) -2.1% Total Expenses 68,546 68,515 31 0.0% Increase (Decrease) in Net Position
Before Transfers (4,542) (1,623)
Transfers 39 38
Total Change In Net Position (4,503) (1,585) Net Position - Beginning of Year 201,930 203,515 Net Position - End of Year 197,427$ 201,930 $ Business-Type Activities
14 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

Financial Analysis of the City’s Major Governmental Funds

Below is an analysis of the City’ s major governmental fund acti vities for the year (in thousands):

The General Fund Balance increased by $8,215,000 largely due to increases in property taxes, sales taxes, other taxes revenues and charges for current services. As previously discussed, the easing of COVID-19 restrictions had an overall positive effect on revenues.

Businesses reopened, which in turn resulted in increased sales tax revenue and other tax revenue. The City was able to provide services at full capacity. Many of the services and events that were not permitted during COVID are now being provided.

The Grants Special Revenue Fund Balance decreased by $6,665,000 primarily due to the increase in COVID-19 related expenditures that are anticipated to be reimbursed with FEMA Public Assistance Disaster Relief funds, and other capital projects that have not yet been reimbursed by the granting agencies.

The LMIHAF Capital Projects Fund Balance increased by $1,234,000 primarily due to the City restructuring their loan with Jamboree Housing Corporation. In Fiscal Year 2021/22, the City used HOME grant funds to reimburse the LMIHAF Capital Project Fund $900,000 that was lent to Jamboree Housing Corporation.

The Pension Liability Fund in creased by $3,786,000, largely due to revenues set aside from the voter-approved property tax override dedicated to the payment of Public Safety pension costs.

June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Total Fund Equity:

General Fund 102,824 $ 94,609 $ 8,215 $ 8.7% Grants Special Revenue Fund (4,311) 2,354 (6,665) -283.1% LMIHAF Capital Projects Fund 4,856 3,622 1,234 34.1% Pension Liability Fund 20,729 16,943 3,786 0.0% Total Fund Equity 124,098 $ 117,528 $ 6,570 $ 5.6% Governmental Funds
15 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

Financial Analysis of the City’s Major Proprietary Funds Below is an analysis of the fund equity of the City’s proprietary funds (in thousands):

The Water Fund total net position decreased by $3,059,000 due t o planned capital expenditures exceeding revenues in Fiscal Year 2021/22, which caused the unrestricted net position to decline by $1, 142,000. The Sewer Fund net posit ion decreased by $1,444,000 and unrestricted net position decreased by $3,888,000 due to planned sewer projects during the year. In addition, all enterprise funds with the exception of the Hazmat Services Fund did not generate revenue that exceeded the expens es incurred for the current fiscal year. This is primarily a result of the fair market value adjustment to the City’s investments, which generated unrealized losses in Fiscal Year 2021/22.

Long-Term Obligations
Below is a schedule of the changes to the City’s long-term obligations (in thousands):

Governmental Activities: June 30, 2021 Additions Retirements June 30, 2022 Revenue Bonds 29,545$ -$ (2,180)$ 27,365$ Compensated Absences 13,405 5,243 (3,603) 15,045 Claims Payable 46,779 24,271 (14,619) 56,431 Pollution Remediation 2,000 - - 2,000 LED Lighting Phase I 432 - (118) 314 I-Bank CLEEN Loan 1,882 - (296) 1,586 CEC Loan 2,457 - (394) 2,063 Pension Obligation Bonds 341,501 - (10,859) 330,642 Finance Purchase Agreement 12,753 868 (1,907) 11,714 Leases Payable - 448 (201) 247 Total Long-Term Obligations
Governmental Activities 450,754 30,830 (34,177) 447,407 Business-Type Activities:

Compensated Absences 1,426 649 (389) 1,686 Pension Obligation Bonds 22,144 - (776) 21,368 Business-Type Activities: 23,570 649 (1,165) 23,054 Total Long-Term Obligations 474,324$ 31,479$ (35,342)$ 470,461$ June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Net Position:

Water Fund 118,766 $ 121,825 $ (3,059)$ -2.5% Sewer Fund 78,509 79,953 (1,444) -1.8% Refuse Fund 16 48 (32) 66.7% Hazmat Service Fund 136 104 32 30.8% Total Net Position 197,427$ 201,930$ (4,503)$ -2.2% Unrestricted Net Position:

Water Fund 9,104$ 10,246$ (1,142)$ -11.1% Sewer Fund 24,977 28,865 (3,888) -13.5% Refuse Fund (97) (86) (11) -12.8% Hazmat Service Fund 136 104 32 30.8% Total Unrestricted Net Position 34,120$ 39,129$ (5,009)$ -12.8% Enterprise Funds
16 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

Additional information on the City’s long-term debt is shown in Note 11 and Note 14 to the financial statements. Note 14, Leases, provides detail related to GASB 87 related Lease Payable while Note 11 provides detail related to all other long-term debt. The City of Huntington Beach is legally restricted to issuing general obligation bonds to 12 percent of its assessed valuation. Since the City has no general obligation bonds outstanding, the limit does not apply. The City’s total long-term obligations de creased by $3,863,000 or

0.8 percent from the prior fiscal year as the reduction in total debt related to annual debt service payments was partially offset by new claims payable lia bilities and lease obligations.

The City continues to maintain strong credit ratings on all of its debt issues. Most notably, on August 27, 2014 Fitch Ratings issued an AAA Implied General Obligation Bond rating to the City of Huntington Beach and that same rating was most r ecently reaffirmed in February 2022.

The following are the ratings as determined by Standard and Poor’s and Fitch Ratings as of June 30, 2022.

Capital Assets
The capital assets of the City are those assets which are used in the performance of the City’s functions including infras tructure assets. The City has elected to use the “Basic Approach” as defined by GASB Stat ement No. 34 for infrastructur e reporting. The following infrastructure networks are recorded as capital asset s in the government-wide financial statements:

 Storm drain system including pump stations, drainage system an d manholes.  Streets (including land underneat h streets), traffic signals, curbs, gutters, and sidewalks.

Debt Instrument S & P Fitch
1999 Tax Allocation Refunding Bonds AA- AA
2002 Tax Allocation Refunding Bonds AA- N/A
2014 Lease Revenue Bonds, Series A AA AA+
2020(a) Lease Revenue Bonds AA AA+
2020(b) Lease Revenue Bonds AA AA+
2021 Pension Obligation Bonds AA+ AA+
17 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

Below is a schedule of the City’s capital assets, net of accumu lated depreciation (in thousands):

Capital assets from government al activities increased $9,115,00 0 or 1.2 percent. This increase is largely due to street replacement inf rastructure co sts and construction improvements throughout the City. Capital assets from business-type activities increased $1,529,000 or 1.1 percent largely due to improvement to lift stations on Slater/Springdale and Saybrook/Heil. Further information on the City’s capital assets can be found in Note 12 of the financial statements.

Furthermore, the newly implemented GASB Statement No. 87, Leases, requires a lessee to recognize a lease liability and intangible right-to-use lease asset. As noted above, the right-to-use lease asset is to be included as a capital asset. For Fiscal Year 2021/22, the City reported $253,000 in right-to-use lease assets.

General Fund Budgetary Highlights

Changes to Original Budget

Comparing the Fiscal Year 2021/ 22 General Fund Original (i.e. A dopted) Budget expenditures amount of $228,5 40,000 to the final budgeted amoun t of $257,714,000 shows a net increase of $29,174,000, or 12.8 percent. This over all increase is primarily due to budget carryovers of $4, 000,000, increased transfers to Emergency Operations Center Fund of $1,000,000, Equi pment Fund of $1,037,000, Infras tructure Fund of $2,550,000, Retiree Insurance Fund of $1,038,000, Retirement Su pplement Fund of $4,576,000, Section 115 Trust of $3,000,000, Self Insurance Gen eral Liability Fund of $1,488,000, Self Insurance Worker’s Compensation Fund of $3,000,000, and personnel increase of $5,094,000.

Governmental Activities: June 30, 2022 June 30, 2021
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Land 369,538 $ 368,795 $ 743 $ 0.2% Buildings 127,310 126,122 1,188 0.9% Machinery and Equipment 19,510 19,583 (73) -0.4% Construction in Progress 12,235 8,584 3,651 42.5% Infrastructure 217,525 214,172 3,353 1.6% Right to Use Leased Asset 253 - 253 N/A Total Governmental Activities 746,371 737,256 9,115 1.2% Business-Type Activities:

Land 3,907 3,907 - 0.0% Buildings 68,693 65,847 2,846 4.3% Machinery and Equipment 6,863 6,786 77 1.1% Construction in Progress 109 1,782 (1,673) -93.9% Infrastructure 64,426 64,147 279 0.4% Total Business-Type Activities 143,998 142,469 1,529 1.1% Total Capital Assets 890,369 $ 879,725 $ 10,644 $ 1.2% 18 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

Final budgeted revenues for the General Fund increased $27,232, 000 or 11.9 percent from the original (adopted) budget for the Fiscal Year ended June 30, 2022. The change from original to final budget occurred primarily as a result of adjustments made to budgeted property tax, sales tax, utility tax, other taxes, and transfers from other funds.

Variance with Final Budget

General Fund actual revenues were less than the final budget by $269,000 for the Fiscal Year ended June 30, 2022. This budget variance is due in large part to actual investment returns underperforming budgeted amounts.

General Fund expenditures were $8,011,000 less than the final b udget. The favorable budget variance is due in large part to the following:

 The Community Services and Library Services Departments realiz ed $1,698,000 in savings primarily due to differences in projected versus actual cost of providing services.
 The Public Works and Community D evelopment Departments realized $2,649,000 in savings primarily due to differences in the projected versus actual timing of design, construction, and maint enance contracts for projects, a s well as the deferral of various building and planning contracts.

Analysis of City’s Other Major Governmental Funds

Grants Special Revenue Fund

The fund balance in the Grant S pecial Revenue Fund decreased by $6,665,000 largely due to COVID-19 related expenditures that are expected to be reimbursed through FEMA Public Assistance funds.

LMIHAF Capital Projects Fund

The fund balance in the LMIHAF Capital Projects Fund increased by $1,234,000 due to the City restructuring their loan with Jamboree Housing Corpora tion. In Fiscal Year 2021/22, the City transferred HOME grant funds to payback LMIHAF Capital Project Fund $900,000 that was loanded to Jamboree Housing Corporation.

Pension Liability Debt Service Fund

The fund balance in the Pension Liability Debt Service Fund inc reased by $3,786,000 due to revenues set-aside from the voter-approved property tax override dedicated to the payment of Public Safety pension costs.

19 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

Economic Factors and Next Year’s Budget

The Adopted Fiscal Year 2022/23 Budget is structurally balanced, totaling $532.0 million in All Funds. This reflects a $107.6 million, or 25.3 percent, increase from the Fiscal Year 2021/22 Adopted All Funds Budget of $424.4 million. A significant portion of the increase is due to added investment in essential infrastructure and equipment and the restoration of COVID-19 temporary cost saving measures, as well as use of t he City's ARPA funds totaling $29.6 million for public safety personnel costs. The larger increases were due to the following funds: Infrastructure Fund ($25.1 million), Equipment Fund ($11.6 million), Water Fund ($47.9 million), and Sewer Fund ($19.4 million).

The General Fund budget, which provides the majority of public services to the community, totals $269.0 million, reflecting a $41.0 million, or 18.0 percent increase from the Fiscal Year 2021/22 budget of $228.0 million. This increase is a result of the added Section 115 Trust pension liabi lity set-aside, increased invest ment in infrastructure and equipment, and restoration of temporary expenditure reductions made in response to the COVID-19 pandemic. The Adopted G eneral Fund Budget for next yea r has no reliance on one-time revenues to fund ongoing operations, which is criti cal to maintaining the City’s financial viability and success. Major highlights are as follows:

Public Safety: Funding for Public Safety represents 49 cents for every dollar spent in the General fund. With approximatel y half of the General Fund Budge t committed to the Police and Fire Departments, the City has dedicated the greatest share of its resources, or $132.7 million to these core services.

In the Police Department, the budget includes $1.2 million in e quipment funds for the replacement of 16 police vehicles and other front line safety equipment. The CIP includes $2,952,000 for relocation and expa nsion of the Police Departmen t Communications Center and Traffic Office, Heliport Hangar improvements, updates to the women’s locker room, fiber installations at the Bella Terra Police substation, and funding for a Joint Youth Training Center to be shared between the Police and Fire Departments.

In the Fire Department, the Adopt ed Budget includes $1.1 millio n for equipment replacement comprising the replacement of two Ambulances and the purchase of self- contained breathing apparatus (SC BA) and cardiac monitors/defib rillators. The General Fund CIP includes $1.3 million for a traffic signal at Heil Fir e Station and the Fire Department’s share of the Joint Youth Training Center.

The Fiscal Year 2022/23 Adopted Budget is a balanced budget. As the economy continues to bounce back and public health guidelines become le ss restrictive, revenue sources such as Sales Tax and Transient Occupancy Tax are antic ipated to increase considerably in the coming year . The Fiscal Year 2022/23 Adopte d Budget includes the continuation of Citywide restructuring measures implemented during Fiscal Year 2020/21, 20 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2022

restores a number of operating cuts made in response to the COV ID-19 pandemic, includes mandated savings along with the debt service payment f or the City’s recently issued Pension Obligation Bonds, and prioritizes improvements t o the City’s facilities, roads and parks. The Fiscal Year 2022/23 budget remains committed to improving the quality of life for our residents, businesses, and visitors by increasing funding for core services such as public safety, community & library service programs, and improving the City’s infrastructure.

General Fund Revenue

General Fund revenue is projec ted to be $283.2 million, a $55.2 million or 24.2 percent increase from the Fiscal Year 2021/22 Adopted Budget resulting from projected positive economic impacts resulting from widespread COVID-19 vaccination s, loosening public health orders, and the re-opening of businesses for indoor dining and shopping.

 Property Taxes are estimated at $98.3 million, reflecting an i ncrease of 5.5 percent due to the housing market boom leading to accelerated growth in assessed valuations and Employee Retirement Override revenues being transferred to the Pension Liability Fund and no longer being budgeted in the General Fund.
 Sales Tax revenues are projected to be $53.3 million, an increase of 19.5 percent from Fiscal Year 2021/22. Trans ient Occupancy Taxes are anticip ated to increase $3.8 million, or 35.5 percent. The increases in these two reven ue sources is attributable to the projected pos itive economic impacts resulti ng from widespread COVID-19 vaccinations, loosening public health orders, re-opening of businesses and an increase in visitors to the City’s beaches and downtown businesses.  Licenses and Permits, estimated at $8.2 million, reflect a 5.1 percent increase, as economic and development activity are anticipated to increase i n the coming year.

Franchise Taxes are anticipated at $8.6 million, a 21.1 percent increase. Use of Money & Property, which includes parking revenues and lease con cessions, is projected to increase $0.7 milli on, or 4.3 percent, due to busi ness re-openings and expected increases in visitors to our beach and downtown areas, especially as international travel continues to become less restrictive.

Contacting the City’s Financial Management Team

This financial report is designed to provide our citizens, taxp ayers, customers, and investors and creditors with a ge neral overview of the City’s finances and to show the City’s accountability for the mone y it receives. If you have qu estions about this report, separate reports of the City’s component units or need any addi tional financial information, contact the Financ e Department at 2000 Main Street, Huntington Beach, California, 92648-2702, phone (714) 536-5630 or email [email protected]. 21 BASIC FINANCIAL STATEMENTS

22 ASSETS
Governmental
Activities
Business-Type
Activities Total
Current Assets:

Cash and Investments 261,867$ 72,717$ 334,584$ Cash and Investments with Fiscal Agent 9,838 - 9,838 Receivables, Net 43,348 6,674 50,022 Advances to Successor Agency 1,363 - 1,363 Lease Receivable 12,570 - 12,570 Inventories - 1,444 1,444 Prepaids 1,877 - 1,877 Joint Venture 199 1,816 2,015 Total Current Assets 331,062 82,651 413,713 Non-Current Assets:

Net Pension Asset 100,849 8,018 108,867 Net Other Postemployment Benefits Asset 5,370 640 6,010 Total Non-Current Assets 106,219 8,658 114,877 Capital Assets:

Non-Depreciable 381,773 4,016 385,789 Depreciable, Net 364,598 139,982 504,580 Total Capital Assets 746,371 143,998 890,369 Total Assets 1,183,652 235,307 1,418,959

DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 24,515 1,647 26,162 Deferred Outflows Related to Other Postemployment Benefits 4, 224 504 4,728 Total Deferred Outflows of Resources 28,739 2,151 30,890

LIABILITIES
Current Liabilities:

Accounts Payable 18,309 3,825 22,134 Accrued Payroll 5,702 766 6,468 Unearned Revenue 31,157 - 31,157 Accrued Interest Payable 587 22 609 Deposits 1,495 1,520 3,015 Total Current Liabilities 57,250 6,133 63,383 Long-Term Obligations:

Long-Term Obligations Due Within One Year 35,611 1,348 36,959 Long-Term Obligations Due in More than One Year 411,796 21,706 433,502 Net Pension Liability 14,390 762 15,152 Total Long-Term Obligations 461,797 23,816 485,613 Total Liabilities 519,047 29,949 548,996

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 113,840 8,916 122,756 Deferred Inflows Related to Other Postemployment Benefits 9,793 1,166 10,959 Deferred Inflows Lease Related 12,400 - 12,400 Total Deferred Inflow of Resources 136,033 10,082 146,115

NET POSITION
Net Investment in Capital Assets 712,289
143,998 856,287
Restricted for:

Debt Service 4,432 - 4,432 Capital Projects 19,024 19,309 38,333 Public Works and Community Services Projects 45,004 - 45,004 Total Restricted Net Position 68,460 19,309 87,769 Unrestricted (223,438) 34,120 (189,318) Total Net Position 557,311$ 197,427$ 754,738$

CITY OF HUNTINGTON BEACH

STATEMENT OF NET POSITION
JUNE 30, 2022
(In Thousands)
See Notes to the Financial Statements
23 Program Revenues
Functions/Programs Expenses
Charges for
Current
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental
Activities
Business-
Type
Activities Total
Governmental Activities:

City Council 382$ 162$ -$ -$ (220)$ -$ (220)$ City Manager 5,412 4,131 56 13 (1,212) - (1 ,212) City Treasurer 259 149 - - (110) - ( 110) City Attorney 2,183 5 - - (2,178) - (2 ,178) City Clerk 1,060 269 - - (791) - ( 791) Finance 5,581 3,036 - - (2,545) - (2 ,545) Community Development 11,634 10,953 3,993 586 3,898 - 3,898 Fire 52,808 13,401 73 - ( 39,334) - ( 39,334) Information Services 6,469 604 - - (5,865) - (5,865) Polic
e 73,964 6,687 1,838 - ( 65,439) - ( 65,439) Community Services 11,517 21,117 854 95 10,549 - 10,549 Library Services 5,212 302 492 - (4,418) - (4 ,418) Public Works 42,598 7,235 1,995 7,843 (25,525) - ( 25,525) Interest on Long-Term Debt 9,548 - - - (9,548) - (9,548) Total Governmental Activities 228,627 68,051 9,301 8,537 (142,738) - (142,738) Business-type Activities:

Water Utility 44,182 43,590 - - - ( 592) ( 592) Sewer Service 10,390 10,791 - - - 401 401 Refuse Collection 13,738 13,675 - - - (63) (63) Hazmat Service 236 276 - - - 4 0 4 0 Total Business-Type Activities 68,546 68,332 - - - (214) (214) Total Governmental and
Business Type Activities 297,173 $ 136,383$ 9,301$ 8,537$ (142,738)$ (214)$ (142,952)$ General Revenues:

Taxes:

Property Taxes 102,539 $ - $ 102,539$ Sales Taxes 57,652 - 57,652 Utility Taxes 19,528 - 19,528 Franchise Taxes 10,380 - 10,380 Transient Occupancy Tax 15,754 - 15,754 Total Taxes 205,853 - 205,853 Other:

Use of Money and Property (Loss) (1,895) (4 ,328) (6 ,223) From Other Agencies - Unrestricted 4,631 - 4,631 Gain on Sale of Property 1,699 - 1,699 Total General Revenues 210,288 (4,328) 205,960 Transfers (39) 3 9 -
Total General Revenues and Transfers 210,249 (4,289) 205,960 Change in Net Position 67,511 (4 ,503) 63,008 Net Position - Beginning of Year 489,800 201,930 691,730 Net Position - End of Year 557,311 $ 197,427$ 754,738$ Net (Expense) Revenue and Changes in
Net Position

CITY OF HUNTINGTON BEACH

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
See Notes to the Financial Statements
24 CITY OF HUNTINGTON BEACH

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2022
(In Thousands)
ASSETS General Fund
Grants Special
Revenue
LMIHAF
Capital
Projects
Pension
Liability
Other
Governmental
Funds Total
Cash and Investments 99,943$ 26,669$ 3,484$ 20,551$ 73,211$ 223,858$ Cash and Investments with Fiscal Agent - - - - 9,838 9,838 Taxes Receivable 14,026 - - 118 1,942 16,086 Other Receivables, Net 9,833 8,446 8,210 62 609 27,160 Lease Receivable 12,570 - - - - 12,570 Advances to Successor Agency - - 1,363 - - 1,363 Prepaids 82 - - - 1,000 1,082 Total Assets 136,454 35,115 13,057 20,731 86,600 291,957

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES

LIABILITIES
Accounts Payable 11,707 1,396 - 2 4,539 17,644 Accrued Payroll 5,380 74 2 - 227 5,683 Unearned Revenue 1,217 29,940 - - - 31,157 Deposits Payable 1,495 - - - - 1,495 Total Liabilities 19,799 31,410 2 2 4,766 55,979

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Lease Related 12,400 - - - - 12,400 Unavailable Revenue 1,431 8,016 8,199 - 6 5 17,711 Total Deferred Inflows of Resources 13,831 8,016 8,199 - 6 5 30,111

FUND BALANCES
Nonspendable
Prepaids 82 - - - - 82 Restricted
Underground Utilities 364 - - - - 364 Restitution 296 - - - - 296 Donations 777 - - - - 777 Section 115 Trust 12,427 - - - - 12,427 Pollution Remediation - - - - 355 355 Debt Service - - - 20,729 4,432 25,161 Highways, Streets and Transportation - - - - 13,637 13,637 Low Income Housing - - 4,856 - 5,816 10,672 Air Quality - - - - 1,214 1,214 Other Capital Projects - - - - 22,769 22,769 Other Purposes 759 - - - 1,966 2,725 Committed
Economic Uncertainties 26,114 - - - - 26,114 Parks - - - - 1,257 1,257 Other Capital Pr
ojects 551 - - - 23,474 24,025 Other Purposes - - - - 3,828 3,828 Assigned
Litigation Reserves 3,650 - - - - 3,650 AES Reserve 4,900 - - - - 4,900 Capital Improvement Reserve 8,597 - - - 3,021 11,618 Equipment Replacement 8,295 - - - - 8,295 General Plan Maintenance 1,143 - - - - 1,143 General Liability Plan Migration 2,801 - - - - 2,801 Pension Rate Stabilization 2,206 - - - - 2,206 Cityview Replacement 1,028 - - - - 1,028 Section 115 Trust 3,500 - - - - 3,500 Triple Flip 109 - - - - 109 Strategic Initiatives 16,536 - - - - 16,536 Housing Agreement 1,657 - - - - 1,657 Year-End Fair Value 1,983 - - - - 1,983 Other Pur
poses 5,049 - - - - 5,049 Unassigned - (4,311) - - - (4,311) Total Fund Balances 102,824 (4,311) 4,856 20,729 81,769 205,867 Total Liabilities, Deferred Inflows
of Resources and Fund Balances 136,454$ 35,115$ 13,057$ 20,731$ 86,600$ 291,957$ See Notes to the Financial Statements
25 Amounts reported for governmental activities in the statement of net position are different because:

Total Fund Balances Governmental Funds 205,867$
Net Pension Asset is not available to pay in the current period and therefore are not reported in the funds.

Net Pension Asset 100,461
Net Other Postemployment Benefits Asset 5,341 105,802 Net Capital Assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds. Amounts exclude Net Capital Assets of the Internal Service Funds.

Capital Assets 1,132,022
Accumulated Depreciation (392,130)

Total Capital Assets 739,892
Joint Venture 199
Right to Use Leased Assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds.

Right to Use Assets 448
Accumulated Amortization (195)
Total Right to Use Assets 253
Internal Service Funds are used by management to charge the cost of various city activities to individual governmental and business-like funds. The assets and liabilities of the Internal Service Fund must be added to the Statement of Net Position. (13,052) Revenues that are measurable but not available are not recognized as revenue in governmental funds. Such amounts are recorded as Unavailable Revenue under the modified accrual basis of accounting. 17,711
Deferred Outflows Related to Pensions 24,437
Deferred Outflows Related to Other Postemployment Benefits (OPEB) 4,201 Governmental Funds report all pension contributions as expenditures; however, in the Statement of Net Position, the excess of the total pension liability over the plan Fiduciary Net Position is reported as a Net Pension Liability. (14,356) Deferred Inflows Related to Pensions (113,411)
Deferred Inflows Related to Other Postemployment Benefits (OPEB) (9,740) Other long-term liabilities are not due in the current period and, therefore, are not recorded in the governmental funds.

Accrued Interest Payable (586)
Long-term liabilities, including bonds and certificates of participation payable, are not due and payable in the current period and therefore are not reported in the governmental funds.

Amounts exclude Long-Term Obligation of the Internal Service Fund.

Long-Term Obligations Due in One Year (22,118)
Long-Term Obligations Due in More than One Year (367,788) Net Position of Governmental Activities 557,311$
(In Thousands)

CITY OF HUNTINGTON BEACH

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2022
See Notes to the Financial Statements
26 REVENUES
General
Fund
Grants Special
Revenue
LMIHAF
Capital
Projects
Pension
Liability
Other
Governmental
Funds Total
Property Taxes 94,627 $ - $ - $ 7,912$ - $ 102,539$ Sales Taxes 53,362 - - - 4,290 57,652 Utility Taxes 19,528 - - - - 19,528 Other Taxes 26,136 - - - 7,584 33,720 Licenses and Permits 8,666 - - - 930 9,596 Fines and Forfeitures 5,144 - - - - 5,144 Use of Money and Property (Loss) 12,215 96 614 192 1,248 14,365 Intergovernmental 5,130 5,682 - - 2,248 13,060 Charges for Current Services 29,364 - - 16,764 3,774 49,902 Other 2,882 - - - 2 5 2,907 Total Revenues 257,054 5,778 614 24,868 20,099 308,413

EXPENDITURES
Current:

City Council 426 - - - - 426 City Manager 4,616 13 - - 636 5,265 City Treasurer 326 - - - - 326 City Attorney 2,995 - - - - 2,995 City Clerk 1,295 - - - - 1,295 Finance 6,869 359 - 2 29 7,259 Community Development 10,716 2,716 56 - 924 14,412 Fire 60,643 2,164 - - 73 62,880 Information Services 7,389 7 - - 475 7,871 Police 91,970 1,856 - - 150 93,976 Community Services 11,133 714 - - 6,608 18,455 Library Services 6,014 202 - - 84 6,300 Public Works 24,285 2,405 - - 23,468 50,158 Debt Service:

Principal 2,917 - - 10,821 2,180 15,918 Interest 260 - - 10,259 780 11,299 Total Expenditures 231,854 10,436 5 6 21,082 35,407 298,835 Excess (Deficiency) of Revenues Over
(Under) Expenditures 25,200 (4,658) 558 3,786 (15,308) 9,578

OTHER FINANCING SOURCES (USES)
Transfers In 416 1,104 900 - 19,222 21,642 Lease (as Lessee) 448 - - - - 448 Issuance of Finance Purchase Agreement - - - - 868 868 Transfers Out (17,849) (3,111) (224) - (497) (21,681) Total Other Financing Sources (Uses) (16,985) (2,007) 676 - 19,593 1,277 Net Change In Fund Balances 8,215 (6,665) 1,234 3,786 4,285 10,855 Fund Balances - Beginning of Year 94,609 2,354 3,622 16,943 77,484 195,012 Fund Balances - End of Year 102,824$ (4,311)$ 4,856$ 20,729$ 81,769$ 205,867$ (In Thousands)

CITY OF HUNTINGTON BEACH

STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
See Notes to the Financial Statements
27 Amounts reported for governmental activities in the statement of activities are different because:

Net Changes in Fund Balances - Total Governmental Funds 10,855$

Depreciable Assets Purchased 20,294
Depreciable Assets Disposition (208) Non-Depreciable Assets Purchased 8,285 Non-Depreciable Assets Disposition (3,891) Capital Asset Depreciation (16,287)
Joint Venture 14
Current Year Grant and Other Revenue Accrual 7,311 Prior Year Grant and Other Revenue Accrual (3,010) (1,350)
Pension income reported in the statement of activities includes the change in the the net pension liability and related changes in pension amounts for deferred outflows and deferred inflows of resources. 33,027 2,372
Internal Service Funds are used by management to charge the costs of certain activities, such as self insurance workers' compensation charges. The net revenue of this internal service fund is reported as governmental activities. ( 4,611) Internal Service Funds repayment of long-term debt is not reported as governmental activities. 37
Current Year Interest Accrual (586) Prior Year Interest Accrual 2,337
15,918
(1,316)
(1,680)
Change in Net Position of Governmental Activities 67,511$ FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)

CITY OF HUNTINGTON BEACH

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE

STATEMENT OF ACTIVITIES
Accrual of revenues - certain revenues in the Statement of Activities do not meet the "availability" criteria for revenue recognition in the governmental funds and are not reported in the governmental funds as revenue.

Capital expenditures - governmental funds report capital outlays as expenditures.

However, in the Statement of Activities, the cost of these assets are allocated over their estimated useful lives and reported as depreciation expense.

Liabilities not liquidated with current resources - some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

The issuance of long-term debt provides current financial resources to governmental funds.

Repayment of long-term debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.

Other Postemployment Benefits Payments - Expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds (expenses).

Repayments on long-term receivables provide current financial resources to governmental funds, while loans provided consume the current financial resources of governmental funds. These transactions, however, have no effect on net position.

The repayment of some expenses such as compensated absences, claims, and pension expenses, reported in the statement of activities, do not require the use of current resources, and therefore are not reported as expenditures in the governmental funds.

See Notes to the Financial Statements
28 Governmental
Activities
Water
Fund
Sewer Service
Fund
Refuse
Fund
Hazmat
Service Fund Total
Internal Service
Funds
ASSETS
Current Assets:

Cash and Investments 21,744$ 30,957$ 246$ 461$ 53,408$ 38,009$ Restricted Cash and Investments 19,309 - - - 19,309 - Other Receivables, Net 2,808 579 771 10 4,168 102 Prepaids - - - - - 795 Joint Ventures 1,816 - - - 1,816 - Inventories 1,444 - - - 1,444 - Unbilled Receivables 1,562 412 532 - 2,506 - Total Current Assets 48,683 31,948 1,549 471 82,651 38,906 Non-Current Assets:

Net Pension Asset 5,608 2,098 188 124 8,018 388 Net Other Postemployment Benefits Asset 460 157 1 6 7 640 2 9 Total Non-Current Assets 6,068 2,255 204 131 8,658 417 Capital Assets:

Land 3,907 - - - 3,907 - Buildings and Improvements 57,933 47,690 - - 105,623 - Machinery and Equipment 17,576 4,597 215 - 22,388 8,598 Infrastructure 106,236 45,432 - - 151,668 - Construction in Progress - 109 - - 109 - Less Accumulated Depreciation (95,299) (44,296) (102) - (139,697) (2,372) Total Capital Assets 90,353 53,532 113 - 143,998 6,226 Total Assets 145,104 87,735 1,866 602 235,307 45,549

DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 1,155 432 38 22 1,647 78 Deferred Outflows Related to Other Postemployment Benefits 362 124 1 3 5 504 2 3 Total Deferred Outflows of Resources 1,517 556 5 1 2 7 2,151 101 Total Assets and Deferred Outflows of Resources 146,621 88,291 1,917 629 237,458 45,650

LIABILITIES
Current Liabilities:

Accounts Payable 2,057 688 1,080 - 3,825 665 Accrued Payroll 519 214 21 12 766 19 Deposits Payable 1,520 - - - 1,520 - Interest Payable 15 6 1 - 22 1 Current Portion of Claims Payable - - - - - 13,439 Current Portion of Compensated Absences 321 125 1 1 2 459 1 1 Total Current Liabilities 4,432 1,033 1,113 1 4 6,592 14,135 Non-Current Liabilities:

Compensated Absences 857 335 30 5 1,227 30 Long-Term Obligations Due Within One Year 622 233 21 13 889 43 Long-Term Obligations Due in More than One Year 14,330 5,360 481 308 20,479 986 Net Pension Liability 537 200 18 7 762 34 Claims Payable - - - - - 42,992 Total Non-Current Liabilities 16,346 6,128 550 333 23,357 44,085 Total Liabilities 20,778 7,161 1,663 347 29,949 58,220

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 6,239 2,334 209 134 8,916 429 Deferred Inflows Related to Other Postemployment Benefits 838 287 2 9 1 2 1,166 5 3 Total Deferred Inflows of Resources 7,077 2,621 238 146 10,082 482

NET POSITION
Investment in Capital Assets 90,353 53,532 113 - 143,998 6,226 Restricted for:

Capital Projects 19,309 - - - 19,309 - Unrestricted 9,104 24,977 (97) 136 34,120 (19,278) Total Net Position 118,766 78,509 1 6 136 197,427 (13,052) Total Liabilities, Deferred Inflows
of Resources, and Net Position 146,621 $ 88,291$ 1,917$ 629$ 237,458$ 45,650$

PROPRIETARY FUNDS

STATEMENT OF NET POSITION

CITY OF HUNTINGTON BEACH
Business-Type Activities - Enterprise Funds
(In Thousands)
June 30, 2022
See Notes to the Financial Statements
29 Governmental
Activities
Water
Fund
Sewer Service
Fund
Refuse
Fund
Hazmat
Service Fund Total
Internal Service
Funds

OPERATING REVENUES
Sales 39,245$ - $ - $ - $ 39,245$ - $ Fees and Charges for Service - 10,719 13,606 276 24,601 22,081 Other 4,345 7 2 6 9 - 4,486 152 Total Operating Revenues 43,590 10,791 13,675 276 68,332 22,233

OPERATING EXPENSES
Water Purchases 17,291 - - - 17,291 - Supplies and Operations 8,359 7,904 13,704 228 30,195 3,499 Engineering 1,982 - - - 1,982 - Production and Distribution 8,744 - - - 8,744 - Maintenance 564 - - - 564 - Water Meters 1,757 - - - 1,757 - Water Quality 809 - - - 809 - Water Use Efficiency 247 - - - 247 - Claims and Judgments - - - - - 22,113 Depreciation 4,053 2,345 2 1 - 6,419 1,012 Total Operating Expenses 43,806 10,249 13,725 228 68,008 26,624 Operating Income (Loss) (216) 542 (50) 4 8 324 (4,391)

NON-OPERATING REVENUES (EXPENSES)
Investment Income (Loss) (2,468) (1, 845) (20) 5 (4, 328) (1, 890) Interest Expense (376) ( 141) (13) (8) ( 538) (29) Proceeds from Sale of Equipment - - - - - 1,699 Total Non-Operating Revenues (Expenses) (2,844) (1,986) (33) ( 3) (4,866) (220) Income (Loss) Before Transfers (3,060) (1,444) (83) 4 5 (4,542) (4,611)

TRANSFERS
Transfers In 1 - 51 - 52 - Transfers Out - - - (13) (13) - Total Transfers 1 - 5 1 (13) 3 9 - Change in Net Position (3,059) (1, 444) (32) 32 (4, 503) (4, 611) Net Position - Beginning of Year 121,825 79,953 4 8 104 201,930 (8,441) Net Position - End of Year 118,766 $ 78,509$ 1 6$ 136$ 197,427$ (13,052)$ Business-Type Activities - Enterprise Funds
(In Thousands)
FOR THE YEAR ENDED JUNE 30, 2022

PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

CITY OF HUNTINGTON BEACH
See Notes to the Financial Statements
30 Governmental
Activities
Water
Fund
Sewer Service
Fund
Refuse
Fund
Hazmat
Service Fund Total
Internal Service
Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers and Users 43,551 $ 10,820 $ 13,537 $ 275 $ 68,183$ 22,227 $ Cash Paid to Employees for Services (9,113) (1, 585) ( 149) (93) (10, 940) (378) Cash Paid to Suppliers of Goods and Services (38,443) (7,034) (13,561) (179) (59,217) (15,502) Net Cash and Investment Provided (Used) by
Operating Activities (4,005) 2,201 (173) 3 (1,974) 6,347

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Transfers In 1 - 51 - 52 - Transfers Out - - - (13) (13) - Debt Service (544) ( 203) (17) (12) ( 776) (37) Interest Paid (452) (170) (15) (10) (647) (32) Net Cash and Investments Provided (Used) by
Noncapital Financing Activities (995) (373) 1 9 (35) (1,384) (69)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Purchase of Capital Assets (3,159) (4, 789) - - (7, 948) (1, 934) Proceeds from Sale of Plant, Property, and Equipment -
- - - - 1,699 Net Cash and Investments Provided (Used) by
Capital and Related Financing Activities (3,159) (4,789) - - (7,948) (235)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment Income (Loss) (2,468) (1,845) (20) 5 (4,328) (1,890) Net Cash and Investments Provided (Used) by
Investing Activities (2,468) (1,845) (20) 5 (4,328) (1,890) Net Increase (Decrease) in Cash and Investments (10,627) (4, 806) ( 174) (27) (15, 634) 4,153 Cash and Investments - Beginning of Year 51,680 35,763 420 488 88,351 33,856 Cash and Investments - End of Year 41,053 $ 30,957$ 246$ 461$ 72,717$ 38,009$

RECONCILIATION OF OPERATING

INCOME (LOSS) TO NET CASH AND INVESTMENTS

PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) (216) $ 542 $ (50) $ 48 $ 324 $ (4, 391)$ Adjustments to Reconcile Operating
Income (Loss) to Net Cash and Investments
Provided (Used) by Operating Activities
Depreciation 4,053 2,345 21 - 6,419 1,012 (Increase) in Other Receivables, Net (233) - ( 165) (1) ( 399) (6) Decrease in Unbilled Receivables 165 29 27 - 221 - Decrease in Prepaids - - - - - 282 (Increase) in Joint Ventures (244) - - - ( 244) - (Increase) in Inventory (2) - - - (2) - (Increase) in Net Pension Asset (5,608) (2, 098) ( 188) ( 124) (8, 018) ( 388) (Increase) in Net Other Postemployment Benefits Asset (460) ( 157) (16) (7) ( 640) (29) Increase (Decrease) in Accounts Payable (5,573) (5) 57 - (5, 521) (50) Increase in Accrued Payroll 86 40 7 2 135 3 Increase in Deposits Payable 29 - - - 29 - Increase in Claims Payable - - - - - 9,652 In
crease (Decrease) in Compensated Absences 173 82 7 (2) 260 (3) Decrease in Deferred Pension Outflow 16,770 6,273 562 364 23,969 1,156 Increase in Deferred Pension Inflow 5,316 1,989 178 119 7,602 368 (Decrease) in Net Pension Liability (18,516) (6,926) (621) (399) (26,462) (1,275) (Increase) in Deferred Other Postemployment Benefits Outflow (131) (45) (5) (2) (183) (8) Increase in Deferred Other Postemployment Benefits Inflow 632 216 22 9 879 40 (Decrease) in Net Other Postemployment Benefits Liability (246) (84) ( 9) ( 4) (343) (16) Net Cash and Investments Provided
by Operating Activities (4,005) $
2,201$ (173)$ 3 $ (1,974)$ 6,347$

NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES
There were no noncash investing, capital, or financing activities during the year ended June 30, 2022.

FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
Business-Type Activities - Enterprise Funds

CITY OF HUNTINGTON BEACH

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
See Notes to the Financial Statements
31 ASSETS Custodial Funds
Pension Trust Fund -
Retirement
Supplemental Fund
Huntington Beach
Redevelopment
Successor Agency
Private Purpose Trust
Current Assets:

Cash and Investments 4,725 $ - $ 6,500$ Cash and Investments with Fiscal Agent 3,268 - 2,587 Mutual Funds - 58,101 - Money Market Funds - 898 - Accounts Receivable, Net 760 2 - Interest Receivable - - 2 5 Total Assets 8,753 59,001 9,112

LIABILITIES
Current Liabilities:

Accounts Payable 2,070 - 393 Accrued Payroll - - 8 Advances from City of Huntington Beach - - 1,363 Total Current Liabilities 2,070 - 1,764 Long-Term Obligations:

Long-Term Obligations Due Within One Year - - 4,505 Long-Term Obligations Due in More than One Year - - 20,793 Total Long-Term Obligations - - 25,298 Total Liabilities 2,070 - 27,062

NET POSITION
Restricted for Pension Benefits - 59,001 - Held in Trust For Other Purposes - - (17,950) Restricted for Individuals and Organizations 6,683 - - Total Net Position 6,683$ 59,001$ (17,950)$

CITY OF HUNTINGTON BEACH

STATEMENT OF FIDUCIARY FUND NET POSITION

FIDUCIARY FUNDS
JUNE 30, 2022
(In Thousands)
See Notes to the Financial Statements
32 ADDITIONS Custodial Funds
Pension Trust Fund -
Retirement
Supplemental Fund
Huntington Beach
Redevelopment
Successor Agency
Private Purpose Trust
Employer Contributions -$ 6,005$ -$ Special Assessments or Special Taxes
Collected from Property Owners 1,542 - 6,008 Business Improvement District Taxes 6,355 - - Parking Assessments 2,433 - - Other Income - - 1 0 Total Additions Before Investment Income 10,330 6,005 6,018 Investment Income:

Investment Income (Loss) 19 (11,226) 75 Less: Investment Expense - (136) - Net Investment Income (Loss) 19 (11,362) 7 5 Total Additions 10,349 (5,357) 6,093

DEDUCTIONS
Benefits - 5,668 - Administrative Costs 20 338 - Payments to Other Organizations 7,022 - - Economic Development - - 250 Interest and Fiscal Agency Expenses 1,435 - 1,525 Principal 1,715 - - Total Deductions 10,192 6,006 1,775 Change in Net Position 157 (11,363) 4,318 Net Position - Beginning of Year 6,526 70,364 (22,268) Net Position - End of Year 6,683$ 59,001$ (17,950)$

STATEMENT OF CHANGES IN FIDUCIARY FUND NET POSITION

FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)

CITY OF HUNTINGTON BEACH
See Notes to the Financial Statements
33 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

Footnote
N u m b e r D escription Page

1. Summary of Significant Accounting Policies ............................ 39-52

2. Cash and Investments Notes ...................................................... 53-60

3. Other Receivables ......................................................................... 60-61

4. Unearned Revenue ....................................................................... 62

5. Unavailable Revenue ................................................................... 62

6. Retirement Plan – Normal ........................................................... 63-74

7. Retirement Plan – Supplemental ............................................... 74-81

8. Other Post Employment Benefits .............................................. 82-88

9. Risk Management ................................................................ 89-90

10. Interfund Transactions .......................................................................... 91-92

11. Long-Term Obligations ................................................................. 93-103

12. Capital Assets ................................................................................ 104-105

13. Investment in Joint Ventures ....................................................... 106

14. Leases ............................................................................................. 106-112

15. Successor Agency Trust for Assets of the Former
Redevelopment Agency of the City of Huntington Beach ..... 112-118

16. Commitments and Contingencies .............................................. 118-123

17. Other Information ......................................................................... 123-124 34 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFI CANT ACCOUNTING POLICIES

a. Reporting Entity

The City of Huntington Beach is the primary government. It was incorporated in 1909 as a charter, full-service city. The form of government is Council-Manager.

Component units are legally separ ate organizations for which th e City Council is financially accountable, or organiza tions that if excluded from the accompanying financial statements, would make them misleading. The component units described below are blended (presented as if they are part of the primary government) or presented as a fiduciary trust f und with the primary government f o r f i n a n c i a l reporting purposes. The criteria used in determining the scope of the reporting entity are based on the provisions of GASB Statement 14, The Financial Reporting Entity, as amended by GASB Statement 39, Determining Whether Certain Organizations Are Component Units, and GASB Statement 61, The Financial Reporting Entity:

Omnibus an amendment of GASB Statements No. 14 and No. 34. A legally separate, tax exempt organization should be reported as a blended component unit of the City if all of the following criteria are met:

1. The governing board is substantiv ely the same as the primary government and there is a financial benefit or burden relationship between the primary government and the component unit;

2. The component unit provides ser vices entirely, or almost entirely, to the primary government or otherwise exclusively, or almost exclusively, benefits the primary government even though it does not provide services directly to it; and

3. The component unit’s total debt outstanding, including leases, is expected to be repaid entirely or almost entirely with the resources of the primary government.

Based on the application of the criteria listed above, the following component units have been included.

Huntington Beach Housing Authority
The Housing Authority (the Author ity) was established in March 2011 pursuant to Housing Authority Laws of California to provide rental assistance programs to low- income families and senior citizens, and to operate a Housing R ehabilitation Loan Program and other approved programs. The Authority is governed by a commission of seven members comprised of the City Council, which appoints management and has full accountability for the Authority's fiscal affairs. The Authority's financial data and transactions are included within the capital projects Low and Moderate Income Housing Asset Fund (LMIHAF). On January 9, 2012, the City adopt ed a resolution designating the Housing Authority of the City of Huntington Bea ch to serve as the Housing Successor Agency. The Housing Successor Agency's financ ial data and transactions are included within t he LMIHAF Capital Projects Fu nd. There is no separate Component Unit Financial Report (CUFR) prepared for the Authority.

35 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

Huntington Beach Public Financing Authority (Public Financing Authority) – This Corporation was formed in March 1988 to issue debt to finance public improvements and other capital pur chases for the City and the former Redevelopment Agency. The Public F inancing Authority’s governin g body is the City Council, which also adopts its annual budget. The Public Financing Authority is financially dependent on the City. There are no separately i ssued financial statements available for the Public Financing Authority.

The City of Huntington Beach Supplemental Retirement Plan and T rust (Supplemental Retirement Plan and Trust) – The Trust was formed to provide a supplemental retirement plan for all employees hired prior to 1 997 (exact dates differed for various associations ). The governing board of the Supplemental Retirement Plan consists of the City Treasurer, Chief Financial Officer, and the City Manager (or designee). The Retire ment Board is responsible for supervising all investments, resolving benefit disputes, and ensuring that contributions are made in order to pay the required benefits. There are no separate financial statements for this plan and trust.

b. Government-wide Financial Statements

The government-wide financial statements include a Statement of Net Position and a Statement of Activities. Thes e statements present summaries o f Governmental and Business-Type Activities for the City accompanied by a total column. Fiduciary activities of the City are not i ncluded in these statements. Th ese statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred inflows/outflows of resources, and liabilities, including capital assets, as well a s infrastructure assets, and long-term liabilities, are included in the accompanying Sta tement of Net Position. The Statement of Activities presents changes in Net P osition. Under the accrual basis of accounting, revenues are recognized in the per iod in which they are earned while expenses are recognized in the period in which the liability is incurred.

36 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifia ble with a specific function or segment. Indirect expenses are allocated to the various functions based on a prop ortionate use of services. The types of transactions reported as program revenue s for the City are reported in three categories: 1) charges for current services; 2) operating grants and contributions; and, 3) capita l grants and contributions. Ta xes and other items not properly included among program revenues are reported as general revenues.

As a general rule, the effects of interfund activity have been eliminated from the government-wide financial statements.

When both restricted and unrestrict ed resources are available f o r u s e , i t i s t h e government’s policy to use restricted resources first, then unrestricted resources as they are needed.

Financial Statement Classification
In the government-wide financial st atements, net position is classified in the following categories:

Net Investment in Capital Assets – This category groups all capital assets, including infrastructure, into one component of net position. A ccumulated depreciation and the outstanding balances of debt that are attr ibutable to the acquisition, construction, or improvement of these assets reduce this category.

Restricted Net Position – This category presents restrictions imposed by creditors, grantors, contributors or laws or regulations of other governme nts and restrictions imposed by law through constitutional provisions or enabling le gislation. The government-wide Statement of Ne t Position reports $68,460,000 of governmental activities restricted net posit ion, of which $40,364,000 is res tricted by enabling legislation. The government-wide Statement of Net Position reports $19,309,000 of business-type activities restricted net position, of which all is restricted by enabling legislation. This category pres ents restrictions placed on the categories of Capital Projects, Debt Service, and Specific Projects and Programs.

37 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

Unrestricted Net Position – This category represents the net position of the City, not restricted for any project or other purpose. The government-wide Statement of Net Position reports a deficit unrestricted net position of $22 3,438,000 of governmental activities unrestric ted net position, which is lar gely a result of the issuance of Pension Obligations Bonds to pay down the City’s CalPERS Unfunded Accrued Liability. The City’s Long- Term Obligations at June 30, 2022 is $485,613,000, of which, $461,797,000 is payable from Governmental Activities.

The government-wide Statement of Net Position reports $34,120,000 of business- type activities unrestricted net position.

c. Fund Financial Statements

Separate fund financial statement s are prepared for governmenta l funds, proprietary funds, and fiduciary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Acc ounting, and Financial Statement Presentation
All governmental funds are accounted for on a spending or "curr ent financial resources" measurement focus and the modified accrual basis of accounting. Only current assets, current liabilities, and deferred inflows are i ncluded on the Balance Sheets. The Statement of Revenues, Expenditures, and Changes in Fund Balances presents increases (revenues and other financing sources) and d ecreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the acc ounting period in which they become both measurab le and available to finance expe nditures of the current period.

Revenues are recorded when received in cash, except that revenu e s s u b je c t to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accr ual by the City, are property tax, sales tax, use of money and property, intergovernmental revenues, charges for current services, and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. However, debt service expenditures as well as expenditures related to compensated absences and claims are recorded only when payment is due.
38 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

Governmental Funds Financial Statements
Governmental Funds Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and non-majo r funds aggregated. Accompanying schedules are presented to reconcile and exp lain the differences in fund balances and changes in fund balances as presented in these statements to the net position and changes in net position presented in the government-wide financ ial statements.

The City presents all major funds that meet those qualifications.

The City’s Governmental Fund Balances are comprised of the foll owing components:
 Nonspendable fund balance includes amounts that are not in spe ndable form and typically includes inventorie s, prepaid items, and other items that by definition cannot be appropriated.
 The restricted fund balance cat egory includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
 The committed fund balance clas sification includes amounts that can be used only for the specific purposes determined by a formal action of the City Council.

The City Council has authority to establish, modify, or rescind a fund balance commitment by formal action as specified by the City’s Fund Bal ance Policy.

Commitments to fund balance are made through adoption of a resolution by City Council.
 Amounts in the assigned fund balanc e classification are intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. The City Manager or designee has the a uthority to establish, modify, or rescind a fund balance assignment as spec ified by the City’s Fund Balance Policy.
 Unassigned fund balance is the residual classification for the City’s General Fund and includes all spendable amounts not contained in the ot her classifications. Unassigned fund balance in other governmental funds is limited to any negative residual fund balance after fund balance has been classified as restricted, committed, or assigned.

39 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

In the government-wide statements, the City considers restricted funds to be spent first then unrestricted amounts w hen expenditures are incurred for purposes for which both restricted and unrestr icted fund balance is availabl e. In the governmental fund statements, when expenditures are incurred, t he City uses the most restrictive funds first. The City would use the appropriate funds in the following order: committed, assigned, and lastly unassigned amounts.

The City establishes encumbrance s to record the amount of purchase orders, contracts, and other obligations , which have not yet been fulfi lled, cancelled, or discharged. Encumbrances outst anding at year-end are recorded a s part of restricted or assigned fund balance.

Encumbrances outstanding as of June 30, 2022, by major fund (in thousands):

Economic Uncertainties Reserve
The City Council established an Ec onomic Uncertainties Reserve in the General Fund through a resolution with a goal to commit the value of tw o months of the General Fund expenditure adopted budget amount. A ppropriations from the Economic Uncertainties Reserve commitments can only be made by formal City Council action. Generally, appropriations and access to these funds will be reserved for emergency situations. Exampl es of such emergencies include, but are not limited to:
 An unplanned, major event such as catastrophic disaster requiring expenditures over 5% of the General Fund adopted budget;
 Budgeted revenue in excess of $1 million taken by another gove rnment entity;  Drop in projected/actual revenue of more than 5% of the General Fund adopted revenue budget; and,
 Should the Economic Uncertainties Reserve be used, and its level falls below the minimum amount of two months of General Fund expenditures a dopted budget, the goal is to replenish the fund within three fiscal years.

General Fund 5,100$
Grants Special Revenue 3,024
Other Governmental Funds 32,979
Total Encumbrance All Funds 41,103$
40 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

Proprietary Fund Financial Statements
The City’s enterprise and internal service funds are proprietar y funds. Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Fund Net Position, and a Statement of Cash Flows for each major proprietary fund.

Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all ass ets, deferred inflows/outflows, and liabilities (whether current or non-current) are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Fund Net Position present inc reases (revenues) and decreases (expenses) in total 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.

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.

The internal service funds, which provide services to the other funds of the City, are presented in a single column in the proprietary funds financial statements. Because the principal users of the inte rnal services funds are the City ’s governmental activities, the assets and liabilities of the internal service funds are consolidated into the governmental activities colu mn of the government-wide State ment of Net Position. The costs of the internal service fund services are spread to the appropriate function or program on the government-wide Statement of Activities and the revenues and expenses within the internal service funds are eliminated from the government-wide financial statements to avoid any doubling effe ct of these revenues and expenses.

41 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

Fiduciary Funds Financial Statements
Fiduciary Funds Financial Statements include a Statement of Net Position and a Statement of Changes in Net Position for Custodial and Trust Fu nds. The City's fiduciary funds include Custodial and Trust Funds. Custodial Funds report fiduciary activities that are not held in a trust or equivalent arrangeme nt that meets specific criteria. The Custodial funds present results of operations and include net position.

Custodial funds are accounted for on the accrual basis of accounting. Trust Funds present results of operations and include net position. The Ret irement Supplemental Trust Fund accounts for the activities of the Supplemental Retirement Plan for all employees hired prior to 1997, which accumulates resources for pension benefits to qualified employees. Contributions are made to the Supplemental Plan based on the City’s policy to fund the required contributions as determined by the Plan’s actuary and are recognized when they are made. The Retir ee Medical Insurance Trust Fund accounts for the activities of the City’s Other Post- Employment Benefits plans, which provide postemployment medical insurance to retirees.

The Huntington Beach Redevelopment Successor Agency Private Pur pose Trust Fund accounts for the Successor Agency for the former Redevelop ment Agency pursuant to Assembly Bill X1 26. Fiduciary funds are not presen ted in the government-wide financial statem ents because these funds do not represent net position available to the City.

The City reports the following major funds:

Governmental Funds
General Fund – accounts for activity not required to be accounted for in another fund.

Grants Special Revenue – accounts for grant revenues received from federal, state, and local agencies restricted for related project expenditures.

LMIHAF Capital Projects – accounts for the activity related to the development of affordable housing.

Pension Liability Debt Service – accounts for the City’s contribution to its pension plan obligations, as provided by the voter-approved property tax override and other sources of revenue, including the allocable share from Enterprise Funds and Other Governmental Funds.

Proprietary Funds
Water Fund – used to account for water sales to customers.

Sewer Service Fund – accounts for user fees charged to residents and businesses for sewer service.
42 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

Refuse Fund – used to account for activities related to refuse collection and disposal.

Hazmat Service Fund – accounts for user fees charged for the City’s hazardous waste material program.

The City’s fund structure also includes the following fund types:

Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restric ted or committed to expenditure f o r s p e c i f i e d purposes other than debt service or capital projects.

Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.

Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capit al outlays, including the acquisition or construction of capital facilities and other capital assets.

Internal Service Funds
Self Insurance Workers’ Comp Fund – accounts for the City’s self insurance workers’ compensation program in an internal service fund.

Self Insurance General Liability Fund – accounts for the City’s self insurance general liability program in an internal service fund.

Equipment Replacement Fund – accounts for the City’s equipment replacement needs in an internal service fund.

Fiduciary Funds
Custodial Funds – are used to account for debt service activities related to t he Parking Structure – Bella Terra and Community Facilities District conduit debt issues, in which the City acts as an agent, not as a principal. The Business Improvement District fund is used to account for taxes received and held until disbursement.

Pension Trust Fund – Retirement Supplemental Fund - accounts for the City’s supplemental retirement plan.

Huntington Beach Redevelopment Successor Agency Private Purpose Trust Fund – accounts for the Successor Agency of the former Redevelopment Agency in accordance with the State’s Dissolution Act.

43 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

d. Cash and Investments

The City pools cash resources of its various funds to facilitat e cash management.

Cash in excess of daily needs is invested and reported as inves tments. It is the City’s intent to hold investments until maturity. However, the City may, in response to market conditions, sell invest ments prior to maturity in ord er to improve the quality, liquidity, or yield of the portfolio. Interest earnings are apportioned among funds based on month-end cash and in vestment balances. The City ’s cash and cash equivalents are considered to be cash on hand, demand deposits, and highly liquid investments, such as money market funds, and any investment with a maturity of 90 days or less at the time of purchase.

For financial reporting purposes, investments are adjusted to t heir fair value whenever the difference between fair value and the carrying amount is material.

Changes in fair value that occur during the fiscal year are rec ognized as investments income reported for t hat fiscal year. Investment in come includes interest earnings, changes in fair value and any gains or losses realized upon the liquidation or sale of investments.

The City participates in the Local Agency Investment Fund (LAIF ), an investment pool managed by the State Treasurer of the State of California. LAIF has invested a portion of the pool funds in structured notes and asset-backed securities. LAIF’s investments are subject to credit risk. In addition, these structured notes and asset- backed securities are subject to interest rate risk as a result of changes in interest rates. In June 2020, the City Council adopted a resolution auth orizing the deposit and investment of excess funds in the Orange County Investment Pool (OCIP). The investments in OCIP are managed by the County Treasurer. The City’s investment policy is further discussed in Note 2 on page 53.

The City pools all non-restricted cash for investment purchases and allocates interest income to the funds based on month-end cash balances. Funds that have restricted cash record interest income in the respective fund.

44 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

e. Capital Assets

Capital assets are tangible and intangible assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sid ewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the government-wide financial statements and in the proprietary funds financial statements. Capital assets have an acquisition cost of $50,000 or greater ($100,000 for infrastructure) and a useful life of one year or more.

The City records all purchased capital assets at historical cos t (where historical records are available) and at est imated historical cost where no historical records exist. The reported value exclu des normal maintenance and repairs, which are amounts spent in relation to capital assets that do not increase the asset’s capacity or efficiency or increase its estimated useful life. Donated capital assets are recorded at acquisition value at the date of donation. Acquisition value is the price that would be paid to acquire an asset with equivalent service potential on the date of the donation. Intangible assets follow the same capitalization policies as tangible capital assets and are reported with tangible assets in the appropriate capital asset class.

In the government-wide and propri etary funds financial statemen ts, tangible and intangible property, plant, equipm ent, the right to use leased assets, and infrastructure are depreciated/am ortized using the straight-lin e method over the estimated useful life of the assets as shown below and charged to the respective activity or fund. Land and construction in progress are not dep reciated. No depreciation is recorded in the governmental funds of the fund financial statements.

Buildings 20 to 50 years
Machinery and Equipment 5 to 30 years
Infrastructure 50 Years

f. Leases

The City is a lessee for a noncancellable lease of equipment and property. The City recognizes a lease liability and an intangible right -to-use lease asset (lease asset) in the government -wide financial statement s. The City recognizes lease liabilitie s with an initial, individual value of $50,000 or more.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term.

Subsequently, the lease liability is reduced by the principal p ortion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease 45 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.

 The City uses the interest rate charged by the lessor as the d iscount rate.

When the interest rate charged by the lessor is not provided, t he City generally uses its estimated incremental borrowing rate as the discount rate for leases.
 The lease term includes the noncancellable period of the lease . Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase opt ion price that the City is re asonably certain to exercise.

The City monitors changes in ci rcumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the statement of net position.

The City is a lessor for a noncancellable lease of a building, land, and infrastructure.

The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during th e lease term.

Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initiall y measured as the initial amount of the lease rece ivable, adjusted for lease paym ents received at or before the lease commencement dat e. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.
 The City uses its estimated incr emental borrowing rate as the discount rate for leases.

46 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 The lease term includes the noncancellable period of the lease . Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and defer red inflows of resources if certain changes occur that are expected to signifi cantly affect the amount of the lease receivable.

g. Unearned Revenue

In the government-wide and the fund-level financial statements, unearned revenues are those where the asset recognition (availability criteria) h as been met, but the revenue recognition criteria have not been met.

h. Deferred Outflows/I nflows of Resources

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outfl ows of resources, represents a consumption of net assets that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditu re) until then. The City reports deferred outflows related to pensions and OPEB which are the result of the implementation of GASB Statement Nos. 68 and 75.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to future periods and so will not be recognized as an i nflow of resources (revenue) until that time. The City reported the following in this category:

1. Unavailable revenues (which include revenues, notes, and lon g-term receivables) measured under the modified accrual basis of accounting reported in governmental funds. These am ounts are deferred and will be r ecognized as an inflow of resources in the period that the amounts become available.

2. Changes in the net pension li ability not included in pension expense.

3. Changes in the net other pos temployment benefits liability not included in OPEB expense.

4. Lease related deferrals

47 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

i. Inventories

Proprietary fund inventories are valued at weighted-average cos t and consist of expendable supplies and repair par ts. The cost of such inventor ies is recorded as expenditures/expenses when consumed rather than when purchased.

j. Interfund Transactions

As a general rule, interfund tr ansactions have been eliminated from the government-wide financial statements. Exceptions to this rule are payments in-lieu or charges for current service between the City’s enterprise activities and the City’s governmental activities. Elimination of these transactions woul d distort the direct costs and program revenues for the various functions. Certain e liminations have been made regarding interfund activities, payables, and receiva bles. All internal balances in the Statement of Net Position have been eliminated except those representing balances between t he governmental activities and t he business-type activities, which are presented as internal balances and elimin ated in the total primary government column.

Numerous transactions occur between funds of the City resulting in transfers and amounts due to or from other fu nds. Amounts due to or from are the current (due within one year) portion of monies that are to be paid or to be received from other funds.

k. Long-Term Obligations

In the government-wide and proprietary funds financial statemen ts, long-term obligations are recorded as liabilities in the applicable gover nmental activities, business-type activities, or proprietary fund-type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the debt. In the governmental fund financial stat ements, bond discounts and prem iums are recognized as another financing source or use. Issuance costs a re recorded as a current year debt service expenditure.

l. Employee Compensated Absences

The City records the cost of all accumulated and unused leave time (vacation, sick, and comp) as a liability when earned in the government-wide and proprietary funds financial statements. In the governmental funds financial statements these amounts are recorded as expenditures when due and payable.

48 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

m. Property Tax Revenue

Property tax in California is levied according to Article 13-A of the California Constitution. The basic levy is a countywide-levy of one percent of total assessed valuation and is allocated to county governments, school districts, cities and special districts. Additional levies r equire two-thirds approval by vot ers and are allocated directly to the specific government.

In the government-wide financial statements, property tax is recorded when earned, regardless of when levied, due, or received. City property tax revenues are recognized when levied in the governmental funds to the extent that they result in current receivables collectible within 60 days after year-end.

The County acts as a collecti on agent for property tax for all of the local governmental units. Property taxes are normally collected twice per year. The property tax calendar is as follows:

 Lien Date, January 1 - Prior Fiscal Year
 Levy Date, July 1 - Levy Fiscal Year
 Due Date, First Installment - November 1
 Due Date, Second Installment - February 1
 Delinquent Date, First Installment - December 10
 Delinquent Date, Second Installment - April 10

49 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

n. Redevelopment Property Tax Trust Funds

Under ABX1 26, revenues that were previously distributed to red evelopment agencies (prior to their dissolution) in the form of property t ax increment will no longer be received. Instead, revenues are deposited by County Auditors into Redevelopment Property Tax Trust Funds (RPTTF) created in the County Treasury for each Successor Agency. The County Auditor administers the R PTTF and disburses twice annually from this fund pass-through payments to affected taxing entities, an amount equal to the total of obligation payments that are required to be paid from tax increment as denoted on the Recognized Obligation Payment Schedules (ROPS) to Recognized Ob ligation Retirement Funds (ROR F) established in the treasury of the Successor Agencies, and vari ous allowed administrative fees and allowances. Any remaining balance is th en distributed by the County Auditor back to affected taxing entities under a prescribed method that accounts for pass-through payments.

The calendar for distribution of RPTTF funds is as follows:

 Annual ROPS submission due to D epartment of Finance, February 1  Distribution of RPTTF to Successor Agencies for the July-December ROPS period, June 1
 Distribution of RPTTF to Successor Agencies for the January-Ju ne ROPS period, January 2

o. Cash Flow Statements

For purposes of the Statement of Cash Flows, the Proprietary Fu nds consider all cash and investments to be cash equivalents, as these funds par ticipate in the citywide cash and investment pool.

p. Estimates

The accompanying financial statements require management to mak e estimates and assumptions that affect cer tain reported amounts and disclo sures. Actual results could differ from those estimates.

50 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES (Continued)

q. Pensions and OPEB

For purposes of measuring the net pension liability, net OPEB liability, related deferred outflows of resources a nd deferred inflows of resource s, pension/OPEB expense, information about the fi duciary net position of the Pl an and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the CalPERS’ Financial Offic e and the City’s Defined Benefit Pension Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due an d payable in accordance with the benefit terms. Investments are reported at fair value.

GASB Statement Nos. 68 and 75 require reported results to perta in to liability and asset information within certain defined timeframes. For this r eport, the following timeframes are used.

Supplemental
Employee
Retirement Plan
CalPERS
Pension Plans
Other
Post-Employment
Benefit Plan
Valuation Date (VD) June 30, 2021 June 30, 2020 June 30, 2021 Measurement Date (MD) June 30, 2022 June 30, 2021 June 30, 2021 Measurement Period (MP) July 1, 2021 to
June 30, 2022
July 1, 2020 to
June 30, 2021
July 1, 2020 to
June 30, 2021
51 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

r. Fair Value Measurements

Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy t hat prioritizes the inputs to valuation techniques used to measure fair value. The hi erarchy gives the highest pri ority to unadjusted quoted prices in active markets for identical assets or liabili ties (Level 1 measurements) and the lowest pri ority to unobservable inputs (L evel 3 measurements). The three levels of fair value hierarchy are described as follows:

Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:
 Quoted prices for similar assets or liabilities in active markets;  Quoted prices for identical or similar assets or liabilities i n markets that are inactive;
 Inputs other than quoted prices that are observable for the asset or liability;  Inputs that are derived principa lly from or corroborated by observable market data by correlation or other means.

Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Thes e unobservable inputs reflect t he City’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservabl e inputs are developed based on the best information available in the circum stances and may include the City’s own data.

52 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS

Investments Authorized by the California Government Code and the City’s Investment Policy

The table below identifies the investment types that are author ized for the City by the California Government Code (or the City’s investment policy, wh ere more restrictive).

The table also identifies certain provisions of the California Government Code Section 53601 (or the City’s investment policy, where more restrictive) that address interest rate risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the pr ovisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

INVESTMENT TYPE MAXIMUM MATURITY MAXIMUM SPECIFIED % OF PORTFOLIO / MAXIMUM PER ISSUER
MINIMUM RATING

REQUIREMENTS
Bankers' Acceptances 180 days 25% (up to 40% with Council approval) / 10% A1/P1, "A" Rating
Negotiable Certificates of Deposit 3 years (Up to 5 years with Council approval) 30% / 10% A1/P1, "A" Rating
Commercial Paper 270 days 25% / 10% A1, "A" Rating
State Obligations‐‐ CA And Others 5 years None / 10% "A" Rating City/Local Agency of CA Obligations 5 years None / 10% "A" Rating U.S. Treasury Obligations 5 years None None
U.S. Government Agency Obligations 5 years None None
Supranationals: IBRD, IFC, IDB 5 years 10% "AA" Rating
Repurchase Agreements 3 Months None None
Reverse Repurchase Agreements 92 days 20% of the base value of the portfolio.

Requires City Council Approval None
Medium‐Term Corporate Notes 5 years 30% / 10% "A" Rating Non‐negotiable Certificates of Deposit 3 years None / 10% A1/P1, "A" Rating Money Market Mutual Funds 60 days 15% / 10% "AAA" Rating Local Agency Investment Fund (LAIF) N/A Up to $75,000,000 None Orange County Investment Pool (OCIP) N/A Up to $75,000,000 None Joint Powers Authority N/A None / $20,000,000 None
53 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTME NTS (Continued)

Investments Authorized by Debt Agreements

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 below identifies the investment types that are authorized for investments held by a bond trustee, but bond indentures do allow for other forms of investments if approved in writing by the bond i nsurer that are not identified below. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk.

Authorized Investment Type Maximum Maturity
Maximum
Percentage
of Portfolio
Maximum
Investment
in One Issuer
U.S. Treasury Securities 5 Years No Limit No Limit
Federal Agency Securities 5 Years No Limit No Limit
Bankers' Acceptances 180 Days No Limit No Limit
Time CDs 360 Days No Limit No Limit
Negotiable CDs 360 Days No Limit No Limit
LAIF N/A No Limit No Limit
Commercial Paper 270 Days No Limit No Limit
Municipal Bonds from Any State Life of Bond No Limit No Limit Money Market Funds N/A No Limit No Limit
Investment Agreements Life of Bond No Limit No Limit
Corporate Bonds 5 Years No Limit No Limit
California Asset Mgmt. Program N/A No Limit No Limit
Forward Purchase/Delivery Agreements Life of Bond No Limit No Limit 54 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTME NTS (Continued)

Investment of the Pension Trust Fund – Retirement Supplemental Fund

The Investment Policy Statement (IPS) of the Huntington Beach Supplemental Pension Trust is established in accordance with the assignment of fiduciary duties by the State of California Constitution and State and Local Government Codes. The purpose of the Investment Policy is to set guidelines for a prudent investment -making process. The policy was established with the assumption that the longer-term nature of the portfolio provides for higher risk tolerance and short-term volatility, but more potential for capital growth. The Investment Manager will be responsible for carrying out the activities related to the portfolio in accordance with the IPS to meet the goals of an agreed upon risk/return profile, and in accordance with the mix of parameters outlined below:

Authorized Investment Type Minimum
Allocation
Target Asset
Allocation
Maximum
Allocation
Cash or Equivalents 0% 0% 10%
Money Market 0% 0% 10%
Fixed Income 30% 40% 50%
Intermediate Bond 30% 40% 50%
Short‐Term Bond 0% 0% 10%
Long‐Term Bond 0% 0% 10%
High Yield Bond 0% 0% 10%
Inflation Protected Bond 0% 0% 10%
World Bond 0% 0% 10%
Domestic Equity 17% 27% 37%
Large Cap Equity (Value, Blend, Growth) 8% 18% 28%
Mid Cap Equity (Value, Blend, Growth) 0% 6% 16%
Small Cap Equity (Value, Blend, Growth) 0% 3% 13%
Foreign Equity 11% 21% 31%
Foreign Large Equity (Value, Blend, Growth) 7% 17% 27%
Foreign Sm / Mid Equity (Value, Growth) 0% 0% 10%
Emerging Markets 0% 4% 14%
Real Estate 0% 10% 20%
Real Estate 0% 10% 20%
Commodities 0% 2% 12%
Natural Resources 0% 2% 12%
55 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTME NTS (Continued)

At year-end, the City had the fo llowing deposits and investment s (amounts in thousands):

Disclosures Relating to Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value is to changes in market interest rates. One of the ways that the City manages its expos ure to interest rate risk i s 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 n eeded for operations.

