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Home My WebLink About2021-02-16 Agenda Packet (Revised)AGENDA - *Revised* City Council/Public Financing Authority Regular Meeting Tuesday, February 16, 2021 at 4:00 PM MAYOR AND CITY COUNCIL KIM CARR, Mayor TITO ORTIZ, Mayor Pro Tem BARBARA DELGLEIZE, Councilmember DAN KALMICK, Councilmember NATALIE MOSER, Councilmember ERIK PETERSON, Councilmember MIKE POSEY, Councilmember Virtual Location Huntington Beach, CA STAFF OLIVER CHI, City Manager MICHAEL E. GATES, City Attorney ROBIN ESTANISLAU, City Clerk ALISA BACKSTROM, City Treasure On March 17, 2020, Governor Newsom issued Executive Order N-29-20, which allows a local legislative body to hold public meetings via teleconferencing, and to make public meetings accessible telephonically or otherwise electronically to all members of the public seeking to observe and to address the local legislative body. PUBLIC PARTICIPATION/ZOOM ACCESS: In keeping with the Governor’s mandate to limit in-person gatherings that can spread COVID-19, the Tuesday, February 16, 2021 meeting of the Huntington Beach City Council will be held virtually. The City offers several ways to view City Council meetings live or on-demand. Council meetings are livestreamed on HBTV Channel 3 (replayed on Tuesday’s at 10:00 a.m., and Wednesday’s at 6:00 p.m.). In addition, live and archived meetings for on-demand viewing can be accessed from https://huntingtonbeach.legistar.com/calendar, or from any Roku or Apple device by downloading the Cablecast Screenweave App and searching for the City of Huntington Beach channel. PUBLIC COMMENTS: At 6:00 PM, individuals wishing to attend the meeting to provide a comment on agendized or non- agendized items may enter Zoom Webinar ID 971 5413 0528 via computer device, or by phone at (669) 900-6833. The Webinar can be accessed here: https://huntingtonbeach.zoom.us/j/97154130528. Attendees utilizing computer devices to request to speak may select the “Raise Hand” feature in the Webinar Controls section. Attendees entering the Webinar and requesting to speak by phone can enter *9 to enable the “Raise Hand” feature, followed by the *6 prompt that unmutes their handheld device microphone. Attendees will be prompted to speak when the Clerk announces their name or the last three digits of their phone number. Speakers are encouraged, but not required to identify themselves by name. Each person may have up to 3 minutes to speak, but the Mayor, at her discretion, may reduce the time allowance if warranted by the volume of calls. The Public Comment process will only be active during designated portions of the agenda (Public Comment and/or Public Hearing). After a speaker concludes their comment, their microphone will be muted, but they may remain in Webinar attendance for the duration of the meeting. Members of the public unable to attend the Zoom Webinar but interested in communicating with the City Council on agenda- related items, are encouraged to submit a written (supplemental) communication via email at SupplementalComm@Surfcity- hb.org, or City.Council@surfcity-hb.org. Supplemental Communications are public record, and if received by 2:00 PM on Tuesday, February 16, 2021, will be distributed to the City Council prior to consideration of agenda-related items, posted to the City website, and announced, but not read, at the meeting. Supplemental Communications received following the 2:00 PM deadline will be incorporated into the administrative record the following day. MEETING ASSISTANCE NOTICE: In accordance with the Americans with Disabilities Act, services are available to members of our community who require special assistance to participate in public meetings. If you require special assistance, 48-hour prior notification will enable the City to make reasonable arrangements for an assisted listening device (ALD) for the hearing impaired, American Sign Language interpreters, a reader during the meeting and/or large print agendas. Please contact the City Clerk's Office at (714) 536-5227 for more information AGENDA February 16, 2021City Council/Public Financing Authority 4:00 PM - COUNCIL CHAMBERS CALL TO ORDER ROLL CALL Peterson, Kalmick, Ortiz, Carr, Posey, Moser, Delgleize ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) PUBLIC COMMENTS PERTAINING TO STUDY SESSION / CLOSED SESSION ITEMS (3 Minute Time Limit) - Anyone wishing to provide a comment on a Study Session or Closed Session item may join Zoom Webinar ID 971 5413 0528 via computer device, or by calling (669) 900-6833 (see agenda cover sheet for request to speak instructions). Individuals will be prompted to speak when the Clerk announces their name or the last three digits of their phone number. Speakers are encouraged, but not required to identify themselves by name. Each speaker may have up to 3 minutes to speak; however, the time allowance may be reduced if warranted by the volume of speakers STUDY SESSION 21-1571.California Statewide Communities Development Authority (CSCDA) presentation on the Statewide Community Infrastructure and Workforce Housing Programs RECESS TO CLOSED SESSION CLOSED SESSION 21-1422.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Gov. Code section 54956.9(d)(1).) Name of case: Kennedy Commission, et al. v. City of Huntington Beach; OCSC Case No. 30-2015-00801675. 21-1433.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Gov. Code section 54956.9(d)(1).) Name of case: Wilson (Carrie) v. City of Huntington Beach, et al.; OCSC Case No. 30-2019-01094238. 21-1444.CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Gov. Code section 54956.9(d)(1).) Name of case: Rodriguez (Christian A.) v. City of Huntington Beach, et al.; OCSC Case No.: 30-2020-01131129. Page 1 of 6 AGENDA February 16, 2021City Council/Public Financing Authority 21-166*New CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION. Significant Exposure to Litigation Pursuant to Paragraph (2) of Subdivision (d) of Section 54956.9: Number of cases, one (1). 6:00 PM – COUNCIL CHAMBERS RECONVENE CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING ROLL CALL Peterson, Kalmick, Ortiz, Carr, Posey, Moser, Delgleize PLEDGE OF ALLEGIANCE INVOCATION In permitting a nonsectarian invocation, the City does not intend to proselytize or advance any faith or belief. Neither the City nor the City Council endorses any particular religious belief or form of invocation. 21-1175.Marsha Rechsteiner from Saints Simon and Jude Catholic Church and member of the Greater Huntington Beach Interfaith Council CLOSED SESSION REPORT BY CITY ATTORNEY AWARDS AND PRESENTATIONS 21-0926.Mayor Carr to recognize American Heart Month during the month of February 2021 21-1617.Mayor Carr to present the Mayor’s HB Excellence Award to Catherine Lukehart, Homeless Outreach Coordinator, Huntington Beach Police Department ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) PUBLIC COMMENTS (3-Minute Time Limit) - At approximately 6:00 PM, individuals wishing to provide a comment on agendized or non-agendized items may join Zoom Webinar ID 971 5413 0528 via computer device, or by calling (669) 900-6833 (see agenda cover sheet for request to speak instructions). Individuals will be prompted to speak when the Clerk announces their name or the last three digits of their phone number. Public comments will only be heard during this portion of the agenda. Speakers are encouraged, but not required to identify themselves by name. Each speaker may have up to 3 minutes to speak; however, the time allowance may be reduced if Page 2 of 6 AGENDA February 16, 2021City Council/Public Financing Authority warranted by the volume of speakers COUNCIL COMMITTEE - APPOINTMENTS - LIAISON REPORTS, AB 1234 REPORTING, AND OPENNESS IN NEGOTIATIONS DISCLOSURES CITY MANAGER'S REPORT 21-1608.Regional Housing Needs Assessment (RHNA) Update CITY CLERK'S REPORT 21-1239.Presentation on the Safe and Sane Fireworks Stand Application and Lottery Process for 2021 CONSENT CALENDAR 21-11610.Approve and Adopt Minutes A)Approve and adopt the City Council special meeting minutes dated January 5, 2021; and, B)Approve and adopt the City Council/Public Financing Authority regular meeting minutes dated February 1, 2021 , as written and on file in the office of the City Clerk. Recommended Action: 21-07211.Approve, accept, and authorize the appropriation of a donation in the amount of $150,000 from the Friends of the Huntington Beach Public Library Approve, accept, and authorize the appropriation of $150,000 donation from the Friends of the Huntington Beach Public Library during Fiscal Year 2020/21 for use to expand the collection. Recommended Action: 21-11112.Receive and file a status update on the 6th Cycle Regional Housing Needs Assessment (RHNA) process Receive and file the Regional Housing Needs Assessment process status update. Recommended Action: 21-10713.Adopt Resolution No. 2021-09 authorizing the Director of Public Works to request a project delay from the Orange County Transportation Authority (OCTA) for the commencement of the Bolsa Page 3 of 6 AGENDA February 16, 2021City Council/Public Financing Authority Chica Street/Valley View Street Corridor Project Adopt Resolution No. 2021-09, “A Resolution of the City Council of the City of Huntington Beach Authorizing a Request to Pursue a Project Delay from the Orange County Transportation Authority (OCTA) for the Bolsa Chica Street/Valley View Street Corridor Project - Project P Regional Traffic Signal Synchronization Program - Comprehensive Transportation Funding Program.” Recommended Action: 21-04714.Authorize execution of a License Agreement with C3 DLG 414 Main Street, LLC, for the 414 Main Street Mixed-Use Project located on the east side of Main Street between Orange Avenue and Pecan Avenue Authorize the Mayor and City Clerk to execute and record the , “License Agreement between the City of Huntington Beach and C3 DLG 414 Main Street, LLC , to Provide Installation and Maintenance of Landscaping and Landscaping Improvements in the Public Right-of-Way,” for the 414-424 Main Street mixed-use project (Attachment 1). Recommended Action: 21-06715.Accept bid and authorize execution of a construction contract with Alfaro Communication Construction, Inc., in the amount of $284,270 for the construction of fiber optic communications to Murdy Park, the Joint Powers Training Facility and the Water Operations Facility, CC-1593 and CC-1594 A) Accept the lowest responsive and responsible bid submitted by Alfaro Communication Construction, Inc., in the amount of $284,270; and , B) Authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. Recommended Action: PUBLIC HEARING Anyone wishing to provide a comment on a Public Hearing item may join Zoom Webinar ID 971 5413 0528 via computer device, or by calling (669) 900-6833 (see agenda cover sheet for request to speak instructions). Individuals will be prompted to speak when the Clerk announces their name or the last three digits of their phone number. Speakers are encouraged, but not required to identify themselves by name. Each speaker may have up to 3 minutes to speak; however, the time allowance may be reduced if warranted by the volume of speakers 21-07816.Appeal of Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 (714 Pacific Coast Page 4 of 6 AGENDA February 16, 2021City Council/Public Financing Authority Highway Mixed Use) Staff recommends the City Council take the following actions: A) Find the proposed project exempt from the California Environmental Quality Act pursuant to Section 15332 of the CEQA Guidelines; and , B) Approve Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 with findings and conditions of approval (Attachment No. 1). Recommended Action: ADMINISTRATIVE ITEMS 21-10017.Consider an Extension of the Temporary Closure of the Second Block of Main Street to Vehicular Traffic Through Labor Day (September 6, 2021); Authorize Staff to Engage an Urban Design Firm; and, Appoint the Mayor, Mayor Pro Tem, and a City Council Member to Serve on an Ad Hoc Downtown Urban Design Study Committee A) Authorize the City Manager to continue the temporary closure of the second block of Main Street to vehicular traffic to accommodate outdoor dining and retail in the public right-of-way through September 6, 2021; and, B) Authorize staff to engage an Urban Design Firm; and, C) Establish an Ad Hoc Downtown Urban Design Study Committee; and , D) Appoint the Mayor, Mayor Pro Tem, and a City Council Member to the Ad Hoc Committee. Recommended Action: 21-12418.Year-End Audit results for the FY 2019/20 Comprehensive Annual Financial Report (CAFR) and FY 2020/21 Mid-Year Budget Adjustments & Updates A) Receive and File the FY 2019/20 Comprehensive Annual Financial Report; and, B) Approve mid-year budget adjustments to the FY 2020/21 Revised Budget in the funds and by the amounts contained in Attachment 1. Recommended Action: ORDINANCES FOR INTRODUCTION Page 5 of 6 AGENDA February 16, 2021City Council/Public Financing Authority 21-05219.Approve for introduction Ordinance No. 4228 to amend Chapter 13.10 of the Huntington Beach Municipal Code Prohibiting the Storage of Personal Property on Public or Private Property Approve for introduction Ordinance No. 4228, “An Ordinance of the City of Huntington Beach Amending Chapter 13.10 of the Huntington Beach Municipal Code Prohibiting the Storage of Personal Property on Public or Private Property.” Recommended Action: COUNCILMEMBER COMMENTS (Not Agendized) ADJOURNMENT The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is Monday, March 1, 2021, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov Page 6 of 6 City of Huntington Beach File #:21-157 MEETING DATE:2/16/2021 California Statewide Communities Development Authority (CSCDA) presentation on the Statewide Community Infrastructure and Workforce Housing Programs City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™8 City of Huntington Beach File #:21-142 MEETING DATE:2/16/2021 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Gov. Code section 54956.9(d) (1).) Name of case: Kennedy Commission, et al. v. City of Huntington Beach; OCSC Case No. 30-2015-00801675. City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™9 City of Huntington Beach File #:21-143 MEETING DATE:2/16/2021 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Gov. Code section 54956.9(d) (1).) Name of case: Wilson (Carrie) v. City of Huntington Beach, et al.; OCSC Case No. 30- 2019-01094238. City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™10 City of Huntington Beach File #:21-144 MEETING DATE:2/16/2021 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Gov. Code section 54956.9(d) (1).) Name of case: Rodriguez (Christian A.) v. City of Huntington Beach, et al.; OCSC Case No.: 30-2020-01131129. City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™11 City of Huntington Beach File #:21-117 MEETING DATE:2/16/2021 Marsha Rechsteiner from Saints Simon and Jude Catholic Church and member of the Greater Huntington Beach Interfaith Council City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™12 City of Huntington Beach File #:21-092 MEETING DATE:2/16/2021 Mayor Carr to recognize American Heart Month during the month of February 2021 City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™13 City of Huntington Beach File #:21-161 MEETING DATE:2/16/2021 Mayor Carr to present the Mayor’s HB Excellence Award to Catherine Lukehart, Homeless Outreach Coordinator, Huntington Beach Police Department City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™14 City of Huntington Beach File #:21-160 MEETING DATE:2/16/2021 Regional Housing Needs Assessment (RHNA) Update City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™15 City of Huntington Beach File #:21-123 MEETING DATE:2/16/2021 Presentation on the Safe and Sane Fireworks Stand Application and Lottery Process for 2021 City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™16 Safe and Sane Fireworks Stand Application and Lottery Process 2021 17 2021 Fireworks Stand Application/Lottery Process Application Period: March 1 through March 31 Permits: The maximum number of permits that may be issued during any one calendar year shall be fifteen, with a maximum number of five permits issued to qualified organizations in each of the following categories: Civic Organizations High School Youth Sports 18 2021 Fireworks Stand Application/Lottery Process CIVIC ORGANIZATIONS (5): •Organizations operating within the City whose sole purpose is for civic betterment or charitable or religious purposes to and for the citizens of Huntington Beach –EXCLUDES high school extracurricular activities or youth or adult sports groups •Approved applications will be entered into a lottery drawing held at the April 19 City Council meeting 19 2021 Fireworks Stand Application/Lottery Process HIGH SCHOOL (5): •High schools operating within the City that agree to use the proceeds for the benefit of valid student extracurricular activities/sports shall be allowed to submit one application •Each public high school may be awarded one permit; upon application receipt and approval, each high school shall hold a lottery among its student clubs and organizations, and can dedicate its stand to not more than two groups 20 2021 Fireworks Stand Application/Lottery Process •Private high schools may each enter one application; approved applications will be entered into a lottery drawing held at the April 19 City Council meeting to award a fifth high school permit •If no private high schools apply, the four public high schools will be entered into the lottery drawing for the fifth high school permit 21 2021 Fireworks Stand Application/Lottery Process YOUTH SPORTS (5): •Organizations operating within the City whose main purpose is to benefit a valid youth sports activity –EXCLUDES individual club or travel sports teams, or high school extracurricular activities/sports groups •Approved applications will be entered into a lottery drawing held at the April 19 City Council meeting 22 2021 Fireworks Stand Application/Lottery Process •Prior to March 1, applicants successful in the 2020 application process will be notified by email of the 2021 process; and, •A public announcement regarding the 2021 application process will be posted to local social media sites 23 2021 Fireworks Stand Application/Lottery Process •At the conclusion of the lottery drawing held on April 19, representatives from the Fire Department will contact successful applicants to explain what happens next, and to distribute temporary fireworks stand sales applications. •For more information, visit these online resources: Fireworks Information –2021 http://www.huntingtonbeachca.gov/fireworks/ HB Municipal Code Chapter 5.90 –Fireworks 24 Questions? 25 City of Huntington Beach File #:21-116 MEETING DATE:2/16/2021 REQUEST FOR COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Robin Estanislau, CMC, City Clerk PREPARED BY:Robin Estanislau, CMC, City Clerk Subject: Approve and Adopt Minutes Statement of Issue: The City Council special meeting minutes of January 5, 2021, and the City Council/Public Financing Authority regular meeting minutes of February 1, 2021, require review and approval. Financial Impact: None. Recommended Action: A) Approve and adopt the City Council special meeting minutes dated January 5, 2021; and, B) Approve and adopt the City Council/Public Financing Authority regular meeting minutes dated February 1, 2021, as written and on file in the office of the City Clerk. Alternative Action(s): Do not approve and/or request revision(s). Analysis: None. Environmental Status: Non-Applicable. Strategic Plan Goal: Non-Applicable - Administrative Item Attachment(s): 1. January 5, 2021 CC special meeting minutes 2. February 1, 2021 CC/PFA regular meeting minutes City of Huntington Beach Printed on 2/10/2021Page 1 of 1 powered by Legistar™26 Minutes Huntington Beach City Council Strategic Planning Workshop Tuesday, January 5, 2021 9:00 AM – Meeting Rooms C&D Central Library, 7111 Talbert Avenue Huntington Beach, California 92648 CALLED TO ORDER – 9:08 AM ROLL CALL Present: Kalmick, Ortiz (arrived 9:30 AM via Zoom), Carr, Posey (present until 11:40 AM), Moser, and Delgleize Absent: Peterson Pursuant to Resolution No. 2001-54, Councilmember Peterson requested and received no objections to be absent. Councilmember Kalmick made a motion to deny permission for Mayor Pro Tem Ortiz’s absence, and Mayor Carr seconded the motion. The motion received no objections. However, at 9:30 AM, Mayor Pro Tem Ortiz joined the meeting via Zoom. PLEDGE OF ALLEGIANCE – Led by City Attorney Michael Gates ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown “Open Meetings” Act, City Clerk Robin Estanislau announced communications received by her office following distribution of the Council agenda packet: Administrative Items #1 (21-001) #1 (21-001) A PowerPoint presentation submitted by Pat West, Pat West LLC. #1 (21-001) A PowerPoint presentation titled “City of Huntington Beach – City Council Strategic Planning Workshop” submitted by Oliver Chi, City Manager #1 (21-001) Five (5) email communications. PUBLIC COMMENTS (3-Minute Time Limit Via Zoom) Amory Hanson was called to speak, identifying himself as a candidate for City Council in 2022 and current member of the Historic Resources Board. He stated his opinion that the number one goal Council should consider is to transition away from virtual assembly that restricts the public’s right and ability to participate in local government decisions. Steven Shephard was called to speak, and stated his opinion that Council prioritize improving pedestrian and bicyclist infrastructure to reduce congestion and increase public safety not only for children, but for all residents who walk and cycle as means for transportation, exercise, and outdoor activity. 27 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 2 ADMINISTRATIVE ITEMS 1. 21-001 Strategic Planning Workshop Pat West, CEO Pat West LLC, opened the workshop by introducing members of the PW LLC team, including Craig Beck, Isabelle Arvea, and Michelle Foster. City Manager Oliver Chi introduced members of the City Council, elected officials and Department Heads. Mr. West presented a PowerPoint that included the following titled slides: Review of Workshop Expectations, HB strong, There There, Free Speech Corner, Dog Friendly, Historic Buildings, Tall Buildings, Tourism, Mixed Use: Residential / Retail, Small Business, Junior Lifeguard Program, Public Art, Parks, Wetlands – Bolsa Ecological Reserve, Least Tern – Snowy Plover Sanctuary, Wildlife, and, Conclusion. Team Pat West, LLC distributed index cards to Councilmembers to notate priorities for the year for collection later in the W orkshop. At 10:17 am, City Manager Chi called for a 15-minute recess. At 10:32 am, the Workshop resumed. City Manager Chi presented a PowerPoint entitled City Council Strategic Planning Workshop - Overview of Key City Issues that addressed the following topics: Review of Key Issues Facing City, COVID-19 Response, City Budget / Fiscal Position, Homelessness Response Efforts, City-Facility Capital Improvement Needs, Implement New Economic Development Strategy, Development / RHNA Issues, Labor Relations, and Ongoing CIP Efforts. Mr. Chi provided details into each key city issue: COVID-19 Response Goals • maintain public access to all City services • keeping the workforce safe to ensure continued services • economic recovery  figuring out how to distribute $650k in small business grants  continuation of OneHB micro grant program  evaluating programs such as the emergency Temporary Use Permit (TUP) Program • vaccination process  with lack of direction from the Federal government, there is a need to work with the County to vaccinate residents; the County’s goal is to vaccinate everyone in the County who wants to be vaccinated by 4th of July (City staff will be needed to assist with this effort) City Budget/ Fiscal Position • The budget is balanced and there are $70M in General Fund reserves to help with the current crisis; pension costs are a priority to be addressed, if nothing is done in the next four years, costs will be in a deficit Homelessness Response Efforts 28 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 3 • The Navigation Center is now operational, and there is a departmental approach for mobile crisis response; the shelter is for targeted enforcement of keeping public areas accessible; permanent supportive housing is the attainment goal  projects such as Jamboree housing - funding is needed for these types of projects and staff is looking at inclusionary housing policies and the possibility of in-lieu fees  Councilmember Delgleize was acknowledged for being a champion on mental health crisis response, and the need for mental health and substance abuse resources at the shelter is ongoing City-Facility Capital Improvement Needs • The City has facility capital (approximately 1.75m sq. ft.)  Police Station (modernizing cost $25M)  Downtown Lake Fire Station (modernizing cost $3M)  Civic Center (modernizing cost $3M) - Sean Crumby is working on possible innovative Civic Center development through Performance Guaranteed Facility (PGF) program which designs, builds, finances and maintains a new grand civic plaza like Long Beach did through a 40-year partnership Economic Development / Development / RHNA • Mr. Chi acknowledged Director of Community Development Ursula Luna-Reynosa for leading to address these efforts on behalf of the City • Several key development projects in the pipeline  Bella Terra has submitted preliminary plans to City  The 6th cycle of RHNA/Housing Element update begins in October and the City is required to zone for an additional 13,000 housing units (an appeal is underway) Labor Relations • Six (6) of the nine (9) MOUs are expired, 1 (Fire) is set to expire soon; addressing this affects the budget, but there is a need for MOU upgrades Ongoing CIP Efforts • Despite the pandemic, staff has been maintaining key improvement projects, the fiscal year budget included $24.6M in capital enhancements such as the Edison Community Center, Central Library Foundation restoration, Central Library/Park Public Art Project, etc. • Updates to the Library Facility Master Plan and the Parks and Recreation Master Plan • Other goals: water infrastructure, City fiber optic network expansion, etc. Councilmember Kalmick and City Manager Chi discussed Unfunded Accrued Liability (UAL) pension debt. Craig Beck (Pat West, LLC) transitioned discussion to the priorities notated by Councilmembers on the index cards provided earlier, and set the goal of the exercise to recognize the priorities of the Council, and how they can fit within the key issues for City management. Michelle Foster (Pat West, LLC) specified the discussion would help align with distribution of resources. 29 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 4 Mr. Beck read priorities notated by Councilmembers: • Regional Housing Needs Assessment (RHNA) numbers • New development • Infrastructure • Community participation • Cannabis • Homelessness • Citywide broadband • Beach Boulevard • Opening small businesses safely • Opening City Hall safely • COVID-19 The priorities were condensed into five categories: • Community Engagement • Homelessness • Economic Development & Housing • Infrastructure (including parks) • COVID-19 Mr. Beck addressed the COVID-19 response priority by asking, “How does the City look at COVID-19 response?,” … “Are the priorities only within protecting small businesses and getting a vaccination plan?,” … “Is COVID-19 going to remain a priority for the entire year?” Councilmember Delgleize specified that all aspects of City services need to be covered when addressing COVID-19 as a priority, and discussed ramping up homeless shelter services, including COVID-19 vaccinations and public education about shelter responsibilities. Mayor Carr spoke to COVID-19 response and to programs that the community needs to be aware of through the website, Town Hall meetings, and educational media on television. She discussed information on available grant funds, vaccination plans, economic recovery, local business outreach, and partnership with local hospitals/Chamber of Commerce for sharing of accurate information. Councilmember Kalmick spoke to public participation and public information across the board, explaining to residents the purpose of City plans, implementing reverse 911, mass texting and utility inserts. Ms. Foster and Councilmember Kalmick discussed how to identify public information and participation goals, and move forward. Councilmember Kalmick voiced concerns that the City is behind on conversations of importance, and called for focus on advance planning, i.e., having conversations early (6-8 months) on items that are coming, and addressed repetitive messaging. Councilmember Moser spoke to information spreading for all: seniors, those who do not receive information via text or internet, repetitive messaging, reiterating information in various formats, quick via use of graphics; also, using the City Call Center to collect feedback from the community on information that has already been put out. Mayor Pro Tem Ortiz spoke to critical need in assisting small businesses with a lack of income due to COVID-19, questioning how to economically recover and stop the closure of 10- to 20-year-old 30 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 5 businesses, the surge in homelessness, reiterating the message to stay at home if you are sick, and getting a vaccine. Mr. Beck acknowledged the recurring theme of information dissemination and community engagement, questioning how to create a uniform message on effects and City services, how to tie these into Council priorities, and what ideas and setbacks the City look to. Mr. Beck asked for Council feedback on the following: • Homelessness is a national problem • COVID-19 is affecting homelessness • How can the City support small businesses? (street closures, parklets, jobs/business programs) • With RHNA, how is the need going to be addressed? ADUs? Housing Element? What do these policies mean to economic development? • Housing creation will affect economic opportunity • Who you house should work in the City • Do municipalities provide broadband? Do they collaborate? How do they create lower cost access to broadband? Is the infrastructure there? Councilmember Posey acknowledged that economic development and housing go hand-in-hand, and identified a goal for the City to revisit each master plan on a quarterly basis. He stated his opinion that redevelopment can help address many issues, and the Council needs to be courageous towards the community that vocalize against it. He shared points in time for specific Council actions: Zoning overlays 2006-2010 impacting Beach Boulevard; opportunity to redevelop 1960-1970 strip malls; and, Huntington Beach being the only coastal City that does not have development on the sand, suggesting that if mid-rise development on the sand were to occur, infrastructure priorities could be addressed. He also reminded Council of past conversations on leveraging economic development to generate revenue. Councilmember Delgleize voiced concerns about the community’s lack of information even with their active engagement on social media. She concurred with prioritizing economic development, recalling the Beach/Edinger Corridor Specific plan with community engagement through meetings, and its positive impacts on blight. She described information dissemination as critical to activate resident participation, even without a consensus. She also acknowledged Park funding as a low, but vital amenity. Ms. Foster discussed how communities are built to change but may result in community tension, how adaptation is needed, and that embracing change is key. Mayor Carr acknowledged the five priorities, but with an overarching need for keeping the budget in mind (fiscal stability). Ms. Foster reminded Council that unfunded priorities reoccur as priorities, and Councilmember Kalmick requested a list of 2019 priorities for reference. Councilmember Posey concurred with creating fiscally stable priorities, and reminded the Council of consultants hired by the City to develop plans that have come up short on provided updates to the Council. Speaking specifically to incoming Councilmembers on the purpose of these workshops, he recognized these exercises could be helpful to set political agenda and priorities. Mr. Beck reiterated Fiscal Stability as the overarching Council priority. 31 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 6 Mayor Carr called on, and Mayor Pro Tem Ortiz confirmed his agreement with the priorities as presented. At 11:36 a.m., Mr. Chi called for a 30-minute lunch break. Mr. Beck requested that during the break, Council consider actions to move forward, and opportunities for improvement and success. At 12:22 p.m., the W orkshop resumed. Mr. West reminded the Councilmembers of the “super powers” they have at setting policy and direction for the City Manager: • The City is a good size; it’s manageable, and when cities are larger, issues arise • Innovation is possible when creating policy to assist the constituency  constituency and outreach; different levels of outreach needed to address all residents  What drives community engagement? Wealth? Income? Diversity? Education? Isabel Arvea (Pat West, LLC) explained the meaning of community engagement, and different methods of communication: • Community engagement is about information spreading and call to action • Different neighborhoods need different methods of information sources (mailers, postcards, e- mail blasts, calls, texts, door-to-door engagement) Mr. West emphasized the need for the City Manager to immediately inform Council of big-ticket items to facilitate the decision-making process and obtain community buy-in from constituents. Mr. West continued discussion on how Council direction can have an impact on the City’s management team: • Council votes set a “vibe” • How direction is met, and an interdepartmental approach taken to address requests and motions made • How deadlines are set • Uncertainty on Council direction to be clarified by the City Manager Mr. Chi showed the 2019 priorities list requested by Councilmember Kalmick before the break: • Enhance and maintain high quality City services • Enhance and maintain the infrastructure • Strengthen long-term financial and economic sustainability • Enhance and modernize public safety service delivery Mr. Beck initiated a conversation on community engagement and using it to bring priorities forward and to fruition. Ms. Foster verified with the Council that everyone agrees on what community engagement means. Mayor Carr identified ways to engage with the community and ensure there is a call to action (text message structures, phone calls, HBTV Channel 3, MyHB service request app, public service announcements (PSAs), YouTube, word of mouth). Ms. Foster suggested volunteer groups and non-profit partnerships. Councilmember Moser concurred with Mayor Carr and Ms. Foster, and spoke to the idea of community 32 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 7 mapping and using residents as assets: How can residents be helpful and have a select group that can serve as a clearing-house of information? How do we ensure we are using the preferred ways of community engagement? Mr. Beck asked Council to provide an example of community engagement gone well. Councilmember Kalmick stated his opinion that there are no good examples to share. Councilmember Delgleize referred to OCTA’s feedback numbers, which in her opinion are great. Councilmember Kalmick recognized that information shared directly by the Council ahead of time is helpful, and that Mr. Chi’s newsletter is rich in information and very resourceful. Mr. Beck requested that Council consider how to leverage current resources; Ms. Foster reminded everyone of the Fiscal Stability theme. Councilmember Kalmick spoke to small business roundtables; engaging different stakeholders so there is a variety of residents engaging. Ms. Foster initiated a conversation on establishing partnerships. Councilmember Delgleize pointed to the CERT program as a potential partner, and emphasized the need to apply what works to current resources already assisting in engagement. Councilmember Moser spoke again to community mapping and the creation of a structure that would allow the City to speak in unison and create access points everyone can refer too. Councilmember Delgleize recognized members of the community who engage in, and graduate from, community leadership programs. Ms. Arvea spoke to organic community engagement and provided the following points: • Community mapping helps give residents a sense of identity and community empowerment • An empowered community is engaged, and will serve as the biggest advocate for two-way communication with the Council • The community that is empowered can be your biggest supporter when trying to push an idea forward Mayor Pro Tem Ortiz called for timely and consistent updates on the MyHB app, and in his opinion, social media is not always effective. Mr. Beck highlighted the community engagement theme as: • Community engagement can be improved • Community engagement functions two ways • Community engagement has gaps … what are they? • What is working? • When engaging with the community, flexibility is needed; feedback will be given; feedback should influence decision making • It is okay to change positions on policy, based on what the community is providing back as insight? 33 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 8 Councilmember Kalmick suggested that the structure and appointment process for City board, commission, and ad-hoc committees be reviewed; questioned consolidation and perhaps formation of an Ethics Commission. He also recognized the political advantages of appointment. Councilmember Kalmick discussed social media and questioned if a formal policy is in place, and how the Council can present one voice in an official capacity. Councilmember Kalmick shifted discussion to community engagement during a campaign, how to keep outside interests out, campaign finance law and contribution limits, and possible update of the City’s policy on ethics. Councilmember Kalmick emphasized his communication goal as timely, accurate, direct; in a manner where the community feels like they can trust their governmental body to be an information distributor. Mr. Beck began a conversation on formal versus informal communication. Councilmember Moser stated that the City’s website be considered a timely information producer that residents rely on at all times. She shared her sense community division, and spoke of opportunities to change how the community speaks to each other through community dialogue, and intercommunity conversations that may help heal the divides. Ms. Foster briefly spoke to conversation versus online chatter, and Mr. Beck acknowledged that social media dialogue needs structure. Mr. Beck shared views on the “charm of the elected,” sharing his opinion that elected officials having the ability to “work the room” and be instinctual in engaging and diffusing upset residents. Councilmember Kalmick addressed communication flow with people who do business with the City (subcontractors, project developers, etc.), and how conversation can lead to local hire. He also questioned the need to review the City Charter. Mr. Beck transitioned to homelessness, and questioned the biggest success of opening the Navigation Center. Councilmember Delgleize spoke to time and process, and how the community was able to see first- hand the slow progression of a government project. She also recognized the importance of innovation and partnerships with other entities to accomplish project goals. Mayor Carr commended the community for their participation, acceptance, and engagement. She stressed the need to educate everyone on the roots and causes of homelessness, identifying preventative measures, and understanding how mental health and substance abuse tie into the homelessness topic. She pointed to the City’s position on sober-home living facilities, support for the Be Well OC Program, engaging with partners such as the business community and Chamber of Commerce, and recognizing who is on the front line witnessing homelessness. Councilmember Moser acknowledged the road to accomplishment of the Navigation Center, and placed emphasis on getting the questions on the logistics answered. She discussed the purpose of the Navigation Center, the length of time people are housed, attainment of benefits, success metrics, 34 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 9 its root issues, opportunities for partnership, and advocacy for continued funding. Councilmember Delgleize recognized the need for cities be their own individual advocates. Councilmember Moser recognized the need for continued efforts for improvement. Ms. Foster shared about metrics, and her opinion that unmeasured plans go nowhere. Mr. Ortiz shared his impression of issues with the Navigation Center, including a need for computers and Wi-Fi access for job searches, educating the homeless population about Center structure and resources, and how to attract the homeless to enter the center. Ms. Foster shared that data helps establish a continuum. Councilmember Kalmick questioned efforts to aiding the homeless into the center. Mr. Chi spoke to the legal constraints and planned enforcement efforts, court-ordered assistance, loitering enforcement, targeted enforcement, and interdepartmental approach. Councilmember Kalmick inquired, and Mr. Chi confirmed that internet access is available at the navigation center, and also identified receipt of donations. Councilmember Kalmick requested, and Mr. Chi agreed to provide community updates regarding homeless encampments and enforcement mechanisms. Councilmember Ortiz inquired about ways to improve the experience for families and children at the Navigation Center. Mr. Chi spoke to the policies in place, reminding Council that it is not a walk-up center, i.e., by referral only to reduce foot traffic that would concern the neighboring residents. He continued that despite this, it is a low-barrier access center with the only requirement being a Huntington Beach transient, and as many clients are mentally ill, homeless families with children are not serviced at the Center, but instead are referred to other local resources. In response to Mayor Carr’s inquiry homeless encampments activity, Police Chief Harvey provided targeted enforcement and statistical data: • Four case managers assigned • Since 2015, more than 10,000 contacts with homeless individuals have occurred (many are repeat contacts - not atypical) • Numerous individual contacts are required for people to accept services • Most classified as chronically homeless in the City have been contacted • Services are offered on-camera • There is an enforcement operation scheduled for early Friday morning (camping, loitering, sidewalk blocking) • Enforcement can only occur when beds are available • Enforcement provides opportunity for individuals to seek resources • The department must follow through on enforcement when services are declined in order for the tone to be set • The goal is to ensure that public spaces are available for the community to access • COVID-19 screening for new clients has been innovative • Appointment availability has increased in a safely-timed manner 35 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 10 Mr. Beck transitioned discussion to Economic Development & Housing. Councilmember Kalmick spoke to ensuring that residents are able to be part of the workforce in the City, especially since the number of RHNA housing units required by the City is increasing. He stressed the importance for Council to understand the methodology behind the requirements RHNA calls for in order to work together to access State funding. He discussed revenue sources, questioning policy relating to cannabis, how to attract businesses the City wants, micro business communities, a city concert venue, the utility tax and solar industry, and how City alignment of these revenue sources compares with other cities. Councilmember Delgleize provided thoughts on development, questioning that with over 700 underperforming strip smalls, is the City in a position to incentivize redevelopment? She also discussed correlation between bringing new business, new development, and economic opportunity into the City. She recognized Goldenwest College’s efforts to train certain market employees, and wondered about how to share this information with employers. She also questioned the availability of CARES Act funding for existing businesses, and discussed business retention and community support for businesses. Mr. Beck stated that infrastructure is the building block of economic development, and asked Council to look at housing and economic development as a collective: • How can the dollars generated help meet Council priorities (fiscal stability)? • Housing as an indirect tool of development • Zoning and land use affect property values • How do opportunities diversify? • How do ideas receive support through infrastructure? • How do you support people, cars, and bicyclists? Mayor Carr challenged the Council to think big about how to collectively attract new businesses: • Revitalizing corridors • Business incubators • What is the next wave of business the City can take advantage of? • How can the City attract the talent of graduates from three (3) universities close in proximity? Mayor Carr reiterated the Council’s role as decision makers that clear opportunities for growth, and questioned how does the City engage with the State to ask for assistance in meeting its goals? • The City entity does not have to build, but can encourage those that want to build to do so through policy o how can middle-class housing be addressed? o how can the City be supportive of housing for seniors or veterans? • Opportunity for cannabis revenue Councilmember Moser spoke to environmental and climate sustainability goals and the need to explore eco-friendly opportunities. Councilmember Kalmick spoke to zoning opportunities for economic and climate sustainability. Councilmember Delgleize spoke to the success of working partnerships within the County, citing Springfield Housing as an example. 36 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 11 Mr. Beck concurred with opportunities for partnerships, and questioned the City’s use of current assets for partnerships and public-private partnerships (P3s). Mayor Carr asked about Long Beach Measure A and Blue Line funding, and Mr. Beck clarified there is no correlation. Councilmember Kalmick spoke to the lack of broadband access in certain areas (digital divide); smart cities partnership and opportunities for the transportation sector; access in public facilities; and, AB34. Mr. Beck called attention to the infrastructure improvement plan. Mayor Carr called for strategizing on tourism and the hospitality industry, ridesharing, and expanding the touristic experience beyond downtown. Councilmember Moser spoke to park development and funding; strategizing in-lieu fees; activating the volunteer community; irrigation improvements; reforesting; plants; installing trash receptacles; resurfacing; and continued research efforts on grant funding. Mr. Beck transitioned discussion to COVID-19 response: • Where will the City will be in 6 months to a year? • How will the City continue to spread information? • Is there a data pipeline? • Access to testing? • Access to vaccines? Mayor Carr opined that the City has done more work around COVID-19 than most cities, and informed Council that a Town Hall series on vaccines in the works. She stated it is imperative for the City to be a source of reliable information, called for continuous support for small businesses, continued conversation on rent moratorium, and stewards for the City, called for the Council to be a beacon of example by washing hands, staying home, and wearing a mask. Mr. Beck suggested the Council remember they have the opportunity to flex codes and regulations for allowing business operations in accordance with the Governor’s mandate. Mr. Ortiz emphasized need to assist small businesses with opening back up. Mr. Beck reminded the Council to keep in mind budget and resources when discussing and planning for priorities, and rely on the City Manager and staff to provide feedback on Council focus and direction. Mr. West welcomed questions before turning to Mr. Chi for closing remarks. Mr. Chi informed Council that a follow-up report will come, and emphasized that the W orkshop helps the team understand Council focus and priorities. Mayor Carr asked for closing comments by Council. Receiving none, the Workshop was adjourned at 2:51 PM to the next regular meeting of January 19, 2021. 37 Strategic Planning Workshop Meeting Minutes January 5, 2021 – Page 12 INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov ___________________________________ City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach ATTEST: ________________________ City Clerk _______________________________ Mayor 38 Minutes City Council/Public Financing Authority City of Huntington Beach Monday, February 1, 2021 6:00 PM — Virtual Meeting Huntington Beach, California 92648 A video recording of the 6:00 PM portion of this meeting is on file in the Office of the City Clerk, and archived at www.surfcity-hb.org/government/agendas/ 5:00 PM — VIRTUAL ZOOM WEBINAR LOCATION CALLED TO ORDER — 5:08 PM ROLL CALL Present: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize Absent: None ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS ON CLOSED SESSION ITEMS (Received After Agenda Distribution) — None PUBLIC COMMENTS PERTAINING TO CLOSED SESSION ITEMS (3 Minute Time Limit) - None RECESSED TO CLOSED SESSION — 5:11 PM A motion was made by Carr, second Delgleize to recess to Closed Session for Items 2 - 4, plus New Item *21-108. With no objections, the motion carried. CLOSED SESSION ANNOUNCEMENT(S) 1. 21-104 Mayor Carr announced: Pursuant to Government Code § 54957.6, the City Council takes this opportunity to publicly introduce and identify designated representatives: Oliver Chi, City Manager, and Travis Hopkins, Assistant City Manager, who will be participating in today’s Closed Session discussions regarding labor negotiations with: Huntington Beach Municipal Teamsters (HBMT) and Management Employees’ Organization (MEO). CLOSED SESSION 2. 21-086 CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION. Initiation of Litigation Pursuant to Paragraph (4) of Subdivision (d) of Section 54956.9: Number of cases, one (1) - Appeal of Southern California Association of Governments 39 Council/PFA Regular Minutes February 1, 2021 Page 2 of 20 (SCAG) Final Regional Housing Needs Assessment (RHNA) Methodology for the Sixth Housing Element Cycle. 3. 21-087 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION. (Paragraph (1) of subdivision (d) of Section 54956.9). Name of case: Brewster (Terri Lynn) v. City of Huntington Beach; OCSC Case No. 30-2020-01160094. 4. 21-088 CONFERENCE WITH LABOR NEGOTIATORS (Gov. Code section 54957.6.) Agency designated representatives: Oliver Chi, City Manager and Travis Hopkins, Assistant City Manager. Employee Organizations: Huntington Beach Municipal Teamsters (HBMT) and Management Employees’ Organization (MEO). *New 21-108 CONFERENCE WITH LEGAL COUNSEL- Name of case: City of Huntington Beach v. (Added 1/29/21) State of California, et al; OCSC Case No. 30-2019-01044945 6:00 PM - COUNCIL CHAMBERS RECONVENED CITY COUNCIL/PUBLIC FINANCING AUTHORITY MEETING — 6:21 PM ROLL CALL Present: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize Absent: None PLEDGE OF ALLEGIANCE — Led by Mayor Pro Tem Ortiz INVOCATION In permitting a nonsectarian invocation, the City does not intend to proselytize or advance any faith or belief. Neither the City nor the City Council endorses any particular religious belief or form of invocation. 5. 21-103 Janet Ewell, Church of Jesus Christ of Latter-Day Saints and Member of the Greater Huntington Beach Interfaith Council CLOSED SESSION REPORT BY CITY ATTORNEY — City Attorney Gates announced that in the case of City of Huntington Beach v. State of California, OCSC Case No. 30-2019-01044945; regarding the City's challenge to recent new housing laws known as SB 35, SB1333, SB 166, and AB 101; was brought before City Council in Closed Session. A Motion to Appeal last week’s adverse court ruling failed by a vote of 2-5 (Kalmick, Carr, Posey, Moser, and Delgleize – No). AWARDS AND PRESENTATIONS 6. 21-090 Mayor Carr recognized Black History Month throughout the month of February 2021 Mayor Carr announced that each year the U. S. celebrates February as Black History Month to honor the historical achievements of African-American leaders who have introduced bold ideas that have improved our communities and enriched our culture. Mayor Carr described this as a time to acknowledge local leaders who bring awareness of African-American culture and diversity, and introduced Vashia Rhone, Chair, Human Relations Task Force, who described some of the ways diversity is celebrated in 40 Council/PFA Regular Minutes February 1, 2021 Page 3 of 20 Huntington Beach through education and understanding via a video, and announced the Cultural Cinema Showcase: Black History Month which runs from February 5th – 7th, with the Q & A Panel on February 7th at 2:30 PM online. Mayor Carr presented a Proclamation to recognize the Human Relations Task Force, and Ms. Rhone thanked the Council for the recognition and honor. 7. 21-091 Mayor Carr presented information about the City’s various Town Hall Series on topics including COVID-19, Community Choice Energy, and Homelessness Mayor Carr presented a PowerPoint communication titled Virtual Town Hall Series, with slides entitled Candid Conversations About COVID-19 (2), COVID-19 en Español, HB Homeless Solutions, HB Community Choice Energy, Central Park Public Art and HBTV, and described the on-going effort to keep residents informed and engaged. ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) Pursuant to the Brown "Open Meetings" Act, City Clerk Robin Estanislau announced supplemental communications received by her office following distribution of the Council Agenda packet: City Manager’s Report #9 (21-094) Two (2) email communications regarding COVID-19. Consent Calendar #12 (21-042) Inter-Department Memo submitted by Robin Estanislau, City Clerk, regarding the clarification of an error on the January 19, 2021 regular meeting minutes. #14 (21-101) Letter of support for the Federal Communications Commission’s Emergency Broadband Benefit Program submitted by Mayor Kim Carr. #14 (21-101) Three (3) email communications regarding the City’s involvement in state and national politics. #15 (21-099) One (1) email communication regarding reduced parking requirements. #20 (21-076) One (1) email communication regarding Magnolia Tank Farm. Administrative Items #21 (21-085) Forty (40) email communications received regarding the City’s membership in the Orange County Power Authority (OCPA), Community Choice Energy (CCE) Joint Power Authority (JPA). Councilmember Items #23 (21-102) Four hundred seventy-two (472) MyHB comments and email communications received by 2:00pm regarding the proposed No Confidence Vote in Mayor Pro Tem Tito Ortiz. *Comments received after the 2:00pm deadline will be made part of the record on Tuesday, February 2, 2021. 41 Council/PFA Regular Minutes February 1, 2021 Page 4 of 20 PUBLIC COMMENTS (3 Minute Time Limit) — 58 Speakers via Zoom The number [hh:mm:ss] following the speakers' comments indicates their approximate starting time in the archived video located at http://www.surfcity-hb.org/government/agendas. Caller #436, Dave, a resident of Huntington Beach, was called to speak and stated his opposition to Councilmember Item No. 23 for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:32:00) Gina Clayton-Tarvin, long-time resident of Huntington Beach and Clerk, Ocean View School District Board of Trustees, was called to speak and described the successful effort to provide safe in-classroom teaching, and provided her support for Councilmember Item No. 23 for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:35:37) Eva Weisz was called to speak and stated her opposition to Councilmember Item No. 23 for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:38:59) Debbi Parrott was called to speak and stated her support for Councilmember Item No. 23 for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:42:23) Carol, a healthcare worker at an Orange County hospital, was called to speak and stated her support for Councilmember Item No. 23 for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:44:05) Cherie Schenck, a resident of Huntington Beach, was called to speak and stated support for Councilmember Item No. 23 for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:47:19) Mira Dermendjieva, a resident of Huntington Beach and Emergency Medicine Pharmacist, was called to speak and stated support for Councilmember Item No. 23 for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:49:58) David Martin was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:53:20) Russ Neal, a resident of Huntington Beach, was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:56:33) Lisa Marquise, a resident of Huntington Beach, was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (00:57:52) Claire Ambrosio, a resident of Huntington Beach, and an attorney with an LLM degree in Healthcare, was called to speak and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:01:13) Katie, a life-long resident of Huntington Beach, was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:03:32) 42 Council/PFA Regular Minutes February 1, 2021 Page 5 of 20 Spencer Kelly, a resident of Huntington Beach, was called to speak and stated his support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:06:43) James Michalski, a 25-year resident of Huntington Beach, was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:08:48) Nick Taurus was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:12:03) B Sansone was called to speak, but the speaker identified as Ms. Myers, a resident of Huntington Beach, stated her support for Administrative Item No. 21 (21-085), Option A, to maintain membership in the Orange County Power Authority Community Choice Energy Joint Power Authority. (01:13:51) Bethany Webb, a 40-year resident of Huntington Beach and Founding Member of Huntington Beach Huddle, was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:15:36) Justin Frazier, a veteran and Black Lives Matter activist, was called to speak and stated his support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:18:47) Frank Zappia, a 35-year resident of Huntington Beach, was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:21:33) Eli Pascal, a 6-year resident of Huntington Beach, was called to speak and stated support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:24:58) Megan Merid, a Huntington Beach homeowner, was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:27:59) Libby Frolichman was called to speak and stated her support for Administrative Item No. 21 (21-085), Option A, to maintain membership in the Orange County Power Authority Community Choice Energy Joint Power Authority, and support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:30:06) Bee Nicole, a resident of Huntington Beach, was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:32:33) Gail Bryson, was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:34:34) 43 Council/PFA Regular Minutes February 1, 2021 Page 6 of 20 Jaimie Moore, an educator living in Huntington Beach, was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:36:02) Dave Sullivan, 54-year resident of Huntington Beach and former Mayor and City Councilmember, was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:38:22) Caller #260, Michelle Laughlin, a resident of Huntington Beach, was called to speak and stated her concerns regarding illegal street racing and exhaust systems, which impact parts of Huntington Beach and create very unsafe situations, and asked that City Council share the plan of action to address these issues. (01:41:42) Caroline Winnik was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:43:23) Caller #876, Kimo Gandal, a resident of Huntington Beach and Chairman Emeritus, College Republicans at UCI, was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:45:34) Tim Geddes, a 30-year plus resident of Huntington Beach and high school teacher, was called to speak and stated his support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:48:52) Daniel Pankratz was called to speak and stated his support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:51:09) John, a 22-year Army Ranger veteran who moved to California in 2012, was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:52:43) Hoiyin Ip, Sierra Club Member, was called to speak and stated her support for Administrative Item No. 21 (21-085), Option A, to maintain membership in the Orange County Power Authority Community Choice Energy Joint Power Authority. (01:55:56) Caller #133, Amory Hanson, a City Council Candidate in 2022 and member of the Historic Resources Board, was called to speak and stated his support for Councilmember Item No. 22 (21-096) regarding a temporary ordinance that limits fees paid by restaurants to third-party delivery services during the COVID-19 pandemic. (01:57:16) Steve was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (01:58:45) Caller #870, Joseph, was called to speak and stated his support for Mayor Pro Tem Ortiz, and shared his opinions regarding some of the comments made by previous callers. (02:00:31) Ann, a microbiologist and 54-year resident of Huntington Beach, was called to speak and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:02:28) 44 Council/PFA Regular Minutes February 1, 2021 Page 7 of 20 Bob Norland, businessman and life-long resident of Huntington Beach, was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:04:26) Ms J, a resident for about 10 years, was called to speak and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:05:56) Eric Silkenson was called to speak and stated his interest in being involved in an effort to replace a great Huntington Beach landmark, the tree at Main Street and Utica Avenue which came down in the recent storm, and suggested possible ideas for a replacement. (02:08:36) Caller #616, Kim, a 14-year resident of Huntington Beach, was called to speak and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:11:06) Caller #196 was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:13:32) Denise Rede was called to speak and stated that her significant other, Brad Rede, a 32-year resident and veteran, would share comments on their behalf. Unfortunately, their phone connect lost sound. (02:17:09) Anne Elizabeth was called to speak and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:18:23) Sarah was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. She also stated support for Mr. Silkenson's previous suggestions to replace the tree that was recently uprooted at Main Street and Utica Avenue. (02:22:03) Caller #598, Susan, a resident of Huntington Beach, was called to speak and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:23:37) Call-In User #1, Miriam, a 21-year+ resident and homeowner in Huntington Beach, was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:26:34) Scott Rothert, life-long resident of Huntington Beach, was called to speak and requested that Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz be tabled until Councilmembers make an honest effort to resolve their differences and stand behind their unanimous decision to appoint Mr. Ortiz as Mayor Pro Tem in December 2020. (02:29:39) Caller #294, Tia, was called to speak and stated her support for Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:32:14) 45 Council/PFA Regular Minutes February 1, 2021 Page 8 of 20 Caller #171, Steve, a resident of Huntington Beach, was called to speak and stated his support for Mayor Pro Tem Ortiz, and encouraged the Council to resolve their issues and focus on serving and seeking solutions rather than causing further division. (02:36:17) Barbara Klein was called to speak and requested that Council conduct safe, in-person vs. virtual meetings, and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:37:21) Caller #460, Casey McKeon, was called to speak and stated his support for Administrative Item No. 21 (21-085), Option B, to withdraw from the Orange County Power Authority, and direct staff to complete all requisite documents necessary to terminate our participation in the CCE JPA. Mr. McKeon also stated opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:40:50) Jose Trinidad Castaneda was called to speak and stated his support for Administrative Item No. 21 (21- 085), Option A, to maintain membership in the Orange County Power Authority Community Choice Energy Joint Power Authority. (02:44:07) Liberty Belle was called to speak and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:44:32) Becky Ettinger, a homeowner in Huntington Beach, a Registered Nurse, and Professor of Nursing with degrees in Community Health, was called to speak and stated her support for Mayor Pro Tem Ortiz, and thanked all the Councilmembers for serving. (02:45:16) Courtney S. was called to speak and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:48:13) Martha, a 30-year resident of Huntington Beach, was called to speak and stated her opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:50:29) Ayn Craciun, OC Clean Power Community Group Volunteer, was called to speak and stated her support for Administrative Item No. 21 (21-085), Option A, to maintain membership in the Orange County Power Authority Community Choice Energy Joint Power Authority. (02:53:15) Galaxy A21 was called to speak and stated his opposition to Councilmember Item No. 23 (21-102) for consideration of a No Confidence Vote in Mayor Pro Tem Ortiz. (02:54:53) COUNCIL COMMITTEE — APPOINTMENTS — LIAISON REPORTS, AB 1234 REPORTING, AND OPENNESS IN NEGOTIATIONS DISCLOSURES Councilmember Kalmick reported attending an Orange County Power Authority (OCPA) meeting where mainly administrative tasks were addressed. He also attended an Orange County Sanitation District (OCSD) meeting for discussions on expansion of the groundwater replenishment system, met with Curt Pringle & Associates on a potential project in Huntington Beach, attended an Orange County Council of Governments (OCCOG) meeting as well as an audio meeting of the Brookfield Town Home project. 46 Council/PFA Regular Minutes February 1, 2021 Page 9 of 20 Councilmember Delgleize announced her appointment of Stacy Taylor to the Citizens Infrastructure Advisory Board (CIAB). Councilmember Posey reported that Orange County Vector Control is looking for a new headquarters building and has evaluated one building. Councilmember Peterson thanked Dick Theil who recently retired from the Community Services Commission after six years of service, and announced Pat Burns as his new appointee. Councilmember Moser reported also attending the Brookfield Town Home project meeting, as well as the virtual Town Hall meeting with the Brookfield community, a meeting of the Greater Huntington Beach Interfaith Council, and a meeting of the Human Relations Task Force. Mayor Carr reported attending a meeting of the Intergovernmental Relations Committee (IRC), a Communications meeting to discuss a new logo for HBTV and to consider additional programming options, a meeting of the Mobile Home Advisory Board, as well as Orange County Council of Governments (OCCOG) Board meeting where it was noted that Governor Newsom has budgeted $4M – $5M for a Housing Accountability Unit to monitor City Council and board meetings to ensure that cities and counties are meeting their housing production requirements. 8. 21-083 Approved Amendment to the 2021 Council Liaison List Mayor Carr made a motion to approve the amendment to the 2021 Council Liaison List to make Councilmember Posey the Primary and herself as the Alternate for the Orange County Council of Governments (OCCOG). The City Clerk called for objections. Seeing none, the motion carried by the following vote: AYES: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: None CITY MANAGER’S REPORT 9. 21-094 Update of the City COVID-19 Response Plan and Vaccination Update City Manager Oliver Chi and Fire Chief Scott Haberle presented a PowerPoint communication entitled COVID-19 Update with slides titled: COVID-19 Situational Overview, Widespread Tier Restrictions, US Totals, 7-Day Average Lines, California, Currently Hospitalized with COVID-19, Change is Hospitalizations, Orange County (3), Huntington Beach, Summary, Situation for Orange County, Orange County ICU Status, HBFD EMS Response Impacts, Orange County Vaccination Status, Current Vaccine Eligibility, and Vaccine Registration. 10. 21-098 Downtown Outdoor Dinning Program Update City Manager Chi presented a PowerPoint that included slides titled Downtown Dining - Adjustment in Hours, and Questions? Councilmember Posey thanked City Manager Chi and Police Chief Haberle for working with the Downtown business owners to extend the hours of operation. 47 Council/PFA Regular Minutes February 1, 2021 Page 10 of 20 Councilmember Moser expressed her concerns about elderly community members who may not be mobile and therefore unable to easily get to a vaccination site, or those without an email address to even set up an appointment. City Manager Chi shared that the County is coordinating volunteer opportunities through registration at oneoc.org for people wanting to assist with these types of situations. He also reminded everyone that vaccine supply is currently not available to meet the demand throughout the State, and there will be an effort as vaccine supply increases to make vaccines available through local clinics, doctor offices, and targeted outreaches to the most impacted communities. CITY TREASURER’S REPORT 11. 21-051 Received and Filed the City Treasurer’s December 2020 Quarterly Investment Summary Report City Treasurer Backstrom presented a PowerPoint communication entitled: Quarterly Investment Report with slides titled Economic and Market Overview, Interest Rates - U.S. Treasury Rates, Portfolio Summary, Investments by Type, Monthly Activity - Quarterly Activity, Portfolio Earnings, Selected Investment Policy Compliance Requirements, and Summary. A motion was made by Moser, second Delgleize to receive and file the City Treasurer's Quarterly Investment Report for December 2020, pursuant to Section 17.0 of the Investment Policy of the City of Huntington Beach. The motion carried by the following vote: AYES: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: None CONSENT CALENDAR Councilmember Kalmick pulled Consent Calendar #14, and Councilmember Peterson pulled Items #15 and #20 for further discussion. 12. 21-042 Approved and Adopted Minutes A motion was made by Delgleize, second Posey to approve and adopt the City Council/Public Financing Authority regular meeting minutes dated January 19, 2021, as written and on file in the office of the City Clerk as amended by Supplemental Communication. The motion carried by the following vote: AYES: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: None 13. 21-063 Adopted Resolution No. 2021-08 approving the 2021 Investment Policy A motion was made by Delgleize, second Posey to adopt Resolution No. 2021-08, "A Resolution of the City Council of the City of Huntington Beach Approving the Statement of Investment Policy 2021." 48 Council/PFA Regular Minutes February 1, 2021 Page 11 of 20 The motion carried by the following vote: AYES: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: None 14. 21-101 Approved positions on Local, State and Federal Issues, as recommended by the City Council Intergovernmental Relations Committee (IRC) Councilmember Kalmick pulled this item to thank staff and note his support for the Federal Communications Commission's Emergency Broadband Benefit Program for low-income people to subsidize their internet connection fees and purchase of network equipment. Councilmember Posey shared his opinion that approval of Item A), Resolution No. 2021-11 requires responsibility for exercising local control. He further stated his support for Item C) because it includes an exemption for tourism. Councilmember Peterson stated his opposition to Item C) because local technology currently uses safe horizontal drilling from on-shore. A motion was made by Carr, second Posey to adopt Resolution No. 2021-11, "A Resolution Expressing Support for Actions that will Further Strengthen Local Governance and Authority Over Housing-Related Issues in Huntington Beach"; and/or approve a letter of support for the Federal Communications Commission's Emergency Broadband Benefit Program. The motion carried by the following vote: AYES: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: None A motion was made by Carr, second Posey to approve a letter in opposition to oil and gas drilling off Southern California coast through the Bureau of Ocean Energy Management's National Outer Continental Shelf Oil and Gas Leasing Program. The motion carried by the following vote: AYES: Kalmick, Carr, Posey, Moser, and Delgleize NOES: Peterson, Ortiz 15. 21-099 Adopted the 2021 City Council Work Plan Councilmember Peterson stated he is against some of the objectives, and therefore will not support the item now but will address specific concerns when items return to Council. City Manager Chi clarified that approving this item does not approve the objectives, and stated they will return to Council as either Councilmember or Administrative items for individual consideration Mayor Carr stated that the Strategic Planning objectives is a wish list of directives for top priority, and the objectives will be returning as Councilmember Items. 