City Council/Public Financing Authority
January 21, 2025

ANNUALANNUALANNUAL

COMPREHENSIVECOMPREHENSIVECOMPREHENSIVE

FINANCIALFINANCIALFINANCIAL

REPORTREPORTREPORT
For Fiscal Year Ended June 30, 2024

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CITY OF HUNTINGTON BEACH, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FOR THE YEAR ENDED
JUNE 30, 2024

Prepared by the Finance Department

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INTRODUCTORY SECTION

i
City of Huntington Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024

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................................................................................................... ................... 1-4 Management’s Discussion and Analysis (Required Supplementary Information) ....................................... 6-23 Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position .................................................................................................... .............. 25 Statement of Activities ...................................................................................................... ................. 26 Fund Financial Statements:

Balance Sheet – Go vernmental Funds .............................................................................................. 27 Reconciliation of the Bal ance Sheet of Governmental Funds to the Statement of Net Position ......... 28 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ...... 29 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................................................................... 30 Statement of Net Positi on – Proprietary Funds .................................................................................. 31 Statement of Revenues , Expenses and Changes in Fund Net Position – Proprietary Funds ............ 32 Statement of Cash Flows – Proprietary Funds ................................................................................... 33 Statement of Fiduciary Fund Net Position – Fiduciary Funds ............................................................ 34 Statement of Changes in Fiduciary Fund Net Position – Fiduciary Funds ......................................... 35 Notes to Financ ial Statements .............................................................................................................. 36-116 Required Supplemental Information:

Notes to Required Suppl ementary Information .................................................................................. 120 Schedule of Revenues, Expenditures and Ch anges in Fund Balance – Budget And Actual – General Fund ............................................................................................................. 121 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget And Actual – Grants S pecial Revenue Fund ................................................................................... 122 Schedule of Changes in t he Net Pension Liability and Related Ratios .............................................. 123-125 Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................. 126 Schedule of C ontributions .................................................................................................................. 127-129 Schedule of Money Market Wei ghted Rate of Return ........................................................................ 129 Schedule of Contributions for the OPEB Plan .................................................................................... 130

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FINANCIAL SECTION (Continued)

Supplementary Information:

Combining and Individual Fund Statements and Schedules:

Combining Balance Sheet – Other Governmental Funds .................................................................. 133-136 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Other Governm ental Funds ..................................................................................................... ....... 137-140 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Other Governmental Funds ........................................................................... 141-149 Statement of Net Position – Internal Service Funds ........................................................................... 151 Statement of Revenues , Expenses, and Changes in Fund Net Position Internal Service Funds .................................................................................................................. 152 Statement of Cash Flows – Internal Service Funds ........................................................................... 153 Combining Statement of Fiduciary Fund Assets and Liabilities.......................................................... 155 Combining Statement of Changes in Fiduciary Net Position .............................................................. 155

STATISTICAL SECTION

Net Position by Component – Last Ten Fiscal Years ............................................................................. ..... 157-158 Changes in Net Position – Last Ten Fiscal Years ....................................................................................... 159-160 Fund Balances – Governmental Funds – Last Ten Fiscal Years ................................................................ 161 Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years ............................................. 163-164 Assessed and Actual Valuation of All Taxable Property (Excluding Redevelopment Agency) - Last Ten Fiscal Years ......................................................................................................... ..................... 165 Property Tax Rates – All Direct and Overlapping Government Tax Rate 04-001 Largest Area in City – Last Ten Fiscal Years ........................................................................................... 165 Property Tax Levies and Collections – Last Ten Fiscal Years .................................................................... 166 Top Ten Property Tax Payers – Current Year and Nine Years Ago ............................................................ 167 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ..................................................................... 169-170 Legal Debt Margin – Last Ten Fiscal Years ................................................................................................ 171 Statement of Direct and Overlapping Bonded Debt .................................................................................... 172 Principal Private Employers – Current Year and Nine Years Ago ............................................................... 173 Full-Time Actual and Budgeted City Employees by Function/Program– Last Ten Fiscal Years .................. 174 Operating Indicators by Function/Activity – Last Ten Fiscal Years .............................................................. 175-176 Capital Assets Statistics by Function/Activity .............................................................................................. 177

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CITY OF HUNTINGTON BEACH

December 19, 2024
Honorable Mayor, City Council and Citizens of the City of Huntington Beach:

In accordance with the requirements of the City Charter, and the City of Huntington Beach’s ongoing commitment to transparent financial reporting, I am pleased to present the Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2024.

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 independent auditing firm Davis Farr LLP. The goal of the audit was to provide reasonable assurance that the City’s financial statements are free from material misstatement. In addition, Davis Farr LLP audits the City’s major program expenditures of federal grants for compliance with Title 2 of the United States Code of Federal Regulations Part 200 (Uniform Guidance). The Single Audit Report 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 ensuring it is reported in a manner that fairly presents the financial position and operations of the various funds of the City. To provide a reasonable basis for making these representations, and assurance that the financial statements will be free from material misstatement, management has established a comprehensive internal control framework that is designed to both protect the government’s assets from theft, loss, or misuse and to compile sufficient reliable information for financial statement conformity with Generally Accepted Accounting Principles (GAAP). As the cost of internal controls should not outweigh their benefits, 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, 2024. 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 Analysis (MD&A). This transmittal 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 community, located on the Orange County coast, 35 miles south of Los Angeles and 90 miles north of San Diego. With a population of 192,129 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 largest in California by population, Huntington Beach is recognized as a prime location to live, work and play, ranking #2 in the nation for “Quality of City Services” and #65 for “Best-Run City” in America by WalletHub (June 2024). Huntington Beach was also ranked one of the top ten “Best City for People with Disabilities” by WalletHub (September 2024). The City boasts an annual median household income of $119,885, 34 percent higher than the median household income for the United States, 20 percent higher than the State of California and 5 percent higher than Orange County.

Founded in the late 1880s, Huntington Beach was incorporated as a Charter City in 1909.

Huntington Beach has a Council/Manager form of government wherein 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 City 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 1002 full-time employees.

In 2011, the unincorporated oceanfront community of Sunset Beach was officially annexed by the City of Huntington Beach. Sunset Beach is a small beachfront community with approximately 1,000 residents and 1.5 square miles of land. Beachfront 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, Canadian Forces Snowbirds, and many others.

This unique airshow, which first premiered in October 2016, 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 Parade west of the Mississippi,” spans over a five-day period that includes a Main Street Block Party with free live music, carnival rides, and other family-friendly activities, Surf City 5K Run, and spectacular fireworks show overlooking 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 Days, International Surfing Association (ISA) World Surfing Games, and other events. In November 2023, the inaugural Darker Waves beachfront music festival featuring New Order, Tears for Fears, the B-52s, and others, performed to a sold-out crowd of 30,000.

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Economic Condition and Outlook

There are several reasons to reflect on the measures taken over the past couple of years to protect the City’s finances. Through the leadership and support of the City Council, the City implemented significant cost-saving measures, including a Citywide Separation Incentive Program and reorganization plan, refinancing the City’s pension debt, and a proactive Budget Balancing Plan. Looking ahead, economic indicators point to a potential recession. Home sales have resulted in a $3.2 billion increase in assessed property valuations for Fiscal Year 23-24.

However, supply chain shortages and inflationary pressures on normal business activities continue to influence economic conditions. Increases in utility rates, such as electricity and gas, contribute to a rise in projected Franchise and Utility Users Tax revenues, which help to balance the overall economic impact.

The City of Huntington Beach continues to thrive together through the motto “OneHB,” which reflects the City’s commitment to facing the potential upcoming recession created by inflationary conditions and supply chain shortages guided by the following principles:

x To stay committed to being One Team : working together to serve the people of Huntington Beach exceptionally to inspire pride in the community. x Work to have One Focus: to stay fanatical about achieving municipal excellence by being active caretakers of our unique, people-centric HB culture. x Continue to pursue One Goal: to ensure that HB continually improves its standing as a premier coastal community as measured through the health of our people, our organization, our infrastructure, and our community.

Property Tax

The City of Huntington Beach’s assessed valuations are very strong, reflecting both new development and increased property values. The City’s Fiscal Year 2024/25 assessed property value grew 4.5 percent to $55.5 billion. This solid performance, coupled with steady year-over- year growth, reflects a stable property tax base that can weather steep declines in real estate markets. Over 60 percent of parcels have an assessed valuation (AV) base year prior to 2004, representing a significant amount of untapped AV. For Fiscal Year 2022/23, secured property tax revenue collections totaled $68.5 million. For Fiscal Year 2023/24, secured property taxes totaled $70.6 million, reflecting a 9 percent increase.

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Sales Tax

Huntington Beach’s business community is well-diversified with no single industry or business dominating the local economy. Local businesses include aerospace and high technology, petroleum, manufacturing, computer hardware and software, financial and business services, hotel and tourism, automobile services, 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.

$36.1 $37.5 $39.4 $41.5 $43.8 $46.1 $47.3
$50.3
$53.1 $55.5
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
$50.0
$55.0
$60.0
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 CityofHuntingtonBeach
TotalAssessedValuation
FiscalYears2015/16Ͳ 2024/25
(inbillions)
Autos and
Transportation
20%
Building and
Construction
7%
Business and
Industry
9%
Fuel and Service
Stations
9%
General Consumer
Goods
18%
Restaurants and
Hotels
16%
State and County
Pools
16%
Other
5%
City of Huntington Beach
Composition of Sales Tax Revenue
Fiscal Year 2023/24

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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. The City collected an impressive $17.4M in TOT revenues during FY23/24, reflecting a $81,000, or .5 percent increase, affirming Huntington Beach’s Status as a premier vacation destination. FY 2022/23 includes the first full fiscal year of TOT revenues from the City’s Short- Term Vacation Rental Program totaling $971,000.

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

$29.5
$36.1
$40.4
$31.4
$43.9
$41.1
$47.7
$53.4 $52.6 $51.4
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
$50.0
$55.0
2014/15 2015/16 2016/17 2017/18* 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 (InMillions)
CityofHuntingtonBeach
HistoricalSalesTaxRevenue
$9.2 $10.0
$11.4
$8.8
$14.0
$9.6 $10.4
$15.8
$17.3 $17.4
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$20.0
2014/15 2015/16 2016/17 2017/18* 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 (InMillions)
CityofHuntingtonBeach
TransientOccupancyTaxRevenue

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Budget Development and Monitoring

The budget is prepared under the supervision of the City Manager 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 30 th and may amend or revise
it any time at a properly noticed meeting. Budgetary control is at the Department level within each fund and a Department Head, with the Chief Financial Officer’s approval, may transfer funds within like categories (operating and capital expenditures) of the same Department. The transfer of funds for salaries and benefits requires additional approval by the City Manager or his /her designee.

Cash Management Policies and Practices

Surplus cash is invested by the elected City Treasurer, in investments 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 meet 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 City Treasurer, as required by California Government Code 53601, prepares 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 the framework for the goals and objectives of the City. The City Council held a Strategic Planning Workshop on June 8, 2023, establishing eight goals to achieve over the next four years. The 2023-2027 Strategic Plan, approved by City Council, includes the eight Strategic Goals listed below to achieve over the next four years:

x Economic Development – greater business retention, investment and job growth in the City.
x Fiscal Stability – available funding to support a high-quality level of programs, services and capital investments and to build a structural surplus. x High Performing Organization – an engaged City workforce committed to responsive and exceptional public service for all.
x Homelessness – A continuum of care that reduces homelessness and maintains quality of life for the entire community.
x Housing – proactive programs to address diverse housing needs within the City’s jurisdiction.
x Infrastructure Investment – maintain and upgrade infrastructure that supports the community’s day-to-day needs in accordance with the City’s Infrastructure Report Card. x Public Engagement – a community that has easy access to clear, accurate, and timely City information and expresses increased awareness and involvement in City activities. x Public Safety – Ensure the safety and protection of all community members, both efficiently and effectively.

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

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“One Stop Shop”

The City is continuing the process of implementing a “One Stop Shop” to facilitate the permitting process. The “One Stop Shop” streamlines the permitting process and provides applicants with a comprehensive checklist to complete the necessary steps to obtain permits. The “One Stop Shop” approach aims to make the permitting process more efficient so that businesses and residents experience quicker and easier access to obtain permits for business licenses, short- term rentals, and building permits.

Infrastructure Report Card

Infrastructure provides essential services and affects quality of life for all Huntington Beach residents; to sustain these critical systems, it is important to routinely assess them. The City is preparing an Infrastructure Report Card (IRC) that will serve as a high-level summary to highlight the current condition of the City’s Infrastructure. This report card will assign grades (A- F) to various infrastructure categories, communicating the status of each and identifying priorities for improvement. The project structure is made up of three separate committees including the Outreach and Communications Committee. The Outreach and Communications Committee is comprised of approximately 100 Huntington Beach residents appointed by the City Council and/or are recognized members of the community who will act as ambassadors of this process through their networks. This will promote resident participation, education, and awareness of the project both during the assessments and after the final report is released.

Assessments began in August 2023 and the final report will be presented to City Council early 2025.

Awards and Acknowledgements

The City of Huntington Beach has once again received the “Certificate of Achievement for Excellence in Financial Reporting” award bestowed by the Government Finance Officers’ Association (GFOA) of the United States and Canada for the 38 th consecutive year. Receipt of
the award requires government entities 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, 2023, is valid for one year only. The City believes that this Annual Comprehensive Financial Report continues to conform to the Certificate of Achievement 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 Departments for their continued diligence in their role as fiscal stewards for the City of Huntington Beach. Without their leadership and support, the favorable financial results contained in this report would not have been possible. I would also like to thank the Finance Commission, 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.

x
The preparation of this report would also not have been possible without the professional dedicated staff of the Finance Department. Specifically, I would like to thank Zack Zithisakthanakul, Ian Wuh, Tara Mukund, Ming Zhai, Nicholas Dang, Thuy Vi, and Shari Saraye for their hard work and dedication.

Respectfully,
David Cain
Interim Chief Financial Officer

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City of Huntington Beach
City Council
Pat Burns, Mayor
Casey McKeon, Mayor Pro Tem
Don Kennedy, Councilmember
Tony Strickland, Councilmember
Butch Twi
ning, Councilmember
Gracey Van Der Mark, Councilmember
Chad Willams, Councilmember
Executive Team
Travis Hopkins, Acting City Manager
Elected Department Heads
Alisa Backstrom, City Treasurer
Lisa Lane Barnes, City Clerk
Michael Gates, City Attorney
Department Directors
David Cain, Finance
Chief Scott Haberle, Fire
Chief Eric Parra, Police
Chau Vu, Public Works
Jennifer Villasenor, Community Development
Marissa Sur, Human Resources
Ashley Wysocki, Community & Library Services
John Dankha, Information Services
Building
Code
Enforcement
Economic
Development
Housing
Permit
Counter
Planning
FY 2024 - 25
Assistant City Manager
Community
Development Finance
Homelessness
& Behavioral
Health Services
Communications
& HBTV
City Council
Support
Sustainability
City Manager
City Attorney
Advisory
Community Prosecution
Litigation
City Clerk City Council
Mayor
Mayor Pro-Tempore
City Council Members

THE PEOPLE OF HUNTINGTON BEACH
Elected Offices
Appointed Departments
Community &
Library
Services
Events &
Rentals
Library &
Cultural
Services
Program &
Services
Facilities &
Development
Accounting
Services
Budget
Management
Business
License
Finance Fire
Emergency
Response
Marine Safety
Professional
Standards
Benefits &
Training
Labor Relations
Recruitment
& Selection
Risk
Management
Human
Resources
Information
Services
Business
Applications
Infrastructure
Systems
Technology
Engagement
& Support
Administrative
Operations
Investigations
Patrol
Special
Operations
Support
Services
Police Information
Services
Engineering
Maintenance
& Operations
Transportation
Utilities
Admin, Public Support,
& Elections
Records Management
City Treasurer
Investments
Revenue Services
Organizational Chart
FY 202 4 - 25

T HE PE O PLE O F H U NTINGT O N BEAC H
City Attorneyt City ClerkC Counc ilCi ty CC City Treasurere Admin, Public Su pport,
& Elections
Records Mana gement
Investments
Revenue Serv ices
Advisory
Community Prosecution
Litigation
ayor
o-Tempore
cil Members
Ma
Mayor Pr o
City Counc
a
o
c
Manage rCity MM
Ci ty Mana gerAss istant CC
Communit y
Development Finance
Human
Resource s
Information
Services
Communit y &
Library
Services
Fire Police Information
Services
ouncil
port
City C
Supp
Co
p
nications
BTV
Commun
& HB
n
BBuilding
Code
Enforcement
Economic
Development
Housing
Permit
Counter
Planning
Benefits &
Training
Labor Relations
Recruitment
& Selection
Risk
Management
Administrative
Operation s
Investigations
Patrol
Special
Operation s
Support
Services
Business
Application s
Infrastructure
Systems
Technology
Engagement
& Support
Events &
Rentals
Library &
Cultural
Services
Program &
Services
Facilities &
Development
Emergency
Response
Marine Safety
Professional
Standards
Engineerin g
Maintenance
& Operation s
Transportat ion
Utilities
Accounting
Services
Budget
Management
Business
License
ssness
avioral
ervices
Homele
& Beha
Health S
e
a
S
Sustainabilityn
xii
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Huntington Beach
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
xiii

FINANCIAL SECTION

Inde
pendent Auditor’s Report

City Coun
cil
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, 2024, 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, 2024, 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.

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.

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 twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

1 Aud
itor’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 and Government Auditing Standards 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 and Government Auditing Standards, 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 the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the 2 info
rmation because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supp
lementary 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 Annual Comprehensive 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 acc
ordance with Government Auditing Standards , we have also issued our report dated December 23, 2024 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 23, 2024
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5 MANAGEMENT DISCUSSION
AND

ANALYSIS
6 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

As management of the City of Huntington Beach, we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City of Huntington Beach for the year ended June 30, 2024. 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):

x The City of Huntington Beach’s total assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $896,784,000. Total net position increased by $60,725,000 or

7.3 percent primarily as a result of the Department of Finance’s (DOF) decision on Waterfront Loan. The DOF determined the Waterfront loan between the City of Huntington Beach and the former Redevelopment Agency of the City of Huntington Beach to be an enforceable obligation. This created an increase of $31,136,000 in the fiscal year.

x Long-term obligations increased by $13,996,000 or 2.4 percent. The increase is primarily the result of GASB 68 adjustments. The adjustment increased net pension liability by $32,693,000 as a result of actuarial valuation adjustment of the City’s current net pension liability. At the same time, long-term obligations due in more than one year decreased by $18,697,000 due to normal debt obligation being paid down.

x Deferred outflows of resources decreased by $19,504,000 or 12.6 percent while deferred inflow of resources decreased by $2,240,000 primarily due to the differences between projected and actual earnings on Pension Plan investments used to determine the City’s net pension liability.

June 30, 2024 June 30, 2023
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Assets 1,461,477 $ 1,367,093 $ 94,384 $ 6.9% Deferred Outflows of Resources 135,090 154,594 (19,504) -12.6% Liabilities 680,915 664,520 16,395 2.5% Deferred Inflows of Resources 18,868 21,108 (2,240) -10.6% Total Net Position 896,784 836,059 60,725 7.3% Unrestricted Net Position (147,955) (136,350) (11,605) -8.5% Long-Term Obligations 604,946 590,950 13,996 2.4% Program Revenues 189,331 212,002 (22,671) -10.7% Taxes 220,940 221,607 (667) -0.3% Other General Revenues 53,534 9,214 44,320 481.0% Expenses 403,080 361,502 41,578 11.5% Total Governmental and Business-Type Activities
7 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

x Program revenues decreased by $22,671,000 or 10.7 percent. The decrease is due the City of Huntington Beach receiving one time revenue related to the American Rescue Plan Act grant funding in prior year. The American Rescue Plan Act of 2021 provided funding to individuals, businesses, state, and local governments to help mitigate the impacts of the COVID-19 pandemic. The City of Huntington Beach received $29,607,000 which was used for eligible police and fire expenditures.

x Expenses increased by $41,578,000 or 11.5 percent largely due to increases of $18,010,000 and $6,516,000 in Police and Fire expenditures. In Fiscal Year 2023- 2024 the City of Huntington Beach signed a new MOUs with both department which included salary increases.

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 statements; 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 the 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 City’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).

The government-wide financial statements separate functions that are primarily supported by taxes and intergovernmental revenues (governmental activities) from functions that are supported by user fees (business-type activities). Governmental activities include the City Council, City Manager, City Treasurer, City Attorney, City Clerk, Finance, Human Resources, Community Development, Fire, Information Services, Police, Community Services, Library Services, and Public Works departments. Business- type activities include Water, Sewer, Refuse, and Hazmat Services.

8 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

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

The government-wide financial statements can be found on pages 25-26 of this report.

Fund Financial Statements
The City separates financial activities into funds to maintain control over resources that have been legally separated. A ll of the funds of the City can be 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-wide 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 resources available for spending at the end of the fiscal year.

It is useful to compare information present ed for the governmental funds to information presented for governmental activities in t he government-wide financial statements. The reconciliations indicate to the reader the differences in financial 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 Bala nce Sheet and in the govern mental funds Statement of Revenue, Expenditures, and Changes in Fund Balances for the General Fund, Grants Special Revenue Fund, Low and Moderate Income Housing Asset Fund (LMIHAF), Pension Liability Debt Service Fund, and Infrastructure Fund, all of which are considered to be major funds. Data from the other 19 smaller funds are combined into a single, aggregated 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 governmental funds. Budgetary comparison schedules for the General Fund and Grants Special Revenue Fund are required to be presented and are included on pages 119-120. Other major governmental funds (LMIHAF Capital Projects Fund, P ension Liability Debt Service Fund and Infrastructure Fund) are presented in the Supplementary Information section on pages 148-149 of this report and demonstrate compliance with the budget.

The basic governmental fund financial statements can be found on pages 27 and 29 of this report.

9 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

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 functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Water, Sewer Service, Refuse, 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-insurance worker ’s compensation activities, 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 pr oprietary fund financial statements provide 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 stat ements can be found on pages 31-33 of this report.

Fiduciary Funds
Fiduciary funds are used to account for resour ces held for the benefit of parties outside the government. Fiduciary funds are not re flected in the gover nment-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 34-35 of this report.

Notes to the Financial Statements
The notes provide additional in formation that is essential to a full understanding of the data provided in the government -wide and fund financial stat ements. The notes to the financial statements can be found on pages 37-116 of this report.

10 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

Other information
In addition to the basic financial statement s and accompanying notes, this report also presents certain required suppl ementary 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 funds budget -to-actual comparisons. Required supplementary information can be found on pages 120-130 of this report.

The combining statements and schedules refe rred to earlier in connection with other governmental funds is presented immediatel y following the requir ed supplementary information on pensions. Combining and individ ual fund statements and schedules can be found on pages 133-149 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, t he City reported positive net position balances for both gov ernmental and business-type activities, with total assets plus deferred outflows exceeding liabilities plus deferred inflows by $896,784,000.

Below is a summary schedule of the City’s net position at June 30, 2024 (in thousands):

Governmental Activities June 30, 2024 June 30, 2023
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Current and Other Assets 429,299$ 360,136$ 69,163$ 19.2% Non-Current Assets 4,653 1,809 2,844 157.2% Capital Assets 791,511 772,038 19,473 2.5% Total Assets 1,225,463 1,133,983 91,480 8.1% Deferred Outflows of Resources 126,835 144,205 (17,370) -12.0% Current and Other Liabilities 61,903 61,970 (67) -0.1% Long-Term Obligations 572,492 559,315 13,177 2.4% Total Liabilities 634,395 621,285 13,110 2.1% Deferred Inflows of Resources 17,935 20,322 (2,387) -11.7% Net Position:

Net Investment in Capital Assets 751,578 727,051 24,527 3.4% Restricted 127,535 107,546 19,989 18.6% Unrestricted (179,145) (173,034) (6,111) -3.5% Total Net Position 699,968$ 661,563 $ 38,405 $ 5.8% Business-Type Activities June 30, 2024 June 30, 2023
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Current and Other Assets 94,226$ 91,312 $ 2,914 $ 3.2% Non-Current Assets 554 215 339 157.7% Capital Assets 141,234 141,583 (349) -0.2% Total Assets 236,014 233,110 2,904 1.2% Deferred Outflows of Resources 8,255 10,389 (2,134) -20.5% Current and Other Liabilities 14,066 11,600 2,466 21.3% Long-Term Obligations 32,454 31,635 819 2.6% Total Liabilities 46,520 43,235 3,285 7.6% Deferred Inflows of Resources 933 786 147 18.7% Net Position:

Net Investment in Capital Assets 141,232 141,581 (349) -0.2% Restricted 24,394 21,213 3,181 15.0% Unrestricted 31,190 36,684 (5,494) -15.0% Total Net Position 196,816$ 199,478 $ (2,662) $ -1.3% 11 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

Analysis of the City’s Net Position

Current and Other Assets: The increase in current and other assets of $69,163,000 for governmental activities is mainly due to the DOF determination of the Waterfront Loan being an enforceable obligation. As mentioned above, this decision created an increase of $31,136,000 of receivables. The remaining amount is due to increased property tax, use of money and property and charges for services revenue.

The increase in current and other assets of $2,914,000 for business-type activities is primarily due to increased cash and investment balance in the Water Master Plan fund as there was strong economic growth in Fiscal Year 2023/24 as well as increased water rates.

Non-current Assets: Non-current Assets increased by $2,844,000 in governmental activities and $339,000 in business-type activities due to GASB 68 adjustments.

Current and Other Liabilities: Current and Other Liabilities for governmental activities decreased by $67,000 and increased by $2,466,000 for business-type activities. The increase 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 $17,370,000 and $2,134,000 for governmental activities and business-type activities and decrease of deferred inflows of resources of $2,387,000 for governmental activities and increase of $147,000 for business-type activities is the result of actuarially determined amortization differences between projected and actual earnings on pension plan investments, and differences between expected and actual experience used to determine the Net Pension and Other Postemployment Benefits Liabilities. See Notes 6, 7, and 8 for additional information.

Long-Term Obligations: Long-term obligations increased by $13,177,000 for governmental activities and $819,000 for business-type activities primarily due to the GASB 68 adjustments resulted in an increase of net pension liability totaling an increase $32,693,000 at the same time long-term obligations due in more than one year decreased by $18,697,000 due to regular debt obligations being paid.

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 investment 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 used to liquidate these liabilities. Net position invested in capital assets, net of related debt from governmental 12 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

activities increased $24,527,000 or 3.4 percent, primarily due to street improvements and construction projects, such as improvements to the Police station, various park improvements, pump station improvements and fiber expansion project throughout the city. Net position invested in capital assets net of related debt from business-type activities decreased $349,000 or 0.2 percent primarily due depreciation expense and a reduction of sewer and lift station improvement costs.

Restricted Net Position: An additional portion of the City’s net position is subject to external (legally imposed or statutory) restrictions ($127,535,000 for governmental activities, and $24,394,000 for business-type activities). These amounts represent 18.2 percent and 12.4 percent of net position for governmental activities and business-type activities, respectively. Restricted net position from governmental activities increased $19,989,000 or 18.6 percent, largely due to the increase in restricted net position in the Pension Liability Fund and Other Governmental Funds. The Pension Liability Fund increased due to revenues from the voter-approved property tax override dedicated to the payment of pension costs being set aside as well more increase property tax being collected based on home values going up. Other Governmental Funds saw decrease Highway, Street and Transportation related expenditure which resulted in an increase restricted net position.

Unrestricted Net Position: The unrestricted net position (negative $179,145,000 for governmental activities and $31,190,000 for business-type activities) represent negative

25.6 percent and 15.8 percent, respectively, of net position for governmental activities and business-type activities. Unrestricted net position for governmental activities decreased $6,111,000 or 3.5 percent. Unrestricted net position for business-type activities decreased by $5,494,000 or 15.0 percent. These changes can be attributed to changes in Net Pension Liability and Other Postemployment Benefits.

