ML14036A053

The City of Anaheim, CA, Comprehensive Annual Financial Report, Year Ended June 30, 2013

ML14036A053
Person / Time
Site:	San Onofre
Issue date:	06/30/2013
From:	City of Anaheim, CA
To:	Office of Nuclear Reactor Regulation
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Download: ML14036A053 (158)

Text

YEAR ENDED JUNE 30, 2013

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CITY OF ANAHEIM Comprehensive Annual Financial Report Table of Contents June 30, 2013 Page INTRODUCTORY SECTION Letter of Transmittal 1

GFOA Certificate of Achievement for Excellence in Financial Reporting 7

Organization Chart 9

Administrative Personnel 10 FINANCIAL SECTION Independent Auditors' Report 11 Management's Discussion and Analysis (Unaudited) 13 Basic Financial Statements Government wide Financial Statements Statement of Net Position 25 Statement of Activities 27 Fund Financial Statements Balance Sheet - Governmental Funds 29 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 30 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 31 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 32 Statement of Revenues, Expenditures and Changes In Fund Balances - Budget and Budgetary Basic Actual - General Fund 33 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Budgetary Basic Actual - Housing Authority 34 Statement of Net Position - Proprietary Funds 35 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 37 Statement of Cash Flows - Proprietary Funds 38 Statement of Fiduciary Net Position (Deficit) 41 Statement of Changes In Fiduciary Not Position (Deficit) 43 Notes to the Financial Statements 45 Required Supplementary Information (Unaudited) 85 Combining Individual Fund Statements and Schedules Governmental Funds Combining Balance Sheet - Nonmajor Governmental Funds by Fund Type 87 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds by Fund Type 88 Combining Balance Sheet - Nonmajor Special Revenue Funds 89 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) - Nonmajor Special Revenue Funds 91 Schedule of Revenues, Expenditures and Changes in Fund Balances (Deficits) - Budget and Actual - All Nonmajor Special Revenue Funds 93 (continued)

CITY OF ANAHEIM Comprehensive Annual Financial Report Table of Contents June 30, 2013 (continued)

Page Combining Balance Sheet - Nonmajor Debt Service Funds 98 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Debt Service Funds 99 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - All Debt Service Funds 100 Combining Balance Sheet - Nonmajor Capital Projects Funds 102 Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit) - Nonmajor Capital Projects Funds 103 Schedule of Revenues, Expenditures and Changes in Fund Balances (Deficit) - Budget and Budgetary Basis Actual - All Capital Projects Funds 104 Internal Service Funds Combining Statement of Net Position - Internal Service Funds 107 Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds 108 Combining Statement of Cash Flows - Internal Service Funds 109 Fiduciary Funds Statement of Changes in Fiduciary Assets and Liabilities - Agency Fund - Mello Roos 11 STATISTICAL SECTION (Unaudlted)

Net Position by Component - Last Ten Fiscal Years 114 Changes in Net Position - Last Ten Fiscal Years 115 Governmental Activities Tax Revenues by Source - Last Ten Fiscal Years 117 Fund Balances of Governmental Funds - Last Ten Fiscal Years 118 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 119 General Government Tax Revenues by Source - Last Ten Fiscal Years 120 Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years 121 Property Tax Rates - Direct and Overlapping Governments - Last Ten Fiscal Years 122 Principal Property Tax Payers - Current Year and Nine Years Ago 123 Property Tax Levies and Collections - Last Ten Fiscal Years 124 Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 125 Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years 126 Direct and Overlapping Governmental Activities Debt-as of June 30, 2013 127 Legal Debt Margin - Last Ten Fiscal Years 129 Pledged Revenue Coverage - Last Ten Fiscal Years 130 Demographic and Economic Statistics - Last Ten Fiscal Years 134 Principal Employers - Current Year and Nine Years Ago 135 Full time Equivalent City Government Employees by Function/Program - Last Ten Fiscal Years 137 Operating Indicators by Function - Last Ten Fiscal Years 138 Capitol Assets Statistics by Function - Last Ten Fiscal Years 140 City of Anaheim Map 142

CITY OF ANAHEIM City of Anaheim, California Finance Department Management's discussion and analysis (MD&A) immediately follows the independent auditor's report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter of transmittal and should be read in conjunction with it.

ECONOMIC CONDITION AND OUTLOOK December 17, 2013 To the Honorable Mayor and City Council City of Anaheim Anaheim, California In accordance with the Charter of the City of Anaheim (City),

we are submitting the Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2013. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data, as presented, is accurate in all material aspects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the City, as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain maximum understanding of the City's financial activities have been included.

The City Charter requires an annual audit of the financial statements of the City by an independent certified public accountant. Accordingly, this year's audit was completed by KPMG LLP. In addition to meeting the requirements set forth in the City Charter, the audit was also designed to meet the requirements of the Single Audit Act Amendments of 1996 and related OMB Circular A-133. The auditors' report on the basic financial statements is included in the financial section of this report. The auditors' reports related specifically to the single audit are presented as a separate document.

The City is located in northwestern Orange County, about 28 miles southeast of downtown Los Angeles and 90 miles north of San Diego. The City lies on a coastal plain, which is bordered by the Pacific Ocean to the west and the Santa Ana Mountains to the east. The City is the oldest and most populous city in Orange County. Anaheim is home to the Disneyland Resort, the Anaheim Convention Center, and two major league professional sports teams-the Los Angeles Angels of Anaheim American League Baseball team that utilizes the Angel Stadium of Anaheim, and the Anaheim Ducks National Hockey League team that utilizes the Honda Center.

Anaheim and Orange County are home to a wide spectrum of industries-more than 8,000 manufacturing plants are located in the county, most notably defense and aerospace, biomedical, electronics, machinery, and computer product manufacturers.

The City has over 20,000 active business licenses, of which 15,500 are businesses operating within the City's boundaries.

The unemployment rate in Anaheim for June 2013 was 7.9%,

which is above the national average (7.6%) but below the state average (8.5%).

As the City moves into fiscal year 2013/14, we are able to do so with a more optimistic tone than we have been able to in quite some time. After enduring a slow recovery from the Great Recession, the economy is beginning to ramp up. The City's three largest revenue sources, transient occupancy tax, sales and use tax, and property tax, all have exceeded their budgets this year I

CITY OF ANAHEIM and we expect the growth to continue into fiscal year 2013/14 and beyond.

MAJOR INITIATIVES City management, under the direction of the Mayor and City Council, identifies priorities that will determine the path of the City's future. Initiatives are reevaluated regularly, and new ones added, to ensure that they are consistent with the priorities of our policy body and the community. Through a commitment to position the City of Anaheim to better fulfill its mission of delivering outstanding municipal services that are responsive to our entire community, the City of Anaheim is continuing its tradition of innovation, ingenuity, and opportunity by focusing on community needs, building neighborhood connections, and governing for results that strengthen communities. The City's dedication to improvement and modernization has created an environment where residents and businesses are free to choose how best to enjoy all that Anaheim has to offer.

INVESTING IN OUR NEIGHBORHOODS: Strong ties are created when a community lives well with one another. Anaheim takes pride in the fact that there is a strong set of culturally diverse traditions that exist within its almost 50 square mile boundaries.

It is vital that we provide opportunities to build relations and develop infrastructure throughout the City that will facilitate involvement from neighbors to help make the community stronger and more resilient.

The City has already begun to see an improvement to our parks, most notably, a new playground in the west area, at Schweitzer Park. As the third project of its kind, this playground offers more than a safe place to play; it provides opportunities for the community to connect. In less than eight hours, this playground was fully assembled thanks to the help of more than 200 volunteers, including local residents, key community agencies and the City team.

The fiscal year 2013/14 budget also outlines plans for a new neighborhood center, the Miraloma Family Resource Center, which will be constructed on an isolated pocket of land between the 91 and 57 Freeways. Site amenities include a two-acre park, a perimeter loop trail, a skate plaza, outdoor classroom area, and picnic facilities. This resource center, along with the other numerous community Improvement projects in development, will provide much needed recreational space to the parts of the City that need it most.

Near the central part of Anaheim, the City has plans to construct a half-acre park site near Guinida Lane and Paul Revere Elementary, known as Paul Revere Park. To further inspire civic pride, neighborhood children were asked to draw images of what they envisioned Paul Revere would have seen on his infamous ride. These images will be integrated into a glass mosaic mural that will be displayed at the park's entrance to represent a personal contribution from the community.

This City also plans for the construction of a new community center at Ponderosa Park, replacing the Ponderosa Family Resource Center that was originally built in the 1960s. Utilizing input from local residents, the City will be constructing a community center with a state-of-the-art gymnasium. The new center, together with the new Ponderosa Library will serve as a critical resource to the thousands of residents each month who participate in City classes and receive numerous family services.

And finally, our efforts to encourage healthy living and provide greater connections between our communities are highlighted in our Outdoor Connectivity Plan - an urban greening project that will outline new bike paths and walking trails. This plan represents more than new walking trails, it encompasses a system of green corridors that will connect residents, visitors and employees to high density urban areas. Traveling under 2

CITY OF ANAHEIM shade trees and through pocket parks and demonstration gardens, our residents and visitors will have the opportunity to be fully integrated with the space, and experience the journey rather than merely the end destination.

COMMITTMENT TO PUBLIC SAFETY:

Anaheim continues to be one of the safest cities in America for our size; nevertheless we recognize the need to invest in our public safety personnel to meet the challenges of a growing city.

The fiscal year 2013/14 budget provides for new officers, and the Police Department outlines a commitment to the principles of community policing and crime prevention.

In order to empower our residents to deter and prevent crime in their own neighborhoods, the City will expand initiatives that bolster community outreach to neighborhoods and youth. Some of these programs include the Gang Reduction and Intervention Partnership (GRIP), Safe Schools, Cops 4 Kids, the Junior Cadet Program and the Police Explorer Program.

Moreover, the Anaheim Police Department is dedicated to strengthening its relationship with the community through enhanced customer service and transparency initiatives all aimed at expanding the level of service to our community.

Within the Fire Department, implementation of the department's 2013-2018 Strategic Plan is underway. The recently adopted Anaheim Fire and Rescue Strategic Plan was an effort that involved City departments and community stakeholders. These stakeholders reviewed existing fire and medical services and identified ways for the department to adapt and reorganize itself to meet future challenges and expectations. As part of this plan, the fiscal year 2013/14 budget provides funding to add an additional fire engine in service and funding for signal pre-emption technology that allows for safer and more efficient flow of emergency vehicles within our community. The department will also replace two aged engines, upgrade cardiac monitors, and acquire new equipment to provide more flexibility and better response to all types of fire and rescue situations.

IMPROVING OUR INFRASTRUCTURE:

Routine maintenance certainly helps to sustain our existing infrastructure, but Anaheim also strives to use these opportunities to beautify our neighborhoods and improve the livability of our community.

Therefore, plans are in place to install landscape where there is sparse right-of-way space, repave our roadways to improve traffic flow, and upgrade our sidewalks to enhance the safety of our community members.

We will be embarking on substantial infrastructure upgrades, like the Brookhurst Street Widening project. By adding raised medians and widening the street to three lanes in each direction between Ball Road and Katella Avenue, this project will improve the flow of traffic and create a seamless transition from one major corridor to the next. A successful model of this was the completion of Gene Autry Way, an overpass allowing residents and visitors to easily access the Disneyland Resort, Angel Stadium of Anaheim, and Honda Center.

To support the economic growth in the Anaheim Canyon Business Center and the increased traffic demand from the new Kaiser Permanente Hospital, enhancements will be made to the intersection of Tustin Avenue and La Palma Avenue. The City has plans to widen Tustin and La Palma, adding additional through lanes, as well as a left-turn lane, to relieve traffic congestion and enhance street aesthetics.

Additionally, investments in well-established programs like the Anaheim Public Utilities Underground Conversion Plan help to beautify our streetscapes and modernize the local electric grid while providing lasting service reliability for our residents and businesses. Now entering its 23rd year, the City's Underground Conversion Program is more than halfway complete; upcoming phases include upgrades to Lincoln Avenue from 3

CITY OF ANAHEIM Magnolia Avenue to Knott Avenue and Brookhurst Street from Ball Road to Orange Avenue.

MAINTAINING A WORLD CLASS DESTINATION:

Enhancements to the Anaheim Resort, which welcomes over 20 million visitors annually, the Platinum Triangle, and Downtown Anaheim are critical to the future of our City. These economic engines allow us to grow our General Fund revenues and ultimately provide funding for a vast majority of the neighborhood improvement projects around our community.

A critical piece of our future growth in Anaheim is the development of smart transportation solutions that link our residents and visitors to the entertainment and job centers within the region. The first piece of this connection is the Anaheim Regional Transportation Intermodal Center (ARTIC),

which is fully funded and near completion. Scheduled to open in 2014, ARTIC will provide a functional link among all transit modes in the area and will be a valuable addition to the City's economic base.

Building on the momentum of the ARTIC project, the City, together with the Orange County Transportation Authority (OCTA), continues to plan for a new fixed guideway system that will tie together all the key assets within the City. The Anaheim Rapid Connection (ARC) project is a significant piece of Anaheim's long term transportation plan for the region, providing our residents and visitors with a safe, convenient and efficient connection between the Anaheim Resort and the Platinum Triangle. For residents, visitors and businesses, ARC provides a convenient way to enjoy all that Anaheim has to offer, while relieving traffic and paving the way for new investment and economic growth right here in Anaheim.

Finally, the City continues to grow and enhance the Anaheim Convention Center with the recent completion of a new 100,000 square foot outdoor meeting space called the Grand Plaza.

The Grand Plaza esplanade is the sixth major construction project at the Anaheim Convention Center since it opened in 1967 and is a critical new investment aimed at keeping our destination attractive for guests both locally and from around the world. Moreover, the project sets the stage for future expansions to the Convention Center providing more flexible meeting space to attract larger and more diverse meeting groups, which promote economic growth for our City.

FINANCIAL INFORMATION Management of the City is responsible for establishing and maintaining internal control designed to ensure that the assets of the government are protected from loss, theft, or misuse, and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with U.S. generally accepted accounting principles.

Internal control is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.

This report consists of management's representations concerning the finances of the City. As a result, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. Management asserts that, to the best of their knowledge and belief, this financial report is complete and reliable in all material respects.

BUDGETARY CONTROLS: The City maintains budgetary controls, the objective of which is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund, special revenue funds, debt service funds, capital projects funds, and all the proprietary funds are included in the annual 4

CITY OF ANAHEIM appropriated budget. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the departmental level. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control.

Encumbrances generally are re-appropriated as part of the following year's budget.

RELEVANT FINANCIAL POLICIES: Over the years, through sound fiscal management, the City has positioned itself well to weather economic downturns, create a positive atmosphere for economic development, and allow flexibility in addressing budgetary challenges. As of June 30, 2013, the City's General Fund has a spendable, unassigned fund balance of $26.9

million, which represents 11%

of total expenditures.

Traditionally, the policy has been to maintain General Fund reserves at a minimum of 7 to 10% of expenditures.

Further, the City has a long-standing practice of recognizing and reserving for known and anticipated liabilities. The City fully funds its compensated absences and self insurance liabilities. Additionally, the City has established an irrevocable trust for other post-employment benefits (also known as retiree medical) and continues to make the annual required contribution (ARC) to ensure this future obligation is fully funded.

_LONG-TERM FINANCIAL PLANNING: On June 18, 2013, the City Council adopted the fiscal year 2014 budget. Additionally, as a companion to approving the budget plan, a five-year Capital Improvement Plan was presented to the City Council.

The five-year plan links anticipated expenditures for infrastructure development with community needs and desires, and provides a citywide perspective of recommended projects and proposed funding sources.

The Capital Improvement Plan was finalized in June 2013, and totaled

$613.3 million for the five-year fiscal period ending June 30, 2018. The five-year Capital Improvement Plan has been submitted and annually updated, in its present form, since 1982, for effective long-range planning purposes. It is City Management's belief that these two plans give City Council members an expanded opportunity to set policy and provide direction for implementation, resulting in improved management efficiency and improved financial results.

AWARD GOVERNMENT FINANCE OFFICERS ASSOCIATION OF THE UNITED STATES AND CANADA (GFOA) CERTIFICATE OF ACHIEVEMENT AWARD: The GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Anaheim, California, for its comprehensive annual financial report for the fiscal year ended June 30, 2012. This was the 37th consecutive year that the City has achieved this prestigious award (fiscal years ended June 30, 1976 through 2012). In order to be awarded the Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both U.S. generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual financial report continues to conform to the Certificate of Achievement Program's requirements and we are submitting it to GFOA to determine its eligibility for another certificate.

ACKNOWLEDGMENTS The preparation of this report on a timely basis is a team effort involving many dedicated people across the entire organization. I would like to extend a special thanks to the talented finance professionals throughout the City, led by Peggy Au, Financial Accounting Manager. Appreciation is also expressed to Mayor Tom Tait, Mayor ProTem Gail Eastman, and Assistant City Manager Paul Emery for their significant contributions as members of the Audit Committee. In closing, 5

CITY OF ANAHEIM without the leadership and support of the City Council, preparation and results of this report would not have been possible. Its leadership has made possible the implementation of these important and innovative concepts in fiscal management by the City.

Respectfully submitted, Marcie L. Edwards Deborah A. Moreno City Manager Finance Director 6

CITY OF ANAHEIM Governrent Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Anaheim California The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Anaheim, California for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2012. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports.

In order to be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to Certificate of Achievement program requirements, and we are submitting it to GFOA.

For its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2012 Executive Director/CEO 7

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Ciizn of Anhi Elected Policy Maker Council Appointed Officers Appointed Boards and Commissions I

CITY ADMINIRSTRATON City Manager's Office Audit BudgeIvstmdentad Tehnoogy Commission Library Boardl Comnwnsnity Servies oard Pars s& Recreation Commission CultwIura HrtageCmm~issin Plannq ommisionsn Goff ComrnissianPubliUiltis Board Housing &Communi$tyDveoment Commission Workforce Investm~ent Board 4

Special Projects M a a e

/

External 4Aftalts intergovernmental Relations Council Appointee Uaison COMMUNITY SERVICES Parks Golf Operations Recreation /

Human and Neighborhood Services Library Services PUIUC WORKS Engineering Operations Fleet and Facility Services Construction Services Financial and Administrative Services FINANCE CONVENTION,

SPORTS, AND Budget and ENTERTAINMENT Accounting Convention Center Purchasing Visitor and Concestion Information Bureau Services PUBUC UTILITES Joint Services Water Services Financial Management Services Electric Services POUCE Special Operations Operations Operations Support Investigations FRIRE Support Services Fire and Rescue Operations Fire Prevention Emergency Management and Preparedness PLANNING Planning Services Building Servic Community Preservation a Licensing Initiatives and Related Communications Strategic Planning COMMUNITY HUMAN DEVELOPMENT RESOURCES Workforce Recruitment and ies Development Employee Housing Development nd Authority Benefits Assets and Employee Grants Relations Community Risk Investment Management Stadium Operatons Arena Operations Grove Operations 9

CITY OF ANAHEIM Administrative Personnel December 17, 2013 City Manager Assistant City Manager Deputy City Manager Deputy City Manager Chief of Police City Attorney City Clerk City Treasurer Community Development Executive Director Community Services Director Convention, Sports & Entertainment Executive Director Finance Director Fire Chief Planning Director Public Utilities General Manager Public Works Director Marcie L. Edwards Paul Emery Greg Garcia Kristine Ridge Raul Quezada Michael R.W. Houston Linda N. Andal Henry W. Stern John E. Woodhead IV Terry D. Lowe Thomas Morton Deborah A. Moreno Randy R. Bruegman Sheri Vander Dussen Dukku Lee Natalie Meeks 10

Fiaca Seto

Lim MI 1-ý KPMG LLP Suite 700 20 Pacifica Irvine, CA 92618-3391 Independent Auditors' Report The Honorable Mayor and City Council City of Anaheim, California:

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 Anaheim, California (the City), as of and for the year ended June 30, 2013, 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 U.S. generally accepted accounting principles; 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.

Auditors' 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 auditors' 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.

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 of Anaheim, California, as of June 30, 2013, and the respective changes in financial position, and where applicable, cash flows thereof and the budgetary comparison for the General and Housing Authority Fund for the year then ended in accordance with U.S. generally accepted accounting principles.

KPMG LLP Is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative

("KPMG Internationall), a Swiss entity.

I1I

MRAPP Emphasis of Matter As discussed in note 2 to the financial statements, the City adopted Government Accounting Standards Board Statement No.65, Items previously reported as Assets and Liabilities. Application of this statement was effective as of July 1, 2012.

Other Matters Required Supplementary Information U.S. generally accepted accounting principles require that the management's discussion and analysis on pages 13 through 24 and the schedules of funding progress on page 85 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the 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 and Other 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 accompanying introductory

section, combining Individual fund statements and schedules and the statistical section as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining individual fund statements and schedules 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 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 individual fund statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, 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 17, 2013 on our consideration of the City'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.

PLL'P December 17, 2013 Irvine, California 12

Maaemn' Disusio an Analysi

CITY OF ANAHEIM Management's Discussion and Analysis (Unaudited)

As management of the City of Anaheim (City), we offer readers of the City's basic financial statements this narrative overview and analysis of the financial activities of the City as of and for the fiscal year ended June 30, 2013. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report, and the City's basic financial statements in the financial section of this report. AJI amounts, unless otherwise indicated, are expressed in thousands of dollars.

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS This discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements are comprised of three components:

1) government-wide financial statements, 2) fund financial statements, and 3) notes to financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

COMPONENTS OF THE ANNUAL FINANCIAL REPORT Government-wlde ftnancIal statements.

The government-wide financial statements are comprised of the Statement of Net Position and the Statement of Activities. These two statements are designed to provide readers with a brood overview of the City's finances utilizing the full accrual method of accounting, in a manner similar to a private-sector business. Under the full accrual method of accounting, transactions are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, assets, liabilities, revenues and expenses are reported in these statements for some items that will only result in cash flows in future fiscal periods (e.g. uncollected revenues and accrued but unpaid interest expense).

The Statement of Net Position presents information on all of the City's assets, deferred outflows of resources, liabilities and deferred inflows of resources, including capital assets and long-term liabilities, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City as a whole is improving or deteriorating.

The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. Functional activities are highlighted in this statement, whereby direct and indirect functional costs are shown net of related program revenue. This statement shows the extent to which the various functions depend on general taxes and non-program revenues for support, The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are Intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City Include general government, Police, Fire, Community Development, Planning, Public Works, Community Services, Public Utilities (street lighting),

Convention, Sports and Entertainment (Visitor and Convention Bureau and the Honda Center), and interest on related long-term debt. The business-type activities of the City include the electric, water and sanitation utilities, golf courses, and convention, sports and entertainment venues (Anaheim Convention Center, Angel Stadium of Anaheim, and The City National Grove of Anaheim) operations.

The government-wide financial statements include not only the City itself, but also the Anaheim Housing Authority, Community Center Authority, Anaheim Public Improvement Corporation, and Anaheim Public Financing Authority. Although these entities are legally separate, they function for all practical purposes as a part of the City, and therefore have been included I

N Notes to the j

Financial Statements Ci Af~fln Detail

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13

CITY OF ANAHEIM as blended component units as an integral part of the primary government.

The government-wide financial statements can be found on pages 25-27 of this report.

Fund financial statements. The fund financial statements focus on current available resources and are organized and operated on the basis of funds, each of which is defined as a fiscal and accounting entity with a self-balancing set of accounts, established for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, the governmental funds financial statements utilize the modified accrual basis of accounting, which focuses on near-term inflow and outflow of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial requirements.

Because the focus of the governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental funds Balance Sheet and the governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances provide a

reconciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains 18 individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and in the governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund and Housing Authority Special Revenue Fund, both of which are considered to be major funds. Data for the other 16 governmental funds are combined into a single, aggregated presentation.

Individual fund data for each of these nonmajor governmental funds is provided in the form of supplementary combining statements on pages 87-92, 98-99, and 102-103 of this report.

The City adopts an annually appropriated budget for all governmental and proprietary funds. Budgetary comparison statements for the General Fund and the major special revenue fund (Housing Authority) are required to be presented and are included in the basic financial statements on

,pages 33-34 of this report. Additionally, budgetary schedules for the other governmental funds have been provided to demonstrate compliance with the budget and can be found as part of other supplementary schedules on pages 93-97, 100-101, and 104-105 of this report.

The governmental funds financial statements can be found on pages 29-32 of this report.

Proprietary funds.

The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses its enterprise funds to account for its electric, water and sanitation utilities, golf courses, and convention, sports and entertainment venues operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its general benefits and insurance, motorized equipment, information services, and municipal facilities maintenance functions. Because these services predominantly benefit governmental rather than business-type functions, they have been included with governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary funds financial statements provide separate information for all of the enterprise funds, which are considered to be major funds of the City. Conversely, all of the internal service funds are combined into a single, aggregated presentation in the proprietary funds financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report.

The proprietary funds financial statements can be found on pages 35-39 of this report.

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City's own programs.

The City maintains three different types of fiduciary funds. The Investment Trust Fund is used to account for the external portion of the City's 14

CITY OF ANAHEIM investment pool; the Private-Purpose Trust Fund is used to account for the assets and liabilities held in trust for the Successor Agency to the former Redevelopment Agency (Successor Agency); the Agency Fund is used to account for monies collected and disbursed in a custodial capacity for the Mello-Roos districts in the City.

The fiduciary fund financial statements can be found on page 41-43 of this report.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 45-83 of this report.

Other supplementary Information.

In addition to the basic financial statements and accompanying notes, this report also presents combining individual fund statements referred to earlier in connection with nonmajor governmental funds and internal service funds. Also included are the budgetary comparison Schedules of Revenues, Expenditures and Changes in Fund Balances for all nonmajor special revenue funds, all debt service funds, and all capital projects funds. These statements and schedules can be found on pages87-110 of this report.

FINANCIAL HIGHLIGHTS (Amounts in thousands)

The City's total assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at the end of the current fiscal year by $2,101,492. Of this amount,

$151,424 represents unrestricted net position, which may be used to meet the City's ongoing obligations to citizens and creditors.

The City's governmental activities represent $1,121,819 (53%)

and the business-type activities account for $979,673 (47%) of the City's total net position.

The City's net position increased as a result of the current fiscal year's operations. The net position of the City's governmental activities increased $82,761 (8%); business-type activities net position increased $26,186 (3%).

At the close of the current fiscal year, the City's governmental funds reported a combined fund balance of $249,292, an increase of $47,214 in comparison with the prior fiscal year.

Approximately 6% of this amount ($15,689) is available for spending at the City's discretion.

At the end of the current fiscal year, spendable, unrestricted and unassigned fund balance for the General Fund was

$26,920 or 11% of total General Fund expenditures.

The City's total capital assets increased by $108,705 (4%).

Capital assets in the City's governmental activities increased by $77,020 (6%) and business-type activities capital assets increased by $31,685 (2%) during the current fiscal year.

The City's total long-term liabilities increased by $42,995 (2%)

during the current fiscal year; of this amount, long-term liabilities in the City's governmental activities increased by

$27,531 (4%), and business-type activities increased by $15,464 (I%).

15

CITY OF ANAHEIM GOVERNMENT-WIDE FINANCIAL ANALYSIS NET POSITION JUNE 30, 2013 AND 2012 Governmental Activities Business-type Activities Total Government 2012 As restated 2013 2013 2012 As restated 2013 2012 As restated Current and other assets Capital assets, net Total assets Deferred outflows of resources Total assets and deferred outflows of resources Other liabilities Long-term liabilities Total liabilities Deferred inflows of resources Total liabilities and deferred inflows of resources Net position:

Net investment in capital assets Restricted Unrestricted Total net position 522,708 486,199 633,328 610,270 1,156,036 1,096,469 1,392,527 1,315,507 1,575,358 1,543,673 2,967,885 2,859,180 1,915,235 1,801,706 2,208,686 2,153,943 4,123,921 3,955,649 2,377 2,590 5,932 7,590 8,309 10,180 1,917,612 1,804,296 2,214,618 2,161,533 4,132,230 3,965,829 55,797 52,773 62,306 59,466 118,103 112,239 739,996 795,793 795,793 894,625 196,853 30,341 1,121,819 712,465 765,238 765,238 831,430 190,868 16,760 1,039,058 1,098,642 1,160,948 73,997 1,234,945 787,459 71,131 121,083 979,673 1,083,178 1,142,644 65,402 1,208,046 780,093 61,235 112,159 953,487 1,838,638 1,956,741 73,997 2,030,738 1,682,084 267,984 151,424 2,101,492 1,795,643 1,907,882 65,402 1.973,284 1,611,523 252.103 128,919 1,992,545 At the end of fiscal year 2013, the City's net position totaled $2,101,492. The largest portion of the City's net position $1,682,084 (80%) reflects its investment in capital assets (e.g. land, buildings, utility plant, machinery, equipment, and infrastructure), net of any related outstanding debt that was used to acquire those assets. The City uses these assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.

An additional portion of the City's net position $267,984 (13%) represents resources that are subject to external restrictions on how they may be used. The increase in restricted net position of $15,881 is primarily due to unspent restricted resources of $12,340 for capital projects primarily related to streets, roads and transportation improvements.

The remaining balance of $151,424 (7%) is unrestricted net position that may be used to meet the City's ongoing obligations to citizens and creditors. The City's total unrestricted net position Increased by $22,505, of which governmental activities increased by $13,581 and business-type activities increased by $8,924 as a result of the current fiscal year's operations.

16

CITY OF ANAHEIM CHANGE IN NET POSITION YEAR ENDED JUNE 30, 2013 AND 2012 Governmental Activities 2013 2012 Business-type Activities Total Government REVENUES Program revenues:

Charges for services 64,138 Operating grants and contributions 112,507 Capital grants and contributions 71,472 General revenues:

Taxes:

Property taxes 64,311 Sales and use taxes 65,445 Transient occupancy taxes 102,936 Motor vehicle license fees 331 Other taxes 7,756 Unrestricted investment earnings 1,094 Other 1,857 Total revenues 491,847 EXPENSES Program activities:

Governmental activities:

General government 13,275 Police 124,556 Fire 58,508 Community Development 82,769 Planning 16,917 Public Works 44,740 Community Services 28,925 Public Utilities 2,405 Convention, Sports and Entertainment 13,935 Interest on long-term debt 35,880 Business-type activities:

Electric Utility Water Utility Sanitation Utility Golf Courses Convention, Sports and Entertainment Venues Total expenses 421,910 Excess before transfers and extraordinary gain 69,937 Transfers in (out) 12,824 Extraordinary gain Increase in net position 82,761 Effect of implementation GASB Statement No. 65 (1,300)

Net position at beginning of year, as previously reported 1,040,358 Net position at end of year 1,121,819 2013 604,388 952 6,698 2012 546,500 1,101 8,954 57,962 108,620 44,184 2013 668,526 113,459 78,170 64,311 65,445 102,936 331 7,756 4,417 1,857 1,107,208 87,574 59,654 90,376 7,272 3,598 873 460,113 3,323 10,216 615,361 566,771 11,617 117,840 58,027 95,683 15,648 41,228 28,282 2,315 13,584 42,910 13,275 124,556 58,508 82,769 16,917 44,740 28,925 2,405 13,935 35.880 2012 604,462 109,721 53,138 87,574 59,654 90,376 7,272 13,814 873 1,026,884 11,617 117,840 58,027 95,683 15,648 41,228 28,282 2,315 13,584 42,910 386,698 58,369 55,957 4,114 45,484 977,756 49,128 102,882 152,010 1,848,172 2,000,182 427,134 32,979 12,571 102,882 148,432 891,926 1,040,358 417,008 57,056 52,813 4,473 45,001 576,351 39,010 (12,824) 26,186 (6,337) 959,824 979,673 386,698 58,369 55,957 4,114 45,484 550,622 16,149 (12,571) 3,578 956,246 959.824 417,008 57,056 52,813 4,473 45,001 998,261 108,947 108,947 (7,637) 2,000,182 2,101,492 17

CITY OF ANAHEIM REVENUES BY SOURCE - GOVERNMENTAL ACTIVITIES I

I Property taxes Capital grants 13%

and contributions 15%

Operating grants and contributions 23%

Taxes decreased $4,097 (2%) mainly due to a decrease in property taxes of $23,263 (27%) as a result of the dissolution of the former Redevelopment Agency pursuant to the enactment of the California Assembly Bill AB IX 26 in February 2012. This is partially offset by increases in transient occupancy tax (TOT) and sales and use tax. TOT increased $12,560 (14%)

due to a revitalized tourism industry and the opening of Disney's Cars Land. Sales and use tax increased $5,791 (10%) as a result in increased new car sales and a general improvement across most business sectors.

Charges for services increased $6,176 (11%) primarily due to increases in permits and fees of $3,097, with increased activities in construction and inspections, and a gain of $2,389 from the sale of low-and-moderate income housing land.

Operating grants increased $3,887 (4%) mainly due to an increase of $2,378 for Urban Area Security Initiative (UASI) grant reimbursements, $2,168 in the Narcotic Asset Forfeitures as a result of money and property seizures in drug-related incidents, and $2,318 in U.S. Department of Housing Urban Development (HUD) Section 8 Housing Choice Voucher (Section 8) rental assistance. These increases were partially offset by a decrease of $1,326 in Community Development Block Grant (CDBG) due to a reduction in the funding allocation, and a $1,645 decrease in gas tax shared revenues as the State Controller revised the gas tax allocation formulas during fiscal year 2013.

Capital grants and contributions increased by $27,288 (62%)

primarily due to grant reimbursements for the Anaheim Regional Transportation Intermodal Center (ARTIC) as the project progressed to the construction phase.

Unrestricted investment earnings decreased by $2,504 (70%)

due to the investment portfolio market value being less than the prior year, which resulted in the recognition of an unrealized investment loss in the current fiscal year.

Governmental activities net transfers in increased $253 (2%). There were no significant or unusual changes.

Governmental activities.

The most significant revenues of the governmental activities are general taxes (49%), which include transient occupancy taxes (21%), property taxes (13%), sales and use taxes (13%),

and other taxes (2%). Program revenues are 51% of the total revenues of the governmental activities, which include operating grants and contributions (23%), capital grants and contributions (15%), and charges for services (13%).

Public safety (Police and Fire) expenses are the most significant (43%) of all governmental activities expenses, followed by Community Development (20%), Public Works (11%), interest on long-term debt (9%), Community Services (7%) and various other programs (10%). Included in these amounts is depreciation expense, which is 8% of the total expenses for governmental activities.

Governmental activities revenues increased $31,734 (7%) in the current fiscal year due to the following:

18

CITY OF ANAHEIM EXPENSES AND PROGRAM REVENUES-GOVERNMENTAL ACTIVITIES REVENUES BY SOURCE-BUSINESS-TYPE ACTIVITIES C

$140

$120

$100

$80

$60

$40

$20 ulIu contributio 1%

Unrestricted

,ns investment earnings 1%

Operating grants and contributions

<1%

Capital grants

$0 6"

Charges for services 98%

a Program revenues u Expenses Governmental activities expenses decreased $5,224 (1%) in the current fiscal year due to the following:

The decreases of $12,914 (14%) in Community Development and interest on long-term debt of $7,030 (16%) were mainly due to the dissolution of the former Redevelopment Agency in the prior fiscal year.

These decreases were partially offset by an increase of $6,716 (6%) in Police that was primarily due to 6 new positions, increased salary and benefit costs and UASI grant expenditures. There were other increases throughout the governmental activities but most notably additional depreciation for new infrastructure assets ($405), additional outside legal costs ($994), and expanded graffiti abatement efforts ($703).

Business-type activities.

Business-type activities increased the City's net position by $26,186. Key elements of this change are as follows:

Charges for services of $604,388 increased $57,888 (11%). The increase in charges for services was primarily due to an increase from the Electric Utility of $54,027 (14%) and Water Utility of $3,037 (5%).

The increase in the Electric Utility charges for services is partly due to increased retail sales revenue of $15,390 (5%). The City Council approved a 5% base rate increase effective December 11, 2011 in response to sustained increased power costs. This rate increase was in effect the entire fiscal year of 2013 versus only half of the previous fiscal year. Additionally, retail sales volume increased by 1.5%. Wholesale revenues increased by $6,816 (35%) mainly due to higher prices and additional surplus power available from the increasing renewable resources purchased during this fiscal year. Transmission revenues increased $7,931 (23%) mainly due to the increased statewide transmission demand with the shutdown of the San Onofre Nuclear Generating Station (SONGS) and rates set by the California Independent System Operator (CAISO).

Finally, Rate Stabilization Account (RSA) revenues are recognized to meet debt service coverage ratios to maintain bond ratings increased by $17,000 (71%)

due to increased costs of operations. Information relating to the RSA can be found in note 1 of the notes to the financial statement, 19

CITY OF ANAHEIM The increase in Water Utility charges for services is mainly due to an increase of $3,104 (5%) from the sale of water because of increased customer demands. The Water Utility sold 62,804 acre feet of water during fiscal year 2013 as compared to 60,371 acre feet in fiscal year 2012.

EXPENSES AND PROGRAM REVENUES -

_1AtNfS&-TYPE_ ATIVITIO 0

R2 X!

$500

$450

$400

$350

$300

$250

$200

$150

$100

$50

$0 m

Electric Utility Water Utility Sanitation Golf Courses Convention, Sports &

Entertainment Venues w Expenses FINANCIAL ANALYSIS OF THE CITY'S FUNDS Governmental funds.

The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

At the end of the current fiscal year, the City's governmental funds reported total ending fund balances of $249,292, an increase of $47,214 in comparison with the prior fiscal year.

Of the total fund balance of

$249,292, restricted fund balance totaled $198,870 (80%) and indicates the use of resources are constrained by external parties, resource providers, constitutions or enabling legislations.

Unassigned fund balance totaled

$15,689 (6%) and is available for spending at the City's discretion, The remaining fund balance is $34,733 (14%), of which $7,188 is not in spendable form, $788 was committed for specific purposes, and $26,757 was assigned for particular purposes.

