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 Schedule of the City's Proportionate Share of the 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 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the Required Supplementary Information in accordance with 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 January 12, 2024 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of 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
January 12, 2024
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City of Seal Beach
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2023
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, 2023, along with comparisons to the fiscal year ended June 30, 2022. All increases and decreases are expressed relative to fiscal year 2021-2022. 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 $141.6 million, an increase of $13.9 million or 10.8%. The net position of governmental activities increased by $13.7 million or 16.5%, while the net position of business-type activities increased by $0.1 million or 0.3%. The net position of $141.6 million consisted of $115.6 million of net investment in capital assets; $10.4 million of resources that are subject to external restrictions on how they may be used; $0.9 million that may be used to meet the City’s obligations for its governmental activities; and $14.7 million to meet obligations for its business-type activities.
Total revenues were $58.9 million and total expenses were $45.0 million. Revenues increased by $1.2 million or 2.2%, and expenses decreased by $13.1 million or 22.5%. As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $44.1 million, representing an increase of $4.1 million or 10.4%. Of this amount, $9.3 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 $4.9 million or 11.1% of total General Fund expenditures and transfers out.
The City implemented Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription Based Information Technology Arrangements (SBITAs), during the current fiscal year. As a result, the City reported $1.0 million net of amortizable subscription assets and $1.0 million of subscription liability. 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, 2023, the Committed-Fiscal Policy Reserve has a balance of $10.1 million, or 25.6% of General Fund expenditures (less transfers out related to capital projects). This percentage aligns with the City’s goals and is in accordance with the recommendation of the Government Finance Officers Association (GFOA).
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements; and 3) notes to the basic financial statements. This report also contains other supplementary information in addition to the basic financial statements.
Government-Wide Financial Statements – The government-wide financial statements are designed to provide readers with a view of the City’s finances, in a manner similar to a private-sector business.
The Statement of Net Position presents information on all assets and liabilities, deferred outflows and inflows with the difference between them reported as net position. Over time, increases or decreases in the City’s net position are one indicator of whether its financial condition is improving or deteriorating.
City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
6 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.
Both government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government and administration, public safety, development services, public works, recreation, and all its component units that are legally separate but whose activities entirely support the City of Seal Beach. The business-type activities of the City include water and sewer operations.
The government-wide financial statements can be found immediately following this discussion and analysis.
Fund Financial Statements – The fund financial statements provide detailed information about the most significant funds and other funds – not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management established many other funds to help control and manage money for particular purposes or to verify that all legal requirements for using certain taxes, grants, and other resources are being satisfied.
The City’s three types of funds are governmental, proprietary, and fiduciary funds.
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on how money flows in and out of those funds and the balances left at fiscal year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. The differences of results in the Governmental Fund financial statements to those in the government-wide financial statements are explained in a reconciliation following each of the Governmental Fund financial statements.
The City maintains individual governmental funds organized by their type (general, special revenue, 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.
City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
7 Fiduciary funds account for assets held by the City in a trustee capacity, or as an agent for other governmental entities, private organizations, or individuals. All the City’s fiduciary activities are reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position. These activities are excluded from the City’s government-wide financial statement because the City cannot use these assets to finance its operations. The basic fiduciary fund financial statements can be found immediately following the proprietary funds financial statements.
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 it obligation to provide pension and other post-employment benefits to City employees is included. Also included in this section are the budgetary comparison schedules for the general and major funds. The required supplementary information can be found immediately following the notes to the basic financial statements.
Combining statements and individual fund statements for non-major governmental funds, internal service and custodial funds are presented immediately following the required supplementary information.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
The 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 $141.6 million and $127.7 million for the years ended June 30, 2023, and June 30, 2022, respectively, as shown in Table 1. 2023 2022 2023 2022 2023 2022
Current and other assets 61,494 $ 55,876 $ 19,864 $ 19,875 $ 81,358 $ 75,751 $ Capital assets 87,343 85,735 34,301 34,662 121,644 120,397 Total assets 148,837 141,611 54,165 54,537 203,002 196,148 Deferred outflows of resources 21,111 10,715 2,171 802 23,282 11,517 Long-term liabilities outstanding 53,514 32,878 9,743 7,171 63,257 40,049 Other liabilities 5,635 4,005 1,472 1,666 7,107 5,671
Total liabilities 59,149 36,883 11,215 8,837 70,364 45,720 Deferred inflows of resources 13,893 32,247 455 1,979 14,348 34,226 Net position
Net investment in capital assets 85,687 84,448 29,929 30,111 115,616 114,559 Restricted 10,354 8,759 25 25 10,379 8,784
Unrestricted 864 (10,011) 14,713 14,386 15,577 4,375
Total net position 96,905 $ 83,196 $ 44,667 $ 44,522 $ 141,572 $ 127,718 $ (in Thousands)
Governmetal Activities
Table 1
Business-Type Activities Total Activities
Condensed Statement of Net Position
City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
8 As of June 30, 2023, the City continued to report positive balances in all three categories of net position for the government as a whole.
Net position – Net investment in capital assets ($115.6 million or 81.7% of total net position) represents capital assets, such as land, buildings, infrastructure, and equipment, less any related outstanding debt used to acquire those assets. This is an overall increase of $1.1 million, or 0.9%. 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.
Net position - Restricted ($10.4 million or 7.3% 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 18.2%. The majority of this increase occurred in restrictions for public works, which increased $1.4 million, or 32.5%.
Net position – Unrestricted ($15.6 million or 11.0% of total net position) represents an increase of $11.2 million or 256.1%. The governmental activities unrestricted of $0.9 million is an increase of $10.9 million or 108.6% as a result of the effect of implementing Governmental Accounting Standards Board (GASB) statements related to pension and other post-employment benefits (OPEB) liabilities. The total deferred inflows of resources on pension plans decreased by $18.7 million as a result of net differences between projected and actual earnings on pension plan investments. Generally accepted accounting principles require financial statement recording when a liability is incurred. However, the City, like many other governments, raises and budgets resources needed to liquidate certain liabilities during the year in which the liability is to be liquidated rather than during the year in which the liability is incurred. The City will continue to fund these obligations on an actuarial basis, contributing the full amount of annual required contributions every year.
Analysis of Activities - The City’s net position increased by $13.9 million or 10.8%. The following Table 2 provides a summary of the City’s operations for the years ended June 30, 2023, and June 30, 2022. 2023 2022 2023 2022 2023 2022
Revenues:
Program revenues:
Charges for services 8,662 $ 8,198 $ 8,131 $ 8,256 $ 16,793 $ 16,45 $ 4 Operating grants and contributions 4,166 9,362 - - 4,166 9,362 Capital grants and contributions 1 1 - - 1 1
General revenues:
Taxes:
Property taxes 14,468 13,429 - - 14,468 13,429
Sales taxes 11,667 11,44 - 4 - 11,667 11,44 4
Utility user taxes 5,349 4,508 - - 5,349 4,508
Other taxes 4,202 3,528 - - 4,202 3,528
Use of money and property (1,428) 782 290 218 1,072 (1,210) Other 97 1,145 - - 1,145 97
Total revenues 49,139 50,442 8,421 8,474 58,863 57,613
Expenses:
General government 8,604 6,778 - - 6,778 8,604
Public safety 26,912 20,063 - - 20,063 26,912
Community development 3,044 1,836 - - 1,836 3,044
Community services 264 1,992 - - 264 1,992
Public works 8,488 9,086 - - 8,488 9,086
Interest on long-term debt 61 36 - - 36 61
Water - - 5,251 6,064 5,251 6,064 Sewer - - 2,293 2,323 2,293 2,323 Total expenses 49,699 37,465 7,544 8,387 45,009 58,086
Change in net position before transfers 12,977 (560) 877 87 13,854 (473) Transfers 733 733 (733) (733) - -
Changes in net position 13,710 173 144 (646) 13,854 (473) Net position at beginning of year 83,195 83,022 44,523 45,169 127,718 128,191 Net position at end of year $ 83,195 96,905 $ 44,667 $ 44,523 $ 141,572 $ 127,718 $ Table 2
Condensed Statement of Activities
(in Thousands)
Governmental Activities Business-Type Activities Total Activities City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
9 Governmental Activities experienced an increase of $13.7 million in net position as of June 30, 2023, compared to an increase of $0.2 million at June 30, 2022. The reason for this year-to-year net increase of $13.7 million is due to increases of $1.3 million in revenues in addition to decreases to expenses of $12.2 million.
The overall net change in revenues is due to recognizing 1) less 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) increases in use of money and property due to rising interest rates throughout the fiscal year.
The cost of all governmental activities during the current fiscal year was $37.5 million, which is a $12.2 million decrease from fiscal year 2021-2022. The majority of this decrease was due to pension expenses decreasing by $12.9 million (refer to Note 9 of the Notes to the Basic Financial Statements for further analysis of the pension expense). The largest operating cost was comprised of Public Safety, representing 53.6% of total governmental expenditures compared to 54.1% of total governmental expenditures in fiscal year 2021-2022.
Business-type Activities net position increased by $0.1 million. An updated water and sewer rate study was conducted and implemented in 2021. 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, 2023, the City’s governmental funds reported combined ending fund balances of $44.1 million. Approximately $4.2 million, or 9.6% 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 $37.3 million, representing a net increase of $3.0 million. In comparison, in the prior fiscal year, the General Fund had a net increase of $4.4 million to fund balance.
Fiscal year 2022-2023 had an increase of $0.7 million in revenues which was entirely offset by an increase in expenditures of $0.8 million. The primary reason for the increase in fund balance is due to revenues over expenditures of $5.0 million offset by net transfers of $2.0 million. Net transfers increased by $1.3 million compared to the prior fiscal year.
Total governmental fund revenues increased overall by $1.0 million or 2.1% due to collecting higher tax revenues; these increases were offset by reductions to intergovernmental due to less COVID related grants in this fiscal year; and by increases in interest earnings due to rising interest rates throughout the fiscal year which caused an increase in the fair value of investments as of June 30. Overall expenditures increased by $2.5 million or 5.7%, as the City reopened services and support to residents and businesses.
City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
10 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 $4.1 million and $10.6 million for the Water and Sewer Funds, respectively. The Water Fund had an operating income of $0.5 million and the Sewer Fund had an operating income of $0.2 million. For the fiscal year 2021-2022, new water and sewer rates were implemented and contributed to a combined operating income of $20,600.
GENERAL FUND BUDGETARY HIGHLIGHTS
When preparing its budget, the City attempts to estimate its revenues using realistic, but conservative methods to budget its expenditure appropriations in a prudent manner. Amendments were approved during the fiscal year to the adopted budget. The fiscal year 2022-2023 General Fund’s revenue budget was adopted at $41.5 million and had amendments to taxes and charges for services of $1.1 million. The fiscal year 2022-2023 General Fund’s original (adopted) budget for expenditures was $43.5 million, and the final budget was $44.4 million, a net increase of $0.9 million. The largest change was an increase of $0.7 million to public works due to establishing expenditures for encroachment deposit permitting activities due to GASB 84.
The General Fund reflected a net total positive budget variance of $8.5 million when comparing actual amounts to the final amended budget for the current fiscal year. Actual revenues show a positive variance of $3.6 million or
8.5% of the final budget due to unanticipated receipts of taxes and miscellaneous revenues due to a case settlement.
Actual expenditures of $41.2 million generated budgetary savings of $3.2 million, or 7.1% of the final budget mostly due to savings in public works from vacant positions and contract professional. Additionally, capital outlay was less than anticipated due to not needing to transfer out 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, 2023, total $121.6 million compared to $121.7 million (net of accumulated depreciation and amortization) as of June 30, 2022. The investment in capital assets includes land, land easements, building and improvements, machinery and equipment, vehicles, infrastructure, leases, subscriptions and construction in progress as summarized in the following Table 3. Additional information on the City’s capital assets can be found in Note 5 in the notes to the basic financial statements. 2023 2022* 2023 2022* 2023 2022*
Land and land easements 21,220 $ 21,220 $ - $ - $ 21,220 $ 21,220 $ Buildings and improvements 8,250 8,659 - - 8,250 8,659
Machinery and equipment 1,625 1,743 617 629 2,242 2,372 Vehicles 1,609 1,572 7 265 4 1,683 1,837
Infrastructure 50,525 50,144 30,534 31,921 80,678 82,446 Lease assets 321 178 - - 321 178
Subscription assets 706 949 28 357 4 990 1,306
Construction-in-progress 3,468 1,838 2,792 1,847 6,260 3,685 Totals 87,343 $ 86,68 $ 34,301 4 $ 35,019 $ 121,644 $ 121,703 $ * as restated
Governmental Activities Business-Type Activities Total Activities Table 3
Capital Assets, At Fiscal Year-End
(Net of Depreciation, in Thousands)
City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
11 During fiscal year 2022-2023, major capital projects formally completed include:
Seal Beach Boulevard Traffic Signal Synchronization - Phase I (ST2109) - $246,646
DEBT ADMINISTRATION
As of June 30, 2023, the City had bonded debt, lease liabilities, notes payable, subscription liabilities, claims payable, and compensated absence liabilities totaling $7.7 million compared to $8.9 million at the end of the fiscal year 2021- 2022. The City’s governmental activities maintained $3.1 million in lease revenue bonds, leases, subscription liabilities, claims payable, and compensated absences versus $3.8 million last fiscal year, representing a decrease of approximately $0.7 million. This decrease reflects interest and principal payments made during fiscal year 2022-2023 in addition to an increase to leases.
The City’s business-type activities debt decreased $0.6 million from $5.1 million to $4.5 million. Debt in the business-type activities consists of lease revenue bonds, State loans for water and sewer capital improvement projects, subscription liabilities and compensated absences. The decrease reflects interest and principal payments made during fiscal year 2022-2023.
A summary of outstanding debt can be found in the following Table 4, and additional information on the City’s longterm debt can be found in Note 6 in the basic financial statements. 2023 2022* 2023 2022* 2023 2022*
Lease revenue bonds 315 $ 735 $ 1,385 $ 1,580 $ 1,700 $ 2,315 $ Leases 54 538 6 - 54 - 538 6
Capital project notes - 2,758 - 3,052 2,758 3,052
Subscription liabilities 695 949 277 357 972 1,30 6
Self-insured Claims Payable 263 175 - 175 - 263
Compensated absences 1,395 1,333 11 115 4 1,509 1,448
Total 3,126 $ 3,818 $ 4,53 $ 5,10 4 $ 7,660 4 $ 8,922 $ * as restated
Table 4
Outstanding Debt, At Fiscal Year-End
(in Thousands)
Governmental Activities Business-Type Activities Total Activities 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.
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.
City of Seal Beach
Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023
12 The City prepared a balanced annual budget for fiscal year 2023-2024. 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 2023-2024 budget year were conservative due to the continuing unknown lingering impacts from the pandemic and fiscal uncertainty. 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 2024-2028 CIP recommends approximately $49.2 million in improvements over the next 5 years, including $0.8 million for implementation of Revitalization projects. The 5-Year Capital Improvement Program identifies needs in the following areas: Buildings ($15.5M), Beach and Pier ($4.0M), Parks ($0.7M), Sewer System ($10.7M), Streets and Transportation ($13.4M), Storm Drain ($2.6M), and Water System ($1.5M). It should be noted that a comprehensive Water System 5-Year CIP projection is not included and is deferred until a Water Financial Plan/Rate Update is approved.
