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Comprehensive Annual Financial Report
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Comprehensive Annual Financial Report
For the Year Ended June 30, 2009
Prepared by the Administrative Services Department
Dennis C. Danner, Director
The City of Newport Beach was incorporated September 1, 1906
The present City Seal was adopted July 22, 1957
INTRODUCTORY SECTION o
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CITY OF NEWPORT BEACH
Comprehensive Annual Financial Report
Year Ended June 30, 2009
TABLE OF CONTENTS
INTRODUCTORY SECTION
(Unaudited)
Tableof Contents ......................................................................................... ..............................1
Letterof Transmittal... .............................................. ............... .................................................
5
GFOA Certificate of Achievement for Excellence in Financial Reporting ... .............................18
Listof City Officials ..................................................................................... .............................19
OrganizationChart ...................................................................................... .............................20
FINANCIAL SECTION
Independent Auditors' Report ............................................................... .............................23
Management's Discussion and Analysis ............................................. .............................27
(Required Supplementary Information)
Basic Financial Statements
Government -wide Financial Statements:
Statement of Net Assets .................................................................... .............................49
Statement of Activities ...................................................................... ...............................
50
Fund Financial Statements:
Governmental Funds:
BalanceSheet ................................................................................. .............................55
Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Assets ............................................................ .............................56
Statement of Revenues, Expenditures and Changes in Fund Balances ......................
57
Reconciliation of Statement of Revenues, Expenditures and Changes
In Fund Balances of Governmental Funds to the Statement of Activities ..............58
Budgetary Comparison Statements:
GeneralFund ............................................................................ .............................59
Tide and Submerged Land Fund ............................................... .............................61
ContributionsFund .................................................................... .............................62
Proprietary Funds:
Statement of Net Assets ............................................................. ...............................
65
Statement of Revenues, Expenses and Changes in Fund Net Assets .....................66
Statement of Cash Flows ............................................................. .............................67
Fiduciary Funds:
Statement of Fiduciary Assets and Liabilities — Agency Funds ..... ...............................
71
Notes to the Financial Statements ..................................................... .............................75
Supplementary Schedules
Non -Major Governmental Funds:
Combining Balance Sheet .................................. ............................... ............................132
Combining Statement of Revenues, Expenditures and Changes in
FundBalances ................................................... ............................... ............................140
Budgetary Comparison Schedules:
StateGas Tax Fund ........................................... ............................... ............................147
Asset Forfeiture Fund ........................................ ............................... ............................148
OTS DUI Grant Fund ......................................... ............................... ............................149
182
JAGFund ........................................................... ............................... ............................150
Circulation and Transportation Fund .................. ............................... ............................151
Building Excise Tax Fund ................................... ............................... ............................152
Combined Transportation Fund ......................... ............................... ............................153
Arterial Highway Rehabilitation Fund ................. ............................... ............................154
Community Development Block Grant Fund ...... ............................... ............................155
Air Quality Management District Fund ................. ............................... ..........................156
190
Environmental Liability Fund .............................. ............................... ............................157
Supplemental Law Enforcement Fund ............... ............................... ............................158
Traffic Congestion Relief Fund ........................... ............................... ............................159
Newport Coast Annexation Fund ....................... ............................... ............................160
Proposition 1B Transportation Fund .................. ............................... ............................161
Internal Service Funds:
Combining Statement of Net Assets .................. ............................... ............................165
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets.......
166
Combining Statement of Cash Flows ................. ............................... ............................167
Fiduciary Funds:
Combining Statement of Fiduciary Assets and Liabilities ................. ............................171
Statement of Changes in Fiduciary Net Assets .. ............................... ............................172
STATISTICAL SECTION (Unaudited)
Financial Trends:
NetAssets by Component ....................................... ............................... ............................175
Changesin Net Assets ............................................. ............................... ............................176
Fund Balances of Governmental Funds ................... ............................... ............................178
Changes in Fund Balance of Governmental Funds . ............................... ............................179
Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable Property ......... ............................181
Property Tax Rates, Direct and Overlapping Governments, Last Ten Fiscal Years ...........
182
Principal Property Taxpayers as of June 30, 2009 .. ............................... ............................183
Property Tax Levies & Collections ........................... ............................... ............................184
Debt Capacity:
Ratio of Outstanding Debt by Type .......................... ............................... ............................186
Outstanding Debt Serviced by the General Fund .... ............................... ............................188
Schedule of Direct and Overlapping Debt ................. ............................... ...........................189
Computation of Legal Debt Margin ................................... ................ ..................................
190
Revenue Bond Coverage, Last Ten Fiscal Years .... ............................... ............................192
V
Demographic and Economic Information
Demographic and Economic Statistics, Last Ten Fiscal Years ............... ............................194
PrincipalEmployers ................................................. ............................... ............................195
Operating Information:
Full Time City Employees by Function ...................... ............................... ...........................197
Operating Indicators by Function ............................. ............................... ............................198
Capital Asset Statistics by Function ......................... ............................... ............................200
Water Sold by Customer Type ................................. ............................... ............................202
WaterRates ............................................................. ............................... ............................203
MajorWater Customers ........................................... ............................... ............................204
3
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CITY OF NEWPORT BEACH
ADMINISTRATIVE SERVICES
Dennis Danner, Director /Treasurer
December 18, 2009
Honorable Mayor and Members of the
City Council,
and Citizens of the City of Newport Beach
Newport Beach, California
The City Charter and California state law require that the City of Newport Beach issue
annually a complete set of financial statements and that an independent firm of certified
public accountants audit this report in conformance with generally accepted auditing
standards (GARS). The Comprehensive Annual Financial Report (CAFR) of the City of
Newport Beach for the year ended June 30, 2009, is hereby submitted.
The CAFR was prepared in conformance with generally accepted accounting principles
(GAAP). The City's financial reporting is based upon all Governmental Accounting
Standards Board (GASB) pronouncements as well as Financial Accounting Standard
Board (FASB) statements and interpretations that were issued on or after
November 30, 1989 that do not conflict with or contradict GASB pronouncements. This
report consists of City management's representations concerning the finances of the
City of Newport Beach. Responsibility for the accuracy and completeness of the data
presented rests with the City. Management of the City is also responsible for
establishing and maintaining an internal control structure designed to ensure that the
assets of the government are protected from loss, theft, or misuse, and to ensure that
adequate accounting data is 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 a control should not exceed the benefits likely to be derived; and (2) the
valuation of costs and benefits requires estimates and judgments by management. We
believe the information presented in this report is complete and accurate in all material
respects, and that it is reported in a manner designed to fairly present the financial
position and results of operations of the various activities of the City of Newport Beach.
The City of Newport Beach's financial statements have been audited by Mayer Hoffman
McCann P.C., a firm of licensed certified public accountants. The goal of the audit was
to provide reasonable assurance that the financial statements of the City of Newport
Beach for the fiscal year ended June 30, 2009, are free of material misstatement. The
independent audit involved examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements; assessing the accounting principles used
and significant estimates made by management; and evaluating the overall financial
statement presentation. The independent auditor concluded, based on the audit, that
there was a reasonable basis for rendering an unqualified opinion that the City of
Newport Beach's financial statements for the year ended June 30, 2009, are fairly
3300 Newport Boulevard • Post Office Box 1768 • Newport Beach, California 92658 -8915
Telephone: (949) 644 -3127 - Fax: (949) 644 -3339 -Website: www.city.newport - beach.ca.us
5
presented in conformity with GAAP. The independent auditor's report is presented as
the first component of the financial section of this report. A narrative introduction,
overview, and analysis accompany the basic financial statements in the form of the
Management's Discussion and Analysis (MD &A). The letter of transmittal is designed to
complement the MD &A and should be read in conjunction with it. The City of Newport
Beach MD &A can be found immediately following the report of the independent auditors
and will provide further information regarding the format and content of this report. The
notes to the financial statements contain a summary of significant policies and
disclosures, including contingencies and subsequent events the reader should consider
in assessing the financial condition of the City.
PROFILE OF THE CITY
The City of Newport Beach is located in the coastal center of Orange County, in the
heart of Southern California, with Los Angeles County to the north and San Diego
County to the south. There are currently 34 cities within the County offering one of the
finest climates in the United States. Orange County is the third largest county in
California trailing Los Angeles and San Diego and is the sixth largest county in the
nation.
The general vicinity of Newport Beach and the County of Orange relative to the counties
of Los Angeles, San Bernardino, Riverside and San Diego is illustrated on the map
below:
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County log
Bernardino
® County
v\ ® Riverside
Orange County
County
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San`
Diego
County
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The City of Newport Beach is one of Southern California's most scenic and dynamic
communities. It surrounds Newport Bay, well known for its picturesque islands and one
of the greatest natural yacht harbors in the world, accommodating over 9,000 boats of
all types docked within its 21 square mile harbor area. This bay area and the ten miles
of ocean beach offer outstanding fishing, swimming, surfing, and aquatic sports
activities. The City has a permanent population of 86,252. During the summer months,
the population grows to over 100,000 with 20,000 to 100,000 tourists daily. There are
fine residential areas, modern shopping facilities, and a quality school system. A major
campus of the University of California is located immediately adjacent to the City, and
eight other colleges are within a 30 -mile radius.
The following map illustrates the communities within the City of Newport Beach; the
City's bay, recreational harbor and beachfront topography; and the City's location
relative to the bordering cities of Costa Mesa to the north, Irvine to the east and Laguna
Beach to the south.
Costs Mesa
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The
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The City of Newport Beach was incorporated September 1, 1906. The current City
Charter was adopted in 1954. The City operates under a Council- Manager form of
government. Council Members are elected by district but voted on by the population as
a whole, and serve four -year staggered terms. The governing council consists of the
mayor and six other members and is responsible for among other things, policy- making,
passing local ordinances, adopting the budget, appointing committees and hiring the
City Manager, City Attorney, and City Clerk. The City Manager is responsible for
carrying out the policies and ordinances of the City Council, for overseeing the day to
day operations of the City, and for appointing heads of departments. The City of
Newport Beach is a full service city providing its residents and visitors with the following
functional services: general governance, legal, financial, information technology, and
administrative management; police, fire, paramedic, lifeguard, and emergency medical
transport services; engineering, construction, and maintenance of public facilities, public
streets, beaches, and parks; planning, zoning, and economic development services;
building inspection, plan check, and code enforcement services; libraries and cultural
and arts services; recreation and senior services; and water, wastewater, rubbish
disposal, and street light utility services. The City provides water and sewer service to
most areas within City limits, but it does not provide gas, electrical, or other utility
service. Public elementary and secondary education is provided by school districts,
which are separate government entities.
Component Unit: The City's financial statements present the financial activity of the
City of Newport Beach (the primary government) and the Newport Beach Public
Facilities Corporation (a component unit of the City). The Corporation is blended into
the City's financial statements because of its operational and financial relationship with
the City. Even though it is a legally separate organization, City of Newport Beach
elected officials have continuing accountability for fiscal matters of the Corporation.
Additional information about the Newport Beach Public Facilities Corporation and the
reporting entity in general can be found in Footnote 1a of the notes to the financial
statements.
Budget: The annual budget serves as the foundation for the City of Newport Beach's
financial planning and control. The Administrative Services Department, with City
Manager direction, develops budget guidelines and appropriation limits for each
department every year in January. The departments then submit revenue and
expenditure appropriation requests which are summarized by the Administrative
Services Department and presented to the City Manager for review. The City Manager
then meets with each department and prepares a proposed budget document for the
City Council. The City Council holds a budget hearing and adopts a budget on or
before June 30, the close of the City's fiscal year.
Budgets are adopted for the General Fund and Special Revenue Funds. The legal level
of budgetary control is at the fund level. The City Manager is authorized to transfer
budgeted amounts between departments within any fund; however, any revisions which
increase the total appropriations of any fund over $10,000 must be approved by the City
Council.
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From 1950 to 2009, the population of the City increased from 12,120 to 86,252. As
vacant land becomes increasingly scarce, population growth is expected to flatten
considerably as the City becomes relatively built -out. According to the Center for
Demographic Research at California State University Fullerton, the City of Newport
Beach will be home to an estimated 91,321 residents by the year 2015.
Newport Beach's physical setting encompasses about 25.3 square miles of land, of
which approximately 75% is developed and 25% is undeveloped including the City's
coastal beaches used for recreation and open space. The developed land is 70%
residential and 30% non - residential. Of the City's 41,850 residential dwelling units, 60%
of the housing is single - family units and 40% is multi - family units.
This current land use mix produces General Fund revenues of approximately
$150 million. Tax revenues represent nearly 76.7% of all General Fund revenues while
only 23.3% is generated by other revenue sources. The top three individual revenue
sources, Property Taxes, Sales Taxes and Transient Occupancy Taxes (TOT),
represent 71 % of all General Fund revenues.
General Fund Revenues
■ Property Taxes
AM ■ Sales Taxes
■ Sales Tax In Lieu
■ Transient Occupancy Taxes
■ OtherTaxes
7.5
■ All Other Sources
!Q 5.0%
Property Taxes: Property taxes account for 46.7% of all General Fund revenues..
Property taxes generated with the City limits are distributed amongst various local
governments. The City receives, on average, 16.5% of the property taxes paid by
Newport Beach residents. The remainder goes to school districts, the County, and
other government entities.
Sales Taxes: In March of 2004, voters approved Proposition 57 which allowed the
State to enact revenue swapping procedures commonly referred to as the "Triple Flip."
In doing so, Sales Taxes were reallocated to cities in two separate revenue streams
"Sales Taxes" and "Sales Taxes In Lieu" which impacted the timing and distribution
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method but did not materially impact the revenue category in total. Sales Taxes and
sales taxes in lieu represent 16.9% of all General Fund revenues.
The City's sales tax base is generated from a relatively diverse business community
and is not dependent on any one merchant or industry. The following chart
demonstrates the diversity of the City sales tax revenue. The largest segment,
"Restaurants," accounts for 19.4% of total sales taxes and is represented by 311
restaurants. The next largest segment, "Auto Sales - New," accounts for 19.1 % of total
sales taxes and is represented by 9 dealerships. The "Other" categorization accounts
for another 15.6% and is represented by 785 businesses.
Sales Tax by Business Segment
2.4% 4,q
2.8
4.0%
4.7%
6.2%
7.6%
8.1% 10.1%
■ Restaurants- 311
■ New Auto Sales - 9
■ Leasing -64
• Miscellaneous Retail- 805
• Department Stores -19
• Apparel Stores - 178
• Service Stations - 21
• Food Markets -40
• Office Equipment -75
• Furniture / Appliance - 149
■ Other -785
Transient Occupancy Taxes (TOT): The TOT accrues to the City at a rate of 10% of
room charges (with 18% of this collection going to the local Conference and Visitors
Bureau). The City distinguishes its transient occupancy taxpayers in two broad property
type categories, commercial and residential property. The commercial category is
composed of approximately twenty inns, motels, hotels and resorts and accounts for
89% of TOT revenues. The residential category is made up of some 700 vacation
rentals representing only 11% of TOT revenue. Together, they account for nearly
$11.2 million in annual TOT revenue.
Annual
Revenue Percent
(In Millions) of Total
Commercial Property:
Inns, Motels and Hotels $10.0 89%
Residential Property:
Vacation Rentals $ 1.2 11%
$11.2 100%
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ECONOMIC OUTLOOK & FACTORS EFFECTING FISCAL PLANNING
U.S. Economy: In the fall of 2008, the national economy began a freefall which has
continued through the second quarter of 2009. Current data and consensus amongst
economists, however, suggest the national economy is stabilizing and the recovery has
begun. During the third quarter of 2009, the Gross Domestic Product (GDP) turned
around and grew at a rate of 3.5 %. Dampening this news is some speculation that the
turn - around was largely bolstered by federal stimulus spending and the underlying
recovery of the economy is occurring more modestly. As can been seen in the chart
below, the California Legislative Analyst Office (LAO) projects the annualized real GDP
growth to bottom -out at -2.5% in 2009 before slowly returning to modest growth of 2% in
2010 and 3% in 2011.
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
U.S. Real GDP Growth
2004 2005 2006 2007 2008 2009 2010 2011
Estimated Projected Projected
3.6% 1 3.1% 1 2.9% 1 2.0% 1 0.4% -2.5% 2.0% 3.0%
Source: LAO's Economic Forecast
State of California Economic Recovery: Like the national economy, the State of
California economy is in recovery. The pace of job losses has subsided and home sales
are on the rise. The recession in California will likely end in 2009 but since the recession
started earlier and fell sharper than the rest of the nation, the California economy has
further to travel as demonstrated by the table below:
Unemployment Rate (Percent)*
Actual
Estimated
Forecast
2008
2009
2010 2011 2012
United States 5.8
9.2
10.0 9.4 8.5
California 7.2
11.7
12.1 11.3 10.2
* Source: LAO Economic Forecast
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California State Budget: The State budget is of great concern to all cities, including
Newport Beach. The State's inability to achieve meaningful on -going budget solutions
has resulted in massive lingering budget problems in the coming months and into the
foreseeable future. As depicted by the following chart, the LAO projects a $6.3 billion
deficit for 2009 -10 and a $14.4 billion shortfall between revenues and expenditures in
2010 -11 with similar projections for the succeeding years.
0 �-
-5
-10
-15
-20
-25
State Budget Operating Shortfalls
(In Billions)
2009 -10 2010 -11 2011 -12 2012 -13 2013 -14 2014 -15
Source: lAO's California Fiscal Outlook
Considering the projected annual shortfalls, a plan that permanently addresses the
State's structural deficit represents an enormous challenge and will require substantial
ongoing solutions.
LOCALECONOMY
Local Impact of the State's Budget Crisis
As the State's budget deficits continue to balloon, there is a considerable risk that the
State may attempt to shift the burden to local governments by reallocating or
permanently shifting revenues from local governments. In the early nineties, the State
enacted a number of permanent revenue shifts from local governments to schools. The
cumulative impact of the ERAF shifts I, II and III since 1993 have cost City of Newport
Beach taxpayers in excess of $89 million.
As a part of the State's 2009 -10 budget initiatives, the State acted to defer certain tax
sources due to local governments including 8% of local property taxes, certain highway
users taxes (gas tax) and traffic congestion relief taxes. The State took these actions to
replace a portion of the shortfall in state revenues associated with current economic
conditions. With regard to the property tax borrowing, legislation was signed into law on
July 28, 2009 that enabled the State of California to borrow $6.2 million of property tax
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revenue due to the City in fiscal year 2009 -10. On November 10, 2009, the California
Statewide Communities Development Authority (CSCDA) issued debt to provide to
participating local governments, 100% of the property tax revenue that the State had
been authorized to borrow. The bonds provide for the borrowed funds to be remitted to
the participating local governments in two installments (on January 15, 2010 and on
May 3, 2010).
Although the 2009 -10 State budget actions thus far have largely represented short-term
borrowings rather than permanent revenue shifts, we are very concerned that the State
will continue to look at local government revenues sources as a means to resolve their
staggering budget problems.
Property Taxes: Unlike many cities, property taxes, not sales taxes, are the number
one source of revenue for the City of Newport Beach, representing 46.7% of all General
Fund revenues. Due to the limited supply of scenic coastal property and the unique
access to the scenic Newport Bay and one of the best recreational yacht harbors, the
Newport Beach community has been developed into in affluent residential
neighborhoods (70 %) and high -end commercial districts (30 %).
Despite the dramatic declines in the real estate market, sales data for the month of
October, 2009, demonstrates the relatively high density of affluence throughout the
residential communities. Median home sales prices in all areas of the City approach or
exceed $1 million.
CITY OF NEWPORT BEACH
Median Home Sales*
Comparitive Month Ending November
* Source: DataQuick Information Systems
Due to a vigorous demand for coastal property, the City has enjoyed long -term growth
trends with its number one revenue source. Over a ten -year period, assessed valuation
increased an average of 9.48% per annum and 6.76% over a twenty -year period. Since
Californians passed Proposition 13 in 1978, assessed property value is reassessed to
market value only when the property changes ownership. Otherwise, the assessed
value grows by no more than 2% per year. This practice creates a constant lag and
buffer between assessed and market values, effectively insulating the tax base from
more erratic market value gyrations.
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Median
Median
Number of
Number of
Newport Beach
Sales
Price
Sales Price
Home Sales
Home Sales
Zip Code
2008
2009
2008
2009
92625
$
3,000,000
$
1,500,000
9
8
92660
$
1,225,000
$
1,061,250
8
33
92661
$
3,450,000
$
1,950,000
2
4
92663
$
2,350,000
$
810,000
1
18
92657
$
1,393,000
$
1,535,000
5
20
All Orange County
$
400,000
$
432,000
2,177
2,528
* Source: DataQuick Information Systems
Due to a vigorous demand for coastal property, the City has enjoyed long -term growth
trends with its number one revenue source. Over a ten -year period, assessed valuation
increased an average of 9.48% per annum and 6.76% over a twenty -year period. Since
Californians passed Proposition 13 in 1978, assessed property value is reassessed to
market value only when the property changes ownership. Otherwise, the assessed
value grows by no more than 2% per year. This practice creates a constant lag and
buffer between assessed and market values, effectively insulating the tax base from
more erratic market value gyrations.
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Although assessed value growth has slowed for the last several years and will likely
continue to decrease in 2010 -11, we are hopeful that assessed valuations will modestly
rebound in years thereafter.
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
-2.00%
20 YearAssessed Property Value Growth
*The 2000 -03 datapoint was normalized to reduce the impact the Newport Coast Annexation had on the
assessed valuation growth trendline.
Although the City has normally been any able to rely on steady growth in assessed
valuation of 4% or more, it is probable the City will build the 2010 -11 budget
assumptions around a zero growth scenario with contingencies for a decline of
assessed valuation.
Sales and Transient Occupancy Revenues: Because sales tax and TOT revenues
follow consumer behavior, they are much more volatile than property taxes. The current
economic recession, falling home prices and tightening credit policies have significantly
depressed consumer spending patterns. Sales taxes have contracted precipitously
during 2008 -09 and are expected to continue to decline in 2009 -10 until employment
conditions improve and consumer confidence is restored. Transient occupancy tax
collections generally follow a similar trend as sales taxes but are somewhat muted due
to recent hotel expansions and the addition of a new luxury resort. TOT revenues are
14
—�— Assessed Value Growth
Trend line(3Yr Average Growth)
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*The 2000 -03 datapoint was normalized to reduce the impact the Newport Coast Annexation had on the
assessed valuation growth trendline.
Although the City has normally been any able to rely on steady growth in assessed
valuation of 4% or more, it is probable the City will build the 2010 -11 budget
assumptions around a zero growth scenario with contingencies for a decline of
assessed valuation.
Sales and Transient Occupancy Revenues: Because sales tax and TOT revenues
follow consumer behavior, they are much more volatile than property taxes. The current
economic recession, falling home prices and tightening credit policies have significantly
depressed consumer spending patterns. Sales taxes have contracted precipitously
during 2008 -09 and are expected to continue to decline in 2009 -10 until employment
conditions improve and consumer confidence is restored. Transient occupancy tax
collections generally follow a similar trend as sales taxes but are somewhat muted due
to recent hotel expansions and the addition of a new luxury resort. TOT revenues are
14
currently expected remain at 2008 -09 revenue levels before modestly rebounding in
2010 -11.
IIM01"121Mh UIJ_\01 [y /_10»_1► 1011ki Lei
The City takes long -term financial planning seriously and has developed several master
replacement plans for its critical assets and infrastructure including major facilities,
street pavement, water and sewer infrastructure, and City vehicles and heavy
equipment. The City retains actuaries to predict and fund long -term liabilities including
workers compensation, general claim liabilities, pension liabilities and post employment
health care liabilities. Reserve levels and annual required funding contributions are set
by Council policy. In the case of workers compensation and general liability, annual
contribution rates are targeted to accumulate cash reserves in excess of the
$11.9 million and $5.9 million expected liability respectively, to achieve at least a 75%
confidence funding level of $13.2 million and $6.1 million respectively. Except for the
implied subsidy component of the City's post employment health care plan (OPEB
liability), the City policy is to fund the cash subsidy of our OPEB liability of $ 2.7 million
and pension liabilities of $18.4 million at 100% of the actuarially determined annual
required contribution (ARC). Because the City pays the entire ARC each year, its net
pension and net OPEB obligation at the end of each year is $0 (except for the implied
subsidy component of OPEB which is funded on a pay -as- you -go basis).
To mitigate the rising cost of pension plans, the City is actively pursuing cost sharing
agreements with our employee associations pertaining to pension plans. Regarding
OPEB plan liabilities, the City closed the defined benefit component of the OPEB plan to
new participants in 2006. The new plan resembles a defined contribution style plan
through which once the contribution is made the employee account, the employer has
no further funding obligation to the plan. See footnotes 10 and 11 of the notes to the
financial statements for further information on the funding status of the City's pension
and OPEB plans.
Stewardship: The City has long taken a conservative approach to forecasting
revenues, often assuming a "worst case scenario." This fiscal conservatism has
created a stable financial base. As a result, even in a downturn, the City of Newport
Beach is able to maintain its services at a high level, while reducing expenses to
accommodate reduced revenues. The City's fiscal discipline has allowed it to prepare
balanced budgets and save, both during prosperous and difficult economic periods.
While the current recession is much deeper than expected, management and the
Council were able to act swiftly to trim the operating budget at the midpoint of the 2008-
09 fiscal year, averting a decline in the fund balance of the General Fund. The General
Fund ended the year with a $79.1 million fund balance, a net increase of $552,000. Of
this amount, $5.8 million is reserved and is not available to finance new activities
because it has already been committed to fulfill contractual obligations or is otherwise
legally restricted beyond the City Council's control. Within the Council's discretion, the
City Council has designated $18.6 million for contingencies, $13.1 million for
unspecified future appropriations, $4.7 million for capital projects that were not
15
completed during the fiscal year, and $37.3 million designated for other special
purposes including $25.0 million designated for the City's facilities replacement plan and
$5.0 million designated to offset unexpected increases in PERS pension costs.
2009 -10 Cost Saving Measures: After the date of this report's balance sheet but prior
to the issuance of this report, it became clear that deteriorating revenues would present
budget short -falls in 2009 -10. With the approval of City Council, management initiated
an Early Retirement Incentive Plan (ERIP) with intent to further trim the City's overall
cost structure. A total of 51 people participated in the plan and this action is expected to
save nearly $3.1 million annually. Additionally, the City has initiated a second phase
restructuring effort to effect additional long -term cost savings and improved efficiencies.
Major Initiative: While 2010 -11 will likely present another challenging budget year,
plans for a new Civic Center Project, which includes a parking structure and library
additions, are underway that will be integrated in a 16 -acre passive park with ocean
views. The costs of the improvements are expected to exceed $100 million and will
require bond financing. The Civic Center project has been reviewed in context of all
critical City facility replacement plans and the City has judiciously set aside $25 million
to pre -fund debt service and or construction expenditures. The City's facilities
replacement policy limits General Fund contributions to debt service to not more that
5% of total General Fund expenditures in any one year as added measure to insure
long -term sustainability and fiscal prudence.
AWARDS AND ACKNOWLEDGMENTS
Awards: The City has prepared a comprehensive annual financial report for the past
17 years. The City has received awards for excellence in financial reporting each of
those years.
The Government Finance Officers Association of the United States and Canada
(GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to
the City of Newport Beach for its comprehensive annual financial report for the fiscal
year ended June 30, 2008. In order to be awarded a Certificate of Achievement, a
government unit must publish an easily readable and efficiently organized
comprehensive annual financial report. This report must satisfy both generally accepted
accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our
current comprehensive annual financial report continues to conform to the Certificate of
Achievement program requirements and we are submitting it to GFOA to determine its
eligibility for another certificate.
Acknowledgments: Preparation of this report was accomplished through the efficient
and dedicated services of virtually everyone in the City's Accounting Division and the
Graphics and Print Services unit. In addition, members of the Administrative Services
tL
Department would like to thank the City Manager, and the Mayor and City Council for
their interest and support in planning and conducting the financial operations of the City
in a responsible and progressive manner. We would also like to thank our auditors,
Mayer Hoffman McCann P.C., for their time and assistance in the preparation of the
report. This report was completely prepared and published by City employees.
David A Kiff
City Manager
17
Richard C. Kurth
Acting Administrative Services Director
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Newport Beach
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
June 30, 2008
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
"'CE 0
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President
WktORPORR }p�£
Executive Director
,1
L to R: Council Member Michael F. Henn, Mayor Pro Tern Keith D. Curry, Mayor Edward D. Selich,
Council Members Leslie J. Daigle, Nancy Gardner, Steven Rosansky and Don Webb
City Attorney
David R. Hunt
Sharon Wood...........
Dave Kiff ..................
Dennis C. Danner....
Jay Elbettar .............
Steve Lewis .............
Mark Harmon...........
Terri L. Cassidy .......
Cynthia Cowell ........
David Lepo ..............
John Klein ................
Steve Badum...........
Laura Detweiler.......
George Murdoch .....
City Manager
Homer L. Bludau
City Clerk
Leilani Brown
............Assistant City Manager /Director of Community & Economic Development
............................................................ ............................... Assistant City Manager
............. ............................... .................Administrative Services Director /Treasurer
................ ................ ........................... — ................................... ..... Building Director
.................................................................................. ............................... Fire Chief
........................................................ ............................... General Services Director
...................................................... ............................... Human Resources Director
.................................. ............................... ........................Library Services Director
............................................... ............................... .......................Planning Director
.............................................................................. ............................... Police Chief
............................................................... ............................... Public Works Director
. .................... I .............................................. Recreation & Senior Services Director
........................................................................ ............................... Utilities Director
19
ELECTORATE
r BUILDING CODE — 1
BOARD OFAPPEALS
cimLSERVic E BOARD CIN CLERK
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PLANNING COMMISSION
L- - - - - -J
ASSISTANT CITY MANAGER
Communlryane E cOevebpmeM
Case Enmrc nbrcemeM
PLANNING
Land use and Development
Long -Range Planning
Planning Commission Suppod
Housing Pmgrams
BUILDING
Administration Plan ChecWPartnit Services
Public Counts, Inspections
Use and Occupancy Residential Building Records
FIRE
Fire Suppression (Operations) Ocean Lifeguards
Training and Education Hazardmus Materials
Flo, Prevention Junior Lifeguard Progrem
Adminuart Ememan, Medical Services
POLICE
Patrol Support Services
Tic Chief M Police
Dinsurve
MAYOR
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COUNCIL
N CITYATTORNEY I
CITY MANAGER
ADMINISTRATIVE SERVICES
AucountinglRepodinglBudgeting
Treasury Management
8111iog & Receivables
FayrdllACmunts Payable
Cashiering
Geographic tnformatian Systems
Revenue
Information Tecbnolagy
Purchasing & Warehousing
Ponting & Postal Be,!.
O
ELECTED OFFICIALS
Fiscal Year 2008 -2009
r — — — — — — i
BOARD OF LIBRARY TRUSTEES
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RECREATION COMMISSION
r- - - - - -�
CIP"ARfS COMMISSION
L - - - - - -J
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-ARBOR COMMISSION
L- - - - - -J
ASSISTANT CITY MANAGER
Naddftesources
PuLtlIC lMwnalion
Env
Mnmanpl Enldr meM
UTILITIES
Water Service wastawater Collection
ElecNcal Services Oil & Gas Production
Admimandebon almost Lights
GENERAL SERVICES
Pales and Trees
Operations Support
Field Maintenance
Traffic, Signs &Makings
Building Maintenance
Refuse Collection
Equipment Maintenance
Recycling
PUBLIC WORKS
Engineering CIP Oesgn& Constmtlion
Infrastructure Master Planning Development Services
Traffic Planning &Engineering Public Right of Way Permitting
LIBRARY SERVICES
Central Llbrary & Brancfrea Information & Reference Services
Adult BYouth Programs Ada B Cultural Services
Literacy Services Board of Library Trustees Suppart
City Ada Ch iasicn Support Sister City Araocil Support
RECREATION & SENIOR SERVICES
Youth B Adult Spode Programs Senior Programs B Services
Plsygroundi Development Special Events
=acuity ManagemenUReservations FBI Commission Suppod
HUMAN RESOURCES
RecmiMent
General Liability
EmployeelLabor Relations
Benefits Administration
ClassificationlCompensatum
Workers' Compensation
Citydide Training
R.N. Countering 8, Benefits
Civil Service Board Support
Gridiron." 01soiplinW
r - - - -� 0
COUNCILAPPOINTEO BOARDS & COMMISSIONS COUNCILAPPOINTED POSITIONS CITY DEPARTMENTS
20
FINANCIAL SECTION
INDEPENDENT z
AUDITORS' REPORT 0
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Mayer Hoffman McCann P.C.
An Independent CPA Firm
2301 Dupont Drive, Suite 200
Irvine, California 92612
949-474 -2020 ph
949 -263 -5520 fx
i www.mhm- pc.com
City Council
City of Newport Beach
Newport Beach, California
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying basic financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of the
City of Newport Beach, California, as of and for the year ended June 30, 2009, which
collectively comprise the City's basic financial statements, as listed in the table of contents.
These financial statements are the responsibility of the City of Newport Beach's management.
Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Andifing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
basic financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the basic 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 of Newport
Beach, as of June 30, 2009, and the respective changes in financial position and cash flows,
where applicable, of the City of Newport Beach, California and the respective budgetary
comparison information for the general fund and major special revenue funds of the City for the
year then ended in conformity with accounting principles generally accepted in the United States
of America.
The information identified in the accompanying table of contents as management's discussion
and analysis and required supplementary information is not a required part of the basic financial
statements, but is supplementary information required by the accounting standards generally
accepted in the United States of America. We have applied certain limited procedures, which
consisted principally of inquiries of management regarding the methods of measurement and
presentation of the required supplementary information. However, we did not audit the
information and express no opinion on it.
23
City Council
City of Newport Beach
Newport Beach, California
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Newport :Beach's basic financial statements. The introductory
section, combining and individual nonmajor fund financial statements, schedules and statistical
tables are presented for purposes of additional analysis and are not a required part of the basic
financial statements. The combining and individual nonmajor fund financial statements and
schedules have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole. The introductory section and statistical tables have
not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we express no opinion on them.
In accordance with Governnreru Aucliling Sicindarets, we have also issued a report dated
December 13, 2009 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, grant
agreements and other matters. The purpose of that report is to describe the scope of our testing;
and not to provide an opinion on the internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auc/ith ,
Sicu ilorels and should be considered in assessing the results of our audit.
Irvine, California
December 18, 2009
24
FINANCIAL SECTION
MANAGEMENTS z
DISCUSSION AND ANALYSIS 0
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MANAGEMENT'S DISCUSSION AND ANALYSIS
This section of the City of Newport Beach's Comprehensive Annual Financial Report
(CAFR) presents management's discussion and analysis of the City's financial
performance during the fiscal year that ended on June 30, 2009. This analysis should
be read in conjunction with the Transmittal Letter at the front of this report and the
accompanying Basic Financial Statements.
FINANCIAL HIGHLIGHTS
Long -term Economic Resource (Government -wide) Focus — Economic resources
are differentiated from financial resources in that the economic measurement focus
measures changes in net assets as soon as the event occurs regardless of the timing of
related cash flows. Therefore, this measurement focus includes both current spendable
resources and fixed non - spendable assets, and long -term claims against these assets.
The resulting net assets utilizing this measurement focus provides one measure of the
City's overall long -term financial condition.
