Seal Beach City Council
May 8, 2023

A G E N D A

MEETING OF THE CITY COUNCIL
Monday, May 8, 2023 ~ 7:00 PM
City Council Chambers
211 Eighth Street
Seal Beach, California

THOMAS MOORE
MAYOR
Second District

SCHELLY SUSTARSIC
MAYOR PRO TEM
Fourth District

JOE KALMICK
COUNCIL MEMBER
First District

LISA LANDAU
COUNCIL MEMBER
Third District

NATHAN STEELE
COUNCIL MEMBER
Fifth District
This Agenda contains a brief general description of each item to be considered. No action or discussion shall be taken on any item not appearing on the agenda, except as otherwise provided by law. Supporting documents, including agenda staff reports, and any public writings distributed by the City to at least a majority of the Council Members regarding any item on this agenda are available on the City’s website at www.sealbeachca.gov.

City Council meetings are broadcast live on Seal Beach TV3 and on the City's website www.sealbeachca.gov). Check the SBTV3 schedule for rebroadcast of — meetings are available ondemand on the website (starting 2012).meeting In compliance with the Americans with Disabilities Act of 1990, if you require disability - related modification or accommodation to attend or participate in this meeting, including auxiliary aids or services, please call the City Clerk' s office at (562) 431 -2527 at least 48 hours prior to the meeting.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

COUNCIL ROLL CALL

APPROVAL OF AGENDA & WAIVER OF FULL READING OF RESOLUTIONS

ORDINANCES
By motion of the City Council this is the time to notify the public of any changes to the agenda and /or rearrange the order of the agenda.

PRESENTATIONS / RECOGNITIONS
• Seal Beach Pickleball Association Report
• Annual Comprehensive Financial Report Presentation

ORAL COMMUNICATIONS
At this time members of the public may address the Council regarding any items within the subject matter jurisdiction of the City Council. Pursuant to the Brown Act, the Council cannot discuss or take action on any items not on the agenda unless authorized by law. Matters not on the agenda may, at the Council' s discretion, be referred to the City Manager and placed on a future agenda.

Those members of the public wishing to speak are asked to come forward to the microphone and state their name for the record. All speakers will be limited to a period of five (5) minutes. Speakers must address their comments only to the Mayor and entire City Council, and not to any individual, member of the staff or audience. Any documents for review should be presented to the City Clerk for distribution.

Supplemental Questions from Council Member Steele
Public Comment from Joyce Ross Parque
CITY ATTORNEY REPORT Nicholas Ghirelli, City Attorney
CITY MANAGER REPORT Jill R. Ingram, City Manager

COUNCIL COMMENTS
General Council Member comments and reporting pursuant to AB 1234.

COUNCIL ITEMS – None

CONSENT CALENDAR
Items on the consent calendar are considered to be routine and are enacted by a single motion with the exception of items removed by Council Members.

A. Approval of the April 24, 2023 City Council Minutes - That the City Council approve the minutes of the Closed Session meeting held April 24, 2023 and minutes of the Regular City Council meeting held on April 24, 2023.

B. Demands on City Treasury (Fiscal Year 2023) May 8, 2023 - Ratification.

C. Report of City Manager and Department Heads Authorized Contracts - That the City Council receive and file the report.

D. Approving and Authorizing Amendment No. to Professional Services Agreement with Ardurra Group, Inc. for the Sewer Pump Station #35 Improvements (CIP SS1903) Project Management Services - That the City Council adopt Resolution 7401: 1. Approving Amendment No. 1 to the Professional Services Agreement with Ardurra Group, Inc., (a) to extend the Agreement term to December 31, 2025, (b) to modify the Scope of Services during the extension by eliminating the 6th Street Alley and Water Replacement (CIP SS1902) and limiting the Scope of Services to the Sewer Pump Station #35 Improvements (CIP SS1903) only, and (c) to update the labor rates during the extension; and, 2. Authorizing the City Manager to execute Amendment No. 1.

E. City of Seal Beach Annual Audit Reports for Fiscal Year Ended June 30, 2022 - That the City Council receive and file the following documents for fiscal year ending June 30, 2022: A. Audit Communication Letter B. Report on Internal Control C. Annual Comprehensive Financial Report (ACFR) D.

Appropriations Limit Final Report.

ITEMS REMOVED FROM THE CONSENT CALENDAR
PUBLIC HEARING – None
UNFINISHED / CONTINUED BUSINESS – None

NEW BUSINESS
F. Consideration of Ordinance 1704 to Add Chapter 7.65 to the Seal Beach Municipal Code to Regulate the Operation of E-Bikes and Other Regulated Mobility Devices on Public Areas - That City Council introduce Ordinance 1704 to add Chapter 7.65 to the Seal Beach Municipal Code, addressing the operation of regulated Mobility Devices, including e-bikes, waive full reading and read by title only. This will provide the City with an ordinance that addresses the safety issues with e-bike operations within the city limits.

ADJOURNMENT
Adjourn the City Council to Monday, May 22, 2023 at 5:30 p.m. to meet in closed session, if deemed necessary.

Seal Beach Pickleball
Association Update
May 8, 2023
History
• On April 11th, 2022 the City Council approved a Memorandum of Understanding (MOU) between the City of Seal Beach and the Seal Beach Pickleball Association(SBPA)
• SBPA promotes the sport of pickleball in Seal Beach
• SBPA shares 10% of all profits from events with the City • SBPA pays all staff costs and court time at approved rates • SBPA uses all funds raised to support the SBTPC and the user experience 2 Seal Beach Pickleball
Association
President:

Kris Vogt
Events and Activities
• 5 round robin events
• 3 fundraising events
• 3 leagues (2 daytime
and 1 evening)
• Professional clinic
with world #2 player
4 Catherine Parenteau Pro Event
Over 400 people have
participated in events
and activities
Catherine Parenteau Clinic
May 5 Potluck
Events and Activities
5 Team Round Robin
Fixed Partner Round Robin
Fixed Partner Round Robin
Volunteer Activities
• Hosted pickleball day with
McAuliffe Middle School (20
students participated)
• Hosted City’s Staff Engagement
Team (SET) for pickleball demo
• Organized Woman Warriors round
robin event with veteran group
• Participated in annual Run Seal
Beach event
6 McAuliffe Middle School Event
Facility Enhancements
• Purchase of 4 new tournament grade
pickleball nets
• Purchase of 16 new outdoor park
benches
• Ongoing support of court crack repair
throughout the facility
• Survey of Membership, and next is
ball fences between courts
7 Benches for all 16 Courts
Organizational Accomplishments
• Board elections held in December
• Monthly meetings with city staff
• Held 3 general member meetings
• Established a full year calendar of
events and activities
• Held monthly board meetings
• Establish social media marketing
• Established and recognized 501(c)(3)
nonprofit
8 General Member Meeting
Thank you
City of Seal Beach
AU-C 260 Communication With
Those Charge With Governance
For the Year Ended June 30, 2022
May 8, 2023
2 CONTENTS
• Our Responsibility in Accordance with Professional Standards • Required Communications (AU-C 260)
• Audit Results
4/26/2023
3 OUR RESPONSIBITY IN ACCORDANCE WITH

PROFESSIONAL STANDARDS
4/26/2023
4 OUR RESPONSIBITY IN ACCORDANCE WITH

PROFESSIONAL STANDARDS
• Form and express an opinion about whether the financial statements prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America
• Our responsibility is to plan and perform the audit to obtain “reasonable” assurance (not “absolute” assurance) about whether the financial statements are free of material misstatements
• We considered internal control over financial reporting. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control
• We evaluated the City’s ability to continue as a going concern 4/26/2023
5 Required Communications (AU-C 260)
4/26/2023
6 Required Communications (AU-C 260)
• Ethics and Independence
• Complied with ALL relevant ethical requirements regarding independence • Significant Accounting Policies
• The City of Seal Beach disclosed all significant accounting policies in Note 1 to the financial statements.
• Implementation of GASB 87 - Leases
• Significant Estimates
• Investment Fair Value
• Depreciation on Capital Assets
• Net Pension Liability
• Net OPEB Liability
4/26/2023
7 Required Communications (AU-C 260)
• Sensitive Disclosures
• Note 1 – Summary of Significant Accounting Policies
• Note 9 – Defined Benefit Pension Plans
• Note 10 – Other Postemployment Benefits (“OPEB”) Plan • Note 13 – Individual Fund Disclosure
• Misstatements
• No material uncorrected misstatement
4/26/2023
8 Required Communications (AU-C 260)
• Consultation with Other Accountants
• Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and other matters. • Significant Difficulties
• We encountered no significant difficulties in dealing with management. • Disagreement with Management
• We did not have any disagreement with management in terms of accounting treatments nor audit procedures performed.
4/26/2023
9 AUDIT RESULTS
4/26/2023
10 Audit Results
• Financial Statements
• Unmodified opinion
• Financial Statements are fairly presented in all material respects • Significant accounting policies have been consistently applied • Estimates are reasonable
• Disclosures are properly reflected in the financial statements • AU-C 265, Communicating Internal Control Related Matters Identified in an Audit
• None Reported
4/26/2023

HQ - ORANGE COUNTY
200 E. Sandpointe Avenue
Suite 600
Santa Ana, CA 92707

SAN DIEGO
4365 Executive Drive
Suite 710
San Diego, CA 92121

BAY AREA
2121 North California Blvd.

Suite 290
Walnut Creek, CA 94596

LAS VEGAS
1050 Indigo Drive
Suite 110
Las Vegas, NV 89145

PHOENIX
4742 North 24th Street
Suite 300
Phoenix, AZ 85016
1 Gloria Harper
From: Jill Ingram
Sent: Monday, May 08, 2023 2:36 PM
Cc: Executive Team; Nicholas Ghirelli; Dana Engstrom
Subject: RE: Questions
Attachments: Steele Warrant Request Info 5.8.23.pdf
BCC: CITY COUNCIL
Please see aƩached responses to Nathan Steele's quesƟons below regarding the Warrant LisƟng on tonight's agenda.

AddiƟonally, in response to Councilmember Steele's quesƟon below regarding vacaƟon calculaƟons, below is the City website link to the various labor MOUs and what pages refer to the calculaƟon for vacaƟon for each of the respecƟve groups.
hƩps://www.sealbeachca.gov/Departments/Human-Resources/Labor-Agreement Mid-Management and ConfidenƟal - page 12 Seal Beach Supervisors and Professionals AssociaƟon - page 11 Orange County Employees AssociaƟon - page 25 Seal Beach Marine Safety Management AssociaƟon - pages 11 & 12 Police Management AssociaƟon - page 22 Police Officers AssociaƟon - page 20 As always, please let me know if you have any addiƟonal quesƟons. Also, please let me know ASAP if you plan to pull any Consent Calendar items so that staff and the Clerk's Office are prepared for a staff presentaƟon tonight.

Thank you,
Jill
Jill R. Ingram, ICMA-CM
City Manager
City of Seal Beach - 211 Eighth Street, Seal Beach, CA 90740 (562) 431-2527, Ext. 1300

Civility Principles:

1. Treat everyone courteously;

2. Listen to others respecƞully;

3. Exercise self-control;

4. Give open-minded consideraƟon to all viewpoints; 5. Focus on the issues and avoid personalizing debate; and, 6. Embrace respecƞul disagreement and dissent as democraƟc rights, inherent components of an inclusive public process, and tools for forging sound decisions.

For InformaƟon about Seal Beach, please see our city website: www.sealbeachca.gov NOTICE: This communicaƟon may contain privileged or other confidenƟal informaƟon. If you are not the intended recipient of this communicaƟon, or an employee or agent responsible for delivering this communicaƟon to the intended recipient, please advise the sender by reply email and immediately delete the message and any aƩachments without copying or disclosing the contents. -----Original Message-----
2 From: Nathan Steele <[email protected]>
Sent: Sunday, May 7, 2023 7:09 PM
To: Jill Ingram <[email protected]>
Subject: QuesƟons
Looking down the checks, I have a few quesƟons:

Richards Watson Gershon - $22,000
Training manikins - $4853 - CPR?
Fallen tree removal - $6300
City Vehicle Lease - $25,000. 001525
Base Hill Inc. - $21,000
Dixon Resources - $3750 (San Diego)
Gillis + Panichapan - $6000. In 2 checks KMJ Investments - $165,549. Machine rebuilt NaƟonal Plant Services - $43,743 Coaching Package - $11,000 Climatec Lease agreement - City of Seal Beach Cycle 9? SCE is $25K a month?
Building and safety staff is $56K a month?
ICMA?
16 separate PERS checks? How much to PERS?
And $161,690 to CALPERS?
VacaƟon: how is it calculated?
Thank you….

Richards Watson Gershon - $22,000
Monthly retainer for general legal services.

Training manikins - $4853 - CPR?
Marine Safety provides safety training for personnel on American Heart Association CPR certification. Additionally, as part of our Citywide AED Program, Marine Safety trains all staff in CPR and first aid and utilizes these manikins.

Fallen tree removal - $6300
Trees were uprooted during winter storms in Gum Grove Park. This payment is for the tree removal.

City Vehicle Lease - $25,000. 001525
The payment comprises two payments: $17,883.47 for the City’s leased vehicles for February and outfitting of the Police Interceptor. $7,037.64 is for leased vehicles for the month of March.

Base Hill Inc. - $21,000
Base Hill provides janitorial services to the City. This amount comprises two payments, $19,959.02 for Citywide services and $2,053.00 for janitorial services at 1
st Street.

Dixon Resources - $3750 (San Diego)
Dixon provides parking management services to the City, including overall parking guidance, best practice models, and technology solutions.

Gillis + Panichapan - $6000. In 2 checks
Gillis + Panichapan is the architect retained to provide Seal Beach Pier Restroom and Tennis & Pickleball Court design services.

KMJ Investments - $165,549
This payment is for the Broyhill trash beach dumper vehicle that was programmed in the budget.

National Plant Services $43,743
National Plant Services was contracted to provide sewer CCTV and cleaning services. This invoice is their February 2023 progress payment.

Coaching Package - $11,000
As part of the Police Department succession planning, this payment is for an executive coaching program for our two Police Lieutanants. This program is paid through a grant.

Climatec Lease agreement –
The City entered into an agreement with Climatec in 2016 to complete a series of energy efficiency upgrades. This invoice is payment for the financed improvements.

City of Seal Beach Cycle 9?
This is for the Citywide payment for water, sewer, street sweeping, and tree trimming.

SCE is $25K a month?
SCE total payment on 4/27/2023 was $18,583.57, which includes services citywide.

Building and safety staff is $56K a month?
The City contracts with Transtech for Building and Safety services. The two invoices reflect the contract, which splits the work into two services.

1. Contract staff, which includes approximately 1.25 FTE building permit technicians, 1 FTE building inspector, and Building Official services, which are as needed and typically constitute less than one-eighteenth of an FTE but is dependent upon activity levels. These services are based on an hourly rate.

2. Plan check service costs are billed at 65% of plan check fees charged.

ICMA?
Now called Mission Square, payments are for 457 Deferred Compensation Plan per MOU agreements and include Employee and Employer payments. 16 separate PERS checks? How much to PERS?
Separate payments include payroll corrections, retroactive, and regular pay based on various rates including PEPRA, Classic, Employee and Employer costs. $ 113,235.74
And $161,690 to CALPERS?
This is for the Health Premium payment for the month of May for all current and eligible retirees.

Agenda Item A

AGENDA STAFF REPORT
DATE: May 8, 2023
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Gloria D. Harper, City Clerk
SUBJECT: Approval of the April 24, 2023 City Council Minutes ________________________________________________________________ SUMMARY OF REQUEST:

That the City Council approve the minutes of the Closed Session meeting held April 24, 2023 and minutes of the Regular City Council meeting held on April 24, 2023.

BACKGROUND AND ANALYSIS:

This section does not apply.

ENVIRONMENTAL IMPACT:

There is no environmental impact related to this item.

LEGAL ANALYSIS:

No legal analysis is required for this item.

FINANCIAL IMPACT:

There is no financial impact for this item.

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

RECOMMENDATION:

That the City Council approve the minutes of the Closed Session meeting held April 24, 2023 and minutes of the Regular City Council meeting held on April 24, 2023.

SUBMITTED BY: NOTED AND APPROVED:

Gloria D. Harper Jill R. Ingram
Gloria D. Harper, City Clerk Jill R. Ingram, City Manager Prepared by: Dana Engstrom, Deputy City Clerk
ATTACHMENTS:

A. Minutes – Closed Session, April 24, 2023
B. Minutes – Regular Session, April 24, 2023
Seal Beach, California
April 24, 2023
The City Council met for a Special Closed Session meeting at 5:30 p.m. in the City Hall Conference Room.

ROLL CALL

Present: Mayor Moore
Council Members: Sustarsic, Landau, Steele, Kalmick

Absent: None
City Staff: Nicholas Ghirelli, City Attorney
Jill R. Ingram, City Manager
Patrick Gallegos, Assistant City Manager
Barbara Arenado, Director of Finance/City Treasurer
Iris Lee, Public Works Director
Gloria D. Harper, City Clerk
David Spitz, Associate Engineer

PUBLIC COMMUNICATIONS
Mayor Moore opened oral communications. City Clerk Harper announced that were no supplemental communications received. Mayor Moore then closed oral communications.

CLOSED SESSION
A. Conference with Legal Counsel - Significant Exposure to Litigation pursuant to Government Code Section 54956(d)(2) Former BKK Main Street Landfill in Carson DTSC Settlement Agreement and Consent Order Docket No. HAS-CO 05/06-114 B. Conference with Real Property Negotiators Government Code Section 54956.8 Requested underground utility easements at City-owned property located generally at 12800 Seal Beach Boulevard and APNs 217- 361-01 and -03, and 217-371-09 Under negotiation: Price and terms City negotiators: City Attorney and City Manager Negotiating parties: OCTA, Southern California Edison, and Frontier Communications C. CONFERENCE WITH LABOR NEGOTIATOR Government Code §54957.6 City Negotiator(s): City Manager Employee Organization(s): Seal Beach Supervisors & Professionals Association Mid-Management and Confidential Employees Association Council Member Landau recused herself from participating in item D.

D. Conference with Legal Counsel Pending Litigation Pursuant to Government Code Section 54956.9(d)(1) Beach House at the River, LLC v. City of Seal Beach Orange County Superior Court Case No. 30-2023-01314997-CU-MC-CJC

ADJOURNMENT
Mayor Moore adjourned the Special Closed Session meeting at 6:55 p.m.

Gloria D. Harper, City Clerk
City of Seal Beach
Approved:

Thomas Moore, Mayor
Attested:

Gloria D. Harper, City Clerk
Seal Beach, California
April 24, 2023
The City Council met in regular session at 7:00 p.m. in the City Council Chamber.

Council Member Landau led the Pledge of Allegiance.

ROLL CALL

Present: Mayor Moore
Council Members: Kalmick, Landau, Steele, Sustarsic

Absent: None
City Staff: Nicholas Ghirelli, City Attorney
Jill R. Ingram, City Manager
Patrick Gallegos, Assistant City Manager
Michael Henderson, Police Chief
Nick Bolin, Marine Safety Officer, Marine Safety Department Alexa Smittle, Director of Community Development
Barbara Arenado, Director of Finance/City Treasurer
Iris Lee, Public Works Director
Gloria D. Harper, City Clerk
Dana Engstrom, Deputy City Clerk
Craig Covey, Division 1 Chief, Orange County Fire Authority Bryan Mahon, Battalion Chief, Orange County Fire Authority Nick Nicholas, Police Captain
Mike Ezroj, Police Captain
Brian Gray, Police Sergeant/Emergency Services Coordinator Shaun Temple, Planning Manager
Marco Cuevas, Jr., Associate Planner
David Spitz, Associate Engineer
Sean Sabo, Management Analyst
Tim Kelsey, Recreation Manager

APPROVAL OF AGENDA & WAIVER OF FULL READING OF RESOLUTIONS AND

ORDINANCES
Eleven supplemental items were received after the posting of the agenda and were distributed to the City Council and made available to the public.

Council Member Landau pulled Item D for separate consideration.

Council Member Steele moved, second by Mayor Pro Tem Sustarsic, to approve the agenda with exception of Item D.

AYES: Kalmick, Landau, Moore, Steele, Sustarsic
NOES: None
ABSENT: None
ABSTAIN: None
Motion carried

PRESENTATIONS / RECOGNITIONS
• World Wish Day Proclamation
• Annual Professional Municipal Clerks Week – April 30 – May 6, 2023 • Run Seal Beach – William T. Ayres Awards
• Seal Beach Symphony Presentation – Chad Berlinghieri
• Orange County Fire Authority Pier Drill De-Brief Presentation – Battalion Chief Bryan Mahon

PUBLIC COMMUNICATIONS
Mayor Moore opened oral communications. Speakers: Patty Campbell, Carol Churchill, Patty Cenacle. Mayor Moore closed oral communications.

CITY ATTORNEY REPORT
City Attorney Ghirelli indicated that the City Council met in Closed Session to discuss the four items posted on the Closed Session agenda. All Council Members were present with Council Member Landau rescuing herself on item D. On Item B, the City Council authorized five (5) underground utility easements with Southern California Edison for the I-405 project, noting all are fair market value.

CITY MANAGER REPORT
City Manager Ingram thanked the Council for their ongoing leadership in support of Strategic Planning and noted that the Workshop Report is available on the City’s website.

She indicated that as a result of the meeting, staff is working on Council norms for consideration by the Council as a follow-up item.

She thanked Battalion Chief Bryan Mahon and Division Chief Craig Covey for the Pier Drill De-Brief Presentation, noting how outstanding the training exercise was and that the exercise included the collaboration of all the City’s public safety partners.

City Manager Ingram reported that all Council Members have met with staff for Budget briefings in preparation for the upcoming Budget Workshops scheduled for May 1, 2023 at 4:00 p.m., and May 2, 2023 at 5:30 p.m. She thanked Finance Director Barbara Arenado and Finance Manager Alayna Hoang for the countless hours dedicated to finalizing the draft budget document to allow Council adequate time to review.

Additionally, she encouraged residents to attend and participate in the Budget Workshops.

City Manager Ingram indicated that she attended the Parking 101 meeting with Council Member Landau and Council Member Steele. She thanked Chief Henderson, his Command staff and the City’s Parking Manager Julie Dixon for coordinating the meeting and for providing a tour of the Police Department.

Additionally, she noted that she attended the Leisure World/City working group meeting along with Mayor Moore and Council Member Steele; and the Los Alamitos Unified School District/City working group meeting along with Council Member Landau and Mayor Pro Tem Sustarsic. City Manager Ingram reported that she and Council Member Kalmick attended a Coastal Erosion Round Table meeting sponsored by Senator Nguyen.

City Manager Ingram recognized and congratulated Lieutenant Nick Bolin on his recent promotion to Marine Safety Lieutenant and congratulated current Marine Safety Lieutenant Chris Pierce on his upcoming retirement in June 2023.

Lastly, City Manager Ingram briefed Council on some upcoming short and long term agenda items, which include the upcoming Budget Workshops, Adoption of the FY 2023-24 Annual Budget at the May 22nd meeting, receive and file of the 2022 Annual Comprehensive Financial Report, Adoption of the Housing Element, Zoning Code update, Accessory Dwelling Unit Ordinance revision, Adoption of the Local Coastal Plan, and the Chevron Station project located at 13th Street and PCH.

COUNCIL COMMENTS
Council Member Kalmick reported that he attended the Orange County Fire Authority (OCFA) simulated fire event on the Seal Beach Pier and a Ropes and Rigging Drill conducted at the AES Power Plant. He reported that he also attended the Active Shooter Drill at McGaugh Elementary School that was held in conjunction with OCFA and the Seal Beach Police Department. Additionally, he reported that he attended the Ground Water Replenishment System Ceremony and received a tour. He attended a simulation of a flight crash at the John Wayne Airport, and the transfer of ownership of the Red Car from the Lions Club to the Seal Beach Historic Resources Foundation.

Council Member Steele reported that he went on a tour of the Orange County Sanitation District plant in Huntington Beach and was highly impressed. He noted that he attended the West Orange County Water Board meeting with Public Works Director Iris Lee as well as two (2) Orange County Mosquito and Vector Control District meetings. Additionally, he noted that he attended an Old Town tour conducted by Joe Kalmick and the Golden Age Foundation’s 50th Anniversary Celebration. Lastly, he noted that attended the Parking 101 meeting and enjoyed a wonderful tour of the Police Department.

Mayor Pro Tem Sustarsic reported her attendance at the Strategic Planning Workshop, an Orange County Sanitation District Operations Committee meeting, a tour of the Orange County Sanitation District plant in Huntington Beach, a Metropolitan Water District of Orange County Elected Official Forum, the Chamber of Commerce Breakfast meeting and the Active Shooter Training at McGaugh Elementary School. Additionally, she noted that she attended the Ground Water Recycling System Dedication, the Los Alamitos Unified School District Working Group meeting, the transfer of ownership of the Red Car from the Lions Club to the Seal Beach Historic Resources Foundation, the Regional Military Affairs Committee meeting where it was noted that all four (4) of the local commanders are women.

Council Member Landau reported her attendance at a meeting with the Seal Beach Police Department to discuss homelessness. She noted that as a result of the meeting, there will be a Facebook live event in June to provide more information to the community regarding this ongoing unhoused issue. She noted that she attended Congresswoman Nguyen’s press conference hosted by Chief Henderson regarding the fight against the fentanyl crisis in Orange County, took a tour of the Boeing facility, a tour of Police Department, attended the Strategic Planning Workshop, the Parking 101 meeting, the monthly Leo meeting, the Ribbon Cutting Ceremony for Coast Pizza, and the transfer of ownership of the Red Car from the Lions Club to the Seal Beach Historic Resources Foundation. Lastly, she encouraged residents interested in becoming a Neighbor for Neighbor Block Captain to contact Sergeant Gray and noted that the next meeting will be held on May 30, 2023, at the Seal Beach Police Station.

Mayor Moore reported that he attended Congresswoman Nguyen’s press conference hosted by Chief Henderson regarding the fight against the fentanyl crisis in Orange County, toured the Boeing facility noting how impressive it was, the Strategic Planning Workshop, the Leisure World Working Group meeting, the Ribbon Cutting Ceremony at Coast Pizza, the 50th Anniversary of the Golden Age Foundation, and the transfer of the Red Car from the Lions Club to the Seal Beach Historic Resources Foundation.

COUNCIL ITEMS
There were no council items.

CONSENT CALENDAR
Mayor Pro Tem Sustarsic moved, second by Council Member Kalmick, to approve the recommended actions on the consent calendar with exception of Item D.

A. Approval of City Council Minutes - That the City Council approve the minutes of the Closed Session meeting held March 17, 2023, minutes of the Regular City Council meeting held on March 27, 2023, and minutes of the
April 4, 2023 Strategic Planning Workshop.