13 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

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

The cost of all governmental activities this year was $322,733,000. However, as shown in the Statement of Activities, the amount that taxpayers ultimately financed for these activities was $206,878,000, as costs of $86,911,000 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 $11,678,000, and capital grants and contributions of $17,266,000. Overall, the City’s governmental program revenues were $115,855,000. The City paid for the remaining “public benefit” portion of Revenues: June 30, 2024 June 30, 2023
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Program Revenues:

Charges for Current Services 86,911$ 82,704$ 4,207$ 5.1% Operating Grants and Contributions 11,678 43,005 (31,327) -72.8% Capital Grants and Contributions 17,266 11,202 6,064 54.1% Total Program Revenues 115,855 136,911 (21,056) -15.4% General Revenues:

Property Taxes 114,630 109,467 5,163 4.7% Sales Taxes 56,003 57,164 (1,161) -2.0% Utility Taxes 23,283 22,558 725 3.2% Franchise Taxes 9,625 15,100 (5,475) -36.3% Transient Occupancy Tax 17,399 17,318 81 0.5% Use of Money and Property (Loss) 12,361 5,153 7,208 139.9% From Other Agencies - Unrestricted 5,883 3,225 2,658 82.4% Gain from Elimination of Allowances 31,136 - 31,136 N/A Disposal of Machinery and Equipment (Loss) - (520) 520 N/A Total General Revenues 270,320 229,465 40,855 17.8% Total Revenues 386,175 366,376 19,799 5.4% Expenses:

City Council 441 429 12 2.8% City Manager 7,699 5,780 1,919 33.2% City Treasurer 2,124 396 1,728 436.4% City Attorney 4,156 3,248 908 28.0% City Clerk 1,674 1,370 304 22.2% Finance 6,499 6,211 288 4.6% Human Resources 2,786 - 2,786 N/A Community Development 19,124 20,550 (1,426) -6.9 % Fire 78,253 71,737 6,516 9.1% Information Services 8,682 8,565 117 1.4% Police 107,440 89,430 18,010 20.1% Community Services 15,176 13,389 1,787 13.3% Library Services 7,409 7,225 184 2.5% Public Works 51,560 49,151 2,409 4.9% Interest on Long-Term Debt 9,710 9,587 123 1.3% Total Expenses 322,733 287,068 35,665 12.4% Change in Net Position Before Transfers 63,442 79,308 Transfers (55) (38)
Change in Net Position 63,387 79,270
Net Position - Beginning of Year 636,581 557,311 Net Position - End of Year 699,968$ 636,581$
Governmental Activities
14 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

governmental activities with $270,320,000 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 $4,207,000, or 5.1 percent. This increase is mainly from reimbursement of liability claim paid out by the City. Other note worth increases in revenue were in Community Services, and Fire. Community Services saw an increase of $2,165,000 due concessionaire, recreational, special events, and facility rental revenues as well as increase in parking fees rates as tourism increased. Fire saw an increase of $6,062,000 due to the City participating in Voluntary Rate Range Intergovernmental Transfer (VRRP IGT) Program. Community Development related program revenue saw a decrease of $7,715,000 which can be attributed to decrease in permit issuance fees collected for development projects as there were no new major development projects for the year.

Operating Grants and Contributions decreased by $31,327,000 or 72.8 percent and Capital Grants and Contributions have increased by $6,064,000 or 54.1 percent. The Operating Grants and Contributions decrease is due to a one-time revenue stream of $29,607,000 for American Rescue Plan Act (ARPA) Grant the City recognized in the prior year. The majority of the increase in Capital Grants and Contributions is related to a one- time $4,900,000 grant received that is to be used for various capital improvement project.

Program expenses increased by $35,665,000, or 12.4 percent primarily due to increases in Police and Fire cost. Both departments had an overall increase of $24,325,000 which is due to increase in personal cost and pension expense.

Total resources available during the year to finance governmental operations were $1,022,756,000 consisting of net position at July 1, 2023 of $636,581,000, program revenues of $115,855,000, and general revenues of $270,320,000. Total expenses for governmental activities during the year were $322,733,000 plus transfers of $55,000.

Thus, net position increased by $63,387,000 or 10.0 percent, to $699,968,000.

15 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

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

The City’s net position from business-type activities decreased by $2,717,000 before transfers. This is mainly due increased pension expense.

Charges for current services for business-type activities decreased $1,615,000 due to the Water Fund not participating in the Coastal Pumping Transfer Program. This program reimburses the City of Huntington Beach for additional cost incurred for purchasing water rather than pumping from the city’s own wells. This is only done at OCWD’s request. No request was made in Fiscal Year 2023-24.

The cost of all business-type activities this year was $80,347,000. As shown in the Statement of Activities, the amount paid by users of the systems was $73,476,000, unrealized market gain of $4,154,000, and transfers totaling $55,000. Beginning net position was $199,478,000 and ending net position was $196,816,000, a decrease of $2,662,000, or 1.3 percent. Of the ending net position, $142,063,000, or 72.2 percent, was invested in capital assets, $24,394,000 or 12.4 percent was restricted for expenses for the Water Master Plan, and $30,359,000, or 15.4 percent was unrestricted.

Transfers in for business-type activities were $55,000 for the current year.

June 30, 2024 June 30, 2023
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Program Revenues:

Charges for Current Services 73,476$ 75,091 $ (1,615) $ -2.2% Total Program Revenues 73,476 75,091 (1,615) -2.2% Use of Money and Property (Loss) 4,154 1,356 2,798 206.3% Total Revenues 77,630 76,447 1,183 1.5% Expenses:

Water Utility 52,397 47,974 4,423 9.2% Sewer Service 12,213 11,422 791 6.9% Refuse Collection 15,543 14,935 608 4.1% Hazmat Service 194 103 91 88.3% Total Expenses 80,347 74,434 5,913 7.9% Increase (Decrease) in Net Position
Before Transfers (2,717) 2,013
Transfers 55 38
Total Change In Net Position (2,662) 2,051 Net Position - Beginning of Year 199,478 197,427 Net Position - End of Year 196,816$ 199,478 $ Business-Type Activities
16 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

Financial Analysis of the City’s Major Governmental Funds

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

The General Fund Balance increased by $5,782,000 largely due to increases in property taxes and use of money and property revenues. Due to strong enconomic growth this past fiscal year, the General Fund had unrealized market gain on invesetments of $5,181,000.

The Grants Special Revenue Fund Balance increased by $2,057,000 primarily due to $4,900,000 AEG Developer Funds received in prior year being transferred from the General Fund to the Grants Special Revenue Fund in Fiscal Year 2023/24.

The LMIHAF Capital Projects Fund Balance increased by $2,991,000 due to the Department of Finance’s decision on Emeral Cove Housing Project promissory note issued by the former Redevelopment Agency to the City as an enforceable obligation.

This decision resulted in $3,801,000 revenue for the fund.

The Pension Liability Fund increased by $11,137,000, largely due to revenues set aside from the voter-approved property tax override and amount charged to other funds dedicated to the payment of Public Safety pension costs.

The Infrastructure Fund decreased by $4,001,000 due to the City spending more on needed infrastructure improvement throughout the City. Major projects include police facility improvements, mobility and corridor improvements, residential pavements, arterial beautification, and sustainability-related capital improvements.

June 30, 2024 June 30, 2023
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Total Fund Equity:

General Fund 132,319$ 126,537$ 5,782$ 4.6% Grants Special Revenue Fund 2,712 655 2,057 314.0% LMIHAF Capital Projects Fund 7,910 4,919 2,991 60.8% Pension Liability Fund 36,119 24,982 11,137 44.6% Infrastructure 29,397 33,398 (4,001) -12.0% Total Fund Equity 208,457$ 190,491$ 17,966$ 9.4% Governmental Funds
17 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

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 $4,165,000 due to the City receiving one- time revenue from Orange County Water District in prior year of $3,956,000. All other enterprise funds generated revenue that exceeded expenses in Fiscal Year 2023/24 due to unrealized market gain on investments.

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

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 June 30, 2024 June 30, 2023
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Net Position:

Water Fund 116,368 $ 120,533 $ (4,165) $ -3.5% Sewer Fund 79,813 75,606 4,207 5.6% Refuse Fund 216 35 181 517.1% Hazmat Service Fund 419 304 115 37.8% Total Net Position 196,816 $ 196,478 $ 338 $ 0.2% Unrestricted Net Position:

Water Fund 5,923 $ 10,880 $ (4,957) $ -45.6% Sewer Fund 24,722 25,556 (834) -3.3% Refuse Fund 132 (56) 188 335.7% Hazmat Service Fund 413 304 109 35.9% Total Unrestricted Net Position 31,190 $ 36,684 $ (5,494) $ -15.0% Enterprise Funds
Governmental Activities: June 30, 2023 Additions Retirements June 30, 2024 Revenue Bonds 25,160$ -$ (2,250)$ 22,910$ Compensated Absences 14,818 5,241 (4,526) 15,533 Claims Payable 66,621 21,573 (27,099) 61,095 Pollution Remediation 2,000 - - 2,000 LED Lighting Phase I 191 - (126) 65 I-Bank CLEEN Loan 1,283 - (310) 973 CEC Loan 1,797 - (269) 1,528 Pension Obligation Bonds 318,005 - (12,683) 305,322 Finance Purchase Agreement 17,388 - (3,098) 14,290 Leases Payable 456 - (216) 240 Subscriptions Payable 2,600 2,666 (1,466) 3,800 Total Long-Term Obligations
Governmental Activities 450,319 29,480 (52,043) 427,756 Business-Type Activities:

Compensated Absences 1,826 416 (484) 1,758 Pension Obligation Bonds 20,480 - (891) 19,589 Business-Type Activities: 22,306 416 (1,375) 21,347 Total Long-Term Obligations 472,625$ 29,896$ (53,418)$ 449,103$ 18 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

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 decreased by $23,552,000 or

5.0 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 liabilities 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 recently reaffirmed in September 2024.

The following are the ratings as determined by Standard and Poor’s and Fitch Ratings as of June 30, 2024.

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

x Storm drain system including pump stations, drainage system and manholes. x Streets (including land underneath 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+ AAA
19 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

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

Capital assets from governmental activities increased $19,473,000 or 2.5 percent. This increase is largely due to street replacement infrastructure costs and construction improvements throughout the City. Capital assets from business-type activities decreased $349,000 or 0.2 percent largely due to depreciation expense exceeding assets capitalized. Further information on the City’s capital assets can be found in Note 12 of the financial statements.

Furthermore, 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 2023/24, the City reported $243,000 in right-to-use lease assets.

General Fund Budgetary Highlights

Changes to Original Budget

Comparing the Fiscal Year 2023/24 General Fund Original (i.e. Adopted) Budget expenditures amount of $227,178,000 to the final budgeted amount of $265,498,000 shows a net increase of $38,320,000, or 16.9 percent. This overall increase is primarily due to budget carryovers of $7,678,000, increased transfers to Equipment Fund of $5,453,000, Section 155 Trust of $1,435,000, Self Insurance General Liability Fund of $15,569,000, Self Insurance Worker’s Compensation Fund of $4,245,000 and operating increases of $4,513,000 increase.

Governmental Activities: June 30, 2024 June 30, 2023
Amount
Increase
(Decrease)
Percent
Increase
(Decrease)
Land 369,538 $ 369,538 $ - $ 0.0% Buildings 125,878 127,820 (1,942) -1.5% Machinery and Equipment 38,543 32,401 6,142 19.0% Construction in Progress 15,141 11,249 3,892 34.6% Infrastructure 237,968 227,641 10,327 4.5% Right to Use Leased Land 22 106 (84) -79.2% Right to Use Leased Machinery and Equipment 221 356 (135) -37.9% Right to Use SBITA Asset 4,200 2,927 1,273 43.5% Total Governmental Activities 791,511 772,038 19,473 2.5% Business-Type Activities:

Land 3,907 3,907 - 0.0% Buildings 63,515 66,089 (2,574) -3.9% Machinery and Equipment 6,142 6,064 78 1.3% Construction in Progress 3,383 839 2,544 303.2% Infrastructure 64,287 64,684 (397) -0.6% Total Business-Type Activities 141,234 141,583 (349) -0.2% Total Capital Assets 932,745 $ 913,621 $ 19,124 $ 2.1% 20 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

Final budgeted revenues for the General Fund increased $8,267,000 or 2.9 percent from the original (adopted) budget for the Fiscal Year ended June 30, 2024. 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 more than the final budget by $5,161,000 for the Fiscal Year ended June 30, 2024. This budget variance is due in large part to actual investment returns outperforming budgeted amounts and intergovernmental revenues.

General Fund expenditures were $10,219,000 less than the final budget. The favorable budget variance is due in large part to the following:

x The Information Services Departments realized $1,535,000 in savings primarily due to differences in projected versus actual cost of providing services. x Community Development Departments realized $4,742,000 in savings primarily due to differences in the projected versus actual timing of design, construction, and maintenance contracts for projects, as 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 Special Revenue Fund increased by $2,057,000 primarily due to $4,900,000 AEG Developer Funds received in prior year being transferred from the General Fund transferred to the Grants Special Revenue Fund in Fiscal Year 2023/24.

LMIHAF Capital Projects Fund

The LMIHAF Capital Projects Fund Balance increased by $2,991,000 due to the Department of Finance agreeing to Emeral Cove Housing Project promissory note issued by the former Redevelopment Agency to the City as an enforceable obligation. This decision resulted in $3,801,000 revenue for the fund.

Pension Liability Debt Service Fund

The fund balance in the Pension Liability Debt Service Fund increased by $11,137,000 due to revenues set-aside from the voter-approved property tax override dedicated to the payment of Public Safety pension costs and employee’s contribution to the fund.

21 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

Economic Factors and Next Year’s Budget

The Adopted FY 2024/25 Budget totals $527.2 million in all funds. This reflects a $19.2 million, or 3.8 percent increase from the FY 2023/24 Adopted All Funds Budget of $508.0 million. A significant portion of the increase is due to the General Fund Revenue.

General Fund expenditures total $300.0 million and are supported by revenues of $301.7 million. The Adopted General Fund Budget has no reliance on one-time revenues to fund ongoing operations, which is critical to maintaining the City’s financial viability and success, and represents a $14.8 million, or 5.2 percent, increase compared to the FY 2023/34 Adopted Budget of $285.2 million.

Public Safety: Funding for Public Safety represents 51 cents for every dollar spent in the General fund. With more than half of the General Fund Budget committed to the Police and Fire Departments, the City has dedicated the greatest share of its resources, or $154.4 million, to these core services to ensure the safety and protection of all community members.

In the Police Department, the Adopted Budget includes $100,000 for training and supplies, approximately $129,000 for new laptop equipment, licensing, and cellular connectivity with the transition to the new CAD/RMS system and $190,000 for a larger horse trailer and truck with the expansion to five horses in the Mounted Enforcement Unit.

The CIP includes $109,000 for the retrofitting and refurbishing of the PD South Substation constructed in 1913.

In the Fire Department, the Adopted Budget includes $1.3M for the purchase of a triple combination fire pumper. The General Fund CIP includes $600,000 for the installation of a butler building at the Murdy and Gothard fire stations for storing additional apparatuses currently being stored outside causing more wear and tear.

Revenue growth, reining in expenditures, strong reserves, and public service excellence are areas of focus for the organization. The City’s commitment to financial sustainability is also demonstrated by its proactive approach to addressing future budget challenges through the Adopted Budget Balancing Plan, which identifies $1.65 million in ongoing new revenues and $5.03 million in ongoing expenditure reductions, including $1.5 million in savings through implementation of a managed hiring program. The FY 2024/25 Budget is structurally balanced and continues the efforts made during Fiscal Year 2023/24.

However, General Fund budget deficits are projected in future fiscal years. To address these challenges, City staff is continuing efforts to identify revenue growth opportunities, improved operational efficiencies, and expenditure reductions to support the City’s long- term fiscal health.

22 City of Huntington Beach
Management’s Discussion and Analysis
For the Year Ended June 30, 2024

General Fund Revenue

General Fund revenues are anticipated to be $301.7 million, a $17.8 million, or 6.3 percent increase from the FY 2023/24 Adopted Budget. The largest increases are in Revenue from Other Agencies, attributable to participation in the Voluntary Rate Range Intergovernmental Transfer (VRRP IGT) Program, and in Non-operating Revenue, which accounts for a one-time transfer of $6.9 million for the first repayment related to the Waterfront Loan Superior Court Judgement.

x Property Tax is the largest revenue category for the City and is anticipated to increase by $4.0 million or 3.8 percent to $104.2 million due to gains in assessed property valuations.
x Charges for Current Services is projected to increase $2.3 million due to increases in some of the fees, including medical transport, as well as increased demand for services, such as recreation classes and fitness center memberships.

Contacting the City’s Financial Management Team

This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report, separate reports of the City’s component units or need any additional financial information, contact the Finance Department at 2000 Main Street, Huntington Beach, California, 92648-2702, phone (714) 536-5630 or email [email protected]. 23 %$6,&),1$1&,$/67$7(0(176
24 ASSETS
Governmental
Activities
Business-Type
Activities Total
Current Assets:

Cash and Investments 328,994 $ 82,380 $ 411,374 $ Cash and Investments with Fiscal Agent 3,581 - 3,581 Receivables, Net 52,886 7,668 60,554 Advances to Successor Agency 26,272 - 26,272 Lease Receivable 9,462 - 9,462 Inventories - 1,531 1,531 Prepaids 7,837 - 7,837 Joint Venture 267 2,647 2,914 Total Current Assets 429,299 94,226 523,525 Capital Assets:

Non-Depreciable 384,679 7,290 391,969 Depreciable, Net 406,832 133,944 540,776 Total Capital Assets 791,511 141,234 932,745 Non-Current Assets:

Net Other Postemployment Benefits Asset 4,653 554 5,207 Total Non-Current Assets 4,653 554 5,207 Total Assets 1,225,463 236,014 1,461,477

DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 121,739 7,649 129,388 Deferred Outflows Related to Other Postemployment Benefits 5,096 606 5,702 Total Deferred Outflows of Resources 126,835 8,255 135,090

LIABILITIES
Current Liabilities:

Accounts Payable 15,400 10,678 26,078 Accrued Payroll 3,121 267 3,388 Unearned Revenue 3,774 - 3,774 Accrued Interest Payable 614 22 636 Deposits 2,763 1,722 4,485 Long-Term Obligations Due Within One Year 36,231
1,377 37,608
Total Current Liabilities 61,903 14,066 75,969 Long-Term Obligations:

Long-Term Obligations Due in More than One Year 391,525 19,970 411,495 Net Pension Liability 180,967 12,484 193,451 Total Long-Term Obligations 572,492 32,454 604,946 Total Liabilities 634,395 46,520 680,915

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 974 7 981 Deferred Inflows Related to Other Postemployment Benefits 7,770 926 8,696 Deferred Inflows Lease Related 9,191 - 9,191 Total Deferred Inflow of Resources 17,935 933 18,868

NET POSITION
Net Investment in Capital Assets 751,578
141,232 892,810
Restricted for:

Debt Service 40,631 - 40,631 Capital Projects 25,105 23,840 48,945 Public Works and Community Services Projects 57,146 - 57,146 OPEB Benefits 4,653 554 5,207 Total Restricted Net Position 127,535 24,394 151,929 Unrestricted (179,145) 31,190 (147,955) Total Net Position 699,968$ 196,816 $ 896,784 $

CITY OF HUNTINGTON BEACH

STATEMENT OF NET POSITION
JUNE 30, 2024
(In Thousands)
See Notes to the Financial Statements
25 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 441$ 175$ -$ -$ (266)$ -$ (266)$ City Manager 7,699 4,057 1,695 42 (1,905) - (1,905) City Treasurer 2,124 161 - - (1,963) - (1,963) City Attorney 4,156 6 - - (4,150) - (4,150) City Clerk 1,674 508 - - (1,166) - (1,166) Finance 6,499 3,280 - - (3,219) - (3,219) Human Resources 2,786 7,670 - - 4,884 - 4,884 Community Development 19,124 11,102 3,903 693 (3,426) - (3,426) Fire 78,253 20,228 79 - (57,946) - (57,946) Information Services 8,682 654 - - (8,028) - (8,028) Police 107,440 5,558 1,794 - (100,088) - (100,088) Com
munity Services 15,176 24,713 686 97 10,320 - 10,320 Library Services 7,409 229 548 - (6,632) - (6,632) Public Works 51,560 8,570 2,973 16,434 (23,583) - (23,583) Interest on Long-Term Debt 9,710 - - - (9,710) - (9,710) Total Governmental Activities 322,733 86,911 11,678 17,266 (206,878) - (206,878) Business-type Activities:

Water Utility 52,397 45,739 - - - (6,658) (6,658) Sewer Service 12,213 11,798 - - - (415) (415) Refuse Collection 15,543 15,637 - - - 94 94 Hazmat Service 194 302 - - - 108 108 Total Business-Type Activities 80,347 73,476 - - - (6,871) (6,871) Total Governmental and
Business Type Activities 403,080$ 160,387 $ 11,678 $ 17,266 $ (206,878)$ (6,871) $ (213,749)$ General Revenues:

Taxes:

Property Taxes 114,630 $ - $ 114,630$ Sales Taxes 56,003 - 56,003 Utility Taxes 23,283 - 23,283 Franchise Taxes 9,625 - 9,625 Transient Occupancy Tax 17,399 - 17,399 Total Taxes 220,940 - 220,940 Other:

Use of Money and Property 12,361 4,154 16,515 From Other Agencies - Unrestricted 5,883 - 5,883 Gain from Elimination of Allowances 31,136 - 31,136 Total General Revenues 270,320 4,154 274,474 Transfers (55) 55 -
Total General Revenues and Transfers 270,265 4,209 274,474 Change in Net Position 63,387 (2,662) 60,725 Net Position - Beginning of Year 636,581 199,478 836,059 Net Position - End of Year 699,968$ 196,816 $ 896,784 $ Net (Expense) Revenue and Changes in
Net Position

CITY OF HUNTINGTON BEACH

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2024
(In Thousands)
See Notes to the Financial Statements
26 CITY OF HUNTINGTON BEACH

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2024
(In Thousands)
ASSETS General Fund
Grants Special
Revenue
LMIHAF
Capital
Projects
Pension
Liability Infrastructure
Other
Governmental
Funds Total
Cash and Investments 123,561$ 5,649$ 6,968$ 35,786$ 33,015$ 69,141$ 274,120$ Cash and Investments with Fiscal Agent - - - - - 3,581 3,581 Taxes Receivable 14,480 - - 103 - 1,398 15,981 Other Receivables, Net 7,904 11,119 14,253 232 120 1,885 35,513 Lease Receivable 9,462 - - - - - 9,462 Advances to Successor Agency 24,909 - 1,363 - - - 26,272 Prepaids 177 - - - - 5,165 5,342 Total Assets 180,493 16,768 22,584 36,121 33,135 81,170 370,271

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES

LIABILITIES
Accounts Payable 6,317 2,482 441 2 3,697 1,286 14,225 Accrued Payroll 3,001 17 - - 41 52 3,111 Unearned Revenue 1,272 2,502 - - - - 3,774 Deposits Payable 2,763 - - - - - 2,763 Total Liabilities 13,353 5,001 441 2 3,738 1,338 23,873

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Lease Related 9,191 - - - - - 9,191 Unavailable Revenue 25,630 9,055 14,233 - - 82 49,000 Total Deferred Inflows of Resources 34,821 9,055 14,233 - - 82 58,191

FUND BALANCES
Nonspendable
Prepaids 148 - - - - - 148 Restricted
Underground Utilities 364 - - - - - 364 Restitution 317 - - - - - 317 Donations 777 - - - - - 777 Section 115 Trust 20,212 - - - - - 20,212 Pollution Remediation - - - - - 336 336 Debt Service - - - 36,119 - 4,512 40,631 Highways, Streets and Transportation - - - - - 19,675 19,675 Low Income Housing - - 7,910 - - 12,305 20,215 Air Quality - - - - - 828 828 Other Capital Projects - - - - - 17,559 17,559 Other Purposes - 2,712 - - - 3,613 6,325 Committed
Economic Uncertainties 49,090 - - - - - 49,090 Parks - - - - - 7,142 7,142 Other Capital P
rojects 1,379 - - - 29,397 2,866 33,642 Other Purposes 1,554 - - - - 4,152 5,706 Assigned
Litigation Reserves 3,650 - - - - - 3,650 Capital Improvement Reserve 9,425 - - - - 6,762 16,187 Equipment Replacement 8,295 - - - - - 8,295 General Plan Maintenance 1,651 - - - - - 1,651 HB Recovery Fund 10,886 - - - - - 10,886 Oceanview Estates 641 - - - - - 641 General Liability Plan Migration 2,801 - - - - - 2,801 Pension Rate Stabilization 5,517 - - - - - 5,517 Section 115 Trust 4,211 - - - - - 4,211 Year-End Fair Value 3,025 - - - - - 3,025 Other Pu
rposes 8,376 - - - - - 8,376 Total Fund Balances 132,319 2,712 7,910 36,119 29,397 79,750 288,207 Total Liabilities, Deferred Inflows
of Resources and Fund Balances 180,493$ 16,768 $ 22,584 $ 36,121 $ 33,135 $ 81,170 $ 370,271 $ See Notes to the Financial Statements
27 Amounts reported for governmental activities in the statement of net position are different because:

Total Fund Balances Governmental Funds 288,207$
Net Other Postemployment Benefits Asset is not available to pay in the current period and therefore are not reported in the funds.

Net Other Postemployment Benefits Asset 4,628
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 1,197,076
Accumulated Depreciation (421,210)

Total Capital Assets 775,866
Joint Venture 267
Right to Use Leased/SBITA Assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds.

Right to Use Leased Assets 672
Right to Use SBITA Assets 6,236
Accumulated Amortization (2,465)
Total Right to Use Assets 4,443
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. 6,459 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. 49,000
Deferred Outflows Related to Pensions 121,370
Deferred Outflows Related to Other Postemployment Benefits (OPEB) 5,069 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. (180,367) Deferred Inflows Related to Pensions (973)
Deferred Inflows Related to Other Postemployment Benefits (OPEB) (7,728) Other long-term liabilities are not due in the current period and, therefore, are not recorded in the governmental funds.

Accrued Interest Payable (614)
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 (21,809)
Long-Term Obligations Due in More than One Year (343,850)

Net Position of Governmental Activities 699,968$
(In Thousands)

CITY OF HUNTINGTON BEACH

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2024
See Notes to the Financial Statements
28 REVENUES
General
Fund
Grants Special
Revenue
LMIHAF
Capital
Projects
Pension
Liability Infrastructure
Other
Governmental
Funds Total
Property Taxes 105,750 $ - $ - $ 8,880$ - $ - $ 114,630$ Sales Taxes 51,421 - - - - 4,582 56,003 Utility Taxes 23,283 - - - - - 23,283 Other Taxes 27,024 - - - - 441 27,465 Licenses and Permits 10,200 - - - - 393 10,593 Fines and Forfeitures 3,666 - - - - - 3,666 Use of Money and Property (Loss) 30,133 276 790 767 1,474 4,329 37,769 Intergovernmental 11,387 12,141 3,801 - 50 11,543 38,922 Charges for Current Services 31,671 - - 21,073 - 3,539 56,283 Other 2,234 814 - - 67 98 3,213 Total Revenues 296,769 13,231 4,591 30,720 1,591 24,925 371,827

EXPENDITURES
Current:

City Council 464 - - - - - 464 City Manager 4,853 1,777 - - - 487 7,117 City Treasurer 2,059 - - - - - 2,059 City Attorney 3,994 - - - - - 3,994 City Clerk 1,653 - - - - - 1,653 Finance 5,963 - - 5 - 31 5,999 Human Resources 2,636 - - - - - 2,636 Community Development 13,410 3,277 1,600 - - 1,125 19,412 Fire 71,576 36 - - - 4,635 76,247 Information Services 7,896 - - - - 1,020 8,916 Police 99,071 3,551 - - - 846 103,468 Community Services 12,354 324 - - 219 1,282 14,179 Library Services 6,954 229 - - - 52 7,235 Public Works 27,436 6,880 - - 22,122 12,731 69,169
Debt Service:

Principal 5,485 - - 12,640 - 2,250 20,375 Interest 585 - - 8,438 - 705 9,728 Total Expenditures 266,389 16,074 1,600 21,083 22,341 25,164 352,651 Excess (Deficiency) of Revenues Over
(Under) Expenditures 30,380 (2,843) 2,991 9,637 (20,750) (239) 19,176

OTHER FINANCING SOURCES (USES)
Transfers In 478 4,900 - 1,500 16,749 5,137 28,764 Subscription Based IT Arrangement 2,666 - - - - - 2,666 Transfers Out (27,742) - - - - (1,077) (28,819) Total Other Financing Sources (Uses) (24,598) 4,900 - 1,500 16,749 4,060 2,611 Net Change In Fund Balances 5,782 2,057 2,991 11,137 (4,001) 3,821 21,787 Fund Balances - Beginning of Year 126,537 655 4,919 24,982 33,398 75,929 266,420 Fund Balances - End of Year 132,319 $ 2,712 $ 7,910 $ 36,119 $ 29,397 $ 79,750 $ 288,207 $ (In Thousands)

CITY OF HUNTINGTON BEACH

STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
See Notes to the Financial Statements
29 Amounts reported for governmental activities in the statement of activities are different because:

Net Changes in Fund Balances - Total Governmental Funds 21,787$

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.