• The assets of the City exceeded liabilities at the close of the most recent fiscal
year by $2.322 billion. The vast majority of this figure is represented by illiquid
capital assets including land and infrastructure. Capital assets net of accumulated
depreciation and any related debt totaled $2.170 billion, while the remaining
balance of net assets totaled $151.9 million. Of this amount, $107.7 million
represents unrestricted net assets that may be used to meet the City's ongoing
obligations to citizens and creditors for both governmental and business -type
activities.
• The City's total net assets increased $21.4 million (0.93 %) to $2.322 billion as a
result of current year activities. The increase is partially attributable to donations
totaling in the amount of $6.4 million associated with the construction of the new
OASIS Senior Center, property owner contributions associated with the new
assessment districts, two parcels of land contributed in the amount of $8.4 million
by a developer as a condition of development in the Fashion Island area of the City
(North Newport Center Development Agreement) and smaller capital projects.
• The City's total debt decreased by $1.1 million, from $51.7 million to $50.6 million,
during the current fiscal year. The decrease is the net result of regular debt service
payments of $16.2 million combined with an increase in our estimate of our OPEB
liability of $5.4 million.
Short -term Financial Resources (Fund) Focus — The financial resources focus
measures inflows of current spendable assets. The resulting net difference between
current financial assets and current financial liabilities otherwise known as fund balance
(or net working capital in the private sector) is a measure of the City's ability to finance
activities in the near term.
27
• At the close of the current fiscal year, the City's Governmental Funds reported a
combined ending fund balance of $121 million, an increase of $4.1 million.
Approximately $106.4 million is unreserved fund balance available to fund current
obligations at the City Council's discretion. Of the $106.4 million unreserved fund
balance, City Council has designated $18.6 million for contingencies, $13.1 for
unspecified future appropriations, $4.7 million for capital projects that were not
completed during the fiscal year, and $39.6 million designated for other special
purposes including $25 million for facilities identified for replacement in the City's
facilities replacement plan. The remaining $30.4 million is made up of smaller
amounts designated across various funds.
• The General Fund reported an increase of $0.6 million in fund balance after
transferring $22.2 million to other funds. Of this transfer, $20.3 million represented
a routine transfer to subsidize the operations of the Tide and Submerged Land
Fund and a $0.5 million transfer to the Contributions Fund. The remaining $1.4
million represented various nonrecurring transfers to other funds.
• At the end of the current fiscal year, unreserved fund balance for the General Fund
was $73.7 million, or 57.6% of total General Fund expenditures. Although
unreserved and available to fund current obligations, 100% of this balance is
designated for contingencies, capital projects, appropriations, and other special
purposes.
OVERVIEW OF THE FINANCIAL STATEMENTS
The financial section of the comprehensive annual financial report contains the following
information: Independent Auditors' Report, Management's Discussion and Analysis (this
section), the Basic Financial Statements, and the Supplementary Information section,
an optional section that presents combining and budgetary schedules for individual non -
major funds. The Basic Financial Statements are comprised of three components: 1)
Government -wide Financial Statements, 2) Fund Financial Statements and, 3) Notes to
the Financial Statements. Management's Discussion and Analysis is intended to be an
introduction to the Basic Financial Statements.
BASIC FINANCIAL STATEMENTS
Government -wide Financial Statements — The Government -wide Financial
Statements are intended to provide a "Big Picture" view of the City as a whole using
accounting methods similar to those used by private sector companies. The statement
of net assets includes all of the City's assets (including non - spendable assets like
streets, roads, and land rights) and liabilities (including long -term liabilities that may be
paid over twenty or so more years). All of the current year revenues and expenses are
accounted for in the statement of activities regardless of when cash is received or paid.
28
The two Government -wide Financial Statements report the City's net assets and how
they have changed. Net assets — the difference between the City's assets and liabilities
— is one way to measure the City's financial health, or position. Over time, increases or
decreases in the City's net assets are an indicator of whether its financial health is
improving or deteriorating, respectively. To assess the overall health of the City, one
should also consider additional non - financial factors such as changes in the City's
property tax base and the condition of the City's roads.
The Government -wide Financial Statements of the City are divided into two categories:
Governmental Activities — This statement depicts the extent to which programs
are self- supporting and the net amount provided by property taxes and other
general revenues. Most of the City's basic services are included in this category,
such as the public safety, public works, community development, community
services and general administration. Taxes and other general revenues finance
most of these activities.
Business -type Activities — The City accounts for its Water and Wastewater
utilities as business enterprises. The City charges fees to customers to recover
the cost of providing Water and Wastewater services.
Fund Financial Statements — Funds are accounting devices that the City uses to track
and control resources intended for specific purposes. The Fund Financial Statements
provide more detailed information about the City's most significant funds (major funds)
but not the City as a whole. Some funds are required by State and Federal law or by
bond covenants. Other funds are utilized simply to control and manage resources
intended for particular purposes.
The City utilizes three broad categories of funds:
Governmental 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 utilize the financial
resources measurement focus and thus concentrate on near -term inflows and
outflows of spendable resources, as well as on balances of spendable resources
available at the end of the fiscal year. Consequently, the Governmental Fund
Financial Statements provide a detailed short-term view that helps a reader
determine whether there are more or fewer financial resources that can be spent
in the near future to finance City programs. Also included in the Governmental
Funds are Permanent Funds. These funds are used to report resources that are
legally restricted to the extent that only earnings, not principal, may be used for
purposes that support City programs.
Proprietary Funds — Services for which the City charges customers a fee are
generally reported in Proprietary Funds (Enterprise Funds and Internal Service
Funds). Like the Government -wide Financial Statements, these funds provide
29
both long and short-term financial information utilizing the economic resources
measurement focus. The City's Enterprise Funds (Water and Wastewater Funds)
are individual funds represented in the combined presentation of Business -type
Activities in the Government -wide Financial Statements. The individual fund
presentation provides more detailed information about each business segment,
its operating statements, and statements of cash flow. The City also uses Internal
Service Funds that are utilized to report and allocate the cost of certain centrally
managed and operated activities (e.g. fleet maintenance, risk management,
retiree insurance, etc.). Because the Internal Service Funds primarily serve the
government, they are reported with Governmental Activities rather than the
Business -type Activities in the Government -wide Financial Statements.
Fiduciary Funds — The City utilizes Fiduciary Funds to account for assets held
by the City in a trustee capacity, or as an agent for other governmental entities,
private organizations, or individuals. All of the City's fiduciary activities are
reported in a separate statement of fiduciary net assets and a statement of
changes in fiduciary net assets. We exclude these activities from the City's
Government -wide Financial Statements because the City cannot use these
assets to finance its operations.
Notes to the Financial Statements — The financial statements also include the Notes
to the Financial Statements that provide important narrative details about the
information contained in the financial statements. Information contained in the Notes to
the Financial Statements is critical to a reader's full understanding of the Government -
wide and Fund Financial Statements.
Supplementary Information — In addition to the required elements of the Basic
Financial Statements, we have also included a Supplementary Information section,
which includes budgetary and combining schedules that provide additional details about
the City's non -major Governmental Funds, Internal Service Funds, and Fiduciary Funds.
GOVERNMENT -WIDE FINANCIAL ANALYSIS
Net Assets — Net assets may serve a useful indicator of a government's overall
financial condition over time. The City's combined net assets for the year ended June
30, 2009, as shown in Table 1, were $2.322 billion, increasing $21.4 million over the
prior year.
30
Current and other assets
Capital assets
Total assets
Long -term liabilities outstanding
Other liabilities
Total liabilities
Net assets
Invested in capital assets, net of debt
Restricted
Unrestricted
Total net assets
Table 1
Net Assets
(in thousands)
Governmental Activities Business -Type Activities
2008 2009 2008 2009
Total
2008 2009
$ 175,010
$ 182,934
$ 18,288 $
15,234
$ 193,298
$ 198,168
2,070,835
2,084,794
108,954
108,642
2,179,789
2,193,436
2,245,845
2,267,728
127,242
123,876
2,373,087
2,391,604
48,600
49,009
3,095
1,585
51,695
50,594
17,527
16,594
3,194
2,346
20,721
18,940
66,127
65,603
6,289
3,931
72,416
69,534
2,050,925
2,061,636
107,314
108,510
2,158,239
2,170,146
40,989
44,213
-
-
40,989
44,213
87,803
96,276
13,639
11,435
101,442
107,711
$ 2,179,717
$ 2,202,125
$120,953 $
119,945
$2,300,670
$2,322,070
Invested in Capital Assets - By far the largest component of net assets, $2.170 billion
(93.4 %), reflects the City's investment in capital assets (e.g., land, buildings,
infrastructure, and equipment) less accumulated depreciation and any related
outstanding debt used to acquire those assets. The City's capital assets do not
represent a financial resource and consequently are not readily available for funding
current obligations.
Restricted Assets - An additional portion of the City's net assets, $44.2 million (1.9 %),
represents resources that are subject to external restrictions on how they may be used.
Unrestricted Assets - The remaining balance of unrestricted net assets, $107.7 million
(4.6 %), may be used to meet the City's ongoing obligations to citizens and creditors.
• Overall, the City's net assets increased $21.4 million in the current fiscal year. The
increase is partially attributable to the donations associated with the construction of
the new OASIS Senior Center, property owner contributions associated with the
new assessment districts, two parcels of land contributed by a developer as a
condition of development in the Fashion Island area of the City (North Newport
Center Development Agreement) and smaller capital projects. Other key financial
activity for the year ended June 30, 2009, is shown in Table 2.
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Table 2
Changes in Net Assets
(in thousands)
Governmental Activities Business -Type Activities
2008 2009 2008 2009
Total
2008 2009
Revenues:
Program Revenues:
Charges for services $ 40,122 $ 36,739 $ 20,823 $ 20,446 $ 60,945 $ 57,185
Operating grants and capital contributions 15,779 13,404 - - 15,779 13,404
Capital grants and contributions 31,038 24,634 - - 31,038 24,634
General Revenues:
Taxes:
Property taxes
Sales tax
Sales tax in -lieu
Transient occupancy taxes
Othertaxes
Intergovernmental (Unrestricted):
Motor Vehicle License Tax
Investment related income
Miscellaneous
Total revenues
Expenses:
General government
Public safety
Public works
Community development
Community services
Interest
Water
Wastewater
Total expenses
Increases in net assets
Net asset at beginning of year
Net assets at end of year
67,389
70,127
-
-
67,389
70,127
21,855
17,926
-
-
21,855
17,926
8,018
7,503
-
-
8,018
7,503
12,751
11,171
-
-
12,751
11,171
8,277
8,465
-
-
8,277
8,465
373
356
-
-
373
356
4,164
2,862
662
511
4,826
3,373
1,859
1,863
-
-
1,859
1,863
211,625
195,050
21,485
20,957
233,110
216,007
15,557
16,431
-
-
15,557
16,431
75,821
79,301
-
-
75,821
79,301
42,631
45,600
-
-
42,631
45,600
10,053
10,284
-
-
10,053
10,284
19,147
20,589
-
-
19,147
20,589
532
437
-
-
532
437
-
-
20,148
18,211
20,148
18,211
3,423
3,753
3,423
3,753
163,741
172,642
23,571
21,964
187,312
194,606
47,884
22,408
(2,086)
(1,007)
45,798
21,401
2,131,833
2,179,717
123,039
120,953
2,254,872
2,300,670
$2,179,717
$ 2,202,125
$120,953
$ 119,946
$2,300,670
$2,322,071
Governmental Activities - The cost of all governmental activities in the current fiscal
year was $172.6 million. As shown in the statement of activities, $36.7 million of the
cost was paid by those who directly benefited from the programs, $38 million was
financed by contributions and grants received from other governmental organizations,
developers, and property owners for both capital and operating activities, and
$97.9 million was subsidized through general City revenues.
Net assets for governmental activities of the City at the beginning of the year were
$2.18 billion, and increased by $22.4 million by the end of the year. The increase is
partially attributable to the donations associated with the construction of the new OASIS
Senior Center, property owner contributions associated with the new assessment
districts, two parcels of land contributed by a developer and smaller capital projects.
32
The City is a full service city providing residents and visitors with the following functional
services:
General Government is comprised of six departments (City Council, City Clerk, City
Manager, City Attorney, Human Resources, and Administrative Services) providing
general governance, executive management, legal services, records management, risk
management, finance, accounting, and information technology services.
Public Safety is comprised of two departments (Police and Fire) providing general law
enforcement, fire suppression and prevention services, paramedic and medical
transport services, disaster preparedness, and ocean lifeguard services.
Public Works is comprised of two departments (Public Works and General Services)
providing engineering, construction and maintenance of public streets, highways,
buildings, beaches, parks, and related infrastructure; as well as traffic engineering,
street lighting, and trash disposal services.
Community Development is comprised of two departments (Planning and Building) that
provide planning and zoning services, economic development services, and building
plan check and code enforcement services.
Community Services is comprised of two departments (Library Services and Recreation
& Senior Services) providing library services, cultural and arts programs, recreation
services, and senior social and transportation services.
Business Enterprise Operations are overseen by one department (Utilities) providing
water and wastewater services.
Each program's net cost (total cost less revenues generated by the activities) is
presented in Tables 3 and 4. The net cost shows the extent to which the City's general
taxes support each of the City's programs.
33
General government
Public safety
Public works
Community development
Community services
Interest
80.000
70.000
60.000
50.000
40.000
30.000
20.000
10.000
Table 3
Governmental Activities
(in thousands)
2008
Total Cost Net Cost
of Service of Service
$ 15,557
$ (12,376)
75,821
(57,155)
42,631
2,519
10,053
(4,456)
19,147
(4,801)
532
(533)
$ 163,741 $ (76,802)
2009
Total Cost Net Cost
of Service of Service
$ 16,431
$ (13,773)
79,301
(62,513)
45,600
(14,666)
10,284
(5,431)
20,589
(1,045)
437
(437)
$ 172,642 $ (97,865)
Table 4
Program Expenses and Revenue - Governmental Activities
Year Ended June 30, 2009
(in millions)
General Public Safety Public Works Community Community Interest
Government Development Services
■ Total Expenses ■ Program Revenues
Of the $97.9 million in program revenues that financed the governmental activities,
$62.5 million was utilized for public safety, $13.8 million was utilized for general
government, $14.7 million was utilized for public works, $5.4 million was utilized for
community development, $1.0 million was utilized for community services and $437,207
was utilized for interest on long -term debt. The net cost of funding Public Works
34
activities increased dramatically over 2008 due to a decrease of $14.2 million (35.7 %) in
operating and capital contributions and an increase of $3.0 million in expenses in
various capital projects. Interest costs only represent 1/4 of 1% of total governmental
activities.
59%
Table 5
Governmental Activities
Year Ended June 30, 2009
Sources of Revenue
■ Charges for Services
■ Contributions
■ Taxes
■ Other
Functional Expenses
35
■ General Government
■ Public Safety
■ Public Works
■ Community Development
■ Community Services
Major Governmental Activities in the current fiscal year included the following:
Revenues:
• Excluding transfers, total program and general revenues in the current year
amounted to $195 million. Of this amount, 38.3% represents program generated
revenue (18.8% charges for services and 19.5% capital grants and contributions),
while the remaining 61.7% represents general revenue sources (59.3% taxes and
2.4% from other sources).
• The City reported capital contributions of $15.6 million in public works program
revenues and $9.1 million in community services program revenues for a total of
$24.6 million in capital contributions. The majority of these contributions are related to
the donations associated with the construction of the new OASIS Senior Center,
property owner contributions associated with the new assessment districts and the
capital contributions of the two parcels of land noted above.
• The $4.4 million decrease in General Revenues over the prior year is a combination
of a few key factors:
o In spite of the poor economy, the City, unlike most other cities, has
enjoyed long -term stability in its number one revenue source at $70.1
million, due to a constant demand for coastal property. Over the past
ten years, assessed values have increased an average of 9.48% per
year. Assessed property values increased only 5.91% in the current
year versus 8.7% in the prior year. Property tax collections, in total,
including unsecured property and prior year collections, increased $2.7
million or 4.1 % in the current year.
o At nearly $17.9 million and $11.2 million respectively, sales taxes and
transient occupancy taxes represent the number two and three top
individual revenue sources for the City. Due to the depressed economic
activity, sales taxes decreased $3.9 million, or 17.9% from the prior
year while transient occupancy taxes decreased $1.6 million or 12.4%
from the prior year.
o Investment income decreased $1.3 million or 31.3% over the prior year
due to lower interest rates offset by an increase in fair value of
investments in the current year. An increase in the fair value of
investments usually occurs in a falling interest rate environment when
the stated rate of return exceeds the current market rate.
Expenses:
• In the current year, expenses for all governmental activities totaled $172.6 million.
Overall, an increase of $8.9 million (5.4 %) from the prior year, which can be attributed
to the following factors:
• General Government expenses increased $0.9 million (5.6 %) when
compared to the prior year due to anticipated costs related to
reorganization and restructuring of a couple of divisions and the first
time charge of annual OPEB cost to each department.
• Public Safety expenses are up $3.5 million (4.6 %) in the current year.
The increase is due an increase in PERS rate, cost of living
adjustments and the first time charge of annual OPEB cost to each
department.
• Public Works expenses were up $3.0 million (6.7 %) when compared to
prior year due to an increase in repair and maintenance of City Streets,
infrastructure and facilities and the first time charge of annual OPEB
cost to each department.
• Community Development expenses increased $0.2 million (2.3 %) in the
current year, due to the first time charge of annual OPEB cost to each
department.
• Community Service expenditures were up $1.4 million (7.5 %) due to a
full year's operating costs associated with the Central Library which
opened the prior year, small staffing changes and an increase in
operating costs related to fee based classes due to an increase in
registration for Summer Camps, as well as the first time charge of
annual OPEB cost to each department.
Business -type Activities — Business -type activities are financed primarily by fees
charged to external parties for goods and services. The City's two business -type
activities, water and wastewater utilities, produced a $1.0 million decrease in net assets.
The decrease in net assets was comprised of an operating loss of $1.2 million, non -
operating revenues of $346,807, and an off - setting ($114,391) consolidation adjustment
related to internal service fund activities.
37
20.000
18.000
16.000
14.000
12.000
10.000
8.000
6.000
4.000
2.000
Table 6
Program Expense & Revenue - Business -type Activities
Year Ended June 30, 2009
(in millions)
Water Wastewater
■ Total Expenses ■ Program Revenues
Major Business -type Activities in the current fiscal year included the following:
Water
Of the $18.2 million in water related expenses, $7.5 million (41.2 %) is for the purchase
of water, $4.0 million (22.0 %) is for maintenance, supplies, and depreciation of the
water system, $4.2 million (23.1 %) covers employee related costs, $1.7 million (9.3 %) is
for professional services, and the remaining $0.8 million (4.4 %) is collectively
attributable to other miscellaneous expenses, interest on outstanding debt, and loss on
removal of capital assets.
Wastewater
Of the $3.8 million in wastewater related expenses, $1.5 million (39.5 %) is for
maintenance, supplies, and depreciation of the wastewater system, $1.5 million (40.4 %)
is for employee related costs, and the remaining $755,518 (20.1 %) is attributable to
other individually insignificant expenses.
38
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, the City uses fund accounting to highlight available financial resources
and to ensure and demonstrate compliance with finance - related legal requirements.
Governmental Funds — Utilizing the financial resources measurement focus, the City's
Governmental Funds provide information on near -term inflows and outflows, and
balances of spendable resources. This 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.
Fund Balance — As of the end of the current fiscal year, the City's Governmental
Funds reported combined fund balances of $121 million, an increase of
$4.1 million from the prior year. The General Fund represented $79.6 million or
65.7% of the combined fund balances of the Governmental Funds.
Reserved Fund Balance — The City has $14.7 million in fund balance that is
reserved to indicate it is not available to finance new activities because it has
already been committed: 1) to fulfill contractual obligations and purchase orders
($7.0 million), 2) for permanent endowment ($4.6 million), 3) as a reserve for
affordable housing ($1.7 million), and 4) for a variety of other restrictions that
make these resources unavailable for spending ($1.4 million).
Unreserved Fund Balance — The remaining $106.4 million is classified as
unreserved fund balance, which is available for spending at the City Council's
discretion but may be designated for special purposes. Of the $106.4 million
unreserved fund balance, City Council has designated $18.6 million for
contingencies, $13.1 million for unspecified future appropriations, $4.7 million for
capital projects that were not completed during the fiscal year, and $39.6 million
designated for other special purposes including $25 million for facilities identified
for replacement in the City's facilities replacement plan. The remaining
$30.4 million is made up of smaller amounts designated across various funds.
Major activities in the Governmental Funds in the current fiscal year included the
following:
The General Fund ended the year with a $79.6 million fund balance, a net
increase of $0.6 million after transferring $22.2 million to other funds ($20.3
million represented a routine transfer to subsidize the operations of the Tide and
Submerged Land Fund, $0.5 million transfer to the Contributions Fund and, $1.4
million represented various nonrecurring transfers to other funds). The net
increase in fund balance of $0.6 million was substantially lower than last year's
net change in fund balance of $9.1 million do to the poor economy resulting in
$18.6 million reduced revenues. This was attributed to a significant drop of $4.4
million in sales tax and sales tax in -lieu, $1.6 million in Transient Occupancy Tax
39
and $1.3 million in investment income and increase in fair value of investments.
The decrease in above revenues did not result in a larger decrease in fund
balance due healthy property taxes, a one- time developer contribution of $1.5
million (Hoag) and management action to impose budget reductions and improve
fiscal discipline.
• The activities of the Tide and Submerged Land Fund are routinely subsidized by
the General Fund. At year end, the General Fund transferred sufficient resources
($20.3 million) to cover the Tide and Submerged Land Fund's deficit and other
outstanding commitments and designations of fund balance. The Tide and
Submerged Land Fund ended the current year with $0.6 million in fund balance.
• The Contributions Fund reported revenues of $1.4 million and expenditures of
approximately $1.0 million related to a variety of grants and cooperative
agreements associated with water quality projects, street projects and park
improvement projects.
Proprietary Funds — The City's Proprietary Funds (Enterprise and Internal Service
Funds) presented in the Fund Financial Statements section basically provide the same
type of information in the Government -wide Financial Statements, but include individual
segment information.
Major activities in the Enterprise Funds in the current fiscal year included the following:
• Net assets in the Water Fund decreased $0.8 million largely due to increase in
cost of supplies. Net assets in Wastewater Fund decreased by $114,427.
Unrestricted net assets at year end were $7.9 million for the Water Fund, and
$3.6 million in the Wastewater Fund.
• Other factors concerning the finances of these two funds have already been
addressed above in the discussion of the City's business -type activities.
Major activities in the Internal Service Funds in the current fiscal year included the
following:
• Net assets in the Internal Service Funds increased $1.3 million in the current
year. The increase was primarily due to lower than expected operating costs.
40
GENERAL FUND BUDGETARY HIGHLIGHTS
Changes to Original Budget
Final budgeted revenues for the General Fund decreased $0.4 million from the original
budget during the year ended June 30, 2009. Significant factors contributing to this
fluctuation are highlighted as follows:
• Final budgeted intergovernmental revenues increased $0.6 million from the original
budget and $0.4 million in unexpected other revenues due to unexpected timing
differences associated with the collection of these revenue source, combined with a
$1.3 million lower than anticipated license and permits revenue source due to the
distressed economic activity.
Final budgeted expenditures for the General Fund decreased $26.9 million from the
original budget during the year ended June 30, 2009. Significant factors contributing to
this fluctuation are highlighted as follows:
• Budgeted expenditures for general government increased $0.5 million due to
amendments for additional expenditures related to re- organization in the City
Attorney's Office.
• Public safety and public works functions were decreased by $18.3 million and
$3.0 million respectively. This budget reduction was primarily due to a routine
allocation of expenditures from General Fund cost centers to the Tidelands Fund for
police, fire and beach maintenance services utilized in support of tidelands
operations.
• Final budgeted capital outlays from the General Fund decreased $6.1 million from
the original budget during the year ended June 30, 2009, primarily due to budgetary
reductions to reflect project timing differences which are re- budgeted in the following
fiscal year for 1) Prop 50 Buck Gully Stabilization, 2) River Avenue Pedestrian
Coastal Access Improvements, 3) Back Bay View Park Enhancement 4) Semeniuk
Slough Dredging Project, 5) Police Facilities Generator Replacement, as well as 6)
various smaller budgetary decreases..
• During the current year, final transfers out budgeted for the General Fund varied
from the original budget by approximately $18.6 million primarily due to the
expenditure allocation to the Tidelands Fund.
Variance with Final Budget
Actual revenues were $6.5 million below final budgeted revenues for the year ended
June 30, 2009 due to the poor economic climate. Significant factors contributing to this
unfavorable variance are summarized as follows:
41
• A $1.3 million favorable variance was realized due to higher than expected
property taxes revenues.
• Lower than expected sales tax and sales in -lieu due to the lower economy
approximated $5.5 million.
• Transient Occupancy tax revenues were lower than expected at $1.8 million.
• A $0.5 million favorable variance was realized due to an increase in the fair value
of investments measured at end of year.
• Licenses and permits and charges for services were lower than expected at a
little over $1.0 million.
Actual General Fund expenditures of $128 million were significantly less than final
budgetary estimates of $135.5 million. Significant factors contributing to this $7.4 million
favorable variances are summarized as follows:
• A $2.2 million favorable variance was realized from capital improvement projects
that were deferred to next year.
• A total of $5.2 million in favorable variances was realized in Public Safety, Public
Works, Community Development, Community Services and General Government
due to managerial action to reduce operating expenditures, increased fiscal
discipline, personal turnover and temporary vacancies.
In spite of the $6.5 million lower than expected revenues, conservative budgeting,
managerial action, increased fiscal discipline, timing of expenditures and other favorable
variances contributed to the $0.6 million net increase in General Fund, fund balance.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City's investment in capital assets for governmental and business -type activities as
of June 30, 2009, amounts to $2.193 billion (net of accumulated depreciation). This
investment is comprised of a broad range of capital assets including land, buildings,
machinery and equipment, park facilities, road improvements, storm drains, piers, oil
wells, sound walls and bridges. The total net increase (including additions and
deletions) of $13.6 million represents a 0.6% increase over last year. The $13.6 million
net increase is the result of additions of $17.2 million, and deletions of $3.6 million.
42
Table 7
Capital Assets at Year End
(net of depreciation, in thousands)
Major capital asset events during the current fiscal year included the following:
• The City capitalized $17.2 million in capital assets in the current year. Of the
$17.2 million, $8.4 million was contributed by a private developer, $7.3 million
paid for through current year expenses and the remaining $1.5 million represents
additions from work in progress started in previous years.
• Of the $17.2 million capitalized as governmental assets in the current year,
$1.4 million represents additions from work in progress started in previous years.
Of the ($136,438) capitalized in the current year as business -type assets, $1.2 million
represented additions for infrastructure consisting of major repairs and upgrades to the
water mains and water wells.
Additional information on the City's capital assets can be found in Note (5) of the Notes
to the Financial Statements.
Long -term Debt
At the end of the current fiscal year, the City had total long -term debt outstanding of
$50.6 million for all governmental and business -type activities.
43
Governmental Activities
Business -Type Activities
Total
2008
2009
2008
2009
2008
2009
Land
$ 1,807,381
$ 1,815,781
$ 2,016
$ 2,016
$ 1,809,397 $
1,817,797
Structures
54,641
54,515
94
89
54,735
54,604
Equipment
8,964
8,365
28
107
8,992
8,472
Infrastructure
194,541
192,966
106,503
105,515
301,044
298,481
Work in progress
5,307
13,167
313
915
5,620
14,082
Totals
$ 2,070.834
$ 2,084,794
$ 108,954
$ 108,642
$ 2,179,788 $
2,193,436
Major capital asset events during the current fiscal year included the following:
• The City capitalized $17.2 million in capital assets in the current year. Of the
$17.2 million, $8.4 million was contributed by a private developer, $7.3 million
paid for through current year expenses and the remaining $1.5 million represents
additions from work in progress started in previous years.
• Of the $17.2 million capitalized as governmental assets in the current year,
$1.4 million represents additions from work in progress started in previous years.
Of the ($136,438) capitalized in the current year as business -type assets, $1.2 million
represented additions for infrastructure consisting of major repairs and upgrades to the
water mains and water wells.
Additional information on the City's capital assets can be found in Note (5) of the Notes
to the Financial Statements.
Long -term Debt
At the end of the current fiscal year, the City had total long -term debt outstanding of
$50.6 million for all governmental and business -type activities.
43
Certificates of participation
Note payable
Pre - annexation agreement
CDBG Loan
Purchase Installment Agreement
Revenue bonds
Claims and judgments
Workers' compensation payable
Compensated absences
Net OPEB Obligation
Totals
Table 8
Outstanding Debt at Year -End
(in thousands)
Governmental
Business -Type
Activities
9,600
Activities
2008
2009
2008 2009
$ 4,665 $
4,335
$ - $ -
1,298
1,120
- -
10,800
9,600
- -
2,056
$ 51,696
-
1,500
-
-
-
3,095 1,585
5,614
5,898
- -
11,334
11,893
- -
9,113
9,784
- -
2,221
4,408
- -
$ 48,601 $
49,010
$ 3,095 $ 1,585
Total
2008 2009
$ 4,665 $ 4,335
1,298
1,120
10,800
9,600
2,056
1,972
1,500
-
3,095
1,585
5,614
5,898
11,334
11,893
9,113
9,784
2,221
4,408
$ 51,696
$ 50,595
The City's total debt decreased $1.1 million during the current fiscal year. The
cumulative decrease is the net result of regular debt service payments, offsetting
increases in claims and judgments payable of $3.7 million, compensated absences
payable of $2.8 million, and $5.4 million in net OPEB obligation. The net OPEB
obligation of $4.4 million resulted in the City's election not to fully fund the implicit
subsidy associated with GASB 45 and the City's post employment Retiree Medical plan.
Additional information on the City's long -term debt and OPEB Obligation can be found
in Note (6) and Note (11) of the Notes to the Financial Statements.
FACTORS AFFECTING NEXT YEAR'S BUDGET
• Each January, the City Council establishes priorities for the coming year(s). The
financial implications of these priorities are considered when the budget is
developed. The 2009 priorities include an aggressive array of goals including
minimizing the adverse impacts of John Wayne airport, improving organizational
performance, maintaining a balanced budget, reviewing facility replacements needs,
enforcing group homes regulations, the alignment of City regulations to the City's
General Plan, the implementation of an effective traffic management plan, the
schematic design of a new civic center, the development of additional park
improvements, the implementation of various water quality projects and the
development of a lower bay dredging strategy.
• After the date of this report's balance sheet but prior to the issuance of this report, it
became clear that deteriorating revenues would present budget shortfalls in 2009-
10. Management expects that the growth of property tax revenues will continue to
decline in 2009 -10 and 2010 -11. Management also expects that Sales taxes and
44
transient occupancy tax revenues will continue to decline in 2009 -10 before
modestly rebounding in 2010 -11. Management has also been advised by CalPERS
that pension costs are likely to increase substantially by 2011 -12 due to recent
losses in the equities markets.
• As the depth of the recession began to unfold, management acted to reduce
operating budgets across the board in 2008 -09 and again in 2009 -10. In reaction to
the mounting adverse budget factors mentioned above, management initiated an
Early Retirement Incentive Plan (ERIP) with intent to further trim the City's overall
cost structure. A total of 51 people participated in the plan and this action is
expected to save nearly $3.1 million annually. Additionally, the City has initiated a
second phase restructuring effort to affect additional long -term cost savings and
improved efficiencies.
• With the adoption of the 2008 cost study and Fee Schedule, Council directed staff to
implement a 3 -year phasing to full cost recovery for several services with fees that
exceeded $100 and the increase resulting from the fee study that increased the
charge by 100% or more. The second of the three phases was approved by Council
on September 8, 2009. Although the third and final phasing of fees was scheduled
for June of 2010, the City's recent budget challenges precipitated the need to
implement the final phasing ahead of schedule. The final phasing for the fee based
services to full cost recovery was implemented on December 8, 2009. .
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and
investors and creditors with a general overview of the City's finances and to
demonstrate the City's accountability for the money it receives. If you have questions
about this report or need additional financial information, contact the City's
Administrative Services Department, 3300 Newport Boulevard, Newport Beach, CA
92663 -3884, (949) 644 -3126. The City's Budgets, Comprehensive Annual Financial
Reports as well as other City financial information can be found on the City's website at:
www.NewportBeachCA.gov/financialinfo.
45
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FINANCIAL SECTION
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
47
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CITY OF NEWPORT BEACH
Statement of Net Assets
June 30. 2009
Assets:
Cash and investments (note 4)
Receivables:
Accounts
Interest
Intergovernmental receivables
Cash with fiscal agent (note 4)
Internal balances
Investment in joint venture (note 15)
Prepaid items
Inventory
Capital assets, (note 5):
Non - depreciable
Depreciable
Accumulated depreciation
Total assets
Liabilities:
Accounts payable
Accrued salaries and benefits
Accrued interest payable
Deposits payable
Unearned revenue
Noncurrent liabilities (note 6):
Due within one year
Due in more than one year
Total liabilities
Net Assets:
Invested in capital assets, net of related debt
Restricted for:
Community development
Public safety
Public works
Community services
Debt Service
Permanent Funds:
Nonexpendable
Expendable
Unrestricted
Total net assets
Governmental
Business -type
Activities
Activities
Total
$ 158,886,013
$ 9,232,552
$ 168,118,565
8,539,107
4,585,201
13,124,308
1,457,076
-
1,457,076
6,929,611
-
6,929,611
3,141,141
1,453,268
4,594,409
61,331
(61,331)
-
2,684,052
-
2,684,052
756,887
25,000
781,887
479,429
-
479,429
1,828,948,445
2,931,603
1,831,880,048
402,845,037
156,499,811
559,344,848
(146,999,476)
(50,789,321)
(197,788,797)
2,267,728,653
123,876,783
2,391,605,436
6,550,159
2,085,543
8,635,702
4,164,978
159,517
4,324,495
110,599
65,393
175,992
3,150,496
35,663
3,186,159
2,618,216
-
2,618,216
9,179,844
1,585,000
10,764,844
39,829,591
-
39,829,591
65,603,883
3,931,116
69,534,999
2,061,635,642
108,510,361
2,170,146,003
6,630,169
-
6,630,169
425,558
-
425,558
24,887,385
-
24,887,385
5,904,067
-
5,904,067
565,778
-
565,778
4,629,781
-
4,629,781
1,170,009
-
1,170,009
96,276,381
11,435,306
107,711,687
$ 2,202,124,770
$ 119,945,667
$ 2,322,070,437
See accompanying notes to basic financial statements
49
Functions /Programs
Primary government:
Governmental activities:
General government
Public safety
Public works
Community development
Community services
Interest on long -term debt
Total governmental activities
Business -type activities:
Water
Wastewater
Total business -type activities
Total primary government
CITY OF NEWPORT BEACH
Statement of Activities
Year Ended June 30, 2009
18,210,789 16,966,621
3,753,042 3,479,565
21,963,831 20,446,186
- 16,966,621
3,479,565
- 20,446,186
$ 194,606,218 $ 57,185,067 $ 13,404,286 $ 24,633,716 $ 95,223,069
See accompanying notes to basic financial statements
50
General revenues:
Taxes:
Property tax
Sales tax
Sales tax in -lieu
Transient occupancy tax
Business license tax
Franchise tax
Other taxes
Intergovernmental (Unrestricted):
Motor vehicle license tax
Investment income
Net increase in fair
value of investments
Other
Total general revenues
Change in net assets
Net assets at beginning of year
Net assets at end of year
Program Revenues
Operating
Capital
Total
Charges for
Grants and
Grants and
Program
Expenses
Services
Contributions
Contributions
Revenues
$ 16,430,529
$ 2,543,880
$ 113,453
$ -
$ 2,657,333
79,301,600
14,757,266
2,031,427
-
16,788,693
45,600,429
5,532,871
9,841,795
15,559,572
30,934,238
10,283,528
4,852,534
-
-
4,852,534
20,589,094
9,052,330
1,417,611
9,074,144
19,544,085
437,207
-
-
-
-
172,642,387
36,738,881
13,404,286
24,633,716
74,776,883
18,210,789 16,966,621
3,753,042 3,479,565
21,963,831 20,446,186
- 16,966,621
3,479,565
- 20,446,186
$ 194,606,218 $ 57,185,067 $ 13,404,286 $ 24,633,716 $ 95,223,069
See accompanying notes to basic financial statements
50
General revenues:
Taxes:
Property tax
Sales tax
Sales tax in -lieu
Transient occupancy tax
Business license tax
Franchise tax
Other taxes
Intergovernmental (Unrestricted):
Motor vehicle license tax
Investment income
Net increase in fair
value of investments
Other
Total general revenues
Change in net assets
Net assets at beginning of year
Net assets at end of year
Net (Expense) Revenue and Changes in Net Assets
Primary Government
Governmental
Business -type
Activities
Activities
Total
$ (13,773,196)
$ -
$ (13,773,196)
(62,512,907)
-
(62,512,907)
(14,666,191)
-
(14,666,191)
(5,430,994)
-
(5,430,994)
(1,045,009)
-
(1,045,009)
(437,207)
-
(437,207)
(97,865,504)
-
(97,865,504)
-
(1,244,168)
(1,244,168)
-
(273,477)
(273,477)
-
(1,517,645)
(1,517,645)
$ (97,865,504)
$ (1,517,645)
$ (99,383,149)
70,126,680
-
70,126,680
17,925,956
-
17,925,956
7,503,113
-
7,503,113
11,170,956
-
11,170,956
4,273,642
-
4,273,642
3,961,634
-
3,961,634
230,115
-
230,115
356,237
-
356,237
1,764,827
374,893
2,139,720
1,096,848
135,789
1,232,637
1,862,977
1,862,977
120,272,985
510,682
120,783,667
22,407,481
(1,006,963)
21,400,518
2,179,717,289
120,952,630
2,300,669,919
$ 2,202,124,770
$ 119,945,667
$ 2,322,070,437
See accompanying notes to basic financial statements
51
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52
FINANCIAL SECTION
z
0
w
ul
FUND J
Q
FINANCIAL STATEMENTS 0
z
GOVERNMENTAL FUNDS Q
z
LL-
GOVERNMENTAL FUNDS
Major Funds
The General Fund is used to account for fiscal resources which are dedicated to
governmental operations of the City, and not required to be accounted for in
another fund.