B. Demands on City Treasury (Fiscal Year 2023) April 24, 2023 - Ratification.

C. Monthly Investment Report – March 31, 2023 - Receive and file.

D. Awarding and Authorizing Execution of a Professional Services Agreement with Southstar Engineering and Consulting, Inc., for the Lampson Avenue Bike Lane Gap Closure (CIP ST1811) – Construction Management Services - That the City Council adopt Resolution 7391: 1. Awarding a Professional Services Agreement to Southstar Engineering and Consulting, Inc., in a not-to-exceed amount of $110,252 to provide construction management services for the Lampson Avenue Bike Lane Gap Closure Project (CIP ST1811) (“Project”); and, 2. Authorizing and directing the City Manager to execute the Agreement; and, 3. Authorizing the City Manager to approve additional work requests up to the total amount of $10,000 in connection with the Project; and, 4. Rejecting all other proposals.

E. California Energy Commission Grant - That the City Council adopt Resolution 7392:

1. Authorizing the City to receive a $40,000 grant for implementation of an automated solar permitting system; and, 2. Directing
staff to take necessary steps to execute the grant agreement.

F. Awarding and Authorizing Execution of a Professional Services Agreement with Sierra Analytical Labs, Inc. for Water Quality Analyses and Sampling Services - That the City Council adopt Resolution 7393: 1. Awarding a Professional Services Agreement to Sierra Analytical Labs, Inc., in the not-to-exceed amount of $41,700 per year for a total not-to-exceed amount of $125,100 for a three-year original term to provide Water Quality Analyses and Sampling Services; and, 2. Authorizing and directing the City Manager to execute the Agreement; and, 3. Authorizing the City Manager to approve any unforeseen additional analyses and sampling, up to the total notto-exceed amount of $5,000 per year of the original term in connection with the Agreement; and, 4. Authorizing the City Manager the option to extend the Agreement up to two (2) additional one-year terms after its original term for a not-to-exceed amount of $41,700 per additional term; and, 5. Authorizing the City Manager to approve additional expenditures of up to $5,000 for additional analyses and sampling for any one-year extension; and,

6. Rejecting all other proposals.

G. Approving Amendment No. 3 to the Cooperative Agreement No. C-6-1126 with Orange County Transportation Authority (OCTA) for the OCTA I-405 Improvement Project CIP No. ST1809 - That the City Council adopt Resolution 7394: 1. Approving Amendment No. 3 to Cooperative Agreement No. C-6-1126 dated June 27, 2016, as previously amended by Amendment No. 1 dated April 22, 2019 and Amendment No. 2 dated December 13, 2021, with Orange County Transportation Authority; and, 2.

Authorizing the City Manager to execute Amendment No. 3 to Cooperative Agreement No C-6- 1126.

City Clerk Harper took a roll call vote for the consent calendar items.

AYES: Kalmick, Moore, Sustarsic, Landau, Steele
NOES: None
ABSENT: None
ABSTAIN: None
Motion carried

ITEMS REMOVED FROM THE CONSENT CALENDAR
D. Awarding and Authorizing Execution of a Professional Services Agreement with Southstar Engineering and Consulting, Inc., for the Lampson Avenue Bike Lane Gap Closure (CIP ST1811) – Construction Management Services - That the City Council adopt Resolution 7391: 1. Awarding a Professional Services Agreement to Southstar Engineering and Consulting, Inc., in a not-to-exceed amount of $110,252 to provide construction management services for the Lampson Avenue Bike Lane Gap Closure Project (CIP ST1811) (“Project”); and, 2. Authorizing and directing the City Manager to execute the Agreement; and, 3. Authorizing the City Manager to approve additional work requests up to the total amount of $10,000 in connection with the Project; and, 4. Rejecting all other proposals.

Director of Public Works Lee provided a comprehensive background on the staff report and addressed Council Member questions.

Mayor Pro Tem Sustarsic moved, second by Council Member Steele to approve Resolution 7391: 1. Awarding a Professional Services Agreement to Southstar Engineering and Consulting, Inc., in a not-to-exceed amount of $110,252 to provide construction management services for the Lampson Avenue Bike Lane Gap Closure Project (CIP ST1811) (“Project”); and, 2. Authorizing and directing the City Manager to execute the Agreement; and, 3. Authorizing the City Manager to approve additional work requests up to the total amount of $10,000 in
connection with the Project; and, 4. Rejecting all other proposals.

City Clerk Harper took a roll call vote to continue Item D.

AYES: Kalmick, Landau, Moore, Steele, Sustarsic
NOES: None
ABSENT: None
ABSTAIN: None
Motion carried

PUBLIC HEARING
H. Public Hearing Regarding Reasonable Accommodation (RA 22-1), an Appeal of the Planning Commission’s Denial of Reasonable Accommodation in Part and Approval of Reasonable Accommodation 22-1 in Part, as Modified, with Conditions - That the City Council: 1. Hold a de novo hearing regarding the appeal of Reasonable Accommodation 22-1; and, 2. Adopt Resolution 7395 denying the appeal and denying Reasonable Accommodation 22-1 in part, with respect to carport-like accessory structure, and approving Reasonable Accommodation 22-1, in part, as modified, with conditions, to allow encroachments into the required rear and side yard setbacks of specified nonconforming and non-permitted accessory structures/patio covers in the backyard, on a conforming property in the Residential Low Density (RLD-9) Zone.) Council Member Landau stated that in accordance with the Political Reform Act, she would recuse herself from this agenda item because her residence is located within five hundred feet of the property that is the subject of this hearing. She left the room and returned when the item was concluded.

Council Members Kalmick and Steele, along with Mayor Moore and Mayor Pro Tem Sustarsic all disclosed that they either visited the property, spoke to the applicant or the other party and/or spoke to residents adjacent to the property that is the subject matter of the Public Hearing.

Director of Community Development Smittle introduced Assistant Planner Marco Cuevas, Jr., who provided a comprehensive background on the staff report and addressed Council Member questions.

Mayor Moore opened the public hearing. Speakers: Scott Levitt on behalf of the applicant of the appeal/homeowner of the house in question and Michael Papadopoulos. Mayor Moore closed the public hearing.

Council Member Steele moved, second by Mayor Pro Tem Sustarsic to approve Resolution 7395 denying the appeal and denying Reasonable Accommodation 22-1 in part, with respect to carport-like accessory structure, and approving Reasonable Accommodation 22-1, in part, as modified, with conditions, to allow encroachments into the required rear and side yard setbacks of specified nonconforming and non-permitted accessory structures/patio covers in the backyard, on a conforming property in the Residential Low Density (RLD-9) Zone.)
City Clerk Harper took a roll call vote to continue Item H.

AYES: Kalmick, Steele, Moore, Sustarsic
NOES: None
ABSENT: None
ABSTAIN: Landau
Motion carried
Council Member Landau was invited back into the meeting.

I. Short Term Rentals Program Fees - That the City Council adopt Resolution 7396: 1.

Approving Short-Term Rental Program fees; and, 2. Authorizing amendment of the City of Seal Beach Cost Recovery Fee Schedule to include
the Short-Term Rental Program fees.

Director of Community Development Smittle provided a comprehensive background on the staff report and addressed Council Member questions.

Mayor Moore opened the public hearing. Speakers: None. Mayor Moore closed the public hearing.

Mayor Pro Tem Sustarsic moved, second by Council Member Landau to adopt Resolution 7396: 1. Approving Short-Term Rental Program fees; and, 2. Authorizing amendment of the City of Seal Beach Cost Recovery Fee Schedule to include the Short-Term Rental Program fees.

City Clerk Harper took a roll call vote to continue Item I.

AYES: Kalmick, Landau, Moore, Sustarsic, Steele
NOES: None
ABSENT: None
ABSTAIN: None

UNFINISHED/CONTINUED BUSINESS
There were no unfinished/continued business items.

NEW BUSINESS
J. Adoption of City of Seal Beach Emergency Operations Plan 2023 Revision (EOP) - That the City Council adopt Resolution 7397: 1. Approving the March 2023 City of Seal Beach Emergency Operations Plan (EOP); and, 2. Authorizing the City Manager to submit the EOP to the California Office of Emergency Services.

Emergency Services Coordinator Sgt. Brian Gray provided a comprehensive background on the staff report and addressed questions from Council Members.

Council Member Kalmick moved, second by Council Member Landau to adopt Resolution 7397: 1. Approving the March 2023 City of Seal Beach Emergency Operations Plan (EOP); and, 2. Authorizing the City Manager to submit the EOP to the California Office of Emergency Services.

City Clerk Harper took a roll call vote to continue Item J.

AYES: Kalmick, Landau, Moore, Steele, Sustarsic
NOES: None
ABSENT: None
ABSTAIN: None
Motion carried
K. Street Lighting Assessment District - That the City Council adopt: 1. Resolution 7398 initiating the annual levy of the street lighting assessment; and, 2. Resolution 7399 setting the date for the public hearing for May 22, 2023; and, 3. Resolution 7400 approving the Engineer's Report. No increase in assessments is projected for Fiscal Year 2023- 2024.

Director of Finance/City Treasurer Arenado provided a comprehensive background on the staff report and addressed questions from Council Members.

Council Member Landau moved, second by Council Member Kalmick to adopt: 1.

Resolution 7398 initiating the annual levy of the street lighting assessment; and, 2.

Resolution 7399 setting the date for the public hearing for May 22, 2023; and, 3.

Resolution 7400 approving the Engineer's Report. No increase in assessments is projected for Fiscal Year 2023-2024.

City Clerk Harper took a roll call vote to continue Item K.

AYES: Kalmick, Landau, Moore, Steele, Sustarsic
NOES: None
ABSENT: None
ABSTAIN: None
Motion carried
RECESS
Mayor Moore called for a recess at 10:00 p.m. The meeting reconvened at 10:12 p.m.

JOINT STUDY SESSION OF THE CITY COUNCIL AND PLANNING COMMISSION

ROLL CALL

Present: Mayor Moore
Council Members: Kalmick, Landau, Steele, Sustarsic
Planning Commissioner Chair: Campbell
Planning Commissioners: Mingione, Massetti, Coles, Wheeler L. Zoning Amendment Study Session - That the City Council and Planning Commission participate in discussions and provide feedback regarding changes t o the Zoning Code necessary to implement the Housing Element.

Community Development Director Alexa Smittle provided a comprehensive background on the basis for the study session and introduced the Lisa Wise Consulting team; Director David Bergman and Senior Associate Monica Szydlik. Discussions included the project overview, technical analysis, preliminary recommendations and encouraged City Council and Planning Commission discussion.

Mayor Moore expressed his appreciation for a great dialogue between City staff, Council, and the Planning Commission.

ADJOURNMENT
Mayor Moore adjourned the City Council meeting in memory of Contracted Programming Coordinator for Seal Beach TV (SBTV-3) Robin Fort-Lincke at 11:36 p.m. to Monday, May 8, 2023, at 5:30 p.m. to meet in Closed Session if deemed necessary.
__________________________
Gloria D. Harper, City Clerk
City of Seal Beach
Approved: ___________________________
Thomas Moore, Mayor
Attested: ____________________________
Gloria D. Harper, City Clerk

Agenda Item C

AGENDA STAFF REPORT
DATE: May 8, 2023
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Gloria D. Harper, City Clerk
SUBJECT: Report of City Manager and Department Heads Authorized Contracts
_______________________________________________________________ SUMMARY OF REQUEST:

That the City Council receive and file the report.

BACKGROUND AND ANALYSIS:

In an effort to further increase transparency, the City Manager provides a quarterly report to the City Council that identifies all contracts executed by the City Manager.

The City Manager has the authority to approve and execute contracts up to the amount of $39,524.

Seal Beach Municipal Code Section 3.20.005 authorizes the City Manager to delegate spending authority to Department Heads. For departments other than the Director of Public Works and the Director of Finance/City Treasurer, this authority shall not exceed $15,000 per purchase or contract. For the Director of Public Works, the limit is established per the City’s Charter Section 1010. For the Director of Finance/City Treasurer, other than for Finance Department expenditures which are set at $15,000, there is additional authority to authorize purchases for City Departments up to the City Manager’s established contract signing authority.

A list of contracts executed by the City Manager and Department Heads for the period of January 1 – March 31, 2023:

AGREEMENT
DATE

DEPARTMENT VENDOR AMOUNT PURPOSE EXPIRATION
DATE
01/2/2023 Public Works CASC
Engineering
and
Consulting,
Inc.
$7,150.00 Biological Resource
Services for Beverly
Manor Well & Booster
Pump Station
12/31/23
01/13/2023 Public Works Seaport Sash
and Door, Inc.
$25,193.77 Marina Community
Center Door
Replacement Services
09/30/2023
01/25/2023 Public Works PHPE $39,000.00 Amendment No. 1 for On-Call Professional
Automation and
Implementation
Services
09/01/2023
01/26/2023 Public Works Quinn
Company dba
Quinn Power
Systems
$21,457.00 Amendment No. 1
Preventative
Maintenance for West
End Pump Station
Lampson Well and
Police Facility
Generators
03/31/2024
02/13/2023 Public Works AKM
Consulting
Engineers,
Inc.
$32,024.00 Sewer System
Management Plan –
Spill Emergency
Response Plan
Update
12/31/2023
02/17/2023 City Manager Baker Tilly $16,900.00 Strategic Planning Workshop 2023
02/17/2024
02/22/2023 Public Works Lightbox
Parent, L.P.
$18,900.00 GovClarity Annual
Subscription (Software
as a Service)
02/12/2024
02/27/2023 Public Works Silsby
Strategic
Advisors, Inc.
$35,000.00 Strategic Support
Services to Assist the
City with
Targeting/Acquisition
Strategies for State &
Federal Funding
12/31/2023
ENVIRONMENTAL IMPACT:

There is no environmental impact related to this item.

LEGAL ANALYSIS:

No legal analysis is required for this item.

FINANCIAL IMPACT:

There is sufficient funding available in the Fiscal Year 2022-2023 budget.

However, as with all City Council approved contracts, all contracts executed under staff’s contracting authority are processed internally with review and approval by the City Attorney, Director of Finance, City Manager, and City Clerk.

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

RECOMMENDATION:

That the City Council receive and file the report.

SUBMITTED BY: NOTED AND APPROVED:

Gloria D. Harper Jill R. Ingram
Gloria D. Harper, City Clerk Jill R. Ingram, City Manager Agenda Item D

AGENDA STAFF REPORT
DATE: May 8, 2023
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Iris Lee, Director of Public Works
SUBJECT: Approving and Authorizing Amendment No. 1 to
Professional Services Agreement with Ardurra Group, Inc. for the Sewer Pump Station #35 Improvements (CIP
SS1903) Project Management Services
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council adopt Resolution 7401:

1. Approving Amendment No. 1 to the Professional Services Agreement with Ardurra Group, Inc., (a) to extend the Agreement term to December 31, 2025, (b) to modify the Scope of Services during the extension by eliminating the 6th Street Alley and Water Replacement (CIP SS1902) and limiting the Scope of Services to the Sewer Pump Station #35 Improvements (CIP SS1903) only, and (c) to update the labor rates during the extension; and,

2. Authorizing the City Manager to execute Amendment No. 1.

BACKGROUND AND ANALYSIS:

The City has adopted the Sewer Master Plan identifying critical infrastructure improvements to ensure system reliability. As a result, Sewer Pump Station #35 Improvements (CIP SS1903) and 6th Street Alley Sewer and Water Replacement (CIP SS1902) were budgeted into the capital improvement program.

On May 24, 2021, City Council approved a Professional Services Agreement with Ardurra Group, Inc. (“Ardurra”) to provide professional project management services for both projects. Unfortunately, the COVID-19 pandemic, recent increased Public Works vacancies and financial issues prevented the projects from being completed as originally scoped. It is therefore recommended that the City extend the Agreement to December 31, 2025 allowing sufficient time for completion of the Scope of Services; and modify the Scope of Services during the extension to eliminate the 6th Street Alley Sewer and Water Replacement (CIP SS1902) and to limit the scope to the Sewer Pump Station #35 Improvements (CIP

SS1903) only. Staff will bring back the 6th Street Alley Sewer and Water Replacement (CIP SS1902) project back to the City Council at a later date.

As this Agreement was entered in 2021 and labor rates have since increased substantially across most industries, Ardurra is also proposing to update the hourly labor rates by 5% to 7.5%, depending on the classification. While staff recommends the proposed increase, Amendment No. 1 does not increase the overall Agreement amount.

Classification Existing Hourly Rate Proposed Hourly Rate Project Manager $ 200.00 $ 215.00
QA-QC Manager $ 200.00 $ 215.00
Project Controls $ 120.00 $ 130.00
ENVIRONMENTAL IMPACT:

This item is not subject to the California Environmental Quality Act (“CEQA”) pursuant to Section 15061(b)(3) of the state CEQA Guidelines because it can be seen with certainty that approval of a professional services agreement amendment with Ardurra Group, Inc. will not have a significant effect on the environment.

Environmental impacts related to the project construction will be assessed under a separate effort.

LEGAL ANALYSIS:

The City Attorney has reviewed the agreement and approved the resolution as to form.

FINANCIAL IMPACT:

There is no financial impact for this item. It should be noted that payments made to Ardurra for any services performed within the current fiscal year are within the current fiscal budget and within an available unexhausted fund. If the next adopted budget does not allocate funds or does not have sufficient funds, Ardurra’s services will automatically terminate at the conclusion of the fiscal year.

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

RECOMMENDATION:

That the City Council adopt Resolution 7401:

1. Approving Amendment No. 1 to the Professional Services Agreement with Ardurra Group, Inc., (a) to extend the Agreement term to December 31, 2025, (b) to modify the Scope of Services during the extension by eliminating the 6th Street Alley and Water Replacement (CIP SS1902) and limiting the Scope of Services to the Sewer Pump Station #35 Improvements (CIP SS1903) only, and (c) to update the labor rates during the extension; and,

2. Authorizing the City Manager to execute Amendment No. 1.

SUBMITTED BY: NOTED AND APPROVED:

Iris Lee Jill R. Ingram
Iris Lee, Director of Public Works Jill R. Ingram, City Manager ATTACHMENTS:

A. Resolution 7401
B. Agreement with Ardurra Group, Inc.

C. Amendment No. 1 with Ardurra Group, Inc.

RESOLUTION 7401

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL

APPROVING AND AUTHORIZING THE CITY MANAGER TO
EXECUTE AMENDMENT NO. 1 TO THE PROFESSIONAL
SERVICES AGREEMENT WITH ARDURRA GROUP, INC. TO

PROVIDE PROFESSIONAL PROJECT MANAGEMENT
SERVICES FOR THE SEWER PUMP STATION #35
IMPROVEMENTS (CIP SS1903)
WHEREAS, on May 24, 2021, the City entered into a Professional Services Agreement (“Agreement”) with Ardurra Group Inc. (“Ardurra”) to provide project management services for Sewer Pump Station #35 Improvements (CIP SS1903) and 6th Street Alley Sewer and Water Replacement Project (CIP SS1902); and,; and,
WHEREAS, completion of both projects was delayed as a result of the COVID-19 pandemic, staffing vacancies and financial issues; and, WHEREAS, the City and Ardurra desire to extend the Term of the Agreement through December 31, 2025, to eliminate the 6th Street Alley and Water Replacement (CIP SS1902) project from the Scope of Services, and to update the labor rates during the extension; and,
WHEREAS, Ardurra is qualified to provide professional management services for the Projects.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES HEREBY RESOLVE:

SECTION 1. The City Council herby approves Amendment No. 1 to the Professional Services Agreement dated May 24, 2021, between the City of Seal Beach and Ardurra Group, Inc. (a) to extend the Term of the Agreement through December 31, 2025, (b) during the extension, to modify the Scope of Services by eliminating the 6th Street Alley and Water Replacement (CIP SS1902) project from the Scope of Services and limiting the Scope of Services to the Sewer Pump Station #35 (CIP SS1903) only, and (c) to update the labor rates during the extension.

SECTION 2. The City Council hereby authorizes and directs the City Manager to execute the Amendment No. 1 on behalf of the City.

PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a regular meeting held on the 8th day of May, 2023 by the following vote:

AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members

Thomas Moore, Mayor
ATTEST:

Gloria D. Harper, City Clerk
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 resolution is the original copy of Resolution 7401 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 8th day of May, 2023.

Gloria D. Harper, City Clerk
1 AMENDMENT NO. 1

PROFESSIONAL SERVICES AGREEMENT
for
Professional Project Management Services -
Sewer Pump Station #35 (CIP SS1903)
between
City of Seal Beach
211 - 8th Street
Seal Beach, CA 90740
&
Ardurra Group, Inc.
3737 Birch Street, Suite 250
Newport Beach, CA 92660
(949) 428-1500
This Amendment No. 1, dated May 8, 2023, amends that certain agreement (“Agreement”) dated May 24, 2021, by and between the City of Seal Beach (“City”), a California charter city, and Ardurra Group, Inc. (“Consultant”), a Florida corporation. 2 RECITALS
A. City and Consultant are parties to the Agreement pursuant to which Consultant provides professional project management services for the Sewer Pump Station #35 (CIP SS1903) and 6th Street Alley Sewer and Water Replacement (CIP SS1902) (“projects”).

B. Effective May 24, 2021 City and Consultant entered into an Agreement for Consultant to provide professional project management services for the projects for a term ending December 31, 2022.

C. Due to delays in completing the projects as a result of the COVID-19 pandemic, and staffing and funding limitations, the City and Consultant wish to amend the Agreement in order to extend the term of the Agreement through December 31, 2025, to modify the Scope of Services during the extension by eliminating the 6th Street Alley Sewer and Water Replacement (CIP SS1902) project and limiting the Scope of Services to the Sewer Pump Station #35 (CIP SS1903) only, and to increase the rates charged for work performed during the extension.

AMENDMENT NO. 1
NOW, THEREFORE and in consideration of the foregoing and of the mutual covenants and promises herein set forth, the parties agree to amend the Agreement as follows:

Section 1. Section 1.0 (Scope of Services) of this Agreement is hereby amended in its entirety to read as follows:
“1.1. During the Original Term, Consultant shall provide those services (collectively “Services”) set forth in the Scope of Services attached hereto as Exhibit A and incorporated herein by this reference. To the extent there is any conflict between Exhibit A and this Agreement, this Agreement shall control.

1.1.1. As of the Effective Date of Amendment No. 1, and during the Extension (as defined in Subsection 2.2, below), Consultant shall provide those Services for the Sewer Pump Station #35 (CIP SS1903) Project only (“Project”) set forth in Exhibit A as modified by Exhibit A-1, which are incorporated herein by this reference. To the extent there is any conflict between Exhibit A, Exhibit A-1 and this Agreement, this Agreement shall control.”
Section 2. Section 2.0 (Term) of this Agreement is hereby amended to read as follows:
“2.1 Original Term. This Agreement was originally effective as of May 24, 2021 (the “Effective Date”) for a term extending from the Effective Date through December 31, 2022.
3 2.2. Extension. This Agreement shall remain in full force and effect for an additional term extending from January 1, 2023 through December 31, 2025 (“Extension”), unless sooner terminated or extended as provided in Section 5.0 of this Agreement.”
Section 3. Section 3.0 (Contractor’s Compensation) of the Agreement is hereby amended in its entirety to read as follow:
“3.1. Total Compensation. City will not pay more than the total not-toexceed amount of $154,800.00 (One Hundred Fifty-Four Thousand Eight Hundred and 00/100 dollars) as follows:

3.1.1 During the Original Term, City will pay Consultant in accordance with the hourly rates shown on the fee schedule set forth in Exhibit A for the Services.

3.1.2. During the Extension, City will pay Consultant in accordance with the hourly rates shown on the fee schedule set forth in Exhibit A-1 for the Services.

3.1.3. The combined payments for the Original Term and
Extension shall not exceed the total amount of $154,800.00.

Section 4. All references to the term “Agreement” throughout Sections 1.0 through 35.0, inclusive, of the Agreement are hereby modified to include the Agreement dated May 24, 2021, and this Amendment No. 1 dated May 8, 2023, as if all those terms are fully set forth therein.

Section 5. Except as expressly modified or supplemented by this Amendment No. 1, all other provisions of the Agreement shall remain unaltered and in full force and effect. In the event of a conflict between the provisions of this Amendment No. 1 and the provisions of the Agreement, the provisions of this Amendment No. 1 shall control.

Section 6. The persons executing this Amendment No. 1 on behalf of Consultant each warrant that he or she is each duly authorized to execute this Amendment No. 1 on behalf of said Party and that by his or her execution, Consultant is formally bound to the provisions of this Amendment No. 1
4 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be executed and attested by their proper officers thereunto:

CITY OF SEAL BEACH
By:

Jill R. Ingram, City Manager
Attest:

By:

Gloria D. Harper, City Clerk
Approved as to Form:

By:

Nicholas Ghirelli, City Attorney
CONSULTANT: Ardurra Group, Inc., a
Florida corporation
By:

Lisa M Penna
Vice President
By:

Cathy Cahill
Chief Financial Officer
(Please note, two signatures required for
corporations pursuant to California
Corporations Code Section 313 from each of
the following categories: (i) the chairperson of
the board, the president or any vice president,
and (ii) the secretary, any assistant secretary,
the chief financial officer or any assistant
treasurer of such corporation.)
5 EXHIBIT A-1
Revised Hourly Rates
Proposed Revised Hourly Rates
TITLE Hourly Rate
Project Manager $ 215.00
QA-QC Manager $ 215.00
Project Controls $ 130.00
City of Seal Beach
Project Management Services for the 6th Street
Alley
and Sewer Pump Station #35
Amendment #1

Agenda Item E

AGENDA STAFF REPORT
DATE: May 8, 2023
TO: Honorable Mayor and City Council
THRU: Jill R. Ingram, City Manager
FROM: Barbara Arenado, Director of Finance/Treasurer
SUBJECT: City of Seal Beach Annual Audit Reports for Fiscal Year Ended June 30, 2022
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council receive and file the following documents for fiscal year ending June 30, 2022:

A. Audit Communication Letter
B. Report on Internal Control
C. Annual Comprehensive Financial Report (ACFR)
D. Appropriations Limit Final Report
BACKGROUND AND ANALYSIS:

The audit firm, The Pun Group Accountants & Advisors has completed the annual audit of the City of Seal Beach (City) for the fiscal year ended June 30, 2022. The audit was conducted in accordance with generally accepted auditing standards and included examining, on a test basis, evidence supporting the amounts and disclosures to obtain reasonable assurance that the financial statements are free of material misstatements.

In the opinion of the auditors, the financial statements fairly present, in all material respects, the financial position of the City of Seal Beach on June 30, 2022. The 2022 ACFR (Attachment C) is included for your information and use. The ACFR will be submitted to the Government Finance Officers Association to, once again, be considered for the Certificate of Achievement for Excellence in Financial Reporting.

The purpose of the Audit Communication Letter (Attachment A) is to provide a mechanism for communication with the governing body highlighting significant issues that may arise during the audit process. As indicated, the City’s financial statements were clearly presented.