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 44,214,188 $ 18,663,236 $ 62,877,424 $ Accounts receivable 1,612,280 1,149,274 2,761,554
Taxes receivable 3,493,600 - 3,493,600
Lease receivable, due within one year 342,715 - 342,715 Interest receivable 255,808 - 255,808
Due from other governments 762,907 - 762,907
Prepaid items 26,484 61,989 88,473
Total current assets 19,838,994 50,743,487 70,582,481
Noncurrent Assets:
Restricted cash with fiscal agent 637,447 25,082 662,529 Lease receivable, due in more than one year 10,112,627 - 10,112,627 Capital assets:
Capital assets, not being depreciated 24,687,502 2,792,266 27,479,768 Capital assets, being depreciated, net 61,628,326 31,224,236 92,852,562 Intangible capital assets, being amortized, net 1,026,836 284,244 1,311,080 Total capital assets, net 87,342,664 34,300,746 121,643,410 Total noncurrent assets 34,325,828 98,092,738 132,418,566 Total assets 54,164,822 148,836,225 203,001,047
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding - 72,422 72,422
Pension related 19,272,836 1,563,772 20,836,608
Other postemployment benefits related 1,838,014 534,841 2,372,855 Total deferred outflows of resources 2,171,035 21,110,850 23,281,885 (Continued)
Primary Government
City of Seal Beach
Statement of Net Position
June 30, 2023
See accompanying Notes to the Basic Financial Statements 16 Governmental Business-Type
Activities Activities Total
LIABILITIES
Current Liabilities:
Accounts payable 4,216,605 1,188,651 5,405,256
Accrued liabilities 303,794 36,721 340,515
Accrued interest 3,506 45,803 49,309
Deposits payable 1,010,969 176,203 1,187,172
Retention payable 100,308 23,964 124,272
Long-term liabilities, due within one year 1,152,843 605,370 1,758,213 Total current liabilities 2,076,712 6,788,025 8,864,737 Long-term liabilities:
Long-term liabilities, due in more than one year 1,973,145 3,928,830 5,901,975 Net pension liabilities 45,514,539 3,790,557 49,305,096 Net other postemployment benefits liabilities 4,873,231 1,418,057 6,291,288 Total noncurrent liabilities 9,137,444 52,360,915 61,498,359 Total liabilities 11,214,156 59,148,940 70,363,096
DEFERRED INFLOWS OF RESOURCES
Pension related 3,205,721 387,172 3,592,893
Other postemployment benefits related 231,724 67,429 299,153 Leases related 10,455,342 - 10,455,342
Total deferred inflows of resources 454,601 13,892,787 14,347,388
NET POSITION
Net investment in capital assets 85,686,837 29,928,878 115,615,715 Restricted for:
Community development projects 915,006 - 915,006
Public safety 497,220 - 497,220
Community services 544,849 - 544,849
Public works 5,700,549 - 5,700,549
Debt service 25,082 761,441 786,523
Waste management, park in lieu, and I-405 corridor improvement 1,935,127 - 1,935,127 Total restricted 10,354,192 25,082 10,379,274
Unrestricted 14,713,140 864,319 15,577,459
Total net position $ 44,667,100 96,905,348 $ 141,572,448 $ (Concluded)
City of Seal Beach
Statement of Net Position (Continued)
June 30, 2023
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 6,778,212 $ 1,069,669 $ 62,767 $ - $ 1,132,436 $ Public safety 20,062,949 2,282,044 552,008 - 2,834,052
Community development 1,836,054 499,835 786,228 - 1,286,063 Community services 263,478 1,221,628 - - 1,221,628
Public works 8,487,999 3,588,535 2,764,833 889 6,354,257 Interest and fiscal charges 36,443 - - - -
Total governmental activities 8,661,711 37,465,135 4,165,836 889 12,828,436 Business-Type Activities:
Water utility 5,250,934 5,759,925 - - 5,759,925
Sewer utility 2,292,687 2,371,663 - - 2,371,663
Total business-type activities 8,131,588 7,543,621 - - 8,131,588 Total primary government $ 16,793,299 45,008,756 $ 4,165,836 $ 889 $ 20,960,024 $ (Continued)
Program Revenues
City of Seal Beach
Statement of Activities
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements 18 Governmental Business-Type
Activities Activities Total
Functions/Programs
Governmental Activities:
General government (5,645,776) $ - $ (5,645,776) $
Public safety (17,228,897) - (17,228,897)
Community development (549,991) - (549,991)
Community services 958,150 - 958,150
Public works (2,133,742) - (2,133,742)
Interest and fiscal charges (36,443) - (36,443)
Total governmental activities - (24,636,699) (24,636,699) Business-Type Activities:
Water Utility 508,991 - 508,991
Sewer Utility 78,976 - 78,976
Total business-type activities 587,967 - 587,967
Total primary government 587,967 (24,636,699) (24,048,732) General Revenues:
Taxes:
Property taxes, levied for general purpose 14,468,211 - 14,468,211 Sales taxes 11,666,838 - 11,666,838
Franchise taxes 1,175,046 - 1,175,046
Utility users tax 5,349,003 - 5,349,003
Transient occupancy taxes 1,922,823 - 1,922,823
Other taxes 1,104,573 - 1,104,573
Motor vehicle in lieu- unrestricted 25,874 - 25,874
Use of money and property 781,761 289,885 1,071,646
Other 1,118,893 - 1,118,893
Transfers (733,500) 733,500 -
Total general revenues and transfers (443,615) 38,346,522 37,902,907 Changes in net position 144,352 13,709,823 13,854,175
Net Position:
Beginning of year 83,195,525 44,522,748 127,718,273
End of year 96,905,348 $ 44,667,100 $ 141,572,448 $
(Concluded)
Net (Expense) Revenue and Changes in Net Positions
City of Seal Beach
Statement of Activities (Continued)
For the Year Ended June 30, 2023
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 $ 1,269,069 35,747,368 $ 7,013,603 $ 44,030,040 $ Receivables:
Accounts - 939,645 672,635 1,612,280
Taxes - 3,385,355 108,245 3,493,600
Interest - 254,694 1,114 255,808
Leases - 10,455,342 - 10,455,342
Due from other governments - 200,489 562,418 762,907
Due from other funds - 520,038 - 520,038
Prepaid items - 42,705 19,284 61,989
Restricted assets:
Cash and investments with fiscal agents - 1,939 635,508 637,447 Total assets $ 1,269,069 51,547,575 $ 9,012,807 $ 61,829,451 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCES
Liabilities:
Accounts payable $ 1,059,662 2,263,021 $ 864,472 $ 4,187,155 $ Accrued liabilities - 293,303 10,491 303,794
Deposits payable - 1,010,969 - 1,010,969
Due to other funds - - 520,038 520,038
Retentions payable 69,426 - 30,882 100,308
Total liabilities 1,129,088 3,567,293 1,425,883 6,122,264 Deferred inflow of resources:
Unavailable revenue 200,489 - 941,788 1,142,277
Leases - 10,455,342 - 10,455,342
Total deferred inflow of resources - 10,655,831 941,788 11,597,619 Fund Balances:
Nonspendable 42,705 - - 42,705
Restricted 1,935,127 - 7,477,277 9,412,404
Committed 25,322,120 - - 25,322,120
Assigned 5,097,455 - - 5,097,455
Unassigned (deficit) 4,927,044 139,981 (832,141) 4,234,884 Total fund balances 139,981 37,324,451 6,645,136 44,109,568 Total liabilities, deferred inflow of resources,
and fund balances $ 1,269,069 51,547,575 $ 9,012,807 $ 61,829,451 $ City of Seal Beach
Balance Sheet
June 30, 2023
Governmental Funds
See accompanying Notes to the Basic Financial Statements 24 Total Fund Balances - Total Governmental Funds $ 44,109,568 Nondepreciable $ 24,687,502
Depreciable, net of $636,878 reported in Internal Service Funds 60,991,448 Amortizable, net of $281,976 reported in Internal Service Funds 744,860 86,423,810 Bonds payable $ (315,000)
Loans payable (218,963)
Lease liabilities, net of $287,813 reported in Internal Service Funds (39,298) Subscription liabilities (694,445)
Claims and judgments (175,046)
Compensated absences (2,838,175) (1,395,423)
(3,506)
Pension related deferred outflows of resources 19,272,836 $ Net pension liability (45,514,539)
Pension related deferred inflows of resources (3,205,721) (29,447,424) OPEB related deferred outflows of resources 1,838,014 $ Net OPEB liability (4,873,231)
OPEB related deferred inflows of resources (231,724) (3,266,941) 1,142,277
785,739
Net Position of Governmental Activities $ 96,905,348
Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities. All Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Internal Service Funds were used by management to charge the costs of certain activities, such as insurance and equipment replacement to individual funds. The assets and liabilities of the Internal Service Funds were included in the governmental activities in the Government-Wide Statement of Net Position.
Revenue reported as unavailable revenue in the governmental funds when it is not received soon enough after year-end to be considered available. The availability criteria does not apply to the Government-Wide Financial Statements and, therefore, the revenue is recognized when eligibility requirements are met and earned.
Net other postemployment benefits liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:
Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the governmental funds.
Net pension liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements:
City of Seal Beach
Reconciliation of the Governmental Funds Balance Sheet to the June 30, 2023
Government-Wide Statement of Net Position
Amounts reported for governmental activities in the Statement of Net Position were reported differently because:
See accompanying Notes to the Basic Financial Statements 25 Capital Projects
and Equipment Other
General Capital Projects Governmental
Fund Fund Funds Total
Revenues:
Taxes 35,686,493 $ - $ 2,030,181 $ 37,716,674 $
Licenses and permits 1,027,232 - - 1,027,232
Intergovernmental 370,982 - 1,251,023 1,622,005
Charges for services 5,712,979 - 108,103 5,821,082
Use of money and property 694,426 - 117,092 811,518
Fines and forfeitures 1,435,250 - - 1,435,250
Contributions 37,023 - 40,000 77,023
Miscellaneous 1,291,231 - - 1,291,231
Total revenues - 46,255,616 3,546,399 49,802,015
Expenditures:
Current:
General government 7,604,654 - 66,422 7,671,076
Public safety 24,003,022 - 567,185 24,570,207
Community development 1,587,435 - 630,580 2,218,015
Community services 1,219,014 - - 1,219,014
Public works 6,273,410 66,800 285,471 6,625,681
Capital outlay 169,269 2,405,775 1,034,510 3,609,554
Debt service:
Principal retirement 369,974 - 420,000 789,974
Interest and fiscal charges 12,227 - 24,424 36,651
Total expenditures 2,472,575 41,239,005 3,028,592 46,740,172 Revenues over (under) expenditures (2,472,575) 5,016,611 517,807 3,061,843 Other Financing Sources (Uses):
Transfers in 1,007,500 2,612,556 739,455 4,359,511
Transfers out (3,048,566) - (226,057) (3,274,623)
Total other financing sources (uses): 2,612,556 (2,041,066) 513,398 1,084,888 Net change in fund balances 139,981 2,975,545 1,031,205 4,146,731 Fund Balances:
Beginning of year 34,348,906 - 5,613,931 39,962,837
End of year $ 139,981 37,324,451 $ 6,645,136 $ 44,109,568 $ City of Seal Beach
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements 26 Net Change in Fund Balances - Total Governmental Funds $ 4,146,731 Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds.
Capital outlay, net of $0 reported in Internal Service Fund 3,609,554 $ Depreciation and amortization, net of $254,327 reported in Internal Service Fund (2,924,136) Net effect on disposal of capital assets, net of $7,138 reported in Internal Service Fund 56,934 742,352 Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. 789,974 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. 3,659 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. 88,123 Compensated absences were reported in the Government-Wide Statement of Activities, but they do not require the use of current financial resources. Therefore, compensated absences were not reported as expenditures in the governmental funds. (62,310) 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 $5,218,453. 7,164,091 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 $990,171. 867,485
Revenues reported as unavailable revenue in the governmental funds and recognized in the Statement of Activities. 585,112
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. (615,394)
Change in net position of governmental activities $ 13,709,823 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, 2023
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 This page intentionally left blank.
30 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds
ASSETS
Current Assets:
Cash and investments 6,849,688 $ 11,813,548 $ 18,663,236 $ 184,148 $ Accounts receivable 395,217 754,057 1,149,274 -
Prepaid items 26,484 - 26,484 -
Total current assets 12,208,765 7,630,229 19,838,994 184,148 Noncurrent Assets:
Restricted cash 25,082 - 25,082 -
Capital assets, not being depreciated 2,258,277 533,989 2,792,266 - Capital assets, net of accumulated depreciation 14, 16,801,004 423,232 31,224,236 636,878 Intangible assets, net of accumulated amortization 125,722 158,522 284,244 281,976 Total capital assets 16,840,031 17,460,715 34,300,746 918,854 Total noncurrent assets 17,460,715 16,865,113 34,325,828 918,854 Total Assets 29,669,480 24,495,342 54,164,822 1,103,002
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding - 72,422 72,422 -
Pension related items 973,368 590,404 1,563,772 -
Other postemployment benefits related items 332,911 201,930 534,841 - Total deferred outflows of resources 864,756 1,306,279 2,171,035 - (Continued)
Enterprise Funds
June 30, 2023
Proprietary Funds
Statement of Net Position
City of Seal Beach
Business-Type Activities
See accompanying Notes to the Basic Financial Statements 31 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds
LIABILITIES
Current Liabilities:
Accounts payable 1,061,535 127,116 1,188,651 29,450
Accrued liabilities 22,984 13,737 36,721 -
Accrued interest 776 45,027 45,803 -
Retention payable 23,964 - 23,964 -
Deposits payable 167,029 9,174 176,203 -
Compensated absences, due within one year 8,197 19,437 27,634 - Long-term debt, due within one year 127,075 450,661 577,736 80,586 Total current liabilities 665,152 1,411,560 2,076,712 110,036 Noncurrent Liabilities:
Compensated absences, due in more than one year 56,554 29,686 86,240 - Long-term debt, due in more than one year 425,184 3,417,406 3,842,590 207,227 Net pension liabilities 2,359,428 1,431,129 3,790,557 - Net other postemployment benefits liabilities 882,668 535,389 1,418,057 - Total noncurrent liabilities 5,413,610 3,723,834 9,137,444 207,227 Total liabilities 6,078,762 5,135,394 11,214,156 317,263
DEFERRED INFLOW OF RESOURCES
Pension related items 240,995 146,177 387,172 -
Other postemployment benefits related items 41,971 25,458 67,429 - Total deferred inflows of resources 171,635 282,966 454,601 -
NET POSITION
Net investment in capital assets 16,263,808 13,665,070 29,928,878 631,041 Restricted for debt service 25,082 - 25,082 -
Unrestricted 4,094,371 10,618,769 14,713,140 154,698
Total net position $ 24,283,839 20,383,261 $ 44,667,100 $ 785,739 $ (Concluded)
Enterprise Funds
City of Seal Beach
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2023
Business-Type Activities
See accompanying Notes to the Basic Financial Statements 32 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds
OPERATING REVENUES:
Sales and service charges 5,759,325 $ 2,371,621 $ 8,130,946 $ - $ Miscellaneous 600 42 642 -
Total operating revenues 2,371,663 5,759,925 8,131,588 - OPERATING EXPENSES:
Personnel expenses 1,413,264 770,777 2,184,041 -
Operating expenses 3,330,368 393,748 3,724,116 60,559
Amortization and depreciation expenses 510,725 1,005,215 1,515,940 254,327 Total operating expenses 2,169,740 5,254,357 7,424,097 314,886 Operating income (loss) 201,923 505,568 707,491 (314,886) NONOPERATING INCOME (LOSS):
Interest revenues 104,907 184,978 289,885 -
Interest expenses (7,234) (148,389) (155,623) (3,451)
Gain on sale of assets 10,657 25,442 36,099 54,331
Total nonoperating income (loss) 62,031 108,330 170,361 50,880 Income (loss) before transfers 263,954 613,898 877,852 (264,006) TRANSFERS:
Transfers out (440,000) (293,500) (733,500) (351,388)
Total transfers (293,500) (440,000) (733,500) (351,388) Changes in net position (29,546) 173,898 144,352 (615,394) NET POSITION:
Beginning of year 20,209,363 24,313,385 44,522,748 1,401,133 End of year 20,383,261 $ 24,283,839 $ 44,667,100 $ 785,739 $ Enterprise Funds
Business-Type Activities
For the Year Ended June 30, 2023
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 5,862,302 $ 2,453,420 $ 8,315,722 $ 26,750 $ Cash paid to suppliers for goods and services (392,959) (3,429,669) (3,822,628) (78,537) Cash paid to employees for services (1,607,154) (829,694) (2,436,848) - Net cash provided by (used in)
operating activities 1,230,767 825,479 2,056,246 (51,787)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cash transfers out (293,500) (440,000) (733,500) (351,388) Net cash (used in) noncapital
financing activities (293,500) (440,000) (733,500) (351,388)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Acquisition of capital assets (185,625) (756,751) (942,376) - Proceed on disposal of assets 10,657 191,000 201,657 61,469 Principal paid on long-term liabilities (130,671) (438,165) (568,836) (54,795) Interest paid on long-term liabilities (7,243) (140,536) (147,779) (3,451) Net cash provided by (used in) capital and
related financing activities (573,326) (884,008) (1,457,334) 3,223
CASH FLOWS FROM INVESTING
ACTIVITIES:
Interest received 104,907 184,978 289,885 -
Net cash provided by investing activities 184,978 104,907 289,885 - Net change in cash and cash equivalents 548,919 (393,622) 155,297 (399,952) CASH AND CASH EQUIVALENTS:
Beginning of year 7,268,392 11,264,629 18,533,021 584,100 End of year $ 11,813,548 6,874,770 $ 18,688,318 $ 184,148 $
RECONCILIATION OF CASH AND CASH
EQUIVALENTS:
Cash and investments 6,849,688 $ 11,813,548 $ 18,663,236 $ 184,148 $ Restricted cash 25,082 - 25,082 -
Total cash and cash equivalents $ 11,813,548 6,874,770 $ 18,688,318 $ 184,148 $ (Continued)
Enterprise Funds
City of Seal Beach
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2023
Business-Type Activities
See accompanying Notes to the Basic Financial Statements 34 Governmental
Activities
Internal
Water Utility Sewer Utility Total Service Funds
Reconciliation of Operating Income (Loss) to
to Net Cash Provided by (Used in)
Operating Activities:
Operating income (loss) 505,568 $ 201,923 $ 707,491 (314,886) $ Adjustments to reconcile operating income
(loss) to net cash provided by (used in)
operating activities:
Amortization and depreciation expenses 510,725 1,005,215 1,515,940 254,327 Changes in assets and liabilities:
(Increase)/decrease in accounts receivables 101,121 80,567 181,688 26,750 (Increase)/decrease in prepaid items (16,021) - (16,021) - (Increase)/decrease in deferred outflows of
resources related to pensions (587,435) (365,820) (953,255) - (Increase)/decrease in deferred outflows of
resources related to OPEB (273,296) (154,238) (427,534) - Increase/(decrease) in accounts payable (83,280) 789 (82,491) (17,978) Increase/(decrease) in accrued liabilities (107,193) (24,567) (131,760) - Increase/(decrease) in deposits payable 1,256 1,190 2,446 - Increase/(decrease) in compensated absences (7,817) 6,438 (1,379) - Increase/(decrease) in net pension liabilities 1,086,417 690,332 1,776,749 - Increase/(decrease) in net OPEB liabilities 655,060 353,303 1,008,363 - Increase/(decrease) in deferred inflows of
resources related to pensions (942,424) (542,484) (1,484,908) - Increase/(decrease) in deferred inflows of
resources related to OPEB (17,202) (21,881) (39,083) -
Net cash provided by (used in) operating
activities $ 1,230,767 825,479 $ 2,056,246 $ (51,787) $ NONCASH ITEM:
Acquisition of lease assets $ - - $ - $ (178,158) $
Issuance of lease liabilities $ - - $ - $ 178,158 $
Amortization of deferred charges $ 12,070 - $ 12,070 $ - $ (Concluded)
Enterprise Funds
City of Seal Beach
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2023
Business-Type Activities
See accompanying Notes to the Basic Financial Statements 35 This page intentionally left blank.
36 FIDUCIARY FUND FINANCIAL STATEMENTS
37 This page intentionally left blank.
38 Custodial
Funds
ASSETS
Cash and investments $ 645,750
Restricted investments with fiscal agent 978,103
Total assets 1,623,853
LIABILITIES
Current liabilities:
Accounts payable 7,642
Interest payable 101,459
Total current liabilities 109,101
Total liabilities 109,101
NET POSITION
Restricted
For individual, organization and other government $ 1,514,752 Total fiduciary net position
June 30, 2023
Statement of Fiduciary Net Position
City of Seal Beach
Fiduciary Funds
See accompanying Notes to the Basic Financial Statements 39 Custodial
Funds
ADDITIONS:
Assessment revenue collected $ 808,602
Investment income 37,471
Total additions 846,073
DEDUCTIONS:
Return of deposits 201,175
Payment of special assessment district debt service 801,362 Total deductions 1,002,537
Change in net position (156,464)
NET POSITION:
Beginning of year 1,671,216
End of year $ 1,514,752
City of Seal Beach
Statement of Change in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2023
See accompanying Notes to the Basic Financial Statements. 40 41
NOTES TO THE BASIC FINANCIAL STATEMENTS
42 This page intentionally left blank.
City of Seal Beach
Index to the Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
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 ............................................................................................................................... 52 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. Subscription Liabilities ................................................................................................................... 54 S. Net Position .................................................................................................................................... 54 T. Fund Balances ................................................................................................................................. 55 U. Use of Estimates ............................................................................................................................. 56 V. Tax Abatement ................................................................................................................................ 56 W. Implementation of New GASB Pronouncements ........................................................................... 56 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”) ............................................................... 61 Note 3 – Lease Receivable ................................................................................................................................... 61 Note 4 – Interfund Transactions ........................................................................................................................ 62 A. Due From/To Other Funds .............................................................................................................. 62 B. Transfers ......................................................................................................................................... 62 Note 5 – Capital Assets ........................................................................................................................................ 63 Note 6 – Long-Term Liabilities .......................................................................................................................... 65 A. Governmental Activities ................................................................................................................. 65 B. Business-Type Activities ................................................................................................................ 68 City of Seal Beach
Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023
44 Page
Note 7 – Non-City Obligations ........................................................................................................................... 71 A. Heron Pointe Community Facilities District No. 2002-01 ............................................................ 71 B. Pacific Gateway Business Center Community Facilities District No. 2005-01 ............................ 71 Note 8 – Risk Management and Self Insurance Program ............................................................................... 71 A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement ..................................... 71 B. Primary Self-Insurance Programs of the Authority ....................................................................... 71 C. Purchased Insurance ...................................................................................................................... 72 D. Adequacy of Protection ................................................................................................................. 73 E. Claims Activity .............................................................................................................................. 73 Note 9 – Defined Benefit Pension Plans ............................................................................................................ 74 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 ........................................................................................................................ 81 C. Changes in the Net OPEB Liability ............................................................................................... 82 D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB ................................................................................................... 83 Note 11 – Net Investment in Capital Assets ...................................................................................................... 84 Note 12 – Classification of Fund Balances ........................................................................................................ 85 Note 13 – Commitments and Contingencies ..................................................................................................... 86 A. Commitments ................................................................................................................................. 86 B. Contingencies ................................................................................................................................ 86 C. Grants ............................................................................................................................................. 86 Note 14 – Individual Fund Disclosure ............................................................................................................... 86 Note 15 – Restatement of Beginning Net Position ............................................................................................ 86 City of Seal Beach
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
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, 2023
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, 2023
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, 2023
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 fund:
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.
