HomeMy WebLinkAboutFiscal Year 1997-98 Financial Statement■
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Comprehensive Annual Financial Report
For the Year Ended June 30, 1998
Prepared by the Administrative Services Department
Richard C. Kurth, Interim Director
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CITY OF NEWPORT BEACH
Comprehensive Annual Financial Report
Year Ended June 30, 1998
TABLE OF CONTENTS
INTRODUCTORY SECTION
(Unaudited)
Tableof Contents ................................... .................................................................................. .i
Letter of Transmittal ...............................
GFOA Certificate of Achievement for Excellence in Financial Reporting .... ..........................xviii
CSMFO Certificate of Award for Outstanding Financial Reporting ......... ............................... xix
Listof City Officials .................................................................................... .............................xx
OrganizationChart ................................................................................. ............................... xxi
FINANCIAL SECTION
■ Independent Auditors' Report ............................................................... ............................... 1
0 General Purpose Financial Statements
Special Revenue Funds:
CombiningBalance Sheet ................................................................... .............................50
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 52
rStatement of Revenues, Expenditures and Changes
in Fund Balance - Budget and Actual:
• State Gas Tax Fund ................................................................. .............................54
■ • Asset Forfeiture Fund .............................................................. .............................55
• Tide and Submerged Land Fund .............................................. .............................56
• Contributions Fund ................................................................... .............................57
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Combined Balance Sheet - All Fund Types and Account Groups ....... ...............................
4
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Combined Statement of Revenues, Expenditures and Changes
in Fund Balances - All Governmental Fund Types ....................... ...............................
6
Combined Statement of Revenues, Expenditures and Changes
1■
in Fund Balances - Budget and Actual - All Governmental Fund Types .......................
8
Combined Statement of Revenues, Expenses and Changes
in Retained Earnings - All Proprietary Fund Types ........................ .............................12
Combined Statement of Cash Flows - All Proprietary Fund Types ...... .............................14
Notes to General Purpose Financial Statements .................................: .............................17
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Supplementary Information
General Fund:
ComparativeBalance Sheets .............................................................. .............................47
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Statement of Revenues, Expenditures and Changes
in Fund Balance - Budget and Actual ............................................. .............................48
Special Revenue Funds:
CombiningBalance Sheet ................................................................... .............................50
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ......... 52
rStatement of Revenues, Expenditures and Changes
in Fund Balance - Budget and Actual:
• State Gas Tax Fund ................................................................. .............................54
■ • Asset Forfeiture Fund .............................................................. .............................55
• Tide and Submerged Land Fund .............................................. .............................56
• Contributions Fund ................................................................... .............................57
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• Circulation and Transportation Fund ........................................ .............................58
.
• Building Excise Tax Fund ......................................................... .............................59
• Combined Transportation Fund ............................................... .............................60
• Community Development Block Grant Fund ............................ .............................61
.
• Ackerman Donation Fund ........................................................ .............................62
• Air Quality Management District Fund ...................................... .............................63
• Environmental Liability Fund .................................................... .............................64
• Supplemental Law Enforcement .............................................. .............................65
• Miscellaneous Grants .............................................................. .............................66
Capital Projects Funds:
Combining Balance Sheet ...................................................................... .............................68
Combining Statement of Revenues, Expenditures and Changes in Fund Balances ............
69
Statement of Revenues, Expenditures and Changes
in Fund Balance - Budget and Actual:
• Assessment District Fund .............................................................. .............................70
• CIOSA Construction ...................................................................... .............................71
Enterprise Funds:
CombiningBalance Sheet ...................................................................... .............................74
Combining Statement of Revenues, Expenses and Changes in Retained Earnings ............
76
.
Combining Statement of Cash Flows ..................................................... .............................78
Internal Service Funds:
.
CombiningBalance Sheet ...................................................................... .............................82
Combining Statement of Revenues, Expenses and Changes in Retained Earnings ............
83
Combining Statement of Cash Flows ..................................................... .............................84
.
Agency Funds:
CombiningBalance Sheet ...................................................................... .............................86
Combining Statement of Changes in Assets and Liabilities .................... .............................87
Account Groups:
General Fixed Asset Account Group:
Comparative Schedule of General Fixed Assets ................................. .............................90
General Long -Term Debt Account Group:
Comparative Schedule of General Long -Term Debt ............................ .............................91
STATISTICAL SECTION (Unaudited)
MiscellaneousStatistics ............................................................................ .............................93
Governmental Revenues by Source, Last Ten Fiscal Years ...................... .............................94
Governmental Expenditures by Function, Last Ten Fiscal Years .............. .............................94
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Assessed and Estimated Actual Values of Taxable Property, Last Ten Fiscal Years ............96
Secured Property Tax Levies and Collections, Last Ten Fiscal Years ....... .............................96
Construction Activity, Last Ten Fiscal Years .............................................. .............................98
.
Bank Deposits, Last Ten Fiscal Years ....................................................... .............................98
Property Tax Rates, Direct and Overlapping Governments, Last Ten Fiscal Years ..............100
Computation of Legal Debt Margin ............................ ............................... ............................100
.
Principal Property Taxpayers as of June 30, 1997.- .... ............ ..........................................
101
Schedule of Direct and Overlapping Bonded Debt .... ............................... ............................102
Revenue Bond Coverage, Last Ten Fiscal Years ...... ............................... ............................103 .
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CITY OF NEWPORT BEACH
P.O. BOX 1768, NEWPORT BEACH, CA 92658.8915
October 29, 1998
Honorable Mayor and Members of the
City Council
City of Newport Beach
Newport Beach, California
The Comprehensive Annual Financial Report of the City of Newport Beach for the year
ended June 30, 1998, is hereby submitted, as mandated by both local ordinances and
state statutes. These ordinances and statutes require that the City of Newport Beach
issue annually a report on its financial position and activity, and that this report be
audited by an independent firm of certified public accountants. Responsibility for the
accuracy, completeness and fairness of the data presented, including all disclosures,
rests with management. We believe the information presented is accurate in all
material aspects, and that it is reported in a manner designed to fairly present the
financial position and results of operations of the various funds, account groups, and
component units of the City of Newport Beach. All disclosures necessary to enable the
reader to gain an understanding of the City's financial activities have been included.
This report is presented in three sections. The Introductory Section, which is
unaudited, contains the table of contents, the transmittal letter, an organization chart of
the City, and a listing of the City's principal elected and appointed officials. The
Financial Section consists of the independent auditors' report, the general purpose
financial statements, notes to the financial statements, and the combining and
individual fund and account group financial statements and schedules. The Statistical
Section, which is unaudited, contains selected financial and demographic information,
generally presented on a multi -year basis.
The City provides a full range of services to its residents and visitors. Resources used
in supplying City services and maintaining operations are classified in three general
character groupings: Current, Capital, and Debt Service. Simply stated, Current
expenditures should be presumed to benefit the current fiscal period; Capital
expenditures should be presumed to benefit the current and future fiscal periods; and
Debt Service expenditures should be presumed to benefit past, current, and future
fiscal periods.
The City utilizes more specific categories to classify expenditures by the function of the
services the City provides, as follows:
General Government: City Council, City Manager, City Attorney, City Clerk, and
Administrative Services.
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3300 Newport Boulevard, Newport Beach
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Public Safety: Police, Fire, Paramedic, Disaster Assistance, and Marine Safety. N
Public Works: Engineering, Construction, and Maintenance of public streets, .
highways, buildings, parks, and infrastructure; as well as fleet maintenance and
sanitation. ■
Community Development: Planning, Zoning, and Building Permit services and
enforcement. .
Community Services: Libraries, Recreation, Arts & Cultural, and Social Services.
Proprietary Functions: Enterprise Operations for water and wastewater utilities; as
well as Internal Service Operations for risk management and fleet maintenance and
replacement.
DESCRIPTION OF REPORTING ENTITY ■
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 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 the Newport Beach Public Facilities Corporation, which is a
component unit of the City. This component unit, which is discussed below, is included
in the City's reporting entity because of the significance of its operational or financial
relationship with the City. Even though it is a legally separate organization, the City of ■
Newport Beach elected officials have continuing full or partial accountability for fiscal
matters of the entity. 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
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E 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 fund type,
■ capital projects fund type, and general long -term debt account group.
Organizations Other than Reporting Entity. The following entities provide services
. within the City but are not component units: State of California, County of Orange, and
various school and other special districts. These entities do not meet the above criteria
of a component unit and their financial information is not included in this report.
. LOCAL ECONOMIC CONDITION AND OUTLOOK
Although the City's long -term tax base is broad and diverse, there are significant short-
term fluctuations in all City revenues, including taxes. The City's primary revenue
sources are property taxes, sales taxes and uniform transient occupancy taxes. All
together, taxes make up nearly 50 percent of the City's entire revenue base and 65
percent of the City's General Fund revenues. Although significantly smaller than the
top three revenue sources, other noteworthy individual revenue sources include state
motor vehicle license fees (VLF), parking meters, parking lots, business license taxes,
franchise taxes, interest income, and parking fines. Other, smaller sources of revenue
are numerous and highly varied.
■ After several tumultuous years, the economies of Orange County and California have
■ recently returned to a healthier condition. Although the sharp economic recovery was
short- lived, the City's top three revenue sources all increased over last year's totals for
the fourth year in a row. Favorable interest rates and economic conditions increased
real estate activity, which sparked a rise in the City's property tax revenues. Uniform
transient occupancy tax revenue increased 9 percent, while sales and use taxes gained
17 percent over last year's totals. Despite the Asian economic crisis and other factors,
. the long -term outlook on the City's revenue stream is still quite favorable.
■ As geographic and socioeconomic conditions in Orange County remain very desirable,
property values in Newport Beach are projected to be solid for at least the next few
years. Thirty percent of the City's General Fund revenues are directly based on
. property values. Record sales with certain veteran local businesses, the addition of
new businesses, and other developments establish a solid foundation for strong sales
. tax revenue forecasts as well.
Several recent changes in state and federal legislation that indirectly benefit municipal
. government may also offset the adverse impact of the Asian market crisis on the City.
As a result of the Small Jobs Projection Act, favorable changes made to the capital
gains tax have and will encourage turnover of pre - proposition thirteen property which in
turn captures the newly assessed property at higher market values. Senate Bill 602 will
also have a favorable impact on municipal governments by shifting sales tax on leased
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property from general county allocation to direct payment to point -of -sale locations.
Earlier this year VLF revenues were at risk to State cuts, however, they were replaced
with no unfavorable impact to local government. Finally, introduced mid -year, the Trial
Court Funding Act represents a new revenue source to local governments.
With the economic downturn in the early part of this decade and subsequent State of
California budget actions, the City suffered a significant and ongoing adverse impact on
its finances. For several years the City implemented aggressive measures to cope with
the economic hardships of the local economy while attempting to minimize the effect on
service delivery. Measures included reorganization, analysis of mission critical
services, outsourcing, staff reductions, revenue enhancement, financing and
development agreements, use of City reserves, capital improvement prioritization and
many other retrenchment tactics.
The City has continued to provide the highest quality services to its residents and
commercial establishments, even though some of these measures complicated the
City's operating environment. The reduced size of the work force has remained
essentially unchanged except for accommodations for new service areas resulting from
the Bonita Canyon annexation.
Because of the City's outstanding beaches and harbor, Newport Beach attracts as
many as 100,000 tourists a day. This tourist population helps to maintain the City's
strong economic base, but it also requires additional expenditures for routine public
services. Newport's unique geography adds to the beauty of the City but it also
requires more employees per capita than other cities to provide the service delivery to
which Newport Beach residents have become accustomed.
Although the past economic surge has restored faith in the California economy, many
cities, including Newport Beach, are still working to rebuild losses in reserves and
catch -up on deferred capital maintenance. The City's fiscal posture is also being
affected by several one -time events, most of which actually occurred in prior years.
Monetary settlements arising from workers' compensation and general liability claims
and implementation of the Americans with Disabilities Act have represented cash drains
to the City of some significance.
The City's overall financial condition remains quite strong, and the aggressive response
to current conditions, as described above, should address the situation appropriately.
Newport Beach considers it essential to maintain a healthy long -run financial condition,
and the City is working hard to replenish its reserves. Policy changes that affect both
expenditures and revenue sources have been instituted, and the effectiveness of these
policies will be reviewed on a regular basis.
During this fiscal year, construction of the City's Groundwater Development Project was
completed. This project consists of new wells drilled at inland sites in another city, with
the water then being piped to Newport Beach. Distribution from the well sites was
started in December of 1997. The Groundwater wells enable the City to stabilize the
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cost of water that was formerly purchased from Municipal Water District. The total cost
of the project totaled $23.7 million over ten years of which $16.1 million was financed
■ by Revenue Bonds issued in 1994.
Another major project well underway during the year was the Newport Arches
interchange project. Also known as Newport Boulevard Improvements, this project
widened and replaced the former Newport Boulevard Bridge extending over Pacific
■ Coast Highway onto the Balboa Peninsula. Total estimated project costs of nearly $15
million will utilize several funding sources including Federal Intermodal Surface
Transportation Efficiency Act, State Gas Tax, Measure M, County Sanitation District
■ contributions, special assessment levy proceeds and other cooperative agreement
contributions. Nearly $9 million from all sources had been expended by the end of
fiscal year 1998. The new bridge will replace one that was originally constructed in
1934.
. The City's comprehensive Capital Projects program was particularly ambitious, with
total spending of $30,320,000 actually taking place during fiscal year 1998. In addition
to the Groundwater and Newport Arches Interchange projects, other major projects
. included MacArthur Boulevard widening, Birch Street Bridge Widening, Bay Island
Wastewater Pump Station and Buck Gulley Wastewater Pump Station. Also included
are a large number of smaller drainage, street, park facility, harbor and tidelands, and
other projects.
. As was the case last year, the number of major fiscal variables, which contain a
significant degree of volatility, is still high, but it is continuing to decrease. Although it is
uncertain at this time whether additional reductions or other corrective actions will be
required in the near future, it is clear that substantial growth in City services or functions
over the next few years is highly unlikely (notwithstanding annexations).
MAJOR INITIATIVES
■
For the Year. This fiscal year saw a continuation of a few key trends begun during the
■ prior year. Consolidation and implementation of extensive changes initiated during the
recent past was still the rule. The past few years have clearly represented a
transitionary period in the City's history. The previous five years were characterized by
a reduction of the workforce, streamlining of the City's basic organizational structure,
.increased automation, and an increasingly ambitious capital projects program. None of
these were short-term endeavors, and all were very much still in the forefront during this
fiscal year.
. As a cost saving measure, Newport Beach is working together with neighboring
communities for the shared use of Police helicopters, AirBorne Law Enforcement
(ABLE). The City also continued with installation of video cameras in police vehicles.
This has had a very favorable impact on several aspects of law enforcement, both from
a criminal prosecution standpoint and a civil liability standpoint.
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In a joint agreement with the City of Irvine and the Irvine Company, the area known has
Bonita Canyon (461 acres) was transferred to the City of Newport Beach. As planned,
the community will include 1,390 residential dwelling units, with 290 single family
detached homes, 1,100 multi - family apartments and a 55,000 square foot commercial
center. At build -out, the population of Bonita Canyon is expected to be 2,747. The net
recurring surplus to the City is expected to be $9,700 at that time.
For the Future. In addition to following through on the items mentioned above, the City
will continue to expand the application of the Geographic Information System, as well
as other related automation programs. Document imaging program is scheduled to
begin shortly after the beginning of the new fiscal year, and a comprehensive multi -year
Police Strategic Information Systems project will result in additional effectiveness of the
City's law enforcement resources.
The City is also participating in the conversion to the 800 MHz public safety radio
system throughout Orange County. This is a costly but critically important project that
will take place over several years.
Newport Beach places a high priority on its infrastructure, and the Capital Improvement
Project program is expected to continue at nearly its current ambitious pace. As a
result of the recent annexation, the City is moving forward with the development of the
Bonita Canyon /Banana Belt Park development. Other major projects include the
Balboa Island Bridge retrofit, San Joaquin Hills and Jamboree Roads rehabilitation, and
Buck Gully /Little Corona Beach Outlet Modification.
The potential annexation of Newport Coast will continue to be examined. These topics
are expected to be in the forefront during the coming fiscal year.
FINANCIAL CONTROLS AND PROCEDURES
Internal Control Structure. Management of the City is 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.
The City of Newport Beach initiated a comprehensive program to reduce vulnerability to
fraud, waste, or abuse through an improved internal control structure in recent years.
Purchasing, Accounts Payable, and Property Control Procedures are in place and
updated periodically. The Travel Policy and related procedures were recently rewritten
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and adopted, as was the City's Investment Policy. Warehousing, Stock Issuance, and
Property Disposal Procedures were also rewritten, and Standard Operating Procedures
for the Accounting and Purchasing Divisions were substantially revised and updated.
All controlled property was inventoried and tagged.
Single Audit. As a recipient of Federal financial assistance, the City is required to
undergo an annual audit in conformity with the provisions of the Single Audit Act of
1984 and the U.S. Office of Management and Budget Circular A -133, Audits of State,
Local Governments. and Non- profit Organizations. As part of the City's Single Audit,
tests are made to determine the adequacy of the internal control structure, including
. that portion related to federal financial assistance programs, as well as to determine
that the City has complied with applicable laws and regulations. The results of the
City's Single Audit for the fiscal year ended June 30, 1998, provided no instances of
material weaknesses in the internal control structure or significant violations of
applicable laws and regulations. The information related to the Single Audit, including
. the Schedule of Federal Financial Assistance, findings and recommendations, and
independent auditors' reports on the internal control structure and compliance with
■ applicable laws and regulations are included in a separate report.
Budgeting Controls and Changes. The City of Newport Beach maintains budget
. controls. The objective of these controls is to ensure compliance with legal provisions
embodied in the annual appropriated budget approved by the City Council. Budget
control is maintained at the fund level, or project level in the governmental fund types.
. The City maintains an encumbrance accounting system as one method of
accomplishing budgetary control. Where encumbrances indicate an overdraft of the
. departmental or project budget, purchase orders are not released until an appropriation
adjustment is made to ensure that adequate funding is available. The City's Budget
Policy was completely rewritten and implemented during fiscal year 1994 -95.
• The City has recently incorporated the use of Internal Service Funds to more effectively
manage functions across departmental lines. The Insurance Reserve Fund was
phased in during fiscal year 1991 -92 and was intended to assist the City in assessing
the full extent of its liability for claims and judgments exposure and compensated
absences. Internal contribution rates have been established in an effort to fund these
liabilities over the five year period. Disability and compensated absences have now
been added to programs managed through this fund. During the 1993 -94 fiscal year,
. the City began to administer, plan, and budget for the acquisition, maintenance, and
repair of major rolling stock (vehicles and equipment) through an Equipment Internal
. Service Fund.
■ FINANCIAL INFORMATION
The information in this section pertains to the City's general governmental operations.
General governmental function finances are administered through the General, Special
Revenue, Debt Service, and Capital Projects Funds.
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Total fund balance of the General Fund increased by $1.7 million during the year after
transferring over $1.6 million to the Insurance Reserve Fund. Substantially due to
added assistance to the Insurance Reserve fund, the General Fund fell short of
maintaining its Contingency reserve target by $1.7 million. The City will reconstitute the
General Fund reserves to their target level during the annual budget process.
GENERAL FUND
Ten Year Trend in Fund Balance
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1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Fiscal Year Ending June 30
Revenues. The following schedule (expressed in thousands) presents a summary of
General Fund, Special Revenue Fund, Debt Service Fund, and Capital Projects Fund
revenues for the fiscal year ended June 30, 1998, and the percentage of increases and
decreases in relation to revenues during the previous fiscal year, as well as the
percentage increases and decreases for the five year period beginning with fiscal year
1993 -94.
Fiscal Year 1997 -98 Governmental Revenues
X
Percentage
Cumulative
Percent
Change
Change
Amount
of
From FY
Since FY
Revenue Source
(000)
Total
1996 -97
1993 -94
Taxes
$49,385
49.26%
10.92%
24.05%
Licenses, Fees, & Permits
$7,303
7.28%
78.91%
274.71%
Intergovernmental
$19,657
19.61%
65.59%
118.58%
Charges for Services
$8,315
8.29%
15.73%
63.78%
Fines & Forfeitures
$2,574
2.57%
1.78%
-4.88%
Use of Money & Property
$11,423
11.40%
8.81%
31.89%
Miscellaneous
$1,593
1.59%
- 84.39%
- 25.56%
Total
1 2
1 %
10.29%
44.59%
X
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Substantial increases in property taxes, sales taxes and uniform transient occupancy
■ taxes ranging from 9% to 17% account for the 10.92% increase in taxes due to
favorable economic conditions. License, Fees and Permit Revenues increased more
dramatically due to several major development projects concurrently underway and a
. one -time, $2 million developer impact fee collected in conjunction with the One Ford
Road development. Increases in Intergovernmental revenues are non- recurring grant
revenues related to the $15 million Newport Arches Interchange project. The dramatic
decrease in Miscellaneous Revenues relates to last year's construction proceeds from
assessment district 95 -1 series B, a "no- commitment" debt issuance.
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The five year cumulative change figures in the last column cover the period essentially
from the bottom of the economic low point to the present time. A similar comparison
which covered a seven or eight year period, starting earlier, would actually show
significantly less dramatic increases in virtually every category. Longer term trend
information is available in the Statistical Section near the end of this Report.