The purpose of the Report on Internal Control (Attachment B) is to help the auditor in designing audit procedures for the purpose of expressing an opinion on the financial statements.

The purpose of the Appropriations Limit Final Report (Attachment D) is to attest that the calculation was performed using the correct methodology and was correctly calculated based upon the information provided.

On April 26, 2023, Frances Kuo, from the Pun Group, gave a presentation to the City Council Audit Committee and the item was thoroughly reviewed and discussed. Among the attendees were the City Manager, Finance Director, Finance Manager, Frances Kuo from the Pun Group, and Councilmember Steele.

ENVIRONMENTAL IMPACT:

This action is exempt from the California Environmental Quality Act, because it is not defined as a “project” under CEQA.

LEGAL ANALYSIS:

The City Attorney has reviewed this staff report and approved it as to form.

FINANCIAL IMPACT:

There is no financial impact in receiving this information.

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

RECOMMENDATION:

That the City Council receive and file the following documents for fiscal year ending June 30, 2022:

A. Audit Communication Letter
B. Report on Internal Control
C. Annual Comprehensive Financial Report (ACFR)
D. Appropriations Limit Final Report

SUBMITTED BY: NOTED AND APPROVED:

Barbara Arenado Jill R. Ingram
Barbara Arenado, Director of
Finance/Treasurer
Jill R. Ingram, City Manager
ATTACHMENTS:

A. Audit Communication Letter
B. Report on Internal Controls
C. Annual Comprehensive Financial Report (ACFR)
D. Appropriations Limit Final Report
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
April 24, 2023
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
Seal Beach, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Seal Beach (the “City”) for the year ended June 30, 2022.

Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated May 27, 2022.

Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the basic financial statements. As described in Note 1 to the financial statements, the City No. 87, Leases. No other new accounting policies were adopted and the application of existing policies was not changed during 2022. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. As part of our audit, we evaluated the key factors and assumptions used to develop the accounting estimates described above and in determining that it is reasonable in relation to the financial statements taken as a whole.

The most sensitive estimates affecting the City’s financial statements were:
 Management’s estimate of the investment fair market value is based on information provided by U.S. Bank, the custodial of the investments in the U.S. government sponsored enterprise securities, supra-national agency notes, asset-backed securities, municipal bonds, corporate notes, and negotiable certificates of deposit based on institutional bond quotes and certificate of deposit pricing. We evaluated the key factors and assumptions used to develop the investment fair market value in determining that it is reasonable in relation to the financial statements taken as a whole.
 Management’s estimate of the depreciation on capital assets is based on the industry standard and past experience on actual useful life of the asset groups. We evaluated the key factors and assumptions used to develop the depreciation on capital assets in determining that it is reasonable in relation to the financial statements taken as a whole.

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

 Management’s estimate of the net other postemployment benefits (“OPEB”) liability is based on the actuarial valuation on total OPEB liability and financial statements on fiduciary net position. We evaluated the key factors and assumptions used to develop the OPEB liability in determining that it is reasonable in relation to the financial statements taken as a whole.  Management’s estimate of the net pension liabilities is based on the actuarial valuation on total pension liability and based on audited financial statements on fiduciary net position for CalPERS plans. We evaluated the key factors and assumptions used to develop the net pension liability in determining that it is reasonable in relation to the financial statements taken as a whole.

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were:
 Note 1 – Summary of Significant Accounting Policies
 Note 9 – Defined Benefit Pension Plans
 Note 10 – Other Postemployment Benefits (“OPEB”) Plan  Note 13 – Individual Fund Disclosure
The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report.

We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated April 24, 2023.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

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

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters
We applied certain limited procedures to the Management’s Discussion and Analysis, the Budgetary Comparison Schedules, the Schedule of the City’s Proportionate Share of the Net Pension Liability and Related Ratios, the Schedule of the Contributions – Pensions, the Schedule of Changes in Net Other Postemployment Benefits Liability and Related Ratios, and the Schedule of Contributions – Other Postemployment Benefits, which are required supplementary information (the “RSI”) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were engaged to report on the Combining and Individual Nonmajor Fund Financial Statements, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

We were not engaged to report on the Introductory and the Statistical Sections, which accompany the financial statements but are not RSI. Such information has 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 it.

Restriction on Use
This information 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.

Very truly yours,
Santa Ana, California
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND

ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Independent Auditors’ Report
To the Honorable Mayor and Members of the City Council
of the City of Seal Beach
Seal Beach, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Seal Beach, California (the “City”) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated April 24, 2023.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (“internal control”) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

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

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Santa Ana, California
April 24, 2023

ANNUAL COMPREHENSIVE

FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2022

CITY OF SEAL BEACH,
California

City of Seal Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Prepared by the Finance Department
Barbara Arenado
Director of Finance/City Treasurer
The City of Seal Beach provides
excellent city services to
enhance the quality of life and
to preserve our small town
character.

The City of Seal Beach Values:

Excellent Customer Service
Mutual Respect
Teamwork
Professionalism
Honest & Ethical Behavior
City of Seal Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents
Page

INTRODUCTORY SECTION (UNAUDITED)
Letter of Transmittal ................................................................................................................................................... i Certificate of Achievement for Excellence in Financial Reporting – Government Finance Officers Association .......................................................................................................... v Organizational Chart ................................................................................................................................................. vi Principal Officials of the City of Seal Beach ........................................................................................................... vii

FINANCIAL SECTION
Independent Auditors’ Report on the Financial Statements ...................................................................................... 1 Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ............................. 5 Basic Financial Statements:

Government–Wide Financial Statements:

Statement of Net Position .................................................................................................................................. 16 Statement of Activities ...................................................................................................................................... 18 Fund Financial Statements:

Governmental Fund Financial Statements:

Balance Sheet .............................................................................................................................................. 24 Reconciliation of the Governmental Funds Balance Sheet
to the Government–Wide Statement of Net Position ........................................................................... 25 Statement of Revenues, Expenditures,
and Changes in Fund Balances ............................................................................................................. 26 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government–Wide Statement of Activities ......................................................................................................................... 27 Proprietary Fund Financial Statements:

Statement of Net Position ........................................................................................................................... 30 Statement of Revenues, Expenses, and Changes in Net Position ............................................................... 33 Statement of Cash Flows ............................................................................................................................. 34 Fiduciary Fund Financial Statements:

Statement of Fiduciary Net Position ........................................................................................................... 38 Statement of Change in Fiduciary Net Position .......................................................................................... 39 Index to the Notes to the Basic Financial Statements ......................................................................................... 43 Notes to the Basic Financial Statements ............................................................................................................... 45 City of Seal Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited):

Budgetary Comparison Schedule – General Fund .......................................................................................................... 89 Notes to the Budgetary Comparison Schedule ............................................................................................................... 91 Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios ........................................ 92 Schedule of Contributions – Pensions ............................................................................................................................ 94 Schedule of Changes in Net Other Postemployment Benefits Liability and Related Ratios .......................................... 96 Schedule of Contributions – Other Postemployment Benefits ....................................................................................... 97 Supplementary Information:

Schedule of Revenues, Expenditures, and Change in Fund Balance – Budget and Actual Capital Projects and Equipment Capital Projects Fund ................................................................................... 101 Nonmajor Governmental Funds:

Combining Balance Sheet ............................................................................................................................... 104 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ....................................... 109 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Street Lighting Special Revenue Fund ...................................................................................................... 114 Supplemental Law Enforcement Special Revenue Fund .......................................................................... 115 Police Asset Forfeiture Special Revenue Fund ......................................................................................... 116 Air Quality Improvement Special Revenue Fund ..................................................................................... 117 Park Improvement Special Revenue Fund ................................................................................................ 118 Traffic Impact Special Revenue Fund....................................................................................................... 119 State Gasoline Tax Special Revenue Fund ............................................................................................... 120 Measure M2 Special Revenue Fund ......................................................................................................... 121 Community Development Block Grant Special Revenue Fund ................................................................ 122 Police Grants Special Revenue Fund ........................................................................................................ 123 Landscape District Special Revenue Fund ................................................................................................ 124 Heron Pointe Special Revenue Fund ......................................................................................................... 125 Pacific Gateway Special Revenue Fund ................................................................................................... 126 Seal Beach Cable Special Revenue Fund ................................................................................................. 127 SB1 Special Revenue Fund ....................................................................................................................... 128 Citywide Grants Special Revenue Fund ................................................................................................... 129 City Debt Service Fund ............................................................................................................................. 130

Internal Service Fund Financial Statements:

Combining Statement of Net Position ............................................................................................................. 133 Combining Statement of Revenues, Expenses, and Change in Net Position .................................................. 134 Combining Statement of Cash Flows .............................................................................................................. 135 Custodial Funds Financial Statements:

Combining Statement of Fiduciary Net Position ............................................................................................. 139 Combining Statement of Changes in Fiduciary Net Position .......................................................................... 140 City of Seal Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
Table of Contents (Continued)
Page
STATISTICAL SECTION (Unaudited)
Net Position by Component .......................................................................................................................................... 144 Changes in Net Position ............................................................................................................................................... 146 Fund Balances of Governmental Funds ........................................................................................................................ 150 Changes in Fund Balances of Governmental Funds ..................................................................................................... 152 Assessed Value and Estimated Actual Value of Taxable Property .............................................................................. 154 Direct and Overlapping Property Tax Rates ................................................................................................................. 155 Principal Property Taxpayers ....................................................................................................................................... 156 Property Tax Levies and Collections ............................................................................................................................ 157 Ratios of Outstanding Debt by Type ............................................................................................................................ 158 Ratios of General Bonded Debt Outstanding ............................................................................................................... 160 Schedule of Direct and Overlapping Debt .................................................................................................................... 161 Legal Debt Margin Information.................................................................................................................................... 162 Pledged-Revenue Coverage .......................................................................................................................................... 164 Demographic and Economic Statistics ......................................................................................................................... 165 Top 25 Sales Tax Producers ......................................................................................................................................... 166 Full-Time and Part-Time City Employees by Function ............................................................................................... 167 Operating Indicators by Function ................................................................................................................................. 168 Capital Asset Statistics by Function ............................................................................................................................. 170 This page intentionally left blank.
i
May 8, 2023
Honorable Mayor, Members of the City Council and Citizens of the City of Seal Beach:

City of Seal Beach staff is pleased to submit for your information the Annual Comprehensive Financial Report (ACFR) of the City of Seal Beach (City) for the fiscal year ended June 30, 2022. Responsibility for both the accuracy of presented data and the completeness and fairness of the presentation including all disclosures rests with the City. In our opinion, the data is accurate in all material aspects, is presented in a manner designed to fairly set forth the financial position and results of operations of the City, and contains all disclosures necessary to enable the reader to gain an understanding of the City’s financial affairs.

The financial statements are prepared in accordance with Generally Accepted Accounting Principals (GAAP) as promulgated by the Government Accounting Standards Board (GASB). This report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these presentations, management of the City has established a comprehensive internal control framework that is designed to protect the City’s assets from loss, theft, or misuse, and to compile reliable information for the preparation of this report in conformity with GAAP. As management, we assert to the best of our knowledge and belief, this financial report is complete and reliable in all material respects within the reasonable assurance of the internal control framework.

The City’s financial statements have been audited by The Pun Group, a public accounting firm fully licensed and qualified to perform audits of the state and local governments within the State of California. The audit was designed to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. The independent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Seal Beach’s financial statements for the year ended June 30, 2022, are fairly presented in conformity with Generally Accepted Accounting Principles. The independent auditor’s report is presented as the first component of the financial section of this report.

GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statement in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with that section. The City’s MD&A is immediately following the report of the independent auditors in the financial section of the ACFR.

PROFILE OF THE CITY
The City of Seal Beach, located on the coast of northwestern Orange County California, was incorporated on October 27, 1915. The City charter, which was adopted in 1964, established the form of government, states the powers and duties of the City Council, and establishes various City Offices.

The City is operated under the City Council/City Manager form of government, and is governed by a five-member city council elected by district serving four-year alternating terms and who, in turn elect the Mayor and Mayor Pro Tem from among themselves for a one year term. The governing council is responsible for policymaking, passing local ordinances, adopting the budget, appointing committees, and hiring the City Manager and City Attorney.

The City Manager is responsible for carrying out the policies and ordinances of the City Council, for overseeing the day-to-day operations of the City, and appointing all department heads. ii
The City provides a full range of services for the citizens utilizing a mix of contracts with other governmental entities or private companies. The City has its own Police Department and Marine Safety Department but contracts for fire and paramedic services through the Orange County Fire Authority (OCFA). The City also operates water and sewer utilities and contracts for refuse and sanitation treatment services.

Included in the financial statements are the following blended component units: Seal Beach Public Financing Authority, Seal Beach Parking Authority and Seal Beach Cable Communications Foundation.

The City is the home of Boeing Company Integrated Defense System international headquarters, the U.S. Naval Weapons Station, the first Leisure World Retirement Community and the 1,000 acre Seal Beach National Wildlife Refuge. The City’s one and a half miles of beaches and the public pier attracts more than 1,500,000 visitors each year making recreation an important factor in the local economy. Seal Beach has a variety of local beach front stores at Main Street which include several fine dining establishments. Throughout the year many exciting community events take place in which the residents, and visitors, enjoy and participate.

History of Seal Beach
In 1901 J.C. Ord, a Civil War veteran, hired a 30–mule team to bring his small general store building from Los Alamitos to Bay City where he set it down at the southwest corner of what is now known as Main Street and Electric Avenue. J.C. Ord was the first Trustee, the first Mayor, Postmaster, and the first Judge. His store on Main Street was the Post Office and Court House and the Jail House when it was necessary.

On October 27, 1915, the City was incorporated and governed by an elected five-member council. The new City had an area of 1.25 square miles with a population of 250. Bay City was renamed Seal Beach in 1916.

In early 1944 during World War II, the Navy purchased most of the land around Anaheim Landing to construct the United States Navy's Naval Weapons Station Seal Beach (NWS SB) for loading, unloading, and storing of ammunition for the Pacific Fleet, and especially those US Navy warships home-ported in Long Beach and San Diego. Today, NWS SB is the Navy’s primary West Coast ordnance storage, loading, and maintenance installation.

Located entirely within NWS SB is the Seal Beach National Wildlife Refuge, which was established in 1972 and protects habitat for threatened and endangered species.

Another area of Seal Beach, Surfside Colony, was founded in 1929 and is credited as the first beach resort community of its type on the West Coast. Meanwhile Leisure World, a retirement community which comprises nearly a third of the city’s residents, opened in 1962. Construction of homes in the College Park East and West neighborhoods occurred in the early 1960s.

The City has an area of 13.23 square miles and sits on the coast as the gateway to Orange County between the cities of Long Beach and Huntington Beach and currently has a population of 24,846.

ECONOMIC CONDITIONS
Local economy: Although the focus of this Annual Comprehensive Financial Report is the financial condition of the City at June 30, 2022, it may be best understood when it is considered from the broader perspective of the specific environment within which the City operates. The City has experienced strong economic recovery after the challenging financial environment caused by the pandemic. As consumer demand increased and services returned to normal, the City ended the fiscal year in a positive position. Overall, the City’s General Fund revenue for the fiscal year increased by $4.9 million from the prior year.

Property tax is the City’s largest General Fund revenue source with revenues of $13.4 million, an increase of 3.9 percent over the prior fiscal year. Sales tax is the second largest General Fund revenue source with revenues of $11.4 million including transaction tax, an increase of 12.8 percent. Additionally, Transient Occupancy tax was $1.6 million, an increase of 90 percent. The increase in Property tax is due to the continued robust housing demographics in the City. Increases in Sales and Transient Occupancy taxes are in direct response to the pent-up demand for consumer goods and travel due to the pandemic and the re-opening of many businesses and the City’s hotels during the fiscal year.

Federal COVID-19 Assistance: On March 11, 2021, the American Rescue Plan Act of 2021, was signed into law to provide $350 billion of emergency funding for State, local, territorial, and Tribal governments in the form of iii
Coronavirus State and Local Fiscal Recovery Funds (SLFRF). The City received $5.7 million of SLFRF funds and utilized these funds for the provision of government services due to the impacts of COVID-19 on General Fund revenues in Public Safety.

Long-term financial planning: The City of Seal Beach continues to implement cost saving measures while providing the core services for our residents, businesses, visitors, and to protect all essential services that contribute to the high quality of life our residents expect. On a yearly basis, the City Council sets goals and priorities for the future. Each year the City develops a Five-Year Financial Outlook which is the guiding document for long-range fiscal planning and serves as the framework for development of the next adopted budget. The outlook is included in the budget process and incorporates a range of information on items that influence projected revenues and anticipated appropriation needs over the next five fiscal years. These projections inform the City Council and the public of the long-term costs of programs in the context of the City’s overall General Fund budget and projected revenue growth.

The City continues to be in good financial health due to its stable tax base, disciplined fiscal decisions, and strong governance. Conservative budgeting and sound financial policies have resulted in reserve levels that meet City Council policy. The City Council adopted policy seeks to maintain the reserve level between 20 to 25 percent of the General Fund adopted appropriations. The reserve may be used at the discretion of the City Council to provide resources during temporary decreases in revenues, in the event of an economic downturn while expenditure reductions are implemented, or to provide resources to meet emergency expenditures in the case of flood, fire, earthquake, landslides, or other natural disasters. At June 30, 2022, the reserve balance was $9.9 million or 24.0 percent of the operating budget.

Major initiatives: The Strategic Plan goals are approved and/or affirmed by the City Council twice a year. Strategic Priorities include: Fiscal Sustainability, Organizational Culture and Community Outreach, Capital Projects and the Sand Replenishment Plan. This year the City implemented a new financial software and utility billing system, transitioned back to live/active recreational programs, brought animal control field operations in-house to reduce costs, while adopting a balanced budget amid pandemic impacts.

FINANCIAL POLICIES AND PROCEDURES
Internal control structure: Management of the City is responsible for establishing and maintaining an adequate internal control structure. Internal accounting controls are designed to ensure that the assets of the City are protected from loss, theft, or misuse, and that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles.

The internal control structure is designed to provide reasonable, but not absolute, assurance, that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of the control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits require estimates and judgment by management.

Budgetary controls: The annual budget serves as the foundation for the City of Seal Beach’s financial planning and control. The City Council adopts an annual budget and appropriates the funds necessary to provide the services and operations for the fiscal year. The City Manager may make appropriation transfers within and between departments which do not result in an increase in appropriations. The City of Seal Beach City Council must approve all appropriation changes that result in an increase in appropriations.

AWARDS
GFOA Award Program – Annual Comprehensive Financial Report The Government Finance Officers Association of the United States (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Seal Beach for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2021. This was the twentieth consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized Annual Comprehensive Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. City staff believes that our current Annual Comprehensive Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA again this year for award.





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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Seal Beach
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
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ORGANIZATIONAL CHART
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DEVELOPMENT

COMMUNITY

PUBLIC WORKS
FY 2021-2022
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MARINE SAFETY

FIRE SERVICES

CITY MANAGER

CITY ATTORNEY

HUMAN RESOURCES

MAYOR AND CITY COUNCIL

CITIZENS OF SEAL BEACH

COMMUNITY SERVICES

CITY CLERK

POLICE SERVICES

FINANCE
vi

CITY OF SEAL BEACH

CALIFORNIA
Principal Officers
City Council
Joe Kalmick, Mayor
Mike Varipapa, Mayor Pro Tem
Sandra Massa-Lavitt, Council Member
Thomas Moore, Council Member
Schelly Sustarsic, Council Member
Executive Officers
Jill R. Ingram, City Manager
Craig A. Steele, City Attorney
Administrative Personnel
Patrick Gallegos, Assistant City Manager
Phil Gonshak, Chief of Police
Steve Myrter, Director of Public Works
Barbara Arenado, Director of Finance/City Treasurer
Alexa Smittle, Director of Community Development
Joe Bailey, Marine Safety Chief
Gloria D. Harper, City Clerk
vii
x
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200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and the Members of the City Council of the City of Seal Beach
Seal Beach, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Seal Beach, California (the “City”) as of and for the year ended June 30, 2022, and the related notes to the basic financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements 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, 2022, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“GAAS”) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States (“Government Auditing Standards”). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

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

2 Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
 exercise professional judgment and maintain professional skepticism throughout the audit.  identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, the Budgetary Comparison Schedules, the Schedules of Changes in Net Pension Liability and Related Ratios, the Schedules 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 89 to 97 be presented to supplement the basic financial statements. Such information is the and the Schedule of Contributions – OPEB, responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the Required Supplementary Information in accordance with GAAS, 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.

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

3 Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Combining and Individual Fund Financial Statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and 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 GAAS. In our opinion, the Combining and Individual Fund Financial Statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the Introductory and Statistical Sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 24, 2023 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
April 24, 2023
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City of Seal Beach
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2022
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, 2022, along with comparisons to the fiscal year ended June 30, 2021. All increases and decreases are expressed relative to fiscal year 2020-2021. 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 $127.7 million, a decrease of $0.5 million or 0.4%. The net position of business-type activities decreased by $0.6 million or 1.4%, while the net position of governmental activities increased by $0.2 million or 0.2%.
 The net position of $127.7 million consisted of $114.6 million of net investment in capital assets; $8.8 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 $10.0 million deficit related to its governmental activities.
 Total revenues were $57.6 million and total expenses were $58.1 million. Revenues increased by $4.2 million or 8.0%, and expenses increased by $7.1 million or 13.9%.  As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $40.0 million, representing an increase of $5.3 million or 15.3%. Of this amount, $8.2 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 $3.9 million or 9.2% 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, 2022, the Committed-Fiscal Policy Reserve has a balance of $9.9 million, or approximately 24% of General Fund expenditures (excluding 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 serves 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 required and 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, 2022
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 businesstype 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 in results of 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, debt service, 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, Debt Service Fund, and all of the 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 of the City’s fiduciary activities are reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position. These activities are excluded from the City’s government-wide financial statements 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, 2022
7 Notes to the Basic Financial Statements – The notes provide additional information that is essential to fully understand 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 its 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 Government-wide Financial Analysis focuses on the City’s net position and changes in net position resulting from the City’s activities as a whole.

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 was $127.7 million and $128.2 million for the years ended June 30, 2022, and June 30, 2021, respectively, as shown in Table 1.

As of June 30, 2022, 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 ($114.6 million or 89.7% of total net position) represents capital assets, such as land, buildings, infrastructure, and equipment, less any outstanding related debt used to acquire those assets.

This is an overall decrease of $1.3 million, or 01.1%. 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.

Table 1
Condensed Statement of Net Position
(in Thousands)
Governmental Activities Business-Type Activities Total Activities 2022 2021* 2022 2021 2022 2021
Current and other assets 55,876 $ 39,531$ $ 19,875 19,423$ $ 75,751 $ 58,954 Capital assets 85,735 86,763 34,662 35,794 120,397 122,557 Total assets 141,611 126,294 54,537 55,217 196,148 181,511 Deferred outflows of resources 10,715 9,790 802 11,517 997 10,787 Long-term liabilities outstanding 32,878 47,671 7,171 9,546 40,049 57,217 Other liabilities 4,005 3,836 1,666 1,314 5,671 5,150
Total liabilities 36,883 51,507 10,860 8,837 45,720 62,367 Deferred inflows of resources 32,247 1,555 1,979 34,226 185 1,740 Net position
Net investment in capital assets 84,448 85,059 30,111 30,785 114,559 115,844 Restricted 8,759 7,202 25 25 8,784 7,227
Unrestricted (10,011) (9,239) 14,387 14,359 4,376 5,120 Total net position $ 83,196 83,022$ $ 44,523 45,169$ $ 127,719 $ 128,191 ** Prior year information has been revised to conform to current year presentation.

City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2022
8 Net position - Restricted ($8.8 million or 6.9% of total net position) represents resources that are subject to external restrictions on how they may be used. This is an increase of $1.6 million or 21.5%. The majority of this increase occurred in restrictions for public works, which increased $1.5 million, or 52.9%.

Net position – Unrestricted ($4.4 million or 3.4% of total net position). This is a decrease of $0.7 million or 14.5%. The governmental activities unrestricted deficit of $10.0 million is a result of the effect of implementing Governmental Accounting Standards Board (GASB) statements related to pension and other post-employment 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 decreased by $0.5 million or 0.4%. The following Table 2 provides a summary of the City’s operations for the years ended June 30, 2022, and June 30, 2021.

Table 2
Condensed Statement of Activities
(in Thousands)
Governmental Activities Business-Type Activities Total Activities 2022 2021 2022 2021 2022 2021
Revenues:

Program revenues:

Charges for services 8,198 $ 7,652$ $ 8,256 $ 7,843 $ 16,454 15,495$ Operating grants and contributions 9,363 4,287 - 9,363 - 4,287 Capital grants and contributions 11 - - - 1 1 -
General revenues:

Taxes:

Property taxes 13,429 12,927 - 13,429 - 12,927
Sales taxes 11,444 10,147 - 11,444 - 10,147
Transient occupancy taxes 1,671 878 - 1,671 - 8 78
Other taxes 6,366 5,936 - 6,366 - 5,936
Use of money and property (1,428) 151 218 (1,210) 257 4 08 Other 3,271 97 - 9 7 3,271
Total revenues 49,140 45,260 8,474 8,100 57,614 53,360
Expenses:

General government 8,604 7,232 - 8,604 - 7,232
Public safety 26,912 23,326 - 26,912 - 23,326
Community development 3,044 2,283 - 3,044 - 2,283
Community services 1,992 1,140 - 1,992 - 1,140
Public works 9,086 8,291 - 9,086 - 8,291
Interest on long-term debt 61 58 - - 61 5 8
Water - - 6,064 6,033 6,064 6,033
Sewer - - 2,323 2,652 2,323 2,652
Total expenses 49,699 42,330 8,387 8,685 58,086 51,015
Change in net position before transfers 2,930 (559) (585) 87 (472) 2,345 Transfers 733 (324) (733) 324 - -
Change in net position 2,606 174 (646) (261) (472) 2,345 Net position at beginning of year 83,022 80,416 45,169 45,430 128,191 125,846 Net position at end of year $ 83,022$ 83,196 $ 44,523 $ 45,169 $ 127,719 128,191$ City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2022
9 Governmental Activities experienced an increase of $0.2 million in net position as of June 30, 2022, compared to an increase of $2.6 million at June 30, 2021. The reason for this year-to-year net decrease of $2.4 million is due to increases of $3.9 million in revenues and $1.1 million in transfers with business-type activities offset by increases to expenses of $7.4 million.

The overall net increase in revenues is due to recognizing 1) more COVID-related operating grants in the current year, 2) higher tax revenues across all tax categories as a result of the overall economic growth which occurred as the City moved out of the pandemic slow-down, 3) reductions to other revenues due to the prior year receipt of the final insurance proceeds from the May 2016 pier fire, and 4) reductions in interest earnings due to rising interest rates throughout the fiscal year which caused a large drop in the fair value of investments as of June 30; this resulted in unrealized losses, which substantially reduced investment income for the year.

