2024
ANNUALCOMPREHENSIVEFINANCIALREPORT
MANHATTAN BEACH
FOR THE YEAR ENDED
CALIFORNIA
JUNE 30, 2024
www.manhattanbeach.gov
City of
Manhattan Beach
CITY OF MANHATTAN BEACH, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Prepared by the Finance Department
Onyx Jones, Interim Finance Director
CITY OF MANHATTAN BEACH, CALI
FORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
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INTRODUCTORY SECTION
Letter of Transmittal .............................................................................................................................................. i Directory of City Officials ..................................................................................................................................... ix Organization Chart ............................................................................................................................................... x Certificate of Achievement for Excellence in Financial Reporting ...................................................................... xi
FINANCIAL SECTION
Independent Auditors’ Report .............................................................................................................................. 1 Management’s Discussion and Analysis .............................................................................................................. 7
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:
Statement of Net Position ............................................................................................................................ 25 Statement of Activities ................................................................................................................................. 26 Governmental Funds - Fund Financial Statements:
Balance Sheet ............................................................................................................................................. 30 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .................................................................................................................. 31 Statement of Revenues, Expenditures and
Changes in Fund Balances ......................................................................................................................... 32 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the
Statement of Activities ................................................................................................................................. 33 Proprietary Funds Financial Statements:
Statement of Fund Net Position ................................................................................................................... 34 Statement of Revenues, Expenses and Changes
in Fund Net Position .................................................................................................................................... 35 Statement of Cash Flows ............................................................................................................................ 36 Fiduciary Funds Financial Statements:
Statement of Fiduciary Net Position ............................................................................................................ 38 Statement of Changes in Fiduciary Net Position ......................................................................................... 39 Notes to Financial Statements ........................................................................................................................... 43
CITY OF MANHATTAN BEACH, CALI
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Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
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REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule – General Fund ............................................................................................ 93 Pension Plan:
Miscellaneous Plan
Schedule of Changes in Net Pension Liability/(Asset) and Related Ratios .......................................... 94 Supplemental Retirement Plan
Schedule of Changes in Net Pension Liability and Related Ratios ...................................................... 96 Schedule of Investment Returns ........................................................................................................... 99 Single Highest Year Plan
Schedule of Changes in Net Pension Liability and Related Ratios .................................................... 100 Schedule of Investment Returns ......................................................................................................... 102 Safety Plan
Schedule of Proportionate Share of Net Pension Liability/(Asset) ..................................................... 103 Schedule of Plan Contributions
Miscellaneous Plan ........................................................................................................... .................. 105 Supplemental Retirement Plan ........................................................................................................... 105 Single Highest Year Plan .................................................................................................................... 105 Safety Plan .................................................................................................................. ........................ 105 Single Employer OPEB Plan ............................................................................................................... 105 Other Post-Employment Benefits
Schedule of Changes in Net OPEB Liability/(Asset) and Related Ratios ........................................... 106 Notes to Required Supplementary Information ................................................................................................ 108
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES Combining Balance Sheet - Nonmajor Governmental Funds .......................................................................... 112 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds ........................................................................................ 116 Budgetary Comparison Schedules - Special Revenue Funds:
Street Lighting and Landscape .................................................................................................................. 120 Gas Tax ..................................................................................................................................................... 121 Asset Forfeiture ......................................................................................................................................... 122 Public Safety Grants .................................................................................................................................. 123 Proposition A ............................................................................................................................................. 124 Proposition C ............................................................................................................................................. 125 AB 2766 ..................................................................................................................................................... 126 Measure R ................................................................................................................................................. 127 Measure M ................................................................................................................................................. 128 Measure W ................................................................................................................................................ 129
CITY OF MANHATTAN BEACH, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
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COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES (Continued)
Budgetary Comparison Schedules - Capital Projects Funds:
Capital Improvement ................................................................................................................................. 130 Bond Construction ..................................................................................................................................... 131 Underground Assessment District ............................................................................................................. 132
Combining Statement of Net Position - Nonmajor Enterprise Funds............................................................... 134
Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Nonmajor Enterprise Funds ............................................................................................. 135
Combining Statement of Cash Flows - Nonmajor Enterprise Funds ............................................................... 136
Combining Statement of Net Position - Internal Service Funds ....................................................................... 138
Combining Statement of Revenues, Expenses and Changes in Fund Net Position - Internal Service Funds ..................................................................................................... 139
Combining Statement of Cash Flows - Internal Service Funds ....................................................................... 140
STATISTICAL SECTION
Financial Trends
Net Position by Component .................................................................................................... ...................... 146 Changes in Net Position ...................................................................................................... ......................... 148 Program Revenues by Function/Program ......................................................................................... ........... 152 Fund Balances, Governmental Funds ............................................................................................ .............. 154
Revenue Capacity
Change in Fund Balances, Governmental Funds ......................................................................................... 158 Taxes & Assessment Revenues by Source, Go vernmental Funds and Assessment .................................. 161 Assessed Value and Estimated Actual Value of Taxable Property .............................................................. 162 Direct and Overlapping Debt Property Tax Rates ........................................................................................ 164 Principal Property Taxpaye rs Based on Net Values ..................................................................................... 165 Property Tax Levies and Collections .......................................................................................... .................. 167 Taxable Sales by Category ........................................................................................................................... 168 Direct and Overlapping Sales Tax Rates...................................................................................................... 170 Principal Sales Tax Remitters ....................................................................................................................... 171
CITY OF MANHATTAN BEACH, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
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STATISTICAL SECTION (Continued)
Debt Capacity
Ratios of Outst anding Debt by Type ............................................................................................................. 174 Direct and Overlapping Govern mental Activities Debt ................................................................................. 177 Legal Debt Margin Information ................................................................................................ ..................... 178 Pledged-Revenue Coverage ........................................................................................................................ 180
Demographic and Economic Information
Demographic and Econo mic Statistics ......................................................................................................... 184 Principal Employers .......................................................................................................... ............................ 185 Full-time Authorized City Em ployees by Function/Program ......................................................................... 187 Schedule of Insurance in Force ............................................................................................... ..................... 188 Operating Indicators by Function/Program ................................................................................................... 190 Capital Asset Statistics by Function/Program ............................................................................................... 191 Demographic Statistical Data ................................................................................................. ...................... 192
Bond Disclosure Section .................................................................................................................................. 195
INTRODUCTION
City Hall 1400 Highland Avenue Manhattan Beach, CA 90266-4795 Telephone (310) 802-5000 FAX (310) 802-5001 TDD (310) 546-3501 February , 2025
Honorable Mayor, Councilmembers and Citizens of Manhattan Beach Manhattan Beach City Hall
Manhattan Beach, California 90266
We are pleased to present the Annual Comprehensive Financial Report of the City of Manhattan Beach for the Fiscal Year ended June 30, 2024. This report has been prepared in accordance with generally accepted accounting principles as set forth in the pronouncements of the Governmental Accounting Standards Board (GASB). We are also pleased to report that the City has received an unmodified opinion from the independent auditor, meaning that financial statements are presented, in all material respects, in accordance with the applicable financial reporting framework.
The City’s financial policies require an external independent audit be performed annually, and that the auditor’s opinions be included in the Annual Comprehensive Financial Report (ACFR). Further, it states that the results be reviewed with the Finance Subcommittee, which met with the auditor and discussed the results on February 13, 2025.
Responsibility for the accuracy of the data and the fairness of presentation, including all footnotes and disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City. All material statements and disclosures necessary for the reader to obtain a thorough understanding of the City’s financial activities have been included.
City management is responsible for establishing and maintaining fiscal internal controls designed to safeguard the assets of the government from loss, theft or misuse, and to ensure that accounting data is accurately compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of controls should not exceed the benefits likely to be derived, and the valuation of costs and benefits require estimates and judgments by management.
The City’s financial statements have been audited by Lance, Soll & Lunghard, CPAs, an accounting firm selected by the City Council, based on a recommendation from the Finance Subcommittee. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion and that the City of Manhattan Beach’s financial statements for the fiscal year ended June 30, 2024, are fairly presented in conformity with generally accepted accounting principles (GAAP).
The independent auditor’s report is presented as the first component of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of the Management Discussion and Analysis. This letter of transmittal is designed to complement the Management Discussion and Analysis (MD&A) and should be read in conjunction with it. The City’s MD&A can be found immediately following the report of the independent auditor. i
Profile of the Government
The City of Manhattan Beach is located in the South Bay region of Los Angeles County. The current population1 is 34,195. The City encompasses approximately four square miles.
Incorporated in 1912 under the general laws of the State of California, the City operates under the Council-Manager form of government. The City Council is comprised of five members elected at-large for overlapping four-year terms.
Each member may serve as Mayor for a nine-month period once during his or her four-year term in office. The City Treasurer is also elected to a four-year term and serves as the chairperson for the Finance Subcommittee. City Councilmembers are limited to two consecutive terms. The City conducts its elections with statewide elections scheduled in November.
The City Council is responsible for, among other things, passing ordinances, adopting the budget, appointing committees, and appointing the City Manager and City Attorney. The City Councilmembers also serve as the governing body of the Manhattan Beach Capital Improvements Corporation (please see Note 1 in the ACFR for more information).
In addition, the City Council appoints the members of the following advisory Boards and Commissions:
Planning Commission Parking and Public Improvements Commission Parks & Recreation Commission Board of Building Appeals Library Commission Business Improvement District Advisory Boards Cultural Arts Commission
The City is a full-service municipality, and provides a variety of services to the community, including:
Police services Fire and paramedic services
Culture and recreation Building and safety
General government Water and wastewater utilities
Stormwater management Parking facilities
Street and landscape maintenance
Budget Process
The City operates on an annual budget schedule. The budget development process begins in January of each year.
Line-item budget development is accomplished through the City’s financial system, which allows each department to build its budget using computerized worksheets. Each department is responsible for developing the Materials & Supplies line items and part-time employee salaries. The remaining Salary & Benefit information is calculated and entered by the Finance Department.
The Finance Director, in coordination with the applicable operating departments, provides the City Manager with proposed revenue projections. These revenue estimates are reviewed with the department budget requests to determine available funding levels for the fiscal year. Supplemental budget requests (new personnel, services or equipment) are subject to City Manager review and approval before becoming part of the proposed operating budget. This process applies to all governmental and enterprise funds.
The City Manager and Finance Director meet with the departments to review all operating expenditures and budget change requests. After this final review and approval by the City Manager, the proposed budget document is presented to the City Council in May. Budget study sessions and a public hearing are then held by the City Council.
The budget is adopted by resolution prior to June 30.
During the fiscal year, the budget can be amended as necessary to meet the City’s needs. The City Council has the legal authority to amend the budget at any time. Department Heads and their designated representatives may only authorize expenditures based on appropriations approved by City Council action, and only from accounts under their organizational responsibility. Actual expenditures may exceed budget appropriations by line-item. However, total expenditures within each fund may not exceed the total appropriation for that fund. The City Manager has the authority and discretion to approve interdepartmental appropriation transfers as long as they are within the same fund. Inter-fund transfers require a budget amendment by the City Council. 1 State of California, Department of Finance, E-1 Population Estimates for Cities. Sacramento, California, May 2024. ii
Financial Policies
In fiscal year 1997-1
998, the City Council approved the City’s first set of financial policies, designed to promote sound financial management and ensure that the City’s fiscal integrity remains intact as staff and Councilmembers change. The Policies are reviewed and re-adopted every year with the City’s Operating Budget in June.
While presenting General Fund balance in accordance with GASB pronouncements, the City Council has established certain policy “reserves” within what GASB defines as the unassigned category. The unassigned category is the residual classification of fund balance that is not in restricted or committed classifications. In the General Fund section of this transmittal letter, General Fund unassigned balance is broken down in accordance with City Council Financial Policy.
Long Term Planning
Each year during the budget process, the City develops a five-year forecast of revenues and expenditures for all funds. In fiscal year ending June 30, 2024, the General Fund transferred approximately $2.4 million in subsidies to the Storm Drain Fund. In January 2024, the City concluded a Proposition 218 storm drain fee increase ballot process, which is anticipated to alleviate future General Fund subsidies to the Storm Drain Fund. The new fees will first be effective in fiscal year 2024-2025 with anticipated assessments totaling $2.1 million. The Street Lighting and Landscape Fund is still operating at a deficit and will continue to require General Fund subsidies, which may only be mitigated by a Proposition 218 vote. The most recent five-year forecast can be found in the fiscal year 2024-2025 Adopted Budget, available online at www.manhattanbeach.gov/budget.
Major Initiatives
Lot 3 Parking Structure Redevelopment Project
The Lot 3 Parking Structure, located at the southw
est corner of Morningside Drive and 12th Street in Downtown Manhattan Beach, was a City-owned facility constructed in 1971. This three-story structure contained 145 parking spaces supporting visitors and businesses in the Downtown area.
In July 2024, the structure was closed indefinitely following a series of onsite inspections and structural assessments that revealed advanced deterioration, significantly compromising its integrity. By November 2024, the City fully demolished the structure, including the floor slab and below-grade footings. Plans for an at-grade parking lot will be constructed as a temporary replacement for the lost parking spaces until the redevelopment project begins.
Simultaneously, the City retained a consultant to perform an economic analysis to identify the highest and best use of the site and assess the viability of various redevelopment options. The findings from this analysis will be presented to the City Council with the project expected to proceed to a concept-level design phase to further explore the feasibility of preferred redevelopment options.
Ocean Protection Program
The Beach Cities Watershed Management Group (Beach Cities WMG), comprising Manhattan Beach, Hermosa Beach, Redondo Beach, Torrance, and the Los Angeles County Flood Control District, developed the Watershed Management Program (WMP) to comply with the LA MS4 Permit. Manhattan Beach is addressing its compliance obligations through three key projects.
The TMDL Trash Treatment Project targets 40% of the City’s watershed with hydrodynamic trash separator units and trash screening devices at key locations. Construction began in August 2024, with completion expected by spring 2025, funded by an $830,000 Proposition 1 Round 2 grant.
The 28th Street Stormwater Infiltration Project will manage stormwater from the 28th Street drain, which collects 60% of the City’s runoff. The project includes sedimentation chambers and drywells, with construction slated for mid-2025. Funding totals $30.6 million from programs like Safe, Clean Water, and Proposition 1.
The Dominguez Channel Stormwater Treatment Project will capture stormwater from a 255-acre area in Northeast Manhattan Beach to reduce pollutants entering the channel and Pacific Ocean. The City is working to develop the design and apply for Measure W grant funding.
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These projects reflect the City’s commitment to enhancing water quality, reducing pollution, and ensuring regulatory compliance.
Housing Element Implementation
In September 2022, the City Council adopted the City’s 6th Cycle Housing Element. Upon making additional revisions, the final version was certified by the California Department of Housing and Community Development (HCD) in July 2023, affirming compliance with State housing law. Since then, the City has been working on implementing a series of programs to further the goals in the document and maintain its certified status. This includes a series of amendments to the development standards and processes contained within the Manhattan Beach Municipal Code and the Manhattan Beach Local Coastal Program to ensure conformance with State law.
Another aspect of the implementation work was the creation of a Residential Overlay District (ROD) to allow development of high-density residential projects on select commercial properties in the City. Over the past year, staff has engaged with a number of interested developers to discuss potential ROD projects on eligible sites.
Ultimately, implementation of the Housing Element will help achieve its goal of facilitating housing production to meet the City’s housing needs during the 6th Cycle planning period of 2021 – 2029.
Long-Term Outdoor Dining Program
During the COVID-19 pandemic, the City allowed temporary outdoor uses for a variety of businesses due to restrictions on indoor operations. As the focus gradually shifted from temporary uses to post-pandemic operations, the City Council directed staff to form a 15-member ad hoc task force to develop a long-term outdoor dining program.
In April 2023, the Outdoor Dining Task Force was established, comprised of community members representing residential, commercial, and quasi-judicial stakeholders. Since September 2023, staff has provided four periodic status updates before the City Council summarizing the progress of the program development and task force recommendations that include, but are not limited to, the program vision, scope, and regulations.
Staff has also been working with an outdoor dining consultant team since June 2023. The consultant assists the City in specialized subject areas such as engineering and design, community outreach, environmental documentation, fiscal impact analysis, and other related topics, to expedite the development process and supplement the necessary resources that are currently not available in-house. In October 2024, the consultant team finalized preliminary plans that analyzed the technical feasibility of the preferred program vision. Currently, plans for a subsequent community meeting in January 2025 is underway which will showcase the program development and task force recommendations to date.
FACTORS AFFECTING FINANCIAL CONDITION
The information presented
in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates.
Local Economy
The South Bay region is home to a number of industries including aerospace, entertainment, technology, leisure and tourism, and manufacturing. Economists report that the South Bay area has strong fundamentals including high levels of education, high incomes and competitive industries. The most recently available figures indicate that Manhattan Beach has a 4.3% unemployment rate, compared to Los Angeles County at 6.1% and the State of California at 5.4%
2. The City’s largest General Fund revenue source, Property Tax, grew by 4.9% ($2.0 million) in FY 2023-2024. Assessed valuations, which indicate tax revenue and help propel property tax growth, are projected to increase by 5.2% in FY 2024-2025, driven by demand and resulting price escalations in the local housing market.
Single-family homes valued at pre-1978 levels (before Proposition 13) continue to turn over, resulting in higher assessed valuations being added to the property tax rolls. 2 State of California, Employment Development Department, October 2024 (Preliminary) iv
Long-Term Pension Liability and Issuance of Pension Obligation Bonds As a service organization, labor accounts for the majority of the City’s costs - approximately 60% in the General Fund. As a proactive measure, and to take advantage of historically low borrowing rates, the City issued $91 million of Pension Obligation Bonds (POBs) in May 2021. This transaction replaced all of the City’s pension liability for debt service. The final spreads reflected the strength of the City’s conservative financial management and AAA credit rating, resulting in a True Interest Cost (TIC) of 2.72%. Issuance of the POBs also stabilized rising pension liability costs by creating level debt service payments of $5.5 million over 22 years and an estimated budgetary savings of $43.5 million through the final maturity date in 2043. Fluctuating interest rates can dramatically affect the Unfunded Accrued Liability (UAL). Since the issuance of POBs, the City’s UAL totaled $24.3 million, primarily driven by a negative 6.1% investment loss in FY 2021-2022.
EXECUTIVE FINANCIAL OVERVIEW
This top level overview is presented as a supplement to the more detailed and comprehensive analysis presented in the MD&A. As such, it serves to highlight key financial performance indicators for our major funds. We encourage readers to review the MD&A for a further analysis of the City’s financial condition.
General Fund
The General Fund is the primary operating fund of the City of Manhattan Beach. The General Fund balance increased by $1,695,909 from the prior year. The increase is attributable to net revenues over expenditures of negative $3,650,344, offset by Other Financing Sources (transfers-in, transfers-out) of $5,346,253. Transfers-in included $275,434 from the County Parking Lot Fund in line with the contract with the County of Los Angeles and $500,000 from the Information Technology Fund to alleviate excess fund balance. Transfers-out comprised of subsidies to other funds to support operations, including $1,994,920 to the Capital Improvement Fund, $2,376,698 to the Stormwater Fund, $252,991 to The Street Lighting and Landscape Fund, and $208,286 to the Fleet Fund for the purchase of vehicles.
The Pension Trust Fund and the PARS Investment Trust Fund is included in the General Fund balance. At the end of fiscal year 2024, the total General Fund balance equaled $40.4 million, of which $5.3 million is either non-spendable or restricted and $57,289 is assigned to City retirement plans, leaving an unassigned fund balance of $35.0 million. Within the unassigned fund balance, City Council has established earmarks for financial policies and economic uncertainties of $22.6 million, leaving $12.4 million available for use at City Council’s discretion.
Nearly all General Fund revenue categories increased from the prior year except for Fines and Miscellaneous revenues. Changes from the prior year for each category are noted in the table below:
Increase/
Revenue Category 2024 Actual 2023 Actual (Decrease) %
Property Tax $43,067,610 $41,049,069 $2,018,541 4.9%
Other Taxes (Sales, Hotel, Business License, etc.) 27,890,305 25,176,755 $2,713,550 10.8% Licenses and Permits (Building, Construction, Film Permits) 4,340,758 3,880,050 $460,708 11.9% Fines (Parking Citations, Vehicle Code Fines) 1,953,584 2,612,258 ($658,674) (25.2%) Use of Money and Property (Interest, Rents and Ground Leases) 7,146,781 4,846,538 $2,300,243 47.5% Received From Other Agencies (Vehicle License Fees, Grants) 742,757 453,018 $289,739 64.0% Service Charges (Plan Check Fees, P&R Class, Ambulance Fees) 9,693,124 8,436,582 $1,256,542 14.9% Interfund Charges (Admin and Enginering Service Charge) 3,731,200 3,557,607 $173,593 4.9% Miscellaneous* 1,202,262 1,451,967 ($249,705) (17.2%)
Total $99,768,381 $91,463,844 $8,304,537 9.1%
*Includes proceeds from the Sale of Capital Assets.
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With the City’s relatively high property values, Property Taxes continue to be the main revenue source totaling
43.2% of all General Fund revenues. Property Taxes have been a stable source of funds with a $2.0 million (4.9%) increase over the prior year.
In the Other Taxes category, Sales Tax, totaling $11.1 million in FY 2023-2024 was in line with the prior year.
Transient Occupancy (Hotel) Taxes, which totaled $8.7 million, increased by $2.1 million (32.4%) compared to the prior year driven by an increase in the City’s tax rate from 12% to 14% effective July 1, 2023, as well as an increase in the number of short-term rentals operating within the City’s coastal zone. Business License Tax, which is based on gross receipts, increased $486,690 (9.9%) over the prior year to $5.4 million. Additionally, Real Estate Transfer Tax was in line with the previous year at $716,788.
Building permit revenue increased by $850,579 (51.2%) and other construction permits decreased $93,528 (-15.3%) compared to the prior year.
In the Use of Money & Property category, the most significant driver of the $2.23 million (46.4%) increase was the impact of high interest rates on investment earnings. An investment gain of $448,420 was recorded compared to a loss of $485,696 in FY 2023-2024. Additionally, rents and leases increased $769,016 (17.6%) compared to the prior year primarily due to recording five quarters of revenue and annual CPI increases in ground lease agreements.
On an overall basis, General Fund revenues totaled $99.8 million, up by $8.3 million or 9.1% from the prior year and outperformed the final budget by $5.5 million (excluding transfers in).
General Fund expenditures totaled $103.4 million in FY 2023-2024, an increase of nearly $18.3 million over the prior fiscal year and about $7.8 million over the final budget due to recording the GASB 96 SBITA principal payment of $9.4 million.
Other Funds
Underground Assessment District
Three Utility Undergrounding Assessment Districts (19-4, 19-12, 19-14) were approved by property owners in FY 2019-2020. Construction of all other previously approved underground districts was completely managed by the utility companies for lump sum pricing. For these three districts, the City’s Public Works Department is directly overseeing construction and, as a result, the bond proceeds (revenues) and expenditures are flowing through a City governmental fund. Property owners were given an opportunity to prepay their assessment in cash or to pay in annual installments following the issuance of bonds. Construction commenced in 2020 following the cash collection period and subsequent sale of bonds for remaining assessments. Construction on District 19-4 was completed in June 2024 and Districts 19-12 and 19-14 is estimated to be completed mid-2025.
Capital Improvement Fund
The Capital Improvement Projects (CIP) Fund is important to highlight given its significance in managing general governmental infrastructure and facilities capital projects. In FY 2023-2024, CIP Fund total revenues were $3.6 million and expenditures were $5.1 million.
As of June 30, 2024, the total balance of the CIP Fund is $12.7 million. A list of major capital projects at year end include:
x $6,485,767 – Senior & Scout House Project
x $699,834 – Deferred Park Maintenance
x $3,891,802 – Other projects in design or construction including various facility projects and park projects.
Enterprise, Internal Service, and Special Revenue Funds This group includes the City’s enterprises such as Water, Wastewater, Storm Drain and Parking funds; internal service funds such as Fleet, Insurance, Building Maintenance and Information Technology; and Special Revenue funds including Gas Tax, Proposition A & C, Measure R, Measure M, Measure W, Asset Forfeiture, etc. Among this group, several funds deserve attention.
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In FY 2023-2024, net income from Wat
er Fund operations totaled $1.6 million, which decreased compared to $3.0 million in the prior year. Operating revenue from sales and service charges increased by $1.4 million (9.7%), while operating expenses (labor, materials, services, etc.) decreased by $2.8 million (25.0%). The construction of the Peck Reservoir project has depleted the unrestricted fund balance and lower than projected revenues due to heavy rainfall in previous years has prevented the Water Fund from meeting the financial reserve policy.
In FY 2023-2024 the net operating income for the Wastewater Fund was $833,294, a decrease of $97,872 (10.5%) compared to the prior year. Operating revenue increased $345,053 (10.54%). New wastewater rates will be effective November 1, 2023, with the full effects of the increase demonstrated in FY 2024-2025. Since the Wastewater revenues are based on water consumption, water conservation efforts also result in lower Wastewater revenues without the benefit of lower operational costs as is the case in the Water Fund, where conservation results in less pumping and less water being purchased.
The Storm Drain Fund has been operating at a loss for many years and depended on General Fund subsidies to fund operations. In FY 2023-2024, the General Fund transferred $2,376,974 to the Storm Drain Fund to relieve the deficit balance. In January 2024, voters approved a fee increase in storm drain fees through a Proposition 218 process. The new fee is estimated to generate $2.5 million in revenue annually and alleviate future General Fund subsidies.
The Parking Fund net operating income for FY 2023-2024 was $1.7 million, a decrease of $381,361 from the prior year. Operating revenue remain relatively flat compared to the prior year at $4.4 million. Total operating expenses of $2.7 million was up $454,196 (20.3%) from the prior year due to decreased materials and service expenses.
Future capital improvement projects, such as the reconstruction of dated parking structures, as well as debt service on bond principal will require an increase in cash flow.
Street Lighting and Landscape Fund
The Street Lighting and Landscape Fund continues to run deficits each year. For FY 2023-2024, expenditures exceeded revenues by $298,037. These assessments have not changed for over 20 years. Because there is no fund balance to draw upon, the General Fund contributes the entire amount needed for continued operations. These contributions will be necessary until a Proposition 218 assessment vote is successful in raising the assessment rates and revenues.
Insurance Reserve Fund
For FY 2023-2024, the net position for the Insurance Fund decreased $655,484. Unpredictable nature of claims payments, compounded by rising medical costs and claim judgments, cause internal service fund charge-outs to fall behind funding needs.
Custodial Funds
The custodial fund group includes debt service funds held in trust on behalf of Utility Undergrounding Assessment Districts (UUAD). The City refunded the outstanding bonds of five Underground Districts in March 2018 to take advantage of lower interest rates and reduce assessments for property owners. Interest rates for the new refunding bonds were set at a uniform annual rate of 3.00%, compared to the previous rates that ranged from 4.72% to 4.95%.
The 2018 refunding bonds mature in September 2026.
Debt service on the bonds issued for the three UUAD Districts (19-4, 19-12, and 19-14) formed in FY 2019-2020 range in interest rates from 2.00% to 3.00%. These bonds mature in September 2040.
OTHER INFORMATION
Manhattan Beach’s history of prudent financial decision-making has earned and maintained a sound financial condition. In fact, Standard & Poor’s reaffirmed the City’s AAA Credit Rating on July 20, 2021. Established reserves remain funded, and the City continues to operate efficiently and effectively, all while continuing to provide outstanding services for the community.
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Acknowledgments: This report was made possible through the efforts and teamwork of the highly dedicated Finance staff. Special thanks to Julie Bondarchuk, Libby Bretthauer, and Amira Khodari. Appreciation is also expressed to the City Council and City Treasurer for their interest and support, which made this presentation possible. Finally, thanks to the City’s auditing firm of Lance, Soll & Lunghard, LLP for their professionalism and diligence in preparing this year-end financial report.
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ELECTED OFFICIALS
CITY TREASURER
Tim Lilligren
MAYOR
Joseph Franklin
MAYOR PRO TEM
Amy Howorth
CITY COUNCILMEMBER
Steve Napolitano
CITY COUNCILMEMBER
Richard Montgomery
CITY COUNCILMEMBER
David J. Lesser
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Manhattan Beach
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
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FINANCIAL SECTION
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Manhattan Beach, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund informat ion of the City of Manhattan Beach, California, (the City) as of and for the year ended June 30, 2024, an d 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 financial statements referred to a bove present fairly, in all material respects, the respective financial position of the governmental acti vities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 20 24, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then en ded 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 and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States. Our responsibilit ies 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 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, includi ng any currently known infor mation that may raise substantial doubt shortly thereafter.
To the Honorable Mayor and Members of the City Council
City of Manhattan Beach, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted aud iting standards 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 generally accepted auditing standards and Government Auditing Standards, we:
x Exercise professional judgment and maintain pr ofessional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures respon sive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x 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. x Evaluate the appropriateness of accounting policies us ed and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. x 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 analysi s, budgeta
ry comparison schedule for the General Fund, and required pension and other postemployment benefits schedules, as listed on the table of contents, be presented to supplement the basic financial statements. Such information is the responsibilit y of management and, although not a part of the basic financial statements, is required by the Governmental Acc ounting Standards Board who considers it to be an essential part of financial reporting for placing the bas ic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedur es to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
2 To the Honorable Mayor and Members of the City Council City of Manhattan Beach, California
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining and individual fund financial statements and schedules (“supplementary information”)are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconc iling such information directly to the underlying accounting and other records used to prepare the basic f inancial 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 supplementary information is 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 report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic 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 basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 12, 2025, 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 agreeme nts and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
Irvine, California
February 12, 2025
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MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Manhattan Beach, we offer our readers of these financial statements this narrative overview and analysis of the financial activities of the City of Manhattan Beach for the Fiscal Year ended June 30, 2024. We encourage readers to consider this information in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i to viii of this report.
FINANCIAL HIGHLIGHTS
Government-Wide Financial Basis
x As of June 30, 2024, the City’s total net position Citywide (including all governmental and business type activities) totaled $244,932,754, a decrease from the prior Fiscal Year of $380,924 or 0.2%. o Governmental net position for the Fiscal Year totaled $112,558,918 a decrease of $8,463,635 or 7.0%. This decrease is due to revenues totaling $111,061,979 (program revenues of $26,691,371 and general revenue of $84,370,608), transfers out of $1,304,507, less activity expenses of $118,915,625 and prior adjustment of $694,518 due to a correction of capital assets.
o Business-type activity net position totaled $132,373,836, an increase of $8,082,711 or 6.5%. This change in net position is a result of operations (program revenues of $26,024,561, in addition to non-program revenues of $2,311,719, expenses of $23,751,796, transfers in of $1,304,507 and prior adjustment of $2,193,720 due to a correction of capital assets.
x Unrestricted net position, which may be used to meet the government’s on-going obligations within certain parameters and requirements, totaled $4,035,584. This is a decrease of $19,621,276 or 82.9% from FY 2022-2023.
x Governmental Activities
o Governmental Unrestricted Net Position of negative $32,011,264 decreased $21,653,695 from the prior year. Unrestricted net position is defined as total net position less the difference between capital assets and accumulated depreciation less associated bonding including premiums/discounts. The significant decrease can be primarily attributed to a large decrease in the pension deferred outflows. Overall pension expense was $17,208,873 in FY 2023-2024. See Note 11 for additional information. x Business Type activities
o Unrestricted Net Position of $36,046,848, increased by $2,032,419. The City anticipates a lower unrestricted net position in the near future when capital projects absorb working capital and correspondingly increase investment in capital assets.
x Citywide capital assets (land, work in progress, completed) net of depreciation increased by $23,672,190 (See Note 7). Governmental net capital assets increased by $18,188,567. Net capital additions of $25,139,807 were offset by depreciation expense of $6,832,469 and net disposals of $118,771. Business-type net capital assets increased by $5,266,043; additions were $6,836,166, which were offset by depreciation expense of $1,399,223 and net disposals of $170,900. Future expenditures for capital projects will not affect the overall net position of the government-wide position as the expenditure would be offset by an increase in non-current assets but may have an impact on the level of working capital. x The City’s debt increased by $4,620,820 during FY 2023-2024 (See Note 8). This increase is attributable to the renewal of a long-term lease with Manhattan Beach Unified School District for approximately $9 million reduced by the scheduled principal payments of various bond issuances. x General liability and workers compensation insurance claim reserves increased by $1,590,823 (See Note 15).
The City records 50% of the incurred but not reported (IBNR) reserves based on the 50% confidence level on the actuarial report.
7 Fund Financial Basis – Governmental Funds
x As of June 30, 2024, the General Fund balance was $40,381,761. Fund expenditures exceeded revenues by $3,650,344 due to regular operations. Net other sources (uses) was $5,346,253, resulting in a net change of $1,695,909.
x Governmental Funds (General, Capital Improvement and Special Revenue) revenue totaled $112,693,203, an increase of $8,636,011, (8.3%) from FY 2023-2024. The increase is primarily attributable to increased revenues in all categories except fines and miscellaneous revenues. x Governmental Funds expenditures totaled $120,262,579, up $18,876,587 (18.6%) from the prior year primarily driven by capital outlay expenditures for subscriptions and capital projects. Total governmental fund expenditures exceeded revenues by $7,569,376.
x General Fund net sources totaled $5,346,253. Transfers-out totaling $4,832,895 included $2,376,698 to the Stormwater Fund, $1,994,920 to the Capital Improvement Fund, $252,991 to the Street Lighting and Landscape Fund and $208,286 to internal services funds. Transfers in of $775,434 consisted of $500,000 from internal service funds and $275,434 from the County Parking Lot Fund. Transfers are required to maintain adequate funding levels or eliminate deficits (See Note 4 for more information).
USING THIS ANNUAL REPORT
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, which is comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Reporting on the City as a Whole
Government-wide financial statements: The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets, deferred inflows/outflows of resources and liabilities, with the difference between these items reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Manhattan Beach is improving or deteriorating.
The statement of activities presents information showing how the government’s net position changed during the most recent Fiscal Year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs on a full-accrual basis, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The government-wide statement of activities has two components:
1. Governmental Activities
This is a consolidation of all governmental funds and includes the General Fund, Capital Improvements Funds, Special Revenue Funds and Internal Service Funds. These funds are supported by taxes, intergovernmental revenues, grants, and charges for services. Expenses include materials and labor, depreciation, and amortization of prepaid pension obligations. Governmental fund expenditures for payment of principa l on long-term debt and capital assets are excluded. All intra-governmental charges and expenses and transfers within governmental funds are eliminated.