Percentage Changes in Major Revenue Sources
ff 11
250.00°
200.00°
U 150.00°
0) 100.00°
m soM-,
m o.00^
0.
- 50.00^
- 100.00°1
/
/
O Change this fiscal year
■ Cumulative change since 1993 -94
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Long term composition of the City's overall revenue structure has changed as a result of
several factors. Primary among these is the State's reallocation of several tax revenues
from the City to other State programs. The graph below indicates that the impact of this
shift is still ongoing. Newport Beach has simply been forced to find other sources of
revenue to fund continuing services to its residents.
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Revenue Source
Long term composition of the City's overall revenue structure has changed as a result of
several factors. Primary among these is the State's reallocation of several tax revenues
from the City to other State programs. The graph below indicates that the impact of this
shift is still ongoing. Newport Beach has simply been forced to find other sources of
revenue to fund continuing services to its residents.
Ul
Five Year Trend in Makeup of Governmental Revenue
35.0%
30.0%
25.0%
O
! 20.0%
0
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15.0%
CL 1o.o0ro
5.0%
0.0% i I
1993.94 1994 -95
1995.96 1996.97 1997.98
Fiscal Year
—$--Property Taxes
—e —Sales Taxes
—*--Other Taxes
—0 Intergovernmental '(includes one -time grant in 1997.98)
—$—Use of Money & Property
—$--Charges for Services
—4--Licenses, Fees, & Permits
t fines & Forfeitures
—�— Other *(Includes single event CIOSA Project funding 1995 -97)
Expenditures. The following schedule (expressed in thousands) presents a summary
of general governmental expenditures for the fiscal year ended June 30, 1998, and the
dollar value of the increase or decrease during the past five years.
With regard to longer term changes in the pattern of City expenditures, the general
trend during this decade has been for Public Safety (Police, Fire, and Marine) spending
to increase in relation to all other City spending. During FY 1990 -91, for example,
Public Safety expenditures amounted to 34.32% of total City spending, compared to
41.45% during 1997 -98. Relative decreases in spending for General Government,
Public Works, and Culture and Recreation generally balanced the Public Safety
increase. The greatest proportional reduction during the ten year period was in General
Government.
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$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
1993 -94
Change in Government Expenditures
(Thousands of Dollars)
— — — —
— �PublicSafety
— Capital Expenditures
—+— Public Works
— — —Culture and Recreation '- --- _ — -
- General Government
7 Community Development — -- --- — -
-d"- Debt Service
Fiscal Year 1997 -98 Governmental Expenditures
Current
Percent
Change
Change
Amount
of
From FY
Since FY
.
Expenditures
(000)
Total
1996 -97
1993 -94
General Government
$6,790
7.14%
$1,117
$2,183
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Public Safety
$39,168
41.19%
$3,521
$6,838
Public Works
$16,579
17.44%
$1,077
$1,560
Community Development
$3,476
3.65%
$146
$69
Culture and Recreation
$6,917
7.28%
$332
$1,006
Capital Expenditures
$20,850
21.93%
$153
$7,244
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Debt Service
$1,299
1.37%
409
124
Total Expenditures
$95,079
1
1 24
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
1993 -94
Change in Government Expenditures
(Thousands of Dollars)
— — — —
— �PublicSafety
— Capital Expenditures
—+— Public Works
— — —Culture and Recreation '- --- _ — -
- General Government
7 Community Development — -- --- — -
-d"- Debt Service
1994 -95 1995 -96 1996 -97 1997 -98
(The above chart reflects actual dollars, with no adjustment for inflation.)
Enterprise Operations. The City had three enterprise operations at June 30, 1998:
Water, Wastewater, and Cannery Village Parking. An analysis of the City Enterprise
Fund operations indicates the following results for fiscal year 1997 -98:
• The Water enterprise activity reported a net income of $1,891,400 and retained
earnings of $30,764,900.
xiii
The Wastewater enterprise activity reported a net income of $406,793. The
Wastewater Fund finished up the year with retained earnings of $4,014,878.
The Cannery Village Parking enterprise operation reported net income of $81,560
for the fiscal year ended June 30, 1998.
Defined Benefit Pension Plan. The City contracts with the California Public
Employees' Retirement System (PERS) for certain retirement, disability, death and
survivor benefits for full -time employees. The annual actuarial valuation by PERS
changes from year -to -year, and the City's contribution rates are modified accordingly.
Defined Contribution Retirement Plan for Part -Time Employees. In addition to the
PERS retirement plan for full -time City employees, the City contracts with the Public
Agency Retirement System (PARS) to provide federally mandated retirement benefits
for part-time employees. Each part-time employee contributes 3.75 percent of salary,
with the City contributing a matching 3.75 percent to this retirement system. The City's
contributions for each employee (and interest earned by the accounts) are fully vested
immediately.
Deferred Compensation Plan. The City offers a Deferred Compensation Plan for full -
time employees. This plan is designed to supplement the employee's PERS
Retirement Plan. The City's Deferred Compensation Plan is authorized under Internal
Revenue Code Section 457(b), and it is subject to all the limitations and restrictions of
that code section. All full -time employees are eligible to participate in this plan on a
voluntary basis.
Cash Management. It is the City's policy to invest all temporarily idle short term funds
and longer term reserves in a manner that will maximize return without sacrificing
security or jeopardizing liquidity requirements. Idle funds are invested in accordance
with the Government Code and formal Investment Policy approved by the City Council.
The policy, which is reviewed and updated annually, allows investments in a variety of
specific instruments, as well as certain state, county, and private sector investment
pools and asset management services. Certificates of deposit, demand deposits,
bankers acceptances, U.S. Government and Agency Securities, commercial paper,
repurchase agreements, and the Local Agency Investment Fund are examples.
Due to the fact that the volume of funds available for investment has decreased over
the past few years, as well as the fact that interest rates have remained relatively low,
investment earnings are not now as significant a portion of City revenue as they have
been in the past. In addition, the portion of those earnings allocated to the General
Fund has decreased in relation to the earnings of other funds. This is due to the
smaller daily cash balance in the General Fund.. The City's plan to reconstitute
reserves will reverse this trend, but it is not likely to have a significant favorable impact
in the immediate future. It is the City's long- standing policy to account for all financial
institution charges, including primary checking account charges, as an abatement to
investment earnings revenue.
xiv
0
N
The City's current investment strategy is to normally place most of the funds with four
■ private sector investment management firms. Each of these intermediaries is guided by
and constrained to an investment program at least as restrictive as the policy governing
the City's direct investments. Regular reporting, both in writing and by personal
presentation, is required. Additionally, with regard to the private sector firms, all cash or
securities managed by them on the City's behalf are held by well - established and highly
■ reputable third party custodians. Smaller, more liquid portions of the portfolio are
invested directly by City staff or placed with the State Pool (LAIF).
. Debt Administration. At year -end, the City had a number of debt issues outstanding.
These issues, net of applicable unamortized discounts, included certificates of
participation of $6,780,000; notes payable of $2,703,949; and capital leases of
$1,532,070. Standard and Poor's Corporation assigned a "AA -" rating to the certificates
of participation.
• Risk Management. The City maintains a risk management program, which is a
combination of self- insured retention, excess insurance coverage, and written policies.
As part of this program, resources are now being set aside in the Insurance Reserve.
Fund (as opposed to the General Fund) to meet current and potential losses. On July
. 1, 1994, the City purchased excess general liability insurance coverage of $10 million,
with a self- insured retention (SIR) of $1 million per occurrence. On September 1, 1995,
the City purchased excess workers' compensation and employer's liability insurance
■ coverage of $300,000 per occurrence up to $1,000,000. This insurance provides
coverage for work - related accidents and diseases. On July 1, 1997, general liability
■ coverage was increased to $25 million per occurrence with a $750,000 SIR. Further
policy and administrative adjustments in the area of Risk Management are anticipated.
Although the Insurance Reserve Fund maintains a substantial accumulated deficit,
. management is confident that future operating income and transfers will be sufficient to
satisfy current and future claims against this fund's resources.
General Fund Balance. The fund balance of the General Fund increased by
$2,134,509 during the fiscal year ended June 30, 1998.
OTHER INFORMATION
• Independent Audit. The City Charter and State Statutes require an annual audit by
independent certified public accountants. Accordingly, this year's audit was completed
by KPMG Peat Marwick LLP. In addition to meeting the requirements set forth in the
City Charter, the audit also was designed to meet the requirements of the Federal
. Single Audit Act of 1984 and related OMB Circular A -133. The independent auditors'
report on the general purpose financial statements and combining and individual fund
statements and schedules is included in the Financial Section of this report, which
immediately follows the Introductory Section. The independent auditors' reports related
specifically to the Single Audit are provided under separate cover.
xv
0
0
Awards. Fiscal year 1990 -91 was the first time in the City's history that it prepared a
Comprehensive Annual Financial Report. It was therefore particularly gratifying that the
■
Report received both state and national awards for excellence in financial reporting.
The City has been fortunate to receive both awards each year since.
■
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, 1997. The Certificate of Achievement is a prestigious national
award recognizing conformance with the highest standards for preparation of state and
■
local government financial reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an
easily readable and efficiently organized comprehensive annual financial report, whose
contents conform to program standards. Such a program 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 report continues to conform to the Certificate of Achievement program
requirements, and we are submitting it to GFOA.
.
The California Society of Municipal Finance Officers (CSMFO) is a state organization
which sponsors extensive training and emphasizes high standards in all aspects of
.
municipal finance operations, including financial reporting. As a result of last year's
report, the City of Newport Beach is fortunate to have remained among the ranks of
California cities that have met the rigorous standards of financial reporting required of
recipients of the CSMFO Outstanding Financial Reporting Award. We will be submitting
the report to CSMFO for consideration again this year as well. ■
COVER AND DIVIDER PAGES 0
The film clip format, which appears on the cover of this report, was designed by the ■
City's Management Information Systems staff. In keeping with the City's custom, this is
the same design that was used on the cover of the three Budget Document publications
covering the same fiscal year as this report. Divider pages contain scenes of coastal ■
Newport Beach, Newport Harbor, and various settings within the City. These
photographs were obtained from several sources, but the Newport Beach Conference
and Visitor's Bureau was the source of many of the images, and their help and
cooperation were greatly appreciated.
ACKNOWLEDGMENTS •
Preparation of this report could not have been accomplished without the efficient and
dedicated services of a number of personnel. It would be difficult to name them all.
xvi
Virtually everyone in the Accounting Division and the Print Shop contributed to the
project. In addition, members of the Administrative Services Department would like to
thank 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, KPMG Peat Marwick LLP, for their time and
assistance in the preparation of the report. This report was completely prepared and
published by City employees.
Dennis C. Danner
Acting City Manager
xvii
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, 1997
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.
4
117
r
4-77'
�
AAA
a
� = s President
axua � 4 fJ
Executive Director
XVi 1
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California Society of
Municipal finance Officers
Certificate of Award
Outstanding Financial Reporting 1996 -97
Presented to the
City of Newport Beach
MY cerdfkde tr!rued In recognhlon of coed n9 profrrelonaldand=& and crherk In rgw&g
whh:h refted a hi gh levelofyualuy!n the aanuarfamcialsm ft
aad In the uaddlying aecaandngrydrmfmm which We repomw prepared.
February 23,1998
ce.h, end..d..aar.aaa suw maa.
Dedicated to Excellence in Municipal Financial Management
XiX
NEWPORT BEACH CITY OFFICIALS �
City Council
■
IK I .
Thomas C. Edwards
Mayor ■
' d ■
" 1
x
to � ■
Jan Debay Dennis D. O'Neil Norma Glover
Council Member Mayor Pro Tern Council Member ■
W�
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John W. Hedges John Noyes Tom W. Thomson
Council Member Council Member Council Member ■
Kevin J. Murphy
:...
City Manager .
LaVonne M Harkless Robert N Burnham
City Clerk City Attorney
0
Sharon Wood .......................
Assistant City Manager/Director of Community & Economic Development
PeggyDucey ...............................................................................
............................... Deputy City Manager
.
Dave Kiff ...............................................
............................... ......................Assistant to the City Manager
Dennis C. Danner ..........
. ........................ I................................ Administrative Services Director /Treasurer
.
BobMCDonell .......................................................................................
............................... Chief of Police
TimRiley... ..................................................................................................................
Fire & Marine Chief
David E. Niederhaus .....................................
............................... ........................General Services Director
.
LaDonna Kienitz ...................................
............................... Community Services Director /City Librarian
Patricia L. Temple... ..........
............................ ...... ..................................... .................... Planning Director
.
JayElbettar ........................................................................................
............................... Building Director
Don Webb ..........................................................
............................... Public Works Director /City Engineer
xx
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17
L _J
INDEPENDENT AUDITORS, REPORT
• The Honorable Members of City Council
City of Newport Beach, California:
■
We have audited the accompanying general purpose financial statements of the City of Newport Beach,
■ California (the City) as of and for the year ended June 30, 1998, as listed in the foregoing table of contents.
These general purpose financial statements are the responsibility of the City's management. Our
responsibility is to express an opinion on these general purpose financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards and the standards
applicable to financial audits contained in Government Auditing 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 general purpose financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the general purpose financial statements. An audit also includes assessing the accounting principles used
. and 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 opinion.
. In our opinion, the general purpose financial statements referred to above present fairly, in all material
respects, the financial position of the City of Newport Beach, California as of June 30, 1998, and the results
of its operations and the cash flows of its proprietary fund types for the year then ended in conformity with
. generally accepted accounting principles.
As discussed in note 1 to the financial statements, the City implemented Governmental Accounting
Standard No. 32, "Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred
. Compensation Plans." As such, the City is no longer reporting the deferred compensation assets and
liabilities in its general purpose financial statements.
. In accordance with Government Auditing Standards, we have also issued a report dated October 29, 1998 cn
our consideration of the City of Newport Beach's internal control over financial reporting and our tests of
its compliance with certain provisions of laws, regulations, contracts and grants.
. Our audit was conducted for the purpose of forming an opinion cn the general purpose financial statements
of the City taken as a whole. The accompanying combining, individual fund and individual account group
financial statements and schedules listed in the accompanying table of contents are presented for purposes
■ of additional analysis and are not a required part of the general purpose financial statements of the City of
Newport Beach, California. This additional information is the responsibility of the management of the
City. Such information has not been subjected to the auditing procedures applied in the audit of the general
purpose financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the
general purpose financial statements taken as a whole.
Member Firm of KPMG Itrtemewml
I
The statistical data listed in the foregoing table of contents is presented for purposes of additional analysis ■
and is not a required part of the general purpose financial statements of the City. Such additional
information has not been subjected to the auditing procedures applied in the audit of the general purpose
financial statements, and accordingly, we express no opinion on it. ■
YA 'L I'
Orange County, California
October 29,1998
2
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CITY OF NEWPORT BEACH
Combined Balance Sheet - All Fund Types and Account Groups
June30, 1998
Assets and Other Debits
Cash and investments (Note 2)
Accounts receivable and accrued revenues
Lease Receivable
Due from other governments
Due from other funds (Note 11)
Inventories of materials and supplies, at cost
Restricted assets - cash and investments (Note 2)
Other assets
Notes receivable
Fixed assets (Note 3)
Amount available in debt service fund
Amount to be provided for payment
of general long -term debt
Total Assets and Other Debits
Liabilities, Fund Equity and Other Credits
Liabilities:
Accounts payable and accrued liabilities
Accrued payroll
Due to other funds (Note 11)
Deferred revenue
Due to bondholders (Note 5)
Due to others
Deposits
Deferred compensation (Note 7)
Current portion of debt (Note 4)
Long -term debt (Note 4)
Total Liabilities
Fund Equity and Other Credits:
Investment in general fixed assets
Contributed capital (Note 13)
Retained earnings (accumulated deficit)
Fund balances:
Reserved (Note 14)
Unreserved, designated (Note 14)
Unreserved, undesignated
Total Fund Equity and Other Credits
Total Liabilities, Fund Equity
Governmental Fund Types
Debt Capital
Service Projects
$ 1,669,165
525
$ 579,814 6,OD9,565
$ 19,265,775 $ 24,871509 $ 579,814 $ 7,679,245
$ 1,386,437 $ 1,975,909 $ 462,117
1,133,348 15,322
3,925,744
705,443 1,189,887
3,279,493 209,950
6,504,721 7,316,812 462,117
3,028,366 1,963,243 $ 579,814 5,891,691
9,732,668 7,559,710 1,325,437
8,031,744
12,761,054 17,554,697 579,814 7,217,128
and Other Credits $ 19,265,775 $ 24,871,509 $ 579,814 $ 7,679,245
See Accompanying Notes to General Purpose Financial Statements.
4
Special
General
Revenue
$ 5,634,471
$ 15,964,838
1,947,948
377,517
740,000
2,221,157
7,789 154
4,417,378
136,633
1,120,619
3,587,569
200,000
Debt Capital
Service Projects
$ 1,669,165
525
$ 579,814 6,OD9,565
$ 19,265,775 $ 24,871509 $ 579,814 $ 7,679,245
$ 1,386,437 $ 1,975,909 $ 462,117
1,133,348 15,322
3,925,744
705,443 1,189,887
3,279,493 209,950
6,504,721 7,316,812 462,117
3,028,366 1,963,243 $ 579,814 5,891,691
9,732,668 7,559,710 1,325,437
8,031,744
12,761,054 17,554,697 579,814 7,217,128
and Other Credits $ 19,265,775 $ 24,871,509 $ 579,814 $ 7,679,245
See Accompanying Notes to General Purpose Financial Statements.
4
■
■
■
■
Proprietary
Fiduciary
Fund Types
Fund Type
Account Groups
General
General
Internal
Fixed
Long -Terre
Totals (Memorandum Only)
Enterprise
Service
Agency
Assets
Debt
$ 7,476,468
$ 662,245
$
8,221,676
$
39,628,863
$
74,578,675
3,435,974
8,024
5,769,988
5,707,075
740,000
614,000
10,010,311
5,004,146
4,417,378
2,252,527
30,597
167,230
402,875
1,733,718
1,712,869
11,156,575
13,744,126
3,587,569
101,171
200,000
200,000
56,190,894
6,043,563
$
82,226,914
144,461,371
136,085,319
$
579,814
579,814
579,851
10,436,206
10,436,206
11,026,880
$ 68,837,054
$ 6,744,429
$
9,934,545
$
82,226,914
$
11,016,020
$
231,155,305
$
250,496,645
$ 2,024,627
$ 272,741
$
6,121,831
$
7,188,528
59,773
42,652
1,251,095
1,231,927
424,892
66,742
4,417,378
2,252,527
1,895,330
3,012,778
$
7,365,256
7,365,256
7,543,703
2,569,289
2,569,289
2,447,252
111,944
3,601,387
1,812,013
30,353,588
1,307,195
4,754,475
6,061,670
5,527,563
13,645,000
13,257,544
$
11,016,020
37,918,564
38,776,120
17,573,431
18,394,154
9,934,545
11,016,020
71,201,800
100,145,999
$
82,226,914
82,226,914
80,621,522
15,803,897
4,097,648
19,901,545
18,303,735
35,459,726
(15,747,373)
19,712,353
17,362,165
11, 463,134
14,189, 885
18,617,815
12,364,849
8,031,744
7,508,490
51,263,623
(11,649,725)
82,226,914
159,953,505
150,350,646
$ 68,837,054
$ 6,744,429
$
9,934,545
$
82,226,914
$
11,016,020
$
231,155,305
$
250,496,645
5
See Accompanying Notes to General Purpose Financial Statements
M
CITY OF NEWPORT
BEACH
Combined Statement
of Revenues, Expenditures
.
and Changes in Fund Balances
All Governmental Fund Types
For the Year Ended June 30, 1998
.
Governmental Type Funds
Special
.
General
Revenue
Revenues:
Taxes
$ 49,385,380
Licenses, fees and permits
4,312,942 $
2.990,360
Intergovernmental revenue
4,842,580
14,814,162
Charges for services
8,276,460
38,370
Fines, forfeitures and penalties
2,181,621
391,954
Revenue from use of money and property
5,560,986
51502,141
Contributions
256,102
256,616
Other
154,447
3,159
Total Revenues
74,970,518
23,996,762
■
Expenditures:
Current:
General government
6,790.020
Public safety
38,913.777
254,534
Public works
15,641,467
937,808
Community development
3,021.533
454,465
.
Community services
5,955.757
961,242
Capital Outlay
4,533,596
14,763,264
Debt Service:
■
Principal (Note 4)
367,840
109,755
Interest and fiscal charges
101,636
126,617
Total Expenditures
75,325,626
17,607,685
.
Excess (Deficiency) of Revenues
'Over (Under) Expenditures
(355,108)
6,389,077
Other Financing Sources (Uses):
Operating transfers in
3,994,659
Operating transfers out
(1,993,136)
(3,744,659)
Proceeds from capital leases
46,884
Proceeds from sale of fixed assets
11,574
.