The cost of all governmental activities during the current fiscal year was $49.7 million, which is a $7.4 million increase.

All categories of expenses were higher in the current year as the City opened up operations more fully after the pandemic slow-down. The majority of this increase was a $5.1 million addition to pension expense with $2.0 million attributable to the public safety category (refer to Note 9 of the Notes to the Basic Financial Statements for further analysis of the pension expense). As shown on the statement of activities, those who directly benefited from the programs paid $8.2 million of the cost, and $9.4 million was financed by contributions and grants received from other governmental organizations. The remaining $32.1 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 54.1% of total governmental expenditures compared to 55.1% of total governmental expenditures in fiscal year 2020-2021.

Business-type Activities net position decreased by $0.6 million. An updated water and sewer rate study was conducted and implemented in fiscal year 2021-2022. As a result of higher charges for services and slightly lower operating costs, net position increased by nearly $0.1 million from operations. During the year, business-type activities paid $0.7 million in administrative costs which were recorded as a transfer to governmental activities.

FINANCIAL ANALYSIS OF CITY FUNDS
The city uses fund accounting to provide proper financial management of the City’s resources and to demonstrate compliance with finance-related legal requirements.

Governmental funds – The objective of 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, 2022, the City’s governmental funds reported combined ending fund balances of $40.0 million. Approximately $3.3 million, or 8.3% of this total amount, constitutes unassigned fund balance. The remainder of the fund balance is reported as nonspendable, restricted, committed, or assigned to indicate that it is not available for new spending because it has already been designated to pay for encumbrances, loans, prepaid expenses, or advances to other funds or has been legally restricted for other purposes.

The General Fund ended the fiscal year with a fund balance of $34.3 million, representing a net increase of $4.4 million.

In comparison, in the prior fiscal year, the General Fund had a net increase of $2.8 million to fund balance. Fiscal year 2021-2022 had an increase of $4.6 million in revenues which was nearly entirely offset by an increase in expenditures of $4.5 million. Since changes in revenues and expenditures essentially offset each other, the primary reason for the increase in fund balance is due to net transfers to other funds decreasing by $1.6 million from the prior year. Prior year transfers made to the Water Enterprise Fund and to the Information Technology Internal Service Fund were not needed in the current year.

City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2022
10 Revenues increased due to receiving more COVID-related operating grant revenue in the current year and collecting higher tax revenues across all tax categories; these increases were offset by reductions to other revenues due to the prior year receipt of the final insurance proceeds from the May 2016 pier fire and by reductions in interest earnings due to rising interest rates throughout the fiscal year which caused a large drop in the fair value of investments as of June 30, resulting in unrealized losses recorded to investment income for the year. Overall expenditures increased by 12.6%, as the City reopened 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 $4.3 million and $10.1 million for the Water and Sewer funds, respectively. In the prior year, the Water and Sewer Funds had a combined operating loss of $675,000. For fiscal year 2021-22, new water and sewer rates were implemented and contributed to a combined operating income of $87,500. The Water Fund had an operating loss of $155,600, despite the rate increase, while the Sewer Fund had an operating income of $243,100.

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 2021-2022 General Fund’s revenue budget was adopted at $38.8 million and had amendments to intergovernmental revenues of $5.7 million for unanticipated grants. The fiscal year 2021-22 General Fund’s original (adopted) budget for expenditures was $39.7 million, and the final budget was $41.5 million, a net increase of $1.8 million. The largest changes were increases to community development, community services, and public works categories due to higher costs being approved as Covid-19 protocols were relaxed and allowed for more services to be provided to the community.

The General Fund reflected a net total positive budget variance of $4.2 million when comparing actual amounts to the final amended budget for the current fiscal year. Actual revenues show a positive variance of $1.1 million or 2.5% of the final budget due to unanticipated receipts of taxes and charges for services. Actual expenditures of $40.5 million generated budgetary savings of $1.1 million, or 2.6% of the final budget. The remaining budget variance of $2.0 million is due to not needing to transfer out as much money to other funds as was originally anticipated.

CAPITAL ASSETS
The City’s capital assets for its governmental and business-type activities as of June 30, 2022, total $120.4 million compared to $122.5 million (net of accumulated depreciation) as of June 30, 2021. The investment in capital assets includes land, building, equipment, improvements, infrastructure, and construction in progress. Additional information on the City’s capital assets can be found in Note 5 in the notes to the basic financial statements.

Table 3
Capital Assets at Fiscal Year-End
(Net of Depreciation, in Thousands)
Governmental Activities Business-Type Activities Total Activities 2022 2021* 2022 2021 2022 2021*
Land and land easements 21,220 $ 21,220$ $ - $ 21,220 - $ 21,220$ Buildings and improvements 8,658 8,994 - - 8,658 8,994
Machinery and equipment 1,743 1,429 629 564 2,372 1,993 Vehicles 1,572 1,767 264 354 1,836 2,121
Infrastructure 50,526 51,302 31,922 33,606 82,448 84,908 Leased assets 178 1 06 - - 178 1 06
Construction in progress 1,838 1,945 1,847 1,270 3,685 3,215 Totals 85,735$ 86,763$ $ 34,662 35,794$ $ 120,397 122,557$ * as restated
City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2022
11 During fiscal year 2021-2022, major capital projects formally completed include:
 Navy Reservoir External Cathodic Protection system Improvements WT2107 - $63,927  City Hall HVAC Replacement Project BG2001 - $336,627
 FY 19-20 Traffic Signal Modification Project ST2006 - $245,513  FY 20-21 Arterial Street Resurfacing Project (Marina Drive) ST2103 - $555,656  Almond Park Lighting Improvements Project PR2103 - $164,007  City Hall Exterior Stairway Rehabilitation Project BG2102 - $128,845  City Yard Roofing Project BG2106 - $177,644
 Police Department Outside Locker Replacement Project BG2103 - $49,651  Lampson Avenue Drainage Project SD2101 - $189,374
 I-405 Waterline Improvement Relocation EM2201 - $128,006

DEBT ADMINISTRATION
As of June 30, 2022, the City had bonded debt, lease liabilities, notes payable, claims payable, and compensated absence liabilities totaling $7.6 million compared to $8.5 million at the end of fiscal year 2020-21. The City’s governmental activities maintained $2.9 million in lease revenue bonds, leases, claims payable, and compensated absences versus $3.3 million last fiscal year, representing a decrease of approximately $0.4 million. This decrease reflects interest and principal payments made during fiscal year 2021-22.

The City’s business-type activities debt decreased by $0.5 million from $5.2 million to $4.7 million. Debt in the business-type activities consists of lease revenue bonds, State loans for water and sewer capital improvement projects, and compensated absences.

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 core services for our residents, businesses, and visitors contributing to the high quality of life within the City. The City has largely emerged from the pandemicdepressed revenues due to improved economic activity. For the upcoming fiscal year, revenues are expected to improve moderately. However, challenges from high inflation and supply chain issues temper the recovering outlook. The passage of the Measure BB is anticipated to generate approximately $6.5 million in transactions and use tax revenue.

Table 4
Outstanding Debt at Fiscal Year-End
(in Thousands)
Governmental Activities Business-Type Activities Total Activities 2022 2021* 2022 2021 2022 2021*
Lease revenue bonds 735 $ 1,155 $ 1,580 $ 1,765$ $ 2,315 $ 2,920 Leases 538 486 - - 538 486
Capital project notes - 3,052 - 3,341 3,052 3,341
Self-insured claims payable 263 297 - - 263 297
Compensated absences 1,333 1,317 115 1,448 122 1,439
Totals $ 2,869 $ 3,255 $ 4,747 5,228$ $ 7,616 $ 8,483
* as restated
City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2022
12 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 City prepared a balanced annual budget for fiscal year 2022-2023. 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 Balance. The revenue projections for the 2022-2023 budget year were conservative due to the continuing unknown impacts from the pandemic. The City will continue to monitor revenue streams throughout the coming years and will adjust spending levels as 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 2022-2023 CIP recommends approximately $63.3 million in improvements over the next 5 years. The 5 Year Capital Improvement Program identifies needs in the following areas: Buildings ($4.5M) Beach and Pier ($2.8M), Parks ($0.3M), Sewer System ($10.4M), Streets and Transportation ($11.5M) and Water System ($33.8M).

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 36,067,893 $ 18,507,939 $ 54,575,832 $ Accounts receivable 4,402,785 1,330,962 5,733,747
Taxes receivable 3,383,231 - 3,383,231
Lease receivable, due within one year 339,837 - 339,837 Interest receivable 43,906 - 43,906
Due from other governments 378,801 - 378,801
Prepaid items 173,479 10,463 183,942
Total Current Assets 44,789,932 19,849,364 64,639,296
Noncurrent Assets:

Restricted cash with fiscal agent 630,909 25,082 655,991 Lease receivable, due in more than one year 10,455,341 - 10,455,341 Capital assets:

Capital assets, not being depreciated 23,057,851 1,846,707 24,904,558 Capital assets, being depreciated and amortized, net 62,676,710 32,815,156 95,491,866 Total capital assets, net 85,734,561 34,661,863 120,396,424 Total Noncurrent Assets 96,820,811 34,686,945 131,507,756 Total Assets 141,610,743 54,536,309 196,147,052

DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding - 84,492 84,492
Deferred outflow of resources related to pensions 9,629,730 610,517 10,240,247 Deferred outflow of resources related to other postemployment benefits 1,084,991 107,307 1,192,298 Total Deferred Outflows of Resources 10,714,721 802,316 11,517,037 Primary Government
City of Seal Beach
Statement of Net Position
June 30, 2022
See accompanying Notes to the Basic Financial Statements 16 Governmental Business-Type
Activities Activities Total

LIABILITIES
Current Liabilities:

Accounts payable 1,733,368 1,271,142 3,004,510
Accrued liabilities 1,197,530 168,481 1,366,011
Accrued interest 7,165 50,029 57,194
Deposits payable 1,052,728 173,757 1,226,485
Retention payable 13,954 3,196 17,150
Long-term liabilities, due within one year 914,456 525,674 1,440,130 Total Current Liabilities 4,919,201 2,192,279 7,111,480 Long-term liabilities:

Long-term liabilities, due in more than one year 1,954,898 4,221,504 6,176,402 Net pension liabilities 25,866,053 2,013,808 27,879,861 Net other postemployment benefits liabilities 4,142,465 409,694 4,552,159 Total Noncurrent Liabilities 31,963,416 6,645,006 38,608,422 Total Liabilities 8,837,285 36,882,617 45,719,902

DEFERRED INFLOWS OF RESOURCES
Deferred inflow of resources related to pensions 20,375,192 1,872,080 22,247,272 Deferred inflow of resources related to other postemployment benefits 1,076,952 106,512 1,183,464 Deferred inflow of resouces related to leases 10,795,178 - 10,795,178 Total Deferred Inflows of Resources 1,978,592 32,247,322 34,225,914

NET POSITION
Net investment in capital assets 84,447,535 30,111,234 114,558,769 Restricted for:

Community development projects 908,809 - 908,809
Public safety 256,547 - 256,547
Community services 513,864 - 513,864
Public works 4,303,755 - 4,303,755
Debt service 25,082 742,148 767,230
Waste management, park in lieu, and I-405 corridor improvement 2,034,271 - 2,034,271 Total restricted 8,759,394 25,082 8,784,476
Unrestricted (deficit) (10,011,404) 14,386,432 4,375,028 Total Net Position $ 83,195,525 $ 44,522,748 $ 127,718,273 City of Seal Beach
Statement of Net Position (Continued)
June 30, 2022
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 8,604,149 $ 1,129,039 $ 501 $ - $ 1,129,540 $ Public safety 26,912,192 2,547,127 504,884 - 3,052,011
Community development 3,043,960 434,955 6,409,313 - 6,844,268 Community services 1,991,897 1,244,430 - - 1,244,430
Public works 9,086,138 2,842,031 2,447,852 655 5,290,538 Interest and fiscal charges 61,160 - - - -
Total Governmental Activities 8,197,582 49,699,496 9,362,550 655 17,560,787 Business-Type Activities:

Water utility 6,064,434 5,824,338 - - 5,824,338
Sewer utility 2,323,027 2,432,441 - - 2,432,441
Total Business-Type Activities 8,256,779 8,387,461 - - 8,256,779 Total Primary Government $ 16,454,361 58,086,957 $ 9,362,550 $ 655 $ 25,817,566 $ Program Revenues
City of Seal Beach
Statement of Activities
For the Year Ended June 30, 2022
See accompanying Notes to the Basic Financial Statements 18 Governmental Business-Type
Activities Activities Total
Functions/Programs
Governmental Activities:

General government (7,474,609) $ - $ (7,474,609) $
Public safety (23,860,181) - (23,860,181)
Community development 3,800,308 - 3,800,308
Community services (747,467) - (747,467)
Public works (3,795,600) - (3,795,600)
Interest and fiscal charges (61,160) - (61,160)
Total Governmental Activities - (32,138,709) (32,138,709) Business-Type Activities:

Water Utility (240,096) - (240,096)
Sewer Utility 109,414 - 109,414
Total Business-Type Activities (130,682) - (130,682)
Total Primary Government (130,682) (32,138,709) (32,269,391) General Revenues:

Taxes:

Property taxes, levied for general purpose 13,428,911 - 13,428,911 Sales taxes 11,443,583 - 11,443,583
Franchise taxes 1,101,243 - 1,101,243
Utility users tax 4,508,593 - 4,508,593
Transient occupancy taxes 1,670,504 - 1,670,504
Other taxes 757,421 - 757,421
Motor vehicle in lieu- unrestricted 28,238 - 28,238
Use of money and property (1,428,396) 218,203 (1,210,193) Other 69,001 - 69,001
Transfers (733,500) 733,500 -
Total General Revenues and Transfers (515,297) 32,312,598 31,797,301 Changes in Net Position 173,889 (645,979) (472,090)
Net Position:

Beginning of year 83,021,636 45,168,727 128,190,363
End of year $ 83,195,525 $ 44,522,748 $ 127,718,273
Net (Expense) Revenue and Changes in Net Positions
City of Seal Beach
Statement of Activities (Continued)
For the Year Ended June 30, 2022
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 Capital Projects
and Equipment Nonmajor
Capital Projects Governmental
General Fund Funds Total
ASSETS
Cash and investments $ 235,923 30,120,972 $ 5,126,898 $ 35,483,793 $ Accounts receivable - 3,678,901 697,134 4,376,035
Taxes receivable - 3,288,899 94,332 3,383,231
Interest receivable 43,645 - 261 43,906
Lease receivable - 10,795,178 - 10,795,178
Due from other governments - - 378,801 378,801
Due from other funds 877,471 - - 877,471
Prepaid items 51,506 - 121,973 173,479
Restricted assets:

Cash and investments with fiscal agents 4,370 - 626,539 630,909 Total assets $ 48,860,942 $ 235,923 $ 7,045,938 $ 56,142,803

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable $ 1,477,619 $ 119,416 $ 88,905 $ 1,685,940 Accrued liabilities 1,186,511 - 11,019 1,197,530
Deposits payable 1,052,728 - - 1,052,728
Due to other funds - 102,553 774,918 877,471
Retentions payable - 13,954 - 13,954
Total liabilities 3,716,858 235,923 874,842 4,827,623
Deferred inflow of resources:

Unavailable revenue - - 557,165 557,165
Leases 10,795,178 - 10,795,178 -
Total deferred inflow of resources 10,795,178 - 557,165 11,352,343 Fund Balances:

Nonspendable 51,506 - - 51,506
Restricted 2,034,271 - 6,167,958 8,202,229
Committed 23,523,980 - 23,523,980 -
Assigned 4,853,380 - - 4,853,380
Unassigned (deficit) 3,885,769 - (554,027) 3,331,742
Total fund balances 34,348,906 - 5,613,931 39,962,837
Total liabilities, deferred inflow of resources,
and fund balances $ 235,923 48,860,942 $ 7,045,938 $ 56,142,803 $ City of Seal Beach
Balance Sheet
June 30, 2022
Governmental Funds
See accompanying Notes to the Basic Financial Statements 24 Total Fund Balances - Total Governmental Funds $ 39,962,837 Nondepreciable $ 23,057,851
Depreciable and amortizable, net of $1,002,161 reported in Internal Service Funds 61,674,549 84,732,400 Bonds payable $ (735,000)
Loans payable (300,555)
Lease payable (73,067)
Claims and judgments (263,169)
Compensated absences (1,333,113) (2,704,904)
(7,165)
Pension related deferred outflows of resources $ 9,629,730 Net pension liability (25,866,053)
Pension related deferred inflows of resources (20,375,192) (36,611,515) OPEB related deferred outflows of resources $ 1,084,991 Net OPEB liability (4,142,465)
OPEB related deferred inflows of resources (1,076,952) (4,134,426) 557,165
1,401,133
Net Position of Governmental Activities $ 83,195,525
City of Seal Beach
Reconciliation of the Governmental Funds Balance Sheet to the June 30, 2022
Government-Wide Statement of Net Position
Amounts reported for governmental activities in the Statement of Net Position were reported differently because:

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, net of $164,450 reported in Internal Service Funds, are reported in the Statement of 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:

See accompanying Notes to the Basic Financial Statements 25 Capital Projects
and Equipment Other
General Capital Projects Governmental
Fund Fund Funds Total
Revenues:

Taxes 32,910,255 $ - $ 2,066,570 $ 34,976,825 $
Licenses and permits 926,792 - - 926,792
Intergovernmental 5,867,774 - 886,548 6,754,322
Charges for services 4,981,640 - 137,129 5,118,769
Use of money and property (1,250,746) - 52,931 (1,197,815) Fines and forfeitures 1,871,227 - - 1,871,227
Contributions 36,817 - 40,000 76,817
Miscellaneous 239,117 - 1,800 240,917
Total revenues - 45,582,876 3,184,978 48,767,854
Expenditures:

Current:

General government 7,502,596 - 94,943 7,597,539
Public safety 23,296,005 - 596,985 23,892,990
Community development 1,694,335 - 491,372 2,185,707
Community services 1,174,593 - - 1,174,593
Public works 6,646,947 4,355 233,058 6,884,360
Capital outlay 17,239 1,076,085 782,272 1,875,596
Debt service:

Principal retirement 112,556 - 420,000 532,556
Interest and fiscal charges 15,849 - 40,007 55,856
Total expenditures 1,080,440 40,460,120 2,658,637 44,199,197 Revenues over (under) expenditures 5,122,756 (1,080,440) 526,341 4,568,657 Other Financing Sources (uses):

Transfers in 872,800 1,316,362 508,415 2,697,577
Transfers out (1,643,582) - (320,495) (1,964,077)
Total other financing sources (uses): (770,782) 1,316,362 187,920 733,500 Net change in fund balances 4,351,974 235,922 714,261 5,302,157 Fund Balances:

Beginning of year 29,996,932 (235,922) 4,899,670 34,660,680 End of year $ - 34,348,906 $ 5,613,931 $ 39,962,837 $
City of Seal Beach
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2022
See accompanying Notes to the Basic Financial Statements 26 Net Change in Fund Balances - Total Governmental Funds $ 5,302,157 Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds.

Capital outlay, net of $321,355 reported in Internal Service Fund $ 1,908,798 Depreciation and amortization, net of $228,137 reported in Internal Service Fund (2,620,395) Net effect on disposal of capital assets, net of $0 reported in Internal Service Fund (410,197) (1,121,794) Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. 532,556 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. (5,304) 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. 34,126 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. (16,341) 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 $4,789,219. (5,165,036)
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 $901,056. 599,230
Revenues reported as unavailable revenue in the governmental funds and recognized in the Statement of Activities. 371,731
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. (357,436)

Change in net position of governmental activities $ 173,889 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, 2022
and Changes in Fund Balances to the Government-Wide Statement of Activities See accompanying Notes to the Basic Financial Statements 27 This page intentionally left blank.
28 PROPRIETARY FUND FINANCIAL STATEMENTS
29 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds
ASSETS
Current Assets:

Cash and investments 7,243,310 $ 11,264,629 $ 18,507,939 $ 584,100 $ Accounts receivable 475,784 855,178 1,330,962 26,750
Prepaid items 10,463 - 10,463 -
Total Current Assets 11,740,413 8,108,951 19,849,364 610,850 Noncurrent Assets:

Restricted cash 25,082 - 25,082 -
Capital assets, not being depreciated 1,498,343 348,364 1,846,707 - Capital assets, net of accumulated depreciation 14, 17,937,683 877,473 32,815,156 1,002,161 Total capital assets 16,375,816 18,286,047 34,661,863 1,002,161 Total Noncurrent Assets 18,286,047 16,400,898 34,686,945 1,002,161 Total Assets 30,026,460 24,509,849 54,536,309 1,613,011

DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding - 84,492 84,492 -
Pension related items 385,933 224,584 610,517 -
Other postemployment benefits related items 59,615 47,692 107,307 - Total Deferred Outflows of Resources 356,768 445,548 802,316 - (Continued)
June 30, 2022
Proprietary Funds
Statement of Net Position
City of Seal Beach
Business-Type Activities
Enterprise Funds
See accompanying Notes to the Basic Financial Statements 30 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds

LIABILITIES
Current Liabilities:

Accounts payable 1,144,815 126,327 1,271,142 47,428
Accrued liabilities 130,177 38,304 168,481 -
Accrued interest 785 49,244 50,029 -
Retention payable 3,196 - 3,196 -
Deposits payable 165,773 7,984 173,757 -
Compensated absences, due within one year 17,305 19,157 36,462 - Long-term debt, due within one year 84,436 404,776 489,212 36,205 Total Current Liabilities 645,792 1,546,487 2,192,279 83,633 Noncurrent Liabilities:

Compensated absences, due in more than one year 55,263 23,528 78,791 - Long-term debt, due in more than one year 401,073 3,741,640 4,142,713 128,245 Net pension liabilities 1,273,011 740,797 2,013,808 -
Net other postemployment benefits liabilities 227,608 182,086 409,694 - Total Noncurrent Liabilities 4,688,051 1,956,955 6,645,006 128,245 Total Liabilities 5,333,843 3,503,442 8,837,285 211,878

DEFERRED INFLOW OF RESOURCES
Pension related items 1,183,419 688,661 1,872,080 -
Other postemployment benefits related items 59,173 47,339 106,512 - Total Deferred Inflows of Resources 736,000 1,242,592 1,978,592 -

NET POSITION
Net investment in capital assets 15,887,111 14,224,123 30,111,234 837,711 Restricted for debt service 25,082 - 25,082 -
Unrestricted 4,297,170 10,089,262 14,386,432 563,422
Total Net Position $ 20,209,363 $ 24,313,385 $ 44,522,748 $ 1,401,133 Enterprise Funds
City of Seal Beach
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2022
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 5,807,086 $ 2,432,097 $ 8,239,183 $ - $ Miscellaneous 17,252 344 17,596 26,750
Total Operating Revenues 2,432,441 5,824,338 8,256,779 26,750 OPERATING EXPENSES:

Personnel expenses 1,896,263 589,652 2,485,915 -
Operating expenses 3,553,013 317,111 3,870,124 156,349
Amortization and depreciation expenses 614,417 1,265,752 1,880,169 228,137 Total Operating Expenses 2,172,515 6,063,693 8,236,208 384,486 OPERATING INCOME (LOSS) 259,926 (239,355) 20,571 (357,736) NONOPERATING INCOME (LOSS):

Interest revenues 84,513 133,690 218,203 -
Interest expenses (741) (150,512) (151,253) -
Gain on sale of assets - - - 300
Total Nonoperating Income (Loss) (16,822) 83,772 66,950 300 INCOME (LOSS) BEFORE TRANSFERS 243,104 (155,583) 87,521 (357,436) TRANSFERS:

Transfers out (440,000) (293,500) (733,500) -
Total Transfers (293,500) (440,000) (733,500) -
CHANGES IN NET POSITION (50,396) (595,583) (645,979) (357,436) NET POSITION:

Beginning of year 20,804,946 24,363,781 45,168,727 1,758,569 End of year $ 20,209,363 $ 24,313,385 $ 44,522,748 $ 1,401,133 Enterprise Funds
Business-Type Activities
For the Year Ended June 30, 2022
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 5,644,031 $ 2,413,956 $ 8,057,987 $ 7,475 $ Cash paid to suppliers for goods and services (207,525) (3,417,059) (3,624,584) (160,165) Cash paid to employees for services (1,559,538) (784,001) (2,343,539) - Net cash provided by (used in)
operating activities 1,422,430 667,434 2,089,864 (152,690)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Cash transfers out (293,500) (440,000) (733,500) -
Net cash (used in) noncapital
financing activities (440,000) (293,500) (733,500) -

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (609,214) (127,176) (736,390) (136,145) Proceed on disposal of assets - - - 300
Principal paid on long-term debt (84,436) (389,460) (473,896) (20,760) Interest paid on debt (1,259) (154,602) (155,861) -
Net cash (used in) capital and related
financing activities (694,909) (671,238) (1,366,147) (156,605)

CASH FLOWS FROM INVESTING
ACTIVITIES:

Interest received 84,513 133,690 218,203 -
Net cash provided by investing activities 84,513 133,690 218,203 - Net change in cash and cash equivalents (382,962) 591,382 208,420 (309,295) CASH AND CASH EQUIVALENTS:

Beginning of year 7,651,354 10,673,247 18,324,601 893,395 End of year $ 11,264,629 7,268,392 $ 18,533,021 $ 584,100 $

RECONCILIATION OF CASH AND CASH
EQUIVALENTS:

Cash and investments 7,243,310 $ 11,264,629 $ 18,507,939 $ 584,100 $ Restricted cash 25,082 - 25,082 -
Total cash and cash equivalents $ 11,264,629 7,268,392 $ 18,533,021 $ 584,100 $ (Continued)
City of Seal Beach
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2022
Business-Type Activities
Enterprise Funds
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) (239,355) $ 259,926 $ 20,571 (357,736) $ Adjustments to reconcile operating income
(loss) to net cash provided by (used in)
operating activities:

Amortization and depreciation expenses 614,417 1,265,752 1,880,169 228,137 Changes in assets and liabilities:
(Increase)/decrease in accounts receivables (244,291) (19,199) (263,490) (19,275) (Increase)/decrease in prepaid items 5,268 15,731 20,999 - (Increase)/decrease in deferred outflows of
resources related to pensions 67,585 126,112 193,697 -
(Increase)/decrease in deferred outflows of
resources related to OPEB (6,238) (4,991) (11,229) -
Increase/(decrease) in accounts payable 130,686 93,855 224,541 (3,816) Increase/(decrease) in accrued liabilities 72,962 (4,934) 68,028 - Increase/(decrease) in deposits payable 63,984 714 64,698 - Increase/(decrease) in compensated absences (5,903) (863) (6,766) - Increase/(decrease) in net pension liabilities (862,743) (910,738) (1,773,481) - Increase/(decrease) in net OPEB liabilities (67,352) (53,882) (121,234) - Increase/(decrease) in deferred inflows of
resources related to pensions 1,097,749 622,414 1,720,163 - Increase/(decrease) in deferred inflows of
resources related to OPEB 40,665 32,533 73,198 -
Net cash provided by (used in) operating
activities $ 1,422,430 667,434 $ 2,089,864 $ (152,690) $ NONCASH ITEM:

Acquisition of capital assets through lease agreements $ - - $ - $ 185,210 $ Enterprise Funds
City of Seal Beach
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2022
Business-Type Activities
See accompanying Notes to the Basic Financial Statements 35 This page intentionally left blank.
36 FIDUCIARY FUND FINANCIAL STATEMENTS
37 Successor Agency
Custodial Private-purpose
Funds Trust Fund
ASSETS
Cash and investments $ - 900,445 $
Restricted investments with fiscal agent 948,750 -
Total Assets - 1,849,195

LIABILITIES
Current liabilities:

Accounts payable - 71,157
Interest payable - 106,822
Total current liabilities - 177,979
Total liabilities - 177,979

NET POSITION
Restricted
For individual, organization and other government $ - 1,671,216 $ Total fiduciary net position
June 30, 2022
Statement of Fiduciary Net Position
City of Seal Beach
Fiduciary Funds
See accompanying Notes to the Basic Financial Statements 38 Successor Agency
Private-purpose
Custodial Fund Trust Fund
ADDITIONS:

Assessment revenue collected $ - 796,591 $
Deposits - 483,870
Investment income 2 4,385
Total Additions 2 1,284,846
DEDUCTIONS:

Administrative expenses 15,921 -
Payment of special assessment district debt service 797,504 - Total Deductions 15,921 797,504
Change in Net Position (15,919) 487,342
NET POSITION:

Beginning of year 15,919 1,183,874
End of year $ - 1,671,216 $
City of Seal Beach
Statement of Change in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2022
See accompanying Notes to the Basic Financial Statements. 39 This page intentionally left blank.
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, 2022
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. Lease Receivable ............................................................................................................................ 49 G. Prepaid Items .................................................................................................................................. 50 H. Interfund Transactions ..................................................................................................................... 50 I. Capital Assets ................................................................................................................................. 50 J. Unearned and Unavailable Revenue ............................................................................................... 51 K. Compensated Absences Payable ..................................................................................................... 51 L. Claims Payable ............................................................................................................................... 51 M. Pensions .......................................................................................................................................... 52 N. Other Postemployment Benefits ..................................................................................................... 52 O. Deferred Outflows/Inflows of Resources ....................................................................................... 53 P. Long-Term Liabilities ..................................................................................................................... 53 Q. Lease Liabilities .............................................................................................................................. 53 R. Net Position ..................................................................................................................................... 53 S. Fund Balances ................................................................................................................................. 54 T. Spending Policy .............................................................................................................................. 54 U. Use of Estimates ............................................................................................................................. 55 V. Tax Abatement ................................................................................................................................ 55 W. Implementation of New GASB Pronouncements ........................................................................... 55 Note 2 – Cash and Investments .......................................................................................................................... 56 A. Demand Deposits ............................................................................................................................ 57 B. Investments Authorized by the California Government Code and the City's Investment Policy ............................................................................................................ 57 C. Investments Authorized by Debt Agreements ................................................................................ 58 D. Fair Value Measurement ................................................................................................................. 58 E. Risk Disclosures ............................................................................................................................. 59 F. Investment in Local Agency Investment Fund (“LAIF”) ............................................................... 60 Note 3 – Lease Receivable ................................................................................................................................... 61 Note 4 – Interfund Transactions ........................................................................................................................ 61 A. Due From/To Other Funds .............................................................................................................. 61 B. Transfers ......................................................................................................................................... 62 Note 5 – Capital Assets ........................................................................................................................................ 63 Note 6 – Long-Term Liabilities .......................................................................................................................... 65 A. Governmental Activities ................................................................................................................. 65 B. Business-Type Activities ................................................................................................................ 67 City of Seal Beach
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2022
44 Page
Note 7 – Non-City Obligations ........................................................................................................................... 70 A. Heron Pointe Community Facilities District No 2002-01 ............................................................. 70 B. Pacific Gateway Business Center Community Facilities District No 2005-01 ............................. 70 Note 8 – Risk Management and Self Insurance Program ............................................................................... 70 A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement ..................................... 70 B. Self-Insurance Programs of the Authority ..................................................................................... 70 C. Purchased Insurance ...................................................................................................................... 71 D. Adequacy of Protection ................................................................................................................. 72 E. Claims Activity .............................................................................................................................. 72 Note 9 – Defined Benefit Pension Plans ............................................................................................................ 73 A. General Information about the Pension Plan ................................................................................. 74 B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension ............................................................. 76 Note 10 – Other Postemployment Benefits (“OPEB”) Plan ............................................................................ 81 A. General Information about the OPEB Plan .................................................................................... 81 B. Net OPEB Liability ........................................................................................................................ 82 C. Changes in the Net OPEB Liability ............................................................................................... 83 D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB ................................................................................................... 84 Note 11 – Classification of Fund Balances ........................................................................................................ 85 Note 12 – Commitments and Contingencies ..................................................................................................... 86 A. Commitments ................................................................................................................................. 86 B. Contingencies ................................................................................................................................ 86 C. Grants ............................................................................................................................................. 86 Note 13 – Individual Fund Disclosure ............................................................................................................... 86 City of Seal Beach
Notes to the Basic Financial Statements
For the Year Ended June 30, 2022
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, 2022
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 Directors which is the City Council of the City of Seal Beach. The Parking Authority is blended into the 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 with the City as a 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  Except between Governmental and Business-Type Activities, 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, 2022
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 measurable and available. 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. An exception to this general rule is principal and interest on long-term debt which is recognized when due.

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 Funds:

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, 2022
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 wastewater 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 a Vehicle Replacement Internal Service Fund and an Information Technology 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 was paid off during the year ended June 30, 2021. On February 1, 2022, the California Department of Finance approved the dissolution of the Successor Agency Private Purpose Trust Fund.

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, 2022
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. Lease Receivables
The City is a lessor for leases of land and buildings and recognizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable.

At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. The City established a threshold of $50,000 for lease receivables.

Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method. The City used the interest method of revenue recognition.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
50 Note 1 – Summary of Significant Accounting Policies (Continued) F. Lease Receivables (Continued)
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The City uses incremental borrowing rate (IBR) provided by the financial institution at July 1, 2021 for existing leases or the current rate at the time a new lease is executed.  The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.
 Lease receipts included in the measurement of the lease receivable are composed of fixed payments from the lessee.

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

G. Prepaid Items
Prepaid items are payments made to vendors for services that will benefit periods beyond the fiscal year ended.

The City uses the consumption method to account for prepaid items.

H. Interfund Transactions
Transactions 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). These are typically routine and temporary cash flow assistance from the General Fund to other funds in advance of receiving grant funds or other types of revenue.

Transactions which move resources from a fund receiving revenue to the fund through which the resources are expended are recorded as transfers.

I. 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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
51 Note 1 – Summary of Significant Accounting Policies (Continued) I. Capital Assets (Continued)
The City established a threshold to recognize a right-to-use lease asset (lease asset) in the government-wide financial statements and proprietary fund financial statements for a leased asset over $5,000. Lease assets are recorded at the amount of the initial measurement of the lease liabilities and adjusted by any lease payments made to the lessor at or before the commencement of the lease term, less any lease incentives received at or before the commencement of the lease term along with any initial direct costs that are ancillary charges necessary to place the lease assets into service. Lease assets are amortized using the straight-line method over the shorter of the lease term or the useful life of the underlying asset, unless the lease contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the lease asset is amortized over the useful life of the underlying asset.

All other capital assets used in operations are depreciated over their estimated useful 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
J. 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 and fund 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 collected within the availability period (within 60 days of year-end).

K. 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.

L. 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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
52 Note 1 – Summary of Significant Accounting Policies (Continued) M. 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, 2020
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
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.

N. 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 OPEB reporting:

Valuation Date June 30, 2021
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
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, 2022
53 Note 1 – Summary of Significant Accounting Policies (Continued) O. 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 a consumption of net assets that applies to future periods.

Deferred Inflows of Resources represent an acquisition of net assets that applies to future period.

P. 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.

Q. Lease Liabilities
The City recognizes lease liabilities with an initial, individual value of $5,000 or more with a lease term greater than one year in the government-wide and proprietary fund financial statements. Variable payments based on future performance of the lessee or usage of the underlying asset are not included in the measurement of the lease liability.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.  The City uses incremental borrowing rate provided by the financial institution at July 1, 2021 for existing leases or the current rate at the time a new lease is executed.  The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.
 Lease payments included in the measurement of the lease payable is composed of fixed payments to the lessor.

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

R. 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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
54 Note 1 – Summary of Significant Accounting Policies (Continued) R. Net Position (Continued)
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.

S. 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.

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.

T. 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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
55 Note 1 – Summary of Significant Accounting Policies (Continued) T. Spending Policy (Continued)
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
U. 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.

V. 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.

W. Implementation of New GASB Pronouncements
During the fiscal year ended June 30, 2022, the City implemented the following new GASB pronouncements:

GASB Statement No. 87 – In June 2017, GASB issued Statement No. 87, Leases (GASB Statement No. 87), to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It also establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. The effective date of GASB Statement No. 87 (as amended by GASB Statement No. 95) is for fiscal years beginning after June 15, 2021. Implementation of this Statement resulted in restatement of beginning balance of lease assets (Note 5) and lease liabilities (Note 6) at July 1, 2021.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
56 Note 1 – Summary of Significant Accounting Policies (Continued) W. Implementation of New GASB Pronouncements (Continued) GASB Statement No. 89 – In June 2018, GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. This Statement establishes accounting requirements for interest cost incurred before the end of a construction period. Such interest cost includes all interest that previously was accounted for in accordance with the requirements of paragraphs 5–22 of Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre–November 30, 1989 FASB and AICPA Pronouncements, which are superseded by this Statement. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business–type activity or enterprise fund. Implementation of this Statement did not have a significant effect on the City’s financial statements for the fiscal year ended June 30, 2022.

GASB Statement No. 92 – In January 2020, GASB issued Statement No. 92, Omnibus 2020. The primary objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. Implementation of this Statement did not have a significant effect on the City’s financial statements for the fiscal year ended June 30, 2022.

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, 2022:

Government-Wide Statement of
Statement of Fiduciary
Net Position Net Position Total
Cash and investments $ 54,575,832 $ 900,445 $ 55,476,277 Restricted cash and investment
with fiscal agent 655,991 948,750 1,604,741
Total cash and investments $ 55,231,823 $ 1,849,195 $ 57,081,018 The City’s cash and investments at June 30, 2022 in more detail:

Cash and Investments:

Petty cash 9,000 $
Demand deposits 3,410,674
Restricted cash 29,452
Investments 53,631,892
Total cash and investments 57,081,018 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
57 Note 2 – Cash and Investments (Continued)
A. Demand Deposits
The carrying amounts of the City’s demand deposits were $3,410,674 at June 30, 2022. Bank balances at that date were $3,807,273, 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.

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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
58 Note 2 – Cash and Investments (Continued)
C. Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The following table 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.

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
D. Fair Value Measurement
At June 30, 2022, 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, 2022:

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

US Treasury bonds/notes 13,023,742 $ 13,023,742 $ - $
Supra-National Agency Note 613,550 - 613,550
U.S. government sponsored enterprise security 7,650,263 - 7,650,263 Asset-backed securities 47,701 - 47,701
Municipal bonds 1,134,520 - 1,134,520
Corporate note 4,436,388 - 4,436,388
Negotiable certificates of deposit 916,392 - 916,392
Total investments subject to fair value measurement $ 13,023,742 27,822,556 $ 14,798,814 $ Fair Value Measurement
Investments in municipal bonds/notes, U.S. government sponsored enterprise securities, asset-backed securities and corporate notes 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, 2022
59 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 $ 13,023,742 $ 777,739 $ 2,833,585 $ 2,437,139 $ 6,587,134 $ 388,145 Supra-National Agency Note 613,550 207,038 - 406,512 - - U.S. government sponsored enterprise
security 7,650,263 1,586,839 2,310,915 1,790,842 1,961,667 - Asset-backed securities 47,701 - - 47,701 - -
Municipal bonds 1,134,520 267,268 - 509,108 358,144 -
Corporate note 4,436,388 608,693 662,517 1,988,630 640,243 536,305 Negotiable certificates of deposit 916,392 916,392 - - - - LAIF 24,234,047 24,234,047 - - - -
Investments with Fiscal Agent:

Money Market Mutual Funds 1,575,289 1,575,289 - - - -
Total investments $ 53,631,892 $ 29,698,999 $ 6,281,323 $ 7,132,231 $ 9,594,889 $ 924,450 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+ Unrated Investments:

US Treasury bonds/notes N/R 13,023,742 $ $ - 13,023,742 $ - $ - $ Supra-National Agency Note AA 613,550 - 613,550 - -
U.S. government sponsored enterprise
security A 7,650,263 - 7,650,263 - -
Asset-backed securities AA 47,701 47,701 - - -
Municipal bonds 1,134,520 183,093 951,427 - -
Corporate note A 4,436,388 499,213 665,045 3,272,130 -
Negotiable certificates of deposit NR 916,392 - 916,392 - - LAIF N/A 24,234,047 - - 24,234,047 -
Investments with Fiscal Agent:

Money Market Mutual Funds N/R 1,575,289 1,575,289 - - - Total investments $ 53,631,892 $ 23,592,851 $ 1,616,472 $ 4,188,522 $ 24,234,047 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, 2022
60 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 Federal National Mortgage Association and Federal Home Loan Mortgage Association in amounts of $3,843,855 and $2,614,180 represented

7.4% and 5.0% 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, 2022, 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, 2022 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, 2022, the City had $24,234,047 invested in LAIF, which had invested 1.88% 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 cost, which approximates fair value.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
61 Note 3 – Lease Receivables
Lease receivables consists of agreements with other for the right–to–use of the underlying assets for land and buildings owned by the City at various locations for cell tower use and business use, respectively. The remaining terms of the business agreements range from 3 to 35 years and the cell towers range from 4 to 25 years. The incremental borrowing rates used was 1.5%. For the year ended June 30, 2022, the City recognized $319,974 in lease revenue and $165,053 in lease interest revenue for General Fund. The outstanding lease receivable is in the amount of $10,795,178 in the General Fund.

The future receipts for the lease receivables, including interest, are as follows:

Year ending
June 30, Principal Interest Total
2023 339,837 $ $ 160,139 $ 499,976
2024 342,714 155,389 498,103
2025 355,053 149,865 504,918
2026 350,753 144,460 495,213
2027 292,970 139,671 432,641
2028-2032 1,542,915 630,441 2,173,356
2033-2037 1,916,152 502,863 2,419,015
2038-2042 1,906,308 357,008 2,263,316
2043-2047 1,798,128 225,057 2,023,185
2048-2052 860,936 115,331 976,267
2053-2057 1,089,412 42,280 1,131,692
$ 10,795,178 $ 2,622,504 $ 13,417,682
Note 4 – Interfund Transactions
A. Due From/To Other Funds
At June 30, 2022, the City had the following due from/to other funds:

Due To Other Funds
Capital Projects and Equipment
Capital Projects Fund
Nonmajor Governmental Funds
Total
774,918
$ 877,471
Due From Other Funds
General Fund
$ 102,553
The above amounts resulted from deficits in the pooled cash account.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
62 Note 4 – Interfund Transactions (Continued)
B. Transfers
During the year ended June 30, 2022, the City had the following transfers:

Nonmajor Water Utility Sewer Utility
General Governmental Enterprise Enterprise
Transfers in Fund Funds Fund Fund Total
General Fund - $ 139,300 $ 440,000 $ 293,500 $ 872,800 $ Capital Projects and Equipment
Capital Projects Fund 1,135,167 181,195 - 1,316,362 -
Nonmajor Governmental Funds 508,415 - - 508,415 -
Total $ 1,643,582 $ 320,495 $ 440,000 $ 293,500 $ 2,697,577 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 $733,500 from the Water and Sewer Utility Enterprise Funds were made to the General Fund to provide funding for certain administrative costs. Transfers of $139,300 from Nonmajor Governmental Funds were made to the General Fund for non-capital expenditures.

The General Fund and the Nonmajor Governmental Funds transferred $1,135,167 and $181,195 to the Capital Projects and Equipment Capital Projects Fund to pay for capital projects.

The General Fund transferred a total of $508,415 to the Nonmajor Governmental for debt service-related costs.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
63 Note 5 – Capital Assets
The summary of changes in governmental activities capital assets for the year ended June 30, 2022 is as follows:

Balance
July 1, 2021 Balance
(As Restated) Additions Deletions Reclassifications June 30, 2022 Capital assets not being depreciated:

Land 20,319,847 $ - $ - $ - $ 20,319,847 $
Intangible asset-land easement 900,000 - - - 900,000
Construction in progress 1,944,783 916,713 - (1,023,492) 1,838,004 Total capital assets not being depreciated 23,164,630 916,713 - (1,023,492) 23,057,851 Capital assets being depreciated:

Buildings and improvements 16,731,683 196,797 (216,008) - 16,712,472 Machinery and equipment 3,827,684 513,395 - - 4,341,079 Vehicles 3,516,694 136,145 (56,207) - 3,596,632
Infrastructure 91,713,234 281,893 (271,540) 1,023,492 92,747,079 Total capital assets being depreciated 115,789,295 1,128,230 (543,755) 1,023,492 117,397,262 Less accumulated depreciation for:

Buildings and improvements (7,737,308) (403,127) 86,423 (8,054,012) - Machinery and equipment (2,398,529) (199,624) - (2,598,153) - Vehicles (1,750,433) (321,214) 47,135 (2,024,512) -
Infrastructure (40,410,583) (1,811,091) - (42,221,674) - Total accumulated depreciation (52,296,853) (2,735,056) 133,558 (54,898,351) - Total capital assets being depreciated, net 63,492,442 (1,606,826) (410,197) 1,023,492 62,498,911 Intangible assets being amortized:

Leased assets 106,065 185,210 - - 291,275
Accumulated amortization - (113,476) - - (113,476)
Total capital assets being depreciated, net 106,065 71,734 - - 177,799 Total governmental activities $ 86,763,137 $ (618,379) $ (410,197) $ 85,734,561 - $ Depreciation and amortization expense was charged to functions/programs of governmental activities for the year ended June 30, 2022 as follows:

General government $ 162,157
Public safety 440,906
Community development 134,840
Public works 1,903,251
Internal service funds 207,378
Total depreciation and amortization
expense $ 2,848,532
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
64 Note 5 – Capital Assets (Continued)
The summary of changes in business-type activities capital assets for the year ended June 30, 2022 is as follows:

Balance Balance
July 1, 2021 Additions Deletions Reclassifications June 30, 2022 Capital assets not being depreciated:

Construction in progress-water $ 1,004,720 $ 565,047 $ - $ (71,424) $ 1,498,343 Construction in progress-sewer 264,575 83,789 - - 348,364 Total capital assets not being depreciated 1,269,295 648,836 - (71,424) 1,846,707 Capital assets being depreciated:

Buildings and improvements - water 73,284 - - - 73,284
Machinery and equipment - water 617,059 43,387 - - 660,446 Machinery and equipment - sewer 785,802 43,387 - - 829,189 Vehicles - water 297,295 - - - 297,295
Vehicles - sewer 589,772 - - - 589,772
Infrastructure - water 34,265,102 780 - 71,424 34,337,306 Infrastructure - sewer 38,622,844 - - 38,622,844 -
Total capital assets being depreciated 75,251,158 87,554 - 71,424 75,410,136 Less accumulated depreciation for:

Buildings and improvements - water (73,284) - - - (73,284) Machinery and equipment - water (543,392) (5,980) - - (549,372) Machinery and equipment - sewer (295,796) (15,329) - - (311,125) Vehicles - water (169,027) (31,666) - - (200,693)
Vehicles - sewer (363,986) (57,567) - - (421,553)
Infrastructure - water (19,090,738) (576,771) - (19,667,509) - Infrastructure - sewer (20,190,659) (1,180,785) - (21,371,444) - Total accumulated depreciation (40,726,882) (1,868,098) - (42,594,980) - Total capital assets being depreciated, net 34,524,276 (1,780,544) - 71,424 32,815,156 Total business-type activities $ 35,793,571 $ (1,131,708) $ - $ 34,661,863 - $ Depreciation expense was charged to functions/programs of business-type activities for the year ended June 30, 2022 as follows:

Water Utility $ 614,417
Sewer Utility 1,253,681
Total depreciation expense $ 1,868,098
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
65 Note 6 – Long-Term Liabilities
A. Governmental Activities
Summary of changes in long-term liabilities for governmental activities for the year ended June 30, 2022 is as follows:

Balance
July 1, 2021 Balance Due within Due in more
(As Restated) Additions Deletions June 30, 2022 One Year than One Year Private Placement
2009 Lease Revenue Bonds $ 1,155,000 $ (420,000) - $ $ 735,000 $ 420,000 $ 315,000 Direct Borrowing
Municipal Finance Corporation 380,113 (79,558) - 300,555 82,286 218,269 Leases
De Lage Landen 106,065 (32,998) - 73,067 34,324 38,743
Enterprise Fleet 185,210 - (20,760) 164,450 36,205 128,245 Claims payable 297,295 - (34,126) 263,169 52,151 211,018 Compensated absences 1,316,772 750,992 (734,651) 1,333,113 289,490 1,043,623 Total 3,255,245 $ $ 936,202 $ (1,322,093) $ 2,869,354 $ 914,456 $ 1,954,898 Classification
The General Fund has been used to liquidate the majority of the liability for compensated absences 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%.

Annual installments are due April 15, 2009 through January 15, 2024. The total balance of the 2009 Series Lease Revenue bonds at June 30, 2022 was $735,000.

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
2023 $ 420,000 $ 21,425 441,425
2024 315,000 5,844 320,844
Total $ 735,000 $ 27,269 $ 762,269
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
66 Note 6 – 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, 2022 was $300,555.

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
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 $ 300,555 $ 20,782 $ 321,337
De Lage Landen Public Finance Lease Payable
On August 27, 2019, the City entered into a 60-month lease agreement with De Lage Landen Public Finance LLC for 22 copy machines for a monthly lease payment in the amount of $3,049 plus a monthly service/maintenance payment of $1,563 for a total monthly payment of $4,612. Lease and service/maintenance payments are due on the 1st of each month. Interest on the copy machines accrues at 3.17% annum. In the event of default, the lease shall be deemed terminated. The value of the right to use asset as of June 30, 2022 of $106,065 with accumulated amortization of $32,997 is included in the governmental activities intangible assets.

Future lease payments under the lease payable are as follows:

Year Ending
June 30, Principal Interest Total
2023 $ 34,324 $ 2,269 $ 36,593
2024 38,743 899 39,642
Total $ 73,067 $ 3,168 $ 76,235
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
67 Note 6 – Long-Term Liabilities (Continued)
A. Governmental Activities (Continued)
Enterprise Fleet
On October 25, 2021, the City entered into a 60-month lease agreement with Enterprise Fleet Management for 3 vehicles for a total monthly lease payment in the amount of $3,202. Lease payments are due on the 1st of each month. Interest accrues at 1.0% to 2.6% annum. In the event of default, the lease shall be deemed terminated. The value of the right to use asset as of June 30, 2022 of $185,210 with accumulated amortization of $20,759 is included in the governmental activities intangible assets.

Future lease payments under the lease payable are as follows:

Year Ending
June 30, Principal Interest Total
2023 36,205 $ 2,198 $ 38,403 $
2024 36,746 1,655 38,401
2025 37,306 1,096 38,402
2026 37,870 532 38,402
2027 16,323 54 16,377
Total 164,450 $ $ 5,535 $ 169,985
B. Business-Type Activities
Summary of changes in long-term liabilities for business-type activities for the year ended June 30, 2022 is as follows:

Balance Balance Due within Due in more
July 1, 2021 Additions Deletions June 30, 2022 One Year than One Year Private Placement
2011 Sewer Revenue Refunding Bonds 1,765,000 $ - $ (185,000) $ 1,580,000 $ 195,000 $ 1,385,000 $ Direct Borrowing
Sewer Capital Improvement Project #1 1,606,294 - (128,017) 1,478,277 131,345 1,346,932 Sewer Capital Improvement Project #2 1,164,582 - (76,443) 1,088,139 78,431 1,009,708 West Orange County Water Board Loan 569,945 - (84,436) 485,509 84,436 401,073 Compensated absences 122,019 57,892 (64,658) 115,253 36,462 78,791 Total $ 5,227,840 $ 57,892 $ (538,554) $ 4,747,178 $ 525,674 $ 4,221,504 Classification
The Water Utility Fund and Sewer Utility Fund have been used to liquidate the liability for compensated absences.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
68 Note 6 – 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 outstanding balance of the 2011 Sewer System Revenue Refunding Bonds at June 30, 2022 was $1,580,000. 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
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 235,000 32,760 267,760
2028-2029 505,000 30,720 535,720
Total 1,580,000 $ 298,920 $ 1,878,920 $
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, 2022, 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, 2022 was $1,478,277.

In the event of default, the Clean Water State Revolving Fund Control Board may sue the City as it deems necessary to compel the payment of the loan.

The annual debt service requirements are as follows:

Year ending
June 30, Principal Interest Total
2023 131,345 $ 38,435 $ 169,780 $
2024 134,760 35,020 169,780
2025 138,264 31,516 169,780
2026 141,859 27,922 169,780
2027 145,547 24,233 169,780
2028-2032 786,502 62,397 848,901
Total 1,478,277 $ 219,523 $ 1,697,802 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
69 Note 6 – 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, 2022, 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, 2022 was $1,088,139.

In the event of default, the Clean Water State Revolving Fund Control Board may sue the City as it deems necessary to compel the payment of the loan.

The annual debt service requirements are as follows:

Year ending
June 30, Principal Interest Total
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 1,088,139 $ 192,535 $ 1,280,674 $
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, 2022 was $485,509.

The annual debt service requirements are as follows:

Year ending
June 30, Principal Interest Total
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 84,436 4,370 88,806
2028 63,329 1,302 64,631
Total 485,509 $ 40,367 $ 525,876 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
70 Note 7 – 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, 2022, was $2,665,000.

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, 2022, was $7,035,000.

Note 8 – 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 124 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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
71 Note 8 – Risk Management and Self Insurance Program (Continued) B. Self-Insurance Programs of the Authority (Continued) 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/.

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 2021-22 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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
72 Note 8 – Risk Management and Self Insurance Program (Continued) C. Purchased Insurance (Continued)
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 $58,413,725. 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 $57,524,225. 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.