Governmental revenues totaled

$496,215 while expenditures were

$494,578.

The General Fund is the general operating fund of the City. At June 30, 2013, the General Fund reported a total ending fund balance of $38,884 and consisted of the following:

$2,531 was nonspendable for inventory, prepaid and other assets and a long-term interfund receivable

$1,766 was restricted for grant purposes 0

$788 was committed for loan assistance to the Successor Agency

$6,879 was assigned for encumbrances, subsequent year one-time budgeted service enhancements, and claims and judgments

$26,920 was unassigned General Fund total revenues increased $26,738 (11%).

Total taxes increased by $22,802 (11%) primarily due to the improvement in the overall economy. Taxes are the largest revenue sources of the General Fund and they accounted for $236,388 or 85% of the total General Fund revenues.

During fiscal year 2013, transient occupancy taxes (TOT) increased $12,560 (14%), property taxes increased by $5,361 (9%), sales and use taxes increased $4,206 (7%) and other taxes increased by $677 (11%). Licenses, fees, and permits increased $1,959 (12%); other revenues increased by

$1,906 (229%) as the City received a one-time property tax administration fee reimbursement of $1,916 from the County of Orange.

w Program revenues Total expenses of $576,351 Increased $25,729 (5%). The increase is primarily due to increases of $30,310 (8%) in the Electric Utility that were partially offset by a decrease of $3,144 (6%) in the Sanitation Utility.

The increase In the Electric Utility expenses is primarily due to an increase In power purchases of $34,400. The renewable power purchase increased by $17,751 to reach the resource mix of 25% by 2016; market power purchases increased by $10,810 and Canyon power costs increased by $5,195 due to outages at the Magnolia and San Juan plants.

The decrease in Sanitation Utility expenses is primarily due to a one-time loss of $4,284 last fiscal year for the disposal of capital assets. The Sanitation Utility transferred ownership of 24 City-owned automated trash collection vehicles to Republic Services, the City's solid waste collection franchisee, for one dollar in accordance with the Franchise Agreement.

20

CITY OF ANAHEIM General Fund expenditures increased by $11,174 (5%) primarily due to increases in the Police department of $4,365 (4%),

Planning of $1,622 (13%), City Attorney of $1,554 (32%), Community Services of $1,277 (6%),

and Community Development of $1,583 (602%).

The increase in Community Development was because the City provided a loan of $1,056 to assist the Successor Agency for project costs while it sought reimbursement from the State. The other most significant factors of the increases for these departments are discussed in the government-wide financial analysis of the governmental-activities.

The Housing Authority Fund revenues increased by $5,140 (7%) primarily due to an increase of $2,318 in HUD funding for Section 8 rental assistance and an increase in sales of land held for resale of $2,389. The Housing Authority expenditures decreased by $1,051 (1%) due to land acquisition for housing projects of $1,109 in the prior fiscal year.

Total nonmajor governmental funds revenues increased by $13,521 (11 %).

Intergovernmental revenues increased by $40,368 as grant reimbursable construction costs were received and made available during the current fiscal year; these projects included the Gene Autry Way and Katella Avenue. Licenses, fees and permits increased by $3,270 due to more new construction activities in the improved economy.

These increases were partially offset by decreases of $31,042 as a result of the dissolution of the former Redevelopment Agency in fiscal year 2012.

Total nonmajor governmental funds other financing sources increased by

$64,966 (655%).

Transfers in increased by $6,979, due to the increase in Lease Payment Measurement Revenues (LPMR) set-aside for the Resort debt service (see note 8 for more information regarding LPMR).

Additionally, the nonmajor governmental funds received loan proceeds

$31,500 for the acquisition of a real estate parcel for the ARTIC project.

Finally, prior year transfers of $34,629 were one-time and related to the dissolved Redevelopment Agency.

Total nonmajor governmental funds expenditures increased by $31,408 (21%) primarily due to increased capital outlay of $44,342 (82%), which was mainly attributable to ARTIC, and partially offset by decreases in Community Development expenditures of $10,837 (57%) due to the former Redevelopment Agency dissolution.

Proprietary funds. The City's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

The Electric Utility net position increased $19,002 (6%) in the current fiscal year. The most significant factors of the change in fund net position are discussed in the government-wide financial analysis of business-type activities.

The Water Utility fund net position increased $2,536 (1%) in the current fiscal year. The most significant factors of the change in fund net position ore discussed in the government-wide financial analysis of business-type activities.

The Sanitation fund net position increased $3,623 (3%) in the current fiscal year. There were no significant or unusual changes.

The Golf Courses fund net position increased $44 (less than 1%) in the current fiscal year. There were no significant or unusual changes.

The Convention, Sports and Entertainment Venues fund net position increased $2,505 (less than 1%) in the current fiscal year. There were no significant or unusual changes.

GENERAL FUND BUDGETARY HIGHLIGHTS During the year, the original budget was amended to increase appropriations by $2,976 (1%). The increase in appropriations was primarily the result of the carryover of prior year appropriations and amendments amounting to $974 and the reallocation of appropriations from other funds of $2,002. These amendments were to be funded from savings in other programs of the General Fund during the year.

General Fund revenues of $279,967 were greater than budgeted revenues of $266,122 by $13,845 (5%), primarily due to stronger than anticipated performance of transient occupancy taxes, property taxes and other various revenue sources as the economy continued to improve.

General Fund expenditures were less than budgeted. Of the total appropriations of $241,069, approximately 1%, or $2,915, went unspent. This was primarily due to labor savings as a result of employee turnover and the time between an employee leaving and the recruitment of a new employee.

21

CITY OF ANAHEIM CAPITAL ASSETS AND DEBT ADMINISTRATION CAPITAL ASSETS (net of accumulated depreciation)

JUNE 30, 2013 AND 2012 Governmental Activities Business-type Activities Total Government 2013 2012 2013 2012 2013 2012 Land Construction in Progress Building, structures, and improvements Utility plant Machinery and equipment Infrastructure Total 648,420 138,749 160,157 29,140 606,611 58,410 58,410 706,830 665,021 89,486 163,024 29,647 84,936 401,430 1,021,584 8,998 80.795 386,547 1,008,373 9,548 223,685 561,587 1,021,584 38,138 416,061 2,967,885 170,281 549,571 1,008,373 39,195 426,739 2,859,180 416,061 426,739 1,392,527 1,315,507 1,575,358 1,543,673 Capital assets. The City's investment in capital assets for its governmental and business-type activities at June 30, 2013 amounted to $2,967,885 (net of accumulated depreciation). This investment in capital assets included land, construction in progress, buildings, structures and improvements, utility plant, machinery and equipment, and infrastructure. The total increase over the prior fiscal year was 4%

($108,705),

of which governmental activities increased 6% ($77,020) and business-type activities increased 2% ($31,685).

The increase of capital assets in governmental activities was primarily due to capital asset additions of $111,629 offset by current year depreciation expense of $31,737, capital assets retirements of $1,680 and transfer to business-type activities of $1,192. Major capital asset projects during the current fiscal year include the following:

Additions of $67,000 for construction work in progress which includes construction of the Anaheim Regional Transportation Intermodal Center (ARTIC), the Anaheim Fixed Guideway project, Gene Autry

Way, Brookhurst Street, and various other public infrastructure construction.

Land acquisition for the ARTIC project of $32,500 and land right-of-way acquisitions for street-widening and other capital projects totaling

$3,31 6.

Acquisitions of various vehicles and equipment totaling $6,441.

Completion of $16,527 of construction work in progress that includes the Anaheim Canyon Station Pedestrian Connection ($4,544), streets

($4,157), right-of-way ($6,116) and various other projects ($1,710).

The increase in business-type activities is primarily due to increases in the following:

The Electric Utility increase of $5,977 (less than 1%) was mainly due to additions of $43,741 to construction in progress for the expansion or improvement of existing substations, transmission and distribution systems, the replacement of aging overhead electrical lines with state-of-the-art underground facilities, and upgrading equipment for the San Juan plant. This was partially offset by the current year additions to accumulated depreciation of $39,969.

The Water Utility increase of $15,515 (5%) was primarily due to additions of $24,576 to construction in progress for ongoing expansion and refurbishment of water transmission and distribution infrastructure, pumping plant and source of water supply, and was partially offset by the current year additions to accumulated depreciation of $9,742.

The Sanitation Utility increase of $5,418 (6%) includes sanitary sewer 22

CITY OF ANAHEIM improvements of $7,724 and was partially offset by current year additions to accumulated depreciation of $2,297, Convention, Sports and Entertainment increase of $5,156 (2%) primarily included capital asset additions of $14,900 for the construction of the Grand Plaza and various capital projects, and was partially offset by current year additions to accumulated depreciation of $13,112.

Additionally, the business-type activities completed

$86,800 In construction in progress, which includes Improvements to electric and water utility facilities, sanitary sewer Improvements and the Convention Center transit plaza.

Additional information on the City's capital assets can be found in note 6 of the notes to the financial statements, on pages 61-62 of this report.

LONG-TERM LIABILITIES JUNE 30, 2013 AND 2012 Governmental Activities Business-type Activities Total Government 2013 2012 2013 2012 2013 2012 General obligation bonds Revenue bonds Certificates of participation Capital lease obligations Notes and loans payable Self-insurance Compensated absences Decommissioning provision Total 2.605 613,481 10,020 1,369 54,877 39,422 18,222 3,185 613,259 11,085 1,694 25,546 39,343 18,353 2,605 3,185 1,477,468 1,502,840 863,987 38,000 65,322 889,581 38,000 24,652 48,020 1,369 120,199 39,422 18,222 49,085 1,694 50,198 39,343 18,353 130,945 1,795,643 131,333 130,945 131,333 739,996 712,465 1,098,642 1,083,178 1,838,638 Long-term llabIlltIes. The City's outstanding long-term liabilities, including bonds, certificates of participation, capital leases, notes and loans payable, self-insurance, compensated absences, and the provision for decommissioning costs totaled $1,838,638 at June 30, 2013. Of this total,

$739,996 (40%) was In governmental activities and $1,098,642 (60%) was in business-type activities, The City's governmental activities outstanding long-term liabilities increased $27,531 (4%) in fiscal year 2013. The increase is primarily due to the issuance of long term loan payable of $31,500 for the purchase of the ARTIC land, current year increase of revenue bond accretion of $15,233, and was partially offset by principal repayments of $20,060.

The City's business-type activities outstanding long-term liabilities increased

$15,464 (1%).

The increase is due to $46,600 note payable draw from a Revolving Loan Agreement, of which $44,000 will be used for a planned early retirement of the 2002-B Electric Revenue Bonds in July 2013.

The increase was partially offset by current year principal repayments of

$38,591.

Additional information on the City's long-term liabilities can be found in notes 7 and 8 of the notes to the financial statements, on pages 62-74 of this report.

23

CITY OF ANAHEIM ECONOMIC FACTORS There remains a focus on public pensions and their sustainability, Many assumptions are used to estimate the ultimate liability of pensions and the contributions that will be required to meet those obligations. One of the most significant factors used in determining the liability and the funding requirements is the rate of return that investments will yield prior to making payments, known as the discount rate.

The City's pension plans currently utilize a discount rate of 7.5%, which is used in determining the unfunded pension liability and funding requirements.

If it is determined in the future that an even lesser rate of return is more appropriate, there will be a significant increase in the unfunded liability and the contributions required to meet those obligations.

The Governmental Accounting Standards Board also has issued new standards related to the accounting and reporting for pensions that are required to be implemented for the fiscal year beginning July 1, 2014. The City is currently evaluating the potential impacts to the financial statements from implementation of these new standards.

Additional information about the City's retirement plans can be found in note 10 of the notes to the financial statements on pages 75-78 of this report, as well as multi-year trend information as part of the required supplementary information on page 85.

0 Recently, the State of California enacted pension legislation that went Into effect in January 2013 and applies mainly to new public employees.

Some of the major changes include mandatory cost sharing by employees, reducing the overall benefit level (e.g. percentage of pay), Increasing the retirement age, and placing a cap on the salary used to determine retirement benefits.

The impacts to the City for these changes for future employees has yet to be determined.

0 For the 2014 fiscal year, the City appropriated $263,504 in estimated available resources of $291,457 for General Fund spending. This leaves approximately $27,953 in estimated available reserves, which is 11% of General Fund appropriations. The City's long-standing policy is to maintain General Fund reserves of at least 7% to 10% of annual appropriations, The City annually reviews all of its fees as part of the budget adoption process. Developer, construction, and other fees applicable to residents and development doing business in the City are adjusted in June of each year, generally by the average of the Consumer Price Index (CPI). CPI for 12 months was 2.0 in January 2013. This is consistent with the City's policy of recovering costs without placing an undue financial burden on existing tax and rate payers.

California Senate Bill IX 2 signed into law in April 2011 mandated that all California utilities are required to reach 25% renewable power in their power portfolios by 2016, and 33% by 2020. The higher renewable power costs will raise future power supply costs in fiscal year 2014.

REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances.

Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Office of the Finance Director, City of Anaheim, 200 South Anaheim Boulevard, Suite 643, Anaheim, California, 92805.

24

Basic Financial Statements

CITY OF ANAHEIM Statement of Net Position June 30, 2013 (in thousands)

ASSETS Cash and cash equivalents Investments Accounts receivable, net Accrued interest receivable Internal balances, net Due from other governments Notes receivable, net Inventories Land held for resale, net Prepaid and other assets Restricted cash and cash equivalents Restricted investments Unamortized prepaid bond insurance Bond payment receivable Pipeline receivable Net other post-employment benefits (OPEB) asset Due from the Successor Agency Capital assets, net:

Nondepreciable Depreciable Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding bonds Total deferred outflows of resources LIABILITIES Accounts payable Wages payable Due to other governments Interest payable Arbitrage rebate liability Deposits Unearned revenues Long-term liabilities:

Due within one year Due In more than one year Total liabilities DEFERRED INFLOWS OF RESOURCES Regulatory credits Total deferred Inflows of resources NET POSITION Net Investment In capital assets Restricted for:

Debt service Capital projects Community development Streets, roads and transportation improvement projects Other purposes Unrestricted Total net position Governmental Activities 69,097 143,241 20,705 486 17,357 56,036 73,258 988 16,973 5,625 43,897 38,911 1,608 11,017 23,509 787,169 605,358 1,915,235 2,377 2,377 29,653 5,929 1,163 7,177 7,527 4,348 45,231 694,765 795,793 Business.type Activities 45,521 90,294 59,618 1,646 (17,357) 10,288 67,643 121,694 246,007 1,345 6,545 84 143,346 1,432,012 2,208,686 5,932 5,932 42,784 1,105 10,981 167 7,026 243 94,406 1,004,236 I,160,948 73,997 73997 787,459 20,571 39,967 10,593 121,083 979,673 Total 114,618 233,535 80,323 2,132 56,036 73,258 11,276 16,973 73,268 165,591 284,918 2,953 6,545 84 11,017 23,509 930,515 2,037,370 4,123,921 8,309 8,309 72,437 7,034 1,163 18,158 167 14,553 4,591 139,637 1,699,001 1,956,741 73,997 73,997 1,682,084 21,550 100,521 80,127 43,321 22,465 151,424 2,101.492 894,625 979 60,554 80,127 43,321 11,872 30,341 1,121,819 e accompanying notes are an intergral part of these financial statements.

25

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CITY OF ANAHEIM Statement of Activities Year Ended June 30, 2013 (in thousands)

Program Revenues Net (Expense) Revenue and Changes In Net Position Indirect Expenses Expenses Allocation Operating Charges for Grants and Services Contributions Capital Grants and Contributions Governmental Business-type Activities Activities Total Functions/Programs Governmental activities:

General government Police Fire Community Development Planning Public Works Community Services Public Utilities Convention, Sports and Entertainment Interest on long-term debt Total governmental activities Business-type activities:

Electric Utility Water Utility Sanitation Utility Golf Courses Convention, Sports and Entertainment Venues Total business-type activities Total government 25,076 121,006 57,692 82,461 16,106 44,595 28,490 2,405 13,754 35,880 427,465 413,938 56,087 52,491 4,296 43,984 570,796 998,261 (11,801) 3,550 816 308 811 1,670 9,859 9,912 9,151 6,404 734 14,957 1,102 79,494 1.945 135 145 14,012 13,430 60,106 435 3,556 845 2,553 181 9,574 8,678 (5,555 64,138 112,507 71,472 (10,871)

(99,740)

(47,494) 6,011 (8,568) 42,808 (21,971)

(2,405) 4,317 (35,880)

(173,793)

(10,871)

(99,740)

(47,494) 6,011 (8,568) 42,808 (21,971)

(2,405) 4,317 (35,880)

(173,793) 3,070 969 322 177 1,017 5,555 451,958 60,785 57,230 4,759 29,656 604,388 668,526 276 242 434 952 113,459 3,782 754 906 1,256 6,698 78,170 38,732 4,759 5,565 286 (13,6551 35,687 (173,793) 35,687 General revenues:

Taxes:

Property taxes Sales and use taxes Transient occupancy taxes Motor vehicle license fees Other taxes Unrestricted investment earnings Other Transfers Total general revenues and transfers Change in net position Net position at beginning of year, as restated Net position at end of year 64,311 65,445 102,936 331 7,756 1,094 1,857 12,824 256,554 82,761 1,039,058 1,121,819 38,732 4,759 5,565 286 (13,655) 35,687 (138,106) 64,311 65.445 102,936 331 7,756 4,417 1,857 247,053 108,947 1,992,545

$ 2,101,492 3,323 (12,824)

(9,501) 26,186 953,487 979,673 The accompanying notes are an intergrol part of these financial statements.

27

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CITY OF ANAHEIM Balance Sheet Governmental Funds June 30, 2013 (in thousands)

ASSETS Cash and cash equivalents Investments Accounts receivable, net Accrued interest receivable Notes receivable, net Due from other funds Due from other governments Inventories Land held for resale, net Prepaid and other assets Restricted cash and cash equivalents Restricted investments Due from the Successor Agency Total assets LIABILITIES Accounts payable Wages payable Deposits Due to other funds Due to other governments Unearned revenue Total liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenues Unavailable resources - long-term notes receivable Unavailable resources - due from the Successor Agency Total deferred inflows of resources FUND BALANCES Nonspendable:

Interfund receivable Inventory Prepaid and other assets Restricted:

Anaheim Resort maintenance and improvement Capital projects Debt service Development impact projects Grant purposes Homebuyer assistance program Low and moderate income housing Rental assistance Streets, roads and transportation improvement projects Committed to loan assistance to the Successor Agency Assigned:

Debt service Capital projects Housing projects Claims and judgements Other purposes Unassigned Total fund balances Total liabilities, deferred inflows of resources, and fund balances The accompanying n General 9,576 19,851 12,797 38 3,414 18,248 239 154 1,056 65,373 6,063 2,745 3,592 342 836 2,207 15,785 9,648 1,056 I10.704 2,138 239 154 1,766 Housing Authority 9,277 19,230 52 62 47,296 280 18 16,973 38 2,285 8,176 103,687 504 57 2,845 327 351 4,084 36 47,296 8,176 55.508 38 172 29,740 2,322 Nonmajor Governmental Funds 25,205 52,253 1,261 207 25,921 6,989 37,770 4,619 41,612 38,911 14,277 249,025 15,505 183 1,090 7,717 24,495 18,019 25,921 14,277 58.217 4,619 8,577 2,664 61,625 57,890 4,839 4,124 25,151 8,042 13 166 '313 249,025 Total Governmental Funds 44,058 91,334 14,110 307 73,217 10,683 56,036 239 16,973 4,811 43,897 38,911 23,509 418,085 22,072 2,985 7,527 8,059 1,163 2,558 44,364 27,703 73,217 23,509 124.429 2,138 239 4.811 8,577 2,664 61,625 57,890 6,605 4,296 29,740 2,322 25,151 788 760 8,042 11,063 2,400 4,492 185299 788 760 11,063 2,400 4,479 26,920 38,884 44.095 65,373 103,687 otes are an intergral part of these financial statements.

29

CITY OF ANAHEIM Reconciliation of the Governmental Funds Balance Sheet To the Statement of Net Position June 30, 2013 (in thousands)

Total fund balances - governmental funds Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in the operation of governmental funds are not current financial resources and, therefore, are not reported in the funds. These assets consist of:

Land 648,420 Construction in progress 138,749 Buildings, structures and improvements 266,752 Machinery and equipment 49,685 Infrastructure 767,155 Accumulated depreciation (495,968)

Total capital assets, net Other long-term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenues in the funds.

Unamortized prepaid bond insurance ($1,608) and deferred refunding bond charges ($2,377) are not current financial resources, and, therefore, are not reported in the funds.

Internal service funds are used by management to charge the costs of certain activities, such as insurance, employee benefits, and fleet services, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Position.

Compensated absences, not otherwise included in the internal service funds, are not due and payable In the current period and, therefore, are not reported in the funds.

Long-term liabilities of governmental funds, including bonds ($616,086), certificates of participation ($10,020), notes and loans payable ($54,877), and accrued interest payable

($7,177) are not due and payable in the current period and, therefore, are not reported in the funds.

Net position of governmental activities 249,292 1,374,793 124,429 3,985 57,775 (295)

(688,160)

$1,121,819 The accompanying notes are an intergral part of these financial statements.

30

CITY OF ANAHEIM Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year Ended June 30, 2013 (in thousands)

Revenues:

Property taxes Sales and use taxes Transient occupancy taxes Other taxes Licenses, fees and permits Intergovernmental revenues Charges for services Fines, forfeits and penalties Use of money and property Other Total revenues Expenditures:

Current:

City Council City Administration City Attorney City Clerk Human Resources Finance City Treasurer Police Fire Community Development Planning Public Works Community Services Public Utilities Convention, Sports and Entertainment Capitol outlay Debt service:

Principal retirement Interest charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources (uses)

Net change in fund balances Fund balances at beginning of year Fund balances at end of year General 63,581 62,793 102,936 7,078 17,941 3,205 13,775 2,907 2,513 2,740 279,469 Housing Authority Nonmajor Governmental Funds 730 4,317 110,193 17,086 1,623 3,594 137,543 47 72,620 22 3,922 2,592 79,203 456 3,507 6,342 891 1,296 3,545 1,983 108,425 55,073 1,846 14,350 13,525 23,730 2,398 723 64 120 76,376 55 76,431 2,772 130 9,277 1,054 8,060 1.435 11,862 1,538 9,279 98,482 18,948 19,808 179,993 (42,450) 44,850 (1,473) 31,500 74,877 32,427 133,886 166.313 Total Governmental Funds 64,311 62,793 102,936 7,078 22,305 186,018 30,883 2,907 8,058 8,926 496,215 456 3,507 6,462 891 1,296 3,675 1,983 117,702 56,127 86,282 15,785 25,387 25,268 2,398 10,002 98,601 18,948 19,808 494,578 1,637 73,470 (59,393) 31,500 45,577 47,214 202,078 249,292 238,154 41,315 28,469 (57,920)

(29,451 11,864 27,020 38,884 151 151 2,923 41,172 44,095 The accompanying notes are on intergral part of these financial statements.

31

CITY OF ANAHEIM Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds to the Statement of Activities Year Ended June 30, 2013 (in thousands)

Net change in fund balances - total governmental funds Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlay as expenditures. However, in the Statement of Activities the costs of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay

($98,601) exceeded depreciation ($27,258) in the current period.

Transfers of capital assets between governmental funds and proprietary funds do not require the use of financial resources and are not reported as transfers in the funds.

The net effect of other miscellaneous transactions involving capilal assets (i.e., sales, trade-in, retirements and contributions) is to increase net position.

Revenues in the governmental funds provide current financial resources but are not reported as revenues in the Statement of Activities as they have previously been reported.

Proceeds from long-term debt provide current financial resources to governmental funds, but the issuance of debt increases long-term liabilities in the Statement of Net Position.

Payments of principal on long-term debt use current financial resources in the governmental funds but the repayment reduces long-term liabilities in the Statement of Net Position.

Certain expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures In governmental funds.

Internal service funds are used by management to charge the costs of certain activities, such as insurance, employee benefits, and fleet services, to individual funds. The net expense of the internal service funds is reported with governmental activities.

Change in net position of governmental activities 47,214 71,343 (1.192) 7,246 (12,588)

(31.500) 18,948 (12,013)

(4,697)

$ 82,761 The accompanying notes are an intergral part of these financial statements.

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CITY OF ANAHEIM Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Budgetary Basis Actual -- General Fund Year Ended June 30, 2013 (in thousands)

Revenues:

Property taxes Sales and use taxes Transient occupancy taxes Other taxes Licenses, fees and permits Intergovernmental revenues Charges for services Fines, forfeits and penalties Use of money and property Other Total revenues Expenditures:

City Council City Administration City Attorney City Clerk Human Resources Finance City Treasurer Police Fire Community Development Planning Public Works Community Services Public Utilities Convention, Sports and Entertainment Total expenditures Excess of revenues over expenditures Other financing sources (uses):

Transfers in Transfers out Total other financing uses Net change in fund balance Fund balance at beginning of year Fund balance at end of year Original Budgeted Amounts 57,746 62,370 96,027 6,512 17,631 2,093 13,351 3,660 2,371 1,442 263,203 535 3,648 5,606 920 1,427 3,922 2,418 107,915 54,974 400 15,166 13,587 24,366 2,357 852 238,093 25,110 28,723 (53,679)

(24,956) 154 27,020 Final Budgeted Amounts 60,569 62,370 96.027 6,512 17,631 2,189 13,351 3,660 2,371 1,442 266,122 535 3,648 6,351 920 1,427 3,922 2,440 108,425 55,073 1,846 15,170 13,683 24,379 2,398 852 241,069 25.053 30,286 (55,242)

(24,956) 97 27,020 27,117 Actual Amounts 63,581 62,793 102,936 7,078 17,941 3,205 13,775 2,907 2,513 3,238 279,967 456 3,507 6,342 897 1,296 3,545 2,004 108,425 55,073 1,846 14,350 13,562 23,730 2,398 723 238,154 41,813 28,749 (57,920)

(29,171) 12,642 27,020 39,662 (778) 38,884 Variance with Final Budget 3,012 423 6,909 566 310 1,016 424 (753) 142 1,796 13,845 (79)

(141)

(9)

(23)

(131)

(377)

(436)

(820)

(121)

(649)

(129)

(2,915) 16,760 (1,537)

(2,678)

(4,215) 12,545 12,545 Adjustment to reconcile to GAAP:

Receipt of interfund receivable Ending fund balance - GAAP basis 33 The accompanying notes are an intergral part of these financial statements.

CITY OF ANAHEIM Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Budgetary Basis Actual -- Housing Authority Year Ended June 30, 2013 (in thousands)

Revenues:

Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues Expenditures:

Community Development Total expenditures Original Budgeted Amounts 31 75,750 10,705 1,347 87,833 78,945 78,945 8,888 2,000 2,000 Final Budgeted Amounts 31 75,750 10,705 1,347 87,833 79,005 79,005 8,828 2,000 2,000 Actual Amounts 47 72,620 22 10,478 2,592 85,759 76,276 76,276 9,483 151 (280)

(129)

Variance with Final Budget 16 (3,130) 22 (227) 1,245 (2,074)

(2,729)

(2,729) 655 (1,849)

(280)

(2,129)

Excess of revenues over expenditures Other financing sources (uses):

Transfers in Transfers out Total other financing sources Net change in fund balance 10,888 10,828 9,354 (1,474)

Fund balance at beginning of year Fund balance at end of year 41,172 52,060 41,172 52,000 Adjustments to reconcile to GAAP:

Proceeds on sale of land held for resale Gain on disposition of land held for resale Decllne In value of land held for resale Disbursement of Interfund loan Ending fund balance - GAAP basis 41,172 50,526 (9,799) 3,243 (155) 280 44,095 (1,474)

The accompanying notes are an intergral part of these financial statements.

34

CITY OF ANAHEIM Statement of Net Position Proprietary Funds June 30, 2013 (in thousands)

Business-type Activities - Enterprise Funds Convention, Sports and Electric Water Sanitation Golf Entertainment Utility Utility Utility Courses Venues Governmental Activities -

Internal Service Total Funds ASSETS Current assets:

Cash and cash equivalents Investments Restricted cash and cash equivalents Restricted investments Accounts receivable, net Accrued interest receivable Note receivable Interfund receivable Inventories Bond payment receivable Prepaid and other assets Total current assets 17,538 36,354 62,515 17,939 43,220 1,218 5,073 10,515 1,632 1,312 7.422 75 13,768 24,473 2,302 7,312 111 272 8,870 565 18,387 197 117 1,547 2

240 45,521 90,294 66,646 19,251 59,618 1,646 10,288 2,040 11,124 306,428 25,039 51,907 4,448 179 41 117 749 814 83,294 9,683 602 9,950 1,154 198,417 27,785 3

2,040 20 47,966 956 31,304 Noncurrent assets:

Restricted cash and cash equivalents, less current portion Restricted Investments, less current portion Unamortized prepaid bond insurance Bond payment receivable, less current portion Pipeline receivable Accounts receivable, less current portion Interfund receivable, less current portion Prepaid and other assets Net other post-employment benefits (OPEB) asset Capital assets:

Land Buildings, structures and improvements Utility plant Machinery and equipment Construction in progress Total capital assets Less accumulated depreciation Capital assets, net Total noncurrent assets Total assets 33,688 209,461 1,254 1,860 7,175 I

17,114 90 2,386 10,120 4,505 55,048 226,756 1,345 4,505 84 56,519 84 56,519 35,671 1,179,622 34,814 1,250,107 (422,668) 827,439 1,128,361 1,326,778 2,339 385,322 42,539 430,200 (120,692) 309,508 318,628 346,413 316 97.365 4,767 7,225 109,673 (11,436) 98.237 115,441 163407 1,949 16,675 1,074 19,698 (10,544) 9,154 9,154 10,110 18,135 513,405 25,506 358 557,404 (226,384) 331,020 348,031 379,335 58,410 627,445 1,564,944 31,347 84,936 2,367,082 (791,724) 1,575,358 1,919,615 2,226,043 2,147 49 11,017 7,837 57,265 65,102 (47,368) 17,734 30,947 114,241 DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding bonds Total deferred outflows of resources 3,352 168 3,352 168 2,412 5,932 2,412 5,93 35 The accompanying notes are an inlergral part of these financial statements.

CITY OF ANAHEIM Statement of Net Position Proprietary Funds June 30, 2013 (in thousands) (continued)

Business-type Activities - Enterprise Funds Convention, Sports and Electric Water Sanitation Golf Entertainment Utility Utility Utility Courses Venues Governmental Activities -

Internal Total Service Funds LIABILITIES Current liabilities (payable from current assets):

Accounts payable Wages payable Interest payable Compensated absences Long-term obligations Unearned revenues Deposits Interfund payable Total current liabilities (payable from current assets) 23,031 10,757 391 183 3,605 84 352 8

861 38,606 298 964 728 728 9.497 536 4,091 104 37,114 Current liabilities (payable from restricted assets):

Accounts payable 3,133 Wages payable 134 Interest payable 8,131 Arbitrage rebate liability 158 Long-term obligations 68,898 Total current liabilities (payable from restricted assets) 80,454 Total current liabilities 117,568 Noncurrent liabilities:

Interfund payable, less current portion Long-term obligations, less current portion 663,275 Provision for decommissioning costs 131,333 Total noncurrent liabilities 794,608 Total liabilities 912,176 750 11,690 1,059 9

1,876 2,944 14,634 91,820 91,820 106,454 600 4,825 1,045 7

866 384 2,302 7,127 44,575 44,575 51,702 3

548 911 13,215 243 1,582 16,927 23,248 243 7,026 652 71,467 7,581 2,944 13,737 8,808 1,790 34,860 4,178 141 197 10,253 167 71,158 197 85,897 911 17,124 157,364 2,138 73,233 2,138 73,233 3,049 90,357 2,138 872,903 131,333 1,006,374 1,163,738 34,860 36,173 36,173 71,033 DEFERRED INFLOWS OF RESOURCES Regulatory credits Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted for:

Debt service Capital projects Other purposes Unrestricted Total net position 67,963 6,034 67,963 6.034

_________73,997

_________73,997 231,291 16,536 15,852 10,593 75,719 349,991 223,032 1,274 2,670 7,117

$234,093 60,323 384 9,829 41,169

$111,705 9,154 263,659 2,377 11,616 (2,093) 13,738

$ 7.061

$, 291,390 787,459 20,571 39,967 10,593 135,650 994,240 (14,567) 979,673 16,365 26,843 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.

Net position of business-type activities 36

CITY OF ANAHEIM Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds Year Ended June 30, 2013 (in thousands)

Business-type Activities - Enterprise Funds Operating revenues:

Sales of light and power Transmission revenues Sales of water Solid waste collection fees Wastewater fees Street cleaning fees Green fees and cart rentals Facilities rental Concession fees Other Total operating revenues Operating expenses:

Cost of purchased power Fuel and generation of power Cost of purchased water Treatment and pumping of water Maintenance, operations and administration Insurance premiums and claims Compensated absences and other benefits Depreciation and amortization Total operating expenses Operating income (loss)

Nonoperating income (expenses):

Intergovernmental revenues Investment income (loss)

Debt service recovery Interest expense Gain (loss) from disposal of capital assets Total nonoperating income (expenses)

Electric Utility 405,760 41,854 4.344 451,958 279,842 21,987 42,937 39,969 384,735 67,223 1,991 Convention, Sports and Water Sanitation Golf Entertainment Utility Utility Courses Venues 60,145 40,764 11,894 3,227 4,478 136 640 1,345 145 60,785 57,230 4,759 27,729 6,896 9,357 9,742 53,724 7,061 276 788 48,586 2,297 50,883 6,347 242 181 (1,755)

(9)

(1,341) 5,006 906 (2,289) 3,623 108,082

$111,705 3,883 545 4,428 331 (4)

(33)

(37) 294 (250) 44 7,017 7,061 23,236 5,025 1,395 29,656 26,713 13,112 39,825 (10,169) 367 434 (4,812)

(112)

(4,123)

(14,292) 2,448 14,349 2,505 288,885 291,390 Total 405,760 41,854 60,145 40,764 11,894 3,227 4,478 23,236 5,161 7,869 604,388 279,842 21,987 27,729 6,896 131,476 65,665 533,595 70,793 518 3,323 434 (41,111) 1121)

(36,957) 33,836 7,890 14,475 (28,491) 27,710 (1,5241

$ 26,186 Governmental Activities

• Internal Service Funds 157,813 157,813 37,260 9,500 112,710 4,479 163,949 (6,136)

(236)

(87) 299 (24)

(6,160)

(61)

(6,221) 49,429 43,208 (31,480)

(3,031)

(29,489)

(1,967)

Income (loss) before contributions and transfers 37,734 5,094 Capital contributions 3,782 754 Transfers in 110 16 Transfers out (22,624 (3,328)

Change in net position 19,002 2,536 Net position at beginning of year, as restated 330,989 231,557 Net position at end of year 349,991 234,093 Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds.

Change in net position of business-type activities The accompanying notes are an intergral part of these financial statements.

37

CITY OF ANAHEIM Statement of Cash Flows Proprietary Funds Year Ended June 30, 2013 (in thousands)

Business-type Activities - Enterprise Funds Convention, Sports and Electric Water Sanitation Golf Entertainment Utility Utility Utility Courses Venues Governmental Activities -

Internal Total Service Funds Cash flows from operating activities:

Receipts from customers and users Receipts from interfund services provided Payments to suppliers Payments for salaries, wages and other benefits Payments for interfund services used Payments for insurance premiums and claims Other receipts (payments)

Net cash provided by (used for) operating activities 457,545 2,019 (305,121)

(35,790)

(8,808) 59,728 330 (28,616)

(13,028)

(4,324) 55,526 15 (37,997)

(6,887)

(3,173) 4,476 (3,069)

(497)

(287) 29,211 606,486 2,364 157,694 (8,452)

(383,255)

(23,961)

(16,631)

(72,833)

(126,377)

(2.682)

(19,274)

(3,266)

(9,210) 1,587 (48) 1,446 135,075 (5,168) 1,330 257 109,845 14,090 8,814 880 Cash flows from noncapital financing activities:

Receipt of interfund balances Payment of interfund balances Transfers in Transfers out (22,573)

Operating grant receipts Net cash provided by (used for) noncapital financing activities (22,573) 16 (3,263) 298 (2,949)

(2,289) 150 (2,139)

(250)

(250)

Cash flows from capital and related financing activities:

Proceeds from sale of capital assets Capital contributions Capital purchases Proceeds of borrowing, net of premium Transfer to bond escrow agent Bond Issuance costs Principal payments on long-term debt Interest payments Debt service recovery Payment of interfund balances for capital purposes Transfers in (out) for capital purposes Net cash used for capital and related financing activities Cash flows from Investing activities:

Purchase of investment securities Proceeds from sale and maturity of investment securities Interest received Collection of note receivable Net cash provided by (used for) investing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 3,169 (43,501) 147,984 (96,603)

(470)

(18,995)

(33,880) 318 (23,355)

(1,880)

(4,532) 1,360 (7,441)

(880)

(2,118)

(164)

(50) 14,298 14,314 (28,375) 448 14,298 (13,613) 4,847 (15,603)

(90,064) 147,984 (96,603)

(470)

(12,756)

(34,511)

(4,547)

(45,127) 2,444 2,444 (498) 45 (30,462)

(111,953) 13 (10)

(61)

(58) 357 (3,477)

(1,112)

(87)

(4,319)

(21,222) 21,642 852 (8,273) 33,312 25,039 110 (65)

(42,186)

(29,514)

(498)

(9,079)

(712)

(93,116) 83,249 6,709 (3,158) 41,928 71,813 113,741 (5,897) 5,793 1,090 17 1,003 (17,370) 25,935 8,565 (13,775) 10,204 619 (2,952)

(5,356) 38,540 33,184 (241) 236 4

1JJ)

(83) 355 272 (14,236) 7,667 690 (5,879)

(20,597) 32,050 11,453 (127,265) 107,149 9,112 17 (10,987)

(1,478) 168,693 167,215 The accompanying notes are an intergral part of these financial statements.