49 Council/PFA Regular Minutes February 1, 2021 Page 12 of 20 Councilmember Posey stated that the Strategic Planning Workshop provides an opportunity to meet and bond with staff members. A motion was made by Carr, second Posey to adopt the 2021 City Council Work Plan. The motion carried by the following vote: AYES: Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: Peterson 16. 21-089 Approved the COVID-19 Small Business Micro Grant Program A motion was made by Delgleize, second Posey to approve the COVID-19 Small Business Micro Grant Program. The motion carried by the following vote: AYES: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: None 17. 21-056 Approved Agreement for Professional Engineering and Environmental Consulting Services between the City of Huntington Beach and Moffatt & Nichol for the Davenport Bridge Project in Huntington Harbour A motion was made by Delgleize, second Posey to approve and authorize the Mayor and City Clerk to execute the Agreement for Professional Engineering and Environmental Consulting Services between the City of Huntington Beach and Moffatt & Nichol in the amount of $487,314.70. The motion carried by the following vote: AYES: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: None 18. 21-061 Approved 3–Year Professional Services Contracts for As-Needed Environmental Engineering Services with Geosyntec Consultants, Inc., Environmental Engineering Contracting, Inc. (EEC Environmental), Huitt-Zollars, Inc., and CWE A motion was made by Delgleize, second Posey to approve and authorize the Mayor and City Clerk to execute a 3–year (with optional 1 year extension), not-to-exceed $600,000 Professional Services Contract between the City of Huntington Beach and Geosyntec Consultants, Inc. for As-Needed Environmental Engineering Services; and, approve and authorize the Mayor and City Clerk to execute a 3–year (with optional 1 year extension), not-to-exceed $600,000 Professional Services Contract between the City of Huntington Beach and Environmental Engineering Contracting, Inc. for As-Needed Environmental Engineering Services; and, approve and authorize the Mayor and City Clerk to execute a 3–year (with optional 1 year extension), not-to-exceed $600,000 Professional Services Contract between the City of Huntington Beach and Huitt-Zollars, Inc. for As-Needed Environmental Engineering Services; and, approve and authorize the Mayor and City Clerk to execute a 3–year (with optional 1 year extension), not-to-exceed $600,000 Professional Services Contract between the City of Huntington Beach and CWE for As-Needed Environmental Engineering Services. 50 Council/PFA Regular Minutes February 1, 2021 Page 13 of 20 The motion carried by the following vote: AYES: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: None 19. 21-073 Approved Final Tract Map No. 18068 and Subdivision Agreement for the Shorehouse Residential Subdivision by C3 DLG 414 Main Street, LLC at 414 – 424 Main Street A motion was made by Delgleize, second Posey to approve Final Tract Map No. 18068 and accept the offer of easements pursuant to findings and requirements (Attachment No. 1); and, approve and authorize the Mayor and City Clerk to execute the Subdivision Agreement by and between the City of Huntington Beach and C3 DLG 414 Main Street, LLC, Inc. (Attachment No. 6); and, accept Faithful Performance Bond No. PB02497501239, Labor and Material Bond No. PB02497501239 and Monument Bond No. PB02497501240 as sureties for the installation of the subdivision's required public improvements and survey monumentation (Attachment No. 7); and, instruct the City Clerk to file the respective bonds with the City Treasurer and notify the Surety, Philadelphia Indemnity Insurance Company of this action. The motion carried by the following vote: AYES: Peterson, Kalmick, Ortiz, Carr, Posey, Moser, and Delgleize NOES: None 20. 21-076 Adopted Ordinance No. 4225 (Zoning Map Amendment No. 17-001), and Ordinance No. 4226 (Development Agreement No. 19-001) — Magnolia Tank Farm Approved for introduction 1/19/2021 — Vote: 5–2 (Peterson, Carr — No) Councilmember Peterson pulled this item to ensure he is recorded as a "No" vote. Mayor Carr also stated her "No" vote. A motion was made by Posey, second Delgleize to adopt Ordinance No. 4225, "An Ordinance of the City of Huntington Beach Amending the Huntington Beach Zoning and Subdivision Ordinance to Rezone the Real Property Generally Located on the Westside of Magnolia Street at Banning Avenue from PS–O–CZ (Public-Semipublic — Oil Production Overlay — Coastal Zone Overlay) to SP–18–CZ (Specific Plan — Coastal Zone Overlay)(Zoning Map Amendment No. 17–001);" and, adopt Ordinance No. 4226, "An Ordinance of the City of Huntington Beach Adopting a Development Agreement By and Between the City of Huntington Beach and SLF–HB Magnolia, LLC (Developer) (Development Agreement No. 19–001)." The motion carried by the following vote: AYES: Kalmick, Posey, Moser, and Delgleize NOES: Peterson, Ortiz, and Carr ADMINISTRATIVE ITEMS 21. 21-085 Approved Maintaining a Membership with the Orange County Power Authority (OCPA), a Community Choice Energy (CCE) Joint Power Authority (JPA) 51 Council/PFA Regular Minutes February 1, 2021 Page 14 of 20 City Manager Chi presented a PowerPoint communication entitled Community Choice Energy, with slides titled: What Is A CCE?, CCE Background in HB, OCPA Membership Considerations, MRW Findings: OCPA is a Viable CCE JPA, OCPA vs. SCE Rates: Less by Between $.01 - $.03 /kWh, Key Risks Identified for OCPA, OCPA Offers Tangible Financial Benefits, Mitigated Risks, City Council Determination Regarding Membership in OCPA, and Questions. Councilmember Delgleize confirmed with Orange County Power Authority CEO Brian Probolsky that the City of Irvine is paying the $2.5M start-up costs, as well as cash collateral for future funding, and the $2.5M commitment has been paid. CEO Probolsky also confirmed that all participating cities will have one seat and Irvine will have two seats because of their initial financial commitment, cities are not creating another city bureaucracy by participating, and currently OCPA is meeting twice a month to process the initial administrative items, but future meetings will be held once a month. Councilmember Delgleize described the experience of Marin County over the past 11 years and their use of generated funding to provide a lower price for energy purchases through focusing on preventing greenhouse gas. Consultant Gary Saleba stated that some counties focus on rate savings, while others focus on preventing greenhouse gas. Councilmember Posey verified that consumers will have a 60-day opt-out notice before the switch, another 60-day opt-out time after the switch, or a total of 120 days to choose to opt out. Councilmember Posey stated that positive news is coming regarding some large utility users who are in discussions regarding the competitive advantage that CCE can provide. Councilmember Posey and Consultant Saleba discussed how CCE can borrow the money to purchase power at about four percent (4%) whereas Edison pays about eight percent (8%), and the overhead costs for CCE with two or three employees compared to Edison's hundreds doing product procurement, are much less. Those CCE savings are passed on in the form of cheaper rates for consumers. CEO Probolsky stated CCE expects to be fully staffed with eleven positions in a few years. Councilmember Peterson and Consultant Saleba discussed that the two consumer opt-out options of 60 days will not incur a cost for the consumer; however, outside of those timeframes the consumer is required to provide a 6-month opt-out notice to the CCE and can opt back in, with a 12-month commitment, for $5 per month fee for residential, or approximately $25 per month fee for commercial accounts. Councilmember Peterson stated his opposition to maintaining membership with the Orange County Power Authority (OCPA). Mayor Carr and CEO Probolsky discussed the legal communication requirements to notify consumers of their options. CEO Probolsky stated that the outreach plan is being developed and expected to start in about 9 months. Attorney Ryan Baron stated that the customer enrollment process, including communication schedule, has to be approved by the Public Utilities Commission (PUC). Councilmember Peterson, CEO Probolsky and Consultant Saleba discussed the process for a city that may decide in the future to withdraw from the Orange County Power Authority, which would require a 180–day notice. It was explained that one city which pulled out of a CCE was able to sell their pre- purchased power options for a profit on the open market. Councilmember Delgleize and Consultant Saleba discussed a statement made by a community member that the real cost for electricity is moving it through the transmission lines and it is hard to believe that savings of $200/year can be realistic for the residential consumer. Consultant Saleba explained that the 52 Council/PFA Regular Minutes February 1, 2021 Page 15 of 20 wire charge is the same whether or not you are a CCE customer; however, the power supply cost is the component that will be reduced for the CCE customer. A motion was made by Posey, second Delgleize to maintain membership in the Orange County Power Authority Community Choice Energy Joint Power Authority. The motion carried by the following vote: AYES: Kalmick, Carr, Posey, Moser, and Delgleize NOES: Peterson, and Ortiz COUNCILMEMBER ITEMS 22. 21-096 Approved Item Submitted by Councilmember Moser — Directed staff to prepare a temporary ordinance that limits the fees paid by restaurants to third party delivery services during the COVID-19 pandemic Councilmember Moser provided a brief history of third-party delivery services, stated some are charging restaurants up to 30% since the pandemic forced restaurant closures, and a temporary ordinance would place a 15% cap on fees paid by restaurants and a 5% cap on non-delivery fees paid by customers until current COVID-19 restrictions are lifted for indoor and outdoor dining. Councilmembers Delgleize and Moser discussed how the delivery services have responded to similar ordinances in other cities, and Councilmember Moser explained that restaurants typically increase menu prices to cover delivery service fees which are activated when apps are used for restaurant orders. Mayor Pro Tem Ortiz thanked Councilmember Moser for bringing this item forward. Councilmember Peterson explained that he cannot support this item in a free market society, as he does not think it is not appropriate to take from one business to give to another business. He added that the restaurants negotiate their third-party delivery service fees, usually based on volume. Councilmember Moser responded by stating that the four major delivery services (DoorDash, Grubhub, Uber Eats and Postmates) reported nearly twice the revenue from April to September 2020 compared to the year prior, and she doesn't believe the very small businesses have the volume to be able to negotiate rates. Councilmember Peterson stated he is not in favor of making even temporary rules based on a certain industry's profits, and he is still opposed to this item. Councilmember Kalmick explained that the identified third-party delivery companies are all owned by massive private hedge funds, they are running every dollar out of the pandemic they possibly can, and they don't care if Huntington Beach restaurants can't afford to stay open because they don't live in Huntington Beach. He further stated his belief that this is one way to have a substantial positive impact for local businesses. Councilmember Posey stated his position that government should not be in the business of price control, and he believes prices are best controlled through competition, therefore he cannot support this item. 53 Council/PFA Regular Minutes February 1, 2021 Page 16 of 20 Mayor Carr and Councilmember Moser discussed that reports from other cities that have passed similar ordinances do not show that any of the delivery services left their area. Councilmember Delgleize suggested the proposed ordinance have a specific ending date. City Manager Chi stated that if Council decides to move forward it would be best to link the expiration date with either the Governor safely re-opening the economy, or when the local emergency declaration ends. Councilmember Kalmick confirmed with City Manager Chi that the final decision on how long the temporary ordinance would be in effect will be decided when the proposed ordinance is brought back to Council. A motion was made by Ortiz, second Moser to recommend that the City Council direct staff to prepare a temporary ordinance that places a 15% cap on fees paid by restaurants and a 5% cap on non-delivery fees paid by customers until current COVID-19 restrictions on both indoor and outdoor dining are lifted. The motion carried by the following vote: AYES: Kalmick, Ortiz, Carr, Moser, and Delgleize NOES: Peterson, and Posey 23. 21-102 CONSENSUS REACHED TO TABLE Item Submitted by Mayor Carr, Councilmember Posey, and Councilmember Kalmick — Consideration of a No Confidence Vote in Mayor Pro Tem Ortiz, and Removing him from the Mayor Pro Tem Leadership Role Mayor Carr introduced this item by describing the honor and dignity her position requires every day to serve the community, and described how she took advantage of every learning opportunity when first elected because she had never been a Council Member before. She described her ambivalence to nominate newly elected Councilmember Ortiz as Mayor Pro Tem, but shared that a personal meeting with him beforehand convinced her that his heart was in the right place regardless of having no previous City board or commission service, and she thought he would be capable of making a positive impact for the City. Mayor Carr stated that politics plays no part in her opinion of Mayor Pro Tem Ortiz, and that her focus is on what’s important for the citizens of Huntington Beach. She shared her impression that Mayor Pro Tem Ortiz appears to be more concerned about his personal philosophy rather than what is best for the City. She also stated need for a Mayor Pro Tem she can count on to represent her, following the mandated safety protocols during this pandemic and based on his comments to the press, the community and on social media, she has lost faith in his ability to truly represent the City. She stated that this action was brought forth as a result of the texts, phone calls and emails she received from people in the community who were also concerned about his actions. Councilmember Kalmick stated this action has nothing to do with politics, but is about stepping up to lead and use good judgment in making decisions while representing all residents of Huntington Beach. Councilmember Kalmick described making a phone call to Mayor Pro Tem Ortiz to set up a meeting to strategize on how they could work together for the benefit of the City and stated that phone call was never returned. Councilmember Kalmick further stated the Council didn't want to suspend Resolution No. 6320 (parliamentary procedure for selection of a Mayor and Mayor Pro Tem), and put another Councilmember in the Mayor Pro Tem position because they had faith Councilmember Ortiz was up to the challenge. Councilmember Kalmick added that communication with fellow Councilmembers, and participating in what are sometimes long and boring meetings, are part of being an effective team member. He acknowledged the unique life perspective that Mayor Pro Tem Ortiz has and believes that 54 Council/PFA Regular Minutes February 1, 2021 Page 17 of 20 his voice is important, but his behavior has not matched what is required of someone who truly represents the whole City, including no evidence of his reaching out to fellow Councilmembers asking for their help to assist him in becoming a successful Mayor Pro Tem. Mayor Pro Tem Ortiz stated appreciation for the many messages of support from residents of Huntington Beach, and described some of the challenges he experienced while growing up in Huntington Beach, and his decision to not become a victim. He described how he worked hard to achieve his goals and objectives, including protecting Huntington Beach, along with many residents, when threatened by protesters this past summer. At that time, he realized he wanted to find a way to give back to his City, which led to his decision to run for City Council. He worked a non-stop campaign for three months to meet with thousands of residents and the residents rewarded his efforts by providing him with more votes than any other Council candidate in the City's political history. He discovered that his journey was encouraging to many Hispanics of all political parties that they too could achieve their political goals and aspirations, but unfortunately, he has also experienced repeated attacks because of the "political" interpretation of science which seems to vary, depending upon which state you live in. He stated that Huntington Beach has been criticized for many years for its lack of Hispanic representation on the City Council, but he feels there is an effort by certain members of the leadership team to disrespect his Council position. He expressed concerns about not being kept informed of important events in the last couple of months, and took it upon himself to have multiple meetings with Downtown business owners, concerned citizens and business leaders to resolve problems and discuss appropriate solutions to ensure he is properly informed and his vote on Council items represent the constituents. Despite the local and national efforts to silence and censor conservative voices, Mayor Pro Tem Ortiz stated his intentions to proudly continue representing Huntington Beach residents as Mayor Pro Tem. He expressed his belief that this City Council will do the right thing and not attempt to ignore the will of the greatest number of voters in Huntington Beach. He stated he is not perfect, has made mistakes, for which he apologized, and is attempting to learn how to best represent Huntington Beach. He stated he has never been a politician and was surprised to have Mayor Carr introduce herself to him as a Democrat. He described combativeness and fighting to survive his whole life, and he certainly did not expect the constant attacks he's received since becoming a Councilmember which he explained have kept him in a defensive mode. Councilmember Delgleize described the ways she reached out to learn about and understand the role of a Councilmember. She expressed her opinion that Mayor Pro Tem Ortiz is capable of and intent on contributing in positive ways, and because she wants to see him succeed, stated she has shared with him details via email regarding opportunities to learn for new Councilmembers. Councilmember Delgleize further described her efforts as Mayor to focus on ways to help Huntington Beach become a City of Kindness, and stated that the residents now want to see the same passion from him about doing what is best regarding the pandemic as he exhibited in the summer to protect the City from protesters. Councilmember Delgleize stated she would not be supporting the item tonight because Mayor Pro Tem Ortiz was duly elected, and stated her expectation that Mayor Pro Tem Ortiz will take a stand, wear a mask when required, and become the leader the residents want. Mayor Pro Tem Ortiz defended his social media postings regarding mask wearing by explaining that the information shared comes from people in the medical field, adding he is not posting lies. Councilmember Posey described several conversations he had with then City Council Candidate Ortiz where he advised him to analyze the budget and become familiar with the City Charter, and offered to help if he had any questions. After a successful election, Councilmember Posey stated he left a voice message asking for a meeting so they could get to know each other, and he never received a reply. 55 Council/PFA Regular Minutes February 1, 2021 Page 18 of 20 Councilmember Posey explained that the Mayor Pro Tem must be involved in the Economic Development and IRC meetings, as well as Agenda Review meetings, none of which Mayor Pro Tem Ortiz has attended. Councilmember Posey described the many opportunities he took to learn about his responsibilities as a new Councilmember, and his involvement in regional boards to become an effective Councilmember, and stated that Mayor Pro Tem Ortiz needs to get involved in these opportunities to become a truly effective and policy-making influencer. Councilmember Posey explained that the difference between a private citizen and a public servant is what you say and how you say it, and a Councilmember is supposed to be non-partisan. He also explained that he wears a mask out of respect for others, not because he believes or does not believe in wearing masks. Councilmember Posey made a motion to table the item for 6 weeks and to bring it back in the middle of March to re-evaluate if Mayor Pro Tem Ortiz has exhibited different actions that demonstrate his ability to serve effectively as Mayor Pro Tem. Councilmember Moser, a life-long resident of Huntington Beach, explained that her involvement in public service began a number of years ago when she became concerned about division at local and national levels. She explained her belief that effective leaders are committed to truth and fact, and wearing a mask demonstrates that commitment. She continued by explaining that a vote of no confidence as Mayor Pro Tem would not negate the fact that Mr. Ortiz was elected to the City Council. She also described opportunities to participate in activities that have helped her have a better understanding of her role as a Councilmember, and encouraged Mayor Pro Tem Ortiz to do the same. Councilmember Moser stated that she defines "common community values" mentioned by so many members of the public in their communications on this issue as honesty, personal responsibility, and protecting the health and safety of the community. She concluded by stating that if Mayor Pro Tem Ortiz agrees to do his best to support those core values, she will also vote to oppose this item. Councilmember Moser and Mayor Pro Tem Ortiz had further discussion on the summer's protest activities and clarified their differing opinions on the events and communications that led to Mr. Ortiz personally getting involved, and agreed to engage in future dialogue to help people better understand diversity of thoughts and ideas to provide opportunities for change and expansion of viewpoints. Councilmember Peterson expressed his opinion that Mayor Carr would have demonstrated leadership had she confronted Mayor Pro Tem Ortiz personally to address her concerns, versus a public spectacle taking hours of Council and public time. He further stated his opinion that each Councilmember has people who love them, and people who hate them but regardless, most people just want Council to focus on doing what is right for the City. Councilmember Peterson described his failure to return a phone call from Councilmember Kalmick requesting a social meeting, and his belief that it is up to each individual to decide for themselves whether or not to regularly schedule time with the City Manager as some have suggested Mayor Pro Tem Ortiz should be doing. Councilmember Peterson shared his opinion that this item should just be tabled with no stipulation to bring it back at a future date. Mayor Carr stated she would like to focus on her initial concerns about Mayor Pro Tem Ortiz being unavailable to fill in for her, and his inability to provide accurate, credible information as he has misrepresented himself and the City. She also claimed that Mr. Ortiz mischaracterized their initial introduction and her introducing herself as a Democrat, sharing that he failed to include the full context of the conversation about political partisanship and the importance of focusing on the City as a whole. 56 Council/PFA Regular Minutes February 1, 2021 Page 19 of 20 Mayor Carr provided support for Councilmember Posey's motion because she believes Mayor Pro Tem Ortiz can improve by using better judgment, being open to understanding opposing views, and becoming an honest and transparent Councilmember. Councilmember Peterson reiterated his opinion that the item be tabled indefinitely as he doesn't understand whose standards are going to be used to determine if Mayor Pro Tem Ortiz's actions measure up in the next six weeks, and that Mayor Carr can bring this issue back in the future if she believes it is the appropriate method. Councilmember Peterson further explained that virtual meetings prevent the typical conversations and sharing that previously happened with fellow Councilmembers at in-person meetings. Councilmember Posey advised Mayor Pro Tem Ortiz to make it a priority to review the White Paper information in the City Council Manual titled The Ethics of Speaking One's Mind and start by incorporating those practices and disciplines in his social media communications. Councilmember Posey stated his continued opposition to censuring, and added that there should be actionable results from successful communication which will be demonstrated if Mayor Pro Tem Ortiz is sharing, involved and dedicated to making Huntington Beach a better place. In his opinion, the phone is still an effective communication tool whether there are in-person meetings or not. Mayor Carr stated her hope that continued effort and dialogue to address the issues will not require another Councilmember Item in six weeks, and suggested tabling this item with the understanding that the authors can bring it back anytime in the future if necessary. Mayor Pro Tem Ortiz thanked everyone and stated he will work harder to be less defensive and more effective. Councilmember Posey reminded Mayor Pro Tem Ortiz that he is surrounded by experts with experience who are willing to assist and support him if he chooses to reach out to them. A substitute motion was made by Carr, seconded by Peterson, to table the item indefinitely. With no shared objections, a consensus was reached. COUNCILMEMBER COMMENTS (Not Agendized) Councilmember Moser encouraged everyone to go to the Human Relations Task Force website and sign up for the virtual Cultural Cinema Showcase which takes place, Friday, Saturday and Sunday, February 5th, 6th and 7th. Councilmember Delgleize announced that Tuesday, February 2, is the second day of the virtual Association of California Cities - Orange County (ACC-OC) Sacramento Advocacy trip from 9 to 11 AM. Mayor Carr announced she is moderating another virtual COVID-19 Vaccine Town Hall with Orange County Health Department. ADJOURNMENT — 12:07 AM on February 2, 2021, to the next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority on Tuesday, February 16, 2021, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov 57 Council/PFA Regular Minutes February 1, 2021 Page 20 of 20 __________________________________________ City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach and Secretary of the Public Financing Authority of the City of Huntington Beach, California ATTEST: ______________________________________ City Clerk-Secretary ______________________________________ Mayor-Chair 58 City of Huntington Beach File #:21-072 MEETING DATE:2/16/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Chris Slama, Director of Community & Library Services Subject: Approve, accept, and authorize the appropriation of a donation in the amount of $150,000 from the Friends of the Huntington Beach Public Library Statement of Issue: Donations over $100,000 from a single source within the same fiscal year need City Council appropriation approval. The Friends of the Huntington Beach Public Library is donating $150,000.00 to the Huntington Beach Public Library for books. Financial Impact: Donations will be appropriated to the proper expenditure account within the City’s Donation Fund 103. Recommended Action: Approve, accept, and authorize the appropriation of $150,000 donation from the Friends of the Huntington Beach Public Library during Fiscal Year 2020/21 for use to expand the collection. Alternative Action(s): Do not accept the donation and direct staff accordingly. Analysis: The Friends of the Huntington Beach Public Library has been generous and supportive of the Library, particularly during this difficult fiscal year. Earlier this fiscal year, in July 2020, they donated $100,000. Now they are donating an additional $150,000 bringing the annual total to $250,000. Their ongoing support helps the Library maintain and enhance collections at all of our locations to better serve the community. At the June 29, 2020 City Council meeting, Resolution No. 2020-39 was approved authorizing the City Manager or Chief Financial Officer to appropriate donations and grants up to $100,000 from a single source. Donations and grant awards exceeding this limit require City Council approval. Since 2002, the Friends of the Huntington Beach Public Library has worked together with community City of Huntington Beach Printed on 2/10/2021Page 1 of 2 powered by Legistar™59 File #:21-072 MEETING DATE:2/16/2021 partnerships and donated over $3 million to the Library for books, materials, and equipment. Their generosity has made core library functions, such as offering a robust collection of books and online databases, possible. Environmental Status: Not applicable Strategic Plan Goal: Enhance and maintain high quality City services Attachment(s): 1. Resolution No. 2020-39, “A Resolution of the City Council of the City of Huntington Beach Adopting a Budget for the City for FY 2020-21.” City of Huntington Beach Printed on 2/10/2021Page 2 of 2 powered by Legistar™60 61 62 63 City of Huntington Beach File #:21-111 MEETING DATE:2/16/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: Receive and file a status update on the 6th Cycle Regional Housing Needs Assessment (RHNA) process Statement of Issue: During the July 15, 2019, City Council Study Session, Community Development staff presented an overview of the 6th Cycle Regional Housing Needs Assessment (RHNA) process and related items of information, as directed by the City Council. At the end of the study session, the City Council requested monthly updates on the status of the 6th Cycle RHNA process. This update provides a summary of recent activity that has occurred with respect to the RHNA process,since the last Council update on January 19, 2021. Financial Impact: Not applicable. Recommended Action: Receive and file the Regional Housing Needs Assessment process status update. Alternative Action(s): Provide staff with alternative direction. Analysis: The RHNA allocation appeals process began on September 11, 2020. The City submitted an appeal on October 26, 2020, in accordance with the adopted RHNA Appeals Procedures. No other jurisdiction or agency appealed Huntington Beach’s RHNA allocation. In total, SCAG received 52 appeals. Appeal hearings started in early January and concluded the week of January 25, 2021. The City’s appeal was heard by the SCAG RHNA Subcommittee on January 19, 2021. The Subcommittee asked questions regarding inconsistent application of high-quality transit (HQTA) on Beach Boulevard within OCTA’s planning documents. City Attorney Michael Gates requested a continuance of the appeal. The Chair of the Subcommittee (Huang - Orange County) directed SCAG staff to convene with OCTA regarding the inconsistencies,and the Subcommittee voted to continue City of Huntington Beach Printed on 2/10/2021Page 1 of 2 powered by Legistar™64 File #:21-111 MEETING DATE:2/16/2021 the appeal to January 25, 2021. On January 25, 2021, the Subcommittee heard the continued appeal. SCAG staff stated they did not convene with OCTA regarding the inconsistent application of HQTA on Beach Boulevard within the City limits. Ultimately, a motion was made to deny the City’s appeal,and the motion passed by a 5-1 vote (Huang - No). The final RHNA allocation for the SCAG region is anticipated to be reviewed at the February 16, 2021, RHNA Subcommittee meeting,and forwarded to the SCAG Regional Council for final certification at the March 6, 2021, meeting. If needed, staff will provide an oral update on the RHNA Subcommittee meeting at the February 16, 2021, City Council meeting under, “City Manager Report.” City of Huntington Beach 6 th Cycle RHNA Allocation (based on the September 3, 2020 Regional Council vote) Income Category Number of Units Very-low income (<50% AMI)3,652 Low income (50-80% AMI)2,179 Moderate income (80-120% AMI)2,303 Above Moderate/Market rate (>120% AMI)5,203 Total RHNA 13,337 Environmental Status: The filing of a status update on the 6th Cycle RHNA process is not a project , as defined by Section 15378 of the CEQA Guidelines, and is not subject to CEQA. Strategic Plan Goal: Non-Applicable - Administrative Item Attachment(s): 1. City of Huntington Beach RHNA Appeal (Note: This attachment contains the City’s RHNA Appeal Form and Bases for Appeal; all other RHNA Appeal Attachments can be viewed on the SCAG website at <www.scag.ca.gov/rhna-appeals-filed>) City of Huntington Beach Printed on 2/10/2021Page 2 of 2 powered by Legistar™65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 City of Huntington Beach File #:21-107 MEETING DATE:2/16/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Sean Crumby, Director of Public Works Subject: Adopt Resolution No. 2021-09 authorizing the Director of Public Works to request a project delay from the Orange County Transportation Authority (OCTA) for the commencement of the Bolsa Chica Street/Valley View Street Corridor Project Statement of Issue: In October 2019, the City of Huntington Beach in conjunction with the City of Westminster and the City of Garden Grove submitted an application to OCTA for a Regional Traffic Signal Synchronization Program project on Valley View Street/Bolsa Chica Street from Chapman Avenue in Garden Grove to Warner Avenue in Huntington Beach. COVID-related staffing and budget concerns among the participating agencies have led to the need to request a delay from OCTA for the commencement of this project. Program requirements for the OCTA grant state that the request to delay commencement of a project must be authorized by the City Council. Financial Impact: No funding is required for this action. Recommended Action: Adopt Resolution No. 2021-09, “A Resolution of the City Council of the City of Huntington Beach Authorizing a Request to Pursue a Project Delay from the Orange County Transportation Authority (OCTA) for the Bolsa Chica Street/Valley View Street Corridor Project - Project P Regional Traffic Signal Synchronization Program - Comprehensive Transportation Funding Program.” Alternative Action(s): Do not authorize the Director of Public Works to request a project delay. This alternative action may result in the loss of the grant funds for the project. Analysis: In October 2019, the City of Huntington Beach, the City of Westminster and the City of Garden Grove, jointly submitted an application to OCTA for a Regional Traffic Signal Synchronization Program project on Valley View Street/Bolsa Chica Street from Chapman Avenue in Garden Grove to City of Huntington Beach Printed on 2/10/2021Page 1 of 2 powered by Legistar™99 File #:21-107 MEETING DATE:2/16/2021 Warner Avenue in Huntington Beach. This program allows for improved traffic flow through synchronization of the signals along a corridor. In April 2020, OCTA approved funding for this project. This project, led by the City of Huntington Beach in conjunction with the Cities of Westminster and Garden Grove, along with Caltrans, will provide operational and infrastructure improvements at 22 signalized intersections along the corridor. The project application specified commencement of these efforts in OCTA Fiscal Year 2020/21, which ends on June 30, 2021. After submittal of the application several factors have led to a need for requesting a delay. With the onset of the COVID-19, two recruitments within the Public Works Transportation Engineering section were held open as the Huntington Beach accessed the financial impacts. Those recruitments are moving forward now. The staffing limitations prevented the commencement of this project in the fall of 2020 as originally planned. In addition, the City of Westminster requested a delay in the project in due to financial concerns arising from Covid and their ability to provide funding. As such, it is recommended that a request of a two-year delay in project commencement be made to OCTA. In accordance with OCTA’s Comprehensive Transportation Funding Program Guidelines, City Council approval is necessary before any project delays can be considered. Environmental Status: This project is categorically exempt pursuant to the California Environmental Quality Act, Section 15303 (c). Strategic Plan Goal: Enhance and maintain infrastructure Attachment(s): 1. Location Map 2. Resolution No. 2021-09, “A Resolution of the City Council of the City of Huntington Beach Authorizing a Request to Pursue a Project Delay from the Orange County Transportation Authority (OCTA) for the Bolsa Chica Street/Valley View Street Corridor Project - Project P Regional Traffic Signal Synchronization Program - Comprehensive Transportation Funding Program” City of Huntington Beach Printed on 2/10/2021Page 2 of 2 powered by Legistar™100 101 102 103 City of Huntington Beach File #:21-047 MEETING DATE:2/16/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Sean Crumby, Director of Public Works Subject: Authorize execution of a License Agreement with C3 DLG 414 Main Street, LLC , for the 414 Main Street Mixed-Use Project located on the east side of Main Street between Orange Avenue and Pecan Avenue Statement of Issue: A License Agreement between the City and C3 DLG 414 Main Street, LLC (owner/developer), for the installation and maintenance of improvements in the public right-of-way is presented for City Council approval and execution for the 414-424 Main Street mixed-use project located on the east side of Main Street, between Orange Avenue and Pecan Avenue. Financial Impact: No funding is required for this action. Recommended Action: Authorize the Mayor and City Clerk to execute and record the, “License Agreement between the City of Huntington Beach and C3 DLG 414 Main Street, LLC, to Provide Installation and Maintenance of Landscaping and Landscaping Improvements in the Public Right-of-Way,” for the 414-424 Main Street mixed-use project (Attachment 1). Alternative Action(s): Do not authorize execution of the agreement, with findings for denial, and direct staff accordingly. Absent this agreement, the City would be responsible for construction and maintenance of the improvements within the public right-of-way related to the subject project, which would result in increased future maintenance costs for the City. Additionally, without this Agreement, the developer would be unable to satisfy the project’s Conditions of Approval. Analysis: The 414-424 Main Street mixed-use project is a four story; mixed-use development located on the east side of Main Street, between Orange Avenue and Pecan Avenue, and consists of 5,000 square feet of retail, 20 residential units (condos), and subterranean parking. The project’s development City of Huntington Beach Printed on 2/10/2021Page 1 of 2 powered by Legistar™104 File #:21-047 MEETING DATE:2/16/2021 requirements include the construction of and responsibilities for future maintenance of landscaping and hardscape improvements within the Main Street and public alley right-of-ways. To document this responsibility, the developer/owner is required to execute the appropriate landscape maintenance license agreement for all landscaping, irrigation, street furniture, and enhanced hardscape that encroaches into the aforementioned City right-of-ways. In addition to landscaping and irrigation, the agreement also addresses enhanced sidewalk cleaning, trash cans, disposal of trash, signs, tree replacement, and all other aspects of maintenance for these areas, and that property ownership shall be responsible for all costs associated with this maintenance, repair, replacement, and liability. Public Works Commission Action: Not applicable for this request. Environmental Status: The agreement is categorically exempt from the California Environmental Quality Act, pursuant to City Council Resolution No. 4501. Strategic Plan Goal: Enhance and maintain infrastructure Attachment(s): 1. License Agreement between the City of Huntington Beach and C3 DLG 414 Main Street, LLC to Provide Installation and Maintenance of Landscaping and Landscaping Improvements in the Public Right-of-Way City of Huntington Beach Printed on 2/10/2021Page 2 of 2 powered by Legistar™105 106 107 108 109 110 111 112 113 114 115 116 EXHIBIT A Legal Description of Property Being a subdivision of lots 30, 31, 32, 33, 34 and 35 in Block 403, Map of Huntington Beach, Main Street Section, as shown on a Map filed in Book 3, Page 43 of Miscellaneous Maps, in the Office of the County Recorder of Said County. APN’s: 024-134-04 and 024-134-05 Also known as: ShoreHouse 414 Main Street Huntington Beach, CA 92648 117 118 City of Huntington Beach File #:21-067 MEETING DATE:2/16/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Sean Crumby, Director of Public Works Subject: Accept bid and authorize execution of a construction contract with Alfaro Communication Construction, Inc., in the amount of $284,270 for the construction of fiber optic communications to Murdy Park, the Joint Powers Training Facility and the Water Operations Facility, CC-1593 and CC-1594 Statement of Issue: On January 7, 2021, bids were opened for the installation of fiber optic communications to Murdy Park, the Joint Powers Training Facility and the Water Operations Yard. City Council action is requested to award the contract to Alfaro Communication Construction, Inc., the lowest responsive and responsible bidder. Financial Impact: The total estimated project cost is $337,697. Funds are budgeted in the Fiber Expansion budget of the Fiscal Year 2020/2022 Capital Improvement Program. A total of $225,000 is budgeted for fiber optic expansion in the Water Fund (50685801.82800), $75,000 is budgeted for fiber optic expansion in the Sewer Service Fund (51185201.82800), and $37,697 is budgeted in the Infrastructure Fund (31440001.82800). Recommended Action: A) Accept the lowest responsive and responsible bid submitted by Alfaro Communication Construction, Inc., in the amount of $284,270; and, B) Authorize the Mayor and City Clerk to execute a construction contract in a form approved by the City Attorney. Alternative Action(s): Reject all bids and provide staff with alternative direction. Analysis: The Information Services division of the Administrative Services Department, in consultation with the City of Huntington Beach Printed on 2/10/2021Page 1 of 3 powered by Legistar™119 File #:21-067 MEETING DATE:2/16/2021 Public Works Department, identified three City facilities that will benefit from being connected to the City’s fiber optic network. With the installation of new conduit and fiber optic cable, the Murdy Park Community Center, the Joint Powers Training Center, and the Utilities Operations Facility will be connected to the City’s fiber optic communications network, which currently is utilized for traffic signal communications. This fiber optic communications network is already connected to City Hall; therefore, fiber optic communications will be established between City Hall and these three City facilities. This project will also upgrade communications at four existing traffic signals from older copper cable to fiber optic cable, which will enable faster communications and the ability to provide future closed circuit television cameras. This project was included in the Fiscal Year 2020/2021 Capital Improvement Project budget. A complete set of plans and specifications are available for review at the Public Works counter during normal business hours. Bids were opened on January 7, 2021 and are listed in ascending order: Bidder Submitted Bid Corrected Bid 1. Alfaro Communication Construction, Inc. $284,270.00 2. Elecnor Belco Electric, Inc.$292,212.00 3. DBX, Inc.$327,370.00 4. Inter-Pacific, Inc.$331,000.00 5. Select Electric, Inc.$353,528.00 6. Servitek Electric, Inc.$379,948.98 $379,936.53 7. Crosstown Electrical & Data, Inc.$399,983.00 8. Comet Electric, Inc.$409,835.00 9. Asplundh, LLC $420,678.00 The total estimated cost of this project is $337,697, as outlined below: Estimated Construction Costs Bid $284,270 10% construction contingency $ 28,427 Construction Administration $ 25,000 Total $337,697 Public Works Commission Action: Due to the COVID-19 restrictions, the Public Works Commission did not meet in the six months prior to advertising this project for bids; therefore, there is no Public Works Commission action regarding this project. Environmental Status: This project is categorically exempt pursuant to the California environmental Quality Act, Section 15303 (c). City of Huntington Beach Printed on 2/10/2021Page 2 of 3 powered by Legistar™120 File #:21-067 MEETING DATE:2/16/2021 Strategic Plan Goal: Enhance and maintain infrastructure Attachment(s): 1. Project Location Map City of Huntington Beach Printed on 2/10/2021Page 3 of 3 powered by Legistar™121 122 City of Huntington Beach File #:21-078 MEETING DATE:2/16/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: Appeal of Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 (714 Pacific Coast Highway Mixed Use) Statement of Issue: Transmitted for your consideration is an appeal by Councilmember Kalmick of the Planning Commission’s denial of Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001. This application is a request to construct a new three-story 12,713 sq. ft. mixed use building at an overall height of 35 feet, which includes a 766 sq. ft. ground floor retail space; three two-bedroom residential units on the second and third floor; a 300 sq. ft. rooftop deck; an enclosed parking garage for seven parking spaces (four grade level, three subterranean); and two open commercial parking spaces for a total of nine on-site parking spaces. The project includes a request to permit an 18 ft. wide garage access driveway in lieu of a minimum required 20 ft. wide driveway. The Planning Commission held a public hearing on January 12, 2021,and denied the request. On January 13, 2021, Councilmember Kalmick appealed the Planning Commission’s decision citing that the proposed project meets the legal framework set forth by the City’s applicable development standards. Financial Impact: Not applicable. Recommended Action: Staff recommends the City Council take the following actions: A) Find the proposed project exempt from the California Environmental Quality Act pursuant to Section 15332 of the CEQA Guidelines; and, B) Approve Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 with findings and conditions of approval (Attachment No. 1). Alternative Action(s): A) Do not make the suggested findings for Conditional Use Permit No. 20-012, Coastal Development City of Huntington Beach Printed on 2/10/2021Page 1 of 5 powered by Legistar™123 File #:21-078 MEETING DATE:2/16/2021 Permit No. 20-013, and Special Permit No. 20-001, which will result in mandatory denial pursuant to Section 241.10(C) of the Huntington Beach Zoning and Subdivision Ordinance Code. B) Continue Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 and direct staff accordingly. Analysis: A.PROJECT PROPOSAL: Applicant/ Property Owner: Thanh Dong, Phat Huong Haanh Holdings, LLC, 18961 Flagstaff Lane, Huntington Beach CA 92646 Location: 714 Pacific Coast Highway, 92648 (North side of PCH, between 7th and 8th Street) The project site is a vacant 0.13-acre site located in District 1 of the Downtown Specific Plan (SP5). The proposed building will consist of a 766 sq. ft. ground floor retail tenant space, three two-bedroom residential units on the second and third floors, and a 300 sq. ft. rooftop deck. A comprehensive description of the proposed project as well as the General Plan and Zoning analysis can be found in the January 12, 2021 Planning Commission staff report (Attachment No. 4). B. PLANNING COMMISSION MEETING AND RECOMMENDATION The project was originally acted on at the November 4, 2020,Zoning Administrator public hearing. Sam Hanna, the property owner of the adjacent site (716 Pacific Coast Highway), identified multiple concerns with the design of the project. Following discussion between staff, the applicant, and neighboring property owner, the Zoning Administrator approved the project with suggested findings and conditions of approval. On November 16, 2020, the Zoning Administrator’s approval was appealed by Sam Hanna, who identified concerns with potential impacts to the safety, privacy, and visibility of his property. Mr. Hanna also requested revisions to the proposed project’s setbacks to preserve private views of the ocean from his property, and moving the location of the common open space provided on the rooftop deck to preserve privacy between structures. On January 12, 2021, the Planning Commission held a public hearing to consider the appeal of the Zoning Administrator’s approval of the proposed project. There were no public comments received and testimony in support of the request was received from the applicant’s representatives and the architect of the project. Testimony in opposition of the request was received from Sam Hanna,citing the same concerns as those received during the Zoning Administrator hearing. Commissioners had questions regarding vehicular access to and from the parking garage adjacent to the alley, applicable side yard setback requirements, the definition of a bedroom, operation of the subterranean parking mechanical lifts, and the location of the proposed rooftop deck. Additionally, staff advised Commissioners that the use history and development requirements for the existing City of Huntington Beach Printed on 2/10/2021Page 2 of 5 powered by Legistar™124 File #:21-078 MEETING DATE:2/16/2021 staff advised Commissioners that the use history and development requirements for the existing live/work building on the appellant’s property (716 PCH) were different from those applicable to the proposed project. Staff affirmed that with the exception of the Special Permit request, the proposed project is consistent with the development standards of the Huntington Beach Zoning and Subdivision Ordinance (HBZSO) and the Downtown Specific Plan. The Planning Commission further clarified that no previous development project in Huntington Beach had included parking for residential uses in a vertical tandem configuration. Planning Commission Action on January 12, 2021 A motion was made by Perkins, seconded by Rodriguez to approve Conditional Use Permit No. 20- 012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 with findings and conditions of approval by the following vote: AYES: Perkins, Rodriguez, Acosta-Galvan NOES: Scandura, Mandic, Van Der Mark, Ray ABSTAIN: None ABSENT: None MOTION FAILED The Planning Commission failed to make all of the required findings for approval contained in Huntington Beach Zoning and Subdivision Ordinance (HBZSO) Section 241.10(A) for Conditional Use Permit No. 20-012. This resulted in a denial of Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 pursuant to HBZSO Section 241.10(C). C.APPEAL On January 13, 2021, Councilmember Kalmick appealed the Planning Commission’s denial of the project (Attachment No. 6), citing that the proposed project meets the legal framework set forth by the City’s applicable development standards.HBZSO Section 248.20 outlines the process for appeals as follows: A.Notice of Appeal. A person desiring to appeal a decision shall file a written notice of appeal with the director within the time required by Section 248.16 except an appeal to the Planning Commission’s decision shall be filed with the City Clerk. This section shall not apply to any action which must be heard by the City Council whether or not an appeal from the Planning Commission is filed. B.Form of Notice on Appeal. The notice of appeal shall contain the name and address of the person appealing the action, the decision appealed from and the grounds for the appeal. The director may provide the form of the notice of appeal. A defect in the form of the notice does not affect the validity or right to an appeal. C.Action on Appeal. The director or City Clerk shall set the matter for hearing before the reviewing body and shall give notice of the hearing on the appeal in the time and manner set forth in City of Huntington Beach Printed on 2/10/2021Page 3 of 5 powered by Legistar™125 File #:21-078 MEETING DATE:2/16/2021 Sections 248.02 and 248.04. D.De Novo Hearing. The reviewing body shall hear the appeal as a new matter. The original applicant has the burden of proof. The reviewing body may act upon the application, either granting it, conditionally granting it or denying it, irrespective of the precise grounds or scope of the appeal. In addition to considering the testimony and evidence presented at the hearing on the appeal, the reviewing body shall consider all pertinent information from the file as a result of the previous hearings from which the appeal is taken. E.Decision on Appeal. The reviewing body may reverse or affirm in whole or in part, or may modify the order, requirement, decision, or determination that is being appealed. Staff has evaluated the project for consistency with development standards of the HBZSO and Downtown Specific Plan,and determined that the project furthers the intended development pattern as envisioned by the Specific Plan. The three-story 12,713 sq. ft. mixed-use building complies with all development requirements of District 1 of the Downtown Specific Plan, with the exception of the Special Permit for a two ft. reduction in drive aisle width. The project complies with front, side, rear, and residential buffer setback requirements, maximum height, minimum parking requirements, and open space development standards. To date, there has not been necessary evidence provided to staff that would require a recommendation other than approval of the requests. Therefore, staff is recommending approval of the proposed project based on the following: ·Consistency with the M - SP (Mixed Use - Specific Plan Overlay) Land Use Designation of the General Plan and the SP 5 - CZ (Downtown Specific Plan - Coastal Zone Overlay) zoning designation; ·Project proposal satisfies all the findings required for approving a Conditional Use Permit, Coastal Development Permit, and Special Permit; ·Compatibility with the surrounding uses; and ·Provides expanded services and housing to meet local and regional community needs. Environmental Status: The project will not have any significant effect on the environment and is exempt from the provisions of the California Environmental Quality Act (CEQA), pursuant to section 15332 of the CEQA Guidelines, because the project is characterized as in-fill development that meets the following criteria: a. The project is consistent with the applicable General Plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations. b. The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses. c. The project site has no value as habitat for endangered, rare or threatened species. d. Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality. City of Huntington Beach Printed on 2/10/2021Page 4 of 5 powered by Legistar™126 File #:21-078 MEETING DATE:2/16/2021 e. The site can be adequately served by all required utilities and public services. Strategic Plan Goal: Economic Development & Housing Attachment(s): 1. Suggested Findings and Conditions of Approval for CUP 20-012, CDP 20-013, and SP 20-001 2. Vicinity Map 3. Site Plan, Floor Plans, and Elevations Received October 23, 2020 4. Planning Commission Staff Report dated January 12, 2021 5. PC Notice of Action Dated January 12, 2021 6. Appeal of Planning Commission Action Dated January 13, 2021 City of Huntington Beach Printed on 2/10/2021Page 5 of 5 powered by Legistar™127 ATTACHMENT NO. 1 FINDINGS AND CONDITIONS OF APPROVAL CONDITIONAL USE PERMIT NO. 20-012 COASTAL DEVELOPMENT PERMIT NO. 20-013 SPECIAL PERMIT NO. 20-001 FINDINGS FOR PROJECTS EXEMPT FROM CEQA: The City Council finds that the project will not have any significant effect on the environment and is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to section 15332 of the CEQA Guidelines, because the project is characterized as in-fill development that meets the following criteria: a. The project is consistent with the applicable General Plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations. b. The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses. c. The project site has no value as habitat for endangered, rare or threatened species. d. Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality. e. The site can be adequately served by all required utilities and public services. FINDINGS FOR APPROVAL - CONDITIONAL USE PERMIT NO. 20-012: 1. Conditional Use Permit No. 20-012 to permit the construction of a new 12,713 sq. ft. mixed use building at an overall height of 35 feet, including a 766 sq. ft. ground floor retail coffee shop; three two-bedroom residential units on the second and third floor; a 149 sq. ft. rooftop deck; an enclosed parking garage for seven parking spaces (four grade level, three subterranean); and two open commercial parking spaces for a total of nine on-site parking spaces will not be detrimental to the general welfare of persons working or residing in the vicinity or detrimental to the value of the property and improvements in the neighborhood because, as conditioned, the project is proposed to meet all required development standards, including code required on-site parking and maximum height. The mixed-use building will be compatible with surrounding uses because the project is adjacent to other mixed-use and visitor-serving commercial uses along Pacific Coast Highway, and the proposed building’s scale and layout meets all applicable development standards and is compatible with the adjacent buildings by providing a new commercial use oriented towards Pacific Coast Highway that would not impact sensitive residential uses nearby. Approval of the project would not result in any significant effects relation to traffic, air quality, or water quality. All project related parking and circulation will occur onsite and function similarly to comparable mixed uses. Sufficient parking is provided to accommodate both uses on site, and does not impact coastal access in the vicinity. Parking for commercial uses is provided by two alley loaded spaces and one interior ADA accessible space within the enclosed garage on the first floor. The residential spaces are also provided in the enclosed garage via a vertical tandem configuration, with access from the shared driveway off the existing alley. Therefore, impacts are not anticipated to the surrounding uses. 128 2. The granting of Conditional Use Permit No. 20-012 will not adversely affect the General Plan because the General Plan Land Use Map designation on the subject property is currently M- sp (Mixed Use – Specific Plan Overlay) and mixed use projects are allowed within the property’s zoning and land use designation. The project, as designed, is consistent the General Plan goals and policies identified below: Goal LU 1: New commercial, industrial, and residential development is coordinated to ensure that the land use pattern is consistent with the overall goals and needs of the community. Policy LU 1 (A): Ensure that development is consistent with the land use designations presented in the Land Use Map, including density, intensity, and use standards applicable to each land use designation. Policy LU 1 (C): Support infill development, consolidation of parcels, and adaptive reuse of existing buildings. Goal LU 4: A range of housing types is available to meet the diverse economic, physical, and social needs of future and existing residents, while neighborhood character and residences are well maintained and protected. Policy LU 4 (C): Encourage a mix of residential types to accommodate people with diverse housing needs. Goal LU 11: Commercial land uses provide goods and services to meet regional and local needs. Goal LU 1 (B): Encourage new businesses to locate on existing vacant or underutilized commercial properties where these properties have good locations and accessibility. Goal LU 14: Huntington Beach continues to attract visitors and provides a variety of attractions and accommodations during their stay. Policy LU 14 (B): Encourage both coastal and inland visitor-serving uses to offer a wide spectrum of opportunities for residents and visitors Goal C 3: Provide a variety of recreational and visitor commercial serving uses for a range of cost and market preferences. Policy C 3.2.4: Encourage the provision of a variety of visitor-serving commercial establishments within the Coastal Zone, including, but not limited to, shops, restaurants, hotels and motels, and day spas. The proposed project consists of the construction of a new 12,713 sq. ft. mixed use building at an overall height of 35 feet, including a 766 sq. ft. ground floor retail coffee shop; three two- bedroom residential units on the second and third floor; a 149 sq. ft. rooftop deck; an enclosed parking garage for seven parking spaces (four grade level, three subterranean); and two open commercial parking spaces for a total of nine on-site parking spaces. The new mixed-use building is located in an area designated commercial uses that will serve tourists and visitors. The proposed project will provide a visitor-serving eating and drinking retail use that meets the regional needs. The project provides both a visitor serving commercial use and residential uses that will meet the need of future and existing residents on an underutilized parcel 129 consistent with the General Plan. Further, the project will add new housing opportunities and will provide the City with housing in-lieu fees to fund affordable housing within the City. 3. The proposed conditional use permit for the construction of a new 12,713 sq. ft. mixed use building at an overall height of 35 feet, including a 766 sq. ft. ground floor retail coffee shop; three two-bedroom residential units on the second and third floor; a 149 sq. ft. rooftop deck; an enclosed parking garage for seven parking spaces (four grade level, three subterranean); and two open commercial parking spaces for a total of nine on-site parking spaces will, as conditioned, comply with the development standards and land use provisions in the Downtown Specific Plan, including maximum height, setback requirements and parking because suitable vehicular circulation and access is provided for the project. The project is located within the Downtown Core Mixed Use District of the Downtown Specific Plan, which requires approval of a conditional use permit for development on properties with less than 100 feet of frontage. Additionally, the project is consistent with the Downtown Specific Plan Design Guidelines for Mixed Use development. FINDINGS FOR APPROVAL - COASTAL DEVELOPMENT PERMIT NO. 20-013: 1. Coastal Development Permit No. 20-013 to construct a new 12,713 sq. ft. mixed use building at an overall height of 35 feet, including a 766 sq. ft. ground floor retail coffee shop; three two- bedroom residential units on the second and third floor; a 149 sq. ft. rooftop deck; an enclosed parking garage for seven parking spaces (four grade level, three subterranean); and two open commercial parking spaces for a total of nine on-site parking spaces conforms with the General Plan, including the Local Coastal Program because the project is consistent with the Coastal Element Land use Policy C 1.1.1 to encourage new development to locate within, contiguous to or in close proximity to existing developed areas able to accommodate it. The proposed addition will occur entirely on a vacant site, contiguous to existing mixed use, commercial, and residential development. 2. The request to permit to a new 12,713 sq. ft. mixed use building at an overall height of 35 feet, including a 766 sq. ft. ground floor retail coffee shop; three two-bedroom residential units on the second and third floor; a 149 sq. ft. rooftop deck; an enclosed parking garage for seven parking spaces (four grade level, three subterranean); and two open commercial parking spaces for a total of nine on-site parking spaces is consistent with the requirements of the CZ Overlay District, the base zoning district, as well as other applicable provisions of the Municipal Code because the project, as conditioned, will comply with all applicable development regulations, including setbacks, parking, and height. 3. At the time of occupancy, the proposed development can be provided with infrastructure in a manner that is consistent with the Local Coastal Program because Coastal Development Permit No. 20-013 to construct a new 12,713 sq. ft. mixed use building at an overall height of 35 feet, including a 766 sq. ft. ground floor retail coffee shop; three two -bedroom residential units on the second and third floor; a 149 sq. ft. rooftop deck; an enclosed parking garage for seven parking spaces (four grade level, three subterranean); and two open commercial parking spaces for a total of nine on-site parking spaces is located in an urbanized area with all necessary services and infrastructure available, including water, sewer, and roadways. 4. Coastal Development Permit No. 20-013 to construct a new 12,713 sq. ft. mixed use building at an overall height of 35 feet, including a 766 sq. ft. ground floor retail coffee shop; three two- bedroom residential units on the second and third floor; a 149 sq. ft. rooftop deck; an enclosed 130 parking garage for seven parking spaces (four grade level, three subterranean); and two open commercial parking spaces for a total of nine on-site parking spaces conforms with the public access and public recreation policies of Chapter 3 of the California Coastal Act in that the project will not impede public access, recreation, or views to coastal resources. FINDINGS FOR APPROVAL – SPECIAL PERMIT NO. 20-001: 1. The granting of a Special Permit (pursuant to Section 2.5.6 of the DTSP) in conjunction with Conditional Use Permit No. 20-012 and Coastal Development Permit No. 20-013 is to permit an 18 ft. wide garage access driveway in lieu of a minimum required 20 ft. wide driveway. The Special Permit results in a greater benefit from the project and will promote a better living environment because the 18 ft. wide drive aisle improves the project architecture by providing sufficient access to enclosed residential and commercial parking spaces with the appearance of a residential garage along the alley façade, consistent with surrounding residential and live- work uses. The proposed 18 ft. driveway width is consistent with residential requirements for two-car garages citywide and can accommodate ingress and egress of two vehicles. 2. The granting of Special Permit No. 20-001 to permit an 18 ft. wide garage access driveway in lieu of a minimum required 20 ft. wide driveway will provide better land planning techniques with maximum use of aesthetically pleasing site layout and design due to the use of appropriately arranged garage entryway that enables the full enclosure residential parking spaces and adequate ingress and egress for vehicles, residents, guests, and commercial visitors. The proposed project provides the required number of parking spaces for both the residential units and commercial space within the Coastal Zone and provides sufficient interior circulation within the parking garage. Further, the garage door is designed to be compatible with the architectural character of the surrounding neighborhood. An 18 ft. wide garage access driveway enables two cars to safely wait and pass for each other in a manner that occurs in the adjacent public alleyway throughout the City. 3. The granting of Special Permit No. 20-001 to permit an 18 ft. wide garage access driveway in lieu of a minimum required 20 ft. wide driveway will not be detrimental to the general health, welfare, safety, and convenience of the neighborhood or City in general, nor detrimental or injurious to the value of property or improvements of the neighborhood or City, in general as the proposed mixed-use project is compatible with the surrounding neighborhood in that the structure complies with applicable development standards with the exception of the subject Special Permit request. The architectural design, colors, and materials of the proposed project are consistent with the City’s Urban Design Guidelines. The Public Works Traffic Engineering Division has reviewed the Special Permit request and supports the request finding that the proposed driveway at 18 ft. wide will function properly for the project. 4. The granting of Special Permit No. 20-001 to permit an 18 ft. wide garage access driveway in lieu of a minimum required 20 ft. wide driveway will be consistent with objectives of the Downtown Specific Plan in achieving a development adapted to the terrain and compatible with the surrounding environment. By providing adequate on-site circulation and vehicular access, the Special Permit increases compatibility of the mixed-use project adjacent to a residential neighborhood and fosters safe and secure access for residents and retail customers within a District of the Specific Plan that encourages mixed-use developments. 5. The granting of a Special Permit is consistent with the policies of the Coastal Element of the City’s General Plan and the California Coastal Act. The project is consistent with applicable Coastal Element policies as noted under the Conditional Use Permit findings. Public services are currently available to the project site, as well as the surrounding areas. The proposed 131 Special Permit in conjunction with Conditional Use Permit No. 19-012 and Coastal Development Permit No. 19-013 will comply with State and Federal Law. CONDITIONS OF APPROVAL - CONDITIONAL USE PERMIT NO. 20-012/COASTAL DEVELOPMENT PERMIT NO. 20-013/SPECIAL PERMIT NO. 20-001: 1. The site plan, floor plans, and elevations received and dated October 23, 2020 shall be the conceptually approved design with the following modifications: a. The second floor balcony shall not include brick pilasters. (DRB) b. The maximum number of customer seats permitted for an eating and drinking establishment within the ground floor retail space shall be 12 at all times. (HBZSO 231.04) c. The third floor residential unit shall be designed to contain no more than two bedrooms. d. A sufficient buffer shall be provided between the proposed rooftop deck and the exterior wall façade of the third floor to provide privacy between the subject property and the existing structure to the north. 2. Zoning entitlement conditions of approval and code requirements shall be printed verbatim on one of the first three pages of all the working drawing sets used for issuance of building permits (architectural, structural, electrical, mechanical, and plumbing) and shall be referenced in the sheet index. The minimum font size utilized for printed text shall be 12 point. 3. The applicant and/or applicant’s representative shall be responsible for ensuring the accuracy of all plans and information submitted to the City for review and approval. 4. The Development Services Departments and divisions (Building & Safety, Fire, Planning and Public Works) shall be responsible for ensuring compliance with all applicable code requirements and conditions of approval. The Director of Community Development may approve minor amendments to plans and/or conditions of approval as appropriate based on changed circumstances, new information or other relevant factors. Any proposed plan/project revisions shall be called out on the plan sets submitted for building permits. Permits shall not be issued until the Development Services Departments have reviewed and approved the proposed changes for conformance with the intent of the City Council’s action. If the proposed changes are of a substantial nature, an amendment to the original entitlement reviewed by the Zoning Administrator may be required pursuant to the provisions of HBZSO Section 241.18. 5. At least 14 days prior to any grading activity, the applicant shall provide notice in writing to property owners of record and tenants of properties within a 500-foot radius of the project site as noticed for the public hearing. The notice shall include a general description of planned grading activities and an estimated timeline for commencement and completion of work and a contact person name with phone number. Prior to issuance of the grading permit, a copy of the notice and list of recipients shall be submitted to the Community Development Department. 132 6. During demolition, grading, site development, and/or construction, the following shall be adhered to: a. Construction equipment shall be maintained in peak operating condition to reduce emissions. b. Use low sulfur (0.5%) fuel by weight for construction equipment. c. Truck idling shall be prohibited for periods longer than 5 minutes. d. Attempt to phase and schedule activities to avoid high ozone days first stage smog alerts. e. Discontinue operation during second stage smog alerts. f. Ensure clearly visible signs are posted on the perimeter of the site identifying the name and phone number of a field supervisor to contact for information regarding the development and any construction/grading activity. 