All internal service fund expenses and depreciation on capital assets are fully allocated to each functional program. Expenses are classified among the following programs: general government, public safety, culture and recreation, and public works. Program activities that produce revenues or receive grant support are applied against program expenses to yield the net expenses. Revenues that cannot be attributed to a specific program, 8 such as taxes and interest (e.g. General Revenues), are shown separately. The total of General Revenues, less net program expenses, generates the change in net position. Total net position of governmental activities differs from fund balances of governmental funds by long-term assets (capital and prepaid pension), long-term liabilities and the total of internal service fund net position.
2. Business Type Activities
All enterprise funds (Water, Wastewater, Stormwater and Parking Funds) are included in Business Type activities. These activities have been traditionally presented as enterprise funds and tie directly to the Statement of Revenues, Expenses, and Change in Net position – Proprietary Funds, as shown in the Funds section of this report.
The government-wide financial statements can be found on pages 25 to 27 of this report.
Reporting on the City’s Most Significant Funds
Fund financial statements: A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Manhattan Beach, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All 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 essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the Fiscal Year. In effect, the budgetary governmental fund statements are working capital flow of funds statements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions. Following the governmental funds Balance Sheet, and Statement of Revenues, Expenditures and Changes in Fund Balances , there are respective reconciliations of the fund balance to Statement of Net position , and Net Change in Fund Balances – total governmental funds to change in net position of governmental activities. As discussed above, the reconciliations include treatment of capital expenditures, depreciation, changes in capital assets, long-term debt, prepaid pension costs, full accrual versus modified accrual and change in net position of internal service funds.
The City of Manhattan Beach maintains thirteen individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General fund and Proposition C Fund, which are considered to be major funds.
Data from the other nonmajor governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in the fund financial statements section of this report.
The City of Manhattan Beach currently operates on an annual budget cycle. The FY 2023-2024 Budget was adopted on June 4, 2023. A budgetary comparison statement has been provided for each governmental fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 30 to 39 of this report.
Proprietary funds: Proprietary funds account for goods and services provided to customers and for cost recovery via service charges. There are two types of proprietary funds: enterprise funds which provide services to outside users (residents and businesses of Manhattan Beach), and internal service funds, which provide services to City departments. The City uses internal service funds to account for its fleet of vehicles, information technology, shared building and maintenance costs, and City-wide insurance costs. Because these services predominantly benefit the governmental function, they have been included within governmental activities in the government-wide financial statements and related intra-governmental charges and transfers have been eliminated accordingly, except for charges and transfers to the enterprise funds, which are quasi-internal transactions. 9 Proprietary fund financial statements provide the same type of information as the government-wide financial statements, only in more detail. All four internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements. Three of the City’s seven enterprise funds are considered major funds and presented as such in the fund financial statements. The three non-major funds, Stormwater, County Parking Lot, and State Pier and Parking lots, are presented individually in the combining statements.
The combining statements referred to earlier in connection with non-major governmental funds, proprietary and internal service funds are presented immediately following the notes to the financial statements. Combining and individual fund statements and schedules can be found on pages 110 to 140 of this report.
Notes to the financial statements: The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 43 to 90 of this report.
The City as Trustee
Other information: In addition to the basic financial statements and accompanying notes, this report also presents the City’s progress in funding its obligation to provide pension benefits to its employees and the budget-to-actual financial comparisons for the General Fund. The City has elected to present this information within the basic financial statement and financial statement sections of the report. Note 10 and Note 11 provides detailed analysis of City retirement plans.
All of the City’s fiduciary activities are reporting distinctly in a separate Statement of Fiduciary Assets and Liabilities.
These figures are not combined with other financial statements because the City cannot use these assets to finance present or future operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
As noted earlier, net position serves as an indicator of a government’s financial position. In the case of the City of Manhattan Beach, net position totaled $244,932,754 at June 30, 2024 versus $245,313,678 at June 30, 2023 – a decrease of $380,924. The ending net position is in line with prior year.
Net position of the City’s Governmental activities amounted to $112,558,918, a decrease from the prior year of $8,463,635. On the table of Net Position below, $126,578,644 is net investment in capital assets 1 such as land,
buildings, machinery, infrastructure, equipment and other improvements; restricted net position of $17,991,538 is equal to total of section 115 investment, restricted City capital projects and Special Revenue Fund resources that are restricted in use. Governmental activities’ unrestricted net position decreased by $21,653,695 from the prior year to negative $32,011,264 primarily due to a negative CalPERS rate of return of 6.1% that resulted in a large pension expense and net pension liability. The overall pen sion expense government-wide in FY 2023-2024 was $17,208,873. Significant components of non-current liabilities include 1) net pension liability of $23,454,350; 2) net OPEB liability of $3,213,906; 3) subscription and leases payable of $9,162,036; 4) bonds payable totaling $95,276,630; 5) accrued workers compensation and liability claims and judgments of $19,717,808; and 6) accrued employee benefits of $5,193,606.
Net position of the City’s Business-type activities totaled $132,373,836. This represents an increase from prior year of $8,082,711. Net investments in capital assets (land, buildings, machinery, equipment, etc.) totals $95,964,968, while $362,020 is restricted for business improvement district use. Significant components of non-current liabilities include: 1) bonds payable totaling $6,373,370 2) net pension liability of $833,327, 3) net OPEB liability of $318,677; 4) subscription payable of $13,054, and 5) accrued employee benefits of $169,661. Business-type activities’ unrestricted net position increased by $2,032,419 from the prior year to $36,046,848, primarily driven by an increase of capital project activity.
1 Net investment in capital assets is calculated by taking total capital assets net of depreciation, less corresponding bonds and lease payable, less the balance of unamortized bond premium, plus deferred charges on refunding bonds.
10 City of Manhattan Beach Net Position
The City’s total change in net position amounts to a decrease of $380,924. Governmental activities’ total net position decreased by $8,463,635. Business-type activities’ total net position increased by $8,082,711.
2024 2023 2024 2023 2024 2023
Current Assets 107,906,630$ 110,300,085$ 42,988,158$ 39,639,775$ 150,894,788$ 149,939,860$ Total Capital Assets Net of Depreciation 152,823,086 134,634,519 101,584,307 96,318,264 254,407,393 230,952,783 Other Non-Current Assets 22,922,368 23,843,400 - - 22,922,368 23,843,400 Total Assets 283,652,084$ 268,778,004$ 144,572,465$ 135,958,039$ 428,224,549$ 404,736,043$ Deferred Charge on Refunding 241,407$ 273,595$ -$ -$ 241,407$ 273,595$ Deferred Pension Related Items 43,155,092 64,359,227 1,006,726 1,020,839 44,161,818 65,380,066 Deferred OPEB Related Items 6,583,415 8,078,421 652,779 328,159 7,236,194 8,406,580 Deferred Outflows of Resources 49,979,914$ 72,711,243$ 1,659,505$ 1,348,998$ 51,639,419$ 74,060,241$ Current Liabilities $34,006,674 $33,762,866 $5,462,538 $4,379,791 $39,469,212 $38,142,657 Non-Current Liabilities 138,792,586 130,257,388 7,833,424 8,470,710 146,626,010 138,728,098 Total Liabilities 172,799,260$ $164,020,254 13,295,962$ $12,850,501 186,095,222$ 176,870,755$ Deferred Leases Inflows 22,380,509$ 23,463,957$ -$ -$ 22,380,509$ 23,463,957$ Deferred Pension Related Items 20,667,060 31,140,510 43,960 90,586 20,711,020 31,231,096 Deferred OPEB related items 5,226,251 1,841,973 518,212 74,825 5,744,463 1,916,798 Deferred Inflows of Resources 48,273,820$ 56,446,440$ 562,172$ 165,411$ 48,835,992$ 56,611,851$ Net Investment in Capital Assets 126,578,644$ 114,755,140$ 95,964,968$ 89,903,547$ 222,543,612$ 204,658,687$ Restricted 17,991,538 16,624,982 362,020 373,149 18,353,558 16,998,131 Unrestricted (32,011,264) (10,357,569) 36,046,848 34,014,429 4,035,584 23,656,860 Total Net Position 112,558,918$ 121,022,553$ 132,373,836$ 124,291,125$ 244,932,754$ 245,313,678$ Governmental Activities Business Type Activities Total
11 The following table condenses the Government-wide Statement of Activities and Change in Net Position for the Fiscal Years ending June 30, 2024 and June 30, 2023:
City of Manhattan Beach Changes in Net Position
Changes in Net Position - Governmental Activities
The City’s governmental activities in FY 2023-2024 decreased net position by $8,463,635 compared to a decrease of $35,414,841 in FY 2022-2023.
Total revenues increased by $6,032,080, while total expenses decreased by $22,078,233. Property taxes increased by $2,015,244, other taxes, which include sales and transient occupancy tax, increased by $2,620,140. Charges for services increased by $1,424,902. The decrease in total expenses of $22,078,233 is primarily driven by higher pension expense in the prior year resulting from a negative CalPERS rate of return.
2024 2023 2024 2023 2024 2023
Program Revenues:
Charges for Services 21,481,881$ 20,056,979$ 25,920,701$ 24,613,259$ 47,402,582$ 44,670,238$ Operating Contributions and Grants 2,017,113 4,778,148 103,860 - 2,120,973 4,778,148 Capital Contributions and Grants 3,192,377 3,111,998 - - 3,192,377 3,111,998 General Revenues:
Property Taxes 43,851,831 41,836,587 - - 43,851,831 41,836,587 Other Taxes 31,871,453 29,251,313 - - 31,871,453 29,251,313 Use of Money and Property 7,912,600 4,830,041 2,311,719 406,776 10,224,319 5,236,817 Other 734,724 1,164,833 - - 734,724 1,164,833
Total Revenues 111,061,979$ 105,029,899 $ 28,336,280 $ 25,020,035$ 139,398,259$ 130,049,934 $ Expenses:
General Government 20,658,755$ 18,744,766$ -$ -$ 20,658,755$ 18,744,766$ Public Safety 68,071,122 93,202,238 - - 68,071,122 93,202,238 Public Works 16,407,350 16,215,433 - - 16,407,350 16,215,433 Culture & Recreation 11,262,864 10,217,475 - - 11,262,864 10,217,475 Interest on Long-Term Debt 2,515,534 2,613,946 - - 2,515,534 2,613,946 Water, Waste, Storm - - 18,265,447 15,147,578 18,265,447 15,147,578 Parking - - 5,486,349 3,520,899 5,486,349 3,520,899
Total Expenses 118,915,625$ 140,993,858 $ 23,751,796 $ 18,668,477$ 142,667,421$ 159,662,335 $ Revenues Over Expenses (7,853,646) (35,963,959) 4,584,484 6,351,558 (3,269,162) (29,612,401) Special Items - - - - - -
Transfers In (Out) (1,304,507) (547,908) 1,304,507 547,908 - - Increas e (Decreas e) in Net Pos ition (9,158,153)$ (36,511,867)$ 5,888,991$ 6,899,466$ (3,269,162)$ (29,612,401)$ Net Position - Beginning 121,022,553$ 156,437,394 $ 124,291,125 $ 117,279,862 $ 245,313,678 $ 273,717,256 $ Restatement of Net Position 694,518 1,097,026 2,193,720 111,797 2,888,238 1,208,823 Net Position - June 30 (Year End) 112,558,918$ 121,022,553 $ 132,373,836 $ 124,291,125 $ 244,932,754 $ 245,313,678 $ Governmental Activities Business Type Activities Total
12 Total governmental activities revenue of $111,061,979, excluding transfers-out of $1,304,507, is broken out as follows:
Functional expenses (excluding interest on debt) for the years ending June 30, 2024 and June 30, 2023 were as follows:
The total cost of services decreased from the prior year by $21,979,821 (15.9%), while the net cost of services decreased by $20,724,067 (18.8%) from the prior year. The decrease is primarily attributable to recording significant pension expense in the prior year resulting from the recognition of a negative CalPERS rate of return of 6.1%. Total costs for Public Safety decreased by $25,131,116, General Government increased by $1,913,989, Culture and Recreation increased by $1,045,389, and Public Works increased by $191,917.
2024 2023 2024 2023
General Government 20,658,755 18,744,766 (15,003,418) (10,100,417) Public Safety 68,071,122 93,202,238 (63,072,495) (88,504,632) Culture and Recreation 11,262,864 10,217,475 (6,647,052) (5,706,697) Public Works 16,407,350 16,215,433 (4,985,755) (6,121,041) Total $116,400,091 $138,379,912 ($89,708,720) ($110,432,787) Total Cost of Services Net Cost of Services
13 The following chart illustrates governmental revenues and expenses by function for the year ended June 30, 2024.
Change in Net Position - Business Type Activities
In Fiscal Year 2023-2024, total revenues for the City’s business-type activities amounted to $28,336,280. Operating revenues totaled $26,024,561 and interest revenues totaled $2,311,719. Expenses totaled $23,751,796 of which operating expenses equaled $23,600,700, and non-operating expenses (including debt interest expense) totaled $151,096. Total income from operations was $2,300,001 while net income before transfers was negative $1,519,356. After net transfers-in totaling $1,981,110, net position increased by $461,754 compared to an increase of $6,899,466 in FY 2022-2023. The restatement of net position was due to a correction of prior year capital assets totaling $2,173,042.
Operating Revenues by Source - Business Type Activities FY 2024
14 Operating Income varied across the business-type activities in FY 2023-2024. A year-over-year comparison is presented below. Further analysis of the major funds is discussed later in this report.
FUND FINANCIAL STATEMENTS
Governmental Funds
As of the end of the 2024 Fiscal Year, the City’s governmental funds ending fund balances totaled $66,591,363, an increase of $18,717 in comparison with the prior year.
Within the Governmental Funds total, $34,991,414 (52.5%) constitutes unassigned fund balance. The unassigned fund balance exists only in the General Fund. The remainder of the fund balance ($31,599,949) is non-spendable, restricted or committed indicating these funds are not available for new spending because it has already been committed for on-going capital projects, advanced to other funds for legally restricted use, long term notes receivable, or for legally-required debt service reserves.
Notwithstanding Governmental Accounting Standards Board (GASB) pronouncements, the City Council has established earmarks within the unassigned category for working capital and budgetary capital planning initiatives.
Of the nearly $35 million unassigned governmental fund balance noted above, $22.6 million has been designated by City Council policy.
General Fund
The General Fund is the chief operating fund of the City of Manhattan Beach. At the end of the FY 2023-2024, unassigned fund balance of the General Fund was $34,991,414 while total fund balance was $40,381,761. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 4.1 months of total General Fund expenditures, while total fund balance represents 4.7 months of General Fund expenditures.
During the year, General Fund expenditures exceeded revenues by $3,650,344. This is primarily driven by recording $9,406,018 subscriptions as capital outlay due to GASB 96 – Subscription Based IT Arrangements (SBITAs). The subscriptions were offset by financing source of $9,403,714. After factoring in net transfers out of $4,057,461, there was a net increase in fund balance of $1,695,909.
Net transfer activity of negative $4,057,461 were due to the following transfers:
x $2,376,698 was transferred to the Stormwater Fund to relieve a deficit fund balance due to operations; x $1,994,920 was transferred to the Capital Improvement fund to provide funding for capital projects; x $500,000 was transferred from the Information Technology Fund to the General Fund to alleviate excess fund balance;
15 x $275,434 of excess revenues from the County Parking Lot Fund was transferred to the General Fund in line with the contract with the County of Los Angeles;
x $252,991 was transferred to the Street Lighting and Landscape Fund to relieve a deficit fund balance; x $208,286 was transferred to the Fleet Fund for the purchase of vehicles.
Please see Note 4 for more information.
Capital Improvement Fund
Capital Project funds serve to plan and manage the construction and maintenance of non-enterprise projects which are funded through dedicated revenue sources and General Fund transfers. The City adopts a five-year capital project plan in which City Council priorities are planned. The Capital Improvement fund is a major fund in FY 2023-2024 while the Bond Construction Fund and Underground Assessment District Fund are non-major funds covered in that City-wide plan.
At the end of Fiscal Year 2023-2024, total fund balance of $12,706,430 in the Capital Improvement Fund was committed to capital projects.
During Fiscal Year 2023-2024, the Capital Improvement Project Fund balance increased by $491,742 (4.0%) due to operating transfers in from the General Fund of $1,994,920. Total revenues of $3,645,600 were offset expenditures of $5,148,778.
Of the $3,645,600 in total revenues to the Capital Improvement Fund, certain dedicated revenues described below totaled $1,596,101 in FY 2023-2024. The following revenues are earmarked for funding general government capital improvement projects in the effort to maintain and enhance City infrastructure:
1. Hotel Tax: 15% of the Transient Occupancy Tax has been dedicated to funding CIP’s, generating $920,868 in revenue for the year, which is $25,455 (2.8%) above prior year.
2. Parking Meter Rates: Fifty cents of the $2.00 per hour on-street parking meter rates is dedicated to capital improvements. This source generated revenue of $596,949, up $47,244 (8.6%) from the prior year.
3. Parking Citation Rates: Most parking citations include four dollars dedicated to the CIP fund. For FY 2023-2024, revenue of $78,284 was realized; decrease of $19,620 (20.0%) from the prior year.
Capital Improvement Fund expenditures totaled $5,148,778. Capital outlay expenditures totaled $3,796,195, operating expenditures of $184,456, and debt service of $1,168,127. Capital project expenditures exceeding $500,000 consisted of:
x $940,556 – Various street related capital projects
x $562,100 – Polliwog Park Playground Resurfacing and Equipment Replacement Project x $539,529 – Citywide Security Camera
x $501,513 – Marine Ave Synthetic Turf Replacement
x $1,252,497 – Other projects in design or construction including various facility projects and HVAC replacement projects
Other Governmental Funds
The Street Lighting Fund continues to run deficits each year. For FY 2023-2024, expenditures exceeded revenues by $298,037. Since there is no fund balance to draw upon, the General Fund contributes the entire amount to make up for the deficit in the Street Lighting Fund. These contributions will be necessary until a Proposition 218 assessment vote is successful in raising the assessment rates and revenues. In Fiscal Year 2023-2024, $252,991 was transferred in providing an ending fund balance of $21,843 for future extraordinary expenditures.
Other non-major governmental funds include all Special Revenue funds used exclusively to account for intergovernmental and assessment proceeds, which are restricted in use by law. The funds within this category include the Gas Tax, Prop C and A funds, the Measure R, Measure M, and Measure W funds, the AB2766 fund, the Asset Forfeiture fund, Police Safety Grant fund, the Bond Construction Fund, and the Underground Assessment Fund. Monies received in these funds are primarily used for the maintenance of streets, parks, local transportation programs, the purchase of safety and fuel-efficient equipment, and bond funded construction. 16 Underground Assessment District Fund
In Fiscal Year 2019-20, residents in three district (19-4, 19-12, and 19-14) approved the undergrounding of utilities by a Proposition 218 ballot. As a result, the Manhattan Beach City Council authorized the issuance of bonds to finance the Utility Underground Project in these three assessment districts. Bond assessments are paid by homeowners over a period of 20-years through the annual consolidated property tax bill.
Bond proceeds and payoffs totaled $18,573,325 was received in FY 2019-20 to fund the project and will be drawn down upon as the project progresses. In FY 2023-2024, revenues of $121,150 were reported for interest income and investment returns and expenditures totaled $699,196, resulting in an ending fund balance of $1,444,693.
Proprietary Funds
The City’s proprietary funds consist of enterprise funds and internal service funds. The enterprise funds include Water, Wastewater and Parking Funds (major funds), as well as Stormwater and both the County and State Pier & Parking Lot Funds (which are considered non-major). Internal service funds include Insurance Reserve, Information Technology, Fleet Management and Building Maintenance and Operations.
Enterprise (Business) Funds
At year-end, total net position of all enterprise funds amounted to $132,373,836. Net investment in capital assets totaled $95,964,968 and $362,020 is restricted for a business improvement district. The balance of $36,046,848 is unrestricted net position. This presentation mirrors the statement of net position of Business Type Activities included in the Government-wide Financial Statements section.
Overall, the combined net income of enterprise funds was $2,320,001 before transfers. Operations resulted in a $5,888,991 increase in net position. Transfer activity included a net transfer-in of $1,304,507 which included a transfer-in of $2,376,698 to the Stormwater Fund from the General Fund, a transfer out of $275,434 from the Parking and County Parking Lots Fund to the General Fund, and a transfer of $796,757 from various enterprise funds to the Fleet Fund for the purchase of vehicles.
Several enterprise funds are worth noting:
x The Water Fund has been utilizing its reserves for planned capital improvements needed to sustain the utility’s operation and infrastructure. Net income from operations totaled $1,573,450, a decrease from the prior year which had net operating income of $3,016,576. Revenue from sales decreased by 9.7%, while operating expenses (labor, materials, services, etc.) increased by 25.0% due to the capitalization of more project expenditures in FY 2022-2023. Revenues were impacted by lower consumption after unprecedented rains and conservation efforts in preparation for future droughts. A water rate study will be conducted in 2025 to ensure fund balance is sufficient to meet operational and capital demands.
x The Wastewater fund net operating income for FY 2023-2024 was $833,298 versus $931,166 in FY 2022-2023, a decrease of $97,868, or 10.5%. Operating revenues increased $345,053 (10.5%) compared to the prior year while operating expenses increased $442,921 or 18.9%. It is important to note that Wastewater revenues are based on water consumption, and increases or decreases in consumption due to water conservation efforts also impact Wastewater revenues.
x The Parking Fund net operating income for FY 2022-2023 was $1,685,590, down $381,361 or 18.5% from the prior year. Operating revenue increased $72,835, up 1.7% compared to the prior year. Total operating expenses of $2,688,762 were up $454,196 or 20.3% from the prior year primarily due to an increase in contract services and material and service charges. Total net position for FY 2023-2024 was $18,101,216 while unrestricted net position is $5,131,591. Future capital improvement projects as well debt service on bond principal will require an increase in cash flow.
x The Storm Drain Fund net operating loss in FY 2023-2024 totaled $883,627. This loss is a continuation of prior year net losses due to the fund operating at a deficit for many years. The combination of fixed assessments (that have remained unchanged since 1996) and rising costs required a General Fund cash subsidy. The General Fund transferred $2,376,698 in FY 2023-2024 to relieve the operational deficit and fund necessary capital improvements. Current unrestricted net position is $4,702,332. A fee increase was approved by voters through a Proposition 218 special mail in ballot election in January 2024. The fee increase is expected to generate approximately $2.5 million annually starting FY 2024-2025 and eliminating the need for General Fund subsidies.
17 Internal Service Funds
Total net position of the Internal Service Funds was $7,451,814. Unrestricted net position of the internal service funds at the end of the year was $1,520,645, a decrease of $1,718,476 from the prior year which can be primarily attributable to an increase in liabilities. Total net position increased by $60,952.
The Insurance Fund net position at year-end was negative $468,825, compared to $186,659 in the prior year due to an increase in liabilities, primarily in claims and judgements. Net position decreased since expenses exceeded revenues by $642,813. Claims expense decreased by $639,096 to $8,496,064. For comparison, prior year workers compensation and liability paid claims expense are below:
FY 2023-2024 $8.50 million
FY 2022-2023 10 million
FY 2021-2022 9.60 million
FY 2020-2021 5.74 million
FY 2019-2020 5.65 million
FY 2018-2019 5.10 million
FY 2017-2018 8.08 million
FY 2016-2017 6.35 million
FY 2015-2016 6.66 million
FY 2014-2015 6.56 million
The unpredictable nature of workers compensation and liability claims activity causes these fluctuations in claims expense from year to year. The City continually looks for ways to proactively manage risk and reduce these costs.
Net position in the Fleet Fund increased by $1,192,259, to $8,608,351. Capital purchased totaled $2,172,813 in FY 2023-2024. Accumulated working capital will be used for the replacement of vehicles such fire trucks, maintenance trucks and police vehicles.
Net position in the Building Maintenance and Operations Fund is negative $455,970 due to the Pension Obligation Bonds (POB) Payable of $583,954, Net Pension Liability of $235,125 and Net OPEB liability of $4,021. The negative net position will be relieved by increased charges to user departments, which will be used to pay down liabilities.
The Information Systems Fund has a net position of negative $231,742. The operating expenditure is offset by departmental charge-outs borne primarily by the General Fund.
General Fund Budgetary Highlights
Estimated and Actual Revenues
General Fund revenues were estimated at $93,615,491 in the FY 2023-2024 Adopted Budget. Subsequent budget changes were due to the following amendments:
x $105,653 Opioid Settlement Funds
x $75,893 SB 1383 Grant
x $75,000 Office of Traffic Safety Grant
x $27,832 Increase to Homelessness Grant
x $15,000 related to donations for Juneteeth programming
Actual General Fund Revenues of $99,768,381 (excluding transfers) exceeded the final budget of $94,290,394 by $5,477,987, primarily due to the taxes and use of money and property categories exceeding budget.
Revenues other than property tax that are driven by the economy such as sales tax, transient occupancy tax (TOT), and business license tax. Sales tax was in line with the budget and TOT exceeded the budget by $1,159,605.
Business License tax exceeded budget by $572,317.
18 Appropriations and Expenditures
The General Fund adopted budget included $93,009,510 in appropriations. The final amended General Fund appropriations budget increased overall to $95,638,326 due to several budget adjustments including the carry forward of prior year encumbrances and budget adjustments approved by City Council as follows:
x $771,804 for Pension Fund expenditures
x $292,158 for various staffing adjustments
x $105,653 Opioid Settlement Funds
x $91,727 for Outdoor Dining Study
x $81,875 for Utility Undergrounding Private Utility Conversion x $75,000 Office of Traffic Safety Grant
x $50,000 as seed funding for a non-profit (LoveMB)
x $35,970 for Coyote Management
x $37,717 to insource pressure washing
x $30,000 for Juneteeth programming
x $27,832 Increase to Homelessness Grant
Overall, expenditures exceeded revenues (excluding transfers) by $3,650,344. When accounting for the net transfers out of $4,057,461 and the financing of lease and subscriptions of $9,403,714, the net change results in an increase in fund balance of $1,695,909. The ending fund balance was $40,381,761 and should provide sufficient liquidity to meet General Fund expenditures in Fiscal Year 2024-25.
Capital Asset and Debt Administration
Capital Assets: Government-wide, the City’s investment in capital assets (net of accumulated depreciation) as of June 30, 2024 is $254,002,919. This is an increase from the prior year of $23,672,715. This investment in capital assets includes land, buildings, park improvements, roadways, sewer, storm drains, vehicles, computer equipment, furniture and other equipment.
City of Manhattan Beach Capital Assets
(Net of depreciation)
Governmental
Capital assets additions totaled $8,016,200 for projects in progress and $16,429,089 for capital additions for depreciable assets for a total capital asset addition of $24,445,289. Additionally, a restatement of $694,518 was recognized to capitalize prior year assets. This increase was offset by depreciation of $6,832,469 and net deletions of negative $118,771, resulting in a net increase in assets of $18,188,567.
Business-type
During the Fiscal Year, Business-type capitalized net expenditures totaled $4,663,122 in capital additions.
Additionally, a restatement of $2,173,044, was recognized to capitalize the prior year assets. This increase was offset by depreciation of $1,399,223 and deletion of $170,900, resulting in a net increase in assets of $5,266,043.
2024 2023 2024 2023 2024 2023
Land $33,634,565 $33,634,565 $2,607,434 $2,607,434 $36,241,999 $36,241,999 Buildings 26,873,390 27,728,007 13,486,896 15,078,724 40,360,286 42,806,731 Machinery & Equipment 917,155 1,001,180 2,750,382 1,485,316 3,667,537 2,486,496 Vehicles 5,857,097 3,887,625 - - 5,857,097 3,887,625
Infrastructure 48,194,953 46,277,452 27,815,284 28,599,902 76,010,237 74,877,354 Intangible Assets 719,720 809,686 88,335 99,375 808,055 909,061 Invested in Joint Venture (RCC) 1,651,391 1,818,776 - - 1,651,391 1,818,776 Right-To-Use Assets 8,463,404 1,057,520 - - 8,463,404 1,057,520 SBITAs 397,229 599,190 7,770 23,389
Work in Progress 26,114,182 17,820,518 54,828,206 48,424,124 80,942,388 66,244,642 Total $152,823,086 $134,634,519 $101,584,307 $96,318,264 $254,002,394 $230,330,204 TotalBusiness-Type ActivitiesGovernmental Activities
19 Please refer to Note 7 for additional information on the City’s capital assets.
Long-Term Liabilities: Total long-term liabilities Citywide (excluding unamortized bond premiums) equal $135,906,163, an increase of $4,620,618 from Fiscal Year 2022-2023. The increase was attributable to an increase of leases payable of $7,622,570 and an increase to insurance reserves of $1,590,823. Governmental liabilities increased by $5,395,685 while business type liabilities decreased by $774,867. The following table is a condensation of Note 8, Note 9 and Note 15.
City of Manhattan Beach Outstanding Liabilities
(Excluding Bond Premium)
Principal obligations for existing long-term bonded debt were reduced in accordance with existing debt service schedules. For the details regarding components of long-term liabilities including debt service schedules, please refer to Note 8.
Ongoing claims in Insurance Claim Reserves are due to liability and workers compensation claims. The increase of $1,590,823 is due the increase of liability claim reserves of $1,066,339 while worker’s compensation reserves increased by $524,484.
State statutes limit the amount of general obligation debt a governmental entity may issue to 3.75% of its total assessed valuation. The current debt limitation for the City of Manhattan Beach (Fiscal Year 2023-2024) is $795 million.
GASB 68 AND EFFECT OF PENSION ACTIVITY ON NET POSITION
The City contracts with the California Public Employees Retirement System (CalPERS) to provide retirement benefits for all full-time employees and qualified part-time employees. City plans cover qualified miscellaneous and safety employees as further described in Note 10.
The implementation of GASB 68 in Fiscal Year 2014-15 fundamentally changed the presentation of financial statements. Public agencies are required to recognize net pension liabilities (NPL), which are equal to the gross pension liability less fiduciary assets. Further, public agencies rely on CalPERS to provide valuations of these pension-related fiduciary assets and liabilities. Due to the timing of CalPERS reports, the measurement date for the City’s retirement reporting lags by one year.
CalPERS makes actuarial assumptions and projections regarding the population of employees such as salary progression, expected date of retirement, mortality, turnover and, most importantly, the rate of return on investments. With this information, CalPERS actuaries determine the accrued pension liability. CalPERS also determines the value of its fiduciary net position (cash and investments). Ideally, the difference between the accrued pension liability and fiduciary net position would be zero. However, in recent years, CalPERS actual results have deviated significantly from assumptions and investment return projections.
It is fundamental to keep in mind that pension results presented in any year’s ACFR, is based on a measurement date as June 30, prior year. Therefore, measurement date for this year’s ACFR is June 30, 2023. 2024 2023 2024 2023 2024 2023
Marine Avenue Park Refunding COPs $3,730,000 $4,075,000 - - 3,730,000 4,075,000 Capital Equipment Lease - - - - - -
Police & Fire Facility Refunding COPs 4,955,000 5,530,000 - - 4,955,000 5,530,000 2021 Fire Station No. 2 COPs 7,075,000 7,210,000 - - 7,075,000 7,210,000 Leases Payable 8,718,073 1,095,503 - 8,718,073 1,095,503 Subscription Payable 443,963 584,503 13,053 25,846 457,016 610,349 Accrued Employee Leave & Benefits 5,193,806 4,422,604 169,660 220,104 5,363,466 4,642,708 Metlox and Water/Wastewater Refunding COPs - - - - - - Metlox Parking Refunding COPs - - - - - -
2021 Refunding COPs - - 4,695,000 5,335,000 4,695,000 5,335,000 Pension Obligation Bonds 79,516,630 82,910,000 1,678,370 1,750,000 81,195,000 84,660,000 Insurance Claim Reserves 19,717,808 18,126,985 - - 19,717,808 18,126,985 Total Long Term Liabilities $129,350,280 $ 123,954,595 $6,556,083 $7,330,950 $135,906,363 $131,285,545 Current portion of Long Term (due within one year) 18,789,763 17,464,751 785,950 769,617 19,575,713 18,234,368 Long Term Liabilities - Non Current $110,560,517 $ 106,489,844 $5,770,133 $6,561,333 $116,330,650 $113,051,177 Governmental Activities Business-Type Activities Total
20 In May 2021, the City has issued $91 million in pension obligations bonds (POBs), which virtually eliminated unfunded liability as of FY 2019 by replacing it with bonded debt. The decision to issue POBs was made based on (1) an escalating amortization table that would incrementally increase NPL payments up to $4 million annually in the next 10 years, (2) historically low interest rates, and (3) a CalPERS discount rate of 7.15%. By issuing the POBs, the City was able to finance 100% of the current NPL at a true interest cost of 2.72%, 4.43% lower than the CalPERS discount rate at the time of issuance. Moreover, the POBs allow the City to budget debt service payments at a level of $5.5 million annually rather than trying to balance the budget for escalating NPL payments that will eventually rise up to $10 million by 2032. While there is little effect to the City’s net position in the short term, the POBs are estimated to save the City $43.5 million in NPL payments over the next 25 years.
In Fiscal Year 2020-2021, CalPERS generated 21.3% investment returns, which triggered a risk mitigation policy that CalPERS put in place to lower the discount rate and derisk the plan. Due to the high returns generated in FY 2020-2021, the discount rate was lowered from 7% to 6.8%. In the years that CalPERS does not generate investment returns equal to or higher than the discount rate, it typically results in additional unfunded liability for the City. By lowering the discount rate, it enables CalPERS to meet their investment goals more easily.
In Fiscal Year 2023-2024, the City recorded net pension liability of $24,287,677, primarily due to CalPERS reporting net investment returns of -6.1% in Fiscal Year 2021-2022 and 5.8% in FY 2022-2023. The net pension liability can significantly impact the City’s reported Net Position. Since the Governmental Funds absorb over 95% of pension expense (general government, public safety, public works and recreation employees), the result is a net pension liability of $23,454,350 in the net position of Governmental activities. Due to the significantly smaller employee population in Business-type activities, these funds have a much smaller net pension liability of $833,327.
The City’s pension expense for CalPERS was $17,179,889 in FY 2023-2024 (based on the measurement date of June 30, 2023), changes in net deferrals decreased $10,730,685 and NPL increased by $8,517,446. The City’s contribution (deferred) to CalPERS in FY 2023-2024 was $5.6 million. Contributions in FY 2024-2025 are budgeted at $5.8 million.
Note 11 provides a breakdown by group (Miscellaneous and Public Safety) and other relevant information. Of particular importance is the sensitivity analysis table indicating outcomes of changes to CalPERS assumed discount rate. For the measurement year ending June 30, 2023, the discount used for measurement purposes was 6.8%.