Information about the sensitivity of the fair values of the Cit y’s investments, including investments held by bond trustees , to market interest rate fluc tuations is provided by the following table that shows th e distribution of the City’s i nvestments by maturity (in thousands).

INVESTMENTS: Fair Value
Less than
1 1 to 3 3 to 5
More than
5 Total
US Treasuries 74,943$ 2,975$ 47,848 $ 24,120$ - $ 74,943 $ US Agency Securities* 140,790 35,962 51,389 53,439 - 140,790 Mutual Funds 58,101 58,101 - - - 58,101 Commercial Paper 4,967 4,967 - - - 4,967 Money Market Funds 2,007 2,007 - - - 2,007 Medium Term Notes - IADB 33,552 5,965 13,831 13,756 - 33,552 Corporate Bonds 26,063 7,992 18,071 - - 26,063 Local Agency Investment Fund 28,417 28,417 - - - 28,417 Orange County Investment Pool 10,447 10,447 - - - 10,447 California Asset Mgmt Program 2,776 2,776 - - - 2,776 PARS Pension Rate Stabilization Program 12,427 1 2,427 - - - 12,427 Total Investments 394,490$ 172,036$ 131,139$ 91,315$ -$ 394,490 Total Deposits 26,011
Total Deposits and Investments 420,501$
* Security is callable, but classified above according to original maturity date Investment Maturities (In Years)
Primary Government:

Cash and Investments 334,584$
Cash and Investments with Fiscal Agent 9,838
Total Primary Government 344,422
Fiduciary Funds:

Cash and Investments 11,225
Cash and Investments with Fiscal Agent 64,854
Total Fiduciary Funds 76,079
Total Deposits and Investments 420,501 $
56 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTME NTS (Continued)

Disclosures Relating 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 assign ment of a rating by a nationally recognized statistical rating organization. Presented below are the minimum ratings required by, where applicable, the California Governmen t Code or the City’s investment policy, or debt agreements, and the actual rating as of the year-end for each investment type (in thousands):

Concentration of Credit Risk

The City’s investment policy lim its investments in any one issu er, except for U.S.

Treasury Securities, U.S. Gover nment Agencies and the Local Age ncy Investment Fund, to no more than 10% of the portfolio. In addition, no mor e than 50% can be invested in a single security type or with a single financial institution and every security type has a specific limit. This is in addition to the limits placed on investments by State law. Investments in any one iss uer (other than U.S. Treasury Se curities, external investment pools, or Money Market Funds) that represent 5% or more of the City’s total investments are as follows (in thousands):

Remaining as of Year End
INVESTMENTS: Minimum
Legal Rating Total AAA AA A BBB+ Not Rated
US Treasuries N/A 74,943 $ 74,943$ - $ - $ - $ - $ US Agency Securities* N/A 140,790 140,790 - - - - Mutual Funds N/A 58,101 - - - - 58,101 Commercial Paper A 4,967 - - 4,967 - - Money Market Funds AAA 2,007 2,007 - - - - Medium Term Notes - IADB AA 33,552 33,552 - - - - Corporate Bonds A 26,063 - 6,992 16,165 2,906 - Local Agency Investment Fund N/A 28,417 - - - - 28,417 Orange County Investment Pool N/A 10,447 - - - - 10,447 California Asset Mgmt Program N/A 2,776 2,776 - - - - PARS Pension Rate Stabilization Program N/A 12,427 - - - - 12,427 Total Investments 394,490$ 254,068$ 6,992$ 21,132$ 2,906$ 109,392 $ Note: All US Agencies are rated AAA by Moody's and AA by S&P Fair Value
Issuer Investment Type Amount
Federal Home Loan Bank U.S. Agency Securities 112,472 $ Intl Bk Recon & Development Medium Term Notes 18,596 $
US Treasury Notes Obligations of the United States Treasury 74,94 3$ 57 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS (Continued)

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 invest ments is the risk that, in the event of the failure of the counterparty (e.g., broker-deale r) to a transaction, a governme nt 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, oth er than the following provision s for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulat ed under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110 percent 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 percent of the secured public deposits.

As of June 30, 2022, the City’s deposits with financial institutions were covered by FDIC up to $250,000, and the remaining amounts were collateralized a s described above.

None of the City’s investments were subject to custodial credit risk. Per the Investment Policy’s statement, the City of H untington Beach is the registered owner of all investments in the portfolio.

Investment in State Investment Pool

The City is a voluntary participant in LAIF, which is regulated by California Government Code Section 16429 under the oversi ght of the Treasurer of the State of California.

The fair value of the City’s inve stment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on th e accounting records maintained by LAIF, which are recorded on an amortized cost bas is. Currently, LAIF does not have an investment rating.

58 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS (Continued)

Investment in the Orange County Investment Pool

The City is a participant in t he County Treasurer’s Orange Coun ty Investment Pool (OCIP). The OCIP is an external investment pool, is not rated and is not registered with the Securities Exchange Commission (SEC). The County Treasury O versight Committee conducts OCIP oversight. Cash on deposit in the OCIP at June 30, 2022 is stated at fair value. The OCIP v alues participant shares on an amortized cost basis during the year and adjusts to fair value at year-end. For further information regarding the OCIP, refer to the County of Orange Annual Comprehensive Financial Report.

Investment in California Asset Management Program Pool

The City is a voluntary participant in the California Asset Man agement Program (CAMP). CAMP is an investment pool offered by the California As set Management Trust (the Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of th e California Joint Exercise of Powers Act (California Government Code Sections 650 0 et seq., or the “Act”) for the purpose of exercis ing the common power of its Pa rticipants to invest certain proceeds of debt issues and surplus funds. The Trust’s activities are directed by a Board of Trustees, all of whom are employees of the Califo rnia public agencies which are participants in the Tr ust. The City reports investmen ts in CAMP at the fair value amounts provided by CAMP, w hich is the same as the value of the pool share.

The Pool is managed to maintain a dollar-weighted average portf olio maturity of 60 days or less and seeks to maintain a constant net asset value (NAV) per share of $1.00.

The Pool invests in obligations of the United States Government and its agencies, high- quality, short-term debt obligations of U.S. companies and financial institutions. The Pool is a permitted investment for all local agencies under California Government Code Section 53601(p). CAMP is rated AAAm by Standard & Poor's.

Investment in Public Agency Reti rement Services Pension Rate St abilization Program

The City established a Section 115 pension trust account within t h e P u b l i c A g e n c y Retirement Services Pension Rate Stabilization Program (PARS PRSP) to hold assets that are legally restricted for use in administering the City’s defined benefit pension plan. The pension trust fund’s s pecific cash and investments are managed by a third- party portfolio manager under guidelines approved by the City.

59 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS (Continued)

Fair Value Measurement

The City categorizes its fair value investments within the fair value hierarchy established by generally accepted accounting principles. The Ci ty has the following recurring fair value measurements as of June 30, 2022 (in thousands):

3. OTHER RECEIVABLES

A summary of Other Receivables as of June 30, 2022 is as follows (in thousands):

INVESTMENTS: Level 1 Level 2 Level 3 Total
U.S. Treasuries -$ 74,943 $ - $ $ 74,943 U.S. Agency Securities - 140,790 - 140,790 Commercial Paper - 4,967 - 4,967 Medium Term Notes - IADB - 33,552 - 33,552 Corporate Bonds - 26,063 - 26,063 Total Investments -$ 280,315$ - $ 280,315$ Fair Value Hierarchy
FY2021-22
Description Amount
Developer Loans Receivable 39,316 $
Emerald Cove Loan Receivable 6,569
Housing Rehabilitation Loans Receivable 2,201
First Time Homebuyers Receivable 1,630
Emergency Medical Fee Receivable 2,214
CDBG Program Receivable 554
Affordable Housing In-Lieu Receivable 152
Other Grants Receivable 3,347
Other Receivable 10,493
Total Other Receivables 66,476
Allowance for Uncollectible Developer Loans (39,316)
Net Other Receivables on Governmental Fund Financial Statements 27,160$ Other Receivables Reconciliation
Net Receivable on Government-wide Financial Statements 43,348$ Taxes Receivable on Governmental Fund Financial Statements (16,086) Other Receivables on Internal Service Fund (102)
Net Other Receivables on Governmental Fund Financial Statements 27,160$ 60 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

3. OTHER RECEIVABLES (Continued)

a. Developer Loans

Loans made to developers to construct or rehabilitate certain f acilities under deferred loan agreements total $39,316,000 at year-end. These loans are allowed until a future event occurs. Loans to the Low and Moderate Income Housing Asset Fund total $20,207,000, loans made under the Home Program total $14,167,000 and loans made under the Affordabl e Housing In-Lieu Program tot al $4,942,000.

Interest rates on these loans range from 0% to 10%. The allowance for uncollectible developer loans is $39,316,000 due to the terms of the agreemen t to forgive the balance of loans after a specified time period if all the conditions of loan forgiveness are met.

b. Emerald Cove Loan

On June 15, 2010, the former Redevelopment Agency loaned Emeral d Cove, LP $8,000,000 to acquire and rehabilitate Emerald Cove Senior Apartments. The loan has an interest rate of 3% and is to be repaid annually from re sidual receipts over 60 years. The loan was transferred to the Low and Moderate Income Housing Asset Fund in Fiscal Year 2011/12. The loan balance as of June 30, 2022 is $6,569,000.

c. Housing Rehabilitation Loans

Loans made to qualified homeowners and landlords in the City of Huntington Beach to rehabilitate certain single-family homes or multifamily rent al housing under deferred loan agreements total $2,201,000 at year-end. These lo ans are deferred until a future event occurs. The interest rates on these loans range from 0% to 6%.

d. Deferred Loans – First Time Homebuyers and Down Payment Assistance

Loans made for down payment assistance of qualified first time homebuyers under deferred loan agreements total $1,630,000 at year-end. These lo ans are deferred until a future event occurs.

61 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

4. UNEARNED REVENUE

Governmental and enterprise f unds defer revenue recognition in connection with resources that have been received as of year-end, but not yet e arned (unearned revenue). The amounts are as follows (in thousands):

5. UNAVAILABLE REVENUE

Certain revenues in governmental funds are considered unavailab le revenue until received. All revenues including property and sales tax are rec ognized in the year earned or levied in the governm ent-wide financia l statements, b ut are recorded as unavailable revenue in the fund financial statements to the extent they are not collected within 60 days after year-end. The amounts are as follows (in thousands):

Deferred Loans to developers and qualified individuals for housing rehabilitation and to first time homebuyers are discussed in Note 3.

General Fund
Grants Special
Revenue LMIHAF
Other
Governmental
Funds
Total
Unavailable
Revenue
Grants -$ 5,815$ -$ -$ 5,815$ Deferred Loans:

Emerald Cove - - 6,569 - 6,569 Housing Rehabilitation - 2,201 - - 2,201 First Time Homebuyers - - 1,630 - 1,630 Other Unavailable Revenue 1,431 - - 6 5 1,496 Total 1,431$ 8,016$ 8,199$ 65$ 17,711$ General Fund
Grants
Special
Revenue
Total
Unearned
Revenue
Community Services Unearned Revenue (Classes) 1,217$ -$ 1,217$ Grants - 29,940 2 9,940 Total $ 1,217 $ 29,940 $ 31,157 62 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL

a. Summary

Net Pension Liability/(Asset)

Net Pension Liability/(Asset) is reported in the accompanying s tatement of net position as follows:

Deferred Outflows of Resources

Deferred Outflows of Resources are reported in the accompanying statement of net position as follows:

Deferred Inflows of Resources

Deferred Inflows of Resources are reported in the accompanying statement of net position as follows:

Net Pension
Liability/(Asset)
CalPERS Miscellaneous Plan (51,599)$
CalPERS Safety Plan (57,268)
Supplemental Plan (Note 7) 15,152
Total (93,715)$
Change to Net Deferred employer
Difference Between p ension contributions
Projected and Actual made after
Investment Earnings measurement date Total
CalPERS Miscellaneous Plan -$ 6,951$ 6,951$ CalPERS Safety Plan - 13,578 13,578 Supplemental Plan (Note 7) 5,633 - 5,633 Total 5,633$ 20,529$ 2 6,162$ Change to Net
Difference Between Differences between
Projected and Actual Expected and
Investment Earnings Actual Experience Total
CalPERS Miscellaneous Plan 52,113$ 1,534$ 53,647$ CalPERS Safety Plan 63,641 5,468 69,109 Total 115,754$ 7 ,002$ 122,756$ 63 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

Pension expenses for the measur ement period ending June 30, 202 1 (the measurement date), ar e included in the accompanying financial s tatements as follows:

b. Plan Description

Substantially all City employees working the equivalent of 1,000 hours per fiscal year are eligible to participate in the Safety Plan and Miscell aneous Plan Agent multiple-employer defined benefit plans administered by Califor nia Public Employees Retirement System (CalP ERS), which acts as a common i nvestment and administrative agent for its participating member employers. Benefit Provisions under the Plans are established by State statutes within the Pu blic Employee’s Retirement Law. Following the passage of AB340, Public Employee s’ Pension Reform Act (PEPRA) by the Califor nia Legislature, employees hired on or after January 1, 2013, who were not previously enrolled in the PERS system elsewhere, or who have had a break in service of at least six months are required to be enrolled in this retirement program which provides a benefit level that is lower than the benefits provided for CalPERS em ployees that do not meet the PE PRA qualifications previously described. CalPERS issues publicly available reports that include a full description of the pension plans regarding benef it provisions, assumptions and membership information that can be found on the CalPERS website. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office – 400 P Street, Sacramento, CA 95814.

Net Pension
Expense/(Income)
CalPERS Miscellaneous Plan (7,825)$
CalPERS Safety Plan (2,508)
Supplemental Plan (Note 7) 880
Total (9,453) $
64 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

Benefits Provided

CalPERS provides retirement and disability benefits, annual cos t-of-living adjustments, and death benefits to plan members and beneficiari es. Benefits are based on years of credited service, equal to one year of full t ime employment.

Benefit provisions and all other r equirements are established by State statute and may be amended by city contracts with employee bargaining groups.

Participant is eligible for non-industrial disability retirement if becomes disabled and has at least 5 years of credited service. There is no special a ge 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. The City provides industrial disability retirement benefit to safety emp loyees. The industrial disability retirement benefit is a monthly allowance equal to 5 0 percent of final compensation.

An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The employee must 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 benef it instead of this basic death benefit. The basic deat h benefit is a lump sum in t he amount of the employee's accumulated contributions, where interest is current ly 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 month s' salary. For purposes of this benefit, one month's salary is defined as the member's 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 surv ivor allowances will be annually adjusted on a compound basis by 2 percent.

65 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

The Plans’ provisions and benefits in effect at June 30, 2022 a re summarized as follows:

Classic PEPRA
Hire date Prior to January 1, 2013 January 1, 2013 and after Benefit formula 2.5% @ 55 2% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age minimum 50 years minimum 52 years
Monthly benefits, as a % of eligible compensation

2.0% - 2.5%, 50 years - 63+
years, respectively

1.0% - 2.5%, 52 years - 67+
years, respectively
Required employee contribution rates 8.000% 6.250%
Required employer contribution rates
July 1, 2021 - June 30, 2022 41.790% 41.790%
Classic PEPRA
Hire date Prior to January 1, 2013 January 1, 2013 and after Benefit formula 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age minimum 50 years minimum 52 years
Monthly benefits, as a % of eligible compensation 3%, 50+ years

2.0% - 2.7%, 50 years - 57+
years, respectively
Required employee contribution rates 9.000% 11.75%/13.00% (Fire PEPRA) Required employer contribution rates
July 1, 2021 - June 30, 2022 64.400% 64.400%
Miscellaneous Agent Plans
Safety Agent Plans
66 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

c. Contributions

Section 20814(c) of the Californi a Public Employees’ Retirement L a w ( “ P E R L ” ) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions ar e determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability.

The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the measurement period ended June 30, 2021, misce llaneous participants under the Classic and PEPRA plans are required to contribute 8% and 6.25% of their an nual covered salary, respectively. Safety participants under the Classic and PEPRA plans are required to contribute 9% and 11.75% of their annual covered sa lary, respectively.

Fire PEPRA participants are now required to contribute 13%. In addition, the City is required to make employer contributions at the actuarially dete rmined rates of

41.790% and 64.400% for the miscellaneous and safety plans, respectively, for the period July 1, 2021 through June 30, 2022.

At June 30, 2020, the valuation date, the following employees were covered by the benefit terms for each Plan:

Miscellaneous Safety
Active members 600 380
Transferred members 446 72
Terminated members 350 57
Retired members and beneficiaries 1024 622
67 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

d. Net Pension Asset

The City’s net pension asset is measured as the total pension l iability, less the pension plan’s fiduciary net position. The net pension asset of the Plan is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liabi lity is illustrated below:

Actuarial Assumptions – The total pension liability in the June 30, 2020 actuarial valuation, rolled forward to June 30, 2021 using standard update procedures, were determined using the following actuarial assumptions:

Actuarial Methods and Assumptions Used to Determine Total Pension Liability Actuarial Cost Method Entry Age Normal in accordance with the requirement of GASB Statement No. 68 Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Investment Rate of Return
Mortality Rate Table*
Post Retirement Benefit Increase
*The mortality table used was developed based on CalPERS' specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and projected mortality improvement using Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.

7.15% Net of Pension Plan Investment and Administrative Expenses; includ es Inflation
Derived using CalPERS’ Membership Data for all Funds.

The lesser of contract COLA or 2.50% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.50% thereafter.

7.15%

2.50%
Varies by Entry Age and Service
68 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

Long-term Expected Rate of Return – The long-term expected rate of return on pension plan investments was determined using a building-block method in which 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, CalPERS t ook into account both short-term and long-term mark et return expectations as wel l as the expected pension fund cash flows. Using hi storical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ year s) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of ret urn was set by calculating the rounded single equi valent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The expected real rates of return by asset class are as follows:

Current Target Real Return Real Return
Asset Class1
Allocation Years 1-102 Years 11+3
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Estate 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
1 In the System's ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
2 An expected inflation of 2.00% used for this period
3 An expected inflation of 2.92% used for this period.
69 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

Discount Rate – The discount rate used to m easure the total pension liabilit y at June 30, 2021 was 7.15 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from e mployers will be made at statutorily required rates, actuarially determined. Bas ed on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long- term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Subsequent Events – On July 12, 2021, CalPERS r eported a preliminary 21.3% net return on investments for Fiscal Year 2020/21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could ma ke its final decision on the a sset allocation in November 2021.

On November 17, 2021, the boar d adopted a new strategic asset a llocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative ex pense assumption support a dis count rate of

6.90% (net of investment expense but without a reduction for ad ministrative expense) for financial reporting purposes. This includes a redu ction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Rev iew of Actuarial Assumptions. T his study also recommended modifications to retirement rates, termination rate s, mortality rates and rates of salary increases that were adopted by the board. T hese new assumptions will be reflected in the GASB 68 accounting valuati on reports for the June 30, 2022, measurement date.

70 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

e. Changes in the Net Pension Liability/(Asset)

The following table shows the changes in net pension liability/ (asset) recognized over the measurement period:

Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability (Asset)
Balance at June 30, 2020 (Valuation Date) 604,027 $ 443,586 $ 160,441 $ Changes in the year:

Service cost 8,005 - 8,005 Interest on the total pension liabilities 42,217 - 42,217 Differences between expected and actual experience (891) - (891) Benefit payments, including refunds of members contributions (33 ,392) (33,392) - Contributions - employer - 150,917 (150,917) Contributions - employee - 3,450 (3,450) Net investment income - 107,447 (107,447) Administrative expenses - (443) 443 Net changes 15,939 227,979 (212,040) Balance at June 30, 2021 (Measurement Date) 619,966 $ 671,565$ (51,599)$ Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability (Asset)
Balance at June 30, 2020 (Valuation Date) 804,181$ 532,653$ 271,528$ Changes in the year:

Service cost 13,386 - 13,386 Interest on the total pension liabilities 56,114 - 56,114 Differences between expected and actual experience (3,882) - (3,882) Benefit payments, including refunds of members contributions (44,362) (44,362) - Contributions - employer - 257,381 (257,381) Contributions - employee - 4,395 (4,395) Net investment income - 133,170 (133,170) Administrative expenses - (532) 532 Net changes 21,256 350,052 (328,796) Balance at June 30, 2021 (Measurement Date) 825,437 $ 882,705$ (57,268)$ Miscellaneous Plan
Safety Plan
71 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

Sensitivity of the Net Pension Liabili ty/(Asset) to Changes in the Discount Rate - The following presents the City’s net pension liability, ca lculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rat e that is one percentage point l ower or one percentage point higher than the current rate:

Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

Pension Income and Deferred Outflows/Inflows of Resources Related to Pensions

As of the start of the measurement period (July 1, 2020), the n et pension liability was $160,441,000 for the Miscellaneous Plan and $271,528,000 fo r the Safety Plan. For the measurement period ending June 30, 2021 (the measurement date), the City earned pension income of $7,825,000 and $2,508,000 for t h e Miscellaneous and Safety Plans, respectively.

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 amor tized straight-line over the av erage expected remaining service lives of all members that are provided with b enefits (active, inactive and retired) as of the beginning of the measurement period.

Discount Rate - 1% Current Discount Discount Rate + 1%
(6.15%) Rate (7.15%) (8.15%)
Miscellaneous Plan 26,963$ (51,599) $ (116,560) $ Safety Plan 49,752 (57,268) (145,461) Aggregate Total 76,715$ (108,867)$ (262,021)$ Plan's Aggregate Net Pension Liability/(Asset)
72 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

The Expected Average Remaining Service Lifetime (“EARSL”) is ca lculated by dividing the total future service years of active employees by the total number of plan participants (active, inactive, and retired) in the risk p ool. For the 2020-21 measurement period, the EARSL for each plan is as follows:

At June 30, 2022 the City reported deferred outflows of resourc es and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Safety
Expected Average Remaining Service Lifetime 2.4 3.9 Miscellaneous Plan
Deferred outflows Deferred inflows
of Resources of Resources
Difference between projected and actual earning on
pension plan investments - $ (52,113)$ Difference between expected and actual experience - (1,534) Contributions made subsequent to the
measurement date 6,951 -
Total 6,951$ (53,647)$
Safety Plan
Deferred outflows Deferred inflows
of Resources of Resources
Difference between projected and actual earning on
pension plan investments - $ (63,641)$ Difference between expected and actual experience - (5,468) Contributions made subsequent to the
measurement date 13,578 -
Total 13,578$ (69,109)$
73 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

6. RETIREMENT PLAN – NORMAL (Continued)

For the Miscellaneous Plan and Safety Plan, $6,951,000 and $13,578,000, respectively, was reported as deferred outflows of resources re lated to pensions resulting from City’s contribut ions subsequent to the measureme nt date will be recognized as a reduction of the net pension liability in the y ear ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

7. RETIREMENT PLAN – SUPPLEMENTAL

a. Plan Description and Benefits

The City administers a supplemental single-employer defined ben efit retirement plan (Supplemental Plan) for a ll employees hired prior to 1997 (exact dates are different for various associations). The Plan is governed by a three-member Supplemental Employee Retirement Plan and Trust Board consistin g of the City Treasurer, Chief Financial Officer, and the City Manager, or his/her designee. The Board has the authority, under the terms of the Trust agreement , to control and manage the operation and administr ation of the Plan. Benefit pr ovisions are established and may be amended through negotiations between the City and employee bargaining associations during each bargaining period, which are then approved through resolutions of the City Council. In Fiscal Yea r 2008/09, the City established the Supplemental Emp loyee Retirement Plan and Trust , and transferred $24,918,000 to an irrevocable trust from the prefun ded amounts. The plan and trust are reported as a pension trust fund in the City’s financial statements on a full accrual basis.

Measurement Periods
Ended June 30, Miscellaneous Safety
2022 (14,571)$ (18,533)$
2023 (12,266) (16,911)
2024 (12,508) (16,195)
2025 (14,302) (17,470)
(53,647)$ (69,109)$
Deferred Outflows/ (Inflows) of Resources
74 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

The Supplemental Plan will pay the retiree an additional amount to his or her CalPERS retirement benefit for life. In order to be eligible for the benefit, the retiree must retire from the City. The amount that is computed as a factor of an employee’s normal retirement allowance is computed at retirement and remains constant for his or her life. This benefit is payable by the City for the durati on of the life of the member, and shall cease upon the employee’s death. As of June 30, 2021, the date of the Plan’s most recent actuarial valuation, the average monthly benefit received by inactive plan members and beneficiaries receiving benefits i s $626. Effective in 1998 (exact dates are different for various associations), new City employees are ineligible to participate in the Supplemental Employee Retirement Plan.

Employees Covered: At June 30, 2022, the measurement date, the following employees were covered by the benefit terms for the Plan:

c. Employer Contributions

The City’s policy is to make required contributions as determin ed by the Supplemental Plan’s actuary. T he required contributions were de termined as part of the June 30, 2019 actuarial va luation. The City is required to contribute the actuarially determined rate of 2.9% of total payroll for all permanent employees for the year ended June 30, 2022. There are no employee contributio ns required for the plan. Survivor and terminati on benefits are not included in t h e p l a n .

Administrative costs of this plan are financed through investment earnings.

For the year ended June 30, 2022, the contributions were (in t housands):

Inactive employees receiving benefits 742
Active employees 59
Total 801
Contributions - employer 6,006$
75 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

c. Investments

Investments of the Supplemental Plan are held separately from those of other City funds by investment custodians. The Supplemental Employee Retirement Plan and Trust Board is responsible for supervising all investments. Changes to the Investment Policy require approval by the Board. The policy remained the same as last fiscal year. The most recent policy was reviewed in June 2022 with an effective date of July 1, 2022. Please refer to Note 2 for a detailed des cription of the Supplemental Plan’s Investment P o l i c y . T he ma jo r a s s e t c l a s s a llocation for the Supplemental Plan as of June 30, 2022 is listed below:

Quoted market prices have been used to value investments as of June 30, 2022.

These investments are held by the Trust or by an agent in the T rust’s name. A portion of these investments is subject to credit risk (including custodial credit risk and concentrations of credit risk), interest rate risk and/or foreign currency risk. The Governmental Accounting Standards Board (GASB) Statement No. 40 requires the disclosure of such risk. Please see below for a list of investm ents held in any one organization that represents five percent or more of the Plan’s investment portfolio at June 30, 2022:

Vanguard Ftse Developed Etf 11.96%
Vanguard Equity Income Fund Admiral Shares 7.97%
Parnassus Core Equity Fund 7.41%
Fidelity US Bond Index 7.16%
Baird Aggregate Bond Fd Instl 7.16%
Doubleline Total Ret Bd I 7.14%
Pgim Return Bond CI R6 7.13%
Tiaa Cref 7.09%
Harbor Capital Appreciation Inst 6.76%
Ishares Core US Reit Etf 5.90%
Federated Inst High Yield Bond Fund 5.04%
Concentration of Investments Equaling or Exceeding 5%
Asset Class Strategic Allocation
Allocation as of
June 30,2022
Long-Term
Expected Rate of
Return
Fixed Income 40.00% 40.72% 1.55%
Equities 27.00% 51.86% 5.35%
Real Estate 10.00% 5.90% 0.00%
Commodities 2.00% 0.00% 0.00%
Cash and Equivalents 0.00% 1.52% 0.45%
Total 79.00% 100.00%
76 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

All Supplemental Plan investments are reflected in the schedule included in Section c of the Note, with the excepti on of amounts held in the City’s investment pool account. The City maintains an investment pool account for City funds. Monthly contributions for the Plan are he ld in the City’s investment po ol account and are used to pay recurring expenditures . Refer to Note 2 for a desc ription of the City’s investments.

For the Fiscal Year ended June 30, 2022, the annual money-weighted rate of return on the Plan’s investments, net of pension plan investment expenses, was -15.97%.

The money-weighted rat e of return expresses investment performa nce, net of investment expenses, adjusted for the changing amounts actually invested.

d. Net Pension Liability

The City’s net pension liability is measured as the total pensi on liability, less the pension plan’s fiduciary net position. The net pension liabilit y of the Plan is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update proc edures. A summary of principal assumptions and methods used to determine the City’s net pension liability is shown on the following page.

77 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

Actuarial Assumptions – The total pension liabilities in the June 30, 2021 actuarial valuations for the June 30, 2022 measurement date were determin ed using the following actuarial assumptions:

The changes in actuarial assumptions include the following:

All other actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial ex perience study for the period fro m 1997 to 2015, including updates to salary inc rease, mortality, and retirement rates. The future service retirement liabilities load increased from 15% to 23% to reflect recent experience of benefits being larger than anticipated.

e. Discount Rate & Sensitivity

The discount rate is used in the measurement of the Total Pensi on Liability. This rate considers the ability of the fund to meet benefit obligati ons in the future. To make this determination, employee contributions, benefit payments, expenses, and investment returns are projected into the future. The Plan Net Position (assets) in future years can then be determined and compared to its obligation to make benefit payments in those years. As long as assets are projected to be on hand in a future year, the assumed valuation discount is used. For this valuatio n, the discount rate is 5.50%, based on the inflation assumption of 2.50% and a long -term asset allocation of 70% equities and 30% fixed income. The geometric real rates of return were assumed to be 5.35% for equities and 1.55% for fixed income. The long-term expected rate of return is applied to all future projected benefit payments.

Actuarial Methods and Assumptions Used to Determine Total Pension Liability Actuarial Cost Method Entry Age Normal, Level Percentage of Payroll Actuarial Assumptions:

Discount Rate 5.50%
Inflation 2.50%
Salary Increases CalPERS 1997-2015 Experience Study plus 2.75% aggregate increase Investment Rate of Return 5.50% Net of Investment Expenses Mortality Rate Table
Retirement, Disability, Withdrawal CalPERS 1997-2015 Experience Study plus 23% load on future service retirement liability added to reflect recent benefits experience.

CalPERS 1997-2015 Experience Study, mortality projected fully generational with Scale MP-2021
78 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction for pension plan administrative expense. An investment return ex cluding administrative expenses would have been 5.50 percent.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investme nt expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, both short-term and long-term market return expectations were taken into account along with e xpected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their requir ed contributions on time and as scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) u sing a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flo ws as the one calculated using bo th short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the neares t one quarter of one percent.

79 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

Changes in the Net Pension Liability

The following table shows the changes in net pension liability recognized over the measurement period (in thousands):

Sensitivity of the Net Pension Liability to Changes in the Discount Rate - The following presents the City’s net pension liability, calculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

Total
Pension
Liability
Plan
Fiduciary
Net Position
Net Pension
Liability
Balance at June 30, 2021 76,769 $ 70,361 $ 6,408 $ Changes in the year:

Service cost 299 - 299
Interest on the total pension liabilities 3,897 - 3,897 Differences between expected and actual experience 492 - 492 Changes of Assumptions (1,638) - (1,638) Benefit payments, including refunds of members contributions (5, 668) (5,668) - Contributions - employer - 6,006 (6,006) Net investment income - (11,362) 11,362 Administrative expenses - (338) 338 Net changes (2,618) (11,362) 8,744
Balance at June 30, 2022 74,151 $ 58,999 $ 15,152 $ Supplemental Plan
Discount Rate -
1% (4.50%)
Current
Discount Rate
(5.50%)
Discount Rate +
1% (6.50%)
22,488$ 15,152 $ 8,904 $
Plan's Aggregate Net Pension Liability/(Asset)
(in thousands)
80 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

f. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions

For the year ended June 30, 2022, the City recognized pension expense in the amount of $880,000 for the Supplemental Plan.

At June 30, 2022, the City report ed deferred outflows of resour ces related to the supplemental pension plan from the following source (in thousands):

For the Supplemental Plan, $5, 633,000 was reported as deferred outflows of resources related to pensions w hich will be recognized in pensi on expense as follows (in thousands):

Deferred Outflows / (Inflows)
Year Ended June 30, of Resources
2023 1,103$
2024 914
2025 604
2026 3,012
5,633$
Deferred Outflows
of Resources
Difference between projected and actual earnings on
pension plan investments 5,633 $
81 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

8. OTHER POST EMPLOYMENT BENEFITS

a. Plan Description

The City administers the following two other post employment benefit (OPEB) plans:

Postemployment Medical Insurance
The City agreed, via contract, with each employee association t o provide postemployment medical insurance to retirees. These Other Poste mployment Benefits (OPEB) are based on years of service and are available to all retirees who meet all three of the following criteria:

 At the time of retirement, the employee is employed by the City.  At the time of retirement, the employee has a minimum of ten y ears of service credit or is granted a service connected disability retirement.  Following official separation from the City, CalPERS grants a retirement allowance.

The City’s obligation to provide the benefits to a retiree ceas es when either of the following occurs:

 During any period the retiree is eligible to receive health in surance at the expense of another employer; and/or
 The retiree becomes eligible to enroll automatically or voluntarily in Medicare.

The subsidy a retiree is entitled to receive is based on the retiree’s years of service credit and is limited to $344 per m onth after 25 years of servi ce. If a retiree dies, the benefits that would be payable for his or her insurance are provided to the spouse or family for 12 months. The retiree may use the subsidy for any of the medical insurance plans that the City’s active employees may enroll in. Employees hired on or after October 1, 2014 are not eligible for this benefit.

PEMHCA
The City provides an agent multipl e-employer defined benefit he althcare plan to retirees through CalPERS under t he California Public Employees Medical and Hospital Care Act (PEMHCA), commonly referred to as PERS Health . PEMHCA provides health insurance through a variety of Health Maintenan ce Organization (HMO) and Preferred Provider Organization (PPO) options. The PEMHCA benefits are applied to all safety employee groups, based on retirement plan election. The benefits continue to the surviving spouse for one year. The Hun tington Beach Firefighters’ Association (HBFA) joined PEMHCA in 2011. All other safety groups - Fire Management Association (FMA), Marine Safety Management Association (MSOA), Police Management Associat ion (PMA), and Police Officer s’ Association (POA) - joined in 2004.

82 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

8. OTHER POST EMPLOYMENT BENEFITS (Continued)

Safety employees are eligible for PEMHCA benefits if they retire from the City on or after age 50 with at least five years of service or disability, and are eligible for a PERS pension.

As of the June 30, 2021 measurement date, the following current and former employees were covered by the benefit terms under the plan:

b. Accounting and Funding

The City utilizes the California Employers’ Retiree Benefit Trust (CERBT), an agent multiple-employer plan, for the postemployment medical insuranc e benefit.

Benefits paid from the CERBT were $955,000 for year ended June 30, 2022. The assets of the CERBT are exclu ded from the accompanying financia l statements since they are in an irrevocable trust administered by CalPERS. Copies of CalPERS’ annual financial report may be obtained from their exe cutive office: 400 P Street, Sacramento, CA, 95814 or on their website: www.calper s.ca.gov. The City’s policy is to make 100% o f each year’s ARC, with an addit ional amount to prefund benefits as determined annua lly by City Council in orde r to improve the funded status of the plan.

For PEMHCA, the City selected t he “unequal” method for the contribution. Under this method, the City offered a lesser contribution for retiree s than for active employees. The City paid the PEM HCA minimum for actives ($139 in 2020, $143 in 2021 and $149 in 2022). Beginning in 2008, Assembly Bill 254 4 changed the computation for annual increases to annuitant health care under the unequal method. Under the new provisions, the City increases annuitant health care contributions equal to an amount not less than five percent of the active employee contributions, multiplied by the number of years in PEMHCA. The City’s contribution for retirees is $81.95 per employee for the Huntington Beach Fi refighter’s Association (HBFA) and $134.10 f or all other Safety groups in 2 022. The annual increase in minimum PEMHCA contribution to CalPERS will continue until the time that the City contribution for re tirees equals the City contrib ution paid for active employees.

