Seal Beach City Council
March 14, 2022

2 Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the Budgetary Comparison Schedule – General Fund, the Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios, the Schedule of Contributions – Pensions, the Schedule of Changes in Net Other Postemployment Benefits Liability and Related Ratios, and the Schedule of Contributions – Other Postemployment Benefits on pages 5 to 12 and 87 to 95, be presented to supplement the basic financial statements.

Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the Required Supplementary Information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Introductory Section, the Combining and Individual Nonmajor Fund Financial Statements, and the Statistical Section, are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The Combining and Individual Nonmajor Fund Financial Statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Combining and Individual Nonmajor Fund Financial Statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The Introductory and the Statistical Sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them.

To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
Seal Beach, California

3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 25, 2022, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of 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.

Santa Ana, California
February 25, 2022
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City of Seal Beach
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2021
5 Management of the City of Seal Beach is pleased to offer this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2021, along with comparisons to the fiscal year ended June 30, 2020. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal and the City’s financial statements.

FINANCIAL HIGHLIGHTS
 The City’s net position – the difference between its assets and deferred outflows of resources compared to its liabilities and deferred inflows of resources – was $128.2 million, an increase of $2.3 or 1.9%. The net position of business-type activities decreased by $0.3 million or 0.6%, while the net position of governmental activities increased by $2.6 million or 3.2%.
 The net position of $128.2 million consisted of: $115.8 million of net investment in capital assets; $7.2 million of resources that are subject to external restrictions on how they may be used; $14.4 million that may be used to meet the City’s obligations for its business-type activities; and a $9.2 million deficit related to its governmental activities.
 Total revenues were $53.3 million and total expenses were $51.0 million. Revenues increased by $3.3 million or 6.6%, while expenses decreased by $1.8 million or 3.4%.

 As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $34.7 million, representing an increase of $2.7 million or 8.6%. Of this amount, $8.0 million (the sum of assigned and unassigned fund balances) is available for spending at the City’s discretion.  At the end of the current fiscal year, unassigned fund balance in the General Fund was $3.6 million or 9.4% of total General Fund expenditures and transfers out. The City’s Reserve Fund Policy aims to maintain a minimum balance in the Fiscal Policy Reserve equal to approximately three months’ worth of the City’s General Fund operating expenditures. As of June 30, 2021, the Committed-Fiscal Policy Reserve has a balance of $8.7 million, or 25% of General Fund expenditures (less transfers out related to capital projects).

This percentage hits the City’s target rate and is in accordance with the recommendation of the Government Finance Officers Association (GFOA).

OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements; and 3) notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements.

Government-Wide Financial Statements – The government-wide financial statements are designed to provide readers with a view of the City’s finances, in a manner similar to a private-sector business.

The Statement of Net Position presents information on all assets and liabilities, deferred outflows and inflows with the difference between them reported as net position. Over time, increases or decreases in the City’s net position are one indicator of whether its financial condition is improving or deteriorating.

The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal year. These changes are reported on a full accrual basis when the economic event occurs. regardless of when cash is received or paid.

City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2021
6 Both government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government and administration, public safety, development services, public works, recreation, and all its component units that are legally separate but whose activities entirely support the City of Seal Beach. The business-type activities of the City include water and sewer operations.

The government-wide financial statements can be found immediately following this discussion and analysis.

Fund Financial Statements – The fund financial statements provide detailed information about the most significant funds and other funds – not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management established many other funds to help control and manage money for particular purposes or to verify that all legal requirements for using certain taxes, grants, and other resources are being satisfied.

The City’s three types of funds are governmental, proprietary, and fiduciary funds.

Governmental funds 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 how money flows in and out of those funds and the balances left at fiscal year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The differences of results in the Governmental Fund financial statements to those in the government-wide financial statements are explained in a reconciliation following each of the Governmental Fund financial statements.

The City maintains individual governmental funds organized by their type (general, special revenue, and capital improvements 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 Capital Projects and Equipment Capital Projects Fund, which are considered to be major funds. Data from the remaining governmental funds are combined into a single, aggregated presentation. Individual fund data for each of the other governmental funds is provided in the form of combining statements and schedules elsewhere in this report.

The City adopts an annual appropriated budget for its General Fund and Special Revenue Funds. Budgetary comparison statements have been provided to demonstrate compliance with this budget.

The basic governmental fund financial statements can be found immediately following the government-wide financial statements.

Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City’s enterprise funds are comprised of the business-type activities reported in the government-wide statements but provide more detail and additional information such as a statement of cash flows. Customer charges for various City services are generally reported in proprietary funds. The basic proprietary fund financial statements can be found immediately following the governmental funds financial statements.

Fiduciary funds account for assets held by the City in a trustee capacity, or as an agent for other governmental entities, private organizations, or individuals. All the City’s fiduciary activities are reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position. We exclude these activities from the City’s government-wide financial statement because the City cannot use these assets to finance its operations. The basic fiduciary fund financial statements can be found immediately following the proprietary funds financial statements.

City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2021
7 Notes to the Basic 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 basic financial statements can be found immediately following the fiduciary funds financial statements.

Required Supplementary Information (Unaudited) and Supplementary Information – In addition to the required elements of the basic financial statements, a required supplementary information section concerning the City’s progress in funding it obligation to provide pension and other post-employment benefits to City employees is included. Also included in this section are the budgetary comparison schedules for the general and major funds. The required supplementary information can be found immediately following the notes to the basic financial statements.

Combining statements and individual fund statements for non-major governmental funds, internal service and custodial funds are presented immediately following the required supplementary information.

GOVERNMENT-WIDE FINANCIAL ANALYSIS
The analysis focuses on the City’s net position and changes in net position resulting from the City’s activities.

Analysis of Net Position – As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. The City’s combined net position were $128.2 million and $125.8 million for the years ended June 30, 2021, and June 30, 2020, respectively, as shown in Table 1. 2021 2020 2021 2020 2021 2020
Current and other assets $ 39,531 $ 36,268 $ 19,423 $ 18,977 $ 58,954 $ 55,245 Capital assets 86,590 86,657 35,794 36,930 122,451 123,520 Total assets 126,188 122,858 55,217 55,907 181,405 178,765 Deferred outflows of resources 9,790 9,218 997 1,019 10,787 10,237 Current liabilities 3,836 3,776 1,315 1,366 5,151 5,142 Long-term liabilities 47,565 45,263 9,546 9,757 57,111 55,020 Total liabilities 51,401 49,039 10,861 11,123 62,262 60,162 Deferred inflows of resources 1,555 2,622 185 373 1,740 2,995 Net position
Net investment in capital assets 85,059 84,531 30,785 31,474 115,844 116,005 Restricted 7,601 7,202 25 25 7,227 7,626
Unrestricted (9,239) (11,716) 14,359 13,931 5,120 2,215 Total net position 83,022 $ 80,416 $ 45,169 $ 45,430 $ 128,191 $ 125,846 $ (in Thousands)
Activities
Governmental
Table 1
Business-Type
Activities
Total
Activities
Condensed Statement of Net Position
As of June 30, 2021, the City continued to report positive balances in all three categories of net position for the government as a whole.

Net position – Net investment in capital assets ($115.8 million or 90.4% of total net position) represents capital assets, such as land, buildings, infrastructure, and equipment, less any related outstanding debt used to acquire those assets that is still outstanding. This is an overall decrease of $0.2 million, or 0.1%. The City uses these capital assets to provide services to the citizens; consequently, these assets are not available for future spending. Although the investment in capital assets is reported net of related debt, resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2021
8 Net position - Restricted ($7.2 million or 5.6% of total net position) represents resources that are subject to external restrictions on how they may be used. This is a $0.4 million, or 5.2% decrease. The largest decrease occurred in public works, which decreased $0.5 million, or 14.3%.

Net position – Unrestricted ($5.1 million or 4.0% of total net position). This is a $2.9 million, or 131.2% increase.

This change is attributed to the decreases in the other two categories of net position as well as $2.3 million of revenues in excess of expenses. The governmental activities unrestricted deficit of $9.2 million is a result of implementing Governmental Accounting Standards Board (GASB) statements related to pension and other postemployment benefits (OPEB) liabilities. The deficit reflects the extent to which the City must defer to future periods the financing of a portion of its pension and OPEB liabilities. Generally accepted accounting principles require financial statement recording when a liability is incurred. However, the City, like many other governments, raises and budgets resources needed to liquidate certain liabilities during the year in which the liability is to be liquidated rather than during the year in which the liability is incurred. The City will continue to fund these obligations on an actuarial basis, contributing the full amount of annual required contributions every year.

Analysis of Activities - The City’s net position increased by $2.3 million or 1.9%. The following table provides a summary of the City’s operations for the years ended June 30, 2021, and June 30, 2020, as shown in Table 2.

2021 2020 2021 2020 2021 2020
Revenues:

Program revenues:

Charges for services $ 7,652 $ 7,019 $ 7,843 $ 7,276 $ 15,495 $ 14,295 Operating grants and capital contributions 4,287 3,457 - 4,287 - 3,457 Capital grants and contributions 11 31 - - 11 31
General revenues:

Taxes
Property taxes 12,927 12,358 - 12,927 - 12,358
Sales taxes 10,147 9,108 - 10,147 - 9,108
Transient occupancy taxes 1,299 878 - 878 - 1,299
Other taxes 5,936 5,722 - 5,936 - 5,722
Use of money and property 1,862 151 257 391 408 2,253
Other 3,271 1,463 - 3,271 - 1,463
Total revenues 45,260 42,319 8,100 7,667 53,360 49,986
Expenses:

General government 7,232 7,007 - 7,232 - 7,007
Public safety 23,326 24,017 - 23,326 - 24,017
Community development 2,283 1,577 - 2,283 - 1,577
Community services 1,140 867 - 1,140 - 867
Public works 8,291 10,748 - 8,291 - 10,748
Interest on long-term debt 58 87 - - 58 87
Water - 6,033 - 5,445 6,033 5,445
Sewer - - 2,652 3,035 2,652 3,035
Total expenses 42,330 44,303 8,685 8,480 51,015 52,783
Change in net position before transfers 2,930 (1,984) (585) (813) 2,345 (2,797) Transfers (324) 376 324 - (376) -
Changes in net position 2,606 (1,608) (261) (1,189) 2,345 (2,797) Net position at beginning of year 80,416 82,024 45,430 46,619 125,846 128,643 Net position at end of year 83,022 $ 80,416 $ 45,169 $ 45,430 $ 128,191 $ 125,846 $ Table 2
Condensed Statement of Activities
(in Thousands)
Governmental Total
Activities Activities Activities
Business-Type
City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2021
9 Governmental Activities experienced an increase of $2.6 million in net position as of June 30, 2021, compared to a decrease of $1.6 million on June 30, 2020. The primary reasons for the increase in net position is attributable to an increase in other revenue of $1.8 million or 123.6%, which is due to the receipt of final insurance proceeds on the May 2016 pier fire; and an increase in sales taxes of $1.0 million or 11.4%, as a result of an improving economy as the City works its way out of the pandemic. In addition, public works saw a decrease in expenses of $2.5 million or 23%. This was due in part to the reduced use of consultants during the pandemic.

The cost of all governmental activities during the current fiscal year was $42.3 million, which is a $2.0 million decrease. As shown on the statement of activities, those who directly benefited from the programs paid $7.7 million of the cost, and $4.3 million was financed by contributions and grants received from other governmental organizations. The remaining $30.4 million in costs of operations was subsidized through general City taxes and other revenue sources. The largest operating cost was comprised of Public Safety, representing 55.1% of total governmental expenditures compared to 54.2% of total governmental expenditures in fiscal year 2019-2020.

Business-type Activities net position decreased by $0.3 million. During the fiscal year ended June 30, 2010, a water rate study was conducted and as a result of that study, water rates were reduced in fiscal year 2009-2010 but increased in fiscal year 2010-2011 and for the next three years. The final approved water rate increase occurred in the fiscal year ended June 30, 2014. A new water and sewer rate study was conducted and implemented in fiscal year 2021-2022.

FINANCIAL ANALYSIS OF CITY FUNDS
Governmental funds – The objective of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

As of June 30, 2021, the City’s governmental funds reported combined ending fund balances of $34.7 million.

Approximately $3.3 million, or 9.4%, of this total amount constitutes unassigned fund balance. The remainder of the fund balance is assigned to indicate that it is not available for new spending because it has already been committed to pay for encumbrances, loans, prepaid expenses, or advances to other funds.

The General Fund ended the fiscal year with a fund balance of $30.0 million, representing a net increase of $2.8 million in fund balance compared to the $5.1 million increase experienced during the prior fiscal year. The primary reason for the increase in fund balance was due to an increase in sales tax, property tax, and other taxes. The largest decrease in revenue occurred in use of money and property as interest rates continue to decline during the pandemic.

Overall expenses increased by 6.51%, as the City began to reopen services and support to residents and businesses.

Proprietary funds – The City’s proprietary funds financial statements provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net position totaled $5.0 million and $9.4 million for the Water and Sewer funds, respectively. The Water fund decreased by $0.6 million in net position. Both revenues and expenditures increased during the fiscal year by 16.1% and 15.1%, respectively. Transfers in increased by $0.7 million. This was a one-time repayment from the General Fund for expenditures paid out of the Water fund.

The increase of $0.4 million in the Sewer fund net position resulted from revenue collection.

City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2021
10 GENERAL FUND BUDGETARY HIGHLIGHTS
When preparing its budget, the City attempts to estimate its revenues using realistic, but conservative methods so as to budget its expenditure appropriations in a prudent manner. Amendments were approved during the fiscal year to the adopted budget. The fiscal year 2020-2021 General Fund’s original (adopted) budget for revenues was $36.3 million, and the final budget was $36.6 million, a net increase of $0.3 million. The majority of this increase was to charges to services as activities began to reopen as Covid-19 protocols allowed. The fiscal year 2020-2021 General Fund’s original (adopted) budget for expenditures was $36.5 million, and the final budget was $37.3 million, a net increase of $0.3 million. Like revenues, as Covid-19 protocols allowed for reopening services, related expense budgets were also increased.

The General Fund reflected a net total positive budget variance of $8.4 million when comparing actual amounts to the final amended budget for the current fiscal year. Actual revenues show a positive variance of $3.5 million or

11.7% of the final budget due unanticipated receipts of taxes and the final insurance payment on the pier fire. Actual expenditures of $35.9 million generated budgetary savings of $1.4 million, or 3.8% of the final budget. Transfers out generated budgetary savings of $3.5 million. This savings is due to budgeted capital projects not requiring resources due to work stoppage as a result of the ongoing pandemic. These appropriations will be reallocated and carried forward to the fiscal year 2021-2022 fiscal year.

CAPITAL ASSETS
The City’s capital assets for its governmental and business-type activities as of June 30, 2021, amounts to $122.5 million compared to $123.5 million (net of accumulated depreciation) as of June 30, 2020. The investment in capital assets includes land, building, equipment, improvements, infrastructure, and construction in progress. Total capital assets for governmental activities for the current fiscal year increased 0.1% and the City’s investment in capital assets for business-type activities for the current fiscal year decreased 3.1%. 2021 2020 2021 2020 2021 2020
Land and land easement $ 21,220 21,220$ $ - -$ 21,220$ 21,220$ Buildings and improvements 8,994 9,423 - - 8,994 9,423
Machinery and equipment 1,429 1,583 564 571 1,993 2,154 Vehicles 1,767 1,996 354 353 2,121 2,349
Infrastructure 51,302 51,643 33,606 35,140 84,908 86,783 Construction-in-progress 725 1,945 1,270 866 3,215 1,591 Totals $ 86,590 86,657 $ 35,794 $ 36,930 $ 122,451 $ 123,520 $ Governmental
Activities Activities Total
Business-Type
Table 3
Capital Assets, At Fiscal Year-End
(Net of Depreciation, in Thousands)
During fiscal year 2020-2021, major capital projects formally completed include:
 Annual Slurry Seal, Project ST2001 – total cost $159,000  Annual Slurry Seal, Project ST2101 – total cost $213,000  Arterial Street Resurfacing, Project ST2003 – total cost $209,000  Fire Hydrant Relocation at Seal Beach @ PCH, Project WT2108 – total cost $45,000  Beach Yard Perimeter Wall Improvements, Project BP2002 – total cost $69,000  Annual Local Paving, Project ST2002 – total cost $325,000  Annual Local Paving, Project ST2102 – total cost $247,000 Additional information on the City’s capital assets can be found in Note 5 in the notes to the basic financial statements.

City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2021
11 DEBT ADMINISTRATION
As of June 30, 2021, the City had bonded debt, notes payable, compensated absences, claims payable, and capital leases totaling $8.4 million compared to $9.5 million at the end of fiscal year 2019-2020. The City’s governmental activities maintained $3.1 million in bonds, capital leases, compensated absences, and claims payable versus $3.7 million last fiscal year, representing a decrease of approximately $0.6 million. This decrease reflects interest and principal payments made during fiscal year 2020-2021.

The City’s business-type activities debt decreased $0.5 million from $5.7 million to $5.2 million. Debt in the business-type activities consists of Sewer Certificates of Participation Payable to provide funds for improvements to the City’s sewer system, a State revolving loan for the sewer capital improvement project, and compensated absences.
2021 2020 2021 2020 2021 2020
Lease revenue bonds 1,155 $ 1,575 $ -$ -$ 1,155 $ $ 1,575 Certificates of participation - - 1,765 1,940 1,765 1,940 Capital leases 380 457 - - 380 457
Sewer capital improv. proj. - - 3,341 3,625 3,341 3,625 Self-insured claims payable 297 301 - - 297 301
Compensated absences 1,423 1,317 122 137 1,439 1,560
Total $ 3,756 3,149 $ 5,228 $ 5,702 $ 8,377 $ 9,458 $
Table 4
Outstanding Debt, At Fiscal Year-End
(in Thousands)
Governmental
Activities
Business-Type
Activities Total
Additional information on the City’s long-term debt can be found in Note 6 in the basic financial statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS
The City of Seal Beach economy and tax base continue to support the present package of core services for our residents, businesses, and visitors and protect all essential municipal services that contribute to the high quality of life within the City.

For the upcoming fiscal year, revenues are expected to improve moderately. The passage of the Measure BB is anticipated to generate approximately $5.7 million in transactions and use tax revenue. Property taxes are expected to increase as well primarily from continued improvement in assessed value and the continued strength in the local real estate market.

The COVID-19 pandemic hit in the middle of fiscal year 2019-2020 resulting in our need to reprioritize goals, objectives, and priorities, and therefore the need for deeper expenditure reductions. While the Southern California region saw a huge increase in the housing market, all other economic sectors declined rapidly comparable to the last Great Recession. The economy and consumer spending are forecasted to continue improving but at a slower rate than fiscal year 2020-2021.

City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2021
12 The City prepared an annual budget for fiscal year 2021-2022. The one-year budget represents a General Fund surplus of operating revenues over operating expenditures (excluding capital projects). Expenditures of the City were budgeted at the current level of service with capital improvement projects to be supported primarily by the City’s General Fund reserves. The revenue projections for the fiscal year 2020-2021 budget year were very conservative due to the unknown impacts from the Federal tax reform on the local economy. The City will continue to monitor revenue streams throughout the coming years and will adjust spending levels as deemed necessary.

The most significant issues facing the City are the aged condition of the City’s infrastructure. The City has completed and adopted numerous infrastructure planning documents (i.e., Water Master Plan, Sewer Master Plan, Master Plan of Drainage, Facilities Master Plan, and Pavement Management Plan). These plans identify well over $160 million in needed improvements throughout the City. The City annually adopts a 5-year Capital Improvement Program (CIP) that strategically plans construction of these needed improvements. The fiscal year 2021-2022 CIP recommends approximately $39.3 million in improvements over the next 5 years. The 5 Year Capital Improvement Program identifies needs in the following areas: Beach and Pier ($2.4M), Parks ($0.2M), Sewer System ($7.5M), Streets and Transportation ($8M) and Water System ($21.2M).

REQUEST FOR INFORMATION
This financial report is designed to provide the City’s citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the funds it receives. If you have questions about this report or need additional financial information, contact the City’s Finance Department at 211 8th Street, Seal Beach, CA 90740-6379 or call (562) 431-2527.

BASIC FINANCIAL STATEMENTS
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14 GOVERNMENT-WIDE FINANCIAL STATEMENTS
15 Governmental Business-Type
Activities Activities Total
ASSETS
Current Assets:

Cash and investments 32,576,460 $ 18,299,519 $ 50,875,979 $ Receivables:

Accounts 1,154,704 1,067,472 2,222,176
Taxes - 2,870,198 2,870,198
Interest - 112,967 112,967
Prepaid items 2,185,461 31,462 2,216,923
Total Current Assets 38,899,790 19,398,453 58,298,243
Noncurrent Assets:

Restricted cash with fiscal agent 631,082 25,082 656,164 Capital assets:

Capital assets, not being depreciated 23,164,630 1,269,295 24,433,925 Capital assets, being depreciated, net 63,492,442 34,524,276 98,016,718 Total capital assets, net 86,657,072 35,793,571 122,450,643 Total Noncurrent Assets 87,288,154 35,818,653 123,106,807 Total Assets 126,187,944 55,217,106 181,405,050

DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding - 96,563 96,563
Pension related items 8,818,910 804,214 9,623,124
Other postemployment benefits related items 971,459 96,078 1,067,537 Total Deferred Outflows of Resources 9,790,369 996,855 10,787,224 Primary Government
City of Seal Beach
Statement of Net Position
June 30, 2021
See accompanying Notes to the Basic Financial Statements 16 Governmental Business-Type
Activities Activities Total

LIABILITIES
Current Liabilities:

Accounts payable 2,258,919 1,046,601 3,305,520
Accrued liabilities 767,815 100,453 868,268
Accrued interest 1,861 54,637 56,498
Deposits payable 745,814 109,059 854,873
Retention payable 62,584 3,196 65,780
Long-term liabilities, due within one year 745,099 511,562 1,256,661 Total Current Liabilities 4,582,092 1,825,508 6,407,600 Long-term liabilities:

Long-term liabilities, due in more than one year 2,404,081 4,716,278 7,120,359 Net pension liabilities 39,047,189 3,787,289 42,834,478 Net other postemployment benefits liabilities 5,368,277 530,928 5,899,205 Total Noncurrent Liabilities 46,819,547 9,034,495 55,854,042 Total Liabilities 10,860,003 51,401,639 62,261,642

DEFERRED INFLOWS OF RESOURCES
Pension related items 1,218,200 151,917 1,370,117
Other postemployment benefits related items 336,838 33,314 370,152 Total Deferred Inflows of Resources 185,231 1,555,038 1,740,269

NET POSITION
Net investment in capital assets 85,059,375 30,784,313 115,843,688 Restricted for:

Community development projects 867,464 - 867,464
Public safety 248,166 - 248,166
Community services 482,763 - 482,763
Public works 2,814,582 - 2,814,582
Debt service 25,082 742,148 767,230
Waste management, park in lieu, and I-405 corridor improvement 2,046,356 - 2,046,356 Total restricted 7,201,479 25,082 7,226,561
Unrestricted (deficit) (9,239,218) 14,359,332 5,120,114 Total Net Position $ 83,021,636 $ 45,168,727 $ 128,190,363 City of Seal Beach
Statement of Net Position (Continued)
June 30, 2021
Primary Government
See accompanying Notes to the Basic Financial Statements 17 Capital Grants
Charges for Operating Grants and
Expenses Services and Contributions Contributions Total Functions/Programs
Governmental Activities:

General government 7,231,812 $ 1,486,575 $ - $ - $ 1,486,575 $ Public safety 23,326,809 2,361,646 1,019,745 - 3,381,391 Community development 2,283,377 221,140 1,213,762 - 1,434,902 Community services 1,139,731 985,542 - - 985,542
Public works 8,290,658 2,596,848 2,054,415 10,692 4,661,955 Interest and fiscal charges 57,902 - - - -
Total Governmental Activities 7,651,751 42,330,289 4,287,922 10,692 11,950,365 Business-Type Activities:

Water Utility 6,033,692 4,957,483 - - 4,957,483
Sewer Utility 2,651,801 2,885,699 - - 2,885,699
Total Business-Type Activities 7,843,182 8,685,493 - - 7,843,182 Total Primary Government $ 15,494,933 51,015,782 $ 4,287,922 $ 10,692 $ 19,793,547 $ Program Revenues
City of Seal Beach
Statement of Activities
For the Year Ended June 30, 2021
See accompanying Notes to the Basic Financial Statements 18 Governmental Business-Type
Activities Activities Total
Functions/Programs
Governmental Activities:

General government (5,745,237) $ - $ (5,745,237) $
Public safety (19,945,418) - (19,945,418)
Community development (848,475) - (848,475)
Community services (154,189) - (154,189)
Public works (3,628,703) - (3,628,703)
Interest and fiscal charges (57,902) - (57,902)
Total Governmental Activities - (30,379,924) (30,379,924) Business-Type Activities:

Water Utility (1,076,209) - (1,076,209)
Sewer Utility 233,898 - 233,898
Total Business-Type Activities (842,311) - (842,311)
Total Primary Government (842,311) (30,379,924) (31,222,235) General Revenues:

Taxes:

Property taxes, levied for general purpose 12,926,895 - 12,926,895 Sales taxes 10,146,964 - 10,146,964
Franchise taxes 1,067,098 - 1,067,098
Utility users tax 4,129,727 - 4,129,727
Transient occupancy taxes 878,165 - 878,165
Other taxes 720,807 - 720,807
Motor vehicle in lieu- unrestricted 19,070 - 19,070
Use of money and property 151,196 256,845 408,041
Other 3,270,752 - 3,270,752
Transfers 324,379 (324,379) -
Total General Revenues and Transfers 581,224 32,986,295 33,567,519 Changes in Net Position 2,606,372 (261,087) 2,345,285
Net Position:

Beginning of Year 80,415,264 45,429,814 125,845,078
End of Year $ 83,021,636 $ 45,168,727 $ 128,190,363
Net (Expense) Revenue and Changes in Net Positions
City of Seal Beach
Statement of Activities (Continued)
For the Year Ended June 30, 2021
See accompanying Notes to the Basic Financial Statements 19 This page intentionally left blank.
20 FUND FINANCIAL STATEMENTS
21 This page intentionally left blank.
22 GOVERNMENTAL FUND FINANCIAL STATEMENTS
23 This page intentionally left blank.
24 Capital Projects
and Equipment Nonmajor
Capital Projects Governmental
General Fund Funds Total
ASSETS
Cash and investments $ - 26,738,110 4,944,955 $ 31,683,065 $ Receivables:

Accounts 962,957 - 184,272 1,147,229
Taxes 2,804,406 - 65,792 2,870,198
Interest 112,848 - 119 112,967
Prepaid items 2,069,748 - 115,713 2,185,461
Due from other funds 259,576 - - 259,576
Restricted assets:

Cash and investments with fiscal agents 4,647 - 626,435 631,082 Total assets 32,952,292 - 5,937,286 38,889,578

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 1,279,713 143,122 784,840 2,207,675
Accrued liabilities 744,399 - 23,416 767,815
Deposits payable 745,814 - - 745,814
Due to other funds - 73,379 186,197 259,576
Retentions payable - 19,421 43,163 62,584
Total liabilities 2,769,926 235,922 1,037,616 4,043,464 Deferred Inflows of Resources:

Unavailable revenues 185,434 - - 185,434
Fund Balances:

Nonspendable 2,069,748 - - 2,069,748
Restricted 2,046,356 - 5,037,618 7,083,974
Committed 17,546,968 - 17,546,968 -
Assigned 4,704,595 - - 4,704,595
Unassigned (deficit) 3,629,265 (235,922) (137,948) 3,255,395 Total fund balances 29,996,932 (235,922) 4,899,670 34,660,680 Total liabilities and fund balances $ - 32,952,292 5,937,286 $ 38,889,578 $ City of Seal Beach
Balance Sheet
June 30, 2021
Governmental Funds
See accompanying Notes to the Basic Financial Statements 25 Total Fund Balances - Total Governmental Funds $ 34,660,680 Nondepreciable $ 23,164,630
Depreciable, net of $908,943 reported in Internal Service Fund 62,583,499 85,748,129 Bonds payable $ (1,155,000)
Loans payable (380,113)
Claims and judgments (297,295)
Compensated absences (3,149,180) (1,316,772)
(1,861)
Pension related deferred outflows of resources 8,818,910 $ Aggregate net pension liability (39,047,189)
Pension related deferred inflows of resources (1,218,200) (31,446,479) OPEB related deferred outflows of resources 971,459 $
Net OPEB liability (5,368,277)
OPEB related deferred inflows of resources (336,838) (4,733,656) 185,434
1,758,569
Net Position of Governmental Activities $ 83,021,636
Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the Statement of Net Position:

Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet.

