City of Long Beach California Comprehensive Annual Financial Report I II City of Long Beach, California CCOOMMPPRREEHHEENNSSIIVVEE AANNNNUUAALL FFIINNAANNCCIIAALL RREEPPOORRTT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 Prepared by the Department of Financial Management Lori Ann Farrell, Director III Intentionally Left Blank IV COMPREHENSIVE ANNUAL FINANCIAL REPORT PREPARED BY THE DEPARTMENT OF FINANCIAL MANAGEMENT CITY OF LONG BEACH, CALIFORNIA For the Fiscal Year Ended September 30, 2009 Lori Ann Farrell Director of Financial Management Stephen W. Hannah Mary Williams City Controller Accounting Operations Officer Francine Wiegelman Komla Prosper Ametu Accounting Operations Officer Accounting Operations Officer Michael Carrigg Cathy Pingol Senior Accountant Senior Accountant Mary Hebert Bart Ramos Senior Accountant Senior Accountant Angie Tran Kim-Hang Nguyen Accountant Accountant Lucy Hong Amanda Johnson Accountant Accountant Jim Sugita John Zanier Accountant Administrative Officer Daniel Thurber Investment Manager V Intentionally Left Blank VI City of Long Beach Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2009 TABLE OF CONTENTS INTRODUCTORY SECTION Page Letter of Transmittal…………………………………………………………………………………………………………... iii Directory of City Officials………………………………………………………………………………………….…………xiii Organizational Chart…………………………………………………………………………………………………………. xv Certificate of Achievement for Excellence in Financial Reporting Award………………………………………..….. ......... xvi FINANCIAL SECTION Independent Auditors’ Report................................................................................................................................................... 1 Management’s Discussion and Analysis (Unaudited)............................................................................................................... 3 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets .......................................................................................................................................... 27 Statement of Activities............................................................................................................................................ 28 Fund Financial Statements: Governmental Funds, Balance Sheet....................................................................................................................... 30 Reconciliation of the Governmental Funds Balance Sheet to Net Assets of Governmental Activities in the Statement of Net Assets ........................................................................................................................ 33 Governmental Funds, Statement of Revenues, Expenditures, and Changes in Fund Balances .............................. 34 Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities........................................................................................ 36 General Fund, Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Budgetary Basis)...................................................................................................... 37 Housing Development Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Non-GAAP Budgetary Basis)........................................................................ 38 Community Development Grants Fund Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Non-GAAP Budgetary Basis)........................................................... 39 Proprietary Funds, Statement of Net Assets (Deficit) ............................................................................................. 40 Proprietary Funds, Statement of Revenues, Expenses, and Changes in Fund Net Assets (Deficit)......................... 44 Proprietary Funds, Statement of Cash Flows .......................................................................................................... 46 Fiduciary Funds - Statement of Fiduciary Net Assets............................................................................................. 50 Fiduciary Funds - Statement of Changes in Fiduciary Net Assets .......................................................................... 50 Notes to the Basic Financial Statements: Note 1 – Reporting Entity................................................................................................................................. 51 Note 2 – Summary of Significant Accounting Policies .................................................................................... 54 Note 3 – Reconciliation of Government-Wide and Fund Financial Statements................................................ 63 Note 4 – Cash and Investments......................................................................................................................... 66 Note 5 – Receivables ........................................................................................................................................ 73 Note 6 – Interfund Receivables, Payables, and Transfers................................................................................. 74 Note 7 – Capital Assets..................................................................................................................................... 80 Note 8 – Short-Term Note Payable................................................................................................................... 82 Note 9 – Change in Long-Term Liabilities....................................................................................................... 83 Note 10 – Bonds Payable.................................................................................................................................... 84 Note 11 – Notes, Certificates of Participation, Commercial Paper Notes, and Other Long-Term Obligations... 93 Note 12 – Leasing Arrangements ....................................................................................................................... 99 Note 13 – Derivative Instruments..................................................................................................................... 103 Note 14 – Retirement Programs........................................................................................................................ 105 Note 15 – Post Retirement Health Care Benefits.............................................................................................. 110 Note 16 – Self-Insurance Programs .................................................................................................................. 113 Note 17 – Governmental Activities Fund Balance ........................................................................................... 114 Note 18 – Reconciliation of Actual Revenues and Expenditures to the Non-GAAP Budgetary Basis............. 116 Note 19 – Segment Information for Business-Type Activities Funds............................................................... 117 Note 20 – Gas Utility Fund............................................................................................................................... 119 Note 21 – Solid Waste Management Fund ....................................................................................................... 122 Note 22 – Oil Abandonment Liability .............................................................................................................. 126 Note 23 – Pollution Remediation Obligations .................................................................................................. 128 Note 24 – Investment in Joint Ventures............................................................................................................ 131 i Note 25 – Deferred Compensation ................................................................................................................... 132 Note 26 – Commitments and Contingencies..................................................................................................... 133 Note 27 – Subsequent Events ........................................................................................................................... 137 Required Supplementary Information: CalPERS Analysis of Funding Progress ....................................................................................................................... 139 Public Agency Retirement System................................................................................................................................ 140 Postemployment Health Care Benefits Analysis of Funding Progress.......................................................................... 140 Additional Financial Information: General Capital Projects Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Non-GAAP Budgetary Basis).............................................................................. 142 Redevelopment Capital Projects Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Non-GAAP Budgetary Basis)............................................................................. 143 Nonmajor Governmental Funds, Special Revenue Funds, Combining Balance Sheet.................................................. 146 Nonmajor Governmental Funds, Special Revenue Funds, Combining Statement