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, 2023
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 Receivable
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, 2023
50 Note 1 – Summary of Significant Accounting Policies (Continued) F. Lease Receivable (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, 2023
51 Note 1 – Summary of Significant Accounting Policies (Continued) I. Capital Assets (Continued)
The City established a threshold to recognize a right-to-use including lease asset or subscription-based information technology arrangements (“SBITA”) asset (“subscription assets”) in the government-wide financial statements and proprietary fund financial statements right-to-use 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.
Subscription assets are recorded at the amount of the initial measurement of the SBITA liabilities (“subscription liabilities”) and adjusted by any subscription payments to the SBITA vendor at or before the commencement of the subscription term, less any incentives received from the SBITA vendor at or before the commencement of the subscription term along with subscription implementation costs. Subscription assets are amortized over the shorter of the subscription term or the useful life of the underlying IT assets.
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.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
52 Note 1 – Summary of Significant Accounting Policies (Continued) L. Claims Payable
When it is probable that a claim liability has been incurred at year-end and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage under its selfinsurance program. Small dollar claims and judgments are recorded as expenditures when paid.
The City's self-insurance program is administered through California Joint Powers Insurance Authority (CJPIA), which is described in Note 8 to the financial statements. The Authority is a public entity risk pool.
Claims losses recorded in the Authority include both current claims and incurred but not reported claims (IBNR).
Deposits to the Authority are recorded by the City as insurance expenditures in the General Fund when paid.
These deposits are subject to retrospective adjustment. Favorable claims experience in prior years results in a refund of deposits from the Authority and such refunds, if any, are recorded as prepaid items in the General Fund since they will be used to offset future deposit requirements. Adverse claims experience in prior years results in the payment of additional deposits and such deposits, if any, are recorded as insurance expenditures when incurred.
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, 2021
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
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.
Pension liabilities are liquidated principally by General Fund for the governmental activities.
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.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
53 Note 1 – Summary of Significant Accounting Policies (Continued) N. Other Postemployment Benefits (Continued)
The following timeframes are used for OPEB reporting:
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
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.
OPEB liabilities are liquidated principally by General Fund for the governmental activities.
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.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
54 Note 1 – Summary of Significant Accounting Policies (Continued) Q. Lease Liabilities (Continued)
The City uses incremental borrowing rate provided by the financial institution 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. Subscription Liabilities
The City recognizes subscription liabilities with an initial, individual value of $5,000 or more with a subscription term greater than one year in the government-wide and proprietary fund financial statements. Variable payments based on future performance of the City, usage of the underlying IT assets, or number of user seats are not included in the measurement of the subscription liability.
At the commencement of a subscription, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made.
Key estimates and judgments related to subscription liabilities include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.
The City uses incremental borrowing rate provided by the financial institution at July 1, 2022 for existing subscription or the current rate at the time a new subscription is executed. The subscription term includes the noncancellable period of the SBITA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments.
The City monitors changes in circumstances that would require a remeasurement of its SBITA and will remeasure any subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.
S. 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, 2023
55 Note 1 – Summary of Significant Accounting Policies (Continued) S. 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.
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.
T. 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.
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, then unassigned.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
56 Note 1 – Summary of Significant Accounting Policies (Continued) 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
In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements (GASB Statement No. 96), to better meet the information needs of financial statement users by (a) establishing uniform accounting and financial reporting requirements for SBITAs; (b) improving the comparability of financial statements among governments that have entered into SBITAs; and (c) enhancing the understandability, reliability, relevance, and consistency of information about SBITAs. Under this Statement, a government is required to recognize a subscription liability and an intangible right-to-use subscription asset. The effective date of GASB Statement No. 96 is for fiscal years beginning after June 15, 2022. Implementation of this Statement resulted in restatement of beginning balance of capital assets (Note 9) and long-term debt liabilities (Note 11) at July 1, 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, 2023:
Government-Wide Statement of
Statement of Fiduciary
Net Position Net Position Total
Cash and investments 62,877,424 $ 645,750 $ 63,523,174 $ Restricted cash and investment
with fiscal agent 662,529 978,103 1,640,632
Total cash and investments 63,539,953 $ 1,623,853 $ 65,163,806 $ The City’s cash and investments at June 30, 2023 in more detail:
Petty cash 9,000 $
Demand deposits 4,059,384
Restricted cash 27,021
Investments 61,068,400
Total cash and investments 65,163,805 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
57 Note 2 – Cash and Investments (Continued)
A. Demand Deposits
The carrying amounts of the City’s demand deposits were $4,059,384 at June 30, 2023. Bank balances at that date were $4,213,342, 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, 2023
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, 2023, 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, 2023:
Quoted Prices in
Active Markets for Significant Other
Identical Assets Observable Inputs
Investment Type Value (Level 1) (Level 2)
Investments:
US Treasury bonds/notes 16,758,037 $ 16,758,037 $ - $
Supra-National Agency Note 615,932 - 615,932
U.S. government sponsored enterprise securities 4,478,182 - 4,478,182 Asset-backed securities 48,058 - 48,058
Municipal bonds 1,133,142 - 1,133,142
Corporate notes 4,340,595 - 4,340,595
Negotiable certificates of deposit 269,826 - 269,826
Bank notes 237,025 - 237,025
Total investments subject to fair value measurement 27,643,772 $ 16,758,037 $ 10,885,735 $ 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, 2023
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 16,758,037 $ $ 2,389,269 1,324,049 $ 6,500,821 $ 2,240,462 $ 4,303,436 $ Supra-National Agency Note 615,932 405,234 210,698 - - - U.S. government sponsored
enterprise securities 4,478,182 1,771,714 576,764 1,938,729 190,975 - Asset-backed securities 48,058 - - 48,058 - -
Municipal bonds 1,133,142 510,157 267,931 355,054 - -
Corporate notes 4,340,595 1,970,565 517,291 635,298 525,287 692,154 Negotiable certificates of deposit 269,826 269,826 - - - - Bank notes 237,025 - - - - 237,025
LAIF 31,573,992 - 31,573,992 - - -
Investments with Fiscal Agent:
Money market funds 1,613,611 1,613,611 - - - -
Total investments 61,068,400 $ 36,084,336 $ 7,316,765 $ 9,477,960 $ 2,956,724 $ 5,232,615 $ Investment Maturities (in Years)
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
60 Note 2 – Cash and Investments (Continued)
E. Risk Disclosures (Continued)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below 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 16,758,037 $ $ 16,758,037 - $ - $ - $ Supra-National Agency Note AA 615,932 - 615,932 - -
U.S. government sponsored
enterprise securities A 4,478,182 4,478,182 - - -
Asset-backed securities AA 48,058 - 48,058 - -
Municipal bonds 1,133,142 950,022 183,120 - -
Corporate notes A 4,340,595 1,072,827 328,557 2,612,165 327,046 Negotiable certificates of deposit N/R 269,826 - - 269,826 - Bank notes N/R 237,025 - - 237,025 -
LAIF N/A 31,573,992 - - - 31,573,992
Investments with Fiscal Agent:
Money market funds N/R 1,613,611 1,613,611 - - -
Total investments 61,068,400 $ 2,789,278 $ 23,259,068 $ 3,119,016 $ 31,901,038 $ N/R - Not required by the City's investment policy
N/A - Not applicable
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.
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, 2023, 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.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
61 Note 2 – Cash and Investments (Continued)
E. Risk Disclosures (Continued)
Custodial Credit Risk (Continued)
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. As of June 30, 2023, the City had $31,573,992 invested in LAIF. LAIF is reported at amortized cost, which approximates fair value.
Note 3 – Lease Receivable
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, 2023, the City recognized $339,837 in lease revenue and $160,140 in lease interest revenue for General Fund. The outstanding lease receivable is in the amount of $10,455,342 in the General Fund.
The future receipts for the lease receivables, including interest, are as follows:
Year ending
June 30, Principal Interest Total
2024 342,715 $ 155,389 $ 498,104 $
2025 355,053 149,865 504,918
2026 350,753 144,460 495,213
2027 292,969 139,671 432,640
2028 300,058 135,643 435,701
2029-2033 1,586,294 606,468 2,192,762
2034-2038 2,019,069 473,497 2,492,566
2039-2043 1,797,910 321,201 2,119,111
2044-2048 1,615,903 189,649 1,805,552
2049-2053 903,528 102,682 1,006,210
2054-2057 891,090 28,098 919,188
$ 2,446,623 10,455,342 $ 12,901,965 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
62 Note 4 – Interfund Transactions
A. Due From/To Other Funds
At June 30, 2023, the City had the following due from/to other funds:
Due To Other Funds
Nonmajor Governmental Funds
Due From Other Funds
General Fund
$ 520,038
The above amounts resulted from deficits in the pooled cash account.
B. Transfers
During the year ended June 30, 2023, the City had the following transfers:
Nonmajor Water Utility Sewer Utility
General Governmental Enterprise Enterprise Internal Service Transfers in Fund Funds Fund Fund Fund Total
General Fund $ 109,000 - $ 440,000 $ 293,500 $ 165,000 $ 1,007,500 $ Capital Projects and Equipment
Capital Projects Fund 2,309,111 117,057 - - 186,388 2,612,556 Nonmajor Governmental Funds - 739,455 - - - 739,455
Total $ 226,057 3,048,566 $ 440,000 $ 293,500 $ 351,388 $ 4,359,511 $ Transfers out
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 $109,000 from Nonmajor Governmental Funds were made to the General Fund for non-capital expenditures. Transfers of $165,000 from Internal Service Funds were made to the General Fund to provide funding for overhead costs.
The General Fund, Nonmajor Governmental Funds and Internal Service Funds transferred $2,309,111 and $117,057 and $186,388, respectively, to the Capital Projects and Equipment Capital Projects Fund to pay for capital projects.
The General Fund transferred a total of $739,455 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, 2023
63 Note 5 – Capital Assets
The summary of changes in governmental activities capital assets for the year ended June 30, 2023 is as follows:
Balance
July 1, 2022 Balance
(As Restated) Additions Deletions Reclassifications June 30, 2023 Capital assets not being depreciated:
Land $ 20,319,847 $ - $ - $ 20,319,847 - $
Intangible asset-land easement 900,000 - - - 900,000
Construction in progress 1,838,004 3,129,054 (1,499,403) - 3,467,655 Total capital assets not being depreciated 23,057,851 3,129,054 (1,499,403) - 24,687,502 Capital assets being depreciated:
Buildings and improvements 16,712,472 - - 16,712,472 -
Machinery and equipment 4,341,079 122,791 - - 4,463,870 Vehicles 3,596,632 353,443 (103,848) - 3,846,227
Infrastructure 92,747,079 - 1,499,403 - 94,246,482
Total capital assets being depreciated 117,397,262 476,234 (103,848) 1,499,403 119,269,051 Less accumulated depreciation for:
Buildings and improvements (8,054,012) (408,887) - (8,462,899) - Machinery and equipment (2,598,153) (240,278) - (2,838,431) - Vehicles (2,024,512) (309,248) 96,710 (2,237,050) -
Infrastructure (42,221,674) (1,880,671) - (44,102,345) - Total accumulated depreciation (54,898,351) (2,839,084) 96,710 (57,640,725) - Total capital assets being depreciated, net 62,498,911 (2,362,850) (7,138) 1,499,403 61,628,326 Intangible assets being amortized:
185,210 178,158 - - 363,368
106,065 4,266 - - 110,331
Right of use - lease vehicles
Right of use - lease equipment
Right of use - subscription asset 949,058 - - - 949,058 Total intangible assets being amortized 1,240,333 182,424 - - 1,422,757 Less accumulated amortization for:
(20,759) (60,633) - - (81,392)
(92,717) (35,783) 56,934 - (71,566)
Right of use - lease vehicles
Right of use - lease equipment
Right of use - subscription asset - (242,963) - - (242,963) Total accumulated amortization (113,476) (339,379) 56,934 - (395,921) Total intangible assets being amortized, net 1,126,857 (156,955) 56,934 - 1,026,836 Total governmental activities $ 86,683,619 $ 609,249 $ 49,796 $ 87,342,664 - $ Depreciation and amortization expense was charged to functions/programs of governmental activities for the year ended June 30, 2023 as follows:
General government $ 342,201
Public safety 439,732
Community development 135,805
Public works 2,006,398
Internal service funds 254,327
Total $ 3,178,463
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
64 Note 5 – Capital Assets (Continued)
The summary of changes in business-type activities capital assets for the year ended June 30, 2023 is as follows:
Balance
July 1, 2022 Balance
(As Restated) Additions Deletions Reclassifications June 30, 2023 Capital assets not being depreciated:
Construction in progress-water 1,498,343 $ 759,934 $ - $ $ - $ 2,258,277 Construction in progress-sewer 348,364 185,625 - - 533,989 Total capital assets not being depreciated 1,846,707 945,559 - - 2,792,266 Capital assets being depreciated:
Buildings and improvements - water 73,284 - - - 73,284
Machinery and equipment - water 660,446 17,585 (33,436) - 644,595 Machinery and equipment - sewer 829,189 - - - 829,189
Vehicles - water 297,295 - - - 297,295
Vehicles - sewer 589,772 - (207,102) - 382,670
Infrastructure - water 34,337,306 - - 34,337,306 -
Infrastructure - sewer 38,622,844 - - 38,622,844 -
Total capital assets being depreciated 75,410,136 17,585 (240,538) - 75,187,183 Less accumulated depreciation for:
Buildings and improvements - water (73,284) - - - (73,284) Machinery and equipment - water (549,372) (10,204) 33,436 - (526,140) Machinery and equipment - sewer (311,125) (19,306) - - (330,431) Vehicles - water (200,693) (23,040) - - (223,733)
Vehicles - sewer (421,553) (2,662) 41,544 - (382,671)
Infrastructure - water (19,667,509) (438,582) - - (20,106,091) Infrastructure - sewer (21,371,444) (949,153) - - (22,320,597) Total accumulated depreciation (42,594,980) (1,442,947) 74,980 - (43,962,947) Total capital assets being depreciated, net 32,815,156 (1,425,362) (165,558) - 31,224,236 Intangible assets being amortized:
Right of use - subscription asset - water 197,421 - - - 197,421 Right of use - subscription asset - sewer 159,816 - - - 159,816 Total intangible assets being amortized 357,237 - - - 357,237 Less accumulated amortization for:
Right of use - subscription asset - water - (38,899) - - (38,899) Right of use - subscription asset - sewer - (34,094) - - (34,094) Total accumulated amortization - (72,993) - - (72,993)
Total intangible assets being amortized, net 357,237 (72,993) - - 284,244 Total business-type activities $ 35,019,100 $ (552,796) $ (165,558) $ - $ 34,300,746 Depreciation expense was charged to functions/programs of business-type activities for the year ended June 30, 2023 as follows:
Water Utility $ 510,725
Sewer Utility 1,005,215
Total $ 1,515,940
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
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, 2023 is as follows:
Balance
July 1, 2022 Balance Due within Due in more
(As Restated) Additions Deletions June 30, 2023 One Year than One Year Private Placement
2009 Lease Revenue Bonds 735,000 $ - $ (420,000) $ 315,000 $ 315,000 $ - $ Direct Borrowing
Municipal Finance Corporation 300,555 - (81,592) 218,963 85,801 133,162 Lease Liabilities
De Lage Landen 73,067 - (33,769) 39,298 36,252 3,046
Enterprise Fleet 164,450 178,158 (54,795) 287,813 80,586 207,227 Subscriptions
Subscription liabilities 949,058 - (254,613) 694,445 238,590 455,855 Claims payable 263,169 - (88,123) 175,046 34,320 140,726 Compensated absences 1,333,113 796,530 (734,220) 1,395,423 362,294 1,033,129 Total 3,818,412 $ 974,688 $ (1,667,112) $ 3,125,988 $ 1,152,843 $ 1,973,145 $ Classification
The General Fund has been used to liquidate the majority of the liability for compensated absences. 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, 2023 was $315,000.
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
2024 315,000 $ 5,844 $ 320,844 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
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, 2023 was $218,963.
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
2024 85,801 $ 6,704 $ 92,505 $
2025 88,025 3,786 91,811
2026 45,137 767 45,904
Total 218,963 $ 11,257 $ 230,220 $
De Lage Landen 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 $4,612. Lease payments are due on the 1st of each month. Interest on the copy machines accrues at 1.5% annum. In the event of default, the lease shall be deemed terminated. Outstanding lease liabilities at June 30, 2023 was in the amount of $39,298.
Future lease payments under the lease payable are as follows:
Year Ending
June 30, Principal Interest Total
2024 36,252 $ 341 $ 36,593 $
2025 3,046 4 3,050
Total 39,298 $ 345 $ 39,643 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
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. As of June 30, 2023 the City leased a total of 6 vehicles with terms of 48-month for a total monthly lease payment in the amount of $7,030. Lease payments are due on the 1st of each month. Interest accrues at 1.5% annum. In the event of default, the lease shall be deemed terminated. Outstanding lease liabilities at June 30, 2023 was in the amount of $287,813.
Future lease payments under the lease payable are as follows:
Year Ending
June 30, Principal Interest Total
2024 80,586 $ 3,765 $ 84,351 $
2025 81,803 2,548 84,351
2026 83,039 1,312 84,351
2027 42,385 190 42,575
Total 287,813 $ 7,815 $ 295,628 $
Subscription Liabilities
The City entered into subscription agreements with various vendors for software. The agreements expire from July 19, 2025 to February 8, 2027 with interest rates ranging 2.35 percent to 2.80 percent. Outstanding subscription liabilities at June 30, 2023 was in the amount of $694,445.