7. The final building permit(s) cannot be approved until the following have been completed: a. All improvements must be completed in accordance with approved plans. b. Compliance with all conditions of approval specified herein shall be verified by the Community Development Department. c. All building spoils, such as unusable lumber, wire, pipe, and other surplus or unusable material, shall be disposed of at an off-site facility equipped to handle them. 8. Conditional Use Permit No. 20-012, Coastal Development Permit No. 2020-013, and Special Permit No. 20-001 shall become null and void unless exercised within two years of the date of final approval, or such extension of time as may be granted by the Director pursuant to a written request submitted to the Community Development Department a minimum 30 days prior to the expiration date. 9. The Development Services Departments and divisions (Building & Safety, Fire, Planning and Public Works) shall be responsible for ensuring compliance with all applicable code requirements and conditions of approval. The Director of Community Development may approve minor amendments to plans and/or conditions of approval as appropriate based on changed circumstances, new information or other relevant factors. Any proposed plan/project revisions shall be called out on the plan sets submitted for building permits. Permits shall not be issued until the Development Services Departments have reviewed and approved the proposed changes for conformance with the intent of the City Council’s action. If the proposed changes are of a substantial nature, an amendment to the original entitlement reviewed by the Zoning Administrator may be required pursuant to the provisions of HBZSO Section 241.18. INDEMNIFICATION AND HOLD HARMLESS CONDITION: The owner of the property which is the subject of this project and the project applicant if different from the property owner, and each of their heirs, successors and assigns, shall defend, indemnify and hold harmless the City of Huntington Beach and its agents, officers, and employees from any 133 claim, action or proceedings, liability cost, including attorney’s fees and costs against the City or its agents, officers or employees, to attack, set aside, void or annul any approval of the City, including but not limited to any approval granted by the City Council, Planning Commission, or Design Review Board concerning this project. The City shall promptly notify the applicant of any claim, action or proceeding and should cooperate fully in the defense thereof. 134 VICINITY MAP CONDITIONAL USE PERMIT NO. 20-012, COASTAL DEVELOPMENT PERMIT NO. 20-013, AND SPECIAL PERMIT NO. 20-001 (714 PCH MIXED USE) 135 UPUPA-3.02A-3.0A-3.1A-3.11211A-4.01A-4.1Property Line See Survey50' - 0"Property Line See Survey110' - 0"Alley Center Line7' - 6"Existing Adjacent Property112 8th Street, Huntington Beach CAExisting Adjacent PropertyShown for Clarification OnlyExisting Adjacent Property716 Pacific Coast HighwayHuntington Beach CAProperty Line See Survey50' - 0"10' - 0"Property Line See Survey110' - 0"SETBACK0' - 4"0' - 7 1/2"48" CLR19' - 0"25' - 0"0' - 7 1/2"SETBACK0' - 4"8' - 0"12' - 0"10' - 0"12' - 0"9' - 0"12' - 0"DRIVEWAYGUEST #1COMMERCIALHANDICAPPARKINGPARKING 3ELEVPARKING #5STACKEDLIFT TANDEMACCESSIBLE PARKING STALLCOMMERCIAL ORRESIDENTIAL USERETAIL / COFFEEOCCUPANCY B717 S.F. FFE 31.60'PARKING #2COMMERCIALPARKING #4STACKEDLIFT TANDEMPARKING #6STACKEDLIFT TANDEM5' - 0"RESIDENTIAL ELEVATORACCESSIBLE ADA TYPEUP TO RESIDENTIAL FLOORS6' - 9"ALLEYALLEYPROPERTY LINEPROPERTY LINEPROPERTY LINEExisting Adjacent Property111 7th Street, Huntington Beach CASTAIR UP TO 2nd FLOOR DECKFIRE ACCESS STAIR4' - 0"EL 33.61'Slope Driveway 5%EL 29.40'(E) EL 31.52'PROPERTY LINE(E) SIDEWALK(E) SIDEWALKPACIFIC COAST HIGHWAYPROPOSED 8" WIDE CMU BLOCK WALL ON THE PROPERTY LINEPROPOSED 8" WIDE CMU BLOCK WALL ON THE PROPERTY LINEPROPOSED 8" WIDE CMU BLOCK WALL ON THE PROPERTY LINE23' - 1"25' - 11 1/2"MIN 25'-0" SETBACK FOR CAR TURN INTO PARKING GARAGE.(E) TC 31.40' HIGHEST T.O.C.DATUM FOR 35'-0" MAX BUILDING HEIGHT LIMIT.PROPOSED 8" WIDE S.S. RECESSED TRENCH DRAIN CONNECT PER CIVIL ENGINEER(E) EL 31.50'(E) EL 31.33'18'-0" wide entrance0' - 7 1/2"4" SIDE YARD SETBACK25' - 0"PUBLIC OPENSPACE 172 S.F.SEE LANDSCAPEPLANSTRASH /RECYCLE12" CLRPROPOSED ROLL UP ENTRY GATE TO REMAIN OPEN DURING BUSINESS HOURS OF OPPERATION33' - 0"2A-4.0(E) EL 33.43'EL 32.60'EL 32.60'PROPOSED 8" WIDE S.S. RECESSED TRENCH DRAIN CONNECT PER CIVIL ENGINEEREL 33.50'Slope Walkway 5%max. crosslope 2%EL 31.60'PROPOSED DRAIN CONNECT PER CIVIL ENGINEER, CONNECT TO STORM SEWEREXISTING 4'-0" BUILDING SETBACK AT GROUND LEVEL1' - 0"EXISTING 4'-0" BUILDING SETBACK AT GROUND LEVELEXISTING 2'-0" BUILDING SETBACK AT 2nd& 3rd LEVELSSlope Driveway 5%EL 31.60'1 bike stallNO PARKING4" SIDE YARD SETBACK0' - 7 1/2"4' - 0"9' - 0"12' - 0"4' - 0"(E) TC 31.31' LOWEST T.O.C.19' - 0"25' - 0"3' - 10 1/2"42" HIGH GUARDRAILOLD PROPERTY LINENEW PROPERTY LINE10' - 0"14' - 0"17' - 6"6' - 6"3' - 0"REAR YARD SETBACK4" SIDE YARD SETBACK4" SIDE YARD SETBACKROLL DOWN GATE WITH KNOCK BOX FOR FIRE DEP ACCESS27' - 0"SPECIAL PAVEMENT AREA850 SF OF PAVEMENTCURB, GUTTER AND SIDEWALK ALONG PCH FRONTAGE SHALL BE REMOVED AND REPLACED PER PW St Nos 202 AND 207Common Path of Egress TravelCommon Path of Egress Travel1' - 0"ROLL DOWN SMOKEDOOR AT ELEVATOR RESIDENTIAL ONLY ELEVATOR KEY FABSECURED ACCESSKNOX BOX& KEY FABWHEEL STOP AT LIFT,TYPICALSECURITY CAMERA,TYPICALWHEEL STOP TYPICALEL 32.50'EL 32.50'7' - 9"10' - 4"FDC CONNECTIONNearest FH 150' + 45' = 195' distance PER HB FIRE DEP REQUESTPROPOSED FIRE RISER LOCATION & BackFlowGARAGETYPE IIARETAILTYPE IIAGARAGETYPE IIAPROPOSED 4 GAS METERS LOCATIONSECURITY CAMERA,TYPICALPANICHARDWARENEAREST FIREHYDRANT LOCATED AT CROSS ST PCH & 8th ST APPROX. 195'-0" AWAYKNOX BOX LOCATIONKNOX BOX& KEY FABPAINT INTERIOR OF GARAGEBRIGHT WHITE FINISHFACP LOCATIONKNOX BOX& KEY FABNEW SEWER LATERAL, CONNECT TO MAIN PER CIVIL(4) PROPOSED SELF METERING WATER METER6' - 6"A-5.71RESTROOMSTORAGE+/- 5'-0" VIFFDC CONNECTION@ ALLEY PER HB FIREDEPARTMENT REQUESTNOTE: FDC CONNECTION AT ALLEY SHALL BE ROUTEDTO BACKFLOW DEVICE LOCATED AT PCH LOCATIONLANDSCAPELANDSCAPELANDSCAPEEXISTING DRIVEWAYEXISTING DRIVEWAYNEAREST FIREHYDRANT LOCATED AT CROSS ST PCH & 7th ST APPROX. 250'-0" AWAY29' - 2"50' drivewayCOURTYARDDRIVEWAYDRIVEWAY20' - 0"COURTYARDExisting Adjacent Property706 Pacific Coast HighwayHuntington Beach CAALL LIGHTING SHALL BE MOTION SENSOR ACTIVATED WITH SECURITY CAMERAS THOUGHOUT THE PROJECT.Slope Walkway 2% max. crosslope 2%max. crosslope 2%max. crosslope 2%TRUNCATED DOMESMIN 8'-2" HEADCLEARANCEMIN 8'-2" HEADCLEARANCEEXISTING WINDOW AT 1ST FLOOR EXISTING DECKAT 1ST FLOOR4' - 0"EXISTING GATEEXISTING GATE& FENCE 20' - 0"3' - 0"5' - 0"2' - 0"DARIANRADACNO. C-33451RENEWAL DATELICENSEDS TAOECETIHCRA T TFINRIOCALFA2-28-2021ScaleDateDrawn ByChecked ByProject NumberNOVUM ARCHITECTURE116 S. CATALINA AVE #122REDONDO BEACH, CA 90277 TEL: 310-709-4476WWW.NOVUMARCHITECTURE.COM714 PACIFIC COAST HIGHWAY, HUNTINGTON BEACH CA 92648PROGRESS SET -NOT FOR CONSTRUCTION OR BID1/8" = 1'-0"A-0.0HUNTINGTON BEACHMIXED USECheckerAuthor10-23-2020H BeachCover Sheet & Site PlanPhat Huong HaAnhHolding LLC1/8" = 1'-0"1Site PlanArchitectural Sheet ListSheetNumberSheet NameA-0.0 Cover Sheet & Site PlanA-0.1 Proposed Project Area DiagramsA-0.2 Site Fire Master Plan & Code AnalysisA-0.3 Fire Master 2nd & 3rd FL Residential PlansA-0.5 Project SpecificationsA-0.6 Project SpecificationsA-2.0 Proposed Retail Plan & Parking Lift Tandem SpecsA-2.1 Proposed Car Lift Basement Floor Plan LevelA-2.2 Proposed 2nd & 3rd FL Residential PlansA-2.3 Proposed Roof Plan & Stair / Elev at DeckA-3.0 Exterior Building ElevationsA-3.1 Exterior Building ElevationsA-4.0 Building SectionsA-4.1 Building SectionsA-5.6 Accessible Coffe Shop Floor Plan & Restroom LayoutA-6.0 COLOR & MATERIAL BOARDA-6.1 PROPOSED RENDERINGSA-6.2 PROPOSED RENDERINGSA-6.3 PROPOSED RENDERINGSA-6.4 3D Massing & Site Diagrammatic ViewsA-6.5 3D Massing & Site Diagrammatic ViewsA-6.6 3D Massing View Diagrammatic SketchesLOT COVERAGE CALCULATIONEXISTING SITE = 5,500.31 S.F. SEE SURVEYPROPOSED SITE COVERAGE OF ALL BUILDINGS = 5,013 S.F.5,013 / 5,500.31 = 91% PROPOSED LOT COVERAGE PROPOSED BUILDING GROSS S.F TABULATION SEE A-0.1FIRST FLOOR LEVEL / GARAGE LEVEL TOTAL PROPOSED PROJECT GROSS S.F.4,005 S.F.12,199 S.F.LEGAL DESCRIPTIONLOTS 6 & 7 OF BLOCK 107, HUNTINGTON BEACH TRACT MAP MB 3/36 CITY OF HUNTINGTON BEACH, ORANGE COUNTY, CALIFORNIAASSESSOR PARCEL NUMBER: 024-124-18LOT S.F.: 5,500.31 S.F. SEE SURVEYCOMMUNITY ASSICIATION: NOZONING: DISTRICT 1 - DOWNTOWN CORE MIXED USEFRONT SETBACK: 0'-0" REAR YARD SETBACK: 0'-0" WITH 4'-0" DEDICATION PER PUBLIC WORKSSIDE YARD SETBACKS: 0'-0" SEE FLOOR PLANS FOR VOLUNTARY SETBACKAT 2nd & 3rd FLOOR FOR NATURAL LIGHT & VENTILATION FOR EXISTING ADJACENT RESIDENTIAL HOME.COASTAL ZONE: YESCONSULTANT LISTOWNER:Thanh C. DongPhat Huong HaAnh Holding LLC714 Pacific Coast HighwayHuntington Beach, CAARCHITECT: NOVUM ARCHITECTURE116 S Catalina Suite 122Redondo Beach CA 90277 Tel: 310-383-1827SURVEY/CIVIL: MFKESSLERONE VENTURE, SUITE 130IRVINE CA 92618 Tel: 949-339-5330STRUCTURAL: ADR ENGINEERS11254 Hannum AvenueCulver City, CA 90230 Tel: 818-800-0631LANDSCAPE: Studio PAD, Inc.23276 S. POINTE DRIVE, STE. 103 / LAGUNA HILLS / CA 92653 Tel: 949.770.8530.SITESECOND FLOOR LEVEL / RESIDENTIAL3,955 S.F.RESIDENTIAL ROOF DECKS AT 2nd & 3rd FLOORS000 S.F.714 Pacific Coast Highway, Huntington Beach CANORTH(INCLUDES GARAGE; DOES NOT INCLUDE DECKS)Current Codes Effective January 1, 20182016 Building Code (Title 26)2016 Electrical Code (Title 27)2016 Plumbing Code (Title 28)2016 Mechanical Code (Title 29)2016 Residential Code (Title 30)2016 Green Building Standards Code (Title 31)Huntington Beach Municipal Code (HBMC)THIRD FLOOR LEVEL / RESIDENTIAL 3,350 S.F.VICINITY MAPCODE ANALYSISOCCUPANCY: R-2 (Residence) & S-2 (Garage at Ground Level)TYPE OF CONSTRUCTION: Type II A at 1st Fl Garage & Retail (Masonry & Concrete Slab Podium Deck Project) with Mtl Stud Wall Type VA at Residential Levels (2 & 3) above Concrete Podium. See notes on plansFIRE SPRINKLERS: YES (NFPA 13) all floorsDEFERRED SUBMITTALS1. PROPOSED 3 TOTAL STORY NEW MIXED USE COMMERCIAL PROJECT COMPOSED OF; (1) GROUND FLOOR RETAIL UNIT (COFFEE SHOP) WITH PROPOSED PARKING (ENCLOSED) GARAGE & 2 RESIDENTIAL STORIES ABOVE COMMERCIAL LEVEL. PROPOSED RESIDENTIAL SHALL BE COMPOSED OF (3) FAMILY RESIDENCES LOCATED ON THE 2nd & 3rd FLOOR LEVELS OVER 1 LEVEL GARAGE. TOTAL BUILDING NUMBER OF FLOORS = 3 LEVELS.2. PROPOSED SQUARE FEET OF RETAIL / OFFICE = 766 GROSS S.F.3. PROPOSED PUBLIC OPEN SPACE (OPEN & ON TO STREET LEVEL) = 172 GROSS S.F.4 PROPOSED 1st FLOOR PARKING GARAGE ON GRADE = 4,017 GROSS S.F.5. PROPOSED 3 PARKING STALLS FOR COMMERCIAL SPACE (INCLUDE HANDICAP VAN STALL)6. PROPOSED 3 TANDEM PARKING STALLS (WITH CAR LIFTS) FOR PROPOSED (3) 2 BEDROOM RESIDENTIAL UNITS AT 2nd & 3rd FLOOR PLANS.CAR LIFTS ALLOW FOR STACKING OF CARS 6 TOTAL STALLS7. PROPOSED ROOF TOP DECK 149 S.F. (COMMON OPEN SPACE FOR RESIDENCES) WITH ELEVATOR & STAIR ACCESS. ROOF TOP DECK 42" GUARDRAIL SHALL BE UNDER 35'-0" HEIGHT LIMIT.8. REFER TO AREA DIAGRAMS ON SHEET A-0.1 FOR ALL PROPOSED DETAILED BUILDING AREAS AND PROPOSED BUILDING SETBACKS9. REFER TO SURVEY SHEET S-1 FOR EXISTING PROPERTY INFORMATION.10. ALL EQUIPMENT (MECH HVAC SYSTEMS) SHALL BE UNDER 35'-0" HEIGHT LIMIT.11. PROPOSED R-13 FIRE SPRINKLERS AT PROPOSED PROJECT SHALL BE SEPARATE DEFERRED SUBMITTAL.PROJECT DESCRIPTION & SCOPE OF WORKCivil PlansFIRST FLOOR LEVEL / RETAIL717 S.F.RESIDENTIAL COURTYARD DECK AT 2nd FLOORS 000 S.F.C-1 PRECISE GRADING PLAN PUBLIC OPEN SPACE 172 S.F.RESIDENTIAL ROOF TOP DECK (COMMON SPACE) 000 S.F.CODES & REGULATIONSCITY OF HUNTINGTON BEACH PROJECT CODE & ZONING MATRIXSUBJECTCODE SECTIONREQUIRED / ALLOWEDPROPOSED PROJECTPARKING COMMERCIALPARKING RESIDENTIALSITE COVERAGEFRONT YARD SETBACKREAR YARD SETBACKSIDE YARD SETBACKSPUBLIC OPEN SPACEFENCESCOMMON OPEN SPACEPRIVATE OPEN SPACEEXCEPTIONS TO HEIGHT LIMITS AT ROOF STAIR& ELEVATOR OVERHEADSECTION 3.2.8 - District 1 10'-0" 10'-0"SECTION 3.2.13 - District 1 6'-0" Note: 42" @ FYS NONE PROVIDEDSECTION 3.2.16 - District 1MIN DWELLING UNIT SIZE SECTION 3.2.12 - District 1 500 S.F. FOR EACH UNIT TO BE PROVIDEDSECTION 3.2.16.1 - District 1STORAGE SP @ EA UNIT SECTION 3.2.18 - District 1 50 CU FEET FOR EACH UNIT 50 CU FT PROVIDED @ EACHSECTION 3.2.26.4 - District 1 3 SPACES / 1,000 S.F. 3 SPACES PROVIDEDSECTION 3.2.26.6 - COASTAL3 SPACES EACH UNITTOTAL UNITS 3 X 2 = 63 SPACES PROVIDEDNOTE: PARKING LIFT PROVIDED 6 TOTAL SPACESBIKE PARKING SECTION 3.2.26.5 - District 1 1 BIKE STALL 1 BIKE STALLSECTION 3.3.1.4 - District 1 0' 0' PROVIDEDSECTION 3.3.1.4 - District 1 3' 9'-6' PROVIDEDSECTION 3.3.1.4 - District 1 0' 4" PROVIDEDSECTION 3.3.1.4 - District 1 3% to 5% of NET SITE AREA4,959 NET x .03 = 148.77 S.F.172 PROVIDEDNo. Description DateOWNER OF PROPERTY & APPLICANTOWNER & OWNERS REP: Phat Huong HaAnh Holding LLC714 Pacific Coast HighwayHuntington Beach, CAOWNER: Thanh C. Dong LEGAL DESCRIPTION:LOTS 6 & 7 OF BLOCK 107, HUNTINGTON BEACH TRACT MAP MB 3/36 CITY OF HUNTINGTON BEACH, ORANGE COUNTY, CALIFORNIAASSESSOR PARCEL NUMBER: 024-124-181. EXTERIOR BUILDING SIGNAGE2. NFPA 13 FIRE SPRINKLER SYSTEMC-2 PRECISE GRADING PLAN DETAILSC-1 PRECISE GRADING PLAN & NOTES C-4 PRECISE GRADING & EROSION PLANSheet 1-2 BOUNDARY TOPOGRAPHIC MAP Sheet 2-2 BOUNDARY TOPOGRAPHIC MAP Landscape PlansL-1 Proposed Schematic Landscape Plan & Imagery L-2 Proposed Schematic Open Space Enlargement Plans L-3 Proposed Schematic Planting Plan I-1 Proposed Schematic Irrigation Plan I-2 Proposed Schematic Irrigation Details I-3 Proposed Schematic Irrigation Specifications 136 DNDNUPUPDNDNUPDNUPA-3.02A-3.0A-3.1A-3.11211A-4.0RAISED BIOPLANTERSEE CIVIL &LANDSCAPE PLANS14' - 3"50' - 0"110' - 0"17' - 6"110' - 0"50' - 0"PACIFIC COAST HIGHWAYALLEY1A-4.10' - 4"23' - 11 1/2"20' - 8 1/2"4' - 8"0' - 4"ELEV2nd FLOOR3,955 GROSS S.F.ENTRY6' - 7 1/2"42' - 3"17' - 10 1/2"33' - 9 1/2"9' - 6"6' - 6"3' - 0"11' - 8 1/2"68' - 1"14' - 1"6' - 7 1/2"2' - 0"43' - 0"5' - 0"ALLEYUNIT 12 BEDROOM1,774 S.F.UNIT 22 BEDROOM1,803 S.F.2' - 6"18' - 3"24' - 3"5' - 0"2A-4.03' - 0"EXISTING 4'-0" BUILDING SETBACK AT GROUND LEVEL3' - 0"EXISTING 4'-0" BUILDING SETBACK AT GROUND LEVELEXISTING 2'-0" BUILDING SETBACK AT 2nd& 3rd LEVELSVOLUNTARY SETBACK SPACE@ NEIGHBOR WINDOWS FOR NATURAL LIGHT & VENTILATIONVOLUNTARY SETBACK SPACE@ NEIGHBOR WINDOWS FOR NATURAL LIGHT & VENTILATIONENTRYELEVATORLOBBY2HR STAIRrated shaftBALCONY 54 S.F.CLOSETBATHFAMILY ROOMBALCONY / DECKPRIVATE OPEN SPACE159 S.F. (OPEN TO SKY)BALCONY / DECKPRIVATE OPEN SPACE140 S.F. (OPEN TO SKY)WDWDBEDROOMBEDROOMBEDROOM #1CLOSETBATHLIVING ROOMLIVING ROOMKITCHENKITCHENDINING ROOMCLOSETDINING ROOMSLIDING WALLSYSTEMOLD PROPERTY LINENEW PROPERTY LINEAlley Center LineALLEY14' - 0"3' - 0"REAR YARD SETBACKSIDE YARD SETBACK0' - 4"SIDE YARD SETBACK0' - 4"SIDE YARD SETBACK0' - 4"SIDE YARD SETBACK0' - 4"SIDE YARD SETBACK0' - 4"SIDE YARD SETBACK0' - 4"BATHCLOSETR-2 RESIDENTIALTYPE VA @ 2nd& 3rd FLOORSCOMMONOPEN SPACE140 S.F. STAIR STANDPIPEWITH DRAINWALKWAYCOMMON OPEN SPACE42" HIGH ABOVE PLANTER"DIRT" GRADE GLASS RAILFOR FALL PROTECTIONACCESSIBLE BATHROLL INSHOWER42" high wall95 S.F. of unobstructedopening for naturallight & ventilation. WallArea = 162 s.f. note that 95 S.F. is greater than 1/2 of the wall area 162 S.F.92.5 S.F. OF UNOBSTRUCTEDOPENING FOR NATURALLIGHT & VENTILATION. WALLAREA = 123.5 S.F. NOTE THAT 92.5 S.F. IS GREATER THAN 1/2 OF THE WALL AREA 123.5 S.F.A-5.725' - 0"5' - 0"EXISTING 2'-0" BUILDING SETBACK AT 2nd& 3rd LEVELSEXISTING WINDOW AT 2ND FLOOREXISTING WINDOW AT 2ND FLOOREXISTING WINDOW AT 2ND FLOOR NOT A DECKEXISTING WINDOW AT 2ND FLOOR NOT A DECKEXISTING WINDOW AT 2ND FLOOREXISTING WINDOW AT 2ND FLOOREXISTING DECK AT 2ND FLOOREXISTING DECK AT 2ND FLOORREFER TO LANDSCAPE PLANS FOR EXTERIOR LANDSCAPE & PAVING FINISHESF.P.REFER TO LANDSCAPE PLANS FOR EXTERIOR LANDSCAPE & PAVING FINISHESLANDSCAPESTAIR #2STAIR #18' - 6"5' - 9"EXIT6' - 7 1/2"6' - 7 1/2"STORAGE6' - 6"9' - 6"4' - 9 1/2"6' - 4 1/2"STAIR OPEN TO SKY ISNOT COUNTED IN AREAA-3.02A-3.0A-3.1A-3.11211A-4.0UNIT 42 BEDROOM2,935 S.F.Existing Adjacent PropertyExisting Adjacent PropertyPACIFIC COAST HIGHWAYBALCONY / DECKPRIVATE OPEN SPACE285 S.F. (OPEN TO SKY)50' - 0"110' - 0"50' - 0"ALLEY1A-4.12' - 0"33' - 3"9' - 9"5' - 0"REAR YARD SETBACKALLEYBALCONY / DECK BELOW9' - 6"87' - 4 1/2"6' - 6"6' - 7 1/2"100' - 6"2' - 6 1/2"18' - 0"4' - 0"18' - 0"2' - 6"5' - 0"0' - 4"44' - 8"4' - 8"0' - 4"BUILDING SETBACKAT RESIDENTIAL LEVELSBUILDING SETBACKAT RESIDENTIAL LEVELSELEV24' - 11 1/2"ELEVATOR DOORS & STAIR DOORS OPEN INTO UNIT 3 WITH KEY "FAB" ACCESS ONLY2' - 0"43' - 0"5' - 0"11' - 8 1/2"19' - 11 1/2"48' - 1 1/2"7' - 7"6' - 6"1' - 4 1/2"2A-4.03' - 0"EXISTING 4'-0" BUILDING SETBACK AT GROUND LEVEL3' - 0"EXISTING 2'-0" BUILDING SETBACK AT 2nd& 3rd LEVELS4' - 0"3rd FLOOR3,350 GROSS S.F.VOLUNTARY SETBACK SPACE@ NEIGHBOR WINDOWS FOR NATURAL LIGHT & VENTILATIONVOLUNTARY SETBACK SPACE@ NEIGHBOR WINDOWS FOR NATURAL LIGHT & VENTILATION5' - 0"3' - 0"36" REFOVEN36" FRZDWDWBATHKITCHENDINING ROOMLIVING ROOMCLOSETMASTER BEDROOM #1DUALSHOWERENTERTAINMENT ROOMELEVATOR MACHINE ROOMBATHARTGALLERYCLEAR6' - 0"CLEAR6' - 0"FAMILY ROOMLOBBYCLOSETTO ROOFTO 2nd FLBEDROOM # 250' - 0"INTERIOR VIEWEMERGENCYESCAPEWINDOWAlley Center LineALLEY17' - 0"7' - 0"OLD PROPERTY LINENEW PROPERTY LINE3' - 0"7' - 0"SIDE YARD SETBACK0' - 4"SIDE YARD SETBACK0' - 4"SIDE YARD SETBACK0' - 4"SIDE YARD SETBACK0' - 4"R-2 RESIDENTIALTYPE VA @ 3rdFLOORSTAIR STANDPIPEWITH DRAINPRIVATEOPEN SPACE DECK 312 S.F.5' - 0"DECK 24 S.F.2HR STAIRrated shaft1HR CORRIDOR4' - 6"4' - 0"0' - 4"4' - 0"ACCESSIBLEBATHROLL INSHOWER2' - 2"60" clrEXISTING WINDOW AT 2ND FLOOREXISTING WINDOW AT 2ND FLOOREXISTING WINDOW AT 2ND FLOOR NOT A DECKEXISTING WINDOW AT 2ND FLOOR NOT A DECKEXISTING WINDOW AT 2ND FLOOREXISTING WINDOW AT 2ND FLOOREXISTING DECK AT 3RD FLOOREXISTING DECK AT 3RD FLOORF.P.F.P.STAIR #2STAIR #1EXIT14' - 3"SETBACK @3rd FLOOR10' - 0"42" HIGH WALL4' - 2"STAIR OPEN TO SKY ISNOT COUNTED IN AREA1. THE CONTRACTOR SHALL VERIFY WITH CLIENT AND SHALL ASSIST THE CLIENT WITH ALL PROPOSED INTERIOR FINISHES, EQUIPMENTS AND APPLIANCES. THE CONTRACTOR SHALL CONSULT WITH THE CLIENTS INTERIOR DESIGN TEAM OR CONSULTANTS IF SUPPLIED.2. THE CONTRACTOR SHALL NOTIFY THE CLIENT & ARCHITECT OF ANY UN-FORSEABLE PROBLEMS AND OR ISSUES WITH THE RENOVATION AND REUSE OF THE EXISTING BUILDING OR PORTION OF BUILDINGS OR MATERIALS AND ITS SYSTEMS.3. THE CONTRACTOR SHALL VERIFY WITH CLIENT AND SHALL REMOVE AND STORE PER CLIENT'S DIRECTION ANY PORTIONS OR ITEMS FROM THE EXISTING STRUCTURE(S) TO BE DEMOLISHED OR RENOVATED AND OR REUSED. ANY ITEMS THAT ARE TO BE REUSED MUST COMPLY WITH THE LOCAL BUILDING CODES & STANDARDS.4. PROVIDE ALL NECESSARY FUEL GAS SUPPLY LINES WITH SHUTOFF VALVES TO ALL GAS FIRED OPERATED APPLIANCES (REFER PLAN IF USED). SEE APPLIANCE SCHEDULE AND PLUMBING PLANS IF PROVIDED. PROVIDE ALL NECESSARY ELECTRICAL SUPPLY LINES AND CONNECTIONS TO ALL APPLIANCES AS REQUIRED. SEE APPLIANCE SCHEDULE AND ELECTRICAL POWER PLANS.5. REFRIGERATOR/FREEZER. PROVIDE PURIFIED COLD WATER SUPPLY LINE TO ICE MAKER WITH RECESSED SHUT OFF VALVE. SEE APPLIANCE SCHEDULE. RANGE. TO BE PROVIDED WITH FUEL GAS AND/OR ELECTRICAL SUPPLY AS REQUIRED. VERIFY WITH CLIENT ALL APPLIANCES.6. KITCHEN RANGE HOOD (REFER PLAN IF USED) WITH VENTS CONNECTED TO WALL MOUNTED EXHAUST FANS. VERIFY VENTING REQUIREMENTS WITH MANUFACTURER'S SPECIFICATIONS.CONVECTION/MICROWAVE OVEN. SEE APPLIANCE SCHEDULE. VENTING AS REQUIRED BY MANUFACTURER'S SPECIFICATIONS.7. KITCHEN SINK WITH 1 H.P. MIN. (REFER PLAN IF USED) GARBAGE DISPOSAL. VERIFY WITH CLIENT.8. PLUMBING FIXTURE AND HARDWARE. SEE SCHEDULE. LOW FLOW TOILETS (1.28 GP FLUSH) SHOWER HEAD (2 G.P.M.) FAUCETS (1.5 G.P.M.) PER WATER CONSERVATION CODE REQUIREMENTS. AN APPROVED BACKFLOW PREVENTER IS REQUIRED FOR DRAINAGE PIPING SERVING FIXTURES LOCATED BELOW THE ELEVATION OF THE NEXT UPSTREAM MANHOLE COVER, FIXTURES ABOVE SUCH ELEVATIONS SHALL NOT DISCHARGE THROUGH THE BACKWATER VALVE - CPC710.19. DISHWASHER (REFER PLAN IF USED). VERIFY WITH CLIENT.10. LOWER, UPPER CABINETS OR BUILT IN CABINETRY PER KITCHEN CONSULTANT. VERIFY WITH CLIENT.15. PROVIDE STATE FIRE MARSHAL APPROVED SMOKE ALARMS (DETECTORS). ALARMS SHALL BE HARD WIRED TO SEPARATE CIRCUIT WITH BATTERY BACK UP AS REQUIRED BY ELECTRICAL CODE. DETECTORS SHALL BE INTERCONNECTED AND SOUND AN ALARM AUDIBLE IN ALL OFFICE ROOMS. PART OF SECURITY SYSTEM CONTRACT.16. WATER HEATER (REFER TO MEP PLANS) T.B.D. HOLDING TANK OR SIMILAR. PLUMBER TO SIZE FOR ALL HOT WATER TO RUN SIMULTANEOUSLY. VERIFY WITH T-24 ENERGY CALCULATIONS & PLUMBING PLANS. PROVIDE APPROVED ANCHOR STRAP C.P.C. 510.5.P+T VALVES OUTSIDE. STRAPPED @ TOP & BOTTOM WITH 1 1/2" X 16" GA. STRAP WITH 3/8" X 8" LAG BOLT AT EACH END. PROVIDE R30 ROOF INSULATION AT ROOF, R16 AT ALL EXTERIOR WALLS. PROVIDE R30 ROOF INSULATION AT ROOF, R16 AT ALL EXTERIOR WALLS. REFER TO T-24 ENERGY CALCULATIONS.17. F.A.U. (REFER TO MEP PLANS) PROVIDE COMBUSTION AIR AND CONDENSATE LINE TO OUTSIDE AIR. PROVIDE NIGHT SETBACK THERMOSTAT. SEE T-24 FOR SUMMARY OF SIZE AND MODEL. MOUNT ON 18" HIGH PLYWOOD PLATFORM.11. PROVIDE SHOWER ENCLOSURES (REFER PLAN IF USED) AT ALL SHOWER STALLS SPECIFIED ELSEWHERE. ENCLOSURES SHALL BE A MINIMUM HEIGHT OF 6'-6" MEASURED FROM FINISH FLOOR U.N.O. SHATTERPROOF CLEAR GLASS ENCLOSURE VERIFY W/ CLIENT.5. PROVIDE STATE FIRE MARSHAL APPROVED SMOKE ALARMS (DETECTORS). ALARMS SHALL BE HARD WIRED TO SEPARATE CIRCUIT WITH BATTERY BACK UP AS REQUIRED BY ELECTRICAL CODE. DETECTORS SHALL BE INTERCONNECTED AND SOUND AN ALARM AUDIBLE IN ALL OFFICE ROOMS. PART OF SECURITY SYSTEM CONTRACT.16. WATER HEATER (REFER TO MEP PLANS) T.B.D. HOLDING TANK OR SIMILAR. PLUMBER TO SIZE FOR ALL HOT WATER TO RUN SIMULTANEOUSLY. VERIFY WITH T-24 ENERGY CALCULATIONS & PLUMBING PLANS. PROVIDE APPROVED ANCHOR STRAP C.P.C. 510.5.P+T VALVES OUTSIDE. STRAPPED @ TOP & BOTTOM WITH 1 1/2" X 16" GA. STRAP WITH 3/8" X 8" LAG BOLT AT EACH END. PROVIDE R30 ROOF INSULATION AT ROOF, R16 AT ALL EXTERIOR WALLS. PROVIDE R30 ROOF INSULATION AT ROOF, R16 AT ALL EXTERIOR WALLS. REFER TO T-24 ENERGY CALCULATIONS.17. F.A.U. (REFER TO MEP PLANS) PROVIDE COMBUSTION AIR AND CONDENSATE LINE TO OUTSIDE AIR. PROVIDE NIGHT SETBACK THERMOSTAT. SEE T-24 FOR SUMMARY OF SIZE AND MODEL. MOUNT ON 18" HIGH PLYWOOD PLATFORM.2016 CBC 1205.2 Natural lightThe minimum net glazed area shall be not less than 8 percent of the floor area of the room served.1205.2.1 Adjoining spacesFor the purpose of natural lighting, any room is permitted to be considered as a portion of an adjoining room where one-half of the area of the common wall is open and unobstructed and provides an opening of not less than one-tenth of the floor area of the interior room or 25 square feet (2.32 m2), whichever is greater2016 CBC 1203.5.1 Ventilation area requiredThe openable area of the openings to the outdoors shall be not less than 4 percent of the floor area being ventilated.1203.5.1.1 Adjoining spacesWhere rooms and spaces without openings to the outdoors are ventilated through an adjoining room, the opening to the adjoining room shall be unobstructed and shall have an area of not less than 8 percent of the floor area of the interior room or space, but not less than 25 square feet (2.3 m2). The openable area of the openings to the outdoors shall be based on the total floor area being ventilated.PLAN NOTES:DARIANRADACNO. C-33451RENEWAL DATELICENSEDS TAOECETIHCRA T TFINRIOCALFA2-28-2021ScaleDateDrawn ByChecked ByProject NumberNOVUM ARCHITECTURE116 S. CATALINA AVE #122REDONDO BEACH, CA 90277 TEL: 310-709-4476WWW.NOVUMARCHITECTURE.COM714 PACIFIC COAST HIGHWAY, HUNTINGTON BEACH CA 92648PROGRESS SET -NOT FOR CONSTRUCTION OR BID1/8" = 1'-0"A-2.2HUNTINGTON BEACHMIXED USECheckerAuthor10-23-2020H BeachProposed 2nd & 3rd FLResidential PlansPhat Huong HaAnhHolding LLC1/8" = 1'-0"1Level 21/8" = 1'-0"2Level 31/8" = 1'-0"FLOOR PLAN LEGENDNo. Description Date137 DNDNDNA-3.02A-3.0A-3.1A-3.11211A-4.01A-4.150' - 0"45' - 0"5' - 0"6' - 7 1/2"6' - 6"7' - 7"27' - 7 1/2"4' - 6"10' - 0"6' - 0"19' - 11 1/2"11' - 8 1/2"9' - 6"110' - 0"50' - 0"45' - 0"5' - 0"7' - 1 1/2"93' - 4 1/2"9' - 6"110' - 0"Alley Center LineExisting Adjacent PropertyExisting Adjacent PropertyALLEYALLEYPROPERTY LINEPROPERTY LINESTAIR UP TO 2nd FLOOR DECKFIRE ACCESS STAIRPROPERTY LINE(E) SIDEWALKPACIFIC COAST HIGHWAYExisting Adjacent PropertyPROPOSED 8" WIDE CMU BLOCK WALL ON THE PROPERTY LINEPROPOSED 8" WIDE CMU BLOCK WALL ON THE PROPERTY LINE9' - 6"DECK BELOWDECK BELOW2A-4.0ROOF TOP DECK300 S.F. MAXPROPOSED 42" HIGH A.F.F. GUARDRAILBUILT UP ROOFINGPROPOSED ROOF TOP MECH UNITS SHALL BE UNDER MAX ALLOWED 35'-0" HEIGHT LIMIT & SHALL BE SCREENED BY 42" HIGH A.F.F. GUARDRAIL3' - 0"EXISTING 4'-0" BUILDING SETBACK AT GROUND LEVEL1' - 0"3' - 0"EXISTING 4'-0" BUILDING SETBACK AT GROUND LEVELEXISTING 2'-0" BUILDING SETBACK AT 2nd& 3rd LEVELSELEVROOF STAIRBUILT UP ROOFINGBUILT UP ROOFINGDECK BELOW9' - 6"DECK BELOWDECK BELOWBUILT UP ROOFINGGI DOWNSPOUT W/ OVERFLOW5' - 0"ROOF DECK WALKWAY5' - 0"300 S.F. / 15 = 20 OCCUPANTSBUILT UPROOFINGSOLAR PANELSROOF DECK WALKWAYSOLAR PANELSREAR YARD SETBACKOLD PROPERTY LINENEW PROPERTY LINERAISED BIOPLANTER AT SECOND FLOOR DECK SEE CIVIL PLANS & LANDSCAPE PLANS42" HIGH ABOVE PLANTER"DIRT" GRADE GLASS RAILFOR FALL PROTECTIONPROPOSED ROOF TOP MECH UNITS SHALL BE UNDER MAX ALLOWED 35'-0" HEIGHT LIMIT & SHALL BE SCREENED BY 42" HIGH A.F.F. GUARDRAILVOLUNTARY SETBACK SPACE@ NEIGHBOR WINDOWS FOR NATURAL LIGHT & VENTILATIONVOLUNTARY SETBACK SPACE@ NEIGHBOR WINDOWS FOR NATURAL LIGHT & VENTILATIONGARAGEMECH EQUIPMENTREFER TO MEPVERTICAL RATED SHAFT TO GARAGEMECH EQUIPMENT& ELEV REFER TO MEP3' - 0"6' - 6"A-3.02A-3.0A-3.1A-3.11211A-4.01A-4.1ELEVPROPOSED 42" HIGH A.F.F. GUARDRAIL, TYP AT ROOF DECK13' - 1 1/2"35' - 9"17' - 10 1/2"33' - 9 1/2"9' - 6"45' - 0"4' - 8"0' - 4"7' - 9"5' - 0"BUILT UP ROOFINGSEE 1/A-2.2DECK BELOWDECK BELOW2A-4.02' - 0"STAIR ATROOFPROPOSED 42" HIGH A.F.F. GUARDRAILAWNING AT 3rd FLOORAWNING AT 2nd FLOOR50' - 0"110' - 0"50' - 0"DECK BELOW5' - 0"110' - 0"6' - 7 1/2"6' - 6"7' - 7"27' - 7 1/2"20' - 6"19' - 11 1/2"11' - 8 1/2"9' - 6"0' - 4"44' - 8"4' - 8"0' - 4"300 S.F. / 15 = 20 OCCUPANTS10EXIT ACCESS TRAVEL or CPET = 86.5'20DECK BELOW10' - 0"REAR YARD SETBACKOLD PROPERTY LINENEW PROPERTY LINEBUILT UP ROOFINGSEE 1/A-2.2BUILT UP ROOFINGSEE 1/A-2.2MECH & ELEVSHAFT0' - 0"14' - 3"3' - 0"6' - 6"3' - 0"5' - 0"5' - 0"3' - 0"Existing Adjacent PropertyEXISTING 2'-0" BUILDING SETBACK AT 2nd& 3rd LEVELSAlley Center LineExisting Adjacent PropertyALLEYALLEY1014' - 7 1/2"6' - 6"10' - 0"DECK BELOWDARIANRADACNO. C-33451RENEWAL DATELICENSEDS TAOECETIHCRA T TFINRIOCALFA2-28-2021ScaleDateDrawn ByChecked ByProject NumberNOVUM ARCHITECTURE116 S. CATALINA AVE #122REDONDO BEACH, CA 90277 TEL: 310-709-4476WWW.NOVUMARCHITECTURE.COM714 PACIFIC COAST HIGHWAY, HUNTINGTON BEACH CA 92648PROGRESS SET -NOT FOR CONSTRUCTION OR BID1/8" = 1'-0"A-2.3HUNTINGTON BEACHMIXED USECheckerAuthor10-23-2020H BeachProposed Roof Plan & Stair /Elev at DeckPhat Huong HaAnhHolding LLC1/8" = 1'-0"1ROOF PLAN1/8" = 1'-0"2T.O. ROOF (ELEVATOR, STAIR & ROOF DECK PLAN)No. Description Date138 Level 10' -0"Level 29' -0"Level 318' -6"1A-4.1ROOF12' - 6"FLOOR8' - 6"10'-0" CEILING42" A.F.F.10' - 9"9' - 6"9' - 0"11' - 0"32' - 9 1/2"2.2' Grade DifferencePROPERTY LINENEW PROPERTY LINEAT 3rd FLOOR13' - 1 1/2"35' - 9"51' - 7 1/2"PARKING LEVELACCESSIBLE HANDICAPSTALL PARKINGRESIDENTIAL LEVELRESIDENTIAL LEVELPARKING LEVELRETAIL / OFFICE2A-4.0PER MANUFACTURER8' - 9 1/2"10' - 2 1/2"EL 33.61'EL 42.61'EL 52.11'EL 62.86' TOP OF ROOF(E) TC 31.40' HIGHEST T.O.C.DATUM FOR 35'-0" MAX BUILDING HEIGHT LIMIT.(31.40' + 35' = 66.40' Max Height)MAXIMUM BUILDING HEIGHT35' - 0"ALLEYPACIFIC COAST HIGHWAY10' - 0"RECESSED CAR LIFTEL 33.61'MULTI PLY BUILT UP ROOF PROPOSED ROOF DECK8'-2" CLEAR HEIGHT3' - 6"6" CONCRETE PODIUMSLAB & CONC BEAMSPER STRUCTURALOPEN TRELLISOPEN TRELLIS8' - 5"35'-0" MAX BUILDING HEIGHT LIMIT.(31.40' DATUM + 35' = 66.40' Max Height)PROPOSED STAIR AT ROOFPROPOSED ELEVATOR AT ROOF6' - 7 1/2"6' - 6"13'-6" AT ELEVATOREXCEPTIONS TO HEIGHT LIMITSSECTION 3.2.8. DISTRICT 1(ALLOWED 10'-0" ABOVE MAX BUILDING HEIGHT)EL 42.61'EL 52.11'EL 62.86' TOP OF ROOF42" A.F.F.8' - 9 1/2"MAXIMUM BUILDING HEIGHT35' - 0"8' - 6"8' - 2"RESIDENTIAL LEVELFULLY SPRINKLEREDRESIDENTIAL LEVELFULLY SPRINKLEREDR-2 RESIDENTIALTYPE VA @ 2nd& 3rd FLOORSR-2 RESIDENTIALTYPE VA @ 2nd& 3rd FLOORSS-2 OCCUPANCYENCLOSED GARAGEFULLY SPRINKLEREDType IIA Construction3' - 0"6' - 6"42" A.F.F.2' - 6"2' - 6"2' - 2 1/2"9' - 0"11' - 2 1/2"Basement Level-11' -0"1' - 0"1' - 0"1' - 0"0' - 9"5/8" / 1'-0"MIN 8'-2" HEADCLEARANCEMIN 8'-2" HEADCLEARANCEMIN 8'-2" HEADCLEARANCEOLD PROPERTY LINESETBACK LINE AT REAR10' - 0"25' - 0"Level 10' -0"Level 29' -0"Level 318' -6"1A-4.0PROPERTY LINEPROPERTY LINESLOPED DRIVEWAY & RAMP AT ENTRYExisting AdjacentProperty & BuildingSTAIR TO ROOFTOP DECKMULTI PLY ROOFING SYSTEM3' - 0"2' - 0"43' - 0"5' - 0"5' - 0"RESIDENTIAL ROOF DECKRESIDENTIAL LEVELPARKING LEVEL42" A.F.F.10' - 9"9' - 6"9' - 0"2.2' Grade DifferentialVOLUNTARY SETBACK PARTIAL SETBACKTO BE DETERMINED WITH PLANNING & FIRE DEPARTMENTEXISTING SETBACK AT ADJACENT PROPERTY BUILDINGRECESSED CAR LIFTSEE SITE/ PARKING PLANPER MANUFACTURER4' - 0"0' - 4"SLOPED WALKWAYSEE SITE PLANELEVATOR TO ROOFTOP DECK13'-6" AT ELEVATORNOTE: EXCEPTIONS TO HEIGHT LIMITSSECTION 3.2.8. DISTRICT 1(ALLOWED 10'-0" ABOVE MAX BUILDING HEIGHT)MAXIMUM BUILDING HEIGHT35' - 0"8' - 9 1/2"(E) TC 31.40' HIGHEST T.O.C.DATUM FOR 35'-0" MAX BUILDING HEIGHT LIMIT.(31.40' + 35' = 66.40' Max Height)35'-0" MAX BUILDING HEIGHT LIMIT.(31.40' DATUM + 35' = 66.40' Max Height)EL 33.61'EL 42.61'EL 52.11'EL 62.86' TOP OF ROOF3' - 0"42" A.F.F.RESIDENTIAL LEVELRESIDENTIAL LEVELRESIDENTIAL LEVELR-2 RESIDENTIALTYPE VA @ 2nd& 3rd FLOORSR-2 RESIDENTIALTYPE VA @ 2nd& 3rd FLOORSS-2 OCCUPANCYENCLOSED GARAGEFULLY SPRINKLEREDType IIA Construction2' - 10 1/2"0' - 4"Basement Level-11' -0"9'-6" AT LIFTDARIANRADACNO. C-33451RENEWAL DATELICENSEDS TAOECETIHCRA T TFINRIOCALFA2-28-2021ScaleDateDrawn ByChecked ByProject NumberNOVUM ARCHITECTURE116 S. CATALINA AVE #122REDONDO BEACH, CA 90277 TEL: 310-709-4476WWW.NOVUMARCHITECTURE.COM714 PACIFIC COAST HIGHWAY, HUNTINGTON BEACH CA 92648PROGRESS SET -NOT FOR CONSTRUCTION OR BID3/16" = 1'-0"A-4.0HUNTINGTON BEACHMIXED USECheckerAuthor10-23-2020H BeachBuilding SectionsPhat Huong HaAnhHolding LLC3/16" = 1'-0"1Section 23/16" = 1'-0"2Section 1No. Description Date139 PROPOSEDPROJECTEXISTINGGAS STATIONEXISTINGRESIDENCEPROPOSED ROOF DECKBUILT UP ROOF& SOLAR PANELSBUILT UP ROOF& SOLAR PANELSExisting Adjacent Property716 Pacific Coast HighwayHuntington Beach CAExisting Adjacent Property706 Pacific Coast HighwayHuntington Beach CADARIANRADACNO. C-33451RENEWAL DATELICENSEDS TAOECETIHCRA T TFINRIOCALFA2-28-2021ScaleDateDrawn ByChecked ByProject NumberNOVUM ARCHITECTURE116 S. CATALINA AVE #122REDONDO BEACH, CA 90277 TEL: 310-709-4476WWW.NOVUMARCHITECTURE.COM714 PACIFIC COAST HIGHWAY, HUNTINGTON BEACH CA 92648PROGRESS SET -NOT FOR CONSTRUCTION OR BIDA-6.4HUNTINGTON BEACHMIXED USECheckerAuthor10-23-2020H Beach3D Massing & SiteDiagrammatic ViewsPhat Huong HaAnhHolding LLC1SITE VIEW 1No. Description Date140 PROPOSEDPROJECTEXISTINGGAS STATIONEXISTINGRESIDENCEPROPOSEDROOF DECKAC UNITSSCREENEDBY PARAPETBUILT UP ROOF& SOLAR PANELSBUILT UP ROOF& SOLAR PANELSExisting Adjacent Property716 Pacific Coast HighwayHuntington Beach CAExisting Adjacent Property706 Pacific Coast HighwayHuntington Beach CADARIANRADACNO. C-33451RENEWAL DATELICENSEDS TAOECETIHCRA T TFINRIOCALFA2-28-2021ScaleDateDrawn ByChecked ByProject NumberNOVUM ARCHITECTURE116 S. CATALINA AVE #122REDONDO BEACH, CA 90277 TEL: 310-709-4476WWW.NOVUMARCHITECTURE.COM714 PACIFIC COAST HIGHWAY, HUNTINGTON BEACH CA 92648PROGRESS SET -NOT FOR CONSTRUCTION OR BIDA-6.5HUNTINGTON BEACHMIXED USECheckerAuthor10-23-2020H Beach3D Massing & SiteDiagrammatic ViewsPhat Huong HaAnhHolding LLC1SITE VIEW 2No. Description DateAccent paving at Alley, see Site Plan A-0.0 & Color & Material Board A-6.010'-0" BUILDING SETBACKABOVE 25' PER CODE141 DARIANRADACNO. C-33451RENEWAL DATELICENSEDS TAOECETIHCRA T TFINRIOCALFA2-28-2021ScaleDateDrawn ByChecked ByProject NumberNOVUM ARCHITECTURE116 S. CATALINA AVE #122REDONDO BEACH, CA 90277 TEL: 310-709-4476WWW.NOVUMARCHITECTURE.COM714 PACIFIC COAST HIGHWAY, HUNTINGTON BEACH CA 92648PROGRESS SET -NOT FOR CONSTRUCTION OR BIDA-6.6HUNTINGTON BEACHMIXED USECheckerAuthor10-23-2020H Beach3D Massing ViewDiagrammatic SketchesPhat Huong HaAnhHolding LLCNo. Description Date13D View @ Pacific Coast Highway23D View @ Alley142 PLANNING COMMISSION STAFF REPORT TO: Planning Commission FROM: Ursula Luna-Reynosa, Community Development Director BY: Hayden Beckman, Senior Planner SUBJECT: ..title APPEAL OF THE ZONING ADMINISTRATOR’S APPROVAL OF CONDITIONAL USE PERMIT NO. 20-012, COASTAL DEVELOPMENT PERMIT NO. 20-013, AND SPECIAL PERMIT NO. 20-001 (714 PACIFIC COAST HIGHWAY MIXED USE) REQUEST: CUP/CDP: To permit the construction of a new three-story 12,713 sq. ft. mixed use building at an overall height of 35 feet, which includes a 766 sq. ft. ground floor retail coffee shop; three two - bedroom residential units on the second and third floor; a 149 sq. ft. rooftop deck; an enclosed parking garage for seven parking spaces (four grade level, three subterranean); and two open commercial parking spaces for a total of nine on-site parking spaces. SP: To permit an 18 ft. wide garage access driveway in lieu of a minimum required 20 ft. wide driveway. LOCATION: 714 Pacific Coast Highway, 92648 (North side of PCH, between 7th and 8th St.) ..body APPLICANT/ PROPERTY OWNER: Thanh Dong, Phat Huong Haanh Holdings, LLC, 18961 Flagstaff Lane, Huntington Beach, CA 92646 APPELLANT: Sam Hanna, P.O. Box 519, Tustin, CA 92781 STATEMENT OF ISSUE: 1. Is the project proposal consistent with the City of Huntington Beach’s adopted land use regulations (i.e. General Plan, Zoning Map and Zoning Code including any specific plans and overlay districts where applicable)? 2. Does the project proposal satisfy all the findings required for approving a Conditional Use Permit, Coastal Development Permit, and Special Permit? 3. Has the appropriate level of environmental analysis been determined? 143 RECOMMENDATION: ..recommendation That the Planning Commission take the following actions: A) Find the proposed project categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15332 – Infill Development Projects; and B) Approve Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 with findings and conditions of approval (Attachment No. 1) ..end ALTERNATIVE ACTION(S): A) Do not make the suggested findings, which will result in a mandatory denial per Section 241.10 (c) of the Zoning and Subdivision Ordinance. B) Continue Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 and direct staff accordingly. PROJECT PROPOSAL: The proposed project is a request to construct a new three-story 12,713 sq. ft. mixed use building at an overall height of 35 feet. The mixed use building will include a 766 sq. ft. ground floor retail coffee shop, three two-bedroom residential units on the second and third floor, and a 300 sq. ft. rooftop deck. A ground floor fully enclosed parking garage will provide seven total parking spaces, four grade level and three subterranean in a vertical tandem configuration, as well as two alley-loaded commercial parking spaces for a total of nine on-site parking spaces. Currently, the project site is vacant and undeveloped. A small single family dwelling and oil production facility previously existed on the property, both of which were demolished and removed in 2017. Zoning Administrator Action: CUP No. 20-012 and CDP No. 20-013 were originally scheduled for a public hearing before the Zoning Administrator on October 7, 2020. At the hearing, the project was continued to the November 4, 2020 hearing date at the applicant’s request to address a design issue. On October 15, 2020, the applicant filed a request for a Special Permit pursuant to Section 2.5.6 of the Downtown Specific Plan, to permit an 18 ft. wide garage access drive aisle in lieu of a minimum required 20 ft. wide drive aisle. The project was then presented at the November 4, 2020 Zoning Administrator hearing, and the owner of the adjacent site (716 Pacific Coast Highway), identified multiple concerns with the design of the project. Following discussion between staff, the applicant, and neighboring property owner, the Zoning Administrator approved the project with suggested findings and conditions of approval. 144 Appeal: On November 16, 2020, the Zoning Administrator’s approval was appealed by Sam Hanna, owner of the property immediately to the north (Attachment No. 3). Mr. Hanna identifies concerns with potential impacts to the safety, privacy, and visibility of his property. The appellant also requests revisions to the proposed project’s setbacks to preserve private views of the ocean from his property, and moving th e location of the common open space provided on the rooftop deck to preserve privacy between structures. Further, the letter identifies concerns with an existing public utility pole, trash collection, and truck deliveries. Email correspondences from Mr. Hanna prior to the October 5, 2020 and November 4, 2020 Zoning Administrator hearings are attached for reference (Attachment No. 5). Staff evaluated the project for consistency with development standards of the HBZSO and Downtown Specific Plan and determined that the project furthers the intended development pattern as envisioned by the Specific Plan. There are no provisi ons within the Specific Plan, HBZSO or Coastal Element that require preservation of private views for properties fronting Pacific Coast Highway. The City does not have a view preservation ordinance and Mr. Hanna has not furnished evidence of a private view easement across the subject property. Conversely, the DTSP requires a 5 ft. maximum build-to front setback along Pacific Coast Highway to establish an inviting street presence and foster appropriate commercial and pedestrian connections. A build-to provision differs from a minimum setback standard as it requires a structure within so many feet of a property line as opposed to establishing a minimum separation from the property line. The appellant also identified concerns with the structural integrity and stability during excavation and shoring of the proposed project. It should be noted that the Zoning Administrator reviews and acts only on conceptual plans to determine that the proposed project meets land use, zoning issues, and minimum development standards. As is typical for all entitlements, if the conceptual plans are approved for land use, the architect and civil engineer then prepare grading, shoring, excavation, mechanical, electrical, plumbing, and structural plans for review and approval through the grading and building permit plan check process. An enclosed trash collection room centrally located within the ground floor garage ensures refuse from the commercial and residential tenants is managed entirely onsite. Collection procedures by the refuse company would occur in the public alley similar to all other downtown properties. To abate any nuisance concerns related to the collection and disposal of trash for the project, staff suggests a condition of approval to prohibit disposal of glass and other restaurant or retail refuse between the hours of 10:00 pm and 7:00 am . Smaller commercial projects, such as this one, do not warrant an on-site delivery bay or loading dock and deliveries are expected to occur within the common shared loading zones located throughout Downtown. Deliveries to the commercial tenant would not be permitted to occur in the alley to ensure sufficient vehicular access is maintained at all times for properties served by the alley. Staff is currently working with the Public Works 145 Department to address the utility pole’s status and location within the alley as it relates to the project and will provide the Planning Commission with an update at the December 8 public hearing. A complete discussion of compliance with zoning code development standards can be found in the Zoning Compliance section below. ISSUES AND ANALYSIS: Subject Property And Surrounding General Plan Designations, Zoning And Land Uses: LOCATION GENERAL PLAN ZONING LAND USE Subject Property: M-sp (30-50 du/ac) Mixed Use – Specific Plan Overlay (Max. 30-50 dwelling units per acre) SP5-CZ-O (Downtown Specific Plan District 1 – Coastal Zone Overlay – Oil Overlay) Vacant North of Subject Property: M-sp (30-50 du/ac) SP5-CZ-O (District 1) Live/Work Unit East of Subject Property (Across Alley): RH-sp (Residential High Density – Specific Plan Overlay) SP5-CZ-O (District 4) Single Family Residential South of Subject Property: M-sp (30-50 du/ac) SP5-CZ-O (District 1) 7/11 Service Station and Convenience Market West of Subject Property (Across PCH): M-sp (30-50 du/ac) SP5-CZ (District 7) City Beach/ Huntington Pacific Condominiums General Plan Conformance: The General Plan Land Use Map and zoning designation on the subject property is M -sp (Mixed Use – Specific Plan Overlay). The proposed project will implement both the General Plan and zoning designations of the site. The proposed project is consistent with the intent of these designations, and the goals and policies of the City’s General Plan as follows: Land Use Element Goal LU 1: New commercial, industrial, and residential development is coordinated to ensure that the land use pattern is consistent with the overall goals and needs of the community. Policy LU 1 (A): Ensure that development is consistent with the land use designations presented in the Land Use Map, including density, intensity, and use standards applicable to each land use designation. 146 Policy LU 1 (C): Support infill development, consolidation of parcels, and adaptive reuse of existing buildings. Goal LU 4: A range of housing types is available to meet the diverse economic, physical, and social needs of future and existing residents, while neighborhood character and residences are well maintained and protected. Policy LU 4 (C): Encourage a mix of residential types to accommodate people with diverse housing needs. Goal LU 11: Commercial land uses provide goods and services to meet regional and local needs. Goal LU 1 (B): Encourage new businesses to locate on existing vacant or underutilized commercial properties where these properties have good locations and accessibility. Goal LU 14: Huntington Beach continues to attract visitors and provides a variety of attractions and accommodations during their stay. Policy LU 14 (B): Encourage both coastal and inland visitor-serving uses to offer a wide spectrum of opportunities for residents and visitors Coastal Element Goal C 3: Provide a variety of recreational and visitor commercial serving uses for a range of cost and market preferences. Policy C 3.2.4: Encourage the provision of a variety of visitor-serving commercial establishments within the Coastal Zone, including, but not limited to, shops, restaurants, hotels and motels, and day spas. The new mixed-use building is located in an area designated for commercial uses that will serve tourists and visitors. The proposed project will provide a visitor-serving eating and drinking retail use to meet local and visitor demand. The project provides both a visitor serving commercial use and residential uses that will meet the need of future and existing residents on an underutilized parcel consistent with the General Plan. Further, the project will add new housing opportunities and will provide the City with housing in-lieu fees to fund affordable housing opportunities within the City. Zoning Compliance: The three-story 12,713 sq. ft. mixed use building complies with all development requirements of District 1 of the Downtown Specific Plan, with the exception of the Special Permit for a two ft. reduction in drive aisle width. Pursuant to Section 3.3.1.3 Permitted Uses of the DTSP, development projects on properties with less than 100 feet of frontage are subject to a CUP by the Zoning Administrator. Since the subject property is 50 ft. wide and is located within the appealable jurisdiction of the Coastal Zone, the applicant filed a 147 Conditional Use Permit and Coastal Development Permit request for the proposed project. The project complies with front, side, rear, and residential buffer setback requirements, maximum height, minimum parking requirements, and open space development standards. Provision Required – District 1 Proposed Project Required Setbacks SP 5 Sections 3.3.1.9 – 3.3.1.13 Front Yard: 0 – Max. 5 ft. Interior Side Yard: 0 ft. Rear Yard: 3 ft. Front Yard: 0 ft. Interior Side Yard: 0 ft. Rear Yard: 3 ft. Maximum Height SP 5 Section 3.3.1.8 Maximum 35 ft. height and 3 stories for developments with less than 8,000 sq. ft. net lot size Maximum 35 ft. (including parapet walls) and 3 stories + 10 ft. exception for elevator and stairwell Upper Story Setback SP5 Section 3.3.1.9 10 ft. average setback from ground floor façade for portions of the front façade on the 3rd floor. Complies Residential Buffer SP5 Section 3.2.21  3 ft. minimum rear setback  25 ft. maximum height at rear setback line  45 ft. maximum height at 10 ft. away from rear property line Complies Onsite Parking and Circulation Section 3.2.6 Alleys and Vehicular Access Ways requires new development to provide vehicular access to the site when alleys are provided. The subject site fronts Pacific Coast Highway and is served by a public alley right-of-way along the rear property line. As such, the project has been designed to provide all vehicular access to and from the site via the existing alley. The project will provide a total of nine on-site parking spaces. Three parking spaces are required for the 766 sq. ft. retail commercial tenant space; two spaces for commercial visitors are unenclosed and accessible from the alley and the third commercial visitor parking space is an ADA accessible space and provided within an enclosed parking garage accessible from the alley via an 18 ft. wide driveway. Staff recommends a condition of approval to require the garage to be open and accessible during all business hours. Each of the three residential units features two bedrooms and will require two parking spaces in accordance with Specific Plan and Coastal Zone requirements, for a total of six residential parking spaces. The project provides six parking spaces in a vertical tandem configuration within the enclosed parking garage. Residents will have private access to and use of mechanical lifts that enable the parking of two vehicles stacked on 148 top of one another. The lifts are operable whether or not a vehicle is already parked on the at-grade space. Although a vertical tandem parking configuration has not yet been constructed in Huntington Beach, the proposed configuration is consistent with the definition of tandem parking as identified in Chapter 203 of the HBZSO. Provision of mechanical lifts for residential parking differs from lifts for commercial spaces , as a parking lot attendant or valet would be not be required to operate the residential spaces. Each residential unit is also required to provide 0.25 guest spaces. Therefore, one additional parking space is required for residential guests of the project. The Specific Plan permits residential guest parking and commercial parking be shared for mixed -use projects. Therefore, the additional parking space for residential guests is provided for by one of the three commercial parking spaces provided on-site. Shared residential guest and commercial parking for mixed-use projects is permitted due to the divergence of uses between commercial operating hours and demand for residential guest parking. Open Space Pursuant to Section 3.2.16 Open Space for Multi-Family Residential Development, the project is required to provide a minimum total of 450 sq. ft. of open space (private and common). The structure will provide 896 sq. ft. of private open space between the three units, and a 300 sq. ft. rooftop deck for resident common open space. Refer to the open space breakdown below: Open Space Required: a. 150 sq. ft. minimum total per unit (common and private) - 150 x 3 = 450 sq. ft. minimum total (common and private) b. 60 sq. ft. of private open space per unit for two bedroom units - 60 x 3 units = 180 sq. ft. private open space c. Remaining common open space minimum = 270 sq. ft. Open Space Provided: Common Open Space: Rooftop Deck - 300 sq. ft. Unit 1 (2nd Floor) Private Open Space: Balcony 1 – 140 sq. ft. Unit 2 (2nd Floor) Private Open Space: Balcony 1 – 159 sq. ft. Balcony 2 – 54 sq. ft. Total = 213 sq. ft. Unit 3 (3rd Floor) Private Open Space: Balcony 1 – 285 sq. ft. Balcony 2 – 312 sq. ft. 149 Total = 597 sq. ft. TOTAL PROVIDED - 1,250 sq. ft. Public Open Space Nonresidential development in SP5 is required to provide a minimum of 5% of net site area as private open space. However, mixed-use developments that include residential units may reduce the public open space to 3% of the net site area as private open space, so long as all private open space minimums are met. The subject property’s net site area is 5,175 sq. ft., 3% of which is 155.25 sq. ft. The project will provide 172 sq. ft. of public open space accessible from the public right-of-way along Pacific Coast Highway in accordance with this requirement, since the propose project is providing more than the required private open space. A minimum of 30% of the public open space area is required to contain landscaping, including shade or accent trees, other soft landscaping, and hard surfaced or specialty paving is required to be incorporated into the public open space design. Affordable Housing Projects that propose three or more units are subject to provide affordable housing per Section 230.26 of the HBZSO. A minimum of 10 percent of new residential construction are required to be affordable housing units. This obligation can be provided on-site, off- site or, for projects with 30 or fewer units, through payment of in -lieu fees. The project applicant is proposing to pay in-lieu fees to satisfy the affordable housing requirement. The current in-lieu fee for a three-unit project is $58,080, however, the applicant will be required to pay the fee in effect at the time building permits are issued for the residential units. A condition of approval is recommended to require payment of in-lieu fees in accordance with Section 230.26. Special Permit The applicant requests Special Permit No. 20-001, to permit an 18 ft. wide garage access driveway in lieu of the minimum required 20 ft. wide driveway. Downtown Specific Plan Section 3.2.7 Private Access Ways identifies that private access ways shall be developed pursuant to Chapter 231 of the HBZSO. The HBZSO currently identifies minimum development standards for driveway width in Section 231.18 Design Standards for single- and multi-family development. The most appropriate development standard for the subject project is to apply the multi-family minimum driveway width requirement of 20 ft. There is no standard in either the Downtown Specific Plan or HBZSO that is applicable to mixed-use developments. The Traffic Engineering Division of the Public Works Department supports the request finding that the proposed driveway at 18 ft. wide will function properly for the project. Staff supports the request for a Special Permit, finding that an 18 ft. wide garage access can accommodate ingress and egress of two vehicles, and with the proposed garage door, 150 will be compatible with the architectural character of the surrounding neighborhood. Additionally, the low volume of vehicles accessing the project’s residential spaces and single interior commercial space results in a low likelihood of multiple vehicles trying to enter or exit the garage at the same time. Residents of the project will be the most familiar with each other’s vehicles and the conditions of the space, as they will utiliz e the garage on a daily basis, further reducing the frequency of congestion or incidents. The Zoning Administrator’s November 4, 2020 action included approval of the Special Permit request consistent with staff’s recommendation. Urban Design Guidelines Conformance: Chapter 4.5 Special Design Considerations of the Downtown Specific Plan contains guidelines specific to mixed-use development. Generally, mixed-use projects should follow the relevant guidelines for each element of the project; commercial storefronts should be consistent with the commercial sections and residential portio ns should be designed in accordance with the residential sections of the Huntington Beach Design Guidelines. The proposed mixed-use project conforms to the relevant objectives and standards contained in the Guidelines. The project provides high quality architectural design in massing and scale with existing developments surrounding the project site and improves the urban streetscape along Pacific Coast Highway, one of the most visually attractive streets in the City. There is no particular architectural style requirement for mixed-use or multi-family residential developments; however, the focus is on developing a high quality residential environment. The project meets that Design Guideline intent by creating visual interest and an identity that enhances the existing neighborhood with its contemporary architectural design while maintaining a sense of harmony with the surrounding buildings. The building also provides visual interest with varied wall planes, and a mix of colors and materials such as smooth plaster, metal guardrails and canopy accents, and hardie panel exterior finishes. Security for residents has been incorporated into all aspects of ingress and egress for the site. Lastly, the project exceeds the minimum allowable setback along the shared northern property line to increase light and ventilation between the neighboring live/work development. Environmental Status: The project will not have any significant effect on the environment and is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to section 15332 of the CEQA Guidelines, because the project is characterized as in -fill development that meets the following criteria: a. The project is consistent with the applicable General Plan designation and al l applicable general plan policies as well as with applicable zoning designation and regulations. b. The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses. c. The project site has no value as habitat for endangered, rare or threatened species. 151 d. Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality. e. The site can be adequately served by all required utilities and public services. Coastal Status: The project involves development of a new three-story mixed-use structure on a property that is located within the appealable area of the Coastal Zone. The project provides minimum parking for all uses onsite, is located within an urban area with sufficient utilities and infrastructure to support the new development, and will not impede public coastal access. The proposed project, with exception to the request for a Special Permit, complies with the requirements of the Downtown Specific Plan. Design Review Board: On August 13, 2020, the Design Review Board reviewed the proposed project and recommends approval with a condition that there be no pilasters located on the second floor to provide a cohesive modern design from the PCH streetscape. There were no other design related issues raised by the Board. Staff concurs with this recommended condition of approval. Other Departments Concerns and Requirements: The Departments of Community Development, Public Works, and Fire have reviewed the project and identified a list of applicable code requirements (Attachment No. 4). Public Notification: Legal notice was published in the Orange County Register on November 26, 2020, and notices were sent to property owners of record and occupants within a 500 ft. radius of the subject property, individuals/organizations requesting notification (Community Development Department’s Notification Matrix), applicant, and appellant. Written communications received prior to the December 8, 2020 Planning Commission meeting will be forwarded to the Planning Commission. Application Processing Dates: DATE OF COMPLETE APPLICATION: MANDATORY PROCESSING DATE(S): July 27, 2020 *September 27, 2020 - Suspended *CA Governor Gavin Newsom issued Executive Order N-52-20 on March 4, 2020 announcing that, in response to the proclamation of a State of Emergency, the time limits set forth in the Permit Streamlining Act were temporarily suspended. In any event, the first Zoning Administrator meeting was held October 7, 2020, and subsequently continued to November 4, 2020. SUMMARY: Staff recommends approval of Conditional Use Permit No. 20-012, Coastal Development Permit No. 20-013, and Special Permit No. 20-001 based on the following: 152 - Consistent with the M - sp (Mixed Use - Specific Plan Overlay) Land Use Designation of the General Plan and the SP 5 - CZ (Downtown Specific Plan - Coastal Zone Overlay) zoning designation; - Project proposal satisfies all the findings required for approving a Conditional Use Permit, Coastal Development Permit, and Special Permit; - Compatibility with the surrounding uses; and - Provides expanded services and housing to meet local and regional community needs. ATTACHMENTS: 1. Suggested Findings and Conditions of Approval 2. Conceptual Site Plan, Floor Plans, and Elevations received and dated October 23, 2020 3. Appeal Letter from Sam Hanna received and dated November 13, 2020 4. Code Requirements Letter dated July 8, 2020 (for informational purposes only) 5. Sam Hanna Email Correspondences 153 154 155 156 157 158 159 July 8, 2020 Thanh Dong Phat Huong Haanh Holdings, LLC 18961 Flagstaff Lane Huntington Beach, CA 92646 SUBJECT: CONDITIONAL USE PERMIT NO. 20-012 / COASTAL DEVELOPMENT PERMIT NO. 20-013 (714 PCH MIXED USE)—714 PACIFIC COAST HIGHWAY, 92648 PROJECT IMPLEMENTATION CODE REQUIREMENTS Dear Thanh Dong: In order to assist you with your development proposal, staff has reviewed the project and identified applicable city policies, standard plans, and development and use requirements, excerpted from the City of Huntington Beach Zoning & Subdivision Ordinance and Municipal Codes. This list is intended to help you through the permitting process and various stages of project implementation. It should be noted that this requirement list is in addition to any “conditions of approval” adopted by the Zoning Administrator. Please note that if the design of your project or site conditions change, the list may also change. If you would like a clarification of any of these requirements, an explanation of the Huntington Beach Zoning & Subdivision Ordinance and Municipal Codes, or believe some of the items listed do not apply to your project, and/or you would like to discuss them in further detail, please contact me at 714-536-5561 (hayden.beckman@surfcity-hb.org) and/or the respective source department (contact person below). Sincerely, HAYDEN BECKMAN Senior Planner Enclosures cc: Khoa Duong, Building Division – 714-989-0213 Steve Eros, Fire Department – 714-374-5344 Michelle Boldt, Police – 949-290-1604 Jane James, Planning Manager Project File 160 HUNTINGTON BEACH COMMUNITY DEVELOPMENT DEPARTMENT PROJECT IMPLEMENTATION CODE REQUIREMENTS DATE: JULY 8 2020 PROJECT NAME: 714 PCH MIXED USE PROJECT PLANNING APPLICATION NO. PLANNING APPLICATION NO. 20-083 ENTITLEMENTS: CONDITIONAL USE PERMIT NO. 20-012 / COASTAL DEVELOPMENT PERMIT NO. 20-013 (714 PCH MIXED USE) DATE OF PLANS: MAY 18, 2020 PROJECT LOCATION: 714 PCH, 92648 (NORTH SIDE OF PCH, BETWEEN 7TH STREET AND 8TH STREET PLAN REVIEWER: HAYDEN BECKMAN, SENIOR PLANNER TELEPHONE/E-MAIL: 714-536-5561 / HAYDEN.BECKMAN@SURFCITY-HB.ORG PROJECT DESCRIPTION: TO PERMIT THE CONSTRUCTION OF A NEW THREE-STORY MIXED USE BUILDING THAT INCLUDES A 766 SQ. FT. GROUND FLOOR RETAIL COFFEE SHOP AND 172 SQ. FT. PUBLIC OPEN SPACE ARE FRONTING PACIFIC COAST HIGHWAY, THREE (3) NEW 2-BEDROOM RESIDENTIAL UNITS ON THE SECOND AND THIRD FLOOR, AND A 149 SQ. FT. ROOFTOP DECK. THE GROUND FLOOR INCLUDES AN ENCLOSED PARKING GARAGE PROVIDING A TOTAL OF SEVEN PARKING SPACES (4 GRADE LEVEL, (1 ADA), 3 SUBTERRANEAN). TWO ADDITIONAL PARKING SPACES ARE PROVIDED WITH ACCESS FROM THE ALLEY. The following is a list of code requirements deemed applicable to the proposed project based on plans stated above. The list is intended to assist the applicant by identifying requirements which must be satisfied during the various stages of project permitting and implementation. A list of conditions of approval adopted by the Zoning Administrator in conjunction with the requested entitlement(s), if any, will also be provided should final project approval be received. If you have any questions regarding these requirements, please contact the Plan Reviewer. 1. Prior to submittal for building permits, the following shall be completed: a. A minimum of 14 days prior to submittal for building permits, an application for address assignment, along with the corresponding application processing fee and applicable plans (as specified in the address assignment application form), shall be submitted to the Community Development Department. (City Specification No. 409) 161 Page 2 of 6 3. During demolition, grading, site development, and/or construction, the following shall be adhered to: a. All Huntington Beach Zoning and Subdivision Ordinance and Municipal Code requirements including the Noise Ordinance. All activities including truck deliveries associated with construction, grading, remodeling, or repair shall be limited to Monday - Saturday 7:00 AM to 8:00 PM. Such activities are prohibited Sundays and Federal holidays. (HBMC 8.40.090) 4. The Departments of Community Development, Public Works and Fire shall be responsible for ensuring compliance with all conditions of approval herein as noted after each condition. The Community Development Director and Public Works Director shall be notified in writing if any changes to parcel/tract map are proposed during the plan check process. Permits shall not be issued until the Community Development Director and Public Works Director have reviewed and approved the proposed changes for conformance with the intent of the Planning Commission’s /Zoning Administrator's action and the conditions herein. If the proposed changes are of a substantial nature, an amendment to the original entitlement reviewed by the Planning Commission /Zoning Administrator may be required pursuant to the HBZSO. (HBZSO Section 241.10) 5. The development shall comply with all applicable requirements of the Municipal Code, Community Development Department, and Fire Department, as well as all applicable local, State and Federal Codes, Ordinances and standards, except as noted herein. (City Charter, Article V) 6. Construction shall be limited to Monday – Saturday 7:00 AM to 8:00 PM. Construction shall be prohibited Sundays and Federal holidays. (HBMC 8.40.090) 7. The applicant shall submit a check in the amount of $50 for the posting of a Notice of Exemption at the County of Orange Clerk’s Office. The check shall be made out to the County of Orange and submitted to the Planning Division within two (2) days of the Zoning Administrator's action. (California Code Section 15094) 8. All landscaping shall be maintained in a neat and clean manner, and in conformance with the HBZSO. Prior to removing or replacing any landscaped areas, check with Community Development Department and Public Works for code requirements. Substantial changes may require approval by the Zoning Administrator. (HBZSO Section 232.04) CONDITIONAL USE PERMIT NO. 20-012/COASTAL DEVELOPMENT NO. 20-013: 1. The site plan, floor plans, and elevations approved by the Zoning Administrator shall be the conceptually approved design (with the following modifications). a. Parking lot striping shall comply with Chapter 231 of the Zoning and Subdivision Ordinance and Title 24, California Administrative Code. (HBZSO Chapter 231) b. The site plan shall include all utility apparatus, such as but not limited to, backflow devices and Edison transformers. Utility meters shall be screened from view from public right-of-ways. Electric transformers in a required front or street side yard shall be enclosed in subsurface vaults. Backf low prevention devices shall be not be located in the front yard setback and shall be screened from view. (HBZSO Section 230.76) c. All exterior mechanical equipment shall be screened from view on all sides. Rooftop mechanical equipment shall be setback a minimum of 15 feet from the exterior edges of the building. Equipment to be screened includes, but is not limited to, heating, air conditioning, refrigeration 162 Page 3 of 6 equipment, plumbing lines, ductwork and transformers. Said screening shall be architecturally compatible with the building in terms of materials and colors. If screening is not designed specifically into the building, a rooftop mechanical equipment plan showing proposed screening must be submitted for review and approval with the application for building permit(s). (HBZSO Section 230.76) d. The site plan and elevations shall include the location of all gas meters, water meters, electrical panels, air conditioning units, mailboxes (as approved by the United States Postal Service), and similar items. If located on a building, they shall be architecturally integrated with the design of the building, non-obtrusive, not interfere with sidewalk areas and comply with required setbacks. (HBZSO Section 230.76) e. The separation between the building wall and north and south property lines shall not exceed two (2) inches. Buildings located adjacent to property lines shall be designed for 2” maximum out of plane displacement resulting from prescribed lateral forces specified by the California Building Code. A maintenance easement agreement shall be submitted by the applicant for review and approval by the Community Development Department. The approved agreement shall be recorded with the County Recorder. (HBZSO Section 210.06.J) f. All parking area lighting shall be energy efficient and designed so as not to produce glare on adjacent residential properties. Security lighting shall be provided in areas accessible to the public during nighttime hours, and such lighting shall be on a time-clock or photo-sensor system. (HBZSO 231.18.C) g. Bicycle parking facilities shall be provided in accordance with the provisions of HBZSO Section 231.20 – Bicycle Parking. (HBZSO Section 231.20) 3. Prior to issuance of grading permits, the following shall be completed: a. A Landscape and Irrigation Plan, prepared by a Licensed Landscape Architect shall be submitted to the Community Development Department for review and approval. (HBZSO Section 232.04) b. “Smart irrigation controllers” and/or other innovative means to reduce the quantity of runoff shall be installed. (HBZSO Section 232.04.D) c. Standard landscape code requirements apply. (HBZSO Chapter 232) d. All landscape planting, irrigation and maintenance shall comply with the City Arboricultural and Landscape Standards and Specifications. (HBZSO Section 232.04.B) e. Landscaping plans should utilize native, drought-tolerant landscape materials where appropriate and feasible. (HBZSO Section 232.06.A) f. A Consulting Arborist (approved by the City Landscape Architect) shall review the final landscape tree-planting plan and approve in writing the selection and locations proposed for new trees. Said Arborist signature shall be incorporated onto the Landscape Architect’s plans and shall include the Arborist’s name, certificate number and the Arborist’s wet signature on the final plan. (Resolution No. 4545) 4. Prior to submittal for building permits, the following shall be completed: 163 Page 4 of 6 a. Residential type structures on the subject property, whether attached or detached, shall be constructed in compliance with the State acoustical standards set forth for units that lie within the 60 CNEL contours of the property. Evidence of compliance shall consist of submittal of an acoustical analysis report and plans, prepared under the supervision of a person experienced in the field of acoustical engineering, with the application for building permits. (General Plan Policy N 1.2.1) 5. Prior to issuance of building permits, the following shall be completed: a. An Affordable Housing Agreement in accord with Section 230.26 of the ZSO. (HBZSO Section 230.26) b. The Downtown Specific Plan fee shall be paid. (Resolution No. 5328) c. All new commercial and industrial development and all new residential development not covered by Chapter 254 of the Huntington Beach Zoning and Subdivision Ordinance, except for mobile home parks, shall pay a park fee, pursuant to the provisions of HBZSO Section 230.20 – Payment of Park Fee. The fees shall be paid and calculated according to a schedule adopted by City Council resolution. (City of Huntington Beach Community Development Department Fee Schedule) 6. During demolition, grading, site development, and/or construction, the following shall be adhered to: a. Existing street tree(s) to be inspected by the City Inspector during removal of concrete and prior to replacement thereof. Tree replacement or root/tree protection, will be specified upon the inspection of the root system. (Resolution No. 4545) b. All Huntington Beach Zoning and Subdivision Ordinance and Municipal Code requirements including the Noise Ordinance. All activities including truck deliveries associated with construction, grading, remodeling, or repair shall be limited to Monday - Saturday 7:00 AM to 8:00 PM. Such activities are prohibited Sundays and Federal holidays. (HBMC 8.40.090) 7. The structure cannot be occupied, the final building permits cannot be approved, and utilities cannot be released for the first residential unit until the following has been completed: a. A Certificate of Occupancy must be approved by the Community Development Department and issued by the Building and Safety Department. (HBMC 17.04.036) b. Complete all improvements as shown on the approved grading, landscape and improvement plans. (HBMC 17.05) c. All trees shall be maintained or planted in accordance to the requirements of Chapter 232. (HBZSO Chapter 232) d. All landscape irrigation and planting installation shall be certified to be in conformance to the City approved landscape plans by the Landscape Architect of record in written form to the City Landscape Architect. (HBZSO Section 232.04.D) 164 Page 5 of 6 e. The provisions of the Water Efficient Landscape Requirements shall be implemented. (HBMC 14.52) 8. The use shall comply with the following: a. Outdoor storage and display of merchandise, materials, or equipment, including display of merchandise, materials, and equipment for customer pick-up, shall be subject to approval of Conditional Use Permit. (HBZSO Section 230.74) 9. The Development Services Departments (Planning and Building, Fire, Planning and Public Works) shall be responsible for ensuring compliance with all applicable code requirements and conditions of approval. The Community Development Director may approve minor amendments to plans and/or conditions of approval as appropriate based on changed circumstances, new information or other relevant factors. Any proposed plan/project revisions shall be called out on the plan sets submitted for building permits. Permits shall not be issued until the Development Services Departments have reviewed and approved the proposed changes for conformance with the intent of the Zoning Administrator's action. If the proposed changes are of a substantial nature, an amendment to the original entitlement reviewed by the Planning Commission /Zoning Administrator may be required pursuant to the provisions of HBZSO Section 241.18. (HBZSO Section 241.18) 10. Conditional Use Permit No. 20-012 and Coastal Development Permit No. 20-013 shall not become effective until the appeal period following the approval of the entitlements have elapsed. ((HBZSO Section 241.14) 11. The Zoning Administrator reserves the right to revoke Conditional Use Permit No. 20-012 and Coastal Development Permit No. 20-013 pursuant to a public hearing for revocation, if any violation of the conditions of approval, Huntington Beach Zoning and Subdivision Ordinance or Municipal Code occurs. (HBZSO Section 241.16.D) 12. The project shall comply with all applicable requirements of the Municipal Code, Planning and Building Department and Fire Department, as well as applicable local, State and Federal Fire Codes, Ordinances, and standards, except as noted herein. (City Charter, Article V) 13. Construction shall be limited to Monday – Saturday 7:00 AM to 8:00 PM. Construction shall be prohibited Sundays and Federal holidays. (HBMC 8.40.090) 14. All landscaping shall be maintained in a neat and clean manner, and in conformance with the HBZSO. Prior to removing or replacing any landscaped areas, check with the Departments of Planning and Building, and Public Works for Code requirements. Substantial changes may require approval by the Planning Commission (Zoning Administrator). (HBZSO Section 232.04) 15. All permanent, temporary, or promotional signs shall conform to Chapter 233 of the HBZSO. Prior to installing any new signs, changing sign faces, or installing promotional signs, applicable permit(s) shall be obtained from the Planning and Building Department. Violations of this ordinance requirement may result in permit revocation, recovery of code enforcement costs, and removal of installed signs. (HBZSO Chapter 233) 16. Live entertainment and/or outdoor dining in excess of 400 sq. ft. shall not be permitted unless a conditional use permit for this specific use is reviewed and approved. Outdoor dining occupying less 165 Page 6 of 6 than 400 sq. ft. is subject to Neighborhood Notification and approval by the Director of Planning. (HBZSO Section 211.04) 17. Alcoholic beverage sales shall be prohibited unless a conditional use permit for this particular use is reviewed and approved. (HBZSO Section 211.04) 166 CITY OF HUNTINGTON BEACH PROJECT IMPLEMENTATION CODE REQUIREMENTS DATE: JUNE 30, 2020 PROJECT NAME: 714 PCH MIXED USE BUILDING PLANNING APPLICATION NO.: PLANNING APPLICATION NO. 20-083 ENTITLEMENTS: CONDITIONAL USE PERMIT NO. 20-012 COASTAL DEVELOPMENT PERMIT NO. 20-013 DESIGN REVIEW NO. 20-002 DATE OF PLANS: MAY 19, 2020 PROJECT LOCATION: 712 PACIFIC COAST HIGHWAY, 92648 (NORTH SIDE OF PCH, 115 LINEAR FEET SOUTH OF THE INTERSECTION OF 7th STREET AT PCH) APN 024-124-18 PROJECT PLANNER: HAYDEN BECKMAN, SENIOR PLANNER PLAN REVIEWER: KHOA DUONG, P.E TELEPHONE/E-MAIL: (714) 989-0213 PROJECT DESCRIPTION: TO PERMIT THE CONSTRUCTION OF A NEW THREE STORY MIXED- USE BUILDING THAT INCLUDES A 766 SQ. FT. GROUND FLOOR RETAIL SPACE AND 172 SQ. FT. PUBLIC OPEN SPACE AREA FRONTING PCH, THREE (3) NEW 2-BEDROOM RESIDENTIAL UNITS ON THE SECOND AND THIRD FLOOR, AND 149 SQ. FT. ROOFTOP DECK FACING PCH. THE GROUND FLOOR OF THE PROPOSED BUILDING INCLUDES AN ENCLOSED PARKING GARAGE PROVIDING A TOTAL OF SEVEN (7) PARKING SPACES (4 GRADE LEVEL (1 ADA), 3 SUBTERRANEAN). TWO ADDITIONAL ON-SITE PARKING PACES ARE PROVIDED WITH ACCESS FROM THE ALLEY. The following is a list of code requirements deemed applicable to the proposed project based on plans stated above. The list is intended to assist the applicant by identifying requirements which must be satisfied during the various stages of project permitting and implementation. A list of conditions of approval adopted by the Planning Commission in conjunction with the requested entitlement(s), if any, will also be provided upon final project approval. If you have any questions regarding these requirements, please contact the Plan Reviewer. I. REQUIREMENTS: 1. Development Impact Fees will be required for new construction. 