Postemployment
Medical Insurance PEMHCA
Retirees and beneficiaries receiving benefits 308 212 Inactive employees not yet receiving benefits 315 - Active Plan Members 810 391
Total Plan Participants 1,433 603
83 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

8. OTHER POST EMPLOYMENT BENEFITS (Continued)

The City’s net OPEB liability was measured as of June 30, 2021 and the total OPEB liability used to calculate the net OPEB liability was determin ed by an actuarial valuation dated June 30, 2021, bas ed on the following actuarial methods and assumptions:

 Actuarial Cost Method – Entry Age Normal
 Discount rate – 5.50%
 Projected salary increases for covered employees due to inflat ion – aggregate increases of 2.75% per annum
 Investment Rate of Return – 5. 50%, assuming actuarially determ ined contributions funded into CERBT Investment Strategy 2
 Mortality Rate
1 – Derived using CalPERS’ membership data for all funds  Pre-Retirement Turnover 2 – Derived using CalPERS’ membership data for all funds
 PEMHCA minimum increases for a ctives - $149 in 2022, with 4.00 % annual increases thereafter
 Healthcare Trend Rate – The medical trend rate represents the long-term expected growth of medical benef its paid by the plan, due to no n-age-related factors such as general medical in flation, utilization, new tec hnology, and the like. The following table sets forth the inflation trend assump tion used for the valuation:

1 Mortality information was derived from data collected during 1997 to 2015 CalPERS Experience Study dated December 2017, which may be accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications. Post- retirement mortality rates include mortality projected fully generational with Scale MP-21.

2. The pre-retirement turnover information was developed based on CalPERS’ specific data. For more details, please refer to the 2007 to 2011 Experience Study Report. The Experien ce Study Report may be accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications.

Calendar Annual Rate Calendar Annual Rate
Year Non-Medicare Medicare Year Non-Medicare Medicare
2022 7.00% 6.10% 2030 4.95% 4.45%
2023 6.50% 5.65% 2031-35 4.80% 4.35%
2024 6.25% 5.45% 2036-45 4.65% 4.25%
2025 6.00% 5.25% 2046-55 4.50% 4.20%
2026 5.75% 5.05% 2056-65 4.35% 4.15%
2027 5.55% 4.90% 2066-75 4.05% 3.95%
2028 5.35% 4.75% 2076+ 3.75% 3.75%
2029 5.15% 4.60%
84 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

8. OTHER POST EMPLOYMENT BENEFITS (Continued)

Long-Term Expected Rate of Return
The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class.

These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset al location percentage and by adding expected inflation.

The target allocation and best estimates of arithmetic real rat es of return for each major asset class are summarized in the following table:

Discount Rate
The discount rate used to measure the total OPEB liability was 5.50 percent. The projection of cash flows used to determine the discount rate as sumed that City contributions will be made at rat es equal to the actuarially de termined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary ne t position was projected to be available to make all projected OPEB payments f or current active and inactive employees and benefic iaries. Therefore, the long-t erm expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Asset Class
Target
Allocation
Long-Term
Expected Real Rate
of Return
Global Equity 40% 4.56%
Fixed Income 43% 0.78%
Treasury Inflation-Protected Securities ("TIPS") 5% -0.08% Commodities 4% 1.22%
Real Estate Investment Trusts ("REITS") 8% 4.06%
Total 100%
* Long-term expected rate of return is 5.50%
CERBT Strategy 2
85 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

8. OTHER POST EMPLOYMENT BENEFITS (Continued)

The changes in the net OPEB Liability/(Asset) for the plan are as follows (in thousands):

Sensitivity of the Net OPEB Liability/(Asset) to Changes in the Discount Rate

The following presents the net OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2021 (in thousands):

Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB Liability
/ (Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2021 33,859$ 30,639 $ 3,220 $ (Measurement Date June 30, 2020)
Changes recognized for the measurement period:

Service Cost 1,120 - 1,120 Interest 2,119 - 2,119 Actual vs. Expected Experience (6,296) - (6,296) Assumption Changes 1,603 - 1,603 Contributions - Employer - 1,882 (1,882) Net Investment Income - 6,025 (6,025) Benefit Payments (2,129) (2,129) - Administrative Expenses - (131) 1 31 Net Changes (3,583) 5,647 (9,230) Balance at June 30, 2022 30,276$ 36,286$ (6,010)$ (Measurement Date June 30, 2021)
Increase / (Decrease)
1% Decrease Current Discount Rate 1% Increase
(4.50%) (5.50%) (6.50%)
Net OPEB Liability (2,124)$ (6,010)$ (9,197)$ 86 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

8. OTHER POST EMPLOYMENT BENEFITS (Continued)

Sensitivity of the Net OPEB Liability/(Asset) to Changes in the Health Care Cost Trend Rates

The following presents the net OPEB liability of the City if it were calculated using health care cost trend rates that are o ne percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2021 (in thousands):

OPEB Plan Fiduciary Net Position

The CERBT issues a publicly available financial report that inc ludes financial statements and required supplementary information. That report may be obtained from the California Public Employees’ Retirement System, CERBT, P.O. Box 942703, Sacramento, CA 94429-2703.

Recognition of Deferred Outflows and Deferred Inflows of Resources

Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time.

Amount are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and defe rred inflows of resources related to OPEB and are to be recognized in future OPEB expense.

The recognition period differs depending on the source of the gain or loss:

1% Decrease Current Trend 1% Increase
(6.25% Non-Medicare /

5.30% Medicare,
decreasing to 3.0%
Non-Medicare /

3.0% Medicare)
(7.25% Non-Medicare /

6.30% Medicare,
decreasing to 4.0%
Non-Medicare /

4.0% Medicare)
(8.25% Non-Medicare /

7.30% Medicare,
decreasing to 5.0%
Non-Medicare /

5.0% Medicare)
Net OPEB Liability (9,234)$ (6,010)$ (1,909)$ 5 Years
Net difference between projected and actual
earnings on OPEB plan investments
87 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

8. OTHER POST EMPLOYMENT BENEFITS (Continued)

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB

As of June 30, 2022, the City recognized OPEB income of $173,000. As of June 30, 2022, the City reported deferred outflows of resources related to OPEB from the following sources:

The $2,499,000 reported as deferr ed outflows of resources related to contributions subsequent to the June 30, 2021 measurement date will be recognized as a reduction of the net OPEB liability during the Fiscal Year ending June 30, 2023. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows (in thousands):

Measurement Periods
Ended June 30,
2023 (1,725)$
2024 (1,766)
2025 (1,680)
2026 (1,729)
2027 (718)
Thereafter (1,112)
(8,730)$
Deferred
Outflows/ (Inflows)
of Resources
Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB Contributions subsequent to the measurement date 2,499$ -$ Difference between expected and actual experience 832 5,489 Changes in Assumptions 1,397 2,198 Net difference between projected and actual earnings on OPEB Plan Investments - 3,272 4,728$ 10,959$
88 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

9. RISK MANAGEMENT

The City is exposed to various r isks of losses related to torts ; theft of, damage to and destruction of assets; errors and omissions; injuries to employ ees; and natural disasters. The City records the liability claims as expenditure s in the Self Insurance General Liability Internal Service Fund and the workers’ compensation claims in the Self Insurance Workers’ Compensation Internal Service Fund.

BICEP was created in 1988 by a joi nt powers agreement between t he City of Huntington Beach and four other local entities including Oxnard , Ventura, Santa Ana, and West Covina, for the purpose of providing joint insurance coverage and related risk management services for member cities. BICEP allows member entities to finance a claims payment pool for certain liability claims in excess of $1,000,000 to a maximum coverage limit of $27,000,000 for claims incurred through June 30, 2015, and $24,000,000 thereafter.

Effective July 1, 2019, the member agencies of BICEP agreed to dissolve the Joint Powers Authority. BICEP continues to exist for the purpose of d isposing of all claims, the distribution of assets, and any other functions necessary t o conclude the affairs of BICEP as provided in the Bylaws of the Authority. Upon dissolution of BICEP, the City purchased liability insurance in the open marketplace, which pr ovides insurance for claims costs exceeding the City’ s self-insured retention of $1, 000,000. The maximum coverage limit is $30,000,000, which is inclusive of the self-insured retention. Claims that exceed the maximum limit of liability are covered by the C ity’s Self-Insurance General Liability Internal Service Fund.

There were no liability claims in the past three years that exceeded the coverage limit.

Although, there is a claim that exceeds the self-insured retention of $1,000,000 and is not covered under the City’s liabi lity insurance plan. Refer to note 18b. for further details.

Liability Claims
Claims up to $1,000,000 are paid fr om the City’s Self Insurance General Liability Internal Service Fund. Payments for claims from $1,000,000 to t he maximum limit discussed above are covered by the excess liability coverage pu rchased by the City.

Any claims exceeding the maximum limit are covered by the Self Insurance General Liability Internal Service Fund. The liability for these claims is recorded as part of long- term obligations in the Self Insurance General Liability Fund a nd government-wide financial statements. Liabilities include amounts incurred, but not reported.

89 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

9. RISK MANAGEMENT (Continued)

Workers’ Compensation Claims
Workers’ compensation claims of up to $1,000,000 per claim are paid from the Self Insured Workers’ Comp Internal Service Fund. Excess workers’ co mpensation coverage is purchased through the CSAC/Prism-Excess Insurance A uthority.

Payments for claims from $1,000,000 to statutory limits are covered by CSAC/Prism- Excess Insurance Authority.

The Self Insurance Workers’ Comp Internal Service Fund has a $26.7 million deficit at year-end at the 55 percent confi dence level. The City has estab lished plans to help reduce the deficit in this fund. This will be accomplished by a dditional transfers from the General Fund, Proprietary f unds, and other governmental fun ds in which employees are charged over the next nine years.

Claims activity and liabilities relating to the current and prior year are (in thousands):

Workers'
Compensation General Liability Total
Balance June 30, 2020 29,606 $ 7 ,549$ 37,155$ Additions 12,200 11,058 23,258 Reductions (7,012) (6,622) (13,634) Net Increase (Decrease) 5,188 4 ,436 9 ,624 Balance June 30, 2021 34,794 11,985 46,779 Additions 16,278 7,993 24,271 Reductions (8,309) (6,310) (14,619) Net Increase (Decrease) 7,969 1 ,683 9 ,652 Balance June 30, 2022 42,763$ 13,668$ 56,431$ 90 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

10. INTERFUND TRANSACTIONS

a. Advances to/from Other Funds

The amounts at year-end were (in thousands):

There is a $1,363,000 advance from the LMIHAF Capital Projects Fund to the Redevelopment Agency Private Purpose Trust Fund as of June 30, 2022 for Main Pier property acquisitions prior to the dissolution of the Redevelopment Agency on February 1, 2012. No set interest rates or fixed repayment term s have been established.

Redevelopment
Agency Private
Purpose Trust
Advances from (Receivable):

Major Governmental Funds
LMIHAF Capital Projects 1,363$
Advances to
(Payable):
91 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

10. INTERFUND TRANSACTIONS (Continued)

b. Transfers In/Out

The amounts at year-end were (in thousands):

The following is a summary of the significant transfers:

 $16,787,000 was transferred from the General Fund to Other Gov ernmental Funds for debt service payments of $2,737,000 and infrastructur e related projects including road repai rs and enhancement, equipment and other capital improvement projects totaling $14,050,000.
 $51,000 was transferred from the General Fund to the Refuse En terprise Fund to fund the senior citizen rate reduction on refuse charges.  $1,011,000 was transferred from the General Fund to the Grants Special Revenue Fund to cover payments not reimbursed by the grant prog ram. $1,005,000 was provided to fund COVID-related expenditures. The remaining $6,000 was provided to cover HOME program expenditures.  $224,000 was transferred from the LMIHAF Fund to Other Governmental Funds for debt service payments.
 $900,000 was transferred from HOME Fund to LMIHAF Fund to rest ructure a developer loan originally issued from the LMIHAF fund.
 $13,000 was transferred from the Ha zmat Service Enterprise Fun d to the General Fund to cover administrative and overhead expenditures.  $2,207,000 was transferred from G rant Special Revenue Funds to Other Governmental Funds to reimburse the funds for grant eligible expenditures paid out of Other Governmental Funds. $1,930,000 of the transfer is related to use of HOME funds to pay back a devel oper loan originally issued Af fordable Housing Funds.

Transfers In
General
Fund
Grants
Special
Revenue
LMIHAF
Capital
Projects
Other
Governmental
Funds
Total
Governmental
Funds
Hazmat
Service
Fund
Total
Transfers In
General Fund -$ 3 $ - $ 400$ 403 $ 13 $ 416 $ Grants Special Revenue 1,011 - - 93 1,104 - 1,104 LMIHAF - 900 - - 900 - 900 Other Governmental Funds 16,787 2 ,207 2 24 4 19,222 - 19,222 Total Governmental Funds 17,798 3 ,110 2 24 4 97 21,629 1 3 2 1 , 6 4 2 Water Fund - 1 - - 1 - 1 Refuse Fund 51 - - - 5 1 - 5 1 Total Enterprise Funds 51 1 - - 5 2 - 5 2 Total Transfers Out 17,849$ 3 ,111$ 2 24$ 4 97$ 21,681$ 1 3$ 2 1 , 6 9 4$ Transfers Out
92 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS

Below is a schedule of changes in long-term governmental obligations for the year (in thousands):

Governmental Activities:

June 30,
2021 Additions Retirements
June 30,
2022
Accrued
Interest
Due Within
One Year
Public Financing Authority:
2014(a) Lease Revenue Bonds 11,880$ -$ (665)$ 11,215$ 132$ 685$ 2020(a) Lease Revenue Bonds 4,835 - - 4,835 36 - 2020(b) Lease Revenue Bonds 12,830 - (1,515) 11,315 2 3 1 ,520 Total Public Financing Authority 29,545 - (2,180) 27,365 191 2 ,205 Other Long-Term Obligations:

Compensated Absences 13,405 5,243 (3,603) 15,045 - 4,432 Claims Payable 46,779 24,271 (14,619) 56,431 - 13,439 Pollution Remediation 2,000 - - 2,000 - - LED Lighting Phase I 432 - (118) 314 2 122 I-Bank CLEEN Loan 1,882 - (296) 1,586 15 303 CEC Loan 2,457 - (394) 2,063 - 266 Pension Obligation Bonds 341,501 - (10,859) 330,642 349 12,637 Finance Purchase Agreement 12,753 868 (1,907) 11,714 30 2,068 Leases Payable - 4 4 8 (201) 2 47 - 1 39 Total Other Long-Term Obligations 421,209 30,830 (31,997) 420,042 396 33,406 Total Long-Term Obligations -
Governmental Activities 450,754$ 3 0,830$ (34,177)$ 447,407$ 587$ 35,611$ 93 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

a. Public Financing Authority

(1) 2014(a) Public Financing Authority Lease Revenue Bonds

Year of Issuance 2014
Type of Debt Lease Revenue Bonds
Original Principal Amount $15,295,000
Security Lease with City
Interest Rates 3.0% to 5.0%
Interest Payment Dates March 1 st, September 1st
Principal Payment Dates September 1 st
Purpose of Debt Finance the construction of a new Senior Center

Debt service requirements to maturity are (in thousands):

Year Ending
June 30 Principal Interest Total
2023 685$ 384$ 1,069$
2024 720 352 1,072
2025 750 319 1,069
2026 785 289 1,074
2027 810 265 1,075
2028-2032 4,440 931 5,371
2033-2035 3,025 181 3,206
Total 11,215$ 2,721$ 13,936$
94 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

(2) 2020(a) Public Financing Authority Lease Revenue Bonds

Year of Issuance 2020
Type of Debt Lease Revenue Bonds
Original Principal Amount $4,835,000
Security Lease with City
Interest Rates 4.0% to 5.0%
Interest Payment Dates May 1 st, November 1st
Principal Payment Dates May 1 st
Purpose of Debt Defease 2010(a) Lease revenue Bonds
which Defeased 1997 Leasehold
Revenue Bonds (Construct Pier Plaza
and Purchase 800 MHZ system), 2000
Lease Revenue Bonds (Capital
Improvements and defeasance of
Emerald Cove Certificate of Participation)

Debt service requirements to maturity are (in thousands):

Year Ending
June 30 Principal Interest Total
2023 -$ 223 $ 223 $
2024 - 224 224
2025 - 224 224
2026 - 224 224
2027 - 224 224
2028-2032 4,835 902 5,737
Total 4,835 $ 2,021 $ 6,856 $
95 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

(3) 2020(b) Public Financing Authority Lease Revenue Bonds

Year of Issuance 2020
Type of Debt Lease Revenue Bonds
Original Principal Amount $14,440,000
Security Lease with City
Interest Rates 0.329% to 1.831%
Interest Payment Dates May 1 st, November 1st
Principal Payment Dates May 1 st
Purpose of Debt Defease 2011(a) Lease revenue Bonds
which Defeased 2001(a) Leasehold
Revenue Bonds (Construct Sports
Complex and South Beach Phase II
Improvements) and 2001(b) Lease
Revenue Bonds (Defeased Civic
Improvement Corporation Certificates)

Debt service requirements to maturity are (in thousands):

Year Ending
June 30 Principal Interest Total
2023 1,520$ 138 $ 1,658 $
2024 1,530 129 1,659
2025 1,545 117 1,662
2026 1,560 103 1,663
2027 1,575 83 1,658
2028-2030 3,585 103 3,688
Total 11,315$ 673 $ 11,988$
96 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

b. Other Long-Term Obligations

(1) Compensated Absences

There is no repayment schedule to pay the compensated absences amount of $15,045,000 relating to governmental operations. The General Fund typically liquidates the vacation and sick leave liability.

(2) Claims Payable

There is no repayment schedule for the claims payable for gover nmental activities of $56,431,000 described in Note 9. The City pays the claims upon final settlement. The General Fund typically liquidates the cla ims payable liability.

(3) Pollution Remediation

The City plans to remediate hazar dous materials contamination o f land located within Huntington Central Park used as a gun range faci lity prior to its close in 1997. The City is voluntarily planning to remediate the site in order to use the area for park purposes. The cost of the gun range re mediation is estimated to be $2,000,000 and is reported as a long-term liabi lity in the government-wide financial statement s. The liability was measure d by estimating a reasonable range of potential outlays and multiply ing those outlays by their probability of occurring.

(4) LED Lighting Phase I

Year of Issuance 2014
Type of Debt Leaseback from Capital One
Public Funding, LLC
Principal Amount Original $1,062,924
Security Loan Agreement with Capital One
Public Funding, LLC
Interest Rate 2.32%
Interest Payment Dates February 1 st and August 1st
Principal Payment Dates August 1 st
Purpose of Debt To purchase and upgrade street,
area and pole lighting to energy
efficient LED light sources

97 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

Debt service requirements to maturity are (in thousands):

(5) I-Bank CLEEN Loan

Year of Issuance 2016
Type of Debt CLEEN Loan from the California
Infrastructure and Economic
Development Bank (I-Bank)
Principal Amount Original $3,000,000
Security Edwards Fire Station
Interest Rate 2.32%
Interest Payment Dates February 1 st and August 1st
Principal Payment Dates August 1 st
Purpose of Debt To purchase and upgrade street
pole lighting to energy efficient
LED light sources

Debt service requirements to maturity are (in thousands):

Year Ending
June 30 Principal Interest Total
2023 303 $ 33 $ 336 $
2024 310 26 336
2025 317 19 336
2026 324 11 335
2027 332 4 336
Total 1,586 $ 93 $ 1,679$
Year Ending
June 30 Principal Interest Total
2023 123$ 10$ 133$
2024 126 5 131
2025 65 1 66
Total 314$ 16$ 330$
98 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

(6) California Energy Commission (CEC) Loan

Year of Issuance 2016
Type of Debt Loan from the California Energy
Commission (CEC)
Principal Amount Original $3,000,000
Security Loan Agreement with CEC
Interest Rate 1.00%
Interest Payment Dates June 22 nd and December 22nd
Principal Payment Dates June 22 nd and December 22nd
Purpose of Debt To upgrade street pole lighting to
energy efficient LED light sources

Debt service requirements to maturity are (in thousands):

Year Ending
June 30 Principal Interest Total
2023 266 $ 20$ 286$
2024 269 17 286
2025 272 13 285
2026 274 12 286
2027 277 9 286
2028-2030 705 11 716
Total 2,063$ 82$ 2,145$
99 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

(7) Pension Obligation Bonds

Year of Issuance 2021
Type of Debt Pension Obligation Bonds
Principal Amount Original $341,501,000
Interest Rates 0.221% to 3.376%
Interest Payment Dates June 15th and December 15th
Principal Payment Dates June 15 th
Purpose of Debt Pay 85% of CalPERS UAL as of
the June 30, 2019 valuation report.

Debt service requirements to maturity are (in thousands):

Year Ending
June 30 Principal Interest Total
2023 12,637$ 8,511 $ 21,148$
2024 12,683 8,463 21,146
2025 12,768 8,385 21,153
2026 12,898 8,248 21,146
2027 13,076 8,074 21,150
2028-2032 69,360 36,379 105,739
2033-2037 78,712 27,020 105,732
2038-2042 91,848 13,896 105,744
2043-2044 26,660 1,357 28,017
Total 330,642$ 120,333$ 450,975 $
100
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

(8) Finance Purchase Agreement

Year of Issuance 2021
Type of Debt Capital Purchase Agreement
Principal Amount Various
Security Master Lease Agreement
Interest Rates 1.249% and 1.775%
Interest Payment Dates Semi-Annually
Principal Payment Dates Semi-Annually
Purpose of Debt Public Safety Equipment Financing

Debt service requirements to maturity are (in thousands):

(9) Lease Payable

On July 1, 2021, the City of Huntington Beach entered into a 16 month lease as a lessee for the use of Ricoh copiers. An initial lease liability was recorded in the amount of $81,195. As of June 30, 2022, the value of the lease liability is $20,325. The City of Huntington Beach is required to make mo nthly fixed payments of $5,084. The lease has an interest rate of 0.308%. The estimated useful life was 16 months as of the contract commencement. The value of the right to use asset as of June 30, 2022, was $81,195 with ac cumulated amortization of $60,896.

On July 1, 2021, the City of Huntington Beach entered into a 19 month lease as a Lessee for the use of Ricoh copiers. An initial lease liability was recorded in the amount of $93,080. As of June 30, 2022, the value of the lease liability is $34,359. The City of Huntington Beach is required to make mo nthly fixed payments of $4,916. The lease has an interest rate of 0.435%. The estimated useful life was 19 months as of the contract commencement. The value of the right to use asset as of June 30, 2022, was $93,080 with ac cumulated amortization of $57,774.

Year Ending
June 30 Principal Interest Total
2023 2,068$ 195 $ 2,263 $
2024 2,100 163 2,263
2025 1,441 131 1,572
2026 1,199 108 1,307
2027 1,220 87 1,307
2028-2031 3,686 165 3,851
*Total 11,714$ 849 $ 12,563$
101
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

On July 1, 2021, the City of Huntington Beach entered into a 39 month lease as a lessee for the use of land with Tank Farms, LLC as the lessor. An initial lease liability was recorded in the amount of $273,597. As of June 30, 2022, the value of the lease liability is $191,965. The City of Hunti ngton Beach is required to make monthly fixed payments of $6,918. The lease ha s an interest rate of 0.648%. The Land estimated useful life was 39 months as of the contract commencement. The value of the right to use asset as of June 30, 2022, was $273,597 with accumulated amortization of $84,184.

The future principal and interest lease payment as of June 30, 2022, were as follows:

c. Long-Term Obligations – Business-Type Activities

Below is a schedule of the long-te rm obligations of business-ty pe activities (in thousands):

(1) Compensated Absences

There is no repayment schedule for the compensated absences amo unt of $1,686,000 relating to business-type activities. The balance for the outstanding business-type compensated absences is predominately related to the Water and Sewer funds.

June 30,
2021 Additions Retirements
June 30,
2022
Accrued
Interest
Due Within
One Year
Compensated Absences 1,426$ 649 $ (389)$ 1,686 $ - $ 460$ Pension Obligation Bonds 22,144 - (776) 21,368 2 2 888 Total Long-Term Obligations -
Business-Type Activities 23,570 $ 6 49$ (1,165)$ 23,054$ 2 2$ 1,348$ Long-Term Obligations - Business-Type
Activities:

Year Ending
June 30 Principal Interest Total
2023 139 $ 1 $ 140$ 2024 86 - 86 2025 22 - 22 Total 247 $ 1 $ 248$ 102
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

11. LONG-TERM OBLIGATIONS (Continued)

(2) Pension Obligation Bond

Year of Issuance 2021
Type of Debt Pension Obligation Bonds
Principal Amount Original $22,144,000
Interest Rates 0.221% to 3.376%
Interest Payment Dates June 15th and December 15th
Principal Payment Dates June 15 th
Purpose of Debt Pay 85% of CalPERS UAL as of
the June 30, 2019 valuation report.

Debt service requirements to maturity are (in thousands):

d. Long-Term Conduit Debt Obligations

Below is a schedule of the conduit debt obligations for which the City is not liable in any manner (in thousands):

June 30,
2021 Additions Retirements
June 30,
2022
Community Facilities District No. 2000-1
2013 Special Tax Refunding Bonds 9,050$ - $ (645)$ 8,405 $ Community Facilities District No. 2002-1
Special Assessment Tax Bonds 3,785 - (180) 3,605 Community Facilities District No. 2003-1
2013 Special Tax Refunding Bonds 15,560 - (890) 14,670 Total Community Facilities Districts 28,395 - (1,715) 26,680 Total Obligations Not Recorded in
Financial Statements 28,395$ -$ (1,715)$ 26,680$ Community Facilities Districts:

Year Ending
June 30 Principal Interest Total
2023 888 $ 535 $ 1,423$
2024 892 531 1,423
2025 897 527 1,424
2026 907 518 1,425
2027 919 504 1,423
2028-2032 4,875 2,241 7,116 2033-2037 5,533 1,583 7,116 2038-2042 6,457 660 7,117 Total 21,368$ 7,099 $ 28,467 $
103
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

12. CAPITAL ASSETS

a. Changes in Capital Assets

Capital asset activity for the year was (in thousands):

Governmental Activities
June 30,
2021 Additions Dispositions
June 30,
2022
Capital Assets, Not Depreciated:

Land 368,795 $ 841 $ (98) $ 369,538$ Construction in Progress 8,584 7,444 (3,793) 12,235 Total Capital Assets -Not Depreciated 377,379 8,285 (3,891) 381,773 Capital Assets Being Depreciated
Buildings 215,506 6,253 - 221,759 Machinery and Equipment 76,536 4,373 (5,811) 75,098 Infrastructure 451,001 11,494 (505) 461,990 Right to Use Leased Asset - 448 - 448 Total Capital Assets Being Depreciated 743,043 22,568 (6,316) 759,295 Less Accumulated Depreciation:

Buildings (89,384) (5,065) - (94,449) Machinery and Equipment (56,953) (3,898) 5,263 (55,588) Infrastructure (236,829) (8,141) 505 (244,465) Right to Use Leased Asset -
(195) - (195)
Total Accumulated Depreciation (383,166) (17,299) 5,768 (394,697) Total Depreciated - Net 359,877 5,269 (548) 364,598 Total Capital Assets 1,120,422 30,853 (10,207) 1,141,068 Total Accumulated Depreciation (383,166) (17,299) 5,768 (394,697) Capital Assets of Governmental Activities - Net 737,256$ 13,554$ (4,439)$ 746,371$ 104
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

12. CAPITAL ASSETS (Continued)

b. Depreciation Expense

Depreciation in governmental act ivities was charged to the foll owing functions/programs in the Statement of Activities (in thousands):

Depreciation in business-type activities was charged to the fol lowing functions/programs in the Statement of Activities (in thousands):

Business-Type Activities:

June 30,
2021 Additions Dispositions
June 30,
2022
Capital Assets, Not Depreciated:

Land 3,907 $ - $ - $ 3,907$ Construction in Progress 1,782 109 (1,782) 109 Total Capital Assets -Not Depreciated 5,689 109 (1,782) 4,016 Capital Assets Being Depreciated
Buildings 100,082 5,541 - 105,623 Machinery and Equipment 21,596 1,331 (539) 22,388 Infrastructure 149,304 2,749 (385) 151,668 Total Capital Assets Being Depreciated 270,982 9,621 (924) 279,679 Less Accumulated Depreciation:

Buildings (34,235) (2,695) - (36,930) Machinery and Equipment (14,810) (1,254) 539 (15,525) Infrastructure (85,157) (2,470) 3 85 (87,242) Total Accumulated Depreciation (134,202) (6,419) 924 (139,697) Total Depreciated - Net 136,780 3,202 - 139,982 Total Capital Assets 276,671 9,730 (2,706) 283,695 Total Accumulated Depreciation (134,202) (6,419) 9 24 (139,697) Capital Assets of Business Activities - Net 142,469 $ 3,311$ (1,782)$ 143,998$ Department:

City Manager 23$
Finance 30
Community Development 123
Fire 268
Information Services 25
Police 120
Community Services 2,605
Library Services 335
Public Works 12,758
Internal Service Fund depreciation charged to functions 1,012 Total 17,299$
Fund:

Water 4,053$
Sewer Service 2,345
Refuse 21
Total 6,419$
105
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

13. INVESTMENT IN JOINT VENTURES

The City participates in a firefighter training center called Central Net Operations Authority (CNOA) through a joint powers agreement with the City of Fountain Valley.

The City of Huntington Beach reco rds 76 percent of CNOA net assets as Joint Venture Investments.

14. LEASES

For the year ended June 30, 2022, the financial statements incl ude the adoption of GASB Statement No. 87, Leases. The primary objective of this statement is to enhance the relevance and consistency of information about gove rnments' leasing activities. This statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liabi lity and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. For additional information, ref er to the disclosures below.

On July 1, 2021, the City of Huntington Beach entered into a 67 month lease as a lessor for the use of a building with Shor (Hyatt) as the lesse e. An initial lease receivable was recorded in the amount of $75,163. As of June 30, 2022, the value of the lease receivable is $62,670. The lessee is required to make monthly fixed payments of $1,104 in addition to variable payments based on pe rcentage of revenue. The percentage of revenue fluctuates based on the months of the year. The rates are 5% during November-February, 10% during March, April, and October and 12% during May-September. The lease has an interest rate of 1.138%. The value of the deferred inflow of resources as of June 30, 2022, was $61,7 35, and the City of Huntington Beach recognized lease revenue of $12,651 and interest revenue of $778 during the fiscal year. No percentage rent was received in Fisc al Year 2021/22. The lessee has two extension options, each for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 18 7 month lease as a lessor for the use of land with Huntington Harbour Yacht Club as the lessee. An initial lease receivable was recorded in the amount of $537,872. As of June 30, 2022, the value of the lease receivable is $511,095. The lessee is required to make monthly fixed payments of $3,067 or 10% of gross receipts from facility rental and boat docking rental and 6% of gross receipts from food, beverage and carting sales, whichever is greater. The lease has an interest rate of 1.942%. The value of the deferred inflow of resources as of June 30, 2022, was $503,491, and Huntington Beach recognized lease revenue of $24,222 and interest revenue of $10,159 during the fiscal year. The City did not receive revenue related to pe rcentage of gross receipts in the current fiscal year.

106
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

14. LEASES (Continued)

On July 1, 2021, the City of Huntington Beach entered into a 74 month lease as a Lessor for the use of a building located along the beach with Kokomo's Surfside Grill as the lessee. An initial lease receivable was recorded in the amount of $74,526. As of June 30, 2022, the value of the lease receivable is $63,381. The lessee is required to make monthly fixed payments of $1,648. The lease has an interest rate of 1.138%.

The value of the deferred inflow of resources as of June 30, 2022, was $62,462, and Huntington Beach recognized leas e revenue of $11,288 during the fiscal year and interest revenue of $776. The lessee has one extension option for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 96 month lease as a lessor for the use of a building located in Huntington Central Park with Kathy May's Lakeview Café as the lessee. An initial lease receivable was recorded in the amount of $170,485. As of June 30, 2022, the value of the lease receivable is $150,177. The lessee is required to make monthly fixed payments of $1,875. The lease has an interest rate of 1.372%. The value of the deferred inflow of re sources as of June 30, 2022, was $149,277, and Huntington B each recognized lease reven ue of $19,015 and interest revenue of $2,192 during the fiscal year.

On July 1, 2021, the City of Huntington Beach entered into a 72 month lease as a lessor for the use of a building with Meadowlark Golf Course as the lessee. An initial lease receivable was recorded in the amount of $3,160,906. As of June 30, 2022, the value of the lease receivable is $2,682,427. The lessee is requ ired to make monthly fixed payments of $44,314 and percentage of gross sales of green fees, cart rentals, driving range, food and beverages. The lease has an interest ra te of 0.308%. The value of the deferred inflow of resources as of June 30, 2022, was $2,635,305, and Huntington Beach recognized le ase revenue of $516,626 and inter est revenue of $8,975 during the fiscal year. The City received variable payments of $649,993 in the current fiscal year.

On July 1, 2021, the City of Hun tington Beach entered into an 8 8 month lease as a lessor for the use of infrastructure located at Warner Fire Station with Verizon as the lessee. An initial lease receiv able was recorded in the amount of $180,802. As of June 30, 2022, the value of the lease receivable is $156,761. The lessee is required to make monthly fixed payments of $2,064. The lease has an interest rate of 0.435%.

The value of the deferred inflow of resources as of June 30, 2022, was $156,250, and Huntington Beach recognized lease revenue of $23,825 and interest revenue of $728 during the fiscal year. The lessee has five extension options, each for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 25 month lease as a lessor for the use of infrastructure with Zenith Energy West Coast Terminals LLC as the lessee. An initial lease receivable was recorded in the amo unt of $81,023. As of June 30, 2022, the value of the lease receivable is $54,133. Th e lessee is required to make annual fixed payments of $27,135. The lease has an interest rate of 0.435%. 107
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

14. LEASES (Continued)

The value of the deferred inflow of resources as of June 30, 2022, was $42,132, and Huntington Beach recognized lease revenue of $38,647 and interest revenue of $244 during the fiscal year.

On July 1, 2021, the City of Huntington Beach entered into a 78 month lease as a lessor for the use of a building located at Edwards Fire Station with T-Mobile as the lessee. An initial lease receiv able was recorded in the amount of $268,831. As of June 30, 2022, the value of the lease receivable is $232,723. The lessee is required to make monthly fixed payments of $3,039. The lease has an interest rate of 0.435%.

The value of the deferred inflow of resources as of June 30, 2022, was $227,683, and Huntington Beach recognized lease revenue of $40,065 and intere st revenue of $1,082 during the fiscal year. The lessee has one extension option for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 58 month lease as lessor for the use of land located at Central Library with T-Mobile as the lessee. An initial lease receivable was recorded in the amount of $127,289. As of June 30, 2022, the value of the lease receivable is $101,001. The lessee is required to make monthly fixed payments of $2,246. The lease has an interest rate of 0.980%. The value of the deferred inflow of resources as of June 30, 2022, was $100,954, and Huntington Beach recognized lease revenue of $25,229 and interest revenue of $1,107 during the fiscal year.

On July 1, 2021, the City of Huntington Beach entered into a 63 month lease as lessor for the use of infrastructure at the Civic Center Rooftop with T-Mobile as the lessee.

An initial lease receivable was recorded in the amount of $259, 600. As of June 30, 2022, the value of the lease receivable is $214,417. The lessee is required to make monthly fixed payments of $3,849. The lease has an interest rate of 0.237%.The value of the deferred inflow of resources as of June 30, 2022, was $210,152, and Huntington Beach recognized lease revenue of $48,891 and interest revenue of $556 during the fiscal year.

On July 1, 2021, the City of Huntington Beach entered into a 28 7 month lease as lessor for the use of land located at Murdy Park with T-Mobile as the lessee. An initial lease receivable was recorded in the amount of $1,090,068. As of June 30, 2022, the value of the lease receivable is $1,052,770. The lessee is requ ired to make monthly fixed payments of $4,180. The lease has an interest rate of 0.814%. The value of the deferred inflow of resources as of June 30, 2022, was $1,044,58 5, and Huntington Beach recognized lease revenue of $36,801 and interest revenue of $8,682 during the fiscal year. The lessee has four extension options, each for 60 months.

108
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

14. LEASES (Continued)

On July 1, 2021, the City of Hunt ington Beach entered into an 85 month lease as lessor for the use of land located at Edwards Fire Station with Verizon as the lessee.