As indicated in the sensitivity analysis table, any reduction in the discount rate leads to an increased net pension liability as well as greater current service costs. The City recognizes these rising costs and is consistently working on mitigating impacts to City services. This is disclosed in Note 11 as a subsequent event to the actuarial methods and assumption.
Managing future pension costs and meeting retirement obligations remain one of the City’s biggest challenges.
Over 95% of retirement costs are attributable to the City’s Governmental Funds and growing pension costs have the potential to crowd out other funding needs. The City has therefore developed an Unfunded Pension Liability Policy to provide a guideline on addressing future NPL. Future pension costs and liabilities will be monitored continuously and addressed so that it does not grow substantially.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
In June 2024, the City Council adopted the budget for FY 2024-2025. The original budget estimates General Fund revenues at $99,093,155 (compared to FY 2023-2024 at $93,615,461) and expenditures of $99,713,616 (compared to FY 2023-2024 at $93,009,510), resulting in an anticipated deficit of $620,461 in FY 2024-2025.
Of the City’s major General Fund revenue sources, the single biggest revenue source, property tax, has remained stable. Property tax is expected to increase in FY 2024-2025 by 5.0% over the FY 2023-2024 budget. Sales tax is projected to increase 2.7% from the FY 2023-2024 budget. Additionally, a new local transactions and use tax (Measure MMB) was approved by voters in November 2024. Taking effect in April 2025, this new revenue source is anticipated to collect about $5.2 million per fiscal year. Modest growth in Transient Occupancy Taxes and Business License Taxes is also expected to trend with our local economy diversified in retail and hospitality.
General Fund budgeted expenditures are higher by $6,704,106 compared to Fiscal Year 2023-2024 budget primarily due to increases in contract services, departmental supplies, and adjustments for inflation. Budgeted salaries and benefits ($58,686,751) increased by $3,077,295 compared to the FY 2023-2024 budget due to an increase in staffing and overtime. Materials and services ($20,883,581) are higher by $1,725,708 due to an increase in costs, primarily in contract services.
21 The City continues its focus on capital improvements. Expenditures of $177.0 million (including carryover projects) are planned over the next five years for utility, street and facility projects. $60.6 million of that amount is for water, wastewater, and stormwater projects, but this does not include future mandated improvement projects under the federal National Pollution Discharge Elimination System (NPDES). Approximately $77.6 million has been budgeted for street and roadway needs as well as $38.8 million for general facilities (including parking facilities). These projects will ensure continued functionality of vital systems, traffic flow and community facilities.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the financial position of the City of Manhattan Beach for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, 1400 Highland Avenue, Manhattan Beach, California 90266. 22 GOVERNMENT-WIDE
FINANCIAL STATEMENTS
23 24
CITY OF MANHATTAN BEACH, CALIFORNIA
Statement of Net Position
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 92,664,438$ 40,851,368 $ 133,515,806$ Receivables:
Accounts 1,306,681 1,256,313 2,562,994
Taxes 3,969,957 - 3,969,957
Accrued interest 890,344 - 890,344
Due from other governments 1,035,664 - 1,035,664
Grants 2,558,804 - 2,558,804
Notes and loans 49,088 - 49,088
Leases 22,922,368 - 22,922,368
Restricted assets:
Cash and investments 3,599,985 - 3,599,985
Cash with fiscal agent 1,305,903 117,382 1,423,285
Due from OPEB trust fund 361,752 - 361,752
Inventories 107,520 763,095 870,615
Prepaid costs 56,494 - 56,494
Capital assets (not being depreciated) 59,748,747 57,435,640 117,184,387 Capital assets (net of accumulated depreciation/amortization) 93,074,339 44,148,667 137,223,006 Total assets 283,652,084 144,572,465 428,224,549
DEFERRED OUTFLOWS OF RESOURCES
Deferred amount on refunding 241,407 - 241,407
Pension-related 43,155,092 1,006,726 44,161,818
OPEB-related 6,583,415 652,779 7,236,194
Total deferred outflows of resources 49,979,914 1,659,505 51,639,419
LIABILITIES
Accounts payable 4,365,156 4,128,229 8,493,385
Accrued liabilities 3,072,502 334,342 3,406,844
Accrued payroll 1,266,192 - 1,266,192
Accrued interest 221,061 107,720 328,781
Deposits payable 4,164,174 106,297 4,270,471
Unearned revenue 2,127,826 - 2,127,826
Noncurrent liabilities:
Due within one year: bonds, notes, leases, SBITA, claims, and compensated absences 18,789,763 785,950 19,575,713
Due in more than one year:
Net pension liability 23,454,350 833,327 24,287,677
Net OPEB liability 3,213,906 318,677 3,532,583
Bonds, notes, leases, SBITA, claims, and
compensated absences 112,124,330 6,681,420 118,805,750
Total liabilities 172,799,260 13,295,962 186,095,222
DEFERRED INFLOWS OF RESOURCES
Pension-related 20,667,060 43,960 20,711,020
OPEB-related 5,226,251 518,212 5,744,463
Lease-related 22,380,509 - 22,380,509
Total deferred inflows of resources 48,273,820 562,172 48,835,992
NET POSITION
Net investment in capital assets 126,578,644 95,964,968 222,543,612 Restricted:
Public safety 778,900 - 778,900
Parks and recreation 1,174,175 - 1,174,175
Public works 302,405 - 302,405
Capital projects 11,052,540 - 11,052,540
Pension Benefits 3,599,985 - 3,599,985
Debt service 1,083,533 - 1,083,533
Business improvement districts - 362,020 362,020
Unrestricted (32,011,264) 36,046,848 4,035,584
Total net position 112,558,918$ 132,373,836 $ 244,932,754 $ June 30, 2024
Primary Government
See Notes to Financial Statements.
25 CITY OF MANHATTAN BEACH, CALIFORNIA
Statement of Activities
For the Year Ended June 30, 2024
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Functions/Programs:
Primary government:
Governmental activities:
General government 20,658,755$ 5,000,111$ 349,705$ 305,521$ Public safety 68,071,122 4,623,538 375,089 -
Culture and recreation 11,262,864 4,615,812 - -
Public works 16,407,350 7,242,420 1,292,319 2,886,856
Interest on long-term debt 2,515,534 - - -
Total governmental activities 118,915,625 21,481,881 2,017,113 3,192,377 Business-type activities:
Water 14,223,442 15,770,377 86,901 -
Storm drain 1,243,978 357,941 - -
Wastewater 2,798,027 3,619,564 16,959 -
Parking 2,797,376 4,374,352 - -
County Parking Lot 724,371 1,022,570 - -
State Pier and Parking Lot 1,964,602 775,897 - -
Total business-type activities 23,751,796 25,920,701 103,860 - Total primary government 142,667,421$ 47,402,582$ 2,120,973$ 3,192,377$ General revenues and transfers:
General revenues:
Property taxes
Sales taxes
Transient occupancy taxes
Franchise taxes
Business licenses taxes
Other taxes
Use of money and property
Other
Transfers
Total general revenues and transfers
Change in net position
Net position-beginning
Restatement of net position - correction of an error
Net position-ending
Program Revenues
See Notes to Financial Statements.
26 Governmental Business-Type
Activities Activities Total
(15,003,418)$ -$ (15,003,418)$
(63,072,495) - (63,072,495)
(6,647,052) - (6,647,052)
(4,985,755) - (4,985,755)
(2,515,534) - (2,515,534)
(92,224,254) - (92,224,254)
- 1,633,836 1,633,836
- (886,037) (886,037)
- 838,496 838,496
- 1,576,976 1,576,976
- 298,199 298,199
- (1,188,705) (1,188,705)
- 2,272,765 2,272,765
(92,224,254) 2,272,765 (89,951,489)
43,851,831 - 43,851,831
13,985,150 - 13,985,150
9,797,116 - 9,797,116
1,435,830 - 1,435,830
5,422,317 - 5,422,317
1,231,040 - 1,231,040
7,912,600 2,311,719 10,224,319
734,724 - 734,724
(1,304,507) 1,304,507 -
83,066,101 3,616,226 86,682,327
(9,158,153) 5,888,991 (3,269,162)
121,022,553 124,291,125 245,313,678
694,518 2,193,720 2,888,238
112,558,918$ 132,373,836 $ 244,932,754 $
Primary Government
Net (Expenses) Revenues and
Changes in Net Position
See Notes to Financial Statements.
27 28
FUND FINANCIAL STATEMENTS
29 CITY OF MANHATTAN BEACH, CALIFORNIA
Balance Sheet
Governmental Funds
June 30, 2024
Capital
Projects Funds
Total Total
Nonmajor Governmental
General Funds Funds
ASSETS
Cash and investments 39,683,833$ 13,068,162 $ 14,856,532 $ 67,608,527$ Receivables (net of allowance for uncollectible):
Accounts 1,288,731 - 6,331 1,295,062
Taxes 3,866,864 103,093 - 3,969,957
Accrued interest 890,344 - - 890,344
Due from other governments 283,899 - 408,597 692,496
Grants 184,450 699,996 2,017,526 2,901,972
Notes and loans 49,088 - - 49,088
Leases 22,922,368 - - 22,922,368
Due from OPEB Trust Fund 361,752 - - 361,752
Inventories 2,099 - - 2,099
Prepaid costs 56,494 - - 56,494
Restricted assets:
Cash and investments 3,599,985 - - 3,599,985
Cash and investments with fiscal agents 1,083,533 222,370 - 1,305,903 Total assets 74,273,440$ 14,093,621$ 17,288,986$ 105,656,047$
LIABILITIES
Accounts payable 1,771,230$ 854,277 $ 864,353 $ 3,489,860$ Accrued liabilities 2,426,377 231,159 414,966 3,072,502 Accrued payroll 1,266,192 - - 1,266,192
Deposits payable 4,162,433 - 1,741 4,164,174
Unearned revenues 1,613,833 - 513,993 2,127,826
Interest payable - 218,759 - 218,759
Total liabilities 11,240,065 1 ,304,195 1,795,053 14,339,313
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 271,105 82,996 1,990,761 2,344,862 Lease-related 22,380,509 - - 22,380,509
Total deferred inflows of resources 22,651,614 82,996 1,990,761 24,725,371
FUND BALANCES (DEFICITS)
Nonspendable 649,540 - - 649,540
Restricted 4,683,518 - 13,308,020 17,991,538
Committed - 12,706,430 195,152 12,901,582
Assigned 57,289 - - 57,289
Unassigned 34,991,414 - - 34,991,414
Total fund balances (deficits) 40,381,761 12,706,430 13,503,172 66,591,363 Total liabilities, deferred inflows of resources,
and fund balances (deficits) 74,273,440$ 14,093,621$ 17,288,986$ 105,656,047$ Capital
Improvement
See Notes to Financial Statements.
30 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2024
Amounts reported for governmental activities in the Statement of Net Position are different because:
Total fund balances - governmental funds 66,591,363$
146,828,264
Deferred outflows-pension related 41,750,992$
Deferred outflows-OPEB related 6,375,431
Deferred inflows-pension related (20,602,895)
Deferred inflows-OPEB related (5,061,143)
Total deferred outflows and inflows related to postemployment benefits 22,462,385 Long-term receivables 2,344,862
Total other long-term assets 2,344,862
7,451,662
Pension Obligation Bonds (76,395,064)
COPS Payable (15,760,000)
Leases and SBITA payable (9,097,934)
Compensated absences (5,193,806)
Net pension liability (22,238,036)
Net OPEB liability (3,112,372)
Total long-term liabilities (131,797,212)
Deferred amount on refunding 241,407
Bond premiums (1,563,813)
Total premiums, discounts, and deferred items (1,322,406) Net position of governmental activities 112,558,918$
Long-term liabilities that are not due and payable in the current period, and therefore, are not reported in the funds.
Governmental funds report the effect of premiums, discounts, and refundings and similar items when debt is first issued, w hereas, these amounts are deferred and amortized in the Statement of Activities.
CITY OF MANHATTAN BEACH, CALIFORNIA
Capital assets, net of accumulated depreciation/amortization, used in governmental activities are not financial resources and, therefore, are not reported in the funds.
Differences between expected and actu al experiences, assumption changes and net differences between projected and actu al earnings, and contributions subsequent to the measurement date for the postretir ement benefits (pension and OPEB) are recognized as deferred outflows of resources and deferred inflows of resources on the Statement of Net Position.
Other long-term assets that are not available to pay for current period expenditures and, therefore, are either labeled unavailable or not reported in the funds.
Internal service funds provide services t o other funds on a cost-reimbursement basis.
The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds are included in governmental activities in the Statement of Activities.
See Notes to Financial Statements.
31 CITY OF MANHATTAN BEACH, CALIFORNIA
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2024
Capital
Projects Funds
Total Total
Nonmajor Governmental
General Funds Funds
REVENUES
Taxes 70,957,916$ 1,062,511 $ 3,702,857 $ 75,723,284$ Licenses and permits 4,340,758 41,791 - 4,382,549
Intergovernmental 742,757 1,707,064 4,515,844 6,965,665 Charges for services 13,424,323 596,949 2,803 14,024,075 Use of money and property 7,146,781 2,443 1,048,614 8,197,838 Fines and forfeitures 1,953,584 78,284 - 2,031,868
Contributions - 156,558 - 156,558
Miscellaneous 1,202,262 - 9,104 1,211,366
Total revenues 99,768,381 3,645,600 9,279,222 112,693,203
EXPENDITURES
Current:
General governement 18,145,903 - - 18,145,903
Public safety 48,738,762 - 157,913 48,896,675
Culture and recreation 9,371,097 - 674,379 10,045,476
Public works 10,126,724 184,456 1,685,099 11,996,279
Capital outlay 9,406,018 3,796,195 9,147,770 22,349,983 Debt service:
Principal retirement 5,318,532 710,000 18,784 6,047,316 Interest and fiscal charges 2,310,089 456,277 11,131 2,777,497 Trustee fees and bond issuance cost 1,600 1,850 - 3,450 Total expenditures 103,418,725 5,1 48,778 11,695,076 120,262,579 Excess (deficiency) of revenues
over (under) expenditures (3,650,344) (1,503,178) (2,415,854) (7,569,376)
OTHER FINANCING SOURCES (USES)
Transfers in 775,434 1,994,920 252,991 3,023,345
Transfers out (4,832,895) - (6,071) (4,838,966)
Lease and subscriptions financing 9,403,714 - - 9,403,714 Total other financing sources (uses) 5,346,253 1,994,920 246,920 7,588,093 Net change in fund balances 1,695,909 491,742 (2,168,934) 18,717 Fund balances (deficit)-beginning 38,685,852 12,214,688 15,672,106 66,572,646 Fund balances (deficit)-ending 40,381,761$ 12,706,430$ 13,503,172$ 66,591,363$ Capital
Improvement
See Notes to Financial Statements.
32 Reconciliation of the Statement of Revenues, Expenses and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2024
Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances - total governmental funds: 18,717$ Capital outlay 21,598,274$
Depreciation/amortization expense (5,772,227)
Total adjustment 15,826,047
Earned but unavailable grant revenues (1,345,986)
Total adjustment (1,345,986)
Leases issued (9,403,714)
Amortization of bond premiums and discounts 94,156
Amortization of deferred amounts on refunding (32,189)
Principal payments on leases 1,735,723
Principal payments on subscriptions 77,677
Principal payments on pension obligation bonds 3,260,147 Principal payments on certificates of participation 1,055,000 Total adjustment
(3,213,200)
60,800
Accrued interest on long-term debt 531
Compensated absences (771,202)
Changes in pension liabilities and related deferred outflows and inflows of resources (18,567,677) Changes in OPEB liabilities and related deferred outflows and inflows of resources (1,166,183) Total adjustment (20,504,531)
Change in net position of governmental activities (9,158,153) $ Internal service funds provide services t o other funds on a cost-reimbursement basis.
The net revenue of certain activities of internal service funds is reported with governmental activities.
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 the governmental funds.
CITY OF MANHATTAN BEACH, CALIFORNIA
Governmental funds report capital outlays are expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation/amortization ex pense. This is the amount by which capital outlays exceeded depreciation/amortization expense in the current period.
Revenues in the Statement of Acti vities that do not provide current financial resources are not reported as revenues in the funds.
Bond and other debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-te rm liabilities in the Statement of Net Position.
Repayment of bond and other debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the Statement of Net Position.
Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these am ounts are deferred and amortized in the Statement of Activities.
See Notes to Financial Statements.
33 CITY OF MANHATTAN BEACH, CALIFORNIA
Statement of Net Position
Proprietary Funds
June 30, 2024
Governmental
Activities
Other Total
Enterprise Enterprise Internal
Funds Funds Service Funds
ASSETS
Current assets:
Cash and cash equivalents 10,844,772$ 17,391,605$ 5,222,040$ 7,392,951$ 40,851,368$ 25,055,911$ Receivables:
Accounts 917,636 325,826 5,935 6,916 1,256,313 11,619
Inventories 763,095 - - - 763,095 105,421
Restricted:
Cash with fiscal agent 26, 429 13,002 77,951 - 117,382 - Total current assets 12,551,932 17,730,433 5,305,926 7,399,867 42,988,158 25,172,951 Noncurrent:
Advances to other funds - - 675,000 - 675,000 -
Capital assets, net 66,926,926 11,27 4,257 17,699,367 5,6 83,757 101,584,307 5,994,822 Total noncurrent assets 66,926,926 11,274,257 18,374,367 5,683,757 102,259,307 5,994,822 Total assets 79,478,858 29,004,690 23,680, 293 13,083,624 145,247,465 31,167,773
DEFERRED OUTFLOWS OF RESOURCES
Pension-related 579,770 267,835 88,019 71,102 1,006,726 1,404,100 OPEB-related 274,909 113,258 28,829 235,783 652,779 207,984 Total deferred outflows of resources 854,679 381,093 116,848 306,885 1,659,505 1,612,084
LIABILITIES
Current liabilities:
Accounts payable 2,624,696 194,8 24 159,444 1,149,265 4,128,229 875,296 Accrued liabilities 120,267 4,884 122,062 87,129 334,342 - Accrued interest 25,465 12,991 69,264 - 107,720 2,302
Deposits payable 25 - 410 105,862 106,297 -
Worker's compensation claims - - - - - 9,059,914
Claims and judgments - - - - - 3,083,394
Compensated absences 30,610 - - - 30,610 -
Leases - - - - - 22,975
Subscriptions - 13,053 - - 13,053 41,128
Bonds 196,142 93,147 445,837 7,161 742,287 134,445
Total current liabilities 2,997,205 318,899 797,017 1,349,417 5,462,538 13,219,454 Noncurrent liabilities:
Advances from other funds - - - 675,000 675,000 -
Compensated absences 139,050 - - - 139,050 -
Worker's compensation claims - - - - - 6,819,500
Claims and judgments - - - - - 755,000
Bonds 1,123,508 478,309 4,781,441 159,112 6,542,370 2,987,120 Net pension liability 481,894 213,732 76,473 61,228 833,327 1,216,314 Net OPEB liability 134,206 55 ,291 14,074 115,106 318,677 101,534 Total noncurrent liabilities 1,878,658 747,332 4,871,988 1,010,446 8,508,424 11,879,468 Total liabilities 4,875,863 1,066,231 5,669, 005 2,359,863 13,970,962 25,098,922
DEFERRED INFLOWS OF RESOURCES
Pension-related 25,422 11,275 4,034 3,229 43,960 64,165 OPEB-related 218,238 89,911 22,886 187,177 518,212 165,108 Total deferred inflows of resources 243,660 101,186 26,920 190,406 562,172 229,273
NET POSITION
Net investment in capital assets 66,582,064 11,091,542 12,607,605 5,683,757 95,964,968 5,931,169 Restricted for business improvement district - - 362,020 - 362,020 - Unrestricted 8,631,950 17,126,824 5,131, 591 5,156,483 36,046,848 1,520,493 Total net position 75,214,014 $ 28,218,366 $ 18,101,216 $ 10,840,240 $ 132,373,836 7,451,662 $ Business-Type Activities
Water Wastewater Parking
See Notes to Financial Statements.
34 CITY OF MANHATTAN BEACH, CALIFORNIA
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2024
Governmental
Activities
Other Total
Enterprise Enterprise Internal
Funds Funds Service Funds
OPERATING REVENUES
Charges for services 15,698,732$ 3,602,056$ 4,348,604$ 2,154,721$ 25,804,113$ -$ Interdepartmental charges for services ----- 19,254,920 Miscellaneous 71,645 17,508 25,748 1,687 116,588 36,850 Total operating revenues 15,770,377 3,619,564 4,374, 352 2,156,408 25,920,701 19,291,770
OPERATING EXPENSES
Salaries 1,471,329 709,105 155,985 227,057 2,563,476 2,675,601 Employee benefits 602,622 259,889 73,488 138,156 1,074,155 1,140,530 Contract for professional services 8,096,478 161,284 782,589 810,619 9,850,970 2,322,865 Materials and services 883,114 218,182 657,985 1,719,605 3,478,886 3,735,285 Utilities 278,451 103,941 106,999 75,132 564,523 131,813 Administrative service charges 1,590,814 823,645 534,000 275,950 3,224,409 - Internal services 651,555 182,670 48,421 - 882,646 -
Leases and rents - - - 562,412 562,412 -
Claims ----- 8,496,064
Depreciation/amortization 622,564 327,550 329,295 119,814 1,399,223 1,060,242 Total operating expenses 14,196,927 2,786,266 2,688, 762 3,928,745 23,600,700 19,562,400 Operating income (loss) 1,573,450 833,298 1,685,590 (1,772,337) 2,320,001 (270,630)
NONOPERATING REVENUES (EXPENSES)
Interest revenue 933,542 918,393 202,597 257,187 2,311,719 - Interest expense (26,515) (11,761) (108,614) (4,206) (151,096) (82,323) Intergovernmental 86,901 16,959 - - 103,860 -
Gain (loss) on disposal of capital assets ----- (97,361) Total nonoperating revenues (expenses) 993,928 923,591 93,983 252,981 2,264,483 (179,684) Income (loss) before capital contributions and transfers 2,567,378 1,756,889 1,779,57 3 (1,519,356) 4,584,484 (450,314) Transfers in - - - 2,376,698 2,376,698 1,011,741
Transfers out (293,074) (317,269) (66,260) (395,588) (1,072,191) (500,627) Change in net position 2,274,304 1,439,620 1,713, 313 461,754 5,888,991 60,800 Net position-beginning 72,934,832 26,762,946 16,3 87,903 8,205,444 124,291,125 7,390,862 Restatements 4,878 15,800 - 2,173,042 2,193,720 -
Net position-beginning, as restated 72,939,710 26,778,746 16,387, 903 10,378,486 126,484,845 7,390,862 Net position-ending 75,214,014$ 28,218,366$ 18,101,216$ 10,840,240$ 132,373,836$ 7,451,662$ Business-Type Activities
Water Wastewater Parking
See Notes to Financial Statements.
35 CITY OF MANHATTAN BEACH, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
Governmental
Activities
Other
Enterprise Internal
Funds Totals Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 15,793,817$ 3,551,981$ 4,369,392$ 2,227,230$ 25,942,420$ -$ Receipts from interfund charges ----- 19,280,151
Payments to suppliers and service providers (11,266,536) (1,355,240) (1,887, 445) (2,870,642) (17,379,863) (5,515,908) Payments to employees for salaries and benefits (1,914,129) (909,631) (203,456) (278,107) (3,305,323) (3,381,342) Other receipts (payments) ----- (6,905,241)
Net cash provided by (used for)
operating activities 2,613,152 1,287,110 2,278, 491 (921,519) 5,257,234 3,477,660
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers from other funds - - - 2,376,698 2,376,698 1,011,741 Transfers to other funds (293,074) (317,269) (66,260) (395,588) (1,072,191) (500,627) Principal paid on non-capital debt (41,602) (17,148) (5,784) (7,098) (71,632) (133,224) Interest paid on non-capital debt (24,654) (2,671) (3,427) (4,206) (34,958) (81,669) Payments from other funds on interfund borrowings - - 225,000 - 225,000 - Payments to other funds on interfund borrowings - - - (225,000) (225,000) - Operating grants and contributions 86,901 16,959 - - 103,860 - Net cash provided by (used for)
noncapital financing activities (272,429) (320,129) 149,529 1,744,806 1,301,777 296,221
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets (3,832,397) (560,663) - (78,568) (4,471,628) (2,172,813) Principal paid on capital debt (144,104) (83,690) (425,000) - (652,794) (111,836) Interest paid on capital debt (4,655) (10,287) (259,743) - (274,685) (17) Proceeds from sales of assets ----- (652,792)
Net cash provided by (used for)
capital and related financing activities (3,981,156) (654,640) (684,743) (78,568) (5,399,107) (2,937,458)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 933,542 918,393 202,597 257,187 2,311,719 - Net cash provided by (used for)
investing activities 933,542 918,393 202,597 257,187 2,311,719 - Net increase (decrease) in
cash and cash equivalents (706,891) 1,2 30,734 1,945,874 1,001,906 3,471,623 836,423 Cash and cash equivalents-beginning 11,578,092 16,173,8 73 3,354,117 6,391,045 37,497,127 24,219,488 Cash and cash equivalents-ending 10,871,201$ 17,404,607$ 5,299,991$ 7,392,951$ 40,968,750$ 25,055,911$ Business-Type Activities
Water Wastewater Parking
See Notes to Financial Statements.
36 CITY OF MANHATTAN BEACH, CALIFORNIA
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
Governmental
Activities
Other
Enterprise Internal
Funds Totals Service Funds
Business-Type Activities
Water Wastewater Parking
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE STATEMENT OF NET POSITION
Cash and investments 10,844,772$ 17,391,605$ 5,222,040$ 7,392,951$ 40,851,368$ 25,055,911$ Restricted cash and investments ----- -
Cash with fiscal agent 26,429 13,002 77,951 - 117,382 - Total cash and cash equivalents 10,871,201$ 17,404,607$ 5,299,991$ 7,392,951$ 40,968,750$ 25,055,911$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Operating income (loss) 1,573,450$ 833,298 $ 1,685,590 $ (1,772,337) $ 2,320,001 $ (270,630)$ Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation/amortization expense 622,564 327,550 329,295 119,814 1,399,223 1,060,242 (Increase) decrease in accounts receivable 23,440 (67,583) (4,960) 91,117 42,014 (11,619) (Increase) decrease in inventories 81,226 - - - 81,226 (16,180) Increase (decrease) in accounts payable 651,176 129,758 121,782 490,860 1,393,576 690,235 Increase (decrease) in accrued liabilities (498,526) 4,724 120,767 82,216 (290,819) - Increase (decrease) in deposits payable - - - (20,295) (20,295) - Increase (decrease) in compensated absences (50,444) - - - (50,444) - Increase (decrease) in claims and judgments - - - - - 1,590,823 Increase (decrease) in net pension liability
and related items 145,232 35,332 20,753 24,851 226,168 421,773 Increase (decrease) in net OPEB liability
and related items 65,034 24,031 5,264 62,255 156,584 13,016 Total adjustments 1,039,702 453,812 592,901 850,818 2,937,233 3,748,290 Net cash provided by (used for)
operating activities 2,613,152$ 1,287,110$ 2,278,491$ (921,519)$ 5,257,234$ 3,477,660$ See Notes to Financial Statements.
37 Custodial
Funds
Special
Assessment
Redemption
ASSETS
Cash and cash equivalents 1,476,888$
Cash and investments with fiscal agents 1,209,111
Total assets 2,685,999
LIABILITIES
Accounts payable 9,624
Payable to bondholders 2,676,375
Total liabilities 2,685,999
NET POSITION
Restricted for bondholders -
Total net position -$
CITY OF MANHATTAN BEACH, CALIFORNIA
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2024
See Notes to Financial Statements.
38 Custodial
Funds
Special
Assessment
Redemption
ADDITIONS
Special assessments 1,513,856$
Interest income 57,361
Total additions 1,571,217
DEDUCTIONS
Professional services 9,280
Principal payment 1,245,000
Interest expenses 316,937
Total deductions 1,571,217
Net increase (decrease) in fiduciary net position -
Net position-beginning -
Net position-ending -$
CITY OF MANHATTAN BEACH, CALIFORNIA
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2024
See Notes to Financial Statements.
39 40
NOTES TO
FINANCIAL STATEMENTS
41 42
CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: ORG
ANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Description of the Reporting Entity
The City of Manhattan Beach, California (the City), was in corporated on December 12, 1912, under the laws of
the State of California and enjoys all the rights and privileges applicable to a general law city. It is governed by an elected five-member council. As required by accounting principles generally accepted in the United States of America, these financial statements present the City of Manhattan Beach (the primary government) and its component unit, the Manhattan Beach Capital Improvements Corporation. The component unit is included in the reporting entity because of the significance of its operational or financial relationships with the City of Manhattan Beach. It is governed by the City Council of the City of Manhattan Beach and its activities exclusively benefit the City, therefore it is presented as a blended component unit. Separate financial statements are not prepared for the Manhattan Beach Capital Improvements Corporation.
Blended Component Unit
Manhattan Beach Capital Improvemen
ts Corporation - The Manhattan Beach Capital Improvements Corporation (the Corporation) is a nonprofit public benefits corporation, organized under the laws of the State of California in September 1996, pursuant to the Nonprofit Public Benefit Corporation Laws (Title I, Division 2, Part 2, Section 5110). The sole purpose of the Corporation is to issue debt for capital improvements. Certificates of participation are debt issued by the Corporation providing the holder an interest, i.e. the right to participate in the lease payments paid by the City to the Corporation. There are no separately issued financial statements for this entity.
B. Description of Funds
The accounts of the City are organized and o
perated on the basis of funds, each of which is defined as an independent fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances and changes therein. These funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations.
In accordance with the City’s municipal code and budget, several different types of funds are used to record the City’s financial transactions. For financial reporting purposes, such funds have been categorized and are presented as follows:
Governmental Fund Types
General Fund - to accou
nt for all unrestricted resources except those required to be accounted for in another fund.
Special Revenue Funds - to account for the proceeds of specific revenue sources (other than for major capital projects) that are restricted by law or administrative action to expenditures for specified purposes.
Capital Projects Funds - to account for financial resources segregated for the acquisition or construction of major capital facilities, other than those financed by Enterprise or Internal Service Funds. In recent years, the Underground Assessment District Fund was added to this category.
Proprietary Fund Types
Enterprise Funds - to account for operat
ions where it is the stated intent that costs of providing services to the general public on a continuing basis be financed or recovered primarily through user charges, or where determination of net income is deemed appropriate.
Internal Service Funds - to account for insurance reserve, information systems, building maintenance and operations, and fleet management services provided to the departments of the City on a continuing basis, which are financed or recovered primarily by charges to the user departments. 43 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Fiduciary Fund Types
Custodial Funds - to account for special assessment collections for debt service for the underground assessment bonds that the City remits to the fiscal agent.
C. Basis of Accounting/Measurement Funds
Government-Wide Financial Statements
The City government-wide financial statements include a Statement of Net Position and a Statement of Activities and Changes in Net Position. These statements present summaries of Governmental Activities and Business-Type Activities for the City. 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 and outflows of resources, and liabilities, including capital assets and infrastructure as well as long-term debt 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 the benefit is incurred. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. The types of program revenues for the City are reported in three categories: 1) charges for services,2) operating grants and contributions, and 3) capital grants and contributions. Charges for services include revenues from customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function. Grants and contributions include revenues restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenue are reported instead as general revenue.
Government-wide financial statements do not provide information by fund; they simply distinguish between governmental and business-type activities. The City’s Statement of Net Position includes current and noncurrent assets and liabilities, as well as deferred inflows and outflows of resources.
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 into one component of net position.
Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of capital assets reduce this category.
Restricted Net Position - This category presents restrictions imposed by creditors, grantors, contributions or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.
Unrestricted Net Position - This category represents the net position of the City, not restricted for any project or other purpose.
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenue, Expenditures and Change in Fund Balances for all major governmental funds and aggregated nonmajor funds. An accompanying schedule is presented to reconcile and explain the differences in fund balance as presented in these statements to the net position presented in the government-wide financial statements. The City has presented all major funds that met the qualifications of GASB Statement No. 34.
44 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
All governmental funds are accounted for by using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included in the governmental fund balance sheet. Related operating statements of these funds present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance.
The modified accrual basis of accounting is used by all governmental funds as the basis for recognizing revenues.
Under the modified accrual basis of accounting, revenues are susceptible to accrual and consequently recognized when they become both measurable and available. “Measurable” means the amount of the transaction can be readily determined, and “available” means that the transaction amount is collectible within the current period or soon thereafter (generally 60 days after year-end) to be used to pay liabilities of the current period. Revenues considered susceptible to accrual include property taxes and sales taxes collected after year-end, earned and uncollected investment interest income, uncollected rents and leases and unbilled service receivables. Revenues from such items as license and permit fees, fines and forfeitures and general service charges are not susceptible to accrual because they are generally not measurable until received in cash.
The government reports unearned revenue on its balance sheet for grant monies received before the City has a legal claim to them, such as grant funds received prior to incurring qualified expenses. In subsequent periods, the unearned revenue is removed once revenue recognition criteria are met and the City has established legal claim to the resources.
Governmental fund expenditures are recorded when the related fund liability is incurred. Principal and interest on long-term debt are recorded as fund liabilities when they are due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year.
Proprietary Funds Financial Statements
Proprietary funds financial statements include a Statement of Fund Net Position, a Statement of Revenues, Expenses and Change in Fund Net Position, and a Statement of Cash Flows. All proprietary fund types are accounted for on a flow of economic resources measurement focus and use the accrual basis of accounting.
Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. With this measurement focus, all assets, deferred outflows/inflows of resources and liabilities (current and long-term) resulting from the operations of these funds are included in the Statement of Net Position.
Accordingly, the proprietary fund Statement of Net Position presents assets, deferred inflows/outflows of resources and liabilities classified into their respective current and long-term categories.
The City’s internal service funds are presented in the proprietary funds financial statements. Because the principal users of the internal services are the City’s governmental activities, the financial statements of the internal service funds are consolidated into the governmental activities column when presented in the government-wide financial statements. To the extent possible, the cost of these services is reported in the appropriate functional activity.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s proprietary funds are charges to customers for services.
Operating expenses include the cost of services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
There is no look-back adjustment on the statement of fund net position and the statement of revenues, expenses and changes in fund net position for the enterprise funds’ participation in the internal services funds because these transactions are paid in cash, therefore there is no internal balance related to what can be considered a quasi-external transaction.
45 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: ORG
ANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Major Funds
Governmental Accounting Standards Board Statement 34 (GASB 34) requires the City to report all major funds in
the basic financial statements. In accordance with GASB 34, the following funds are classified as major governmental funds:
General Fund – used to account for all unrestricted resources except those required to be accounted for in another fund. This fund accounts for general citywide operations.