2. Submit separate plans for all disciplines; Building 3 sets, MEP 2 sets each. 167 Page 2 of 3 3. Landscape plan is a separate submittal for irrigation and plants only. No accessory structures or flat work will be reviewed on the landscape plans. 4. All site work for accessibility will be reviewed and inspected based on the approved architectural plans. 5. All accessory and minor accessory structures including site MEP will be on separate permits. II. CODE REQUIREMENTS BASED ON PLANS & DRAWINGS SUBMITTED: 1. Project shall comply with the current state building codes adopted by the city at the time of permit application submittal. Currently they are 2019 California Building Code (CBC), 2019 California Mechanical Code, 2019 California Plumbing Code, 2019 California Electrical Code, 2019 California Energy Code, 2019 California Green Building Standards Code, and the Huntington Beach Municipal Code (HBMC). Compliance to all applicable state and local codes is required prior to issuance of building permit.  Please update “Codes & Regulations shown on sheet A-0.0.  Also, please check all code references shown on plans. 2. Provide all project implementation code requirements and conditions of approval on the approved building plans. 3. Provide complete Site plan to show: a. For zero setback, please provide structural calculations to verify the required setback distance due to building deflection. 4. Occupancy group B/ or M (retail) must be shown on Code Analysis. 5. For mixed use and occupancy, please comply with Section 508 of 2016 CBC. 6. Exterior walls and openings in exterior wall must comply with Section 705. 7. Please specify on Roof plan the proposed use of roof deck. 8. Provide egress plan – a. Provide occupant load calculations to show the occupant load in each area/room along with occupant load factors. Retail/Office, occupant load factor of 60 sqft/occ shall be used instead of 100 sqft/occ. b. Interior exit stairways must comply with Section 1023 of 2016 CBC. c. Please check the distance of travel for one exit. d. The number of exits must comply with Table 1006.3.2(2). 9. Provide compliance to disabled accessibility requirements of Chapters 11A and 11B of the 2016 CBC as applicable. a. Please indicate on Site plan the accessible path of travel from accessible parking stall to the building entrances along with maximum slope of 5%; and cross slope of 2%. b. Show location of all curb ramps/truncated domes within the accessible paths of travel. c. Provide details for accessible ramps. d. At least one accessible parking stall shall be provided in open parking garage. e. Enclosed parking garage shall have a minimum clearance high of 8’-2”. Please clarify on building Sections. 168 Page 3 of 3 10. For apartment – a. Dwelling units shall comply with Chapter 11A Division IV as all units are served by an elevator. b. Bathrooms in dwelling unit units shall comply with 1134A.2 Option 1 or 2. If Option 2 is selected a least one shower shall comply with 1134A.6. 11. Review and provide compliance with Title 17 of the City of Huntington Beach Municipal Code, Building and Construction. This document can be found online on the city’s website. 12. For projects that will include multiple licensed professions in multiple disciplines, i.e. Architect and professional engineers for specific disciplines, a Design Professional in Responsible Charge will be requested per the 2016 CBC, Section 107.3.4. 13. In addition to all of the code requirements of the 2016 California Green Building Standards Code, specifically address Construction Waste Management per Sections 4.408.2, 4.408.3, 4.408.4, 5.408.1.1, 5.408.1.2, 5.408.1.3 and Building Maintenance and Operation, Section 5.410. Prior to the issuance of a building permit the permitee will be required to describe how they will comply with the sections described above. Prior to Building Final Approval, the city will require a Waste Diversion Report per Sections 4.408.5 and 5.408.1.4. 14. The City of Huntington Beach has adopted the 2016 California Green Building Standards Code, including Sections 4.106.4.1 for Electric Vehicle (EV) Charging for New Construction, and 5.106.5.3 Electric Vehicle (EV) Charging. 15. Trash enclosure is required to be covered. 16. Mandatory requirements for solar ready buildings CALGREEN Section 110.10 17. Parking spaces, access aisles and vehicular routes serving them shall provide a vertical clearance of 98 inches. All other areas of the garage shall have a minimum vertical clearance of 84 inches. 11B-502.5 and 406.4.1 18. Two-way communication shall be required at elevator landings on each floor above the first floor. 1009.8 III. COMMENTS: 1. Planning and Building Department encourage the use of pre-submittal building plan check meetings. 2. Separate Building, Mechanical, Electrical and Plumbing Permits will be required for all exterior accessory elements of the project, including but not limited to: fireplaces, fountains, sculptures, light poles, walls and fences over 42” high, retaining walls over 2’ high, detached trellises/patio covers, gas piping, water service, backflow anti-siphon, electrical, meter pedestals/electrical panels, swimming pools, storage racks for industrial/commercial projects. It will be the design professional in charge, responsibility to coordinate and submit the documents for the work described above. 3. Provide on all plan submittals for building, mechanical, electrical and plumbing permits, the Conditions of Approval and Code Requirements that are associated with the project through the entitlement process. If there is a WQMP, it is required to be attached to the plumbing plans for plan check. 169 170 171 172 173 174 175 CITY OF HUNTINGTON BEACH PROJECT IMPLEMENTATION CODE REQUIREMENTS DATE: , 2020 PROJECT NAME: 714 PCH MIXED USE BUILDING PLANNING APPLICATION NO.: PLANNING APPLICATION NO. 20-083 ENTITLEMENTS: CONDITIONAL USE PERMIT NO. 20-012 COASTAL DEVELOPMENT PERMIT NO. 20-013 DESIGN REVIEW NO. 20-002 DATE OF PLANS: MAY 19, 2020 PROJECT LOCATION: 712 PACIFIC COAST HIGHWAY, 92648 (NORTH SIDE OF PCH, 115 LINEAR FEET SOUTH OF THE INTERSECTION OF 7th STREET AT PCH) APN 024-124-18 PROJECT PLANNER: HAYDEN BECKMAN, SENIOR PLANNER PLAN REVIEWER: JACOB WORTHY, FIRE PROTECTECTION ANALYST TELEPHONE/E-MAIL: (714) 374-5344 / Jacob.Worthy@surfcity-hb.org PROJECT DESCRIPTION: TO PERMIT THE CONSTRUCTION OF A NEW THREE STORY MIXED- USE BUILDING THAT INCLUDES A 766 SQ. FT. GROUND FLOOR RETAIL SPACE AND 172 SQ. FT. PUBLIC OPEN SPACE AREA FRONTING PCH, THREE (3) NEW 2-BEDROOM RESIDENTIAL UNITS ON THE SECOND AND THIRD FLOOR, AND 149 SQ. FT. ROOFTOP DECK FACING PCH. THE GROUND FLOOR OF THE PROPOSED BUILDING INCLUDES AN ENCLOSED PARKING GARAGE PROVIDING A TOTAL OF SEVEN (7) PARKING SPACES (4 GRADE LEVEL (1 ADA), 3 SUBTERRANEAN). TWO ADDITIONAL ON-SITE PARKING PACES ARE PROVIDED WITH ACCESS FROM THE ALLEY. The following is a list of code requirements deemed applicable to the proposed project based on plans stated above. The list is intended to assist the applicant by identifying requirements which must be satisfied during the various stages of project permitting and implementation. A list of conditions of approval adopted by the Planning Commission in conjunction with the requested entitlement(s), if any, will also be provided upon final project approval. If you have any questions regarding these requirements, please contact the Plan Reviewer. PRIOR TO DEMOLITION, GRADING, SITE DEVELOPMENT, ISSUANCE OF GRADING PERM ITS, BUILDING PERMITS, AND/OR CONSTRUCTION, COMPLIANCE WITH THE REQUIREMENTS LISTED ON THE FOLLOWING PAGES SHALL BE DEMONSTATED: 1. Fire Master Plan 176 Page 2 of 9 The Fire Master Plan shall be completed and approved prior to precise grading plan or building plan approval. A separate Fire Master Plan is required for submittal to the HBFD. It shall be a site plan reflecting all the following fire department related items:  Fire hydrant locations.  FDC locations.  Dimensions from FDC’s to hydrants.  DCDA locations.  Fire sprinkler riser locations and location of system serving.  FACP locations.  Knox box locations.  Fire lane locations, dimensions, lengths, turning radii at corners and circles/cul-de-sacs.  Fire Department Hose Pull Analysis  Fire lane signage and striping (Option 1,2, or 3 per City Specification #415)  Property dimensions or accurate scale.  Building locations and heights.  Building addresses and suite addresses.  Setback distances and building exterior feature fire-resistance ratings  Ground ladder access to emergency escape and rescue openings (FD) Note: A separate submittal is required for the Fire Master Plan to the Huntington Beach Fire Department. A master plan will need to be submitted to the HBFD for review and approval. No approvals will be granted for building permits or site grading until it has been approved. It will need to be a component of the submittal for the building plan review as well as all fire department plans. 2. Environmental The following items shall be completed prior to rough or precise grading plan approval. Methane Mitigation District Requirements. The proposed construction is within the City of Huntington Beach Methane Mitigation District. Due to recorded oil wells onsite of the proposed development, as well as the Soil and Methane Sampling Report on file for the property, the structure is required to be equipped with a sub-slab methane barrier and passive methane mitigation system, in accordance with City Specification #429. (FD) City Specification # 429 and 431-92 Soil Clean-Up Standards testing is required. Note: This property demonstrated compliance with City Specifications #429 & #431-92, as documented in the Soil and Methane Sampling Report, filed July 31, 2018. Final report shall be included in full size in the building plans. 177 Page 3 of 9 Imported Soil Plan. All imported soil shall meet City Specification #431-92, Soil Cleanup Standards. An “Imported Soil Work Plan” must be submitted to the Fire Department for review and approval prior to importing any soil from off site. Once approved, the soil source can be sampled per the approved work plan, then results sent to the HBFD for review. No rough grade will be approved prior to the actual soil source approval. Multiple soil sources required separate sampling as per the approved work plan, with no soil being imported until each source has been verified to meet the CS #431-92 requirements. (FD) Oil Wells Per Huntington Beach Municipal/Oil Code Section 15.32.090, oil wells on the property shall be re-abandoned to the satisfaction of the California Division of Oil, Gas & Geothermal Resources (DOGGR) and the Huntington Beach Fire Department City. A permit shall be obtained from the Huntington Beach Fire Department as per City Specification #422 Oil Well Abandonment Permit Process. Note: The CalGEM Well Finder database reflects two wells located on the property. Per CalGEM records available online and the Huntington Beach City documents, these wells were abandoned to current CalGEM standard in 2017 and this requirement has been met. 3. Fire Apparatus Access The following items shall be completed prior to rough or precise grading plan approval. Hose Pull Lengths – The fire apparatus access road shall comply with the requirements of Section 503.1.1 of the Huntington Beach Fire Code. All access roads shall extend to within 150 feet of all portions of the facility and all portions of the exterior walls of the first story of the building as measured by an approved route around the exterior of the building or facility. Note: This 150 feet needs to be demonstrated on the Fire Master Plan. 4. Fire Protection Systems The following items shall be completed prior to issuance of a certificate of occupancy. Fire Extinguishers shall be installed and located in all areas to comply with Huntington Beach Fire Code standards found in City Specification #424. The minimum required dry chemical fire extinguisher size is 2A-10BC and shall be installed within 75 feet travel distance to all portions of the building. Extinguishers are required to be serviced or replaced annually. (FD) Fire Alarm System is required. A building fire alarm system is required. For Fire Department approval, shop drawings shall be submitted to the Fire Department as separate plans for permits and approval. For Fire Department approval, reference and demonstrate compliance (Fire Alarm System cont.) with CFC Chapter 9 and NFPA 72 on the plans. A C-10 electrical contractor, certified in fire alarm systems, must certify the system is operational annually. (FD) 178 Page 4 of 9 Automatic Fire Sprinklers are required per Huntington Beach Fire Code. A NFPA 13 System is required for the proposed project. Separate plans (a minimum of two sets) shall be submitted to the Fire Department for permits and approval. Automatic fire sprinkler systems must be maintained operational at all times, with maintenance inspections performed quarterly and the system serviced every five years by a state licensed C-16 Fire Protection Contractor. For Fire Department approval, reference that a fire sprinkler system will be installed in compliance with the California Fire Code, the appropriate NFPA standards, and City Specification # 420 - Automatic Fire Sprinkler Systems in the plan notes. Note: When buildings under construction are more than one (1) story in height and required to have automatic fire sprinklers, the fire sprinkler system shall be installed and operational to protect all floors lower than the floor currently under construction. Fire sprinkler systems for the current floor under construction shall be installed, in-service, inspected and approved prior to beginning construction on the next floor above. Exception: Buildings entirely of Type 1 or Type 2 construction. (FD) Fire Department Connections (FDC) to the automatic fire sprinkler systems with a standpipe system shall be located to the front of the building, no farther than 100 feet of a properly rated fire hydrant. (FD) Class 1 Standpipes (2 ½” NFH connections) are required at each stairway. The standpipe system in stairwells cannot protrude into, impede, or compromise the CBC “Exit Width” requirements. For Fire Department approval, reference and portray Class 1 standpipes at each stairway in the plan notes. (FD) Note: Standpipe shall extend to rooftop level. Required on every story above grade plane per CFC 905.4 Commercial Food Preparation Fire Protection Systems are required for commercial cooking. Plans (three sets) shall be submitted to the Fire Department as s eparate plans for permits and approval. Reference compliance with City Specification # 412 Protection of Commercial Cooking Operations in the plan notes. (FD) Smoke alarms and Carbon Monoxide alarms are required per CBC and CFC Sections 907.2.11 and 915, respectively. Fire Hydrants and Water Systems The following items shall be completed prior to issuance of a certificate of occupancy. 179 Page 5 of 9 Public Fire Hydrant, is required. All occupancies with a NFPA 13 fire sprinkler system and a class 1 standpipe system must have a hydrant within 100 feet of the fire department connection. Public Fire Hydrants are required. All existing and proposed Hydrants must be portrayed on the site plan. Hydrants shall be installed and in service before combustible construction begins. Installation of hydrant and service mains shall meet all applicable Public Works water division standards and requirements. Plans shall be submitted to Public Works and approved by the Public Works and Fire Departments for connection to street main, piping, hydrant types and hydrant locations. For Fire Department approval, there will need to be one new hydrant within 100 feet of the fire department connection. (FD) Note: Should this requirement be unable to be met, an alternate mean and methods (AM&M) per Title 19, Div 1. Section 1.11.2.4. may be submitted for review. This report must be submitted and approved by the HBFD prior to any permit issuance. The agreed upon AM&M’s will be incorporated into the plans. On-Site Fire Service Piping (FSP) Application for permit from the HBFD shall be made for on- site Fire Service Piping (FSP), including but not limited to, private fire service mains and underground sprinkler laterals. Maximum allowed velocity of fire flow in suppl y piping is 12 fps. Additionally, application for permit shall be made for fire protections systems (sprinklers, alarms, chemical, fire pumps, etc.) as applicable. Permits may be obtained at the City of Huntington Beach Department Fire Department by completing a Fire Permit Form (available at Fire Administration) and submitting such plans and specifications as required by the bureau of fire prevention. A permit constitutes permission to begin work in accordance with approved plans and specifications. The permit fee includes plan checking and inspections by an authorized fire prevention inspector. Development reviews/approvals by the bureau of fire prevention during planning do not constitute approval to perform FSP or fire protection system work, unless otherwise noted. (FD) 5. Fire Personnel Access Main Secured Building Entries shall utilize a KNOX® Fire Department Access Key Box, installed and in compliance with City Specification #403, Fire Access for Pedestrian or Vehicular Security Gates & Buildings. Please contact the Huntington Beach Fire Department Administrative Office at (714) 536-5411 for information. Reference compliance with City Specification #403 - KNOX® Fire Department Access in the building plan notes. (FD) Gates and Barriers shall be openable without the use of a key or any special knowledge or effort. Gates and barriers in a means of egress shall not be locked, chained, bolted, barred, latched or otherwise rendered inoperable at times when the building or area served by the means of egress is occupied, and shall swing in the direction of travel when required by the Building Code for exit doors. (FD) Emergency Escape and Rescue openings are required per CBC and CFC Section 1030. Demonstrate compliance with these code sections on the plans. Show (FD) 180 Page 6 of 9 Note: Confirm and show that all emergency egress windows meet size requirements per CFC/CBC 1030.2 Roof Access is required. At least one stair shall extend to the roof from grade level and have an exterior door available for fire fighte r access. (FD) Exterior doors and openings required by the CBC or CFC (see CFC Section 504.1 and 504.2) shall be maintained readily accessible for emergency access by the fire department. An approved access walkway leading from fire apparatus access roads to exterior openings shall be provided. (FD) Fire Sprinkler System Controls access shall be provided, utilizing a KNOX® Fire Department Access Key Box, installed and in compliance with City Specification #403, Fire Access for Pedestrian or Vehicular Security Gates & Buildings. The approximate location of the system controls shall be noted on the plans. Reference compliance in the plan notes. (FD) Elevators shall be sized to accommodate an ambulance gurney. Minimum interior dimensions are 7 feet (84”) wide by 4 feet 3 inches (51”) deep. Minimum door opening dimensions are 3 feet 6 inches (42”) wide right or left side opening. Center opening doors require a 4 feet 6 inches (54”) width. For Fire Department approval, reference and demonstrate compliance on the building plans. (FD) 6. Addressing and Street Names The following items shall be completed prior to issuance of a certificate of occupancy. Structure or Building Address Assignments. The Planning Department shall review and make address assignments. The individual dwelling units shall be identified with numbers per City Specification # 409 Street Naming and Address Assignment Process. For Fire Department approval, reference compliance with City Specification #409 Street Naming and Address Assignment Process in the plan notes. (FD) Commercial Building Address Numbers shall be installed to comply with City Specification #428, Premise Identification. Building address number sets are required on the front and rear of the structure and shall be a minimum of six inches (6”) high with one and one half inch (1 ½”) brush stroke. (FD) Individual Units Addresses. Individual units shall be identified and numbered per City Specification # 409 Street Naming and Address Assignment Process through the Planning Department. Unit address numbers shall be a minimum of four inches (4”) vertical front and provided above or adjacent to the units’ front and rear door in a contrasting color. For Fire Department approval, reference compliance with City Specification #428 Premise Identification, in the plan notes and portray the address and unit number of the individual occupancy area. (FD) 7. GIS Mapping Information 181 Page 7 of 9 The following items shall be completed prior to issuance of a certificate of occupancy. a. GIS Mapping Information shall be provided to the Fire Department in compliance with GIS Department CAD Submittal Guideline requirements. Minimum submittals shall include the following:  Site plot plan showing the building footprint.  Specify the type of use for the building  Location of electrical, gas, water, sprinkler system shut-offs.  Fire Sprinkler Connections (FDC) if any.  Knox Access locations for doors, gates, and vehicle access.  Street name and address. Final site plot plan shall be submitted in the following digital format and shall include the following:  Submittal media shall be via CD rom to the Fire Department.  Shall be in accordance with County of Orange Ordinance 3809.  File format shall be in .shp, AutoCAD, AUTOCAD MAP (latest possible release ) drawing file - .DWG (preferred) or Drawing Interchange File - .DXF. (GIS Mapping Information cont.)  Data should be in NAD83 State Plane, Zone 6, Feet Lambert Conformal Conic Projection.  Separate drawing file for each individual sheet. In compliance with Huntington Beach Standard Sheets, drawing names, pen colors, and layering convention. and conform to City of Huntington Beach Specification # 409 – Street Naming and Addressing. For specific GIS technical requirements, contact the Huntington Beach GIS Department at (714) 536-5574. For Fire Department approval, reference compliance with GIS Mapping Information in the building plan notes. (FD) 8. Building Construction, Fire Safety and Egress Components The following items shall be completed prior to issuance of a certificate of occupancy. Building Construction Setback and Exterior Fire-Resistance Rating requirements are reflected in CA Building Code Tables 601 and 602. (FD) 182 Page 8 of 9 Emergency Responder Radio Coverage is required throughout all portions of the structure(s) as per Chapter 5 of the CFC. A separate plan must be submitted to the HBFD for method of addressing this requirement. System must be tested, certified and then inspected once building construction is primarily complete but before the certificate of occupancy will be issued. (FD) Carbon Dioxide or Compressed Gas Tanks - If a liquefied carbon dioxide tank is to be installed for use with beverage carbonation, the carbon dioxide tank and piping must be insta lled in accordance with the 2016 CFC, specifically Chapters 50 and 53. If the tank capacity is greater than 100 pounds, an FD construction permit must be obtained, and a separate plan submittal for compressed gasses is required. (FD) Egress Components Stairwell Required Minimum Widths. Standpipe systems in stairwell areas shall not impede code required minimum widths. (FD) Rooftop Deck. The proposed rooftop deck, located on the 4th floor, must meet egress requirements in 2019 CFC/CBC 1006. The current proposed configuration only has 1 exit, which would need to meet requirements in table 1006.3.3(1) and 1006.3.3.(2). Note: The current 4th floor deck does not meet code requirements for 1 exit only. Exit Signs and Exit Path Markings will be provided in compliance with the Huntington Beach Fire Code and Title 24 of the California Administrative Code. Reference compliance in the plan notes. (FD) Egress Illumination/Emergency Exit Lighting with emergency back-up power is required. Provide means of egress illumination per HBFC 604.2.4 and UBC 1003.2.9. (FD) THE FOLLOWING CONDITIONS SHALL BE MAINTAINED DURING CONSTRUCTION: a. HBFD approval must be obtained before lumber or other combustible building materials are brought onsite. The project will be required to demonstrate onsite roadways comply with fire access road requirements including all weather paving and load bearing performance, as well as hose pull distance. Water supply for fire suppression operations, namely fire hydrants, shall also be operable and demonstrate compliance. (FD) b. Fire/Emergency Access and Site Safety shall be maintained during project construction phases in compliance with CFC Chapter 33, Fire Safety during Construction and Demolition. (FD) OTHER: a. Discovery of additional soil contamination or underground pipelines, etc., must be reported to the Fire Department immediately and the approved work plan modified accordingly in compliance with City Specification #431-92 Soil Clean-Up Standards. (FD) 183 Page 9 of 9 b. Outside City Consultants: The Fire Department review of this project and subsequent plans may require the use of City consultants. The Huntington Beach City Council approved fee schedule allows the Fire Department to recover consultant fees from the applicant, developer or other responsible party. (FD) Fire Department City Specifications may be obtained at: Huntington Beach Fire Department Administrative Office City Hall: 2000 Main Street, 5th floor, Huntington Beach, CA 92648 or through the City’s website at https://www.huntingtonbeachca.gov/government/departments/fire/fire_prevention_code_enforcement/fire_ dept_city_specifications.cfm 184 From:sam hanna To:Beckman, Hayden Subject:714 PCH , HB...proposed project request of postponement of public hearing Date:Monday, October 5, 2020 8:58:43 PM Mr. Beckman;- As requested , I'm following up to our phone conversation this afternoon with this e mail requesting the city staff and the zoning administrator to postpone the public hearing from the 7th of october to another date to allow us and the neighbours chance to review and comment on the proposed project. -I am at 716 PCH the next door to the proposed mix use project. we have a small commercial unit on the bottom and 2 story residential unit on top. - 5 years ago or so when I was working on my project with the city planning and building , the city gave me comments and requirements for design/plan check such as; - set back of 4 feet on the east side yard of the ground floor since I had zero set back on the west side next to the motel. the 4' set back is for Handicap passage from PCH sidewalk into my commercial unit. Also for the fire dept since I dont have setback on the other side. - to have front setback similar to the motel next door so all buildings fronting PCH aline to look nice . - back yard setback of 5 ft min. to provide for 25 ft Alley back up distance..........if we didn't have that ( the project was not going to be approved ). even they made sure that the property fence behind me at the ally is 25 ft. THe proposed project has a power pole and guy wire 3 or 4 ft into the alley , making the backing uo distance less than 25 ft. There are numerous issues that we need to tell you and the city about but we need time to response after we review the plans thourlly. we know the difficulties of working and living in this area especially with increasing number of the homeless population and the problems associated with. Currently the Mayor and the police Department are working with me to eliminate some of these problems . They also commanded me to work with the city to CREATE safe neighbourhood and quality environmental. we have some pictures to share with you as I shared them with the mayor and LT. David of the police dept. but for now here some of my comments until we meet with you to go over the whole project ;- -- where is the guest parking for the residential portion of the project, ( should be .75 ie 1 additional parking ) -- the third floor unit is 3 bedroom not 2 bedroom ....shortfall of another .5 parking ...ie another parking is required , -- how is my privacy where you have zero lot next to my windows ? balcony .....its an arm length between my resident and their proposed residential portion...........UNREAL -- what are the precaution for my home during underground excavation ??? -- there was a oil well spill during oil well abandonment of the subject property that I reported then to Fire dept. I believe that the underground soil is heavily contaminated and I would like to have my soils experts advise us , ....this is a health issue and i dont know 185 what environment document allowed this magnitude development to be exempt ???? what is the impact of it on us during excavations and construction especially the underground -- how is the turn-around of the underground parking works. -- what are the hours of operations for the coffee shop ? -- where would the customers entering the cafe' ? if from the alley passing my front entry .....passing my entry door ?? it is problem...we were required to provide front entrance with HC accessibility . -- trash collection...?? -- how will mail delivery be conducted ? -- will there be security on site ? ... the city do not want to repeat the 7-11 security issues !!! please check with the mayor's office and lieutenant Dave of the police dept. -- the police dept should review and comment on the proposed project. -- How will the site be secured or closed during overnight ? -- will the city allow alley deliveries ? major problem if you allow ! truck stall should be provided .....blocking the alley is safety concern if you allow it ! -- where is the locations of the cafe' vents ? -- where is the location of the methane collection vents ? -- if someone is in the balcony and having a glass drink and accidentally drops the glass .. someone could be killed or badly injured since there is no setback at the front. MR. Hayden, once again our small neighbourhood has been experiencing major major alley problems and homeless problem fronting PCH , as we indicated with 7-11 where we trying to find solutions with the Mayor and the police department. Any intensification of commercial activity will tend to increase rather than reduce the problem. The size and layout of the residential units proposed make them ideal for short term rental which tend to attract more party goers and more number of residents than a typical residential condominium like all the condos all along PCH (fronting PCH).. I have spoken to some of my neighbours and we are all requesting that the issues associated with the proposed development should be forwarded to the City Planning commission for an evening of public hearing I have enclosed some recent pictures of the alley to illustrate our concerns. thanks for your consideration please call me if you have any question a@ (714) 309-8010 NOTE; some of my neighbours and I were surprised and puzzled why didn't the city instructed the applicant to work with the adjacent property owners prior going to submitting a formal application ?..... 186 From:sam hanna To:Beckman, Hayden Subject:Fw: 714 PCH , CUP 20-001 Date:Wednesday, November 4, 2020 1:23:13 PM for planning action ----- Forwarded Message ----- From: sam hanna <isamhanna@yahoo.com> To: lyn.semeta@surfcity-hb.org <lyn.semeta@surfcity-hb.org>; HB City Manager Chi <oliver.chi@surfcity-hb.org>; zoningadministrator@surfcity-hb.org <zoningadministrator@surfcity-hb.org> Sent: Wednesday, November 4, 2020, 12:59:25 PM PST Subject: 714 PCH , CUP 20-001 Dear Mayor and city Manager : Per my conversation with Mr. Chi at the end of last week and two weeks ago , I was informed that the planning manager would be calling us regarding great number of concerns and problem with the subject project on 714 PCH ,which is immediately to east from us. Mr Chi understood Some of the these issues and problems that were raised to him and I was promised a meeting with planning director / manager in lieu of the planner who reviewed the project , who promised us to arrange a meeting with the city , the applicant and us before going to the Zoning administrator for action. This meeting did NOT happened and I'm very disappointed that no planning manager/ director has called us as promised . I'm asking you to postpone the public hearing until the meeting is arranged to go over all our concern raised verbally to the city manager , and in writing via e mail and on the red marks of the plans that was given to project planner. cc. Tim Mayor.. via fax 187 From:De Coite, Kim To:De Coite, Kim; James, Jane; Luna-Reynosa, Ursula; Mandic, Connie; Perkins, Brendon; Ray, Alan; Scandura, John; Siordia, Isela; Vigliotta, Mike; Villasenor, Jennifer; Gracey Van Der Mark (graceyv25@gmail.com); Kayla Acosta-Galvan (kayla.acostagalvan@outlook.com); Oscar Rodriguez (orodriguez.hboc@gmail.com) Cc:Beckman, Hayden Subject:Appellant Request for PC Hearing Date:Tuesday, January 12, 2021 3:58:30 PM Attachments:IMG_3702.PNG IMG_3703.PNG IMG_3704.PNG IMG_3705.PNG IMG_3706.PNG IMG_3707.PNG IMG_3708.PNG IMG_3709.PNG IMG_3710.PNG IMG_3711.PNG IMG_3712.PNG IMG_3713.PNG IMG_3714.PNG Mr. Sam Hanna, the appellant for tonight’s item has requested that the attached photographs be provided to the Planning Commission for reference. Please note that there is a graphic image of human waste included. Kimberly De Coite Administrative Assistant Department of Community Development 714-536-5276 kdecoite@surfcity-hb.org City Hall continues to be closed to the public until further notice. You may wish to contact the Community Development Department via email at community.development@surfcity-hb.org, the MyHB app on your mobile device, or the City website. ***Please note that the City of Huntington Beach will be transitioning to a new permitting and application system for development services. The current eProcess Portal will close for new applications, resubmittals, and revisions on February 9, 2021. All electronic application processing will pause after February 9th at 5:00 PM, until we open our new electronic submittal site (Accela’s HB ACA) on February 16, 2021. Please plan your submittals in advance to avoid project delays. Instructions for setting up an account and submitting projects online through HB ACA will be posted to our website by February 10, 2021. Thank you for your patience and understanding during this transition.*** 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 TELEPHONE (714) 536-5553 City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 Dan Kalmick City Council Member To: Community Development Deputy Director, Jennifer Villaseñor From: Councilmember, Dan Kalmick RE: Appeal PC Decision of Appeal of ZA Approval of CUP 20-012/CDP 20-013, SP 20-001 (714 PCH Mixed Use) I am appealing the decision of the Planning Commission to deny the project at 714 PCH referenced above. I believe the project met the legal framework set forth by the City and should be reviewed “de novo” by the City Council. 1/13/2021 204 City of Huntington Beach File #:21-100 MEETING DATE:2/16/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Ursula Luna-Reynosa, Director of Community Development Subject: Consider an Extension of the Temporary Closure of the Second Block of Main Street to Vehicular Traffic Through Labor Day (September 6, 2021); Authorize Staff to Engage an Urban Design Firm; and, Appoint the Mayor, Mayor Pro Tem, and a City Council Member to Serve on an Ad Hoc Downtown Urban Design Study Committee Statement of Issue: On December 21, 2020, the City Council considered a request from the Downtown Business Improvement District (BID) to extend the temporary closure of the second and third blocks of Main Street to vehicular traffic through Labor Day (September 6, 2021) to allow downtown businesses the opportunity to continue operating outdoors to meet physical distancing requirements in a safe manner during the COVID-19 pandemic. At that meeting, Council Members discussed the differences between the second and third blocks of Main Street, including the lower number of third block businesses using the outdoor space, and the lower level of support among affected third block businesses for extending the street closure. Ultimately, after substantive deliberation, the City Council directed staff to reopen the third block to vehicular traffic, extended the closure of the second block to February 28, 2021, and requested that the issue related to opening / closing the second block of Main Street be reagendized for consideration on February 16, 2021 (Attachment 1). The temporary closure of Main Street has resulted in robust discussions that warrants further study for informed discussions about future place making opportunities and better connection to the southern portion of the Downtown as defined in the Downtown Specific Plan. Financial Impact: There are no direct costs to the City if the City Council is to extend the temporary closure. If the closure does result in increased sales to the businesses then there would be a nominal positive, corresponding fiscal impact to the City’s General Fund via sales tax revenue. The cost of an urban design study will be within the parameters of the existing budget and the award of any agreement will City of Huntington Beach Printed on 2/10/2021Page 1 of 3 powered by Legistar™205 File #:21-100 MEETING DATE:2/16/2021 follow the City’s established procurement procedures. Recommended Action: A) Authorize the City Manager to continue the temporary closure of the second block of Main Street to vehicular traffic to accommodate outdoor dining and retail in the public right-of-way through September 6, 2021; and, B) Authorize staff to engage an Urban Design Firm; and, C) Establish an Ad Hoc Downtown Urban Design Study Committee; and, D) Appoint the Mayor, Mayor Pro Tem, and a City Council Member to the Ad Hoc Committee . Alternative Action(s): Provide alternative direction. Analysis: Staff has confirmed that the BID maintains its request that the City Council extend the closure of the second block of Main Street through Labor Day. If approved, this extension would give merchants certainty that this additional outdoor space will remain available through the pandemic in this otherwise highly uncertain time. According to the BID, there is broad support among second block businesses and property owners for this extension. The City has been able to pilot the closure of the second block of Main Street during the pandemic. Anecdotal information has indicated positive sales for the second block businesses, particularly restauranteurs, due to the ability to add or increase outdoor dining opportunities. This inferred success has led to interest in further studying Main Street, particularly the second block, for future place making and outdoor dining opportunities. The addition of street side dining has added liveliness and interest to downtown and the ability to imagine an enhanced physical environment that could be even more inviting. Further, there has long been interest in enhancing the connectivity between the resorts, Pacific City, downtown and the pier. A concept was prepared for the City by RSM Design and was included with the City Council packet at the December 21st meeting. This study particularly focused on the connection via Walnut. Further refinement of this concept, with additional study of potential PCH improvements, is necessary prior to being able to design and estimate costs for implementation. Staff has solicited proposals from three urban design firms. Staff is seeking direction from the City Council to move forward with a Downtown Urban Design Study. The scope of work includes: ·An assessment of existing conditions and review of previous reports and studies ·Potential streetscape configurations of Main Street ·Downtown connectivity strategies ·A feedback loop to provide input on Main Street configurations and connectivity strategies ·A final refinement of two concept configurations and two strategies (based on feedback City of Huntington Beach Printed on 2/10/2021Page 2 of 3 powered by Legistar™206 File #:21-100 MEETING DATE:2/16/2021 received) to be presented to the City Council. Staff requests that the City Council establish the Ad Hoc Downtown Urban Design Study Committee and appoint the Mayor, Mayor Pro Tem, and a member of the City Council to serve on the Ad Hoc Committee. This Ad Hoc Committee will also work to engage community representatives to assist with the overall assessment. It is envisioned that the Ad Hoc Committee will then participate with staff and the consultant in the feedback loop component of the above-described scope of work. Staff from Community Development, Public Works, and Community Services will provide technical support to the Ad Hoc Committee, with Community Development staff being the main liaison in coordinating meetings and managing the agreement with the Urban Design firm. At the conclusion of this effort, and within 4 months of execution of an agreement with an Urban Design firm, two Main Street streetscape configurations and two downtown connectivity strategies will be presented to the City Council for consideration. Staff will also provide an order of magnitude cost estimate to implement each concept. Should the City Council desire to move forward with possible implementation, staff will engage in a robust community engagement process that will include small group stakeholder meetings and a virtual open house to further refine and assist selection in final configurations and plans. Should the City Council desire to proceed with implementation, staff would then request approval to engage services for design documents and allocation of funds. At the time of such consideration, any necessary environmental analysis will be conducted. Environmental Status: The project is exempt pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15304(e) because the proposed project consists of a minor temporary use having negligible or no permanent effects on the environment. The proposed project would not have a negative effect on biologically sensitive resources, and there is no evidence of any unusual environmental circumstances that might give rise to a reasonable possibility that the project will have a significant effect on the environment. Strategic Plan Goal: Non-Applicable - Administrative Item Attachment(s): 1. December 21, 2020 RCA City of Huntington Beach Printed on 2/10/2021Page 3 of 3 powered by Legistar™207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 City of Huntington Beach File #:21-124 MEETING DATE:2/16/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Dahle Bulosan, Chief Financial Officer Subject: Year-End Audit results for the FY 2019/20 Comprehensive Annual Financial Report (CAFR) and FY 2020/21 Mid-Year Budget Adjustments & Updates Statement of Issue: Year-End Audit Results The City received an Unmodified (Clean) Audit Opinion for the City’s Fiscal Year (FY) 2019/20 Comprehensive Annual Financial Report (CAFR), which is the best audit result available. In addition, the Government Finance Officers Association awarded their Certificate of Achievement for Excellence in Financial Reporting to the City for the 34 th consecutive year. Included as an attachment is the FY 2019/20 CAFR to receive and file. Fiscal Year 2020/21 Mid-Year Adjustments & Updates The Finance Department has also spent time recently performing a mid-year budget review for the fiscal year that began on July 1, 2020. In interfacing with operating departments, budgetary requests have been assessed across all City departments, and certain adjustments are being recommended based on available resources through grants and / or restricted funds. Financial Impact: Fiscal Year 2020/21 Mid-Year Adjustments 1. General Fund (100) budget adjustments are requested as follows: a. Community Development Department - funding for the preparation of the Mitigated Negative Declaration for Seacliff Senior Living and Memory Care Facility ($44,060) b. Fire Department - funding for Fire Strike team reimbursement costs ($1,105,000); payments to the Department of Health Care Services (DHCS) for the Ground Emergency Medical Transport (GEMT) Quality Assurance Fee (QAF) Program ($312,240); and funding for Metro Cities Joint Powers Authority (JPA) increased costs ($30,250) 2. The Public Works Department is requesting additional appropriations totaling $530,109, through the following sources: a. Refuse Collection Fund 504 ($190,000) City of Huntington Beach Printed on 2/10/2021Page 1 of 5 powered by Legistar™323 File #:21-124 MEETING DATE:2/16/2021 b. Water Master Plan Fund 507 ($340,109) 3. The Police Department is requesting additional appropriation of $222,121, through the following sources: a. Police Facilities Development Impact Fund 227 ($90,000) b. Narcotics Forfeiture Fund 242 ($12,121) c. AB 109 Fund 979 ($70,000) d. Pedestrian and Bicycle Safety Program Grant Fund 1266 ($50,000) 4. The Finance Department is requesting additional appropriations of $6,201,060, through the following funds: a. Retiree Insurance Fund 702 ($1,298,000) b. Retirement Supplement Fund 703 ($4,903,060) 5. The Administrative Services Department is requesting an additional appropriation of $935,181 in the Self Insurance General Liability Fund 552. Details related to the proposed adjustments are outlined in the report below. Further, there are sufficient revenues, cash, and / or fund balances to support the above referenced adjustments. Recommended Action: A) Receive and File the FY 2019/20 Comprehensive Annual Financial Report; and, B) Approve mid-year budget adjustments to the FY 2020/21 Revised Budget in the funds and by the amounts contained in Attachment 1. Alternative Action(s): Do not approve the recommended action(s) and direct staff accordingly. Analysis: Year-End Audit Results Auditing firm Davis Farr LLP (Auditors) audited the City’s financial statements and internal control for the FY 2019/20. The City received an Unmodified (Clean) Audit Opinion for the FY 2019/20 Comprehensive Annual Financial Report (CAFR), which is the highest opinion possible (Attachment 2). In addition, the Auditors issued the following reports (Attachment 3): ·AU-C 260 Letter: Communications ·Appropriations Limit Agreed-Upon Procedures ·Air Quality Management District (AQMD) Report Fiscal Year 2020/21 Mid-Year Adjustments & Updates The FY 2020/21 Budget was adopted by the City Council on June 29, 2020, for the fiscal year City of Huntington Beach Printed on 2/10/2021Page 2 of 5 powered by Legistar™324 File #:21-124 MEETING DATE:2/16/2021 beginning July 1, 2020. The Finance Department has compiled recommended budget adjustments to cover additional costs and/or provide appropriations necessary to expend funds that have been received for specific purposes. The City has received revenues or has set-aside prior year fund balances that will support the requested adjustments in the General Fund. The Other Funds adjustments will be funded by available revenue or fund balances within each distinct Fund. GENERAL FUND (FUND 100) The Community Development Department entered into a reimbursement agreement with SBLP Huntington Beach, LLC. The funds were used to cover professional services costs for the preparation of the Mitigated Negative Declaration for Seacliff Senior Living and Memory Care Facility. The department is requesting to increase its professional services appropriation by $44,060 to cover these pass-thru costs, which have been offset by the reimbursement revenues and result in a net neutral impact to the General Fund. The 2020 California wildfire season was characterized by a record-setting year of wildfires that burned across the State of California. As of the end of the calendar year, nearly 10,000 fires had burned over 4.2 million acres of land, which is more than 4% of the state’s roughly 100 million acres of land. The California Fire and Rescue Emergency Mutual Aid System (Mutual Aid System) coordinates resources from various jurisdictions within the State of California whenever a local agency is overwhelmed by a major disaster in its community or region. The Huntington Beach Fire Department participates in the Mutual Aid System, and the department has responded to multiple mutual aid requests throughout California to assist in major fires. To date, the Fire Department has incurred $1,105,000 in Strike Team deployment expenses. The State of California will reimburse all allowable costs related to these Strike Team expenses, plus a 16.81% administrative rate to be applied to those allowable costs. Since there is no annual appropriation for this business unit, given that Strike Team costs are unknown until costs are incurred, the Fire Department is requesting appropriation for $1,105,000. Of note, the appropriation will be fully offset by State reimbursements. California Welfare and Institutions authorized the Ground Emergency Medical Transportation Services (GEMT) Quality Assurance Fee (QAF) program in accordance with Senate Bill 523. The QAF is assessed on each qualified emergency medical transport, regardless of payer type. DHCS uses the revenues collected through this program to provide additional funding to eligible governmental entities that provide GEMT services to Medi-Cal beneficiaries. The Fire Department is requesting an appropriation of $312,240 to cover anticipated QAF payments for the remainder of the fiscal year. Based on the number of Medi-Cal transports the City provides each year, it is anticipated that the QAF payments will be fully offset by revenues received under the program. Essential emergency dispatch and paging services are provided by Metro Cities Communications Joint Powers Authority (JPA). Being a member of a fire dispatch Joint Powers Authority allows for cost sharing between member agencies. Calculation of agency fair share percentage is based upon the total of emergency calls within an agency’s jurisdiction, divided by the total number of calls the JPA receives. Given a higher than anticipated number of calls for service, the Fire Department is requesting an additional appropriation of $30,250 to cover the Metro Cities JPA’s increase in budget City of Huntington Beach Printed on 2/10/2021Page 3 of 5 powered by Legistar™325 File #:21-124 MEETING DATE:2/16/2021 allocation to the City of Huntington Beach. OTHER FUNDS Police Facilities Development Impact (Fund 227) A fund balance appropriation of $90,000 is requested in the Police Facilities Development Impact Fund to purchase and equip a new van for the Crisis Negotiation Team (CNT). Development impact fees collected in this fund are to be used to fund new law enforcement facilities, vehicles , and equipment in response to the additional calls for service generated by new development. The new CNT van adheres to the expenditure criteria of this fund and there is sufficient fund balance for this purchase. Narcotics Forfeiture - Treasury (Fund 242) This fund accounts for the Equitable Sharing Funds received from the Department of the Treasury and can be used to supplement local law enforcement resources. A fund balance appropriation of $12,121 is requested in the Narcotics Forfeiture Fund for the purchase of miscellaneous Police Department equipment and supplies. There is sufficient fund balance in this fund to cover the appropriation. Refuse Collection Service (Fund 504) The residential curbside collection rate increased by $0.33 effective July 1, 2020, based on the formula adopted in Resolution 2017-26, and is estimated to provide an additional $190,000 in revenues. The Public Works Department is requesting an expenditure appropriation of $190,000 to fund the Refuse Collection and Disposal Services contract. Based on current revenue collection amounts, these adjustments will have a net neutral impact. Water Master Plan (Fund 507) An appropriation of $340,109 is needed in the Water Master Plan Fund for charges related to general administrative oversight as determined through the City’s Cost Allocation Plan. There is sufficient fund balance in this fund to cover the appropriation. Self-Insurance General Liability (Fund 552) An appropriation of $935,181 is needed in the Self Insurance General Liability Fund for excess liability coverage and for risk insurance services for the commercial property, difference in conditions (DIC), contractor’s equipment and auto physical damage program, terrorism, and cyber liability coverage. There is sufficient fund balance in this fund to cover the additional appropriation. Retiree Insurance (702) The Finance Department is requesting an appropriation of $1,298,000 in the Retiree Insurance Fund: $1,187,265 for contributions and payments made for the City’s Retiree Medical Plan, and $110,735 for Transfers Out to the General Fund for general administrative oversight as determined through the City’s Cost Allocation Plan. The total contribution made to the fund each year is determined by the City’s actuary. This appropriation is needed to true up the retiree health insurance budget based on the most recent actuarial valuation. City of Huntington Beach Printed on 2/10/2021Page 4 of 5 powered by Legistar™326 File #:21-124 MEETING DATE:2/16/2021 Retirement Supplement (Fund 703) An additional appropriation of $4,903,060 is needed in the Retirement Supplement Fund for contributions and payments made for the City’s Retiree Supplemental Plan. The total contribution made to the fund each year is determined by the City’s actuary. This appropriation is needed to true up the retiree pension payments budget, based on the most recent actuarial valuation. AB 109 (Fund 979) Public Safety Realignment was enacted in 2011 with the signing of Assembly Bill 109, which provided a portion of the Vehicle License Fees go to local law enforcement. A fund balance appropriation of $70,000 is requested in the AB 109 Fund for compliance checks and for a new server for the high tech crime lab. There is sufficient fund balance in this fund to cover the appropriation. Pedestrian and Bicycle Safety Program Grant (Fund 1266) The Police Department received funding of $50,000 for the Pedestrian and Bicycle Safety Program Grant, awarded by the California Office of Traffic Safety (OTS). Environmental Status: Not applicable. Strategic Plan Goal: Enhance and maintain high quality City services Enhance and maintain infrastructure Strengthen long-term financial and economic sustainability Enhance and modernize public safety service delivery Attachment(s): 1. Fiscal Year 2020/21 Recommended Mid-Year Adjustments 2. FY 2019/20 Comprehensive Annual Financial Report (CAFR) 3. Other Auditor Issued Reports City of Huntington Beach Printed on 2/10/2021Page 5 of 5 powered by Legistar™327 Recommended Adjustments by Fund: APPROPRIATION INCREASE Fund No Fund Name Appropriation Dept 100 General Fund 44,060 Community Development 100 General Fund 1,447,490 Fire General Fund Subtotal 1,491,550 227 Police Facilities Development Impact 90,000 Police 242 Narcotics Forfeiture - Treasury 12,121 Police 504 Refuse Collection Service 190,000 Public Works 507 Water Master Plan 340,109 Public Works 552 Self Insurance General Liability 935,181 Administrative Services 702 Retiree Insurance 1,298,000 Finance 703 Retirement Supplement 4,903,060 Finance 979 AB 109 70,000 Community Services 1266 Pedestrian and Bicycle Safety Program 50,000 Public Works Other Funds Subtotal 7,888,471 All Funds Total 9,380,021 ATTACHMENT 1 Fiscal Year 2020/2021 Recommended Mid-Year Budget Adjustments 328 CITY OF HUNTINGTON BEACH For The Fiscal Year Ended June 30, 2020 California Comprehensive Annual Financial Report 329 CITY OF HUNTINGTON BEACH, CALIFORNIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2020 Prepared by the Finance Department 330 THIS PAGE INTENTIONALLY LEFT BLANK 331 INTRODUCTORY SECTION 332 THIS PAGE INTENTIONALLY LEFT BLANK 333 i City of Huntington Beach Comprehensive Annual Financial Report For the Year Ended June 30, 2020 TABLE OF CONTENTS INTRODUCTORY SECTION Table of Contents ........................................................................................................................................ i-ii Letter of Transmittal .................................................................................................................................... iii-ix City Officials ................................................................................................................................................ x Organizational Chart ................................................................................................................................... xi Certificate of Achievement in Excellence in Financial Reporting ................................................................. xii FINANCIAL SECTION Independent Auditor’s Report...................................................................................................................... 1-3 Management’s Discussion and Analysis (Required Supplementary Information) ....................................... 4-22 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Position .................................................................................................................. 25 Statement of Activities ....................................................................................................................... 26 Fund Financial Statements: Balance Sheet – Governmental Funds .............................................................................................. 27 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ......... 28 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ...... 29 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ....................................................................... 30 Statement of Net Position – Proprietary Funds .................................................................................. 31 Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds ............ 32 Statement of Cash Flows – Proprietary Funds ................................................................................... 33 Statement of Fiduciary Fund Net Position – Fiduciary Funds ............................................................ 34 Statement of Changes in Fiduciary Fund Net Position – Fiduciary Funds ......................................... 34 Notes to Financial Statements .............................................................................................................. 36-120 Required Supplemental Information: Notes to Required Supplementary Information .................................................................................. 124 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget And Actual – General Fund ............................................................................................................. 125 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget And Actual – Grants Special Revenue Fund ................................................................................... 126 Schedule of Changes in the Net Pension Liability and Related Ratios .............................................. 127-129 Schedule of Changes in the Net OPEB Liability and Related Ratios ................................................. 130 Schedule of Contributions .................................................................................................................. 131-133 Schedule of Money Market Weighted Rate of Return ........................................................................ 133 Schedule of Contributions for the OPEB Plan .................................................................................... 134 334 ii FINANCIAL SECTION (Continued) Supplementary Information: Combining and Individual Fund Statements and Schedules: Combining Balance Sheet – Other Governmental Funds .................................................................. 139-142 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Other Governmental Funds ............................................................................................................ 143-146 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Other Governmental Funds ........................................................................... 147-154 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget And Actual – LMIHAF Capital Projects Fund .................................................................................. 155 Statement of Net Position – Internal Service Funds ........................................................................... 160 Statement of Revenues, Expenses, and Changes in Fund Net Position Internal Service Funds .................................................................................................................. 161 Statement of Cash Flows – Internal Service Funds ........................................................................... 162 Combining Statement of Fiduciary Fund Assets and Liabilities.......................................................... 166 Combining Statement of Changes in Fiduciary Assets and Liabilities ................................................ 167-168 STATISTICAL SECTION Net Position by Component – Last Ten Fiscal Years .................................................................................. 171-172 Changes in Net Position – Last Ten Fiscal Years ....................................................................................... 173-174 Fund Balances – Governmental Funds – Last Ten Fiscal Years ................................................................ 175 Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years ............................................. 177-178 Assessed and Actual Valuation of All Taxable Property (Excluding Redevelopment Agency) - Last Ten Fiscal Years .............................................................................................................................. 179 Property Tax Rates – All Direct and Overlapping Government Tax Rate 04-001 Largest Area in City – Last Ten Fiscal Years ........................................................................................... 179 Property Tax Levies and Collections – Last Ten Fiscal Years .................................................................... 180 Top Ten Property Tax Payers – Current Year and Nine Years Ago ............................................................ 181 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ..................................................................... 183-184 Legal Debt Margin – Last Ten Fiscal Years ................................................................................................ 185 Statement of Direct and Overlapping Bonded Debt .................................................................................... 186 Principal Private Employers – Current Year and Nine Years Ago ............................................................... 187 Full-Time Actual and Budgeted City Employees by Function/Program– Last Ten Fiscal Years .................. 188 Operating Indicators by Function/Activity – Last Ten Fiscal Years .............................................................. 189-190 Capital Assets Statistics by Function/Activity .............................................................................................. 191 335 iii CITY OF HUNTINGTON BEACH December 16, 2020 Honorable Mayor, City Council and Citizens of the City of Huntington Beach: In accordance with the requirements of the City Charter, and the City of Huntington Beach’s ongoing commitment to transparent financial reporting, I am pleased to present the Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2020. As required by the City Charter, and to ensure the reliability of the information contained herein, the City of Huntington Beach contracted with the independent auditing firm of Davis Farr LLP. The goal of the audit was to provide reasonable assurance that the City’s financial statements are free from material misstatement. In addition, Davis Farr LLP audits the City’s major program expenditures of federal grants for compliance with Title 2 of the United States Code of Federal Regulations Part 200 (Uniform Guidance). The report of the Single Audit is published separately from this CAFR and may be obtained upon request from the City’s Finance Department. This report consists of management’s representations concerning the City’s finances. As such, management assumes full responsibility for the completeness and accuracy of the information presented in this document and that it is reported in a manner that fairly presents the financial position and operations of the various funds of the City. To provide a reasonable basis for making these representations, and assurance that the financial statements will be free from material misstatement, management has established a comprehensive internal control framework that is designed to both protect the government’s assets from theft, loss, or misuse and to compile sufficient reliable information for financial statement conformity with GAAP. As the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. We are pleased to report that Davis Farr LLP granted the City an unmodified (clean) opinion for the financial statements of the City for the year ended June 30, 2020. The auditor’s opinion can be found in the Financial Section of this report. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the financial statements in the form of a Management Discussion and Analysis (MD&A). This transmittal letter is designed to complement and should be read in conjunction with it. The MD&A can be found immediately following the independent auditor’s report. 336 iv Profile of the City of Huntington Beach The City of Huntington Beach is home to a thriving beach community, located on the Orange County coast, 35 miles south of Los Angeles and 90 miles north of San Diego. With a population of 200,748 residents, it is known as Surf City due to its abundance of beaches; the year-round sunny and warm Mediterranean climate; and its casual lifestyle. With over 10 miles of coastline and iconic pier spanning 1,856 foot in length- the longest pier on the West Coast- Huntington Beach plays host to over 16 million visitors annually In addition to its internationally recognized beaches, Huntington Beach was hailed as #1 in the nation for Quality of City Services” and #18 by WalletHub in their “Best-Run City in America poll,” (June 2020), as well as one of the top ten “Happiest Cities” in the U.S. (March 2020). The City was also ranked #25 and #29 in California and the U.S., respectively, for “Providing Homeowners with an Excellent Return on Investment” by LendEDU (May 2020). Demographically, the City benefits from higher education levels, median incomes, and home values as compared with the State. The City boasts an annual median household income of $91,318, 51% higher than the United States, 28% higher than the State of California, and 6% higher than Orange County. Founded in the late 1880s, Huntington Beach was incorporated as a Charter City in 1909. Huntington Beach has a Council/Manager form of government wherein seven City Council members are elected to four-year terms, and the Mayor is filled on a rotating basis from the incumbent Council Members. The City Attorney, City Clerk and City Treasurer positions are also elected and serve four-year terms. The City of Huntington Beach is a full-service city including police, fire, public works, and other key functional departments with a dedicated and talented team of over 900 full-time equivalent employees. In 2011, the unincorporated oceanfront community of Sunset Beach was officially annexed by the City of Huntington Beach. Sunset Beach is a small beachfront community with approximately 1,000 residents and 1.5 square miles of land. Beachfront properties with high property values make this community a valuable addition to the City. Sunset Beach features one of the widest and most pristine beaches in Southern California and is home to the historic Sunset Beach Arts Festival. Economic Condition and Outlook Similar to other cities throughout the nation, the novel coronavirus (COVID-19) pandemic has created financial uncertainty that will impact the City’s financial standing. State and County Shelter-in-Place measures have successfully slowed the spread of the virus and prevented local hospitals from being overwhelmed, but the efforts have also caused unprecedented changes to everyday life. Economic engines are struggling in response to Shelter-in-Place Orders – the unemployment rate remains high, the stock market has experienced extraordinary volatility, and the City has had to restrict certain business activities that were previously allowed to resume. While we are still in the process of understanding the long-term impacts as projections change daily, there is no question that there has and will continue to be economic challenges due to COVID-19. The motto for Huntington Beach’s FY 2020/21 Adopted Budget is “OneHB,” reflecting the City’s commitment to facing the unprecedented challenges created by the COVID-19 pandemic guided by the following principles: 337 v  To stay committed to being One Team: working together to serve the people of Huntington Beach exceptionally to inspire pride in the community.  Work to have One Focus: to stay fanatical about achieving municipal excellence by being active caretakers of our unique, people-centric HB culture.  Continue to pursue One Goal: to ensure that HB continually improves its standing as a premier coastal community as measured through the health of our people, our organization, our infrastructure, and our community. The City’s FY 2020/21 adopted budget is balanced. Property tax values are expected to rise slightly, but are offset by substantial projected declines in Sales Tax and Transient Occupancy Tax as a result of the COVID-19 pandemic. As part of the FY 2020/21 budget balancing measures, City Council approved the implementation of a Separation Incentive Program (SIP) to reduce the size of the City’s current workforce. 97 employees opted to participate in the SIP, which, coupled with Citywide reorganization plans, achieved the projected cost savings required to remain balanced for FY 2020/21. The City’s reorganization plans include the following:  Combining the Human Resources and Information Services departments into a single Administrative Services department;  Merging the Community Services and Library departments into one operation;  Instituting a large-scale reorganization in the Public Works department; and,  Making additional operational adjustments in the Community Development, Finance, and Fire departments. While the City is well positioned to respond to the economic crisis created by COVID-19 without compromising services or losing focus on priority initiatives, the long term impacts of COVID- 19 have yet to be fully realized and it is clear that economic conditions and outcomes will need to be closely monitored. Property Tax The City of Huntington Beach’s assessed valuations are very strong, reflecting both new development and increased property values. The City’s FY 2020/21 assessed property value grew 5.3% to $46.1 billion. This solid performance, coupled with steady year-over-year growth, reflects a stable property tax base that can weather steep declines in real estate markets. Over 60% of parcels have an assessed valuation (AV) base year prior to 2004, representing a significant amount of untapped AV. For FY 2019/20, secured property tax revenue collections totaled $58.3 million. For FY 20/21, secured property taxes are estimated at $62.0 million, reflecting a 6.3 percent increase. 338 vi Sales Tax Huntington Beach’s business community is well-diversified with no single industry or business dominating the local economy. Local businesses include aerospace and high technology, petroleum, manufacturing, computer hardware and software, financial and business services, hotel and tourism, automobile services, large-scale retailers, and surf apparel. The City’s diverse sales tax base makes it a stable source of revenue and mitigates the impact of industry- specific downturns as shown below. 339 vii *Fiscal Year 2017/18 reflects nine months of data only due to the change in the City’s fiscal year Transient Occupancy Tax (TOT) Transient Occupancy Tax (TOT), a 10 percent tax applied to hotel stays within the City remains strong as Huntington Beach remains a prime tourist destination and the hotel industry continues to thrive. The City collected $9.6M in TOT revenues during FY 2019/20, with the $4.4M decline due to the impact of Shelter-in-Place orders to combat the COVID-19 virus on business and leisure travel. Budget Development and Monitoring The budget is prepared under the supervision of the City Manager and transmitted to the City Council for deliberation at least 30 days prior to the end of the fiscal year. Pursuant to the City’s Charter, the City Council must adopt the annual budget by June 30th and may amend it or revise it at any time at a properly noticed meeting. Budgetary control is at the Department level within each fund and a Department Head, with the Chief Financial Officer’s approval, may transfer funds within like categories (operating and capital expenditures) of the same Department. The transfer of funds for salaries and benefits requires additional approval by the City Manager or his designee. 