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TO:
CITY OF
NEWPORT BEACH
City Council Staff Report
August 11, 2015
Agenda Item No. PFC -2
HONORABLE CHAIR AND BOARD OF DIRECTORS OF THE
PUBLIC FACILITIES CORPORATION
FROM: Finance Department
Dan Matusiewicz, Finance Director/Treasurer
949 - 644 -3123, danm(a)newoortbeachca.00v
PREPARED BY: Trevor Power, Senior Accountant
TITLE: Review of Annual Financial Statements
ABSTRACT:
The Bylaws of the Newport Beach Public Facilities Corporation call for an annual
meeting of the Board of Directors. The Bylaws also specify that the Chief Financial
Officer shall maintain adequate financial records concerning the receipts and
disbursements of the Corporation and the Board of Directors are entitled to inspect the
associated financial records upon request. The attached financial statements represent
the financial position and financial activities of the corporation for the year ending
June 30, 2015.
RECOMMENDATION:
Receive and file the financial statements.
FUNDING REQUIREMENTS:
There are no funding requirements associated with this action.
DISCUSSION:
The Newport Beach Public Facilities Corporation ( "Corporation ") was created to assist
the City in financing the acquisition and construction of public facilities. The City Council
sits as the Board of Directors of the Corporation, with the City Manager serving as
President, the City Clerk serving as Secretary, and the City Treasurer serving as Chief
Financial Officer. Normally, the Mayor serves as Chairperson of the Board, with the
Mayor Pro -Tem serving as Vice - Chairperson.
The issuance of Certificates of Participation (COPs) are a common and efficient way to
finance public facilities. In 1992, the City issued $7.5 million of COPs to finance the
construction of the Central Library. In 2010, the City issued approximately $126.7 million
PFC24
of new COPs. Of this financing, $122.8 million was used for the Civic Center project
and $3.9 million was used to refinance the remaining balance of the Central Library
COPS.
During the year, the corporation received transfers from the City totaling $8.2 million
and Federal Build America Bond (BAB) Interest Subsidy revenues of $2.4 million.
Together with investment earnings, there were sufficient resources necessary to satisfy
the annual debt service requirement of $10.6 million, pay trustee fees and other
administrative fees associated with the 2010 COPs. The table below illustrates the
remaining debt service payment and balance on the COPs:
Year Ending
2010 COP Debt Service
June 30
Principal
Interest
Total
Balance
2015
$ 2,860,000
$ 7,687,117 $
10,547,117
116,595,000
2016
2,940,000
7,585,417
10,525,417
113,655,000
2017
3,060,000
7,465,417
10,525,417
110,595,000
2018
3,185,000
7,340,517
10,525,517
107,410,000
2019
3,310,000
7,204,077
10,514,077
104,100,000
2020 -2023
12,910,000
24,004,957
36,914,957
91,190,000
2024 -2027
14,425,000
24,510,677
38,935,677
76,765,000
2028 -2031
17,240,000
20,187,631
37,427,631
59,525,000
2032 -2035
20,620,000
14,933,453
35,553,453
38,905,000
2036 -2039
24,740,000
8,595,866
33,335,866
14,165,000
2040 -2041
14,165,000
1,534,669
15,699,669
-
$119,455,000
$ 131,049,798 $
250,504,798
The outstanding principal balance was $116.6 million as of June 30, 2015. After the
July 1, 2015 debt service payment, the remaining balance is now $113.7 million.
ENVIRONMENTAL REVIEW:
Staff recommends the Board of Directors of the Public Facilities Corporation find this
action is not subject to the California Environmental Quality Act ( "CEQA') pursuant to
Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable
indirect physical change in the environment) and 15060(c)(3) (the activity is not a
project as defined in Section 15378) of the CEQA Guidelines, California Code of
Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical
change to the environment, directly or indirectly.
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the Board of Directors considers the item).
ATTACHMENTS:
Description
Attachment A — Financial Statements
PFC2 -2
ATTACHMENT A
Financial Statements
PFC2 -3
NEWPORT BEACH PUBLIC FACILITIES CORPORATION
Comparative Balance Sheet
June 30, 2015 and 2014
Assets
Cash with fiscal agent
Due from other funds
Total Assets
Liabilities and Fund Balances
Liabilities:
Accounts payable
Due to other funds
Total Liabilities
Fund balances:
Nonspendable
Restricted for:
Debt Service
Committed
Assigned
Unassigned
Total fund balance
Total liabilities and fund balance
2015
$ 7,937,223
2014
$ 7,901,395
$ 7,937,223 $ 7,901,395
7,937,223 7,901,395
7,937,223 7,901,395
$ 7,937,223 $ 7,901,395
PFC2 -4
NEWPORT BEACH PUBLIC FACILITIES CORPORATION
Comparative Statement of Revenues,
Expenditures and Changes in Fund Balances
June 30, 2015 and 2014
Revenues:
Lease revenues
Investment income
Federal interest subsidy
Total revenues
Expenditures:
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over expenditures
Fund balance, beginning
Fund balance, ending
2015 2014
$ 8,237,395 $ 8,265,532
168 287
2,350,127 2,352,662
10,587,690 10, 618,481
2,860,000 2,775,000
7,691,862 7,781,076
10,551,862 10,556,076
35,828 62,405
7,901,395 7,838,990
$ 7,937,223 $ 7,901,395
PFC2 -5