Depreciable Assets Purchased 33,510
Depreciable Assets Disposition (6) Non-Depreciable Assets Purchased 10,363 Non-Depreciable Assets Disposition (6,471) Capital Asset Depreciation (19,716)
Joint Venture 52
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.

Current Year Grant and Other Revenue Accrual 39,145 Prior Year Grant and Other Revenue Accrual (3,724) 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. (779) 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. (45,163) 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). 649 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. 16,721 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.

Current Year Interest Accrual (614) Prior Year Interest Accrual 632
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. 20,375 The issuance of long-term debt provides current financial resources to governmental funds. (2,666)
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. (708)
Change in Net Position of Governmental Activities 63,387$ FOR THE YEAR ENDED JUNE 30, 2024
(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
See Notes to the Financial Statements
30 Governmental
Activities
Water
Fund
Sewer Service
Fund
Refuse
Fund
Hazmat
Service Fund Total
Internal Service
Funds
ASSETS
Current Assets:

Cash and Investments 24,931 $ 32,240 $ 598 $ 771 $ 58,540$ 54,874 $ Restricted Cash and Investments 23,840 - - - 23,840 - Other Receivables, Net 2,747 723 801 15 4,286 1,392 Prepaids - - - - - 2,495 Joint Ventures 2,647 - - - 2,647 - Inventories 1,531 - - - 1,531 - Unbilled Receivables 2,101 562 719 - 3,382 - Total Current Assets 57,797 33,525 2,118 786 94,226 58,761 Capital Assets:

Land 3,907 - - - 3,907 - Buildings and Improvements 57,933 47,690 - - 105,623 67 Machinery and Equipment 15,965 4,751 215 - 20,931 16,769 Infrastructure 108,778 47,178 - - 155,956 - Construction in Progress 273 3,110 - - 3,383 - Less Accumulated Depreciation (100,647) (47,774) (145) - (148,566) (5,634) Total Capital Assets 86,209 54,955 70 - 141,234 11,202 Non-Current Assets:

Net Other Postemployment Benefits Asset 398 136 14 6 554 25 Total Non-Current Assets 398 136 14 6 554 25 Total Assets 144,404 88,616 2,202 792 236,014 69,988

DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 5,352 2,002 179 116 7,649 369 Deferred Outflows Related to Other Postemployment Benefits 436 149 15 6 606 27 Total Deferred Outflows of Resources 5,788 2,151 194 122 8,255 396 Total Assets and Deferred Outflows of Resources 150,192 90,767 2,396 914 244,269 70,384

LIABILITIES
Current Liabilities:

Accounts Payable 7,686 1,798 1,194 - 10,678 1,175 Accrued Payroll 184 72 9 2 267 10 Deposits Payable 1,508 64 150 - 1,722 - Interest Payable 15 6 1 - 22 - Current Portion of Claims Payable - - - - - 14,363 Current Portion of Compensated Absences 358 106 14 1 479 16 Long-Term Obligations Due Within One Year 628 235 21 14 898 43 Total Current Liabilities 10,379 2,281 1,389 17 14,066 15,607 Non-Current Liabilities:

Compensated Absences 958 283 36 2 1,279 43 Long-Term Obligations Due in More than One Year 13,079 4,892 439 281 18,691 900 Net Pension Liability 8,738 3,268 293 185 12,484 600 Claims Payable - - - - - 46,732 Total Non-Current Liabilities 22,775 8,443 768 468 32,454 48,275 Total Liabilities 33,154 10,724 2,157 485 46,520 63,882

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 5 2 - - 7 1 Deferred Inflows Related to Other Postemployment Benefits 665 228 23 10 926 42 Total Deferred Inflows of Resources 670 230 23 10 933 43

NET POSITION
Investment in Capital Assets 86,207 54,955 70 - 141,232 25,565 Restricted for:

Capital Projects 23,840 - - - 23,840 - OPEB Benefits 398 136 14 6 554 25 Unrestricted 5,923 24,722 132 413 31,190 (19,131) Total Net Position 116,368 79,813 216 419 196,816 6,459 Total Liabilities, Deferred Inflows
of Resources, and Net Position 150,192 $ 90,767 $ 2,396 $ 914 $ 244,269$ 70,384 $

PROPRIETARY FUNDS

STATEMENT OF NET POSITION

CITY OF HUNTINGTON BEACH
Business-Type Activities - Enterprise Funds
(In Thousands)
June 30, 2024
See Notes to the Financial Statements
31 Governmental
Activities
Water
Fund
Sewer Service
Fund
Refuse
Fund
Hazmat
Service Fund Total
Internal Service
Funds

OPERATING REVENUES
Sales 41,024$ - $ - $ - $ 41,024$ - $ Fees and Charges for Service - 11,643 15,551 302 27,496 36,760 Other 4,715 155 86 - 4,956 9,358 Total Operating Revenues 45,739 11,798 15,637 302 73,476 46,118

OPERATING EXPENSES
Water Purchases 17,302 - - - 17,302 - Supplies and Operations 13,956 9,663 15,510 186 39,315 4,369 Engineering 2,743 - - - 2,743 - Production and Distribution 10,900 - - - 10,900 - Maintenance 73 - - - 73 - Water Meters 2,024 - - - 2,024 - Water Quality 792 - - - 792 - Water Use Efficiency 298 - - - 298 - Claims and Judgments - - - - - 24,964 Depreciation 3,937 2,411 21 - 6,369 2,019 Total Operating Expenses 52,025 12,074 15,531 186 79,816 31,352 Operating Income (Loss) (6,286) (276) 106 116 (6,340) 14,766

NON-OPERATING REVENUES (EXPENSES)
Investment Income 2,493 1,622 19 20 4,154 1,981 Interest Expense (372) (139) (12) (8) (531) (26) Total Non-Operating Revenues (Expenses) 2,121 1,483 7 12 3,623 1,955 Income (Loss) Before Transfers (4,165) 1,207 113 128 (2,717) 16,721

TRANSFERS
Transfers In - - 68 - 68 - Transfers Out - - - (13) (13) - Total Transfers - - 68 (13) 55 - Change in Net Position (4,165) 1,207 181 115 (2,662) 16,721 Net Position - Beginning of Year 120,533 78,606 35 304 199,478 (10,262) Net Position - End of Year 116,368 $ 79,813 $ 216 $ 419 $ 196,816$ 6,459 $ Business-Type Activities - Enterprise Funds
(In Thousands)
FOR THE YEAR ENDED JUNE 30, 2024

PROPRIETARY FUNDS

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

CITY OF HUNTINGTON BEACH
See Notes to the Financial Statements
32 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 49,022 $ 11,662 $ 15,424 $ 305 $ 76,413$ 44,891 $ Cash Paid to Employees for Services (10,430) (4,345) (432) (130) (15,337) (354) Cash Paid to Suppliers of Goods and Services (34,209) (3,252) (14,939) 1 (52,399) (34,359) Other Operating Items
Net Cash and Investment Provided (Used) by
Operating Activities 4,383 4,065 53 176 8,677 10,178

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Transfers In - - 68 - 68 - Transfers Out - - - (13) (13) - Principal Paid (624) (233) (21) (13) (891) (43) Interest Paid (372) (139) (12) (8) (531) (26) Net Cash and Investments Provided (Used) by
Noncapital Financing Activities (996) (372) 35 (34) (1,367) (69)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Purchase of Capital Assets (1,706)
(4,315) 1 - (6,020) (3,812) Net Cash and Investments Provided (Used) by
Capital and Related Financing Activities (1,706) (4,315) 1 - (6,020) (3,812)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment Income 2,493 1,622 19 20 4,154 1,981 Net Cash and Investments Provided (Used) by
Investing Activities 2,493 1,622 19 20 4,154 1,981 Net Increase (Decrease) in Cash and Investments 4,174 1,000 108 162 5,444 8,278 Cash and Investments - Beginning of Year 44,597 31,240 490 609 76,936 46,596 Cash and Investments - End of Year 48,771 $ 32,240 $ 598 $ 771 $ 82,380$ 54,874 $

RECONCILIATION OF OPERATING

INCOME (LOSS) TO NET CASH AND INVESTMENTS

PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) (6,286) $ (276) $ 106 $ 116 $ (6,340)$ 14,766 $ Adjustments to Reconcile Operating Income (Loss) to Net Cash and Investments Provided (Used) by Operating Activities Depreciation 3,937 2,411 21 - 6,369 2,019 (Increase) Decrease in Other Receivables, Net 3,603 (95) (113) 3 3,398 (1,227) (Increase) in Unbilled Receivables (335) (105) (94) - (534) - (Increase) in Prepaids - - - - - (514) (Increase) in Joint Ventures (427) - - - (427) - Decrease in Inventory 93 - - - 93 - (Increase) in Net Other Postemployment Benefits Asset (243) (83) (9) (4) (339) (15) Increase in Accounts Payable 1,184 1,191 45 - 2,420 470 Increase (Decrease) in Accrued Payroll (6) (9) 1 (1) (15) 2 Increase (Decrease) in Deposits Payable 15 64 (6) - 73 - (Decrease) in Claims Payable - - - - - (5,526) Increase (Decrease) in Compensated Absences 11 (87) 6 2 (68) 7 Decrease in Deferred Pension Outflow 1,427 533 48 28 2,036 97 (Decrease) in Deferred Pensi
on Inflow (12) (5) - - (17) - Increase in Net Pension Liability 1,234 462 41 29 1,766 87 Decrease in Deferred Other Postemployment Benefits Outflow 70 24 3 1 98 5 Increase in Deferred Other Postemployment Benefits Inflow 118 40 4 2 164 7 Net Cash and Investments Provided
by Operating Activities 4,383 $
4,065 $ 53 $ 176 $ 8,677$ 10,178 $

NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES
There were no noncash investing, capital, or financing activities during the year ended June 30, 2024.

FOR THE YEAR ENDED JUNE 30, 2024
(In Thousands)
Business-Type Activities - Enterprise Funds

CITY OF HUNTINGTON BEACH

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
See Notes to the Financial Statements
33 ASSETS Custodial Funds
Pension Trust Fund -
Retirement
Supplemental Fund
Huntington Beach
Redevelopment
Successor Agency
Private Purpose Trust
Cash and Investments 4,062$ 11$ 7,062$ Cash and Investments with Fiscal Agent 3,357 - 2,761 Mutual Funds - 65,476 - Money Market Funds - 661 - Accounts Receivable, Net 776 - - Interest Receivable - - 119 Total Assets 8,195 66,148 9,942

LIABILITIES
Current Liabilities:

Accounts Payable 1,362 - 275 Accrued Payroll - - 3 Advances from City of Huntington Beach - - 32,499 Long-Term Obligations Due Within One Year - - 2,372 Total Current Liabilities 1,362 - 35,149 Long-Term Obligations:

Long-Term Obligations Due in More than One Year - - 13,854 Total Long-Term Obligations - - 13,854 Total Liabilities 1,362 - 49,003

NET POSITION
Restricted for Pension Benefits - 66,148 - Restricted for Individuals and Organizations 6,833 - (39,061) Total Net Position 6,833$ 66,148 $ (39,061) $

CITY OF HUNTINGTON BEACH

STATEMENT OF FIDUCIARY FUND NET POSITION

FIDUCIARY FUNDS
JUNE 30, 2024
(In Thousands)
See Notes to the Financial Statements
34 ADDITIONS Custodial Funds
Pension Trust Fund -
Retirement
Supplemental Fund
Huntington Beach
Redevelopment
Successor Agency
Private Purpose Trust
Employer Contributions -$ 1,429$ -$ Collected from Property Owners 1,559 - 7,517 Business Improvement District Taxes 6,961 - - Parking Assessments 2,635 - - Total Additions Before Investment Income 11,155 1,429 7,517 Investment Income:

Investment Income (Loss) 199 7,080 442 Less: Investment Expense - (126) - Net Investment Income (Loss) 199 6,954 442 Total Additions 11,354 8,383 7,959

DEDUCTIONS
Benefits - 5,711 - Administrative Costs 20 351 - Payments to Other Organizations 8,142 - - Economic Development - - 225 Interest and Fiscal Agency Expenses 1,273 - 7,863 General Government - - 31,136 Principal 1,890 - - Total Deductions 11,325 6,062 39,224 Change in Net Position 29 2,321 (31,265) Net Position - Beginning of Year 6,804 63,827 (7,796) Net Position - End of Year 6,833 $ 66,148 $ (39,061) $

STATEMENT OF CHANGES IN FIDUCIARY FUND NET POSITION

FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
(In Thousands)

CITY OF HUNTINGTON BEACH
See Notes to the Financial Statements
35 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

Footnote
Number Description Page

1. Summary of Significant Accounting Policies ............................ 37-54

2. Cash and Investments Notes ...................................................... 55-61

3. Other Receivables ......................................................................... 61-62

4. Unearned Revenue ....................................................................... 63

5. Unavailable Revenue ................................................................... 63

6. Retirement Plan – Normal ........................................................... 64-74

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 ................................................................. 93-104

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

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

14. Leases ............................................................................................. 106

15. Successor Agency Trust for Assets of the Former
Redevelopment Agency of the City of Huntington Beach ..... 107-112

16. Commitments and Contingencies .............................................. 112-116

17. Other Information ......................................................................... 116 36 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT 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 separate organizations for which the City Council is financially accountable, or organizations 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 fund with the primary government for financial 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 substantively 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 services 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 Authority) 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 Rehabilitation 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 adopted a resolution designating the Housing Authority of the City of Huntington Beach to serve as the Housing Successor Agency. The Housing Successor Agency's financial data and transactions are included within the LMIHAF Capital Projects Fund. There is no separate Component Unit Financial Report (CUFR) prepared for the Authority.

37 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING 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 purchases for the City and the former Redevelopment Agency. The Public Financing Authority’s governing 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 issued financial statements available for the Public Financing Authority.

The City of Huntington Beach Supplemental Retirement Plan and Trust (Supplemental Retirement Plan and Trust) – The Trust was formed to provide a supplemental retirement plan for all employees hired prior to 1997 (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 Retirement 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. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. These 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 as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

38 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING 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 identifiable with a specific function or segment. Indirect expenses are allocated to the various functions based on a proportionate use of services. The types of transactions reported as program revenues for the City are reported in three categories: 1) charges for current services; 2) operating grants and contributions; and, 3) capital grants and contributions. Taxes 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 unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed.

Financial Statement Classification
In the government-wide financial statements, 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. Accumulated depreciation and the outstanding balances of debt that are attributable 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 governments and restrictions imposed by law through constitutional provisions or enabling legislation. The government-wide Statement of Net Position reports $127,535,000 of governmental activities restricted net position. The government-wide Statement of Net Position reports $24,394,000 of business-type activities restricted net position, of which all is restricted by enabling legislation. This category presents restrictions placed on the categories of Capital Projects, Debt Service, and Specific Projects and Programs.

39 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING 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 $179,145,000 of governmental activities, which is largely a result of the City’s Long-Term Obligations at June 30, 2024 is $604,946,000, of which, $572,492,000 is payable from Governmental Activities. The government-wide Statement of Net Position reports $31,190,000 of business-type activities unrestricted net position.

c. Fund Financial Statements

Separate fund financial statements are prepared for governmental 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 Accounting, and Financial Statement Presentation
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Only current assets, current liabilities, and deferred inflows are included on the Balance Sheets. The Statement of Revenues, Expenditures, and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual 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.
40 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING 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-major funds aggregated. Accompanying schedules are presented to reconcile and explain 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 financial statements.

The City presents all major funds that meet those qualifications.

The City’s Governmental Fund Balances are comprised of the following components:
x Nonspendable fund balance includes amounts that are not in spendable form and typically includes inventories, prepaid items, and other items that by definition cannot be appropriated.
x The restricted fund balance category includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.
x The committed fund balance classification 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 Balance Policy.

Commitments to fund balance are made through adoption of a resolution by City Council.

x Amounts in the assigned fund balance 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 authority to establish, modify, or rescind a fund balance assignment as specified by the City’s Fund Balance Policy.
x Unassigned fund balance is the residual classification for the City’s General Fund and includes all spendable amounts not contained in the other 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.

41 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In the government-wide statements, the City considers restricted funds to be spent first then unrestricted amounts when expenditures are incurred for purposes for which unrestricted fund balance is available. In the governmental fund statements, when expenditures are incurred, the 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 encumbrances to record the amount of purchase orders, contracts, and other obligations, which have not yet been fulfilled, cancelled, or discharged. Encumbrances outstanding at year-end are recorded as part of committed or assigned fund balance.

Encumbrances outstanding as of June 30, 2024, by major fund (in thousands):

Economic Uncertainties Reserve
The City Council established an Economic Uncertainties Reserve in the General Fund through a resolution with a goal to commit the value of two months of the General Fund expenditure adopted budget amount. Appropriations 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. Examples of such emergencies include, but are not limited to:
x An unplanned, major event such as catastrophic disaster requiring expenditures over 5% of the General Fund adopted budget;
x Budgeted revenue in excess of $1 million taken by another government entity; x Drop in projected/actual revenue of more than 5% of the General Fund adopted revenue budget; and,
x Should the Economic Uncertainties Reserve be used, and its level falls below the minimum amount of two months of General Fund expenditures adopted budget, the goal is to replenish the fund within three fiscal years.

General Fund 8,502$
Grants Special Revenue 20,818
LMIHAF Capital Projects 820
Infrastructure 25,363
Other Governmental Funds 26,661
Total Encumbrance All Funds 82,164$
42 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Proprietary Fund Financial Statements
The City’s enterprise and internal service funds are proprietary 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 assets, 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 increases (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 internal services funds are the City’s governmental activities, the assets and liabilities of the internal service funds are consolidated into the governmental activities column of the government-wide Statement 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 effect of these revenues and expenses.

43 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING 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 Funds. These statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. The City's fiduciary funds include Custodial and Trust Funds. Custodial Funds report fiduciary activities that are not held in a trust or equivalent arrangement that meets specific criteria. The Custodial Funds present results of operations and include net position. Trust Funds present results of operations and include net position. The Retirement 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 Retiree 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 Purpose Trust Fund accounts for the Successor Agency for the former Redevelopment Agency pursuant to Assembly Bill X1 26. Fiduciary funds are not presented in the government-wide financial statements 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.

Infrastructure – accounts for expenditures related to certain designate infrastructure.

Proprietary Funds
Water Fund – used to account for water sales to customers. 44 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Sewer Service Fund – accounts for user fees charged to residents and businesses for sewer service.

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 restricted or committed to expenditure for specified 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 capital 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 the 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.

45 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

d. Cash and Investments

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

Cash in excess of daily needs is invested and reported as investments. It is the City’s intent to hold investments until maturity. However, the City may, in response to market conditions, sell investments prior to maturity in order to improve the quality, liquidity, or yield of the portfolio. Interest earnings are apportioned among funds based on month-end cash and investment 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 their 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 recognized as investments income reported for that fiscal year. Investment income includes interest earnings, changes in fair value and any gains or losses realized upon the liquidation or sale of investments.

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.

e. Prepaid Items

Certain payments to vendors and individuals reflect costs applicable to a future accounting period and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items are recorded as expenditures/expenses during the periods benefited.
46 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

f. Capital Assets

Capital assets are tangible and intangible assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements 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 cost (where historical records are available) and at estimated historical cost where no historical records exist. The reported value excludes 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 proprietary funds financial statements, tangible and intangible property, plant, equipment, the right to use leased assets, and infrastructure are depreciated/amortized using the straight-line 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 depreciated. 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

g. 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 statements. The City recognizes lease liabilities with an initial, individual value of $50,000 or more.

47 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 portion 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 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.

x The City uses the interest rate charged by the lessor as the discount rate.

When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
x 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 option price that the City is reasonably certain to exercise.

The City monitors changes in circumstances 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 the lease term.

Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. 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.
48 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

x The City uses its estimated incremental borrowing rate as the discount rate for leases.
x 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 deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

h. Unearned Revenue

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

i. Deferred Outflows/Inflows of Resources

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

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

2. Changes in the net pension liability not included in pension expense.

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

4. Lease related deferrals

49 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

j. Inventories

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

k. Interfund Transactions

As a general rule, interfund transactions 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 would distort the direct costs and program revenues for the various functions. Certain eliminations have been made regarding interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column.

Numerous transactions occur between funds of the City resulting in transfers and amounts due to or from other funds. 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.

l. Long-Term Obligations

In the government-wide and proprietary funds financial statements, long-term obligations are recorded as liabilities in the applicable governmental 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 statements, bond discounts and premiums are recognized as another financing source or use. Issuance costs are recorded as a current year debt service expenditure.

m. 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.

50 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

n. 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 require two-thirds approval by voters 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 collection agent for property tax for all of the local governmental units. Property taxes are normally collected twice per year. The property tax calendar is as follows:

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

51 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

o. Redevelopment Property Tax Trust Funds

Under ABX1 26, revenues that were previously distributed to redevelopment agencies (prior to their dissolution) in the form of property tax 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 RPTTF 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 Obligation Retirement Funds (RORF) established in the treasury of the Successor Agencies, and various allowed administrative fees and allowances. Any remaining balance is then 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:

x Annual ROPS submission due to Department of Finance, February 1 x Distribution of RPTTF to Successor Agencies for the July-December ROPS period, June 1
x Distribution of RPTTF to Successor Agencies for the January-June ROPS period, January 2

p. Cash Flow Statements

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

q. Estimates

The accompanying financial statements require management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates.

52 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

r. Pensions and OPEB

For purposes of measuring the net pension liability, net OPEB liability, related deferred outflows of resources and deferred inflows of resources, pension/OPEB expense, information about the fiduciary net position of the Plan 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 Office and the City’s Defined Benefit Pension Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

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

Supplemental
Employee
Retirement Plan
CalPERS
Pension Plans
Other
Post-Employment
Benefit Plan
Valuation Date (VD) June 30, 2023 June 30, 2022 June 30, 2023 Measurement Date (MD) June 30, 2024 June 30, 2023 June 30, 2023 Measurement Period (MP) July 1, 2023 to
June 30, 2024
July 1, 2022 to
June 30, 2023
July 1, 2022 to
June 30, 2023
53 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

s. Fair Value Measurements

Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 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:
x Quoted prices for similar assets or liabilities in active markets; x Quoted prices for identical or similar assets or liabilities in markets that are inactive;
x Inputs other than quoted prices that are observable for the asset or liability; x Inputs that are derived principally 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. These unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data.

54 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 authorized for the City by the California Government Code (or the City’s investment policy, where 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 provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

INVESTMENTTYPE MAXIMUMMATURITY MAXIMUMSPECIFIED%OFPORTFOLIO/ MAXIMUMPERISSUER
MINIMUMRATING

REQUIREMENTS
Bankers' Acceptances 180days 25%(upto40%withCouncilapproval) / 10% A1/P1,"A"Rating
Negotiable Certificates of Deposit 3years(Upto5years withCouncilapproval) 30%/10% A1/P1, "A"Rating
Commercial Paper 270days 25% /10% A1, "A"Rating
State Obligations-- CA And Others 5years None /10% "A" Rating City/Local Agency of CA Obligations 5years None /10% "A" Rating U.S. Treasury Obligations 5years None None
U.S. Government Agency Obligations 5years None None
Supranationals: IBRD, IFC, IDB 5years 30% "AA" Rating Repurchase Agreements 3Months None None
Reverse Repurchase Agreements 92days 20%ofthebasevalueoftheportfolio.  RequiresCityCouncilApproval None
Medium-Term Corporate Notes 5years 30% /10% "A" Rating Non-negotiable Certificates of Deposit 3years None/10% A1/P1, "A"Rating Money Market Mutual Funds 60days 15% /10% "AAA" Rating Local Agency Investment Fund (LAIF) N/A Upto$75,000,000 None Orange County Investment Pool (OCIP) N/A Upto$75,000,000 None Joint Powers Authority N/A None/$75,000,000 See10.0NofIPS 55 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS (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 insurer 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 InvestmentType Maximum Maturity MaximumPercentage  ofPortfolio
MaximumInvestment
inOneIssuer
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 56 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS (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 InvestmentType Minimum
Allocation
TargetAsset
Allocation
Maximum
Allocation
CashorEquivalents 0% 0% 10%
Money Market 0% 0% 10%
FixedIncome 33% 43% 53%
Intermediate Bond 33% 43% 53%
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%
DomesticEquity 19% 29% 39%
Large Cap Equity (Value, Blend, Growth) 10% 20% 30%
Mid Cap Equity (Value, Blend, Growth) 0% 6% 16%
Small Cap Equity (Value, Blend, Growth) 0% 3% 13%
ForeignEquity 14% 24% 34%
Foreign Large Equity (Value, Blend, Growth) 9% 19% 29%
Foreign Sm / Mid Equity (Value, Growth) 0% 0% 10%
Emerging Markets 0% 5% 15%
RealEstate 0% 2% 12%
Real Estate 0% 2% 12%
Commodities 0% 2% 12%
Natural Resources 0% 2% 12%
57 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS (Continued)

At year-end, the City had the following deposits and investments (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 exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City’s investments, including investments held by bond trustees, to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity (in thousands).

Primary Government:

Cash and Investments 411,374$
Cash and Investments with Fiscal Agent 3,581
Total Primary Government 414,955
Fiduciary Funds:

Cash and Investments 11,135
Cash and Investments with Fiscal Agent 72,255
Total Fiduciary Funds 83,390
Total Deposits and Investments 498,345 $
INVESTMENTS: Fair Value Less than 1 1 to 3 3 to 5 Total US Treasuries 90,539$ 36,803$ 39,094$ 14,642$ 90,539$ US Agency Securities* 159,594 55,523 84,507 19,564 159,594 Mutual Funds 65,477 65,477 - - 65,477 Money Market Funds 14,737 14,737 - - 14,737 Medium Term Notes - IADB 48,681 4,968 14,126 29,587 48,681 Corporate Bonds 50,093 8,749 36,339 5,005 50,093 California Asset Mgmt Program 36,586 36,586 - - 36,586 PARS Pension Rate Stabilization Program 20,212 20,212 - - 20,212 Total Investments 485,919$ 243,055 $ 174,066 $ 68,798 $ 485,919 Total Deposits 12,426
Total Deposits and Investments 498,345$
* Security is callable, but classified above according to original maturity date Investment Maturities (In Years)
58 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS (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 assignment of a rating by a nationally recognized statistical rating organization. Presented below are the minimum ratings required by, where applicable, the California Government Code or the City’s investment policy, or debt agreements, and the actual rating as of the year-end for each investment type (in thousands):

Concentration of Credit Risk

The City’s investment policy limits investments in any one issuer, except for U.S.

Treasury Securities, U.S. Government Agencies and the Local Agency Investment Fund, to no more than 10% of the portfolio. In addition, no more 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 issuer (other than U.S. Treasury Securities, 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 Not Rated
US Treasuries N/A 90,539$ 90,539$ -$ -$ -$ US Agency Securities* N/A 159,594 159,594 - - - Mutual Funds N/A 65,477 - - - 65,477 Money Market Funds AAA 14,737 14,737 - - - Medium Term Notes - IADB AA 48,681 48,681 - - - Corporate Bonds A 50,093 - 13,743 36,350 - California Asset Mgmt Program N/A 36,586 36,586 - - - PARS Pension Rate Stabilization Program N/A 20,212 - - - 20,212 Total Investments 485,919 $ 350,137 $ 13,743 $ 36,350 $ 85,689 $ 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. Government Sponsored Enterprise Securities 119,259$ Int'l Bank for Recon & Development Supernational 33,753 $ U.S. Treasury Notes Obligations of the United States Treasury 78,540 $ 59 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provisions for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The 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, 2024, the City’s deposits with financial institutions were covered by FDIC up to $250,000, and the remaining amounts were collateralized as described above.

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

Investment in California Asset Management Program Pool

The City is a voluntary participant in the California Asset Management Program (CAMP). CAMP is an investment pool offered by the California Asset 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 the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the purpose of exercising the common power of its Participants 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 California public agencies which are participants in the Trust. The City reports investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share.

The Pool is managed to maintain a dollar-weighted average portfolio 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).
60 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

2. CASH AND INVESTMENTS (Continued)

Investment in Public Agency Retirement Services Pension Rate Stabilization Program

The City established a Section 115 pension trust account within the Public Agency 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 specific cash and investments are managed by a third- party portfolio manager under guidelines approved by the City.

