HomeMy WebLinkAboutCity of Huntington Beach - Public Financial Report
CITY OF
HUNTINGTON BEACH
California
Popular Annual Financial Report
For The Year Ended June 30, 2021
City of Huntington beach, California Elected officials
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From left to right: City Attorney Michael Gates, Councilmember Natalie Moser, Mayor Barbara Delgleize,
Mayor Pro Tem Mike Posey, Councilmember Dan Kalmick, Councilmember Kim Carr, Councilmem-
ber Rhonda Bolton, Councilmember Erik Peterson, City Treasurer Alisa Backstrom
REPORT CONTENTS
CITY PROFILE 5 CAPITAL ASSETS 10
GOVERNMENTAL FUNDS 15-17
LOCAL ECONOMY 6 INVESTMENT PORTFOLIO 11 BUSINESS-TYPE FUNDS 18
COVID-19 RECOVERY 7 STATEMENT OF NET POSITION 12 EXPLANATION OF
ACCOUNTING TERMS
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CITY HIGHLIGHTS 8 STATEMENT OF ACTIVITIES -
EXPENSES
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CITY DEBT 9 STATEMENT OF ACTIVITIES -
REVENUES
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Property Tax Rate 1.09391% (varies by tax rate area)
Unemployment Rate 4.70%
Fitch Bond Rating AAA
S&P Bond Rating AA and AA-
Property Tax Revenue $99,958,000
Total City Debt $474,324,000
City Net Position $691,730,000
Median Age 41.29 Years Old
Average Household Size 2.56
Average Home Value $803,400
MESSAGE FROM THE CHIEF FINANCIAL OFFICER
Dear Reader:
I am pleased to share with you the City of Huntington Beach (City) Popular Annual Financial Report (PAFR). The
PAFR, also referred to as the “Citizens’ Report”, summarizes the complex financial information reported in the
City’s Annual Comprehensive Financial Report (ACFR) into a simplified, easy to read format. This report provides
an overview of the City’s financial position, including sources of revenues and expenditures. In addition to key financial data, the PAFR also includes information regarding our local economy, City’s efforts to respond to the
threats and uncertainties of the novel coronavirus (COVID-19) and important City highlights.
In spite of the challenges brought on by the pandemic, our community has shown tremendous resilience and the
City has continued its commitment to maintain high service levels to its residents, businesses and visitors. Fiscal
Year 2020/21 represents a full fiscal year's economic impact of the COVID-19 global pandemic. My hope is that
this year’s PAFR reflects our prudent and effective use of your tax dollars as to continue providing a safe
environment for our businesses and citizens to thrive.
I would like to take this opportunity, on behalf of the City of Huntington Beach, to thank the citizens of this City
for their ongoing commitment and dedication. It has been challenging to navigate the ever-changing landscape of
our daily lives, but I have seen the resilience of our community and have hope that the challenges that we faced in
the prior fiscal year have not only made us stronger, but have also brought us closer together.
I would also like to thank the City Council, City Manager, and City Departments. Under their tremendous
leadership and support, I consistently witness the excellence and hard work displayed by each member of the City’s
team. Together, we strive to fulfill our duty “To serve exceptionally, inspiring pride in our Huntington Beach community through a fanatical focus on excellence by being active caretakers of our unique, people-focused
Huntington Beach culture,” especially when times are hard. I am confident that Huntington Beach will continue to
be one of greatest cities in which to work, live and play.
Dahle Bulosan, CPA
Chief Financial Officer
Huntington Beach by the Numbers
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POPULAR ANNUAL FINANCIAL REPORT
This report provides an overview of the City’s financial position, including sources of revenues and expenditures, as
well as economic information about the community. The PAFR of the City of Huntington Beach is published to
increase public awareness about the City’s financial condition. It is our goal that this report is easy to understand.
The PAFR summarizes the financial activities of the City of Huntington Beach’s governmental and proprietary
funds and draws its information from the Fiscal Year 2020/21 ACFR. The ACFR was prepared in conformance
with generally accepted accounting principles (GAAP) and includes financial statements audited by Davis Farr
LLP, Certified Public Accountants. The City received an unmodified (or clean) opinion that the financial statements
present fairly, in all material respects, the respective financial position of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City. The amounts within the ACFR were arrived at by employing accrual and modified accrual basis accounting techniques as prescribed by the
Governmental Accounting Standards Board (GASB).
Government-wide data on pages 12-14 is presented similarly to a consolidated financial statement for a private
business (accrual basis). Governmental funds financial information on pages 15-17 is presented under standard gov-ernmental accounting rules (modified accrual basis). Modified accrual accounting is a governmental accounting
method based on revenues being recognized in the period when they become available and measurable (known).