An initial lease receivable was recorded in the amount of $395, 925. As of June 30, 2022, the value of the lease receivable is $347,702. The lessee is required to make monthly fixed payments of $4,00 3. The lease has an interest rat e of 0.435%. The value of the deferred inflow of resources as of June 30, 2022, was $340,421, and Huntington Beach recognized lease revenue of $53,898 and intere st revenue of $1,606 during the fiscal year. The lessee has three extension o ptions, each for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 32 2 month lease as lessor for the use of land located at Warner Fire Station with American Tower as the lessee. An initial lease receiv able was recorded in the amount of $823,137. As of June 30, 2022, the value of the lease receivable is $794,239. The lessee is required to make monthly fixed payments of $2,700. The lease has an interest rate of 0.435%.

The value of the deferred inflow of resources as of June 30, 2022, was $792,534, and Huntington Beach recognized lease revenue of $27,101 and intere st revenue of $3,501 during the fiscal year. The lessee has five extension op tions, each for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 78 month lease as lessor for the use of land located at Greer Park with T-Mobile as the lessee. An initial lease receivable was recorded in the amount of $353,458. As of June 3 0, 2022, the value of the lease receivable is $304,639. The lessee is required to make monthly fixed payments of $4,214. The lease has an interest rate of 0.435%. T he value of the deferred inflow of resources as of June 30, 2022, was $299,079, and Huntington Beach recognized lease revenue of $52,957 and interest revenue of $1,421 during the fiscal year. The lessee has one extension option for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 58 month lease as lessor for the use of infrastructure located at Bushard Fire Station with T-Mobile a the lessee.

An initial lease receivable was recorded in the amount of $159, 632. As of June 30, 2022, the value of the lease receivable is $127,252. The lessee is required to make monthly fixed payments of $2,81 7. The lease has an interest rat e of 0.980%. The value of the deferred inflow of resources as of June 30, 2022, was $126,604, and Huntington Beach recognized lease revenue of $31,639 and interest revenue $1,388 during the fiscal year.

109
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

14. LEASES (Continued)

On July 1, 2021, the City of Hunt ington Beach entered into an 8 7 month lease as lessor for the use of infrastructure located at Main Street Parking with Verizon as the lessee. An initial lease receiv able was recorded in the amount of $172,296. As of June 30, 2022, the value of the lease receivable is $149,748. The lessee is required to make monthly fixed payments of $2,051. The lease has an interest rate of 1.296%.

The value of the deferred inflow of resources as of June 30, 2022, was $148,649, and Huntington Beach recognized lease revenue of $21,580 and intere st revenue of $2,067 during the fiscal year. The lessee has five extension op tions, each for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 36 0 month lease as lessor for the use of infrastructure located at Edwards Fire Station with AT&T as the lessee. An initial lease receivable was recorded in the amount of $1,296,802. As of June 30, 2022, the value of the lease receivable is $1,296,092. The lessee is required to make monthly fixed payments of $3,500. The lease has an interest rate of 2.678%.

The value of the deferred inflow of resources as of June 30, 20 22, was $1,293,200, and Huntington Beach recognized lease revenue of $812 and interest revenue of $2,790 during the fiscal year. The lessee has four extension op tions, each for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 61 month lease as a lessor for the use of a building with Oceanside Properties LLC as a lessee. An initial lease receivable was recorded in the amount of $223,865. As of June 30, 2022, the value of the lease receivable is $178,557. The lessee is required to make annual fixed payments of $48,073. The lease has an interest rate of 1.525%. The value of the deferred inflow of resources as of June 30, 2022, was $179,826, and Huntington Beach recognized lease revenue of $41,274 and interest revenue of $2,765 during the fiscal year.

On July 1, 2021, the City of Huntington Beach entered into a 10 2 month lease as a lessor for the use of a building with Chevron USA INC. An initial lease receivable was recorded in the amount of $312,544. As of June 30, 2022, the va lue of the lease receivable is $278,413. The lessee is required to make annual f ixed payments of $35,333. The lease has an interest rate of 0.435%. The value of the deferred inflow of resources as of June 30, 2022, was $275,774, and Huntington Beach recognized lease revenue of $35,567 and interest revenue of $1,203 during the fiscal year.

110
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

14. LEASES (Continued)

On July 1, 2021, the City of Huntington Beach entered into a 31 month lease as a lessor for the use of infrastructure with Cardinal Pipeline L.P. as the lessee. An initial lease receivable was recorded in the amount of $336,607. As of June 30, 2022, the value of the lease receivable is $225,131. The lessee is required to make annual fixed payments of $113,294. The lease has an interest rate of 0.648%. The value of the deferred inflow of resources as of June 30, 2022, was $208,174, and Huntington Beach recognized lease revenue of $126,686 and interest revenue of $1,818 during the fiscal year.

On July 1, 2021, the City of Hunt ington Beach entered into 293 month lease as a lessor for the use of land with Hyatt as the lessee. An initia l lease receivable was recorded in the amount of $327,310. As of June 30, 2022, the va lue of the lease receivable is $314,147. The lessee is required to make annual f ixed payments of $14,146. The lease has an interest rate of 0.308%. The value of the deferred inflow of resources as of June 30, 2022, was $313,937, and Huntington Beach recognized lease revenue of $12,390 and interest revenue of $983 during the fiscal year.

On July 1, 2021, the City of Hun tington Beach entered into an 8 6 month lease as a lessor for the use of infrastructure located at Booster Pump St ation with DCOR LLC as the lessee. An initial lease receivable was recorded in the amount of $63,583. As of June 30, 2022, the value of the lease receivable is $55,498. The lessee is required to make annual fixed payments of $8,823. The lease has an interest rate of 1.296%.

The value of the deferred inflow of resources as of June 30, 2022, was $54,766, and Huntington Beach recognized lease revenue of $8,079 and interest revenue of $738 during the fiscal year. The lessee has one extension option for 60 months.

On July 1, 2021, the City of Huntington Beach entered into a 79 month lease as a lessor for the use of infrastructure with DCOR LLC as the lessee. An initial lease receivable was recorded in the amount of $238,884. As of June 3 0, 2022, the value of the lease receivable is $205,199. The lessee is required to make annual fixed payments of $34,647. The lease has an interest rate of 0.435%. The value of the deferred inflow of resources as of June 30, 2022, was $202,871, and Huntington Beach recognized lease revenue of $35,050 and interest revenue of $962 during the fiscal year.

On July 1, 2021, the City of Huntington Beach entered into a 72 month lease as a lessor for the use of a building with HB Employee Credit Union as the lessee. An initial lease receivable was recorded in the amount of $215,913. As of June 30, 2022, the value of the lease receivable is $184,573. The lessee is required to make monthly fixed payments of $3,020. The lease has an interest rate of 0.237%. The value of the deferred inflow of resources as of June 30, 2022, was $179,927, and Huntington Beach recognized lease revenue of $35,521 and interest revenue of $465 during the fiscal year. The lessee has one extension option for 60 months. 111
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

14. LEASES (Continued)

On July 1, 2021, the City of Hun tington Beach entered into an 8 8 month lease as a lessor for the use of a building with Duke's Surf City Restaurant as the lessee. An initial lease receivable was re corded in the amount of $1,764,623. As of June 30, 2022, the value of the lease receivable is $1,544,901. The lessee is required to make monthly fixed payments of $37,265 and variable payments based on a percentage of gross sales. The percentage rent is on a tiered system. The first 4% is collected on the first $8 million. Then 5% on all gross sales above $8 mill ion. The lease has an interest rate of 0.237%. The value of the deferred inflow of re sources as of June 30, 2022, was $1,525,262, and Huntington Beach recognized lease revenue of $235,493 and interest revenue of $3,868 during the fiscal year. The less ee has two extension options, each for 240 months. The City received variable paymen ts of $236,572 in the current fiscal year.

On July 1, 2021, the City of Huntington Beach entered into a 13 1 month lease as a lessor for the use of a building located on Huntington Beach Pi er with Ruby’s Huntington Beach Rest aurant, Ltd as the lessee. An initial leas e receivable was recorded in the amount of $1, 392,508. As of June 30, 2022, the value of the lease receivable is $1,282,852. The lessee is required to make monthly fixed payments of $10,984.47. The lease has an interest rate of 1.594%. The value of the deferred inflow of resources as of June 30, 2022, was $1,264,950, and the City of Huntington Beach recognized lease revenue of $106,400 and interest revenue of $21,160 during the fiscal year.

15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER

REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH

a. General Discussion

On December 29, 2011, the Calif ornia Supreme Court upheld ABX1 26 that provided for the dissolution of all redevelopment agencies in the State of California.

This action impacted the reporting entity of the City of Huntington Beach that was previously reported as a Redevelopment Agency within the City a s a blended component unit.

ABX1 26 provides that upon dissol ution of a Redevelopment Agenc y, either the City or another unit of local government will agree to serve as the “Successor Agency” to hold the assets until they are distributed to other units of state and local government. On January 9, 2012, the City Council elected to bec ome the Successor Agency for the former Redevelopment Agency in accorda nce with ABX1 26 as part of City resolution number 2012-01.

112
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

15. SUCCESSOR AGENCY TRUST FO R ASSETS OF THE FORMER
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued)

After enactment of the law, effective June 28, 2011, Redevelopment Agencies in the State of Califor nia generally cannot enter into new project s, obligations or commitments. Subject to the control of a newly established Over sight Board, remaining assets can only be used to pay enforceable obligation s in existence at the date of dissolution (includin g the completion of any unfini shed projects that were subject to legally enforceable contractual commitments).

In future fiscal years, Successor Agencies will only be allocat ed revenue in the amount that is necessary to pay the estimated annual installmen t payments on enforceable obligations of the former redevelopment agency unti l all enforceable obligations of the prior Redevelopment Agency have been paid in full and all assets have been liquidated.

ABX1 26 directs the State Controller of the State of California to review the propriety of any transfers of assets between Redevelopment Agen cies and other public bodies that occurred after January 1, 2011. If the publi c body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as of su ccessor agency by ABX1 26.

b. Long-Term Debt

Below is a schedule of changes in long-term obligations of the Successor Agency for the year (in thousands):

Successor Agency:

June 30,
2021 Additions Retirements
June 30,
2022
Accrued
Interest
Due Within
One Year
Bonds Payable
1999 Tax Allocation Refunding Bonds 1,570$ - $ (380)$ 1,190 $ 25$ 405$ 2002 Tax Allocation Bonds 3,415 - (840) 2,575 5 4 8 75 Total Bonds Payable 4,985 - (1,220) 3,765 79 1 ,280 Other Long-Term Obligations
Mayer DDA 1,254 - (628) 626 10 626 Bella Terra OPA (Parking) 4,985 - (1,504) 3,481 6 1,504 Bella Terra AHA (Phase II) 12,867 - (749) 12,118 12 749 CIM DDA (Parking & Infrastructure) 5,279 - (308) 4,971 260 330 CIM DDA (Additional Parking) 351 - ( 14) 3 37 2 5 1 6 Total Other Long-Term Obligations 24,736 - (3,203) 21,533 313 3 ,225 Total Long-Term Obligations 29,721$ - $ (4,423)$ 25,298$ 392$ 4 ,505$ 113
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

15. SUCCESSOR AGENCY TRUST FO R ASSETS OF THE FORMER
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued)

(1) 1999 Tax Allocation Refunding Bonds

Year of Issuance 1999
Type of Debt Tax Allocation Refunding Bonds
Original Principal Amount $10,835,000
Security Tax Increment
Interest Rates 3.00% to 5.05%
Interest Payment Dates February 1 st and August 1st
Principal Payment Dates August 1 st
Purpose of Debt Prepay Agency’s 1992 Loans to
Public Financing Authority

Debt service requirements to maturity are (in thousands):

Year Ending
June 30 Principal Interest Total
2023 405$ 49$ 454$
2024 425 29 454
2025 360 9 369
Total 1,190$ 87$ 1,277$
114
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

15. SUCCESSOR AGENCY TRUST FO R ASSETS OF THE FORMER
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued)

(2) 2002 Tax Allocation Refunding Bonds

Year of Issuance 2002
Type of Debt Tax Allocation Refunding Bonds
Original Principal Amount $20,900,000
Security Tax Increment
Interest Rates 2.00% to 5.00%
Interest Payment Dates February 1st and August 1st
Principal Payment Dates August 1st
Purpose of Debt Prepay Agency’s 1992 Loans to
Public Financing Authority and
fully defease 1992 Public
Financing Authority bonds

Debt service requirements to maturity are (in thousands):

Pledged Revenues

The Successor Agency will repay a total of $4,041,000, principal and interest, for the outstanding 1999 and 2002 Tax Allocation Refunding Bond s as of June 30, 2022 from semi-annual Redev elopment Property Tax Trust Fund (RPTTF) revenue allocations.

The 1999 and 2002 Tax Allocation Refunding Bonds are not a debt of the City of Huntington Beach, the Stat e of California, nor any of i ts political subdivisions, and neither the City, the State nor any of its political subdivision is liable therefore, not in any event shall the bonds be payabl e out of funds or properties other than those of the Redevelopment Agency as s et forth in the bond indenture.

Year Ending
June 30 Principal Interest Total
2023 875$ 107$ 982$
2024 920 62 982
2025 780 20 800
Total 2,575$ 189$ 2,764$
115
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

15. SUCCESSOR AGENCY TRUST FO R ASSETS OF THE FORMER
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued)

(3) Mayer Disposition and Development Agreement

In Fiscal Year 1996/97, the Agency entered into a disposition a nd development agreement (DDA) with Robert Mayer Corporation (Corporation) concerning additional development adjacent to the Waterfront Hotel. Under the agreement, the Cor poration would advance payments for the p roject costs with the Agency reimbursing up to $16,750,000 of the costs. As of year- end, the Successor Agency obligation under the agreement amount ed to $626,000. Project-generated revenues as available will repay these amounts over the time needed to fully amortize the advance. The interes t rate of this obligation is 6.32%. The DDA has been approved as an enforceabl e obligation by the DOF.

(4) Bella Terra Parking Structure

In Fiscal Year 2005/06, the Agency entered into an owner partic ipation agreement with Bella Terra Associa tes, LLC (formerly Huntington C e n t e r Associates, LLC). Under the agreem ent, the Corporation would co nstruct various public improvements, including a parking structure, which would then be deeded to the City. The Agency would reimburse $15,000,000 of the costs of the public improvements. As of year-end, the Successor Agency obligation under the agreement amounted to $3,481,000. Project-generated revenues as available will repay these amounts over the time needed to fully amortize the advance. The interest rate of this obligation is 6.94%. The agreement has been approved as an enforceable obligation by the DOF.

(5) Bella Terra Phase II

In Fiscal Year 2010/11, the Agency entered into an affordable h ousing agreement with BTDJM Phase II Associates (DJM). The agreement w ould facilitate the construction of a 467 unit mixed use project, including 43 moderate units and 28 very low units. Under the terms of the agreement, the Agency would reimburse DJM for the construction of the affordable units up to $17,000,000. DJM has transferr ed the site to UDR, and as of year-end, the Successor Agency obligati on under the agreement amounted to $12,118,000. Reimbursement of the affordable units will be base d upon the site-generated tax increment for t he mixed use project as well as the 20% housing fund from the site-generat ed Bella Terra I. The interes t rate of this obligation is 4.00%. The agreem ent has been approved as an enfo rceable obligation by the DOF.

116
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

15. SUCCESSOR AGENCY TRUST FO R ASSETS OF THE FORMER
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued)

(6) CIM/Huntington Disposition and Development Agreement – Strand Parking Structure and Infrastructure

Year of Issuance 2009
Type of Debt Loan from CIM Group, LLC
Original Principal Amount $7,900,000
Security Tax Increment
Interest Rates 7.00%
Interest Payment Dates September 30 th
Principal Payment Dates September 30 th
Purpose of Debt Strand Parking Structure and
Infrastructure

As of year-end, the Successor Agency obligation under the agree ment amounted to $4,971,000. Repayment shall be made solely from Redevelopment Property Tax Trust Fund (RPTTF) revenues received by the Huntington Beach Redevelopment Successor Agency Private Purpose Trust Fund in the amounts included in the Oversight Board approved Recognized Obligation Payment Schedule (ROPS) to the County Auditor Contro ller (CAC) and the Department of Finance (DOF). The DDA has been approved as an enforceable obligation by the DOF.

117
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

15. SUCCESSOR AGENCY TRUST FO R ASSETS OF THE FORMER
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued)

(7) CIM/Huntington Disposition and Development Agreement – Additional Strand Parking

Year of Issuance 2009
Type of Debt Loan from CIM Group, LLC
Original Principal Amount $950,000
Security Tax Increment
Interest Rates 10.00%
Interest Payment Dates September 30 th
Principal Payment Dates September 30 th
Purpose of Debt Additional Strand Parking
Structure and Infrastructure

As of year-end, the Successor Agency obligation under the agree ment amounted to $337,000. Repayment s hall be made solely from Redevelopment Property Tax Trust Fund (RPTTF) revenues received by the Huntington Beach Redevelopment Successor Agency Private Purpose Trust Fund in the amounts included in the Oversight Board approved Recognized Obligation Payment Schedule (ROPS) to the County Auditor Contro ller (CAC) and the Department of Finance (DOF). The DDA has been approved as an enforceable obligation by the DOF.

c. Advances from the City Housing Fund

The Successor Agency has recorded advances from the City Housing Fund totaling $1,363,000 from the Low-Income H ousing Fund to the Redevelopmen t Agency Capital Projects Fund for Main Pier property acquisitions.

16. COMMITMENTS AND CONTINGENCIES

a. Legal Actions

There are legal actions pending against the City resulting from normal operations.

In the opinion of management and the City Attorney, the financial resolution of these actions should not have a significant impact on these financial statements.

118
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

16. COMMITMENTS AND CONTI NGENCIES (Continued)

b. Sales Tax Sharing Agreements

City Council has agreed to provide sales tax rebates to various companies, based upon various factors such as increased job-base or new sales ta x to the City. The sales tax rebates serve to attract and retain various companies in the City of Huntington Beach. The City of Huntington Beach has four sales tax sharing agreements that extend until 2024, 2033, and 2038. Sales tax r ebates totaled $1,414,320 for the year ended June 30, 2022. Sales tax sharing agreements include an agreement with Surf City Auto G roup II, Inc. wherein the sal es tax sharing is a 50%/50% Auto Group/City split with base sales of $1,681,797 (Jeep sales for 2016) and increases by 1% each year. The other sales tax sharing agre ements are with Pinnacle Petroleum through 2024, with base sales of $100,000, a nd McKenna Subaru Huntington Beach thr ough 2033 with a 45%/55% McKenna/Cit y split with base sales of $150,800.

c. Cooperation and Owner Participation Agreements

On September 2, 2003, the Redevel opment Agency Approved a Coope ration Agreement Regarding Capital Improvements in the Southeast Coast al Redevelopment Project with the City. This agreement commits the Redevelopment Agency to reimburse the City for a number of capital improvement projects to be undertaken as part of the Five Year Capital Improvement Program in the Southeast Redevelopment project area st arting in FY 2003/04 as they are u ndertaken. The Successor Agency received its Finding of Completion notice from the Department of Finance on May 13, 2014. The Oversight Board (to the Successor Agency) have approved and reauthorization of t he loans between the City and former Redevelopment Agency in FY 2016/ 17. The State Department of Fin ance (DOF) has denied the validity of the loans and the City has filed suit against the State. On April 22, 2022, the Superior Court of California issued a Proposed Judgment stating that the agreement did not constitute an enforceable obligation and that repayment was not required. The City has requested a hearing with the Cou rt to appeal this determination.

d. Redevelopment Successor Agency Debt to City

The City has advanced money to the Redevelopment Agency for maj or capital improvements, economic development projects, and operations. In January 2011, the City Council and Redevelopment Agency Board approved a revi sed Cooperation Agreement, which incl uded a Promissory Note that me morialized indebtedness previously incurred by the Agency and owed to the City from a series of loans made from the City to the Agency from 1982 to present.

119
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

16. COMMITMENTS AND CONTI NGENCIES (Continued)

The City and Successor Agency have not recorded the advances in t h e accompanying financial statements due to uncertainties related to Health and Safety Code Section 34191.4, which establishes certain restrictions and limitations on the repayment of city-agency loans. In accordance with Health and Safety Code Section 34191.4(b)(3), all other loans between the city and former Redevelopment Agency will begin to be repaid, at a 3% interest rate, as determined by SB 107 upon approval of the Oversight Board and the Department of Finance. The Oversight Board (to the Successor Agency) have approved and reauthorized the loans between the City and former Redevelopment Agency in FY 2016/17. The State Department of Finance has denied the validity of the loans and the City has filed suit against the State. On Apr il 22, 2022, the Superior Court o f California issued a Proposed Judgment stating that the majority of the agreements b etween the City and the former Redevelopment Agen cy were not considered enforce able obligations and that repayment was not required, with the excep tion of the $22,400,000 loan for the purchase of the Waterfront property. The DOF denied this obligation in a follow up letter to the City dated August 24, 2 022. The City has requested a hearing with the Court to appeal this determination.

Below is a schedule of the activity for the year (in thousands):

June 30,
2021 Additions Reductions
June 30,
2022
General Fund
Direct Advances 2,312 $ - $ - $ 2,312$ Indirect Advances 6,567 - - 6,567 Land Sales 32,833 - - 32,833 Interest 30,884 2 79 - 31,163 Total General Fund 72,596 279 - 72,875 Sewer Fund
Direct Advances 300 1 - 301 Deferred Development Fees 187 1 - 188 Total Sewer Fund 487 2 - 489 Drainage Fund
Direct Advances 724 3 - 727 Deferred Development Fees 200 1 - 201 Total Drainage Fund 924 4 - 928 Park Acquisition and Development Fund
Direct Advances 5,960 23 - 5,983 Deferred Development Fees 442 2 - 444 Total Park Acquisition and Development Fund 6,402 25 - 6,427 Water Fund
Direct Advances 4,486 1 7 - 4,503 Total Water Fund 4,486 17 - 4,503 Total All Funds 84,895$ 3 27$ - $ 85,222$ 120
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

16. COMMITMENTS AND CONTI NGENCIES (Continued)

e. Low Moderate Income Housi ng Asset Fund Debt to City

In May 2009, a Promissory Note was issued by the Redevelopment Agency to the City to pay for outstanding bon ded debt related to the Emerald Cove Housing Project. The note is secured by a pledge of Set-Aside Funds. Based on the Promissory Note, the interest rate for the loan is 0% and the loan was scheduled to be repaid by 2021. The City has not recorded the advances in th e accompanying financial statements due to uncertainties surrounding ABX1 26 a nd Assembly Bill 1484 and related litigation (see note 16f). On April 22, 2022, the Superior Court of California issued a Proposed Judgment stating that this loan is considered an enforceable obligation to be pa id on the FY 2023-24 Recognized Obligation Payment Schedule (ROPS). Below is a schedule of the activity fo r the year (in thousands):

f. Successor Agency Litigation

Until 2012, the Huntington Beach Redevelopment Agency existed a nd received property tax increment from property within the “City Redevelopment Project Area.” In 2012, the State Legislature dissolved all redevelopment agen cies, and all tax increment was returned to the County for payment to other taxing entities. The only exception was that tax increm ent would continue to be paid to t he Successor Agency to the City Redevelopment Agency to pay any pre-dissolut ion, legally binding obligations established prior to the dissolution of the agencies. Further, the City transferred the former Redevelopment Agency’s housing obli gations to the Huntington Beach Housing Author ity pursuant to Health and Safet y Code section 34176.

The Successor Agency contended that its payments to retire the former Redevelopment Agency’s portion of the 2010 Lease Revenue Bonds used to finance the Emerald Cove low income housing project were such an obligation. The annual payment on these bonds is approximately $400,000 a year. The amount that the City contends to be due to pay the former Redevelopment Agency’s share of the bonds is $3,245,000.

The Successor Agency also contended that the 2012 Pacific City Development Agreement was a pre-dissolution, legally binding obligation. Pa cific City is a development project that was conditioned on providing 77 affordable housing units, of which the Successor Agency now was obliged to construct 26 units off-site, at a cost of $6,500,000. This would not be a City General Fund obligation.

June 30,
2021 Additions Reductions
June 30,
2022
General Fund
Emerald Cove 3,245$ - $ - $ 3,245$ 121
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

16. COMMITMENTS AND CONTI NGENCIES (Continued)

On April 22, 2022, the Superior Court of California issued a Pr oposed Judgment stating that the majority of th e agreements bet ween the City and the former Redevelopment Agency were not c onsidered enforceable obligation s and that repayment was not required, wit h the exception of the $22,400,0 00 loan for the purchase of the Waterfront property and the Promissory Note related to the Emerald Cove Housing Project. The DOF denied this obligation in a follo w up letter to the City dated August 24, 2022. The City has requested a hearing wi th the Court to appeal this determination.

The State Department of Finance rejected the City’s “Recognized Obligation Payment Schedule” (“ROPS”) to est ablish these two obligations a s entitled to be funded through tax increment. In response, the City sued the De partment of Finance.

All post-redevelopment matters are being heard in Sacramento be f o r e a s e l e c t panel of judges. On January 29, 2014, the Superior Court held that the Emerald Cove Bonds and the Pacific City housing were not preexisting Authority obligations payable with tax increment. The Successor Agency appealed the j udgment. The appellate decision was received in 2018 and the Successor Agency lost the appeal.

The Housing Authority is reviewing options on meeting the affor dable housing requirements for Pacific City with other projects. The City its elf does not require a reserve for either case.

In addition, as stated above in section (c) and (d), the City of Huntington Beach has filed suit against the State of California regarding the Depart ment of Finance’s denial of loans which were between the Redevelopment Agency and the City of Huntington Beach.

g. Orange County Oil Spill Response

On October 2, 2021, the United State Coast Guard notified the City of a possible oil spill in the area of Huntington Be ach, which was classified as a major spill later in the day. The oil spill was originally estimated to be 5.8 nautical miles long, running from the Huntington Beach Pier down to Newport Beach. Given the oil spill impacts, a decision was made by the City and State to close the ocean from the Pier to the Santa Ana River jetty. Additionally, a decision was made by Cit y leadership to cancel the third day of the Pacific Airshow on October 3rd. The oil spill was declared a State emergency by the Governor on October 4th, with a local emergency declaration following the same day. The oil spill has significa ntly affected the City, with substantial ecological impacts occurring at the beach and at the Huntington Beach Wetlands. In response, Huntington Beach Fire and Marine Safety personnel were deployed to implement oil containment efforts.
122
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

16. COMMITMENTS AND CONTI NGENCIES (Continued)

The U.S. Coast Guard, acting as the lead agency, formed an Incident Management Team (comprised of federal, state and regional agencies) to respond to the oil spill incident and coordinate clean-up e fforts. A Unified Command Tea m that includes the U.S. Coast Guard, California Department of Fish and Wildlif e, and Amplify Energy Corporation was established to investigate the oil spill incident.

The City has submitted a claim for $653,259 with Amplify for lo st revenues and expenditures incurred for response efforts. The claim is still under review with Amplify at this time.

h. Kennedy Commission v. Huntington Beach

The Kennedy Commission case arises from an amendment to City’s Beach and Edinger Corridors Specific Element Plan to limit the developmen t of multifamily housing. The case, filed by the Kennedy Commission in July 2015 stating that the amendment was in violation of Cal ifornia’s Housing Element laws , was tried in Superior Court and ruled in favor of the Plaintiff.

The City appealed the trial court decision and prevailed upon appeal. The Kennedy Commission then appealed the decision with the Supreme Court, which upheld the Court of Appeal’s decision in fav or of the City. In February 2020, the City adopted a revised Housing Element to co mply with clarifying language in Senate Bill 1333 regarding the applicability of key provisions of state planning and zooming laws to charter cities which was certified by the California Department of Housing and Community Development as compliant with Housing Element Law. In response, the Kennedy Commission requested its remaining claims against the City be dismissed and filed a motion for attorney’s fees. In July 2021, the Superior Court awarded the Kennedy Commission $3.5 million in attorney’s fees, which is cu rrently under appeal.

17. OTHER INFORMATION

Fund and Accumulated Deficits

The following funds have total fund deficits at year-end (in thousands):

Governmental Fund:

Grant Special Revenue 4,311 $
Internal Service Fund:

Self Insurance Workers' Comp 26,708$
Self Insurance General Liability 3,807$
123
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2022

17. OTHER INFORMATION (Continued)

The Grant Special Revenue fund has a deficit due to expenditure s incurred in response to the COVID-19 pandemic t hat are currently under revi ew for reimbursement by the Federal Emergency Management Agency (FEMA). The Self Insurance Workers’ Compensation fund has a deficit due to incre ases in statutory benefits related to workers’ com pensation claims and rising hea lthcare costs. The Self Insurance General Liability fund has a deficit due to incr eases in claims judgements, cost of litigation an d rising number of lawsuits ag ainst the City. As such, the City has set aside $3,650,000 in litigation reserve f or general liability claims in the General Fund.

The City has established plans to reduce and eliminate the deficits in these funds.

Additional transfers will be made over the next ten to twenty years from the General Fund, Proprietary funds, and other governmental funds to address the deficits in the Self Insurance Workers’ Compens ation and General Liability Inte rnal Service Funds.

124

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125

REQUIRED SUPPLEMENTARY INFORMATION

126

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127

City of Huntington Beach
Notes to Required Supplementary Information
For the Year Ended June 30, 2022

Budgetary Information

The City Council must annually adopt a budget by June 30 of the prior fiscal year. The budgeted expenditures become the appropriations to the various departmen ts. The budget includes estimates for revenue that, along with the appropriations, compute the budgetary fund balance.

The appropriated budget covers subs tantially all governmental f und expenditures with the exception of capital improvement projects (capital projects fun ds) carried forward from prior years, which constitute a legally authorized non-appropriated b udget. The City Council may amend the budget at any time. The City Manager may transfer fun ds from between object purposes (personal services, operating expenditures, or capital outlay expenditures) within the same department without changing t he total departmental budget. Department heads, with the Chief Financial Officer’s approval, may transfer funds from like object categories of the same department. The City Council must approve any changes to departmental budgets. Expenditures may not exceed appropriations at the departmental level. All un used appropriations lapse at year-end. During the year, the City Council made several supple mental appropriations which included carryovers of prior year encumbrances, all of which were within available fund balance and estimated revenue amounts.

The City Council adopts governmental fund budgets consistent wi th generally accepted principles as legally required. There are no significant non-bu dgeted financial activities.

Revenues for special revenue f unds are budgeted by entitlements , grants and estimates of future development and economic growth. Expenditures and transfers are budgeted based upon available financial resources.

On or before February 28th of each year, each department submits data to the City Manager for budget preparation. Staff prepar es the budget by fund, function , and activity. The budget includes information on past years, current year estimates and requested appropriations for the next fiscal year. Before May 1st, the City Council receives the proposed budget. The City Council holds public hearings and may amend the budget by a majority vo te. Changes to the budget must be within the available revenues and reserves.

These financial schedules show budgetary data for the General a nd Grants Special Revenue.

The original budget, revised budget, actual expenditures, and variance amounts are shown.

The City uses an encumbrance syst em as an aid in controlling ex penditures. When the City issues a purchase order for goods or services, it records an encumbrance until the vendor delivers the goods or performs t he service. At year-end, the Ci ty reports all outstanding encumbrances as restricted, committed, or assigned fund balance in governmental fund types.

The City reappropriates these encumbrances into the new fiscal year.

The following pages present schedules of budget to actual comparison of the General and Grants Special Revenue Fund’s Revenues, and Expenditures and Changes in Fund Balance (in thousands).
128
REVENUES Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Property Taxes 93,213$ 94,627$ 94,627$ -$ Sales Taxes 44,641 53,362 53,362 - Utility Taxes 16,884 19,528 19,528 - Other Taxes 17,813 26,133 26,136 3 Licenses and Permits 7,779 8,668 8,666 (2) Fines, Forfeitures and Penalties 3,794 5,144 5,144 - Use of Money and Property 16,282 12,357 12,215 (142) Intergovernmental 2,427 5,103 5,130 27 Charges for Current Service 24,502 29,533 29,364 (169) Other 908 2,837 2,882 4 5 Total Revenues 228,243 257,292 257,054 (238)

EXPENDITURES
Current:

City Council 392 451 426 25 City Manager 3,673 5,423 4,616 807 City Treasurer 260 326 326 - City Attorney 2,500 3,114 2,995 119 City Clerk 817 1,549 1,295 254 Finance 5,798 7,714 6,869 845 Community Development 9,075 12,702 10,716 1,986 Fire 47,192 60,643 60,643 - Information Services 6,970 8,881 7,389 1,492 Police 75,659 91,970 91,970 - Community Services 8,942 12,114 11,133 981 Library Services 4,864 6,731 6,014 717 Public Works 20,348 24,948 24,285 663 Debt Service:

Principal 1,750 2,946 2,917 29 Interest 158 324 260 6 4 Total Expenditures 188,398 239,836 231,854 7,982 Excess of Revenues Over Expenditures 39,845 17,456 25,200 7,744

OTHER FINANCING SOURCES (USES)
Transfers In 2,264 447 416 (31) Leases (as Lessee) - - 448 448 Transfers Out (40,142) (17,878) (17,849) 2 9 Total Other Financing Sources (Uses) (37,878) (17,431) (16,985) 446 Net Change In Fund Balance 1,967 25 8,215 8,190 Fund Balance - Beginning of Year 94,609 94,609 94,609 - Fund Balance - End of Year 96,576 $ 94,634$ 102,824$ 8,190$

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
General Fund
See Accompanying Notes to Required Supplementary Information 129
REVENUES Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 96$ 96 $ Intergovernmental 4,540 11,848 5,682 (6,166) Total Revenues 4,540 11,848 5,778 (6,070)

EXPENDITURES
Current:

City Manager 6 32 13 19 City Clerk - 10 - 10 Finance - 370 359 11 Community Development 3,358 7,237 2,716 4,521 Fire - 2,353 2,164 189 Information Systems - 11 7 4 Police 742 3,242 1,856 1,386 Community Services 427 758 714 44 Library Services 69 294 202 92 Public Works 374 4,853 2,405 2,448 Total Expenditures 4,976 19,160 10,436 8,724 Excess of Revenues Over (Under)
Expenditures (436) (7,312) (4,658) 2,654

OTHER FINANCING USES
Transfers In - 1,966 1,104 (862) Transfers Out (54) (4,391) (3,111) 1,280 Total Other Financing Sources (Uses) (54) (2,425) (2,007) 418 Net Change In Fund Balance (490) (9,737) (6,665) 3,072 Fund Balance - Beginning of Year 2,354 2,354 2,354 - Fund Balance - End of Year 1,864 $ (7,383)$ (4,311)$ 3,072$ (In Thousands)
Grants Special Revenue

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
See Accompanying Notes to Required Supplementary Information 130

Measurement Period 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 201 4-15 2013-14 Total Pension Liability
Service cost 8,005$ 7,779$ 8,327$ 8,314$ 8,084$ 7,436$ 7,102$ 7,263$ Interest on total pension liability 42,217 41,058 40,150 38,769 37,749 37,194 35,653 34,412 Differences between expected and actual experience (891) (6,087) (183) (2,042) (9,148) 1,072 (2,900) - Changes in assumptions - - - (3,634) 30,762 - (8,565) - Benefit payments, including refunds of employee contributions (33,392) (30,321) (28,508) (26,685) (25,312) (24,316) (23,377) (22,444) Net change in total pension liability 15,939 12,429 19,786 14,722 42,135 21,386 7,913 19,231 Total pension liability - beginning 604,027 591,598 571,812 557,090 514,955 493,569 485,656 466,425 Total pension liability - ending (a) 619,966$ 604,027$ 591,598$ 571,812$ 557,090$ 514,955$ 493,569$ 485,656$ Plan Fiduciary Net Position
Contributions - employer 150,917$ 16,879$ 14,816$ 13,495$ 12,316$ 10,982$ 9,747$ 9,066$ Contributions - employee 3,450 3,630 3,779 3,649 3,869 3,736 3,790 3,909 Investment income 107,447 21,485 27,288 32,963 40,328 1,856 8,230 56,429 Administrative Expense (443) (609) (296) (614) (536) (226) (418) (472)
Benefit payments (33,392) (30,321) (28,508) (26,685) (25,312) (24,316) (23,377) (22,444) Plan to Plan Resource Movement - - (13) 1 - - - - Other - - 1 (1,166) - - 2 - Net change in plan fiduciary net position 227,979 11,064 17,067 21,643 30,665 (7,968) (2,026) 46,488 Plan fiduciary net position - beginning 443,586 432,522 415,455 393,812 363,147 371,115 373,141 326,653 Plan fiduciary net position - ending (b) 671,565$ 443,586$ 432,522$ 415,455$ 393,812$ 363,147$ 371,115$ 373,141$ Net pension liability - beginning 160,441 159,076 156,357 163,278 151,808 122,454 112,515 139,771 Net pension liability (asset) - ending (a)-(b) (51,599)$ 160,441$ 159,076$ 156,357$ 163,278$ 151,808$ 122,454$ 112,515$ Plan fiduciary net position as a percentage of the
total pension liability (asset) 108.32% 73.44% 73.11% 72.66% 70.69% 7 0.52% 75.19% 76.83% Covered payroll 45,740$ 45,952$ 45,419$ 45,431$ 44,848$ 44,365$ 44,233$ 41,142$ Net pension liability as a percentage of covered
payroll N/A 349.15% 350.24% 344.16% 364.07% 342.18% 276 .84% 273.48%
Notes to Schedule:
* Fiscal year 2013/14 was the first year of implementation, therefore only eight years are shown. * For covered employee payroll, the measurement period of July 1, 2020 to June 30, 2021 was used.