340 viii Cash Management Policies and Practices Surplus cash is invested by the elected City Treasurer, in investments allowed by the City’s Investment Policy. The Investment Policy is adopted annually by the City Council after approval by the Investment Advisory Board. It outlines guidelines to meet the daily cash flow needs of the City, maximize the efficiency of the City’s cash management system, and identifies prudent investment vehicles for cash balances. The rate of return earned for the year ended June 30, 2020 was 2.11 percent. The City Treasurer, as required by California Government Code 53601, has prepared an annual Statement of Investment Policy which allows the City to meet current obligations while earning a market rate of return. Further information regarding the City’s cash and investments can be found in Note 2 of the financial statements. Long-Term Financial Planning The Strategic Plan provides the framework for the goals and objectives of the City for the next three years. The City Council has five Strategic Plan goals:  Improve quality of life;  Enhance and maintain infrastructure;  Strengthen long-term economic and financial sustainability;  Enhance and modernize public safety service delivery; and,  Enhance and maintain high quality City services. The Plan drives both short and long-term budgetary decisions and the daily operations of the City by ensuring everyone is consistently working to achieve the goals outlined in the Plan. To meet the goal of strengthening economic and financial sustainability, the City has implemented plans to reduce its unfunded liabilities by prepaying its obligations. The City’s CalPERS costs are expected to total $45.8 million in FY 2020/21. This reflects a $2.5 million, or 5.8 percent increase to last year’s Adopted Budget. The City’s unfunded pension liability is currently $436.0 million, representing a 68.2 percent funded status. The FY 2020/21 Adopted Budget does include a $1 million contribution to the Section 115 Trust, funded by one-time savings from the previous year. The City Council adopted a Pension Rate Stabilization Plan, otherwise known as a Section 115 Trust, to provide an additional alternative investment vehicle to CalPERS, providing the ability to select a portfolio based on the City’s own distant risk tolerance, and the desire to achieve a one-for-one reduction in its liabilities. On November 18, 2019, City Council authorized staff to move forward with preparing for the potential issuance of a Pension Obligation Bond to “refinance” the City’s unfunded pension liability through the approval of a resolution. Shortly after Council’s authorization, the documents were submitted to the Orange County Superior Court to begin the judicial validation process which was finalized on May 18, 2020. The City is continuously monitoring the interest rate and current economic climate to ensure that moving forward with the issuance of Pension Obligation Bonds is timed correctly and will be beneficial for the City in the long run. Concurrently, the City is in the process of developing a formal Unfunded Pension Liability payoff policy to plan for any additional unfunded pension liabilities that may arise through changes in the discount rate and other actuarial assumptions used by CalPERS. 341 ix Paying down these liabilities, controlling the City’s pension costs through various mechanisms including the issuance of Pension Obligation Bonds, funding a Section 115 trust, and creating an Unfunded Pension Liability Policy helps build capacity to manage future pension cost increases. While the impact of higher CalPERS costs will not be entirely mitigated, this proactive strategy has placed Huntington Beach in a stronger financial position than many other cities. Awards and Acknowledgements The City of Huntington Beach has once again received the “Certificate of Achievement for Excellence in Financial Reporting” award bestowed by the Government Finance Officers’ Association (GFOA) of the United States and Canada for the 34th consecutive year. Receipt of the award requires government entities to publish transparent, easily readable and efficiently organized Comprehensive Annual Financial Reports, conforming to program, accounting, and legal standards. The Certificate of Achievement earned for the fiscal year ended June 30, 2020, is valid for one year only. The City believes that this Comprehensive Annual Financial Report continues to conform to the Certificate of Achievement Program requirements and will be submitted to the GFOA for its consideration for another award. I wish to thank the City Council, City Manager, and City Departments for their continued diligence in their role as fiscal stewards for the City of Huntington Beach. Without their leadership and support, the favorable financial results contained in this report would not have been possible. I would also like to thank the Finance Commission, a seven member body appointed by the City Council, which has been instrumental in helping the City maintain its long term goal of financial sustainability. The preparation of this report would also not have been possible without the professional dedicated staff of the Finance Department. Specifically, I would like to thank Sunny Rief, Anna Garan, Rae Bowman, Ian Wuh, Ming Zhai, Leslie Zimmer, and Thuy Vi for their hard work and dedication. Respectfully, Dahle Bulosan Chief Financial Officer 342 x City of Huntington Beach City Council Kim Carr, Mayor Tito Ortiz, Mayor Pro Tem Barbara Delgleize, Councilmember Dan Kalmick, Councilmember Natalie Moser, Councilmember Erik Peterson, Councilmember Mike Posey, Councilmember Executive Team Oliver Chi, City Manager Travis Hopkins, Assistant City Manager Elected Department Heads Alisa Backstrom, City Treasurer Robin Estanislau, City Clerk Michael Gates, City Attorney Department Directors Dahle Bulosan, Finance Sean Crumby, Public Works Chief Scott Haberle, Fire Interim Chief Julian Harvey, Police Ursula Luna-Reynosa, Community Development Brittany Mello, Administrative Services Chris Slama, Community Services Behzad Zamanian, Information Services 343 xi 344 xii 345 FINANCIAL SECTION 346 Independent Auditor’s Report City Council City of Huntington Beach Huntington Beach, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Huntington Beach, California, as of June 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 1 347 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 Huntington Beach, California, as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information for the General Fund and each major special revenue fund, schedule of changes in net pension liability and related ratios, schedule of pension contributions, schedule of money market weighted rate of return, schedule of changes in net OPEB liability and related ratios, and schedule of OPEB contributions 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Huntington Beach’s basic financial statements. The combining and individual fund financial statements and schedules, the introductory section and the statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules are the responsibility of management and were derived from and relates 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 and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section and the 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 it. 2 348 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 1 6, 2020 on our consideration of the City of Huntington Beach'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 City of Huntington Beach’s internal control over financial reporting and compliance. Irvine, California December 16, 2020 3 349 MANAGEMENT DISCUSSION AND ANALYSIS 4 350 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 As management of the City of Huntington Beach, we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City of Huntington Beach for the year ended June 30, 2020. 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 on pages iii-ix of this report. Financial Highlights Below is a summary of the City’s government-wide financial information (in thousands):  The City of Huntington Beach’s total assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $682,416,000. Total net position decreased by $528,000 or 0.1 percent and unrestricted net position decreased by $21,766,000 or 10.2 percent in spite of the growth in assets primarily as a result of the ramp up in liabilities and decrease in deferred outflows of resources related to pension and other postemployment benefits.  Long-term obligations increased by $10,581,000 or 2.0 percent. This increase is primarily due to the rise in pension and OPEB liabilities. In addition, a new lease in the amount of $1,172,000 was approved in fiscal year 2019/20 to finance the fire engine and ambulance replacement.  Deferred outflows of resources decreased by $12,944,000 or 18.3 percent due to the actuarially determined amortization of changes in assumptions, differences between expected and actual investment earnings, and differences between expected and actual experience used to determine the City’s net pension liability. Deferred inflows of resources increased by $888,000 or 6.6 percent primarily due to the net difference between the projected and actual earnings on pension plan investments. June 30, 2020 June 30, 2019 Amount Increase (Decrease) Percent Increase (Decrease) Assets 1,210,177$ 1,177,879$ 32,298$ 2.7% Deferred Outflows of Resources 57,761 70,705 (12,944) -18.3% Liabilities 571,233 552,239 18,994 3.4% Deferred Inflows of Resources 14,289 13,401 888 6.6% Total Net Position 682,416 682,944 (528) -0.1% Unrestricted Net Position (236,041) (214,275) (21,766) 10.2% Long-Term Obligations 538,081 527,500 10,581 2.0% Program Revenues 146,713 144,865 1,848 1.3% Taxes 175,663 175,576 87 0.1% Other General Revenues 9,271 16,027 (6,756) -42.2% Expenses 332,174 305,331 26,843 8.8% Total Governmental and Business-Type Activities 5 351 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020  Program revenues increased by $1,848,000 or 1.3 percent. The two largest increases are from one-time revenue sources consisting of Hermosa Vista and Huntington Pointe loan repayments amounting to almost $7,400,000, and affordable housing in-lieu fees of $2,200,000 paid by the developer to fulfill the affordable housing requirement for the Sea Dance Housing Development. These sizable payments help offset the decline in charges for services that are attributed to the change in water connection and capital surcharge fee calculation which resulted to an overall reduction in water revenue and loss of revenue due to COVID- 19. In March 2020, street sweeping citations were halted as part of the HB Ready Response Plan, rent for City-owned concessionaires were temporarily abated and recreational classes were cancelled. Additionally, in April 2020, a payment deferral program for business license renewal payments and transient occupancy taxes covering the period of March 1-July 31, 2020 was established, providing businesses the option to postpone payment of fees and revenues charged and/or collected during this period until June 30, 2021. Moreover, substantial amounts of development impact fees were collected in fiscal year 2018/19 from three large residential development projects. Development impact fees can fluctuate from year to year depending on a number of factors that attract developers to do large projects in the City.  Expenses increased by $26,843,000 or 8.8 percent due to the significant increase in pension and workers compensation costs that have been allocated to the various functions. Furthermore, spending on non-capital improvements in Community Development and Public Works increased. Police and Fire also incurred additional labor costs during the height of the pandemic and civil unrest to address the community needs and maintain public safety. Overview of the Financial Statements This discussion and analysis serves as an introduction to the City of Huntington Beach’s basic financial statements. The City of Huntington Beach’s basic financial statements are comprised of three components: 1) government-wide financial statements; 2) fund financial statements; and 3) notes to the financial statements. This report also contains certain other supplementary information in addition to the basic financial statements. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City’s financial condition and are prepared similarly to those in the private sector. The Statement of Net Position presents information on all of the City’s assets, liabilities, deferred outflows and inflows with the difference between them reported as net position. Over time, continued increases or decreases in net position may indicate whether the City’s financial condition is improving or deteriorating. 6 352 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 The Statement of Activities presents information on how the City’s net position changed during the most recent fiscal year. These changes are reported on the full accrual basis when the economic event occurs (not when the cash is received or paid). The government-wide financial statements separate functions that are primarily supported by taxes and intergovernmental revenues (governmental activities) from functions that are supported by user fees (business-type activities). Governmental activities include the City Council, City Manager, City Treasurer, City Attorney, City Clerk, Finance, Community Development, Fire, Information Services, Police, Community Services, Library Services, and Public Works departments. Business-type activities include Water, Sewer, Refuse, and Hazmat Services. The government-wide financial statements include the City and all of its component units that are legally separate but whose activities entirely support the City of Huntington Beach. The government-wide financial statements can be found on pages 25-26 of this report. Fund Financial Statements The City separates financial activities into funds to maintain control over resources that have been legally separated. 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 the same functions reported in governmental activities in the government-wide financial statements. However, the focus in the governmental fund section of these financial statements is on near-term resource inflows and outflows available for spending, as well as balances of resources available for spending at the end of the fiscal year. It is useful to compare information presented for the governmental funds to information presented for governmental activities in the government-wide financial statements. The reconciliations indicate to the reader the differences in financial reporting between the governmental activities section and the governmental funds section. The City maintains 25 individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and in the governmental funds Statement of Revenue, Expenditures, and Changes in Fund Balances for the General Fund, Grants Special Revenue Fund, and Low and Moderate Income Housing Asset Fund (LMIHAF) Capital Projects Fund all of which are considered to be major funds. Data from the other 22 smaller funds are combined into a single, aggregated presentation. Individual fund data for each of these other governmental funds is provided in combining statements elsewhere in this report. 7 353 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 The City provides an annual appropriated budget for its governmental funds. Budgetary comparison schedules for the General Fund and the major special revenue fund (Grants) are required to be presented and are included on pages 125 and 126 of this report and demonstrate compliance with the budget. The basic governmental fund financial statements can be found on pages 27 and 29 of this report. Proprietary Funds The City maintains two different types of proprietary funds, which are used to account for the same activities as the business-type activities in the government-wide financial statements. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its Water, Sewer Service, Refuse, and Hazmat Service activities. Internal Service funds are used in accounting as a device to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for its self-insurance worker’s compensation activities, self-insurance general liability activities, and equipment replacement needs. 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 fund financial statements provides information for Water, Sewer Service, Refuse, Hazmat Service, Self-Insurance Workers’ Compensation, Self-Insurance General Liability, and Equipment Replacement Funds. The basic proprietary fund financial statements can be found on pages 31-33 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 of Huntington Beach’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on page 34 of this report. 8 354 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 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 36-120 of this report. 9 355 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 Other information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s progress in funding its obligation to provide pension and OPEB benefits to its employees and General Fund and major special revenue funds budget-to-actual comparisons. Required supplementary information can be found on pages 124-134 of this report. The combining statements and schedules referred to earlier in connection with other governmental funds is presented immediately following the required supplementary information on pensions. Combining and individual fund statements and schedules can be found on pages 139-146 of this report. Government-wide Financial Analysis As noted earlier, net position may serve, over time, as a useful indicator of a government’s financial position. At the end of the current fiscal year, the City reported positive net position balances for both governmental and business-type activities, with total assets plus deferred outflows exceeding liabilities plus deferred inflows by $682,416,000. Below is a summary schedule of the City’s net position at June 30, 2020 (in thousands): Governmental Activities June 30, 2020 June 30, 2019 Amount Increase (Decrease) Percent Increase (Decrease) Current and Other Assets 253,795$ 230,456$ 23,339$ 10.1% Capital Assets 714,759 708,469 6,290 0.9% Total Assets 968,554 938,925 29,629 3.2% Deferred Outflows of Resources 54,499 67,019 (12,520) -18.7% Current and Other Liabilities 22,200 15,137 7,063 46.7% Long-Term Obligations 508,578 498,810 9,768 2.0% Total Liabilities 530,778 513,947 16,831 3.3% Deferred Inflows of Resources 13,374 12,649 725 5.7% Net Position: Net Investment in Capital Assets 673,498 664,281 9,217 1.4% Restricted 79,926 66,089 13,837 20.9% Unrestricted (274,523) (251,022) (23,501) -9.4% Total Net Position 478,901$ 479,348$ (447)$ -0.1% Business-Type Activities June 30, 2020 June 30, 2019 Amount Increase (Decrease) Percent Increase (Decrease) Current and Other Assets 98,838$ 93,258$ 5,580$ 6.0% Capital Assets 142,785 145,696 (2,911) -2.0% Total Assets 241,623 238,954 2,669 1.1% Deferred Outflows of Resources 3,262 3,686 (424) -11.5% Current and Other Liabilities 10,952 9,602 1,350 14.1% Long-Term Obligations 29,503 28,690 813 2.8% Total Liabilities 40,455 38,292 2,163 5.6% Deferred Inflows of Resources 603 752 (149) -19.8% Net Position: Net Investment in Capital Assets 142,785 145,696 (2,911) -2.0% Restricted 22,248 21,153 1,095 5.2% Unrestricted 38,482 36,747 1,735 4.7% Total Net Position 203,515$ 203,596$ (81)$ 0.0% 10 356 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 Analysis of the City’s Net Position Current and Other Assets: The increase in current and other assets of $23,339,000 for governmental activities is mainly due to the increase in cash balance. The City received various Federal, State and County grants to cover emergency operational costs and economic development assistance to businesses impacted by the pandemic. CARES Act Funds of $6,500,000 were distributed by the County of Orange to the City in June 2020. Nearly $4,800,000 of the CARES funding was directed to help local small businesses that were negatively impacted by the pandemic and $1,700,000 was for other COVID-19 emergency costs. As previously mentioned, the developer of Hermosa Vista and Huntington Pointe Apartments repaid approximately $7,400,000 in loans issued by the City in 2001 and 2003 during FY 2019/20. The increase in current and other assets of $5,580,000 for business-type activities is due to an increase in cash balance. A large portion of the increase came from the revenue generated by the Water fund in excess of actual expenses paid in the fiscal year. In addition to the timing of payment of expenses, some planned improvement projects were postponed as a result of the pandemic. Current and Other Liabilities: Current and other liabilities for governmental activities increased by $7,063,000 and increased by $1,350,000 for business-type activities due to normal fluctuations in the accounts payable and payroll cycles. For governmental activities, the majority of the increase is related to CARES Act Funds received towards the end of the fiscal year that was recorded as unearned revenue. Deferred Outflows and Inflows of Resources: The decrease in deferred outflows of resources of $12,520,000 and $424,000 for governmental activities and business-type activities, respectively, and the increase in deferred inflows of resources of $725,000 for governmental activities and decrease of $149,000 for business-type activities, respectively, are mainly due to the actuarially determined amortization of changes in assumptions, differences between projected and actual earnings on pension plan investments, and differences between expected and actual experience used to determine the net pension and other postemployment benefits liabilities. See Notes 6, 7, and 8 for additional information. Long-Term Obligations: Long-term obligations for governmental activities increased by $9,768,000 primarily due to an increase in the City’s workers’ compensation claims and pension liabilities. Long-term obligations for business-type activities increased by $813,000 due to increases in compensated absences and net pension liabilities. Net Investment in Capital Assets: The largest portion of the City’s net position reflects investment in capital assets (e.g., land, buildings, machinery, equipment, and infrastructure), less any related debt used to acquire those assets that is still outstanding. The City uses capital assets to provide services to citizens; consequently, these assets 11 357 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, the resources needed to repay this debt must be provided from other sources, since capital assets themselves cannot be used to liquidate these liabilities. Net position invested in capital assets net of related debt from governmental activities increased $9,217,000 or 1.4 percent, primarily due to residential street improvements. Net position invested in capital assets net of related debt from business- type activities decreased $2,911,000 or 2.0 percent primarily due to normal year to year depreciation. Restricted Net Position: An additional portion of the City’s net position is subject to external (legally imposed or statutory) restrictions ($79,926,000 for governmental activities, and $22,248,000 for business-type activities). These amounts represent 16.7 percent and 10.9 percent of net position for governmental activities and business-type activities, respectively. Restricted net position from governmental activities increased $13,837,000 or 20.9 percent. The increase is largely due to the addition of the Pension Liability and Surf City “3” Funds, and increase in restricted net position in the LMIHAF, Infrastructure and Lease Capital Projects Funds. Restricted net position from business- type activities increased by $1,095,000 or 5.2 percent primarily due to an increase in restricted Water Master Plan funds available for capital projects as funds are spent. Unrestricted Net Position: The unrestricted net position (negative $274,523,000 for governmental activities and $38,482,000 for business-type activities) represent negative 57.3 percent and 18.9 percent, respectively, of net position for governmental activities and business-type activities. Unrestricted net position for governmental activities decreased $23,501,000 largely due to an increase in net pension and other postemployment benefits liabilities and decrease in deferred outflows of resources which are also related to pension and OPEB. Unrestricted net position for business-type activities increased by $1,735,000 or 4.7 percent during the year due to the net income from Sewer and Hazmat service operations in fiscal year 2019/20. 12 358 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 A condensed summary of governmental activities (in thousands) follows: Revenues: June 30, 2020 June 30, 2019 Amount Increase (Decrease) Percent Increase (Decrease) Program Revenues: Charges for Current Services 59,819$ 61,736$ (1,917)$ -3.1% Operating Grants and Contributions 8,141 6,644 1,497 22.5% Capital Grants and Contributions 14,483 8,361 6,122 73.2% Total Program Revenues 82,443 76,741 5,702 7.4% General Revenues: Property Taxes 94,263 89,124 5,139 5.8% Sales Taxes 44,616 47,437 (2,821) -5.9% Utility Taxes 18,149 18,788 (639) -3.4% Franchise Taxes 7,872 6,225 1,647 26.5% Transient Occupancy Tax 10,763 14,002 (3,239) -23.1% Use of Money and Property 3,208 8,746 (5,538) -63.3% From Other Agencies - Unrestricted 3,317 4,046 (729) -18.0% Total General Revenues 182,188 188,368 (6,180) -3.3% Total Revenues 264,631 265,109 (478) -0.2% Expenses: City Council 405 360 45 12.5% City Manager 3,328 4,501 (1,173) -26.1% City Treasurer 317 246 71 28.9% City Attorney 3,136 2,886 250 8.7% City Clerk 949 976 (27) -2.8% Finance 6,661 6,245 416 6.7% Human Resources - 6,261 (6,261) -100.0% Community Development 15,722 6,144 9,578 155.9% Fire 62,840 56,494 6,346 11.2% Information Services 8,643 7,530 1,113 14.8% P olice 97,204 87,355 9,849 11.3% Community Services 12,539 13,369 (830) -6.2% Library Services 5,776 5,206 570 10.9% Public Works 45,834 40,803 5,031 12.3% Interest on Long-Term Debt 1,686 1,823 (137) -7.5% Total Expenses 265,040 240,199 24,841 10.3% Change in Net Position Before Transfers (409) 24,910 Transfers (38) (37) Change in Net Position (447) 24,873 Net Position - Beginning of Year 479,348 454,475 Net Position - End of Year 478,901$ 479,348$ Governmental Activities 13 359 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 The cost of all governmental activities this year was $265,040,000. However, as shown in the Statement of Activities, the amount that the taxpayers ultimately financed for these activities was $182,597,000, because costs of $59,819,000 were paid by those who directly benefited from the programs, or by other governments and organizations that subsidized certain programs with operating grants and contributions of $8,141,000, and capital grants and contributions of $14,483,000. Overall, the City’s governmental program revenues were $82,443,000. The City paid for the remaining “public benefit” portion of governmental activities with $182,188,000 in taxes and general revenue (some of which may only be used for certain programs) and with other revenues, such as interest and general entitlements. Charges for current services decreased $1,917,000 or 3.1 percent. As noted in the financial highlights section, the absence of one-time revenue sources from large development projects and City’s responses to help mitigate the risks posed by COVID-19 negatively impacted the City’s parking-related revenue and recreational fees which caused the Charges for Current Services to drop. The one-time affordable housing in-lieu fee and PCTA settlement payment received in fiscal year 2019/20 partially offset the loss in revenue. Operating Grants and Contributions increased by $1,497,000 or 22.5 percent and Capital Grants and Contributions have increased by $6,122,000 or 73.2 percent, respectively, primarily due to the Hermosa Vista and Huntington Pointe loan repayments of almost $7,400,000. Program expenses increased by $24,841,000 or 10.3 percent due to the rise in pension and workers compensation costs coupled with the increase in spending on Police, Community Development, Fire, and Public Works. Due to COVID-19 and a number of protests that occurred in the latter part of the fiscal year, additional Police and Fire related expenses were incurred. There were also several non-capital improvements that caused the Community Development and Public Works expenses to increase. Total resources available during the year to finance governmental operations were $743,979,000 consisting of net position at July 1, 2019 of $479,348,000, program revenues of $82,443,000, and general revenues of $182,188,000. Total expenses for governmental activities during the year were $265,040,000 plus transfers of $38,000. Thus, net position decreased by $477,000 or 0.1 percent, to $478,901,000. 14 360 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 A condensed summary of business-type activities (in thousands) follows: The City’s net position from business-type activities decreased by $119,000 before transfers. The formula to calculate the water connections and capital surcharge fees were changed in July 2019 that ultimately led to lower revenues. The cost of all business-type activities this year was $67,135,000. As shown in the Statement of Activities, the amount paid by users of the systems was $64,270,000, other revenue was $2,746,000, and transfers were $38,000. Beginning net position was $203,596,000 and ending net position was $203,515,000, a decrease of $81,000 which is less than a tenth of a percentage. Of the ending net position amount, $142,785,000, or 70.2 percent, was invested in capital assets, $22,248,000 or 10.9 percent was restricted for expenses for the Water Master Plan, and $38,482,000, or 18.9 percent was unrestricted. Transfers in for business-type activities were $38,000 for the current year and $37,000 for the prior year. June 30, 2020 June 30, 2019 Amount Increase (Decrease) Percent Increase (Decrease) Program Revenues: Charges for Current Services 64,270$ 68,124$ (3,854)$ -5.7% Total Program Revenues 64,270 68,124 (3,854) -5.7% Use of Money and Property 2,746 3,235 (489) -15.1% Total Revenues 67,016 71,359 (4,343) -6.1% Expenses: Water Utility 44,463 43,405 1,058 2.4% Sewer Service 9,828 9,442 386 4.1% Refuse Collection 12,609 12,051 558 4.6% Hazmat Service 235 234 1 0.4% Total Expenses 67,135 65,132 2,003 3.1% Increase (Decrease) in Net Position Before Transfers (119) 6,227 Transfers 38 37 Total Change In Net Position (81) 6,264 Net Position - Beginning of Year 203,596 197,332 Net Position - End of Year 203,515$ 203,596$ Business-Type Activities 15 361 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 Financial Analysis of the City’s Major Governmental Funds Below is an analysis of the City’s major governmental fund activities for the year (in thousands): The General Fund Balance increased by $1,075,000. The increase in total expenditures was minimal and the amount transferred out of the fund was lower in fiscal year 2019/20. However, California’s stay-at-home orders, decisions to temporarily close businesses, CDTFA's sales tax deferral program and payment deadline extensions, City’s TOT deferral program and the general economic uncertainty caused by the pandemic tampered the growth experienced in the first 3 quarters of the fiscal year and resulted in a loss of sales tax, transient occupancy tax, utility users tax, parking revenues, and concessionaire revenues. The Grants Special Revenue Fund Balance decreased by $1,508,000 primarily due to the increase in COVID-19 related expenditures that is anticipated to be reimbursed with CARES Act and FEMA Disaster Relief funds, and other capital projects that have not been reimbursed by the granting agencies. The bulk of the capital project expenditure increase is related to the Atlanta Avenue Widening Project and various traffic signal projects throughout the City including the Bolsa Chica/Pearce Traffic Signal Project, Gothard/Center Signal Modification Project and Gothard/Slater Signal Modification Project. The LMIHAF Capital Projects Fund Balance increased by $3,944,000 as a result of repayments received from loans issued by the City for down payment assistance and the acquisition and construction of developments for low and moderate-income residents. June 30, 2020 June 30, 2019 Amount Increase (Decrease) Percent Increase (Decrease) Total Fund Equity: General Fund 80,088$ 79,013$ 1,075$ 1.4% Grants Special Revenue Fund 4,561 6,069 (1,508) -24.8% LMIHAF Capital Projects Fund 9,485 5,541 3,944 71.2% Total Fund Equity 94,134$ 90,623$ 3,511$ 3.9% GOVERNMENTAL FUNDS 16 362 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 Financial Analysis of the City’s Major Proprietary Funds Below is an analysis of the fund equity of the City’s proprietary funds (in thousands): The Water Fund total net position decreased by $2,158,000 due to lower revenues recognized in fiscal year 2019/20 which also caused the unrestricted net position to decline by $403,000. The Sewer Fund net position increased by $2,009,000 and unrestricted net position increased by $2,049,000 due to planned sewer projects being deferred to the following year. In addition, all enterprise funds with the exception of the Water Fund generated revenues that exceeded the expenses incurred for the current fiscal year. Long-Term Obligations Below is a schedule of the changes to the City’s long-term obligations (in thousands): June 30, 2020 June 30, 2019 Amount Increase (Decrease) Percent Increase (Decrease) Net Position: Water Fund 125,233$ 127,391$ (2,158)$ -1.7% Sewer Fund 78,275 76,266 2,009 2.6% Refuse Fund (83) (105) 22 21.0% Hazmat Service Fund 90 44 46 104.5% Total Net Position 203,515$ 203,596$ (81)$ 0.0% Unrestricted Net Position: Water Fund 11,125$ 11,528$ (403)$ -3.5% Sewer Fund 27,506 25,457 2,049 8.0% Refuse Fund (239) (282) 43 15.2% Hazmat Service Fund 90 44 46 104.5% Total Unrestricted Net Position 38,482$ 36,747$ 1,735$ 4.7% Enterprise Funds Governmental Activities: Balance July 1, 2019 Additions Retirements Balance June 30, 2020 Revenue Bonds 39,150$ -$ (3,485)$ 35,665$ Compensated Absences 11,295 5,294 (3,956) 12,633 Claims Payable 35,026 13,068 (10,939) 37,155 Pollution Remediation 2,000 - - 2,000 LED Lighting Phase I 656 - (110) 546 I-Bank CLEEN Loan 2,454 - (283) 2,171 CEC Loan 2,818 - (230) 2,588 Leases Payable 5,083 1,172 (1,014) 5,241 Total Long-Term Obligations - Governmental Activities 98,482 19,534 (20,017) 97,999 Business-Type Activities: Compensated Absences 1,416 590 (391) 1,615 Business-Type Activities: 1,416 590 (391) 1,615 Total Long-Term Obligations 99,898$ 20,124$ (20,408)$ 99,614$ 17 363 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 Additional information on the City’s long-term debt is shown in Note 11 to the financial statements. The City of Huntington Beach is legally restricted to issuing general obligation bonds to 12 percent of its assessed valuation. Since the City has no general obligation bonds outstanding, the limit does not apply. The City’s total long-term obligations decreased slightly by $284,000 or 0.3 percent from the prior fiscal year as debt service payment were partially offset by a new lease in the amount of $1,172,000 that was approved to finance the purchase of a fire engine and ambulance replacement. The City continues to maintain strong credit ratings on all of its debt issues. Most notably, on August 27, 2014 Fitch Ratings issued an AAA Implied General Obligation Bond rating to the City of Huntington Beach and that same rating was most recently reaffirmed in July 2020. Additionally, in April 2019, the 1999 RDA bonds received a credit ratings increase from Moody’s Investor Service of two tiers, from A2 to Aa3. The following are the ratings as determined by Moody’s Investors Service and Standard and Poor’s as of June 30, 2020. Capital Assets The capital assets of the City are those assets which are used in the performance of the City’s functions including infrastructure assets. The City has elected to use the “Basic Approach” as defined by GASB Statement No. 34 for infrastructure reporting. The following infrastructure networks are recorded as capital assets in the government-wide financial statements:  Storm drain system including pump stations, drainage system and manholes.  Streets (including land underneath streets), traffic signals, curbs, gutters, and sidewalks. Debt Instrument Moody's S & P 1999 Tax Allocation Refunding Bonds Aa3 AA- 2002 Tax Allocation Refunding Bonds N/A AA- 2010 Lease Revenue Bonds, Series A Aa2 AA 2011 Lease Revenue Bonds, Series A Aa2 AA 2014 Lease Revenue Bonds, Series A N/A AA 18 364 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 Below is a schedule of the City’s capital assets, net of accumulated depreciation (in thousands): Capital assets from governmental activities increased $6,290,000 or 0.9 percent. This increase is largely due to street replacement infrastructure costs. Capital assets from business-type activities decreased $2,911,000 or 2.0 percent largely due to regular depreciation for the year. Further information on the City’s capital assets can be found in Note 12 of the financial statements. General Fund Budgetary Highlights Changes to Original Budget Comparing the FY 2019/20 General Fund Original (i.e. Adopted) Budget expenditures amount of $213,270,000 to the final budgeted amount of $219,038,000 shows a net increase of $5,768,000, or 2.7 percent. This overall increase was largely the result of budget carryovers from the previous year. Final budgeted revenues for the General Fund decreased $5,207,000 or 2.3 percent from the original (adopted) budget for the fiscal year ended June 30, 2020. The change from original to final budget occurred primarily as a result of adjustments made to budgeted property tax, other taxes, fines, forfeitures and penalties, charges for current services and other revenues. Governmental Activities: June 30, 2020 June 30, 2019 Amount Increase (Decrease) Percent Increase (Decrease) Land 362,069$ 362,534$ (465)$ -0.1% Buildings 126,779 128,628 (1,849) -1.4% Machinery and Equipment 13,962 13,267 695 5.2% Construction in Progress 7,515 7,631 (116) -1.5% Infrastructure 204,434 196,409 8,025 4.1% Total Governmental Activities 714,759 708,469 6,290 0.9% Business-Type Activities: Land 3,907 3,907 - 0.0% Buildings 68,359 63,356 5,003 7.9% Machinery and Equipment 7,025 7,776 (751) -9.7% Construction in Progress 442 5,701 (5,259) -92.2% Infrastructure 63,052 64,956 (1,904) -2.9% Total Business-Type Activities 142,785 145,696 (2,911) -2.0% Total Capital Assets 857,544$ 854,165$ 3,379$ 0.4% 19 365 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 Variance with Final Budget General Fund actual revenues were less than the final budget by $388,000 for the fiscal year ended June 30, 2020. General Fund expenditures were $3,402,000 less than the final budget. The favorable budget variance is due in large part to the following:  The Community Services and Library Services Departments realized $914,000 in savings primarily due to a reduction in city-provided services impacted by the COVID-19 pandemic.  The Public Works and Community Development Departments realized $1,532,000 in savings primarily due to differences in the projected versus actual timing of design, construction, and maintenance contracts for projects, as well as the deferral of various building and planning contracts. Analysis of City’s Other Major Governmental Funds Grants Special Revenue Fund The fund balance in the Grant Special Revenue Fund decreased by $1,508,000. Significant grant expenditures in the current year were for Community Development Block Grant, HOME Grant, street improvement and traffic signal grants and projects, and COVID- 19 related expenditures that will either be reimbursed by FEMA and/or funded with CARES Act Funds from the State. LMIHAF Capital Projects Fund The fund balance in the LMIHAF Capital Projects Fund increased by $3,944,000 as a result of repayments received for loans issued by the City for down payment assistance and the acquisition and construction of developments for low and moderate-income residents. Economic Factors and Next Year’s Budget The Adopted FY 2020/21 Budget is structurally balanced, totaling $359.0 million in All Funds. This reflects a $22.0 million, or 5.8 percent decrease from the FY 2019/20 Adopted All Funds Budget of $381.0 million. The largest All Funds decreases are attributed to the Retirement Supplemental Fund ($3.1 million), Hotel/Motel Business Improvement District (BID) ($1.1 million), Water Master Plan Fund ($1.6 million), and RORF Fund ($1.4 million). The General Fund, which provides the majority of public services to the community, totals $216.9 million, reflecting a $14.7 million, or 6.4 percent decrease from the FY 2019/20 20 366 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 budget of $231.6 million in response to the anticipated impact of the COVID-19 pandemic. The largest budget revenue decline is in Transient Occupancy Tax, which is anticipated to decrease $7.4 million or 51.8 percent. Sales tax revenue, the second largest revenue category for the City, was budgeted at $39.2 million, a decrease of 4.8 percent from the FY 2019/20 Adopted Budget. The Adopted General Fund Budget for next year has no reliance on one-time revenues to fund ongoing operations, which is critical to maintaining the City’s financial viability and success. Major highlights are as follows: Public Safety: Funding for Public Safety represents 60 cents for every dollar spent in the General fund. With over half of the General Fund Budget committed to the Police and Fire Departments, the City has dedicated the greatest share of its resources, or $129.6 million to these core services. In the Police Department, the budget adds $1.6 million in equipment replacement including replacement of 11 police vehicles. The CIP includes $300,000 for the Police Department South substation renovation. In the Fire Department, the Adopted Budget adds $452,000 in equipment replacement including replacement of an ambulance, lifeguard rescue boats, and breathing air compressors. The General Fund CIP includes $820,000 for modifications to the Heil Fire Station apparatus bay entry and Lake Fire Station renovation. An Existential Threat: Pension Cost Increases: In December 2016, the CalPERS Board of Administration voted to lower the annual expected rate of return for the over $300 billion Statewide portfolio from the existing rate of 7.5 percent to 7.0 percent. While this is a practical and financially sound response to the mounting pressure that PERS’ investment projections have gone largely unmet for years, this change will regrettably be fully borne by cities and counties throughout the State, not by CalPERS itself. For the City of Huntington Beach, the increased pension costs have been significant. In FY 2020/21, CalPERS costs are about $41.7 million in the General Fund. It is anticipated the City will incur an additional $10.0 million per year in pension costs by FY 2024/25, bringing the City’s total CalPERS pension costs to approximately $55.8 million. While the City Council and staff work diligently to mitigate the effects, these dramatic cost increases have real world impacts. They limit the City’s ability to invest in its infrastructure, enhance services, and restore service level reductions made during the Great Recession. The FY 2020/21 Adopted Budget is balanced. However, due to the continuing economic downturn resulting from the COVID-19 pandemic, significant budget reductions were made to minimize impacts to fund balance. This fiscally conservative approach to developing the FY 2020/21 budget seeks to implement the City Council’s priorities and strategic goals, 21 367 City of Huntington Beach Management’s Discussion and Analysis For the Year Ended June 30, 2020 and continues to fund the most critical operations to meet the needs of our residents and businesses; while also adapting to a new reality of constrained revenues. General Fund Revenue General Fund revenue is projected to be $216.9 million, a $13.9 million or 6.0 percent decrease from the FY 2019/20 Adopted Budget resulting from the COVID-19 stay-at-home and social distancing public health orders.  Property Taxes are estimated at $94.4 million, reflecting an increase of 5.2 percent due to the low interest rates leading to accelerated growth in assessed valuations.  Sales Tax revenues are projected to be $39.2 million, a decrease of 4.8 percent from fiscal year 2019/20. The decrease is due to mandated stay-at-home orders, which severely reduced consumer activity.  Transient Occupancy Taxes are anticipated to reach $6.9 million, a 51.7 percent decrease due decline in occupancy in Huntington Beach hotels in the early part of the fiscal year due to travel restrictions as a result of COVID-19 pandemic.  Utility Users’ Taxes, budgeted at $16.6 million, is decreasing by 7.3 percent due to the long term trends towards energy conservation and bundled telecommunication packages. Contacting the City’s Financial Management Team This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report, separate reports of the City’s component units or need any additional financial information, contact the Finance Department at 2000 Main Street, Huntington Beach, California, 92648-2702, phone (714) 536-5630 or email tvi@surfcity-hb.org. 22 368 THIS PAGE INTENTIONALLY LEFT BLANK 23 369 BASIC FINANCIAL STATEMENTS 24 370 See Notes to Financial Statements ASSETS Governmental Activities Business-Type Activities Total Cash and Investments 211,878$ 90,140$ 302,018$ Cash and Investments with Fiscal Agent 5,815 - 5,815 Receivables, Net 33,712 5,947 39,659 Advances to Successor Agency 1,363 - 1,363 Inventories - 1,433 1,433 Prepaids 770 - 770 Joint Venture 257 1,318 1,575 Subtotal 253,795 98,838 352,633 Capital Assets: Non-Depreciable 369,584 4,349 373,933 Depreciable, Net 345,175 138,436 483,611 Total Capital Assets 714,759 142,785 857,544 Total Assets 968,554 241,623 1,210,177 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows Related to Pensions 51,659 2,925 54,584 Deferred Outflows Related to Other Postemployment Benefits 2,840 337 3,177 Total Deferred Outflows of Resources 54,499 3,262 57,761 LIABILITIES Current Liabilities: Accounts Payable 6,510 8,611 15,121 Accrued Payroll 5,666 548 6,214 Unearned Revenue 7,095 - 7,095 Accrued Interest Payable 568 - 568 Deposits 2,361 1,793 4,154 Subtotal 22,200 10,952 33,152 Long-Term Obligations: Long-Term Obligations Due Within One Year 17,763 440 18,203 Long-Term Obligations Due in More than One Year 80,236 1,175 81,411 Net Pension Liability 407,316 27,499 434,815 Net Other Postemployment Benefits Liability 3,263 389 3,652 Total Long-Term Obligations 508,578 29,503 538,081 Total Liabilities 530,778 40,455 571,233 DEFERRED INFLOWS OF RESOURCES Deferred Inflows Related to Pensions 10,758 603 11,361 Deferred Inflows Related to Other Postemployment Benefits 2,616 312 2,928 Total Deferred Inflow of Resources 13,374 915 14,289 NET POSITION Net Investment in Capital Assets 673,498 142,785 816,283 Restricted for: Debt Service 16,986 - 16,986 Capital Projects 11,761 22,248 34,009 Public Works and Community Services Projects 51,179 - 51,179 Total Restricted Net Position 79,926 22,248 102,174 Unrestricted (274,523) 38,482 (236,041) Total Net Position 478,901$ 203,515$ 682,416$ CITY OF HUNTINGTON BEACH STATEMENT OF NET POSITION JUNE 30, 2020 (In Thousands) 25 371 See Notes to Financial Statements Program Revenues Functions/Programs Expenses Charges for Current Services Operating Grants and Contributions Capital Grants and Contributions Governmental Activities Business- Type Activities Total Governmental Activities: City Council 405$ 177$ -$ -$ (228)$ -$ (228)$ City Manager 3,328 5,315 40 17 2,044 - 2,044 City Treasurer 317 163 - - (154) - (154) City Attorney 3,136 7 - - (3,129) - (3,129) City Clerk 949 220 - - (729) - (729) Finance 6,661 3,302 - - (3,359) - (3,359) Community Development 15,722 10,037 3,826 5,477 3,618 - 3,618 Fire 62,840 10,122 80 - (52,638) - (52,638) Information Services 8,643 636 - - (8,007) - (8,007) Police 97,204 5,329 1,689 - (90,186) - (90,186) Community Services 12,539 17,631 373 - 5,465 - 5,465 Library Services 5,776 266 167 - (5,343) - (5,343) Public Works 45,834 6,614 1,966 8,989 (28,265) - (28,265) Interest on Long-Term Debt 1,686 - - - (1,686) - (1,686) Total Governmental Activities 265,040 59,819 8,141 14,483 (182,597) - (182,597) Business-type Activities: Water Utility 44,463 40,518 - - - (3,945) (3,945) Sewer Service 9,828 10,900 - - - 1,072 1,072 Refuse Collection 12,609 12,573 - - - (36) (36) Hazmat Service 235 279 - - - 44 44 Total Business-Type Activities 67,135 64,270 - - - (2,865) (2,865) Total Governmental and Business Type Activities 332,175$ 124,089$ 8,141$ 14,483$ (182,597)$ (2,865)$ (185,462)$ General Revenues: Taxes: Property Taxes 94,263 - 94,263 Sales Taxes 44,616 - 44,616 Utility Taxes 18,149 - 18,149 Franchise Taxes 7,872 - 7,872 Transient Occupancy Tax 10,763 - 10,763 Total Taxes 175,663 - 175,663 Other: Use of Money and Property 3,208 2,746 5,954 From Other Agencies - Unrestricted 3,317 - 3,317 Total General Revenues 182,188 2,746 184,934 Transfers (38) 38 - Total General Revenues and Transfers 182,150 2,784 184,934 Change in Net Position (447) (81) (528) Net Position - Beginning of Year 479,348 203,596 682,944 Net Position - End of Year 478,901$ 203,515$ 682,416$ Net (Expense) Revenue and Changes in Net Position CITY OF HUNTINGTON BEACH STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) 26 372 See Notes to Financial Statements CITY OF HUNTINGTON BEACH BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2020 (In Thousands) ASSETS General Fund Grants Special Revenue LMIHAF Capital Projects Other Governmental Funds Total Cash and Investments 76,184$ 11,543$ 8,130$ 77,095$ 172,952$ Cash and Investments with Fiscal Agent - 30 - 5,785 5,815 Taxes Receivable 11,350 - - 1,098 12,448 Other Receivables, Net 7,523 4,266 9,036 305 21,130 Advances to Successor Agency - - 1,363 - 1,363 Prepaids 120 - 50 - 170 TOTAL ASSETS 95,177$ 15,839$ 18,579$ 84,283$ 213,878$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts Payable 3,888$ 720$ 78$ 1,286$ 5,972$ Accrued Payroll 5,389 186 8 60 5,643 Unearned Revenue 626 6,469 - - 7,095 Deposits Payable 2,360 1 - - 2,361 Total Liabilities 12,263 7,376 86 1,346 21,071 Deferred Inflows of Resources: Unavailable Revenue 2,826 3,902 9,008 - 15,736 Total Deferred Inflows of Resources 2,826 3,902 9,008 - 15,736 Fund Balances: Nonspendable Prepaids 120 - 50 - 170 Restricted Underground Utilities 364 - - - 364 Restitution 282 - - - 282 Senior Center Donations 180 - - - 180 Section 115 Trust 7,503 - - - 7,503 Pollution Remediation - - - 355 355 Debt Service - - - 16,986 16,986 Highways, Streets and Transportation - - - 14,049 14,049 Low Income Housing - - 9,435 2,350 11,785 Air Quality - - - 1,262 1,262 Other Capital Projects - - - 20,752 20,752 Other Purposes 991 4,561 - 1,921 7,473 Committed Economic Uncertainties 25,010 - - - 25,010 Parks - - - 1,951 1,951 Other Capital Projects - - - 19,784 19,784 Assigned Capital Improvement Reserve 8,046 - - 3,527 11,573 Equipment Replacement 8,295 - - - 8,295 General Plan Maintenance 791 - - - 791 General Liability Plan Migration 2,801 - - - 2,801 Cityview Replacement 1,028 - - - 1,028 Section 115 Trust 2,500 - - - 2,500 Triple Flip 896 - - - 896 Strategic Initiatives 16,536 - - - 16,536 Housing Agreement 101 - - - 101 Year-End Fair Value 1,983 - - - 1,983 Other Purposes 2,661 - - - 2,661 TOTAL FUND BALANCES 80,088 4,561 9,485 82,937 177,071 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 95,177$ 15,839$ 18,579$ 84,283$ 213,878$ 27 373 See Notes to Financial Statements Amounts reported for governmental activities in the statement of net position are different because: Total Fund Balances Governmental Funds 177,071$ Net capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds. Amounts exclude net Capital Assets of the Internal Service Funds. Capital Assets 1,077,066 Accumulated Depreciation (366,365) Total Capital Assets 710,701 710,701 Joint Venture 257 Internal Services funds are used by management to charge the cost of various city activities to individual governmental and business-like funds. The assets and liabilities of the Internal Service fund must be added to the Statement of Net Position. 4,727 Revenues that are measurable but not available are not recogniz ed as revenue in governmental funds. Such amounts are recorded as unavailable revenue under the modified accrual basis of accounting.15,736 Deferred outflows related to pensions 51,518 Deferred outflows related to Other Postemployment Benefits (OPEB) 2,824 Governmental funds report all pension contributions as expenditures; however, in the statement of net position, the excess of the total pension liability over the plan fiduciary net position is reported as a net pension liability. (405,988) Deferred inflows related to pensions (10,729) Deferred inflows related to Other Postemployment Benefits (OPEB) (2,602) Governmental funds report all OPEB contributions as expenditures; however, in the statement of net position, the excess of the total OPEB liability over the plan fiduciary net position is reported as a net pension liability. (3,246) Other long-term liabilities are not due in the current period and, therefore, are not recorded in the governmental funds. Accrued Interest Payable (568) Long-term Liabilities, including bonds and certificates of participation payable, are not due and payable in the current period and therefore are not reported in the governmental funds. Amounts exclude Long-Term Obligation of the Internal Service Fund. Long-Term Obligations Due in One Year (8,849) Long-Term Obligations Due in More than One Year (51,951) Net Position of Governmental Activities 478,901$ (In Thousands) CITY OF HUNTINGTON BEACH RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2020 28 374 See Notes to Financial Statements REVENUES General Fund Grants Special Revenue LMIHAF Capital Projects Other Governmental Funds Total Property Taxes 87,497$ -$ -$ 6,766$ 94,263$ Sales Taxes 41,063 - - 3,553 44,616 Utility Taxes 18,149 - - - 18,149 Other Taxes 17,499 - - 7,079 24,578 Licenses and Permits 8,368 - - 2,898 11,266 Fines and Forfeitures 3,403 - - - 3,403 From Use of Money and Property 17,510 2,508 5,688 2,157 27,863 Intergovernmental 4,102 5,292 - 1,915 11,309 Charges for Current Services 25,501 - - 4,022 29,523 Other 2,395 989 - 1,865 5,249 Total Revenues 225,487 8,789 5,688 30,255 270,219 EXPENDITURES Current: City Council 394 - - - 394 City Manager 4,045 11 - 286 4,342 City Treasurer 297 - - - 297 City Attorney 2,898 - - - 2,898 City Clerk 874 12 - - 886 Finance 6,174 5 - 21 6,200 Community Development 9,184 1,859 1,339 2,310 14,692 Fire 55,030 1,447 - - 56,477 Information Services 7,812 105 - 556 8,473 Police 85,993 1,689 - - 87,682 Community Services 9,064 809 - 4,556 14,429 Library Services 4,752 290 - 157 5,199 Public Works 27,264 3,927 - 16,464 47,655 Debt Service: Principal 1,637 - - 3,485 5,122 Interest 218 - - 1,530 1,748 Total Expenditures 215,636 10,154 1,339 29,365 256,494 Excess (Deficiency) Of Revenues Over (Under) Expenditures 9,851 (1,365) 4,349 890 13,725 OTHER FINANCING SOURCES (USES) Transfers In 172 36 - 9,801 10,009 Issuance of Long-Term Debt - - - 1,172 1,172 Transfers Out (8,948) (179) (405) (515) (10,047) Total Other Financing Sources (Uses) (8,776) (143) (405) 10,458 1,134 Net Change In Fund Balances 1,075 (1,508) 3,944 11,348 14,859 Fund Balances - Beginning Of Year 79,013 6,069 5,541 71,589 162,212 Fund Balances - End Of Year 80,088$ 4,561$ 9,485$ 82,937$ 177,071$ (In Thousands) CITY OF HUNTINGTON BEACH STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 29 375 See Notes to Financial Statements Amounts reported for governmental activities in the Statement of Activities are different because: Net Changes in Fund Balances - Total Governmental funds 14,859$ Depreciable Assets Purchased 21,527 Non-Depreciable Assets Purchased 2,423 Non-Depreciable Assets Disposition (2,331) Capital Asset Dispositions (3,117) Capital Asset Depreciation (14,096) Joint Venture (2,455) Current Year Grant and Other Revenue Accrual 2,922 Prior Year Grant and Other Revenue Accrual (2,289) 1,371 Pension expenses reported in the statement of activities includes the change in the net pension liability and related changes in pension amounts for deferred outflows and deferred inflows of resources. (23,875) 435 Internal service funds are used by management to charge the costs of certain activities, such as self insurance workers' compensation charges. The net revenue of this internal service fund is reported as government al activities. 1,516 Current Year Interest Accrual (568) Prior Year Interest Accrual 630 5,122 (1,172) (1,349) Change in Net Position of Governmental Activities (447)$ FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) CITY OF HUNTINGTON BEACH RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Accrual of Revenues - Certain revenues in the Statement of Activities do not meet the "availability" criteria for revenue recognition in the governmental funds and are not reported in the governmental funds as revenue. Capital Expenditures - Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of these assets are allocated over their estimated useful lives and reported as depreciation expense. Liabilities not liquidated with current resources - Some 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. The issuance of long-term debt provides current financial resources to governmental funds. Repayment of long-term debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Other Postemployment Benefits Payments - 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 (expenses). Repayments on long-term receivables provide current financial resources to governmental funds, while loans provided consume the current financial resources of governmental funds. These transactions, however, have no effect on net position. The repayment of some expenses such as compensated absences, claims, and pension expenses, reported in the Statement of Activities, do not require the use of current resources, and therefore are not reported as expenditures in the governmental funds. 30 376 See Notes to Financial Statements Governmental Activities Water Fund Sewer Service Fund Refuse Fund Hazmat Service Fund Total Internal Service Funds ASSETS Current Assets: Cash and Investments 32,517$ 34,415$ 483$ 477$ 67,892$ 38,926$ Restricted Cash and Investments 22,248 - - - 22,248 - Other Receivables, Net 2,129 513 383 8 3,033 134 Prepaids - - - - - 600 Joint Ventures 1,318 - - - 1,318 - Inventories 1,433 - - - 1,433 - Unbilled Receivables 1,868 476 570 - 2,914 - Total Current Assets 61,513 35,404 1,436 485 98,838 39,660 Capital Assets: Land 3,907 - - - 3,907 - Buildings and Improvements 57,299 42,784 - - 100,083 - Machinery and Equipment 16,362 4,081 215 - 20,658 4,871 Infrastructure 101,865 44,096 - - 145,961 - Construction in Progress 15 427 - - 442 - Less Accumulated Depreciation (87,588) (40,619) (59) - (128,266) (813) Total Capital Assets 91,860 50,769 156 - 142,785 4,058 Total Assets 153,373 86,173 1,592 485 241,623 43,718 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows Related to Pensions 2,047 766 68 44 2,925 141 Deferred Outflows Related to Other Postemployment Benefits 243 83 8 3 337 16 Total Deferred Outflows of Resources 2,290 849 76 47 3,262 157 LIABILITIES Current Liabilities: Accounts Payable 6,938 664 1,009 - 8,611 538 Accrued Payroll 370 157 11 10 548 23 Deposits Payable 1,793 - - - 1,793 - Current Portion of Claims Payable - - - - - 8,902 Current Portion of Compensated Absences 315 108 16 1 440 12 Total Current Liabilities 9,416 929 1,036 11 11,392 9,475 Non-Current Liabilities: Compensated Absences 840 288 44 3 1,175 32 Net Pension Liability 19,249 7,199 639 412 27,499 1,328 Net Other Postemployment Benefits Liability 279 96 10 4 389 17 Claims Payable - - - - - 28,253 Total Non-Current Liabilities 20,368 7,583 693 419 29,063 29,630 Total Liabilities 29,784 8,512 1,729 430 40,455 39,105 DEFERRED INFLOWS OF RESOURCES Deferred Inflows Related to Pensions 422 158 14 9 603 29 Deferred Inflows Related to Other Postemployment Benefits 224 77 8 3 312 14 Deferred Inflows Related to Pensions 646 235 22 12 915 43 Total Deferred Inflows of Resources 646 235 22 12 915 43 NET POSITION Investment in Capital Assets 91,860 50,769 156 - 142,785 4,058 Restricted for: Capital Projects 22,248 - - - 22,248 - Unrestricted 11,125 27,506 (239) 90 38,482 669 Total Net Position 125,233$ 78,275$ (83)$ 90$ 203,515$ 4,727$ PROPRIETARY FUNDS STATEMENT OF NET POSITION CITY OF HUNTINGTON BEACH Business-Type Activities - Enterprise Funds (In Thousands) FOR THE YEAR ENDED JUNE 30, 2020 31 377 See Notes to Financial Statements Governmental Activities Water Fund Sewer Service Fund Refuse Fund Hazmat Service Fund Total Internal Service Funds OPERATING REVENUES Sales 37,205$ -$ -$ -$ 37,205$ -$ Fees and Charges for Service - 10,867 12,488 279 23,634 16,815 Other 3,313 33 85 - 3,431 75 Total Operating Revenues 40,518 10,900 12,573 279 64,270 16,890 OPERATING EXPENSES Water Purchases 16,389 - - - 16,389 - Supplies and Operations 10,676 7,742 12,588 235 31,241 4,856 Engineering 2,205 - - - 2,205 - Production and Distribution 7,706 - - - 7,706 - Maintenance 217 - - - 217 - Water Meters 2,228 - - - 2,228 - Water Quality 890 - - - 890 - Water Use Efficiency 242 - - - 242 - Claims and Judgments - - - - - 11,044 Depreciation 3,910 2,086 21 - 6,017 518 Total Operating Expenses 44,463 9,828 12,609 235 67,135 16,418 Operating Income (Loss)(3,945) 1,072 (36) 44 (2,865) 472 NON-OPERATING REVENUES (EXPENSES) Interest Income 1,787 937 7 15 2,746 1,044 Income (Loss) Before Transfers (2,158) 2,009 (29) 59 (119) 1,516 TRANSFERS Transfers In - - 51 - 51 - Transfers Out - - - (13) (13) - Total Transfers - - 51 (13) 38 - Change in Net Position (2,158) 2,009 22 46 (81) 1,516 Net Position - Beginning Of Year 127,391 76,266 (105) 44 203,596 3,211 Net Position - End Of Year 125,233$ 78,275$ (83)$ 90$ 203,515$ 4,727$ Business-Type Activities - Enterprise Funds (In Thousands) FOR THE YEAR ENDED JUNE 30, 2020 PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION CITY OF HUNTINGTON BEACH 32 378 See Notes to Financial Statements Governmental Activities Water Fund Sewer Service Fund Refuse Fund Hazmat Service Fund Total Internal Service Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers and Users 42,776$ 10,954$ 12,582$ 279$ 66,591$ 16,922$ Cash Paid to Employees for Services (9,591) (3,646) (303) (207) (13,747) (681) Cash Paid to Suppliers of Goods and Services (28,041) (3,997) (12,167) (10) (44,215) (12,183) Net Cash and Investment Provided by Operating Activities 5,144 3,311 112 62 8,629 4,058 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers In - - 51 - 51 - Transfers Out - - - (13) (13) - Net Cash and Investments Provided (Used) by Noncapital Financing Activities - - 51 (13) 38 - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of Capital Assets (1,060) (2,046) - - (3,106) (2,402) Net Cash and Investments Used by Capital and Related Financing Activities (1,060) (2,046) - - (3,106) (2,402) CASH FLOWS FROM INVESTING ACTIVITIES Interest Received 1,787 937 7 15 2,746 1,044 Net Cash and Investments Provided by Investing Activities 1,787 937 7 15 2,746 1,044 Net Increase (Decrease) in Cash and Investments 5,871 2,202 170 64 8,307 2,700 Cash and Investments - Beginning of Year 48,894 32,213 313 413 81,833 36,226 Cash and Investments - End of Year 54,765$ 34,415$ 483$ 477$ 90,140$ 38,926$ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH AND INVESTMENTS PROVIDED (USED) BY OPERATING ACTIVITIES Operating Income (Loss) (3,945)$ 1,072$ (36)$ 44$ (2,865)$ 472$ Adjustments to Reconcile Operating Income (Loss) to Net Cash and Investments Provided (Used) by Operating Activities Depreciation 3,910 2,086 21 - 6,017 518 (Increase) Decrease in Other Receivables, Net 2,245 39 55 - 2,339 32 (Increase) in Unbilled Receivables (109) 15 (46) - (140) - Decrease in Prepaids - - - - - 818 (Increase) in Joint Ventures 543 - - - 543 - Decrease in Inventory (15) - - - (15) - Increase (Decrease) in Accounts Payable 1,326 (333) 85 - 1,078 41 Increase (Decrease) in Accrued Payroll 93 51 3 3 150 3 Increase in Deposits Payable 122 - - - 122 - (Decrease) in Claims Payable - - - - - 2,129 Increase (Decrease) in Compensated Absences 133 66 1 (1) 199 (11) Decrease in Deferred Pension Outflow 330 123 11 8 472 24 (Decrease) in Deferred Pension Inflow (104) (39) (3) (3) (149) (8) Increase in Net Pension Liability 652 243 22 11 928 44 (Increase) in Deferred Other Postemployment Benefits Outflow (35) (12) (1) - (48) (3) Increase in Deferred Other Postemployment Benefits Inflow 224 77 8 3 312 14 (Decrease) in Net Other Postemployment Benefits Liability (226) (77) (8) (3) (314) (15) Net Cash and Investments Provided by Operating Activities 5,144$ 3,311$ 112$ 62$ 8,629$ 4,058$ NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES There were no noncash investing, capital, or financing activities during the year ended June 30, 2020. Business-Type Activities - Enterprise Funds CITY OF HUNTINGTON BEACH STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) 33 379 See Notes to Financial Statements ASSETS Total Agency Funds Pension Trust Fund - Retirement Supplemental Fund Huntington Beach Redevelopment Successor Agency Private Purpose Trust Cash and Investments 9,808$ 505$ 7,625$ Cash and Investments with Fiscal Agent 3,449 - 2,569 Mutual Funds - 57,300 - Money Market Funds - 1,716 - Accounts Receivable, Net 557 1 32 Total Assets 13,814$ 59,522$ 10,226$ LIABILITIES Accounts Payable 1,096$ -$ 476$ Accrued Payroll 9 - 5 Due to Bondholders 6,116 - - Advances from City of Huntington Beach - - 1,363 Held for Others 6,593 - - Long-Term Obligations Long-Term Obligations Due Within One Year - - 3,959 Long-Term Obligations Due in More than One Year - - 29,857 Total Liabilities 13,814$ -$ 35,660$ NET POSITION Restricted for Pension Benefits 59,522$ Held in Trust For Other Purposes (25,434)$ ADDITIONS Pension Trust Fund - Retirement Supplemental Fund Huntington Beach Redevelopment Successor Agency Private Purpose Trust Employer Contributions 3,995$ -$ Property Taxes - 5,233 Total Additions Before Investment Income 3,995 5,233 Investment Income: Investment Income 2,229 242 Less Investment Expense (116) - Net Investment Income 2,113 242 Total Additions 6,108 5,475 DEDUCTIONS Benefits 5,012 - Administrative Costs 444 - Economic Development - 153 Interest and Fiscal Agency Expenses - 2,019 Total Deductions 5,456 2,172 Change in Net Position 652 3,303 Net Position - Beginning of Year 58,870 (28,737) Net Position - End of Year 59,522$ (25,434)$ STATEMENT OF CHANGES IN FIDUCIARY FUND NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) CITY OF HUNTINGTON BEACH STATEMENT OF FIDUCIARY FUND NET POSITION FIDUCIARY FUNDS JUNE 30, 2020 (In Thousands) CITY OF HUNTINGTON BEACH 34 380 THIS PAGE INTENTIONALLY LEFT BLANK 35 381 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 Footnote Number Description Page 1.Summary of Significant Accounting Policies ............................ 37-53 2.Cash and Investments .................................................................. 54-62 3.Other Receivables ......................................................................... 62-63 4.Unearned Revenue ....................................................................... 64 5.Unavailable Revenue ................................................................... 64 6.Retirement Plan – Normal ........................................................... 65-75 7.Retirement Plan – Supplemental ............................................... 75-82 8.Other Post Employment Benefits .............................................. 83-89 9.Risk Management ................................................................ 90-91 10.Interfund Transactions .......................................................................... 92-93 11.Long-Term Obligations ................................................................. 94-104 12.Capital Assets ................................................................................ 104-106 13.Investment in Joint Ventures ....................................................... 106 14.Related Party Transaction ........................................................... 106 15.Successor Agency Trust for Assets of the Former Redevelopment Agency of the City of Huntington Beach ..... 107-114 16.Commitments and Contingencies .............................................. 114-118 17.Other Information ......................................................................... 118 18.Subsequent Events ...................................................................... 118-120 36 382 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Reporting Entity The City of Huntington Beach is the primary government. It was incorporated in 1909 as a charter, full-service city. The form of government is Council-Manager. Component units are legally separate organizations for which the City Council is financially accountable, or organizations that if excluded from the accompanying financial statements, would make them misleading. The component units described below are blended (presented as if they are part of the primary government) or presented as a fiduciary trust fund with the primary government for financial reporting purposes. The criteria used in determining the scope of the reporting entity are based on the provisions of GASB Statement 14, The Financial Reporting Entity, as amended by GASB Statement 39, Determining Whether Certain Organizations Are Component Units, and GASB Statement 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34. A legally separate, tax exempt organization should be reported as a blended component unit of the City if all of the following criteria are met: 1. The governing board is substantively the same as the primary government and there is a financial benefit or burden relationship between the primary government and the component unit; 2. The component unit provides services entirely, or almost entirely, to the primary government or otherwise exclusively, or almost exclusively, benefits the primary government even though it does not provide services directly to it; and 3. The component unit’s total debt outstanding, including leases, is expected to be repaid entirely or almost entirely with the resources of the primary government. Based on the application of the criteria listed above, the following component units have been included. Huntington Beach Housing Authority The Housing Authority (the Authority) was established in March 2011 pursuant to Housing Authority Laws of California to provide rental assistance programs to low- income families and senior citizens, and to operate a Housing Rehabilitation Loan Program and other approved programs. The Authority is governed by a commission of seven members comprised of the City Council, which appoints management and has full accountability for the Authority's fiscal affairs. The Authority's financial data and transactions are included within the capital projects Low and Moderate Income Housing Asset Fund (LMIHAF). On January 9, 2012, the City adopted a resolution designating the Housing Authority of the City of Huntington Beach to serve as the Housing Successor Agency. The Housing Successor Agency's financial data and transactions are included within the LMIHAF Capital Projects Fund. There is no separate Component Unit Financial Report (CUFR) prepared for the Authority. 37 383 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Huntington Beach Public Financing Authority (Public Financing Authority) – This Corporation was formed in March 1988 to issue debt to finance public improvements and other capital purchases for the City and the former Redevelopment Agency. The Public Financing Authority’s governing body is the City Council, which also adopts its annual budget. The Public Financing Authority is financially dependent on the City. There are no separately issued financial statements available for the Public Financing Authority. The City of Huntington Beach Supplemental Retirement Plan and Trust (Supplemental Retirement Plan and Trust) – The Trust was formed to provide a supplemental retirement plan for all employees hired prior to 1997 (exact dates differed for various associations). The governing board of the Supplemental Retirement Plan consists of the City Treasurer, Chief Financial Officer, and the City Manager (or designee). The Retirement Board is responsible for supervising all investments, resolving benefit disputes, and ensuring that contributions are made in order to pay the required benefits. There are no separate financial statements for this plan and trust. b. Government-wide Financial Statements The government-wide financial statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. These statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred inflows/outflows of resources, and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. 