The future subscription payments are as follows:
Year Ending
June 30, Principal Interest Total
2024 238,590 $ 10,463 $ 249,053 $
2025 244,413 11,326 255,739
2026 104,397 5,362 109,759
2027 107,045 2,714 109,759
Total 694,445 $ 29,865 $ 724,310 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
68 Note 6 – Long-Term Liabilities (Continued)
B. Business-Type Activities
Summary of changes in long-term liabilities for business-type activities for the year ended June 30, 2023 is as follows:
Balance
July 1, 2022 Balance Due within Due in more
(As Restated) Additions Deletions June 30, 2023 One Year than One Year Private Placement
2011 Sewer Revenue Refunding Bonds 1,580,000 $ - $ (195,000) $ 1,385,000 $ 205,000 $ 1,180,000 $ Direct Borrowing
Sewer Capital Improvement Project #1 1,478,277 - (131,345) 1,346,932 134,760 1,212,172 Sewer Capital Improvement Project #2 1,088,139 - (78,432) 1,009,707 80,471 929,236 West Orange County Water Board Loan 485,509 - (84,436) 401,073 84,436 316,637 Subscriptions
Subscription liabilities - water 197,421 - (46,235) 151,186 42,639 108,547 Subscription liabilities - sewer 159,816 - (33,388) 126,428 30,430 95,998 Compensated absences 115,253 58,150 (59,529) 113,874 27,634 86,240 Total 5,104,415 $ 58,150 $ (628,365) $ 4,534,200 $ 605,370 $ 3,928,830 $ Classification
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, 2023 was $1,385,000. 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
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 245,000 21,360 266,360
2029 260,000 9,360 269,360
Total 1,385,000 $ 225,360 $ 1,610,360 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
69 Note 6 – Long-Term Liabilities (Continued)
B. Business-Type Activities (Continued)
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, 2023, 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, 2023 was $1,346,932.
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
2024 134,760 $ 35,020 $ 169,780 $
2025 138,264 31,516 169,780
2026 141,859 27,921 169,780
2027 145,547 24,233 169,780
2028 149,331 20,449 169,780
2029-2032 637,171 41,949 679,120
Total 1,346,932 $ 181,088 $ 1,528,020 $
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, 2023, 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, 2023 was $1,009,707.
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
2024 80,471 $ 26,252 $ 106,723 $
2025 82,563 24,160 106,723
2026 84,709 22,014 106,723
2027 86,912 19,811 106,723
2028 89,171 17,552 106,723
2029-2033 481,863 51,752 533,615
2034 104,018 2,705 106,723
Total 1,009,707 $ 164,246 $ 1,173,953 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
70 Note 6 – Long-Term Liabilities (Continued)
B. Business-Type Activities (Continued)
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, 2023 was $401,073.
The annual debt service requirements are as follows:
Year ending
June 30, Principal Interest Total
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 401,073 $ 30,472 $ 431,545 $
Subscription Liabilities
The City entered into subscription agreements with various vendors for software. The agreements expire from July 19, 2025 to February 8, 2027 with interest rates ranging 2.35 percent to 2.80 percent. Outstanding subscription liabilities at June 30, 2023 was in the amount of $277,614.
The future subscription payments are as follows:
Year Ending
June 30, Principal Interest Total
2024 73,069 $ 7,103 $ 80,172 $
2025 74,952 5,220 80,172
2026 63,985 3,287 67,272
2027 65,608 1,664 67,272
Total 277,614 $ 17,274 $ 294,888 $
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
71 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, 2023, was $2,515,000.
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, 2023, was $6,735,000.
Note 8 – Risk Management and Self Insurance Program
A. Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City of Seal Beach is a member of the California Joint Powers Insurance Authority (the “CJPIA”). The CJPIA 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 CJPIA 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. Primary 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, 2023
72 Note 8 – Risk Management and Self Insurance Program (Continued) B. Primary 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 CJPIA’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 2022-23 the CJPIA’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 CJPIA. 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 CJPIA has an aggregate limit of $20 million.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
73 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 CJPIA. This insurance protection is underwritten by several insurance companies. The City’s property is currently insured according to a schedule of covered property submitted by the City to the CJPIA. The City’s property currently has all-risk property insurance protection in the amount of $61,247,578. 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 purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the CJPIA. The City’s property currently has earthquake protection in the amount of $60,313,603. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.
Crime Insurance
The City purchases crime insurance coverage in the amount of $3,000,000 with a $2,500 deductible. The fidelity coverage is provided through the CJPIA.
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 2022-23.
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, 2023, the amount of these liabilities was $175,046.
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 2020-2021 301,413 $ - $ (4,118) $ 297,295 $
2021-2022 297,295 - (34,126) 263,169
2022-2023 263,169 - (88,123) 175,046
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
74 Note 9 – Defined Benefit Pension Plans
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, 2021, the following employees were covered by the benefit terms:
Misc Misc PEPRA Safety Safety Fire
Safety Police
PEPRA
Other Safety
PEPRA
Active employees 32 25 31 - 10 1
Transferred and terminated employees 38 7 6 - - -
Separated 28 2 3 - 2 -
Retired Employees and Beneficiaries 148 1 97 37 - -
Total 246 35 137 37 12 1
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.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
75 Note 9 – Defined Benefit Pension Plans (Continued)
A. General Information about the Pension Plan (Continued) Benefit Provided (Continued)
Following are the benefit provisions for each plan:
Miscellaneous Rate PEPRA Miscellaneous Safety Rate PEPRA Safety Plan* Rate Plan Plan* Rate Plan
Hire date Prior to January 1, 2013 Prior to January 1, 2013 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 6 percent per year, plus a lump sum in the amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death.
Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated survivor(s), or to the retiree's estate.
Benefit terms provide for annual cost-of-living adjustments to each employee’s retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by 2 percent.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
76 Note 9 – Defined Benefit Pension Plans (Continued)
A. General Information about the Pension Plan (Continued) 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, 2022 (the measurement date), the contribution rates were as follows:
Miscellaneous Rate PEPRA Miscellaneous Safety Rate PEPRA Safety Plan* Rate Plan Plan* Rate Plan
Required employee contribution
rates 7.000% 7.250% 8.990% 13.750%
Required employer contribution
rates 11.610% 7.760% 25.640% 13.660%
* 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, 2021 valuation was rolled forward to determine June 30, 2022 total pension liability based on the following actuarial methods and assumptions:
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.30%
Salary Increases
Mortality Rate Table1
Post Retirement Benefit Increase Contract COLA up to 2.3% until Purchasing Power Protection Allowance Floor on Derived using CalPERS’ Membership Data for all Funds
Entry age normal in accordance with requirements of GASB 68 Varies by Entry Age and Service
1 The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
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 (Continued)
Change of Assumption
Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial 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. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 basis points. The expected real rates of return by asset class are as follows:
Assumed Asset
Asset Class1 Allocation Real Return1,2
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.80%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
100.00%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.
Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
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 6.90%, 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 (5.90%) or 1 percentage-point higher (7.90%) than the current rate:
Discount Rate Current Discount Discount Rate
- 1% (5.90%) Rate (6.90%) + 1% (7.90%)
Miscellaneous $ 16,817,024 24,362,134 $ 10,609,271 $
Safety $ 32,488,072 46,903,345 $ 20,706,842 $
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: 6/30/21 (Valuation date) 52,586,741 $ 43,233,246 $ 9,353,495 $ Balance at: 6/30/22 (Measurement date) 55,349,318 38,532,294 16,817,024 Net Changes during 2021-2022 2,762,577 (4,700,952) 7,463,529 Safety
Balance at: 6/30/21 (Valuation date) 98,571,877 $ 80,045,511 $ 18,526,366 $ Balance at: 6/30/22 (Measurement date) 104,384,046 71,895,974 32,488,072 Net Changes during 2021-2022 5,812,169 (8,149,537) 13,961,706 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, 2021). 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, 2023
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, 2022). 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, 2022 less the sum of all additional side fund (or unfunded liability) contributions made by all employers during the measurement period (2021-2022). (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, 2021 0.17294% 0.97569%
June 30, 2022 0.14559% 0.28126%
Change - Increase (Decrease) -0.02735% -0.69443%
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 2021-2022 measurement period is 3.7 years, which was obtained by dividing the total service years of 574,665 (the sum of remaining service lifetimes of the active employees) by 153,587 (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, 2023
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) For the year ended June 30, 2023, the City recognized pension credit for the miscellaneous and safety plans in the amounts of ($1,884,698) and ($293,821), respectively. At June 30, 2023, 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
Contribution after measurement date 1,731,376 $ - $ 3,915,610 $ - $ Changes of assumptions 1,723,253 - 3,275,780 -
Difference between expected and actual
experience 337,718 (226,189) 1,344,561 (352,794)
Difference between projected and actual
earning on pension plan investments 3,080,430 - 5,130,320 - Differences in proportions 64,985 (1,018,642) 232,575 (73,031) Difference between City contributions and
proportionate share of contributions - (472,882) - (1,449,355) Total 6,937,762 $ (1,717,713) $ 13,898,846 $ (1,875,180) $ Miscellaneous Safety
Deferred outflows of resources related to pensions resulting from the City’s contributions made subsequent to the measurement date in the amount of $1,731,376 and $3,915,610 for the miscellaneous and safety plans, respectively, will be recognized as a reduction of the collective net pension liability in the year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:
Measurement Period
Ended June 30, Miscellaneous Safety
2023 719,524 $ 2,242,390 $
2024 579,236 1,745,752
2025 305,818 990,352
2026 1,884,095 3,129,562
2027 - -
Thereafter - -
$ 8,108,056 3,488,673 $
Deferred Outflows/ (Inflows) of Resources
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
81 Note 10 – Other Postemployment Benefits (“OPEB”) Plan 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 ($151 per month in 2023) if they retire at Age 50 and above. For legacy hires, reimbursements are generally subject to a maximum, which varies by bargaining group and service years. Dependents are eligible to enroll subject to service year requirements.
Employees Covered by Benefit Term
Active employees 91
Active employees waiving coverage 10
Inactive employees, spouses, or beneficiaries
currently receiving benefit payments 79
Total 180
Contributions
The City makes contributions based on an actuarially determined rate.
B. Net OPEB Liability
The City's net OPEB liability is based on a roll-forward of the June 30, 2021 valuation with liabilities and assets measured as of June 30, 2022.
Actuarial Assumptions
The total OPEB liability in the June 30, 2022 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 2.30%
Salary increases
Investment rate of return 6.00%
Healthcare cost trend rates Based on 2021 Getzen model that reflects actual premium increases from to 2023 followed by 5.5% (non-Medicare) / 5.3% (Medicare) in 2022, decreasing gradually to an ultimate rate of 4.04% by 2075.
Mortality rate
Entry age normal level percentage of salary
Base salary increases in year one: 2.80%
Base salary increases in subsequent years: 2.80%
Additional merit-based increases based on CalPERS.
Derived using CalPERS’ Membership Data for all Funds.
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
82 Note 10 – Other Postemployment Benefits (“OPEB”) Plan (Continued) B. Net OPEB Liability (Continued)
Discount Rate
The discount rate used to measure the total OPEB liability was 6.00%. 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.
Expected Long-Term Rates of Return
Current Target Projected Real
Asset Class Allocation Rates of Return 1
Global Equity 49.0% 4.50%
Global Fixed Income 23.0% 1.40%
Inflation Sensitive 20.0% 3.70%
Real Estate 5.0% 0.50%
Infrastructure and Forestland 3.0% 1.10%
100.0%
1 An expected inflation of 2.3% used for this period
C. Changes in the Net OPEB Liability
Total OPEB Fiduciary Net Net OPEB
Liability Position Liability
Balances as of June 30, 2021 12,510,371 $ 7,958,212 $ 4,552,159 $ Changes during the measurement period:
Service cost 250,120 - 250,120
Interest 805,675 - 805,675
Differences between expected and actual experience (140,904) - (140,904) Change of assumptions 738,472 - 738,472
Contributions:
Employer - 985,606 (985,606)
Employee - - -
Net investment income - (1,069,356) 1,069,356
Benefit payments, including refunds of employee
Contributions (742,658) (742,658) -
Administrative expenses - (2,016) 2,016
Net changes during measurement period 2021-2022 910,705 (828,424) 1,739,129 Balances as of June 30, 2022 (Measurement Date) 13,421,076 $ 7,129,788 $ 6,291,288 $ Increase (Decrease)
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
83 Note 10 – Other Postemployment Benefits (“OPEB”) Plan (Continued) C. Changes in the Net OPEB Liability (Continued)
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 (5.00%) or one percentage point higher (7.00%) follows:
Discount Rate Current Discount Discount Rate
- 1% (5.00%) Rate (6.00%) + 1% (7.00%)
$ 6,291,288 7,988,688 $ 4,877,267 $
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 or one percentage point higher than current healthcare cost trend rates follows:
Healthcare
1% Decrease Cost Trend Rate 1% Increase
$ 6,291,288 4,841,501 $ 8,058,302 $
Net OPEB Liability/(Asset)
D. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended June 30, 2023, the City recognized an OPEB expense of $650,906. At June 30, 2023, 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 981,209 $ - $
Difference between expected and actual experience 714,130 (109,015) Changes of assumptions 87,285 (190,138)
Difference between projected and actual earning on
OPEB plan investments 590,231 -
Total 2,372,855 $ (299,153) $
Deferred outflows of resources related to OPEB resulting from City’s contributions subsequent to the measurement date in the amount of $981,209 will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
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 (Continued)
Measurement
Period Ending
June 30,
Deferred Outflows/
(Inflows) of
Resources
2023 126,505 $
2024 164,949
2025 163,209
2026 449,640
2027 208,320
Thereafter (20,130)
$ 1,092,493
Note 11 – Net Investment in Capital Assets
Net investment in capital assets at June 30, 2023 is reported as follows:
Governmental Business-Type
Activities Activities Water Utility Sewer Utility
Total capital assets, net 87,342,664 $ 34,300,746 $ 16,840,031 $ 17,460,715 $ Deferred loss on refunding debt - 72,422 - 72,422
Other capital-related liabilities (100,308) (23,964) (23,964) - Capital related debt (1,555,519) (4,420,326) (552,259) (3,868,067) Net investment in capital assets 85,686,837 $ 29,928,878 $ 16,263,808 $ 13,665,070 $ Enterprise Fund
City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
85 Note 12 – Classification of Fund Balances
At June 30, 2023, fund balances are classified in the governmental funds as follows:
Capital Projects
and Equipment Nonmajor
General Capital Projects Governmental
Fund Fund Funds Total
Nonspendable:
Prepaid items 42,705 $ - $ - $ 42,705 $
Restricted:
Waste Management 50,110 - - 50,110
Parking In-lieu 197,497 - - 197,497
I-405 Corridor Improvements 1,687,520 - - 1,687,520
Street Lighting - - 53 53
Supplemental Law Enforcement - - 134,022 134,022
Detention Center - - 28,341 28,341
Air Quality Improvements - - 17,117 17,117
Parks Improvement - - 54,102 54,102
Traffic Impact - - 198,690 198,690
State Gasoline Tax - - 1,688,048 1,688,048
Measure M2 - - 1,558,030 1,558,030
Landscape District - - 689,113 689,113
Heron Pointe - - 69,408 69,408
Pacific Gateway - - 150,455 150,455
Seal Beach Cable - - 544,849 544,849
SB 1 - - 1,583,608 1,583,608
City Debt Service - - 761,441 761,441
Total restricted 1,935,127 - 7,477,277 9,412,404
Committed:
College Park East 477,000 - - 477,000
Swimming Pool 4,395,824 - - 4,395,824
Fiscal Policy 10,079,976 - - 10,079,976
Economic Contingency 1,750,000 - - 1,750,000
Capital Project Improvement 7,753,008 - - 7,753,008
Revitalization 866,312 - - 866,312
Total committed 25,322,120 - - 25,322,120
Assigned:
Community Development 1,383,978 - - 1,383,978
Pier Restaurant 1,395,638 - - 1,395,638
Compensated Absences 1,241,001 - - 1,241,001
Encumbrance for public works 318,767 - - 318,767
Encumbrance for police 122,640 - - 122,640
Encumbrance for community development 51,920 - - 51,920 Other 583,511 - - 583,511
Total assigned 5,097,455 - - 5,097,455
Unassigned (deficit) 139,981 4,927,044 (832,141) 4,234,884 Total fund balances $ 139,981 37,324,451 $ 6,645,136 $ 44,109,568 $ City of Seal Beach
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2023
86 Note 13 – Commitments and Contingencies
A. Commitments
The City had no material commitments as of June 30, 2023.
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 14 – Individual Fund Disclosure
Funds with deficit fund balances at June 30, 2023 are as follows:
Deficit
Community Development Block Grant Special Revenue Fund (59,687) $ Police Grants Special Revenue Fund (76,072)
Citywide Grants Special Revenue Fund (696,382)
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, 2023:
in Excess of
Appropriations Expenditures Appropriations
Nonmajor Governmental Funds:
Street Lighting Special Revenue Fund 204,500 $ 218,260 $ (13,760) $ Air Quality Improvement
Special Revenue Fund 50,000 63,834 (13,834)
Note 15 – Restatement of Beginning Net Position
Governmental Business Type
Activities Activities Total
Net position as perviously reported at July 1, 2022 83,195,525 $ 44,522,748 $ 127,718,273 $ Subscription assets 949,058 357,237 1,306,295
Subscription liabilities (949,058) (357,237) (1,306,295) Net position as restated at July 1, 2022 83,195,525 $ 44,522,748 $ 127,718,273 $
REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED)
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88 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes 32,556,100 $ 32,956,100 $ 35,686,493 $ 2,730,393 $ Licenses and permits 812,100 812,100 1,027,232 215,132
Intergovernmental 132,400 132,400 370,982 238,582
Charges for services 4,848,000 5,548,000 5,712,979 164,979 Use of money and property 966,900 966,900 694,426 (272,474) Fines and forfeitures 1,917,500 1,917,500 1,435,250 (482,250) Contributions 26,000 26,000 37,023 11,023
Miscellaneous 274,500 274,500 1,291,231 1,016,731
Total revenues 42,633,500 41,533,500 46,255,616 3,622,116 Expenditures:
Current:
General government 7,703,000 7,882,178 7,604,654 277,524 Public safety 24,178,500 24,178,500 24,003,022 175,478
Community development 1,980,000 2,023,200 1,587,435 435,765 Community services 1,419,300 1,419,300 1,219,014 200,286 Public works 6,934,900 7,634,900 6,273,410 1,361,490
Capital outlay 1,165,000 1,165,000 169,269 995,731
Debt service:
Principal retirement 82,300 82,300 369,974 (287,674)
Interest and fiscal charges 9,500 9,500 12,227 (2,727)
Total expenditures 44,394,878 43,472,500 41,239,005 3,155,873 Revenues over (under) expenditures (1,761,378) (1,939,000) 5,016,611 6,777,989 Other Financing Sources (Uses):
Transfers in 924,700 924,700 1,007,500 82,800
Transfers out (2,963,500) (4,651,725) (3,048,566) 1,603,159 Total other financing sources (uses) (3,727,025) (2,038,800) (2,041,066) 1,685,959 Net change in fund balance $ (5,488,403) (3,977,800) $ 2,975,545 8,463,948 $ Fund Balance:
Beginning of year 34,348,906
End of year $ 37,324,451
City of Seal Beach
Required Supplementary Information (Unaudited)
For the Year Ended June 30, 2023
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, 2023
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 2022-2023, 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, 2022 June 30, 2021 June 30, 2020 June 30, 2019 City's Proportion of the Net Pension Liability 0.14559% 0.17295% 0.13777% 0.12949% City's Proportionate Share of the Net Pension Liability 16,817,024 $ 9,353,495 $ 14,411,297 $ 13,320,233 $ City's Covered Payroll 5,536,109 $ 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 303.77% 173.60% 274.83% 282.09% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 69.62% 82.21% 71.73% 73.26% Measurement Date June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 City's Proportion of the Net Pension Liability 0.28126% 1.09047% 0.26123% 0.25611% City's Proportionate Share of the Net Pension Liability 32,488,072 $ 18,526,366 $ 28,423,181 $ 26,243,693 $ City's Covered Payroll 5,920,369 $ 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 548.75% 321.53% 506.86% 510.85% Plan's Proportionate Share of the Fiduciary Net Position as a Percentage of the Total Pension Liability 68.88% 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, 2023
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, 2023
Last Ten Fiscal Years
93 Fiscal year 2022-232 2021-22 2020-21 2019-20 2018-19 Actuarially Determined Contribution 1,731,376 $ 1,575,633 $ 1,443,709 $ 1,275,186 $ 1,076,211 $ Contribution in Relation to the
Actuarially Determined Contribution (1,731,376) (1,575,633) (1,443,709) (1,275,186) (1,076,211) Contribution Deficiency (Excess) - $ - $ - $ - $ - $
Covered Payroll2 $ 5,536,109 5,691,120 $ 5,387,941 $ 5,243,738 $ 4,721,968 $ Contributions as a Percentage
of Covered Payroll 30.42% 28.46% 26.80% 24.32% 22.79%
Fiscal year 2022-232 2021-22 2020-21 2019-20 2018-19
Actuarially Determined Contribution 3,915,610 $ 3,642,820 $ 3,231,920 $ 2,882,385 $ 2,509,250 $ Contribution in Relation to the
Actuarially Determined Contribution (3,915,610) (3,642,820) (3,231,920) (2,882,385) (2,509,250) Contribution Deficiency (Excess) - $ - $ - $ - $ - $
Covered Payroll2 $ 5,920,369 6,086,139 $ 5,761,916 $ 5,607,704 $ 5,137,216 $ Contributions as a Percentage
of Covered Payroll 64.34% 61.53% 56.09% 51.40% 48.84%
City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of Contributions - Pensions
For the Year Ended June 30, 2023
Last Ten Fiscal Years
California Public Employees' Retirement System ("CalPERS") Miscellaneous Plan California Public Employees' Retirement System ("CalPERS") Safety Plan Changes of Assumptions: In 2022, the acounting discount rate reduced from 7.15 percent to 6.90 percent. 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 2.80 percent payroll assumption for fiscal year 2022-23.