Benefit changes: the figures above include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date.

However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.

Changes in assumptions: None in 2019 or 2021. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.

City of Huntington Beach
Required Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period (in Thousands)
Last Ten Fiscal Years*
CalPERS City Miscellaneous Plan - 99
131

(in Thousands)
Measurement Period 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 201 4-15 2013-14 Total Pension Liability
Service cost 13,386$ 13,226 $ 13,644 $ 13,509$ 13,657$ 12,159$ 11,119 $ 11,096$ Interest on total pension liability 56,114 54,597 53,048 51,223 49,350 48,390 46,160 44,246 Differences between expected and actual experience (3,882) (4,721) (1,220) 2,584 (10,819) 2,678 (820) - Changes in assumptions - - - (3,657) 40,352 - (11,054) - Benefit payments, including refunds of employee contributions (4 4,362) (41,247) (38,958) (37,128) (34,222) (32,116) (30,535) (29,540) Net change in total pension liability 21,256 21,855 26,514 26,531 58,318 31,111 14,870 25,802 Total pension liability - beginning 804,181 782,326 755,812 729,281 670,963 639,852 624,982 599,180 Total pension liability - ending (a) 825,437$ 804,181 $ 782,326 $ 755,812$ 729,281$ 670,963 $ 639,852 $ 624,982$ Plan Fiduciary Net Position
Contributions - employer 257,381$ 25,848$ 23,063 $ 21,058$ 20,629$ 18,703$ 17,791 $ 15,152$ Contributions - employee 4,395 4,355 4,337 4,164 4,570 4,058 4,110 3,850 Investment income 133,170 25,784 32,776 39,336 48,413 2,144 9,661 66,805 Administrative Expense (532) (731) (355) (736) (640) (270) (497) (555)
Benefit payments (44,362) (41,247) (38,958) (37,128) (34,222) (32,116) (30,535) (29,540) Net Plan to Plan Resource Movement - - 13 (3) - (29) - - Other - - 1 (1,398) - - - - Net change in plan fiduciary net position 350,052 14,009 20,877 25,293 38,750 (7,510) 530 55,712 Plan fiduciary net position - beginning 532,653 518,644 497,767 472,474 433,724 441,234 440,704 384,992 Plan fiduciary net position - ending (b) 882,705$ 532,653 $ 518,644 $ 497,767$ 472,474$ 433,724 $ 441,234 $ 440,704$ Net pension liability - beginning 271,528 263,682 258,045 256,807 237,239 198,618 184,278 214,188 Net pension liability (asset) - ending (a)-(b) (57,268)$ 271,528$ 263,682 $ 258,045$ 256,807$ 237,239 $ 198,618 $ 184,278$ Plan fiduciary net position as a percentage of the
total pension liability (asset) 106.94% 66.24% 66.30% 65.86% 64.79% 6 4.64% 68.96% 70.51% Covered payroll 45,665$ 43,783 $ 43,684 $ 43,371$ 43,283$ 42,619$ 42,252 $ 38,397$ Net pension liability as a percentage of covered
payroll N/A 620.17% 603.61% 594.97% 593.32% 556.65% 470.08% 479.93% Notes to Schedule:
* Fiscal year 2013/14 was the first year of imple
mentation, therefore only eight years are shown.
* For covered employee payroll, the measurement period of July 1, 2020 to June 30, 2021 was used.

Benefit changes: the figures above include any liability impact that may have resulted from voluntary benefit changes that occurred on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary.

City of Huntington Beach
Required Supplementary Information (Unaudited)
Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period Last Ten Fiscal Years*
CalPERS City Safety Plan - 100
132

Total Pension Liability 2021-22 2020-21 2019-20 2018-19 2017-18** 201 6-17 2015-16 2014-15 2013-14 Service cost 299$ 350$ 338 $ 398$ 344$ 487 $ 552$ 495$ 544$ Interest on total pension liability 3,897 4,292 3,954 3,990 2,964 3,976 3,945 3,919 3,828 Differences between expected and actual experience 492 - 4,594 - (794) - 982 - - Changes in assumptions (1,638) 6,547 1,756 - 2,115 1,515 2,928 - - Benefit payments, including refunds of employee contributions (5,668) (5,494) (5,012) (4,771) (3,388) (4,144) (3,773) (3,588) (3,548) Net change in total pension liability (2,618) 5,695 5,630 (383) 1,241 1,834 4,634 826 824 Total pension liability - beginning 76,769 71,074 65,444 65,827 64,586 62,752 58,118 57,292 56,468 Total pension liability - ending (a) 74,151$ 76,769$ 71,074$ 65,444$ 65,827$ 64,586$ 62,752 $ 58,118$ 57,292$ Plan Fiduciary Net Position
Contributions - employer 6,006$ 1,435 $ 3,506 $ 4,962 $ 3,507 $ 5,346 $ 7,277 $ 4,678 $ 4,539$ Investment income (11,362) 15,717 2,114 2,582 2,128 6,373 4,282 (1,313) 3,465 Administrative Expense (338) (314) (444) (191) (145) (182) (189) (170) (1 76)
Benefit payments (5,668) (5,494) (5,012) (4,771) (3,388) (4,144) (3,773) (3,588) (3,548) Section 115 Trust Segregation - - - - (3,788) - - - - Other - - - - - - - 3,183 258 Net change in plan fiduciary net position (11,362) 11,344 164 2,582 (1,686) 7,393 7,597 2,790 4,538 Plan fiduciary net position - beginning 70,361 59,017 58,853 56,271 57,957 50,564 42,967 40,177 35,639 Plan fiduciary net position - ending (b) 58,999$ 70,361$ 59,017$ 58,853$ 56,271$ 57,957$ 50,564 $ 42,967$ 40,177$ Net pension liability - beginning 6,408 12,057 6,591 9,556 6,629 12,188 15,151 17,115 20,829 Net pension liability - ending (a)-(b) 15,152$ 6,408$ 12,057$ 6,591 $ 9,556 $ 6,629 $ 12,188$ 15,151$ 17,115$ Plan fiduciary net position as a percentage of the
total pension liability 79.57% 91.65% 83.04% 89.93% 85.48% 89.74% 80.5 8% 73.93% 70. 13% Cov
ered payroll 6,670$ 7,684 $ 8,469$ 12,863 $ 10,890$ 17,167$ 19,517 $ 22,069$ 22,004$ Net pension liability as a percentage of covered payroll 227.17% 83.39% 142.37% 51.24% 87.75% 38.61% 62.45% 68.65% 77.78% * Fiscal year 2013/14 was the first year of implementation, therefore only nine years are shown. ** The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine-month reporting period from October 1, 2017 to June 30, 2018.

City of Huntington Beach
Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios For the Measurement Periods Ended June 30
(in Thousands)
Measurement Period 2021 2020 2019 2018 2017
Total OPEB Liability
Service cost 1,120$ 1,096$ 1,241$ 1,205$ 877$ Interest on the total OPEB liability 2,119 2,064 1,859 1,787 1,293 Actual and expected experience difference (6,296) - 1,411 - - Changes in assumptions 1,603 (298) (3,358) - - Benefit payments (2,129) (1,848) (1,742) (1,683) (1,036) Net change in total OPEB liability (3,583) 1,014 (589) 1,309 1,134 Total OPEB liability - beginning 33,859 32,845 33,434 32,125 30,991 Total OPEB liability - ending (a) 30,276$ 33,859$ 32,845$ 33,434$ 32,125$ Plan Fiduciary Net Position
Contribution - employer** 1,882 $ 1,959 $ 2,270 $ 4,191 $ 1,036 $ Net investment income 6,025 1,580 1,901 1,126 471 Benefit payments (2,129) (1,848) (1,742) (1,683) (1,036) Administrative expense (131) (245) (61) (131) (9) Net change in plan fiduciary net position 5,647 1,446 2,368 3,503 462 Plan fiduciary net position - beginning 30,639 29,193 26,825 23,322 22,860 Plan fiduciary net position - ending (b) 36,286$ 30,639$ 29,193$ 26,825$ 23,322$ Net OPEB liability (asset) - ending (a)-(b) (6,010) $ 3,220$ 3,652$ 6,609$ 8,803$ Plan fiduciary net position as a percentage of the total OPEB liability (asset) 119.85% 90.49% 88.88% 80.23% 72.60% Covered employee payroll 70,881 $ 76,521 $ 79,682 $ 81,458 $ 60,985 $ Net OPEB liability as a percentage of covered employee payroll N/A 4.21% 4.58% 8.11% 14.43% Notes to Schedule:
* Fiscal year 2017/18 was the first year of implementation, therefore only five years of information are shown. **Contributions to the OPEB plan are not based on employee pay.

Last Ten Fiscal Years*
Other Post Employment Benefits Plan
134

2021-22 1 2020-21 1 2019-20 1 2018-19 1 2017-18 1, 2 2016-17 1 2015-16 1 2014-15 1 2013-14 1 Actuarially determined contribution 6,951$ 18,086$ 16,878 $ 14,819$ 9,734 $ 11,921$ 11,238 $ 10,510$ 8,685$ Contributions in relation to the actuarially
determined contributions (6,951) (18,086) (16,878) (14,819) (9,734) (11,921) (11,238) (10,510) (8,685) Contribution deficiency (excess) -$ -$ -$ - $ - $ - $ - $ - $ - $ Covered payroll 46,824$ 45,740 $ 45,952 $ 45,419 $ 33,210 $ 45,118 $ 44,253 $ 46,337 $ 43,327$ Contributions as a percentage of covered payroll 14.84% 39.54% 36.73% 32.63% 29.31% 26.42% 25.39% 22.68% 20.05% Notes to Schedule
Valuation date: 6/30/2012 through 06/30/2019
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal
Amortization method/period
Asset valuation method
Inflation
Salary increases Varies by entry age and service
Payroll growth
Discount Rate
Retirement age
Mortality

2.75% for 10/1/2013-6/30/2019, 2.50% for 7/1/2019-6/30/2020, and 2.80% for 7/1/2020-6/30/2021.

Note: The CalPERS Board of Administration has adopted a new amortization policy effective with the June 30, 2019 actuarial valuation. The new policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed using a level dollar amount. In addition, the new policy removes the 5-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy removes the 5-year ramp-down on investment gains/losses. These changes will apply only to new UAL bases established on or after June 30, 2019.

2.75% for 10/1/2013-6/30/2020, and 2.80% for 7/1/2020-6/30/2021.

The prescribed discount rate assumption, adopted by the board on November 17, 2021, is 6.80 percent compounded annually (net of investment and administrative expenses) as of June 30, 2021.

For 10/1/13-6/30/16, the probabilities of retirement are based on the 2014 CalPERS Experience study for the period from 1997 to 2007. For 7/1/16-6/30/19, the probabilities of retirement are based on the 2014 CalPERS Experience study for the period from 1997 to 2011. For 7/1/19-6/30/20, the probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.

For 10/1/13-6/30/16, the probabilities of mortality are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. For 7/1/16-6/30/19, the probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. For 7/1/16-6/30/18, Pre-retirement and Post-retirement mortality rates include 5 years of projected mortality improvement using Scale AA published by the Society of Actuaries. For 7/1/18-6/30/19, Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries. For 7/1/19-6/30/21, the probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.
*Beginning with the June 30, 2013 valuations, CalPERS employed an amortization and smoothing policy that will pay for all gains and losses over a fixed 30-year period with the increases or decreases in the rate spread directly over a 5-year period.

For 10/1/14-6/30/15, 15 Year Smoothed Market (for details, see June 30, 2012 Funding Valuation Report). For 7/1/15-6/30/21, Fair Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013-2021).

City of Huntington Beach
Required Supplementary Information
Schedule of Contributions
For the Year Ended June 30, 2022
(in Thousands)
Last Ten Fiscal Years*
CalPERS City Miscellaneous Plan - 99
1 Historical information is required only for measurement periods for which GASB 68 is applicable. 2 The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine-month reporting period from October 1, 2017 to June 30, 2018.

For details, see Miscellaneous Plan of the City of Huntington Beach Annual Valuation Report as of June 30, 2021. 135

City of Huntington Beach
Required Supplementary Information
Schedule of Contributions
For the Year Ended June 30, 2022
(in Thousands)
2021-22 1 2020-21 1 2019-20 1 2018-19 1 2017-18 1, 2 2016-17 1 2015-16 1 2014-15 1 2013-14 1 Actuarially determined contribution 13,579$ 27,691$ 25,847$ 23,062 $ 15,223$ 19,468$ 19,129$ 18,125$ 14,759$ Contributions in relation to the actuarially
determined contributions (13,579) (27,691) (25,847) (23,062) (15,223) (19,468) (19,129) (19,125) (14,759) Contribution deficiency (excess) -$ - $ - $ - $ - $ -$ -$ (1,000)$ -$ Covered payroll 48,023$ 45,665$ 43,783$ 43,684 $ 31,943$ 43,269$ 42,607$ 44,055$ 41,167$ Contributions as a percentage of covered payroll 28.28% 60.64% 59. 03% 52.79% 47.66% 44.99% 44.90% 43.41% 35.85% Notes to Schedule
Valuation date: 6/30/2012 through 06/30/2019
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal
Amortization method/period For details, see Safety Plan of the City of Huntington Beach Annual Valuation Report as of June 30, 2021.

Asset valuation method
Inflation
Salary increases Varies by entry age and service.

Payroll growth
Discount Rate
Retirement age
Mortality
Last Ten Fiscal Years*
The prescribed discount rate assumption, adopted by the Board on December 21, 2016, is 7.00 percent compounded annually (net of investment and administrative expenses) as of June 30, 2021. *Beginning with the June 30, 2013 valuations, CalPERS employed an amortization and smoothing policy that will pay for all gains and losses over a fixed 30-year period with the increases or decreases in the rate spread directly over a 5-year period.

CalPERS City Safety Plan - 100
1 Historical information is required only for measurement periods for which GASB 68 is applicable.

For 10/1/14-6/30/15, 15 Year Smoothed Market (for details, see June 30, 2012 Funding Valuation Report). For 7/1/15- 6/30/21, Fair Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013-2021).

2.75% for 10/1/2013-6/30/2020, and 2.80% for 7/1/2020-6/30/2021. 2 The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine-month reporting period from October 1, 2017 to June 30, 2018.

2.75% for 10/1/2013-6/30/2019, 2.50% for 7/1/2019-6/30/2020, and 2.80% for 7/1/2020-6/30/2021. 136

City of Huntington Beach
Required Supplementary Information
Schedule of Contributions
For the Year Ended June 30, 2022
(in Thousands)
2021-22 1 2020-21 1 2019-20 1 2018-19 1 2017-18 1, 2 2016-17 1 2015-16 1 2014-15 1 2013-14 1 Actuarially determined contribution 889$ 933$ 1,689$ 2,258$ 2,879$ 3,895$ 3,576$ 3,634$ 4,534$ Contributions in relation to the actuarially
determined contributions (6,006) (1,435) (3,506) (4,962) (3,507) (5,346) (7,277) (4,678) (4,539) Contribution deficiency (excess) (5,117)$ (502)$ (1,817)$ (2,704)$ (628)$ (1,451)$ (3,701)$ (1,044)$ (5)$ Covered payroll 6,670$ 7,684$ 8,469 $ 12,863 $ 10,890$ 17,167$ 19,517$ 22,069$ 22,004$ Contributions as a percentage of covered payroll 90.04% 18.68% 41. 40% 38.58% 32.20% 31.14% 37.29% 21.20% 20.63% Notes to Schedule
Valuation date: 6/30/2021 6/30/2019 6/30/2019 9/30/2017 9/30/2017 9/3 0/2015 9/30/2013 9/30/2013 9/30/2011 Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry Age Normal, Level Percentage of Payroll Amortization method/period
Asset valuation method
Inflation 3% for 10/1/2013-6/30/2020 and 2.50% per annum for 7/1/2020-6/30/2022.

Salary increases Aggregate - 2.75% annually. Merit - CalPERS 1997-2015 Experience Study.

Payroll growth
Investment rate of return
Retirement age
Mortality
2022 2021 2020 2019 2018 2
2017 2016 2015 2014
Annual Money Weighted Rate of Return, net
of investment expense -15.97% 26.88% 3.79% 4.79% 4.04% 12.87% 10.20% -2.82% 9.20% 2 The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine-month reporting period from October 1, 2017 to June 30, 2018.

The probabilities of mortality are based on the CalPERS 1997-2015 Experience Study. Pre-retirement and Post-retirement mortality rates include mortality projected fully generational with Scale MP-2019, modified to converge to ultimate improvement rates in 2022 for the October 1, 2013 to June 30, 2018 measurement period. Mortality projected fully generational with Scale MP-2019 for the July 1, 2021 to June 30, 2022 measurement period.

Schedule of Money Weighted Rate of Return

6.5%, net of pension plan investment and administrative expenses, including inflation for the October 1, 2013 to June 30, 2018 measurement period. 6.25%, net of pension plan investment and administrative expenses, for the July 1, 2019 - June 30, 2022 measurement period.

The probabilities of retirement are based on the CalPERS 1997-2015 Experience Study.

Investment gains/losses spread over a 5-year rolling period. 1 Historical information is required only for measurement periods for which GASB 68 is applicable. 2 The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018.

Last Ten Fiscal Years*
Supplemental Retirement Plan
1 Historical information is required only for measurement periods for which GASB 68 is applicable.

Merit - CalPERS 1997-2011 Experience Study plus 3.25% aggregate increasefor the October 1, 2013 to June 30, 2018 measurement period. 3% aggregate increase for the July 1, 2018 - June 30, 2019 measurement period. Merit - CalPERS 1997-2015 Experience Study plus 2.75% annually increase for the July 1, 2021 - June 30, 2022 period. 9/30/12 UAAL: fixed 10-year period, Gains/Losses: fixed 15-year period, Discount rate change loss: 10-year period, 6/30/18 UAAL: fixed 5-year period fresh start. 19-year closed period for 2021/2022. Level dollar amortization. 137

Fiscal Year Ended June 30 2022 2021 2020 2019 2018**
Actuarially Determined Contribution (ADC) 1,401$ 1,364$ 1,793$ 1,746$ 2,022$ Contributions in relation to the ADC*** (2,499) (1,882) (1,959) (2,270) (4,192) Contribution deficiency (excess) (1,098)$ (518)$ (166)$ (524)$ (2,170)$ Covered-employee payroll** 72,524 $ 70,881 $ 76,521 $ 79,682 $ 59,589 $ Contributions as a percentage of covered-employee payroll 3.45% 2 .66% 2.56% 2.85% 7.03% Notes to Schedule:

Valuation date: 6/30/2021 6/30/2019 6/30/2017 6/30/2017 6/30/2015 Methods and assumptions used to determine contributions:

Actuarial Cost Method Entry Age Normal
Amortization Method/Period Level percent of payroll over a 19-year fixed period Asset Valuation Method Investment gains and losses spread over 5-year rolling period.

Inflation
Payroll Growth 3.00% per annum, in aggregate.

Investment Rate of Return
Healthcare cost-trend rates
Retirement Age
Mortality
*Historical information is required only for measurement periods for which GASB 75 is applicable.

Future years' information will be displayed up to 10 years as information becomes available. **For the nine-month period ending June 30, 2018. The City changed its fiscal year effective October 1, 2017. ***Contributions to the OPEB plan are not based on employee pay.

7.0% initial, 1.0% - 2.0% near term increase then decreasing 0.5% per year to trend rate that reflects medical price inflation to an ultimate rate of 4.0% in 2076.

Tier 1 employees - 2.5% @55 and Tier 2 employees - 2.0% @62. The probabilities of retirement are based on the 2014 CalPERS Experience Study for the period from 1997-2011. Tier 1 employees - 2.5% @55 and Tier 2 employees - 2.0% @ 62. The probabilities of retirement are based on the CalPERS 1997-2015 experience Study for Measurement period as of 6/30/21.

Pre-retirement mortality probability based on 2014 CalPERS 1997-2011 Experience Study covering CalPERS participants. Post-retirement mortality probability based on CalPERS Experience Study 2007-2011 covering participants in CalPERS. Mortality based on CalPERS 1997-2015 Experience Study covering participants in CalPERS.

For the Year Ended June 30, 2022
3% for 10/1/17-6/30/18 and 2.75% per annum for the measurement period 7/1/2018 to 6/30/2022. 6% for the October 1, 2017 - June 30, 2018 period. 6.25% for the July 1, 2018 - June 30, 2020. 5.50% for the July 1, 2020 - June 30, 2021 period. Assumes investing in California Employers' Retiree Benefit Trust asset allocation Strategy 3, moving to Strategy 2 beginning March 2019.

Last Ten Fiscal Years*
Other Post Employment Benefits Plan
(in Thousands)
City of Huntington Beach
Required Supplementary Information
Schedule of Contributions
138

SUPPLEMENTARY INFORMATION

139

City of Huntington Beach
Other Governmental Funds

Special Revenue Funds account for revenues and expenditures legally constrained to a specific purpose.

 The Air Quality Fund accounts for revenues from the local agencies used to improve local air quality.  The Development Impact Fee Fund accounts for fees collected for new developments to be used fo r transportation, park land acquisition and development, library and other public facilities in an effort to mitigate the impacts of those new developments.
 The Disability Access Fund accounts for the State Mandated Disability Access Fee (SB 1186) to fund increased training certified access specialist (CASp) services for the pu blic and to facilitate compliance with construction related accessibility requirements.
 The Drainage Fund accounts for fees received from developers to construct and ma intain the City’s drainage system.
 The Strand Parking Structure Fund accounts for the activities of the Strand Parking Structure.  The Gas Tax Fund accounts for monies allocated under the Streets and Highways Code of California. Expenditures may be made for any street related purpose allowed under the code.  The Housing Residual Receipt Fund accounts for residual receipts received for housing activities.  The Park Acquisition and Development Fund accounts for fees received from developers to develop and maintain the City’s park system.
 The Surf City “3” Fund accounts for revenues and expenditures related to a 1% fee on cable television and other video subscription services to fund the purchase and acquisitio n of capital equipment and facilities necessary to program and broadcast PEG (public, education and government) events on the City’s cable channel.  The ELM Automation Fund accounts for automation fee revenues and Enterprise Land Manag ement (ELM) replacement costs and maintenance expenditures.
 The Traffic Congestion Relief Fund accounts for moneys allocated for roadway maintenance as estab lished by Assembly Bill 2928.
 The Traffic Impact Fee Fund accounts for moneys received from the traffic impact fee levied on new developments in the City.
 The Transportation Fund accounts for moneys received from the countywide half cent sales tax and other specific sources to be spent on transportation related expenditures.

Debt Service Funds account for the receipts for and payment of general long-term debt.

 The Public Financing Authority accounts for the activity of the Huntington Beach Public Financing Authority.

Capital Projects Funds account for the acquisition and construction of capital assets other than those financed by proprietary fund types.

 The Affordable Housing In-Lieu Fund accounts for the Affordable Housing In-Lieu Fee from developers of housing projects who have elected to pay the fee in-lieu of building the affordable housing in their project.  The Infrastructure Fund records activity for certain designate infrastructure related expenditures.  The Lease Capital Project Fund records activity for capital lease project expenditures.  The Parking In-Lieu Fund records construction activity from developers who pay fees in-l ieu of directly providing parking facilities to the City.
 The Sewer Development Fund accounts for fees received from developers to construct and ma intain sewer facilities.
 The Technology Fund accounts for technology infrastructure project expenditures.

140
ASSETS Air Quality
Development
Impact Fee
Disability
Access Drainage
Strand Parking
Structures Gas Tax
Cash and Investments 1,148$ 10,615$ 342$ 3,476$ 3,970$ 5,964$ Taxes Receivable - - - - - 963 Other Receivables 69 32 1 11 12 18 Prepaids 133 - - - - - Total Assets 1,350 10,647 343 3,487 3,982 6,945

LIABILITIES
Accounts Payable 71 991 2 1 154 1,300 Accrued Payroll - - - - - 4 8 Total Liabilities 71 991 2 1 154 1,348

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue 65 - - - - - Total Deferred Inflows of Resources 65 - - - - -

FUND BALANCES
Restricted
Pollution Remediation - - - - - - Highways, Streets and Transportation - - - - - 5,597 Low Income Housing - - - - - - Air Quality 1,214 - - - - - Other Capital Projects - 9,656 - 3,486 - - Other Purposes - - 341 - - - Committed
Parks - - - - - - Other Purposes - - - - 3,828 - Total Fund Balances 1,214 9,656 341 3,486 3,828 5,597 1,350$ 10,647$ 343$ 3,487$ 3,982$ 6,945$ Total Liabilities, Deferred Inflows
of Resources and Fund Balances

SPECIAL REVENUE FUNDS

CITY OF HUNTINGTON BEACH

COMBINING BALANCE SHEET

OTHER GOVERNMENTAL FUNDS
June 30, 2022
(In Thousands)
141
Housing
Residual Receipt
Park Acquisition
and Development Surf City "3"
ELM Automation
Fund
Traffic
Congestion
Relief
Traffic Impact
Fee Transportation
Total Special
Revenue Funds
1,271$ 1,455$ 1,245$ 274$ 2,246$ 2,651$ 2,692$ 37,349$ - - 131 - 99 - 749 1,942 4 183 4 1 7 8 8 358 - - - - - - - 133 1,275 1,638 1,380 275 2,352 2,659 3,449 39,782 - 26 22 - 175 12 162 2,916 - - - 8 - - 7 1 127 - 2 6 2 2 8 175 1 2 233 3,043 - - - - - - - 6 5 - - - - - - - 6 5 - 355 - - - - - 355 - - - - 2,177 2,647 3,216 13,637 1,275 - - - - - - 1,275 - - - - - - - 1,214 - - - - - - - 13,142 - - 1,358 267 - - - 1,966 - 1,257 - - - - - 1,257 - - - - - - - 3,828 1,275 1,612 1,358 267 2,177 2,647 3,216 36,674 1,275$ 1,638$ 1,380$ 275$ 2,352$ 2,659$ 3,449$ 39,782$ June 30, 2022
(In Thousands)
(continued)

CITY OF HUNTINGTON BEACH

COMBINING BALANCE SHEET

OTHER GOVERNMENTAL FUNDS

SPECIAL REVENUE FUNDS
142
ASSETS
Public Financing
Authority
Total Debt Service
Fund
Affordable Housing
In-Lieu Infrastructure
Cash and Investments 3,347 $ 3,347 $ 4,376 $ 21,524 $ Cash and Investments with Fiscal Agent 1,087 1,087 - - Taxes Receivable - - - - Other Receivables - - 165 58 Prepaids - - - - Total Assets 4,434 4,434 4,541 21,582

LIABILITIES
Accounts Payable 2 2 - 997 Accrued Payroll - - - 100 Total Liabilities 2 2 - 1,097

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - - - - Total Deferred Inflows of Resources - - - -

FUND BALANCES
Restricted
Pollution Remediation - - - - Debt Service 4,432 4,432 - - Highways, Streets and Transportation - - - - Low Income Housing - - 4,541 - Air Quality - - - - Other Capital Projects - - - - Other Purposes - - - - Committed
Parks - - - - Other Capital Projects - - - 20,485 Other Purposes - - - - Assigned
Capital Improvement Reserve - - - - Total Fund Balances 4,432 4,432 4,541 20,485 4,434$ 4,434$ 4,541$ 21,582$ Total Liabilities, Deferred Inflows
of Resources and Fund Balances

DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS
(continued)

CITY OF HUNTINGTON BEACH

COMBINING BALANCE SHEET

OTHER GOVERNMENTAL FUNDS
June 30, 2022
(In Thousands)
143
Lease Capital Project Parking In-Lieu Sewer Development Tec hnology Total Capital Projects
Funds
Total Other
Governmental Funds
3$ 720$ 2,880$ 3,012$ 32,515$ 73,211$ 8,751 - - - 8,751 9,838 - - - - - 1,942 6 3 9 10 251 609 867 - - - 867 1,000 9,627 723 2,889 3,022 42,384 86,600 - 4 619 1 1,621 4,539 - - - - 100 227 - 4 619 1 1,721 4,766 - - - - - 6 5 - - - - - 6 5 - - - - - 355 - - - - - 4,432 - - - - - 13,637 - - - - 4,541 5,816 - - - - - 1,214 9,627 - - - 9,627 22,769 - - - - - 1,966 - - - - - 1,257 - 719 2,270 - 23,474 23,474 - - - - - 3,828 - - - 3,021 3,021 3,021 9,627 719 2,270 3,021 40,663 81,769 9,627$ 723$ 2,889$ 3,022$ 42,384$ 86,600$

CAPITAL PROJECT FUNDS
(continued)

CITY OF HUNTINGTON BEACH

COMBINING BALANCE SHEET

OTHER GOVERNMENTAL FUNDS
June 30, 2022
(In Thousands)
144
REVENUES Air Quality
Development
Impact Fee
Disability
Access Drainage
Strand
Parking
Structures Gas Tax
Sales Taxes -$ -$ -$ -$ -$ -$ Other Taxes - - - - - 7,066 Licenses and Permits - - 70 - - - Use of Money and Property (Loss) 12 101 2 (198) 1,529 - Intergovernmental 189 - - - - 46 Charges for Current Service - 733 - 963 - - Other - - - - - - Total Revenues 201 834 7 2 765 1,529 7,112

EXPENDITURES
Current:

City Manager - - - - - - Community Development - - - - 917 - Fire - 73 - - - - Finance - - 22 - - - Information Systems - - - - - - Police - 150 - - - - Community Services - 5,171 - - - - Library Services - 84 - - - - Public Works 505 - - 1 - 4,271 Total Expenditures 505 5,478 2 2 1 917 4,271 Excess Of Revenues Over
(Under) Expenditures (304) (4,644) 5 0 764 612 2,841 Other Financing Sources (Uses):

Transfers In - - - - - 157 Transfers Out - - - - (400) (70) Total Other Financing Sources (Uses) - - - - (400) 8 7 Net Change in Fund Balances (304) (4 ,644) 50 764 212 2,928 Fund Balances - Beginning of Year 1,518 14,300 291 2,722 3,616 2,669 Fund Balances - End of Year 1,214 $ 9,656$ 341$ 3,486$ 3,828$ 5,597$

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)

SPECIAL REVENUE FUNDS

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
145
Housing
Residual Receipt
Park Acquisition
and Development Surf City "3"
ELM Automation
Fund
Traffic
Congestion
Relief
Traffic Impact
Fee Transportation
Total Special
Revenue Funds
-$ -$ -$ -$ -$ -$ 4,290$ 4,290$ - - 518 - - - - 7,584 - - - - - - - 70 12 (89) 13 (17) 16 19 30 1,430 - - - - 1,557 - - 1,792 - 1,157 - 411 - 143 - 3,407 14 - - - - - - 1 4 26 1,068 531 394 1,573 162 4,320 18,587 - - 636 - - - - 636 2 - - - - - - 919 - - - - - - - 73 - - - - - - - 22 - - - 394 - - - 394 - - - - - - - 150 - 1,200 - - - - - 6,371 - - - - - - - 84 - - - - 1,447 507 3,928 10,659 2 1,200 636 394 1,447 507 3,928 19,308 24 (132) (105) - 126 (345) 392 (721) - - 3 - 16 97 7 280 - - - - - (27) - (497) - - 3 - 1 6 7 0 7 (217) 24 ( 132) ( 102) - 142 ( 275) 399 ( 938) 1,251 1,744 1,460 267 2,035 2,922 2,817 37,612 1,275$ 1,612$ 1,358$ 267$ 2,177$ 2,647$ 3,216$ 36,674$

SPECIAL REVENUE FUNDS

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
(continued)

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
146

REVENUES
Public Financing
Authority
Total Debt Service
Funds
Affordable Housing
In-Lieu Infrastructure
Sales Taxes -$ -$ -$ -$ Other Taxes - - - - Licenses and Permits - - 794 - Use of Money and Property (Loss) 3 3 134 32 Intergovernmental - - 235 209 Charges for Current Service - - - - Other - - - 1 1 Total Revenues 3 3 1,163 252

EXPENDITURES
Current:

City Manager - - - - Community Development - - - - Fire - - - - Finance 7 7 - - Information Systems - - - - Police - - - - Community Services - - - 237 Library Services - - - - Public Works - - - 10,645 Debt Service:

Principal 2,180 2,180 - - Interest 780 780 - - Total Expenditures 2,967 2,967 - 10,882 Excess Of Revenues Over
(Under) Expenditures (2,964) (2,964) 1,163 (10,630) Other Financing Sources (Uses):

Transfers In 2,961 2,961 1,931 14,050 Issuance of Long-Term Debt - - - - Transfers Out - - - - Total Other Financing Sources (Uses) 2,961 2,961 1,931 14,050 Net Change in Fund Balances (3) (3) 3,094 3,420 Fund Balances - Beginning of Year 4,435 4,435 1,447 17,065 Fund Balances - End of Year 4,432 $ 4,432$ 4,541$ 20,485$

DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS
(In Thousands)
(continued)

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
147
Lease Capital Project Parking In -Lieu Sewer Development Technology Total Capital Projects
Funds
Total Other
Governmental Funds
-$ -$ -$ -$ -$ 4,290$ - - - - - 7,584 - 66 - - 860 930 6 - (179) (178) (185) 1,248 - - 12 - 456 2,248 - - 367 - 367 3,774 - - - - 1 1 2 5 6 6 6 200 (178) 1,509 20,099 - - - - - 636 - 5 - - 5 924 - - - - - 73 - - - - - 29 - - - 81 81 475 - - - - - 150 - - - - 237 6,608 - - - - - 84 - - 2,164 - 12,809 23,468 - - - - - 2,180 - - - - - 780 - 5 2,164 8 1 13,132 35,407 6 6 1 (1,964) (259) (11,623) (15,308) - - - - 15,981 19,222 868 - - - 868 868 - - - - - (497) 868 - - - 16,849 19,593 874 61 (1 ,964) ( 259) 5,226 4,285 8,753 658 4,234 3,280 35,437 77,484 9,627$ 719$ 2,270$ 3,021$ 40,663$ 81,769$ (In Thousands)
(continued)

CAPITAL PROJECT FUNDS

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
148
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 12 $ 12 $ Intergovernmental 250 250 189 (61) Total Revenues 250 250 201 (49) EXPENDITURES:

Current:

Public Works 532 1,099 505 594 Total Expenditures 532 1,099 505 594 Net Change in Fund Balance (282) (849) (304) 545 Fund Balance - Beginning of Year 1,518 1,518 1,518 - Fund Balance - End of Year 1,236$ 669$ 1,214$ 545$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 101$ 101 $ Charges for Current Service 356 356 733 377 Total Revenues 356 356 834 478 EXPENDITURES:

Current:

Fire - 900 73 827 Police 1,124 1,607 150 1,457 Community Services 3,782 8,812 5,171 3,641 Library Services 300 422 84 338 Debt Service:

Principal 11
1 1 - 1 1 Total Expenditures 5,217 11,752 5,478 6,274 Net Change in Fund Balance (4,861) (11,396) (4,644) 6,752 Fund Balance - Beginning of Year 14,300 14,300 14,300 - Fund Balance - End of Year 9,439$ 2,904$ 9,656$ 6,752$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits 84 $ 84 $ 70 $ (14) $ Use of Money and Property - - 2 2 Total Revenues 84 8 4 7 2 (12) EXPENDITURES:

Current:

Finance 84
8 4 2 2 6 2
Total Expenditures 84 8 4 2 2 6 2 Net Change in Fund Balance - - 50 50 Fund Balance - Beginning of Year 291 291 291 - Fund Balance - End of Year 291$ 291$ 341$ 5 0$ (In Thousands)
Air Quality
Development Impact Fee
Disability Access

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
149
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) - $ - $ (198)$ (198) $ Charges for Current Service 200 200 963 763 Total Revenues 200 200 765 565 EXPENDITURES:

Current:

Public Works 825 989 1 988 Total Expenditures 825 989 1 988 Net Change in Fund Balance (625) (789) 764 1,553 Fund Balance - Beginning of Year 2,722 2,722 2,722 - Fund Balance - End of Year 2,097$ 1,933$ 3,486$ 1,553$ Strand Parking Structure
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property 1,450 $ 1,450$ 1,529$ 7 9$ Total Revenues 1,450 1,450 1,529 7 9 EXPENDITURES:

Current:

Community Development 1,093
1,205 917 288
Total Expenditures 1,093 1,205 917 288 OTHER FINANCING SOURCES (USES):

Transfers Out (400) (400) (400) - Total Other Financing Sources (Uses) (400) (400) (400) - Net Change in Fund Balance (43) (155) 212 367 Fund Balance - Beginning of Year 3,616 3,616 3,616 - Fund Balance - End of Year 3,573$ 3,461$ 3,828$ 367$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Other Taxes 7,257 $ 7,257 $ 7,066 $ (191) $ Intergovernmental - - 4 6 4 6 Total Revenues 7,257 7,257 7,112 (145) EXPENDITURES:

Current:

Public Works 8,748
9,916 4,271 5,645
Total Expenditures 8,748 9,916 4,271 5,645 OTHER FINANCING SOURCES (USES):

Transfers In - 157 157 - Transfers Out (128) (70) (70) - Total Other Financing Sources (Uses) (128) 8 7 8 7 - Net Change in Fund Balance (1,619) (2,572) 2,928 5,500 Fund Balance - Beginning of Year 2,669 2,669 2,669 - Fund Balance - End of Year 1,050$ 9 7$ 5,597$ 5,500$ Gas Tax
Drainage

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
150
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 12 $ 12 $ Other 32 3 2 1 4 (18) Total Revenues 32 3 2 2 6 ( 6) EXPENDITURES:

Current:

Community Development 32 3 2 2 3 0 Total Expenditures 32 3 2 2 3 0 Net Change in Fund Balance - - 24 24 Fund Balance - Beginning of Year 1,251 1,251 1,251 - Fund Balance - End of Year 1,251$ 1,251$ 1,275$ 2 4$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) - $ - $ (89)$ (89) $ Charges for Current Service 268 268 1,157 889 Total Revenues 268 268 1,068 800 EXPENDITURES:

Current:

Community Services 260
1,626 1,200 426
Total Expenditures 260 1,626 1,200 426 Net Change in Fund Balance 8 (1,358) (132) 1,226 Fund Balance - Beginning of Year 1,744 1,744 1,744 - Fund Balance - End of Year 1,752$ 386$ 1,612$ 1,226$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Other Taxes 510 $ 510 $ 518 $ 8 $ Use of Money and Property - - 1 3 1 3 Total Revenues 510 510 531 2 1 EXPENDITURES:

Current:

City Manager 501
787 636 151
Total Expenditures 501 787 636 151 OTHER FINANCING SOURCES (USES):

Transfers In - 3 3 - Total Other Financing Sources (Uses) - 3 3 - Net Change in Fund Balance 9 (274) (102) 172 Fund Balance - Beginning of Year 1,460 1,460 1,460 - Fund Balance - End of Year 1,469$ 1,186$ 1,358$ 172$

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
Park Acquisition and Development

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

OTHER GOVERNMENTAL FUNDS
Housing Residual Receipt
Surf City "3"
151
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) - $ - $ (17)$ (17) $ Charges for Current Service 360 360 411 5 1 Total Revenues 360 360 394 3 4 EXPENDITURES:

Current:

Information Systems 410 437 394 4 3 Total Expenditures 410 437 394 4 3 OTHER FINANCING SOURCES (USES):

Transfers Out (18) - - - Total Other Financing Sources (Uses) (18) - - - Net Change in Fund Balance (68) (77) - 77 Fund Balance - Beginning of Year 267 267 267 - Fund Balance - End of Year 199$ 190$ 267$ 7 7$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 16 $ 16 $ Intergovernmental 1,800 1,800 1,557 (243) Total Revenues 1,800 1,800 1,573 (227) EXPENDITURES:

Current:

Public Works 1,840
3,465 1,447 2,018
Total Expenditures 1,840 3,465 1,447 2,018 OTHER FINANCING SOURCES (USES):

Transfers In - 1 6 1 6 - Total Other Financing Sources (Uses) - 1 6 1 6 - Net Change in Fund Balance (40) (1,649) 142 1,791 Fund Balance - Beginning of Year 2,035 2,035 2,035 - Fund Balance - End of Year 1,995$ 386$ 2,177$ 1,791$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 19 $ 19 $ Charges for Current Service 100 100 143 4 3 Total Revenues 100 100 162 6 2 EXPENDITURES:

Current:

Public Works 1,690
2,149 507 1,642
Total Expenditures 1,690 2,149 507 1,642 OTHER FINANCING SOURCES (USES):

Transfers In - 97 97 - Transfers Out - (27) (27) - Total Other Financing Sources (Uses) - 7 0 7 0 - Net Change in Fund Balance (1,590) (1,979) (275) 1,704 Fund Balance - Beginning of Year 2,922 2,922 2,922 - Fund Balance - End of Year 1,332$ 943$ 2,647$ 1,704$

SCHEDULE OF REVENUES, EXPENDITURES, AND
Traffic Impact Fee

CITY OF HUNTINGTON BEACH
(In Thousands)
ELM Automation Fund
Traffic Congestion Relief

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
152
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Sales Taxes 3,016 $ 3,016 $ 4,290 $ 1,274 $ Use of Money and Property - - 3 0 3 0 Total Revenues 3,016 3,016 4,320 1,304 EXPENDITURES:

Current:

Public Works 2,128 6,500 3,928 2,572 Total Expenditures 2,128 6,500 3,928 2,572 OTHER FINANCING SOURCES (USES):

Transfers In - 7 7 - Transfers Out (191) - - - Total Other Financing Sources (Uses) (191) 7 7 - Net Change in Fund Balance 697 (3,477) 399 3,876 Fund Balance - Beginning of Year 2,817 2,817 2,817 - Fund Balance - End of Year 3,514$ (660)$ 3,216$ 3,876$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 3 $ 3 $ Total Revenues - - 3 3 EXPENDITURES:

Current:

Finance 12 12 7 5 Debt Service:

Principal 2,180 2,180 2,180 - Interest 780
780 780 -
Total Expenditures 2,972 2,972 2,967 5 OTHER FINANCING SOURCES (USES):

Transfers In 3,376 3,376 2,961 (415) Total Other Financing Sources (Uses) 3,376 3,376 2,961 (415) Net Change in Fund Balance 404 404 (3) (407) Fund Balance - Beginning of Year 4,435 4,435 4,435 - Fund Balance - End of Year 4,839$ 4,839$ 4,432$ (407)$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits 873 $ 873 $ 794 $ (79) $ Use of Money and Property - - 134 134 Intergovernmental - - 235 235 Total Revenues 873 873 1,163 290 OTHER FINANCING SOURCES (USES):

Transfers In - 1,931 1,931 - Total Other Financing Sources (Uses) - 1,931 1,931 - Net Change in Fund Balance 873 2,804 3,094 290 Fund Balance - Beginning of Year 1,447 1,447 1,447 - Fund Balance - End of Year 2,320$ 4,251$ 4,541$ 290$ Transportation
Public Financing Authority
Affordable Housing In-Lieu
(In Thousands)

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022

OTHER GOVERNMENTAL FUNDS
153
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 32 $ 32 $ Intergovernmental - - 209 209 Other - - 1 1 1 1 Total Revenues - - 252 252 EXPENDITURES:

Current:

Community Services 158 533 237 296 Public Works 17,285 27,420 10,645 16,775 Total Expenditures 17,443 27,953 10,882 17,071 OTHER FINANCING SOURCES (USES):

Transfers In 11,500 14,050 14,050 - Transfers Out (222) - - - Total Other Financing Sources (Uses) 11,278 14,050 14,050 - Net Change in Fund Balance (6,165) (13,903) 3,420 17,323 Fund Balance - Beginning of Year 17,065 17,065 17,065 - Fund Balance - End of Year 10,900$ 3,162$ 20,485$ 17,323$ EXPENDITURES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 6 $ 6 $ Total Revenues - - 6 6 EXPENDITURES:

Current:

Fire -
9,618 - 9,618
Total Expenditures - 9,618 - 9,618 OTHER FINANCING SOURCES (USES):

Issuance of Long-Term Debt - 868 868 - Total Other Financing Sources (Uses) - 868 868 - Net Change in Fund Balance - (8,750) 874 9,624 Fund Balance - Beginning of Year 8,753 8,753 8,753 - Fund Balance - End of Year 8,753$ 3 $ 9,627$ 9,624$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits 67 $ 6 7$ 6 6$ ( 1)$ Total Revenues 67 6 7 6 6 ( 1) EXPENDITURES:

Current:

Community Development 60
9 0 5 8 5
Total Expenditures 60 9 0 5 8 5 Net Change in Fund Balance 7 (23) 61 84 Fund Balance - Beginning of Year 658 658 658 - Fund Balance - End of Year 665$ 635$ 719$ 8 4$ Lease Capital Project

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
(In Thousands)
Infrastructure
Parking In-Lieu
154
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) - $ -$ (179)$ (179)$
Intergovernmental 12 12 12 -
Charges for Current Service 88 88 367 279
Total Revenues 100 100 200 100
EXPENDITURES:

Current:

Public Works 700 4,063 2,164 1,899
Total Expenditures 700 4,063 2,164 1,899
Net Change in Fund Balance (600) (3,963) (1,964) 1,999 Fund Balance - Beginning of Year 4,234 4,234 4,234 -
Fund Balance - End of Year 3,634$ 271$ 2,270$ 1,999$ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) - $ -$ (178)$ (178)$ Total Revenues - - (178) (178)
EXPENDITURES:

Current:

Information Systems - 2,176 81 2,095
Total Expenditures - 2,176 81 2,095
Net Change in Fund Balance - (2,176) (259) 1,917 Fund Balance - Beginning of Year 3,280 3,280 3,280 -
Fund Balance - End of Year 3,280$ 1,104$ 3,021$ 1,917$ Technology
Sewer Development

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
155
LMIHAF Capital Projects Fund
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property 600 $ 600$ 614$ 1 4$
Total Revenues 600 600 614 1 4
EXPENDITURES:

Current:

Community Development 167 187 5 6 131
Total Expenditures 167 187 5 6 131
Excess of Revenues Over (Under) Expenditures 433 413 558 145 OTHER FINANCING SOURCES (USES):

Transfers In - 900 900 -
Transfers Out (414) (406) (224) 182
Total Other Financing Sources (Uses) (414) 494 676 182
Net Change in Fund Balance 19 907 1,234 327
Fund Balance - Beginning of Year 3,622 3,622 3,622 -
Fund Balance - End of Year 3,641$ 4,529$ 4,856$ 327$ Pension Liability Debt Service Fund
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Property Taxes 6,126 $ 6,126 $ 7,912 $ 1,786 $ Use of Money and Property - - 192 192
Charges for Current Service - 16,446 16,764 318 Total Revenues 6,126 22,572 24,868 2,296 EXPENDITURES:

Current:

Finance - 2 2 -
Debt Service:

Principal 11,635 11,635 10,821 814 Interest 10,937 10,935 10,259 676 Total Expenditures 22,572 22,572 21,082 1,490 Excess of Revenues Over (Under) Expenditures (16,446) - 3,786 3,786 OTHER FINANCING SOURCES (USES):

Transfers In 16,446 - - -
Total Other Financing Sources (Uses) 16,446 - - - Net Change in Fund Balance - - 3,786 3,786
Fund Balance - Beginning of Year 16,943 16,943 16,943 - Fund Balance - End of Year 16,943$ 16,943$ 20,729$ 3,786$

CITY OF HUNTINGTON BEACH
(In Thousands)

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
156

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157

City of Huntington Beach
Internal Service Funds

Internal Services Funds are used to accumulate and allocate costs internally among the City’s various functions.

 The Self Insurance Workers’ Comp Fund accounts for the City’s self insurance workers’ compensation program.  The Self Insurance General Liability Fund accounts for the City’s self insurance general liability program.  The Equipment Replacement Fund accounts for the City’s equipment replacement needs.

158
Self Insurance
Workers' Comp
Self Insurance
General Liability
Equipment
Replacement
Fund
Internal Service
Fund Total
ASSETS
Current Assets:

Cash and Investments 17,110 $ 9,860 $ 11,039$ 38,009$ Other Receivables, Net 46 27 29 102 Prepaids 600 - 195 795 Total Current Assets 17,756 9,887 11,263 38,906 Non-Current Assets:

Net Pension Asset 388 - - 388 Net Other Postemployment Benefits Asset 20 9 - 2 9 Total Non-Current Assets 408 9 - 417 Capital Assets:

Machinery and Equipment - - 8,598 8,598 Less Accumulated Depreciation - - (2,372) (2,372) Total Capital Assets - - 6,226 6,226 Total Assets 18,164 9,896 17,489 45,549

DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 78 - - 78 Deferred Outflows Related to Other Postemployment Benefits 16 7 - 2 3 Total Deferred Outflows of Resources 94 7 - 101 Total Assets and Deferred Outflows of Resources 18,258 9,903 17,489 45,650

LIABILITIES
Current Liabilities:

Accounts Payable 613 26 26 665 Accrued Payroll 19 - - 19 Interest Payable 1 - - 1 Current Portion of Claims Payable 6,993 6,446 - 13,439 Current Portion of Compensated Absences 11 - - 1 1 Total Current Liabilities 7,637 6,472 2 6 14,135 Non-Current Liabilities:

Compensated Absences 30 - - 30 Long-Term Obligations Due Within One Year 43 - - 43 Long-Term Obligations Due in More than One Year 986 - - 986 Net Pension Liability 34 - - 34 Claims Payable 35,770 7,222 - 42,992 Total Non-Current Liabilities 36,863 7,222 - 44,085 Total Liabilities 44,500 13,694 2 6 58,220

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 429 - - 429 Deferred Inflows Related to Other Postemployment Benefits 37 1 6 - 5 3 Total Deferred Inflows of Resources 466 1 6 - 482

NET POSITION
Net Investment in Capital Assets - - 6,226 6,226 Unrestricted (26,708) (3,807) 11,237 (19,278) Total Net Position (26,708) (3,807) 17,463 (13,052) Total Liabilities, Deferred Inflows
of Resources, and Net Position 18,258 $ 9,903$ 17,489$ 45,650$ Governmental Activities

CITY OF HUNTINGTON BEACH

STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS
June 30, 2022
(In Thousands)
159
Self Insurance
Workers' Comp
Self Insurance
General Liability
Equipment
Replacement
Fund
Internal Service
Fund Total

OPERATING REVENUES
Fees and Charges for Service 9,806 $ 6,238 $ 6,037$ 22,081$ Other 26 126 - 152 Total Operating Revenues 9,832 6,364 6,037 22,233

OPERATING EXPENSES
Supplies and Operations 1,528 253 1,718 3,499 Claims and Judgments 14,556 7,557 - 22,113 Depreciation - - 1,012 1,012 Total Operating Expenses 16,084 7,810 2,730 26,624 Operating Income (Loss) (6,252) (1,446) 3,307 (4,391)

NON-OPERATING REVENUES (EXPENSES)
Investment Income (Loss) (843) (527) (520) (1,890) Interest Expense (29) - - (29) Proceeds from Sale of Equipment - - 1,699 1,699 Total Non-Operating Revenues (Expenses) (872) (527) 1,179 (220) Income (Loss) Before Transfers (7,124) (1,973) 4,486 (4,611) Change in Net Position (7,124) (1,973) 4,486 (4,611) Net Position - Beginning of Year (19,584) (1,834) 12,977 (8,441) Net Position - End of Year (26,708)$ (3,807)$ 17,463$ (13,052)$

CITY OF HUNTINGTON BEACH

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
Governmental Activities
160
Self Insurance
Workers' Comp
Self Insurance
General Liability
Equipment
Replacement
Fund
Internal Service
Fund Total

CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers and Users 9,834 $ 6,367 $ 6,026$ 22,227$ Cash Paid to Employees for Services (370) (8) - (378) Cash Paid to Suppliers of Goods and Services (7,639) (6,309) (1,554) (15,502) Net Cash and Investment Provided (Used) by
Operating Activities 1,825 5 0 4,472 6,347

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Debt Service (37) - - (37) Interest Paid (32) - - (32) Net Cash and Investments Provided (Used) by
Noncapital Financing Activities (69) - - (69)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Purchase of Capital Assets - - (1,934) (1,934) Proceeds from Sale of Plant, Property, and Equipment -
- 1,699 1,699 Net Cash and Investments Provided (Used) by
Capital and Related Financing Activities - - (235) (235)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment (Loss) (843) (527) (520) (1,890) Net Cash and Investments Provided (Used) by
Investing Activities (843) (527) (520) (1,890) Net Increase in Cash and Investments 913 (477) 3,717 4,153 Cash and Investments - Beginning of Year 16,197 10,337 7,322 33,856 Cash and Investments - End of Year 17,110$ 9,860$ 11,039$ 38,009$

RECONCILIATION OF OPERATING

INCOME (LOSS) TO NET CASH AND INVESTMENTS

PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) (6,252) $ (1,446) $ 3,307$ (4,391)$ Adjustments to Reconcile Operating
Income (Loss) to Net Cash and Investments
Provided (Used) by Operating Activities
Depreciation - - 1,012 1,012 Decrease (Increase) in Other Receivables, Net 2 3 (11) (6) Decrease in Prepaids - - 282 282 (Increase) in Net Pension Asset (388) - - (388) (Increase) in Net Other Postemployment Benefits Asset (20) (9) - (29) Increase (Decrease) in Accounts Payable 254 (186) (118) (50) Increase in Accrued Payroll 3 - - 3 Increase in Claims Payable 7,969 1,683 - 9,652 (Decrease) in Compensated Absences (3) - - (3) Decrease in Deferred Pension Outflow 1,156 - - 1,156 Increase in Deferred Pension Inflow 368 - - 368 (Decrease) in Net Pension Liability (1,275) - - (1,275) (Increase) in Deferred Other Postemployment Benefits Outflow (6) (2) - (8) Increase in Deferred Other Postemployment Benefits Inflow 28 12 - 40 (Decrease) in Net Other Postemployment Benefits Liability (11) ( 5) - (16) Net Cash and Investments Provided (Used)
by Operating Activities 1,825$ 5 0$ 4,472$ 6,347$

NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES
There were no noncash investing, capital, or financing activities during the year ended June 30, 2022.

Governmental Activities

CITY OF HUNTINGTON BEACH

STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
(In Thousands)
161

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162

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163

City of Huntington Beach
Fiduciary Funds

Fiduciary Funds account for assets held by the City as a custodian for other organizations or individuals.

 The Community Facilities Districts Funds accounts for the debt service activity of the City’s three community facilities districts.
 The Huntington Beach Business Improvement District Fund accounts for the activities of the City’s business improvement district.
 The Bella Terra Parking Structure Fund accounts for the activities of the Bella Terra Parking Structure.

164
Custodial Funds
ASSETS:

Community
Facilities
Districts
Business
Improvement
Districts
Parking
Structure - Bella
Terra
Total Custodial
Funds
Current Assets:

Cash and Investments 1,321 $ 1,409 $ $ 1,995 $ 4,725 Cash with Fiscal Agent 1,586 - 1,682 3,268 Accounts Receivable, Net 3 751 6 760 Total Assets 2,910 2,160 3,683 8,753 LIABILITIES:

Current Liabilities:

Accounts Payable - 1,849 221 2,070 Total Liabilities - 1,849 221 2,070

NET POSITION
Restricted for:

Restricted for Individuals and Organizations 2,910 311 3,462 6,683 Total Net Position 2,910$ 311$ 3,462$ 6,683$

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Custodial Funds

ADDITIONS
Community
Facilities
Districts
Business
Improvement
Districts
Parking
Structure - Bella
Terra
Total Custodial
Funds
Special Assessments or Special Taxes
Collected from Property Owners 1,542 $ - $ - $ 1,542$ Business Improvement District Taxes - 6,355 - 6,355 Parking Assessments - - 2,433 2,433 Interest Income 7 - 1 2 1 9 Total Additions 1,549 6,355 2,445 10,349

DEDUCTIONS
Administrative Costs 20 - - 20 Payments to other Organizations - 6,211 811 7,022 Interest and Fiscal Agency Expenses 664 - 771 1,435 Principal 825 - 890 1,715 Total Deductions 1,509 6,211 2,472 10,192 Change in Net Position 40 144 (27) 157 Net Position - Beginning of Year 2,870 167 3,489 6,526 Net Position - End of Year 2,910 $ 311$ 3,462$ 6,683$

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF FIDUCIARY FUND ASSETS AND LIABILITIES

FIDUCIARY FUNDS
JUNE 30, 2022
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166

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167

City of Huntington Beach
Statistical Section

This part of the City of Hunti ngton Beach’s Annual Comprehensive Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the City’s overall financial health.

Financial Trends – contains trend information to help the reader understand how th e City’s financial performance has changed over time.

Revenue Capacity – contains information to help the reader assess the City’s most significant local revenue source, the property tax.

Debt Capacity – presents information to assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.

Demographic and Economic Information – offers information to help the reader understand the environment within which the City’s financial activities take place.

Operating Information – contains service and infrastructure data to help the reader understand how the City’s financial report relates to the services the City provides and the activities it performs.

Unless otherwise noted, the information in these schedules is d erived from the annual comprehensive financial reports for the relevant year.

168

Governmental Activities 2022 2021 2020 2019 2018***
Net investment in capital assets 712,289$ 699,204$ 673,498$ 664,281$ 650,466$ Restricted 68,460 65,755 79,926 66,089 58,537 Unrestricted (223,438) (275,159) (274,523) (251,022) (254,528) Total Governmental Activities Net Position 557,311$ 489,800$ 478,901$ 479,348$ 454,475$ Business-Type Activities
Net investment in capital assets 143,998$ 142,469 $ 142,785 $ 145,696 $ 143,954 $ Restricted 19,309 20,332 22,248 21,153 25,886 Unrestricted 34,120 39,129 38,482 36,747 27,492 Total Business-Type Activities Net Position 197,427$ 201,930$ 203,515$ 203,596$ 197,332$ Primary Government
Net investment in capital assets 856,287$ 841,673 $ 816,283 $ 809,977 $ 794,420 $ Restricted 87,769 86,087 102,174 87,242 84,423 Unrestricted (189,318) (236,030) (236,041) (214,275) (227,036) Total Primary Government Net Position 754,738$ 691,730$ 682,416$ 682,944$ 651,807$ Expenses:

Governmental Activities: 2022 2021 2020 2019 2018***
City Council 382 $ 423 $ 405 $ 360 $ 218 $ City Manager 5,412 11,163 3,328 4,501 2,063 City Treasurer 259 340 317 246 101 City Attorney 2,183 3,140 3,136 2,886 1,536 City Clerk 1,060 1,147 949 976 475 Finance 5,581 6,828 6,661 6,245 3,455 Human Resources***** - - - 6,261 4,760 Community Development* 11,634 19,716 15,722 6,144 4,301 Fire 52,808 65,960 62,840 56,494 26,688 Information Services 6,469 6,230 8,643 7,530 4,375 Police 73,964 102,415 97,204 87,355 42,109 Economic Development** - - - - - Community Services 11,517 11,365 12,539 13,369 6,768 Library Services 5,212 6,181 5,776 5,206 2,890 Public Works 42,598 40,270 45,834 40,803 23,898 Non-Departmental**** - - - - 18,164 Interest on Long-Term Debt 9,548 2,706 1,686 1,823 1,467 Total Governmental Activities 228,627 277,884 265,040 240,199 143,268 Business-Type Activities
Water Utility 44,182 46,054 44,463 43,405 28,414 Sewer Service 10,390 9,284 9,828 9,442 6,127 Refuse Collection 13,738 12,936 12,609 12,051 8,916 Hazmat Service 236 241 235 234 117 Total Business-Type Activities 68,546 68,515 67,135 65,132 43,574 Total Business and Government Type Activities 297,173 $ 346,399$ 332,175$ 305,331$ 186,842$ * Planning and Building departments were combined in Fiscal Year ended September 30, 2011. The combined department was later renamed to Community Development in Fiscal Year ended September 30, 2016. ** Economic Development was combined with Community Development in Fiscal Year ended June 30, 2020. Previously, it was combined with the City Manager's Office as of Fiscal Year ended September 30, 2014. *** The 2018 period reflects nine months of activity only as the fiscal year change resulted in reporting period from October 1, 2017 to June 30, 2018.

CITY OF HUNTINGTON BEACH

CITY OF HUNTINGTON BEACH
Fiscal Year Ended
(In Thousands)

NET POSITION BY COMPONENT - LAST TEN FISCAL YEARS
June 30,
June 30,

CHANGES IN NET POSITION - LAST TEN FISCAL YEARS
(In Thousands)
Fiscal Year Ended
169

Governmental Activities 2017 2016 2015 2014 2013
Net investment in capital assets 646,336$ 624,180$ 615,512$ 618,825$ 617,267$ Restricted 41,888 41,555 52,270 34,018 51,867 Unrestricted (262,874) (222,863) (222,787) 89,524 54,076 Total Governmental Activities Net Position 425,350$ 442,872$ 444,995$ 742,367$ 723,210$ Business-Type Activities
Net investment in capital assets 140,478$ 142,566 $ 142,616 $ 140,770 $ 145,886 $ Restricted 30,444 32,049 28,096 27,951 27,488 Unrestricted 22,228 21,997 28,476 53,166 65,595 Total Business-Type Activities Net Position 193,150$ 196,612$ 199,188$ 221,887$ 238,969$ Primary Government
Net investment in capital assets 786,814$ 766,746 $ 758,128 $ 759,595 $ 763,153 $ Restricted 72,332 73,604 80,366 61,969 79,355 Unrestricted (240,646) (200,866) (194,311) 142,690 119,671 Total Primary Government Net Position 618,500$ 639,484$ 644,183$ 964,254$ 962,179$ Expenses:

Governmental Activities: 2017 2016 2015 2014 2013
City Council 347 $ 321 $ 270 $ 258 $ 271 $ City Manager 4,691 3,849 3,302 3,878 1,583 City Treasurer 216 208 158 169 132 City Attorney 3,307 2,598 2,284 2,321 2,221 City Clerk 889 806 855 747 797 Finance 6,201 5,765 5,208 5,314 4,825 Human Resources***** 5,693 6,814 5,169 4,616 5,032 Community Development* 7,576 7,208 6,605 7,091 6,155 Fire 52,941 47,965 42,162 43,194 36,323 Information Services 7,047 6,852 6,552 6,456 6,096 Police 84,786 74,943 64,048 66,681 60,466 Economic Development** - - - - 8,395 Community Services 15,558 9,935 13,809 12,509 15,521 Library Services 5,064 4,611 4,246 4,024 3,873 Public Works 35,373 31,791 27,979 31,691 28,500 Non-Departmental**** 29,368 35,240 24,080 21,602 25,563 Interest on Long-Term Debt 2,063 2,119 2,245 1,946 2,289 Total Governmental Activities 261,120 241,025 208,972 212,497 208,042 Business-Type Activities
Water Utility 45,940 41,643 38,614 41,499 38,446 Sewer Service 9,351 8,729 8,192 9,712 7,253 Refuse Collection 10,821 11,277 11,308 11,145 10,882 Hazmat Service 224 244 204 231 220 Total Business-Type Activities 66,336 61,893 58,318 62,587 56,801 Total Business and Government Type Activities 327,456 $ 302,918$ 267,290$ 275,084$ 264,843$ **** Beginning with Fiscal Year ended June 30, 2019, non-departmental expenditures are no longer presented separately but are included as part of functional expenditures.
***** Human Resources was combined with the City Manager's Office in Fiscal Year ended June 30, 2020.

CITY OF HUNTINGTON BEACH

NET POSITION BY COMPONENT - LAST TEN FISCAL YEARS
(In Thousands)
(continued)
Fiscal Year Ended
September 30,
September 30,

CHANGES IN NET POSITION - LAST TEN FISCAL YEARS
(In Thousands)
(continued)
Fiscal Year Ended
170

Program Revenues:

Governmental Activities: 2022 2021 2020 2019 2018***
Charges for Services
City Council 162$ 162$ 177$ 149$ 91$ City Manager 4,131 4,208 5,315 3,300 2,374 City Treasurer 149 149 163 135 81 City Attorney 5 6 7 7 4 City Clerk 269 30 220 327 229 Finance 3,036 3,055 3,302 2,899 1,746 Human Resources***** - - - 751 373 Community Development* 10,953 8,353 10,037 7,459 5,448 Fire 13,401 8,877 10,122 9,831 9,104 Information Services 604 610 636 628 381 Police 6,687 6,477 5,329 6,044 4,703 Economic Development** - - - - - Community Services 21,117 15,558 17,631 23,530 19,245 Library Services 302 153 266 308 237 Public Works 7,235 6,045 6,614 6,368 4,392 Non-Departmental**** - - - - 916 Total Charges for Services 68,051 53,683 59,819 61,736 49,324 Operating Grants 9,301 6,013 8,141 6,644 3,976 Capital Grants 8,537 10,192 14,483 8,361 6,055 Total Governmental Activities Program Revenue 85,889 69,888 82,443 76,741 59,355 Business-Type Activities:

Water Utility 43,590 42,523 40,518 43,958 29,530 Sewer Service 10,791 10,828 10,900 11,868 8,362 Refuse Collection 13,675 13,014 12,573 12,022 8,820 Hazmat Service 276 266 279 276 2 5 Total Business-Type Activities Program Revenues 68,332 66,631 64,270 68,124 46,737 Total Primary Government Program Revenue 154,221 136,519 146,713 144,865 106,092 Net (Expense) Revenue:

Governmental Activities (142,738) (207,996) (182,597) (163,458) (83,913) Business-Type Activities (214) (1,884) (2,865) 2,992 3,163 Total Net (Expense) Revenue (142,952) (209,880) (185,462) (160,466) (80,750) General Revenue and Other Changes in Net Position
Governmental Activities:

Property Taxes 102,539 99,958 94,263 89,124 61,185 Sales Taxes 57,652 51,162 44,616 47,437 33,844 Utility Taxes 19,528 18,374 18,149 18,788 14,014 Other Taxes 26,134 17,293 18,635 20,227 14,883 Use of Money and Property (1,895) 4,399 3,208 8,746 2,158 From Other Agencies 4,631 22,000 3,317 4,046 2,263 Gain on Sale of Property 1,699 - - - - Other - - - - 2,811 Transfers (39) (38) (38) (37) (332) Total Governmental Activities General Revenues 210,249 213,148 182,150 188,331 130,826 Business-Type Activities:

Use of Money and Property (4,328) 261 2,746 3,235 279 Transfers 39 38 38 37 332 Total Business-Type Activities General Revenues (4,289) 299 2,784 3,272 611 Total General Revenues and Transfers 205,960 213,447 184,934 191,603 131,437 Extraordinary Gain - - - - - Changes in Net Position - Governmental Activities 67,511 5,152 (447) 24,873 46,913 Changes in Net Position - Business-Type Activities (4,503) (1,585) (81) 6,264 3,774 Total Changes in Net Position 63,008 3,567 (528) 31,137 50,687 Net Position - Beginning of Year 691,730 682,416 682,944 651,807 618,500 Prior Period Adjustment - Governmental Activities - 5,747 - - (17,788) Prior Period Adjustment - Business-Type Activities - - - - 408 Net Position - Beginning of Year as restated 691,730 688,163 682,944 651,807 601,120 Net Position - End of Year 754,738$ 691,730$ 682,416$ 682,944$ 651,807$ * Planning and Building departments were combined in the Fiscal Year ended September 30, 2011. The combined department was later renamed to Community Development in Fiscal Year ended September 30, 2016. ** Economic Development was combined with Community Development in the Fiscal Year ended June 30, 2020. Previously, it was combined with the City Manager's Office as of Fiscal Year ended September 30, 2014.

Fiscal Year Ended

CHANGES IN NET POSITION - LAST TEN FISCAL YEARS

CITY OF HUNTINGTON BEACH
(In Thousands)
June 30,
171

Program Revenues:

Governmental Activities: 2017 2016 2015 2014 2013
Charges for Services
City Council 108$ 116$ 71$ 68$ 66$ City Manager 3,515 3,029 2,994 2,835 134 City Treasurer 100 101 639 621 602 City Attorney 5 4 143 139 135 City Clerk 257 201 199 321 248 Finance 2,047 2,277 1,353 1,313 1,275 Human Resources***** 654 513 1,263 2,499 1,236 Community Development* 7,448 9,252 10,670 9,357 9,411 Fire 10,296 9,894 8,625 8,672 9,482 Information Services 501 521 834 809 786 Police 4,968 5,958 5,512 5,170 4,653 Economic Development** - - - - 2,505 Community Services 21,693 18,853 18,569 18,055 17,832 Library Services 476 408 495 434 634 Public Works 5,392 5,733 6,474 6,367 7,315 Non-Departmental**** 1,116 1,290 327 318 306 Total Charges for Services 58,576 58,150 58,168 56,978 56,620 Operating Grants 7,329 4,723 7,458 7,958 7,303 Capital Grants 3,408 5,939 9,809 5,486 7,191 Total Governmental Activities Program Revenue 69,313 68,812 75,435 70,422 71,114 Business-Type Activities:

Water Utility 39,938 35,765 35,350 36,944 38,679 Sewer Service 10,854 11,280 11,239 10,665 12,267 Refuse Collection 11,282 11,215 11,221 11,006 10,950 Hazmat Service 287 235 222 183 278 Total Business-Type Activities Program Revenues 62,361 58,495 58,032 58,798 62,174 Total Primary Government Program Revenue 131,674 127,307 133,467 129,220 133,288 Net (Expense) Revenue:

Governmental Activities (191,807) (172,213) (133,537) (142,075) (136,928) Business-Type Activities (3,975) (3,398) (286) (3,789) 5,373 Total Net (Expense) Revenue (195,782) (175,611) (133,823) (145,864) (131,555) General Revenue and Other Changes in Net Position
Governmental Activities:

Property Taxes 82,925 87,128 82,615 81,355 74,795 Sales Taxes 43,551 34,289 33,063 29,243 30,276 Utility Taxes 19,303 19,482 20,229 20,621 20,764 Other Taxes 17,991 17,313 16,464 15,601 14,568 Use of Money and Property 3,370 3,618 5,551 3,725 2,816 From Other Agencies 3,896 4,397 5,653 4,279 6,003 Gain on Sale of Property - - - - - Other 2,438 5,693 4,440 6,903 5,240 Transfers (51) (38) 35 (38) (38) Total Governmental Activities General Revenues 173,423 171,882 168,050 161,689 154,424 Business-Type Activities:

Use of Money and Property 462 939 1,281 1,015 137 Transfers 51 38 (35) 38 3 8 Total Business-Type Activities General Revenues 513 977 1,246 1,053 175 Total General Revenues and Transfers 173,936 172,859 169,296 162,742 154,599 Extraordinary Gain - - - - (4,669) Changes in Net Position - Governmental Activities (18,384) (331) 34,513 19,614 12,827 Changes in Net Position - Business-Type Activities (3,462) (2,421) 960 (2,736) 5,548 Total Changes in Net Position (21,846) (2,752) 35,473 16,878 18,375 Net Position - Beginning of Year 639,484 642,236 964,254 962,179 935,283 Prior Period Adjustment - Governmental Activities 862 - (333,677) (457) 719 Prior Period Adjustment - Business-Type Activities - - (23,814) (14,346) 7,802 Net Position - Beginning of Year as restated 640,346 642,236 606,763 947,376 943,804 Net Position - End of Year 618,500$ 639,484$ 642,236$ 964,254$ 962,179$ *** The 2018 period reflects nine months of activity only as the fiscal year change resulted in reporting period from October 1, 2017 to June 30, 2018. **** Beginning with the Fiscal Year ended June 30, 2019, non-departmental expenditures are no longer presented separately but are included as part of functional expenditures.
***** Human Resources was combined with the City Manager's Office in the Fiscal Year ended June 30, 2020.