38

CITY OF ANAHEIM Statement of Cash Flows Proprietary Funds Year Ended June 30, 2013 (in thousands) (continued)

Business-type Activities - Enterprise Funds Electric Water Utility Utility 67,223 7,061 Convention, Governmental Sports and Activities -

Sanitation Golf Entertainment Internal Utility Courses Venues Total Service Funds 6,347 331 (10,169) 70,793 (6,1361 Reconciliation of operating income (loss) to net cash provided by (used for) operating activities:

Operating income (loss)

Adjustment to reconcile operating income (loss) to net cash provided by (used for) operating activities:

Depreciation and amortization Increase in provision for decommissioning costs Changes in assets and liabilities that provided (used) cash:

Accounts receivable Inventories Prepaids and other assets Note receivable Accounts payable Wages payable Unearned revenues Compensated absences, (OPEB) and self-insurance liability Deposits Regulatory credits Total adjustments Net cash provided by (used for) operating activities 39,969 388 (951)

(1,378)

(10,026) 6,047 16 9,742 (743)

(35)

(140)

(1,810)

(1) 2,297 (415) 530 (1) 545 13,112 (24) 27 3

(154) 16 (1,070) 2 (70) 65,665 388 (2,287)

(1,413)

(10,150) 3,724 19 (70) 4,479 (1,030)

(24)

(756) 15 (275)

(382) 291 (1,350)

(14)

(8) 8,571 24 42,622 7,029 S109,845 14,090 56 (2)

(221)

(189) 8,595 2,467 549 11,615 64,282 968

$ 8,814 8

1,4 135,075 (5,168)

Schedule of noncash investing, capital and noncapital financing activities:

Capital assets financed through capital leases Capital contributions 613 Transfers in (out) of capital assets (51)

Decrease in fair value of investments (4,593) 436 2,448 51 (279) 3,497 (5,515) 787 (956)

(255)

(380)

(8)

Reconciliation of cash and cash equivalents:

Cash and cash equivalents Restricted cash and cash equivalents, current portion Restricted cash and cash equivalents, noncurrent portion Total cash and cash equivalents 17,538 5,073 62,515 1,632 33,688 1,860 I13,741 8,565 13,768 272

$8,870 45,521 25,039 2,302 197 66,646 17,114 2,386 55,048 1_33,184 272 11,453 167,215 25,039 The accompanying notes are an intergral part of these financial statements.

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CITY OF ANAHEIM Statement of Fiduciary Net Position (Deficit)

Fiduciary Funds June 30, 2013 (in thousands)

ASSETS Restricted cash and cash equivalents Restricted investments Accrued interest receivable Accounts receivable, net Notes receivable, net Prepaid and other assets Unamortized debt issuance costs Land held for resale, net Capital assets, net Nondepreciable Depreciable Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred charge on refunding bonds Total deferred outflows of resources Investment Trust Funds 217 451 3

Successor Agency to the Former Anaheim Redevelopment Agency Private Purpose Trust Fund 37,687 624 151 67 1,843 467 2,572 18,098 32.539 45,094 139,142 2,017 2,017 Agency Funds 5,046 3,256 57 8,359 671 LIABILITIES Accounts payable Wages payable Interest payable Deposits Unearned revenues Due to City of Anaheim Due to bond holders Long-term liabilities:

Due within one year Due in more than one year Total liabilities 1,573 33 6,395 332 42 1,056 NET POSITION Held in trust for pool participants Held in trust for other purposes (deficit)

Total net position (deficit) 5,392 237,213 252,036 (110,877)

(110,877) 8,359 8,359 671 671 The accompanying notes are an intergral part of these financial statements.

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CITY OF ANAHEIM Statement of Changes in Fiduciary Net Position (Deficit)

Fiduciary Funds Year Ended June 30, 2013 (in thousands)

ADDITIONS Property taxes Contributions to pooled investments Interest and investment income Rental income Other Total additions DEDUCTIONS Distributions from pool investments Salaries and administration Program expenses Depreciation Interest expense Total deductions Investment Trust Funds 2,335 2,335 Successor Agency to the Former Anaheim Redevelopment Agency Private Purpose Trust Fund 27,994 440 2,028 290 30,752 2,983 6,758 1,599 13,065 24,405 2,701 Change in net position 2,701 (366) 1,037 671 6,347 Net position (deficit) held in trust at beginning of year, as restated Net position (deficit) held in trust at end of year (117,224)

(110,877)

The accompanying notes are an intergral part of these financial statements.

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CITY OF ANAHEIM Notes to Financial Statements (Amounts in thousands)

NOTE I -

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES:

The financial reporting entity As defined by U. S. generally accepted accounting principles (GAAP) that are established by the Governmental Accounting Standards Board (GASB), the financial reporting entity consists of the primary government, as well as its component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable. Financial accountability is defined as 1) appointment of a voting majority of the component unit's board, and either a) the ability to impose will by the primary government, or b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government; and 2) the component unit is fiscally dependent on and there is a potential for the component unit to provide specific financial benefit to or impose financial burden on the primary government regardless of whether the component unit has a) a separately elected government board, b) a governing board appointed by a higher level of government, or c) a jointly appointed board.

The accompanying financial statements present the City of Anaheim (City), the primary government, and its component units. The financial data of the component units are included in the City's reporting entity because of the significance of their operational or financial relationships with the City.

The component units described below are each legally separate from the City, but are so intertwined with the City that they are, in substance, the same as the City. They ore reported as part of and accountable to the City and blended into the government-wide and fund financial statements.

Anaheim Housina Authority (Housina Authority) is a separate entity primarily funded by the U.S. Department of Housing and Urban Development to administer funds received under the Federal Housing Assistance Payments program. City Council members, in separate session, serve as the governing board of the Housing Authority, and all accounting and administrative functions are performed by the City, The financial activity of the Housing Authority has been blended into the City's Comprehensive Annual Financial Report (CAFR) in the government-wide governmental activities and in the fund financial statements as the Housing Authority Special Revenue Fund.

Community Center Authority (CCA), a joint powers authority, was created primarily to finance the initial construction of the Anaheim Convention Center. A five-member board appointed by the City Council governs the CCA. The City has entered into a noncancelable long-term lease with the CCA. which provides for lease payments in amounts sufficient to meet the annual debt service requirements on the certificates of participation issued by the CCA to finance the construction of the facility. The lease is a financing arrangement, which transfers the ownership of the facility to the City at the end of the lease term, and the sole activity of the CCA is to provide financing for the City. As such, the financial data for the CCA has been blended into the City's CAFR in the government-wide business-type activities and in the fund financial statements with the City's Convention, Sports and Entertainment Venues Fund, as all activity related to the Anaheim Convention Center is accounted for in this enterprise fund. The capital lease has been eliminated in the financial statements. For a copy of the CCA's separate financial statements, contact the Finance Director of the City.

Anaheim Public Improvement Corooration IAPIC), a non-profit corporation, was created primarily to finance several construction projects in the City. City Council members, in separate session, serve as the governing board of APIC. The City has entered into noncancelable long-term leases with APIC, which provide for lease payments in amounts sufficient to meet the annual debt service requirements on the certificates of participation issued by APIC to finance these construction projects. The leases are financing arrangements, which transfer ownership of the constructed assets to the City at the end of the lease terms. The financial data of APIC has been blended into various governmental and business-type activities and funds of the City as applicable, and the capital leases have been eliminated.

Anaheim Public Financina Authority (Authority), a joint powers authority, was established as a vehicle to reduce local borrowing costs and promote greater use of existing and new financial instruments and mechanisms. City Council members, in separate session, serve as the governing board of the Authority.

Financial activity of the Authority has been blended into the City's CAFR into various governmental and business-type activities and funds of the City as applicable.

The City is a participant in three joint ventures and jointly-owned properties (see note 11), which are not considered part of the financial reporting entity, as the City does not have significant equity interests in the joint ventures and jointly-owned properties.

Basic financial statements In accordance with GASB Statement No. 34 - Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments, the basic financial statements include both government-wide and fund financial statements.

45

CITY OF ANAHEIM The government-wide financial statements (Statement of Net Position and Statement of Activities) report on the City and its component units as a whole, excluding fiduciary activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. All activities, both governmental and business-type, are reported in the government-wide financial statements using the economic resources measurement focus and the accrual basis of accounting, which includes long-term assets and receivables as well as long-term debt and obligations. The government-wide financial statements focus more on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period.

Generally, the effect of interfund activity has been removed from the government-wide financial statements, except for interfund services provided and used. Net interfund activity and balances between governmental activities and business-type activities are shown as internal balances, net, in the government-wide financial statements. The "doubling up" effect of internal service fund activity has been eliminated from the government-wide financial statements with the expenses shown in the various functions and programs on the Statement of Activities.

Further, certain eliminations are also made to transfers of resources between funds in the fund financial statements so that only the net amount of the transfers are shown in the governmental activities and business-type activities columns.

The government-wide Statement of Net Position reports all financial and capital resources of the City (excluding fiduciary funds). It is displayed in a format of assets and deferred outflows of resources less liabilities and deferred inflows of resources equal net position, with the assets and liabilities shown in order of their relative liquidity. Net positions are required to be displayed in three components:

1) net investment in capital assets 2) restricted, and 3) unrestricted. Investment in capital assets, represents capital assets net of accumulated depreciation which is reduced by outstanding balances of any bonds, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

Restricted net positions are those with constraints placed on their use by either: 1) creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments, or 2) law through constitutional provisions or enabling legislation. All net positions not otherwise classified as restricted, are shown as unrestricted. Generally, the City would first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net positions are available.

The government-wide Statement of Activities demonstrates the degree to which both direct and indirect expenses of the various functions and programs of the City are offset by program revenues. Direct expenses are those that are clearly identifiable with a

specific function or program.

Indirect expenses for administrative overhead are allocated among the functions and programs using a full cost allocation approach and are presented separately to enhance comparability of direct expenses between governments that allocate direct expenses and those that do not. Interest on general long-term debt Is not allocated to the various functions, Program revenues Include: I) charges to customers or users who purchase, use or directly benefit from goods, services or privileges provided by a particular function or program and 2) grants and contributions that are restricted to meeting the operational or capitol requirements of a particular function or program. Taxes, unrestricted investment income and other revenues not identifiable with particular functions or programs are included as general revenues. The general revenues support the net costs of the functions and programs not covered by program revenues.

Also, part of the basic financial statements are fund financial statements for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. The focus of the fund financial statements is on major funds, as defined by GASB Statement No.

34. Although this reporting model sets forth minimum criteria for determination of major funds (a percentage of assets, deferred outflows of resources, liabilities, deferred inflows of resources, revenues, or expenditures/expenses of fund category and of the governmental and enterprise funds combined), it also gives governments the option of displaying other funds as major funds. Other nonmajor funds, as well as the internal service funds, are combined in a single column on the fund financial statements.

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 Housing Authority Special Revenue Fund accounts for the providing of housing assistance to low and moderate-income families in the Anaheim area. Financing is provided primarily from Federal Section 8, U.S. Department of Housing and Urban Development (HUD) receipts.

The City reports the following major enterprise funds:

The Electric Utility Fund accounts for the operation of the City's electric utility, a self-supporting activity, which renders services on a user charge basis to residents and businesses located in Anaheim.

46

CITY OF ANAHEIM The Water Utility Fund accounts for the operation of the City's water utility, a self-supporting activity, which renders services on a user charge basis to residents and businesses located in Anaheim.

The Sanitation Utility Fund accounts for the operation of the City's solid waste and sanitation program, a self-supporting activity, which provides for the collection and disposal of solid waste, street sweeping, and sanitary sewer cleaning on a user charge basis to residents and businesses located in Anaheim.

The Golf Courses Fund accounts for the operation of the Anaheim Municipal ("Dad Miller") Golf Course and the Anaheim Hills Golf Course, a self-supporting activity that renders services on a user charge basis.

The Convention, Sports and Entertainment Venues Fund accounts for the operations of the Anaheim Convention Center, Angel Stadium of Anaheim, and The City National Grove of Anaheim. See note 12 for further discussions of the Angel Stadium of Anaheim and The City National Grove of Anaheim.

The internal service funds, which provide services to the other funds of the City, are presented in a single column in the proprietary funds financial statements.

Because the principal users of the internal service funds are the City's governmental activities, the assets and liabilities of the internal service funds are consolidated into the governmental activities column of the government-wide Statement of Net Position. The costs of the internal service fund services are spread to the appropriate function or program on the government-wide Statement of Activities and the revenues and expenses within the internal service funds are eliminated from the government-wide financial statements to avoid any doubling effect of these revenues and expenses. The City operates four internal service funds:

The General Benefits and Insurance Fund is used to account for employee compensated absences, retirement and health benefits, and self-insurance programs.

The Motorized Equipment Fund is used to account for motorized equipment used by City departments.

The Information and Communication Services Fund is used to account for data processing and telecommunication services provided to City departments.

The Municipal Facilities Maintenance Fund is used to account for office maintenance services and equipment used by City departments.

Fiduciary Funds account for assets held by the City in a trustee or agency capacity on behalf of others and, therefore, are not available to support City programs. The Fiduciary Funds are not included In the government-wide financial statements as they are not an asset of the City. The City reports the following fiduciary funds:

The Investment Trust Fund is used to account for the external portion of the City's investment pool, which commingles resources of legally separate entities administered by the City in an investment portfolio for the benefit of all participants.

The entities include two Joint Powers Authorities (JPA) governed by local boards. The City separately maintains these entities' money in two individual funds; these funds represent the assets, primarily cash and investment, and the related net position held in trust by the City to disburse these monies on demand.

The Private Purpose Trust Fund is used to account for resources legally held in trust for use by the Successor Agency to the Former Anaheim Redevelopment Agency (Successor Agency).

The Former Anaheim Redevelopment Agency, a former component unit of the City, dissolved on February 1, 2012 under the State of California Assembly Bill I X26.

The Agency Fund is used to account for the monies collected and paid on behalf of the Mello-Roos Districts located in the City.

Measurement focus and basis of accounting The governmental funds financial statements are prepared on a current financial resources measurement focus and modified accrual basis of accounting. To conform to the modified accrual basis of accounting, certain modifications must be made to the accrual method. These modifications are outlined below:

Revenue is recorded when it becomes both measurable and available (received within 60 days after year-end). Revenue considered susceptible to accrual includes: property taxes, sales and use taxes, transient occupancy taxes, licenses, fees and permits, intergovernmental revenues (including motor vehicle license fees), charges for services, fines, forfeits and penalties, and interest.

Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year.

47

CITY OF ANAHEIM Disbursements for the purchase of capital assets providing future benefits are considered expenditures. Bond proceeds are reported as other financing source.

With this measurement focus, operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.

This is the traditional basis of accounting for governmental funds and also is the manner in which these funds are normally budgeted. This presentation is deemed most appropriate to: 1) demonstrate legal and covenant compliance, 2) demonstrate the sources and uses of liquid resources, and 3) demonstrate how the City's actual revenues and expenditures conform to the annual budget. Since the governmental funds financial statements are presented on a different basis than the governmental activities column of the government-wide financial statements, a reconciliation is provided immediately following each fund statement. These reconciliations briefly explain the adjustments necessary to transform the fund financial statements into the governmental activities column of the government-wide financial statements.

The proprietary funds financial statements are prepared on the same basis (economic resources measurement focus and accrual basis of accounting) as the government-wide financial statements. Therefore, most lines for the total enterprise funds on the proprietary funds financial statements will directly reconcile to the business-type activities column on the government-wide financial statements. Because the enterprise funds are combined into a single business-type activities column on the government-wide financial statements, certain interfund activities between these funds are eliminated in the consolidation for the government-wide financial statements, but are included in the fund columns in the proprietary funds financial statements. The net costs of the internal service funds are also partially allocated to the business-type activities column on the government-wide financial statements. A reconciliation of the total enterprise funds on the fund financial statements to the business-type activities column on the government-wide financial statements is provided on the face of the fund financial statements.

Enterprise funds account for operations where the intent of the City is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges and fees. Under GASB Statement No. 34, enterprise funds are also required for any activity whose principal revenue sources meet any of the following criteria: 1) any activity that has issued debt backed solely by the fees and charges of the activity, 2) the cost of providing services for an activity, including capital costs such as depreciation or debt service, must legally be recovered through fees and charges, or it is the policy of the City to establish activity fees or charges to recover the cost of providing services, including capital costs.

On the proprietary funds financial statements, operating revenues are those that flow directly from the operations of the activity, i.e. charges to customers or users who purchase or use the goods or services of that activity. Operating expenses are those that are incurred to provide those goods or services. Non-operating revenues and expenses are items such as investment income and interest expense that are not a result of the direct operations of the activity.

The Electric and Water Utility funds follow the uniform system of accounts prescribed by the Federal Energy Regulatory Commission (Electric Utility) and the California Public Utilities Commission (Water Utility). The utilities are not subject to the regulations of these commissions.

The reporting focus for the investment trust fund and the private-purpose trust fund is upon net positions and changes in net positions and employs accounting principles similar to proprietary funds. The agency fund has no measurement focus but utilizes the accrual basis of accounting for reporting its assets and liabilities.

Cash and Investments The City pools available cash from all funds for the purpose of increasing income through investment activities. Investments in U.S. Treasury obligations and agency securities and medium term corporate notes are carried at fair value based on quoted market prices. Participating guaranteed investment contracts and flexible repurchase agreements are carried at fair value. Money market mutual funds are carried at fair value based on the fund's share price. The City's investment in the State of California Local Agency Investment Fund (LAIF) is carried at fair value based on the value of each participating dollar as provided by LAIF. LAIF is authorized by California Government Code (Government Code)

Section 16429 under the oversight of the Treasurer of the State of California, Commercial paper, participating guaranteed investment contracts and negotiable certificates of deposit are carried at amortized cost (which approximates fair value). Interest income, which includes changes in fair value, on investments is allocated to all funds on the basis of daily cash and investment balances. See note 3 for further discussion.

For purposes of the basic financial statements, the City considers cash equivalents to be highly liquid short-term investments that are readily convertible to known amounts of cash and mature within three months of the date they are acquired. Cash and cash equivalents are included in the City's cash and investments pool and in accounts held by fiscal agents.

48

CITY OF ANAHEIM Notes receivable In the government-wide financial statements, notes receivable of $73,258 includes accrued interest receivable of $13,181, ranging from 3% to 10% interest per annum, and is net of allowances of $10,653 for uncollectible accounts at June 30, 2013. Allowances for uncollectible accounts were estimated based on certain assumptions; therefore, actual results could differ from the estimates.

In the governmental funds financial statements, due to the extended period of time over which notes receivable are to be collected and the contingent nature of certain sources of repayment, the City has recorded deferred inflows of resources equal to the outstanding principal and accrued interest balance of the notes receivable.

Inventories Inventories are stated at average cost. Inventories in the General Fund are recorded as expenditures when used and are reported under the consumption method of accounting.

Prepaid and other assets Certain payments to vendors such as insurance premiums, prepaid rents, and deposits for real property acquisitions reflect costs applicable to future periods and are recorded as prepaid and other assets in both government-wide and fund financial statements. These costs will be recognized in the period when services are received or when the City receives title to the real property.

Land held for resale The Housing Authority has recorded parcels of land held for resale in their financial records. The properties held for resale are for the primary purpose of developing low and moderate income housing and are recorded at the lower of cost or estimated net realizable value. At June 30, 2013, land held for resale with an original cost of $35,442 was recorded net of the allowance for decline in value of $18,469 and totaled $16,973, with this amount offset by a restriction of fund balance for low and moderate Income housing in the Housing Authority major governmental fund financial statement.

Restricted assets Certain proceeds of the City's bonds, as well as certain resources set aside for their repayment, are classified as restricted on the Statement of Net Position, or Balance Sheet, because they are maintained in separate bank accounts and their use is limited by applicable debt covenants. Additionally, resources set aside by the Electric Utility for future decommissioning of its former ownership share of the San Onofre Nuclear Generating Station, Units 2 and 3 (SONGS) and the San Juan Generating Station, Unit 4, are classified as restricted on both the government-wide Statement of Net Position and proprietary funds Statement of Net Position.

Capital assets Under GASB Statement No.

34, all capital assets, whether owned by governmental activities or business-type activities are recorded and depreciated in the government-wide financial statements. No long-term capital assets or depreciation are shown in the governmental funds financial statements.

Capital assets, including public domain infrastructure (e.g., roads, bridges, sidewalks and other assets that are immovable and of value only to the City), are defined as assets with an initial, individual cost of more than $5 ($50 for infrastructure) and an estimated useful life of greater than one year. Capital assets are recorded at cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at the estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the capital asset or materially extend capital assets lives are not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the related capital assets.

Major outlays for capital assets and improvements are capitalized as the projects are constructed. Interest incurred during the construction phase of projects is reflected in the capitalized value of the asset constructed for proprietary funds.

For the year ended June 30, 2013, business-type activities capitalized net interest costs of $3,806 in the government-wide and fund financial statements. Total interest expense incurred by the business-type activities (and the enterprise funds on the proprietary funds statements) before capitalization was $44,917.

Capital assets are depreciated using the straight-line method over the following estimated useful lives:

Buildings, structures and improvements 5

Utility plant 5

Machinery and equipment 2

Infrastructure 25 to 85 years to 75 years to 40 years to 75 years The net book value of capital assets retired or disposed of, related salvage value proceeds and the costs of removal are recorded in accumulated depreciation in 49

CITY OF ANAHEIM the Electric Utility and Water Utility Funds. In all other cases, these amounts are recorded as gains or losses on disposal of capital assets.

Capital assets transferred between funds are transferred at their net book value (cost less accumulated depreciation), as of the date of the transfer.

Debt issuance costs Debt issuance costs, with the exception of prepaid insurance costs, are recognized as an outflow of resources (expense/expenditure) in the period when the debt is issued. Prepaid insurance costs are capitalized and amortized over the lives of the related debt issues on a basis that approximates the effective-interest method.

Bond refunding costs Bond refunding costs are deferred and amortized over the life of the new bond or over the life of the old bond, whichever is shorter, on a basis that approximates the effective-interest method. These costs are shown as a deferred outflow of resources on the Statement of Net Position deferred and will be recognized as an inflow of resources in the period that the amounts become available.

2) Regulatory credits accumulated from collections of the Electric and Water Utility customers reported in business-type activities.

These amounts provide recovery in current period for costs to be incurred in future periods. (Refer to discussion of Regulatory Credits that follows).

Deferred inflows of resources that are included in the fund financial statements and government-wide statements at June 30, 2013 are as follows:

General Housing Fund Authority Nonmajor Governmental Funds Governmental Funds Taxes Grants Other Revenues Notes and long term receivable Total 9,432 216 1,056

$ 10,704 Electric Utility

$ 67,963 9,432 36 18,019 18,055 216 55,472 40,198 96,726

$ 55,508 58,217

$124,429 Accretion Accretion is an adjustment of the difference between the price of a bond or certificate of participation (COP) issued at an original discount and the par value of the bond or COP. The accreted value is recognized as it accrues by fiscal year.

Deferred outflows of resources Deferred outflows of resources represent consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then.

In the Statement of Net Position, the City reported $2,377 in the governmental activities and $5,932 in the business-type activities of deferred charges on refunding bonds in this category. A deferred charge on refunding bonds results from the difference in the carrying value of debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

Deferred inflows of resources Deferred inflows of resources represent acquisitions of fund balance or net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City reported the followings in this category:

1)

Unavailable revenues measured under the modified accrual basis of accounting reported in governmental funds.

These amounts are Business-type activities Regulatory credits Water Utility 6,034 Total

$ 73,997 Regulatory credits The Electric Utility's Rates, Rules, and Regulations provide for the Rate Stabilization Account (RSA), formerly referred to as Power Cost Adjustment/Rate Stabilization Account, which contains two components: the Power Cost Adjustment (PCA) that was adopted by City Council on April 1, 2001, and the Environmental Mitigation Adjustment (EMA) that was adopted by the City Council on January 13, 2009. The PCA will reflect variations in the power supply or fuel costs. The EMA will allow the recovery of environmental mitigation costs, such as greenhouse gas emissions costs, the marginal cost differential between renewable power and traditional fossil fuel based power. The RSA provides the City with operational and billing flexibility to mitigate material fluctuations in the cost of energy, loss of revenues or unbudgeted costs including unexpected long-term loss of a generating facility, unplanned limits on the ability to transmit energy to the City, 50

CITY OF ANAHEIM or major disasters. The RSA funded by PCA and EMA collections are billed to customers through standard rates.

Since inception, the Electric Utility has collected $189,125 in regulatory credits related to PCA. As of September 12, 2012, the PCA rates were changed from

$0.0190 to $0.0150 per kWh for all domestic retail customers, excluding residential lifeline customers, and from $0.0145 to $0.0100 per kWh for all commercial, industrial and municipal customers.

At June 30, 2013, the deferred inflows of resources recorded for regulatory credits related to PCA totaled $40,707 for the Electric Utility. During fiscal year 2013, $40,756 was recognized as RSA revenues to mitigate the impact of energy costs and operation costs.

Since inception, the Electric Utility has collected $60,329 in regulatory credits related to EMA. As of September 12, 2012, the EMA rate was changed from

$0.0100 to $0.0150 per kWh for all domestic customers and from $0.0050 to

$0.0100 per kWh for all other customers. At June 30, 2013, the deferred inflows of resources recorded for regulatory credits related to EMA totaled $27,256. During fiscal year 2013, $244 was recognized as RSA revenues to mitigate the impact of environmental mitigation costs.

The Water Utility's rates, rules and regulations provide for a water regulatory credit account to reflect variations in the cost of water to the Water Utility and provide more stable retail water rates to the customers of the City's Water Utility. This rate stabilization account (RSA) provides increased flexibility by allowing the Water Utility to maintain financial performance indicators and goals specified in bond covenants.

The account is funded through expense reimbursements such as water supply cost refunds received from the Metropolitan Water District and Orange County Water District and other miscellaneous credits and revenue. At June 30, 2013 the deferred inflows of resources recorded for regulatory credits totaled $6,034 for the Water Utility. During fiscal year 2013, no PCA revenue was recognized for the Water Utility.

Compensated absences Compensated absences, vacation and sick pay, for all City employees are generally paid by the General Benefits and Insurance Fund, an internal service fund. The General Benefits and Insurance Fund is reimbursed through payroll charges to all other funds based on estimates of benefits to be earned and used during the fiscal year. It is the policy of the City to pay all accumulated vacation pay when an employee retires or terminates. Accumulated sick pay in excess of 175 hours0.00203 days <br />0.0486 hours <br />2.893519e-4 weeks <br />6.65875e-5 months <br /> per employee is paid to employees at their then current rate of pay in January each year or upon termination from the City. Employees are paid for all accumulated sick pay when they retire from the City. Vested vacation and sick pay benefits are accrued when incurred in the General Benefits and Insurance Fund and at June 30, 2013, totaled $17,927 and is included in long-term liabilities in the Statement of Net Position. Also included In long-term liabilities In the Statement of Net Position at June 30, 2013, Is compensatory time liability of $295.

Changes in the City's compensated absences liability In fiscal year 2013 were as follows:

Compensated absences liability at beginning of year Estimated compensated absence benefits earned Compensated absences used Compensated absences liability at end of year 18,353 20,365 (20,496) 18,222 Nuclear fuel and decommissioning costs Federal regulations require the Electric Utility to provide for the future decommissioning costs of its former ownership share of San Onofre Nuclear Generating Station (SONGS). The Electric Utility has established a provision for decommissioning costs of SONGS and restoration of the beachfront at San Onofre, California where it is located. A separate irrevocable trust account has been established for prior and future amounts funded and these amounts are classified as restricted assets in the accompanying statement of net position. At June 30, 2013, the provision for decommissioning costs totaled $127,373. For the year ended June 30, 2013, the Electric Utility has recorded decommissioning costs incurred for SONG in the amount of $52, which is included in the fuel and generation component in operating expenses.

The City sold its ownership share in SONGS to Southern California Edison (SCE) on December 29, 2006. The Electric Utility's decision to divest SONGS was largely based on the need for operating flexibility to provide both peak and base load power, ongoing cost concerns for environmental disposal of nuclear waste and marine mitigation, as well as escalating decommissioning costs. See note 11 for further discussion.

The California Public Utilities Commission approved a cost estimate by SCE for the decommissioning costs of SONGS. At June 30, 2013, SCE's future cost estimate for the Electric Utility's share of decommissioning costs is $112,879. The Electric Utility currently has $127,373 in irrevocable trust for the decommissioning costs. Based on an assumed 1.2% rate of return and SONG shutting down in January 2012, it is estimated that the Electric Utility's current reserve of $127,373 will grow to

$133,597 to fund its future decommissioning costs estimate of $132,053 in fiscal year 2017. On June 7, 2013, Southern California Edison announced the permanently retirement of SONGS plant. The Electric Utility will continue to fund the reserve and recognize this expense until the new decommissioning study is approved by the Nuclear Regulatory Commission.

51

CITY OF ANAHEIM The Electric Utility has a 10.04% ownership interest of the San Juan Generating Station, Unit 4 (SJ). The Electric Utility is providing for the future demolition and reclamation costs of its ownership share of SJ. As of June 30, 2013, the Electric Utility has recorded a provision for decommissioning costs for SJ of $3,960. For the year ended June 30, 2013, the Electric Utility has recorded decommissioning costs incurred for SJ of $440 in operating expenses. Based on the cost projections, the Electric Utility has estimated $440 in costs per year until 2027 to fund this obligation.

Pension plan Full-time City employees are members of the State of California Public Employees' Retirement System (PERS). The City's policy is to fund all pension costs accrued; such costs to be funded are determined annually as of July 1 by the System's actuary. See note 10 for further discussion.

Net position restricted by enabling legislation The government-wide Statement of Net Position reports $196,853 of governmental activities restricted net position, of which $46,678 is restricted by enabling legislation.

Fund balances In the fund financial statements, governmental funds report the following classifications:

Nonspendable fund balance includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The "not in spendable form" criterion includes items that are not expected to be converted to cash, for example, inventories, prepaid or long term loans and notes receivable.

Restricted fund balance includes amounts when constraints placed on the use of the resources are either imposed by external resource providers, constitutional provisions or enabling legislation.

Committed fund balance includes amounts that can be used only for the specific purposes pursuant to constraints imposed by formal action of the City's highest level of the decision-making authority, the City Council.

The City Council can modify or remove the commitments by taking the same kind of action it previously employed to commit those amounts.

Assigned fund balance includes amounts that the City intends to use for specific purposes but do not meet the criteria to be classified as restricted or committed. The City Council has by Resolution authorized the City Manager or his designee to establish, modify or rescind on assigned fund balance.

Unassigned fund balance accounts for the residual balance of the City's general fund and includes all spendable amounts not contained in other classifications. In other governmental funds, the unassigned classification reports a deficit balance resulting from overspending for specific purposes for which amounts had been restricted, committed or assigned.

Generally, the City would first apply restricted resources when expenditures incurred for which both restricted and unrestricted resources are available.

Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is applied first, followed by assigned fund balance. Unassigned fund balance is applied last.

In all governmental funds, encumbered amounts have been restricted or assigned for specific purposes for which resources have already been allocated. At June 30, 2013, encumbrances totaled $562, $35 and $22,765 in the General Fund, Housing Authority Special Revenue Fund, and other nonmajor governmental funds, respectively.

The accumulated deficit fund balance at June 30, 2013 for Transportation Improvement Projects included in nonmajor governmental funds in the amount of $3,794 will be eliminated in future years by the receipt of reimbursements for grant expenditures.

Budgetary principles The City is required by its charter to adopt an annual budget on or before June 30 for the ensuing fiscal year. The General, special revenue, debt service, and capital projects governmental fund types and proprietary fund types have legally adopted budgets approved by City Council. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the department level. From the effective date of the budget, the amounts stated herein as proposed expenditures/expenses become appropriations to the various City departments. Throughout the fiscal year the budget was amended to add supplemental appropriations. All amendments to the budget which change the total appropriation amount for any department require City Council approval and all increases in appropriations must be accompanied by an increase in revenue sources of a like amount to maintain a balanced budget. The City Manager has the authority to change individual budget line items within a department as long as the total department's appropriation amount is not changed.

52

CITY OF ANAHEIM The City utilizes an encumbrance system as a management control technique to assist in controlling expenditures. All appropriations lapse at the end of the fiscal year, except for capital projects which are carried forward until such time as the project is completed or terminated and for encumbered balances that are re-appropriated in the next year.

GASB Statement No. 34 allows that budgetary comparison statements for the General Fund and major special revenue funds be presented in the basic financial statements rather than as Required Supplementary Information. These statements must display original budget, amended budget and actual results.

Budgeted revenue amounts represent the original budget modified by City Council authorized adjustments during the year, which were contingent upon new or additional revenue sources. Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations during the year.

Budgets are generally prepared in conformity with GAAP using the modified accrual basis of accounting, with the exception of capital leases, or other similar instruments, and land held for resale, which are budgeted on a cash basis.

Property taxes Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on July 1 and are payable in two installments due on November 1 and February 1 and become delinquent after December 10 and April 10. The County of Orange, California (County) bills and collects the property taxes and remits them to the City in installments during the year. City property tax revenues are recognized when levied in the governmental funds to the extent that they result In current receivables collectable within 60 days after year-end. See note 8 for discussion of pledged property tax revenues.

The County is permitted by State law (Proposition 13) to levy taxes at 1% of full market value (at time of purchase) and can increase the property tax rate no more than 2% per year from the full market value at the time of purchase. The City receives a share of this basic levy proportionate to what it received in the 1976 and 1978 periods.

Entitlements, shared revenues and grants Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure-driven grants are recognized in the fund financial statements as revenue when the qualifying expenditures have been incurred, all eligibility requirements have been met, and reimbursement is received within the availability period.

Revenue recognition for Electric Utility, Water Utility, and Sanitation Utility Funds Revenue is recorded in the period in which services are provided. Residential and smaller commercial customers are billed bimonthly and all other customers monthly. At June 30, 2013 unbilled but earned service charges recorded in accounts receivable for the Electric Utility, Water Utility, and Sanitation Utility Funds amounted to $20,923, $4,327, and $3,747, respectively. See note 8 for discussion of pledged revenues.

Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. As such, actual results could differ from those estimates.

NOTE 2 -

NEW ACCOUNTING PRONOUCEMENTS; CHANGES IN ACCOUNTING PRINCIPLES AND RESTATEMENTS:

On July 1, 2012, the city adopted the following new accounting pronouncements issued by the GASB:

GASB Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements. This Statement addresses issues related to service concession arrangements (SCAs) between a transferor (a

government) and an operator (governmental or nongovernmental entity) in which (1) the transferor conveys to an operator the right and related obligation to provide services through the use of infrastructure or another public asset (a "facility") in exchange for significant consideration and (2) the operator collects and is compensated by fees from third party.

GASB Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statement No. 14 and No. 34.

This Statement modifies certain requirements for inclusion of component units in the financial reporting entity; it amends the criteria for reporting component units as if they were part of the primary government in certain circumstances, it also clarifies the reporting of equity interests in legally separate organizations.

GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements.

This Statement incorporates into the GASB's 53

CITY OF ANAHEIM guidance from all sources of generally accepted accounting principles for state and local governments so that they derive from a single source.

GASB Statement No. 63, Financial Reporting of Deferred Outflow of Resources, Deferred Inflows of Resources, and Net Position. This Statement provides guidance for deferred outflows of resources and deferred inflows of resources.

Deferred outflows and deferred inflows of resources are defined as a consumption of net positions by the government that is applicable to a future reporting period and the acquisition of net positions by the government that is applicable to a future reporting period.

Net position is defined as the residual of all other elements presented in a statement of financial position.

GASB Statement No. 65. Items Previously Reported as Assets and Liabilities.

This Statement establishes accounting and financial reporting standards that classify certain items that were previously reported as assets and liabilities as deferred outflows of resources or deferred inflows of resources, and recognizes certain items that were previously reported as assets and liabilities as outflows of resources or inflows of resources.

Accounting changes adopted to conform to the provisions of these pronouncements should be applied retroactively. Except for GASB Statement No. 65, the implementation of these pronouncements has no material effect on amounts reported in the City's financial statements.

The requirements of GASB Statement No. 65 caused the City to restate certain prior year net positions by the amount of the unamortized debt Issuance costs, as these costs should now be recognized as an expense in the period incurred.

The following table provides a reconciliation of net position at June 30, 2012, as previously reported, to net position at June 30, 2012, as restated:

The City is currently reviewing its accounting practices to determine the potential impacts on the financial statements for the following GASB Statements:

GASB Statement No. 66,an Amendment of GASB Statement No. 10 and No. 62. This Statement resolves the conflicting guidance that resulted from the Issuance of two pronouncements. The statement amends Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, by removing the provision that limits fund based reporting of an entity's risk financing activities to the general fund and the internal service fund type. It also amends Statement No. 62, Fund Balance Reporting and Governmental Fund Type Definition, by providing specific guidance on accounting for operating lease payments, purchased loan or group of loans, and service fees related to mortgaged loans. This Statement is effective for periods beginning after December 15, 2012.

GASB Statement No. 68, this Statement provides guidance for employers offering defined benefit pensions through plans administered as trusts or equivalent arrangements. It replaces certain requirements related to plan trusts in Statement No. 27 Accounting for Pension by State and Local Governmental Employers, as well as the requirements of Statement No. 50, Pension Disclosures.

This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources, and deferred inflows of resources, and expense/expenditures. For defined benefit pensions, this Statement identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service.

This Statement is effective for periods beginning after June 15, 2014. The impact to the City's financial statements in conforming to this Statement has yet to be determined.