The Tide and Submerged Land Fund is a Special Revenue Fund used to
account for all revenues and expenditures related to the operation of the City's
tidelands, including beaches and marinas.
The Contributions Fund is used to account for revenues received from other
government agencies or private developers and expended for specific streets,
highway, construction, or water quality projects.
Non -major Funds
Non -major governmental funds are those governmental funds which do not meet
the criteria of a major fund. For reporting purposes in this section, they are
combined together as Other Governmental Funds.
54
CITY OF NEWPORT BEACH
Governmental Funds
Balance Sheet
June 30, 2009
See accompanying notes to basic financial statements
55
Tide and
Other
Submerged
Governmental
Assets
General
Land
Contributions
Funds
Totals
Cash and investments
$
76,435,099
$ 772,983
$
2,791,078
$ 39,400,427
$ 119,399,587
Receivables:
Accounts
5,138,168
885,493
1,089,597
535,802
7,649,060
Interest
1,457,076
-
-
-
1,457,076
Intergovernmental receivables
4,798,249
-
1,545,308
586,054
6,929,611
Cash with fiscal agent
-
-
-
3,141,141
3,141,141
Due from other funds (note12)
3,686,684
-
-
-
3,686,684
Prepaid items
526,444
-
-
68,864
595,308
Inventory
219,698
219,698
Total assets
$
92,261,418
$ 1,658,476
$
5,425,983
$ 43,732,288
$ 143,078,165
Liabilities and Fund Balances
Liabilities:
Accounts payable
$
3,478,489
$ 822,219
$
164,914
$ 1,485,755
$ 5,951,377
Accrued payroll
4,083,477
38,125
-
-
4,121,602
Deposits payable
2,992,328
158,168
-
-
3,150,496
Unearned revenue
1,907,895
-
490,790
219,531
2,618,216
Unavailable revenue
188,265
-
2,151,546
539,323
2,879,134
Due to other funds (note 12)
3,224,497
3,224,497
Total liabilities
12,650,454
1,018,512
2,807,250
5,469,106
21,945,322
Fund balances:
Reserved for encumbrances
3,474,339
351,012
641,469
2,505,461
6,972,281
Reserved for debt service
-
-
-
565,778
565,778
Reserved for permanent endowment
-
-
-
4,629,781
4,629,781
Reserved for affordable housing
1,686,724
-
-
-
1,686,724
Reserved for prepaid items
526,444
-
-
137,728
664,172
Reserved for inventories
219,698
-
-
-
219,698
Reserved for long -term receivable
-
-
-
-
-
Unreserved:
Designated for special purposes
37,329,671
288,952
1,977,264
-
39,595,887
Designated, reported in:
Special revenue funds
-
-
-
21,625,824
21,625,824
Capital projects funds
-
-
-
11,393,179
11,393,179
Permanent funds
-
-
-
1,170,009
1,170,009
Designated for contingencies
18,614,125
-
-
-
18,614,125
Designated for capital projects
4,661,307
-
-
-
4,661,307
Designated for appropriations
13,098,656
-
-
-
13,098,656
Undesignated, reported in:
Special Revenue Funds
-
-
-
(42,849)
(42,849)
Capital projects funds
(3,721,729)
(3,721,729)
Total fund balances
79,610,964
639,964
2,618,733
38,263,182
121,132,843
Total liabilities and
and fund balances
$
92,261,418
$ 1,658,476
$
5,425,983
$ 43,732,288
$ 143,078,165
See accompanying notes to basic financial statements
55
CITY OF NEWPORT BEACH
Governmental Funds
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Assets
June 30, 2009
Fund balances of governmental funds $ 121,132,843
Amounts reported for governmental activities in the statement of net assets are
different because:
Capital assets net of accumulated depreciation have not been included
as financial resources in governmental fund activity. Amount excludes
capital assets from internal service funds which are added below. 2,077,985,878
Long term debt that have not been reported in the governmental fund activity.
Amounts exclude long -term debt activity from internal service funds
which have been added below:
Certificates of participation payable (4,335,000)
Note payable (1,119,613)
Pre - annexation agreement (9,600,000)
CDBG loan (1,972,000)
Accrued interest payable for the current portion of interest due on long -term debt
has not been reported in the governmental funds. (110,599)
Some of the revenue will be collected after year -end, but is not available soon
enough to pay for the current period's expenditures, and therefore is reported as
unavailable revenue in the governmental funds. 2,879,134
Internal service funds are used by management to charge the costs of certain
activities, such as self- insurance, workers' compensation, compensated absences,
retiree insurance and fleet management, to individual funds. The assets (including
capital assets) and liabilities of the internal service funds must be added to the
statement of net assets. 14,518,744
Investment in joint ventures is not a current financial resource and therefore not reported
in the governmental funds. 2,684,052
Internal balance created by the consolidation of internal service fund activities
related to enterprise funds is not reported in the governmental funds. 61
Net assets of governmental activities $ 2,202,124,770
See accompanying notes to basic financial statements
M
CITY OF NEWPORT BEACH
Governmental Funds
Statement of Revenues, Expenditures and Changes in Fund Balances
Year Ended June 30, 2009
Other financing sources (uses)
Transfers in (note 13)
690,013
Tide and
550,000
Other
23,354,366
Transfers out (note 13)
(22,222,293)
Submerged
Governmental
(23,354,366)
Total other financing sources
General
Land
Contributions
Funds
Totals
Revenues
(21,532,280)
20,314,554
550,000
667,726
Taxes and assessments:
551,825
(1,034,825)
967,978
3,650,803
4,135,781
Property tax
$ 70,126,680
$ -
$ -
$ -
$ 70,126,680
Sales tax
17,925,956
-
-
-
17,925,956
Sales tax in -lieu
7,503,113
-
-
-
7,503,113
Transient occupancy tax
11,170,956
-
-
-
11,170,956
Othertaxes
8,486,937
-
-
497,932
8,984,869
Intergovernmental
2,597,108
28,084
1,165,289
7,644,404
11,434,885
Licenses and permits
4,396,034
1,311,650
-
175,831
5,883,515
Charges for services
14,374,139
123,981
-
-
14,498,120
Fines and forfeitures
3,711,087
1,704
-
859,820
4,572,611
Investment income
1,697,103
174,585
134,463
1,239,526
3,245,677
Net increase in fair value of investments
1,096,848
-
50,543
324,944
1,472,335
Property income
6,552,603
7,479,739
-
-
14,032,342
Donations
261,357
-
83,882
6,414,901
6,760,140
Other
234,573
280
8,266,161
8,501,014
Total revenues
150,134,494
9,120,023
1,434,177
25,423,519
186,112,213
Expenditures
Current:
General government
15,478,258
89,396
-
-
15,567,654
Public safety
57,285,811
20,989,574
-
278,959
78,554,344
Public works
26,220,846
3,989,965
-
408,594
30,619,405
Community development
8,302,214
396,565
-
1,272,757
9,971,536
Community services
13,281,963
1,921,292
-
2,282,350
17,485,605
Capital outlay
5,910,047
2,845,548
1,016,199
16,230,545
26,002,339
Debt service (note 6):
Principal
1,500,000
178,641
-
1,614,000
3,292,641
Interest and fiscal charges
71,250
58,421
353,237
482,908
Total expenditures
128,050,389
30,469,402
1,016,199
22,440,442
181,976,432
Excess (deficiency) of revenues
over expenditures
22,084,105
(21,349,379)
417,978
2,983,077
4,135,781
Other financing sources (uses)
Transfers in (note 13)
690,013
20,314,554
550,000
1,799,799
23,354,366
Transfers out (note 13)
(22,222,293)
(1,132,073)
(23,354,366)
Total other financing sources
(uses)
(21,532,280)
20,314,554
550,000
667,726
Net change in fund balances
551,825
(1,034,825)
967,978
3,650,803
4,135,781
Fund balances, beginning
79,059,139
1,674,789
1,650,755
34,612,379
116,997,062
Fund balances, ending
$ 79,610,964
$ 639,964
$ 2,618,733
$ 38,263,182
$ 121,132,843
See accompanying notes to basic financial statements
57
CITY OF NEWPORT BEACH
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmenal Funds
to the Statement of Activities
Year ended June 30, 2009
Net change in fund balances - total governmental funds $ 4,135,781
Amounts reported for governmental activities in the statement of activities differ
from the amounts reported in the statement of activities because:
Governmental funds report capital outlays as expenditures. However, in the statement
of activities, the costs of those assets is allocated over their estimated useful lives
as depreciation expense. This is the amount by which capital outlays exceeded
depreciation in the current period. 14,776,239
Payment of debt service principal is an expenditure in the governmental funds, but the
repayment reduces long -term liabilities in the statement of net assets. 3,292,641
Accrued Interest for debt service. This is the net change in accrued interest for the current period. 45,701
Some of the revenue will be collected after year -end, but is not available soon
enough to pay for the current period's expenditures, and therefore is reported as
unavailable revenue in the governmental funds.This is the net change in unearned revenue for the current
period. (1,316,358)
Internal service funds are used by management to charge the costs of certain
activities, such as self- insurance, workers' compensation, compensated absences,
retiree insurance and fleet management, to individual funds. The net revenue of the internal
service funds is reported in the statement of activities. 1,270,633
Investment in joint ventures creates an explicit, measurable equity interest reported only
in the statement of activities. 88,453
Internal balance created by the consolidation of internal service funds activities related to enterprise funds
is reflected as a reduction of revenues in the statement of activities. 114,391
Change in net assets of governmental activities $ 22,407,481
See accompanying notes to basic financial statements
58
CITY OF NEWPORT BEACH
General Fund
Budgetary Comparison Statement
For the Year Ended June 30, 2009
59
Variance with
Final Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
Revenues
Taxes and assessments:
Property
$ 68,834,854
$ 68,834,854
$ 70,126,680
$ 1,291,826
Sales
22,635,634
22,635,634
17,925,956
(4,709,678)
Sales tax in -lieu
8,258,065
8,258,065
7,503,113
(754,952)
Transient occupancy
13,014,079
13,014,079
11,170,956
(1,843,123)
Othertaxes
8,018,514
8,018,514
8,486,937
468,423
Intergovernmental
2,407,991
2,987,018
2,597,108
(389,910)
Licenses and permits
5,968,653
4,654,553
4,396,034
(258,519)
Charges for services
15,280,400
15,159,700
14,374,139
(785,561)
Fines and forfeitures
3,560,256
3,559,756
3,711,087
151,331
Investment income
2,268,000
2,200,000
1,697,103
(502,897)
Net increase in fair value of investments
-
-
1,096,848
1,096,848
Property income
6,117,202
6,117,202
6,552,603
435,401
Donations
112,500
165,632
261,357
95,725
Other
564,715
1,009,135
234,573
(774,562)
Total revenues
157,040,863
156,614,142
150,134,494
(6,479,648)
Expenditures
General government:
City council
1,192,209
1,250,334
1,188,990
61,344
City clerk
514,666
501,794
469,507
32,287
City attorney
1,519,339
2,014,073
2,097,159
(83,086)
City manager
1,766,292
1,810,784
1,779,540
31,244
Administrative services
8,300,454
8,201,874
7,889,562
312,312
Human resources
2,117,864
2,135,600
2,053,500
82,100
Total General government
15,410,824
15,914,459
15,478,258
436,201
Public safety:
Police
45,350,802
37,631,910
36,646,654
985,256
Fire
31,719,460
21,103,782
20,639,157
464,625
Total Public safety
77,070,262
58,735,692
57,285,811
1,449,881
Public works:
General services
23,278,717
20,775,294
19,690,353
1,084,941
Public works
5,678,355
5,201,951
5,075,801
126,150
Utilities
1,449,748
1,455,830
1,454,692
1,138
Total Public works
30,406,820
27,433,075
26,220,846
1,212,229
59
CITY OF NEWPORT BEACH
General Fund
Budgetary Comparison Statement
(continued)
Variance with
Final Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Community development
Planning
3,985,078
4,898,875
4,713,078
185,797
Building
4,828,319
4,028,264
3,324,759
703,505
Code and Water Quality Enforcement
819,233
427,107
264,377
162,730
Total Community development
9,632,630
9,354,246
8,302,214
1,052,032
Community services:
Net change in fund balance
(8,619,597)
(475,561)
551,825
Library Services
6,857,928
7,087,294
6,521,718
565,576
Recreation and senior services
7,169,052
7,238,170
6,760,245
477,925
Total Community services
14,026,980
14,325,464
13,281,963
1,043,501
Capital outlay
14,270,981
8,123,225
5,910,047
2,213,178
Debt service:
Principal
1,500,000
1,500,000
1,500,000
-
Interest and Fiscal Charges
71,250
71,250
71,250
-
Total Debt Service
1,571,250
1,571,250
1,571,250
-
Total expenditures
162,389,747
135,457,411
128,050,389
7,407,022
Excess (deficiency) of revenues
over expenditures
(5,348,884)
21,156,731
22,084,105
927,374
Other financing sources (uses)
Transfers in
-
240,000
690,013
450,013
Transfers out
(3,270,713)
(21,872,292)
(22,222,293)
(350,001)
Total other financing
sources (uses)
(3,270,713)
(21,632,292)
(21,532,280)
100,012
Net change in fund balance
(8,619,597)
(475,561)
551,825
1,027,386
Fund balance, beginning
79,059,139
79,059,139
79,059,139
-
Fund balance, ending
$ 70,439,542
$ 78,583,578
$ 79,610,964
$ 1,027,386
•1
CITY OF NEWPORT BEACH
Tide and Submerged Land
Budgetary Comparison Statement
For the Year Ended June 30, 2009
Expenditures
General government
-
89,396
89,396
Variance with
Public safety
-
20,989,574
20,989,574
Final Budget
Public works
Budgeted Amounts
4,031,928
Positive
41,963
Original
Final
Actual
(Negative)
Revenues
Community development
-
396,565
396,565
Intergovernmental
$ -
$ -
$ 28,084
$ 28,084
Licenses and permits
1,314,100
1,314,100
1,311,650
(2,450)
Charges for services
120,700
120,700
123,981
3,281
Fines and forfeitures
500
500
1,704
1,204
Investment income
68,000
68,000
174,585
106,585
Property income
8,843,302
8,843,302
7,479,739
(1,363,563)
Other
-
-
280
280
Total revenues
10,346,602
10,346,602
9,120,023
(1,226,579)
Expenditures
General government
-
89,396
89,396
-
Public safety
-
20,989,574
20,989,574
-
Public works
696,482
4,031,928
3,989,965
41,963
Community services
2,035,450
2,264,102
1,921,292
342,810
Community development
-
396,565
396,565
-
Capital outlay
3,077,800
3,546,522
2,845,548
700,974
Debt service:
Principal
178,641
178,641
178,641
-
Interest and fiscal charges
58,421
58,421
58,421
Total expenditures
6,046,794
31,555,149
30,469,402
1,085,747
Excess (deficiency) of revenues
over expenditures 4,299,808 (21,208,547) (21,349,379) (140,832)
Other financing sources (uses)
Transfers in
Transfers out
Total other financing
sources (uses)
Net change in fund balance
Fund balance, beginning
20,314,554 20,314,554
(4,811,660)
(4,811,660) 20,314,554 20,314,554
(511,852) (893,993) (1,034,825) (140,832)
1,674,789 1,674,789 1,674,789 -
Fund balance, ending $ 1,162,937 $ 780,796 $ 639,964 $ (140,832)
61
CITY OF NEWPORT BEACH
Contributions Fund
Budgetary Comparison Statement
For the Year Ended June 30, 2009
Expenditures:
Capital outlay 5,783,841 1,751,966 1,016,199 735,767
Excess (deficiency) of revenues
over expenditures (4,965,041) (63,148) 417,978 481,126
Other financing sources (uses):
Transfers in 550,000 550,000
Transfers out - -
Net change in fund balance (4,965,041) (63,148) 967,978 1,031,126
Fund balance, beginning 1,650,755 1,650,755 1,650,755 -
Fund balance (deficit), ending $ (3,314,286) $ 1,587,607 $ 2,618,733 $ 1,031,126
M
Variance
with Final
Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
Revenues:
Intergovernmental
$ 718,800
$ 1,358,893
$ 1,165,289
$ (193,604)
Investment income
100,000
100,000
134,463
34,463
Net increase in fair value of investments
-
-
50,543
50,543
Donations
229,925
83,882
(146,043)
Total revenues
818,800
1,688,818
1,434,177
(254,641)
Expenditures:
Capital outlay 5,783,841 1,751,966 1,016,199 735,767
Excess (deficiency) of revenues
over expenditures (4,965,041) (63,148) 417,978 481,126
Other financing sources (uses):
Transfers in 550,000 550,000
Transfers out - -
Net change in fund balance (4,965,041) (63,148) 967,978 1,031,126
Fund balance, beginning 1,650,755 1,650,755 1,650,755 -
Fund balance (deficit), ending $ (3,314,286) $ 1,587,607 $ 2,618,733 $ 1,031,126
M
FINANCIAL SECTION
z
0
U
W
U]
FUND J
a
FINANCIAL STATEMENTS U
z
PROPRIETARY FUNDS a
z
Lz
63
PROPRIETARY FUNDS
Business -type Activities
The Water Fund is a Major Fund used to account for the operations of the City's
water utility, a self - supporting activity which is entirely financed though user
charges.
The Wastewater Fund is a Major Fund used to account for the operations of the
City's wastewater system, a self - supporting activity which is entirely financed
through user charges.
Governmental Activities
The Internal Service Funds are used to allocate the cost of providing goods and
services by one department to other departments on a cost reimbursement basis.
Cpl
CITY OF NEWPORT BEACH
Proprietary Fund
Statement of Net Assets
June 30, 2009
Assets
Current assets:
Cash and investments
Receivables:
Accounts
Inventories
Prepaid items
Total current assets
Non - current assets:
Cash with fiscal agent
Capital assets (note 5):
Land
Structures
Equipment
Infrastructure
Work in progress
Less accumulated depreciation
Total capital assets (net of accumulated depreciation)
Total noncurrent assets
Total assets
Liabilities
Current liabilities:
Accounts payable
Accrued payroll
Deposits payable
Accrued interest payable
Bonds payable (note 6)
Due to general fund
Workers compensation - current
General liability - current
Compensated absences - current
Total current liabilities
Non - current liabilities (note 6):
Workers' compensation
General liability
Compensated absences
Net OPEB obligation
Total noncurrent liabilities
Total liabilities
Net Assets
Invested in capital assets, net of related debt
Unrestricted
Total Net Assets
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds
Net assets of business -type activities
Enterprise Funds
1,453,268
-
1,453,268
Governmental
2,016,450
-
Total
Activities
205,793
-
Enterprise
Internal Service
Water
Wastewater
Funds
Funds
$ 6,270,034
$ 2,962,518
$ 9,232,552
$ 39,486,426
3,828,721
756,480
4,585,201
890,047
-
-
-
259,731
25,000
-
25,000
161,579
10,123,755
3,718,998
13,842,753
40,797,783
1,453,268
-
1,453,268
-
2,016,450
-
2,016,450
-
205,793
-
205,793
-
291,888
-
291,888
22,691,452
113,407,961
42,594,169
156,002,130
-
856,774
58,379
915,153
-
(37,707,738)
(13,081,583)
(50,789,321)
(15,883,324)
79,071,128
29,570,965
108,642,093
6,808,128
80,524,396
29,570,965
110,095,361
6,808,128
90,648,151
33,289,963
123,938,114
47,605,911
1,993,217
92,326
2,085,543
598,782
114,625
44,892
159,517
43,376
65,369
24
65,393
-
35,663
-
35,663
-
1,585,000
-
1,585,000
-
-
-
-
462,187
-
-
-
2,973,250
-
-
-
2,446,253
,939,662
3,793,874
137,242
3,931,116
8,463,510
-
-
-
8,919,750
-
-
-
3,451,484
-
-
-
7,844,423
4,408,000
24,623,657
3,793,874
137,242
3,931,116
33,087,167
78,939,396
29,570,965
108,510,361
6,808,128
7,914,881
3,581,756
11,496,637
7,710,616
$ 86,854,277
$ 33,152,721
120,006,998 $
14,518,744
(61,331)
$ 119,945,667
See accompanying notes to basic financial statements
M
CITY OF NEWPORT BEACH
Proprietary Fund
Statement of Revenues,
Expenses and Changes in Fund Net Assets
For the Year Ended June 30, 2009
Enterprise Funds
Operating revenues:
Charges for sales and services:
Water sales
Sewer service and connection fees
Retiree Reimbursements
Employee Contributions
Other
Total operating revenues
Operating expenses:
Purchase of water
Salaries and benefits
Depreciation
Professional services
Maintenance and supplies
System maintenance
Fleet parts and supplies
Workers compensation
Claims and judgments
Compensated absences
OPEB ARC - Cash subsidy
OPEB ARC - Implied subsidy
Other
Total operating expenses
Operating income (loss)
Nonoperating revenues (expenses):
Investment income
Net increase in fair value of investments
(Loss) on removal of capital assets
Interest expense
Other fiscal charges
Total nonoperating revenues
Change in net assets
Net assets, beginning of year
Net assets, end of year
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds
Change in net assets of business -type activities
Governmental
Total Activities
Enterprise Internal Service
Water Wastewater Funds Funds
$ 16,878,661 $ -
- 3,471,388
87,960 8,177
16,966,621 3,479,565
$ 16,878,661 $
3,471,388
1,043,956
- 376,538
96,137 18,063,845
20,446,186 19,484,339
7,512,251
-
7,512,251
-
4,174,246
1,515,122
5,689,368
1,520,219
1,524,328
566,216
2,090,544
1,846,971
1,707,249
357,418
2,064,667
51,067
946,137
521,593
1,467,730
615,644
1,517,701
394,593
1,912,294
-
-
-
-
481,805
-
-
-
3,216,337
-
-
-
3,589,622
-
-
-
2,158,082
-
-
-
2,720,000
-
-
-
2,703,000
579,643
369,068
948,711
962,128
17,961,555
3,724,010
21,685,565
19,864,875
(994,934)
(244,445)
(1,239,379)
(380,536)
284,300
90,593
374,893
1,158,180
96,364
39,425
135,789
504,028
(87,308)
-
(87,308)
(11,039)
(71,325)
-
(71,325)
-
(5,242)
-
(5,242)
-
216,789
130,018
346,807
1,651,169
(778,145) (114,427)
87,632,422 33,267,148
$ 86,854,277 $ 33,152,721
See accompanying notes to basic financial statements
•i
(892,572) 1,270,633
(114,391)
$ (1,006,963)
13,248,111
$ 14,518,744
CITY OF NEWPORT BEACH
Proprietary Fund
Statement of Cash Flows
For the Year ended June 30, 2009
Cash Flows from operating activities:
Cash received from customers or user departments
Cash payments to employees for services
Cash payments to suppliers for goods and services
Cash received (payments made) for other operating activities
Net cash provided by operating activities
Cash Flows from noncapital financing activities:
Cash received from other funds
Net cash provided by noncapital financing activities
Cash Flows from capital related financing activities:
Acquisition of capital assets
Proceeds from sale of capital assets
Principal payments on long -temr liabilities
Interest paid on long -term liabilities
Other fiscal charges
Net cash (used) for capital related financing activities
Cash Flows from investing activities:
Interest on investments
Net cash provided by investing activities
Net increase (decrease) in cash and
cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation of cash equivalents to the statement of net assets
Cash and investments reported on statement of net assets
Cash and investments with fiscal agent reported on statement of net assets
Cash and cash equivalents
Reconciliation of operating income to net cash
used for operating activities:
Operating income (loss)
Adjustments to reconcile operating income
to net cash used for operating activities:
Depreciation
(Increase) decrease in accounts receivable
Decrease in inventories
Decrease in prepaid items
Increase (decrease) in accounts payable and accrued payroll
(Decrease) in accrued interest payable
(Decrease) in deposits payable
Increase in workers' compensation
Increase in general liability
Increase in compensated absences
Increase in net OPEB obligation
Total adjustments
Net cash used for operating activities
Non -cash investing. capital and fnancina activities:
Net increase in fair value of investments
(Loss) on disposal of capital assets
Total of non -cash activities
(825,707)
(825,707)
(1,807,268)
Enterprise Funds
(58,379)
(1,865,647)
(1,140,877)
-
Governmental
-
100,035
Total
Activities
-
(1,510,000)
Enterprise
Internal Service
Water
Wastewater
Funds
Funds
$ 16,720,552
$ 3,439,020
$ 20,159,572
$ 18,680,521
(4,159,992)
(1,505,555)
(5,665,547)
(5,656,950)
(12,545,229)
(1,276,990)
(13,822,219)
(7,591,634)
(491,683)
(360,891)
(852,574)
733,134
(476,352)
295,584
(180,768)
6,165,071
(825,707)
(825,707)
(1,807,268)
(58,379)
(1,865,647)
(1,140,877)
-
-
-
100,035
(1,510,000)
-
(1,510,000)
-
(71,325)
-
(71,325)
-
(5,242)
6,181
(5,242)
111,081
(3,393,835)
(58,379)
(3,452,214)
(1,040,842)
(7,070)
-
380,664
-
130,018
510,682
1,662,208
380,664
559,000
130,018
510,682
1,662,208
-
284,212
-
-
(3,489,523)
670,990
367,223
(3,122,300)
5,960,730
11,212,825
2,187,000
2,595,295
13,808,120
33,525,696
$ 7,723,302
$
2,962,518
$ 10,685,820 $
39,486,426
$ (180,768)
$ 6,165,071
$ 96,364
$
$ 6,270,034
$
2,962,518
$ 9,232,552
39,486,426
1,453,268
(87,308)
$ (11,039)
1,453,268
$
$ 7,723,302
$
2,962,518
$ 10,685,820 $
39,486,426
$ (994,934) $ (244,445) $ (1,239,379) $ (380,536)
1,524,328
566,216
2,090,544
1,846,971
(151,039)
(32,368)
(183,407)
790,933
89,867
-
5,553
(814,417)
6,181
(808,236)
111,081
(33,220)
-
(33,220)
-
(7,070)
-
(7,070)
-
-
-
-
559,000
-
-
-
284,212
-
-
-
670,990
2,187,000
518,582
540,029
1,058,611
6,545,607
$ (476,352)
$
295,584
$ (180,768)
$ 6,165,071
$ 96,364
$
39,425
$ 135,789
$ 507,028
(87,308)
(87,308)
$ (11,039)
$ 9,056
$
39,425
$ 48,481
$ 495,989
See accompanying notes to basic financial statements
67
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FINANCIAL SECTION
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FUND J
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FINANCIAL STATEMENTS U
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FIDUCIARY FUNDS a
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Lz
.•
FIDUCIARY FUNDS
Agency Funds, a type of Fiduciary Funds, are used to account for assets held by
the City as an agent for other government entities, private organizations, or
individuals.
70
CITY OF NEWPORT BEACH
Agency Funds
Statement of Fiduciary Assets and Liabilities
June 30, 2009
Assets Totals
Cash and investments (note 4)
$ 3,873,419
Cash with fiscal agent (note 4)
4,101,765
Prepaid expenses
2,194
Intergovernmental receivable
80,000
Total assets
$ 8,057,378
Liabilities
Due to bondholders
$ 6,759,807
Due to others
259,607
Due to ILJAOC
1,037,964
Total liabilities
$ 8,057,378
See accompanying notes to basic financial statements
71
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72
FINANCIAL SECTION
NOTES TO THE
FINANCIAL STATEMENTS
73
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U
w
ul
J
Q
U
z
Q
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LL-
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
(1) Summary of Significant Accounting Policies
The basic financial statements of the City of Newport Beach (the "City ") have been
prepared in conformity with generally accepted accounting principles ( "GAAP ") as
applicable to government units. The Governmental Accounting Standards Board
( "GASB ") is the accepted standard - setting body for establishing governmental
accounting and financial reporting principles.
a. Reporting Ent!ty
The City of Newport Beach was incorporated on September 1, 1906. The current
City Charter was adopted in 1954. The City operates under a Council- Manager
form of government and provides the following services: public safety (police,
fire, and marine), highway and streets, cultural and recreation, public
improvements, planning and zoning, utilities, and general administrative services.
The financial statements present the financial activity of the City of Newport
Beach (the primary government) and its component unit. The component unit
discussed below is included in the City's reporting entity because of the
significance of its operational or financial relationship with the City. This entity is
legally separate from the City. However, the City of Newport Beach's elected
officials have continuing full or partial accountability for fiscal matters of the
component unit. The financial reporting entity consists of: (1) the City,
(2) organizations for which the City is financially accountable, and
(3) organizations for which the nature and significance of their relationship with
the City are such that exclusion would cause the City's financial statements to be
misleading or incomplete.
An organization is fiscally dependent on the primary government if it is unable to
adopt its budget, levy taxes or set rates or charges, or issue bonded debt without
approval by the primary government. In a blended presentation, a component
unit's balances and transactions are reported in a manner similar to the balances
and transactions of the City. Component units are presented on a blended basis
when the component unit's governing body is substantially the same as the City's
or the component unit provides services almost entirely to the City.
Blended Component Unit
The financial statements of the City of Newport Beach include the financial
activities of the Newport Beach Public Facilities Corporation (the "Corporation ").
The Corporation was formed on March 9, 1992, for the purpose of assisting the
City of Newport Beach in the financing of public improvements, including a public
library. The Corporation is governed by a Board of Directors comprised of seven
individuals appointed by the City Council of the City of Newport Beach. The
Corporation's financial data and transactions are included in the debt service
75
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
fund. Separate financial statements are not prepared for the Corporation. The
debt service fund is used solely to account for the activities of the Corporation
and contains no other City debt financing activities.
b. Basis of Accounting and Measurement Focus
The basic financial statements of the City are composed of the following:
Government -wide financial statements
Fund financial statements
Notes to the financial statements
Financial reporting is based upon all GASB pronouncements, as well as the
FASB Statements and Interpretations, APB Opinions, and Accounting Research
Bulletins that were issued on or after November 30, 1989 that do not conflict with
or contradict GASB pronouncements.
Government -wide Financial Statements
Government -wide financial statements display information about the reporting
government as a whole, except for its fiduciary activities. These statements
include separate columns for the governmental and business -type activities of
the primary government (including its blended component units). The City of
Newport Beach has no discretely presented component units. Eliminations have
been made in the Statement of Activities so that certain allocated expenses are
recorded only once (by the function to which they were allocated). However,
general government expenses have not been allocated as indirect expenses to
the various functions of the City.
Government -wide financial statements are presented using the economic
resources measurement focus and the accrual basis of accounting. Under the
economic resources measurement focus, all (both current and long -term)
economic resources and obligations of the reporting government are reported in
the government -wide financial statements. Basis of accounting refers to when
revenues and expenses are recognized in the accounts and reported in the
financial statements. Under the accrual basis of accounting, revenues, expenses,
gains, losses, assets, and liabilities resulting from exchange and exchange -like
transactions are recognized when the exchange takes place.
Program revenues include charges for services, special assessments, and
payments made by parties outside of the reporting government's citizenry if that
money is restricted to a particular program. Program revenues are netted with
program expenses in the statement of activities to present the net cost of each
program.
0.
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Amounts paid to acquire capital assets are capitalized as assets in the
government -wide financial statements, rather than reported as an expenditure.
Proceeds of long -term debt are recorded as a liability in the government -wide
financial statements, rather than as another financing source. Amounts paid to
reduce long -term indebtedness of the reporting government are reported as a
reduction of the related liability, rather than as an expenditure.
Fund Financial Statements
The underlying accounting system of the City is organized and operated on the
basis of separate funds, each of which is considered to be a separate accounting
entity. The operations of each fund are accounted for with a separate set of self -
balancing accounts that comprise its assets, liabilities, fund equity, revenues and
expenditures or expenses, as appropriate. Governmental 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.
Fund financial statements for the primary government's governmental,
proprietary, and fiduciary funds are presented after the government -wide
financial statements. These statements display information about major funds
individually and non -major funds in the aggregate for governmental and
enterprise funds. Fiduciary statements include financial information for fiduciary
funds. Fiduciary funds of the City primarily represent assets held by the City in a
custodial capacity for other individuals or organizations.
Governmental Funds
In the fund financial statements, governmental funds are presented using the
modified - accrual basis of accounting. Their revenues are recognized when they
become measurable and available as net current assets. Measurable means that
the amounts can be estimated, or otherwise determined. Available means that
the amounts were collected during the reporting period or soon enough thereafter
to be available to finance the expenditures accrued for the reporting period. The
City uses an availability period of 60 days.
Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle license
fee, transient occupancy taxes, grants, and interest associated with the current
fiscal period are all considered to be susceptible to accrual and so have been
recognized as revenues of the current fiscal period to the extent normally
collected within the availability period. Other revenue items are considered to be
measurable and available when cash is received by the City.
Revenue recognition is subject to the measurability and availability criteria for the
governmental funds in the fund financial statements. Exchange transactions are
recognized as revenues in the period in which they are earned (i.e., the related
goods or services are provided). Locally imposed derived tax revenues are
recognized as revenues in the period in which the underlying exchange
77
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
transaction upon which they are based takes place. Imposed non - exchange
transactions are recognized as revenues in the period for which they were
imposed. If the period of use is not specified, they are recognized as revenues
when an enforceable legal claim to the revenues arises or when they are
received, whichever occurs first. Government - mandated and voluntary non -
exchange transactions are recognized as revenues when all applicable eligibility
requirements have been met.
In the fund financial statements, governmental funds are presented using the
current financial resources measurement focus. This means that only current
assets and current liabilities are generally included on their balance sheets. The
reported fund balance (net current assets) is considered to be a measure of
"available spendable resources." Governmental fund operating statements
present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets. Accordingly, they
are said to present a summary of sources and uses of "available spendable
resources" during a period.
Non - current portions of long -term receivables due to governmental funds are
reported on their balance sheets in spite of their spending measurement focus.
Special reporting treatments are used to indicate, however, that they should not
be considered "available spendable resources," since they do not represent net
current assets. Recognition of governmental fund type revenue represented by
non - current receivables is deferred until they become current receivables. Non-
current portions of other long -term receivables are offset by fund balance reserve
accounts. Revenues, expenses, gains, losses, assets, and liabilities resulting
from non - exchange transaction are recognized in accordance with the
requirements of GASB Statement No. 33.
Because of their spending measurement focus, expenditure recognition for
governmental fund types excludes amounts represented by non - current liabilities.
Since they do not affect net current assets, such long -term amounts are not
recognized as governmental fund type expenditures or fund liabilities.
Amounts expended to acquire capital assets are recorded as expenditures in the
year that resources were expended, rather than as fund assets. The proceeds of
long -term debt are recorded as other financing sources rather than as a fund
liability. Amounts paid to reduce long -term indebtedness are reported as fund
expenditures.
When both restricted and unrestricted resources are combined in a fund,
expenses are considered to be paid first from restricted resources, and then from
unrestricted resources.
78
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Proorietary & Fiduciary Funds
The City's enterprise and internal service funds are proprietary funds. In the fund
financial statements, proprietary and fiduciary funds are presented using the
accrual basis of accounting. Revenues are recognized when they are earned and
expenses are recognized when the related goods or services are delivered. In
the fund financial statements, proprietary funds are presented using the
economic resources measurement focus. This means that all assets and all
liabilities (whether current or non - current) associated with their activity are
included on their balance sheets. Proprietary fund type operating statements
present increases (revenues) and decreases (expenses) in total net assets.
Proprietary fund operating revenues, such as charges for services, result from
exchange transactions associated with principal activity of the fund. Exchange
transactions are those in which each party receives and gives up essentially
equal values. Non - operating revenues, such as subsidies, taxes, and investment
earnings result from non - exchange transactions or ancillary activities. Amounts
paid to acquire capital assets are capitalized as assets in the proprietary fund
financial statements, rather than reported as expenditure. Proceeds of long -term
debt are recorded as a liability in the proprietary fund financial statements, rather
than as other financing source. Amounts paid to reduce long -term indebtedness
of the proprietary funds are reported as a reduction of the related liability, rather
than as expenditure.
Agency funds are custodial in nature (assets equal liabilities) and do not involve
the recording of City revenues and expenses.
C. Fund Classifications
The City utilizes the following broad categories of funds:
Major Funds
Major funds are those funds which are either material or of particular importance.
Major Governmental Funds — Governmental funds are generally used to account
for tax supported activities. The following governmental funds met the criteria of a
major fund:
General Fund
The General Fund is the general operating fund of the City. It is used to
account for all activities, except those required to be accounted for in another
fund.
79
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Tide and Submerged Land
The Tide and Submerged Land Fund is used to account for all revenues and
expenditures related to the operation of the City's tidelands, including
beaches and marinas.
Contributions Fund
The Contributions Fund is used to account for revenues received from other
government agencies or private developers and expended for specific street
or highway construction projects.
Major Proprietary Funds — Proprietary funds are used to report an activity for
which a fee is charged to external users to recover the cost of operation.
Water Fund
The Water Fund is an enterprise fund used to account for the activities
associated with the transmission and distribution of potable water by the City
to its users.
Wastewater Fund
The Wastewater Fund is an enterprise fund used to account for the activities
associated with providing sewer services by the City to its users.
Internal Service Funds — The Internal Service Funds are used to account for
the City's self- insured general liability and workers' compensation, compensated
absences, retiree insurance, and the cost of maintaining and replacing the City's
rolling stock fleet. City departments are the primary users of these services and
are charged a fee on a cost reimbursement basis.
Fiduciary Funds — The Fiduciary Funds are used to account for assets held by
the City as an agent for property owners with special assessments, local
businesses in business improvements districts, and other individuals who have
made miscellaneous special deposits with the City.
Cash and Investments
For purposes of the statement of cash flows, cash and cash equivalents are
defined to be cash on hand, demand deposits and highly liquid investments with
a maturity of three months or less from the date of purchase. For financial
statement presentation purposes, cash and cash equivalents are shown as cash
and investments and restricted cash and investments in the proprietary funds.
L-A
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Investments
Investments are generally stated at fair value
Cash and investments are pooled to maximize investment yields. The net change
in fair value and interest earned on the investments is allocated to the respective
funds based on each fund's average monthly cash and investments balance.
The City's investment in LAIF is $20,381,833 at June 30, 2009. This investment
value is based on information provided by the State Treasurer's Office. The
carrying value of the City's position in the fund is materially consistent with the
fair value of the fund shares. This pool is under the regulatory oversight of the
State Treasurer's Office. The LAIF Board consists of five members as designated
by Statute. The Chairman is the State Treasurer, or his designated
representative. Two members qualified by training and experience in the field of
investment of finance, and two members who are treasurers, finance or fiscal
officers or business managers employed by any County, City or local district or
municipal corporation of this state, are appointed by the State Treasurer. The
term of each appointment is two years, or at the pleasure of the appointing
authority.
e. Intergovernmental Receivables
Intergovernmental receivables represent grant reimbursement requests, capital
project billings, and pending transfers of taxes and fees collected by other
government agencies. As of June 30, 2009, the balance of this account was
$6,929,611.
f. Inventories
Inventories are valued at cost, which approximates market, using the first -in, first -
out method. The City follows the consumption method for inventory control. The
costs of governmental fund type inventories are recorded as expenditures when
consumed.
g. Capital Assets
Capital assets, which include land, structures, equipment, and infrastructure
assets, are reported in the applicable governmental or business -type activities
columns in the Government -wide Financial Statements. Capital assets are
recorded at cost where historical records are available and at an estimated
original cost where no historical records exist. Equipment purchased in excess of
$5,000 is capitalized if it has an expected useful life of three years or more.
Building, infrastructure, and improvements are capitalized if cost is in excess of
81
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
$30,000. The cost of normal maintenance and repairs that do not add to the
value of the asset's lives are not capitalized. The City chose to value and report
on infrastructure assets in their entirety (e.g. Prior to 1980).
Major capital outlay for capital assets and improvements are capitalized as
projects are constructed. For debt - financed capital assets, interest incurred
during the construction phase is reflected in the capitalization value of the asset
constructed, net of interest earned on the invested proceeds over the same
period. Capital assets acquired through lease obligations are valued at the
present value of future lease payments at the date acquired. Contributed capital
assets are valued at their estimated fair market value at the date of contribution.
Capital assets used in operations are depreciated over their estimated useful
lives using the straight -line method in the government -wide financial statements
and in the fund financial statements of the proprietary funds. Depreciation is
charged as an expense against operations and accumulated depreciation is
reported on the respective balance sheet. The range of lives used for
depreciation purposes for each capital asset class as follows:
Structures
30 -75 years
Equipment
3 -15 years
Infrastructure
20 -75 years
h. Claims and Judgments
The City accounts for material claims and judgments and associated legal and
administrative costs when it is probable that the liability claim has been incurred
and the amount of the loss can be reasonably estimated. The City records the
estimated loss liabilities in the Internal Service Fund. Included therein are claims
incurred but not reported, which consists of (a) known loss events expected to be
presented as claims later, (b) unknown loss events that are expected to become
claims, and (c) expected future development on claims already reported. This is
based upon historical actual results that have established a reliable pattern
supplemented by specific information about current matters. Small dollar claims
and judgments are recorded as expenditures when paid.
L Property Taxes
The assessment, levy, and collection of property taxes are the responsibility of
the County of Orange. The City records property taxes as revenue when
received from the County, except at year -end, when property taxes received
within 60 days are accrued as revenue. Property taxes are assessed and
collected each fiscal year according to the following property tax calendar:
Lien date March 1
[%
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30, 2009
Levy date July 1
Due dates November 1 — 1" installment
March 1 — 2nd installment
Collection dates December 10 — 1" installment
April 10 — 2 "d installment
j. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused
vacation and limited amounts of earned but unused sick leave benefits, which will
be paid to employees upon separation from City service. Beginning in fiscal year
1990, the City adopted a general leave plan to replace the traditional vacation
and sick leave plan. The City uses a general leave plan which permits a
maximum of three years' accrual for every employee, above which the excess is
paid out as current compensation. All employees hired prior to January 1, 1990,
were given the option of remaining in the traditional vacation and sick leave plan
or enrolling in the general leave plan. All employees hired on or after January 1,
1990, are automatically enrolled in the general leave plan. Compensated
absences are accrued in the Compensated Absence Internal Service Fund when
employee services have been rendered and when it becomes probable that the
City will compensate the employees for benefits through paid time off or cash
payments at termination or retirement. Benefits that have been earned but are
not yet available for use because employees have not met certain conditions are
accrued to the extent it is probable that the employees will meet the conditions
for compensation in the future.
k. Unearned Revenue
Unearned revenues are those where asset recognition has been met, but the
revenue recognition criteria have not been met.
83
(2)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Reconciliation of Government -wide and Fund Financial Statements
a. Explanation of Differences Between Governmental Funds Balance Sheet
and the Statement of Net Assets
The "total fund balances' of the City's governmental funds $121,132,843 differs
from "net assets" of governmental activities $2,202,124,770 reported in the
statement of net assets. This difference primarily results from the long -term
economic focus of the statement of net assets versus the current financial
resources focus of the governmental fund balance sheets.
Capital Related Items
When capital assets (property, plant, and equipment) that are to be used in
governmental activities are purchased or constructed, the cost of those assets
are reported as expenditures in governmental funds. However, the statement of
net assets includes those capital assets among the assets of the City as a whole.
Cost of capital assets
$2,209,102,030
Accumulated depreciation
(131,116,152)
Total capital assets, net"
$2.077,985,878
'Amount excludes net capital assets of $6,808,128 from
Internal Service funds.
Long -term Debt Transactions
Long -term liabilities applicable to the City's governmental activities are not due
and payable in the current period and accordingly are not reported as fund
liabilities. All liabilities (both current and long -term) are reported in the statement
of net assets. Balances at June 30, 2009 were:
Certificates of participation $ 4,335,000
Note payable 1,119,613
Pre - annexation agreement 9,600,000
CDBG Loan 1,972,000
Total $17.026.613
[%l
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Accrued Interest
Accrued liabilities in the statement of net assets differ from the amount reported
in governmental funds due to accrued interest on outstanding debt payable (see
Note 6).
Accrued interest added 110 599
Investment in Joint Venture
Investment in joint ventures is not a current financial resource and hence
reported only in the statement of net assets.
Net equity in joint venture $2.684.052
Unavailable Revenue
Some of the revenue will be collected after year -end, but is not available soon
enough to pay for current period's expenditures, and therefore is reported as
unavailable revenue in the governmental funds.
Unavailable revenue $2379.134
Internal Service Funds
Internal service funds are used by management to charge the costs of certain
activities (such as equipment management and self- insurance authorities) to
individual funds. The assets (including capital assets) and liabilities of the internal
service funds are included in governmental activities in the statement of net
assets, because they primarily serve governmental activities of the City.
Internal Service Funds $14.518. 444
Reclassifications and Eliminations
Interfund balances must generally be eliminated in the government -wide
statements, except for net residual amounts due between governmental
activities. Amounts involving fiduciary funds should be reported as external
transactions. Any allocations must reduce the expenses of the function from
which the expenses are being allocated, so that expenses are reported only once
— in the function in which they are allocated.
Investments in joint ventures are not a current financial resource and are not
reported in the governmental funds. Therefore, it is added for the statement of
net assets. Interfund balance created due to the consolidation of internal service
activities to governmental and enterprise funds is not reported in the fund
statements and must be added to the statement of net assets.
85
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Explanation of Differences betweeen Government Funds
Balance Sheet and the Statement of Net Assets
Assets
Cash and investments
Receivables:
Accounts
Notes
Interest
Intergovernmental receivables
Cash with fiscal agent
Interfund balances
Investment in joint venture
Prepaid items
Inventory
Capital assets
Accumulated depreciation
Total assets
Liabilities and Fund Balances / Net Assets
Liabilities:
Accounts payable
Accrued payroll
Accrued interest payable
Deposits payable
Claims payable
Workers' compensation payable
Compensated absences payable
Unearned revenue
Unavailable revenue
Due to other funds
Long -term liabilities
Total liabilkies
Fund balances / net assets
Total liabilities and
and fund balances / net assets
Total Capital
Governmental Related
Funds Items
$ 119,399,587 $
M• r.r
1,457,076
6,929,611
3,141,141
3,686,684
595,308
219,698
Long -term
Accumulated Debt
Depreciation Transactions
2,209,102,030 - -
- - (131,116,152) -
$ 143,078,165 $ 2,209,102,030 _L 116,152) $ -
$ 5,951,377
4,121,602
3,150,496
2,618,216
- - -
2,879,134
- - -
3,224,497
- - -
- - 17,026,613
21,945,322
- - 17,026,613
121,132,843
2,209,102,030 (131,116,152) (17,026,613)
$ 143,078,165 $ 2,209,102,030 _L _L13 $ -
M
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Investment
Internal
Reclassifications
-
Interest in Joint
Unavailable Service
and
Statement of
Payable Venture
Revenue Funds
Eliminations
Net Assets
$ - $ -
S - $ 39,486,426
$ -
$ 158,886,013
- -
- 890,047
-
8,539,107
- -
- -
-
1,457,076
- -
- -
-
6,929,611
- -
- -
-
3,141,141
- -
- -
(3,625,353)
61,331
- 2,684,052
- -
-
2,684,052
- -
- 161,579
-
756,887
- -
- 259,731
-
479,429
- -
- 22,691,452
-
2,231,793,482
24,623,657
(15,883,324)
-
(146,999,476)
$ - $ 2,684,052
$ - $ 47,605,911
$ (3,625,353)
$ 2,267,728,653
$ -
- -
$ 598,782
-
$ 6,550,159
-
- -
43,376
-
4,164,978
110,599
- -
-
-
110,599
-
- -
-
-
3,150,496
-
- -
2,446,253
-
2,446,253
-
- -
2,973,250
-
2,973,250
-
- -
1,939,662
-
1,939,662
-
- -
-
-
2,618,216
-
- (2,879,134)
-
-
-
-
- -
462,187
(3,686,684)
-
-
-
24,623,657
-
41,650,270
110,599
- (2,879,134)
33,087,167
(3,686,684)
65,603,883
(110,599)
2,684,052 2,879,134
14,518,744
61,331
2,202,124,770
$ -
$ 2,684,052 $ -
$ 47,605,911 $
(3,625,353)
$ 2,267,728,653
ja
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
b. Explanation of Differences between Enterprise Funds and Government -
wide Statement of Net Assets
Total net assets of the City's Enterprise Funds of $120,006,998 differs from net
assets of the business -type activities of $119,945,667 reported in the
government -wide statement of net assets. The difference, $61,331, results from
the consolidation of internal service fund activities related to the enterprise funds.
Explanation of Differences between Enterprise Funds
and Government -wide Statement of Net Assets
Assets
Cash and investments
Receivables:
Accounts
Cash with fiscal agent
Interfund balances
Prepaid items
Capital assets, net
Total assets
Liabilities and Fund Balances I Net Assets
Liabilities:
Accounts payable
Accrued payroll
Accrued interest payable
Liabilities from restricted assets
Noncurrent liabilities:
Due within one year
Due in more than one year
Total liabilities
Total
Internal
Government wide
Enterprise
Service
Statement of
Funds
Funds
Net Assets
$ 9,232,552
$
$ 9,232,552
4,585,201
4,585,201
1,453, 268
1,453, 268
-
(61,331)
(61,331)
25,000
25,000
108,642,093
108,642,093
$ 123,938,114
$ (61,331)
$ 123,876,783
$ 2,085,543
159,517
35,663
65,393
1,585,000
3,931,116
Net Assets
Invested in capital assets, net of related debt $ 108,510,361
Unrestricted 11,496,637
$ 120,006,998
M.,
$ $ 2,085,543
159,517
35,663
65,393
1,585,000
3,931,116
- $ 108,510,361
(61,331) 11,435,306
$ (61,331) $ 119,945,667
C.
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Explanation of Differences between Governmental Fund Operating
Statements and the Statement of Activities
The "net change in fund balances" for governmental funds $4,135,781 differs
from the "change in net assets" for governmental activities $22,407,481 reported
in the statement of activities. The differences arise primarily from the long -term
economic focus of the statement of activities versus the current financial
resources focus of the governmental funds. The effect of the difference is
illustrated below.
Capital Related Items
When capital assets that are to be used in governmental activities are purchased
or constructed, the resources expended for those assets are reported as
expenditures in governmental funds. However, in the statement of activities, the
cost of those assets is allocated over their estimated useful lives and reported as
depreciation expense. In governmental funds, significant maintenance projects
are reclassified as functional expenses in the statement of net assets. Also,
contributed capital is not recorded in governmental funds; therefore it is added for
the statement of net assets.
Capital outlay
Net change to Internal Service Fund capital
assets
Capital Contribution
Net change in capital related items
Depreciation expense
Deletions to accumulated depreciation
Net change in accumulated depreciation
$17,509,910
(4,395,327)
8,400,000
$21,514,583
($8,151,807)
1.413,463
$6 738,344
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Long -Term Debt Transactions
Repayment of debt service is reported as an expenditure in governmental funds
and, thus, has the effect of reducing fund balance because current financial
resources have been used. Issuance of debt is reported as an other financing
source in governmental funds, thus increasing fund balance. For the City as a
whole, however, the principal payments reduce the liabilities, and proceeds from
long term debt increase liabilities in the statement of net assets.
Certificates of Participation $ 330,000
Note payable 178,641
Pre - annexation agreement 1,200,000
CDBG loan 84,000
Purchase agreement 1,500,000
Total principal payments made $3,292,641
Accrued Interest
Interest accrued on outstanding debt payable is not recorded as an expenditure
in governmental funds, and, thus has been added to the statement of activities.
Net change in accrued interest 45 701
Investment in Joint Venture
Investment in joint ventures creates an explicit, measurable equity interest
reported only in the statement of activities.
Net change in investment in joint venture IM 453
Unavailable Revenue
Some of the revenue will be collected after year -end, but is not available soon
enough to pay for current period's expenditures, and therefore is reported as
unavailable revenue in the governmental funds.
Net change in unavailable revenue $1.316.358
.I
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Internal Service Funds
Internal service funds are used by management to charge the costs of certain
activities, such as equipment management and self- insurance activities, to
individual funds. The adjustments for internal service funds "closes" those funds
by reimbursing or charging additional amounts to participating departments in
individual funds for costs over or under charged for those activities.
Net change in Internal Service Funds $ 270 633
Reclassification and Eliminations
Interfund balances must generally be eliminated in the government -wide financial
statements, except for net residual amounts due between governmental and
business -type activities. Any allocations must reduce the expenses of the
function from which the expenses are being allocated, so that expenses are
reported only once — in the function in which they are allocated. Amounts
involving fiduciary funds should be reported as external transactions.
91
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Explanation of Differences between Governmental Fund
Operating Statements and the Statement of Activities
Total Capital
Governmental Related Accumulated
Funds Hems Depreciation
Revenues:
-
Taxes and assessments $
115,711,574 $ - $
Intergovernmental
11,434,885 -
Licenses and permits
5,883,515 -
Charges for services
14,498,120 -
Fines and forfeitures
4,572,611 -
Investment income
3,245,677 -
Net increase in fair value of investments
1,472,335 -
Property income
14,032,342 -
Share of joint venture net gain
-
Donations
6,760,140 -
Contributed capital
Loss on sale of capital assets
Other
Total revenues
Expenditures:
Current:
General government
Public safety
Public works
Community development
Community services
Capital outlay
Debt service:
Principal retirement
Interest and fiscal charges
Total expenses
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources
(uses)
Net change in fund balances /
net assets
8,400,000
8,501,014
186,112,213 8,400,000
Long -term
Debt
Transactions
15,567,654
-
313,265 -
78,554,344
1,140,876
(646,514) -
30,619,405
3,254,451
5,598,925 -
9,971,536
-
110,144 -
17,485,605
-
1,362,524 -
26,002,339
(17,509,910)
- -
3,292,641
-
- (3,292,641)
482,908
181,976,432
(13,114,583)
6,738,344 (3,292,641)
23,354,366
(23,354,366)
4,135,781 21,514,583 (6,738,344) 3,292,641
Fund balances / net assets beginning of year 116,997,062 2,187,587,447 (124,377,808) (20,319,254)
Fund balances / net assets end of year $ 121,132,843 $ 2,209,102,030 $ (131,116,152) $ (17,026,613)
M
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
- - - (23,354,366) -
23,354,366
45,701 88,453 (1,316,358) 1,270,633 114,391 22,407,481
(156,300)
Investment
4,195,492
Internal
Reclassifications
2,179,717,289
Accrued
in Joint
Unavailable
Service
and
Statement of
Interest
Venture
Revenue
Fund
Eliminations
Activities
$ -
$ -
$ -
$ -
$ -
$ 115,711,574
-
-
(1,316,358)
-
-
10,118,527
-
-
-
-
-
5,883,515
-
-
-
-
114,391
14,612,511
-
-
-
-
-
4,572,611
-
-
-
-
-
3,245,677
-
-
-
1,158,180
-
2,630,515
-
-
-
504,028
-
14,536,370
-
88,453
-
-
-
88,453
-
-
-
-
-
6,760,140
-
-
-
-
-
8,400,000
-
-
-
(11,039)
-
(11,039)
8,501,014
88,453
(1,316,358)
1,651,169
114,391
195,049,868
-
-
-
149,263
400,347
16,430,529
-
-
-
76,045
176,848
79,301,599
-
-
-
(54,372)
6,182,021
45,600,430
-
-
-
81,865
119,983
10,283,528
-
-
-
127,735
1,613,230
20,589,094
-
-
-
-
(8,492,429)
-
(45,701)
437,207
(45,701)
380,536
172,642,387
- - - (23,354,366) -
23,354,366
45,701 88,453 (1,316,358) 1,270,633 114,391 22,407,481
(156,300)
2,595,599
4,195,492
13,248,111
(53,060)
2,179,717,289
$ (110,599) $
2,684,052
$ 2,879,134
$ 14,518,744 $
61,331 $
2,202,124,770
93
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
d. Explanation of Differences between Enterprise Funds Operating Statement
and the Statement of Activities
The change in net assets for the City's enterprise funds ($892,572) differs from
the change in net assets of the business -type activities ($1,006,963) reported in
the government -wide statement of activities. The difference, ($61,331), results
from the consolidation of internal service fund activities related to the enterprise
funds.
Explanation of Differences between Enterprise Funds
Operating Statement and the Statement of Activities
Total Internal Business -type activities
Enterprise Service Statement of
Funds Fund Activities
Operating revenues:
Charges for sales and services:
Water sales $ 20,350,049 $ - $ 20,350,049
Other 96,137 - 96,137
Total operating revenues 20,446,186 - 20,446,186
Operating expenses
Purchase of Water
7,512,251
-
7,512,251
Salaries and wages
5,689,368
-
5,689,368
Depreciation
2,090,544
-
2,090,544
Professional Services
2,064,667
-
2,064,667
Maintenance and supplies
1,467,730
114,391
1,582,121
System maintenance
1,912,294
-
1,912,294
Other
948,711
-
948,711
Total operating expenses
21,685,565
114,391
21,799,956
Operating income
(1,239,379)
(114,391)
(1,353,770)
Nonoperating revenues (expenses):
Investment income
374,893
-
374,893
Net decrease in fair value of investments
135,789
-
135,789
Loss on removal of capital assets
(87,308)
-
(87,308)
Interest expense
(71,325)
-
(71,325)
Other
(5,242)
-
(5,242)
Total nonoperating revenues (expenses)
346,807
-
346,807
Change in net assets
(892,572)
(114,391)
(1,006,963)
Net assets, beginning of year
120,899,570
53,060
120,952,630
Net assets, end of year $
120,006,998
$ (61,331) $
119,945,667
31
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
(3) Budgetary Control and Compliance
The City adheres to the following general procedures in establishing the budgetary data
reflected in the financial statements:
During April, the City Manager submits to the City Council a proposed operating
budget for the fiscal year commencing the following July 1. The operating budget
includes proposed expenditures and the means of financing them. Public
hearings are conducted at City Council meetings to obtain taxpayer comments.
Prior to July 1, the budget is legally adopted through passage of an appropriation
resolution.
• Budgets are adopted on an annual basis consistent with generally accepted
accounting principles for General and Special Revenue Funds.
• The City of Newport Beach does not present budget information on Capital
Projects Funds since the City approved project - length budgets. These project -
length budgets authorize total expenditures over the duration of a construction
project rather than year -by -year budgeting.
• The City of Newport Beach does not present budget information on Debt Service
and Permanent Funds since the City is not required to and does not adopt an
annual budget.
• The budget is formally integrated into the accounting system and employed as a
management control device during the year.
• The legal level of budgetary control is at the fund level. The City Manager is
authorized to transfer budgeted amounts between departments within any fund;
however, any revisions which alter the total appropriations of any fund must be
approved by City Council.
• At fiscal year -end, budget appropriations lapse. Budget appropriations for
incomplete capital projects are re- budgeted in the following fiscal year by Council
action and are included in the revisions noted above. Projects that are not started
during the budget year are reevaluated in the following year.
• Encumbrances represent commitments related to unperformed contracts for
goods and services. The City utilizes an encumbrance system as a management
control technique to assist in controlling expenditures. Under this system,
encumbrance accounting for the expenditure of funds is recorded in order to
indicate outstanding commitments and is employed in the governmental fund
types. Encumbrances outstanding at year -end are reported as reservations of
fund balances since they do not constitute expenditures or liabilities.
Encumbrances and their related budgets are honored in the subsequent year to
fulfill these commitments and are presented in the original adopted budget.
IN9
(4)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Expenditures exceeded appropriations in the following non -major governmental funds.
Appropriations Expenditures
Justice Assistance Grant $ - $ 6,403
Arterial Highway Rehabilitation $ 291,342 $ 320,319
The following funds reported deficit fund balances:
Special Revenue Funds
OTS DUI Grant $ 42,489
Capital Proiects
Marine Science Center
$
420,148
City Hall Improvements
$ 1,750,813
Misc SAH Projects
$
417,721
Marina Park
$
857,392
Sunset Ridge Park
$
243,301
Police Facility
$
2,175
Lifeguard Headquarters
$
30,179
Internal Service Funds
Compensated Absences $ 6,606,339
Retiree Insurance $ 4,152,916
Variance
$ (6,403)
$ (28,977)
The City's intentions are to eliminate deficit fund balances through future grant funding,
other future revenue sources, or interfund transfers.
Cash and Investments
Cash and investments as of June 30, 2009 are classified in the accompanying financial
statements as follows:
Statement of net assets:
Cash and investments
Cash with fiscal agent
Fiduciary funds:
Cash and investments
Cash with fiscal agent
Total cash and investments
$ 168,118,565
4,594,409
3,873,419
4,101,765
$ 180,688,158
Cash and investments as of June 30, 2009 consist of the following:
a.
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Cash on hand $ 40,226
Deposits with financial institutions (783,218)
Investments 181,431,150
Total cash and investments $ 180,688,158
Investments Authorized by the California Government Code and the Entity's Investment
Policy
The table below identifies the investment types that are authorized for the City by the
California Government Code (or the City's investment policy, where more restrictive).
The table also identifies certain provisions of the California Government Code (or the
City's investment policy, where more restrictive) that address interest rate 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.
97
Maximum
Maximum
Maximum
Percentage
Investment
Authorized Investment Type
Maturity
of Portfolio'
in One Issuer
Local Agency Bonds
5 years
15%
None
U.S. Treasury Obligations
5 years
None
None
U.S. Agency Securities
5 years
None
None
Banker's Acceptances
180 days
30%
10%
Commercial Paper
270 days
25%
10%
Negotiable Certificates of Deposit
1 year
30%
10%
Repurchase Agreements
30 days
None
None
Reverse Repurchase Agreements
30 days
10% of base value
None
Medium -Term Notes
4 years
30%
None
Mutual Funds
N/A
20%
10%
Money Market Mutual Funds
N/A
20%
10%
Mortgage Pass - Through Securities
5 years
20%
None
County Pooled Investment Funds
N/A
5%
None
Local Agency Investment Fund (LAIF)
N/A
None
None
JPA Pools (other investment pools)
N/A
None
None
Excluding amounts held by bond trustee that are not subject to California
Government Code restrictions.
97
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee (i.e. fiscal agent) are governed by
provisions of the debt agreements, rather than the general provisions of the California
Government Code or the City's investment policy. The table below 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,
credit risk, and concentration of credit risk.
a.,
Maximum
Maximum
Percentage
Investment
Authorized Investment Type
Maximum Maturity
Allowed
in One Issuer
U.S. Treasury Obligations
None
None
None
U.S. Agency Securities
None
None
None
Banker's Acceptances
30 days - 360 days
None
None
Commercial Paper
180 days - 270 days
None
10%
Money Market Mutual Funds
N/A
None
None
Investment Agreements
None
None
None
Certificates of Deposit
None
None
None
Demand Deposits
30 days - 360 days
None
None
Time Deposits
30 days - 360 days
None
None
Local Agency Bonds
None
None
None
Forward Delivery Agreement
None
None
None
Forward Purchase and Sale Agreement
None
None
None
Corporate Notes
None
None
None
Repurchase Agreements
None
None
None
Local Agency Investment Fund
N/A
None
None
Municipal Obligations
None
None
None
County Pooled Investment Funds
N/A
None
None
a.,
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
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, 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.
Information about the sensitivity of the fair values of the City's investments (including
investments held by bond trustee) to market interest rate fluctuations is provided by the
following table that shows the distribution of the City's investments by maturity:
Investment Type
Money Market Funds
U.S. Treasury Notes
U.S. Agencies
Corporate Notes
Municipal Bond
Commercial Paper
LAIF
Foreign Bonds
Mortgage -backed Securities
Cash with Fiscal Agent:
Money Market Funds
Investment Agreements
Total
$ 5,321,323 $
5,321,323 $
- $ - $
- $ 5,321,323
21,542,294
1,133,585
20,408,709 -
- 21,542,294
85,142,487
28,192,164
50,351,181 6,599,142
- 85,142,487
33,287,090
11.,709,214
20,260,262 1.,317,614
- 33,287,090
1,797,420
1,797,420
- -
- 1,797,420
1,598,383
1,598,383
- -
- 1,598,383
20,381,833
20,381,833
- -
- 20,381,833
3,092,958
844,600
2,248,358 -
- 3,092,958
571,188
571,188
- -
- 571,188
7,515,598. 7,515,598 - - - 7,515,598
1,180,576 - - - 1,180,576 1,180,576
$ 181,431,150 $ 79,065,308 $ 93,268,510 $ 7,916,756 $ 1,180,576 $ 181.,431,150
Investment agreements are recorded at cost (not fair value) because these agreements represent
nonparticipating contracts that are nonnegotiable and whose redemption terms do not consider market rates.
Investments with Fair Values Hiahly Sensitive to Interest Rate Fluctuations
As of June 30, 2009 the City did not have any investments (including investments held
by fiscal agent) whose fair values were highly sensitive to interest rate fluctuations.
..
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
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, the City's
investment policy, or debt agreements, and the actual rating as of year end for each
investment type.
qqa pq
619081673 1,425,351
Not
AA- Aa A A- A -1a A=1 BBB Rated
$ - $ - $ - $ - $ - $ - $ 5,220,433
6,524,690
894,022 - - - - - - 24, 188,951
3,510,602 5,240,010 7,870,974 012,072 - - - -
Sol Still
798,562 799,821 - -
20,381,833
600,294 1,665.664
1,180,576
$ 181.431.150 $ 12,392.30 S 79712,02 $ 6.908.673 3 3,206321 $ 8070.280 $ 5,248,010 $ 8,176,334 $ 812.072 $ 790.562 $ 799,621 $ 992 NO $ 56,315.007
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.
Investments in any one issuer that represent 5% or more of total City's investments are
as follows:
Issuer
Investment Type
MlNmum
Eedrpt
Federal agency securities
$
14,210,531
Legal
From
$
18,845,749
Fair Value
panic,
Couldsu
AAA
vestment TVO9
Federal agency securities
$
20,828,402
Money Market Funds
5.321.323
A
$ -
$ 1001890 $
B.S. Treasury Netes
21,512,294
NIA
12,392.030
2,629574
B.S. Agencies
85,142,487
N/A
-
60,M3O414
C ,itd ii No.
33,287,090
A
-
B,811,408
Municipal Bond
1 797,420
AA
-
-
CommercielPaper
1,598 383
A-1
-
-
WoolAgencylnvestmentFund
20.381,833
NIA
-
-
FruiBends
3.92,958
NIA
-
827,000
Mortgage - Sacked Securities
571,188
AAA
-
571,188
c .h vnM Fiscal Agent
Money Market Funds
7,515,598
A
-
7,515599
Investment Agreements
1,180,576
NIA
-
-
qqa pq
619081673 1,425,351
Not
AA- Aa A A- A -1a A=1 BBB Rated
$ - $ - $ - $ - $ - $ - $ 5,220,433
6,524,690
894,022 - - - - - - 24, 188,951
3,510,602 5,240,010 7,870,974 012,072 - - - -
Sol Still
798,562 799,821 - -
20,381,833
600,294 1,665.664
1,180,576
$ 181.431.150 $ 12,392.30 S 79712,02 $ 6.908.673 3 3,206321 $ 8070.280 $ 5,248,010 $ 8,176,334 $ 812.072 $ 790.562 $ 799,621 $ 992 NO $ 56,315.007
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.
