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CITY OF BEVERLY HILLS, CALIFORNIAComprehensive Annual Financial Report

Year Ended June 30, 2019Table of Contents

Statement/ Exhibit Page

INTRODUCTORY SECTION

Letter of Transmittal................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1

Principal City Officials................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10

City of Beverly Hills and Administrative Services Department Organizational Chart................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11

Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12

FINANCIAL SECTION

Independent Auditors' Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................14

Management's Discussion and Analysis (Required Supplementary Information - Unaudited)................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................18

Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-1 29

Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-2 31

Fund Financial Statements:

Balance Sheet - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-3 32

Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activitiesin the Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-4 33

Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-5 34

Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances ofGovernmental Funds to the Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-6 35

Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual - General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-7 36

Statement of Net Position - Proprietary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-8 38

Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-9 40

Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-10 41

Statement of Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................A-11 43

Statement of Changes in Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................44

Notes to Basic Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

(1) Summary of Significant Accounting Policies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................46

(2) Stewardship, Compliance and Accountability................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................53

(3) Cash and Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................54

(4) Receivables and Unearned Revenue................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................61

(5) Interfund Receivables/Payables................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................63

(6) Transfers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................64

(7) Capital Assets................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................65

CITY OF BEVERLY HILLS, CALIFORNIAComprehensive Annual Financial Report

Year Ended June 30, 2019Table of Contents

Statement/ Exhibit Page

(8) Long-Term Liabilities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................66

(9) Employee Deferred Compensation Plans................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................75

Related Party Transactions - Sale/Leaseback................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................76

(11) Post Employment Health Care Benefits................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................76

(12) Commitments and Contingencies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................80

(13) Separation of the Parking Authority of the City of Beverly Hills................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................82

(14) Fund Balance................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................84

(15) Deferred Outflows and Inflows of Resources................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................85

(16) Pension Plans................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................86

(17) Subsequent Events................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................89

Required Supplementary Information - Schedule of Changes in Net Pension Liabilityand Related Ratios (Unaudited)................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................90

Required Supplementary Information - Schedule of Contributions - CalPERS Plan (Unaudited)................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................92

Required Supplementary Information-Schedule of Changes in Total Other Post Employment Benefit Liabilityand Related Ratios (Unaudited)................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................93

Additional Financial Information:

Combining and Individual Fund Statements and Schedules:

Nonmajor Governmental Funds:

Combining Balance Sheet................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................B-1 97

Combining Statement of Revenues, Expenditures and Changes in Fund Balances................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................B-2 101

Combining Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................B-3 105

Infrastructure Capital Projects Fund - Schedule of Revenues, Expenditures and Changes inFund Balance - Budget and Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................C-1 119

Internal Service Funds:

Combining Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................D-1 122

Combining Statement of Revenues, Expenses and Changes in Fund Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................D-2 124

Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................D-3 125

Capital Assets Used in the Operation of Govenmental Funds:

Comparative Schedule by Source................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................E-1 130

Schedule by Function and Activity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................E-2 131

Schedule of Changes by Function and Activity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................E-3 132

Supplementary Information - Statement of Changes in Assets and Liabilities of Agency Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................F-1 134

CITY OF BEVERLY HILLS, CALIFORNIAComprehensive Annual Financial Report

Year Ended June 30, 2019Table of Contents

Statement/ Exhibit Page

STATISTICAL SECTION (UNAUDITED)

Financial Trends Information:

Net Position by Component................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-1 138

Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-2 139

Fund Balances of Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-3 142

Changes in Fund Balances of Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-4 143

Revenue Capacity Information:

Revenue Bases and Rates of Business Tax................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-5 144

Principal Business Taxpayers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-6 152

Property Taxes Levies and Collections................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-7 153

Assessed Actual Value of Taxable Property................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-8 154

Property Tax Rates for Direct and Overlapping Government................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-9 155

Property Tax Levies for All Overlapping Governments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-10 156

Principal Property Taxpayers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-11 157

Debt Capacity Information:

Ratios of Outstanding Debt by Type................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-12 158

Computation of Direct and Overlapping Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-13 159

Legal Debt Margin Information................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-14 160

Ratios of Annual Debt Service Expenditures of Governmental Funds to Total Governmental FundExpenditures and Ratio of Total Debt Service Expenditures to Total Governmental Activities Expenses................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-15 161

Ratios of Debt Service Per Capita................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-16 162

Water Enterprise Fund Long-Term Debt Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-17 163

Wastewater Enterprise Fund Long-Term Debt Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-18 164

Demographic and Economic Information:

Demographic and Economic Statistics................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-19 165

Demographic Statistical Data................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-20 166

Operating Information:

Full-time Equivalent City Government Employees by Function................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-21 168

Operating Indicators................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-22 169

Capital Asset Statistics by Function................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-23 170

INTRODUCTORYSECTION

The introductory section of the Comprehensive Annual FinancialReport provides general information of the City of Beverly Hills,California’s structure and its personnel, as well as informationuseful in assessing the City’s financial condition. This sectionincludes the:

Letter of Transmittal,City’s Organizational Chart and List of Principal Officials,Organizational Chart for the City’s Finance AdministrationDepartment, andGovernment Finance Officers Association Certificate ofAchievement for Excellence in Financial Reporting.

December 9, 2019

Honorable Mayor, City Council and Citizens of the City of Beverly Hills:

State law requires that all general-purpose local governments publish a complete set offinancial statements presented in conformity with generally accepted accounting principles(GAAP) and audited in accordance with generally accepted auditing standards by a firm oflicensed certified public accountants. Pursuant to that requirement, we hereby submit thecomprehensive annual financial report (CAFR) of the City of Beverly Hills, California(City) for the fiscal year ended June 30, 2019.

This report consists of management’s representations concerning the finances of the City ofBeverly Hills, California. Consequently, management assumes full responsibility for thecompleteness and reliability of all of the information presented in this report. To provide areasonable basis for making these representations, management of the City has establisheda comprehensive internal control framework that is designed both to protect the City’sassets from loss, theft or misuse and to compile sufficient reliable information for thepreparation of the City’s financial statements in conformity with GAAP. Because the costof internal controls should not outweigh their benefits, the City’s comprehensiveframework of internal controls has been designed to provide reasonable rather thanabsolute assurance that the financial statements will be free from material misstatement. Asmanagement, we assert that, to the best of our knowledge and belief, this financial report iscomplete and reliable in all material respects.

The City’s financial statements have been audited by Crowe LLP, a public accounting firmfully licensed and qualified to perform audits of the State and local governments within theState of California. The goal of the independent audit was to provide reasonable assurancethat the financial statements of the City of Beverly Hills, California for the fiscal yearended June 30, 2019, are free of material misstatement. The independent audit involvedexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements; assessing the accounting principles used and significant estimates made bymanagement; and evaluating the overall financial statement presentation. The independentauditors concluded, based upon the audit, that there was a reasonable basis for rendering anunmodified (“clean”) opinion that the City of Beverly Hills, California’s financialstatements for the fiscal year ended June 30, 2019, are fairly presented in conformity withaccounting principles generally accepted in the United States. The independent auditors’report is presented as the first component of the financial section of this report.

GAAP requires that management provide a narrative introduction, overview, and analysisto accompany the basic financial statements in the form of Management’s Discussion andAnalysis (MD&A). This letter of transmittal is designed to complement MD&A and shouldbe read in conjunction with it. The City’s MD&A can be found immediately following thereport of the independent auditors in the financial section of the CAFR.

Profile of the City of Beverly Hills. The City of Beverly Hills was incorporated in 1914under the general laws of the State of California and is a long-established residential cityand commercial center located within Los Angeles County in Southern California. TheCity, located 10 miles west of the Los Angeles City Hall, occupies a land area ofapproximately 5.7 square miles and serves a residential population of 34,627.

The City operates under a Council-Manager form of government. The City Council consistsof five members elected at large for overlapping four-year terms. The Mayor is selectedfrom the City Council members and serves a one-year term. The City’s only other electedofficial is the City Treasurer whose term of office is four years. The City Council isresponsible for, among other things, passing ordinances, adopting the budget, appointingcommittees, and appointing a City Manager, City Attorney, City Auditor, and City Clerk.Also, appointment of all assistant city managers, deputy city managers and departmentheads requires the advice and consent of the City Council. In addition, the City Councilappoints the members of the following advisory Commissions and Boards:

Architectural Commission

Arts and Culture Commisssion

Human Relations Commission

Planning Commission

Charitable Solicitations Commission Public Works Commission

Cultural Heritage Commission Recreation & Parks Commission

Design Review Commission Traffic and Parking Commission

Health & Safety Commission

In addition to sitting as the governing body of the City, the City Council also acts as theBoard of Directors of two component units: the Parking Authority of the City of BeverlyHills, the Beverly Hills Public Financing Authority. The Parking Authority of the City ofBeverly Hills is a blended component unit under the criteria of board appointment andfinancial burden on the primary government, as is the Beverly Hills Public FinancingAuthority and the City of Beverly Hills Community Charitable Foundation. The CityManager is responsible for carrying out the policies and ordinances of the City Council, for

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overseeing the day-to-day operations of the City, and for appointing the heads of the City’svarious departments and offices with the consent of the City Council.

The City provides the full range of municipal services as contemplated by statute. Servicesprovided include public safety (police and fire), street construction and maintenance,sanitation, refuse collection, water and sewer utilities, culture-recreation, publicimprovements, planning and zoning, and general administrative and support services.

The annual budget serves as the foundation for the City’s financial planning and control.The City Council is required to adopt an annual budget resolution by July 1 of each fiscalyear for the General Fund, special revenue funds and permanent funds. These budgets areadopted and presented for reporting purposes on a basis consistent with generally acceptedaccounting principles.

The City Council also adopts annual financial plans for the enterprise and internal servicefunds and five-year capital budget plans for capital expenditures accounted for primarily inproprietary funds. All proprietary fund types are accounted for on an economic resourcesmeasurement focus. The City is not legally mandated to report the results of operations andcapital expenditures for these proprietary fund types on a budget comparison basis;therefore, budgetary data related to these funds have not been presented.

The level of appropriated budgetary control is the total adopted budget which is defined asthe total budget for all funds and divisions and includes all revisions and amendmentsapproved by the City Council subsequent to the initial budget adoption. The City Managermay authorize transfers of appropriations within the adopted budget. Supplementalappropriations during the year must be approved by the City Council. Pursuant to theannual budget resolutions, the City Manager may appropriate up to $300k, and the Directorof Finance up to $100k. Unexpended or unencumbered appropriations lapse at the end ofthe fiscal year. Encumbered appropriations are reappropriated in the ensuing year’s budgetby action of the City Council who gives authority to the City Manager to do so.

Budget-to-actual comparisons are provided in this report for each individual governmentalfund for which an appropriated annual budget has been adopted. This comparison,beginning on page , is presented as part of the basic financial statements for the GeneralFund. The budget-to-actual comparisons for nonmajor governmental funds withappropriated annual budgets are presented in the Nonmajor Governmental Funds section ofthis report, and begin on page 101. The budget-to-actual comparison for the InfrastructureCapital Projects Fund, a Major governmental fund of the City, can be found on page 119.

Factors Affecting Financial Condition. From the beginning when the City was planned asa subdivision in 1906, Beverly Hills was designed as a special place. In subsequent years,much has changed, but not the desire to keep it special. As a result, the City has establisheda tradition of providing residents, business and visitors with a superior level of publicsafety services, premium life enrichment opportunities, and a renowned physicalenvironment.

This fiscal year 2018-2019 budget came with a great deal of good news, forecastingcontinued growth in the City’s micro-economy. Despite transfers from the General Fund tothe Infrastructure Capital Projects Fund, the Information Technology Fund, and theInfrasructure Debt Service Fund the budget had no cuts or one-time measures to achievebalance.

City staff approaches budgeting conservatively, projecting revenues at the low end ofexpectations and expenditures at potential full cost. This approach frequently results in ayear-end surplus. The fiscal year 2019-2020 adopted budget includes no one-timereductions or ongoing cuts and thus no reduction in service levels. The five year forecastincluded in the budget predicts the City will have adequate resources for current servicelevels over this period. The City Council also increased spending in areas that directly andpositively impact the quality of life for residents, such as the addition of four traffic controlofficers, park rangers, firefighter paramedic to support the Nurse Practitioner program,additional fleet for public safety support, additional funding for community programing(Winter BOLD and Next Night), permanent approval of positions to support rentstabilization program, outside consulting services to support the City's new InternalAuditor, and an additional position and funding to support the City's property managementprogram.

Economic Outlook

The City continues to enjoy steady economic growth that has outpaced the modest growthof the national economy over the last several years. Tourism, strong commercial leasingwith low vacancies, and home value appreciation drive this more robust local growth.While property tax and transient occupancy tax revenues continue to increase, the rate ofthat increase in business tax and sales and use tax has slowed due to the loss of point-of-sale retail sales and we are now expecting that sales tax could decrease in future. Risks anduncertainties that could cause our local economy or at least our revenue base to contractremain an ongoing concern.

Among these are:

Traffic impacts from various public and private construction projects which could impact

visits and retail sales in the City

A slowing housing market

The Federal Reserve Board raising the discount rate

The effect of a strong dollar on tourism attraction and retail spending in the City

Geopolitical and economic events which might impact tourism or spending

Global growth slowdown or contraction

This steady growth has given the Beverly Hills economy momentum, though there are some

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signs the economy could be cooling off. Current GDP growth is expected to rise to 3.1%and then decrease to 2.45% in 2020 and in 2021, respectively. The median sales price ofdetached single-family residences in Beverly Hills as of the three quarters ended September2019 was $5.9 million, which is up 3.95% from the same period the year before. Sales taxreceipts grew 3.39% in the quarter ended June 30, 2019 (after adjusting for receiptprocessing delays) compared to the year prior with much of this increase due to processingand reporting problems experienced by the California Department of Tax and FeeAdministration. Transient occupancy tax receipts slightly increased 1.9% over the previousyear and property taxes increased 7.4% during fiscal year 2018-2019. These drive theGeneral Fund revenues and suggest continued growth for the City's economic base.

Budget Summary

The City Council adopted the fiscal year 2018-2019 budget with General Fund revenues of$255.8 million, General Fund expenditures of $225.3 million, and net transfers of $12.9million. This is an increase in revenue of 14.3% and increase of expenditures of 19.5%compared to the fiscal year 2017-2018 budget. The combined operating budget for all fundsprovides for revenues of $509.2 million, and expenditures of $494.7 million. Thisrepresents an increase of 7.6% in revenue and an increase of 4.0% in expenditures whencompared to last year’s budget.

City Council Priorities

In December of 2018, the City Council met to establish its priorities for fiscal year2018-2019. This priority-setting process helps guide City staff in the development of thenext fiscal year's budget. Requests by departments for budget increases are designed toaddress the priorities established by the City Council. A complete list of these priorities forfiscal year 2018-2019 is included in the Supplemental Information Section of the budget.Below are City Council priorities for fiscal year 2018-2019:

Support Beverly Gardens Park Restoration Project

Expand Use of Technology

La Cienega Regional Stormwater Treatement Facility

Develop Master Plan for Needs at La Cienega Park & Tennis Center

Tree Master Plan

Water Enterprise Plan

Property Acquisition

Explore Open Space Options

Southeast Task Force

Small Business Task Force

Advance Capital Investment in the City

Subway Coordination

Continue to Strenghten Public Safety

Update City's Five Year Economic Sustainability Plan

L.E.D. Streetlight Program

R-1 Hillside Development Standards

Complete Streets Plan

"Little Santa Monica" Study

Reservoir Reconstruction and Water Storage Capacity

Redevelop Coldwater/Cabrillo Reservoirn

Evaluate the City's Rent Stabilization Policy

Autonomous Vehicles/First and Last Mile Issues

Community Video Security

Implement Public Works Audit Recommendations

Anti-Voter Fraud Innitiative

Strenghtening and Expanding Smoking Regulations

Reforestation of Public Right of Way on Civic Center Drive

Independent Internal Auditor

Promote Arts & Culture

Improve City's "3-1-1" System

Rodeo Permanent Bistro Seating

Create Evening Activities in Business Triangle

Advertise Employment Opportunities Locally

Seismic Retrofit Program

Historic Preservation Incentives

City Gateways

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Automated Parking Code Amendments

Disabled Placard Legislation

Inclusionary Housing

Consolidation of Permit Parking Zones

Utilize Sunshine Taskforce to advance transparency

Public Works Space Assessment

Oil Well Plugging Project

Separate Landscape Metering

Water Conservation Program

Establish a Strategic Planning Commitee

Comprehensive Financial Review of Public Works

3rd Street Tour Bus Stop Improvements

Retain Local Control through Legislative Efforts

Revenues

Fiscal year 2018-2019 City wide revenues continued their increasing trend. This is largelythe result of increases over the prior year in major revenue sources such as property tax,transient occupancy tax, business tax, and sales and use tax all of which were up between0.8% and 10.0% for the year.

Property Tax

Property taxes are levied based on assessed values, which grew 7.4% this past year. Thisreflects a real estate market in Beverly Hills that continues to gain strength resulting in a$4.6 million (6.7%) increase in property taxes to a total of $73.3 million.

5

Sales Tax

Sales tax revenue increased about $3.4 million or 10.0 % in fiscal year 2018-2019compared to fiscal year 2017-2018, primarily much of this increase is due to processing andreporting problems experienced by the California Department of Tax and FeeAdministration (CDTFA). Due to problems CDTFA had in converting its computer system,there were problems with the reporting of local sales tax revenue. Some of the City’s salestax revenue was not reported by the CDTFA in the periods in which it should have beenand, as a result, FY 2017/18 sales tax revenue was lower than it should have been, and FY2018/19 revenue is higher than it should be.

For FY 2019/20, we project sales tax revenue of $35.4 million which is about 8.9% or $2.9million higher than FY 2018/19 projected results.

Transient Occupancy Tax

Transient occupancy tax (TOT) revenues for fiscal year 2018-2019 increased by $0.9million (1.9%) for a total of $50.0 million versus prior year actual receipts of $49.1 million.The increase in revenue is primarly driven by exemptions for FY 2018/19, as total hotelgross receipts were nearly flat (down 0.5%) while exemptions decreased by 20% comparedto the prior year.

6

Business Tax

Business tax revenue reached a new high in fiscal year 2018-2019 of $52.1 million,growing $0.4 million (0.8%) from $51.7 in prior fiscal year. For commercial leasing, retailand certain other categories of businesses, the business tax is computed on gross receipts.As a result, strong occupancy, lease rates and growth in retail sales all contributed to thegrowth of this revenue.

Expenditures

Fiscal year 2018-2019 operating expenditures for all funds totaled $375.2 million. Year-end General Fund expenditures for fiscal year 2018-2019 were $224.3 million. This isapproximately $12.8 million or 5.4% below the funds appropriated by the City Council forthat fiscal year. Much of the expenditure savings is the result of job vacancies, which resultin salary and benefits savings, and a general budgetary philosophy that encourages fiscalprudence.

The following chart examines the City’s governmental (i.e. non-business type)expenditures over the past several:

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Perrhaps the best measure of the City’s effectiveness in weathering an economic downturnand building sustained growth for the future is its ability to build fund reserves. As a rule ofthumb, a city should maintain sufficient reserves to weather the worst potential emergencyscenarios. In the accompanying chart, the change in the ratio of the fund balance of theCity’s General Fund to total expenditures is presented. As this chart demonstrates, theactions taken by the City have effectively improved revenues, controlled expenditures andallowed the City to increase its reserves for future needs. As shown in the chart below, infiscal year 1995-1996 the ratio of fund balance on hand to total General Fund expenditureswas 3.7%. By the end of fiscal year 2018-2019, on the other hand, the General Fundavailable balance was 98.8% of total expenditures.

Budget Enhancements

For FY 2018-2019 after staff reviewed the requests, 51 were recommended to the CityCouncil and approved. The total cost of recommended enhancements was $8.33 million.The enhancements have a net cost, after revenue and cost cutting offsets, of $6.86 million.

Enterprise Funds with Structural Imbalance

The Storm Water Fund continues to be a troubled enterprise fund for the City. For fiscalyear 2018-2019, the Storm Water Fund required a General Fund subsidy of $2.3 million.This fund continues to operate at a loss, with an operating loss of $(3.31) million as of theend of the fiscal year. The General Fund will continue to subsidize the Stormwater Fund atever-increasing levels for the foreseeable future. State legislation is necessary to allow thisfunction and fund to be fiscally sound.

Of course, this is not a good model for an enterprise (self-supporting) operation. Use ofGeneral Fund revenues to subsidize enterprise funds is generally regarded as a warningsign that, if unresolved, can cause future fiscal problems for the fund and the City. Theimbalance of this fund’s expenditure obligations and revenue must be resolved in order toensure the continued sound fiscal condition of the City. It should be noted that user fees forthe Storm Water Fund cannot be raised without voter approval.

California Public Employees Retirement System (CalPERS) Costs

The City is a member of the California Public Employee Retirement System (CalPERS).The current retirement formulas for Beverly Hills fall into two general categories: PublicSafety and Miscellaneous Members. In prior agreements with public safety bargaininggroups, a new, lower cost, pension tier was created. In addition, in January 2013, theCalifornia Legislature passed the Public Employee Pension Reform Act (PEPRA). As aresult the City now has three tiers of pensions for Public Safety employees: 3%@50,3%@55, and 2.7%@57.

For Miscellaneous employees (non-safety) the City currently provides a pension plan with aformula of 2.5%@55. Under PEPRA, newly hired employees who have not worked in aCalPERS participating or reciprocal agency within the past six months before hire will beplaced in the new tier of 2%@62.

Both the new safety and miscellaneous tiers will provide long-term cost savings to the City.But since they only apply to newly hired employees, it will take many years for thesesavings to be realized. As of this writing, approximately 35.3% of all City employees are inone of the lower cost pension plans. Current actuarial projections show the combinedemployer safety rate rising from 55.6% in fiscal year 2019-2020 to 64.1% in fiscal year2025-2026; and combined employer miscellaneous rates rising from 25.3% in fiscal year2019-2020 to 27.1% in 2025-2026.

CalPERS has experienced mixed returns on investments in recent years. While CalPERSreported a 11.2% return in 2016-2017 and 8.6% in 2017-2018, for 2018-2019 their returnwas only 6.7%. This year's return brings total fund performance to 5.8% for the five-yeartime period, 9.1% for the 10-year, and 5.8% for the 20-year time period. Over the last 30years, the fund has returned an average of 8.1%. Given these mixed results, CalPERS hasimplemented new policies that will gradually reduce the expected rate of return to 7.0% inorder to make the plan more secure. This, of course, has the effect of driving up pensionrates, as was discussed in the previous paragraph. The total unfunded liability decreasedfrom $266 million as of June 30, 2018 to $255 million as of June 30, 2019 due tocontributions (both employer and employee) and net investment income exceeding the neteffect of benefits payments, interest on total pension liability, service costs and changes inassumptions.

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Capital Improvement Plan (CIP)

The Capital Improvement Program budget responds to the needs of our residents andvisitors, ensuring the streets, public buildings, parking facilities, parks, sewer, storm water,and water infrastructure are well maintained for maximum safety, functionality, and allure.The fiscal year 2018-2019 CIP budget provides capital funding of $69.0 million and five-year projected total funding of $313.0 million. Some of the more significant projectsincluded in this budget are $3.0 million to provide high-speed fiber-optic service to eachparcel in the City; $6.0 million for major building systems maintenance; $5.0 million forthe La Brea Basin Well Development; $4.0 million for Water Treatment Plant Repair, $8.0million for Land Acquisition.

Awards. The Government Finance Officers Association (GFOA) awarded a Certificate ofAchievement for Excellence in Financial Reporting to the City for it comprehensive annualfinancial report for the fiscal year ended June 30, 2018. In order to be awarded a Certificateof Achievement, the City published an easily readable and efficiently organizedcomprehensive annual financial report. The report satisfied both generally acceptedaccounting principles and applicable legal requirements.

The Certificate of Achievement from the GFOA is valid for a period of one year. Webelieve that our current comprehensive annual financial report continues to meet theCertificate of Achievement requirements and we are submitting it to the GFOA todetermine its eligibility for another certificate.

Acknowledgements. The preparation of the comprehensive annual financial report wasmade possible by the dedicated service of the entire staff of the Finance Department. Eachmember of the department has our sincere appreciation for the contribution made in thepreparation of this report.

In closing, without the leadership and support of the City Council of the City, preparationof this report. as well as the favorable financial results of the past year, would not havebeen possible.

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12

FINANCIALSECTION

The financial section contains the City’s basic financialstatements and required supplementary information(management’s discussion and analysis and funding progressof the City’s two defined benefit pension plans), as well as theindependent auditors’ report. In addition, the financial sectionprovides information on each individual fund and componentunit for which data are not provided separately within the basicfinancial statements.

Crowe LLPIndependent Member Crowe Global

INDEPENDENT AUDITOR’S REPORT

To the Honorable Mayor and Members of the City CouncilCity of Beverly HillsBeverly Hills, California

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Beverly Hills, California (the City), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2019, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America..

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the schedule of changes in net pension liability and related ratios, the schedule of contributions - CalPERS plan, and the schedule of changes in total other post-employment benefitliability and related ratios, identified as required supplementary information (RSI) in the accompanying table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual fund statements and schedules, introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual fund statements and schedules, except for the schedule of capital assets used in the operation of governmental funds for the year ended June 30, 2018, as listed in the table of contents, are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements for the year ended June 30, 2019 and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund statements and schedules, except for the schedule of capital assets used in the operation of governmental funds for the year ended June 30, 2018, are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

We also previously audited, in accordance with auditing standards generally accepted in the United States of America, the basic financial statements of the City of Beverly Hills as of and for the year ended June 30, 2018 (not presented herein), and have issued our report thereon dated December 2�, 2018, which contained unmodified opinions on the respective financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information. The schedule of capital assets used in the operation of governmental funds, for the year ended June 30, 2018 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the 2018 financial statements. The schedule of

15

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capital assets used in the operation of governmental funds for the year ended June 30, 2018, has been subjected to the auditing procedures applied in the audit of the 2018 basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare those financial statements or to those financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of capital assets used in the operation of governmental funds for the year ended June 30, 2018, is fairly stated in all material respects in relation to the basic financial statements as a whole for the year ended June 30, 2018.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, andaccordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December �, 2019, on our consideration of the City of Beverly Hills, California’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Crowe LLP

Costa Mesa, California December �, 2019

16

CITY OF BEVERLY HILLS, CALIFORNIA

Management's Discussion and Analysis

June 30, 2019

As management of the City of Beverly Hills, California (City), we offer readers of theCity’s financial statements this narrative overview and analysis of the financial activities ofthe City for the fiscal year ended June 30, 2019. We encourage readers to consider theinformation presented here in conjunction with additional information that we havefurnished in our letter of transmittal, which can be found on pages 1 - 9 of this report.

(A) FINANCIAL HIGHLIGHTS

The assets and the deferred outflows of resources of the City exceeded its liabilities

and deferred inflows of resources at the close of the most recent fiscal year by

$889.2 million (net position), which is $76.5 million higher than the previous year's

net position. This change in net position is due primarily to revenues exceeding

expenses. If comparing to prior year, charges for services increased by $14.4

million, tax revenues by $9.1 million, investment income by $7.6 million, and other

revenues by $8.0 million, while citywide expenses increased only by $9.5 million.

The unrestricted portion of net position as of June 30, 2019 is $322.2 million and

may be used to meet the City’s ongoing obligations to citizens and creditors.

As of the close of the current fiscal year, the City’s Governmental Funds (e.g.

General Fund, Capital Projects Funds, Special Revenue Funds, etc.) reported

combined fund balances of $317.1 million, an increase of $12.6 million from the

prior year. Of this amount, $262.7 million, or approximately 82.8%, of total fund

balances are reported as either “Committed” ($211.8 million), “Nonspendable”

($14.2 million), or “Restricted” ($36.7 million) fund balances, leaving $54.4

million available as Unassigned for spending at the City’s discretion. This increase

in the City’s governmental funds reported combined fund balances was the result of

continued strong tax revenue growth, charges for services and fines, and a reduction

in transfers out from the General Fund and Other Governmental Funds.

At the end of the current fiscal year, the Committed, Restricted, and Nonspendable

fund balance for the General Fund alone was $192.4 million, or 86.8% of total

General Fund balance. The largest portions of this total represents the amount set

aside by Council policy for emergencies and contingencies equal to 40.0% of

operating revenues, or $110.9 million, a budget stabilization reserve of $13.0

million, and the set-asides for pension and retiree medical unfunded liabilities in the

amount of $23.0 million and $10.0 million, respectively.

The City’s net capital assets (land, buildings, equipment, infrastructure, less

accumulated depreciation) were at $718.4 as of June 30, 2019, decreasing by $(7.6)

million over the previous year due to yearly depreciation exceeding newly

capitalized assets.

The City’s net long-term liabilities slightly decreased by $48.4 million to $567.7

million, primarily as the result of annual bond repayments.

(B) OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the City’s basicfinancial statements. The City’s basic financial statements comprise three components:government-wide financial statements, fund financial statements and notes to basicfinancial statements. This report also contains supplementary information in addition to thebasic financial statements.

Government-wide Financial Statements

The government-wide financial statements are designed to provide readers with a broadoverview of the City’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the City’s assets, deferredoutflows of resources, liabilities, deferred inflows of resources, with the difference betweenthe four reported as net position. Over time, increases or decreases in net position mayserve as a useful indicator of whether the financial position of the City is improving ordeteriorating.

The statement of activities presents information showing how the City’s net positionchanged during the most recent fiscal year. All changes in net position are reported as soonas the underlying event giving rise to the change occurs, regardless of the timing of relatedcash flows. Thus, revenues and expenses are reported in this statement for some items thatwill only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned butunused vacation leave).

Both of the government-wide financial statements distinguish functions of the City that areprincipally supported by taxes and intergovernmental revenues (governmental activities)from other functions that are intended to recover all or a significant portion of their coststhrough user fees and charges (business-type activities). The governmental activities of theCity include general government, public safety, public services, culture and recreation anddebt service. The business-type activities of the City include operations of its Water,Wastewater and Solid Waste utilities, Parking Facilities operations, Parking Authority, andStorm Water activities.

The government-wide financial statements include not only the City itself (known as theprimary government), but also activities of three legally separate component units: theParking Authority of the City of Beverly Hills, the Beverly Hills Public FinancingAuthority, and The City of Beverly Hills Charitable Community Foundation. Because theCity Council acts as (or appoints) the governing board for each of these component unitsand because they function as part of the City government, their activities are blended withthose of the primary government.

18

CITY OF BEVERLY HILLS, CALIFORNIA

Management's Discussion and Analysis

June 30, 2019

(B) OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resources thathave been segregated for specific activities or objectives. The City, like other state andlocal governments, uses fund accounting to ensure and demonstrate compliance withfinance-related legal requirements. All of the funds of the City can be divided into twocategories: governmental funds and proprietary funds.

Governmental Funds

Governmental funds are used to account for essentially the same functions reported asgovernmental activities in the government-wide financial statements. However, unlikethe government-wide financial statements, governmental fund financial statementsfocus on near-term inflows and outflows of spendable resources, as well as on balancesof spendable resources available at the end of the fiscal year. Such information may beuseful in evaluating the City’s near-term financial requirements.

Because the focus of governmental funds is narrower than that of the government-widefinancial statements, it is useful to compare the information presented for governmentalfunds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-termimpact of the City’s near-term financing decisions. Both the governmental fund balancesheet and the governmental fund statement of revenues, expenditures and changes infund balances provide a reconciliation to facilitate this comparison betweengovernmental funds and governmental activities.

The City maintains 24 individual governmental funds. Information is presentedseparately in the governmental fund balance sheet and in the governmental fundstatement of revenues, expenditures and changes in fund balances for the General Fundand the Infrastructure Capital Projects Fund, each of which are considered to be majorfunds. Data from the other 22 governmental funds are combined into a single,aggregated presentation. Individual fund data for each of these nonmajor governmentalfunds is provided in the form of combining statements in the Additional FinancialInformation section of this report.

The City adopts an annual appropriated budget for its General Fund, each of its specialrevenue funds, its debt service fund, its capital projects fund and its permanent funds. Abudgetary comparison statement is provided for each of the City’s governmental fundsto demonstrate compliance with this budget. The budgetary comparison statement forthe General Fund is located in the basic financial statements; the budgetary comparisonstatements for the Infrastructure Capital Projects Fund and the non-major governmentalfunds are presented in the Additional Financial Information section of this report.

The basic governmental fund financial statements can be found on pages 32 - 41 of this

report.

Proprietary Funds

The City maintains two different types of proprietary funds. Enterprise funds are usedto report the same functions presented as business-type activities in the government-wide financial statements. The City uses Enterprise Funds to account for its Water,Wastewater and Solid Waste utilities, its Parking Facilities operations, including theParking Authority, and its Stormwater activities. Internal Service Funds are anaccounting device used to accumulate and allocate costs internally among the City’svarious functions. The City uses internal service funds to account for the followingactivities:

Information technology assets and services,

Governmental capital assets and related debt (except for infrastructure and fine art

collection assets and related debt which are each maintained in a separate fund and

reported as part of the governmental activities columns of the government-wide

financial statements),

Vehicles and wheeled equipment,

Office and operational equipment,

Reprographics equipment and operations,

Cable television operations,

Policy, administration and legal services,

Self-insurance activities, including:

Liability insurance,

Workers’ compensation,

Unemployment insurance, and

Employee benefits.

Because these services predominately benefit governmental rather than business-typefunctions, they have been included within governmental activities in the government-widefinancial statements.

Proprietary funds provide the same type of information as the government-wide financialstatements, only in more detail. The proprietary fund financial statements provide separateinformation for the Water, Wastewater, Solid Waste, Parking Facilities, Stormwater and

19

CITY OF BEVERLY HILLS, CALIFORNIA

Management's Discussion and Analysis

June 30, 2019

(B) OVERVIEW OF THE FINANCIAL STATEMENTS (CONTINUED)

Fund Financial Statements (continued)

Proprietary Funds (continued)

Parking Authority operations, each of which is considered a major fund of the City, withthe exemption of the Stormwater fund. Conversely, the internal service funds are combinedinto a single, aggregated presentation in the proprietary fund financial statements.Individual fund data for the internal service funds is provided in the form of combiningstatements in the Additional Financial Information section of this report. The basicproprietary fund financial statements can be found on page starting at page 38 of thisreport.

Notes to the Basic Financial Statements

The notes to the basic financial statements provide additional information that is essentialto a full understanding of the data provided in the government-wide and fund financialstatements. The notes to the basic financial statements can be found on pages 46 - 89 of thisreport.

Other Information

In addition to the basic financial statements and accompanying notes, this report alsopresents certain required supplementary information concerning the City’s progress infunding its obligation to provide pension benefits to its employees. Requiredsupplementary information can be found on page 90 of this report.

The combining statements referred to earlier in connection with nonmajor governmentalfunds and internal service funds, together with information on the Infrastructure CapitalProjects Fund budget comparison and capital assets used in the operation of governmentalfunds (those capital assets not included in internal service funds), are presentedimmediately following the required supplementary information on pensions. Combiningand individual fund statements and schedules, and information on governmental fundcapital assets can be found on pages 97 - 133 of this report.

(C) GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net position may serve over time as a useful indicator of the City’sfinancial position. In the case of the City, assets exceeded liabilities by $889.2 million atthe close of the most recent fiscal year.

A large portion of the City’s net position, $519.1 million (58.4%), reflects its netinvestment in capital assets (e.g., land, buildings, utility and general governmentinfrastructure, machinery and equipment, etc.), less any related debt used to acquire thoseassets that is still outstanding. The City uses these capital assets to provide services tocitizens; consequently, these assets are not available for future spending. Although the

City’s investment in its capital assets is reported net of related debt, it should be noted thatthe resources needed to repay this debt must be provided from other sources, since thecapital assets themselves cannot be used to liquidate these liabilities.

Net Assets at June 30, 2019 and 2018

Another large portion of the City’s net position, $322.2 million (36.2%), is unrestrictedand, as noted earlier, is available to meet the City’s ongoing obligations to citizens andcreditors.

A smaller portion of the City’s net position, $47.9 million (5.4%), represents resources thatare subject to external restrictions on how they may be used. Examples include restrictionson funds to be used for repayment of long-term debt, construction of capital assets (unspentproceeds from long-term debt issues) and to restrictions in the City’s special revenue andpermanent funds.

At the end of the fiscal year then, due to the City’s strong financial position and despite thegrowth of the net pension liability this year, the City is able to report strong positivebalances in net position for both its governmental activities as well as its businessactivities.

20

CITY OF BEVERLY HILLS, CALIFORNIA

Management's Discussion and Analysis

June 30, 2019

(C) GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)

The City’s governmental current assets increased by $46.5 million (primarily strong growthin cash and investments) to $596.7 million, while current assets for business-type activitiesgrew by $18.8 million to $200.5 million.

City of Beverly Hills, California (000's)

As of June 30, 2019 and 2018

Governmental Activities Business-type Activities Total

2019 2018 2019 2018 2019 2018

ASSETSCurrent assets $ 596,702 550,247 200,543 181,697 797,245 731,944Restricted and other assets 38,018 41,742 (30,645) (30,034) 7,373 11,708Capital assets 433,387 429,486 285,023 296,560 718,410 726,046

Total assets 1,068,107 1,021,475 454,922 448,223 1,523,029 1,469,698

Deferred outflows of resources 48,183 64,134 4,825 6,801 53,008 70,935

LiabilitiesCurrent liabilities 78,218 70,947 19,652 21,106 97,870 92,053Long-term liabilities, net of current

portion 454,691 492,458 113,050 123,658 567,741 616,116

Total liabilities 532,909 563,405 132,702 144,764 665,611 708,169Deferred inflows of resources 18,564 17,009 2,667 2,723 21,231 19,732

Net positionNet investment in capital assets 352,327 336,227 166,783 166,268 519,110 502,495Restricted 46,480 47,376 1,401 6,313 47,881 53,689Unrestricted 166,010 121,592 156,193 134,957 322,203 256,549

Total net position $ 564,817 505,195 324,377 307,538 889,194 812,733

Net capital assets overall grew to $718.4 million at June 30, 2019. Growth in capital assetswas mainly concentrated in governmental activities while business-type activities showed aslight decline due to the depreciation of assets.

Long-term liabilities decreased by $48.4 million to $567.7 million primarily as a result ofannual bond repayments

Total revenues increased 9.6% ($39.6 million) from fiscal year 2017-2018 to fiscal year2018-2019. The City experienced an increase of 4.4% in tax revenues ($9.1 million), and a4.4% ($7.6 million) increase in revenue from charges for services provided, fines,forfeitures, and penalties.

Total expenses increased by 3.8% ($13.6 million) over the prior year. The increases wereprimarily for public services and expenses went down for culture and recreation functions.

Governmental Activities

The total growth in net position for the City was $59.6 million for the fiscal year endedJune 30, 2019 compared to $29.5 million in fiscal year 2017-2018, an $14.1 millionincrease. The primary factors in the growth in governmental revenues were as follows:

Charges for services increased by $8.8 million (17.3%) to $59.8 million in fiscal year

2018-2019 due to the increasing demand for City services.

Property taxes are levied based on assessed values and real estate sales in fiscal year

2018-2019 were up as the market continued to gain strength. This resulted in a $4.6

million (6.8%) increase in property taxes to a total of $73.3 million.

Transient occupancy tax revenues increased $0.9 million (1.8%) from the prior year to

$50.0 million, also as a result of improving economic conditions.

Investment revenues also increased by $4.3 million due to imporved interest rates and

market returns.

21

CITY OF BEVERLY HILLS, CALIFORNIA

Management's Discussion and Analysis

June 30, 2019

(C) GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)

City of Beverly Hills' Change in Net Position (000's)As of June 30, 2019 and 2018

GovernmentalActivities

Business-typeActivities Total

2019 2018 2019 2018 2019 2018

RevenuesProgram revenues

Charges for services $ 59,777 50,961 120,621 121,848 180,398 172,809Op. grants & cont. 1,186 791 - - 1,186 791Cap. grants & cont. 4,494 4,523 374 303 4,868 4,826

General revenuesTaxes

Business 52,057 51,673 - - 52,057 51,673Property 73,305 68,668 - - 73,305 68,668Sales 37,410 34,017 - - 37,410 34,017Transient occupancy 50,023 49,120 - - 50,023 49,120Other 5,528 5,745 - - 5,528 5,745

Investments 19,763 11,396 5,133 1,907 24,896 13,303Other 20,566 10,033 1,394 1,064 21,960 11,097

Total revenues 324,109 286,927 127,522 125,122 451,631 412,049

ExpensesGeneral government 5,323 4,971 - - 5,323 4,971Public safety 138,621 145,288 - - 138,621 145,288Public service 53,558 36,331 - - 53,558 36,331Culture and recreation 58,169 58,990 - - 58,169 58,990Interest on long-term debt 5,072 5,568 - - 5,072 5,568Water - - 36,916 33,644 36,916 33,644Parking facilities - - 19,948 18,978 19,948 18,978Solid waste - - 15,512 15,323 15,512 15,323Wastewater - - 7,166 8,711 7,166 8,711Stormwater - - 5,096 3,734 5,096 3,734Parking authority - - 29,789 30,074 29,789 30,074

Total expenses 260,743 251,148 114,427 110,464 375,170 361,612

Excess (deficiency) beforecontributions, special items,and transfers 63,366 35,779 13,095 14,658 76,461 50,437

Transfers (3,746) (6,227) 3,746 6,227 - -

Change in net position 59,620 29,552 16,841 20,885 76,461 50,437Net position, July 1 505,195 566,906 307,537 298,751 812,732 865,657Prior period adjustment - (91,264) - (12,099) - (103,363)Net position, June 30 $ 564,816 505,195 324,377 307,537 889,193 812,731

The City of Beverly Hills has four major tax sources, business, property, sales and transientoccupancy taxes, which provide for a wide, diversified, and stable tax base and reduce the

City's reliance on any one source.

The City continued its efforts to maintain effective cost controls. Governmental activitiesexpenses during fiscal year 2018-2019 were allocated as shown in the following chart:

22

CITY OF BEVERLY HILLS, CALIFORNIA

Management's Discussion and Analysis

June 30, 2019

(C) GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED)

Public safety expenses decreased 4.6% to $138.6 million.

Public services expenses increased 47.4% to $53.6 million.

Culture and recreation expenses decreased 1.4% to $58.2 million.

General government expenses increased 7.1% to $5.3 million.

Interest on long-term debt decreased 8.9% to $5.1 million.

Business-type Activities

Business-type activities increased the City’s net position by $16.8 million in fiscal year2018-2019 to $324.4 million. Key factors related to business-type activities include:

Total revenues for business-type activities exceeded total expenses for the fiscal year

by $16.8 million.

Total expenses in the business-type activities increased by 3.6% for the year to $114.4

million.

(D) FINANCIAL ANALYSIS OF THE CITY'S FUNDS

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance withfinance-related legal requirements.

Governmental Funds

The focus of the City’s governmental funds is to provide information on near-term inflowsand outflows and balances of spendable resources. Such information is useful in assessingthe City’s financing requirements. In particular, the unreserved fund balance may serve as auseful measure of the City’s net resources available for spending at the end of the fiscalyear.

As of the end of the 2018-2019 fiscal year, the City’s governmental funds report combinedending fund balances of $317.1 million, an increase of $12.6 million over the prior year.Operations for the current year provided a $13.0 million (4.7%) increase in revenues to$289.7 million, with most of that change coming from an increase in tax revenues andcharges for services. A $16.8 million (6.9%) increase in expenditures to $261.8 million wasmostly due to increases in public service, with smaller increases in general government. Nettransfers from governmental funds to other funds were $15.4 million for the year. This nettransfer out was mostly driven by a $22.8 million transfer out for the Oil Well PluggingProject.

The components of fund balance include the following line items:

a) Nonspendable fund balance - $9.6 million (inherently nonspendable) include theportion of net resources that cannot be spent because of their form, such as long-termreceivables, and the portion of net resources that cannot be spent because they must bemaintained intact.

b) Restricted fund balance - $36.7 million (externally enforceable limitations on use)include amounts subject to limitations imposed by creditors, grantors, contributors, orlaws and regulations of other government

c) Committed fund balance - $211.8 million (self-imposed limitation set in place prior tothe end of the period) Limitation imposed at the highest level of decision making thatrequires formal action at the same level to remove.

d) Assigned fund balance - $17.8 million (limitation resulting from intended use)consists of amounts where the intended use is established by the highest level ofdecision making (City council). Intended use is established by official designated forthat purpose. For the City, the City Manager is the designated official.

e) Unassigned fund balance - $36.5 million (residual net resources) is the total fundbalance in the general fund in excess of nonspendable, restricted, committed, andassigned fund balance and the excess of nonspendable, restricted, and committed fundbalance over total fund balance.

The General Fund is the chief operating fund of the City. At the end of the 2018-2019fiscal year, the fund balance components were reported as nonspendable, $9.5 million;committed, $167.2 million; assigned $8.4 million, and unassigned $36.5 million for a totalGeneral Fund balance of $221.7 million.

The fund balance of the City’s General Fund increased by $9.0 million during the currentfiscal year. Though revenues exceeded expenditures by over $52.9 million on 2018-2019,there were substantial transfers out of the General Fund during the fiscal year totaling $44.8million for programs such as Oil Well Plugging Project ($22.8 million) and land acquisition($8.1 million).

Enterprise Funds

The City’s enterprise funds account for financial transactions of the City’s business-typefunction that primarily serve external customers. Total net position of the enterprise fundstotaled $324.4 million, an increase of $16.9 million (5.5%). The increase to total netposition is the result of effective rate settings and managing available resources.

Other factors concerning the finances of these funds are as follows:

Operating revenues for the Water Enterprise decreased by $0.7 million (1.8%) from

$38.4 to $37.7 due primarily to the water conservation efforts. Operating expenses

increased by $3.6 million (11.4%) due to increase in salaries and water infrastructure

23

CITY OF BEVERLY HILLS, CALIFORNIA

Management's Discussion and Analysis

June 30, 2019

(D) FINANCIAL ANALYSIS OF THE CITY'S FUNDS (CONTINUED)

Enterprise Funds (continued)

maintenance. After factoring in non-operating items, net position in the Water

Enterprise increased by $3.3 million to $115.8 million.

Operating revenues for the parking Facilities Enterprise decreased by $(0.4) million

due to change in tenant occupancy rates ($0.2) million and no longer offering parking

meter collection services to the City of West Hollywood ($0.2) million. Operating

expenses rose by $1.10 million (6.7%), primarily due to increases in maintenance and

operation expenses ($0.6) million and increase in infrastructure maintenance ($0.5)

million. After non-operating items are included, net income was $12.9 million. This net

income increased the net position from a negative $(3.0) million to a positive $9.9

million.