Total Other Financing Sources (Uses)
- 2,059,981
(3,744,659)
Excess (Deficiency) of Revenues and
Other Financing Sources Over (Under)
Expenditures and Other Financing Uses
1,704,873
2,644,418
Fund Balances, July 1
11,056,181
14,910,279
Fund Balances, June 30
$ 12,761,054 $
17,554,697
See Accompanying Notes to General Purpose Financial Statements
M
■
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■
■
■
■
Debt Capital
Service Projects
$ 29,899 $ 329,951
923,085
29,899 1,253,036
Totals (Memorandum Only)
$ 49,385,380
$ 44,523,935
7,303,302
4,081,509
19,656,742
11,871,417 -
8,314,830
7,185,210
2,573,575
2,529,015
11, 422, 977
10, 497, 715
1,435,803
9,924,180
157,606
284,061
100,250,215
90,897,042
7
6,790,020
5,673,321
39,168,311
35,647,247
16, 579,275
15, 502,095
3,475,998
3,329,545
6,916,999
6,585,335
1, 552, 821
20, 849,681
20,696,487
160,000
637,595
308,572
433,436
661,689
582,037
593,436
1,552,821
95,079,568
88,324,639
(563,537)
(299,785)
5,170,647
2,572,403
563,500
4,558,159
5,437,273
(5,737,795)
(6,113,228)
46,884
1,825,176
11,574
252,944
563,500
(1,121,178)
1,402,165
(37)
(299,785)
4,049,469
3,974,568
579,851
7,516,913
34,053,224
30,088,656
$ 579,814
$ 7,217,128 $
38,112,693
$ 34,063,224
7
CITY OF NEWPORT BEACH
Combined Statement of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual
All Governmental Fund Types
For the Year Ended June 30, 1998
See Accompanying Notes to General Purpose Financial Statements
0
General Fund
anance
Favorable
Budget
Actual
(Unfavorable)
Revenues:
Taxes
$ 45,746,600
$ 49,385,380
$ 3,638,780
Licenses, fees and permits
2,105,731
4,312,942
2,207,211
Intergovernmental revenue
4,770,756
4,842,580
71,824
Charges for services
7,295,872
8,276,460
980,588
Fines, forfeitures and penalties
2,652,000
2,181,621
(470,379)
Revenue from use of money and property
6,082,320
5,560,986
(521,334)
Contributions
415,312
256,102
(159,210)
Other
149,000
154,447
5,447
Total Revenues
69,217,591
74,970,518
5,752,927
Expenditures:
Current:
General government
6,425,701
6,790,020
(364,319)
Public safety
38,086,672
38,913,777
(827,105)
Public works
15,805,166
15,641,467
163,699
Community development
3,060,049
3,021,533
38,516
Community services
6,070,537
5,955,757
114,780
Capital Outlay
7,001,694
4,533,596
2,468,098
Debt Service:
Principal (Note 4)
713,638
367,840
345,798
Interest and fiscal charges
135,185
101,636
33,549
Total Expenditures
77,298,642
75,325,626
1,973,016
Excess (Deficiency) of Revenues
,
Over (Under) Expenditures
(8,081,051)
(355,108)
7,725,943
Other Financing Sources (Uses):
Operating transfers in
4,664,883
3,994,659
(670,224)
Operating transfers out
(1,993,136)
(1,993,136)
Proceeds from capital leases
46,884
46,884
Proceeds from sale of fixed assets
20,500
11,574
(8,926)
Total Other Financing Sources (Uses)
4,685,383
2,059,981
(2,625,402)
Excess (Deficiency) of Revenues
and Other Financing Sources
Over (Under) Expenditures
and Other Financing Uses
(3,395,668)
1,704,873
5,100,541
Fund Balances, July 1
11,056,181
11,056,181
Fund Balances, June 3D
$ 7,660,513
$ 12,761,054
$ 5,100,541
See Accompanying Notes to General Purpose Financial Statements
0
■
■
■
■
■
■
399,970
Special Revenue Funds
145,436
Debt Service Fund
937,808
(609,700)
Variance
Variance
(420,465)
1,123,626
Favorable
Favorable
Budget
Actual
(Unfavorable)
Budget Actual (Unfavorable)
$ 1,814,865
$ 2,990,360 $
1,175,495
126,617
13,603,108
14,814,162
1,211,054
11, 397, 780
25,000
38,370
13,370
-
230,000
391,954
161,954
(4,355,983)
5,292,500
5,502,141
209,641
$ 29,899 $ 29,899
205,000
256,616
51,616
1,500
3,159
1,659
21,171,973
23,996,762
2,824,789
29,899 29,899
399,970
254,534
145,436
328,108
937,808
(609,700)
34,000
454,465
(420,465)
1,123,626
961,242
162,384
26, 883, 389
14, 763, 264
12,120,125
109,755
109,755
126,617
126,617
29, 005, 465
17, 607, 685
11, 397, 780
(7,833,492)
6,389,077
14,222,569
(4,355,983)
(3,744,659)
- 611,324
(3,744,659)
(4,355,983)
611,324
$ 160,000 160,000
428,685
433,436
(4,751)
588,685
593,436
(4,751)
(588,685)
(563,537)
25,148
588,685
563,500
(25,185)
588,685 563,500 (25,185)
(12,169,475) 2,644,418 14,833,893 (37) (37)
14,860,308 14,910,279 49,971 579,851 579,851
$ 2,670,833 $ 17,554,697 $ 14,883,864 $ 579,851 $ 579,814 $ (37)
(Continued)
E
CITY OF NEWPORT BEACH
Combined Statement of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual
All Governmental Fund Types (Continued)
For the Year Ended June 30, 1998
Capital Projects Funds
Favorable
Budget Actual (Unfavorable)
Revenues:
Taxes
Licenses, fees and permits
Intergovernmental revenue
Charges for services
Fines, forfeitures and penalties
Revenue from use of money and property
$
329,951 $
329,951
Contributions
$ 3,000,000
923,085
(2,076,915)
Other
Total Revenues
3,000,000
1,253,036
(1,746,964)
Expenditures:
Current:
General government
Public safety
Public works
Community development
Community services
Capital Outlay
7,336,497
1,552.821
5,783,676
Debt Service:
Principal (Note 4)
Interest and fiscal charges
Total Expenditures
7,336,497
1,552,821
5,783,676
Excess (Deficiency) of Revenues
Over (Under) Expenditures
(4,336,497)
(299,785)
4,036,712
Other Financing Sources (Uses):
Operating transfers in
Operating transfers out
Proceeds from capital leases
Proceeds from sale of fixed assets
Total Other Financing Sources (Uses)
Excess (Deficiency) of Revenues
and Other Financing Sources
Over (Under) Expenditures
and Other Financing Uses
(4,336,497)
(299,785)
4,036,712
Fund Balances, July 1
7,516,913
7,516,913
Fund Balances, June 30
$ 3,180,416 $
7,217,128 $
4,036,712
See Accompanying Notes to General Purpose Financial Statements.
I
■
■
■
■
■
■
■
■
■
■
■
■
■
Totals (Memorandum
Only)
(4,355,983) (5,737,795)
(1,381,812)
Variance
46,884
20,500 11,574
Favorable
Budget
Actual
(Unfavorable)
$ 45,746,600
$ 49,385,380
$ 3,638,780
3,920,596
7,303,302
3,382,706
18, 373, 864
19, 656, 742
1,282,878
7,320,872
8,314,830
993,958
2,882,000
2,573,575
(308,425)
11,374,820
11,422,977
48,157
3,620,312
1,435,803
(2,184,509)
150,500
157,606
7,106
93,389,564
100,250,215
6,860,651
6,425,701
6,790,020
(364,319)
38,466,642
39,168,311
(681,669)
16,133,274
16,579,275
(446,001)
3,094,049
3,475,998
(381,949)
7,194,163
6,916,999
277,164
41,221,580
20,849,681
20,371,899
983,393
637,595
345,798
690,487
661,689
28,798
114,229,289 95,079,568 19,149,721
(20,839,725) 5,170,647 26,010,372
5,253,568 4,558,159
(695,409)
(4,355,983) (5,737,795)
(1,381,812)
46,884
46,884
20,500 11,574
(8,926)
918,085 (1,121,178) (2,039,263)
(19,921,640) 4,049,469 23,971,109
34,013,253 34,063,224 49,971
$ 14,091,613 $ 36,112,593 $ 24,021,080
11
See Accompanying Notes to General Purpose Financial Statements.
12
CITY OF NEWPORT BEACH
Combined Statement of Revenues, Expenses
and Changes in Retained
Earnings
All Proprietary Fund
Types
For the Year Ended June 30, 1998
Internal
Totals (Memorandum Only)
Enterprise
Service
1998
-7907
Operating Revenues:
i
Charges for services
$ 18,598,407
$ 7,812,546
$ 26,410,953
$ 27,549,327
Contributions
29,500
29,500
Licenses, Fees and Permits
1,919
1,919
Other
267,354
10,810
278,164
840,533
Total Operating Revenues
18,895,261
7,825,275
26,720,536
28,389,860
Operating Expenses:
Purchase of water
4,952,040
4,952,040
8,584,291
Salaries and wages
2,940,037
863,903
3,803,940
3,593,994
Depreciation
2,190,092
1,229,505
3,419,597
3,216,992
Professional services
1,738,214
57,082
1,795,296
2,068,459
Maintenance and supplies
994,124
481,546
1,475,670
1,229,839
Fleet parts and supplies
- 509,446
509,446
356,869
Systems maintenance
2,447,804
2,447,804
1,478,731
Workers' compensation
2,335,489
2,335,489
1,973,490
Claims and judgments
2,691,982
2,691,982
1,371,413
Disability
79,807
79,807
154,132
Compensated absences
886,672
886,672
1,793,631
Other
955,860
955,860
453,208
Total Operating Expenses
16,218,171
9,135,432
25,353,603
26,275,049
Operating Income (Loss)
2,677,090
(1,310,157)
1:366,933
2,114,811
Nonoperating Revenues (Expenses):
Intergovernmental revenue
384
384
144
Interest income
601,194
66,816
668,010
790,010
Other income
29,412
29,412
89,498
Gain on sale of fixed assets
47,794
47,794
103,681
Interest expense
(784,390)
(152,139)
(936,529)
(953,893)
Other
(5,452)
(5,452)
Total Nonoperating
Revenues(Expenses)
(159,236)
(37,145)
(196,381)
29,440
Income (Loss) Before
Operating Transfers
2,517,854
(1,347,302)
1,170,552
2,144,251
Operating transfers
Operating transfers in
1,605,969
1,605,989
925,955
Operating transfers out
(138,101)
(288,232)
(426,333)
(250,000)
Total Operating Transfers
(138,101)
1,317,737
1,179,636
675,955
Net Income (Loss)
2,379,753.
(29,565)
2,350,188
2,820,206
Retained Earnings
(Accumulated Deficit), July 1
33,079,973
(15,717,808)
17,362,165
14,541,959
Retained Earnings
(Accumulated Deficit), June 30
$ 35,459,726
$ (15,747,373)
$ 19,712,353
$ 17,362,165
See Accompanying Notes to General Purpose Financial Statements.
12
CITY OF NEWPORT BEACH
Combined Statement of Cash Flows
All Proprietary Fund Types
For the Year Ended June 30, 1998
Cash flows from operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided by operating activities:
Depreciation
Intergovernmental revenue
Other revenue
Changes in operating assets and liabilities:
(increase) decrease in accounts receivable
(Increase) decrease in accrued revenue
(Increase) decrease in inventories of materials and supplies, at cost
Increase (decrease) in accounts payable
Increase (decrease) in accrued payroll
Increase (decrease) in due to other funds
Increase (decrease) in deposits
Increase (decrease) in workers' compensation
Increase (decrease) in general liability
Increase (decrease) in compensated absences
Total adjustments
Net cash provided by operating activities
Cash flows from noncapital financing activities:
Operating transfers from other funds
Operating transfers to other funds
Net cash provided by (used for) noncapital financing activities
Cash flows from capital and related financing activities:
Acquisition of capital assets
Principal payments
Proceeds from sale of capital assets
Trustee Fees
Interest paid
Net cash used for capital and related financing activities
Cash flows from investing activities:
Interest on investments
Net cash provided by investing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents, July 1
Cash and cash equivalents, June 30
Noncash Activities:
Contributed capital (note 13)
Acquisition of equipment by capital leases
See Accompanying Notes to General Purpose Financial Statements.
14
Internal
Enterprise Service
$ 2,67-;090 $ (1,310,157)
2,190,092 1,229,505
384
29,412
77,892
(1,426,739)
(875,000)
(8,024)
51,075
128,561
(975,997)
(406,240)
(807,906)
19,169
(85,859)
(619,546)
23,770
128,854
1,437, 045
(472,390)
1,310,385
1,437,318
3,987,475
127,161
1,605, 969
(138,101) (288,232)
(138,101) 1,317,737
(6,606,456)
(1,426,739)
(875,000)
(594,946)
(3,844,246)
155,757
(5,452)
1,168,598
(807,906)
(152,139)
(8,294,814)
(2,018,067)
601,194
- 66,816
601,194
66,816
(3,844,246)
(506,353)
13,054,432
1,168,598
$ 9,210,186 $
662,245
$ 1,597,810 $ -
$ - $ 667,215
■
■
■
■
■
■
■
■
■
■
■
Totals (Memorandum Only)
$ 1,366,933 $ 2,114,811
3,419,597
3,216,992
384
144
29,412
89,498
77,892
(208,917)
(8,024)
8,370
179,636
(19,775)
(1,382,237)
(150,592)
19,169
(84,749)
(705,405)
(659,087)
23,770
3,296
128,854
23,546
1,437,045
151,095
(472,390)
208,119
2,747,703
2,577,940
4,114,636
4,692,751
1,605,969
(426,333)
925,955
(250,000)
1,179,636
675,955
(8,033,195)
(1,469,946)
155,757
(5,452)
(960,045)
(9,327,692)
(1,381,852)
155,315
(976,602)
(10,312,881)
(11,530,831)
668,010
790,010
668,010
790,010
(4,350,599)
14,223,030
(5,372,115)
19,595,145
$ 9,872,431 $
14,223,030
$ 1,597,810 $
-
$ 667,215 $
933,436
15
7,ki\
■ Flnanclal �
�� Statement �
1 1
1 1
1 1
�$ r
1 4• 1
CITY OF NEWPORT BEACH
■ Notes to General Purpose Financial Statements
June 30, 1998
(1) Summary of Significant Accounting Policies
The financial statements of the City of Newport Beach (the "City ") have been prepared in
conformity with Generally Accepted Accounting Principles ( "GAAP ") as applied to
. government units. The Governmental Accounting Standards Board ( "GASB ") is the
accepted standard - setting body for establishing governmental accounting and financial
reporting principles. The more significant of the City's accounting policies are described
■ below.
Description of Reporting Entity
• 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 belo' sr
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 adoptits;
budget, levy taxes or set rates or charges, or issue bonded debt without approval by the
primary government. In a blended presentation, a component units' 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 fund, capital projects funds and general long -term debt account group.
■ Separate financial statements are not prepared for the Corporation.
■
■ 17
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements ■
June 30, 1998
Basis of Presentation - Description of Funds and Accounting System ■
The City uses funds and account groups to report its financial position and results of .
operations. Governmental accounting systems are organized and operated on a fund
basis. Fund accounting is d, esigned to.demonstrate,legal compliance and aid financial
management by segregating transactions related to certain City functions or activities. A
fund is defined as an independent fiscal and accounting entity with a self - balancing set of
accounts recording cash and other financial resources, together with all related liabilities .
and residual equities or balances, and changes therein, which are segregated for the
purposes of carrying out specific activities or attaining certain objectives in accordance
with special regulations, restrictions or limitations. _ ■
The combined financial statements in this report are grouped into three broad.: fund
categories containing seven generic fund types and into two account groups.as follows: .
Governmental Fund Types
■
General Fund - The General Fund is the general operating fund of the City. The
General Fund is used to account for all financial resources, except those required to
be accounted for in another fund.
■
Special Revenue Funds - The Special Revenue Funds are used to account for the
specific
■
proceeds.. of revenue sources or to finance specified activities as required by .:
taw or administrative regulation.
Debt Service. Fund =The Debt Service Fund: is used to account for the accumulation
oV resources required for the :payment of general long -term .debt principal and
interest.,.
Capital Project Funds -The, Capital Project Funds are used to account for financial
resources used for the acquisition or construction of major capital facilities other
than those financed by proprietary funds.
Proprietary Fund Tvpes
■
Enterprise Funds - The Enterprise Funds are used to account for operations that
provide,services to the general public, which are financed primarily by user charges
or where.the periodic measurement of net income is deemed, appropriate.
Internal Service Funds._- The Internal Service Funds are used to account for the
claims and judgments,: 'Compensated absences and equipment maintenance cost of
service provided by one department of the City to other departments on a cost-
reimbursement basis.
.
M
18 ■
■ Basis of Accounting.
The modified accrual basis of accounting is followed for the governmental and fiduciary
fund types (General, Special Revenue, Debt Service, Capital Projects and Agency Funds).
Under the modified accrual basis of accounting, revenues are recognized when they
become susceptible to accrual, that is, measurable and available to finance expenditures
■ of the current period or soon thereafter to be used to pay liabilities of the current period.
The City considers property taxes as available if they are remitted within 60 days after
Its]
CITY OF NEWPORT BEACH
.
Notes to General Purpose Financial Statements
June 30, 1998
■
Fiduciary Fund Type
.
Agency Funds - The Agency Funds are used to account for assets held by the City
as an agent for individuals, private organizations or other governmental units and/or
.
other funds.
Account Groups
General Fixed Assets Account Group - The General Fixed Asset Account Group is
used to account for the cost of capital assets owned by the City, other than those of
■
the proprietary funds.
General Long -Term Debt Account Group - The General Long -Term Debt Account
.
Group is used to account for long -term debt of the City, except for indebtedness
related to the proprietary fund types.
■
Measurement Focus
The accounting and financial reporting treatment applied to a fund is determined by'ts .
■
measurement focus. All governmental funds are accounted for using a current financial:..
resources measurement focus. With this measurement focus, only expendable financial
■
resources and current liabilities generally are included on the balance sheet..Operating'
statements of these funds present increases (i.e., revenues and other financing sources)..
and decreases (i.e., expenditures and other financing uses) in net financial resources..:
.
Recognition of governmental fund type revenues represented by non - current receivables.:.:
are deferred until they become current.
■
All proprietary funds are accounted for on a flow of economic resources measurement
focus. With this measurement focus, all assets and all liabilities, associated with the'
operation of these funds are included on the balance sheet. Fund equity (i.e., net
.
economic resources) is segregated into contributed capital and retained earnings
components. Proprietary fund -type operating statements present increases;` (e.g.,
revenues) and decreases (e.g., expenses) in net economic resources.
•
Fiduciary fund types are accounted for according to the nature of the fund. The City has
only Agency type funds, which are purely custodial in nature (assets equal liabilities) and,
.
thus, do not involve measurement of results of operations.
■ Basis of Accounting.
The modified accrual basis of accounting is followed for the governmental and fiduciary
fund types (General, Special Revenue, Debt Service, Capital Projects and Agency Funds).
Under the modified accrual basis of accounting, revenues are recognized when they
become susceptible to accrual, that is, measurable and available to finance expenditures
■ of the current period or soon thereafter to be used to pay liabilities of the current period.
The City considers property taxes as available if they are remitted within 60 days after
Its]
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
year -end. Sales taxes collected and held by the State are considered susceptible to
accrual.
Other revenues considered susceptible to accrual include interest income and charges for
services. Licenses and permits, .fines forfeitures and penalties excluding amounts
received from other, governmental agencies, and other taxes are not susceptible to
accrual because they are not measurable until received in cash. Grant funds earned but
not received are recorded as receivables, and grants received before the related revenue
recognition criteria have been met are reported as deferred revenues: Expenditures are
recorded when the related fund liability is incurred, except that principal and interest on
general long -term debt are recognized when due.
The accrual method of accounting is followed by the City's proprietary fund types
(Enterprise and Internal. Service Funds): Proprietary fund types are accounted for on an
"income determination" or "cost of service" measurement focus. Accordingly, all assets
and liabilities are included in their respective balance'sheets, and the reported fund equity
(total reported.assets, less total reported liabilities) provides an indication of the economic
net worth of the fund. Operating statements for proprietary fund types (on an income
determination measurement focus). . report increases (revenues) and decreases
(expenses) in determining total economic net worth. Under this determination, unbilled
service receivables are recorded at year -end. Governmental entities have the option to
apply applicable standards of the Financial Accounting Standards Board ( "FASB ") issued
on or after November.30, 1989, for proprietary fund types. The City has elected to apply
all FASB statements and interpretations issued on or after November 30, 1989, except
those that conflict with or con.tradict..GA$B% pronouncements.
Budgetary Control and Accountin
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 all governmental funds.
The budget is formally integrated into the accounting system and employed as a
management control device during the year.
The City Manager is authorized to transfer budget amounts between accounts
within a fund. Transfers of appropriations between funds or transfers other than
those authorized above may be made only by the authority of the City Council.
20
0
CITY OF NEWPORT BEACH
■ Notes to General Purpose Financial Statements
June 30, 1998
The legal level of budgetary control is the fund level. Total fund expenditures
■ may not exceed total fund budgeted amounts without approval from the City
Council.
.