Investments in any one issuer that represent 5% or more of total City's investments are
as follows:
Issuer
Investment Type
Reported Amount
FFCB
Federal agency securities
$
14,210,531
FHLB
Federal agency securities
$
18,845,749
FHLMC
Federal agency securities
$
31,293,903
FNMA
Federal agency securities
$
20,828,402
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 governmental units by pledging securities in an undivided collateral pool
100
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
held by a depository regulated under state law (unless so waived by the governmental
unit). The market 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. As of June 30, 2009, none of the
City's deposits with financial institutions in excess of federal depository amounts were
held in uncol lateral ized accounts. As of June 30, 2009, City investments in the following
investment types were held by the same broker - dealer (counterparly) that was used by
the City to buy the securities:
Investment Type
Money Market Funds
U.S. Treasury Notes
U.S. Agencies
Corporate Notes
Mortgage backed Securities
Foreign Bonds
Commercial Paper
Reported Amount
4,835,107
2,625,574
35,663,772
12,162,146
571,188
3,092,958
1,598,383
For investments identified herein as restricted cash with fiscal agent, the fiscal agent
selects the investment under the terms of the applicable trust agreement, acquires the
investment, and holds the investment on behalf of the reporting government.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is
regulated by the California Government Code under the oversight of the Treasurer of the
State of California. The fair value of the City's investment in this pool is reported in the
accompanying financial statements at amounts based upon the City's pro -rata share of
the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized
cost of that portfolio). The balance available for withdrawal is based on the accounting
records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is not
rated.
101
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
(5) Capital Assets
Capital asset activity for the year ended June 30, 2009 was as follows:
Governmental Activities:
102
Beginning
Balance
Balance
Additions
Deletions
June 30, 2009
Non - depreciable:
Land and rights of way
$ 1,807,381,269
$ 8,400,000
$ -
$ 1,815,781,269
Work in progress
5,307,333
9,237,529
(1,377,686)
13,167,176
Depreciable:
Structures
67,059,241
1,219,856
68,279,097
Equipment
26,860,316
1,667,335
(766,850)
27,760,801
Infrastructure
303,296,714
6,762,876
(3,254,451)
306,805,139
2,209,904,873
27,287,596
(5,398,987)
2,231,793,482
Less accumulated
depreciation for:
Structures
(12,418,643)
(1,345,618)
-
(13,764,261)
Equipment
(17,896,022)
(2,224,188)
724,052
(19,396,158)
Infrastructure
(108,755,273)
(6,428,972)
1,345,188
(113,839,057)
(139,069,938)
(9,998,778)
2,069,240
(146,999,476)
Net Capital Assets
$ 2,070,834,935
$ 17,288,818
$ (3,329,747)
$ 2,084,794,006
102
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Business -type Activities:
Non - depreciable:
Land
Work in progress
Depreciable:
Structures
Equipment
Infrastructure
Less accumulated depreciation for:
Structures
Equipment
Infrastructure
Net
Beginning
Governmental
Business -type
Balance
Balance
Additions
Deletions
June 30, 2009
$ -
Public safety
1,268,732
$ 2,016,450
$ -
$ -
$ 2,016,450
312,949
690,663
(88,459)
915,153
205,793
-
Water
205,793
185,521
106,367
-
291,888
154,975,054
1,157,076
(130,000)
156,002,130
157,695,767
1,954,106
(218,459)
159,431,414
(112,175) (5,145) (117,320)
(157,445) (27,499) - (184,944)
(48,471,849) (2,057,900) 42,692 (50,487,057)
(48,741,469) (2,090,544) 42,692 (50,789,321)
$ 108,954,298 (136,438) $ (175,767) $ 108,642,093
Depreciation expense was charged in the following functions in the Statement of Activities:
103
Governmental
Business -type
Activities
Activities
General government
$ 313,265
$ -
Public safety
1,268,732
-
Public works
6,944,113
-
Community development
110,144
-
Community service
1,362,524
-
Water
-
1,524, 328
Wastewater
-
566,216
$ 9,998,778
$ 2,090,544
103
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
(6) Lonq -Term Debt
Changes in Long -Term Liabilities
Long -term liability for the year ended June 30, 2009, was as follows:
Amounts
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Governmental activities:
Certificates of participation
payable $ 4,665,000 $
Note payable 1,298,254
Pre - annexation agreement 10,800,000
CDBG Loan
Purchase Agreement
Payable
Workers' compensations
payable
Claims and judgements
payable
Compensated absences
Net OPEB obligation
Total governmental
activities
Business -type activities:
Water Revenue Bonds
payable
2,056,000
1,500,000
11,334,000 3,216,337
$ (330,000) $
4,335,000 $
345,000
(178,641)
1,119,613
186,679
(1,200,000)
9,600,000
1,200,000
(84,000)
1,972,000
89,000
(1,500,000)
(2,657,337) 11,893,000 2,973,250
5,613,525
3,678,834
(3,394,622)
5,897,737 2,446,253
9,113,095
2,828,270
(2,157,280)
9,784,085 1,939,662
2,221,000
5,423,000
(3,236,000)
4,408,000 -
48,600,874 15,146,441 (14,737,880) 49,009,435 9,179,844
3,095,000
(1,510,000) 1,585,000 1,585,000
Total $ 51,695,874 $ 15,146,441 $ (16,247,880) $ 50,594,435 $ 10,764,844
Internal service funds predominantly serve the governmental funds. Accordingly, long-
term liabilities for them are included as part of the above totals for governmental
activities. Also, liabilities for workers' compensation, claims and judgments,
compensated absences, and net OPEB obligation are typically liquidated from the
Internal Service funds through resources collected from individual funds.
104
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Governmental Activities
• Certificates of Participation
In Fiscal Year 1998 -99, the Newport Beach Public Facilities Corporation issued
$7,330,000 of Refunding Certificates of Participation to advance refund the 1992
Certificates of Participation used to finance the construction of the Central Library.
The refunding was undertaken to reduce total debt service payments over the next
twenty years by $690,228 and resulted in an economic gain of $495,745. The
Refunded Certificates were executed and delivered pursuant to the Prior Trust
Agreement. The City has previously entered into a project lease with the Newport
Beach Public Facilities Corporation to lease certain property, facilities,
improvements, and equipment.
The lease payments made by the City are held by a trustee who makes semi - annual
payments on the Certificates of Participation. The lease payments began May 15,
1994, and are in amounts sufficient to cover the payment of principal and interest of
the Certificates. The 1998 Certificates consist of $2,995,000 of Serial Certificates
with interest rates from 3.6% to 4.55% and $4,335,000 of Term Certificates with
interest rates from 5.05% to 5.15 %. Interest on the Certificates is payable
semiannually on June 1 and December 1 of each year. Future principal payments
range from $345,000 to $535,000 through June 1, 2019. Principal payments are
payable annually on June 1 of each year. At June 30, 2009, the City has a required
cash reserve balance for debt service of $565,778, which is recorded as a restricted
asset and reservation of fund balance in the Debt Service Fund. The outstanding
balance at June 30, 2009, amounted to $4,335,000.
The annual amortization requirements of the Certificates of Participation are as
follows:
Year Ending
June 30
Principal
Interest
Total
2010
345,000
220,448
565,448
2011
360,000
203,025
563,025
2012
380,000
184,845
564,845
2013
400,000
165,655
565,655
2014
420,000
145,455
565,455
2015 -2019
2,430,000
386,435
2,816,435
$ 4,335,000
$ 1,305,863
$ 5,640,863
• Note Payable
Note payable consists of a note to the California Department of Boating and
Waterways in 1987 for a loan in the amount of $3,300,000. The note is payable in
thirty annual principal and interest installments of $237,062 at 4.5% rate of interest
105
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
beginning August 1, 1987. The outstanding balance at June 30, 2009, amounted to
$1,119,613.
The annual amortization requirements for the Note Payable are as follows:
Year Ending
June 30
2010
2011
2012
2013
2014
2015 -2016
Principal
Interest
Total
186,679
50,383
237,062
195,080
41,982
237,062
203,859
33,203
237,062
213,032
24,030
237,062
222,609
14,443
237,052
98,354
6,688
105,042
$ 1,119,613
$ 170,729
$ 1,290,342
• Newport Coast Pre - Annexation Agreement Payable
In conjunction with the January 1, 2002, annexation of Newport Coast, the City
entered into an agreement payable with the Newport Coast Committee for a total of
$18,000,000 to reduce property owner assessments used to finance certain road
and street improvements. The principal -only agreement which began in the 2003
fiscal year, is payable over a period of fifteen years in equal installments of
$1,200,000. The outstanding balance at June 30, 2009, amounted to $9,600,000.
• CDBG Loan
In fiscal year 2003, the City received $2,400,000 in Section 108 loan proceeds to
assist with the funding for the Balboa Village Improvement Program. The loan is
collateralized by future Community Development Block Grant allocations with an
average interest rate of 6.5 %. Future principal payments range from $89,000 to
$208,000 through June 30, 2023. The outstanding balance at June 30, 2009,
amounted to $1,972,000.
The annual amortization requirements for the CDBG Loan are as follows:
Year Ending
June 30
Principal
Interest
Total
2010
89,000
108,535
197,535
2011
95,000
104,345
199,345
2012
102,000
99,653
201,653
2013
108,000
94,485
202,485
2014
116,000
88,722
204,722
2015 -2019
706,000
334,880
1,040,880
2020 -2023
756,000
95,595
851,595
$ 1,972,000
$ 926,215
$ 2,898,215
106
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
• Purchase Agreement Payable
In Fiscal Year 2007, the City entered into an agreement with the California
Department of Transportation (CalTrans) for the purchase of a 15.05 -acre parcel of
land at the corner of Superior Avenue and Coast Highway. The purchase price was
$5 million, to be paid in three installments with a 4.75% interest. The loan has been
paid off and there is no outstanding balance at June 30, 2009.
• Claims and Judgments
The City retains the risk of loss for general liability and workers' compensation claims
as described in note (8). These amounts represent estimates of amounts to be paid
for reported general liability and workers' compensation claims including incurred -
but- not - reported claims based upon past experience, modified for current trends and
information. While the ultimate amount of losses incurred through
June 30, 2009, is dependent on future developments, based upon information from
the City's attorneys, the City's claims administrators and others involved with the
administration of the programs, City management believes the accrual is adequate to
cover such losses. The estimated liability at June 30, 2009, for general liability
amounted to $5,897,737 and for workers' compensation was $11,893,000.
• Compensated Absences
The City's policies relating to compensated absences are described in Note (1). This
liability, to be paid in future years from available and future resources, at June 30,
2009, is $9,784,085.
• Net OPEB Obligation (NOO)
The net OPEB obligation is the difference between the ARC and the actual
contributions made. The City has elected to fund the cash subsidy portion
$2.72 million of the ARC. As for the implied subsidy $4.408 million, the City has
elected to fund it on a pay -as- you -go basis, thus resulting in net OPEB obligation of
$4.408 million.
Business -type activities
• Water Revenue Bonds
In Fiscal Year 1998 -99, the City issued $14,225,000 of Refunding Water Revenue
Bonds to refund the 1994 Water Revenue Bonds used to finance the construction
and acquisition of water storage and transmission facilities. The refunding was
undertaken to reduce total debt service payments over a ten -year period by
$481,153 and resulted in an economic gain of $418,469. The bonds are secured by
a pledge of net revenues of the water fund. The 1998 Serial Bonds bear interest
ranging from 3.6% to 4.5 %. At June 30, 2009, the City has a required cash reserve
balance of $1,453,768 which is recorded as cash with fiscal agent. Ten annual
107
(7)
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
principal payments are payable on August
payable on February 1 and August 1. At
balance was $1,585,000. The City's rate
1, and semiannual interest payments are
June 30, 2009, the outstanding principal
covenant requires a coverage ratio of at
least 125 %. For the year ended June 30, 2009, the rate covenant was 52 %.
The annual amortization requirements for the Water Revenue Bonds are as follows:
Year Ending
June 30 Principal Interest Total
2010 $ 1,585,000 $ - $ 1,585,000
Limited Obligation Bonds
Special Assessment Districts Bonds
The City has issued certain Assessment District and Community Facilities District
Bonds. Although the City collects and disburses funds for these districts, the City has no
obligation or duty to pay any delinquency out of any available funds of the City. Neither
the faith and credit nor the taxing power of the City is pledged to the payment of the
bonds, and therefore the bonded indebtedness is not shown in the financial statements
of the City. The City holds reserve funds on behalf of bondholders; the assets are
recorded in the Special Assessment Agency Fund. Bonds outstanding at June 30, 2009,
for each district under the Bond Acts of 1911 and 1915, and other special assessments,
are as follows:
Assessment District
No. 68
No. 69
No. 70
No. 71
No. 74
No. 75
No. 78
No.
No.
No.
No.
No.
No.
No.
79
82
86
92
99 -2
101
95 -1
Newport Shores
West Newport
Bay Shores
Balboa Boulevard
Island Avenue
Balboa Business
Little Balboa Island
Beacon Bay
Corona del Mar
Balboa Peninsula
Coast Highway
Ocean Front
Central Balboa
CIOSA Refunding Series A
108
Original Issue
3,813,562
4,978,498
1,380,996
796,942
222,629
821,204
1,348,196
1,215,134
274,967
300,174
1,425,000
1,953,952
2,467,597
15,495,000
Bonds Outstanding
June 30, 2009
2,860,000
3,660,000
955,000
260,000
130,000
615,000
720,000
665,000
170,000
175,000
1,425,000
1,953,952
2,467,597
9,390,000
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Other Limited Obligation Bonds
The City has issued revenue bonds for the purpose of advancing the net proceeds of the
bonds to Hoag Memorial Hospital Presbyterian for the purposes of financing the
acquisition, construction and equipping of health facilities located within the City.
The bonds are limited obligations of the City payable from payments required to be
made by Hoag Memorial Hospital. The City is not obligated to pay the principal or
interest of the bonds except from payments made by Hoag, and neither the faith and
credit nor the taxing power of the City is pledged to the payment of the principal and
interest on the bonds.
Bonds outstanding at June 30, 2009, are as follows:
Series 2008C
Series 2008D
Series 2008E
Series 2009A
Series 2009B
Series 2009C
Series 2009D
Series 2009E
$70,095,000
$80,000,000
$90,000,000
$66,835,000
$36,605,000
$36,605,000
$35,490,000
$35,490,000
The revenue bonds are subject to, at the option of Hoag Memorial Hospital Presbyterian,
optional and mandatory tender for purchase. If no tender or purchase is made, varying
redemption payments on the 2008 Series bonds commence on December 1, 2012, and
are required to be made through December 1, 2028. For the 2009 Series bonds, varying
redemption payments commence on December 1, 2014, and are required to be made
through December 1, 2038.
(8) Risk Management — General Liability and Workers' Compensation
The City is exposed to various risks of loss related to torts, theft of, damage to, and
destruction of assets, errors and omissions, injuries to employees, and natural disasters.
The City carries commercial insurance with independent third parties for loss risks
associated with real and personal property, and automotive liability. The City purchases
fidelity bonds for employees in key positions. Settled claims from these risks have not
exceeded commercial insurance coverage for the past three years. For general liability,
the City has excess insurance coverage of $26 million per occurrence with a self- insured
retention (SIR) of $500,000 per occurrence.
For workers' compensation and employer's liability insurance, the City has excess
insurance coverage of $1,000,000 per occurrence with a $1,000,000 SIR. This coverage
provides for work - related accidents and diseases.
st
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
The Insurance Reserve fund was established to account for costs associated with
general liability and workers' compensation. The Insurance Reserve fund is accounted
for as an internal service fund where assets are set aside for risk management,
administration, claim settlements and benefit distribution. A premium is charged to each
fund that accounts for part -time or full -time employees. The total charge allocated to
each of the funds is calculated using trends in actual experience after considering
unexpected and unusual claims.
Fund Liabilities are reported when it is probable that a loss has occurred and the amount
of the loss can be reasonably estimated. Liabilities include an amount for claims that
have been incurred but not reported (IBNR). Claims liabilities are calculated considering
the effects of inflation, recent claim settlement trends including frequency and amount of
payouts and other economic and social factors. The total liability claims payable include
$17,790,737 which represents the discounted present value at June 30, 2009; the
claims were discounted using an interest rate of five percent.
For the past three years, no payment on any claim or judgment has exceeded the
amount of applicable insurance.
(9) Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with
Internal Revenue Code Section 457. The plan, available to all City employees, permits
them to defer a portion of their salary until future years.
Section 457 plan assets were placed in trust for the exclusive benefit of all employees
and their beneficiaries. Therefore, all employee assets held in Section 457 plans are not
the property of the City and are not subject to the claims of the City's general creditors.
The assets under the plan, which are not included in the accompanying financial
statements, totaled $54,472,396 at June 30, 2009.
110
General Liability
Workers' Compensation
June 30, 2008
June 30, 2009
June 30, 2008
June 30, 2009
Unpaid claims, beginning of
fiscal year
$ 4,837,048
$ 5,613,525
$ 11,442,000
$ 11,334,000
Incurred claims (including
IBNR)
3,371,513
3,589,622
2,339,836
3,216,337
Claim payments
(2,595,036)
(3,305,410)
(2,447,836)
(2,657,337)
Unpaid claims, end of fiscal
year
$ 5,613,525
$ 5,897,737
$ 11,334,000
$ 11,893,000
For the past three years, no payment on any claim or judgment has exceeded the
amount of applicable insurance.
(9) Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with
Internal Revenue Code Section 457. The plan, available to all City employees, permits
them to defer a portion of their salary until future years.
Section 457 plan assets were placed in trust for the exclusive benefit of all employees
and their beneficiaries. Therefore, all employee assets held in Section 457 plans are not
the property of the City and are not subject to the claims of the City's general creditors.
The assets under the plan, which are not included in the accompanying financial
statements, totaled $54,472,396 at June 30, 2009.
110
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
(10) Pension Plan
Plan Description - Defined Benefit Plan
The City contributes to the California Public Employees Retirement System (PERS), an
agent multiple - employer public employee defined benefit pension plan. PERS provides
retirement and disability benefits, annual cost -of- living adjustments, and death benefits
to plan members and beneficiaries. PERS acts as a common investment and
administrative agent for participating public entities within the State of California. Copies
of PERS' annual financial report may be obtained from their executive office:
400 P Street, Sacramento, CA 95814.
Funding Policy
Participants are required to contribute 8% (9% for safety employees) of their annual
covered salary. The City makes the contribution required of City safety employees on
their behalf and for their account. In January 2008, non - safety employees modified their
PERS benefits and agreed to contribute 1% of the required 8% of annual salary for the
participant contribution and 2.42% of the City's employer contribution which is discussed
below. Benefit provisions and all other requirements are established by State statues
and City contract with employee bargaining groups.
Under GASB 27, an employer reports an annual pension cost (APC) equal to the annual
required contribution (ARC) plus an adjustment for the cumulative difference between
the APC and the employer's actual plan contributions for the year. The cumulative
difference is called the net pension obligation (NPO). The ARC for the period July 1,
2008 to June 30, 2009 has been determined by an actuarial valuation of the plan as of
June 30, 2005. The contribution rate indicated for the period is 9.055% for non - safety
employees and 29.67% for safety employees of annual covered payroll. Without the cost
sharing agreement with non - safety employees, the contribution rate would be 11.475%
for non - safety employees. In order to calculate the dollar value of the ARC for inclusion
in financial statements prepared as of June 30, 2009, the contribution rate is multiplied
by the payroll of covered employees that were paid during the period from July 1, 2008
to June 30, 2009.
111
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Annual Pension Cost
For 2009, the City's annual pension cost of $18,405,078 for PERS was equal to the
City's required and actual contributions. A summary of principle assumptions and
methods used to determine the annual required contribution is shown below:
Valuation Date
Actuarial Cost Method
Amortization Method
Average Remaining
Period
Asset Valuation Method
Actuarial Assumptions:
Investment Rate of
Return
Projected Salary
Increases
Inflation Rate
Payroll Growth
Individual Salary
Growth
Miscellaneous Plan
June 30, 2006
Entry Age Actuarial Cost
Method
Level Percent of Payroll
Safety Plan
June 30, 2006
Entry Age Actuarial Cost
Method
Level Percent of Payroll
27 Years as of the Valuation 31 Years as of the Valuation
Date Date
15 -Year Smoothed Market
7.75% (net of administrative
expenses)
3.25% to 14.45% depending
on age, service, and type of
employment
3.00%
3.25%
A merit scale varying by
duration of employment
coupled with an assumed
annual inflation growth of
3.0% and an annual
production growth of 0.25%
15 -Year Smoothed Market
7.75% (net of administrative
expenses)
3.25% to 13.15% depending
on age, service, and type of
employment
3.00%
3.25%
A merit scale varying by
duration of employment
coupled with an assumed
annual inflation growth of
3.0% and an annual
production growth of 0.25%
Initial unfunded liabilities are amortized over a closed period that depends on the plan's
date of entry into PERS. Subsequent plan amendments are amortized as a level percent
of pay over a closed 20 -year period. Gains and losses that occur in the operation of the
plan are amortized over a 30 -year rolling period, which results in an amortization of
about 6% of unamortized gains and losses each year. If the plan's accrued liability
exceeds the actuarial value of plan assets, then the amortization payment on the total
unfunded liability may not be lower than the payment calculated over a 30 -year
amortization period.
112
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
THREE -YEAR TREND INFORMATION FOR PERS ($ Amount in Thousands)
Fiscal
Annual Pension
Year
Cost (APC)
6/30/07
$16,207
6/30/08 $16,454
6/30/09 $18,405
Percentage of Net Pension
APC Contributed Obligation
100% $0
100% $0
100% $0
The Schedule of Funding Progress, below, shows the recent history of the actuarial
value of assets, actuarial accrued liability, their relationship, and the relationship of the
unfunded actuarial accrued liability to payroll. The Schedule of Funding Progress,
below, presents multiyear trend information about whether the actuarial value of the plan
assets is increasing or decreasing overtime, relative to the actuarial accrued liability for
benefits.
SCHEDULE OF FUNDING PROGRESS FOR PERS ($ Amount in Thousands
Entry Age
$
Unfunded
$163,158
$
Normal
Actuarial
Liability
Annual
55.016%
Valuation Accrued
Value of
(Excess
Covered
UAAL as a
Date Liability
Assets
Assets )
Funded Status Payroll
% of Payroll
Total
$
480,057
AVA Market
$
(A)
(B)
(A - B)
(B /A) Value (C)
[(A -B) / Cl
06/30/2006
Misc.
$
183,637
$163,158
$
20,479
88.8%
94.2%
$ 37,224
55.016%
Safety
296,420
231,701
64,719
78.2%
83.1%
26,053
248.413%
Total
$
480,057
$394,859
$
85,198
82.3%
87.4%
$ 63,277
134.643%
06/30/2007
Misc.
$
192,178
$178,524
$
13,654
92.9%
107.7%
$ 36,795
37.108%
Safety
308,552
250,062
58,490
81.0%
94.7%
25,035
233.633%
Total
$
500,730
$428,586
$
72,144
85.6%
99.7%
$ 61,830
116.681%
06/30/2008
Misc.
$
217,378
$195,954
$
21,424
90.1%
91.9%
$41,148
52.066%
Safety
336,061
264,634
71,427
78.7%
81.0%
28,056
254.587%
Total
$
553,439
$460,588
$
92,851
83.2%
85.3%
$ 69,204
134.170%
More current information regarding actuarial data is not yet available from PERS.
113
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Plan Description - Defined Contribution Plan
Pursuant to City Council Resolution No. 91 -106, the City entered into a defined
contribution plan administrated by the private administrator known as Public Agency
Retirement System ( "PARS ") for all of its part-time employees. In a defined contribution
plan, benefits depend solely on amounts contributed to the plan plus investment
earnings. All part-time employees are eligible to participate from the date of employment.
Federal legislation requires contributions of at least 7.5% to a retirement plan, and City
Council resolved to match the employees' contributions of 3.75 %. The City's
contributions for each employee (and interest earned by the accounts) are fully vested
immediately.
For the year ended June 30, 2009, the City's covered payroll for employees participating
in the plan was $2,919,260. Employees made contributions of $109,472 (3.75% of
current covered payroll), which was matched by the employer in the same amount.
Assets of the plan totaled $1,485,659 at June 30, 2009.
(11) Post Employment Health Care Benefits (OPEB)
The following description of the City of Newport Beach Medical Expense Reimbursement
Plan (the "Plan ") provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
Plan Description
Effective January 2006, the City and employee associations agreed to major changes in
the Post Employment Healthcare Plan. All employees and eligible retirees will participate
in a Health Reimbursement Arrangement ( "HRA ") sponsored by the City, held in trust
and managed by ING (Trustee), under IRS Revenue Ruling 2002 -41 (June 26, 2002)
and IRS Notice 2002 -45 (June 26, 2002).
All employees hired after January 1, 2006, and certain employees hired prior to this
date, as well as employees who elected to fully convert (Fully Converted) to a defined
contribution formula, participate in a program that requires mandatory employee and
employer contributions. However, once these contributions have been made to the
employee's account, the City has no further funding obligation to the Plan on their
behalf.
Certain employees hired prior to January 1, 2006, had the option to retain a hybrid of the
former defined benefit Plan, or to fully convert to the new Plan. Employees electing to
retain a hybrid of the former defined benefit formula (Hybrid) participate in a program
requiring mandatory defined contributions by employees and employer, as well as a
defined benefit consisting of an ongoing contribution, from the City to the participant's
HRA account, each month after retirement. Additionally, these employees are eligible to
receive health care benefits under the City's group health care plans. However, in order
to receive these benefits these employees are required to pay the City $100 per month,
114
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
up until their retirement, to offset the unfunded portion of post employment health
benefits existing at the inception of the Plan.
Employees who retired prior to January 1, 2006, continue to receive an ongoing defined
benefit consisting of a contribution made by the City to the participant's HRA account
each month. The defined benefit portion of the plan is closed to new participants.
The City of Newport Beach is the sole employer for the Plan. Total participants involved
in the plan were 1,194 as of June 30, 2009, consisting of 521 miscellaneous employees,
273 safety employees, and 400 retirees and their beneficiaries.
Benefits Provided
The City provides post - employment medical, dental and vision benefits to its retirees, the
same benefits as those afforded to active employees, with the general exception that
once a retiree becomes eligible for Medicare (that is, reaches age 65), he or she must
join a Medicare HMO or a Medicare Supplement plan, with Medicare becoming the
primary payor. Employees become eligible to retire and receive City -paid healthcare
benefits upon attaining age 50 (safety) or age 55 (miscellaneous) and 5 years of covered
PERS service or upon disability before age 50. The payment of benefits, for the purpose
of reimbursing eligible health care expenses, cease upon the earliest of the following: (1)
the date of the participant's, their spouse's, or qualified dependant's death; (2) the date
the balance of any fully converted participant account reaches zero, if no further
contributions will be made to said account; or (3) the date of termination of the Plan.
Plan Contributions
Contributions to the Plan are based on the participant's status as "Fully Converted" or
"Hybrid" as described above. All employees contribute 1% of their annual salary. Fully
Converted employees also receive a contribution from the City of $1.50 per month for
each year of service and age, after five years of employment. Additionally, Fully
Converted employees who previously participated in the defined benefit program receive
a one -time contribution from the City upon retirement. This contribution consists of $100
per month for every month paid into the defined benefit program, up to a maximum of
180 months. Further, the City contributes a percentage of any flexible leave bank
conversions. The percentage contributed to the HRA account is based on the bargaining
unit each employee is associated with.
Hybrid employees receive a one -time contribution of $75 per month for every month paid
into the defined benefit program, up to a maximum of 180 months. For Hybrid
employees, the City also contributes a percentage of any flexible leave bank
conversions. The percentage contributed to the HRA account is based on the bargaining
unit each employee is associated with. Upon retirement, Hybrid employees receive a
defined benefit consisting of a monthly contribution, made by the City, to the participant's
HRA account of approximately $400.
115
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Employees who retired prior to January 1, 2006, continue to receive a defined benefit
consisting of a monthly contribution, made by the City, to the participant's HRA account
each month of approximately $400 (approximately $425 for certain retired Police
employees). The defined benefit component of the plan is closed to new participants;
however, an actuarial valuation is utilized to determine the accrued liability and funding
requirements associated with this component of the plan.
Actuarial Valuation, Assumptions and Methods
Actuarial valuations of an ongoing plan involve estimates of the value of reported
amounts and assumptions about the probability of occurrence of events far into the
future. Examples include assumptions about future employment, mortality, and the
healthcare cost trend. Amounts determined regarding the funded status of the plan and
the annual required contributions of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made about
the future. The schedule of funding progress, presented as required supplementary
information following the notes to the financial statements, presents multi -year trend
information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for the benefits.
Projections of benefits for financial reporting purposes are based on the substantive plan
(the plan as understood by the employer and the plan members) and include the types
of benefits provided at the time of each valuation and the historical pattern of sharing of
benefit costs between employer and plan members to that point. The actuarial methods
and assumptions used include techniques that are designed to reduce the effects of
short -term volatility in actuarial accrued liabilities and the actuarial assets, consistent
with the long -term perspective of the calculations.
Valuation Date: June 30, 2008
Actuarial Cost Method: Entry Age Normal Cost Method (same as CaIPERS)
Amortization Method: Level percent of payroll over fixed 20 years
Amortization Period: Level contribution amount over fixed 20 years
Projected Salary Increases: 3.25% per year
Discount Rate: 7.75 % for cash subsidy, pre- funding through CalPERS
OPEB Trust
5% for implied subsidy, no pre- funding, benefits paid from
the City's General fund
116
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Implied Subsidy
Because one of the two health plans offered by the City is a non- community -rated plan
and retirees are offered the same premium rates as active employees, GASB 45
requires that an implied subsidy (the difference between expected claims and premiums
paid for retirees) be valued for the life of the retiree and accrued as a cost of the retiree
health care plan. The City has elected to fund the implied subsidy on a pay -as- you -go
basis since employer contributions to active and retiree medical plans are fixed, and
significant uncertainty exists whether additional cash flows will occur in the future as a
result of the implied subsidy.
Two -Year Annual Required Contribution (ARC) Trend
The 2008 -09 Annual Required Contribution (ARC) includes the Normal Cost plus a
20 -year amortization of the Unfunded AAL (in 000's):
Cash Subsidy
Implied Subsidy
Current Year Annual ARC As
Beginning Actual OPEB Percentage Covered a %of Ending
Balance ARC Contributfon Obligation Contributed Payroll Payroll Balance
$ - $ 2,720 $ 2,720 $
2,221 2,703
516
- 100% $ 56,527
2,187 19.1% 56,527
4.8% $
4.8% 4,406
Net OPEB Obligation $ 2,221 $ 5,423 $ 3,236 $ 2,187 59.7% $ 56,527 9.6% $ 4,408
117
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Two -Year Net OPEB Obligation (NOO) Trend
The NOO is the historical difference between the ARC and actual contributions. If the
City always contributes the entire ARC, then the NOO would equal zero. Benefit
payments are considered contributions. Contributions in excess of benefit payments
must be segregated in a trust for the sole purpose of paying Plan benefits in order to be
considered Plan Assets for the purpose of GASB 45.
The June 30, 2009, NOO is determined as follows (in 000's):
1 - Based on a prior period adjustment to the cash subsidy component of the NOO
2 - 2007 -2008 AOC and $6.2 million payment on retroactive NOO
3 - 2007 -2008 estimated implied subsidy
4 - 2006 -2009 estimated implied subsidy
Annual OPEB Cost (AOC)
The AOC is equal to the ARC, except when the City has a Net OPEB Obligation (NOO)
at the beginning of the year. In that case, the AOC will equal the ARC adjusted for
expected interest on the NOO and reduced by an amortization of the NOO. The 2008 -09
AOC is determined as follows (in 000's):
Interest
Amortization
ARC
Prefunding
of NOO
Total AOC
Cash Subsidy $2,720
$ -
$ -
$ 2,720
Implied Subsidy 2,734
Contributions
(142)
2,703
Total $5,454
$ 111
$ (142)
$ 5,423
& Benefit
Fiscal Year
July
1, NOO
AOC
Payments
June 30,
NOO
2007/08
Cash Subsidy
$
6,200 '
$
2,629
$ (8,829)2
$
-
Implied Subsidy
2,648
(427) 3
2,221
Total
$
6,200
$
5,277
$ (9,256)
$
2,221
2008/09
Cash Subsidy
$
-
$
2,720
$ (2,720)
$
-
Implied Subsidy
2,221
2,703
(516) °
4,408
Total
$
2,221
$
5,423
$ (3,236)
$
4,408
1 - Based on a prior period adjustment to the cash subsidy component of the NOO
2 - 2007 -2008 AOC and $6.2 million payment on retroactive NOO
3 - 2007 -2008 estimated implied subsidy
4 - 2006 -2009 estimated implied subsidy
Annual OPEB Cost (AOC)
The AOC is equal to the ARC, except when the City has a Net OPEB Obligation (NOO)
at the beginning of the year. In that case, the AOC will equal the ARC adjusted for
expected interest on the NOO and reduced by an amortization of the NOO. The 2008 -09
AOC is determined as follows (in 000's):
118
AOC as
% of
Payroll
4.8%
4.8%
9.6%
Interest
Amortization
ARC
on NOO
of NOO
Total AOC
Cash Subsidy $2,720
$ -
$ -
$ 2,720
Implied Subsidy 2,734
111
(142)
2,703
Total $5,454
$ 111
$ (142)
$ 5,423
118
AOC as
% of
Payroll
4.8%
4.8%
9.6%
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Two -Year Funding Status Trend
The schedule below shows the actuarial accrued liability (AAL), actuarial value of
assets, funded status, and the relationship of the unfunded actuarial accrued liability
(UAAL) to payroll as of the most recent valuation date.
(12) Interfund Receivables and Pavables
At June 30, 2009, interund receivables and payable were as follows:
General Fund
Internal Service Funds
Nonmajor Funds
Total
rL is fmm n, is to
$ 3,686,684
$ 3,686,684
462,187
3,224,497
$ 3,686,684
The above balances are primarily due to reclassification of negative cash balance in the
city wide cash pool.
119
Actuarial
Actuarial
Unfunded
Annual
UAAL as
Valuation
Accrued
Value of
AAL
Funded
Covered
a % of
Date
Liability
Assets
(UAAL)
Status
Payroll
Payroll
06/30/2006
Cash Subsidy
$29,639
$ -
$29,639
0.0%
$54,748
54.1%
Implied Subsidy
26,409
-
26,409
0.0%
$54,748
48.2%
Total
$56,048
$ -
$56,048
0.0%
$54,748
102.4%
06/30/2008
Cash Subsidy
$28,842
$ 8,785
$20,057
30.5%
$56,527
35.5%
Implied Subsidy
20,173
-
20,173
0.0%
$56,527
35.7%
Total
$49,015
$8,785
$40,230
0.0%
$56,527
71.2%
(12) Interfund Receivables and Pavables
At June 30, 2009, interund receivables and payable were as follows:
General Fund
Internal Service Funds
Nonmajor Funds
Total
rL is fmm n, is to
$ 3,686,684
$ 3,686,684
462,187
3,224,497
$ 3,686,684
The above balances are primarily due to reclassification of negative cash balance in the
city wide cash pool.
119
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
(13) Interfund Transfers
Interfund transfers at June 30, 2009, consisted of the following:
0 General Fund
y
mINon-Major Funds
�-1
Tide and
Submerged
General Fund Land
$ $ 20,314,554
$ 690,013
Transfers In
Contributions Non -Major
Fund Funds Total
$ 550,000 1,357,739 $ 22,222,293
- 442,060 1,132,073
Total $ 690,013 $ 20,314,554 $ 550,000 $1,799,799 $ 23,354,366
The City typically uses transfers to fund ongoing subsidies. The general fund transferred
$20,314,554 to subsidize for the maintenance and operation of the Tide and Submerged
Land Fund. As required by the pre- annexation agreement, interest accrued in the
amount of $439,355 in the Newport Coast Annexation fund, is due to and was
subsequently transferred to the General Fund.