Operating revenues for the Parking Authority decreased $(0.1) million (0.3)%, while

operating expenses decreased $0.2 million (0.7%). Generated net operating income

remained flat at $1.1 million when compared to prior fiscal year. However, after

factoring in non-operating transactions, such as interest on debt service and other

revenues totaling $0.7 million and taking into consideration the $8.0 million transfer to

Parking Facilities for land acquisition, the change in net position was a decrease of

$(6.2) million and totaled $72.2 million at fiscal year-end.

Operating revenues for the Wastewater Enterprise increased by $0.04 million (0.3)%

and operating expenses decreased by $1.4 million (16.8%) mainly due to a reduction

in Los Angeles County Hyperion Plant shared operational costs. Overall, net position

increased $6.7 million to $92.7 million.

Operating revenues for the Solid Waste Enterprise increased $0.2 million (1.3%) to

$15.5 million, while operating expenses increased $0.2 million to $15.5 million.

Overall, the change in net position in the Solid Waste Enterprise Fund increased $0.6

million to $20.1 million.

Operating revenues for the Stormwater Enterprise were flat at $1.8 million and

operating expenses were up $1.4 million (36.5%), generating a loss before transfers of

($2.9) million. Subsidy transfers in of $2.4 million largely from the General Fund

resulted in a decrease in the net position in the Fund by $0.4 million to $13.8 million.

Internal Service Funds

The City’s internal service funds are an accounting device used to accumulate and allocatecosts internally among the City’s various functions. The City uses internal service funds toaccount for its information technology assets and services, governmental capital assets and

related debt (except for infrastructure and fine art collection assets and related debt),reprographics equipment and operations, cable television operations and the Policy,Administration and Legal services provided. The City also uses internal service funds toaccount for its self-insurance activities, including liability insurance, workers’compensation, unemployment insurance and employee benefits. Because these servicespredominately benefit governmental rather than business-type functions, they have beenincluded within governmental activities in the government-wide financial statements.

Factors concerning the finances of the internal service funds have already been addressedin the discussion of the City’s governmental activities.

(E) BUDGETARY HIGHLIGHTS

The City adopts annual appropriated operating budgets for its governmental funds (GeneralFund, special revenue funds, debt service fund, capital projects fund and permanent funds),and reports the results of operations on a budgetary comparison basis. The City also usesannual financial plans as a management tool for its enterprise and internal service funds,although the City does not report the results of these funds on a budgetary comparisonbasis.

When preparing its budgets, the City attempts to estimate its revenues using realistic, butconservative, methods so as to budget its expenditure appropriations and activities in aprudent manner. As a result, the City Council adopts budget adjustments during the courseof the fiscal year to reflect both changed priorities and availability of additional revenues toallow for expansion of existing programs. During the course of the year, the City Councilcan amend the originally adopted budget to reappropriate prior year approved projects andexpenditures, increase legal and professional services, move up the timing of expendituresfor capital projects, provide additional funding for community support, and tourism andpromotions activities.

General Fund

The General Fund reflected a net total favorable budget variance of $30.1 million whencomparing actual amounts to the final budget for the 2018-2019 fiscal year. This budgetvariance reflects a favorable variance in revenues of $21.5 million and a favorable variancein total expenditures and net transfers out of $12.8 million couple with an unfavorabledifference of $4.2 million in other financing sources.

(F) CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

The City’s investment in capital assets and CIP for its governmental and business-typeactivities amounts to $1.2 billion ($718.4 million net of accumulated depreciation and

24

CITY OF BEVERLY HILLS, CALIFORNIA

Management's Discussion and Analysis

June 30, 2019

(F) CAPITAL ASSETS AND DEBT ADMINISTRATION (CONTINUED)

Capital Assets (continued)

construction in progress) as of June 30, 2019, which is a 1.1% decrease over the prior year.This investment in capital assets includes land, buildings, utility systems, improvementsother than buildings, infrastructure (roads, sidewalks, streetlights, etc.), machinery andequipment, the City’s fine art collection and construction in progress. The total increase inthe City's net investment in capital assets was $16.6 million (3.3%)

City of Beverly Hills' Capital Assets, Net of Accumulated Depreciation (000's)As of June 30, 2019 and 2018

GovernmentalActivities

Business-typeActivities Total

2019 2018 2019 2018 2019 2018

Land $ 73,430 70,827 33,114 33,114 106,544 103,941Buildings 250,514 251,018 214,495 214,495 465,009 465,513Utility systems - - 75,253 75,212 75,253 75,212Improvements other than

buildings 104,844 100,450 172,513 172,517 277,357 272,967Infrastructure 178,073 146,270 10,998 11,048 189,071 157,318Machinery and equipment 82,252 78,089 10,118 11,949 92,370 90,038Fine art collection 3,790 3,063 - - 3,790 3,063Construction in progress 23,818 45,945 8,348 6,597 32,166 52,542Accumulated Depreciation (283,334) (266,176) (239,816) (228,372) (523,150) (494,548)

Total capital assets, net $ 433,387 429,486 285,023 296,560 718,410 726,046

The City has an aggressive capital improvement program totaling over $313.0 million overthe next five years (fiscal year 2018-2019 through 2022-2023). The City budgets theseprojects in six major categories: general government buildings, infrastructure andproperties; streets, alleys and sidewalks; parks and recreation facilities; enterprisebuildings, infrastructure and properties; and major development and infrastructure projects.Among these categories, the major projects include scheduled replacement of vehicles($17.0 million), improvements to City infrastructure including street and sidewalkimprovements, streetscape, street resurfacing and replacement of street lights ($25.4million), improvements to City buildings and facilities and acquisition of land ($51.5million), improvements to the City’s parks and recreation facilities ($8.2 million), upgradesto the City’s information technology infrastructure ($36.2 million – including $10.0 millionfor a Fiber to the Premise project) and repairs and upgrades to the City’s water system($65.8 million – including $31.6 million for groundwater development). The City hasbudgeted capital projects expenditures totaling $69.0 million for fiscal year 2018-2020.

Additional information on the City’s capital assets can be found in Note 7 to the basicfinancial statements on pages 66 of this report.

Long-term Debt

At the end of the current fiscal year, the City had total long-term bonded debt outstandingof $143.0 million, down by $25.9 million from the prior year. Other long-term obligationsinclude pension obligations of $255.3 million, other post employment benefits $109.9million, notes payable of $15.5 million, employee-compensated absences of $10.6 million,capital leases/leased property deposits of $1.3 million and outstanding claims of $31.4million.

City of Beverly Hills' Outstanding Long-Term Debt (000's)As of June 30, 2019 and 2018

GovernmentalActivities

Business-typeActivities Total

2019 2018 2019 2018 2019 2018

Revenue bonds $ 62,794 75,156 80,233 93,734 143,027 168,890Capital leases 773 1,015 - - 773 1,015Notes payable 15,464 17,677 - - 15,464 17,677Compensated absences 10,571 17,291 - - 10,571 17,291Claims payable 31,424 33,820 - - 31,424 33,820Net pension liability 238,750 248,971 16,536 17,299 255,286 266,270Total other

postemploymentbenefits 94,564 98,208 15,333 11,718 109,897 109,926

Leased property deposits 351 321 949 907 1,300 1,228

Total debt $ 454,691 492,459 113,051 123,658 567,742 616,117

Ratings on outstanding bonds are provided below. The ratings are from Moody’s InvestorServices, Fitch, Inc. and Standard and Poor’s.

City of Beverly Hills' Debt RatingsDebt Issue Moody's Fitch's S&P

Revenue bonds:2009 Lease Revenue Bonds Aa2 AA+ AA+2010 Lease Revenue Bonds Aa2 AA+ AA+2012 Lease Revenue Refunding Bonds Aa1 AA+ AA+2012 Water Revenue Refunding Bonds Aa1 AAA AA+

Additional information on the City’s long-term debt can be found in Note 8 to the basicfinancial statements on pages 66 of this report.

25

CITY OF BEVERLY HILLS, CALIFORNIA

Management's Discussion and Analysis

June 30, 2019

(G)ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES

The City Council adopted a conservative budget for fiscal year 2019-2020 that containsmany ambitious work plan objectives that are intended to address the highest priorities inthe community and the goals of the City Council. This budget also sets the financialfoundation to establish an accurate and understandable assessment and tracking of the usesand sources of all funds. The fiscal year 2019-2020 budget presents a number ofopportunities and challenges to improve overall service to the community in terms of publicsafety, development of greater self-reliance for water; providing high-speed fiber opticinternet service to all citizens and businesses in the City; maintaining facilitiesinfrastructure; and furthering the Water Enterprise Plan and water conservation. By anystandard this is an aggressive program of work that will challenge the capacity of staff andthe City Council to accomplish.

The proposed General Fund budget for fiscal year 2019-2020 includes the followingassumptions:

A continuation of modest growth in revenues as a result of current economic

conditions.

Tight controls on operating expenditures consistent with the revenue forecasts.

Maintenance of service levels and programs to the extent possible and minimal

increases in service levels where appropriate.

(H)REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of the City’s finances forreaders of the financial statements. Questions concerning any of the information providedin this report or requests for additional financial information should be addressed to Jeff S.Muir, Director of Finance, City of Beverly Hills, 455 N. Rexford Drive, Room 350, BeverlyHills, California 90210. Additional information, including the prior year’s CAFR and priorand current year budgets are available on the City’s website at www.beverlyhills.org.

26

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A-1

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Net Postion

June 30, 2019Governmental

ActivitiesBusiness-type

Activities Total

ASSETS

Current assetsCash and investments $ 560,993,294 188,506,757 749,500,051Accounts receivables, net 14,946,863 9,701,514 24,648,377Interest receivable 3,394,873 1,066,734 4,461,607Taxes receivable 16,199,858 - 16,199,858Intergovernmental receivables 628,462 - 628,462Inventories 496,239 1,268,239 1,764,478Prepaid items 42,839 - 42,839

Total current assets 596,702,428 200,543,244 797,245,672

Noncurrent assetsRestricted assets

Temporarily restrictedCash and investments 5,850,421 1,439,260 7,289,681Interest receivable 1,930 - 1,930

Permanently restrictedCash and investments 81,381 - 81,381

Total restricted assets 5,933,732 1,439,260 7,372,992

Other noncurrent assetsInternal balances 32,084,158 (32,084,158) -

Total other noncurrent assets 32,084,158 (32,084,158) -

Capital assetsLand 73,430,227 33,114,046 106,544,273Buildings 250,514,209 214,495,187 465,009,396Utility systems - 75,252,959 75,252,959Improvements other than buildings 104,844,051 172,512,883 277,356,934Infrastructure 178,072,949 10,998,431 189,071,380Machinery and equipment 82,251,652 10,117,730 92,369,382Fine art collection 3,789,825 - 3,789,825

692,902,913 516,491,236 1,209,394,149Less accumulated depreciation (283,334,416) (239,816,220) (523,150,636)Construction in progress 23,818,016 8,348,428 32,166,444

Total capital assets, net 433,386,513 285,023,444 718,409,957

Total noncurrent assets 471,404,403 254,378,546 725,782,949

Total assets 1,068,106,831 454,921,790 1,523,028,621

DEFERRED OUTFLOWS OF RESOURCESDeferred outflows - pension 43,594,618 3,171,842 46,766,460Deferred outflows - other postemployment benefits 3,467,741 562,259 4,030,000Deferred amount on refunding, net 1,121,020 1,090,427 2,211,447

Total deferred outflows of resources $ 48,183,379 4,824,528 53,007,907

(Continued)

29

A-1-2

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Net Position, Continued

June 30, 2019Governmental

ActivitiesBusiness-type

Activities Total

LIABILITIES

Current liabilitiesAccounts payable $ 20,701,195 4,141,361 24,842,556Contracts payable 3,123,814 96,968 3,220,782Accrued payroll 4,234,102 337,398 4,571,500Interest payable 261,326 344,007 605,333Current portion of long-term liabilities

Compensated absences 8,080,618 - 8,080,618Outstanding claims 7,321,182 - 7,321,182Capital leases 236,565 - 236,565Notes payable 2,212,945 - 2,212,945Revenue bonds 11,961,979 8,453,021 20,415,000

Intergovernmental liabilities 2,695,274 3,176,880 5,872,154Customer deposits 16,270,355 2,180,404 18,450,759Unearned revenue 1,118,839 921,976 2,040,815

Total current liabilities 78,218,194 19,652,015 97,870,209

Noncurrent liabilities, net of current portionCompensated absences 10,570,810 - 10,570,810Outstanding claims 31,423,688 - 31,423,688Capital leases 772,785 - 772,785Notes payable 15,464,252 - 15,464,252Revenue bonds 62,794,087 80,232,981 143,027,068Net pension liability 238,749,651 16,536,073 255,285,724Total other post employment benefit liability 94,564,345 15,332,655 109,897,000Leased property deposits 351,113 948,686 1,299,799

Total long-term liabilities 454,690,731 113,050,395 567,741,126

Total liabilities 532,908,925 132,702,410 665,611,335

DEFERRED INFLOWS OF RESOURCESDeferred inflows - pension 7,842,537 555,505 8,398,042Deferred inflows - other post employment benefits 10,721,667 1,355,531 12,077,198Deferred credit from sale-leaseback transactions - 755,979 755,979

Total deferred inflows of resources 18,564,204 2,667,015 21,231,219

NET POSITIONNet investment in capital assets 352,326,597 166,782,970 519,109,567Restricted for

Debt service 8,188,397 1,400,812 9,589,209Streets, highways, bikeways, public transit and other related purposes 5,978,670 - 5,978,670Endowment or trust agreement

Expendable 192,557 - 192,557Nonexpendable 81,381 - 81,381

Other purposes 32,039,276 - 32,039,276Unrestricted 166,010,203 156,193,111 322,203,314

Total net position $ 564,817,081 324,376,893 889,193,974

See accompanying notes to basic financial statements.

30

A-2

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Activities

For the Year Ended June 30, 2019

Program RevenuesNet (Expense) Revenue and

Changes in Net Position

Functions/Programs ExpensesCharges for

Services

OperatingGrants and

Contributions

Capital Grantsand

ContributionsGovernmental

ActivitiesBusiness-type

Activities Total

Governmental activitiesGeneral government $ (5,322,726) 7,226,723 1,005,495 70,977 2,980,469 - 2,980,469Public safety (138,621,181) 21,098,498 82,721 255,748 (117,184,214) - (117,184,214)Public service (53,558,379) 21,626,953 98,101 4,168,489 (27,664,836) - (27,664,836)Culture and recreation (58,169,189) 9,824,103 - - (48,345,086) - (48,345,086)Interest on long-term debt (5,071,885) - - - (5,071,885) - (5,071,885)

Total governmental activities (260,743,360) 59,776,277 1,186,317 4,495,214 (195,285,552) - (195,285,552)

Business-type activitiesWater (36,916,363) 37,652,208 - - - 735,845 735,845Parking facilities (19,947,990) 23,477,057 - 303,886 - 3,832,953 3,832,953Solid waste (15,512,448) 15,478,683 - 69,639 - 35,874 35,874Wastewater (7,165,604) 12,687,796 - - - 5,522,192 5,522,192Stormwater (5,095,683) 1,786,592 - - - (3,309,091) (3,309,091)Parking authority (29,789,035) 29,538,317 - - - (250,718) (250,718)

Total business-type activities (114,427,123) 120,620,653 - 373,525 - 6,567,055 6,567,055

Total $ (375,170,483) 180,396,930 1,186,317 4,868,739 (195,285,552) 6,567,055 (188,718,497)

General revenuesTaxes

Business 52,057,454 - 52,057,454Property 73,304,686 - 73,304,686Sales 37,410,459 - 37,410,459Transient occupancy 50,023,265 - 50,023,265Other 5,527,801 - 5,527,801

Unrestricted investment earnings 19,763,110 5,133,077 24,896,187Miscellaneous 20,566,465 1,394,279 21,960,744

Transfers (3,745,548) 3,745,548 -

Total general revenues and transfers 254,907,692 10,272,904 265,180,596

Change in net position 59,622,140 16,839,959 76,462,099

Net position, July 1 505,194,941 307,536,934 812,731,875

Net position, June 30 $ 564,817,081 324,376,893 889,193,974

See accompanying notes to basic financial statements.31

A-3

CITY OF BEVERLY HILLS, CALIFORNIA

Balance Sheet

Governmental Funds

June 30, 2019

General Fund

InfrastructureCapital Projects

Fund

OtherGovernmental

Funds Eliminations

TotalGovernmental

Funds

AssetsCash and investments $ 229,224,612 37,537,914 57,721,089 - 324,483,615Accounts receivable, net 12,808,461 - 531,902 - 13,340,363Interest receivable 1,398,432 299,055 298,492 - 1,995,979Taxes receivable 16,199,858 - - - 16,199,858Interfund receivables 1,081,782 - 420,923 (23,824) 1,478,881Intergovernmental receivables - - 628,461 - 628,461Advances to other funds 5,933,046 - 4,597,708 - 10,530,754Restricted assets

Cash and investments - - 291,326 - 291,326Interest receivable - - 1,930 - 1,930

Total assets $ 266,646,191 37,836,969 64,491,831 (23,824) 368,951,167

Liabilities, deferred inflows of resources, and fund balances

LiabilitiesAccounts payable $ 8,858,459 1,959,343 1,750,485 - 12,568,287Contracts payable - 1,920,590 642,093 - 2,562,683Accrued payroll 3,548,877 - 11,801 - 3,560,678Interfund payables - - 23,824 (23,824) -Intergovernmental payables 2,336,628 - 6,242 - 2,342,870Customer deposits 15,974,855 - 295,500 - 16,270,355Unearned revenue 1,118,839 - - - 1,118,839

Total liabilities 31,837,658 3,879,933 2,729,945 (23,824) 38,423,712

Deferred inflows of resourcesUnavailable revenues 13,146,699 - 310,635 - 13,457,334

Total deferred inflows of resources 13,146,699 - 310,635 - 13,457,334

Fund balances (deficit)Nonspendable 9,478,892 - 4,679,089 - 14,157,981Restricted - - 36,680,165 - 36,680,165Committed 167,235,395 25,683,497 18,930,592 - 211,849,484Assigned 8,404,222 8,273,539 1,161,405 - 17,839,166Unassigned 36,543,325 - - - 36,543,325

Total fund balances (deficit) 221,661,834 33,957,036 61,451,251 - 317,070,121

Total liabilities, deferred inflows of resources, and fund balances $ 266,646,191 37,836,969 64,491,831 (23,824) 368,951,167

See accompanying notes to basic financial statements.

32

A-4

CITY OF BEVERLY HILLS, CALIFORNIA

Reconciliation of Total Governmental Fund Balances to Net Positionof Governmental Activities in the Statement of Net Position

June 30, 2019

Total governmental fund balances (page 32) $ 317,070,121

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities that are not included in internal service funds, are not financial resources and, therefore, are not

reported in the funds. 178,716,758

Certain receivables are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 9,925,546

Certain property tax receivables are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 3,531,784

Internal service funds are used by management to charge the cost of acquisition, construction, financing, maintenance and capital accumulation for

the replacement of governmental capital assets (except for infrastructure and fine art collection assets); operations of the City's computer services,

reprographics and cable TV operations; the City's self-insurance programs and its employee benefits to individual user funds. The assets and

liabilities of the internal service funds are included in governmental activities in the statement of net position. 348,474,017

Governmental long-term liabilities, excluding those liabilities in the City's internal service funds, are not due and payable in the current period and,

therefore, are not reported in the funds.

Long-term debt (28,772,119)

Net pension liability (201,688,494)

Total other post employment benefits liability (86,174,191)

Deferred inflows and outflows 23,733,659

Net position of governmental activities (page 28) $ 564,817,081

See accompanying notes to basic financial statements.33

A-5

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Revenues, Expenditures and Changes in Fund Balances

Governmental Funds

For the Year Ended June 30, 2019

General Fund

InfrastructureCapital Projects

Fund

OtherGovernmental

Funds Eliminations

TotalGovernmental

Funds

RevenuesTaxes $ 212,034,433 - 2,785,892 - 214,820,325Licenses and permits 23,858,262 - 91,725 - 23,949,987Intergovernmental revenue 509,357 - 5,091,383 - 5,600,740Charges for services 12,855,230 - 1,662,327 - 14,517,557Fines, forfeitures and penalties 6,971,366 - - - 6,971,366Use of money and property 9,566,406 1,051,215 1,415,831 - 12,033,452Net change in fair value of investments 618,717 101,712 134,213 - 854,642Miscellaneous 10,832,215 (633) 163,181 - 10,994,763

Total revenues 277,245,986 1,152,294 11,344,552 - 289,742,832

ExpendituresCurrent

General government 4,395,020 - 251,244 - 4,646,264Public safety 128,696,270 - 849,082 - 129,545,352Public service 32,679,639 362 1,180,592 - 33,860,593Culture and recreation 58,181,299 - 23,682 - 58,204,981

Debt serviceInterest expenditures - - 1,258,998 - 1,258,998Principal retirement - - 383,863 - 383,863

Capital outlay 376,463 25,840,640 7,681,509 - 33,898,612

Total expenditures 224,328,691 25,841,002 11,628,970 - 261,798,663

Excess (deficiency) of revenues over expenditures 52,917,295 (24,688,708) (284,418) - 27,944,169

Other financing sources (uses)Transfers in 909,945 23,585,920 6,052,506 - 30,548,371Transfers out (44,794,085) (1,001,593) (157,470) - (45,953,148)

Total other financing sources (uses) (43,884,140) 22,584,327 5,895,036 - (15,404,777)

Net change in fund balances 9,033,155 (2,104,381) 5,610,618 - 12,539,392

Fund balances, July 1 212,628,679 36,061,417 55,840,633 - 304,530,729

Fund balances, June 30 $ 221,661,834 33,957,036 61,451,251 - 317,070,121

See accompanying notes to basic financial statements.

34

A-6

CITY OF BEVERLY HILLS, CALIFORNIA

Reconciliation of the Statement of Revenues, Expenditures andChanges in Fund Balances of Governmental Funds to the Statement of Activities

For the Year Ended June 30, 2019Net change in fund balances - total governmental funds (page 34) $ 12,539,392

Amounts reported for governmental activities in the statement of activities are different because:

Tax and other revenues:

Certain property tax revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 3,531,784

Property tax revenues that become available and are recognized in the current year that relate to prior years are not reported as revenues in the

statement of activities. (1,018,303)

Business tax revenues that become available and are recognized in the current year that relate to prior years are not reported as revenues in the

statement of acitivities. (47,493)

Certain revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 7,322,541

Interest revenues:

Certain interest receivables are not available to pay for current-period expenditures and, therefore, are deferred in the funds. 183,327

Interest revenues that become available and are recognized in the current year that relate to prior years are not reported as revenues in the

statement of activities. (597,895)

Internal service funds are used by management to charge the cost of certain services to individual funds. The net revenues (expenses) of certain

activities of internal service funds is reported as governmental activities. 39,636,149

Certain pension related expense in the statement of activities that do not constitute current use of financial resources are not reported as expenses in the

funds. (7,659,311)

Costs for infrastructure and fine art collection assets are reported as capital outlay expenditures in the fund financial statements. However, in the

statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

Capital outlay expenditures 12,323,446

Depreciation expense (6,988,814)

The issuance of long-term debt (e.g., bonds) provides current financial resources to governmental funds, while the repayment of the principal of long-

term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also,

governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are

deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of certain long-term debt and

related items. 397,317

Change in net position of governmental activities (page 31) $ 59,622,140

See accompanying notes to basic financial statements.35

A-7

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual

General Fund

For the Year Ended June 30, 2019

Budgeted Amounts Actual

Variance withFinal Budget-

Over

Original Final Amounts (Under)

RevenuesTaxes

Business $ 50,650,000 50,650,000 51,743,640 1,093,640Property 70,000,000 70,000,000 70,791,205 791,205Sales 32,495,000 32,495,000 37,410,459 4,915,459Transient occupancy 49,098,000 49,098,000 50,023,265 925,265Other 1,300,000 1,300,000 2,065,864 765,864

Licenses and permits 20,846,041 20,846,041 23,858,262 3,012,221Intergovernmental revenue 484,000 484,000 509,357 25,357Charges for services 11,078,811 11,078,811 12,855,230 1,776,419Fines, forfeitures and penalties 9,142,664 9,142,664 6,971,366 (2,171,298)Use of money and property 6,759,774 6,759,774 9,566,406 2,806,632Net change in fair value of investments - - 618,717 618,717Miscellaneous 3,899,340 3,899,340 10,832,215 6,932,875

Total revenues 255,753,630 255,753,630 277,245,986 21,492,356

ExpendituresCurrent

General governmentFinancial services 1,912,702 2,091,722 1,789,799 (301,923)Economic development 578,034 584,034 576,072 (7,962)Non-departmental 2,687,066 2,687,066 2,029,149 (657,917)

Total general government 5,177,802 5,362,822 4,395,020 (967,802)

Public safetyPolice services 80,698,697 81,162,609 79,838,699 (1,323,910)Fire control 45,444,382 45,506,010 44,059,181 (1,446,829)Building and safety 4,842,591 5,287,735 4,798,390 (489,345)

Total public safety 130,985,670 131,956,354 128,696,270 (3,260,084)

(Continued)36

A-7-2

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

General Fund

For the Year Ended June 30, 2019

Budgeted Amounts Actual

Variance withFinal Budget-

Over

Original Final Amounts (Under)

Public serviceEngineering and administration $ 5,399,554 12,919,279 9,558,700 (3,360,579)Streets and subdrains 9,444,342 9,457,636 8,815,065 (642,571)Planning services 11,983,989 13,065,980 11,565,856 (1,500,124)Community services 2,790,431 2,982,390 2,740,018 (242,372)

Total public service 29,618,316 38,425,285 32,679,639 (5,745,646)

Culture and recreationRecreation and parks 11,793,665 12,088,832 11,802,007 (286,825)Library 12,364,007 12,356,040 12,083,943 (272,097)Education 23,348,784 23,476,582 22,683,703 (792,879)Promotion and tourism 10,851,106 11,881,411 11,611,646 (269,765)

Total culture and recreation 58,357,562 59,802,865 58,181,299 (1,621,566)

Capital outlay 1,122,590 1,577,033 376,463 (1,200,570)

Total expenditures 225,261,940 237,124,359 224,328,691 (12,795,668)

Excess of revenues over expenditures 30,491,690 18,629,271 52,917,295 34,288,024

Other financing sourcesTransfers in 18,000 434,350 909,945 475,595Transfers out (12,883,561) (40,117,714) (44,794,085) (4,676,371)

Total other financing sources (12,865,561) (39,683,364) (43,884,140) (4,200,776)

Net change in fund balances 17,626,129 (21,054,093) 9,033,155 30,087,248

Fund balance, July 1 212,628,679 212,628,679 212,628,679 -

Fund balance, June 30 $ 230,254,808 191,574,586 221,661,834 30,087,248

See accompanying notes to basic financial statements.37

A-8

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Net Position

Proprietary Funds

June 30, 2019Business-type Activities - Enterprise Funds

Major Funds Nonmajor FundGovernmental

Activities -

WaterParkingFacilities

ParkingAuthority Wastewater Solid Waste Stormwater

Business-typeTotal

Internal ServiceFunds

AssetsCurrent assets

Cash and investments $ 42,521,858 43,417,056 20,814,252 46,085,127 22,210,459 13,458,005 188,506,757 236,509,680Accounts receivable, net 5,498,020 25,257 294,093 1,619,660 2,207,586 56,899 9,701,515 1,606,500Interest receivable 239,428 185,703 144,866 262,742 146,402 87,592 1,066,733 1,398,896Interfund receivables - - - - - - - 1,683,691Inventories 1,268,239 - - - - - 1,268,239 496,239Prepaid expenses - - - - - - - 42,839

Total current assets 49,527,545 43,628,016 21,253,211 47,967,529 24,564,447 13,602,496 200,543,244 241,737,845

Noncurrent assetsRestricted assets

Cash and investments 184 1,439,076 - - - - 1,439,260 5,640,475

Total restricted assets 184 1,439,076 - - - - 1,439,260 5,640,475

Advances to other funds - - - - - - - 18,390,832Capital assets

Land 5,260,911 7,291,981 11,852,153 8,709,000 - - 33,114,045 53,870,241Buildings 16,718,471 24,672,145 173,104,571 - - - 214,495,187 243,450,432Utility systems 13,865,992 - - 61,386,967 - - 75,252,959 -Improvements other than buildings 146,498,954 11,768,263 5,832,735 8,412,931 - - 172,512,883 66,285,282Machinery and equipment 5,774,158 1,595,209 530,571 903,250 1,247,008 67,533 10,117,729 76,081,477Infrastructure 596,325 - - - 350,456 10,051,649 10,998,430 2,411,639

188,714,811 45,327,598 191,320,030 79,412,148 1,597,464 10,119,182 516,491,233 442,099,071Less: accumulated depreciation (76,785,350) (18,804,744) (106,774,557) (28,025,791) (1,277,673) (8,148,104) (239,816,219) (203,036,746)Construction in progress 7,421,055 - - 22,200 - 905,173 8,348,428 15,607,430

Total capital assets, net 119,350,516 26,522,854 84,545,473 51,408,557 319,791 2,876,251 285,023,442 254,669,755

Total noncurrent assets 119,350,700 27,961,930 84,545,473 51,408,557 319,791 2,876,251 286,462,702 278,701,062

Total assets 168,878,245 71,589,946 105,798,684 99,376,086 24,884,238 16,478,747 487,005,946 520,438,907

Deferred outflows of resourcesDeferred outflows of resources - pension related 884,500 1,071,210 - 304,188 581,734 330,210 3,171,842 7,108,836Deferred outflows of resources - other post employment benefit

related 45,666 402,429 - 51,374 29,683 33,108 562,260 307,672Deferred amount on refunding, net 761,032 154,355 - 175,040 - - 1,090,427 259,195

Total deferred outflows of resources 1,691,198 1,627,994 - 530,602 611,417 363,318 4,824,529 7,675,703

(Continued)

38

A-8-2

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Net Position, Continued

Proprietary Funds

June 30, 2019

Business-type Activities - Enterprise Funds

Major Funds Nonmajor FundGovernmental

Activities -

WaterParkingFacilities

ParkingAuthority Wastewater Solid Waste Stormwater

Business-typeTotal

Internal ServiceFunds

Liabilities

Current liabilitiesAccounts payable $ 1,658,281 980,719 380 33,220 1,238,813 229,948 4,141,359 8,132,904Contracts payable 47,967 10,107 - - 16,587 22,307 96,968 561,131Accrued payroll 124,689 83,708 - 28,959 62,269 37,773 337,398 673,424Interest payable 142,963 194,084 - 6,959 - - 344,006 157,690Current portion of long-term liabilities

Compensated absences - - - - - - - 8,080,618Outstanding claims - - - - - - - 7,321,182Advances from other funds - - 3,162,572 - - - 3,162,572 -Revenue bonds 3,885,000 3,128,021 - 1,440,000 - - 8,453,021 11,565,320Capital leases - - - - - - - 236,565Notes payable - - - - - - - 2,212,945

Intergovernmental payables 1,999,501 55,933 - 1,073,639 28,843 18,964 3,176,880 352,405Customer deposits 2,181,246 - - 1,870 (2,014) (698) 2,180,404 -Unearned revenue - 330,437 591,539 - - - 921,976 -

Total current liabilities 10,039,647 4,783,009 3,754,491 2,584,647 1,344,498 308,294 22,814,584 39,294,184

Long-term liabilities (net of current portion)Compensated absences - - - - - - - 10,570,810Outstanding claims - - - - - - - 31,423,687Capital leases - - - - - - - 772,785Advances from other funds - - 28,921,586 - - - 28,921,586 -Revenue bonds, net of premium/discount 38,548,663 40,204,319 - 1,480,000 - - 80,232,982 33,660,438Net pension liability 4,611,263 5,584,644 - 1,585,845 3,032,805 1,721,516 16,536,073 37,061,158Total other post employment benefit liability 1,245,292 10,974,134 - 1,400,953 809,440 902,837 15,332,656 8,390,154Notes payable - - - - - - - 15,464,252Leased property deposits - - 948,686 - - - 948,686 351,113

Total long-term liabilities 44,405,218 56,763,097 29,870,272 4,466,798 3,842,245 2,624,353 141,971,983 137,694,397

Total liabilities 54,444,865 61,546,106 33,624,763 7,051,445 5,186,743 2,932,647 164,786,567 176,988,581

Deferred inflows of resourcesDeferred inflows of resources - actuarial 367,510 981,687 - 203,752 202,191 155,896 1,911,036 2,652,012Credit from sale-leaseback transactions - 755,979 - - - - 755,979 -

Total deferred inflows of resources 367,510 1,737,666 - 203,752 202,191 155,896 2,667,015 2,652,012

Net position (deficit)Net investment in capital assets 77,678,069 (15,216,054) 52,461,315 48,663,596 319,791 2,876,251 166,782,968 202,278,322Restricted for:

Debt service 184 455,303 - 945,325 - - 1,400,812 5,640,475Unrestricted 38,078,815 24,694,919 19,712,606 43,042,570 19,786,931 10,877,269 156,193,110 140,555,220

Total net position (deficit) $ 115,757,068 9,934,168 72,173,921 92,651,491 20,106,722 13,753,520 324,376,890 348,474,017

See accompanying notes to basic financial statements.

39

A-9

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Revenues, Expenses and Changes in Net Position

Proprietary Funds

For the Year Ended June 30, 2019

Business-type Activities - Enterprise Funds

Major Funds Nonmajor fundGovernmental

Activities -

WaterParkingFacilities

ParkingAuthority Wastewater Solid Waste Stormwater Eliminations

Business-typeTotal

Internal ServiceFunds

Operating revenuesSales, service charges and fees $ 35,699,558 23,566,279 16,397,171 12,687,796 15,539,474 1,786,592 (23,130,107) 82,546,763 93,357,301Rental, concessions and sales 1,952,649 214,664 13,141,147 - - - - 15,308,460 14,649,014

Total operating revenues 37,652,207 23,780,943 29,538,318 12,687,796 15,539,474 1,786,592 (23,130,107) 97,855,223 108,006,315

Operating expensesSalaries and employee benefits 5,613,829 4,965,235 - 1,391,960 2,900,052 1,625,261 - 16,496,337 22,725,251Maintenance and operations 24,955,626 11,282,102 23,214,695 3,778,014 12,603,637 3,281,160 (23,130,107) 55,985,127 39,758,356Insurance premiums, settlements and provisions - - - - - - - - 12,508,368Depreciation 4,589,297 1,402,471 5,194,938 1,740,927 8,761 189,220 - 13,125,614 12,260,851Amortization of bond premiums and refunding (190,843) (150,096) - 80,453 - - - (260,486) (231,422)

Total operating expenses 34,967,909 17,499,712 28,409,633 6,991,354 15,512,450 5,095,641 (23,130,107) 85,346,592 87,021,404

Operating income (loss) 2,684,298 6,281,231 1,128,685 5,696,442 27,024 (3,309,049) - 12,508,631 20,984,911

Nonoperating revenues (expenses)Investment revenue 1,073,518 945,832 505,708 1,102,700 560,896 374,608 - 4,563,262 6,560,038Net change in fair value of investments 136,328 122,763 63,081 132,419 66,661 48,561 - 569,813 729,547Interest expenditures (1,948,454) (2,448,320) (1,379,402) (174,251) - - - (5,950,427) (3,429,024)Other revenue (expenses) (32,444) (1,162) 1,484,810 (67,312) 14,731 4,505 - 1,403,128 3,131,449

Total nonoperating revenues (expenses) (771,052) (1,380,887) 674,197 993,556 642,288 427,674 - 585,776 6,992,010

Income (loss) before transfers 1,913,246 4,900,344 1,802,882 6,689,998 669,312 (2,881,375) - 13,094,407 27,976,921

Transfers in 1,408,648 8,000,000 - - - 2,396,900 (8,060,000) 3,745,548 12,502,189Transfers out - - (8,000,000) - (60,000) - 8,060,000 - (842,960)

Change in net position 3,321,894 12,900,344 (6,197,118) 6,689,998 609,312 (484,475) - 16,839,955 39,636,150

Net position (deficit), July 1 112,435,174 (2,966,176) 78,371,039 85,961,493 19,497,410 14,237,995 - 307,536,935 308,837,867

Net position (deficit), June 30 $ 115,757,068 9,934,168 72,173,921 92,651,491 20,106,722 13,753,520 - 324,376,890 348,474,017

See accompanying notes to basic financial statements.

40

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See accompanying notes to basic financial statements.42

A-11

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Fiduciary Net Position

Fiduciary Funds

June 30, 2019

Trust Fund Agency Fund

Westside CitiesCouncil of

Governments

Beverly HillsActive Adult

Club

Assets

Current assetsCash and investments $ - $ -

Total assets - -

Deferred outflows of resourcesUnavailable revenue-property taxes - -

LiabilitiesAccounts payable - -

Total liabilities - -

Net position (deficit)

Held in trust - -

Total net position (deficit) $ - $ -

See accompanying notes to basic financial statements.43

A-11-2

CITY OF BEVERLY HILLS, CALIFORNIA

Statement of Changes in Fiduciary Net Position

Fiduciary FundsFor the Year Ended June 30, 2019

Westside CitiesCouncil of

Governments

AdditionsContributions:

Member agencies $ -

DeductionsTransfer Out 106,387

Total deductions 106,387Net change in net position 106,387

Net position, July 1 106,387Net position, June 30 $ -

See accompanying notes to basic financial statements.44

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The basic financial statements of the City of Beverly Hills, California (City) have beenprepared in conformity with accounting principles generally accepted in the United States ofAmerica (GAAP). The Governmental Accounting Standards Board (GASB) is the acceptedstandard-setting body for establishing governmental accounting and financial reportingprinciples. The more significant of the City’s accounting policies are described below.

A. Financial Reporting Entity

The accompanying basic financial statements present the financial activity of the City ofBeverly Hills (primary government) and its component units, entities for which the primarygovernment is considered to be financially accountable. A component unit is a legallyseparate organization that does not qualify as the primary government and which exhibitsfinancial accountability. Financial accountability stems from specific subsets of thequalities of fiscal dependence, board appointment, financial benefit, burden relationship, orability to impose will. Blended component units, although separate legal entities are, insubstance, part of the government’s operations. Their funds are treated similarly to funds ofthe primary government (other than the general fund). Discretely presented componentunits represent other legally separate organizations for which the primary government isfinancially accountable or for which the nature and significance of their relationship to theprimary government are such that exclusion would cause the City’s reporting entity to bemisleading or incomplete. Discretely presented component units do not function as anintegral part of the primary government, and its data would only be shown separately fromthe primary government. The City’s component units are blended; there are no discretelypresented component units in the Financial Reporting Entity.

City of Beverly Hills

The City (primary government) was incorporated in 1914 under the general laws of theState of California. The City provides the full range of municipal services as contemplatedby statute. Services provided include public safety (police and fire), street construction andmaintenance, refuse collection, water and sewer utilities, culture and recreation, publicimprovements, planning and zoning, and general administrative and support services.

The City operates under a Council-Manager form of government. The City Council consistsof five members elected at large for overlapping four-year terms. The Mayor is selectedfrom the City Council members and serves a one-year term. The City’s only other electedofficial is the City Treasurer whose term of office is four years. The City Council appointsa City Manager, City Attorney, City Clerk, and City Auditor. In addition, the City Councilappoints the members of the following advisory Commissions and Boards:

Architectural Commission Human Relations Commission

Arts & Culture Commission Planning Commission

Charitable Solicitations Commission Public Works Commission

Cultural Heritage Commission Recreation & Parks Commission

Design Review Commission Traffic & Parking Commission

Health and Safety Commission Rent Stabilization Commission

In addition to sitting as the governing board of the City, the City Council also acts as theBoard of Directors of three blended component units: The Parking Authority of the City ofBeverly Hills, the Beverly Hills Public Financing Authority and the City of Beverly HillsCommunity Charitable Foundation.

The Parking Authority of the City of Beverly Hills

The Parking Authority of the City of Beverly Hills (The Parking Authority) is a publicfinancing agency established by the City under the State of California Parking Law of 1949to provide public parking facilities on a citywide basis. The Parking Authority provides forthe acquisition and/or construction of parking facilities that are leased to the City for thegeneral benefit of its citizens.

The Parking Authority is a blended component unit under the criteria of board appointmentand financial burden on the primary government. In regards to board appointment, Statelaw provides that the Mayor of the City, with the approval of the rest of the City Council,shall appoint 5 electors as the governing body. Alternatively, the City Council can declareitself as the governing body of The Parking Authority. If the Council is the governingbody, the Council can at any time, by resolution, determine that it is no longer thegoverning body of The Parking Authority, in which event the mayor, with the approval ofthe rest of the Council, shall appoint 5 electors. As of June 30, 2019, the City Councilcontinues to act as the governing body of The Parking Authority. In regards to financialburden, the City collateralizes the outstanding bonds payable that were used to constructmany of The Parking Authority’s assets.

The history of The Parking Authority’s relationship to the City has included repetitivetransitions. Prior to the fiscal year ended June 30, 1983, The Parking Authority was adiscretely presented component unit of the City, as its data was shown separately from theCity. As of June 30, 1983, as a result of the National Council on Governmental AccountingStatement No. 3, the City presented The Parking Authority as a blended component unit.During the year ended June 30, 1994, the assets of The Parking Authority were transferredto the Parking Facilities Enterprise Fund and no Parking Authority financial transactionsoccurred in subsequent fiscal years. However, The Parking Authority still remained a legalentity. Separate financial statements are not prepared for the Parking Authority. OnSeptember 30, 2011, the majority of the assets of the City’s Parking Enterprise Fund weretransferred to The Parking Authority in order to show a total separation between TheParking Authority and the City. (See Note 13 for additional explanation.) The ParkingAuthority is blended as an Enterprise Fund.

46

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , CONTINUED

A. Financial Reporting Entity , CONTINUED

Beverly Hills Public Financing Authority

The City of Beverly Hills Public Financing Authority (Public Financing Authority) is ajoint powers authority, organized pursuant to a Joint Exercise of Powers Agreement, datedNovember 10, 1992 between the City and The Parking Authority. The Joint PowersAgreement was entered into pursuant to the provisions of Article 1 of Chapter 5 of theCalifornia Government Code (the Act). The Public Financing Authority was created for thepurpose of providing financing for public capital improvements for the City through theacquisition by the Public Financing Authority of such public capital improvements and/orthe purchase by the Public Financing Authority of local obligations within the meaning ofthe Act. Under the Act, the Public Financing Authority has the power to issue bonds to paythe costs of public capital improvements.

Required lease payments between the City and the Public Financing Authority exactlymatch debt service requirements of the underlying debt. Accordingly, the leases betweenthe City and the Public Financing Authority are eliminated and the underlying debt isreported as debt of the City. Separate financial statements are not prepared for the PublicFinancing Authority. Activities of the Public Financing Authority are presented within thedebt service fund, and additional details are provided within Note 8 Long-Term Liabilities.

City of Beverly Hills Community Charitable Foundation

On January 20th, 2012, the Internal Revenue Service recognized the City’s newly formed501(c)(3) not-for-profit corporation entitled, “City of Beverly Hills Community CharitableFoundation” (Foundation). This corporation is a nonprofit public benefit corporation and isnot organized for the private gain of any person. It is organized under the Nonprofit PublicBenefit Corporation Law for public and charitable purposes. The specific purposes of theFoundation are to enhance the services and programs to the Beverly Hills community andits citizens, as well as augment the physical and cultural environment of the City of BeverlyHills.

The property of the Foundation is irrevocably dedicated to charitable purposes. No part ofthe net earnings or assets of this corporation shall inure to the benefit of any of its directors,trustees, officers, private shareholders or members, or to any private individual. There arefive authorized directors of the Foundation and all must be residents of the City of BeverlyHills. Three of the five directors are comprised of the following: The Treasurer, ViceMayor and a Councilmember of the City chosen by the Mayor and ratified by the CityCouncil (collectively “Elected Official Directors”). The remaining two directors areselected by the City Council of the City (each, a “Resident Director”).

Upon the dissolution or winding down of the Foundation, its assets remaining afterpayment, or provision for payment, of all debts and liabilities of the Foundation shall be

distributed to the City of Beverly Hills for public purposes or to a nonprofit fund,foundation or corporation which is organized and operated exclusively for charitable oreducational purposes that benefit the residents of the City of Beverly Hills and which hasestablished its tax exempt status under Internal Revenue Code Section 501(c)(3).

Although the City does not control the timing or amount of receipts from the Foundation,the majority of resources or income thereon that the Foundation holds and invest arerestricted to the activities of the City by the donors. As these restricted resources held bythe foundation can only be used by, or for the benefit of the City, the Foundation isconsidered a blended component unit. The Foundation does not issue separate financialstatements and is presented as a special revenue fund type and is included in thegovernment-wide financial statements to ensure fiscal accountability.

B. Government-wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and thestatement of activities) report information on all of the non-fiduciary activities of theprimary government and its component units. For the most part, the effect of interfundactivity has been removed from these statements. Governmental activities, which normallyare supported by taxes and intergovernmental revenues, are reported separately frombusiness-type activities, which rely, to a significant extent, on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a givenfunction or segments are offset by program revenues. Direct expenses are those that areclearly identifiable with a specific function or segment. Program revenues include 1)charges to customers or applicants who purchase, use, or directly benefit from goods,services, or privileges provided by a given function or segment and 2) grants andcontributions that are restricted to meeting the operational or capital requirements of aparticular function or segment. Taxes and other items not properly included amongprogram revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, andfiduciary funds even though the latter are excluded from the government-wide financialstatements. Major individual governmental funds and major individual enterprise funds arereported as separate columns in the fund financial statements. City has one fiduciary trustfund, the Westside Cities Council of Governments, that the City started to administer infiscal year 2018.

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The accounting and financial reporting treatment is determined by the applicablemeasurement focus and basis of accounting. The measurement focus describes what type ofinformation a given fund represents. The basis of accounting describes when changes are

47

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , CONTINUED

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation ,

recognized. The government-wide financial statements are reported using the economicresources measurement focus and the accrual basis of accounting, as are the proprietaryfund financial statements. Revenues are recorded when earned and expenses are recordedwhen a liability is incurred, regardless of the timing of related cash flows. Property taxesare recognized as revenues in the year for which they are levied. Grants and similar itemsare recognized as revenue when all eligibility requirements have been met.

Governmental fund financial statements are reported using the current financial resourcesmeasurement focus and the modified accrual basis of accounting. Revenues are recognizedas soon as they are both measurable and available. Revenues are considered to be availablewhen they are collectible within the current period or soon enough thereafter to payliabilities of the current period. For this purpose, the City considers revenues to beavailable if they are collected within 60 days of the end of the current fiscal period.Expenditures generally are recorded when a liability is incurred, as under accrualaccounting. However, debt service expenditures, as well as expenditures related tocompensated absences, and claims and judgments, are recorded only when payment is due.General capital asset acquisitions are reported as expenditures in governmental funds.Issuance of long-term debt and acquisitions under capital lease are reported as otherfinancing sources.