• Budgeted expenditure amounts used in the combined financial statements are
the final adjusted amounts. Revisions made to the original expenditures budget
for each fund type were as follows:
Original Adjusted
Budget Revisions Budget
■
General Fund $72,320,225 $4,978,417 $77,298,642
Special Revenue Funds 19,515,142 9,490,323 29,005,465
Debt Service Fund 588,685 - 588;685
■
Capital Project Funds 100,000 7,236,497 7,336;497
• 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 fort.
■
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 as revisions to
the original adopted budget.
■
New Accounting Standards
■ In fiscal year 1998, the City adopted GASB Statement No. 27, Accounting for Pensions by
State and Local Government Employers, which establishes standards for the
measurement, recognition, and display of pension expenditures and related liabilities,
assets and note disclosures. While the adoption of this accounting standard did not have
an impact on the operating results or financial position of the City, the City's notes to the
financial statements have been modified to reflect changes required by the guidance of
Statement No. 27.
In October 1997, the GASB issued Statement No. 32, Accounting and Financial Reporting
for Internal Revenue Code Section 457 Deferred Compensation Plans. This Statement
establishes accounting and financial reporting standards for Internal Revenue Code (IRC)
■ section 457 deferred compensation plans of state and local governments. This Statement
is effective for financial statements for periods beginning after December 31, 1998, unless
an entity complies with the requirements of subsection (g) of the Internal Revenue Code
21
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
457 in an earlier period, in which case application of this Statement is required for the
financial reporting period in which compliance occurs. Pursuant to IRC 457 subsection (g),
all amounts of compensation deferred under the plan, all property, or rights are solely the
property and rights of the employee and beneficiaries of the Plan. Deferred compensation
funds are not subject to the claims of the district's general creditors. The City has
established an eligible deferred. compensation plan in accordance with subsection (g) of
the IRC Section 457, and accordingly has adopted this Statement for the 1998 fiscal year.
Under the provisions of this Statement, it is no longer considered appropriate to report the
Section 457 plan in the City's financial statements.
Cash and Cash Equivalents
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 cash and investments and restricted cash and
investments in the.propnetary funds.
Investments
Effective July 1, 1997, the City implemented GASB Statement No, 31, Accounting ano
Financial Reporting for Certain Investments and External Investment Pools. This
statement establishes accounting and. financial reporting standards for all investments
held by governmental .external investment pools and establishes fair value standards for
other governmental entities. This statement requires retroactive restatement, which would
result. in an adjustment to the City's beginning fund balance to reflect the difference in
carrying. value. and market value: ;on :investments held at June 30, 1997. The effect of
applying this statement to the City June 30,.1997; was immaterial and as such the fiscal
yearend June'30, 1998; :beginning fund. balance was not restated. The provisions of this
statement were applied in the current fiscal year and amounts related to the net change in
fair market value; of. investments held at June 30, 1998, are included in revenue.
Other investments which include money market securities-(such as short-term, highly
liquid debt instruments including commercial paper, bankers' acceptances, U.S. Treasury
and agency obligations) that have a remaining maturity at the time of purchase of one
year or, less, are carried at amortized cost.
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'$854789 at June `30, 1998. 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.
The City's investment in Los Angeles County Pooled Fund is $78,678 at June 30, 1998.
This investment value is based on information provided by Los Angeles County
22
0
CITY OF NEWPORT BEACH
. Notes to General Purpose Financial Statements
June 30, 1998
■ 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.
Lease Receivable
Lease receivable represents lease payments due on property donated to the City during
fiscal year 1993. The lease term on this property runs through fiscal year 2007. As the
■ revenue recognition criteria have not been met, a corresponding deferred revenue has
been recorded.
■ Other Assets
Included in other assets is a $3,279,757 lump -sum payment to the California Public
iEmployees' Retirement System. This payment represents the pre - payment of the City's
employer contributions for both Safety and Miscellaneous employees for fiscal year 1998-
99.
■ Notes Receivable
. Included in notes receivable is a $200,000 loan to the City Manager to purchase a home
in the City. The employment contract with the City Manager requires the Manager to
reside in the City and provides City assistance in acquiring a residence. The loan to the
Manager is an equity sharing loan and is due within one year after termination of the
employment contract.
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.
• General Fixed Assets
■ The general fixed assets of the City are accounted for in a separate self - balancing
account group described as the "General Fixed Assets Account Group." These general
. fixed assets are capitalized at historical cost or estimated historical cost if actual historical
cost is not available. Donated fixed assets are valued at their estimated fair market value
on the date donated. Fixed assets acquired through lease obligations are valued at the
present value of future lease payments at the date acquired. Assets in the general fixed
asset account group are not depreciated.
■ The City has elected not to capitalize the cost of building or acquiring infrastructure fixed
assets (e.g., streets, bridges, curbs and gutters, storm drains, sidewalks, and light
systems). Consequently, these items are not reflected in the City's combined financial
statements.
r
23
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
Proprietary Funds Fixed Assets
Fixed assets of the City's Proprietary Funds are recorded at historical cost or estimated
historical cost, if actual historical cost is not available. Contributed fixed assets are valued
at their estimated fair market value on the date of contribution and recorded as
contributed capital. For debt financed fixed assets, interest incurred during the
construction phase is reflected in the capitalized value of the asset constructed, net of
interest earned on the invested proceeds over the same period.
Depreciation is charged over the estimated useful lives using the straight -line method. The
City charges depreciation of contributed assets to retained earnings. The estimated useful
lives are as follows:
Assets Years
Structures 50 to 75
Equipment 4 to 15
Claims and Judaments
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 supp.lemented:by specific information about
current.matters. Small dollar claims and judgments are recorded as expenditures when
paid.
Capital Leases
The City accounts for lease- purchase agreements as capital leases when title transfers to
the City at the end of the lease term or the lease contains a bargain purchase option.
Therefore, the capital leases are recorded at the present value of the future minimum
lease payments as of the date of their inception. Capital leases used for financing general
fixed assets are recorded both as capital outlay and other financing sources. Capital lease
payments are - accounted for in a manner consistent with general debt obligations.
Property Taxes
The assessment, levy, and collection of, property takes 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:
24
CITY OF NEWPORT BEACH
. Notes to General Purpose Financial Statements
June 30, 1998
0
Total columns on the combined statements are captioned "Memorandum Only" to indicate
■ that they are presented only to facilitate financial analysis. Data in these columns do not
present financial position, results of operations, or cash flows in conformity with generally
accepted accounting principles. Neither is such data comparable to a consolidation.
Interfund eliminations have not been made in the aggregation of this data:
. Comparative Data
Comparative total data for the prior year has been presented in selected sections of the
. accompanying financial statements in order to provide an understanding of the changes in
the City's financial position and operations.
N
0
W,
Lien date March 1
Levy date July 1
■
Due dates November 1 - 1st installment
March 1 - 2nd installment
■
Collection dates December 10 - 1 st installment
April 10 - 2nd installment
■
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 year's 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 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. Benefitsthat,hav&
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.
Deferred Revenue
■
Deferred revenues are those- where asset recognition - has been met, but the revenue'
recognition criteria has not been met.
.
Memorandum Only - Total Columns
Total columns on the combined statements are captioned "Memorandum Only" to indicate
■ that they are presented only to facilitate financial analysis. Data in these columns do not
present financial position, results of operations, or cash flows in conformity with generally
accepted accounting principles. Neither is such data comparable to a consolidation.
Interfund eliminations have not been made in the aggregation of this data:
. Comparative Data
Comparative total data for the prior year has been presented in selected sections of the
. accompanying financial statements in order to provide an understanding of the changes in
the City's financial position and operations.
N
0
W,
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
(2) Cash and Investments
The City has elected to pool all cash and investments of all funds, except for funds
required to be held by outside fiscal agents under the provisions of certificates of
participation.
Cash and investments at June 30, 1998, consisted of the following:
Unrestricted cash and investments:
Pooled cash deposits
Pooled investments
Total unrestricted cash and investments
Restricted cash and investments:
Cash and investments. with fiscal agents
Total cash and investments
($4,558,039)
44,186, 902
39,628',863'
11,156,575
$50,785,438
Authorized Deposits /Investments
Under the provisions of the City's. investment policy, and in accordance with
53601 of the' California Government. Code, the City may deposit and invest
Section
in the
following:
Certificates of: Deposit (oriTime "Deposits).
• Negotiable Certificates of.:Deposit ..
t: Bankers Acceptances
• U.S. Treasury Issues
• Federal.Agencies Securities
• Commercial paper
• Repurchase Agreements and Reverse Repurchase Agreements
`+ Passbook Savings-Accounts
+ Local Agency Investment Fund (State of California Investment Pool)
• County Investment Pools (Los Angeles and Orange)
"- Medium Term Notes
+ Asset- backed securities
• AsseUinvestment Management Agreements
Deposits
Deposits consist of cash and demand deposits accounts. Deposits in banks are
maintained in financial institutions that provide Federal Depository Insurance Corporation
protection on the bank balances. The California Government Code requires California
banks and savings and loan associations to secure a city's deposits by pledging
government securities as collateral. The market value of pledged securities must equal at
26
0
27
CITY OF NEWPORT BEACH
■
Notes to General Purpose Financial Statements
June 30, 1998
least 110% of a city's deposits. California law also allows financial institutions to secure
city deposits by pledging first trust deed mortgage notes having a value of 150% of a city's
total deposits. The City may waive collateral requirements for deposits that are fully
insured up to $100,000 by federal depository insurance.
The City's deposits at year -end are categorized below to give an indication of the level of
credit risk assumed by the City in three categories as follows:
Category 1 Insured or collateralized with securities held by the City or its agent
in the City's name.
■
Category 2 Collateralized with securities held by the pledging :financial
institution's trust department or agent in the City's name.
•
Category 3 Uncollateralized.
■
As of June 30, 1998, the City's deposit balances were as follows:
■
Category Bank Carrying'`',
1 2 3. Balance Amount,:
■
Petty Cash $7,782; ".
Deposits:
Demand deposits $268,304 $1,772,520 $2,040,824 (4,565,821) ..
■
Total deposits $268.304 $1 772 52Q $ $2�4Q $24 ($4.558.0391:;
Investments
The investments that are represented by specific identifiable investment securities :are
.
classified as to credit risk by three categories as follows:
Category 1 Insured, registered, or securities held by the City or its agent in the
■
City's name.
Category 2 Uninsured and unregistered, with securities held by the
.
counterparty's trust department or agent in the City s n, ame.
Category 3 Uninsured and unregistered, with securities held by the counterparty
■
or by its trust department or agent but not in the City's name.
27
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
The City's investments at June 30, 1998, are summarized below for the credit risk and
carrying amounts:
VI:7
Category
Carrying
1
2 3
Amount
Pooled Investments ,
U.S. Treasury Notes.
$3,548,612
$5,964,243
$9,512,855
Federal Home. Loan Bank
2,495,046
2,495,046
Federal Home Loan
Mortgage Corporation
501,950
2,298,218
2,800,168
Federal Farm Credit Bank
995,310
995,310
Federal National Mortgage
Association
6,402,857
3,528,975
9;931,832
Other Government
Securities
1,25Z,897
1,252,897
Money market funds'.
5,003,666
Medium term notes
3,268;069
.7,532,605
10,800,674
Commercial paper. .:
460;987
460,987
State of California:
Local Agency .
Investment Fund'
854,789
Los Angeles County
Pooled Fund'
78,678
Total pooled investments.
$16,430,682
$21,819,087
$44,186,902
Investments with fiscal agents: .:
Mutualfunds':
$11,156,576
' Not subject to categorization.
VI:7
CITY OF NEWPORT BEACH
■ Notes to General Purpose Financial Statements
June 30, 1998
■ (3) Fixed Assets
. A summary of the changes in General Fixed Assets is as follows:
r
■
M
Balance
July 1, 1997
Additions
Deletions
Balance
June 30, 1998
■
Land
$27,698,922
$27,698,922
Structures
41,683,507
$624,320
42,307,827
Equipment
11,239,093
981,072
12,220,165
■
$80,621,522
$1,605,392
—
$82,226,914
■
A summary of the changes
in the Proprietary Fund Type fixed
assets is as follows:
Balance
Balance
July 1, 1997
Additions
Deletions
June 30, 1998
■
Enterprise Funds:
■
Land
$3,055,613
$3,055,613
Structures
93,039,830
$8,204,266
($547,700)
100,696,396.
Equipment
671,171
671,171:
■
$96,766,614
$8,204,266
($547,700)
$104,423,180
Less accumulated
■
depreciation
(46,589,894)
(2,190,092)
547,700
(48,232,286)
Net
$50,176,720
S6,014,174
—
$56,190,894
■
Internal Service Funds:
Equipment
$9,482,502
$2,093,954
($422,120)
$11,154,336
■
Less accumulated
depreciation
(4,195,425)
(1,229,505)
314,157
(5,110,773)
.
Net
$5,287,077
$864,449
($107,963),
$6,043,563
r
■
M
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
(4) Long -Term Debt
General Long -Term Debt Account Group
A summary of the changes in the.General Long -Term Debt Account Group is as follows:
Balance
July 1, -1997 Additions
Certificates of
participation
$6,940,000
Note payable
2,813,704
Capital leases
1,853,027
Total
$11,606,731.
• Certificates of Participation:
Balance
Retirements June 30, 1998
$160,000'
109,755
$46,884 - 367,840
$46,884 $637,595
$6,780,000
2,708,949
1,532,071
$11,016,020
On. June 1:; :1992, the Newport Beach Public Facilities Corporation issued $7,500,000
of Certificates:of`P.articipation to finance the construction of the new Central Library. In
turn, the.Gity entered into a.project'1ease with the Newport Beach Public Facilities
Corporation to lease certain property, facilities, improvements, and equipment.
The lease payments to -be made by „the City will be held by a trustee who will make
semi annual - payments on'ttie- certificates of participation. The lease payments began
May. 15,11,994, and are in amounts sufficient to cover the payment of principal and
interest of`. the certificates. Future 'principal, payments range from $165,000 to
$560,000 from June 1, 1999- through June 1, 2019, at an interest rate from 6.0% to
6.2 %. At June'30, 1998, the City has a required cash reserve balance for debt service
Of $579,814, which is recorded as a restricted asset and reservation of fund balance in
the Debt Service Fund. The certificates outstanding at June 30, 1998, amounted to
$6,780,000.
• 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 $236,372 at 4.5% rate of interest
beginning August 1, 1987.7he outstanding balance,at June 30, 1998, amounted to
$2,703,949.
30
CITY OF NEWPORT BEACH
. Notes to General Purpose Financial Statements
June 30, 1998
31
• Capital Leases
Office Equipment Leases: In the current and prior fiscal years, the City has entered
into several lease- purchase agreements as lessee for financing the acquisition of a
.
geographic information system and upgrades of equipment and software to the
financial management and data processing systems. The terms of the leases range
from three to five years and are payable monthly. The interest rates on these
.
obligations range from 5% to 9 %. These lease agreements qualify as capital leases
for accounting purposes as the title transfers at the end of the lease term or the lease
contains a bargain purchase option. All assets acquired with capital .leases total
.
$46,884 and are included in the General Fixed Asset Account Group.
Computer Aided Dispatch: The City entered into a lease agreement on November 26,
.
1996, in the amount of $1,759,561. At June 30, 1998, the lease proceeds are held in
escrow as restricted cash totaling $1,120,619 and will be used for each phase of the
police information equipment installation. The equipment is pledged as collateral: The
.
lease is payable in five annual installments of $411,144 ending in July 2001. The lease
bears interest at the rate of 5.33 %.
.
Annual Amortization Requirements of Long -Term Debt
.
The annual requirements to amortize outstanding debt included in the General Long -Term. 'r
Debt
Account Group as of June 30, 1998, are as follows:
Year Ending Certificates of Note Capital
June 30 Participation Payable Leases Total"
1999 $584,085 $236,372 $455,502 $1,275,959
2000 584,185 236,372 446,015 1,266,572`.,
.
2001 583,685 236,372 427,540 1,247,597 ,
2002 587,400 236,372 413,877 1,237,649:
2003 585,200 236,372 — 821;572
.
Thereafter 9,396,980 2,704,935 — 12,101;915
.
$12,321,535 $3,886,795 $1,742,934 $17,951,264
Less: amount repre-
senting interest (5,541,535) (1,182,846) (210,863) (6,935,244)
$6,780,000 $2,703,949 $1,532,071 $11,016,020
31
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
Proprietary Funds Long -Term Debt
Enterprise Fund
A summary of changes in long -term debt of the enterprise funds is as follows:
Balance Balance
July 1, 1997 Additions Retirements June 30, 1998
Water Revenue Bonds $15,435,000 $ S875 000 $14,560,000
Less current portion (875,000) (91-5,000)
Total long -term $x560,000 $13.645 000
The current portion in the accompanying General Purpose Financial Statements includes
principal of $915,000 and accrued interest payable of $392,195 for a total of.$1,307,195.
• Water Revenue Bonds
In 1995, Ahe.: City.. issued $17,100,000 of water revenue bonds to finance the
construction and acquisition of water storage and transmission facilities. The bonds
are secured by a. pledge of net revenues of the water fund. The bonds bear interest
ranging from 5.375% to 5.4 %. At June 30, 1998, the City'has a required cash reserve
balance of $1,733,735 which is.recorded'as a restricted asset. Fifteen annual principal
payments are payable. on August 1; and semiannual interest payments are payable on
February i,. and August 1 >At June 30.; 1998, the outstanding principal balance was
$14;560,000, and accrued interest payable.was.$302,195...
Water revenue bond "debt service requirements to maturity, including $5,183,648 of
interest are as follows:
Year Ending
June 30 - . Amount
1999 $1,674,799
2000 1,664,543
2001 1,657,003
2002 1,651,909
2003 1,644,1:28
Thereafter $11,451,266
Total $174 64$
32
CITY OF NEWPORT BEACH
■ Notes to General Purpose Financial Statements
June 30, 1998
Internal Service Funds
■ A summary of changes in long -term debt of the internal service funds is as follows:
.
Balance
Deductions/
Retirements
Balance
July 1, 1997
Additions
June 30, 1998
.
Claims and judgments
payable
$8,186,374
$5,027,741
$3,461,842
$9,752,273
Compensated absences
7,442,767
648,962
1,121,352
6,970,377
■
Capital leases
1,217,100
667,215
594,946
1,289,369
16,846,241
18,012,019
Less current portion
(4,236,852)
(4;754,475)
Total long -term
$12,609,389
$13,257,544
. Claims and Judgments
The City retains the risk of loss for general liability and workers' compensation claims
■ as described in note (6). 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, 1998, 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, 1998, amounted to $9,752,273.
• 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,
1998, is $6,970,377.
• Capital Leases
. Rolling Stock Leases - Equipment Maintenance Internal Service Fund: In the current
and prior fiscal years, the City entered into several. lease- purchase agreements,
payable annually, as lessee for financing the acquisition of a heavy duty street
. maintenance vehicles and fire trucks. The term of each lease is five years and each is
payable annually. The interest rate for each lease is between 4.98% and 6.98 %. The
lease agreements qualify as capital leases for accounting purposes as the title
. transfers at the end of the lease term or the lease contains a bargain purchase option.
0
33
34
CITY OF NEWPORT BEACH
Notes to General Purpose
Financial Statements
.
June 30, 1998
■
The assets acquired during the current
year, totaling $667,215,
were classified as
equipment in the Equipment Maintenance
Internal Service Fund.
.
Annual Amortization Requirements of Internal
Service Fund Capital
Lease Obligations
The annual requirements to amortize
outstanding capitalized
lease obligations
included in the internal Service Fund as of
June 30, 1998, are as follows:
Year Ending
Capital
June 30
Leases
■
1999.
$525,829
2000
425,208
2001
340,637
2002:.
147,941
2003-
—
1,439,615
.
Less: amount representing interest
(150,246) .
$�j: 289 369
(5). Special Assessment Districts Bonds
■
The City holds reserve funds on behalf of bondholders; the assets are recorded in the
Special Assessment Agency Fund:. Bonds outstanding at June 30, 1998
for each district
.
under'the Bond Acts of 1911 and 1;915,. and.other
special assessments,
are as follows:
Bonds
Original.
Outstanding
Assessment District.
Issue
June 30, 1998
No. 57 Corona Highlands
$938;598
$375,439
.
No. 58 Cannery Village
107,746
45,000
No. 59 McFadden Square
530,609
375,000
No. 60 - Bay Avenue
236,533
170,000
.
No. 61 East Bay Front
127,299
95,000
No. 62 Hazel Drive
335,210
240,000
No. 63 . Newport Island
536,531
405,000
.
No. 64 channel Road.
180,794 -
166,000
No.65 Rocky,Point
53 „125
38,000
No. 66 East Newport,
171,911.
135,000
No. 67 CDM BIk -133 :.
64,431
58,000
No. 71 Balboa Blvd.
796,942
796,942
.
No. 72 Balboa Coves
192,908
180,001
No. 95 -1 CIOSA A
7,500,000
6,090,000
No. 95 -1 CIOSA B
9,335,000
9,120,000
34
CITY OF NEWPORT BEACH
■ Notes to General Purpose Financial Statements
June 30, 1998
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.
. (6) 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 $25 million per occurrence with a'self- insured
. retention (SIR) of $750,000 per occurrence.
For workers' compensation and employer's liability insurance, the City has excess,.
. insurance coverage of $1,000,000 per occurrence with a $300,000 SIR. This coverage:
provides for work - related accidents and diseases.