38 384 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Indirect expenses are allocated to the various functions based on a proportionate use of services. The types of transactions reported as program revenues for the City are reported in three categories: 1) charges for current services; 2) operating grants and contributions; and, 3) capital grants and contributions. Taxes and other items not properly included among program revenues are reported as general revenues. As a general rule, the effects of interfund activity have been eliminated from the government-wide financial statements. When both restricted and unrestricted resources are available for use, it is the government’s policy to use restricted resources first, then unrestricted resources as they are needed. Financial Statement Classification In the government-wide financial statements, net position is classified in the following categories: Net Investment in Capital Assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of these assets reduce this category. Restricted Net Position – This category presents restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. The government-wide Statement of Net Position reports $79,926,000 of governmental activities restricted net position, of which $42,686,000 is restricted by enabling legislation. The government-wide Statement of Net Position reports $22,248,000 of business-type activities restricted net position, of which all is restricted by enabling legislation. This category presents restrictions placed on the categories of Capital Projects, Debt Service, and Specific Projects and Programs. 39 385 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Unrestricted Net Position – This category represents the net position of the City, not restricted for any project or other purpose. The government-wide Statement of Net Position reports a deficit unrestricted net position of $274,523,000 of governmental activities unrestricted net position, which is largely a result of the recent implementation of GASB Statement Nos. 68 and 75 that requires the City to report Net Pension Liabilities and Net Other Post-Employment Benefits (OPEB) Liability. The City’s Net Pension Liability at June 30, 2020 is $434,815,000 and Net OPEB Liability is $3,652,000, respectively, of which $407,316,000 and $3,263,000, respectively, is payable from Governmental Activities. The government-wide Statement of Net Position reports $38,482,000 of business-type activities unrestricted net position. c. Fund Financial Statements Separate fund financial statements are prepared for governmental funds, proprietary funds, and fiduciary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Measurement Focus, Basis of Accounting, and Financial Statement Presentation All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Only current assets, current liabilities, and deferred inflows are included on the Balance Sheets. The Statement of Revenues, Expenditures, and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, use of money and property, intergovernmental revenues, charges for current services, and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. However, debt service expenditures as well as expenditures related to compensated absences and claims are recorded only when payment is due. 40 386 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Governmental Funds Financial Statements Governmental Funds Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. Accompanying schedules are presented to reconcile and explain the differences in fund balances and changes in fund balances as presented in these statements to the net position and changes in net position presented in the government-wide financial statements. The City presents all major funds that meet those qualifications. The City’s Governmental Fund Balances are comprised of the following components:  Nonspendable fund balance includes amounts that are not in spendable form and typically includes inventories, prepaid items, and other items that by definition cannot be appropriated.  The restricted fund balance category includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation.  The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the City Council. The City Council has authority to establish, modify, or rescind a fund balance commitment by formal action as specified by the City’s Fund Balance Policy. Commitments to fund balance are made through adoption of a resolution by City Council.  Amounts in the assigned fund balance classification are intended to be used by the City for specific purposes but do not meet the criteria to be classified as restricted or committed. The City Manager or designee has the authority to establish, modify, or rescind a fund balance assignment as specified by the City’s Fund Balance Policy.  Unassigned fund balance is the residual classification for the City’s General Fund and includes all spendable amounts not contained in the other classifications. Unassigned fund balance in other governmental funds is limited to any negative residual fund balance after fund balance has been classified as restricted, committed, or assigned. 41 387 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) In the government-wide statements, the City considers restricted funds to be spent first then unrestricted amounts when expenditures are incurred for purposes for which both restricted and unrestricted fund balance is available. In the governmental fund statements, when expenditures are incurred, the City uses the most restrictive funds first. The City would use the appropriate funds in the following order: committed, assigned, and lastly unassigned amounts. The City establishes encumbrances to record the amount of purchase orders, contracts, and other obligations, which have not yet been fulfilled, cancelled, or discharged. Encumbrances outstanding at year-end are recorded as part of restricted or assigned fund balance. Encumbrances outstanding as of June 30, 2020, by major fund (in thousands): General Fund 4,520$ Grants Special Revenue 796 LMIHAF Capital Projects 3,031 Other Governmental Funds 18,676 Total Encumbrance All Funds 27,023$ Economic Uncertainties Reserve The City Council established an Economic Uncertainties Reserve in the General Fund through a resolution with a goal to commit the value of two months of the General Fund expenditure adopted budget amount. Appropriations from the Economic Uncertainties Reserve commitments can only be made by formal City Council action. Generally, appropriations and access to these funds will be reserved for emergency situations. Examples of such emergencies include, but are not limited to:  An unplanned, major event such as catastrophic disaster requiring expenditures over 5% of the General Fund adopted budget;  Budgeted revenue in excess of $1 million taken by another government entity;  Drop in projected/actual revenue of more than 5% of the General Fund adopted revenue budget; and,  Should the Economic Uncertainties Reserve be used, and its level falls below the minimum amount of two months of General Fund expenditures adopted budget, the goal is to replenish the fund within three fiscal years. 42 388 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Proprietary Fund Financial Statements The City’s enterprise and internal service funds are proprietary funds. Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Fund Net Position, and a Statement of Cash Flows for each major proprietary fund. Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets, deferred inflows/outflows, and liabilities (whether current or non-current) are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Fund Net Position present increases (revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non- operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non- operating expenses. 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 services 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. 43 389 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Fiduciary Funds Financial Statements Fiduciary Funds Financial Statements include a Statement of Net Position and a Statement of Changes in Net Position for Trust Funds. The City's fiduciary funds include Agency and Trust Funds. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The agency funds are accounted for on the accrual basis of accounting. Trust Funds present results of operations and include net position. The Retirement Supplemental Trust Fund accounts for the activities of the Supplemental Retirement Plan for all employees hired prior to 1997, which accumulates resources for pension benefits to qualified employees. Contributions are made to the Supplemental Plan based on the City’s policy to fund the required contributions as determined by the Plan’s actuary and are recognized when they are made. The Retiree Medical Insurance Trust Fund accounts for the activities of the City’s Other Post- Employment Benefits plans, which provide postemployment medical insurance to retirees. The Huntington Beach Redevelopment Successor Agency Private Purpose Trust Fund accounts for the Successor Agency for the former Redevelopment Agency pursuant to Assembly Bill X1 26. Fiduciary funds are not presented in the government-wide financial statements because these funds do not represent net position available to the City. The City reports the following major funds: Governmental Funds General Fund – accounts for activity not required to be accounted for in another fund. Grants Special Revenue – accounts for grant revenues received from federal, state, and local agencies restricted for related project expenditures. LMIHAF Capital Projects – accounts for the activity related to the development of affordable housing. Proprietary Funds Water Fund – used to account for water sales to customers. Sewer Service Fund – accounts for user fees charged to residents and businesses for sewer service. Refuse Fund – used to account for activities related to refuse collection and disposal. Hazmat Service Fund – accounts for user fees charged for the City’s hazardous waste material program. 44 390 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The City’s fund structure also includes the following fund types: Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects. Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest. Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Internal Service Funds Self Insurance Workers’ Comp Fund – accounts for the City’s self insurance workers’ compensation program in an internal service fund. Self Insurance General Liability Fund – accounts for the City’s self insurance general liability program in an internal service fund. Equipment Replacement Fund – accounts for the City’s equipment replacement needs in an internal service fund. Fiduciary Funds Agency Funds – accounts for assets temporarily held by the City as trustee, agent, or custodian. Agency funds are custodial in nature and do not involve measurement of results of operations. Pension Trust Fund – Retirement Supplemental Fund - accounts for the City’s supplemental retirement plan. Huntington Beach Redevelopment Successor Agency Private Purpose Trust Fund – accounts for the Successor Agency of the former Redevelopment Agency in accordance with the State’s Dissolution Act. 45 391 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) d. Cash and Investments The City pools cash resources of its various funds to facilitate cash management. Cash in excess of daily needs is invested and reported as investments. It is the City’s intent to hold investments until maturity. However, the City may, in response to market conditions, sell investments prior to maturity in order to improve the quality, liquidity, or yield of the portfolio. Interest earnings are apportioned among funds based on month-end cash and investment balances. The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and highly liquid investments, such as money market funds, and any investment with a maturity of 90 days or less at the time of purchase. For financial reporting purposes, investments are adjusted to their fair value whenever the difference between fair value and the carrying amount is material. Changes in fair value that occur during the fiscal year are recognized as investments income reported for that fiscal year. Investment income includes interest earnings, changes in fair value and any gains or losses realized upon the liquidation or sale of investments. The City participates in the Local Agency Investment Fund (LAIF), an investment pool managed by the State Treasurer of the State of California. LAIF has invested a portion of the pool funds in structured notes and asset-backed securities. LAIF’s investments are subject to credit risk. In addition, these structured notes and asset- backed securities are subject to interest rate risk as a result of changes in interest rates. In June 2020, the City Council adopted a resolution authorizing the deposit and investment of excess funds in the Orange County Investment Pool (OCIP). The investments in OCIP are managed by the County Treasurer. The City’s investment policy is further discussed in Note 2 on page 54. The City pools all non-restricted cash for investment purchases and allocates interest income to the funds based on month-end cash balances. Funds that have restricted cash record interest income in the respective fund. 46 392 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) e. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements and in the proprietary funds financial statements. Capital assets have an acquisition cost of $50,000 or greater ($100,000 for infrastructure) and a useful life of one year or more. The City records all purchased capital assets at historical cost (where historical records are available) and at estimated historical cost where no historical records exist. Capital assets acquired from gifts or contributions are recorded at acquisition value at the time received, or in the case of infrastructure assets, at City Council acceptance date. Capital assets acquired through annexation are recorded at net book value. In the government-wide and proprietary funds financial statements, depreciation is recorded on the straight-line method over the estimated useful life of the assets as shown below and charged to the respective activity or fund. No depreciation is recorded in the governmental funds of the fund financial statements. Buildings 20 to 50 years Machinery and Equipment 5 to 30 years Infrastructure 50 Years f. Unearned Revenue In the government-wide and the fund-level financial statements, unearned revenues are those where the asset recognition (availability criteria) has been met, but the revenue recognition criteria have not been met. 47 393 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) g. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City reports deferred outflows related to pensions and OPEB which are the result of the implementation of GASB Statement Nos. 68 and 75. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future periods and so will not be recognized as an inflow of resources (revenue) until that time. The City reported the following in this category: 1. Unavailable revenues (which include revenues, notes, and long-term receivables) measured under the modified accrual basis of accounting reported in governmental funds. These amounts are deferred and will be recognized as an inflow of resources in the period that the amounts become available. 2. Changes in the net pension liability not included in pension expense. 3. Changes in the net other postemployment benefits liability not included in OPEB expense. h. Inventories Proprietary fund inventories are valued at weighted-average cost and consist of expendable supplies and repair parts. The cost of such inventories is recorded as expenditures/expenses when consumed rather than when purchased. 48 394 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) i. Interfund Transactions As a general rule, interfund transactions have been eliminated from the government-wide financial statements. Exceptions to this rule are payments in-lieu or charges for current service between the City’s enterprise activities and the City’s governmental activities. Elimination of these transactions would distort the direct costs and program revenues for the various functions. Certain eliminations have been made regarding interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. Numerous transactions occur between funds of the City resulting in transfers and amounts due to or from other funds. Amounts due to or from are the current (due within one year) portion of monies that are to be paid or to be received from other funds. j. Long-Term Obligations In the government-wide and proprietary funds financial statements, long-term obligations are recorded as liabilities in the applicable governmental activities, business-type activities, or proprietary fund-type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the debt. In the governmental fund financial statements, bond discounts and premiums are recognized as another financing source or use. Issuance costs are recorded as a current year debt service expenditure. k. Employee Compensated Absences The City records the cost of all accumulated and unused leave time (vacation, sick, and comp) as a liability when earned in the government-wide and proprietary funds financial statements. In the governmental funds financial statements these amounts are recorded as expenditures when due and payable. 49 395 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) l. Property Tax Revenue Property tax in California is levied according to Article 13-A of the California Constitution. The basic levy is a countywide-levy of one percent of total assessed valuation and is allocated to county governments, school districts, cities and special districts. Additional levies require two-thirds approval by voters and are allocated directly to the specific government. In the government-wide financial statements, property tax is recorded when earned, regardless of when levied, due, or received. City property tax revenues are recognized when levied in the governmental funds to the extent that they result in current receivables collectible within 60 days after year-end. The County acts as a collection agent for property tax for all of the local governmental units. Property taxes are normally collected twice per year. The property tax calendar is as follows:  Lien Date, January 1 - Prior Fiscal Year  Levy Date, July 1 - Levy Fiscal Year  Due Date, First Installment - November 1  Due Date, Second Installment - February 1  Delinquent Date, First Installment - December 10  Delinquent Date, Second Installment - April 10 50 396 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) m. Redevelopment Property Tax Trust Funds Under ABX1 26, revenues that were previously distributed to redevelopment agencies (prior to their dissolution) in the form of property tax increment will no longer be received. Instead, revenues are deposited by County Auditors into Redevelopment Property Tax Trust Funds (RPTTF) created in the County Treasury for each Successor Agency. The County Auditor administers the RPTTF and disburses twice annually from this fund pass-through payments to affected taxing entities, an amount equal to the total of obligation payments that are required to be paid from tax increment as denoted on the Recognized Obligation Payment Schedules (ROPS) to Recognized Obligation Retirement Funds (RORF) established in the treasury of the Successor Agencies, and various allowed administrative fees and allowances. Any remaining balance is then distributed by the County Auditor back to affected taxing entities under a prescribed method that accounts for pass-through payments. The calendar for distribution of RPTTF funds is as follows:  Annual ROPS submission due to Department of Finance, February 1  Distribution of RPTTF to Successor Agencies for the July-December ROPS period, June 1  Distribution of RPTTF to Successor Agencies for the January-June ROPS period, January 2 n. Cash Flow Statements For purposes of the Statement of Cash Flows, the Proprietary Funds consider all cash and investments to be cash equivalents, as these funds participate in the citywide cash and investment pool. o. Estimates The accompanying financial statements require management to make estimates and assumptions that effect certain reported amounts and disclosures. Actual results could differ from those estimates. 51 397 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) p. Pensions and OPEB For purposes of measuring the net pension liability, net OPEB liability, related deferred outflows of resources and deferred inflows of resources, pension/OPEB expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the CalPERS’ Financial Office and the City’s Defined Benefit Pension Plan. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. GASB Statement Nos. 68 and 75 require reported results to pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used. Supplemental Employee Retirement Plan CalPERS Pension Plans Other Post-Employment Benefit Plan Valuation Date (VD) June 30, 2019 June 30, 2018 June 30, 2019 Measurement Date (MD) June 30, 2020 June 30, 2019 June 30, 2019 Measurement Period (MP) July 1, 2019 to June 30, 2020 July 1, 2018 to June 30, 2019 July 1, 2018 to June 30, 2019 52 398 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) q. Fair Value Measurements Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows: Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:  Quoted prices for similar assets or liabilities in active markets;  Quoted prices for identical or similar assets or liabilities in markets that are inactive;  Inputs other than quoted prices that are observable for the asset or liability;  Inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable input reflect the City’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data. 53 399 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 2. CASH AND INVESTMENTS Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code Section 53601 (or the City’s investment policy, where more restrictive) that address interest rate 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 California Government Code or the City’s investment policy. INVESTMENT TYPE MAXIMUM MATURITY MAXIMUM SPECIFIED % OF PORTFOLIO / MAXIMUM PER ISSUER MINIMUM RATING REQUIREMENTS Bankers' Acceptances 180 days 25% (up to 40% with Council approval) / 10%A1/P1, "A" Rating Negotiable Certificates of Deposit 3 years (Up to 5 years with Council approval 30% / 10%A1/P1, "A" Rating Commercial Paper 270 days 25% / 10%A1, "A" Rating State Obligations ‐ CA And Others 5 years None / 10%"A" Rating City/Local Agency of CA Obligations 5 years None / 10%"A" Rating U.S. Treasury Obligations 5 years None None U.S. Government Agency Obligations 5 years None None IBRD, IFC, IADB 5 years 10%"AA" Rating Repurchase Agreements 3 Months None None Reverse Repurchase Agreements 92 days 20% of the base value of the portfolio. Requires City Council Approval.None Medium‐Term Corporate Notes 5 years 30% / 10%"A" Rating Non‐negotiable Certificates of Deposit 3 years None / 10%A1/P1, "A" Rating Money Market Mutual Funds 60 days 15% / 10%"AAA" Rating Local Agency Investment Fund (LAIF) N/A Up to $75,000,000 None Orange County Investment Pool (OCIP) N/A N/A None Joint Powers Authority N/A None / $20,000,000 None 54 400 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 2. CASH AND INVESTMENTS (Continued) Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by a bond trustee, but bond indentures do allow for other forms of investments if approved in writing by the bond insurer that are not identified below. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk. Authorized Investment Type Maximum Maturity Maximum Percentage of Portfolio Maximum Investment in One Issuer U.S. Treasury Securities 5 Years No Limit No Limit Federal Agency Securities 5 Years No Limit No Limit Bankers' Acceptances 180 Days No Limit No Limit Time CDs 360 Days No Limit No Limit Negotiable CDs 360 Days No Limit No Limit LAIF N/A No Limit No Limit Commercial Paper 270 Days No Limit No Limit Municipal Bonds from Any State Life of Bond No Limit No Limit Money Market Funds N/A No Limit No Limit Investment Agreements Life of Bond No Limit No Limit Corporate Bonds 5 Years No Limit No Limit California Asset Mgmt. Program N/A No Limit No Limit Forward Purchase/Delivery Agreements Life of Bond No Limit No Limit 55 401 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 2. CASH AND INVESTMENTS (Continued) Investment of the Pension Trust Fund – Retirement Supplemental Fund The Investment Policy Statement (IPS) of the Huntington Beach Supplemental Pension Trust is established in accordance with the assignment of fiduciary duties by the State of California Constitution and State and Local Government Codes. The purpose of the Investment Policy is to set guidelines for a prudent investment-making process. The policy was established with the assumption that the longer-term nature of the portfolio provides for higher risk tolerance and short-term volatility, but more potential for capital growth. The Investment Manager will be responsible for carrying out the activities related to the portfolio in accordance with the IPS to meet the goals of an agreed upon risk/return profile, and in accordance with the mix of parameters outlined below: Authorized Investment Type Minimum Allocation Target Asset Allocation Maximum Allocation Cash or Equivalents 0% 0% 8% Money Market 0% 0% 8% Fixed Income 12% 20% 28% Short‐Term Bond 0%0%8% Long‐Term Bond 0% 0% 8% High Yield Bond 0% 0% 8% Inflation Protected Bond 0% 0% 8% World Bond 0% 0% 8% Domestic Equity 33% 41% 49% Large Cap Equity (Value, Blend, Growth) 20% 28% 36% Mid Cap Equity (Value, Blend, Growth) 0% 9% 17% Small Cap Equity (Value, Blend, Growth) 0% 4% 12% Foreign Equity 26% 34% 42% Foreign Large Equity (Value, Blend, Growth) 19% 27% 35% Foreign Sm / Mid Equity (Value, Growth) 0% 0% 8% Emerging Markets 0% 7% 15% Real Estate 0% 3% 11% Real Estate 0% 3% 11% Commodities 0% 2% 10% Natural Resources 0% 2% 10% 56 402 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 2. CASH AND INVESTMENTS (Continued) At year-end, the City had the following deposits and investments (amounts in thousands): Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value is to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. 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 (in thousands). Primary Government: Cash and Investments 302,018$ Cash and Investments with Fiscal Agent 5,815 Total Primary Government 307,833 Fiduciary Funds: Cash and Investments 17,938 Cash and Investments with Fiscal Agent 65,034 Total Fiduciary Funds 82,972 Total Deposits and Investments 390,805$ INVESTMENTS: Fair Value Less than 1 1 to 3 3 to 5 More than 5 Total US Treasuries 8,372$ -$ 3,106$ 5,266$ - 8,372$ US Agency Securities*83,489 5,094 32,521 45,874 - 83,489 Mutual Funds 57,300 57,300 - - - 57,300 Money Market Funds 2,807 2,807 - - - 2,807 Medium Term Notes - IADB 20,866 - 6,190 14,676 - 20,866 Corporate Bonds 55,669 12,883 37,478 5,308 - 55,669 Local Agency Investment Fund 82,794 82,794 - - - 82,794 Orange County Investment Pool 40,000 40,000 - - - 40,000 California Asset Mgmt Program 2,787 2,787 - - - 2,787 PARS Pension Rate Stabilization Program 7,503 7,503 - - - 7,503 Total Investments 361,587$ 211,168$ 79,295$ 71,124$ -$ 361,587 Total Deposits 29,218 Total Deposits and Investments 390,805$ * Security is callable, but classified above according to original maturity date Investment Maturities (In Years) 57 403 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 2. CASH AND INVESTMENTS (Continued) Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below are the minimum ratings required by, where applicable, the California Government Code or the City’s investment policy, or debt agreements, and the actual rating as of the year-end for each investment type (in thousands): Remaining as of Year End INVESTMENTS: Minimum Legal Rating Total AAA AA A Not Rated US Treasuries N/A 8,372$ 8,372$ -$ -$ -$ US Agency Securities*N/A 83,489 83,489 - - - Mutual Funds N/A 57,300 - - - 57,300 Money Market Funds AAA 2,807 2,807 - - - Medium Term Notes - IADB AA 20,866 20,866 - - - Corporate Bonds A 55,669 - 17,888 37,781 - Local Agency Investment Fund N/A 82,794 - - - 82,794 Orange County Investment Pool N/A 40,000 - - - 40,000 California Asset Mgmt Program N/A 2,787 2,787 - - - PARS Pension Rate Stabilization Program N/A 7,503 - - - 7,503 Total Investments 361,587$ 118,321$ 17,888$ 37,781$ 187,597$ Note: All US Agencies are rated AAA by Moody's and AA by S&P 58 404 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 2. CASH AND INVESTMENTS (Continued) Concentration of Credit Risk The City’s investment policy limits investments in any one issuer, except for U.S. Treasury Securities, U.S. Government Agencies and the Local Agency Investment Fund, to no more than 10% of the portfolio. In addition, no more than 50% can be invested in a single security type or with a single financial institution and every security type has a specific limit. This is in addition to the limits placed on investments by State law. Investments in any one issuer (other than U.S. Treasury Securities, external investment pools, or Money Market Funds) that represent 5% or more of the City’s total investments are as follows (in thousands): Fair Value Issuer Investment Type Amount Federal Home Loan Bank U.S. Agency Securities $15,844 Federal Home Loan Mortgage Corporation U.S. Agency Securities $46,705 Inter-American Development Bank Medium Term Notes $15,849 59 405 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 2. CASH AND INVESTMENTS (Continued) Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provisions for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits. As of June 30, 2020, the City’s deposits with financial institutions were covered by FDIC up to $250,000, and the remaining amounts were collateralized as described above. None of the City’s investments were subject to custodial credit risk. Per the Investment Policy’s statement, the City of Huntington Beach is the registered owner of all investments in the portfolio. Investment in State Investment Pool The City is a voluntary participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Currently, LAIF does not have an investment rating. 60 406 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 2. CASH AND INVESTMENTS (Continued) Investment in the Orange County Investment Pool The City is a participant in the County Treasurer’s Orange County Investment Pool (OCIP). The OCIP is an external investment pool, is not rated and is not registered with the Securities Exchange Commission (SEC). The County Treasury Oversight Committee conducts OCIP oversight. Cash on deposit in the OCIP at June 30, 2020, is stated at fair value. The OCIP values participant shares on an amortized cost basis during the year and adjusts to fair value at year-end. For further information regarding the OCIP, refer to the County of Orange Comprehensive Annual Financial Report. Investment in California Asset Management Program Pool The City is a voluntary participant in the California Asset Management Program (CAMP). CAMP is an investment pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the purpose of exercising the common power of its Participants to invest certain proceeds of debt issues and surplus funds. The Trust’s activities are directed by a Board of Trustees, all of whom are employees of the California public agencies which are participants in the Trust. The City reports investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share. The Pool is managed to maintain a dollar-weighted average portfolio maturity of 60 days or less and seeks to maintain a constant net asset value (NAV) per share of $1.00. The Pool invests in obligations of the United States Government and its agencies, high- quality, short-term debt obligations of U.S. companies and financial institutions. The Pool is a permitted investment for all local agencies under California Government Code Section 53601(p). CAMP is rated AAAm by Standard & Poor's. Investment in Public Agency Retirement Services Pension Rate Stabilization Program The City established a Section 115 pension trust account within the Public Agency Retirement Services Pension Rate Stabilization Program (PARS PRSP) to hold assets that are legally restricted for use in administering the City’s defined benefit pension plan. The pension trust fund’s specific cash and investments are managed by a third- party portfolio manager under guidelines approved by the City. 61 407 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 2. CASH AND INVESTMENTS (Continued) Fair Value Measurement The City categorizes its fair value investments within the fair value hierarchy established by generally accepted accounting principles. The City has the following recurring fair value measurements as of June 30, 2020 (in thousands): 3. OTHER RECEIVABLES A summary of Other Receivables as of June 30, 2020 is as follows (in thousands): INVESTMENTS: Level 1 Level 2 Level 3 Total U.S. Treasuries $ - $ 8,372 $ - $ 8,372 U.S. Agency Securities - 83,489 - 83,489 Medium Term Notes - IADB - 20,866 - 20,866 Corporate Bonds - 55,669 - 55,669 Total Investments $ - $ 168,396 $ - $ 168,396 Fair Value Hierarchy Description Amount Developer Loans Receivable 39,152$ Emerald Cove Loan Receivable 7,237 Housing Rehabilitation Loans Receivable 2,315 First Time Homebuyers Receivable 1,771 Emergency Medical Fee Receivable 1,319 Other Grants Receivable 1,827 Other Receivable 6,661 Total Other Receivables 60,282$ Allowance for Uncollectible Developer Loans (39,152) Net Other Receivables on Governmental Fund Financial Statements 21,130$ Other Receivables Reconciliation Net Receivable on Government-wide Financial Statements 33,712$ Taxes Receivable on Governmental Fund Financial Statements (12,448) Other Receivables on Internal Service Fund (134) Net Other Receivables on Governmental Fund Financial Statements 21,130$ 62 408 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 3. OTHER RECEIVABLES (Continued) a. Developer Loans Loans made to developers to construct or rehabilitate certain facilities under deferred loan agreements total $39,152,000 at year-end. These loans are allowed until a future event occurs. Loans to the Low and Moderate Income Housing Asset Fund total $20,949,000, loans made under the Home Program total $13,929,000 and loan made under the Affordable Housing In-Lieu Program total $4,274,000. Interest rates on these loans range from 0% to 6.5%. The allowance for uncollectible developer loans is $39,152,000 due to the terms of the agreement to forgive the balance of loans after a specified time period if all the conditions of loan forgiveness are met. b. Emerald Cove Loan On June 15, 2010, the former Redevelopment Agency loaned Emerald Cove, LP $8,000,000 to acquire and rehabilitate Emerald Cove Senior Apartments. The loan has an interest rate of 3% and is to be repaid annually from residual receipts over 60 years. The loan was transferred to the Low and Moderate Income Housing Asset Fund in fiscal year 2011-12. The loan balance as of June 30, 2020 is $7,237,000. c. Housing Rehabilitation Loans Loans made to qualified homeowners and landlords in the City of Huntington Beach to rehabilitate certain single-family homes or multifamily rental housing under deferred loan agreements total $2,315,000 at year-end. These loans are deferred until a future event occurs. The interest rates on these loans range from 0% to 6%. d. Deferred Loans – First Time Homebuyers and Down Payment Assistance Loans made for down payment assistance of qualified first time homebuyers under deferred loan agreements total $1,771,000 at year-end. These loans are deferred until a future event occurs. 63 409 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 4. UNEARNED REVENUE Governmental and enterprise funds defer revenue recognition in connection with resources that have been received as of year-end, but not yet earned (unearned revenue). The amounts are as follows (in thousands): 5. UNAVAILABLE REVENUE Certain revenues in governmental funds are considered unavailable revenue until received. All revenues including property and sales tax are recognized in the year earned or levied in the government-wide financial statements, but are recorded as unavailable revenue in the fund financial statements to the extent they are not collected within 60 days after year-end. The amounts are as follows (in thousands): Deferred Loans to developers and qualified individuals for housing rehabilitation and to first time homebuyers are discussed in Note 3. Related Party Transaction related to the housing loan granted to the City Manager is discussed in Note 14. General Fund Grants Special Revenue Total Unearned Revenue Community Services Unearned Revenue (Classes) 626$ -$ 626$ Grants - 6,469 6,469 Total 626$ 6,469$ 7,095$ General Fund Grants Special Revenue LMIHAF Total Unavailable Revenue Grants -$ 1,587$ -$ 1,587$ Deferred Loans: Emerald Cove - - 7,237 7,237 Housing Rehabilitation - 2,315 - 2,315 First Time Homebuyers - - 1,771 1,771 Related Party Transaction (City Manager's Housing Loan)1,491 - - 1,491 Other Unavailable Revenue 1,335 - - 1,335 Total 2,826$ 3,902$ 9,008$ 15,736$ 64 410 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL a. Summary Net Pension Liability Net Pension Liability is reported in the accompanying statement of net position as follows: Deferred Outflows of Resources Deferred Outflows of Resources are reported in the accompanying statement of net position as follows: Deferred Inflows of Resources Deferred Inflows of Resources are reported in the accompanying statement of net position as follows: Net Pension Liability CalPERS Miscellaneous Plan 159,076$ CalPERS Safety Plan 263,682 Supplemental Plan (Note 7) 12,057 Total 434,815$ Investment earnings Differences between less than Changes Expected and expected earnings in assumptions Actual Experience Total CalPERS Miscellaneous Plan 2,385$ 727$ 518$ 3,630$ CalPERS Safety Plan 2,647 1,680 3,404 7,731 Total 5,032$ 2,407$ 3,922$ 11,361$ Deferred employer Investment earnings Differences between pension contributions less than Changes Expected and made after expected earnings in assumptions Actual Experience measurement date Total CalPERS Miscellaneous Plan -$ -$ -$ 16,878$ 16,878$ CalPERS Safety Plan - 9,312 1,188 25,848 36,348 Supplemental Plan (Note 7) 1,358 - - - 1,358 Total 1,358$ 9,312$ 1,188$ 42,726$ 54,584$ 65 411 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) b. Plan Description Substantially all City employees working the equivalent of 1,000 hours per fiscal year are eligible to participate in the Safety Plan and Miscellaneous Plan Agent multiple-employer defined benefit plans administered by California Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit Provisions under the Plans are established by State statutes within the Public Employee’s Retirement Law. Following the passage of AB340, Public Employees’ Pension Reform Act (PEPRA) by the California Legislature, employees hired on or after January 1, 2013, who were not previously enrolled in the PERS system elsewhere, or who have had a break in service of at least six months are required to be enrolled in this retirement program which provides a benefit level that is lower than the benefits provided for CalPERS employees that do not meet the PEPRA qualifications previously described. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Copies of the CalPERS annual financial report may be obtained from the CalPERS Executive Office – 400 P Street, Sacramento, CA 95814. 66 412 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) Benefits Provided CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Benefit provisions and all other requirements are established by State statute and may be amended by city contracts with employee bargaining groups. Participant is eligible for non-industrial disability retirement if becomes disabled and has at least 5 years of credited service. There is no special age requirement. The standard non-industrial disability retirement benefit is a monthly allowance equal to 1.8 percent of final compensation, multiplied by service. Industrial disability benefits are not offered to miscellaneous employees. The City provides industrial disability retirement benefit to safety employees. The industrial disability retirement benefit is a monthly allowance equal to 50 percent of final compensation. An employee's beneficiary may receive the basic death benefit if the employee dies while actively employed. The employee must be actively employed with the City to be eligible for this benefit. An employee's survivor who is eligible for any other pre- retirement death benefit may choose to receive that death benefit instead of this basic death benefit. The basic death benefit is a lump sum in the amount of the employee's accumulated contributions, where interest is currently credited at 7.5 percent per year, plus a lump sum in the amount of one month's salary for each completed year of current service, up to a maximum of six months' salary. For purposes of this benefit, one month's salary is defined as the member's average monthly full-time rate of compensation during the 12 months preceding death. Upon the death of a retiree, a one-time lump sum payment of $500 will be made to the retiree's designated survivor(s), or to the retiree's estate. Benefit terms provide for annual cost-of-living adjustments to each employee’s retirement allowance. Beginning the second calendar year after the year of retirement, retirement and survivor allowances will be annually adjusted on a compound basis by 2 percent. 67 413 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) The Plans’ provisions and benefits in effect at June 30, 2020 are summarized as follows: Classic PEPRA Hire date Prior to January 1, 2013 January 1, 2013 and after Benefit formula 2.5% @ 55 2% @ 62 Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life Retirement age minimum 50 years minimum 52 years Monthly benefits, as a % of eligible compensation 2.0% - 2.5%, 50 years - 63+ years, respectively 1.0% - 2.5%, 52 years - 67+ years, respectively Required employee contribution rates 8.000%6.250% Required employer contribution rates July 1, 2019 - June 30, 2020 35.902%35.902% Classic PEPRA Hire date Prior to January 1, 2013 January 1, 2013 and after Benefit formula 3% @ 50 2.7% @ 57 Benefit vesting schedule 5 years of service 5 years of service Benefit payments monthly for life monthly for life Retirement age minimum 50 years minimum 52 years Monthly benefits, as a % of eligible compensation 3%, 50+ years 2.0% - 2.7%, 50 years - 57+ years, respectively Required employee contribution rates 9.000%11.750% Required employer contribution rates July 1, 2019 - June 30, 2020 57.341%57.341% Miscellaneous Agent Plans Safety Agent Plans 68 414 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) c. Contributions Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the measurement period ended June 30, 2019, miscellaneous participants under the Classic and PEPRA plans are required to contribute 8% and 6.25% of their annual covered salary, respectively. Safety participants under the Classic and PEPRA plans are required to contribute 9% and 11.75% of their annual covered salary, respectively. In addition, the City is required to make employer contributions at the actuarially determined rates of 35.902% and 57.341% for the miscellaneous and safety plans, respectively, for the period July 1, 2019 through June 30, 2020. At June 30, 2018, the valuation date, the following employees were covered by the benefit terms for each Plan: Miscellaneous Safety Active members 609 384 Transferred members 429 71 Terminated members 301 60 Retired members and beneficiaries 962 592 69 415 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) d. Net Pension Liability The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2019, using an annual actuarial valuation as of June 30, 2018 rolled forward to June 30, 2019 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is illustrated below: Actuarial Assumptions – The total pension liabilities in the June 30, 2018 actuarial valuation, rolled forward to June 30, 2019 using standard update procedures, were determined using the following actuarial assumptions: * The mortality table used was developed based on CalPER's specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Preretirement and Post-retirement mortality rates include 15 year of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website. Actuarial Methods and Assumptions Used to Determine Total Pension Liability Actuarial Cost Method Entry Age Normal in accordance with the requirement of GASB Statement No. 68 Actuarial Assumptions: Discount Rate Inflation Salary Increases Investment Rate of Return Mortality Rate Table* Post Retirement Benefit Increase 7.15% Net of Pension Plan Investment and Administrative Expenses; includes Inflation Derived using CalPERS’ Membership Data for all Funds. The lesser of contract COLA or 2.50% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.50% thereafter. 7.15% 2.50% Varies by Entry Age and Service 70 416 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) Long-term Expected Rate of Return – The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The expected real rates of return by asset class are as follows: Current Target Real Return Real Return Allocation Years 1-102 Years 11+3 Global Equity 50.00%4.80%5.98% Fixed Income 28.00%1.00%2.62% Inflation Assets 0.00%0.77%1.81% Private Equity 8.00%6.30%7.23% Real Estate 13.00%3.75%4.93% Liquidity 1.00%0.00%-0.92% 1 In the System's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. 2 An expected inflation of 2.00% used for this period 3 An expected inflation of 2.92% used for this period. Asset Class 1 71 417 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) Discount Rate – The discount rate used to measure the total pension liability at June 30, 2019 was 7.15 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long- term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Subsequent Events – There were no subsequent events that would materially affect the results presented in this disclosure. e. Changes in the Net Pension Liability The following table shows the changes in net pension liability recognized over the measurement period: Total Pension Liability Plan Fiduciary Net Position Net Pension Liability Balance at June 30, 2018 (Valuation Date) 571,812$ 415,455$ 156,357$ Changes in the year: Service cost 8,327 - 8,327 Interest on the total pension liabilities 40,150 - 40,150 Changes of Assumptions - - - Differences between expected and actual experience (183) - (183) Benefit payments, including refunds of members contributions (28,508) (28,508) - Plan to Plan Resource Movement - (13) 13 Contributions - employer - 14,816 (14,816) Contributions - employee - 3,779 (3,779) Net investment income - 27,288 (27,288) Administrative expenses - (296) 296 Other Miscellaneous Income/Expense - 1 (1) Net changes 19,786 17,067 2,719 Balance at June 30, 2019 (Measurement Date) 591,598$ 432,522$ 159,076$ Total Pension Liability Plan Fiduciary Net Position Net Pension Liability Balance at June 30, 2018 (Valuation Date) 755,812$ 497,767$ 258,045$ Changes in the year: Service cost 13,644 - 13,644 Interest on the total pension liabilities 53,048 - 53,048 Differences between expected and actual experience (1,220) - (1,220) Plan to Plan Resource Movement - 13 (13) Benefit payments, including refunds of members contributions (38,958) (38,958) - Contributions - employer - 23,064 (23,064) Contributions - employee - 4,336 (4,336) Net investment income - 32,776 (32,776) Administrative expenses - (355) 355 Other Miscellaneous Income/Expense - 1 (1) Net changes 26,514 20,877 5,637 Balance at June 30, 2019 (Measurement Date) 782,326$ 518,644$ 263,682$ Miscellaneous Plan Safety Plan 72 418 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) Sensitivity of the Net Pension Liability to Changes in the Discount Rate - The following presents the City’s net pension liability, calculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate: Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions Pension expenses for the measurement period ending June 30, 2019 (the measurement date), are included in the accompanying financial statements as follows: The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized over 5-years straight line. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive and retired) as of the beginning of the measurement period. Net Pension Expense CalPERS Miscellaneous Plan 22,530$ CalPERS Safety Plan 41,805 Total 64,335$ Discount Rate - 1% Current Discount Discount Rate + 1% (6.15%)Rate (7.15%)(8.15%) Miscellaneous Plan 235,849$ 159,076$ 95,680$ Safety Plan 366,739$ 263,682$ 178,834$ Aggregate Total 602,588$ 422,758$ 274,514$ Plan's Aggregate Net Pension Liability/(Asset) 73 419 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) The Expected Average Remaining Service Lifetime (“EARSL”) is calculated by dividing the total future service years of active employees by the total number of plan participants (active, inactive, and retired) in the risk pool. For the 2018-19 measurement period, the EARSL for each plan is as follows: At June 30, 2020 the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Miscellaneous Safety Expected Average Remaining Service Lifetime 2.5 3.9 Deferred outflows Deferred inflows of Resources of Resources Difference between projected and actual earning on pension plan investments -$ (2,385)$ Changes in assumptions - (727) Difference between expected and actual experience - (518) Contributions made subsequent to the measurement date 16,878 - Total 16,878$ (3,630)$ Deferred outflows Deferred inflows of Resources of Resources Difference between projected and actual earning on pension plan investments -$ (2,647)$ Changes in assumptions 9,312 (1,680) Difference between expected and actual experience 1,188 (3,404) Contributions made subsequent to the measurement date 25,848 - Total 36,348$ (7,731)$ Miscellaneous Plan Safety Plan 74 420 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 6. RETIREMENT PLAN – NORMAL (Continued) For the Miscellaneous Plan and Safety Plan, $16,878,000 and $25,848,000, respectively, was reported as deferred outflows of resources related to pensions resulting from City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: 7. RETIREMENT PLAN – SUPPLEMENTAL a. Plan Description and Benefits The City administers a supplemental single-employer defined benefit retirement plan (Supplemental Plan) for all employees hired prior to 1997 (exact dates are different for various associations). The Plan is governed by a three-member Supplemental Employee Retirement Plan and Trust Board consisting of the City Treasurer, Chief Financial Officer, and the City Manager, or his/her designee. The Board has the authority, under the terms of the Trust agreement, to control and manage the operation and administration of the Plan. Benefit provisions are established and may be amended through negotiations between the City and employee bargaining associations during each bargaining period, which are then approved through resolutions of the City Council. In fiscal year 2008-09, the City established the Supplemental Employee Retirement Plan and Trust, and transferred $24,918,000 to an irrevocable trust from the prefunded amounts. The plan and trust are reported as a pension trust fund in the City’s financial statements on a full accrual basis. Measurement Periods Ended June 30,Miscellaneous Safety 2020 343$ 8,145$ 2021 (3,685) (4,821) 2022 (678) (1,028) 2023 390 473 2024 - - Thereafter - - (3,630)$ 2,769$ Deferred Outflows/ (Inflows) of Resources 75 421 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 7. RETIREMENT PLAN – SUPPLEMENTAL (Continued) The Supplemental Plan will pay the retiree an additional amount to his or her CalPERS retirement benefit for life. In order to be eligible for the benefit, the retiree must retire from the City. The amount that is computed as a factor of an employee’s normal retirement allowance is computed at retirement and remains constant for his or her life. This benefit is payable by the City for the duration of the life of the member, and shall cease upon the employee’s death. As of June 30, 2019, the date of the Plan’s most recent actuarial valuation, the average monthly benefit received by inactive plan members and beneficiaries receiving benefits is $559. Effective in 1998 (exact dates are different for various associations), new City employees are ineligible to participate in the Supplemental Employee Retirement Plan. Employees Covered: At June 30, 2020, the measurement date, the following employees were covered by the benefit terms for the Plan: b. Employer Contributions The City’s policy is to make required contributions as determined by the Supplemental Plan’s actuary. The required contributions were determined as part of the September 30, 2017 actuarial valuation. The City is required to contribute the actuarially determined rate of 2.5% of total payroll for all permanent employees for the year ended June 30, 2020. There are no employee contributions required for the plan. Survivor and termination benefits are not included in the plan. Administrative costs of this plan are financed through investment earnings. For the year ended June 30, 2020, the contributions were (in thousands): Inactive employees receiving benefits 728 Active employees 116 Inactive employees not receiving benefits - Total 844 Contributions - employer 3,506$ 76 422 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 7. RETIREMENT PLAN – SUPPLEMENTAL (Continued) c. Investments Investments of the Supplemental Plan are held separately from those of other City funds by investment custodians. The Supplemental Employee Retirement Plan and Trust Board is responsible for supervising all investments. Changes to the Investment Policy require approval by the Board. The policy remained the same as last fiscal year. The most recent policy was reviewed in June 2020 with an effective date of July 1, 2020. Please refer to Note 2 for a detailed description of the Supplemental Plan’s Investment Policy. The major asset class allocation for the Supplemental Plan as of June 30, 2020 is listed below: Quoted market prices have been used to value investments as of June 30, 2020. These investments are held by the Trust or by an agent in the Trust’s name. A portion of these investments is subject to credit risk (including custodial credit risk and concentrations of credit risk), interest rate risk and/or foreign currency risk. The Governmental Accounting Standards Board (GASB) Statement No. 40 requires the disclosure of such risk. Please see below for a list of investments held in any one organization that represents five percent or more of the Plan’s investment portfolio at June 30, 2020: Asset Class Strategic Allocation Allocation as of June 30, 2019 Long Term Expected Rate of Return Fixed Income 20.00% 20.19% 1.55% Equities 41.00% 74.49% 5.35% Real Estate 3.00% 4.04% 0.00% Commodities 2.00% 0.00% 0.00% Cash and Equivalents 0.00% 1.28% 0.45% Total 66.00% 100.00% Harbor Capital Appreciation Inst 12.48% Vanguard Intl Grwth Fd 12.46% Vanguard Equity Income Fund Admiral Shares 10.30% Ishare Core Msci Eafe ETF 10.17% Parnassus Core Equity Income Inst 10.42% Fidelity US Bond Index 7.18% Concentration of Investments Equaling or Exceeding 5% 77 423 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 7. RETIREMENT PLAN – SUPPLEMENTAL (Continued) All Supplemental Plan investments are reflected in the schedule included in Section c of the Note, with the exception of amounts held in the City’s investment pool account. The City maintains an investment pool account for City funds. Monthly contributions for the Plan are held in the City’s investment pool account and are used to pay recurring expenditures. Refer to Note 2 for a description of the City’s investments. For the year ended June 30, 2020, the annual money-weighted rate of return on the Plan’s investments, net of pension plan investment expenses, was 3.79%. The money-weighted rate of return expresses investment performance, net of investment expenses, adjusted for the changing amounts actually invested. d. Net Pension Liability The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2020, using an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the City’s net pension liability is shown on the following page. 78 424 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 7. RETIREMENT PLAN – SUPPLEMENTAL (Continued) Actuarial Assumptions – The total pension liabilities in the June 30, 2019 actuarial valuations for the June 30, 2020 measurement date were determined using the following actuarial assumptions: The changes in actuarial assumptions include the following: All other actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality, and retirement rates. The future service retirement liabilities load increased from 15% to 23% to reflect recent experience of benefits being larger than anticipated. e. Discount Rate & Sensitivity The discount rate is used in the measurement of the Total Pension Liability. This rate considers the ability of the fund to meet benefit obligations in the future. To make this determination, employee contributions, benefit payments, expenses, and investment returns are projected into the future. The Plan Net Position (assets) in future years can then be determined and compared to its obligation to make benefit payments in those years. As long as assets are projected to be on hand in a future year, the assumed valuation discount is used. For this valuation, the discount rate is 6.25%, based on the inflation assumption of 2.75% and a long-term asset allocation of 70% equities and 30% fixed income. The geometric real rates of return were assumed to be 5.35% for equities and 1.55% for fixed income. The long-term expected rate of return is applied to all future projected benefit payments. Actuarial Methods and Assumptions Used to Determine Total Pension Liability Actuarial Cost Method Entry Age Normal, Level Percentage of Payroll Actuarial Assumptions: Discount Rate 6.25% Inflation 2.75% Salary Increases CalPERS 1997-2015 Experience Study plus 3% aggregate increase Investment Rate of Return 6.25% Net of Investment Expenses Mortality Rate Table Retirement, Disability, Withdrawal CalPERS 1997-2015 Experience Study plus 23% load on future service retirement liability added to reflect recent benefits experience. CalPERS 1997-2015 Experience Study, mortality projected fully generational with Scale MP-2019 79 425 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 7. RETIREMENT PLAN – SUPPLEMENTAL (Continued) According to Paragraph 30 of Statement 68, the long-term discount rate should be determined without reduction for pension plan administrative expense. An investment return excluding administrative expenses would have been 6.25 percent. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, both short-term and long-term market return expectations were taken into account along with expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent. 80 426 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 7. RETIREMENT PLAN – SUPPLEMENTAL (Continued) Changes in the Net Pension Liability The following table shows the changes in net pension liability recognized over the measurement period (in thousands): Sensitivity of the Net Pension Liability to Changes in the Discount Rate - The following presents the City’s net pension liability, calculated using the discount rate, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate: Total Pension Liability Plan Fiduciary Net Position Net Pension Liability Balance at June 30, 2019 65,444$ 58,853$ 6,591$ Changes in the year: Service cost 338 - 338 Interest on the total pension liabilities 3,954 - 3,954 Benefit payments, including refunds of members contributions (5,012) (5,012) - Contributions - employer - 3,506 (3,506) Net investment income - 2,114 (2,114) Administrative expenses - (444) 444 Net changes 5,630 164 5,466 Balance at June 30, 2020 71,074$ 59,017$ 12,057$ Supplemental Plan Discount Rate - 1% (5.25%) Current Discount Rate (6.25%) Discount Rate + 1% (7.25%) 19,068$ 12,057$ 6,076$ Plan's Aggregate Net Pension Liability/(Asset) (in thousands) 81 427 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 7. RETIREMENT PLAN – SUPPLEMENTAL (Continued) f. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2020, the City recognized pension expense in the amount of $7,083,000 for the Supplemental Plan. At June 30, 2020, the City reported deferred outflows of resources related to the supplemental pension plan from the following source (in thousands): For the Supplemental Plan, $1,358,000 was reported as deferred outflows of resources related to pensions which will be recognized in pension expense as follows (in thousands): Deferred Outflows of Resources Difference between projected and actual earnings on 1,358$ pension plan investments Deferred Outflows / (Inflows) Year Ended June 30,of Resources 2021 (36)$ 2022 583 2023 500 2024 311 2025 - Thereafter - 1,358$ 82 428 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 8. OTHER POST EMPLOYMENT BENEFITS a. Plan Description The City administers the following two other post employment benefit (OPEB) plans: Postemployment Medical Insurance The City agreed, via contract, with each employee association to provide postemployment medical insurance to retirees. These Other Postemployment Benefits (OPEB) are based on years of service and are available to all retirees who meet all three of the following criteria:  At the time of retirement, the employee is employed by the City.  At the time of retirement, the employee has a minimum of ten years of service credit or is granted a service connected disability retirement.  Following official separation from the City, CalPERS grants a retirement allowance. The City’s obligation to provide the benefits to a retiree ceases when either of the following occurs:  During any period the retiree is eligible to receive health insurance at the expense of another employer; and/or  The retiree becomes eligible to enroll automatically or voluntarily in Medicare. The subsidy a retiree is entitled to receive is based on the retiree’s years of service credit and is limited to $344 per month after 25 years of service. If a retiree dies, the benefits that would be payable for his or her insurance are provided to the spouse or family for 12 months. The retiree may use the subsidy for any of the medical insurance plans that the City’s active employees may enroll in. Employees hired on or after October 1, 2014 are not eligible for this benefit. PEMHCA The City provides an agent multiple-employer defined benefit healthcare plan to retirees through CalPERS under the California Public Employees Medical and Hospital Care Act (PEMHCA), commonly referred to as PERS Health. PEMHCA provides health insurance through a variety of Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) options. The PEMHCA benefits are applied to all safety employee groups, based on retirement plan election. The benefits continue to the surviving spouse for one year. The Huntington Beach Firefighters’ Association (HBFA) joined PEMHCA in 2011. All other safety groups (Fire Management Association (FMA), Marine Safety Management Association (MSOA), Police Management Association (PMA), and Police Officers’ Association POA) joined in 2004. 83 429 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 8. OTHER POST EMPLOYMENT BENEFITS (Continued) Safety employees are eligible for PEMHCA benefits if they retire from the City on or after age 50 with at least five years of service or disability, and are eligible for a PERS pension. As of the June 30, 2019 measurement date, the following current and former employees were covered by the benefit terms under the plan: b. Accounting and Funding The City utilizes the California Employers’ Retiree Benefit Trust (CERBT), an agent multiple-employer plan, for the postemployment medical insurance benefit. Benefits paid from the CERBT were $814,000 for year ended June 30, 2020. The assets of the CERBT are excluded from the accompanying financial statements since they are in an irrevocable trust administered by CalPERS. Copies of CalPERS’ annual financial report may be obtained from their executive office: 400 P Street, Sacramento, CA, 95814 or on their website: www.calpers.ca.gov. The City’s policy is to make 100% of each year’s ARC, with an additional amount to prefund benefits as determined annually by City Council in order to improve the funded status of the plan. For PEMHCA, the City selected the “unequal” method for the contribution. Under this method, the City offered a lesser contribution for retirees than for active employees. The City paid the PEMHCA minimum for actives ($133 in 2018, and $136 in 2019, and $139 in 2020). Beginning in 2008, Assembly Bill 2544 changed the computation for annual increases to annuitant health care under the unequal method. Under the new provisions, the City increases annuitant health care contributions equal to an amount not less than five percent of the active employee contributions, multiplied by the number of years in PEMHCA. The City’s contribution for retirees is $62.55 per employee for the Huntington Beach Firefighter’s Association (HBFA) and $111.20 for all other Safety groups in 2020. The annual increase in minimum PEMHCA contribution to CalPERS will continue until the time that the City contribution for retirees equals the City contribution paid for active employees. Postemployment Medical Insurance PEMHCA Retirees and beneficiaries receiving benefits 264 189 Inactive employees not yet receiving benefits 303 - Active Plan Members 853 384 Total Plan Participants 1,420 573 84 430 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 8. OTHER POST EMPLOYMENT BENEFITS (Continued) The City’s net OPEB liability was measured as of June 30, 2019 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2019, based on the following actuarial methods and assumptions:  Actuarial Cost Method – Entry Age Normal  Discount rate – 6.25%  Projected salary increases for covered employees due to inflation – aggregate increases of 3.00% per annum  Investment Rate of Return – 6.25%, assuming actuarially determined contributions funded into CERBT Investment Strategy 2  Mortality Rate1 – Derived using CalPERS’ membership data for all funds  Pre-Retirement Turnover2 – Derived using CalPERS’ membership data for all funds  PEMCHA minimum increases for actives - $139 in 2020, with 4.25% annual increases thereafter  Healthcare Trend Rate – The medical trend rate represents the long-term expected growth of medical benefits paid by the plan, due to non-age-related factors such as general medical inflation, utilization, new technology, and the like. The following table sets for the inflation trend assumption used for the valuation: 1 Mortality information was derived from data collected during 1997 to 2015 CalPERS Experience Study dated December 2017, which may be accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications. Post- retirement mortality rates include mortality projected fully generational with Scale MP-19. 2. The pre-retirement turnover information was developed based on CalPERS’ specific data. For more details, please refer to the 2007 to 2011 Experience Study Report. The Experience Study Report may be accessed on the CalPERS website www.calpers.ca.gov under Forms and Publications. Calendar Calendar Year Non-Medicare Medicare Year Non-Medicare Medicare 2020 7.50% 6.50% 2029 5.40% 4.85% 2021 7.25% 6.30% 2030 5.20% 4.70% 2022 7.00% 6.10% 2031-35 5.05% 4.60% 2023 6.75% 5.90% 2036-45 4.90% 4.50% 2024 6.50% 5.70% 2046-55 4.75% 4.45% 2025 6.25% 5.50% 2056-65 4.60% 4.40% 2026 6.00% 5.30% 2066-75 4.30% 4.20% 2027 5.80% 5.15% 2076+ 4.00% 4.00% 2028 5.60% 5.00% Annual Rate Annual Rate 85 431 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 8. OTHER POST EMPLOYMENT BENEFITS (Continued) Long-Term Expected Rate of Return The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Discount Rate The discount rate used to measure the total OPEB liability was 6.25 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Asset Class Target Allocation Long-Term Expected Real Rate of Return Global Equity 40% 4.82% Fixed Income 43%1.47% Treasury Inflation-Protected Securities ("TIPS") 5%1.29% Commodities 4%0.84% Real Estate Investment Trusts ("REITS")8%3.76% Total 100% * Long-term expected rate of return is 6.25% CERBT Strategy 2 86 432 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 8. OTHER POST EMPLOYMENT BENEFITS (Continued) The changes in the net OPEB Liability for the plan are as follows (in thousands): Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2019 (in thousands): Total OPEB Liability Plan Fiduciary Net Position Net OPEB Liability / (Asset) (a)(b)(c) = (a) - (b) Balance at June 30, 2019 33,434$ 26,825$ 6,609$ (Measurement Date June 30, 2018) Changes recognized for the measurement period: Service Cost 1,241 - 1,241 Interest 1,859 - 1,859 Actual vs. Expected Experience 1,411 - 1,411 Assumption Changes (3,358) - (3,358) Contributions - Employer - 2,270 (2,270) Net Investment Income - 1,901 (1,901) Benefit Payments (1,742) (1,742) - Administrative Expenses - (61) 61 Net Changes (589) 2,368 (2,957) Balance at June 30, 2020 32,845$ 29,193$ 3,652$ (Measurement Date June 30, 2019) Increase / (Decrease) 1% Decrease Current Discount Rate 1% Increase (5.25%) (6.25%) (7.25%) Net OPEB Liability 7,662$ 3,652$ 364$ 87 433 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 8. OTHER POST EMPLOYMENT BENEFITS (Continued) Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for the measurement period ended June 30, 2019 (in thousands): OPEB Plan Fiduciary Net Position The CERBT issues a publicly available financial report that includes financial statements and required supplementary information. That report may be obtained from the California Public Employees’ Retirement System, CERBT, P.O. Box 942703, Sacramento, CA 94429-2703. Recognition of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amount are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The recognition period differs depending on the source of the gain or loss: 1% Decrease Current Trend 1% Increase (6.50% Non-Medicare / 5.50% Medicare, decreasing to 3.0% Non-Medicare / 3.0% Medicare) (7.50% Non-Medicare / 6.50% Medicare, decreasing to 4.0% Non-Medicare / 4.0% Medicare) (8.50% Non-Medicare / 7.50% Medicare, decreasing to 5.0% Non-Medicare / 5.0% Medicare) Net OPEB Liability 295$ 3,652$ 7,905$ 5 Years Net difference between projected and actual earnings on OPEB plan investments 88 434 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 8. OTHER POST EMPLOYMENT BENEFITS (Continued) OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB As of June 30, 2020, the City recognized OPEB expense of $1,469,000. As of June 30, 2020, the City reported deferred outflows of resources related to OPEB from the following sources: The $1,959,000 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2019 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2021. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows (in thousands): Deferred Outflows Deferred Inflows of Resources of Resources OPEB Contributions subsequent to the measurement date 1,959$ -$ Difference between expected and actual experience 1,218 Changes in Assumptions 2,898 Net difference between projected and actual earnings on OPEB Plan Investments - 30 3,177$ 2,928$ Measurement Periods Ended June 30, 2021 (217)$ 2022 (215) 2023 (312) 2024 (353) 2025 (267) Thereafter (346) (1,710)$ Deferred Outflows/ (Inflows) of Resources 89 435 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 9. RISK MANAGEMENT The City is exposed to various risks of losses related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City records the liability claims as expenditures in the Self Insurance General Liability Internal Service Fund and the workers’ compensation claims in the Self Insurance Workers’ Compensation Internal Service Fund. BICEP was created in 1988 by a joint powers agreement between the City of Huntington Beach and four other local entities including Oxnard, Ventura, Santa Ana, and West Covina, for the purpose of providing joint insurance coverage and related risk management services for member cities. BICEP allows member entities to finance a claims payment pool for certain liability claims in excess of $1,000,000 to a maximum coverage limit of $27,000,000 for claims incurred through June 30, 2015, and $24,000,000 thereafter. Effective July 1, 2019, the member agencies of BICEP agreed to dissolve the Joint Powers Authority. BICEP continues to exist for the purpose of disposing of all claims, the distribution of assets, and any other functions necessary to conclude the affairs of BICEP as provided in the Bylaws of the Authority. Upon dissolution of BICEP, the City purchased liability insurance in the open marketplace, which provides insurance for claims costs exceeding the City’s self-insured retention of $1,000,000. The maximum coverage limit is $30,000,000, which is inclusive of the self-insured retention. Claims that exceed the maximum limit of liability are covered by the City’s Self-Insurance General Liability Internal Service Fund. There were no liability claims in the past four years that exceeded the coverage limit. Liability Claims Claims up to $1,000,000 are paid from the City’s Self Insurance General Liability Internal Service Fund. Payments for claims from $1,000,000 to the maximum limit discussed above are covered by the excess liability coverage purchased by the City. Any claims exceeding the maximum limit are covered by the Self Insurance General Liability Internal Service Fund. The liability for these claims is recorded as part of long- term obligations in the Self Insurance General Liability Fund and government-wide financial statements. Liabilities include amounts incurred, but not reported. 