Property taxes and taxpayer-assessed tax revenues (e.g., franchise taxes, sales taxes, motorvehicle fees, etc.), net of estimated refunds and uncollectible amounts, and interestassociated with the current fiscal period are all considered susceptible to accrual and sohave been recognized as revenues of the current fiscal period. Expenditure driven grants arerecognized as revenue when the qualifying expenditures have been incurred and all othereligibility requirements have been met, and the amount is received during the period orwithin the availability period for this revenue source (within 60 days of year-end). All otherrevenue items are considered to be measurable and available only when cash is received bythe government.

The City reports the following major governmental funds:

The General Fund is the City’s primary operating fund. It accounts for all financial

resources of the general government, except those required to be accounted for in

another fund.

The Infrastructure Capital Projects Fund accounts for the construction expenditures of

certain public capital improvement projects, including, but not limited to, replacement of

the City’s street lighting system, street improvements and other infrastructure projects.

The City reports the following major proprietary funds:

The Water Enterprise Fund accounts for all financial aspects of the City’s water

operations. The City currently obtains its water from the Metropolitan Water District of

Southern California and distributes it throughout the City and portions of the City of

West Hollywood. The City has completed construction of a water treatment facility

through a lease-purchase-operate-finance arrangement to treat local well water that is

anticipated to meet approximately 20% of its water needs. The acquisition and

construction of water system facilities have primarily been financed through the issuance

of general obligation and revenue bonds supported by water service charges established

by City Council action. The City Council also established a water capacity charge and

water supply fee for the cost of water facilities in existence and for new water facilities

to be acquired or constructed to provide water supplies to serve a new or expanded

connection to the water system. This includes supply or capacity contracts for rights or

entitlements, real property interests, and entitlements and other rights of the City

involving capital expenses relating to its use of existing or new water facilities that are of

proportional benefit to the person being charged.

The Parking Facilities Enterprise Fund accounts for the City’s parking operations. The

acquisition and construction of parking facilities have primarily been financed through

the issuance of revenue bonds supported by parking fees charged to the public and lease

payments from retail facilities located in the parking structures.

The Solid Waste Enterprise Fund accounts for the collection and disposal of solid waste

generated by commercial and residential users in the City. Solid waste operations are

primarily financed through user charges set by City Council action.

The Wastewater Enterprise Fund accounts for the collection and disposal of wastewater

generated within the City. The acquisition and construction of wastewater facilities and

capacity rights in the City of Los Angeles Hyperion Treatment Plant have primarily been

financed through the issuance of revenue bonds supported by user charges established by

City Council action.The City Council also established a wastewater capacity charge for

the cost of wastewater facilities in existence and for new wastewater facilities to be

acquired or constructed that are of proportional benefit to the person being charged. This

includes supply or capacity contracts for rights or entitlements, real property interests,

and entitlements and other rights of the City involving capital expenses relating to its use

of existing or new wastewater facilities.

The Parking Authority of the City of Beverly Hills (The Parking Authority) is a public

financing agency established by the City under the State of California Parking Law of48

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , CONTINUED

C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation ,

1949 to provide public parking facilities on a citywide basis. The Parking Authority

provides for the acquisition and/or construction of parking facilities that are leased to the

City for the general benefit of its citizens. The Parking Authority is a blended component

unit. See Note 1, Section A for more information about The Parking Authority.

The City also reports the following non-major proprietary fund:

The Stormwater Enterprise Fund accounts for the certain standards for street sweeping,

storm drain maintenance, and other environmental quality programs mandated under the

Federal “Clean Up the Bay” program. Stormwater operations are financed through user

charges established by City Council action.

Additionally, the City reports the following fund types:

The Debt Service Fund accounts for the accumulation of resources that are restricted,

committed, or assigned for the payment of principal and interest on long-term

obligations of governmental funds.

The Special Revenue Funds are used to account for specific revenues that are legally

restricted to expenditures for a particular purpose.

Internal service funds account for a variety of services provided to other departments or

agencies of the City on a cost reimbursement basis. These services include information

technology, capital assets (governmental capital assets excluding infrastructure assets

and the City’s fine art collection) and related maintenance and financing, reprographics,

cable television, policy administration, and legal, liability insurance, workers’

compensation insurance, unemployment insurance and employee benefits. Rentals to

user departments and divisions for internal service capital assets are based on 1) capital

replacement, 2) repairs and maintenance costs and 3) fuel usage. The capital replacement

charge, based on the estimated net replacement cost of the asset allocated over the asset’s

estimated useful life, is used by the City to reduce budgetary swings in user departments

for periodic capital replacement.

Fiduciary funds are used to report assets held in a trustee or agency capacity for others

and therefore cannot be used to support the government's own programs. An agency

fund, such as Beverly Hills Active Adult Club, is purely custodial in nature, and thus,

does not involve measurement of results of operations. During FY19 the city returned all

funds to Beverly Hills Active Adult Club. Trust funds such as Westside Cities Council of

Governments, use of the economic measurement focus and the acrual basis of

accounting. During FY19 Westside Cities Council of Governments created their own

bank account and retained the Ciy services only for financial administration purposes.

Permanent funds are used to account for and report resources that are restricted to the

extent that only earnings, and not principal, may be used for purposes that support the

reporting government’s programs—that is, for the benefit of the government or its

citizenry.

As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are internal service fund chargesand charges for billing, legislative assistance, and similar services to business-typeactivities, as well as certain other charges to business-type activities and various otherfunctions of the City. Elimination of these charges would distort the direct costs andprogram revenues reported for the various functions concerned.

Amounts reported as program revenues include 1) charges to customers or applicants forgoods, services or privileges provided, 2) operating grants and contributions and 3) capitalgrants and contributions. Internally dedicated resources are reported as general revenuesrather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items.Operating revenues and expenses generally result from providing goods and services andproducing and delivering goods in connection with a proprietary fund’s principal ongoingoperations. The principal operating revenues of the enterprise and internal service funds arecharges for sales and services. Operating expenses for enterprise and internal service fundsinclude salaries and employee benefits, maintenance and operation of systems, andfacilities, administrative expenses and depreciation on capital assets. All revenues andexpenses not meeting this definition are reported as non-operating revenues and expenses.When both restricted and unrestricted resources are available for use, it is the City’s policyto use restricted resources first, then unrestricted resources, as they are needed

D. Assets, Liabilities, Net Position or Equity

Cash and Investments

In order to maximize the flexibility of its investment program and to aid in cash budgeting,the City pools the cash of all funds, except for monies deposited with fiscal agents inaccordance with related bond indentures. The cash and investments balance in each fundrepresent that fund’s equity share of the City’s cash and investment pool.

As the City places no restrictions on the deposit or withdrawal of a particular fund’s equityin the pool, the pool operates like a demand deposit account for the participating funds.Interest income earned on pooled cash and investments is allocated monthly to the various

49

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , CONTINUED

D. Assets, Liabilities, Net Position or Equity , CONTINUED

Cash and Investments , CONTINUED

funds based on month-end balances. Interest income on restricted cash and investmentswith fiscal agents is credited directly to the related fund.

The City’s investments are carried at fair value, except for certain short-term money marketinvestments, which are carried at amortized cost. The fair value of equity and debtsecurities is determined based on sales prices or bid-and-asked quotations from SEC-registered securities exchanges or NASDAQ dealers. Local Agency Investment Fund(LAIF) determines the fair value of its portfolio quarterly and reports a factor to the City;the City applies that factor to convert its share of LAIF from amortized cost to fair value.Changes in fair value are allocated to each participating fund on a quarterly basis. Basedon management decision, investment income of certain funds has been assigned to theGeneral Fund. For purposes of the statement of cash flows, the City has defined cash andcash equivalents to include petty cash funds, equity in the City’s cash and investment pool,and restricted, non-pooled investments with initial maturities of three months or less. TheCity follows the disclosure requirements of GASB Statement No. 72, Fair ValueMeasurement and Application.

Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangementsoutstanding at the end of the fiscal year is referred to as interfund receivables/interfundpayables (i.e., the current portion of interfund loans) or advances to/from other funds (thenoncurrent portion of interfund loans). All other outstanding balances between funds are re-ported as interfund receivables or interfund payables. Any residual balances outstandingbetween the governmental activities and the business-type activities are reported in thegovernment-wide financial statements as internal balances.

Advances between funds, as reported in the fund financial statements, are offset by a fundbalance non-spendable account in applicable governmental funds to indicate that they arenot available for appropriation and are not expendable available financial resources.

All trade and tax receivables are shown net of an allowance for uncollectible accounts andestimated refunds due.

Assessed values for purposes of property taxes are determined on an annual basis for theperiod July 1 to June 30 by the Los Angeles County Assessor as of March 1. Taxes arelevied annually on July 1 and become a lien on real property at January 1. Taxes are dueNovember 1 and February 1 and are delinquent if not paid by December 10 and April 10,respectively, at which time applicable penalties and interest are assessed.

Inventories and Prepaid Items

All materials and supplies inventories are valued at cost using the average cost method.Inventories in governmental funds are recorded as expenditures when consumed rather thanwhen purchased.

Certain payments to vendors reflect costs applicable to future accounting periods and arerecorded as prepaid expenses in both government-wide and fund financial statements.

Restricted Assets

Certain proceeds of the City’s revenue bonds, as well as certain resources set aside for theirrepayment, are classified as restricted assets on the balance sheet because they aremaintained in separate bank accounts and their use is limited by applicable bond covenants.The proceeds of certain endowments, together with cumulative unspent earnings thereon,are also classified as restricted assets on the Statement of Net Position because their use islimited by the terms of the endowments and state law governing the ability to spend netappropriation, and the policy for authorizing and spending investment income.

In the absence of specific statutory provisions governing the issuance of bonds, certificatesor leases, these bond monies may be invested in accordance with the ordinance, resolutionsor indentures specifying the types of investments its trustees or fiscal agents may make.These ordinances, resolutions and indentures are generally more restrictive than the City’sgeneral investment policy. In no instance have additional types of investments beenauthorized that are not permitted by the City’s general investment policy.

Capital Assets

Capital assets, which include land, property, plant, equipment, fine art and infrastructureassets (e.g., roads, bridges, sidewalks, traffic lights and signals, street lights and similaritems), are reported in the applicable governmental or business-type activities columns inthe government-wide financial statements. Capital assets are defined by the City as assetswith an initial, individual cost of $10,000 or more and an estimated useful life in excess ofone year. Such assets are recorded at historical cost or estimated historical cost ifpurchased or constructed. Donated capital assets are recorded at acquisition value. The costof normal maintenance and repairs that do not add to the value of the asset or materiallyextend assets lives are not capitalized.

Major outlays for capital assets are capitalized as projects are constructed. Interest incurredduring the construction phase of capital assets of business-type activities is included as partof the capitalized value of the assets constructed. Based on GASB Statement No. 89"Accounting for Interest Cost Incured before the End of a Construction Period", no interest

50

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , CONTINUED

D. Assets, Liabilities, Net Position or Equity , CONTINUED

Capital Assets , CONTINUED

was capitalized during the year ended June 30, 2019.

Capital assets of the City are depreciated using the straight-line method over the followingestimated useful lives:

Assets Years

Buildings 20 to 45Improvements other than buildings 10 to 45Infrastructure 15 to 50Utility systems 20 to 50Vehicles 3 to 30Computer equipment 2 to 5Other equipment and furnishings 5 to 25

The City’s fine art collection is not depreciated. It is the City’s opinion that such assets arenot wasting and are not subject to periodic decrease in value. Periodic restoration andmaintenance costs on particular items are charged to expense as incurred.

Compensated Absences

It is the City’s policy to permit employees to accumulate earned but unused vacation,administrative leave, holiday pay, compensatory time, and sick leave benefits. All vacationand sick leave benefits are accrued as earned by employees. A portion of unused sick leavebenefits, varying by employee bargaining unit, vests and is payable upon retirement orseparation from the City. For all funds the estimated compensated absences liability duewithin one year is included as a current liability in the Employee Benefits Internal ServiceFund and the balance is included as a long-term liability in the Employee Benefits InternalService Fund.

Long-Term Obligations

In the government-wide financial statements, and proprietary fund types in the fundfinancial statements, long-term debt and other long-term obligations are reported asliabilities in the applicable governmental activities, business-type activities, or proprietaryfund type statements of net position. Initial-issue bond premiums and discounts areamortized over the life of the bonds using the straight-line method, which is materiallyconsistent with the effective interest method. The difference between the reacquisition priceof refunding bonds and the net carrying amount of refunded debt (deferred amount onrefunding) is amortized over the shorter of the life of the refunding debt or remaining life ofthe refunded debt. Bonds payable are reported net of the unamortized portion of applicablepremium or discount.

In the fund financial statements, governmental fund types recognize bond premiums,

discounts and issuance costs during the period issued. The face amount of debt issued isreported as other financing sources. Premiums received are reported as other financingsources, while discounts are reported as other financing uses.

Net Outflows of Resources and Net Inflows of Resources

In addition to assets, the statement of net position and the governmental fund balance sheetwill sometimes report a separate section for deferred outflows of resources. This separatefinancial statement element, deferred outflows of resources, represents a consumption ofnet position that applies to future periods and will not be recognized as an outflow ofresources (expense/expenditure) until that time.

In addition to liabilities, the statement of net position and the governmental fund balancesheet will sometimes report a separate section for deferred inflows of resources. Thisseparate financial statement element, deferred inflows of resources, represents anacquisition of net position that applies to future periods and will not be recognized as aninflow of resources (revenue) until that time.

Pensions

Pursuant to GASB Statement No. 68 provisions, in government-wide financial statements,retirement plans (pensions) are required to be recognized and disclosed using the accrualbasis of accounting, regardless of the amount recognized as pension expenditures on thegovernmental fund statements, which use the modified accrual basis of accounting.

In general, the City recognizes a net pension liability, which represents the excess of thetotal liability over the fiduciary net position of the pension reflected in the actuarial reportprovided by The California Public Employees’ Retirement System (CalPERS). The netpension liability is measured as of the City’s prior fiscal year-end. Changes in the netpension liability are recorded, in the period incurred, as pension expense or as deferredinflows of resources or deferred outflows of resources depending on the nature of thechange. The changes in net pension liability that are recorded as deferred inflows ofresources or deferred outflows of resources (that rise from changes in actuarial assumptionsor other inputs and differences between expected or actual experience) are amortized overthe weighted average remaining service life of all participants in the respective pensionplan and are recorded as a component of pension expense beginning with the period inwhich they incurred.

For the purposes of measuring the net pension liability and deferred outflows/inflows orresources relating to pensions and pension expense, information about the fiduciary netposition of the City’s pension plan with CalPERS and additions to/deductions from the

51

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , CONTINUED

D. Assets, Liabilities, Net Position or Equity , CONTINUED

Pensions , CONTINUED

plan’s fiduciary net position have been determined on the same basis as they are reportedby CalPERS. For this purpose, benefit payments (including refunds of employeecontributions) are recognized when due and payable in accordance with the benefits terms.Investments are reported at fair value.

Projected earnings on pension investments are recognized as a component of pensionexpense. Differences between projected and actual investment earnings are reported asdeferred inflows of resources or deferred outflows of resources and amortized as acomponent of pension on a closed basis over a five-year period beginning with the periodin which the difference occurred. Each subsequent year will incorporate an additionalclosed basis five-year period of recognition.

Total Other Postemployment Benefits (OPEB)

Effective July 1, 2017, the City implemented the provisions of GASB Statement No. 75,Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.This statement replaces the requirements of Statements No. 45, Accounting and FinancialReporting by Employers for Postemployment Benefits Other Than Pensions, as amended.

Net Position and Fund Equity

In the government-wide financial statements and proprietary fund financial statements, netposition is displayed in three components: net investment in capital assets, restricted netposition, and unrestricted net position. The restricted component of net position reflectsconstraints placed on the use of resources by parties outside of the City (such as creditors,grantors, contributors, laws and regulations of other governments). The nonexpendableportion of permanent fund trusts and endowments is reported as permanently restricted. TheCity’s other restricted assets are temporarily restricted (ultimately expendable assets). Theunrestricted component of net position is the net amount of the assets and liabilities that arenot included in the determination of net investment in capital assets or the restrictedcomponent of net position. Please also refer to Note 13 for more information on netinvestment in capital assets.

Estimates

The preparation of financial statements in accordance with GAAP requires management tomake estimates and assumptions that affect the amounts reported in the financial statementsand accompanying notes. Actual results may differ from those estimates.

Self-Insurance Programs

The City has initiated self-insurance programs to provide for general liability, workers’

compensation claims and unemployment insurance claims. These activities are accountedfor in respective self-insurance internal service funds. Fund revenues are primarilypremium charges to other funds and are planned to match estimated payments resultingfrom self-insurance programs, operating expenses, and reinsurance premiums. The fundexpenses the estimated liability for claims in cases where such amounts are reasonablydeterminable and where liability is probable, including an estimate for claims that areincurred but not reported.

The City’s Risk Manager oversees the self-insurance programs. It is her duty to ensure thatthe programs are operated in accordance with City policies. The Risk Manager alsoprovides budget guidance, reserves and claims analysis and acts as liaison withindependently contracted claims administrators.

The contracted claims administrators provide services to process liability and workers’compensation self-insurance claims. The process includes the estimation of loss reserves.It is the City’s intent to maintain cash reserves in the self-insurance funds equal to orgreater than the estimated loss reserves.

The City maintains a self-insurance retention level of $1,000,000 for workers’compensation claims for Non Safety and $5,000,000 self-insurance retention for SwornSafety. Similarly the City maintains a self-insurance retention level of $1,500,000 forgeneral liability claims. General liability claims in excess of $1,500,000 up to $26 millioncombined-single-limit per occurrence are covered by insurance., except Loma Vist claimswhere the self-insured portion is $5,000,000 with $80,000,000 limits. No significantreduction in insurance coverage occurred during the last two fiscal years. During each ofthe preceding three fiscal years no claim settlement exceeded insurance coverage.

The following represents changes in the liabilities for claims for each of the City’s self-insurance funds (general liability, workers’ compensation and unemployment) for the yearsended June 30, 2019 and 2018:

52

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES , CONTINUED

D. Assets, Liabilities, Net Position or Equity , CONTINUED

Self-Insurance Programs , CONTINUED

FY

LiabilityBalance -Beginning

of FY

CurrentYear

Claims andChanges inEstimates Claim Payments

LiabilityBalance -End of FY

General Liability:2018 $ 5,281,214 15,360,590 (2,063,127) 18,578,6772019 18,578,677 8,362,054 (9,519,132) 17,421,599

Workers' Compensation:2018 $ 10,911,750 12,301,053 (2,729,584) 20,483,2192019 20,483,219 4,146,314 (3,306,263) 21,323,270

Unemployment Insurance:2018 $ - 59,160 (59,160) -2019 - 56,071 (56,071) -

Pronouncements Implemented

The GASB has issued several pronouncements during the fiscal year that have effectivedates that impact current and future financial presentations.

The following pronouncements have been implemented this fiscal year:

Statement No. 88, “Certain Disclosures Related to Debt, including Direct Borrowings

and Direct Placements." The requirements of this Statement will take effect for financial

statements starting with the fiscal year that ends June 30, 2019.

Statement No. 89, “Accounting for Interest Cost Incurred before the End of a

Construction Period." The requirements of this Statement will take effect for financial

statements starting with the fiscal year that ends December 31, 2019, however the City

elected to early implement this fiscal year.

The following newly emerged pronouncements have been considered but had no effect onthe City for the current fiscal year:

Statement No. 83, “Certain Asset Retirement Obligations”. The requirements of this

Statement will take effect for financial statements starting with the fiscal year that ends

June 30, 2019.

Pending Accounting Standards

GASB has issued the following statements which may impact the City’s financial reportingrequirements in the future:

Statement No. 84, "Fiduciary Activities." The requirements of this Statement will take

effect for financial statements starting with the fiscal year that ends December 31, 2019.

Statement No. 87, "Leases." The requirements of this Statement will take effect for

financial statements starting with the fiscal year that ends December 31, 2020.

Statement No. 90, "Majority Equity Interest-an ammendment of GASB Statements No.14

and No.61." The requirements of this Statement will take effect for financial statements

starting with the fiscal year that ends December 31, 2019.

Statement No. 91, "Conduit Debt Obligations." The requirements of this Statement will

take effect for financial statements starting with the fiscal year that ends December 15,

2021.

(2) STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

A. Budgetary Information

The City Council is required to adopt an annual budget resolution by July 1 of each fiscalyear for the General Fund, special revenue, debt service, capital projects, and permanentfunds, except for the Fine Art Fund. These budgets are adopted and presented for reportingpurposes on a basis consistent with generally accepted accounting principles.

The City Council also adopts annual financial plans for the enterprise and internal servicefunds and five-year capital budget plans for capital expenditures accounted for primarily inproprietary funds. All proprietary fund types are accounted for on an economic resourcesmeasurement focus. The City is not legally mandated to report the results of operations andcapital expenditures for these proprietary fund types on a budgetary comparison basis;therefore, budgetary data related to these funds have not been presented.

The level of appropriated budgetary control is the total adopted budget which is defined asthe total budget for all funds and divisions and includes all revisions and amendmentsapproved by the City Council subsequent to the initial budget adoption. The City Managermay authorize transfers of appropriations within the adopted budget. Supplementalappropriations during the year must be approved by the City Council. These appropriations,representing amendments to the budget during the year, were significant in relationship tothe original budget as adopted and detailed below. Unexpended or unencumberedappropriations lapse at the end of the fiscal year. Encumbered appropriations arereappropriated in the ensuing year’s budget by action of the City Council.

B. Supplemental Budget Appropriations and Adjustments

53

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(2) STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY , CONTINUED

B. Supplemental Budget Appropriations and Adjustments , CONTINUED

The budget at June 30, 2019 includes appropriations based on encumbrances outstandingand approved re-appropriations at June 30, 2018 and excludes amounts reserved forencumbrances outstanding and approved re-appropriations at June 30, 2019.

During the year, several supplemental budget appropriations were adopted by the CityCouncil as amendments to the annual budget. These changes to appropriations are asfollows:

General FundSpecial

Revenue Funds

Original budget $ 238,145,501 $ 6,811,968Additional appropriations for:

Various programs and capital projects 159,119 22,964,624Purchase of equipment 340,784 875,720Consulting, supplies, payroll, etc 11,362,516 1,938,774Adjustments and net transfers between fund types 27,234,153 139,470

Amended budget 277,242,073 32,730,556Encumbrances outstanding at year-end 8,464,888 1,254,327

Final budget $ 285,706,961 $ 33,984,883

C. Deficit Fund Equity

As of June 30, 2019 the Policy, Administration & Legal Fund has a deficit of $4,243,050due to recording their proportionate share of total other postemployment benefits liabilityper GASB 75. Also Liability Insurance and Workers' Compensation funds have a deficitbalance of $9,598,694 and $7,825,875 due to an increase in outstanding claims liabilitiesbased on actuarial reports.

(3) CASH AND INVESTMENTS

A. Cash and Investments

The City follows the practice of pooling cash and investments of all funds, except forinvestments required to be held by outside fiscal agents under the provisions of bondindentures.

In accordance with the California Government Code Section 53600 et seq. the City adoptsan investment policy annually that, among other things, authorizes types of allowableinvestments, maximum maturities, maximum concentration of investments by type ofinvestment and issuer, minimum ratings for certain types of investments and how theinvestments may be held. The City’s policy follows the requirements of, or is morerestrictive than, the California Government Code. These limitations mitigate the City’sinterest rate risk, credit risk, concentration of credit risk and custodial credit risk related toits various investments. Authorized investments include:

Authorized Investment Type Standard

Treasury Issues No limitation

Federal Agencies 25% max per Agency/GSE issuer

Supranational "AA" rated category or better by a NRSRO; 30% maximum; 10% max per issuer; USD

denominated senior unsecured unsubordinated obligations issued or unconditionally

guaranteed by IBRD, IFC, or IADB

Municipal Securities "A" rated category or better by a NRSRO; 25% maximum; 7% max per issuer;

Include obligations of the City, State of California, any of the other 49 states,and anylocal agency within the State of California

Banker’s Acceptances "A-1" short-term rated or better by at least one NRSRO; or "A" long-term debt rated

category or better by at least one NRSRO; 40% maximum; 7% max issuer; 180 days maxmaturity

Commercial Paper "A-1" rated or better by at least one a NRSRO; "A" long-term debt issuer rating category

or better by at least one NRSRO, if any; 25% maximum; 7% max of the outstanding

commercial paper per single issuer; 270 days max maturity; Issuer is a

corporation organized and operating in the U.S. with assets > $500 million.

Negotiable Certificates of Deposits (NCD) No rating required if amount of the NCD is covered by FDIC insured limit; For any

amount above FDIC limit, "A-1" rated or better by at least one NRSRO; or "A" long-term debt rated category or better by at least one NRSRO; 30% maximum

(combined with time deposits); 7% max per issuer; Issued by a nationally or state-chartered bank ,a savings association or federal association, a state or federal creditunion, or by a federally licensed or state-licensed branch of a foreign bank.

Time Deposit (TD)/Certificate of Deposit(CD)

30% maximum (combination of FDIC insured and collateralized TDs, NCDs); FDICinsured or collateralized; 1 year max maturity

Corporate Medium Term Notes "A" rated category or higher by at least one NRSRO; 30% maximum; 7% max per issuer;

Issuer is a corporation organized and operating within the U.S. or by depositoryinstitutions licensed by the U.S. or any state and operating within the U.S.

54

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(3) CASH AND INVESTMENTS , CONTINUED

A. Cash and Investments , CONTINUED

Asset-Backed (ABS), "AA" rated category or higher by a NRSRO; and "A" rated long-term debt issuer

Mortgage Backed (MBS), and category or higher by at least one NRSRO; 20% maximum; 7% max per issuer on

Collateralized Mortgage Obligations (CMO) Asset-Backed or Commercial Mortgage security issuer; There is no issuer limitation on

any Mortgage security where the issuer is the US Treasury or a Federal Agency/GSE.

Mutual Fund & Money Market Funds Highest rating or "AAA" rated by two NRSROs; SEC registered adviser with

AUM >$500 million and experience > 5 years; 20% maximum in Mutual Funds andMoney Market Mutual Funds; 10% max per one Mutual Fund; 20% max in MoneyMarket Mutual Funds.

Repurchase Agreements 20% maximum; 7 days max maturity; 102% collateralized; Not used by Investment

Adviser

Local Agency Investment Fund LAIF Maximum program limitation

Local Government Investment Pools No issuer limitation

Social Responsibility While the portfolio may not be classified as an ESG portfolio, investment in entities that

support community well being through safe and environmentally sound practices and fairlabor practices and equality of rights are encouraged; The City of Beverly Hills shall notknowingly invest in, or do business with companies that engage in a boycott or otherdiscriminatory practices against nations or persons. A list of companies that participate inBDS shall include such enterprises as are designated from time to time by City Councilor the Treasurer.

Prohibited Inverse floaters; Ranges notes, Interest-only strips from mortgaged backed securities;

Zero interest accrual securities; Reverse Repurchase Agreements; Purchasing/ Sellingsecurities on margin; Securities lending; Foreign currency denominated securities

Max Per Issuer 5% of the total portfolio per issuer, unless otherwise specified in the policy

Maximum maturity 5 years, unless otherwise specified in the policy

The City’s cash and investments at June 30, 2019 are summarized on the following page:

55

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(3) CASH AND INVESTMENTS , CONTINUED

A. Cash and Investments , CONTINUED

Unrestricted Cash and Investments Restricted Cash and Investments

GovernmentalActivities

Business-typeActivities

Government-wide Subtotal Fiduciary Funds Total

GovernmentalActivities

Business-typeActivities Total Total

Major funds:General Fund $ 229,224,611 - 229,224,611 - $ 229,224,611 $ - - - $ 229,224,611Infrastructure Capital Projects Fund 37,537,914 - 37,537,914 - 37,537,914 - - - 37,537,914Water - 42,521,858 42,521,858 - 42,521,858 - 184 184 42,522,042Parking Facilities - 43,417,056 43,417,056 - 43,417,056 - 1,439,076 1,439,076 44,856,132Solid Waste - 22,210,459 22,210,459 - 22,210,459 - - - 22,210,459Wastewater - 46,085,127 46,085,127 - 46,085,127 - - - 46,085,127Stormwater - 13,458,005 13,458,005 - 13,458,005 - - - 13,458,005Parking Authority - 20,814,252 20,814,252 - 20,814,252 - - - 20,814,252

:

266,762,525 188,506,757 455,269,282 - 455,269,282 - 1,439,260 1,439,260 456,708,542Other Governmental Funds 57,721,089 - 57,721,089 - 57,721,089 291,327 - 291,327 58,012,416

Total fund type 324,483,614 188,506,757 512,990,371 - 512,990,371 291,327 1,439,260 1,730,587 514,720,958Internal Service Funds 236,509,680 - 236,509,680 - 236,509,680 5,640,475 - 5,640,475 242,150,155

Total 560,993,294 188,506,757 749,500,051 - 749,500,051 5,931,802 1,439,260 7,371,062 756,871,113

Components of cash and cash investmentsCash and demand deposits 32,948,481 - 32,948,481 - 32,948,481Change and petty cash funds 7,002 - 7,002 - 7,002Pool investments 716,544,568 - 716,544,568 291,252 716,835,820Investments with fiscal agents - - - 7,079,810 7,079,810Corporate stock - - - - -

Total cash and investments 749,500,051 - $ 749,500,051 7,371,062 $ 756,871,113

56

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(3) CASH AND INVESTMENTS , CONTINUED

B. Financial Risks

Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fairvalue of an investment. Generally, the longer the maturity of an investment, the greater thesensitivity of its fair value to changes in market interest rates. As a means of limiting itsexposure to fair value losses arising from rising interest rates, the City’s investment policylimits its entire general investment portfolio to maturities of less than five years, unless aspecific investment is tied to a particular cash flow need and is specifically approved byCity Council. Investment in corporate debt securities are further limited (commercial paper– 270 days, medium term corporate notes – 5 years, corporate bonds – 5 years). Maturitiesare also limited for repurchase agreements (7 days), time certificates of deposit (1 year),negotiable certificates of deposit (5 years) and bankers’ acceptances (180 days).

Credit Risk

Credit risk is the risk that an issuer of an investment will not fulfill its obligation to theholder of the investment. The City mitigates its credit risk generally by following its threeprimary investment objectives, in order, of safety, liquidity and yield. The CaliforniaGovernment Code generally limits allowable investments to those classes of investmentswith lower risk (and therefore lower yields). The City’s investment policy further restrictsthese investments to the highest quality within a category, excludes certain otherwiseallowable investments as not meeting the City’s liquidity requirement and limits the portionof the total general portfolio for certain investment types. Credit risk is measured by theassignment of a rating by a nationally recognized statistical rating organization. Presentedon page 53-54 is the minimum rating required by the California Government Code, theCity’s investment policy and debt agreements, and the actual Moody rating as of year-endfor each investment type. Also all City's investments mature in less than 3 years.

Custodial Credit Risk

Custodial credit risk for deposits is the risk that, in the event of the failure of a depositoryfinancial institution, the City will not be able to recover its deposits or will not be able torecover collateral securities that are in the possession of an outside party. For aninvestment, custodial credit risk is the risk that, in the event of failure of the counterparty,the City will not be able to recover the value of its investments or collateral securities thatare in the possession of an outside party. The City’s investment policy generally requiresthat all securities be held in the City’s name by a third-party custodian (not thecounterparty) and evidenced by safekeeping receipts. Certain investments held by fiscalagents may be held by the counterparty’s trust department or agent in the City’s name.

At June 30, 2019, the carrying amount of the City’s various demand deposit accountstotaled $32,948,481. Bank balances at June 30, 2019 totaling $16,821,970, were either

covered by Federal Deposit Insurance or were fully collateralized by investments held inthe bank’s trust department. The California Government Code requires California banksand savings and loan associations to secure a local governmental agency’s deposits bypledging government securities as collateral. The market value of pledged securities mustequal at least 110% of a government agency’s deposits. California law also allows financialinstitutions to secure a government agency’s deposits by pledging seasoned first trust deedmortgage notes having a value of 150% of a governmental agency’s total deposits. Changeand petty cash funds totaled $7,002 at June 30, 2019.

Concentration of Credit Risk

Concentration of credit risk is the risk of loss attributed to the magnitude of an entity’sinvestment in a single issuer. The investment policy of the City contains no limitations onthe amount that can be invested in any one issuer beyond that stipulated by the CaliforniaGovernment Code. Investments in any one issuer (other than U.S. Treasury securities,mutual funds, and external investment pools) that represent 5% or more of total Cityinvestments are as follows:

Issuer Investment Type Reported Amount

US Treasury US Treasury $ 184,977,350

Local Agency Investment Fund Agency 62,175,471

Federal Home Loan Bank Agency 59,574,822

Intl. Bank Recon & Development US Corporate $ 54,814,245

Investments of all funds and reporting units are pooled, thus investments in any one issuerthat represent 5% or more of total investments by reporting unit (primary government,governmental activities, major fund, non-major funds in the aggregate, etc.) are irrelevant.

57

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(3) CASH AND INVESTMENTS , CONTINUED

B. Financial Risks , CONTINUED

Concentration of Credit Risk , CONTINUED

Investment Maturities

Fair Value <1 Year <2 Years

Pooled investments:U.S. Treasury $ 184,977,356 170,074,556 14,902,800State Treasurer's Local Agency Investment Fund 62,175,471 62,175,471 -Certificates of deposit 54,957,305 54,957,305 -US Corporate 151,303,450 49,989,900 101,313,550Supranational 74,863,800 39,871,200 34,992,600Local Government Investment Pool 33,886,405 33,886,405 -U.S. Federal Agency Securities 134,838,700 134,838,700 -Commercial paper 19,833,333 19,833,333 -

Total pooled investments 716,835,820 565,626,870 151,208,950Investments held by fiscal agents:

Money market mutual funds 7,079,810 7,079,810 -

Total investments held by fiscal agents 7,079,810 7,079,810 -

Total investments $ 723,915,630 572,706,680 151,208,950

Rating as of Year End

MinimumLegal Rating Total Aaa Aa2 A1 A2 P-1 NR

Pooled investments:

U.S. Treasury N/A $ 184,977,356 165,002,556 - - - 19,974,800 -

State Treasurer's Local Agency Investment Fund N/A 62,175,471 - - - - - 62,175,471

Certificates of deposit N/A 54,957,305 - - 19,977,819 - 24,990,203 9,989,283

US Corporate A 151,303,450 - 20,081,600 29,994,500 101,227,350 - -

Supranational AA 74,863,800 74,863,800 - - - - -

Local Government Investment Pool N/A 33,886,405 - - - - - 33,886,405

U.S. Federal Agency Securities N/A 134,838,700 95,238,500 - - - 24,694,100 14,906,100

Commercial paper A-1 19,833,333 - - - - 19,833,333 -

Total pooled investments 716,835,820 335,104,856 20,081,600 49,972,319 101,227,350 89,492,436 120,957,259Investments held by fiscal agents:

Money market mutual funds AA 7,079,810 7,079,810 - - - - -

Total investments held by fiscal agents 7,079,810 7,079,810 - - - - -

Total investments $ 723,915,630 342,184,666 20,081,600 49,972,319 101,227,350 89,492,436 120,957,259

58

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(3) CASH AND INVESTMENTS , CONTINUED

B. Financial Risks , CONTINUED

State Treasurer's Local Agency Investment Fund

At June 30, 2019, the City had $62,175,471 deposited in the California State Treasurer’sLocal Agency Investment Fund (LAIF), a non-SEC registered, government-sponsoredexternal investment pool. LAIF is a voluntary program established under Section 16429.1-.3 of the California Government Code.

LAIF is part of the Pooled Money Investment Account (PMIA) and has oversight providedby the Pooled Money Investment Board (PMIB) and an in-house Investment Committee.The PMIB Board members are the State Treasurer, Director of Finance and the StateController. Additionally, LAIF has oversight by the Local Investment Advisory Board,which consists of five members, as designated by statute. The Chairman is the StateTreasurer, who appoints the other four members to two-year terms.

At June 30, 2019, PMIA analysis of the portfolio ($105.7 billion cost basis) identified thefollowing major type of security groups: Governments 49.13%, Certificate of Deposits16.99%, Federal Agency Discount Notes 17.58%, Commercial Paper 6.37%, etc. ThePMIA does not invest in derivative products.

Investment Trust of California

At June 30, 2019, the City had $33,886,405 deposited in the Investment Trust of California(CalTRUST), a program established by public agencies in California for the purpose ofpooling and investing local agency funds. A Board of Trustees supervises and administersthe investment program of the Trust.

For the CalTRUST Short-Term and Medium-Term Accounts, CalTRUST invests in fixedincome securities eligible for investment pursuant to California Government Code Sections53601, et. seq. and 53635, et. seq. Investment guidelines adopted by the Board of Trusteesmay further restrict the types of investments held by the Trust. Leveraging within theTrust’s portfolios is prohibited.

Following the investment policy direction established by the Board of Trustees, the primaryobjective of the investment manager is to safeguard the principal. The secondary objectiveshall be to meet the liquidity needs of the participants and the final objective shall be tomaximize the yield in a manner consistent with the first two objectives. The objective of theinvestment policy is to obtain the best possible return commensurate with the degree of riskthat participants are willing to assume in obtaining such return.

C. Restricted Cash and Investments

The City is required by bond covenants to retain various cash reserves and restricted cashamounts. In the absence of specific statutory provisions governing the issuance of bonds,certificates or leases, these monies may be invested in accordance with the ordinance,

resolutions or indentures specifying the types of investments its trustees or fiscal agentsmay make. These ordinances, resolutions and indentures are generally more restrictive thanthe City’s general investment policy. In no instance have additional types of investmentsbeen authorized that are not permitted by the City’s general investment policy.

The City also maintains cash and investments restricted under the terms of severalendowment trust agreements. The earnings from these monies, accounted for in the City’spermanent funds, may be spent in accordance with the endowment trust restrictionsspecifuing the amount of net appreciation on investments available for expenditures. Themonies are included in the City’s pooled cash and investment program. Restricted cash andinvestments comprised of:

Temporarily restricted $ 7,289,681Permanently restricted 81,381

$ 7,371,062

D. Cash and Investments - Deferred Compensation Plan

The City offers its employees a deferred compensation plan created in accordance withInternal Revenue Code Section 457. The City deposits deferred compensation plan assetswith the International City Managers’ Association (ICMA). Federal legislation requires thatthe assets of such plans be held in trust for the exclusive benefit of the plan participants andtheir beneficiaries. ICMA acts as the trustee for the plan assets and the City is considered tohave limited fiduciary responsibility for the plan assets. As such, the City does not reportthe deferred compensation plan assets on its financial statements. (See Note 9 to the basicfinancial statements for additional information about this plan.)

59

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(3) CASH AND INVESTMENTS , CONTINUED

D. Cash and Investments - Deferred Compensation Plan , CONTINUED

Restricted Cash and InvestmentsJune 30, 2019

Debt Issues/Capital Projects/Endownments Amount

Governmental activities:Nonmajor funds:

Permanent funds:Temporarily restricted:

Buck Fund endowment 191,077Burton Green Fund endowment 18,793

209,870

Permanently restricted:Buck Fund endowment 34,641Burton Green Fund endowment 46,740

81,381

Total permanent funds 291,251

Total governmental funds 291,251

Capital Assets Internal Service Fund:2009 Refunding Bonds reserve funds 4,805,5012012 Lease Revenue Bond project funds 36

Employee Benefits Internal Service Fund:2010 Lease Revenue Bonds project funds 834,938

Total internal service funds 5,640,4752012 Lease Revenue Bond project funds 75

Total governmental activities 5,931,801

Business-type activities:Water Enterprise Fund:

2012 Water Revenue Bonds project funds 184

Parking Facilities Enterprise Fund:2010 Lease Revenue Bonds construction funds 1,079,4302009 Refunding Bonds reserve funds 359,6102012 Lease Revenue Bond project funds 35

Total parking facilities enterprise fund 1,439,075

Total business-type activities 1,439,259

Total restricted cash and investments $ 7,371,062

E. Fair Value Measurements

The City categorizes its fair value measurement within the fair value hierarchy establishedby generally accepted accounting principles. The hierarchy is based on the relative inputsused to measure the fair value of the investments. The hierarchy gives the highest priorityto unadjusted quoted prices in active markets for identical assets (Level 1 measurements)and the lowest priority to unobservable inputs (Level 3 measurements).

The three levels of the fair value hierarchy are described as follows:

Level 1:Inputs to the valuation methodology are unadjusted quoted prices for identicalassets in active markets that the City has the ability to access.

Level 2: Inputs to the valuation methodology include:

Quoted prices for similar assets in active markets;

Quoted prices for identical or similar assets in inactive markets;

Inputs other than quoted prices that are observable for the asset;

Inputs that are derived principally from or corroborated by observable market data by

correlation or other means.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fairvalue measurement. Unobservable inputs reflect the City’s own assumptions aboutthe inputs market participants would use in pricing the asset (includingassumptions about risk). Unobservable inputs are developed based on the bestinformation available in the circumstances and may include the City’s own data.

The asset’s level within the hierarchy is based on the lowest level of input that is significantto the fair value measurement. Valuation techniques used need to maximize the use ofobservable inputs and minimize the use of unobservable inputs.

The determination of what constitutes observable requires judgment by the City’smanagement. City management considers observable data to be that market data which isreadily available, regularly distributed or updated, reliable, and verifiable, not proprietary,and provided by multiple independent sources that are actively involved in the relevantmarket.

The categorization of an investment within the hierarchy is based upon the relativeobservability of the inputs to its fair value measurement and does not necessarilycorrespond to City management’s perception of its risk.

The following is a description of the recurring valuation methods and assumptions used bythe City to estimate the fair value of its investments.

The methods described may produce a fair value calculation that may not be indicative ofnet realizable value or reflective of future fair values. The use of different methodologies orassumptions to determine the fair value of certain financial instruments could result in adifferent fair value measurement at the reporting date.

When available, quoted prices are used to determine fair value. When quoted prices inactive markets are available, investments are classified within Level 1 of the fair value

60

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(3) CASH AND INVESTMENTS , CONTINUED

E. Fair Value Measurements , CONTINUED

hierarchy. When quoted prices in active markets are not available, fair values are based onevaluated prices received by the City’s asset manager from a third party service provider.

For a large portion of the City’s portfolio, the City’s asset manager applies their levelingmethodology across all securities in a specific sector (i.e. U.S. Government SponsoredAgency Securities). Inputs to their pricing models are based on observable market inputs inactive markets.

The City has no investments categorized in Level 2 or 3. When valuing Level 2 or 3securities, the inputs or methodology are not necessarily an indication of the risksassociated with investing in those securities. Changes in valuation techniques may result intransfers into or out of an assigned level within the disclosure hierarchy.

Quoted PricesLevel 1 Total

U.S. Gov't Sponsored AgencySecurities:Supranational 74,863,800 74,863,800

US Corporate 151,303,450 151,303,450

Subtotal 226,167,250 226,167,250Investments Not Required to be

Leveled:U.S. Treasury 184,977,356State Treasurer's Local Agency

Investment Fund 62,175,471Certificates of deposit 54,957,305Local Government Investment Pool 33,886,405U.S. Federal Agency Securities 134,838,700Commercial Paper 19,833,333Held by Fiscal Agent:

Money Market Mutual Funds 7,079,810

Total Investments 723,915,630

(4) RECEIVABLES AND UNEARNED REVENUE

A. Receivables

All receivables are expected to be collected within one year, except for delinquent propertytaxes, and the notes receivable from the Chief Information Officer, David Schirmer andDirector of Parking Operations, Chad Lynn. (See Note 10 for a more comprehensivedescription of this receivable.)

Receivables at June 30, 2019 for the City’s individual major funds, and non-major andinternal service funds in the aggregate, including applicable allowances for uncollectibleaccounts, are detailed below:

61

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(4) RECEIVABLES AND UNEARNED REVENUE , CONTINUED

A. Receivables , CONTINUED

Receivables General InfrastructureNonmajor

Governmental Internal Service Total

Governmental activities:Accounts Receivable $ 13,305,366 - 531,902 1,606,500 $ 15,443,768Taxes 16,199,858 - - - 16,199,858Interest - unrestricted 1,398,432 299,055 298,490 1,398,896 3,394,873Interest - restricted - - 1,930 - 1,930Intergovernmental - - 628,462 - 628,462Interfund receivables 1,081,782 - 420,923 1,683,691 3,186,396Advances to other funds 5,933,046 - 4,597,708 - 10,530,754

Gross receivables 37,918,484 299,055 6,479,415 4,689,087 49,386,041Less: allowance for uncollectibles (496,905) - - - (496,905)

Net receivables $ 37,421,579 299,055 6,479,415 4,689,087 $ 48,889,136

Receivables WaterParkingFacilities Solid Waste Wastewater Stormwater

ParkingAuthority Total

Business-type activities:Accounts $ 5,832,593 26,273 2,251,639 1,652,219 57,059 372,268 $ 10,192,051Interest - unrestricted 239,428 185,703 146,402 262,742 87,592 144,866 1,066,733

Gross receivables 6,072,021 211,976 2,398,041 1,914,961 144,651 517,134 11,258,784Less: allowance for uncollectibles (334,573) (1,015) (44,053) (32,559) (161) (78,176) (490,537)

Net receivables $ 5,737,448 210,961 2,353,987 1,882,402 144,490 438,958 $ 10,768,247

62

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(4) RECEIVABLES AND UNEARNED REVENUE , CONTINUED

B. Unavailable / Unearned Revenue

Governmental activities report unavailable revenue in connection with receivables forrevenues that are not considered to be available to liquidate liabilities of the current period.All funds defer revenue recognition in connection with resources that have been received,but not yet earned. At June 30, 2019, the various components of unavailable revenue andunearned revenue are as follows:

Unavailable Unearned Total

Governmental funds:General fund:

Delinquent property taxes $ 3,531,784 - $ 3,531,784Building and safety related - 1,118,839 1,118,839Business tax 361,307 - 361,307Interest receivable 183,002 - 183,002Misc. receivable 9,070,607 - 9,070,607

Total general fund 13,146,700 1,118,839 14,265,539Perment funds - - -Debt services - - -Infrastructure capital projects fund - - -Special revenue funds 310,635 - 310,635

Total governmental funds 13,457,335 1,118,839 14,576,174

Internal service funds $ - - $ -

Unearned

Business-type activities:Prepaid monthly parking fees 261,101Prepaid property leases 373,245Prepaid post office lease 287,630

Total 921,976

(5) INTERFUND RECEIVABLES/PAYABLES

A. Interfund Receivables/Payables

Interfund receivable/payable balances at June 30, 2019 consist of the following:

The Community Development Block Grant Special Revenue Fund borrowed $23,824

from the General Fund. These overdrafts resulted from timing differences on collection

of grants receivable.

As of June 30, 2019, the total balance of interfund receivables due to the City from theParking Authority is $32,084,158 which consists of the following:

In 2004, the General Fund advanced a total of $17,137,709 to the Parking Enterprise

Fund to cover Beverly Canon parking lot project expenditures. Total advances from the

General Fund represent 51.7% of the $34.1 million project cost. In fiscal year 2011-

2012, the Parking Authority assumed the debt at a new rate of 3.85%. As of June 30,

2019, the balance of the receivable is $6,991,004.