The Insurance Reserve fund was established to account for costs associated with general
liability, workers' compensation, and compensated absence benefits. 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 liability claims payable include
$9,752,753 which represents the discounted present value at June 30, 1998; the claims
were discounted using an interest rate of five percent.
■ June 30, 1997 June 30, 1998
Unpaid claims, beginning of fiscal year $8,011,733 $8,186,374
Incurred claims (including IBNR) 3,499,035 5,027,741
Claim payments (3.324,394) (3,461.842)
Unpaid claims, end of fiscal year $8 186.374 $9.752.753
0
0 35
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
(7) 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. The deferred compensation is
only available to employees upon certain conditions being met.
Due to recently approved federal legislation, the 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 no longer the property of the City and are
no longer subject to the claims of. the City's general creditors. The assets under the plan
totaled $34,571,008 at June 30, 1998.
(8)' '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. Benefit provisions and
all, other requirements are established by state statute and city ordinance. 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 7% (9% for safety employees) of their annual
covered salary. The City makes the contributions required of City employees on their
behalf and for their account. The City is required to contribute at an actuarially determined
rate the current rate is 5.524% for non- safety: employees and 14.024% for safety
employees of annual covered payroll. The contribution requirements of plan members and
the City are established and maybe amended by PERS.
Annual Pension Cost
For 1998, the City's annual pension cost of $7,174,562 for PERS was equal to the City's
required and actual contributions. The required contribution was determined as part of the
June 30, 1996, actuarial valUation:0sing the entry age normal actuarial cost method. The
actuarial assumptions included (a).8.5 %.::investment rate of return (net of administrative
expenses); (b) projected annual salary increases that vary by duration of service, and (c)
2% per year cost -of- living adjustments. Both (a) and (b) included an inflation component
of 4.5 %. The actuarial value of PERS assets was determined using techniques that
smooth.the effects of short-term volatility in the market value of investments over a four -
year period (smoothed market value). PERS has combined the prior service and current
36
■
■
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
service and the current service unfunded liability to establish a "single" funding horizon for
the initial unfunded liability. The amortization period of the "single" unfunded liability ends
in the year 2016.
THREE -YEAR TREND INFORMATION FOR PERS ($ Amount in Thousands)
Fiscal
Year
6/30/96
6/30/97
6/30/98
Annual Pension
Cost (APC)
$5,458
5,817
7.175
Percentage of
APC Contributed
100%
100%
100%
Net Pension
Obligation
0
0
0
SCHEDULE OF FUNDING PROGRESS.FOR PIERS ($ Amount in Thousands)
37
Excess
Actuarial
Excess
Assets
Accrued
Assets
(Unfunded)'
Actuarial
Actuarial
Liability
(Unfunded
AAL as a %.
Valuation
Value of
(AAL)
AAL or
Funded
Covered
of Covered.
Date
Assets
Entry Age
UAAL)
Ratio
Payroll
Payroll
(A)
(B)
(A - B)
(A / B)
(C)
((A-B) /,C1 .
6/30/94:
Misc.
$65,768
$64;588
$1,180
101.8 %.
$21;324
525370/a
Police
84,465
83,558
907
101.1% .
14,970
6.058%
Total
$150,233
$148,146
$2,087
101.4%
$36,294
5.750%
6/30/95:
Misc.
$70,283
$71,184
($901)
98.7%
$22,218
(4.055 %)
Police
91,665
97,460
5,795
94.1%
16,423
(35.286 %)
Total
$161,948
$168,644
$6,696
96.0%
$38,641.
6/30/96:
Misc.
$79,075
$76,334
$2,741
103.6%
$20,404
13.434%
Police
103,757
108,704
4,947
95.4%
16,127
30.675%
Total
$182,832
$185,038
$( 2,206)
98.8%
$36,531
(6.039 0/6)
37
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
Plan Description - Defined Contribution Plan
As of January 1, 1992, the City entered into a defined contribution plan with 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, 1998, the City's -covered payroll for employees participating
in the plan was $2,035,440. The City made employer contributions of $76,329 (3.75% of
current covered payroll). Assets of the plan totaled $1,723,576 at June 30, 1998.
(9) :.Early Retirement Program
On June 30, 1993, the .City implemented and offered an Early Retirement Program to
certain employees whose retirement would lead to a permanent vacancy within the City
organization. The Early Retirement Program provides participating employees with a
supplement to. their normal PERS retirement benefits by an additional payment from the
City.'
(10) Post - Employment Health Care Benefits
As established by a City Council approved Memorandum of Understanding between the
City and its :;employees, : the• ,City provides post - employment health care. benefits.
Employees who retire from the City with seven years of service and participate in PERS
are eligible to receive health care,benefits covering themselves and any qualified family
members from the-City's insurance carrier, Health Net and PERS. The City pays 50% of
total plan premiums charged under the Health Net plan while the active and retired
employees split the remaining premium at a rate of 25% each. The City pays an
accelerating portion of the °PERS premium capping at $400 a month while the retired
employees pay the remaining- portion of the PERS premium. This program is funded on a
pay -as- you -go basis. The City's expenditures for post- employment health care benefits for
fiscal years 1!997 -98 and 1996 -97 were $232,304 and $237,208, respectively. As of June
30, 1998, 331 participants were eligible to receive benefits.
38
■
■
■
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
(11) Interfund Receivables and Pavables
At June 30, 1998, interfund receivables and payables were as follows:
Due From Due to
Other Funds Other Funds
General Fund $4,417,378
Special Revenue Funds:
Combined Transportation
Community Development Block Grant
Enterprise Fund:
Cannery Village
Internal Service Fund
Insurance Reserve
Total
(12) Interfund Transfers
Interfund transfers are reconciled as follows
General Fund
Special Revenue Funds
Debt Service Funds
Enterprise Funds
Internal Service Funds
Total
39
$3,830,612
95,132
424,892
66,742
$4,417,378
$4,417,378
Transfers In
.. Transfers Out
$3,994,659
$1993,136
3,744,659
563,500
138,101
1,605,969
288,232
$6,164,128
$6,164,128
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
(13) Changes in Contributed Capital
Contributed capital of the Enterprise Funds was changed as follows:
Water
Wastewater
Total
Balance, July 1, 1997 $5,060,494 ,
$9,145,593
$14,266,087
Additions 984,450
613,360
1,597,810
Balance, June 30, 1998 $6,044,944
$9,758,953
"$15,803,897
'
Contributed capital of the Internal Service Funds was unchanged as follows
Balance, July 1, 1997 .
Balance, June 30 199B
Equipment
$4,697,648
$4,097,648
(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 "desjgnations "also may be established to indicate tentative plans for
financial resource utilization in a future period.,
The City's reserves and designations at June 30, 1998 are tabulated below followed by
explanations as to. the nature and purpose of each reserve and designation.
Special Debt Capital
General Revenue Service Projects
Fund Funds Fund Fund Total
Encumbrances $2,691,753 $1,963,243 $8,891,691 $10,546,687
Inventories 136,633 136,633
Long -Term Receivable 200,000 200,000
Debt Service $579,814 579,814
Total Reserved $3,028,386 $1,963,243 $579,814 $5,891,691 $11,463,134
40
CITY OF NEWPORT BEACH
. Notes to General Purpose Financial Statements
June 30, 1998
■
Designations established as of June 30, 1998, are as follows:
.
Special
Revenue Capital
■
General Fund Funds Projects Fund Total
Special Projects $3,601,156 $7,559,710 $1,325,437 $12,486,303
■
Stablization 1,518,366 1,518,366
Contingencies
4,613,146 4,613,146
.
Total Designated $9,732,668 $7,559,710 $1,325,437 $18,617,815
.
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 year
■
end.
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 receivables
This account is used to identify and segregate that portion of the City's financial assets ..:.
■
which are not due to be received for an extended period, so are not available to meet
current expenditures.
.
Reserved for debt service . .
This account sets aside a portion of fund balance to meet the annual debt service"
requirements.
Designated for special projects
There are several special projects for which funds have been designated for equipment
■
replacement, refurbishment, development, and/or improvement. These special projects
include Recreational Instruction, Paramedic Program, Helicopter Replacement,
Neighborhood Enhancement, Park Fees, Off - Street Parking, and the Senior Citizen Site.
•
Designation for stabilization
This account stabilizes fluctuating revenues and expenditures, providing stability by
smoothing out year -to -year volatility in the City's finances.
Designated for contingencies
Contingency designations represent funds for unexpected emergencies.
0
0
41
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements
June 30, 1998
(15) Segment Information for Enterprise Activities
There are three services provided by the City that are financed primarily by user charges:
parking, water services and sewer services. These services are accounted for in separate
enterprise funds.
The key financial data for the year ended June 30, 1998, for these. Enterprise Funds are
as follows:
42
Cannery
Village
Parking
Water
Wastewater
'- -Total
Operating revenues
$85,859
$15,039,296
$2,770;106
$18,895,261
Operating expenses:
Depreciation
41299
,. 1,368,771
'817,022
2,190,092
Other
12,350,445
1,677,634
14,028,079
Operating income
81,560
2,320,080
275,450
2,677,090
Net non - operating
revenue (expense)
(331,926)
172;690
(159,236)
Net income before
operating transfers
81,560
1,988,154
448,140
2,517,854
Operating transfers out
(96,754)
(41.;347)
(138,101)
Net income
81,560
1.,891,400
406,793
2,379,753
Property, plan(
and equipment:.
Additions
5;195,950
3,0081316
8,204,266.
(Deletions)_
(187,700)
(360,000)
(547,700)
Net working capital
(424,892)':
7,323,409
1:,819;212
8,717;729.
Total assets
7,104,840.
53,788,165:
13,944;049
68,837,054
Outstanding long -term
liabilities
13,645,000
13,645,000
`'.Total equity
$679,948
$36,809,844 _
$13,773,831
$51,263,623
(16) Individual.. Fund Disclosures
At June 30,J998, the
Insurance
Reserve Internal
Service Fund had an accumulated
deficit fund balance of $16,979,474.
The accumulated deficit is expected to be eliminated
by future interdepartmental
charges, Expenditures'
exceeded
appropriations in the
Supplemental Law Enforcement and Miscellaneous.G
rants Special
Revenue Funds.
42
CITY OF NEWPORT BEACH
. Notes to General Purpose Financial Statements
June 30, 1998
■ (17) Commitments and Contingencies
■ 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).
The City entered into a Circulation Improvement and Open Space Agreement ( CIOSA)
with a developer whereby the City could receive up to $14,395,572 to be used only for
certain transportation and circulation improvements, of which $12,997,591 had been
received as of June 30, 1998. 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, 1998, the City received $1,267,854 of Fair Share Fees, and $633,927 was paid to the
CIOSA Construction capital projects fund. Through June 30, 1998, $890,628 of Fair :Share
Fees have 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.
The City is a participant with the Orange County Fire Authority, the County of Orange, and.
other Orange County cities to build and maintain a communications system utilizing the:
800 megahertz band. Although the City has not entered into a related financing
agreement, the City's portion of .infrastructure field equipment and shared.: services
through June 30, 2000, is expected to total $2,526,729. Through June 30, :1998',:
$1,259,930 has been paid.
(1 -8) Year 2000 Issues (Y2K) (Unaudited)
Due to computer programming shortcomings, it is possible that computer systems and
other equipment that rely on programmable code or circuitry may experience interruptions
or failures on or after January 1, 2000. The Y2K issue arises because most computer
programs have been written using two digits rather than four to define the applicable year.
Any software programs that have date - sensitive features may recognize a date using "00"
as the year 1900 rather than 2000. This could result in a system failure or miscalculations
causing disruption of operations.
The City has been actively involved in the assessment and remediation phases of the
Year 2000 issue. The risk assessment phase involved identifying critical systems, threat
levels, and levels of risk, including both hardware and software. The remediation stage
involved converting existing systems or switching to compliant systems. Critical systems
with the highest potential of risk and /or threat have been identified as being:
Computer Aided Dispatch (CAD) System
Pentamation System
Library System
43
CITY OF NEWPORT BEACH
Notes to General Purpose Financial Statements ■
June 30, 1998
On July 28, 1998, the City of Newport Beach issued $14,225,000 of Refunding Water .
Revenue Bonds to "current refund the 1994 Water Revenue Bonds. The 1998 Bonds are
Serial Bonds with coupon rates: ranging :from 3.60% to 4.50% The net interest rate of the
1993 Bonds is 4.421 %. Interest on the: Bonds is payable semiannually on February 1 and .
August 1 of each year commencing February 1, 1999. Principal payments are payable
annually on August 1 of each year commencing on August 1, 1999.
■
44 .
•
• PERMIT Tracking System
• Geographic Information System
• Network Telecommunications/WAN Area Network)
— (Wide
All mission critical and enterprise wide systems are either.certified Year 2000 compliant
Year
(CAD, Library and GIS), very close to 2000 compliance (Pentamation and
Networking/Telecommunications) or are in the process of being completely replaced
(PERMIT). Assessment of non - critical components of the information system
■
infrastructure such as voice -mail, personal computers, and Department level software
applications will continue to be renovated, validated and implemented by March 1999.
Additionally, the awareness and assessment phases will be extended beyond the
.
information system infrastructure to include embedded chip systems such as HVAC,,,
traffic signals and irrigation,; water and sewer control devices, elevators, and all date' .
controlled electronic equipment.
.
As of June 30, 1998 the City has no resources committed to making computer systems
and other electronic equipment Year 2000 compliant.
:(1:9) Subsequent Events
On July 1 1998, the.: City decreased the self- insured retention (SIR) from $750,000 to
■
$500,000. The limits of public liability insurance remain at $25. million.
1998 . Refunding Certificates of Participation
.
On August 12; 1998, ahe: City 'of Newport Beach Public Facilities .Corporation issued.
$7;330,000 of': Refunding Certificates of Participation (COPS) to current/advance refund
.
the '1992 Certificates of`Participation.`The 1998 CODs consist of $2,995,000 of Serial
Certificates with coupon rates ranging from 3.60% to 4.55 % and $4,335,000 of Term
Certificates with 'coupon rates of 5.05% and 5.15 %. The total interest rate of the 1998
■
COPs is 5.024 %. The net interest rate of the 1992 bonds is 5.017 %. Interest on the
Certificates is payable semiannually on June 1 and December 1 of each year
commencing December 11 1 Principal payments are payable annually on June 1 of
.
each year commencing on June 1, 1999,
1998 Water Revenue Refunding:` Bonds
On July 28, 1998, the City of Newport Beach issued $14,225,000 of Refunding Water .
Revenue Bonds to "current refund the 1994 Water Revenue Bonds. The 1998 Bonds are
Serial Bonds with coupon rates: ranging :from 3.60% to 4.50% The net interest rate of the
1993 Bonds is 4.421 %. Interest on the: Bonds is payable semiannually on February 1 and .
August 1 of each year commencing February 1, 1999. Principal payments are payable
annually on August 1 of each year commencing on August 1, 1999.
■
44 .
CITY OF NEWPORT BEACH
■ Notes to General Purpose Financial Statements
June 30, 1998
• Current/Advance Refundings
. To take advantage of substantial cash savings available in Fiscal Year 1999, due to
declining interest rates, the City current refunded the 1994 Water Revenue Bond issue
. and current/advance refunded the 1992 Certificates of Participation. These transactions
resulted in an overall economic gain to the City wherein the City will, over time, realize
substantial savings in cash flow requirements to service the outstanding debt. For
. financial reporting purposes, however, such a refunding transaction generally results in
accounting losses. In accordance with generally accepted accounting principles in effect
at the time of the transaction, such accounting losses will be recognized by the City in the
. year of refunding and the corresponding economic gains will be recognized by the city as
they occur. The proceeds from the City's refunding issues have been placed in irrevocable
escrow accounts overseen by independent bank fiscal agents. Such proceeds are
■ generally invested in U.S. Treasury Securities which, together with interest" earned
thereon, are intended to provide amounts sufficient for future payment of. interest, principal
and redemption premium on the refunded bonds. These refunded bonds are not included
■ in the City's outstanding long -term debt since the City's obligation thereon was satisfied by
establishing the irrevocable trusts.
Subsequent to fiscal year end, and at the time of issuance of this report, the total amount
of the defeased debt outstanding and removed from the City's funds and account groups
. aggregated $21,340,000.
Cy
Supplementary
Information
!I
IL
1
Funa
I
�t
0
GENERAL FUND 0
The General Fund is used to account for fiscal resources which are:
a) dedicated to the general government operations of the City, and ■
b) not required to be accounted for in another fund.
■
CITY OF NEWPORT BEACH
Comparative Balance Sheets - General Fund
June 30, 1998
Assets
Cash and investments
Accounts receivable and accrued revenues
Due from other governments
Due from other funds
Inventories of material and supplies, at cost
Restricted assets - cash and investments
Other assets
Notes receivable
Total Assets
Liabilities and Fund Balance
Liabilities:
Accounts payable and accrued liabilities
Accrued payroll
Deferred revenue
Deposits
Total Liabilities
Fund Balance:
Reserved:
Reserved for encumbrances
Reserved for inventories
Reserved for long -term receivable
Unreserved:
Designated for special projects
Designated for stabilization
Designated for contingencies
Total Fund Balance
Total Liabilities and Fund Balance
See Accompanying Accountants' Report.
47
1998 1997
$ 5,634,471
1,947,948
2,221,157
4,417,378
136,633
1,120,619
3,587,569
200,000
$ 19,265,775
$ 1,386,437
1,133,348
705,443
3,279,493
6,504,721
2,691,753
136,633
200,000
3,601,156
1,518,366
4,613,146
12,761,054
$ 19,265,775
$ 8,223,937
1,803,166
1,791,682
2,252,527
192,642
1,541,086
99,159
200,000
$ 16,104,199
$ 1,751,039
1,133,348
627,358
1,536,273
5,048,018
2,167,523
192,642
200,000
2,071,387
6,424,629
11,056,181
$ 16,104,199
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual
General Fund
For the Year Ended June 30, 1998
Revenues:
Taxes
Licenses, fees and permits
Intergovernmental revenue
Charges for services
Fines, forfeitures and penalties
Revenue from use of
money and property
Contributicns
Other
Total Revenues
Expenditures:
Current:
General government
Public safety
Public works
Community development
Community services
Capital Outlay
Debt Service:
Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Operating transfers in
Operating transfers out
Proceeds from capital leases
Proceeds from sale of assets
Total Other Financing Sources (Uses)
Excess (Deficiency) of Revenues
and Other Financing Sources
Over (Under) Expenditures
and Other Financing Uses
Fund Balance, July 1
Fund Balance, June 30
See Accompanying Accountants' Report.
6,425,701
1998
(364,319)
1997
38,086,672
38,913,777
anance
35,531,168
15, 805,166
15, 641, 467
Favorable
15, 015, 995
Budget
Actual
(Unfavorable)
Actual
$ 45,746,600
$ 49,385,380
S 3,638,780
$ 44,523,935
2,105,731
4,312,942
2,207,211
1,840,024
4,770,756
4,842,580
71,824
4,834,968
7,295,872
8,276,460
980,588
7,180,468
2,652,000
2,181,621
(470,379)
2,364,662
6,082,320
5,560,986
(521,334)
5,069,125
415,312
256,102
(159,210)
303,111
149,000
154,447
5,447
284,061
69,217,591
74,970,518
5,752,927
66,400,354
6,425,701
6,790,020
(364,319)
5,673,321
38,086,672
38,913,777
(827,105)
35,531,168
15, 805,166
15, 641, 467
163,699
15, 015, 995
3,060,049
3,021,533
38,516
2,735,997
6,070,537
5,955,757
114,780
5,717,501
7,001,694
4,533,596
2,468,098
7,300,300
713,638
367,840
345.798
53,543
135,185
101,636
33,549
8,963
77,298,642
75,325,626
1,973,016
72,036,788
(8,081,051)
(355,108)
7,725,943
(5,636,434)
4,664,883
3,994,659
(670,224)
4,873,525
(1,993,136)
(1,993,136)
(1,489,704)
46,884
46,884
1,825,176
20,500
11,574
if /\CI\ I1O
(8,926)
252,944
A COG ]O]
G AC1 f1A.1
11 MC II\n\
(3,395,668) 1,704,873 5,100,541 (174,493)
11,056,181 11,056,181 11,230,674
$ 7,660,513 $ 12,761,054 $ 5,100,541 $ 11,056,181
48
■
■
■
■
■
■
� 1 `
1 I�
� I 1
� � 1
I
im
F
I
1
1
I
Special •1
Revenue �
Funds I
1
I
1
1
1
1
1
1
1
I I
0
SPECIAL REVENUE FUNDS N
0
Special Revenue Funds are used to account for the proceeds of specific revenue sources
which are legally restricted to expenditures for specified purposes. City of Newport Beach
Special Revenue Funds are as follows: 0
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 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.
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.
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 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 Ackerman Donation Fund is used to account for the receipt and disbursement of funds .
received from the Ackerman Trust. These funds are split between the City and the University of
California, Irvine. The City's portion must be used for library and scholarship purposes.
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 0
received from the county to be used exclusively for front line law enforcement services
Misc. Grants Fund is used to account for all other short-term grant programs.