90 436 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 9. RISK MANAGEMENT (Continued) Workers’ Compensation Claims Workers’ compensation claims of up to $1,000,000 per claim are paid from the Self Insured Workers’ Comp Internal Service Fund. Excess workers’ compensation coverage is purchased through the CSAC/Prism-Excess Insurance Authority. Payments for claims from $1,000,000 to statutory limits are covered by CSAC/Prism- Excess Insurance Authority. The Self Insurance Workers’ Comp Internal Service Fund has a $14.2 million deficit at year-end at the 55 percent confidence level. The City has established plans to help reduce the deficit in this fund. This will be accomplished by additional transfers from the General Fund, Proprietary funds, and other governmental funds in which employees are charged over the next nine years. Claims activity and liabilities relating to the current and prior year are (in thousands): Workers' Compensation General Liability Total Balance June 30, 2018 28,811$ 11,470$ 40,281$ Additions 2,674 1,479 4,153 Reductions (4,855) (4,553) (9,408) Net Increase (Decrease)(2,181) (3,074) (5,255) Balance June 30, 2019 26,630 8,396 35,026 Additions 9,758 3,310 13,068 Reductions (6,782) (4,157) (10,939) Net Increase (Decrease)2,976 (847) 2,129 Balance June 30, 2020 29,606$ 7,549$ 37,155$ 91 437 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 10. INTERFUND TRANSACTIONS a. Advances to/from Other Funds The amounts at year-end were (in thousands): There is a $1,363,000 advance from the LMIHAF Capital Projects Fund to the Redevelopment Agency Private Purpose Trust Fund as of June 30, 2020 for Main Pier property acquisitions prior to the dissolution of the Redevelopment Agency on February 1, 2012. Redevelopment Agency Private Purpose Trust Advances from (Receivable): Major Governmental Funds LMIHAF Capital Projects 1,363$ Advances to (Payable): 92 438 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 10. INTERFUND TRANSACTIONS (Continued) b. Transfers In/Out The amounts at year-end were (in thousands): The following is a summary of the significant transfers:  $8,861,000 was transferred from the General Fund to Other Governmental Funds for debt service payments of $4,611,000 and for infrastructure related projects including road repairs, police facility repairs and enhancement, equipment, and other capital improvement projects of $4,250,000.  $36,000 was transferred from the General Fund to the Grants Special Revenue Fund for CBDG administration costs of $36,000 that were charged to the grant fund in excess of the grant amount in prior fiscal years.  $51,000 was transferred from the General Fund to the Refuse Enterprise Fund to fund the senior citizen rate reduction on refuse charges.  $405,000 was transferred from the LMIHAF Fund to Other Governmental Funds for debt service payments.  $159,000 was transferred from the Grants Special Revenue Fund to the General Fund for prior fiscal years CDBG administration costs that are eligible for grant reimbursement.  $20,000 was transferred from the Other Governmental Funds to the Grants Special Revenue Fund for prior fiscal year expenditures that are eligible for grant reimbursement.  $515,000 was transferred from the Infrastructure Fund to the 2014A Bond Project Fund to utilize the bond funds on eligible Police Headquarters Modernization Project costs.  $13,000 was transferred from the Hazmat Service Enterprise Fund to the General Fund to cover administrative and overhead expenditures. Transfers In General Fund Grants Special Revenue LMIHAF Capital Projects Other Governmental Funds Total Governmental Funds Hazmat Service Fund Total Transfers In General Fund -$ 159$ -$ -$ 159$ 13$ 172$ Grants Special Revenue 36 - - - 36 - 36 Other Governmental Funds 8,861 20 405 515 9,801 - 9,801 Total Governmental Funds 8,897 179 405 515 9,996 13 10,009 Refuse Fund 51 - - - 51 - 51 Total Enterprise Funds 51 - - - 51 - 51 Total Transfers Out 8,948$ 179$ 405$ 515$ 10,047$ 13$ 10,060$ Transfers Out 93 439 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS Below is a schedule of changes in long-term governmental obligations for the year (in thousands): Governmental Activities: June 30, 2019 Additions Retirements June 30, 2020 Accrued Interest Due Within One Year Public Financing Authority: 2010(a) Lease Revenue Bonds 8,235$ -$ (825)$ 7,410$ 122$ 865$ 2011(a) Lease Revenue Bonds 17,770 - (2,045) 15,725 205 1,060 2014(a) Lease Revenue Bonds 13,145 - (615) 12,530 145 650 Total Public Financing Authority 39,150 - (3,485) 35,665 472 2,575 Other Long-Term Obligations: Compensated Absences 11,295 5,294 (3,956) 12,633 - 4,432 Claims Payable 35,026 13,068 (10,939) 37,155 - 8,902 Pollution Remediation 2,000 - - 2,000 - - LED Lighting Phase I 656 - (110) 546 3 114 I-Bank CLEEN Loan 2,454 - (283) 2,171 21 289 CEC Loan 2,818 - (230) 2,588 - 261 Leases Payable 5,083 1,172 (1,014) 5,241 72 1,190 Total Other Long-Term Obligations 59,332 19,534 (16,532) 62,334 96 15,188 Total Long-Term Obligations - Governmental Activities 98,482$ 19,534$ (20,017)$ 97,999$ 568$ 17,763$ 94 440 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) a. Public Financing Authority (1) 2010(a) Public Financing Authority Lease Revenue Bonds Year of Issuance 2010 Type of Debt Lease Revenue Bonds Original Principal Amount $14,745,000 Security Lease with City Interest Rates 2.0% to 5.0% Interest Payment Dates March 1st, September 1st Principal Payment Dates September 1st Purpose of Debt Defease 1997 Leasehold Revenue Bonds (Construct Pier Plaza and Purchase 800 MHz System) and 2000 Lease Revenue Bonds (Capital Improvements and defeasance of Emerald Cove Certificates of Participation) Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2021 865$ 349$ 1,214$ 2022 905 305 1,210 2023 550 268 818 2024 580 240 820 2025 605 210 815 2026-2030 3,305 560 3,865 2031 600 15 615 Total 7,410$ 1,947$ 9,357$ 95 441 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) (2) 2011(a) Public Financing Authority Lease Revenue Bonds Year of Issuance 2011 Type of Debt Lease Revenue Bonds Original Principal Amount $36,275,000 Security Lease with City Interest Rates 2.0% to 5.0% Interest Payment Dates March 1st, September 1st Principal Payment Dates September 1st Purpose of Debt Defease 2001(a) Leasehold Revenue Bonds (Construct Sports Complex and South Beach Phase II Improvements) and 2001(b) Lease Revenue Bonds (Defease Civic Improvement Corporation Certificates) Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2021 1,060$ 607$ 1,667$ 2022 1,095 564 1,659 2023 1,150 519 1,669 2024 1,185 482 1,667 2025 1,225 440 1,665 2026-2030 6,855 1,421 8,276 2031-2032 3,155 142 3,297 Total 15,725$ 4,175$ 19,900$ 96 442 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) (3) 2014(a) Public Financing Authority Lease Revenue Bonds Year of Issuance 2014 Type of Debt Lease Revenue Bonds Original Principal Amount $15,295,000 Security Lease with City Interest Rates 3.0% to 5.0% Interest Payment Dates March 1st, September 1st Principal Payment Dates September 1st Purpose of Debt Finance the construction of a new Senior Center Debt service requirements to maturity are (in thousands): b. Other Long-Term Obligations (1) Compensated Absences There is no repayment schedule to pay the compensated absences amount of $12,633,000 relating to governmental operations. The General Fund typically liquidates the vacation and sick leave liability. Year Ending June 30 Principal Interest Total 2021 650$ 431$ 1,081$ 2022 665 411 1,076 2023 685 384 1,069 2024 720 352 1,072 2025 750 319 1,069 2026-2030 4,175 1,196 5,371 2031-2035 4,885 469 5,354 Total 12,530$ 3,562$ 16,092$ 97 443 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) (2) Claims Payable There is no repayment schedule for the claims payable for governmental activities of $37,155,000 described in Note 9. The City pays the claims upon final settlement. The General Fund typically liquidates the claims payable liability. (3) Pollution Remediation The City plans to remediate hazardous materials contamination of land located within Huntington Central Park used as a gun range facility prior to its close in 1997. The City is voluntarily planning to remediate the site in order to use the area for park purposes. The cost of the gun range remediation is estimated to be $2,000,000 and is reported as a long-term liability in the government-wide financial statements. The liability was measured by estimating a reasonable range of potential outlays and multiplying those outlays by their probability of occurring. 98 444 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) (4) LED Lighting Phase I Year of Issuance 2016 Type of Debt Leaseback from Capital One Public Funding, LLC Principal Amount Original $1,062,924 Security Loan Agreement with Capital One Public Funding, LLC Interest Rates Original 2.32% Interest Payment Dates February 1st and August 1st Principal Payment Dates August 1st Purpose of Debt To purchase and upgrade street, area and pole lighting to energy efficient LED light sources Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2021 114$ 18$ 132$ 2022 119 14 133 2023 122 10 132 2024 126 5 131 2025 65 1 66 Total 546$ 48$ 594$ 99 445 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) (5) I-Bank CLEEN Loan Year of Issuance 2016 Type of Debt CLEEN Loan from the California Infrastructure and Economic Development Bank (I-Bank) Principal Amount Original $3,000,000 Security Edwards Fire Station Interest Rates Original 2.32% Interest Payment Dates February 1st and August 1st Principal Payment Dates August 1st Purpose of Debt To purchase and upgrade street pole lighting to energy efficient LED light sources Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2021 289$ 47$ 336$ 2022 296 40 336 2023 303 33 336 2024 310 26 336 2025 317 19 336 2026-2027 656 15 671 Total 2,171$ 180$ 2,351$ 100 446 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) (6) California Energy Commission (CEC) Loan Year of Issuance 2016 Type of Debt Loan from the California Energy Commission (CEC) Principal Amount Original $3,000,000 Security Loan Agreement with CEC Interest Rates Original 1.00% Interest Payment Dates June 22nd and December 22nd Principal Payment Dates June 22nd and December 22nd Purpose of Debt To upgrade street pole lighting to energy efficient LED light sources Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2021 261$ 25$ 286$ 2022 264 22 286 2023 266 20 286 2024 269 17 286 2025 272 14 286 2026-2030 1,256 32 1,288 Total 2,588$ 130$ 2,718$ 101 447 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) (7) Leases Payable Year of Issuance 2016 Type of Debt Capital Leases Principal Amount Various Security Master Lease Agreement Interest Rates 1.54% and 1.71% Interest Payment Dates Semi-Annually Principal Payment Dates Semi-Annually Purpose of Debt Equipment Financing In December 2019, a new seven-year lease agreement was approved by City Council in the amount of $1,172,59 to finance the replacement of a fire engine and ambulance. Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2021 1,190 104 1,294 2022 1,066 81 1,147 2023 1,087 61 1,148 2024 1,109 38 1,147 2025 435 8 443 2026-2027 354 12 366 Total 5,241$ 304$ 5,545$ 102 448 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) c. Long-Term Obligations – Business-Type Activities Below is a schedule of the long-term obligations of business-type activities (in thousands): (1) Compensated Absences There is no repayment schedule for the compensated absences amount of $1,615,000 relating to business-type activities. The balance for the outstanding business-type compensated absences is predominately related to the Water and Sewer funds. d. Long-Term Conduit Debt Obligations Below is a schedule of the conduit debt obligations for which the City is not liable in any manner (in thousands): June 30, 2019 Additions Retirements June 30, 2020 Due Within One Year Compensated Absences 1,416$ 590$ (391)$ 1,615$ 440$ Total Long-Term Obligations - Business-Type Activities 1,416$ 590$ (391)$ 1,615$ 440$ Long-Term Obligations - Business-Type Activities: June 30, 2019 Additions Retirements June 30, 2020 Community Facilities District No. 1990-1 Special Tax Refunding Bonds 330$ -$ (160)$ 170$ Community Facilities District No. 2000-1 2013 Special Tax Refunding Bonds 10,275 - (600) 9,675 Community Facilities District No. 2002-1 Special Assessment Tax Bonds 4,090 - (145) 3,945 Community Facilities District No. 2003-1 2013 Special Tax Refunding Bonds 17,235 - (820) 16,415 Total Community Facilities Districts 31,930 - (1,725) 30,205 Residential Redevelopment Bonds 2,900 - - 2,900 Total Obligations Not Recorded in Financial Statements 34,830$ -$ (1,725)$ 33,105$ Community Facilities Districts: 103 449 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 11. LONG-TERM OBLIGATIONS (Continued) (1) Residential Development Bonds The City is involved in various bond issues where the City or Redevelopment Agency issued bonds to assist in the financing of residential developments. A trustee holds all funds and payment cannot be made from any other source than the mortgages received. These bond issues are (in thousands): 12. CAPITAL ASSETS a. Changes in Capital Assets Capital asset activity for the year was (in thousands): Governmental Activities June 30, 2019 Additions Dispositions June 30, 2020 Capital Assets, Not Depreciated: Land 362,534$ -$ (465)$ 362,069$ Construction in Progress 7,631 2,423 (2,539) 7,515 Total Capital Assets -Not Depreciated 370,165 2,423 (3,004) 369,584 Capital Assets Being Depreciated Buildings 208,771 5,250 (2,743) 211,278 Machinery and Equipment 64,038 3,335 (370) 67,003 Infrastructure 419,321 15,552 (801) 434,072 Total Capital Assets Being Depreciated 692,130 24,137 (3,914) 712,353 Less Accumulated Depreciation: Buildings (80,143) (4,447) 91 (84,499) Machinery and Equipment (50,771) (2,640) 370 (53,041) Infrastructure (222,912) (7,527) 801 (229,638) Total Accumulated Depreciation (353,826) (14,614) 1,262 (367,178) Total Depreciated - Net 338,304 9,523 (2,652) 345,175 Total Capital Assets 1,062,295 26,560 (6,918) 1,081,937 Total Accumulated Depreciation (353,826) (14,614) 1,262 (367,178) Capital Assets of Governmental Activities - Net 708,469$ 11,946$ (5,656)$ 714,759$ Bond Issue Outstanding Year-end Original Issue Amount Five Points Senior Project Multi-Family Housing Revenue Bonds - Series A - 1991 $ 2,900 $ 9,500 104 450 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 12. CAPITAL ASSETS (Continued) b. Depreciation Expense Depreciation in governmental activities was charged to the following functions/programs in the Statement of Activities (in thousands): Business-Type Activities: June 30, 2019 Additions Dispositions June 30, 2020 Capital Assets, Not Depreciated: Land 3,907$ -$ -$ 3,907$ Construction in Progress 5,701 236 (5,495) 442 Total Capital Assets -Not Depreciated 9,608 236 (5,495) 4,349 Capital Assets Being Depreciated Buildings 92,567 7,515 - 100,082 Machinery and Equipment 20,313 344 - 20,657 Infrastructure 145,671 506 (216) 145,961 Total Capital Assets Being Depreciated 258,551 8,365 (216) 266,700 Less Accumulated Depreciation: Buildings (29,211) (2,512) - (31,723) Machinery and Equipment (12,537) (1,095) - (13,632) Infrastructure (80,715) (2,410) 216 (82,909) Total Accumulated Depreciation (122,463) (6,017) 216 (128,264) Total Depreciated - Net 136,088 2,348 - 138,436 Total Capital Assets 268,159 8,601 (5,711) 271,049 Total Accumulated Depreciation (122,463) (6,017) 216 (128,264) Capital Assets of Business Activities - Net 145,696$ 2,584$ (5,495)$ 142,785$ Department: City Manager 21$ Finance 27 Community Development 76 Fire 199 Information Services 6 Police 252 Community Services 2,032 Library Services 295 Public Works 11,188 Internal Service Fund depreciation charged to functions 518 Total 14,614$ 105 451 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 12. CAPITAL ASSETS (Continued) Depreciation in business-type activities was charged to the following functions/programs in the Statement of Activities (in thousands): 13. INVESTMENT IN JOINT VENTURES The City participates in a firefighter training center called Central Net Operations Authority (CNOA) through a joint powers agreement with the City of Fountain Valley. The City of Huntington Beach records 76.00% of CNOA net assets as Joint Venture Investments. In July 2019, the City formally withdrew its membership from PCTA, a Joint Powers Authority that manages the cable television and video provider franchising. The City started collecting 100% of the franchise and PEG fees generated from the Huntington Beach cable subscribers directly from the cable providers in fiscal year 2019-2020. The collected PEG fees are deposited into a restricted fund called “Surf City 3” and will be used to fund the City’s own cable channel operations and programming costs. 14. RELATED PARTY TRANSACTION The City has entered into a housing loan and equity sharing agreement in the principal sum of $1,510,000 with City Manager Oliver Chi in October 2019 to use as funding for the purchase of a home within the City. The property is held as security for repayment of the loan until it is paid, and will remain subject to the provisions of the loan agreement until sold. When or if the property is sold, the City will receive 50% of the increase in the value of the home. This housing loan and equity sharing agreement has a term of thirty (30) years. The balance as of the loan as of June 30, 2020 is $1,490,685. Fund: Water 3,910$ Sewer Service 2,086 Refuse 21 Total 6,017$ 106 452 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH a. General Discussion On December 29, 2011, the California Supreme Court upheld ABX1 26 that provided for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Huntington Beach that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit. ABX1 26 provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 9, 2012, the City Council elected to become the Successor Agency for the former Redevelopment Agency in accordance with ABX1 26 as part of City resolution number 2012-01. After enactment of the law, effective June 28, 2011, redevelopment agencies in the State of California generally cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. ABX1 26 directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as of successor agency by ABX1 26. 107 453 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued) a. Long-Term Debt Below is a schedule of changes in long-term obligations of the Successor Agency for the year (in thousands): Successor Agency: June 30, 2019 Additions Retirements June 30, 2020 Accrued Interest Due Within One Year Bonds Payable 1999 Tax Allocation Refunding Bonds 2,560$ -$ (625)$ 1,935$ 40$ 365$ 2002 Tax Allocation Bonds 5,585 - (1,370) 4,215 88 800 Total Bonds Payable 8,145 - (1,995) 6,150 128 1,165 Other Long-Term Obligations Mayer DDA 2,409 - (555) 1,854 30 554 Bella Terra OPA (Parking)7,622 - (1,294) 6,328 - 1,296 Bella Terra AHA (Phase II)14,196 - (643) 13,553 - 643 CIM DDA (Parking & Infrastructure)5,836 - (269) 5,567 292 288 CIM DDA (Additional Parking)376 - (12) 364 27 13 Section 108 Loan RDA 520 - (520) - - - Compensated Absences 48 (48) - - - Total Other Long-Term Obligations 31,007 - (3,341) 27,666 349 2,794 Total Long-Term Obligations 39,152$ -$ (5,336)$ 33,816$ 477$ 3,959$ 108 454 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued) (1) 1999 Tax Allocation Refunding Bonds Year of Issuance 1999 Type of Debt Tax Allocation Refunding Bonds Original Principal Amount $10,835,000 Security Tax Increment Interest Rates 3.00% to 5.05% Interest Payment Dates February 1st and August 1st Principal Payment Dates August 1st Purpose of Debt Prepay Agency’s 1992 Loans to Public Financing Authority Debt service requirements to maturity are (in thousands): Year Ending June 30 Principal Interest Total 2021 365$ 88$ 453$ 2022 380 69 449 2023 405 49 454 2024 425 29 454 2025 360 9 369 Total 1,935$ 244$ 2,179$ 109 455 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued) (2) 2002 Tax Allocation Refunding Bonds Year of Issuance 2002 Type of Debt Tax Allocation Refunding Bonds Original Principal Amount $20,900,000 Security Tax Increment Interest Rates 2.00% to 5.00% Interest Payment Dates February 1st and August 1st Principal Payment Dates August 1st Purpose of Debt Prepay Agency’s 1992 Loans to Public Financing Authority and fully defease 1992 Public Financing Authority bonds Debt service requirements to maturity are (in thousands): Pledged Revenues The Successor Agency will repay a total of $6,924,000, principal and interest, for the outstanding 1999 and 2002 Tax Allocation Refunding Bonds as of June 30, 2020 from semi-annual Redevelopment Property Tax Trust Fund (RPTTF) revenue allocations. The 1999 and 2002 Tax Allocation Refunding Bonds are not a debt of the City of Huntington Beach, the State of California, nor any of its political subdivisions, and neither the City, the State nor any of its political subdivision is liable therefore, not in any event shall the bonds be payable out of funds or properties other than those of the Redevelopment Agency as set forth in the bond indenture. Year Ending June 30 Principal Interest Total 2021 800$ 191$ 991$ 2022 840 150 990 2023 875 107 982 2024 920 62 982 2025 780 20 800 Total 4,215$ 530$ 4,745$ 110 456 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued) (3) Mayer Disposition and Development Agreement In fiscal year 1996-97, the Agency entered into a disposition and development agreement (DDA) with Robert Mayer Corporation (Corporation) concerning additional development adjacent to the Waterfront Hotel. Under the agreement, the Corporation would advance payments for the project costs with the Agency reimbursing up to $16,750,000 of the costs. As of year-end, the Successor Agency obligation under the agreement amounted to $1,854,000. Project-generated revenues as available will repay these amounts over the time needed to fully amortize the advance. The interest rate of this obligation is 6.32%. The DDA has been approved as an enforceable obligation by the DOF. (4) Bella Terra Parking Structure In fiscal year 2005-06, the Agency entered into an owner participation agreement with Bella Terra Associates, LLC (formerly Huntington Center Associates, LLC). Under the agreement, the Corporation would construct various public improvements, including a parking structure, which would then be deeded to the City. The Agency would reimburse $15,000,000 of the costs of the public improvements. As of year-end, the Successor Agency obligation under the agreement amounted to $6,327,000. Project-generated revenues as available will repay these amounts over the time needed to fully amortize the advance. The interest rate of this obligation is 6.94%. The agreement has been approved as an enforceable obligation by the DOF. (5) Bella Terra Phase II In fiscal year 2010-11, the Agency entered into an affordable housing agreement with BTDJM Phase II Associates (DJM). The agreement would facilitate the construction of a 467 unit mixed use project, including 43 moderate units and 28 very low units. Under the terms of the agreement, the Agency would reimburse DJM for the construction of the affordable units up to $17,000,000. DJM has transferred the site to UDR, and as of year-end, the Successor Agency obligation under the agreement amounted to $13,553,000. Reimbursement of the affordable units will be based upon the site-generated tax increment for the mixed use project as well as the 20% housing fund from the site-generated Bella Terra I. The interest rate of this obligation is 4.00%. The agreement has been approved as an enforceable obligation by the DOF. 111 457 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued) (6) CIM/Huntington Disposition and Development Agreement – Strand Parking Structure and Infrastructure Year of Issuance 2009 Type of Debt Loan from CIM Group, LLC Original Principal Amount $7,900,000 Security Tax Increment Interest Rates 7.0% Interest Payment Dates September 30th Principal Payment Dates September 30th Purpose of Debt Strand Parking Structure and Infrastructure As of year-end, the Successor Agency obligation under the agreement amounted to $5,567,000. Repayment shall be made solely from Redevelopment Property Tax Trust Fund (RPTTF) revenues received by the Huntington Beach Redevelopment Successor Agency Private Purpose Trust Fund in the amounts included in the Oversight Board approved Recognized Obligation Payment Schedule (ROPS) to the County Auditor Controller (CAC) and the Department of Finance (DOF). The DDA has been approved as an enforceable obligation by the DOF. 112 458 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued) (7) CIM/Huntington Disposition and Development Agreement – Additional Strand Parking Year of Issuance 2009 Type of Debt Loan from CIM Group, LLC Original Principal Amount $950,000 Security Tax Increment Interest Rates 10.0% Interest Payment Dates September 30th Principal Payment Dates September 30th Purpose of Debt Additional Strand Parking Structure and Infrastructure As of year-end, the Successor Agency obligation under the agreement amounted to $364,000. Repayment shall be made solely from Redevelopment Property Tax Trust Fund (RPTTF) revenues received by the Huntington Beach Redevelopment Successor Agency Private Purpose Trust Fund in the amounts included in the Oversight Board approved Recognized Obligation Payment Schedule (ROPS) to the County Auditor Controller (CAC) and the Department of Finance (DOF). The DDA has been approved as an enforceable obligation by the DOF. 113 459 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 15. SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Continued) b. Advances from the City Housing Fund The Successor Agency has recorded advances from the City Housing Fund totaling $1,363,000 from the Low-Income Housing Fund to the Redevelopment Agency Capital Projects Fund for Main Pier property acquisitions. 16. COMMITMENTS AND CONTINGENCIES a. Legal Actions There are legal actions pending against the City resulting from normal operations. In the opinion of management and the City Attorney, the financial resolution of these actions should not have a significant impact on these financial statements. b. Sales Tax Sharing Agreements City Council has agreed to provide sales tax rebates to various companies, based upon various factors such as increased job-base or new sales tax to the City. The sales tax rebates serve to attract and retain various companies in the City of Huntington Beach. The City of Huntington Beach has four sales tax sharing agreements that extend until 2020, 2024, 2033, and 2038. Sales tax rebates totaled $689,230 for the year ended June 30, 2020. Sales tax sharing agreements include an agreement with Surf City Auto Group II, Inc. wherein the sales tax sharing is a 50%/50% Auto Group/City split with base sales of $1,681,797 (Jeep sales for 2016) and increases by 1% each year. The other sales tax sharing agreements are with Pinnacle Petroleum through 2024, with base sales of $100,000, McKenna Subaru Huntington Beach through 2033 with a 45%/55% McKenna/City split with base sales of $150,800, and ACS (Applied Computer Solutions) with a rebate percentage of 25% of the annual sales tax increment above the base sales of $200,000. If the annual sales tax revenue net of base sales exceeds $600,000, the rebate percentage will increase to 30% with a total not to exceed rebate amount of $200,000 annually. The agreement with ACS ended on June 30, 2020. 114 460 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 16. COMMITMENTS AND CONTINGENCIES (Continued) c. Cooperation and Owner Participation Agreements On September 2, 2003, the Redevelopment Agency Approved a Cooperation Agreement Regarding Capital Improvements in the Southeast Coastal Redevelopment Project with the City. This agreement commits the Redevelopment Agency to reimburse the City for a number of capital improvement projects to be undertaken as part of the Five Year Capital Improvement Program in the Southeast Redevelopment project area starting in FY 2003/04 as they are undertaken. The Successor Agency received its Finding of Completion notice from the Department of Finance on May 13, 2014. The Oversight Board (to the Successor Agency) have approved and reauthorization of the loans between the City and former Redevelopment Agency in FY 16/17. The State Department of Finance has denied the validity of the loans and the City has filed suit against the State. d. Redevelopment Successor Agency Debt to City The City has advanced money to the Redevelopment Agency for major capital improvements, economic development projects, and operations. In January 2011, the City Council and Redevelopment Agency Board approved a revised Cooperation Agreement, which included a Promissory Note that memorialized indebtedness previously incurred by the Agency and owed to the City from a series of loans made from the City to the Agency from 1982 to present. The City and Successor Agency have not recorded the advances in the accompanying financial statements due to uncertainties related to Health and Safety Code Section 34191.4, which establishes certain restrictions and limitations on the repayment of city- agency loans. In accordance with Health and Safety Code Section 34191.4(b)(3), all other loans between the city and former Redevelopment Agency will begin to be repaid, at a 3% interest rate, as determined by SB 107 upon approval of the Oversight Board and the Department of Finance. The Oversight Board (to the Successor Agency) have approved and reauthorization of the loans between the City and former Redevelopment Agency in FY 16/17. The State Department of Finance has denied the validity of the loans and the City has filed suit against the State. Below is a schedule of the activity for the year (in thousands): 115 461 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 16. COMMITMENTS AND CONTINGENCIES (Continued) d. Redevelopment Successor Agency Debt to City (Continued) e. Low Moderate Income Housing Asset Fund Debt to City In May 2009, a Promissory Note was issued by the Redevelopment Agency to the City to pay for outstanding bonded debt related to the Emerald Cove Housing Project. The note is secured by a pledge of Set-Aside Funds. Based on the Promissory Note, the interest rate for the loan is 0% and the loan is scheduled to be repaid by 2021. The City has not recorded the advances in the accompanying financial statements due to uncertainties surrounding ABX1 26 and Assembly Bill 1484 and related litigation (see note 16f). Below is a schedule of the activity for the year (in thousands): June 30, 2019 Additions Reductions June 30, 2020 General Fund Direct Advances 2,312$ -$ -$ 2,312$ Indirect Advances 6,567 - - 6,567 Land Sales 32,833 - - 32,833 Interest 29,023 1,457 - 30,480 Total General Fund 70,735 1,457 - 72,192 Sewer Fund Direct Advances 292 6 - 298 Deferred Development Fees 182 4 - 186 Total Sewer Fund 474 10 - 484 Drainage Fund Direct Advances 706 14 - 720 Deferred Development Fees 195 4 - 199 Total Drainage Fund 901 18 - 919 Park Acquisition and Development Fund Direct Advances 5,807 120 - 5,927 Deferred Development Fees 431 9 - 440 Total Park Acquisition and Development Fund 6,238 129 - 6,367 Water Fund Direct Advances 4,371 90 - 4,461 Total Water Fund 4,371 90 - 4,461 Total All Funds 82,719$ 1,704$ -$ 84,423$ June 30, 2019 Additions Reductions June 30, 2020 General Fund Emerald Cove 3,245$ -$ -$ 3,245$ 116 462 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 16. COMMITMENTS AND CONTINGENCIES (Continued) f. Successor Agency Litigation Until 2012, the Huntington Beach Redevelopment Agency existed and received property tax increment from property within the “City Redevelopment Project Area.” In 2012, the State Legislature dissolved all redevelopment agencies, and all tax increment was returned to the County for payment to other taxing entities. The only exception was that tax increment would continue to be paid to the Successor Agency to the City Redevelopment Agency to pay any pre-dissolution, legally binding obligations established prior to the dissolution of the agencies. Further, the City transferred the former Redevelopment Agency’s housing obligations to the Huntington Beach Housing Authority pursuant to Health and Safety Code section 34176. The Successor Agency contended that its payments to retire the former Redevelopment Agency’s portion of the 2010 Lease Revenue Bonds used to finance the Emerald Cove low income housing project were such an obligation. The annual payment on these bonds is approximately $400,000 a year. The amount that the City contends to be due to pay the former Redevelopment Agency’s share of the bonds is $3,245,000. The Successor Agency also contended that the 2012 Pacific City Development Agreement was a pre-dissolution, legally binding obligation. Pacific City is a development project that was conditioned on providing 77 affordable housing units, of which the Successor Agency now was obliged to construct 26 units off-site, at a cost of $6,500,000. This would not be a City General Fund obligation. The State Department of Finance rejected the City’s “Recognized Obligation Payment Schedule” (“ROPS”) to establish these two obligations as entitled to be funded through tax increment. In response, the City sued the Department of Finance. All post-redevelopment matters are being heard in Sacramento before a select panel of judges. On January 29, 2014, the Superior Court held that the Emerald Cove Bonds and the Pacific City housing were not preexisting Authority obligations payable with tax increment. The Successor Agency appealed the judgment. The appellate decision was received in 2018 and the Successor Agency lost the appeal. The Housing Authority is reviewing options on meeting the affordable housing requirements for Pacific City with other projects. The City itself does not require a reserve for either case. 117 463 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 16. COMMITMENTS AND CONTINGENCIES (Continued) f. Successor Agency Litigation (continued) In addition, as stated above in section (c) and (d), the City of Huntington Beach has filed suit against the State of California regarding the Department of Finance’s denial of loans which were between the Redevelopment Agency and the City of Huntington Beach. 17. OTHER INFORMATION a. Fund and Accumulated Deficits The following funds have total fund deficits at year-end (in thousands): The fund deficit in the Refuse Fund is due to fees and charges below the costs to provide services and the implementation of GASB Nos. 68 and 75 that require the net pension liability and net other postemployment benefits liability to be reported on the face of the financial statement. The Self Insurance Workers’ Comp fund has a deficit due to increases in statutory benefits related to workers’ comp claims, rising healthcare costs, and the implementation of GASB Nos. 68 and 75. The City has established plans to reduce and eliminate the deficits in these funds. The City has increased refuse rates to address the deficit in the Refuse Fund. Additional transfers will be made over the next ten to twenty years from the General Fund, Proprietary funds, and other governmental funds to address the deficit in the Self Insurance Workers’ Comp Internal Service Fund. 18. SUBSEQUENT EVENTS a. Huntington Beach Public Financing Authority Lease Revenue Refunding Bonds Staff regularly monitors the market for municipal securities and determined that in will be economically beneficial to refinance its existing callable bonds in 2020. On July 2020, the City Council approved the refunding of the Huntington Beach Public Financing Authority's outstanding 2010 Lease Revenue Refunding Bonds, Series A ($7,410,000) and 2011 Lease Revenue Refunding Bonds, Series A ($15,725,000) in an amount not to exceed $21,000,000. On July 29, 2020, the Tax-Exempt Lease Enterprise Funds: Refuse Fund 83$ Internal Service Fund: Self Insurance Workers' Comp 14,180 118 464 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 18. SUBSEQUENT EVENTS (Continued) Revenue Refunding Bonds, 2020 Series A and Taxable Lease Lease Revenue Refunding Bonds, 2020 Series B were issued in principal amounts of $4,835,000 and $14,440,000, respectively. Through this refunding, the General Fund debt service expenditures will be reduced by over $900,000 in the first two years and an average annual savings of $390,000 will be realized thereafter through 2032. b. Pension Obligation Bonds On November 18, 2019, the City Council approved a resolution providing for the possible issuance of taxable Pension Obligation Bonds to refund all or a portion of the City’s CalPERS unfunded accrued liability, totaling $436.2 million as of the June 30, 2018 actuarial valuation. On November 21, 2019, the City submitted the necessary documents to the Orange County Superior Court to begin the judicial validation process, which was finalized on May 18, 2020. The resolution also approves a not-to-exceed bond amount with the following conditions: (a) an aggregate principal amount not to exceed the City’s unfunded accrued actuarial liability under the PERS Contract pursuant to the Retirement Law as of the date of issuance of the Initial Series of Bonds (as determined by PERS), plus the underwriter’s discount on the Initial Series of Bonds, plus any original issue discount on the Initial Series of Bonds, plus the costs of issuance of the Initial Series of Bonds, (b) the true interest cost to the City on the Initial Series of Bonds shall not exceed 5.00%, and (c) the Initial Series of Bonds shall mature not later June 30, 2044 (the current PERS final amortization of the City’s unfunded accrued actuarial liability as set forth in the Actuarial Reports). c. Infectious Disease Outbreak – COVID-19 The outbreak of coronavirus disease 2019 (COVID-19), a respiratory disease caused by a new strain of coronavirus, has been characterized as a pandemic by the World Health Organization and the effects of the outbreak and governmental actions responsive to it are altering the behavior of businesses and consumers in a manner that is having significant impacts on global and local economies. In addition, financial markets in the United States and globally have seen significant declines and experienced significant volatility attributed to COVID-19 concerns. Potential impacts to the City associated with the COVID-19 outbreak include, but are not limited to, increasing costs and challenges to maintain a safe community, cancellation of public events, and disruption of the regional and local economy with corresponding decreases in the City’s revenues. The COVID-19 outbreak is ongoing, and the duration and severity of the outbreak and the economic and other actions that may be taken by governmental authorities to contain the outbreak or to treat its impact are uncertain. The ultimate impact of COVID-19 on the operations and finances of the City is unknown. The City 119 465 City of Huntington Beach Notes to Financial Statements For the Year Ended June 30, 2020 18. SUBSEQUENT EVENTS (Continued) implemented various cost containment measures during the year and amended its Fiscal Year 2020-21 budget, which includes consideration of the effect of the COVID-19 outbreak and an anticipated recession. The City continues to actively monitor the regional and local economy so that any further financial impacts can be anticipated and disruption to services can be avoided. d. CARES Act Funding In May 2020, the State of California (State) received CARES Act funding, including Coronavirus Relief Funds (CRF) from the U.S. Treasury Office. The State developed a plan to pass through a portion of the CRF assistance to cities and counties within California. The City will be receiving $2,485,243 of CRF assistance during fiscal year 2020/21, for eligible expenditures incurred beginning March 1, 2020 through December 31, 2020. The State did not make the appropriations of the CRF funds available to recipients until after July 1, 2020, therefore, the City will recognize the CRF revenue in fiscal year 2020-21. 120 466 THIS PAGE INTENTIONALLY LEFT BLANK 121 467 REQUIRED SUPPLEMENTARY INFORMATION 122 468 7+,63$*(,17(17,21$//</()7%/$1. 123 469 City of Huntington Beach Notes to Required Supplementary Information For the Year Ended June 30, 2020 Budgetary Information The City Council must annually adopt a budget by June 30 of the prior fiscal year. The budgeted expenditures become the appropriations to the various departments. The budget includes estimates for revenue that, along with the appropriations, compute the budgetary fund balance. The appropriated budget covers substantially all governmental fund expenditures with the exception of capital improvement projects (capital projects funds) carried forward from prior years, which constitute a legally authorized non-appropriated budget. The City Council may amend the budget at any time. The City Manager may transfer funds from between object purposes (personal services, operating expenditures, or capital outlay expenditures) within the same department without changing the total departmental budget. Department heads, with the Chief Financial Officer’s approval, may transfer funds from like object categories of the same department. The City Council must approve any changes to departmental budgets. Expenditures may not exceed appropriations at the departmental level. All unused appropriations lapse at year-end. During the year the City Council made several supplemental appropriations which included carryovers of prior year encumbrances all of which were within available fund balance and estimated revenue amounts. The City Council adopts governmental fund budgets consistent with generally accepted principles as legally required. There are no significant non-budgeted financial activities. Revenues for special revenue funds are budgeted by entitlements, grants and estimates of future development and economic growth. Expenditures and transfers are budgeted based upon available financial resources. On or before February 28th of each year, each department submits data to the City Manager for budget preparation. Staff prepares the budget by fund, function, and activity. The budget includes information on past years, current year estimates and requested appropriations for the next fiscal year. Before May 1st, the City Council receives the proposed budget. The City Council holds public hearings and may amend the budget by a majority vote. Changes to the budget must be within the available revenues and reserves. These financial schedules show budgetary data for the General and Special Revenue. The original budget, revised budget, actual expenditures, and variance amounts are shown. The City uses an encumbrance system as an aid in controlling expenditures. When the City issues a purchase order for goods or services, it records an encumbrance until the vendor delivers the goods or performs the service. At year-end, the City reports all outstanding encumbrances as restricted, committed, or assigned fund balance in governmental fund types. The City reappropriates these encumbrances into the new fiscal year. The following pages present schedules of budget to actual comparison of the General and Grant Special Revenue Fund’s Revenues, and Expenditures and Changes in Fund Balance (in thousands). 124 470 REVENUES Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Property Taxes 89,732$ 87,497$ 87,497$ $ - Sales Taxes 41,203 41,063 41,063 - Utility Taxes 17,906 18,149 18,149 - Other Taxes 20,926 17,489 17,499 10 Licenses and Permits 7,858 8,418 8,368 (50) Fines, Forfeitures and Penalties 4,519 3,403 3,403 - Use of Money and Property 17,272 17,148 17,510 362 Intergovernmental 3,074 3,591 4,102 511 Charges for Current Service 27,132 26,263 25,501 (762) Other 1,460 2,854 2,395 (459) Total Revenues 231,082 225,875 225,487 (388) EXPENDITURES Current: City Council 454 436 394 42 City Manager 3,872 4,070 4,045 25 City Treasurer 260 298 297 1 City Attorney 2,811 2,906 2,898 8 City Clerk 926 917 874 43 Finance 6,481 6,591 6,174 417 Community Development 9,600 9,971 9,184 787 Fire 52,623 55,030 55,030 - Information Services 7,766 8,010 7,812 198 Police 84,506 85,993 85,993 - Community Services 9,930 9,119 9,064 55 Library Services 4,930 5,611 4,752 859 Public Works 27,838 28,009 27,264 745 Debt Service: Principal 1,078 1,806 1,637 169 Interest 195 271 218 53 Total Expenditures 213,270 219,038 215,636 3,402 Excess of Revenues Over Expenditures 17,812 6,837 9,851 3,014 OTHER FINANCING SOURCES (USES) Transfers In 1,514 1,690 172 (1,518) Transfers Out (19,190) (8,948) (8,948) - Total Other Financing Sources (Uses) (17,676) (7,258) (8,776) (1,518) Net Change In Fund Balances 136 (421) 1,075 1,496 Fund Balance - Beginning of Year 79,013 79,013 79,013 - Fund Balance - End of Year 79,149$ 78,592$ 80,088$ 1,496$ CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) General Fund 125 471 REVENUES Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property 100$ 100$ 2,508$ 2,408$ Intergovernmental 2,672 13,087 5,292 (7,795) Other - - 989 989 Total Revenues 2,772 13,187 8,789 (4,398) EXPENDITURES Current: City Manager 16 5,744 11 5,733 City Clerk - 12 12 - Finance - 5 5 - Community Development 1,512 3,896 1,859 2,037 Fire - 2,452 1,447 1,005 Information Systems - 198 105 93 Police 724 3,051 1,689 1,362 Community Services 286 856 809 47 Library Services 66 344 290 54 Public Works 696 9,579 3,927 5,652 Debt Service: Principal 221 221 - 221 Interest 5 - - - Total Expenditures 3,526 26,358 10,154 16,204 Excess (Deficiency) of Revenues Over (Under) Expenditures (754) (13,171) (1,365) 11,806 OTHER FINANCING USES Transfers In - 36 36 - Transfers Out - (179) (179) - Total Other Financing Uses - (143) (143) - Net Change In Fund Balances (754) (13,314) (1,508) 11,806 Fund Balance - Beginning of Year 6,069 6,069 6,069 - Fund Balance - End Of Year 5,315$ (7,245)$ 4,561$ 11,806$ (In Thousands) Grants Special Revenue CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2020 126 472 City of Huntington Beach Required Supplementary Information Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period (in Thousands) Measurement Period 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 Total Pension Liability Service cost 8,327$ 8,314$ 8,084$ 7,436$ 7,102$ 7,263$ Interest on total pension liability 40,150 38,769 37,749 37,194 35,653 34,412 Differences between expected and actual experience (183) (2,042) (9,148) 1,072 (2,900) - Changes in assumptions - (3,634) 30,762 - (8,565) - Benefit payments, including refunds of employee contributions (28,508) (26,685) (25,312) (24,316) (23,377) (22,444) Net change in total pension liability 19,786 14,722 42,135 21,386 7,913 19,231 Total pension liability - beginning 571,812 557,090 514,955 493,569 485,656 466,425 Total pension liability - ending (a)591,598$ 571,812$ 557,090$ 514,955$ 493,569$ 485,656$ Plan Fiduciary Net Position Contributions - employer 14,816$ 13,495$ 12,316$ 10,982$ 9,747$ 9,066$ Contributions - employee 3,779 3,649 3,869 3,736 3,790 3,909 Investment income 27,288 32,963 40,328 1,856 8,230 56,429 Administrative Expense (296) (614) (536) (226) (418) (472) Benefit payments (28,508) (26,685) (25,3 12) (24,316) (23,377) (22,444) Plan to Plan Resource Movement (13) 1 - - - - Other 1 (1,166) - - 2 - Net change in plan fiduciary net position 17,067 21,643 30,665 (7,968) (2,026) 46,488 Plan fiduciary net position - beginning 415,455 393,812 363,147 371,115 373,141 326,653 Plan fiduciary net position - ending (b)432,522$ 415,455$ 393,812$ 363,147$ 371,115$ 373,141$ Net pension liability - beginning 156,357 163,278 151,808 122,454 112,515 139,771 Net pension liability - ending (a )-(b)159,076$ 156,357$ 163,278$ 151,808$ 122,454$ 112,515$ Plan fiduciary net position as a percentage of the total pension liability 73.11% 72.66% 70.69% 70.52% 75.19% 76.83% Covered payroll 45,419$ 45,431$ 44,848$ 44,365$ 44,233$ 41,142$ Net pension liability as a percentage of covered payroll 350.24% 344.16% 364.07% 342.18% 276.84% 273.48% Notes to Schedule: * Fiscal year 2013/14 was the first year of implementation, therefore only six years are shown. Benefit changes: the figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2017 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes in assumptions: None in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2 017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2 015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. Last Ten Fiscal Years* CalPERS City Miscellaneous Plan - 99 127 473 City of Huntington Beach Required Supplementary Information Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period (in Thousands) Measurement Period 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 Total Pension Liability Service cost 13,644$ 13,509$ 13,657$ 12,159$ 11,119$ 11,096$ Interest on total pension liability 53,048 51,223 49,350 48,390 46,160 44,246 Differences between expected and actual experience (1,220) 2,584 (10,819) 2,678 (820) - Changes in assumptions - (3,657) 40,352 - (11,054) - Benefit payments, including refunds of employee contributions (38,958) (37,128) (34,222) (32,116) (30,535) (29,540) Net change in total pension liability 26,514 26,531 58,318 31,111 14,870 25,802 Total pension liability - beginning 755,812 729,281 670,963 639,852 624,982 599,180 Total pension liability - ending (a)782,326$ 755,812$ 729,281$ 670,963$ 639,852$ 624,982$ Plan Fiduciary Net Position Contributions - employer 23,063$ 21,058$ 20,629$ 18,703$ 17,791$ 15,152$ Contributions - employee 4,337 4,164 4,570 4,058 4,110 3,850 Investment income 32,776 39,336 48,413 2,144 9,661 66,805 Administrative Expense (355) (736) (640) (270) (497) (555) Benefit payments (38,958) (37,128) (34,222) (32,116) (30,535) (29,540) Net Plan to Plan Resource Movement 13 (3) - (29) - - Other 1 (1,398) - - - - Net change in plan fiduciary net position 20,877 25,293 38,750 (7,510) 530 55,712 Plan fiduciary net position - beginning 497,767 472,474 433,724 441,234 440,704 384,992 Plan fiduciary net position - ending (b)518,644$ 497,767$ 472,474$ 433,724$ 441,234$ 440,704$ Net pension liability - beginning 258,045 256,807 237,239 198,618 184,278 214,188 Net pension liability - ending (a )-(b)263,682$ 258,045$ 256,807$ 237,239$ 198,618$ 184,278$ Plan fiduciary net position as a percentage of the total pension liability 66.30% 65.86% 64.79% 64.64% 68.96% 70.51% Covered payroll 43,684$ 43,371$ 43,283$ 42,619$ 42,252$ 38,397$ Net pension liability as a percentage of covered payroll 603.61% 594.97% 593.32% 556.65% 470.08% 479.93% Notes to Schedule: * Fiscal year 2013/14 was the first year of implementation, therefore only six years are shown. Changes in assumptions: None in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes . In 2 015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. Benefit changes: the figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2017 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Last Ten Fiscal Years* CalPERS City Safety Plan - 100 128 474 City of Huntington Beach Required Supplementary Information Schedule of Changes in the Net Pension Liability and Related Ratios During the Measurement Period (in Thousands) Total Pension Liability 2019-20 2018-19 2017-18** 2016-17 2015-16 2014-15 2013-14 Service cost 338$ 398$ 344$ 487$ 552$ 495$ 544$ Interest on total pension liability 3,954 3,990 2,964 3,976 3,945 3,919 3,828 Differences between expected and actual experience 4,594 - (794) - 982 - - Changes in assumptions 1,756 - 2,115 1,515 2,928 - - Benefit payments, including refunds of employee contributions (5,012) (4,771) (3,388) (4,144) (3,773) (3,588) (3,548) Net change in total pension liability 5,630 (383) 1,241 1,834 4,634 826 824 Total pension liability - beginning 65,444 65,827 64,586 62,752 58,118 57,292 56,468 Total pension liability - ending (a)71,074$ 65,444$ 65,827$ 64,586$ 62,752$ 58,118$ 57,292$ Plan Fiduciary Net Position Contributions - employer 3,506$ 4,962$ 3,507$ 5,346$ 7,277$ 4,678$ 4,539$ Contributions - employee - - - - - - - Investment income 2,114 2,582 2,128 6,373 4,282 (1,313) 3,465 Administrative Expense (444) (191) (145) (182) (189) (170) (176) Benefit payments (5,012) (4,771) (3,388) (4,144) (3,773) (3,588) (3,548) Section 115 Trust Segregation - - (3,788) - - - - Other - - - - - 3,183 258 Net change in plan fiduciary net position 164 2,582 (1,686) 7,393 7,597 2,790 4,538 Plan fiduciary net position - beginning 58,853 56,271 57,957 50,564 42,967 40,177 35,639 Plan fiduciary net position - ending (b)59,017$ 58,853$ 56,271$ 57,957$ 50,564$ 42,967$ 40,177$ Net pension liability - beginning 6,591 9,556 6,629 12,188 15,151 17,115 20,829 Net pension liability - ending (a)-(b)12,057$ 6,591$ 9,556$ 6,629$ 12,188$ 15,151$ 17,115$ Plan fiduciary net position as a percentage of the total pension liability 83.04% 89.93% 85.48% 89.74% 80.58% 73.93% 70.13% Covered payroll 8,469$ 12,863$ 10,890$ 17,167$ 19,517$ 22,069$ 22,004$ Net pension liability as a percentage of covered payroll 142.37%51.24% 87.75% 38.61% 62.45% 68.65% 77.78% * Fiscal year 2013/14 was the first year of implementation, therefore only seven years are shown. ** The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine-month reporting period from October 1, 2017 to June 30, 2018. Last Ten Fiscal Years* Supplemental Retirement Plan 129 475 City of Huntington Beach Required Supplementary Information Schedule of Changes in Net OPEB Liability and Related Ratios For the Measurement Periods Ended June 30 (in Thousands) Measurement Period 2019 2018 2017 Total OPEB Liability Service cost 1,241$ 1,205$ 877$ Interest on the total OPEB liability 1,859 1,787 1,293 Actual and expected experience difference 1,411 - - Changes in assumptions (3,358) - - Benefit payments (1,742) (1,683) (1,036) Net change in total OPEB liability (589) 1,309 1,134 Total OPEB liability - beginning 33,434 32,125 30,991 Total OPEB liability - ending (a) 32,845$ 33,434$ 32,125$ Plan Fiduciary Net Position Contribution - employer 2,270$ 4,191$ 1,036$ Net investment income 1,901 1,126 471 Benefit payments (1,742) (1,683) (1,036) Administrative expense (61) (131) (9) Net change in plan fiduciary net position 2,368 3,503 462 Plan fiduciary net position - beginning 26,825 23,322 22,860 Plan fiduciary net position - ending (b) 29,193$ 26,825$ 23,322$ Net OPEB liability - ending (a)-(b) 3,652$ 6,609$ 8,803$ Plan fiduciary net position as a percentage of the total OPEB liability 88.88% 80.23% 72.60% Covered employee payroll 79,682$ 81,458$ 60,985$ Net OPEB liability as a percentage of covered employee payroll 4.58% 8.11% 14.43% Notes to Schedule: * Fiscal year 2017/18 was the first year of implementation, therefore only three years of information are shown. Last Ten Fiscal Years* Other Post Employment Benefits Plan 130 476 City of Huntington Beach Required Supplementary Information Schedule of Contributions For the Year Ended June 30, 2020 (in Thousands) 2019-20 1 2018-19 1 2017-18 1, 2 2016-17 1 2015-16 1 2014-15 1 2013-14 1 Actuarially determined contribution 16,878$ 14,819$ 9,734$ 11,921$ 11,238$ 10,510$ 8,685$ Contributions in relation to the actuarially determined contributions (16,878) (14,819) (9,734) (11,921) (11,238) (10,510) (8,685) Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ -$ Covered payroll 45,952$ 45,419$ 33,210$ 45,118$ 44,253$ 46,337$ 43,327$ Contributions as a percentage of covered payroll 36.73% 32.63% 29.31% 26.42% 25.39% 22.68% 20.05% Notes to Schedule Valuation dates: 6/30/2012 through 6/30/2017 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal Amortization method/period Asset valuation method Inflation 2.75% Salary increases Varies by entry age and service Payroll growth Discount Rate Retirement age Mortality 3.00% 7.25%, net of pension plan investment and administrative expenses; includes inflation. On December 21, 2016, the CalPERS Board of Administration lowered the discount rate from 7.50 percent to 7.00 percent using a three year phase-in beginning with the June 30, 2016 actuarial valuations. The discount rate will be lowered to 7.00 percent next year as adopted by the Board. For 10/1/13-6/30/16, the probabilities of retirement are based on the 2014 CalPERS Experience study for the period from 1997 to 2007. For 7/1/16-6/30/19, the probabilities of retirement are based on the 2014 CalPERS Experience study for the period from 1997 to 2011. For 10/1/13-6/30/16, the probabilities of mortality are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. For 7/1/16-6/30/19, the probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. For 7/1/16-6/30/18, Pre-retirement and Post-retirement mortality rates include 5 years of projected mortality improvement using Scale AA published by the Society of Actuaries. For 7/1/18-6/30/19, Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries. *Beginning with the June 30, 2013 valuations, CalPERS employed an amortization and smoothing policy that will pay for all gains and losses over a fixed 30-year period with the increases or decreases in the rate spread directly over a 5-year period. For 10/1/14-6/30/15, 15 Year Smoothed Market (for details, see June 30, 2012 Funding Valuation Report). For 7/1/15- 6/30/20, Fair Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013, 2014, 2015 and 2016). Last Ten Fiscal Years* CalPERS City Miscellaneous Plan - 99 1 Historical information is required only for measurement periods for which GASB 68 is applicable. For details, see Funding Valuation Reports for the years ended June 30, 2012-2017. 2 The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine-month reporting period from October 1, 2017 to June 30, 2018. 131 477 City of Huntington Beach Required Supplementary Information Schedule of Contributions For the Year Ended June 30, 2020 (in Thousands) 2019-20 1 2018-19 1 2017-18 1, 2 2016-17 1 2015-16 1 2014-15 1 2013-14 1 Actuarially determined contribution 25,847$ 23,062$ 15,223$ 19,468$ 19,129$ 18,125$ 14,759$ Contributions in relation to the actuarially determined contributions (25,847) (23,062) (15,223) (19,468) (19,129) (19,125) (14,759) Contribution deficiency (excess)-$ -$ -$ -$ -$ (1,000)$ -$ Covered payroll 43,783$ 43,684$ 31,943$ 43,269$ 42,607$ 44,055$ 41,167$ Contributions as a percentage of covered payroll 59.03% 52.79% 47.66% 44.99% 44.90% 43.41% 35.85% Notes to Schedule Valuation dates: 6/30/2012 through 6/30/2017 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal Amortization method/period Asset valuation method Inflation 2.75% Salary increases Varies by entry age and service Payroll growth Discount Rate Retirement age Mortality For 10/1/14-6/30/15, 15 Year Smoothed Market (for details, see June 30, 2012 Funding Valuation Report). For 7/1/15- 6/30/19, Fair Value (for details, see the Funding Valuation Reports for the years ended June 30, 2013, 2014, 2015, and 2016). 3.00% 2 The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine-month reporting period from October 1, 2017 to June 30, 2018. Last Ten Fiscal Years* 7.25%, net of pension plan investment and administrative expenses; includes inflation. On December 21, 2016, the CalPERS Board of Administration lowered the discount rate from 7.50 percent to 7.00 percent using a three year phase-in beginning with the June 30, 2016 actuarial valuations. The discount rate will be lowered to 7.00 percent next year as adopted by the Board. For 10/1/13-6/30/16, the probabilities of retirement are based on the 2014 CalPERS Experience study for the period from 1997 to 2007. For 7/1/16-6/30/19, the probabilities of retirement are based on the 2014 CalPERS Experience study for the period from 1997 to 2011. For 10/1/13-6/30/16, the probabilities of mortality are based on the 2010 CalPERS Experience Study for the period from 1997 to 2007. For 7/1/16-6/30/19, the probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2011. For 7/1/16-6/30/18, Pre-retirement and Post-retirement mortality rates include 5 years of projected mortality improvement using Scale AA published by the Society of Actuaries. For 7/1/18- 6/30/19, Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvement using Scale BB published by the Society of Actuaries. *Beginning with the June 30, 2013 valuations, CalPERS employed an amortization and smoothing policy that will pay for all gains and losses over a fixed 30-year period with the increases or decreases in the rate spread directly over a 5-year period. CalPERS City Safety Plan - 100 1 Historical information is required only for measurement periods for which GASB 68 is applicable. For details, see Funding Valuation Reports for the years ended June 30, 2012-2017. 132 478 City of Huntington Beach Required Supplementary Information Schedule of Contributions For the Year Ended June 30, 2020 (in Thousands) 2019-20 1 2018-19 1 2017-18 1, 2 2016-17 1 2015-16 1 2014-15 1 2013-14 1 Actuarially determined contribution 1,689$ 2,258$ 2,879$ 3,895$ 3,576$ 3,634$ 4,534$ Contributions in relation to the actuarially determined contributions (3,506) (4,962) (3,507) (5,346) (7,277) (4,678) (4,539) Contribution deficiency (excess)(1,817)$ (2,704)$ (628)$ (1,451)$ (3,701)$ (1,044)$ (5)$ Covered payroll 8,469$ 12,863$ 10,890$ 17,167$ 19,517$ 22,069$ 22,004$ Contributions as a percentage of covered payroll 41.40% 38.58% 32.20% 31.14% 37.29% 21.20% 20.63% Notes to Schedule Valuation date:6/30/2019 9/30/2017 9/30/2017 9/30/2015 9/30/2013 9/30/2013 9/30/2011 Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal, Level Percentage of Payroll Amortization method/period Asset valuation method Inflation 3.00% Salary increases Varies by entry age and service Payroll growth Investment rate of return Retirement age Mortality 2020 2 2019 2 2018 2 2017 2016 2015 2014 Annual Money Weighted Rate of Return, net of investment expense 3.79% 4.79% 4.04% 12.87% 10.20% -2.82% 9.20% 1 Historical information is required only for measurement periods for which GASB 68 is applicable. 2 The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018. Last Ten Fiscal Years* Supplemental Retirement Plan 1 Historical information is required only for measurement periods for which GASB 68 is applicable. Merit - CalPERS 1997-2011 Experience Study plus 3.25% aggregate increase for the October 1, 2013 to June 30, 2018 measurement period. 3% aggregate increase for the July 1, 2018 - June 30, 2019 measurement period. 9/30/12 UAAL: fixed 10-year period, Gains/Losses: fixed 15-year period, Discount rate change loss: 10-year period, 6/30/18 UAAL: fixed 5-year period fresh start. Level dollar amortization. 2 The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine-month reporting period from October 1, 2017 to June 30, 2018. The probabilities of mortality are based on the CalPERS 1997-2011 Experience Study. Pre-retirement and Post-retirement mortality rates include mortality projected fully generational with Scale MP-14, modified to converge to ultimate improvement rates in 2022 for the October 1, 2013 to June 30, 2018 measurem ent period. Mortality projected fully generational with Scale MP - 17 for the July 1, 2019 to June 30, 2020 measurement period. Schedule of Money Weighted Rate of Return 6.5%, net of pension plan investment and administrative expenses, including inflation for the October 1, 2013 to June 30, 2018 measurement period. 6.25%, net of pension plan investment and administrative expenses, for the July 1, 2019 - June 30, 2020 The probabilities of retirement are based on the CalPERS 1997-2011 Experience Study Investment gains/losses spread over a 3-year rolling period 133 479 City of Huntington Beach Required Supplementary Information Schedule of Contributions For the Year Ended June 30, 2020 (in Thousands) Fiscal Year Ended June 30 2020 2019 2018** Actuarially Determined Contribution (ADC)1,793$ 1,746$ 2,022$ Contributions in relation to the ADC (1,959) (2,270) (4,192) Contribution deficiency (excess)(166)$ (524)$ (2,170)$ Covered-employee payroll**76,521$ 79,682$ 59,589$ Contributions as a percentage of covered-employee payroll 2.56%2.85%7.03% Notes to Schedule: Valuation date:6/30/2017 6/30/2017 6/30/2015 Methods and assumptions used to determine contributions: Actuarial Cost Method Entry Age Normal Amortization Method/Period Level percent of payroll over a closed rolling 15-year period Asset Valuation Method Fair value Inflation Payroll Growth 3% per annum, in aggregate Investment Rate of Return Healthcare cost-trend rates 7.0% initial, 1.0% - 2.0% near term increase then decreasing 0.5% per year to trend rate that reflects medical price inflation to an ultimate rate of 4.0% in 2076. Retirement Age Tier 1 employees - 2.5% @55 and Tier 2 employees - 2.0% @62. The probabilities of retirement are based on the 2014 CalPERS Experience Study for the period from 1997-2011. Mortality Pre-retirement mortality probability based on 2014 CalPERS 1997-2011 Experience Study covering CalPERS participants. Post-retirement mortality probability based on CalPERS Experience Study 2007-2011 covering participants in CalPERS. *Historical information is required only for measurement periods for which GASB 75 is applicable. Future years' information will be displayed up to 10 years as information becomes available. ** For the nine-month period ending June 30, 2018. The City changed its fiscal year effective October 1, 2017. 3% for 10/1/17-6/30/18 and 2.75% per annum for 7/1/18-6/30/20. 6% for the October 1, 2017 - June 30, 2018 period. 6.25% for the July 1, 2018 - June 30, 2020. Assumes investing in California Employers' Retiree Benefit Trust asset allocation Strategy 3, moving to Strategy 2 in March 2019. Last Ten Fiscal Years* Other Post Employment Benefits Plan 134 480 THIS PAGE INTENTIONALLY LEFT BLANK 135 481 SUPPLEMENTARY INFORMATION 136 482 THIS PAGE INTENTIONALLY LEFT BLANK 137 483 City of Huntington Beach Other Governmental Funds Special Revenue Funds account for revenues and expenditures legally constrained to a specific purpose.  The Air Quality Fund accounts for revenues from the local agencies used to improve local air quality.  The Development Impact Fee Fund accounts for fees collected for new developments to be used for transportation, park land acquisition and development, library and other public facilities in an effort to mitigate the impacts of those new developments.  The Disability Access Fund accounts for the State Mandated Disability Access Fee (SB 1186) to fund increased training certified access specialist (CASp) services for the public and to facilitate compliance with construction related accessibility requirements.  The Drainage Fund accounts for fees received from developers to construct and maintain the City’s drainage system.  The Fourth of July Parade Fund accounts for the activities of the City’s annual parade.  The Gas Tax Fund accounts for monies allocated under the Streets and Highways Code of California. Expenditures may be made for any street related purpose allowed under the code.  The Housing Residual Receipt Fund accounts for residual receipts received for housing activities.  The Park Acquisition and Development Fund accounts for fees received from developers to develop and maintain the City’s park system.  The Surf City “3” Fund accounts for revenues and expenditures related to a 1% fee on cable television and other video subscription services to fund the purchase and acquisition of capital equipment and facilities necessary to program and broadcast PEG (public, education and government) events on the City’s cable channel.  The ELM Automation Fund accounts for automation fee revenues and Enterprise Land Management (ELM) replacement costs and maintenance expenditures.  The Traffic Congestion Relief Fund accounts for moneys allocated for roadway maintenance as established by Assembly Bill 2928.  The Traffic Impact Fee Fund accounts for moneys received from the traffic impact fee levied on new developments in the City.  The Transportation Fund accounts for moneys received from the countywide half cent sales tax and other specific sources to be spent on transportation related expenditures. Debt Service Funds account for the receipts for and payment of general long-term debt.  The Pension Liability fund accounts for the City’s contribution to its pension plan obligations, as provided by the voter-approved property tax override and other sources of revenue, including the allocable share from Enterprise Funds and Other Governmental Funds.  The Public Financing Authority accounts for the activity of the Huntington Beach Public Financing Authority. Capital Projects Funds account for the acquisition and construction of capital assets other than those financed by proprietary fund types.  The Affordable Housing In-Lieu Fund accounts for the Affordable Housing In-Lieu Fee from developers of housing projects who have elected to pay the fee in-lieu of building the affordable housing in their project.  The Infrastructure Fund records activity for certain designate infrastructure related expenditures.  The Lease Capital Project Fund records activity for capital lease project expenditures.  The Parking In-Lieu Fund records construction activity from developers who pay fees in-lieu of directly providing parking facilities to the City.  The Senior Center Development Fund records construction activity for the Senior Center Development at Central Park.  The Sewer Development Fund accounts for fees received from developers to construct and maintain sewer facilities.  