(14) Reserved and Designated Fund Balances
The City has set up `reserves" of fund equity to segregate fund balances which are not
appropriable for expenditure in future periods, or which are legally set aside for a
specific future use. Fund "designations' also may be established to indicate tentative
plans for financial resource utilization in a future period.
The following provides explanations as to the nature and purpose of each reserve and
designation.
Reserved for encumbrances
Amounts reserved for encumbrances are commitments for materials and services on
purchase orders and contracts that are legally committed but not expended by fiscal
yearend.
Reserved for debt service
This account sets aside a portion of fund balance to meet the annual debt service
requirements.
Reserved for permanent endowment
This account reflects a permanent endowment established for the maintenance and
dredging of Upper Newport Bay.
120
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Reserved for affordable housing
This account reflects amounts collected from developers to build affordable housing to
all income levels in compliance with State planning laws.
Reserved for prepaid items
This account reflects prepaid items which are not available, spendable resources.
Reserved for inventories
This account reflects the value of inventories purchased by the City but not yet issued to
the operating departments.
Reserved for long -term receivable
This account reflects the value of the note receivable which is not an available and
spendable resource.
Designated for special purposes
This account reflects funds that have been designated for special projects which vary in
nature.
Designated for contingencies
Contingency designations represent funds for unexpected emergencies.
Designated for capital projects
This account reflects unspent appropriations committed to capital projects in the prior
year.
Designation for appropriations
This account reflects unspent appropriations that may be utilized to augment the
operating budget.
(15) Joint Venture Agreements
Bonita Canyon Public Facilities Financing Authority
The Bonita Canyon Public Facilities Financing Authority (Authority) is a joint venture
formed by the City of Newport Beach, Irvine Unified School District, and Newport-Mesa
Unified School District. The Authority's Board is comprised of two members appointed by
each of the member agencies. The Authority created Community Facilities
District 98 -1 to finance public facilities that will benefit the properties within their
boundaries. The Authority issued $45,000,000 of special tax bonds that will be repaid by
special assessments; the City is not obligated in any manner to repay the bonds. The
Authority paid the City $30,577,712 (81.7 %) to pay for the costs of acquiring and
constructing public facilities including parks and road improvements. At June 30, 2009,
the contributions from property owners are held in trust as cash with fiscal agent totaling
$1,005,565. The City does not make any annual contributions to this joint venture. The
121
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
City does not include the Authority as a component unit, as the City is not financially
accountable for the Authority's activities and the Authority is not fiscally dependent on
the City. The City's equity interest in this joint venture is not readily determinable.
Complete separate financial statements can be obtained at the Newport Mesa Unified
School District, 2985 Bear Street, Suite 8M, Costa Mesa, California.
Air Borne Law Enforcement
The City is a participant in a joint venture agreement with the City of Costa Mesa for the
operation of the Air Borne Law Enforcement program (ABLE). The oversight Board
consists of the Chiefs of Police of Costa Mesa and Newport Beach and one appointee
for each Member Agency for a total of four Board Members. The cities have a 50%
interest in the venture, with each city having provided an initial investment of two
helicopters and related equipment. The City of Newport Beach's cost of participating in
the ABLE program is recorded in the General Fund, which provides for the maintenance
and operation of the program as well as replacement of capital equipment used in the
operation of the program. Annually, the amounts paid by the City to this joint venture are
approximately $1,000,000. Operation costs are offset by fees collected from surrounding
cities that may subscribe to regular patrol or request assistance on an as- needed basis.
Shared equally between the cities of Newport Beach and Costa Mesa, the City's share
of net income from subscribers and other cities amounts to $70,378 for fiscal year 2008-
09. The City's 50% interest in the net equity of this joint venture at June 30, 2009,
amounts to $2,539,841. Complete separate financial statements can be obtained at the
City of Costa Mesa at 77 Fair Drive, Costa Mesa, California.
Metro Cities Fire Authority
The City of Newport Beach is a member of a joint venture agreement with the cities of
Anaheim, Fountain Valley, Fullerton, Garden Grove, Huntington Beach, and Orange for
the operation of a communication network to provide fire suppression, emergency
medical assistance, and rescue services. The oversight board consists of one voting
member and one alternate appointed by the governing body of each member agency.
The City of Newport Beach's costs are based each fiscal year upon the number of
recorded incidents attributable to the City divided by the recorded incidents attributable
to all members during the year and, are recorded in the General Fund as an expenditure
for service. Upon termination of the agreement, the proceeds from the sale of the
property and assets of the joint venture will be paid to each member agency pursuant to
their fair share percentage. Annually, the amounts paid by the City to this joint venture
are approximately $529,488. The City's 10.83% interest in the net equity of this joint
venture at June 30, 2009, amounts to $144,211. Complete separate financial statements
can be obtained at the Metro Cities Fire Authority offices at 201 S. Anaheim Boulevard,
Suite 302, Anaheim, California.
Integrated Law and Justice Agency of Orange County
The City is a participant in a joint venture agreement with the several other public
agencies of Orange County for the operation of the Integrated Law and Justice Agency
122
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
of Orange County ( ILJAOC). The Integrated Law and Justice Agency of Orange County
went into effect fiscal year 2007. The ILJAOC consists of 23 member agencies with an
oversight board consisting of 12 members from the participating member agencies. The
City acts as a treasurer for the ILJAOC and as such the activities of the ILJAOC are
recorded in an Agency Fund. Annually, each member agency pays a percentage of the
operating and replacement costs for the ILJAOC. The City's annual contribution and
interest in the net equity of this joint venture at June 30, 2009, was immaterial. Complete
separate financial statements can be obtained at the City of Newport Beach, 3300
Newport Boulevard, Newport Beach, California.
(16) Commitments and Contingencies
Claims and Judaments
Numerous claims and suits have been filed against the City in the normal course of
business. The estimated liability under such claims, based upon information received
from the City Attorney, contracted attorneys and the Risk Manager, has been estimated
and recorded as accrued claims and judgments payable (See Note 6).
Circulation Improvement and Open Space Agreement
The City entered into a Circulation Improvement and Open Space Agreement (CIOSA)
with a developer whereby the City received a loan of $14,395,572 to be used only for
certain transportation and circulation improvements. The City agreed to match the
contribution (without interest) by pledging 50% of future Fair Share Fees (developer
impact fees) which are recorded in the Circulation and Transportation Special Revenue
Fund. During the year ended June 30, 2009, the City received $859,820 of Fair Share
Fees, and $429,910 was paid to the CIOSA Construction capital projects fund. Through
June 30, 2009, $3,975,365 of Fair Share Fees has been paid. No additional liability has
been recorded, because any future repayment is uncertain; any amounts not contributed
by February 20, 2016, will be forgiven.
Newport Coast Pre - Annexation Agreement
In Fiscal Year 2001 -02, the City entered into a Pre - Annexation Agreement with the
Newport Coast Committee that stipulated certain terms and conditions for the
annexation of property collectively known as Newport Coast.
In conjunction with the annexation, the City also agreed to sell the water service rights
for the annexed area to Irvine Ranch Water District for $25.0 million.
Among other basic provisions, the Pre- Annexation Agreement stipulates specific
requirements for the use of proceeds from the sale of the water rights to Irvine Ranch
Water District. The City has entered into an agreement to reimburse Newport Coast
residents $18.0 million of the $25.0 million for certain public road and street
improvements previously financed by property owner assessments. The assessment
123
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
debt relief will be provided to Newport Coast residents in equal installments of
$1.2 million over 15 years. The remaining $7.0 million was used in locating, planning,
and constructing a Community Center within the annexed area.
Contractual commitments
Construction and contractual commitments for major construction projects are as
follows:
Oasis Senior Center Rebuild
Civic Center
Kings Road /Kings Place Pavement Reconstruction
Sunset Ridge Park
Bay Knolls and Mariners Community Slurry Seal
(17) Subsequent Events
Limited Obligation Bond Issue
Total
Project
Project
To Date Unexpended
Budqet
Expenditures Commitments
$19,440,842 $2,219,776 $12,406,841
7,099,486
1,694,415
5,465,839
800,000
71,839
703,244
851,083
274,194
586,329
830,000
13,225
523,565
Subsequent to year end the City has issued certain limited obligation, 1915 Act
assessment district improvement bonds listed as follows:
District Name Par Value Issue Date
Assessment District 103 Peninsula Point $3,295,700 October 2, 2009
The bonds are issued in serial maturities over fifteen years ranging from 1.5% to 4.1%.
The proceeds of these bonds, together with certain investment earnings, and certain
monies will be used to finance the cost of the undergrounding power, telephone and
cable facilities. Bond proceeds will also be used to establish a debt service reserve fund
and to pay the costs of issuance of the Bonds. The aggregate assessed value levied in
the district exceeds $168 million. Although the City will be collecting and disbursing
funds for these districts, the City has no obligation or duty to pay any delinquency out of
any available funds of the City. Neither the faith and credit nor the taxing power of the
City is pledged to the payment of the bonds.
Sale of Proposition 1A Receivable
The emergency suspension of Proposition 1 A was passed by the Legislature and signed
by the Governor as ABX4 14 and ABX4 15 as part of the 2009 -10 budget package on
July 28, 2009. Under the provision, the State will borrow 8% of the amount of property
tax revenue apportioned to cities, counties and special districts. The state will be
124
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
required to repay those obligations plus interest by June 30, 2013. The City of Newport
Beach share of the State borrowing amounts to nearly $6.2 million.
Authorized under ABX4 14 and ABX4 15, the Proposition 1A Securitization Program was
instituted by California Communities to enable Local Agencies to sell their respective
Proposition 1A Receivables to California Communities. Under the Securitization
Program, California Communities simultaneously purchased the Proposition 1A
Receivables, issued bonds ( "Prop 1A Bonds ") and will provide each local agency with
the cash proceeds in two equal installments, on January 15, 2010 and May 3, 2010.
The purchase price paid to the local agencies will equal 100% of the amount of the
property tax reduction. All transaction costs of issuance and interest will be paid by the
State of California. The City has no obligation on the bonds and no credit exposure to
the State.
Early Retirement Incentive Proaram (ERIP
In October, 2009, the City Council approved Resolution 2009 -73 authorizing an Early
Retirement Incentive Program (ERIP) to eligible employees, under the condition the
program would meet the immediate and future fiscal, managerial and operational goals
of the City to help mitigate declining General Fund revenues and institute long -term
structural changes to avert future budget shortfalls and ensure that the City remains
financially sound. There were 166 employees who met the following eligibility
requirements:
• Full -time, miscellaneous (non- safety) employee
• 50 years of age or older as of January 31, 2010
• Eligible to retire from PERS with at least five years of service
• Have at least three years of service with the City as of January 31, 2010
• Would actually retire from the PERS system
• Not the City Manger, City Clerk, or the City Attorney
A total of 51 people participated and were approved by the Council for the Early
Retirement Incentive Program through the Public Agency Retirement Systems ( "PARS ")
Supplemental Retirement Program ( "SRP "). The Supplemental Retirement Plan offered
through PARS allowed the City to set the payment, eligibility, and refilling based on the
City's needs, as well as allowing the expense to be known and quantifiable. The benefit
to the participating employee is paid via a 15 -year annuity of 7% of Final Pay up to
$75,000 and 6% of amount of Final Pay over $75,000, and it complements and is in
addition to an employee's CalPERS retirement benefit.
The total estimated cost to fund the ERIP benefit approximates $950,000 for the first five
years. After considering the costs of implementing the ERIP plan and the estimated
reduction to the City payroll, the net savings are expected to reach nearly $3.1 million
annually.
125
CITY OF NEWPORT BEACH
Notes to Basic Financial Statements
June 30. 2009
Financial Markets
A number of financial institutions have reported financial difficulties as an indirect result
of delinquencies associated with home mortgages. The full ramifications of this are not
determinable at this time and it's not possible to determine with certainty all of the
institutions that might be impacted by current market conditions.
126
FINANCIAL SECTION
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SUPPLEMENTARY Il
INFORMATION
NON-MAJOR GOVERNMENTALFUNOS
127
Non -major Special Revenue Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources
which are legally restricted to expenditures for specified purposes. The City of Newport
Beach Special Revenue Funds are as follows:
The State Gas Tax Fund accounts for all State Gas Tax related revenues and expenditures,
including street repair, construction, and maintenance. State law requires that these funds be
used exclusively for maintenance of the street and highway system.
The Asset Forfeiture Fund was established to account for all revenues resulting from the
seizure of assets in conjunction with criminal cases (primarily drug trafficking). It is the City's
policy that all such funds shall be used for enhancement of law enforcement programs.
The Office of the Traffic Safety DUI Grant Fund (OTS) is used to account for federal funding of
the Selective Traffic Enforcement Program (STEP). These funds are used exclusively for DUI
enforcement.
The Justice Assistance Grant Fund (JAG) is used to account for federal support of law
enforcement activities.
The Circulation and Transportation Fund is used to account for fair share revenues collected
from developers and restricted for capital improvement projects meeting the circulation element of
the City's General Plan.
The Building Excise Tax Fund is used to account for revenues received from builders or
developers on building or remodeling projects within the City. Expenditures from this fund are
used exclusively for public safety, libraries, parks, beaches, or recreational activities.
The Combined Transportation Fund is used to account for the revenues and expenditures of
funds received from the Orange County Combined Transportation Funding Program.
Expenditures from this fund are used exclusively for transportation related purposes.
The Arterial Highway Rehabilitation Fund is used to account for federal funds available
through the Federal Highway Administration Arterial Highway Rehabilitation Program to share the
cost of rehabilitating certain arterial roadways in the City.
The Community Development Block Grant Fund is used to account for revenues and
expenditures relating to the City's Community Development Block Grant program. These funds
are received from the Federal Department of Housing and Urban Development and must be
expended exclusively on programs for low or moderate income individuals /families.
The Air Quality Management District Fund is used to account for revenues received from the
South Coast Air Quality Management District restricted for the use of reducing air pollution.
The Environmental Liability Fund is used to account for solid waste fees restricted for
mitigation of future environmental liability relating to the handling of solid waste.
The Supplemental Law Enforcement Services Fund (SLESF) is used to account for revenues
received from the county to be used exclusively for front line law enforcement services.
128
The Traffic Congestion Relief Fund is used to account for all revenues received from the State
Treasury related to Assembly Bill 2928. State law requires that these funds be used exclusively
for maintenance or reconstruction costs on public streets and roads.
The Newport Coast Annexation Fund is used to account for revenues and expenditures related
to the Newport Coast Annexation Agreement.
The Prop f B Fund is used to account for all revenues and expenditures related to the Prop 1 B
fund. State law requires that these funds be used exclusively for all transportation related
projects, including state highway safety and rehabilitation projects, local street and road
improvements, congestion relief, traffic reduction and traffic safety.
Non -major Debt Service Funds
Debt Service Funds are used to account for debt service transactions including revenue
collections and payments of principal and interest on long -term obligations of the City.
The City of Newport Beach Debt Service Fund is as follows:
The Library COP Fund is used to account for the debt service transactions related to the
Certificates of Participation used to finance the construction of the Central Library.
Non -major Capital Projects Funds
Capital Projects Funds are used to account for resources used for the acquisition and
construction of capital facilities by the City, except those financed by Enterprise Funds.
The City of Newport Beach Capital Projects Funds are as follows:
The Assessment District Fund is used to account for the receipt and expenditure of funds
received from 1911 Act and 1915 Act Assessment Districts for capital improvement projects.
The CIOSA Construction Fund is used to account for the receipt and expenditure of funds for
the Circulation Improvement and Open Space Agreement (CIOSA). The improvements include
street and frontage improvements.
The Bonita Canyon Development Fund is used to account for the receipt and expenditure of
funds for the Bonita Canyon Public Facilities Agreement. The improvements include certain public
parks and recreation facilities, and street improvements and facilities.
The Oil Spill Remediation Fund is used to account for the receipt of the settlement proceeds
from the American Trader Company. These funds must be used on projects affecting the areas
damaged by the spill.
The Fire Station 7 Fund is used to account for the property acquisition, design and construction
of a new fire station which will replace a temporary fire station that provides service in the
northern part of the city.
The Marine Science Center Fund is used to account for the design and construction of a new
Marine Science Center.
The City Hall Improvement Fund is used to account for the design and construction of a new
Civic Center Complex.
129
The Mariners Library Fund is a Special Revenue Fund used to account for revenues and
expenditures of funds for the Mariners Library Capital Project.
The Oasis Senior Center Fund is used to account for revenues and expenditures associated
with the development and construction of the Oasis Senior Center.
The Misc. Santa Ana Heights Projects Fund is used to account for various grants and projects
associated with providing public works, parks and recreation opportunities within the part of the
City known as Santa Ana Heights.
The Marina Park Fund is used to account for the design and construction of the Marina Park.
The Sunset Ridge Park Fund is used to account for the design and construction of the Sunset
Ridge Park.
The Police Facility Fund is used to account for expenditures for the future space needs
expected of the existing facility buildings, including detailed facility planning and budgetary
guidelines for possible building rehabilitation and /or expansion projects.
The LG Headquarters Fund is used to account for expenditures for the future space needs
expected of the existing headquarters buildings, including detailed facility planning and budgetary
guidelines for possible building rehabilitation and /or expansion projects.
Non -major Permanent Funds
Permanent Funds are used to report resources that are legally restricted for the extent that
only earnings, not principal, may be used for purposes that support the reporting
government's programs. The City of Newport Beach Permanent Fund is as follows:
The Bay Dredging Fund is used to account for the receipt of permanent endowments intended
to fund the ongoing cost of maintaining and dredging of the Upper Newport Bay.
The Ackerman Fund is used to account for the receipt of permanent endowments intended as
follows: 75% of the fund's investment proceeds will be used for the purchase of High Tech
Library Equipment while the remaining 25% will be used for Scholarships for needy students.
130
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131
Assets
Cash and investments
Receivables:
Accounts
Intergovernmental receivables
Cash with fiscal agent
Prepaid items
Total Assets
Liabilities and Fund Balances
Liabilities:
Accounts payable
Unearned revenue
Unavailable revenue
Due to other funds
Total Liabilities
Fund balances:
Reserved for encumbrances
Reserved for debt service
Reserved for permanent endowment
Reserved for prepaid items
Unreserved:
Designated for special purposes
Undesignated
Total fund balances
Total liabilities and
fund balances
CITY OF NEWPORT BEACH
Combining Balance Sheet
Non -Major Governmental Funds
June 30, 2009
Special Revenue
Circulation
State Asset OTS and
Gas Tax Forfeiture DUI Grant JAG Transportation
$ 2,765,000 $229,869 $ - $ - $ 2,046,113
- 1,918 -
55,209
$ 2,765,000 $286,996 $ - $ - $ 2,046,113
$ 447 $ - $ - $ - $ 28,285
42,849
447 - 42,849 - 28,285
542,837 - - - 250,620
2,221,716 286,996 - - 1,767,208
- - (42,849) - -
2,764,553 286,996 (42,849) - 2,017,828
$ 2,765,000 $ 286,996 $ - $ - $ 2,046,113
132
Special Revenue
Building
Arterial
Community
Air Quality
17,978
Excise
Combined Highway
Development
Management
Environmental
Tax
Transportation Rehabilitation
Block Grant
District
Liability
-
-
- 9,883
-
$ 277,417
$ 3,974,325 $ -
$ -
$ 465,418
$ 3,034,533
-
- -
-
-
5,826
-
325,018 -
32,013
-
-
-
- -
-
-
68,864
2,949,908
$ 277,417
$ 4,299,343 $ -
$ 32,013
$ 465,418
$ 3,109,223
$ 14,882
$ 120,036 $
- $ 22,130 $
3,045 $
17,978
-
219,531
- -
-
-
-
142,682
- -
-
-
-
-
- 9,883
-
-
14,882
482,249
- 32,013
3,045
17,978
14,448
1,424,406
- -
-
3,609
-
-
- -
-
137,728
248,087
2,392,688
- -
462,373
2,949,908
262,535
3,817,094
- -
462,373
3,091,245
$ 277,417
$ 4,299,343 $
- $ 32,013 $
465,418 $
3,109,223
(continued)
133
CITY OF NEWPORT BEACH
Combining Balance Sheet
Non -Major Governmental Funds
June 30, 2009
(continued)
134
Special Revenue
Supplemental
Traffic
Newport
Law
Congestion
Coast
Prop 113
Enforcement
Relief
Annexation
Transportation
Assets
Cash and investments
$ - $
241,817
$
9,600,000
$
1,303,377
Receivables:
Accounts
-
-
-
-
Intergovernmental receivables
-
173,814
-
-
Cash with fiscal agent
-
-
-
-
Prepaid items
-
-
-
-
Total Assets
$ - $
415,631
$
9,600,000
$
1,303,377
Liabilities and Fund Balances
Liabilities:
Accounts payable
$ - $
22,160
$
-
$
-
Uneamed revenue
-
-
-
-
Unavailable revenue
-
-
-
-
Due to other funds
-
-
-
-
Total Liabilities
-
22,160
-
-
Fund balances:
Reserved for encumbrances
-
-
-
-
Reserved for debt service
-
-
-
-
Reserved for permanent endowment
-
-
-
-
Reserved for prepaid items
-
-
-
-
Unreserved:
Designated for special purposes
-
393,471
9,600,000
1,303,377
Undesignated
-
-
-
-
Total fund balances
-
393,471
9,600,000
1,303,377
Total liabilities and
fund balances
$ - $
415,631
$
9,600,000
$
1,303,377
134
Debt Service
Capital Projects
Library
Assessment
CIOSA
Bonita Canyon
Oil Spill
COP
District
Construction
Development
Remediation
Fire Station 7
$ -
$
1,665,194
$
1,935,818
$ -
$ -
$
52,318
-
41,417
-
-
-
-
565,778
1,569,798
-
1,005,565
-
-
$ 565,778
$
3,276,409
$
1,935,818
$ 1,005,565
$ -
$
52,318
$ -
$
65,704
$
-
$ -
$ -
$
-
-
-
-
27,603
-
-
-
65,704
-
27,603
-
-
-
259,052
10,489
-
-
-
565,778
-
-
-
-
-
-
2,951,653
1,925,329
977,962
-
52,318
565,778
3,210,705
1,935,818
977,962
-
52,318
$ 565,778
$
3,276,409
$
1,935,818
$ 1,005,565
$ -
$
52,318
(continued)
135
CITY OF NEWPORT BEACH
Combining Balance Sheet
Non -Major Governmental Funds
June 30, 2009
(continued)
Liabilities and Fund Balances
Liabilities:
Accounts payable
$ 3,435
Capital Projects
- $ 523,171
Unearned revenue
Marine
City Hall Mariners
Oasis
Unavailable revenue
Science Center
Improvements Library
Senior Center
Assets
506,713
1,227,088
- -
Cash and investments
$ -
$ - $ -
$ 6,009,088
Receivables:
Accounts
90,000
- -
-
Intergovernmental receivables
-
- -
-
Cash with fiscal agent
-
- -
-
Prepaid items
-
- -
-
Total Assets
$ 90,000
$ - $ -
$ 6,009,088
Liabilities and Fund Balances
Liabilities:
Accounts payable
$ 3,435
$ 523,725 $
- $ 523,171
Unearned revenue
-
-
- -
Unavailable revenue
-
-
- -
Duetootherfunds
506,713
1,227,088
- -
Total Liabilities
510,148
1,750,813
- 523,171
Fund balances:
Reserved for encumbrances
-
-
- -
Reserved for debt service
-
-
- -
Reserved for permanent endowment
-
-
- -
Reserved for prepaid items
-
-
- -
Unreserved:
Designated for special purposes
-
-
- 5,485,917
Undesignated
(420,148)
(1,750,813)
- -
Total fund balances
(420,148)
(1,750,813)
- 5,485,917
Total liabilities and
fund balances
$ 90,000
$ - $
- $ 6,009,088
136
Misc Marina Sunset Police Lifeguard
SAH Projects Park Ridge Park Facility Headquarters
396,641 - - - -
$ 396,641 $ - $ - $ - $ -
$ 190 $ 51,375 $ 74,842 $ - $ 14,000
396,641 - - - -
417,531 806,017 168,459 2,175 16,179
(417,721) (857,392) (243,301) (2,175) (30,179)
$ 396,641 $
137
$ -
(continued)
CITY OF NEWPORT BEACH
Combining Balance Sheet
Non -Major Governmental Funds
June 30, 2009
(continued)
Permanent Fund
Total
Other
Ackerman Governmental
Bay Dredging Donation Funds
Assets
Cash and investments $ 4,658,653 $ 1,141,487 $ 39,400,427
Receivables:
Accounts - - 535,802
Intergovernmental receivables - - 586,054
Cash with fiscal agent - - 3,141,141
Prepaid items - - 68,864
Total Assets $ 4,658,653 $ 1,141,487 $ 43,732,288
Liabilities and Fund Balances
Liabilities:
Accounts payable
$ - $
350
$ 1,485,755
Unearned revenue
-
-
219,531
Unavailable revenue
-
-
539,323
Due to other funds
-
-
3,224,497
Total Liabilities
-
350
5,469,106
Fund balances:
Reserved for encumbrances
-
-
2,505,461
Reserved for debt service
-
-
565,778
Reserved for permanent endowment
3,857,000
772,781
4,629,781
Reserved for prepaid items
-
-
137,728
Unreserved:
Designated for special purposes
801,653
368,356
34,189,012
Undesignated
-
-
(3,764,578)
Total fund balances
4,658,653
1,141,137
38,263,182
Total liabilities and
fund balances
$ 4,658,653 $
1,141,487
$ 43,732,288
M
This page left blank intentionally.