Capital Improvement Fund – used to account for financial resources segregated for the acquisition or construction of major capital facilities, other than those financed by Enterprise, Internal Service Funds, or other project specific funds.
The following funds are classified as major proprietary funds:
Water Fund - used to account for the operation of the City’s water utility system. Revenues are generated from user fees, which are adjusted periodically to meet the costs of administration, operation, maintenance and capital improvements to the system. In fiscal year 1997, the City completed a comprehensive utility fee study and issued certificates of participation for the purpose of upgrading the City’s water and wastewater systems.
Wastewater Fund - used to account for the maintenance and improvements of the City’s sewer system. Revenues are derived from a user charge placed on the water bills. In fiscal year 1997, the City completed a comprehensive utility fee study and issued certificates of participation for the purpose of upgrading the City’s water and wastewater system.
Parking Fund - used to account for the general operations and maintenance of City parking lots and spaces.
Revenues are generated from the use of these properties.
D. Property Tax Calculator
Property tax revenue is recognized on the modified accru al basis, that is, in the fiscal year for which the taxes have been levied providing they become available. Available means due or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities of the current period. The County of Los Angeles collects property taxes for the City. Tax liens attach annually as of 12:01 AM on the first day in January prior to the fiscal year for which the taxes are levied. Taxes are levied on both real and personal property, as it exists on that date.
The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1; the second installment is due February 1. All taxes are delinquent, if unpaid, by December 10 and April 10, respectively. Unsecured personal property taxes become due on March 1 of each year and are delinquent, if unpaid, on August 31.
E. Cash and Investments
Cash and Cash Equivale
nts
For purpose of the Statement of Cash Flows, the City considers cash and cash equivalents as short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City follows the practice of pooling cash and investments of all funds except for funds in its 125 medical flex plan; its Section 115 Trust, and its outstanding Water and Wastewater; Marine Avenue Sports Field; and Metlox, Police & Fire Facility bonded debt, which are held by outside trustees.
46 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investments
Investments are shown at fair value, in accordance with GASB Statements No. 31 and No. 72. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles.
For purposes of the Statement of Cash Flows, the proprietary fund types consider all cash and investments to be cash equivalents, as these funds participate in the citywide cash and investment pool.
F. Restricted Cash and Investments
Certain proceeds of debt issues, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Additionally, the City established the PARS Post-Employment Benefits Trust as a tax-exempt trust within the meaning of Section 115 of the IRS Code and relevant statutory provisions of the State of California for the purpose of pre-funding pension obligation and/or OPEB obligation. The City’s adoption and operation of the Trust has no effect on any of the current or former employee’s entitlement to post-employment benefits. The balances and activities of the Trust are irrevocably dedicated to funding future post-employment benefit obligations. The assets will benefit the City through reduced future cash flow demands on the City’s General fund resources and continue to be assets of the City. These amounts are reflected as restricted cash and investments in the General fund.
G. Capital Assets
Capital assets, which include land, machinery and equipment, buildings and improvements, leases, subscriptions, intangibles, and infrastructure (roads, bridges, curbs and gutters, streets, walk-streets and sidewalks, parks and recreation improvements), are reported in the government-wide financial statements. Capital assets and infrastructure are defined by the City as assets with an initial, individual cost of more than $5,000 and $100,000 respectively (amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the date of donation.
Capital assets are reported net of accumulated depreciation and amortization on the Statement of Net Position.
Depreciation and amortization is provided for on the straight-line method over the estimated useful lives of the assets as follows:
Asset Years
Equipment 5-20
Vehicles 3-20
Buildings/Improvements 40-100
Leases 5-100
Subscriptions 10
Intangible Assets 10
Water and Sewer Systems 30-50
Other Infrastructure 15-100
Major outlays for capital assets and improvements are capitalized as projects are constructed.
H. Leases
Leases are defined as the right to use an underlying asset. As lessee, the City recognizes a lease liability and an intangible lease asset at the beginning of a lease unless the lease is considered a short-term lease or transfers ownership of the underlying asset. Right-to-use lease assets are measured based on the net present value of the 47 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
future lease payments at inception, using the weighted average cost of capital, which approximate the incremental borrowing rate. Remeasurement of a lease liability occurs when there is a change in the lease term and/or other changes that are likely to have a significant impact on the lease liability. The City calculates the amortization of the discount on the lease liability and reports that amount as outflows of resources. Payments are allocated first to accrued interest liability and then to the lease liability. Variable lease payments based on the usage of the underlying assets are not included in the lease liability calculations but are recognized as outflows of resources in the period in which the obligation was incurred. As lessor, the City recognizes a lease receivable.
The lease receivable is measured using the net present value of future lease payments to be received for the lease term and deferred inflow of receivables at the beginning of the lease term. Periodic amortization of the discount on the receivable are reported as interest revenue for that period. Deferred inflows of resources are recognized as inflows on a straight-line basis over the term of the lease. This recognition does not apply to short-term leases, contracts that transfer ownership, leases of assets that are investments, or certain regulated leases. Any initial direct costs are reported as an outflow of resources for that period. Re-measurement of lease receivables occur when there are modifications, including but not limited to changes in the contract price, lease term, and adding or removing an underlying asset to the lease agreements. In the case of a partial or full lease termination, the carrying value of the lease receivable and the related deferred inflow of resources will be reduced and will include a gain or loss for the difference. For lease contracts that are short-term, the City recognizes short-term lease payments as inflows of resources (revenues) based on the payment provisions of the lease contract. Liabilities are only recognized if payments are received in advance, and receivables are only recognized if payments are received subsequent to the reporting period.
I. Subscriptions
Subscription-Based Information Technology Arrangements (SBITAs) are contracts that convey control of the right to use another party’s IT software, alone or in combination with tangible capital assets, as specified in the contract for a period of time in an exchange or exchange-like transaction. To determine whether a contract conveys control of the right to use the underlying IT assets, the City assesses both the right to obtain the present service capacity from use of the underlying IT assets and the right to determine the nature and manner of use of the underlying IT assets as specified in the contract. Contracts that solely provide IT support services are excluded from the definition of a SBITA. The subscription term is the period during which the City has a noncancellable right to use the underlying IT assets, plus the periods covered by the City’s option to extend the SBITA if it is reasonably certain, based on all relevant factors, that the government will exercise that option. Periods for which both the government and the SBITA vendor have an option to terminate the SBITA without permission from the other party (or if both parties have to agree to extend) are cancellable periods and are excluded from the subscription term.
J. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Financial Position reports 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 government reports deferred outflows of resources for pension contributions made after the actuarial measurement date which will be recognized in the following year, for the net difference between projected and actual earnings on pension and OPEB plan investments, the difference between expected and actual experience, the changes of assumptions, adjustments due to the difference in proportions, and the difference in proportionate share. The government also reports deferred outflows for deferred charges on debt refunding. A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.
In addition to liabilities, the Statement of Financial Position and the Governmental Fund Balance Sheet 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.
48 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The government has several items that qualify for reporting in this category:
1. Unavailable revenue reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from grant revenues. These amounts are deferred and recognized as an inflow of resources in the period when they become available.
2. Pension and OPEB related deferred inflows are reported only on the Statement of Net Position. The government reports deferred inflows of resources related to pensions arising from certain changes in the net pension liability, net pension asset, or net OPEB asset. Deferred inflows and outflows of resources related to changes in the net pension liability, net pension asset, and net OPEB asset are recognized systematically over time. Amounts are first recognized in the year the change occurs. The remaining amounts are to be recognized in future periods. The recognition period differs depending on the source of the change, and they currently are amortized over 5 years or the average remaining service lifetime.
3. A deferred inflow of resources related to leases is reported for the value of lease receivable payments to be recognized as an inflow of resources in a systematic and rational manner over the term of the lease agreements.
K. Net Pension Liability
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the 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. 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.
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For the pension plan administered under the California Public Employee’s Retirement System (CalPERS), the following timeframes are used:
Valuation Date: June 30, 2022
Measurement Date: June 30, 2023
Measurement Period: July 1, 2022 to June 30, 2023
L. Net Other Post-Employment Benefits (OPEB) Liability
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date: June 30, 2023
Measurement Date: June 30, 2023
Measurement Period: July 1, 2022 to June 30, 2023
49 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: ORG
ANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) M. Interfund Transfers
As a general rule, interfund transaction
s 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 activity and the City’s governmental funds. 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. In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental, business-type, and fiduciary activities have not been eliminated.
N. Long-Term Obligations
In the government-wide and proprietary funds financi
al 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 using the effective interest method. In the governmental fund financial statements, long-term obligation, bond discounts and premiums are recognized as other financing sources or uses when incurred. Issuance costs are recorded as a current year expenditure.
The City has recorded all judgment and claim liabilities resulting from workers’ compensation and liability insurance claims in the Insurance Reserve Fund, which is a component of the Internal Service funds group. The recorded liability is based upon an estimate of reported claims as provided by an analysis of a third-party administrator.
Only the short-term liability is reflected as a current liability in all applicable governmental fund types; the remainder of the liability is reported as long-term debt in the Statement of Net Position.
O. Vacation and Sick Leave
The City’s policy is to record the cost of vested vacation and sick leave as it is earn ed. Vacation is payable to
employees at the time a vacation is taken or upon termination of employment. At termination, employees are eligible to convert 50% of unused sick time to service credit; however, sworn fire safety personnel, upon service retirement, may opt to cash out 50% of the value of unused sick leave. Miscellaneous and sworn police employees may accrue compensated time off in lieu of payment for overtime hours. Overtime hours are banked at either time-and-a-half or straight-time hours depending upon the nature of the overtime worked. The dollar value of these hours is included as an employee benefits liability as shown in the balance sheet.
P. Allocation of Interest Income
The City pools all non-restricted cash for inve
stment purchases and allocates interest income based on month-end cash balances. Interest earned by restricted Cash is posted to their respective accounts.
Q. Other Accounting Policies
Inventories - Inve
ntories of materials and supplies are carried at cost on a weighted-average basis. The City uses the consumption method of accounting for inventories.
Prepaid items - Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. 50 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
R. 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.
S. Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.
T. Fund Balance Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance.
Unassigned fund balance is applied last.
U. Fund Balance Policy
Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes.
x Non-spendable fund balance is the portion of fund balance that cannot be spent due to form. Examples include inventories, prepaid amounts, long-term loans, and notes receivable, unless the proceeds are restricted, committed or assigned. Also, amounts that must be maintained intact legally or contractually, such as the principal of a permanent fund are reported within the non-spendable category.
x Restricted fund balance is the portion of fund balance that is subject to externally enforceable limitations by law, enabling legislation or limitations imposed by creditors or grantors. The government itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance).
x The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority. The governing council is the highest level of decision-making authority for the government that can, by adoption of an ordinance prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken (the adoption of another ordinance) to remove or revise the limitation.
x Assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as committed. The governing council (council) has by resolution authorized the finance director to assign fund balance. The council may also assign fund balance as it does when appropriating fund balance to cover a gap between estimated revenue and appropriations in the subsequent year’s appropriated budget. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment.
Conversely, as discussed above, an additional action is essential to either remove or revise a commitment.
x Unassigned fund balance is the residual classification that includes all spendable amounts in the General Fund not contained in other classifications.
51 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Deficit Fund Balance and Net Position
At June 30, 2024, the Insurance Reserve, Information Systems, and Building Maintenance and Operations Fund have a deficit net position of $468,825, $231,742 and $456,122, respectively. The deficit is the result of non-current liabilities and will be resolved by future revenues and contributions from other funds.
NOTE 3: CASH AND INVESTMENTS
As of June 30, 2024, cash and investments were reported in the accompanying financial statements as follows:
Governmental Funds 72,514,415$
Internal Service Funds 25,055,911
Business-Type Activ ities 40,968,750
Fiduciary Funds 2,685,999
141,225,075$
The City pools all cash and investments that is available for use for all funds, including fiduciary funds.
Unrestricted and restricted cash and investments, as indicated in the government-wide statement of net position, do not include fiduciary cash and investments. These cash amounts are included in the Statement of Fiduciary Net Position – Fiduciary Funds. Each fund type's position in the pool is reported on the Combined Balance Sheet as cash and investments. The City has adopted an investment policy, which authorizes it to invest in various investments.
A. Deposits
At June 30, 2024, the carrying amount of the City’s deposits after outstanding checks and deposits in transit was $3,831,319 and the bank balance was $6,445,008. The $(2,613,689) difference represents outstanding checks and other reconciling items.
The California Government Code requires California banks and savings and loan associations to secure a City's deposits by pledging government securities with a value of 110% of an entity's deposits. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of a City's total deposits. The City’s Treasurer may waive the collateral requirement for deposits that are fully insured up to $250,000 by the FDIC. The collateral for deposits in federal and state-chartered banks is held in safekeeping by an authorized Agent of Depository recognized by the State of California Department of Banking.
The collateral for deposits with savings and loan associations is generally held in safekeeping by the Federal Home Loan Bank in San Francisco, California as an Agent of Depository. These securities are physically held in an undivided pool for all California public agency depositors. Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an "Agent of Depository" has the effect of perfecting the security interest in the name of the local governmental agency. Accordingly, all collateral held by California Agents of Depository are considered to be held for, and in the name of, the City.
B. Authorized Investments
Under provisions of the City’s Investment Policy, and in accordance with Section 53601 of the California Government Code, the City may invest in the following types of investments:
x Securities of the U.S. Government, or its agencies
x Certificates of Deposit (or Time Deposits) placed with commercial banks and/or savings and loan associations.
x Negotiable Certificates of Deposit
x Bankers Acceptances
x Commercial Papers
52 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
x Local Agency Investment Fund (State Pool) Demand Deposits x Passbook Savings Account Demand Deposits
x Federally Insured Thrift and Loan
x Repurchase Agreements
x Medium-Term Corporate Notes
x Floaters or step-ups with market driven interest rate adjustments x Mutual Funds of highest ratings
The City’s investment policy does not allow the use of reverse-repurchase agreements and, accordingly, the City did not borrow through the use of reverse-repurchase agreements at any time during the year.
C. Investments Authorized by Debt Agreements
The above investments do not address investment of debt proceeds held by a bond trustee. Investments of debt proceeds held by a bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the Entity’s investment policy.
D. Investments in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. The State Treasurer's Office audits the fund annually. The fair value of the position in the investment pool is the same as the value of the pool shares. The City is required to disclose its methods and assumptions used to estimate the fair value of its holdings in LAIF. The City relied upon information provided by the State Treasurer in estimating the City’s fair value position of its holdings in LAIF. The City had a contractual withdrawal value of $36,162,565 whose pro-rata share of fair value was estimated by the State Treasurer to be $36,029,344.
E. GASB Statement No. 31
The City adopted GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools , as of July 1, 1997. GASB Statement No. 31 establishes fair value standards for investments in participating interest earning investment contracts, external investment pools, equity securities, option contracts, stock warrants and stock rights that have readily determinable fair values. Accordingly, the Entity reports its investments at fair value in the balance sheet. All investment income, including changes in the fair value of investments, is recognized as revenue in the operating statement. The City maintains investment accounting records and adjusts those records to “fair value” on an annual basis for material amounts. The City’s investment custodian provides market values on each investment instrument on a monthly basis for material amounts. The investments held by the City are widely traded in the financial markets and trading values are readily available from numerous published sources. Material unrealized gains and losses are recorded on an annual basis and the carrying value of its investments is considered fair value. For the year ended June 30, 2024, the book value of investments exceeded fair value the by $4,040,431.
F. Credit Risk
The City's investment policy limits investments in medium-term notes (MTN’s) to those rated in the top three rating categories by two of the three largest nationally recognized rating services at time of purchase. As of June 30, 2024, the City's investment in medium-term notes consisted of investments with Microsoft Corp., Coca Cola Co., Costco Wholesale Corp., Apple Inc., Toyota Motor Credit Corp., Bank of New York Mellon Corp., Walt Disney Company, Merck & Co., Amazon.com Inc., W almart Inc., Johnson & Johnson, Colgate-Palmolive, and Pepsico. All MTN’s were rated “A” or higher by Moody’s at time of purchase. Investment in government agencies issued by the Federal National Mortgage Association, the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation, and the Federal Farm Credit Banks were rated “Aaa” by Moody’s and “AA+” by Standard & Poor’s. Asset-Backed Securities were rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s. All 53 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 3: CASH AND I
NVESTMENTS (CONTINUED)
securities were investment grade and were legal under state and city policies. Investments in U.S. government securities are not considered to have credit risk; therefore, their credit quality is not disclosed. As of June 30, 2024, the City's investments in external investment pools and money market mutual funds are unrated.
G. Custodial Credit Risk
The custodial credit risk for depo
sits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover 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 to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. The City does not have a policy for custodial credit risk.
As of June 30, 2024, none of the City’s deposits or investments were exposed to custodial credit risk.
H. Concentration of Credit Risk
The City’s investment policy impose
s restrictions for certain types of investments with any one issuer for the following types of investments. With respect to concentration of credit risk, as of June 30, 2024, the City is in compliance with its investment policy’s restrictions. In ac cordance with GASB Statement No. 40, the city is exposed to credit risk if it has invested more than 5% of its total investments in any one issuer. The following issuers are above 5% of the total investments: Federal Farm Credit (12.41%), Federal Home Loan Bank (7.26%), and Fannie Mae (5.28%). These government-sponsored investments are backed by the federal government and are below the City’s investment policy limit of 33.33% of total investments.
I. Interest Rate Risk
The City's investment policy limits inve
stment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. The City's investment policy states that no investment can mature more than five years from the date of purchase in line with state code requirements. The only exception to these maturity limits shall be the investment of the gross proceeds of tax-exempt bonds. The City has elected to use the segmented time distribution method of disclosure for its interest rate risk.
J. Fair Value Measurement and Application
The City categorizes
its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset.
Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Debt securities classified in Level 2 of the fair value hierarchy use a market approach to measure fair value. The City’s pricing vendor, through rules based logic, utilizes valuation techniques that reflect market participants’ assumptions and vary by asset class and per methodology, and maximizes the use of relevant observable data including quoted prices for similar assets, benchmark yield curves and market corroborated inputs.
The City has the following recurring fair value measurements as of June 30, 2024:
Total Uncategorized 1 2
Local Agency Investment Fund (LAIF) 36,029,344$ 36,029,344$ -$ -$ US Treasury and Agency Notes 42,769,190 - 42,769,190 - US Agencies 30,470,210 - - 30,470,210
Medium-Term Corporate Notes 21,853,390 - - 21,853,390 Total Inv estments 131,122,134$ 36,029,344$ 42,769,190$ 52,323,600$ Fair Value
Level
Investment Type
54 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
As of June 30, 2024, the City had the following investments and original maturities:
6 months 6 months 1 to 3 More than Fair
or less to 1 year years 3 years Value
Pooled investments:
LAIF 36,029,344$ -$ -$ -$ 36,029,344$ US Securities 1,987,860 4,815,950 25,230,170 10,735,210 42,769,190 Government Agency Securities 10,926,060 962,050 9,653,220 8,928,880 30,470,210 Medium Corporate Notes 3,968,730 - 5,567,210 12,317,450 21,853,390 Total pooled investments 52,911,994$ 5,778,000$ 40,450,600$ 31,981,540$ 131,122,134 Restricted cash and inv estments:
PARS pension 3,599,985
Cash and investments with fiscal agent
Money market mutual funds
Utility undergrounding 1,209,111
Water/Wastewater, Metlox Refunding bonds 117,382
Marine certificates of participation 61,550
Police & Fire certificate of participation refunding bonds 89,367 Fire Station 2 COPs 133,003
Pension Obligation Bonds 1,021,983
6,232,381
Demand deposits 3,831,319
Other deposits 37,865
Petty cash 1,376
3,870,560
141,225,075$
Remaining Investment Maturities
NOTE 4: INTERFUND TRANSACTIONS
Advances
During fiscal year 2022-23, the Parking fund made an advance of $900,000 to the State Pier and Parking Lot fund to assist in financing the Pier Railing Replacement Project. The advance will be repaid with parking meter revenues over an estimated four-year period or sooner if parking meter revenues exceed estimates. A payment of $225,000 was made during the fiscal year.
55 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 4: INTERFUND TRANSACTIONS (CONTINUED)
Interfund Transfers
With City Council approval, resources may be transferred from one fund to another. Transfers between individual funds during the fiscal year ended June 30, 2024, are presented below:
Nonmajor Nonmajor Internal
General Governmental Enterprise Service
Transfers Out Fund Funds Funds Funds Total
General Fund - $ 1,994,920$ 252,991 $ 2,376,698 $ 208,286 $ 4,832,895 $ Nonmajor Governmental Funds - - - - 6,071 6,071 Water - - - - 293,074 293,074 Wastewater - - - - 317,269 317,269 Parking Fund - - - - 66,260 66,260 Nonmajor Enterprise Funds 275,434 - - - 120,154 395,588 Internal Service Funds 500,000 - - - 627 500,627 Total 775,434 $ 1,994,920 $ 252,991 $ 2,376,698 $ 1,011,741 $ 6,411,784 $ Transfers in
Major Capital
Improvement
Fund
The interfund transfers scheduled above resulted from a variety of City initiatives including the following:
x The General Fund transferred a total of $1,994,920 to the Major Capital Improvement Fund to support capital projects.
x The General Fund also transferred $252,991 to support operations in the Street Light Nonmajor Governmental Fund.
x The General Fund also transferred $2,376,698 to the Storm Drain Fund to support operations. x The Nonmajor County Parking Fund transferred $275,434 to the general fund to fund operations based on an operating agreement.
x The Information Technology Internal Service Fund transferred $500,000 to the general fund to alleviate excess fund balance. The Fleet Internal Service Fund received a total of $1,011,741 from various funds for the purchase of vehicles.
NOTE 5: LEASES
Leases are financings of the right to use an underlying asset. A lessee is required to recognize a lease liability and an intangible right-to-use lease asset. A lessor is required to recognize a lease receivable and a deferred inflow of resources.
A. Leases Receivable and Deferred Inflows of Resources
The City is reporting lease receivable of $22,922,368 at June 30, 2024. For the fiscal year, the City reported lease revenue of $1,336,510 and lease interest revenue of $285,238. The leases have interest rate of 1.162%. The value of the deferred inflow of resources as of June 30, 2024 is $22,380,509. The leases added in fiscal year 2023-2024 have an interest rate of 3.238%. These leases are summarized as follows:
Lease
Lease Lease Interest
Lease Receivable Revenue Revenue
Bay Club Manhattan Beach, LLC 10,360,858$ 522,544 $ 125,866 $ Verizon 16/Valley Lease 986,158 82,247 12,145 Manhattan Beach Hotel TRS, LLC 3,280,211 372,095 42,273 Metlox LLC 6,560,881 196,118 78,130
New Cingular Wireless PCS, LLC 1,531,303 106,116 18,598 United State Post Office 202,957 53,276 8,194 Lemonade Storage - 4,114 32 22,922,368$ 1,336,510 $ 285,238 $
56 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 5: LEASES (CONTINUED)
Bay Club Manhattan Beach LLC. – In May 2017, the City entered into an amended lease with Bay Club Manhattan Beach, LLC for the property known as the Manhattan Country Club which includes an office building, a tennis complex, a parking lot and slope easement parcels. Based on the lease agreement, the City will receive monthly payment through December 2043.
Verizon 16/Valley Lease – In June 2010, the City entered into a lease agreement with SMSA Limited Partnership d/b/a Verizon Wireless for certain parcel of property for the installation and maintenance of utility wires, poles, cables, conduits and pipes for an initial term of 5 years with extensions up to four five-years terms. The City will receive monthly installments on the first day of each month.
Manhattan Beach Hotel TRS, LLC – In March 1983. the City entered into a ground lease with Manhattan Beach Hotel properties, a California general partnership for unimproved property for tenant to build and operate a hotel and golf course. The term of the lease is for fifty (50) years commencing March 1983. The City is receiving an initial annual rent of $400,000 payable in monthly installments.
Metlox LLC – in May 2002, the City entered into a disposition & development agreement and ground lease with Metlox LLC for three building pad parcels located on top of a subterranean parking structure to be constructed as part of the project. The term of the lease is for 55 years commencing on May 2002 with the right. Rent to the City is due in monthly installments.
New Cingular Wireless PCS, LLC – In September 2018, the City entered into a structure lease agreement with New Cingular Wireless PCS, LLC for ground and rooftop space for the placement of tenant’s antenna and communication equipment. The original term of the lease is for five years with four automatic five-year terms renewal. Rent is due to the city in monthly installments and will increase annually by 5% in year two of the initial agreement.
United State Post Office – in April 2018, the City leased approximately 1,900 square feet of interior space and additional space to the United States Postal Service. The lease renewed in March 2023 and was extended through 2028. The annual rent to the City is $53,000 payable in equal installments at the end of each month.
Lemonade Storage – In February 2019, the City entered into a five-years lease agreement with Lemonade Restaurant Group LLC for storage space in the Metlox Parking Structure. The lease term asks for monthly rent payments to the City.
The principal and interest payments expected to maturity are as follows:
Principal Interest
Fiscal Year Payment Payment Total
2025 1,192,512$ 270,571 $ 1,463,083 $
2026 1,215,791 255,640 1,471,431
2027 1,239,792 240,404 1,480,196
2028 1,250,322 224,504 1,474,826
2029 1,231,326 209,438 1,440,764
2030 - 2034 6,005,972 827,256 6,833,228
2035 - 2039 4,305,910 519,807 4,825,717
2040 - 2044 3,605,538 285,162 3,890,700
2045 - 2049 1,062,354 142,646 1,205,000
2050 - 2054 1,125,528 79,472 1,205,000
2055 - 2057 687,323 15,593 702,916
22,922,368$ 3,070,493 $ 25,992,861 $
Gov ernmental Activ ities
57 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 5: LEASES (CONTINUED)
B. Lease Pa
yable and Lease Assets
Governmental Activities:
The City leases certain facilities from the Manhattan Beach Unified School District and miscellaneous equipment
from various comp anie
s for the City’s operation. The terms of these leases expire in fiscal year 2033-34 and 2033-34. As of June 30, 2024, the value of the lease payable is $8,718,073. In fiscal year 2023-24, the City paid $1,735,723 on these leases including an embedded an interest rate of 1.162%.
The following is a summary of changes in lease payable for the year ended June 30, 2024:
Balance Balance Due in
Lease Underlying Asset June 30, 2023 Additions Deletions June 30, 2024 One Year Manhattan Beach Unified School District facilities 885,946$ -$ 885,946 $ -$ -$ Manhattan Beach Unified School District facilities - 9,071,298 658,511 8,412,787 707,004 Solar trash bins 32,144 - 27,506 4,638 4,638
Solar trash bins - 332,416 90,169 242,247 94,430 Pitney Bowes postage equipment 3,554 - 3,554 - -
AIS multifunction copiers 173,859 - 115,458 58,401 58,401 1,095,503$ 9,403,714$ 1,781,144$ 8,718,073$ 864,473$ Future principa
l and interest requirements to maturity for lease liability are as follows:
Principal Interest Total
Payments Payments Payments
864,473$ 227,379$ 1,091,852$
855,345 205,676 1,061,021
861,499 181,941 1,043,440
867,048 159,985 1,027,033
925,598 137,381 1,062,979
4,344,110 291,850 4,635,960
8,718,073$ 1,204,212$ 9,922,285$
Government al A c t ivit ies
Lease assets at June 30, 2024 include the following:
Lease Underlying Asset
Amount of
Leased Capital
Assets
Accumulated
Amortization
Manhattan Beach Unified School District facilities 2,551,402$ 2,551,402 $ Manhattan Beach Unified School District facilities 9,071,298 907,130 Solar trash bins 86,211 81,674
Solar trash bins 332,416 94,976
Pitney Bowes postage equipment 10,541 10,541 AIS multifunction copiers 400,812 343,553
Total 12,452,680 $ 3,989,276 $
58 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 6: SUBSCRIPTION BASED TECHNOLOGY ARRANGEMENTS
Subscription Liability
Balance as of Balance as of Due in
June 30, 2023 Reductions June 30, 2024 One Year
Governmental activities 584,503$ 140,540$ 443,963$ 192,803$ Business-type activities 25,846 12,792 13,054 13,054 Total Subscription Liability 610,349$ 153,332$ 457,017$ 205,857$
Governmental Activities:
On July 15, 2022, the City entered into a 45 months subscription for the use of ProcureNow – Eprocurement Solution. An initial subscription liability was recorded in the amount of $91,689. As of June 30, 2024, the value of the subscription liability is $46,522. The City is required to make annual fixed payments of $24,000. The subscription has an interest rate of 2.11%. The value of the right to use asset as of June 30, 2024 is $91,689 with accumulated amortization of $47,950. The City has two extension options, each for 12 months.
On September 21, 2022, the City entered into a 36 months subscription for the use of Clear Gov – Budget Solution. An initial subscription liability was recorded in the amount of $70,050. As of June 30, 2023, the value of the subscription liability is $22,343. The City is required to make annual fixed payments of $23,040. The subscription has an interest rate of 3.12%. The value of the right to use asset as of June 30, 2024 is $70,050 with accumulated amortization of $41,511.
On July 1, 2022, the City entered into a 36 months subscription for the use of Medic Clipboard. An initial subscription liability was recorded in the amount of $26,227. As of June 30, 2023, the value of the subscription liability is $8,741. The City is required to make annual fixed payments of $8,919. The subscription has an interest rate of 2.04%. The value of the right to use asset as of June 30, 2023 is $26,227 with accumulated amortization of $17,485.
On March 15, 2023, the City entered into a 55 months subscription for the use of AXON. An initial subscription liability was recorded in the amount of $358,784. As of June 30, 2024, the value of the subscription liability is $325,230. The City is required to make monthly fixed payments of $8,653. The subscription has an interest rate of
2.23%. The value of the right to use asset as of June 30, 2024 is $358,784 with accumulated amortization of $101,329.
On July 25, 2022, the City entered into a 35 months subscription for the use of Fuel View. An initial subscription liability was recorded in the amount of $31,252. As of June 30, 2023, the value of the subscription liability is $7,186. The City is required to make monthly fixed payments of $660. The subscription has an interest rate of
2.04%. The value of the right to use asset as of June 30, 2024 is $31,252 with accumulated amortization of $20,716.
On July 12, 2022, the City entered into a 24 months subscription for the use of Fleetio. An initial subscription liability was recorded in the amount of $44,939. As of June 30, 2023, the value of the subscription liability is $0.
The City is required to make annual fixed payments of $22,680. The subscription has an interest rate of 1.89%.
The value of the right to use asset as of June 30, 2023 is $44,939 with accumulated amortization of $21,783.
On November 25, 2022, the City entered into a 36 months subscription for the use of Esri Gis Software. An initial subscription liability was recorded in the amount of $101,855. As of June 30, 2024, the value of the subscription liability is $33,941. The City is required to make annual fixed payments of $35,000. The subscription has an interest rate of 3.12%. The value of the right to use asset as of June 30, 2024 is $101,855 with accumulated amortization of $54,323.
59 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 6: SUBSCRIPTION BASED TECH NOLOGY ARRANGEMENTS (CONTINUED)
Business-Type Activities:
On July 1, 2022, the City entered into a 30 months subscription for the use of Hadronex. An initial subscription liability was recorded in the amount of $38,836. As of June 30, 2024, the value of the subscription liability is $13,054. The City is required to make annual fixed payments of $13,320. The subscription has an interest rate of
2.04%. The value of the right to use asset as of June 30, 2023 is $38,840 with accumulated amortization of $31,070.