This PAFR is unaudited and is presented on a non-GAAP basis. The differences between the GAAP basis presenta-
tion in the ACFR and the non-GAAP presentation in the PAFR are as follows: the use of prescribed accounting
methods and financial statement formats; the presentation of segregated funds; and the disclosure of all material
financial and non-financial matters in notes to the financial statements. Individuals who desire to review the audited
GAAP-based, full disclosure financial statements should refer to the City’s ACFR, which is available on the City’s
website at https://www.huntingtonbeachca.gov/government/departments/finance/budget.cfm, or by contacting the
Finance Department at 2000 Main Street, Huntington Beach, California, 92648, by phone at (714) 536-5630, or by
e-mail at tvi@surfcity-hb.org.
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ABOUT HUNTINGTON BEACH
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CITY PROFILE
The City of Huntington Beach is home to a thriving beach community, located on the Orange County coast, 35
miles south of Los Angeles and 90 miles north of San Diego. With a population of 198,039 residents, it is known as
Surf City due to its abundance of beaches; the year-round sunny, warm Mediterranean climate; and its casual
lifestyle. With over 10 miles of coastline and iconic pier spanning 1,850 feet in length - one of the longest piers on
the West Coast - Huntington Beach plays host to millions of visitors annually. In addition to its internationally
recognized beaches, Huntington Beach is recognized as a prime location to live, work and play, ranking #1 in the nation for “Quality of City Services” and #18 for “Best-Run City in America Poll” by WalletHub (June 2020) and
one of the top three “Best Cities to Live In” by the Orange County Register for the past five consecutive years.
Huntington Beach was also ranked the 9th Happiest City in America by WalletHub (March 2022).
Huntington Beach attracts numerous national events
including the Van’s U.S. Open Surfing, Surf City USA
Marathon, and, the Great Pacific Airshow. The City
also hosts a variety of other exciting events for fami-lies and visitors such as the annual Concours d’Ele-
gance, Pacific Islander Festival, Cherry Blossom Festi-
val, Civil War Days, and, of course, the City’s most
iconic event—the Fourth of July Fireworks Show and
Parade. In 2021, Fourth of July Fireworks Show and
Parade added all-new Amusements Area, featuring a
75-foot tall ferris wheel, 90-foot Monster Slide, tradi-
tional carnival games, and other family-friendly activi-
ties. To add to the list of events, the City unveiled a
new ice rink in Pier Plaza, kicking off its inaugural
Winter Wonderland event. Surf City Winter Wonder-land transformed downtown Huntington Beach into a
holiday destination by providing various winter activi-
ties, such as ice-skating, live entertainment, festive
programming, and more.
Founded in the late 1880s, Huntington Beach was incor-
porated as a Charter City in 1909. Huntington Beach has
a Council/Manager form of government wherein seven City Council members are elected to four-year terms, and
the Mayor is filled on a rotating basis from the incumbent
Council Members. The City Attorney, City Clerk and
City Treasurer positions are also elected and serve four-
year terms. The City of Huntington Beach is a full-service
city including police, fire, public works, and other key
functional departments with a dedicated and talented team
of over 900 full-time equivalent employees.
Demographically, the City benefits from higher education
levels, median incomes, and home values as compared with the State. The City boasts an annual median house-
hold income of $91,318, 51% higher than the United
States, 28% higher than the State of California, and 6%
higher than Orange County.
LOCAL ECONOMY
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Huntington Beach is one of the leading commercial and industrial centers in Southern California. As the fourth
largest city in Orange County, and the 23rd largest in California in terms of population. With the easing of the
restrictions put in place as a result of the COVID-19 pandemic, the City’s economy has seen much improvement
with the unemployment rate decreasing from 8.6 percent to 4.7 percent. The City’s labor force continues to be
positioned to maintain the City’s strong tax base.
Huntington Beach has numerous demographic factors in its favor:
Personal median incomes greater than State and County averages
A stable property tax base
A diversified sales tax base
The Huntington Beach business community is well-diversified with no single industry or business dominating
the local economy. Local businesses include aerospace and high technology, petroleum, manufacturing,
computer hardware and software, financial and business services, hotel and tourism, and large-scale retailers.
The top five principal employers in the City are Boeing, Safran Cabin Inc., No Ordinary Moments, Hyatt Regency Huntington Beach, and Boardriders Wholesale LLC .