The Technology Fund accounts for technology infrastructure project expenditures 138 484 ASSETS Air Quality Development Impact Fee Disability Access Drainage Fourth of July Parade Gas Tax Cash and Investments 1,194$ 17,036$ 230$ 2,510$ 38$ 6,915$ Taxes Receivable - - - - - 539 Other Receivables 68 60 1 9 - 24 Total Assets 1,262$ 17,096$ 231$ 2,519$ 38$ 7,478$ LIABILITIES Accounts Payable -$ 50$ -$ -$ -$ 364$ Accrued Payroll - 7 - - - 8 Total Liabilities - 57 - - - 372 FUND BALANCES Restricted Pollution Remediation - - - - - - Highways, Streets and Transportation - - - - - 7,106 Low Income Housing - - - - - - Air Quality 1,262 - - - - - Other Capital Projects - 17,039 - 2,519 - - Other Purposes - - 231 - 38 - Committed Parks - - - - - - Total Fund Balances 1,262 17,039 231 2,519 38 7,106 Total Liabilities and Fund Balances 1,262$ 17,096$ 231$ 2,519$ 38$ 7,478$ CITY OF HUNTINGTON BEACH COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS June 30, 2020 (In Thousands) 139 485 Housing Residual Receipt Park Acquisition and Development Surf City "3" ELM Automation Fund Traffic Congestion Relief Traffic Impact Fee Transportation Total Special Revenue Funds 1,214$ 2,395$ 1,165$ 365$ 2,039$ 2,897$ 2,085$ 40,083$ - - 136 - - - 423 1,098 4 8 4 1 6 10 7 202 1,218$ 2,403$ 1,305$ 366$ 2,045$ 2,907$ 2,515$ 41,383$ -$ 97$ 13$ -$ 262$ 167$ 56$ 1,009$ - - - 6 - - 39 60 - 97 13 6 262 167 95 1,069 - 355 - - - - - 355 - - - - 1,783 2,740 2,420 14,049 1,218 - - - - - - 1,218 - - - - - - - 1,262 - - - - - - - 19,558 - - 1,292 360 - - - 1,921 - 1,951 - - - - - 1,951 1,218 2,306 1,292 360 1,783 2,740 2,420 40,314 1,218$ 2,403$ 1,305$ 366$ 2,045$ 2,907$ 2,515$ 41,383$ OTHER GOVERNMENTAL FUNDS COMBINING BALANCE SHEET CITY OF HUNTINGTON BEACH (In Thousands) June 30, 2020 (continued) SPECIAL REVENUE FUNDS 140 486 ASSETS Pension Liability Public Financing Authority Total Debt Service Fund Affordable Housing In-Lieu Infrastructure Cash and Investments 7,860$ 4,502$ 12,362$ 1,203$ 12,311$ Cash and Investments with Fiscal Agent - 4,610 4,610 - - Taxes Receivable - - - - - Other Receivables - 16 16 4 43 Total Assets 7,860$ 9,128$ 16,988$ 1,207$ 12,354$ LIABILITIES Accounts Payable -$ 2$ 2$ 75$ 197$ Accrued Payroll - - - - - Total Liabilities - 2 2 75 197 FUND BALANCES Restricted Pollution Remediation - - - - - Debt Service 7,860 9,126 16,986 - - Highways, Streets and Transportation - - - - - Low Income Housing - - - 1,132 - Air Quality - - - - - Other Capital Projects - - - - - Other Purposes - - - - - Committed Parks - - - - - Other Capital Projects - - - - 12,157 Assigned Capital Improvement Reserve - - - - - Total Fund Balances 7,860 9,126 16,986 1,132 12,157 7,860$ 9,128$ 16,988$ 1,207$ 12,354$ (continued) Total Liabilities, Deferred Inflows of Resources and Fund Balances CITY OF HUNTINGTON BEACH COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2020 (In Thousands) DEBT SERVICE FUNDS CAPITAL PROJECT FUNDS 141 487 Lease Capital Project Parking In-Lieu Senior Center Development Sewer Development Technology Total Capital Projects Funds Total Other Governmental Funds 3$ 540$ 16$ 7,062$ 3,515$ 24,650$ 77,095$ 1,175 - - - - 1,175 5,785 - - - - - - 1,098 - 3 - 25 12 87 305 1,178$ 543$ 16$ 7,087$ 3,527$ 25,912$ 84,283$ - -$ -$ 3$ -$ 275$ 1,286$ - - - - - - 60 - - - 3 - 275 1,346 - - - - - - 355 - - - - - - 16,986 - - - - - - 14,049 - - - - - 1,132 2,350 - - - - - - 1,262 1,178 - 16 - - 1,194 20,752 - - - - - - 1,921 - - - - - - 1,951 - 543 - 7,084 - 19,784 19,784 - - - - 3,527 3,527 3,527 1,178 543 16 7,084 3,527 25,637 82,937 1,178$ 543$ 16$ 7,087$ 3,527$ 25,912$ 84,283$ CITY OF HUNTINGTON BEACH COMBINING BALANCE SHEET OTHER GOVERNMENTAL FUNDS June 30, 2020 (In Thousands) CAPITAL PROJECT FUNDS (continued) 142 488 REVENUES Air Quality Development Impact Fee Disability Access Drainage Fourth of July Parade Gas Tax Sales Taxes -$ -$ -$ -$ -$ -$ Other Taxes - - - - - 6,538 Licenses and Permits - - 74 - - - Use of Money and Property 35 496 7 74 122 188 Intergovernmental 258 - - - 11 - Charges for Current Service - 775 - 704 84 - Other - 17 - - 41 - Total Revenues 293 1,288 81 778 258 6,726 EXPENDITURES Current: City Manager - - - - - - Community Development - - - - - - Finance - - 12 - - - Information Systems - - - - - - Community Services - 2,950 - - 368 - Library Services - 157 - - - - Public Works 102 - - - - 6,451 Total Expenditures 102 3,107 12 - 368 6,451 Net Change in Fund Balances 191 (1,819) 69 778 (110) 275 Fund Balances - Beginning Of Year 1,071 18,858 162 1,741 148 6,831 Fund Balances - End Of Year 1,262$ 17,039$ 231$ 2,519$ 38$ 7,106$ CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) SPECIAL REVENUE FUNDS OTHER GOVERNMENTAL FUNDS 143 489 Housing Residual Receipt Park Acquisition and Development Surf City "3" ELM Automation Fund Traffic Congestion Relief Traffic Impact Fee Transportation Total Special Revenue Funds -$ -$ -$ -$ -$ -$ 3,553$ 3,553$ - - 541 - - - - 7,079 - - - - - - - 74 33 70 37 11 58 84 62 1,277 - - - - 1,634 - - 1,903 - - - 415 - 564 - 2,542 797 - 1,000 - - - - 1,855 830 70 1,578 426 1,692 648 3,615 18,283 - - 286 - - - - 286 44 - - - - - - 44 - - - - - - - 12 - - - 360 - - - 360 - 1,203 - - - - - 4,521 - - - - - - - 157 - - - - 1,152 2,157 3,156 13,018 44 1,203 286 360 1,152 2,157 3,156 18,398 786 (1,133) 1,292 66 540 (1,509) 459 (115) 432 3,439 - 294 1,243 4,249 1,961 40,429 1,218$ 2,306$ 1,292$ 360$ 1,783$ 2,740$ 2,420$ 40,314$ CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) SPECIAL REVENUE FUNDS 144 490 REVENUES Pension Liability Public Financing Authority Total Debt Service Funds Affordable Housing In-Lieu Infrastructure Property Taxes 6,766$ -$ 6,766$ -$ -$ Sales Taxes - - - - - Other Taxes - - - - - Licenses and Permits - - - 2,806 - Use of Money and Property - 95 95 125 330 Intergovernmental - - - - - Charges for Current Service 1,094 - 1,094 - - Other - - - - 10 Total Revenues 7,860 95 7,955 2,931 340 EXPENDITURES Current: City Manager - - - - - Community Development - - - 2,266 - Finance - 9 9 - - Information Systems - - - - - Community Services - - - - 35 Library Services - - - - - Public Works - - - - 3,046 Debt Service:- Principal - 3,485 3,485 - - Interest - 1,521 1,521 - - Total Expenditures - 5,015 5,015 2,266 3,081 Excess Of Revenues Over (Under) Expenditures 7,860 (4,920) 2,940 665 (2,741) Other Financing Sources (Uses): Transfers In - 5,016 5,016 - 4,785 Issuance of Long-Term Debt - - - - - Transfers Out - - - - - Total Other Financing Sources Sources (Uses)- 5,016 5,016 - 4,785 Net Change in Fund Balances 7,860 96 7,956 665 2,044 Fund Balances - Beginning of Year - 9,030 9,030 467 10,113 Fund Balances - End of Year 7,860$ 9,126$ 16,986$ 1,132$ 12,157$ CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES CAPITAL PROJECT FUNDS OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) (continued) DEBT SERVICE FUNDS 145 491 Lease Capital Project Parking In-Lieu Senior Center Development Sewer Development Technology Total Capital Projects Funds Total Other Governmental Funds -$ -$ -$ -$ -$ -$ 6,766$ - - - - - - 3,553 - - - - - - 7,079 - 18 - - - 2,824 2,898 5 - 8 208 109 785 2,157 - - - 12 - 12 1,915 - - - 386 - 386 4,022 - - - - - 10 1,865 5 18 8 606 109 4,017 30,255 - - - - - - 286 - - - - - 2,266 2,310 - - - - - - 21 - - - - 196 196 556 - - - - - 35 4,556 - - - - - - 157 - - 315 85 - 3,446 16,464 - - - - - - 3,485 9 - - - - 9 1,530 9 - 315 85 196 5,952 29,365 (4) 18 (307) 521 (87) (1,935) 890 - - - - - 4,785 9,801 1,172 - - - - 1,172 1,172 - - (515) - - (515) (515) 1,172 - (515) - - 5,442 10,458 1,168 18 (822) 521 (87) 3,507 11,348 10 525 838 6,563 3,614 22,130 71,589 1,178$ 543$ 16$ 7,084$ 3,527$ 25,637$ 82,937$ CAPITAL PROJECT FUNDS CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) (continued) 146 492 REVENUES:Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 35$ 35$ Intergovernmental 240 240 258 18 TOTAL REVENUES 240 240 293 53 EXPENDITURES: Current: Public Works 139 884 102 782 NET CHANGE IN FUND BALANCE 101 (644) 191 835 Fund Balance - Beginning of Year 1,071 1,071 1,071 - Fund Balance - End of Year 1,172$ 427$ 1,262$ 835$ REVENUES:Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 496$ 496$ Charges for Current Service 3,323 3,323 775 (2,548) Other Revenue - - 17 17 TOTAL REVENUES 3,323 3,323 1,288 (2,035) EXPENDITURES: Current: Fire 620 620 - 620 Community Services 4,144 6,481 2,950 3,531 Library Services 200 200 157 43 Principal 11 11 - 11 TOTAL EXPENDITURES 4,975 7,312 3,107 4,205 NET CHANGE IN FUND BALANCE (1,652) (3,989) (1,819) 2,170 Fund Balance - Beginning of Year 18,858 18,858 18,858 - Fund Balance - End of Year 17,206$ 14,869$ 17,039$ 2,170$ REVENUES:Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Licenses and Permits 84$ 84$ 74$ (10)$ Use of Money and Property - - 7 7 TOTAL REVENUES 84 84 81 (3) EXPENDITURES: Current: Finance 84 84 12 72 NET CHANGE IN FUND BALANCE - - 69 69 Fund Balance - Beginning of Year 162 162 162 - Fund Balance - End of Year 162$ 162$ 231$ 69$ CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) Air Quality Development Impact Fee Disability Access 147 493 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) From Use of Money and Property -$ -$ 74$ 74$ Charges for Current Service - - 704 704 TOTAL REVENUES - - 778 778 EXPENDITURES: Current: Public Works - - - - NET CHANGE IN FUND BALANCE - - 778 778 Fund Balance - Beginning of Year 1,741 1,741 1,741 - Fund Balance - End of Year 1,741$ 1,741$ 2,519$ 778$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property 120$ 120$ 122$ 2$ Intergovernmental 65 65 11 (54) Charges for Current Service 139 139 84 (55) Other 96 96 41 (55) TOTAL REVENUES 420 420 258 (162) EXPENDITURES: Current: Community Services 420 490 368 122 NET CHANGE IN FUND BALANCE - (70) (110) (40) Fund Balance - Beginning of Year 148 148 148 - Fund Balance - End of Year 148$ 78$ 38$ (40)$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 188$ 188$ Other Taxes 6,709 6,709 6,538 (171) TOTAL REVENUES 6,709 6,709 6,726 17 EXPENDITURES: Current: Public Works 6,504 13,102 6,451 6,651 NET CHANGE IN FUND BALANCE 205 (6,393) 275 6,668 Fund Balance - Beginning of Year 6,831 6,831 6,831 - Fund Balance - End of Year 7,036$ 438$ 7,106$ 6,668$ (In Thousands) Fourth of July Parade Drainage Gas Tax CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 148 494 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 33$ 33$ Other 475 475 797 322 TOTAL REVENUES 475 475 830 355 EXPENDITURES: Current: Community Development 50 50 44 6 NET CHANGE IN FUND BALANCE 425 425 786 361 Fund Balance - Beginning of Year 432 432 432 - Fund Balance - End of Year 857$ 857$ 1,218$ 361$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 70$ 70$ Charges for Current Service 65 65 - (65) TOTAL REVENUES 65 65 70 5 EXPENDITURES: Current: Community Services 418 2,414 1,203 1,211 NET CHANGE IN FUND BALANCE (353) (2,349) (1,133) 1,216 Fund Balance - Beginning of Year 3,439 3,439 3,439 - Fund Balance - End of Year 3,086$ 1,090$ 2,306$ 1,216$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Other Taxes 605$ 605$ 541$ (64)$ Use of Money and Property - - 37 37 Other - - 1,000 1,000 TOTAL REVENUES 605 605 1,578 973 EXPENDITURES: Current: City Manager 605 605 286 319 NET CHANGE IN FUND BALANCE - - 1,292 1,292 Fund Balance - Beginning of Year - - - - Fund Balance - End of Year -$ -$ 1,292$ 1,292$ FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) Surf City "3" CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL OTHER GOVERNMENTAL FUNDS Housing Residual Receipt Park Acquisition and Development 149 495 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) From Use of Money and Property -$ -$ 11$ 11$ Charges for Current Service 360 360 415 55 TOTAL REVENUES 360 360 426 66 EXPENDITURES: Current: Information Systems 360 360 360 - NET CHANGE IN FUND BALANCE - - 66 66 Fund Balance - Beginning of Year 294 294 294 - Fund Balance - End of Year 294$ 294$ 360$ 66$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 58$ 58$ Intergovernmental 1,957 1,957 1,634 (323) TOTAL REVENUES 1,957 1,957 1,692 (265) EXPENDITURES: Current: Public Works 1,727 2,925 1,152 1,773 NET CHANGE IN FUND BALANCE 230 (968) 540 1,508 Fund Balance - Beginning of Year 1,243 1,243 1,243 - Fund Balance - End of Year 1,473$ 275$ 1,783$ 1,508$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 84$ 84$ Charges for Current Service - - 564 564 TOTAL REVENUES - - 648 648 EXPENDITURES: Current: Public Works - 2,684 2,157 527 NET CHANGE IN FUND BALANCE - (2,684) (1,509) 1,175 Fund Balance - Beginning of Year 4,249 4,249 4,249 - Fund Balance - End of Year 4,249$ 1,565$ 2,740$ 1,175$ ELM Automation Fund Traffic Congestion Relief Traffic Impact Fee CITY OF HUNTINGTON BEACH (In Thousands) SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 150 496 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Sales Taxes 3,514$ 3,514$ 3,553$ 39$ Use of Money and Property - - 62 62 TOTAL REVENUES 3,514 3,514 3,615 101 EXPENDITURES: Current: Public Works 3,181 4,561 3,156 1,405 NET CHANGE IN FUND BALANCE 333 (1,047) 459 1,506 Fund Balance - Beginning of Year 1,961 1,961 1,961 - Fund Balance - End of Year 2,294$ 914$ 2,420$ 1,506$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Property Taxes -$ 6,228$ 6,766$ 538$ Charges for Current Service - - 1,094 1,094 TOTAL REVENUES - 6,228 7,860 1,632 EXPENDITURES: TOTAL EXPENDITURES - - - - NET CHANGE IN FUND BALANCE - 6,228 7,860 1,632 Fund Balance - Beginning of Year - - - - Fund Balance - End of Year -$ 6,228$ 7,860$ 1,632$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 95$ 95$ EXPENDITURES: Current: Finance 10 11 9 2 Debt Service: Principal 3,485 3,485 3,485 - Interest 1,521 1,521 1,521 - TOTAL EXPENDITURES 5,016 5,017 5,015 2 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (5,016) (5,017) (4,920) 97 OTHER FINANCING SOURCES (USES): Transfers In 5,016 5,016 5,016 - NET CHANGE IN FUND BALANCE - (1) 96 97 Fund Balance - Beginning of Year 9,030 9,030 9,030 - Fund Balance - End of Year 9,030$ 9,029$ 9,126$ 97$ Pension Liability FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL Transportation Public Financing Authority OTHER GOVERNMENTAL FUNDS 151 497 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Licenses and Permits 100$ 100$ 2,806$ 2,706$ Use of Money and Property - - 125 125 TOTAL REVENUES 100 100 2,931 2,831 EXPENDITURES: Current: Community Development 300 2,567 2,266 301 NET CHANGE IN FUND BALANCE (200) (2,467) 665 3,132 Fund Balance - Beginning of Year 467 467 467 - Fund Balance - End of Year 267$ (2,000)$ 1,132$ 3,132$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 330$ 330$ Other - - 10 10 TOTAL REVENUES - - 340 340 EXPENDITURES: Current: Community Services 250 309 35 274 Public Works 2,805 7,691 3,046 4,645 Principal 945 945 - 945 TOTAL EXPENDITURES 4,000 8,945 3,081 5,864 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (4,000) (8,945) (2,741) 6,204 OTHER FINANCING SOURCES (USES): Transfers In 4,000 4,785 4,785 - NET CHANGE IN FUND BALANCE - (4,160) 2,044 6,204 Fund Balance - Beginning of Year 10,113 10,113 10,113 - Fund Balance - End of Year 10,113$ 5,953$ 12,157$ 6,204$ FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL OTHER GOVERNMENTAL FUNDS Affordable Housing In-Lieu Infrastructure 152 498 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 5$ 5$ EXPENDITURES: Fire - 1,180 - 1,180 Debt Service: Interest - - 9 (9) TOTAL EXPENDITURES - 1,180 9 1,171 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - (1,180) (4) 1,176 OTHER FINANCING SOURCES (USES): Issuance of Long-Term Debt - 1,173 1,172 (1) TOTAL OTHER FINANCING SOURCES (USES) - 1,173 1,172 (1) NET CHANGE IN FUND BALANCE - (7) 1,168 1,175 Fund Balance - Beginning of Year 10 10 10 - Fund Balance - End of Year 10$ 3$ 1,178$ 1,175$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Licenses and Permits 68$ 68$ 18$ (50)$ EXPENDITURES: Current: Economic Development 60 60 - 60 NET CHANGE IN FUND BALANCE 8 8 18 10 Fund Balance - Beginning of Year 525 525 525 - Fund Balance - End of Year 533$ 533$ 543$ 10$ CHANGES IN FUND BALANCES - BUDGET AND ACTUAL OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) Parking In-Lieu CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND Lease Capital Project 153 499 REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 8$ 8$ EXPENDITURES: Current: Public Works - 320 315 5 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES - (320) (307) 13 OTHER FINANCING SOURCES (USES): Transfers Out - (515) (515) - TOTAL OTHER FINANCING SOURCES (USES) - (515) (515) - NET CHANGE IN FUND BALANCE - (835) (822) 13 Fund Balance - Beginning of Year 838 838 838 - Fund Balance - End of Year 838$ 3$ 16$ 13$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property -$ -$ 208$ 208$ Intergovernmental - - 12 12 Charges for Current Service 150 150 386 236 TOTAL REVENUES 150 150 606 456 EXPENDITURES: Current: Public Works 2,500 5,005 85 4,920 NET CHANGE IN FUND BALANCE (2,350) (4,855) 521 5,376 Fund Balance - Beginning of Year 6,563 6,563 6,563 - Fund Balance - End of Year 4,213$ 1,708$ 7,084$ 5,376$ REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property - - 109 109 EXPENDITURES: Current: Information Systems 616 616 196 420 NET CHANGE IN FUND BALANCE (616) (616) (87) 529 Fund Balance - Beginning of Year 3,614 3,614 3,614 - Fund Balance - End of Year 2,998$ 2,998$ 3,527$ 529$ Technology Sewer Development Senior Center Development CITY OF HUNTINGTON BEACH SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL OTHER GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) 154 500 LMIHAF Capital Projects Fund REVENUES: Original Budget Final Budget Actual Variance with Final Budget Positive (Negative) Use of Money and Property 406$ 406$ 5,688$ 5,282$ EXPENDITURES: Current: Community Development 411 4,606 1,339 3,267 Excess of Revenues Over (Under) Expenditures (5) (4,200) 4,349 8,549 OTHER FINANCING SOURCES (USES): Transfers Out (405) (405) (405) - Total Other Financing Sources (Uses) (405) (405) (405) - Net Change in Fund Balance (410) (4,605) 3,944 8,549 Fund Balance - Beginning of Year 5,541 5,541 5,541 - Fund Balance - End of Year 5,131$ 936$ 9,485$ 8,549$ CITY OF HUNTINGTON BEACH (In Thousands) SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2020 155 501 THIS PAGE INTENTIONALLY LEFT BLANK 156 502 7+,63$*(,17(17,21$//</()7%/$1. 157 503 City of Huntington Beach Internal Service Funds Internal Services Funds are used to accumulate and allocate costs internally among the City’s various functions.  The Self Insurance Workers’ Comp Fund accounts for the City’s self insurance workers’ compensation program.  The Self Insurance General Liability Funds accounts for the City’s self insurance general liability program.  The Equipment Replacement Fund accounts for the City’s equipment replacement needs. 158 504 THIS PAGE INTENTIONALLY LEFT BLANK 159 505 Self Insurance Workers' Comp Self Insurance General Liability Equipment Replacement Fund Internal Service Fund Total ASSETS Current Assets: Cash and Investments 16,369$ 15,718$ 6,839$ 38,926$ Other Receivables, Net 55 55 24 134 Prepaids 600 - - 600 Total Current Assets 17,024 15,773 6,863 39,660 Capital Assets: Machinery and Equipment - - 4,871 4,871 Less Accumulated Depreciation - - (813) (813) Total Capital Assets - - 4,058 4,058 Total Assets 17,024 15,773 10,921 43,718 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows Related to Pensions 141 - - 141 Deferred Outflows Related to Other Postemployment Benefits 11 5 - 16 Total Deferred Outflows of Resources 152 5 - 157 LIABILITIES Current Liabilities: Accounts Payable 304 132 102 538 Accrued Payroll 23 - - 23 Current Portion of Claims Payable 5,650 3,252 - 8,902 Current Portion of Compensated Absences 12 - - 12 Total Current Liabilities 5,989 3,384 102 9,475 Non-Current Liabilities: Compensated Absences 32 - - 32 Net Pension Liability 1,328 - - 1,328 Net Other Postemployment Benefits Liability 12 5 - 17 Claims Payable 23,956 4,297 - 28,253 Total Non-Current Liabilities 25,328 4,302 - 29,630 Total Liabilities 31,317 7,686 102 39,105 DEFERRED INFLOWS OF RESOURCES Deferred Inflows Related to Pensions 29 - - 29 Deferred Inflows Related to Other Postemployment Benefits 10 4 - 14 Total Deferred Inflows of Resources 39 4 - 43 NET POSITION Net Investment in Capital Assets - - 4,058 4,058 Unrestricted (14,180) 8,088 6,761 669 Total Net Position (14,180)$ 8,088$ 10,819$ 4,727$ Governmental Activities CITY OF HUNTINGTON BEACH STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS June 30, 2020 (In Thousands) 160 506 . Self Insurance Workers' Comp Self Insurance General Liability Equipment Replacement Fund Internal Service Fund Total OPERATING REVENUES Fees and Charges for Service 7,187$ 4,977$ 4,651$ 16,815$ Other 75 - - 75 Total Operating Revenues 7,262 4,977 4,651 16,890 OPERATING EXPENSES Supplies and Operations 1,790 875 2,191 4,856 Claims and Judgments 7,969 3,075 - 11,044 Depreciation - - 518 518 Total Operating Expenses 9,759 3,950 2,709 16,418 Operating Income (2,497) 1,027 1,942 472 NON-OPERATING REVENUES (EXPENSES) Interest Income 510 379 155 1,044 Change in Net Position (1,987) 1,406 2,097 1,516 Net Position - Beginning Of Year (12,193) 6,682 8,722 3,211 Net Position- End Of Year (14,180)$ 8,088$ 10,819$ 4,727$ CITY OF HUNTINGTON BEACH STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) Governmental Activities 161 507 Self Insurance Workers' Comp Self Insurance General Liability Equipment Replacement Fund Internal Service Fund Total CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from Customers and Users 7,275$ 4,992$ 4,655$ 16,922$ Cash Paid to Employees for Services (540) (141) - (681) Cash Paid to Suppliers of Goods and Services (5,992) (4,607) (1,584) (12,183) Net Cash and Investment Provided by Operating Activities 743 244 3,071 4,058 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of Capital Assets - - (2,402) (2,402) Net Cash and Investments (Used) by Capital and Related Financing Activities - - (2,402) (2,402) CASH FLOWS FROM INVESTING ACTIVITIES Interest Received 510 379 155 1,044 Net Cash and Investments Provided by Investing Activities 510 379 155 1,044 Net Increase in Cash and Investments 1,253 623 824 2,700 Cash and Investments - Beginning of Year 15,116 15,095 6,015 36,226 Cash and Investments - End of Year 16,369$ 15,718$ 6,839$ 38,926$ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH AND INVESTMENTS PROVIDED (USED) BY OPERATING ACTIVITIES Operating (Loss) (2,497)$ 1,027$ 1,942$ 472$ Adjustments to Reconcile Operating Income (Loss) to Net Cash and Investments Provided (Used) by Operating Activities Depreciation - - 518 518 Decrease in Other Receivables, Net 13 15 4 32 Decrease in Prepaids - - 818 818 Increase (Decrease) in Accounts Payable 163 89 (211) 41 Increase (Decrease) in Accrued Payroll 10 (7) - 3 Increase (Decrease) in Claims Payable 2,977 (848) - 2,129 Increase (Decrease) in Compensated Absences 19 (30) - (11) Decrease in Deferred Pension Outflow 24 - - 24 (Decrease) in Deferred Pension Inflow (8) - - (8) Increase in Net Pension Liability 44 - - 44 (Increase) in Deferred Other Postemployment Benefits Outflow (2) (1) - (3) Increase in Deferred Other Postemployment Benefits Inflow 10 4 - 14 (Decrease) in Ending Net Other Postemployment Benefits Liability (10) (5) - (15) Net Cash and Investments Provided by Operating Activities 743$ 244$ 3,071$ 4,058$ NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES There were no noncash investing, capital, or financing activities during the year ended June 30, 2020. Governmental Activities CITY OF HUNTINGTON BEACH STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (In Thousands) 162 508 7+,63$*(,17(17,21$//</()7%/$1. 163 509 City of Huntington Beach Fiduciary Funds Fiduciary Funds account for assets held by the City as an agent for other organizations or individuals.  The General Deposit Fund accounts for the deposit of general monies held by the City for private individuals and businesses.  The Community Facilities Districts Funds accounts for the debt service activity of the City’s community facilities district.  The Huntington Beach Business Improvement District Fund accounts for the activities of the City’s business improvement district.  The Central Net Fund accounts for the activity of the Central Net Operations Authority.  The Parking Structures Fund accounts for the activities of the Bella Terra Parking Structure and Strand Parking Structure.  The West Orange County Water Board Fund accounts for the activities of the West Orange County Water Board. 164 510 7+,63$*(,17(17,21$//</()7%/$1. 165 511 CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF FIDUCIARY FUND ASSETS AND LIABILITIES FIDUCIARY FUNDS JUNE 30, 2020 Agency Funds Assets: General Deposit Community Facilities Districts Business Improvement Districts Central Net Operations Authority Parking Structures West Orange County Water Board Total Agency Funds Cash and Investments 181$ 2,667$ 321$ $ 351 $ 4,828 $ 1,460 $ 9,808 Cash with Fiscal Agent - 3,449 - - - - 3,449 Accounts Receivable, Net - - 534 - 17 6 557 Total Assets 181$ 6,116$ 855$ 351$ 4,845$ 1,466$ 13,814$ Liabilities: Accounts Payable -$ -$ 231$ 3$ $ 858 $ 4 $ 1,096 Accrued Payroll - - - 9 - - 9 Due to Bondholders - 6,116 - - - - 6,116 Held for Others 181 - 624 339 3,987 1,462 6,593 Total Liabilities 181$ 6,116$ 855$ $ 351 $ 4,845 $ 1,466 $ 13,814 166 512 CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 Balance June 30, 2019 Additions Deletions Balance June 30, 2020 General Deposit Assets: Cash and Investments 181$ -$ -$ 181$ Total Assets 181$ -$ -$ 181$ Liabilities: Held for Others 181$ -$ -$ 181$ Total Liabilities 181$ -$ -$ 181$ Community Facilities Districts Assets: Cash and Investments 2,740$ 4,035$ (4,108)$ 2,667$ Cash with Fiscal Agent 3,451 57 (59) 3,449 Accounts Receivable, Net 13 4 (17) - Total Assets 6,204$ 4,096$ (4,184)$ 6,116$ Liabilities: Accounts Payable -$ 3,245$ (3,245)$ -$ Due to Bondholders 6,204 - (88) 6,116 Total Liabilities 6,204$ 3,245$ (3,333)$ 6,116$ Business Improvement Districts Assets: Cash and Investments 1,079$ 4,865$ (5,623)$ 321$ Accounts Receivable, Net 544 628 (638) 534 Total Assets 1,623$ 5,493$ (6,261)$ 855$ Liabilities: Accounts Payable 1,565$ 5,787$ (7,121)$ 231$ Held for Others 58 566 - 624 Total Liabilities 1,623$ 6,353$ (7,121)$ 855$ Central Net Operations Authority Assets: Cash and Investments 303$ 32,767$ (32,719)$ 351$ Accounts Receivable, Net 82 50 (132) - Total Assets 385$ 32,817$ (32,851)$ 351$ Liabilities: Accounts Payable 1$ 46$ (44)$ 3$ Accrued Payroll 8 9 (8) 9 Held for Others 376 - (37) 339 Total Liabilities 385$ 55$ (89)$ 351$ 167 513 CITY OF HUNTINGTON BEACH COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIES ALL AGENCY FUNDS FOR THE YEAR ENDED JUNE 30, 2020 (CONTINUED) Balance June 30, 2019 Additions Deletions Balance June 30, 2020 Parking Structures Assets: Cash and Investments 4,402$ 2,214$ (1,788)$ 4,828$ Accounts Receivable, Net 21 17 (21) 17 Total Assets 4,423$ 2,231$ (1,809)$ 4,845$ Liabilities: Accounts Payable 459$ 2,222$ (1,823)$ 858$ Held for Others 3,964 23 - 3,987 Total Liabilities 4,423$ 2,245$ (1,823)$ 4,845$ West Orange County Water Board Assets: Cash and Investments 1,874$ 2,771$ (3,185)$ 1,460$ Accounts Receivable, Net 10 163 (167) 6 Total Assets 1,884$ 2,934$ (3,352)$ 1,466$ Liabilities: Accounts Payable 265$ 1,022$ (1,283)$ 4$ Held for Others 1,619 - (157) 1,462 Total Liabilities 1,884$ 1,022$ (1,440)$ 1,466$ Total - All Agency Funds Assets: Cash and Investments 10,579$ 46,652$ (47,423)$ 9,808$ Cash with Fiscal Agent 3,451 57 (59) 3,449 Accounts Receivable, Net 670 862 (975) 557 Total Assets 14,700$ 47,571$ (48,457)$ 13,814$ Liabilities: Accounts Payable 2,290$ 12,322$ (13,516)$ 1,096$ Accrued Payroll 8 9 (8) 9 Due to Bondholders 6,204 - (88) 6,116 Held for Others 6,198 589 (194) 6,593 Total Liabilities 14,700$ 12,920$ (13,806)$ 13,814$ 168 514 7+,63$*(,17(17,21$//</()7%/$1. 169 515 City of Huntington Beach Statistical Section This part of the City of Huntington Beach’s Comprehensive Annual Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the City’s overall financial health. Financial Trends – contain trend information to help the reader understand how the City’s financial performance has changed over time. Revenue Capacity – contains information to help the reader assess the City’s most significant local revenue source, the property tax. Debt Capacity – presents information to assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. Demographic and Economic Information – offers information to help the reader understand the environment within which the City’s financial activities take place. Operating Information – contains service and infrastructure data to help the reader understand how the City’s financial report relates to the services the City provides and the activities it performs. Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 170 516 Governmental Activities 2020 2019 2018***2017 2016 Net investment in capital assets 673,498$ 664,281$ 650,466$ 646,336$ 624,180$ Restricted 79,926 66,089 58,537 41,888 41,555 Unrestricted (274,523) (251,022) (254,528) (262,874) (222,863) Total Governmental Activities Net Position 478,901$ 479,348$ 454,475$ 425,350$ 442,872$ Business-Type Activities Net investment in capital assets 142,785$ 145,696$ 143,954$ 140,478$ 142,566$ Restricted 22,248 21,153 25,886 30,444 32,049 Unrestricted 38,482 36,747 27,492 22,228 21,997 Total Business-Type Activities Net Position 203,515$ 203,596$ 197,332$ 193,150$ 196,612$ Primary Government Net investment in capital assets 816,283$ 809,977$ 794,420$ 786,814$ 766,746$ Restricted 102,174 87,242 84,423 72,332 73,604 Unrestricted (236,041) (214,275) (227,036) (240,646) (200,866) Total Primary Government Net Position 682,416$ 682,944$ 651,807$ 618,500$ 639,484$ Expenses: Governmental Activities: 2020 2019 2018*** 2017 2016 City Council 405$ 360$ 218$ 347$ 321$ City Manager 3,328 4,501 2,063 4,691 3,849 City Treasurer 317 246 101 216 208 City Attorney 3,136 2,886 1,536 3,307 2,598 City Clerk 949 976 475 889 806 Finance 6,661 6,245 3,455 6,201 5,765 Human Resources***** - 6,261 4,760 5,693 6,814 Community Development* 15,722 6,144 4,301 7,576 7,208 Fire 62,840 56,494 26,688 52,941 47,965 Information Services 8,643 7,530 4,375 7,047 6,852 Police 97,204 87,355 42,109 84,786 74,943 Economic Development** - - - - - Community Services 12,539 13,369 6,768 15,558 9,935 Library Services 5,776 5,206 2,890 5,064 4,611 Public Works 45,834 40,803 23,898 35,373 31,791 Non-Departmental**** - - 18,164 29,368 35,240 Interest on Long-Term Debt 1,686 1,823 1,467 2,063 2,119 Total Governmental Activities 265,040 240,199 143,268 261,120 241,025 Business-Type Activities Water Utility 44,463 43,405 28,414 45,940 41,643 Sewer Service 9,828 9,442 6,127 9,351 8,729 Refuse Collection 12,609 12,051 8,916 10,821 11,277 Hazmat Service 235 234 117 224 244 Total Business-Type Activities 67,135 65,132 43,574 66,336 61,893 Total Business and Government Type Activities 332,175$ 305,331$ 186,842$ 327,456$ 302,918$ * Planning and Building departments were combined in the year ended September 30, 2011. The combined department was later renamed to Community Development in the year ended September 30, 2016. ** Economic Development was combined with Community Development in the year ended June 30, 2020. Previously, it was combined with the City Manager's Office as of the year ended September 30, 2014. *** The 2018 period reflects nine months of activity only as the fiscal year change resulted in reporting period from October 1, 2017 to June 30, 2018. **** Beginning with the fiscal year ended June 30, 2019, non-departmental expenditures are no longer presented separately but are included as part of functional expenditures. ***** Human Resources was combined with the City Manager's Office in the year ended June 30, 2020. CITY OF HUNTINGTON BEACH CITY OF HUNTINGTON BEACH Fiscal Year Ended (In Thousands) NET POSITION BY COMPONENT - LAST TEN FISCAL YEARS September 30, June 30, September 30, June 30, CHANGES IN NET POSITION - LAST TEN FISCAL YEARS (In Thousands) Fiscal Year Ended 171 517 Governmental Activities 2015 2014 2013 2012 2011 Net investment in capital assets 615,512$ 618,825$ 617,267$ 612,346$ 569,497$ Restricted 52,270 34,018 51,867 44,220 51,195 Unrestricted (222,787) 89,524 54,076 53,098 41,239 Total Governmental Activities Net Position 444,995$ 742,367$ 723,210$ 709,664$ 661,931$ Business-Type Activities Net investment in capital assets 142,616$ 140,770$ 145,886$ 134,129$ 134,882$ Restricted 28,096 27,951 27,488 27,804 27,988 Unrestricted 28,476 53,166 65,595 63,686 59,260 Total Business-Type Activities Net Position 199,188$ 221,887$ 238,969$ 225,619$ 222,130$ Primary Government Net investment in capital assets 758,128$ 759,595$ 763,153$ 746,475$ 704,379$ Restricted 80,366 61,969 79,355 72,024 79,183 Unrestricted (194,311) 142,690 119,671 116,784 100,499 Total Primary Government Net Position 644,183$ 964,254$ 962,179$ 935,283$ 884,061$ Expenses: Governmental Activities: 2015 2014 2013 2012 2011 City Council 270$ 258$ 271$ 310$ 300$ City Manager 3,302 3,878 1,583 1,767 1,502 City Treasurer 158 169 132 141 1,274 City Attorney 2,284 2,321 2,221 2,313 2,354 City Clerk 855 747 797 689 813 Finance 5,208 5,314 4,825 4,573 3,423 Human Resources***** 5,169 4,616 5,032 4,743 4,792 Community Development* 6,605 7,091 6,155 6,123 6,036 Fire 42,162 43,194 36,323 35,336 35,393 Information Services 6,552 6,456 6,096 5,857 5,909 Police 64,048 66,681 60,466 60,690 60,192 Economic Development** - - 8,395 3,703 10,876 Community Services 13,809 12,509 15,521 15,586 16,104 Library Services 4,246 4,024 3,873 3,777 3,838 Public Works 27,979 31,691 28,500 26,508 27,232 Non-Departmental**** 24,080 21,602 25,563 19,190 19,595 Interest on Long-Term Debt 2,245 1,946 2,289 2,376 6,287 Total Governmental Activities 208,972 212,497 208,042 193,682 205,920 Business-Type Activities Water Utility 38,614 41,499 38,446 37,437 31,712 Sewer Service 8,192 9,712 7,253 7,623 6,338 Refuse Collection 11,308 11,145 10,882 10,785 10,690 Hazmat Service 204 231 220 216 243 Total Business-Type Activities 58,318 62,587 56,801 56,061 48,983 Total Business and Government Type Activities 267,290$ 275,084$ 264,843$ 249,743$ 254,903$ CITY OF HUNTINGTON BEACH CITY OF HUNTINGTON BEACH NET POSITION BY COMPONENT - LAST TEN FISCAL YEARS (In Thousands) (continued) Fiscal Year Ended September 30, September 30, CHANGES IN NET POSITION - LAST TEN FISCAL YEARS (In Thousands) (continued) Fiscal Year Ended 172 518 Program Revenues: Governmental Activities: 2020 2019 2018*** 2017 2016 Charges for Services City Council 177$ 149$ 91$ 108$ 116$ City Manager 5,315 3,300 2,374 3,515 3,029 City Treasurer 163 135 81 100 101 City Attorney 7 7 4 5 4 City Clerk 220 327 229 257 201 Finance 3,302 2,899 1,746 2,047 2,277 Human Resources*****- 751 373 654 513 Community Development*10,037 7,459 5,448 7,448 9,252 Fire 10,122 9,831 9,104 10,296 9,894 Information Services 636 628 381 501 521 Police 5,329 6,044 4,703 4,968 5,958 Economic Development**17,631 - - - - Community Services 266 23,530 19,245 21,693 18,853 Library Services 6,614 308 237 476 408 Public Works - 6,368 4,392 5,392 5,733 Non-Departmental****- - 916 1,116 1,290 Total Charges for Services 59,819 61,736 49,324 58,576 58,150 Operating Grants 8,141 6,644 3,976 7,329 4,723 Capital Grants 14,483 8,361 6,055 3,408 5,939 Total Governmental Activities Program Revenue 82,443 76,741 59,355 69,313 68,812 Business-Type Activities: Water Utility 40,518 43,958 29,530 39,938 35,765 Sewer Service 10,900 11,868 8,362 10,854 11,280 Refuse Collection 12,573 12,022 8,820 11,282 11,215 Hazmat Service 279 276 25 287 235 Total Business-Type Activities Program Revenues 64,270 68,124 46,737 62,361 58,495 Total Primary Government Program Revenue 146,713 144,865 106,092 131,674 127,307 Net (Expense) Revenue: Governmental Activities:(182,597) (163,458) (83,913) (191,807) (172,213) Business-Type Activities (2,865) 2,992 3,163 (3,975) (3,398) Total Net (Expense) Revenue (185,462) (160,466) (80,750) (195,782) (175,611) General Revenue and Other Changes in Net Position Governmental Activities: Property Taxes 94,263 89,124 61,185 82,925 87,128 Sales Taxes 44,616 47,437 33,844 43,551 34,289 Utility Taxes 18,149 18,788 14,014 19,303 19,482 Other Taxes 18,635 20,227 14,883 17,991 17,313 Use of Money and Property 3,208 8,746 2,158 3,370 3,618 From Other Agencies 3,317 4,046 2,263 3,896 4,397 Other - - 2,811 2,438 5,693 Transfers (38) (37) (332) (51) (38) Total Governmental Activities General Revenues 182,150 188,331 130,826 173,423 171,882 Business-T ype Activities: Use of Money and Property 2,746 3,235 279 462 939 Transfers 38 37 332 51 38 Total Business-Type Activities General Revenues 2,784 3,272 611 513 977 Total General Revenues and Transfers 184,934 191,603 131,437 173,936 172,859 Extraordinary Gain- - - - - Changes in Net Position - Governmental Activities (447) 24,873 46,913 (18,384) (331) Changes in Net Position - Business-Type Activities (81) 6,264 3,774 (3,462) (2,421) Net Position - Beginning of Year 682,944 651,807 618,500 639,484 642,236 Prior Period Adjustment - Governmental Activities - - (17,788) 862 - Prior Period Adjustment - Business-Type Activities - - 408 - - Net Position - Beginning of Year as restated 682,944 651,807 601,120 640,346 642,236 Net Position - End of Year 682,416$ 682,944$ 651,807$ 618,500$ 639,484$ * Planning and Building departments were combined in the year ended September 30, 2011. The combined department was later renamed to Community Development in the year ended September 30, 2016. ** Economic Development was combined with Community Development in the year ended June 30, 2020. Previously, it was combined with the City Manager's Office as of the year ended September 30, 2014. *** The 2018 period reflects nine months of activity only as the fiscal year change resulted in reporting period from October 1, 2017 to June 30, 2018. **** Beginning with the fiscal year ended June 30, 2019, non-departmental expenditures are no longer presented separately but are included as part of functional expenditures. ***** Human Resources was combined with the City Manager's Office in the year ended June 30, 2020. June 30, September 30, Fiscal Year Ended CHANGES IN NET POSITION - LAST TEN FISCAL YEARS CITY OF HUNTINGTON BEACH (In Thousands) 173 519 Program Revenues: Governmental Activities: 2015 2014 2013 2012 2011 Charges for Services City Council 71$ 68$ 66$ 65$ 63$ City Manager 2,994 2,835 134 130 127 City Treasurer 639 621 602 585 568 City Attorney 143 139 135 131 127 City Clerk 199 321 248 170 98 Finance 1,353 1,313 1,275 1,238 1,202 Human Resources*****1,263 2,499 1,236 1,150 1,117 Community Development*10,670 9,357 9,411 7,706 6,084 Fire 8,625 8,672 9,482 9,497 8,632 Information Services 834 809 786 763 741 Police 5,512 5,170 4,653 5,073 5,207 Economic Development**- - 2,505 2,303 2,800 Community Services 18,569 18,055 17,832 17,792 15,345 Library Services 495 434 634 466 325 Public Works 6,474 6,367 7,315 5,482 5,638 Non-Departmental****327 318 306 281 273 Total Charges for Services 58,168 56,978 56,620 52,832 48,347 Operating Grants 7,458 7,958 7,303 5,088 8,914 Capital Grants 9,809 5,486 7,191 6,624 5,198 Total Governmental Activities Program Revenue 75,435 70,422 71,114 64,544 62,459 Business-Type Activities: Water Utility 35,350 36,944 38,679 35,926 34,583 Sewer Service 11,239 10,665 12,267 11,546 10,532 Refuse Collection 11,221 11,006 10,950 10,786 10,631 Hazmat Service 222 183 278 154 383 Total Business-Type Activities Program Revenues 58,032 58,798 62,174 58,412 56,129 Total Primary Government Program Revenue 133,467 129,220 133,288 122,956 118,588 Net (Expense) Revenue: Governmental Activities: (133,537) (142,075) (136,928) (129,138) (143,461) Business-Type Activities (286) (3,789) 5,373 2,351 7,146 Total Net (Expense) Revenue (133,823) (145,864) (131,555) (126,787) (136,315) General Revenue and Other Changes in Net Position Governmental Activities: Property Taxes 82,615 81,355 74,795 74,856 86,056 Sales Taxes 33,063 29,243 30,276 30,051 25,339 Utility Taxes 20,229 20,621 20,764 20,152 19,135 Other Taxes 16,464 15,601 14,568 12,930 13,368 Use of Money and Property 5,551 3,725 2,816 3,434 3,239 From Other Agencies 5,653 4,279 6,003 6,585 5,647 Other 4,440 6,903 5,240 4,941 3,060 Transfers 35 (38) (38) (38) (38) Total Governmental Activities General Revenues 168,050 161,689 154,424 152,911 155,806 Business-Type Activities: Use of Money and Property 1,281 1,015 137 1,100 1,135 Transfers (35) 38 38 38 38 Total Business-Type Activities General Revenues 1,246 1,053 175 1,138 1,173 Total General Revenues and Transfers 169,296 162,742 154,599 154,049 156,979 Extraordinary Gain - - (4,669) 23,960 - Changes in Net Position - Governmental Activities 34,513 19,614 12,827 47,733 12,345 Changes in Net Position - Business-Type Activities 960 (2,736) 5,548 3,489 8,319 Net Position - Beginning of Year 964,254 962,179 935,283 884,061 863,397 Prior Period Adjustment - Governmental Activities (333,677) (457) 719 - - Prior Period Adjustment - Business-Type Activities (23,814) (14,346) 7,802 - - Net Position - Beginning of Year as restated 606,763 947,376 943,804 884,061 863,397 Net Position - End of Year 642,236$ 964,254$ 962,179$ 935,283$ 884,061$ (continued) September 30, CITY OF HUNTINGTON BEACH CHANGES IN NET POSITION - LAST TEN FISCAL YEARS (In Thousands) Fiscal Year Ended 174 520 2020 2019 2018 2017 2016 General Fund: Nonspendable 120$ 23$ 41$ -$ -$ Restricted 9,320 8,154 6,384 2,671 2,637 Committed 25,010 25,011 25,011 25,011 25,011 Assigned 45,638 45,825 34,464 33,498 35,199 Unassigned - - 2,734 - - Total General Fund 80,088$ 79,013$ 68,634$ 61,180$ 62,847$ Other Governmental Funds: Nonspendable -$ 64$ 726$ -$ -$ Restricted 57,675 59,213 52,742 40,588 40,293 Committed 21,735 20,308 20,800 17,686 21,368 Assigned 3,527 3,614 2,701 826 838 Total Other Governmental Funds 82,937$ 83,199$ 76,969$ 59,100$ 62,499$ 2015 2014 2013 2012 2011 General Fund: Nonspendable 4,479$ 4,378$ 4,040$ 4,633$ 10,841$ Restricted 2,871 2,070 1,878 1,387 1,304 Committed 25,011 25,011 24,011 - - Assigned 32,431 29,595 24,578 48,415 42,411 Unassigned - - - - - Total General Fund 64,792$ 61,054$ 54,507$ 54,435$ 54,556$ Other Governmental Funds: Restricted 45,515$ 27,214$ 27,425$ 27,722$ 32,519$ Committed 21,659 16,447 11,098 6,745 4,049 Assigned 161 151 316 1,181 1,711 Unassigned - - (210) (395) (4,377) Total Other Governmental Funds 67,335$ 43,812$ 38,629$ 35,253$ 33,902$ Fiscal Year Ended September 30, CITY OF HUNTINGTON BEACH FUND BALANCES - GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (In Thousands) (Modified Accrual Basis of Accounting) Fiscal Year Ended June 30,Fiscal Year Ended September 30, 175 521 THIS PAGE INTENTIONALLY LEFT BLANK 176 522 2020 2019 2018* 2017 2016 REVENUES: Property Taxes 94,263$ 89,367$ 80,614$ 80,826$ 86,382$ Sales Taxes 44,616 47,437 33,844 43,551 39,305 Utility Taxes 18,149 18,788 14,014 19,303 19,482 Other Taxes 24,578 27,196 18,409 17,991 17,313 Licenses and Permits 11,266 8,574 6,293 8,812 9,820 Fines and Forfeitures 3,403 4,300 3,048 3,995 5,144 From Use of Money and Property 27,863 23,276 11,600 17,210 18,055 From Other Agencies 11,309 13,072 10,384 15,293 13,712 Charges for Current Service/Other Revenue 34,772 33,787 30,216 32,351 32,506 TOTAL REVENUES 270,219 265,797 208,422 239,332 241,719 EXPENDITURES Current: City Council 394 369 279 333 318 City Manager 4,342 6,598 3,143 4,116 3,092 City Treasurer 297 248 134 201 204 City Attorney 2,898 2,874 2,037 3,052 2,539 City Clerk 886 981 602 830 790 Finance 6,200 6,484 4,376 5,763 5,659 Human Resources****** - 6,362 5,323 5,535 6,776 Community Development** 14,692 8,138 5,554 6,963 7,062 Fire 56,477 54,431 36,347 46,831 46,200 Information Systems 8,473 8,342 5,385 6,603 6,742 Police 87,682 83,546 57,916 75,015 72,612 Economic Development*** - - - - - Community Services 14,429 11,720 7,958 14,124 10,768 Library Services 5,199 4,944 3,436 4,422 4,247 Public Works 47,655 46,878 30,357 38,635 23,659 Non-Departmental***** - - 22,432 28,396 24,670 Capital Outlay**** - - - - 27,269 Debt Service: Principal 5,122 5,346 311 5,091 5,933 Interest 1,748 1,890 965 2,066 2,138 TOTAL EXPENDITURES 256,494 249,151 186,555 247,976 250,678 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 13,725 16,646 21,867 (8,644) (8,959) OTHER FINANCING SOURCES (USES): Transfers In 10,009 11,190 13,261 6,692 9,034 Issuance of Long-Term Debt 1,172 - - 2,767 10,197 Issuance Premium - - - - - Payments to Escrow - - - - - Transfers Out (10,047) (11,227) (13,593) (6,743) (17,053) TOTAL OTHER FINANCING SOURCES (USES)1,134 (37) (332) 2,716 2,178 Extraordinary Item - Dissolution of RDA - - - - - INCREASE (DECREASE) IN FUND BALANCES 14,859$ 16,609$ 21,535$ (5,928)$ (6,781)$ DEBT SERVICE AS A PERCENTAGE OF NON-CAPITAL EXPENDITURES 3.0% 3.3% 0.7% 3.2% 3.6% * The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018. ** Planning and Building departments were combined in the year ended September 30, 2011. The department was later renamed to Community Development in the year ended September 30, 2016. *** Economic Development was combined with Community Development in the year ended June 30, 2020. Previously, it was combined with the City Manager's Office as of the year ended September 30, 2014. **** Beginning with the fiscal year ended September 30, 2017, capital outlay expenditures are no longer presented separately but are included as part of functional expenditures. However, capital outlay expenditures are excluded in the calculation of debt service as a percentage of non-capital expenditures. ***** Beginning with the fiscal year ended June 30, 2019, non-departmental expenditures are no longer presented separately but are included as part of functional expenditures. ****** Human Resources was combined with the City Manager's Office in the year ended June 30, 2020. (Modified Accrual Basis of Accounting) Fiscal Year Ended June 30, September 30, CITY OF HUNTINGTON BEACH CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (In Thousands) 177 523 2015 2014 2013 2012 2011 REVENUES: Property Taxes 82,472$ 79,460$ 74,442$ 74,554$ 85,869$ Sales Taxes 32,234 30,454 29,763 29,126 25,034 Utility Taxes 20,229 20,621 20,764 20,152 19,135 Other Taxes 16,464 15,601 14,568 12,930 13,368 Licenses and Permits 9,270 7,976 9,880 7,773 6,728 Fines and Forfeitures 4,746 4,392 4,058 4,252 4,334 From Use of Money and Property 17,473 16,695 16,046 16,855 15,660 From Other Agencies 18,634 16,804 18,237 18,537 17,659 Charges for Current Service/Other Revenue 35,869 33,886 34,150 30,051 26,996 TOTAL REVENUES 237,391 225,889 221,908 214,230 214,783 EXPENDITURES Current: City Council 278 258 260 310 300 City Manager 2,703 3,040 1,574 1,758 1,493 City Treasurer 167 169 132 141 1,274 City Attorney 2,425 2,321 2,221 2,313 2,354 City Clerk 895 747 797 689 798 Finance 5,452 5,314 4,825 4,573 3,423 Human Resources******4,606 4,298 5,661 5,213 6,106 Community Development**6,954 7,091 6,155 6,119 6,034 Fire 45,008 42,602 35,920 35,145 34,546 Information Systems 6,846 6,456 6,096 5,857 5,879 Police 68,940 66,628 60,460 60,249 59,546 Economic Development***- - 7,012 3,389 13,784 Community Services 10,223 10,040 13,952 14,082 13,724 Library Services 4,146 3,739 3,588 3,492 3,546 Public Works 23,820 22,872 22,169 22,666 19,006 Non-Departmental*****20,067 21,033 19,684 15,455 14,914 Capital Outlay****14,986 10,729 10,745 11,096 6,872 Debt Service: Principal 5,454 4,797 9,381 6,012 9,446 Interest 2,226 1,987 2,321 2,564 6,397 TOTAL EXPENDITURES 225,196 214,121 212,953 201,123 209,442 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 12,195 11,768 8,955 13,107 5,341 OTHER FINANCING SOURCES (USES): Transfers In 12,158 9,832 9,501 18,904 27,385 Issuance of Long-Term Debt - - - - 36,275 Issuance Premium - - - - 1,884 Payments to Escrow - - - - (37,601) Transfers Out (14,238) (9,870) (10,339) (18,942) (27,423) TOTAL OTHER FINANCING SOURCES (USES)(2,080) (38) (838) (38) 520 Extraordinary Item - Dissolution of RDA - - (4,669) (11,839) - INCREASE (DECREASE) IN FUND BALANCES 10,115$ 11,730$ 3,448$ 1,230$ 5,861$ DEBT SERVICE AS A PERCENTAGE OF NON-CAPITAL EXPENDITURES 3.7% 3.3% 5.8% 4.5% 7.8% September 30, (Modified Accrual Basis of Accounting) Fiscal Year Ended CITY OF HUNTINGTON BEACH CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (In Thousands) 178 524 Fiscal Year Common Property Public Utilities Total Secured Unsecured Total Assessed Valuation Total Direct Tax Rate 2010-2011 25,513,584 70,602 25,584,186 1,090,869 26,675,055 0.17082 2011-2012 25,480,770 72,602 25,553,372 1,170,004 26,723,376 0.17082 2012-2013 26,927,738 60,802 26,988,540 1,056,938 28,045,478 0.17082 2013-2014 28,005,989 53,702 28,059,691 1,106,038 29,165,729 0.17082 2014-2015 29,723,274 74,102 29,797,376 989,809 30,787,185 0.17082 2015-2016 31,193,211 66,802 31,260,013 1,132,728 32,392,741 0.17082 2016-2017 32,540,317 55,802 32,596,119 1,067,760 33,663,879 0.17082 2017-2018 34,199,035 41,102 34,240,137 1,100,077 35,340,214 0.17082 2018-2019 35,941,648 61,202 36,002,850 1,117,879 37,120,729 0.17082 2019-2020 37,741,095 518 37,741,613 1,145,838 38,887,451 0.17082 Source: County of Orange Auditor Controller Fiscal Year City Basic Rate (1), (2) City Other School Districts Metro Water District Others 2010-2011 0.15582 0.01500 0.58252 0.00370 0.32548 1.08252 2011-2012 0.15582 0.01500 0.58334 0.00370 0.32513 1.08299 2012-2013 0.15582 0.01500 0.60412 0.00350 0.30798 1.08642 2013-2014 0.15582 0.01500 0.59841 0.00350 0.31444 1.08717 2014-2015 0.15582 0.01500 0.62448 0.00350 0.29444 1.09324 2015-2016 0.15582 0.01500 0.07615 0.00350 0.84418 1.09465 2016-2017 0.15582 0.01500 0.07786 0.00350 0.83599 1.08817 2017-2018 0.15582 0.01500 0.09970 0.00350 0.84418 1.11820 2018-2019 0.15582 0.01500 0.09246 0.00350 0.84418 1.11096 2019-2020 0.15582 0.01500 0.08788 0.00350 0.84418 1.10638 Note: Rates are per $100 of assessed valuation Source: County of Orange Auditor Controller (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 resides. 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. Direct Total Direct and Overlapping Overlapping CITY OF HUNTINGTON BEACH ASSESSED AND ACTUAL VALUATION OF ALL TAXABLE PROPERTY (EXCLUDING REDEVELOPMENT AGENCY) LAST TEN FISCAL YEARS LAST TEN FISCAL YEARS (In Thousands) PROPERTY TAX RATES ALL DIRECT AND OVERLAPPING GOVERNMENTS TAX RATE 04-001 LARGEST AREA IN CITY 179 525 Fiscal Year Total Levy Amount Percentage of Levy Delinquent Tax Collections*Amount Percentage of Levy Delinquent Taxes Receivable Delinquency Percent Secured Taxes 2010-2011 44,014 42,233 96.0% 1,339 43,572 99.0% 746 1.7% 2011-2012 44,304 42,611 96.2% 951 43,562 98.3% 660 1.5% 2012-2013 47,162 45,722 96.9% 855 46,577 98.8% 565 1.2% 2013-2014 49,808 48,452 97.3% 656 49,108 98.6% 545 1.1% 2014-2015 52,188 50,759 97.3% 576 51,335 98.4% 519 1.0% 2015-2016 55,886 53,916 96.5% 546 54,462 97.5% 1,263 2.3% 2016-2017 58,258 56,481 96.9% 525 57,006 97.9% 1,253 2.2% 2017-2018 62,418 59,731 95.7% 474 60,205 96.5% 2,073 3.3% 2018-2019 63,934 62,222 97.3% 622 62,844 98.3% 920 1.4% 2019-2020 66,411 64,767 97.5% 496 65,263 98.3% 1,092 1.6% Unsecured Taxes 2010-2011 1,940 1,739 89.6%22 1,761 90.8%75 3.9% 2011-2012 1,863 1,731 92.9%28 1,759 94.4%68 3.7% 2012-2013 1,882 1,653 87.8%23 1,676 89.1%62 3.3% 2013-2014 1,922 1,693 88.1%33 1,726 89.8%76 4.0% 2014-2015 2,016 1,839 91.2%37 1,876 93.1%69 3.4% 2015-2016 1,925 1,740 90.4%35 1,775 92.2%39 2.0% 2016-2017 1,899 1,692 89.1%23 1,715 90.3%34 1.8% 2017-2018 1,964 1,829 93.1%28 1,857 94.6%26 1.3% 2018-2019 1,964 1,804 91.9%20 1,824 92.9%29 1.5% 2019-2020 2,038 1,906 93.5%15 1,921 94.3%43 2.1% Community Facilities Districts 2010-2011 3,850 3,838 99.7%- 3,838 99.7%1 0.0% 2011-2012 4,106 4,091 99.6%3 4,094 99.7%2 0.0% 2012-2013 4,093 4,077 99.6%4 4,081 99.7%4 0.1% 2013-2014 3,968 3,957 99.7%6 3,963 99.9%- 0.0% 2014-2015 3,981 3,967 99.6%1 3,968 99.7%2 0.1% 2015-2016 4,121 4,106 99.6%9 4,115 99.9%2 0.0% 2016-2017 4,098 4,085 99.7%2 4,087 99.7%- 0.0% 2017-2018 4,141 4,128 99.7%5 4,133 99.8%- 0.0% 2018-2019 4,099 4,086 99.7%3 4,089 99.8%1 0.0% 2019-2020 4,053 4,027 99.4%2 4,029 99.4%14 0.3% * Delinquency tax collections information not available prior to fiscal year 2004-2005 Note: The levy and tax year is for July 1st through June 30th and does not include the Redevelopment Agency Note: 2002/2003 to current fiscal year includes the following: Unsecured: includes aircraft unsecured tax. Does not include CFD. Miscellaneous: excluded from all tables. Delinquency Amount: reflects the "unpaid" amounts as stated in the OC auditor-controller website. Secured: includes supplemental, st ltg reorg, nuisance abatement, weed abatement, retirement override, tax admin charges, and community interest. Does not include CFD. CITY OF HUNTINGTON BEACH Collected within the Fiscal Year of the Levy Total Collections Source: County of Orange Auditor Controller's Office (In Thousands) LAST TEN FISCAL YEARS PROPERTY TAX LEVIES AND COLLECTIONS 180 526 2019-2020 Taxable Assessed Value Percent (In Thousands) of Total TAV AES Huntington Beach Energy, LLC 420,264$ 1.08% Bella Terra Associates LLC 381,693 0.98% SoCal Holdings LLC 274,824 0.71% McDonnell Douglas/Boeing 221,121 0.57% PCH Beach Resort LLC 219,135 0.56% DCO Pacific City LLC 217,022 0.56% Elan Multifamily LLC 136,292 0.35% Monogram Residential HB Proj 135,586 0.35% The Waterfront Hotel LLC 125,333 0.32% One Pacific Plaza Owner LLC 124,500 0.32% Total Top Ten 2,255,770 5.80% All Other Property Taxpayers 36,631,681 94.20% City Total 38,887,451$ 100.00% 2010-2011 Taxable Assessed Value Percent (In Thousands) of Total TAV The Boeing Company/McDonnell Douglas Corporation 371,433$ 1.39% Bella Terra Associates LLC 299,105 1.12% Mayer Financial LP 185,072 0.69% CIM Huntington LLC 145,017 0.54% Pacific Sands LLC 83,339 0.31% AES Huntington Beach LLC 70,600 0.26% United Dominion Realty LP 68,156 0.26% Seacliff Village Shopping Center Inc 64,001 0.24% Cambro Manufacturing Company 62,458 0.23% NF Huntington Plaza LP 60,861 0.23% Total Top Ten 1,410,042 5.29% All Other Property Taxpayers 25,265,013 94.71% City Total 26,675,055$ 100.00% Source: HdL Coren & Cone Note: Information provided for the period from July 1st through June 30th. TOP TEN PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO CITY OF HUNTINGTON BEACH 181 527 THIS PAGE INTENTIONALLY LEFT BLANK 182 528 Long-Term Indebtedness 2020 2019 2018*** 2017 2016 Governmental Activities: Judgement Obligation Bonds -$ -$ -$ -$ 659$ Public Financing Authority: 2010(a) Lease Revenue Bond 7,410 8,235 9,030 9,030 9,795 2011(a) Lease Revenue Bond 15,725 17,770 19,735 19,735 21,650 2014(a) Lease Revenue Bond 12,530 13,145 13,740 13,740 14,315 Total Public Financing Authority 35,665 39,150 42,505 42,505 45,760 Redevelopment Agency: 1999 Tax Allocation Refunding Bonds - - - - - 2002 Tax Allocation Refunding Bonds - - - - - Mayer Disposition and Development Agreement - - - - - Bella Terra OPA (Parking)- - - - - CIM DDA (Parking & Infrastructure)- - - - - CIM DDA (Additional Parking)- - - - - Section 108 Loan RDA/Bowen Court - - - - - Total Redevelopment Agency - - - - - Other Long-Term Obligations: Capital Leases Payable 5,241 5,083 6,079 6,286 4,130 PARS Payable - - - - - Section 108 Loan City - - 430 430 625 LED Lighting Phase I 546 656 762 866 966 CEC 2,588 2,818 3,000 3,000 3,000 I-Bank 2,171 2,454 2,730 2,730 3,000 Total Other Long-Term Obligations 10,546 11,011 13,001 13,312 11,721 Total Long-Term Obligations - Governmental Activities 46,211$ 50,161$ 55,506$ 55,817$ 58,140$ Leases Payable -$ -$ -$ -$ -$ Total Long-Term Obligations - Business-Type Activities -$ -$ -$ -$ -$ Total Long Term Obligations - Governmental Activities and Business-Type Activities 46,211$ 50,161$ 55,506$ 55,817$ 58,140$ 2020 2019 2018*** 2017 2016 Population 200,748 202,265 201,761 202,413 201,919 Debt Per Capita 230$ 248$ 275$ 276$ 288$ Total Personal Income (In Thousands)*9,450,814$9,222,677$8,849,843$ 8,878,441$ 8,880,801$ Per Capita Personal Income*47,078$ 45,597$ 43,863$ 43,863$ 43,982$ Unemployment Rate**8.60% 2.60% 2.70% 2.80% 3.90% Total Employment**96,200 110,500 109,900 103,200 107,200 * Source: Claritas, Inc. ** Source: State of California Employment Development Department *** The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018. Fiscal Year Ended CITY OF HUNTINGTON BEACH RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (In Thousands) September 30, June 30, Long-Term Obligations - Business-Type Activities: 183 529 Long-Term Indebtedness 2015 2014 2013 2012 2011 Governmental Activities: Judgement Obligation Bonds 1,634$ 2,574$ 3,474$ 4,339$ 5,179$ Public Financing Authority: 2010(a) Lease Revenue Bond 10,525 11,230 11,910 12,565 13,200 2011(a) Lease Revenue Bond 24,985 28,165 31,195 34,155 36,275 2014(a) Lease Revenue Bond 14,865 - - - - Total Public Financing Authority 50,375 39,395 43,105 46,720 49,475 Redevelopment Agency: 1999 Tax Allocation Refunding Bonds - - - - 6,180 2002 Tax Allocation Refunding Bonds - - - - 13,525 Mayer Disposition and Development Agreement - - - - 5,803 Bella Terra OPA (Parking)- - - - 13,922 CIM DDA (Parking & Infrastructure)- - - - 7,288 CIM DDA (Additional Parking)- - - - 435 Section 108 Loan RDA/Bowen Court - - - - 3,997 Total Redevelopment Agency - - - - 51,150 Other Long-Term Obligations: Capital Leases Payable - - - 290 572 PARS Payable - 29 56 4,517 5,868 Section 108 Loan City 805 975 1,135 1,285 1,425 LED Lighting Phase I 1,063 - - - - CEC - - - - - I-Bank - - - - - Total Other Long-Term Obligations 1,868 1,004 1,191 6,092 7,865 Total Long-Term Obligations - Governmental Activities 53,877$ 42,973$ 47,770$ 57,151$ 113,669$ Leases Payable -$ -$ -$ 3$ 6$ Total Long-Term Obligations - Business-Type Activities -$ -$ -$ 3$ 6$ Total Long Term Obligations - Governmental Activities and Business-Type Activities 53,877$ 42,973$ 47,770$ 57,154$ 113,675$ 2015 2014 2013 2012 2011 Population 198,389 195,999 193,616 192,524 190,377 Debt Per Capita 272$ 219$ 247$ 297$ 597$ Total Personal Income (In Thousands)*8,725,545$8,278,410$7,839,899$ 7,573,894$ 7,356,548$ Per Capita Personal Income*43,982$ 42,237$ 40,492$ 39,340$ 38,642$ Unemployment Rate**3.90% 3.60% 3.60% 4.30% 6.30% Total Employment**104,000 120,200 120,200 119,600 115,100 September 30, Fiscal Year Ended CITY OF HUNTINGTON BEACH RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (In Thousands) Long-Term Obligations - Business-Type Activities: 184 530 2009-2010 - 2010-2011 - 2011-2012 - 2012-2013 - 2013-2014 - 2014-2015 - 2015-2016 - 2016-2017 - 2017-2018 - 2018-2019 - 2019-2020 - 37,120,729 4,454,487 4,454,487 33,663,879 4,039,665 4,039,665 35,340,214 4,240,826 4,240,826 30,787,185 3,694,462 3,694,462 32,392,741 3,887,129 3,887,129 28,045,478 3,365,457 3,365,457 29,165,729 3,499,887 3,499,887 26,675,055 3,201,007 3,201,007 26,723,376 3,206,805 3,206,805 (In Thousands) LEGAL DEBT MARGIN 38,887,451 4,666,494 4,666,494 CITY OF HUNTINGTON BEACH LAST TEN FISCAL YEARS Assessed Valuation Debt Limit - 12% of Assessed Valuation Debt Applicable to Limit Legal Debt MarginFiscal Year 26,411,890 3,169,427 3,169,427 185 531 2019/20 Assessed Valuation: $42,462,946,112 Debt Repaid with Property Taxes (Tax and Assessment Debt): Overlapping Tax and Assessment Debt Percent Applicable* Debt Applicable to City Metropolitan Water District 1.371% 511,383 Coast Community College District 28.561% 259,348,377 Huntington Beach Union High School District 73.021% 126,194,891 Fountain Valley School District 26.739% 14,027,279 Huntington Beach City School District 99.947% 88,821,861 Ocean View School District 93.503% 36,330,591 Westminster School District 23.804% 23,832,829 Los Alamitos Unified School District Facilities District No. 1 1.189% 1,812,395 City of Huntington Beach Community Facilities Districts (1990-1, 2000-1, 2002-1, 2003-1) 100.000% 30,205,000 Total Overlapping Tax and Assessment Debt 581,084,606$ Direct and Overlapping General Fund Debt Orange County General Fund Obligations 6.786% 26,244,516 Orange County Pension Obligations 6.786% 31,681,374 Orange County Board of Education Certificates of Participation 6.786% 877,430 North Orange County Regional Occupation Program Certificates of Participation 0.087% 7,787 Coast Community College District General Fund Obligations 28.561%742,586 Huntington Beach Union High School District Certificates of Participation 73.021% 45,697,338 Los Alamitos Unified School District Certificates of Participation 1.068% 408,895 Huntington Beach School District Certificates of Participation 99.947% 12,099,969 Ocean View School District Certificates of Participation 93.503%18,321,913 Westminster School District Certificates of Participation 23.804% 8,499,765 City of Huntington Beach General Fund Obligations:100.000% 45,038,000 Total Direct and Overlapping General Fund Obligation Debt 189,619,573$ Overlapping Tax Increment Debt (Successor Agency)100.000% 6,150,000 Total Direct Debt 45,038,000$ Total Overlapping Debt 731,816,179 Combined Total Debt 776,854,179$ (1) (1) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non-bonded capital lease obligations. Ratios to Adjusted Assessed Valuations Combined Direct Debt ($45,038,000)0.11% Combined Total Debt 1.83% Ratios to Redevelopment Successor Agency Incremental Valuation ($3,323,791,483) Total Overlapping Tax Increment Debt 0.19% Source: California Municipal Statistics and City of Huntington Beach Finance Department STATEMENT OF DIRECT AND OVERLAPPING BONDED DEBT JUNE 30, 2020 CITY OF HUNTINGTON BEACH * The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value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eneral Government:2020 2019 2018*** 2017 2016 2015 2014 2013 2012 2011 City Council 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 City Manager 22.00 12.50 12.50 11.50 11.50 11.50 11.50 7.00 7.00 7.00 City Treasurer 2.00 2.00 2.00 2.00 1.50 1.50 1.50 1.50 1.50 1.50 City Attorney 11.00 11.00 11.00 12.00 11.00 11.00 11.00 11.00 11.00 11.00 City Clerk 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 Finance 33.00 33.00 33.00 33.00 32.50 31.50 31.50 29.50 29.50 29.50 Human Resources**- 15.00 15.00 15.00 15.00 15.00 15.00 14.50 15.00 15.00 Community Development 49.50 44.00 44.00 44.00 43.50 44.00 43.00 42.75 42.75 43.75 Information Systems 30.00 30.00 30.00 30.00 30.00 30.00 30.00 29.50 29.50 29.50 Economic Development *- - - - - - 4.50 5.50 11.50 Library Services 28.25 28.25 28.25 28.25 28.25 28.25 28.25 27.75 27.75 29.75 Fire 198.00 198.00 198.00 198.00 198.00 198.00 196.50 176.50 176.50 176.50 Police 365.50 364.50 364.50 364.50 364.50 361.50 360.50 358.50 363.00 367.00 Community Services 36.00 36.00 36.00 44.00 44.00 43.00 43.00 56.00 61.00 61.00 Public Works 207.00 207.00 207.00 199.00 199.00 198.00 196.00 196.00 196.00 203.00 987.25 986.25 986.25 986.25 983.75 978.25 972.75 960.00 971.00 991.00 Source: Finance Department, City of Huntington Beach * Economic Development was combined with Community Development in the year ended June 30, 2020. Previously, it was combined with the City Manager's Office as of the year ended September 30, 2014. ** Human Resources was combined with the City Manager's Office in the year ended June 30, 2020. *** The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018. Actual CITY OF HUNTINGTON BEACH FULL-TIME ACTUAL AND BUDGETED CITY EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 188 534 Function/Program 2020 2019 2018*** 2017 2016 Finance: Water Bills Processed 636,708 639,245 476,290 632,997 635,052 Active Business Licenses 20,910 21,414 21,782 22,074 21,420 Accounts Receivable Billings Processed 25,687 30,217 25,000 34,963 30,826 City Clerk: Passports Issued 4,579 7,024 5,757 7,408 5,623 Planning: Entitlements Processed 162 221 206 216 221 Plan Reviews 1,358 1,542 1,466 1,376 1,653 Field Inspection Complaints 11,610 8,183 7,005 8,459 7,951 Code Violation Cases 3,260 4,786 4,219 3,981 4,324 Building: Number of Permits Issued 8,855 9,807 7,490 9,728 10,981 Number of Inspections Completed 32,859 36,562 30,501 38,796 39,380 Value of Construction Permits (Thousands of Dollars)169,393 135,910 109,462 216,252 283,910 Processed Number of Certificate of Occupancies*515 686 523 740 n/a Completed Plan Reviews 3,469 3,491 2,771 4,172 4,172 Counter Visits 14,922 21,409 16,498 21,731 23,492 Fire: Inspections 5,965 6,140 3,963 2,758 5,132 Responses 21,068 20,354 14,490 20,555 20,279 Ocean Rescues 2,487 4,953 3,530 3,639 3,977 Estimated Beach Visitors 6,712,125 10,577,290 12,522,640 13,339,518 12,272,030 Police: Physical Arrests 5,785 5,979 4,614 5,298 5,112 Parking Violations 59,484 79,069 54,500 70,846 90,361 Traffic Violations 12,105 13,314 11,869 19,916 17,639 Community Services: Park/Open Space Acreage 1,066 1,066 1,065 1,065 1,062 Enrollment in Recreation Classes 28,952 37,978 27,152 37,968 34,424 Public Works: Water Sold (Acre Feet)**25,966 26,251 19,777 25,944 24,505 Gallons of Sewage Pumped Per Day**19 million 19 million 19 million 22 million 19 million Library: Items in Collection 294,849 293,995 292,037 288,599 285,814 Items Borrowed 779,124 942,821 655,626 943,642 921,105 * Beginning the 2013/14 Fiscal Year, the Building Department no longer processes Certificate of Occupancies. ** Reduction of estimate is the result of the Governor's executive order to reduce water consumption. *** The 2017-18 period reflects nine months of activity only as the fiscal year change resulted in a nine month reporting period from October 1, 2017 to June 30, 2018. Source: Various departments of the City of Huntington Beach CITY OF HUNTINGTON BEACH OPERATING INDICATORS BY FUNCTION/ACTIVITY LAST TEN FISCAL YEARS 189 535 Function/Program 2015 2014 2013 2012 2011 Finance: Water Bills Processed 536,684 630,240 628,207 646,229 630,268 Active Business Licenses 21,424 20,450 21,127 22,304 21,903 Accounts Receivable Billings Processed 38,594 42,360 45,422 45,422 42,968 City Clerk: Passports Issued 5,121 4,598 4,220 3,850 3,082 Planning: Entitlements Processed 280 204 231 205 195 Plan Reviews 1,595 1,466 1,575 1,184 1,524 Field Inspection Complaints 8,233 7,030 7,301 6,105 6,064 Code Violation Cases 4,710 2,545 2,385 2,573 2,521 Building: Number of Permits Issued 10,670 9,348 8,970 8,444 8,413 Number of Inspections Completed 38,320 36,142 33,962 31,224 29,905 Value of Construction Permits (Thousands of Dollars)234,946 216,343 248,246 190,992 104,238 Processed Number of Certificate of Occupancies*n/a n/a 477 647 765 Completed Plan Reviews 3,815 3,148 n/a n/a n/a Counter Visits 21,893 21,326 20,854 19,777 20,288 Fire: Inspections 6,499 6,641 5,087 6,974 7,858 Responses 19,562 15,815 15,608 15,040 15,940 Ocean Rescues 5,371 6,426 4,195 4,669 3,845 Estimated Beach Visitors 11,803,943 12,035,134 11,016,615 8,906,592 7,840,968 Police: Physical Arrests 4,854 4,303 4,237 5,774 6,457 Parking Violations 83,453 74,668 72,347 77,282 77,261 Traffic Violations 17,596 16,330 13,016 16,916 16,770 Community Services: Park/Open Space Acreage 1,062 1,062 1,062 1,062 998 Enrollment in Recreation Classes 30,228 30,184 30,218 32,817 32,565 Public Works: Water Sold (Acre Feet)**24,763 29,279 28,354 27,784 26,868 Gallons of Sewage Pumped Per Day**19 million 22 million 22 million 22 million 22 million Library: Items in Collection 343,655 332,092 385,901 420,956 427,707 Items Borrowed 908,656 937,533 892,543 888,019 943,695 CITY OF HUNTINGTON BEACH OPERATING INDICATORS BY FUNCTION/ACTIVITY LAST TEN FISCAL YEARS (Continued) 190 536 Library Services One Main Library and Four Branches Fire: Fire Stations 8 Police: Stations One Main Station and Three Substations Community Services: Acreage of Parks 1,066 Community Centers 6 Public Works: Centerline Square Miles of Streets Maintained 450 Miles of Beach Maintained 4.7 Miles of Storm Drains Maintained 120 Miles of Sewer Maintained 363 Source: Various departments of the City of Huntington Beach JUNE 30, 2020 CAPITAL ASSET STATISTICS BY FUNCTION/ACTIVITY CITY OF HUNTINGTON BEACH 191 537 REQUIRED AUDIT COMMUNICATIONS Honorable Mayor and City Council City of Huntington Beach Huntington Beach, California We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Huntington Beach for the year ended June 30, 2020. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated December 16, 2020. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City of Huntington Beach are described in Note 1 to the financial statements. No new accounting policies were adopted, and the application of existing policies was not changed during 2020. We noted no transactions entered into by the City of Huntington Beach during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate(s) affecting the City of Huntington Beach’s financial statements was (were):  Judgements involving the estimated useful lives and depreciation methodology used for capital assets, including certain infrastructure  Judgements as to which City capital projects should be capitalized and depreciated in the government-wide financial statements and proprietary funds  Judgements relating to the collectability of accounts and notes receivable  Estimated Other Post Employment Benefit obligations  Judgements with respect to recording claims payable and remediation obligations  Estimated Net Pension liabilities The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. 538 Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The following immaterial misstatements detected as a result of audit procedures were not corrected by management: reporting of certain investments at fair market value, deposits payable that should be reported as revenues, understatement of interest revenue, understatement of unbilled receivables, and understatement of claims payable. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated December 16, 2020. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City of Huntington Beach’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City of Huntington Beach’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management’s discussion and analysis, budgetary comparison information for the General Fund and each major special revenue fund, schedule of funding progress, schedule of changes in net pension liability and related ratios, schedule of pension contributions, schedule of money-weighted rate of return, schedule of changes in net OPEB liability and related ratios and schedule of OPEB contributions, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI. 539 We were engaged to report on supplementary information, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on introductory section and the statistical section, which accompany the financial statements but are not RSI. Such information has 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 it. Restriction on Use This information is intended solely for the information and use of the City Council and management of the City of Huntington Beach and is not intended to be, and should not be, used by anyone other than these specified parties. Irvine, California December 16, 2020 540 1 Independent Accountants’ Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets City Council City of Huntington Beach Huntington Beach, California We have performed the procedures enumerated below, which were agreed to by the City of Huntington Beach, California and the League of California Cities (as presented in the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines) on the Appropriations Limit Worksheets for the year ended June 30, 2020. The City of Huntington Beach’s management is responsible for the Appropriations Limit Worksheets. The sufficiency of these procedures is solely the responsibility of the parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures enumerated below either for the purpose for which this report has been requested or for any other purpose. The procedures performed and the results of those procedures were as follows: 1. We obtained the worksheets referred to above and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned worksheets to those that were selected by a recorded vote. Results: No exceptions were noted as a result of our procedures. 2. We recalculated the mathematical computations reflected in the City worksheets. Results: No exceptions were noted as a result of our procedures. 3. We compared the current year information used to determine the current year limit and found that it agreed to worksheets prepared by the City and to information provided by the State Department of Finance. Results: No exceptions were noted as a result of our procedures. 4. We compared the amount of the prior year appropriations limit presented in the worksheets to the amount adopted by the City Council for the prior year. Results: No exceptions were noted as a result of our procedures. 541 2 This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the worksheets referred to above. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriation limit for the base year, as defined by the League publication entitled Article XIIIB Appropriations Limitation Uniform Guidelines. This report is intended solely for the information and use of the City of Huntington Beach, California, and is not intended to be, and should not be, used by anyone other than the specified parties. December 16, 2020 Irvine, California 542 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Air Quality Special Revenue Fund Performed in Accordance with Government Auditing Standards City Council City of Huntington Beach Huntington Beach, California We have audited, in accordance with the 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, Air Quality Management District Fund of the City of Huntington Beach, California, as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the Air Quality Management District Fund of the City of Huntington Beach’s basic financial statements, and have issued our report thereon dated December 16, 2020. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Air Quality Management District Fund's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Air Quality Management District Fund's internal control. Accordingly, we do not express an opinion on the effectiveness of the Air Quality Management District Fund's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 543 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Air Quality Management District Fund's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including applicable provisions of Assembly Bill 2766 (AB2766) Chapter 1705 (Health and Safety Code Sections 44220 through 44247), noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Irvine, California December 16, 2020 544 City of Huntington Beach File #:21-052 MEETING DATE:2/16/2021 REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO:Honorable Mayor and City Council Members SUBMITTED BY:Oliver Chi, City Manager PREPARED BY:Chris Slama, Director of Community & Library Services Subject: Approve for introduction Ordinance No. 4228 to amend Chapter 13.10 of the Huntington Beach Municipal Code Prohibiting the Storage of Personal Property on Public or Private Property Statement of Issue: The existing Huntington Beach Municipal Code (HBMC) Chapter 13.10 requires modification to prevent the storage of personal property within public spaces and upon publicly owned and maintained property, and to facilitate its removal when warranted. Additionally, while private property owners currently have the ability within and upon their property to remove and dispose of stored or abandoned items, there is currently no specific criminal statute to bring enforcement action. The storage of personal property within public spaces in Huntington Beach, including but not limited to parks, beaches, and sidewalks, is not consistent with the intended public use(s) of these locations, and the presence of unknown and potentially dangerous items creates an undue public safety concern for the users of these public spaces. The City of Huntington Beach responds regularly to quality of life complaints from residents related to the storage of personal property in public places including visible trash, discarded and clearly abandoned property, as well as unusable and unwanted property. In addition, hypodermic needles and syringes have been discovered among this property. Currently, City employees are limited in their ability to remove this property unless it is clearly refuse, or is soiled or otherwise contaminated to the degree that it poses a public health risk. Lastly, the current HBMC does not provide sufficient clarity related to enforcement , and is insufficient in ensuring the removal of stored property is conducted appropriately and within the law. The proposed ordinance provides clarity related to enforcement, including specific language related to the required noticing, signage, minimum-retention period, and procedures for community members to follow for the reclaiming of property. Financial Impact: Not applicable. City of Huntington Beach Printed on 2/10/2021Page 1 of 3 powered by Legistar™545 File #:21-052 MEETING DATE:2/16/2021 Recommended Action: Approve for introduction Ordinance No. 4228, “An Ordinance of the City of Huntington Beach Amending Chapter 13.10 of the Huntington Beach Municipal Code Prohibiting the Storage of Personal Property on Public or Private Property.” Alternative Action(s): Do not approve the recommended action and direct staff accordingly. Analysis: A review of similar ordinances in surrounding cities (Anaheim, Santa Ana, Westminster, and Costa Mesa), and consultation with representatives from those jurisdictions, has demonstrated a consistent approach to this issue and the need for the proposed modification. Further, civil litigation within Orange County and the region provides compelling support for the adoption of this amendment, as a prudent step in developing an effective strategy. In summary, revision of HBMC Chapter 13.10 related to the storage of property will provide much- needed clarity and procedures to allow for the lawful collection, temporary preservation, and prompt return of property to its owners, and will provide a much-needed tool to preserve limited public spaces for their safe and enjoyable intended uses. A summary of the changes are as follows: ·Added definition for “Stored Personal Property;” ·Added additional language to Section 13.10.040 - Storage of Personal Property on Public and Private Property; ·Added Section 13.10.041 - Impounding Stored Personal Property; ·Added Section 13.10.042 - Impounding Personal Property after Closure; ·Added Section 13.10.042 - Storage and Disposal of Impounded Personal Property; ·Added Section 13.10.044 - Dangerous or Perishable Stored Personal Property; and ·Added additional language to Section 13.10.090 - Violations-Penalty. Environmental Status: Not applicable. Strategic Plan Goal: Enhance and modernize public safety service delivery Attachment(s): 1. Ordinance No. 4228 to amend Chapter 13.10 of the Huntington Beach Municipal Code prohibiting the storage of personal property on public or private property 2. Legislative Draft of amendments to Chapter 13.10 of the Huntington Beach Municipal Code City of Huntington Beach Printed on 2/10/2021Page 2 of 3 powered by Legistar™546 File #:21-052 MEETING DATE:2/16/2021 City of Huntington Beach Printed on 2/10/2021Page 3 of 3 powered by Legistar™547 548 549 550 551 552 553 554 555