Future principal and interest requirements to maturity are as follows:
Fiscal Year
Principal
Payments
Interest
Payments
Total
Payments
2025 192,804$ 9,249 $ 202,053 $
2026 123,277 4,557 127,834
2027 102,021 1,813 103,834
2028 25,861 96 25,957
443,963$ 15,715 $ 459,678 $
Gov ernmental Activ ities
Fiscal Year
Principal
Payments
Interest
Payments
Total
Payments
2025 13,054 $ 266 $ 13,320 $
Business-Type Activ ities
The amount of subscription assets at June 30, 2024 was as follows:
Asset Class
Subscription
Asset Value
Accumulated
Amortization
Governmental activities
Software subscription 724,796$ 327,567 $
Business-type activ ities
Software subscription 38,840 31,070 Total subscriptions 763,636 $ 358,637 $
As of Fiscal Year-End
60 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 7: CAPITAL ASSETS AND DEPRECIATION
In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the Government-Wide Statement of Net Position. The City elected to use the basic approach as defined by GASB Statement No. 34 for all infrastructure reporting, whereby depreciation and amortization expense and accumulated depreciation and amortization have been recorded. The following table presents the capital assets activity for the year ended June 30, 2024:
Balance Balance
July 1, 2023 Adjustments * Additions Deletions Transfers June 30, 2024 Governmental activities:
Capital assets, not being depreciated/amortized
Land 33,634,565 $ - $ - $ - $ - $ 33,634,565$ Construction-in-progress 17,820,518 694,518 8,016,200 - (417,054) 26,114,182 Total capital assets, not being depreciated/amortized 51,455,083 694,518 8,016,200 - (417,054) 59,748,747 Capital assets, being depreciated/amortized
Buildings and structures 44,106,833 - - - - 44,106,833 Machinery and equipment 6,042,053 - 82,801 (29,018) 169,262 6,265,098 Intangible assets 1,060,072 - - - - 1,060,072 Vehicles 12,976,182 - 2,790,570 (394,508) 232,492 15,604,736 Infrastructure
Streets/ Roadways 71,813,129 - 4,150,937 - - 75,964,066 Parks & Recreation 22,688,011 - - - 15,300 22,703,311 Lease assets
Building and structure 2,551,402 - 9,071,298 (2,551,402) - 9,071,298 Machinery and equipment 497,564 - 332,416 - - 829,980 Subscriptions 724,796 - - - - 724,796 Investment in RCC Joint Venture 3,703,419 - 1,067 - - 3,704,486 Total capital assets, being depreciated/amortized 166,163,461 - 16,429,089 (2,974 ,928) 417,054 180,034,676 Less accumulated depreciation/amortization
Buildings and structures (16,378,826) - (854,617) - - (17,233,443) Machinery and equipment (5,040,873) - (336,088) 29,018 - (5,347,943) Intangible asset (250,386) - (89,966) - - (340,352) Vehicles (9,088,557) - (934,819) 275,737 - (9,747,639) Infrastructure
Streets/ Roadways (39,608,166) - (1,843,853) - - (41,452,019) Parks & Recreation (8,615,522) - (404,883) - - (9,020,405) Lease assets
Building and structure (1,700,934) - (1,757,598) 2,551,402 - (907,130) Machinery and equipment (290,512) - (240,232) - - (530,744) Subscriptions (125,606) - (201,961) - - (327,567) Investment in RCC Joint Venture (1,884,643) - (168,452) - - (2,053,095) Total accumulated depreciation/amortization (82,984,025) - (6,832,469) 2,856,157 - (86,960,337) Total capital assets, being depreciated/amortized, net 83,179,436 - 9,596,620 (118,771) 417,054 93,074,339 Total governmental activities capital assets 134,634,519$ 694,518 $ 17,612,820$ (118,771)$ -$ 152,823,086$ * Adjustments w ere to property capitalized prior year ERP implementation costs. 61 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 7: CAPI
TAL ASSETS AND DEPRECIATION (CONTINUED)
Depreciation expense was charged to functions of the primary government as follows:
General government 345,534$
Public safety 1,816,718
Public works 700,010
Parks and recreation 2,909,965
Internal service funds 1,060,242
Total depreciation/amortization expense 6,832,469$
Balance Balance
July 1, 2023 Adjustments * Additions Deletions Transfers June 30, 2024 Business-type activities:
Capital assets, not being depreciated/amortized
Land - Water 307,967 $ - $ -$ -$ -$ 307,967$
Land - Storm Drain 857,650 - - - - 857,650 Land - Parking 1,441,817 - - - - 1,441,817 Construction-in-progress 48,424,124 2,173,042 4,401,856 (170,816) - 54,828,206 Total capital assets, not being depreciated/amortized 51,031,558 2,173,042 4,401,856 (170,816) - 57,435,640 Capital assets, being depreciated/amortized
Buildings and structures - Parking 18,086,181 - - - - 16,689,471 Machinery and equipment
Parking 3,314,879 - - - - 4,711,589
Water 34,369,244 - 134,607 - - 34,503,851
Storm Drain 7,703,405 - - - - 7,703,405
Wastewater 16,304,359 - 126,661 - - 16,431,020
Intangible assets
Parking 28,507 - - - - 28,507
Water 62,177 - - - - 62,177
Wastewater 33,302 - - - - 33,302 Subscriptions 38,840 - - - - 38,840 Total
capital assets, being depreciated/amortized 79,940,894 - 261,268 - - 80,202,162 Less accumulated depreciation/amortization
Buildings and structures - Parking (3,007,457) - (118,289) - - (3,125,746) Machinery and equipment
Parking (1,829,563) - (208,473) - - (2,038,036)
Water (16,508,825) - (617,017) - - (17,125,842)
Storm Drain (5,060,114) - (119,814) - - (5,179,928) Wastewater (8,208,167) - (309,055) - - (8,517,222) Intangible assets
Parking (5,702) - (2,533) - - (8,235)
Water (12,249) - (5,547) - - (17,796)
Wastewater (6,660) - (2,960) - - (9,620) Subscriptions (15,451) - (15,535) (84) - (31,070) Total accumulated depreciation/amortization (34,654,188) - (1,399,223) (84) - (36,053,495) Total capital assets, being depreciated/amortized, net 45,286,706 - (1,137,955) (84) - 44,148,667 Total business-type activities capital assets 96,318,264$ 2,173,042$ 3,263,901$ (170,900)$ -$ 101,584,307$ * Adjustments w ere to property capitalized prior year ERP implementation costs. 62 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 7: CAPITAL ASSETS A ND DEPRECIATION (CONTINUED)
Depreciation expense was charged to functions of the primary government as follows:
Water 622,564 $
Wastewater 119,814
Parking 329,295
Stormwater 327,550
Total depreciation/amortization expense 1,399,223$
NOTE 8: LONG-TERM DEBT
The following is a summary of changes in long-term debt for the year ended June 30, 2024:
Balance Balance Due in
June 30, 2023 Additions Deletions June 30, 2024 One Year Governmental Activities:
Leases payable (Note 5) 1,095,503$ 9,403,714$ 1,781,144$ 8,718,073$ 864,473$ Subscription payable (Note 6) 584,503 - 140,540 443,963 192,803 Compensated absences (Note 9) 4,422,604 8,940,822 8,169,620 5,193,806 1,066,469 Claims liability (Note 15) 18,126,985 7,830,691 6,239,868 19,717,808 12,143,308 Certificates of participation:
Marine Ave Park Refunding COP Series 2016 4,075,000 - 345,000 3,730,000 360,000 2013 Police and Fire Refunding COP 5,530,000 - 575,000 4,955,000 600,000 2021 Fire Station No. 2 COP 7,210,000 - 135,000 7,075,000 140,000 2021 Pension Obligation Bonds 82,910,000 - 3,393,370 79,516,630 3,422,710 Total Gov ernmental 123,954,595$ 26,175,227$ 20,779,542 $ 129,350,280 18,789,763$ Unamortized premium 1,563,813
130,914,093$
Busine ss-Type Activitie s:
Subscription payable (Note 6) 25,846$ -$ 12,793$ 13,053$ 13,053$ Compensated absences (Note 9) 220,104 245,450 295,894 169,660 30,610 Certificates of Participation
2021 Refunding COPs 5,335,000 - 640,000 4,695,000 670,000 2021 Pension Obligation Bonds 1,750,000 - 71,630 1,678,370 72,287 Total Business Type 7,330,950$ 245,450$ 1,020,317$ 6,556,083 785,950$ Unamortized premium 911,287
7,467,370$
A. Marine Avenue Certificates of Participation Series 2016
On November 9, 2016, the City issued $5,905,000 Certificate of Participation Series 2016 (Marine Field Refunding) to refund the outstanding balance of the Variable Rate Demand Refunding Certificates of Participation Series 2002. The Certificates represents the proportionate interest on the lease payments to be made by the City as rent for the use of certain real property located in the City and consisting of the police department and fire department headquarter facility. The Certificates bear interest at a rate of 3% to 4% with principal ranging from $265,000 to $465,000 and maturing on January 2033. The balance at June 30, 2024, includes an unamortized bond premium of $232,180 which will be amortized over the life of the issue. 63 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 8: LONG-TERM DEBT (CONTINUED)
Annual debt service requirements to maturity for the Marine Avenue Certificates of Participation Series 2016 are as follows:
Fiscal Year Ending
June 30, Principal Interest Total
2025 360,000 $ 123,100 $ 483,100 $
2026 370,000 108,700 478,700
2027 390,000 93,900 483,900
2028 405,000 78,300 483,300
2029 415,000 66,150 481,150
2030-2033 1,790,000 136,050 1,926,050
Total 3,730,000 $ 606,200 $ 4,336,200 $
In the event of a default, there is no remedy of acceleration of the total lease payments due over the term of the lease agreement and the trustee is not empowered to sell the leased premises and use the proceeds of such a sale to redeem the 2016 certificates or pay debt service thereon. The city will be liable only for lease payments on an annual basis, and the trustee will be required to seek a separate judgment each year for the year’s defaulted lease payments.
B. 2013 Police and Fire Facility Refunding Certificates of Participation
In February 2013, the City issued $10,510,000 of Certificates of Participation, Series 2013, to advance refund the 2004 Police and Fire Certificates of Participation (2004 COP). The payments under the lease agreement are due January and July of each year until maturity in January 2032 and include interest rates ranging from 2% to 4%.
The proceeds were used to purchase U.S. Government securities that were placed in an irrevocable trust for the purpose of generating resources for all future debt service payments of the refunded debt. The balance at June 30, 2023, includes an unamortized bond premium of $197,702 which will be amortized over the life of the issue.
The reacquisition price exceeded the net carrying amount of the old debt by $595,473. This amount is being deferred as an outflow of resources and amortized over the remaining life of the refunded debt. The outstanding balance at June 30, 2024 is $241,407.
Annual debts service requirements to maturity for the 2013 Police and Fire Certificates of Participation are as follows:
Fiscal Year Ending
June 30, Principal Interest Total
2025 600,000$ 175,463$ 775,463$
2026 620,000 151,463 771,463
2027 650,000 126,663 776,663
2028 675,000 100,663 775,663
2029 695,000 79,569 774,569
2030-2032 1,715,000 99,000 1,814,000
Total 4,955,000$ 732,821$ 5,687,821$
64 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 8: LONG-TERM DEBT (CONTINUED)
In the event of a default, there is no remedy of acceleration of the total lease payments due over the term of the lease agreement and the trustee is not empower to sell the leased premises and use the proceeds of such a sale to redeem the 2013 certificates or pay debt service thereon. The city will be liable only for lease payments on an annual basis, and the trustee will be required to seek a separate judgment each year for the year’s defaulted lease payments.
C. 2022 Fire Station COP
In August 2022, the City of Manhattan Beach issued $7,440,000 of Certificates of Participation (COP) to pay a portion of the costs to constructing and equipping a fire station and related improvements and pay certain costs of issuance. The payments under the lease agreement are due January and July of each year until maturity in January 2051 and include interest rates ranging from 3% to 5%. The COP includes an unamortized premium of $1,133,932 at June 30, 2024, which will be amortized over the life of the issue.
Annual debt service requirements to maturity for the 2022 Fire Station Certificates of Participation are as follows:
Fiscal Year Ending
June 30, Principal Interest Total
2025 140,000 $ 262,500 $ 402,500 $
2026 145,000 255,375 400,375
2027 155,000 247,875 402,875
2028 165,000 239,875 404,875
2029 170,000 231,500 401,500
2030-2034 1,000,000 1,016,250 2,016,250
2035-2039 1,250,000 765,250 2,015,250
2040-2044 1,510,000 502,925 2,012,925
2045-2049 1,760,000 252,450 2,012,450
2050-2051 780,000 23,550 803,550
Total 7,075,000 $ 3,797,550 $ 10,872,550 $
In the event of default, there is no remedy of acceleration of the total lease payments due over the term of the lease agreement and the Trustee is not empowered to sell the leased premises and use the proceeds of such a sale to redeem the 2022 Certificates or pay debt service. The City will be liable for the Lease payment on an annual basis and the Trustee would be required to seek a separate judgement each year for the year’s defaulted lease payments.
D. 2021 Refunding Certificates of Participation
In November 2021, the City of Manhattan Beach issued $5,925,000 of fixed rate Refunding Certificates of Participation Series 2021 to refund the Certificates of Participation (Metlox and Water/Wastewater Refunding) Series 2012 (“the Certificates”). The payments under the lease agreement are due January and July of each year with an interest rate of 5% and mature through 2032. The COP includes an unamortized premium of $911,285 at June 30, 2024, which will be amortized over the life of the issue.
65 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 8: LON
G-TERM DEBT (CONTINUED)
Annual debt service requirements to maturity for the Metlox and Water/Wastewater Refunding Certificates of Participation are as follows:
Fiscal Year Ending
June 30, Principal Interest Total
2025 670,000 $ 234,750 $ 904,750 $
2026 705,000 201,250 906,250
2027 490,000 166,000 656,000
2028 515,000 141,500 656,500
2029 540,000 115,750 655,750
2030-2032 1,775,000 180,500 1,955,500
Total 4,695,000 $ 1,039,750 $ 5,734,750 $
In the event of default, there is no remedy of accelerati on of the total lease payments due over the term of the lease agreement and the Trustee is not empowered to sell the leased premises and use the proceeds of such a sale to redeem the 2021 Certificates or pay debt service. The City will be liable for the Lease payment on an annual basis and the Trustee would be required to seek a separate judgement each year for the year’s defaulted lease payments.
E. 2022 Taxable Pension Obligation Bonds
In May 2022, the City of Manhattan Bea
ch issued $91,275,000 of Taxable Pension Obligation Bonds (POB). The bonds were issued to pay the City’s unfunded accrued actuarial lability to the California Public Employees Retirement System with respect to the City’s defined benefit retirement plans for City employees. The payments under the agreement are due January and July of each year with interest rates ranging from 0.12% to 2.79% and mature through January 2043.
Annual debt service requirements to maturity for the 2022 Taxable Pension Obligation Bonds are as follows:
Fiscal Year Ending
June 30, Principal Interest Total
2025 3,495,000 $ 2,043,872 $ 5,538,872 $
2026 3,530,000 2,009,411 5,539,411
2027 3,580,000 1,967,546 5,547,546
2028 3,635,000 1,911,375 5,546,375
2029 3,710,000 1,845,255 5,555,255
2030-2034 19,840,000 7,980,172 27,820,172
2035-2039 22,650,000 5,262,789 27,912,789
2040-2043 20,755,000 1,636,338 22,391,338
Total 81,195,000 $ 24,656,758 $ 105,851,758 $
The bonds are not
secured by any property other than the funds that the City has actually deposited with the trustee. If the City is in bankruptcy, it may not be obligated to make any further deposits with the Trustee, it may not be obligated to make any further allocations to the Bonds, and it may not be obligated to turn over to the Trustee any moneys that have been allocated to the Bonds in the City treasury. As a result, the Bonds would likely be treated as unsecured obligations of the City in the bankruptcy case. 66 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 9: COMPENSATED ABSENCES
At June 30, 2024, the total citywide accrued liability for compensated absences amounted to $5,363,466. $5,193,806 relates to general government services and $169,660 to business-type activities. The governmental activities liability is generally liquidated by the General Fund and the business-type activities liabilities are liquidated by the corresponding proprietary funds.
NOTE 10: NON-CITY OBLIGATION
Reported in the custodial fund are special assessment tax bonds related to various special assessment districts included within the City. In March 2018, the City refunded the outstanding bonds for Underground Assessment Districts 04-1, 04-3, 04-5, 05-2 and 05-6. These bonds were issued for the purpose of financing the construction of certain public improvements within the underground utility assessment districts. The amount refunded was $6,245,000. The sources of the refunding were bond proceeds of $4,995,000, balance in the capital improvement fund, current year assessments, and net reduction in bond reserve requirements. In December 2019, the City issued two separate limited obligation improvement bonds totaling $9,390,000 under provisions of the Improvement Bond Act of 1915, for Underground Assessment Districts 19-12 and 19-14 and in March 2020, the City issued $5,245,000 for Underground District 19-4. These bonds were issued for the purpose of financing the construction of certain public improvements within the underground utility assessment districts. The bonds are secured solely by the subject properties and the amounts held in respective reserve and bond funds. The bonds are not secured by the general taxing power of the City of Manhattan Beach and the City has not pledged credit for payment thereof. The debt outstanding as June 30, 2024, consists of the following:
Original Oustanding
Description Amount 6/30/2024
Reassessment District No. 2018 Limited Obligation Refunding Bonds, Series 2018 4,995,000$ 1,630,000 $ Assessment District No. 19-12 Limited Obligation Improvement Bonds, 2019 Series A 4,605,000 3,920,000 Assessment District No. 19-14 Limited Obligation Improvement Bonds 2019, Series A 4,785,000 4,140,000 Assessment District No. 19-4 Limited Obligation Improvement Bonds, 2020 Series A 5,245,000 4,435,000 Total 14,125,000$
NOTE 11: CALPERS RETIREMENT PLANS
Net Pension Deferred Pension Deferred Pension Pension
Liability/(Asset) Outflows Inflows Expense/(Income)
CalPERS Plans
Miscellaneous Plan 10,793,468 $ 12,731,230 $ (569,398) $ 3,354,401 $ Safety - Police Plan 8,684,519 21,097,346 (13,883,409) 9,444,115 Safety - Fire Plan 4,663,874 10,333,242 (6,258,213) 4,381,373 Total CalPERS 24,141,861 44,161,818 (20,711,020) 17,179,889 City Plans
Supplemental Retirement Plan 47,832 - - 9,508 Single Highest Year Plan 97,984 - - 19,476 Total City Plans 145,816 - - 28,984 Total 24,287,677 $ 44,161,818 $ (20,711,020) $ 17,208,873 $
67 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREMENT PLANS (CONTINUED)
A. Miscellaneous Employee Pension Plan
Plan Description
The Miscellaneous Plan of the City of Manhattan Beach is an agent multiple-employer defined benefit pension plan administered by the California Public Employees’ Reti rement System (CalPERS). A full description of the pension plan regarding number of employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership information are listed in their respective June 30, 2022 Annual Actuarial Valuation Reports. Details of the benefits provided can be obtained in Appendix B of the actuarial valuation reports. This report and CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website under Forms and Publications.
Benefit Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. The plan provisions and benefits in effect at June 30, 2023 measurement date, are summarized as follows:
Tier I * PEPRA
Hire date Prior to or on
December 31,2012
On or after
January 1, 2013
Benefit formula 2.0% @ 55 2.0% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life
Retirement age minimum 50 yrs minimum 52 yrs
Monthly benefits, as a % of
eligible compensation
1.426% - 2.418%
50 yrs - 63+ yrs,
respectively
1.000% - 2.500%,
52 yrs - 67+ yrs,
respectively
Required employee contribution rates 7.000% 7.750%
Required employer contribution rates (1) 9.950% 9.950%
* Closed to new entrants
(1) Blended rate.
Miscellaneous Plan
Benefit payments are calculated using the benefit formula above multiplied by the number of years of service and highest single year of compensation for Tier 1 or highest three year average of compensation for PEPRA.
68 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREMENT PLANS (CONTINUED)
At June 30, 2024, the following employees were covered by the benefit terms of the plan:
Description Classic PEPRA
Active members 87 203
Transferred members 96 44
Terminated members 119 114
Retired members and
beneficiaries 280 10
Total 582 371
Number of Participants
Miscellaneous Plan
Contribution Description
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are 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. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.
For the year ended June 30, 2024, the employer contributions recognized as a reduction to net pension liability for the Miscellaneous Plan was $1,976,642.
Net Pension Liability/(Asset)
The City’s net pension liability/(asset) is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability/(asset) of the Miscellaneous Plans is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022. A summary of principal assumptions and methods used to determine the net pension liability/(asset) is shown below.
69 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREME
NT PLANS (CONTINUED)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability/(Asset) Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry Age Normal Cost Method
Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table 1 Derived using CalPERS’ membership data for all funds
Post Retirement Benefit
Increase
The lesser of contract COLA or 2.30% until
Purchasing Power Protection Allowance floor on
purchasing power applies, 2.30% thereafter
Actuarial Assumptions
1 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.
Long-term Expec
ted 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. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:
Asse t Cla ss (1)
Assume d Asse t
Allocation
Real Return
Years 1 - 10 (1, 2)
Global Equiry - Cap-weighted 30.00% 4.54%
Global Equiry - Non-Cap-weighte 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corportates 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%
Total 100.00%
(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 MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREMENT PLANS (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.
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
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability/(Assets)
(c)=(a)-(b)
Balance at: 6/30/2022 (Valuation Date) 137,374,490 $ 129,607,944 $ 7,766,546 $ Changes Recognized for the Measurement Period:
Service Cost 3,134,299 - 3,134,299 Interest on the Total Pension Liability 9,482,836 - 9,482,836 Changes of Benefit Terms 186,466 - 186,466 Difference between Expected and Actual
Experience 1,524,258 - 1,524,258 Contribution from the Employer - 1,976,642 (1,976,642) Contributions from Employees - 1,542,323 (1,542,323) Net Inv estment Income - 7,877,280 (7,877,280) Benefit Payments including Refunds of Employee
Contributions (6,439,916) (6,439,916) - Administrativ e Expense - (95,308) 95,308 Net Changes During 2022-23 7,887,943 4,861,021 3,026,922 Balance at: 6/30/2023 (Measurement Date) 145,262,433$ 134,468,965 $ 10,793,468 $ Increase (Decrease)
Sensitivity of the Net Pension Liability/(Asset) to Changes in the Discount Rate
The following presents the net pension liability/(asset) of the Plan as of the measurement date, calculated using the discount rate of 6.90 percent, as well as what the net pension liability/(asset) would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90 percent) or 1 percentage-point higher (7.90 percent) than the current rate:
Discount Rate - 1%
(5.90%)
Current Discount Rate
(6.90%)
Discount Rate +1%
(7.90%)
Plan's Net Pension
Liability/(Assets) 30,803,468$ 10,793,468 $ (5,602,995) $
Pension Plan Fiduciary Net Position
The plan fiduciary net position disclosed in the GASB 68 accounting valuation report may differ from the plan assets reported in the funding actuarial valuation report due to several reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included as assets. These amounts are excluded for rate setting purposes in the funding actuarial valuation. In 71 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREMENT PLANS (CONTINUED)
addition, differences may result from early Annual Comprehensive Financial Report closing and final reconciled reserves. Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS website for additional information.
Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2022), the net pension liability was $7,766,546. For the measurement period ending June 30, 2023 (the measurement date), the City incurred a pension expense/(income) of $3,354,401 for the Plan.
As of June 30, 2024, the City has deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Outflows of
Resources
Deferred Inflows of
Resources
City pension contributions subsequent to
measurement date 2,214,398 $ - $
CalPERS deferrals
Changes of Assumptions 1,801,537 -
Differences Between Expected and Actual
Experience 1,062,362 (569,398)
Net Difference between Projected and
Actual
Earnings on Pension Plan Investments 7,652,933 - Total CalPERS deferrals 10,516,832 (569,398) Total 12,731,230$ (569,398)$
Miscellaneous Pension Plan
$2,214,398 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflows or deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Measurement Period
ended
June 30:
Net Deferred
Outflows/(Inflows) of
Resources
2024 3,173,331$
2025 2,152,339
2026 4,431,514
2027 190,250
9,947,434$
72 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREMENT PLANS (CONTINUED)
Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
The EARSL for the Plan for the measurement period ending June 30, 2023 is 3.3 years, which was obtained by dividing the total service years of 2,879 (the sum of remaining service lifetimes of the active employees) by 863 (the total number of participants: active, inactive, and retired). Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.
B. Safety Police Pension Plan and Safety Fire Pension Plan
Plan Description
All qualified permanent and probationary safety employees are eligible to participate in the Safety Risk Pool Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of a safety risk pool, which are comprised of individual employer safety rate plans, respectively. Individual employers may sponsor more than one safety rate plan. Each individual employer rate plan generally has less than 100 active members.
Benefits Provided
The Plan was established to provide retirement, death and disability benefits to public agency rate plans with generally less than 100 active members. The benefit provisions for PERF C employees are established by statute. A full description regarding the number of em ployees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership information for the respective rate plan is listed in the respective rate plan’s June 30, 2019 Annual Valuation Report (funding valuation). Details of the benefits provided can be obtained in Appendix B of the funding evaluation report. This report and CalPERS’ audited financial statements are publicly available reports that can be found on CalPERS’ website at https://www.calpers.ca.gov/page/forms-publications.
Net Difference between
projected and actual
earnings on pension plan
investments
5 year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lifetime (EARSL) of
all members that are provided with benefits
(active, inactive, and retired) as of the beginning
of the measurement period
73 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREME
NT PLANS (CONTINUED)
Below is a summary of the plan provisions and benefits in effect at June 30, 2023 measurement date, for which the City of Manhattan Beach has contracted:
Tier I * PEPRA Tier I * PEPRA
Hire date Prior to or on
December 31,2012
On or after
January 1, 2013
Prior to or on
December 31,2012
On or after
January 1, 2013
Benefit formula 3.0% @ 50 2.7% @ 57 3.0% @ 55 2.7% @ 57 Benefit v esting schedule 5 years of serv ice 5 years of serv ice 5 years of serv ice 5 years of serv ice Benefit payments monthly for life monthly for life monthly for life monthly for life Retirement age minimum 50 yrs minimum 50 yrs minimum 50 yrs minimum 50 yrs Monthly benefits, as a % of
eligible compensation 3.000%, 50+ yrs 2.700%,
50 yrs - 57+ yrs,
3.000%, 50 yrs -
55+ yrs,
2.700%,
50 yrs - 57+ yrs,
Required employee contribution rates 9.000% (1) 14.500% 9.000% (1) 14.500% Required employer contribution rates 29.09% (3) 14.500% 26.11% (2) 14.500% Management safety
Employee 9.000% 14.500% 9.000% 14.500%
Employer 29.090% 14.500% 26.110% 14.500%
* Closed to new entrants
(1) Not including 3% cost share, which would increase rate to 12%. (2) Not including cost share, which will lower rate to 23.110%. (3) Not including cost share, which will lower rate to 26.090%.
Safety Police Plan Safety Fire Plan
Benefit payments are calculated using the benefit formula above multiplied by the number of years of service and highest single year of compensation for Tier 1 or highest three year average of compensation for PEPRA.
Employees Covered
At June 30, 2023 meas
urement date, the following employees were covered by the benefit terms of the Plan:
Description Classic PEPRA Classic PEPRA
Active members 44 16 26 1
Transferred members 11 2 2 1
Terminated members 8 4 3 -
Retired members and beneficiaries 127 - 53 -
Total 190 22 84 2
Number of members
Safety Police Plan Safety Fire Plan
Contribution Description
Section 20
814(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. For public agency cost-sharing plans covered by either the Miscellaneous or Safety risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. 74 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREMENT PLANS (CONTINUED)
For the year ended June 30, 2024, the employer contributions recognized as a reduction to the net pension liability was $1,967,512 for the Safety Police Plan and $1,117,524 for the Safety Fire Plan for a total of $3,085,036 for the safety plans.
Pension Liabilities/Assets, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
The City of Manhattan Beach reported net a pension liability at June 30, 2024, of $8,684,519 and $4,663,874 for its proportionate shares of the Safety Police Plan and the Safety Fire Plan respectively.
The City’s net pension liability/(asset) for the safety plan is measured as the proportionate share of the net pension liability/asset. The net pension liability/(asset) of the Plan is measured as of June 30, 2023, and the total pension liability for the Plan used to calculate the net pension liability/(asset) was determined by an actuarial valuation as of June 30, 2022. The City’s proportion of the net pension liability/(asset) was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability/(asset) for the safety plan as of June 30, 2022 and 2023, was as follows:
Safety Fire Plan Safety Police Plan
Proportion - June 30, 2022 -0.063669% -0.144460%
Proportion - June 30, 2023 0.030311% 0.086170%
Changes - Increase (Decrease) 0.093980% 0.230630%
For the year ended June 30, 2023, the City recognized pension expense/(income) of $9,444,115 and $4,381,373 for the Safety Police Plan and the Safety Fire Plan respectively. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
City pension contribution subsequent to
measurement date $ 2,148,112 - $ $ 1,261,924 - $ CalPERS Deferrals:
Difference between expected and actual
experience 637,604 (52,423) 342,414 (29,314) Change in Assumptions 506,840 - 272,190 - Net difference between projected and
actual earnings on pension plan
inv estments 1,188,474 - 638,250 - Adjustment due to difference in
proportions 9,525,395 (5,810,359) 4,547,579 (2,573,240) Difference in proportionate share 7,090,921 (8,020,627) 3,270,885 (3,655,659) Total CalPERS Deferrals 18,949,234 (13,883,409) 9,071,318 (6,258,213) Total 21,097,346$ (13,883,409)$ 10,333,242$ (6,258,213)$ Safety - Police Safety - Fire
75 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREMENT PLANS (CONTINUED)
$2,148,112 and $1,261,924 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Measurement Period
Ended June 30, Safety Police Plan Safety Fire Plan
2024 3,519,197 $ 1,872,474 $
2025 1,277,815 684,203
2026 233,478 238,612
2027 35,335 17,816
Total 5,065,825 $ 2,813,105 $
Net Deferred Outflows/
(inflows of Resources
Actuarial Methods and Assumptions
The collective total pension liability for the June 30, 2023 measurement period was determined by an actuarial valuation as of June 30, 2022. The collective total pension liability was based on the following assumptions:
Actuarial Cost Method Entry Age Normal Cost Method
Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table (1) Derived using CalPERS’ Membership Data for all Funds
Post Retirement Benefit
Increase
Contract COLA up to 2.00% until Purchasing Power
Protection Allowance Floor on Purchasing Power
applies, 2.3% thereafter
Actuarial Assumptions
(1) The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience studyreport (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.
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.
76 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREMENT PLANS (CONTINUED)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:
Asse t Cla ss (1)
Assume d Asse t
Allocation
Real Return
Years 1 - 10 (1, 2)
Global Equiry - Cap-weighted 30.00% 4.54%
Global Equiry - Non-Cap-weighted 12.00% 3.84%
Priv ate Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corportates 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%
Total 100.00%
(1) An expected inflation of 2.30% used for this period. (2) Figures are based on the 2021 Asset Liability Management study.
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.
Sensitivity of the Net Pension Liability/(Asset) to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability/(asset) of the Plan, calculated using the discount rate for each Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% point lower (5.90 percent) or 1% point higher (7.90 percent) than the current rate:
PERS Cost Sharing Plans
Discount Rate - 1%
(5.90%)
Current Discount
Rate (6.90%)
Discount Rate +1%
(7.90%)
Safety police $ 31,970,639 $ 8,684,519 $ (10,353,541) Safety Fire 15,655,609 4,663,874 (4,322,651) 77 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 11: CALPERS RETIREMENT PLANS (CONTINUED)
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS website for additional information.
NOTE 12: CITY RETIREMENT PLANS
Total Pension Pension
Liability Expense/(Income)
Supplemental Retirement Plan 47,832$ 9,508 $ Single Highest Year Plan 97,984 19,476
Total 145,816$ 28,984$
A. Supplemental Retirement Plan
General Information about the Pension Plan
Plan Description
The Supplemental Retirement Plan is a single employer defined benefit pension plan that covers Police, Fire and Management/Confidential employees who retired prior to January 1995. This plan is currently dormant and does not issue a separate annual financial report.
Benefits Provided
The plan provides the employee the difference between the benefit provided by the California Public Employees Retirement System (PERS) calculated under the life annuity option and the PERS benefit had the City adopted the Police Officers’ Standards and Training (POST) widows and orphans salary continuation plan. The plan states, “The City shall pay each retiring officer, sergeant, lieutenant, firefighter and management employee upon retirement, a monthly amount which would make up the difference for that option of which the officer will receive from PERS under Government Code Section 21330 through 21335 and what only the officer would have received while alive had the City adopted the Police Officers’ Standards and Training (POST) widows and orphans salary continuation plan. The payment shall be made to the officer only while the officer is alive and will cease upon death. Upon retirement, the right to their payment shall be regarded as a vested pension benefit to the same extent as the individual’s retirement allowance.” The benefit is payable for the life of the employee. The benefit is subject to a 2% annual cost-of-living increase. This plan is currently dormant.
Employees Covered
Employees covered includes sworn law enforcement officers, fire and management/confidential employees who retired prior to January 1995. Therefore, the plan is dormant. The number of participants covered under the plan as of June 30, 2024, was as follows:
Retirees and beneficiaries receiving benefits
Miscellaneous 3
Total Pension Liability
The total pension liability of $47,832 for the plan is measured as of June 30, 2024 using an annual actuarial valuation dated June 30, 2024. The City is funding the plan on a pay as you go basis.
78 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 12: CITY RETIREMENT PLANS (CONTINUED)
Actuarial Assumptions
A summary of principal assumptions and methods used to determine the pension liability is shown below.
Valuation Date June 30, 2024
Measurement date June 30, 2024
Actuarial cost method Entry age
Pre-retirement mortality rates 2021 CalPERS Retiree Mortality for Miscellaneous Employees Asset valuation method Fair Market Value
Inflation Rate 2.50% per year
Discount rate 3.93 % based on the Bond Buyer 20 Bond Index
The City incurred the accrued liabilities of active participants under the City’s PERS plan as of January 1995. The City’s remaining obligation is to fund the benefits for those participants who were then and are currently retired.
Change of Assumptions
In 2024, the accounting discount rate increased from 3.65 percent to 3.93 percent.
Discount Rate
The discount rate used to measure the total pension liability was based on the Bond Buyer 20 Bond Index.
Change in Total Pension Liability
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability/(Assets)
(c)=(a)-(b)
Balance at: 6/30/2023 48,931 $ - $ 48,931$ Changes Recognized for the Measurement Period:
Interest on the Total Pension Liability 1,617 - 1,617 Employer Contributions - 13,898 (13,898) Benefit Payments (13,898) (13,898) - Experience (Gains)/Losses 8,244 - 8,244 Changes of Assumptions (353) - (353) Other 3,291 - 3,291
Net Changes During 2023-24 (1,099) - (1,099) Balance at: 6/30/2024 47,832 $ - $ 47,832$ Increase (Decrease)
Sensitivity of the Total Pension Liability to Change in the Discount Rate
The following presents the total pension liability of the Plan, calculated using the discount rate of 3.93%, as well as what the Employer’s total pension liability would be if it were calculated using a discount rate that is 1% lower (2.93%) or 1% higher (4.93%) than the current rate:
1% Lower
(2.93%)
Current
Discount Rate
(3.93%)
1% Higher
(4.93%)
Total pension liability 49,121$ 47,832$ 46,623$
79 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 12:
CITY RETIREMENT PLANS (CONTINUED)
Pension Expense
Pension expense/(income) for fiscal year 2023-24 of $12,799 is equal to cash payments of $13,898 less reduction in total pension liability of $1,099.
B. Single Highest Year Plan
General Information about the Pen
sion Plan
Plan Description
The Single Highest Year Plan is a single employer defined benefit pension plan of the City. This plan was adopted effective January 1, 1990, covering Management/Confidential Employees and Non-management/Confidential Sworn Police Employees on July 1, 1990, and is for employees who retired prior to May 1993. The plan is known as the City Funded Single Highest Year Plan. This plan is currently dormant and does not issue a separate annual financial report.
Benefits Provided
The plan pays a retiring employee the difference between the pension payable from PERS and what the PERS pension would be if it were based on the single highest year only. “The payment shall be made to the member only while the member is alive and will cease upon death.” Upon retirement, the right to their payment shall be regarded as a vested pension benefit to the same extent as the individual’s PERS retirement. Benefits vest after five years of service. Retirees must qualify for PERS retirement to qualify for the Single Highest Year Plan. The benefit is payable for the life of the employee and is subject to a 2% annual cost of living increase.
Employees Covered
Employees covered include sworn law enforcement officers, fire, management or confidential and miscellaneous employees who retired prior to May 1993. Therefore, the plan is dormant. The number of participants covered under the plan as of June 30, 2024, was as follows:
Retirees receiving benefits
Miscellaneous 1
Safety 3
Total 4
Total Pension Liability
The total pension liability of $97,984 for the plan is mea sured as of June 30, 2024 using an annual actuarial
valuation dated June 30, 202$. The City is funding the plan on a pay as you go basis.
Actuarial Assumptions
A summary of principal assumptions and methods used to determine the pension liability is shown below.
Valuation Date June 30, 2024
Measurement date June 30, 2024
Actuarial cost method: Entry age
Pre-retirement mortality rates 2021 CalPERS Retiree Mortality for Miscellaneous Employees Asset valuation method Fair Market Value
Inflation Rate 2.50% per year
Discount rate 3.93 % based on the Bond Buyer 20 Bond Index 80 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 12: CITY RETIREMENT PLANS (CONTINUED)
The City incurred the accrued liabilities of active participants under the City’s PERS plan as of May 1993. The City’s remaining obligation is to fund the benefits for those participants who were then and are currently retired.
Change of Assumptions
In 2024, the accounting discount rate increased from 3.65 percent to 3.93 percent.