As the economy continues to recover from the
impacts of the COVID-19 pandemic and public
health guidelines become less restrictive, revenue
sources such as Sales Tax and Transient
Occupancy Tax are anticipated to rebound in
coming fiscal years. In addition, recovering
unemployment rates, rising consumer confidence,
and recovery in the hospitality and travel
industries are expected to improve Huntington
Beach’s economy; however, continuing volatility
in the financial and equity markets, along with the
rapidly changing economic picture and the length and continuing scope of the COVID-19
pandemic, adds a layer of uncertainty to the
City’s financial projections.
CITY OF HUNTINGTON BEACH
Composition of Sales Tax Revenue
Fiscal Year 2020/21
Building and
Construction7%
Business and
Industry
9%
Fuel and Service
Stations
6%
Restaurants and Hotels
12%
Autos and Transportation
23%
General
Consumer
Goods
19%
Other
6%
State and County
Pools
18%
COVID-19 RECOVERY
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Although the immediate danger of the novel coronavirus starts to wane, many families, businesses, schools, and
governments seek assistance with recovery efforts. Listed below are a few of the programs put in place by the City
to assist with the challenges brought on by the pandemic.
Navigation Center
To address the spread of COVID-19 with the population of persons experiencing homelessness, the City was
given CARES federal grants of $3.0 million from Orange County Health Care Agency and $1.7 million from
the State. The City engaged in an extensive site selection process to build a navigation center to temporarily shelter
the homeless in our community. After an expansive search and comprehensive community outreach, the 174-bed
shelter located at 17642 Beach Boulevard was identified to best address the needs of the homeless population. The
Navigation Center opened its doors on December 2020, operated by Mercy House. The Center can accommodate
homeless adults including their animals and will provide access to vital services that will help them on the path
towards housing security. Each potential resident will be screened and upon admission to the Center, will receive
clean clothes, prepared meals, access to laundry facilities, private restrooms and 24-hour security. Resources for
healthcare, dental and behavioral services will also be made available. In addition, Mercy House staff will assist with
finding employment, permanent housing, and assistance to overcome substance abuse addictions, should it apply.
The goal of the Center is to provide opportunities and resources to permanently transition their residents to a more
stable and secure way of living and off the streets.
For more information please visit their website here : https://www.hbhomelesssolutions.com
www. HBready.com
Www.HBready.com provides the community a central place where they can go to better understand the health risk
posed by COVID-19, see the City’s response plan and other resources offered to residents and businesses to combat
the health crisis and financial dilemmas caused by this pandemic. The website aims to limit the amount of
misinformation about the virus by making the latest Orange County health risk information, status of city services,
schedule of city events, preventative recommendations, number of COVID-19 cases and vaccine updates readily available within a click of a button. Moreover, the website also contains information about business closures, grant
opportunities available to local small businesses, assistance for seniors, donation drives and volunteer efforts.
COVID-19 Call Center
To extend the availability of information to the population who lack or have limited access to internet, the City also
started a COVID-19 telephone hotline 714-536-5511 also known as the HB Ready Call Center that’s available from
Monday to Friday from 9:00 a.m. to 5:00 p.m. The mission of this group is to provide support, encouragement,
useful contact information regarding City services and events and additional resources to City of Huntington Beach
residents, businesses and visitors. In addition, this group aims to relieve pressure on the 911 system during these
trying times.
Mobi-mat
In May 2021, the City rolled out Orange County’s first
Mobi-Mat to improve beach accessibility for visitors with
disabilities, parents with strollers, and others with limited
mobility. The mat, located near 6th Street and PCH, pro-
vides a stable walkway across the sand and to the water’s
edge. Due to immense popularity, a second Mobi-Mat was
made available in October 2021.
The City of Huntington Beach continues to thrive together through the motto “OneHB,” which reflects the City’s
commitment to facing the unprecedented challenges created by the COVID-19 pandemic guided by the following
principles: One Team, One Focus, and One Goal to ensure HB continually improves its standing as a premier costal
community measured through the health of our organization, infrastructure and community.
Be Well OC
“Be Well OC” is Orange County’s first mobile men-
tal health response program. This mobile response
team, launched in September 2021, is composed of
two crisis counselors and assists with many non-
emergency and non-medical situations, including public assistance with lack of basic needs (e.g., food,
shelter, water) and homelessness, in collaboration
with the Huntington Beach Homeless Task Force.
Currently, the program is available seven days a
week, 12 hours per day, and is planned to expand to
24-hour coverage by Winter 2021-22.
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Surf City Break
The City of Huntington Beach is excited to launch a new
website www.SurfCityBreak.com - your online source for
the latest happenings in Huntington Beach ranging from
local events to City programs. Surf City Break will be up-
dated weekly, so check in regularly for the latest info about your HB neighborhood, events, and City programs.
