Plan Anual del Servicio de Parques y Jardines: DESCRIPCIÓN DEL SERVICIO BRINDADO

The City’s bonds were issued primarily to finance or refinance capital fa- cilities. The 2007 Lease Revenue Bonds are reported only in the govern- ment-wide statements of net assets and activities; the balance of govern- mental activities debt issues are reported in the Capital Assets Internal Service Fund. Business-type activities debt issues are reported in the City’s enterprise funds. Several debt securities were issued for multiple purposes so the principal and related interest costs of the debt are allo- cated between the respective funds.

A summary of bonds outstanding at June 30, 2009 is as follows:

Govern- Business- mental type

Activities Activities Total

Revenue bonds: 1999 Refunding Lease $ 54,781,143 4,783,857 59,565,000 2001 Refunding Lease — 4,365,000 4,365,000 2003 Refunding Lease 28,386,325 18,963,675 47,350,000 2007 Lease Revenue 65,119,961 16,480,039 81,600,000 2007 Water Revenue — 35,495,000 35,495,000 2008 Water Revenue — 28,600,000 28,600,000 2008 Wastewater Revenue — 16,125,000 16,125,000 Original issue premium 2,545,859 2,425,691 4,971,550 Original issue discount (775,495) (783,908) (1,559,403) Deferred amount on refunding (3,744,509) (3,466,451) (7,210,960) Total revenue bonds 146,313,284 122,987,903 269,301,187 Total bonds $ 146,313,284 122,987,903 269,301,187

Debt Issue

A description of individual bond issues follow: Revenue Bonds

1999 Refunding Lease Revenue Bonds – $92,425,000 Public Financing Authority, Lease Revenue Bonds, 1999 Refunding Series A, issued March 1999, are due in annual installments ranging from $355,000 to $12,785,000 through June 1, 2020, with interest rates ranging from 4.00% to 5.125% payable se- miannually June 1 and December 1. The Bonds are special obligations of the Public Financing Authori- ty secured by and payable solely from rent pay- ments from the City pursuant to a lease agreement. The 1999 Refunding Lease Revenue Bonds were is- sued to refund bonds originally issued for multiple purposes, so the principal has been allocated and is

accounted for in the appropriate City funds (enter- prise and internal service funds). As of February 15th, 2007, the City issued the 2007 Lease Revenue Bonds (see details on page 76), which in part was an advance refunding of a portion of the 1999 Lease Revenue Bonds. The bonds refunded amounted to $6,645,000. The following is a sche- dule of the allocation of the 1999 Lease Revenue Bonds, net of original issue premium and deferred amount on refunding, by fund at June 30, 2009: Capital Assets Fund $54,781,143

Parking Facilities Fund 4,783,857

$ 59,565,000 Plus initial issue premium 1,168,818 Less deferred amount on refunding (1,386,094) Net Bonds outstanding 59,347,724 2001 Refunding Lease Revenue Bonds – $10,680,000

Public Financing Authority, Lease Revenue Bonds, 2001 Refunding Series A, issued December 2001, are due in annual installments ranging from $815,000 to $1,155,000 through June 1, 2013, with interest rates ranging from 3.00% to 4.13% payable semiannually June 1 and December 1. The bonds are special limited obligations of the Public Financ- ing Authority and are primarily payable from lease payments from the City pursuant to a lease agree-

ment dated December 1, 2001. $ 4,365,000 Plus original issue premium 21,479 Less deferred amount on refunding (211,435)

Net Bonds outstanding 4,175,044 2003 Refunding Lease Revenue Bonds – $68,445,000

Public Financing Authority, Lease Revenue Bonds, 2003 Refunding Series A, issued March 2003, are due in annual installments ranging from $2,285,000 to $9,870,000 through June 1, 2015, with interest rates ranging from 3.00% to 5.25% payable se- miannually June 1 and December 1. Bonds matur- ing on or after June 1, 2014 are subject to optional redemption in part, without premium, from pre- payments of base rental payments on or after June 1, 2014. The Bonds are special limited obligations of

For the year ended June 30, 2009

76 (9) LONG-TERM LIABILITIES, CONTINUED

the Public Financing Authority and are payable solely from rent payments from the City pursuant to a lease agreement. The 2003 Refunding LRBs were issued to advance refunding the 1993 Refunding LRBs, which were in turn issued for multiple purposes so the prin- cipal has been allocated and is accounted for in the appropriate City funds (enterprise and internal service funds). The following is a schedule of the allocation of the 2003 Refunding LRBs, net of premium, by fund at June 30, 2009:

Capital Assets Fund $28,386,325 Parking Facilities Fund 16,899,215 Water Enterprise Fund 2,064,460

$ 47,350,000 Plus original issue premium 2,453,565 Less deferred amount on refunding (1,967,359)

Net bonds outstanding 47,836,206 2007 Water Revenue Bonds – 35,495,000

Public Financing Authority, Water Revenue Bonds, issued January 2007, are due in annual installments ranging from $175,000 to $2,830,000 through June 1, 2037, with interest rates ranging from 3.51% to 4.45% payable semiannually June 1 and December 1. The Bonds are special limited obliga- tions of the Public Financing Authority and are primarily payable from installment payments from the City pursuant to an installment sale agreement dated January 1, 2007. The City’s obligation to make installment payments is solely payable from and secured by a pledge of net revenues of the Wa- ter Enterprise Fund.

$ 35,495,000

Less original issue discount (571,844) Net bonds outstanding 34,923,156 2007 Lease Revenue Bonds – $81,600,000 Public Fi-

nancing Authority, 2007 Lease Revenue Bonds, is- sued February 2007, are due in annual installments ranging from $775,000 to $6,640,000 through June 1, 2037, with interest rates ranging from 3.50% to 4.50% payable semiannually June 1 and December 1. The Bonds are special limited obliga-

tions of the Public Financing Authority and are payable solely from rent payments from the City pursuant to a lease agreement. The advance refund- ing resulted in an economic gain (difference be- tween the present value of the debt services pay- ments on the old and new debt) of $ 2,172,227 and a reduction of total debt service payments of $1,927,932. The 2007 LRBs were issued in part to advance refunding of the 1998 and 1999 LRBs, which were in turn issued for multiple purposes. The non-refunding portion was issued for multiple purposes as well. Thus the principal has been allo- cated and is accounted for in the appropriate City funds (enterprise, internal service funds, and gener- al government). The following is a schedule of the allocation of the 2007 Refunding LRBs, net of dis- count, by fund at June 30, 2009:

Capital Assets Fund $29,984,916 Parking Facilities Fund 16,480,039 General Long-Term Debt 35,135,045

$ 81,600,000 Less original issue discount (987,559) Less deferred amount on refunding (1,566,072) Net bonds outstanding 79,046,369 2008 Refunding Water Revenue Bonds - $30,735,000

Public Financing Authority, Water Revenue Bonds, issued March 2008, are due in annual installments ranging from $670,000 to $2,360,000 through June 1, 2024, with interest rates ranging from 3.00% to 5.00% payable semiannually June 1 and December 1. The Bonds are special limited obliga- tions of the Public Financing Authority and are primarily payable from installment payments from the City pursuant to an installment sale agreement dated April 1, 2008. The City’s obligation to make installment payments is solely payable from and se- cured by a pledge of net revenues of the Water En- terprise Fund. The advance refunding resulted in an economic gain (difference between the present val- ue of the debt services payments on the old and new debt) of $ 389,918 and a reduction of total debt ser- vice payments of $601,184. The 2008 WRBs were issued in part to advance refunding of the 1998

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements For the year ended June 30, 2009

77 (9) LONG-TERM LIABILITIES, CONTINUED

WRBs, which were in turn issued for multiple pur- poses. The non-refunding portion was issued for acquiring an existing water treatment plant.

$ 28,600,000

Plus original issue premium 888,870 Less deferred amount on refunding (798,600)

Net bonds outstanding 28,690,270 2008 Refunding Wastewater Revenue Bonds

- $17,035,000.

Public Financing Authority, Wastewater Revenue Bonds, issued April 2009, are due in annual install- ments ranging from $910,000 to $1,555,000 through June 1, 2022, with interest rates ranging from 2.40% to 5.00% payable semiannually June 1 and Decem- ber 1. The Bonds are special limited ob-ligations of the Public Financing Authority and are primarily pay- able from installment payments from the City pur- suant to an installment sale agreement dated May 1, 2008. The City’s obligation to make installment pay- ments is solely payable from and secured by a pledge of net revenues of the Wastewater Enterprise Fund. The advance refunding resulted in an economic gain (difference between the present value of the debt ser- vices payments on the old and new debt) of $ 793,750 and a reduction of total debt service payments of $1,161,564. The 2008 WWRBs were issued to ad- vance refunding of the 1998 WWRBs, which were in turn issued for multiple purposes.

