Hermosa Beach Financial Report Highlights-May 2013
Hermosa Beach is debt free. “The City of Hermosa Beach currently has no debt.” Page 3
The city has nearly $5.1 million dollars earmarked for the E&B settlement already. “For purposes of the financial statements, $3.5 million is recorded in the Insurance Fund as a settlement payable related to the proposed oil development. Almost $1.6 million has been committed in the General Fund in the 2012-13 Budget, so this liability may be moved in the future”. Page X
In addition the city has unspent monies from the General Fund ($2 million dollars). “The City also has a financial policy of transferring funds unspent in the General Fund at year-end to the Insurance Fund, Equipment Replacement Fund, Capital Improvement Fund and to add to Contingency funds. For 2011-12, the City Council determined that all unspent funds in the General Fund ($2,075,589) would be transferred to the Insurance Fund to fund insurance liabilities and costs of the MacPherson Oil lawsuit settlement and proposed new oil project which are discussed in detail in the Notes to the Financial Statements.”(Note 15). Page iX
Hermosa Beach City assets exceed our liabilities by $80 million dollars. “As noted earlier, net assets may serve over time as a useful indicator of a government’s financial position. As of June 30, 2012, assets exceeded liabilities by $79,968,000.” Page 3
Hermosa has unrestricted monies to pay creditors ($10 million dollars). “The remaining balance of unrestricted net assets $10,589,000 may be used to meet the government’s ongoing obligations to citizens and creditors.” Page 6
The city does not have to pay the settlement immediately. “The City shall repay to E&B the full amount of the E&B Loan on commercially reasonable terms to be mutually agreed by the City and E&B.” Settlement Agreement and Release, City of Hermosa Beach Page 8
The Hermosa Beach 2012 Comprehensive Financial Annual Report proves The City of Hermosa Beach is prepared and has the financial means to easily pay this settlement today.