CITY HIGHLIGHTS
Micro-mobility (Pilot Program)
The City launched a pilot micro-mobility program in
July 2021. This free transit service, in partnership
with Circuit, provides five low-speed, six-seat electric
shuttles to transport residents, workers, and visitors
over short distances within the downtown area using
the Circuit app and is available seven days a week.
Features of this program include ADA options, pow-
ered lithium batteries: 80+ miles per charge and 6
seaters. This option will reduce greenhouse gas emis-sions and also encourage visitors to “park once” and
explore all that Huntington Beach has to offer.
CITY DEBT
The City of Huntington Beach is legally restricted to
issuing general obligation bonds to 12 percent of its
assessed valuation. Since the City has no general obligation
bonds outstanding, the limit does not apply. The chart on
the left shows the latest ratings as determined by Fitch and
Standard & Poor’s as of June 30, 2021. These ratings are
important because it is a barometer of the fiscal strength of
an agency. The City continues to maintain strong credit
ratings on all of its other debt issues. Most notably, in February 2022, Fitch Ratings reaffirmed the City’s AAA
Implied General Obligation Bond rating. The high ranking
puts the City in an elite group of cities not only in
California, but in the entire country, with AAA ratings.
TOTAL CITY DEBT AS OF JUNE 30, 2021
(In Thousands)
Revenue Bonds – Long-term bond issues used to finance civic improvements. The bonds are repaid from revenues
generated from the lease on the buildings that were improved.
Claims Payable– Workers’ Compensation and Liability Insurance claims made to the City.
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Other City Debt – Miscellaneous long-term debts that include loans, leases, pollution remediation liabilities, and compen-sated absences.
Pension Obligation Bond – Debt used pay the City’s CalPERS unfunded accrued liability.
Tax Allocation Bonds – Debt used for the former Redevelopment Agency’s project improvements. This debt is repaid by property tax revenues from the former Redevelopment Agency.
KEY FINANCIAL INFORMATION
Debt Instrument Fitch S & P
1999 Tax Allocation Refunding Bonds AA AA-
2002 Tax Allocation Refunding Bonds N/A AA-
2020(a) Lease Revenue Bonds AA+ AA
2020(b) Lease Revenue Bonds AA+ AA
2021 Pension Obligation Bonds AA+ AA+
Other Redevelopment Successor Agency Debt – Primarily loans taken by the former Redevelopment Agency.
-
100,000
200,000
300,000
400,000
Revenue Bonds
29,545
Claims
46,779
Other City Debt
34,355
Pension Obligation Bond
$363,645
Tax Allocation
Bonds
$4,985 Other RDA
$24,736
RDA Successor Agency Debt City Debt
CITY OF HUNTINGTON BEACH CAPITAL ASSETS
AS OF JUNE 30, 2021
(In Thousands)
As of June 30, 2021, the City’s total capital assets balance is $879,725. This total amount is comprised of
Infrastructure, Land, Construction in Progress, Building,
and Machinery and Equipment as displayed in the chart
below. The amounts shown are net of depreciation.
Depreciation is the reduction in the value of an asset
with the passage of time. In the financial statements for
the entire government, or for the government’s business
-like activities, the City records depreciation on the
straight-line method (equal annual amounts) over the
estimated useful life of the assets.
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Land
$372,702
Construction
in Progress
$10,366
Buildings
$191,969 Machinery &
Equipment
$26,369
Infrastructure
$278,319
INVESTMENT PORTFOLIO
* Security is callable, but classified above according to original maturity date.
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The City’s cash and investment practices and policies as of June 30, 2021, are based upon State law and prudent
investor rules. Totals also include investments for the Supplemental Pension Retirement Trust Fund. The primary
goals of these investment practices and policies are:
To protect principal and maintain liquidity to meet expected operating expenses;
To ensure compliance with all Federal, State, and local laws governing the investment of public funds under the
control of the City Treasurer; and
Achieve a reasonable rate of return within the parameters of prudent risk management while minimizing the
potential for capital losses arising from market changes or issuer default.