Internal Service Funds were used by management to charge the costs of certain activities, such as insurance and equipment replacement to individual funds. The assets and liabilities of the Internal Service Funds were included in the governmental activities in the Government-Wide Statement of Net Position.

Revenue reported as unavailable revenue in the governmental funds when it is not received soon enough after year-end to be considered available. The availability criteria does not apply to the Government-Wide Financial Statements and, therefore, the revenue is recognized when eligibility requirements are met and earned.

Net other postemployment benefits liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the governmental funds.

Net pension liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:

City of Seal Beach
Reconciliation of the Governmental Funds Balance Sheet to the June 30, 2021
Government-Wide Statement of Net Position
Amounts reported for governmental activities in the Statement of Net Position were reported differently because:

See accompanying Notes to the Basic Financial Statements 26 Capital Projects
and Equipment Other
General Capital Projects Governmental
Fund Fund Funds Total
Revenues:

Taxes 29,869,656 $ - $ 1,841,573 $ 31,711,229 $
Licenses and permits 771,615 - - 771,615
Intergovernmental 94,978 - 2,100,999 2,195,977
Charges for services 4,740,324 - 112,846 4,853,170
Use of money and property 171,832 - 63,229 235,061
Fines and forfeitures 1,816,837 - - 1,816,837
Contributions 66,528 - 40,000 106,528
Miscellaneous 3,431,013 - - 3,431,013
Total revenues - 40,962,783 4,158,647 45,121,430
Expenditures:

Current:

General government 6,649,907 - 63,118 6,713,025
Public safety 21,313,233 - 582,195 21,895,428
Community development 1,182,614 - 1,021,220 2,203,834
Community services 1,131,906 - - 1,131,906
Public works 5,550,256 - 198,555 5,748,811
Capital outlay - 1,869,850 1,569,391 3,439,241
Debt service:

Principal retirement 76,920 - 420,000 496,920
Interest and fiscal charges 14,890 - 55,589 70,479
Total expenditures 1,869,850 35,919,726 3,910,068 41,699,644 Revenues over (under) expenditures 5,043,057 (1,869,850) 248,579 3,421,786 Other Financing Sources (Uses):

Transfers in 460,957 1,772,505 625,192 2,858,654
Transfers out (2,805,473) - (851,966) (3,657,439)
Proceed from sale of property 119,000 - - 119,000
Total other financing sources (uses): (2,225,516) 1,772,505 (226,774) (679,785) Net change in fund balances 2,817,541 (97,345) 21,805 2,742,001 Fund Balances:

Beginning of Year 27,179,391 (138,577) 4,877,865 31,918,679 End of Year $ 29,996,932 $ (235,922) $ 4,899,670 $ 34,660,680 City of Seal Beach
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2021
See accompanying Notes to the Basic Financial Statements 27 Net Change in Fund Balances - Total Governmental Funds $ 2,742,001 Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds.

Capital outlay, net of $135,916 reported in Internal Service Fund $ 2,685,563 Depreciation, net of $233,578 reported in Internal Service Fund (2,510,920) Net effect on disposal of capital assets, net of $9,794 reported in Internal Service Fund - 174,643 Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. 496,920 Interest expense on long-term debt is reported in the Statement of Activities, but do not require the use of current financial resources. Therefore, interest is reported as an expenditure in governmental funds. This amount represents the change in accrued interest from the prior year. 12,577 Claims and judgment changes reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 4,118 Compensated absences were reported in the Government-Wide Statement of Activities, but they did not require the use of current financial resources. Therefore, compensated absences were not reported as expenditures in the governmental funds. 105,776 Certain pension income (expenses) reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds, net of contribution made after the measurement period in the amount of $4,296,222. (1,647,837)
Certain other postemployment benefits income (expenses) reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds, net of contribution made after the measurement period in the amount of $876,367. 378,183
Revenues reported as unavailable revenue in the governmental funds and recognized in the Statement of Activities. 101,232
Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and equipment replacement, to individual funds. The net revenue of the Internal Service Funds is reported in governmental activities. 238,759

Change in net position of governmental activities $ 2,606,372 Governmental activities in the Statement of Activities were reported differently because:

City of Seal Beach
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, For the Year Ended June 30, 2021
and Changes in Fund Balances to the Government-Wide Statement of Activities See accompanying Notes to the Basic Financial Statements 28 PROPRIETARY FUND FINANCIAL STATEMENTS
29 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds
ASSETS
Current Assets:

Cash and investments 7,626,272 $ 10,673,247 $ 18,299,519 $ 893,395 $ Accounts receivable 456,585 610,887 1,067,472 7,475
Prepaid items 15,731 15,731 31,462 -
Total Current Assets 11,145,563 8,252,890 19,398,453 900,870 Noncurrent Assets:

Restricted cash 25,082 - 25,082 -
Capital assets, not being depreciated 1,004,720 264,575 1,269,295 - Capital assets, net of accumulated depreciation 15, 19,147,977 376,299 34,524,276 908,943 Total capital assets 16,381,019 19,412,552 35,793,571 908,943 Total Noncurrent Assets 19,412,552 16,406,101 35,818,653 908,943 Total Assets 30,558,115 24,658,991 55,217,106 1,809,813

DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding - 96,563 96,563 -
Pension related items 453,518 350,696 804,214 -
Other postemployment benefits related items 53,377 42,701 96,078 - Total Deferred Outflows of Resources 489,960 506,895 996,855 - (Continued)
Enterprise Funds
June 30, 2021
Proprietary Funds
Statement of Net Position
City of Seal Beach
Business-Type Activities
See accompanying Notes to the Basic Financial Statements 30 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds

LIABILITIES
Current Liabilities:

Accounts payable 1,014,129 32,472 1,046,601 51,244
Accrued liabilities 57,215 43,238 100,453 -
Accrued interest 1,303 53,334 54,637 -
Retention payable 3,196 - 3,196 -
Deposits payable 101,789 7,270 109,059 -
Compensated absences, due within one year 16,664 21,002 37,666 - Long-term debt, due within one year 84,436 389,460 473,896 - Total Current Liabilities 546,776 1,278,732 1,825,508 51,244 Noncurrent Liabilities:

Compensated absences, due in more than one year 61,807 22,546 84,353 - Long-term debt, due in more than one year 485,509 4,146,416 4,631,925 - Aggregate net pension liabilities 2,135,754 1,651,535 3,787,289 - Net other postemployment benefits liabilities 294,960 235,968 530,928 - Total Noncurrent Liabilities 6,056,465 2,978,030 9,034,495 - Total Liabilities 6,603,241 4,256,762 10,860,003 51,244

DEFERRED INFLOW OF RESOURCES
Pension related items 85,670 66,247 151,917 -
Other postemployment benefits related items 18,508 14,806 33,314 - Total Deferred Inflows of Resources 81,053 104,178 185,231 -

NET POSITION
Net investment in capital assets 15,811,074 14,973,239 30,784,313 908,943 Restricted 25,082 - 25,082 -
Unrestricted 4,968,790 9,390,542 14,359,332 849,626
Total Net Position $ 20,804,946 $ 24,363,781 $ 45,168,727 $ 1,758,569 Enterprise Funds
City of Seal Beach
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2021
Business-Type Activities
See accompanying Notes to the Basic Financial Statements 31 This page intentionally left blank.
32 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds
OPERATING REVENUES:

Sales and service charges 4,953,474 $ 2,885,699 $ 7,839,173 $ - $ Miscellaneous 4,009 - 4,009 -
Total Operating Revenues 2,885,699 4,957,483 7,843,182 - OPERATING EXPENSES:

Personnel expenses 1,595,410 1,139,973 2,735,383 -
Operating expenses 3,890,826 246,628 4,137,454 40,447
Amortization and depreciation expenses 544,818 1,100,937 1,645,755 233,578 Total Operating Expenses 2,487,538 6,031,054 8,518,592 274,025 OPERATING INCOME (LOSS) 398,161 (1,073,571) (675,410) (274,025) NONOPERATING INCOME (LOSS):

Interest revenues 104,808 152,037 256,845 -
Interest expenses (4,440) (164,263) (168,703) -
Gain on sale of assets 1,802 - 1,802 38,378
Total Nonoperating Income (Loss) (12,226) 102,170 89,944 38,378 INCOME (LOSS) BEFORE TRANSFERS 385,935 (971,401) (585,466) (235,647) TRANSFERS:

Transfers in 683,442 19,437 702,879 474,406
Transfers out (324,500) (54,000) (378,500) -
Total Transfers (34,563) 358,942 324,379 474,406
CHANGES IN NET POSITION 351,372 (612,459) (261,087) 238,759 NET POSITION:

Beginning of the Year 21,417,405 24,012,409 45,429,814 1,519,810 End of the Year $ 20,804,946 $ 24,363,781 $ 45,168,727 $ 1,758,569 Enterprise Funds
Business-Type Activities
For the Year Ended June 30, 2021
Statement of Revenues, Expenses, and Changes in Net Position City of Seal Beach
Proprietary Funds
See accompanying Notes to the Basic Financial Statements 33 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds

CASH FLOWS FROM OPERATING
ACTIVITIES:

Cash received from customers and users 5,064,385 $ 2,845,629 $ 7,910,014 $ - $ Cash paid to suppliers for goods and services (289,190) (3,956,987) (4,246,177) (30,634) Cash paid to employees for services (1,558,033) (1,104,218) (2,662,251) - Net cash provided by (used in)
operating activities (450,635) 1,452,221 1,001,586 (30,634)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash transfers in 683,442 19,437 702,879 474,406
Cash transfers out (324,500) (54,000) (378,500) -
Net cash provided by (used in) noncapital
financing activities 358,942 (34,563) 324,379 474,406

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (433,276) (69,880) (503,156) (135,916) Proceed on disposal of assets 10,737 - 10,737 40,697
Principal paid on capital debt (84,436) (374,279) (458,715) - Interest paid on debt (4,412) (168,304) (172,716) -
Net cash (used in) capital and related
financing activities (511,387) (612,463) (1,123,850) (95,219)

CASH FLOWS FROM INVESTING
ACTIVITIES:

Interest received 104,808 152,037 256,845 -
Net cash provided by investing activities 104,808 152,037 256,845 - Net change in cash and cash equivalents (498,272) 957,232 458,960 348,553 CASH AND CASH EQUIVALENTS:

Beginning of year 8,149,626 9,716,015 17,865,641 $ 544,842 End of year $ 10,673,247 7,651,354 $ 18,324,601 $ 893,395 $

RECONCILIATION OF CASH AND CASH
EQUIVALENTS:

Cash and investments 7,626,272 $ 10,673,247 $ 18,299,519 $ 893,395 $ Restricted cash 25,082 - 25,082 -
Total cash and cash equivalents $ 10,673,247 7,651,354 $ 18,324,601 $ 893,395 $ (Continued)
Enterprise Funds
City of Seal Beach
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2021
Business-Type Activities
See accompanying Notes to the Basic Financial Statements 34 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by (Used in)
Operating Activities:

Operating income (loss) (1,073,571) $ 398,161 $ (675,410) (274,025) $ Adjustments to reconcile operating income
(loss) to net cash provided by (used in)
operating activities:

Amortization and depreciation expenses 544,818 1,100,937 1,645,755 233,578 Changes in assets and liabilities:
(Increase)/decrease in accounts receivables 69,757 (40,070) 29,687 - (Increase)/decrease in prepaid items (8,606) (8,606) (17,212) - (Increase)/decrease in deferred outflows of
resources related to pensions 18,705 8,988 27,693 -
(Increase)/decrease in deferred outflows of
resources related to OPEB (10,021) (8,017) (18,038) -
Increase/(decrease) in accounts payable (57,555) (33,956) (91,511) 9,813 Increase/(decrease) in accrued liabilities (1,734) 4,939 3,205 - Increase/(decrease) in deposits payable 37,145 - 37,145 - Increase/(decrease) in compensated absences 2,023 (17,141) (15,118) - Increase/(decrease) in net pension liabilities 140,383 131,697 272,080 - Increase/(decrease) in net OPEB liabilities (4,953) (3,962) (8,915) - Increase/(decrease) in deferred inflows of
resources related to pensions (101,220) (76,105) (177,325) - Increase/(decrease) in deferred inflows of
resources related to OPEB (5,806) (4,644) (10,450) -
Net cash provided by (used in) operating
activities $ (450,635) $ 1,452,221 $ 1,001,586 $ (30,634) Enterprise Funds
City of Seal Beach
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2021
Business-Type Activities
See accompanying Notes to the Basic Financial Statements 35 This page intentionally left blank.
36 FIDUCIARY FUND FINANCIAL STATEMENTS
37 This page intentionally left blank.
38 Successor Agency
Custodial Private-purpose
Funds Trust Fund
ASSETS
Cash and investments $ 16,789 864,633 $
Receivables:

Accounts - 25,000
Restricted investments with fiscal agent 947,949 -
Total Assets 16,789 1,837,582

LIABILITIES
Current liabilities:

Accounts payable 870 75,164
Deposit payable - 466,682
Interest payable - 111,862
Total current liabilities 870 653,708
Total liabilities 870 653,708

NET POSITION
Restricted
For individual, organization and other government $ 15,919 1,183,874 $ Total fiduciary net position
June 30, 2021
Statement of Fiduciary Net Position
City of Seal Beach
Fiduciary Funds
See accompanying Notes to the Basic Financial Statements 39 Successor Agency
Private-purpose
Custodial Fund Trust Fund
ADDITIONS:

Redevelopment property tax trust fund - $ 20,484 $
Assessment revenue collected - 807,094
Investment income 94 4,050
Total Additions 20,578 811,144
DEDUCTIONS:

Administrative expenses 21,835 -
Interest expense 11,319 -
Payment of special assessment district debt service 782,081 - Total Deductions 33,154 782,081
Change in Net Position (12,576) 29,063
NET POSITION:

Beginning of Year, as restated (Note 14) 1,154,811 28,495 End of Year $ 15,919 1,183,874 $
City of Seal Beach
Statement of Change in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2021
See accompanying Notes to the Basic Financial Statements. 40 41

NOTES TO THE BASIC FINANCIAL STATEMENTS
42 This page intentionally left blank.

City of Seal Beach
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2021
43 Page
Note 1 – Summary of Significant Accounting Policies ..................................................................................... 45 A. Financial Reporting Entity .............................................................................................................. 45 B. Basis of Accounting and Measurement Focus ................................................................................ 46 C. Cash and Investments ..................................................................................................................... 48 D. Fair Value Measurement ................................................................................................................. 49 E. Property Taxes Receivable ............................................................................................................. 49 F. Prepaid Items .................................................................................................................................. 49 G. Interfund Transactions .................................................................................................................... 49 H. Capital Assets ................................................................................................................................. 50 I. Unearned and Unavailable Revenue ............................................................................................... 50 J. Compensated Absences Payable ..................................................................................................... 50 K. Claims Payable ............................................................................................................................... 51 L. Pensions .......................................................................................................................................... 51 M. Other Postemployment Benefits ..................................................................................................... 51 N. Deferred Outflows/Inflows of Resources ....................................................................................... 52 O. Long-Term Liabilities ..................................................................................................................... 52 P. Net Position .................................................................................................................................... 52 Q. Fund Balances ................................................................................................................................. 52 R. Spending Policy .............................................................................................................................. 53 S. Use of Estimates ............................................................................................................................. 53 T. Tax Abatement ................................................................................................................................ 53 U. Implementation of New GASB Pronouncements ........................................................................... 54 Note 2 – Cash and Investments .......................................................................................................................... 54 A. Demand Deposits ............................................................................................................................ 54 B. Investments Authorized by the California Government Code and the City's Investment Policy ............................................................................................................ 55 C. Investments Authorized by Debt Agreements ................................................................................ 55 D. Fair Value Measurement ................................................................................................................. 56 E. Risk Disclosures ............................................................................................................................. 57 F. Investment in Local Agency Investment Fund (“LAIF”) ............................................................... 58 Note 3 – Interfund Transactions ........................................................................................................................ 59 A. Due From/To Other Funds .............................................................................................................. 59 B. Transfers ......................................................................................................................................... 59 Note 4 – Capital Assets ........................................................................................................................................ 60 Note 5 – Long-Term Liabilities .......................................................................................................................... 62 A. Governmental Activities ................................................................................................................. 62 B. Business-Type Activities ................................................................................................................ 63 C. Fiduciary Activities ........................................................................................................................ 66 City of Seal Beach
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2021
44 Page
Note 6 – Non-City Obligations ........................................................................................................................... 66 A. Heron Pointe Community Facilities District No 2002-01 ............................................................. 66 B. Pacific Gateway Business Center Community Facilities District No 2005-01 ............................. 67 Note 7 – Risk Management and Self Insurance Program ............................................................................... 67 A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement ..................................... 67 B. Self-Insurance Programs of the Authority ..................................................................................... 67 C. Purchased Insurance ...................................................................................................................... 68 D. Adequacy of Protection ................................................................................................................. 69 E. Claims Activity .............................................................................................................................. 69 Note 8 – Defined Benefit Pension Plans ............................................................................................................ 70 A. General Information about the Pension Plan ................................................................................. 71 B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension ............................................................. 73 Note 9 – Other Postemployment Benefits (“OPEB”) Plan .............................................................................. 77 A. General Information about the OPEB Plan .................................................................................... 78 B. Net OPEB Liability ........................................................................................................................ 78 C. Changes in the Net OPEB Liability ............................................................................................... 79 D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB ................................................................................................... 80 Note 10 – Classification of Fund Balances ........................................................................................................ 81 Note 11 – Commitments and Contingencies ..................................................................................................... 82 A. Commitments ................................................................................................................................. 82 B. Contingencies ................................................................................................................................ 82 C. Grants ............................................................................................................................................. 82 Note 12 – Individual Fund Disclosure – Deficit Fund Balances ..................................................................... 82 Note 13 – Subsequent Events ............................................................................................................................. 82 A. Seal Beach Historic Resources Foundation ................................................................................... 82 B. Successor Agency Private Purpose Trust Fund ............................................................................. 82 Note 14 – Restatement of Beginning Net Position ............................................................................................ 83 City of Seal Beach
Notes to the Basic Financial Statements
For the Year Ended June 30, 2021
45 Note 1 – Summary of Significant Accounting Policies
The basic financial statements of the City of Seal Beach, California, (the “City”) have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the City’s significant policies:

A. Financial Reporting Entity
The City was incorporated on October 27, 1915, under the laws of the State of California and enjoys all the rights and privileges applicable to a charter city. It is governed by an elected five-member council. As required by U.S.

GAAP these financial statements present the City (the primary government and its component units). The component units discussed below are included in the reporting entity because of their operational or financial relationships with the City.

In evaluating how to define the City for financial reporting purposes, management has considered all potential component units. The primary criteria for including a potential component unit within the reporting entity are the governing body’s financial accountability and a financial benefit or burden relationship and whether it is misleading to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship, if it appoints a voting majority of an organization’s governing body and it is able to impose its will on the organization, or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government. A primary government may also be financially accountable if an organization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government.

Blended Component Units:

Management determined that the following entities should be reported as blended component units based on the criteria above. Although the following entities are legally separate from the City, they have been “blended” as though they are part of the City because the component units’ governing bodies are substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component units; and management of the City has operational responsibilities for the component units; and/or the component units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclusively, benefits the City, even though they do not provide services directly to it.

The Seal Beach Public Financing Authority (the “Authority”) was formed May 8, 2000, pursuant to Articles 1 through 4 of Chapter 5, Division 7, Title 1 of the California Government Code, to create a joint exercise of powers authority between the City and the former Seal Beach Redevelopment Agency. The City Council of the City is the governing board. Management of the primary government has operational responsibility for the blended component unit. The Authority was formed to undertake the financing of public capital improvements.

On June 12, 2017, the City Council adopted Resolution No. 6741, to create the Parking Authority, and the Parking Authority became a new member to the Authority. On the same date, the Successor Agency Board of Directors adopted Resolution No. SA 17-3, approving the Successor Agency’s withdrawal of its Authority membership. On June 28, 2017, the Oversight Board to the Successor Agency adopted Resolution No. OB17-03, approving such withdrawal. Resolution No. OB17-03 became effective upon the State of California Department of Finance’s approval, received by the Successor Agency on August 18, 2017. The Authority does not issue separate financial statements.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
46 Note 1 – Summary of Significant Accounting Policies (Continued) A. Financial Reporting Entity (Continued)
Blended Component Units (Continued):

The Seal Beach Parking Authority (“the Parking Authority”) was formed on June 12, 2017, pursuant to the Part 2 of Division 18 of the California Streets and Highway Code. The Parking Authority is governed by the Board of Director which is the City Council of the City of Seal Beach. The Parking Authority is blended into general fund.

The Parking Authority does not issue separate financial statements.

The Seal Beach Cable Communications Foundation (the “Foundation”) was organized under the laws of the State of California on August 27, 1984, to foster and promote civic advancement through activities related to cable communications, community promotion, and other public services deemed appropriate by the foundation. The Foundation is governed by a board of directors consisting of seven members, all appointed by the City Council of the City of Seal Beach. The Foundation is blended into special revenue fund. The Foundation does not issue separate financial statements.

B. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate. City resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.

Government-Wide Financial Statements
The government-wide financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Fiduciary activities of the City are not included in these statements.

Certain types of transactions are reported as program revenues for the City in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the statement of net position have been eliminated. In the statement of activities, internal service fund transactions have been included in the governmental activities. The following interfund activities have been eliminated:
 Due from and to other funds, which are short-term loans within the primary government  Transfers in and out, which are flows of assets between funds without the requirement for repayment City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
47 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Governmental Fund Financial Statements (Continued)
All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets, current liabilities, and deferred inflows of resources are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances presents increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in fund balances. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

Revenues are recorded when received in cash, except those revenues subject to accrual (generally 60 days after year-end) which are recognized when due. The primary revenue sources that have been treated as susceptible to accrual by the City are property taxes, intergovernmental revenues and other taxes. Business license fees are recorded as received. Expenditures are recorded in the accounting period in which the related fund liability is incurred.

Reconciliations of the fund financial statements to the government-wide financial statements are provided to explain the differences.

The City reports the following major Governmental Fund:

General Fund – The General Fund is the City’s principal operating fund. It accounts for all revenues and expenditures used to finance the traditional services associated with a municipal government except those required to be accounted for in another fund.

Capital Projects and Equipment Capital Projects Fund – To account for major capital projects with various revenues sources but exclude the Water and Sewer Capital Improvement Fund. These sources get transferred into the Capital Projects and Equipment Projects Fund.

Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Net Position, and a Statement of Cash Flows for each major Proprietary Fund.

Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets, deferred outflows of resources, liabilities (whether current or noncurrent), and deferred inflows of resources are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Fund Net Position presents increases (revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
48 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Proprietary Fund Financial Statements (Continued)
The City reports the following major Proprietary Funds:

Water Utility Enterprise Fund – This fund accounts for the capital, operation and maintenance of the City’s water distribution system.

Sewer Utility Enterprise Fund – This fund accounts for the financial transactions of the City’s waste water collection system.

A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements. The City has Vehicle Replacement Internal Service Fund that provides services directly to other City funds.

Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds represent custodial funds and private purpose trust funds. Both custodial funds and the private purpose trust funds are accounted for on the full accrual basis of accounting where the assets associated with the activity are controlled by the City and the assets are not derived 1) solely from the government’s own-source revenues or 2) from government-mandated nonexchange transactions or voluntary nonexchange transactions.

The City reports the following fiduciary funds:

Custodial Funds – To accounts for assets for the benefit of individuals and the City does not have administrative involvement with the assets or direct financial involvement with the assets or for the benefit of organizations or other governments that are not part of the City. In addition, the assets are not derived from the City’s provision of goods or services to those individuals, organizations, or other governments. The custodial funds account for the deposits for individuals and organizations and the debt service and related expenses for the Heron Pointe and Pacific Gateway Community Facility Districts.