0
Assets
Cash and investments
Accounts receivable
and accrued revenues
Lease receivable
Due from other governments
Other assets
Total Assets
CITY OF NEWPORT BEACH
Combining Balance Sheet
All Special Revenue Funds
June 30, 1998
Tide and
state Asset Submerged
Gas Tax Forfeiture Land
Circulation
Building
and
Excise
Contributions Transportation
Tax
$ 5,119,574 $ 397,826 $ 206,586 $ 91,405 $ 8,535,516 $ 517,159
7,400 369,274 621
205,859 10,546 418,480
$ 5,332,833 $ 397,826 $ 586,406 $ 509,885 $ 8,536,137 $ 517,159
Liabilities and Fund Balances
Liabilities:
Accounts payable and
and accrued liabilities
$ 42,576
$ 234,872
$ 289,873
$ 56,270
Accrued payroll
15,322
Due to other funds
Deferred revenue
$
370,000
Deposits
209,950
Total Liabilities
42,576
460,144
370,000
289,673
56,270
Fund Balances:
Reserved for encumbrances
288,229
126,262
139,885
587,387
88,022
Unreserved:
Designated for special projects
5,002,028 $
397,826
Undesignated
7,658,877
372,867
Total Fund Balances
5,290,257
397,826 126,262
139,885
8,246,264
460,889
Total Liabilities and
Fund Balances
$ 5,332,833 $
397,826 $ 566,406 $
509,885
$ 8,536,137
$ 517,159
See Accompanying Accountants' Report
Ko
■
Community
Air Quality
Supplemental
Combined
Development
Ackerman
Management
Environmental
Law
Misc
Totals
. Transportation
Block Grant
Donation
District
Liability
Enforcement
Grants
■
$
291,546
$ 406,587
$ 383,434
$ 11,613
$
3,592
$
15,964,838
$
15,057,246
222
377,517
390,043
■740,000
740,000
814,000
$
7,002,313
$ 132,193
19,763
7,789,154
3,212,464
2,012
■ $
7,002,313
$ 132,193
$
1,031,546
$ 426,350
$ 383,656
$ 11,613
$
3,592
$
24,871,509
$
19,475,765
■
■
$
1,204,257
$ 37,061
$
111,000
$
1,975,909
$
1,720,666
15,322
15,322
.
3,830,612
95,132
3,925,744
256,512
79,867
740,000
1,189,887
2,385,420
209,950
187,566
■
5,114,756
132,193
851,000
7,316,812
4,565,486
■
678,458
55,000
1,963,243
3,986,023
1,209,099
125,546
$ 426,350
$ 383,656
$ 11,613
$
3,592
7,559,710
3,868,833
■
8,031,744
7,055,423
1,887,557
180,546
426,350
383,656
11,613
3,592
17,554,697
14,910,279
■ $
7,002,313
$ 132,193
$
1,031,546
-$ 426,350
$ 383,656
$ 11,613
$
3,592
$
24,871,509
$
19,475,765
■
■
■
.
51
City of Newport Beach
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
All Special Revenue Funds
For the Year Ended June 30, 1998
Revenues:
Licenses, fees and permits
Intergovernmental revenue
Charges for services
Fines, forfeitures and penalties
Revenue from use of money
and property
Contributions
Other
Total Revenues
Expenditures:
Current:
General government
Public safety
Public works
Community development
Community services
Capital Outlay
Debt service:
Principal
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of
Revenues Over
(Under) Expenditures
Other Financing Sources (Uses):
Operating transfers out
Excess (Deficiency) of Revenues
and Other Sources Over (Under)
Expenditures and Other Uses
Fund Balances (Deficits), July _
Fund Balances (Deficits), June 30
See Accompanying Accountants' Report.
1,399,690 360,703 3,471,468 195,406 (350,623) 315,284
(96,000) (3,345,206) (80,000)
1,303,690
360,703 126,262
Tide and
(350,623)
Circulation
Building
State
Asset
Submerged
225,605
and
Excise
Gas Tax
Forfeiture
Land
Contributions
Transportation
Tax
8,246,264 $
460,889
$ 1,095,553
$ 1,267,854 $
385,551
$ 1,492,748
$ 684,639
38,370
$ 391,954
399,136
2,092
4,328,471
592,368
26,312
7,400
64,216
3,159
1,899,264
394,046
5,465,553
748,855
1,860,222
411,863
33,343
303,881
633;927
820,245
499,594
633.587
553,449
1,576,918
96,579
109,755
126,617
499,594
33,343
1,994,085
553,449
2,210,845
96,579
1,399,690 360,703 3,471,468 195,406 (350,623) 315,284
(96,000) (3,345,206) (80,000)
1,303,690
360,703 126,262
195,406
(350,623)
235,284
3,986,567
37,123
(55,521)
8,596,887
225,605
$ 5,290,257
$ 397,826 $ 126,262 $
139,885 $
8,246,264 $
460,889
52
■
■
■
■
■
■
■
■
172,917 48,274 254,534
Community
937,808
Alr Quality
444,175 10,290 454,465
Supplemental
140,997 961,242
867,834
11,403,137 14,763,264
Combined
Development
Ackerman
Management
Environmental
Law
Misc
Totals
Transportation
Block Grant
Donation
District
Liability
Enforcement
Grants
1998
1997-
383,656
$ 11,613
$ 3,592
$ 17,554,697
$ 14,910,279
$ 241,402
$ 2,990,360 $
2,241,485
$ 11,955,497
$ 444,175
$ 75,511
$ 161,592
14,614,162
7,036,449
38,370
4,742
391,954
164,353
•
98,489
$ 14,666
23,640
15,072 $
1,895
5,502,141
5,235,736
185,000
256,616
404,376
3,159
12,053,986
444,175
199,666
99,151
241,402
176,664
1,895
23,996,762
15,087,141
172,917 48,274 254,534
116,079
937,808
486,100
444,175 10,290 454,465
593,548
140,997 961,242
867,834
11,403,137 14,763,264
7,746,972
109,755
105,029
126,617
131,343
11,403,137 444,175 140,997 10,290 172,917 48,274 17,607,685
10,046,905
650,849
58,669 88,861
241,402 3,747 (46,379)
6,389,077
5,040,236
(86,000)
(15,000)
(122,453)
(3,744,659)
(4,623,524)
564,849
58,669
73,861
241,402
(118,706)
(46,379)
2,644,418
416,712
1,322,706
121,877
352,469
142,254
130,319
49,971
14,910,279
14,493,567
$ 1,887,557 $ -
$ 180,546
$ 426,350 $
383,656
$ 11,613
$ 3,592
$ 17,554,697
$ 14,910,279
53
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
State Gas Tax Special Revenue Fund
For the Year Ended June 30, 1998
Revenues:
Intergovernmental revenue
Revenue from use of
money and property
Contributions
Total Revenues
Expenditures:
Capital Outlay
Excess (Deficiency)
of Revenues Over
(Under) Expenditures
Other Financing Uses:
Operating transfers out
Excess (Deficiency) of
Revenues Over (Under)
Expenditures and Other Uses
Fund Balance, July 1
Fund Balance, June 30
See Accompanying Accountants' Report.
1998 1997
Variance
Favorable
Budget Actual (Unfavorable) Actual
$ 1,214,450 $ 1,492,748 $ 278,298 $ 1,272,415
120,000 399,136 279,136 226,850
7,400 7,400
1,334,450 1,899,284 564,834 1,499,265
2,161,074 499,594 1,661,480 1,789,155
(826,624) 1,399,690 2,226,314 (289,890)
(96,000) (96,000) (96,000)
(922,624) 1,303,690 2,226,314 (385,890)
3,986,567 3,986,567 4,372,457
$ 3,063,943 $ 5,290,257 $ 2,226,314 $ 3,986,567
54
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
Asset Forfeiture Special Revenue Fund
For the Year Ended June 30, 1998
1998 1997
anance
Favorable
Budget Actual (Unfavorable) Actual
. Revenues:
Fines, forfeitures and penalties $ 230,000 $ 391,954 $ 161,954 $ 103,232
Revenue from use of
■ money and property 5,000 2,092 (2,908) 2,587
Total Revenues 235,000 394,046 159,046 105,819
Expenditures:
. Current:
Public safety
. Excess Revenues
Over Expenditures
■ Fund Balance, July 1
. Fund Balance, June 30 $
■ See Accompanying Accountants' Report
233,543 33,343 200,200 68,696
1,457 360,703 359,246 37,123
37,123 37,123
38,580 $ 397,826 $ 359,246 $ 37,123
55
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
Tide and Submerged Land Special Revenue Fund
For the Year Ended June 30, 1998
See Accompanying Accountants' Report
56
1998
1997
Variance
Favorable
Budget
Actual
(Unfavorable)
Actual
Revenues:
Licenses, fees and permits $
1,189,865
$ 1,095,553
$ (94,312) $
1,166,673
Intergovernmental revenue
21,554
(21,554)
46,586
Charges for services
25,000
38,370
13,370
4,742
Revenue from use of
money and property
5,067,500
4,328,471
(739,029)
4,453,084
Other
1,500
3,159
1,659
1,076
Total Revenues
6,305,419
5,465,553
(839,866)
5,672,161
Expenditures:
Current:
Public Works
328,108
303,881
24,227
275,587
Community services
836,876
820,245
16,631
684,889
Capital Outlay
1,003,208
633,587
369,621
143,789
Debt service:
Principal
109,755
109,755
105,029
Interest and fiscal charges
126,617
126,617
131,343
Total Expenditures
2,404,564
1,994,085
410,479
1,340,637
Excess of Revenues
Over Expenditures
3,900,855
3,471,468
(429,387)
4,331,524
Other Financing Uses:
Operating transfers out
(4,063,983)
(3,345,206)
718,777
(4,331,524)
Excess (Deficiency)
of Revenues Over
(Under) Expenditures
and Other Uses
(163,128)
126,262
289,390
Fund Balance, July 1
Fund Balance, June 30 $
(163,128)
$ 126,262
$ 289,390 $
See Accompanying Accountants' Report
56
■
■
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
fps Special Revenue Fund
For the Year Ended June 30, 1998
Revenues:
Intergovernmental revenue
Revenue from use of money
and property
Contributions
Total Revenues
Expenditures:
Capital Outlay
Excess Revenues
Over Expenditures
Fund Balance (Deficit), July 1
Fund Balance (Deficit), June 30
See Accompanying Accountants' Report.
Budget
$ 10,759,411 $
50,000
20.000
10,829,411
6,989,238
1998
Favorable
iFkil
Actual (Unfavorable) Actual
684,639 $ (10,074,772) $ 271,321
(50,000)
64,216 44,216 218,30(
748,855 (10,080,556) 489,621
553,449 6,435,789 463,304
3,840,173 195,406 (3,644,767) 26,317
(55,521) (55,521) (81,838)
$ 3,784,652 $ 139,885 $ (3,644,767) $ (55,521)
i•'fl
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
Circulation and Transportation Special Revenue Fund
For the Year Ended June 30, 1998
Revenues:
Licenses, fees and permits $
Revenue from use of
money and property
Total Revenues
Expenditures:
Current:
Public works
Capital Outlay
Total Expenditures
Deficiency of Revenues
Under Expenditures
1998
Budget Actual
1997
Favorable
(Unfavorable) Actual
250,000 $ 1,267,854 $ 1,017,854 $ 421,025
592,368 592,368 461,648
250,000 1,860,222 1,610,222 882,673
633,927
(633,927)
210,513
2,563,275 1,576,918
986,357
1,037,357
2,563,275 2,210,845
352,430
1,247,870
(2,313,275) (350,623)
1,962,652
(365,197)
Fund Balance, July 1 8,596,887 8,596,887 8,962,084
Fund Balance, June 30 $ 6,283,612 $ 8,246,264 $ 1,962,652 $ 8,596,887
See Accompanying Accountants' Report.
58
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
Building Excise Tax Special Revenue Fund
For the Year Ended June 30, 1998
Revenues:
Licenses, fees and permits
Revenue from use of
money and property
Total Revenues
Expenditures:
Capital Outlay
Excess (Deficiency)
of Revenues Over
(Under) Expenditures
Other Financing Uses:
Operating transfers out
Excess (Deficiency)
of Revenues Over
(Under) Expenditures
and Other Uses
Fund Balance (Deficit), July 1
Fund Balance (Deficit), June 30
See Accompanying Accountants' Report.
1998 1997
(237,926) 315,284 553,210 321,617
(80,000) (80,000) (80,000)
(317,926) 235,284 553,210 241,617
225,605 225,605 (16,012)
$ (92,321) $ 460,889 $ 553,210 $ 225,605
59
Favorable
Budget
Actual
(Unfavorable)
Actual
$ 100,000
$ 385,551
$ 285,551 $
404,841
5,000
26,312
21,312
9,153
105,000
411,863
306,863
413,994
342,926
96,579
246,347
92,377
(237,926) 315,284 553,210 321,617
(80,000) (80,000) (80,000)
(317,926) 235,284 553,210 241,617
225,605 225,605 (16,012)
$ (92,321) $ 460,889 $ 553,210 $ 225,605
59
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes In Fund Balance
Budget and Actual
Combined Transportation Special Revenue Fund
For the Year Ended June 30, 1998
Revenues:
Intergovernmental revenue
Revenue from use of
money and property
Total Revenues
Expenditures:
Capital Outlay
Excess (Deficiency)
of Revenues Over
(Under) Expenditures
Other Financing Uses:
Operating transfers out
Excess (Deficiency) of Revenues
Over (Under) Expenditures
and Other Uses
Fund Balance, July 1
Fund Balance (Deficit), June 30
See Accompanying Accountants' Report.
12,798,564 11,403.137
(11,969,492) 650,849
(86,000) (86,000)
1,395,427 4,220,990
12,620,341 477,358
(12,055,492) 564,849 12,620,341 391,358
1,322,708 1,322,708 931,350
$ (10,732,784) $ 1,887,557 $ 12,620,341 $ 1,322,708
m
1998
1997
Variance
Favorable
Budget
Actual
(Unfavorable)
Actual
$ 789,072
$ 11,955,497
$ 11,166,425
$ 4,643,087
40,000
98,489
58,489
55,261
829,072
12,053,986
11,224,914
4,698,348
12,798,564 11,403.137
(11,969,492) 650,849
(86,000) (86,000)
1,395,427 4,220,990
12,620,341 477,358
(12,055,492) 564,849 12,620,341 391,358
1,322,708 1,322,708 931,350
$ (10,732,784) $ 1,887,557 $ 12,620,341 $ 1,322,708
m
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes In Fund Balance
Budget and Actual
Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 1998
Revenues:
Intergovernmental revenue
Expenditures:
Current:
Community development
Deficiency of Revenues
Under Expenditures
Fund Balance, July 1
Fund Balance (Deficit), June 30
See Accompanying Accountants' Report.
1998
anance
Favorable
Budget Actual (Unfavorable)
1997
Actual
$ 582,900 $ 444;175 $ (138,725) $ 569,482
1,025,104 444,175
(442,204)
580,929 569,482
442,204
$ (442,204) $ $ 442,204 $ -
61
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes In Fund Balance
Budget and Actual
Ackerman Donation Special Revenue Fund
For the Year Ended June 30, 1998
Revenues:
Revenue from use of money
and property
Contributions
Total Revenues
Expenditures:
Current:
Community services
Excess (Deficiency)
of Revenues Over
(Under) Expenditures
1998
Variance
Favorable
Budget Actual (Unfavorable)
1997
Actual
$ 14,666 $ 14,666 $ 5,198
$ 185,000 185,000 185,000
185,000 199,666 14,666 190,198
286,750 140,997 145,753 182,945
(101,750) 58,669 160,419 7,253
Fund Balance, July 1 121,877 121,877 114,624
Fund Balance, June 30 $ 20,127 $ 180,546 $ 160,419 $ 121,877
See Accompanying Accountants' Report.
62
17
CITY OF NEWPORT BEACH
■
Statement of Revenues, Expenditures and Changes
In Fund Balance
Budget and
Actual
■
Air Quality Management District Special Revenue Fund
For
the Year Ended June 30, 1998
•
1998
1997
■
Variance
Favorable
Budget
Actual
(Unfavorable)
Actual
Revenues:
Intergovernmental revenue $
75,000
$ 75,511
$ 511 $
72,670
■
Revenue from use of money
and property
5,000
23,640
18,640
16,291
.
Total Revenues
80,000
99,151
19,151
88,961
Expenditures:
Current:
Community development
34,000
10,290
23,710
24,066
Excess of Revenues
Over Expenditures
46,000
88,861
42,861
64,895
Other Financing Sources (Uses):
■
Operating transfers out
(30,000)
(15,000)
15,000
(30,000)
Excess of Revenues
.
and Other Sources Over
Expenditures and Other Uses
16,000
73,861
57,861
34,895
•
Fund Balance, July 1
352,489
352,489
317,594
.
Fund Balance, June 30 $
368,489
$ 426,350
$ 57,861 $
352,489
■
See Accompanying Accountants' Report.
63
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
Environmental Liability Special Revenue Fund
For the Year Ended June 30, 1998
1998 1997
Variance
Favorable
Budget Actual (Unfavorable) Actual
Revenues:
Licenses, fees and permits $ 275,000 $ 241,402 $ (33,598) $ 248,946
Expenditures:
Current:
Public Works
Excess of Revenues
Over Expenditures 275,000 241,402 (33,598) 248,946
Fund Balance, July 1 142,254 142,254 (106,692)
Fund Balance, June 30 $ 417,254 $ 383,656 $ (33,598) $ 142,254
See Accompanying Accountants' Report.
64
■
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
Supplemental Law Enforcement
For the Year Ended June 30, 1998
Revenues:
Intergovernmental revenue
Revenue from use of
money and property
Total Revenues
Expenditures:
Public Safety
Excess (Deficiency)
of Revenues Over
(Under) Expenditures
Other Financing Sources (Uses):
Operating transfers out
Deficiency of Revenues
and Other Sources Under
Expenditures and Other Uses
Fund Balance, July 1
Fund Balance, June 30
See Accompanying Accountants' Report.
(122,453) (122,453)
(5,706) (118,706) (113,000) 130,319
130,319 130,319
$ 118,907 $ 11,613 $ (107,294) $ 130,319
65
1998
1997
Variance
Favorable
Budget
Actual
(Unfavorable)
Actual
$ 160,721 $
161,592
$ 871 $
160,888
15,072
15,072
5,142
160,721
176,664
15,943
166,030
166,427
172,917
(6,490)
35,711
(5,706)
3,747
9,453
130,319
(122,453) (122,453)
(5,706) (118,706) (113,000) 130,319
130,319 130,319
$ 118,907 $ 11,613 $ (107,294) $ 130,319
65
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
Miscellaneous Grants
For the Year Ended June 30, 1998
1998 1997
Favorable
Revenues
Fines, forfeitures and penalties
$
61,121
Revenue from use of
money and property
$ 1,895 $
1,895
522
Total Revenues
1,895
1,895
61,643
Expenditures:
Current:
Public safety
48,274
(48,274)
11,672
Excess (Deficiency)
of Revenues Over
(Under) Expenditures
(46,379)
(46,379)
49,971
Fund Balance, July 1
49,971
Fund Balance, June 30 $
$ 3,592 $
3,592 $
49,971
See Accompanying Accountants' Report
1
10
� 1 +
� f 1
■
Capital Il
��ojects �
Funds �
I
1
I
I
1
I
1
1
1
I
1
I
1
I
r
e
I
1
1
1
I
1
I
1
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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. City of Newport Beach Capital Projects Funds are as follows:
The Capital Improvement Fund is used to account for the receipt and expenditure of
City funds specifically identified for capital improvement projects.
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.
CITY OF NEWPORT BEACH
Combining Balance Sheet
All Capital Projects Funds
June 30, 1998
See Accompanying Accountants' Report
M
Assessment
CIOSA
Totals
District
Construction
`1998
1997-
Assets
Cash and investments
$
211,375
$
1,457,790
$
1,669,165
$
349,284
Accounts receivable and accrued revenues
525
525
Restricted assets -cash and investments
6,009,555
6,009,555
8,003,824
Total Assets
$
211,900
$
7,467,345
$
7,679,245
$
8,353,108
Liabilities and Fund Balances
Liabilities:
Accounts payable and accrued liabilities
$
192
$
461,925
$
462,117
$
37,219
Due to other funds
798,976
Total Liabilities
192
461,925
462,117
836,195
Fund Balances:
Reserved for encumbrances
145,172
5,746,519
5,891,691
7,063,846
Unreserved:
Designated for special projects
66,536
1,258,901
1,325,437
Unreserved, undesignated
453,067
Total Fund Balances
211,708
7,005,420
7,217,128
7,516,913
Total Liabilities and Fund Balances
$
211,900
$
7,467,345
$
7,679,245
$
8,353,108
See Accompanying Accountants' Report
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CITY OF NEWPORT BEACH
Combining Statement of Revenues, Expenditures
and Changes in Fund Balances
All Capital Projects Funds
For the Year Ended June 30, 1998
Revenues:
Revenue from use of money
and property
Contributions
Total Revenues
Expenditures:
Capital Outlay
Excess of Revenues and
Other Sources Over (Under)
Expenditures and Other Uses
Fund Balances, July 1
Fund Balances, June 30
See Accompanying Accountants' Report.