MARKET VALUE OF THE CITY’S CASH AND INVESTMENTS
AS OF JUNE 30, 2021
(in Thousands)
INVESTMENTS: Fair Value Less than 1 1 to 3 3 to 5 More than 5
US Treasuries 13,129$ -$ 3,065$ 10,064$ -$
US Agency Securities*113,063 10,018 32,424 70,621 -
Mutual Funds 69,928 69,928 - - -
Money Market Funds 1,578 1,578 - - -
Medium Term Notes - IADB 30,616 - 15,596 15,020 -
Corporate Bonds 45,968 18,155 23,806 4,007 -
Local Agency Investment Fund 44,677 44,677 - - -
Orange County Investment Pool 65,337 65,337 - - -
California Asset Mgmt Program 2,773 2,773 - - -
PARS Pension Rate Stabilization Program 11,378 11,378 - - -
Total Investments 398,447$ 223,844$ 74,891$ 99,712$ -$
Investment Maturities (In Years)
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See page 19 for an explanation of accounting terms.
CITY FINANCIALS STATEMENT OF NET POSITION
The following financial summary is based upon a condensed view of the City’s assets and liabilities for all funds
as of June 30, 2021 and June 30, 2020.
Total Current and Other Assets increase in current and other assets of $18,678,000 for governmental activities is
mainly due to the increase in cash and receivables balances related to increased property and sales tax revenues,
as well as the receipt of the first tranche of American Rescue Plan Act funds in May 2021 totaling $14,803,000.
The decrease in current and other assets of $977,000 for business-type activities is primarily due to a reduced cash
balance in the Water Master Plan fund due to ongoing large capital project costs in Fiscal Year 2020/21 that were
delayed from prior year, including water main replacements and the City’s share of slip lining the OC-44 import-
ed water transmission line.
Deferred Outflows and Deferred Inflows increased by 626 percent and 35 percent, respectively. The chang-
es in deferred outflows is mainly due to deferral of pension contributions made subsequent to the measurement
date, including the unfunded liability payment to CalPERS totaling $362,430,000 made from proceeds of the Pen-
sion Obligation Bond. The changes in deferred inflows is related to the actuarially determined amortization of
changes in assumptions, and differences between expected and actual experience used to determine the City’s net
pension liability.
Total Current and Other Liabilities increased by 47 percent due to normal fluctuations in the accounts payable and
payroll cycle. For governmental activities, the majority of the increase is related to the first tranche of American
Rescue Plan Act Funds received in May 2021 that was recorded as unearned revenue.
Total Long-Term Obligations for governmental activities increased by 70 percent primarily due to the City
issuing a $363,645,000 Pension Obligation Bond to refinance 85 percent of its unfunded pension liability with
CalPERS.
Total Restricted Net Position decreased by 20 percent largely due to the change in restricted net position in the
LMIHAF Capital Project fund as funds were spent for the purchase of property to construct a 174-bed Navigation
Center, and in the Gas Tax Special Revenue fund for the construction of various street improvements, including
arterial rehabilitation and residential street overlay projects.
Total Unrestricted Net Position increased for business-type activities by 2 percent largely due to the increase in
net income from Water and Refuse operations during Fiscal Year 2020/21.
CITY OF HUNTINGTON BEACH STATEMENT OF NET POSITION
AS OF JUNE 30, 2021 AND JUNE 30, 2020
(In Thousands)
2021 2020
(Restated)Change 2021 2020
(Restated)Change 2021 2020
(Restated)Change
Assets
Current and Other Assets 276,665$ 257,987$ 7%97,861$ 98,838$ -1%374,526$ 356,825$ 5%
Capital Assets 737,256 714,759 3%142,469 142,785 0%879,725 857,544 3%
Total Assets 1,013,921 972,746 4%240,330 241,623 -1%1,254,251 1,214,369 3%
Deferred Outflows of Resources 393,130 54,499 621%25,937 3,262 695%419,067 57,761 626%
Liabilities
Current and Other Liabilities 34,751 20,645 68%11,599 10,952 6%46,350 31,597 47%
Long-Term Obligations 864,784 508,578 70%51,137 29,503 73%915,921 538,081 70%
Total Liabilities 899,535 529,223 70%62,736 40,455 55%962,271 569,678 69%
Deferred Inflows of Resources 17,716 13,374 32%1,601 915 75%19,317 14,289 35%
Net Position
Net Investment in Capital Assets 699,204 673,498 4%142,469 142,785 0%841,673 816,283 3%
Restricted 65,755 85,673 -23%20,332 22,248 -9%86,087 107,921 -20%
Unrestricted (275,159) (274,523) 0%39,129 38,482 2%(236,030) (236,041) 0%
Total Net Position 489,800$ 484,648$ 1%201,930$ 203,515$ -1%691,730$ 688,163$ 1%
Governmental Activities Business-Type Activities Total Primary Government
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
2021 2020 2019 2021 2020 2019
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Governmental expenses increased by $12,844,000 or 4.9 percent. The bulk of the expenditure increase is related to COVID-19 relief programs, including the Small Business and Non-Profit Grants Program and construction of the
temporary Navigation Center. These programs totaled $5,423,000 and $5,610,000, respectively.