Fair Value Measurement

The City categorizes its fair value investments within the fair value hierarchy established by generally accepted accounting principles. The City has the following recurring fair value measurements as of June 30, 2024 (in thousands):

3. OTHER RECEIVABLES

A summary of Other Receivables as of June 30, 2024 is as follows (in thousands):

INVESTMENTS: Level 1 Level 2 Level 3 Total
U.S. Treasuries -$ 90,539$ - $ $ 90,539 U.S. Agency Securities - 159,594 - 159,594 Mutual Funds 65,477 - - 65,477 Medium Term Notes - IADB - 48,681 - 48,681 Corporate Bonds - 50,093 - 50,093 Total Investments 65,477$ 348,907 $ - $ 414,384$ Fair Value Hierarchy
FY2023-24
Description Amount
Developer Loans Receivable 40,762 $
Emerald Cove Loan Receivable 6,376
Housing Rehabilitation Loans Receivable 1,894
First Time Homebuyers Receivable 1,630
Emergency Medical Fee Receivable 2,509
CDBG Program Receivable 663
Waterfront Receivable 6,227
Other Grants Receivable 7,360
Other Receivable 8,854
Total Other Receivables 76,275
Allowance for Uncollectible Developer Loans (40,762)
Net Other Receivables on Governmental Fund Financial Statements 35,513$ Other Receivables Reconciliation
Net Receivable on Government-wide Financial Statements 52,886$ Taxes Receivable on Governmental Fund Financial Statements (15,981) Other Receivables on Internal Service Fund (1,392)
Net Other Receivables on Governmental Fund Financial Statements 35,513$ 61 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

3. OTHER RECEIVABLES (Continued)

a. Developer Loans

Loans made to developers to construct or rehabilitate certain facilities under deferred loan agreements total $40,762,000 at year-end. These loans are allowed until a future event occurs. Loans to the Low and Moderate Income Housing Asset Fund total $20,670,000, loans made under the Home Program total $17,768,000 and loans made under the Affordable Housing In-Lieu Program total $2,324,000.

Interest rates on these loans range from 0% to 10%. The allowance for uncollectible developer loans is $40,762,000 due to the terms of the agreement 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 Emerald 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 residual 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, 2024 is $6,376,000.

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 rental housing under deferred loan agreements total $1,894,000 at year-end. These loans 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 loans are deferred until a future event occurs.

62 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

4. UNEARNED REVENUE

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

5. UNAVAILABLE REVENUE

Certain revenues in governmental funds are considered unavailable revenue until received. All revenues including property and sales tax are recognized in the year earned or levied in the government-wide financial statements but 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
Total
Unearned
Revenue
Community Services Unearned Revenue (Classes) 1,228$ -$ 1,228$ Public Works - Unearned Revenue 44 - 44 Grants - 2,502 2,502 Total $ 1,272 $ 2,502 $ 3,774 General Fund
Grants Special
Revenue LMIHAF
Other
Governmental
Funds
Total
Unavailable
Revenue
Grants - $ 7,206$ - $ - $ 7,206$ Deferred Loans:

Emerald Cove - - 6,376 - 6,376 Housing Rehabilitation - 1,849 - - 1,849 First Time Homebuyers - - 1,630 - 1,630 Waterfront 24,909 - 6,227 - 31,136 Other Unavailable Revenue 721 - - 82 803 Total 25,630 $ 9,055$ 14,233$ 82$ 49,000$ 63 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL

a. Summary

Net Pension Liability/(Asset)

Net Pension Liability/(Asset) is reported in the accompanying statement 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 72,908$
CalPERS Safety Plan 116,324
Supplemental Plan (Note 7) 4,219
Total 193,451$
Change to Net Deferred employer
Difference Between Differences between pension contributions Projected and Actual Changes Expected and made after
Investment Earnings in assumptions Actual Experience measurement date Total CalPERS Miscellaneous Plan 33,665$ 3,304$ 3,231$ 5,808$ 46,008$ CalPERS Safety Plan 47,079 14,743 10,074 11,484 83,380 Total 80,744$ 18,047 $ 13,305 $ 17,292 $ 129,388 $ Change to Net
Difference Between Differences between
Projected and Actual Expected and
Investment Earnings Actual Experience Total
CalPERS Safety Plan - $ 896$ 896$ Supplemental Plan (Note 7) 85 - 85 Total 85$ 896 $ 981 $ 64 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL (Continued)

Pension expenses for the measurement period ending June 30, 2023 (the measurement date), are included in the accompanying financial statements 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 Miscellaneous Plan Agent multiple-employer defined benefit plans administered by California Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit Provisions under the Plans are established by State statutes within the Public Employee’s Retirement Law. Following the passage of AB340, Public Employees’ Pension Reform Act (PEPRA) by the California 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 employees that do not meet the PEPRA qualifications previously described. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. 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 29,232$
CalPERS Safety Plan 38,403
Supplemental Plan (Note 7) 206
Total 67,841 $
65 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL (Continued)

Benefits Provided

CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment.

Benefit provisions and all other requirements 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 age requirement. The standard non-industrial disability retirement benefit is a monthly allowance equal to

1.8 percent of final compensation, multiplied by service.

Industrial disability benefits are not offered to miscellaneous employees. The City provides industrial disability retirement benefit to safety employees. The industrial disability retirement benefit is a monthly allowance equal to 50 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 benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where interest is currently credited at 7.5 percent per year, plus a lump sum in the amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the 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 survivor allowances will be annually adjusted on a compound basis by 2 percent.

66 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL (Continued)

The Plans’ provisions and benefits in effect at June 30, 2024 are 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, 2023 - June 30, 2024 11.220% 11.220%
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, 2023 - June 30, 2024 22.330% 22.330%
Miscellaneous Agent Plans
Safety Agent Plans
67 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL (Continued)

c. Contributions

Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through 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, 2023, miscellaneous participants under the Classic and PEPRA plans are required to contribute 8% and 6.25% of their annual covered salary, respectively. Safety participants under the Classic and PEPRA plans are required to contribute 9% and 11.75% of their annual covered salary, respectively.

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

11.220% and 22.330% for the miscellaneous and safety plans, respectively, for the period July 1, 2023 through June 30, 2024.

At June 30, 2023, the valuation date, the following employees were covered by the benefit terms for each Plan:

Miscellaneous Safety
Active members 618 370
Transferred members 506 78
Terminated members 397 90
Retired members and beneficiaries 1110 677
68 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL (Continued)

d. Net Pension Liability

The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is illustrated below:

Actuarial Assumptions – The total pension liability in the June 30, 2023 actuarial valuation, rolled forward to June 30, 2024 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 Actuarial Cost Method
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 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.

6.90% Net of Pension Plan Investment and Administrative Expenses; includes Inflation
Derived using CalPERS’ membership data for all funds
The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter

6.90%

2.30%
Varies by entry age and service
69 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical 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+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set 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:

Assumed asset
Asset Class1 Allocation Real Return1,2
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage (5.00)% (0.59)%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study. 70 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL (Continued)

Discount Rate – The discount rate used to measure the total pension liability was

6.90%. 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 employers will be made at statutorily required rates, actuarially determined. Based 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 – There were no subsequent events that would materially affect the results presented in this disclosure.

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, 2022 (Valuation Date) 656,726$ 596,848$ 59,878$ Changes in the year:

Service cost 9,167 - 9,167 Interest on the total pension liabilities 44,775 - 44,775 Changes of Benefit Terms 658 - 658 Differences between expected and actual experience 5,260 - 5,260 Benefit payments, including refunds of members contributions (36,634) (36,634) - Plan to Plan Resource Movement - 1 (1) Contributions - employer - 7,450 (7,450) Contributions - employee - 3,741 (3,741) Net investment income - 36,077 (36,077) Administrative expenses - (439) 439 Net changes 23,226 10,196 13,030 Balance at June 30, 2023 (Measurement Date) 679,952 $ 607,044 $ 72,908 $ Total Pension
Liability
Plan Fiduciary Net
Position
Net Pension
Liability (Asset)
Balance at June 30, 2022 (Valuation Date) 881,003$ 788,911$ 92,092$ Changes in the year:

Service cost 15,176 - 15,176 Interest on the total pension liabilities 60,569 - 60,569 Changes of Benefit Terms 374 - 374 Differences between expected and actual experience 13,601 - 13,601 Plan to Plan Resource Movement - (1) 1 Benefit payments, including refunds of members contributions (49,495) (49,495) - Contributions - employer - 13,219 (13,219) Contributions - employee - 4,949 (4,949) Net investment income - 47,901 (47,901) Administrative expenses - (580) 580 Net changes 40,225 15,993 24,232 Balance at June 30, 2023 (Measurement Date) 921,228 $ 804,904 $ 116,324 $ Miscellaneous Plan
Safety Plan
71 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL (Continued)

Sensitivity of the Net Pension Liability/(Asset) 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:

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, 2022), the net pension liability was $59,878,000 for the Miscellaneous Plan and $92,092,000 for the Safety Plan.

For the measurement period ending June 30, 2023 (the measurement date), the City incurred a pension expense of $29,232,000 and $38,403,000 for the 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 amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the beginning of the measurement period.

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
Miscellaneous Plan 161,070$ 72,908 $ 468 $ Safety Plan 239,094 116,324 15,885 Aggregate Total 400,164$ 189,232 $ 16,353 $ Plan's Aggregate Net Pension Liability/(Asset)
72 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL (Continued)

The Expected Average Remaining Service Lifetime (“EARSL”) is calculated by dividing the total future service years of active employees by the total number of plan participants (active, inactive, and retired) in the risk pool. For the 2022-23 measurement period, the EARSL for each plan is as follows:

At June 30, 2024 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Safety
Expected Average Remaining Service Lifetime 2.5 3.8 Deferred outflows Deferred inflows
of Resources of Resources
Difference between projected and actual earning on
pension plan investments 33,665 $ - $ Changes in assumptions 3,304 - Difference between expected and actual experience 3,231 - Contributions made subsequent to the
measurement date 5,808 - Total 46,008$ - $
Deferred outflows Deferred inflows
of Resources of Resources
Difference between projected and actual earning on
pension plan investments 47,079 $ - $ Changes in assumptions 14,743 - Difference between expected and actual experience 10,074 (896) Contributions made subsequent to the
measurement date 11,484 - Total 83,380$ (896) $
Miscellaneous Plan
Safety Plan
73 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

6. RETIREMENT PLAN – NORMAL (Continued)

For the Miscellaneous Plan and Safety Plan, $5,808,000 and $11,484,000, respectively, was reported as deferred outflows of resources related to pensions resulting from City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. 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 benefit retirement plan (Supplemental Plan) for all 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 consisting 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 administration of the Plan. Benefit provisions 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 Year 2008/09, the City established the Supplemental Employee Retirement Plan and Trust, and transferred $24,918,000 to an irrevocable trust from the prefunded 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
2024 12,857 $ 20,685 $
2025 6,632 19,409
2026 19,881 29,823
2027 830 1,083
40,200$ 71,000 $
Deferred Outflows / (Inflows) of Resources
74 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 duration of the life of the member, and shall cease upon the employee’s death. As of June 30, 2023, the date of the Plan’s most recent actuarial valuation, the average monthly benefit received by inactive plan members and beneficiaries receiving benefits is $655. 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, 2024, the measurement date, the following employees were covered by the benefit terms for the Plan:

b. Employer Contributions

The City’s policy is to make required contributions as determined by the Supplemental Plan’s actuary. The required contributions were determined as part of the June 30, 2023 actuarial valuation. The City is required to contribute the actuarially determined rate of 3.6% of total payroll for all permanent employees for the year ended June 30, 2023. There are no employee contributions required for the plan. Survivor and termination benefits are not included in the plan.

Administrative costs of this plan are financed through investment earnings.

For the year ended June 30, 2024, the contributions were (in thousands):

Contributions - employer 1,422$
Inactive employees receiving benefits 728
Active employees 44
Total 772
75 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 description of the Supplemental Plan’s Investment Policy. The major asset class allocation for the Supplemental Plan as of June 30, 2024 is listed below:

Quoted market prices have been used to value investments as of June 30, 2024.

These investments are held by the Trust or by an agent in the Trust’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 investments held in any one organization that represents five percent or more of the Plan’s investment portfolio at June 30, 2024:

Asset Class Strategic Allocation
Allocation as of
June 30,2024
Long-Term
Expected Rate of
Return
Fixed Income 43.00% 41.31% 3.95%
Equities 53.00% 57.70% 8.78%
Real Estate 2.00% 0.00% 9.36%
Commodities 2.00% 0.00% 5.31%
Cash and Equivalents 0.00% 0.99% 2.90%
Total 100.00% 100.00%
Fidelity 500 Index Fund 19.73%
Fidelity Emerging Markets Index Fund 5.04%
Vanguard FTSE 19.18%
Baird Aggregate Bond Fd Instl 9.56%
Dodge Cox Income 5.74%
Fidelity US Bond Index 22.96%
Concentration of Investments Equaling or Exceeding 5%
76 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

All Supplemental Plan investments are reflected in the schedule included in Section c of the Note, with the exception 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 held in the City’s investment pool account and are used to pay recurring expenditures. Refer to Note 2 for a description of the City’s investments.

For the Fiscal Year ended June 30, 2024, the annual money-weighted rate of return on the Plan’s investments, net of pension plan investment expenses, was 11.10%.

The money-weighted rate of return expresses investment performance, 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 pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2024, using an annual actuarial valuation as of June 30, 2022 rolled forward to June 30, 2024 using standard update procedures. 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, 2024

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

Actuarial Assumptions – The total pension liabilities in the June 30, 2023 actuarial valuations for the June 30, 2024 measurement date were determined using the following actuarial assumptions:

The changes in actuarial assumptions include the following:

All other actuarial assumptions used in the June 30, 2023 valuation were based on the results of an actuarial experience study for the period from 2000 to 2019, including updates to salary increase, 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 Pension Liability. This rate considers the ability of the fund to meet benefit obligations 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 valuation, the discount rate is 5.75%, based on the inflation assumption of 2.50% and a long-term asset allocation of 70% equities and 30% fixed income.

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

Discount Rate 5.75%
Inflation 2.50%
Salary Increases CalPERS 2000-2019 Experience Study plus 2.75% aggregate increase Investment Rate of Return 5.75% Net of Investment Expenses Mortality Rate Table
Retirement, Disability, Withdrawal CalPERS 2000-2019 Experience Study plus 23% load on future service retirement liability added to reflect recent benefits experience.

CalPERS 2000-2019 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, 2024

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 excluding 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 investment 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 expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.

79 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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, 2023 72,610 $ 63,822$ 8,788$ Changes in the year:

Service cost 203 - 203
Interest on the total pension liabilities 3,848 - 3,848 Differences between expected and actual experience 781 - 781 Changes of Assumptions (1,375) - (1,375) Benefit payments, including refunds of members contributions (5,711) (5,711) - Contributions - employer - 1,422 (1,422) Net investment income - 6,954 (6,954) Administrative expenses - (350) 350 Net changes (2,254) 2,315 (4,569)
Balance at June 30, 2024 70,356$ 66,137$ 4,219$ Supplemental Plan
Discount Rate -
1% (4.75%)
Current
Discount Rate
(5.75%)
Discount Rate +
1% (6.75%)
10,781$ 4,219 $ (1,412) $ Plan's Aggregate Net Pension Liability/(Asset)
(in thousands)
80 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

7. RETIREMENT PLAN – SUPPLEMENTAL (Continued)

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

For the year ended June 30, 2024, the City recognized pension expense in the amount of $206,000 for the Supplemental Plan.

At June 30, 2024, the City reported deferred inflows of resources related to the supplemental pension plan from the following source (in thousands):

For the Supplemental Plan, $85,000 was reported as deferred inflows of resources related to pensions which will be recognized in pension expense as follows (in thousands):

Deferred Inflows
of Resources
Difference between projected and actual earnings on
pension plan investments 85 $
Deferred Outflows/
(Inflows) of
Year Ended June 30, of Resources
2025 (401) $
2026 2,007
2027 (1,003)
2028 (688)
(85)$
81 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 to provide postemployment medical insurance to retirees. These Other Postemployment Benefits (OPEB) are based on years of service and are available to all retirees who meet all three of the following criteria:

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

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

x During any period the retiree is eligible to receive health insurance at the expense of another employer; and/or
x 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 month after 25 years of service. 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 multiple-employer defined benefit healthcare plan to retirees through CalPERS under the California Public Employees Medical and Hospital Care Act (PEMHCA), commonly referred to as PERS Health. PEMHCA provides health insurance through a variety of Health Maintenance 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 Huntington Beach Firefighters’ Association (HBFA) joined PEMHCA in 2011. All other safety groups - Fire Management Association (FMA), Marine Safety Management Association (MSOA), Police Management Association (PMA), and Police Officers’ Association (POA) - joined in 2004.

82 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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, 2023 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 insurance benefit.

Benefits paid from the CERBT were $865,000 for year ended June 30, 2024. The assets of the CERBT are excluded from the accompanying financial statements since they are in an irrevocable trust administered by CalPERS. Copies of CalPERS’ annual financial report may be obtained from their executive office: 400 P Street, Sacramento, CA, 95814 or on their website: www.calpers.ca.gov. The City’s policy is to make 100% of each year’s ARC, with an additional amount to prefund benefits as determined annually by City Council in order to improve the funded status of the plan.

For PEMHCA, the City selected the “unequal” method for the contribution. Under this method, the City offered a lesser contribution for retirees than for active employees. The City paid the PEMHCA minimum for actives ($143 in 2021, $149 in 2022, $151 in 2023 and $157 in 2024). Beginning in 2008, Assembly Bill 2544 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 $102.05 per employee for the Huntington Beach Firefighter’s Association (HBFA) and $157.00 for all other Safety groups in 2024. The annual increase in minimum PEMHCA contribution to CalPERS will continue until the time that the City contribution for retirees equals the City contribution paid for active employees.

Postemployment
Medical Insurance PEMHCA
Retirees and beneficiaries receiving benefits 284 214 Inactive employees not yet receiving benefits 332 - Active Plan Members 861 374
Total Plan Participants 1,477 588
83 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

8. OTHER POST EMPLOYMENT BENEFITS (Continued)

The City’s net OPEB liability was measured as of June 30, 2023 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2023, based on the following actuarial methods and assumptions:

x Actuarial Cost Method – Entry Age Normal
x Discount rate – 5.75%
x Projected salary increases for covered employees due to inflation – aggregate increases of 2.75% per annum
x Investment Rate of Return – 5.75%, assuming actuarially determined contributions funded into CERBT Investment Strategy 2
x Mortality Rate
1 – Derived using CalPERS’ membership data for all funds x Pre-Retirement Turnover 2 – Derived using CalPERS’ membership data for all funds
x PEMHCA minimum increases for actives - $157 in 2024, with 3.50% annual increases thereafter
x Healthcare Trend Rate – The medical trend rate represents the long-term expected growth of medical benefits paid by the plan, due to non-age-related factors such as general medical inflation, utilization, new technology, and the like. The following table sets forth the inflation trend assumption used for the valuation:

1 Mortality information was derived from data collected during 2000 to 2019 CalPERS Experience Study released in 2021, 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 2000 to 2019 Experience Study Report. The Experience 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
Kaiser
Medicare
Other
Year Non-Medicare Medicare
Kaiser
Medicare
Other
2024 Actual Premiums 2030 5.60% 4.85% 5.25%
2025 8.50% 6.25% 7.50% 2031 5.05% 4.65% 4.85%
2026 7.90% 5.65% 6.90% 2032-38 4.45% 4.45% 4.45%
2027 7.35% 5.45% 6.50% 2039-40 4.35% 4.35% 4.35%
2028 6.75% 5.25% 6.10% 2041-75 4.30% 4.30% 4.30%
2029 6.20% 5.05% 5.70% 2076+ 3.45% 3.45% 3.45%
84 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 allocation percentage and by adding expected inflation.

The target allocation and best estimates of arithmetic real rates 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 5.75 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term 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 34% 4.56%
Fixed Income 41% 1.56%
Treasury Inflation-Protected Securities ("TIPS") 5% -0.08% Commodities 3% 1.22%
Real Estate Investment Trusts ("REITS") 17% 4.06%
Total 100%
* Long-term expected rate of return is 5.75%
CERBT Strategy 2
85 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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, 2023 (in thousands):

Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB Liability
/ (Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2023 29,692$ 31,716 $ (2,024) $ (Measurement Date June 30, 2022)
Changes recognized for the measurement period:

Service Cost 968 - 968 Interest 1,709 - 1,709 Actual vs. Expected Experience (3,372) - (3,372) Assumption Changes 503 - 503 Contributions - Employer - 1,997 (1,997) Net Investment Income - 1,130 (1,130) Benefit Payments (1,870) (1,870) - Administrative Expenses - (136) 136 Net Changes (2,062) 1,121 (3,183) Balance at June 30, 2024 27,630$ 32,837 $ (5,207) $ (Measurement Date June 30, 2023)
Increase / (Decrease)
1% Decrease Current Discount Rate 1% Increase
(4.75%) (5.75%) (6.75%)
Net OPEB Liability (2,072)$ (5,207) $ (7,843) $ 86 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2023 (in thousands):

OPEB Plan Fiduciary Net Position

The CERBT issues a publicly available financial report that includes 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 deferred 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:

5 Years
Net difference between projected and actual
earnings on OPEB plan investments
1% Decrease Current Trend 1% Increase

7.50% Non-Medicare /

6.50% Medicare (Non-
Kaiser) / 5.25%
Medicare (Kaiser),
decreasing to 2.45%
Non-Medicare /

2.45% Medicare (Non-
Kaiser), 2.45%
Medicare (Kaiser)

8.50% Non-Medicare /

7.50% Medicare (Non-
Kaiser) / 6.25%
Medicare (Kaiser),
decreasing to 3.45%
Non-Medicare /

3.45% Medicare (Non-
Kaiser), 3.45%
Medicare (Kaiser)

9.50% Non-Medicare /

8.50% Medicare (Non-
Kaiser) / 7.25%
Medicare (Kaiser),
decreasing to 4.45%
Non-Medicare /

4.45% Medicare (Non-
Kaiser), 4.45%
Medicare (Kaiser)
Net OPEB Liability (7,931)$ (5,207)$ (1,808)$ 87 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

8. OTHER POST EMPLOYMENT BENEFITS (Continued)

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

As of June 30, 2024, the City incurred OPEB expense of $206,000. As of June 30, 2024, the City reported deferred outflows and deferred inflows of resources related to OPEB from the following sources:

The $935,000 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2023 measurement date will be recognized as a reduction of the net OPEB liability during the Fiscal Year ending June 30, 2025. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows (in thousands):

Deferred Outflows Deferred Inflows
of Resources of Resources
OPEB Contributions subsequent to the measurement date 935$ - $ Difference between expected and actual experience 446 6,831 Changes in Assumptions 1,426 1,865 Net difference between projected and actual earnings on OPEB Plan Investments 2,895 -
5,702$ 8,696 $
Measurement Periods
Ended June 30,
2025 (697)$
2026 (746)
2027 267
2028 (955)
2029 (953)
Thereafter (845)
(3,929)$
Deferred
Outflows/ (Inflows)
of Resources
88 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

9. RISK MANAGEMENT

The City is exposed to various risks of losses related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City records the liability claims as expenditures 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 joint powers agreement between the 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 disposing of all claims, the distribution of assets, and any other functions necessary to 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 provides 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 City’s Self-Insurance General Liability Internal Service Fund.

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

Liability Claims
Claims up to $1,000,000 are paid from the City’s Self Insurance General Liability Internal Service Fund. Payments for claims from $1,000,000 to the maximum limit discussed above are covered by the excess liability coverage purchased 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 and 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, 2024

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’ compensation coverage is purchased through the CSAC/Prism-Excess Insurance Authority.

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 $36.7 million deficit at year-end at the 55 percent confidence level. The City has established plans to help reduce the deficit in this fund. This will be accomplished by additional transfers from the General Fund, Proprietary funds, and other governmental funds 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, 2022 42,763 $ 13,668 $ 56,431 $ Additions 12,154 15,848 28,002 Reductions (10,830) (6,982) (17,812) Net Increase (Decrease) 1,324 8,866 10,190 Balance June 30, 2023 44,087 22,534 66,621 Additions 14,488 7,085 21,573 Reductions (7,244) (19,855) (27,099) Net Increase (Decrease) 7,244 (12,770) (5,526) Balance June 30, 2024 51,331$ 9,764 $ 61,095 $ 90 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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, 2024 for Main Pier property acquisitions prior to the dissolution of the Redevelopment Agency on February 1, 2012. No set interest rates or fixed repayment terms 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, 2024

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:

x $5,137,000 was transferred from General Fund to Other Governmental funds of which, $2,968,000 was transferred for debt service payments, $1,000,000 was transferred for technology upgrades within the Police Department, and $1,169,000 was transferred to reimburse Surf City “3” Fund expenses. x $4,900,000 was transferred to Grant Special Revenue Fund to be used for various Capital Improvement Projects as outlined in the Memorandum of Understanding between the City and AES Southland Development LLC. x $68,000 was transferred from General Fund to Refuse Enterprise Fund to fund senior citizen rate reduction on refuse charges.
x $1,500,000 was transferred from General Fund to Pension Liability Fund to cover debt service payments related to Pension Obligation Bond. x $13,000 was transferred from Hazmat Service Enterprise Fund to General Fund to cover administrative and overhead expenditures.
x $16,137,000 was transferred from General Fund to Infrastructure Fund for infrastructure-related projects such as road repairs and enhancement and other capital improvement projects.
x $612,000 was transferred from Other Government Funds to Infrastructure Fund to reimburse funds for various infrastructure projects. x $465,000 was transferred from Other Government Funds to General Fund to cover administrative cost related to 5th and PCH parking structure.

Transfers In
General
Fund
Other
Governmental
Funds
Total
Governmental
Funds
Hazmat
Service
Fund
Total
Transfers In
General Fund -$ 465$ 465 $ 13 $ 478 $ Pension Liability 1,500 - 1,500 - 1,500 Infrastructure 16,137 612 16,749 - 16,749 Grant Special Revenue 4,900 - 4,900 - 4,900 Other Governmental Funds 5,137 - 5,137 - 5,137 Total Governmental Funds 27,674 1,077 28,751 13 28,764 Refuse Fund 68 - 68 - 68 Total Enterprise Funds 68 - 68 - 68 Total Transfers Out 27,742$ 1,077 $ 28,819 $ 13 $ 28,832$ Transfers Out
92 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

11. LONG-TERM OBLIGATIONS

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

Governmental Activities:

June 30,
2023 Additions Retirements
June 30,
2024
Accrued
Interest
Due Within
One Year
Public Financing Authority:
2014(a) Lease Revenue Bonds 10,530$ - $ (720)$ 9,810 $ 111 $ 750 $ 2020(a) Lease Revenue Bonds 4,835 - - 4,835 36 - 2020(b) Lease Revenue Bonds 9,795 - (1,530) 8,265 19 1,545 Total Public Financing Authority 25,160 - (2,250) 22,910 166 2,295 Other Long-Term Obligations:

Compensated Absences 14,818 5,241 (4,526) 15,533 - 2,045 Claims Payable 66,621 21,573 (27,099) 61,095 - 14,363 Pollution Remediation 2,000 - - 2,000 - - LED Lighting Phase I 191 - (126) 65 1 65 I-Bank CLEEN Loan 1,283 - (310) 973 9 317 CEC Loan 1,797 - (269) 1,528 - 272 Pension Obligation Bonds 318,005 - (12,683) 305,322 344 12,768 Finance Purchase Agreement 17,388 - (3,098) 14,290 46 2,473 Leases Payable 456 - (216) 240 - 155 Subscriptions Payable 2,600 2,666 (1,466) 3,800 48 1,478 Total Other Long-Term Obligations 425,159 29,480 (49,793) 404,846 448 33,936 Total Long-Term Obligations -
Governmental Activities 450,319 $ 29,480 $ (52,043) $ 427,756 $ 614 $ 36,231$ 93 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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
2025 750 $ 319 $ 1,069$
2026 785 289 1,074 2027 810 265 1,075 2028 835 240 1,075 2029 860 215 1,075 2030-2034 4,725 636 5,361 2035 1,045 21 1,066 Total 9,810 $ 1,985 $ 11,795 $ 94 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 Ma y 1st, November 1st
Principal Payment Dates Ma y 1st
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
2025 -$ 224 $ 224$
2026 - 224 224
2027 - 224 224
2028 - 224 224
2029 - 224 224
2030-2032 4,835 455 5,290 Total 4,835$ 1,575$ 6,410$
95 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 Ma y 1st, November 1st
Principal Payment Dates Ma y 1st
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
2025 1,545$ 117$ 1,662$
2026 1,560 103 1,663
2027 1,575 83 1,658
2028 1,600 61 1,661
2029 1,625 35 1,660
2030 360 7 367
Total 8,265$ 406$ 8,671$
96 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 $15,533,000 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 governmental activities of $61,095,000 described in Note 9. The City pays the claims upon final settlement. The General Fund typically liquidates the claims payable liability.