During fiscal year 2008-2009 the General Fund advanced a total of $5,830,000 to the

Parking Enterprise Fund to cover tenant improvements. These advances from the

General Fund represent 89.3% of the $6.5 million budgeted project cost. In fiscal year

2011-2012, the Parking Authority assumed the debt at a new rate of 3.85%. As of June

30, 2019, the loan is fully paid off.

The Parks and Recreation Facilities and Capital Assets Internal Service Funds advanced

the Parking Enterprise Fund a combined total of $37,100,000 to cover Public Gardens

Parking lot project expenditures during fiscal year 2006-2007. In fiscal year 2011-2012,

the Parking Authority assumed the debt at a new rate of 3.85%. As of June 30, 2019, the

balance of these receivables is $25,093,154, consisting of $5,018,631 owed to the Parks

and Recreation Facilities Fund, $12,214,629 owed to the Capital Assets Fund, and

$7,859,894 owed to the Vehicles Internal Service fund. The terms of the borrowing

require unpaid interest to add to the principal.

Interfund Receivable

Interfund Payable General Fund

Parks andRecreation

Facilities FundCapital Assets

Fund*VehiclesFund* Total

Governmental Activities:Community Development Black

Grant $ 23,824 - - - 23,824Business-type Activities:

Parking Authority 6,991,004 5,018,631 12,214,629 7,859,894 32,084,158

Total business-type activities 6,991,004 5,018,631 12,214,629 7,859,894 32,084,158

Total $ 7,014,828 5,018,631 12,214,629 7,859,894 32,107,982

* Internal service fund

63

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(6) TRANSFERS

Significant interfund transfers during the year ended June 30, 2019 consist of the following:

The General Fund transferred $22,742,960 to the Infrastructure Capital Projects Fund for oil well plugging project with BHUSD, led lighting and other projects, and $6,052,506 to the Debt

Service Fund to pay for capital improvement projects and debt service, respectively. It also transferred $2,549,470 to Information Technology Fund for CCTV support, $2,000,000 to Capital

Assets Fund for City Hall Tower Rehab project, and $8,090,000 for Property Acquisitions, $553,678 to Policy, Administration and Legal Fund for funding of new Office of the City Auditor, and

$2,549,470 to the Information Technology Fund for the Fiber to the Premises project. Lastly, the General Fund transferred $2,336,900 to support the Stormwater Fund and $1,404,000 to the

Water Enterprise Fund, and $426,515 to the Workers' Compensation and Liability Claims Fund combined. Also $4,409,845 was transferred out of General Fund to Community Development

Technology Fund due to reclassing this fund as a Special Revenue Fund.

The Parks and Recreation Facilities Fund transferred $12,000 to the General Fund to support the cost of tree maintenance.

The Parking Authority Fund transferred $8,000,000 to the Parking Facilities Fund for land acquisition project.

The Street and Highways State Gas Tax Fund transferred $6,000 to the General Fund for street maintenance.

The Infrastructure Capital Projects Fund transferred $891,945 to General Fund for Santa Monica Boulevard Project and Subway Mitigation Projects, and $105,000 To the Policy, Administration

and Legal Fund for Subway Mitigation Projects.

The Air Quality Improvement Fund transferred $90,000 for purchase of alternative fuel vehicles to Vehicle Fund.

The Solid Waste Enterprise Fund transferred $60,000 to the Stormwater Fund for clean water support and street sweeping.

The Liability Claims Reserve Fund transferred $200,000 to the Infrastructure Fund in support of sidewalk replacement and repairs.

The Policy, Administration and Legal Fund transferred $642,960 to the Infrastructure Fund for subway mitigation projects.

Following is a summary of transfers between funds during the year ended June 30, 2019:

Fund Transferred To

Governmental Activities

Fund Transferred From GeneralInfrastructure

Capital Projects

OtherGovernmental

FundsCapital Assets

FundInformationTechnology Workers Comp Liability Claims Vehicle Fund

PolicyAdministration

and LegalParkingFacilities Stormwater Water Total

Governmental funds:General Fund: $ - 22,742,960 6,052,506 8,090,000 2,549,470 2,515 424,000 - 1,241,204 - 2,336,900 1,404,000 44,843,555Other governmental funds:Infrastructure Capital Projects Fund 891,945 - - - - - - - 105,000 - - 4,648 1,001,593Streets and Highways State Gas Tax 6,000 - - - - - - - - - - - 6,000Air Quality Improvement - - - - - - - 90,000 - - - - 90,000Parks & Recreation Facilities 12,000 - - - - - - - - - - - 12,000

Total governmental funds 909,945 22,742,960 6,052,506 8,090,000 2,549,470 2,515 424,000 90,000 1,346,204 - 2,336,900 1,408,648 45,953,148

Internal service funds:Liability Insurance - 200,000 - - - - - - - - - - 200,000Policy, Administration, & Legal - 642,960 - - - - - - - - - - 642,960

Total internal service funds - 842,960 - - - - - - - - - - 842,960Enterprise fund:

Solid Waste - - - - - - - - - - 60,000 - 60,000Parking Authority - - - - - - - - - 8,000,000 - - 8,000,000

Total enterprise fund - 842,960 - - - - - - - 8,000,000 60,000 - 8,902,960

Total $ 909,945 $ 23,585,920 $ 6,052,506 $ 8,090,000 $ 2,549,470 $ 2,515 $ 424,000 $ 90,000 $ 1,346,204 $ 8,000,000 $ 2,396,900 $ 1,408,648 $ 54,856,108

64

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(7) CAPITAL ASSETS

A. Capital Assets - Governmental Activities

Infrastructure assets and the City’s fine art collection are reported only in the government-wide statement of net position; all other governmental capital assets are reported in internalservice funds. The changes in capital assets for governmental activities for the year endedJune 30, 2019 were as follows:

Combined Governmental ActivitiesBeginningBalance

Acquisition andConstruction/Depreciation

Salesand Other

Dispositions TransfersEndingBalance

Capital assets not beingdepreciated:

Land $ 70,827,227 2,603,000 - - 73,430,227Fine Art Collection 3,062,514 - - 727,311 3,789,825Construction in progress 45,945,260 21,959,393 - (44,086,637) 23,818,016

Total capital assets not beingdepreciated 119,835,001 24,562,393 - (43,359,326) 101,038,068

Capital assets being depreciated:Buildings 251,018,107 661,988 (1,646,570) 480,684 250,514,209Improvements other than buildings 100,449,986 - (937,749) 5,331,814 104,844,051Infrastructure 146,269,865 - - 31,803,084 178,072,949Machinery and equipment 78,089,086 78,510 (1,659,690) 5,743,744 82,251,650

Total capital assets being depreciated 575,827,044 740,498 (4,244,009) 43,359,326 615,682,859

Less accumulated depreciationfor:

Buildings (114,934,768) (6,002,660) 359,238 - (120,578,190)Imrovements other than buildings (31,751,167) (4,203,525) 93,775 - (35,860,917)Infrastructure (63,868,391) (4,460,530) - - (68,328,921)Machinery and equipment (55,621,412) (4,582,948) 1,637,974 - (58,566,386)

Total accumulated depreciation (266,175,738) (19,249,663) 2,090,987 - (283,334,414)

Net capital assets being depreciated 309,651,306 (18,509,165) (2,153,022) 43,359,326 332,348,445

Total net capital assets - governmentalactivities $ 429,486,307 $ 6,053,228 $ (2,153,022) $ - $ 433,386,513

Depreciation

General government $ (1,294,475)Public safety (10,466,969)Public service (2,579,095)Culture and recreation (4,909,124)

Total depreciation expense -governmental activities $ (19,249,663)

B. Capital Assets - Business-type Activities

Changes in capital assets for business-type activities for the year ended June 30, 2019 wereas follows:

Business-type ActivitiesBeginningBalance

Acquisitionand

Construction/Depreciation

Sales andOther

dispositions TransfersEndingBalance

Capital assets not being depreciated:Land $ 33,114,046 - - - 33,114,046Construction in progress 6,596,856 1,792,035 - (40,463) 8,348,428

Total capital assets not beingdepreciated 39,710,902 1,792,035 - (40,463) 41,462,474

Capital assets being depreciated:Buildings 214,495,187 - - - 214,495,187Improvements other than buildings 172,516,935 - (4,052) - 172,512,883Utility systems 75,212,496 - - 40,463 75,252,959Infrastructure 11,048,431 - (50,000) - 10,998,431Machinery and equipment 11,948,785 - (1,831,055) - 10,117,730

Total capital assets being depreciated 485,221,834 - (1,885,107) 40,463 483,377,190

Less accumulated depreciationfor:

Buildings and improvements (128,214,803) (5,950,522) - 5,291,506 (128,873,819)Improvements other then building (59,519,517) (4,616,272) 4,052 - (64,131,737)Utility systems (22,622,356) (2,071,354) - (5,291,506) (29,985,216)Infrastructure (7,986,020) (212,889) 50,000 - (8,148,909)Machinery and Equipment (10,029,697) (274,578) 1,627,735 - (8,676,540)

Total accumulated depreciation (228,372,393) (13,125,615) 1,681,787 - (239,816,221)

Net capital assets being depreciated 256,849,441 (13,125,615) (203,320) 40,463 243,560,969

Total net capital assets - business-typeactivities $ 296,560,343 $ (11,333,580) $ (203,320) $ - $ 285,023,443

Depreciation

Water $ (4,589,297)Parking facilities (1,402,471)Solid waste (8,761)Wastewater (1,740,927)Stormwater (189,220)Parking authority (5,194,939)

Total depreciation expense - business-type activities $ (13,125,615)

65

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES

A. Changes in Long-Term Liabilities

Long-term liabilities related to infrastructure capital projects are reported only in thegovernment-wide statement of net positions. The governmental activities long-term liabilitiesare reported in internal service funds. The following is a summary of changes in the City’slong-term debt and other long-term liabilities during the year ended June 30, 2019. Please notethat long-term liability related to Net Pension Liabilities and Total Other PostemploymentBenefits is not included in this schedule and additional details can be found in Note 16.

BeginningBalance Additions Deductions Ending Balance

Due WithinOne Year

Governmental activities:Revenue bonds payable $ 78,670,551 - (11,467,617) $ 67,202,934 $ 11,961,979Plus (less) amounts for:Original issue premiums 7,953,165 - (400,031) 7,553,134 -

Total bonds payable 86,623,716 - (11,867,648) 74,756,068 11,961,979Note payable 19,768,215 - (2,091,017) 17,677,198 2,212,945Compensated absences* 18,093,029 8,639,017 (8,080,618) 18,651,428 8,080,618Claims payable* 39,061,896 12,508,368 (12,825,395) 38,744,869 7,321,182Capital leases payable 1,273,886 - (258,892) 1,014,994 236,565

Long-term liabilities ofgovernmental activities 164,820,742 21,147,385 (35,123,570) 150,844,557 29,813,289

Business-type activities:Revenue bonds payable 94,849,449 - (26,632,385) 68,217,064 4,908,021Plus(less) amounts for:Original issue premiums 7,141,517 - (902,579) 6,238,938 -

Total bonds payable 101,990,966 - (27,534,964) 74,456,002 4,908,021Direct Obligation Private

Placement Bonds - 14,230,000 - 14,230,000 3,545,000

Long-term liabilities ofbusiness-type activities 101,990,966 14,230,000 (27,534,964) 88,686,002 8,453,021

Total long-term liabilities $ 266,811,708 $ 35,377,385 $ (62,658,534) $ 239,530,559 $ 38,266,310

* These long-term liabilities are being accounted for in internal service funds whichallocate the cost of their services to user departments on a cost reimbursement basis. As theGeneral Fund acts as one of the primary users of internal services, it has largely been usedto liquidate these long-term liabilities.

B. Bonds and Note Payable

The City’s bonds were issued primarily to finance or refinance capital facilities. The 2012Lease Revenue Bonds are reported only in the government-wide statements of net positionsand activities; the balance of governmental activities debt issues is reported in the CapitalAssets Internal Service Fund. Business-type activities debt issues are reported in the City’senterprise funds. Several debt securities were issued for multiple purposes so the principaland related interest costs of the debt are allocated between the respective funds.

A summary of bonds outstanding at June 30, 2019 is as follows:

Debt IssueGovernmental

ActivitiesBusiness-type

Activities Total

Revenue bonds and DirectObligation PrivatePlacement Bonds:2012 Lease Revenue $ 40,762,788 $ 12,877,212 $ 53,640,0002012 Water Revenue - 30,400,000 30,400,0002010 Lease Revenue 6,456,140 26,563,860 33,020,0002009 Refunding Lease 19,984,006 1,870,994 21,855,0002018 Water Revenue - 7,815,000 7,815,0002018 Wastewater Revenue - 2,920,000 2,920,000Original issue bonds 7,553,134 6,238,936 13,792,070

Total revenue bonds anddirect obligation privateplacement bonds 74,756,068 88,686,002 163,442,070

Total bonds $ 74,756,068 $ 88,686,002 $ 163,442,070

A description of individual bond issues follows:

Revenue Bonds and Direct Obligation Private Placement Bonds

2018 Refunding Water Direct Obligation Private Placement Bonds – $9,930,000 PublicFinancing Authority, Water Revenue Refunding Bonds-Series A, issued December 2018,are due in semiannual installments ranging from $655,000 to $2,115,000 through June 1,2023, with interest rate of 2.94% payable semiannually June 1 and December 1 to WellsFargo Bank National Association as the sole purchaser. The Bonds are special limitedobligations of the Public Financing Authority and are primarily payable from installmentpayments from the City pursuant to an installment sale agreement dated December 6, 2018.The City’s obligation to make installment payments is solely payable from and secured by apledge of net revenues of the Water Enterprise Fund. The Bonds shall be secured by a firstpledge of and lien on all of the Net Revenues. In addition, the Bonds shall be secured by apledge of all of the moneys in the Bond Service Fund, including all amounts derived fromthe investment of such monies. The Bonds and any Parity Debt are equally secured by apledge, charge and lien upon the Net Revenues and such moneys without priority for series,issue, number or date, and the payment of the interest on and principal of the Bonds shallbe and are secured by an exclusive pledge, charge and lien upon the Net Revenues and suchmonies. So long as any of the Bonds are Outstanding, the Net Revenues and such moniesmay not be used for any other purpose; except that out of the Net Revenues there may beapportioned such sums, for such purposes, as are expressly permitted. Each of thefollowing events constitutes an Event of Default hereunder:

(a) Failure to pay any installment of the principal of any Bonds or any Make WholePremium when due, whether at maturity as therein expressed, by proceedings forredemption, by acceleration, or otherwise.

66

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES , CONTINUED

B. Bonds and Note Payable , CONTINUED

Revenue Bonds and Direct Obligation Private Placement Bonds , CONTINUED

(b) Failure to pay any installment of interest on the Bonds when due.

(c) Failure by the City to observe and perform any of the covenant.s

(d) The City shall (A) have entered involuntarily against it an order for relief under theUnited States Bankruptcy Code, as amended, (B) become insolvent or shall not pay, orbe unable to pay, or admit in writing its inability to pay, its debts generally as theybecome due, (C) make an assignment for the benefit of creditors, (D) apply for, seek,consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner,liquidator or similar official for it or any substantial part of its property.

(e) The City shall default on the payment of the principal of or interest on any ParityDebt, beyond the period of grace, if any, provided in the instrument or agreement underwhich such Parity Debt was created or incurred.

(f) Any representation or warranty made by or on behalf of the City in this Indenture orin any certificate or statement delivered hereunder or thereunder shall be incorrect oruntrue in any material respect when made or deemed to have been made or delivered.

(g) Any provision of this Indenture related to (A) payment of principal of or interest onthe Bonds or any Parity Debt or (B) the validity or enforceability of the pledge of theNet Revenues or any other pledge or security interest created by this Indenture shall atany time for any reason cease to be valid and binding on the City as a result of anylegislative or administrative action by a Governmental Authority with competentjurisdiction, or shall be declared, in a final nonappealable judgment by any court ofcompetent jurisdiction, to be null and void, invalid or unenforceable.

(h) Dissolution or termination of the existence of the City.

(i) Any final, unappealable judgment or judgments, writ or writs or warrant or warrantsof attachment, or any similar process or processes, which are not covered in full byinsurance, with written acknowledgement of such coverage having been provided bythe provider of such insurance coverage to the Original Purchaser, in an aggregateamount not less than $10,000,000 shall be entered or filed against the City with respectto the Water Enterprise and remain unpaid, unvacated, unbonded or unstayed for aperiod of 90 days.

The advance refunding resulted in an economic gain (difference between the presentvalue of the debt services payments on the old and new debt) of $ 429,538 and areduction of total debt service payments of $865,473.

The 2018 WRBs were issued in part to advance refunding of the 2008 WRBs, whichwere in turn issued for multiple purposes. The non-refunding portion was issued foracquiring an existing water treatment plant.

Water Fund $ 7,815,000

2018 Refunding Wastewater Direct Obligation Private Placement – $4,300,000 PublicFinancing Authority, Wastewater Revenue Refunding Bonds-Series A, issued December2018, are due in semiannual installments ranging from $720,000 to $1,380,0000 throughJune 1, 2021, with interest rates of 2.86% payable semiannually June 1 and December 1toWells Fargo Bank National Association as the sole purchaser. The Bonds are speciallimited obligations of the Public Financing Authority and are primarily payable frominstallment payments from the City pursuant to an installment sale agreement datedDecember 6, 2018. The City’s obligation to make installment payments is solely payablefrom and secured by a pledge of net revenues of the Wastewater Enterprise Fund. TheBonds shall be secured by a first pledge of and lien on all of the Net Revenues. In addition,the Bonds shall be secured by a pledge of all of the moneys in the Bond Service Fund,including all amounts derived from the investment of such moneys. The Bonds and anyParity Debt are equally secured by a pledge, charge and lien upon the Net Revenues andsuch moneys without priority for series, issue, number or date, and the payment of theinterest on and principal of the Bonds shall be and are secured by an exclusive pledge,charge and lien upon the Net Revenues and such moneys. So long as any of the Bonds areOutstanding, the Net Revenues and such moneys may not be used for any other purpose;except that out of the Net Revenues there may be apportioned such sums, for suchpurposes, as are expressly permitted. Each of the following events constitutes an Event ofDefault hereunder:

(a) Failure to pay any installment of the principal of any Bonds or any Make WholePremium when due, whether at maturity as thereinexpressed, by proceedings forredemption, by acceleration, or otherwise.

(b) Failure to pay any installment of interest on the Bonds when due.

(c) Failure by the City to observe and perform any of the covenants.

(d) The City shall (A) have entered involuntarily against it an order for relief under theUnited States Bankruptcy Code, as amended, (B) become insolvent or shall not pay, orbe unable to pay, or admit in writing its inability to pay, its debts generally as theybecome due, (C) make an assignment for the benefit of creditors, (D) apply for, seek,

67

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES , CONTINUED

B. Bonds and Note Payable , CONTINUED

Revenue Bonds and Direct Obligation Private Placement Bonds , CONTINUED

consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner,liquidator or similar official for it or any substantial part of its property.

(e) The City shall default on the payment of the principal of or interest on any ParityDebt, beyond the period of grace, if any, provided in the instrument or agreement underwhich such Parity Debt was created or incurred.

(f) Any representation or warranty made by or on behalf of the City in this Indenture orin any certificate or statement delivered hereunder or thereunder shall be incorrect oruntrue in any material respect when made or deemed to have been made or delivered.

(g) Any provision of this Indenture related to (A) payment of principal of or interest onthe Bonds or any Parity Debt or (B) the validity or enforceability of the pledge of theNet Revenues or any other pledge or security interest created by this Indenture shall atany time for any reason cease to be valid and binding on the City as a result of anylegislative or administrative action by a Governmental Authority with competentjurisdiction, or shall be declared, in a final nonappealable judgment by any court ofcompetent jurisdiction, to be null and void, invalid or unenforceable.

(h) Dissolution or termination of the existence of the City.

(i) Any final, unappealable judgment or judgments, writ or writs or warrant or warrantsof attachment, or any similar process or processes, which are not covered in full byinsurance, with written acknowledgement of such coverage having been provided bythe provider of such insurance coverage to the Original Purchaser, in an aggregateamount not less than $10,000,000 shall be entered or filed against the City with respectto the Wastewater Enterprise and remain unpaid, unvacated, unbonded or unstayed for aperiod of 90 days.

The advance refunding resulted in an economic gain (difference between the presentvalue of the debt services payments on the old and new debt) of $75,493 and areduction of total debt service payments of $258,388. The 2018 WWRBs were issued toadvance refunding of the 2008 WWRBs, which were in turn issued for multiplepurposes.

Wastewater Fund $ 2,920,000

2009 Lease Revenue Bonds – $72,015,000 Public Financing Authority, 2009 LeaseRevenue Bonds, issued December 2009, are due in annual installments ranging from$210,000 to $8,445,000 through June 1, 2039, with interest rates ranging from 0.65% to

5.00% payable semiannually June 1 and December 1. In the Indenture, the Authoritypledges and assigns to the Trustee and grants to the Trustee a lien on and security interestin all right, title and interest of the Authority in and to all of the following, which lien andsecurity interest, except as otherwise expressly set forth in the Indenture, shall be prior inright to any other pledge, lien or security interest created by the Authority in the Revenues:(i) the Revenues, (ii) all moneys and investments (excluding moneys on deposit in theRebate Fund) held from time to time by the Trustee under the Indenture, (iii) earnings onamounts included in provisions (i) and (ii) of this paragraph, (iv) all of the right, title andinterest of the Authority in the Property Lease (except for the right of the Authority to beindemnified thereunder and the obligation of the Authority and the City to rebate ExcessInvestment Earnings to the federal government) and (v) any and all other funds, assets,rights, property or interests therein, of every kind or description which may from time totime, by delivery or by writing of any kind, be sold, transferred, conveyed, assigned,pledged, mortgaged, granted or delivered to or deposited with the Trustee as additionalsecurity under the Indenture, for the equal and proportionate benefit and security of Bonds,all of which, regardless of the time or times of their authentication and delivery or maturity,shall be, with respect to the security provided thereby, of equal rank without preference,priority or distinction as to any Bond over any other Bond or Bonds, except as to the timingof payment of the Bonds. The Revenues shall not be used for any other purpose while anyof the Bonds remain Outstanding, except as expressly permitted by the provisions of theIndenture relating to the application of the Revenues to special funds. The following shalleach be an “event of default” under the Indenture: 1. If default shall be made in the due andpunctual payment of the principal of, or premium (if any) on, any Bond when and as thesame shall become due and payable, whether at maturity as therein expressed, byproceedings for redemption, by declaration or otherwise; 2. If default shall be made in thedue and punctual payment of any installment of interest on any Bond when and as suchinterest installment shall become due and payable; 3. If there shall be a default under theProperty Lease by reason of failure by the City to pay any rental under the Property Leaserelating to or in connection with the Leased Property as and when the same becomes dueand payable; 4. If default shall be made by the Authority in the observance of any of thecovenants, agreements or conditions on its part in the Indenture or in the Bonds, and suchdefault shall have continued for a period of sixty (60) days after written notice thereof,specifying such default and requiring the same to be remedied, shall have been given to theAuthority by the Trustee, or to the Authority and the Trustee by the Owners of not less thantwenty-five percent (25%) in aggregate principal amount of the Bonds at the timeOutstanding, provided that such sixty (60) day period shall be extended to one hundredtwenty (120) days in the event the City is not able to cure such default within a sixty (60)

68

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES , CONTINUED

B. Bonds and Note Payable , CONTINUED

Revenue Bonds and Direct Obligation Private Placement Bonds , CONTINUED

day period but commenced a good faith effort to cure immediately upon receipt of notice asdescribed above; or 5. If, under the provisions of any law for the relief or aid of debtors,any court of competent jurisdiction shall assume custody or control of the Authority or theCity or of the whole or any substantial part of their properties, and such custody or controlshall not be terminated or stayed within (60) days from the date of assumption of suchcustody or control; or 6. If there shall be a default under the Property Lease for any reasonother than as set forth in (c) above. If one or more such events of default shall occur, then,and in each and every such case during the continuance of such event of default, theTrustee may, and shall, at the direction of the Owners of a majority in aggregate principalamount of the Bonds Outstanding, by written notice to the Authority, declare the principalof all the Bonds then Outstanding, and the interest accrued thereon, to be due and payableimmediately, and upon any such declaration the same shall become and shall beimmediately due and payable. The foregoing provision, however, is subject to the conditionthat if, at any time after the principal of the Bonds shall have been so declared due andpayable, the Authority shall pay to or shall deposit with the Trustee a sum sufficient to payall principal of the Bonds maturing prior to such declaration and all matured installments ofinterest (if any) upon all the Bonds, and any and all other defaults known to the Trustee(other than in the payment of principal of an interest on the Bonds due and payable solelyby reason of such declaration) shall have been made good or cured to the satisfaction of theTrustee, or provision deemed by the Trustee to be adequate shall have been made therefor,then, and in every such case, the Trustee, on behalf of the Owners of all of the Bonds, shallrescind and annul such declaration and its consequences; but no such rescission andannulment shall extend to or shall affect any subsequent default, or shall impair or exhaustany right or power consequent thereon; provided, however, that no such rescission andannulment shall extend to or shall affect any subsequent Event of Default, or shall impair orexhaust any right or power consequent thereon. In addition to declaring the principal of allof the Bonds, and the interest accrued thereon, to be immediately due and payable as setforth above, the Trustee shall have the right to pursue any other remedy provided by law orin equity or otherwise after an Event of Default has occurred.

Application of Funds Upon Acceleration. All of the Revenues and all sums in the RevenueFund upon the date of the declaration of acceleration, as provided in the provisions of theIndenture relating to Events of Default and remedies, and all sums thereafter received bythe Trustee under the Indenture shall be applied by the Trustee in the following order uponpresentation of the several Bonds, and the stamping thereon of the payment if only partiallypaid, or upon the surrender thereof if fully paid: first, to the payment of the costs andexpenses of the Trustee and of the Bondowners in declaring such event of default, andincluding reasonable compensation to its or their agents, attorneys and counsel.

The advance refunding resulted in an economic gain (difference between the present valueof the debt services payments on the old and new debt) of $ 6,690,454 and a reduction oftotal debt service payments of $8,885,308. The 2009 LRBs were issued in part to advancerefunding of the 1999 and 2001 LRBs, which were in turn issued for multiple purposes.The non-refunding portion was issued for multiple purposes as well. Thus the principal hasbeen allocated and is accounted for in the appropriate City funds (enterprise, internalservice funds, and general government). During, fiscal year 2011-2012, the City issued the2012 Lease Revenue Bonds (see below) as well as the 2012 Water Revenue Bonds. Thesebond transactions included a transfer of ownership of the 2009 LRB liability from theWater Enterprise Fund to the Capital Assets Fund. The total amount of bonds outstandingwas unaffected. The following is a schedule of the allocation of the 2009 Refunding LRBs,net of discount, by fund at June 30, 2019:

Capital Assets Fund $ 19,984,006Parking Enterprise Fund 1,870,994

21,855,000Plus original issue premium 4,252,280

Net bonds outstanding $ 26,107,280

2010 Lease Revenue Bonds – $62,565,000 Public Financing Authority, 2010 LeaseRevenue Bonds, issued August 2010, are due in annual installments ranging from $930,000to $5,825,000 through June 1, 2040, with interest rates ranging from 0.52% to 6.774%payable semiannually June 1 and December 1. The Bonds are special limited obligations ofthe Public Financing Authority and are payable solely from rent payments from the Citypursuant to a lease agreement. The 2010 LRBs were issued in three distinct series. Series Abonds had a value of $13,705,000; Series B bonds had a value of $28,940,000, and Series CBuild America Bonds had a value of $19,920,000. The Series A bonds and the Series CBuild America Bonds were issued primarily to finance the acquisition and construction ofcertain capital improvements to be owned and operated by the City. The taxable Series Bbonds were issued primarily to finance a portion of the acquisition and construction costsof the improvements previously mentioned, and to fund the City’s alternative retireemedical program (ARMP). Please see Note 11, Postemployment Health Care Benefits formore detailed information regarding the ARMP. Under the Indenture, the Authority pledgesand assigns to the Trustee and grants to the Trustee a lien on and security interest in allright, title and interest of the Authority in and to all of the following, which lien andsecurity interest, except as otherwise expressly set forth in the Indenture, will be prior inright to any other pledge, lien or security interest created by the Authority therein: 1. theRevenues, 2. all moneys and investments (excluding moneys on deposit in the Rebate

69

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES , CONTINUED

B. Bonds and Note Payable , CONTINUED

Revenue Bonds and Direct Obligation Private Placement Bonds , CONTINUED

Fund) held from time to time by the Trustee under the Indenture, 3. earnings on amountsincluded in provisions (i) and (ii) above, 4. all of the right, title and interest of the Authorityin the Property Lease (except for the right of the Authority to be indemnified thereunderand the obligation of the Authority and the City to rebate Excess Investment Earnings tothe federal government), and 5. any and all other funds, assets, rights, property or intereststherein, of every kind or description which may from time to time hereafter, by delivery orby writing of any kind, be sold, transferred, conveyed, assigned, pledged, mortgaged,granted or delivered to or deposited with the Trustee as additional security under theIndenture. This pledge, assignment, grant, lien and security interest are for the equal andproportionate benefit and security Bonds, all of which, regardless of the time or times oftheir authentication and delivery or maturity, are, with respect to the security providedthereby, of equal rank without preference, priority or distinction as to any Bond over anyother Bond or Bonds, except as to the timing of payment of the Bonds and except withrespect to Refundable Credits, as provided in the Indenture. Whenever any event of defaultreferred to in the Property Lease happens and continues, the Authority is authorized underthe terms of the Property Lease to exercise any and all remedies available under law orgranted under the Property Lease. See “APPENDIX A – Summary of Principal LegalDocuments” for a detailed description of available remedies in the case of a default underthe Property Lease. In the event of a default, there is no remedy of acceleration of the totalBase Rental Payments due over the term of the Property Lease. The Trustee is notempowered to sell the Site and Facilities and use the proceeds of such sale to prepay the2010 Bonds or pay debt service on the 2010 Bonds. The City will be liable only for BaseRenal Payments on an annual basis and, in the event of a default, the Trustee would berequired to seek a separate judgement each year for that year’s defaulted Base RentalPayments. Any such suit for money damages would be subject to limitation on legalremedies against municipalities in California, including a limitation on enforcement ofjudgments against funds of a fiscal year other than the fiscal year in which the Base RentalPayments were due and against funds needed to serve the public welfare and interest.

Application of Funds Upon Acceleration. All of the Revenues and all sums in the RevenueFund upon the date of the declaration of acceleration, as provided in the provisions of theIndenture relating to Events of Default and remedies, and all sums thereafter received bythe Trustee under the Indenture shall be applied by the Trustee in the following order uponpresentation of the several Bonds, and the stamping thereon of the payment if only partiallypaid, or upon the surrender thereof if fully paid:

First, to the payment of the costs and expenses of the Trustee and of the Bondowners indeclaring such even of default, and including reasonable compensation to its or their

agents, attorneys and counsel;

Second, to the payment of the whole amount then owing and unpaid upon the Bonds forprincipal and interest, with interest, to the extent permitted by law, on the overdue principaland installments of interest at the rate equal to the rate per annum on such Bonds (but suchinterest on overdue installments of interest shall be paid only to the extent funds areavailable therefor following payment of principal and interest and interest on overdueprincipal, as aforesaid), and in case such moneys shall be insufficient to pay in full thewhole amount so owing and unpaid upon the Bonds, then to the payment of such principaland interest without preference or priority of principal over interest, or of interest overprincipal or of any installment of interest over any other installment of interest, ratably tothe aggregate of such principal interest.

The following is a schedule of the allocation of the 2010 Refunding LRBs, net of discount,by fund at June 30, 2019:

Employee Benefits Internal Service Fund $ 6,456,140Parking Facilities Fund 26,563,860

33,020,000Plus original issue premium 498,752

Net bonds outstanding $ 33,518,752

2012 Water Revenue Bonds – $38,925,000 Public Financing Authority, Water RevenueBonds, issued April 2012, are due in annual installments ranging from $215,000 to$2,520,000 through June 1, 2037, with interest rates ranging from 3.00% to 5.00% payablesemiannually June 1 and December 1. The Bonds issued are (i) to refund on a current basisan outstanding issue of the Authority’s bonds captioned “City of Beverly Hills PublicFinancing Authority, 2007 Water Revenue Bonds”, (ii) to prepay certain obligations of theWater Enterprise in order to contribute funds toward the refunding of an outstanding leaserevenue bond issue of the Authority, and (iii) to pay the costs of issuing the Bond. TheBonds are special limited obligations of the Public Financing Authority and are primarilypayable from installment payments from the City pursuant to an installment sale agreementdated April 11, 2002.Subject only to the provisions of the Indenture permitting theapplication thereof for the purposes and on the terms and conditions set forth therein, all ofthe Revenues and all amounts held in any fund or account established under the Indenture(other than the Costs of Issuance Fund and amounts in any fund or account establishedunder the Indenture that are required to be paid to the United States of America) arepledged to secure the payment of the principal of and interest and premium (if any) on the2012 Bonds in accordance with their terms and the provisions of the Indenture. This pledge

70

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES , CONTINUED

B. Bonds and Note Payable , CONTINUED

Revenue Bonds and Direct Obligation Private Placement Bonds , CONTINUED

constitutes a lien on and security interest in the Revenues and such amounts and will attach,be perfected and be valid and binding from and after the Closing Date, without the need forany physical delivery thereof or further act.

Definition of Revenues. “Revenues” are defined in the Indenture as follows:

1. All amounts received by the Authority or the Trustee pursuant or with respect to theInstallment Sale Agreement, including, without limiting the generality of the foregoing, allof the Installment Payments (including both timely and delinquent payments, any latecharges, and whether paid from any source, but excluding any Additional Payments),prepayments, insurance proceeds, condemnation proceeds, and

2. All interest, profits or other income derived from the investment of amounts in any fundor account established pursuant to the Indenture.

Each of the following constitutes an event of default under the Installment Sale Agreement:

1. Failure by the City to pay any Installment Payment when due and payable under theInstallment Sale Agreement, any 2008 Installment Payment when due and payable underthe 2008 Agreement, or any payment on any Parity Obligation when due and payablethereunder (other than any payment in the nature of an Additional Payment).

2. Failure by the City to pay any Additional Payment or any similar payment due withrespect to a Parity Obligation when due and payable hereunder, and the continuation ofsuch failure for a period of 30 days.

3. Failure by the City to observe and perform any covenant, condition or agreement on itspart to be observed or performed, other than as referred to in the preceding clauses (a) or(b), for a period of 60 days after written notice specifying such failure and requesting that itbe remedied has been given to the City by the Authority or the Trustee; provided, however,that if the City notifies the Authority and the Trustee that in its reasonable opinion thefailure stated in the notice can be corrected, but not within such 60-day period, such failurewill not constitute an event of default under the Installment Sale Agreement if the Citycommences to cure such failure within such 60-day period and thereafter diligently and ingood faith cures the failure in a reasonable period of time.

4. The filing by the City of a voluntary petition in bankruptcy, or failure by the Citypromptly to lift any execution, garnishment or attachment, or adjudication of the City as abankrupt, or assignment by the City for the benefit of creditors, or the entry by the City intoan agreement of composition with creditors, or the approval by a court of competentjurisdiction of a petition applicable to the City in any proceedings instituted under theprovisions of the Federal Bankruptcy Code, as amended, or under any similar acts which

may hereafter be enacted.

5. The occurrence of any event defined to be an event of default under any ParityObligations Documents.

The advance refunding resulted in an economic gain (difference between the present valueof the debt services payments on the old and new debt) of $4,090,450 and a reduction oftotal debt service payments of $9,849,432. The City’s obligation to make installmentpayments is solely payable from and secured by a pledge of net revenues of the WaterEnterprise Fund. For fiscal year ending June 30, 2018 principal payment was $1,630,000and interest payment was $1,619,400 while net revenue for Water Enterprise Fund was$11,382,737

Water Fund $ 30,400,000Plus original issue premium 4,218,664

Net bonds outstanding $ 34,618,664

2012 Lease Revenue Bonds – $58,140,000 Public Financing Authority, 2012 LeaseRevenue Bonds, issued April 2012, are due in annual installments ranging from $90,000 to$6,115,000 through June 1, 2037, with interest rates ranging from 2.00% to 5.00% payablesemiannually June 1 and December 1. The Bonds issued are primarily to refund on acurrent basis the outstanding bonds of the Authority captioned “City of Beverly HillsPublic Financing Authority 2007 Lease Revenue Bonds (Capital Improvements Projects).”In addition, the proceeds of the Bonds will pay the costs of issuing the Bond. The principalhas been allocated and is accounted for in the appropriate City funds (enterprise, internalservice funds, and general government). Under the Indenture, the Authority pledges andassigns to the Trustee and grants to the Trustee a lien on and security interest in all right,title and interest of the Authority in and to all of the following, which lien and securityinterest, except as otherwise expressly set forth in the Indenture, will be prior in right to anyother pledge, lien or security interest created by the Authority therein:

1. the Revenues,

2. all moneys and investments (excluding moneys on deposit in the Rebate Fund) held fromtime to time by the Trustee under the Indenture,

3. earnings on amounts included in provisions (i) and (ii) above,

4. all of the right, title and interest of the Authority in the Property Lease (except for theright of the Authority to be indemnified thereunder and the obligation of the Authority and

71

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES , CONTINUED

B. Bonds and Note Payable , CONTINUED

Revenue Bonds and Direct Obligation Private Placement Bonds , CONTINUED

the City to rebate Excess Investment Earnings to the federal government), and

4. any and all other funds, assets, rights, property or interests therein, of every kind ordescription which may from time to time hereafter, by delivery or by writing of any kind,be sold, transferred, conveyed, assigned, pledged, mortgaged, granted or delivered to ordeposited with the Trustee as additional security under the Indenture.

This pledge, assignment, grant, lien and security interest are for the equal and proportionatebenefit and security Bonds, all of which, regardless of the time or times of theirauthentication and delivery or maturity, are, with respect to the security provided thereby,of equal rank without preference, priority or distinction as to any Bond over any other Bondor Bonds, except as to the timing of payment of the 2012 Bonds.

Whenever any event of default referred to in the Property Lease happens and continues, theAuthority is authorized under the terms of the Property Lease to exercise any and allremedies available under law or granted under the Property Lease. See “APPENDIX A –Summary of Principal Legal Documents” for a detailed description of available remedies inthe case of a default under the Property Lease. If a default occurs, there is no remedy ofacceleration of the total Base Rental Payments due over the term of the Property Lease. TheTrustee is not empowered to sell the Site and Facilities and use the proceeds of such sale toprepay the 2012 Bonds or pay debt service on the 2012 Bonds. The City will be liable onlyfor Base Renal Payments on an annual basis and, in the event of a default, the Trusteewould be required to seek a separate judgement each year for that year’s defaulted BaseRental Payments. Any such suit for money damages would be subject to limitation on legalremedies against municipalities in California, including a limitation on enforcement ofjudgments against funds of a fiscal year other than the fiscal year in which the Base RentalPayments were due and against funds needed to serve the public welfare and interest.

Application of Funds Upon Acceleration. All of the Revenues and all sums in the RevenueFund upon the date of the declaration of acceleration, as provided in the provisions of theIndenture relating to Events of Default and remedies, and all sums thereafter received bythe Trustee under the Indenture shall be applied by the Trustee in the following order uponpresentation of the several Bonds, and the stamping thereon of the payment if only partiallypaid, or upon the surrender thereof if fully paid:

First, to the payment of the costs and expenses of the Trustee and of the Bondowners indeclaring such even of default, and including reasonable compensation to its or theiragents, attorneys and counsel;

Second, to the payment of the whole amount then owing and unpaid upon the Bonds forprincipal and interest, with interest, to the extent permitted by law, on the overdue principal

and installments of interest at the rate equal to the rate per annum on such Bonds (but suchinterest on overdue installments of interest shall be paid only to the extent funds areavailable therefor following payment of principal and interest and interest on overdueprincipal, as aforesaid), and in case such moneys shall be insufficient to pay in full thewhole amount so owing and unpaid upon the Bonds, then to the payment of such principaland interest without preference or priority of principal over interest, or of interest overprincipal or of any installment of interest over any other installment of interest, ratably tothe aggregate of such principal interest.

The advance refunding resulted in an economic gain (difference between the present valueof the debt services payments on the old and new debt) of $6,900,883 and a reduction oftotal debt service payments of $19,518,863. The following is a schedule of the allocation ofthe 2012 Refunding LRBs by fund at June 30, 2019:

Capital Assets Fund $ 13,308,881Parking Facilities Fund 12,877,212General Long-Term Debt 27,453,907

53,640,000Plus original issue premium 4,822,373

Net bonds outstanding 58,462,373

Total bonds outstanding $ 163,442,072

Note Payable

On January 26th, 2009 the City of Beverly Hills Public Financing Authority entered into anagreement with City National Bank to borrow against a line of credit up to an amount of$32,000,000 for the construction of a 72,460 sq. ft. four story office building at 331 N.Foothill Road, Beverly Hills, CA 90210. The line of credit was drawn down throughDecember of 2010, at which time, the City converted the line of credit into a long termobligation. The obligation has a term of 15 years and an interest rate of 5.72%. Interest andprincipal are payable in the amount of $265,217 per month on the first day of the monthafter the loan closing. This translates to an annual repayment amount of $3,182,609. As ofJune 30, 2019, the amount borrowed against the line of credit is $32,000,000. The assetpledged as security for the loan is the constructed 72,460 sq. ft. four story office building at331 N. Foothill Road, Beverly Hills, CA 90210.

Events of Default. The occurrence of any of the following will constitute an Event ofDefault under this Agreement:

1 Borrower fails to pay when due any installment of principal or interest or any other

72

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES , CONTINUED

B. Bonds and Note Payable , CONTINUED

Note Payable , CONTINUED

amount payable under the Loan Documents that is not cured within (10) business days afterwritten notice;

2 The failure of the City to timely remit rent due Borrower under the Foothill Lease toCNB pursuant to the Acknowledgement of Assignment that is not cured within ten (10)business days after written notice;

3 Any Person which is a party to any Loan Document fails to perform or observe any of theterms, provisions, covenants, conditions, agreements or obligations contained in the LoanDocuments, and fails to cure the same within thirty (30) days after written notice;

4 The entry of an order for relief or the filing of an involuntary petition with respect toBorrower or the City under the United States Bankruptcy Code, which, if involuntary, isnot dismissed within (60) days, the appointment of a receiver, trustee, custodian orliquidator of or for any part of the assets or property of Borrower or the City, which is notdismissed within ninety (90) days;

5 Any financial statement, representation or warranty made or furnished by Borrower orthe City in connection with the Loan Documents proves to be in any material respectincorrect and misrepresents Borrower’s or the City’s ability to pay their Debs as theybecome due; or

6 Any Person obtains an order or decree in any court of competent jurisdiction enjoining orprohibiting Borrower, the City or CNB or any of them performing this Agreement, andsuch proceedings are not dismissed or such decree is not vacated within (60) days after thegranting thereof.

The Credit Agreement; Assignment. CNB has made a loan to the Authority under theCredit Agreement (“Loan”). The Loan is secured, in part, by an assignment to the CNB bythe Authority of the Authority’s right to receive Base Rental payments due under theGround Lease. The Authority hereby pledges and assigns to the CNB, and grants to theCNB, a lien on and security interest in all right, title and interest of the Authority in and tosuch Base Rental payments due under the Ground Lease.

Event of Default. Default under any document or instrument evidencing Debt incurredunder any indenture, agreement or other instrument under which such Debt may be issuedand fail to cure the default within the applicable cure period, if any, or any event to occurunder any of the foregoing which would permit any holder of the Debt outstandingthereunder to declare the same due and payable before its stated maturity, whether or notsuch acceleration occurs or such default be waived. As of June 30, 2019, the balance of thenote payable was $17,677,198.

Reserve Funds

Certain bond issues require that reserve funds be established in amounts equal to either:

(1) 10% of the outstanding principal

(2) 125% of remaining average annual debt service.

Based on the reserve alternative calculation methods, restricted assets at June 30, 2019,consisting of cash and investments, include the following:

Requirement Balance

2009 Lease Revenue $ 3,018,135 $ 5,165,111

73

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES , CONTINUED

B. Bonds and Note Payable , CONTINUED

Annual Debt Service Requirements to Maturity

The annual debt service requirements on bonds, notes, and capital leases outstanding at June 30, 2019, are as follows:

Revenue BondsDirect Obligation Private Placement

Bonds Note Payable

Governmental activities Business-type Activities Business-type Activities Business-type Activities Total Total Debt

Fiscal Year Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Service

2020 $ 11,961,979 3,135,912 4,958,021 3,814,807 3,495,000 287,469 2,212,945 969,664 $ 19,132,945 $ 7,920,383 $ 27,053,3282021 8,462,108 2,563,159 3,927,891 3,598,914 3,545,000 183,671 2,347,366 835,244 14,737,365 6,997,317 21,734,6822022 4,339,075 2,177,092 970,925 3,416,215 3,645,000 87,833 2,487,177 695,433 7,797,177 6,288,740 14,085,9172023 4,525,041 1,993,007 2,574,961 3,313,956 2,235,000 28,886 2,635,315 547,294 9,735,317 5,854,257 15,589,5742024 4,734,714 1,782,588 2,365,285 3,142,502 1,310,000 - 2,791,286 391,324 9,891,285 5,316,414 15,207,6992025-2029 20,458,330 5,323,076 18,681,665 12,743,059 - - 5,203,108 266,179 44,343,103 18,332,314 62,675,4172030-2034 6,800,777 2,178,548 17,384,218 8,053,523 - - - - 24,184,995 10,232,071 34,417,0662035-2039 5,920,910 671,818 15,669,093 2,938,179 - - - - 21,590,003 3,609,997 25,200,0002040-2044 - - 1,685,007 114,141 - - - - 1,685,007 114,141 1,799,148

Total minimum debt servicepayments 67,202,934 19,825,200 68,217,066 41,135,296 14,230,000 587,859 17,677,197 3,705,138 153,097,197 64,665,634 217,762,831

Unamortized portion of:Original issue premium 7,553,134 6,238,936 - - - 13,792,070 13,792,070

Net total debt outstanding $ 74,756,068 - 74,456,002 - 14,230,000 587,859 17,677,197 - $ 166,889,267 $ 64,665,634 $ 231,554,901

74

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(8) LONG-TERM LIABILITIES , CONTINUED

C. Capital Leases

During fiscal year 2011-2012, there was an energy conservation project which the Cityundertook. This project involved installing energy saving equipment on City facilities. Thisequipment and related installation costs were financed by Southern California Edison. Therepayment is contracted to occur through utility usage cost savings. The total amountfinanced was the cost of the equipment which was $2,717,192. As of June 30, 2019, thecapital lease payable amount is $1,014,994 and the accumulated depreciation on theequipment under capital lease was $442,682. The equipment under lease are pledged assecurity for this obligation to Southern California Edison.