STATEMENT OF ACTIVITIES
The following graphs show Revenues and Expenses for Governmental and Business-type activities as they relate to the
program category in which the funds were collected or expended. Governmental activities include the General Fund,
Debt Service Funds, Capital Projects Funds, and Special Revenue Funds. Business-type activities include the Water
Fund, Sewer Fund, Refuse Fund, and Hazmat Fund.
CITY OF HUNTINGTON BEACH PROGRAM EXPENSES
GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES
FOR THE FISCAL YEARS ENDED JUNE 30, 2021, JUNE 30, 2020 AND JUNE 30, 2109
(In Thousands)
Governmental
Interest on Long Term Debt
Community Services & Library
Public Works
Public Safety
General Government
Business-Type
Hazmat
Water
Sewer
Refuse
$240,199
$277,884
$67,135 $68,515
$265,040
$65,132
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$53,683
$59,819 $61,736
$66,631 $64,270
$68,124
$16,205
$22,624
$15,005
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CITY OF HUNTINGTON BEACH PROGRAM REVENUES
GOVERNMENTAL AND BUSINESS-TYPE ACTIVITIES
FOR THE FISCAL YEARS ENDED JUNE 30, 2021, JUNE 30, 2020 AND JUNE 30, 2019
(In Thousands)
Charges for Current Services decreased $6,136,000 or 10.3 percent. As noted in the financial highlights section,
the absence of one-time revenue sources from large development projects and City’s responses to help mitigate the
risks posed by COVID-19 negatively impacted the City’s recreational fee revenue which caused the Charges for
Current Services to drop.
Operating Grants and Capital Grants decreased by $6,419,000 or 28.4 percent, primarily due to one-time loan
repayments from Hermosa Vista and Huntington Pointe totaling almost $7,400,000 in prior year.
STATEMENT OF ACTIVITIES (CONTINUED)
Governmental Business-Type Governmental
Charges for Current Services Operating Grants & Capital Grants
2020 Revenues
2021 Revenues
2019 Revenues
Definition of Program Revenues: Revenues that derive directly from the program itself, such as user fees and
charges, which reduce the cost of the function to be financed from the government’s general revenues.
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GOVERNMENTAL FUNDS
The largest source of operating revenues for the City is
Property taxes. Property taxes are levies collected
from property within the City based on assessed value
and tax rate.
Sales taxes are imposed on retail transactions and
are collected and administered by the State. Huntington
Beach receives 1.0% of the total taxable sales
generated within the City.
A Utility tax of 5 percent is imposed on consumers of electricity, gas, water, and cable television services and
4.9 percent for telephone services within the City.
The City maintains 26 individual governmental funds. Governmental funds are used to account for tax-supported ac-
tivities such as: public safety, public works, general government, and community-related services. The major govern-
mental funds are the General Fund, Grants Special Revenue Fund, the Low-Moderate Income Housing Asset Fund
(LMIHAF) Capital Projects Fund and Pension Liability Fund Debt Service Fund.
The “other taxes” category is comprised of the
following:
• Franchise fees – negotiated fee revenue received from
local utilities.
Transient occupancy tax – imposed on lodging
facilities such as hotels and motels. The City’s tax rate
is set at 10 percent.
Licenses and permits represent revenues generated
from a variety of activities, such as business licenses and
building-related permits.
Revenue from fines and forfeitures are generated from
various sources, such as court and traffic fines, parking
violations, and library fines.
Revenue from the use of money and property includes
interest on City investments, leases, parking fees, and
concessions. Revenue from other agencies is primarily reimbursements
from Federal, State, and County sources.
Charges for current services are revenues collected for
services rendered to the public such as recreational
classes.
Other revenues are revenues that do not fall into
designated categories, such as refunds, donations or other
financing sources.
Debt Issuance Proceeds are revenues received from
issuing debt such as bonds.
City of Huntington Beach Statement of Revenues Governmental Funds For The Fiscal Years Ended June 30, 2021 and June 30, 2020
REVENUE/RESOURCES (WHERE THE MONEY COMES FROM)
The City received $658,704,000 from various funding sources for the fiscal year ended June 30, 2021.
Debt Service Funds are used to account for the re-
ceipts for and payment of general long-term debt.
Capital Projects Funds are used to account for and
report financial resources for capital outlays.
The General Fund accounts for activity not required to
be accounted for in another fund.
Special Revenue Funds are used to account for and
report the proceeds of specific revenue sources.