Notes to Schedule:
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 2022, the acounting discount rate reduced from 7.15 percent to 6.90 percent. 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, 2023
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, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Total OPEB liability
Service cost 250,120 $ 269,955 $ 253,910 $ 262,452 $ 275,665 $ Interest 805,675 771,486 751,631 736,104 786,251
Differences between expected and actual experience (140,904) 122,199 (109,256) (109,256) - Changes of assumption 738,472 113,616 (49,484) (49,484) (413,262) Benefit payments (742,658) (720,545) (516,782) (419,956) (406,031) Implicit rate subsidy fulfilled - - - (136,833) (123,043) Net change in total OPEB liability 556,711 910,705 330,019 283,027 119,580 Total OPEB liability, beginning 11,953,660 12,510,371 11,623,641 11,340,614 11,221,034 Total OPEB liability, ending (a) $ 12,510,371 13,421,076 $ 11,953,660 $ 11,623,641 $ 11,340,614 $ OPEB fiduciary net position
Contributions:
Employer - City's contribution 985,606 $ 963,042 $ 588,400 $ 710,200 $ 720,871 $ Employer - Implicit subsidy - - - 136,833 123,043
Net investment income (1,069,356) 1,663,551 360,219 324,350 346,820 Other additions - - - - 3,763
Benefit payments (742,658) (720,545) (516,782) (419,956) (406,031) Implicit rate subsidy fulfilled - - - (136,833) (123,043) Administrative expense (2,016) (2,291) (2,768) (1,095) (2,323) Other deductions - - - - (5,765)
Net change in plan fiduciary net position 1,903,757 (828,424) 429,069 613,499 657,335 Plan fiduciary net position, beginning 6,054,455 7,958,212 5,625,386 5,011,887 4,354,552 Plan fiduciary net position, ending (b) 7,958,212 7,129,788 6,054,455 5,625,386 5,011,887 Plan net OPEB liability - ending (a) - (b) $ 4,552,159 6,291,288 $ 5,899,205 $ 5,998,255 $ 6,328,727 $ Plan's fiduciary net position as a percentage
of the total OPEB liability 53.12% 63.61% 50.65% 48.40% 44.19% Covered payroll $ 10,959,848 11,261,244 $ 10,666,519 $ 9,923,172 $ 9,518,945 $ Net OPEB liability as a percentage of covered payroll 55.87% 41.53% 55.31% 60.45% 66.49% 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, 2023
Last Ten Fiscal Years
Other Postemployment Benefits ("OPEB")
96 Measurement period June 30, 20171
Total OPEB liability
Service cost $ 267,961
Interest 752,721
Differences between expected and actual experience -
Changes of assumption -
Benefit payments (454,685)
Implicit rate subsidy fulfilled (114,993)
Net change in total OPEB liability 451,004
Total OPEB liability, beginning 10,770,030
Total OPEB liability, ending (a) $ 11,221,034
OPEB fiduciary net position
Contributions:
Employer - City's contribution $ 567,185
Employer - Implicit subsidy 114,993
Net investment income 411,482
Other additions -
Benefit payments (454,685)
Implicit rate subsidy fulfilled (114,993)
Administrative expense (1,995)
Other deductions -
Net change in plan fiduciary net position 521,987
Plan fiduciary net position, beginning 3,832,565
Plan fiduciary net position, ending (b) 4,354,552
Plan net OPEB liability - ending (a) - (b) $ 6,866,482
Plan's fiduciary net position as a percentage
of the total OPEB liability 38.81%
Covered payroll $ 8,807,230
Net OPEB liability as a percentage of covered payroll 77.96% Other Postemployment Benefits ("OPEB")
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 (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
97 Fiscal year end 2022-232 3 2021-22 2020-21 2019-20 2018-19 2017-18 Actuarially determined contribution2 $ 679,537 810,473 $ 794,339 $ 763,351 $ 755,936 $ 833,241 $ Contribution in relation to the actuarially
determined contribution2 (990,171) (981,209) (963,041) (867,112) (847,033) (843,914) Contribution deficiency/(excess) (170,736) $ (310,634) $ (168,702) $ (103,761) $ (91,097) $ (10,673) $ Covered-employee payroll3 $ 11,261,244 11,576,559 $ 10,959,848 $ 10,666,519 $ 9,923,172 $ 9,518,945 $ Contributions as a percentage of
covered-employee payroll 8.48% 8.79% 8.79% 8.13% 8.54% 8.87% Notes to Schedule:
Valuation date:
Actuarial cost method:
Inflation:
Assumed payroll growth:
Healthcare cost trend:
Rate of return on assets:
Mortality:
2.80% year one and thereafter
5.50% (non-Medicare) / 5.30% (Medicare), trending down to 4.04% by 2075
6.00%
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, 2023
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, 2023.
Methods and assumptions used to determine contribution rates:
3 Includes one year’s payroll growth using 2.80 percent payroll assumption from fiscal year 2022-23.
Entry age normal, level percent of pay
2.30% per year
98 Fiscal year end 2016-171
Actuarially determined contribution2 $ 812,317
Contribution in relation to the actuarially
determined contribution2 (682,178)
Contribution deficiency/(excess) $ 130,139
Covered-employee payroll3 $ 8,807,230
Contributions as a percentage of
covered-employee payroll 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
2.80% year one and thereafter
5.50% (non-Medicare) / 5.30% (Medicare), trending down to 4.04% by 2075
6.00%
Methods and assumptions used to determine contribution rates:
Entry age normal, level percent of pay
2.30% per year
Other Postemployment Benefits ("OPEB")
1 Historical information is presented only for measurement periods for which GASB 75 is implemented.
June 30, 2021
City of Seal Beach
Required Supplementary Information (Unaudited)
Schedule of Contributions - Other Postemployment Benefits (Continued) For the Year Ended June 30, 2023
Last Ten Fiscal Years
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100
SUPPLEMENTARY INFORMATION
101
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102
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Expenditures:
Current:
Public works - $ - $ 66,800 $ (66,800) $
Capital outlay 2,620,500 4,308,725 2,405,775 1,902,950
Total expenditures 4,308,725 2,620,500 2,472,575 1,836,150 Other Financing Sources:
Transfers in 2,620,500 4,308,725 2,612,556 (1,696,169)
Net change in fund balance $ - - $ 139,981 139,981 $
Fund Balance (Deficit):
Beginning of year -
End of year $ 139,981
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, 2023
103
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104
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).
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. 105
Supplemental
Street Law Detention Police Asset
Lighting Enforcement Center Forfeiture
ASSETS
Cash and investments 17,433 $ 124,441 $ 28,341 $ 58,173 $ Receivables:
Accounts - - - 16,671
Taxes 1,305 - - -
Interest - - - -
Due from other governments - - - -
Prepaid items - 19,284 - -
Restricted assets:
Cash and investments with fiscal agents - - - -
Total assets $ 143,725 18,738 $ 28,341 $ 74,844 $
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 18,685 $ 8,669 $ - $ - $
Accrued liabilities - 1,034 - -
Due to other funds - - - 71,626
Retentions payable - - - -
Total liabilities 9,703 18,685 - 71,626
Deferred Inflows of Resources:
Unavailable revenues - - - -
Total deferred inflows of resources - - - -
Fund Balances:
Restricted 53 134,022 28,341 3,218
Unassigned (deficit) - - - -
Total fund balances 134,022 53 28,341 3,218
Total liabilities, deferred inflow of resources,
and fund balances $ 143,725 18,738 $ 28,341 $ 74,844 $
(Continued)
Special Revenue
City of Seal Beach
Combining Balance Sheet
June 30, 2023
Nonmajor Governmental Funds
106
Air Quality Park Traffic State
Improvement Improvement Impact Gasoline Tax
ASSETS
Cash and investments 19,820 $ 54,102 $ 195,472 $ 1,777,521 $ Receivables:
Accounts 8,286 - - -
Taxes - - - 56,383
Interest - - - -
Due from other governments - - - -
Prepaid items - - - -
Restricted assets:
Cash and investments with fiscal agents - - - -
Total assets $ 54,102 28,106 $ 195,472 $ 1,833,904 $
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 10,989 $ - $ - $ 145,856 $
Accrued liabilities - - - -
Due to other funds - - - -
Retentions payable - - - -
Total liabilities - 10,989 - 145,856
Deferred Inflows of Resources:
Unavailable revenues - - - -
Total deferred inflows of resources - - - -
Fund Balances:
Restricted 17,117 54,102 195,472 1,688,048
Unassigned (deficit) - - - -
Total fund balances 54,102 17,117 195,472 1,688,048
Total liabilities, deferred inflow of resources,
and fund balances $ 54,102 28,106 $ 195,472 $ 1,833,904 $ (Continued)
Special Revenue
City of Seal Beach
Combining Balance Sheet (Continued)
June 30, 2023
Nonmajor Governmental Funds
107
Community
Development Police Landscape
Measure M2 Block Grant Grants District
ASSETS
Cash and investments 1,488,962 $ - $ 147,760 $ 700,051 $ Receivables:
Accounts 91,204 122,062 89,250 -
Taxes - - - -
Interest - - - -
Due from other governments - - - -
Prepaid items - - - -
Restricted assets:
Cash and investments with fiscal agents - - - -
Total assets $ 122,062 1,580,166 $ 237,010 $ 700,051 $
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 12,533 $ 114,688 $ 67,011 10,605 $
Accrued liabilities - - 8,798 333
Due to other funds - 6,030 161,200 -
Retentions payable 9,603 - - -
Total liabilities 120,718 22,136 237,009 10,938
Deferred Inflows of Resources:
Unavailable revenues - 61,031 76,073 -
Total deferred inflows of resources 61,031 - 76,073 -
Fund Balances:
Restricted 1,558,030 - - 689,113
Unassigned (deficit) - (59,687) (76,072) -
Total fund balances (59,687) 1,558,030 (76,072) 689,113 Total liabilities, deferred inflow of resources,
and fund balances $ 122,062 1,580,166 $ 237,010 $ 700,051 $ (Continued)
Special Revenue
Nonmajor Governmental Funds
Combining Balance Sheet (Continued)
June 30, 2023
City of Seal Beach
108
Pacific Seal Beach
Heron Pointe Gateway Cable SB 1
ASSETS
Cash and investments 69,424 $ 155,053 $ 518,066 $ 1,533,051 $ Receivables:
Accounts - - 25,669 -
Taxes - - - 50,557
Interest - - 1,114 -
Due from other governments - - - -
Prepaid items - - - -
Restricted assets:
Cash and investments with fiscal agents - - - -
Total assets $ 155,053 69,424 $ 544,849 $ 1,583,608 $
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 16 $ 4,272 $ - $ - $
Accrued liabilities - 326 - -
Due to other funds - - - -
Retentions payable - - - -
Total liabilities 4,598 16 - -
Deferred Inflows of Resources:
Unavailable revenues - - - -
Total deferred inflows of resources - - - -
Fund Balances:
Restricted 69,408 150,455 544,849 1,583,608
Unassigned (deficit) - - - -
Total fund balances 150,455 69,408 544,849 1,583,608
Total liabilities, deferred inflow of resources,
and fund balances $ 155,053 69,424 $ 544,849 $ 1,583,608 $ (Continued)
Special Revenue
City of Seal Beach
Combining Balance Sheet (Continued)
June 30, 2023
Nonmajor Governmental Funds
109
Special Revenue Debt Service
Total Other
Citywide City Debt Governmental
Grants Service Funds
ASSETS
Cash and investments $ 125,933 - $ 7,013,603 $
Receivables:
Accounts - 319,493 672,635
Taxes - - 108,245
Interest - - 1,114
Due from other governments 562,418 - 562,418
Prepaid items - - 19,284
Restricted assets:
Cash and investments with fiscal agents - 635,508 635,508 Total assets $ 761,441 881,911 $ 9,012,807 $
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts payable 471,148 $ - $ 864,472 $
Accrued liabilities - - 10,491
Due to other funds 281,182 - 520,038
Retentions payable 21,279 - 30,882
Total liabilities - 773,609 1,425,883
Deferred Inflows of Resources:
Unavailable revenues 804,684 - 941,788
Total deferred inflows of resources - 804,684 941,788
Fund Balances:
Restricted 761,441 - 7,477,277
Unassigned (deficit) (696,382) - (832,141)
Total fund balances 761,441 (696,382) 6,645,136
Total liabilities, deferred inflow of resources,
and fund balances $ 761,441 881,911 $ 9,012,807 $
(Concluded)
City of Seal Beach
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2023
110
Supplemental
Street Law Detention Police Asset
Lighting Enforcement Center Forfeiture
Revenues:
Taxes 140,344 $ - $ - $ - $
Intergovernmental - 199,877 - 192,435
Charges for services - - - -
Use of money and property - 2,425 - 80
Contributions - - - -
Total revenues 202,302 140,344 - 192,515
Expenditures:
Current:
General government - - - -
Public safety - 176,887 - -
Community development - - - -
Public works 218,260 - - -
Capital outlay - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 176,887 218,260 - -
Revenues over (under) expenditures 25,415 (77,916) - 192,515 Other Financing Sources (Uses):
Transfers in 94,322 - - 52,948
Transfers out - - - -
Total other financing sources (uses) - 94,322 - 52,948
Net change in fund balances 25,415 16,406 - 245,463
Fund Balance (Deficit):
Beginning of year (16,353) 108,607 28,341 (242,245)
End of year $ 134,022 53 $ 28,341 $ 3,218 $
(Continued)
Special Revenue
For the Year Ended June 30, 2023
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances City of Seal Beach
Nonmajor Governmental Funds
111
Air Quality Park Traffic State
Improvement Improvement Impact Gasoline Tax
Revenues:
Taxes - $ - $ - $ 646,195 $
Intergovernmental 32,798 - - -
Charges for services - - - -
Use of money and property 641 888 3,125 25,956
Contributions - - - -
Total revenues 888 33,439 3,125 672,151
Expenditures:
Current:
General government - - - -
Public safety - - - -
Community development - - - -
Public works 63,834 - - 3,328
Capital outlay - - - 222,391
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Total expenditures - 63,834 - 225,719
Revenues over (under) expenditures 888 (30,395) 3,125 446,432 Other Financing Sources (Uses):
Transfers in - - - -
Transfers out - - - (30,000)
Total other financing sources (uses) - - - (30,000)
Net change in fund balances 888 (30,395) 3,125 416,432
Fund Balance (Deficit):
Beginning of year 47,512 53,214 192,347 1,271,616
End of year $ 54,102 17,117 $ 195,472 $ 1,688,048 $
(Continued)
Nonmajor Governmental Funds
Special Revenue
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) For the Year Ended June 30, 2023
112
Community
Development Police Landscape
Measure M2 Block Grant Grants District
Revenues:
Taxes 453,476 $ - $ - $ 138,662 $
Intergovernmental - 330,409 176,923 -
Charges for services - - - -
Use of money and property 23,306 - - 11,624
Contributions - - - -
Total revenues 330,409 476,782 176,923 150,286
Expenditures:
Current:
General government - - - -
Public safety - - 390,298 -
Community development - 452,804 - 91,391
Public works 49 - - -
Capital outlay 214,424 - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 452,804 214,473 390,298 91,391
Revenues over (under) expenditures (122,395) 262,309 (213,375) 58,895 Other Financing Sources (Uses):
Transfers in - - 147,760 -
Transfers out - - - (31,400)
Total other financing sources (uses) - - 147,760 (31,400) Net change in fund balances (122,395) 262,309 (65,615) 27,495 Fund Balance (Deficit):
Beginning of year 1,295,721 62,708 (10,457) 661,618
End of year $ (59,687) 1,558,030 $ (76,072) $ 689,113 $ (Continued)
For the Year Ended June 30, 2023
Special Revenue
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds
City of Seal Beach
113
Pacific Seal Beach
Heron Pointe Gateway Cable SB1
Revenues:
Taxes - $ 94,126 $ - $ 557,378 $
Intergovernmental - - - -
Charges for services - - 108,103 -
Use of money and property - - 9,304 20,451
Contributions 15,000 25,000 - -
Total revenues 119,126 15,000 117,407 577,829
Expenditures:
Current:
General government - - 66,422 -
Public safety - - - -
Community development 6,586 64,560 - -
Public works - - - -
Capital outlay - - - -
Debt service:
Principal - - - -
Interest and fiscal charges - - - -
Total expenditures 64,560 6,586 66,422 -
Revenues over (under) expenditures 54,566 8,414 50,985 577,829 Other Financing Sources (Uses):
Transfers in - - - -
Transfers out (1,600) (26,000) (20,000) -
Total other financing sources (uses) (26,000) (1,600) (20,000) - Net change in fund balances 28,566 6,814 30,985 577,829 Fund Balance (Deficit):
Beginning of year 62,594 121,889 513,864 1,005,779
End of year $ 150,455 69,408 $ 544,849 $ 1,583,608 $
(Continued)
Special Revenue
Nonmajor Governmental Funds
City of Seal Beach
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) For the Year Ended June 30, 2023
114
Special Revenue Debt Service
Total Other
Citywide City Debt Governmental
Grants Service Funds
Revenues:
Taxes $ - - $ 2,030,181 $
Intergovernmental 318,581 - 1,251,023
Charges for services - - 108,103
Use of money and property - 19,292 117,092
Contributions - - 40,000
Total revenues 19,292 318,581 3,546,399
Expenditures:
Current:
General government - - 66,422
Public safety - - 567,185
Community development 15,239 - 630,580
Public works - - 285,471
Capital outlay 597,695 - 1,034,510
Debt service:
Principal 420,000 - 420,000
Interest and fiscal charges - 24,424 24,424
Total expenditures 444,424 612,934 3,028,592
Revenues over (under) expenditures (425,132) (294,353) 517,807 Other Financing Sources (Uses):
Transfers in 444,425 - 739,455
Transfers out (117,057) - (226,057)
Total other financing sources (uses) 444,425 (117,057) 513,398 Net change in fund balances 19,293 (411,410) 1,031,205
Fund Balance (Deficit):
Beginning of year (284,972) 742,148 5,613,931
End of year $ 761,441 (696,382) $ 6,645,136 $
(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, 2023
115
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes 141,000 $ 141,000 $ 140,344 $ (656) $
Total revenues 141,000 141,000 140,344 (656)
Expenditures:
Current:
Public works 204,500 204,500 218,260 (13,760)