Private-purpose Trust Fund – This fund accounts for the assets and liabilities of the former redevelopment agency through a trust equivalent and its apportioned redevelopment property tax trust fund to pay estimated installment payments of enforceable obligations until obligations of the former redevelopment agency are paid in full and assets have been liquidated. All outstanding debt were paid off during the year ended June 30, 2021.

C. Cash and Investments
The City’s cash and cash equivalents are comprised of cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. All cash and investments of proprietary funds are held in the City’s investment pool. These cash pools have the general characteristics of a demand deposit account, therefore, all cash and investments in the proprietary funds are considered cash and cash equivalents for statement of cash flows purposes.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
49 Note 1 – Summary of Significant Accounting Policies (Continued) D. Fair Value Measurement
Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

The three levels of the fair value measurement hierarchy are described below:
 Level 1 – Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
 Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets or liabilities through corroboration with market data at the measurement date.  Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

E. Property Taxes Receivable
Property tax revenue is recognized in the fiscal year for which the taxes have been levied providing they become available. Available means due, or past due and receivable within the current period and collected within the current period or expected to be collected soon enough thereafter (not to exceed 60 days) to be used to pay liabilities in the current period.

Under California law, property taxes are assessed and collected by the counties at up to 1% of assessed value, plus other increases approved by the voters. The property taxes go into a pool, and are then allocated to the cities based on complex formulas.

The property tax calendar is as follows:

Lien Date: January 1
Levy Date: July 1
Due Date: First Installment - November 1
Second Installment - February 1
Delinquent Date: First Installment - December 11
Second Installment - April 11
F. Prepaid Items
Prepaid items are payments made to vendors for services that will benefit periods beyond the fiscal year ended using purchase method.

G. Interfund Transactions
Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due from/to other funds” (i.e., current portion of interfund loans).

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
50 Note 1 – Summary of Significant Accounting Policies (Continued) H. Capital Assets
Capital assets, which include land, buildings, improvements, equipment, furniture, and infrastructure assets (e.g., roads, sidewalks, and similar items), are recorded at historical cost or estimated historical if purchased or constructed. Donated capital assets are valued at the estimated acquisition value on the date donated. City policy has set the capitalization threshold for reporting capital assets with an initial, individual cost of more than $5,000 and an estimated useful life of one year or more.

The City defines infrastructure as the basic physical assets that allow the City to function. The assets include street network, street appurtenances, and storm drains.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method.

The lives used for depreciation purposes are as follows:

Assets Years
Building and Improvements 20-99
Machinery and Equipment 5-50
Vehicles 4-10
Infrastructure 20-60
I. Unearned and Unavailable Revenue
Unearned revenue is reported for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues in the government-wide financial statements are grant revenues received in advance.

In the governmental fund financial statements, unavailable revenue is reported when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City reports unavailable revenue when an asset is reported in governmental fund financial statements but the revenue is not available.

J. Compensated Absences Payable
City employees have vested interest in varying levels of vacation, sick leave and compensatory time based on their length of employment. It is the policy of the City to pay all accumulated vacation pay and all or a portion of sick pay when an employee retires or terminates. The long-term amount is included as a liability in the governmental activities of the government-wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.

All of the liability for compensated absences applicable to proprietary funds is reported in those funds.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
51 Note 1 – Summary of Significant Accounting Policies (Continued) K. Claims Payable
The City records a liability to reflect an actuarial estimate of ultimate uninsured losses for both general liability claims (including property damage claims) and workers’ compensation claims. The estimated liability for workers’ compensation claims and general liability claims includes “incurred but not reported” (“IBNR”) claims.

There is no fixed payment schedule to pay these liabilities.

L. Pensions
For purposes of measuring the aggregate net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

The following timeframes are used for pension reporting:

Valuation Date June 30, 2019
Measurement Date June 30, 2020
Measurement Period July 1, 2019 to June 30, 2020
Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

M. Other Postemployment Benefits
For purposes of measuring the net other postemployment benefits (“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 plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

The following timeframes are used for pension reporting:

Valuation Date June 30, 2019
Measurement Date June 30, 2020
Measurement Period July 1, 2019 to June 30, 2020
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
52 Note 1 – Summary of Significant Accounting Policies (Continued) N. Deferred Outflows/Inflows of Resources
The financial statements report separate sections for deferred outflows of resources, and deferred inflows of resources, when applicable.

Deferred Outflows of Resources represent outflows of resources (consumption of net position) that apply to future periods and that, therefore, will not be recognized as an expense until that time.

Deferred Inflows of Resources represent inflows of resources (acquisition of net position) that apply to future periods and that, therefore, are not recognized as revenue until that time.

O. Long-Term Liabilities
Long-term debt and other long-term liabilities are reported as liabilities in the Statement of Net Position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method.

Bonds payable are reported net of the applicable bond premium or discount.

P. Net Position
In the government-wide financial statements and proprietary fund financial statements, net position is classified as follows:

Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation, capital related debt and deferred charges, and retention payable.

Restricted – This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

Unrestricted – This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

Q. Fund Balances
In the governmental fund financial statements, fund balances are classified as follows:

Nonspendable – Nonspendable fund balances include amounts that cannot be spent because they are not in a spendable form, such as unrestricted loans receivable or prepaid items, or because resources legally or contractually must remain intact.

Restricted – Restricted fund balances are the portion of fund balance that have externally enforceable limitations on their usage through legislation or limitations imposed by creditors, grantor, laws and regulations of other governments or enabling legislation.

Committed – Committed fund balances are self-imposed limitations by the highest level of decision-making authority, namely the City Council, prior to the end of the reporting period. City Council adoption of a resolution is required to commit resources or to rescind the commitment.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
53 Note 1 – Summary of Significant Accounting Policies (Continued) Q. Fund Balances (Continued)
Assigned – Assigned fund balances are limitations imposed by management based on the intended use of the funds. Modifications or rescissions of the constraints can be removed by the same type of action that limited the use of the funds. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has authorized the Finance Director for that purpose.

Unassigned – Unassigned fund balances represent the residual net resources in excess of the other classifications. The general fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than general fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

R. Spending Policy
Government-Wide Financial Statements and the Proprietary Fund Financial Statements When expenses are incurred for purposes for which both restricted and unrestricted components of net position are available, the City’s practice is to apply the restricted component of net position first, then use the unrestricted component of net position as needed.

Governmental Fund Financial Statements
When expenditures are incurred for purposes for which both restricted and unrestricted fund balances are available, the City’s practice is to apply restricted fund balances first, then use unrestricted fund balances as needed.

When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses the unrestricted resources in the following order, except for instances wherein an ordinance specifies the fund balance:
 Committed
 Assigned
 Unassigned
S. Use of Estimates
The preparation of the basic financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

T. Tax Abatement
Tax abatement is a reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which (a) one or more governments promise to forgo tax revenues to which they are otherwise entitled and (b) the individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments. City policy has set the threshold for disclosing tax abatement agreements greater than $50,000.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
54 Note 1 – Summary of Significant Accounting Policies (Continued) U. Implementation of New GASB Pronouncements
During fiscal year ended June 30, 2021, the City has implemented the GASB Statement No. 84 Fiduciary Activities. This statement establishes standards relating accounting and financial reporting for identifying and financial reporting of fiduciary activities. Those provisions are effective for reporting periods beginning after December 15, 2019, as amended by GASB Statement No. 95. See Note 14 for restatement of beginning fiduciary net position as result of implementation.

Note 2 – Cash and Investments
The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds.

The City had the following cash and investments at June 30, 2021:

Government-Wide Statement of
Statement of Fiduciary
Net Position Net Position Total
Cash and investments 50,875,979 $ 881,422 $ 51,757,401 $ Restricted cash and investment
with fiscal agent 656,164 947,949 1,604,113
Total cash and investments 51,532,143 $ 1,829,371 $ 53,361,514 $ The City’s cash and investments at June 30, 2021 in more detail:

Cash and Investments:

Petty cash 8,850 $
Demand deposits 1,825,097
Restricted cash 29,729
Investments 51,497,838
Total cash investments 53,361,514 $
A. Demand Deposits
The carrying amounts of the City’s demand deposits were $1,825,097 at June 30, 2021. Bank balances at that date were $2,213,333, the total amount of which was insured or collateralized with accounts held by the pledging financial institutions in the City’s name as discussed below.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City’s name.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
55 Note 2 – Cash and Investments (Continued)
A. Demand Deposits (Continued)
The fair value of pledged securities must equal at least 110% of the City’s cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The City, however, has not waived the collateralization requirements.

B. Investments Authorized by the California Government Code and the City's Investment Policy The table below identifies the investment types that are authorized by the City's investment policy and the California Government Code. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.

Maximum Maximum
Authorized Investment Type Maturity Portfolio* One Issuer* U.S. Treasury securities 5 years 100% None
U.S. agency and U.S. government sponsored
enterprise securities 5 years 20% None
Obligation of the State of California
or any local agency 5 years 100% None
Registered treasury notes or bonds of any
of the 49 states in addition to California 5 years 100% None Bankers' acceptance 180 days 40% 5%
Commercial paper 270 days 25% 10%
Nonnegotiable certificate of deposit 5 years 100% None
Negotiable certificate of deposit 5 years 30% None
Medium term notes 5 years 30% 10%
Money market mutual funds 5 years 10% 10%
Local Agency Investment Fund (LAIF) None 100% 50 Million/account *The table is based on state law requirements or investment policy requirements, whichever is more restrictive.

C. Investments Authorized by Debt Agreements
Maximum Maximum
Maximum Percentage of Investment in
Authorized Investment Type Maturity Portfolio* One Issuer* U.S. Treasury securities None None None
U.S. agency and U.S. government sponsored
enterprise securities None None None
Bankers' acceptance 180 days None 30%
Commercial paper 270 days None None
Money market mutual funds 5 years None None
Investment contracts 30 years None None
Local Agency Investment Fund (LAIF) None None None
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
56 Note 2 – Cash and Investments (Continued)
C. Investments Authorized by Debt Agreements (Continued) Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table on the following page identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk, and concentration of credit risk.

D. Fair Value Measurement
At June 30, 2021, investments are reported at fair value. The following table presents the fair value measurement of investments on a recurring basis and the levels within the fair value hierarchy in which the fair value measurements fall at June 30, 2021:

Quoted Prices Significant
in Active Other
Markets for Observable
Identical Assets Inputs
Investment Type Value (Level 1) (Level 2) Cash Equivalent Investments:

US Treasury bonds/notes $ 11,755,902 $ 11,755,902 $ - $ - Supra-National Agency Note 214,382 - 214,382 -
US government sponsored enterprise
securities 9,760,526 - 9,760,526 -
Municipal bonds 1,213,600 - 1,213,600
Corporate note 4,431,190 - 4,431,190 -
Negotiable certificates of deposit 1,759,868 - 1,759,868 - LAIF 20,787,986 - - 20,787,986
Investments with Fiscal Agent:

Money Market Mutual Funds 1,574,384 - - 1,574,384
Total investments $ 51,497,838 $ 11,755,902 $ 17,379,566 $ 22,362,370 Fair Value Measurement
Investments in municipal bonds/notes, U.S. government sponsored enterprise securities, and corporate note are valued based on institutional bond quotes. Investments in negotiable certificates of deposits are valued based on certificate of deposits pricing.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
57 Note 2 – Cash and Investments (Continued)
E. Risk Disclosures
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment is, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. The sensitivity of the fair values of the City's investments (including investments held by bond trustees) to market interest rate fluctuations is as follows:

Investment Type Amount Less than 1 1 to 2 2 to 3 3 to 4 4 to 5 Investments:

US Treasury bonds/notes $ 11,755,902 $ 937,430 $ 2,386,009 $ 3,005,937 $ 2,984,511 $ 2,442,015 Supra-National Agency Note 214,382 214,382 - - - -
US government sponsored
enterprise securities 9,760,526 496,629 2,534,413 2,704,116 1,918,318 2,107,050 Municipal bonds 1,213,600 283,168 543,457 386,975
Corporate note 4,431,190 710,235 1,267,184 699,062 1,654,491 100,218 Negotiable certificates of deposit 1,759,868 277,481 1,482,387 - - LAIF 20,787,986 20,787,986 - - - -
Investments with Fiscal Agent:

Money Market Mutual Funds 1,574,384 1,574,384 - - - -
Total investments $ 51,497,838 $ 24,784,145 $ 7,884,375 $ 6,692,283 $ 7,100,777 $ 5,036,258 Investment Maturities (in Years)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code or the City's investment policy, or debt agreements, and the actual rating as of fiscal year end for each investment type.

Minimum
Legal
Investment Type Rating Total AAA AA- to AA+ A- to A+ BBB Unrated Investments:

US Treasury bonds/notes N/R 11,755,902 $ $ - 11,755,902 $ - $ - $ - $ Supra-National Agency Note 214,382 - 214,382 - - -
US government sponsored
enterprise securities A 9,760,526 9,760,526 - - - -
Municipal bonds 1,213,600 194,507 959,292 59,801
Corporate note A 4,431,190 609,609 - 3,202,827 618,754 - Negotiable certificates of deposit N/R 1,759,868 612,914 - 1,146,954 - - LAIF N/A 20,787,986 - - - 20,787,986 -
Investments with Fiscal Agent:

Money Market Mutual Funds N/R 1,574,384 1,574,384 - - - - Total investments $ 51,497,838 $ 23,499,701 $ 2,181,815 $ 4,409,582 $ 618,754 $ 20,787,986 N/R - Not Required by the City's investment policy
N/A - Not applicable
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
58 Note 2 – Cash and Investments (Continued)
E. Risk Disclosures (Continued)
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The City’s investment in Fannie Mae Agency Note and Freddie Mac notes in amounts of $5,425,892 and $3,038,740 represented 10.9% and 6.1% of total City investments, respectively.

Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that in the event of the failure of the counterparty (e.g., broker dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local government units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. At June 30, 2021, the City deposits (bank balances were insured by the Federal Depository Insurance Corporation up to $250,000 and the remaining balances were collateralized under California law.

For investments identified herein as held by bond trustee, the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government.

F. Investment in Local Agency Investment Fund (“LAIF”)
The City is a participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City’s investments with LAIF at June 30, 2021 included a portion of the pool funds invested in Structured Notes and Asset-Backed Securities, which included the following:

Structured Notes - debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options.

Asset-Backed Securities - generally, mortgage-backed securities that entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (for example, collateralized mortgage obligations), or credit card receivables.

As of June 30, 2021, the City had $20,787,986 invested in LAIF, which had invested 2.31% of the pool investment funds in Structured Notes, Medium-term Asset-Backed Securities, and Short-term Asset Backed Commercial Paper. LAIF is reported at amortized costs, which approximates fair value.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
59 Note 3 – Interfund Transactions
A. Due From/To Other Funds
At June 30, 2021, the City had the following due from/to other funds:

Due To Other Funds
Nonmajor Governmental Funds
Capital Projects and Equipment Capital Projects Fund
Total
$ 186,197
$ 259,576
Due From Other Funds
General Fund
73,379
The above amounts resulted from deficits in the pooled cash account.

B. Transfers
During the year ended June 30, 2021, the City had the following transfers:

Nonmajor Water Utility Sewer Utility
General Governmental Enterprise Enterprise
Transfers in Fund Funds Fund Fund Total
General Fund $ - $ 82,457 $ 324,500 $ 54,000 $ 460,957
Capital Projects and Equipment
Capital Projects Fund 769,509 1,002,996 - - 1,772,505
Nonmajor Governmental Funds 625,192 - - - 625,192
Water Utility Enterprise Fund 683,442 - - - 683,442
Sewer Utility Enterprise Fund 19,437 - - - 19,437
Internal Service Fund 474,406 - - - 474,406
Total $ 851,966 2,805,473 $ 324,500 $ 54,000 $ 4,035,939 $ Transfers out
In general, transfers are used to 1) use unrestricted revenues collected in one fund to finance various programs accounted for in other funds in accordance with budgetary authorizations, and 2) to transfer to the General Fund to fund administration services.

Transfers totaling $378,500 from the Water and Sewer Utility Enterprise Funds were made to the General Fund to provide funding for certain administrative costs. Transfers of $82,457 from Nonmajor Governmental Funds (Gas Tax, CFD Loan, and Pacific Gateway) were made to the General Fund for non-capital expenditures.

The General Fund and the Nonmajor Governmental Funds transferred $1,002,996 and $769,509 to the Capital Projects and Equipment Capital Projects Fund to pay for capital projects.

The General Fund transferred a total of $625,192 to the Nonmajor Governmental Funds (City Debt Service Debt Service Fund) for debt service-related costs.

The General Fund transferred $683,442 to the Water Utility Enterprise Funds to repay amounts paid on behalf of the General Fund.

The General Fund transferred $19,437 to the Sewer Project Fund to fund capital project costs, and $474,406 to the Internal Service Fund to start the newly formed Information Technology Internal Service Fund.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
60 Note 4 – Capital Assets
The summary of changes in governmental activities capital assets for the year ended June 30, 2021 is as follows:

Balance Balance
July 1, 2020 Additions Deletions Reclassifications June 30, 2021 Capital assets not being depreciated:

Land $ 20,319,847 $ - $ - $ 20,319,847 - $
Intangible asset-land easement 900,000 - - - 900,000
Construction in progress 725,531 1,475,361 (256,109) - 1,944,783 Total capital assets not being depreciated 21,945,378 1,475,361 (256,109) - 23,164,630 Capital assets being depreciated:

Buildings and improvements 16,731,683 - - 16,731,683 -
Machinery and equipment 3,789,069 38,588 - 3,827,657 -
Vehicles 3,677,215 130,865 (291,386) 3,516,694 -
Infrastructure 90,280,460 1,176,665 - 256,109 91,713,234 Total capital assets being depreciated 114,478,427 1,346,118 (291,386) 256,109 115,789,268 Less accumulated depreciation for:

Buildings and improvements (7,308,192) (429,116) - (7,737,308) - Machinery and equipment (2,206,505) (192,024) - (2,398,529) - Vehicles (1,681,624) (350,401) 281,592 (1,750,433) -
Infrastructure (38,637,626) (1,772,957) - (40,410,583) - Total accumulated depreciation (49,833,947) (2,744,498) 281,592 (52,296,853) - Total capital assets being depreciated, net 64,644,480 (1,398,380) (9,794) 256,109 63,492,442 Total governmental activities $ 76,981 86,589,858 $ (9,794) $ - $ 86,657,072 $ Depreciation expense was charged to functions/programs of governmental activities for the year ended June 30, 2021 as follows:

General government $ 452,920
Public safety 267,201
Community development 9,932
Public works 1,780,867
Internal service funds 233,578
Total depreciation expense $ 2,744,498
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
61 Note 4 – Capital Assets (Continued)
The summary of changes in business-type activities capital assets for the year ended June 30, 2021 is as follows:

Balance Balance
July 1, 2020 Additions Deletions Reclassifications June 30, 2021 Capital assets not being depreciated:

Construction in progress-water $ 671,946 $ 341,710 $ (8,935) $ 1,004,721 - $ Construction in progress-sewer 194,695 69,879 - - 264,574 Total capital assets not being depreciated 866,641 411,589 (8,935) 1,269,295 - Capital assets being depreciated:

Buildings and improvements - water 73,284 - - - 73,284
Machinery and equipment - water 602,278 14,781 - - 617,059 Machinery and equipment - sewer 785,802 - - - 785,802
Vehicles - water 273,061 79,982 (55,748) - 297,295
Vehicles - sewer 610,229 - (20,457) - 589,772
Infrastructure - water 34,265,102 - - 34,265,102 -
Infrastructure - sewer 38,622,844 - - 38,622,844 -
Total capital assets being depreciated 75,232,600 94,763 (76,205) 75,251,158 - Less accumulated depreciation for:

Buildings and improvements - water (73,284) - - - (73,284) Machinery and equipment - water (536,516) (6,876) - (543,392) - Machinery and equipment - sewer (280,868) (14,928) - (295,796) - Vehicles - water (203,553) (21,222) 55,748 (169,027) -
Vehicles - sewer (326,967) (57,476) 20,457 (363,986) -
Infrastructure - water (18,574,018) (516,720) - (19,090,738) - Infrastructure - sewer (19,174,196) (1,016,463) - (20,190,659) - Total accumulated depreciation (39,169,402) (1,633,685) 76,205 (40,726,882) - Total capital assets being depreciated, net 36,063,198 (1,538,922) - 34,524,276 - Total business-type activities $ 36,929,839 $ (1,127,333) $ (8,935) $ 35,793,571 - $ Depreciation expense was charged to functions/programs of business-type activities for the year ended June 30, 2021 as follows:

Water Utility $ 544,818
Sewer Utility 1,088,867
Total depreciation expense $ 1,633,685
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
62 Note 5 – Long-Term Liabilities
A. Governmental Activities
Summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2021 is as follows:

Balance Balance Due within Due in more
July 1, 2020 Additions Deletions June 30, 2021 One Year than One Year Private Placement
2009 Lease Revenue Bonds $ 1,575,000 $ (420,000) - $ $ 1,155,000 $ 315,000 $ 840,000 Direct Borrowing
Municipal Finance Corporation 457,033 (76,920) - 380,113 79,558 300,555 Claims payable 301,413 (4,118) - 297,295 55,399 241,896 Compensated absences 1,422,548 1,200,048 (1,305,824) 1,316,772 295,142 1,021,630 Total $ 3,755,994 $ 1,200,048 $ (1,806,862) $ 3,149,180 $ 745,099 $ 2,404,081 Classification
The General Fund has been used to liquidate the majority of the liability for compensated absences, other postemployment benefits liabilities and net pension liabilities in the current and prior years. 2009 Series Lease Revenue Bonds
On January 14, 2009, the City issued 2009 Series Lease Revenue Bonds for the purpose of financing the construction of a new fire station in the City in the amount of $6,300,000 Interest rate on the bonds is 3.71%. The total balance of the 2009 Series Lease Revenue bonds at June 30, 2021 was $1,155,000.

The 2009 Bonds are equally secured by a pledge, charge and lien on the revenues of the sublease. If an event of default under the sublease occurs then the trustee shall, within 30 days of such notice, give written notice by first class mail to the owner of each Series 2009 bond unless the default has been cured within the 30 day period. The trustee shall have no right to declare the principal of, or interest on, the Series 2009 bonds to be due and payable immediately.

The annual debt service requirements are as follows:

Year ending
June 30, Principal Interest Total
2022 420,000 37,007 457,007
2023 420,000 21,425 441,425
2024 315,000 5,844 320,844
Total 1,155,000 $ 64,276 $ 1,219,276 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
63 Note 5 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
Municipal Finance Corporation Loan
On May 8, 2014, the City entered into a Lease with Option to Purchase agreement with Municipal Finance Corporation relating to a capital project to be performed by Climatec LLC in the amount of $1,546,931. Interest rate on the loan is 3.40%. The balance of the Municipal Finance Corporation Loan at June 30, 2021 was $380,113. In the event of a termination or cancellation of the agreement by the City, due to no fault or failure of performance by Climatec LLC, Climatec LLC shall be paid based on the percentage of work that is satisfactory and of beneficial use. If on the scheduled date of termination of this Lease the rental payments have not been fully paid, then the terms shall be extended until the date upon which all such rental payments are made, except that the term of this Lease shall in no event extend beyond the date that corresponds to the end of the useful life of the property. In the event the City fails to pay any part of the rental payments within 30 days of the due date, the City shall upon the lessor’s written request, pay interest on such delinquent rental payments from the date it was due until the date it is paid at the rate of 8% per annum or the maximum legal rate, whatever is less. In the event of a default the lessor does not have the right to accelerate the rental payments due in future periods or declare any rental payments not then in default to be immediately due and payable.

The annual debt service requirements are as follows:

Year ending
June 30, Principal Interest Total
2022 79,558 $ 12,253 $ 91,811 $
2023 82,286 9,525 91,811
2024 85,107 6,704 91,811
2025 88,025 3,786 91,811
2026 45,137 767 45,904
Total 380,113 $ $ 33,035 $ 413,148
B. Business-Type Activities
Summary of changes in long-term liabilities for business-type activities for the year ended June 30, 2021 is as follows:

Balance Balance Due within Due in more
July 1, 2020 Additions Deletions June 30, 2021 One Year than One Year Private Placement
2011 Sewer Revenue Refunding Bonds 1,940,000 $ - $ (175,000) $ 1,765,000 $ 185,000 $ 1,580,000 $ Direct Borrowing
Sewer Capital Improvement Project #1 1,731,067 - (124,773) 1,606,294 128,017 1,478,277 Sewer Capital Improvement Project #2 1,239,088 - (74,506) 1,164,582 76,443 1,088,139 West Orange County Water Board Loan 654,381 - (84,436) 569,945 84,436 485,509 Compensated absences 137,137 287,523 (302,641) 122,019 37,666 84,353 Total 5,701,673 $ 287,523 $ (761,356) $ 5,227,840 $ 511,562 $ 4,716,278 $ Classification
The Water Utility Fund and Sewer Utility Fund have been used to liquidate the liability for compensated absences and net pension liabilities.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
64 Note 5 – Long-Term Liabilities (Continued)
B. Business-Type Activities (Continued)
2011 Sewer System Revenue Refunding Bonds
On March 2, 2011, the City issued 2011 Sewer System Revenue Refunding Bonds in the amount of $3,310,000 to pay off the 2000 Sewer System Certificates of Participation. The 2000 Sewer System Certificates of Participation were issued to provide for improvements to the City’s sewer system.

Interest rate on the 2011 Sewer System Revenue Refunding Bonds is 4.8%, and the balance of the 2011 Sewer System Revenue Refunding Bonds at June 30, 2021 was $1,765,000. In the event of a default the City may be required to pay all principal components of the unpaid installment payments, together with accrued interest at the overdue rate from the preceding interest payment date which will become immediately due and payable.

The annual debt service requirements are as follows:

Year ending
June 30, Principal Interest Total
2022 $ 185,000 $ 82,560 $ 267,560
2023 195,000 73,560 268,560
2024 205,000 64,080 269,080
2025 215,000 54,120 269,120
2026 225,000 43,680 268,680
2027-2029 740,000 63,480 803,480
Total 1,765,000 $ $ 381,480 $ 2,146,480
Sewer Capital Improvement Project Loan #1
On April 6, 2011, the City entered into an agreement with the Clean Water State Revolving Fund Control Board for construction of the Sewer Capital Improvement project. The City may borrow up to $2,644,356 or the eligible costs of the project, whichever is less. As of June 30, 2021, the City had drawn down the entire loan fund. The loan has an interest rate of 2.6% with maturities through 2031. The outstanding balance at June 30, 2021 was $1,606,294.