The capital leases are scheduled to mature as follows:

Matures inFiscal Year

Ending June 30

PrincipalAmount at

June 30, 2019

2020 242,210

2021 236,459

2022 195,624

2023 167,742

2024 172,959

Total $ 1,014,994

D. Claims Payable

The City has initiated self-insurance programs to provide for general liability, workers’compensation claims and unemployment insurance claims. These activities are accountedfor in self-insurance internal service funds. Details of self-insurance liabilities at June 30,2019 are as follows:

GeneralLiability

Workers'Compensation Total

Current $ 3,135,223 4,185,960 $ 7,321,183Long-term 14,286,377 17,137,310 31,423,687

$ 17,421,600 21,323,270 $ 38,744,870

For changes in the liabilities for claims for each of the City’s self-insurance funds (generalliability, workers’ compensation and unemployment), for the years ended June 30, 2019and 2018, please refer to note 1d.

E. Compensated Absences

Compensated absences consists of accrued vacation leave, administrative leave, holidayleave, compensatory, universal, and vested sick leave (e.g., that portion of unused sickleave benefit that vests and is payable upon retirement or separation from the City).Compensated absences of all funds are reported in the Employee Benefits Internal ServiceFund. Compensated absences consist of the following at June 30, 2019:

Total

Vacation leave:Current:

Internal service $ 2,869,335Long-term 4,215,663

Total vacation leave 7,084,998Vested sick leave:

Current:Internal service 1,894,621

Long-term 6,355,147

Total vested sick leave 8,249,768Vested other leaves:

Current:Internal service 3,316,662

Total compensated absences $ 18,651,428

F. No Commitment Debt

In December 2002, the Community Facilities District 2002-A (Business Triangle) of theCity of Beverly Hills (Community Facilities District) issued $16,215,000 of Special TaxBonds, Series 2002. These bonds were issued by the Community Facilities District, aspecial assessment district within the Business Triangle of the City, the location of worldfamous retail businesses and hotels. The net proceeds of these bonds together with acontribution from the City of approximately $2.7 million, is being used to fund a $15million Urban Design Program within the City’s Business Triangle. This program willprovide for pedestrian and other infrastructure improvements which will be owned andmaintained by the City upon completion of the project. The Community Facility DistrictBonds, payable solely from net special assessments levied on taxable properties within theDistrict, are not obligations of the City, but rather are limited obligations of the CommunityFacilities District. Accordingly, these bonds are not included in the accompanying basicfinancial statements. At June 30, 2019, the outstanding principal amount of the bonds was$9,175,000.

(9) EMPLOYEE DEFERRED COMPENSATION PLANS

The City offers an Employee Deferred Compensation Plan created in accordance with InternalRevenue Code Section 457 to its employees, allowing them to defer or postpone receipt ofincome. Amounts so deferred may not be paid to the employee during employment with theCity except for a catastrophic circumstance creating an undue financial hardship for the

75

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(9) EMPLOYEE DEFERRED COMPENSATION PLANS , CONTINUED

employee or through qualifying leaves.

Effective January 1, 1999, Federal legislation (Small Business Job Protection Act of 1996)requires the Section 457 plan assets to be placed in trust for the exclusive use of the planparticipants and their beneficiaries.

The City’s deferred compensation administrator, the International City Managers’ Association(ICMA) qualifies as the plan trustee to meet Federal requirements. Since the plan assets are nolonger considered the property and rights of the City, such assets are no longer reflected in theaccompanying basic financial statements.

The city contributes the following amounts to a deferred compensation plan:

Executives, Police Management, Fire Safety, and Fire Management employees - $30 per

month

Safety Support and Confidential employees - $60 per month

Technical Services and Supervisors employees - $100 per month

Management and Professional employees - $50 per month

Police Safety employees - $320 per month

Police Sergeants - $475 per month

City Manager -3% of annual base salary

City Clerk - $30 per month

City Auditor - $30 per month

The City also offers to its employees a deferred compensation plan created in accordance withInternal Revenue Code Section 401(k). All amounts deferred and invested under this plan, withrelated interest, are the property and rights of the participating employees and, as such, are notreflected in the accompanying financial statements.

(10) RELATED PARTY TRANSACTIONS - SALE/LEASEBACK

In November 1984, the Parking Authority paid the City $6,500,000 in consideration for certainland to be used as the site for the construction of a new parking structure. Upon completion inAugust 1986, the City leased the parking facility from the Parking Authority. The sale of theland has been accounted for as a sale/leaseback transaction, and the related gain of $1,890,055is being amortized into income in the Parking Enterprise Fund over the 55-year life of thelease. At June 30, 2019 the balance remaining is $755,979.

During Fiscal Year 2007-2008 the City of Beverly Hills initiated the Housing Assistance LoanProgram which provides housing assistance for other executive employees to help them cope

with the high cost of housing and to achieve additional objectives.

On October 9th, 2008 the Chief Information Officer, David Schirmer entered into the HousingAssistance Loan Program and was provided an interest only (with future graduated terms)home loan for $952,771. The loan period is 40 years with an interest rate of 3% per annum. AtJune 30, 2019 the outstanding principal balance of the loan was $839,102.

On August 20th, 2009, the City provided a housing assistance loan to Chad Lynn, Director ofParking Operations, for $735,000. The loan period is 40 years with an interest rate of 3.0% perannum. At June 30, 2019 the outstanding principal balance of the loan was $624,961.

The balances of the notes receivable are contained within the General Fund receivables (seeNote 4 Section A).

(11) POST EMPLOYMENT HEALTH CARE BENEFITS

A. Defined Benefit Plan

In addition to the pension benefits described in Note 16, the City provides postemploymenthealth care benefits in accordance with employees’ respective compensation plans.

The other post-employment benefit (OPEB) provisions of the compensation plans arenegotiated with formally recognized bargaining units and groups not formally recognizedand are adopted by City Council action. Benefit provisions are stated in the bargaining unitMemorandums of Understanding (MOUs) or compensation plan and may be amendedduring negotiations, subject to City Council approval. The City is currently enrolled invarious health care plans administered by the California Public Employees RetirementSystem (PERS). The City, as a single employer of this defined benefit plan, pays retirees’PERS health care premiums to the following limits as stipulated in the compensation plans:

Technical Service employees:

- For service retirees after the following dates through age 65, or the date the retiree

becomes eligible for Medicare, the following health benefits are provided:

After June 1, 1985 Single-party rateAfter June, 1 1986 $220/monthAfter December 1, 1987 $245/monthAfter December 1, 1988 $270/month

- For service retirees after February 1, 1990 through age 70, or the date the retireebecomes eligible for Medicare, $300 per month in health benefits is provided.

- For service retirees after July 1, 2000 through age 70, or the date the retiree becomeseligible for Medicare, the City provides up to $300 per month in health benefits. Thebenefit is extended up to $150 per month after age 70 if the employee retired with 20 ormore years of service. For retirees over the age of 70 who do not meet the requirement, theCity will pay the statutory minimum.

76

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(11) POST EMPLOYMENT HEALTH CARE BENEFITS , CONTINUED

A. Defined Benefit Plan , CONTINUED

Police Association employees:

- For employees retiring (service retirement only) after July 1, 1989 through age 70, the

City pays up to the two-party rate of the Peace Officers Research Association of

California (PORAC) Plan under PERS.

- For retirees who retired between July 1, 1978 and July 1, 1989, the City pays

$227.91/month, through age 65.

- Retired sworn police personnel who received a disability retirement on or after July 1,

1987 are eligible for the PERS health plan if the employee had 20 years of service with

the Beverly Hills Police Department or is over 45 years of age at the time of his or her

retirement.

Police Management Association employees:

- For employees who retired after July 1, 1989, the City pays up to the two-party rate of

the PORAC Plan under PERS (with spouse continuance).

-For employees who retired before July 1, 1978, the City pays the PERS statutory

minimum.

Firemen’s Association employees:

- For management employees retired after July 1, 1980 with 15 years active City service,

the City pays up to the two-party rate of the PORAC Plan, through age 65.

- For non-management employees (service retirement only) retired after July 1, 1980, the

City pays up to the two-party rate of the PORAC Plan, up to age 65.

- Retired sworn fire employees who received a disability retirement on or after July 1,

1981 are eligible for PERS health care coverage if the employee would have received a

service retirement of 50% or greater.

-For retirees over the age of 65 who do not meet the requirement, the City will pay thestatutory PEMHCA minimum.

Safety Support Association employees:

- For employees service-retired on or after July 1, 1984, the City pays up to the single-

party coverage up to the age of 65.

- For service retirees after July 1, 2001, the City provides health benefits up to $150 per

month if the employee retired after age 60 with 20 or more years of service and up to $75

per month with 15 to 20 years of service.

Executive employees and Management and Professional employees:

For employees service-retired after July 1, 1981, with the exception of those employees

hired after December 2, 1997, the City pays up to the two-party rate of the PERSCare

Plan (with spouse continuance). For employees hired or promoted into the management

and professional service group on or after December 2, 1997, but on or before December

31, 2009, and who complete a minimum of 5 years of full-time employment with the

City, receive a service retirement and do not perform any paid work for a PERS

contracting agency following retirement, the City pays up to the single party coverage of

the PERSCare Plan at 25% for employees who have completed at least 5 years of service

with the City, incremented by 5% for each year of service completed up to 20 years. For

Executive employees, the same is true, but at the two-party rate as opposed to the one-

party rate. After December 2, 1997, there is no spousal continuance.

Confidential employees:

- For employees service-retired after July 1, 1981, the City pays up to the one-party rate

of the PERSCare Plan.

Supervisors Association employees:

- For employees who were hired prior to January 1, 2010 will receive up to $350 per

month until: 1) employee reaches the age of 70 or, 2) retiree becomes eligible for

Medicare or, 3) retiree becomes eligible for another employer paid medical plan or V.A.

benefits or, 4) for Kaiser enrollees, the retiree moves from the Kaiser Permanente service

area .

- For eligible retirees who are age 70 or older will receive $150 per month toward

medical coverage if the retiree: 1) retires after July 1, 2000 and, 2) has 20 years or more

of full time service.

- For retirees over the age of 70 who do not meet these criteria, the City will pay the

PERS statutory minimum on their behalf.

The above postemployment health benefits are currently financed on a pay-as-you-go basis,and there is no required or maximum contribution rate for the City, or for plan members.The City Council will set or amend contribution requirements to fund the OPEB liability asneeded.

During fiscal year 2010, the City provided an offer for full-time employees hired beforeJanuary 1, 2010 (except sworn employees and members of the Supervisors Association) toparticipate in the Alternative Retiree Medical Program (ARMP). Employees who did notaccept the offer kept their current retiree medical benefits under their applicable collectivebargaining agreement or compensation plan. Employees who choose to accept the ARMPwill receive an actuarially determined “Transition Amount” and a monthly “ResidualAmount” (if applicable). Employees choosing this new retiree medical program will, in

77

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(11) POST EMPLOYMENT HEALTH CARE BENEFITS , CONTINUED

A. Defined Benefit Plan , CONTINUED

effect, have opted-out of their current retiree medical program.

Employees who elected to participate in ARMP received a one-time lump sum transitionamount (referred to as the “Transition Amount”). The Transition Amount is an actuariallydetermined value of current retiree medical coverage based on each employee’s currentcompensation plan or bargaining unit and her/his total years of service with the City andother actuarial factors.

As a mandatory aspect of ARMP, 20% of the Transition Amount was placed in an ICMA-RC VantageCare Retirement Health Savings Plan account (referred to as an “RHSaccount”) on the employee’s behalf. Amounts in this RHS account can be used to pay foreligible medical expenses for the employee and eligible dependents after leavingemployment with the City.

Employees who were not already eligible for full retiree medical coverage at the time, thenunder the terms of the applicable collective bargaining agreement or compensation plan, inaddition to the Transition Amount, employees began receiving a monthly contribution totheir RHS account while employed by the City. Contributions into the RHS account will bemade until the amount of the one-time Transition Amount and the monthly contributionsequal the actuarially calculated value of full retiree medical coverage under the particularbargaining agreement or compensation plan the employee would have received if she/hehad worked with the City until eligible to retire. These additional monthly amounts arereferred to as the employee’s “Residual Amount.”

The City will apply the remainder of the one-time Transition Amount in the following threeoptions.

Option 1: Receive as cash (the cash payment is referred to as the “ARMP Tenure Benefit”)in the following year. Option 2: Distribute among deferred compensation plans (the 457(b),401(k), and 415(m) plans). Option 3: Receive a portion as a cash ARMP Tenure Benefit inthe following year and the balance deposited in deferred compensation plans.

Contributions to the deferred compensation plans were transmitted on behalf of employeesto ICMA-RC in the later half of December 2010 and any cash distributions of the ARMPTenure Benefit were received by employees still employed by the City during February2011 (unless employment terminated due to death or disability in which case the cash waspaid upon termination).

The City has set aside a total amount of $67,380,791. Since the money set aside has notbeen placed into a trust that meets the requirements of paragraph 4 of GASB 75, the assetscannot offset the total OPEB liability.

B. Eligibility

The City currently provides these benefits to an average of 1,459 participants for the yearended June 30, 2019. Additionally, for those retirees and their covered family memberswho no longer qualify for the benefits detailed above, but who choose to maintaincoverage, the City contributed the Minimum Employer Contribution amount as prescribedby California Government Code section 22892 of the Public Employees' Medical andHospital Care Act (PEMHCA). Government Code section 22892 of the PEMHCAestablishes the contracting agencies' minimum health premium contribution for theirparticipating active membership as $128 per month from July 1, 2018 through December31, 2018. From January 1, 2019 through June 30, 2019 the City contributed $133 permonth. The City currently provides this benefit to 421 participants at a cost of $626,580 forthe year ended June 30, 2019. Since the City administers the OPEB plan by paying aportion of the benefits, a stand-alone financial report of the OPEB plan is not produced andall relevant disclosures are included in this section.

Employees of the City are eligible for retiree health benefits if they are between 50-55 yearsof age as of the last day of work prior to retirement and are a vested member of CalPERS.Membership in the plan consisted of the following at June 30, 2018, the date of the latestactuarial valuation:

Active plan members 827Inactive employees or beneficiaries

currently receiving benefit payments 396Inactive employees entitled to but not yet

receiving benefit payments 236

Total 1,459

C. Contribution

The obligation of the City to contribute to the plan is established and may be amended bythe City Council. For the fiscal year ended June 30, 2019, the City contributed the amountof $4,030,000 equal to the employees' benefit payments. Employees are not required tocontribute to the plan.

78

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(11) POST EMPLOYMENT HEALTH CARE BENEFITS , CONTINUED

D. Total OPEB Liability

The City's Total Liability as of June 30, 2018 was determined by an actuarial valuation asof June 30, 2017.

I. Actuarial assumptions

The total OPEB liability in the June 30, 2018 actuarial valuation was determinedusing the following actuarial assumptions, applied to all periods included in themeasurement, unless otherwise specified:

Discount Rate (Bond Buyer 20-Bond Index)-06/30/2018 3.87%Discount Rate (Bond Buyer 20-Bond Index)-06/30/2017 3.58%Source of Municipal Bond Rate Bond Buyer 20-Bond 20-Year GOGeneral Inflation 2.75%Aggregate payroll Increases 3.00%Healthcare Administrative Expenses 0.33% of PremiumPayroll Growth Assumption 2.75%Mortality (1)Mortality Improvement Scale Mortality is projected from 2009 on a generational

basis using the MP-2017 scale.Healthcare Trend Non-Medicare Plans: The annual cost of healthcare

is expected to decrease from 7.5% in 2019 to 4%from 2076 and later. Medicare Plans: The annual cost of healthcare isexpected to decrease from 6.5% in 2019 to 4% from2076 and later.

(1) The probabilities of mortality are based on the 2014 CalPERS Experience Study for theperiod from 1997 to 2011. Pre-retirement and Post-retirement mortality rates include 20years of projected mortality improvement using Scall BB published by the Society ofActuaries. The underlying mortality assumptions and all other actuarial assumptions usedin June 30, 2015 were based on the results of an actuarial experience study for the period1997 to 2011, including updates to salary increase, mortality and retirement rates. Furtherdetails for the Experience Study can be found on the CalPERS website under Forms andPublications.

The actuarial assumptions used in the June 30, 2017 valuation were based on the results ofan actuarial experience study for the period July 1, 2016 through June 30, 2017 and theonly actuarial assumptions that changed were the discount and municipal bond rates thatchanged from 3.58% to 3.87% since the prior measurement date.

II. Discount Rate

The discount rate used to measure the total OPEB liability was 3.87 percent as ofJune 30, 2018. Because the City has no assets held in a qualifying trust for futureOPEB benefits, the 20-year municipal bond rate as of the measurement date is usedas the discount rate to determine the total OPEB liability. There were no changes

between the measurement date of the total OPEB liability and the reporting datethat are expected to have a significant effect on the total OPEB liability. Thediscount rate was based on the Bond Buyer 20-Bond 20-Year GO index. Theprojection of cash flows used to determine the discount rate assumed that Citycontributions will be made at rates equal to the actuarially determined contributionrates.

E. Change in the Total OPEB Liability

Increase(Decrease)

Total OPEBLiability

(Amounts in '000s)

Balance at June 30, 2017 $ 109,926Changes Recognized for the Measurement Period

Service Cost 3,994Interest on the total OPEB liability 4,010Changes of asumptions (4,238)Contributions from the employer (3,795)

Net Changes $ (29)

Balance at June 30, 2018 $ 109,897

I. Sensitivity of total OPEB liability to changes in the discount rate

The following presents total OPEB liability of the City, as well as what the City'stotal OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.58 percent municipal bond rate) or 1-percentage-pointhigher (4.58 percent municipal bond rate) than the current discount rate:

1% Decrease(2.87%)

Discount Rate(3.87%)

1% Increase(4.87%)

Total OPEB liability (amounts in '000s) $ 125,668 $ 109,897 $ 97,032

II. Sensitivity of total OPEB liability to changes in the health care cost trendrates

The following presents total OPEB liability of the City, as well as what the City'stotal OPEB liability would be if it were calculated using healthcare cost trend ratesthat are 1-percentage-point lower (6.5 percent decreasing to 3.0 percent ) or 1-percentage-point higher (8.5 percent decreasing to 5.0 percent) than the currenthealthcare cost trend rates:

1% Decrease Current Trend 1% Increase

Total OPEB liability (amounts in '000s) $ 94,747 $ 109,897 $ 128,802

79

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(11) POST EMPLOYMENT HEALTH CARE BENEFITS , CONTINUED

F. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows ofResources Related to OPEB

For the fiscal year ended June 30, 2019, the City recognized OPEB expense of $5,848,822.At June 30, 2019, the City reported deferred outflows of resources and deferred inflows ofresources related to OPEB from the following sources:

Deferred Outflowsof Resources

(Amounts are in'000s)

Deferred Inflowsof Resources

(Amounts are in'000s)

Benefits paid subsequent to measurement date $ 4,030 $ -Changes of assumptions - (12,077)

Total $ 4,030 $ (12,077)

Changes in assumptions are amortized over a 7.3 years period, which was determined as ofJune 30, 2018, the beginning of the measurement period, for employees covered by theOPEB plan benefit terms as of the valuation date.

$4,030,000 reported as deferred outflows of resources related to benefits paid subsequent tothe measurement date will be recognized as a reduction of the total liability in the yearended June 30, 2020. Other amounts reported as deferred inflows of resources related toOPEB will be recognized as future offset to OPEB expense as follows:

Year ended:

DeferredOutflows/(Inflows)

of resources (Amountsin '000s)

2020 $ (2,170)2021 (2,170)2022 (2,170)2023 (2,170)2024 (2,170)

Thereafter (1,227)

Total $ (12,077)

G. Defined Contribution Plan

In addition to the defined benefit plan described in section A above, on January 1, 2010, theCity has implemented a defined contribution plan which provides postemployment healthcare benefits in accordance with employees’ respective compensation plans.

The provisions of the defined contribution plans are negotiated with formally recognizedbargaining units and groups not formally recognized and are adopted by City Councilaction. Contribution provisions are stated in the bargaining unit Memorandums ofUnderstanding (MOUs) or compensation plan and may be amended during negotiations,subject to City Council approval.

There is no contribution rate for plan members. Employees hired by the City into the uniton or after January 1, 2010 who retire from the City will receive the PERS statutoryminimum paid by the City. In addition, for employees hired into the unit as new employeesof the City on or after January 1, 2010, in lieu of additional retiree medical insurancebenefits, the City shall, while the employees are working for the City, contribute to aretirement account on behalf of such employees the sum of the following amounts asstipulated in the compensation plans:

Technical service employees: $150 per month

Police officers (on or after 07/01/12): $275 per month

Firefighter (on or after 07/01/12): $275 per month

Safety support association employees: $250 per month

Executive employees: $1,375 per month

Management and professional employees: $300 per month

Confidential employees: $150 per month

Supervisors: $150 per month

For employees hired after January 1, 2010, the City has contributed a total of $635,009 asof the fiscal year ended June 30, 2019.

(12) COMMITMENTS AND CONTINGENCIES

A. Litigation and Claims

The City is a defendant in various lawsuits. Although the outcome of these lawsuits is notpresently determinable, in the opinion of the City’s counsel, the results of these lawsuitswill not have a material adverse effect on the financial condition of the City. The City hasestimated for loss reserves relating to litigation in claims liability documented in Note 1 &8D.

B. Grants

Amounts received or receivable from granting agencies are subject to audit and adjustmentby grantor agencies. The grantor agencies may subject grant programs to compliance tests,which may result in disallowed costs. In the opinion of management, future disallowancesof current or prior grant expenditures, if any, would not have a material adverse effect onthe financial position of the City.

C. Construction Commitments

The City has a number of construction programs currently underway. The more significantof these programs and the commitment under related construction contracts at June 30,2019 is as follows (note that this does not represent the expected total remaining cost of

80

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(12) COMMITMENTS AND CONTINGENCIES , CONTINUED

C. Construction Commitments , CONTINUED

these programs):

Capital Project

Construction inProgress through

June 30, 2019 Future Budgeted

Fiber to the premises $ 3,130,178 $ 21,494,227Major buidling systems maint & repl 963,014 20,990,344Oil well plugging 14,315,975 5,501,269Land acquisition 3,247,792 15,554,425Sewer system repairs 200,964 18,184,758Street and sidewalk improvements 1,288,004 10,530,658Santa monica blvd corridor 3,247,440 8,257,694La brea basin well development wep 515,553 10,080,590Police facility upgrades 236,503 8,502,681Park facilities renovation projects 370,777 7,733,646Water main and hydrant replacement 538,950 5,907,565Ballona creek ms4 compliance 632,778 5,735,463Southeast enhancements - 5,656,219City hall master project 250,390 5,362,040Parking program upgrades and improv 467,722 4,900,226

$ 29,406,040 $ 154,391,805

D. Future Minimum Operating Lease Revenues/Expenses

The City is lessor under a variety of property operating leases (primarily retail sites inparking structures and buildings in the industrial sector) and lessee in a variety ofequipment operating leases. In addition, the City uses educational and recreationalfacilities, provided by the Beverly Hills Unified School District, in carrying out itsprograms for the benefit of its residents. The City, through a JPA signed with the Districton December 19, 2017, leases the facilities for annual payments ranging from $10,500,000to $11,500,000, per the terms of the agreement. The agreement is effective through fiscalyear 2019-2020.

Operating Leases as Lessor

Future minimum lease payments receivable under property leases at June 30, 2019 are asfollows:

Fiscal Year Ending June 30 Governmental Business-type

2020 $ 5,915,650 $ 13,175,8922021 3,711,972 12,851,9932022 1,987,028 11,929,4842023 798,252 7,449,4382024 300,766 3,630,4122025-2029 1,947,307 15,932,6812030-2034 1,616,304 3,721,9392035-2039 283,020 1,126,0392040-2044 64,179 5002045-2049 - 5002050-2054 - 1,900

$ 16,624,478 $ 69,820,778

As of June 30, 2019, leased assets had historic costs of approximately $78,771,000 andaccumulated depreciation of approximately $21,583,000.

Operating Leases as Lessee

For the City’s use and the District’s provision of the facilities and programs, the City agreesto pay $10,500,000 in four payments made at the beginning of each quarter throughout thefiscal year. Additionally, the City shall make payment to the District for the sole andexclusive purpose of funding crossing guard services at each of the four elementaryschools.

In reflecting the City’s commitment to energy conservation, during fiscal year 2010-2011,the City entered into an agreement with Sun Light and Power Company to design andinstall a photovoltaic energy system onto three City buildings. The City has engaged SunLight and Power with these services under a solar equipment lease with City National Bankrequiring monthly interest-only payments at an interest rate at Prime of 3.25%. As of June30, 2011 the equipment was valued at $1,670,291. The equipment acquisition andinstallation was completed during fiscal year 2011-2012 and as of June 30, 2012 theequipment was valued at $2,282,876. During fiscal year 2011-2012, the short-termfinancing provided by City National Bank did convert into a long-term note on December31, 2011 with the following terms:

Lease commencement: January 1, 2012

81

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(12) COMMITMENTS AND CONTINGENCIES , CONTINUED

D. Future Minimum Operating Lease Revenues/Expenses , CONTINUED

Operating Leases as Lessee , CONTINUED

Lease term: 96 months

Monthly rent: 48 months at $12,739.50 followed by 48 months at $15,570.50

Interest rate: Prime of 3.25%

Purchase option at 60 months or 96 months for a purchase price equal to the Termination

Value, or on the last day of the lease term for the greater of 40% of the original Total

Cost of the Equipment or the Equipment’s then fair market value.

As of June 30, 2011, the City recognized a liability for the equipment as a capital lease;however, during fiscal year 2011-2012, when the conversion into a long term noteoccurred, this lease no longer satisfied the capital lease criteria and is now being accountedfor as an operating lease.

Future minimum lease payments payable for equipment and property leases at June 30,2019 are as follows:

Fiscal Year Ending June 30 Governmental

2020 $ 428,344

E. Encumbrances

Encumbrances are commitments related to unperformed (executory) contracts for goods orservices. Encumbrance accounting is utilized to the extent necessary to assure effectivebudgetary control and accountability and to facilitate effective cash planning and control.Encumbrances outstanding at year-end represent the estimated amount of the expendituresultimately to result if unperformed contracts in process at year end are completed.Encumbrances outstanding at year end do not constitute expenditures or liabilities.

2019Encumbrances

by FundGovernmental FundsGeneral Fund $ 8,464,888Infrastructure Capital Projects Fund 8,275,536Special Revenue Funds 1,161,405

Total Governmental Funds 17,901,829Internal Service FundsInternal Service Funds 12,519,373Capital Assets 4,262,544Vehicles 797,192Reprographics 67,617Cable Television 42,090Liability Insurance 283,918Workers' Compensation 7,273Policy, Administration, & Legal 1,088,102

Total Internal Service Funds 19,068,109Enterprise FundsWater 6,114,224Parking Facilities 1,679,820Solid Waste 199,484Wastewater 1,012,250Stormwater 576,434

Total Enterprise Funds 9,582,212

Total Encumbrances $ 46,552,150

(13) SEPARATION OF THE PARKING AUTHORITY OF THE CITY OF BEVERLYHILLS

A. Background

On September 30, 2011, certain City parking assets were transferred from the City to TheParking Authority, pursuant to a Purchase and Sale Agreement dated August 16, 2011.This transfer of assets was done to allow the City to consolidate its parking operationsunder the control and oversight of The Parking Authority. The City retained control of twofacilities, 9333 West Third Street and 450 N. Rexford Drive, which provide visitor andemployee parking for the office building at 331 Foothill Road, the City Public Works

82

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(13) SEPARATION OF THE PARKING AUTHORITY OF THE CITY OF BEVERLYHILLS , CONTINUED

facility, City Hall, and the Civic Center complex.

On December 19, 2011, the City Council and The Parking Authority entered into a propertymanagement agreement for the management of The Parking Authority’s facilities. On July1 of each year the agreement shall automatically renew for a period of one year unlesseither party gives written notice to the other on or before June 1 of any year that it haselected not to renew the agreement.

B. Net Investment in Capital Assets for Parking Funds

I. City Parking Facilities Enterprise Fund

Transfer of Assets to Parking Authority

As noted in Section A above, the City’s Parking Facilities Enterprise Fundtransferred the majority of its assets, including its parking facilities, to The ParkingAuthority. Although capital assets were transferred to The Parking Authority, therelated debt which was issued to construct those assets was not transferred. Therelated debt used to construct those assets continues to be collateralized by the City,and the issuance of said debt continues to be tied to City’s credit worthiness forrepayment. Therefore, they are the obligations of the City and have not beentransferred to The Parking Authority. This set of circumstances was also used ascriteria in the qualification of The Parking Authority to be recognized as a blendedcomponent unit of the City. Please see Note 1 on pages 46 - 47 for more details.

Impact

The impact of this transfer of assets from the City’s Parking Enterprise Fund to TheParking Authority has resulted in the assets of the Parking Enterprise fund to be lessthan its liabilities, thus a net position deficit has been reported. The net positiondeficit of the Parking Enterprise fund at June 30, is $(9,934,168).

The line item Net Investment in Capital Assets within the Net Position section ofthe Statement of Net Position has also resulted in a negative amount. As noted inSection A of this footnote, the only parking facilities which remained with the Citywere 9333 West Third Street and 450 N. Rexford Drive. The negative numberwithin this line item results from the historical value of these facilities, net ofaccumulated depreciation, having a value which is less than the debt related to thesefacilities and the facilities transferred to The Parking Authority. The value of NetInvestment in Capital Assets for the Parking Enterprise fund as of June 30, 2019 isnegative $15,216,054.

II. City Parking Authority Enterprise Fund

Background

As stated in Note 1, Summary of Significant Accounting Policies on page 46, “Inthe government-wide financial statements and proprietary fund financial statements,net position is displayed in three components: net investment in capital assets,restricted net position and unrestricted net position.”

The Governmental Accounting Standards Board Statement Number 34 (GASB 34)paragraph 33 defines the line item of “Net Investment in Capital Assets” as, “Thiscomponent of net position consists of capital assets including restricted capitalassets, net of accumulated depreciation and reduced by the outstanding balances ofany bonds, mortgages, notes, or other borrowings that are attributable to theacquisition, construction, or improvement of those assets.”

The Parking Authority Advances from Other Funds

Prior to The Parking Authority separation, the City’s Parking Enterprise fund (ofthe Business-type activities) had entered into long-term borrowing arrangementswith the General Fund, the Parks and Recreation Facilities Special Revenue Fund,as well as the Capital

Assets Internal Service Fund in order to finance construction of the parking lots at“Beverly Canon” (438 N Beverly Dr./439 N Canon Dr.), and at the “Public GardensParking Facility” (242 N Beverly Dr./241 N Canon Dr.). Between these differentfunds, these types of borrowings are referred to as “Advances to/from other funds”.

Management’s decision for the Parking Enterprise Fund to finance construction ofthese parking lots via advances from other funds was based on the benefit that thosefunds would receive by investing their idle cash into the City’s parking structureswhich included retail space. The terms of the advances are stated on page 63 inNote 5. The terms of the borrowings are comparable to terms the City is restrictedto when seeking external sources of financing. However, as a result of The ParkingAuthority’s separation from the City’s Parking Enterprise fund, these liabilitieswere transferred to The Parking Authority. From a legal standpoint, The ParkingAuthority is a legally separate entity from the City. However, the GovernmentalAccounting Standards Board (GASB)’s criteria for the qualification of a blendedcomponent unit, treats The Parking Authority as a component of the City, andtherefore requires The Parking Authority to be treated as another fund of the City.This treatment results in the classification of these borrowings to remain as

83

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(13) SEPARATION OF THE PARKING AUTHORITY OF THE CITY OF BEVERLYHILLS , CONTINUED

B. Net Investment in Capital Assets for Parking Funds , CONTINUED

Advances from Other Funds. Although they are currently the liability of anotherlegal entity (The Parking Authority), since that entity is a blended component unit,the classification of these borrowings may not be reclassified as Notes Payable. Forfurther information about blended component units, please see Note 1 on pages 43-44.

These various borrowing arrangements, as well as their respective repaymentschedules were approved by the City Council via budget resolutions restrictingportions of the Parking Enterprise’s fund balance solely for repayment of theseadvances. A listing of the balances of these advances (which have been transferredto The Parking Authority) at June 30, 2019 is shown in Note 5 on page 63. Theseadvances to the Parking Enterprise fund are what financed the construction of theaforementioned parking lots, and since The Parking Authority is now obligated toand has arranged to repay these borrowings, these advances constitute debt withinthis fund. In total, as of June 30, 2019, The Parking Authority has $32,084,158outstanding in Advances from other funds.

(14) FUND BALANCE

The City presents the following components of fund balance: a) the nonspendable fundbalance, b) restricted fund balance, c) committed fund balance, d) assigned fund balance and e)unassigned fund balance.

a) Nonspendable fund balance (inherently nonspendable) include the:

Portion of net resources that cannot be spent because of their form, and

Portion of net resources that cannot be spent because they must be maintained intact.

b) Restricted fund balance (externally enforceable limitations on use) include amountssubject to:

Limitations imposed by creditors, grantors, contributors, or laws and regulations of other

government

Limitations imposed by law through constitutional provision or enabling legislation.

c) Committed fund balance (self-imposed limitation set in place prior to the end of theperiod):

Limitation imposed by the City Council as the highest level of decision making through

adoption of an ordinance. These commitments may be changed or lifted, but only by the

same formal action that was used to impose the constraint originally.

Resources accumulated pursuant to stabilization arrangements would fit in this category only

if the arrangement is specific regarding the circumstances when spending would be

permitted, and those circumstances would need to be of a non-routine nature.

d) Assigned fund balance (limitation resulting from intended use) consists of amountswhere the:

Intended use is established by the body designated for that purpose (City Council).

Intended use is established by official designated for that purpose. For the City, the City

Manager is the designated official.

e) Unassigned fund balance (residual net resources) is the:

Total fund balance in the general fund in excess of nonspendable, restricted, committed, and

assigned fund balance

Excess of nonspendable, restricted, and committed fund balance over total fund balance.

If there is an expenditure incurred for purposes for which both restricted and unrestricted fundbalance is available, the City will consider restricted fund balance to have been spent beforeunrestricted fund balance. Further, if there is an expenditure incurred for purposes for whichcommitted, assigned, or unassigned fund balance classifications could be used, then the Citywill consider committed fund balance to be spent before assigned fund balance, and considerassigned fund balance to be spent before unassigned fund balance.

84

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(14) FUND BALANCE , CONTINUED

General Fund

InfrastructureCapitalProjects

Fund

OtherGovernmental

Funds Total

Fund Balances:Nonspendable:

Long-term receivables (NotesReceivable) $ 2,464,064 $ - $ - $ 2,464,064

Advances to other funds 7,014,828 - 4,597,708 11,612,536Permanent fund principal - - 81,381 81,381

Total nonspendable: 9,478,892 - 4,679,089 14,157,981Restricted for:

Debt covenants - - 2,547,921 2,547,921Streets and highways - - 1,362,793 1,362,793Seized and forfeited property - - 4,774,248 4,774,248Transit - - 6,749,960 6,749,960Community Charitable Foundation - - 356,340 356,340Recreation and parks - - 16,585,570 16,585,570Other purposes - - 4,303,333 4,303,333

Total restricted for: - - 36,680,165 36,680,165Committed to:

Economic/Contingency Reserve 104,963,395 - - 104,963,395Budget Stabilization 13,000,000 - - 13,000,000Burton Green - - 19,243 19,243Property Acquisition and Metro 6,272,000 - - 6,272,000Water Fund 10,000,000 - - 10,000,000Retiree Medical 10,000,000 - - 10,000,000Recreation and Parks - - 11,970,881 11,970,881Fine Art - - 2,427,097 2,427,097Pension 23,000,000 - - 23,000,000Capital Projects - 25,683,497 - 25,683,497Community Development Technology - - 4,513,371 4,513,371

Total committed to: 167,235,395 25,683,497 18,930,592 211,849,484Assigned to:

Encumbrances 8,404,222 8,273,539 1,161,405 17,839,166Unassigned (deficit): 36,543,325 - - 36,543,325

Total fund balances $ 221,661,834 $ 33,957,036 $ 61,451,251 $ 317,070,121

(15) DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES

Pursuant to GASB Statement No.63, “Financial Reporting of Deferred Outflows of Resources,Deferred Inflows of Resources, and Net Position,” and GASB Statement No.65, “ItemsPreviously Reported as Assets and Liabilities,” the City recognized deferred outflows ofresources in the government-wide and proprietary fund statements. These items are aconsumption of net position by the County that is applicable to a future reporting period.Previous financial reporting standards do not include guidance for reporting those financialstatement elements, which are distinct from assets and liabilities. The City has three items that

are reportable on the Government-wide Statement of Net Position: the first item relates tobenefit payments that have met all requirements other than timing, the second item relates tooutflows from changes in the net pension liability, and the third item relates to bond refunding.Deferred outflows of resources that are reported in the proprietary funds are included in theGovernment-wide Statement of Net Position.

Deferred outflows of resources balances for the year ended June 30, 2019 were as follows:

Governmental Deferred OutflowsGovernmental Activities

Deferred outflows of resources - pension contributions $ 24,768,103Deferred outflows of resources - OPEB contributions 3,467,741Deferred outflows of resources - pension actuarial 18,826,516Deferred amount on refunding, net 1,121,020

Total governmental activities 48,183,380

Business-type ActivitiesDeferred outflows of resources - pension contributions 1,892,013Deferred outflows of resources - OPEB contributions 562,259Deferred outflows of resources - pension actuarial 1,279,829Deferred amount on refunding, net 1,090,427

Total business-type activities 4,824,528

Total governmental deferred outflows $ 53,007,908

Pursuant to GASB Statement No. 63, “Financial Reporting of Deferred Outflows of Resources,Deferred Inflows of Resources, and Net Position”, and GASB Statement No. 65, “ItemsPreviously Reported as Assets and Liabilities,” the City recognized deferred inflows ofresources in the governmentwide, governmental fund, and proprietary fund statements. Theseitems are an acquisition of net pension by the City that is applicable to a future reportingperiod. Previous financial reporting standards do not include guidance for reporting thosefinancial statement elements, which are distinct from assets and liabilities. The City has threeitems that are reportable on the Government-wide Statement of Net Position: inflows fromchanges in the net pension liability, inflows from changes in the total OPEB liability and sale-leaseback transactions. Deferred inflows of resources that are reported in the proprietary fundsare included in the Government-wide Statement of Net Position.

Under the modified accrual basis of accounting, it is not enough that revenue is earned; it mustalso be available to finance expenditures of the current period. Governmental funds willtherefore include additional deferred inflows of resources for amounts that have been earnedbut are not available to finance expenditures in the current period. Deferred inflows related tounavailable revenues totaled $13,457,334 at June 30, 2019.

Deferred inflows of resources balances for the year ended June 30, 2019 were as follows:

85

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(15) DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES , CONTINUED

Governmental Deferred InflowsGovernmental Activities

Deferred inflows of resources - pension actuarial $ 7,842,537Deferred inflows of resources - OPEB actuarial 10,721,667

Total governmental activities 18,564,204

Business-type ActivitiesDeferred inflows of resources - pension actuarial 555,505Deferred inflows of resources - OPEB actuarial 1,355,531Deferred credit from sale-leaseback transactions 755,979

Total business-type activities 2,667,015

Total governmental deferred inflows $ 21,231,219

(16) PENSION PLANS

A. General Information about the Pension Plans

Plan Descriptions – All qualified permanent and probationary employees are eligible toparticipate in the City of Beverly Hills separate Safety (police and fire) and Miscellaneous(all other) Plans, agent multiple-employer defined benefit pension plans administered bythe California Public Employees’ Retirement System (CalPERS), which acts as a commoninvestment and administrative agent for its participating member employers. Benefitprovisions under the Plans are established by the State statute and City of Beverly Hillsresolution. CalPERS issues publicly available reports that include a full description of thepension plans regarding benefit provisions, assumptions and membership information thatcan be found on the CalPERS website.

Benefits Provided - CalPERS provides service retirement and disability benefits, annualcost of living adjustments and death benefits to plan members, who must be publicemployees and beneficiaries. Benefits are based on years of credited service, equal to oneyear of full time employment. Members with five years of total service are eligible to retireat age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the1.5% at 65 formula, eligibility for service retirement is age 55 with at least 5 years ofservices. PEPRA miscellaneous members become eligible for service retirement uponattainment of age 52 with at least 5 years of service. All members are eligible for non-dutydisability benefits after 5 years of service. The death benefit is one of the following: theBasic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W DeathBenefit. Safety members can receive a special death benefit if the member dies whileactively employed and has at least 20 years of total CalPERS service. The cost of livingadjustments for each plan are applied as specified by the Public Employees’ RetirementLaw.

The Plan’s provisions and benefits in effect at June 30, 2019, are summarized as follows:

Miscellaneous

Hire DatePrior to January

1, 2013On or after

January 1, 2013

Benefit formula 2.5% @ 55 2% @ 62

Benefit vesting schedule 5 years service 5 years service

Benefit payments monthly for life monthly for life

Retirement age 50 - 55 52 - 67

Monthly benefits, as a % of eligible compensation 2.0% to 2.5% 1.0% to 2.5%

Required employee contribution rates 8% 6.25%

Required employer contribution rates 18.783% 18.783%

Safety

Hire DatePrior to January

1, 2013On or after

January 1, 2013

Benefit formula 3% @ 50 2.7% @ 57

Benefit vesting schedule 5 years service 5 years service

Benefit payments monthly for life monthly for life

Retirement age 50 50 - 57

Monthly benefits, as a % of eligible compensation 3.00% 2.0% to 2.7%

Required employee contribution rates 9% 12%

Required employer contribution rates 41.338% 41.338%

Employees Covered – as of June 30, 2018, the following employees were covered by thebenefit terms for each Plan:

Miscellaneous Safety

Inactive employees or beneficiaries currently receiving benefits 578 335Inactive employees entitled to but not yet receiving benefits 543 36Active employees 660 202

Total 1,781 573

Contributions – Section 20814(c) of the California Public Employees’ Retirement Lawrequires that the employer contribution rates for all public employers be determined on anannual basis by the actuary and shall be effective on the July 1 following notice of a changein the rate. Funding contributions for both Plans are determined annually on an accrualbasis as of June 30 by CalPERS and were $ 26,660,115 for fiscal year 2019. The actuariallydetermined rate is the estimated amount necessary to finance the costs of benefits earned byemployees during the year, with an additional amount to finance any unfunded accruedliability. The City of Beverly Hills is required to contribute the difference between theactuarially determined rate and the contribution rate of employees.

86

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(16) PENSION PLANS , CONTINUED

B. Net Pension Liability

The City of Beverly Hills net pension liability for each Plan is measured as the totalpension liability, less the pension plan’s fiduciary net position. The net pension liability ofeach of the Plans is measured as of June 30, 2018, using an annual actuarial valuation as ofJune 30, 2017 rolled forward to June 30, 2018 using standard update procedures. Asummary of principal assumptions and methods used to determine the net pension liabilityis shown below.

Actuarial Assumptions – The total pension liabilities in the June 30, 2017 actuarialvaluations were determined using the following actuarial assumptions, with a change indiscount rate since the last measurement date from 7.65% to 7.15%:

Miscellaneous Safety

Valuation Date June 30, 2017 June 30, 2017Measurement Date June 30, 2018 June 30, 2018Actuarial Cost Method Entry-Age Normal Entry-Age NormalActuarial Assumptions

Discount Rate %7.15 %7.15Inflation %2.75 %2.75Payroll Growth %3.00 %3.00Projected Salary Increase 3.00%-14.20% (1) 3.00%-14.20% (1)Investment Rate of Return 7.50% (2) 7.50% (2)Mortality (3) (3)

(1) Depending on age, service and type of employment

(2) Net of Pension Plan Investment and Administrative Expenses: includes inflation

(3) The probabilities of mortality are based on the 2014 CalPERS Experience Study for theperiod from 1997 to 2011. Pre-retirement and Post-retirement mortality rates include 20years of projected mortality improvement using Scall BB published by the Society ofActuaries.

The underlying mortality assumptions and all other actuarial assumptions used in June 30,2015 were based on the results of an actuarial experience study for the period 1997 to 2011,including updates to salary increase, mortality and retirement rates. Further details for theExperience Study can be found on the CalPERS website under Forms and Publications.

Change of Assumptions – GASB 68, paragraph 68 states that the long-term expected rateof return should be determined net of pension plan investment expense but withoutreduction for pension plan administrative expense. Changes in assumptions are beingamortized through 2019.

Discount Rate – The discount rate used to measure the total pension liability was 7.15%for each Plan. To determine whether the municipal bond rate should be used in the

calculation of a discount rate for each plan, CalPERS stress tested plans that would mostlikely result in a discount rate that would be different from the actuarially assumed discountrate. Based on the testing, none of the tested plans run out of assets. Therefore, the current7.15% discount rate is adequate and the use of the municipal bond rate calculation is notnecessary. The long term expected discount rate of 7.15% will be applied to all plans in thePublic Employees Retirement Fund (PERF). The stress test results are presented in adetailed report that can be obtained from CalPERS website.

The long-term expected rate of return on pension plan investments was determined using abuilding–block method in which best-estimate ranges of expected future rates of return(expected returns, net of pension plan investment expense and inflation) are developed foreach major asset class.

In determining the long-term expected rate of return, CalPERS took into account bothshort-term and long term market return expectations as well as the expected pension fundcash flows. Using historical returns of all the funds’ asset classes, expected compound(geometric) returns were calculated over the short-term (first 10 years) and the long-term(11-60 years) using a building–block approach. Using the expected nominal returns forboth short-term and long-term, the present value of benefits was calculated for each fund.The expected rate of return was set by calculating the single equivalent expected return thatarrived at the same present value of benefits for cash flows as the one calculated using bothshort-term and long-term returns. The expected rate of return was then set equivalent ratecalculated above and rounded down to the nearest one quarter of one percent.

The table below reflects long–term expected real rate of return by asset class. The rate ofreturn was calculated using the capital market assumptions applied to determine thediscount rate and asset allocation. The target allocation shown was adopted by theCalPERS Board effective on July 1, 2015.

Asset Class New Strategic

AllocationMarket Value

($ Billion)

Public Equity %50.0 156.20Private Equity %8.0 25.90Global Fixed Income %28.0 62.90Liquidity %1.0 15.50Real Assets %13.0 36.30Inflation Sensitive Assets %- 25.30Other %- 1.60

Total %100.0 323.70

(1) An expected inflation of 2.75% used for this period.

(2) An expected inflation of 3.0% used for this period.