Assessment CIOSA Totals
District Construction 1998 1997
$ 329,951 $
$ 6,825 916,260
6,825 1,246,211
137,547 1,415,274
329,951 $ 164,751
923,085 9,216,693
1,253,036 9,381,444
1,552,821 5,649,215
(130,722)
(169,063)
(299,785)
3,732,229
342,430
7,174,483
7,516,913
3,784,684
$ 211,708
$ 7,005,420 $
7,217,128
$ 7,516,913
M
CITY OF NEWPORT BEACH
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual
Assessment District Capital Projects Fund
For the Year Ended June 30, 1998
See Accompanying Accountants' Report
IN&I
1998
1997
Variance
Favorable
Budget
Actual
(Unfavorable)
Actual
Revenues:
Contributions
$ 6,825
$ 6,825
$ 1,216,693
Expenditures:
Capital Outlay
$ 230,454
137,547
92,907
1,086,143
Excess (Deficiency) of Revenues
Over (Under) Expenditures
(230,454)
(130,722)
99,732
130,550
Fund Balance, July 1
342,430
342,430
211,880
Fund Balance, June 30
$ 111,976
$ 211,708
$ 99,732
$ 342,430
See Accompanying Accountants' Report
IN&I
71
CITY OF NEWPORT BEACH
■
Statement of Revenues, Expenditures and Changes
in Fund Balance
Budget and Actual
■
CIOSA Construction Capital Projects Fund
For
the Year Ended June 30, 1998
■
1998
1997
Variance
.
Favorable
Budget Actual
(Unfavorable)
Actual
.
Revenues:
Revenue from use of money
and property
$ 329,951
$ 329,951
$ 164,751
.
Contributions
$ 3,000,000 916,260
(2,083,740)
8,000,000
Total Revenues
3,000,000 1,246,211
(1,753,789)
8,164,751
Expenditures:
Capital Outlay
7,106,043 1,415,274
5,690,769
4,563,072
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Excess (Deficiency) of Revenues
Over (Under) Expenditures
(4,106,043) (169,063)
3,936,980
3,601,679
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Fund Balance, July 1
7,174,483 7,174,483
3,572,804
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Fund Balance, June 30
$ 3,068,440 S 7,005,420
$ 3,936,980
$ 7,174,483
■
See Accompanying Accountants' Report.
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ENTERPRISE FUNDS
Enterprise Funds are used to account for City operations that are financed and
operated in a manner similar to private business enterprises. The objective of
segregating activities of this type is to identify the costs of providing the
services, and to finance them through user charges. City of Newport Beach
Enterprise funds are those listed below:
The Cannery Village Parking Fund is used to account for the revenues and expenses
of operating the Cannery Village parking facility.
The Water Fund is used to account for the activities associated with the transmission
and distribution of potable water by the City to its users.
The Wastewater Fund is used to account for the activities associated with providing
sewer services by the City to its users.
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73
CITY OF NEWPORT BEACH
Combining Balance Sheet
All Enterprise Funds
June 30, 1998
Assets
Current Assets:
Cash and investments
Accounts receivable and accrued revenues
Inventories of materials and supplies, at cost
Restricted assets - cash and investments
Total Current Assets
Fixed Assets:
Land . .
Structures
Equipment
Accumulated depreciation
Net Fixed Assets
Total Assets
Liabilities and Fund Equity
Current Liabilities:
Accounts payable and accrued liabilities,
Accrued payroll
Due to other funds
Deposits-,.—
Accrued interest payable
Bonds payable - current
Total Current Liabilities
Noncurrent liabilities:
Bonds payable`•
Total liabilities
Fund Equity:
Contributed capital
Retained Earnings
Total Fund Equity
Total Liabilities and Fund Equity
See Accompanying Accountants' Report.
74
Cannery
Viliage
Parking
Water Wastewater
$ 6,018,371 $ 1,458,097
2,904,641 531,333
1,733,718
10,656, 730 1,989,430
$ 1,039,163 2,016,450
107,471 65,345,016 35,243,909'
627,374 43,797
(41,794) (24,857,405) (23,333.087)
1,104,840 43,131,435 1 11,954,619.
$ 1,104,840 $ 53,788,165 $ 13;944,049.
$ 1,870,518 $ 154,109
43,664 16,109
$ 424,892
111,944
392,195
915,000
424,892, 3,333,321 170,218
13,645,000
424,892 16,978,321 170,218
6,044,944 9,758,953
679,948 30,764,900 4,014,878
679,948 36,809,844 13,773,831
$ 1,104,840 $ 53,788,165 $ 13,944,049
■
$ 7,476,468 $ 11,321,657
3,435,974 3,513,866
51,075
1,733,718 1,732,775
12,646,160
16,619,373
59,773
59,774
3,055,613
3,055,613
100,696,396
93,039,830
671,171
671,171
(48,232,286)
(46,589,894)
56,190,894
50,176,720
$ 68,837,054
$ 66,796,093
$ 2,024,627 $
3,000,623
59,773
59,774
424,892
510,751
111,944
88,174
392,195
415,711
915,000
875,000
3,928,431
4,950,033
13,645, 000 14, 560,000
17, 573,431 19, 510,033
15, 803, 897 14,206,087
35,459,726 33,079,973
51,263,623 47,286,060
$ 68,837,054 $ 66,796,093
ml
CITY OF NEWPORT BEACH
Combining Statement of Revenues, Expenses
and Changes in Retained Earnings
All Enterprise Funds
For the Year Ended June 30, 1998
Cannery
Village
Parking. Water Wastewater
Operating Revenues:
(41,347)
Interest income
438,800
Charges for services
19,116
$ 15,828,301
$ 2,770,106
Contributions
(784,390)
29,500
(5,452) .
Other
$ 85,859
181,495
Total Operating Revenues .
85,859
16,039,296
2,770,106
Operating Expenses:
Purchase: of water -
- --
4,952,040'
Salariesandwages
2,169,276
770,761
Depreciation -
-- 4,299-
- 1;368,771
817,022
Professional services
1,437;157
301,057
Maintenance and supplies
_ 652,756
341,368
Systems maintenance..
2;183,356
264,448
Other
955,860
Total, Operating Expenses
4,299
13,719,216
2,494,656
Operating Income
81,560
2,320,080
275,450
Nonoperating Revenues (Expenses):
(41,347)
Interest income
438,800
Other income'
19,116
Gain on sale of fixed assets
Interest expense
(784,390)
Other expense
(5,452) .
Total Nonoperating
Revenues(Expenses) (331,926
Income Before
Operating Transfers 81,560 - 1,988,154
Operating Transfers In
Operating Transfers Out
Total Operating Transfers
Net Income 81.560.
162,394
10,296
172,690
448,140
(96,754)
(41,347)
(96,754).
(41,347)
1,891,400
406,793
Retained Earnings, July 1 598,388. 28.873,500 3,608,085
Retained Earnings, June 30 $ 679,948 $ 30,764,900 $ 4,014,878
See Accompanying Accountants' Report.
W.
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Totals
1998
1997
$ 18,598,407
$ 19,519,692
29,500
186
267,354
652,919
18,895,261
20,172,611
(159,236)
(10,748)
4,952,040
8,584,291
2,940,037
2,677,813
2,190,092
2,031,575
1,738,214
1,993,246
994,124
833,560
2,447,804
1,478,731
955,860
453,208
16,218,171
18,052,424
2,677,090
2,120,187
601,194
730,989
29,412
89,498
(138,101)
186
(784,390)
(831,421)
(5,452)
2,123,688
(159,236)
(10,748)
2,517,854
2,109,439
14,249
(138,101)
(138,101)
14,249
2,379,753
2,123,688
33,079,973
30,956,285
$ 35,459,726
$ 33,079,973
77
CITYOF NEWPORT BEACH
Combining Statement of Cash Flows -All Enterprise Funds
For the Year Ended June 30, 1998
Cannery
Village
Parking
Water
Wastewater
.
Cash flows from operating activities
Operating income
$ 81,560. $
2,320,080
$
275,450
Adjustments to reconcile operating income
.
to net cash provided by operating activities:
Depreciation _
_ 4,299
1,368,771
817,022
Other revenue - - - - -- -
_
19,116
10,296
.
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable
179,348
(101,456)
(Increase) decrease in inventories of
1
■
materials and supplies, at cost
- -
- 51,075
- -
Increase(deerease)in accounts payable
(1,044,004)
68,007
Increase in accrued payroll
Decrease in due to other funds
(85,859)
Increase in deposits
23,770
_
Total adjustments
(81,560)
598,076
793,869
■
Net cash provided by operating activities
2,918,156
1,069,319
Cash flows from capital and related
■
financing activities:
. Operating transfers In
. Operating transfers Out
(96,754)
(41,347)
■
Net cash provided by (used for)
noncapital financing activities
(96,754)
(41,347)
•
Cash flows from - capital and related
financing activities:
4cquisitionofcaptal.assets
(4,211.,500),
(2,394,956)
.
Principal-Payment ..
(875,000)
Proceeds from sale of capital assets
Trustee Fees
(5,452)
.
Interest paid _
-
(807,906)
Net cash used for capital
and related financing activities
(5,899,858)
(2,394,956)
■
Cash flows from investing activities:.:-
- -
Interestoninvestments -
-
438,800
162,394
.
Net decrease in cash
and cash equivalents_
(2,639,656)
(1,204,590)
Cash and cash equivalents, July 1
10,391;745
2,662,687
■
Cash and cash equivalents, June 30
$ - $
7,752,089
$
1,458,097
Noncash Activities:
Contributed Capital
$ $
2,639,656
$
1,204,590
.
Capitalized interest
$ - $
984,450
$
613,360
See Accompanying Accountants' Report.
■
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Totals
1998 1997
$ 2,677,090 $ 2,120,187
2,190,092
29,412
77,892
51,075
(975,997)
(85,859)
23,770
1,310,385
3,987,475
(138,101)
2,031,575
89,498
(208,917)
(6,965)
11,390
10,130
(75,210)
3,296
1,854,797
3,974,984
14,249
(138,101) 14,249
(6;606,456) (8,582,928)
(875,000) (845;000)
186
(5,452)
(807,906) (854,130)
(8,294,814) (10,281,872)
601,194 730,989
(3,844,246) (5,561,650)
13, 054,432 18,616,082
$ 9,210,186 $ 13,054,432
$ 3,844,246 $ -
$ 1,597,810 $ -
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81
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82 .
CITY OF NEWPORT BEACH
Combining Balance Sheet
.
All Internal Service Funds
June 30, 1998
Insurance
Totals
Assets
Reserve
Equipment
1998
1997
■
Current Assets:
Cash and investments
$ $
662,245
$
662,245
$
1,168,598
Accrued revenue
8,024
8,024
Inventories of materials and
supplies, at cost
30,597
30,597
159,158
■
Total Current, Assets -
-
700,866
700,866
1,327,756
Fixed Assets:
■
Equipment. -
11,154,336
11,154,336
-
9;482,502 -
Accumulated depreciation -
(5,110,773)
(5,110,773)
(4,195,425)
•
Net Fixed Assets
6,043,563
.6,043,563
5,287,077
Total Assets
$ $
.6,744,429
$
6,744,429
$
6,614,833
■
Liabilities and Fund Equity
■
Current Liabilities:
Accounts payable and accrued liabilities
$ 166,599 $
106,142
$
272,741
$
678,981
Accrued payroll
23,483
19,169
42,652
23,483
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Due to other funds
66,742
66,742
686,288
Capital leases— current
454,475
454,475
536,852
Workers' compensation— current
2,100,000
2,100,000
1,900,000
■
General liability— current
1,200,000
1,200,000
700,000:'
Compensated absences— current
Total Current Liabilities
1,000,000
1,000;000
1,100,000
■
bd-
Noncurrent Liabilities:
Capital Leases -..
834,894
834,894
680,248
.
Workers' compensation
3,801;077
3,801,077
3,872,223
General liability,
2,651,196
2,651,196
1,714,151
Compensated absences
5,970,377
5,970,377
6,342,767
.
Total Noncurrent Liabilities
W
___T9757,T44-
Total Liabilities
16,979,474
1,414,680
18,394,154
18,234,993
.
Fund Equity:
Contributed Capital
Retained Earnings (Accumulated Deficit)
4,097,648
1,232,101
4,097,648
4,097,648
.
(16,979,474)
(15,747,373)
(15,717,808)
Total Fund Equity
(16,979,474)
5,329,749
(11,649,725)
(11,620,160)
■
Total Liabilities and Fund Equity
$ $
6,744,429
$
6,744,429
$
6,614,833
See Accompanying Accountants' Report.
■
82 .
83
CITY OF NEWPORT
BEACH
.
Combining Statement of Revenues,
Expenses
and Changes in Retained Earnings
All Internal Service Funds
■
For the Year Ended June 30, 1998
.
Charges for services
Insurance
Totals
Reserve
Equipment
1998
1997
Operating Revenues:
.
Charges for services
$ 4,316,863
$ 3,495,683
$ 7,812,546 $
8,029,635
Licenses, fees and permits
1,919
1,919
Other
2,476
8,334
10,810
187,614
•
Total Operating Revenues
4,319,339
3,505,936
7,825,275
8,217,249
■
Operating Expenses:
-
Salaries and wages
863,903
863,903
916,181
Depreciation
1,229,505
1,229,505
1,185,417
.
Professional services
57,082
57,082
1 75,213
Maintenance and supplies
481,546
481,546
396;279
Fleet parts and supplies
509,446
509,446
356,869
.
Workers' compensation
2,335,489
2,335,489
1,973,490
Claims and judgments
2,691,982
2,691,982
1,371,413
Disability
79,807
79,807
154,132
.
Compensated absences
886,672
886,672
1,793,631
Total Operating Expenses
5,993,950
3,141,482
9,135,432
.8,222,625
■
Operating Income (Loss)
(1,574,611)
364,454
(1,310,157)
(5,376)
■
Nonoperating Revenues (Expenses):
Intergovernmental revenue
33
351
384
144
Interest income
66,816
66,816
59,021
■
Gain on sale of fixed assets
47,794
47,794
103,495
Interest expense
(84,890)
(67,249)
(152,139)
(122,472)
.
Total Nonoperating Revenues
(84,857)
47,712
(37,145)
40,188
Income (Loss) Before
■
Operating Transfers
(1,759,468)
412,166
(1,347,302)
34,812
Operating transfers:
Operating transfers in
1,605,969
1,605,969 -
911,706
.
Operating transfers out
(288,232)
(288,232)
(250,000)
Total operating transfers
1,605,969
(288,232)
1,317,737
661,706
■
Net Income (Loss)
(153,499)
123,934
(29,565)
696,518
Retained Earnings (Accumulated
■
Deficit), July 1
(16,825,975)
1,108,167
(15,717,808)
(16,414,326)
Retained Earnings (Accumulated
Deficit), June 30
$ (15,979,474)
$ 1,232,101
$ (15,747,373) $
(15,717,808)
.
See Accompanying Accountants' Report.
83
CITY OF NEWPORT BEACH
Combining Statement of Cash Flows -All Internal Service Funds ■
For the Year Ended June 30, 1998
■
84 ■
■
Insurance
Totals
Reserve
Equipment
1998
1997
Cash flows from operating activities
.
Operating income (loss)
$ (1,674,611)
$ 364,454
$ (1,310,157)
$ (5,376)
Adjustments to reconcile operating income (loss) -
to net cash provided by operating activities:
.
Depreciation
1,229,505
1,229,505
1,185,417
Intergovernmental revenue
33
351
384
144
_
Changes in operatingassetsand liabilities'
-
_
-
■
(Increase) decrease in accrued revenue -- -
(8,024)
(8,024)
8,370
(Increase) decrease in inventories of materials
and supplies, at cost -
128,561
128,561
(12,810)
.
Decrease in accounts payable -
(320,464)
(85,776)
(406,240)
-. -' -. (161,982)
Increase(decrease)in accrued payroll -. -
-
19,169
19,169
(94,879)
Decrease in due to other funds
(619,546)
(619,546)
(583,877)
.
Increase in workers' compensation -
128,854
128,854
23,546
Increase in general liability
1,437,045
1,437,045
151.,095
Increase (decrease) in compensated absences
(472,390)
`_ (472,390)
208;919
.
Total Adjustments
1.53,532
1,283,786
1,437,318
723,143
Net cash provided by (used for) operating activities
(1,521,079)
1,648,240
127,161
717,767
■
Cash flows from noncapital financing activities:
Operating transfers from other funds
.1,605,969
1,605,969
911,706:
Operating transfers to other funds
(288,232)
(288,232)
(250,000)
■
Net cash provided by (used for)
noncapital financing activities
1,605,969
(288,232)
1,317,737
661,706
Cash flows from capital and related
■
financing activities:
Acquisition of capital assets
(1,426,739)
(1,426,739)
(744,764)
Principal payment
(594,946)
(594,946)
(536,852)
.
Proceeds from sale of capital assets
155,757
155,757
155,129
Interest paid -
(84,890)
(67,249)
(152,139)
(122,472)
Net cash used for capital and
.
- related financing activities- -
(84,890)
(1,933,177)
(2,018,067)
(1,248,959)
Cash flows from investing activities.
Interest on investments, - - -- - _
66,816
66,816
59,021
Net cash provided by investing activities
66,816
66,816
59,021
Net increase(decrease)in cash
■
and cash equivalents -
(506,353)
(506,353)
189,535
Cash and cash equivalents, July 1
1,168,598
1,168,598
979,063
.
Cash and cash equivalents, June 30 ..
$
.$ - 662,245
$ 662,245
$ 1,168,598
Noncash Activities:
Acquisition of by leases
-
$
$ 667,215
$ 667,215
$ 933,436
■
equipment capital
-
See Accompanying Accountants' Report.
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AGENCYFUNDS
Agency 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. City of Newport Beach Trust and Agency Funds are listed below:
0
The Deferred Compensation Fund is used to track the assets of the City's deferred
compensation plan for its employees. ■
The Special Assessment 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 Special Deposit Fund is used to account for special deposits held by the City in •
its fiduciary capacity. ■
The Business Improvement District Fund is used to account for monies collected
from local business districts for district property improvements and business ■
enhancement.
This page left blank intentionally.
85
CITY OF NEWPORT BEACH
Combining Balance Sheet
All Agency Funds
June 30, 1998
See Accompanying Accountants' Report
Special
Special
Business
Assessment
Deposit
Improv. Dist.
Totals
Fund
Fund
Fund
1998
1997
Assets:
Cash and investments
$
5,652,387
$
2,486,955
$
82,334
$
8,221,676
$
38,457,953
Restricted assets - cash
and investments
1,712,869
1,712,869
1,886,590
Total Assets "- - -
$
7,365,256
$.,
.2,486,955
$
82,334
$
9,934,545
$
40 344,543
Liabilities: -
-
Due to bondholders '
$
7,365,256
$
7,365,256
$
7,543;703
Due to others
$.
2,486,955
$
82,334
2,569,289
2,447,252 .
Deferred compensation
30,353,588
Total Liabilities
$
7,365,256
$
'2,486,955
$
. 82,334
S
9,934,545
$
40,344,543
See Accompanying Accountants' Report
■ CITY OF NEWPORT BEACH
Combining Statement of Changes in Assets and Liabilities
All Agency Funds
■ For the Year Ended June 30, 1998
Balance
June 30, 1997
Additions
Balance
Deductions June 30, 1998
. Totals - All Agency Funds
Special Assessment:
Cash and investments
$
8,104,365
$
3,416,558
$
(3,299,247)
$
Assets
Restricted assets - cash
Cash and investments
$ 5,657,113
$
2,844,434
$
(2,849,160)
$
5,652,387
.
Restricted assets - cash
1,712,869
.
Total Assets
$
9,990,955
$
3,625,348
and investments
1,886,590
$
208,790
■
(382,511)
1,712,869
■
Total Assets
$ 7,543,703
$
3,053,224
$
(3,231,671)
$
7,365,256
$
Liabilities
$
(3,231,671)
$
7,365,256
Due to others
■
Due to bondholders
$ 7,543,703
$
3,053,224
$
(3,231,671)
$
7,365,256
■
Special Deposit:
Total Liabilities
$
9,990,955
$
3,625,348
Assets
(3,681,758)
$
9,934,545
•
Cash and investments
$ 2,421,052
$
422,003
$
(356,100)
$
2,486,955
.
Liabilities
87
Due to others
$ 2,421,052
$
422,003
$
(356,100)
$
2,486,955
Business Improvement District:
■
Assets
Cash and investments
$ 26,200
$
150,121
$
(93,987)
$
82,334
Liabilities
Due to others
$ 26,200
$
150,121
$
(93,987)
$
82,334
. Totals - All Agency Funds
Assets
Cash and investments
$
8,104,365
$
3,416,558
$
(3,299,247)
$
8,221,676
Restricted assets - cash
and investments
1,886,590
208,790
(382,511)
1,712,869
.
Total Assets
$
9,990,955
$
3,625,348
$
(3,681,758)
$
9,934,545
■
Liabilities
Due to bondholders
$
7,543,703
$
3,053,224
$
(3,231,671)
$
7,365,256
Due to others
2,447,252
572,124
(450,087)
2,569,289
■
Total Liabilities
$
9,990,955
$
3,625,348
$
(3,681,758)
$
9,934,545
•
See Accompanying Accountants'
Report.
.
87
,' r
��� '
f � ,� � �
1 � �� \ �
1 � �'
�. _ ; ; � � Account �
�:�� .■ G�au�s �
� �
1
1
.�
1
1
W �.