Total expenditures 204,500 204,500 218,260 (13,760)
Revenues over (under) expenditures (63,500) (63,500) (77,916) (14,416) Other Financing Sources:
Transfers in 63,500 63,500 94,322 30,822
Net change in fund balance $ - - $ 16,406 16,406 $
Fund Balance (Deficit):
Beginning of year (16,353)
End of year $ 53
City of Seal Beach
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2023
Budgeted Amounts
Street Lighting Special Revenue Fund
116
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental 157,500 $ 157,500 $ 199,877 $ 42,377 $ Use of money and property 1,500 1,500 2,425 925
Total revenues 159,000 159,000 202,302 43,302
Expenditures:
Current:
Public safety 215,400 215,400 176,887 38,513
Total expenditures 215,400 215,400 176,887 38,513
Net change in fund balance $ (56,400) (56,400) $ 25,415 81,815 $ Fund Balance:
Beginning of year 108,607
End of year $ 134,022
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, 2023
117
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental - $ - $ 192,435 $ 192,435 $
Use of money and property 200 200 80 (120)
Total revenues 200 200 192,515 192,315
Expenditures:
Current:
Public safety 265,000 265,000 - 265,000
Total expenditures 265,000 265,000 - 265,000
Revenues over (under) expenditures (264,800) (264,800) 192,515 457,315 Other Financing Sources:
Transfers in - - 52,948 52,948
Net change in fund balance $ (264,800) (264,800) $ 245,463 510,263 $ Fund Balance (Deficit):
Beginning of year (242,245)
End of year $ 3,218
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, 2023
118
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental 30,000 $ 30,000 $ 32,798 $ 2,798 $
Use of money and property 100 100 641 541
Total revenues 30,100 30,100 33,439 3,339
Expenditures:
Current:
Public works 30,000 50,000 63,834 (13,834)
Total expenditures 50,000 30,000 63,834 (13,834)
Net change in fund balance $ (19,900) 100 $ (30,395) (10,495) $ Fund Balance:
Beginning of year 47,512
End of year $ 17,117
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, 2023
119
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental 100 $ 100 $ - $ (100) $
Use of money and property 500 500 888 388
Total revenues 600 600 888 288
Net change in fund balance $ 600 600 $ 888 288 $
Fund Balance:
Beginning of year 53,214
End of year $ 54,102
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, 2023
120
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Use of money and property 1,600 $ 1,600 $ 3,125 $ 1,525 $ Total revenues 1,600 1,600 3,125 1,525
Net change in fund balance $ 1,600 1,600 $ 3,125 1,525 $ Fund Balance:
Beginning of year 192,347
End of year $ 195,472
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, 2023
121
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes 719,000 $ 719,000 $ 646,195 $ (72,805) $
Use of money and property 8,500 8,500 25,956 17,456
Total revenues 727,500 727,500 672,151 (55,349)
Expenditures:
Current:
Public works 3,000 3,000 3,328 (328)
Capital outlay 315,000 380,000 222,391 157,609
Total expenditures 383,000 318,000 225,719 157,281
Revenues over (under) expenditures 344,500 409,500 446,432 101,932 Other Financing Uses:
Transfers out (30,000) (30,000) (30,000) -
Net change in fund balance $ 314,500 379,500 $ 416,432 101,932 $ Fund Balance:
Beginning of year 1,271,616
End of year $ 1,688,048
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, 2023
122
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes 487,800 $ 487,800 $ 453,476 $ (34,324) $
Use of money and property 8,500 8,500 23,306 14,806
Total revenues 496,300 496,300 476,782 (19,518)
Expenditures:
Current:
Public works - - 49 (49)
Capital outlay 1,430,000 1,430,000 214,424 1,215,576
Total expenditures 1,430,000 1,430,000 214,473 1,215,527 Net change in fund balance $ (933,700) (933,700) $ 262,309 1,196,009 $ Fund Balance:
Beginning of year 1,295,721
End of year $ 1,558,030
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, 2023
123
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental 200,000 $ 500,000 $ 330,409 $ (169,591) $ Total revenues 500,000 200,000 330,409 (169,591)
Expenditures:
Current:
Community development 200,000 500,000 452,804 47,196
Total expenditures 500,000 200,000 452,804 47,196
Net change in fund balance $ - - $ (122,395) (122,395) $ Fund Balance:
Beginning of year 62,708
End of year $ (59,687)
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, 2023
124
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental 383,700 $ 383,700 $ 176,923 $ (206,777) $ Total revenues 383,700 383,700 176,923 (206,777)
Expenditures:
Current:
Public safety 312,400 432,200 390,298 41,902
Total expenditures 432,200 312,400 390,298 41,902
Revenues over (under) expenditures (48,500) 71,300 (213,375) (164,875) Other Financing Sources:
Transfers in - - 147,760 147,760
Net change in fund balance $ (48,500) 71,300 $ (65,615) (17,115) $ Fund Balance (Deficit):
Beginning of year (10,457)
End of year $ (76,072)
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, 2023
125
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes 188,700 $ 188,700 $ 138,662 $ (50,038) $
Use of money and property 7,000 7,000 11,624 4,624
Total revenues 195,700 195,700 150,286 (45,414)
Expenditures:
Current:
Community development 104,300 104,300 91,391 12,909
Total expenditures 104,300 104,300 91,391 12,909
Revenues over expenditures 91,400 91,400 58,895 (32,505) Other Financing Uses:
Transfers out (31,400) (31,400) (31,400) -
Net change in fund balance $ 60,000 60,000 $ 27,495 (32,505) $ Fund Balance:
Beginning of year 661,618
End of year $ 689,113
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, 2023
126
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 6,586 1,514
Total expenditures 8,100 8,100 6,586 1,514
Revenues over (under) expenditures 6,900 6,900 8,414 1,514 Other Financing Uses:
Transfers out (1,600) (1,600) (1,600) -
Net change in fund balance $ 5,300 5,300 $ 6,814 1,514 $ Fund Balance:
Beginning of year 62,594
End of year $ 69,408
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, 2023
127
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes 66,300 $ 66,300 $ 94,126 $ 27,826 $
Contributions 25,000 25,000 25,000 -
Total revenues 91,300 91,300 119,126 27,826
Expenditures:
Current:
Community development 92,300 92,300 64,560 27,740
Total expenditures 92,300 92,300 64,560 27,740
Revenues over (under) expenditures (1,000) (1,000) 54,566 55,566 Other Financing Uses:
Transfers out (26,000) (26,000) (26,000) -
Net change in fund balance $ (27,000) (27,000) $ 28,566 55,566 $ Fund Balance:
Beginning of year 121,889
End of year $ 150,455
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, 2023
128
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Charges for services 109,000 $ 109,000 $ 108,103 $ (897) $ Use of money and property 3,000 3,000 9,304 6,304
Total revenues 112,000 112,000 117,407 5,407
Expenditures:
Current:
General government 145,000 145,000 66,422 78,578
Total expenditures 145,000 145,000 66,422 78,578
Revenues over (under) expenditures (33,000) (33,000) 50,985 83,985 Other Financing Uses:
Transfer out (20,000) (20,000) (20,000) -
Net change in fund balance $ (53,000) (53,000) $ 30,985 83,985 $ Fund Balance:
Beginning of year 513,864
End of year $ 544,849
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, 2023
129
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Taxes 557,200 $ 557,200 $ 557,378 $ 178 $
Use of money and property 6,000 6,000 20,451 14,451
Total revenues 563,200 563,200 577,829 14,629
Expenditures:
Capital outlay 770,000 770,000 - 770,000
Total expenditures 770,000 770,000 - 770,000
Net change in fund balance $ (206,800) (206,800) $ 577,829 784,629 $ Fund Balance:
Beginning of year 1,005,779
End of year $ 1,583,608
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, 2023
130
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Intergovernmental 1,250,300 $ 1,745,300 $ 318,581 $ (1,426,719) $ Total revenues 1,745,300 1,250,300 318,581 (1,426,719)
Expenditures:
Current:
Community development 2,381,000 2,381,000 15,239 2,365,761 Capital outlay 1,316,100 1,811,100 597,695 1,213,405
Total expenditures 4,192,100 3,697,100 612,934 3,579,166 Revenues over (under) expenditures (2,446,800) (2,446,800) (294,353) 2,152,447 Other Financing Uses:
Transfers out - - (117,057) (117,057)
Net change in fund balance $ (2,446,800) (2,446,800) $ (411,410) 2,035,390 $ Fund Balance (Deficit):
Beginning of year (284,972)
End of year $ (696,382)
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, 2023
131
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Revenues:
Use of money and property 100 $ 100 $ 19,292 $ 19,192 $ Total revenues 100 100 19,292 19,192
Expenditures:
Debt service:
Principal retirement 420,000 420,000 420,000 -
Interest and fiscal charges 24,500 24,500 24,424 76
Total Expenditures 444,500 444,500 444,424 76
Revenues over (under) expenditures (444,400) (444,400) (425,132) 19,268 Other Financing Sources:
Transfers in 444,500 444,500 444,425 (75)
Total other financing sources 444,500 444,500 444,425 (75) Net change in fund balance $ 100 100 $ 19,293 19,193 $
Fund Balance:
Beginning of year 742,148
End of year $ 761,441
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, 2023
132
INTERNAL SERVICE FUND FINANCIAL STATEMENTS
133
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134
Vehicle Information
Replacement Technology
Fund Fund Total
ASSETS
Current Assets:
Cash and investments 83,845 $ 100,303 $ 184,148 $
Total current assets 100,303 83,845 184,148
Noncurrent Assets:
Depreciable capital assets, net of accumulated depreciation - 636,878 636,878 Intangible capital assets, net of accumulated amortization - 281,976 281,976 Total capital assets 918,854 - 918,854
Total noncurrent assets - 918,854 918,854
Total assets 100,303 1,002,699 1,103,002
LIABILITIES
Current Liabilities:
Accounts payable 14,044 15,406 29,450
Long-term debt, due within one year 80,586 - 80,586
Total current liabilities 15,406 94,630 110,036
Noncurrent Liabilities:
Long-term debt, due in more than one year 207,227 - 207,227 Total Noncurrent Liabilities - 207,227 207,227
Total Liabilities 15,406 301,857 317,263
NET POSITION
Net investment in capital assets 631,041 - 631,041
Unrestricted 84,897 69,801 154,698
Total Net Position $ 84,897 700,842 $ 785,739 $
City of Seal Beach
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
135
Vehicle Information
Replacement Technology
Fund Fund Total
OPERATING EXPENSES:
Operating expenses 34,349 $ 26,210 $ 60,559 $
Amortization and depreciation expenses 254,327 - 254,327 Total operating expenses 26,210 288,676 314,886
OPERATING (LOSS) (26,210) (288,676) (314,886)
NONOPERATING INCOME:
Gain on sale of assets 54,331 - 54,331
Interest payments (3,451) - (3,451)
Total nonoperating income - 50,880 50,880
(LOSS) BEFORE TRANSFERS (26,210) (237,796) (264,006)
TRANSFERS:
Transfers out (165,000) (186,388) (351,388)
Total Transfers (186,388) (165,000) (351,388)
CHANGES IN NET POSITION (212,598) (402,796) (615,394)
NET POSITION:
Beginning of year 1,103,638 297,495 1,401,133
End of year $ 84,897 700,842 $ 785,739 $
City of Seal Beach
Combining Statement of Revenues, Expenses, and Changes in Net Position Internal Service Funds
For the Year Ended June 30, 2023
136
Vehicle Information
Replacement Technology
Fund Fund Total
CASH FLOWS FROM OPERATING
ACTIVITIES:
Cash received from customers and users 26,750 $ - $ 26,750 $ Cash paid to suppliers for goods and services (18,279) (60,258) (78,537) Net cash (used in) operating activities (18,279) (33,508) (51,787)
CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES:
Transfers out (165,000) (186,388) (351,388)
Net cash (used in) non-capital financing activities (186,388) (165,000) (351,388)
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Proceed on disposal of assets 61,469 - 61,469
Principal paid on long-term debt (54,795) - (54,795)
Interest paid on long-term debt (3,451) - (3,451)
Net cash provided by capital and related financing activities - 3,223 3,223 Net change in cash and cash equivalents (204,667) (195,285) (399,952) CASH AND CASH EQUIVALENTS:
Beginning of year 279,130 304,970 584,100
End of year $ 100,303 83,845 $ 184,148 $
Reconciliation of Operating (Loss) to
Net Cash (Used in) Operating Activities:
Operating (loss) (288,676) $ (26,210) $ (314,886) $
Adjustments to reconcile operating (loss)
to net cash (used in) operating activities:
Amortization and depreciation expenses 254,327 - 254,327 Changes in assets and liabilities:
(Increase)/decrease in accounts receivables 26,750 - 26,750 Increase/(decrease) in accounts payable (25,909) 7,931 (17,978) Net cash (used in) operating activities $ (18,279) (33,508) $ (51,787) $ NONCASH ITEM:
Acquisition of lease assets $ - (178,158) $ (178,158) $ Issuance of lease liabilities $ - 178,158 $ 178,158 $
City of Seal Beach
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended June 30, 2023
137
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138
CUSTODIAL FUNDS FINANCIAL STATEMENTS
139
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140
Community Community
Facilities Facilities
District District - Heron
Deposits Heron Pointe Pacific Gateway Total
ASSETS:
Cash and investments 290,337 $ 120,916 $ 234,497 $ 645,750 $ Restricted investments with fiscal agents - 262,697 715,406 978,103 Total Assets 383,613 290,337 949,903 1,623,853
LIABILITIES:
Accounts payable 7,642 - - 7,642
Interest payable - 31,078 70,381 101,459
Total Liabilities 31,078 7,642 70,381 109,101
NET POSITION:
Restricted for:
Individual, organization and other government 282,695 $ 352,535 $ 879,522 $ 1,514,752 $ City of Seal Beach
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2023
141
Community Community
Facilities Facilities
District District - Heron
Deposits Heron Pointe Pacific Gateway Total
ADDITIONS:
Assessment revenue collected - $ 253,620 $ 554,982 $ 808,602 $ Investment income - 11,546 25,925 37,471
Total additions 265,166 - 580,907 846,073
DEDUCTIONS:
Return of deposits 201,175 - - 201,175
Payment of special assessment district debt service - 260,258 541,104 801,362 Total deductions 260,258 201,175 541,104 1,002,537
Change in net position 4,908 (201,175) 39,803 (156,464) NET POSITION:
Beginning of year 483,870 347,627 839,719 1,671,216
End of year 282,695 $ 352,535 $ 879,522 $ 1,514,752 $
Custodial Funds
For the Year Ended June 30, 2023
City of Seal Beach
Combining Statement of Changes in Fiduciary Net Position 142
STATISTICAL SECTION
143
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144
Page
These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. 146-155 These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes. 156-159
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. 160-166 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. 167-168
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. 169-172
Demographic and Economic Information
Operating Information
Statistical Section
Description of Statistical Section Contents
City of Seal Beach
For the Year Ended June 30, 2023
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
145
2014 2015 2016 2017 2018
Governmental activities:
Net investment in capital assets, $ 72,498,068 $ 74,296,935 $ 73,939,948 $ 72,399,752 $ 72,667,466 Restricted 4,426,990 3,842,792 3,866,679 4,587,081 4,207,675 Unrestricted 25,953,129 4,097,282 4,713,193 (3,660,561) (4,911,027) Total governmental activities net position $ 102,878,187 $ 82,237,009 $ 82,519,820 $ 73,326,272 $ 71,964,114 Business-type activities:
Net investment in capital assets, $ 32,360,440 $ 34,451,074 $ 34,145,069 $ 33,109,258 $ 31,663,486 Restricted - - - 25,082
Unrestricted 15,532,304 12,470,553 13,544,158 12,625,701 14,709,960 Total business-type activities net position $ 47,892,744 $ 46,921,627 $ 47,689,227 $ 45,734,959 $ 46,398,528 Primary government:
Net investment in capital assets, $ 104,858,508 $ 108,748,009 $ 108,085,017 $ 105,509,010 $ 104,330,952 Restricted 4,426,990 3,842,792 3,866,679 4,587,081 4,232,757 Unrestricted 41,485,433 16,567,835 18,257,351 8,965,140 9,798,933 Total primary government net position $ 150,770,931 $ 129,158,636 $ 130,209,047 $ 119,061,231 $ 118,362,642 Source: Finance Department, City of Seal Beach.
Fiscal Year
City of Seal Beach
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
146
2019 2020 2021 2022 2023
Governmental activities:
Net investment in capital assets, $ 87,071,592 $ 84,530,565 $ 85,059,375 $ 84,447,535 $ 85,686,837 Restricted 4,825,412 7,601,451 7,201,479 8,759,394 10,354,192 Unrestricted (9,873,029) (11,716,752) (9,239,218) (10,011,404) 864,319 Total governmental activities net position $ 82,023,975 $ 80,415,264 $ 83,021,636 $ 83,195,525 $ 96,905,348 Business-type activities:
Net investment in capital assets, $ 32,937,448 $ 31,473,936 $ 30,784,313 $ 30,111,234 $ 29,928,878 Restricted 25,082 25,082 25,082 25,082 25,082
Unrestricted 13,656,457 13,930,796 14,359,332 14,386,432 14,713,140 Total business-type activities net position $ 46,618,987 $ 45,429,814 $ 45,168,727 $ 44,522,748 $ 44,667,100 Primary government:
Net investment in capital assets, $ 120,009,040 $ 116,004,501 $ 115,843,688 $ 114,558,769 $ 115,615,715 Restricted 4,850,494 7,626,533 7,226,561 8,784,476 10,379,274 Unrestricted 3,783,428 2,214,044 5,120,114 4,375,028 15,577,459 Total primary government net position $ 128,642,962 $ 125,845,078 $ 128,190,363 $ 127,718,273 $ 141,572,448 Source: Finance Department, City of Seal Beach.