87

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(16) PENSION PLANS , CONTINUED

C. Changes in the Net Pension Liability

The changes in the Net Pension Liability for each Plan during the measurement periodfollow:

Miscellaneous Plan: Increase (Decrease)

Total PensionLiability

Plan Fiduciary NetPosition

Net PensionLiability/(Asset)

Balance at June 30, 20171 $ 379,321,907 $ 276,480,435 $ 102,841,472

Changes in the year:Service cost 8,253,613 - 8,253,613Interest on the total pension liability 26,581,086 - 26,581,086Differences between actual and expected

experience (405,486) - (405,486)Changes in assumptions (2,940,351) - (2,940,351)Plan to Plan Resource Movement - 200,754 (200,754)Contribution - employer - 9,677,711 (9,677,711)Contribution - employee2 - 3,842,310 (3,842,310)Net investment income2 - 23,555,720 (23,555,720)Benefit payments, including refunds of employee

contributions (16,678,876) (16,678,876) -Administrative Expenses - (1,248,992) 1,248,992

Net Change $ 14,809,986 $ 19,348,627 $ (4,538,641)Balances at June 30, 2018 $ 394,131,893 $ 295,829,062 $ 98,302,831

(1) The fiduciary net position includes receivables for employee service buybacks,deficiency reserves, fiduciary self-insurance and OPEB expense.

(2) Net of administrative expenses.

Safety Plan: Increase (Decrease)

Total PensionLiability

Plan Fiduciary NetPosition

Net PensionLiability/(Asset)

Balance at June 30, 20171 $ 479,286,267 $ 315,857,283 $ 163,428,984

Changes in the year:Service cost 8,767,560 - 8,767,560Interest on the total pension liability 33,214,473 - 33,214,473Differences between actual and expected

experience (4,073,426) - (4,073,426)Changes in assumptions (2,531,137) - (2,531,137)Plan to Plan Resource Movement - (202,216) 202,216Contribution - employer - 13,692,868 (13,692,868)Contribution - employee - 2,947,071 (2,947,071)Net investment income2 - 26,812,713 (26,812,713)Benefit payments, including refunds of employee

contributions (25,054,785) (25,054,785) -Administrative Expenses - (1,426,875) 1,426,875

Net Change $ 10,322,685 $ 16,768,776 $ (6,446,091)Balance at June 30, 2018 $ 489,608,952 $ 332,626,059 $ 156,982,893

(1) The fiduciary net position includes receivables for employee service buy backs,

deficiency reserves, fiduciary self-insurance and OPEB expense.

(2) Net of administrative expenses.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate – Thefollowing presents the net pension liability of the City of Beverly Hills for each plan,calculated using the discount rate for each Plan, as well as what the City of Beverly Hills’snet pension liability would be if it were calculated using a discount rate that is 1-percentagepoint lower or 1-percentage point higher that the current rate:

Miscellaneous Safety

1% Decrease %6.15 %6.15Net Pension Liability $ 150,354,118 $ 221,314,143

Current Discount Rate %7.15 %7.15Net Pension Liability $ 98,302,831 $ 156,982,889

1% Increase %8.15 %8.15Net Pension Liability $ 55,159,669 $ 103,964,508

Pension Plan Fiduciary Net Position – Detailed information about each pension plan’sfiduciary net position is available in the separately issued CalPERS financial reports.

D. Pension Expenses and Deferred Outflows/Inflows of Resources Related toPensions

For the measurement period ended June 30, 2018 (the measurement date), the City ofBeverly Hills incurred a pension expense of $32,487,282. At June 30, 2020, the City ofBeverly Hills reported deferred outflows of resources and deferred inflows of resourcesrelated to pensions from following sources:

Deferred Outflowsof Resources

Deferred Inflows ofResources

Safety Pension contributions made subsequent to measurement date $ 15,407,759 $ -Misc. Pension contributions made subsequent to measurement date 11,252,362 -Safety Differences between expected and actual experience - (5,095,699)Misc. Differences between expected and actual experience - (3,302,343)Safety Changes in assumptions 11,691,466 -Misc. Changes in assumptions 7,183,317 -Safety Net differences between projected and actual earnings

on plan investments 806,616 -Misc. Net differences between projected and actual earnings

on plan investments 424,940 -

Total $ 46,766,460 $ (8,398,042)

$26,660,121 reported as deferred outflows of resources related to contributions subsequentto the measurement date will be recognized as a reduction of the net pension liability in theyear ended June 30, 2020 . Other amounts reported as deferred outflows of resources anddeferred inflows of resources related to pensions will be recognized in the future as pension

88

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements

For the Year Ended June 30, 2019

(16) PENSION PLANS , CONTINUED

D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to

expense as follows:

Measurement PeriodEnded June 30

Safety DeferredOutflows/(Inflows)

of Resources

Misc. DeferredOutflows/(Inflows)

of Resources

Total DeferredOutflows/(Inflows)

of Resources

2019 $ 7,561,663 $ 6,407,706 $ 13,969,369

2020 5,356,026 2,189,051 7,545,077

2021 (4,279,152) (3,493,648) (7,772,800)

2022 (1,236,156) (797,193) (2,033,349)

Total $ 7,402,381 $ 4,305,916 $ 11,708,297

E. Payable to the Pension Plan

The City of Beverly Hills had no outstanding amount of contributions to the pension planrequired for the year ended June 30, 2019.

(17) SUBSEQUENT EVENTS

In preparing these financial statements, the City has evaluated events and transactions forpotential recognition or disclosure through December 9, 2019, the date the financial statementswere available to be issued. Based on the recommendation from the Mayor's Blue RibbonCommittee, the City funded in FY20 the previously established Section 115 trust with fundstotaling $81.7 million, currently committed for pension and OPEB liabilities. The Section 115Trust established by PARS is an irrevocable, agent multi-employer trust with two partitionedsub-accounts designated for pension and OPEB funds.

On August 8, 2019 council adopted the resolution of the City of Beverly Hills PublicFinancing Authority authorizing the issuance of (I) not to exceed $29,000,000 of LeaseRevenue Refunding Bonds, Series 2019A (Tax Exempt) (II) not to exceed $19,000,000 ofLease Revenue Refunding Bonds, Series 2019B (Federally Taxable), and (III) not to exceed$4,500,000 of Lease Revenue Refunding Bonds, Series 2020A (Tax Exempt). Refunding of the2009 and 2010 Series A & C Lease Revenue Bonds and a Note Payable to City National Bankwere estimated to result in net present value savings of approximately $6.6 million.

The City is also currently closing the purchase for the Robinson property for ~$9 millionand upcoming purchase of property on Wilshire boulevard for ~$16.3 million.

89

CITY OF BEVERLY HILLS, CALIFORNIA

Required Supplementary Information

For the Year Ended June 30, 2019

Schedule of Changes in Net Pension Liability and Related RatiosDuring the Measurement Period

Last Ten Fiscal Years1

Measurement Period 2017-2018 2016-2017 2015-2016

Miscellaneousplan Safety plan

Miscellaneousplan Safety plan

Miscellaneousplan Safety plan

Total Pension LiabilityService Cost $ 8,253,613 8,767,560 8,094,014 8,831,790 7,176,194 7,288,031Interest on total pension liability 26,581,086 33,214,473 25,560,359 32,482,819 24,910,952 31,602,399Difference Between Expected and Actual Experience (405,486) (4,073,426) (6,618,894) (1,906,471) - -Changes in Assumptions (2,940,351) (2,531,137) 20,990,210 26,591,331 (453,044) (4,401,158)Benefit Payments, including Refunds of Employee Contributions (16,678,876) (25,054,785) (15,545,990) (23,835,226) (14,580,423) (22,455,302)

Net Change in Total Pension Liability 14,809,986 10,322,685 32,479,699 42,164,243 17,053,679 12,033,970Total Pension Liability - Beginning 379,321,907 479,286,267 346,842,208 437,122,024 329,788,529 425,088,054

Total Pension Liability - Ending (a) $ 394,131,893 489,608,952 379,321,907 479,286,267 346,842,208 437,122,024

Plan Fiduciary Net PositionContributions - Employer $ 9,677,711 13,692,868 9,259,986 12,726,021 8,266,277 11,310,166Contributions - Employee 3,842,310 2,947,071 3,711,192 2,681,657 3,527,978 2,540,031

Net Investment Income2 23,555,720 26,812,713 28,128,937 32,489,381 1,376,505 1,468,054Benefit Payments, including Refunds of Employee Contributions (16,678,876) (25,054,785) (15,545,990) (23,835,226) (14,580,423) (22,455,302)Other Changes in Fiduciary Net Position 200,754 (202,216) - - (429) 429Administrative Expenses (1,248,992) (1,426,875) (371,024) (431,453) (154,106) (182,558)

Net Change in Fiduciary Net Position 19,348,627 16,768,776 25,183,101 23,630,380 (1,564,198) (7,319,180)Plan Fiduciary Net Position - Beginning 276,480,435 315,857,283 251,297,334 292,226,903 252,861,532 299,546,083

Plan Fiduciary Net Position - Ending (b) $ 295,829,062 332,626,059 276,480,435 315,857,283 251,297,334 292,226,903

Plan Net Pension Liability/(Asset) - Ending (a) - (b) 98,302,831 156,982,893 102,841,472 163,428,984 95,544,874 144,895,121Plan Fiduciary Net Position as a Percentage of the Total Pension Liability %75.06 %67.94 %72.89 %65.90 %72.45 %66.85Covered Payroll $ 48,140,060 28,994,212 46,924,543 28,799,941 46,033,701 26,536,671Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll %204.20 %541.43 %219.16 %567.46 %207.55 %546.02

90

CITY OF BEVERLY HILLS, CALIFORNIA

Required Supplementary Information

For the Year Ended June 30, 2019

Schedule of Changes in Net Position Pension Liability and Related RatiosDuring the Measurement Period

Last Ten Fiscal Years1

Measurement Period 2014-2015 2013-2014

Miscellaneousplan Safety plan

Miscellaneousplan Safety plan

Total Pension LiabilityService Cost 6,757,911 7,290,874 6,921,261 7,430,846Interest on total pension liability 23,685,713 30,721,727 22,565,116 29,563,684Difference Between Expected and Actual Experience (1,497,153) (857,613) - -Changes in Assumptions (5,704,605) (7,389,629) - -Benefit Payments, including Refunds of Employee Contributions (13,786,594) (21,740,627) (13,121,431) (20,796,479)

Net Change in Total Pension Liability 9,455,272 8,024,732 16,364,946 16,198,051Total Pension Liability - Beginning 320,333,257 417,063,322 303,968,311 400,865,271

Total Pension Liability - Ending (a) 329,788,529 425,088,054 320,333,257 417,063,322

Plan Fiduciary Net PositionContributions - Employer 7,494,305 9,595,576 9,059,681 8,602,358Contributions - Employee 3,509,659 2,624,511 3,396,516 2,382,927

Net Investment Income2 5,535,510 6,646,182 37,166,722 45,809,354Benefit Payments, including Refunds of Employee Contributions (13,786,594) (21,740,627) (13,121,431) (20,796,479)Other Changes in Fiduciary Net Position (286,114) (335,859) - -Administrative Expenses - - - -

Net Change in Fiduciary Net Position 2,466,766 (3,210,217) 36,501,488 35,998,160Plan Fiduciary Net Position - Beginning 250,394,766 302,756,300 213,893,278 266,758,140

Plan Fiduciary Net Position - Ending (b) 252,861,532 299,546,083 250,394,766 302,756,300

Plan Net Pension Liability/(Asset) - Ending (a) - (b) 76,926,997 125,541,971 69,938,491 114,307,022Plan Fiduciary Net Position as a Percentage of the Total Pension Liability %76.67 %70.47 %78.17 %72.59Covered Payroll 42,134,246 26,157,479 41,254,461 25,556,628Plan Net Pension Liability/(Asset) as a Percentage of Covered Payroll %182.58 %479.95 %169.53 %447.27

1. Historical information is required only for measurment periods for which GASB 68 is applicable

2. Net of administrative expenses.

91

CITY OF BEVERLY HILLS, CALIFORNIA

Required Supplementary Information

For the year ended June 30, 2019

Schedule of Contributions - CALPERS Plan

Last Ten Fiscal Years1

2019 2018 2017 2016 2015

Miscellaneousplan Safety plan

Miscellaneousplan Safety plan

Miscellaneousplan Safety plan

Miscellaneousplan Safety plan

Miscellaneousplan Safety plan

Actuarially determined contribution $ 11,252,362 15,407,754 9,681,703 13,690,636 9,259,986 12,726,021 9,273,257 12,712,750 8,250,676 11,309,377Contributions in relation to the actuarially

determined contributions 11,252,362 15,407,754 9,681,703 13,690,636 9,259,986 12,726,021 9,273,257 12,712,750 8,250,676 11,309,377Covered payroll 49,892,479 28,057,292 48,602,290 31,499,518 46,924,543 28,799,741 46,033,701 26,536,671 42,134,246 26,157,479Contributions as a percentage of covered payroll %22.55 %54.92 %19.92 %43.46 %19.73 %44.19 %20.14 %47.91 %19.58 %43.24

Notes to Schedule:Valuation Date 6/30/2018Methods and Assumptions Used to Determine Contribution Rates:

Single and agent employers Entry age

Amortization method Level percentage of payroll

Remaining amortization period 30 year fixed with 5 year ramp up at beginning and 5 year ramp down at the end of theamortization period. Changes in liabiliy for plan amendments, changes in actuarialmethodology and assumptions are amortized over a 20 year period.

Asset valuation method Market value

Inflation 2.75%

Salary increases 3.30% to 14.20% depending on age, service and type of employment

Investment rate of return

In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In2016, there were no changes. In 2015, amounts reported reflect an adjustment of thediscount rate from 7.5 percent (net of administrative expense) to 7.65 percent (withouta reduction for pension plan administrative expense.) In 2014, amounts reported werebased on the 7.5 percent discount rate.

Retirement age 2.5%@55 and 2%@62 for Miscellaneous and 3%@50 and 2.7%@57 for Safety

Mortality Mortality assumptions are based on mortality rates resulting from the most recentCalPERS Experience Study adopted by the CalPERS Board, first used in the June 30,2009 valuation. For purposes of the post-retirement mortality rates, those revised ratesinclude 5 years of projected on-goin mortality improvement using Scale AA publishedby the Society of Actuaries until June 30, 2010. There is no margin for future mortalityimprovement beyond the valuation date.

1. Fiscal year 2015 was the 1st year of implementation, therefore only four years are shown.

92

CITY OF BEVERLY HILLS, CALIFORNIA

Required Supplementary Information

For the year ended June 30, 2019

Schedule of Changes in Total Other Post Employment Benefit Liability and Related Ratios

Last ten fiscal years1

Measurement Period 2017-2018 2016-2017

City of BeverlyHills

City of BeverlyHills

Total OPEB Liability (Amounts in '000s)Service Cost $ 3,994 $ 4,607Interest 4,010 3,419Changes in Assumptions (4,238) (11,597)Benefit Payments, including Refunds of Employee Contributions (3,795) (3,782)

Net Change in Total OPEB Liability (29) (7,353)Total OPEB Liability - Beginning 109,926 117,279

Total OPEB Liability - Ending (a) $ 109,897 $ 109,926

Covered Employee Payroll $ 117,542 $ 114,642Total OPEB Liability as a Percentage of Covered Payroll %93 %96

1. This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10-year trend is compiled, the City will only presentinformation for available years.

2. Net of administrative expenses.

3. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits.

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�

B-1

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Balance Sheet

Other Governmental Funds

June 30, 2019

Special Revenue Funds

Streets andHighways State Gas

TaxCalifornia StateSenate Bill 1473

CommunityDevelopment Block

GrantIn-Lieu Parking

DistrictParks & Recreation

Facilities

MetropolitanTransportation

Authority

AssetsCash and investments $ 2,216,246 1,114,695 - 11,848,948 17,207,709 1,949,948Accounts receivable, net - - - 99,748 4,940 2,214Interest receivable 10,354 - - 68,523 127,732 12,552Interfund receivables - - - - 420,923 -Intergovernmental receivables 112,926 - 98,101 - - -Advances to other funds - - - - 4,597,708 -Restricted assets

Cash and investments - - - - - -Interest receivable - - - - - -

Total assets 2,339,526 1,114,695 98,101 12,017,219 22,359,012 1,964,714

Liabilities, deferred inflows of resources, and fundbalances

LiabilitiesAccounts payable 848,009 - 74,277 - 225,630 18,250Contracts payable 127,789 3,934 - - 390,526 67,561Intergovernmental payables - - - - 3,070 -Interfund payables - - 23,824 - - -Accrued payroll - - - - - -Customer deposits - - - - - -

Total liabilities 975,798 3,934 98,101 - 619,226 85,811

Deferred inflows of resourcesUnavailable revenues 935 - - 46,338 15,438 1,389

Total deferred inflows of resources 935 - - 46,338 15,438 1,389

Fund balances (deficit)Nonspendable - - - - 4,597,708 -Restricted 1,362,793 1,110,761 - - 16,585,570 1,874,083Committed - - - 11,970,881 - -Assigned - - - - 541,070 3,431

Total fund balances (deficit) 1,362,793 1,110,761 - 11,970,881 21,724,348 1,877,514Total liabilities, deferred inflows of resources, and

fund balances $ 2,339,526 1,114,695 98,101 12,017,219 22,359,012 1,964,714

(Continued)97

B-1-2

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Balance Sheet, Continued

Other Governmental Funds

June 30, 2019

Special Revenue Funds

Prop. A LocalTransit

Assistance

Prop. C LocalTransit

Assistance

MetroViolations

FundAffordable

Housing Fund Fine ArtSeized and

Forfeited PropertyCommty Dev

Technology Fd

AssetsCash and investments $ 2,400,026 2,101,930 445,000 1,494,748 2,734,552 5,197,327 4,684,407Accounts receivable, net 45,000 - 380,000 - - - -Interest receivable 12,818 16,516 - - 24,072 - -Interfund receivables - - - - - - -Intergovernmental receivables 292,090 - - - - - -Advances to other funds - - - - - - -Restricted assets

Cash and investments - - - - - - -Interest receivable - - - - - - -

Total assets 2,749,934 2,118,446 825,000 1,494,748 2,758,624 5,197,327 4,684,407

Liabilities, deferred inflows of resources, and fundbalances

LiabilitiesAccounts payable 107,517 58,767 - 2,016 5,475 272,652 137,674Contracts payable - 52,283 - - - - -Intergovernmental payables - - - - - - 2,082Interfund payables - - - - - - -Accrued payroll - - - - - - 10,128Customer deposits - - - - 295,500 - -

Total liabilities 107,517 111,050 - 2,016 300,975 272,652 149,884

Deferred inflows of resourcesUnavailable revenues 242,029 1,534 - - 2,321 - -

Total deferred inflows of resources 242,029 1,534 - - 2,321 - -

Fund balances (deficit)Nonspendable - - - - - - -Restricted 2,089,605 1,961,272 825,000 1,487,689 - 4,774,248 -Committed - - - - 2,427,097 - 4,513,371Assigned 310,783 44,590 - 5,043 28,231 150,427 21,152

Total fund balances (deficit) 2,400,388 2,005,862 825,000 1,492,732 2,455,328 4,924,675 4,534,523Total liabilities, deferred inflows of resources, and

fund balances $ 2,749,934 2,118,446 825,000 1,494,748 2,758,624 5,197,327 4,684,407

(Continued)98

B-1-2

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Balance Sheet, Continued

Other Governmental Funds

June 30, 2019

Air QualityImprovement CAL SB 1186

CommunityCharitableFoundation

Law EnforcementGrants Inmate Welfare

Measure M - LAMetro Tax Total

AssetsCash and investments $ 170,296 108,304 354,120 236,388 60,292 867,676 55,192,612Accounts receivable, net - - - - - - 531,902Interest receivable 2,949 - 2,220 - 325 1,062 279,123Interfund receivables - - - - - - 420,923Intergovernmental receivables 11,602 - - 113,742 - - 628,461Advances to other funds - - - - - - 4,597,708Restricted assets

Cash and investments - - - - - - -Interest receivable - - - - - - -

Total assets 184,847 108,304 356,340 350,130 60,617 868,738 61,650,729

Liabilities, deferred inflows of resources, and fundbalances

LiabilitiesAccounts payable (1) 219 - - - - 1,750,485Contracts payable - - - - - - 642,093Intergovernmental payables - - - 1,090 - - 6,242Interfund payables - - - - - - 23,824Accrued payroll - - - 1,673 - - 11,801Customer deposits - - - - - - 295,500

Total liabilities (1) 219 - 2,763 - - 2,729,945

Deferred inflows of resourcesUnavailable revenues 286 - - - 40 325 310,635

Total deferred inflows of resources 286 - - - 40 325 310,635

Fund balances (deficit)Nonspendable - - - - - - 4,597,708Restricted 183,711 108,085 356,340 347,367 60,577 812,586 33,939,687Committed - - - - - - 18,911,349Assigned 851 - - - - 55,827 1,161,405

Total fund balances (deficit) 184,562 108,085 356,340 347,367 60,577 868,413 58,610,149Total liabilities, deferred inflows of resources, and

fund balances $ 184,847 108,304 356,340 350,130 60,617 868,738 61,650,729

(Continued)99

B-1-3

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Balance Sheet, Continued

Other Governmental Funds

June 30, 2019

Debt Service Fund Permanent Funds

Infrastructure Buck Burton Green TotalTotal Other

Governmental Funds

AssetsCash and investments $ 2,528,477 - - - 57,721,089Accounts receivable, net - - - - 531,902Interest receivable 19,369 - - - 298,492Interfund receivables - - - - 420,923Intergovernmental receivables - - - - 628,461Advances to other funds - - - - 4,597,708Restricted assets

Cash and investments 75 225,718 65,533 291,251 291,326Interest receivable - 1,480 450 1,930 1,930

Total assets 2,547,921 227,198 65,983 293,181 64,491,831

Liabilities, deferred inflows of resources, and fundbalances

LiabilitiesAccounts payable - - - - 1,750,485Contracts payable - - - - 642,093Intergovernmental payables - - - - 6,242Interfund payables - - - - 23,824Accrued payroll - - - - 11,801Customer deposits - - - - 295,500

Total liabilities - - - - 2,729,945

Deferred inflows of resourcesUnavailable revenues - - - - 310,635

Total deferred inflows of resources - - - - 310,635

Fund balances (deficit)Nonspendable - 34,641 46,740 81,381 4,679,089Restricted 2,547,921 192,557 - 192,557 36,680,165Committed - - 19,243 19,243 18,930,592Assigned - - - - 1,161,405

Total fund balances (deficit) 2,547,921 227,198 65,983 293,181 61,451,251Total liabilities, deferred inflows of resources, and

fund balances $ 2,547,921 227,198 65,983 293,181 64,491,831

100

B-2

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Statement of Revenues, Expenditures and Changes in Fund Balances

Other Governmental FundsFor the Year Ended June 30, 2019

Special Revenue Funds

Streets andHighways State Gas

TaxCalifornia StateSenate Bill 1473

CommunityDevelopment Block

GrantIn-Lieu Parking

DistrictParks & Recreation

Facilities

MetropolitanTransportation

Authority

RevenuesTaxes $ - - - - 2,688,243 -Licenses and permits - 91,725 - - - -Intergovernmental revenue 1,381,308 - 98,101 - - 432,833Charges for services - 91,349 - 787,911 - 27,201Use of money and property 35,646 - - 292,884 715,304 45,517Net change in fair value of investments 5,022 - - 33,606 53,962 5,524Miscellaneous 172 - - - 137,750 -

Total revenues 1,422,148 183,074 98,101 1,114,401 3,595,259 511,075

ExpendituresCurrent

General government - - - - - -Public safety - - - - - -Public service 21 22,881 98,614 214 - 109,501Culture and recreation - - - - 391 -

Debt serviceInterest expenditures - - - - - -Principal retirement - - - - - -

Capital outlay 1,049,406 - - - 5,896,016 68,084

Total expenditures 1,049,427 22,881 98,614 214 5,896,407 177,585

Excess (deficiency) of revenues overexpenditures 372,721 160,193 (513) 1,114,187 (2,301,148) 333,490

Other financing sources (uses)Transfers in - - - - - -Transfers out (6,000) - - - (12,000) -

Total other financing sources (uses) (6,000) - - - (12,000) -

Net change in fund balances 366,721 160,193 (513) 1,114,187 (2,313,148) 333,490

Fund balances (deficit), July 1 996,072 950,568 513 10,856,694 24,037,496 1,544,024

Fund balances (deficit), June 30 $ 1,362,793 1,110,761 - 11,970,881 21,724,348 1,877,514

(Continued)101

B-2-2

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Statement of Revenues, Expenditures and Changes in Fund Balances, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

Prop. A LocalTransit Assistance

Prop. C LocalTransit Assistance

Metro ViolationsFund

Affordable HousingFund Fine Art

Seized andForfeited Property

Commty DevTechnology Fd

RevenuesTaxes $ - - - - 97,649 - -Licenses and permits - - - - - - -Intergovernmental revenue 695,557 576,945 260,000 - - 720,164 -Charges for services 10,476 - - - - - 593,009Use of money and property 58,944 57,756 - - 83,148 - -Net change in fair value of investments 6,930 6,419 - - 8,740 - -Miscellaneous - - - - 19 - -

Total revenues 771,907 641,120 260,000 - 189,556 720,164 593,009

ExpendituresCurrent

General government - - - - - - -Public safety - - - - - 326,460 189,573Public service 502,182 240,033 - 7,268 - - 198,304Culture and recreation - - - - 23,291 - -

Debt serviceInterest expenditures - - - - - - -Principal retirement - - - - - - -

Capital outlay - 75,539 - - 500,554 60,926 30,984

Total expenditures 502,182 315,572 - 7,268 523,845 387,386 418,861

Excess (deficiency) of revenues overexpenditures 269,725 325,548 260,000 (7,268) (334,289) 332,778 174,148

Other financing sources (uses)Transfers in - - - - - - 4,409,845Transfers out - - - - - - (49,470)

Total other financing sources (uses) - - - - - - 4,360,375

Net change in fund balances 269,725 325,548 260,000 (7,268) (334,289) 332,778 4,534,523

Fund balances (deficit), July 1 2,130,663 1,680,314 565,000 1,500,000 2,789,617 4,591,897 -

Fund balances (deficit), June 30 $ 2,400,388 2,005,862 825,000 1,492,732 2,455,328 4,924,675 4,534,523

(Continued)102

B-2-2

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Statement of Revenues, Expenditures and Changes in Fund Balances, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Air QualityImprovement CAL SB 1186

CommunityCharitableFoundation

Law EnforcementGrants Inmate Welfare

Measure M - LAMetro Tax Total

RevenuesTaxes $ - - - - - - 2,785,892Licenses and permits - - - - - - 91,725Intergovernmental revenue 44,755 - - 394,120 - 487,600 5,091,383Charges for services - 39,136 - 107,001 6,244 - 1,662,327Use of money and property 8,997 - - - 1,438 13,208 1,312,842Net change in fair value of investments 812 - - - 167 1,912 123,094Miscellaneous - - 25,240 - - - 163,181

Total revenues 54,564 39,136 25,240 501,121 7,849 502,720 11,230,444

ExpendituresCurrent

General government 250,000 - 1,244 - - - 251,244Public safety - - - 333,048 1 - 849,082Public service 9 - - - - - 1,179,027Culture and recreation - - - - - - 23,682

Debt serviceInterest expenditures - - - - - - -Principal retirement - - - - - - -

Capital outlay - - - - - - 7,681,509

Total expenditures 250,009 - 1,244 333,048 1 - 9,984,544

Excess (deficiency) of revenues overexpenditures (195,445) 39,136 23,996 168,073 7,848 502,720 1,245,900

Other financing sources (uses)Transfers in - - - - - - 4,409,845Transfers out (90,000) - - - - - (157,470)

Total other financing sources (uses) (90,000) - - - - - 4,252,375

Net change in fund balances (285,445) 39,136 23,996 168,073 7,848 502,720 5,498,275

Fund balances (deficit), July 1 470,007 68,949 332,344 179,294 52,729 365,693 53,111,874

Fund balances (deficit), June 30 $ 184,562 108,085 356,340 347,367 60,577 868,413 58,610,149

(Continued)103

B-2-3

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Statement of Revenues, Expenditures and Changes in Fund Balances, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Debt ServiceFund Permanent Funds

Infrastructure Buck Burton Green TotalTotal Other

Governmental Funds

RevenuesTaxes $ - - - - 2,785,892Licenses and permits - - - - 91,725Intergovernmental revenue - - - - 5,091,383Charges for services - - - - 1,662,327Use of money and property 95,021 6,141 1,827 7,968 1,415,831Net change in fair value of investments 10,236 681 202 883 134,213Miscellaneous - - - - 163,181

Total revenues 105,257 6,822 2,029 8,851 11,344,552

ExpendituresCurrent

General government - - - - 251,244Public safety - - - - 849,082Public service 63 3 1,499 1,502 1,180,592Culture and recreation - - - - 23,682

Debt serviceInterest expenditures 1,258,998 - - - 1,258,998Principal retirement 383,863 - - - 383,863

Capital outlay - - - - 7,681,509

Total expenditures 1,642,924 3 1,499 1,502 11,628,970

Excess (deficiency) of revenues overexpenditures (1,537,667) 6,819 530 7,349 (284,418)

Other financing sources (uses)Transfers in 1,642,661 - - - 6,052,506Transfers out - - - - (157,470)

Total other financing sources (uses) 1,642,661 - - - 5,895,036

Net change in fund balances 104,994 6,819 530 7,349 5,610,618

Fund balances (deficit), July 1 2,442,927 220,379 65,453 285,832 55,840,633

Fund balances (deficit), June 30 $ 2,547,921 227,198 65,983 293,181 61,451,251

104

B-3

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

Streets and Highways State Gas Tax California State Senate Bill 1473

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesLicenses and permits $ - - - - - - 91,725 91,725Intergovernmental revenue 975,334 975,334 1,381,308 405,974 - - - -Charges for services - - - - 105,000 105,000 91,349 (13,651)Use of money and property 25,000 25,000 35,646 10,646 - - - -Net change in fair value of investments - - 5,022 5,022 - - - -Miscellaneous - - 172 172 - - - -

Total revenues 1,000,334 1,000,334 1,422,148 421,814 105,000 105,000 183,074 78,074

ExpendituresCurrent

Public service - - 21 21 34,000 34,000 22,881 (11,119)Capital outlay 1,455,746 2,389,271 1,049,406 (1,339,865) - - - -

Total expenditures 1,455,746 2,389,271 1,049,427 (1,339,844) 34,000 34,000 22,881 (11,119)

Excess (deficiency) of revenues overexpenditures (455,412) (1,388,937) 372,721 1,761,658 71,000 71,000 160,193 89,193

Other financing sources (uses)Transfers out (6,000) (6,000) (6,000) - - - - -

Total other financing sources (uses) (6,000) (6,000) (6,000) - - - - -

Net change in fund balances (461,412) (1,394,937) 366,721 1,761,658 71,000 71,000 160,193 89,193Fund balances (deficit), July 1 996,072 996,072 996,072 - 950,568 950,568 950,568 -

Fund balances (deficit), June 30 $ 534,660 (398,865) 1,362,793 1,761,658 1,021,568 1,021,568 1,110,761 89,193

(Continued)105

B-3-2

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

Community Development Block Grant In-Lieu Parking District

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesIntergovernmental revenue $ 235,637 235,637 98,101 (137,536) - - - -Charges for services - - - - 639,855 639,855 787,911 148,056Use of money and property - - - - 70,000 70,000 292,884 222,884Net change in fair value of investments - - - - - - 33,606 33,606

Total revenues 235,637 235,637 98,101 (137,536) 709,855 709,855 1,114,401 404,546

ExpendituresCurrent

Public service 163,927 191,022 98,614 (92,408) - - 214 214

Total expenditures 163,927 191,022 98,614 (92,408) - - 214 214

Excess (deficiency) of revenues overexpenditures 71,710 44,615 (513) (45,128) 709,855 709,855 1,114,187 404,332

Net change in fund balances 71,710 44,615 (513) (45,128) 709,855 709,855 1,114,187 404,332Fund balances (deficit), July 1 513 513 513 - 10,856,694 10,856,694 10,856,694 -

Fund balances (deficit), June 30 $ 72,223 45,128 - (45,128) 11,566,549 11,566,549 11,970,881 404,332

(Continued)106

B-3-3

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

Parks & Recreation Facilities Metropolitan Transportation Authority

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesTaxes $ 4,000,000 4,000,000 2,688,243 (1,311,757) - - - -Intergovernmental revenue - - - - 406,249 406,249 432,833 26,584Charges for services - - - - 20,009 20,009 27,201 7,192Use of money and property 418,822 418,822 715,304 296,482 15,000 15,000 45,517 30,517Net change in fair value of investments - - 53,962 53,962 2,000 2,000 5,524 3,524Miscellaneous - - 137,750 137,750 - - - -

Total revenues 4,418,822 4,418,822 3,595,259 (823,563) 443,258 443,258 511,075 67,817

ExpendituresPublic service - - - - 210,000 256,450 109,501 (146,949)Culture and recreation - - 391 391 - - - -

Capital outlay 2,513,692 18,803,229 5,896,016 (12,907,213) 100,000 1,246,036 68,084 (1,177,952)

Total expenditures 2,513,692 18,803,229 5,896,407 (12,906,822) 310,000 1,502,486 177,585 (1,324,901)

Excess (deficiency) of revenues overexpenditures 1,905,130 (14,384,407) (2,301,148) 12,083,259 133,258 (1,059,228) 333,490 1,392,718

Other financing sources (uses)Transfers out (12,000) (12,000) (12,000) - - - - -

Total other financing sources (uses) (12,000) (12,000) (12,000) - - - - -

Net change in fund balances 1,893,130 (14,396,407) (2,313,148) 12,083,259 133,258 (1,059,228) 333,490 1,392,718Fund balances, (deficit), July 1 24,037,496 24,037,496 24,037,496 - 1,544,024 1,544,024 1,544,024 -

Fund balances (deficit), June 30 $ 25,930,626 9,641,089 21,724,348 12,083,259 1,677,282 484,796 1,877,514 1,392,718

(Continued)107

B-3-4

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

Prop. A Local Transit Assistance Prop. C Local Transit Assistance

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesIntergovernmental revenue $ 653,010 653,010 695,557 42,547 541,655 541,655 576,945 35,290Charges for services 32,500 32,500 10,476 (22,024) - - - -Use of money and property 23,273 23,273 58,944 35,671 35,000 35,000 57,756 22,756Net change in fair value of investments 7,444 7,444 6,930 (514) - - 6,419 6,419

Total revenues 716,227 716,227 771,907 55,680 576,655 576,655 641,120 64,465

ExpendituresCurrent

Public service 745,720 962,961 502,182 (460,779) 448,050 448,091 240,033 (208,058)Capital outlay - - - - - 166,511 75,539 (90,972)

Total expenditures 745,720 962,961 502,182 (460,779) 448,050 614,602 315,572 (299,030)

Excess (deficiency) of revenues overexpenditures (29,493) (246,734) 269,725 516,459 128,605 (37,947) 325,548 363,495

Net change in fund balances (29,493) (246,734) 269,725 516,459 128,605 (37,947) 325,548 363,495Fund balances (deficit), July 1 2,130,663 2,130,663 2,130,663 - 1,680,314 1,680,314 1,680,314 -

Fund balances (deficit), June 30 $ 2,101,170 1,883,929 2,400,388 516,459 1,808,919 1,642,367 2,005,862 363,495

(Continued)108

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

Metro Violations Fund Affordable Housing Fund

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

Revenues: Intergovernmental revenue $ - - 260,000 260,000 - - - -

Total revenues - - 260,000 260,000 - - - -

Expenditures: Current:

Public safety - 30,000 - (30,000) - - - -Public service - - - - 50,000 50,000 7,268 (42,732)

Total expenditures - 30,000 - (30,000) 50,000 50,000 7,268 (42,732)

Excess (deficiency) of revenues overexpenditures - (30,000) 260,000 290,000 (50,000) (50,000) (7,268) 42,732

Other financing sources (uses):

Net change in fund balances - (30,000) 260,000 290,000 (50,000) (50,000) (7,268) 42,732Fund balance, July 1 565,000 565,000 565,000 - 1,500,000 1,500,000 1,500,000 -

Fund balance, June 30 $ 565,000 535,000 825,000 290,000 1,450,000 1,450,000 1,492,732 42,732

109

B-3-5

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

Fine Art Seized and Forfeited Property

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesTaxes $ 260,967 260,967 97,649 (163,318) - - - -Intergovernmental revenue - - - - - - 720,164 720,164Use of money and property 30,000 30,000 83,148 53,148 - - - -Net change in fair value of investments 3,000 3,000 8,740 5,740 - - - -Miscellaneous - - 19 19 - - - -

Total revenues 293,967 293,967 189,556 (104,411) - - 720,164 720,164

ExpendituresCurrent

Public safety - - - - 382,000 1,457,340 326,460 (1,130,880)Culture and recreation 49,255 49,255 23,291 (25,964) - - - -

Capital outlay 17,319 1,295,978 500,554 (795,424) - 3,048,258 60,926 (2,987,332)

Total expenditures 66,574 1,345,233 523,845 (821,388) 382,000 4,505,598 387,386 (4,118,212)

Excess (deficiency) of revenues overexpenditures 227,393 (1,051,266) (334,289) 716,977 (382,000) (4,505,598) 332,778 4,838,376

Net change in fund balances 227,393 (1,051,266) (334,289) 716,977 (382,000) (4,505,598) 332,778 4,838,376Fund balances (deficit), July 1 2,789,617 2,789,617 2,789,617 - 4,591,897 4,591,897 4,591,897 -

Fund balances (deficit), June 30 $ 3,017,010 1,738,351 2,455,328 716,977 4,209,897 86,299 4,924,675 4,838,376

(Continued)110

B-3-6

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

Commty Dev Technology Fd Air Quality Improvement

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesIntergovernmental revenue $ - - - - 40,000 40,000 44,755 4,755Charges for services 766,479 766,479 593,009 (173,470) - - - -Use of money and property - - - - 5,390 5,390 8,997 3,607Net change in fair value of investments - - - - 393 393 812 419

Total revenues 766,479 766,479 593,009 (173,470) 45,783 45,783 54,564 8,781

ExpendituresCurrent

General government - - - - - 250,000 250,000 -Public service 32,724 469,456 198,304 (271,152) 65,000 65,000 9 (64,991)Public safety 204,862 227,403 189,573 (37,830) - - - -

Capital outlay - 152,972 30,984 (121,988) - 102,099 - (102,099)

Total expenditures 237,586 849,831 418,861 (430,970) 65,000 417,099 250,009 (167,090)

Excess (deficiency) of revenues overexpenditures 528,893 (83,352) 174,148 257,500 (19,217) (371,316) (195,445) 175,871

Transfers in - - 4,409,845 4,409,845 - - - -Transfers out - (49,470) (49,470) - - (90,000) (90,000) -

Net change in fund balances 528,893 (132,822) 4,534,523 4,667,345 (19,217) (461,316) (285,445) 175,871Fund balances (deficit), July 1 - - - - 470,007 470,007 470,007 -

Fund balances (deficit), June 30 $ 528,893 (132,822) 4,534,523 4,667,345 450,790 8,691 184,562 175,871

(Continued)111

B-3-7

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

CAL SB 1186 Community Charitable Foundation

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesCharges for services $ 8,800 8,800 39,136 30,336 - - - -Miscellaneous - - - - - - 25,240 25,240

Total revenues 8,800 8,800 39,136 30,336 - - 25,240 25,240

ExpendituresCurrent

General government - - - - - - 1,244 1,244

Total expenditures - - - - - - 1,244 1,244

Excess (deficiency) of revenues overexpenditures 8,800 8,800 39,136 30,336 - - 23,996 23,996

Other financing sources (uses)

Total other financing sources (uses) - - - - - - - -

Net change in fund balances 8,800 8,800 39,136 30,336 - - 23,996 23,996Fund balances (deficit), July 1 68,949 68,949 68,949 - 332,344 332,344 332,344 -

Fund balances (deficit), June 30 $ 77,749 77,749 108,085 30,336 332,344 332,344 356,340 23,996

(Continued)112

B-3-7-8

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Special Revenue Funds

Law Enforcement Grants Inmate Welfare

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesTaxes $ - - - - - - - -Licenses and permits - - - - - - - -Intergovernmental revenue 100,000 285,000 394,120 109,120 - - - -Charges for services - 82,076 107,001 24,925 4,000 4,000 6,244 2,244Use of money and property - - - - - - 1,438 1,438Net change in fair value of investments - - - - - - 167 167Miscellaneous - - - - - - - -

Total revenues 100,000 367,076 501,121 134,045 4,000 4,000 7,849 3,849

ExpendituresCurrent

General government - - - - - - - -Public safety 121,673 626,154 333,048 (293,106) - - 1 1Public service - 1,600 - (1,600) - - - -Culture and recreation - - - - - - - -

Capital outlay - 50,000 - (50,000) - - - -

Total expenditures 121,673 677,754 333,048 (344,706) - - 1 1

Excess (deficiency) of revenues overexpenditures (21,673) (310,678) 168,073 478,751 4,000 4,000 7,848 3,848

Other financing sources (uses)Transfers in - - - - - - - -Transfers out - - - - - - - -

Total other financing sources (uses) - - - - - - - -

Net change in fund balances (21,673) (310,678) 168,073 478,751 4,000 4,000 7,848 3,848Fund balances (deficit), July 1 179,294 179,294 179,294 - 52,729 52,729 52,729 -

Fund balances (deficit), June 30 $ 157,621 (131,384) 347,367 478,751 56,729 56,729 60,577 3,848

113

B-3-7-8

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Measure M - LA Metro Tax Total

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesTaxes $ - - - - $ 4,260,967 4,260,967 2,785,892 (1,475,075)Licenses and permits - - - - - - 91,725 91,725Intergovernmental revenue - - 487,600 487,600 2,951,885 3,136,885 5,091,383 1,954,498Charges for services 4,000 4,000 - (4,000) 1,580,643 1,662,719 1,662,327 (392)Use of money and property - - 13,208 13,208 622,485 622,485 1,312,842 690,357Net change in fair value of investments - - 1,912 1,912 12,837 12,837 123,094 110,257Miscellaneous - - - - - - 163,181 163,181

Total revenues 4,000 4,000 502,720 498,720 9,428,817 9,695,893 11,230,444 1,534,551

ExpendituresCurrent

General government - - - - - 250,000 251,244 1,244Public safety - - - - 708,535 2,340,897 849,082 (1,491,815)Public service 200,000 200,000 - (200,000) 1,949,421 2,678,580 1,179,027 (1,499,553)Culture and recreation - - - - 49,255 49,255 23,682 (25,573)

Capital outlay - - - - 4,086,757 27,254,354 7,681,509 (19,572,845)

Total expenditures 200,000 200,000 - (200,000) 6,793,968 32,573,086 9,984,544 (22,588,542)

Excess (deficiency) of revenues overexpenditures (196,000) (196,000) 502,720 698,720 2,634,849 (22,877,193) 1,245,900 24,123,093

Other financing sources (uses)Transfers in - - - - - - 4,409,845 4,409,845Transfers out - - - - 18,000 (157,470) (157,470) -

Total other financing sources (uses) - - - - 18,000 (157,470) 4,252,375 4,409,845

Net change in fund balances (196,000) (196,000) 502,720 698,720 2,616,849 (23,034,663) 5,498,275 28,532,938Fund balances (deficit), July 1 365,693 365,693 365,693 - 53,111,874 53,111,874 53,111,874 -

Fund balances (deficit), June 30 $ 169,693 169,693 868,413 698,720 $ 55,728,723 30,077,211 58,610,149 28,532,938

114

B-3-9

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Debt Service Fund Permanent Funds

Infrastructure Buck

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesUse of money and property $ 20,000 20,000 95,021 75,021 - - 6,141 6,141Net change in fair value of investments - - 10,236 10,236 - - 681 681

Total revenues 20,000 20,000 105,257 85,257 - - 6,822 6,822

ExpendituresCurrent

Public service 1,207 1,207 63 (1,144) - - 3 3Debt service

Interest expenditures 1,258,998 1,258,998 1,258,998 - - - - -Principal retirement 383,863 383,863 383,863 - - - - -

Total expenditures 1,644,068 1,644,068 1,642,924 (1,144) - - 3 3

Excess (deficiency) of revenues overexpenditures (1,624,068) (1,624,068) (1,537,667) 86,401 - - 6,819 6,819

Other financing sources (uses)Transfers in 1,642,661 1,642,661 1,642,661 - - - - -

Net change in fund balances 18,593 18,593 104,994 86,401 - - 6,819 6,819Fund balances (deficit), July 1 2,442,927 2,442,927 2,442,927 - 220,379 220,379 220,379 -

Fund balances (deficit), June 30 $ 2,461,520 2,461,520 2,547,921 86,401 220,379 220,379 227,198 6,819

(Continued)115

B-3-10

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Permanent Funds

Burton Green Total

Budgeted Amounts Actual

Variancewith Final

Budget-Over Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under) Original Final Amounts (Under)

RevenuesUse of money and property - - 1,827 1,827 - - 7,968 7,968Net change in fair value of investments - - 202 202 - - 883 883

Total revenues - - 2,029 2,029 - - 8,851 8,851

ExpendituresPublic service - - 1,499 1,499 - - 1,502 1,502

Total expenditures - - 1,499 1,499 - - 1,502 1,502Excess (deficiency) of revenues over

expenditures - - 530 530 - - 7,349 7,349

Net change in fund balances - - 530 530 - - 7,349 7,349Fund balances (deficit), July 1 65,453 65,453 65,453 - 285,832 285,832 285,832 -

Fund balances (deficit), June 30 $ 65,453 65,453 65,983 530 285,832 285,832 293,181 7,349

(Continued)116

B-3-11

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual, Continued

Other Governmental Funds

For the Year Ended June 30, 2019

Total Other Governmental Funds

Budgeted Amounts Actual

Variancewith Final

Budget-Over

Original Final Amounts (Under)

RevenuesTaxes $ 4,260,967 4,260,967 2,785,892 (1,475,075)Licenses and permits $ - - 91,725 91,725Intergovernmental revenue 2,951,885 3,136,885 5,091,383 1,954,498Charges for services 1,580,643 1,662,719 1,662,327 (392)Use of money and property 642,485 642,485 1,415,831 773,346Net change in fair value of investments 12,837 12,837 134,213 121,376Miscellaneous - - 163,181 163,181

Total revenues 9,448,817 9,715,893 11,344,552 1,628,659

ExpendituresCurrent

General government - 250,000 251,244 1,244Public safety 708,535 2,340,897 849,082 (1,491,815)Public service 1,950,628 2,679,787 1,180,592 (1,499,195)Culture and recreation 49,255 49,255 23,682 (25,573)Debt service

Interest expenditures 1,258,998 1,258,998 1,258,998 -Principal retirement 383,863 383,863 383,863 -

Capital outlay 4,086,757 27,254,354 7,681,509 (19,572,845)

Total expenditures 8,438,036 34,217,154 11,628,970 (22,588,184)

Excess (deficiency) of revenues overexpenditures 1,010,781 (24,501,261) (284,418) 24,216,843

Other financing sources (uses)Transfers in 1,642,661 1,642,661 6,052,506 4,409,845Transfers out (18,000) (157,470) (157,470) -

Total other financing sources (uses) 1,624,661 1,485,191 5,895,036 4,409,845

Net change in fund balances 2,635,442 (23,016,070) 5,610,618 28,626,688Fund balances (deficit), July 1 55,840,633 55,840,633 55,840,633 -

Fund balances (deficit), June 30 $ 58,476,075 32,824,563 61,451,251 28,626,688

117

C-1

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual

Infrastructure Capital Projects Fund Fund - Major Fund

For the Year Ended June 30, 2019

Budgeted Amounts Actual

Variance withFinal Budget-

Over

Original Final Amounts (Under)

RevenuesUse of money and property $ 570,000 570,000 1,051,215 481,215Net change in fair value of investments - - 101,712 101,712Miscellaneous - - (633) (633)

Total revenues 570,000 570,000 1,152,294 582,294

ExpendituresPublic service - - 362 362Capital outlay 6,788,653 59,229,788 25,840,640 (33,389,148)

Total expenditures 6,788,653 59,229,788 25,841,002 (33,388,786)

Excess (deficiency) of revenues overexpenditures (6,218,653) (58,659,788) (24,688,708) 33,971,080

Other financing sources (uses)Transfers in 5,200,000 23,585,920 23,585,920 -Transfers out - (525,998) (1,001,593) (475,595)

Total other financing sources (uses) 5,200,000 23,059,922 22,584,327 (475,595)

Net change in fund balances (1,018,653) (35,599,866) (2,104,381) 33,495,485Fund balances (deficit), July 1 36,061,417 36,061,417 36,061,417 -

Fund balances (deficit), June 30 $ 35,042,764 461,551 33,957,036 33,495,485

119

Office and Operational Equipment Fund

This fund was created to finance and acquire city-wide officeand operational equipment that will eventually be replaced infuture years. User fund charges are based on futurereplacement costs.