The annual debt service requirements are as follows:

Year ending
June 30, Principal Interest Total
2022 128,017 $ 41,764 $ 169,781 $
2023 131,345 38,435 169,780
2024 134,760 35,020 169,780
2025 138,263 31,516 169,779
2026 141,859 27,922 169,781
2027-2031 766,573 82,328 848,901
2032 165,477 4,302 169,779
Total 1,606,294 $ 261,287 $ 1,867,581 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
65 Note 5 – Long-Term Liabilities (Continued)
B. Business-Type Activities (Continued)
Sewer Capital Improvement Project Loan #2
On April 6, 2011, the City entered into an agreement with the Clean Water State Revolving Fund Control Board for construction of the Sewer Capital Improvement project. The City may borrow up to $2,125,112 or the eligible costs of the project, whichever is less. At June 30, 2021, the State Water Resources Control Board had disbursed $1,652,742. The loan has an interest rate of 2.6% with maturities through 2031. The outstanding balance at June 30, 2021 was $1,164,582.

The annual debt service requirements are as follows:

Year ending
June 30, Principal Interest Total
2022 76,443 $ 30,279 $ 106,722 $
2023 78,431 28,292 106,723
2024 80,470 26,252 106,722
2025 82,563 24,160 106,723
2026 84,709 22,014 106,723
2027-2031 457,751 75,863 533,614
2032-2034 304,215 15,954 320,169
Total 1,164,582 $ 222,814 $ 1,387,396 $
West Orange County Water Board Loan
On December 11, 2017, the City entered into financial participation agreement with the West Orange County Water Board (the “WOCWB”) for relocation of the City’s allocated 14.3% ownership in the waterline. The City’s portion of project costs was in the amount of $894,928. The repayments are due quarterly on the first of the month commencing June 1, 2018. The interest rate ranges from 1.414% to 5.314% with maturity date on March 1, 2028. The outstanding balance at June 30, 2021 was $569,945.

The annual debt service requirements are as follows:

Year ending
June 30, Principal Interest Total
2022 84,436 $ 9,587 $ 94,023 $
2023 84,436 9,895 94,331
2024 84,436 9,553 93,989
2025 84,436 8,483 92,919
2026 84,436 6,764 91,200
2027-2028 147,765 5,672 153,437
Total $ 569,945 $ 49,954 $ 619,899
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
66 Note 5 – Long-Term Liabilities (Continued)
C. Fiduciary Activities
Balance Balance
July 1, 2020 Additions Deletions June 30, 2021
2000 Tax Allocation Bonds Series A - Publicly Offered $ 685,000 $ (685,000) - $ $ - 2000 Tax Allocation Refunding Bonds
On December 20, 2000, the Agency issued 2000 Tax Allocation Refunding Bonds, Series A and B for the Riverfront Redevelopment Project in the amounts of $8,520,000 and $685,000, respectively. Interest rate on the bonds varies from 4% to 5.375%. The Agency used the proceeds of Series A Bonds to finance the refunding and defeasance of $1,380,000 of 1986 Tax Allocation Bonds and $3,715,000 of 1991 Tax Allocation Bonds. Series B Bonds were used to pay bond issuance costs and finance certain redevelopment activities of the Agency. The Series A Bonds are payable exclusively from Tax Revenues and certain funds and accounts held under the indenture. Series B Bonds are to be paid exclusively from Surplus Tax Revenues and certain funds and accounts held under the indenture. The Series A bonds were paid off during the year ended June 30, 2021. The Series B bonds were paid off during the year ended June 30, 2019. This liability was transferred to the Successor Agency upon dissolution of the redevelopment agency. In the event of default the trustee may, upon written request of the owners of not less than a majority of the principal at the time outstanding, declare the principal of the bonds outstanding and interest accrued to be due and payable immediately. The unpaid interest and principal will accrue interest at the rate of 10% per annum. The bonds were fully paid off during the year ended June 30, 2021.

Note 6 – Non-City Obligations
A. Heron Pointe Community Facilities District No. 2002-01 The Heron Pointe Community Facilities District No. 2002-01 was formed to finance public facilities improvements within Heron Pointe. The debt service payments on the bonds will be included on property tax bills within community facilities district and will be collected by the City and then forwarded to the paying agent. A reserve fund was established in which the City may make withdrawals enough to cover any delinquent payments on the reassessments. The City has no liability for the bonds beyond the amount held in the reserve fund. The bonds are not secured by the general taxing power of the City, county, state, or any political subdivision of the state nor have the City, county, state, or any political subdivision thereof pledged its full faith and credit for the repayment thereof. Since the City has no liability for these bonds, the reserve fund and debt service monies are stored in the Agency Fund and the debt is not included in the financial statements. The outstanding balance at June 30, 2021, was $2,815,000.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
67 Note 6 – Non-City Obligations (Continued)
B. Pacific Gateway Business Center Community Facilities District No 2005-01 The Pacific Gateway Business Center Community Facilities District No. 2005-01 was formed to finance public facilities within the Pacific Gateway. The debt service payments on the bonds will be included on property tax bills within the community facilities district and will be collected by the City and then forwarded to the paying agent. A reserve fund was established in which the City may make withdrawals enough to cover any delinquent payments on the reassessments. The City has no liability for the bonds beyond the amount held in the Reserve Fund. The bonds are not secured by the general taxing power of the City, county, state, or any political subdivision of the state nor have the City, county, state, or any political subdivision thereof pledged its full faith and credit for the repayment thereof. Since the City has no liability for these bonds, the reserve fund and debt service monies are stored in the Agency Fund and the debt is not included in the financial statements. The outstanding balance at June 30, 2021, was $7,315,000.

Note 7 – Risk Management and Self Insurance Program
A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City is a member of the California Joint Powers Insurance Authority (the “Authority”). The Authority is composed of 123 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.

B. Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary selfinsurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.

Primary Liability Program
Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers.

The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence.

Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/coverage/risk-sharing-pools/.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
68 Note 7 – Risk Management and Self Insurance Program (Continued) B. Self-Insurance Programs of the Authority (Continued) Primary Workers’ Compensation Program
Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.

For 2020-21 the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer’s Liability losses from $5 million to $10 million are pooled among members.

C. Purchased Insurance
Pollution Legal Liability Insurance
The City of Seal Beach participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of Seal Beach. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.

Property Insurance
The City of Seal Beach participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City of Seal Beach property is currently insured according to a schedule of covered property submitted by the City of Seal Beach to the Authority. City of Seal Beach property currently has all-risk property insurance protection in the amount of $52,409,044. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.

Earthquake and Flood Insurance
The City of Seal Beach purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City of Seal Beach property currently has earthquake protection in the amount of $52,277,663. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.

Crime Insurance
The City of Seal Beach purchases crime insurance coverage in the amount of $3,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
69 Note 7 – Risk Management and Self Insurance Program (Continued) C. Purchased Insurance (Continued)
Special Event Tenant User Liability Insurance
The City of Seal Beach further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City of Seal Beach according to a schedule. The City of Seal Beach then pays for the insurance. The insurance is facilitated by the Authority.

D. Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2020-21.

E. Claims Activity
Claims expenses and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. There were workers’ compensation claims that remained outstanding for claims occurred prior to joining the Authority. At June 30, 2021, the amount of these liabilities was $297,295 and was the City’s best estimate based on available information. The General Fund is typically used to liquidate these liabilities.

A summary of the changes in claims liabilities for the past three fiscal years is as follows:

Current Year
Claims and
Balance Changes in Claim Balance
Workers' Compensation Beginning of Year Estimates Payments End of Year 2018-2019 387,471 $ 92,274 $ (56,398) $ 423,347 $
2019-2020 423,347 - (121,934) 301,413
2020-2021 301,413 - (4,118) 297,295
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
70 Note 8 – Defined Benefit Pension Plans
The following is a summary of net pension liabilities and related deferred outflows and inflows of resources as of June 30, 2021 and pension expenses for the year then ended June 30, 2021:

Governmental Business-type
Activities Activities Total
Deferred outflows of resources:

Pension contribution made after measurement date:

Miscellaneous $ 1,064,302 $ 379,407 $ 1,443,709
Safety 3,231,920 - 3,231,920
Changes of assumptions:

Miscellaneous - - -
Safety - - -
Difference between expected and actual experience:

Miscellaneous 562,616 200,563 763,179
Safety 2,204,076 - 2,204,076
Difference in projected and actual earnings on
pension investments:

Miscellaneous 324,323 115,616 439,939
Safety 617,754 617,754
Adjustment due to differences in proportions:

Miscellaneous 304,719 108,628 413,347
Safety 509,200 - 509,200
Total deferred outflows of resources $ 8,818,910 $ 804,214 $ 9,623,124 Net pension liabilities:

Miscellaneous $ 10,624,008 $ 3,787,289 $ 14,411,297
Safety 28,423,181 28,423,181 -
Total net pension liabilities $ 39,047,189 $ 3,787,289 $ 42,834,478 Deferred inflows of resources:

Changes of assumptions:

Miscellaneous $ 77,869 $ 27,759 $ 105,628
Safety 94,677 - 94,677
Difference between City's contributions and
proportionate share of contributions:

Miscellaneous 348,283 124,158 472,441
Safety 697,371 - 697,371
Total deferred inflows of resources $ 1,218,200 $ 151,917 $ 1,370,117 Pension expenses (credit):

Miscellaneous $ 1,455,567 $ (11,858) $ 1,443,709
Safety 4,488,492 - 4,488,492
Total pension expense $ 5,944,059 $ (11,858) $ 5,932,201 City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
71 Note 8 – Defined Benefit Pension Plans (Continued)
A. General Information about the Pension Plan
Plan Description
The City contributes to the California Public Employees’ Retirement System (“CalPERS”), a cost-sharing multiple-employer defined benefit pension plan. CalPERS provides retirement and disability benefits, annual costof-living adjustments, and death benefits to plan members and beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of the CalPERS annual financial report may be obtained from https://www.calpers.ca.gov/page/forms-publications.

Employees Covered by Benefit Terms
At June 30, 2019, the following employees were covered by the benefit terms:

Miscellaneous Misc PEPRA Safety Safety Fire
Safety Police
PEPRA
Other Safety
PEPRA
Active employees 39 15 32 - 7 1
Transferred and terminated employees 38 7 6 - - -
Separated 26 1 5 1 1 -
Retired Employees and Beneficiaries 149 - 95 38 - -
Total 252 23 138 39 8 1
Benefit Provided
CalPERS provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Classic and PEPRA Safety CalPERS member becomes eligible for service retirement upon attainment of age 55 with at least 5 years of credited service. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 62 with at least 5 years of service. The service retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation.

The final compensation is the monthly average of the member's highest 36 full-time equivalent monthly pay.

Following are the benefit provisions for each plan:

Miscellaneous Rate
Plan*
PEPRA
Miscellaneous Rate
Plan Safety Rate Plan*
PEPRA Safety Rate
Plan
Hire date Prior to January 1,
2013
January 1, 2013 and
after
Prior to January 1,
2013
January 1, 2013 and
after
Benefit formula 2% @ 55 2% @ 62 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life monthly for life Retirement age minimum 50 yrs minimum 52 yrs minimum 50 yrs minimum 50 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

3.000%, 50+ yrs 2.000%-2.7000%,
52 yrs - 57+ yrs,
respectively
Cost-sharing Rate Plans
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
72 Note 8 – Defined Benefit Pension Plans (Continued)
A. General Information about the Pension Plan (Continued) Benefit Provided (Continued)
Participants are eligible for non-industrial disability retirement if they become disabled and have at least 5 years of credited service. There is no special age requirement. The standard non-industrial disability retirement benefit is a monthly allowance equal to 1.8 percent of final compensation, multiplied by service. Industrial disability benefits are not offered to miscellaneous employees.

An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed.

The employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is eligible for any other pre-retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where interest is currently credited at 7.5 percent per year, plus a lump sum in the amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death.

Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated survivor(s), or to the retiree's estate.

Benefit terms provide for annual cost-of-living adjustments to each employee’s retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by 2 percent.

Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The Public agency cost-sharing plans covered by either the Safety risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the measurement period ended June 30, 2020 (the measurement date), the contribution rates were as follows:

Miscellaneous Rate
Plan*
PEPRA
Miscellaneous Rate
Plan Safety Rate Plan*
PEPRA Safety Rate
Plan
Required employee contribution rates 7.000% 6.500% 9.000% 12.750% Required employer contribution rates 10.868% 7.072% 23.654% 13.786% * Closed to new entrants
Cost-sharing Rate Plans
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
73 Note 8 – Defined Benefit Pension Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension
Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2019 valuation was rolled forward to determine June 30, 2020 total pension liability based on the following actuarial methods and assumptions:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.50%
Salary Increases
Mortality Rate Table1
Post Retirement Benefit Increase
Varies by Entry Age and Service
Entry age normal in accordance with requirements of GASB 68 Contract COLA up to 2.5% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.5% thereafter Derived using CalPERS’ Membership Data for all Funds
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 study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.

Change of Assumption
In 2020, there were no changes in assumptions.

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

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The expected real rates of return by asset class are as followed:

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
74 Note 8 – Defined Benefit Pension Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)
Long-term Expected Rate of Return (Continued)
Current Target Real Return Real Return
Asset Class(1) Allocation Years 1-102 Years 11+3
Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Estate 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% -0.92%
100.0%
1 In the CalPERS's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
2 An expected inflation of 2.00% used for this period
3 An expected inflation of 2.92% used for this period.

Discount Rate
The discount rate used to measure the total pension liability was 7.15%. 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 City’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 7.15%, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (6.15%) or 1 percentage-point higher (8.15%) than the current rate:

Discount Rate Current Discount Discount Rate
- 1% (6.15%) Rate (7.15%) + 1% (8.15%)
Miscellaneous $ 23,013,669 $ 14,411,297 $ 7,303,427
Safety $ 42,781,436 $ 28,423,181 $ 16,640,874
Plan's Net Pension Liability/(Asset)
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
75 Note 8 – Defined Benefit Pension Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)
Pension Plan Fiduciary Net Position
Detail information about the plan’s fiduciary net position is available in the separately issued CalPERS financial report and can be obtained from CalPERS’ website under Forms and Publications.

Proportionate Share of Net Pension Liability and Pension Expense The following table shows the plan’s proportionate share of the risk pool collective net pension liability over the measurement period:

Plan Total Pension Plan Fiduciary Net Net Pension
Liability Position Liability/(Asset)
Miscellaneous
Balance at: 6/30/19 (Valuation date) 49,819,798 $ 36,499,565 $ 13,320,233 $ Balance at: 6/30/20 (Measurement date) 50,971,659 36,560,362 14,411,297 Net Changes during 2019-2020 1,151,861 60,797 1,091,064 Safety
Balance at: 6/30/19 (Valuation date) 91,349,819 $ 65,106,126 $ 26,243,693 $ Balance at: 6/30/20 (Measurement date) 95,105,297 66,682,116 28,423,181 Net Changes during 2019-2020 3,755,478 1,575,990 2,179,488 Increase (Decrease)
The following is the approach established by the plan actuary to allocate the net pension liability and pension expense to the individual employers within the risk pool. (1) In determining a cost-sharing plan’s proportionate share, total amounts of liabilities and assets are first calculated for the risk pool as a whole on the valuation date (June 30, 2019). The risk pool’s fiduciary net position (“FNP”) subtracted from its total pension liability (“TPL”) determines the net pension liability (“NPL”) at the valuation date.
(2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2020). Risk pool FNP at the measurement date is then subtracted from this number to compute the NPL for the risk pool at the measurement date. For purposes of FNP in this step and any later reference thereto, the risk pool’s FNP at the measurement date denotes the aggregate risk pool’s FNP at June 30, 2020 less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the measurement period (2019-2020). (3) The individual plan’s TPL, FNP and NPL are also calculated at the valuation date. TPL is allocated based on the rate plan’s share of the actuarial accrued liability. FNP is allocated based on the rate plan’s share of the fair value assets.
(4) Two ratios are created by dividing the plan’s individual TPL and FNP as of the valuation date from (3) by the amounts in step (1), the risk pool’s total TPL and FNP, respectively.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
76 Note 8 – Defined Benefit Pension Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)
Proportionate Share of Net Pension Liability and Pension Expense (Continued) (5) The plan’s TPL as of the Measurement Date is equal to the risk pool TPL generated in (2) multiplied by the TPL ratio generated in (4). The plan’s FNP as of the Measurement Date is equal to the FNP generated in (2) multiplied by the FNP ratio generated in (4) plus any additional side fund (or unfunded liability) contributions made by the employer on behalf of the plan during the measurement period. (6) The plan’s NPL at the Measurement Date is the difference between the TPL and FNP calculated in (5).

Deferred outflows of resources, deferred inflows of resources, and pension expense is allocate based on the City’s share of contributions during measurement period.

The City’s proportionate share of the net pension liability was as follows:

Miscellaneous Safety
June 30, 2019 0.13493% 0.25611%
June 30, 2020 0.13777% 0.26123%
Change - Increase (Decrease) 0.00284% 0.00512%
The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the beginning of the measurement period.

The expected average remaining service lifetime (“EARSL”) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the risk pool. The EARSL for risk pool for the 2019-2020 measurement period is 3.8 years, which was obtained by dividing the total service years of 548,581 (the sum of remaining service lifetimes of the active employees) by 145,663 (the total number of participants: active, inactive, and retired).

At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred outflows Deferred inflows Deferred outflows Deferred inflows of Resources of Resources of Resources of Resources
Pension contribution after measurement date 1,443,709 $ - $ 3,231,920 $ - $ Changes of assumptions - (105,628) - (94,677)
Difference between expected and actual experience 763,179 - 2,204,076 - Difference between projected and actual earning on
pension plan investments 439,939 - 617,754 -
Adjustment due to differences in proportions 413,347 - 509,200 - Difference between City contributions and
proportionate share of contributions - (472,441) - (697,371) Total $ 3,060,174 $ (578,069) $ 6,562,950 $ (792,048)
Miscellaneous Safety
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
77 Note 8 – Defined Benefit Pension Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)
Proportionate Share of Net Pension Liability and Pension Expense (Continued) Deferred outflows of resources related to pensions resulting from the City’s contributions made subsequent to the measurement date will be recognized as a reduction of the collective net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Measurement
Period
Ended June 30, Miscellaneous Safety
2021 95,261 592,208
2022 395,474 956,423
2023 336,654 680,821
2024 211,007 309,530
2025 - -
Thereafter - -
$ 1,038,396 $ 2,538,982
Deferred Outflows/
(Inflows) of Resources
Note 9 – Other Postemployment Benefits (“OPEB”) Plan
The following is a summary of net other postemployment benefits (“OPEB”) liabilities and related deferred outflows and inflows of resources as of June 30, 2021 and pension expenses for the year then ended June 30, 2021:

Governmental Business-type
Activities Activities Total
Deferred outflows of resources:

OPEB contribution made after measurement date 876,368 $ 86,674 $ 963,042 $ Difference in projected and actual earnings on
OPEB investments 95,090 9,405 104,495
Total deferred outflows of resources $ 96,078 971,459 $ 1,067,537 $ Net OPEB liabilities $ 530,928 5,368,277 $ 5,899,205 $
Deferred inflows of resources:

Changes of assumptions 230,679 $ 22,814 $ 253,493 $
Difference between expected and actual experience 106,160 10,499 116,659 Total deferred inflows of resources $ 336,838 $ 33,314 $ 370,152 OPEB expenses $ 498,184 $ 49,271 $ 547,455
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
78 Note 9 – Other Postemployment Benefits (“OPEB”) Plan (Continued) A. General Information about the OPEB Plan
Plan Description
The City provides postretirement medical benefits to employees who retire directly from the City under CalPERS under a single-employer defined benefit post-employment benefits plan. Eligible retirees can continue participation in the City medical plans (“PEMHCA”). For miscellaneous retirees, the City contributes up to a capped dollar amount which varies by bargaining unit, medical coverage, and years of service. For police safety retirees, the City contribution rate varies by date of hire and date of retirement.

Benefits Provided
Future Retirees are eligible for PEMCHA minimum medical benefits ($143 per month in 2021) if they retire at Age 50 and above. For legacy hires, reimbursements are generally subject to a maximum, which varies by bargaining group and service years. Dependents are eligible to enroll subject to service year requirements.

Employees Covered by Benefit Term
Active employees 83
11 74
Total 168
Active employees waiving coverage
Inactive employees, spouses, or beneficiaries currently receiving benefit payments Contributions
The City makes contributions based on an actuarially determined rate.

B. Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2020, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2019.

Actuarial Assumptions
The total OPEB liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Actuarial Cost Method
Actuarial Assumptions:

Inflation 2.50%
Salary increases
Investment rate of return 6.50%
Healthcare cost trend rates
Mortality rate Derived using CalPERS’ Membership Data for all Funds.

6.40% for FY2020, trending down to 4.00% in FY2076 and later years.

Base salary increases in subsequent years: 2.75%
Additional merit-based increases based on CalPERS.

Entry age normal level percentage of salary
Base salary increases in year one: 2.75%
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
79 Note 9 – Other Postemployment Benefits (“OPEB”) Plan (Continued) B. Net OPEB Liability (Continued)
Discount Rate
The discount rate used to measure the total OPEB liability was 6.50%. The projection of cash flows used to determine the discount rate assumed that the City contribution will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's fiduciary net position was projected to cover all future OPEB payments. Therefore, the discount rate was set equal to the long-term expected rate of return.

C. Changes in the Net OPEB Liability
Total OPEB Fiduciary Net Net OPEB
Liability Position Liability
Balances as of June 30, 2019 11,623,641 $ 5,625,386 $ 5,998,255 $ Changes during the measurement period:

Service cost 253,910 - 253,910
Interest 751,631 - 751,631
Differences between expected and actual experience (109,256) - (109,256) Change of assumptions (49,484) - (49,484)
Contributions:

Employer - City's contribution - 588,400 (588,400)
Employer - implicit subsidy - - -
Employee - - -
Net investment income - 360,219 (360,219)
Benefit payments, including refunds of employee
Contributions (516,782) (516,782) -
Implicit rate subsidy fulfilled - - -
Administrative expenses - (2,768) 2,768
Net changes during measurement period 2019-2020 330,019 429,069 (99,050) Balances as of June 30, 2020 (Measurement Date) $ 11,953,660 $ 6,054,455 $ 5,899,205 Increase (Decrease)
Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (5.50%) or one percentage point higher (7.50%) follows:

Discount Rate Current Discount Discount Rate
- 1% (5.50%) Rate (6.50%) + 1% (7.50%)
$ 5,899,205 7,352,236 $ $ 4,684,300
Net OPEB Liability/(Asset)
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
80 Note 9 – Other Postemployment Benefits (“OPEB”) Plan (Continued) C. Changes in the Net OPEB Liability (Continued)
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates The net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower (5.40%) or one percentage point higher (7.40%) than current healthcare cost trend rates follows:

Healthcare
1% Decrease Cost Trend Rate 1% Increase
(5.40% to 3.00%) (6.40% to 4.00%) (7.40% to 5.00%)
$ 5,899,205 4,678,279 $ $ 7,368,661
Net OPEB Liability/(Asset)
D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2021, the City recognized an OPEB expense of $547,455. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred outflows Deferred inflows
of Resources of Resources
OPEB contribution after measurement date 963,042 $ - $
Difference between expected and actual experience - (253,493) Changes of assumptions - (116,659)
Difference between projected and actual earning on
OPEB plan investments 104,495 -
Total 1,067,537 $ (370,152) $
Deferred outflows of resources related to OPEB resulting from City’s contributions subsequent to the measurement date in the amount of $963,042 will be recognized as a reduction of the net OPEB liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Measurement
Period Ending
June 30,
Deferred Outflows/
(Inflows) of
Resources
2021 (92,055) $
2022 (67,372)
2023 (58,953)
2024 (20,509)
2025 (22,251)
Thereafter (4,516)
$ (265,656)
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
81 Note 10 – Classification of Fund Balances
At June 30, 2021, fund balances are classified in the governmental funds as follows:

Capital Projects
and Equipment Nonmajor
General Capital Projects Governmental
Fund Fund Funds Total
Nonspendable:

Prepaid items $ 2,069,748 $ - $ 2,069,748 - $
Restricted:

Waste Management 182,969 - - 182,969
Parking In-lieu 175,867 - - 175,867
I-405 Corridor Improvements 1,687,520 - 1,687,520 -
Supplemental Law Enforcement - - 158,483 158,483
Detention Center - - 28,398 28,398
Air Quality Improvements - - 40,114 40,114
Parks Improvement - - 52,559 52,559
Traffic Impact - - 190,024 190,024
State Gasoline Tax - - 839,117 839,117
Measure M2 - 1,000,613 - 1,000,613
Community Development Block Grant - - 62,118 62,118
Landscape District - - 648,508 648,508
Heron Pointe - - 56,937 56,937
Pacific Gateway - - 99,901 99,901
Seal Beach Cable - - 482,763 482,763
SB 1 - - 519,316 519,316
CARES Act - - - -
Citywide Grants - - 116,619 116,619
City Debt Service - - 742,148 742,148
Total restricted 2,046,356 5,037,618 - 7,083,974
Committed:

College Park East 477,000 - - 477,000
Swimming Pool 4,545,207 - 4,545,207 -
Economic Contingency 1,750,000 - 1,750,000 -
Street Improvement 117,167 - - 117,167
Fiscal Policy 8,718,424 - 8,718,424 -
Capital Project Improvement 1,939,170 - 1,939,170 -
Total restricted 17,546,968 - 17,546,968 -
Assigned:

Community Development 1,191,618 - 1,191,618 -
Pier Restaurant 1,395,638 - 1,395,638 -
Compensated Absences 1,316,772 - 1,316,772 -
Encumbrances 511,833 - - 511,833
Other 288,734 - - 288,734
Total assigned 4,704,595 - 4,704,595 -
Unassigned (deficit) 3,629,265 (235,922) (137,948) 3,255,395 Total fund balances $ 29,996,932 $ (235,922) $ 4,899,670 $ 34,660,680 City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
82 Note 11 – Commitments and Contingencies
A. Commitments
The City had no material commitments or encumbrances as of June 30, 2021.