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 2021-22.

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, 2022, the amount of these liabilities was $263,169 and was the City’s best estimate based on available information. The General Fund is typically used to liquidate these liabilities.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
73 Note 8 – Risk Management and Self Insurance Program (Continued) E. Claims Activity (Continued)
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 2019-2020 $ 423,347 $ - $ (121,934) $ 301,413
2020-2021 301,413 - (4,118) 297,295
2021-2022 297,295 - (34,126) 263,169
Note 9 – 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, 2022 and pension expenses for the year ended June 30, 2022:

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

Pension contribution made after measurement date:

Miscellaneous $ 1,236,399 $ 339,234 $ 1,575,633
Safety 3,642,820 3,642,820 -
Difference between expected and actual experience:

Miscellaneous 823,068 225,827 1,048,895
Safety 3,537,577 3,537,577 -
Adjustment due to differences in proportions:

Miscellaneous 165,676 45,456 211,132
Safety 224,190 - 224,190
Total deferred outflows of resources $ 9,629,730 $ 610,517 $ 10,240,247 Net pension liabilities:

Miscellaneous $ 7,339,687 $ 2,013,808 $ 9,353,495
Safety 18,526,366 18,526,366 -
Total net pension liabilities $ 25,866,053 $ 2,013,808 $ 27,879,861 City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
74 Note 9 – Defined Benefit Pension Plans (Continued)
Governmental Business-type
Activities Activities Total
Deferred inflows of resources:

Difference in projected and actual earnings on
pension investments:

Miscellaneous $ 6,407,166 $ 1,757,949 $ 8,165,115
Safety 12,323,971 12,323,971 -
Adjustment due to differences in proportions:

Miscellaneous 115,330 31,644 146,974
Safety 115,990 - 115,990
Difference between City's contributions and
proportionate share of contributions:

Miscellaneous 300,638 82,487 383,125
Safety 1,112,097 1,112,097 -
Total deferred inflows of resources $ 20,375,192 $ 1,872,080 $ 22,247,272 Pension expenses (credit):

Miscellaneous $ 4,379,877 $ 479,613 $ 4,859,490
Safety 5,664,378 5,664,378 -
Total pension expense $ 10,044,255 $ 479,613 $ 10,523,868 Pension liabilities are liquidated principally by General Fund, Water Utility Fund, and Sewer Utility Fund.

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, 2020, the following employees were covered by the benefit terms:

Miscellaneous Misc PEPRA Safety Safety Fire
Safety Police
PEPRA
Other Safety
PEPRA
Active employees 39 19 32 - 9 1
Transferred and terminated employees 39 6 6 - - -
Separated 26 2 5 - 1 -
Retired Employees and Beneficiaries 147 1 95 37 - -
Total 251 28 138 37 10 1
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
75 Note 9 – Defined Benefit Pension Plans (Continued)
A. General Information about the Pension Plan (Continued) Benefit Provided
CalPERS provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Classic miscellaneous members become 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. Classic safety members become eligible for service retirement upon attainment of age 50 with at least five years of service. PEPRA safety members become eligible for service retirement upon attainment of age 57 with at least five 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
* Closed to new entrants
Cost-sharing Rate Plans
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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
76 Note 9 – Defined Benefit Pension Plans (Continued)
A. General Information about the Pension Plan (Continued) Benefit Provided (Continued)
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 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 City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the measurement period ended June 30, 2021 (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% 7.250% 9.000% 12.750% Required employer contribution rates 11.746% 7.874% 25.540% 13.884% * Closed to new entrants
Cost-sharing Rate Plans
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, 2020 valuation was rolled forward to determine June 30, 2021 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
Derived using CalPERS’ Membership Data for all Funds
Entry age normal in accordance with requirements of GASB 68 Varies by Entry Age and Service
Contract COLA up to 2.5% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 2.5% thereafter
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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
77 Note 9 – Defined Benefit Pension Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension
Change of Assumption
In 2021, 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 follows:

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 ACFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. 2 An expected inflation of 2.00% used for this period 3 An expected inflation of 2.92% used for this period.
4 Figures are based on previous ALM 2017
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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
78 Note 9 – Defined Benefit Pension Plans (Continued)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pension (Continued)
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 $ 9,353,495 16,296,570 $ 3,613,754 $
Safety $ 18,526,366 31,794,992 $ 3,027,955 $
Plan's Net Pension Liability/(Asset)
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 Plan Fiduciary Net Pension
Pension Liability Net Position Liability/(Asset)
Miscellaneous
Balance at: 6/30/20 (Valuation date) 50,971,659 $ 36,560,362 $ 14,411,297 $ Balance at: 6/30/21 (Measurement date) 52,586,741 43,233,246 9,353,495 Net Changes during 2020-2021 1,615,082 6,672,884 (5,057,802) Safety
Balance at: 6/30/20 (Valuation date) $ 95,105,297 $ 66,682,116 $ 28,423,181 Balance at: 6/30/21 (Measurement date) 98,571,877 80,045,511 18,526,366 Net Changes during 2020-2021 3,466,580 13,363,395 (9,896,815) 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, 2020). 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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
79 Note 9 – 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) (2) Using standard actuarial roll forward methods, the risk pool TPL is then computed at the measurement date (June 30, 2021). 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, 2021 less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the measurement period (2020-2021). (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. (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, 2020 0.13245% 0.26123%
June 30, 2021 0.17294% 0.97569%
Change - Increase (Decrease) 0.04049% 0.71446%
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 2020-2021 measurement period is 3.7 years, which was obtained by dividing the total service years of 561,622 (the sum of remaining service lifetimes of the active employees) by 150,648 (the total number of participants: active, inactive, and retired).

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
80 Note 9 – 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) At June 30, 2022, 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 $ 1,575,633 $ - $ 3,642,820 $ - Difference between expected and actual experience 1,048,895 - 3,537,577 - Difference between projected and actual earning on
pension plan investments - (8,165,115) (12,323,971) -
Adjustment due to differences in proportions 211,132 (146,974) 224,190 (115,990) Difference between City contributions and
proportionate share of contributions - (383,125) - (1,112,097) Total $ 2,835,660 $ (8,695,214) $ 7,404,587 $ (13,552,058) Miscellaneous Safety
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, 2022. 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
2022 (1,598,903) $ (1,643,314) $
2023 (1,690,389) (2,040,936)
2024 (1,889,479) (2,714,657)
2025 (2,256,416) (3,391,384)
Thereafter - -
$ (7,435,187) $ (9,790,291)
Deferred Outflows/
(Inflows) of Resources
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
81 Note 10 – 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, 2022 and pension expenses for the year then ended June 30, 2022:

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

OPEB contribution made after measurement date 901,056 $ 89,115 $ 990,171 $ Changes of assumptions 88,620 8,765 97,385
Difference between expected and actual experience 95,315 9,427 104,742 Total deferred outflows of resources $ 107,307 1,084,991 $ 1,192,298 $ Net OPEB liabilities $ 409,694 4,142,465 $ 4,552,159 $
Deferred inflows of resources:

Changes of assumptions 164,941 $ 16,313 $ 181,254 $
Difference between expected and actual experience 84,640 8,371 93,011 Difference in projected and actual earnings on
OPEB investments 827,371 81,828 909,199
Total deferred inflows of resources $ 1,076,952 $ 106,512 $ 1,183,464 OPEB expenses $ 301,826 $ 29,850 $ 331,076
OPEB liabilities are liquidated principally by General Fund, Water Utility Fund, and Sewer Utility Fund.

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 ($149 per month in 2022) 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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
82 Note 10 – Other Postemployment Benefits (“OPEB”) Plan (Continued) A. General Information about the OPEB Plan (Continued)
Employees Covered by Benefit Term
Active employees 91
10 79
Total 180
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, 2021, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2021.

Actuarial Assumptions
The total OPEB liability in the June 30, 2021 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
to 2022 followed by 5.75% (non-Medicare) / 5.4% (Medicare) in 2022, decreasing gradually to an ultimate rate of 4.04% by 2075.

Mortality rate
Additional merit-based increases based on CalPERS.

Entry age normal level percentage of salary
Base salary increases in year one: 2.80%
Base salary increases in subsequent years: 2.80%
Based on 2021 Getzen model that reflects actual premium increases from 2021 Derived using CalPERS’ Membership Data for all Funds.

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.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
83 Note 10 – Other Postemployment Benefits (“OPEB”) Plan (Continued) C. Changes in the Net OPEB Liability
Total OPEB Fiduciary Net Net OPEB
Liability Position Liability
Balances as of June 30, 2020 $ 11,953,660 $ 6,054,455 $ 5,899,205 Changes during the measurement period:

Service cost 269,955 - 269,955
Interest 771,486 - 771,486
Differences between expected and actual experience 122,199 - 122,199 Change of assumptions 113,616 - 113,616
Contributions:

Employer - City's contribution - 963,042 (963,042)
Employer - implicit subsidy - - -
Employee - - -
Net investment income - 1,663,551 (1,663,551)
Benefit payments, including refunds of employee
Contributions 720,545 720,545 -
Implicit rate subsidy fulfilled - - -
Administrative expenses - (2,291) 2,291
Net changes during measurement period 2020-2021 1,997,801 3,344,847 (1,347,046) Balances as of June 30, 2021 (Measurement Date) $ 12,510,371 $ 7,958,212 $ 4,552,159 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%)
$ 6,115,711 $ 4,552,159 $ 3,249,208
Net OPEB Liability/(Asset)
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 (4.25%) or one percentage point higher (6.70%) than current healthcare cost trend rates follows:

Healthcare
1% Decrease Cost Trend Rate 1% Increase
(4.25% to 4.00%) (5.75% to 4.00%) (6.70% to 4.00%)
$ 4,552,159 3,316,839 $ 6,051,431 $
Net OPEB Liability/(Asset)
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
84 Note 10 – Other Postemployment Benefits (“OPEB”) Plan (Continued) D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2022, the City recognized an OPEB expense of $331,676. At June 30, 2022, 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 $ 990,171 $ -
Difference between expected and actual experience 104,742 (93,011) Changes of assumptions 97,385 (181,254)
Difference between projected and actual earning on
OPEB plan investments - (909,199)
Total $ 1,192,298 $ (1,183,464)
Deferred outflows of resources related to OPEB resulting from City’s contributions subsequent to the measurement date in the amount of $990,171 will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2023. 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
2022 (286,150) $
2023 (277,731)
2024 (239,287)
2025 (241,027)
2026 29,172
Thereafter 33,686
$ (981,337)
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
85 Note 11 – Classification of Fund Balances
At June 30, 2022, fund balances are classified in the governmental funds as follows:

Nonmajor
General Governmental
Fund Funds Total
Nonspendable:

Prepaid items $ 51,506 $ - $ 51,506
Restricted:

Waste Management 163,664 - 163,664
Parking In-lieu 183,087 - 183,087
I-405 Corridor Improvements 1,687,520 1,687,520 -
Supplemental Law Enforcement - 108,607 108,607
Detention Center - 28,341 28,341
Air Quality Improvements - 47,512 47,512
Parks Improvement - 53,214 53,214
Traffic Impact - 192,347 192,347
State Gasoline Tax 1,271,616 - 1,271,616
Measure M2 1,295,721 - 1,295,721
Community Development Block Grant - 62,708 62,708
Landscape District - 661,618 661,618
Heron Pointe - 62,594 62,594
Pacific Gateway - 121,889 121,889
Seal Beach Cable - 513,864 513,864
SB 1 1,005,779 - 1,005,779
City Debt Service - 742,148 742,148
Total restricted 2,034,271 6,167,958 8,202,229
Committed:

College Park East 477,000 - 477,000
Swimming Pool 4,535,126 4,535,126 -
Street Improvement 117,167 - 117,167
Fiscal Policy 9,868,736 9,868,736 -
Economic Contingency 1,750,000 1,750,000 -
Capital Project Improvement 3,659,639 3,659,639 -
Revitalization 3,116,312 3,116,312 -
Total restricted 23,523,980 23,523,980 -
Assigned:

Community Development 1,403,817 1,403,817 -
Pier Restaurant 1,395,638 1,395,638 -
Compensated Absences 1,300,432 1,300,432 -
Encumbrances 507,780 - 507,780
Other 245,713 - 245,713
Total assigned 4,853,380 4,853,380 -
Unassigned (deficit) (554,027) 3,885,769 3,331,742
Total fund balances $ 5,613,931 34,348,906 $ 39,962,837 $ The encumbrances are for the purchase orders of $146,656 for public works, $33,514 for police, and $327,610 for community development.

City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2022
86 Note 12 – Commitments and Contingencies
A. Commitments
The City had no material commitments as of June 30, 2022.

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 13 – Individual Fund Disclosure
Funds with deficit fund balances at June 30, 2022 are as follows:

Deficit
Street Lighting Special Revenue Fund (16,353) $
Police Asset Forfeiture Special Revenue Fund (242,245)
Police Grants Special Revenue Fund (10,457)
Citywide Grants Special Revenue Fund (284,972)
The City plans to eliminate the deficit fund balances with future grant revenues.

The following funds exceeded appropriation amounts for the year ended June 30, 2022:

Expenditures
in Excess of
Expenditures Appropriations Appropriations
Nonmajor Governmental Funds:

Detention Center Special Revenue Fund 57 $ - $ (57) $
Community Development Block Grant
Special Revenue Fund 248,561 229,151 (19,410)
Seal Beach Cable Special Revenue Fund 94,943 84,900 (10,043) City Debt Service Fund 460,007 460,000 (7)

REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)
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88 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 30,558,900 $ 30,558,900 $ 32,910,255 $ 2,351,355 $ Licenses and permits 749,300 749,300 926,792 177,492
Intergovernmental 132,400 5,848,832 5,867,774 18,942
Charges for services 4,582,100 4,582,100 4,981,640 399,540 Use of money and property 784,000 784,000 (1,250,746) (2,034,746) Fines and forfeitures 1,603,600 1,603,600 1,871,227 267,627 Contributions 19,000 19,000 36,817 17,817
Miscellaneous 336,800 336,800 239,117 (97,683)
Total revenues 44,482,532 38,766,100 45,582,876 1,100,344 Expenditures:

Current:

General government 7,494,900 7,512,095 7,502,596 9,499
Public safety 22,142,700 22,832,992 23,296,005 (463,013) Community development 1,519,900 2,111,624 1,694,335 417,289 Community services 1,013,600 1,213,025 1,174,593 38,432 Public works 6,649,700 6,989,556 6,646,947 342,609
Capital outlay 800,000 800,000 17,239 782,761
Debt service:

Principal retirement 79,600 79,600 112,556 (32,956)
Interest and fiscal charges 12,300 12,300 15,849 (3,549) Total expenditures 41,551,192 39,712,700 40,460,120 1,091,072 Revenues over (under) expenditures (946,600) 2,931,340 5,122,756 2,191,416 Other Financing Sources (Uses):

Transfers in 840,100 840,100 872,800 32,700
Transfers out (1,339,300) (3,639,300) (1,643,582) 1,995,718 Total other financing sources (uses) (499,200) (2,799,200) (770,782) 2,028,418 Net change in fund balance $ (1,445,800) $ 132,140 4,351,974 $ 4,219,834 Fund Balance:

Beginning of year 29,996,932
End of year $ 34,348,906
City of Seal Beach
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 2022
Budgeted Amounts
Budgetary Comparison Schedule – General Fund
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90 City of Seal Beach
Required Supplementary Information (Unaudited)
Notes to the Budgetary Comparison Schedule
For the Year Ended June 30, 2022
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. In fiscal year 2021-2022, no budget was adopted for the Detention Center 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. 91 Measurement Date June 30, 2021 June 30, 2020 June 30, 2019 City's Proportion of the Net Pension Liability 0.17295% 0.13777% 0.12949% City's Proportionate Share of the Net Pension Liability $ 9,353,495 $ 14,411,297 $ 13,320,233 City's Covered Payroll $ 5,387,941 $ 5,243,738 $ 4,721,968 City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 173.60% 274.83% 282.09% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 82.21% 71.73% 73.26% Measurement Date June 30, 2021 June 30, 2020 June 30, 2019 City's Proportion of the Net Pension Liability 1.09047% 0.26123% 0.25611% City's Proportionate Share of the Net Pension Liability $ 18,526,366 $ 28,423,181 $ 26,243,693 City's Covered Payroll $ 5,761,916 $ 5,607,704 $ 5,137,216 City's Proportionate Share of the Net Pension Liability as a Percentage of its Covered Payroll 321.53% 506.86% 510.85% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 79.77% 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, 2022
Last Ten Fiscal Years
92 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, 2022
Last Ten Fiscal Years
93 Fiscal year 2021-22 2020-21 2019-20 2018-19
Actuarially Determined Contribution 1,575,633 $ 1,443,709 $ 1,275,186 $ 1,076,211 $ Contribution in Relation to the
Actuarially Determined Contribution (1,575,633) (1,443,709) (1,275,186) (1,076,211) Contribution Deficiency (Excess) - $ - $ - $ - $
Covered Payroll2 $ 5,536,109 $ 5,387,941 $ 5,243,738 $ 4,721,968 Contributions as a Percentage
of Covered Payroll 28.46% 26.80% 24.32% 22.79%
Fiscal year 2021-22 2020-21 2019-20 2018-19
Actuarially Determined Contribution $ 3,642,820 $ 3,231,920 $ 2,882,385 $ 2,509,250 Contribution in Relation to the
Actuarially Determined Contribution (3,642,820) (3,231,920) (2,882,385) (2,509,250) Contribution Deficiency (Excess) $ - $ - $ - $ -
Covered Payroll2 $ 5,920,369 $ 5,761,916 $ 5,607,704 $ 5,137,216 Contributions as a Percentage
of Covered Payroll 61.53% 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 2021, 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 2021-22.

Notes to Schedule:

City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pensions
For the Year Ended June 30, 2022
Last Ten Fiscal Years
94 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 2021, 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, 2022
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. 95 Measurement period June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 20171 Total OPEB liability
Service cost 269,955 $ 253,910 $ 262,452 $ 275,665 $ 267,961 $ Interest 771,486 751,631 736,104 786,251 752,721
Differences between expected and actual experience 122,199 (109,256) (109,256) - - Changes of assumption 113,616 (49,484) (49,484) (413,262) - Benefit payments (720,545) (516,782) (419,956) (406,031) (454,685) Implicit rate subsidy fulfilled - - (136,833) (123,043) (114,993) Net change in total OPEB liability 330,019 556,711 283,027 119,580 451,004 Total OPEB liability, beginning 11,623,641 11,953,660 11,340,614 11,221,034 10,770,030 Total OPEB liability, ending (a) $ 11,953,660 12,510,371 $ 11,623,641 $ 11,340,614 $ 11,221,034 $ OPEB fiduciary net position
Contributions:

Employer - City's contribution 963,042 $ 588,400 $ 710,200 $ 720,871 $ 567,185 $ Employer - Implicit subsidy - - 136,833 123,043 114,993 Net investment income 1,663,551 360,219 324,350 346,820 411,482 Other additions - - - 3,763 -
Benefit payments (720,545) (516,782) (419,956) (406,031) (454,685) Implicit rate subsidy fulfilled - - (136,833) (123,043) (114,993) Administrative expense (2,291) (2,768) (1,095) (2,323) (1,995) Other deductions - - - (5,765) -
Net change in plan fiduciary net position 429,069 1,903,757 613,499 657,335 521,987 Plan fiduciary net position, beginning 5,625,386 6,054,455 5,011,887 4,354,552 3,832,565 Plan fiduciary net position, ending (b) 6,054,455 7,958,212 5,625,386 5,011,887 4,354,552 Plan net OPEB liability - ending (a) - (b) $ 5,899,205 4,552,159 $ 5,998,255 $ 6,328,727 $ 6,866,482 $ Plan's fiduciary net position as a percentage
of the total OPEB liability 63.61% 50.65% 48.40% 44.19% 38.81% Covered payroll $ 10,666,519 10,959,848 $ 9,923,172 $ 9,518,945 $ 8,807,230 $ Net OPEB liability as a percentage of covered payroll 41.53% 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, 2022
Last Ten Fiscal Years
Other Postemployment Benefits ("OPEB")
96 Fiscal year end 2021-22 2020-21 2019-20 2018-19 2017-18 2016-171 Actuarially determined contribution2 $ 794,339 679,537 $ 763,351 $ $ 755,936 $ 833,241 $ 812,317 Contribution in relation to the actuarially
determined contribution2 (990,171) (963,041) (867,112) (847,033) (843,914) (682,178) Contribution deficiency/(excess) $ (310,634) $ (168,702) $ (103,761) $ (91,097) $ (10,673) $ 130,139 Covered-employee payroll3 $ 10,959,848 11,261,244 $ 10,666,519 $ 9,923,172 $ 9,518,945$ 8,807,230$ Contributions as a percentage of
covered-employee payroll 8.79% 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: Based on assumptions for Public Agency Miscellaneous and Police members published in the December 2017 CalPERS Experience Study
June 30, 2021
Other Postemployment Benefits ("OPEB")
City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits For the Year Ended June 30, 2022
Last Ten Fiscal Years
1 Historical information is presented only for measurement periods for which GASB 75 is implemented. 2 The June 30, 2021 actuarial valuation provided the actuarially determined contributions for fiscal year ended June 30, 2022.

Methods and assumptions used to determine contribution rates:
3 Includes one year’s payroll growth using 2.75 percent payroll assumption from fiscal year 2021-22.

Entry age normal, level percent of pay

2.50% per year

2.80% year one and thereafter

5.75% (non-Medicare) / 5.40% (Medicare), trending down to 4.04% by 2075

6.50%
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98 SUPPLEMENTARY INFORMATION
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100
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Expenditures:

Current:

Public works - $ - $ 4,355 $ (4,355) $
Capital outlay 750,000 4,761,438 1,076,085 3,685,353
Total expenditures 4,761,438 750,000 1,080,440 3,680,998 Other Financing Sources:

Transfers in 750,000 4,398,000 1,316,362 (3,081,638)
Net change in fund balance $ (363,438) - $ 235,922 599,360 $ Fund Balance (Deficit):

Beginning of year (235,922)
End of year $ -
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, 2022
101
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102
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 account for resources that are restricted for the payments of long-term debt.

Pacific Gateway Special Revenue Fund : To account for special assessments 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.

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 from 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 including 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 Alcohol 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 assessments that are restricted for costs related to the maintenance of parks, parkways and open space within the Community Facility District 2002-02 (Landscape Maintenance). 103
Supplemental
Street Law Detention Police Asset
Lighting Enforcement Center Forfeiture
ASSETS
Cash and investments - $ 114,217 $ 28,341 $ 5,059 $
Receivables:

Accounts - - - -
Taxes 1,153 - - -
Interest - - - -
Due from other governments 16,353 - - 245,383
Prepaid items - 10,300 - -
Restricted assets:

Cash and investments with fiscal agents - - - -
Total Assets $ 124,517 17,506 $ 28,341 $ 250,442 $

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 16,353 $ 10,465 $ - $ - $ Accrued wages and benefits payable - 5,445 - -
Due to other funds 1,153 - - 247,304
Total Liabilities 15,910 17,506 - 247,304
Deferred Inflows of Resources:

Unavailable revenues 16,353 - - 245,383
Total deferred inflows of resources - 16,353 - 245,383
Fund Balances:

Restricted - 108,607 28,341 -
Unassigned (deficit) (16,353) - - (242,245)
Total Fund Balances 108,607 (16,353) 28,341 (242,245)
Total Liabilities and Fund Balances $ 124,517 17,506 $ $ 28,341 $ 250,442 Special Revenue
City of Seal Beach
Combining Balance Sheet
June 30, 2022
Nonmajor Governmental Funds
104
Air Quality Park Traffic State
Improvement Improvement Impact Gasoline Tax
ASSETS
Cash and investments $ 71,369 $ 53,214 $ 192,347 $ 1,224,083 Receivables:

Accounts - - - -
Taxes - - - 47,533
Interest - - - -
Due from other governments - - - -
Prepaid items - - - -
Restricted assets:

Cash and investments with fiscal agents - - - -
Total Assets $ 71,369 $ 53,214 $ 192,347 $ 1,271,616

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities $ 23,857 $ - $ - $ - Accrued wages and benefits payable - - - -
Due to other funds - - - -
Total Liabilities 23,857 - - -
Deferred Inflows of Resources:

Unavailable revenues - - - -
Total deferred inflows of resources - - - -
Fund Balances:

Restricted 47,512 53,214 192,347 1,271,616
Unassigned (deficit) - - - -
Total Fund Balances 47,512 53,214 192,347 1,271,616
Total Liabilities and Fund Balances $ 71,369 $ 53,214 $ 192,347 $ 1,271,616 (Continued)
Special Revenue
City of Seal Beach
Combining Balance Sheet (Continued)
June 30, 2022
Nonmajor Governmental Funds
105
Community
Development Police Landscape
Measure M2 Block Grant Grants District
ASSETS
Cash and investments 1,104,171 $ 19,028 $ - $ 673,936 $ Receivables:

Accounts 192,783 49,772 117,333 -
Taxes - - - -
Interest - - - -
Due from other governments - - 10,457 -
Prepaid items - - - -
Restricted assets:

Cash and investments with fiscal agents - - - -
Total Assets $ 68,800 1,296,954 $ 127,790 $ 673,936 $

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 1,233 $ 6,092 $ 85 9,531 $ Accrued wages and benefits payable - - - 2,787
Due to other funds - - 127,705 -
Total Liabilities 1,233 6,092 127,790 12,318
Deferred Inflows of Resources:

Unavailable revenues - - 10,457 -
Total deferred inflows of resources - - 10,457 -
Fund Balances:

Restricted 1,295,721 62,708 - 661,618
Unassigned (deficit) - - (10,457) -
Total Fund Balances 1,295,721 62,708 (10,457) 661,618
Total Liabilities and Fund Balances $ 1,296,954 $ 68,800 $ 127,790 $ 673,936 (Continued)
City of Seal Beach
Special Revenue
Nonmajor Governmental Funds
Combining Balance Sheet (Continued)
June 30, 2022
106
Pacific Seal Beach
Heron Pointe Gateway Cable SB 1
ASSETS
Cash and investments 62,594 $ 128,431 $ 485,649 $ 960,523 $ Receivables:

Accounts - - 27,954 -
Taxes - - - 45,646
Interest - - 261 -
Due from other governments - - - -
Prepaid items - - - -
Restricted assets:

Cash and investments with fiscal agents - - - -
Total Assets $ 128,431 62,594 $ 513,864 $ 1,006,169 $

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities - $ 3,755 $ - $ 390 $ Accrued wages and benefits payable - 2,787 - -
Due to other funds - - - -
Total Liabilities 6,542 - - 390
Deferred Inflows of Resources:

Unavailable revenues - - - -
Total deferred inflows of resources - - - -
Fund Balances:

Restricted 62,594 121,889 513,864 1,005,779
Unassigned (deficit) - - - -
Total Fund Balances 121,889 62,594 513,864 1,005,779
of Resources and Fund Balances $ 128,431 62,594 $ 513,864 $ 1,006,169 $ (Continued)
City of Seal Beach
Combining Balance Sheet (Continued)
June 30, 2022
Nonmajor Governmental Funds
Special Revenue
107
Special Revenue Debt Service
Total Other
Citywide City Debt Governmental
Grants Service Funds
ASSETS
Cash and investments - $ 3,936 $ 5,126,898 $
Receivables:

Accounts 309,292 - 697,134
Taxes - - 94,332
Interest - - 261
Due from other governments 106,608 - 378,801
Prepaid items 111,673 - 121,973
Restricted assets:

Cash and investments with fiscal agents - 626,539 626,539 Total Assets $ 742,148 415,900 $ 7,045,938 $

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable and accrued liabilities 17,144 $ - $ 88,905 $ Accrued wages and benefits payable - - 11,019
Due to other funds 398,756 - 774,918
Total Liabilities - 415,900 874,842
Deferred Inflows of Resources:

Unavailable revenues 284,972 - 557,165
Total deferred inflows of resources - 284,972 557,165
Fund Balances:

Restricted 742,148 - 6,167,958
Unassigned (deficit) (284,972) - (554,027)
Total Fund Balances 742,148 (284,972) 5,613,931
Total Liabilities and Fund Balances $ 742,148 415,900 $ 7,045,938 $ (Concluded)
City of Seal Beach
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2022
108
Supplemental
Street Law Detention Police Asset
Lighting Enforcement Center Forfeiture
Revenues:

Taxes 140,712 $ - $ - $ - $
Intergovernmental - 161,285 - 2,166
Charges for services - - - -
Use of money and property - 1,961 - 39
Contributions - - - -
Miscellaneous - - - -
Total revenues 163,246 140,712 - 2,205
Expenditures:

Current:

General government - - - -
Public safety - 213,122 57 125,539
Community development - - - -
Public works 205,663 - - -
Capital outlay - - - -
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 213,122 205,663 57 125,539
Revenues over (under) expenditures (49,876) (64,951) (57) (123,334) Other Financing Sources (Uses):

Transfers in 48,598 - - -
Transfers out - - - -
Total other financing sources (uses) 48,598 - - -
Net change in fund balances (16,353) (49,876) (57) (123,334) Fund Balance (Deficit):

Beginning of year - 158,483 28,398 (118,911)
End of year $ 108,607 (16,353) $ 28,341 $ (242,245) $
(Continued)
Special Revenue
For the Year Ended June 30, 2022
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances City of Seal Beach
Nonmajor Governmental Funds
109
Air Quality Park Traffic State
Improvement Improvement Impact Gasoline Tax
Revenues:

Taxes $ - $ - $ - $ 522,176
Intergovernmental 31,289 13 - -
Charges for services - - - -
Use of money and property 604 642 2,323 13,064
Contributions - - - -
Miscellaneous - - - -
Total revenues 31,893 655 2,323 535,240
Expenditures:

Current:

General government - - - -
Public safety - - - -
Community development - - - -
Public works 24,495 - - 2,700
Capital outlay - - - 70,041
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 24,495 - - 72,741
Revenues over (under) expenditures 7,398 655 2,323 462,499 Other Financing Sources (Uses):

Transfers in - - - -
Transfers out - - - (30,000)
Total other financing sources (uses) - - - (30,000)
Net change in fund balances 7,398 655 2,323 432,499
Fund Balance (Deficit):

Beginning of year 40,114 52,559 190,024 839,117
End of year $ 53,214 47,512 $ 192,347 $ 1,271,616 $
(Continued)
Special Revenue
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) For the Year Ended June 30, 2022
Nonmajor Governmental Funds
110
Community
Development Police Landscape
Measure M2 Block Grant Grants District
Revenues:

Taxes 618,703 $ - $ - $ 166,076 $
Intergovernmental - 249,151 266,847 -
Charges for services - - - -
Use of money and property 12,629 - - 7,751
Contributions - - - -
Miscellaneous - - - -
Total revenues 249,151 631,332 266,847 173,827
Expenditures:

Current:

General government - - - -
Public safety - - 258,267 -
Community development - 248,561 - 129,317
Public works 200 - - -
Capital outlay 336,024 - - -
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 248,561 336,224 258,267 129,317
Revenues over (under) expenditures 590 295,108 8,580 44,510 Other Financing Sources (Uses):

Transfers in - - - -
Transfers out - - - (31,400)
Total other financing sources (uses) - - - (31,400)
Net change in fund balances 295,108 590 8,580 13,110
Fund Balance (Deficit):

Beginning of year 1,000,613 62,118 (19,037) 648,508
End of year $ 62,708 1,295,721 $ (10,457) $ 661,618 $
(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, 2022
111
Pacific Seal Beach
Heron Pointe Gateway Cable SB1
Revenues:

Taxes - $ 125,313 $ - $ 493,590 $
Intergovernmental - - - -
Charges for services - - 137,129 -
Use of money and property - - 4,715 9,013
Contributions 15,000 25,000 - -
Miscellaneous - - 1,800 -
Total Revenues 150,313 15,000 143,644 502,603
Expenditures:

Current:

General government - - 94,943 -
Public safety - - - -
Community development 7,743 102,325 - -
Public works - - - -
Capital outlay - - - 16,141
Debt service:

Principal - - - -
Interest and fiscal charges - - - -
Total Expenditures 102,325 7,743 94,943 16,141
Revenues over (under) expenditures 47,988 7,257 48,701 486,462 Other Financing Sources (Uses):

Transfers in - - - -
Transfers out (1,600) (26,000) (17,600) -
Total other financing sources (uses) (1,600) (26,000) (17,600) - Net Change in Fund Balances 5,657 21,988 31,101 486,462 Fund Balance (Deficit):

Beginning of year 56,937 99,901 482,763 519,317
End of year $ 121,889 62,594 $ 513,864 $ 1,005,779 $
(Continued)
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) For the Year Ended June 30, 2022
Special Revenue
Nonmajor Governmental Funds
112
Special Revenue Debt Service
Total Other
Citywide City Debt Governmental
Grants Service Funds
Revenues:

Taxes $ - - $ 2,066,570 $
Intergovernmental 175,797 - 886,548
Charges for services - - 137,129
Use of money and property - 190 52,931
Contributions - - 40,000
Miscellaneous - - 1,800
Total revenues 190 175,797 3,184,978
Expenditures:

Current:

General government - - 94,943
Public safety - - 596,985
Community development 3,426 - 491,372
Public works - - 233,058
Capital outlay 360,066 - 782,272
Debt service:

Principal 420,000 - 420,000
Interest and fiscal charges - 40,007 40,007
Total expenditures 460,007 363,492 2,658,637
Revenues over (under) expenditures (459,817) (187,695) 526,341 Other Financing Sources (Uses):

Transfers in 459,817 - 508,415
Transfers out (213,895) - (320,495)
Total other financing sources (uses) 459,817 (213,895) 187,920 Net change in fund balances - (401,590) 714,261
Fund Balance (Deficit):

Beginning of year 116,618 742,148 4,899,670
End of year $ 742,148 (284,972) $ 5,613,931 $
(Concluded)
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2022
113
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 140,600 $ 140,600 $ 140,712 $ 112 $
Total revenues 140,600 140,600 140,712 112
Expenditures:

Current:

Public works 220,000 220,000 205,663 14,337
Total expenditures 220,000 220,000 205,663 14,337
Revenues over (under) expenditures (79,400) (79,400) (64,951) 14,449 Other Financing Sources:

Transfers in 79,400 79,400 48,598 (30,802)
Net change in fund balance $ - - $ (16,353) (16,353) $
Fund Balance (Deficit):

Beginning of year -
End of year $ (16,353)
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2022
Budgeted Amounts
Street Lighting Special Revenue Fund
114
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 155,000 $ 155,000 $ 161,285 $ 6,285 $ Use of money and property 2,500 2,500 1,961 (539)
Total revenues 157,500 157,500 163,246 5,746
Expenditures:

Current:

Public safety 135,800 224,800 213,122 11,678
Total expenditures 224,800 135,800 213,122 11,678
Net change in fund balance $ (67,300) 21,700 $ (49,876) 17,424 $ Fund Balance:

Beginning of year 158,483
End of year $ 108,607
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, 2022
115
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 200,000 $ 200,000 $ 2,166 $ (197,834) $ Use of money and property 200 200 39 (161)
Total revenues 200,200 200,200 2,205 (197,995)
Expenditures:

Current:

Public safety 243,400 243,400 125,539 117,861
Total expenditures 243,400 243,400 125,539 117,861
Net change in fund balance $ (43,200) (43,200) $ (123,334) (80,134) $ Fund Balance (Deficit):

Beginning of year (118,911)
End of year $ (242,245)
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, 2022
116
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 30,000 $ 30,000 $ 31,289 $ 1,289 $
Use of money and property 100 100 604 504
Total revenues 30,100 30,100 31,893 1,793
Expenditures:

Current:

Public works 31,000 31,000 24,495 6,505
Total expenditures 31,000 31,000 24,495 6,505
Net change in fund balance $ (900) (900) $ 7,398 8,298 $ Fund Balance:

Beginning of year 40,114
End of year $ 47,512
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, 2022
117
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental - $ - $ 13 $ 13 $
Use of money and property 500 500 642 142
Total revenues 500 500 655 155
Net change in fund balance $ 500 500 $ 655 155 $
Fund Balance:

Beginning of year 52,559
End of year $ 53,214
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Park Improvement Special Revenue Fund
For the Year Ended June 30, 2022
118
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Use of money and property 2,000 $ 2,000 $ 2,323 $ 323 $ Total revenues 2,000 2,000 2,323 323
Net change in fund balance $ 2,000 2,000 $ 2,323 323 $
Fund Balance:

Beginning of year 190,024
End of year $ 192,347
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Traffic Impact Special Revenue Fund
For the Year Ended June 30, 2022
119
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 647,200 $ 647,200 $ 522,176 $ (125,024) $
Use of money and property 9,600 9,600 13,064 3,464
Total revenues 656,800 656,800 535,240 (121,560)
Expenditures:

Current:

Public works 23,000 23,000 2,700 20,300
Capital outlay 100,000 152,759 70,041 82,718
Total expenditures 175,759 123,000 72,741 103,018
Revenues over (under) expenditures 481,041 533,800 462,499 (18,542) Other Financing Uses:

Transfers out (30,000) (30,000) (30,000) -
Net change in fund balance $ 451,041 503,800 $ 432,499 (18,542) $ Fund Balance:

Beginning of year 839,117
End of year $ 1,271,616
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, 2022
120
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 411,900 $ 411,900 $ 618,703 $ 206,803 $
Use of money and property 10,000 10,000 12,629 2,629
Total revenues 421,900 421,900 631,332 209,432
Expenditures:

Current:

Public works - - 200 (200)
Capital outlay 900,000 900,000 336,024 563,976
Total expenditures 900,000 900,000 336,224 563,776
Net change in fund balance $ (478,100) (478,100) $ 295,108 773,208 $ Fund Balance:

Beginning of year 1,000,613
End of year $ 1,295,721
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, 2022
121
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 180,000 $ 229,151 $ 249,151 $ 20,000 $ Total revenues 229,151 180,000 249,151 20,000
Expenditures:

Current:

Community development 180,000 229,151 248,561 (19,410)
Total expenditures 229,151 180,000 248,561 (19,410)
Net change in fund balance $ - - $ 590 590 $
Fund Balance:

Beginning of year 62,118
End of year $ 62,708
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, 2022
122
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental 109,600 $ 109,600 $ 266,847 $ 157,247 $ Total revenues 109,600 109,600 266,847 157,247
Expenditures:

Current:

Public safety 109,600 314,600 258,267 56,333
Total expenditures 314,600 109,600 258,267 56,333
Net change in fund balance $ (205,000) - $ 8,580 213,580 $ Fund Balance (Deficit):

Beginning of year (19,037)
End of year $ (10,457)
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, 2022
123
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 188,700 $ 188,700 $ 166,076 $ (22,624) $
Use of money and property 7,000 7,000 7,751 751
Total revenues 195,700 195,700 173,827 (21,873)
Expenditures:

Current:

Community development 136,000 136,000 129,317 6,683
Total expenditures 136,000 136,000 129,317 6,683
Revenues over expenditures 59,700 59,700 44,510 (15,190) Other Financing Uses:

Transfers out (31,400) (31,400) (31,400) -
Net change in fund balance $ 28,300 28,300 $ 13,110 (15,190) $ Fund Balance:

Beginning of year 648,508
End of year $ 661,618
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, 2022
124
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenue:

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

Current:

Community development 8,100 8,100 7,743 357
Total expenditures 8,100 8,100 7,743 357
Revenues over (under) expenditures 6,900 6,900 7,257 357 Other Financing Uses:

Transfers out (1,600) (1,600) (1,600) -
Net change in fund balance $ 5,300 5,300 $ 5,657 357 $
Fund Balance:

Beginning of year 56,937
End of year $ 62,594
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, 2022
125
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 66,300 $ 66,300 $ 125,313 $ 59,013 $
Contributions 25,000 25,000 25,000 -
Total revenues 91,300 91,300 150,313 59,013
Expenditures:

Current:

Community development 124,000 124,000 102,325 21,675
Total expenditures 124,000 124,000 102,325 21,675
Revenues over (under) expenditures (32,700) (32,700) 47,988 80,688 Other Financing Uses:

Transfers out (26,000) (26,000) (26,000) -
Net change in fund balance $ (58,700) (58,700) $ 21,988 80,688 $ Fund Balance:

Beginning of year 99,901
End of year $ 121,889
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, 2022
126
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Charges for services - $ 100,000 $ 137,129 $ 37,129 $
Use of money and property 4,000 4,000 4,715 715
Miscellaneous - - 1,800 1,800
Total revenues 104,000 4,000 143,644 39,644
Expenditures:

Current:

General government 84,900 84,900 94,943 (10,043)
Total expenditures 84,900 84,900 94,943 (10,043)
Revenues over (under) expenditures 19,100 (80,900) 48,701 29,601 Other Financing Uses:

Transfer out (17,600) (17,600) (17,600) -
Net change in fund balance $ 1,500 (98,500) $ 31,101 29,601 $ Fund Balance:

Beginning of year 482,763
End of year $ 513,864
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, 2022
127
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Taxes 490,000 $ 490,000 $ 493,590 $ 3,590 $
Use of money and property 7,000 7,000 9,013 2,013
Total revenues 497,000 497,000 502,603 5,603
Expenditures:

Capital outlay 400,000 438,535 16,141 422,394 $
Total expenditures 438,535 400,000 16,141 422,394
Net change in fund balance $ 58,465 97,000 $ 486,462 427,997 $ Fund Balance:

Beginning of year 519,317
End of year $ 1,005,779
Budgeted Amounts
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual SB1 Special Revenue Fund
For the Year Ended June 30, 2022
128
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Intergovernmental - $ 212,000 $ 175,797 $ (36,203) $
Total revenues 212,000 - 175,797 (36,203)
Expenditures:

Current:

Public safety 205,000 - - -
Community development - 132,213 3,426 128,787
Capital outlay - 505,911 360,066 145,845
Total expenditures 638,124 - 363,492 274,632
Revenues over (under) expenditures (426,124) - (187,695) 238,429 Other Financing Uses:

Transfers out - (598,000) (213,895) 384,105
Net change in fund balance $ (1,024,124) - $ (401,590) 622,534 $ Fund Balance (Deficit):

Beginning of year 116,618
End of year $ (284,972)
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, 2022
129
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:

Use of money and property 100 $ 100 $ 190 $ 90 $
Total revenues 100 100 190 90
Expenditures:

Debt service:

Principal retirement 420,000 420,000 420,000 -
Interest and fiscal charges 40,000 40,000 40,007 (7)
Total Expenditures 460,000 460,000 460,007 (7)
Revenues over (under) expenditures (459,900) (459,900) (459,817) 83 Other Financing Sources:

Transfers in 459,900 459,900 459,817 (83)
Total other financing sources 459,900 459,900 459,817 (83) Net change in fund balance $ - - $ - - $
Fund Balance:

Beginning of year 742,148
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, 2022
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 $ 279,130 $ 304,970 $ 584,100
Accounts receivable 26,750 - 26,750
Total current assets 305,880 304,970 610,850
Noncurrent Assets:

Capital assets, net of accumulated depreciation 1,002,161 - 1,002,161 Total capital assets 1,002,161 - 1,002,161
Total noncurrent assets 1,002,161 - 1,002,161
Total assets 1,308,041 304,970 1,613,011

LIABILITIES
Current Liabilities:

Accounts payable 39,953 7,475 47,428
Long-term debt, due within one year 36,205 - 36,205
Total current liabilities 76,158 7,475 83,633
Noncurrent Liabilities:

Long-term debt, due in more than one year 128,245 - 128,245 Total Noncurrent Liabilities 128,245 - 128,245
Total Liabilities 204,403 7,475 211,878

NET POSITION
Net investment in capital assets 837,711 - 837,711
Unrestricted 265,927 297,495 563,422
Total Net Position $ 1,103,638 $ 297,495 $ 1,401,133
City of Seal Beach
Combining Statement of Net Position
Internal Service Funds
June 30, 2022
133
Vehicle Information
Replacement Technology
Fund Fund Total
OPERATING REVENUES:

Miscellaneous $ 26,750 $ - $ 26,750
OPERATING EXPENSES:

Operating expenses 15,421 140,928 156,349
Amortization and depreciation expenses 228,137 - 228,137 Total operating expenses 243,558 140,928 384,486
OPERATING (LOSS) (216,808) (140,928) (357,736)
NONOPERATING INCOME:

Gain on sale of assets 300 - 300
Total nonoperating income 300 - 300
CHANGES IN NET POSITION (216,508) (140,928) (357,436)
NET POSITION:

Beginning of year 1,320,146 438,423 1,758,569
End of year $ 1,103,638 $ 297,495 $ 1,401,133
City of Seal Beach
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2022
134
Vehicle Information
Replacement Technology
Fund Fund Total

CASH FLOWS FROM OPERATING
ACTIVITIES:

Cash received from customers and users $ 7,475 $ - $ 7,475 Cash paid to suppliers for goods and services (16,715) (143,450) (160,165) Net cash (used in) operating activities (9,240) (143,450) (152,690)

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (136,145) - (136,145)
Proceed on disposal of assets 300 - 300
Principal paid on long-term debt (20,760) (20,760)
Net cash (used in) capital and related financing activities (156,605) - (156,605) Net change in cash and cash equivalents (165,845) (143,450) (309,295) CASH AND CASH EQUIVALENTS:

Beginning of year 444,975 448,420 893,395
End of year $ 304,970 279,130 $ 584,100 $
Reconciliation of Operating Income (Loss) to
Net Cash Provided by (Used in) Operating Activities:

Operating (loss) (216,808) $ (140,928) $ (357,736)
Adjustments to reconcile operating income
(loss) to net cash provided by (used in)
operating activities:

Amortization and depreciation expenses 228,137 - 228,137 Changes in assets and liabilities:
(Increase)/decrease in accounts receivables (19,275) - (19,275) Increase/(decrease) in accounts payable (1,294) (2,522) (3,816) Net cash (used in) operating activities $ (9,240) $ (143,450) $ (152,690) NONCASH ITEM:

Acquisition of capital assets through lease agreements $ 185,210 $ - $ 185,210 City of Seal Beach
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2022
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 $ 555,027 $ 125,550 $ 219,868 $ 900,445 Restricted investments with fiscal agents - 254,573 694,177 948,750 Total Assets 555,027 380,123 914,045 1,849,195
LIABILITIES:

Accounts payable 71,157 - - 71,157
Interest payable - 32,496 74,326 106,822
Total Liabilities 71,157 32,496 74,326 177,979
NET POSITION:

Restricted for:

Individual, organization and other government $ 483,870 $ 347,627 $ 839,719 $ 1,671,216 City of Seal Beach
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2022
139
Community Community
Facilities Facilities
District District - Heron
Deposits Heron Pointe Pacific Gateway Total
ADDITIONS:

Assessment revenue collected - $ 254,809 $ 541,782 $ 796,591 $ Deposits received 483,870 - - 483,870
Investment income - 1,596 2,789 4,385
Total additions 483,870 256,405 544,571 1,284,846
DEDUCTIONS:

Payment of special assessment district debt service - 264,538 532,966 797,504 Change in net position 483,870 (8,133) 11,605 487,342
NET POSITION:

Beginning of year - 355,760 828,114 1,183,874
End of year $ 483,870 $ 347,627 $ 839,719 $ 1,671,216
Custodial Funds
For the Year Ended June 30, 2022
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 its 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, 2022
This part of the City of Seal Beach annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health.

Financial Trends
Revenue Capacity
Debt Capacity
143
City of Seal Beach
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2013 2014 2015 2016 2017
Governmental activities:

Net investment in capital assets $ 73,693,829 $ 72,498,068 $ 74,296,935 $ 73,939,948 $ 72,399,752 Restricted 3,271,671 4,426,990 3,842,792 3,866,679 4,587,081 Unrestricted 23,570,750 25,953,129 4,097,282 4,713,193 (3,660,561) Total governmental activities net position $ 100,536,250 $ 102,878,187 $ 82,237,009 $ 82,519,820 $ 73,326,272 Business-type activities:

Net investment in capital assets, $ 32,645,747 $ 32,360,440 $ 34,451,074 $ 34,145,069 $ 33,109,258 Restricted - - - -
Unrestricted 12,593,950 15,532,304 12,470,553 13,544,158 12,625,701 Total business-type activities net position $ 45,239,697 $ 47,892,744 $ 46,921,627 $ 47,689,227 $ 45,734,959 Primary government:

Net investment in capital assets, $ 106,339,576 $ 104,858,508 $ 108,748,009 $ 108,085,017 $ 105,509,010 Restricted 3,271,671 4,426,990 3,842,792 3,866,679 4,587,081 Unrestricted 36,164,700 41,485,433 16,567,835 18,257,351 8,965,140 Total primary government net position $ 145,775,947 $ 150,770,931 $ 129,158,636 $ 130,209,047 $ 119,061,231 Source: Finance Department, City of Seal Beach.

Fiscal Year
144
City of Seal Beach
Net Position by Component (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
2018 2019 2020 2021 2022
Governmental activities:

Net investment in capital assets, $ 72,667,466 $ 87,071,592 $ 84,530,565 $ 85,059,375 $ 84,447,535 Restricted 4,207,675 4,825,412 7,601,451 7,201,479 8,759,394 Unrestricted (4,911,027) (9,873,029) (11,716,752) (9,239,218) (10,011,404) Total governmental activities net position $ 71,964,114 $ 82,023,975 $ 80,415,264 $ 83,021,636 $ 83,195,525 Business-type activities:

Net investment in capital assets, $ 31,663,486 $ 32,937,448 $ 31,473,936 $ 30,784,313 $ 30,111,234 Restricted 25,082 25,082 25,082 25,082 25,082
Unrestricted 14,709,960 13,656,457 13,930,796 14,359,332 14,386,432 Total business-type activities net position $ 46,398,528 $ 46,618,987 $ 45,429,814 $ 45,168,727 $ 44,522,748 Primary government:

Net investment in capital assets, $ 104,330,952 $ 120,009,040 $ 116,004,501 $ 115,843,688 $ 114,558,769 Restricted 4,232,757 4,850,494 7,626,533 7,226,561 8,784,476 Unrestricted 9,798,933 3,783,428 2,214,044 5,120,114 4,375,028 Total primary government net position $ 118,362,642 $ 128,642,962 $ 125,845,078 $ 128,190,363 $ 127,718,273 Source: Finance Department, City of Seal Beach.

Fiscal Year
145
City of Seal Beach
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2013 2014 2015 2016 2017
Expenses:

Governmental activities:

General government 5,373,180 $ 5,040,070 $ 6,551,584 $ 6,264,368 $ 5,894,947 $ Public safety 15,005,590 15,999,900 16,022,465 16,972,880 19,867,060 Community development 1,781,188 1,306,898 1,393,712 1,100,110 1,218,902 Community services 1,272,680 1,079,006 1,129,300 1,036,627 995,468 Public works 6,212,516 6,902,521 7,862,892 6,956,443 6,992,604 Interest on long-term debt 574,763 487,221 444,132 349,652 342,951 Total governmental activities expenses 30,219,917 30,815,616 33,404,085 32,680,080 35,311,932 Business-type activities:

Water utility 4,267,840 4,439,797 4,037,798 4,102,228 4,977,160 Sewer utility 1,520,478 1,730,940 1,661,225 1,676,651 2,639,043 Total business-type activities expenses 5,788,318 6,170,737 5,699,023 5,778,879 7,616,203 Total primary government expenses 36,008,235 36,986,353 39,103,108 38,458,959 42,928,135 Program revenues:

Governmental activities:

Charges for services:

General government 450,911 1,632,975 1,820,019 2,074,448 1,913,909 Public safety 1,565,527 1,384,701 2,132,176 1,521,220 2,045,589 Community development 111,008 182,021 186,858 192,878 217,486 Community services 981,440 1,062,796 1,020,316 1,015,517 707,813 Public works 1,980,116 1,962,242 1,937,305 1,832,289 2,105,747 Operating contributions and grants 5,837,093 2,402,490 2,768,435 2,122,139 1,721,167 Capital grants and contributions - 10,000 20,000 10,000 174,685 Total governmental activities
program revenues 10,926,095 8,637,225 9,885,109 8,768,491 8,886,396 Business-type activities:

Charges for services:

Water utility 4,924,109 5,092,152 4,556,001 4,261,566 4,782,468 Sewer utility 2,675,201 2,775,332 2,765,357 2,466,869 2,784,942 Total business-type activities
program revenues 7,599,310 7,867,484 7,321,358 6,728,435 7,567,410 Total primary government
program revenues 18,525,405 16,504,709 17,206,467 15,496,926 16,453,806 Net revenues (expenses):

Governmental activities (19,293,822) (22,178,391) (23,518,976) (23,911,589) (26,425,536) Business-type activities 1,810,992 1,696,747 1,622,335 949,556 (48,793) Total net revenues (expenses) $ (17,482,830) $ (20,481,644) $ (21,896,641) $ (22,962,033) $ (26,474,329) Source: Finance Department, City of Seal Beach.