REVENUE BY SOURCE 2021 2020
Property Taxes 99,958$ 94,263$
Sales Taxes 51,162 44,616
Utility Taxes 18,374 18,149
Other Taxes 25,745 24,578
Licenses and Permits 8,213 11,266
Fines and Forfeitures 4,619 3,403
Use of Money and Property 19,163 27,863
Other Agencies 29,836 11,309
Charges for Services 25,389 29,523
Other 2,039 5,249
Debt Issuance Proceeds 374,206 1,172
Total 658,704$ 271,391$
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Governmental Fund Revenues increased by $387.3 million or 142.7 percent from the prior fiscal year. The following
details the significant changes from the prior fiscal year:
Property Taxes increased by $5.7 million or 6.0
percent, primarily reflecting both new development
and increased property values.
Other Revenues decreased by $3.2 million or
62.1 percent. Majority of the decrease is attributed to one-time revenue received in prior year (i.e.,
PCTA settlement of $1 million and proceeds from
the sale of 15331 Pipeline Lane for $2.6 million).
Use of Money and Property decreased by $8.7
million or 31.2 percent predominantly due to the
repayment of Hermosa Vista and Huntington
Pointe Apartments loans in prior year.
Licenses and Permits decreased by $3.1 million
or 27.1 percent primarily due to the Affordable
Housing in Lieu Fee received for the residential
development at 14422 Hammon Lane.
Other Taxes increased by $1.2 million or 4.7 percent predominantly due to an increase in residents paying
their Utilities Franchise Tax.
Fines and Forfeitures increased $1.2 million or 35.7 percent predominantly due to the increase in parking
fine revenues as a result of the increase in parking citation enforcement .
Debt Issuance Proceeds increased $373.0 million or 31828.8 percent primarily due to the issuance of a
$363.6 million Pension Obligation Bond to pay for the City’s unfunded accrued pension liability and the
refinancing of the City's 2010A and 2011A Lease Revenue Bonds.
GOVERNMENTAL FUNDS
EXPENDITURES/SERVICES (WHERE THE MONEY GOES)
The City incurs expenditures to meet the diverse needs of the community. As a full service city, Huntington Beach
provides fire and police services, as well as recreational and cultural opportunities. For the period July 1, 2020 to
June 30, 2021, the total expenditures incurred by the City were $617,114,000 (excluding transfers and other financing
sources).
CITY OF HUNTINGTON BEACH
STATEMENT OF EXPENDITURES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEARS ENDED JUNE 30, 2021 AND JUNE 30, 2020
(In Thousands)
EXPENDITURES 2021 2020
General Government 102,860 38,182
Public Safety 382,164 144,159
Public Works 88,007 47,655
Community and Library Services 39,163 19,628
Debt Service 4,920 6,870
Total $ 617,114 $ 256,494
Community and Library Services 6.3%
Debt Service 0.8% General Government
16.7%
Public Works 14.3%
Public Safety 61.9%
Expenditures increased by $360.6 million or 140.6 percent primarily due to the City refinancing 85 percent, or
$339.3 million of its CalPERS unfunded accrued pension liability with the issuance of a Pension Obligation Bond.
Property Taxes
15.2%
Sales Taxes
7.8%
Utility Taxes
2.8%
Other Taxes
3.9%
Licenses &
Permits
1.2%
Fines &
Forfeitures
0.7%
Use of Money
and Property
2.9%
Other Agencies
4.5%
Charges for Services
3.9%Other
0.3%
Debt Issuance
Proceeds
56.8%
17
GOVERNMENTAL FUNDS
General Government expenditures are those in-
curred by the administrative function, including the
City Council, City Manager, City Attorney, City Clerk,
City Treasurer, Finance, Human Resources, Communi-
ty Development, and Information Services.
Public Safety expenditures reflect the costs associ-
ated with providing police, fire, and marine safety
services to residents, businesses, and visitors.
Public Works expenditures are those related to the
design, construction, maintenance, and operation of
public facilities and infrastructure within the City.
Community and Library Services expenditures are
those incurred by the City to enrich the quality of life in
Huntington Beach through recreational and cultural
activities, as well as to support the educational and in-
formational needs of residents and visitors.
Debt service expenditures are used to retire the
City’s debt.
Governmental Fund Expenditures increased by $361
million or 140.6 percent from the prior fiscal year,
which is primarily due to the issuance of a Pension Ob-
ligation Bond to refinance 85 percent of the City’s un-
funded accrued liability with CalPERS.