B. Contingencies
The City is a defendant in a number of lawsuits, which have arisen in the normal course of business. While substantial damages are alleged in some of these actions, their outcome cannot be predicted with certainty.

C. Grants
Amounts received or receivable from granting agencies are subject to audit and adjustment by grantor agencies.

While no matters of noncompliance were disclosed by the audit of the financial statements or single audit of the Federal grant programs, grantor agencies may subject grant programs to additional compliance tests, which may result in disallowed costs. In the opinion of management, future disallowances of current or prior grant expenditures, if any, would not have a material adverse effect on the financial position of the City.

Note 12 – Individual Fund Disclosure – Deficit Fund Balances Funds with deficit fund balances at June 30, 2021 are as follows:

Deficit
Capital Projects and Equipment Capital Projects Fund (235,922) $ Police Asset Forfeiture Special Revenue Fund (118,911)
Police Grants Special Revenue Fund (19,037)
The City plans to eliminate the deficit fund balances with future grant revenues.

Note 13 – Subsequent Events
A. Seal Beach Historic Resources Foundation
On July 26, 2021, the City Council adopted resolution 7185 approving the formation of Seal Beach Historic Resources Foundation. The Seal Beach Historic Resources Foundation will be presented as a component unit of the City.

B. Successor Agency Private Purpose Trust Fund
During the year ended June 30, 2021 the City started the process of winding down the Successor Agency Private Purpose Trust Fund as all the outstanding debt was paid off. The approval from the California Department of Finance is still pending as of the report issuance date.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2021
83 Note 14 – Restatement of Beginning Net Position
The beginning net position of the fiduciary funds were restated due to implementation of GASB 84 as follows:

Agency Custodial
Funds Restatement Funds
Net position, as previously reported $ - $ -
Total assets 1,531,968 1,531,968 -
Total liabilities (1,531,968) 1,154,811 (377,157)
Net position, as restated $ 1,154,811 - $ $ 1,154,811
84 This page intentionally left blank.

REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)
85 This page intentionally left blank.
86 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 28,079,700 $ 28,079,700 $ 29,869,656 $ 1,789,956 $ Licenses and permits 788,800 788,800 771,615 (17,185)
Intergovernmental 161,000 161,000 94,978 (66,022)
Charges for services 4,887,700 5,151,188 4,740,324 (410,864) Use of money and property 602,600 602,600 171,832 (430,768) Fines and forfeitures 1,220,500 1,220,500 1,816,837 596,337 Contributions 10,000 60,000 66,528 6,528
Miscellaneous 522,600 607,600 3,431,013 2,823,413
Total revenues 36,671,388 36,272,900 40,962,783 4,291,395 Expenditures:

Current:

General government 6,923,500 7,115,823 6,649,907 465,916 Public safety 20,991,500 21,169,625 21,313,233 (143,608) Community development 1,410,300 1,500,300 1,182,614 317,686 Community services 973,300 1,114,300 1,131,906 (17,606) Public works 6,102,600 6,331,214 5,550,256 780,958
Debt service:

Principal retirement 76,900 76,900 76,920 (20)
Interest and fiscal charges 14,900 14,900 14,890 10
Total expenditures 37,323,062 36,493,000 35,919,726 1,403,336 Revenues over (under) expenditures (651,674) (220,100) 5,043,057 5,694,731 Other Financing Sources (Uses):

Transfers in 1,368,800 1,399,328 460,957 (938,371)
Transfers out (4,443,200) (6,282,178) (2,805,473) 3,476,705 Proceed from sale of assets - - 119,000 119,000
Total other financing sources (uses) (3,074,400) (4,882,850) (2,225,516) 2,657,334 Net change in fund balance $ (3,294,500) $ (5,534,524) 2,817,541 $ 8,352,065 Fund Balance:

Beginning of year 27,179,391
End of year $ 29,996,932
City of Seal Beach
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 2021
Budgeted Amounts
Budgetary Comparison Schedule – General Fund
87 Measurement Date June 30, 2020 June 30, 2019
City's Proportion of the Net Pension Liability 0.13777% 0.12949% City's Proportionate Share of the Net Pension Liability 14,411,297 $ 13,320,233 $ City's Covered Payroll $ 4,721,968 5,243,738 $
City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 274.83% 282.09%
Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 71.73% 73.26% Measurement Date June 30, 2020 June 30, 2019
City's Proportion of the Net Pension Liability 0.26123% 0.25611% City's Proportionate Share of the Net Pension Liability 28,423,181 $ 26,243,693 $ City's Covered Payroll $ 5,137,216 5,607,704 $
City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 506.86% 510.85%
Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 70.11% 71.27% California Public Employees' Retirement System ("CalPERS") Miscellaneous Plan California Public Employees' Retirement System ("CalPERS") Safety Plan 1 Historical information is presented only for measurement periods for which GASB 68 is implemented. Additional years will be presented as they become available.

City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios For the Year Ended June 30, 2021
Last Ten Fiscal Years
88 Measurement Date June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 20141 City's Proportion of the Net Pension Liability 0.12641% 0.12396% 0.12144% 0.11333% 0.11644% City's Proportionate Share of the Net Pension Liability 12,180,833 $ $ 12,293,741 $ 10,508,345 $ 7,778,736 $ 7,245,313 City's Covered Payroll $ 4,713,200 $ 4,385,712 $ 4,226,024 $ 4,710,212 $ 4,503,370 City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 258.44% 280.31% 248.66% 165.15% 160.89% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 75.18% 75.11% 76.88% 82.15% 83.18% Measurement Date June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 20141 City's Proportion of the Net Pension Liability 0.25383% 0.24294% 0.24301% 0.23685% 0.19002% City's Proportionate Share of the Net Pension Liability 24,459,736 $ $ 24,093,096 $ 21,027,509 $ 16,257,122 $ 11,823,793 City's Covered Payroll $ 4,833,363 $ 4,200,942 $ 4,454,998 $ 4,734,950 $ 4,290,168 City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 506.06% 573.52% 472.00% 343.34% 275.60% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 72.12% 72.09% 73.44% 78.58% 81.42% California Public Employees' Retirement System ("CalPERS") Miscellaneous Plan California Public Employees' Retirement System ("CalPERS") Safety Plan 1 Historical information is presented only for measurement periods for which GASB 68 is implemented. Additional years will be presented as they become available.

City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2021
Last Ten Fiscal Years
89 Fiscal year 2020-21 2019-20 2018-19
Actuarially Determined Contribution 1,443,709 $ 1,275,186 $ 1,076,211 $ Contribution in Relation to the
Actuarially Determined Contribution (1,443,709) (1,275,186) (1,076,211) Contribution Deficiency (Excess) - $ - $ - $
Covered Payroll2 $ 5,387,941 $ 5,243,738 $ 4,721,968
Contributions as a Percentage
of Covered Payroll 26.80% 24.32% 22.79%
Fiscal year 2020-21 2019-20 2018-19
Actuarially Determined Contribution $ 3,231,920 $ 2,882,385 $ 2,509,250 Contribution in Relation to the
Actuarially Determined Contribution (3,231,920) (2,882,385) (2,509,250) Contribution Deficiency (Excess) $ - $ - $ -
Covered Payroll2 $ 5,761,916 $ 5,607,704 $ 5,137,216
Contributions as a Percentage
of Covered Payroll 56.09% 51.40% 48.84%
California Public Employees' Retirement System ("CalPERS") Miscellaneous Plan California Public Employees' Retirement System ("CalPERS") Safety Plan Changes of Assumptions: In 2020 and 2019, there were no changes. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate.

In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate.

Benefit Changes: There were no changes to benefit terms. 1 Historical information is presented only for measurement periods for which GASB 68 is implemented. Additional years will be presented as they become available.
2 Includes one year’s payroll growth using 2.75 percent payroll assumption for fiscal year 2019-20.

Notes to Schedule:

City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pensions
For the Year Ended June 30, 2021
Last Ten Fiscal Years
90 Fiscal year 2017-18 2016-17 2015-16 2014-15 2013-141 Actuarially Determined Contribution $ 911,168 $ 791,754 $ 709,945 $ 734,255 $ 614,667 Contribution in Relation to the
Actuarially Determined Contribution (911,168) (791,754) (709,945) (734,255) (614,667) Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 4,713,200 $ 4,385,712 $ 4,226,024 $ 4,710,212 $ 4,597,510 Contributions as a Percentage
of Covered Payroll 19.33% 18.05% 16.80% 15.59% 13.37%
Fiscal year 2017-18 2016-17 2015-16 2014-15 2013-141
Actuarially Determined Contribution $ 2,127,080 $ 1,748,129 $ 1,608,716 $ 1,476,452 $ 2,157,763 Contribution in Relation to the
Actuarially Determined Contribution (2,127,080) (1,748,129) (1,608,716) (1,476,452) (2,157,763) Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 4,833,363 $ 4,200,942 $ 4,454,998 $ 4,734,950 $ 3,995,001 Contributions as a Percentage
of Covered Payroll 44.01% 41.61% 36.11% 31.18% 54.01%
Changes of Assumptions: In 2020 and 2019, there were no changes. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate.

In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense.) In 2014, amounts reported were based on the 7.5 percent discount rate.

City of Seal Beach
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 2021
Last Ten Fiscal Years
Schedule of Contributions - Pensions (Continued)
Notes to Schedule:
1 Historical information is presented only for measurement periods for which GASB 68 is implemented. Additional years will be presented as they become available.

California Public Employees' Retirement System ("CalPERS") Safety Plan California Public Employees' Retirement System ("CalPERS") Miscellaneous Plan Benefit Changes: There were no changes to benefit terms. 91 This page intentionally left blank.
92 Measurement period June 30, 2020 June 30, 2019 June 30, 2018 June 30, 20171 Total OPEB liability
Service cost 253,910 $ 262,452 $ 275,665 $ 267,961 $
Interest 751,631 736,104 786,251 752,721
Differences between expected and actual experience (109,256) (109,256) - - Changes of assumption (49,484) (49,484) (413,262) -
Benefit payments (516,782) (419,956) (406,031) (454,685) Implicit rate subsidy fulfilled - (136,833) (123,043) (114,993) Net change in total OPEB liability 283,027 330,019 119,580 451,004 Total OPEB liability, beginning 11,340,614 11,623,641 11,221,034 10,770,030 Total OPEB liability, ending (a) $ 11,623,641 11,953,660 $ 11,340,614 $ 11,221,034 $ OPEB fiduciary net position
Contributions:

Employer - City's contribution 588,400 $ 710,200 $ 720,871 $ 567,185 $ Employer - Implicit subsidy - 136,833 123,043 114,993
Net investment income 360,219 324,350 346,820 411,482
Other additions - - 3,763 -
Benefit payments (516,782) (419,956) (406,031) (454,685) Implicit rate subsidy fulfilled - (136,833) (123,043) (114,993) Administrative expense (2,768) (1,095) (2,323) (1,995)
Other deductions - - (5,765) -
Net change in plan fiduciary net position 613,499 429,069 657,335 521,987 Plan fiduciary net position, beginning 5,011,887 5,625,386 4,354,552 3,832,565 Plan fiduciary net position, ending (b) 6,054,455 5,625,386 5,011,887 4,354,552 Plan net OPEB liability - ending (a) - (b) $ 5,998,255 5,899,205 $ 6,328,727 $ 6,866,482 $ Plan's fiduciary net position as a percentage
of the total OPEB liability 50.65% 48.40% 44.19% 38.81% Covered payroll $ 9,923,172 10,666,519 $ 9,518,945 $ 8,807,230 $ Net OPEB liability as a percentage of covered payroll 55.31% 60.45% 66.49% 77.96% 1 Historical information is presented only for measurement periods for which GASB 75 is implemented.

City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of Changes in Net Other Postemployment Benefits Liability and Related Ratios For the Year Ended June 30, 2021
Last Ten Fiscal Years
Other Postemployment Benefits ("OPEB")
93 Fiscal year end 2020-21 2019-20 2018-19 2017-18 2016-171 Actuarially determined contribution2 $ 794,339 $ 763,351 $ 755,936 $ 833,241 $ 812,317 Contribution in relation to the actuarially
determined contribution2 (867,112) (963,041) (847,033) (843,914) (682,178) Contribution deficiency/(excess) $ (168,702) $ (103,761) $ (91,097) $ (10,673) $ 130,139 Covered-employee payroll3 $ 10,666,519 10,959,848 $ 9,923,172 $ 9,518,945 $ 8,807,230 $ Contributions as a percentage of
covered-employee payroll 8.79% 8.13% 8.54% 8.87% 7.75%
Notes to Schedule:

Valuation date:

Actuarial cost method:

Inflation:

Assumed payroll growth:

Healthcare cost trend:

Rate of return on assets:

Mortality:

Other Postemployment Benefits ("OPEB")
City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits For the Year Ended June 30, 2021
Last Ten Fiscal Years
1 Historical information is presented only for measurement periods for which GASB 75 is implemented. 2 The June 30, 2019 actuarial valuation provided the actuarially determined contributions for fiscal year ended June 30, 2021.

June 30, 2019
Methods and assumptions used to determine contribution rates:
3 Includes one year’s payroll growth using 2.75 percent payroll assumption from fiscal year 2019-19.

Based on assumptions for Public Agency Miscellaneous and Police members published in the December 2017 CalPERS Experience Study
Entry age normal, level percent of pay

2.50% per year

6.50%

6.40%, trending down to 4.00%

2.75% year one and thereafter
94 City of Seal Beach
Required Supplementary Information (Unaudited)
Notes to the Budgetary Comparison Schedule
For the Year Ended June 30, 2021
Budgetary Control and Accounting Policy
The City prepares its budgets on the basis of estimated revenues and expenditures and, accordingly, the budget amounts included in the accompanying financial statements are presented on a basis substantially consistent with generally accepted accounting principles.

Encumbrance accounting is utilized during the fiscal year, whereby purchase orders, contracts and other commitments are recorded in order to control appropriations. However, at fiscal year end, all appropriations lapse. Accordingly, encumbrances are cancelled and generally are re-appropriated as part of the following year’s budget. Encumbrances are not included in reported expenditures.

Annual budgets are adopted for the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Projects Funds, except for Parks Improvement Special Revenue Fund. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year.

The budgetary level of control for all governmental fund types is the fund level. The City Manager has the discretion to transfer appropriations between departments within a fund, but transfers between funds must be approved by the City Council. 95 This page intentionally left blank.
96 SUPPLEMENTARY INFORMATION
97 This page intentionally left blank.
98 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Expenditures:

Current
Capital outlay 1,928,000 $ 5,282,393 $ 1,869,850 $ 3,412,543 $ Other Financing Sources:

Transfers in 2,987,600 5,084,393 1,772,505 (3,311,888)
Net change in fund balance $ (198,000) 1,059,600 $ (97,345) 100,655 $ Fund Balance:

Beginning of Year (138,577)
End of Year $ (235,922)
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual Capital Projects and Equipment Capital Projects Fund
For the Year Ended June 30, 2021
99 This page intentionally left blank.
100
Citywide Grants Special Revenue Fund: The Citywide Grants Special Revenue Fund is used to account for various Federal and State grants that are restricted to expenditures for specific projects or purposes.

City Debt Service Debt Service Fund : To accounts for resources that are restricted for the payments of long-term debt.

Pacific Gateway Special Revenue Fund : To account for special assessment that are restricted for costs related to the maintenance of parks, parkways and open space within the District (Landscape Maintenance).

SB 1 Special Revenue Fund : To account for revenue restricted for a wide range of transportation improvement projects.

Seal Beach Cable Special Revenue Fund : To account for revenues derived from PEGS fees which provide for channel capacity to be restricted for public, education, or government use.

CARES Act Special Revenue Fund : To account for the revenues and expenditures of CARES Act funds.

Heron Pointe Special Revenue Fund : To account for the construction and acquisition of certain public street improvements, water and sanitary sewer improvements, dry utility improvements, park and landscaping improvements.

NONMAJOR GOVERNMENTAL FUNDS
Detention Center Special Revenue Fund : To account for funds initially funded by monies seeded the previous jail services vendor.

The revenues also derived from sales of commissary items to the prisoners for their benefit.

Police Asset Forfeiture Special Revenue Fund : To accounts for revenues derived from monies and property seized in Federal, State, and Local drug-related incidents.

Street Lighting Special Revenue Fund : To account for special assessments that are restricted for the maintenance of streetlights and to finance the electricity used by the streetlights.

Police Grants Special Revenue Fund : To account for various grants include the Urban Area Security Initiative (UASI), the Office of Traffic Safety (OTS) DUI grant reimburses funds advanced by the City for DUI enforcement, the Bullet Proof Vest Protection (BVP) grant which provides matching funds that are restricted for the purchase of bullet-resistant vests, the Alcoholic Beverage Control (ABC) grant and the Justice Assistance Grant (JAG).

Supplemental Law Enforcement Special Revenue Fund : To account for funds received from the State under the State Citizens Option for Public Safety Program. Certain procedures are required to be implemented prior to the use of the funds, and the funds cannot be used to supplant existing funding for law enforcement.

Air Quality Improvement Special Revenue Fund : To accounts for supplemental vehicle license fee revenue distributed to Cities by the South Coast Air Quality Management District pursuant to Assembly Bill 2766. Expenditures are restricted for programs that will reduce air pollution by reducing, directly or indirectly, mobile source emission pollutants.

Park Improvement Special Revenue Fund : To account for the Quimby Act Fees received by developers that are restricted for the improvement of parks and recreation facilities.

Traffic Impact Special Revenue Fund : To account for fair-share based fees that will serve to offset, or mitigate, the traffic impacts caused by new development.

State Gasoline Tax Special Revenue Fund : To accounts for locally shared gas tax monies collected by the State. Expenditures are restricted for repair, construction, maintenance and right-of-way acquisitions relating to streets and highways.

Measure M2 Special Revenue Fund : To account for restricted funds for transportation improvements through the Measure M Transportation Investment Plan (M2) such as major improvement plans target Orange County freeways, streets and roads, transit and environmental programs.

Community Development Block Grant (CDBG) Special Revenue Fund : To account for resources that are restricted for a wide variety of unique community development needs.

Landscape District Special Revenue Fund : To account for special assessment that are restricted for costs related to the maintenance of parks, parkways and open space within the Community Facility District 2002-02 (Landscape Maintenance). 101
Supplemental
Street Law Detention Police Asset
Lighting Enforcement Center Forfeiture
ASSETS
Cash and investments 54,788 $ 169,418 $ 28,398 $ - $
Receivables:

Accounts - - - -
Taxes 1,664 - - -
Interest - - - -
Prepaid items - - - -
Restricted assets:

Cash and investments with fiscal agents - - - -
Total Assets $ 169,418 56,452 $ 28,398 $ - $

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 17,118 $ 5,103 $ - $ 659 $ Accrued wages and benefits payable - 5,832 - 9,055
Due to other funds 39,334 - - 109,197
Retention payable - - - -
Total Liabilities 10,935 56,452 - 118,911
Fund Balances:

Restricted - 158,483 28,398 -
Unassigned (deficit) - - - (118,911)
Total Fund Balances 158,483 - 28,398 (118,911)
Total Liabilities and Fund Balances $ 169,418 56,452 $ 28,398 $ - $ Special Revenue
City of Seal Beach
Combining Balance Sheet
June 30, 2021
Nonmajor Governmental Funds
102
Air Quality Park Traffic State
Improvement Improvement Impact Gasoline Tax
ASSETS
Cash and investments $ 31,816 $ 52,559 $ 190,024 $ 1,173,360 Receivables:

Accounts 8,298 - - -
Taxes - - - 64,128
Interest - - - -
Prepaid items - - - -
Restricted assets:

Cash and investments with fiscal agents - - - -
Total Assets $ 40,114 $ 52,559 $ 190,024 $ 1,237,488

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ - $ - $ - $ 372,413 Accrued wages and benefits payable - - - -
Due to other funds - - - -
Retention payable - - - 25,958
Total Liabilities - - - 398,371
Fund Balances:

Restricted 40,114 52,559 190,024 839,117
Unassigned (deficit) - - - -
Total Fund Balances 40,114 52,559 190,024 839,117
Total Liabilities and Fund Balances $ 40,114 $ 52,559 $ 190,024 $ 1,237,488 (Continued)
Special Revenue
City of Seal Beach
Combining Balance Sheet (Continued)
June 30, 2021
Nonmajor Governmental Funds
103
Community
Development Police Landscape
Measure M2 Block Grant Grants District
ASSETS
Cash and investments 945,764 $ 59,262 $ 527 $ 660,123 $ Receivables:

Accounts 71,349 3,446 22,836 -
Taxes - - - -
Interest - - - -
Prepaid items - - - -
Restricted assets:

Cash and investments with fiscal agents - - - -
Total Assets $ 62,708 1,017,113 $ 23,363 $ 660,123 $

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 5,855 $ 590 $ 497 9,469 $ Accrued wages and benefits payable - - 4,237 2,146
Due to other funds - - 37,666 -
Retention payable 10,645 - - -
Total Liabilities 590 16,500 42,400 11,615
Fund Balances:

Restricted 1,000,613 62,118 - 648,508
Unassigned (deficit) - - (19,037) -
Total Fund Balances 62,118 1,000,613 (19,037) 648,508
Total Liabilities and Fund Balances $ 62,708 1,017,113 $ 23,363 $ 660,123 $ City of Seal Beach
Special Revenue
Nonmajor Governmental Funds
Combining Balance Sheet (Continued)
June 30, 2021
104
Pacific Seal Beach
Heron Pointe Gateway Cable SB 1
ASSETS
Cash and investments 56,937 $ 106,394 $ 455,708 $ 642,399 $ Receivables:

Accounts - - 26,936 45,164
Taxes - - - -
Interest - - 119 -
Prepaid items - - - -
Restricted assets:

Cash and investments with fiscal agents - - - -
Total Assets $ 106,394 56,937 $ 482,763 $ 687,563 $

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities - $ 4,347 $ - $ 168,246 $ Accrued wages and benefits payable - 2,146 - -
Due to other funds - - - -
Retention payable - - - -
Total Liabilities 6,493 - - 168,246
Fund Balances:

Restricted 56,937 99,901 482,763 519,317
Unassigned (deficit) - - - -
Total Fund Balances 99,901 56,937 482,763 519,317
of Resources and Fund Balances $ 106,394 56,937 $ 482,763 $ 687,563 $ (Continued)
City of Seal Beach
Combining Balance Sheet (Continued)
June 30, 2021
Nonmajor Governmental Funds
Special Revenue
105
Debt Service
Total Other
CARES Citywide City Debt Governmental
Act Grants Service Funds
ASSETS
Cash and investments - $ 317,478 $ - $ 4,944,955 $
Receivables:

Accounts - 6,243 - 184,272
Taxes - - - 65,792
Interest - - - 119
Prepaid items - - 115,713 115,713
Restricted assets:

Cash and investments with fiscal agents - - 626,435 626,435 Total Assets $ 323,721 - $ 742,148 $ 5,937,286 $

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities - $ 200,543 $ - $ 784,840 $ Accrued wages and benefits payable - - - 23,416
Due to other funds - - - 186,197
Retention payable - 6,560 - 43,163
Total Liabilities 207,103 - - 1,037,616
Fund Balances:

Restricted - 116,618 742,148 5,037,618
Unassigned (deficit) - - - (137,948)
Total Fund Balances 116,618 - 742,148 4,899,670
Total Liabilities and Fund Balances $ 323,721 - $ 742,148 $ 5,937,286 $ (Concluded)
Special Revenue
City of Seal Beach
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2021
106
Supplemental
Street Law Detention Police Asset
Lighting Enforcement Center Forfeiture
Revenues:

Taxes 140,447 $ - $ - $ - $
Intergovernmental - 156,731 - 25,869
Charges for services - - 428 -
Use of money and property - 3,086 79 134
Contributions - - - -
Total revenues 159,817 140,447 507 26,003
Expenditures:

Current:

General government - - - -
Public safety - 185,720 203 208,266
Community development - - - -
Public works 195,235 - - -
Capital outlay - - - -
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 185,720 195,235 203 208,266
Revenues over (under) expenditures (25,903) (54,788) 304 (182,263) Other Financing Sources (Uses):

Transfers in 54,788 - - -
Transfers out - - - -
Total other financing sources (uses) - 54,788 - -
Net change in fund balances - (25,903) 304 (182,263)
Fund Balance:

Beginning of Year - 184,386 28,094 63,352
End of Year $ - $ 158,483 $ 28,398 $ (118,911)
(Continued)
Special Revenue
For the Year Ended June 30, 2021
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances City of Seal Beach
Nonmajor Governmental Funds
107
Air Quality Park Traffic State
Improvement Improvement Impact Gasoline Tax
Revenues:

Taxes $ - $ - $ - $ 565,588
Intergovernmental 32,635 10,000 - -
Charges for services - - 1,463 -
Use of money and property 232 692 2,801 15,345
Contributions - - - -
Total revenues 32,867 10,692 4,264 580,933
Expenditures:

Current:

General government - - - -
Public safety - - - -
Community development - - - -
Public works 619 - - 2,701
Capital outlay - - - 630,374
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 619 - - 633,075
Revenues over (under) expenditures 32,248 10,692 4,264 (52,142) Other Financing Sources (Uses):

Transfers in - - - -
Transfers out - - - (139,267)
Total other financing sources (uses) - - - (139,267)
Net change in fund balances 32,248 10,692 4,264 (191,409) Fund Balance:

Beginning of Year 7,866 41,867 185,760 1,030,526
End of Year $ 40,114 $ 52,559 $ 190,024 $ 839,117
Special Revenue
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) For the Year Ended June 30, 2021
Nonmajor Governmental Funds
108
Community
Development Police Landscape
Measure M2 Block Grant Grants District
Revenues:

Taxes 425,244 $ - $ - $ 184,665 $
Intergovernmental - 230,302 190,828 -
Charges for services - - - -
Use of money and property 14,518 - - 9,044
Contributions - - - -
Total revenues 230,302 439,762 190,828 193,709
Expenditures:

Current:

General government - - - -
Public safety - - 188,006 -
Community development - 178,425 - 113,158
Public works - - - -
Capital outlay 245,306 - - -
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 178,425 245,306 188,006 113,158
Revenues over (under) expenditures 51,877 194,456 2,822 80,551 Other Financing Sources (Uses):

