City of Long Beach California Comprehensive Annual Financial Report Fiscal Year Ended September 30, 2015 I BLANK II CCOOMMPPRREEHHEENNSSIIVVEE AANNNNUUAALL FFIINNAANNCCIIAALL RREEPPOORRTT City of Long Beach, California For The Fiscal Year Ended September 30, 2015 Prepared by the Department of Financial Management John Gross, Director III Intentionally Left Blank IV City of Long Beach, California Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2015 Prepared by the Department of Financial Management John Gross Director of Financial Management Stephen W. Hannah City Controller Francine Wiegelman Assistant City Controller Olivia Valero Michael Carrigg Accounting Operations Officer Senior Accountant Cathy Pingol Mary Hebert Senior Accountant Senior Accountant Lucy Hong Kalpna Desai Senior Accountant Senior Accountant Angie Tran Kim-Hang Nguyen Accountant Accountant Glenda Pakingan Amanda Johnson Accountant Accountant Alex Powers Georgia Will Accountant Accountant Nicholas Kimble Gretchen Monroe Accountant Accountant Joanne Medina Jackie Pham Accounting Clerk Accounting Clerk Gary Nguyen Cash and Investment Manager Photography by Hartono Tai Intentionally Left Blank VI City of Long Beach Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2015 TABLE OF CONTENTS INTRODUCTORY SECTION Page Letter of Transmittal…………………………………………………………………………………………………………... iii Directory of City Officials………………………………………………………………………………………….………… xi Organizational Chart…………………………………………………………………………………………………………. xiii Certificate of Achievement for Excellence in Financial Reporting Award………………………………………..……. ......... xiv FINANCIAL SECTION Independent Auditors’ Report ..................................................................................................................................................... 1 Management’s Discussion and Analysis (Unaudited) ................................................................................................................. 5 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position ..................................................................................................................................................... 25 Statement of Activities ......................................................................................................................................................... 26 Fund Financial Statements: Governmental Funds, Balance Sheet .................................................................................................................................... 28 Reconciliation of the Governmental Funds Balance Sheet to Governmental Activities in the Statement of Net Position ... 29 Governmental Funds, Statement of Revenues, Expenditures, and Changes in Fund Balances ........................................... 30 Reconciliation of Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ........................................................................................................ 31 General Fund, Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Non-GAAP Budgetary Basis) ..................................................................................................................... 32 Proprietary Funds, Statement of Net Position (Deficit) ........................................................................................................ 34 Proprietary Funds, Statement of Revenues, Expenses, and Changes in Fund Net Position (Deficit) ................................... 38 Proprietary Funds, Statement of Cash Flows ....................................................................................................................... 40 Fiduciary Funds, Statement of Fiduciary Net Position ......................................................................................................... 44 Fiduciary Funds, Statement of Changes in Fiduciary Net Position ...................................................................................... 44 Notes to the Basic Financial Statements: Note 1 – Reporting Entity .............................................................................................................................................. 45 Note 2 – Summary of Significant Accounting Policies .................................................................................................. 48 Note 3 – Reconciliation of Government-wide and Fund Financial Statements .............................................................. 58 Note 4 – Cash and Investments ...................................................................................................................................... 61 Note 5 – Receivables ..................................................................................................................................................... 66 Note 6 – Interfund Receivables, Payables, and Transfers .............................................................................................. 67 Note 7 – Capital Assets .................................................................................................................................................. 70 Note 8 – Change in Long-Term Liabilities .................................................................................................................... 72 Note 9 – Bonds Payable ................................................................................................................................................. 73 Note 10 – Notes, Commercial Paper Notes, and Other Long-Term Obligations ............................................................. 80 Note 11 – Leasing Arrangements..................................................................................................................................... 84 Note 12 – Derivative Instruments .................................................................................................................................... 87 Note 13 – Retirement Programs ....................................................................................................................................... 90 Note 14 – Postemployment Healthcare Benefits .............................................................................................................. 98 Note 15 – Self-Insurance Programs ............................................................................................................................... 101 Note 16 – Governmental Activities Fund Balance ......................................................................................................... 102 Note 17 – Gas Utility Fund ............................................................................................................................................ 104 Note 18 – Solid Waste Management Fund .................................................................................................................... 107 Note 19 – Oil Abandonment Liability ........................................................................................................................... 111 Note 20 – Pollution Remediation Obligations ............................................................................................................... 113 Note 21 – Investment in Joint Ventures ......................................................................................................................... 115 Note 22 – Deferred Compensation ................................................................................................................................. 116 Note 23 – Commitments and Contingencies .................................................................................................................. 116 Note 24 – Deferred Outflows and Deferred Inflows of Resources ................................................................................ 119 Note 25 – Subsequent Events ........................................................................................................................................ 120 Required Supplementary Information (unaudited): CalPERS Schedules of Changes in Net Pension Liability .................................................................................................... 121 CalPERS Schedules of Contributions ................................................................................................................................... 123 Public Agency Retirement System Schedule of Changes in Net Pension Liability .............................................................. 125 Public Agency Retirement System Schedule of Contributions ............................................................................................. 126 Postemployment Healthcare Benefits Analysis of Funding Progress ................................................................................... 126 i Additional Financial Section: Nonmajor Governmental Funds, Combining Balance Sheet ............................................................................................... 127 Nonmajor Governmental Funds, Combining Statement of` Revenues, Expenditures, and Changes in Fund Balances ....... 128 Nonmajor Special Revenue Funds, Combining Balance Sheet ............................................................................................. 130 Nonmajor Special