Discount Rate
The discount rate used to measure the total pension liability was based on the Bond Buyer 20 Bond Index.
Change in Total Pension Liability
Total Pension
Liability
(a)
Plan Fiduciary
Net Position
(b)
Net Pension
Liability/(Assets
)
(c)=(a)-(b)
Balance at: June 30, 2023 103,289 $ - $ 103,289$ Changes Recognized for the Measurement Period:
Interest on the Total Pension Liability 3,311 - 3,311 Employer Contributions - 21,490 (21,490) Benefit Payments (21,490) (21,490) - Experience (Gains)/Losses 16,887 - 16,887 Changes of Assumptions (722) - (722) Other (3,291) - (3,291) Net Changes During 2023-24 (5,305) - (5,305) Balance at: June 30, 2024 97,984 $ - $ 97,984$ Increase (Decrease)
Sensitivity of the Total Pension Liability to Change in the Discount Rate
The following presents the total pension liability of the Plan, calculated using the discount rate of 3.65%, as well as what the Employer’s total pension liability would be if it were calculated using a discount rate that is 1% lower (2.65%) or 1% higher (4.65%) than the current rate:
1% Lower
(2.93%)
Current
Discount Rate
(3.93%)
1% Higher
(4.93%)
Total pension liability 100,624$ 97,984$ 95,507$
Pension Expense
Pension expense/(income) for fiscal year 2023-24 of 16,185 is equal to cash payment of $21,490 less reduction in total pension liability of $5,305.
C. Payable to the Pension Plan
For the Supplemental Retirement Plan and the Single Highest Year Pan, the City’s remaining obligation is to fund the benefits for those participants who are currently retired. The City has assigned $57,289 of the General Fund’s fund balance to pay future benefits.
81 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 13: POST-EMPLOYMENT BENEFITS PLAN
Plan Description - City of Manhattan Beach Retiree Medical Program
The City Retiree Medical Program is a Single Employer Plan that provides a fixed stipend to qualifying retirees and a contribution to all retirees enrolled in PERS medical plan. The City of Manhattan Beach contracts with PERS to participate in the Public Employee Medical and Hospital Care Act (PEMHCA). Under this contract, both active employees and retirees are provided access to health insurance.
Benefits Provided
The following is a description of the current retiree benefit plan under the employee Memoranda of Understanding (MOU):
Firefighters General Employees
Non-sworn
Management Police Officers
Benefit types provided Contribution of HRA Contribution of HRA Contribution of HRA Contribution of HRA Duration of benefits To age 65 To age 65 To age 65 To age 65 Required service 20 years 15 years 15 years 20 years in law enforcement ***
Minimum age 50 50 50 50
Dependent cov erage n/a * n/a * n/a * n/a *
Contribution $400 per month ** $250 per month ** $400 per month for Department Heads
$400 per month **
$250 per month for
others
* Contribution to HRA does not vary by dependent content ** $300 per month for firefighters retiring prior to August 1, 2008. $300 for police hired before December 31, 2007. *** 10 years with the City
Employees Covered
As of the June 30, 2023 actuarial measurement date, the following current and former employees were covered by the benefit terms under the PEMHCA Plan:
Inactive employees currently receing benefits payment 134 Participating active employees 286
Total 420
Contributions
The plan is financed via actuarially determined contributions deposited into a trust fund managed by PERS. PERS has dual independent capacities as a provider of medical plans and as a trustee. In its capacity as a trustee, PERS will be referred to as CERBT (California Employees’ Retirement Benefit Trust). City payments to employees and PERS will be reimbursed by payments fr om CERBT. For fiscal year 2023, the City paid $101,072 for retiree medical benefits and was reimbursed $361,752 from CERBT.
82 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 13: POST-EMPLOYMENT BE
NEFITS PLAN (CONTINUED)
Net OPEB Liability
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:
Valuation Date: June 30, 2023
Actuarial Cost Method: Entry Age
Actuarial Assumptions:
Discount Rate 4.43% per year net of expenses
Inflation 2.5% per year
Salary Increase 2.75% per year
Heathcare Trend 4.0% per year
Mortality 2021 CalPERS mortality for active safety employees 2021 CalPERS mortality for active safety employees
2021 CalPERS active mortality for miscellaneous employees Retirement Rates Police:
Hired 2013 and later: 2021 CalPERS 2.7%@57 Rates for Police Employees Hired 2012 and earlier: 2021 CalPERS 3.0%@50 Rates for Police Employees Firefighters:
Hired 2013 and later: 2021 CalPERS 2.7%@57 Rates for Police Employees Hired 2012 and earlier: 2021 CalPERS 3.0%@55 Rates for Police Employees Miscellaneous:
Hired 2012 and earlier: 2021 CalPERS 2.0%@55 Rates for Miscellaneous Employees Hired 2013 and later: 2021 CalPERS 2.0%@62 Rates for Police Employees Expected Long-Term Rate of Re
turn
Percentage of Assumed
Asset Class Component Portfolio Gross Return
All Equities 40% 7.545%
All Fixed Income 43% 4.250%
Real Estate Investment Trusts 8% 7.250%
All Commodities 4% 7.545%
Treasury Inflation Protected Securities (TIPS) 5% 3.000% Discount Rate
The discount rate used to
measure the total OPEB liability was 4.43%. The rate used for the plan is the real rate of return expected for the plan assets plus the long term inflation assumption.
Change of Assumptions
In 2023, the accounting discount rate increased from 4.08 percent to 4.43 percent. 83 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 13: POST-EMPLOYMENT BENEFITS PLAN (CONTINUED)
Changes in the Net OPEB Liability
The changes in the net OPEB liability for the Plan are as follows:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 Measurement Date 18,380,096$ 11,185,245$ 7,194,851$ Changes recognized for the measurement period:
Service cost 696,531 - 696,531 Interest on total OPEB liability 745,715 398,243 347,472 Employer contributions** - 101,072 (101,072) Administrative expenses - (3,204) 3,204 Actual benefit payments from employer (827,434) (827,434) - Experience (gains)/losses (4,382,036) - (4,382,036) Changes in assumptions (226,367) - (226,367) Net changes (3,993,591) (331,323) (3,662,268) Balance at June 30, 2023 Measurement Date 14,386,505$ 10,853,922$ 3,532,583$ ** Includes $505,065 implied rate subsidy.
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate
The following presents the net OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2023:
1% Decrease
(3.43%)
Current
Discount Rate
(4.43%)
1% Increase
(5.43%)
Net OPEB Liability 5,553,284$ 3,532,583 $ 1,897,403 $
Sensitivity of the Net OPEB Liability 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 measurement period ended June 30, 2023:
1% Decrease
Current
Healthcare Cost
Trend Rates 1% Increase
Net OPEB Liability 1,762,471$ 3,532,583 $ 5,798,983 $
OPEB Plan Fiduciary Net Position
CERBT issues a publicly available financial report that includes financial statements and required supplementary information available on the CalPERS website under the California Employers’ Retiree Benefit Trust (CERBT) Fund.
84 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 13: POST-EMPLOYMENT BENEFITS PLAN (CONTINUED)
OPEB Expense, Deferred Outflows/Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $1,335,783. As of June 30, 2024, the City reported deferred outflows of resources related to OPEB from the following sources:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Difference between expected and actual
experience 5,330 $ (5,479,409)$
Change in assumptions 6,133,699 (265,054) Net differences between projected and actual
return on assets 1,097,165 -
Total 7,236,194$ (5,744,463) $
The deferred outflows and deferred inflows of resources related to OPEB will be recognized as expense as follows:
Year ended
June 30:
Deferred
Outflows/(Inflows)
of Resources
2025 680,863 $
2026 659,784
2027 953,624
2028 472,576
2029 416,088
Thereafter (1,691,204)
1,491,731$
NOTE 14: RETIREMENT PLAN FOR PART-TIME, SEASONAL AND TEMPORARY EMPLOYEES
On June 6, 1997, the City dissolved the City-administered retirement plan for part-time, seasonal and temporary employees and selected the Public Agency Retirement System (PARS) as the retirement program for this group.
The PARS plan is a defined contribution pension plan, which is administered by PARS. Benefits and funding requirements are determined by PARS’ governing board. All members’ earnings are subject to contribution from the employee and the employer. Historically, the contribution rate for both employee and employer has been
3.75% of payroll. In April 2011, the City exercised its option not to pick up 50% share of the required 7.50%.
Consequently, for fiscal year ending June 30, 2024, 100% of contribution is derived from employee deduction.
Total payroll for employees covered by this plan for the year was $1,680,926. The amount of employee contribution was $117,259.
NOTE 15: RISK MANAGEMENT
The City is exposed to various risks of losses related to torts, theft, damage to and destruction of assets, errors and omissions, injuries to employees, and natural disasters. The City adopted a self-insured workers’ compensation program that is administered by City staff and a claims administrator.
85 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 15: RISK MANAGEMENT (CONTINUED)
The City is a member of the CSAC-Excess Insurance Authority, a public entity risk pool currently operating as a common risk management and insurance program for California 95% of counties, 68% of California cities, as well as numerous California educational organizations, special districts, housing authorities, fire districts, and other Joint Powers Authorities. The City pays an annual premium to the pool for its excess insurance coverage including property (earthquake, flood and all risk), workers’ compensation and general liability. The City also purchased separate dedicated earthquake limits for the public safety facility and other key structures.
For workers’ compensation, the City is self-insured for the first $750,000 on each claim with excess coverage up to statutory limits. For general liability, the City is self-insured for the first $500,000 on each claim with excess coverage up to a limit of $25,000,000.
The City is insured for property losses with a deductible of $10,000 for all-risk (fire and theft) and earthquake loss with a deductible of 2% or minimum $100,000, whichever is greater.
Claims expenditures and liabilities (general and worker’s compensation) are reported when it is probable that a loss has occurred, and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. This liability is the City’s best estimate based on available information.
Reserves for open claims have been established in accordance with an analysis performed by a third-party claims’ administrator. In addition, reserves for incurred but not reported claims have been estimated based on actuarial valuation. Total reserves for both workers’ compensation and general liability at June 30, 2024 are as follows:
Estimated
Claims Value at
Fiscal Year End
Additional
Reserves for
Incurred But Not
Report Claims
Total Claims
Reserve
Workers' Compensation Claims $ 9,059,914 6,819,500$ 15,879,414 $ General Liability Claims 3,083,394 755,000 3,838,394 12,143,308$ 7,574,500 $ 19,717,808 $
The following is a summary of the changes in the claims liability over the past two fiscal years.
Beginning Ending
Balance Increase Decrease Balance
2022-2023
Workers'comp 15,384,287$ 3,611,831$ 3,641,188$ 15,354,930$ General liabilities 2,419,738 4,032,623 3,680,306 2,772,055 Total 17,804,025$ 7,644,454$ 7,321,494$ 18,126,985$ 2023-2024
Workers'comp 15,354,930$ 4,477,824$ 3,953,340$ 15,879,414$ General liabilities 2,772,055 3,352,866 2,286,527 3,838,394 Total 18,126,985$ 7,830,690$ 6,239,867$ 19,717,808$ Fiscal Year
During the past three fiscal (claims) years, none of the above programs has had settlements or judgments that exceed pooled or insured coverage. There have been no significant reductions in pooled or insured coverages from coverage in the prior year.
86 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 15: RISK MANAGEMENT (CONT
INUED)
The Excess Insurance Authority (EIA) has published its own annual comprehensive financial report for the year ended June 30, 2023, wh ich can be
obtained at the following link: https://www.prismrisk.gov/resources/prism- documents/financial-information/annual-comprehensive-financial-report-acfr/acfr-fy-ended-6-30-2023/ NOTE 16: JOINT VENTURES AND JO INTLY GOVERNED ORGANIZATIONS A. Joint
Venture
South Bay Regional Public Communica
tions Authority
The City is a member of the South Bay Regional P
ublic Communications Authority (SBRPCA), a joint powers authority of the cities of Manhattan Beach, Gardena and Hawthorne. SBRPCA was formed October 14, 1975, for the purpose of financing a public safety communications system for the member cities. The Governing Board is composed of an elected official of each member city. An executive committee is composed of the city managers of each member city. The City’s participation percentage at June 30, 2024, was 22.85%.
Summarized audited financial information for SBRPCA at June 30, 2023*, is presented below:
Statement of Net Position
Assets
Current assets 7,070,554 $
Noncurrent assets 7,227,097
Total Assets 14,297,651
Deferred Outflows of Resources 5,674,146
Liabilities
Current liabilities 445,465
Noncurrent liabilities 12,214,131
Total Liabilities 12,659,596
Deferred Inflows of Resources 2,123,049
Net Position 5,189,152 $
Statement of Activities
Operating Revenues 13,068,123$
Operating Expenses 11,191,979
Operating income before depreciation 1,876,144
Depreciation 738,322
Operating income/loss 1,137,822
Non-operating revenues (expenses):
Interest earnings 128,654
Non operating revenues (expenses) 128,654
Change in net position 1,266,476
Net Position - June 30, 2022 3,922,676
Net Position - June 30, 2023 5,189,152$
*Most current information available. SBRPCA ha
s issued its own separate financial statements, which are available at 4440 W. Broadway, Hawthorne, California 90250. 87 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 16: JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS (CONTINUED)
B. Jointly Governed Organization
Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force
The City of Manhattan Beach is a member of Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force (L.A. IMPACT), a joint powers authority of the police departments of cities and other institutions in Los Angeles County. The Organization was formed July 1, 1991, with the mission to promote coordinated law enforcement efforts and to address emerging criminal justice issues, mainly in the areas of drug trafficking enterprise and money laundering. The Executive Council consists of 14 police chiefs and other various police officers. All financial decisions were made by the Executive Council. The members received monetary distributions from the asset seizures based on their respective contribution to the effort.
Summarized audited financial information for L.A. IMPACT at June 30, 2023*, is presented below:
Statement of Net Position
Assets
Current assets 7,942,022$
Noncurrent assets 1,170,625
Total Assets 9,112,647
Liabilities
Current liabilities 528,238
Noncurrent liabilities 64,243
Total liabilities 592,481
Net Position 8,520,166$
Statement of Activities
Program Revenues 3,156,523$
Expenses 4,461,167
Excess of Revenues Over Expenses (1,304,644)
Non operating revenues (expenses)
Investment earnings 62,072
Non operating revenues (expenses) 62,072
Change in net position (1,242,572)
Net Position - June 30, 2022 9,762,738
Net Position - June 30, 2023 8,520,166$
*LA Impact has issued its own separate financial statements, which are available at 5700 S. Eastern Avenue, Commerce, California 90040.
88 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 17: COMMITMENTS AND CONTINGENCIES
Contingencies
There are certain claims and lawsuits pending against the City that seek monetary damages. Potential liabilities due to these claims are accounted for in the Insurance Reserve Fund.
Construction Commitments
The following material construction commitments existed as of June 30, 2024:
Project Title Contract Amount
Expenditure to
date as of
June 30, 2024
Remaining
Commitments
TMDL Trash Treatment Project 7,840,673$ 3,920,337$ 3,920,336$ Annual Water Infrastructure Improvement Programs 2,899,438 1,449,719 1,449,719 Annual Street Resurfacing 4,315,787 3,544,434 771,353 Pier Railings 1,306,329 674,921 631,408 Peck Ground Level Reservoir Replacement 1,417,297 904,940 512,357
NOTE 18 FUND BALANCE
At June 30, 2024, the governmental funds report the following fund balance classifications:
Total Total
Capital Nonmajor Governmental
General Improvement Funds Funds
Nonspendable
Notes and loans receiv able 49,088$ -$ -$ 49,088$ Leases receivable 541,859 - - 541,859 Inventories 2,099 - - 2,099 Prepaid costs 56,494 - - 56,494 Total nonspendable 649,540 - - 649,540 Restricted
Public safety - - 778,900 778,900 Recreation - - 1,174,175 1,174,175 Public works - - 302,405 302,405 Capital projects - - 11,052,540 11,052,540 Pension benefits 3,599,985 - - 3,599,985 Debt serv ice 1,083,533 - - 1,083,533 Total restricted 4,683,518 - 13,308,020 17,991,538 Committed
Capital Projects - 12,706,430 195,152 12,901,582 Total committed - 12,706,430 195,152 12,901,582 Assigned
Assigned for City retirement plans 57,289 - - 57,289 Total assigned 57,289 - - 57,289 Unassigned 34,991,414 - - 34,991,414 Total fund balances (deficits) 40,381,761$ 12,706,430$ 13,503,172$ 66,591,363$ 89 CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 19: NET INVESTMENTS IN CAPITAL ASSETS
The computation of Net Investments in Capital Assets is as follows:
Government
Activ ities
Business-Type
Activ ities
Total Capital Assets 152,823,086 $ 101,584,307 $
Long-term debt
Marine Avenue Park Refunding COP Series 2016 (3,730,000) - 2013 Police & Fire Facility Refunding COP (4,955,000) - 2021 Fire Station No. 2 COP (7,075,000) -
2021 Refunding COPs - (4,695,000) Lease liability (8,718,073) -
SBITA liability (443,963) (13,053)
Deferred charge on refunding 241,407 -
Bond premium/discount (1,563,813) (911,286)
126,578,644$ 95,964,968 $
NOTE 20: NET POSITION AND FUND BALANCES RESTATEMENT
During fiscal year 2024, error corrections and changes in accounting principle resulted in adjustments to and restatements of beginning net position and fund net position, as follows (amounts in thousands):
June 30, 2023
As Previously Error June 30, 2023
Reported Correction As Restated
Government-wide
Governmental activities 121,022,553$ 694,518 $ 121,717,071$ Business-type activities 124,291,125 2,193,720 126,484,845 Total government-wide 245,313,678$ 2,888,238 $ 248,201,916 $ Proprietary funds
Major funds
Water 72,934,832 $ 4,878 $ 72,939,710$
Wastewater 26,762,946 15,800 26,778,746 Parking 16,387,903 - 16,387,903 Nonmajor enterprise 8,205,444 2,173,042 10,378,486 Internal service funds 7,390,862 - 7,390,862 Total proprietary funds 131,681,987$ 2,193,720 $ 133,875,707 $
Beginning net position for business-type activities and for the Water Fund, Wastewater Fund, and Stormwater Fund has been restated by $4,878, $15,800, and $2,173,042, respectively, and beginning net position for governmental activities has been restated by $694,518 to capitalize prior year capital assets.
NOTE 21: SUBSEQUENT EVENTS
On the November 5, 2024, General Election, voters approved Measure MMB to increase the local sales tax rate by half a cent beginning April 2025. Additionally, the City added a new Fund titled the Grants Fund in FY 2025.
90 REQUIRED SUPPLEMENTARY
INFORMATION
91 92
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual General Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 68,466,896$ 68,466,896 $ 70,957,916 $ 2,491,020$ Licenses and permits 3,523,255 3,523,255 4,340,758 817,503 Intergovernmental 468,000 925,391 742,757 (182,634)
Charges for services 12,481,230 12,578,118 13,424,323 846,205 Use of money and property 4,727,200 4,727,200 7,146,781 2,419,581 Fines and forfeitures 2,524,000 2,629,653 1,953,584 (676,069) Miscellaneous 1,424,880 1,439,880 1,202,262 (237,618)
Total revenues 93,615,461 94,290,394 99,768,381 5,477,987
EXPENDITURES
Current:
General government 18,008,723 19,170,850 18,145,903 1,024,947 Public safety 48,210,712 48,502,266 48,738,762 (236,496) Culture and recreation 10,990,216 11,132,032 9,371,097 1,760,935 Public works 9,982,389 10,962,728 10,126,724 836,004
Capital outlay 180,000 232,980 9,406,018 (9,173,038)
Debt service:
Principal 3,585,462 3,585,462 5,318,532 (1,733,070)
Interest and fiscal charges 2,050,408 2,050,408 2,310,089 (259,681) Trustee fees and bond issuance cost 1,600 1,600 1,600 - Total expenditures 93,009,510 95, 638,326 103,418,725 (7,780,399) Excess (deficiency) of revenues
over (under) expenditures 605,951 ( 1,347,932) (3,650,344) (2,302,412)
OTHER FINANCING SOURCES (USES)
Transfers In - - 775,434 775,434
Transfers Out (13,134) (13,134) (4,832,895) (4,819,761) Lease and subscriptions financing - - 9,403,714 9,403,714 Total other financing sources (uses) (13,134) (13,134) 5,346,253 5,359,387 Net change in fund balances 592,817$ (1,361,066)$ 1,695,909 3,056,975$ Fund balances-beginning 38,685,852
Fund balances (deficit)-ending 40,381,761$
93 CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Changes in Net Pension Liability and Related Ratios Miscellaneous Plan
As of June 30, for the Last Ten Fiscal Years
2024 2023 2022 2021
Measurement Date 6/30/2023 6/30/2022 6/30/2021 6/30/2020
TOTAL PENSION LIABILITY
Service cost 3,134,299$ 2,943,841 $ 2,650,267 $ 2,737,868$ Interest on total pension liability 9,482,836 8,978,056 8,598,669 8,237,478 Changes of benefit terms 186,466 1,093,755 - -
Changes of assumptions - 4,573,133 - -
Difference between expected and actual experience 1,524,258 (1,315,243) (820,321) 261,490 Benefit payments, including refunds of employee
contributions (6,439,916) (6,384,471) (5,398,971) (4,720,240) Net change in total pension liability 7,887,943 9,889,071 5,029,644 6,516,596 Total pension liability-beginning 137,374,490 127,485,419 122,455,775 115,939,179 Total pension liability-ending (a) 145,262,433 137,374,490 127,485,419 122,455,775
PLAN FIDUCIARY NET POSITION
Contributions-employer 1,976,642 1,624,870 31,975,816 3,088,142 Contributions-employee 1,542,323 1,286,707 1,231,319 1,148,119 Net investment income 7,877,280 (10,719,243) 22,191,353 4,500,278 Benefit payments, including refunds of employee
contributions (6,439,916) (6,384,471) (5,398,971) (4,720,240) Net plan to plan resource movement --- -
Administrative expense (95,308) (89,635) (93,884) (127,012) Other miscellaneous income/(expense) --- -
Net change in fiduciary net position 4,861,021 (14,281,772) 49,905,633 3,889,287 Plan fiduciary net position-beginning 129,607,944 143,889,716 93,984,083 90,094,796 Plan fiduciary net position-ending (b) 134,468,965 129,607,944 143,889,716 93,984,083 Net pension liability/(asset) (a) - (b) 10,793,468$ 7,766,546$ (16,404,297)$ 28,471,692$ Plan fiduciary net position as a percentage of the
total pension liability 92.6% 94.3% 112.9% 76.7%
Covered payroll 18,689,916$ 17,388,313 $ 17,209,527 $ 17,472,037$ Plan net pension liability/(asset) as a percentage of
covered payroll 57.8% 44.7% -95.3% 163.0%
Notes to Schedule of Changes in the Net Pension Liability and Related Ratios:
Benefit Changes : The figures above gener ally include any liability impact that ma y 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 d eemed to be material by the plan actuary.
Changes of Assumptions : None in 2020-2022. In 2019, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Assumptions December 2017. There were no changes in the discount rate. In 2018, the discount rate was reduced from 7.65% to 7.15%. In 2017, there were no changes. In 2016, amounts reported reflect an adjustment of the discount rate from 7.50% (net of administrative expense) to 7.65% (without a reduction for pension plan administrative expense). In 2015, amounts reported were based on the 7.50% discount rate. 94 2020 2019 2018 2017 2016 2015
6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 2,657,779$ 2,639,954$ 2,582,619 $ 2,116,750 $ 1,906,947 $ 1,897,933$ 7,803,956 7,282,132 6,931,655 6,725,647 6,365,282 6,036,548 ----- -
- 11,137 5,953,464 - (450,327) -
1,833,076 (577,483) (2,203,443) (125,272) (1,610,461) - (4,679,793) (4,251,920) (3,897,657) (3,694,517) (3,387,918) (2,930,477) 7,615,018 5,103,820 9,366,638 5,022,608 2,823,523 5,004,004 108,324,161 103,220,341 93,853,703 88,831,095 86,007,572 81,003,568 115,939,179 108,324,161 103,220,341 93,853,703 88,831,095 86,007,572 2,699,124 2,257,840 2,139,788 1,856,633 1,619,438 1,512,406 1,183,069 1,194,936 1,142,808 1,110,014 986,936 911,689 5,590,075 6,733,944 8,057,534 357,760 1,618,145 10,722,182 (4,679,793) (4,251,920) (3,897,657) (3,694,517) (3,387,918) (2,930,477) - (198) - (388) - -
(60,918) (124,333) (106,973) (44,409) (82,036) -
199 (236,111) - - - -
4,731,756 5,574,158 7,335,500 (414,907) 754,565 10,215,800 85,363,040 79,788,882 72,453,382 72,868,289 72,113,724 61,897,924 90,094,796 85,363,040 79,788,882 72,453,382 72,868,289 72,113,724 25,844,383$ 22,961,121 $ 23,431,459 $ 21,400,321 $ 15,962,806 $ 13,893,848 $
77.7% 78.8% 77.3% 77.2% 82.0% 83.8%
16,866,425$ 16,557,666$ 16,051,083 $ 14,974,179 $ 13,348,365 $ 13,348,365$ 153.2% 138.7% 146.0% 142.9% 119.6% 104.1%
95 CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Changes in Net Pension Liability and Related Ratios Pension Plan - Supplemental Retirement Plan
As of June 30, for the Last Ten Fiscal Years
2024 2023 2022 2021
Measurement Date 6/30/2023 6/30/2022 6/30/2021 6/30/2020
TOTAL PENSION LIABILITY
Interest on total pension liability 1,617$ 1,743 $ 1,143 $ 1,787$ Changes of assumptions (353) (3,108) 7,476 62
Difference between expected and actual experience 11,535 11,270 (2,564) (34,482) Benefit payments, including refunds of employee
contributions (13,898) (13,359) (12,889) (14,382)
Net change in total pension liability (1,099) (3,454) (6,834) (47,015) Total pension liability-beginning 48,931 52,385 59,219 106,234 Total pension liability-ending (a) 47,832 48,931 52,385 59,219
PLAN FIDUCIARY NET POSITION
Contributions-employer 13,898 13,359 12,889 14,382
Net investment income --- -
Benefit payments, including refunds of employee
contributions (13,898) (13,359) (12,889) (14,382)
Net change in fiduciary net position --- -
Plan fiduciary net position-beginning --- -
Restatement --- -
Plan fiduciary net position-ending (b) --- -
Net pension liability/(asset) (a) - (b) 47,832$ 48,931$ 52,385$ 59,219$ Plan fiduciary net position as a percentage of the
total pension liability 0.0% 0.0% 0.0% 0.0%
Covered payroll N/A N/A N/A N/A
Plan net pension liability/(asset) as a percentage of
covered payroll N/A N/A N/A N/A
Notes to Schedule of Changes in the Net Pension Liability and Related Ratios:
In fiscal year 2023-24, the discount rate was changed from 3.65% to 3.93%.
The fiduciary net position has been restated since the assets held were not in a trust fund as defined by GASB Statement No. 68, but were pulled with the City's cash and investments. 96 2020 2019 2018 2017 2016 2015
6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 4,057$ 4,045$ 4,837 $ (552) $ 4,465 $ 3,868$ 5,916 2,027 - - - -
6,826 18,576 8,685 35,649 9,609 16,651
(22,327) (22,125) (21,690) (21,340) (21,728) (20,519)
(5,528) 2,523 (8,168) 13,757 (7,654) -
111,762 109,239 117,407 103,650 111,304 111,304
106,234 111,762 109,239 117,407 103,650 111,304
22,327 27,773 - - - -
- 1,024 496 (552) 4,465 3,868
(22,327) (22,125) (21,690) (21,340) (21,728) (20,519)
- 6,672 (21,194) (21,892) (17,263) (16,651)
32,344 25,672 46,866 68,758 86,021 102,672
(32,344) - - - - -
- 32,344 25,672 46,866 68,758 86,021
106,234$ 79,418 $ 83,567 $ 70,541 $ 34,892 $ 25,283 $
0.0% 28.9% 23.5% 39.9% 66.3% 77.3%
N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A
97 98
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Investment Returns
Pension Plan - Supplemental Retirement Plan
As of June 30, for the Last Ten Fiscal Years
Fiscal Year Net Money-Weighted
Ending June 30, Rate of Return
2024 3.93%
2023 3.65%
2022 3.54%
2021 2.16%
2020 2.20%
2019 3.50%
2018 4.12%
2017 3.49%
2016 3.60%
2015 4.40%
99 CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Changes in Net Pension Liability and Related Ratios Pension Plan - Single Highest Year Plan
As of June 30, for the Last Ten Fiscal Years
2024 2023 2022 2021
Measurement Date 6/30/2023 6/30/2022 6/30/2021 6/30/2020
TOTAL PENSION LIABILITY
Interest on total pension liability 3,311$ 3,680 $ 2,421 $ 5,975$ Changes of assumptions (722) (6,560) (5,433) 207
Difference between expected and actual experience 13,596 9,222 15,842 (138,309) Benefit payments, including refunds of employee
contributions (21,490) (21,068) (20,304) (25,050)
Net change in total pension liability (5,305) (14,726) (7,474) (157,177) Total pension liability-beginning 103,289 118,015 125,489 282,666 Total pension liability-ending (a) 97,984 103,289 118,015 125,489
PLAN FIDUCIARY NET POSITION
Contributions-employer 21,490 23,360 20,304 25,050
Benefit payments, including refunds of employee
contributions (21,490) (23,360) (20,304) (25,050)
Net change in fiduciary net position --- -
Plan fiduciary net position-beginning --- -
Restatement --- -
Plan fiduciary net position-ending (b) --- -
Net pension liability/(asset) (a) - (b) 97,984$ 103,289$ 118,015$ 125,489$ Plan fiduciary net position as a percentage of the
total pension liability 0.0% 0.0% 0.0% 0.0%
Covered payroll N/A N/A N/A N/A
Plan net pension liability/(asset) as a percentage of
covered payroll N/A N/A N/A N/A
Notes to Schedule of Changes in the Net Pension Liability and Related Ratios:
In fiscal year 2022-23, the discount rate was changed from 3.54% to 3.65%.
The fiduciary net position has been restated since the assets held were not in a trust fund as defined by GASB Statement No. 68, but were pulled with the City's cash and investments. 100
2020 2019 2018 2017 2016 2015
6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014 8,785$ 10,663$ 13,871 $ (1,639) $ 13,610 $ 9,588$ 15,460 6,053 - - - -
17,838 41,951 (12,652) 94,614 19,167 41,284
(51,473) (50,694) (53,805) (52,928) (51,598) (50,872)
(9,390) 7,973 (52,586) 40,047 (18,821) -
292,056 284,083 336,669 296,622 315,443 315,443
282,666 292,056 284,083 336,669 296,622 315,443
51,473 72,227 - - - -
(51,473) (46,005) (52,189) (54,567) (37,988) (41,284)
- 26,222 (52,189) (54,567) (37,988) (41,284)
118,394 92,172 144,361 198,928 236,916 278,200
(118,394) - - - - -
- 118,394 92,172 144,361 198,928 236,916
282,666$ 173,662 $ 191,911 $ 192,308 $ 97,694 $ 78,527 $
0.0% 40.5% 32.4% 42.9% 67.1% 75.1%
N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A
101
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Investment Returns
Pension Plan - Single Highest Year Plan
As of June 30, for the Last Ten Fiscal Years
Fiscal Year Net Money-Weighted
Ending June 30, Rate of Return
2024 3.93%
2023 3.65%
2022 3.54%
2021 2.16%
2020 2.20%
2019 3.50%
2018 4.12%
2017 3.49%
2016 3.60%
2015 4.40%
102
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedules of Proportationate Share of Net Pension Liability As of June 30, for the Last Ten Fiscal Years
Proportionate Share Plan's Fiduciary
Proportion of the Proportionate of the Net Pension Net Position as a Reporting Date 1 Net Pension Share of Net Liability as a % of % of the Total as of June 30, Liability Pensi on Liability Covered Payroll Cove red Payroll Pension Liability 2024 0.1070% 13,348,393$ 14,771,765$ 90.4% 94.7% 2023 0.0680% 7,851,465 13,651,265 57.5% 96.7%
2022 -1.0111% (35,484,453) 13,731,032 -258.4% 115.6%
2021 0.9278% 61,811,652 13,904,770 444.5% 71.9%
2020 0.8885% 55,463,474 13,238,294 419.0% 73.9%
2019 0.8844% 51,890,006 13,377,912 387.9% 75.3%
2018 0.7380% 51,004,452 13,476,008 378.5% 73.3%
2017 0.8545% 44,229,612 13,396,233 330.2% 74.1%
2016 0.8167% 33,649,892 12,509,404 269.0% 78.3%
2015 0.4829% 30,049,799 11,899,053 252.5% 78.3%
Notes to Schedule of Proportionate Share of the Net Pension Liability:
1 The proportions and proportionate share of the net pension liability are measured as of one year behind the reporting date. Refer to notes to basic financial statements.