Transfers in - - - -
Transfers out (263,263) - - (13,000)
Total other financing sources (uses) - (263,263) - (13,000) Net change in fund balances (68,807) 51,877 2,822 67,551 Fund Balance:

Beginning of Year 1,069,420 10,241 (21,859) 580,957
End of Year $ 1,000,613 $ 62,118 $ (19,037) $ 648,508
(Continued)
Special Revenue
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
City of Seal Beach
For the Year Ended June 30, 2021
109
Pacific Seal Beach
Heron Pointe Gateway Cable SB1
Revenues:

Taxes - $ 66,532 $ - $ 459,097 $
Intergovernmental - - - -
Charges for services - - 110,955 -
Use of money and property - - 5,072 11,044
Contributions 15,000 25,000 - -
Total Revenues 91,532 15,000 116,027 470,141
Expenditures:

Current:

General government - - 63,118 -
Public safety - - - -
Community development 7,527 88,134 - -
Public works - - - -
Capital outlay - - - 427,429
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total Expenditures 88,134 7,527 63,118 427,429
Revenues over (under) expenditures 3,398 7,473 52,909 42,712 Other Financing Sources (Uses):

Transfers in - - - -
Transfers out (11,000) (26,000) - (203,300)
Total other financing sources (uses) (26,000) (11,000) - (203,300) Net Change in Fund Balances (3,527) (22,602) 52,909 (160,588) Fund Balance:

Beginning of Year 60,464 122,503 429,854 679,905
End of Year $ 56,937 $ 99,901 $ 482,763 $ 519,317
(Continued)
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) For the Year Ended June 30, 2021
Nonmajor Governmental Funds
Special Revenue
110
Debt Service
Total Other
CARES Citywide City Debt Governmental
Act Grants Service Funds
Revenues:

Taxes - $ - $ - $ 1,841,573 $
Intergovernmental 1,069,576 385,058 - 2,100,999
Charges for services - - - 112,846
Use of money and property 1,115 - 67 63,229
Contributions - - - 40,000
Total revenues 385,058 1,070,691 67 4,158,647
Expenditures:

Current:

General government - - - 63,118
Public safety - - - 582,195
Community development 556,976 77,000 - 1,021,220
Public works - - - 198,555
Capital outlay - 266,282 - 1,569,391
Debt service:

Principal - - 420,000 420,000
Interest and fiscal charges - - 55,589 55,589
Total expenditures 343,282 556,976 475,589 3,910,068
Revenues over (under) expenditures 41,776 513,715 (475,522) 248,579 Other Financing Sources (Uses):

Transfers in - - 570,404 625,192
Transfers out (2,457) (193,679) - (851,966)
Total other financing sources (uses) (2,457) (193,679) 570,404 (226,774) Net change in fund balances 511,258 (151,903) 94,882 21,805 Fund Balance:

Beginning of Year (511,258) 268,521 647,266 4,877,865
End of Year $ - $ 116,618 $ 742,148 $ 4,899,670
(Concluded)
Special Revenue
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2021
111
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 141,700 $ 141,700 $ 140,447 $ (1,253) $
Expenditures:

Current:

Public works 211,800 211,800 195,235 16,565
Revenues over (under) expenditures (70,100) (70,100) (54,788) 15,312 Other Financing Sources:

Transfers in 70,100 70,100 54,788 (15,312)
Net change in fund balance $ - - $ - - $
Fund Balance:

Beginning of Year -
End of Year $ -
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2021
Budgeted Amounts
Street Lighting Special Revenue Fund
112
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 155,000 $ 165,000 $ 156,731 $ (8,269) $ Use of money and property 700 700 3,086 2,386
Total revenues 165,700 155,700 159,817 (5,883)
Expenditures:

Current:

Public safety 129,100 139,100 185,720 (46,620)
Net change in fund balance $ 26,600 26,600 $ (25,903) (52,503) $ Fund Balance:

Beginning of Year 184,386
End of Year $ 158,483
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Supplemental Law Enforcement Special Revenue Fund
For the Year Ended June 30, 2021
113
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Charges for services 4,000 $ 4,000 $ 428 $ (3,572) $
Use of money or property 10,000 10,000 79 (9,921)
Total revenues 14,000 14,000 507 (13,493)
Expenditures:

Current:

Public safety 20,000 20,000 203 19,797
Revenues over (under) expenditures (6,000) (6,000) 304 6,304 Other Financing Uses:

Transfers out - (28,000) - 28,000
Net change in fund balance $ (6,000) $ (34,000) 304 $ 34,304 Fund Balance:

Beginning of Year 28,094
End of Year $ 28,398
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Detention Center Special Revenue Fund
For the Year Ended June 30, 2021
114
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 258,000 $ 258,000 $ 25,869 $ (232,131) $ Use of money and property 600 600 134 (466)
Total revenues 258,600 258,600 26,003 (232,597)
Expenditures:

Current:

Public safety 214,900 214,900 208,266 6,634
Net change in fund balance $ 43,700 43,700 $ (182,263) (225,963) $ Fund Balance:

Beginning of Year 63,352
End of Year $ (118,911)
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Police Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 2021
115
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 30,000 $ 30,000 $ 32,635 $ 2,635 $
Use of money and property - - 232 232
Total revenues 30,000 30,000 32,867 2,867
Expenditures:

Current:

Public works 31,000 31,000 619 30,381
Net change in fund balance $ (1,000) $ (1,000) 32,248 $ 33,248 Fund Balance:

Beginning of Year 7,866
End of Year $ 40,114
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Air Quality Improvement Special Revenue Fund
For the Year Ended June 30, 2021
116
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Charge for service - $ - $ 1,463 $ 1,463 $
Use of money and property 2,000 2,000 2,801 801
Total revenues 2,000 2,000 4,264 2,264
Net change in fund balance $ 2,000 2,000 $ 4,264 2,264 $ Fund Balance:

Beginning of Year 185,760
End of Year $ 190,024
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Traffic Impact AB 1600 Special Revenue Fund
For the Year Ended June 30, 2021
117
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 600,751 $ 600,751 $ 565,588 $ (35,163) $
Use of money and property 5,000 5,000 15,345 10,345
Total revenues 605,751 605,751 580,933 (24,818)
Expenditures:

Current:

Public works 1,800 1,800 2,701 (901)
Capital outlay 670,000 845,882 630,374 215,508
Total expenditures 847,682 671,800 633,075 214,607
Revenues over (under) expenditures (241,931) (66,049) (52,142) 189,789 Other Financing Uses:

Transfers out (30,000) (316,568) (139,267) 177,301
Net change in fund balance $ (558,499) (96,049) $ (191,409) 367,090 $ Fund Balance:

Beginning of Year 1,030,526
End of Year $ 839,117
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual State Gasoline Tax Special Revenue Fund
For the Year Ended June 30, 2021
118
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 400,000 $ 400,000 $ 425,244 $ 25,244 $
Use of money and property 10,000 10,000 14,518 4,518
Total revenues 410,000 410,000 439,762 29,762
Expenditures:

Capital outlay 500,000 500,000 245,306 254,694
Revenues over (under) expenditures (90,000) (90,000) 194,456 284,456 Other Financing Sources:

Transfers out - (666,431) (263,263) 403,168
Net change in fund balance $ (756,431) (90,000) $ (68,807) 687,624 $ Fund Balance:

Beginning of Year 1,069,420
End of Year $ 1,000,613
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Measure M2 Special Revenue Fund
For the Year Ended June 30, 2021
119
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 180,000 $ 180,000 $ 230,302 $ 50,302 $ Expenditures:

Current:

Community development 180,000 180,000 178,425 1,575
Net change in fund balance $ - - $ 51,877 51,877 $
Fund Balance:

Beginning of Year 10,241
End of Year $ 62,118
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2021
120
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 321,700 $ 241,095 $ 190,828 $ (50,267) $ Expenditures:

Current:

Public safety 321,700 241,095 188,006 53,089
Net change in fund balance $ - - $ 2,822 2,822 $
Fund Balance:

Beginning of Year (21,859)
End of Year $ (19,037)
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Police Grants Special Revenue Fund
For the Year Ended June 30, 2021
121
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 166,700 $ 166,700 $ 184,665 $ 17,965 $
Use of money and property 2,000 2,000 9,044 7,044
Total revenues 168,700 168,700 193,709 25,009
Expenditures:

Current:

Community development 121,400 121,400 113,158 8,242
Revenues over expenditures 47,300 47,300 80,551 33,251
Other Financing Uses:

Transfers out (13,000) (13,000) (13,000) -
Net change in fund balance $ 34,300 34,300 $ 67,551 33,251 $ Fund Balance:

Beginning of Year 580,957
End of Year $ 648,508
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Landscape District Special Revenue Fund
For the Year Ended June 30, 2021
122
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenue:

Contributions 15,000 $ 15,000 $ 15,000 $ - $
Expenditures:

Current:

Community development 8,100 8,100 7,527 573
Revenues over (under) expenditures 6,900 6,900 7,473 573 Other Financing Uses:

Transfers out (11,000) (11,000) (11,000) -
Net change in fund balance $ (4,100) $ (4,100) (3,527) $ 573 Fund Balance:

Beginning of Year 60,464
End of Year $ 56,937
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Heron Pointe Special Revenue Fund
For the Year Ended June 30, 2021
123
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 58,000 $ 58,000 $ 66,532 $ 8,532 $
Contributions 25,000 25,000 25,000 -
Total revenues 83,000 83,000 91,532 8,532
Expenditures:

Current:

Community development 109,400 109,400 88,134 21,266
Revenues over (under) expenditures (26,400) (26,400) 3,398 29,798 Other Financing Uses:

Transfers out (26,000) (26,000) (26,000) -
Net change in fund balance $ (52,400) (52,400) $ (22,602) 29,798 $ Fund Balance:

Beginning of Year 122,503
End of Year $ 99,901
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Pacific Gateway Special Revenue Fund
For the Year Ended June 30, 2021
124
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Charges for services 100,000 $ 100,000 $ 110,955 $ 10,955 $ Use of money and property 4,000 4,000 5,072 1,072
Total revenues 104,000 104,000 116,027 12,027
Expenditures:

Current:

General government 75,000 75,000 63,118 11,882
Revenues over (under) expenditures 29,000 29,000 52,909 23,909 Other Financing Uses:

Transfer out - (24,381) - 24,381
Net change in fund balance $ 4,619 29,000 $ 52,909 48,290 $ Fund Balance:

Beginning of Year 429,854
End of Year $ 482,763
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Seal Beach Cable Special Revenue Fund
For the Year Ended June 30, 2021
125
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 430,921 $ 430,921 $ 459,097 $ 28,176 $
Use of money and property 1,500 1,500 11,044 9,544
Total revenues 432,421 432,421 470,141 37,720
Expenditures:

Capital outlay 400,000 400,000 427,429 27,429 $
Revenues over (under) expenditures 32,421 32,421 42,712 10,291 Other Financing Uses:

Transfers out - (224,676) (203,300) 21,376
Net change in fund balance $ (192,255) 32,421 $ (160,588) 31,667 $ Fund Balance:

Beginning of Year 679,905
End of Year $ 519,317
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual SB1 Program Special Revenue Fund
For the Year Ended June 30, 2021
126
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 562,803 $ 562,803 $ 1,069,576 $ 506,773 $ Use of money and property - - 1,115 1,115
Total revenues 562,803 562,803 1,070,691 507,888
Expenditures:

Current:

Community Development 562,803 562,803 556,976 5,827
Revenues over expenditures - - 513,715 513,715
Other Financing Uses:

Transfers out - - (2,457) (2,457)
Net change in fund balance $ - - $ 511,258 511,258 $
Fund Balance:

Beginning of Year (511,258)
End of Year $ -
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual CARES Act Special Revenue Fund
For the Year Ended June 30, 2021
127
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 1,305,000 $ 1,708,000 $ 385,058 $ (1,322,942) $ Expenditures:

Current:

Community development 77,000 77,000 77,000 -
Capital outlay 1,255,000 1,631,000 266,282 1,364,718
Total expenditures 1,708,000 1,332,000 343,282 1,364,718 Revenues over (under) expenditures - (27,000) 41,776 41,776 Other Financing Uses:

Transfers out - (431,668) (193,679) 237,989
Net change in fund balance $ (431,668) (27,000) $ (151,903) 279,765 $ Fund Balance:

Beginning of Year 268,521
End of Year $ 116,618
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Citywide Grants Special Revenue Fund
For the Year Ended June 30, 2021
128
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Use of money and property 400 $ 400 $ 67 $ (333) $
Expenditures:

Debt service:

Principal retirement 420,000 420,000 420,000 -
Interest and fiscal charges 55,600 55,600 55,589 11
Total Expenditures 475,600 475,600 475,589 11
Revenues over (under) expenditures (475,200) (475,200) (475,522) (322) Other Financing Sources:

Transfers in 475,200 475,200 570,404 95,204
Total other financing sources 475,200 475,200 570,404 95,204 Net change in fund balance $ - - $ 94,882 94,882 $
Fund Balance:

Beginning of Year 647,266
End of Year $ 742,148
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual City Debt Service Fund
For the Year Ended June 30, 2021
129
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130

INTERNAL SERVICE FUND FINANCIAL STATEMENTS
131
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132
Vehicle Information
Replacement Technology
Fund Fund Total
ASSETS
Current Assets:

Cash and investments $ 444,975 $ 448,420 $ 893,395
Accounts receivable 7,475 - 7,475
Total current assets 452,450 448,420 900,870
Noncurrent Assets:

Capital assets, net of accumulated depreciation 908,943 - 908,943 Total capital assets 908,943 - 908,943
Total noncurrent assets 908,943 - 908,943
Total assets 1,361,393 448,420 1,809,813

LIABILITIES
Current Liabilities:

Accounts payable 41,247 9,997 51,244
Total current liabilities 41,247 9,997 51,244
Total Liabilities 41,247 9,997 51,244

NET POSITION
Net investment in capital assets 908,943 - 908,943
Unrestricted 411,203 438,423 849,626
Total Net Position $ 1,320,146 $ 438,423 $ 1,758,569
City of Seal Beach
Combining Statement of Net Position
Internal Service Funds
June 30, 2021
See accompanying Notes to the Basic Financial Statements 133
Vehicle Information
Replacement Technology
Fund Fund Total
OPERATING EXPENSES:

Operating expenses $ 4,464 $ 35,983 $ 40,447
Amortization and depreciation expenses 233,578 - 233,578 Total operating expenses 238,042 35,983 274,025
OPERATING (LOSS) (238,042) (35,983) (274,025)
NONOPERATING INCOME:

Gain on sale of assets 38,378 - 38,378
Total nonoperating income 38,378 - 38,378
(Loss) before transfers (199,664) (35,983) (235,647)
TRANSFERS:

Transfers in 474,406 474,406
CHANGES IN NET POSITION (199,664) 438,423 238,759
NET POSITION:

Beginning of the Year 1,519,810 - 1,519,810
End of the Year $ 1,320,146 $ 438,423 $ 1,758,569
City of Seal Beach
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2021
See accompanying Notes to the Basic Financial Statements 134
Vehicle Information
Replacement Technology
Fund Fund Total

CASH FLOWS FROM OPERATING
ACTIVITIES:

Cash paid to suppliers for goods and services $ (4,648) $ (25,986) $ (30,634) Net cash (used in) operating activities (4,648) (25,986) (30,634)

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (135,916) - (135,916)
Proceed on disposal of assets 40,697 - 40,697
Cash received from other fund - 474,406 474,406
Net cash provided by (used in) capital and related financing activities (95,219) 474,406 379,187 Net change in cash and cash equivalents (99,867) 448,420 348,553 CASH AND CASH EQUIVALENTS:

Beginning of year 544,842 - 544,842
End of year $ 448,420 444,975 $ 893,395 $
Reconciliation of Operating Income (Loss) to
Net Cash Provided by (Used in) Operating Activities:

Operating (loss) (238,042) $ (35,983) $ (274,025)
Adjustments to reconcile operating income
(loss) to net cash provided by (used in)
operating activities:

Amortization and depreciation expenses 233,578 - 233,578 Changes in assets and liabilities:
(Increase)/decrease in accounts receivables - - -
Increase/(decrease) in accounts payable (184) 9,997 9,813 Net cash provided by (used in) operating activities $ (4,648) $ (25,986) $ (30,634) City of Seal Beach
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2021
See accompanying Notes to the Basic Financial Statements 135
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136

CUSTODIAL FUNDS FINANCIAL STATEMENTS
137
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138
Community Community
Facilities Facilities
District District - Heron
Deposits Heron Pointe Pacific Gateway Total
ASSETS:

Cash and investments $ 526,846 $ 125,254 $ 212,533 $ 864,633 Restricted investments with fiscal agents - 254,358 693,591 947,949 Accounts receivables 15,000 10,000 - 25,000
Total Assets 541,846 389,612 906,124 1,837,582
LIABILITIES:

Accounts payable 75,164 - - 75,164
Deposits payable 466,682 - - 466,682
Interest payable - 33,852 78,010 111,862
Total Liabilities 541,846 33,852 78,010 653,708
NET POSITION:

Restricted for:

Individual, organization and other government $ - $ 355,760 $ 828,114 $ 1,183,874 City of Seal Beach
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2021
139
Community Community
Facilities Facilities
District District - Heron
Deposits Heron Pointe Pacific Gateway Total
ADDITIONS:

Assessment revenue collected - $ 273,397 $ 533,697 $ 807,094 $ Investment income - 1,583 2,467 4,050
Total additions 274,980 - 536,164 811,144
DEDUCTIONS:

Payment of special assessment district debt service - 258,496 523,585 782,081 Change in net position 16,484 - 12,579 29,063
NET POSITION:

Beginning of year, as restated (Note 14) - 339,276 815,535 1,154,811 End of year - $ 355,760 $ 828,114 $ 1,183,874 $
Custodial Funds
For the Year Ended June 30, 2021
City of Seal Beach
Combining Statement of Changes in Fiduciary Net Position 140

STATISTICAL SECTION
141
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142
Page
These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 144 - 153 These schedules contain information to help the reader assess the factors affecting the City's ability to generate it's property and sales taxes. 154 - 157
These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 158 - 164 These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments. 165 - 166
These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs. 167 - 170
Demographic and Economic Information
Operating Information
Statistical Section
Description of Statistical Section Contents
City of Seal Beach
For the Year Ended June 30, 2021
This part of the City of Seal Beach comprehensive annual 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 government’s overall financial health.

Financial Trends
Revenue Capacity
Debt Capacity
143
2012 2013 2014 2015 2016
Governmental activities:

Net investment in capital assets, $ 70,801,667 $ 73,693,829 $ 72,498,068 $ 74,296,935 $ 73,939,948 Restricted 2,662,285 3,271,671 4,426,990 3,842,792 3,866,679 Unrestricted 29,666,427 23,570,750 25,953,129 4,097,282 4,713,193 Total governmental activities net position $ 103,130,379 $ 100,536,250 $ 102,878,187 $ 82,237,009 $ 82,519,820 Business-type activities:

Net investment in capital assets, $ 32,020,831 $ 32,645,747 $ 32,360,440 $ 34,451,074 $ 34,145,069 Restricted - - - -
Unrestricted 11,318,443 12,593,950 15,532,304 12,470,553 13,544,158 Total business-type activities net position $ 43,339,274 $ 45,239,697 $ 47,892,744 $ 46,921,627 $ 47,689,227 Primary government:

Net investment in capital assets, $ 102,822,498 $ 106,339,576 $ 104,858,508 $ 108,748,009 $ 108,085,017 Restricted 2,662,285 3,271,671 4,426,990 3,842,792 3,866,679 Unrestricted 40,984,870 36,164,700 41,485,433 16,567,835 18,257,351 Total primary government net position $ 146,469,653 $ 145,775,947 $ 150,770,931 $ 129,158,636 $ 130,209,047 Source: Finance Department, City of Seal Beach.

Fiscal Year
City of Seal Beach
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
144
2017
(As Restated) 2018 2019 2020 2021
Governmental activities:

Net investment in capital assets, $ 72,399,752 $ 72,667,466 $ 87,071,592 $ 84,530,565 $ 85,059,375 Restricted 4,587,081 4,207,675 4,825,412 7,601,451 7,201,479 Unrestricted (3,660,561) (4,911,027) (9,873,029) (11,716,752) (9,239,218) Total governmental activities net position $ 73,326,272 $ 71,964,114 $ 82,023,975 $ 80,415,264 $ 83,021,636 Business-type activities:

Net investment in capital assets, $ 33,109,258 $ 31,663,486 $ 32,937,448 $ 31,473,936 $ 30,784,313 Restricted - 25,082 25,082 25,082 25,082
Unrestricted 12,625,701 14,709,960 13,656,457 13,930,796 14,359,332 Total business-type activities net position $ 45,734,959 $ 46,398,528 $ 46,618,987 $ 45,429,814 $ 45,168,727 Primary government:

Net investment in capital assets, $ 105,509,010 $ 104,330,952 $ 120,009,040 $ 116,004,501 $ 115,843,688 Restricted 4,587,081 4,232,757 4,850,494 7,626,533 7,226,561 Unrestricted 8,965,140 9,798,933 3,783,428 2,214,044 5,120,114 Total primary government net position $ 119,061,231 $ 118,362,642 $ 128,642,962 $ 125,845,078 $ 128,190,363 Source: Finance Department, City of Seal Beach.

Fiscal Year
Last Ten Fiscal Years
(accrual basis of accounting)
City of Seal Beach
Net Position by Component (Continued)
145

2012 2013 2014 2015 2016
Expenses:

Governmental activities:

General government 6,477,795 $ 5,373,180 $ 5,040,070 $ 6,551,584 $ 6,264,368 $ Public safety 14,152,774 15,005,590 15,999,900 16,022,465 16,972,880 Community development 1,372,334 1,781,188 1,306,898 1,393,712 1,100,110 Community services 940,754 1,272,680 1,079,006 1,129,300 1,036,627 Public works 6,577,233 6,212,516 6,902,521 7,862,892 6,956,443 Interest on long-term debt 693,065 574,763 487,221 444,132 349,652 Total governmental activities expenses 30,213,955 30,219,917 30,815,616 33,404,085 32,680,080 Business-type activities:

Water utility 4,165,575 4,267,840 4,439,797 4,037,798 4,102,228 Sewer utility 1,402,249 1,520,478 1,730,940 1,661,225 1,676,651 Total business-type activities expenses 5,567,824 5,788,318 6,170,737 5,699,023 5,778,879 Total primary government expenses 35,781,779 36,008,235 36,986,353 39,103,108 38,458,959 Program revenues:

Governmental activities:

Charges for services:

General government 1,462,840 450,911 1,632,975 1,820,019 2,074,448 Public safety 1,667,184 1,565,527 1,384,701 2,132,176 1,521,220 Community development 130,118 111,008 182,021 186,858 192,878 Community services 930,501 981,440 1,062,796 1,020,316 1,015,517 Public works 1,869,575 1,980,116 1,962,242 1,937,305 1,832,289 Operating contributions and grants 5,890,556 5,837,093 2,402,490 2,768,435 2,122,139 Capital grants and contributions 44,405 - 10,000 20,000 10,000 Total governmental activities
program revenues 11,995,179 10,926,095 8,637,225 9,885,109 8,768,491 Business-type activities:

Charges for services:

Water utility 4,376,906 4,924,109 5,092,152 4,556,001 4,261,566 Sewer utility 2,442,608 2,675,201 2,775,332 2,765,357 2,466,869 Total business-type activities
program revenues 6,819,514 7,599,310 7,867,484 7,321,358 6,728,435 Total primary government
program revenues 18,814,693 18,525,405 16,504,709 17,206,467 15,496,926 Net revenues (expenses):

Governmental activities (18,218,776) (19,293,822) (22,178,391) (23,518,976) (23,911,589) Business-type activities 1,251,690 1,810,992 1,696,747 1,622,335 949,556 Total net revenues (expenses) $ (16,967,086) $ (17,482,830) $ (20,481,644) $ (21,896,641) $ (22,962,033) Source: Finance Department, City of Seal Beach.

Fiscal Year
City of Seal Beach
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
146
2017 2018 2019 2020 2021
Expenses:

Governmental activities:

General government 5,894,947 $ 6,161,230 $ 6,479,347 $ 6,868,616 $ 7,231,812 $ Public safety 19,867,060 19,877,068 21,497,362 24,079,442 23,326,808 Community development 1,218,902 1,593,008 1,499,652 1,581,361 2,283,377 Community services 995,468 964,634 945,425 866,786 1,139,731 Public works 6,992,604 7,367,882 7,752,351 11,180,509 8,290,658 Interest on long-term debt 342,951 225,675 143,040 88,274 57,902 Total governmental activities expenses 35,311,932 36,189,497 38,317,177 44,664,988 42,330,288 Business-type activities:

Water utility 4,977,160 4,668,618 4,909,193 5,444,834 6,033,692 Sewer utility 2,639,043 2,539,783 2,523,366 3,035,447 2,651,801 Total business-type activities expenses 7,616,203 7,208,401 7,432,559 8,480,281 8,685,493 Total primary government expenses 42,928,135 43,397,898 45,749,736 53,145,269 51,015,781 Program revenues:

Governmental activities:

Charges for services:

General government 1,913,909 2,062,987 1,913,201 1,207,956 1,486,575 Public safety 2,045,589 1,903,530 1,907,577 2,124,798 2,361,646 Community development 217,486 300,640 597,318 231,087 221,140 Community services 707,813 733,456 840,428 700,877 985,542 Public works 2,105,747 2,398,039 2,556,857 2,732,164 2,596,848 Operating contributions and grants 1,721,167 2,334,480 2,588,454 3,442,883 4,287,922 Capital grants and contributions 174,685 79,175 9,777,900 30,707 10,692 Total governmental activities
program revenues 8,886,396 9,812,307 20,181,735 10,470,472 11,950,365 Business-type activities:

Charges for services:

Water utility 4,782,468 5,097,807 4,851,274 4,268,610 4,957,483 Sewer utility 2,784,942 2,928,885 2,854,208 3,007,958 2,885,699 Total business-type activities
program revenues 7,567,410 8,026,692 7,705,482 7,276,568 7,843,182 Total primary government
program revenues 16,453,806 17,838,999 27,887,217 17,747,040 19,793,547 Net revenues (expenses):

Governmental activities (26,425,536) (26,377,190) (18,135,442) (34,194,516) (30,379,923) Business-type activities (48,793) 818,291 272,923 (1,203,713) (842,311) Total net revenues (expenses) $ (26,474,329) $ (25,558,899) $ (17,862,519) $ (35,398,229) $ (31,222,234) Source: Finance Department, City of Seal Beach.