Business-Governmental type Activities Activities Net position at June 30, 2012, as previously reported

$ 1,040,358 Reduction of unamortized debt issuance costs 959,824 General government Electric Utility Water Utility Sanitation Utility Convention, Sports and Entertainment Venues Net position at June 30, 2012, as restated (1,300)

(4,720)

(705)

(298)

(614)

$ 1,039,058 953,487 54

CITY OF ANAHEIM NOTE 3 - DEPOSITS AND INVESTMENTS:

Deposits and investments are comprised of the followings at June 30, 2013:

The City maintains a cash and investment pool, which includes the cash balances of all funds, and is invested by the City Treasurer to enhance interest earnings. The pooled interest earned, net of administrative fees, is reallocated to each fund based on their respective average daily cash balances.

The City's pooled investment fund has been reviewed by Standard and Poor's Corporation (S&P) and received a credit rating of AAf/SI in August 2012.

The City's investment policy further limits the permitted investments in Government Code Sections 53600 et al, 16429.1 and 53684 to the following:

obligations of the United States government, federal agencies, and government sponsored enterprises; medium-term corporate notes; certificates of deposit; bankers' acceptances; commercial paper; LAIF; repurchase agreements; reverse repurchase agreements; and money market mutual funds.

Deposits and investments are comprised of the following at June 30, 2013:

Deposits Investments Total deposits and investments 6,325 839,618

$ 845,943 Restricted Cash and Cash and Cash Cash Restricted Equivalents Investments Equivalents Investments Total Governmental activities:

General Fund Housing Authority 9,576 19,851 9,277 19,230 2,285 29,427 30,792 At June 30, 2013, deposits of $6,325 with a corresponding bank balance of

$10,527 were maintained in various federally regulated financial Institutions. The difference of $4,202 represents deposits in transit, outstanding checks, and other reconciling items. Deposits with bank balances of $766 are Insured by the Federal Depository Insurance Corporation. For deposits with bank balances totaling

$9,761, California state statutes require federally regulated financial institutions to secure a city's deposits by pledging collateral consisting of either government securities with a value of 110% of a city's total deposits or by pledging first trust deed mortgage notes having a value of 150% of a city's total deposits. The collateral is required by regulation to be held by the counterparty's agent in the name of the City.

Investments The City Treasurer prepares an investment policy statement annually, which is presented to the Budget, Investment and Technology Commission for review and the City Council for approval. The approved investment policy Statement is submitted to the California Debt and Investment Advisory Committee in accordance with Government Code.

The policy provides the basis for the management of a prudent, conservative investment program. Public funds are invested for the maximum security of principal and to meet daily cash flow needs while providing a return. All investments are made in accordance with the Government Code and, in general, the City Treasurer's policy is more restrictive than Government Code.

Investments authorized by the Government Code and the City's investment policy The following table identifies the investment types that are authorized for the City by its investment policy which is more restrictive than Government Code. The table also identifies certain provisions of the City's investment policy that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the Government Code or the City's investment policy.

NonmaJor govemmental funds 25,205 52,253 41,612 38.911 157,981 Intornal service funds 25,039 51,907 76,946 Total governmental activities 69,097 143.241 43.897 38,911 295,146 Business-type activities:

Electric UlilIty 17,538 36,354 96,203 227,400 377,495 Water Utility 5,073 10.515 3.492 8,487 27,567 Sanitation Utility Golf Courses Convonllon. Sports and 13,768 272 24,473 565 19,416 57,657 837 Entertainment Venues 8,870 Total business-lype aclivilles 45,521 Government.wide totals 114,618 Fiduciary funds Total cash and investments $

114,618 18,387 2,583 10,120 39,960 90,294 121.694 246.007 503.516 233,535 165,591 284,918 798,662 42,950 4,331 47,281 233,535 208.541

$ 289,249

$ 845.943 55

CITY OF ANAHEIM Minimum Maximum Maximum Rating Maximum Percentage Investment (S&P/Maodys Authorized Investment Type Maturity of Portfolio*

in One Issuer

/Fltch)

U.S. Treasury obligations U.S. agency securities Banker's acceptances Commercial paper Negotiable certificates of deposit Repurchase agreements Reverse repurchase agreements Medium-term corporate notes Money market mutual funds 5 Years 5 Years 180 days 270 days 360 days I Year 90 days 5 Years N/A 100%

100%

40%

25%

25%

30%

20%

30%

20%

$50 million per account 20%

100%

40%

5%

5%

5%

I year None 5%

10%

$50 million per account 5%

None None None A-i;P-1;F-I None None None A

None None None Authorized Investment Type U.S, Treasury obligations U.S. agency securities Guaranteed investment contracts Collateralized investment contracts Flexible repurchase agreements Money market mutual funds LAIF Maximum Percentage Maturity Allowed None None None None None None None None None None None None None None Investment In One lIsuor None None None None None None None None City of Anaheim Treasurer's investment portfolio None None LAIF N/A Time certificates of deposit (TCD) 1 Year At June 30, 2013, the following investments represent five percent or more of the City's total investments controlled by bond trustees:

Fair

• Excluding amounts held by bond trustees that are not subject to Government Code restrictions The City's pooled investments comply with the requirements of the investment

policy, GAAP requires disclosure of certain investments in any one issuer that exceeds five percent concentration of the total investments. At June 30, 2013, the following investments represent five percent or more of the City's total pooled investments:

Fair Iue Investment Type Value Issuer Blackrock #61 Federal Home Loan Bank LAIF Federal National Mortgage Association Investment Type Value Money market mutual fund

$ 54,904 14%

U.S. agency securities 51,620 13%

LAIF 45,352 11%

U.S. agency securities 35,926 9%

Morgan Stanley Flexible repurchase agreeement 32,257 8%

Federal Farm Credit Bank Dreyfus Treas 521 US Bank Money Market U.S. agency securities Money market mutual fund Money market mutual fund 23,382 6%

23,029 6%

21,342 5%

Federal National Mortgage Association U.S. agency securities LAIF LAIF Federal Farm Credit Bank U.S. agency securities Federal Home Loan Mortgage Corporation U.S. agency securities Federal Home Loan Bank U.S. agency securities 113,988 60,256 55,981 29,760 26.161 26%

14%

13%

7%

6%

All guaranteed investment contracts have downgrade language that requires collateral should credit ratings drop below certain levels.

Custodial credit risk Custodial credit risk for investments is the risk that the City will not be able to recover the value of investment securities that are in the possession of an outside party. All securities owned by the City with the exception of LAIF and money market mutual funds are deposited in trust for safekeeping with a custodial bank different from the City's primary bank. Securities are not held in broker accounts.

Funds held by LAIF and money market mutual funds are held in the City's name.

Custodial credit risk for investments held by bond trustees is the risk that the City will not be able to recover the value of investment securities that are in the possession of an outside party. All securities held by bond trustees are in the name of the bond issue in trust for safekeeping with the bond trustee, which is different from the City's primary bank.

Investments authorized by debt agreements Investment of debt proceeds held by bond trustees is governed by provisions of the debt agreements, rather than the general provisions of the Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

56

CITY OF ANAHEIM Interest rate risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The City Treasurer mitigates this risk by investing in longer-term securities only with funds that are not needed for current cash flow purposes and holding these securities to maturity. The City Treasurer uses the segmented time distribution method to identify and manage interest rate risk. In accordance with the City investment policy, the City Treasurer monitors the segmented time distribution of its investment portfolio and analysis of cash flow demand.

Investments held by bond trustees are typically long-term securities which are not adversely affected by interest rate changes. Guaranteed investment contracts for construction funds are usually limited to three years or less. Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity at June 30, 2013:

Investments Invesments controlled by CityTreasurer:

U.S. agency securities Medium - term corporate notes Medium - term corporate notes Medium - term corporate notes Medium - term corporate notes Medium - term corporate notes Medium - term corporate notes Medium - term corporate notes Medium - term corporate notes Medium - term corporate notes Commercial paper Money market mutual funds LAIF Total investments controlled by City Treasurer Investment controlled by bond trustees:

U.S. agency securities Guaranteed investment contracts Collaterized investment contracts Flexible repurchase agreements Money market mutual funds LAIF Total investments controlled by bond trustees Credit Rating (S&P/

Moody's)

AA+/Aaa A-/A3 A/A2 A+/A1 A+/A2 AA/Aal AA/Aa2 AA+/AI AA-/Aa3 AAA/Aaa A-i/P-1 AAA/Aoa Unrated FairValue 12 months 13 to 24 25 1o 36 37 to 60 6/30/2013 or less Months Months Months More than 60 Months 225,890 5.219 11,201 2,950 5,888 4,975 3,014 15,421 2,984 21.597 56,717 24,699 38,903 43,732 $

48,242 $

5,219 6,232 4,969 1,011 2,003 3,014 10,157 2,984 95,013 2,950 4,877 2,972 5,264 3,023 56,717 24,699 18,574 60,256 60,256 440,811 183.598 61,132 85,005 111,076 AA+/Aaa Unrated Unrated Unrated AAA/Aaa Unrated 126,651 40,874 4,880 51,324 129,726 49,190 8,492 10,703 27,436 10,135 1,211 41,533 4,022 $

26,717 3.669 40,621 129.726 45,352 45,352 398,807 224,268 38782 45,555 71,007 839,618 407.866 8

123,787 5

S 71.007 Total Investments 57

CITY OF ANAHEIM NOTE 4 - ACCOUNTS RECEIVABLE, DUE FROM OTHER GOVERNMENTS, DUE FROM THE SUCCESSOR AGENCY, INTERFUND RECEIVABLE AND PAYABLE BALANCES, AND CERTAIN INTERFUND TRANSACTIONS:

Accounts receivable Accounts receivable for the City's governmental and business-type activities, including the applicable allowance for uncollectible accounts at June 30, 2013, are as follows:

Due from other governments Due from other governments for the City's governmental activities at June 30, 2013, are as follows:

Governmental activities:

General Fund Housing Authority Nonmajor governmental funds Taxes Grants Other Total

$ 17,747 178 323

$ 18,248 Governmental activities:

General Fund Housing Authority Nonmajor governmental funds Internal service funds Total governmental activities Business-type activities:

Electric Utility Water Utility Sanitation Utility Golf Courses Convention, Sports and Entertainment Venues Total business-type activities Total accounts receivable Less:

Accounts Allowance for Receivable U ncollectibles Total 16,259 (3,462) 12,797 137 (85) 52 1,261 1,261 6,595 6,595 24,252 (3,547) 20,705 18 37,770

$ 37,966 Total due from other governments $ 17,747 18 37,770 323

$ 56,036 Revenues are reported net of estimated uncollectible amounts. Total estimated uncollectible amounts related to revenues of the current period are as follows:

General fund Electric Utility Water Utility Sanitation Total 827 771 72 182 1,852 43,586 7,462 7,404 117 (366)

(40)

(92) 43,220 7,422 7,312 117 1,571 (24) 1,547 60,140 (522) 59,618 84,392 (4,069) 80,323 58

CITY OF ANAHEIM Due from the Successor Agency Interfund receivable and payable balances The amount due from the Successor Agency at June 30, 2013 is $23,509. Due to the extended period of time over which the receivables are to be collected, the City has recorded deferred inflows of resources equal to the amount due.

On April 1, 2003 the City and the former Anaheim Redevelopment Agency entered into a Cooperation Agreement whereby the City will assist the Redevelopment Agency with the development of Westgate utilizing $10,000 of funds from the HUD Section 108 loan program. The amount is due to the City by annual installment through June 2024. At June 30, 2013, the amount due to the City is $7,928.

On June 1, 2010, the City and the former Anaheim Redevelopment Agency entered into a Cooperation Agreement whereby the City will assist the Redevelopment Agency with the rehabilitation of the historic Packing House site utilizing $7,000 of funds from the HUD Section 108

$15,000 loan proceeds.

The amount is due to the City by annual installment through June 2031. At June 30, 2013, the amount due to the City is $6,349.

In fiscal years 2010 and 2011, the former Anaheim Redevelopment Agency paid a total of $19,163 to the State of California Supplement Educational Revenue Augmentation Fund (SERAF).

Of this amount,

$8,500 was paid with funds borrowed from Housing Set-Aside property tax Increment. At June 30, 2013, the amount due to the City is $8,176.

On February 5, 2013, the City and the Successor Agency entered into a Cooperation Agreement whereby the City will assist the Successor Agency with loaning the proceeds of one-time allocation of the $1,563 unencumbered low-and moderate income housing fund for various Suc-cessor Agency projects. At June 30, 2013, the amount due to the City is $776.

On May 14, 2013, the City and the Successor Agency entered into a Cooperation Agreement whereby the City will assist the Successor Agency by providing a loan up to $1,500 for making homebuyer loans.

At June 30, 2013, the amount due to the City is $280.

Net internal balances between governmental activities and business-type activities of $17,357 are included in the government-wide financial statements at June 30, 2013.

Interfund receivables and payables that are included in the fund financial statements at June 30, 2013, are as follows:

Interfund Receivable:

Nonmojor Internal General Housing governmental service Fund Authority funds funds Total Interfund Payable:

Governmental Funds:

General Fund Nonmajor governmental funds Enterprise Funds:

Electric Utility Golf Courses Total 280 62 342 728 6,989 7.717 104 104 2,686 2,686 3,414 280 6,989 166

$ 10,849 Certain interfund balances at June 30, 2013 are generally short-term loans to relieve temporary cash deficits in various funds. The following interfund balance is expected to be repaid in more than one year:

General Fund Of the total interfund receivable in the General Fund, $2,686 is due from the Golf Courses Fund. On September 24, 2002, the City Council approved a loan up to $6,400 from the General Fund to the Golf Courses Fund for construction of the Anaheim Hills Golf Clubhouse. The loan is payable in annual amounts of not less than $548 beginning in July 2005 unti July 2023 and bears interest at the City's investment yield as of June 30th of each year.

59

CITY OF ANAHEIM Certain Interfund transactions NOTE 5 - BOND PAYMENT RECEIVABLE:

The net transfers of $12,824 from the business-type activities to the governmental activities on the government-wide Statement of Activities are primarily comprised of operational subsidies from business-type activities to the General Fund offset by debt service subsidies to the Convention, Sports and Entertainment Venues Fund and the transfers of capital assets from governmental activities to business-type activities.

Capital assets with net book value totaled $1,192 were transferred from the governmental activities to Business-type activities. This amount was accounted for as Capital Contribution in the Convention, Sports and Entertainment Venues Enterprise Fund financial statement.

The following interfund transfers are reflected in the fund financial statements at June 30, 2013:

Transfer In:

Enterprise Funds Convention, Nonmajor Sports and General Housing governmental Electric Water Entertainment Fund Authority funds Utility ility Venues Total On August 3, 1995, the Los Angeles Rams Football Company, currently the St.

Louis Rams (Rams), exercised its right to terminate its lease under the Fourth Amendment to the Exhibition Agreement between the Rams and the City (Rams Agreement), Under the Rams Agreement, the Rams became obligated to repay the City for the debt service on the 1979 Anaheim (California) Stadium Inc. Lease Revenue Bonds in the principal amount of $28,110, which obligation is supported by an irrevocable standby letter of credit with Dresdner Bank AG, will be repaid by August 15, 2015. The 1979 Anaheim (California) Stadium Inc. Lease Revenue Bonds were subsequently refunded, and are no longer outstanding, by a portion of the Convention, Sports and Entertainment Venues Fund 1993 Refunding Projects Certificates of Participation.

In December 2008, the 1993 Refunding Projects Certificates of Participation were refunded and replaced by the 2008 Lease Revenue Refunding Bonds. At June 30, 2013, there remained principal outstanding of $6,545 on the 2008 Lease Revenue Refunding Bonds. During fiscal year 2013, the Rams reimbursed the City $2,444 (representing $2,010 for principal and $434 for interest) for the current portion of their debt service obligation. The City accounted for the termination of the lease by recording a bond payment receivable from the Rams and a contribution to the Convention, Sports and Entertainment Venues Enterprise Fund in the amount of the debt obligation assumed by the Rams under the Rams Agreement.

Transfer Out:

General Fund Nonmajor governmental funds $

94 $

151 43,622 1,228 14,298 $ 57,920 1,473 61 Internal service fund Electric Utility Water Utility Sanitation Utility Golf Courses Total S

45 $

16 22,573 51 22,624 3.263 65 3,328 2.289 2,289 250 250

$28,469 151 44,850 $ 110 $

16 $

14,349 $87,945 The Interfund transfers generally are made for the purpose of debt service payments made from a debt service fund but funded from an operating fund or subsidy transfers. Except for the transfers of capital assets detailed previously, there were no other significant transfers during the fiscal year that were either non-routine in nature or inconsistent with the activities of the fund making the transfer.

60

CITY OF ANAHEIM NOTE 6 - CAPITAL ASSETS:

Capital asset activities for the year ended June 30, 2013, were as fo Beginning Transfer Balance Additions In (OutI Ilows:

Depreciation expense was charged to functions/programs of the City during fiscal year 2013 as follows:

Governmental activities:

Nondepreciable assets:

Land 606.611 Construction in progress 89,486 Total 696,097 Depreciable assets:

Buildings, structures and improvements 269,555 Machinery and equipment 104,962 Infrastructure 761,001 Total 1,135.518 Total assets 1,831,615 Less accumulated depreciation tar:

Buildings, structures and improvements (106,531)

Machinery and equipment (75,315)

Infrastructure (334,262)

Total accumulated depreciation (516,108)

Total governmental activities T$ 735 7

capital assets, net Business-type activities:

Nondepreclable assets:

Land 58,410 Construction in progress 80,795 Total 139,205 Depreciable asset Buildings, structures and improvements 599,059 Utility plant 1,507,419 Machinery and equipment 29,816 Total 2,136,294 Total assets 2,275,499 Less accumulated depreciation for:

Buildings, structures and Improvements (212,498)

Utility plant (499,046)

Machinery and equipment (20,2821 Total accumulated depreciation 731,826)

Total business-type activities

$ I,543,6/3 capital assets, net 35,816 $

6,116 67,000 (16,527) 102,816 (10.411) 2,160 3,252 6,393 73 260 5,894 8.813 9,219 111,629 (1,192)

(8.023)

(6,882)

(16,832)

Governmental activities:

Ending Deletions Balance General government Police (123) 648,420 Fire (1,210) 138,749 Community Development (1,333) 787,169 Planning Public Works (378) 274.589 Community Services (4,478) 106,950 Convention, Sports and Entertainment 767,155 (4,8561 1.148,694 Capital assets held by the City's internal service funds (6.189) 1,935,863 are charged to the various functions based on their usage of the assets 122 (114.432)

Total depreciation expense - governmental activities 268 1,286 688 305 109 17,786 2,885 3,931 4,479

$31,737

$39,969 9,742 2,297 545 13,112

$65,665 4,387 (77.810)

(351,094)

(31,737) 4,509 (543,336)

$-79,892 11.192) $

-1.-...

1392,527 90,941 (86,800) 90,941 (86,800) 1.398 27,199 1,049 60,036 1,054 757 3,501 87,992 94,442 1,192 (13,609)

(49,711) 12,345)

(65,6651

$-X 28,77

=19 58,410 84,936 143.346 (211) 627.445 (3,560) 1,564.944 (280) 31,347 (4,051) 2,223,736 (4,051) 2,367.082 Business-type activities:

Electric Utility Water Utility Sanitation Utility Golf Courses Convention, Sports and Entertainment Venues Total depreciation expense - business-type activities Capital leases Included in the capital assets amounts listed above capitalized leased assets:

Machinery and equipment Less accumulated amortization Capitalized leased assets, net are the following Governmental Activities 4,152 (2,159) 1,993 92 5,397 278 5,767

$--,716 (226,015)

(543,360)

(22,349)

(791,724)

$1,575,358 61

CITY OF ANAHEIM Fiduciary Fund NOTE 7 - SELF INSURANCE:

Successor Agency Capital asset activities for the year ended June 30, 2013 were as follows:

Nondepreciable assets:

Land Construction in progress Total Beginning Balance 15,568 14,965 30,533 Additions Transfers 4,746 (2,740) 4,746 (2,740)

Ending Balance

$ 15,568 16,971 32,539 Depreciable assets:

Buildings, structures and improvement 43,502 Machinery and equipment 265 Total 43,767 Total assets 74,300 Less accumulated depreciation for:

Buildings, structures and improvem, (609)

Machinery and equipment (37)

Total accumulated depreciation (646)

Total capital assets, net 73,654 832 832 5,578 (1,508)

(91)

(1,599) 3,979 2,740 47,074 265 2,740 47,339 79,878 (2,117)

(128)

(2,245)

$ 77,633 The General Benefits and Insurance Fund, an internal service fund, is used to account for self-funded workers' compensation related benefits, self-funded general liability claims, commercial insuronce purchases, and alternative risk financing vehicles; as well as benefit-related costs such as employee compensated absences, retirement, and health benefits. Revenues of the General Benefits and Insurance Fund are derived from cost-allocation charges to City departments using estimates of anticipated risk-transfer costs, new losses, payments on existing claims, and reserve development on known claims for the Insurance portion of the Fund; as well as anticipated benefits earned and insurance costs for benefits coverage for the General Benefits portion of the Fund.

In addition, the Fund receives interest income from reserves.

At June 30, 2013, the City was fully funded for self-funded retention for workers' compensation and general liability claim exposures (with retention levels of $750 per occurrence for workers' compensation claims and $1,000 per occurrence for general liability claims). Above these retained levels, the City's potential liability is covered through various commercial insurance and intergovernmental risk pooling programs (collectively, "Insurance"). Settled claims have not exceeded total Insurance in any of the past three years, nor does management believe that there are any pending claims that will exceed total Insurance coverage.

The unpaid claims liability included in the General Benefits and Insurance Fund is based on the results of actuarial studies and includes amounts for claims incurred-but-not-reported, known-claim development, and allocated loss adjustment expenses. Claims liabilities are calculated using a discount rate of 3% and consider the effects of inflation, multi-year loss development trends, and other economic and social factors. It is the City's practice to obtain full actuarial studies annually for its retained levels for general liability and workers' compensation coverages. "Premiums" are charged by the General Benefits and Insurance Fund using various allocation methods that include actual costs, trends in claims experience, exposure bases, and number of participants.

Changes in claims liability of the General Benefits and Insurance Fund and that relates to the governmental funds and reported in the governmental activities in the government-wide Statement of Net Position in fiscal years 2013 and 2012 were as follows:

Operating leases Housina Authority At June 30, 2013, the Housing Authority earned revenues as the lessor of land, carried at cost of $52,714 in the government-wide financial statements, under seven operating ground leases. These leases to developers are noncancelable.

Two of the leases are for a term of 55 years, expiring in 2055 and 2057; three of the leases are for a term of 57 years, expiring In 2060, 2063 and 2064 and two of the leases are for a term of 65 years, expiring In 2076. The total base rent amounts to be collected over the terms of the leases are $12,400, $8,700, $7,505, $7,900,

$5,200, $5,600 and $5,600 respectively, with simple interest accruing on unpaid portions at a rate of 4.0%, 4.5%, 4.0%, 4.0%, 4.0%, 2% and 2% respectively.

Minimum lease payments are calculated annually, based on residual receipts, as defined in the lease agreements. At June 30, 2013, the Housing Authority has recorded notes receivable due from developers related to these transactions of

$11,532 and is net of allowances of $2,120 for uncollected accounts in the government-wide financial statements.

62

CITY OF ANAHEIM 2013 2012 NOTE 8 - LONG-TERM LIABILITIES:

The following is a summary of changes in long-term liabilities reported in the government-wide financial statements for the year ended June 30, 2013:

Beginning Additions/

Reductions/

Ending Within Balance Proceeds Payments Balance One Year Claims liability at beginning of year Current year claims and changes in estimates Claims payments Claims liability at end of year

$39,343 7,064 (6,985)

$39,422

$35,405 10,281 (6,343)

$39,343 Above the retained limit of $750 per occurrence for workers' compensation losses, the City purchases excess coverage, utilizing both commercial insurance and an intergovernmental risk pooling program (CSAC-EIA), to statutory limits.

Above the retained limit of $1,000 per occurrence for liability losses, the City maintains excess coverage for all City operations to $140,000 per occurrence, excluding helicopter operations for which the City purchases $50,000, per occurrence, of commercial aviation liability insurance (on a first-dollar basis). The first layer of excess liability loss coverage is procured through the Authority for California Cities Excess Liability (ACCEL). a joint powers insurance authority, formed in 1986. pooling catastrophic general, automobile, personal injury, and public officials errors and omissions liability losses among twelve California cities, through both risk-sharing and commercial insurance joint-purchase arrangements. The City, therefore, continues to maintain some limited excess liability risk sharing exposure, above $1,000 per occurrence, directly with ACCEL.

This pooled coverage has exposure (i) from the run-out periods from prior years in which commerclal excess insurance was not obtained, and (ii) from an ACCEL retained layer for fiscal year 2013 of $4,000 in excess of $1,000. Each ACCEL member's share of pooled losses is based on a retrospectively-rated risk-sharing formula which includes, but is not limited to, exposure and loss experience factors.

In order to provide funds to pay claims, ACCEL collects an annual deposit from each member. The deposits are credited with investment income at the rate earned on ACCEL's Investments. At June 30, 2013, ACCEL's cash and investments totaled $46,863, of which $6,153 consists of deposits and interest on deposits provided by the City. The City has no specific equity interest in ACCEL. Deposits provided to ACCEL by the City are expensed when paid by the General Benefits and Insurance Fund.

ACCEL is responsible for deciding the risks it will underwrite, the monitoring, and handling of large claims, and arranging excess risk-financing programs. ACCEL does not have any debt outstanding. For a copy of ACCEL's separate financial statements, contact the Finance Director of the City.

Governmental activities:

Bonds payable:

General obiligation City lease revenue Accretion Unamortized bond premium/discount, net Total cops:

cily cops Total Capitalized lease obligations:

Internal Service Funds Total Notes and loans payable:

City Housing Authority Total Claims liaibilities (note 7)

Compensated absences (note 1)

Governmental activities total Business-type activities:

Bonds payable:

Electric Utility Water Utility Sanitation Utility Convention, Sports and Entertainment Venues Unamortized bond premium/discount, net Total cops:

Convention. Sports and Entertainment Venues Unamortized COP discount Total Notes and loans payable:

Electric Utility Water Utility Convention. Sports and Entertainment Venues Total Decommissioning provision Business-type activities total Government-wide total 3,185 468,360 147.294 15,223 (5801 2,605 (15,134) 453.226 162,517 610 17.000 2,395)_

133

_2,262) 616.444 15,223 (15,581) 616,086 17,610

!1,085 (1,065) 10,020 1,140 11,085 (1.065) 10,020 1,140 1.694 787 (1,112) 1,369 892 1,694 787 (t,112) 1,369 892 23,805 31,500 (2.169) 53,136 3.229 1,741 1.741 707 25,546 31.500 (2.1t69 54,877 3.936 39,343 7.064 (6.985) 39,422 7.916 18,353 20.365 (20,496) 18,222 13,737 712.465 74,939 (47,408) 739,996 45,231 701.755 85,740 45,295 45.587 92.130

( 115,205)

(950)

(880) 678.680 84,790 44.415 71,795 920 920 8,120 (7,756) 37.831 11,204 9,254 (2.187) 18,271 889.581 101,384 (126,978) 863.987 81,755 38,000 38.000 38.000 38,000 46,600 46,600 8,442 6,600 956 9,372 (930) 15,280 (5.000) 10,280 5,095 24.652 46,600 15,930) 65,322 12,651 130,945 388 131,333 1,083.178 148.372 (132.908) 1.098.642 94,406

_LZ 3.3,1 1 10.3161

$ 1.838.638 19.637 63

CITY OF ANAHEIM GOVERNMENTAL ACTIVITIES:

BONDS PAYABLE At June 30, 2013, bonds payable consisted of the following:

Fiscal Year Endina 6/30 2014 2015 2016 2017 Total Principal 610 635 660 700 2,605 Interest Total 92 702 67 702 41 701 14 714 214 2,819 City 1993 General Obligation Refunding Bonds 1997 Anaheim Lease Revenue Bonds Accretion 2007 Anaheim Lease Revenue Refunding Bonds 2008 Anaheim Lease Revenue Refunding Bonds Total Unamortized bond refunding costs/premium/discounts, net Range of Authorized Out-Date Final Interest Rates and standing Issued Maturity at Issue Date Issued 6/30/2013 11/01/93 10/01/16 4.0%-7.0%

$ 10,055 2,605 02/01/97 03/01/37 4.5%-6.0%

06/13/07 03/01/37 3.25%-5.5%

510,427 256,320 5,084 12/10/08 08/01/19 3.0%-5.0%

Lease oavment measurement revenues 200,543 162,517 In February 1997, the Anaheim Public Financing Authority sold $510,427 of lease revenue bonds to construct public improvements in The Anaheim Resort. In June 249,200 2007, the Authority sold $256,320 of lease revenue bonds to defease $248,335 of 3,483 the 1997 lease revenue bonds. The bonds are special obligations of the Authority 618,348 payable solely from lease payments to be made by the City to the Authority for the use and occupancy of the leased premises. Debt service requirements to maturity for these lease revenue bonds are paid from lease payment measurement revenues (LPMR) defined as amounts equal to: 1) 3% of the 15%

(2,262) transient occupancy taxes (TOT) (i.e. 20% of the total transient occupancy taxes)

$ 616,086 for all hotel properties in the City, excluding Disney properties, and 2) 100% of the incremental TOT, sales, and property tax revenues from all Disney properties over the 1995 base, adjusted each year by the CPI change, with a minimum 2%

increase annually. The City is not required to pay any additional sums should the LPMR fall short of the amount required to pay debt service on the bonds. The Walt Disney Company provided a guarantee to the bond insurer to enable the issuer to obtain municipal bond insurance.

Total governmental activities bonds Bonds Payable - City General obliaation refundina bonds The 1993 General Obligation Refunding Bonds were issued to finance storm drain Improvements and are payable from the levy of ad valorem taxes. Total principal and interest remaining on the bonds is $2,819, payable through October 2016.

During the fiscal year ended June 30, 2013, total principal and interest paid was

$698.

Debt service requirements to maturity for the 1993 General Obligation Refunding Bonds to be paid by the General Obligation Bonds Debt Service Fund from future property tax revenues are as follows:

LPMR began on January 1, 2001, with the first payment made to the trustee on July 7, 2001, for the LPMR generated during the period January through June 2001. Subsequent to that date, LPMR is collected and remitted to the trustee monthly. During the fiscal year ended June 30, 2013, $39,804 was remitted to the trustee.

Debt service requirements to maturity for the 1997 Anaheim Lease Revenue Bonds and the 2007 Anaheim Lease Revenue Refunding Bonds to be paid by the Anaheim Resort Improvements Debt Service Fund from future LPMR are as follows:

64

CITY OF ANAHEIM Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2037 Total Unamortized bond discount Total bonds Principal Interest Total 16,540 16,917 33,457 CERTIFICATES OF PARTICIPATION At June 30, 2013, certificates of participation consisted of the following:

18,510 20,630 22,900 11,667 66,086 80,633 96,466 116,311 449,743 (2,298) 447,445 15,894 14,751 13,479 26,332 142,382 160,653 181,723 176,254 748,385 748,385 34,404 35,381 36,379 37,999 208,468 241,286 278,189 292,565 1,198,128 (2,298) 1,195,830 Range of Authorized Date Final Interest Rates and Issued Maturity at Issue Date Issued Out-standing 6/30/2013 City 1993 Arena Land Refinancing 11/01/93 11/01/19 5.9%-7.50%

Total governmental activities COPs 21,210

$ 10,020

$ 10,020 Certificates of Participation Payable - City Included in interest is $162,517 related to accretion on capital appreciation bonds.

Certificates of participation debt service payments are to be paid from unrestricted revenues of the Certificates of Participation Debt Service Fund. COP debt service requirements to maturity are as follows:

Lease revenue refundina bonds - City Debt service requirements to maturity for the City's lease revenue bonds to be paid from unrestricted revenues of the Municipal Facilities Debt Service Fund are as follows:

Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2020 Total COPs Principal Interest Total 1,140 614 1,754 1,225 537 1,762 1,315 455 1,770 1,415 366 1,781 1,530 270 1,800 3,395 225 3,620 10,020 2,467 12,487 Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2020 Total Unamortized bond premium Principal Interest Total 460 151 611 479 131 610 506 111 617 463 89 552 501 66 567 1,074 55 1,129 3,483 603 4,086 36 36 3,519 603 4,122 65

CITY OF ANAHEIM CAPITAL LEASE OBLIGATIONS The City has a long-term noncancelable agreement with HP Financial Services to finance the acquisition of the City's server, desktop, and portable computer equipment. The agreement qualifies as a capital lease for accounting purposes as defined under the FASB Statement No. 13, Accounting for Leases, and therefore has been recorded at the present value of future minimum lease payments at the date of inception of the lease. Future minimum lease payments to be made from unrestricted revenues of the Information Services Internal Service Fund under the capital lease are as follows:

Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2028 Total notes and loans Principal 478 517 561 670 685 4,238 730 7,879 Interest 427 402 374 342 305 864 22 2,736 Total 905 919 935 1,012 990 5,102 752 10,615 Fiscal Year Endingi 6/30 2014 2015 2016 2017 Total Less amount representing interest, variable Present value of future minimum lease payments NOTES AND LOANS PAYABLE At June 30, 2013, notes and loans payable are as follows:

Notes and Loans Payable - City HUD Section 108 aucuranteed loans pavable 968 337 163 17 1,485 (116) 1,369 In March 2010, the City entered into an agreement with HUD, making available

$15,000 to fund the acquisitions of the Anaheim Family Justice Center and Miraloma Park site, construction of the Thornton Brady storm drain and the rehabilitation of the historic Packing House site. The loan is payable from the Community Development Block Grant yearly entitlement and from the receipts of the Successor Agency receivable. The outstanding balance of the loan at June 30, 2013, was $13,445. The loan bears interest ranging from 1.74% to 3.97% and is payable over 20 years beginning on February 1, 2011 through August 1, 2030.

Loan debt service requirements to maturity are as follows:

Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2031 Total notes and loans Principal 615 625 640 655 670 3,665 4,335 2,240

$13,445 Interest 471 462 449 433 415 1,727 959 117

$ 5,033 Total

$ 1,086 1,087 1,089 1,088 1,085 5,392 5,294 2,357

$18,478 In May 2003, the City entered into an agreement wilh HUD, making available

$10,000 to provide financial assistance related to the development of Westgate on a former landfill site located at the northeast corner of Beach Boulevard and Lincoln Avenue. The loan is payable from sales tax revenue generated by Westgate, from The Community Development Block Grant yearly entitlement, and from receipts of the Successor Agency receivable. The outstanding balance at June 30, 2013 was $7,879. The loan bears interest ranging from 1.74% to 5.97%

and is payable over 20 years beginning on February 1, 2005, until August 1, 2023.

Loan debt service requirements to maturity are as follows:

66

CITY OF ANAHEIM Helicopter loan oavable In January 2009, the City entered into an agreement with Government Capital Corporation to finance the acquisition of a police helicopter. The amount of the loan totaled $1,799 and bears interest at 5.391% per annum for a term of 12 years.

On January 29, 2009, Government Capital Corporation assigned this agreement to Bank of America which subsequently assigned it to Western Alliance Equipment Finance on March 21, 2012. Principal and interest payments of $206 are due annually beginning on December 16, 2009, until December 16, 2020. The outstanding balance at June 30, 2013 was

$1,312.

Loan debt service requirements to maturity are as follows:

Fiscal Year Endingq 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2025 Total notes and loans Principal

$ 2,000 2,500 3,000 3,000 3,500 16,500

$30,500 Interest Total

$ 2,000 2,500 3,000 3,000 3,500 16,500 3,765

$34,265

$ 3,765

$ 3,765 Fiscal Year Endina 6/30 2014 2015 2016 2017 2018 2019-2021 Total notes and loans Principal 136 143 150 158 167 558 1,312 Interest 70 63 56 48 39 62 338 Total 206 206 206 206 206 620 1,650 Notes and Loans Payable - HousIng Authority Housina Authority CHFA loan agreements Anaheim Reaional Transportation Intermodal Center (ARTICI Land Acauisition Loan pavable In July 2012, the City entered into an agreement with the Orange County Transportation Authority (OCTA) for the Purchase and Sale of a 13.58 acres real property located at 1750 South Douglass Road in Anaheim. The purchase price for the site is $32,500.

The City paid $1,000 at the close of escrow and the remaining $31,500 will be payable to OCTA over 13 years and bears 2% simple interest per annum. Annual principal payments are due on or before July 101h each year commencing 2012. The payment of accrued interest is deferred until equal payments of $1,883 are due and payable on or before July 10, 2024 and July 10, 2025. The loan is payable with Measure M2 Local Fair Share funds. OCTA will retain payments from Anaheim's "Local Fair Share" funds allocated by OCTA under Measure M2 each year until the final payment is made on July 10, 2025.

The City may elect to provide alternative funding from other City funds for transportation related purposes, such as gas tax funds.

At June 30, 2013, the outstanding balance of the ARTIC loan was $30,500. Loan debt service requirements to maturity are as follows:

In October 2003 and October 2007, the Housing Authority entered into separate loan agreements with the California Housing Finance Agency (CHFA), to provide funding for down payment assistance to first-time homebuyers. The 2003 loon is for an amount up to $1,800 and bears 3% simple interest, with principal and accrued interest due in October 2013. At June 30, 2013, the outstanding balance of the 2003 loan was $707. The 2007 note is for an amount up to $1,250 and bears 3.5% interest with principal and accrued interest due in October 2017. At June 30, 2013, the outstanding balance of the 2007 loan was $1,034.