139
Revenues:
Other taxes
Intergovernmental
Licenses, permits and fees
Fines and forfeitures
Investment income
Net increase in fair value of investments
Donations
Other
Total revenues
Expenditures:
Current:
Public safety
Public works
Community development
Community services
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances (deficit), beginning
Fund balances (deficit), ending
CITY OF NEWPORT BEACH
Non -Major Governmental Fund Types
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year ended June 30, 2009
Special Revenue
State
Asset
OTS
Gas Tax
Forfeiture
DUI Grant JAG
(117,233)
(7,422)
$ 2,764,553
1,731,934
105,045
239,948 13,825
83,831
6,191
- -
31,511
1,893
- -
1,847,276
113,129
239,948 13,825
25,329 165,564 6,403
1,865,666 - - -
1,865,666 25,329 165,564 6,403
(18,390) 87,800 74,384 7,422
(160,000) -
(160,000) -
(178,390)
87,800
74,384
7,422
2,942,943
199,196
(117,233)
(7,422)
$ 2,764,553
$ 286,996
$ (42,849)
$ -
140
Special Revenue
Circulation
Building
Arterial
Community
Air Quality
and
Excise
Combined
Highway
Development
Management
Environmental
Transportation
Tax
Transportation
Rehabilitation
Block Grant
District
Liability
$ -
$ -
$ -
$ -
$ -
$ -
$ 497,932
-
-
1,730,412
670,918
551,715
98,737
-
-
175,831
-
-
-
-
-
859,820
-
-
-
-
-
-
76,637
7,256
123,062
-
-
12,920
87,991
28,807
2,728
46,257
-
-
4,857
32,930
965,264 185,815 1,899,731 670,918 551,715 116,514 618,853
- 16,705 123,878
124,479 - -
587,483 182,508 1,710,197 309,661 164,809 - 67,382
- - - - 84,000 - -
- - - - 112,253 - -
587,483 182,508 1,710,197 309,661 485,541 16,705 191,260
377,781 3,307 189,534 361,257 66,174 99,809 427,593
(509,910)
(509,910)
(132,129)
9,355
(10,658) -
(10,658) 9,355
3,307 189,534 350,599 75,529
99,809 427,593
2,149,957 259,228 3,627,560 (350,599) (75,529) 362,564 2,663,652
$ 2,017.828 $ 262,535 $ 3,817,094 $ - $ - $ 462,373 $ 3,091,245
(continued)
141
CITY OF NEWPORT BEACH
Non -Major Governmental Fund Types
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year ended June 30, 2009
(continued)
Revenues:
Other taxes
Intergovernmental
Licenses, permits and fees
Fines and forfeitures
Investment income
Net increase in fair value of investments
Donations
Other
Expenditures:
Current:
Public safety
Public works
Community development
Community services
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances, beginning
Fund balances (deficit), ending
Special Revenue
Supplemental Traff ic Newport
Law Congestion Coast Prop 1B
Enforcement Relief Annexation Transportation
S - $ $ $
81,004 718,852
659 3,247
- 1,221
1,252,014
381,234 37,266
58,121 14,008
81,663 723,320 439,355 1,303,288
81,663
- 333,884 - 1,354,500
1,200,000 -
81,663 333,884 1,200,000 1,354,500
389,436 (760,645) (51,212)
- - (439,355)
(439,355)
389,436 (1,200,000)
(51,212)
4,035 10,800,000 1,354,589
$ - $ 393,471 $ 9,600,000 $ 1,303,377
142
Debt Service Capital Projects
Library
Assessment
CIOSA
Bonita Canyon Oil Spill
COP
District
Construction
Development Remediation Fire Station 7
S -
22,023
2,286
75,889
3,322 700 2,318
-
12,183
28,525
- - -
-
8,073,604
-
190,500 - -
22,023
8,088,073
104,414
193,822 700 2,318
268,011
- 6,708,317 997,208
330,000 - -
240,984 - -
570,984 6,708,317 1,265,219
10,051 27,620
10,051 27,620
(548,961) 1,379,756 (1,160,805) 193,822 (9,351) (25,302)
548,750 764,634 429,910
548,750 764,634 429,910
(12,150)
(12,150)
(211) 2,144,390 (730,895) 193,822 (21,501) (25,302)
565,989 1,066,315 2,666,713 784,140 21,501 77,620
$ 565,778 $ 3,210,705 $ 1,935,818 $ 977,962 $ - $ 52,318
(continued)
143
CITY OF NEWPORT BEACH
Non -Major Governmental Fund Types
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year ended June 30, 2009
(continued)
Capital Projects
144
Marine
City Hall Mariners
Oasis
Science Center
Improvement Library
Senior Center
Revenues:
Othertaxes
$ -
S - S -
$ -
Intergovernmental
450,000
- -
-
Licenses, permits and fees
-
- -
-
Fines and forfeitures
-
- -
-
Investment income
-
- -
119,886
Net increase in fair value of investments
-
- -
-
Donations
22,313
- -
6,392,588
Other
2,057
- -
-
Total revenues
474,370
- -
6,512,474
Expenditures:
Current:
Public safety
-
- -
Public works
-
- -
-
Community development
-
- -
-
Community services
-
- -
2,282,350
Capital outlay
216,843
1,694,416 -
-
Debt service:
Principal
-
- -
-
Interest and fiscal charges
-
- -
-
216,843
1,694,416 -
2,282,350
Excess (deficiency) of revenues
over expenditures
257,527
(1,694,416) -
4,230,124
Other financing sources (uses):
Transfers in
47,150
- -
-
Transfers out
-
- -
-
Total other financing sources (uses)
47,150
- -
-
Net change in fund balances
304,677
(1,694,416) -
4,230,124
Fund balances, beginning
(724,825)
(56,397) -
1,255,793
Fund balances (deficit), ending
$ (420,148)
$ (1,750,813) $ -
$ 5,485,917
144
Capital Projects
Misc Marina Sunset Police Lifequard
SAH Projects Park Ridge Park Facility Headquarters
S - $ - $ - S - $ -
135,715
717,558
243,301 2,175 30,179
135,715 717,558 243,301 2,175 30,179
(135,715) (717,558) (243,301) (2,175) (30,179)
(135,715) (717,558) (243,301) (2,175) (30,179)
(282,006) (139,834) - - -
$ (417,721) $ (857,392) $ (243,301) $ (2,175) $ (30,179)
(continued)
145
CITY OF NEWPORT BEACH
Non -Major Governmental Fund Types
Combining Statement of Revenues,
Expenditures and Changes in Fund Balances
For the Year ended June 30, 2009
(continued)
Revenues:
Othertaxes
Intergovernmental
Licenses, permits and fees
Fines and forfeitures
Investment income
Net increase in fair value of investments
Donations
Other
Total revenues
Expenditures:
Current:
Public safety
Public works
Community development
Community services
Capital outlay
Debt service:
Principal
Interest and fiscal charges
Permanent Funds
278,959
- 408,594
19,350 1,272,757
- 2,282,350
- - 16,230,545
1,614,000
353,237
19,350 22,440,442
Excess (deficiency) of revenues
over expenditures 204,146 31,215 2,983,077
Other financing sources (uses):
Transfers in - - 1,799,799
Transfers out - - (1,132,073)
Total other financing sources (uses) - - 667,726
Net change in fund balances
204,146
Total
3,650,803
Fund balances, beginning
Other
1,109,922
Ackerman
Governmental
Bay Dredging
Donation
Funds
S -
$ -
$ 497,932
-
-
7,644,404
-
175,831
-
859,820
142,243
50,565
1,239,526
61,903
-
324,944
-
-
6,414,901
-
-
8,266,161
204,146
50,565
25,423,519
278,959
- 408,594
19,350 1,272,757
- 2,282,350
- - 16,230,545
1,614,000
353,237
19,350 22,440,442
Excess (deficiency) of revenues
over expenditures 204,146 31,215 2,983,077
Other financing sources (uses):
Transfers in - - 1,799,799
Transfers out - - (1,132,073)
Total other financing sources (uses) - - 667,726
Net change in fund balances
204,146
31,215
3,650,803
Fund balances, beginning
4,454,507
1,109,922
34,612,379
Fund balances (deficit), ending
$ 4,658,653
$ 1,141,137 $
38,263,182
146
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
State Gas Tax Special Revenue Fund
For the Year Ended June 30, 2009
Variance
with Final
Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental $ 1,507,500 $ 1,507,500 $ 1,731,934 $ 224,434
Investment income 145,000 145,000 83,831 (61,169)
Net increase in fair value of investments - - 31,511 31,511
Total revenues 1,652,500 1,652,500 1,847,276 194,776
Expenditures:
Capital outlay
Total Expenditures
Excess (deficiency) of revenues
over expenditures
Other financing uses:
Transfers out
Net change in fund balance
Fund balance, beginning
Fund balance (deficit), ending
4,561,003 3,187,829 1,865,666 1,322,163
4,561,003 3,187,829 1,865,666 (1,322,163)
(2,908,503) (1,535,329) (18,390) 1,516,939
(160,000) (160,000) (160,000)
(3,068,503) (1,695,329) (178,390) 1,516,939
2,942,943 2,942,943 2,942,943 --
$ (125,560) $ 1,247,614 2,764,553 $ 1,516,939
147
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 2009
Expenditures
Public safety
66,310
117,822
Variance
Net change in fund balance
(23,100)
(74,612)
with Final
Fund balance, beginning
199,196
199,196
Budget
Fund balance, ending
Budget Amounts
$ 124,584
Positive
Original Final
Actual
(Negative)
Revenues:
Intergovernmental
$ 40,000 $ 40,000
$ 105,045
$ 65,045
Investment income
3,210 3,210
6,191
2,981
Net increase in fair value of investments
- -
1,893
1,893
Total revenues
43,210 43,210
113,129
69,919
Expenditures
Public safety
66,310
117,822
25,329 92,493
Net change in fund balance
(23,100)
(74,612)
87,800 162,412
Fund balance, beginning
199,196
199,196
199,196 -
Fund balance, ending
$ 176,096
$ 124,584
$ 286,996 $ 162,412
MM
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
OTS DUI Grant Special Revenue Fund
For the Year Ended June 30, 2009
Variance
with Final
Budget
Budget Amounts Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental $ 345,591 $ 345,591 $ 239,948 $ (105,643)
Total revenues 345,591 345,591 239,948 (105,643)
Expenditures
Public safety
229,731
229,731
165,564 64,167
Net change in fund balance
115,860
115,860
74,384 (41,476)
Fund balance (deficit), beginning
(117,233)
(117,233)
(117,233) -
Fund balance (deficit), ending
$ (1,373)
$ (1,373)
$ (42,849) $ (41,476)
149
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
JAG Special Revenue Fund
For the Year Ended June 30, 2009
Variance
with Final
Budget
Budget Amounts Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental $ - $ - $ 13,825 $ 13,825
Total revenues 13,825 13,825
Expenditures
Public safety - - 6,403 (6,403)
Net change in fund balance 7,422 7,422
Fund balance (deficit), beginning (7,422) (7,422) (7,422) -
Fund balance (deficit), ending $ (7,422) $ (7,422) $ - $ 7,422
150
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Circulation and Transportation Special Revenue Fund
For the Year Ended June 30, 2009
Excess (deficiency) of revenues
over expenditures (1,001,246) (91,665) 377,781 469,446
Other financing uses:
Transfers out (80,000) (510,000) (509,910) 90
Net change in fund balance
(1,081,246)
(601,665)
(132,129) 469,536
Variance
2,149,957
2,149,957
2,149,957 -
Fund balance, ending
with Final
$ 1.548,292
$ 2,017,828 $ 469,536
Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
Revenues:
Licenses, permits and fees
$ 859,820
$ 859,820
$ 859,820
$ -
Investment income
75,000
75,000
76,637
1,637
Net increase in fair value of investments
-
-
28,807
28,807
Total revenues
934,820
934,820
965,264
30,444
Expenditures:
Capital outlay
1,936,066
1,026,485
587,483
439,002
Excess (deficiency) of revenues
over expenditures (1,001,246) (91,665) 377,781 469,446
Other financing uses:
Transfers out (80,000) (510,000) (509,910) 90
Net change in fund balance
(1,081,246)
(601,665)
(132,129) 469,536
Fund balance, beginning
2,149,957
2,149,957
2,149,957 -
Fund balance, ending
S 1,068,711
$ 1.548,292
$ 2,017,828 $ 469,536
151
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Building Excise Tax Special Revenue Fund
For the Year Ended June 30, 2009
152
Variance
with Final
Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
Revenues:
Licenses, permits and fees
$ 125,000
$ 125,000
$ 175,831
$ 50,831
Investment income
1,000
1,000
7,256
6,256
Net increase in fair value of investments
-
-
2,728
2,728
Total revenues
126,000
126,000
185,815
59,815
Expenditures:
Capital outlay
335,921
335,921
182,508
153,413
Net change in fund balance
(209,921)
(209,921)
3,307
213,228
Fund balance, beginning
259,228
259,228
259,228
-
Fund balance, ending
$ 49,307
$ 49,307
$ 262,535
$ 213,228
152
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Combined Transportation Special Revenue Fund
For the Year Ended June 30, 2009
Revenues:
Intergovernmental
Investment income
Net increase in fair value of investments
Total revenues
Expenditures:
Capital outlay
Net change in fund balance
Fund balance, beginning
Fund balance (deficit), ending
153
Variance
with Final
Budget
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
$ 2,067,348
$ 2,100,348
$ 1,730,412
$ (369,936)
75,000
75,000
123,062
48,062
-
-
46,257
46,257
2,142,348
2,175,348
1,899,731
(275,617)
5,853,490
3,447,264
1,710197
1,737,067
(3,711,142)
(1,271,916)
189,534
1,461,450
3,627,560
3,627,560
3,627,560
-
$ (83,582)
$ 2,355,644
$ 3,817,094
$ 1,461,450
153
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Arterial Highway Rehabilitation Special Revenue Fund
For the Year Ended June 30, 2009
Revenues:
Intergovernmental
Total revenues
Expenditures:
Capital outlay
Excess (deficiency) of revenues
over expenditures
Other financing uses:
Transfers out
Net change in fund balance
Fund balance (deficit), beginning
Fund balance (deficit), ending
Variance
with Final
Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
$ 400,000 $ 691,342 $ 670,918 $ (20,424)
400,000 691,342 670,918 (20,424)
291,342 291,342 309,661 (18,319)
108,658 400,000 361,257 (38,743)
(10,658) (10,658)
108,658 400,000 350,599 (49,401)
(350,599) (350,599) (350,599)
$ (241,941) $ 49,401 $ - $ (49,401)
154
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2009
Variance
with Final
Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
Revenues:
Intergovernmental $ 452,262 $ 452,262 $ 551,715 $ 99,453
Total revenues 452,262 452,262 551,715 99,453
Expenditures:
Community development
142,806
142,806
124,479
18,327
Capital outlay
164,812
261,415
164,809
96,606
Debt service:
Principal
84,000
84,000
84,000
-
Interest and fiscal charges
112,253
112,253
112,253
-
Total expenditures
503,871
600,474
485,541
114,933
Excess (deficiency) of revenues
over expenditures
(51,609)
(148,212)
66,174
214,386
Other financing sources:
Transfers In
9,355
9,355
Transfers (Out)
(15,450)
(15,450)
-
15,450
Total other financing (uses)
(15,450)
(15,450)
9,355
24,805
Net change in fund balance
(67,059)
(163,662)
75,529
239,191
Fund balance (deficit), beginning
(75,529)
(75,529)
(75,529)
-
Fund balance (deficit), ending
$ (142,588)
_L_(239, 191)
$
$ 239,191
155
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Air Quality Management District Special Revenue Fund
For the Year Ended June 30, 2009
Expenditures
Public works
26,415
26,415
16,705 9,710
Variance
85,585
85,585
99,809 14,224
Fund balance, beginning
with Final
362,564
362,564 -
Fund balance, ending
$ 448,149
Budget
$462,373 $ 14,224
Budgeted
Amounts
Positive
Original
Final
Actual
(Negative)
Revenues:
Intergovernmental
$ 100,000
$ 100,000
$ 98,737
$ (1,263)
Investment income
12,000
12,000
12,920
920
Net increase in fair value of investments
-
-
4,857
4,857
Total revenues
112,000
112,000
116,514
4,514
Expenditures
Public works
26,415
26,415
16,705 9,710
Net change in fund balance
85,585
85,585
99,809 14,224
Fund balance, beginning
362,564
362,564
362,564 -
Fund balance, ending
$ 448,149
$ 448,149
$462,373 $ 14,224
156
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Environmental Liability Special Revenue Fund
For the Year Ended June 30, 2009
Expenditures
Public works
$ 70,000
$ 128,400
$ 123,878
Variance
Capital outlay
27,780
68,680
67,382
with Final
Total expenditures
97,780
197,080
191,260
Budget
Net change in fund balance
Budgeted
Amounts
427,593
Positive
Fund balance, beginning
Original
Final
Actual
(Negative)
Revenues:
$ 3,130,872
$ 3,031,572
$ 3,091,245
$ 59,673
Taxes
$ 425,000
$ 425,000
$ 497,932
$ 72,932
Investment income
140,000
140,000
87,991
(52,009)
Net increase in fair value of investments
-
-
32,930
32,930
Total revenues
565,000
565,000
618,853
53,853
Expenditures
Public works
$ 70,000
$ 128,400
$ 123,878
$ 4,522
Capital outlay
27,780
68,680
67,382
1,298
Total expenditures
97,780
197,080
191,260
5,820
Net change in fund balance
467,220
367,920
427,593
59,673
Fund balance, beginning
2,663,652
2,663,652
2,663,652
-
Fund balance, ending
$ 3,130,872
$ 3,031,572
$ 3,091,245
$ 59,673
157
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Supplemental Law Enforcement Special Revenue Fund
For the Year Ended June 30, 2009
Revenues:
Intergovernmental
Investment income
Total revenues
Expenditures:
Public safety
Net change in fund balance
Fund balance, beginning
Fund balance, ending
`Q:
Variance
with Final
Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
$ 160,000
$ 160,000
$ 81,004
$ (78,996)
2,000
2,000
659
(1,341)
162,000
162,000
81,663
(80,337)
162,000
162,000
81,663
80,337
`Q:
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Traffic Congestion Special Revenue Fund
For the Year Ended June 30, 2009
159
Variance
with Final
Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
Revenues:
Intergovernmental
$ 1,138,717
$ 1,138,717
$ 718,852
$ (419,865)
Investment income
30,000
30,000
3,247
(26,753)
Net increase in fair value of investments
-
-
1,221
1,221
Total revenues
1,168,717
1,168,717
723,320
(445,397)
Expenditures:
Capital outlay
926,000
343,200
333,884
9,316
Net change in fund balance
242,717
825,517
389,436
(436,081)
Fund balance, beginning
4,035
4,035
4,035
-
Fund balance, ending
$ 246,752
$ 829,552
$ 393,471
$ (436,081)
159
Revenues
Intergovernmental
Investment income
Net increase in fair value of investments
Total revenues
Expenditures
Debt service:
Principal
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing uses
Transfers in
Transfers out
Total other financing (uses)
Net change in fund balance
Fund balance, beginning
Fund balance, ending
CITY OF NEWPORT BEACH
Newport Coast Annexation
Budgetary Comparison Statement
For the Year Ended June 30, 2009
Variance
with Final
Budget
Budgeted Amounts Positive
Original Final Actual (Negative)
450,000 450,000 381,234 (68,766)
58,121 58,121
450,000 450,000 439,355 (10,645)
1,200,000 1,200,000 1,200,000
1,200,000 1,200,000 1,200,000
(750,000) (750,000) (760,645) (10,645)
(200,000) (200,000) (439,355) (239,355)
(200,000) (200,000) (439,355) (239,355)
(950,000) (950,000) (1,200,000) (250,000)
10,800,000 10,800,000 10,800,000 -
$ 9,850,000 $ 9,850,000 $ 9,600,000 $ (250,000)
160
CITY OF NEWPORT BEACH
Budgetary Comparison Schedule
Proposition 1B Transportation Special Revenue Fund
For the Year Ended June 30, 2009
161
Variance
with Final
Budget
Budgeted Amounts
Positive
Original
Final
Actual
(Negative)
Revenues:
Intergovernmental
$ 1,354,500
$ 1,354,500
$ 1,252,014
$ (102,486)
Investment income
-
-
37,266
37,266
Net increase in fair value of investments
-
-
14,008
14,008
Total revenues
1,354,500
1,354,500
1,303,288
(51,212)
Expenditures:
Capital outlay
1,354,500
1,354,500
1,354,500
Net change in fund balance
-
-
(51,212)
(51,212)
Fund balance, beginning
1,354,589
1,354,589
1,354,589
Fund balance, ending
$ 1,354,589
$ 1,354,589
$ 1,303,377
$ (51,212)
161
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162
FINANCIAL SECTION
SUPPLEMENTARY
INFORMATION
INTERNAL SERVICE FUNDS
163
z
0
U
W
U]
J
Q_
U
z
Q
z
Iz
INTERNAL SERVICE FUNDS
The Internal Service Funds are used to allocate the cost of providing goods
and services by one department to other departments on a cost
reimbursement basis.
The City of Newport Beach Internal Service Funds are listed below:
The Insurance Reserve Fund is used to account for the City's self- insured
general liability and workers' compensation program.
The Compensated Absences Fund is used to account for the City's
accumulated liability for compensated absences.
The Retiree Insurance Fund is used to account for the cost of providing post -
employment Health Care Benefit.
The Equipment Fund is used to account for the cost of maintaining and
replacing the City's rolling stock fleet and the rental of the fleet to operating
departments.
164
Assets
Current assets:
Cash and investments
Receivables:
Accounts
Inventories
Prepaid items
Total current assets
Non - current assets:
Capital assets:
Equipment
Less accumulated depreciation
Total capital assets (net of
accumulated depreciation)
Total assets
Liabilities
Current liabilities:
Accounts payable and accrued liabilities
Accrued payroll
Due to general fund
Workers' compensation - current
General liability - current
Compensated absences - current
Total current liabilities
Non - current liabilities:
Workers' compensation
General liability
Compensated absences
Net OPEB obligation
Total Noncurrent liabilities
Total liabilities
Net Assets
Invested in capital assets, net of related debt
Unrestricted
Total net assets
CITY OF NEWPORT BEACH
All Internal Service Funds
Combining Statement of Net Assets
June 30, 2009
22,691,452 22,691,452
(15,883,324) (15,883,324)
6,808,128
Total
Insurance
Compensated
Retiree
Equipment
Internal
Reserve
Absence
Insurance
Maintenance
Service Funds
$ 20,882,363
$ 3,177,746
$ -
$ 15,426,317
$ 39,486,426
307,642
-
569,147
13,258
890,047
-
-
-
259,731
259,731
2,973,250
-
161,579
-
161,579
21,190,005
3,177,746
730,726
15,699,306
40,797,783
22,691,452 22,691,452
(15,883,324) (15,883,324)
165
6,808,128
6,808,128
21,190,005
3,177,746
730,726
22,507,434
47,605,911
$ 482,462
$ -
$ 13,455
$ 102,865
$ 598,782
-
-
-
43,376
43,376
-
-
462,187
-
462,187
2,973,250
-
-
-
2,973,250
2,446,253
-
-
-
2,446,253
1,939,662
1,939,662
5,901,965
1,939,662
475,642
146,241
8,463,510
8,919,750
-
-
-
8,919,750
3,451,484
-
-
-
3,451,484
-
7,844,423
-
-
7,844,423
4,408,000
4,408,000
12,371,234
7,844,423
4,408,000
-
24,623,657
18,273,199
9,784,085
4,883,642
146,241
33,087,167
-
-
-
6,808,128
6,808,128
2,916,806
(6,606,339)
(4,152,916)
15,553,065
7,710,616
$ 2,916,806
$ (6,606,339)
$ (4,152,916)
$ 22,361,193
$ 14,518,744
165
CITY OF NEWPORT BEACH
Internal Service Funds
Combining Statement of Revenues, Expenses
and Changes in Fund Net Assets
For the Year Ended June 30, 2009
Change in net assets
Net assets (accumulated
deficit), beginning
Net assets, (accumulated
deficit), ending
933,677 231,712 (2,196,785) 2,302,029 1,270,633
1,983,129 (6,838,051) (1,956,131) 20,059,164 13,248,111
$ 2,916,806 $ (6,606,339) _L _(L152,9161 $22,361,193 $ 14,518,744
Total
Insurance
Compensated
Retiree
Equipment
Internal
Reserve
Absence
Insurance
Maintenance
Service Funds
Operating revenues:
Charges for services
5 6,528,118
$ 2,266,002
$ 2,720,000
$ 6,193,129
$ 17,707,249
Retiree reimbursements
-
-
1,043,956
-
1,043,956
Employee contributions
-
-
376,538
-
376,538
Other
307,814
47,849
933
356,596
Total operating revenues
6,835,932
2,266,002
4,188,343
6,194,062
19,484,339
Operating expenses:
Salaries and wages
-
-
-
1,520,219
1,520,219
Depreciation
-
-
-
1,846,971
1,846,971
Professional services
-
-
-
51,067
51,067
Maintenance and supplies
-
-
-
615,644
615,644
Fleet parts and supplies
-
-
-
481,805
481,805
Workers' compensation
3,216,337
-
-
-
3,216,337
Claims and judgments
3,589,622
-
-
-
3,589,622
Compensated absences
-
2,158,082
-
-
2,158,082
OPEB ARC- Cash subsidy
-
-
2,720,000
-
2,720,000
OPEB ARC- Implied subsidy
-
-
2,703,000
-
2,703,000
Other
962,128
962,128
Total operating expenses
6,805,959
2,158,082
6,385,128
4,515,706
19,864,875
Operating income (loss)
29,973
107,920
(2,196,785)
1,678,356
(380,536)
Nonoperating revenues (expenses):
Investment income
629,676
86,254
-
442,250
1,158,180
Net Increase in fair value of investments
274,028
37,538
-
192,462
504,028
(Loss) on sale of capital assets
(11,039)
(11,039)
Total nonoperating revenues
903,704
123,792
-
623,673
1,651,169
Change in net assets
Net assets (accumulated
deficit), beginning
Net assets, (accumulated
deficit), ending
933,677 231,712 (2,196,785) 2,302,029 1,270,633
1,983,129 (6,838,051) (1,956,131) 20,059,164 13,248,111
$ 2,916,806 $ (6,606,339) _L _(L152,9161 $22,361,193 $ 14,518,744
CITY OF NEWPORT BEACH
Combining Statement of Cash Flows - Internal Service Funds
For the Year Ended June 30, 2009
Total
Insurance Compensated Retiree Equipment Internal
Reserve Absences Insurance Maintenance Service Funds
Cash flows from operating activities
Receipts from user departments
$ 6,220,476
$ 2,266,002 $ 3,763,956 $
6,430,087
$ 18,680,521
Payments to employees
(2,657,337)
(1,487,092) -
(1,512,521)
(5,656,950)
Payments to suppliers
(2,978,819)
- (3,362,636)
(1,250,179)
(7,591,634)
Other operating cash receipts
307,814
424,387
933
733,134
Net cash provided (used) for operating activities
892,134
778,910 825,707
3,668,320
6,165,071
Cash flows from noncapital financing activities:
111,081
559,000
- -
-
Cash received from other funds
284,212
(825,707)
-
(825,707)
Net cash provided (used)by noncapital financing
670,990 -
(825,707)
670,990
(825,707)
Cash flows from capital and related
financing activities:
Acquisition of capital assets
Proceeds from sale of capital assets
Net cash used for capital
and related financing activities
Cash flows from investing activities:
Interest on investments
Net cash provided for investing activities
Net increase (decrease) in cash
and cash equivalents
Cash and cash equivalents, beginning
Cash and cash equivalents, ending
Reconciliation of operating income to net cash
provided (used) by operating activities:
Cash flows from operating activities
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided by operating activities:
Depreciation
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable
Decrease in inventories
Decrease in prepaid items
Increase (decrease) in accounts payable and
accrued payroll
Increase in workers' compensation
Increase in general liability
Increase in compensated absences
Increase in net OPEB obligation
Total adjustments
903,704 123,792
903,704 123,792
(1,140,877) (1,140,877)
100,035 100,035
(1,040,842) (1,040,842)
634,712 1,662,208
634,712 1,662,208
1,795,838
902,702
- 3,262,190
5,960,730
19,086,525
2,275,044
12,164,127
33,525,696
$ 20,882,363
$ 3,177,746 $
$ 15,426,317
$ 39,486,426
$ 29,973
$ 107,920 $ (2,196,785)
$ 1,678,356
$ (380,536)
-
- -
1,846,971
1,846,971
(307,642)
- 861,617
236,958
790,933
-
-
89,867
89,867
-
- 5,553
-
5,553
326,591
- (31,678)
(183,832)
111,081
559,000
- -
-
559,000
284,212
- -
-
284,212
-
670,990 -
-
670,990
2,187,000
2,187,000
862,161
670,990 3,022,492
1,989,964
6,545,607
Net cash provided (used) by operating activities $ 892,134 $ 778,910 $ 825,707 $ 3,668,320 $ 6,165,071
Non -cash investing, capital, and financing activities:
Net increase in fair value of investments 274,028 37,538 - 195,462 507,028
(Loss) on sale of capital assets (11,039) (11,039)
Total of non -cash activities $ 274,028 _$37 538 $ $ 184,423 $ 495,989
167
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FINANCIAL SECTION
SUPPLEMENTARY
INFORMATION
FIDUCIARY FUNDS
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FIDUCIARY FUNDS
Fiduciary Funds are used to account for assets held by the City in a trustee
capacity, or as an agent for other government entities, private organizations, or
individuals.
The City of Newport Beach Fiduciary Funds are listed below:
The Special Assessment District Fund is used to account for funds received from
affected property owners and payable to holders of 1911 Act, 1915 Act and other
special assessment bonds.
The Business Improvement District Fund is used to account for monies collected
from local business districts for district property improvements and business
enhancement.
The Integrated Law and Justice Agency for Orange County (ILJAOC) Fund is used
to account for monies collected from member agencies for the operation of ILJAOC.
170
CITY OF NEWPORT BEACH
Agency Funds
Combining Statement of Fiduciary Assets and Liabilities
June 30, 2009
Assets
Cash and investments
Cash with fiscal agent
Prepaid expenses
Intergovernmental receivable
Total assets
Liabilities
Due to bondholders
Due to others
Due to ILJAOC
Total liabilities
Special Business
Assessment District Improvement ILJAOC
Fund Fund Fund Totals
$ 2,658,042 $ 229,398 $ 985,979 $ 3,873,419
4,101,765 - - 4,101,765
- 2,194 2,194
- - 80,000 80,000
$ 6,759,807 $ 229,398 $1,068,173 $ 8,057,378
$ 6,759,807 $ - $ - $ 6,759,807
- 229,398 30,209 259,607
- - 1,037,964 1,037,964
$ 6,759,807 $ 229,398 $ 1,068,173 $ 8,057,378
171
CITY OF NEWPORT BEACH
Statement of Changes in Fiduciary Net Assets
All Agency Funds
For the Year Ended June 30, 2009
Business Improvement District:
Assets
Cash and investments $ 120,869 $ 515,589 $ (407,060) $ 229,398
Liabilities
Due to others $ 120,869 $ 515,589 $ (407,060) $ 229,398
ILJAOC:
Balance
$ 7,249,205
$ (6,825,839)
Balance
Due to others
June 30, 2008
Additions
Deductions
June 30, 2009
Special Assessment:
448,933
589,031
1,037,964
Assets
Cash and investments
$
424,153
$
Cash and investments
$ 1,998,664
$ 4,395,646
$ (3,736,268)
$ 2,658,042
Cash with fiscal agent
4,337,777
2,853,559
(3,089,571)
4,101,765
Total Assets
$ 6,336,441
$ 7,249,205
_L ±,825,839i
$ 6,759,807
Liabilities
-
(44,363)
80,000
Due to bondholders
$ 6,336,441
$ 7,249,205
$ (6,825,839)
$ 6,759,807
Business Improvement District:
Assets
Cash and investments $ 120,869 $ 515,589 $ (407,060) $ 229,398
Liabilities
Due to others $ 120,869 $ 515,589 $ (407,060) $ 229,398
ILJAOC:
$ 6,336,441
$ 7,249,205
$ (6,825,839)
$ 6,759,807
Due to others
220,452
515,589
Assets
259,607
Due toILJAOC
448,933
589,031
1,037,964
Total Liabilities
Cash and investments
$
424,153
$
869,346
$ (307,520)
$
985,979
Prepaid expenses
-
2,194
2,194
Intergovernmental receivable
124,363
-
(44,363)
80,000
Total Assets
$
548,516
$
871,540
_L _251,883i
$
1,068,173
Liabilities
Due to others
$
99,583
$
-
$ (69,374)
$
30,209
Due toILJAOC
448,933
589,031
1,037,964
Total Liabilitites
$
548,516
8
589,031
$ (69,374)
$
1,068,173
Totals - All Agency Funds:
Assets
Cash and investments
$
2,543,686
$
5,780,581
$ (4,450,848)
$
3,873,419
Cash with fiscal agent
4,337,777
2,853,559
(3,089,571)
4,101,765
Prepaid expenses
-
2,194
2,194
Intergovernmental receivable
124,363
-
(44,363)
80,000
Total Assets
$
7,005,826
$
8,636,334
$ (7,584,782)
$
8,057,378
Liabilities
Due to bondholders
$ 6,336,441
$ 7,249,205
$ (6,825,839)
$ 6,759,807
Due to others
220,452
515,589
(476,434)
259,607
Due toILJAOC
448,933
589,031
1,037,964
Total Liabilities
$ 7,005,826
$ 8,353,825
$ (7,302,273)
$ 8,057,378
172
STATISTICAL SECTION
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FINANCIAL TRENDS
This section of the City of Newport Beach's Comprehensive Annual Financial
Report (CAFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health. The
statistical information presented herein is un- audited.
The following schedules contain trend information illustrating how the City's
financial performance and well -being has changed over time:
• Net Assets by Component
• Changes in Net Assets
• Fund Balances of Governmental Funds
• Changes in Fund Balance of Governmental Funds
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive annual financial reports and underlying accounting records for the relevant year.
174
CITY OF NEWPORT BEACH
Net Assets by Component
Last Eight Fiscal Years
(accrual basis of accounting)
Fiscal Year
2002 2003 2004 2005' 2006 2007 2008 2009
Governmental activities:
Invested In capital assets,
net of related debt $1,391,677,813 $1,412,372,465 $1,512,651,096 $ 1,915,348,883 $ 2,005,643,651 $ 2,027,026,053 $ 2,050,925,370 $ 2,060,959,265
Restricted 38,689,956 37,650,692 45,494,082 54,285,743 51,901,103 35,017,831 40,988,923 44,574,005
Unrestricted 41,095,786 49,322,283 46,772,913 61,894,956 56,662,229 75,989,169 87,802,996 96,592,345
Total governmental activities $1,471,463555 $1 _499.345,44Q $1 _60491H,091 $ 2,031529,582 $ 2,114,206,983 $ 2,13B4O33,053 $ 2,1]971]289 $ 2,202,125,615
Business -type activities'.
Invested In capital assets,
net of related debt $ 87,470,314 $ 91,912,205 $ 94,201 $ 99641,411 $ 104,602,286 $ 107,231,308 $ 107,313,603 $ 108,510,361
Restricted - - - - - - - -
Unrestricted 26,123,500 24,227,579 21,493,528 19,665,535 16,907,367 15,808,357 13,63902] 11,435,263
Total business -type activities _L_113 .593.814 $ 116.139]84 _L_115 .700.232 8 119.306.946 $ 121.509.633 _L123 .039.665 _L_120 .952.630 _L112 .945,624
Primary government:
Invested in capital assets,
net of related debt $1,479,148,127 $1,504;284,670 $1,606,857,800 $ 2,014,990,294 $ 2,110,245,917 $ 2,134,257,361 $ 2,158,238,973 $ 2,169,469,626
Founded 38689,956 37,650,692 45,494,082 54,285,743 51,901,103 35,017,831 40,988,923 44,574,005
Unrestricted 61 73,549;862 68.266,441 81,560,491 73,569,596 91,797,526 101,442,023 108,027,608
Total primary government $1,585.057,369 $1,615.485,224 $1,720,618,323 $ 2,150.836,528 $ 2235.716,616 $ 2.261,072,718 $ 2,300,669.919 $ 2,322.071239
r 2005 data varies from trend because of increased capital assets related to PCH Relinquishment
The City of Newport Beach implemented BASE 34 for the hacal year ended June 30, 2002,
Information poor to Me implementation of GASB 34 is not available.
175
CITY OF NEWPORT BEACH
Changes in Net Assets
Last Eight Fiscal Years
(accrual basis of accounting)
Fiscal Year
2005 data varies from trend because of Increased capital assets related to PCH Relinquishment.
2:2006 data varies from Vend because of increased capital assets related mostly to Bristol St. Relinquishment. Newport Coast Community Center, and Fire Station M 7.
32008 data varies from trend because of Increased capital asses related to Same Ana Heights Annexation.
The City of Newport Beach implemented GASB 34 for the rrscal year ended June 30, 2002.
Information prior to the implementation of GASS 34 is not available.
176
2002
2003
2004
2005
2006
2007
2008
2009
Expenses:
Governmental activities:
Gen eral government $
12,792,860
$ 10,799,630
$ 11,428,379
$ 11,378,609
$ 14,509827
$ 14,161
$ 15,556,657
$ 16,430,400
Public safety
47,168,918
56.521,871
58,178,633
63,214,291
67,789,121
69795,386
75,821,082
79,301,191
Public works
30,320,516
32.089,038
36127.832
46,359,871
33.870,359
39,179844
42,631,401
45,600292
Community development
4,471,397
5,782,215
6,229,785
6,437,006
8,157,925
9,020,868
10,052,871
10283,464
Community services
1I,W,086
10,404,285
14,741,SW
13,073,215
13,803,755
23,304,053
19,146,588
20,589,031
Interest on long -term debt
517,102
673,944
542,126
508,869
479,529
523,401
532,569
437,207
Total governmental activities
expenses
106,314,879
116,270,983
129,248,259
140,971,861
138,610,516
155,989,720
163,741,168
172,641,585
Business type activities:
Water
14,806,514
14,540,036
17,185,034
14,467,233
16,228,213
17,399,900
20,148,517
18,210,821
Wastewater
2.588,833
3,115,136
3,363,954
2,740,908
3,143,629
3,259837
3,423,592
3,753,053
Tofel business type activities
expenses
17,395,347
17,655,172
20,546,988
17,208,141
19,371,842
20,659,737
23,572,109
21,963,874
Total primary government
expenses
123.710,226
133,926,155
149,797247
158.180,002
157,982.358
176.649.457
187,313,277
19,605,459
Program revenues:
Governmental activities:
Charges for services:
General government
2,270,082
3,006162
2,109,141
2,412,769
2,623,272
2,944,100
3,055,982
2,543,880
Public safety
10,549,410
11,603,584
15,739,912
16,264,493
13,669,509
15,756,327
16,649,400
14757266
Public works
5,436,948
5,009.048
5,481,464
6,031,248
5,133,728
5,482,167
5,616,118
5,532,871
Communitydevelopmenl
3,236,483
4,022,904
5,196,276
5,129,858
5,667,289
5,682,636
5,597,309
4,852,534
Communityservices
2,533,899
6,039,228
3,846,566
3,952,862
9,433,278
9,05,504
9,203,513
9,052,330
Operating Grams and
Contributions:
7,891,059
8750,565
10,681,329
17,480,834
12,772,599
16,172,023
15,778,851
13,404,286
Capital Grants and
Contributions:
1,562,458
4,146,728
674,615
20,205,948 '
69,473,891 2
6,90,716
31,037,915 x
24,633,716
Total governmental adt'iviti.
program revenues
33,480,339
42.580217
43729,503
71,478,012
118773,566
61,996,473
86,939,088
74,776,883
Business -type activities:
Charges for services:
Water
16,665,724
16489,264
18,430,000
17,573,196
17,923,523
17.918,968
17,270,511
16,966,621
Wastewater
2,945,804
2768,941
2,882,793
2,900,672
3,311,089
3,535,050
3,552,780
3,479,565
Total business -type activities
program revenues
19,611,528
19,258225
21,312,793
20,473,868
21,234,612
21.454,018
20,823,291
20,446,186
Total primary government
program revenues
53,091,867
61,838,442
65,042.296
91,951,880
140,008,178
83,450.491
107,762,379
95,M.069
Net revenues (expenses):
Governmental activities
(72,834,5411)
(73,690,766)
(85,518,756)
(69,493,849)
(19,836,950)
(93,993,247)
(76;802,080)
(97,864,702)
Business type activities
2,216,181
1,603,053
763,805
3,265,727
1,862,770
794,281
(2,748,818)
(1,517,688)
Total net revenues $
(70,618,359)
$ (72,087713)
$ (84754951)
$ (66,226122)
$ (17,974,180)
$ (93,198,966)
$ (79,550,898)
$ (99,382,390)
2005 data varies from trend because of Increased capital assets related to PCH Relinquishment.
2:2006 data varies from Vend because of increased capital assets related mostly to Bristol St. Relinquishment. Newport Coast Community Center, and Fire Station M 7.
32008 data varies from trend because of Increased capital asses related to Same Ana Heights Annexation.
The City of Newport Beach implemented GASB 34 for the rrscal year ended June 30, 2002.
Information prior to the implementation of GASS 34 is not available.