(3) Pollution Remediation

The City plans to remediate hazardous materials contamination of land located within Huntington Central Park used as a gun range facility 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 remediation is estimated to be $2,000,000 and is reported as a long-term liability in the government-wide financial statements. The liability was measured by estimating a reasonable range of potential outlays and multiplying 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, 2024

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
2025 317$ 19$ 336$
2026 324 11 335
2027 332 4 336
Total 973$ 34$ 1,007$
Year Ending
June 30 Principal Interest Total
2025 65$ 1$ 66$
Total 65$ 1$ 66$
98 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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
2025 272$ 15$ 287$
2026 274 12 286
2027 277 9 286
2028 280 6 286
2029 283 4 287
2030 142 1 143
Total 1,528$ 47$ 1,575$
99 City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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
2025 12,768$ 8,385$ 21,153$
2026 12,898 8,248 21,146
2027 13,076 8,074 21,150
2028 13,291 7,855 21,146
2029 13,548 7,601 21,149
2030-2034 72,690 33,048 105,738 2035-2039 83,510 22,227 105,737 2040-2044 83,541 7,922 91,463 Total 305,322$ 103,360$ 408,682$
100
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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

The City of Huntington Beach has entered into three leases as a lessee for the use of land and equipment and is required to make monthly fixed payments ranging from $4,982 to $7,195 over the lease terms. As of June 30, 2024, the value of the lease liability was $240,030. The future principal and interest lease payments as of June 30, 2024, were as follows:

Year Ending
June 30, Principal Interest Total
2025 155$ 4$ 159$ 2026 85 1 86 Total 240$ 5$ 245$ Year Ending
June 30 Principal Interest Total
2025 2,473$ 361$ 2,834$
2026 2,266 302 2,568
2027 2,324 245 2,569
2028 2,038 186 2,224
2029 2,093 131 2,224
2030-2031 3,096 92 3,188 Total 14,290$ 1,317$ 15,607$
101
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

11. LONG-TERM OBLIGATIONS (Continued)

(10) Subscription Payable

For the year ended June 30, 2023, the financial statements include the adoption of GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The primary objective of this statement is to enhance the relevance and consistency of information about governments' subscription activities. This statement establishes a single model for subscription accounting based on the principle that subscriptions are financings of the right to use an underlying asset. Under this Statement, an organization is required to recognize a subscription liability and an intangible right-to-use subscription asset.

The City of Huntington Beach has entered into seven subscription agreements for the use of various IT software and is required to make annual fixed payments ranging from $15,018 to $590,553 over the subscription terms. As of June 30, 2024, the value of the subscription liability was $3,800,000. The future principal and interest subscription payment as of June 30, 2024, were as follows:

Year Ending
June 30 Principal Interest Total
2025 1,478 $ 80 $ 1,558$ 2026 981 47 1,028 2027 655 28 683 2028 686 14 700 Total 3,800 $ 169 $ 3,969$ 102
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

11. LONG-TERM OBLIGATIONS (Continued)

c. Long-Term Obligations – Business-Type Activities

Below is a schedule of the long-term obligations of business-type activities (in thousands):

(1) Compensated Absences

There is no repayment schedule for the compensated absences amount of $1,758,000 relating to business-type activities. The balance for the outstanding business-type compensated absences is predominately related to the Water and Sewer funds.

(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):

June 30,
2023 Additions Retirements
June 30,
2024
Accrued
Interest
Due Within
One Year
CompensatedAbsences 1,826$ 416 $ (484) $ 1,758 $ - $ 479$ PensionObligationBonds 20,480 - (891) 19,589 22 898 Total Long-Term Obligations -
Business-Type Activities 22,306 $ 416 $ (1,375)$ 21,347 $ 22 $ 1,377$ Long-Term Obligations - Business-Type
Activities:

Year Ending
June 30 Principal Interest Total
2025 898$ 526$ 1,424$
2026 907 517 1,424
2027 919 504 1,423
2028 934 489 1,423
2029 952 471 1,423
2030-2034 5,111 2,007 7,118 2035-2039 5,870 1,246 7,116 2040-2042 3,998 272 4,270 Total 19,589$ 6,032$ 25,621$
103
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

11. LONG-TERM OBLIGATIONS (Continued)

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):

12. CAPITAL ASSETS

a. Changes in Capital Assets

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

June 30,
2023 Additions Retirements
June 30,
2024
Community Facilities District No. 2000-1
2013 Special Tax Refunding Bonds 7,730$ - $ (705)$ 7,025 $ Community Facilities District No. 2002-1
Special Assessment Tax Bonds 3,405 - (220) 3,185 Community Facilities District No. 2003-1
2013 Special Tax Refunding Bonds 13,745 - (965) 12,780 Total Community Facilities Districts 24,880 - (1,890) 22,990 Total Obligations Not Recorded in
Financial Statements 24,880$ - $ (1,890)$ 22,990 $ Community Facilities Districts:

June 30, June 30,
2023 Additions Dispositions 2024
Governmental Activities
Capital Assets, Not Depreciated:

Land 369,538$ -$ -$ 369,538$ Construction in Progress 11,249 10,363 (6,471) 15,141 Total Capital Assets - Not Depreciated 380,787 10,363 (6,471) 384,679 Capital Assets Being Depreciated
Buildings 227,075 3,415 - 230,490 Machinery and Equipment 89,572 12,325 (132) 101,765 Infrastructure 479,499 18,916 (1,437) 496,978 Right to Use Leased Land 274 - - 274 Right to Use Leased Machinery and Equipment 398 - - 398 Right to Use SBITA 3,651 2,666 - 6,317 Total Capital Assets Being Depreciated 800,469 37,322 (1,569) 836,222 Less Accumulated Depreciation:

Buildings (99,255) (5,357) - (104,612) Machinery and Equipment (57,171) (6,177) 126 (63,222) Infrastructure (251,858) (8,589) 1,437 (259,010) Right to Use Leased Land (168) (84) - (252) Right to Use Leased Machinery and Equipment (42) (135) - (177) Right to Use SBITA (724)
(1,393) - (2,117)
Total Accumulated Depreciation (409,218) (21,735) 1,563 (429,390) Total Depreciated - Net 391,251 15,587 (6) 406,832 Total Capital Assets 1,181,256 47,685 (8,040) 1,220,901 Total Accumulated Depreciation (409,218) (21,735) 1,563 (429,390) Capital Assets of Governmental Activities - Net 772,038$ 25,950 $ (6,477) $ 791,511 $ 104
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

12. CAPITAL ASSETS (Continued)
b. Depreciation Expense

Depreciation in governmental activities was charged to the following functions/programs in the Statement of Activities (in thousands):

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

Department:

City Council 5$
City Manager 97
City Treasurer 22
City Attorney 44
City Clerk 18
Finance 400
Human Resources 29
Community Development 300
Fire 1,028
Information Services 795
Police 1,830
Community Services 2,677
Library Services 367
Public Works 12,104
Internal Service Fund depreciation charged to functions 2,019 Total 21,735$
Fund:

Water 3,937 $
Sewer Service 2,411
Refuse 21
Total 6,369$
Business-Type Activities:

June 30,
2023 Additions Dispositions
June 30,
2024
Capital Assets, Not Depreciated:

Land 3,907 $ - $ - $ 3,907$ Construction in Progress 839 2,544 - 3,383 Total Capital Assets -Not Depreciated 4,746 2,544 - 7,290 Capital Assets Being Depreciated
Buildings 105,623 - - 105,623 Machinery and Equipment 19,583 1,423 (75) 20,931 Infrastructure 154,148
2,053 (245) 155,956
Total Capital Assets Being Depreciated 279,354 3,476 (320) 282,510 Less Accumulated Depreciation:

Buildings (39,534) (2,574) - (42,108) Machinery and Equipment (13,519) (1,345) 75 (14,789) Infrastructure (89,464)
(2,450) 245 (91,669)
Total Accumulated Depreciation (142,517) (6,369) 320 (148,566) Total Depreciated - Net 136,837 (2,893) - 133,944 Total Capital Assets 284,100 6,020 (320) 289,800 Total Accumulated Depreciation (142,517) (6,369) 320 (148,566) Capital Assets of Business Activities - Net 141,583 $ (349) $ - $ 141,234$ 105
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 records 76 percent of CNOA net assets as Joint Venture Investments. There is no separate Component Unit Financial Report (CUFR) prepared for the CNOA.

14. LEASES

The City of Huntington Beach has entered into 27 leases as a lessor for the use of City land and infrastructures. The lessees are required to make fixed monthly payments ranging from $322 to $44,000 over the lease terms. The City recognized $1,629,000 in lease revenue and $104,000 in interest revenue during the current fiscal year related to these agreements. As of June 30, 2024, the lease receivable is $9,462,000 and deferred inflow of resources is $9,191,000. The future principal and interest payments as of June 30, 2024, were as follows:

Year Ending
June 30, Principal Interest Total
2025 1,491$ 95$ 1,586$ 2026 1,501 87 1,588 2027 1,423 78 1,501 2028 833 70 903 2029 470 65 535 2030-2034 1,254 260 1,514 2035-2039 824 188 1,012 2040-2044 813 126 939 2045-2049 567 67 634 2050-2054 286 12 298 Total 9,462$ 1,048$ 10,510$ 106
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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 California 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 as a blended component unit.

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

After enactment of the law, effective June 28, 2011, Redevelopment Agencies in the State of California generally cannot enter into new projects, obligations or commitments. Subject to the control of a newly established Oversight Board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

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

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

107
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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

b. Long-Term Debt

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

(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):

Successor Agency:

June 30,
2023 Additions Retirements
June 30,
2024
Accrued
Interest
Due Within
One Year
Bonds Payable
1999 Tax Allocation Refunding Bond 785$ - $ (425)$ 360 $ 8$ 360$ 2002 Tax Allocation Bonds 1,700 - (920) 780 16 780 Total Bonds Payable 2,485 - (1,345) 1,140 24 1,140 Other Long-Term Obligations
Bella Terra OPA (Parking) 1,868 - (1,868) - - - Bella Terra AHA (Phase II) 11,329 - (835) 10,494 - 835 CIM DDA (Parking & Infrastructure) 4,641 - (353) 4,288 225 378 CIM DDA (Additional Parking) 321 - (17) 304 23 19 Total Other Long-Term Obligations 18,159 - (3,073) 15,086 248 1,232 Total Long-Term Obligations 20,644 $ - $ (4,418)$ 16,226 $ 272 $ 2,372$ Year Ending
June 30 Principal Interest Total
2025 360$ 9$ 369$
Total 360$ 9$ 369$
108
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

15. SUCCESSOR AGENCY TRUST FOR 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 $1,169,000, principal and interest, for the outstanding 1999 and 2002 Tax Allocation Refunding Bonds as of June 30, 2024 from semi-annual Redevelopment 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 State of California, nor any of its 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 payable out of funds or properties other than those of the Redevelopment Agency as set forth in the bond indenture.

Year Ending
June 30 Principal Interest Total
2025 780$ 20$ 800$
Total 780$ 20$ 800$
109
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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

(3) Bella Terra Parking Structure

In Fiscal Year 2005/06, the Agency entered into an owner participation agreement with Bella Terra Associates, LLC (formerly Huntington Center Associates, LLC). Under the agreement, the Corporation would construct 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. The City paid off the Successor Agency obligation under the agreement in FY23-24. The interest rate of this obligation is 6.94%. The agreement has been approved as an enforceable obligation by the Department of Finance (DOF).

(4) Bella Terra Phase II

In Fiscal Year 2010/11, the Agency entered into an affordable housing agreement with BTDJM Phase II Associates (DJM). The agreement would 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 transferred the site to UDR, and as of year-end, the Successor Agency obligation under the agreement amounted to $10,494,000. Reimbursement of the affordable units will be based upon the site-generated tax increment for the mixed use project as well as the 20% housing fund from the site-generated Bella Terra I. The interest rate of this obligation is 4.00%. The agreement has been approved as an enforceable obligation by the DOF.

110
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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

(5) 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 agreement amounted to $4,288,000. 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 Controller (CAC) and the Department of Finance (DOF). The Disposition and Development Agreement (DDA) has been approved as an enforceable obligation by the DOF.

111
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

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

(6) 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 agreement amounted to $304,000. 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 Controller (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 Housing Fund to the Redevelopment 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.

112
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

16. COMMITMENTS AND CONTINGENCIES (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 tax 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 three sales tax sharing agreements with Pinnacle Petroleum (2029), (McKenna Subaru HB) 2033, and Surf City Auto Group II, Inc. (2038). Pinnacle Petroleum receives a 65% rebate after base sales exceed $25,000, McKenna Subaru HB receives a 45% rebate after base sales exceed $150,800, and Surf City Auto Group II, Inc. receives a 50% rebate after base sales exceed $1,785,261 (which increases by 1% annually). Sales tax rebates totaled $1,049,772 for the year ending June 30, 2024.

c. Cooperation and Owner Participation Agreements

On September 2, 2003, the Redevelopment Agency Approved a Cooperation Agreement Regarding Capital Improvements in the Southeast Coastal 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 starting in FY 2003/04 as they are undertaken. 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 the loans between the City and former Redevelopment Agency in FY 2016/17. The State Department of Finance (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 requested a hearing with the Court to appeal this determination. On February 17, 2023, the Superior Court of California issued a final ruling stating that the agreement did not constitute an enforceable obligation; thus, repayment was not required.

d. Redevelopment Successor Agency Debt to City

The City has advanced money to the Redevelopment Agency for major capital improvements, economic development projects, and operations. In January 2011, the City Council and Redevelopment Agency Board approved a revised Cooperation Agreement, which included a Promissory Note that memorialized 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. 113
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

16. COMMITMENTS AND CONTINGENCIES (Continued)

The City and Successor Agency have not recorded the advances in the 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 April 22, 2022, the Superior Court of California issued a Proposed Judgment stating that the majority of the agreements between the City and the former Redevelopment Agency were not considered enforceable obligations and that repayment was not required, with the exception 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, 2022. The City has requested a hearing with the Court to appeal this determination. On February 17, 2023, the Superior Court of California issued a final ruling confirming the April 22, 2022 determination. As of June 30, 2024, the City recognizes $31,136,000 of receivables relating to the Waterfront property purchase to be paid in future Recognized Obligation Payment Schedule (ROPS).

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

June 30,
2023 Additions Reductions
June 30,
2024
General Fund
Direct Advances 2,312$ -$ -$ 2,312$ Indirect Advances 6,567 - - 6,567 Land Sales 32,833 - (22,400) 10,433 Interest 35,859 3,065 (3,719) 35,205 Total General Fund 77,571 3,065 (26,119) 54,517 Sewer Fund
Direct Advances 308 13 - 321 Deferred Development Fees 192 8 - 200 Total Sewer Fund 500 21 - 521 Drainage Fund
Direct Advances 743 31 - 774 Deferred Development Fees 205 8 - 213 Total Drainage Fund 948 39 - 987 Park Acquisition and Development Fund
Direct Advances 6,122 252 - 6,374 Deferred Development Fees 454 19 - 473 Total Park Acquisition and Development Fund 6,576 271 - 6,847 Water Fund
Direct Advances 4,607 189 - 4,796 Total Water Fund 4,607 189 - 4,796 Total All Funds 90,202$ 3,585 $ (26,119)$ 67,668 $ 114
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

16. COMMITMENTS AND CONTINGENCIES (Continued)

e. Low Moderate Income Housing Asset Fund Debt to City

In May 2009, a Promissory Note was issued by the Redevelopment Agency to the City to pay for outstanding bonded 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 the accompanying financial statements due to uncertainties surrounding ABX1 26 and 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 paid on the FY 2023-24 Recognized Obligation Payment Schedule (ROPS). In FY 2023-24 the Successor Agency received payment and paid back the promissory note held by the City. Below is a schedule of the activity for the year (in thousands):

f. Successor Agency Litigation

Until 2012, the Huntington Beach Redevelopment Agency existed and received property tax increment from property within the “City Redevelopment Project Area.” In 2012, the State Legislature dissolved all redevelopment agencies, and all tax increment was returned to the County for payment to other taxing entities. The only exception was that tax increment would continue to be paid to the Successor Agency to the City Redevelopment Agency to pay any pre-dissolution, legally binding obligations established prior to the dissolution of the agencies. Further, the City transferred the former Redevelopment Agency’s housing obligations to the Huntington Beach Housing Authority pursuant to Health and Safety Code section 34176.

The Successor Agency contended that the 2012 Pacific City Development Agreement was a pre-dissolution, legally binding obligation. Pacific 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,
2022 Additions Reductions
June 30,
2024
General Fund
Emerald Cove 3,245$ - $ (3,245)$ - $ 115
City of Huntington Beach
Notes to Financial Statements
For the Year Ended June 30, 2024

16. COMMITMENTS AND CONTINGENCIES (Continued)

On April 22, 2022, the Superior Court of California issued a Proposed Judgment stating that the majority of the agreements between the City and the former Redevelopment Agency were not considered enforceable obligations and that repayment was not required, with the exception of the $22,400,000 loan for the purchase of the Waterfront property and the Promissory Note related to the Emerald Cove Housing Project. The City has requested a hearing with the Court to appeal this determination. On February 17, 2023, the Superior Court of California issued a final ruling confirming the April 22, 2022 determination. On May 19, 2023, the DOF issued a letter confirming the Court ruling. In FY 2023-24 the Successor Agency received payment and paid back the promissory note held by the City relating to Emerald Cove Housing Project. Additionally, the City recognizes $31,136,000 of receivables relating to the Waterfront property purchase to be paid in future Recognized Obligation Payment Schedule (ROPS).

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

17. OTHER INFORMATION

Fund and Accumulated Deficits

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

The Self Insurance Workers’ Compensation fund has a deficit due to increases in statutory benefits related to workers’ compensation claims and rising healthcare costs.

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’ Compensation and General Liability Internal Service Funds.

Internal Service Fund:

Self Insurance Workers' Comp 26,415 $
116

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117

REQUIRED SUPPLEMENTARY INFORMATION

118

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119

City of Huntington Beach
Notes to Required Supplementary Information
For the Year Ended June 30, 2024

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 departments. The budget includes estimates for revenue that, along with the appropriations, compute the budgetary fund balance.

The appropriated budget covers substantially all governmental fund expenditures with the exception of capital improvement projects (capital projects funds) carried forward from prior years, which constitute a legally authorized non-appropriated budget. The City Council may amend the budget at any time. The City Manager may transfer funds from between object purposes (personal services, operating expenditures, or capital outlay expenditures) within the same department without changing the 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 unused appropriations lapse at year-end. During the year, the City Council made several supplemental 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 with generally accepted principles as legally required. There are no significant non-budgeted financial activities.

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

On or before February 28
th of each year, each department submits data to the City Manager for budget preparation. Staff prepares 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 1
st, the City Council receives the proposed budget. The City Council holds public hearings and may amend the budget by a majority vote. Changes to the budget must be within the available revenues and reserves.

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

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

The City uses an encumbrance system as an aid in controlling expenditures. When the City issues a purchase order for goods or services, it records an encumbrance until the vendor delivers the goods or performs the service. At year-end, the City reports all outstanding encumbrances as 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).
120
REVENUES Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Property Taxes 104,197$ 105,750$ 105,750$ -$ Sales Taxes 53,554 51,421 51,421 - Utility Taxes 21,245 23,283 23,283 - Other Taxes 28,330 27,103 27,024 (79) Licenses and Permits 9,140 10,200 10,200 - Fines, Forfeitures and Penalties 5,061 3,666 3,666 - Use of Money and Property 21,741 27,646 30,133 2,487 Intergovernmental 2,714 9,084 11,387 2,303 Charges for Current Service 34,137 31,800 31,671 (129) Other 1,786 1,655 2,234 579 Total Revenues 281,905 291,608 296,769 5,161

EXPENDITURES
Current:

City Council 497 549 464 85 City Manager 3,870 5,272 4,853 419 City Treasurer 1,798 2,077 2,059 18 City Attorney 3,612 4,201 3,994 207 City Clerk 1,150 1,862 1,653 209 Finance 5,372 6,444 5,963 481 Human Resources 2,528 3,113 2,636 477 Community Development 14,717 18,152 13,410 4,742 Fire 55,406 71,576 71,576 - Information Services 8,034 9,431 7,896 1,535 Police 87,117 99,965 99,071 894 Community Services 10,611 12,966 12,354 612 Library Services 5,494 6,998 6,954 44 Public Works 23,951 27,932 27,436 496 Debt Service:

Principal 2,809 5,485 5,485 - Interest 212 585 585 - Total Expenditures 227,178 276,608 266,389 10,219 Excess of Revenues Over Expenditures 54,727 15,000 30,380 15,380

OTHER FINANCING SOURCES (USES)
Transfers In 4,223 2,787 478 (2,309) Subscription Based IT Arrangement - - 2,666 2,666 Transfers Out (58,754) (27,742) (27,742) - Total Other Financing Sources (Uses) (54,531) (24,955) (24,598) 357 Net Change In Fund Balance 196 (9,955) 5,782 15,737 Fund Balance - Beginning of Year 126,537 126,537 126,537 - Fund Balance - End of Year 126,733 $ 116,582 $ 132,319 $ 15,737 $

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024
(In Thousands)
General Fund
See Accompanying Notes to Required Supplementary Information 121
REVENUES Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 276$ 276 $ Intergovernmental 4,262 12,414 12,141 (273) Other - - 814 814 Total Revenues 4,262 12,414 13,231 817

EXPENDITURES
Current:

City Manager - 6,868 1,777 5,091 Community Development 2,446 5,807 3,277 2,530 Fire - 44 36 8 Police 881 5,832 3,551 2,281 Community Services 334 369 324 45 Library Services 60 249 229 20 Public Works 5,869 25,827 6,880 18,947 Total Expenditures 9,590 44,996 16,074 28,922 Excess of Revenues Over (Under)
Expenditures (5,328) (32,582) (2,843) 29,739

OTHER FINANCING USES
Transfers In 4,900 4,900 4,900 - Transfers Out (50) - - - Total Other Financing Sources (Uses) 4,850 4,900 4,900 - Net Change In Fund Balance (478) (27,682) 2,057 29,739 Fund Balance - Beginning of Year 655 655 655 - Fund Balance - End of Year 177$ (27,027)$ 2,712 $ 29,739 $ (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, 2024
See Accompanying Notes to Required Supplementary Information 122

Measurement Period 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 Total Pension Liability
Service cost 9,167$ 8,174$ 8,005$ 7,779$ 8,327$ 8,314$ 8,084 $ 7,436$ 7,102$ 7,263$ Interest on total pension liability 44,775 43,253 42,217 41,058 40,150 38,769 37,749 37,194 35,653 34,412 Differences between expected and actual experience 5,260 451 (891) (6,087) (183) (2,042) (9,148) 1,072 (2,900) - Changes of Benefit Terms 658 - - - - - - - - - Changes in assumptions - 19,824 - - - (3,634) 30,762 - (8,565) - Benefit payments, including refunds of employee contributions (36,633) (34,942) (33,392) (30,321) (28,508) (26,685) (25,312) (24,316) (23,377) (22,444) Net change in total pension liability 23,227 36,760 15,939 12,429 19,786 14,722 42,135 21,386 7,913 19,231 Total pension liability - beginning 656,726 619,966 604,027 591,598 571,812 557,090 514,955 493,569 485,656 466,425 Total pension liability - ending (a) 679,953$ 656,726 $ 619,966$ 604,027$ 591,598$ 571,812$ 557,090 $ 514,955 $ 493,569 $ 485,656$ Plan Fiduciary Net Position
Co
ntributions - employer 7,450$ 6,951$ 150,917$ 16,879$ 14,816 $ 13,495$ 12,316 $ 10,982$ 9,747$ 9,066$ Contributions - employee 3,741 3,533 3,450 3,630 3,779 3,649 3,869 3,736 3,790 3,909 Investment income 36,077 (49,840) 107,447 21,485 27,288 32,963 40,328 1,856 8,230 56,429 Administrative Expense (439) (419) (443) (609) (296) (614) (536) (226) (418) (472) Benefit payments (36,633) (34,942) (33,392) (30,321) (28,508) (26,685) (25,312) (24,316) (23,377) (22,444) Plan to Plan Resource Movement 1 - - - (13) 1 - - - - Other - - - - 1 (1,166) - - 2 - Net change in plan fiduciary net position 10,197 (74,717) 227,979 11,064 17,067 21,643 30,665 (7,968) (2,026) 46,488 Plan fiduciary net position - beginning 596,848 671,565 443,586 432,522 415,455 393,812 363,147 371,115 373,141 326,653 Plan fiduciary net position - ending (b) 607,045$ 596,848$ 671,565$ 443,586$ 432,522$ 415,455$ 393,812 $ 363,147$ 371,115 $ 373,141$ Net pension liability - beginning 59,878 (51,599) 160,441 159,076 156,357 163,278 151,808 122,454 112,515 139,771 Net pension liability (asset) - ending (a)-(b) 72,908$ 59,878$ (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) 89.28% 90.88% 108.32% 73.44% 73.11% 72.66% 70.69% 70.52% 75.19% 76.83% Covered payroll 51,089$ 46,824$ 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 142.71% 127.88% N/A 349.15% 350.24% 344.16% 364.07% 342.18% 276.84% 273.48% Notes to Schedule:
* For covered payroll, the measurement period of July 1, 2022 to June 30, 2023 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. In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.

Changes in assumptions: There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.

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
123

(in Thousands)
Measurement Period 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 Total Pension Liability
Service cost 15,176$ 14,683 $ 13,386 $ 13,226 $ 13,644 $ 13,509 $ 13,657 $ 12,159$ 11,119$ 11,096$ Interest on total pension liability 60,569 57,872 56,114 54,597 53,048 51,223 49,350 48,390 46,160 44,246 Differences between expected and actual experience 13,601 102 (3,882) (4,721) (1,220) 2,584 (10,819) 2,678 (820) - Changes of Benefit Terms 374 - - - - - - - - - Changes in assumptions - 28,785 - - - (3,657) 40,352 - (11,054) - Benefit payments, including refunds of employee contributions (49,495) (45,876) (44,362) (41,247) (38,958) (37,128) (34,222) (32,116) (30,535) (29,540) Net change in total pension liability 40,225 55,566 21,256 21,855 26,514 26,531 58,318 31,111 14,870 25,802 Total pension liability - beginning 881,003 825,437 804,181 782,326 755,812 729,281 670,963 639,852 624,982 599,180 Total pension liability - ending (a) 921,228$ 881,003$ 825,437$ 804,181$ 782,326$ 755,812$ 729,281 $ 670,963$ 639,852$ 624,982 $ Plan Fiduciary Net Position
Contributi
ons - employer 13,219$ 13,579$ 257,381 $ 25,848 $ 23,063 $ 21,058 $ 20,629 $ 18,703$ 17,791$ 15,152$ Contributions - employee 4,949 4,985 4,395 4,355 4,337 4,164 4,570 4,058 4,110 3,850 Investment income 47,901 (65,933) 133,170 25,784 32,776 39,336 48,413 2,144 9,661 66,805 Administrative Expense (580) (549) (532) (731) (355) (736) (640) (270) (497) (555) Benefit payments (49,495) (45,876) (44,362) (41,247) (38,958) (37,128) (34,222) (32,116) (30,535) (29,540) Net Plan to Plan Resource Movement (1) - - - 13 (3) - (29) - - Other - - - - 1 (1,398) - - - - Net change in plan fiduciary net position 15,993 (93,794) 350,052 14,009 20,877 25,293 38,750 (7,510) 530 55,712 Plan fiduciary net position - beginning 788,911 882,705 532,653 518,644 497,767 472,474 433,724 441,234 440,704 384,992 Plan fiduciary
net position - ending (b) 804,904$ 788,911 $ 882,705$ 532,653$ 518,644$ 497,767$ 472,474 $ 433,724$ 441,234$ 440,704$ Net pension liability - beginning 92,092 (57,268) 271,528 263,682 258,045 256,807 237,239 198,618 184,278 214,188 Net pension liability (asset) - ending (a)-(b) 116,324$ 92,092$ (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) 87.37% 89.55% 106.94% 66.24% 66.30% 65.86% 64.79% 64.64% 68.96% 70.51% Covered payroll 48,194$ 48,023 $ 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 241.37% 191.77% N/A 620.17% 603.61% 594.97% 593.32% 556.65% 470.08% 479.93% Notes to Schedule:
* For covered payroll, the measurement period of July 1, 2022 to June 30, 2023 was used.

Changes in assumptions: There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.

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. In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.