67

CITY OF ANAHEIM BUSINESS-TYPE ACTIVITIES:

Bonds Payable - Electric Utility BONDS PAYABLE Range of Date Final Interest Rates Issued Maturity at Issue Date Electric Utility 1999 Revenue Bonds 2002 Revenue Bonds 2003 Revenue Bonds 2004 Revenue Bonds 2007 Revenue Bonds 2009 Revenue Bonds 2011 Revenue Bonds 2012 Revenue Bonds Total 09/01/99 02/15/02 04/01/03 06/01/04 02/01/07 03/10/09 05/11/11 09/19/12 10/01/27 10/01/31 10/01/22 10/01/34 10/01/37 10/01/39 10/01/36 10/01/31 3.0%-5.0%

3.3%-5.25%

3.0%-5.0%

2.5%-5.25%

4.0%-5.0%

3.0%-5.25%

3.0%-5.375%

3.125%-5%

Authorized and Issued 45,000 178,705 60,415 131,265 206,035 70,000 90,390 92,130 The City's Electric Utility has pledged future electric revenues, net of certain costs, to repay a total of $1,093,145 outstanding long-term obligations, principal and Outstanding interest.

Proceeds from bonds provided financing for various capital 6/30/2013 improvements, primarily distribution assets, The Electric Utility's bonds are payable solely from electric customer net revenues and are payable through 2040. At 32,315 June 30, 2013, the annual principal and interest payments on the bonds were 60,205 47.9% of net revenues. Principal and interest paid for the current fiscal year and 27725 total net revenues were $52,331 and $109,183 respectively.

Unamortized bond premiums/discounts, net Total Electric Utility 111,270 198.065 66,580 90.390 92,130 678,680 16,390 695,070 1,685 48,580 34,525 84,790 464 85,254 Water Utility 2004 Revenue Bonds 2008 Revenue Bonds 2010 Revenue Bonds 05/01/04 07/09/08 10/28/10 10/01/16 10/01/38 10/01/40 4.07-4.5%

4.0%-5.0%

2.0%-4.75%

Bond debt service requirements to maturity for the Electric Utility to be paid from revenues are as follows:

12,105 48,580 34,525 Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2027 2028-2033 2033-2038 2039-2040 Total Unamortized bond premiums/discounts, net Total bonds Principal 71,795 12,155 12,690 15,115 15,810 107,630 145,455 167,995 121,405 8,630 678,680 16,390 695,070 Interset 30,038 28,633 28,078 27,438 26,735 119,491 87,559 49,970 16,064 459 414,465 414,465 Total 101,833 40,788 40,768 42,553 42,545 227,121 233,014 217,965 137,469 9,089 1,093,145 16,390 1,109.535 Total Unamortized bond premiums/discounts, net Total Water Utility Sanitation Utility 2007 Revenue Bonds Unamortized bond premium 05/23/07 02/01/39 3.9%-5.0%

47.710 44,415 1,080 45,495 Total Sanitation Convention, Sports and Entertainment Venues 2002 Revenue Bonds 07/02/02 08/01/23 3.0%-5.5%

2008 Anaheim Lease Revenue Refunding Bonds 12/10/08 08/01/19 3.0%-5.0%

Total Unamortized bond premiums/discounts, net Total Convention, Sports and Entertainment Venues Total business-type activities bonds 26,260 5,390 45,847 32,441 37,831 337 38,168

$ 1,088,967

$ 863,987 Bonds Payable - Water Utility The City's Water Utility has pledged future revenues from the sale of water, net of certain costs, to repay a total of $163,443 for outstanding long-term obligations, principal and interest. Proceeds from bonds provided financing for various capital improvements, primarily distribution assets. The bonds are payable solely from water net revenues and are payable through 2041. At June 30, 2013, the annual principal and interest payments on the bonds were less than 29.1% of net revenues, Principal and interest paid for current fiscal year and total net revenues were $5,205 and $17,867 respectively.

68

CITY OF ANAHEIM Bond debt service requirements to maturity for the Water Utility to be paid from revenues are as follows:

Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 2039-2041 Total Unamortiized bond premiums/discount, net Total bonds Principal 920 960 1,000 10,45 1,090 8,010 14,560 18,140 22,760 16,305 84,790 464 85,254 Interest 4,217 4,177 4,135 4,092 4,049 19,456 16,799 12,760 7,566 1,402 78,653 78,653 Total 5,137 5,137 5,135 5,137 5,139 27,466 31,359 30,900 30,326 17,707 163,443 464 163,907 Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 2039 Total Principal 920 955 1,005 1,045 1,095 6,265 7,900 9,895 12,475 2,860 44,415 Interest 2,079 2,042 1,994 1,954 1,902 8,718 7,082 5,096 2,512 136 33,515 33,515 Total 2,999 2,997 2,999 2,999 2,997 14,983 14,982 14,991 14,987 2,996 77,930 1,080 79,010 Unamortized bond premium 1,080 Total bonds 45,495 Bonds Payable - Convention, Sports and Entertainment Venues Bonds Payable - Sanitation Utility Bond debt service requirements to maturity for the Convention, Sports and Entertainment Venues to be paid from revenues are as follows:

The City's Sanitation Utility has pledged future sanitation system net revenues to pay a total of $77,930 for revenue bonds issued in May 2007. Proceeds from the bonds provided financing for capital improvements to the sanitation sewer collection system. The bonds are payable solely from system net revenues and are payable through February 2039. At June 30, 2013, total principal and interest payments on the bonds were less than 45.2% of net revenues. Total principal and interest paid and total system net revenues for the current fiscal year were $2,998 and $6,629 respectively.

Bond debt service requirements to maturity for the Sanitation Utility to be paid from revenues are as follows:

Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024 Total Unamortized bond premium/discounts, net Total bonds Principal Interest Total 8,120 1,579 9,699 4,995 1,280 6,275 4,424 1,091 5,515 4,662 887 5,549 4,879 653 5,532 10,661 576 11,237 90 2

92 37,831 6,068 43,899 337 38,168 6,068 337 44,236 69

CITY OF ANAHEIM CERTIFICATES OF PARTICIPATION Range of Date Final Interest Rates Issued Maturity at Issue Dote Convention, Sports and Entertainment Venues 1992 Convention Center Financing Project 01/01/92 08/01/23 3.9%- 6.4%

Total Convention. Sports and Entertainment Venues State of California Revolvina Fund note pavable Authorized and Outstanding Issued 6/30/13 92,777 38,000 38,000 In June 2001, the Water Utility executed a note payable to the State of California Revolving Fund at a rate of 2.8% in the amount of $18,063. There are semi-annual payments of principal and interest in the amount of $592 through July 31, 2021.

The outstanding balance on this note at June 30, 2013, totaled $8,442.

Note debt service requirements to maturity for the Water Utility are as follows:

Certificates of Participation Payable - Convention, Sports and Entertainment Venues Certificates of participation debt service requirements to maturity for the Convention, Sports and Entertainment Venues Fund to be paid from unrestricted revenues are as follows:

Fiscal Year Endina 6/30 2014 2015 2016 2017 2018 2019-2022 Total notes and loans Principal Interest Total 956 229 1,185 982 203 1,185 1,010 175 1,185 1,039 146 1,185 1,068 117 1,185 3,387 168 3,555 8,442 1,038 9,480 Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024 Total COPs NOTES AND LOANS PAYABLE Note Payable - Electric Utility Principal 3,500 4,500 4,800 5,100 19,100 1,000 38,000 Interest Total 2,350 2,350 2,345 5,845 1,895 6,395 1,601 6,401 1,288 6,388 1,998 21,098 4

1,004 11,481 49,481 Note Payable - Convention, Sports and Entertainment Venues Wells Farao Bank lease revenue note In December 2010, the City executed a lease revenue note with the Wells Fargo Bank, National Association to provide financing for the capital improvements of the Anaheim Convention Center Grand Plaza. Principal amount of the note is

$20,000 and bears a 1.85% interest per annum.

The note is payable monthly, commencing in January 2011 and matures in December 2014.

Note debt service requirements to maturity to be paid from the unrestricted revenues of the Convention, Sports and Entertainment Venues Fund are as follows:

On March 1, 2013, the Public Utility Department entered into a Revolving Credit Agreement with Wells Fargo Bank, National Association at a maximum note amount not to exceed $100,000, of which $86,000 is made available for Electric Utility and $14,000 for Water Utility. The note has a three year term at a variable interest rate based on LIBOR Daily Index Rate and a spread.

The annual commitment fee is based on 0.175% on the total note amount of $100,000.

The Electric Utility pays interest due on the note monthly.

At June 30, 2013, the Electric Utility has drawn $46,600 from this note to provide financing for the followings: 1) $44,000 Electric System Tax-Exempt Note to retire the 2002-B Electric Revenue Bonds; and 2) $2,600 Electric System Taxable Note to pay Cap and Trade Program draw.

Fiscal Year Ending 6/30 2014 2015 Total notes Principal Interest Total 5,095 143 5,238 5,185 48 5,233 10,280 191 10,471 ARBITRAGE The Tax Reform Act of 1986 (Act) substantially revised the treatment to be afforded to earnings on the proceeds of tax-exempt debt, and now requires the City to calculate and remit rebatable arbitrage earnings to the Internal Revenue Service. Certain of the City's debt and interest earned on the proceeds thereof are subject to the requirements of the Act. The City has accrued a liability for Note Payable - Water Utility At June 30, 2013, note payable is as follows:

70

CITY OF ANAHEIM estimated rebatable arbitrage earnings and has set aside such earnings as restricted cash. At June 30, 2013, the arbitrage rebate liability for governmental and business-type activities was zero and $167 respectively.

COMPLIANCE WITH DEBT COVENANTS There are various limitations and restrictions contained in the City's bond and certificates of participation indentures. The City believes they are in compliance with all significant limitations and restrictions.

DEBT ISSUANCES CONDUIT FINANCINGS city The City has entered into two conduit financings on behalf of a community core provider facility and one to facilitate the management agreement for the Honda Center (formerly the Arrowhead Pond) of Anaheim. In accordance with applicable agreements, the City has no obligation for debt service payments and therefore, the debt is not reflected in the accompanying basic financial statements. Bonds payable and certificates of participation related to conduit financings outstanding at June 30, 2013, were as follows:

City - Debt Issuance In July 2012, the City entered into a purchase and sale agreement with OCTA for the acquisition of a real property parcel located in Anaheim for $32,500. The City paid $1,000 at the close of the escrow; the remaining balance of $31,500 will be payable to OCTA over 13 years at 2% simple interest per annum. Total debt service payment over the life of the loan until fiscal year 2025 will be $34,265.

Date Final Amount Outstanding Issued Maturity Issued 6/30/2013 12/30/85 12/01/15 3,204 945 1985 West Anaheim Convalescent Home 1993 Anaheim Memorial Hospital Association 2003 Anaheim Arena Financing Project Total 10/15/93 05/15/20 12/11/03 06/01/23 46,690 19,075 Electric Utility - Debt Refunding 42,600

$ 92,494 31,500

$ 51,520 On September 19, 2012, the Electric Utility issued 2012-A Electric Revenue Refunding Bonds in the principal amount of $92,130 at a premium of $9,254. The proceeds totaled $101,384 together with balances of the 2002-A Electric Revenue Bond Reserve fund of $6,047 and Bond Debt Service fund of $2,003 were deposited in escrow funds to refund the outstanding balance of $96,210 on the 2002-A Electric Revenue Bonds and to fund the 2012-A Electric Revenue Bonds required reserve fund of $10,102. The true interest cost is 3.38% maturing serially from October 1, 2021 to 2023. The total debt service payments over the life of the bonds until fiscal year 2032 will be $153,817, The Electric Utility obtained an economic gain of

$17,815.

Public Utility Department - Revolving Credit Agreement On March 1, 2013, the Public Utility Department entered into a Revolving Credit Agreement with Wells Fargo Bank, National Association for a note amount not to exceed $100,000 of which $86,000 is made available for the Electric Utility and

$14,000 for the Water Utility. This note has a three year term at a variable interest rate based on LIBOR Daily Index Rate plus 0.65% on any outstanding balance and 0.175%

on the total credit line of $100,000. At June 30, 2013, the Electric Utility has utilized

$46,600.

Anaheim Housing Authority The Anaheim Housing Authority has entered into conduit debt financings on behalf of various developers to assist with the acquisition, construction, equipping, rehabilitation and refinancing of multifamily residential rental projects within the City of Anaheim. In accordance with the bond documents, neither the City nor the Housing Authority has an obligation for debt service payments and therefore, the debt is not reflected in the accompanying basic financial statements. Housing Authority revenue bonds related to conduit financings outstanding at June 30, 2013, were as follows:

71

CITY OF ANAHEIM Date Final Amount Outstanding Issued Maturity Issued 6/30/2013 12/01/85 12/01/15 4,664 1379 Bonds Payable 2007 Tax Allocation Refundina Bonds 1985 West Anaheim Royale 1992 Heritage Village 1997 Casa Granada Apartments 07/15/03 07/15/33 05/15/97 05/15/27 1997 Port Trinidad Apartmetns 1998 Sage Park Project 2000 Cobblestone Apartments 2000 Pork Vista Apartments 2000 Seawinds Apartment 2001 Solara Court Apartments 2008 Bel Age Manor Apartments 2009 Lincoln Anaheim Apartments Phase 2012 Anton Monaco Apartments 2012 Crossings at Cherry Orchard Apartments Tranche A 2012 Crossings at Cherry Orchard Apartments Tranche B 2013 Paseo Village Apartments Total 05/15/27 11/01/28 03/15/33 07/01/33 07/15/33 12/01/34 02/01/44 04/15/39 8,485 5,485 The Successor Agency will repay a total of $333,724, principal and interest, for the 3,795 2,895 outstanding 2007 tax allocation bonds issued in December 2007 from the semi-2,140 1,640 annual Redevelopment Property Tax Trust Fund (RP1TF) revenue allocations.

5,500 5,500 Proceeds from the bonds provided financing for public improvements related to the merged project areas, for the supply of low-and moderate-income housing 3,980 3,580 within the City, to repay certain Redevelopment Agency loan obligations and to 27,180 27,180 advance refund the 1992, 1997 and 2000 bonds. The bonds bear interest at rates 7,000 6,300 ranging from 4.25% to 6.50% and are payable through February 2031. During the 8,200 5,522 fiscal year ended June 30, 2013, total interest paid was $10,766, 22,350 21,139 Debt service requirements to maturity for 2007 Tax Allocation bonds are as 23,217 8,878 follows:

12/14/12 01/01/46 35,460 12,082 08/23/12 12/01/44 9,365 4,010 08/23/12 12/01/29 2,985 2,985 02/28/13 09/01/45 19,750 12,185

$ 184,071

$ 120,760 Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2031 Total Unamortized bond premium/discounts, net Total bonds Principal 1,860 2,205 3,280 5,565 7,955 46,495 71,710 62,610 201,680 3,028 204,708 Interest 10,766 10,659 10,532 10.350 10,053 43,462 29,375 6,847 132,044 132.044 Total 12,626 12,864 13,812 15,915 18,008 89,957 101,085 69,457 333,724 3,028 336,752 FIDUCIARY FUNDS The following Is a summary of changes in long-term liabilities for the year ended June 30, 2013:

Beginning Additions/

Reductions/

Balance Proceeds Payments Within Ending One Balance Year 2010 Recovery Zone Economic Development Bonds Bonds payable premium/(discount), net Notes and loans payable Due to City of Anaheim Pollution remediation liability

$ 207,990 (210)

$ 207,780

$2,075 3,284 (256) 3,028 7,666 (5331 7,133 301 22,980 234 (761) 22,453 806 6.640 5

(4,434) 2,211 2,210

$ 248,560 239 (6,194)

$ 242,605

$5,392 The Successor Agency will repay a total of $10,397, principal and interest, outstanding Recovery Zone Economics Development Bonds issued in October 2010 from the semi-annual RPITF revenue allocations. Proceeds from the bonds provided financing for public improvements related to the merged project areas.

The bonds bear interest at rates ranging from 1.44% to 6.22% and are payable through February 2031. During the fiscal year ended June 30, 2013, total principal and interest paid were $210 and $367 respectively.

72

CITY OF ANAHEIM Debt service requirements to maturity for 2010 Recovery Zone Development bonds are as follows:

Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2031 Total bonds Principal 215 225 230 240 250 1,470 1,955 1,515 6,100 Interest 361 354 346 337 326 1,422 933 218 4,297 Total 576 579 576 577 576 2,892 2,888 1,733 10,397 Debt service requirements to maturity for the Successor Agency notes payable and contractual commitments to be paid from future RPTTF revenues are as follows:

Fiscal Year Ending 6/30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2032 Total notes and loans Due to the City of Anaheim Principal 301 332 365 402 442 2,584 48 2,659 7,133 Interest 601 590 578 563 546 2,211 2,148 763 8,000 Total 902 922 943 965 988 4,795 2,196 3,422 15,133 Notes and Loans Payable Savi Ranch Associates note oayable In July 1989, the former Redevelopment Agency executed a note with Savi Ranch Associates, a California general partnership. The amount of the note totaled $2,707 and bears interest at 9.5% per annum. The note is payable from net property tax increment as defined in the Redevelopment Agency note. If there is insufficient RPTTF revenue to pay for principal and interest at the termination of the River Valley project area plan in November 2031, the note ceases to be an obligation of the Successor Agency. For the fiscal year ended June 30, 2013, total interest paid was $299.

Contractual obliaations As part of Ihe Redevelopment Agency's economic development program to attract and retain businesses in the City, the former Redevelopment Agency has entered into various contractual obligations to reimburse tenant improvement costs to be paid from property tax increment revenues (thereafter RPTTF). At June 30, 2013, the outstanding balance of these obligations totaled $140.

In December 1992, the former Redevelopment Agency has entered into an agreement with California State Teachers Retirement System (CALSTRS), to share in the development costs of the Plaza Redevelopment Project. In March 2004, CALSTRS assigned the agreement to the new owners, Pan Pacific Retail Properties, Inc. (PPRP). In October 2006, Kimco Realty Corporation (KRC) acquired PPRP including the assumption of the assigned plaza project agreement. The KRC participation note bears 7% simple interest rate, and has a maximum term of 25 years. The Successor Agency's obligation to repay the note is entirely contingent on the revenues generated by the project. The note will be forgiven at the end of the term whether or not the entire amount has been repaid. At June 30, 2013, the outstanding balance of the participation note was $4,286.

The Successor Agency will repay a total of $10,615 outstanding long-term obligations, principal and interest, from the semi-annual RPTTF revenue allocations for the $10,000 Cooperation Agreement dated April 1, 2003, between the former Redevelopment Agency and the City, whereby the City assisted the former Agency with the development of the Anaheim Westgate Center (Westgate project) utilizing $10,000 of funds from the HUD Section 108 loan. This Cooperation Agreement obligation (HUD Section 108 loan) bears interest ranging from 1.74% to 5.97% and is payable semi-annually through August 2023. At June 30, 2013, outstanding principal due to the City for the Westgate project obligation was

$7,928. Principal and interest paid for the current fiscal year were $884.

The Successor Agency will repay a total of $8,655 I outstanding long-term obligations, principal and interest, from the semi-annual RPTTF revenue allocations for the $7,000 Cooperation Agreement dated June 2010 between the former Redevelopment Agency and the City, whereby the City assisted the former Redevelopment Agency with the rehabilitation of the historic Packing House site utilizing proceeds from the HUD Section 108 loan.

This Cooperation Agreement obligation (HUD 108 Section loan) bears interest ranging from 1.68% to 3.98% and is payable over 20 years beginning on February 1, 2011 through August 1, 2030.

As of June 2013, the outstanding principal due to the City for the Packing House site project obligation was $6,349. Principal and interest paid for the current fiscal year were $548.

The former Redevelopment Agency paid a total of $19,163 to the State of California Supplemental Education Revenue Augmentation Fund (SERAF) in fiscal years 2010 and 2011.

Of this amount, $8,500 was borrowed from the housing fund. The Successor Agency will repay this amount from future RPITF revenue allocations. At June 30, 2013, the outstanding balance is $8,176.

73

CITY OF ANAHEIM Westgate Pollution Remediation Obligation In June 2003, the former Redevelopment Agency acquired property located at 2951 West Lincoln Avenue as a part of a redevelopment project named the Westgate project. Approximately 11 acres of the property were formerly known as the Sparks and Rains Landfills.

The County of Orange was the operator of these landfills until 1960. In November 2008, the County paid the Redevelopment Agency $5,176 in settlement of claims related to the pollution remediation for the Westgate project site prior to the development of a shopping center. The total costs of the pollution remediation work amounted to $12,420 based on actual contract received for the project. At June 30, 2013, the outstanding pollution remediation obligation for the Westgate project was $2,211.

Mello-Roos Community Facilities Districts The City issued special tax bonds to finance construction in various Community Facilities Districts.

These bonds were authorized pursuant to the Mello-Roos Community Facilities Act of 1982. The bonds are payable from a special assessment tax and are non-recourse bonds secured by the properties. Neither the faith and credit nor the taxing power of the City, the State of California or any political subdivision of either of the foregoing is pledged to the payment of the bonds. The bonds are not general or special obligations of the City, nor do they contain any credit enhancements that secondarily pledge existing or future resources of the City, accordingly they are not reflected in the accompanying basic financial statements. The City is acting as agent only for the property owners in collecting the special assessments and forwarding the collections to the fiscal agent. This activity is recorded in an agency fund in the basic financial statements.

At June 30, 2013, the City has the following outstanding Mello-Roos special tax bonds:

In June 1989, the City issued $26,620 in special tax bonds to finance a portion of the cost of acquisition and construction of facilities in East Anaheim Hills. In April 1995, $15,389 of the 1989 bonds was advance refunded through the Anaheim Public Financing Authority and in June 2004, $11,160 of the 1995 bonds was refunded through the Authority. In December 1999, $7,720 of the 1989 bonds was refunded by the City. At June 30, 2013, the 2004 Anaheim Public Financing Authority bonds outstanding amounted to $2,655, and the 1999 Mello-Roos bonds outstanding amounted to $1,530.

In February 2007, the City issued $9,060 in special tax bonds to finance a portion of the cost of acquisition and construction of facilities in the Platinum Triangle of Anaheim. At June 30, 2013, the 2007 Mello-Roos bonds outstanding amounted to

$8,250.

In August 2010, the City issued $28,630 in special tax bonds, Series 2010 to finance a portion of the cost of acquisition and construction of facilities In the Platinum Triangle of Anaheim, Community Facility District 08-1 and to fund a reserve fund for the Series 2010 Bonds. At June 30, 2013, the 2010 Mello-Roos bonds outstanding amounted to $27,095.

NOTE 9-SEGMENT INFORMATION:

The Sanitation Utility Fund issued revenue bonds to finance sewer system expansion and improvements. The Sanitation Utility Fund accounts for three activities: solid waste collection, wastewater, and street cleaning. However, investors in the revenue bonds rely solely on revenue generated through wastewater activities for repayment.

Summary financial information for wastewater activities is presented below:

Condensed Statement of Net Position Assets Cash and cash equivalents Investments Other current assets Restricted cash and cash equivalents Capital assets, net Total assets Liabilities Current liabilities Current liabilities payable from restricted assets Noncurrent liabilities Total liabilities Net Position Net investment in capital assets Restricted for debt services Restricted for capital projects Unrestricted Total net position 7,854 12,212 1,567 19,416 94.779 135,828 1,031 2,302 44,575 47,908 56,865 384 9,829 20,842 87,920 74

CITY OF ANAHEIM Condensed Statement of Revenues, Expenses and Changes In Net Position NOTE 10 - RETIREMENT PLANS:

Waste water fees (pledged against bonds)

Other revenues Depreciation and amortization Other operating expenses Total operating Income Nonoperating income(expenses)

Interest income Interest expense Loss on disposal of capital assets Capital contribution Transfer out Total nonoperating expense Change in net position Net position at beginning of year, as restated Net position at end of year Condensed Statement of Cash Flows Net cash provided by (used in):

Operating activities Noncapital financing activities Capital and related financing activities Investing activities Net decrease Beginning cash and cash equivalents Ending cash and cash equivalents Reconciliation of cash and cash equivalents Cash and cash equivalent Restricted cash and cash equivalent Total cash and cash equivalent 11,894 29 (1,829)

(5,477) 4,617 183 (1,755)

(9) 906 (480)

(1,155) 3,462 84,458 87,920 Retirement System The City contributes to the California Public Employees' Retirement System (PERS),

an agent multiple-employer public employee defined benefit pension plan. PERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a common investment and administrative agent for participating public entities within the State of California. Benefit provisions and all other requirements are established by State statute and City ordinance. A copy of PERS' annual financial report may be obtained @www.calpers.ca.gov.

Funding Policy Participants are required to contribute 8.0% (9.0% for fire and police safety employees) of their annual covered salary. For miscellaneous employees the City pays 7% of the participant contributions and the employee pays 1%; for management employees hired after January 10, 2012, the employee pays the entire 8%.

For police safety, the city pays the entire 9% of the participant contributions. For fire safety employees, the entire 9% is paid by the employees. In addition, the City is required to contribute at an actuarially determined rate applied to annual covered payroll; the current rates are 21.642% for miscellaneous employees, 30.860% for police safety employees and 29.705% for fire safety employees. The contribution requirements of plan members and the City are established and may be amended by PERS.

PERS Contribution Rate City Contribution Employee Contribution 6,915 (480)

(9,079)

(1,757)

(4,401) 31.671 27,270 7,854 19,416 27,270 Paid by Paid by Paid by Paid by City Employee City Employee Total Plan Miscellaneous 18.839%

Miscellaneous Management 18.839%

2.803%

7.000%

1.000%

29.642%

2.803%

7.000%

1.000%

29.642%

Miscellaneous Management (new hires since 01/10/2012)

Fire Safety (Management)

Fire Safety (Bargaining Unit)

Police Safety (Management)

Police Safety (Bargaining Unit) 21.642%

29.705%

29.705%

30.860%

30.860%

0.000%

0.000%

0.000%

0.000%

0.000%

0.000%

0.000%

0.000%

9.000%

9.000%

8.000%

9.000%

9.000%

0.000%

0.000%

29.642%

38.705%

38.705%

39.860%

39.860%

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CITY OF ANAHEIM Annual Pension Cost For fiscal year 2013, the City's annual pension cost of $58,213 for PERS was equal to the City's required and actual contributions. The required contribution was determined as a part of the June 30, 2010 actuarial valuations.

The City's annual pension cost, the percentage of annual pension cost contributed to the plans, and the net pension obligation for the fiscal years ended June 30, 2011,2012 and 2013 are as follows:

Effective for periods beginning after June 15, 2014 implementation of GASB Statement No. 68 Accounting and Financial Reporting for Pensions-an amend-ment of GASB Statement No. 27 will be required.

This Statement establishes standards for measuring and recognizing liabilities, deferred outflows of resources, and deferred inflows of resources, and expense/expenditures.

This Statement identifies the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. This Statement will require the City to recognize a liability equal to the net pension liability.

Under this new reporting requirement, the City would record the unfunded liability ($345,236 at June 30, 2012, as shown above),

as adjusted by the requirements of this Statement, as a liability on the Statement of Net Position. The exact impact to the City's financial statements in conforming to this Statement has yet to be determined.

Fiscal Year Ending 06/30/11 06/30/12 06/30/13 Annual Pension Cost (APC)

$51,913 57,560 58,213 Percentage of APC Contributed 100%

100%

100%

Net Pension Obligation

$0 0

0 Funded Status and Fundina Proqress Actuarial valuation of an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with the past expectations and new estimates are made about the future.

The table below displays the funding progress of the three plans and is based upon the most recent actuarial valuation data as of June 30, 2012:

Actuarial Methods and Assumptions Plan Miscellaneous Police Safety Fire Safety (A)

Actuaral value of Assets tAVA)

$ 854,296 473,233 283,211

$1,610,740 (B)

(C)

Unfunded Liability Accrued (UL)

Liability (B)-(A)

(DI Funded Ratios AVA Market (A)I/(B) Value 81.7%

68.2%

83.7%

69.9%

81.9%

68.3%

82.5%

68.7%

(E)

IF)

ULas a Annual

%of Covered Payroll Payroll (C)/(E)

In the June 30, 2012, actuarial valuations, the entry age actuarial cost method was used. The actuarial assumptions included: (a) 7.50% investment rate of return (net of administrative expenses), (b) projected annual salary increases that vary by duration of service, and (c) 2% per year cost-of-living adjustments. Both (a) and (b) included an inflation component of 2.75%. The actuarial value of PERS assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a 15-year period (smoothed market value). The PERS unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a closed basis. The average remaining amortization periods were 19 years for the miscellaneous plan and 28 years for safety police and fire plans for years of service unfunded.

Other Post-employment Benefits In addition to the pension benefits described above, the City provides other post-employment benefits (OPEB) as a single-employer defined benefit healthcare plan. The OPEB provides medical, dental and life insurance benefits to eligible retirees (hired prior to January 1, 1996, Anaheim Police Association employees hired prior to July 6, 2001, and Anaheim Fire Association employees hired prior to November 9, 2001) in accordance with City Personnel Resolutions and various Memoranda of Understanding. Eligible employees hired after the dates above have access to the City's medical and dental plans but do not receive a defined benefit. There are no separately issued financial statements for the OPEB.

$ 1,045.037 565,214 345,725

$ 1,955.976

$ 190,741 91,981 62,514

$ 345.236

$ 105.544 43,205 22.967

$171,716 180.7%

212.9%

272.2%

201.1%

The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information, which shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.

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CITY OF ANAHEIM Funding Policy The contribution requirements of plan members and the City are established in accordance with City Personnel Resolutions and various Memoranda of Understanding. The retired plan members receiving benefits make varying contributions toward the cost of these benefits depending on the retiree's Medicare eligibility. year of hire, age and employee group. Retiree contributions for the fiscal year ended June 30, 2013, were 2.54% of total payroll.

In June 2008, the City joined the California Employer's Retiree Benefit Trust Program (CERBT) to pre-fund OPEB liabilities. The CERBT is an agent multiple employer plan consisting of an aggregation of single-employer plans, with pooled administrative and investment functions that are administered by PERS. A copy of the aggregated CERBT annual financial report may be obtained

@www.calpers.ca.gov.

The City contributes an amount not less than the annual required contribution (ARC) of the employer. The ARC is an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The ARC rate for the fiscal year ended June 30, 2013, was 5.62% of total payroll, The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for the fiscal year ended June 30, 2013 are as follows:

Ending 06/30/11 06/30/12 06/30/13 OPEB Cost 10,132 9,530 8,574 OPEB Cost Contributed 101.3%

101.4%

114.6%

Asset 9,629 9,765 11,017 Funded Status and Fundina Proaress Actuarial valuation of an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with the past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, will present multi-year trend information in subsequent years, that will show whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.

The table below displays the funding progress of the plan and is based upon the most recent actuarial valuation data:

Annual OPEB Cost and Net OPEB Asset The City's annual OPEB cost, amount actually contributed to the plan, and changes in the City's net OPEB asset for the fiscal year ended June 30, 2013, are as follows:

(A)

Actuarial Actuarial (B)

(C)

(D)

(E)

(F)

Unfunded Funded UL as a Liability Ratios Annual

% of Valuation Value of Accrued (UL)

AVA Covered Payroll Date Assets (AVA)

Liability (B) - (A)

(A) / (B)

Payroll (C) /(E)

ARC Interest on net OPEB asset Adjustment to ARC Annual OPEB cost 8,694 (743) 623 8,574 9,826 (8,574) 1,252 9,765 11,017 06/30/11 67,747

$ 201,108

$ 133,361 33.7%

$ 169,331 78.8%

Actuarial Methods and Assumptions Contributions made Annual OPEB cost Change in OPEB asset Net OPEB asset - beginning of year Net OPEB asset -end of year Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefits costs between the City and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in the actuarial accrued liability and the actuarial value of assets, consistent with the long-term perspective of the calculations.

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CITY OF ANAHEIM In the July 1, 2011, actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumption included a 7.61% investment rate of return, an annual healthcare cost trend rate ranging from 8.00 % - 9.50% initially and declining to 5,50% by 2020, payroll growth rate of 3.25% per year, and an inflation factor of 3.00%. The OPEB unfunded actuarial accrued liability is being amortized as a level percentage of payroll over a closed 30-year period. The remaining amortization period as of July 1, 2011, is 26 years.

NOTE 11 - JOINT VENTURES AND JOINTLY-OWNED PROPERTIES:

Authority for Orange County - City Hazardous Materials Emergency Response The City participates in a joint powers authority, the Authority for Orange County-City Hazardous Materials Emergency Response (Hazmat), for the purposes of responding to, assessing the nature of, and stabilizing any emergency created by the release or threatened release of hazardous materials.

The following entities are members of Hazmat: City of Anaheim, Orange County Fire Authority, and the City of Huntington Beach (provider agencies). Members of the Board of Directors (Hazmat Board) consist of one voting Board member and an alternate appointed by the governing body from the provider agencies.

Distribution of fair share contributions to reimburse the provider agencies are as follows: City of Anaheim, 27.3%; Orange County Fire Authority, 27.3%; City of Santa Ana, 27.3%; and City of Huntington Beach, 18.1%. Effectively April 20, 2012, the City of Santa Ana was no longer a provider agency. The JPA, including the distribution allocation, will be amended in fiscal year 2014.

At the direction of the Hazmat Board, revenues are disbursed to the provider agencies at the end of each preceding quarter. Audited financial information for the joint powers authority as of and for the year ended June 30, 2013, was as follows:

The City has no significant equity interest in Hazmat, and accordingly neither assets nor liabilities of Hazmat have been recorded in the City's basic financial statements. For a copy of Hazmat's separate financial statements, contact the Finance Director of the City.

Metro Cities Fire Authority The City participates in a joint powers authority, Metro Cities Fire Authority (Fire Authority), for the purpose of providing a central communication network and record keeping system to support fire suppression, emergency medical assistance, rescue service, and related services provided by the members of the Fire Authority.

The following entities are members of the Fire Authority: City of Anaheim, City of Fountain Valley, City of Fullerton, City of Garden Grove, City of Huntington Beach, City of Newport Beach, and the City of Orange.

Members of the Board of Directors (the "Board") consist of one voting Board member and an alternate appointed by their governing body.

Public entities in Orange County may receive services from the Fire Authority by executing an agreement and paying a fair share contribution. Audited financial information for the Fire Authority as of and for the year ended June 30, 2013, was as follows:

Total assets Total liabilities Members' equity Total revenues Total expenses Revenues under expenses

$ 2,408 541 1.867 4,673 4,776 (103)

Total assets Total liabilities Members' equity Total revenues Total expenses Revenues under expenses 73 53 20 155 156 The City has no significant equity interest in the Fire Authority, and accordingly neither assets nor liabilities of the Fire Authority have been recorded in the City's basic financial statements. For a copy of the Fire Authority's separate financial statements, contact the Finance Director of the City.

Jointly-owned utility plants (1)

The City's Electric Utility owns a 10.04% ownership interest in the coal-fired San Juan Generating Station, Unit 4 (SJ), located near Waterflow, New Mexico. The other participants in SJ and their respective ownership include: Public Service of New Mexico, 45.48%; City of Farmington, New Mexico, 8.48%: County of Los Hazmat does not have any debt outstanding at June 30, 2013.

78

CITY OF ANAHEIM Alamos, New Mexico, 7.20%; and M-S-R Public Power Agency, 28.80%. There are no separate financial statements for this venture, as each participant's interest in the utility plant is included in their respective financial statements. The City's cumulative share of construction costs included in the utility plant at June 30, 2013, amounted to $84,407. The City's bonded indebtedness incurred to finance the purchase of the 10.04% ownership interest is also included in the basic financial statements.

The City sold its 3.16% ownership interest of SONGS to SCE on December 29, 2006.

Accordingly, the Electric Utility ceased recording oll related operating expenses, except marine mitigation costs and spent fuel storage charges, as of December 29, 2006. Based on the SONGS settlement agreement, the Electric Utility is responsible for the City's share of marine mitigation costs up to $2,300, and SCE is responsible for costs between $2,300 and $7,300. The Electric Utility is responsible for spent fuel storage charges until the federal government takes possession.

As a former participant in SONGS, the Electric Utility is subject to assessment of retrospective insurance premiums in the event of a nuclear incident at SONGS or any other licensed reactor in the U.S.

NOTE 12-COMMITMENTS AND CONTINGENCIES:

Intermountain Power Agency The Electric Utility has entered into a power purchase contract with the Intermountain Power Agency (IPA) for delivery of electric power. The share of IPA power is equal to 13.225% of the generation output of IPA's two recently uprated coal-fueled generating units located in Delta, Utah (Unit 1 and 2 net output is 900 mega watts each). The City is obligated for the following percentage of electrical facilities at IPA:

Southern California Public Power Authority The Electric Utility is a member of the Southern California Public Power Authority (SCPPA), a joint powers agency. SCPPA provides for the financing and construction of electric generating and transmission projects for participation by some or all of its members. To the extent the Electric Utility participates In projects developed by SCPPA, it is obligated for its proportional share of the cost of the project. The City is obligated for the following percentage of electrical facilities owned by SCPPA:

Transmission:

Souther Transmission System (STS)

Mead-Adelanto Project (MAP)

Mead-Phoenix Project (MPP)

Generation:

Hoover Dam Uprating (Hoover)

Magnolia Generating Station (Magnolia)

Canyon Power Project (Canyon)

Natural Gas Reserve Projects (Natural Gas)

SCPAA Natural Gas Project-Pinedale, Wyoming SCPPA Natural Gas Project-Barnett, Texas Entitlement 17.6 %

13.5 24.2 Expiration 2027 2030 2030 42.6 %

38.0 100.0 35.7 %

45.5 2018 2037 2040 2033 2033 Entitlement Expiration Generation:

Intermountain Power Project Take or pay commitments As part of the take or pay commitments with IPA and SCPPA, the Electric Utility has agreed to pay its share of current and long-term obligations. Payment for these obligations will be made from the operating revenues received during the year that the payment is due. A long-term obligation has not been recorded on the accompanying basic financial statements as these commitments do not represent an obligation of the Electric Utility until the year the power is available to be delivered to the Electric Utility. The following schedule details the amount of debt service that is due and payable by the Electric Utility for each project and the final maturity date.