Safety Plan
Benefit Changes : None
Changes of Assumptions : None
103
104
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedules of Plan Contributions
As of June 30, for the Last Ten Fiscal Years
Covered/ Contribution as a
Fiscal Year Actuarially Actual Contribution Covered- % of Covered/ Ending Determined Employer Deficiency Employee Covered Employee June 30, Contribution Contributions (Excess) Payroll Payroll 2024 2,214,398 $ 2,214,398 $ - $ 18,375,691$ 12.1% 2023 1,918,178 1,918,178 18,689,916 10.3%
2022 1,624,870 1,624,870 - 17,388,313 9.3%
2021 3,428,883 31,975,816 (28,546,933) 17,209,527 185.8% 2020 3,088,142 3,088,142 - 17,472,037 17.7%
2019 2,699,124 2,699,124 - 16,866,425 16.0%
2018 2,257,840 2,257,840 - 16,557,666 13.6%
2017 2,139,788 2,139,788 - 16,051,083 13.3%
2016 1,856,633 1,856,633 - 14,974,179 12.4%
2015 1,619,438 1,619,438 - 13,348,365 12.1%
2024 - $ 13,898$ (13,898) $ N/A N/A 2023 - 13,359 (13,359) N/A N/A
2022 - 12,889 (12,889) N/A N/A
2021 - - - N/A N/A
2020 - - - N/A N/A
2019 - - - N/A N/A
2018 - - - N/A N/A
2017 - - - N/A N/A
2016 - - - N/A N/A
2015 -- - N / A N / A
2024 - $ 21,490$ (21,490) $ N/A N/A 2023 - 23,360 (23,360) N/A N/A
2022 20,304 (20,304) N/A N/A
2021 - - - N/A N/A
2020 - - - N/A N/A
2019 - - - N/A N/A
2018 - - - N/A N/A
2017 - - - N/A N/A
2016 - - - N/A N/A
2015 - - - N/A N/A
2024 3,410,036 $ 3,410,036 $ - $ 14,520,026$ 23.5% 2023 3,085,036 3,085,036 - 14,771,765 20.9%
2022 2,798,477 2,798,477 - 13,651,265 20.5%
2021 6,572,770 68,788,953 (62,216,183) 13,731,032 501.0% 2020 5,997,853 5,997,853 - 13,904,770 43.1%
2019 5,071,642 5,071,642 - 13,238,294 38.3%
2018 4,413,119 4,413,119 - 13,377,912 33.0%
2017 4,035,127 4,035,127 - 13,476,008 29.9%
2016 4,000,319 4,000,319 - 13,396,233 29.9%
2015 3,437,160 3,437,160 - 12,509,404 27.5%
2024 - $ - $ - $ 35,117,049$ 0.0% 2023 - - - 33,042,483 0.0%
2022 - - - 31,281,530 0.0%
2021 - - - 31,108,248 0.0%
2020 - - - 30,039,928 0.0%
2019 - - - 28,955,206 0.0%
2018 - - - 28,350,135 0.0%
Miscellaneous Agent, Multiple-Employer Pension Plan
Supplemental Retirement Pension Plan
Single Employer OPEB Plan
Single Highest Year Pension Plan
Safety Cost-Sharing, Multiple-Employer Pension Plan
105
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Changes in Net OPEB Liability and Related Ratios As of June 30, for the Last Ten Fiscal Years 1
2024 2023 2022 2021
Measurement Date 6/30/2023 6/30/2022 6/30/2021 6/30/2020
TOTAL OPEB LIABILITY
Service cost 696,531$ 680,762 $ 912,539 $ 860,600$ Interest on total pension liability 745,715 721,654 741,118 726,498 Changes of benefit terms - (5,588) 8,110 -
Changes of assumptions (226,367) (40,688) (47,483) 301,994 Difference between expected and actual experience (4,382,036) - (2,139,728) (67,563) Benefit payments, including refunds of employee
contributions (827,434) (826,360) (827,450) (768,497)
Net change in total OPEB liability (3,993,591) 529,780 (1,352,894) 1,053,032 Total OPEB liability-beginning 18,380,096 17,850,316 19,203,210 18,150,178 Total OPEB liability-ending (a) 14,386,505 18,380,096 17,850,316 19,203,210
PLAN FIDUCIARY NET POSITION
Contributions-employer 101,072 826,360 500,355 458,552
Contributions-employee --- -
Net investment income 398,243 (1,602,871) 2,170,346 579,074 Benefit payments, including refunds of employee
contributions (827,434) (826,360) (827,450) (768,497)
Net plan to plan resource movement --- -
Administrative expense (3,204) (3,246) (4,002) (5,285)
Other miscellaneous income/(expense) --- -
Net change in fiduciary net position (331,323) (1,606,117) 1,839,249 263,844 Plan fiduciary net position-beginning 11,185,245 12,791,362 10,952,113 10,688,269 Plan fiduciary net position-ending (b) 10,853,922 11,185,245 12,791,362 10,952,113 Net OPEB liability/(asset) (a) - (b) 3,532,583$ 7,194,851$ 5,058,954$ 8,251,097$ Plan fiduciary net position as a percentage of the
total OPEB liability 75.4% 60.9% 71.7% 57.0%
Covered-employee payroll 33,042,483$ 31,281,530 $ 31,108,248 $ 30,039,928$ Plan net OPEB liability/(asset) as a percentage of
covered-employee payroll 10.7% 23.0% 16.3% 27.5%
Notes to Schedule of Changes in the Net OPEB Liability and Related Ratios:
1 Fiscal year 2018 was the first year of GASB Statement No. 75 implementation; therefore only seven years are shown.
Benefit Changes: None
Changes of Assumptions: None
106
2020 2019 2018
6/30/2019 6/30/2018 6/30/2017
162,042$ 157,705$ 153,484$
405,961 389,029 373,003
14,816 - -
11,785,934 - -
(217,943) - -
(315,517) (276,109) (292,220)
11,835,293 270,625 234,267
6,314,885 6,044,260 5,809,993
18,150,178 6,314,885 6,044,260
-- -
-- -
723,910 620,328 696,310
(315,517) (276,109) (292,220)
-- -
(2,217) (18,413) (5,052)
-- -
406,176 325,806 399,038
10,282,093 9,956,287 9,557,249
10,688,269 10,282,093 9,956,287
7,461,909$ (3,967,208) $ (3,912,027) $
58.9% 162.8% 164.7%
28,955,206$ 28,350,135$ 27,942,810$
25.8% -14.0% -14.0%
107
CITY OF MANHATTAN BEACH, CALIFORNIA
Notes to the Required Supplementary Information
For the Year Ended June 30, 2024
NOTE 1: BUDGETARY COMPARISON INFORMATION
A. General Budget Policies
The operating budget serves as the annual financial plan for the City and serves as the policy document of the City Council for implementing Council goals and objectives. The budget provides the staff the resources necessary to accomplish City Council determined service levels.
The City Manager annually will prepare and present a proposed operating budget to the City Council no later than the second regular Council meeting in May of each year; and Council will adopt said budget no later than June 30 of each year. Funds may not be expended or encumbered for the following fiscal year until the budget has been adopted by the City Council.
The City’s annual budget will be presented by department, with a logical breakdown of programs and proposed expenses. The budget document will also summarize expenditures at the personnel, operating and maintenance, and capital levels.
Where practical, the City's annual budget will include measures of workload, efficiency, and effectiveness.
B. Budgetary Control and Accountability
Budget control is maintained at the departmental level. The City Manager has the authority to approve appropriation transfers between programs or departments. In no case may total expenditures of a particular fund exceed that which is appropriated by the City Council without a budget amendment. Amendments to the budget are approved by the City Council with the exception of the appropriation and transfer of funds from employee leave reserves to a specific department’s program budget to cover unplanned customary termination leave expenditures within a given year. Such amendments may be approved by the City Manager.
Budget accountability rests primarily with the operating departments of the City.
C. Basis of Budgeting
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America and are used as a management control device.
D: Excess of Expenditures over Appropriations
Excess expenditures over appropriations were as follows:
Expenditures Appropriations Excess
General Fund
Public safety 48,738,762 $ 48,502,266 $ 236,496 $ Capital outlay 9,406,018 232,980 9,173,038 Principal 5,318,532 3,585,462 1,733,070
Interest and fiscal charges 2,310,089 2,050,408 259,681 108
COMBINING AND INDIVIDUAL
FUND FINANCIAL STATEMENTS
& SCHEDULES
109
NONMAJOR FUNDS
Special Revenue Fund Description
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are restricted by law to expenditures for specified purposes.
Street Lighting and Landscape Fund provides the power, maintenance and capital improvements for the lighting system within the City of Manhattan Beach. Money is received from a special assessment placed on each tax bill in the City, the amount of which is determined by the benefit received by the owner of each property.
Gas Tax Fund is used to account for the City’s share of the state and county gasoline tax collection in accordance with the provisions of the Sate of California Streets and Highway Code. Revenues are disbursed by the state based on population and must be used toward the maintenance and repair of City streets that serve as state and county thoroughfares.
Asset Forfeiture Fund is used to account for funds received through federal and state agencies for drug seizures in which the City participated. These funds must be used to supplement, not supplant, the Police Department’s normal operating budget. The amount of revenue will vary from year to year based on activity levels.
Public Safety Grants Fund is used for monies received from the federal and state governments for the purposes of supplementing front-line law enforcement services.
Proposition A Fund is used to account for proceeds from the half-cent sales taxes generated by the approval of Proposition A by Los Angeles County voters. These funds, which are administered by the Los Angeles County Metropolitan Transportation Authority (MTA), are distributed based on population and must be used for transportation-related projects.
Proposition C Fund is used to account for the City’s Proposition C revenue and expenditures. In November 1990, Los Angeles County voters approved a half -cent sales tax intended to support projects and programs related to transit.
AB 2766 Fund is used to account for proceeds received from the additional vehicle registration fee imposed by the state and regulated by the Air Quality Management District (AQMD). These funds are distributed based on population and must be used for programs designed to reduce air pollution from motor vehicles.
Measure R Fund is a half cent sales tax approved by Los Angeles voters to be used for new and existing transportation projects, including local bus operations and local city sponsored transportation improvements.
Local cities are allocated 15% of collections on a per capita basis. The City of Manhattan Beach began receiving Measure R funds in fiscal 2010-2011, and established a separate fund to capture revenues and expenditures.
Eligible expenditures are streets and signals, bikeways, pedestrian improvements, and transit service improvements.
Measure M Fund is a half-cent sales tax approved by Los Angeles County voters to ease traffic congestion; expand rail and rapid transit system; repave local streets, repair potholes, and synchronize signals; make public transportation more accessible for seniors, students, and the disabled; and earthquake-retrofit bridges. The City of Manhattan Beach began receiving Measure M funds in fiscal 2018 and established a separate fund to capture revenue and expenditures.
Measure W Fund is a voter approver parcel tax intended to fund projects, infrastructure, and program to capture, treat, and recycle storm water. The City began receiving Measure W funds in the fiscal year 2021-2022 and established a separate fund to capture revenues and expenditures.
Capital Project Fund Description
Capital Projects Funds are used to account for financial resources segregated for the acquisition or construction of major capital facilities, other than those financed by Enterprise or Internal Service Funds. 110
NONMAJOR FUNDS (CONTINUED)
Bond Construction Fund accounts for financial resources segregated for the acquisition or construction of major capital projects financed through the issuance of bonds.
Underground Assessment District Fund accounts for the financial resources used for underground utility assessment district (UUAD) projects. UUASs are initiated and formed by property owners who are interested in paying for the undergrounding of the overhead utility in their neighborhood.
111
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
ASSETS
Cash and investments 87,086$ 4,333,544 $ 274,745 $ 504,155$ Receivables (net of allowance for uncollectible):
Accounts 5,980 - - -
Due from other governments - 251,522 - -
Grants - 111,912 - -
Total assets 93,066 4,696,978 274,745 504,155
LIABILITIES
Accounts payable 71,223 288,761 - -
Accrued liabilities - 19,284 - -
Deposits payable -- - -
Unearned revenues -- - -
Total liabilities 71,223 308,045 - -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 111,912 - -
Total deferred inflows of resources - 111,912 - -
FUND BALANCES (DEFICITS)
Restricted 21,843 4,277,021 274,745 504,155
Committed -- - -
Total fund balances (deficits) 21,843 4,277,021 274,745 504,155 Total liabilities, deferred inflows of resources,
and fund balances (deficits) 93,066$ 4,696,978$ 274,745$ 504,155$ Street
Lighting and
Landscape Gas Tax
Asset
Forfeiture
Public Safety
Grants
Special Revenue Funds
112
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
ASSETS
Cash and investments
Receivables (net of allowance for uncollectible):
Accounts
Due from other governments
Grants
Total assets
LIABILITIES
Accounts payable
Accrued liabilities
Deposits payable
Unearned revenues
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Total deferred inflows of resources
FUND BALANCES (DEFICITS)
Restricted
Committed
Total fund balances (deficits)
Total liabilities, deferred inflows of resources,
and fund balances (deficits)
(Continued)
1,182,950$ 1,397,464 $ 280,563 $ 1,835,083$ 351 - - -
- 60,297 - 45,356
- 1,725,477 - 87,975
1,183,301 3,183,238 280,563 1,968,414
9,126 336,302 - 49,451
-1 ,212 - -
--- -
--- -
9,126 337,514 - 49,451
- 1,725,477 - 82,086
- 1,725,477 - 82,086
1,174,175 1,120,247 280,563 1,836,877
--- -
1,174,175 1,120,247 280,563 1,836,877
1,183,301$ 3,183,238 $ 280,563 $ 1,968,414 $ Proposition A Proposition C AB 2766 Measure R
Special Revenue Funds
113
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
ASSETS
Cash and investments
Receivables (net of allowance for uncollectible):
Accounts
Due from other governments
Grants
Total assets
LIABILITIES
Accounts payable
Accrued liabilities
Deposits payable
Unearned revenues
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Total deferred inflows of resources
FUND BALANCES (DEFICITS)
Restricted
Committed
Total fund balances (deficits)
Total liabilities, deferred inflows of resources,
and fund balances (deficits)
982,367$ 1,906,604 $ 625,537 $ 1,446,434$ --- -
51,422 - - -
76,656 15,506 - -
1,110,445 1,922,110 625,537 1,446,434
1,530 67,045 40,915 -
5,000 - 389,470 -
--- 1,741
- 513,993 - -
6,530 581,038 430,385 1,741
55,780 15,506 - -
55,780 15,506 - -
1,048,135 1,325,566 - 1,444,693
- - 195,152 -
1,048,135 1,325,566 195,152 1,444,693
1,110,445$ 1,922,110 $ 625,537 $ 1,446,434 $ Measure M Measure W
Bond
Construction
Underground
Assessment
District
Special Revenue Funds Capital Projects Funds
114
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
ASSETS
Cash and investments
Receivables (net of allowance for uncollectible):
Accounts
Due from other governments
Grants
Total assets
LIABILITIES
Accounts payable
Accrued liabilities
Deposits payable
Unearned revenues
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Total deferred inflows of resources
FUND BALANCES (DEFICITS)
Restricted
Committed
Total fund balances (deficits)
Total liabilities, deferred inflows of resources,
and fund balances (deficits)
Total
Nonmajor
Funds
14,856,532$
6,331
408,597
2,017,526
17,288,986
864,353
414,966
1,741
513,993
1,795,053
1,990,761
1,990,761
13,308,020
195,152
13,503,172
17,288,986$
115
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
REVENUES
Taxes 374,292$ - $ - $ -$ Intergovernmental - 2,008,820 169,395 186,159
Charges for services -- - -
Use of money and property 1,478 170,119 7,827 24,602
Miscellaneous 7,525 - - -
Total revenues 383,295 2,178,939 177,222 210,761
EXPENDITURES
Current:
Public safety - - 54,601 103,312
Culture and recreation - - - -
Public works 681,332 69,817 - -
Capital outlay - 1,150,360 - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 681,332 1,220,177 54,601 103,312
Excess (deficiency) of revenues
over (under) expenditures (298,037) 958,762 122,621 107,449
OTHER FINANCING SOURCES (USES)
Transfers in 252,991 - - -
Transfers out (6,071) - - -
Total other financing sources (uses) 246,920 - - -
Net change in fund balances (51,117) 958,762 122,621 107,449 Fund balances-beginning 72,960 3,318,259 152,124 396,706 Fund balances (deficit)-ending 21,843$ 4,277,021$ 274,745$ 504,155$ Special Revenue Funds
Street
Lighting and
Landscape Gas Tax
Asset
Forfeiture
Public Safety
Grants
116
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
REVENUES
Taxes
Intergovernmental
Charges for services
Use of money and property
Miscellaneous
Total revenues
EXPENDITURES
Current:
Public safety
Culture and recreation
Public works
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances-beginning
Fund balances (deficit)-ending
(Continued)
925,475$ 767,660 $ - $ 575,565$ - 573,192 34,582 862,255
2,803 - - -
43,950 120,999 10,862 117,005
--- 1,579
972,228 1,461,851 45,444 1,556,404
--- -
674,379 - - -
- 32,541 672 73,142
- 2,904,664 2,245 1,012,012
18,784 - - -
11,131 - - -
704,294 2,937,205 2,917 1,085,154
267,934 (1,475,354) 42,527 471,250
--- -
--- -
----
267,934 (1,475,354) 42,527 471,250
906,241 2,595,601 238,036 1,365,627
1,174,175$ 1,120,247 $ 280,563 $ 1,836,877 $ Measure R
Special Revenue Funds
Proposition A Proposition C AB 2766
117
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
REVENUES
Taxes
Intergovernmental
Charges for services
Use of money and property
Miscellaneous
Total revenues
EXPENDITURES
Current:
Public safety
Culture and recreation
Public works
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances-beginning
Fund balances (deficit)-ending
649,936$ 409,929 $ - $ -$ 336,513 344,928 - -
-- - -
93,593 106,193 230,836 121,150
-- - -
1,080,042 861,050 230,836 121,150
-- - -
-- - -
78,495 49,904 - 699,196
1,791,622 380,173 1,906,694 -
-- - -
-- - -
1,870,117 430,077 1,906,694 699,196
(790,075) 430,973 (1,675,858) (578,046)
-- - -
-- - -
- ---
(790,075) 430,973 (1,675,858) (578,046)
1,838,210 894,593 1,871,010 2,022,739
1,048,135$ 1,325,566 $ 195,152 $ 1,444,693 $ Bond
Construction
Underground
Assessment
District Measure M Measure W
Special Revenue Funds Capital Projects Funds
118
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2024
REVENUES
Taxes
Intergovernmental
Charges for services
Use of money and property
Miscellaneous
Total revenues
EXPENDITURES
Current:
Public safety
Culture and recreation
Public works
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances-beginning
Fund balances (deficit)-ending
Total
Nonmajor
Funds
3,702,857$
4,515,844
2,803
1,048,614
9,104
9,279,222
157,913
674,379
1,685,099
9,147,770
18,784
11,131
11,695,076
(2,415,854)
252,991
(6,071)
246,920
(2,168,934)
15,672,106
13,503,172$
119
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Street Lighting and Landscape Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 377,080$ 377,080 $ 374,292 $ (2,788)$ Use of money and property -- 1 ,478 1,478
Miscellaneous -- 7 ,525 7,525
Total revenues 377,080 377,080 383,295 6,215
EXPENDITURES
Current:
Public works 695,449 780,070 681,332 98,738
Capital outlay -9 ,684 - 9,684
Total expenditures 695,449 789,754 681,332 108,422
Excess (deficiency) of revenues
over (under) expenditures (318,369) (412,674) (298,037) 114,637
OTHER FINANCING SOURCES (USES)
Transfers In 13,517 13,517 252,991 239,474
Transfers Out - - (6,071) (6,071)
Total other financing sources (uses) 13,517 13,517 246,920 233,403 Net change in fund balances (304,852)$ (399,157)$ (51,117) 348,040$ Fund balances (deficit)-beginning 72,960
Fund balances (deficit)-ending 21,843$
120
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Gas Tax Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 1,924,355$ 2,161,709 $ 2,008,820 $ (152,889)$ Use of money and property 22,000 22,000 170,119 148,119 Total revenues 1,946,355 2, 183,709 2,178,939 (4,770)
EXPENDITURES
Current:
Public works 60,138 60,138 69,817 (9,679)
Capital outlay 2,495,000 4,746,091 1,150,360 3,595,731
Total expenditures 2,555,138 4,806,229 1,220,177 3,586,052 Net change in fund balances (608,783)$ (2,622,519)$ 958,762 3,581,281$ Fund balances (deficit)-beginning 3,318,259
Fund balances (deficit)-ending 4,277,021$
121
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Asset Forfeiture Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 40,000$ 40,000 $ 169,395 $ 129,395$ Use of money and property 1,800 1,800 7,827 6,027
Total revenues 41,800 41,800 177,222 135,422
EXPENDITURES
Current:
Public safety 90,500 90,500 54,601 35,899
Total expenditures 90,500 90,500 54,601 35,899
Net change in fund balances (48,700)$ (48,700)$ 122,621 171,321$ Fund balances (deficit)-beginning 152,124
Fund balances (deficit)-ending 274,745$
122
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Public Safety Grants Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 160,000$ 160,000 $ 186,159 $ 26,159$ Use of money and property 4,000 4,000 24,602 20,602
Total revenues 164,000 164,000 210,761 46,761
EXPENDITURES
Current:
Public safety 239,000 269,421 103,312 166,109
Total expenditures 239,000 269,421 103,312 166,109
Net change in fund balances (75,000)$ (105,421)$ 107,449 212,870$ Fund balances (deficit)-beginning 396,706
Fund balances (deficit)-ending 504,155$
123
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Proposition A Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 1,008,705$ 1,008,705 $ 925,475 $ (83,230)$ Intergovernmental - 366,958 - (366,958)
Charges for services 7,200 7,200 2,803 (4,397)
Use of money and property 3,000 3,000 43,950 40,950
Miscellaneous 17,500 17,500 - (17,500)
Total revenues 1,036,405 1,403,363 972,228 (431,135)
EXPENDITURES
Current:
Culture and recreation 751,428 751,428 674,379 77,049
Capital outlay - 407,731 - 407,731
Debt service:
Principal 7,518 7,518 18,784 (11,266)
Interest and fiscal charges 4,455 4,455 11,131 (6,676)
Total expenditures 763,401 1,171,132 704,294 466,838
Net change in fund balances 273,004$ 232,231$ 267,934 35,703$ Fund balances (deficit)-beginning 906,241
Fund balances (deficit)-ending 1,174,175$
124
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Proposition C Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 836,596$ 836,596 $ 767,660 $ (68,936)$ Intergovernmental - 7,600,688 573,192 (7,027,496)
Use of money and property 3,000 3,000 120,999 117,999
Total revenues 839,596 8,440,284 1,461,851 (6,978,433)
EXPENDITURES
Current:
Public works 60,138 60,138 32,541 27,597
Capital outlay 750,000 9,614,568 2,904,664 6,709,904
Total expenditures 810,138 9,674,706 2,937,205 6,737,501 Net change in fund balances 29,458$ (1,234,422)$ (1,475,354) (240,932)$ Fund balances (deficit)-beginning 2,595,601
Fund balances (deficit)-ending 1,120,247$
125
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual AB 2766 Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental 46,000$ 46,000 $ 34,582 $ (11,418)$ Use of money and property 1,500 1,500 10,862 9,362
Total revenues 47,500 47,500 45,444 (2,056)
EXPENDITURES
Current:
Public works 673 673 672 1
Capital outlay 275,000 275,000 2,245 272,755
Total expenditures 275,673 275,673 2,917 272,756
Net change in fund balances (228,173)$ (228,173)$ 42,527 270,700$ Fund balances (deficit)-beginning 238,036
Fund balances (deficit)-ending 280,563$
126
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Measure R Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 627,521$ 627,521 $ 575,565 $ (51,956)$ Intergovernmental 1,840,000 2,388,534 862,255 (1,526,279) Use of money and property 15,000 15,000 117,005 102,005 Miscellaneous -- 1 ,579 1,579
Total revenues 2,482,521 3,0 31,055 1,556,404 (1,474,651)
EXPENDITURES
Current:
Public works 60,138 60,138 73,142 (13,004)
Capital outlay 1,000,000 2,713,241 1,012,012 1,701,229
Total expenditures 1,060,138 2,773,379 1,085,154 1,688,225 Net change in fund balances 1,422,383$ 257,677$ 471,250 213,573$ Fund balances (deficit)-beginning 1,365,627
Fund balances (deficit)-ending 1,836,877$
127
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Measure M Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 711,190$ 711,190 $ 649,936 $ (61,254)$ Intergovernmental 3,280,000 14,156,908 336,513 (13,820,395) Use of money and property 8,000 8,000 93,593 85,593
Total revenues 3,999,190 14,87 6,098 1,080,042 (13,796,056)
EXPENDITURES
Current:
Public works 60,138 60,138 78,495 (18,357)
Capital outlay 3,880,000 16,161,116 1,791,622 14,369,494 Total expenditures 3,940,138 16,221,254 1,870,117 14,351,137 Net change in fund balances 59,052$ (1,345,156)$ (790,075) 555,081$ Fund balances (deficit)-beginning 1,838,210
Fund balances (deficit)-ending 1,048,135$
128
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Measure W Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 410,000$ 410,000 $ 409,929 $ (71)$ Intergovernmental 25,118,764 27,722,279 344,928 (27,377,351) Use of money and property 1,500 1,500 106,193 104,693
Total revenues 25,530,264 28,133,779 861,050 (27,272,729)
EXPENDITURES
Current:
Public works - - 49,904 (49,904)
Capital outlay 26,348,763 28,383,201 380,173 28,003,028 Total expenditures 26,348,763 28,383,201 430,077 27,953,124 Net change in fund balances (818,499)$ (249,422)$ 430,973 680,395$ Fund balances-beginning 894,593
Restatements -
Fund balances (deficit)-beginning 894,593
Fund balances (deficit)-ending 1,325,566$
129
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Capital Improvement Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes 855,000$ 855,000 $ 1,062,511 $ 207,511$ Licenses and permits 25,438 25,438 41,791 16,353
Intergovernmental 100,000 1,395,200 1,707,064 311,864
Charges for services 600,000 600,000 596,949 (3,051)
Use of money and property -- 2 ,443 2,443
Fines and forfeitures 92,000 92,000 78,284 (13,716)
Contributions 400,000 400,000 156,558 (243,442)
Total revenues 2,072,438 3,367,638 3,645,600 277,962
EXPENDITURES
Current:
Public works 184,456 184,456 184,456 -
Capital outlay 6,544,048 14,617,735 3,796,195 10,821,540 Debt service:
Principal 710,000 710,000 710,000 -
Interest and fiscal charges 456,337 456,337 456,277 60
Trustee fees and bond issuance cost 1,800 1,800 1,850 (50) Total expenditures 7,896,641 15,970,328 5,148,778 10,821,550 Excess (deficiency) of revenues
over (under) expenditures (5,824,203) (12,602,690) (1,503,178) 11,099,512
OTHER FINANCING SOURCES (USES)
Transfers in - - 1,994,920 1,994,920
Total other financing sources (uses) - - 1,994,920 1,994,920 Net change in fund balances (5,824,203)$ (12,602,690)$ 491,742 13,094,432$ Fund balances (deficit)-beginning 12,214,688
Fund balances (deficit)-ending 12,706,430$
130
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Bond Construction Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ - $ 230,836$ 230,836$ Total revenues - - 230,836 230,836
EXPENDITURES
Current:
Capital outlay - 1,906,694 1,906,694 -
Total expenditures - 1,906,694 1,906,694 -
Net change in fund balances -$ (1,906,694)$ (1,675,858) 230,836$ Fund balances (deficit)-beginning 1,871,010
Fund balances (deficit)-ending 195,152$
131
CITY OF MANHATTAN BEACH, CALIFORNIA
Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget to Actual Underground Assessment District Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES
Use of money and property -$ - $ 121,150$ 121,150$ Total revenues - - 121,150 121,150
EXPENDITURES
Current:
Public works 360,000 1,861,364 699,196 1,162,168
Total expenditures 360,000 1,861,364 699,196 1,162,168
Net change in fund balances (360,000)$ (1,861,364)$ (578,046) 1,283,318$ Fund balances (deficit)-beginning 2,022,739
Fund balances (deficit)-ending 1,444,693$
132
NONMAJOR ENTERPRISE FUNDS
The Enterprise Funds are used to account for City operations that are financed and operated in a manner similar to private business enterprises. The intent in using this type of fund is to see that the costs of providing these services to the general public on a continuing basis are financed or recovered primarily through user charges.
Storm Drain Fund is used to account for the maintenance and improvement of the City’s storm drains. Revenues are derived from a storm drain assessment to property owners, which are based on size and use of the parcel, and collected through the property tax rolls.
County Parking Lot Fund is used to account for the operation and maintenance of parking lots that are owned by Los Angeles County but leased to the City. Proceeds from the meters and parking permits are divided 55% to the county, with an annual guaranteed minimum of $130,000 and 45% to the City.
State Pier and Parking Lot Fund is used to account for the operation and maintenance of the Manhattan Beach Pier, comfort station and four adjacent parking lots. These properties are owned by the State of California but controlled by the City through an operating agreement.
133
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Net Position
Other Enterprise Funds
June 30, 2024
Total Other
Enterprise
Funds
ASSETS
Current assets:
Cash and cash equivalents 5,112,168$ 485,972$ 1,794,811$ 7,392,951$ Receivables:
Accounts 6,916 - - 6,916
Total current assets 5,119,084 485,972 1,794,811 7,399,867 Noncurrent:
Capital assets, net 5,683,757 - - 5,683,757
Total noncurrent assets 5,683,757 - - 5,683,757
Total assets 10,802,841 485,972 1,794,811 13,083,624
DEFERRED OUTFLOWS OF RESOURCES
Pension-related 33,136 19,041 18,925 71,102
OPEB-related 23,681 47,363 164,739 235,783
Total deferred outflows of resources 56,817 66,404 183,664 306,885
LIABILITIES
Current liabilities:
Accounts payable 196,789 484,443 468,033 1,149,265
Accrued liabilities 14,805 - 72,324 87,129
Retention payable - - - -
Deposits payable 105,862 - - 105,862
Bonds 4,103 1,529 1,529 7,161
Total current liabilities 321,559 485,972 541,886 1,349,417 Noncurrent liabilities:
Advances from other funds - - 675,000 675,000
Bonds 91,169 33,972 33,971 159,112
Net pension liability 28,954 16,137 16,137 61,228
Net OPEB liability 11,561 23,122 80,423 115,106
Total noncurrent liabilities 131,684 73,231 805,531 1,010,446 Total liabilities 453,243 559,203 1,347,417 2,359,863
DEFERRED INFLOWS OF RESOURCES
Pension-related 1,527 851 851 3,229
OPEB-related 18,799 37,599 130,779 187,177
Total deferred inflows of resources 20,326 38,450 131,630 190,406
NET POSITION
Net investment in capital assets 5,683,757 - - 5,683,757 Unrestricted 4,702,332 (45,277) 499,428 5,156,483
Total net position 10,386,089$ (45,277)$ 499,428$ 10,840,240$ Storm Drain
County
Parking Lot
State Pier and
Parking Lot
134
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Revenues, Expenses and
Changes in Net Position
Other Enterprise Funds
For the Year Ended June 30, 2024
Total Other
Enterprise
Funds
OPERATING REVENUES
Charges for services 356,254$ 1,022,570 $ 775,897 $ 2,154,721$ Miscellaneous 1,687 - - 1,687
Total operating revenues 357,941 1,022,570 775,897 2,156,408
OPERATING EXPENSES
Salaries 155,327 36,587 35,143 227,057
Employee benefits 47,311 29,007 61,838 138,156
Contract for professional services 526,457 49,725 234,437 810,619 Materials and services 144,363 3,857 1,571,385 1,719,605 Utilities 53,874 4,529 16,729 75,132
Administrative service charges 194,422 37,356 44,172 275,950 Leases and rents -5 6 2 , 4 1 2 - 562,412
Depreciation/amortization 119,814 - - 119,814
Total operating expenses 1,241,568 723,473 1,963,704 3,928,745 Operating income (loss) (883,627) 299,097 (1,187,807) (1,772,337)
NONOPERATING REVENUES (EXPENSES)
Interest revenue 144,938 - 112,249 257,187
Interest expense (2,410) (898) (898) (4,206)
Total nonoperating revenues (expenses) 142,528 (898) 111,351 252,981 Income (loss) before capital contributions and transfers (741,099) 298,19 9 (1,076,456) (1,519,356) Transfers in 2,376,698 - - 2,376,698
Transfers out (23,229) (314,422) (57,937) (395,588)
Change in net position 1,612,370 (16,223) (1,134,393) 461,754 Net position-beginning 6,600,677 (29,054) 1,633,821 8,205,444 Restatements 2,173,042 - - 2,173,042
Net position-beginning (as restated) 8,773,719 (29,054) 1,633,821 10,378,486 Net position-ending 10,386,089$ (45,277)$ 499,428$ 10,840,240$ Storm Drain
County
Parking Lot
State Pier and
Parking Lot
135
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Cash Flows
Other Enterprise Funds
For the Year Ended June 30, 2024
Totals
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 428,763$ 1,022,570 $ 775,897 $ 2,227,230$ Payments to suppliers and service providers (809,417) (661,550) (1,399,675) (2,870,642) Payments to employees for salaries and benefits (184,268) (47,837) (46,002) (278,107) Net cash provided by (used for)
operating activities (564,922) 313,183 (669,780) (921,519)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers from other funds 2,376,698 - - 2,376,698
Transfers to other funds (23,229) (314,422) (57,937) (395,588) Principal paid on non-capital debt (4,067) (1,516) (1,515) (7,098) Interest paid on on-capital debt (2,410) (898) (898) (4,206) Payments to other funds on interfund borrowings -- ( 225,000) (225,000) Net cash provided by (used for)
noncapital financing activities 2,346,992 (316,836) (285,350) 1,744,806
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets (78,568) - - (78,568) Net cash provided by (used for)
capital and related financing activities (78,568) - - (78,568)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 144,938 - 112,249 257,187
Net cash provided by (used for)
investing activities 144,938 - 112,249 257,187
Net increase (decrease) in
cash and cash equivalents 1,848,440 (3,653) (842,881) 1,001,906 Cash and cash equivalents-beginning 3,263,728 489,625 2,637,692 6,391,045 Cash and cash equivalents-ending 5,112,168$ 485,972$ 1,794,811$ 7,392,951$
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE STATEMENT OF NET POSITION
Cash and investments 5,112,168$ 485,972 $ 1,794,811 $ 7,392,951$ Total cash and cash equivalents 5,112,168$ 485,972 $ 1,794,811 $ 7,392,951$
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Operating income (loss) (883,627)$ 299,097 $ (1,187,807) $ (1,772,337)$ Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation/amortization expense 119,814 - - 119,814
(Increase) decrease in accounts receivable 91,117 - - 91,117 Increase (decrease) in accounts payable 95,660 (2,444) 397,644 490,860 Increase (decrease) in accrued liabilities 14,039 (1,227) 69,404 82,216 Increase (decrease) in deposits payable (20,295) - - (20,295) Increase (decrease) in net pension liability and related items 14,100 5,317 5,434 24,851 Increase (decrease) in net OPEB liability and related items 4,270 12,440 45,545 62,255 Total adjustments 318,705 14,086 518,027 850,818$
Net cash provided by (used for)
operating activities (564,922)$ 313,183 $ (669,780) $ (921,519) $ Business-Type Activities
Storm Drain
County
Parking Lot
State Pier and
Parking Lot
136
INTERNAL SERVICE FUNDS
Internal Service Funds have been established to finance, administer and account for the provision of goods and services to all funds and all departments on a cost-reimbursement basis.
Insurance Reserve Fund is used to account for the City’s self-insured workers’ compensation and general liability programs. The fund collects premiums from departments based on claims history.
Information Systems Fund is used to account for the operation, maintenance and replacement of the City’s Information Systems including the citywide network and related hardware and software. Revenues are generated from charges to departments based on the number of PCs in use.
Fleet Management Fund is used to account for the operation, maintenance and replacement of City vehicles.
Revenues are generated from vehicle rental charges to departments based upon the number, type and age of vehicles utilized.
Building Maintenance and Operations Fund is used to account for the operation and maintenance of certain City facilities. Revenues are generated by charges to user departments based on the number of personnel in the department.