Fiscal Year
City of Seal Beach
Net Position by Component (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
147
2014 2015 2016 2017 2018
Expenses:
Governmental activities:
General government 5,040,070 $ 6,551,584 $ 6,264,368 $ 5,894,947 $ 6,161,230 $ Public safety 15,999,900 16,022,465 16,972,880 19,867,060 19,877,068 Community development 1,306,898 1,393,712 1,100,110 1,218,902 1,593,008 Community services 1,079,006 1,129,300 1,036,627 995,468 964,634 Public works 6,902,521 7,862,892 6,956,443 6,992,604 7,367,882 Interest on long-term debt 487,221 444,132 349,652 342,951 225,675 Total governmental activities expenses 30,815,616 33,404,085 32,680,080 35,311,932 36,189,497 Business-type activities:
Water utility 4,439,797 4,037,798 4,102,228 4,977,160 4,668,618 Sewer utility 1,730,940 1,661,225 1,676,651 2,639,043 2,539,783 Total business-type activities expenses 6,170,737 5,699,023 5,778,879 7,616,203 7,208,401 Total primary government expenses 36,986,353 39,103,108 38,458,959 42,928,135 43,397,898 Program revenues:
Governmental activities:
Charges for services:
General government 1,632,975 1,820,019 2,074,448 1,913,909 2,062,987 Public safety 1,384,701 2,132,176 1,521,220 2,045,589 1,903,530 Community development 182,021 186,858 192,878 217,486 300,640 Community services 1,062,796 1,020,316 1,015,517 707,813 733,456 Public works 1,962,242 1,937,305 1,832,289 2,105,747 2,398,039 Operating contributions and grants 2,402,490 2,768,435 2,122,139 1,721,167 2,334,480 Capital grants and contributions 10,000 20,000 10,000 174,685 79,175 Total governmental activities
program revenues 8,637,225 9,885,109 8,768,491 8,886,396 9,812,307 Business-type activities:
Charges for services:
Water utility 5,092,152 4,556,001 4,261,566 4,782,468 5,097,807 Sewer utility 2,775,332 2,765,357 2,466,869 2,784,942 2,928,885 Total business-type activities
program revenues 7,867,484 7,321,358 6,728,435 7,567,410 8,026,692 Total primary government
program revenues 16,504,709 17,206,467 15,496,926 16,453,806 17,838,999 Net revenues (expenses):
Governmental activities (22,178,391) (23,518,976) (23,911,589) (26,425,536) (26,377,190) Business-type activities 1,696,747 1,622,335 949,556 (48,793) 818,291 Total net revenues (expenses) $ (20,481,644) $ (21,896,641) $ (22,962,033) $ (26,474,329) $ (25,558,899) Source: Finance Department, City of Seal Beach.
City of Seal Beach
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
148
2019 2020 2021 2022 2023
Expenses:
Governmental activities:
General government 6,479,347 $ 6,868,616 $ 7,231,812 $ 8,604,149 $ 6,778,212 $ Public safety 21,497,362 24,079,442 23,326,808 26,912,192 20,062,949 Community development 1,499,652 1,581,361 2,283,377 3,043,960 1,836,054 Community services 945,425 866,786 1,139,731 1,991,897 263,478 Public works 7,752,351 11,180,509 8,290,658 9,086,138 8,487,999 Interest on long-term debt 143,040 88,274 57,902 61,160 36,443 Total governmental activities expenses 38,317,177 44,664,988 42,330,288 49,699,496 37,465,135 Business-type activities:
Water utility 4,909,193 5,444,834 6,033,692 6,064,434 5,250,934 Sewer utility 2,523,366 3,035,447 2,651,801 2,323,027 2,292,687 Total business-type activities expenses 7,432,559 8,480,281 8,685,493 8,387,461 7,543,621 Total primary government expenses 45,749,736 53,145,269 51,015,781 58,086,957 45,008,756 Program revenues:
Governmental activities:
Charges for services:
General government 1,913,201 1,207,956 1,486,575 1,129,039 1,069,669 Public safety 1,907,577 2,124,798 2,361,646 2,547,127 2,282,044 Community development 597,318 231,087 221,140 434,955 499,835 Community services 840,428 700,877 985,542 1,244,430 1,221,628 Public works 2,556,857 2,732,164 2,596,848 2,842,031 3,588,535 Operating contributions and grants 2,588,454 3,442,883 4,287,922 9,362,550 4,165,836 Capital grants and contributions 9,777,900 30,707 10,692 655 889 Total governmental activities
program revenues 20,181,735 10,470,472 11,950,365 17,560,787 12,828,436 Business-type activities:
Charges for services:
Water utility 4,851,274 4,268,610 4,957,483 5,824,338 5,759,925 Sewer utility 2,854,208 3,007,958 2,885,699 2,432,441 2,371,663 Total business-type activities
program revenues 7,705,482 7,276,568 7,843,182 8,256,779 8,131,588 Total primary government
program revenues 27,887,217 17,747,040 19,793,547 25,817,566 20,960,024 Net revenues (expenses):
Governmental activities (18,135,442) (34,194,516) (30,379,923) (32,138,709) (24,636,699) Business-type activities 272,923 (1,203,713) (842,311) (130,682) 587,967 Total net revenues (expenses) $ (17,862,519) $ (35,398,229) $ (31,222,234) $ (32,269,391) $ (24,048,732) Source: Finance Department, City of Seal Beach.
City of Seal Beach
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
149
2014 2015 2016 2017 2018
General revenues and other changes in net position:
Governmental activities:
Taxes:
Property taxes 9,498,277 $ 10,050,815 $ 10,408,505 $ 11,012,246 $ 11,180,197 $ Sales tax 4,742,859 4,246,080 4,228,730 4,379,341 4,303,618 Franchise taxes 1,324,860 1,163,595 955,922 1,016,938 1,059,581 Utility users taxes 4,644,218 4,646,434 4,445,180 4,177,713 4,186,554 Transient occupancy taxes 1,509,095 1,525,723 1,655,376 1,693,515 1,666,996 Other taxes 555,804 344,789 197,166 190,510 163,277
Motor vehicle in lieu, unrestricted 11,035 10,659 9,960 11,235 13,102 Use of money and property 674,875 725,720 1,004,572 425,014 300,817 Other 544,406 356,749 536,175 214,219 1,762,390
Transfers 378,500 378,500 378,500 378,500 378,500
Extraordinary Gain(loss) - 694,585 - - -
Total governmental activities 23,883,929 24,143,649 23,820,086 23,499,231 25,015,032 Business-type activities:
Use of money and property 133,995 109,575 176,437 167,661 223,778 Other 805 3,698 20,107 - -
Transfers (378,500) (378,500) (378,500) (378,500) (378,500) Extraordinary Gain(loss) 1,200,000 - - - -
Total business-type activities 956,300 (265,227) (181,956) (210,839) (154,722) Total primary government 24,840,229 23,878,422 23,638,130 23,288,392 24,860,310 Changes in net position:
Governmental activities 1,705,538 624,673 (91,503) 23,499,231 25,015,032 Business-type activities 2,653,047 1,357,108 767,600 (210,839) (154,722) Total primary government $ 4,358,585 $ 1,981,781 $ 676,097 $ 23,288,392 $ 24,860,310 Source: Finance Department, City of Seal Beach.
Fiscal Year
City of Seal Beach
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
150
2019 2020 2021 2022 2023
General revenues and other changes in net position:
Governmental activities:
Taxes:
Property taxes 11,481,535 $ 12,358,059 $ 12,926,895 $ 13,428,911 $ 14,468,211 $ Sales tax 5,546,264 9,108,334 10,146,964 11,443,583 11,666,838 Franchise taxes 1,097,774 1,034,280 1,067,098 1,101,243 1,175,046 Utility users taxes 4,061,031 3,941,877 4,129,727 4,508,593 5,349,003 Transient occupancy taxes 1,631,445 1,298,707 878,165 1,670,504 1,922,823 Other taxes 227,978 724,854 720,807 757,421 1,104,573
Motor vehicle in lieu, unrestricted 12,473 21,133 19,070 28,238 25,874 Use of money and property 1,692,720 1,862,213 151,196 (1,428,396) 781,761 Other 2,065,583 1,463,177 3,270,753 69,001 1,118,893
Transfers 378,500 376,483 (324,379) 733,500 733,500
Extraordinary Gain(loss) - - - - -
Total governmental activities 28,195,303 32,189,117 32,986,296 32,312,598 38,346,522 Business-type activities:
Use of money and property 326,036 391,016 256,845 218,203 289,885 Other - - - - -
Transfers (378,500) (376,483) 324,379 (733,500) (733,500) Extraordinary Gain(loss) - - - - -
Total business-type activities (52,464) 14,533 581,224 (515,297) (443,615) Total primary government 28,142,839 32,203,650 33,567,520 31,797,301 37,902,907 Changes in net position:
Governmental activities 10,059,861 (2,005,399) 2,606,373 173,889 13,709,823 Business-type activities 220,459 (1,189,180) (261,087) (645,979) 144,352 Total primary government $ 10,280,320 $ (3,194,579) $ 2,345,286 $ (472,090) $ 13,854,175 Source: Finance Department, City of Seal Beach.
Fiscal Year
City of Seal Beach
Changes in Net Position (Continued)
Last Ten Fiscal Years
(accrual basis of accounting)
151
City of Seal Beach
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2014 2015 2016 2017 2018
General Fund:
Nonspendable $ 1,549,735 $ 666,102 $ 682,859 $ 2,877 $ 32,495 Restricted - - - 12,277 5,266
Committed - - - - -
Assigned 8,227,258 7,623,994 7,610,286 7,478,281 8,289,150 Unassigned 22,314,838 21,711,517 20,811,037 19,770,202 17,491,623 Total general fund $ 32,091,831 $ 30,001,613 $ 29,104,182 $ 27,263,637 $ 25,818,534 All other governmental funds:
Nonspendable $ - $ - $ - $ - $ -
Restricted 4,426,990 3,842,792 3,866,679 4,131,203 4,110,558 Assigned 71,993 - - - -
Unassigned (368,629) (525,408) (51,254) (184,908) (34,159) Total all Other government funds: $ 4,130,354 $ 3,317,384 $ 3,815,425 $ 3,946,295 $ 4,076,399 Source: Finance Department, City of Seal Beach
Fiscal Year
152
City of Seal Beach
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
(modified accrual basis of accounting)
2019 2020 2021 2022 2023
General Fund:
Nonspendable $ 33,795 $ 41,776 $ 2,069,748 $ 51,506 $ 42,705 Restricted 5,419 2,190,469 2,046,356 2,034,271 1,935,127 Committed 17,067,216 - 17,546,968 23,523,980 25,322,120 Assigned 10,152,504 4,370,059 4,704,595 4,853,380 5,097,455 Unassigned 11,922,370 3,509,871 3,629,265 3,885,769 4,927,044 Total general fund $ 22,114,088 $ 27,179,391 $ 29,996,932 $ 34,348,906 $ 37,324,451 All other governmental funds:
Nonspendable $ - $ - $ - $ - $ -
Restricted 4,819,993 5,410,982 5,037,618 6,167,958 7,477,277 Assigned - - - - -
Unassigned (425,639) (671,694) (373,870) (554,027) (692,160) Total all Other government funds: $ 4,394,354 $ 4,739,288 $ 4,663,748 $ 5,613,931 $ 6,785,117 Source: Finance Department, City of Seal Beach
Fiscal Year
153
City of Seal Beach
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2014 2015 2016 2017 2018
Revenues:
Taxes $ 23,476,034 $ 23,114,876 $ 22,828,144 $ 23,368,371 $ 24,021,668 Licenses and permits 1,369,275 1,377,131 1,304,924 1,234,590 1,480,971 Intergovernmental 869,294 1,725,127 1,388,056 744,904 1,530,815 Charges for services 3,895,371 3,961,691 4,214,690 5,349,083 4,586,949 Use of money and property 674,875 725,720 1,004,572 426,418 347,117 Fines and forfeitures 1,013,695 1,146,509 1,110,606 152,845 1,089,515 Contributions from other governments 341,698 330,885 283,222 180,511 55,765 Miscellaneous 579,125 375,588 537,777 492,245 520,420
Total revenues 32,219,367 32,757,527 32,671,991 31,948,967 33,633,220 Expenditures
Current:
General government 4,493,594 5,462,668 5,351,130 5,673,309 5,757,859 Public safety 15,439,757 15,811,773 16,378,416 17,395,965 18,148,871 Community development 1,298,071 1,362,308 1,175,339 1,186,081 1,488,921 Community services 1,048,427 1,129,497 1,075,282 1,004,690 954,018 Public works 4,871,887 5,631,015 4,862,058 4,586,373 4,967,066 Capital outlay 2,094,120 4,578,308 2,645,823 1,506,476 2,567,080 Debt service:
Principal retirement 1,265,135 1,337,573 1,490,150 2,162,379 1,640,521 Interest and fiscal charges 492,935 441,040 355,819 353,322 231,779 Total expenditures 31,003,926 35,754,182 33,334,017 33,868,595 35,756,115 Excess (deficiency) of revenue over
(under) expenditures 1,215,441 (2,996,655) (662,026) (1,919,628) (2,122,895) Other financing sources (uses):
Transfers in 4,363,955 7,012,848 5,602,944 4,472,129 5,714,614 Transfers out (4,295,455) (6,919,381) (5,340,308) (4,262,176) (4,906,717) Proceeds on sale of assets - - - - -
Total other financing sources (uses) 1,615,431 93,467 262,636 209,953 807,897 Net change in fund balances $ 2,830,872 $ (2,903,188) $ (399,390) $ (1,709,675) $ (1,314,998) Debt service as a percentage of
noncapital expenditures 6.1% 5.7% 6.0% 7.8% 5.6%
Source: Finance Department, City of Seal Beach
Fiscal Year
154
City of Seal Beach
Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years
(modified accrual basis of accounting)
2019 2020 2021 2022 2023
Revenues:
Taxes $ 25,903,080 $ 27,481,580 $ 31,711,229 $ 34,976,825 $ 37,716,674 Licenses and permits 1,416,737 844,274 771,615 926,792 1,027,232 Intergovernmental 857,923 4,330,159 2,195,977 6,754,322 1,622,005 Charges for services 4,878,405 4,684,076 4,853,170 5,118,769 5,821,082 Use of money and property 1,772,775 2,003,529 235,061 (1,197,815) 811,518 Fines and forfeitures 946,048 1,239,154 1,816,837 1,871,227 1,435,250 Contributions from other governments 45,994 60,942 106,528 76,817 77,023 Miscellaneous 2,319,864 2,995,022 3,431,013 240,917 1,291,231 Total revenues 38,140,826 43,638,736 45,121,430 48,767,854 49,802,015 Expenditures
Current:
General government 6,169,490 6,083,705 6,713,025 7,597,539 7,671,076 Public safety 19,240,608 20,921,107 21,895,428 23,892,990 24,570,207 Community development 1,446,025 1,408,699 2,203,834 2,185,707 2,218,015 Community services 942,804 852,664 1,131,906 1,174,593 1,219,014 Public works 5,160,373 6,672,230 5,748,811 6,884,360 6,625,681 Capital outlay 7,378,774 1,729,166 3,439,241 1,875,596 3,609,554 Debt service:
Principal retirement 1,754,905 494,370 496,920 532,556 789,974 Interest and fiscal charges 152,863 88,612 70,479 55,856 36,651 42,245,842 38,250,553 41,699,644 44,199,197 46,740,172
Excess (deficiency) of revenue over
(under) expenditures (4,105,016) 5,388,183 3,421,788 4,568,657 3,061,843 Other financing sources (uses):
Transfers in 9,381,712 4,141,526 2,858,654 2,697,577 4,359,511 Transfers out (8,663,187) (4,119,472) (3,657,439) (1,964,077) (3,274,623) Proceeds on sale of assets - 119,000 - - -
Total other financing sources (uses) 718,525 22,054 (679,785) 733,500 1,084,888 Net change in fund balances $ (3,386,491) $ 5,410,237 $ 2,742,003 $ 5,302,157 $ 4,146,731 Debt service as a percentage of
noncapital expenditures 5.5% 1.6% 1.5% 2.4% 1.9%
Fiscal Year
155
Fiscal Year Taxable Taxable Total
Ended Assessed Secured Assessed Direct Tax
June 30 Secured Unsecured Value (Note 1) Unsecured Value Rate 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% 2023 6,688,384,474 169,071,299 6,857,455,773 - - 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 receives 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
156
City of Seal Beach
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
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 0.04603 0.04719 0.06135 0.06001 0.06072 0.05881 0.05509 0.06379 0.05996 0.05880 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 0.07969 0.07468 0.07779 0.07367 0.09803 0.16561 0.13116 0.14183 0.12906 0.13106 Total Direct & Overlapping
Rates 1.12922 1.12537 1.14264 1.13718 1.16225 1.22792 1.18975 1.20912 1.19252 1.19336 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. 157
Percent of Percent of
Total City Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Taxpayer Value Value Value Value
Seal Beach Mutual $ 1,216,298,723 17.75% $ 660,240,339 14.40% CPT Shops at Rossmoor LLC 137,065,900 2.00%
ASN Long Beach LLC 130,906,683 1.91% 78,285,305 1.71%
Boeing 127,947,146 1.87% 115,679,380 2.52%
Terra Funding-Bixby Ranch LLC 98,964,451 1.44%
Ranch Town Center LLC 50,247,838 0.73% 43,196,434 0.94% AL United States Seal Beach Senior Housing LP 44,298,747 0.65% 47,814,406 1.04% Farmers and Merch Bank 32,015,830 0.47%
Columbia Regency Retail Partners LLC 30,282,146 0.44%
OXY Long Beach Inc 29,385,011 0.43% 165,219,856 3.60%
Rossmoor Shops LLC 103,908,432 2.27%
Bixbybit - Bixby Office Park LLC 67,626,000 1.48%
DCOR LLC 47,181,855 1.03%
Hellman Properties 32,875,595 0.72%
$ 1,897,412,475 27.69% $ 1,362,027,602 29.71%
Source: HDL Coren & Cone
City of Seal Beach
Current Year and Nine Years Ago
Principal Property Taxpayers
2023 2014
158
Fiscal Taxes Levied Collections in
Year Ended for the Percent Subsequent Percent
June 30 Fiscal Year Amount of Levy Years Amount of Levy 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% 2023 11,160,585 10,909,185 97.75% 107,920 11,017,105 98.71% Source: Orange County Tax Ledger
City of Seal Beach
Property Tax Levies and Collections
Last Ten Fiscal Years
Total Collections to Date
Collected within the
Fiscal Year of Levy
159
Fiscal Year Pension Fire Total
Ended Obligation Station Governmental
June 30 Leases Bonds Bonds Climatec Subscriptions Activities 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 - 300,555 949,058 2,222,130
2023 327,111 315,000 - 218,963 694,445 1,555,519
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
City of Seal Beach
Last Ten Fiscal Years
Ratios of Outstanding Debt by Type
Governmental Activities
160
Fiscal Year Sewer 2011 Sewer Total Total Percentage Debt Ended Water Board Installment State Revolving Business-type Primary of Personal Per June 30 Loan Agreement Agreement Subscriptions Activities Government Income 1 Capita 1 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 2,566,416 357,237 4,989,162 7,211,292 * 290 2023 401,073 1,385,000 2,356,639 277,614 4,420,326 5,975,845 * 241 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
City of Seal Beach
Ratios of Outstanding Debt by Type (Continued)
Last Ten Fiscal Years
Business-type Activities
161
Fiscal Year Private Percent of
Ended Placement Total Assessed Per
June 30 Bonds Bonds Bonds Value 1 Capita
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
2023 - 315,000 315,000 0.00% 13
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.