13.225 %

2027 The contract constitutes an obligation of the Electric Utility to make payments from revenues and requires payment of certain minimum charges. These minimum charges include debt service requirements on the financial obligations used to construct the plant. These requirements are considered a cost of purchased power, 79

CITY OF ANAHEIM Fiscal Year Natural Ending 6/30 IPA STS MAP MPP Hoover Magnolia Gas Canyon Total 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 2039-2041

$ 35,915

$ 11.221

$2,874 $ 1,817

$ 852

$ 8,410 $ 5.857

$ 6,385 73,331 37.201 14,582 3,198 1,704 958 8,547 7,147 12,770 86,107 30,101 14,579 3,015 1,611 957 8,549 7.090 12,769 78,671 27,584 14,313 2,994 1,606 957 8,550 6,831 19,504 82.339 24,741 14,108 2,971 1,596 956 6.658 6,081 19,505 76,616 117,889 70.637 8.054 4,314 32,683 23.211 97,508 354,296 39,183 37,574 15,692 97,514 189,963 38,781 10,774 97,515 147,070 50,241 97.514 147,755 58,511 58.511 Operating Leases In January 2005, the City entered into a long-term noncancelable ground lease with City of Fullerton, for an approximately 1.56 acre site at the Fullerton Municipal Airport for the operation of the Anaheim Police Department Heliport. The term of the lease is 40 years with two 10-year extensions commencing from January 2005 and ending December 2044. The base rent is adjusted every five years by ten percent (10%). The City constructed a building of approximately 30,000 square feet that includes offices, aircraft maintenance and storage facilities and other infrastructure supporting such facilities on the leased premise. Future minimum lease payments to be made from unrestricted revenues of the General Fund are as follows:

Total

$273.431

$178.623 $23,106 $12,648

$4,680 $199,993

$82,683

$519,495

$1,294,659 In addition to debt service, the City's entitlement requires the payment for fuel costs, operations and maintenance (O&M), administration and general (A&G) and other miscellaneous costs associated with the generation and transmission facilities discussed above. These costs do not have a similar structured payment schedule as debt service, however, prior experience indicates that annual costs are generally consistent from year to year. The fiscal year 2013 expenses for fuel, O&M, A&G and other costs at these projects were as follows:

Natural Fiscal Year IPA STS MAP MPP Hoover Magnolia Gas Canyon Total 2013

$ 48,886 $ 5,681 $ 351

$ 319 $

519 $

17,297 $ 1,207 $ 7,461 $ 81,721 Cap-and-Trade Program California Senate Bill (AB) 32 requires that Utilities in California reduce their greenhouse gas (GHG) emissions to 1990 levels by the year 2020. It directed the California Air Resources Board (CARB) to develop regulations of GHG that became effective January 2012.

Emission compliance obligations under the Cap-and-Trade regulation began in January 2013, The Cap - and - Trade program (Program) is implemented in the first phases beginning January 1, 2013 to December 31, 2014. This Program requires Electric Utilities to have GHG allowances on an annual basis to offset GHG emissions associated with generating electricity. CARB will provide a free allocation of GHG allowance to each electric utility to mitigate retail rate impacts.

This free allocation of GHG allowance is expected to be sufficient to meet Electric Utility's GHG compliance obligations for retail sales. The compliance obligation for the wholesale sales requires the allowance to be obtained through the auction or in the secondary market quarterly. At June 30, 2013, the value of the prepaid Cap and Trade allowance is $2,697, and the value of the Cap and Trade obligation is $2,303.

Fiscal Year Ending June 30 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 2039-2043 2044 Total minimum future rentals 54 57 59 59 59 317 349 384 422 464 143 2,367 The Honda Center On January 26, 1999, the City entered into a series of lease transactions for the Honda Center. Under these transactions, the City leased the Honda Center to a third party trustee acting for the benefit of an equity investor for a term of approximately 39.2 years. The trustee sublet the facility back to the City for 20 years, which was shorter than the then remaining term of the management agreement between the third-party manager at that time (Manager) and the City in consideration of an advance rental payment for the entire lease term. At the end of the sublease, the City has a purchase option to purchase the trustee's rights under the lease for a fixed amount. The advance rent payments to the City were deposited into a trust fund and invested. The cash scheduled to be available from this trust fund is sufficient to pay the City's rent payments for the term of the sublease and to exercise the City's purchase option at the end of the sublease. The excess of the amount of the advance rent payment made by the trustee to the City over the deposit to the trust funds, after the payment of 80

CITY OF ANAHEIM transaction expenses and payment to the Manager for agreeing to pledge its interest as Manager under the management agreement then in effect and agreeing to undertake certain additional obligations to the transaction, was approximately $4,000. This amount was recognized by the City as unearned revenue and is being amortized over the sublease term. The City has secured its obligations to the other parties to these lease transactions by a pledge of its respective interest in revenues from the facility, subordinate (with certain exceptions) to any interests of the debt holders of the facility. The City's obligations under these lease transactions are considered to be defeased in substance, and therefore the related liabilities as well as the trust assets have been excluded from the City's financial statements. The City's and AAM's respective rights under the FMA are subject in certain respects to the effect of the 1999 lease transaction.

Effective December 16, 2003, the City and Anaheim Arena Management LLC (AAM) entered into a Facility Management Agreement (FMA) whereby AAM has the exclusive right and license to manage, maintain and operate all aspects of the Honda Center in accordance with the FMA through June 30, 2023, with an option to extend the term for an additional period not to exceed 10 years.

Annual distributions to the City, AAM and the County of Orange are required for their respective share of adjusted net revenues, as defined in the FMA. In the event that cash on hand is insufficient to pay operating expenses, debt service, distributions to the City, the County of Orange, or other amounts payable, AAM shall make or cause an affiliate or third-party lending institution to make loans for such purposes, as defined in the FMA. Such funds will be repaid from gross revenues or adjusted net revenues, if any, as defined in and in accordance with disbursement priorities established in the FMA. At June 30, 2013, the outstanding conduit debt on the Honda Center totaled $31,500. The debt is non-recourse, payable from revenues generated by the facility. Neither the faith and credit nor the taxing power of the City is pledged to the payment of the debt. The debt is not a general or special obligation of the City, nor does it contain any credit enhancements that secondarily pledge existing or future resources of the City (other than revenues generated by the facility), and accordingly it is not reflected In the accompanying basic financial statements.

Angel Stadium of Anaheim On May 14, 1996, the City and the California Angels, LP (Team), which was then managed by Disney Sports Enterprises, Inc. (subsequently known as Anaheim Sports, Inc.), entered into an agreement to provide for the operation and refurbishment of the Stadium. Pursuant to the agreement, the Team assumed responsibility for the operation of the Stadium on October 1, 1996. The agreement runs for 33 years (subject to a limited Team option to cancel at 20 years and the Team's right to extend the term).

In September 2013, the agreement was modified extending the Team's right to terminate the agreement by three years to October 16, 2019. Concurrent with amending the termination right, the City and the Team entered into two Memorandums of Understanding providing a nonbinding framework for negotiations relating to an extension of the Team's tenancy at the stadium and for the potential development of the surrounding stadium area.

Under the terms of the agreement, the Team assumed full responsibility for all Stadium operations and maintenance, including capital maintenance. The Team books all Stadium and parking lot events (except for ten annual City events),

pays all expenses, and retains all revenue (subject to the City's rights to share in certain net revenues) except that the City credits the Team up to $500 per year adjusted annually for CPI as a capital reserve contribution, calculated on the basis of property taxes. The City's participation in net revenues includes amounts received by the Team above certain thresholds including paid admissions ($2.00 per paid admission in excess of 2.6 million admissions per year), net income from nongame events (in excess of $2,000 per year adjusted annually for CPI), and parking lot net income (25% in excess of $4,000 per year adjusted annually for CPI). Additionally, as indicated above, the City retained the right to book and retain all revenue from ten parking lot events per year. Major League Baseball consented to the transfer of the Team in fiscal year 2003 to interests controlled by Arte Moreno. No changes in the terms of the agreement with the Team were made in connection with that transfer.

The Agreement also provided that the City had the right to develop approximately 42 acres of the parking lot development site. In 1998 a land sale of

$1,000 for a 1.25 acre site was approved for the construction of a 1,100-seat theatre called "Tinseltown Studios" (now known as "City National Grove of Anaheim"). In November 2002, the City purchased the facility and the land for

$6,700 from its then owner, SMG. Concurrent with the purchase, the City granted to Nederlander-Grove LLC (Nederlander) a license to operate the facility for three years with the right to extend another five years.

In May 2009, the management agreement was amended extending the term to December 31, 2015 with the right to extend another five year period. Additionally, under the amended management agreement, effective January 1, 2009, Nederlander no longer receives a management fee of $150 and the City's share in the annual net profits and losses from operations increased from 50% to 60%. Nederlander is responsible for 100% of losses in excess of $400, thereby limiting the City's share of net losses to a maximum of $240 in any given year. The City may elect to terminate the agreement prior to expiration of the term under certain conditions, and pay the unamortized balance of capital assets purchased during the term to Nederlander. Concurrent with the amendment to the management agreement, the parking license fee agreement was amended, wherein the parking license fees from Nederlander were reduced to $176 and are subject to adjustment annually based on CPI increases. Nederlander paid the City $188 for the year ended June 30, 2013, for parking and common area maintenance.

81

CITY OF ANAHEIM Muzeo Remaining Construction Commitment In October 2007, the City and the former Redevelopment Agency entered into a property operating agreement with the Muzeo Foundation to operate and provide programming for the Muzeo, the downtown museum.

The property operating agreement is for a term of 30 years and provides for a line of credit for the first 3 years from the City to the Muzeo Foundation in an amount not to exceed $1,000 or 95% of pledges at an annual interest rate of 5%. The property operating agreement was amended on August 1, 2010, to extend the maturity date to June 30, 2015.

It also amended the aggregate amount of the line of credit to $500 during fiscal year 2011 and $200 during each fiscal year thereafter with amounts being converted to grants upon achieving fund raising thresholds.

At June 30, 2013, there was no amount due to the City.

Litigation A number of claims and suits are pending against the City for alleged damages to persons and/or property and for other alleged liabilities arising out of matters usually incident to the operation of a city such as Anaheim. Although the aggregate amount asserted for such lawsuits and claims is significant, in the opinion of City management, the City has strong defenses against such claims, and thus the ultimate loss, if any, relating to these claims and suits not covered by insurance or reflected in the financial statements, will not materially affect the financial position of the City.

Grants Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be Immaterial.

Construction and other significant commitments At June 30, 2013, the City had the following commitments with respect to unfinished capital

projects, disposition and development agreements, reimbursement agreements and cooperation agreements:

Capital Prolect 2013 Local Street Rehabilitation Project Anaheim Boulevard Street Improvement Anaheim Canyon Metrolink Pedestrian Improvement Anaheim Regional Transportation Intermodal Center Avon Dakota Neighborhood Revitalization Housing Project Broadway Street Improvement/Dole Avenue - Magnolia Ave Brookhurst St from Katella Avenue to Ball Road Direct Buried Cable Project Edison Bike Trail(West Anaheim/Lola Avenue)

Euclid Street Widening/Westmont - Crescent Hannum substation B-bank transformers Katella Avenue Undercrossing 1-5 Knott Avenue and Orange Avenue Street Improvement Linda Vista Reservoir and Pump Station Replacement Pressure Regulating Stations Rehabilitation Sanitary Improvement Model 38, Lincoln Avenue Sanitary Improvement Model 7, North of La Palma Sunkist Street Improvement/Cerritos Avenue-Tryon Street Tustin Avenues and La Palma Street Widening Underground District No 59 Phase 2, Brookhursl/Orange Underground District No 59-Phase I, Brookhurst Underground District No. 57 Phase I, Brookhurst Vehicle Acquisitions At June 30, 2013 the Redevelopment Successor Agency commitments with respect to unfinished capital projects:

774 701 872 103,737 2,625 555 7,704 1,516 1,555 1,037 933 4,367 1,033 593 593 1,439 1,794 1,765 10,786 2,809 979 7,983 1,838 Expected Completion Date 2013 2013 2013 2014 2015 2013 2013 2014 2014 2014 2014 2014 2014 2014 2014 2013 2013 2013 2014 2014 2014 2014 2014 had the following Remaining Construction Commitment Capital Proiect Expected Completion Date 2014 2015 2016 Anaheim Boulevard Residential Housing Project 2,515 Avon Dakota Neighborhood Revitalization Housing Project 14.777 Colony Park Phase IV Home Buyer Assistance and Remediation 8,250 82

CITY OF ANAHEIM NOTE 13 - SUBSEQUENT EVENTS:

Use of Revolving Credit Agreement On July 13, 2013, the Electric Utility used $44,000 from the proceeds of the Revolving Credit Agreement with Wells Fargo Bank, National Association, together with funds from the 2002-B Electric Revenue Bonds reserve and debt service balances of

$10,030 and funds of $7,053 from the City, to retire the outstanding principal balance of $60,205 and interest balance of $878 on the 2002-B Electric Revenue Bonds. In July, 2013, the Wells Fargo note has an interest rate of 0.85% per annum.

On October 15, 2013, the Water Utility used $5,200 from the proceeds of the Revolving Credit Agreement with Wells Fargo Bank, National Association, for the purpose of paying for the costs of acquisition and construction of improvements of its water system.

83

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CITY OF ANAHEIM City of Anaheim Summary of Pension Obligation Funding Progress (in thousands)

Employee Retirement System - Schedule of Funding Progress Value of Assets Unfunded Liability Funded Ratios June 30, 2012 Actuarial Value Market Value of Actuarial Valuation Date of Assets (AVA)

Assets (MVA)

Miscellaneous Police Safety Fire Safety Total 854,296 473,233 283,211 1,610,740 712,715 395,085 236,130 1,343,930 Accrued Liability 1,045,037 565,214 345,725 1,955,976 AVA MVA AVA MVA 190,741 91,981 62,514 345,236 332,322 170,129 109,595 612,046 81.7%

83.7%

81.9%

82.3%

68.2%

69.9%

68.3%

68.7%

Value of Assets June 30, 2011 Actuarial Value Market Value of Actuarial Valuation Date of Assets (AVA)

Assets (MVA)

Unfunded Liability Funded Ratios Miscellaneous Police Safety Fire Safety Total 823,258 453,318 274,471 1,551,047 729,226 404,171 243,777 1,377,174 Accrued Liability 1,004,444 548,400 335,781 1,888,625 181,186 95,082 61,310 337,578 275,218 144,229 92,004 511,451 AVA MVA AVA MVA 82.0%

82.7%

81.7%

82.1%

72.6%

73.7%

72.6%

72.9%

Annual Covered Payroll 105,544 43,205 22,967 171,716 Annual Covered Payroll 110,234 44,567 23,681 178,482 Annual Covered Payroll 116,877 45,620 24,746 187,243 Annual Covered Payroll 169,331 177,229 165,137 UL as a %

of Payroll 164.4%

213.3%

258.9%

189.1%

UL as a %

of Payroll 180.7%

212.9%

272.2%

201.1%

Value of Assets June 30, 2010 Actuarial Value Market Value of Actuarial Valuation Date of Assets (AVA)

Assets (MVA)

Unfunded Liability Funded Ratios Miscellaneous Police Safety Fire Safety Total 783,241 432,262 263,280 1,478,783 611,101 339,467 206,169 1,156,737 Accrued Liability 968,464 519,062 317,672 1,805,198 185,223 86,800 54,392 326,415 AVA MVA AVA MVA 357,363 179,595 111,503 648,461 80.9%

83.3%

82.9%

81.9%

63.1%

65.4%

64.9%

64.1%

UL as a %

of Payroll 158.5%

190.3%

219.8%

174.3%

Other Post-employment Benefits - Schedule of Funding Progress Actuarial Valuation Date June 30, 2011 June 30, 2010 June 30, 2008 Actuarial Value of Assets (AVA) 67,747 63,920 63,097 Accrued Liability 201,108 211,914 155,728 Unfunded Liability AVA 133,361 147,994 92,631 Funded Ratios AVA UL as a %

of Payroll 78.8%

83.5%

56.1%

33.7%

30.2%

40.5%

See accompanied independent auditors' report 85

(This page left blank intentionally) 86

7 Nomao Govermenta Fns

NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS are used to account for revenues derived from specific taxes or other earmarked revenue sources (other than for major capital projects) that are restricted by law or administrative action to expenditures for specified purposes.

GAS TAX AND ROADS FUND - Established to account for the construction and maintenance of the road network system of the City. Financing is provided primarily by the City's shore of Federal, State, and local gasoline taxes, Federal, State, and local regulations require that these gasoline taxes be used to Improve and maintain streets, and includes programs Intendod to improve the air quality of the region.

WORKFORCE DEVELOPMENT FUND - Established to account for the City's involvement in Federal, State, and local programs to create jobs and provide the unemployed citizens In the Anaheim area with job training opportunities.

COMMUNITY DEVELOPMENT BLOCK GRANT FUND - Established to account for financing of the development of viable urban communities through the provision of decent housing, suitable living environments and economic opportunity, principally for persons of low and moderate income. Financing is provided by the Federal Housing and Urban Development (HUD) grants.

COMMUNITY SERVICES FACILITIES - Established to account for the development of new parksites, playgrounds and library facilities, Federal and State grant programs, in conjunction with fees charged to residential and commercial developers, provide financing. Much of this revenue is used to support the capital construction of parks and other recreational facilities throughout the City. Budget fluctuations from year to year are the result of variations in the capital program.

SEWER AND STORM DRAIN CONSTRUCTION FUND - Established to account for the construction of the City's waste water collection and disposal system. Financing is provided by fees charged to residential and commercial developers.

GRANTS FUND - Established to account for various grants requiring segregated fund accounting. Financing is provided by Federal, State, and local agencies.

ANAHEIM RESORT MAINTENANCE DISTRICT FUND - Established to account for the levy and collection of special assessments to pay the cost of annual maintenance and improvements within the district against those parcels that specifically benefit from the enhanced maintenance and improvements.

ANAHEIM TOURISM IMPROVEMENT DISTRICT FUND - Established to account for the collection of a special assessment supporting marketing, promotion and transit project costs in support of the City's tourism and convention industry.

NARCOTIC ASSET FORFEITURE FUND - Established to account for funds received from Federal and State agencies that are derived from monies and property seized by the Police Department in drug related Incidents. These funds are used to supplement existing resources of the City's law enforcement activities.

DEBT SERVICE FUNDS are used to account for the accumulation of resources and the payment of principal and interest on general debt of the City and related entities.

GENERAL OBLIGATION BONDS FUND - Established to accumulate resources for the payment of principal and interest on general obligation bonds of the City. Debt service is financed by property tax revenues, MUNICIPAL FACILITIES FUND - Established to accumulate resources for payment of the principal and interest on the certificates of participation for the Parking Facility Project, Police Facilities Projects, Arena Land Acquisition, and other various acquisitions and capital improvements.

ANAHEIM RESORT IMPROVEMENTS FUND - Established to accumulate resources for payment of the principal and interest on the lease revenue bonds for the Anaheim Resort improvements.

CAPITAL PROJECTS FUNDS are used to account for resources used for the acquisition and construction of capital assets by the City, except for those financed by proprietary funds.

TRANSPORTATION IMPROVEMENT PROJECTS FUND - Established to account for transportation improvement projects in the City, primarily in support of the Anaheim Regional Transportation Intermodal Center (ARTIC), which Is a transportation gateway and mixed-use activity center funded by grants from OCTA. Financing is provided by Federal, State and local agencies.

DEVELOPMENT IMPACT PROJECTS FUND - Established to account for Infrastructure improvements, primarily in the Platinum Triangle area, which provide development opportunities for high density, mixed use, office, restaurant, and residential projects. Financing Is provided primarily by development impact fees.

OTHER CAPITAL IMPROVEMENTS FUND - Established to account for miscellaneous capital projects as determined by the City Council. Currently, financing is provided by fees from developers for Infrastructure Improvements, HUD108 loans and subsidies from the General Fund, MELLO-ROOS PROJECTS - Established to account for road, sewer and water improvements In the community facility districts. Financing is provided by the sale of special tax bonds that are secured by and payable from the proceeds of an annual special assessment on the property within the district.

CITY OF ANAHEIM Combining Balance Sheet Nonmajor Governmental Funds by Fund Type June 30, 2013 (in thousands)

ASSETS Cash and cash equivalents Investments Accounts receivable, net Accrued interest receivable Notes receivable, net Due from other funds Due from other governments Prepaid and other assets Restricted cash and cash equivalents Restricted investments Due from the Successor Agency Total assets Nonmajor Special Revenue Funds 15,412 31,952 1,261 113 25,921 22,925 4,619 6,349 1-08,552 6,406 161 1,090 728 8,385 14,090 25,921 6,349 46,360 Nonmajor Debt Service Funds 229 475 22 7

22,095 38,911 61,739 114 114 Nonmajor Capital Projects Funds 9,564 19,826 72 6,989 14,838 19,517 7,928 78,734 8,985 22 6,989 15,996 3,929 7,928 11,857 Total Nonmajor Governmental Funds 25,205 52.253 1,261 207 25,921 6,989 37,770 4,619 41,612 38,911 14,277 249,025 15,505 183 1,090 7,717 24,495 18,019 25,921 14,277 58,217 LIABILITIES Accounts payable Wages payable Deposits Due to other funds Total liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenues Unavailable resources - long-term notes receivable Unavailable resources - due from Successor Agency Total deferred inflows of resources FUND BALANCES Nonspendable:

Prepaid and other assets Restricted:

Anaheim Resort maintenance and improvement Capital projects Debt service Development impact projects Grant purposes Homebuyer assistance program Streets, roads and transportation improvement projects Assigned:

Capital projects Other purposes Unassigned Total fund balances Total liabilities, deferred inflows of resources, and fund balances 4,619 8,577 61,625 2,664 44,712 4,619 8,577 2,664 61,625 57,890 4,839 4,124 25,151 13,178 4,839 4,124 25,045 743 13 (7,331) 53,807 106 7,299 (3,900) 50,881 78,734 8,042 13 11, 24 31 249,025 61,625 61,739 87 See accompanied independent auditors' report

CITY OF ANAHEIM Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds by Fund Type Year Ended June 30, 2013 (in thousands)

Revenues:

Property taxes Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues Expenditures:

Current:

City Attorney Finance Police Fire Community Development Planning Public Works Community Services Convention, Sports and Entertainment Capital outlay Debt service:

Principal retirement Interest charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Nonmajor Special Revenue 3,508 62,354 17,086 1,093 1,494 85,535 120 9,277 1,054 7,826 1,435 10,278 861 9,279 51,982 984 556 93,652 (8,117) 1,527 (245) 30,250 31,532 23,415 30,392

$5 53,807 Nonmajor Debt Service 730 6

130 866 Nonmajor Capital Projects 809 47,833 400 2,100 51,142 130 234 1,583 677 46,500 Total Nonmajor Governmental 730 4,317 110,193 17,086 1,623 3,594 137,543 120 130 9,277 1,054 8,060 1,435 11,862 1,538 9,279 98.482 18,948 19,808 179,993 (42,450) 44,850 (1,473) 31,500 74,877 32,427 133,886 166J313 Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year 16,779 18,802 35,712 (34,846) 43,073 43,073 8,227 53,398 61.625 1,185 450 50,629 513 250 (1,228) 1,250 272 785 50,096 50.881 See accompanied independent auditors' report 88

CITY OF ANAHEIM Combining Balances Sheet Nonmajor Special Revenue Funds June 30, 2013 (in thousands)

ASSETS Cash and cash equivalents Investments Accounts receivable, net Accrued interest receivable Notes receivable, net Due from other governments Prepaid and other assets Restricted cash and cash equivalents Due from the Successor Agency Total assets Gas Tax and Roads 3,673 7,614 19 Workforce Development Community Development Block Grant Community Services Facilities 2,247 4,659 2

16 Sewer and Storm Drain Construction 2,765 5,732 22 3

6,501 627 16,638 4,251 1,051 I

LIABILITIES Accounts payable Wages payable Deposits Due to other funds Total liabilities 2,228 53 2,281 1,054 495 23 517 1,035 6,349 13,477 315 21 211 547 1

6,501 6,349 12,851

$6,925 8.519 104 727 1

1 1,090 105 1,818 DEFERRED INFLOWS OF RESOURCES Unavailable revenues Unavailable resources - long-term notes receivable Unavailable resources - due from Successor Agency Total deferred inflows of resources 13,228 6

13,228 6

FUND BALANCES Nonspendable:

Prepaid and other assets Restricted:

Anaheim Resort maintenance and improvement Development impact projects Grant purposes Homebuyer assistance program Streets, roads and transportation improvement projects Assigned:

Capital projects Other purposes Unassigned Total fund balances Total liabilities, deferred inflows of resources, and fund balances 4,251 6,477 6,701 79 19,766 342

(,1) 13 13 1,054 79

!3,477 6,820 6,925 6,701 See accompanied independent auditors' report 89

CITY OF ANAHEIM Combining Balances Sheet Nonmajor Special Revenue Funds June 30, 2013 (in thousands) (continued)

ASSETS Cash and cash equivalents Investments Accounts receivable, net Accrued interest receivable Notes receivable, net Due from other governments Prepaid and other assets Restricted cash and cash equivalents Due from the Successor Agency Total assets Anaheim Anaheim Resort Tourism Narcotic Maintenance Improvement Asset Grants District District Forfeiture 767 2,912 1,776 1,272 1,590 6,037 3,682 2,638 1,256 14 21 12 9

19,420 4,576 33 367 Total 15,412 31,952 1,261 113 25,921 22,925 4,619 6,349 108,552 LIABILITIES Accounts payable Wages payable Deposits Due to other funds Total liabilities 504 34 538 855 19,420 20,275 9,003 421 5

426 6,726 1,445 2

1,447 3,919 167 6,406 21 161 1,090 728 188 8,385 DEFERRED INFLOWS OF RESOURCES Unavailable revenues Unavailable resources - long-term notes receivable Unavailable resources - due from Successor Agency Total deferred inflows of resources FUND BALANCES Nonspendable:

Prepaid and other assets Restricted:

Anaheim Resort maintenance and improvement Development impact projects Grant purposes Homebuyer assistance program Streets, roads and transportation improvement projects Assigned:

Capital projects Other purposes Unassigned Total fund balances Total liabilities, deferred inflows of resources, and fund balances 367 8,577 14,090 25,921 6,349 46,360 4,619 8,577 13,178 4,839 4,124 25,045 743 13 (7,331) 53,807 108,552 1,029 4,124 3,731 5.279 401 5,921 26,734 8,577 9,003 5,279 6,726 3,731 See accompanied independent auditors' report 90

CITY OF ANAHEIM Combining Statement of Revenues, Expenditures and Changes In Fund Balances (Deficit)

Nonmajor Special Revenue Funds Year Ended June 30, 2013 (in thousands)

Gas Tax and Roads Workforce Development Community Development Block Grant Revenues:

Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues Expenditures:

Current:

City Attorney Police Fire Community Development Planning Public Works Community Services Convention, Sports and Entertainment Capital outlay Debt service:

Principal retirement Interest charges Total expenditures Excess (deficiency) of revenues over (under) expenditures 41 35,361 174 278 13 35,867 Community Services Facilities 2,326 284 198 233 3,041 Sewer and Storm Drain Construction 1,103 97 1,200 4,005 3,628 314 790 4,732 4,005 120 3,959 1,123 1,434 6,264 40,469 487 452 188 645 361 285 250 Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources (uses)

Net change in fund balances (deficit)

Fund balances (deficits) at beginning of year Fund balances at end of year 46,983 (11,116) 1,327 26,250 27,577 164,61 225 16,686 3,959 46 605 478 4,699 33 833 2,208 646 554 64 (3

13 33 46 79 2,208 4,612 6,820 554 6,147 6,701 See accompanied independent auditors' report 91

CITY OF ANAHEIM Combining Statement of Revenues, Expenditures and Changes In Fund Balances Nonmajor Special Revenue Funds Year Ended June 30, 2013 (in thousands) (continued)

Revenues:

Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues Expenditures:

Current:

City Attorney Police Fire Community Development Planning Public Works Community Services Convention, Sports and Entertainment Capital outlay Debt service:

Principal retirement Interest charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources (uses)

Grants 38 14,228 132 454 14,852 Anaheim Resort Maintenance District 4,415 (8) 4 4,411 Anaheim Tourism Improvement District 12,497 40 12,537 Narcotic Asset Forfeiture 4,848 42 4,890 6,976 1,054 2,744 2,301 1

31 3,622 186 Total 3,508 62,354 17,086 1,093 1,494 85,535 120 9,277 1,054 7,826 1,435 10,278 861 9,279 51,982 984 556 93,652 (8,117) 1,527 (245) 30,250 31,532 23,415 30,392 53,807 9,279 5,953 1,439 12,399 2,453 (151)

(151) 2,302 3,619 E

-5,921 3,622 789 200 200 989 7,588 8,577 15,264 (2,727)

(94) 4,000 3,906 1,179 4,100 5,279 2,739 129 78 5,247 (357)

(357) 4,088 3,731 Net change In fund balances Fund balances at beginning of year Fund balances at end of year See accompanied independent auditors' report 92

CITY OF ANAHEIM Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual -- All Nonmajor Special Revenue Funds Year Ended June 30, 2013 (in thousands)

Gas Tax and Roads Final Variance Budgeted Actual with Final Amounts Amounts Budget Workforce Development Final Variance Budgeted Actual with Final Amounts Amounts Budget Revenues:

Licenses, fees and permits 35 41 6

Intergovernmental revenues 76,501 35,361 (41,140) 4,933 4,005 (928)

Charges for services 268 174 (94)

Use of money and property 278 278 Other 8

13 5

Total revenues 76,812 35,867 (40,945) 4,933 4,005 (928)

Expenditures:

City Attorney Police Fire Community Development 4,849 3,959 (890)

Planning 36 4

(32)

Public Works 73,379 46,979 (26,400)

Community Services Convention, Sports and Entertainment Total expenditures 73,415 46,983 (26,432) 4,849 3,959 (890)

Excess (deficiency) of revenues over (under) expenditures 3,397 (11,116)

(14,513 84 46 (38)

Other financing sources (uses):

Transfers in 111 1,327 1,216 Transfers out Issuance of loan payable 26,250 26,250 Total other financing sources (uses) 26,361 27,577 1,216 Net change in fund balances 29,758 16,461 (13,297) 84 46 (38)

Fund balances at beginning of year 225 225 (33}

{33)

Fund balances at end of year

$ 29,983 16,686

$ (13,297) 51 13 (38)

See accompanied independent auditors' report 93

CITY OF ANAHEIM Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual -- All Nonmajor Special Revenue Funds Year Ended June 30, 2013 (in thousands) (continued)

Community Development Block Grant Final Variance Budgeted Actual with Final Amounts Amounts Budget Community Services Facilities Final Variance Budgeted Actual with Final Amounts Amounts Budget Revenues:

Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues 7,330 223 326 7,879 3,628 314 790 4,732 (3,702) 4,835 393 91 41 464 (3,147) 5,269 2,326 2,326 284 (4,551)

(393) 198 157 233 233 3,041 (2,228)

Expenditures:

City Attorney Police Fire Community Development Planning Public Works Community Services Convention, Sports and Entertainment Total expenditures 120 5,514 1,471 774 7,879 120 2,658 1,434 487 4,699 (2,856)

(37)

Excess (deficiency) of revenues over (under) expenditures 33 Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources (uses)

Net change in fund balances 33 Fund balances at beginning of year 46 46 Fund balances at end of year 46 7

79 (287)

(3,180) 33 33

ý33 5,704 5,704 (435)

(435) 4,612 4,177 833 2,208 2,208 4,612 6,820 833 (4,871)

(4,871) 2,643 2,643 2,643 See accompanied independent auditors' report 94

CITY OF ANAHEIM Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual -- All Nonmajor Special Revenue Funds Year Ended June 30, 2013 (in thousands) (continued)

Sewer and Storm Drain Construction Final Variance Budgeted Actual with Final Amounts Amounts Budget Grants Final Variance Budgeted Actual with Final Amounts Amounts Budget Revenues:

Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues 70 1,103 1,033 30 24,737 38 14,228 132 454 14,852 8

(10,509) 97 97 20 8

24,795 70 1,200 1,130 Expenditures:

City Attorney Police Fire Community Development Planning Public Works Community Services Convention, Sports and Entertainment Total expenditures 14,572 2,345 7,855 8,227 1,189 2,744 239 774 646 774 646 554 (128)

(128) 1,258 416 25,188 (393) 12,399 2,453 112 446 (9,943)

(6,345)

(1,156)

(5,111)

(177)

(12,789) 2,846 (151)

(1511 2,695 2,695 Excess (deficiency) of revenues over (under) expenditures (704)

Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources (uses)

Net change in fund balances Fund balances at beginning of year Fund balances at end of year (151)

(704) 6,147 5,443 554 6,147 6,701 1,258 1,258 (393) 3,619 3,226 (151) 2,302 3,619 5,921 See accompanied independent auditors' report 95

CITY OF ANAHEIM Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual -- All Nonmajor Special Revenue Funds Year Ended June 30, 2013 (in thousands) (continued)

Anaheim Resort Maintenance District Final Variance Budgeted Actual with Final Amounts Amounts Budget Anaheim Tourism Improvement District Final Variance Budgeted Actual with Final Amounts Amounts Budget Revenues:

Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues 4,477 4,415 67 (8) 4 4

4,548 4,411 Expenditures:

City Attorney Police Fire Community Development Planning Public Works Community Services Convention, Sports and Entertainment Total expenditures (62)

(75)

(137)

(1,361)

(1,361) 1,224 10,958 12,497 32 40 10,990 12,537 1,539 8

1,547 4,983 3,622 4,983 3,622 789 Excess (deficiency) of revenues over (under) expenditures (435) 164 5,821 9,279 15,264 (4,274)

(110) 4,000 3,890 (384) 4,100 3,716 164 5,821 9,279 15,264 (2,727)

(94) 4,000 3,906 1,179 4,100 5,279 Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources (uses)

Net change in fund balance Fund balances at beginning of year Fund balances at end of year 200 200 1,547 16 16 1,563 1,563 200 (235) 7,588 7,353 200 989 7,588 8,577 1,224 1,224 See accompanied independent auditors' report 96

CITY OF ANAHEIM Schedule of Revenues, Expenditures and Changes In Fund Balances Budget and Actual -- All Nonmajor Special Revenue Funds Year Ended June 30, 2013 (in thousands) (continued)

Narcotic Asset Forfeiture Final Variance Budgeted Actual with Final Amounts Amounts Budget 3,040 4,848 1,808 Revenues:

Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues 65 42 3,105 Expenditures:

City Attorney Police Fire Community Development Planning Public Works Community Services Convention, Sports and Entertainment Total expenditures 6,730 4,890 5,247 5,247 (357)

(23) 1,785 (1,483)

(1,483) 3,268 6,730 (3,625)

Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources (uses)

Net change in fund balance Fund balances at beginning of year Fund balances at end of year (3,625) 4,088

$463 (357) 4,088 3,731 3,268 3,268 See accompanied independent auditors' report 97

CITY OF ANAHEIM Combining Balance Sheet Nonmajor Debt Service Funds June 30, 2013 (in thousands)

ASSETS Cash and cash equivalents Investments Accrued interest receivable Due from other governments Restricted cash and cash equivalents Restricted investments Total assets LIABILITIES AND FUND BALANCES Liabilities:

Accounts payable Total liabilities Fund balances:

Restricted for debt service Total fund balances Total liabilities and fund balances General Obligation Bonds 226 469 1

7 7

703 Municipal Facilities Anaheim Resort Improvements 3

6 21 63 2,266 2,359 5

5 2,354 2,354 2,359 22,032 36,645 58,677 109 109 58,568 58,568 58,677 Total 229 475 22 7

22,095 38,911 61,739 114 114 61,625 61,625 61,739 703 703

$7703 See accompanied independent auditors' report 98

CITY OF ANAHEIM Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Debt Service Funds Year Ended June 30, 2013 (in thousands)

Revenues:

Property taxes Intergovernmental revenues Use of money and property Total revenues General Obligation Bonds 730 6

4 740 Municipal Facilities 125 125 Anaheim Resort Improvements 1

1 Expenditures:

Current:

Finance Public Works Debt service:

Principal retirement Interest charges Total expenditures Excess (deficiency) of revenues over (under) expenditures 130 I

Total 730 6

130 866 130 1

16,779 18,802 35.712 (34,846) 43,073 43,073 8,227 53,398 61,625 Other financing sources:

Transfers in Total other financing sources Net change In fund balances Fund balances at beginning of year Fund balances at end of year 580 118 699 41 41 662

$7 03 1,494 856 2,350 (2,225) 2,185 2,185 (40) 2,394 2,354 14,705 17,828 32.663 (32,662) 40,888 40,888 8,226 50,342 58,568 See accompanied independent auditors' report 99

CITY OF ANAHEIM Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual -- All Debt Service Funds Year Ended June 30, 2013 (in thousands)

General Obligation Bonds Final Variance Budgeted Actual with Final Amounts Amounts Budget Municipal Facilities Final Variance Budgeted Actual with Final Amounts Amounts Budget Revenues:

Property taxes Intergovernmental revenues Use of money and property Total revenues 696 730 6

6 6

4 708 740 34 (2) 32 Expenditures:

Finance Public Works Convention, Sports and Entertainment Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources:

Transfers in Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year 699 699 699 9

9 662 671 699 41 41 662 703 32 32 32 125 125 599 1,751 2,350 (2,225) 2,185 2,185 (40) 2,394 2,354 125 125 599 1,751 2,350 (2,225) 2,185 2,185 (40) 2,394 2,354 See accompanied independent auditors' report 100

CITY OF ANAHEIM Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual -- All Debt Service Funds Year Ended June 30, 2013 (in thousands) (continued)

Anaheim Resort Improvements Final Variance Budgeted Actual with Final Amounts Amounts Budget Revenues:

Property taxes Intergovernmental revenues Use of money and property Total revenues 29 29 Expenditures:

Finance Public Works Convention, Sports and Entertainment Total expenditures 32,663 Excess (deficiency) of revenues over (under) expenditures Other financing sources:

Transfers in Total other financing sources Net change in fund balances Fund balances at beginning of year Fund balances at end of year 32.663 (32.634) 36,701 36,701 4,067 50,342 54,409 1

32,663 32.663 (32,662) 40,888 40,888 8,226 50,342

$ 58,568 (28) 4,187 4,187 4,159 4,159 (28)

(28)

See accompanied independent auditors' report 101

CITY OF ANAHEIM Combining Balance Sheet Nonmajor Capital Projects Funds June 30, 2013 (in thousands)

Transportation Improvement Projects 178 370 ASSETS Cash and cash equivalents Investments Accrued interest receivable Due from other funds Due from other governments Restricted cash and cash equivalents Due from the Successor Agency Total assets Development Impact Projects 6,574 13,628 24 29 20,255 Other Capital Improvements 931 1,929 27 6,960 121 7,928 17,896 Mello-Roos Projects 1,881 3,899 21 206 19,396 25,403 14,632 LIABILITIES Accounts payable Wages payable Due to other funds Total liabilities 8,043 604 13 6,989 15,045 3,929 3.929 7

611 5

333 2

5 335 Total 9,564 19,826 72 6,989 14,838 19,517 7,928 78,734 8,985 22 6,989 15,996 3,929 7,928 11,857 2,664 44,712 106 7,299 (3,900) 50,881 78,734 DEFERRED INFLOWS OF RESOURCES Unavailable revenues Unavailable resources - due from Successor Agency Total deferred inflows of resources 7,928 7,928 FUND BALANCES (DEFICITS)

Restricted:

Capital projects Development Impact projects Streets, roads and transportation improvement projects Assigned:

Capital projects Unassigned Total fund balances (deficit)

Total liabilities, deferred inflows of resources, and fund balances (deficit) 2,664 19,644 106 (3,900)

(3,794) 19,644 15.180 20,255 7,299 9,963 17,896 25,068 25,068 25,403 See accompanied independent auditors' report 102

CITY OF ANAHEIM Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficit)

Nonmajor Capital Projects Funds Year Ended June 30, 2013 (in thousands)

Transportation Improvement Projects Development Impact Projects Other Capital Improvements Mello-Roos Projects Revenues:

Licenses, fees and permits Intergovernmental revenues Use of money and property Other Total revenues Expenditures:

Current:

Community Development Public Works Community Services Capitol outlay Debt service:

Principal retirement Interest charges Total expenditures 809 47,056 777 (83)

(23) 1,551 46,973 3,114 506 507 1,013 42 42 1,424 38,542 96 591 3,679 234 86 750 39,966 7,007 5,116 (2,002) 435 450 1,205 (192) 63 4,279 4,342 (4,300)

Total 809 47,833 400 2,100 51,142 234 1,583 677 46,500 1,185 450 50,629 513 250 (1,228) 1,250 272 785 50,096 50,881 Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses):

Transfers In Transfers out Issuance of loan payable Total other financing sources (uses)

Net change in fund balances (deficit)

Fund balances (deficit) at beginning of year Fund balances (deficit) at end of year 250 7,007 (10,801)

$13,794) 1,250 1,250 (752) 20,396 19,644 250 58 9,905 9,963 (1,228)

(1,228)

(5,528) 30,596 See accompanied independent auditors' report 103

CITY OF ANAHEIM Schedule of Revenues, Expenditures and Changes in Fund Balances (Deficit)

Budget and Budgetary Basis Actual -- All Capital Projects Funds Year Ended June 30, 2013 (in thousands)

Transportation Improvement Projects Final Variance Budgeted Actual with Final Amounts Amounts Budget 157,230 47,056 (110,174)

Development Impact Projects Final Variance Budgeted Actual with Final Amounts Amounts Budget Revenues:

Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues Expenditures:

Fire Community Development Planning Public Works Community Services Total expenditures 500 205 809 777 309 572 (123) 758 (83)

(83) 100 (23) 157,230 46,973 (110,257) 805 1,563 90 (90) 21 157,570 157,591 12 39,954 39,966 7,007 (9)

(117,616)

(117,625) 7,368 4,339 2,160 6,589 (5,784) 4,205 911 5,116 (3,553)

(134)

(1,249)

(1,473) 2,231 Excess (deficiency) of revenues over (under) expenditures (361)

Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources Net change in fund balances (deficit)

Fund balances (deficit) at beginning of year Fund balances (deficit) at end of year Adjustment to reconcile to GAAP:

Expiration of transportation fee credits Ending fund balance - GAAP basis (361)

(10,801)

(11,162) 7,007 (10,801)

(3,794) 7,368 7,368 1,250 1,250 (4,534) 20,396 15,862 1,250 1,250 (2,303) 20,396 18,093 1,551 19,644 2,231 2,231 See accompanied independent auditors' report 104

CITY OF ANAHEIM Schedule of Revenues, Expenditures and Changes in Fund Balances (Deficit)

Budget and Budgetary Basis Actual -- All Capital Projects Funds Year Ended June 30, 2013 (in thousands)

Other Capital Improvements Final Variance Budgeted Actual with Final Amounts Amounts Budget Mello-Roos Projects Final Variance Budgeted Actual with Final Amounts Amounts Budget Revenues:

Licenses, fees and permits Intergovernmental revenues Charges for services Use of money and property Other Total revenues 449 435 884 506 507 1,013 57 72 129 42 42 42 42 Expenditures:

Fire Community Development Planning Public Works Community Services Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses):

Transfers in Transfers out Issuance of loan payable Total other financing sources (uses)

Net change in fund balances (deficit)

Fund balances (deficit) at beginning of year Fund balances (deficit) at end of year 1,119 1,119 463 1,582 (698) 250 (100) 150 (548) 9,905 9,357 86 1,205 (192) 250 (377)

(377) 506 100 100 606 606 30,596 30,596 (30,596) 4,342 4,342 (4,300)

(1,228)

(1,228)

(5,528) 30,596 25,068 (26,254)

(26,254) 26,296 (1,228)

(1,228) 25,068 25,068 250 58 9,905 9,963 (30,596) 30,596 See accompanied independent auditors' report 105

(This page left blank intentionally) 106

Inera Sevc Fud

INTERNAL SERVICE FUNDS INTERNAL SERVICE FUNDS are used to account for the financing of centralized services to City departments on a cost-reimbursement basis (including depreciation).

GENERAL BENEFITS AND INSURANCE FUND - Established to account for employee compensated absences, retirement and health benefits, and self-insurance programs.

MOTORIZED EQUIPMENT FUND - Established to account for motorized equipment used by City departments.

INFORMATION AND COMMUNICATION SERVICES FUND - Established to account for data processing and communication services to City departments.

MUNICIPAL FACILITIES MAINTENANCE - Established to account for City building maintenance services and equipment used by City departments.

CITY OF ANAHEIM Combining Statement of Net Position Internal Service Funds June 30, 2013 (in thousands)

ASSETS Current assets:

Cash and cash equivalents Investments Accounts receivable, net Accrued interest receivable Note receivable Interfund receivable Inventories Prepaid and other assets Total current assets Noncurrent assets:

Accounts receivable, less current portion Interfund receivable, less current portion Net other post-employment benefits (OPEB) asset Capital assets:

Buildings, structures and improvements Machinery and equipment Less accumulated depreciation Capital assets, net Total noncurrent assets Total assets LIABILITIES Current liabilities:

Accounts payable Wages payable Compensated absences Self-insurance liability Long-term debt Unearned revenues Total current liabilities Noncurrent liabilities:

Compensated absences, less current portion Self-insurance liability, less current portion Long-term debt, less current portion Total noncurrent liabilities Total liabilities NET POSITION Net investment in capital assets Unrestricted Total net position General Benefits and Insurance 19,490 40,402 4,391 145 41 13 58 64,540 Information and Motorized Communication Equipment Services 1,698 3,521 24 13 104 749 756 6,865 2,382 4,939 9

7,330 Municipal Facilities Maintenance 1,469 3,045

- 33 12 4,559 2,147 49 11,017 81 (81) 13,213 77,753 3,230 36,083 (28,212) 11,101 11,101 17,966 18,795 (14,282) 4,513 4,513 11,843 3,870 2,858 13,737 7,916 834 39 1,870 6

1,790 30,171 4,190 31,506 35,696 65,867 11,886 11,886 873 873 11,101 5,992 17,093 892 2,768 477 477 3,245 3,144 5,454 8,598 4,607 2,306 (4,793) 2,120 2,120 6,679 1,007 41 1,048 1,048 2,120 3,511 5,631 Total 25,039 51,907 4,448 179 41 117 749 814 83,294 2,147 49 11,017 7,837 57,265 (47,368) 17,734 30,947 114,241 7,581 2,944 13,737 7,916 892 1,790 34,860 4,190 31,506 477 36,173 71,033 16,365 26,843 43,208 107 See accompanied independent auditors' report

CITY OF ANAHEIM Combining Statement of Revenues, Expenses and Changes In Net Position Internal Service Funds Year Ended June 30, 2013 (in thousands)

Operating revenues:

Charges for services Other Total operating revenues General Benefits and Insurance 125,365 66 125,431 3,593 2,168 9,500 112,710 127,971 (2,540)

Operating expenses:

Salaries and wages Maintenance and operations Insurance premiums and claims Compensated absences and other benefits Depreciation Total operating expenses Operating loss Nonoperating income (expenses):

Investment loss Interest expense Gain from disposal of capital assets Total nonoperating income Loss before transfers Motorized Equipment 10,228 20 10.248 3,558 5,390 2,183 11,131 (883)

Information and Communication Services 14,083 14,083 Municipal Facillties Maintenance 8,018 33 8,051 690 12,933 2,949 5,979 (162)

(10)

Transfers out Change in net position Net position at beginning of year Net position at end of year (162)

(2,702)

(2,702) 14,588 1 ý1,886 299 289 (594)

(61)

(655) 17,748 17,093 2,115

.15,738 (1,655)

(55)

(87)

(142)

(1.797)

(1,797) 10,395 8,598 181 9,109 (1,058)

(9)

(9)

(1,067)

(1,067) 6,698 Total 157,694 119 157,813 10,790 26,470 9,500 112,710 4,479 163,949 (6,136)

(236)

(87) 299 (24)

(6,160)

(61)

(6,221) 49,429 43,208 See accompanied independent auditors' report 108

CITY.OF ANAHEIM Combining Statement of Cash Flows Internal Service Funds Year Ended June 30, 2013 (in thousands)

Cash flows from operating activities:

Receipts from interfund services provided Payments to suppliers Payments for salaries and wages to employees Payments for interfund services used Payments for insurance premiums and claims Payments for compensated absences and other benefits Other payments Net cash provided by (used for) operating activities Cash flows from noncapital financing activities:

Receipt of interfund balances Payment of interfund balances Transfer out Net cash provided by (used for) noncapital financing activities Cash flows from capital and related financing activities:

Proceeds from sale of capital assets Capital purchases Principal payments on long-term debt Interest payments Net cash used for capital and related financing activities Cash flows from investing activities:

Purchase of investment securities Proceeds from sale and maturity of investment securities Interest received Net cash provided by (used for) investing activities Decrease in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year General Benefits and Insurance 125,365 (886)

(3,933)

(1,456)

(9,210)

(115,244)

(44)

(5,408) 13 (10) 3 Motorized Equipment 10,228 (5,494)

(3,561)

(372)

(4) 797 Information and Communication Services 14,083 (12,759)

(695)

(898)

(269)

Municipal Facilities Maintenance 8,018 (4,822)

(2,944)

(540)

(288)

(61)

(61)

Total

$ 157.694 (23,961)

(11,133)

(3,266)

(9,210)

(115,244)

(48)

(5,168) 13 (10)

(61)

(58) 357 (3,477)

(1,112)

(87)

(4,319)

(21,222) 21,642 852 1,272 (8,273) 33,312

$ 25,039 357 (2,466)

(17,763) 16,845 671 (247)

(5,652) 25,142 19,490 (2,109)

(1,000) 1,468 69 537 (836) 2,534 1,698 (112)

(1,112)

(87)

(1,311)

(1,595) 2,059 56 520 (1,060) 3,442 2,382 (899)

(899)

(864) 1,270 56 462 (725) 2,194 1,469 See accompanied independent auditors' report 109

CITY OF ANAHEIM Combining Statement of Cash Flows Internal Service Funds Year Ended June 30, 2013 (in thousands)

General Benefits and Insurance (2,540)

Reconciliation of operating loss to net cash used for operating activities:

Operating loss Adjustment to reconcile operating loss to net cash provided by (used for) operating activities:

Depreciation Changes in assets and liabilities that provided (used) cash Accounts receivable Inventories Note receivable Prepaid and other assets Accounts payable Wages payable Unearned revenues Compensated absences Self-Insurance liability Other post retirement employment benefits (OPEB) asset Total adjustments Net cash used for operating activities Schedule of noncash financing and investing activities:

Capital assets financed through capital leases Decrease in fair value of investments Motorized Equipment (883)

Information and Communication Services (1,655)

Municipal Facilities Maintenance (1,058)

(973) 15 (472)

(379) 291 (177) 79 (1,252)

(2,868)

(5,408) 2,183 (24)

(24)

(756) 304 (3) 2,115 181 (33) 617 5

Total (6,136) 4,479 (1,030)

(24) 15 (756)

(275)

(382) 291 (177) 79 (1,252) 968 (5,168) 787 (956)

(724)

(5) 1,680 797 1,386 (269) 787 (102) 770 (288)

(58)

(732)

(64)

See accompanied independent auditors' report 110

Fiucar Fud

CITY OF ANAHEIM Statement of Changes in Fiduciary Assets and Liabilities Agency Fund -- Mello-Roos Year Ended June 30, 2013 (in thousands)

ASSETS Restricted cash and cash equivalents Restricted investments Due from other governments Total assets Beginning Balance 5,085 3,256 48 8

8,389 Additions 4,933 4,868 9,801 4,942 Deductons (4,972)

(4.859)

L__(9,831)

(4,972)

Ending Balance 5,046 3,256 57 8,359 8,359 LIABILITIES Due to bond holders 8,389 See accompanied independent auditors' report III

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St tsia Secio

STATISTICAL SECTION The Statistical Section is included to provide detailed data on the physical, economic, social and political characteristics of the reporting government, It is Intended to provide the user with a broader and more complete understanding of the government and its financial affairs than is possible from the basic financial statements and supplementary Information Included in the Financial Section.

CITY OF ANAHEIM STATISTICAL INFORMATION (Unaudited)

The Statistical Section is included to provide financial statement users with additional historical perspective, context, and detail for them to use In evaluating the information contained within the financial statements, notes to the financial statements, and required supplementary information with the goal of providing the user a better understanding of the City's economic condition.

Page Contents Financial trends These schedules contain information to help the reader understand how the City's financial performance and well-being hove changed over time.

Net Position by Component - Last Ten Fiscal Years 114 Changes in Net Position - Last Ten Fiscal Years 115 Governmental Activities Tax Revenues by Source - Last Ten Fiscal Years 117 Fund Balances of Governmental Funds - Last Ten Fiscal Years 118 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 119 Revenue capacity These schedules contain information to help the reader assess the City's most significant local revenue sources.

General Government Tax Revenues by Source - Last Ten Fiscal Years 120 Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years 121 Property Tax Rates - Direct and Overlapping Governments - Last Ten Fiscal Years 122 Principal Properly Tax Payers - Current Year and Nine Years Ago 123 Property Tax Levies and Collections - Last Ten Fiscal Years 124 Debt capacity These schedules contain Information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issued additional debt in the future.

Ratio of Outstanding Debt by Type - Last Ten Fiscal Years 125 Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years 126 Direct and Overlapping Government Activities Debt - As of June 30, 2013 127 Legal Debt Margin information - Last Ten Fiscal Years 129 Pledged-Revenue Coverage - Last Ten Fiscal Years 130 Demographic and economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

Demographic and Economic Statistics - Last Ten Fiscal Years 134 Principal Employers - Current and Nine Years Ago 135 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs.

Full-Time Equivalent City government Employees by Function / Program - Last Ten Fiscal Years 137 Operating Indicators by Function - Last Ten Fiscal Years 138 Capital Assets Statistics by Function - Last Ten Fiscal Years 140 City of Anaheim Map 142 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year.

113

CITY OF ANAHEIM Net Position by Component Last Ten Fiscal Years (In thousands)

(Accrual basis of accounting)

Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Governmental Activities Net investment in capital assets Restricted Unrestricted Total Governmental Activities Business-type Activities Net investment in capital assets Restricted Unrestricted Total Business-type Activities Total Government Net Investment in capital assets Restricted Unrestricted Total Government 894,625 196,853 30,341

$ 1,121,819 787,459 71,131 121,083 979,673 1,682,084 267,984 151,424

$ 2,101,492 831,430 190,868 16,760 1,039,058 780,093 61.235 112,159 953,487 1,611,523 252,103 128,919

$1,992,545 832,951 794,164 751,910 $

731,726 182,011 150,750 154,306 87,566 (124,422)

(121,2831 (92,773)

(70,621) 890,540 823,631 813,443 748,671 779,224 54,626 115,445 949,295 756,020 747,379 746,450 49,325 45.493 47,406 130,812 145,269 165,196 936,157 938,141 959,052 665,828 69,949 (12,765) 723,012 701,088 38,572 203,967 943,627 1,366,916 108,521 191,202

$ 1,666,639

$ 668,628 $ 613,300 $

584,875 99,443 87,505 111,344 (40,946)

(35,6521 (46,438) 727,125 665,153 649,781 656,377 693,240 668,663 36,008 28,855 26,187 215,685 229,051 242,888 908,070 951,146 937,738 1,325,005 1,306,540 1,253,538 135,451 116,360 137,531 174,739 193,399 196,450

$ 1,635,195 $ 1,616,299

$ 1,587,519 1,612,175 1,550,184 1,499,289 1,478,176 236,637 200,075 199,799 134,972 (8,977) 9,529 52.496 94,575

$ 1,839,835

$ 1,759,788

$ 1,751,584 $ 1,707,723 Note:

Certain reclassifications have been made to prior year data to conform to fiscal year 2013 presentation.

Source: Finance Department, City of Anaheim See accompanied independent auditors' report 114

CITY OF ANAHEIM Changes in Net Position Last Ten Fiscal Years (In thousands)

(Accrual basis of accounting)

Fiscal Year Program Revenues Governmental activities:

Charges for services General government Police Fire Community Development Planning Public Works Community Services Convention, Sports and Entertainment Total charges for services Operating grants and contributions Capitol grants and contributions Governmental activities program revenues 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 1,670 $

1,872 $

1,872 $

1,708 $

1,890 $

2,088 $

1,238 $

1,385 $

1,442 $

1,413 9,859 10,122 10,435 10,127 10,089 10,235 9,715 10,477 9,840 7,460 9,912 9,431 9,518 9,369 9,122 9,850 9,070 8,942 7,909 6,879 9,151 7,281 8,143 7,306 5,459 6,212 6,713 6,122 4,667 9,972 6,404 5,327 6,263 6,453 7,724 9,084 10,778 9,031 6,994 3,739 14,012 11,401 9,837 7,619 7,421 8,619 8,234 11,196 6,544 5,501 3,556 3,386 4,024 4,561 4,833 4,855 4,043 18,421 4,985 4,490 9,574 9,142 4,356 202 200 218 200 200 200 200 64,138 57,962 54,448 47,345 46,738 51,161 49,991 65,774 42,581 39,654 112,507 108,620 124,358 121.731 110,200 100,393 98,699 88,076 78,846 82,727 71,472 44,184 70,080 31,828 66,347 30,361 42,997 28,804 20,906 11,704 248,117 210,766 248,886 200,904 223,285 181,915 191,687 182,654 142,333 134,085 Business-type activities:

Charges for services Electric Utility 451,958 397,931 381,496 377,387 365,526 351.160 310,074 322,845 284,740 291,723 Water Utility 60,785 57,748 55,598 56,368 50,807 49,125 49.600 46,926 43,427 44,395 Sanitation Utility 57,230 56,630 56,359 56.023 55,424 54,017 53,215 49,397 46,480 48,085 Golf Courses 4,759 4,802 4,711 5,168 5,634 5,947 6,022 5,736 5,394 5,546 Convention, Sports and Entertainment 29,656 29,389 27,981 30,797 26,987 31,197 32.308 27,357 27,412 28,146 Total charges for services 604,388 546,500 526,145 525,743 504,378 491,446 451,219 452,261 407,453 417,895 Operating grants and contributions 952 1,101 746 1,990 965 1,194 1,160 2,556 2,473 1,471 Capital grants and contributions 6,698 8,954 12,667 5,622 6,620 12,332 4,808 5,749 11,513 7,468 Business-type activities program revenues 612,038 556,555 539,558 533,355 511,963 504,972 457,187 460,566 421,439 426,834 Total government program revenues 860,155 767,321 788,444 734,259 735,248 686,887 648,874 643,220 563,772 560.9 19 Expenses Governmental activities:

General government Police Fire Community Development Planning Public Works Community Services Public Utilities Convention, Sports and Entertainment Interest on long-term debt Governmental Activities Expenses 13,275 11,617 10,911 10,917 12,144 12,610 10,951 7,394 8,943 7,582 124,556 117,840 119,504 125,121 121,162 122,883 115,714 98,484 91,713 77,541 58,508 58,027 56,393 58,229 57,768 56,434 50,727 50,957 46,596 37,610 82,769 95,683 105,937 117,621 109,523 105,651 93,089 87,814 83,183 86,542 16,917 15,648 15,627 16,822 17,057 17,199 16,107 14,493 13,206 12,628 44,740 41,228 44,109 39,017 47,226 43,680 44,473 42,029 39,463 41,672 28,925 28,282 30,958 35,372 37,704 39,033 36,827 31,712 28,314 27,050 2,405 2,315 2,218 1,952 1,515 2,128 1,800 1,704 1,557 1,566 13,935 13,584 13,633 9,931 10,069 10,781 10,539 8,652 7,703 7,536 35,880 42,824 47,985 47,610 47,779 45,502 51,639 46,430 47,105 48,503 421,910 427,048 447,275 462,592 461,947 455,901 431,866 389,669 367,783 348,230 See accompanied independent auditors' report15 115

CITY OF ANAHEIM Changes in Net Position Last Ten Fiscal Years (In thousands)

(Accrual basis of accounting) (continued)

Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Expenses Business-type Activities:

Electric Utility 417,008 Water Utility 57,056 Sanitation 52,813 Golf Courses 4,473 Convention, Sports and Entertainment Venues 45,001~Q Business-type activities expense 576,351 Total government expenses 998,261 386,358 58,319 55,939 4,114 45,278 550,008 977,056 (216,282) 6,547 (209,735) 372,129 56,608 49,845 4,256 527,500 974,775 (198,389) 12,058 (186,331) 375,173 55,478 50,521 4,436 531,562 994,154 359,320 49,309 52,702 4,495 511,313 973,260 353,204 49,219 49,693 4,810 505,218 961,119 339,928 51,638 49,338 4,365 46.6 10 491,879 923,745 365,432 47,187 47,163 4,433 47,83 901,717 274,423 41,469 45,467 4,062 47,~220 412,641 780,424 (225,450) 8,798 (216,652) 281,902 42,945 41,431 4,278 762,088 (214,145) 12,976 (201,169)

Net (Expense)/ Revenue Governmental activities Business-type activities Total government, net (expense) revenue (173,793) 35,687 (138,106)

(261,688)

(238,662)

(273,986) 1,793 650 (246)

(259,895)

(238,012)

(274,232)

(240,179)

(207,015)

(34,692)

(51,482)

(274,871)

(258,497)

General Revenues and Other Changes In Net Position Governmental activities:

Taxes:

Property taxes 64,3 11 58,896 Property tax Increments 28,678 Sales tax and use tax 65,445 59,654 Transient occupancy taxes 102,936 90,376 Motor vehicle license fees 331 Other taxes 7,756 7,272 Unrestricted Investment earnings 1,094 3,598 Other 1,857 873 Transfers 12,824 12,571 Extraordinary gain 102,882 Governmental activities 256,554 364,800 59,053 47,040 54,711 82,605 1,783 7,288 3,667 614 8,537 59,689 47,731 51,214 77,139 1,026 7,288 7,012 1,175 19,602 60,806 47,115 56,035 80,055 1,180 8,041 8,667 394 41,141 59,592 45,719 62,510 87,183 1,532 9,529 15,337 2,670 15,573 57,937 40,710 64,878 83,914 1,866 10,337 17,597 1,701 (42,874) 49,415 37,341 66,972 75,979 2,595 10,817 12,346 5,078 8,444 43,636 34,984 60,803 67,141 2,113 10,175 8,071 1,499 12,400 25,589 31,650 55,716 63,268 21,143 9,561 3,991 1,097 11,534 265.2-98

-271,876

-303,434 299.q6-45 2_3_6,066 268,987 2-40,822 223,549 Business-type activities:

Unrestricted investment earnings Other Transfers Business-type activities Total government Change In Net Position Governmental activities Business-type activities Total government change in net position 3,323 10,216 9,617 15,825 19,580 31,244 27,375 16,850 16,592 418

( 12,824)

(12,571)

(8,537)

(19,602 (41,141)

(15,573 42,874 (8,444)

(12,400 (9,501 (235 1,080 (3,777)

(21,51) 15,671 70,249 8,406 4,610 247,053 362,445 266,378 268,099 281,873 315,316 306,315 277,393 245,432 6,120 1,723 (11,534)

(3,691) 219,858 82,761 26,186 148,518 4,192 66,909 13,138 10,188 64,772 25,659 (4,113) 61,972 15,372 9,404 (1,984 (20,911) 15,425 35,557 (43,076) 13,408 9,285 8,204 $

4.3,86I1$

41,084 1 31,444 28,780 $

18,689 Note: Certain reclassifications have been made to prior fiscal years' data to conform to the fiscal year 2013 presentation.

Source: Finance Department, City of Anaheim See accompanied independent auditors' report16 116

CITY OF ANAHEIM Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (In thousands)

(Accrual basis of accounting)

Amounts Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Property Taxes 64,311 58,896 59,053 59,689 60,806 59,592 57,937 49,415 43,636 25.589 Property Tax Increments 28,6782 47,040 47,731 47,115 45,719 40,710 37,341 34,984 31,650 Sales and Use Taxes 65,445 59,654 54,711 51,214 56,035 62,510 64,878 66,972 60,803 55,716 Transient Occupancy Taxes 102,936 90,376 82,605 77,139 80,055 87,183 83,914 75,979 67,141 63,268 Motor Vehicle License Fees' 331 3

1,783 1,026 1,180 1,532 1,866 2,595 2,113 21,143 Other Taxes 7,756 7,272 7,288 7,288 8,041 9,529 10,337 10,817 10,175 9,561 Total 240,779 244,876 252,480 244,087 253,232 266,065 259,642 243,119 218,852 206,927

'The decrease in motor vehicle license fees starting from fiscal year 2005 is due to the shifting of revenue from motor vehicle license fees category to the property tax category.

This was part of the State of California 2004 Budget Act.

2 The decrease in Property tax increments from fiscal year 2012 was due to the dissolution of Redevelopment Agency on February 1, 2012.

3 Motor Vehicle License Fees allocation was eliminated per the fiscal year 2012 State Budget.

Note: Certain reclassifications have been made to prior fiscal years' data to conform to the fiscal year 2011 presentation.

Source: Finance Department, City of Anaheim See accompanied independenl auditors' report 117

CITY OF ANAHEIM Fund Balances of Governmental Funds Last Ten Fiscal Years (In thousands)

(Modified accrual basis of accounting)

Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 General Fund Nonspendable 2,531 3,082 3,626 Restricted 1,766 982 582 Committed 788 Assigned 6,879 320 141 Unassigned 26,920 22,636 22,139 Reserved 4,092 4,530 5,001 8,525 9,701 9,892 10,225 Unreserved - designated 293 Unreserved - undesignated 29,490 47,729 37,347 47,409 44,978 39,179 34,458 Total General fund 38,884 27,020 26,488 33,582 52,259 42,348 55,934 54,679 49,071 44,976 Housing Authority Fund Nonspendable 38 42 Restricted 32,234 29,935 7,778 Assigned 11,823 11,237 9,922 Unassigned Reserved 1,373 1,830 830 162 Unreserved - undesignated 11,603 5,669 6,474 7,935 3,932 5,682 5,525 Total Housing Authority Fund 44,095 41,172 17,742 12,976 7,499 7,304 8,097 3,932 5,682 5,525 Nonmajor Governmental Funds Nonspendable 4,619 1

631 Restricted 164,870 158,933 241,674 Assigned 8,055 7,400 7,761 Unassigned (11,231)

(32,448)

(34,293)

Reserved 130,313 142,760 138,402 120,885 110,289 76,568 91,787 Unreseirved - designated, reported in:

Special revenue funds 7,349 7,211 6,809 2,415 9,102 14,974 7,993 Debt service funds 156 4,433 1,656 2,276 1,137 1,457 Capital projects funds 31,899 41,544 32,809 38,430 45,495 36,497 24,538 Unreserved - undesignated, reported in:

Special revenue funds 14,350 5,342 4,199 4,183 14,902 25,955 27,016 Capital projects funds (3,376)

(7,037)

(15,551)

(25,687)

(22,787)

(4,735)

Total nonmajor governmental funds 166,313 133,886 215,773 180,691 194,253 168,324 142,502 158,138 150,716 151,334 Total governmental funds'

$ 249,292

$ 202,078

$ 260,003

$ 227,249

$ 254,011

$ 217,976

$ 206,533

$ 216,749

$ 205,469

$ 201,835

'The City implemented Governmental Accounting Standards Board Statement No 54 (GASB 54) for the Fiscal Year Ended June 30, 2011. Fund Balance Classifications prior to the implementation of GASB 54 is not available.

Source: Finance Department, City of Anaheim See accompanied independent auditors' report 118

CITY OF ANAHEIM Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (In thousands)

(Modified accrual basis of accounting)

Fiscal Year Revenues Property taxes Property tax increments Sales and use taxes Transient occupancy taxes Other taxes Licenses, fees, and permits Intergovernmental revenues Charges for services Fines, forfeits, and penalties Use of money and property Other Total revenues Expenditures General government Police Fire Community Development Planning Public Works Community Services Public Utilities Convention, Sports and Entertainment Capital outlay Debt service:

Principal Interest charges Debt issuance costs Total expenditures Revenues over (under) expenditures Other Financing Sources (Uses)

Transfers in Transfers out Issuance of refunding bonds Payments to refunded bond escrow agent Premium on long term debt Discount on long term debt Issuance of long-term debt Capital leases Claims settlement proceeds Special items Extraordinary loss Total other financing sources Net change in fund balances 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 64,311 58,896 59,053 $

59,689 $

60,806 $

59,592 $

57,937 $

49,415 43,636 $

25,589 28,678 47,040 47,731 47,115 45,719 40,710 37,341 34,984 31,650 62,793 58,589 55,034 48,210 56,493 64,296 65,695 64,993 59,000 54,559 102,936 90,376 82,605 77,139 80,055 87,183 83,914 75,979 67,141 63,268 7,078 6,401 6,486 6,303 6,451 6,753 7,531 7,862 7,542 7,095 22,305 17,067 18,772 21,580 21,062 24,705 37,991 40,625 18,749 15,578 186,018 143,348 150,394 141,418 158,729 135,072 112,593 104,705 102,423 109,523 30,883 29,672 24,408 18,351 17,874 17,730 16,799 16,216 15,459 18,565 2,907 3,515 3,304 3,255 3,409 3,767 3,689 3,464 3,454 2,812 8,058 7,657 10,159 10,236 9,293 16,923 18,208 13,223 9,144 8,408 8,926 6,617 43,645 4,009 10,137 3,755 7,601 18,164 6,143 3,490 496,215 450,816 500,900 437,921 471,424 465,495 452,668 431,987 367,675 340,537 18,270 16,502 16,055 15,822 16,953 16,325 15,354 13,667 12,276 11,370 117,702 112,656 114,678 115,379 112,057 115,195 109,467 94,602 86,529 74,356 56,127 55,886 55,802 55,713 55,966 54,685 48,201 48,383 44,182 36,277 86,282 95,352 110,138 126,590 112,406 104,991 94,789 89,098 83,384 87,778 15,785 14,408 14,560 15,173 15,489 15,949 14,762 13,907 12,313 11,904 25,387 22,861 27,087 19,957 29,321 25,810 26,820 24,646 22,248 25,224 25,268 24,618 27,813 31,311 33,572 35,203 32,788 28,753 25,724 25,203 2,398 2,313 2,220 1,939 1,507 2,120 1,791 1,704 1,557 1,566 10,002 9,725 9,917 6,369 6,699 7,390 7,399 6,131 5,140 5,353 98,601 55,505 70,918 62,422 52,229 60,906 76,161 77,738 41,301 32,195 18,948 16,294 12,219 12,777 16,085 27,472 18,065 19,032 10,134 9,391 19,808 26,927 33,032 33,509 34,830 28,324 41,187 39,037 38,681 38,630 227 70 5,182 4,017 4958 4

494,666 496,961 487,184 499,552 490,801 456,698 383,469 359,247 1,637 (2,231) 6,234 (59,040)

(15,760)

(34,057)

(38,133)

(24,711)

(15,794)

(18,710) 73,470 131,093 99,571 83,498 121,987 299,410 101,249 95,535 99,166 73,939 (59,393)

(119,552)

(86,621)

(59,970)

(76,304)

(288,985)

(91,028)

(84,325)

(88,277)

(62,970) 5,084 201,680 253,134 (5,683)

(171,222)

(255,325) 94 4,641 (199) 31,500 13,570 8,000 2,769 175 18,238 22,583 7,289 7,775 1,649 2,198 750 3,848 1,250 (67,235) 45,577 (55,694) 26,520 32,278 51,795 45,500 27,917 35,991 19,428 18,744 47,214 $

(57,925) $

32,754 $

(26,762) $

36,035 $

11,443 $

(10,216) $

11,280 $

3,634 $

34 ditures 9.79%

10.87%

10.68%

10.65%

11.71%

12.72%

14.29%

15.32%

14.27%

14.68%

Debt service as a percentage of non-capital expen Source: Finance Department, City of Anaheim 119 See accompanied independent auditors' report

CITY OF ANAHEIM General Governmental Tax Revenues By Source Last Ten Fiscal Years (In thousands)

(Modified accrual basis of accounting)

Amounts In Dollars Property Taxes Property Taxes Increments Secured Fiscal Property Year Taxes Unsecured Property Taxes Supple-mental Property Taxes Secured Anaheim Property Residual Taxes 2,834 Supple-Unsecured mental Property Property Property Taxes In-lieu Taxes Taxes of VLF I 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 33,114 31,770 31,848 32,267 32,496 31,073 29,919 26,537 24,820 23,399 1,194 1,289 1,300 1,341 1,351 1,343 1,384 1,171 1,173 1,136 806 207 373 385 712 1,326 1,551 1,887 1,824 1,054 21,576 2 36,824 38,809 37,710 34,772 29,090 27,067 25,380 23,124 6,884 2 8,859 8,221 7,986 9,105 8,591 7,954 7,802 7,455 218 2 1,357 701 1,419 1,842 3,029 2,320 1,802 1,071 26,363 25,630 25,532 25,696 26,247 25,850 25,083 19,820 15,819 Sales and Use Taxes 62,793 58,589 55,034 48,210 56,493 64,296 65,695 64,993 59,000 54,559 Transient Occupancy Taxes 102,936 90,376 82,605 77,139 80,055 87,183 83,914 75,979 67,141 63,268 Other Taxes 7,078 6,401 6,486 6,303 6,451 6,753 7,531 7,862 7,542 7,095 Total

$ 237,118 242,940 250,218 239,072 250,920 263,543 255,787 235,590 212,303 182,161 1 Collection of property taxes in-lieu of VLF starting in fiscal year 2005 is due to the shifting of revenue from motor vehicle license fees category to the property tax category.

This was part of the State of California 2004 Budget Act.

Decrease in property tax increments revenues in fiscal year 2012 was due to dissolution of the Redevelopment Agency on February 1, 2012. Property tax increments were received up to January 31, 2012.

Note: Certain reclassifications have been made to prior fiscal years' data to conform to the fiscal year 2011 presentation.