137
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Net Position
Internal Service Funds
June 30, 2024
ASSETS
Current assets:
Cash and cash equivalents 19,771,861$ 1,414,092$ 3,649,150$ 220,808$ 25,055,911$ Receivables:
Accounts 52 - 11,567 - 11,619
Inventories - - - 105,421 105,421
Total current assets 19,771,913 1,414,092 3,660,717 326,229 25,172,951 Noncurrent:
Capital assets, net - 47,532 5,924,765 22,525 5,994,822 Total noncurrent assets - 47,532 5,924,765 22,525 5,994,822 Total assets 19,771,913 1,461,624 9,585,482 348,754 31,167,773
DEFERRED OUTFLOWS OF RESOURCES
Pension-related 247,676 672,086 211,625 272,713 1,404,100 OPEB-related 82,370 109,140 8,237 8,237 207,984
Total deferred outflows of resources 330,046 781,226 219,862 280,950 1,612,084
LIABILITIES
Current liabilities:
Accounts payable 16,795 133,595 530,381 194,525 875,296 Accrued interest - 1,887 415 - 2,302
Worker's compensation claims 9,059,914 - - - 9,059,914
Claims and judgments 3,083,394 - - - 3,083,394
Leases - - - 22,975 22,975
Subscriptions - 33,941 7,187 - 41,128
Bonds 21,578 67,325 19,259 26,283 134,445
Total current liabilities 12,181,681 236,748 557,242 243,783 13,219,454 Noncurrent liabilities:
Worker's compensation claims 6,819,500 - - - 6,819,500
Claims and judgments 755,000 - - - 755,000
Bonds 479,423 1,495,835 427,908 583,954 2,987,120
Net pension liability 218,075 571,917 191,197 235,125 1,216,314 Net OPEB liability 40,212 53,280 4,021 4,021 101,534
Total noncurrent liabilities 8,312,210 2,121,032 623,126 823,100 11,879,468 Total liabilities 20,493,891 2,357,7 80 1,180,368 1,066,883 25,098,922
DEFERRED INFLOWS OF RESOURCES
Pension-related 11,504 30,171 10,086 12,404 64,165
OPEB-related 65,389 86,641 6,539 6,539 165,108
Total deferred inflows of resources 76,893 116,812 16,625 18,943 229,273
NET POSITION
Net investment in capital assets - 13,591 5,917,578 - 5,931,169 Unrestricted (468,825) (245,333) 2,690,773 (456,122) 1,520,493 Total net position (468,825)$ (231,742)$ 8,608,351$ (456,122)$ 7,451,662$ Insurance
Reserve
Information
Systems
Fleet
Management
Building
Maintenance
and
Operations
Total Internal
Service Funds
138
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Revenues, Expenses and
Changes in Net Position
Internal Service Funds
For the Year Ended June 30, 2024
OPERATING REVENUES
Interdepartmental charges for services 9,318,917$ 4,404,765 $ 2,763,599 $ 2,767,639 $ 19,254,920$ Miscellaneous - - 36,850 - 36,850
Total operating revenues 9,318,917 4,404,765 2,800,449 2,767,639 19,291,770
OPERATING EXPENSES
Salaries 380,558 1,304,246 282,458 708,339 2,675,601
Employee benefits 190,354 508,944 179,838 261,394 1,140,530 Contract for professional services 224,232 899,551 321,893 877,189 2,322,865 Materials and services 670,423 1,556,142 758,414 750,306 3,735,285 Utilities 99 604 - 131,110 131,813
Claims 8,496,064 - - - 8,496,064
Depreciation/amortization - 43,673 968,004 48,565 1,060,242 Total operating expenses 9,961,730 4,3 13,160 2,510,607 2,776,903 19,562,400 Operating income (loss) (642,813) 91,605 289,842 (9,264) (270,630)
NONOPERATING REVENUES (EXPENSES)
Interest and fiscal charges (12,671) (42,255) (11,963) (15,434) (82,323) Gain (loss) on disposal of capital assets - - (97,361) - (97,361) Total nonoperating revenues (expenses) (12,671) (42,255) (109,324) (15,434) (179,684) Income (loss) before capital contributions and transfers (655,484) 49,350 180,518 (24,698) (450,314) Transfers in - - 1,011,741 - 1,011,741
Transfers out - (500,000) - (627) (500,627)
Change in net position (655,484) ( 450,650) 1,192,259 (25,325) 60,800 Net position-beginning 186,659 218,908 7,416,092 (430,797) 7,390,862 Net position-ending (468,825)$ (231,742)$ 8,608,351$ (456,122)$ 7,451,662$ Insurance
Reserve
Information
Systems
Fleet
Management
Building
Maintenance
and
Operations
Total Internal
Service Funds
139
CITY OF MANHATTAN BEACH, CALIFORNIA
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2024
Totals
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from interfund charges 9,318,865$ 4,404,765 $ 2,788,882 $ 2,767,639 $ 19,280,151$ Payments to suppliers and service providers (886,346) (2,396,399) (574,411) (1,658,752) (5,515,908) Payments to employees for salaries and benefits (473,111) (1,605,577) (401,119) (901,535) (3,381,342) Other receipts (payments) (6,905,241) - - - (6,905,241) Net cash provided by (used for)
operating activities 1,054,167 402 ,789 1,813,352 207,352 3,477,660
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers from other funds - - 1,011,741 - 1,011,741
Transfers to other funds - (500,000) - (627) (500,627)
Principal paid on noncapital debt (21,382) (66,712) (19,086) (26,044) (133,224) Interest paid on noncapital debt (12,671) (42,255) (11,309) (15,434) (81,669) Net cash provided by (used for)
noncapital financing activities (34,053) (608,967) 981,346 (42,105) 296,221
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets - - (2,172,813) - (2,172,813) Principal paid on capital debt - (32,914) (29,947) (48,975) (111,836) Interest paid on capital debt - 635 (652) - (17)
Proceeds from sales of assets -- ( 652,792) - (652,792) Net cash provided by (used for)
capital and related financing activities - (32,279) (2,856,204) (48,975) (2,937,458) Net increase (decrease) in
cash and cash equivalents 1,020,114 (238,457) (61,506) 116,272 836,423 Cash and cash equivalents-beginning 18,751,747 1,652,549 3,710,656 104,536 24,219,488 Cash and cash equivalents-ending 19,771,861 $ 1,414,092 $ 3,649,150 $ 220,808 $ 25,055,911 $
RECONCILIATION OF OPERATING INCOME (LOSS)
TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Operating income (loss) (642,813)$ 91,605 $ 289,842 $ (9,264) $ (270,630)$ Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation/amortization expense - 43,673 968,004 48,565 1,060,242 (Increase) decrease in accounts receivable (52) - (11,567) - (11,619) (Increase) decrease in inventories - - - (16,180) (16,180) Increase (decrease) in accounts payable 8,408 59,898 505,896 116,033 690,235 Increase (decrease) in claims and judgments 1,590,823 - - - 1,590,823 Increase (decrease) in pension and related items 82,139 194,263 68,028 77,343 421,773 Increase (decrease) in OPEB and related items 15,662 13,350 (6,851) (9,145) 13,016 Total adjustments 1,696,980 311,184 1,523,510 216,616 3,748,290$ Net cash provided by (used for)
operating activities 1,054,167$ 402,789 $ 1,813,352 $ 207,352 $ 3,477,660 $ Insurance
Reserve
Information
Systems
Fleet
Management
Building
Maintenance
and
Operations
140
STATISTICAL SECTION
141
142
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This part of the City's Statistical's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city's overall financial health.
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CITY OF MANHATTAN BEACH, CALIFORNIA
Net Position by Component,
Last Ten Fiscal Years
(accrual basis of accounting)
2015 2016 2017 2018 2019
Governmental activities
Net Investment in capital assets 101,159,813$ 102,028,495$ 103,345,895$ 103,659,026$ 111,406,609$ Restricted:
Debt Service & Restricted Cash 32,566 12,586 - - -
Special Revenue Funds 10,186,991 10,784,745 11,329,103 9,897,701 7,004,222 Post-Employment Benefits - - - 763,621 1,068,946
Total Restricted 10,219,557 10,797,331 11,329,103 10,661,322 8,073,168 Unrestricted (1,2,3) (17,546,716) (15,597,553) (16,091,037) (14,862,095) (19,756,174) Total governmental activities net position 93,832,654$ 97,228,273$ 98,583,961$ 99,458,253$ 99,723,603$ Business-type activities
Net Investment in capital assets 35,610,816$ 40,621,092$ 42,329,262$ 43,188,261$ 43,807,896$ Restricted:
Business Improvement district 546,317 541,863 552,266 553,653 571,598 Debt Service & Restricted Cash 204,856 - - - -
Total Restricted 751,173 541,863 552,266 553,653 571,598 Unrestricted 36,006,212 38,979,894 43,669,078 48,387,171 56,303,666 Total business-type activities net position 72,368,201$ 80,142,849$ 86,550,606$ 92,129,085$ 100,683,160$ Primary government
Net Investment in capital assets 136,770,629$ 142,649,587$ 145,675,157$ 146,847,287$ 155,214,505$ Restricted:
Business Improvement district 546,317 541,863 552,266 553,653 571,598 Debt Service & Restricted Cash 237,422 12,586 - - -
Special Revenue Funds 10,186,991 10,784,745 11,329,103 9,897,701 7,004,222 Post-Employment Benefits - - - 763,621 1,068,946
Total Restricted 783,739 554,449 552,266 11,214,975 8,644,766 Unrestricted 18,459,496 23,382,341 27,578,041 33,525,076 36,547,492 Total primary government net position 156,013,864$ 166,586,377$ 173,805,464$ 191,587,338$ 200,406,763$ (1) Starting in Fiscal Year ending June 30, 2015, activities reflect pension expense in accordance with GASB 68. (2) Starting in Fiscal Year ending June 30, 2018, activities reflect OPEB pronouncements in accordance with GASB 75. (3) Starting in Fiscal Year ending June 30, 2022, activities reflect pronouncements in accordance with GASB 87.
Fiscal Year Ending
Source: City of Manhattan Beach Finance Department Historical ACFRs 146
CITY OF MANHATTAN BEACH, CALIFORN
Net Position by Component,
Last Ten Fiscal Years
(accrual basis of accounting)
Governmental activities
Net Investment in capital assets
Restricted:
Debt Service & Restricted Cash
Special Revenue Funds
Post-Employment Benefits
Total Restricted
Unrestricted (1,2,3)
Total governmental activities net position
Business-type activities
Net Investment in capital assets
Restricted:
Business Improvement district
Debt Service & Restricted Cash
Total Restricted
Unrestricted
Total business-type activities net position
Primary government
Net Investment in capital assets
Restricted:
Business Improvement district
Debt Service & Restricted Cash
Special Revenue Funds
Post-Employment Benefits
Total Restricted
Unrestricted
Total primary government net position
(1) Starting in Fiscal Year ending June 30, 20
(2) Starting in Fiscal Year ending June 30, 20
(3) Starting in Fiscal Year ending June 30, 20
Exhibit A-2
2020 2021 2022 2023 2024
113,205,816$ 110,223,781 $ 105,850,112 $ 114,823,240 $ 126,578,644$ - - 1,113,451 1,102,123 1,083,533
20,404,297 11,034,877 11,872,909 1,693,107 13,308,020
1,365,844 1,820,529 1,603,036 1,721,763 3,599,985
21,770,141 12,855,406 14,589,396 4,516,993 17,991,538
(29,141,204) (31,912,766) 35,958,046 1,734,171 (32,011,264) 105,834,753$ 91,166,421$ 156,397,554$ 121,074,404$ 112,558,918$ 47,574,700$ 59,896,315$ 75,545,929$ 89,903,527$ 95,964,968$ 508,505 420,300 390,867 373,149 362,020
- - - - -
508,505 420,300 390,867 373,149 362,020
60,652,282 51,521,530 41,343,066 34,014,426 36,046,848
108,735,487$ 111,838,145$ 117,279,862$ 124,291,102$ 132,373,836$ 160,780,516$ 170,120,096 $ 181,396,041 $ 204,726,767 $ 222,543,612$ 508,505 420,300 390,867 373,149 362,020
- - 1,113,451 1,102,123 1,083,533
20,404,297 11,034,877 11,872,909 1,693,107 13,308,020
1,365,844 1,820,529 1,603,036 1,721,763 3,599,985
22,278,646 13,275,706 14,980,263 4,890,142 18,353,558
31,511,078 19,608,764 77,301,112 35,748,597 4,035,584
214,570,240$ 203,004,566$ 273,677,416$ 245,365,506$ 244,932,754$ Fiscal Year Ending
Source: City of Manhattan Beach Finance Department Historical ACFRs 147
CITY OF MANHATTAN BEACH, CALIFORNIA
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2015
2016 2017 2018 2019
Expenses
Governmental activities:
General government 12,276,294$ 13,318,679$ 13,812,252$ 15,510,329$ 15,887,856$ Public Safety 37,098,767 37,458,469 41,381,149 43,350,463 46,314,516 Culture and recreation 7,707,656 8,476,953 9,020,080 9,895,447 9,922,148 Public Works 9,084,861 8,396,503 9,572,971 10,188,714 10,805,410 Interest on long-term debt 428,406 416,551 616,179 465,472 439,858 Total governmental activities expenses 66,595,984 68,067,155 74,402,631 79,410,425 83,369,788 Business-type activities:
Water 9,133,069 9,851,136 10,729,445 11,305,635 12,141,933 Stormwater 778,084 1,117,244 1,005,835 1,657,886 1,052,389 Wastewater 1,679,545 1,383,922 1,430,253 1,454,510 1,754,562 Refuse 4,011,830 4,110,197 3,999,131 4,223,690 4,109,233 Parking 3,160,043 4,000,175 3,785,249 4,463,751 3,561,198 Total business-type activities expenses 18,762,571 20,462,674 20,949,913 23,105,472 22,619,315 Total primary government expenses 85,358,555$ 88,529,829$ 95,352,544$ 102,515,897$ 105,989,103$ Program Revenues
Governmental activities:
Charges for services:
General Government 5,814,648$ 5,859,027$ 7,099,310$ 4,198,331$ 6,495,480$ Public Safety 4,309,976 4,182,052 4,173,082 4,586,742 3,538,806 Culture and recreation 3,034,335 3,135,249 3,420,580 3,731,563 3,757,047 Public works 4,074,858 4,253,809 5,293,202 6,831,671 5,540,348 Operating grants and contributions 1,739,455 1,587,534 2,304,536 3,253,902 2,190,097 Capital grants and contributions 2,724,621 2,316,956 1,850,921 2,461,094 4,046,717 Total governmental activities program revenues 21,697,893 21,334,627 24,141,631 25,063,303 25,568,495 Business-type activities:
Charges for services:
Water 16,101,667 14,514,443 14,670,316 15,527,415 15,424,972 Stormwater 353,616 345,736 348,880 349,888 350,106
Wastewater 3,562,456 3,281,179 3,293,933 3,417,772 3,462,973 Refuse 4,063,886 4,242,316 4,205,361 4,306,957 4,131,074 Parking 3,899,746 3,828,054 3,715,624 3,862,585 4,439,452 Operating grants and contributions 10,020 19,611 9,353 331,705 117,833 Capital grants and contributions - 850,000 - - -
Total business-type activities program revenues 27,991,391 27,081,339 26,243,467 27,796,322 27,926,410 Total primary government program revenues 49,689,284$ 48,415,966$ 50,385,098$ 52,859,625$ 53,494,905$ Source: City of Manhattan Beach Finance Department
Fiscal Year Ending
Source: City of Manhattan Beach Finance Department Historical ACFRs 148
Exhibit A-3
2020 2021 2022 2023 2024
17,765,606$ 17,133,923 $ 14,917,102 $ 18,744,766 $ 20,658,755 $ 49,316,528 49,746,507 (8,739,663) 93,202,238 68,071,122 8,580,759 7,966,453 8,399,151 10,217,475 11,262,864
18,749,101 26,157,349 17,978,786 16,215,433 16,407,350
415,642 678,619 2,877,188 2,613,946 2,515,534
94,827,636 101,682,851 35,432,564 140,993,858 118,915,625 11,996,331 13,820,298 12,575,813 11,578,290 14,223,442
1,122,871 1,451,533 1,780,079 1,400,809 1,243,978
1,780,379 1,845,203 1,959,843 2,446,297 2,798,023
4,241,681 - - - -
3,471,329 4,557,379 4,119,341 3,954,717 5,486,349
22,612,591 21,674,413 20,435,076 19,380,113 23,751,792
117,440,227$ 123,357,264$ 55,867,640$ 160,373,971$ 142,667,417$ 5,638,942$ 9,555,217$ 8,737,206$ 4,682,620$ 5,000,111$ 3,418,760 3,497,543 4,145,094 4,479,503 4,623,538
3,164,582 2,104,003 3,675,974 4,510,778 4,615,812
4,752,704 5,819,113 7,112,774 6,384,078 7,242,420
2,800,719 813,280 1,578,282 4,778,148 2,017,113
22,682,418 7,465,878 6,356,153 3,111,998 3,192,377
42,458,125 29,255,034 31,605,483 27,947,125 26,691,371
15,348,975 15,705,887 15,108,592 14,376,165 15,770,377
343,406 308,133 336,494 765,627 357,941
3,599,946 3,592,183 3,556,257 3,274,511 3,619,564
4,474,113----
4,326,827 5,458,430 6,784,740 6,196,956 6,172,819
23,090 - - - 103,860
-----
28,116,357 25,064,633 25,786,083 24,613,259 26,024,561
70,574,482$ 54,319,667$ 57,391,566$ 52,560,384$ 52,715,932$ Fiscal Year Ending
Source: City of Manhattan Beach Finance Department Historical ACFRs 149
CITY OF MANHATTAN BEACH, CALIFORNIA
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2015
2016 2017 2018 2019
Net (Expense)/Revenue
Governmental activities (1,2) (44,898,091)$ (46,732,528)$ (50,261,000)$ (54,347,122)$ (57,801,293)$ Business-type activities (1,2) 9,228,820 6,618,665 5,293,554 4,690,850 5,307,095 Total primary government net expense (35,669,271)$ (40,113,863)$ (44,967,446)$ (49,656,272)$ (52,494,198)$ General Revenues and Other Changes
Governmental activities:
Taxes
Property taxes 24,435,184$ 26,344,276$ 28,215,709$ 30,318,225$ 32,107,341$ Sales taxes 9,268,657 8,826,767 9,088,502 9,083,389 9,734,444 Transient occupancy tax 4,809,421 5,139,425 5,201,518 4,429,080 5,140,858 Motor vehicle in lieu tax 15,099 14,430 15,812 18,680 17,276 Business license tax 3,376,113 3,475,792 3,658,194 3,718,418 4,053,020 Franchise taxes 1,539,453 1,439,957 1,256,125 1,262,037 1,234,752 Real estate transfer taxes 720,826 850,974 776,298 788,203 1,013,516 Rental income 2,751,302 3,028,151 3,299,373 2,402,463 3,394,762 Investment earnings 433,200 841,905 195,755 413,405 2,352,641 Other 111,382 809,976 724,240 10,345 27,943
Special Items (3)
Transfers 250,324 (643,506) (814,838) (735,737) (1,009,910) Total governmental activities 47,710,961 50,128,147 51,616,688 51,708,508 58,066,643 Business-type activities:
Investment earnings 273,944 479,475 70,885 224,471 2,237,070 Transfers (250,324) 643,506 814,838 735,737 1,009,910
Special Items (3) - - - - -
Other 74,643 60,678 258,030 2,580 -
Total business-type activities 98,263 1,183,659 1,143,753 962,788 3,246,980 Total primary government 47,809,224$ 51,311,806$ 52,760,441$ 52,671,296$ 61,313,623$ Change in Net Position
Governmental activities 2,812,870$ 3,395,619$ 1,355,688$ (2,638,614)$ 265,350$ Business-type activities 9,327,083 7,802,324 6,437,307 5,653,638 8,554,075 Total primary government 12,139,953$ 11,197,943$ 7,792,995$ 3,015,024$ 8,819,425$ (1) Starting in Fiscal Year ending June 30, 2015, activities reflect pension expense in accordance with GASB 68 (2) Starting in Fiscal Year ending June 30, 2018, activities reflect OPEB pronouncements in accordance with GASB 75 (3) Special Items in FY 2021 recorded the transfer of net pension and OPEB liabilities and related outflows/inflows due to the closure of the Refuse fund.
Fiscal Year Ending
Source: City of Manhattan Beach Finance Department Historical ACFRs 150
Exhibit A-3
Continued
2020 2021 2022 2023 2024
(52,369,511)$ (72,427,817)$ (3,827,081)$ (113,046,733)$ (92,224,254)$ 5,503,766 3,390,220 5,351,007 5,233,146 2,272,769
(46,865,745)$ (69,037,597)$ 1,523,926$ (107,813,587)$ (89,951,485)$ 34,002,017$ 37,598,821$ 39,491,986$ 41,836,587$ 43,851,831$ 8,817,192 10,088,430 13,217,943 14,267,013 13,985,150
4,203,026 2,802,514 6,464,049 7,584,021 9,797,116
28,431 - - - -
3,652,228 3,755,555 5,175,626 4,935,627 5,422,317
1,167,345 1,189,086 1,217,755 1,296,708 1,435,830
1,102,815 1,842,571 1,839,059 1,167,944 1,231,040
2,815,741 2,339,670 3,073,065 3,786,275 4,538,328
2,683,390 141,900 (1,922,527) 1,043,766 3,374,272
42,997 1,440,844 2,152,318 1,164,833 734,724
(148,434) - - -
(34,521) 421,631 (1,651,060) (547,908) (1,304,507)
58,480,661 61,472,588 69,058,214 76,534,866 83,066,101
2,554,232 (21,070) (1,458,512) 406,776 2,311,719
34,521 (421,631) 1,651,060 547,908 1,304,507
- 148,434 - - -
76,430 55,826 396,132 - -
2,665,183 (238,441) 588,680 954,684 3,616,226
61,145,844$ 61,234,147$ 69,646,894$ 77,489,550$ 86,682,327$ 6,111,150$ (10,955,229)$ 65,231,133$ (36,511,867)$ (9,158,153)$ 8,168,949 3,151,779 5,939,687 6,187,830 5,888,995
14,280,099$ (7,803,450)$ 71,170,820$ (30,324,037)$ (3,269,158)$ Fiscal Year Ending
Source: City of Manhattan Beach Finance Department Historical ACFRs 151
CITY OF MANHATTAN BEACH, CALIFORNIA
Program Revenues by Function/Program,
Last Ten Fiscal Years
(accrual basis of accounting)
2015 2016 2017 2018 2019
Program Revenues
Governmental activities:
Charges for services:
General Government 5,814,648$ 5,859,027 $ 7,099,310 $ 4,198,331 $ 6,495,480$ Public Safety 4,309,976 4,182,052 4,173,082 4,586,742 3,538,806 Culture and recreation 3,034,335 3,135,249 3,420,580 3,731,563 3,757,047 Public works 4,074,858 4,253,809 5,293,202 6,831,671 5,540,348 Operating grants and contributions 1,739,455 1,587,534 2,304,536 3,253,902 2,190,097 Capital grants and contributions 2,724,621 2,316,956 1,850,921 2,461,094 4,046,717 Total governmental activities program revenues 21,697,893 21,334,627 24,141,631 25,063,303 25,568,495 Business-type activities:
Charges for services:
Water
16,101,667 14,514,443 14,670,316 15,527,415 15,424,972
Stormwater 353,616 345,736 348,880 349,888 350,106
Wastewater 3,562,456 3,281,179 3,293,933 3,417,772 3,462,973 Refuse 4,063,886 4,242,316 4,205,361 4,306,957 4,131,074 Parking 3,899,746 3,828,054 3,715,624 3,862,585 4,439,452 Operating grants and contributions 10,020 19,611 9,353 331,705 117,833 Capital grants and contributions - 850,000 - - -
Total business-type activities program revenues 27,991,391 27,081,339 26,243,467 27,796,322 27,926,410 Total primary government program revenues 49,689,284$ 48,415,966 $ 50,385,098 $ 52,859,625 $ 53,494,905$ Source: City of Manhattan Beach Finance Department
Fiscal Year
$0
$6
$12
$18
$24
$30
2015 2016 2017 2018 2019 2020 2021 2022 2023
2024
In Millions
Program & Grant Revenues
Govt Business Grants
Source: City of Manhattan Beach Finance department historical ACFRs 152
CITY OF MANHATTAN BEACH, CALIFORNIA
Program Revenues by Function/Program,
Last Ten Fiscal Years
(accrual basis of accounting)
Program Revenues
Governmental activities:
Charges for services:
General Government
Public Safety
Culture and recreation
Public works
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business-type activities:
Charges for services:
Water
Stormwater
Wastewater
Refuse
Parking
Operating grants and contributions
Capital grants and contributions
Total business-type activities program revenues
Total primary government program revenues
Source: City of Manhattan Beach Finance Department
Exhibit A-4
2020 2021 2022 2023 2024
5,638,942$ 9,555,217$ 8,737,206 $ 4,682,620 $ 5,000,111$ 3,418,760 3,497,543 4,145,094 4,479,503 4,623,538
3,164,582 2,104,003 3,675,974 4,510,778 4,615,812
4,752,704 5,819,113 7,112,774 6,384,078 7,242,420
2,800,719 813,280 1,578,282 4,778,148 2,017,113
22,682,418 7,465,878 6,356,153 3,111,998 3,192,377
42,458,125 29,255,034 31,605,483 27,947,125 26,691,371
15,348,975 15,705,887 15,108,592 14,376,165 15,770,377
343,406 308,133 336,494 765,627 357,941
3,599,946 3,592,183 3,556,257 3,274,511 3,619,564
4,474,113 - - - -
4,326,827 5,458,430 6,784,740 6,196,956 6,172,819
23,090 - - - 103,860
---- -
28,116,357 25,064,633 25,786,083 24,613,259 26,024,561
70,574,482$ 54,319,667$ 57,391,566 $ 52,560,384 $ 52,715,932$ Fiscal Year
Source: City of Manhattan Beach Finance department historical ACFRs 153
CITY OF MANHATTAN BEACH, CALIFORNIA
Fund Balances, Governmental Funds,
Last Ten Fiscal Years
(modified accrual basis of accounting)
2015 2016 2017 2018 2019
General Fund
Nonspendable
Inventory -$- $- $- $ 7,167$
Prepaid costs 46,080 82,138 133,786 753,765 684,023
Notes and loans 1,649,129 3,771,864 1,546,266 1,494,268 - Leases receivable ---- -
Restricted
Post-employment benefits - - - 763,621 1,068,946
Debt service & restricted cash 32,566 12,586 - - -
Committed
School safety/security - - - 1,000,000 -
Assigned to City Retirement Plans ---- -
Unassigned 21,036,975 19,883,693 23,367,583 22,860,400 24,694,460 Total General fund 22,764,750 23,750,281 25,047,635 26,872,054 26,454,596 All Other Governmental Funds
Nonspendable
Notes and loans 58,232 - - - -
Restricted
Public safety 1,000,434 873,595 809,361 730,541 724,355 Culture and recreation ---- -
Public works 4,613,796 5,272,830 5,495,829 348,127 44,857 Capital projects 4,572,761 4,638,320 5,023,913 8,819,033 6,235,010 Committed
Capital projects 10,208,481 9,270,230 7,961,065 10,569,488 7,598,135 Unassigned (22,488) (22,488) (22,488) - -
Total all other governmental funds 20,431,216 20,032,487 19,267,680 20,467,189 14,602,357 Total all governmental funds 43,195,966$ 43,782,768 $ 44,315,315 $ 47,339,243 $ 41,056,953$ Fiscal Year Ending
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
$55
$60
$65
$70
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
In Millions
Total Fund Balance - General & Governmental Funds
General Fund Other Govt Funds
Source: City of Manhattan Beach Finance departmenmt historical ACFRs 154
CITY OF MANHATTAN BEACH, CALIFORNIA
Fund Balances, Governmental Funds,
Last Ten Fiscal Years
(modified accrual basis of accounting)
General Fund
Nonspendable
Inventory
Prepaid costs
Notes and loans
Leases receivable
Restricted
Post-employment benefits
Debt service & restricted cash
Committed
School safety/security
Assigned to City Retirement Plans
Unassigned
Total General fund
All Other Governmental Funds
Nonspendable
Notes and loans
Restricted
Public safety
Culture and recreation
Public works
Capital projects
Committed
Capital projects
Unassigned
Total all other governmental funds
Total all governmental funds
Exhibit A-5
2020 2021 2022 2023 2024
22,915$ 4,285$ 6,010 $ 3,510 $ 2,099$
50,207 1,978 13,585 646,818 56,494
- 555,299 200,064 98,321 49,088
- - - 379,443 541,859
1,365,844 1,820,529 1,603,036 1,721,763 3,599,985
- - 1,113,451 1,102,123 1,083,533
--- - -
130,114 92,390 58,007 58,120 57,289
25,117,005 30,136,420 36,823,324 34,675,754 34,991,414
26,686,085 32,610,901 39,817,477 38,685,852 40,381,761
--- - -
696,359 545,290 549,448 548,830 778,900
87,389 434,597 688,527 906,241 1,174,175
11,082,956 4,457,737 283,245 310,996 302,405
8,537,593 5,597,283 10,351,689 12,035,029 11,052,540
6,430,018 6,193,057 12,224,799 14,085,698 12,901,582
--- - -
26,834,315 17,227,964 24,097,708 27,886,794 26,209,602
53,520,400$ 49,838,865$ 63,915,185 $ 66,572,646 $ 66,591,363$ Fiscal Year Ending
Source: City of Manhattan Beach Finance departmenmt historical ACFRs 155
156
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CITY OF MANHATTAN BEACH, CALIFORNIA Exhibit A-11
Property Tax Levies and Collections,
Last Ten Fiscal Years
Fiscal
Year Taxes Levied
Ended for the Percentage Prior Percentage
June 30, Fiscal Year Am ount of Levy Year Amount of Levy 2015 20,507,194 19,991,754 9 7.49% 757,337 20,749,092 101.18% 2016 22,195,519 21,697,312 9 7.76% 682,877 22,380,189 100.83% 2017 23,822,585 23,386,545 9 8.17% 596,471 23,983,016 100.67% 2018 25,520,518 25,119,981 9 8.43% 675,026 25,795,007 101.08% 2019 27,138,821 26,656,342 9 8.22% 654,244 27,310,586 100.63% 2020 28,839,478 28,162,858 9 7.65% 745,930 28,908,788 100.24% 2021 30,949,109 30,333,626 98.01% 1,014,827 31,348,453 101.29% 2022 32,347,837 31,736,342 98.11% 1,235,235 32,971,577 101.93% 2023 34,620,418 33,869,843 97.83% 1,022,916 34,892,759 100.79% 2024 38,429,458 35,862,535 9 3.32% 687,837 36,550,372 95.11% Percent of levy may be over 100% since collections include current and prior years Collected within the
Fiscal Year of the Levy Total Collections to Date
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Millions
Property Tax Collections
Source: Los Angeles County Assessor and City of Manhattan Beach Finance Department 167
CITY OF MANHATTAN BEACH, CALIFORNIA
Taxable Sales by Category,
Last Ten Calendar Years
(in thousands of dollars)
2014 2015 2016 2017 2018
Apparel Stores 73,809$ 75,919 $ 74,515 $ 77,995 $ 78,622$ General Merchandise 104,277 102,310 101,038 96,353 96,372 Food Stores 31,832 33,110 34,634 33,270 33,882
Eating and Drinking Establishments 189,227 200,840 202,915 202,646 205,363 Building Materials 2,734 2,605 2,623 2,829 4,122
Service Stations 42,789 37,000 31,670 32,992 36,706
Other Retail Stores 286,140 295,157 303,311 308,555 309,131 All Other Outlets 261,863 176,347 154,628 148,764 161,173 Total 992,671$ 923,288$ 905,334$ 903,404$ 925,371$ City direct sales tax rate 1.00% 1.00% 1.00% 1.00% 1.00% Calendar Year
Apparel
9% Food Stores
4%
Restaurants
24%
Building
Materials
<1%
Service Stations
3%
Other Retail
37%
Other
23%
Sales by Category - Calendar Year 2023
Source: State Board of Equalization HDL Coren Cone
168
CITY OF MANHATTAN BEACH, CALIFORNIA
Taxable Sales by Category,
Last Ten Calendar Years
(in thousands of dollars)
Apparel Stores
General Merchandise
Food Stores
Eating and Drinking Establishments
Building Materials
Service Stations
Other Retail Stores
All Other Outlets
Total
City direct sales tax rate
Exhibit A-12
2019 2020 2021 2022 2023
78,443$ 65,209$ 94,918 $ 99,431 $ 104,048$ 96,939 - - - -
36,633 41,294 40,190 41,485 43,261
206,532 139,108 205,943 256,112 268,495
4,083 3,760 4,089 4,017 3,812
36,052 18,438 29,299 37,477 33,059
303,700 298,660 370,379 410,685 408,104
184,773 194,393 206,306 237,583 249,652
947,155$ 760,862$ 951,124$ 1,086,790$ 1,110,431$
1.00% 1.00% 1.00% 1.00% 1.00%
Calendar Year
Source: State Board of Equalization HDL Coren Cone
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CITY OF MANHATTAN BEACH, CALIFORNIA Exhibit A-21
Full-time Authorized City Employees by Function/Program, Last Ten Fiscal Years
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Function/Program
General government
Management services 13 17 17 17 15 15 14 16 16 16
F i n a n c e * 2 51 71 71 71 81 81 91 81 8 19
Information Technology* - 9 9 9 9 9 9 9 10 10
Human Resources 6 8 8 8 8 8 8 8 8 8
Community Development 22 24 24 28 30 30 30 31 33 38
Parks and Recreation 23 25 25 25 25 25 25 21 21 21
Police
Officers 65 65 65 65 65 65 65 65 72 76
Civilians 39.8 39.8 41.8 41.8 42.8 42.8 43.8 40.8 44.8 44 Fire
Firefighters & officers 31 30 30 30 30 30 30 30 31 38
Civilians 1.2 1.2 1.2 1.2 1.2 1.2 1.2 2.2 3.2 3
Public works
Engineering 7.25 7.5 8.5 11 12.5 13.5 13.5 13.5 16 16
Water 11.2 11.2 11.35 10. 85 10.8 10.8 11.8 11.5 15 16
Wastewater 3.2 3.2 3.45 3 3.9 3.9 3.9 4.1 6 6
Other 34.35 34.1 32.7 35.15 34.8 34.8 34.8 34.9 34 38
Total 282 292 294 302 306 307 309 305 328 349
Full-time Authorized Employees as of June 30
Source: City of Manhattan Beach Finance Department
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