Fiscal Year
146
City of Seal Beach
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
2018 2019 2020 2021 2022
Expenses:

Governmental activities:

General government 6,161,230 $ 6,479,347 $ 6,868,616 $ 7,231,812 $ 8,604,149 $ Public safety 19,877,068 21,497,362 24,079,442 23,326,808 26,912,192 Community development 1,593,008 1,499,652 1,581,361 2,283,377 3,043,960 Community services 964,634 945,425 866,786 1,139,731 1,991,897 Public works 7,367,882 7,752,351 11,180,509 8,290,658 9,086,138 Interest on long-term debt 225,675 143,040 88,274 57,902 61,160 Total governmental activities expenses 36,189,497 38,317,177 44,664,988 42,330,288 49,699,496 Business-type activities:

Water utility 4,668,618 4,909,193 5,444,834 6,033,692 6,064,434 Sewer utility 2,539,783 2,523,366 3,035,447 2,651,801 2,323,027 Total business-type activities expenses 7,208,401 7,432,559 8,480,281 8,685,493 8,387,461 Total primary government expenses 43,397,898 45,749,736 53,145,269 51,015,781 58,086,957 Program revenues:

Governmental activities:

Charges for services:

General government 2,062,987 1,913,201 1,207,956 1,486,575 1,129,039 Public safety 1,903,530 1,907,577 2,124,798 2,361,646 2,547,127 Community development 300,640 597,318 231,087 221,140 434,955 Community services 733,456 840,428 700,877 985,542 1,244,430 Public works 2,398,039 2,556,857 2,732,164 2,596,848 2,842,031 Operating contributions and grants 2,334,480 2,588,454 3,442,883 4,287,922 9,362,550 Capital grants and contributions 79,175 9,777,900 30,707 10,692 655 Total governmental activities
program revenues 9,812,307 20,181,735 10,470,472 11,950,365 17,560,787 Business-type activities:

Charges for services:

Water utility 5,097,807 4,851,274 4,268,610 4,957,483 5,824,338 Sewer utility 2,928,885 2,854,208 3,007,958 2,885,699 2,432,441 Total business-type activities
program revenues 8,026,692 7,705,482 7,276,568 7,843,182 8,256,779 Total primary government
program revenues 17,838,999 27,887,217 17,747,040 19,793,547 25,817,566 Net revenues (expenses):

Governmental activities (26,377,190) (18,135,442) (34,194,516) (30,379,923) (32,138,709) Business-type activities 818,291 272,923 (1,203,713) (842,311) (130,682) Total net revenues (expenses) $ (25,558,899) $ (17,862,519) $ (35,398,229) $ (31,222,234) $ (32,269,391) Source: Finance Department, City of Seal Beach.

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

2013 2014 2015 2016 2017
General revenues and other changes in net position:

Governmental activities:

Taxes:

Property taxes 9,958,198 $ 9,498,277 $ 10,050,815 $ 10,408,505 $ 11,012,246 $ Sales tax 5,408,756 4,742,859 4,246,080 4,228,730 4,379,341 Franchise taxes 1,126,398 1,324,860 1,163,595 955,922 1,016,938 Utility users taxes 4,732,597 4,644,218 4,646,434 4,445,180 4,177,713 Transient occupancy taxes 1,289,007 1,509,095 1,525,723 1,655,376 1,693,515 Other taxes 328,743 555,804 344,789 197,166 190,510
Motor vehicle in lieu, unrestricted 13,333 11,035 10,659 9,960 11,235 Use of money and property 372,693 674,875 725,720 1,004,572 425,014 Other 331,175 544,406 356,749 536,175 214,219
Transfers - 378,500 378,500 378,500 378,500
Extraordinary Gain(loss) - - 694,585 - -
Total governmental activities 23,560,900 23,883,929 24,143,649 23,820,086 23,499,231 Business-type activities:

Use of money and property 84,371 133,995 109,575 176,437 167,661 Other 5,060 805 3,698 20,107 -
Transfers - (378,500) (378,500) (378,500) (378,500)
Extraordinary Gain(loss) - 1,200,000 - - -
Total business-type activities 89,431 956,300 (265,227) (181,956) (210,839) Total primary government 23,650,331 24,840,229 23,878,422 23,638,130 23,288,392 Changes in net position:

Governmental activities 4,267,078 1,705,538 624,673 (91,503) 23,499,231 Business-type activities 1,900,423 2,653,047 1,357,108 767,600 (210,839) Total primary government $ 6,167,501 $ 4,358,585 $ 1,981,781 $ 676,097 $ 23,288,392 Source: Finance Department, City of Seal Beach.

Fiscal Year
148
City of Seal Beach
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
2018 2019 2020 2021 2022
General revenues and other changes in net position:

Governmental activities:

Taxes:

Property taxes 11,180,197 $ 11,481,535 $ 12,358,059 $ 12,926,895 $ 13,428,911 $ Sales tax 4,303,618 5,546,264 9,108,334 10,146,964 11,443,583 Franchise taxes 1,059,581 1,097,774 1,034,280 1,067,098 1,101,243 Utility users taxes 4,186,554 4,061,031 3,941,877 4,129,727 4,508,593 Transient occupancy taxes 1,666,996 1,631,445 1,298,707 878,165 1,670,504 Other taxes 163,277 227,978 724,854 720,807 757,421
Motor vehicle in lieu, unrestricted 13,102 12,473 21,133 19,070 28,238 Use of money and property 300,817 1,692,720 1,862,213 151,196 (1,428,396) Other 1,762,390 2,065,583 1,463,177 3,270,753 69,001
Transfers 378,500 378,500 376,483 (324,379) 733,500
Extraordinary Gain(loss) - - - - -
Total governmental activities 25,015,032 28,195,303 32,189,117 32,986,296 32,312,598 Business-type activities:

Use of money and property 223,778 326,036 391,016 256,845 218,203 Other - - - - -
Transfers (378,500) (378,500) (376,483) 324,379 (733,500) Extraordinary Gain(loss) - - - - -
Total business-type activities (154,722) (52,464) 14,533 581,224 (515,297) Total primary government 24,860,310 28,142,839 32,203,650 33,567,520 31,797,301 Changes in net position:

Governmental activities 25,015,032 10,059,861 (2,005,399) 2,606,373 173,889 Business-type activities (154,722) 220,459 (1,189,180) (261,087) (645,979) Total primary government $ 24,860,310 $ 10,280,320 $ (3,194,579) $ 2,345,286 $ (472,090) Source: Finance Department, City of Seal Beach.

Fiscal Year
149
City of Seal Beach
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2013 2014 2015 2016 2017
General Fund:

Nonspendable $ 1,549,735 - $ $ 666,102 $ 682,859 $ 2,877 Restricted - - - - 12,277
Committed - - - - -
Assigned 8,301,699 8,227,258 7,623,994 7,610,286 7,478,281 Unassigned 21,149,350 22,314,838 21,711,517 20,811,037 19,770,202 Total general fund $ 29,451,049 $ 32,091,831 $ 30,001,613 $ 29,104,182 $ 27,263,637 All other governmental funds:

Nonspendable $ - $ - $ - $ - $ -
Restricted 3,271,671 4,426,990 3,842,792 3,866,679 4,131,203 Assigned 89,004 71,993 - - -
Unassigned (56,810) (368,629) (525,408) (51,254) (184,908) Total all Other government funds: $ 3,303,865 $ 4,130,354 $ 3,317,384 $ 3,815,425 $ 3,946,295 Source: Finance Department, City of Seal Beach
Fiscal Year
150
City of Seal Beach
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(modified accrual basis of accounting)
2018 2019 2020 2021 2022
General Fund:

Nonspendable $ 32,495 $ 33,795 $ 41,776 $ 2,069,748 $ 51,506 Restricted 5,266 5,419 2,190,469 2,046,356 2,034,271
Committed - 17,067,216 - 17,546,968 23,523,980
Assigned 8,289,150 10,152,504 4,370,059 4,704,595 4,853,380 Unassigned 17,491,623 11,922,370 3,509,871 3,629,265 3,885,769 Total general fund $ 25,818,534 $ 22,114,088 $ 27,179,391 $ 29,996,932 $ 34,348,906 All other governmental funds:

Nonspendable $ - $ - $ - $ - $ -
Restricted 4,110,558 4,819,993 5,410,982 5,037,618 6,167,958 Assigned - - - - -
Unassigned (34,159) (425,639) (671,694) (373,870) (554,027) Total all Other government funds: $ 4,076,399 $ 4,394,354 $ 4,739,288 $ 4,663,748 $ 5,613,931 Source: Finance Department, City of Seal Beach
Fiscal Year
151
City of Seal Beach
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2013 2014 2015 2016 2017
Revenues:

Taxes $ 23,831,431 $ 23,476,034 $ 23,114,876 $ 22,828,144 $ 23,368,371 Licenses and permits 1,247,750 1,369,275 1,377,131 1,304,924 1,234,590 Intergovernmental 3,002,321 869,294 1,725,127 1,388,056 744,904 Charges for services 4,117,034 3,895,371 3,961,691 4,214,690 5,349,083 Use of money and property 372,693 674,875 725,720 1,004,572 426,418 Fines and forfeitures 1,063,172 1,013,695 1,146,509 1,110,606 152,845 Contributions from other governments 10,209 341,698 330,885 283,222 180,511 Miscellaneous 301,771 579,125 375,588 537,777 492,245
Total revenues 33,946,381 32,219,367 32,757,527 32,671,991 31,948,967 Expenditures
Current:

General government 5,062,467 4,493,594 5,462,668 5,351,130 5,673,309 Public safety 14,460,833 15,439,757 15,811,773 16,378,416 17,395,965 Community development 1,420,065 1,298,071 1,362,308 1,175,339 1,186,081 Community services 1,182,716 1,048,427 1,129,497 1,075,282 1,004,690 Public works 4,156,616 4,871,887 5,631,015 4,862,058 4,586,373 Capital outlay 3,316,684 2,094,120 4,578,308 2,645,823 1,506,476 Debt service:

Principal retirement 1,734,446 1,265,135 1,337,573 1,490,150 2,162,379 Interest and fiscal charges 562,184 492,935 441,040 355,819 353,322 Total expenditures 31,896,011 31,003,926 35,754,182 33,334,017 33,868,595 Excess (deficiency) of revenue over
(under) expenditures 2,050,370 1,215,441 (2,996,655) (662,026) (1,919,628) Other financing sources (uses):

Transfers in 5,825,432 4,363,955 7,012,848 5,602,944 4,472,129 Transfers out (6,135,432) (4,295,455) (6,919,381) (5,340,308) (4,262,176) Proceeds on sale of assets - - - - -
Total other financing sources (uses) (310,000) 1,615,431 93,467 262,636 209,953 Net change in fund balances $ 1,740,370 $ 2,830,872 $ (2,903,188) $ (399,390) $ (1,709,675) Debt service as a percentage of
noncapital expenditures 8.0% 6.1% 5.7% 6.0% 7.8%
Source: Finance Department, City of Seal Beach
Fiscal Year
152
City of Seal Beach
Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years
(modified accrual basis of accounting)
2018 2019 2020 2021 2022
Revenues:

Taxes $ 24,021,668 $ 25,903,080 $ 27,481,580 $ 31,711,229 $ 34,976,825 Licenses and permits 1,480,971 1,416,737 844,274 771,615 926,792 Intergovernmental 1,530,815 857,923 4,330,159 2,195,977 6,754,322 Charges for services 4,586,949 4,878,405 4,684,076 4,853,170 5,118,769 Use of money and property 347,117 1,772,775 2,003,529 235,061 (1,197,815) Fines and forfeitures 1,089,515 946,048 1,239,154 1,816,837 1,871,227 Contributions from other governments 55,765 45,994 60,942 106,528 76,817 Miscellaneous 520,420 2,319,864 2,995,022 3,431,013 240,917 Total revenues 33,633,220 38,140,826 43,638,736 45,121,430 48,767,854 Expenditures
Current:

General government 5,757,859 6,169,490 6,083,705 6,713,025 7,597,539 Public safety 18,148,871 19,240,608 20,921,107 21,895,428 23,892,990 Community development 1,488,921 1,446,025 1,408,699 2,203,834 2,185,707 Community services 954,018 942,804 852,664 1,131,906 1,174,593 Public works 4,967,066 5,160,373 6,672,230 5,748,811 6,884,360 Capital outlay 2,567,080 7,378,774 1,729,166 3,439,241 1,875,596 Debt service:

Principal retirement 1,640,521 1,754,905 494,370 496,920 532,556 Interest and fiscal charges 231,779 152,863 88,612 70,479 55,856 35,756,115 42,245,842 38,250,553 41,699,644 44,199,197
Excess (deficiency) of revenue over
(under) expenditures (2,122,895) (4,105,016) 5,388,183 3,421,788 4,568,657 Other financing sources (uses):

Transfers in 5,714,614 9,381,712 4,141,526 2,858,654 2,697,577 Transfers out (4,906,717) (8,663,187) (4,119,472) (3,657,439) (1,964,077) Proceeds on sale of assets - - 119,000 - -
Total other financing sources (uses) 807,897 718,525 22,054 (679,785) 733,500 Net change in fund balances $ (1,314,998) $ (3,386,491) $ 5,410,237 $ 2,742,003 $ 5,302,157 Debt service as a percentage of
noncapital expenditures 5.6% 5.5% 1.6% 1.5% 1.4%
Fiscal Year
153
Fiscal Year Taxable Taxable Total
Ended Assessed Secured Assessed Direct Tax
June 30 Secured Unsecured Value (Note 1) Unsecured Value Rate 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% 2022 6,253,511,227 148,714,210 6,402,225,437 414,507,317 7,059,017 421,566,334 1.00% GENERAL 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 Note 1: Fiscal Year ending June 30, 2022 is the last year tax increment within the former Seal Beach RDA boundaries will be received. For Fiscal Year ended June 2023, per Resolution of the Orange Countywide Oversight Board No. 22-001 Successor Agency to the Seal Beach Redevelopment Agency was dissolved. Beginning with Fiscal Year ending June 30, 2023, the city will receive the property tax per AB 8 process.

City of Seal Beach
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
City Redevelopment Agency
154
City of Seal Beach
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
City Direct Rates:

City Direct Rate-Basic Levy 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 0.03783 0.04603 0.04719 0.06135 0.06001 0.06072 0.05881 0.05509 0.06379 0.05996 Metropolitan Water District 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 0.00350 Other Districts 0.07327 0.07969 0.07468 0.07779 0.07367 0.09803 0.16561 0.13116 0.14183 0.12906 Total Direct &
Overlapping Rates 1.12922 1.12537 1.11460 1.14264 1.13718 1.16225 1.22792 1.18975 1.20912 1.19252 GENERAL NOTES:

Source: HdL, County of Orange, Auditor-Controller
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 any voter-approved bonds. The City receives only a portion of this basic 1% levy.

Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners. 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 $ 1,121,233,126 17.52% $ 642,813,439 14.34% CPT Shops at Rossmoor LLC 134,368,539 2.10% 125,239,000 2.79% ASN Long Beach LLC 2.01% 61,660,834 128,339,886 1.38%
Boeing North American 1.98% 114,710,970 126,986,970 2.56% Terra Funding-Bixby Ranch LLC 97,023,973 1.52%
Ranch Town Center LLC 49,262,590 0.77% 42,319,450 0.94% Al United States Seal Beach Senior Housing 43,430,145 0.68% 47,007,336 1.05% Columbia Regency Retail Partners LLC 29,683,478 0.46%
Old Ranch Country Club LLC 26,809,598 0.42%
Rexford Industrial Realty LP 23,895,928 0.37%
OXY Long Beach Inc 3.99% 178,666,923
PCPI Bixby LP 1.48% 66,300,000
DCOR LLC 1.23% 55,114,425
Hellman Properties 0.72% 32,056,977
$ 27.83% 1,365,889,354 1,781,034,233 $ 30.48%
Source: HDL Coren & Cone
City of Seal Beach
Current Year and Nine Years Ago
Principal Property Taxpayers
2022 2013
156

Fiscal Taxes Levied Collections in
Year Ended for the Percent Subsequent Percent
June 30 Fiscal Year Amount of Levy Years Amount of Levy 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% 75,788 11,292,740 98.93% 2019 12,131,891 11,590,056 95.53% 60,234 11,650,289 96.03% 2020 12,962,715 12,515,970 96.55% 88,367 12,604,337 97.24% 2021 13,231,113 12,990,870 98.18% 102,993 13,093,863 98.96% 2022 14,180,456 13,800,002 97.32% 95,442 13,895,444 97.99% 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
157
Fiscal Year Pension Fire Total
Ended Obligation Station Governmental
June 30 Leases Bonds Bonds Climatec Activities
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
2022 237,517 735,000 - 300,555 1,273,072
Notes:

Details regarding the City's outstanding debt can be found in the notes to the financial statements 1 See the schedule of Demographic and Economic Statistics 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 2011 Sewer Total Total Percentage Debt Ended Administration Water Board Installment State Revolving Business-type Primary of Personal Per June 30 Loan Loan Agreement Agreement Activities Government Income 1 Capita 1 2013 $ 74,780 $ 2,965,000 - $ $ 4,645,401 $ 7,685,181 $ 18,315,316 * 750 2014 - 2,835,000 - 4,068,778 6,903,778 17,831,178 * 732 2015 - 2,705,000 - 3,893,311 6,598,311 16,172,669 * 697 2016 - 2,565,000 - 3,718,034 6,283,034 14,367,242 * 613 2017 - 2,420,000 - 3,538,201 5,958,201 11,880,030 * 483 2018 872,555 - 2,270,000 3,353,690 6,496,245 10,777,553 * 398 2019 783,064 - 2,110,000 3,164,384 6,057,448 8,583,851 * 345 2020 654,381 - 1,940,000 2,970,155 5,564,536 7,596,569 * 304 2021 569,945 - 1,765,000 2,770,876 5,105,821 6,640,934 * 266 2022 485,509 - 1,580,000 2,566,416 4,631,925 5,904,997 * 238 Notes:

Details regarding the City's outstanding debt can be found in the notes to the financial statements 1 See the schedule of Demographic and Economic Statistics 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
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
2022 - 735,000 735,000 0.01% 30
NOTES:

Source: Finance Department, City of Seal Beach
City of Seal Beach
Last Ten Fiscal Years
Ratio of General Bonded Debt Outstanding
1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California.

General bonded debt is debt payable with governmental fund resources and general obligation bonds recorded in enterprise funds. The City has no general bonded debt. 160
2021-22 Assessed Valuation: $6,402,225,437
Total Debt City’s Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable (1) 6/30/2022 Debt 6/30/22 Metropolitan Water District 0.189% 20,175,000 $ $ 38,131 Coast Community College District 2.871% 945,799,424 27,153,901 North Orange Jt. Community College District 1.166% 209,339,039 2,440,893 Los Alamitos Unified School District School Facilities Imp District No.1 48.222% 197,835,227 95,400,103 Huntington Beach Union High School District 0.001% 163,654,998 1,637 Ocean View School District 0.004% 129,630,000 5,185
City of Seal Beach Community Facilities District No. 2002-1 100.000% 2,665,000 2,665,000 City of Seal Beach Community Facilities District No. 2005-1 100.000% 7,035,000 7,035,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 134,739,850 OVERLAPPING GENERAL FUND DEBT:

Orange County General Fund Obligations 0.939% 376,780,000 $ 3,537,964 $ Orange County Pension Obligations 0.939% 521,784,000 4,899,552 Orange County Board of Education Certificates of Participation 0.939% 11,620,000 109,112 North Orange County Regional Occupation Program Certificates of Participation 4.369% 8,200,000 358,258 Coast Community College District Certificates of Participation 2.871% 1,865,000 53,544 Coast Community College District Pension Obligation Bonds 2.871% 1,825,000 52,396 Los Alamitos Unified School District Certificates of Participation 53.396% 34,632,040 18,492,124 Huntington Beach Union High School District General Fund Obligations 0.001% 58,406,090 584 Ocean View School District General Fund Obligations 0.004% 16,310,000 652 City of Seal Beach Lease Revenue Bonds 100% 735,000 735,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $ 28,239,186 TOTAL DIRECT DEBT $ 735,000
Less: Orange County Transit Authority (80% self-supporting) 0 TOTAL OVERLAPPING DEBT $ 162,244,036
COMBINED TOTAL DEBT $ 162,979,036 (2)
(1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Ratios to Adjusted Assessed Valuation:

Total Overlapping Tax and Assessment Debt 2.10%
Total Direct Debt ($735,000) 0.01%
Combined Total Debt 2.55%
City of Seal Beach
Schedule of Direct and Overlapping Debt
June 30, 2022
161
2013 2014 2015 2016 2017
Debit limit $ 736,876,598 $ 756,328,731 $ 817,720,762 $ 846,747,277 $ 820,537,899 Total net debt applicable to limit - - - - -
Legal debt margin $ 736,876,598 $ 756,328,731 $ 817,720,762 $ 846,747,277 $ 820,537,899 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
2018 2019 2020 2021 2022
Debit limit $ 860,757,686 $ 892,030,484 $ 952,282,846 $ 930,063,188 $ 960,333,816 Total net debt applicable to limit - - - - -
Legal debt margin $ 860,757,686 $ 892,030,484 $ 952,282,846 $ 930,063,188 $ 960,333,816 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 2022
Assessed Valuation $ 6,402,225,437
Debt percentage 1 15%
Debt limit 960,333,815.55 $
Debt applicable to limit -
Legal debt margin $ 960,333,816
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
2013 $ 470,000 1,790,960 $ 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
2022 - - - -
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
The bonds were fully paid off during the year ended June 30, 2021. 164

Personal Per Capita
Calendar Income Personal Unemployment
Year Population (in thousands) Income Rate
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%
2021 24,846 1,426,979 57,432 6.0%
2022 24,683 1,426,979 57,432 6.0%
Sources: HDL Coren & Cone
City of Seal Beach
Demographic and Economic Statistics
Last Ten Calendar Years
165
Business
Business Name 2021-22 2012-13 Category
76 X Service Stations
AT&T Mobility X Electronics/Appliance Store
Bed Bath & Beyond X X Home Furnishings
Boeing X Transportation Non Auto
Burlington X Family Apparel
Chevron X X Service Stations
Chevron X X Service Stations
Chevron X Service Stations
Chick Fil A X Quick-Service Restaurants
College Park Mobil X Service Stations
Conkle 76 X Service Stations
Cosmodyne X Light/Indistrial Printers
CVS Pharmacy X X Drug Stores
Energy Tubulars X Petroleum Prod/Equip
Hoff's Hut X Casual Dining
Home Goods X X Home Furnishings
In N Out Burgers X Quick-Service Restaurants
Islands Casual Dining
Kobe Japanese Steakhouse X Casual Dining
Kohls X X Department Stores
Leisure World Automotive 76 X Service Stations
Mag Tek X Office Equipment
Marshalls X X Family Apparel
Mobil X Service Stations
Old Ranch Country Club X X Leisure/Entertainment
Original Parts Group X X Automotive Supply Stores
Pavillions 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 Chevron X Service Stations
Spaghettini X X Fine Dining
Target X X Discount Dept Stores
Toys R Us X Specialty Stores
Ulta Beauty X Specialty Stores
Vons X Grocery Stores Liquor
Walts Wharf X X Fine Dining
2020-21 Percent of Fiscal Year Total Paid by Top 25 Accounts = 57.06% 2012-13 Percent of Fiscal Year Total Paid by Top 25 Accounts = 72.09% Firms Listed Alphabetically: Period July Thru March
Source: Hinderliter, de Llamas & Associates, State Board of Equalization City of Seal Beach
Current Year and Nine Years Ago
Top 25 Sales Tax Producers
166
Function 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General government 10.97 10.56 14.64 14.34 15.92 13.00 13.48 13.48 14.75 21.35 Public safety 76.78 63.91 79.13 74.12 77.19 78.50 79.82 79.82 80.78 82.05 Public works 11.03 11.49 10.94 3.98 6.00 5.00 5.00 4.97 17.99 17.63 Community
development 12.01 10.60 18.16 17.25 16.53 13.60 14.76 14.76 13.88 13.50 Water 12.60 12.29 13.80 13.82 12.60 12.90 13.15 13.15 8.90 8.90 Sewer 5.28 3.95 5.91 7.11 7.69 6.71 6.89 6.89 5.86 6.22 Total 113.21 112.19 128.26 142.58 131.61 133.91 130.71 133.10 142.16 149.65 Source: Finance Department, City of Seal Beach
Last Ten Fiscal Years
Full-time and Part-time City Employees by Function
City of Seal Beach
167
2013 2014 2015 2016 2017
Police:

Arrests 819 758 798 790 781
Parking citations issued 18,451 18,931 21,043 19,264 18,319 Public works:

Street centerline miles resurfaced 2 1 2 1 -
Number of public right of way permits issued 96 140 151 184 259 Number of street related service requests 134 35 45 40 68 Parks and recreation:

Number of recreation classes 2,156 678 781 680 710
Number of facility rentals 3,182 1,763 2,633 557 585
Water:

Number of water meters replaced 128 85 57 76 56
Acre feet of water used 3,818 3,878 3,540 3,208 3,259
Sewer:

Number of feet of sewer cleaned 245,986 253,099 253,099 217,619 - Number of catch basins cleaned 417 401 434 458 216
Source: City of Seal Beach
Fiscal Year
City of Seal Beach
Operating Indicators by Function
Last Ten Fiscal Years
168
2018 2019 2020 2021 2022
Police:

Arrests 854 787 709 806 1,429
Parking citations issued 19,929 17,663 20,913 28,644 29,658 Public works:

Street centerline miles resurfaced 1 1 4 3 1
Number of public right of way permits issued 231 253 242 232 213 Number of street related service requests 109 92 44 39 258 Parks and recreation:

Number of recreation classes 1,070 1,100 790 1,113 955
Number of facility rentals 1,030 1,045 690 314 1,020
Water:

Number of water meters replaced 49 49 104 154 89
Acre feet of water used 3,208 3,360 3,276 3,471 3,086
Sewer:

Number of feet of sewer cleaned 217,619 154,000 146,619 126,563 190,569 Number of catch basins cleaned 216 216 216 217 218
Source: City of Seal Beach
Last Ten Fiscal Years
Operating Indicators by Function (Continued)
City of Seal Beach
Fiscal Year
169
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Police:

Stations 22222222 22
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 22
Parks and recreation:

Parks 10 10 10 10 10 10 10 10 10 13
Community centers 33333333 35
Water:

Water pipe (miles) 72 72 72 72 72 72 72 72 72 72
Reservoirs 22222222 22
Sewer
Sanitary sewers (miles) 37 37 37 37 37 37 37 37 37 37
Storm sewers (miles) 44444444 44
Sewer lift/pump stations 77777777 76
Source: City of Seal Beach
City of Seal Beach
Capital Asset Statistics by Function
Last Ten Fiscal Years
170
City of Seal Beach
Seal Beach, California
Independent Accountants’ Report on
Applying Agreed-Upon Procedures to
Appropriations Limit Schedule
For the Year Ended June 30, 2022
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
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”) for the year ended June 30, 2022. The management is responsible for the Appropriations Limit Schedule.

The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose in meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution, which was agreed to by the City and the League of California Cities (as presented int eh publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution). This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

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 ended June 30, 2022, and verified that the limit and annual calculation factors were adopted by resolution of the City Council. We also verified 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 verified 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 verified 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.

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