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
124

Total Pension Liability 2023-24 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18** 2016-17 2015-16 2014-15 Service cost 203$ 237 $ 299 $ 350 $ 338 $ 398 $ 344 $ 487 $ 552 $ 495 $ Interest on total pension liability 3,848 3,934 3,897 4,292 3,954 3,990 2,964 3,976 3,945 3,919 Differences between expected and actual experience 781 - 492 - 4,594 - (794) - 982 - Changes in assumptions (1,375) - (1,638) 6,547 1,756 - 2,115 1,515 2,928 - Benefit payments, including refunds of employee contributions (5,711) (5,712) (5,668) (5,494) (5,012) (4,771) (3,388) (4,144) (3,773) (3,588) Net change in total pension liability (2,254) (1,541) (2,618) 5,695 5,630 (383) 1,241 1,834 4,634 826 Total pension liability - beginning 72,610 74,151 76,769 71,074 65,444 65,827 64,586 62,752 58,118 57,292 Total pension liability - ending (a) 70,356$ 72,610$ 74,151$ 76,769$ 71,074$ 65,444 $ 65,827$ 64,586$ 62,752$ 58,118$ Plan Fiduciary Net Position
Contributions - employer 1,422$ 6,046$ 6,006$ 1,435$ 3,506$ 4,962 $ 3,507$ 5,346$ 7,277$ 4,678 $ Investment income 6,954 4,823 (11,362) 15,717 2,114 2,582 2,128 6,373 4,282 (1,313) Administrative Expense (350) (334) (338) (314) (444) (191) (145) (182) (189) (170) Benefit payments (5,711) (5,712) (5,668) (5,494) (5,012) (4,771) (3,388) (4,144) (3,773) (3,588) Section 115 Trust Segregation - - - - - - (3,788) - - - Other - - - - - - - - - 3,183 Net change in plan fiduciary net position 2,315 4,823 (11,362) 11,344 164 2,582 (1,686) 7,393 7,597 2,790 Plan fiduciary net position - beginning 63,822 58,999 70,361 59,017 58,853 56,271 57,957 50,564 42,967 40,177 Plan fiduciary net position - ending (b) 66,137$ 63,822$ 58,999$ 70,361$ 59,017 $ 58,853$ 56,271$ 57,957 $ 50,564$ 42,967$ Net pension liability - beginning 8,788 15,152 6,408 12,057 6,591 9,556 6,629 12,188 15,151 17,115 Net pension liability - ending (a)-(b) 4,219$ 8,788 $ 15,152$ 6,408$ 12,057$ 6,591$ 9,556$ 6,629$ 12,188$ 15,151$ Plan fiduciary net position as a percentage of the
total pension liability 94.00% 87.90% 79.57% 91.65% 83.04% 89.93% 85.48% 89.74% 80.58% 73.93% Covered payroll 5,590$ 5,497$ 6,670$ 7,684 $ 8,469 $ 12,863$ 10,890$ 17,167$ 19,517$ 22,069$ Net pension liability as a percentage of covered payroll 75.47% 159.87% 227.17% 83.39% 142.37% 51.24% 87.75% 38.61% 62.45% 68.65% ** 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.

Supplemental Retirement Plan
(in Thousands)
Last Ten Fiscal Years
Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period City of Huntington Beach
Required Supplementary Information
125

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 2023 2022 2021 2020 2019 2018 2017
Total OPEB Liability
Service cost 968$ 1,004$ 1,120$ 1,096$ 1,241$ 1,205$ 877$ Interest on the total OPEB liability 1,709 1,655 2,119 2,064 1,859 1,787 1,293 Actual and expected experience difference (3,372) - (6,296) - 1,411 - - Changes in assumptions 503 (891) 1,603 (298) (3,358) - - Benefit payments (1,870) (2,352) (2,129) (1,848) (1,742) (1,683) (1,036) Net change in total OPEB liability (2,062) (584) (3,583) 1,014 (589) 1,309 1,134 Total OPEB liability - beginning 29,692 30,276 33,859 32,845 33,434 32,125 30,991 Total OPEB liability - ending (a) 27,630 $ 29,692 $ 30,276 $ 33,859 $ 32,845 $ 33,434 $ 32,125 $ Plan Fiduciary Net Position
Contribution - employer** 1,997 $ 2,499 $ 1,882 $ 1,959 $ 2,270 $ 4,191 $ 1,036 $ Net investment income 1,130 (4,561) 6,025 1,580 1,901 1,126 471 Benefit payments (1,870) (2,352) (2,129) (1,848) (1,742) (1,683) (1,036) Administrative expense (136) (156) (131) (245) (61) (131) (9) Net change in plan fiduciary net position 1,121 (4,570) 5,647 1,446 2,368 3,503 462 Plan fiduciary net position - beginning 31,716 36,286 30,639 29,193 26,825 23,322 22,860 Plan fiduciary net position - ending (b) 32,837 $ 31,716 $ 36,286 $ 30,639 $ 29,193 $ 26,825 $ 23,322 $ Net OPEB liability (asset) - ending (a)-(b) (5,207) $ (2,024) $ (6,010) $ 3,220 $ 3,652 $ 6,609 $ 8,803 $ Plan fiduciary net position as a percentage of the total OPEB liability (asset) 118.85% 106.82% 119.85% 90.49% 88.88% 80.23% 72.60% Covered employee payroll 72,558$ 72,524$ 70,881$ 76,521$ 79,682$ 81,458$ 60,985$ Net OPEB liability as a percentage of covered employee payroll N/A N/A 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 seven 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
126

2023-24 1 2022-23 1 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 Actuarially determined contribution 5,808$ 7,451 $ 6,951$ 18,086$ 16,878 $ 14,819 $ 9,734$ 11,921$ 11,238$ 10,510 $ Contributions in relation to the actuarially
determined contributions (5,808) (7,451) (6,951) (18,086) (16,878) (14,819) (9,734) (11,921) (11,238) (10,510) Contribution deficiency (excess) -$ - $ -$ - $ -$ - $ - $ -$ -$ - $ Covered payroll 52,161$ 51,089 $ 46,824$ 45,740$ 45,952 $ 45,419 $ 33,210 $ 45,118$ 44,253$ 46,337$ Contributions as a percentage of covered payroll 11.13% 14.58% 14.84% 39.54% 36.73% 32.63% 29.31% 26.42% 25.39% 22.68% Notes to Schedule
Valuation date: 6/30/2013 through 06/30/2022
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
Last Ten Fiscal Years
CalPERS City Miscellaneous Plan - 99
City of Huntington Beach
Required Supplementary Information
Schedule of Contributions
For the Year Ended June 30, 2024
(in Thousands)
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.
*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 10/1/13-6/30/16, 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 7/1/19-6/30/23, 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.

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- 6/30/23, the probabilities of Retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.

The prescribed discount rate assumption, adopted by the board on November 17, 2021, is 6.90 percent compounded annually (net of investment and administrative expenses) as of June 30, 2023.

2.75% for 10/1/2013-6/30/2020, and 2.80% for 7/1/2020-6/30/2023.

2.75% for 10/1/2013-6/30/2019, 2.50% for 7/1/2019-6/30/2020, and 2.30% for 7/1/2020-6/30/2023.

For 10/1/14-6/30/15, 15 Year Smoothed Market (for details, see June 30, 2012 Funding Valuation Report). For 7/1/15-6/30/23, Fair Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013-2023).

For details, see Miscellaneous Plan of the City of Huntington Beach Annual Valuation Report as of June 30, 2023. 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. 127

2023-24 1 2022-23 1 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 Actuarially determined contribution 11,484$ 13,220$ 13,579 $ 27,691$ 25,847 $ 23,062 $ 15,223 $ 19,468 $ 19,129$ 18,125$ Contributions in relation to the actuarially
determined contributions (11,484) (13,220) (13,579) (27,691) (25,847) (23,062) (15,223) (19,468) (19,129) (19,125) Contribution deficiency (excess) -$ - $ - $ - $ - $ - $ - $ - $ -$ (1,000)$ Covered payroll 51,351$ 48,601$ 48,023 $ 45,665$ 43,783 $ 43,684 $ 31,943 $ 43,269 $ 42,607$ 44,055$ Contributions as a percentage of covered payroll 22.36% 27.20% 28.28% 60.64% 59.03% 52.79% 47.66% 44.99% 44.90% 43.41% Notes to Schedule
Valuation date: 6/30/2013 through 06/30/2022
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, 2023.

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

Payroll growth
Discount Rate
Retirement age
Mortality
For the Year Ended June 30, 2024
Schedule of Contributions
Required Supplementary Information
City of Huntington Beach

2.75% for 10/1/2013-6/30/2020, and 2.80% for 7/1/2020-6/30/2022.

CalPERS City Safety Plan - 100
Last Ten Fiscal Years
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 7/1/15-6/30/23, Fair Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013-2023).

2.75% for 10/1/2013-6/30/2019, 2.50% for 7/1/2019-6/30/2020, and 2.30% for 7/1/2020-6/30/2023.

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 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 prescribed discount rate assumption, adopted by the board on November 17, 2021, is 6.90% compounded annually (net of invesment and administrative expenses) as of June 30, 2023. (in Thousands)
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 7/1/19-6/30/23, 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 7/1/19-6/30/23, 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. 128

2023-24 1 2022-23 1 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 Actuarially determined contribution 1,388$ 1,413 $ 889 $ 933$ 1,689$ 2,258$ 2,879$ 3,895$ 3,576$ 3,634$ Contributions in relation to the actuarially
determined contributions (1,422) (6,046) (6,006) (1,435) (3,506) (4,962) (3,507) (5,346) (7,277) (4,678) Contribution deficiency (excess) (34)$ (4,633)$ (5,117)$ (502)$ (1,817)$ (2,704)$ (628)$ (1,451)$ (3,701)$ (1,044)$ Covered payroll 5,590$ 5,497 $ 6,670$ 7,684$ 8,469$ 12,863$ 10,890$ 17,167$ 19,517 $ 22,069$ Contributions as a percentage of covered payroll 25.44% 109.99% 90.04% 18.68% 41.40% 38.58% 32.20% 31.14% 37.29% 21.20% Notes to Schedule
Valuation date: 6/30/2023 6/30/2021 6/30/2021 6/30/2019 6/30/2019 9/30/2017 9/30/2017 9/30/2015 9/30/2013 9/30/2013 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 7/1/2020-6/30/2024.

Salary increases Aggregate - 2.75% annually. Merit - CalPERS 2000-2019 Experience Study.

Payroll growth
Investment rate of return
Retirement age
Mortality
2024 2023 2022 2021 2020 2019 2018 2
2017 2016 2015
Annual Money Weighted Rate of Return, net
of investment expense 11.10% 8.37% -15.97% 26.88% 3.79% 4.79% 4.04% 12.87% 10.20% -2.82% The probabilities of retirement are based on the CalPERS 1997-2015 Experience Study.

Investment gains/losses spread over a 3-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.

Schedule of Money Weighted Rate of Return
Required Supplementary Information
City of Huntington Beach
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.

Supplemental Retirement Plan
Last Ten Fiscal Years*
(in Thousands)
For the Year Ended June 30, 2024
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. 20-year fixed period for 2022/23. 19-year fixed period for 2023/24. Level dollar amortization.

Merit - CalPERS 1997-2011 Experience Study plus 3.25% aggregate increase for 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, 2023 period. Merit - CalPERS 2000-2019 Experience Study plus 2.75% annually increase for the July 1, 2023 - June 30, 2024 period.

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. 5.50%, net of pension plan investment and administrative expenses, for the July 1, 2022 - June 30, 2024 measurement period.

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.

Mortality projected fully generational with Scale MP-2021 for the July 1, 2022 to June 30, 2024 measurement period.

Schedule of Contributions
129

Fiscal Year Ended June 30 2024 2023 2022 2021 2020 2019 2018** Actuarially Determined Contribution (ADC) 793$ 856$ 1,401$ 1,364$ 1,793$ 1,746$ 2,022$ Contributions in relation to the ADC*** (935) (1,997) (2,499) (1,882) (1,959) (2,270) (4,192) Contribution deficiency (excess) (142)$ (1,141) $ (1,098) $ (518) $ (166) $ (524) $ (2,170) $ Covered-employee payroll** 74,640 $ 72,558 $ 72,524 $ 70,881 $ 76,521 $ 79,682 $ 59,589 $ Contributions as a percentage of covered-employee payroll 1.25% 2.75% 3.45% 2.66% 2.56% 2.85% 7.03% Notes to Schedule:

Valuation date: 6/30/2023 6/30/2021 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 fixed period.

Inflation
Payroll Growth 2.75% 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.

8.50%, 1.0% - 2.0% near term increase then decreasing by 0.15%-0.60% per year to trend rate that reflects medical price inflation to an ultimate rate of

3.45% 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 2000-2019-2015 experience Study for Measurement period as of 6/30/23.

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, 2024
3% for 10/1/17-6/30/18 and 2.75% per annum for the measurement period 7/1/2018 to 6/30/2022. 2.50% per annum for the measurement period 7/1/2022 to 6/30/2024.
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. 5.75% for the July 1, 2021 to June 30, 2023 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
130

SUPPLEMENTARY INFORMATION

131

City of Huntington Beach
Other Governmental Funds

Special Revenue Funds account for revenues and expenditures legally constrained to a specific purpose.

x The Air Quality Fund accounts for revenues from the local agencies used to improve local air quality. x The Development Impact Fee Fund accounts for fees collected for new developments to be used for transportation, park land acquisition and development, library and other public facilities in an effort to mitigate the impacts of those new developments.
x 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 public and to facilitate compliance with construction related accessibility requirements.
x The Drainage Fund accounts for fees received from developers to construct and maintain the City’s drainage system.
x The Strand Parking Structure Fund accounts for the activities of the Strand Parking Structure. x 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. x The Housing Residual Receipt Fund accounts for residual receipts received for housing activities. x The Park Acquisition and Development Fund accounts for fees received from developers to develop and maintain the City’s park system.
x 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 acquisition of capital equipment and facilities necessary to program and broadcast PEG (public, education and government) events on the City’s cable channel. x The ELM Automation Fund accounts for automation fee revenues and Enterprise Land Management (ELM) replacement costs and maintenance expenditures.
x The Traffic Congestion Relief Fund accounts for moneys allocated for roadway maintenance as established by Assembly Bill 2928.
x The Traffic Impact Fee Fund accounts for moneys received from the traffic impact fee levied on new developments in the City.
x 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.

x 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.

x 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. x The Lease Capital Project Fund records activity for leases project expenditures. x The Parking In-Lieu Fund records construction activity from developers who pay fees in-lieu of directly providing parking facilities to the City.
x The Sewer Development Fund accounts for fees received from developers to construct and maintain sewer facilities.
x The Technology Fund accounts for technology infrastructure project expenditures.

132
ASSETS Air Quality
Development
Impact Fee
Disability
Access Drainage
Strand Parking
Structures Gas Tax
Cash and Investments 807$ 6,957$ 470$ 3,609$ 4,125$ 7,839$ Taxes Receivable - - - - - 318 Other Receivables 154 45 3 24 27 943 Total Assets 961 7,002 473 3,633 4,152 9,100

LIABILITIES
Accounts Payable 51 100 2 37 - 330 Accrued Payroll - 3 - - - 20 Total Liabilities 51 103 2 37 - 350

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue 82 - - - - - Total Deferred Inflows of Resources 82 - - - - -

FUND BALANCES
Restricted
Pollution Remediation - - - - - - Highways, Streets and Transportation - - - - - 8,750 Low Income Housing - - - - - - Air Quality 828 - - - - - Other Capital Projects - 6,899 - 3,596 - - Other Purposes - - 471 - - - Committed
Parks - - - - - - Other Purposes - - - - 4,152 - Total Fund Balances 828 6,899 471 3,596 4,152 8,750 961$ 7,002$ 473 $ 3,633$ 4,152 $ 9,100 $ Total Liabilities, Deferred Inflows
of Resources and Fund Balances

SPECIAL REVENUE FUNDS

CITY OF HUNTINGTON BEACH

COMBINING BALANCE SHEET

OTHER GOVERNMENTAL FUNDS
June 30, 2024
(In Thousands)
133
Housing
Residual Receipt
Park Acquisition
and Development Surf City "3"
ELM Automation
Fund
Traffic
Congestion
Relief
Traffic Impact
Fee Transportation
Total Special
Revenue Funds
2,165$ 7,030$ 1,965$ 1,034$ 1,601$ 4,355$ 4,681$ 46,638$ - - 199 - 151 - 730 1,398 9 448 11 6 19 28 30 1,747 2,174 7,478 2,175 1,040 1,771 4,383 5,441 49,783 - - 52 18 288 78 278 1,234 - - - 3 - - 26 52 - - 52 21 288 78 304 1,286 - - - - - - - 82 - - - - - - - 82 - 336 - - - - - 336 - - - - 1,483 4,305 5,137 19,675 2,174 - - - - - - 2,174 - - - - - - - 828 - - - - - - - 10,495 - - 2,123 1,019 - - - 3,613 - 7,142 - - - - - 7,142 - - - - - - - 4,152 2,174 7,478 2,123 1,019 1,483 4,305 5,137 48,415 2,174$ 7,478 $ 2,175 $ 1,040 $ 1,771 $ 4,383 $ 5,441 $ 49,783 $ June 30, 2024
(In Thousands)
(continued)

SPECIAL REVENUE FUNDS

CITY OF HUNTINGTON BEACH

COMBINING BALANCE SHEET

OTHER GOVERNMENTAL FUNDS
134
ASSETS
Public Financing
Authority
Total Debt Service
Fund
Affordable Housing
In-Lieu
Lease Capital
Project
Cash and Investments 3,399 $ 3,399 $ 10,066 $ - $ Cash and Investments with Fiscal Agent 1,115 1,115 - 2,466 Taxes Receivable - - - - Other Receivables - - 65 22 Prepaids - - - 4,576 Total Assets 4,514 4,514 10,131 7,064

LIABILITIES
Accounts Payable 2 2 - - Accrued Payroll - - - - Total Liabilities 2 2 - -

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - - - - Total Deferred Inflows of Resources - - - -

FUND BALANCES
Restricted
Pollution Remediation - - - - Debt Service 4,512 4,512 - - Highways, Streets and Transportation - - - - Low Income Housing - - 10,131 - Air Quality - - - - Other Capital Projects - - - 7,064 Other Purposes - - - - Committed
Parks - - - - Other Capital Projects - - - - Other Purposes - - - - Assigned
Capital Improvement Reserve - - - - Total Fund Balances 4,512 4,512 10,131 7,064 4,514$ 4,514 $ 10,131 $ 7,064 $

CITY OF HUNTINGTON BEACH

COMBINING BALANCE SHEET

OTHER GOVERNMENTAL FUNDS
June 30, 2024
(In Thousands)
Total Liabilities, Deferred Inflows
of Resources and Fund Balances

DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS
(continued)
135
Parking In-Lieu Sewer Development Technology
Total Capital Projects
Funds
Total Other
Governmental Funds
936$ 1,959$ 6,143 $ 19,104 $ 69,141 $ - - - 2,466 3,581 - - - - 1,398 3 13 35 138 1,885 - - 589 5,165 5,165 939 1,972 6,767 26,873 81,170 - 45 5 50 1,286 - - - - 52 - 45 5 50 1,338 - - - - 82 - - - - 82 - - - - 336 - - - - 4,512 - - - - 19,675 - - - 10,131 12,305 - - - - 828 - - - 7,064 17,559 - - - - 3,613 - - - - 7,142 939 1,927 - 2,866 2,866 - - - - 4,152 - - 6,762 6,762 6,762 939 1,927 6,762 26,823 79,750 939$ 1,972$ 6,767 $ 26,873 $ 81,170 $ (continued)

CITY OF HUNTINGTON BEACH

COMBINING BALANCE SHEET

OTHER GOVERNMENTAL FUNDS
June 30, 2024
(In Thousands)

CAPITAL PROJECT FUNDS
136
REVENUES Air Quality
Development
Impact Fee
Disability
Access Drainage
Strand
Parking
Structures Gas Tax
Sales Taxes -$ -$ -$ -$ -$ -$ Other Taxes - - - - - - Licenses and Permits - - 72 - - - Use of Money and Property (Loss) 18 189 12 222 1,758 160 Intergovernmental 229 - - - - 8,737 Charges for Current Service - 659 - 412 - - Other - - - - - - Total Revenues 247 848 84 634 1,758 8,897

EXPENDITURES
Current:

City Manager - - - - - - Finance - - 24 - - - Community Development - - - - 1,051 - Information Systems - - - - - - Police - 846 - - - - Community Services - 1,274 - - - - Library Services - 52 - - - - Public Works 457 - - 1,167 - 4,943 Total Expenditures 457 2,172 24 1,167 1,051 4,943 Excess Of Revenues Over
(Under) Expenditures (210) (1,324) 60 (533) 707 3,954 Other Financing Sources (Uses):

Transfers In - - - - - - Transfers Out - - - - (465) - Total Other Financing Sources (Uses) - - - - (465) - Net Change in Fund Balances (210) (1,324) 60 (533) 242 3,954 Fund Balances - Beginning of Year 1,038 8,223 411 4,129 3,910 4,796 Fund Balances - End of Year 828 $ 6,899$ 471 $ 3,596$ 4,152 $ 8,750 $

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
(In Thousands)

SPECIAL REVENUE FUNDS
137
Housing
Residual Receipt
Park
Acquisition and
Development Surf City "3"
ELM
Automation Fund
Traffic
Congestion
Relief
Traffic Impact
Fee Transportation
Total Special
Revenue Funds
-$ -$ -$ -$ -$ -$ 4,582$ 4,582$ - - 441 - - - - 441 - - - - - 7 - 79 36 275 42 29 39 110 113 3,003 760 - - - 1,805 - - 11,531 - 1,559 - 610 - 138 - 3,378 77 - - - 8 - - 85 873 1,834 483 639 1,852 255 4,695 23,099 - - 487 - - - - 487 - - - - - - - 24 - - - - - - - 1,051 - - - 271 - - - 271 - - - - - - - 846 - 8 - - - - - 1,282 - - - - - - - 52 - - - - 1,699 131 3,508 11,905 - 8 487 271 1,699 131 3,508 15,918 873 1,826 (4) 368 153 124 1,187 7,181 - - 1,169 - - - - 1,169 - - (612) - - - - (1,077) - - 557 - - - - 92 873 1,826 553 368 153 124 1,187 7,273 1,301 5,652 1,570 651 1,330 4,181 3,950 41,142 2,174$ 7,478 $ 2,123 $ 1,019 $ 1,483 $ 4,305 $ 5,137 $ 48,415 $

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES
(In Thousands)
(continued)

SPECIAL REVENUE FUNDS

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
138

REVENUES
Public Financing
Authority
Total Debt Service
Funds
Affordable Housing
In-Lieu
Lease Capital
Project
Sales Taxes - $ - $ - $ - $ Other Taxes - - - - Licenses and Permits - - 70 - Use of Money and Property (Loss) 45 45 470 356 Intergovernmental - - - - Charges for Current Service - - - - Other - - 1 - Total Revenues 45 45 541 356

EXPENDITURES
Current:

City Manager - - - - Finance 7 7 - - Community Development - - - - Fire - - - 4,635 Information Systems - - - - Police - - - - Community Services - - - - Library Services - - - - Public Works - - - - Debt Service:

Principal 2,250 2,250 - - Interest 705 705 - - Total Expenditures 2,962 2,962 - 4,635 Excess Of Revenues Over
(Under) Expenditures (2,917) (2,917) 541 (4,279) Other Financing Sources (Uses):

Transfers In 2,968 2,968 - - Transfers Out - - - - Total Other Financing Sources (Uses) 2,968 2,968 - - Net Change in Fund Balances 51 51 541 (4,279) Fund Balances - Beginning of Year 4,461 4,461 9,590 11,343 Fund Balances - End of Year 4,512 $ 4,512 $ 10,131 $ 7,064 $

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024

DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS
(In Thousands)
(continued)
139
Parking In-Lieu Sewer Development Technology
Total Capital Projects
Funds
Total Other
Governmental Funds
-$ - $ - $ - $ 4,582$ - - - - 441 244 - - 314 393 - 141 314 1,281 4,329 - 12 - 12 11,543 - 161 - 161 3,539 - 12 - 13 98 244 326 314 1,781 24,925 - - - - 487 - - - - 31 74 - - 74 1,125 - - - 4,635 4,635 - - 749 749 1,020 - - - - 846 - - - - 1,282 - - - - 52 - 826 - 826 12,731 - - - - 2,250 - - - - 705 74 826 749 6,284 25,164 170 (500) (435) (4,503) (239) - - 1,000 1,000 5,137 - - - - (1,077) - - 1,000 1,000 4,060 170 (500) 565 (3,503) 3,821 769 2,427 6,197 30,326 75,929 939$ 1,927$ 6,762 $ 26,823 $ 79,750 $

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
(In Thousands)
(continued)

CAPITAL PROJECT FUNDS
140
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 18 $ 18 $ Intergovernmental 250 529 229 (300) Total Revenues 250 529 247 (282) EXPENDITURES:

Current:

Public Works 388 1,605 457 1,148 Total Expenditures 388 1,605 457 1,148 Net Change in Fund Balance (138) (1,076) (210) 866 Fund Balance - Beginning of Year 1,038 1,038 1,038 - Fund Balance - End of Year 900 $ (38) $ 828 $ 866 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 189$ 189 $ Charges for Current Service 915 915 659 (256) Total Revenues 915 915 848 (67) EXPENDITURES:

Current:

Fire - 826 - 826 Police - 1,188 846 342 Community Services 503 2,602 1,274 1,328 Library Services -
299 52 247
Total Expenditures 503 4,915 2,172 2,743 Net Change in Fund Balance 412 (4,000) (1,324) 2,676 Fund Balance - Beginning of Year 8,223 8,223 8,223 - Fund Balance - End of Year 8,635 $ 4,223 $ 6,899 $ 2,676 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits 84 $ 84 $ 72 $ (12) $ Use of Money and Property - - 12 12 Total Revenues 84 84 84 - EXPENDITURES:

Current:

Finance 84
84 24 60
Total Expenditures 84 84 24 60 Net Change in Fund Balance - - 60 60 Fund Balance - Beginning of Year 411 411 411 - Fund Balance - End of Year 411 $ 411 $ 471 $ 60 $

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, 2024
(In Thousands)
Air Quality
Development Impact Fee
Disability Access
141
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 222$ 222 $ Charges for Current Service 200 200 412 212 Total Revenues 200 200 634 434 EXPENDITURES:

Current:

Public Works 424 4,229 1,167 3,062 Total Expenditures 424 4,229 1,167 3,062 Net Change in Fund Balance (224) (4,029) (533) 3,496 Fund Balance - Beginning of Year 4,129 4,129 4,129 - Fund Balance - End of Year 3,905 $ 100 $ 3,596$ 3,496 $ Strand Parking Structure
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property 1,615 $ 1,615 $ 1,758 $ 143 $ Total Revenues 1,615 1,615 1,758 143 EXPENDITURES:

Current:

Community Development 1,244
1,368 1,051 317
Total Expenditures 1,244 1,368 1,051 317 OTHER FINANCING SOURCES (USES):

Transfers Out (465) (465) (465) - Total Other Financing Sources (Uses) (465) (465) (465) - Net Change in Fund Balance (94) (218) 242 460 Fund Balance - Beginning of Year 3,910 3,910 3,910 - Fund Balance - End of Year 3,816 $ 3,692 $ 4,152 $ 460 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 160 $ 160 $ Intergovernmental 8,612 8,612 8,737 125 Total Revenues 8,612 8,612 8,897 285 EXPENDITURES:

Current:

Public Works 7,659
12,342 4,943 7,399
Total Expenditures 7,659 12,342 4,943 7,399 OTHER FINANCING SOURCES (USES):

Transfers Out (106) - - - Total Other Financing Sources (Uses) (106) - - - Net Change in Fund Balance 847 (3,730) 3,954 7,684 Fund Balance - Beginning of Year 4,796 4,796 4,796 - Fund Balance - End of Year 5,643 $ 1,066 $ 8,750 $ 7,684 $ 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, 2024
(In Thousands)
Gas Tax
142
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 36 $ 36 $ Intergovernmental - - 760 760 Other 30 30 77 47 Total Revenues 30 30 873 843 EXPENDITURES:

Current:

Community Development 30 31 - 31 Total Expenditures 30 31 - 31 Net Change in Fund Balance - (1) 873 874 Fund Balance - Beginning of Year 1,301 1,301 1,301 - Fund Balance - End of Year 1,301 $ 1,300 $ 2,174 $ 874 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) - $ - $ 275$ 275 $ Charges for Current Service 400 400 1,559 1,159 Total Revenues 400 400 1,834 1,434 EXPENDITURES:

Current:

Community Services 554
562 8 554
Total Expenditures 554 562 8 554 Net Change in Fund Balance (154) (162) 1,826 1,988 Fund Balance - Beginning of Year 5,652 5,652 5,652 - Fund Balance - End of Year 5,498 $ 5,490 $ 7,478 $ 1,988 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Other Taxes 490 $ 490 $ 441 $ (49) $ Use of Money and Property - - 42 42 Total Revenues 490 490 483 (7) EXPENDITURES:

Current:

City Manager 490
707 487 220
Total Expenditures 490 707 487 220

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES - (217) (4) 213 OTHER FINANCING SOURCES (USES):

Transfers In - 1,169 1,169 - Transfers Out - (764) (612) 152 Total Other Financing Sources (Uses) - 405 557 152 Net Change in Fund Balance - 188 553 365 Fund Balance - Beginning of Year 1,570 1,570 1,570 - Fund Balance - End of Year 1,570 $ 1,758 $ 2,123 $ 365 $ Surf City "3"

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND
FOR THE YEAR ENDED JUNE 30, 2024
(In Thousands)
Park Acquisition and Development

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

OTHER GOVERNMENTAL FUNDS
Housing Residual Receipt
143
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 29 $ 29 $ Charges for Current Service 400 400 610 210 Total Revenues 400 400 639 239 EXPENDITURES:

Current:

Information Systems 435 435 271 164 Total Expenditures 435 435 271 164 OTHER FINANCING SOURCES (USES):

Transfers Out (18) - - - Total Other Financing Sources (Uses) (18) - - - Net Change in Fund Balance (53) (35) 368 403 Fund Balance - Beginning of Year 651 651 651 - Fund Balance - End of Year 598 $ 616 $ 1,019$ 403 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 39 $ 39 $ Intergovernmental 1,971 1,971 1,805 (166) Other - - 8 8 Total Revenues 1,971 1,971 1,852 (119) EXPENDITURES:

Current:

Public Works 2,140
3,077 1,699 1,378
Total Expenditures 2,140 3,077 1,699 1,378 Net Change in Fund Balance (169) (1,106) 153 1,259 Fund Balance - Beginning of Year 1,330 1,330 1,330 - Fund Balance - End of Year 1,161 $ 224 $ 1,483$ 1,259 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits - $ - $ 7 $ 7 $ Use of Money and Property - - 110 110 Charges for Current Service 100 100 138 38 Total Revenues 100 100 255 155 EXPENDITURES:

Current:

Public Works 496
3,170 131 3,039
Total Expenditures 496 3,170 131 3,039 Net Change in Fund Balance (396) (3,070) 124 3,194 Fund Balance - Beginning of Year 4,181 4,181 4,181 - Fund Balance - End of Year 3,785 $ 1,111 $ 4,305 $ 3,194 $ 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, 2024

SCHEDULE OF REVENUES, EXPENDITURES, AND
144
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Sales Taxes 4,171 $ 4,171 $ 4,582 $ 411 $ Use of Money and Property - - 113 113 Total Revenues 4,171 4,171 4,695 524 EXPENDITURES:

Current:

Public Works 3,324 7,866 3,508 4,358 Total Expenditures 3,324 7,866 3,508 4,358 OTHER FINANCING SOURCES (USES):

Transfers Out 176 - - - Total Other Financing Sources (Uses) 176 - - - Net Change in Fund Balance 1,023 (3,695) 1,187 4,882 Fund Balance - Beginning of Year 3,950 3,950 3,950 - Fund Balance - End of Year 4,973 $ 255 $ 5,137$ 4,882 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 45 $ 45 $ Total Revenues - - 45 45 EXPENDITURES:

Current:

Finance 12 12 7 5 Debt Service:

Principal 2,250 2,250 2,250 - Interest 705
705 705 -
Total Expenditures 2,967 2,967 2,962 5 OTHER FINANCING SOURCES (USES):

Transfers In 2,968 2,968 2,968 - Total Other Financing Sources (Uses) 2,968 2,968 2,968 - Net Change in Fund Balance 1 1 51 50 Fund Balance - Beginning of Year 4,461 4,461 4,461 - Fund Balance - End of Year 4,462 $ 4,462 $ 4,512 $ 50 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits 2,901 $ 2,901 $ 70 $ (2,831)$ Use of Money and Property - - 470 470 Other - - 1 1 Total Revenues 2,901 2,901 541 (2,360) Net Change in Fund Balance 2,901 2,901 541 (2,360) Fund Balance - Beginning of Year 9,590 9,590 9,590 - Fund Balance - End of Year 12,491 $ 12,491 $ 10,131 $ (2,360) $ (In Thousands)

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2024

OTHER GOVERNMENTAL FUNDS
Transportation
Public Financing Authority
Affordable Housing In-Lieu
145
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 356$ 356 $ Total Revenues - - 356 356 EXPENDITURES:

Current:

Fire - 10,818 4,635 6,183 Total Expenditures - 10,818 4,635 6,183 Net Change in Fund Balance - (10,818) (4,279) 6,539 Fund Balance - Beginning of Year 11,343 11,343 11,343 - Fund Balance - End of Year 11,343 $ 525 $ 7,064$ 6,539 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Licenses and Permits 54 $ 54 $ 244 $ 190 $ Total Revenues 54 54 244 190 EXPENDITURES:

Current:

Community Development 50
154 74 80
Total Expenditures 50 154 74 80 Net Change in Fund Balance 4 (100) 170 270 Fund Balance - Beginning of Year 769 769 769 - Fund Balance - End of Year 773 $ 669 $ 939 $ 270 $ REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 141$ 141 $ Intergovernmental 12 12 12 - Charges for Current Service 155 155 161 6 Other - - 12 12 Total Revenues 167 167 326 159 EXPENDITURES:

Current:

Public Works 800
1,480 826 654
Total Expenditures 800 1,480 826 654 Net Change in Fund Balance (633) (1,313) (500) 813 Fund Balance - Beginning of Year 2,427 2,427 2,427 - Fund Balance - End of Year 1,794 $ 1,114 $ 1,927 $ 813 $ Sewer Development
Parking In-Lieu
(In Thousands)
Lease Capital Project

OTHER GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
146
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property (Loss) - $ - $ 314$ 314 $ Total Revenues - - 314 314 EXPENDITURES:

Current:

Information Systems - 3,004 749 2,255 Total Expenditures - 3,004 749 2,255 OTHER FINANCING SOURCES (USES):

Transfers In 1,000 1,000 1,000 - Total Other Financing Sources (Uses) 1,000 1,000 1,000 - Net Change in Fund Balance 1,000 (2,004) 565 2,569 Fund Balance - Beginning of Year 6,197 6,197 6,197 - Fund Balance - End of Year 7,197 $ 4,193 $ 6,762 $ 2,569 $ Technology

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, 2024
(In Thousands)
147
LMIHAF Capital Projects Fund
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property 200 $ 200 $ 790 $ 590 $ Intergovernmental 3,801 3,801 3,801 - Total Revenues 4,001 4,001 4,591 590 EXPENDITURES:

Current:

Community Development 25 2,433 1,600 833 Total Expenditures 25 2,433 1,600 833 Excess of Revenues Over (Under) Expenditures 3,976 1,568 2,991 1,423 Net Change in Fund Balance 3,976 1,568 2,991 1,423 Fund Balance - Beginning of Year 4,919 4,919 4,919 - Fund Balance - End of Year 8,895$ 6,487 $ 7,910 $ 1,423 $ Pension Liability Debt Service Fund
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Property Taxes 7,000 $ 7,000 $ 8,880 $ 1,880 $ Use of Money and Property - - 767 767 Charges for Current Service 5,362 20,933 21,073 140 Other -
Total Revenues 12,362 27,933 30,720 2,787 EXPENDITURES:

Current:

Finance - - 5 (5) Debt Service:

Principal 13,575 13,575 12,640 935 Interest 8,995 8,995 8,438 557 Total Expenditures 22,570 22,570 21,083 1,487 Excess of Revenues Over (Under) Expenditures (10,208) 5,363 9,637 4,274 OTHER FINANCING SOURCES (USES):

Transfers In 17,070 1,500 1,500 - Total Other Financing Sources (Uses) 17,070 1,500 1,500 - Net Change in Fund Balance 6,862 6,863 11,137 4,274 Fund Balance - Beginning of Year 24,982 24,982 24,982 - Fund Balance - End of Year 31,844 $ 31,845 $ 36,119 $ 4,274 $

CITY OF HUNTINGTON BEACH
(In Thousands)

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
148
REVENUES: Original Budget Final Budget Actual
Variance with
Final Budget
Positive
(Negative)
Use of Money and Property - $ - $ 1,474$ 1,474 $ Intergovernmental - - 50 50 Other - - 67 67 Total Revenues - - 1,591 1,591 EXPENDITURES:

Current:

Community Services 158 225 219 6 Public Works 14,393 47,792 22,122 25,670 Total Expenditures 14,551 48,017 22,341 25,676 Excess of Revenues Over (Under) Expenditures (14,551) (48,017) (20,750) 27,267 OTHER FINANCING SOURCES (USES):

Transfers In 14,900 16,749 16,749 - Transfers Out (214) - - - Total Other Financing Sources (Uses) 14,686 16,749 16,749 - Net Change in Fund Balance 135 (31,268) (4,001) 27,267 Fund Balance - Beginning of Year 33,398 33,398 33,398 - Fund Balance - End of Year 33,533$ 2,130 $ 29,397 $ 27,267 $ (In Thousands)
Infrastructure

CITY OF HUNTINGTON BEACH

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - BUDGET AND ACTUAL

MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
149

City of Huntington Beach
Internal Service Funds

Internal Services Funds are used to accumulate and allocate costs internally among the City’s various functions.

x The Self Insurance Workers’ Comp Fund accounts for the City’s self insurance workers’ compensation program. x The Self Insurance General Liability Fund accounts for the City’s self insurance general liability program. x The Equipment Replacement Fund accounts for the City’s equipment replacement needs.

150
Self Insurance
Workers' Comp
Self Insurance
General Liability
Equipment
Replacement
Fund
Internal Service
Fund Total
ASSETS
Current Assets:

Cash and Investments 24,888 $ 15,712 $ 14,274 $ 54,874 $ Other Receivables, Net 1,233 102 57 1,392 Prepaids 600 - 1,895 2,495 Total Current Assets 26,721 15,814 16,226 58,761 Non-Current Assets:

Net Other Postemployment Benefits Asset 17 8 - 25 Total Non-Current Assets 17 8 - 25 Capital Assets:

Buildings and Improvements - - 67 67 Machinery and Equipment - - 16,769 16,769 Less Accumulated Depreciation - - (5,634) (5,634) Total Capital Assets - - 11,202 11,202 Total Assets 26,738 15,822 27,428 69,988

DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 369 - - 369 Deferred Outflows Related to Other Postemployment Benefits 19 8 - 27 Total Deferred Outflows of Resources 388 8 - 396 Total Assets and Deferred Outflows of Resources 27,126 15,830 27,428 70,384

LIABILITIES
Current Liabilities:

Accounts Payable 585 10 580 1,175 Accrued Payroll 4 6 - 10 Current Portion of Claims Payable 10,332 4,031 - 14,363 Current Portion of Compensated Absences 13 3 - 16 Long-Term Obligations Due Within One Year 43 - - 43 Total Current Liabilities 10,977 4,050 580 15,607 Non-Current Liabilities:

Compensated Absences 35 8 - 43 Long-Term Obligations Due in More than One Year 900 - - 900 Net Pension Liability 600 - - 600 Claims Payable 40,999 5,733 - 46,732 Total Non-Current Liabilities 42,534 5,741 - 48,275 Total Liabilities 53,511 9,791 580 63,882

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 1 - - 1 Deferred Inflows Related to Other Postemployment Benefits 29 13 - 42 Total Deferred Inflows of Resources 30 13 - 43

NET POSITION
Net Investment in Capital Assets 10,332 4,031 11,202 25,565 Restricted for:

OPEB Benefits 17 8 - 25 Unrestricted (36,764) 1,987 15,646 (19,131) Total Net Position (26,415) 6,026 26,848 6,459 Total Liabilities, Deferred Inflows
of Resources, and Net Position 27,126 $ 15,830 $ 27,428 $ 70,384 $ Governmental Activities

CITY OF HUNTINGTON BEACH

STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS
June 30, 2024
(In Thousands)
151
Self Insurance
Workers' Comp
Self Insurance
General Liability
Equipment
Replacement
Fund
Internal Service
Fund Total

OPERATING REVENUES
Fees and Charges for Service 15,586 $ 15,569 $ 5,605 $ 36,760 $ Other 2,081 5,106 2,171 9,358 Total Operating Revenues 17,667 20,675 7,776 46,118

OPERATING EXPENSES
Supplies and Operations 2,106 358 1,905 4,369 Claims and Judgments 18,541 6,423 - 24,964 Depreciation - - 2,019 2,019 Total Operating Expenses 20,647 6,781 3,924 31,352 Operating Income (Loss) (2,980) 13,894 3,852 14,766

NON-OPERATING REVENUES (EXPENSES)
Investment Income (Loss) 933 552 496 1,981 Interest Expense (26) - - (26) Total Non-Operating Revenues (Expenses) 907 552 496 1,955 Income (Loss) Before Transfers (2,073) 14,446 4,348 16,721 Change in Net Position (2,073) 14,446 4,348 16,721 Net Position - Beginning of Year (24,342) (8,420) 22,500 (10,262) Net Position - Beginning of Year as Restated (24,342) (8,420) 22,500 (10,262) Net Position - End of Year (26,415)$ 6,026 $ 26,848 $ 6,459 $

CITY OF HUNTINGTON BEACH

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

INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
(In Thousands)
Governmental Activities
152
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 16,510 $ 20,613 $ 7,768 $ 44,891 $ Cash Paid to Employees for Services (198) (156) - (354) Cash Paid to Suppliers of Goods and Services (12,791) (19,481) (2,087) (34,359) Net Cash and Investment Provided (Used) by
Operating Activities 3,521 976 5,681 10,178

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Debt Service (43) - - (43) Interest Paid (26) - - (26) Net Cash and Investments Provided (Used) by
Noncapital Financing Activities (69) - - (69)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Purchase of Capital Assets -
- (3,812) (3,812) Net Cash and Investments Provided (Used) by
Capital and Related Financing Activities - - (3,812) (3,812)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment (Loss) 933 552 496 1,981 Net Cash and Investments Provided (Used) by
Investing Activities 933 552 496 1,981 Net Increase in Cash and Investments 4,385 1,528 2,365 8,278 Cash and Investments - Beginning of Year 20,503 14,184 11,909 46,596 Cash and Investments - End of Year 24,888$ 15,712 $ 14,274 $ 54,874 $

RECONCILIATION OF OPERATING

INCOME (LOSS) TO NET CASH AND INVESTMENTS

PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) (2,980) $ 13,894 $ 3,852 $ 14,766 $ Adjustments to Reconcile Operating
Income (Loss) to Net Cash and Investments
Provided (Used) by Operating Activities
Depreciation - - 2,019 2,019 (Increase) in Other Receivables, Net (1,157) (62) (8) (1,227) Decrease in Prepaids - - (514) (514) (Increase) in Net Other Postemployment Benefits Asset (10) (5) - (15) Increase (Decrease) in Accounts Payable 232 (94) 332 470 Increase in Accrued Payroll - 2 - 2 Increase (Decrease) in Claims Payable 7,244 (12,770) - (5,526) Increase in Compensated Absences - 7 - 7 Decrease in Deferred Pension Outflow 97 - - 97 Increase in Net Pension Liability 87 - - 87 Decrease in Deferred Other Postemployment Benefits Outflow 3 2 - 5 Increase in Deferred Other Postemployment Benefits Inflow 5 2 - 7 Net Cash and Investments Provided (Used)
by Operating Activities 3,521$ 976 $ 5,681$ 10,178 $

NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES
There were no noncash investing, capital, or financing activities during the year ended June 30, 2024.

Governmental Activities

CITY OF HUNTINGTON BEACH

STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
(In Thousands)
153

City of Huntington Beach
Fiduciary Funds

Fiduciary Funds account for assets held by the City as a custodian for other organizations or individuals.

x The Community Facilities Districts Funds accounts for the debt service activity of the City’s three community facilities districts.
x The Huntington Beach Business Improvement District Fund accounts for the activities of the City’s business improvement district.
x The Bella Terra Parking Structure Fund accounts for the activities of the Bella Terra Parking Structure.

154
Custodial Funds
ASSETS:

Community
Facilities
Districts
Business
Improvement
Districts
Parking
Structure - Bella
Terra
Total Custodial
Funds
Current Assets:

Cash and Investments 1,463 $ 806 $ $ 1,793 $ 4,062 Cash with Fiscal Agent 1,638 - 1,719 3,357 Accounts Receivable, Net 16 743 17 776 Total Assets 3,117 1,549 3,529 8,195 LIABILITIES:

Current Liabilities:

Accounts Payable - 1,312 50 1,362 Total Current Liabilities - 1,312 50 1,362 Total Liabilities - 1,312 50 1,362

NET POSITION
Restricted for:

Restricted for Individuals and Organizations 3,117 237 3,479 6,833 Total Net Position 3,117$ 237 $ 3,479$ 6,833 $

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
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 1,559 $ - $ - $ 1,559$ Business Improvement District Taxes - 6,961 - 6,961 Parking Assessments - - 2,635 2,635 Interest Income 87 - 112 199 Total Additions 1,646 6,961 2,747 11,354

DEDUCTIONS
Administrative Costs 20 - - 20 Payments to other Organizations - 6,989 1,153 8,142 Interest and Fiscal Agency Expenses 580 - 693 1,273 Principal 925 - 965 1,890 Total Deductions 1,525 6,989 2,811 11,325 Change in Net Position 121 (28) (64) 29 Net Position - Beginning of Year 2,996 265 3,543 6,804 Net Position - End of Year 3,117 $ 237 $ 3,479$ 6,833 $

CITY OF HUNTINGTON BEACH

COMBINING STATEMENT OF FIDUCIARY FUND ASSETS AND LIABILITIES

FIDUCIARY FUNDS
JUNE 30, 2024
155

City of Huntington Beach
Statistical Section

This part of the City of Huntington 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 the 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 derived from the annual comprehensive financial reports for the relevant year.

156
Governmental Activities 2024 2023 2022 2021 2020
Net investment in capital assets 751,578$ 727,051$ 712,289$ 699,204$ 673,498$ Restricted 127,535 82,564 68,460 65,755 79,926 Unrestricted (179,145) (173,034) (223,438) (275,159) (274,523) Total Governmental Activities Net Position 699,968$ 636,581 $ 557,311 $ 489,800 $ 478,901 $ Business-Type Activities
Net investment in capital assets 141,232$ 141,581 $ 143,998 $ 142,469 $ 142,785 $ Restricted 24,394 21,213 19,309 20,332 22,248 Unrestricted 31,190 36,684 34,120 39,129 38,482 Total Business-Type Activities Net Position 196,816$ 199,478 $ 197,427 $ 201,930 $ 203,515 $ Primary Government
Net investment in capital assets 892,810$ 868,632 $ 856,287 $ 841,673 $ 816,283 $ Restricted 151,929 103,777 87,769 86,087 102,174 Unrestricted (147,955) (136,350) (189,318) (236,030) (236,041) Total Primary Government Net Position 896,784$ 836,059 $ 754,738 $ 691,730 $ 682,416 $ Expenses:

Governmental Activities: 2024 2023 2022 2021 2020
City Council 441 $ 429 $ 382 $ 423 $ 405 $ City Manager 7,699 5,780 5,412 11,163 3,328 City Treasurer 2,124 396 259 340 317 City Attorney 4,156 3,248 2,183 3,140 3,136 City Clerk 1,674 1,370 1,060 1,147 949 Finance 6,499 6,211 5,581 6,828 6,661 Human Resources**** 2,786 - - - - Community Development* 19,124 20,550 11,634 19,716 15,722 Fire 78,253 71,737 52,808 65,960 62,840 Information Services 8,682 8,565 6,469 6,230 8,643 Police 107,440 89,430 73,964 102,415 97,204 Community Services 15,176 13,389 11,517 11,365 12,539 Library Services 7,409 7,225 5,212 6,181 5,776 Public Works 51,560 49,151 42,598 40,270 45,834 Non-Departmental*** - - - - - Interest on Long-Term Debt 9,710 9,587 9,548 2,706 1,686 Total Governmental Activities 322,733 287,068 228,627 277,884 265,040 Business-Type Activities
Water Utility 52,397 47,974 44,182 46,054 44,463 Sewer Service 12,213 11,422 10,390 9,284 9,828 Refuse Collection 15,543 14,935 13,738 12,936 12,609 Hazmat Service 194 103 236 241 235 Total Business-Type Activities 80,347 74,434 68,546 68,515 67,135 Total Business and Government Type Activities 403,080 $ 361,502 $ 297,173 $ 346,399 $ 332,175 $ * 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. ** 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
157
Governmental Activities 2019 2018** 2017 2016 2015
Net investment in capital assets 664,281$ 650,466$ 646,336$ 624,180$ 615,512$ Restricted 66,089 58,537 41,888 41,555 52,270 Unrestricted (251,022) (254,528) (262,874) (222,863) (222,787) Total Governmental Activities Net Position 479,348$ 454,475 $ 425,350 $ 442,872 $ 444,995 $ Business-Type Activities
Net investment in capital assets 145,696$ 143,954 $ 140,478 $ 142,566 $ 142,616 $ Restricted 21,153 25,886 30,444 32,049 28,096 Unrestricted 36,747 27,492 22,228 21,997 28,476 Total Business-Type Activities Net Position 203,596$ 197,332 $ 193,150 $ 196,612 $ 199,188 $ Primary Government
Net investment in capital assets 809,977$ 794,420 $ 786,814 $ 766,746 $ 758,128 $ Restricted 87,242 84,423 72,332 73,604 80,366 Unrestricted (214,275) (227,036) (240,646) (200,866) (194,311) Total Primary Government Net Position 682,944$ 651,807 $ 618,500 $ 639,484 $ 644,183 $ Expenses:

Governmental Activities: 2019 2018** 2017 2016 2015
City Council 360 $ 218 $ 347 $ 321 $ 270 $ City Manager 4,501 2,063 4,691 3,849 3,302 City Treasurer 246 101 216 208 158 City Attorney 2,886 1,536 3,307 2,598 2,284 City Clerk 976 475 889 806 855 Finance 6,245 3,455 6,201 5,765 5,208 Human Resources**** 6,261 4,760 5,693 6,814 5,169 Community Development* 6,144 4,301 7,576 7,208 6,605 Fire 56,494 26,688 52,941 47,965 42,162 Information Services 7,530 4,375 7,047 6,852 6,552 Police 87,355 42,109 84,786 74,943 64,048 Community Services 13,369 6,768 15,558 9,935 13,809 Library Services 5,206 2,890 5,064 4,611 4,246 Public Works 40,803 23,898 35,373 31,791 27,979 Non-Departmental*** - 18,164 29,368 35,240 24,080 Interest on Long-Term Debt 1,823 1,467 2,063 2,119 2,245 Total Governmental Activities 240,199 143,268 261,120 241,025 208,972 Business-Type Activities
Water Utility 43,405 28,414 45,940 41,643 38,614 Sewer Service 9,442 6,127 9,351 8,729 8,192 Refuse Collection 12,051 8,916 10,821 11,277 11,308 Hazmat Service 234 117 224 244 204 Total Business-Type Activities 65,132 43,574 66,336 61,893 58,318 Total Business and Government Type Activities 305,331 $ 186,842 $ 327,456 $ 302,918 $ 267,290 $ *** 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. Human Resources was seperated in Fiscal Year ended June 30, 2024.

CITY OF HUNTINGTON BEACH

CITY OF HUNTINGTON BEACH

NET POSITION BY COMPONENT - LAST TEN FISCAL YEARS
(In Thousands)
(continued)
Fiscal Year Ended
September 30, June 30,

CHANGES IN NET POSITION - LAST TEN FISCAL YEARS
(In Thousands)
(continued)
Fiscal Year Ended
June 30, September 30,
158
Program Revenues:

Governmental Activities: 2024 2023 2022 2021 2020
Charges for Services
City Council 175 $ 167 $ 162 $ 162 $ 177 $ City Manager 4,057 4,976 4,131 4,208 5,315 City Treasurer 161 153 149 149 163 City Attorney 6 5 5 6 7 City Clerk 508 299 269 30 220 Finance 3,280 3,125 3,036 3,055 3,302 Human Resources**** 7,670 - - - - Community Development* 11,102 18,817 10,953 8,353 10,037 Fire 20,228 14,166 13,401 8,877 10,122 Information Services 654 623 604 610 636 Police 5,558 6,139 6,687 6,477 5,329 Community Services 24,713 22,545 21,117 15,558 17,631 Library Services 229 388 302 153 266 Public Works 8,570 11,301 7,235 6,045 6,614 Non-Departmental*** - - - - - Total Charges for Services 86,911 82,704 68,051 53,683 59,819 Operating Grants 11,678 43,005 9,301 6,013 8,141 Capital Grants 17,266 11,202 8,537 10,192 14,483 Total Governmental Activities Program Revenue 115,855 136,911 85,889 69,888 82,443 Business-Type Activities:

Water Utility 45,739 48,934 43,590 42,523 40,518 Sewer Service 11,798 10,982 10,791 10,828 10,900 Refuse Collection 15,637 14,899 13,675 13,014 12,573 Hazmat Service 302 276 276 266 279 Total Business-Type Activities Program Revenues 73,476 75,091 68,332 66,631 64,270 Total Primary Government Program Revenue 189,331 212,002 154,221 136,519 146,713 Net (Expense) Revenue:

Governmental Activities (206,878) (150,157) (142,738) (207,996) (182,597) Business-Type Activities (6,871) 657 (214) (1,884) (2,865) Total Net (Expense) Revenue (213,749) (149,500) (142,952) (209,880) (185,462) General Revenue and Other Changes in Net Position
Governmental Activities:

Property Taxes 114,630 109,467 102,539 99,958 94,263 Sales Taxes 56,003 57,164 57,652 51,162 44,616 Utility Taxes 23,283 22,558 19,528 18,374 18,149 Other Taxes 27,024 32,418 26,134 17,293 18,635 Use of Money and Property 12,361 5,153 (1,895) 4,399 3,208 From Other Agencies 5,883 3,225 4,631 22,000 3,317 Gain on Sale of Property - (520) 1,699 - - Gain from Elimination of Allowances 31,136 - - - - Other - - - - - Transfers (55) (38) (39) (38) (38) Total Governmental Activities General Revenues 270,265 229,427 210,249 213,148 182,150 Business-Type Activities:

Use of Money and Property 4,154 1,356 (4,328) 261 2,746 Transfers 55 38 39 38 38 Total Business-Type Activities General Revenues 4,209 1,394 (4,289) 299 2,784 Total General Revenues and Transfers 274,474 230,821 205,960 213,447 184,934 Changes in Net Position - Governmental Activities 63,387 79,270 67,511 5,152 (447) Changes in Net Position - Business-Type Activities (2,662) 2,051 (4,503) (1,585) (81) Total Changes in Net Position 60,725 81,321 63,008 3,567 (528) Net Position - Beginning of Year 836,059 754,738 691,730 682,416 682,944 Prior Period Adjustment - Governmental Activities - - - 5,747 - Prior Period Adjustment - Business-Type Activities - - - - - Net Position - Beginning of Year as restated 836,059 754,738 691,730 688,163 682,944 Net Position - End of Year 896,784$ 836,059 $ 754,738 $ 691,730 $ 682,416 $ * 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. ** 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.