Fiscal Year
City of Seal Beach
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
147

2012 2013 2014 2015 2016
General revenues and other changes in net position:

Governmental activities:

Taxes:

Property taxes 10,337,486 $ 9,958,198 $ 9,498,277 $ 10,050,815 $ 10,408,505 $ Transient occupancy taxes 970,275 1,289,007 1,509,095 1,525,723 1,655,376 Sales tax 4,930,037 5,408,756 4,742,859 4,246,080 4,228,730 Franchise taxes 1,008,031 1,126,398 1,324,860 1,163,595 955,922 Utility users taxes 5,484,256 4,732,597 4,644,218 4,646,434 4,445,180 Other taxes 338,176 328,743 555,804 344,789 197,166
Motor vehicle in lieu, unrestricted 12,868 13,333 11,035 10,659 9,960 Use of money and property 714,342 372,693 674,875 725,720 1,004,572 Other 230,997 331,175 544,406 356,749 536,175
Transfers - - 378,500 378,500 378,500
Extraordinary Gain(loss) (3,531,584) - - 694,585 -
Total governmental activities 20,494,884 23,560,900 23,883,929 24,143,649 23,820,086 Business-type activities:

Use of money and property 96,774 84,371 133,995 109,575 176,437 Other 4,112 5,060 805 3,698 20,107
Transfers - - (378,500) (378,500) (378,500)
Extraordinary Gain(loss) (1,200,000) - 1,200,000 - -
Total business-type activities (1,099,114) 89,431 956,300 (265,227) (181,956) Total primary government 19,395,770 23,650,331 24,840,229 23,878,422 23,638,130 Changes in net position:

Governmental activities 2,276,108 4,267,078 1,705,538 624,673 (91,503) Business-type activities 152,576 1,900,423 2,653,047 1,357,108 767,600 Total primary government $ 2,428,684 $ 6,167,501 $ 4,358,585 $ 1,981,781 $ 676,097 Source: Finance Department, City of Seal Beach.

Fiscal Year
City of Seal Beach
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
148
2017 2018 2019 2020 2021
General revenues and other changes in net position:

Governmental activities:

Taxes:

Property taxes 11,012,246 $ 11,180,197 $ 11,481,535 $ 12,358,059 $ 12,926,895 $ Transient occupancy taxes 1,693,515 1,666,996 1,631,445 1,298,707 878,165 Sales tax 4,379,341 4,303,618 5,546,264 9,108,334 10,146,964 Franchise taxes 1,016,938 1,059,581 1,097,774 1,034,280 1,067,098 Utility users taxes 4,177,713 4,186,554 4,061,031 3,941,877 4,129,727 Other taxes 190,510 163,277 227,978 724,854 720,807
Motor vehicle in lieu, unrestricted 11,235 13,102 12,473 21,133 19,070 Use of money and property 425,014 300,817 1,692,720 1,862,213 151,196 Other 214,219 1,762,390 2,065,583 1,463,177 3,270,753
Transfers 378,500 378,500 378,500 376,483 (324,379)
Extraordinary Gain(loss) - - - - -
Total governmental activities 23,499,231 25,015,032 28,195,303 32,189,117 32,986,296 Business-type activities:

Use of money and property 167,661 223,778 326,036 391,016 256,845 Other - - - - -
Transfers (378,500) (378,500) (378,500) (376,483) 324,379 Extraordinary Gain(loss) - - - - -
Total business-type activities (210,839) (154,722) (52,464) 14,533 581,224 Total primary government 23,288,392 24,860,310 28,142,839 32,203,650 33,567,520 Changes in net position:

Governmental activities 23,499,231 25,015,032 10,059,861 (2,005,399) 2,606,373 Business-type activities (210,839) (154,722) 220,459 (1,189,180) (261,087) Total primary government $ 23,288,392 $ 24,860,310 $ 10,280,320 $ (3,194,579) $ 2,345,286 Source: Finance Department, City of Seal Beach.

City of Seal Beach
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
149
2012 2013 2014 2015 2016
General Fund:

Nonspendable $ - $ 1,549,735 - $ $ 666,102 $ 682,859
Restricted - - - - -
Committed - - - - -
Assigned 9,106,458 8,301,699 8,227,258 7,623,994 7,610,286 Unassigned 19,263,118 21,149,350 22,314,838 21,711,517 20,811,037 Total general fund $ 28,369,576 $ 29,451,049 $ 32,091,831 $ 30,001,613 $ 29,104,182 All Other government funds:

Nonspendable $ - $ - $ - $ - $ -
Restricted 2,662,285 3,271,671 4,426,990 3,842,792 3,866,679 Assigned 87,375 89,004 71,993 - -
Unassigned (470,485) (56,810) (368,629) (525,408) (51,254) Total all Other government funds: $ 2,279,175 $ 3,303,865 $ 4,130,354 $ 3,317,384 $ 3,815,425 Source: Finance Department, City of Seal Beach
Fiscal Year
City of Seal Beach
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
150
2017 2018 2019 2020 2021
General Fund:

Nonspendable $ 2,877 $ 32,495 $ 33,795 $ 41,776 $ 2,069,748 Restricted 12,277 5,266 5,419 2,190,469 2,046,356
Committed - - 17,067,216 - 17,546,968
Assigned 7,478,281 8,289,150 10,152,504 4,370,059 4,704,595 Unassigned 19,770,202 17,491,623 11,922,370 3,509,871 3,629,265 Total general fund $ 27,263,637 $ 25,818,534 $ 22,114,088 $ 27,179,391 $ 29,996,932 All Other government funds:

Nonspendable $ - $ - $ - $ - $ -
Restricted 4,131,203 4,110,558 4,819,993 5,410,982 5,037,618 Assigned - - - - -
Unassigned (184,908) (34,159) (425,639) (671,694) (373,870) Total all Other government funds: $ 3,946,295 $ 4,076,399 $ 4,394,354 $ 4,739,288 $ 4,663,748 Source: Finance Department, City of Seal Beach
Fiscal Year
City of Seal Beach
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(modified accrual basis of accounting)
151
2012 2013 2014 2015 2016
Revenues:

Taxes $ 24,165,883 $ 23,831,431 $ 23,476,034 $ 23,114,876 $ 22,828,144 Licenses and permits 926,761 1,247,750 1,369,275 1,377,131 1,304,924 Intergovernmental 5,058,175 3,002,321 869,294 1,725,127 1,388,056 Charges for services 4,044,566 4,117,034 3,895,371 3,961,691 4,214,690 Use of money and property 714,342 372,693 674,875 725,720 1,004,572 Fines and forfeitures 1,085,291 1,063,172 1,013,695 1,146,509 1,110,606 Contributions from other governments - 10,209 341,698 330,885 283,222 Miscellaneous 234,597 301,771 579,125 375,588 537,777
Total revenues 36,229,615 33,946,381 32,219,367 32,757,527 32,671,991 Expenditures
Current:

General government 5,169,799 5,062,467 4,493,594 5,462,668 5,351,130 Public safety 13,948,663 14,460,833 15,439,757 15,811,773 16,378,416 Community development 1,353,068 1,420,065 1,298,071 1,362,308 1,175,339 Community services 880,983 1,182,716 1,048,427 1,129,497 1,075,282 Public works 4,047,013 4,156,616 4,871,887 5,631,015 4,862,058 Capital outlay 5,530,575 3,316,684 2,094,120 4,578,308 2,645,823 Debt service:

Principal retirement 2,195,014 1,734,446 1,265,135 1,337,573 1,490,150 Interest and fiscal charges 790,581 562,184 492,935 441,040 355,819 Bond issuance costs - -
Total expenditures 33,915,696 31,896,011 31,003,926 35,754,182 33,334,017 Excess (deficiency) of revenue over
(under) expenditures 2,313,919 2,050,370 1,215,441 (2,996,655) (662,026) Other financing sources (uses):

Transfers in 8,209,025 5,825,432 4,363,955 7,012,848 5,602,944 Transfers out (8,209,025) (6,135,432) (4,295,455) (6,919,381) (5,340,308) Debt issuance - 1,546,931 - - -
Proceeds on sale of assets - - - - -
Total other financing sources (uses) (310,000) - 1,615,431 93,467 262,636 Extraordinary gain/(loss) on dissolution
of redevelopment agency (7,818,567) - - - -
Net change in fund balances $ (5,504,648) $ 1,740,370 $ 2,830,872 $ (2,903,188) $ (399,390) Debt service as a percentage of
noncapital expenditures 10.5% 8.0% 6.1% 5.7% 6.0%
City of Seal Beach
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Source: Finance Department, City of Seal Beach
Note: On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 that provides for the dissolution of all redevelopment agencies in the State of California. The Redevelopment Agency was dissolved on February 1, 2012.

Fiscal Year
152
2017 2018 2019 2020 2021
Revenues:

Taxes $ 23,368,371 $ 24,021,668 $ 25,903,080 $ 27,481,580 $ 31,711,229 Licenses and permits 1,234,590 1,480,971 1,416,737 844,274 771,615 Intergovernmental 744,904 1,530,815 857,923 4,330,159 2,195,977 Charges for services 5,349,083 4,586,949 4,878,405 4,684,076 4,853,170 Use of money and property 426,418 347,117 1,772,775 2,003,529 235,061 Fines and forfeitures 152,845 1,089,515 946,048 1,239,154 1,816,837 Contributions from other governments 180,511 55,765 45,994 60,942 106,528 Miscellaneous 492,245 520,420 2,319,864 2,995,022 3,431,013 Total revenues 31,948,967 33,633,220 38,140,826 43,638,736 45,121,430 Expenditures
Current:

General government 5,673,309 5,757,859 6,169,490 6,083,705 6,713,025 Public safety 17,395,965 18,148,871 19,240,608 20,921,107 21,895,428 Community development 1,186,081 1,488,921 1,446,025 1,408,699 2,203,834 Community services 1,004,690 954,018 942,804 852,664 1,131,906 Public works 4,586,373 4,967,066 5,160,373 6,672,230 5,748,811 Capital outlay 1,506,476 2,567,080 7,378,774 1,729,166 3,439,241 Debt service:

Principal retirement 2,162,379 1,640,521 1,754,905 494,370 496,920 Interest and fiscal charges 353,322 231,779 152,863 88,612 70,479 Bond issuance costs
33,868,595 35,756,115 42,245,842 38,250,553 41,699,644
Excess (deficiency) of revenue over
(under) expenditures (1,919,628) (2,122,895) (4,105,016) 5,388,183 3,421,788 Other financing sources (uses):

Transfers in 4,472,129 5,714,614 9,381,712 4,141,526 2,858,654 Transfers out (4,262,176) (4,906,717) (8,663,187) (4,119,472) (3,657,439) Debt issuance - - - - -
Proceeds on sale of assets - - - 119,000 -
Total other financing sources (uses) 209,953 807,897 718,525 22,054 (679,785) Extraordinary gain/(loss) on dissolution
of redevelopment agency - - - - -
Net change in fund balances $ (1,709,675) $ (1,314,998) $ (3,386,491) $ 5,410,237 $ 2,742,001 Debt service as a percentage of
noncapital expenditures 7.8% 5.6% 5.5% 1.6% 1.5%
City of Seal Beach
Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
153
Fiscal Year Taxable Taxable Total
Ended Assessed Assessed Direct Tax
June 30 Secured Unsecured Value Secured Unsecured Value Rate 2012 4,219,133,372 215,211,254 4,434,344,626 410,499,845 6,813,130 417,312,975 1.00% 2013 4,304,310,243 176,246,398 4,480,556,641 424,660,008 7,294,003 431,954,011 1.00% 2014 4,408,299,607 172,172,784 4,580,472,391 453,448,325 8,270,821 461,719,146 1.00% 2015 4,706,609,532 184,449,987 4,891,059,519 556,548,983 3,863,246 560,412,229 1.00% 2016 4,794,299,125 287,392,225 5,081,691,350 530,597,248 32,693,247 563,290,495 1.00% 2017 4,978,010,106 189,618,406 5,167,628,512 300,533,393 2,090,757 302,624,150 1.00% 2018 5,233,421,188 194,765,328 5,428,186,516 309,374,617 2,150,646 311,525,263 1.00% 2019 5,475,549,249 150,370,464 5,625,919,713 320,174,015 2,103,366 322,277,381 1.00% 2020 5,817,397,419 163,933,178 5,981,330,597 363,940,344 3,281,367 367,221,711 1.00% 2021 6,051,394,489 149,026,764 6,200,421,253 375,196,393 5,389,789 380,586,182 1.00% 1 Beginning with the fiscal year ended June 30, 2003, exemptions are netted directly against the individual property categories.

NOTE:

In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time it is sold to a new owner.

At that point, the new assessed value is reassessed at the purchase price of the property sold.

The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Source: County of Orange, Auditor - Controller Assessed Valuations Detail City of Seal Beach
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
City Redevelopment Agency
154
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
City Direct Rates:

City Direct Rate 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 1.00000 Overlapping Rates:

Orange County Bonds 0.01754 0.01881 0.03015 0.03015 0.03092 0.03092 0.03116 0.03052 0.03100 0.03181 Metropolitan Water District 0.00370 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 Other Districts 0.03603 0.04124 0.04830 0.04821 0.05219 0.05219 0.04833 0.04921 0.07990 0.09287 Total Direct Rate 1.05467 1.05727 1.06355 1.08195 1.08661 1.08661 1.08299 1.08323 1.11440 1.12818 Source: County of Orange, Auditor-Controller's Office
Last Ten Fiscal Years
Direct and Overlapping Property Tax Rates
City of Seal Beach
Fiscal Year
NOTE:

In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of the School District bonds. 155

Percent of Percent of
Total City Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Value Value
Seal Beach Mutual $ 1,080,629,651 17.41% $ 637,280,111 14.37% Western National Life Insurance Company - 130,718,735 - 2.95% CPT Shops at Rossmoor LLC 132,176,593 2.13% 80,563,664 1.82% ASN Long Beach LLC 2.05% 60,451,799 127,023,919 1.36%
Boeing North American 2.00% 83,822,179 123,867,353 1.89% Terra Funding-Bixby Ranch LLC 96,029,112 1.55% - -
DCOR LLC - - 54,040,548 1.22%
Ranch Town Center LLC 48,734,669 0.79% 41,489,664 0.94% Al United States Seal Beach Senior Housing 44,297,836 0.71% 46,613,978 1.05% OXY Long Beach Inc 44,091,595 0.71% 144,692,821 3.26%
Hellman Properties - - 33,747,938 0.76%
Columbia Regency Retail Partners LLC 29,379,112 0.47% - - Rexford Industrial Realty LP 23,650,905 0.38% - -
$ 28.20% 1,313,421,437 1,749,880,745 $ 29.62%
The amounts shown above include assessed value data for both the City and the Redevelopment Agency.

Source: HDL Coren & Cone
City of Seal Beach
Current Year and Nine Years Ago
Principal Property Taxpayers
2021 2012
156

Fiscal Taxes Levied Collections in
Year Ended for the Percent Subsequent Percent
June 30 Fiscal Year Amount of Levy Years Amount of Levy 2012 $ 8,608,773 $ 8,404,621 97.63% $ 125,019 $ 8,529,640 99.08% 2013 8,814,252 8,629,271 97.90% 118,645 8,747,916 99.25% 2014 9,407,263 9,240,201 98.22% 103,007 9,343,208 99.32% 2015 10,438,079 10,222,017 97.93% 73,362 10,295,379 98.63% 2016 10,472,603 10,196,356 97.36% 81,860 10,278,216 98.14% 2017 10,945,834 10,710,665 97.85% 65,706 10,776,371 98.45% 2018 11,415,167 11,226,591 98.35% 66,149 11,292,740 98.93% 2019 12,131,891 11,590,056 95.53% 60,234 11,650,289 96.03% 2020 13,319,047 7,667,943 57.57% 62,614 7,730,557 58.04% 2021 13,672,323 7,158,823 52.36% 72,624 7,231,447 52.89% Source: Orange County Tax Ledger
Total Collections to Date
Collected within the
Fiscal Year of Levy
Property Tax Levies and Collections
City of Seal Beach
Last Ten Fiscal Years
NOTE:

The amounts presented include City property taxes and Redevelopment Agency tax increment. This schedule also includes amounts collected by the City and Redevelopment Agency that were passed-through to other agencies. On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 that provides for the dissolution of all redevelopment agencies in the State of California. The Redevelopment Agency was dissolved on February 1, 2012. 157
Fiscal Year Countrywide Tax Pension Fire Total
Ended Capital Financing Allocation Obligation Station Governmental June 30 Lease Authority Lease Bonds Bonds Bonds Climatec Activities 2012 202,581 $ $ - $ 7,227,000 - $ $ 4,935,000 $ 12,364,581 - $ 2013 70,135 - 6,045,000 - 4,515,000 10,630,135 -
2014 - - 5,270,000 - 4,095,000 1,562,400 10,927,400
2015 - - 4,411,000 - 3,675,000 1,488,358 9,574,358
2016 - - 3,461,000 - 3,255,000 1,368,208 8,084,208
2017 - - 2,414,000 - 2,835,000 672,829 5,921,829
2018 - - 1,263,000 - 2,415,000 603,308 4,281,308
2019 - - - 1,995,000 - 531,403 2,526,403
2020 - - - 1,575,000 - 457,033 2,032,033
2021 - - - 1,155,000 - 380,113 1,535,113
Notes:

Details regarding the City's outstanding debt can be found in the notes to the financial statements In addition on December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 that provides for the dissolution of all redevelopment agencies in the State of California. The Redevelopment Agency was dissolved on February 1, 2012. The debt was transferred to the Successor Agency to the Seal Beach Redevelopment Agency. 1 See the schedule of Demographic and Economic Statistics on page 155 for personal income and population data.
*Data not readily available.

Source: Finance Department, City of Seal Beach
Governmental Activities
City of Seal Beach
Last Ten Fiscal Years
Ratios of Outstanding Debt by Type
158
Economic
Fiscal Year Development Sewer Sewer 2011 Sewer Total Total Percentage Debt Ended Administration Certificates of Installment State Revolving Business-type Primary of Personal Per June 30 Loan Participation Agreement Agreement Activities Government Income 1 Capita 1 2012 $ 87,453 $ 3,085,000 - $ $ 3,172,453 - $ $ 16,737,034 * 687 2013 74,780 2,965,000 - 4,645,401 7,685,181 19,515,316 * 750 2014 - 2,835,000 - 4,068,778 6,903,778 19,031,178 * 732 2015 - 2,705,000 - 3,893,311 6,598,311 17,125,013 * 697 2016 - 2,565,000 - 3,718,034 6,283,034 15,081,352 * 613 2017 - 2,420,000 - 3,538,201 5,958,201 5,958,201 * 483
2018 - 2,270,000 - 3,353,690 5,623,690 9,904,998 * 398
2019 - 2,110,000 - 3,164,384 5,274,384 7,800,787 * 313
2020 - 1,940,000 - 2,970,155 4,910,155 6,942,188 * 278
2021 - 1,765,000 - 2,770,876 4,535,876 6,070,989 * 243
Notes:

Details regarding the City's outstanding debt can be found in the notes to the financial statements In addition on December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 that provides for the dissolution of all redevelopment agencies in the State of California. The Redevelopment Agency was dissolved on February 1, 2012. The debt was transferred to the Successor Agency to the Seal Beach Redevelopment Agency. 1 See the schedule of Demographic and Economic Statistics on page 155 for personal income and population data.
*Data not readily available.

Source: Finance Department, City of Seal Beach
Business-type Activities
City of Seal Beach
Ratios of Outstanding Debt by Type (Continued)
Last Ten Fiscal Years
159
Fiscal Year Private Percent of
Ended Placement Total Assessed Per
June 30 Bonds Bonds Bonds Value 1 Capita
2012 - $ 12,162,000 $ 12,162,000 $ 0.24% 497 $
2013 - 10,560,000 10,560,000 0.21% 406
2014 - 9,365,000 9,365,000 0.19% 360
2015 - 8,086,000 8,086,000 0.15% 329
2016 - 6,716,000 6,716,000 0.12% 273
2017 - 4,507,180 5,249,000 0.10% 213
2018 - 2,937,013 2,937,013 0.05% 118
2019 - 1,995,000 1,995,000 0.03% 80
2020 - 1,575,000 1,575,000 0.02% 63
2021 - 1,155,000 1,155,000 0.02% 46
1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California.

Note:

Source: Finance Department, City of Seal Beach
City of Seal Beach
Last Ten Fiscal Years
Ratio of General Bonded Debt Outstanding
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X26 that provides for the dissolution of all redevelopment agencies in the State of California. The Redevelopment Agency was dissolved on February 1, 2012. The debt was transferred to the Successor Agency to the Seal Beach Redevelopment Agency
General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds (of which, the City has none).
160
2020-21 Assessed Valuation: $6,200,421,253
Total Debt City’s Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable (1) 6/30/2021 Debt 6/30/21 Metropolitan Water District 0.190% 26,830,000 $ $ 50,977 Coast Community College District 2.885% 886,289,825 25,569,461 North Orange Jt. Community College District 1.166% 245,604,001 2,863,743 Los Alamitos Unified School District School Facilities Imp District No.1 48.831% 201,205,227 98,250,524 Huntington Beach Union High School District 0.001% 174,584,998 1,746 Ocean View School District 0.004% 77,480,000 3,099
City of Seal Beach Community Facilities District No. 2002-1 100.000% 2,815,000 2,815,000 City of Seal Beach Community Facilities District No. 2005-1 100.000% 7,315,000 7,315,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 136,869,550 OVERLAPPING GENERAL FUND DEBT:

Orange County General Fund Obligations 0.946% 381,885,000 $ 3,612,632 $ Orange County Pension Obligations 0.946% 485,318,204 4,591,110 Orange County Board of Education Certificates of Participation 0.946% 12,310,000 116,453 North Orange County Regional Occupation Program Certificates of Participation 4.377% 8,590,000 375,984 Coast Community College District Certificates of Participation 2.885% 2,240,000 64,624 Coast Community College District Pension Obligation Bonds 2.885% 2,280,000 65,778 Los Alamitos Unified School District Certificates of Participation 53.986% 36,529,430 19,720,778 Huntington Beach Union High School District Certificates of Participation 0.001% 61,411,090 614 Ocean View School District General Fund Obligations 0.004% 17,990,000 720 City of Seal Beach Fire Station Lease Revenue Bonds 100% 1,155,000 1,155,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 29,703,693 $ OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 100% $ 525,000 525,000 $ TOTAL DIRECT DEBT $ 1,155,000
TOTAL OVERLAPPING DEBT $ 165,943,243
COMBINED TOTAL DEBT $ 167,098,243 (2)
(1) Percentage of overlapping agency's assessed valuation located within boundaries of the city. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.

Ratios to Adjusted Assessed Valuation:

Total Overlapping Tax and Assessment Debt 2.21%
Total Direct Debt ($3,378,000) 0.02%
Combined Total Debt 2.69%
Total Overlapping Tax Increment Debt 0.14%
Source: California Municipal Statistics, Inc.

Ratios to Redevelopment Incremental Valuation ($379,270,564):

City of Seal Beach
Schedule of Direct and Overlapping Debt
June 30, 2021
161
2012 2013 2014 2015 2016
Debit limit $ 760,030,328 $ 736,876,598 $ 756,328,731 $ 817,720,762 $ 846,747,277 Total net debt applicable to limit - - - - -
Legal debt margin $ 760,030,328 $ 736,876,598 $ 756,328,731 $ 817,720,762 $ 846,747,277 Total debt applicable to the limit
as a percentage of debt limit 0.0% 0.0% 0.0% 0.0% 0.0%

Note: 1
Under state finance law, the City of Seal Beach's outstanding general obligation debt should not exceed 15 percent of total assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds.

Source: Orange County Tax Assessor's Office
City of Seal Beach
Legal Debt Margin Information
Last Ten Years
Fiscal Year
162
2017 2018 2019 2020 2021
Debit limit $ 820,537,899 $ 860,757,686 $ 892,030,484 $ 952,282,846 $ 930,063,188 Total net debt applicable to limit - - - - -
Legal debt margin $ 820,537,899 $ 860,757,686 $ 892,030,484 $ 952,282,846 $ 930,063,188 Total debt applicable to the limit
as a percentage of debt limit 0.0% 0.0% 0.0% 0.0% 0.0%
Legal Debt Margin Calculation for Fiscal Year 2021
Assessed Valuation $ 6,200,421,253
Debt percentage 1 15%
Debt limit 930,063,187.95 $
Debt applicable to limit -
Legal debt margin $ 930,063,188
Note: 1
Under state finance law, the City of Seal Beach's outstanding general obligation debt should not exceed 15 percent of total assessed property value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds.