See accompanied independent auditors' report 120

CITY OF ANAHEIM Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (In thousands)

(Modified accrual basis of accounting)

Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 City of Anaheim Secured property

$29,608,967 $28,808,849 $28,600,152

$28,775,989 $29,329,062

$28,473,221

$26,507,229 $24,081,039 $22,288,504 $20,826,232 Unsecured property 1,265,519 1,232,825 1,278,062 1,283,263 1,226,209 1,198,812 2,442,959 1,117,310 1,162,358 1,287,967 Total City of Anaheim 30,874,486 30,041,674 29,878,214 30,059,252 30,555,271 29,672,033 28,950,188 25,198,349 23,450,862 22,114,199 Dissolved Anaheim Redevelopment Agency Secured property 4,338,935 3,977,843 3,751,227 3,762,168 3,644,931 3,360,645 2,838,528 2,574,542 2,332,303 2,177,936 Unsecured property 683,237 656,505 743,403 762,903 789,618 818,255 813,249 734,299 748,144 731,733 Total Anaheim Redevelopment Agency 5,022,172 4,634,348 4,494,630 4,525,071 4,434,549 4,178,900 3,651,777 3,308,841 3,080,447 2,909,669 Total Taxable Assessed Value

$35,896,658 $34,676,022 $34,372,844

$34,584,323 $34,989,820 $33,850,933 $32,601,965 $28,507,190 $26,531,309 $25,023,868 tolal Dlrect Tax Rate 0.11078%

0.11075%

0.11075%

0.11031%

0.11024%

0.11041%

0.11041%

0.11083%

0.11117%

0.11161%

Note: In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed, Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new owner, At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Source: Auditor-Controller, California Municipal Statistics, Inc, County of Orange, HdL Coren & Con See accompanied independent auditors' report 121

CITY OF ANAHEIM Property Tax Rates Direct and Overlapping Governments Last Ten Fiscal Years (Rate per $100 assessed value)

Fiscal Year City Direct Rate (1)

City Basic Rate (2)

Anaheim General Obligation Band Fund Overlapping Rates:

Anaheim Elementary General Fund Anaheim High General Fund Educational Revenue Augmentation Fund North Orange Co. Community College General Fund Orange County Cemetery District Orange County Department Of Education Orange County Flood Control District General Orange County General Fund Orange County Harbors Beaches & Parks CSA Orange County Sanitation District #2 Operating Orange County Transportation Authority Orange County Vector Control Orange County Water District Orange County Water District Water Reserve Anaheim Elementary School Districts Anaheim High School Districts North Orange County Community College Water District Rate Total Direct and Overlapping Rate 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 0.10851 0.10851 0.10851 0.10816 0.10816 0.10816 0,10816 0,10816 0.10816 0.10816 0.00227 0.00224 0.00224 0.00215 0.00208 0.00225 0.00225 0.00267 0.00301 0.00345 0.11078 0.11075 0.11075 0.11031 0.11024 0.11041 0.11041 0.11083 0.11117 0.11161 0.29873 0.29873 0.29873 0.29778 0.29778 0.29778 0.29778 0.29778 0.29778 0.29778 0.19043 0.19043 0.19043 0.18982 0.18982 0.18982 0.18982 0.18982 0.18982 0.18982 0.15592 0.15592 0.15592 0.15543 0.15543 0.15543 0.15543 0.15543 0.15543 0.15543 0.07755 0.07755 0.07755 0.07730 0.07730 0.07730 0.07730 0.07730 0.07730 0.07730 0.00057 0.00057 0.00057 0.00057 0.00057 0.00057 0.00057 0.00057 0.00057 0.00057 0.01579 0.01579 0.01579 0.01574 0.01574 0.01574 0.01574 0.01574 0.01574 0.01574 0.02197 0.02197 0.02197 0.02190 0.02190 0.02190 0.02190 0.02190 0.02190 0.02190 0.06849 0.06849 0.06849 0.06827 0.06827 0.06827 0.06827 0.06827 0.06827 0.06827 0.01698 0.01698 0.01698 0.01693 0.01693 0.01693 0.01693 0.01693 0.01693 0.01693 0.03227 0.03227 0.03227 0.03469 0.03469 0.03469 0.03469 0.03469 0.03469 0.03469 0.00312 0.00312 0.00312 0.00311 0.00311 0.00311 0.00311 0.00311 0.00311 0.00311 0.00124 0.00124 0.00124 0.00124 0.00124 0.00124 0.00124 0.00124 0.00124 0.00124 0.00831 0.00831 0.00831 0.00893 0.00893 0.00893 0.00893 0.00893 0.00893 0.00893 0,00012 0.00012 0.00012 0.00013 0.00013 0.00013 0.00013 0.00013 0.00013 0.00013 0.05382 0.0537 1 0.03363 0.03193 0.02248 0.03544 0.02240 0.02811 0.0264 1 0.02495 0.02858 0.02678 0.02745 0.02617 0.02363 0.02516 0.02355 0.02444 0.02770 0.02370 0.01902 0.01742 0.01758 0.01662 0.01493 0.01502 0.01444 0.00520 0.00580 0.00610 0.00350 0.00370 0.00370 0.00430 0.00430 0.00450 0.00470 0.01666 0.01441 0.01597 1.10719 1.10385 1.08460 1.08117 1.06742 1.08237 1.06734 1.07708 1.07733 1.07417 (1) Excludes rates associated with mello-roos districts.

(2) In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1% fixed amount. This 1% is shared by all taxing agencies for which the subject property re-sides. In 1986, the State Constitution was amended to allow rates over the 1 % base rate for voter approved general obligation debt. Valuations of real property are frozen at the value of the property in 1975, with an allowable adjustment up to 2% per year for inflation. However, property is assessed to its current value when a change of ownership occurs.

New construction, including tenant improvements, is assessed at its current value.

Source: Auditor Controller, Orange County See accompanied independent auditors' report12 122

CITY OF ANAHEIM Principal Property Tax Payers (In thousands)

Current Year and Nine Years Ago 2013 2004 Rank Tax Payer Walt Disney World Company Irvine Company LLC Makar Anaheim LLC Reef America REIT II Kilroy Realty LP La Palma/Miller Owner LLC PPC Anaheim Apartments Angeli LLC Lennar Platinum Triangle BRE Properties Inc.

Worldmark Club Boeing North America Allstate Life Insurance Company Joan MTR Schlund Atrium Plaza LLC Fairfield Resorts, Inc.

OTR Stadium Gateway LLC 1

2 3

4 5

6 7

8 9

10 Percentage of Total Assessed Value 12.28%

0.45%

0.39%

0.33%

0.33%

0.29%

0.27%

0.26%

0.22%

0.22%

Taxable Assessed Value 4,170,132 152,654 133,282 133,127 111,419 98,611 92,491 86,806 75,000 73,042 Percentage of Total Assessed Value Rank 14.20%

0.48%

5 0.33%

Taxable Assessed Value 3,140,270 106,456 72,327 127,443 109,100 70,994 65,308 57,872 65,401 55,968 2

3 6

8 9

7 10 0.58%

0.49%

0.32%

0.30%

0.26%

0.30%

0.25%

Total 15.10%

$5,126,564 16.83%

$3,871,139 Source: Finance Department, City of Anaheim, California Municipal Statistics, Inc.

See accompanied independent auditors' report 123

CITY OF ANAHEIM Property Tax Levies and Collections Last Ten Fiscal Years (In thousands)

Collected within the Fiscal Collected within the Fiscal Year of the Levy Total Collections to Date Year of the Levy Total Collections to Date Collections Collections Total in Total Tax In Fiscal Taxes Percentage Subsequent Percentage Increments Percentage Subsequent Percentage Year Levy Amount 1 ot Levy years Amount of Levy Levy 2 Amount 2 of Levy years Amount of Levy 2013 34,813 $

34,116 98.00% $

236 $

34,352 98.68%

2012 33,598 32,560 96.91%

512 33,072 98.43% $

49,004 $

28,327 57.81%

28,327 57.81%

2011 33,512 32,517 97.03%

558 33,075 98.70%

49,294 45,906 93.13%

282 46,188 93.70%

2010 33,627 32,490 96.62%

796 33,286 98.99%

49,119 46,584 94.84%

524 47,108 95.91%

2009 34,579 33,068 95.63%

1,231 34,299 99.19%

48,432 46,057 95.10%

622 46,679 96.38%

2008 34,283 32,798 95.67%

1,237 34,035 99.28%

46,785 44,793 95.74%

552 45,345 96.92%

2007 33,897 32,324 95.36%

789 33,113 97.69%

42,472 39,807 93.73%

549 40,356 95.02%

2006 30,123 29,187 96.89%

446 29,633 98.37%

38,278 36,692 95.86%

669 37,361 97.60%

2005 28,106 27,452 97.67%

341 27,793 98.89%

35,284 33,819 95.85%

321 34,140 96.76%

2004 25,780 25,118 97.43%

302 25,420 98.60%

32,794 31,026 94.61%

738 31,764 96.86%

Excludes property taxes in-lieu of vehicle license fees 2 Decrease in property tax collection is due to the dissolution of the Redevelopment Agency on February 1, 2012. Property tax increments were received up to January 31, 2012.

Note: Certain reclassifications have been made to prior fiscal years' data to conform to the fiscal year 2012 presentation.

Source: Auditor-Controller, County of Orange See accompanied independent auditors' report 124

CITY OF ANAHEIM Ratios of Outstanding Debt by Type Last Ten Fiscal Years (In thousands, except per capita amount)

Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Governmental Activities Bonds 616,086 Certificates of participation 10,020 Notes and loans 54,877 Capital leases 1,369 Total governmental activities 682,352 Business-Type Activities Bonds 863,987 Certificates of participation 38,000 Notes and loans 18,722 Revolving line of credit 46,600 Capital leases Total business-type activities 967,309 Total Government 1,649,661 Percentage of Personal Income 20.74%

Per Capita 4,766 616,444 $

821,587 $

810,504 11,085 12,070 12,990 25,546 34,566 29,094 1,694 2,341 2,605 654,769 870,564 855,193 889,581 908,683 805.925 38,000 38,000 38,000 24,488 30,519 11,379 952,069 977,202 855,304 1,606,838 $

1,847,766 $

1,710,497 20.95%

24.57%

23.32%

4,674 $

5,418 $

5,088 805,068 13,840 24,621 1,235 844,764 829,707 38,000 12,299 880,006 1,724,770 23.96%

5,193 793,343 $

740,107 $

740,959 23,333 26,788 30,066 27,538 57,614 43,342 2,353 2,484 2,220 846,567 826,993 816,587 689,791 706,126 513,874 88,185 96,475 125,087 13,189 14,081 14,976 267 275 791,165 816,949 654,212 1,637,732 $

1,643,942 $

1,470,799 21.93%

22.17%

20.01%

4,953 $

4,985 4,465 739,775 33,174 28,669 1,523 803,141 528,130 132,952 15,842 180 677,104 1,480,245 21.48%

4,466 737,538 36,107 22,747 2,001 798,393 543,780 140,355 16,678 349 701,162 1,499,555 21.60%

4,507 Note:

Per capita amounts are estimates Certain reclassifications have been made to prior year data to conform to fiscal year 2013 presentation.

Sources: California State Department of Finance and Finance Department, City of Anaheim US Census Yearly American Community Survey See accompanied independent auditors' report 125

CITY OF ANAHEIM Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years (In thousands, except per capita amount)

Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Bonds General Obligation Lease Revenue Tax Allocation Less amounts available in debt service fund Total net obligation bonds outstanding Percentage of Assessed Value of Property Per capita 2,605 3,185 613,481 616,444 616,086 619,629 61,625 53,398

$55s4,461

$ 566,231 1.54%

1.63%

1,602 1,647 3,735 609,683 208,169 821,587 67,363 2.19%

2,212 4,255 605,252 200,997 810,504 69,043 2.14%

2,205 4,750 600,064 200,254 805,068 63,560 2.12%

2,233 5,220 588,692 199,431 793,343 57,995 2.17%

2,224 5,700 582,272 152,135 740,107 39,075

$701,032 2.15%

2,126 6,170 575,125 159,664 740,959 39,232

$701,727 2.46%

2,130 6,625 569,016 164,134 739,775 30,812

$ 708,963 2.67%

2,139 7,060 562,118 168,360 737,538 44,132

$ 693,406 2.77%

2,084 Note: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements Certain reclassifications have been made to prior year data to conform to fiscal year 2013 presentation.

Source: Finance Department, City of Anaheim See accompanied independent auditors' report 126

CITY OF ANAHEIM Direct and Overlapping Governmental Activities Debt As of June 30, 2013 (In thousands) 2012-13 Assessed Valuation 35,896,658 DIRECT TAX AND ASSESSMENT DEBT:

City of Anaheim DIRECT GENERAL FUND DEBT:

City of Anaheim General Fund Obligations TOTAL GROSS DIRECT DEBT Less: City of Anaheim Public Financing Authority (100% self-supporting)

City of Anaheim various revenue funds (100% self-supporting)

TOTAL NET DIRECT DEBT OVERLAPPING TAX AND ASSESSMENT DEBT:

Metropolitan Water District North Orange Joint Community College District Rancho Santiago Community College District Anaheim Union High School District Fullerton Joint Union High School District Garden Grove Unified School District Placentia - Yorba Linda Unified School District Anaheim School District Magnolia School District Other School Districts City of Anaheim Community Facilities Districts Orange Unified School District Community Facilities Districts TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT OVERLAPPING GENERAL FUND DEBT:

Orange County General Fund Obligations Orange County Pension Obligations Orange County Board of Education Certificates of Participation Municipal Water District of Orange County Certificate of Participation North Orange County Regional Occupation Program Certificates of Participation Orange Unified School District Certificates of Participation Orange Unified School District Benefit Obligations Placentia-Yorba Linda Unified School District Certificates of Participation Anaheim Union High School District Certificates of Participation Fullerton Joint Union High School District Certificates of Participation Fullerton School District Certificates of Participation TOTAL GROSS OVERLAPPING GENERAL FUND OBLIGATION DEBT Total Debt 6/30/2013 165,085 213,394 293,247 105,184 52,313 127,000 263,062 152,711 18,003 103,016 39,645 8,855 1,541,515 190,546 306,287 15,770 10,035 10,920 35,574 88,265 107,936 36,848 22,255 6,470 830,906 224,405

% Applicable (1) 1.707 28.614 12.851 67.928 0.254 0.610 22.012 99.153 66.021 Various 100.000 9.786-100 Outstanding

$2,605 679,747 682,352 613,481 56,246 12,625 City's Share of Debt 6/30/2013 2,818 61,061 37,685 71,449 133 775 57,905 151,417 11,886 21,517 39,645 3,095 459,386 8.390 8.390 8,390 0.001 29.412 26.478 26.478 22.012 67.928 0.254 0.176 15,987 25,698 1,323 3,212 9,419 23,371 23,759 25,030 57 11 127,867 207,794 795,047 795,047 1,477,399 (2) 807,672 127 OVERLAPPING TAX INCREMENT DEBT:

TOTAL GROSS OVERLAPPING DEBT TOTAL NET OVERLAPPING DEBT GROSS COMBINED TOTAL DEBT NET COMBINED TOTAL DEBT 0.086-100%

See accompanied independent auditors' report

CITY OF ANAHEIM Direct and Overlapping Governmental Activities Debt As of June 30, 2013 (In thousands) (continued)

Percentage of overlapping agency's assessed valuation located within boundaries of the city.

2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and tax allocation bonds and non-bonded capital lease obligations.

Ratios to 2012-13 Assessed Valuation:

Direct Debt ($2,605) 0.01%

Total Direct and Overlapping Tax and Assessment Debt 1.29%

Ratios to Adiusted Assessed Valuation:

Gross Combined Direct Debt ($682,352) 1.90%

Net Combined Direct Debt ($12,625) 0.04%

Gross Combined Total Debt 4.12%

Net Combined Total Debt 2.25%

Ratios to Redevelooment Increment Valuation (155022.1721 Total Overlapping Tax Increment Debt 4.14%

Source: California Municipal Statistics, Inc.

Note:

Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the government's ability to issue and re-pay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.

See accompanied independent auditors' report 128

CITY OF ANAHEIM Legal Debt Margin Last Ten Fiscal Years (In thousands)

Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004

$ 4,441,345 $ 4,321,327 $ 4,290,023 $ 4,316,398 $ 4,399,359 $ 4,270,983 $ 3,976,084

$ 3,612,156 $ 3,343,276 $ 3,123,935 (2,605)

(3,185)

(3,735)

(4,255)

(4,750)

(5.220)

(5,700)

(6,170)

(6,625)

(7,060)

$ 4,438,740 $ 4,318,142 $ 4,286,288 $ 4,312,143 $ 4,394,609 $ 4,265,763 $ 3,970,384 $ 3,605,986 $ 3,336.651

$ 3,116,875 Debt limit Total net debt applicable to limit Legal debt margin Total net debt applicable to the limit as a percentage of debt limit 0.06%

0.07%

0.09%

0.10%

0.11%

0.12%

0.14%

0.17%

0.20%

0.23%

Leaal Debt Marain Assessed value

$29,608,967

$28,808,849

$28,600,152

$28,775,989

$29,329,062

$28,473,221

$26,507,227

$24,081,039 $22,288,504

$20,826,232 4,441,345 4,321,327 4,290,023 4,316,398 4,399,359 4,270,983 3,976,084 3,612,156 3,343,276 3,123,935 Debt limit (15% of total assessed value)

Note:

Under State Finance Law, the City's outstanding general obligation debt should not exceed 15 percent of total assessed property value.

subject to the limitation may be offset by amounts set aside for repaying general obligation bonds.

By law, the general obligation debt Source: Finance Department, City of Anaheim See accompanied independent auditors' report 129

CITY OF ANAHEIM Pledge-Revenue Coverage Last Ten Fiscal Years (in thousands)

Fiscal Year 2011 2010 2009 2008 2007 2006 2005 2004 Tax Increment Revenue 45,940 46,652 46,101 45,719 40,710 37,341 34,984 31,650 Less Operating Expenses 1 8,848 21,409 5,300 4,722 2,729 5,196 5,361 3,321 Redevelopment - Tax Allocation Revenue Bonds 2 Net Available Revenue Principal 37,092 25,243 40,801 40,997 37,981 32,145 29,623 28,329 55 6,000 3,983 2,977 3,014 4,620 Debt Service Interest 10,862 10,766 10,766 6,275 13,417 11,727 11,700 9,996 Total 10,917 10,766 10,766 12,275 17,400 14,704 14,714 14,616 Coverage 3.3976 2.3447 3.7898 3.3399 2.1828 2.1861 2.0133 1.9382 Operating expenses consist of SERAF contributions and pass through agreements 2 The Redevelopment Agency dissolved on February 1, 2012 Note: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.

Source: Finance Department, City of Anaheim See accompanied independent auditors' report 130

CITY OF ANAHEIM Pledge-Revenue Coverage Last Ten Fiscal Years (In thousands) (continued)

Electric Utility Revenue Bonds Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Electric Revenue 453,949 407,787 391,218 390,364 378,916 373,842 330,421 336,091 297,443 295,988 Less Operating Expenses 3 344,766 314,231 309,274 309,112 300,269 299,534 265,340 268,274 218,562 232,050 Net Available Revenue 109,183 93,556 81,944 81,252 78,647 74,308 65,081 67,817 78,881 63,938 Principal 18,995 18,175 17,825 15,995 15,370 14,690 13,765 13,145 15,875 14,840 Debt Service Interest 33,335 34,104 30,825 31,788 28,798 29,450 24.424 25,132 24,780 20,102 Total 52,330 52,279 48,650 47,783 44,168 44,140 38,189 38,277 40,655 34,942 Coverage 2.0864 1.7896 1.6844 1.7004 1.7806 1.6835 1.7042 1.7717 1.9403 1.8298 I Operating expenses excludes amortization and depreciation.

See accompanied independent auditors' report 131

CITY OF ANAHEIM Pledge-Revenue Coverage Last Ten Fiscal Years (In thousands) (continued)

Water Utility Revenue Bonds Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Water Revenue 61,849 59,330 56,935 57,787 53,039 51,052 51,595 47,904 44,484 44,659 Less Operating Expenses 4

43,982 44,615 45,293 45,231 40,123 41,190 43,203 39,110 33,312 35,602 Net Available Revenue 17,867 14.715 11,642 12,556 12,916 9,862 8,392 8,794 11,172 9,057 Principal 950 915 880 1,490 1,435 1,375 1,325 1,870 1,340 1,625 Debt Service Interest 4,255 4,292 3,275 2,544 1,967 325 379 450 485 819 Total 5,205 5,207 4,155 4,034 3,402 1,700 1,704 2,320 1,825 2,444 Coverage 3.4327 2.8260 2.8019 3.1125 3.7966 5.8012 4.9249 3.7905 6.1216 3.7058 4 Operating expenses excludes amortization and depreciation.

Note: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.

Source: Finance Department, City of Anaheim See accompanied independent auditors' report 132

CITY OF ANAHEIM Pledge-Revenue Coverage Last Ten Fiscal Years (In thousands) (continued)

Sanitation Revenue Bonds Fiscal Year 2013 2012 2011 2010 2009 2008 2007 Waste Water Revenues 12,106 11,933 11,813 11,773 10,913 10,299 10,113 Less Operating Expenses 6 5,477 4,832 4,030 5,452 5,176 5,167 6,734 Net Available Revenue 6,629 7,101 7,783 6,321 5,737 5,132 3,379 Principal 880 835 805 775 Sanitation Revenue Bonds Debt Service Interest 2,118 2,161 2,193 2,224 2,224 1,532 Total 2,998 2,996 2,998 2,999 2,224 1,532 Coverage 2.2111 2.3702 2.5961 2.1077 2.5796 3.3499 Amounts based on the notes to the basic financial statement, segment reporting

'Operating expenses excludes amortization and depreciation.

Note: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.

Source: Finance Department, City of Anaheim See accompanied independent auditors' report 133

CITY OF ANAHEIM Demographic and Economic Statistics Last Ten Fiscal Years Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Population (l) 346,161 343,793 341,034 336,208 332,120 330,659 329,780 329,373 331,458 332,727 Personal Income (thousands of dollars)

$ 7,954,181 7,669,678 7,519,459 7,333,705 7,198,701 7,467,272 7,416,752 7,351,605 6,892,338 6,943,347 Per Capita Personal Income 22,978 (21 22,309 22,049 21,813 21,675 22,583 22,490 22,320 20,794 20,868 Median Age (I]

32.4 32.4 32.4 32.4 32.4 32.4 32.4 32.4 32.4 32.4 Education Level In Years of Schooling 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 12.2 School Enrollment 64,463 67,760 67,884 68,331 68,890 68,663 69,296 70,793 71,314 71,637 Orange County Unemployment Rate 6.10%

7.90%

9.20%

9.50%

9.30%

5.30%

3.90%

3.70%

3.90%

3.60%

(1) Population and Median Age were updated to reflect Census 2010 counts.

(2) Per capita Income for FY 2013 is estimated. Data not readily available.

Sources: California State Department of Finance Anaheim City Superintendent of Schools State of California, Employment Development Department State Department of Commerce and Labor State Department of Education US Census Yearly American Community Survey See accompanied independent auditors' report 134

CITY OF ANAHEIM Principal Employers Current Year and Nine Years Ago Fiscal Year Fiscal Year 2013 2004 Percentage of Total City Employment Percentage of Total City Employment Employer Walt Disney Resort Kaiser Foundation Hospital Hilton Anaheim CashCall Inc. Mortgage Division AHMC Anaheim Regional Medical Center Republic Services Angels Baseball LP Anaheim Marriot Hotel L-3 Interstate Electronic Corp.

Northgate Gonzalez Markets West Anaheim Medical Center Boeing North America Opal Concepts Inc Alstyle Apparel Anaheim Memorial Medical Center Long Beach Mortgage Specialty Restaurant Corp.

Total Rank Employees Rank Employees 1

2 3

4 5

6 7

8 9

10 23,512 6,040 1,572 1,400 1,300 1,300 1,051 1,030 940 850 14.0%

3.6%

0,9%

0.8%

0.8%

0.8%

0.6%

0.6%

0.6%

0.5%

1 4

7 21,750 1,500 900 24,0%

1.7%

1.0%

10 2

3 5

6 8

9 700 0.8%

3,500 3.9%

2,000 2.2%

1,500 1.7%

1,185 1.3%

800 0.9%

700 0.8%

34,535 38.3%

38,995 23.2%

See accompanied independent auditors' report 135

(This page left blank intentionally) 136

CITY OF ANAHEIM Full-time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Fiscal Year Function/Program 2013 2012 2011 2010 2009 2008 -

2007 2006 2005 2004 City Council.

7 7

7 7

7 7

7 7

7 7

City Administration 20 21 21 24 24 24 22 19 18 17 City Attorney 30 30 30 35 35 35 35 32 32 32 City Clerk 7

6 6

7 7

7 7

7 7

7 Human Resources 38 36 36 40 40 40 40 38 37 37 Finance 32 34 35 40 41 42 42 42 42 44 City Treasurer 12 12 12 12 12 12 12 12 12 12 Police 536 530 554 610 610 604 591 582 570 568 Fire 262 275 277 289 289 290 290 288 285 285 Community Development 78 102 105 106 109 108 114 120 119 112 Planning 69 73 75 93 94 97 96 95 96 96 Public Works 234 235 252 252 252 252 249 247 245 245 Community Services 87 115 123 180 183 184 183 183 179 188 Public Utilities 352 355 377 377 377 367 354 337 335 331 Convention, Sports and Entertainment 83 91 91 91 91 88 88 86 86 86 Total 1,847 1,922 2,001 2,163 2,171 2,157 2,130 2,095 2,070 2,067 Source: City of Anaheim See accompanied independent auditors' report 137

CITY OF ANAHEIM Operating Indicators by Function Lost Ten Fiscal Years Fiscal Year Function /Proaram Police Department Number of calls for service Number of 911 calls received Number of Part I Crimes per 100,000 population Number of Arrest Number of Field Reports processed by Records Burec Number of traffic collisions Number of Hours of Volunteer service Fire Department Fire responses False alarm responses Mutual aid responses Medical responses Hazardous condition responses 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 186,461 189,751 195,587 185,934 191,037 196,241 203,832 173,669 173,669 174,906 182,856 179,313 165,698 140,529 129,998 125,174 134,938 103,586 92,710 89,723 3,326 3,057 2,886 2,857 2,764 2,899 3,042 3,042 3,250 3,598 11,617 11.494 13,345 17,650 15,951 16,212 14,135 u

39,066 33,050 35,807 35,256 37,999 40,232 43,000 54,401 62,842 64,382 4,414 4,044 4,046 4,027 4,251 4.626 4,461 4,837 5,055 4,808 23,470 25,309 20,335 18,038 16,201 16,820 15,654 902 1,424 2,860 24,735 207 923 1,390 2,744 23,061 201 Pubilc Works Centerline miles of arterial highway pavement improved Square feet of deteriorated pavement replaced Square feet of deteriorated pavement slurry sealed Number of traffic intersections maintained Number of traffic control hubs maintained Square feet of deteriorated sidewalk replaced Linear feet of damaged curb/gutter replaced Square feet of medians/parkways maintained Square feet of landscape maintained in the Anaheim Resort Square feet of hardscape maintained in the Anaheim Resort Number of vehicles maintained Number of vehicles per mechanic Square feet of interior space maintained Square feet of exterior space maintained3 Number ot facility square feet (interiorl per worker Number of construction projects Number of permit inspections 983 1,487 2,707 22,202 199 5.8 4,274,463 4,167,569 319 18 62,940 24,755 5,460,655 1,275 1,467 2,560 24,045 207 9.0 820,000 1,975,000 318 18 60,000 11,500 5,400,000 1,016 1,503 2,532 21,553 224 1,082 1,398 2,662 21,301 203 9.1 890,500 3,483,000 316 16 50,200 11,500 5,350,000 649 719 2,296 16,326 263 8.7 890,500 3,483,000 316 16 50,200 11,500 5,350.000 687 678 2,271 16,679 322 519 581 2,530 13,783 138 2.9 910,250 4,175,500 15 48,850 1,350 5.209.500 590 579 2,441 14,130 134 5.9 4,029.806 2,850,939 318 18 77,590 25,187 5,644,818 8.7 2,977,482 4,208,194 318 18 74,780 27,661 5,511.065 8.1 780,500 2,532,000 318 17 50,500 12,500 5,350,000 3.5 920,500 3,522,000 308 15 46,500 11,500 5.212.600 5.6 887,156 2,704,599 298 15 56,725 2,230 5.132.700 1,430,486 1,430,486 1,430,486 1,430,486 1,419,286 1,419,286 1,419,286 1,419,286 1,419,286 1,419,286 858,828 1,106 58 2,362,992 t7,645,278 139,000 120 380 Parks Number of park acres maintained per full-time equivalent employee Number of sports fields prepared Cost per acre of parks maintained.

Cost per sports field maintained.

Golf Courses Cost per acre of golf course maintained Number of rounds played Number of acres maintained 858,828 1,152 50 2,176,265 39,138,187 3~

120,904 100 404 75 66 8,031 $

4,133 $

9,010 $

120,675 200 1.001,743 1,162 47 2,176,265 9,138,187 114,540 136 355 75 66 8,333 4,261 858,828 1,331 50 2,176,265 39,138,187 103,631 130 800 858,828 1,331 55 2,176,265 39,138,187 103,631 130 800 858,828 1,351 59 2,176,265 39,138,187 103,631 132 802 858,828 1,283 48 1,941,287 35,298,000 3 77,651 167 1,623 10.52 66 10,288 $

4,747 $

858,828 1,273 50 1,882,400 5,238,900 75,296 158 1,567 858,828 1,273 50 1,882,400 35,238,900 75,500 130 1,659 858,828 1,283 54 1,903,000 35,283,600 75,500 192 1,717 10.39 69 9,144 4,377 75 66 8,192 4,260 12.00 12.00 66 66 9,651 $

9,950 5,134 $

5,134 10.52 66 10,699 4,937 10.52 10.39 66 66 9,960 $

8,791 4,596 $

4,828 9,595 118,879 200 9,569 $

116,287 200 11,327 $

124,404 200 10,674 $

137,948 200 10,617 $

153,661 200 10,305 $

157,649 200 9,625 $

160,614 200 9,242 $

156,991 200 8,921 168,168 200 138

CITY OF ANAHEIM Operating Indicators by Function Last Ten Fiscal Years (continued)

Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Function/Program City Libraries Hours open 16,243 15,530 15,364 18,944 19,290 20,292 Total circulation of materials, including eBooks 1,520,841 1,635,627 1,700,104 1,655,922 1,721,779 1,658,731 1,630,580 1,540,147 1,422.072 1,689,744 Patron assistance (reference, information, computer) 291,960 347,085 397,287 530,364 537,807 461,819 350,325 365,142 375,944 450,052 Patron visits 1,317,689 1,321,309 1,403,995 1,572,138 1,752,838 1,615,640 1,545,205 1,375,679 1,147,079 1,267,487 Library cardholders 158,396 157,278 156,444 149,501 138,826 147,638 161,278 139,611 114,700 100,690 Programs offered 3,097 3,235 3,927 3,991 4,777 4,410 3,923 2,740 3,559 3,572 Program attendance 102,728 101,696 124,401 146,357 158,669 152,532 129,661 84,631 79,912 99,330 Hours of public internet usage 237,340 220,930 209,673 246,676 277,097 242,734 192,817 170,254 154,927 151,304 Community Services Programs Number of youth program participants Number of youth program participants in recreation classes Number of adult program sports teams Number of park ranger contacts Public Utilities Department Electric Utility:

Number of meters Megawatt-hours - sales Megawatt-hours - purchased power Megawatt-hours - owned generation Water Utility:

Number of meters Millions of gallons sold Millions of gallons purchased from Metropolitan Water District Millions of gallons pumped from water system wells Anaheim Convention Center Number of events serviced Number of attendees Percentage of occupancy 136,345 129,215 110,013 134,611 146,381 455,725 362,839 362,839 354,505 346,171 10,906 9,213 10,231 10,125 16,332 16,006 13,675 15,200 841 845 908 885 875 840 756 812 233,308 275,014 232,132 187,000 208,176 161,038 140,000 139,773 14,886 14,886 820 639 88,935 132,633 115,418 115,113 114,662 113,434 112,548 111,784 111,319 110,729 110,635 110,592 3,074,636 2,966,119 2,976,014 3,344,188 3,208,123 2,979,396 3,233,508 3,223,728 3,090,382 3,282,236 3,029,766 2,707,466 2,737,174 3,085,358 2,836,962 2,978,800 2,780,318 2,606,275 2,459,836 2,603,955 380,449 430,323 431,027 410,784 435,835 301,021 696,563 929,787 936,471 974,395 62,917 62,793 62,717 62,607 62,456 20,464 19,672 19,526 20,492 22,238 62,436 62,372 23,154 24,075 62,045 61,883 61,704 22,887 22,550 23,881 6,878 7,023 7,398 8,054 6,614 4,978 8,049 10,188 9,144 8,169 14,659 14,100 13,399 14,669 17,034 18,961 16,844 13,580 14,244 16,784 263 222 200 232 310 339 347 337 310 262 1,070,000 1,059,000 935,000 944,000 917,000 1,008,000 1,098,000 1,002,000 1,202,000 992,000 58.0%

62.0%

56.0%

68.0%

56.0%

61.0%

70.0%

58.0%

66.0%

71.0%

Note: Certain statistics prior to the implementation of GASB statement no. 44 were not available.

Source: Various City Departments See accompanied independent ouditors' report 139

CITY OF ANAHEIM Capital Assets Statistics by Function Last Ten Fiscal Years Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Function/Program Police Department Police Facilities 10 10 10 10 10 9

8 6

4 4

Motorized Equipment 247 242 242 250 266 255 251 248 Police Helicopters 3

3 3

4 4

3 3

3 3

3 Shooting Range I

I 1

1 1

1 1

1 1

Communication/Radio Tower I

I I

1 1

1 1

1 1

1 Fixed Wing I

I Fire Department Fire stations 11 11 11 11 11 11 11 10 10 10 Training center 1

1 1

1 1

1 1

1 1

1 Fire trucks, engines, and other vehicles 79 74 69 74 74 79 79 72 72 71 Public Works Streets (center lane miles) 578 578 578 588.2 633.2 633.2 633.2 633.2 588.2 588.2 Traffic signals 318 318 318 306 318 314 312 312 309 308 Sewers (miles) 575.52 573.63 570.44 569.6 568.3 565.7 561.5 560 560 560 Storm Drains (miles) 151.30 151.24 151.24 151.24 148 148 148 148 148 148 Parks Community parks 11 11 11 I1 11 11 11 11 11 11 Mini parks 7

7 7

7 7

6 6

6 6

6 Neighborhood parks 21 21 21 21 21 20 20 20 21 21 Special use parks 6

6 6

6 6

6 6

6 6

6 City Libraries Branch libraries 7

7 7

7 7

7 6

5 4

5 Book mobiles I

1 1

2 2

2 2

2 1

1 See accompanied independent auditors' report 140

CITY OF ANAHEIM Capital Assets Statistics by Function Last Nine Fiscal Years Fiscal Year 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 Function/Program Public Utilities Department Electric Utility:

Transmission, 69kV, circuit miles Distribution, 12 kV and lower, circuit miles Overhead Underground 87 86 90 80 80 80 77 69 70 70 426 428 440 446 446 662 656 658 617 625 453 458 468 800 791 615 582 564 620 612 Water Utility:

Active Wells Reservoirs Water Mains (miles)

Fire Hydrants Anaheim Convention Center Square footage available Number of exhibit halls Source: Various City Departments 18 14 753 7,816 18 14 753 7,812 1,130,000 5

18 14 752 7,802 1,130,000 5

18 13 753 7,805 1,130,000 5

18 13 750 7,751 1,130,000 5

21 13 750 7,749 1,130,000 5

19 13 747 7,730 1,130,000 5

21 13 746 7,720 1,130,000 5

23 13 747 7,848 1,130,000 5

26 13 749 7,818 1,130,000 5

1,130,000 5

See accompanied independent auditors' report 141

CITY OF ANAHE I M Legend CITY HALL 200 S. ANAHEIM BLVD.

A FIRE STATIONS POLICE STATIONS LIBRARIES CITY FACILITIES HEUPORT PARKS

1. HANSEN PARK 1300 S. Knott St.

2. REID PARK 3100 W. Orange Ave.

3. SCHWEITZER PARK 238 S. Bel Air St.

4. MAXWELL PARK 2660 W. Orange Ave.

5. PETER MARSHALL PARK 801 N. Magnolia Ave.

6. BROOKHURST COMMUNITY PARK 2271 W. Cresent Ave.

7. JOHN MARSHALL PARK 2066 Falmouth Ave.

8. MODJESKA PARK 1331 S. Nutwood St.

9. CLARA BARTON PARK 1926 Clearbrook Ln.

10. CHAPARRAL PARK 1770 E. Broadway

11. WILLOW PARK 1625 W. Crone Ave.

12. PALM LANE PARK 1595 Palais Rd.

13. SAGE PARK 1313 Lido PI.

14. STODDARD PARK 901 S. Ninth St.

15. MANZANITA PARK 1260 Riviera St.

16. LA PALMA PARK & STADIUM 1151 La Palma Park Way

17. PEARSON PARK 400 N. Harbor Blvd.

18. LITTLE PEOPLES PARK 220 W. Elm St.

19. JULIANNA PARK 309 E. Juliana St.

20. GEORGE WASHINGTON PARK 250 E. Cypress St.

21. COLONY SQUARE 210 E. Lincoln Ave.

22. WALNUT GROVE PARK 905 S. Anaheim Blvd.

23. CITRUS PARK 104 S. Atchison St

24. PONDEROSA PARK 2100 S. Haster St.

25. LINCOLN PARK 1440 E. Lincoln Ave.

26. EDISON PARK 1145 Baxter St.

27. BOYSEN PARK 951 State College Blvd.

28. JUAREZ PARK 841 S. Sunkist St.

29. PIONEER PARK 2565 E. Underhill Ave.

30. RIO VISTA PARK 201 N. Park Vista St.

31. OLIVE HILLS PARK 4200 Nohl Ranch Rd.

32. RIVERDALE PARK 4545 E. Riverdale Ave.

33. PERALTA CANYON PARK 115 N. Pinney Dr.

34. PELANCONI PARK 222 S. Avenida Margarita

35. IMPERIAL PARK 450 S. Imperial Hwy.

36. EUCALYPTUS PARK 100 N. Quintana Dr.

37. OAK PARK 6400 E. Nohl Ranch Rd.

38. YORBA REGIONAL PARK 7600 E. La Palma Ave.

39. OAK CANYON NATURE CENTER 6700 Walnut Canyon Rd.

40. SYCAMORE PARK 8268 Monte Vista Rd.

41. CANYON RIM PARK 7305 E. Canyon Rim Rd.

42. RONALD REAGAN PARK 945 S.Weir Canyon Rd.

43. ROOSEVELT PARK 8160 E.Bauer Rd.

44. ROSS PARK 1280 W. Santa Ana St.

45. COTTONWOOD PARK 853 W. Cottonwood Cir.

46. DEER CANYON PARK Mohler & Santa Ana Rd.

47. FOUNDERS PARK 400 N. West St.

48. COLONY PARK 501 E. Water St.

49. ENERGY FIELD 1625 S. Ninth St.

50. MAGNOLIA PARK 1515 Wright Cir.

51. FRIENDSHIP PLAZA PARK 200 S. Anaheim Blvd.

52. ANAHEIM COVES 962 S. Rio Vista St.

142