INTERNALSERVICE FUNDS

This section of the CAFR provides information on eachindividual internal service fund. Internal service funds are usedby the City to centralize certain services and then allocate thecost of those services to the user departments on a costreimbursement basis. User fund charges from internal servicefunds with capital assets typically consist of two components: amaintenance/service component and a capital replacementcomponent. User fund charges from self-insurance internalservice funds generally are based on claims experience of theuser department. This section includes the following internalservice funds:

Information Technology Internal Service Fund

This fund was created to properly allocate computer services touser departments. User fund charges are based on an allocationformula derived from programming time and computer usage.Long-term liabilities, including interfund loans and revenuebonds, payable from user department charges, are issued fromtime to time to finance the acquisition and construction ofinformation technology facilities and equipment.

Capital Assets and Vehicles Internal Service Funds

Activities pertaining to the acquisition, construction, financing,maintenance and operation of the City’s capital assets(excluding enterprise fund assets, infrastructure assets and theCity’s fine art collection), as well as capital accumulation forthe replacement and upgrade of those capital assets, isaccounted for in these funds. Long-term liabilities, includinginterfund loans and revenue bonds, payable from userdepartment charges, are issued from time to time to finance theacquisition and construction of the City’s non-enterprise capitalfacilities, vehicles, and equipment.

Reprographics Internal Service Fund

Activities pertaining to in-house printing, metered postage andthe issuance of office supplies to various departments areaccounted for in this fund.

Cable Television Internal Service Fund

This fund accounts for the cost of cable television equipment,program development and other services, which are allocatedto the user departments for television coverage of City Councilmeetings, board and commission meetings, special City events,and various other archival and promotional purposes.

Liability Insurance Internal Service Fund

The City is self-insured for the first $500,000 of each liabilityclaim. This fund accounts for these self-insured claims andexcess insurance premiums, and charges user departmentsbased on claims experience. In addition to oversight by theCity’s Risk Manager, the City has contracted with anindependent adjuster to monitor liability claims on anindividual basis. Liability claims in excess of $1,000,000 up to$26,000,000 combined single limit occurrence are covered byexcess insurance.

Workers’ Compensation Internal Service Fund

The City is self-insured for all workers’ compensation claims.This fund accounts for these self-insured claims and theircharge to user departments. In addition to oversight by theCity’s Risk Manager, the City has contracted with anindependent adjuster to monitor workers’ compensation claimson an individual basis. Administration of this fund adheres toregulations imposed by the State of California concerningworkers’ compensation programs.

Unemployment Insurance Internal Service Fund

The City provides unemployment benefits to terminatedemployees through a reimbursable payment schedule with theState Employment Development Department. This fundaccounts for such payments and is funded by charging thedepartments that employed the claimants for paid benefits.

Employee Benefits Internal Service Fund

This fund accounts for the estimated allocated departmentalcharges from which employee benefits (health, dental, life,vision and other insurance coverages) are made. The City isself-insured for dental claims; other coverages are throughgroup plans. The long-term portion of governmental fundcompensated absences liability is also accounted for in thisfund. Net increases in this liability are charged to the userfunds; decreases in the net liability are included in the reservebalance.

Policy, Administration, and Legal Internal Service Fund

This fund includes the departments of Policy and Management,Administrative Services, and Legal (City Attorney’s Office).These departments provide services to all departments, similarto the other Internal Service Funds. In order to fully capture thecost for the newly implemented program budget, the cost ofthese services were incorporated into an Internal Service Fundand then spread to the various City departments.

D-1

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Statement of Net Position

Internal Service Funds

June 30, 2019

InformationTechnology Capital Assets Vehicles

Office andOperationalEquipment Reprographics

CableTelevision

LiabilityInsurance

Workers'Compensation

UnemploymentInsurance

EmployeeBenefits

Policy,Administration,

& Legal Total

AssetsCash and investments $ 15,761,028 55,279,664 26,149,719 14,778,822 2,081,363 5,553,286 11,166,856 13,738,593 214,226 68,712,117 23,074,006 236,509,680Accounts receivable, net 43,750 65,719 28,205 - - - - - - - 1,468,826 1,606,500Interest receivable 135,166 314,453 137,656 89,583 15,780 35,761 61,166 67,063 1,388 407,376 133,504 1,398,896Interfund receivables - 1,024,466 659,225 - - - - - - - - 1,683,691Inventories - - 481,683 - 14,556 - - - - - - 496,239Prepaid expenses - - - - - - 42,839 - - - - 42,839

Total current assets 15,939,944 56,684,302 27,456,488 14,868,405 2,111,699 5,589,047 11,270,861 13,805,656 215,614 69,119,493 24,676,336 241,737,845

Noncurrent assets:Restricted assets:

Cash and investments - 4,805,537 - - - - - - - 834,938 - 5,640,475

Total restricted assets - 4,805,537 - - - - - - - 834,938 - 5,640,475

Advances to other funds - 11,190,163 7,200,669 - - - - - - - - 18,390,832

Capital assets:Land - 53,870,241 - - - - - - - - - 53,870,241Buildings 3,723,032 239,727,400 - - - - - - - - - 243,450,432Improvements other than

buildings 3,134,272 63,151,010 - - - - - - - - - 66,285,282Machinery and equipment 29,644,838 7,870,512 32,706,238 2,087,710 27,688 3,744,491 - - - - - 76,081,477Infrastructure 1,990,258 - - - - - 421,381 - - - - 2,411,639

38,492,400 364,619,163 32,706,238 2,087,710 27,688 3,744,491 421,381 - - - - 442,099,071Less: accumulated depreciation (31,696,308) (149,215,342) (18,386,235) (1,350,661) (27,688) (2,278,872) (81,640) - - - - (203,036,746)Construction in progress 12,031,729 3,212,514 240,263 - - 122,924 - - - - - 15,607,430

Total capital assets, net 18,827,821 218,616,335 14,560,266 737,049 - 1,588,543 339,741 - - - - 254,669,755

Total noncurrent assets 18,827,821 234,612,035 21,760,935 737,049 - 1,588,543 339,741 - - 834,938 - 278,701,062

Total assets 34,767,765 291,296,337 49,217,423 15,605,454 2,111,699 7,177,590 11,610,602 13,805,656 215,614 69,954,431 24,676,336 520,438,907

Deferred outflows of resources

Deferred outflows of resources -pension related 691,441 736,298 431,602 - 321,185 199,778 63,573 63,576 - - 4,601,383 7,108,836

Deferred outflows of resources -other post employment benefitrelated 29,340 14,841 5,137 - 3,311 35,848 - - - - 219,195 307,672

Deferred amount on refunding, net - 259,195 - - - - - - - - - 259,195

Total deferred outflows ofresources 720,781 1,010,334 436,739 - 324,496 235,626 63,573 63,576 - - 4,820,578 7,675,703

(Continued)122

D-1-2

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Statement of Net Position, Continued

Internal Service Funds

June 30, 2019

InformationTechnology Capital Assets Vehicles

Office andOperationalEquipment Reprographics

CableTelevision

LiabilityInsurance

Workers'Compensation

UnemploymentInsurance

EmployeeBenefits

Policy,Administration,

& Legal Total

LiabilitiesCurrent liabilities

Accounts payable $ 1,777,855 1,405,935 275,367 9,611 49,343 5,168 3,502,785 24,390 5,861 5,500 1,071,089 8,132,904Contracts payable 234,126 77,005 - - - - - - - - 250,000 561,131Accrued payroll 118,774 43,165 37,181 - 28,600 18,471 3,200 2,644 - - 421,389 673,424Intergovernmental payables 43,683 24,788 19,053 - 12,976 9,855 2,715 2,231 - - 237,104 352,405Interest payable - 128,473 - - - - - - - 29,217 - 157,690Current portion of

Compensated absences - - - - - - - - - 8,080,618 - 8,080,618Outstanding claims - - - - - - 3,135,222 4,185,960 - - - 7,321,182Revenue bonds - 9,596,899 - - - - - - - 1,968,421 - 11,565,320Capital leases - 236,565 - - - - - - - - - 236,565Notes payable - 2,212,945 - - - - - - - - - 2,212,945

Total current liabilities 2,174,438 13,725,775 331,601 9,611 90,919 33,494 6,643,922 4,215,225 5,861 10,083,756 1,979,582 39,294,184

Long-term liabilities (net of currentportion)Compensated absences - - - - - - - - - 10,570,810 - 10,570,810Outstanding claims - - - - - - 14,286,377 17,137,310 - - - 31,423,687Revenue bonds - 23,695,988 - - - - - - - 4,487,719 - 28,183,707Original issue premium, net - 5,476,731 - - - - - - - - - 5,476,731Net pension liability 4,177,523 3,265,820 2,250,101 - 1,674,469 1,041,522 331,436 331,438 - - 23,988,849 37,061,158Total other post employment benefit

liability 800,100 404,720 140,095 - 90,284 977,554 - - - - 5,977,401 8,390,154Capital leases - 772,785 - - - - - - - - - 772,785Leased property deposits - 351,113 - - - - - - - - - 351,113Notes payable - 15,464,252 - - - - - - - - - 15,464,252

Total long-term liabilities 4,977,623 49,431,409 2,390,196 - 1,764,753 2,019,076 14,617,813 17,468,748 - 15,058,529 29,966,250 137,694,397

Total liabilities 7,152,061 63,157,184 2,721,797 9,611 1,855,672 2,052,570 21,261,735 21,683,973 5,861 25,142,285 31,945,832 176,988,581

Deferred inflows of resources -actuarialOther post employment benefit

related - actuarial 104,069 110,775 74,699 - 48,739 80,455 - - - - 988,261 1,406,998Pension related- actuarial 142,876 107,172 75,589 - 56,251 34,987 11,134 11,134 - - 805,871 1,245,014

Total deferred inflows ofresources 246,945 217,947 150,288 - 104,990 115,442 11,134 11,134 - - 1,794,132 2,652,012

Net position (deficit)Net investment in capital assets 18,827,821 166,224,902 14,560,266 737,049 - 1,588,543 339,741 - - - - 202,278,322Restricted for:

Debt service - 4,805,537 - - - - - - - 834,938 - 5,640,475Unrestricted 9,261,719 57,901,101 32,221,811 14,858,794 475,533 3,656,661 (9,938,435) (7,825,875) 209,753 43,977,208 (4,243,050) 140,555,220

Total net position (deficit) $ 28,089,540 228,931,540 46,782,077 15,595,843 475,533 5,245,204 (9,598,694) (7,825,875) 209,753 44,812,146 (4,243,050) 348,474,017

123

D-2

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Statement of Revenues, Expenses and Changes in Net Position

Internal Service FundsFor the year ended June 30, 2019

InformationTechnology Capital Assets Vehicles

Office andOperationalEquipment

Repro-graphics

CableTelevision

LiabilityInsurance

Workers'Compensation

Unemployment Insu

ranceEmployeeBenefits

Policy,Administration,

& Legal Eliminations Total

Operating revenuesCharges for services $14,207,387 25,360,551 9,746,891 929,331 2,678,992 1,342,062 7,237,834 6,547,841 56,071 11,924,249 40,023,114 (26,697,022) 93,357,301Rental, concessions and sales 19,200 4,091,387 - - - 56,329 10,350,000 - - 131,990 108 - 14,649,014

Total operating revenues 14,226,587 29,451,938 9,746,891 929,331 2,678,992 1,398,391 17,587,834 6,547,841 56,071 12,056,239 40,023,222 (26,697,022) 108,006,315

Operating expensesSalaries and employee benefits 3,112,713 1,884,834 1,418,451 - 900,662 767,384 169,948 211,280 56,072 4,213,421 12,780,787 (2,790,301) 22,725,251Maintenance and operations 12,399,116 8,078,339 4,802,039 258,785 1,855,350 1,345,517 7,981,526 529,017 - 4,500 26,410,888 (23,906,721) 39,758,356Insurance premiums,

settlements and provisions - - - - - - 8,362,054 4,146,314 - - - - 12,508,368Depreciation 1,519,894 7,755,284 2,406,139 218,871 - 350,128 10,535 - - - - - 12,260,851Amortization of bond premiums

and refunding - (231,422) - - - - - - - - - - (231,422)

Total operating expenses 17,031,723 17,487,035 8,626,629 477,656 2,756,012 2,463,029 16,524,063 4,886,611 56,072 4,217,921 39,191,675 (26,697,022) 87,021,404

Operating income (loss) (2,805,136) 11,964,903 1,120,262 451,675 (77,020) (1,064,638) 1,063,771 1,661,230 (1) 7,838,318 831,547 - 20,984,911

Nonoperating revenues(expenses)Use of money and property 495,322 1,814,398 915,518 360,248 61,625 133,841 247,147 296,569 5,219 1,628,461 601,690 - 6,560,038Net change in fair value of

investments 56,824 176,863 75,824 43,922 7,548 16,187 33,419 38,419 621 204,089 75,831 - 729,547Interest expenditures - (2,996,574) - - - - - - - (432,450) - - (3,429,024)Other revenue (expenses) 1,995 1,147,435 627,351 (26) 6 650,370 83 (2,814) (4) 13,756 693,297 - 3,131,449

Total nonoperatingrevenues (expenses) 554,141 142,122 1,618,693 404,144 69,179 800,398 280,649 332,174 5,836 1,413,856 1,370,818 - 6,992,010

Income (loss) beforetransfers (2,250,995) 12,107,025 2,738,955 855,819 (7,841) (264,240) 1,344,420 1,993,404 5,835 9,252,174 2,202,365 - 27,976,921

Transfers in 2,549,470 8,090,000 90,000 - 2,515 - 424,000 - - - 1,346,204 - 12,502,189Transfers out - - - - - - (200,000) - - - (642,960) - (842,960)

Change in net position 298,475 20,197,025 2,828,955 855,819 (5,326) (264,240) 1,568,420 1,993,404 5,835 9,252,174 2,905,609 - 39,636,150

Net position (deficit), July 1 27,791,065 208,734,515 43,953,122 14,740,024 480,859 5,509,444 (11,167,114) (9,819,279) 203,918 35,559,972 (7,148,659) - 308,837,867

Net position (deficit), June 30 $28,089,540 228,931,540 46,782,077 15,595,843 475,533 5,245,204 (9,598,694) (7,825,875) 209,753 44,812,146 (4,243,050) - 348,474,017

124

D-3

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Statement of Cash Flows

Internal Service Funds

For the year ended June 30, 2019

InformationTechnology Capital Assets Vehicles

Office andOperationalEquipment

Repro-graphics

CableTelevision

LiabilityInsurance

Workers'Compensation

Unemployment Insur

anceEmployeeBenefits

Policy,Administration, & Legal Total

Cash from operating activities:Cash received from interfund services $ 14,207,387 25,360,551 9,746,892 929,331 2,678,991 1,342,062 (3,112,166) 6,547,840 56,070 11,924,249 40,023,114 109,704,321Rents received under property leases 19,200 4,091,387 - - - 56,329 10,350,000 - - 131,990 108 14,649,014Cash payments to employees for services (3,238,532) (2,393,556) (1,984,321) - (1,265,735) (436,880) (232,039) (240,837) (56,071) (3,655,023) (15,524,994) (29,027,988)Cash payments for goods and services (14,512,445) (7,327,815) (5,122,544) (282,541) (1,880,159) (1,342,626) (7,592,007) (3,835,793) (1,705) (4,646) (25,714,331) (67,616,612)

Net cash provided (used in) byoperating activities (3,524,390) 19,730,567 2,640,027 646,790 (466,903) (381,115) (586,212) 2,471,210 (1,706) 8,396,570 (1,216,103) 27,708,735

Cash from noncapital financing activitiesGrant receipts and other revenue

(expenditures) 1,996 34,765 469,272 (26) 4 650,368 83 (2,814) (3) 13,758 693,295 1,860,698Cash received from other funds 2,549,470 8,090,000 90,000 - 2,515 - 424,000 - - - 1,346,204 12,502,189Cash paid to other funds - - - - - - (200,000) - - - (642,960) (842,960)

Net cash provided (used in) bynoncapital financing activities 2,551,466 8,124,765 559,272 (26) 2,519 650,368 224,083 (2,814) (3) 13,758 1,396,539 13,519,927

Cash from capital and related financingactivities:Proceeds from sale of property - 2,269,529 158,078 - - - - - - - - 2,427,607Acquisition and construction of (inflows

from) capital assets (5,151,562) (5,706,180) (936,104) (66,513) - (122,924) - - - - - (11,983,283)Principal received (payments) on interfund

advance - 986,486 634,786 - - - - - - - - 1,621,272Interest received (paid) on interfund advance - 508,243 327,045 - - - - - - - - 835,288Principal Interest received (paid) on capital

leases - (264,536) - - - - - - - - - (264,536)Principal payments on debt - (11,294,069) - - - - - - - (1,880,702) - (13,174,771)Interest payments on debt - (3,029,602) - - - - - - - (439,892) - (3,469,494)

Net cash provided (used in) by capitaland related financing activities (5,151,562) (16,530,129) 183,805 (66,513) - (122,924) - - - (2,320,594) - (24,007,917)

Cash from investing activities:Earnings (loss) on investments 482,528 1,334,125 596,631 359,666 61,487 133,014 253,127 300,589 5,170 1,635,132 608,068 5,769,537

Net cash provided (used in) byinvesting activities 482,528 1,334,125 596,631 359,666 61,487 133,014 253,127 300,589 5,170 1,635,132 608,068 5,769,537

Net increase (decrease) in cash andcash equivalents (5,641,958) 12,659,328 3,979,735 939,917 (402,897) 279,343 (109,002) 2,768,985 3,461 7,724,866 788,504 22,990,282

Cash and cash equivalents, July 1 21,402,986 47,425,873 22,169,984 13,838,905 2,484,260 5,273,943 11,275,858 10,969,608 210,765 61,822,189 22,285,502 219,159,873

Cash and cash equivalents, June 30 $ 15,761,028 60,085,201 26,149,719 14,778,822 2,081,363 5,553,286 11,166,856 13,738,593 214,226 69,547,055 23,074,006 242,150,155

(Continued)125

D-3-2

CITY OF BEVERLY HILLS, CALIFORNIA

Combining Statement of Cash Flows, Continued

Internal Service Funds

For the year ended June 30, 2019

InformationTechnology Capital Assets Vehicles

Office andOperationalEquipment

Repro-graphics

CableTelevision

LiabilityInsurance

Workers'Compensation

Unemployment Insur

anceEmployeeBenefits

Policy,Administration, & Legal Total

Reconciliation of operating income (loss) tonet cashprovided by operating activities:Operating income (loss) $ (2,805,135) 11,964,903 1,120,262 451,675 (77,020) (1,064,639) 1,063,771 1,661,230 (2) 7,838,318 831,547 20,984,910

Adjustments to reconcile operating income(loss)to net cash (used in) provided by operatingactivities:

Depreciation 1,519,894 7,755,284 2,406,139 218,871 - 350,128 10,535 - - - - 12,260,851Amortization of bond premiums and

refunding - (231,422) - - - - - - - - - (231,422)Changes in assets and liabilities:

Increase (decrease) in other post-employment benefits (277,176) (628,584) (651,372) - (426,368) 296,014 (65,956) (32,978) - - (3,641,124) (5,427,544)

Increase (decrease) in net pensionliabilities (196,364) (147,294) (103,887) - (77,310) (48,087) (15,303) (15,302) - - (1,107,565) (1,711,112)

Increase (decrease) in deferred inflows (64,904) (52,364) (39,668) - (29,783) (1,180) (12,237) (9,234) - - (338,507) (547,877)(Increase) decrease in deferred outflows 391,358 308,538 225,112 - 165,528 81,652 32,161 31,019 - - 2,276,456 3,511,824(Increase) decrease in receivables 4,800 (14,111) (28,205) - - - - - - - 40,729 3,213(Increase) decrease in inventories - - 62,980 - 2,537 - - - - - - 65,517(Increase) decrease in prepaid expenses - - - - - - 142,133 - - - - 142,133Increase (decrease) in accounts payable (2,036,506) 687,589 (370,591) (23,756) (37,409) (4,904) (585,760) (2,093) (1,705) (146) 456,995 (1,918,286)Increase (decrease) in intergovernmental

payable 34,026 21,591 15,313 - 10,062 7,796 2,277 1,579 - - 198,834 291,478Increase (decrease) in accrued payroll 21,268 10,982 3,944 - 2,860 2,105 (756) (3,062) - 558,398 66,532 662,271Increase (decrease) in outstanding claims - - - - - - (1,157,077) 840,051 - - - (317,026)Increase (decrease) in customer deposits (115,651) 55,455 - - - - - - - - - (60,196)

Total adjustments (719,255) 7,765,664 1,519,765 195,115 (389,883) 683,524 (1,649,983) 809,980 (1,705) 558,252 (2,047,650) 6,723,824

Net cash provided (used) by operatingactivities: $ (3,524,390) 19,730,567 2,640,027 646,790 (466,903) (381,115) (586,212) 2,471,210 (1,707) 8,396,570 (1,216,103) 27,708,734

Significant noncash and investing andfinancing activity:

- Amortization of bond premiums, discounts,and deferred amounts on refunding $ - (231,422) - - - - - - - - - (231,422)

- Value of capital asset under lease (note 8) $ - 1,009,350 - - - - - - - - - 1,009,350- Change in fair value of nonpooled

investments $ 56,824 176,863 75,824 43,922 7,548 16,187 33,419 38,419 621 204,089 75,831 729,547

126

CAPITAL ASSETSUSED IN THE

OPERATION OFGOVERNMENTAL

FUNDS

This section of the CAFR provides additional informationregarding the infrastructure and fine art capital assets used inthe City’s governmental fund operations. These assets arereported only in the governmental activities column of thegovernment-wide Statement of Net Assets. In addition to theinformation about such assets provided in the notes to the basicfinancial statements, this section provides information on thesource of funding for the assets, the function and activity towhich the assets are charged and changes in such assets byfunction and activity.

E-1

CITY OF BEVERLY HILLS, CALIFORNIA

Capital Assets Used in Operation of Governmental Funds

Comparative Schedule by Source1

June 30, 2019 with Comparative Amounts for July 01, 2018

2019 2018

Governmental funds capital assets by type, function and activityLand $ 19,559,986 19,559,986Construction in progress 8,210,586 34,118,991Infrastructure 175,661,310 143,858,226Buildings 7,063,777 7,063,777Improvements other than buildings 38,558,770 33,692,735Machinery and equipment 6,170,174 5,334,749Less accumulated depreciation (80,297,670) (73,308,856)

Net infrastructure assets - public works - streets and subdrains 147,156,361 116,640,631Fine art collection 3,789,825 3,062,514

Total governmental funds capital assets by type, function and activity $ 178,716,758 173,382,122

Investment in governmental capital assets by source2012 Lease Revenue Bonds $ 35,743,352 34,676,424Capital projects general revenues 53,615,027 52,014,637General fund revenues 26,807,514 26,007,318Special revenue funds revenues 62,550,865 60,683,743

Total investment in governmental capital assets by source $ 178,716,758 173,382,122

1. This schedule presents only the capital asset balances related to governmental funds, and not to capital assets ofgovernmental activities reported in the internal service funds. Generally, the capital assets of internal service fundsare included in governmental activities in the statement of net position.

130

E-2

CITY OF BEVERLY HILLS, CALIFORNIA

Capital Assets Used in the Operation of Governmental Funds

Schedule by Function and Activity

June 30, 2019

Function and ActivityConstructionin Progress Infrastructure

Fine ArtCollection Land Building

ImprovementsOther thanBuildings

Machineryand

Equipment Total

General Government-Land $ - - - 19,559,986 - - - 19,559,986Construction in progress 8,210,586 - - - - - - 8,210,586General government - art and culture - - 3,789,825 - - - - 3,789,825General government - improvements other than buildings - - - - - 38,558,770 - 38,558,770Public works - streets and subdrains - 175,661,310 - - 7,063,777 - 6,170,174 188,895,261

Total $ 8,210,586 175,661,310 3,789,825 19,559,986 7,063,777 38,558,770 6,170,174 259,014,428

131

E-3

CITY OF BEVERLY HILLS, CALIFORNIA

Capital Assets Used in the Operation of Governmental Funds

Schedule of Changes by Function and Activity

June 30, 2019

Function and ActivityBalance

July 01, 2018 Additions Deletions TransfersBalance

June 30, 2019

Land $ 19,559,986 - - - 19,559,986Construction in progress 34,118,990 12,311,453 - (38,219,857) 8,210,586

Total capital assets not beingdepreciated 53,678,976 12,311,453 - (38,219,857) 27,770,572

General governmentArt and culture - fine art collection 3,062,515 - - 727,311 3,789,826

Public worksBuildings 7,063,777 - - - 7,063,777Infrastructure 143,858,226 - - 31,803,084 175,661,310Improvements other than buildings 33,692,735 - - 4,866,034 38,558,769Machinery and equipment 5,334,749 11,997 - 823,428 6,170,174Less accummulated depreciation (73,308,856) (6,988,814) - - (80,297,670)

Total public works 116,640,631 (6,976,817) - 37,492,546 147,156,360

Total $ 173,382,122 5,334,636 - - 178,716,758

132

F-1

CITY OF BEVERLY HILLS, CALIFORNIA

Supplementary Information

City of Beverly Hills Active Adult ClubStatement of Changes in Assets and Liabilities of Agency Fund

For the Year Ended June 30, 2019

Balance Additions Deletions Balance

AssetsCash and cash equivalents $ 20,157 2,453 (22,610) -

Total assets 20,157 2,453 (22,610) -

LiabilitiesDeposit payable 20,157 2,453 (22,610) -

Total liabilities $ 20,157 2,453 (22,610) -

*See accompanying notes to basic financial statements (page 49-Fiduciary Funds)

134

City of Beverly Hills, CaliforniaFor the Year Ended June 30, 2019

CONTENTSStatement/ Exhibit Page

STATISTICAL SECTION (UNAUDITED)

Financial Trends Information:

Net Position by Component................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-1 138

Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-2 139

Fund Balances of Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-3 142

Changes in Fund Balances of Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-4 143

Revenue Capacity Information:

Revenue Bases and Rates of Business Tax................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-5 144

Principal Business Taxpayers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-6 152

Property Taxes Levies and Collections................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-7 153

Assessed Actual Value of Taxable Property................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-8 154

Property Tax Rates for Direct and Overlapping Government................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-9 155

Property Tax Levies for All Overlapping Governments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-10 156

Principal Property Taxpayers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-11 157

Debt Capacity Information:

Ratios of Outstanding Debt by Type................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-12 158

Computation of Direct and Overlapping Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-13 159

Legal Debt Margin Information................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-14 160

Ratios of Annual Debt Service Expenditures of Governmental Funds to Total Governmental FundExpenditures and Ratio of Total Debt Service Expenditures to Total Governmental Activities Expenses................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-15 161

Ratios of Debt Service Per Capita................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-16 162

Water Enterprise Fund Long-Term Debt Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-17 163

Wastewater Enterprise Fund Long-Term Debt Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-18 164

Demographic and Economic Information:

Demographic and Economic Statistics................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-19 165

Demographic Statistical Data................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-20 166

Operating Information:

Full-time Equivalent City Government Employees by Function................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-21 168

Operating Indicators................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-22 169

Capital Asset Statistics by Function................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................S-23 170

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S-1

CITY OF BEVERLY HILLS, CALIFORNIA

Net Position by Component

Last Ten Fiscal Years(Accrual Basis of Accounting)

(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Governmental activitiesNet investment in capital assets $ 170,538,512 163,965,905 185,561,158 199,111,492 221,176,599 240,366,434 244,994,531 274,949,895 336,226,517 352,326,597Restricted 69,500,607 34,272,483 29,263,694 34,012,454 33,527,212 21,694,531 42,599,515 40,981,790 47,375,441 46,480,281Unrestricted 207,130,349 276,815,819 296,731,055 303,170,510 324,529,636 182,250,500 217,503,981 250,974,308 121,592,424 166,010,203

Total governmental activities net position 447,169,468 475,054,207 511,555,907 536,294,456 579,233,447 444,311,465 505,098,027 566,905,993 505,194,382 564,817,081

Business-type activitiesNet Investment in capital assets 158,450,102 198,616,368 210,325,789 162,095,506 172,210,710 143,390,063 157,277,088 163,091,182 166,267,892 166,782,970Restricted 10,172,350 10,175,732 9,069,847 6,545,159 6,500,318 9,401,817 9,278,755 9,301,502 6,311,827 1,400,812Unrestricted (1,066,250) (28,275,807) (21,519,141) 53,331,275 69,096,252 93,900,263 107,348,339 126,358,510 134,957,215 156,193,111

Total business-type activities net position 167,556,202 180,516,293 197,876,495 221,971,940 247,807,280 246,692,143 273,904,182 298,751,194 307,536,934 324,376,893

Primary governmentNet investment in capital assets 328,988,614 362,582,273 395,886,947 361,206,998 393,387,309 383,756,497 402,271,619 438,041,077 502,494,409 519,109,567Restricted 79,672,957 44,448,215 38,333,541 40,557,613 40,027,530 31,096,348 51,878,270 50,283,292 53,687,268 47,881,093Unrestricted 206,064,099 248,540,012 275,211,914 356,501,785 393,625,888 276,150,763 324,852,320 377,332,818 256,549,639 322,203,314

Total primary government net position $ 614,725,670 655,570,500 709,432,402 758,266,396 827,040,727 691,003,608 779,002,209 865,657,187 812,731,316 889,193,974

138

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CITY OF BEVERLY HILLS, CALIFORNIA

Changes in Net Position

Last Ten Fiscal Years(Accrual Basis of Accounting)

(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Program Expenses

Governmental activities:General government $ 7,160,618 6,908,383 8,906,226 10,558,448 8,944,074 7,389,001 7,024,395 7,972,572 4,971,639 5,322,726Public safety 85,792,885 94,175,921 92,347,684 96,008,043 103,512,793 109,831,170 111,452,642 123,123,520 145,288,299 138,621,181Public service 17,366,155 19,915,311 19,760,641 26,938,269 29,748,041 31,567,699 36,674,155 35,529,629 36,330,792 53,558,379Culture and recreation 44,365,466 46,237,415 41,918,369 42,982,186 49,380,401 48,715,791 50,042,916 38,108,091 58,989,988 58,169,189Interest on long-term debt 7,344,177 8,222,287 8,692,906 7,886,202 7,131,974 6,823,570 7,098,743 7,953,577 5,567,671 5,071,885

Total governmental activities expenses 162,029,301 175,459,317 171,625,826 184,373,148 198,717,283 204,327,231 212,292,851 212,687,389 251,148,389 260,743,360

Business-type activities:Water 23,693,096 27,099,129 27,818,745 29,457,542 32,373,970 31,609,747 30,923,106 31,620,268 33,644,446 36,916,363Parking facilities 19,439,356 23,552,635 18,505,054 17,527,741 17,086,428 16,555,653 17,472,935 16,931,389 18,978,227 19,947,990Solid waste 13,865,053 13,892,957 12,982,426 13,925,218 14,761,794 15,004,536 14,476,276 14,456,236 15,323,417 15,512,448Wastewater 6,323,201 6,449,692 10,033,862 10,847,548 9,983,554 8,612,829 8,660,985 8,907,108 8,710,590 7,165,604Stormwater 2,781,886 3,136,667 2,579,803 2,806,633 2,835,744 3,202,152 3,742,551 3,539,418 3,733,717 5,095,683Parking authority - - 23,486,489 29,942,501 29,851,452 29,729,550 30,436,790 30,367,308 30,074,378 29,789,035

Total business-type activities expenses 66,102,592 74,131,080 95,406,379 104,507,183 106,892,942 104,714,467 105,712,643 105,821,727 110,464,775 114,427,123

Total primary government expenses $ 228,131,893 249,590,397 267,032,205 288,880,331 305,610,225 309,041,698 318,005,494 318,509,116 361,613,164 375,170,483

139

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CITY OF BEVERLY HILLS, CALIFORNIA

Changes in Net Position, Continued

Last Ten Fiscal Years(Accrual Basis of Accounting)

(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Program Revenues

Governmental activities:Charges for services:

General government $ 2,105,290 1,277,077 1,229,863 1,242,289 1,201,032 285,630 311,311 1,015,109 2,717,063 7,226,723Public safety 27,733,231 17,462,244 25,384,542 29,207,003 21,781,966 21,377,440 21,053,219 33,198,984 17,473,457 21,098,498Public service 11,649,975 27,036,465 19,687,499 19,721,555 31,031,886 37,956,672 32,840,728 23,434,777 22,803,185 21,626,953Culture and recreation 6,996,873 8,565,374 8,834,940 8,807,283 12,585,113 12,715,281 12,974,836 12,662,782 7,968,270 9,824,103

Operating grants and contributions 3,702,698 4,858,326 4,068,083 4,337,875 2,943,449 1,112,635 552,034 974,451 791,009 1,186,317Capital grants and contributions 1,506,992 1,385,363 4,521,907 1,904,545 3,034,864 6,959,489 3,700,289 1,513,504 4,523,635 4,495,214

Total governmental activities program revenues 53,695,059 60,584,849 63,726,834 65,220,550 72,578,310 80,407,147 71,432,417 72,799,607 56,276,619 65,457,808

Business-type activities:Charges for services:

Water 24,676,468 31,819,782 31,124,854 34,945,035 38,606,049 36,067,148 37,994,798 34,488,215 38,428,942 37,652,208Parking facilities 20,933,475 25,075,328 23,921,578 22,929,670 23,437,384 23,820,621 24,314,848 23,991,002 23,933,989 23,477,057Solid waste 13,369,393 14,577,120 14,751,733 15,427,363 15,285,046 15,905,463 15,499,991 16,359,955 15,361,655 15,478,683Wastewater 12,805,556 13,005,741 12,700,804 13,210,209 13,500,587 13,125,432 12,928,324 12,694,915 12,650,620 12,687,796Stormwater 1,845,504 1,824,798 1,774,698 1,820,854 1,760,478 1,729,217 1,726,816 1,873,689 1,829,474 1,786,592Parking authority - - 17,957,515 24,644,203 26,606,989 27,873,951 29,139,753 30,296,670 29,643,084 29,538,317

Operating grants and contributions 2,928 17,421 - 9,469 9,312 - - - - -Capital grants and contributions - 373,040 387,198 200,951 300,647 223,537 - 301,619 302,591 373,525

Total business-type activities program revenues 73,633,324 86,693,230 102,618,380 113,187,754 119,506,492 118,745,369 121,604,530 120,006,065 122,150,355 120,994,178

Total primary government program revenues $ 127,328,383 147,278,079 166,345,214 178,408,304 192,084,802 199,152,516 193,036,947 192,805,672 178,426,974 186,451,986

Net (expense) revenue:Governmental activities $ (108,334,242) (114,874,468) (107,898,992) (119,152,598) (126,138,973) (123,920,084) (140,860,434) (139,887,782) (194,871,770) (195,285,552)Business-type activities 7,530,732 12,562,150 7,212,001 8,680,571 12,613,550 14,030,902 15,891,887 14,184,338 11,685,580 6,567,055

Total primary government net exepense $ (100,803,510) (102,312,318) (100,686,991) (110,472,027) (113,525,423) (109,889,182) (124,968,547) (125,703,444) (183,186,190) (188,718,497)

(Continued)

140

S-2-3

CITY OF BEVERLY HILLS, CALIFORNIA

Changes in Net Position, Continued

Last Ten Fiscal Years(Accrual Basis of Accounting)

(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

General Revenues and Other Changes in NetPosition:

Governmental activities:Taxes:

Business $ 35,481,235 33,993,715 37,011,611 37,773,711 40,563,115 43,792,802 46,957,697 48,797,465 51,672,940 52,057,454Property 42,859,199 41,814,780 42,622,470 45,893,196 48,168,370 53,577,294 58,142,101 61,540,439 68,668,253 73,304,686Sales 19,671,342 22,052,861 23,093,786 26,820,826 31,151,214 31,338,893 34,927,352 32,663,323 34,016,780 37,410,459Transient occupancy 23,447,458 26,594,808 29,789,182 31,085,808 35,397,160 36,658,589 39,989,282 43,538,369 49,120,276 50,023,265Other 1,793,385 3,706,048 3,406,104 4,743,455 8,533,664 9,275,967 7,798,350 6,138,447 5,744,693 5,527,801

Grants and contributions not restricted to specificprograms 419,910 575,314 409,274 667,516 216,239 - - - - -

Unrestricted investment earnings 11,492,231 11,094,647 11,280,401 12,297,202 6,906,433 9,570,102 8,610,829 11,128,342 12,939,217 18,178,923Net change in fair value of investments 1,479,844 (33,470) (563,322) (4,575,516) 3,377,923 (854,729) 451,950 (1,407,492) (1,543,325) 1,584,187Miscellaneous 1,834,044 1,949,835 1,906,938 1,233,050 6,460,012 3,565,509 10,737,761 6,143,028 10,032,984 20,566,467Transfers 682,194 1,010,669 444,249 (7,925,000) (5,400,000) 7,575,206 (5,968,326) (6,848,598) (6,227,202) (3,745,548)Contributions to parking authority - - (5,000,000) (4,123,100) (5,000,000) - - - - -

Total governmental activities 139,160,842 142,759,207 144,400,693 143,891,148 170,374,130 194,499,633 201,646,996 201,693,323 224,424,616 254,907,694

Business-type activities:Unrestricted investment income 1,361,396 1,506,869 1,231,589 1,371,810 1,500,919 1,692,292 1,730,456 1,800,536 2,432,251 5,133,077Net change in fair value of investments 505,896 (132,624) (192,556) (1,283,053) 456,735 (276,237) 128,065 (420,922) (524,592) 569,813Gain on sale of capital assets - - 931 - - - - - - -Miscellaneous 34,461 34,365 4,552,486 3,278,017 2,563,845 5,206,971 3,493,305 2,434,453 1,064,080 1,394,279Transfers (682,194) (1,010,669) (444,249) 7,925,000 5,400,000 (7,575,206) 5,968,326 6,848,598 6,227,202 3,745,548Contributions to parking authority - - 5,000,000 4,123,100 5,000,000 - - - - -

Total business-type activities 1,219,559 397,941 10,148,201 15,414,874 14,921,499 (952,180) 11,320,152 10,662,665 9,198,941 10,842,717Total primary government $ 140,380,401 143,157,148 154,548,894 159,306,022 185,295,629 193,547,453 212,967,148 212,355,988 233,623,557 265,750,411

Change in Net PositionGovernmental activities $ 30,826,600 27,884,739 36,501,701 24,738,550 44,235,157 70,579,549 60,786,562 61,805,541 29,552,846 59,622,142Business-type activities 8,750,291 12,960,091 17,360,202 24,095,445 27,535,049 13,078,722 27,212,039 24,847,003 20,884,521 17,409,772

Total primary government $ 39,576,891 40,844,830 53,861,903 48,833,995 71,770,206 83,658,271 87,998,601 86,652,544 50,437,367 77,031,914

(Continued)

141

S-3

CITY OF BEVERLY HILLS, CALIFORNIA

Fund Balances of Governmental Funds

Last Ten Fiscal Years(Modified Accrual Basis of Accounting)

(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

General fundNonspendable $ 24,369,188 24,194,752 23,581,899 23,055,755 19,029,646 15,566,903 14,709,108 12,922,608 11,239,394 9,478,892Restricted 32,000,000 - - - - - - - - -Committed 16,109,814 8,480,041 10,363,227 12,167,283 11,163,835 4,384,449 4,612,458 8,505,704 4,409,845 182,963,395Assigned 3,284,204 1,447,295 3,300,000 2,000,000 2,000,000 5,000,000 5,000,000 5,000,000 5,000,000 8,404,222Unassigned 21,801,773 63,862,068 69,963,868 80,691,045 96,198,353 124,429,495 156,972,354 159,097,923 191,979,440 36,543,325

Total general fund $ 97,564,979 97,984,156 107,208,994 117,914,083 128,391,834 149,380,847 181,293,920 185,526,235 212,628,679 237,389,834

Capital projects fundCommitted - - - - - - 42,692,855 45,529,986 36,061,417 25,683,497Restricted 20,974,922 15,967,270 15,324,339 18,595,979 19,957,064 40,057,473 - - - -

All other governmental fundsUnreserved, reported in:

Nonspendable 7,951,613 81,381 81,381 81,381 81,381 81,381 81,381 81,381 81,381 4,679,089Restricted 11,415,127 13,256,219 11,868,339 13,432,345 15,634,435 19,860,439 41,219,400 39,188,949 42,094,228 36,680,165Committed 3,803,123 12,008,977 19,591,545 21,051,608 20,788,506 28,298,098 11,985,210 12,559,861 13,665,024 18,930,592Assigned 4,020,109 8,780,214 2,425,916 2,293,685 - - - - - 1,161,405Unassigned 5,887,748 (91,578) (40,810) (86,023) (171,763) (143,396) (40,809) 513 - -

Total all other governmental funds $ 33,077,720 34,035,213 33,926,371 36,772,996 36,332,559 48,096,522 53,245,182 51,830,704 55,840,633 61,451,251

142

S-4

CITY OF BEVERLY HILLS, CALIFORNIA

Changes in Fund Balances of Governmental Funds

Last Ten Fiscal Years(Modified Accrual Basis of Accounting)

(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

RevenuesTaxes $ 123,240,516 128,393,179 136,206,128 146,805,031 165,424,595 171,554,132 188,407,028 193,028,127 210,799,153 214,820,325Licenses and permits 9,591,105 12,123,447 13,153,624 15,218,056 17,347,602 25,226,146 17,470,831 19,966,043 18,676,021 23,949,987Intergovernmental 5,429,676 6,588,277 8,543,974 6,339,981 5,649,426 7,847,354 4,358,120 3,624,240 5,342,923 5,600,740Charges for services 10,642,968 10,266,039 10,593,871 10,818,820 10,993,040 10,318,181 12,027,647 14,068,069 15,060,571 14,517,557Fines, forfeitures and penalties 10,127,770 9,532,623 7,353,794 7,508,395 7,379,490 6,899,618 6,869,208 7,969,316 7,199,845 6,971,366Use of money and property 6,479,178 7,494,753 6,985,143 6,587,605 6,796,333 6,727,662 5,833,594 7,620,968 8,599,057 12,033,452Net change in fair value of investments 661,198 143,625 (269,846) (2,039,739) 439,314 (488,242) 216,588 (791,860) - 854,642Contribution in aid of construction - - - 131,255 - - - - - -Miscellaneous 973,399 863,170 1,404,027 961,257 2,639,384 2,967,254 6,964,328 4,986,192 11,052,769 10,994,763

Total revenues 167,145,810 175,405,113 183,970,715 192,330,661 216,669,184 231,052,105 242,147,344 250,471,095 276,730,339 289,742,832

ExpendituresCurrent

General government 5,876,352 5,625,097 6,971,342 7,988,423 8,646,424 7,226,210 6,971,628 5,141,090 4,376,115 4,646,264Public safety 82,109,842 82,213,794 88,313,546 88,275,098 92,773,205 97,018,595 100,820,863 112,988,621 120,803,229 129,545,352Public service 19,164,931 20,807,903 21,368,981 24,961,697 25,968,501 26,964,646 31,724,575 25,723,626 30,344,841 33,860,593Culture and recreation 41,050,006 38,936,209 38,517,596 39,009,248 43,456,298 43,430,291 45,486,677 46,041,801 53,401,547 58,204,981

Debt serviceInterest expenditures 1,512,625 1,500,955 1,623,429 1,307,007 1,307,006 1,305,011 1,302,604 1,287,276 1,272,792 1,258,998Principal retirement 333,697 344,461 719,104 - 46,064 63,977 353,154 360,832 376,186 383,863

Capital outlay 7,620,966 16,018,334 10,891,848 4,521,352 17,337,787 6,706,261 8,383,964 17,208,971 34,451,068 33,898,612

Total expenditures 157,668,419 165,446,753 168,405,846 166,062,825 189,535,285 182,714,991 195,043,465 208,752,217 245,025,778 261,798,663

Excess of revenues over expenditures 9,477,391 9,958,360 15,564,869 26,267,836 27,133,899 48,337,114 47,103,879 41,718,878 31,704,561 27,944,169

Other financing sources (uses)Transfers in 2,068,840 1,500,000 2,094,366 300,000 200,000 12,390,610 200,000 219,178 196,149 30,548,371Proceeds of bonds - - 32,665,980 - - - - - - -Insurance recoveries 10,055 45,388 3,052 5,286 - - - - - -Transfers out (5,618,549) (15,134,730) (2,124,637) (5,613,744) (10,935,500) (8,009,731) (7,606,764) (36,283,598) (9,393,486) -Payment to bond escrow agent - - (34,730,565) (12,924) - - - - - -Contributions to parking authority - - (5,000,000) (4,123,100) (5,000,000) - - - - -

Total other financing sources (uses) (3,539,654) (13,589,342) (7,091,804) (9,444,482) (15,735,500) 4,380,879 (7,406,764) (36,064,420) (9,197,337) 30,548,371