Source: Orange County Tax Assessor's Office
Fiscal Year
City of Seal Beach
Legal Debt Margin Information (Continued)
Last Ten Years
163

Fiscal Year
Ended Tax
June 30 Increment Principal Interest Coverage
2012 $ 1,034,695 $ 450,000 $ 396,408 1.22
2013 1,790,960 470,000 330,684 2.24
2014 1,222,425 495,000 229,406 1.69
2015 1,084,135 515,000 204,269 1.51
2016 1,329,344 545,000 177,413 1.84
2017 1,218,363 575,000 148,759 1.68
2018 1,125,053 600,000 118,302 1.57
2019 1,198,637 635,000 86,013 1.66
2020 234,102 605,000 53,078 0.36
2021 530,978 160,000 32,519 2.76
Source: Finance Department, City of Seal Beach
City of Seal Beach
Pledged-Revenue Coverage
Last Ten Fiscal Years
Debt Service
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 2000 Tax Allocation Refunding Bonds
164

Personal Per Capita
Calendar Income Personal Unemployment
Year Population (in thousands) Income Rate
2011 24,354 1,035,313 42,511 6.4%
2012 24,487 1,065,674 43,520 4.1%
2013 24,591 1,082,963 44,039 3.7%
2014 24,586 1,074,777 43,715 4.8%
2015 25,078 1,141,053 45,500 3.9%
2016 24,890 1,164,182 46,773 3.5%
2017 25,984 1,199,969 46,181 3.2%
2018 25,073 1,277,436 50,948 3.3%
2019 24,992 1,370,609 54,841 3.2%
2020 24,443 1,398,936 57,232 8.2%
Sources: HDL Coren & Cone
City of Seal Beach
Demographic and Economic Statistics
Last Ten Calendar Years
165
Business
Business Name 2020-21 2011-12 Category
76 X X Service Stations
AT&T Mobility X Electronics/Appliance Store
Bed Bath & Beyond X X Home Furnishings
Burlington X Family Apparel
California Pizza Kitchen X X Casual Dining
Chevron X X Service Stations
Chevron X Service Stations
Chevron & Auto Repair X Service Stations
Chick Fil A X Quick-Service Restaurants
CVS Pharmacy X X Drug Stores
Energy Tubulars X Petroleum Prod/Equip
Home Goods X X Home Furnishings
In N Out Burgers X Quick-Service Restaurants
Islands X Casual Dining
Kohls X X Department Stores
Leisure World Automotive 76 X Service Stations
Mahe X Casual Dining
Marshalls X X Family Apparel
Mobil X X Service Stations
Old Ranch Country Club X X Leisure/Entertainment
Original Parts Group X X Automotive Supply Stores
Pavillions X X Grocery Stores Liquor
Petsmart X Specialty Stores
Ralphs X X Grocery Stores Liquor
Roger Dunn Golf Shop X X Sporting Goods/Bike Stores
Seal Beach X Casual Dining
Seal Beach Chevron X Service Stations
Spaghettini X X Fine Dining
Sprouts Farmers Market X X Grocery Stores Beer/Wine
Staples X Office Supplies/Furniture
Target X X Discount Dept Stores
Ulta Beauty X Specialty Stores
Walts Wharf X Fine Dining
2020-21 Percent of Fiscal Year Total Paid by Top 25 Accounts = 68.11% 2011-12 Percent of Fiscal Year Total Paid by Top 25 Accounts = 75.51% Firms Listed Alphabetically: Period July Thru March
Source: Hinderliter, de Llamas & Associates, State Board of Equalization City of Seal Beach
Current Year and Ten Years Ago
Top 25 Sales Tax Producers
166
Function 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 General government 13.83 10.97 10.56 14.64 14.34 15.92 13.00 13.48 13.48 14.75 Public safety 64.77 63.91 76.78 79.13 74.12 77.19 78.50 79.82 79.82 80.78 Public works 8.36 11.49 11.03 10.94 4.97 3.98 6.00 5.00 5.00 17.99 Community
development 8.80 10.60 12.01 18.16 17.25 16.53 13.60 14.76 14.76 13.88 Water 12.48 12.29 12.60 13.80 13.82 12.60 12.90 13.15 13.15 8.90 Sewer 3.95 3.95 5.28 5.91 7.11 7.69 6.71 6.89 6.89 5.86 Total 112.19 113.21 128.26 142.58 131.61 133.91 130.71 133.10 133.10 142.16 Source: Finance Department, City of Seal Beach
Fiscal Year
Last Ten Fiscal Years
Full-Time and Part-Time City Employees by Function
City of Seal Beach
167
2012 2013 2014 2015 2016
Police:

Arrests 705 819 758 798 790
Parking citations issued 18,528 18,451 18,931 21,043 19,264 Public works:

Street centerline miles resurfaced 2 2 1 2 1
Number of public right of way permits issued 127 96 140 151 184 Number of street related service requests 121 134 35 45 40 Parks and recreation:

Number of recreation classes 456 2,156 678 781 680
Number of facility rentals 562 3,182 1,763 2,633 557
Water:

Number of water meters replaced 112 128 85 57 76
Acre feet of water used 3,534 3,818 3,878 3,540 3,208
Sewer:

Number of feet of sewer cleaned 203,584 245,986 253,099 253,099 217,619 Number of catch basins cleaned 417 417 401 434 458
Source: City of Seal Beach
Fiscal Year
City of Seal Beach
Operating Indicators by Function
Last Ten Fiscal Years
168
2017 2018 2019 2020 2021
Police:

Arrests 781 854 787 709 806
Parking citations issued 18,319 19,929 17,663 20,913 28,644 Public works:

Street centerline miles resurfaced - 1 1 4 3
Number of public right of way permits issued 259 231 253 242 232 Number of street related service requests 68 109 92 44 39 Parks and recreation:

Number of recreation classes 710 1,070 1,100 790 1,113
Number of facility rentals 585 1,030 1,045 690 314
Water:

Number of water meters replaced 56 49 49 104 154
Acre feet of water used 3,259 3,208 3,360 3,276 3,471
Sewer:

Number of feet of sewer cleaned - 217,619 154,000 146,619 126,563 Number of catch basins cleaned 216 216 216 216 217
Source: City of Seal Beach
Last Ten Fiscal Years
Operating Indicators by Function (Continued)
City of Seal Beach
Fiscal Year
169
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Police:

Stations 2222222222
Patrol units 34 34 34 34 34 34 34 34 34 34
Public works:

Streets (center line miles) 43 43 43 43 43 43 43 43 43 43 Sidewalk (miles) 86 86 86 86 86 86 86 86 86 86
Signalized intersections 23 23 23 23 23 23 23 23 23 23
Parks and recreation:

Parks 10 10 10 10 10 10 10 10 10 10
Community centers 3333333333
Water:

Water pipe (miles) 72 72 72 72 72 72 72 72 72 72
Reservoirs 2222222222
Sewer
Sanitary sewers (miles) 37 37 37 37 37 37 37 37 37 37
Storm sewers (miles) 4444444444
Sewer lift/pump stations 7777777777
Source: City of Seal Beach
City of Seal Beach
Capital Asset Statistics by Function
Last Ten Fiscal Years
Fiscal Year
170
City of Seal Beach
Seal Beach, California
Independent Accountants’ Report on
Applying Agreed-Upon Procedures to
Appropriations Limit Schedule
For the Year Ending June 30, 2021
INDEPENDENT ACCOUNTANTS’ REPORT ON

APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of City Council
of the City of Seal Beach
Seal Beach, California
We have performed the procedures enumerated below, which were agreed to by the City of Seal Beach, California (the “City”) and the League of California Cities (as presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution) on assisting you in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution for the year ending June 30, 2021. The City’s management is responsible for the Appropriations Limit Schedule. The sufficiency of these procedures is solely the responsibility of the City. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or any other purpose.

The procedures performed and associated findings are as follows:

1. We obtained the completed worksheets used by the City to calculate its appropriations limit for the year ending June 30, 2021, and determined that the limit and annual calculation factors were adopted by resolution of the City Council. We also determined that the population and inflation options were selected by a recorded vote of the City Council.

Finding: No exceptions were noted as a result of our procedures.

2. For the accompanying Appropriations Limit Schedule, we added the prior year’s limit to the total adjustments, and agreed the resulting amount to the current year’s limit.

Finding: No exceptions were noted as a result of our procedures.

3. We agreed the current year information presented in the accompanying Appropriations Limit Schedule to corresponding information in worksheets used by the City.

Finding: No exceptions were noted as a result of our procedures.

4. We agreed the appropriations limit presented in the accompanying Appropriations Limit Schedule to the appropriations limit adopted by the City Council.

Finding: No exceptions were noted as a result of our procedures. 200 E. Sandpointe Ave., Suite 600, Santa Ana, California 92707 Tel: 949-777-8800 • Fax: 949-777-8850
www.pungroup.cpa
To the Honorable Mayor and Members of City Council
of the City of Seal Beach
Seal Beach, California

2 This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on assisting you in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution.

Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties.

Santa Ana, California
June 15, 2021
City of Seal Beach
Appropriations Limit Schedule
For the Year Ending June 30, 2021
3 Amount Source
A. Appropriations Limit FY 2019-2020 31,209,347 $ Prior year appropriation limit adopted by the City
B. Calculation Factors:
1) Population increase % 0.9958 California Department of Finance 2) Inflation increase % 1.0373 California Department of Finance 3) Total adjustment % 1.0329 (B1 x B2)
C. Annual Adjustment Increase 1,028,140 {(B3-1) x A}
D. Other Adjustments:
1) Loss responsibility (-) - N/A
2) Transfer to private (-) - N/A
3) Transfer to fees (-) - N/A
4) Assumed responsibility (+) - N/A
E. Total Adjustments 1,028,140 (C + D)
F. Appropriations Limit FY 2020-2021 32,237,487 $ (A + E) See Accompanying Notes to Appropriations Limit Schedule.

City of Seal Beach
Notes to Appropriations Limit Schedule
For the Year Ending June 30, 2021
4 Note 1 – Purpose of Limited Procedures Review
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to a limited procedures review in connection with the annual audit.

Note 2 – Method of Calculation
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.

Note 3 – Population Factors
A California governmental agency may use as its population factor either the annual percentage change of the jurisdiction’s own population or the annual percentage change in population of the county where the jurisdiction is located. The factor adopted by the City for the year ending June 30, 2021, represents the annual percentage change in population for the City of Seal Beach.

Note 4 – Inflation factors
A California governmental agency may use as its inflation factor either the annual percentage change in the 4th quarter per capita personal income (which percentage is supplied by the California Department of Finance) or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City for the year ending June 30, 2021, represents the annual percentage change in per capital personal income.

Note 5 – Other Adjustments
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity.

The City had no such adjustments for the year ending June 30, 2021.

Agenda Item I

AGENDA STAFF REPORT
DATE: March 14, 2022
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Gloria D. Harper, CMC, City Clerk
Craig A. Steele, City Attorney
Chelsea Straus, Assistant City Attorney
SUBJECT: Introduction of Ordinance Re-Adopting the City Council District Map Based on 2020 U.S. Census Data
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council:

1. Open and conduct a public hearing to receive public input regarding the designated map of City Council election district boundaries for readoption based on 2020 U.S. Census data and other factors; and,

2. Introduce, waive full reading, and read by title only Ordinance 1693, an Ordinance of the City Council of the City of Seal Beach Re-Adopting the Current City Council District Map as the New Official City Council District Map of the Boundaries of City Council Election Districts Based on the Results of the 2020 U.S. Census.

BACKGROUND AND ANALYSIS:

The purpose of this final redistricting public hearing is to receive any input from the public regarding the designated map of City Council election district boundaries for re-adoption based on 2020 U.S. Census data and other factors, and to introduce Ordinance 1693, which re-adopts the current City Council district map as the new Official Council District Map.

As the City Council is aware, after every federal Census, jurisdictions with districtbased election systems, like the City of Seal Beach, must review voting district boundaries to ensure that the districts are still legally compliant. The most basic requirement is that each district must be substantially equal in population, in order to protect the concept of “one person, one vote.” The Fair Maps Act, which was passed by the California Legislature as AB 849 and became effective on January 1, 2020, provides that the City Council must adopt district boundaries using four criteria set forth in order of priority in the Elections Code unless a charter city has

adopted “comprehensive or exclusive” redistricting criteria in its city charter. The Charter of the City of Seal Beach provides “comprehensive” redistricting criteria.

The City Charter specifies that voting districts must be geographically contiguous, geographically compact, and provide fair representation on the City Council.

These criteria are similar to the criteria articulated in the Fair Maps Act, but the City Charter’s criteria are controlling.

The Fair Maps Act process requires the City to conduct at least four public hearings to seek input from the public on the drawing of district maps. At the end of the redistricting process, the City Council must re-adopt voting districts in time for the 2022 City elections. The deadline for map adoption will be April 18, 2022. If no changes to district boundaries are required or deemed advisable under the “substantially equal” standard and City Charter criteria, the City Council may readopt existing boundaries.

On December 13, 2021, the City Council held its first redistricting public hearing.

City Charter Section 515 requires the City Council to appoint a committee to study the redistricting issue and report back to the City Council on the advisability of redistricting. At that first redistricting public hearing, the City Council designated Councilmembers Massa-Lavitt and Sustarsic as the subcommittee to review 2020 U.S. Census data and the boundaries of City Council districts and report back to the City Council as to whether those boundaries should be adjusted based on new Census data or other factors. The City Council also authorized the City Manager to engage a consultant or service to provide a population analysis of the 2020 U.S.

Census data.

The National Demographics Corporation (“NDC”) provided a population analysis of the 2020 U.S. Census data for the City. The current total population of the City is 25,282, so the ideal population for each district is approximately 5,056. A total of the deviations from the ideal populations of less than 10% is generally considered “de minimis” and constitutionally acceptable. The City’s total deviation from the ideal population is 7.18%, so the City’s current District Map is acceptable under the law.

On February 15 and February 22, 2022, the Redistricting Subcommittee held the City’s second and third redistricting public hearings to provide members of the public with an opportunity to provide input on the composition of City Council voting districts based on 2020 U.S. Census data or other factors. The current District Map was provided as the proposed draft map for re-adopting district boundaries based on 2020 U.S. Census data. At the Redistricting Subcommittee Meeting on February 22, 2022, the Subcommittee voted to recommend that the City Council re-adopt the current District Map as the new City Council District Map.

On February 28, 2022, the City Council held the fourth redistricting public hearing.

This public hearing was focused on selecting a City Council district map for adoption based on 2020 U.S. Census data and other factors. The City Council followed the Redistricting Subcommittee’s recommendation and voted to

designate the proposed current district map for re-adoption as the new Official City Council District Map.

The attached Ordinance (Attachment A) is presented for the City Council’s introduction and would re-adopt the current City Council district map as the new Official City Council District Map based on the results of the 2020 U.S. Census.

The City has held all required duly-noticed public hearings to receive input from the Seal Beach community regarding the composition of the City Council district boundaries. The schedule for the required public hearings and the introduction and adoption of the Ordinance re-adopting district boundaries is as follows:

The City has created a redistricting page on the City’s website at https://www.sealbeachca.gov/Government/Redistricting-2021, which is a central location for all information related to the redistricting process. The City has met all of the public outreach requirements of state law.

ENVIRONMENTAL IMPACT:

There is no environmental impact related to this item.

LEGAL ANALYSIS:

The City Attorney’s office prepared this report and will continue to advise throughout the District boundary review.

FINANCIAL IMPACT:

There will be charges for demographic consulting and legal expenses that will be significantly below the City Manager’s contract authority.

Public Hearings Date
Public Hearing No. 1 – Council Meeting Monday, December 13, 2021 at 7:30 p.m.

Public Hearing No. 2 – Redistricting Subcommittee
Meeting
Tuesday, February
15, 2022 at 6:00 p.m.

Public Hearing No. 3 – Redistricting Subcommittee
Meeting
Tuesday, February
22, 2022 at 2:00 p.m.

Public Hearing No. 4 – Council Meeting
Final Map Selection
Monday, February
28, 2022 at 7:30 p.m.

Council Meeting
Introduction of Ordinance Re-adopting Council District
Boundaries
Monday, March 14,
2022 at 7:30 p.m.

Council Meeting
Second Reading of Ordinance Re-adopting
Council District Boundaries - Tentative
Monday, March 28,
2022

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

MEASURE BB:

This item is not applicable to Measure BB, the Seal Beach Neighborhood and Essential Services Protection Measure.

RECOMMENDATION:

That the City Council:

1. Open and conduct a public hearing to receive public input regarding the designated map of City Council election district boundaries for readoption based on 2020 U.S. Census data and other factors; and,

2. Introduce, waive full reading, and read by title only Ordinance 1693, an Ordinance of the City Council of the City of Seal Beach Re-Adopting the Current City Council District Map as the New Official City Council District Map of the Boundaries of City Council Election Districts Based on the Results of the 2020 U.S. Census.

ATTACHMENTS:

A. Proposed Ordinance 1693
SUBMITTED BY: NOTED AND APPROVED:

Craig Steele Jill R. Ingram
Craig A. Steele, City Attorney Jill R. Ingram, City Manager Gloria D. Harper
________________________
Gloria D. Harper, CMC, City Clerk
ORDINANCE 1693

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEAL

BEACH RE-ADOPTING THE CURRENT CITY COUNCIL DISTRICT

MAP AS THE NEW OFFICIAL CITY COUNCIL DISTRICT MAP OF THE

BOUNDARIES OF CITY COUNCIL ELECTION DISTRICTS BASED ON
THE RESULTS OF THE 2020 U.S. CENSUS
WHEREAS, Section 515 of the City Charter provides that the five Seal Beach City Council Members shall be elected by districts; and,
WHEREAS, pursuant to Elections Code Section 21621 and Section 515 of the City Charter, the City Council is required to review the boundaries of voting districts and readopt district boundaries following each decennial U.S. Census to ensure that voting districts remain substantially equal in population and still protect the rights of members of communities of interest to vote for the candidates of their choice; and, WHEREAS, City Council district boundaries must comply with the United States Constitution, the California Constitution, the California Elections Code, and the federal Voting Rights Act of 1965; and,
WHEREAS, the Fair Maps Act, which was passed by the California Legislature as AB 849 and became effective on January 1, 2020, requires the City Council to re-adopt district boundaries based on the current U.S. Census data using four criteria set forth in order of priority in the Elections Code unless a charter city has adopted “comprehensive or exclusive” redistricting criteria in its city charter; and, WHEREAS, the Charter of the City of Seal Beach provides the following comprehensive redistricting criteria: (1) voting districts must be geographically contiguous; (2) voting districts must be geographically compact; and (3) voting districts must provide fair representation on the City Council; and, WHEREAS, the City Charter requires the City Council to appoint a committee to study and report back to the City Council on the advisability of redistricting after each U.S.

Census; and,
WHEREAS, on December 13, 2021, the City Council designated two Council Members as the subcommittee to review 2020 U.S. Census data and the boundaries of City Council districts and report back to the City Council as to whether those boundaries should be adjusted based on new Census data or other factors; and, WHEREAS, the City Council may re-adopt existing boundaries if no changes to district boundaries are required or deemed advisable under the “substantially equal in population” standard; and,
WHEREAS, a total population deviation of the City’s districts of less than 10% from the ideal district population is generally considered “de minimis” and constitutionally acceptable; and,
WHEREAS, the City’s total deviation from the ideal population under its current district boundaries is 7.18%; and ,
WHEREAS, on February 22, 2022, the Redistricting Subcommittee voted to recommend that the City Council re-adopt the current District Map as the new City Council District Map. The new Official City Council District Map is attached hereto as Exhibit “A” with demographic data supporting the map based on 2020 U.S. Census data. Pursuant to Elections Code Section 21628(d)(1), the selected district map was published on the City’s redistricting webpage on February 15, 2022; and, WHEREAS, on February 28, 2022, the City Council voted to designate the current District Map for re-adoption as the new Official City Council District Map of election voting district boundaries for the City of Seal Beach; and,
WHEREAS, in accordance with Elections Code Sections 21627 and 21627.1, the City Council and the Redistricting Subcommittee of the City Council held all required dulynoticed public hearings to receive input from the Seal Beach community regarding the composition of the City Council district boundaries. These public hearings were held on December 13, 2021, February 15, 2022, February 22, 2022, February 28, 2022, and March 14, 2022. Notice of each redistricting public hearing was published in the SUN Newspaper pursuant to the requirements of Elections Code Section 21628(c); and, WHEREAS, the boundaries of the City Council Districts established by the sodesignated Official City Council District Map are contiguous, geographically compact, and provide all Seal Beach residents with fair representation on the City Council.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES HEREBY ORDAIN AS FOLLOWS:

Section 1. The City Council finds that each fact set forth in the preceding recitals is true and correct.

Section 2. Section 2.05.010 of Chapter 2.05 of Title 2 of the Seal Beach Municipal Code is hereby amended in its entirety to read as follows:
“2.05.010. 2020 Census Redistricting.

The five (5) political subdivisions or districts set forth in this chapter are in accordance with the city charter, Elections Code Section 21620 et seq., and all applicable provisions of law. No political subdivision or district adjustments are necessary based on the results of the 2020 U.S. Census. The Official City Council District Map for the City of Seal Beach shall be the map attached as Exhibit A to Ordinance 1693.

Section 3. The map attached to this Ordinance as Exhibit “A,” and incorporated herein by this reference, is hereby approved and re-adopted as the Official City Council District Map for the City of Seal Beach. The district boundaries in the Official City Council District Map are unchanged from the current district boundaries described in Section 2.05.005 of the Seal Beach Municipal Code.

Section 4. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining portions of this Ordinance shall nonetheless remain in full force and effect. The City Council of the City of Seal Beach hereby declares that it would have adopted each section, subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable.

Section 5. The City Clerk shall certify to the passage and adoption of this Ordinance, and the City Clerk shall cause this Ordinance or a summary thereof to be published and posted in the manner required by law. Pursuant to Government Code Section 36937(a), this Ordinance shall be effective upon its adoption as it is an ordinance relating to an election.

INTRODUCED at a regular meeting of the City Council of the City of Seal Beach held on March 14, 2022.

PASSED, APPROVED AND ADOPTED this ______ day of __________ 2022. __________________________
Joe Kalmick, Mayor
ATTEST:
____________________________
Gloria D. Harper, City Clerk

APPROVED AS TO FORM
____________________________
Craig Steele, City Attorney
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Gloria D. Harper, City Clerk of the City of Seal Beach, do hereby certify that the foregoing Ordinance was introduced for first reading at a regular meeting of the City Council of the City of Seal Beach held on the 14th day of March, 2022, and was passed, approved, and adopted by the City Council at a regular meeting held on the 28th day of March, 2022, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:

And do hereby further certify that Ordinance 1693 has been published pursuant to the Seal Beach City Charter and Resolution Number 2836.

Gloria D. Harper, City Clerk
Exhibit A
City of Seal Beach
Official Council District Map
with Demographics
Legend
City Boundary
District 1
District 2
District 3
District 4
District 5
City Council Districts
±
0 2,250 4,500 9,000
Feet
College Park West
College Park East
Leisure World
U.S. Naval Weapons Station
Old Town
Surfside
Bridgeport Hill
Boeing
Hellman Ranch
Old Ranch
Golf Course
Rossmoor
Center
City of Los Alamitos
City of Long Beach
Los Angeles County Line
P a c i f i c O c e a n
Seal Beach Current Districts
District 1
Total Pop 4,942
Deviation from ideal -114
% Deviation -2.25%
% Hisp 13.7%
% NH White 75%
% NH Black 1%
% Asian-American 7%
Total 4,125
% Hisp 12%
% NH White 84%
% NH Black 0%
% Asian/Pac.Isl. 3%
Total 3,635
% Latino est. 9%
% Spanish-Surnamed 9%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 87%
% NH Black 0%
Total 3,296
% Latino est. 8%
% Spanish-Surnamed 8%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 87%
% NH Black 0%
Total 2,587
% Latino est. 8%
% Spanish-Surnamed 8%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 88%
% NH Black est. 0%
ACS Pop. Est. Total 4,761
age0-19 13%
age20-60 64%
age60plus 24%
immigrants 6%
naturalized 68%
english 93%
spanish 4%
asian-lang 1%
other lang 1%
Language Fluency Speaks Eng. "Less than Very Well" 1%
hs-grad 33%
bachelor 33%
graduatedegree 24%
Child in Household child-under18 15%
Pct of Pop. Age 16+ employed 73%
income 0-25k 9%
income 25-50k 10%
income 50-75k 15%
income 75-200k 45%
income 200k-plus 21%
single family 50%
multi-family 50%
rented 66%
owned 34%
Total population data from the 2020 Decennial Census.

Surname-based Voter Registration and Turnout data from the California Statewide Database.

Latino voter registration and turnout data are Spanish-surname counts adjusted using Census Population Department undercount estimates. NH White and NH Black registration and turnout counts estimated by NDC. Citizen Voting Age Pop., Age, Immigration, and other demographics from the 2015-2019 American Community Survey and Special Tabulation 5-year data.
2 5,168
112

2.22%
12%
64%
2%
20%
4,249
10%
71%
2%
15%
3,967
9%
8%
12%
1%
77%
2%
3,651
9%
8%
12%
1%
77%
2%
3,111
7%
7%
9%
1%
80%
3%
4,835
10%
25%
65%
22%
86%
76%
5%
12%
7%
12%
43%
26%
15%
9%
32%
22%
27%
17%
28%
6%
48%
52%
9%
91%
3 5,182
126

2.49%
16%
67%
3%
9%
3,758
11%
76%
2%
7%
3,541
9%
9%
5%
1%
83%
2%
3,230
9%
8%
5%
1%
84%
2%
2,528
7%
7%
4%
0%
86%
1%
4,882
22%
49%
30%
9%
64%
87%
6%
2%
5%
4%
30%
33%
23%
26%
62%
6%
10%
17%
43%
24%
70%
30%
37%
63%
4 5,171
115

2.27%
14%
61%
2%
20%
3,812
12%
72%
1%
15%
3,831
10%
9%
11%
1%
77%
1%
3,509
10%
9%
10%
1%
78%
1%
2,932
8%
8%
9%
1%
80%
1%
5,117
25%
44%
31%
16%
84%
82%
3%
7%
7%
4%
33%
30%
24%
35%
61%
6%
12%
10%
44%
29%
93%
7%
19%
81%
5 4,819
-237
-4.69%
7%
66%
1%
24%
4,479
6%
74%
3%
17%
4,123
6%
6%
15%
1%
69%
2%
3,784
6%
6%
14%
1%
70%
2%
2,840
5%
5%
10%
1%
77%
3%
4,690
0%
9%
91%
24%
82%
78%
4%
13%
5%
13%
40%
28%
11%
0%
19%
29%
36%
14%
19%
2%
39%
61%
4%
96%
Total
25,282
363

7.18%
13%
67%
2%
16%
20,423
10%
75%
2%
12%
19,097
8%
8%
9%
1%
78%
2%
17,470
8%
8%
9%
1%
79%
2%
13,998
7%
7%
7%
1%
82%
2%
24,285
14%
38%
47%
15%
80%
83%
5%
7%
5%
7%
36%
30%
19%
14%
48%
16%
21%
15%
33%
14%
55%
45%
25%
75%
02/17/2022 15:30 Page 1 of 1
Total Pop
Citizen Voting Age Pop
Voter Registration
(Nov 2020)
Voter Turnout
(Nov 2020)
Voter Turnout
(Nov 2018)
Age
Immigration
Language spoken at home
Education
(among those age 25+)
Household Income
Housing Stats