Fiscal Year Ended

CHANGES IN NET POSITION - LAST TEN FISCAL YEARS
June 30,

CITY OF HUNTINGTON BEACH
(In Thousands)
159
Program Revenues:

Governmental Activities: 2019 2018** 2017 2016 2015
Charges for Services
City Council 149 $ 91 $ 108 $ 116 $ 71 $ City Manager 3,300 2,374 3,515 3,029 2,994 City Treasurer 135 81 100 101 639 City Attorney 7 4 5 4 143 City Clerk 327 229 257 201 199 Finance 2,899 1,746 2,047 2,277 1,353 Human Resources**** 751 373 654 513 1,263 Community Development* 7,459 5,448 7,448 9,252 10,670 Fire 9,831 9,104 10,296 9,894 8,625 Information Services 628 381 501 521 834 Police 6,044 4,703 4,968 5,958 5,512 Community Services 23,530 19,245 21,693 18,853 18,569 Library Services 308 237 476 408 495 Public Works 6,368 4,392 5,392 5,733 6,474 Non-Departmental*** - 916 1,116 1,290 327 Total Charges for Services 61,736 49,324 58,576 58,150 58,168 Operating Grants 6,644 3,976 7,329 4,723 7,458 Capital Grants 8,361 6,055 3,408 5,939 9,809 Total Governmental Activities Program Revenue 76,741 59,355 69,313 68,812 75,435 Business-Type Activities:

Water Utility 43,958 29,530 39,938 35,765 35,350 Sewer Service 11,868 8,362 10,854 11,280 11,239 Refuse Collection 12,022 8,820 11,282 11,215 11,221 Hazmat Service 276 25 287 235 222 Total Business-Type Activities Program Revenues 68,124 46,737 62,361 58,495 58,032 Total Primary Government Program Revenue 144,865 106,092 131,674 127,307 133,467 Net (Expense) Revenue:

Governmental Activities (163,458) (83,913) (191,807) (172,213) (133,537) Business-Type Activities 2,992 3,163 (3,975) (3,398) (286) Total Net (Expense) Revenue (160,466) (80,750) (195,782) (175,611) (133,823) General Revenue and Other Changes in Net Position
Governmental Activities:

Property Taxes 89,124 61,185 82,925 87,128 82,615 Sales Taxes 47,437 33,844 43,551 34,289 33,063 Utility Taxes 18,788 14,014 19,303 19,482 20,229 Other Taxes 20,227 14,883 17,991 17,313 16,464 Use of Money and Property 8,746 2,158 3,370 3,618 5,551 From Other Agencies 4,046 2,263 3,896 4,397 5,653 Gain on Sale of Property - - - - - Gain from Elimination of Allowances - - - - - Other - 2,811 2,438 5,693 4,440 Transfers (37) (332) (51) (38) 35 Total Governmental Activities General Revenues 188,331 130,826 173,423 171,882 168,050 Business-Type Activities:

Use of Money and Property 3,235 279 462 939 1,281 Transfers 37 332 51 38 (35) Total Business-Type Activities General Revenues 3,272 611 513 977 1,246 Total General Revenues and Transfers 191,603 131,437 173,936 172,859 169,296 Changes in Net Position - Governmental Activities 24,873 46,913 (18,384) (331) 34,513 Changes in Net Position - Business-Type Activities 6,264 3,774 (3,462) (2,421) 960 Total Changes in Net Position 31,137 50,687 (21,846) (2,752) 35,473 Net Position - Beginning of Year 651,807 618,500 639,484 642,236 964,254 Prior Period Adjustment - Governmental Activities - (17,788) 862 - (333,677) Prior Period Adjustment - Business-Type Activities - 408 - - (23,814) Net Position - Beginning of Year as restated 651,807 601,120 640,346 642,236 606,763 Net Position - End of Year 682,944$ 651,807 $ 618,500 $ 639,484 $ 642,236 $ *** 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. Human Resources was seperated in Fiscal Year ended June 30, 2024.
(In Thousands)
Fiscal Year Ended
June 30, September 30,
(continued)

CHANGES IN NET POSITION - LAST TEN FISCAL YEARS

CITY OF HUNTINGTON BEACH
160
2024 2023 2022 2021 2020
General Fund:

Nonspendable 148$ 51$ 82$ 115$ 120$ Restricted 21,670 19,578 14,623 13,561 9,320 Committed 52,023 51,230 26,665 25,565 25,010 Assigned 58,478 55,678 61,454 55,368 45,638 Total General Fund 132,319 $ 126,537 $ 102,824 $ 94,609 $ 80,088 $ Other Governmental Funds:

Nonspendable - $ - $ - $ 105$ 50 $ Restricted 105,569 87,866 75,774 70,161 71,671 Committed 43,557 45,820 28,559 26,857 21,735 Assigned 6,762 6,197 3,021 3,280 3,527 Unassigned - - (4,311) - - Total Other Governmental Funds 155,888$ 139,883 $ 103,043 $ 100,403 $ 96,983 $ 2019 2018 2017 2016 2015
General Fund:

Nonspendable 23 $ 41 $ - $ - $ 4,479$ Restricted 8,154 6,384 2,671 2,637 2,871 Committed 25,011 25,011 25,011 25,011 25,011 Assigned 45,825 34,464 33,498 35,199 32,431 Unassigned - 2,734 - - - Total General Fund 79,013 $ 68,634 $ 61,180 $ 62,847 $ 64,792 $ Other Governmental Funds:

Nonspendable 64 $ 726 $ - $ - $ - $ Restricted 59,213 52,742 40,588 40,293 45,515 Committed 20,308 20,800 17,686 21,368 21,659 Assigned 3,614 2,701 826 838 161 Total Other Governmental Funds 83,199$ 76,969 $ 59,100 $ 62,499 $ 67,335 $ Fiscal Year Ended September 30,Fiscal Year Ended
June 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,
161

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162
2024 2023 2022 2021 2020
REVENUES:

Property Taxes 114,630$ 109,467$ 102,539$ 99,958$ 94,263$ Sales Taxes 56,003 57,164 57,652 51,162 44,616 Utility Taxes 23,283 22,558 19,528 18,374 18,149 Other Taxes 27,465 40,738 33,720 25,745 24,578 Licenses and Permits 10,593 15,688 9,596 8,213 11,266 Fines and Forfeitures 3,666 3,945 5,144 4,619 3,403 From Use of Money and Property 37,769 22,726 14,365 19,163 27,863 From Other Agencies 38,922 47,426 13,060 29,836 11,309 Charges for Current Service/Other Revenue 59,496 66,363 52,809 27,428 34,772 TOTAL REVENUES 371,827 386,075 308,413 284,498 270,219

EXPENDITURES
Current:

City Council 464 453 426 1,043 394 City Manager 7,117 6,501 5,265 15,976 4,342 City Treasurer 2,059 417 326 837 297 City Attorney 3,994 3,404 2,995 7,714 2,898 City Clerk 1,653 1,442 1,295 2,810 886 Finance 5,999 7,420 7,259 16,173 6,200 Human Resources***** 2,636 - - - - Community Development** 19,412 21,569 14,412 39,212 14,692 Fire 76,247 72,499 62,880 149,726 56,477 Information Systems 8,916 8,563 7,871 19,095 8,473 Police 103,468 97,000 93,976 232,438 87,682 Community Services 14,179 16,610 18,455 25,064 14,429 Library Services 7,235 7,244 6,300 14,099 5,199 Public Works 69,169 62,161 50,158 88,007 47,655 Non-Departmental**** - - - - - Capital Outlay*** - - - - - Debt Service:

Principal 20,375 18,799 15,918 3,983 5,122 Interest 9,728 9,542 11,299 937 1,748 TOTAL EXPENDITURES 352,651 333,624 298,835 617,114 256,494

EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER) EXPENDITURES 19,176 52,451 9,578 (332,616) 13,725 OTHER FINANCING SOURCES (USES):

Transfers In 28,764 65,369 21,642 13,058 10,009 Issuance of Long-Term Debt - - - 372,010 1,172 Issuance Premium - - - 1,743 - Issuance Discount - - - (649) - Payments to Escrow - - - (28,256) - Lease (as Lessee) - 398 448 - - Issuance of Finance Purchase Agreement - 7,742 868 - - Subscription Based IT Arrangement 2,666 - - - - Transfers Out (28,819) (65,407) (21,681) (13,096) (10,047) TOTAL OTHER FINANCING SOURCES (USES) 2,611 8,102 1,277 344,810 1,134 INCREASE (DECREASE) IN FUND BALANCES 21,787$ 60,553 $ 10,855 $ 12,194 $ 14,859 $

DEBT SERVICE AS A PERCENTAGE OF
NON-CAPITAL EXPENDITURES 9.7% 9.7% 10.1% 0.9% 3.0%
* The 2017/18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting p eriod 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 renam ed to Community Development in Fiscal Year ended September 30, 2016. *** 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.

Fiscal Year Ended
June 30,

CITY OF HUNTINGTON BEACH

CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS
(In Thousands)
(Modified Accrual Basis of Accounting)
163
2019 2018* 2017 2016 2015
REVENUES:

Property Taxes 89,367$ 80,614$ 80,826$ 86,382$ 82,472$ Sales Taxes 47,437 33,844 43,551 39,305 32,234 Utility Taxes 18,788 14,014 19,303 19,482 20,229 Other Taxes 27,196 18,409 17,991 17,313 16,464 Licenses and Permits 8,574 6,293 8,812 9,820 9,270 Fines and Forfeitures 4,300 3,048 3,995 5,144 4,746 From Use of Money and Property 23,276 11,600 17,210 18,055 17,473 From Other Agencies 13,072 10,384 15,293 13,712 18,634 Charges for Current Service/Other Revenue 33,787 30,216 32,351 32,506 35,869 TOTAL REVENUES 265,797 208,422 239,332 241,719 237,391

EXPENDITURES
Current:

City Council 369 279 333 318 278 City Manager 6,598 3,143 4,116 3,092 2,703 City Treasurer 248 134 201 204 167 City Attorney 2,874 2,037 3,052 2,539 2,425 City Clerk 981 602 830 790 895 Finance 6,484 4,376 5,763 5,659 5,452 Human Resources***** 6,362 5,323 5,535 6,776 4,606 Community Development** 8,138 5,554 6,963 7,062 6,954 Fire 54,431 36,347 46,831 46,200 45,008 Information Systems 8,342 5,385 6,603 6,742 6,846 Police 83,546 57,916 75,015 72,612 68,940 Community Services 11,720 7,958 14,124 10,768 10,223 Library Services 4,944 3,436 4,422 4,247 4,146 Public Works 46,878 30,357 38,635 23,659 23,820 Non-Departmental***** - 22,432 28,396 24,670 20,067 Capital Outlay**** - - - 27,269 14,986 Debt Service:

Principal 5,346 311 5,091 5,933 5,454 Interest 1,890 965 2,066 2,138 2,226 TOTAL EXPENDITURES 249,151 186,555 247,976 250,678 225,196

EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER) EXPENDITURES 16,646 21,867 (8,644) (8,959) 12,195 OTHER FINANCING SOURCES (USES):

Transfers In 11,190 13,261 6,692 9,034 12,158 Issuance of Long-Term Debt - - 2,767 10,197 Issuance Premium - - - - - Issuance Discount - - - - - Payments to Escrow - - - - - Lease (as Lessee) - - - - - Issuance of Finance Purchase Agreement - - - - - Subscription Based IT Arrangement - - - - - Transfers Out (11,227) (13,593) (6,743) (17,053) (14,238) TOTAL OTHER FINANCING SOURCES (USES) (37) (332) 2,716 2,178 (2,080) INCREASE (DECREASE) IN FUND BALANCES 16,609$ 21,535 $ (5,928) $ (6,781) $ 10,115 $

DEBT SERVICE AS A PERCENTAGE OF
NON-CAPITAL EXPENDITURES 3.3% 0.7% 3.2% 3.6% 3.7%
**** 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. Human Resources was seperated in Fiscal Year ended June 30, 2024.

Fiscal Year Ended
(continued)
September 30, June 30,

CITY OF HUNTINGTON BEACH

CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS
(In Thousands)
(Modified Accrual Basis of Accounting)
164
Fiscal Year
Common
Property Public Utilities Total Secured Unsecured
Total Assessed
Valuation
Total Direct Tax
Rate
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 2022-2023 43,432,681 948 43,433,629 1,232,123 44,665,752 0.17082 2023-2024 45,689,554 948 45,690,502 1,174,043 46,864,545 0.17082 Source: County of Orange Auditor Controller
Fiscal Year
City Basic Rate
(1), (2) City Other School Districts
Metro Water
District Others
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 0.0997 0 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 2022-2023 0.15582 0.01500 0.07449 0.00350 0.84418 1.09299 2023-2024 0.15582 0.01500 0.08163 0.00350 0.84418 1.10013 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
165
Fiscal Year Total Levy Amount
Percentage
of Levy
Delinquent
Tax
Collections Amount
Percentage
of Levy
Delinquent
Taxes
Receivable
Delinquency
Percent
Secured Taxes
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% 2022-2023 78,388 76,256 97.3% 547 76,803 98.0% 1,501 1.9% 2023-2024 80,457 78,570 97.7% 658 79,228 98.5% 1,205 1.5% Unsecured Taxes
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% 2022-2023 2,233 2,102 94.1% 42 2,144 96.0% 59 2.6% 2023-2024 2,586 2,240 86.6% 33 2,273 87.9% 174 6.7% Community Facilities Districts
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% 2022-2023 4,006 3,962 98.9% - 3,962 98.9% 31 0.8% 2023-2024 4,207 4,194 99.7% 35 4,229 100.5% - 0.0% Note:

The levy and tax year is for July 1st through June 30th and does not include the Redevelopment Agency. 2013/2014 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
166
2023-2024
Taxable Assessed Value Percent
(In Thousands) of Total TAV
AES Huntington Beach Energy, LLC 792,053$ 1.69% Bella Terra Associates LLC 407,060 0.87% DCO Pacific City LLC 233,234 0.50% Huntington Gateway Industrial LLC 222,400 0.47% Catalyst Housing Group 219,638 0.47% PCH Beach Resort LLC 207,865 0.44% Socal Holding LLC 175,791 0.38% The Boening Company/McDonnell Douglas 172,041 0.37% The Waterfront Hotel LLC 150,837 0.32% Monogram Residential Huntington Beach 144,687 0.31% Total Top Ten 2,725,606 5.82% All Other Property Taxpayers 44,138,939 94.18% City Total 46,864,545$ 100.00%
2014-2015
Taxable Assessed Value Percent
(In Thousands) of Total TAV
OXY USA Inc 638,783$ 2.07%
McDonnell Douglas West Federal Credit Union 338,241 1.10% Bella Terra Associates LLC 233,012 0.76% Mayer Financial LP 191,399 0.62% DCOR LLC 145,379 0.47%
CIM Huntington LLC 104,148 0.34% Bella Terra Villas LLC 97,724 0.32% Pacific Sands LLC 89,024 0.29% United Dominion Realty 88,840 0.29% AES Huntington Beach LLC 74,100 0.24% Total Top Ten 2,000,650 6.50% All Other Property Taxpayers 28,786,535 93.50% City Total 30,787,185$ 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
167

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168
Long-Term Indebtedness 2024 2023 2022 2021 2020
Governmental Activities:

Judgement Obligation Bonds -$ - $ - $ - $ - $ Public Financing Authority:
2010(a) Lease Revenue Bonds - - - - 7,410 2011(a) Lease Revenue Bonds - - - - 15,725 2014(a) Lease Revenue Bonds 9,810 10,530 11,215 11,880 12,530 2020(a) Lease Revenue Bonds 4,835 4,835 4,835 4,835 - 2020(b) Lease Revenue Bonds 8,265 9,795 11,315 12,830 - Total Public Financing Authority 22,910 25,160 27,365 29,545 35,665 Other Long-Term Obligations:

Finance Purchase Agreement 14,290 17,388 11,714 12,753 5,241 Leases Payable 240 456 247 - - Subscriptions Payable 3,800 2,600 - - - Section 108 Loan City - - - - - LED Lighting Phase I 65 191 314 432 546 CEC 1,528 1,797 2,063 2,457 2,588 I-Bank 973 1,283 1,586 1,882 2,171 Pension Obligation Bonds 305,322 318,005 330,642 341,501 - Total Other Long-Term Obligations 326,218 341,720 346,566 359,025 10,546 Total Long-Term Obligations - Governmental Activities 349,128 366,880 373,931 388,570 46,211 Long-Term Obligations - Business-Type Activities:

Pension Obligation Bonds 19,588 20,480 21,368 22,144 - Total Long-Term Obligations - Business-Type Activities 19,588 20,480 21,368 22,144 - Total Long Term Obligations - Governmental Activities and Business-Type Activities 368,716$ 387,360$ 395,299$ 410,714$ 46,211$ 2024 2023 2022 2021 2020
Population 195,332 198,373 197,437 198,039 200,748 Debt Per Capita 1,888 $ 1,953 $ 2,002 $ 2,074 $ 230 $ Total Personal Income (In Thousands)* 11,847,667 $ 10,841,878 $ 9,995,248 $ 9,659,154 $ 9,450,814 $ Per Capita Personal Income* 60,654 $ 54,654 $ 50,625 $ 48,774 $ 47,078 $ Unemployment Rate** 3.90% 3.60% 2.80% 4.70% 8.60%
Total Employment** 101,700 103,900 104,300 100,700 96,200 * 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 perio d from October 1, 2017 to June 30, 2018.

June 30,
Fiscal Year Ended

CITY OF HUNTINGTON BEACH

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
(In Thousands)
169
September 30,
Long-Term Indebtedness 2019 2018*** 2017 2016 2015
Governmental Activities:

Judgement Obligation Bonds - $ - $ - $ 659$ 1,634$ Public Financing Authority:
2010(a) Lease Revenue Bonds 8,235 9,030 9,030 9,795 10,525 2011(a) Lease Revenue Bonds 17,770 19,735 19,735 21,650 24,985 2014(a) Lease Revenue Bonds 13,145 13,740 13,740 14,315 14,865 2020(a) Lease Revenue Bonds - - - - - 2020(b) Lease Revenue Bonds - - - - - Total Public Financing Authority 39,150 42,505 42,505 45,760 50,375 Other Long-Term Obligations:

Finance Purchase Agreement 5,083 6,079 6,286 4,130 - Leases Payable - - - - - Subscriptions Payable - - - - - Section 108 Loan City - 430 430 625 805 LED Lighting Phase I 656 762 866 966 1,063 CEC 2,818 3,000 3,000 3,000 - I-Bank 2,454 2,730 2,730 3,000 - Pension Obligation Bonds - - - - - Total Other Long-Term Obligations 11,011 13,001 13,312 11,721 1,868 Total Long-Term Obligations - Governmental Activities 50,161 55,506 55,817 58,140 53,877 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 50,161$ 55,506$ 55,817$ 58,140$ 53,877$ 2019 2018*** 2017 2016 2015
Population 202,265 201,761 202,413 201,919 198,389 Debt Per Capita 248 $ 275 $ 276 $ 288 $ 272 $ Total Personal Income (In Thousands)* 9,222,677 $ 8,849,843 $ 8,878,441 $ 8,880,801 $ 8,725,545 $ Per Capita Personal Income* 45,597 $ 43,863 $ 43,863 $ 43,982 $ 43,982 $ Unemployment Rate** 2.60% 2.70% 2.80% 3.90% 3.90%
Total Employment** 107,700 106,900 103,200 107,200 104,000 June 30,
Fiscal Year Ended

CITY OF HUNTINGTON BEACH

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
(In Thousands)
170
2014-2015 -
2015-2016 -
2016-2017 -
2017-2018 -
2018-2019 -
2019-2020 -
2020-2021 -
2021-2022 -
2022-2023 -
2023-2024 - 5,623,745 5,623,745 46,864,545 5,359,890 5,359,890 44,665,752 4,867,347 4,867,347 40,561,224 5,019,827 5,019,827 41,831,893 37,120,729 4,454,487 4,454,487 38,887,451 4,666,494 4,666,494 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 (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
171
2023-24 Assessed Valuation: $51,179,643,299
Debt Repaid with Property Taxes (Tax and Assessment Debt):

Overlapping Tax and Assessment Debt
Percent
Applicable*
Debt Applicable
to City
Metropolitan Water District 1.320% 240,372
Coast Community College District 27.865% 247,150,313
Los Alamitos Unified School District Facilities Improvement District No. 1 1. 121% 2,417,663 Huntington Beach Union High School District 72.664% 99,789,470 Fountain Valley School District 26.687% 15,174,228
Huntington Beach School District 99.946% 150,297,757
Ocean View School District 93.632% 141,286,006
Westminster School District 23.935% 37,223,341
City of Huntington Beach Community Facilities Districts (2000-1, 2002-1, 2003-1) 100.000% 22,990,000 Total Overlapping Tax and Assessment Debt 716,569,150$
Direct and Overlapping General Fund Debt
Orange County General Fund Obligations 6.647% 29,272,391 Orange County Board of Education General Fund Obligations 6.647% 666,694 North Orange County Regional Occupation Program Certificates of Participation 0.082% 6,027 Coast Community College District General Fund Obligations 27.865% 299,549 Coast Community College District Pension Obligation Bonds 27.865% 257,751 Huntington Beach Union High School District Certificates of Participation 72.664% 37,375,520 Los Alamitos Unified School District Certificates of Participation 1.007% 306,458 Huntington Beach School District General Fund Obligations 99.946% 13,476,577 Ocean View School District Certificates of Participation 93.632% 11,914,672 Westminster School District General Fund Obligations 23.935% 5,858,091 City of Huntington Beach General Fund Obligations 100.000% 43,805,882 City of Huntington Beach Pension Obligation Bonds 100.000% 324,910,000 Total Direct and Overlapping General Fund Obligation Debt 468,149,612 $ Overlapping Tax Increment Debt (Successor Agency) 100.000% 1,140,000 Total Direct Debt 368,715,882$
Total Overlapping Debt 817,142,880
Combined Total Debt 1,185,858,762$
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the City. (1) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non-bonded leases obligations.

Ratios to Adjusted Assessed Valuations
Combined Direct Debt ($364,676,282) 0.72%
Combined Total Debt 2.32%
Ratios to Redevelopment Successor Agency Incremental Valuation ($4,102,592,346) Total Overlapping Tax Increment Debt 0.03%
Source: California Municipal Statistics and City of Huntington Beach Finance Department

STATEMENT OF DIRECT AND

OVERLAPPING BONDED DEBT
JUNE 30, 2024

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 d istrict's total taxable assessed value. 172
2024 % of total
The Boeing Company 3,112 3.06%
Cambro Manufacturing 650 0.64%
Hyatt Regency Huntington Beach 641 0.63%
Huntington Beach Hospital 527 0.52%
Wal-Mart 462 0.45%
No Ordinary Moments 458 0.45%
Waterfront Hilton Beach Resort 450 0.44%
Home Depot USA Inc 436 0.43%
Home and Body Company 418 0.41%
Target Corporation 351 0.35%
Total of top 10 7,505 7.38%
All others 94,195 92.62%
Total employment (public and private) 101,700 100.00% 2015 % of total
Boeing 4,857 4.67%
Cambro MFG Co. 951 0.91%
Ensign United States Drilling 925 0.89%
Hyatt Regency Huntington Beach 641 0.62%
C & D Aerospace 555 0.53%
Zodiac Aerospace / Driessen Aircraft 542 0.52% Huntington Beach Hospital 527 0.51%
Quiksilver 525 0.50%
Walters Wholesale Electronics 480 0.46%
Rainbow Disposal 408 0.39%
Total of top 10 10,411 10.00%
All others 93,589 90.00%
Total employment (public and private) 104,000 100.00% Source: Finance Department, City of Huntington Beach

CITY OF HUNTINGTON BEACH

PRINCIPAL PRIVATE EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO
173
General Government: 2024 2023 2022 2021 2020 2019 2018*** 2017 2016 2015 City Council 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 City Manager 16.00 14.00 27.00 20.00 18.00 12.50 12.50 11.50 11.50 11.50 City Treasurer 9.50 9.50 9.50 1.50 1.50 2.00 2.00 2.00 1.50 1.50 City Attorney 15.00 11.00 11.00 11.00 11.00 11.00 11.00 12.00 11.00 11.00 City Clerk 6.00 5.00 5.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Finance 28.50 28.50 28.50 32.50 31.50 33.00 33.00 33.00 32.50 31.50 Human Resources ** 15.00 13.00 - - - 15.00 15.00 15.00 15.00 15.00 Community Development 61.50 57.50 57.50 57.50 54.00 44.00 44.00 44.00 43.50 44.00 Information Systems 26.00 25.00 25.00 26.00 22.00 30.00 30.00 30.00 30.00 30.00 Library Services 29.25 29.25 29.25 29.25 2 3.25 28.25 28.25 28.25 28.25 28.25 Fire 202.00 201.00 201.00 201.00 200.00 198.00 198.00 198.00 198.00 198.00 Police 351.00 353.00 353.00 357.00 356.00 365.50 364.50 364.50 364.50 361.50 Community Services 33.00 33.00 33.00 33.00 37.00 36.00 36.00 44.00 44.00 43.00 Public Works 212.00 211.00 211.00 207.00 199.00 207.00 207.00 199.00 199.00 198.00 1,005.75 991.75 991.75 980.75 958.25 987.25 986.25 986.25 983.75 978.25 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. Human Resources was seperated in Fiscal Year ended June 30, 2024.
*** 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
174
Function/Program 2024 2023 2022 2021 2020
Finance:

Water Bills Processed 639,300 638,052 637,956 637,920 636,708 Active Business Licenses 18,851 18,787 18,849 19,011 20,910 Accounts Receivable Billings Processed 10,813 10,649 12,437 20,183 25,687 City Clerk:

Passports Issued **** 4,570 6,455 5,721 418 4,579 Planning:

Entitlements Processed 131 143 154 112 162 Plan Reviews 398 442 606 1,955 1,358 Field Inspection Complaints 12,108 15,247 7,403 11,899 11,610 Code Violation Cases 3,957 5,599 5,051 4,473 3,260 Building:

Number of Permits Issued 11,464 11,536 10,292 9,075 8,855 Number of Inspections Completed 44,613 33,983 31,080 26,710 32,859 Value of Construction Permits (Thousands of Dollars) 272,596 369,060 237,945 166,000 169,393 Processed Number of Certificate of Occupancies* 592 521 641 655 515 Completed Plan Reviews 4,812 6,916 5,701 4,673 3,469 Counter Visits 3,318 6,264 14,289 115 14,922 Fire:

Inspections 7,209 7,557 7,311 4,008 5,965 Responses 22,016 21,936 22,076 20,428 21,068 Ocean Rescues 3,554 3,027 4,160 4,116 2,487 Estimated Beach Visi
tors 8,984,500 9,101,188 8,345,139 7,910,293 6,712,125 Police:

Physical Arrests 5,507 5,358 5,585 5,363 5,785 Parking Violations 75,355 75,408 97,299 95,753 59,484 Traffic Violations 5,221 6,544 8,869 10,920 12,105 Community Services:

Park/Open Space Acreage 1,072 1,072 1,072 1,072 1,066 Enrollment in Recreation Classes 33,312 35,192 34,616 15,511 28,952 Public Works:

Water Sold (Acre Feet)** 23,153 23,358 26,459 27,731 25,966 Gallons of Sewage Pumped Per Day** 17 million 17 million 19 million 19 million 19 million Library:

Items in Collection 280,595 289,299 290,351 291,444 294,849 Items Borrowed 846,059 811,837 796,882 481,523 779,124 * 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 perio d 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
175
Function/Program 2019 2018*** 2017 2016 2015
Finance:

Water Bills Processed 639,245 476,290 632,997 635,052 536,684 Active Business Licenses 21,414 21,782 22,074 21,420 21,424 Accounts Receivable Billings Processed 30,217 25,000 34,963 30,826 38,594 City Clerk:

Passports Issued 7,024 5,757 7,408 5,623 5,121 Planning:

Entitlements Processed 221 206 216 221 280 Plan Reviews 1,542 1,466 1,376 1,653 1,595 Field Inspection Complaints 8,183 7,005 8,459 7,951 8,233 Code Violation Cases 4,786 4,219 3,981 4,324 4,710 Building:

Number of Permits Issued 9,807 7,490 9,728 10,981 10,670 Number of Inspections Completed 36,562 30,501 38,796 39,380 38,320 Value of Construction Permits (Thousands of Dollars) 135,910 109,462 216,252 283,910 234,946 Processed Number of Certificate of Occupancies* 686 523 740 n/a n/a Completed Plan Reviews 3,491 2,771 4,172 4,172 3,815 Counter Visits 21,409 16,498 21,731 23,492 21,893 Fire:

Inspections 6,140 3,963 2,758 5,132 6,499 Responses 20,354 14,490 20,555 20,279 19,562 Ocean Rescues 4,953 3,530 3,639 3,977 5,371 Estimated Beach Visitors 10,577,290 12,522,640 13,339,518 12,272,030 11,803,943 Po
lice:

Physical Arrests 5,979 4,614 5,298 5,112 4,854 Parking Violations 79,069 54,500 70,846 90,361 83,453 Traffic Violations 13,314 11,869 19,916 17,639 17,596 Community Services:

Park/Open Space Acreage 1,066 1,065 1,065 1,062 1,062 Enrollment in Recreation Classes 37,978 27,152 37,968 34,424 30,228 Public Works:

Water Sold (Acre Feet)** 26,251 19,777 25,944 24,505 24,763 Gallons of Sewage Pumped Per Day** 19 million 19 million 22 million 19 million 19 million Library:

Items in Collection 293,995 292,037 288,599 285,814 343,655 Items Borrowed 942,821 655,626 943,642 921,105 908,656

CITY OF HUNTINGTON BEACH

OPERATING INDICATORS BY FUNCTION/ACTIVITY

LAST TEN FISCAL YEARS
(Continued)
176
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 1,072
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, 2024

CAPITAL ASSET STATISTICS BY FUNCTION/ACTIVITY

CITY OF HUNTINGTON BEACH
177