176
CITV OF NEWPORT BEACH
Changes in Net Assets
Last Eight Fiscal Years
(accrual basis of accounting)
Primary Revenue Sources
$80,000,000
$70,000,000
$60,000,000 -
$50,000,000
$40,000,000
$30,000,000
$20,000,000 -
$10,000,000
$_
2002 2003 2004 2005 2006 2007 2008 2009
ae,opeM Taws
EsalsTex
alransem 0mupa,ixy Taws,
osalas Tax -In use
177
Fiscal Year
2002
2003
2004
2005
2006
2007
2008
2009
General revenues and other changes in
net assets:
Govemmental act ivities:
Taxes:
Property taxes $
33,583,659 $
39.474,864
$ 43,631.829
$ 46,303,366 $
57,888,545
$ 63,003,057 $
67,388,838 $
70126,680
Sales lax
18,796,571
20,133,598
21,843,884
18,977,828
21,465557
21,088,118
21,855,242
17,925,956
Sales lax in -lieu
-
-
-
5,339,827
5,720,028
7.348,253
8,017,539
7,503,113
Transient occupancy lazes
7,60,655
8.055,266
8,045,132
9,215,862
9,832,729
12.059,008
12,751,518
11,170,956
Business license
2,470,857
2,030,845
2,830,127
3,458,165
3,848.381
3,77,172
4,119,108
4,273,642
Franchise taxes
2,735,641
2,465,584
2,765519
3,029,476
3,162588
4,613,932
3,853,119
3,961,634
Motor vehicle license fees
4,380,070
3,970,103
3,624,917
6,395,860
300,751
391,559
304,920
356,237
Motor vehicle fines
711,693
742,957
-
-
-
-
-
-
Othertaxes
341,820
314,725
266,642
240,534
508,331
515,128
373,350
230,115
Investment income
2,171,474
2,111,451
584,415
1,209,074
1,939,941
3,175,582
3,655,314
1,764,827
Net increase in fair value of
investments
1,093,913
318,686
(360,586)
(258,125)
(715,615)
1545,533)
508485
1,096,848
Gain on sale of assets
160,236
130,954
-
-
-
-
-
-
Other
12,570
1,294,628
214,536
761,111
776,907
2,232,070
1,858,883
1,863,020
Property income
3,771,556
-
-
-
-
-
-
-
Share ofjoint venture net
2,120,582
389,418
146,819
100,325
(513791)
253,207
-
-
Capitalcontributions
836,206,102
17,836,792
102,713,421
213,779,060
-
-
-
-
Sale of service rights
26,000,000
-
-
-
-
-
-
-
Transfers
33,277
57,783
40,000
Total governmental activities
941 ,247,399
99,303,148
186,364,438
30,552,363
104,254,352
117,904,553
124,686,316
120,273,028
Business -type activities:
Investment income
888,779
505,619
203,041
424,157
549,012
792,936
588,670
374,693
Net increase in fair value of
investments
428,199
440,697
(87,078)
)87,921)
)169,095)
(57,185)
72,913
135,789
Property income
27,100
29,880
29,280
26,970
-
-
-
Capitalcontributions
-
-
215,331
-
-
-
-
Transfers
-
(33,277)
(57,783)
-
(40,000)
-
-
Totalbusiness - type activities
1,344,078
942,919
302,791
363,206
339917
735,751
661.783
510,682
Total primary government
942 ,591,477
10.246,67
186,667,229
308,915,569
10,594,269
118.640,304
125,348,099
120,783,710
Changes in net assets
Governmental activities
868,412,859
25,612,382
100,845.6B2
239,058,514
84,417,402
23,911,306
47,884.236
22,408,326
Business type activities
3,50.259
2,545,972
Ififl 96
3,628,933
2,202,687
1530,032
(2087,035)
(1007,006)
Total primary government $
871,973,118 $
28,158,354
$ 101,912,278
S 242,687,447 $
86,620,089
$ 25,441,338 $
45,797,201 $
21,401,320
Primary Revenue Sources
$80,000,000
$70,000,000
$60,000,000 -
$50,000,000
$40,000,000
$30,000,000
$20,000,000 -
$10,000,000
$_
2002 2003 2004 2005 2006 2007 2008 2009
ae,opeM Taws
EsalsTex
alransem 0mupa,ixy Taws,
osalas Tax -In use
177
CITY OF NEWPORT BEACH
Fund Balances of Governmental Funds
Last Eight Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2002 2003 2004 2005 2006 2007 2008 2009
General fund:
$ 4,669,957
$ 4,693,197
$ 3,973,823
$12,230,132
Reserved
$ 3,165,787
$ 4,393,418 $ 6,678,579 $ 4,673,198
$ 9,374,722
$ 7,233,703 $ 6,807,094 $ 5,907,205
Unreserved
25,171,551
31,929,366 37,765,801 49,814,197
45,212,339
62,679,499 72,252,045 73,703,759
Total general fund
$28,337,338
$36,322,784 $44,444,380 $54,487,395
$54,587,061
$69,913,202 $79,059,139 $ 79,610,964
Tide and submerged land fund:
Reserved $ 294,676 $ 457,777 $ 340,208 $ 552,713 $ 538,965 $ 642,985 $ 1,415,088 $ 351,012
Unreserved 238,822 356,075 120,328 194,174 27,633 143,946 259,701 288,952
Total tide and submerged land fund $ 533,698 $ 813,852 $ 460,536 $ 746,887 $ 566,598 $ 786,931 $ 1,674,789 $ 639,964
Mariners library fund:
$ 4,669,957
$ 4,693,197
$ 3,973,823
$12,230,132
$18,157,202
$ 8,958,652
$ 9,788,771
$ 26,535,293
Unreserved, reported in:
Reserved
$
- $
382,900
$
142,016
$ 1,029,047
$ -
$ -
$
-
$ -
Unreserved
20,617,006
21,582,975
596,800
7,120,032
824,438
-
(1,750,160)
(2,061,268)
(1,196,933)
3,271,954
(11,025,095)
Total Mariners library fund
$
- $
979,700
$
966,454
$ 1,029,047
$ (1,750,160)
$ (2,061,268)
$
-
$ -
Contributions fund
Total all other governmental funds
$22,847,399
$23,482,295
$20,869,436
$28,692,060
$28,145,118
$27,105,969
Reserved
$
7,501 $
-
$
-
$ 1,155,638
$ 3,223,047
$ 1,656,459
$
856,506
$ 641,469
Unreserved
(457,464)
(956,689)
1,042,147
794,249
1,977,264
Total Contributions fund
$
7,507 $ (457,464)
$ (956,689)
$ 2,197,785
$ 3,223,047
$ 1,656,459
$ 1,650,755
$ 2,618,733
All other governmental funds
Reserved
$ 4,669,957
$ 4,693,197
$ 3,973,823
$12,230,132
$18,157,202
$ 8,958,652
$ 9,788,771
$ 26,535,293
Unreserved, reported in:
Special revenue funds
11,057,395
18,789,098
16,895,613
10,099,453
7,506,021
18,684,221
20,617,006
21,582,975
Capital projects funds
7,120,032
-
-
6,076,969
2,077,124
(1,196,933)
3,271,954
(11,025,095)
Permanent funds
15
285,506
404,771
660,029
934,648
1,170,009
Total all other governmental funds
$22,847,399
$23,482,295
$20,869,436
$28,692,060
$28,145,118
$27,105,969
$34,612,379
$ 38,263,182
Fund Balances
$90,000,000
$80.000.000
$70,000,000
$60,000.000
$50,000,000
$40.000.000
$3n000,000 Fi
$20.000.000
$10.0oo,aoo
2002 2003 2004 2005 2006 2007 2008 2009
�TOlal General Fund
�TOlal all other Governmental Funds
The City of Newport Beach has elected to show only eight years of dale for this schedule.
178
CITY OF NEWPORT BEACH
Changes in Fund Balances of Governmental Funds
Last Eight Fiscal Years
(modified accrual basis of accounting)
' Adjusted to include Property Tex -In lieu of VLF which was previously reported as intergovernmental revenue
The City of Newport Beach has elected to show only eight years of data for this schedule.
179
Fiscal Year
2002
2003
2004
2005
2006
2007
2008
2009
Revenues:
Taxes
$ 65,878,471
$ 72,864,836
$ 79,874,751
$ 91,606,863 r
$ 102,737,810
$ 112,230,054
$ 118,758,201
$ 115,711,574
Intergovernmental
26,227,740
10,379,792
16,108,023
19,513,589
14,842,994
18,866,929
21,005,429
11,434,885
licenses and permits
3,350,958
4,397,520
5,429,632
4,968,234
5,708,965
4,574,659
6,474,789
5,883,515
Chaves for services
10,338,569
11,156,294
11,516,782
13,104,478
13,135,366
14,452,723
15,073,178
14,498,120
Fines end forfeitures
3,38.164
3,448,826
3,605,963
3,422,735
3,841,843
4,126,351
4,662,442
4.572,611
Invectmentincome
2,758,557
1,941,046
887,513
2,356,747
3,847,982
5,431,137
5,463,066
3,245,677
Net increase (decrease) In fair
value or investments
1,268,972
1,468,682
(360,586)
(493,879)
(1,325,211)
(626,881)
720,488
1,472,335
Property income
10,130,165
10,947,021
11,857,671
12,337,339
13,625,142
13,965,815
15,217,803
14,032,342
Donations
746,774
1,819,159
2,704,367
1,087,826
883,405
1,379,461
2,159,637
6.760,140
Contdbutlons from property
oars
-
-
-
14,779,013
-
-
-
Other
1,782,696
2,590,504
478,200
980,446
1,042,882
1,967,465
4,205,095
8,501,014
Total revenues
125,867,066
121,013,680
132,102,316
163,663,391
158,341,178
176,367,713
193,740,128
186,112,213
Expenditures
Cunent
Geneml government
12,292,008
9,689,275
11,024,256
10,920,667
12,531,200
13,706,061
14,508,103
15,560,823
Publo,eNty
47,841,176
53,035,377
56,849,718
59,482,134
65,262,069
68,843,947
73,486,413
78,561,175
Pubficworks
19,418,067
21,259,782
22,780,896
24,365,996
26,430,751
28,352,293
30,108,941
30,619,405
Community development
4,586,192
5,457,498
5,723,031
6,14.917
7,900,503
7,753,035
8,703,841
9,971,536
Community services
9,418,041
9,382,608
10,827,346
10,351,414
12,730,727
13,988,589
14,478,146
17,485,605
Capital outlay
38,613,906
14,684,897
15,188,550
33,486,048
24,811,237
45,615,169
20,524,638
26,002,338
Deblsarvloe:
PtIrcm lmtirement
1,291,099
1,822,913
1,668,350
1,688,801
1,715,542
3,736,587
3,263,948
3,292,641
Interest and fiscal charges
466,974
529,808
520,228
499,077
480,909
458,035
577,299
482,908
Total expenditures
133,927,463
115,862,158
124,582,375
146,939,054
151,862,938
182,453,716
165,651,329
181,976,431
Excess Irish ... hay) of Ieve nues
ever (under) expenditures
(8,060,397)
5,151,522
7,519,941
16,724,337
6,478,240
(6,086,003)
28,088,799
4,135,782
Other financing sources (uses):
Transfers in
10,927,460
14,376,167
16,553,395
20,601.957
25,194,920
20,271,396
27,583,922
23,354,366
Transfers out
(11,669,089)
(14,342,890)
(18,495,612)
(20,612,176)
(31,177,725)
(22,521,396)
(36,076,952)
(23,354,366)
Proceeds from issuance of debt
18,00,000
2,630,736
5,000,000
Total other financing sources
(uses)
17,258,371
2,564,013
(1,942,217)
(10,219)
(5,982,805)
2,750,000
(8,493,030)
0
Net change in fund balances
$ 9,197,974
$ 7,815,535
$ 5,577,724
$ 16,714,118
$ 495,435
_L_(3,336,003)
$ 19,595,769
$ 4,135,782
Lotts service ae a percentage of
noncapital expenditures
1.6%
2.2%
1.8%
1.7%
1.7%
2.8%
2.5%
2.3%
' Adjusted to include Property Tex -In lieu of VLF which was previously reported as intergovernmental revenue
The City of Newport Beach has elected to show only eight years of data for this schedule.
179
REVENUE CAPACITY
This section of the City of Newport Beach's Comprehensive Annual Financial
Report (CAFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health. The
statistical information presented herein is un- audited.
The following schedules present factors affecting the City's ability to generate its
own revenue and its most significant local revenue source, the property tax:
• Assessed Value and Estimated Actual Value of Taxable Property
• Direct and Overlapping Property Tax Rates
• Principal Property Tax Payers
• Property Tax Levies and Collections
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive annual financial reports and underlying accounting records for the relevant year.
MR
CITY OF NEWPORT BEACH
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
City
Fiscal Year
Taxable Assessed
Total Direct
Ended June
Value
Tax Rate
30
Public Utility
Secured
Unsecured
2000
324,960
13,091,299,313
1,295,776,000
14,387,400,273
1.000%
2001
2,000
15,087,602,671
915,394,966
16,002,999,637
1.000%
2002
2,000
16,515,797,641
913,075,074
17,428,874,715
1.000%
2003
16,531,505
21,339,270,499
1,085,951,066
22,425,221,565
1.000%
2004
16,531,505
23,219,166,299
1,372,432,950
24,591,599,249
1.000%
2005
53,310
25,193,662,254
1,484,019,033
26,677,681,287
1.000%
2006
53,310
28,136,607,566
1,914,106,993
30,050,714,559
1.000%
2007
53,310
31,423,473,042
1,569,867,249
32,993,340,291
1.000%
2008
53,310
34,188,568,583
1,668,015,342
35,856,583,925
1.000%
2009
699,230
36,436,106,070
1,538,539,482
37,974,645,552
1.000%
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 that 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's Office
181
Source: Orange County Auditor Controller's Office
CITY OF NEWPORT BEACH
Direct and Overlapping Property Tax Rates
(Rate per $100 of assessed value)
Last Ten Fiscal Years
2000 2001 2002 2003 2004 2005
2006
2007
2008
2009
City Direct Rates:
City basic rate
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
$ 1.000
$ 1.000
$ 1.000
$1.000
Total City Direct Rate
1.000 1.000 1.000 1.000 1.000 1.000
1.000
1.000
1.000
1.000
Overlapping Rates:
Water Districts
0.009 0.009 0.008 0.007 0.006 0.005
0.005
0.005
0.004
0.004
School Districts
0.0000 0.0000 0.0069 0.0067 0.0122 0.0343
0.0349
0.0315
0.0308
0.0302
Total Direct Rate
$ 1.009 $ 1.009 $ 1.015 $ 1.013 $ 1.018 $ 1.040
$ 1.040
$ 1.036
$ 1.035
$1.034
NOTE:
In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed
amount.
This 1.00%
is shared by
all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount,
property owners are
charged
taxes as a percentage of assessed property values for the payment of other debt obligations.
Source: Orange County Auditor Controller's Office
CITY Of NEWPORT BEACH
Principal Property Taxpayers
Current Year and Nine Years Ago
Source: HdL, Coren and Cone Co.
2009
2000
Taxable Assessed
Percent of Total
Percent Total
City Taxable
Taxable Assessed
City Taxable
Value
Assessed Value
Taxpayer
Value
Rank
Assessed Value
Rank
Irvine Company
$ 1,198,690,765
1
3.16%
$ 864,045,460
1
6.01%
Irvine Apartment Communities LP
357,260,080
2
0.94%
252,082,303
3
1.75%
4000 MacArthur LP
143,770,581
3
0.38%
N/A
0.00%
Newport Bluffs LLC
135,435,013
4
036%
N/A
0.00%
Balboa Bay Club Inc.
127,595,495
5
0.34%
N/A
0.00%
Jau Serrinconduclor Inc
125,900,087
6
0.33%
N/A
0.00%
100 Bayview LLC
121,735,889
7
032%
N/A
0.00%
UOR Newport Beach North LP
115,457,240
8
0.30%
N/A
0.00%
Coronado South Apartments LP
112,371,413
9
0.30%
N/A
0.00%
HHR Newport Beach LLC
85,182,642
10
0.22%
N/A
0.00%
$ 2,523,399,205
6.64%
$ 1,116,127,763
7.76%
Source: HdL, Coren and Cone Co.
Fiscal Year Taxes Levied for
Ended June the Fiscal Year
30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
24,667,494
27,405,295
31,298,541
37,092,528
42,469,238
45,111,328
47,286,816
70,194,492
69,315,117
71,006,357
CITY OF NEWPORT BEACH
Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the Fiscal
Year of Levy
Amount
24,207,104
26,856,091
30,651,143
36,351,026
41,420,410
54,063,951
45,558,039
68,820,402
68,242,326
70,879,909
Collections in
Total Collections to Date
Subsequent
Percent of
Years
Levy
25,605,677
98.13%
1,398,573
98.00%
886,625
97.93%
102,001
98.00%
529,986
97.53%
670,685
119.85%2
483,804
96.34%
728,365
98.04%
808,765
98.45%
846,904
99.82%
(294,366)
Total Collections to Date
Includes estimated levy for Newport Coast properties that were annexed on January 1, 2002.
2 Collections include nearly $10 million of Property Tax in lieu of Sales Tax and Vehicle License Fees not included in
the levy.
Source: Orange County Auditor Controller's Office
184
Percent of
Amount
Levy
25,605,677
103.80%
27,742,716
101.23%
30,753,144
98.26%
36,881,012
99.43%
42,091,095
99.11%
54,547,755 2
120.92%
46,286,404
97.88%
69,629,167
99.19%
69,089,231
99.67%
70,585,543
99.41%
Includes estimated levy for Newport Coast properties that were annexed on January 1, 2002.
2 Collections include nearly $10 million of Property Tax in lieu of Sales Tax and Vehicle License Fees not included in
the levy.
Source: Orange County Auditor Controller's Office
184
This section of the City of Newport Beach's Comprehensive Annual Financial
Report (CAFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health. The
statistical information presented herein is un- audited.
The following schedules exhibit the City's levels of outstanding debt over time, to
help readers assess the affordability of the current level of outstanding debt, and
the City's ability to issue additional debt:
• Ratios of Outstanding Debt by Type
• Ratios of General Bonded Debt Outstanding
• Direct and Overlapping Debt
• Legal Debt Margin Information
• Pledged Revenue Coverage
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive annual financial reports and underlying accounting records for the relevant year.
185
Fiscal
N/A
1,798,655
Year
N/A
N/A
Ended
Certificates of
18,000,000
June 30
Participation
Note Payable
16,800,000
2,400,000
1,293,586
2000
6,845,000
2,469,399
2001
6,610,000
2,350,930
2002
6,365,000
2,219,660
2003
6,110,000
2,082,483
2004
5,845,000
1,939,133
2005
5,570,000
1,789,332
2006
5,280,000
1,632,789
2007
4,980,000
1,469,202
2008
4,665,000
1,298,254
2009
4,335,000
1,119,613
CITY OF NEWPORT BEACH
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities
Pre- Purchase
Annexation Agreement
Agreement CDBG Loan Capital Leases Payable
N/A
N/A
1,798,655
N/A
N/A
N/A
914,830
N/A
18,000,000
N/A
1,150,927
N/A
16,800,000
2,400,000
1,293,586
N/A
15,600,000
2,340,000
862,975
N/A
14,400,000
2,276,000
420,773
N/A
13,200,000
2,207,000
166,056
N/A
12,000,000
2,134,000
49,490
3,000,000
10,800,000
2,056,000
-
1,500,000
9,600,000
1,972,000
-
N/A
Note: This excludes claims and judgements and employee compensated absence liabilities. Details
regarding the City's outstanding debt can be found in the notes to the financial statements.
These ratios are calculated using personal income and population for the prior calendar year.
Business -type Activities
Total Percentage of
Governmental Water Revenue Total Business- Total Primary Personal Debt Per
Activities Bonds type Activities Government Income ' Capita '
11,113,054
13,200,000
13,200,000
24,313,054
0.57%
335
9,875,760
12,095,000
12,095,000
21,970,760
0.47%
297
27,735,587
10,950,000
10,950,000
38,685,587
0.88%
552
28,686,069
9,765,000
9,765,000
38,451,069
0.79%
508
26,587,108
8,535,000
8,535,000
35,122,108
0.66%
442
24,456,105
7,255,000
7,255,000
31,711,105
0.58%
392
22,485,845
5,925,000
5,925,000
28,410,845
0.50%
342
23,632,692
4,540,000
4,540,000
28,172,692
0.44%
338
20,319,254
3,095,000
3,095,000
23,414,254
0.36%
278
17,026,613
1,585,000
1,585,000
18,611,613
0.25%
216
187
CITY OF NEWPORT BEACH
Outstanding Debt Serviced by the General Fund
Last Ten Fiscal Years
(In Thousands, except Per Capita)
Assessed value was used because the actual value of taxable property is not
readily available in the State of California.
iEY:
Purchase
Percent of
Fiscal Year
Certificates of
Agreement
Assessed
Ended June 30
Participation
Payable
Total
Value '
Per Capita
2000
7,070
N/A
7,070
0.05%
97
2001
6,845
N/A
6,845
0.05%
93
2002
6,610
N/A
6,610
0.04%
94
2003
6,365
N/A
6,365
0.04%
84
2004
6,110
N/A
6,110
0.03%
77
2005
5,845
N/A
5,845
0.02%
72
2006
5,570
N/A
5,570
0.02%
67
2007
5,280
3,000
8,280
0.03%
99
2008
4,980
1,500
6,480
0.02%
77
2009
4,335
N/A
4,335
0.01%
50
Assessed value was used because the actual value of taxable property is not
readily available in the State of California.
iEY:
CITY OF NEWPORT BEACH
Direct and Overlapping Debt
June 30, 2009
City Assessed Valuation:
Redevelopment Agency Incremental Valuation:
Adjusted Assessed Valuation:
$ 37,974,645,552
871,021,950
$ 37,103,623,602
Percentage Outstanding Debt Estimated Share of
Applicable' 6/30/09 Overlapping Debt
OVERLAPPING TAX AND ASSESSMENT DEBT:
Metropolitan Water District
Coast Community College District
Rancho Santiago Community College District
Laguna Beach Unified School District
Laguna Beach U.S.D. Community Facilities District No. 98 -1
Newport Mesa Unified School District
Newport Mesa U.S.O. Community Facilities District No. 90 -1
Santa Ana Unified School District
Irvine Ranch Water District Improvement Districts
Bonita Canyon Public Facilities Financing Authority Community Facilities District No.
98 -1
City of Newport Beach Special Improvement District No. 95 -1
City of Newport Beach 1915 Act Bonds
Orange County Assessment District No. 88 -1
Orange County Assessment District No. 99 -1 R
Orange County Assessment District No. 01 -1
Orange County Assessment District No. 01 -1 R
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
OVERLAPPING GENERAL FUND DEBT:
Orange County General Fund Obligations
Orange County Pension Obligations
Orange County Board of Education Certificates of Participation
Municipal Water District of O.C. Water Facilities Corporation
South Orange County Community College District Certificates of Participation
Newport Mesa Unified School District Certificates of Participation
Santa Ana Unified School District Certificates of Participation
Irvine Ranch Water District Certificates of Participation
City of Newport Beach Certificates of Participation
TOTAL GROSS OVERLAPPING GENERAL FUND DEBT
Less: MWDOC Water Facilities Corporation (100% self-supporting)
Santa Ana Unified School District 02AB (supported by scheduled deposits to trustee)
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT
GROSS COMBINED TOTAL DEBT (2)
NET COMBINED TOTAL DEBT
2.011%
34.732%
3.790%
14.584%
100.000%
71.707%
100.000%
8.696%
16.886 % -
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
9.781%
9.781%
9.781%
11.613%
3.009%
71.707%
8.696%
11.496%
100.000%
293,425,000
341,668,867
316,405,071
34,315,000
9,745,000
166,073,480
14205,000
221,191,491
63,143,308
41,990,000
9,390,000
16,081,549
35.948,296
15,010,000
54,834,000
7,115,000
1,640,541,062
$ 462,152,000
69,713,001
19,430,000
17,685,000
32,875,000
525,000
62,396,493
103,100,000
4,335,000
772,211,494
5,900,777
118,668,431
11,991,752
5,004,500
9,745,000
119,086,310
14,205,000
19,234,812
50,291,501
41,990,000
9,390,000
16,081,549
35,948,296
15,010,000
54,834,000
7,115,000
534,496,928
$ 45,203,087
6,818,629
1,900,448
2,053,759
989,209
376,462
5,425,999
11,852,376
4,335,000
78,954,969
(2,053,759)
(484,285)
$ 76,416,925
613,451,897
610,913,853
' The percentage of overlapping agency's assessed valuation located within boundaries of the city.
2
Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and nonbonded capital lease obligations.
Ratios to 2008 -09 Assessed Valuation:
Total Overlapping Tax and Assessment Debt
1.410%
Ratios to Adjusted Assessed Valuation:
Combined Direct Debt ($4,335,000)
0.010%
Gross Combined Total Debt
1.650%
Net Combined Total Debt
1.650%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/08:
$0.000
AB: ($425)
Source: California Municipal Statistics, Inc
ME
CITY OF NEWPORT BEACH
Legal Debt Margin Information
Last Ten Fiscal Years
2000 2001 2002 2003
Assessed valuation $ 14,387,400,273 $ 16,002,999,637 $ 17,428,874,715 $ 22,425,221,565
Conversion percentage 25% 25% 25% 25%
Adjusted assessed valuation 3,596,850,068 4,000,749,909 4,357,218,679 5,606,305,391
Debt limit percentage 15% 15% 15% 15%
Debt limit 539,527,510 600,112,486 653,582,802 840,945,809
Total net debt applicable to limit:
General obligation bonds
Legal debt margin $ 539,527,510 $ 600,112,486 $ 653,582,802 $ 840,945,809
Total debt applicable to the limit
as a percentage of debt limit 0.0% 0.0% 0.0% 0.0%
NOTE:
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this
provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981 -82 fiscal year,
each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The
computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation
perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for
local qovernments located within the state.
Source: City Administrative Servic
190
$ 922,184,972 $ 1,000,413,048 $ 1,126,901,796 $ 1,237,250,261 $ 1,344,621,897 $ 1,424,049,208
0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
191
Fiscal Year
2004
2005
2006
2007
2008
2009
$ 24,591,599,249
$ 26,677,681,287 $
30,050,714,559
$ 32,993,340,291 $
35,856,583,925
$ 37,974,645,552
25%
25%
25%
25%
25%
25%
6,147,899,812
6,669,420,322
7,512,678,640
8,248,335,073
8,964,145,981
9,493,661,388
15%
15%
15%
15%
15%
15%
922,184,972
1,000,413,048
1,126,901,796
1,237,250,261
1,344,621,897
1,424,049,208
$ 922,184,972 $ 1,000,413,048 $ 1,126,901,796 $ 1,237,250,261 $ 1,344,621,897 $ 1,424,049,208
0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
191
Fiscal
Year
Ended Water Revenue
June 30 '
CITY OF NEWPORT BEACH
Pledged- Revenue Coverage
Last Ten Fiscal Years
Water Revenue Bonds
Less Operating Net Available
Expenses Revenue
Debt Service
Principal Interest Coverage
2000
17,770,491
11,713,223
6,057,268
1,025,000
551,668
3.84
2001
17,839,320
11,784,120
6,055,200
1,145,000
510,224
3.66
2002
17,809,919
13,257,934
4,551,985
1,105,000
465,572
2.90
2003
17,326,604
12,430,144
4,896,460
1,185,000
418,172
3.05
2004
18,321,122
15,261,360
3,059,762
1,230,000
367,742
1.92
2005
17,878,016
12,967,118
4,910,898
1,280,000
314,622
3.08
2006
18,026,750
14,190,147
3,836,603
1,330,000
258,762
2.41
2007
18,534,689
15,614,885
2,919,804
1,385,000
199,900
1.84
2008
16,709,021 3
17,518,263
(809,242)
1,445,000
137,765
(0.51)
2009
17,259,977
16,437,227
822,750
1,510,000
71,325
0.52
Gross revenues includes operating revenues, interest, property, and intergovernmental revenues
in the Water Fund.
2 Total Water Fund operating expenses do not include interest or depreciation expenses.
3 Adjusted due to loss on deletion
192
��Ti �[iZr] 7a11'.I [ _ ► � d�P►L�] � TC�71 �17i : t7 7 ��F_� � CiP►I
This section of the City of Newport Beach's Comprehensive Annual Financial
Report (CAFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health. The
statistical information presented herein is un- audited.
The following schedules depict demographic and economic indicators to assist
the reader in understanding the socio- economic, environment in which the City's
financial activities take place:
• Demographic and Economic Statistics
• Principal Employers
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive annual financial reports and underlying accounting records for the relevant year.
193
Fiscal Year
CITY OF NEWPORT BEACH
Demographic and Economic Statistics
Last Ten Fiscal Years
Population Personal Income Per Capita Unemployment
(in thousands) Income Rate
2000
73,965
4,630,061
62,598
1.6%
2001
70,032
4,413,066
63,015
1.6%
2002
75,662
4,865,294
64,303
2.5%
2003
79,392
5,325,060
67,073
2.4%
2004
80,800
5,434,285
67,256
1.9%
2005
83,120
5,635,370
67,798
2.4%
2006
83,361
6,335,186
75,997
2.1%
2007
84,218
6,518,052
77,395
2.6%
2008
84,554
7,059,752
83,494
2.4%
2009
86,252
7,468,216
86,586
6.1%
Source: California State Department of Finance
194
CITY OF NEWPORT BEACH
Principal Employers
Current Year and 4 years ago
Pacific Investment Management Co.
Resort at Pelican Hill
Jazz Semi - Conductor
The Island Hotel
Fletcher Jones Motor Cars Inc.
Newport Beach Marriott Hotel &
Tennis Club
762
5
2009
530
7
2005'
735
6
Number of
-
Percent of Total
Number of
586
Percent of Total
Employer
Employees
Rank
Employment
Employees
Rank
Employment
Hoag Memorial Hospital
4,116
1
5.08%
3,640
1
N/A
Pacific Life Insurance
1,096
2
1.35%
2,788
2
N/A
Glidewell Dental
902
3
1.11%
-
-
N/A
City of Newport Beach
832
4
1.03%
788
4
N/A
Pacific Investment Management Co.
Resort at Pelican Hill
Jazz Semi - Conductor
The Island Hotel
Fletcher Jones Motor Cars Inc.
Newport Beach Marriott Hotel &
Tennis Club
762
5
0.94%
530
7
N/A
735
6
0.91%
-
-
N/A
586
7
0.72%
730
5
N/A
424
8
0.52%
525 2
8
N/A
420
9
0.52%
-
-
N/A
363
10
0.45%
475
9
N/A
Information for nine years ago is not available.
2 The Island Hotel was formerly the Four Seasons Hotel.
Source: Newport Beach Chamber of Commerce
195
This section of the City of Newport Beach's Comprehensive Annual Financial
Report (CAFR) presents detailed information as a context for understanding what
the information in the financial statements, note disclosures, and required
supplementary information says about the City's overall financial health. The
statistical information presented herein is un- audited.
The following schedules present information on the City's operations and
resources including service and infrastructure data to facilitate the readers
understanding of how financial statement information relates to the services the
City provides and the activities it performs:
• Full Time City Employees by Functions
• Operating Indicators by Function
• Capital Asset Statistics by Function
• Water Sold by Customer Type
• Water Rates
• Major Water Customers
Sources: Unless otherwise noted, the information in these schedules is derived from the
Comprehensive annual financial reports and underlying accounting records for the relevant year.
iw-
Function
General government
Public safety
Community development
Public works
Community services
Balboa yacht basin
Water
Wastewater
CITY OF NEWPORT BEACH
Full -time City Employees by Function
Last Ten Fiscal Years
Full -Time Employees as of June 30, 2009
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
69
75
77
77
84
86
90
93
93
99
344
358
384
384
385
385
388
393
397
397
39
42
44
46
46
47
48
52
56
57
157
155
163
164
162
162
163
163
165
160
51
53
57
58
57
60
65
66
68
71
1
1
1
1
1
1
31
34
33
33
33
34
34
34
35
35
11
10
12
12
13
13
13
13
13
13
Total 703 728 771 775 781 788 801 814 827 832
Source: City Administrative Services Department
197
Source: City of Newport Beach
198
CITY OF NEWPORT BEACH
Operating Indicators by Function
Last Ten Fiscal Years
Fiscal Year
2000
2001
2002
2003
2004
Police:
Adult Arrests
3,396
3,494
3,684
3,485
3,201
Parking Citations Issued
76,993
74,068
73,191
68,907
71,076
Fire:
Fire Responses
353
365
359
442
423
Fire Inspections
6,173
6,173
6,400
4,460
4,500
General Services:
Street Patching (tons of mix)
4,400
5,000
5,500
5,500
5,000
Sidewalk Repair (square feet)
65,000
50,000
50,000
55,000
50,000
Recreation & Senior Services:
Co- Sponsored Youth Organizations
141,594
165,464
188,689
200,077
185,627
Senior Transportation Services
10,260
11,000
10,917
12,094
12,041
Water:
New connections
163
154
118
99
53
Average daily consumption (hundred
cubic ft.) 17
17
17
17
17
Sewer:
New connections
N/A
N/A
N/A
50
25
Miles of Pipe Cleaned
N/A
N/A
202
262
293
Library Services:
Library Circulation of Materials
1,130,000
1,250,713
1,263,200
1,347,583
1,392,346
Source: City of Newport Beach
198
Fiscal Year
2005
2006
2007
2008
2009
3,079
2,999
3,289
3,599
3,231
72,665
74,780
67,170
67,258
64,577
228
214
175
247
236
4,550
6,470
7,136
6,682
6,912
4,500
4,600
4,980
4,644
3,882
50,000
55,000
59,459
60,222
49,644
194,749
194,722
201,258
255,424
318,779
11,936
13,000
13,493
14,500
15,984
55
52
95
60
26
17
17
17
17
17
24
24
45
45
12
205
335
226
241
220
1,475,025 1,443,078 1,622,573 1,622,573 1,575,518
..
CITY OF NEWPORT BEACH
Capital Asset Statistics by Function
Last Ten Fiscal Years
Fiscal Year
2000 2001 2002 2003
Police:
Stations
1
1
1
1
Fire:
Fire stations
6
6
7
7
Lifeguard Headquarters
1
1
1
1
Public works:
Streets (miles)
311
315
325
333
Streetlights
N/A
N/A
7,277
7,277
Traffic signals
N/A
121
130
131
Recreation & Senior Services:
Parks
45
45
47
47
Community centers
10
10
11
11
Aquatic Center
1
1
1
1
Water:
Water mains (miles)
N/A
282.35
294.81
294.81
Maximum daily capacity (thousands of gallons)
N/A
20,959
20,796
21,291
Wastewater:
Sanitary sewers (miles)
N/A
200.02
176.90
178.40
Storm sewers (miles)
N/A
103.08
51.40
53.50
Library Services:
Libraries
4
4
4
4
Source: City of Newport Beach
200
Fiscal Year
2004 2005 2006 2007 2008 2009
1
1
1
1
1
1
7
8
8
8
8
8
1
1
1
1
1
1
333
333
333
395
395
395
7,277
7,277
7,277
7,278
7,278
7,278
131
144
147
147
148
148
47
47
47
47
48
49
11
11
11
12
13
13
1
1
1
1
1
1
294.81
298.42
299.88
300.35
300.17
300.31
20,092
20,633
19,369
20,392
20,365
19,707
179.15
179.15
179.15
202.80
202.80
202.80
57.60
57.60
57.60
95.50
95.50
95.50
4
4
4
4
4
4
201
Source: City Utilities Department
202
CITY OF NEWPORT BEACH
Water Sold by Type of Customer
Last Ten Fiscal Years
(in hundred cubic feet)
Fiscal Year
2000
2001
2002
2003 2004 2005
2006
2007
2008
2009
Type of Customer:
Residential
N/A
4,227,699
4,459,302
4,430,485 4,362,402 4,289,629
4,190,791
4,492,489
4,046,969
3,989,816
Commercial
N/A
1,487,538
1,552,366
1,604,931 1,659,565 1,568,462
1,440,377
1,302,578
1,184,904
1,188,553
Government
N/A
678,594
480,809
597,395 486,051 487,189
607,650
601;659
361,457
420,697
Total
N/A
6,393,831
6,492,477
6,632,811 6,508,018 6,345,280
6,238,818
6,396,726
5,593,330
5,599,066
Total direct rate
per 100 cubic ft.
2.00
2.00
2.00
2.00 2.00 2.00
2.08
2.08
2.08
2.08
Source: City Utilities Department
202
CITY OF NEWPORT BEACH
Water Rates
Last Ten Fiscal Years
Fiscal Year
Ended June Monthly Rate per
30 Base Rate 100 cubic ft
2000
9.90
2.25
2001
9.90
2.25
2002
9.90
2.25
2003
10.00
2.25
2004
10.20
2.25
2005
10.35
2.25
2006
12.37
2.43
2007
12.37
2.43
2008
12.37
2.43
2009
12.37
2.43
Note: Rates are based on 3/4" meter, which is
the standard household meter size. The
City charges an excess -use rate above
normal demand.
203
CITY OF NEWPORT BEACH
Major Water Customers
Current Year and Seven Years Ago
' Information for fiscal years ended prior to 2001, is not available.
Source: City Revenue Division
204
2009
2001'
Percent of Total
Percent of Total
Water Customer
Water Charges
Rank
Water Revenues
Water Charges
Rank
Water Revenues
Big Canyon Country Club
$ 181,581
1
0.01052035
$ 169,900
2
0.95%
Irvine Apartment Management
143,043
2
0.008287554
N/A
0.00%
Hoag Memorial Hospital
132,152
3
0.007656557
101,436
6
0.57%
Newport Beach Country Club
115,829
4
0.006710843
152,362
3
0.85%
UDR Newport Beach
85,345
5
0.004944676
N/A
0.00%
Park Newport Ltd
84,229
6
0.004880018
150,062
4
0.84%
The Irvine Company
79,813
7
0.004624166
267,688
1
1.50%
Newport-Mesa USD
62,185
8
0.003602844
N/A
0.00%
Pacific View - Pierce Bros.
57,483
9
0.003330422
47,466
11
0.27%
Bluffs Homeowners Association
54,392
10
0.003151337
N/A
0.00%
Spyglass Hill Community Assoc.
43,422
11
0.002515762
N/A
0.00%
Newport Dunes Resort
42,672
12
0.002472309
N/A
0.00%
Newport Beach Marriott
38,144
13
0.002209968
N/A
0.00%
Eastbluff Homeowners Comm. Assoc.
38,112
14
0.002208114
N/A
0.00%
Jasmine Creek Community Assoc.
37,368
15
0.002165009
N/A
0.00%
$ 1,195,770
6.93%
$ 888,914
4.98%
' Information for fiscal years ended prior to 2001, is not available.
Source: City Revenue Division
204
City of Newport Beach
3300 Newport Blvd.
Newport Beach, CA 92663
(949) 644 -3123
www.newportbeachca.gov /financial info