Year Ended June 30, 2021
Annual Comprehensive Financial Report
City of Orange
C a l i f o r n i a
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2021
Prepared by:
FINANCE DEPARTMENT
Will Kolbow
Assistant City Manager/Administrative Services Director
Elected Officials
CITY TREASURER
RICHARD A. ROHM
CITY CLERK
PAMELA COLEMAN
Introductory Section
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Financial Section
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Management’s Discussion
and Analysis
5 MANAGEMENT’S DISCUSSION AND ANALYSIS
The purpose of this Management’s Discussion and Analysis is to interpret and summarize the financial changes in the City of Orange Financ ial Statements for Fiscal Year 2020-21. This analysis will focus on the significant changes in an effort to explain the City’s overall financial condition. We encourage readers to consider the information presented here in conjunction with the additional information furnished in our Letter of Transmittal, Notes to the Financial Statements, and the Statistical Section.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the City’s Basic Financial Statements, which are comprised of three components: (1) Government-wide Financial Statements; (2) Fund Financial S tatements; and (3) Notes to the Financial Statements. In addition to the Basic Financial Statements and required information, this report also contains other supplementary information.
Government-wide Financial Statements. The Government-wide Financial Statements are designed to provide readers with a broad overview of the City’s financial position, in a manner similar to that of a private-sector business. These statements are reported on the full accrual basis of accounting. Thus, revenues and expens es are reported for some items that will not affect cash flows until future fiscal periods.
The Government-wide Financial Statements separate Governmental Activities that are principally supported by taxes and revenues from other agencies, from Business-type Activities that are intended to recover all, or a significant portion, of their costs through user fees and charges. The Governmental Activit ies of the City include General Government, Public Safety, Public Works, Community De velopment, Parks and Library, Economic Development, and Interest on Long-Term Debt, when applicable . The City’s two Business- type Activities are Water and Sanitation.
The Statement of Net Position presents information on all of the City’s assets and deferred outflows of resources, and liabilities and deferred inflows of resources; the difference between the four is reported as net position. Total assets include all capital items including infrastructure. Evaluating increases or decreases in net position over time will serve as a useful indicator of whether the financial position of the City is improving or declining.
The Statement of Activities presents information on the net cost of each governmental function (activity) during the fiscal year. This statement also identifies the amount of general revenues needed to fully fund each governmental function.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregate d for specific activities or objectives. The City, like other state and local governments, uses fund accounting to 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. 5 6
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Government-wide
Financial Statements
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Fund Financial Statements
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Notes to the
Financial Statements
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69 9. Long-Term Liabilities
Following is a reconciliation of long-term liabilities for the year ended June 30, 2021:
Beginning
Balance Additions Deletions
Ending
Balance
Amounts Due
Within One
Year
Amounts Due
Beyond One
Year
Governmental activities:
Direct borrowing:
Loans Payable $ 779,235 - 237,778 541,457 237,778 303,679 Lease revenue bonds - 29,930,000 - 29,930,000 520,000 29,410,000 Premium on lease
revenue bonds - 4,375,452 145,848 4,229,604 145,848 4,083,756 Pension obligation bonds - 265,478,776 - 265,478,776 7,017,926 258,460,850 Other liabilities:
Compensated absences 9,092,621 4,491,624 4,191,779 9,392,466 4,330,010 5,062,456 Claims payable 17,800,183 3,244,586 2,170,751 18,874,018 5,713,107 13,160,911 Total Govt. activities 27,672,039 307,520,438 6,746,156 328,446,321 17,964,669 310,481,652 Business-type activities
Compensated absences 685,013 297,584 160,393 822,204 190,962 631,242 Pension obligation bonds - 21,006,224 - 21,006,224 677,074 20,329,150 Total Business activities 685,013 21,303,808 160,393 21,828,428 868,036 20,960,392 Total $28,357,052 328,824,246 6,906,549 350,274,749 18,832,705 331,442,044 In April 2018 and May 2019, the City entered into a series of loan agreements with Southern California Edison for LED retrofit of city-owned streetlights. The loans total $1,126,322 and carry a zero percent interest rate. The outstanding balance at June 30, 2021 is $547,457.
The annual payments are as follows:
Year Ending
June 30 Principal
2021-22 $ 237,778
2022-22 156,440
2023-24 70,095
2024-25 49,772
2025-26 27,372
Total $ 547,457
On July 16, 2020, the City of Orange Public Facilities Financing Authority issued Lease Revenue Bonds Series 2020A in the amount of $29,930,000. Proceeds of the bonds will be used to: (i) finance the construction of a new Fire Headquarters and Station No. 1, roof replacement and other improvements to the City’s Police Headquarters and the City’s other fire stations; and installation of security improvements at various City facilities; and (ii) pay costs of issuance of the Bonds. Interest rate on the bonds is 4%. The bonds are payable in annual installments of $520,000 to $1,680,000 and are scheduled to mature in 2051.
The annual debt service payments for these bonds are made from the General Fund and are shown on the following page.
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Required Supplementary
Information
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Supplementary Schedules
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Statistical Section
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CITY OF ORANGE
ORANGE CIVIC CENTER
POST OFFICE BOX 449
300 EAST CHAPMAN AVENUE, ORANGE CALIFORNIA 92866-1591
(714) 744-5500
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