$ 16,125,000

Plus original issue premium 438,818 Less deferred amount on refunding (1,281,400)

Net bonds outstanding 15,282,418

Total bonds outstanding $269,301,187

Note Payable

On January 26th, 2009 the City of Beverly Hills Public Financing Authority entered into an agree- ment with City National Bank to borrow against a line of credit up to an amount of $32,000,000 for the construction of a 72,460 sq. ft. four story office building at 331 N. Foothill Road, Beverly Hills, CA 90210. The line of credit is estimated to be drawn down and the construction completed on or before April of 2010, at which time, the City plans to con- vert the line of credit into a long term obligation. The obligation will have a term of 15 years and an interest rate of 5.72%. Interest and principal will be payable in the amount of $265,217 per month on the first day of the month after the loan closing. As of June 30, 2009, the amount borrowed against the line of credit is $9,519,369.

For the year ended June 30, 2009

78 (9) LONG-TERM LIABILITIES, CONTINUED

Annual Debt Service Requirements to Maturity

Total Debt

Principal Interest Principal Interest Principal Interest Service

2010 $ 6,939,591 6,988,209 5,290,409 5,421,596 12,230,000 12,409,805 24,639,805 2011 5,964,442 6,651,935 6,640,558 5,204,876 12,605,000 11,856,811 24,461,811 2012 6,492,271 6,412,257 7,687,729 4,958,494 14,180,000 11,370,751 25,550,751 2013 6,721,847 6,116,115 7,958,153 4,640,392 14,680,000 10,756,507 25,436,507 2014 6,985,997 5,776,751 7,049,003 4,295,162 14,035,000 10,071,913 24,106,913 2015-2019 51,778,664 22,550,991 27,426,336 17,206,658 79,205,000 39,757,649 118,962,649 2020-2024 29,388,216 10,807,038 25,311,784 11,325,853 54,700,000 22,132,891 76,832,891 2025-2029 21,183,938 5,460,675 14,631,062 6,883,793 35,815,000 12,344,468 48,159,468 2030-2034 7,481,613 2,243,586 13,328,387 3,911,658 20,810,000 6,155,244 26,965,244 2035-2039 5,350,850 802,987 9,489,150 1,406,451 14,840,000 2,209,438 17,049,438

Total minimum debt

service payments $ 148,287,429 73,810,544 124,812,571 65,254,933 273,100,000 139,065,477 412,165,477 Unamortized portion of:

Original issue premium 2,545,859 2,425,691 4,971,550 4,971,550

Original issue discount (775,495) (783,908) (1,559,403) (1,559,403)

Deferred amount on

refunding (3,744,509) (3,466,451) (7,210,960) (7,210,960)

Net total bonded debt

outstanding $ 146,313,284 122,987,903 269,301,187 408,366,664

Fiscal Year

Revenue Bonds

Governmental Activities Business-type Activities Total

Reserve Funds

Certain bond issues require that reserve funds be established in amounts equal to either:

1. 10% of the outstanding principal

2. 125% of remaining average annual debt service.

Based on the reserve alternative calculation methods, restricted assets at June 30, 2009, consisting of cash and investments, include the following:

Requirement Balance 2008 Refunding Water $ 2,210,662 2,738,171 2008 Refunding Wastewater 1,419,583 1,624,245 2007 Lease Revenue 3,400,000 7,212,763 2007 Refunding Water 1,478,958 2,915,051 D. Capital Leases

During FY2003, the City completed construction on the Public Works Fa- cility (PWF), a 31,500 sq. ft. two-story facility in the City’s Industrial Area which now houses all of the public works and utility employees and workshops, and the Water Treatment Plant (WTP), a facility to treat the City’s well water designed to reduce the City’s dependency on water pur- chased from the Metropolitan Water District by 20%. These facilities, both accounted for in the Water Enterprise Fund, were constructed under a design-build-operate-finance lease arrangement with Earth Tech, Inc. The 20-year capital leases include interest at 6% and early buy-out options any time after the first five years. The capitalized value of the PWF is $10.98 million and the WTP is $10.12 million. Additional tenant improvements related to the PWF total $2.79 million. As of June 30, 2008, the City pur- chased the PWF and WTP through the early buy-out option. The purchase price was $18,126,211.

CITY OF BEVERLY HILLS, CALIFORNIA

Notes to Basic Financial Statements For the year ended June 30, 2009

79 (9) LONG-TERM LIABILITIES, CONTINUED