September 30,

CITY OF HUNTINGTON BEACH

CHANGES IN NET POSITION - LAST TEN FISCAL YEARS
(In Thousands)
Fiscal Year Ended
(continued)
172

2022 2021 2020 2019 2018
General Fund:

Nonspendable 82$ 115$ 120$ 23$ 41$ Restricted 14,623 13,561 9,320 8,154 6,384 Committed 26,665 25,565 25,010 25,011 25,011 Assigned 61,454 55,368 45,638 45,825 34,464 Unassigned - - - - 2 ,734 Total General Fund 102,824 $ 94,609$ 80,088$ 79,013$ 68,634$ Other Governmental Funds:

Nonspendable - $ 105$ 50 $ 64 $ 726 $ Restricted 75,774 70,161 71,671 59,213 52,742 Committed 28,559 26,857 21,735 20,308 20,800 Assigned 3,021 3,280 3,527 3,614 2,701 Unassigned (4,311) - - - - Total Other Governmental Funds 103,043$ 100,403$ 96,983$ 83,199$ 76,969$ 2017 2016 2015 2014 2013
General Fund:

Nonspendable -$ -$ 4,479$ 4,378$ 4,040$ Restricted 2,671 2,637 2,871 2,070 1,878 Committed 25,011 25,011 25,011 25,011 24,011 Assigned 33,498 35,199 32,431 29,595 24,578 Total General Fund 61,180 $ 62,847$ 64,792$ 61,054$ 54,507$ Other Governmental Funds:

Restricted 40,588 $ 40,293 $ 45,515 $ 27,214 $ 27,425 $ Committed 17,686 21,368 21,659 16,447 11,098 Assigned 826 838 161 151 316 Unassigned - - - - (210) Total Other Governmental Funds 59,100$ 62,499$ 67,335$ 43,812$ 38,629$ Fiscal Year Ended September 30,

CITY OF HUNTINGTON BEACH

FUND BALANCES - GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (In Thousands)
(Modified Accrual Basis of Accounting)
Fiscal Year Ended June 30,
173

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174

2022 2021 2020 2019 2018*
REVENUES:

Property Taxes 102,539$ 99,958$ 94,263$ 89,367$ 80,614$ Sales Taxes 57,652 51,162 44,616 47,437 33,844 Utility Taxes 19,528 18,374 18,149 18,788 14,014 Other Taxes 33,720 25,745 24,578 27,196 18,409 Licenses and Permits 9,596 8,213 11,266 8,574 6,293 Fines and Forfeitures 5,144 4,619 3,403 4,300 3,048 From Use of Money and Property 14,365 19,163 27,863 23,276 11,600 From Other Agencies 13,060 29,836 11,309 13,072 10,384 Charges for Current Service/Other Revenue 52,809 27,428 34,772 33,787 30,216 TOTAL REVENUES 308,413 284,498 270,219 265,797 208,422

EXPENDITURES
Current:

City Council 426 1,043 394 369 279 City Manager 5,265 15,976 4,342 6,598 3,143 City Treasurer 326 837 297 248 134 City Attorney 2,995 7,714 2,898 2,874 2,037 City Clerk 1,295 2,810 886 981 602 Finance 7,259 16,173 6,200 6,484 4,376 Human Resources****** - - - 6,362 5,323 Community Development** 14,412 39,212 14,692 8,138 5,554 Fire 62,880 149,726 56,477 54,431 36,347 Information Systems 7,871 19,095 8,473 8,342 5,385 Police 93,976 232,438 87,682 83,546 57,916 Economic Development*** - - - - - Community Services 18,455 25,064 14,429 11,720 7,958 Library Services 6,300 14,099 5,199 4,944 3,436 Public Works 50,158 88,007 47,655 46,878 30,357 Non-Departmental***** - - - - 22,432 Capital Outlay**** - - - - - Debt Service:

Principal 15,918 3,983 5,122 5,346 311 Interest 11,299 937 1,748 1,890 965 TOTAL EXPENDITURES 298,835 617,114 256,494 249,151 186,555

EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER) EXPENDITURES 9,578 (332,616) 13,725 16,646 21,867 OTHER FINANCING SOURCES (USES):

Transfers In 21,642 13,058 10,009 11,190 13,261 Issuance of Long-Term Debt - 372,010 1,172 - - Issuance Premium - 1,743 - - - Issuance Discount - (649) - - - Payments to Escrow - (28,256) - - - Lease (as Lessee) 448 - - - - Issuance of Finance Purchase Agreement 868 - - - - Transfers Out (21,681) (13,096) (10,047) (11,227) (13,593) TOTAL OTHER FINANCING SOURCES (USES) 1,277 344,810 1,134 (37) (332) Extraordinary Item - Dissolution of RDA - - - - - INCREASE (DECREASE) IN FUND BALANCES 10,855$ 12,194$ 14,859$ 16,609$ 21,535$

DEBT SERVICE AS A PERCENTAGE OF
NON-CAPITAL EXPENDITURES 10.1% 0.9% 3.0% 3.3% 0.7%
* The 2017/18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018.
** Planning and Building departments were combined in Fiscal Year ended September 30, 2011. The department was later renamed to Community Development in Fiscal Year ended September 30, 2016. *** Economic Development was combined with Community Development in Fiscal Year ended June 30, 2020. Previously, it was combined with the City Manager's Office as of the Fiscal Year ended September 30, 2014. (Modified Accrual Basis of Accounting)
Fiscal Year Ended
June 30,

CITY OF HUNTINGTON BEACH

CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS
(In Thousands)
175

(continued)
2017 2016 2015 2014 2013
REVENUES:

Property Taxes 80,826$ 86,382$ 82,472$ 79,460$ 74,442$ Sales Taxes 43,551 39,305 32,234 30,454 29,763 Utility Taxes 19,303 19,482 20,229 20,621 20,764 Other Taxes 17,991 17,313 16,464 15,601 14,568 Licenses and Permits 8,812 9,820 9,270 7,976 9,880 Fines and Forfeitures 3,995 5,144 4,746 4,392 4,058 From Use of Money and Property 17,210 18,055 17,473 16,695 16,046 From Other Agencies 15,293 13,712 18,634 16,804 18,237 Charges for Current Service/Other Revenue 32,351 32,506 35,869 33,886 34,150 TOTAL REVENUES 239,332 241,719 237,391 225,889 221,908

EXPENDITURES
Current:

City Council 333 318 278 258 260 City Manager 4,116 3,092 2,703 3,040 1,574 City Treasurer 201 204 167 169 132 City Attorney 3,052 2,539 2,425 2,321 2,221 City Clerk 830 790 895 747 797 Finance 5,763 5,659 5,452 5,314 4,825 Human Resources****** 5,535 6,776 4,606 4,298 5,661 Community Development** 6,963 7,062 6,954 7,091 6,155 Fire 46,831 46,200 45,008 42,602 35,920 Information Systems 6,603 6,742 6,846 6,456 6,096 Police 75,015 72,612 68,940 66,628 60,460 Economic Development*** - - - - 7,012 Community Services 14,124 10,768 10,223 10,040 13,952 Library Services 4,422 4,247 4,146 3,739 3,588 Public Works 38,635 23,659 23,820 22,872 22,169 Non-Departmental***** 28,396 24,670 20,067 21,033 19,684 Capital Outlay**** - 27,269 14,986 10,729 10,745 Debt Service:

Principal 5,091
5,933 5,454 4,797 9,381 Interest 2,066 2,138 2,226 1,987 2,321 TOTAL EXPENDITURES 247,976 250,678 225,196 214,121 212,953

EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER) EXPENDITURES (8,644) (8,959) 12,195 11,768 8,955 OTHER FINANCING SOURCES (USES):

Transfers In 6,692 9,034 12,158 9,832 9,501 Issuance of Long-Term Debt 2,767 10,197 - Issuance Premium - - - - - Issuance Discount - - - - - Payments to Escrow - - - - - Lease (as Lessee) - - - - - Issuance of Finance Purchase Agreement - - - - - Transfers Out (6,743) (17,053) (14,238) (9,870) (10,339) TOTAL OTHER FINANCING SOURCES (USES) 2,716 2,178 (2,080) (38) (838) Extraordinary Item - Dissolution of RDA - - - - (4,669) INCREASE (DECREASE) IN FUND BALANCES (5,928)$ (6,781)$ 10,115$ 11,730$ 3,448$

DEBT SERVICE AS A PERCENTAGE OF
NON-CAPITAL EXPENDITURES 3.2% 3.6% 3.7% 3.3% 5.8%
**** Beginning with the Fiscal Year ended September 30, 2017, capital outlay expenditures are no longer presented separately but are included as part of functional expenditures. However, capital outlay expenditures are excluded in the calculation of debt service as a percentage of non-capital expenditures.
***** Beginning with the Fiscal Year ended June 30, 2019, non-departmental expenditures are no longer presented separately but are included as part of functional expenditures.
****** Human Resources was combined with the City Manager's Office in Fiscal Year ended June 30, 2020.

September 30,
(Modified Accrual Basis of Accounting)
Fiscal Year Ended

CITY OF HUNTINGTON BEACH

CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS
(In Thousands)
176

Fiscal Year
Common
Property Public Utilities Total Secured Unsecured
Total Assessed
Valuation
Total Direct Tax
Rate
2012-2013 26,927,738 60,802 26,988,540 1,056,938 28,045,478 0.17082 2013-2014 28,005,989 53,702 28,059,691 1,106,038 29,165,729 0.17082 2014-2015 29,723,274 74,102 29,797,376 989,809 30,787,185 0.17082 2015-2016 31,193,211 66,802 31,260,013 1,132,728 32,392,741 0.17082 2016-2017 32,540,317 55,802 32,596,119 1,067,760 33,663,879 0.17082 2017-2018 34,199,035 41,102 34,240,137 1,100,077 35,340,214 0.17082 2018-2019 35,941,648 61,202 36,002,850 1,117,879 37,120,729 0.17082 2019-2020 37,741,095 518 37,741,613 1,145,838 38,887,451 0.17082 2020-2021 39,449,688 518 39,450,206 1,111,018 40,561,224 0.17082 2021-2022 40,789,946 518 40,790,464 1,041,429 41,831,893 0.17082 Source: County of Orange Auditor Controller
Fiscal Year
City Basic Rate
(1), (2) City Other School Districts
Metro Water
District Others
2012-2013 0.15582 0.01500 0.60412 0.00350 0.30798 1.08642 2013-2014 0.15582 0.01500 0.59841 0.00350 0.31444 1.08717 2014-2015 0.15582 0.01500 0.62448 0.00350 0.29444 1.09324 2015-2016 0.15582 0.01500 0.07615 0.00350 0.84418 1.09465 2016-2017 0.15582 0.01500 0.07786 0.00350 0.83599 1.08817 2017-2018 0.15582 0.01500 0.09970 0.00350 0.84418 1.11820 2018-2019 0.15582 0.01500 0.09246 0.00350 0.84418 1.11096 2019-2020 0.15582 0.01500 0.08788 0.00350 0.84418 1.10638 2020-2021 0.15582 0.01500 0.07983 0.00350 0.84418 1.09833 2021-2022 0.15582 0.01500 0.07541 0.00350 0.84418 1.09391 Note: Rates are per $100 of assessed valuation
Source: County of Orange Auditor Controller

(1) Excludes rates associated with Mello-Roos Districts (2) In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1% fixed amount. This 1% is shared by all taxing agencies for which the subject property resides. In 1986, the State Constitution was amended to allow rates over the 1% base rate for voter approved general obligation debt. Valuations of real property are frozen at the value of the property in 1975, with an allowable adjustment up to 2% per year for inflation. However, property is assessed to its current value when a change of ownership occurs. New construction, including tenant improvements, is assessed at its current value.

Direct
Total Direct and
Overlapping
Overlapping

CITY OF HUNTINGTON BEACH

ASSESSED AND ACTUAL VALUATION

OF ALL TAXABLE PROPERTY (EXCLUDING REDEVELOPMENT AGENCY)

LAST TEN FISCAL YEARS

LAST TEN FISCAL YEARS
(In Thousands)

PROPERTY TAX RATES

ALL DIRECT AND

OVERLAPPING GOVERNMENTS
TAX RATE 04-001

LARGEST AREA IN CITY
177

Fiscal Year Total Levy Amount
Percentage
of Levy
Delinquent
Tax
Collections Amount
Percentage
of Levy
Delinquent
Taxes
Receivable
Delinquency
Percent
Secured Taxes
2012-2013 47,162 45,722 96.9% 855 46,577 98.8% 565 1.2% 2013-2014 49,808 48,452 97.3% 656 49,108 98.6% 545 1.1% 2014-2015 52,188 50,759 97.3% 576 51,335 98.4% 519 1.0% 2015-2016 55,886 53,916 96.5% 546 54,462 97.5% 1,263 2.3% 2016-2017 58,258 56,481 96.9% 525 57,006 97.9% 1,253 2.2% 2017-2018 62,418 59,731 95.7% 474 60,205 96.5% 2,073 3.3% 2018-2019 63,934 62,222 97.3% 622 62,844 98.3% 920 1.4% 2019-2020 66,411 64,767 97.5% 496 65,263 98.3% 1,092 1.6% 2020-2021 69,341 67,887 97.9% 626 68,513 98.8% 926 1.3% 2021-2022 72,014 69,871 97.0% 714 70,585 98.0% 1,510 2.1% Unsecured Taxes
2012-2013 1,882 1,653 87.8% 23 1,676 89.1% 62 3.3% 2013-2014 1,922 1,693 88.1% 33 1,726 89.8% 76 4.0% 2014-2015 2,016 1,839 91.2% 37 1,876 93.1% 69 3.4% 2015-2016 1,925 1,740 90.4% 35 1,775 92.2% 39 2.0% 2016-2017 1,899 1,692 89.1% 23 1,715 90.3% 34 1.8% 2017-2018 1,964 1,829 93.1% 28 1,857 94.6% 26 1.3% 2018-2019 1,964 1,804 91.9% 20 1,824 92.9% 29 1.5% 2019-2020 2,038 1,906 93.5% 15 1,921 94.3% 43 2.1% 2020-2021 2,143 1,955 91.2% 26 1,981 92.4% 82 3.8% 2021-2022 2,267 2,059 90.8% 46 2,105 92.9% 90 4.0% Community Facilities Districts
2012-2013 4,093 4,077 99.6% 4 4,081 99.7% 4 0.1% 2013-2014 3,968 3,957 99.7% 6 3,963 99.9% - 0.0% 2014-2015 3,981 3,967 99.6% 1 3,968 99.7% 2 0.1% 2015-2016 4,121 4,106 99.6% 9 4,115 99.9% 2 0.0% 2016-2017 4,098 4,085 99.7% 2 4,087 99.7% - 0.0% 2017-2018 4,141 4,128 99.7% 5 4,133 99.8% - 0.0% 2018-2019 4,099 4,086 99.7% 3 4,089 99.8% 1 0.0% 2019-2020 4,053 4,027 99.4% 2 4,029 99.4% 14 0.3% 2020-2021 3,949 3,937 99.7% - 3,937 99.7% - 0.0% 2021-2022 3,987 3,975 99.7% - 3,975 99.7% - 0.0% Note:

The levy and tax year is for July 1st through June 30th and does not include the Redevelopment Agency. 2012/2013 to current fiscal year includes the following:

Unsecured: includes aircraft unsecured tax. Does not include CFDs.

Miscellaneous: excluded from all tables.

Delinquency Amount: reflects the "unpaid" amounts as stated in the OC Auditor-Controller website.

Secured: includes supplemental, st ltg reorg, nuisance abatement, weed abatement, retirement override, tax admin charges, and community interest. Does not include Community Facilities District CFDs.

CITY OF HUNTINGTON BEACH
Collected within the Fiscal
Year of the Levy Total Collections
Source: County of Orange Auditor Controller's Office
(In Thousands)

LAST TEN FISCAL YEARS

PROPERTY TAX LEVIES AND COLLECTIONS
178

2021-2022
Taxable Assessed Value Percent
(In Thousands) of Total TAV
AES Huntington Beach Energy, LLC 731,070$ 1.75% Bella Terra Associates LLC 392,816 0.94% CMFA Special Finance Agency VII 267,496 0.64% PCH Beach Resort LLC 225,699 0.54% DCO Pacific City LLC 223,353 0.53% Huntington Gateway Industrial LLC 160,803 0.38% The Waterfront Hotel LLC 147,232 0.35% Monogram Residential Huntington Beach 139,068 0.33% MC Donnell Douglas/Boeing 137,448 0.33% One Pacific Plaza Owner LLC 128,867 0.31% Total Top Ten 2,553,852 6.11% All Other Property Taxpayers 39,278,041 93.89% City Total 41,831,893$ 100.00%
2012-2013
Taxable Assessed Value Percent
(In Thousands) of Total TAV
OXY USA Inc 552,425$ 1.97%
The Boeing Company/McDonnell Douglas 350,678 1.25% Bella Terra Associates LLC 202,718 0.72% Mayer Financial LP 201,668 0.72% CIM Huntington LLC 154,351 0.55% 21002 HB LLC 89,155 0.32% Pacific Sands LLC 84,093 0.30% United Dominion Realty LP 70,059 0.25% Harbour Lights LP 66,024 0.24% Seacliff Village Shopping Center Inc 65,842 0.23% Total Top Ten 1,837,013 6.55% All Other Property Taxpayers 26,208,465 93.45% City Total 28,045,478$ 100.00%
Source: County of Orange Auditor Controller's Office
Note: Information provided for the period from July 1st through June 30th.

TOP TEN PROPERTY TAXPAYERS

CURRENT YEAR AND NINE YEARS AGO

CITY OF HUNTINGTON BEACH
179

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180

Long-Term Indebtedness 2022 2021 2020 2019 2018***
Governmental Activities:

Judgement Obligation Bonds -$ -$ -$ - $ -$ Public Financing Authority:
2010(a) Lease Revenue Bonds - - 7,410 8,235 9,030 2011(a) Lease Revenue Bonds - - 15,725 17,770 19,735 2014(a) Lease Revenue Bonds 11,215 11,880 12,530 13,145 13,740 2020(a) Lease Revenue Bonds 4,835 4,835 - - - 2020(b) Lease Revenue Bonds 11,315 1 2,830 - - - Total Public Financing Authority 27,365 29,545 35,665 39,150 4 2,505 Other Long-Term Obligations:

Finance Purchase Agreement 11,714 12,753 5,241 5,083 6,079 Leases Payable 247 - - - - PARS Payable - - - - - Section 108 Loan City - - - - 430 LED Lighting Phase I 314 432 546 656 762 CEC 2,063 2,457 2,588 2,818 3,000 I-Bank 1,586 1,882 2,171 2,454 2,730 Pension Obligation Bonds 330,642 341,501 - - - Total Other Long-Term Obligations 346,566 359,025 10,546 11,011 1 3,001 Total Long-Term Obligations - Governmental Activities 373,931 388,570 46,211 50,161 5 5,506 Long-Term Obligations - Business-Type Activities:

Pension Obligation Bonds 21,368 22,144 - - - Total Long-Term Obligations - Business-Type Activities 21,368 22,144 - - - Total Long Term Obligations - Governmental Activities and Business-Type Activities 395,299$ 410,714$ 46,211$ 50,161$ 55,506$ 2022 2021 2020 2019 2018***
Population 197,437 198,039 200,748 202,265 201,761 Debt Per Capita 2,002$ 2,074$ 230$ 248$ 275$ Total Personal Income (In Thousands)* 9,995,248$ 9,659,154$ 9,450,814$ 9,222,677$ 8,849,843$ Per Capita Personal Income* 50,625$ 48,774$ 47,078$ 45,597$ 43,863$ Unemployment Rate** 2.80% 4.70% 8.60% 2.60% 2.70%
Total Employment** 104,300 100,700 96,200 107,700 106,900 * Source: Claritas, Inc.
** Source: State of California Employment Development Department *** The 2017/18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018.

Fiscal Year Ended

CITY OF HUNTINGTON BEACH

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
(In Thousands)
June 30,
181

Long-Term Indebtedness 2017 2016 2015 2014 2013
Governmental Activities:

Judgement Obligation Bonds -$ 659$ 1,634$ 2,574$ 3,474$ Public Financing Authority:
2010(a) Lease Revenue Bonds 9,030 9,795 10,525 11,230 11,910 2011(a) Lease Revenue Bonds 19,735 21,650 24,985 28,165 31,195 2014(a) Lease Revenue Bonds 13,740 14,315 14,865 - - 2020(a) Lease Revenue Bonds - - - - - 2020(b) Lease Revenue Bonds - - - - - Total Public Financing Authority 42,505 45,760 50,375 39,395 43,105 Other Long-Term Obligations:

Finance Purchase Agreement 6,286 4,130 - - - Leases Payable - - - - - PARS Payable - - - 29 56 Section 108 Loan City 430 625 805 975 1,135 LED Lighting Phase I 866 966 1,063 - - CEC 3,000 3,000 - - - I-Bank 2,730 3,000 - - - Pension Obligation Bonds - - - - - Total Other Long-Term Obligations 13,312 11,721 1,868 1,004 1,191 Total Long-Term Obligations - Governmental Activities 55,817 58,140 53,877 42,973 47,770 Long-Term Obligations - Business-Type Activities:

Pension Obligation Bonds - - - - - Total Long-Term Obligations - Business-Type Activities - - - - - Total Long Term Obligations - Governmental Activities and Business-Type Activities 55,817$ 58,140$ 53,877$ 42,973$ 47,770$ 2017 2016 2015 2014 2013
Population 202,413 201,919 198,389 195,999 193,616 Debt Per Capita 276 $ 288 $ 272 $ 219 $ 247 $ Total Personal Income (In Thousands)* 8,878,441 $ 8,880,801 $ 8,725,545 $ 8,278,410 $ 7,839,899 $ Per Capita Personal Income* 43,863 $ 43,982 $ 43,982 $ 42,237 $ 40,492 $ Unemployment Rate** 2 .80% 3.90% 3.90% 3.60% 3.60%
Total Employment** 103,200 107,200 104,000 120,200 120,200 September 30,
Fiscal Year Ended

CITY OF HUNTINGTON BEACH

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
(In Thousands)
182

2012-2013 -
2013-2014 -
2014-2015 -
2015-2016 -
2016-2017 -
2017-2018 -
2018-2019 -
2019-2020 -
2020-2021 -
2021-2022 -
4,867,347 4,867,347
37,120,729 4,454,487 4,454,487 38,887,451 4,666,494 4,666,494 40,561,224
33,663,879 4,039,665 4,039,665 35,340,214 4,240,826 4,240,826 30,787,185 3,694,462 3,694,462 32,392,741 3,887,129 3,887,129 3,365,457 3,365,457
29,165,729 3,499,887 3,499,887 (In Thousands)

LEGAL DEBT MARGIN

CITY OF HUNTINGTON BEACH

LAST TEN FISCAL YEARS
Assessed
Valuation
Debt Limit - 12% of
Assessed Valuation
Debt Applicable
to Limit
Legal Debt
MarginFiscal Year
5,019,827 5,019,827 41,831,893 28,045,478
183

2021-22 Assessed Valuation: $45,858,082,541
Debt Repaid with Property Taxes (Tax and Assessment Debt):

Overlapping Tax and Assessment Debt
Percent
Applicable*
Debt Applicable
to City
Metropolitan Water District 1.350% 272,363
Coast Community College District 28.354% 268,171,969
Huntington Beach Union High School District 73.071% 119,584,344 Fountain Valley School District 27.085% 15,740,448
Huntington Beach City School District 99.958% 151,575,274 Ocean View School District 93.573% 121,298,680
Westminster School District 23.889% 29,936,404
Los Alamitos Unified School District Facilities District No. 1 1.163% 2,300,824 City of Huntington Beach Community Facilities Districts (1990-1, 2000-1, 2002-1, 2003-1) 100.000% 26,680,000 Total Overlapping Tax and Assessment Debt 735,560,306$
Direct and Overlapping General Fund Debt
Orange County General Fund Obligations 6.728% 25,349,758 Orange County Pension Obligations 6.728% 35,105,628
Orange County Board of Education Certificates of Participation 6 .728% 781,794 North Orange County Regional Occupation Program Certificates of Participation 0.086% 7,052 Coast Community College District General Fund Obligations 28.354% 528,802 Coast Community College District Pension Obligation Bonds 28.354% 517,461 Huntington Beach Union High School District Certificates of Participation 73.071% 42,677,914 Los Alamitos Unified School District Certificates of Participation 1.046% 362,251 Huntington Beach School District General Fund Obligations 99.958% 16,285,129 Ocean View School District Certificates of Participation 93.573% 15,261,756 Westminster School District General Fund Obligations 23.889% 7,08 5,477 City of Huntington Beach General Fund Obligations: 100.000% 45,29 8,393 City of Huntington Beach Pension Obligation Bonds 100.000% 352,01 0,000 Total Direct and Overlapping General Fund Obligation Debt 541,271,415$ Overlapping Tax Increment Debt (Successor Agency) 100.000% 3,765, 000 Total Direct Debt 397,308,393$
Total Overlapping Debt 883,288,328
Combined Total Debt 1,280,596,721$
(1) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non-bonded capital lease obligations.

Ratios to Adjusted Assessed Valuations
Combined Direct Debt ($397,308,393) 0.87%
Combined Total Debt 2.79%
Ratios to Redevelopment Successor Agency Incremental Valuation ($3,810,829,132) Total Overlapping Tax Increment Debt 0.10%
Source: California Municipal Statistics and City of Huntington Beach Finance Department

STATEMENT OF DIRECT AND

OVERLAPPING BONDED DEBT
JUNE 30, 2022

CITY OF HUNTINGTON BEACH
* The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
184

2022 % of total
The Boeing Company 3,112 2.98%
Safran Cabin Inc 884 0.85%
Hyatt Regency Huntington Beach 641 0.61%
Boardriders Wholesale LLC 600 0.58%
Cambro Manufacturing 550 0.53%
Huntington Beach Hospital 527 0.51%
Wal-Mart 462 0.44%
Waterfront Hilton Beach Resort 450 0.43%
No Ordinary Moments 440 0.42%
Home Depot USA Inc 436 0.42%
Total of top 10 8,102 7.77%
All others 96,198 92.23%
Total employment (public and private) 104,300 100.00%
2013 % of total
Boeing 5,178 4.33%
Cambro MFG Co. 1,137 0.95%
Quiksilver 955 0.80%
Ensign United States Drilling 925 0.77%
Hyatt Regency Huntington Beach 641 0.54%
C & D Aerospace 555 0.46%
Huntington Beach Hospital 527 0.44%
Wal-Mart 462 0.39%
Rainbow Disposal 408 0.34%
Huntington Beach Healthcare 381 0.32%
Total of top 10 11,169 9.34%
All others 108,431 90.66%
Total employment (public and private) 119,600 100.00%
Source: Finance Department, City of Huntington Beach

CITY OF HUNTINGTON BEACH

PRINCIPAL PRIVATE EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO
185

General Government: 2022 2021 2020 2019 2018*** 2017 2016 2015 2014 2013 City Council 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 City Manager 26.00 20.00 18.00 12.50 12.50 11.50 11.50 11.50 11.50 7.00 City Treasurer 1.50 1.50 1.50 2.00 2.00 2.00 1.50 1.50 1.50 1.50 City Attorney 11.00 11.00 11.00 11.00 11.00 12.00 11.00 11.00 11.00 11.00 City Clerk 5.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Finance 34.50 32.50 31.50 33.00 33.00 33.00 32.50 31.50 31.50 29.50 Human Resources ** - - - 15.00 15.00 15.00 15.00 15.00 15.00 14.50 Community Development 57.50 57.50 54.00 44.00 44.00 44.00 43.50 44.00 43.00 42.75 Information Systems 26.00 26.00 22.00 30.00 30.00 30.00 30.00 30.00 30.00 29.50 Economic Development * - - - - - - - - - 4.50 Library Services 29.25 29.25 23.25 28.25 28.25 28.25 28.25 28.25 28.25 27.75 Fire 201.00 201.00 200.00 198.00 198.00 198.00 198.00 198.00 196.50 176.50 Police 353.00 357.00 356.00 365.50 364.50 364.50 364.50 361.50 360.50 358.50 Community Services 33.00 33.00 37.00 36.00 36.00 44.00 44.00 43.00 43.00 56.00 Public Works 211.00 207.00 199.00 207.00 207.00 199.00 199.00 198.00 196.00 196.00 989.75 980.75 958.25 987.25 986.25 986.25 983.75 978.25 972.75 960.00 Source: Finance Department, City of Huntington Beach
* Economic Development was combined with Community Development in the year ended June 30, 2020. Previously, it was combined with the City Manager's Office as of the year ended September 30, 2014. ** Human Resources was combined with City Manager's Office in the year ended June 30, 2020. *** The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018.

Actual

CITY OF HUNTINGTON BEACH

FULL-TIME ACTUAL AND BUDGETED CITY EMPLOYEES BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
186

Function/Program 2022 2021 2020 2019 2018***
Finance:

Water Bills Processed 637,956 637,920 636,708 639,245 476,290 Active Business Licenses 18,849 19,011 20,910 21,414 21,782 Accounts Receivable Billings Processed 12,437 20,183 25,687 30,217 25,000 City Clerk:

Passports Issued **** 5,721 418 4,579 7,024 5,757 Planning:

Entitlements Processed 154 112 162 221 206 Plan Reviews 606 1,955 1,358 1,542 1,466 Field Inspection Complaints 7,403 11,899 11,610 8,183 7,005 Code Violation Cases 5,051 4,473 3,260 4,786 4,219 Building:

Number of Permits Issued 10,292 9,075 8,855 9,807 7,490 Number of Inspections Completed 31,080 26,710 32,859 36,562 30,501 Value of Construction Permits (Thousands of Dollars) 237,945 166,000 169,393 135,910 109,462 Processed Number of Certificate of Occupancies* 641 655 515 686 523 Completed Plan Reviews 5,701 4,673 3,469 3,491 2,771 Counter Visits 14,289 115 14,922 21,409 16,498 Fire:

Inspections 7,311 4,008 5,965 6,140 3,963 Responses 22,076 20,428 21,068 20,354 14,490 Ocean Rescues 4,160 4,116
2,487 4,953 3,530
Estimated Beach Visitors 8,345,139 7,910,293 6,712,125 10,577,290 12,522,640 Police:

Physical Arrests 5,585 5,363 5,785 5,979 4,614 Parking Violations 97,299 95,753 59,484 79,069 54,500 Traffic Violations 8,869 10,920 12,105 13,314 11,869 Community Services:

Park/Open Space Acreage 1,072 1,072 1,066 1,066 1,065 Enrollment in Recreation Classes 34,616 15,511 28,952 37,978 27,152 Public Works:

Water Sold (Acre Feet)** 26,459 27,731 25,966 26,251 19,777 Gallons of Sewage Pumped Per Day** 19 million 19 million 19 millio n 19 million 19 million Library:

Items in Collection 290,351 291,444 294,849 293,995 292,037 Items Borrowed 796,882 481,523 779,124 942,821 655,626 * Beginning the 2013/14 Fiscal Year, the Building Department no longer processes Certificate of Occupancies. ** Reduction of estimate is the result of the Governor's executive order to reduce water consumption. *** The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018.
**** Passport acceptance was closed to the public from June 2020 through May 2021 due to COVID-19. It was reopened on June 15, 2021.

Source: Various departments of the City of Huntington Beach

CITY OF HUNTINGTON BEACH

OPERATING INDICATORS BY FUNCTION/ACTIVITY

LAST TEN FISCAL YEARS
187

Function/Program 2017 2016 2015 2014 2013
Finance:

Water Bills Processed 632,997 635,052 536,684 630,240 628,207 Active Business Licenses 22,074 21,420 21,424 20,450 21,127 Accounts Receivable Billings Processed 34,963 30,826 38,594 42,360 45,422 City Clerk:

Passports Issued 7,408 5,623 5,121 4,598 4,220 Planning:

Entitlements Processed 216 221 280 204 231 Plan Reviews 1,376 1,653 1,595 1,466 1,575 Field Inspection Complaints 8,459 7,951 8,233 7,030 7,301 Code Violation Cases 3,981 4,324 4,710 2,545 2,385 Building:

Number of Permits Issued 9,728 10,981 10,670 9,348 8,970 Number of Inspections Completed 38,796 39,380 38,320 36,142 33,962 Value of Construction Permits (Thousands of Dollars) 216,252 283,910 234,946 216,343 248,246 Processed Number of Certificate of Occupancies* 740 n/a n/a n/a 477 Completed Plan Reviews 4,172 4,172 3,815 3,148 n/a Counter Visits 21,731 23,492 21,893 21,326 20,854 Fire:

Inspections 2,758 5,132 6,499 6,641 5,087 Responses 20,555 20,279 19,562 15,815 15,608 Ocean Rescues 3,639 3,977 5,371 6,426 4,195 Estimated Beach Visitors 13,339,518 12,272,030 11,803,943 12,035,134 11,016,615 Police:

Physical Arrests 5,298 5,112 4,854 4,303 4,237 Parking Violations 70,846 90,361 83,453 74,668 72,347 Traffic Violations 19,916 17,639 17,596 16,330 13,016 Community Services:

Park/Open Space Acreage 1,065 1,062 1,062 1,062 1,062 Enrollment in Recreation Classes 37,968 34,424 30,228 30,184 30,218 Public Works:

Water Sold (Acre Feet)** 25,944 24,505 24,763 29,279 28,354 Gallons of Sewage Pumped Per Day** 22 million 19 million 19 millio n 22 million 22 million Library:

Items in Collection 288,599 285,814 343,655 332,092 385,901 Items Borrowed 943,642 921,105 908,656 937,533 892,543

CITY OF HUNTINGTON BEACH

OPERATING INDICATORS BY FUNCTION/ACTIVITY

LAST TEN FISCAL YEARS
(Continued)
188

Library Services One Main Library and Four Branches
Fire:

Fire Stations 8
Police:

Stations One Main Station and Three Substations
Community Services:

Acreage of Parks 1,066
Community Centers 6
Public Works:

Centerline Square Miles of Streets Maintained 451
Miles of Beach Maintained 4.7
Miles of Storm Drains Maintained 120
Miles of Sewer Maintained 362
Source: Various departments of the City of Huntington Beach JUNE 30, 2022

CAPITAL ASSET STATISTICS BY FUNCTION/ACTIVITY

CITY OF HUNTINGTON BEACH
189

City Council/Public Financing AuthorityFebruary 21, 2023

City Council/Public Financing Authority
February 21, 2023