Net changes in fund balances $ 5,937,737 (3,630,982) 8,473,065 16,823,354 11,398,399 52,717,993 39,697,115 5,654,458 22,507,224 58,492,540

Debt services as a percentage of noncapitalexpenditures %1.23 %1.23 %1.49 %0.81 %0.79 %0.78 %0.89 %0.86 %0.78 %0.72

143

S-5

CITY OF BEVERLY HILLS, CALIFORNIA

Revenue Bases and Rates of Business Tax

Last Ten Fiscal Years(Unaudited)

Fiscal Year

Total RevenueClassification A

Tax Due

Total RevenueClassification A

Tax Paid

Total RevenueClassification APercentage Paid

Total DirectClassification ABase Tax Rate1

Total DirectClassification AAdditional Tax

Rate1

2019 $ 1,752,015 1,924,559 %109.85 274.00 0.05713

2018 1,674,386 1,827,190 109.13 264.00 0.55150

2017 1,568,775 1,658,464 105.72 259.00 0.05418

2016 1,723,676 1,756,014 101.88 255.00 0.05333

2015 1,437,933 1,559,193 108.43 252.00 0.05265

2014 1,437,127 1,550,713 107.90 251.00 0.05244

2013 1,307,490 1,422,638 108.81 245.92 0.05136

2012 1,173,725 1,379,716 117.55 238.76 0.05000

2011 1,304,048 1,706,240 130.84 237.10 0.05000

2010 1,113,626 1,573,720 141.31 235.00 0.04907

1. Business tax classifications and associated rate structures:

Classification A - Business services:

-Base tax and first 2080 hours of employee payroll

-Each additional hour of employee payroll

(Continued)144

S-5-2

CITY OF BEVERLY HILLS, CALIFORNIA

Revenue Bases and Rates of Business Tax, Continued

Last Ten Fiscal Years(Unaudited)

Fiscal Year

Total RevenueClassification B

Tax Due

Total RevenueClassification B

Tax Paid

Total RevenueClassification BPercentage Paid

Total RevenueClassification BMinimum Tax

Rate1

Total RevenueClassification BAdditional Tax

Rate1

2019 $ 6,475,767 6,458,368 %99.73 75.00 0.00125

2018 5,480,547 5,646,189 103.02 75.00 0.00125

2017 5,436,306 5,656,303 104.05 75.00 0.00125

2016 5,370,107 5,451,885 101.52 75.00 0.00125

2015 5,000,945 5,165,534 103.29 75.00 0.00125

2014 4,408,701 4,613,476 104.64 75.00 0.00125

2013 4,393,217 4,518,387 102.85 75.00 0.00125

2012 3,778,207 3,974,656 105.20 75.00 0.00125

2011 3,418,895 3,776,219 110.45 75.00 0.00125

2010 3,074,933 3,227,558 104.96 75.00 0.00125

1. Business tax classifications and associated rate structures:

Classification B - Retail, wholesale & manufacturing:

-Minimum

-Per $1.00 of gross receipts over $60,000

(Continued)145

S-5-3

CITY OF BEVERLY HILLS, CALIFORNIA

Revenue Bases and Rates of Business Tax, Continued

Last Ten Fiscal Years(Unaudited)

Fiscal Year

Total RevenueClassification C

Tax Due

Total RevenueClassification C

Tax Paid

Total RevenueClassification CPercentage Paid

Total RevenueClassification CBase Tax Rate1

Total RevenueClassification C

ProfessionalPayroll Tax Rate1

Total RevenueClassificationC-1 Tax Due

Total RevenueClassificationC-1 Tax Paid

Total RevenueClassification C-1Non-ProfessionalPayroll Tax Rate1

2019 $ 5,124,827 6,079,952 %118.64 1,517.00 0.72933 980,018 955,125 0.14644

2018 4,614,645 4,791,106 103.82 1,464.00 0.70385 880,824 986,078 0.14135

2017 4,590,099 4,807,666 104.74 1,438.00 0.69135 885,899 936,553 0.13885

2016 4,658,568 4,748,174 101.92 1,415.00 0.68030 862,308 879,081 0.13666

2015 4,443,306 4,650,781 104.67 1,397.00 0.67163 828,873 869,353 0.13491

2014 4,468,221 4,750,578 106.32 1,391.00 0.66875 856,200 880,517 0.13437

2013 4,090,087 4,507,260 110.20 1,362.59 0.65514 605,497 662,471 0.13161

2012 4,256,916 4,517,034 106.11 1,322.90 0.63606 847,414 915,264 0.12778

2011 4,054,866 4,469,390 110.22 1,313.70 0.63164 850,549 1,000,304 0.12689

2010 4,092,325 4,392,554 107.34 1,302.00 0.62601 846,522 857,807 0.12576

1. Business tax classifications and associated rate structures:

Classification C - Professionals

-Base and first 2080 hours of professional payroll or billed hours

-Each additional hour of professional/semiprofessional payroll or billed hours

Classification C-1

-Each hour of non-professional employee payroll

(Continued)146

S-5-4

CITY OF BEVERLY HILLS, CALIFORNIA

Revenue Bases and Rates of Business Tax, Continued

Last Ten Fiscal Years(Unaudited)

Fiscal Year

Total RevenueClassification D

Tax Due

Total RevenueClassification D

Tax Paid

Total RevenueClassification DPercentage Paid

Total RevenueClassification DMinimum Tax

Rate1

Total RevenueClassification DAdditional Tax

Rate1

2019 $ 471,897 472,670 %100.16 255.00 0.00300

2018 436,815 442,213 101.24 255.00 0.00300

2017 313,777 313,778 100.00 255.00 0.00300

2016 338,313 363,006 107.30 255.00 0.00300

2015 466,579 466,585 100.00 255.00 0.00300

2014 244,963 389,180 158.87 255.00 0.00300

2013 137,869 92,639 67.19 255.00 0.00300

2012 437,905 446,570 101.98 255.00 0.00300

2011 397,325 397,325 100.00 255.00 0.00300

2010 409,032 409,106 100.02 255.00 0.00300

1. Business tax classifications and associated rate structures:

Classification D - Used car sales (not associated with new car dealership)

-Minimum tax

-Each $1.00 of gross receipts over $85,000

(Continued)147

S-5-5

CITY OF BEVERLY HILLS, CALIFORNIA

Revenue Bases and Rates of Business Tax, Continued

Last Ten Fiscal Years(Unaudited)

Fiscal Year

Total RevenueClassification E

Tax Due

Total RevenueClassification E

Tax Paid

Total RevenueClassification EPercentage Paid

Total RevenueClassification E

Tax Rate1

Total RevenueClassification F

Tax Due

Total RevenueClassification F

Tax Paid

Total RevenueClassification FPercentage Paid

Total RevenueClassification F

Tax Rate1

2019 $ 7,515,176 7,691,830 %102.35 0.0120 20,197,183 20,467,469 101.34 0.02350

2018 7,427,940 7,934,806 106.82 0.0120 20,609,269 21,065,439 102.21 0.02350

2017 6,662,471 6,792,985 101.96 0.0120 19,281,130 19,539,032 101.34 0.02350

2016 6,253,269 6,348,564 101.52 0.0120 19,435,390 19,465,592 100.16 0.02350

2015 5,806,709 5,888,497 101.41 0.0120 17,025,423 17,939,391 105.37 0.02350

2014 5,452,036 5,574,758 102.25 0.0120 15,962,822 16,363,939 102.51 0.02350

2013 5,050,417 5,095,575 100.89 0.0120 15,414,117 15,436,711 100.15 0.02350

2012 4,925,774 5,062,993 102.79 0.0120 14,964,157 15,245,669 101.88 0.02350

2011 4,294,773 4,496,336 104.69 0.0120 13,711,498 14,291,742 104.23 0.02350

2010 4,060,778 4,195,169 103.31 0.0120 14,201,325 14,577,480 102.65 0.02350

1. Business tax classifications and associated rate structures:

Classification E - Residential property rental - each $1.00 of gross receipts

Classification F - Commercial property rental - each $1.00 of gross receipts

(Continued)148

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CITY OF BEVERLY HILLS, CALIFORNIA

Revenue Bases and Rates of Business Tax, Continued

Last Ten Fiscal Years(Unaudited)

Fiscal Year

Total RevenueClassification G

Tax Due

Total RevenueClassification G

Tax Paid

Total RevenueClassification GPercentage Paid

Total RevenueClassification G

Tax Rate1

Total RevenueClassification G1

Tax Due

Total RevenueClassification G1

Tax Paid

Total RevenueClassification G1Percentage Paid

Total RevenueClassification G1

Tax Rate1

2019 $ 7,845,392 8,451,431 %107.72 0.00350 250,769 275,782 109.97 0.00100

2018 7,906,480 8,072,343 102.10 0.00350 279,462 299,786 107.27 0.00100

2017 7,443,846 8,386,520 112.66 0.00350 154,223 214,003 138.76 0.00100

2016 7,220,710 7,283,008 100.86 0.00350 55,364 70,780 127.84 0.00100

2015 6,204,531 6,410,967 103.33 0.00350 229,029 236,412 103.22 0.00100

2014 5,545,007 5,782,468 104.28 0.00350 182,722 207,414 113.51 0.00100

2013 5,335,527 5,961,227 111.73 0.00350 142,558 155,039 108.76 0.00100

2012 3,662,304 5,319,203 145.24 0.00350 155,462 344,097 221.34 0.00100

2011 3,797,779 4,205,601 110.74 0.00350 94,523 175,133 185.28 0.00100

2010 3,726,945 4,018,195 107.81 0.00350 116,591 175,133 150.21 0.00100

1. Business tax classifications and associated rate structures:

Classification G - Lenders, brokers, real estate brokers/offices - each $1.00 of gross receipts

Classification G1 - Real estate agents - each $1.00 of gross receipts

(Continued)149

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CITY OF BEVERLY HILLS, CALIFORNIA

Revenue Bases and Rates of Business Tax, Continued

Last Ten Fiscal Years(Unaudited)

Fiscal Year

Total RevenueClassification O.1

Tax Due

Total RevenueClassification O.1

Tax Paid

Total RevenueClassification O.1Percentage Paid

Total RevenueClassification O.1

Minimum TaxRate1

Total RevenueClassification O.1

Additional TaxRate1

2019 $ 128,777 217,893 %169.20 2,231.00 0.16480

2018 122,811 123,252 100.36 2,153.00 0.15907

2017 91,062 115,417 126.75 2,115.00 0.15626

2016 110,753 110,753 100.00 2,082.00 0.15380

2015 78,280 78,280 100.00 2,055.00 0.15183

2014 61,855 61,868 100.02 2,047.00 0.15123

2013 68,687 68,678 99.99 2,005.13 0.14812

2012 68,505 68,505 100.00 1,946.73 0.14381

2011 56,000 56,728 101.30 1,933.20 0.14281

2010 84,890 84,423 99.45 1,916.00 0.14000

1. Business tax classifications and associated rate structures:

Classification Oil Wells 1 - Outside city

-First 10,000 barrels

-Per each additional barrel

(Continued)150

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CITY OF BEVERLY HILLS, CALIFORNIA

Revenue Bases and Rates of Business Tax, Continued

Last Ten Fiscal Years(Unaudited)

Fiscal Year

Total RevenueClassification O.2

Tax Due

Total RevenueClassification O.2

Tax Paid

Total RevenueClassification O.2Percentage Paid

Total RevenueClassification O.2

Minimum TaxRate1

Total RevenueClassification O.2

Additional TaxRate

2019 N/A N/A %- N/A N/A

2018 N/A N/A - 4,323.00 0.39772

2017 75,588 82,054 108.55 4,247.00 0.39069

2016 80,755 80,755 100.00 4,180.00 0.38454

2015 120,827 120,827 100.00 4,126.00 0.37961

2014 121,842 126,235 103.61 4,110.00 0.37810

2013 116,294 116,294 100.00 4,024.99 0.37032

2012 120,890 122,065 100.97 3,907.76 0.35953

2011 129,650 133,980 103.34 3,880.60 0.35703

2010 109,730 112,080 102.14 3,846.00 0.35000

1. Business tax classifications and associated rate structures:

Classification Oil Wells 2 - Inside city

-First 10,000 barrels

-Per each additional barrel

(Continued)151

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CITY OF BEVERLY HILLS, CALIFORNIA

Principal Business Taxpayers1

June 30, 2019(Unaudited)

Rank2019

Taxpayer2010

Taxpayer

1 WILLIAM MORRIS ENDEAVOR ENT,LLC ENDEAVOR ENTERTAINMENT LLC2 UNITED TALENT AGENCY LLC B.W. HOTEL L.L.C.3 THE BEVERLY HILLS HOTEL OASIS WEST REALTY LLC4 B.W. HOTEL L.L.C. UNITED TALENT AGENCY LLC5 OASIS WEST REALTY LLC TWO RODEO DR6 PENINSULA BEVERLY HILLS SAJAHTERA, INC7 TWO RODEO DR DE2000, LLC-9601 WILSHIRE8 WALDORF ASTORIA BEVERLY HILLS PENINSULA BEVERLY HILLS9 PLATINUM EQUITY ADVISORS LLC DOUGLAS EMMETT 2008 LLC

10 BEVERLY HILLS LUXURY HOTEL, LLC MAPLE PLAZA LP

1. Source - The City of Beverly Hills Finance Department

152

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CITY OF BEVERLY HILLS, CALIFORNIA

Property Taxes Levies and Collections

Last Ten Fiscal Years(Unaudited)

Secured Taxes Unsecured Taxes Total Levy Total Collections to Date

Fiscal Total Collections Delinquency Total CollectionsDelinquency

(Delinquencies Collected)

Year2 Levy Amount Percent Amount Percent Levy Amount Percent1 Amount Percent Amount Amount Percent of Levy

2019 $ 64,947,426 62,853,436 %96.78 2,093,990 3.22 2,520,313 2,225,824 88.32 294,489 11.68 67,467,739 65,079,260 96.46

2018 60,764,237 57,780,488 95.09 2,983,749 4.91 2,213,647 2,036,716 92.01 176,931 7.99 62,977,884 59,817,204 94.98

2017 54,756,023 52,499,892 95.88 2,256,131 4.12 1,989,715 1,862,545 93.61 127,170 6.39 56,745,738 54,362,437 95.80

2016 51,333,556 49,683,000 96.78 1,650,556 3.22 1,998,880 1,854,855 92.79 144,025 7.21 53,332,436 51,537,855 96.64

2015 46,694,335 45,270,799 96.95 1,423,536 3.05 1,867,688 1,726,310 92.43 141,378 7.57 48,562,023 46,997,109 96.78

2014 43,568,039 42,469,237 97.48 1,098,802 2.52 1,802,086 1,934,162 107.33 (132,076) -7.33 45,370,125 44,403,399 97.87

2013 40,760,153 39,395,063 96.65 1,365,090 3.35 1,524,197 1,606,340 105.39 (82,143) -5.39 42,284,350 41,001,403 96.97

2012 38,440,450 34,849,673 90.66 3,590,777 9.34 1,482,515 1,504,935 101.51 (22,420) -1.51 39,922,965 36,354,608 91.06

2011 37,246,849 34,627,655 92.97 2,619,194 7.03 1,542,493 1,547,253 100.31 (4,760) -0.31 38,789,342 36,174,908 93.26

2010 37,997,237 34,923,926 91.91 3,073,311 8.09 1,542,801 1,640,503 106.33 (97,702) -6.33 39,540,038 36,564,429 92.47

1. For some years the total property tax collections to date as a percentage of the annual levy exceeds 100 percent because overcollections existed in those years. No interest or penalties are included in these totals.2. Fiscal year indicates year of levy and as such, collections and delinquency amounts are represented respectively for each year.

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CITY OF BEVERLY HILLS, CALIFORNIA

Assessed Actual Value of Taxable Property1

Last Ten Fiscal Years(Unaudited)

FiscalYear

Real PropertyAssessed Value

Personal PropertyAssessed Value

Real PropertyExemptions

Net AssessedValue

Total EstimatedAssessed Value

Ratio of NetAssessed Value toEstimated Actual

Value

TotalDirect

Tax Rate2

2019 $ 33,665,961,618 646,156,472 28,947,800 34,283,170,290 34,312,118,090 %99.92 1.023513

2018 31,371,923,851 576,580,315 29,474,200 31,919,029,966 31,948,504,166 99.91 1.023870

2017 28,704,085,363 570,861,936 30,139,200 29,244,808,099 29,274,947,299 99.90 1.203000

2016 27,203,443,969 579,983,988 30,924,600 27,752,503,357 27,783,427,957 99.89 1.020099

2015 24,927,472,431 541,945,422 31,745,000 25,437,672,853 25,469,417,853 99.88 1.019026

2014 23,699,934,458 505,405,873 32,607,400 24,172,732,931 24,205,340,331 99.87 1.017509

2013 22,192,984,986 513,407,389 33,534,200 22,672,858,175 22,706,392,375 99.85 1.017509

2012 20,811,530,307 515,563,539 34,384,000 21,292,709,846 21,327,093,846 99.84 1.018459

2011 20,534,364,962 541,088,467 35,105,000 21,040,348,429 21,075,453,429 99.83 1.015449

2010 21,055,787,380 578,769,365 35,515,200 21,599,041,545 21,634,556,745 99.84 1.014700

1. Source - Taxpayers' Guide compiled by the Los Angeles County Auditor-Controller's Office.

2. Total direct tax rates are estimates based on post-Proposition 13 assessed values and tax levies from the Los Angeles County Tax Collector. In previousyears, these amounts were represented as direct and overlapping tax rates combined.

154

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CITY OF BEVERLY HILLS, CALIFORNIA

Property Tax Rates for Direct and Overlapping Government1

(Per $100 of Assessed Value)Last Ten Fiscal Years

(Unaudited)

City of Beverly Hills School Districts County of Los Angeles

Fiscal Year

GeneralFund

(Base)2

RetirementBenefits for

Public SafetyPersonnel Total

BeverlyHills

Unified

LosAngelesUnified

LosAngeles

Community

College3 General

Flood Control

District3Sanitation

District No.4

School

Services3

MetropolitanWater

District

WestMosquito

Abatement Total

2019 1.0000 0.0235 1.0235 0.0880 0.1197 0.0462 - - - - 0.0350 - 1.3124

2018 1.0000 0.0239 1.0239 0.0801 0.1222 0.0460 - - - - 0.0350 - 1.3072

2017 1.0000 0.0220 1.0220 0.0968 0.0132 0.0360 - - - - 0.0350 - 1.2030

2016 1.0000 0.0201 1.0201 0.0659 0.1297 0.0358 - - - - 0.0035 - 1.2550

2015 1.0000 0.0190 1.0190 0.0458 0.1469 0.0402 - - - - 0.0035 - 1.2554

2014 1.0000 0.0173 1.0173 0.1002 0.1464 0.0408 - - - - 0.0035 - 1.3082

2013 1.0000 0.0175 1.0175 0.0520 0.1756 0.0488 - - - - 0.0035 - 1.2974

2012 1.0000 0.0185 1.0185 0.0502 0.1775 0.0403 - - - - 0.0037 - 1.2902

2011 1.0000 0.0154 1.0154 0.0502 0.1870 0.0231 - - - - 0.0037 - 1.2794

2010 1.0000 0.0147 1.0147 0.0453 0.1495 0.0231 - - - - 0.0043 - 1.2369

1. Source – Taxpayers’ Guide compiled by the Los Angeles County Auditor-Controller’s Office. For any given tax year, unsecured property is taxed at the prior year’s secured taxrate. For jurisdictions with more than one tax rate, the rate most commonly associated with the City of Beverly Hills is given.

2. The property tax rates for the General Fund are estimates based on post-Proposition 13 assessed values and tax levies from the Los Angeles County Tax Collector.

3. Beginning July 1, 1978, due to Proposition 13, Section 2237(a) of the California Revenue and Taxation Code provides that no local agency, school district, countysuperintendent of schools or community college district shall levy an ad valorem tax, other than that amount which is equal to the amount needed to make annual payments forthe interest and principal on general obligation bonds or other indebtedness approved by the voters prior to July 1, 1978, or the amount levied pursuant to Part 10 of Division Iand Sections 39309, 39311, 81338 and 81341 of the California Education Code.

Section 2237(b) of the California Revenue and Taxation Code provides that the County shall levy an ad valorem property tax on taxable assessed value at a rate equal to $4 per$100 of assessed value, which equates to 1% of market value. For the year ended June 30, 1979, the revenue from such tax shall be distributed to local agencies, school districts,county superintendents of schools, community college districts and community redevelopment agencies in accordance with the provisions of Section 26912 of the CaliforniaGovernment Code. Subsequent state action enacted the necessary legislation for the allocation of property tax revenues for the year ended June 30, 1980 and thereafter. Inaddition, the rate was modified to be $1 per $100 of assessed value and the assessed value was modified from 25% to 100% of cash value.

155

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CITY OF BEVERLY HILLS, CALIFORNIA

Property Tax Levies for All Overlapping Governments

Last Ten Fiscal Years(Unaudited)

School Districts County of Los Angeles

Fiscal Year

BeverlyHills

Unified

LosAngelesUnified

LosAngeles

CommunityCollege General

Flood ControlDistrict

SanitationDistrict No. 4 School Services

MetropolitanWater District

WestMosquito

AbatementDistrict

2019 $ 84,353,199 2,084,436,340 600,169,360 3,554,410,642 136,049,843 615,784 3,144,938,382 68,228,564 1,287,467

2018 76,925,780 1,939,725,412 545,108,367 3,340,976,260 128,037,079 578,707 2,959,621,828 65,285,016 1,194,800

2017 74,705,233 1,877,812,969 441,022,102 3,151,208,115 120,887,078 536,436 2,798,651,982 60,778,490 1,102,159

2016 62,655,796 1,767,833,737 426,491,928 2,992,644,325 114,878,043 492,546 2,658,535,306 56,096,184 1,041,344

2015 52,680,016 1,743,289,490 429,001,054 2,824,820,811 108,524,778 452,063 2,514,960,649 51,558,708 965,942

2014 62,590,174 1,653,799,298 442,597,335 2,682,444,795 103,095,271 425,464 2,387,790,476 51,111,008 930,933

2013 45,742,365 1,709,531,666 433,911,405 2,567,417,547 98,698,779 395,119 2,285,396,728 46,828,854 883,007

2012 44,957,437 1,639,239,416 340,915,436 2,511,361,318 96,614,339 381,367 2,238,225,341 47,062,597 852,863

2011 44,006,959 1,692,375,302 368,693,634 2,469,799,250 95,060,304 376,486 2,202,942,646 45,359,572 839,519

2010 44,077,643 1,568,986,406 279,833,358 2,514,165,817 96,590,730 371,525 2,240,662,798 51,225,143 859,067

1. Source – Taxpayers’ Guide compiled by the Los Angeles County Auditor-Controller’s Office. Levies include maximum allocation under Proposition 13 and debt servicerequirements. Levies do not include direct assessments and allocations from special augmentation fund.

156

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CITY OF BEVERLY HILLS, CALIFORNIA

Principal Property Taxpayers

Current Year and Nine Years Ago(Unaudited)

20191 20102

Taxpayer Type of BusinessAssessed

Valuation

Percentageof Net

AssessedValuation Taxpayer Type of Business

AssessedValuation

Percentageof Net

AssessedValuation

Douglas Emmett LLC Office Buildings $ 683,955,148 1.99% Douglas Emmett LLC Office Buildings $ 542,519,026 2.51%BH Luxury Residences LLC Residential Property 443,631,762 1.29 9900 Wilshire Holdings, Inc Office/store/residential/parking 520,200,000 2.40Oasis West Realty LLC Real Estate 310,341,109 0.90 Sloane Two Rodeo LLC Shopping Center 280,511,600 1.30Divcowest Fund Real Estate 295,754,506 0.86 Sajahtera Inc Residential Property 232,120,527 1.07Sloane Two Rodeo LLC Shopping Center 294,386,246 0.86 Trea Wilshire Rodeo LLC Office Buildings 207,678,404 0.96Tmine Inc Office Buildings 288,012,184 0.84 B W Hotel LLC Office Buildings 179,049,675 0.83Sajatera Inc Residential Property 276,703,445 0.81 BHP Holdings LLC Real Estate 143,000,000 0.66Trea Wilshire Rodeo LLC Office Buildings 235,073,977 0.69 Oasis West Realty LLC Real Estate 141,645,351 0.65Metropolitan Crescent Associates LLC Residential Property 212,282,146 0.62 Maple Plaza LP Office Buildings 140,661,086 0.65Beverly Wilshire Owner LLP Real Estate 203,241,341 0.59 Beverly Plaza LP Office Buildings 104,771,748 0.48

Total principal propertytaxpayers 3,243,381,864 9.45

Total principal propertytaxpayers 2,492,157,417 11.51

All other property taxpayers 31,068,736,226 90.55 All other property taxpayers 19,142,399,328 88.49

Total $ 34,312,118,090 100.00% Total $ 21,634,556,745 100.00%

1. Source – HdL Coren & Cone

2. Source - MuniServices, LLC 2009-2010

157

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CITY OF BEVERLY HILLS, CALIFORNIA

Ratios of Outstanding Debt by Type

Last Ten Fiscal Years(Unaudited)

Governmental AcitivitiesBusiness-type

Activities

Fiscal Year Revenue Bonds Capital Leases Notes Payable Revenue BondsTotal PrimaryGovernment

Population ofCounty of LA

Populationof City ofBeverly

Hills

Percentageof pop ofBH out of

LA

PersonalIncome forCity of BH

Percentage ofPersonalIncome

Per Capitaincomefactor Per Capita

20192 $ 74,756,068 1,014,998 17,677,198 74,456,004 167,904,268 $ 10,105,518 $ 34,627 %0.3427 $2,891,334,000 %5.1607 83,499 1,787

20182 86,623,715 1,273,887 19,768,215 101,990,966 209,656,783 10,163,507 34,504 %0.3395 2,712,775,000 6.9528 78,622 2,399

20172 98,007,279 1,545,598 21,741,690 110,407,945 231,702,512 10,137,915 34,646 %0.3417 2,931,516,000 7.1095 84,613 2,463

20162 108,935,437 1,846,289 23,451,527 118,510,329 252,743,582 10,017,068 34,291 %0.3423 2,824,618,000 8.0523 82,372 2,761

20151 119,439,630 346,019 25,214,046 126,296,678 271,296,373 10,017,068 34,693 %0.3463 2,606,103,000 9.4293 75,119 3,271

20141 127,810,027 28,800 26,881,191 134,905,105 289,625,123 10,017,068 34,494 %0.3444 2,413,354,083 10.8859 69,964 3,755

20131 132,607,906 161,568 26,881,191 139,971,841 299,622,506 10,393,185 34,494 %0.3319 2,413,354,083 11.2946 69,964 3,896

20121 140,657,377 256,932 28,454,620 151,442,225 320,811,154 10,393,185 35,774 %0.3442 3,028,519,518 9.6450 84,657 3,450

20111 152,885,822 1,670,291 29,939,603 164,843,128 349,338,844 10,393,185 35,774 %0.3442 3,028,519,518 10.4912 84,657 3,753

20101 139,920,811 - 14,450,639 127,564,570 281,936,020 10,393,185 35,774 %0.3442 3,028,519,518 8.8322 84,657 3,160

1. Source –MuniServices LLC for fiscal years 2010 - 2015.

2. Source - City of Beverly Hills Finance Department.

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CITY OF BEVERLY HILLS, CALIFORNIA

Computation of Direct and Overlapping Debt

June 30, 2019(Unaudited)

Estimated Estimated Share ofDebt Percentage Direct and

Outstanding Applicable Overlapping Debt

Overlapping Debt:1,3

Metropolitan Water District $ 48,050,000 %1.177 $ 565,549

Los Angeles Community College Disctrict 3,930,390,000 %4.034 158,551,933

Beverly Hills Unified School Disctrict 520,178,542 %99.822 519,252,624

Los Angeles Unified School Disctrict 10,106,450,000 %0.027 2,728,742

City of Beverly Hills Community Facilities Disctrict No. 2002-A 9,175,000 %100.000 9,175,000

Los Angeles County Regional Park and Open Space Assessment Distrcit 13,620,000 %2.260 307,812

Los Angeles County General Fund Obligations 2,153,701,630 %2.260 48,673,657

Los Angeles County Superintendent of Schools Certificates of Participation 5,827,868 %2.260 131,710

County Sanitation District No. 4 Authority 833,735 %2.533 21,119

Los Angeles Unified School District Certificates of Participation 180,545,000 %0.027 48,747

Subtotal, Overlapping Debt 739,456,893

Direct Debt :2

City Direct Debt %100.000 127,207,192

Subtotal, Direct Debt: 127,207,192

Total Direct and Overlapping Debt: $ 866,664,085

1. Source – HdL Coren & Cone.

2. All long-term debt instruments of the governmental activities, including bonds, notes, certificates of participation, loans, and capital leases. Source – City of Beverly HillsFinance Fepartment3. Overlapping governments are those that coincide, at least in part, with geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of thoseoverlapping governments that is borne by the property taxpayers of the City of Beverly Hills. This process recognizes that, when considering the government's ability to issue andrepay long-term debt, the entire debt burden borne by the property taxpayers should be taken into account. However, this does not imply that every taxpayer is a resident, andtherefore responsible for repaying the debt, of each overlapping government.

159

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CITY OF BEVERLY HILLS, CALIFORNIA

Legal Debt Margin Information

Last Ten Fiscal Years(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Debt limit $ 811,295,787 789,013,066 799,766,019 851,489,714 907,699,750 955,103,169 1,041,909,313 1,097,810,524 1,198,068,906 1,286,704,428

Total net debt applicable to limit - - - - - - - - - -

Legal debt margin 811,295,787 789,013,066 798,713,969 851,489,714 913,754,058 795,688,736 872,488,385 749,386,345 746,553,939 865,247,497

Total net debt applicable to the limit as apercentage of debt limit - - - - - - - - - -

Legal Debt Margin Calculation for Fiscal Year 2019

Assessed valuations:

Net assessed value $ 34,283,170,290 1

Add back exempt real property 28,947,800 1

Total assessed value 34,312,118,090

Legal debt margin:Debt limitation (3.75% of total assessed value) 1,286,704,428Debt applicable to limitation:

Total long-term liabilities 570,624,902Amounts to be paid from:

Water revenue 42,433,664Parking revenue 41,312,066Wastewater revenue 2,920,000

Unearned revenue 2,040,815Leased property deposits 1,299,799Deferred credit from sale-leaseback transactions 755,979

-Compensated absences 18,651,428Outstanding claims 38,744,870Capital lease 1,009,350

Total long-term liabilities excluded from computation 149,167,971

Total debt applicable to limit 421,456,931

Legal debt margin 865,247,497

1. Source – Taxpayers’ Guide compiled by the Los Angeles County Auditor-Controller’s Office.

160

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CITY OF BEVERLY HILLS, CALIFORNIA

Ratios of Annual Debt Service Expenditures of Governmental Funds to Total Governmental Fund Expenditures andRatio of Total Debt Service Expenditures to Total Governmental Activities Expenses1

Last Ten Fiscal Years(Unaudited)

FiscalGovernmental Funds

Debt Service (A)

Governmental ActivitiesDebt Service in

Internal Service Funds(C)

Total

(D)Total

GeneralGovernment

(E)Total

GovernmentalActivities

Ratio ofDebt Serviceto General

GovernmentalExpenditures

Ratio ofGovernmentalActivities Debt

Service toGeneral

GovernmentalExpenses

Plus Principal

Year Principal Interest Subtotal Principal (B) Interest Debt Expenditures Expenses (A)/(D) (C)/[(B)+(E)]

2019 $ 383,863 1,258,998 1,642,861 11,565,320 3,429,024 16,637,205 261,692,743 266,996,160 %0.63 %5.97

2018 376,186 1,272,792 1,648,978 10,607,346 3,918,693 16,175,017 245,025,782 251,148,389 0.67 6.18

2017 360,832 1,287,276 1,648,108 10,528,127 4,572,136 16,748,371 240,637,391 212,687,389 0.68 7.50

2016 353,154 1,302,604 1,655,758 7,830,427 5,442,985 14,929,170 194,266,265 212,292,851 0.85 6.78

2015 63,977 1,305,011 1,368,988 7,830,427 5,454,582 14,653,997 184,018,461 204,327,230 0.74 6.91

2014 46,064 1,307,006 1,353,070 8,092,608 5,778,904 15,224,582 183,132,998 198,717,284 0.74 7.36

2013 - 1,307,007 1,307,007 8,773,317 6,579,195 16,659,519 167,155,217 184,373,148 0.78 8.63

2012 719,104 1,623,429 2,342,533 37,939,434 7,046,315 47,328,282 159,638,635 171,625,827 1.47 22.58

2011 344,461 1,500,955 1,845,416 7,466,688 6,658,545 15,970,649 164,563,149 175,459,317 1.12 8.73

2010 333,697 1,512,625 1,846,322 6,847,517 5,768,719 14,462,558 155,666,002 162,029,301 1.19 8.56

1. A significant portion of the debt service for bonded debt of the City’s governmental activities is now reported in its internal service funds since conversion to GASB 34.Accordingly, the City provides two measures of the governmental activities debt service coverage in order to provide comparable information for pre- and post-GASB 34conversion. The first measure is the ratio of debt service expenditures reported in governmental funds to total governmental funds expenditures (excluding capital outlay). Thesecond measure represents the ratio of total debt service for bonded debt in governmental activities at the government-wide level to total governmental activities expenses plusbonded debt principal. While these measures should be roughly equivalent in the type of information provided, the second measure reflects the full accrual accounting method.

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CITY OF BEVERLY HILLS, CALIFORNIA

Ratios of Debt Service Per Capita

Last Ten Fiscal Years(Unaudited)

Fiscal Governmental Activities Business-Type Activities Total Primary

Year Principal Interest Principal Interest Government Per Capita

2019 $ 11,565,320 3,429,024 8,453,021 5,950,427 29,397,792 849

2018 10,607,346 3,918,693 7,906,468 6,647,679 29,080,186 842

2017 10,528,127 4,589,531 7,591,873 5,476,495 28,186,026 813

2016 10,104,161 5,018,267 7,275,839 5,778,679 28,176,946 822

2015 7,894,405 5,260,374 7,825,595 6,053,914 27,034,288 779

2014 8,138,671 5,483,359 7,861,329 6,311,068 27,794,427 802

2013 8,461,413 6,194,369 11,388,587 6,949,866 32,994,235 957

2012 9,252,375 5,678,418 10,132,625 6,775,654 31,839,072 928

2011 7,811,149 6,901,445 6,438,851 7,412,750 28,564,195 835

2010 7,181,213 6,788,760 4,688,787 5,603,809 24,262,569 675

.

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CITY OF BEVERLY HILLS, CALIFORNIA

Water Enterprise Fund Long-Term Debt Coverage

Last Ten Fiscal Years(Unaudited)

Water Enterprise Fund Operations

Fiscal Gross

ExpensesNet of

DepreciationNet RevenueAvailable for

Water Enterprise Long-TermDebt Service Requirements3

Year Revenues1 and Interest2 Debt Service Principal4 Interest Expense4 Total Coverage

2019 $ 38,862,054 30,601,900 8,260,154 3,885,000 1,948,454 5,833,454 1.42

2018 36,723,942 26,739,375 9,984,567 3,890,000 2,242,254 6,132,254 1.63

2017 34,935,967 25,839,373 9,096,594 3,575,000 2,406,938 5,981,938 1.52

2016 38,426,820 25,070,866 13,355,954 3,420,000 2,553,288 5,973,288 2.24

2015 36,502,243 25,176,858 11,325,385 2,055,000 2,637,638 4,692,638 2.41

2014 39,018,449 25,897,669 13,120,780 1,995,000 2,726,238 4,721,238 2.78

2013 34,820,504 22,903,472 11,917,032 2,090,000 2,801,338 4,891,338 2.44

2012 31,364,068 20,517,579 10,846,489 2,890,000 2,109,098 4,999,098 2.17

2011 32,201,380 20,065,768 12,135,612 1,575,000 2,680,904 4,255,904 2.85

2010 25,159,048 17,723,125 7,435,923 1,690,000 2,748,504 4,438,504 1.68

1. Includes operating and nonoperating revenues. Amounts exclude transfers in and contributions from other funds.

2. Includes operating expenses less depreciation and amortization, plus nonoperating expenses less interest expense. Amounts exclude transfers out and contributions to otherfunds.

3. Amounts exclude compensated absences..

4. The principal and interest amounts reported in 2012 includes new debt issued by the City (2012 Water Revenue Bonds).

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CITY OF BEVERLY HILLS, CALIFORNIA

Wastewater Enterprise Fund Long-Term Debt Coverage

Last Ten Fiscal Years(Unaudited)

Wastewater Enterprise Fund Operations

Fiscal Gross

ExpensesNet of

DepreciationNet RevenueAvailable for

Wastewater Enterprise Long-TermDebt Service Requirements3

Year Revenues1 and Interest2 Debt Service Principal Interest Expense Total Coverage

2019 $ 13,361,993 6,910,901 6,451,092 1,440,000 174,251 1,614,251 4.00

2018 12,650,620 6,447,632 6,202,988 1,370,000 307,913 1,677,913 3.70

2017 13,148,483 6,826,853 6,321,630 1,260,000 363,750 1,623,750 3.89

2016 13,368,611 6,507,729 6,860,882 1,205,000 411,950 1,616,950 4.24

2015 13,465,574 6,514,210 6,951,364 1,160,000 458,350 1,618,350 4.30

2014 13,884,557 7,928,274 5,956,283 1,125,000 492,100 1,617,100 3.68

2013 13,114,555 8,778,319 4,336,236 1,095,000 522,760 1,617,760 2.68

2012 13,010,992 7,987,257 5,023,735 1,070,000 551,650 1,621,650 3.10

2011 13,397,886 4,432,745 8,965,141 1,045,000 576,730 1,621,730 5.53

2010 13,173,309 4,326,481 8,846,828 1,000,000 613,397 1,613,397 5.48

1. Includes operating and nonoperating revenues. Amounts exclude transfers in, capital contributions and residual equity transfers in.

2. Includes operating expenses less depreciation and amortization, plus nonoperating expenses less interest expense. Amounts exclude transfers out and residual equity transferout.

3. Amounts exclude compensated absences.

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CITY OF BEVERLY HILLS, CALIFORNIA

Demographic and Economic Statistics

Last Ten Fiscal Years(Unaudited)

Year Population1

MedianHouseholdIncome2,3 Personal Income3

Per CapitaPersonal Income3

UnemploymentRate4

20195 34,627 103,698 $ 2,891,334,000 $ 83,499 %4.0

20185 34,504 100,630 2,712,775,000 78,622 4.2

20175 34,646 97,327 2,931,516,000 84,613 5.0

20165 34,763 87,366 2,824,618,000 81,253 6.4

20155 34,693 86,141 2,606,103,000 75,119 7.9

20145 34,677 86,141 2,613,710,000 75,373 5.2

2013 34,494 83,217 2,413,354,083 69,964 7.6

2012 34,291 82,020 2,364,649,751 68,958 7.7

2011 34,210 81,726 2,241,664,460 65,526 8.6

2010 35,953 84,356 2,308,470,224 64,208 8.1

1. Source: MuniServices, LLC, California Department of Finance Projections.

2. Median household income source for 2014 and 2015 - U.S. Census Bureau, 2012-2016 American Community Survey 5-year Estimates.

3. Source: MuniServices, LLC, U.S. Census Bureau, 2010 American Community Survey.

4. Source: MuniServices, LLC, EDD's Bureau of Labor Statistics Department.

5. Fiscal year 2014, 2015, 2016, 2017, 2018 and 2019 data source: HdL Coren & Cone, U.S. Census Bureau, 2009-2013, 2012-2016 American Community Survey 5-yearEstimates.

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CITY OF BEVERLY HILLS, CALIFORNIA

Demographic Statistical Data

June 30, 2019(Unaudited)

Percent of Population in Various Age Groups 1:Age 1960 1970 1980 1990 2000 2010 2017

0-9 7.8% 7.4% 5.8% 7.7% 9.1% 8.6% 9.4%10-19 13.1 14.4 14.7 11.0 12.9 13.0 12.320-34 12.0 13.6 17.7 20.1 18.5 17.5 18.035-44 13.7 11.6 13.2 15.9 15.2 12.7 12.545-54 19.3 16.0 13.7 13.7 15.8 15.7 15.555-64 17.7 17.0 13.7 11.3 17.6 13.5 11.765+ 16.4 19.9 21.3 20.3 17.6 19.0 20.6

Median Age: 46.8 46.9 43.9 42.3 41.3 43.6 43.4

Population Distribution by Race (2018 Population estimates) 1:Total Percent

White 26,936 78.10%Asian 3,350 9.71%Hispanic 1,983 5.75%African American 479 1.39%Two or more races 1,470 4.26%Other 270 0.79%

34,488 100.00%

Average income levels (Estimated 2012-2016 American Community Survey) 2:

Non-Family FamiliesTotal

Households

Median $ 60,908 141,721 100,630

1. Source: Census of Population and Housing, U.S. Bureau of the Census (respective year). The official population census of the United States is conducted every ten years, mostrecently in 2010.

2. Source: U.S. Census Bureau, 2012-2016 American Community Survey 5-year Estimates

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CITY OF BEVERLY HILLS, CALIFORNIA

Demographic Statistical Data, Continued

June 30, 2019(Unaudited)

Housing Units (2010 Census) 1: 16,394

Household Size (2010 Census) 1:Household Total Percent

1 5,409 36.30%2 4,486 30.10%3 2,042 13.70%

4 or more 2,965 19.90%

14,902 100.00%

Housing Units (Estimated 2011-2015) 3:Total Percent

Single 6,015 37.11%Multiple 10,143 62.58%Mobile 50 0.31%Boat, RV, van - 0.00%

16,208 100.00%

Median value of owner-occupied units (2013-2017 American Community Survey) 2: $2,000,000+

School Enrollment:

BHUSD (K-12)2 3,450

All schools (Nursery - 12) (Est 2011-2015) 3 8,312

1. Source: Census of Population and Housing, U.S. Bureau of the Census (respective year). The official population census of the United States is conducted every ten years, mostrecently in 2010.

2. Source: Beverly Hills Unified School District.

3. Source: U.S. Census Bureau, Population estimate, July 1, 2018

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CITY OF BEVERLY HILLS, CALIFORNIA

Full-time Equivalent City Government Employees by Function

Last Ten Fiscal Years1

(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

FunctionGeneral government 100.73 104.17 104.05 104.11 104.11 106.00 109.20 114.30 119.80 124.14Public safety 301.27 287.50 307.00 296.77 286.77 295.60 297.10 302.10 343.20 349.54Public service 304.64 299.60 297.60 306.40 315.40 335.20 351.70 355.40 349.20 358.70Culture and recreation 208.26 167.72 168.00 171.37 171.37 173.80 177.60 179.90 164.40 163.47

Total 914.90 858.99 876.65 878.65 877.65 910.60 935.60 951.70 976.60 995.85

1. Full-time equivalent employees are based on the budgeted positions.

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CITY OF BEVERLY HILLS, CALIFORNIA

Operating Indicators

Last Ten Fiscal Years1

(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

FunctionGeneral government

Business licenses issued 10,250 11,204 10,377 10,932 10,483 10,947 9,325 9,813 9,531 9,811

Public safetyPolice

Physical arrests 1,047 1,074 1,061 1,192 913 1,077 1,188 1,188 1,563 1,593Traffic violations

Signed citations 16,289 17,422 9,495 6,287 5,494 9,449 4,285 9,629 7,118 6,244

Non-moving citations 6,616 7,168 4,589 2,708 2,170 3,857 3,862 5,423 3,507 3,688

Parking citations 168,000 8,276 4,418 3,749 3,211 5,369 5,930 35,689 84,483 76,695

Calls for service by patrol 42,667 42,824 35,248 42,583 42,755 69,610 36,358 54,403 54,074 53,802

FireNumber of calls answered 5,942 6,230 6,306 6,459 6,900 7,135 7,205 7,564 7,591 8,015

Building and safetyInspections 8,741 8,165 11,254 11,963 12,533 10,156 17,014 16,408 16,144 12,455Building permits issued 1,130 2,440 3,003 2,592 2,765 2,798 2,468 2,393 2,616 2,595

Public serviceStreet resurfacing (miles) 14 13 1 5 10.8 0.2 0.2 10.2 2.1 0.4Potholes repaired 650 990 1,659 838 1,120 1,674 1,198 2,382 1,208 304New water connections 40 42 32 52 47 62 6 34 38 19Water main breaks 22 15 13 14 16 18 8 8 13 30Gallons of water (average

daily consumption in millions) 11.20 10.00 9.70 10.64 11.01 10.10 8.70 8.45 9.20 0.00

Culture and recreationNumber of children participating in

library programs 10,293 10,184 9,358 15,962 27,316 22,292 26,896 22,047 21,067 19,093Total enrollment in City offered

classes 16,067 11,451 13,349 13,425 13,443 13,740 15,509 15,744 16,874 23,506Total participating art show artists 481 480 479 471 493 496 496 502 495 507

1. Source: various City Departments.

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CITY OF BEVERLY HILLS, CALIFORNIA

Capital Asset Statistics by Function

Last Ten Fiscal Years1

(Unaudited)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

FunctionPublic safety

PoliceStations 1 1 1 1 1 1 1 1 1 1Patrol units 45 43 48 39 40 44 44 45 45 45

FireFire stations 3 3 3 3 3 3 3 3 3 3Fire trucks 25 25 25 26 27 30 30 26 26 28

Public serviceMiles of streets (all paved) 109 109 111 111 111 111 111 111 111 111Miles of alleys (all paved) 41 41 42 42 42 42 42 42 42 42Street lights 5,018 5,019 5,094 5,095 5,095 5,095 5,096 5,096 5,099 5,121Alley lights 858 858 858 858 858 858 858 858 858 858Traffic signalized intersections 97 97 97 97 97 97 96 96 105 105Parking meters (on street) 2,756 2,541 2,516 2,618 2,608 2,609 2,602 2,526 2,550 2,568Water mains (miles) 171 171 171 171 170 180 180 171 180 173Meters in service 11,158 11,200 11,232 11,087 11,278 11,031 11,170 11,065 11,169 11,188Fire hydrants 1,345 1,346 1,347 1,349 1,360 1,362 1,366 1,374 1,379 1,367Sanitary sewers (miles) 98 98 98 98 98 100 100 100 100 100Storm drains (miles)2 32 32 32 32 32 32 33 33 33 33

Culture and recreationParks acreage 97.4 97.4 97.4 97.4 97.4 97.4 97.4 97.4 97.4 97.4Mini-parks acreage 2.6 2.6 2.6 2.6 2.6 2.6 2.6 3.1 3.1 3.1School playground acreage 16 16 16 16 16 16 16 16 16 16

1. Source: various City Departments.

2. The 2010, and 2011 figures are based on the analysis report by Matrix Consulting Group for the Department of Public Works.

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