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
2017 2018 2019 2020 2021
$242,099
$208,422
$265,797 $271,391
$658,704
$247,976
$186,555
$249,151 $256,494
$617,114
Revenues Expenditures
GOVERNMENTAL FUNDS
REVENUES AND EXPENDITURES - FIVE YEAR TREND
(in Thousands)
18
WHERE DO THE TAXES GO?
The largest source of revenue for the
City of Huntington Beach is property
taxes. Personal property in California is subject to a basic levy equal to
one percent of assessed value. The California Constitution, after
passage of Proposition 13 in 1978, fixed valuations of real property at
1975 levels, with a maximum adjustment of two percent per year based
on inflation. When a change of ownership or new construction occurs,
the property is reassessed to its current value.
The basic levy is allocated to county governments, school districts, cities, and special districts. Additional levies require two-thirds
approval by voters and are allocated directly to the specific
government.
The chart above shows how each dollar paid in property tax in the City of Huntington Beach is distributed to
local school districts, County operations, and the City’s General Fund.
City General
Fund $0.16
County
$0.13
Education
$0.71
BUSINESS-TYPE FUNDS
Business-type funds are used to report any activity for which a fee is charged to users for goods or services, similar to
private business. Over time, these funds generate enough revenue to cover the costs of their operating expenses. The
City maintained four business-type funds as of June 30, 2021.
Property Taxes
The Water Fund accounts for water sales to customers
and costs incurred to maintain its infrastructure.
The Sewer Service Fund accounts for user fees charged to
residents and businesses for sewer services.
The Refuse Fund accounts for the activities of the City’s
refuse collection program.
The Hazmat Service Fund accounts for user fees charged
for the City’s hazardous materials program.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
2020 2021 2020 2021 2020 2021
$40,518 $42,523
$10,900 $10,828 $12,852 $13,280
$44,463 $45,963
$9,828 $9,249
$12,844 $13,172
BUSINESS-TYPE FUNDS
(in Thousands)
Operating Revenues
Operating Expenses
Water Sewer Refuse & Hazmat
EXPLANATION OF ACCOUNTING TERMS
19
Current and Other Assets – Assets that one can
reasonably expect to convert to cash, sell, or
consume within one year.
Capital Assets – The City’s long-term investments
in land, buildings, equipment, improvements,
infrastructure, and construction in progress. The
City uses these capital assets to provide services
to citizens; consequently, these assets are not
available for future spending.
Net Investment in Capital Assets – This
represents the City’s investment in its capital
assets less accumulated depreciation and any
outstanding debt attributable to the acquisition,
construction, or improvement of these assets. It
should be noted that the resources needed to
repay this debt must be provided by other sources,
since the capital assets themselves cannot be
used to liquidate these liabilities.
Deferred Outflows of Resources – Represents a
consumption of net position that applies to future
periods.
Deferred Inflows of Resources – Represents an
acquisition of net position that applies to future
periods.
Current and Other Liabilities – These are
primarily debts that can be paid off in one year or
less. This includes accounts payable, accrued
payroll and accrued interest payable.
Long-Term Obligations – Represents mainly
debt obligations of the City. The proceeds from
these various debt issues are typically used to
finance large project cost such as building
construction and renovations, major equipment
purchases, and roadway construction.
Net Position - This represents the City’s total
assets and deferred outflows of resources less the
total liabilities and deferred inflows of resources.
Restricted Net Position – Resources whose use
is subject to externally imposed restrictions. The
City has resources set aside for debt service,
public works projects, and community services
programs as established by the City Council.
Unrestricted Net Position – These are resources
that are accessible to the City to provide services
to the residents of Huntington Beach if there were
no additional revenues or resources available.
AWARD
The Government Finance Officers Association of the
United States and Canada (GFOA) has given an Award for
Outstanding Achievement in Popular Annual Financial
Reporting to the City of Huntington Beach for its Popular
Annual Financial Report for the Fiscal Year Ended June
30, 2020. The Award for Outstanding Achievement in
Popular Annual Financial Reporting is a prestigious
national award recognizing conformance with the highest
standards for preparation of state and local government
popular reports.
In order to receive an Award for Outstanding Achievement
in Popular Annual Financial Reporting, a government unit must publish a Popular Annual Financial Report, whose
contents conform to program standards of creativity,
presentation, understandability, and reader appeal.
An Award for Outstanding Achievement in Popular Annual
Financial Reporting is valid for a period of one year only.
The City of Huntington Beach has received a Popular
Award for the last fifteen consecutive years (Fiscal Years
ended 2006-2020). We believe our current report continues
to conform to the Popular Annual Financial Reporting
requirements.
City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 (714) 536-5630 www.huntingtonbeachca.gov