1-- --
1
1
1 1
1��t
t1 't
1.
_��_ 1
1
1
1
1
1
I
This page left blank intentionally.
99
CITY OF NEWPORT BEACH
Comparative Schedule of General Fixed Assets
June 30, 199B
General Fixed Assets
Land
Structures
Equipment
Total General Fixed Assets
Investment in General Fixed Assets
Total Investment in Fixed Assets
* Sources are not readily available.
See Accompanying Accountants' Report.
M
1998 1997
$ 27,698,922 $ 27,698,922
42,307,827 41,683,507
12, 220,165 11,239, 093
$ 82,226,914
$
80,621,522
$ 82,226,914
$ `
80,621,522
$ 82,226,914
$
80,621,522
■
CITY OF NEWPORT BEACH
General Long -Term Debt Account Group
Comparative Schedule of General Long -Term Debt
June 30, 1998
Amount Available and to be Provided for the
Payment of General Long -Term Debt
Amount available in debt service fund
Amount to be provided for the payment
of general long -term debt
General Long -Term Debt Payable
Certificates of participation payable
Capitalized leases
Note payable
See Accompanying Accountants' Report.
91
1998 1997
$ 579,814
$
579,851
10,436,206
11,026,880
$ 11,016,020
$
11,606,731
$ 6,780,000
$
6,940,000
1,532,071
1,853,027
2,703,949
2,813,704.
$ 11,016,020
$
11,606,731
0
. CITY OF NEWPORT BEACH
Miscellaneous Statistics
June 30, 1998
• General Information
. Date of Incorportation ...................................................... ............................... ...........................1906
Form of Government .............................................................. ...............................Council -Manager
.
Population
Permanent.......................................................................
...............................
.........................72,623
Summer.......... .....................................................................................................
.... .............. 100,000
.
Tourist .......................................................................
...............................
20,000 to 100,000 per day
Housingunits.. ........................................................................................................................
36,807
.
Occupancy Factor per dwelling unit ..........................................................
............................... 2.207
Area
Square Miles
Acres
■
Land ..................... ..................................................
14. 30 .................................................
..... 9,155.2
Bay............................................ ...............................
2.04 .........................
.............................1, 305.6
■
Ocean .............. .. .....................................................
20. 00 ....................................................
12,800.0
Total............. ............................... ..........................36.05
........ ..................
.......................23,129.6
.
Population Density
Per square mile .......................... .......................5,078.53
Per acre .............
...........................7.93
Recreational Area
Acres .
OceanWater ......... ....................................................................................
........... ................... 12,800
.
Harbor Waters ...................................................
...... .. ................. ..............................
................. 1,306
Parks.................................................................................
...............................
............................156
Beaches.............................................................................
...............................
............................224 .
Total..................... ............................................................................................
____ ........... 14,465.
.
Water Frontage
Miles
Ocean................................................................................
...............................
...........................7.21
Harbor........................................................................................................
TotalWater Frontage
............................... 35.94
.......................................................
...............................
..........................43.15
.
Newport Harbor
Boats................................................................................
...............................
..........................9,000
Residential... ..... .............................................................................
.........................................
1,230
.
Commercial Slips and Side Ties ......................................
...............................
..........................2,119
BayMoorings .............. .. ...............................................................................................
............ 1,221
•
Public Safety
Police
Fire & Marine
Numberof Stations ..................... ..............................1
......................................
..............................8
.
Number of Personnel .................. ............................212
... ...............................
............................122
.
Unaudited — See Accompanying Accountants' Report.
■
93
0
Fiscal General Public Public Community Community Capital .Debt .
Year Government
Safety
Works
Governmental Revenues by Source
Sen-ices
OoUay
Service
Total
1988 -1989 j 5,248,695 $
22,014,671 $
(Last Ten Fiscal Years)
$ 3,776,328 $
5,996,335 S
11,15926
$
59,90959.5
1989 -1990 5,365,259
26,729,452
13,117,444
Fines,
6,609,117
23611.143
.
1990 -1991 5,274,572
Licenses,
In ter - Charges
Fodritures
R,weuue from
18,768,787
75,668,929
Fiscal
19911992 2,937,016
Fees mid
governmental for
acid
Use of :\loney
16,034,084
74,612,372
Year
Taxes
Permits
Revenue Services
Pemdlies
and Propc w
Other
'Total
.
1988 -1989 5
37,245,279 $
2,517,205
$ 6,858,019 j 4,821,564 $
2,964,864
5 8,391,781 j
3,649,089 $
66,447,801
76,054,587
1989 -1990
38,389,789
2,653,730
16,537,544 41899,970
3,376570
9,766,006
2,441,088
78,064,697
.
1990- 1991
40,479,235
2,808,179
11,029,004 3,466,023
3,114.983
9999,416
3555699
74,452,539
76,022,994
1991 - 1992
40,466,232
1,903,044
10,819,561 4,609,812
:5,053,246
9,611,524
2,722,037
73185,456
■
1992 -1993
38,471,775
2,006,805
7,621,643 4,703,200
7,582,969
9,469,060
1.031,526
65,886,978_
95,079,568
1993
39,809,139
2,247,233
■
-1994
(1) Includes General, Special Revenue, Capital Projects and
Debt Service Funds.
8,993,289 5,077,369
2,706,194
8,660,599
1,841,189
69,335,012
(2) Historical data for Debt Service expenditures
19941995
39,719,830
2,409,523
10,704,000 5,109,513
3,156.53(!
9,676,426
i 089,385
7118651207
1995
42,853,480
■
Source: City Administrative Services Department
-1996
4,851,571
8,315,543 6,278,416
2,855,063
11,000,272
6,540,9 B
82,695,258
1996- 1997
44,523,935
4,081,509
11871,417 7,185,210
2,529,015
10,497,715
11)208,241
90,897,042
1997 -1998
49,385,380
7,303,302
19,656,742 8.314,830
2,5.'3,575
11. Q2,977
1,593,409
100,250,215
.
(1) Includes General, Special Revenue, Debt Service and Capital Projects Funds.
.
Governmental Expenditures by Function
(1)
■
(Last Ten Fiscal Years)
Fiscal General Public Public Community Community Capital .Debt .
Year Government
Safety
Works
Development
Sen-ices
OoUay
Service
Total
1988 -1989 j 5,248,695 $
22,014,671 $
11,697,640
$ 3,776,328 $
5,996,335 S
11,15926
$
59,90959.5
1989 -1990 5,365,259
26,729,452
13,117,444
2,873,185
6,609,117
23611.143
78,306,200
1990 -1991 5,274,572
26911,630
14,456,890
2,973,750
7,263,300
18,768,787
75,668,929
19911992 2,937,016
30,987,412
12,372,598
3,411,623
8,869,639
16,034,084
74,612,372
1992 -1993 4359,857
31,209,589
12,779,215
3,636,092
8,520,758
12,220,226 $
1.,155,407 (2)
73,881,144
.
1993 -1994 4,607.009
32,330,338
15,018,898
3,406,712
5,910,752
13605,703
1,175,175
76,054,587
19941995 5,505,610
33,389,922
14,661,343
3,336,672
5,857,959
8,523,773
1,550,294
72,825,573
■
1995 -1996 5,442,862
34,571,273
14,779,614
2,952,247
5,916,194
11,291,759
1,069,045
76,022,994
1996 -1997 5,673,321
35,647,247
15,502,095
3,329,545
6,585,335
20696,487
890,609
88,324,639
1997 -1998 6,790,020
39,168,311
16,579,275
3475,998
6916,999
20,849,651
1_99,284
95,079,568
■
(1) Includes General, Special Revenue, Capital Projects and
Debt Service Funds.
(2) Historical data for Debt Service expenditures
is unavailable prior to fiscal year
1992 -93.
■
Source: City Administrative Services Department
Unaudited -See Accompanying Accountants' Report. .
94
■
■
■
■
■
■
$120
$100
$80
it
n
0
A
$60
C
O
$40
$20
$0
Governmental Revenues and Expenditures
1988-89 1989-90 1990 -91 1991 -92 1992-93 1993-94 1994-95 1995 -96 1996 -97 1997 -98
11%
3%
8
Governmental Revenues by Source
(Fiscal Year 1997 -98)
A00 ,
I-110
20%
■ Taxes
• Licenses & Permits
• Intergovernmental
• Charges for Services
• Fines & Forfeitures
■ U se of Mo ney & Property
■Miscellaneous
Governmental Expenditures by Function
(Fiscal Year 1997-98)
22%
-7u/
Ilo 4% 170 /n
95
■ General Government
■ Public Safety
■ Public Works
• Community Development
• Culture and Recreation
• Capital Outlay
• Debt Service
I
Asssessed and Estimated Actual Value e><Taxable Property
(Last Ten Fiscal Years)
Total
Fiscal Secured Public Unsecured Assessed & Estimated
Year Valuation Utility Valuation Valuation
9,154,039,846
9,897,224,470
10,909,093,905
11,594,170,910
12,076,539,722
12,045,049,942
11,864,902,139
11,804,599,524
11,909,533,803
12330,205,468
■
■
■
■
Fiscal
Year
Total
Current
Levy
Secured Property Tax Levies and Collections
(Last Ten Fiscal Yeats)
Total Percent DeLinquent
Current of Levv ;'as
Collections Collected Collections
Toral
Collections
of Total Tax
Collections
Total Levy
1988 -1989 $
8,463,563,058 $
575,220
(1)
$ c8K )01,568 3
1989 -1990
9,120,361,600
575,220
(1)
7176,287,650
1990 -1991
10,013,611,946
575,220
(1)
894,906,739
1991 -1992
10,583,498,762
354,820
(1)
1,010,317,328
1992 -1993
11,182,809,052
354,820
(1)
893,375,850
1993 -1994
11,179,271,032
354,820
(1)
865,424,090
1994 -1995
11,178,202,789
354,820
(1)
686,344,530
1995 -1996
11,078,301,482
354,820
(1)
725,943,222
1996 -1997
11,154,286,162
354,820
(1)
;54_,892,821
1997 -1998
11,551,641,504
354,820
(1)
'778,209,144
(1) Effective FY 1988
-89, public utility values have decreased
due.
to
.9132890 snd A6454 transferring
the public utility values
to a county -wide tar rate area.
1993 -1994
17,870,028
(1) 17,131,159
9,154,039,846
9,897,224,470
10,909,093,905
11,594,170,910
12,076,539,722
12,045,049,942
11,864,902,139
11,804,599,524
11,909,533,803
12330,205,468
■
■
■
■
Fiscal
Year
Total
Current
Levy
Secured Property Tax Levies and Collections
(Last Ten Fiscal Yeats)
Total Percent DeLinquent
Current of Levv ;'as
Collections Collected Collections
Toral
Collections
of Total Tax
Collections
Total Levy
■
1988 -1989 $
17,308,591
$ 16,678,689
96.30%, $
432,.523 3
17,111,212
98.86%
1989 -1990
18,962,055
'18,1.19,326
95.56'%,
3921912
18,512,238
97.63%
1990 -1991
21,031,117
19,863,098
94.45%
= 133,571
20,296,069
96.51%
°
1991 -1992
21,516,647
21,255,177
98.78 /c
504,000
21,759,177
101.13%
1992 -1993
18,859,889
(1) 18,508,590
98.14 ° /,,
5,36,760
19,396,649
102.85%
.
1993 -1994
17,870,028
(1) 17,131,159
95.87/,
526,025
17,657,184
98.81%
1994 -1995
17,730,237
(1) 17,105,142 (2)
96.47%
409,355 (2)
17,514,497
98.78%
.
1995 -1996
17,843,233
(1) 17,432,840
97.70 ° /a
368,913
17,801,753
99.77%
1996 -1997
20,563,561
20,096,688
97.7S%
897,670
20,994,358
102.09%
1997 -1998
21,144,504
20,472,716
96.82°/,
1,040,120
21,512,836
101.74%
■
(1) Effective FY92/93- FY95/96, Orange County reduced Secured Property Tax Levy as a result of the State Budget
Process.
(2) Funds were withheld due to the Orange County Bankruptcy.
■
Source: County of Orange Auditor
- Controller's Office
Unaudited -See Accompanying Accountants' Report.
.
96
■
■
■
■
$12,o0n
m $IU N
m
D
Ca S9,Wo
y
o,
5 S7,SO0
C
0
m $6A00
$4,500
� $3,000
F
$1,W,
S0
$ZS,(H%)
$20,M)
gm
G
`o
e$1s,0a1
0 5100)(1
d
0
V
A
F 55,tKKi
Total Assessed Valuation / Property Tax Collections
(lase Ten Fiscal Years)
M Total Assessed Valuation
t Property Tax Collections
988 -89 1989 -90 1990 -91 1991 -92 1992-93 1993 -94 1994 -95 1995 -96 1996 -97 1997 -98
Total Property Tax Collections / Delinquencies
(Test Ten Fiscal Pears)
1988.89 1989 -90 1990.91 1991 -92 1992 -93 1993 -94 1994-95 1995 -96 1996 -97 1997 -98
97
$25,000
C
$20sm
Q
0
a
s1s,0oo g
d
$10,000 p
R
F
c
55,000
so
S1,ak)
$i (I(lU ^d
0
A
0
581111
a
$400
cg
5
c
$200 G
Constnrction Activity
(Last Ten Fiscal Years) .
Fiscal
Building Permits
Percentage
Estimated
Percentage
■
Year
Issued
Change
Valuation
Change
1988 -1989
9,228
-1.17%
194,6155,287
61.520/0
1989 - 1990
8,800
-4.64%
118,087,775
- 39.33%
1994 4,193,643
.
1995 4,219,849
1996 3,560,374
■
1990 -1991
7,600
- 13.64`.'/0
110,500,000
-6.43%
1991 -1992
7,268
- 4.37%
77,413,996
- 29.94%
■
1992 -1993
7,251
-0.23%
72,170,274
- 6.77%
1993 -1994
6,986
-3.65%
: 70,339,522
-254%
.
1994 -1995
7,672
9.8.1%
'79,691,510
13.30%
1995 -1996
8,302
8.21%
145,700,839
82.91%
1996 -1997
9,085
9.43%
21131944,317
39.92%
1997 -1998
10,332
13.73'./o
224,507,349
10.08%
Source: City Building and Planning Department. ■
•
Bank Deposits
(Last Ten Fiscal Years)
.
(thousands)
Calendar Year Bank Deposits
.
1988 5 6,529,897
1989 6,631,511
1990 6,971 424
1991 4,331,692
1992 4,359,067
1993 4,582,022
1994 4,193,643
.
1995 4,219,849
1996 3,560,374
1997 3,251,245
■
1998 data for bank deposits will not be available until 12 -31 -98
Source: The Findley Reports on California Financial Insitutions
.
98
■
i
■
■
$250
n $200
0
A
w
0
c
° $150
G'
$100
0
N
CJ $50
$Q
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
1988
Estimated Value of Construction / Number of Building Permits
(Last Ten Fiscal Yeats)
12,000
10,000
8,000 m
m
a
6,000 `o
v
a
A
a
4,000 z
2,000
0
1988 -89 1989 -90 1990 -91 1991 -92 1992 -93 1'M3 -94 1994 -95 1995 -96 1996 -97 1997 -98
Bank Deposits
(Millions of DoHl )
1989 1990 1991 1992 1991, 1994 1995 1996 1997
99
Property Tax Rates -- Direct and Overlapp•in, (Governsuents
School
Districts
County
Improvement
County Flood
Control
(Per $1001 of Assessed Vaiva)
Metro Water
District
(List Ten Fiscal Years)
.
Fiscal
Year
School
Districts
County
Improvement
County Flood
Control
COW rty, City
& School Levy
Metro Water
District
Total
.
1988 -1989
3 0.00852
$ 0.00022 $
0.00111
$ 1.000011
$ 0.01100 5
1.02085
.
1989 -1990
0.00826
0.00017
0.00093
1.00000
0.01210
1.02146
1990 -1991
0.00252
0.00016
0.00082
;:00000
0.00970
1.01320
1991 -1992
0.00231
0.00012
0.00063
190000
0.00744
1.01050
■
1992 -1993
0.00239
0.00013
0.00065
i WOW
0.01171
1101488
1993 -1994
0.00000
0.00011
0.00067
190000
0.00326
1.00404
■
1994 -1995
0.00000
0.00013
0.00037
1.00000
0.00851
1.00931
1995 -1996.
0.00000
0.00012
0.00000
1.00000
0.00890
1.00902
1996- 1997
0.00000
0.00000
0.00000
1.00000
0.00857
1.00857
1997 -1998
0.00000
0.00000
0.00000
[.100000
0.00890
1.00890
■
Source: County
of Orange Auditor
- Controller's Office
■
Computation of Legal Debt. Margin
June 30;1998
Total assessed value of all real & personal property $121330,205,468 (1) .
Debt limit percentage 15%
Total debt limit $1,849,530,820 ■
Amount of debt applicable to debt limit $6,780,000 ■
Legal debt margin $1,842,750,820
■
(1) The fiscal year 1998 debt limitis based on assessed value being equiv,dcnt to 100% of .
market value.
Source: City Administrative Services Department
Unaudited - See Accompanying Accountants' Report. ■
100
0
0
CITY OF NEWPORT BEACH
Principal Taxpayers
. June 30, 1998
. Property Tax
(listed alphabetically)
1997 -98
Assesse Percent
Principal Taxer Type of Business Valuation of Total 1
•
Downey Savings & Loan
Financial
$
42,208,579
0.37%
.
HMH Properties, Inc.
Real Estate
$
62,492,011
0.54%
Hughes Aircraft Company
Aerospace
$
56,286,804
0.49%
Irvine Apartment Communities
Real Estate
$
185,805,423
1.61%
.
Irvine Company
Real Estate
$
710,299,311
6.15%
Irvine Company of W Va
Real Estate
$
117,094,791
1.01%
.
Koll Center Newport Number 14
Office Buildings
$
36,346,112
0.31%
Pacific Mutual Life Insurance Co.
Life Insurance
$
33,054,130
0.29%
•
Park Newport Land Ltd.
Real Estate
$
54,598,830
0.47%
.
Rockwell Semiconductor Systems Inc.
Aerospace
$
554,699,772
4.80%
Total Top Ten Principal Tax Payers
$
1,852,885,763
16.04%
■
■ (1) Percentange of total secured assessed valuation.
Unaudited -See Accompanying Accountants' Report.
■
Source: HdL, Coren and Cone Co.
■ 101
Schedule of Direct and Overlapping Bonded Debt
June 30, 1998
0
1997.98 Assessed Valuation:
19.575 %
$12,618,390,743
Irvine Ranch Water District Improvement District #106
8.222 %
992,365
■
DIRECT BONDED DEBT:
% Applicable
Debt 6/30/98
Irvine Ranch Water District Improvement District #261
18.358 %
129,789
•
City of Newport Beach 1911 Act Bonds
100.000%
283,420
■
City of Newport Beach 1915 Act Bonds
100.000 %
$2,667,001
.
City of Newport Beach Special Improvement District No. 95.1
100.000 %
15,210,000
.
Total Direct Bonded Debt
$18,160,421
■
OVERLAPPING BONDED DEBT:
Metropolitan Water District 1.411 % $17,613,541 ■
Irvine Ranch Water District Improvement District #206
19.575 %
2,145,420
Irvine Ranch Water District Improvement District #106
8.222 %
992,365
■
Irvine Ranch Water District Improvement District #161
9.064 %
41,693
Irvine Ranch Water District Improvement District #261
18.358 %
129,789
Irvine Ranch Water District Improvement District #140
0.015%
3,397
■
Irvine Ranch Water District Improvement District #240
0.014 %
5,765
Irvine Unified School District
0.004%
120
.
Total Overlapping Bonded Debt
$20,931,970
TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT (1) $39,092,391 ■
Ratios to Assessed Valuation: .
Direct Debt 0.14%
Total Gross Debt 0.31%
Note: (1) Reflects general obligation debt being repaid through voter- approved indebtedness. It •
excludes revenue, mortgage revenue, tax allocation bonds, interim financing obligations,
non - bonded capital lease obligations and certificates of participation. .
Source: HdL Coren & Cone, Orange County Assessor Combined 1997/98 Lien Date Tax Rolls .
Unaudited -See Accompanying Accountants' Report.
102 0
Revenue Bond Coverage
(Last Ten Fiscal Years) (3)
.
Net Revenue
Fiscal Gross Operating Available for
Debt Service Requirements
Year Revenues (I) Expenses (2) Debt Service
Principal
Interest
Total
Coverage
1994 -1995 $ 14,817,854 $ 11,471,118 $ 3,346,736 $
-
$ 811,037
$ 811,037
7.27
.
1995 -1996 16,145,307 13,220,028 2,925,279
820,000
898,878
1,258,420
2.32
1996 -1997 18,221,967 14,651,987 3,569,980
845,000
854,130
1,699,130
2.10
1997 -1998 16,497,212 12,350,445 4,146,767
875,000
784,390
1,659,390
2.50
■
(1) Total revenues includes interest and intergovernmental revenues.
(2) Total operating expense exclusive of depreciation.
■
(3) No revenue bonds were issued prior to fiscal year 1994 -95.
Unaudited -See Accompanying Accountants' Report.
■
■
■
■
H1191