162
2022-23 Assessed Valuation: $6,857,455,773
Total Debt City’s Share of
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable (1) 6/30/2023 Debt 6/30/23 Metropolitan Water District 0.188% 19,215,000 $ $ 36,124 Coast Community College District 2.882% 920,781,084 26,536,911 North Orange Jt. Community College District 1.158% 324,914,503 3,762,510 Los Alamitos Unified School District School Facilities Imp District No.1 48.346% 218,445,227 105,609,529 Huntington Beach Union High School District 0.001% 151,029,998 1,510 Ocean View School District 0.004% 126,975,000 5,079
City of Seal Beach Community Facilities District No. 2002-1 100.000% 2,515,000 2,515,000 City of Seal Beach Community Facilities District No. 2005-1 100.000% 6,735,000 6,735,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $ 145,201,663 OVERLAPPING GENERAL FUND DEBT:
Orange County General Fund Obligations 0.946% 451,165,000 $ 4,268,021 $ Orange County Board of Education Certificates of Participation 0.009% 10,860,000 102,736 North Orange County Regional Occupation Program Certificates of Participation 4.395% 7,790,000 342,371 Coast Community College District Certificates of Participation 2.882% 1,480,000 42,654 Coast Community College District Pension Obligation Bonds 2.882% 1,380,000 39,772 Los Alamitos Unified School District Certificates of Participation 53.547% 32,572,186 17,441,428 Huntington Beach Union High School District General Fund Obligations 0.001% 55,086,090 551 Ocean View School District General Fund Obligations 0.004% 14,555,000 582 City of Seal Beach Lease Revenue Bonds 100% 315,000 315,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 22,553,115 $ TOTAL DIRECT DEBT $ 315,000
Less: Orange County Transit Authority (80% self-supporting) 0 TOTAL OVERLAPPING DEBT $ 167,439,778
COMBINED TOTAL DEBT $ 167,754,778 (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 2022-23 Assessed Valuation:
Total Overlapping Tax and Assessment Debt 2.12%
Total Direct Debt ($315,000) 0.005%
Combined Total Debt 2.45%
City of Seal Beach
Schedule of Direct and Overlapping Debt
June 30, 2023
163
2014 2015 2016 2017 2018
Debt limit $ 756,328,731 $ 817,720,762 $ 846,747,277 $ 820,537,899 $ 860,757,686 Total net debt applicable to limit - - - - -
Legal debt margin $ 756,328,731 $ 817,720,762 $ 846,747,277 $ 820,537,899 $ 860,757,686 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
164
2019 2020 2021 2022 2023
Debt limit $ 892,030,484 $ 952,282,846 $ 930,063,188 $ 960,333,816 $ 1,028,618,366 Total net debt applicable to limit - - - - -
Legal debt margin $ 892,030,484 $ 952,282,846 $ 930,063,188 $ 960,333,816 $ 1,028,618,366 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 2023
Assessed Valuation $ 6,857,455,773
Debt percentage 1 15%
Debt limit 1,028,618,365.95 $
Debt applicable to limit -
Legal debt margin $ 1,028,618,366
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
165
Fiscal Year
Ended Tax
June 30 Increment Principal Interest Coverage
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 - - - -
2023 - - - -
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. 166
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 24,647 1,538,564 62,423 3.4%
Sources: HDL Coren & Cone
City of Seal Beach
Demographic and Economic Statistics
Last Ten Calendar Years
167
Business
Business Name 2022-23 2013-14 Category
76 X X Service Stations
AT&T Mobility X Electronics/Appliance Store
Bed Bath & Beyond X X Home Furnishings
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
Cosmodyne X Light/Industrial 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 X Quick-Service Restaurants
Kobe Japanese Steakhouse X Casual Dining
Kohls X X Department Stores
Mag Tek X Office Equipment
Marshalls X X Family Apparel
Mobil X X Service Stations
Old Ranch Country Club X X Leisure/Entertainment
Original Parts Group X X Automotive Supply Stores
Pavillions X X Grocery Stores Liquor
Petsmart X Specialty Stores
Ralphs X X Grocery Stores Liquor
Roger Dunn Golf Shop X X Sporting Goods/Bike Stores
Seal Beach Chevron X Service Stations
Spaghettini X X Fine Dining
Staples X Office Supplies/Furniture
Target X X Discount Dept Stores
Toys R Us X Specialty Stores
Ulta Beauty X Specialty Stores
Walts Wharf X X Fine Dining
2021-22 Percent of Fiscal Year Total Paid by Top 25 Accounts = 57.14% 2013-14 Percent of Fiscal Year Total Paid by Top 25 Accounts = 67.66% 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
168
Function 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 General government 10.56 14.64 14.34 15.92 13.00 13.48 13.48 14.75 21.35 21.25 Public safety 79.13 76.78 74.12 77.19 78.50 79.82 79.82 80.78 82.05 86.90 Public works 10.94 11.03 3.98 6.00 5.00 5.00 4.97 17.99 17.99 17.69 Community
development 18.16 12.01 17.25 16.53 13.60 14.76 14.76 13.88 13.50 12.44 Water 13.80 12.60 13.82 12.60 12.90 13.15 13.15 8.90 8.90 7.45 Sewer 5.91 5.28 7.11 7.69 6.71 6.89 6.89 5.86 5.86 6.99 Total 128.26 113.21 142.58 131.61 133.91 130.71 133.10 142.16 149.65 152.72 Source: Finance Department, City of Seal Beach
Fiscal Year
Last Ten Fiscal Years
Full-Time and Part-Time City Employees by Function
City of Seal Beach
169
2014 2015 2016 2017 2018
Police:
Arrests 758 798 790 781 854
Parking citations issued 18,931 21,043 19,264 18,319 19,929 Public works:
Street centerline miles resurfaced 1 2 1 - 1
Number of public right of way permits issued 140 151 184 259 231 Number of street related service requests 35 45 40 68 109 Parks and recreation:
Number of recreation classes 678 781 680 710 1,070
Number of facility rentals 1,763 2,633 557 585 1,030
Water:
Number of water meters replaced 85 57 76 56 49
Acre feet of water used 3,878 3,540 3,208 3,259 3,208
Sewer:
Number of feet of sewer cleaned 253,099 253,099 217,619 - 217,619 Number of catch basins cleaned 401 434 458 216 216
Source: City of Seal Beach
Fiscal Year
City of Seal Beach
Operating Indicators by Function
Last Ten Fiscal Years
170
2019 2020 2021 2022 2023
Police:
Arrests 787 709 806 1,429 809
Parking citations issued 17,663 20,913 28,644 29,658 24,841 Public works:
Street centerline miles resurfaced 1 4 3 1 1
Number of public right of way permits issued 253 242 232 213 213 Number of street related service requests 92 44 39 258 258 Parks and recreation:
Number of recreation classes 1,100 790 1,113 955 828
Number of facility rentals 1,045 690 314 1,020 773
Water:
Number of water meters replaced 49 104 154 89 89
Acre feet of water used 3,360 3,276 3,471 3,086 3,086
Sewer:
Number of feet of sewer cleaned 154,000 146,619 126,563 190,569 190,569 Number of catch basins cleaned 216 216 217 218 218
Source: City of Seal Beach
Last Ten Fiscal Years
Operating Indicators by Function (Continued)
City of Seal Beach
Fiscal Year
171
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Police:
Stations 2222222222
Patrol units 34 34 34 34 34 34 34 34 34 34
Public works:
Streets (center line miles) 43 43 43 43 43 43 43 43 43 43 Sidewalk (miles) 86 86 86 86 86 86 86 86 86 86
Signalized intersections 23 23 23 23 23 23 23 23 22 22
Parks and recreation:
Parks 10 10 10 10 10 10 10 10 13 13
Community centers 3333333355
Water:
Water pipe (miles) 72 72 72 72 72 72 72 72 72 72
Reservoirs 2222222222
Sewer
Sanitary sewers (miles) 37 37 37 37 37 37 37 37 37 37
Storm sewers (miles) 4444444444
Sewer lift/pump stations 7777777766
Source: City of Seal Beach
City of Seal Beach
Capital Asset Statistics by Function
Last Ten Fiscal Years
Fiscal Year
172
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 SEAL BEACH SEAL BEACH
CALIFORNIA
A"//6"-$0.13&)&/4*7&
'*/"/$*"-3&1035
FISCAL YEAR 2023 - 2024
City of Seal Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Prepared by the Finance Department
Barbara Arenado
Director of Finance/City Treasurer
City of Seal Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
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 Audit of 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 .............................................................................................................................................. 25 Reconciliation of the Governmental Funds Balance Sheet
to the Government–Wide Statement of Net Position ........................................................................... 26 Statement of Revenues, Expenditures,
and Changes in Fund Balances ............................................................................................................. 27 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government–Wide Statement of Activities ......................................................................................................................... 28 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 ........................................................................................................... 39 Statement of Change in Fiduciary Net Position .......................................................................................... 40 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, 2024
Table of Contents (Continued)
Page
FINANCIAL SECTION (Continued)
Required Supplementary Information (Unaudited):
Budgetary Comparison Schedule – General Fund .......................................................................................................... 89 Budgetary Comparison Schedule – Citywide Grants Special Revenue Fund ................................................................ 90 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 ....................................................................................... 98 Supplementary Information:
Schedule of Revenues, Expenditures, and Change in Fund Balance – Budget and Actual Capital Projects and Equipment Capital Projects Fund ................................................................................... 103 Nonmajor Governmental Funds:
Combining Balance Sheet ............................................................................................................................... 106 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ....................................... 111 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Street Lighting Special Revenue Fund ...................................................................................................... 116 Supplemental Law Enforcement Special Revenue Fund .......................................................................... 117 Police Asset Forfeiture Special Revenue Fund ......................................................................................... 118 Air Quality Improvement Special Revenue Fund ..................................................................................... 119 Park Improvement Special Revenue Fund ................................................................................................ 120 Traffic Impact Special Revenue Fund....................................................................................................... 121 State Gasoline Tax Special Revenue Fund ............................................................................................... 122 Measure M2 Special Revenue Fund ......................................................................................................... 123 Community Development Block Grant Special Revenue Fund ................................................................ 124 Police Grants Special Revenue Fund ........................................................................................................ 125 Landscape District Special Revenue Fund ................................................................................................ 126 Heron Pointe Special Revenue Fund ......................................................................................................... 127 Pacific Gateway Special Revenue Fund ................................................................................................... 128 Seal Beach Cable Special Revenue Fund ................................................................................................. 129 SB1 Special Revenue Fund ....................................................................................................................... 130 City Debt Service Fund ............................................................................................................................. 131
Internal Service Fund Financial Statements:
Combining Statement of Net Position ............................................................................................................. 135 Combining Statement of Revenues, Expenses, and Change in Net Position .................................................. 136 Combining Statement of Cash Flows .............................................................................................................. 137 Custodial Fund Financial Statements:
Combining Statement of Fiduciary Net Position ............................................................................................. 141 Combining Statement of Changes in Fiduciary Net Position .......................................................................... 142 City of Seal Beach
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents (Continued)
Page
STATISTICAL SECTION (Unaudited)
Net Position by Component .......................................................................................................................................... 146 Changes in Net Position ............................................................................................................................................... 148 Fund Balances of Governmental Funds ........................................................................................................................ 152 Changes in Fund Balances of Governmental Funds ..................................................................................................... 154 Assessed Value and Estimated Actual Value of Taxable Property .............................................................................. 156 Direct and Overlapping Property Tax Rates ................................................................................................................. 157 Principal Property Taxpayers ....................................................................................................................................... 158 Property Tax Levies and Collections ............................................................................................................................ 159 Ratios of Outstanding Debt by Type ............................................................................................................................ 160 Ratios of General Bonded Debt Outstanding ............................................................................................................... 162 Schedule of Direct and Overlapping Debt .................................................................................................................... 163 Legal Debt Margin Information.................................................................................................................................... 164 Pledged-Revenue Coverage .......................................................................................................................................... 166 Demographic and Economic Statistics ......................................................................................................................... 167 Top 25 Sales Tax Producers ......................................................................................................................................... 168 Full-Time and Part-Time City Employees by Function ............................................................................................... 169 Operating Indicators by Function ................................................................................................................................. 170 Capital Asset Statistics by Function ............................................................................................................................. 172 This page intentionally left blank.
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January 29, 2025
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, 2024. 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 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, 2024, 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
In 1904 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 one of five trustees voted into office in October 1915, the second 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.
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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 August 1913 as part of a marketing re-branding by the Guy M. Rush Realty Company.
Another area of Seal Beach, Surfside Colony, was founded in 1929 and is credited as the one of the first beach resort communities of its type on the West Coast, following Santa Monica, Malibu Colony and Anaheim Landing.
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. 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.
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 24,350.
ECONOMIC CONDITIONS
Local economy: Although the focus of this Annual Comprehensive Financial Report is the financial condition of the City at June 30, 2024, 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 a 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 $4.0 million from the prior year.
This increase is mostly due to payments regarding the pier repairs and interest rate increases.
Property tax is the City’s largest General Fund revenue source with revenues of $15.4 million, an increase of 6.4 percent over the prior fiscal year. Sales tax is the second largest General Fund revenue source with revenues of $11.5 million including transaction tax, a decrease of 1.5 percent from the prior year.
Additionally, Transient Occupancy Tax was $1.9 million, a decrease of 0.2 percent, relatively flat from the previous year. The increase in Property Tax is due to the continued robust housing demographics in the City. The slight decrease in Sales Tax, compared to the prior year, is primarily due to a slowdown in the fuel and service stations industry and consumer spending shifting from goods to experiences like dining and entertainment.
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. In November 2024, Measure GG passed in Seal Beach with 68% voter approval, implementing a 0.5 percent increase in the local sales tax to support current essential City services and will begin in 2025. iii
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, 2024, the reserve balance was $10.5 million or 22.0 percent of the final operating budget.
Major initiatives: The Strategic Plan goals are approved and/or affirmed by the City Council each year.
Priorities included Organizational Efficiencies, Community Outreach and Capital Projects, Housing Element Updates, Local Coastal Plan, Fiscal Sustainability, Flooding, and Public Safety. Highlights of this year’s major initiatives reflect the City’s commitment to sustaining the community’s quality of life and fiscal health. Key accomplishments include enhancing public safety services through funding for emergency response and community policing, upgrading critical infrastructure such as streets and recreational facilities, and maintaining essential transportation programs like the senior shuttle and the micro-transit pilot program. The City also prioritized preserving beaches and neighborhoods, reducing the unfunded pension liability, and fostering community engagement. Notable achievements include the completion of the new Tennis and Pickleball Center, a major beach sand restoration project recovering nearly 2 million cubic feet lost to storm erosion, and revisions to the Housing Element. Despite volatile economic conditions, the City remained fully operational, reinstated live recreational programs, and continued to deliver essential services to the community.
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, 2023. This was the twenty-second 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.
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A Certificate of Achievement is valid for a period of one year only. City staff believe 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.
ACKNOWLEDGEMENTS
This report was made possible by the highly dedicated Finance staff with their dedicated efforts and teamwork, special thanks to the staff in the Finance Department. Sincere appreciation is also expressed to the City Council and City Manager for their interest and support, which made this presentation possible, and finally to the City’s auditing firm of The Pun Group for their professional assistance.
Respectfully submitted,
Barbara Arenado
Director of Finance/City Treasurer
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, 2023
Executive Director/CEO
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ORGANIZATIONAL CHART
Schelly Sustarsic Mayor
Lisa Landau Mayor Pro Tem
Joe Kalmick Council Member
Thomas Moore Council Member
Nathan Steele Council Member
Exercise Administrative Control
Over All Departments
Agenda Preparation
Represents City in all legal matters Administrative Policies City Council Support
Computer Network Administration
Intergovernmental Relations
Special Studies/Projects
Policy Analysis
Risk Management
Financial Services/Reporting
Business Tax
Utility Billing/Cashiering Employee Benefits
Budget/Audit/Grants Classification/Compensation
Accounts Payable/Payroll
Debt Administration
Treasury/Investments
Successor Agency Administration
Engineering
Fleet Maintenance
Beach Maintenance
Water/Sewer Maintenance
Capital Projects
Storm Drains
Planning Building Maintenance
Building/Code Enforcement Street Maintenance
Development Review Traffic and Transportation
Community Development Block Grant
Land Use and Coastal Issues
General Plan and Code
Traffic/Patrol/Detective Services
Youth/Adult Class Activity Parking Control
Special Event Permitting Detention Center
Sports League/Events
Beach/Pool Safety
Jr. Lifeguard Program
Records Management
Election Management
Gloria D. Harper, City Clerk
Joe Bailey, Marine Safety Chief
Orange County Fire Authority
Personnel Recruitment
MARINE SAFETY
FIRE SERVICES
HUMAN RESOURCES
COMMUNITY SERVICES
CITY CLERK
POLICE SERVICES
Nicholas R. Ghirelli, City Attorney
Iris Lee, Director of Public Works
Michael Henderson, Chief of Police
FINANCE
DEVELOPMENT
COMMUNITY
PUBLIC WORKS
Alexa Smittle, Director of Community
Development & Community Services
FY 2023-2024
CITIZENS OF SEAL BEACH
MAYOR AND CITY COUNCIL
Barbara Arenado, Director of
Finance/City Treasurer
CITY MANAGER
CITY ATTORNEY
Jill R. Ingram, City Manager
Patrick Gallegos, Assistant City Manager
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CITY OF SEAL BEACH
CALIFORNIA
Principal Officers
City Council
6FKHOO\6XVWDUVLF, Mayor
/LVD/DQGDX, Mayor Pro Tem
-RH.DOPLFN, Council Member
7KRPDV0RRUH, Council Member
1DWKDQ6WHHOH, Council Member
Executive Officers
Jill R. Ingram, City Manager
1LFKRODV*KLUHOOL, City Attorney
Administrative Personnel
Patrick Gallegos, Assistant City Manager
0LFKDHO+HQGHUVRQ, Chief of Police
,ULV/HH, 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
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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, 2024, 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, 2024, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (“GAAS”) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (“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